The Instigator
jimtimmy
Pro (for)
Losing
9 Points
The Contender
unitedandy
Con (against)
Winning
14 Points

Capitalism

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Voting Style: Open Point System: 7 Point
Started: 7/16/2011 Category: Economics
Updated: 3 years ago Status: Voting Period
Viewed: 7,732 times Debate No: 17527
Debate Rounds (3)
Comments (138)
Votes (5)

 

jimtimmy

Pro

I argue that Capitalism has brought prosperity and freedom to Millions.

Capitalism has, again and again, proven to be a successful system. It brings increased prosperity to all classes, from top to bottom.

If you look accross the world's nations, you can see how successful Capitalism is. The nations with Free Markets, Lower Taxes, Lower Spending, and more Stable Monetary Base are the most successful.

I don't just argue that capitalism is more successful than Socialism, but I also argue that free market capitalism is far more successful than the Social Democratic Economic system present in European Countries such as France, Spain, Italy, Germany, etc...

I argue that the slow economic growth in these countries relative to America (which has pursued a purer form of capitalism) in recent decades is an example of a freer economy performing better for all groups.
unitedandy

Con

Preliminaries

While Pro has not attempted to lay out a substantive case for capitalism thus far, I should say that my role in this debate need only be to critique Pro’s case for capitalism, as the resolution demands. That being said, I will present an affirmative view for a social democratic system in 3 specific areas, such is the difficulty placed by character limit. As my opponent stresses capitalism in its purest form to be “the most successful system, I only need show an area where some other system provides a better outcome and thus should be favoured to win the debate, and will leave it to my second post to critique my opponent’s case specifically, as his case is yet to be made.

Introduction

My first post will contend that a mixed market economy will be better than a capitalist system. This is because I contend the Government to more successful at producing healthcare for its citizens and protecting the social good through regulation, as well as insisting that Free-market capitalism does not, in fact, exist at all, except perhaps in the theoretical sphere.


A1- Utopianism

Now, while Pro uses America and others as examples of capitalist system, it should be noted that there is no country in the world which conforms to the capitalist ideal. All countries have a mixed economy, with even the USA having enormous government spending on entitlement programs, bailouts, extensive regulation. So one could end the debate here and now and follow Ghandi’s lead by dismissing capitalism as an idea, rather than a reality. This is due to several factors, one of which I will cover in A3 - that of externalities, but bearing in mind the resolution asks us to focus on free-market capitalism, the ironic thing here is that while the USA and similar countries might be more market-orientated than Sweden for example, they still engage in practices which many free-marketers (Friedman being the most obvious example) would regard as intrusive and unnecessary government intervention. In truth, free-market capitalism just doesn’t exist, nor is it feasible to exist, and as such a mixed market economy is far more favourable, if only on pragmatic reasons alone. Like socialism, some principles of the free-market might be possible to apply to certain areas in an economy, but, as we shall see, it becomes very difficult in even the most regular of occurrences to prioritise both its internal principles, and that of society at large.


Second, inherent in capitalism are assumptions to try and deal with the problem of scarcity. Things like perfect competition, perfect information and perfectly rational bargainers exist in textbooks, not in society. Moreover, much of these things are not even conceivably attainable. How on Earth would perfect information of the market ever be sustainable? What’s more when one realises how this impacts the economy, the values of capitalism would quickly diminish, even if they were somehow attainable. Market success quickly breeds barriers to entry, stifling competition and threatening efficiency and corruption. Winners and losers are decided not by efficiency and so forth but by failures of the market: advertising (to correct information deficit), corporate welfare (in reality, if not in theory) and restrictive practices, all of which leave us with us with a system which may work in theory, but in practice is very limited in meeting the needs of even its own goals.

Externalities

Currently, the government have to regulate in order to guard against what are known as externalities, which is the impact an economic action can have on a third party. Examples of this include things like pollution, chemical and oil spills. Obviously, these can have devastating impacts on the health, wealth and lifestyle of people totally unrelated to the economic activity. So things like the BP oil spill, which decimated the surrounding areas, the tourist industry and so on would be one example (1). Why is this important? Well, as long as these externalities exist, “even an otherwise perfect market will fail to achieve social efficiency.”(2) Given this, things like regulation through laws and taxation and the like (i.e government interference in the economy) are the only feasible way to deal with this problem. Only a set level of practise restriction, compliance with binding rules, and other means can we best deal with all the issues, with regards to the passive consumer’s rights, as opposed to the producer’s. Put simply, I contend that without extensive government intervention, there are no plausible means to deal with this, and would invite Pro to submit whatever solution he desires.

Healthcare

Finally, I submit that healthcare is best provided by the state, both because of the theoretical underpinning of such a model, and because of the empirical data available. First, due to economies of scale “costs per unit of output fall as the scale of production increases”, and this due to a number of reasons, such as the container principle, spreading overheads and greater efficiency (3). Obviously, in terms of research and development, sharing information is also possible here, which in the case of either production or drug effectiveness is a clear plus such a system has over it’s capitalist alternative.

On the empirical side, a WHO report (2000) (4) found that countries which had universal systems for disproportionately better than those without, with countries like France topping the poll, the UK performing well at 18th (despite a relatively low level of GDP spent), while the US spent more than any other country, but languished behind in 37th. The findings of the report was to “extend health insurance to as large a percentage of the population as possible.” The report concluded that:

"In many countries without a health insurance safety net, many families have to pay more than 100 percent of their income for health care when hit with sudden emergencies. In other words, illness forces them into debt."

Taking the UK & the USA as comparative examples of a predominately market-based system and a predominately socialised one: Britain’s socialised medicine has universal healthcare to all who seek it, prises better results, spends less on GDP, while the US system has millions uninsured, worse results, yet spends over double of its GDP on it (5)(6)(7), and this is typical, as the report above suggests, of state healthcare in comparison with largely market-based healthcare, to the extent that 89.9% of Britons would favour the NHS of US alternatives (8).

Lastly, given that productivity is measured on the basis of, among other things, health, the provision of free healthcare to all has far greater economic benefit than just as an employer and an active money saver, as well as the moral case for insisting healthcare for all who seek it.

Conclusion

Although Pro has the burden of proof, with regards the resolution, I have provided 3 areas with which to doubt the application of capitalism as more successful than its alternatives. In order to win the debate, Pro must fulfil his burden, as well as showing that each of these 3 cases fail to compel us to favour a mixed economy.

Sources

1. http://en.wikipedia.org...
2. Essentials of economics, John Sloman, 3rd edition P211
3. Ibid, P94-95
4. http://www.who.int...
5. http://www.robaldridge.org.uk...
6. http://www.visualeconomics.com...
7. http://www.guardian.co.uk...
8. http://www.guardian.co.uk...



Debate Round No. 1
jimtimmy

Pro

I thank my opponent for responding.

It is my intention to not only make a case for capitalism, but also respond to Con's points made. In this argument, I will do both:


I would like to start by pointing out on the fatal flaws of Capitalism's arch rivals, Communism, Socialism, and other Marxist Ideologies. I will then work this into my case for Capitalism. The first fatal flaw of these ideologies (Marxism, Socialism,Communism)is that they are based on incorrect views of Human Nature. Most Marxist ideologues operate on either a "Tabula Rasa" or "Noble Savage" view of Human Nature.

"Tabula Rasa", developed by many philosophers throughout history, holds that humans mental content is non existent at birth. Therefore, according to this theory,all of our personality traits, intelligence, and mental content are products of societal institutions.

The "Noble Savage", developed by Jean Jacques Rousseau of France, is quite similar, except it holds that Humans are actually born good (as in unselfish) but then corrupted by society as their life progresses.

These views of Human Nature led Communists to believe that self interest and differences in human minds are not an inherent part of human nature, but actually artifacts of society.

In fact, these assumptions on human nature were disastrously wrong, and we have the body count to prove it. Human Nature is not a product of environment, but is largely influenced by Genes. Most mental traits are heavily heritable. Another important insight is that Humans, like all organisms, are inherently self interested by nature.

Self Interest is at the heart of all human choices. This includes seemingly altruistic actions, like Charity. Which has been shown to be driven by a desire for wealthier members of society to flaunt their wealth in order to attract those of the opposite sex. Adam Smith explains the role of self interest in any economy with a simple story:


"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."


Capitalism, unlike any other system, allows the self interest of millions, or even billions, of economic agents (people) to maximize utility (aggregate happiness). Again, Adam Smith explained this beautifully:


"By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it."


The idea that millions of people pursuing their own self interest is best for society may seem odd at first. However, capitalism has certainly worked in practice. If you look at the world, the most prosperous nations also have the freest economies.

Of course, my opponent is not a communist. He is an advocate of Social Democracy (from what I understand). This is very different from communism. However, the same issues are at hand in this system. Nobel Prize Winning Economist Edward Prescott looked at Tax Rates effect on Hours Worked and found that the social democratic systems in Western Europe, and the high taxes they entail, significantly disincentivize work effort:


"Americans now work 50 percent more than do the Germans, French, and Italians.
This was not the case in the early 1970s, when the Western Europeans
worked more than Americans. This article examines the role of taxes in accounting
for the differences in labor supply across time and across countries;
in particular, the effective marginal tax rate on labor income. The population of
countries considered is the G-7 countries, which are major advanced industrial
countries. The surprising finding is that this marginal tax rate accounts for the
predominance of differences at points in time and the large change in relative
labor supply over time."


Europeans are not simply lazy, they are rational. In Europe, high taxes and high welfare payments have made work much less attractive relative to leisure, leading to less work effort in European Social Democracies.

Granted, the goal of capitalism is not to get people to work more. It is to improve standards of living. Even most European Welfare states have the three key elements that allow capitalism to work: Property Rights, Stable Money, and Stable Government.

Capitalism gives entrepreneurs an incentive to create new things and improve old things to meet consumer demand. Of course, they only do it for their own profit, perfectly in line with Adam Smith's theory.

This is the core of my case for capitalism. Humans, by nature, pursue their own economic self interest and only capitalism can hone that reality into a social good.


Now, I will respond to some points made by Con:


Utopia?



Pure Capitalism, as my opponent says, may never be a reality. However, that does not mean that we should try to move close to this type of system. The idea that Pure Capitalism may never be a reality does not do anything to rebut the notion that Capitalism is superior to all other economic systems in practice.

My opponent also seems to think that Capitalism relies on some assumptions that it does not actually rely on. Con said:


"Things like perfect competition, perfect information and perfectly rational bargainers exist in textbooks, not in society. Moreover, much of these things are not even conceivably attainable."


This is not what capitalists argue. We simply argue that reason underlies economic decisions, not irrationality. As far as perfect information and perfect rationality, neo classical models understand that these things are not always attainable. This is why they have been replaced by bounded rationality, where economic decisions are still guided by reason but also reflect limited information.

I also think my opponent underestimates the power of prices. Prices are at the center of all economics. In Capitalism, all relevant information is contained in the price. This largely eliminates the "perfect competition" problem brought up by my opponent.



Health Care

Finally, I come to Health Care (due to space limitations, externalities will have to be in my next argument)


The idea that Health Care Should function any different than other markets is odd. Like other markets, rational Consumers should compare costs and quality. Therefore, total health quality should go up as prices go down.

The main problems I have with my opponents argument here is that he assumes that the US Health Care System is market based, which it is not. It is deeply distorted by two large entitlements and a tax distortion which keeps people on prepaid private insurance.

This creates a problem with people paying for Health Care with somebody elses money, giving them no incentive to shop for lower prices. If Health Care did not have these distortions, quality would go up while prices would go down.

This is not just theoretical. Lasik Eye Surgery in America is not covered by insurance. Over the past 15 years, prices have fallen while quality has increased. The same is true of Cosmetic Surgery.

I also don't share Con's admiration of the NHS. He may see it as a more "just" system, but NHS patients get far lower quality care than American Patients. A Lancet Oncology Study on Cancer Survival found that, for all cancers in men, American Men had a five year survival rate of 66.3%. Scottish Men, covered by the NHS, survive 40.2% of the time.

On top of this the Commonwealth Fund found that 60% of UK physicians think that patients have excessive waiting times for diagnostic tests, compared to only 9% of American physicians. This is borne out by the fact that there are only 5.6 MRIs per capita and 7.6 CT Scans in the UK, vs 26.5 and 33.9 in the US

Sources:

http://www.minneapolisfed.org...

http://www.telegraph.co.uk...

http://en.wikipedia.org...

http://www.commonwealthfund.org...
unitedandy

Con

Introduction

In order to negate the resolution, all that I have to show is that there are reasons not to favour capitalism - both in terms of positive alternatives to it (health care and externalities), as well as refuting the basis for it. While both Pro and I agree that a broad market framework is best to allocate resources, I contend that this occur in a mixed economy, in order to be feasible and to deal with the failures of the market when it comes to specific areas.

Case for Capitalism


Human nature

I agree with Pro that in the main, people should be able to pursue their own interest, but see absolutely no reason to see why this cannot be incorporated into a social democratic system. It seems to me that Pro is essentially arguing for a point we both generally agree, and which is not exclusive to a capitalist system, nor a social democratic one. In fact, given my arguments for a mixed economic system - the fact that it is feasible (while pure capitalism, as my opponent admits, is not), as well as reliance one has on government regulation to prevent negative externalities which threaten one to pursue these interests. Pro has given no reason to even suggest why this point is remotely specific to a capitalist system, and, I would suggest, must do so in order to argue for capitalism on the basis of it.


Productivity and Tax

The first thing to say is Pro quoting the abstract of an article does not constitute an argument. Even if true, Pro has to use the facts and figures provided by the research and explain how these correlations = causation. He has not even attempted to do this, and so one could disregard Pro’s case immediately. Nevertheless, it is true that Americans do work more hours, but are they more productive? According to estimates from 2010, productivity measured per worker per hour is much higher in Norway, Luxembourg and the Netherlands - all of which are European countries (1). Also, the difference between French and US tax rates are negligible - a couple of percent lower in France with regards to corporate tax and a slightly higher income tax rate, so it’s questionable how accurate this analysis is (2). Lastly, much of the welfare apparatus in countries like Britain are actually used to incentives longer working hours, through Working Tax credits, for example.

In order to even make an argument here, Pro has to show that the differences in working hours are caused by tax increases, that these differences are significant, and that one should seek to change them. He has barely even made an argument in terms of any of these factors, let alone provided a comprehensive case for capitalism in most areas.



Case against capitalism

A1 Utopianism

As readers will recall, I gave some reasons to think that capitalism was an unrealisable goal:

1. Capitalism exists nowhere in the world, and all best approximations to a capitalist model have extensive state involvement in some way.

2. It could not exist, nor (if it ever did exist) could it be sustainable because it would rely on unachievable assumptions.

Given these 2 points, I argued that on pragmatic reasons alone, the mixed economy was the only feasible solution, and capitalism was not a viable alternative because it could never exist in reality.

Astonishingly, Pro agrees with 1 and 2, saying this:

“Pure capitalism may never be a reality . . . (this) does not do anything to rebut the notion that capitalism is superior to all other economic systems in practise.”

So Pro argues for capitalism, but is willing to concede that it may never exist. Now given that Pro criticises Communism for example because it has unrealistic interpretations with regard to human nature, and then concedes capitalism to be just as “assumptive” when trying to deal with complex societal problems is baffling to say the least. Secondly, Pro opines that neoclassical economics has shed much of the assumptions which I suggested, but this is exactly my point - the assumptions are dumped because they are inapplicable in the real world - they are utopian. Also, the level of assumptions of neoclassical economics is likewise “insufficiently unrealistic (and) largely based on outdated views of competition and entrepreneurial activity”, because things like market uncertainties cannot be calibrated, and one cannot act rationally (or even sufficiently rationally) with poor information, or when trying to predict things which are very volatile, such as consumer taste or changes in technology (3). Lastly, Pro’s comments about prices is again just begging the question. The price mechanism can only be effective if one has relevant information. Demand, for example, will not fluctuate at all, no matter what the price does, if people don’t know it is fluctuating. Price elasticity assumes a level of knowledge of market information, but given the huge problems with this, again, we are left to conclude that while capitalism may or may not be desirable in theory, in practise, it is at least problematic. This point has implications later on as well, and it is simply that capitalism, like certain forms of communism doesn’t deserve to be taken seriously, as one simply cannot employ it as an economic system.

A2 -Health care

The very first thing we see here from Pro is an application of A1. Pro states that US health care is not market-based. Of course it isn’t, it is broadly market-based, because as per A1, market-based health care, such as capitalism demands, doesn’t exist anywhere. Pro literally fails to make a case here, with his whole argument based upon claims with no sources, no empirical data and no theoretical framework. There is simply nothing to rebut.

Pro tries then tries a different strategy, criticising the NHS on the grounds that it offers “lower care”, and although he provides yet more unsourced figures (his last source links to a page not found), he did not deal with my empirical data, nor did he even address the claim that economies of scale and sharing information provide a theoretical framework for such a system. Instead, he hopes to combat this by providing figures seemingly from nowhere.

I argued that universal health care was better overall, and Pro fails to respond this, instead citing one example in health with the US performs well - cancer. While it may be the case that the US has better survival rates for cancer than Britain, this may be because it spends almost double, in terms of GDP (4). Also, the fact that one could look through this or that illness is irrelevant - the fact is that the only sourced empirical data we have to go on in this debate is that the UK health care system is better overall than its American counterpart - with better results across the board (in terms of life expectancy and so on), is more affordable, covers more people, employs around 1 million people and is indicative of an overall trend, like I sourced and stated before. Indeed, the WHO report classes France as the best health care system in the world, which is a universal health care system run by the government through a compulsory insurance scheme (5).

Due to the undeniable trend of better, cheaper, affordable health care being provided in social democratic systems all over the world, it seems not only is this an area where the government have a moral obligation to provide on the basis of need, and empirical justification to act on this imperative.

A3 -Externalities

No response. Extend all arguments.

Conclusion

Pro has failed to provide a compelling case for capitalism, which alone negates the resolution, and does not deny any of the arguments against capitalism, which he also must do.

Sources

1. http://en.wikipedia.org...(PPP)_per_hour_worked
2. http://en.wikipedia.org...
3. Industrial Organisation, Lipczynski et al, 2nd ed, Prentice Hall, Edinburgh. (p73-75)
4. http://news.bbc.co.uk...
5. http://www.who.int...










Debate Round No. 2
jimtimmy

Pro

In my last post, I attempted to make a case for capitalism based on human nature. My opponent asked a question that I did not adequately answer in my past post: Why does human nature render Social Democracy an inferior system to Capitalism?



Social Democracy and Human Nature



To me, this is a simple answer. Social Democracies can seem successful. However, this is because most social democratic countries have a strong capitalist foundation place (Property Rights, Sound Money, Stability). However, I argue that Social Democracy is a worse system than Capitalism.

My basis for this argument is quite simple, and I would assume my opponent agrees. High taxes and large welfare payments make leisure more preferable to work. Therefore, people in social democratic countries have less incentive to work hard and even get employed at all.

This brings me to my next point. The study I cited in my last post was from Nobel Prize Winner Edward Prescott. My opponent says:


"The first thing to say is Pro quoting the abstract of an article does not constitute an argument. Even if true, Pro has to use the facts and figures provided by the research and explain how these correlations = causation."


Fair enough. There is however reason to believe this is a case of causation. First, and most importantly, this is exactly what theory would predict. Mainstream economists are in pretty much agreement on the fact that higher welfare payments and higher taxes lead to less growth.

Second, there are no other explanations of this phenomenon that are not easily debunked. One idea is that Americans work more due to "cultural differences". However, this does not explain the fact that labor supply was the same or, in some cases, higher in European nations in the 1970s, when tax rates were similar.

Another plausible explanation, that Labor Unions are too blame for Europeans working less, also seems unlikely. This is because, in cases where countries are highly taxed but not highly unionized, work hours have also declined. Such a case would be France.

Thirdly, there is a bulk of subsequent research Bolstering Prescott's work. One example would be the work from Lee Ohanian, Andrea Raffo, and Richard Rogerson:


"We document large differences in trend changes in hours worked across OECD countries between 1956 and 2004. We assess the extent to which these changes are consistent with the intratemporal first order condition from the neoclassical growth model, augmented with taxes on labor income and consumption expenditures. We find that the model can account for most of the trend changes in hours worked measured in the data. Differences in taxes explain much of the variation in hours worked both over time and across countries."


This study also looked at the "Union" hypothesis and found that most measures of unionization did not correlate with hours worked like tax rates did.

Finally, renowned Economist Raj Chetty, using Firm Level Data in Denmark, finds that taxation does impact labor supply in a strong way.

I believe, given the data presented, there is a very little reason to doubt that high taxes have large harmful effects on the economy, through disincentivizing productive behavior.

My opponent makes some very odd claims to try to rebut this. First, he argues that GDP per hour is a better measure of how taxes affect work effort. Why would this be?

Labor Taxes have the effect of lowering hours worked. Even more oddly, he cites Norway and Luxembourg as examples. Norway, for one, is very rich in oil. It would be hard pressed to attribute their economic success to policy. Luxembourg is a small banking haven, another country that does little to show the success of social democracy.

The most odd argument is that France has the same tax levels as America. This is easily disproven by looking at simple numbers. The tax to GDP ratio, the measure commonly used to measure tax burden, is about 46% in France, vs 27% in America. That is a large difference.


Utopianism


As I said last time, I openly acknowledge that Pure Capitalism may be POLITICALLY unrealistic. However, if it could be implemented, it would be an excellent system. This is because, unlike Communism, it is economically realistic.
I know this sounds utopian, but it is not. I am arguing that Developed Countries should try to move towards purer capitalism, which is not politically unrealistic.

My opponent straw mans neoclassical economics numerous times. My point was that, in order for Neoclassical models to be accurate, perfect information is not required. All that Neoclassical models require are that humans are generally rational and self interested, assumptions that are very accurate. This is the idea of Bounded Rationality. Neoclassical Economics does not assume that all economic actors act in a completely rational way with perfect information all of the time. Instead, it assumes that most economic actors act somewhat rationally with sufficient information most of the time. Which is very different from the straw man my opponent is presenting.


Health Care


I readily acknowledge US health care will never be completely market based, the public would never support getting rid of Medicare, Medicaid, and the FDA. However, we can reform the system based on market principles. For example, we can take Paul Ryan's reform to Medicare seriously. This would not get rid of Medicare, but it would be a much more market based system.

I'm sorry if my link was broken. However, my sources were not cited. My stats on waiting times and diagnostic tests came straight from the Commonwealth Fund. My source for cancer survival rates were from the highly respected Lancet Oncology.

Anyway, my opponent seems to rely his entire empirical argument on this WHO Study:


"On the empirical side, a WHO report (2000) (4) found that countries which had universal systems for disproportionately better than those without, with countries like France topping the poll, the UK performing well at 18th (despite a relatively low level of GDP spent), while the US spent more than any other country, but languished behind in 37th. The findings of the report was to “extend health insurance to as large a percentage of the population as possible.”


First, he misrepresent the study he cites here. He implies that the US ranks 37th in the study despite spending a lot on Health Care. In fact, this study takes how much money spent into account. Without looking at cost this study ranked the US 15th in the world. It would be more accurate to say that the US ranked 15th despite spending alot of money.

However, there are more problems with this study. First, it is 11 years old, very outdated. Second, it uses terrible methodology. It relies on Health Inequalities, Health Status, Inequalities in Financing, and Responsiveness as its standards. I don't at all agree that health care system rankings should be based on the inequalities present in the systems, and Health Status has little to do with the Health Care System.

The one area in the study that is non controversial, responsiveness, the US is ranked 1st in the world.

I conclude by saying that I think there is undeniable evidence that Capitalism is the best economic system conceivable, as it is the only system that works in accordance with Human Nature.

Vote Pro!!!

Sources:

http://economics21.org...

http://www.cato.org...

http://www.nber.org...

(for more empirical evidence that high taxes hurt economic growth, look here)

http://pirate.shu.edu...
unitedandy

Con

Introduction

In the last round, I will offer summaries for each contention, and to address points made by Pro in the last round.

Case against capitalism


A1 -Utopia

While Pro acknowledged last time that pure capitalism (in terms of economics) “may never be a reality”, he shockingly now extends this to political capitalism, regarding it as “politically unrealistic”. He adds that the extension of the free-market is the best way forward. There are a few points to make here:


a) Futility - Even if the extension of the free-market were better, my point still stands - capitalism in its purer forms is politically utopian (as Pro himself admits). Pro essentially concedes the resolution, and agrees with me that capitalism is utopian on these grounds alone, and, for pragmatic reasons, we must have extensive government intervention, provided we value democratic legitimacy.

b) Economic utopianism - Pro glosses over my criticism of neoclassical economics by appealing to bounded rationality, and not engaging with ANY of the points that I made. Again though this only proves my point:

“The concept of bounded rationality . . . account(s) for the fact that perfectly rational decisions are not feasible in practise . . . “ (1)

Secondly, bounded rationality doesn’t really address the problems that I was highlighting - mainly poor information.

Points dropped by Pro

1. Capitalism exists nowhere in the world, and all best approximations to a capitalist model have extensive state involvement in some way.
2. It could not exist, nor (if it ever did exist) could it be sustainable because it would rely on unachievable assumptions.
3. Pro sees utopianism not as a problem for capitalism, but argues for capitalism on the basis of its correct diagnosis of human nature (and that competitors such as Communism were utopian when it came to human nature). Did not respond to accusations of contradiction. Point made in R2.
4. The deficiency of the price mechanism and price elasticity were dropped by Pro after earlier citing them as possible solutions to market failures. Point raised in R2, dropped by Pro.

To be clear, if this argument is correct, then all other arguments for or against are essentially redundant. Not only does this point extend to all the other arguments presented in various ways, but it completely nullifies the resolution. If capitalism cannot exist, then advocating it as an economic system is utterly futile. It fails on pragmatic grounds alone. Given that I have defended the argument, as well as Pro dropping the points above, I contend on this basis alone the resolution is negated.

A2 -Healthcare

Again, Pro acknowledges the infeasibility of a free-market healthcare system, noting that it will “never be completely market based.” In his first swing at my argument, he complains that as the study I used takes cost into account. Firstly, cost is a fact, and while the US were the biggest spenders, yet received such drastically poor results is certainly relevant, especially in a debate regarding economic systems. Also, Pro criticises the study for being “11 years old, very outdated”. The fact this report was the most extensive and widely respected of its kind somewhat neutralises this point, as does the fact that in 2006 OECD report shows a pretty continuous trend, in terms of bloated US spending (2). Most importantly however in criticising this source for its apparent age, Pro does 2 things: he shows both a contrivance of prioritising contemporary data in this area, and a distinct lack of awareness of his own sources, given that table of the paper he cited on tax levels uses data from 40 years ago.

He also made the point about the methodology of the study, damning it as flawed, while merely noting his disagreement with some of the criteria, with literally no analysis to back this up. Now the criteria for things like better provision of care includes life expectancy, infant mortality rate, medical professionals per 1000 people, and yes, the monetary amount of these systems, showing that not only is US healthcare worse in every measure mentioned (compared with the UK), but it costs the UK government less in % terms for universal coverage than it does to provide the hybrid system in the USA (3).

Yet again Pro dropped several key points

1. Economies of scale and sharing of information lead to more cost-effective and efficient systems in principle, and government-run universal healthcare incorporates both of these.
2. Wider economic impact and moral issue regarding UHC.
3. No capitalist alternative to healthcare, with even Pro deeming US healthcare to be partly tax funded.

On the strength of this argument, one is compelled to conclude that given the data available, and the theoretical advantages of a single-payer system, as well as it outperforming the closest thing to a capitalist alternative in almost every measure, it seems that we must adopt a state approach in this huge sector of the economy.

A3 -Externalities

Pro did not respond to ANY of the points I raised in R1. Again, this alone negates the resolution, as Pro has simply neglected to respond to this argument at any point. Extend all arguments.


Arguments for capitalism

Human nature

Essentially Pro just jettisons this point, and converges it with his main argument - that capitalist societies are better because tax incentives work. Again, Pro drops/concedes the 2 points I made in R2:

1. Assuming Pro’s point about human nature is true, this provides no specific support for capitalism over social democracy.
2. Given that capitalist societies cannot exist for long, such a view must be incorporated within a social democracy.

I would also add that given the societal benefit to things like healthcare and regulation, acting in the collective interest, while allowing as much liberty as possible seems like the best of all possible worlds, and is yet again reason to favour SD over capitalism.

Tax and Productivity

I have to say that I find it astounding that no sooner does Pro accept that he was wrong in his previous post with copying the abstract of an article in place of an argument do we find it again. This does NOT constitute an argument. Secondly, the fact that Pro cites seemingly mysterious figures with no sources again makes it very difficult to even evaluate what is being said. Lastly, giving no theoretical model, and then concluding that this non-existent model would predict these unsourced figures again lacks any substantive case.

As for things like comparisons between France and the USA, I was comparing the top rates of state tax, as usually one offers a “trickle-down” approach with such an argument. Given these figures, and the small differences between them (around 5% lower in USA with income tax rate, and about 1.5% lower in France for corporate tax rate, which is usually the biggest indicator), such analysis of tax seems questionable (4). Lastly, I showed that 3 countries have higher output per hour in the USA, and this is relevant because it undermines the capitalist model, given the increased level of efficiency in countries like Norway and Holland with the level of state involvement they have in their economies.

While I acknowledge that US workers work longer hours, I don’t see this as particularly desirable, nor necessarily shown to be because of tax levels. Pro did however dropped a couple of points here also. He failed to make a comprehensive case for capitalism again and did not respond to the possible solution from the welfare state through incentives to work, such as Working Tax Credits (UK).

Conclusion

Given the burden of proof of Pro to justify capitalism, I contend that I was able to argue against reasons for capitalism, as well as providing arguments against it. I thank Pro for the debate and to the readers in advance.



Sources

(1) http://en.wikipedia.org...
(2) http://www.kff.org...
(3) http://en.wikipedia.org...
(4) http://en.wikipedia.org...











Debate Round No. 3
138 comments have been posted on this debate. Showing 11 through 20 records.
Posted by jimtimmy 3 years ago
jimtimmy
No, you are not right about the UK... It is very easy to see why...

Tax rates did not change dramatically over this period... and hours worked went down a little bit...

However, there was a general decrease in hours worked over this period...

Let me compare France and the UK for you to understand...

In the 1970s period Prescott looked at, the average marginal tax rate was 45% in the UK and 49% in France, and hours worked was 25.9 per week in the UK and 24.4 in France...

In the 1990s period Prescott looked at, the average marginal tax rate was 44% in the UK and 59% in France, and hours worked was 22.8 per week in the UK and 17.5 in France...

Now, hours worked fell in both countries, but more dramatically in France...

Even more than that, the UK is not as strong a relationship as most. Most of the countries follow the model perfectly...
Posted by jimtimmy 3 years ago
jimtimmy
No, you are not right about the UK... It is very easy to see why...

Tax rates did not change dramatically over this period... and hours worked went down a little bit...

However, there was a general decrease in hours worked over this period...

Let me compare France and the UK for you to understand...

In the 1970s period Prescott looked at, the average marginal tax rate was 45% in the UK and 49% in France, and hours worked was 25.9 per week in the UK and 24.4 in France...

In the 1990s period Prescott looked at, the average marginal tax rate was 44% in the UK and 59% in France, and hours worked was 22.8 per week in the UK and 17.5 in France...

Now, hours worked fell in both countries, but more dramatically in France...

Even more than that, the UK is not as strong a relationship as most. Most of the countries follow the model perfectly...
Posted by jimtimmy 3 years ago
jimtimmy
No, you are not right about the UK... It is very easy to see why...

Tax rates did not change dramatically over this period... and hours worked went down a little bit...

However, there was a general decrease in hours worked over this period...

Let me compare France and the UK for you to understand...

In the 1970s period Prescott looked at, the average marginal tax rate was 45% in the UK and 49% in France, and hours worked was 25.9 per week in the UK and 24.4 in France...

In the 1990s period Prescott looked at, the average marginal tax rate was 44% in the UK and 59% in France, and hours worked was 22.8 per week in the UK and 17.5 in France...

Now, hours worked fell in both countries, but more dramatically in France...

Even more than that, the UK is not as strong a relationship as most. Most of the countries follow the model perfectly...
Posted by unitedandy 3 years ago
unitedandy
Well, ad homs aside, you didn't really answer anything I said. I accept that this is supposed to be a correlation in several countries, but I'm taking the country that I know best, and showing you that this isn't the case. Now, we can move onto other the other countries if you wish, but are you accepting that I'm right about the UK. If not, respond to what I said.
Posted by jimtimmy 3 years ago
jimtimmy
Okay, a couple of things...

First, this is a correlation noticed accross large spects of data. One exception does not do much to rbut this....

Of course, it isn't an exception and anyone with an IQ above 90 could see that... But, obviously, you cannot... This really isnt that hard... I really am blown away by how hard you are trying to explain an obviously absurd argument...
Posted by unitedandy 3 years ago
unitedandy
From this period, work hours went down by 22, which is certainly significant. But even if it wasn't significant, then your argument literally has no weight, because working hours didn't go down, and your source is supposed to show that they did (and that this is because of tax increases).

In short, if working hours didn't go down, your arguments sinks. If they did, well, your previous comments suggest that this would not be because of tax increases (or again, even if it was, previous comments and blog posts suggesting a Thatcherite economic success would nulify this anyway).

All in all, the argument is not credible, whatever way one looks at it.
Posted by jimtimmy 3 years ago
jimtimmy
Do you really not see why your argument is so stupid here?

Prescott was looking at how tax rates affected hours worked accross countries... over time...

Not just over time...

UK tax rates did not change much over this period... and hours worked only went down a little bit...

France tax rates went up dramatically during this period... and hours worked went way down....

Do you understand now?
Posted by unitedandy 3 years ago
unitedandy
Taxes did NOT go up . . . yet hours work went down. The thesis of Prescott therefore is certainly not true of the UK, by your own reasoning.
Posted by jimtimmy 3 years ago
jimtimmy
No, Trickle Down is not a real thing... It is a rhetorical device used to criticize free market economics...
Posted by jimtimmy 3 years ago
jimtimmy
This is a really bad argument. Read Prescott's work... taxes did NOT go up in the UK over this period...

Here's the thing... Hours worked fell in all countries during the period (except for the US)... It fell by less in the UK than it did in other countries... You have done absolutely nothing to weaken Prescott's case.... And this is a phenemomenon noticed over long periods of time in huge cross sections of countries...
5 votes have been placed for this debate. Showing 1 through 5 records.
Vote Placed by CD-Host 3 years ago
CD-Host
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Total points awarded:06 
Reasons for voting decision: Marxist ideologies for social democracies is a stretch. Con presented solid data. Pro's arguments conflicted and mainly consisted of assuming the point in question. I.E. European countries were successful because they were still "capitalistic" enough, without any evidence. SnG is for slightly better layout.
Vote Placed by randolph7 3 years ago
randolph7
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Reasons for voting decision: Pro should use inline citations. Ultimately, though I found his arguments more convincing.
Vote Placed by feverish 3 years ago
feverish
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Reasons for voting decision: Interesting debate, although it did seem to go off on a few tangents. Pro basically conceded that capitalism doesn't really exist except as a hypothetical, and most of the debate seemed to consist of comparing the mixed economy of the US with various mixed economies of Europe. Nothing concrete seemed to be settled about the relative prosperity of either, with good cases on both sides, but I thought Andy had more unrefuted arguments too.
Vote Placed by RoyLatham 3 years ago
RoyLatham
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Reasons for voting decision: The resolution is that "Capitalism has brought prosperity and freedom to Millions." Con kept saying that all he had to do was propose a theory that something else is better. That doesn't contradict the resolution. Con's sources are irrelevant to the resolution.
Vote Placed by Double_R 3 years ago
Double_R
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Reasons for voting decision: Pro did not clarify his resolution so this debate did not establish anything of significance. I did not quite buy Cons interpretation of his burden against the resolution, but since Pro never addressed it that is what must be accepted. On that note Pro had many holes in his arguments which were exploited by Con, and Con made many valid arguments not refuted by Pro.