Why have people in thousand of years of capitalism still not learned what the best economic policy is? Free market...

Why have people in thousand of years of capitalism still not learned what the best economic policy is? Free market, or protectionism?

>thousand of years of capitalism
what are you smoking?

How long does capitalism exist then

For the sake of this discussion it can only really refer to it since industrialism at the earliest

>thousand of years of capitalism
>mfw

The answer is free market by the way.

I mean if you want to talk economics then arguably since before humans were even a thing. If you want to be really autistic you can talk about how even micro-organisms practice a form of capitalism.

But then that's really fucking stupid and defines such a broad scope of things that it's easier to point out when capitalism ISN'T happening.

So I'd just as much argue that """"""proper""""" non-hyper-autist capitalism has existed at least since Sumer, but even then there could very well have been civilizations that existed prior, with varying amounts of individuals being restricted from access to """"""proper""""" capitalism by various things inbetween (IE, slavery, feudalism). So sure, peasant mcbumblefuck in 1345 might not be doing """"""proper""""" capitalism, but the merchants in the big cities were.

The answer is, has always been, and has always will be protectionism until your nation's industries can compete on the open market at which point they can be released into the free market, with moderate protectionism as a fall back measure to make sure you don't end up getting out-competed by slaves or have hyper-kikes not giving workers proper safety.

It's subjective to the countries you trade with. Tariffs are good to put up against countries with competing resources.

Op here, I actually 100% agree with this post

Smith wasn't even all that pro laissez-faire, at least not in the common understanding of the word today. Nor was his idea of free-markets the same as the common current usage. He just really hated protectionism and artificially messing up supply and demand. He didn't even like what Marx would call the capitalist class that much, as he was also pissy about economic rent and the relatively disadvantageous position of the laborer, as shown by his support for regulation that benefited workers, he just considered protectionism self-defeating and not benefiting workers and also wrote when the industrial revolution was just starting and underestimated the effect of capital on the distribution of profits in an industrialized nation.

here

I neglected the point made
>The answer is, has always been, and has always will be protectionism until your nation's industries can compete on the open market at which point they can be released into the free market
Smith was for protectionism in this sense, as protecting someone from fucking you over, or being able to develop the required capital for an industry.

>ith moderate protectionism as a fall back measure to make sure you don't end up getting out-competed by slaves or have hyper-kikes not giving workers proper safety.
That's just competitive advantage. By Smithian logic, it's better to let them be good at exploiting slaves to make your cheap clothes and gear your economy to do something else where you have a competitive advantage.

>Preventing someone from fucking you over
>Protectionism

Enforcement of contracts= Protectionism?????

No, like China subsidizing an industry until your nation can no longer support the industry, and China takes all the jobs, then China stops subsidizing the industry and starts reaping the profits because they now have the industry and you don't. There's nothing about contracts in that. Sometimes people fuck with the markets, or the externalities are not properly assessed or compensated for. It's okay to protect against that.

Economic policy depends on non-economic factors. There is no "best system".

The best system is the one that can adapt to those factors.

Free market if you love foreigners owning your country.

We do know.

Free markets for everything where a free market is possible. It's not possible for everything, and what it's possible for changes with technology.

Tax property and pay citizens. There can never be a free market in property, the people who occupy it owe the people who let them. Of course when wealthy property owners are the ones who build the state every single time, as they are, this is the one tax they cannot allow, even though it's the only tax that makes economic sense.

Mixed economy then.

Regulatory externality taxes also make sense.

>Free markets for everything where a free market is possible. It's not possible for everything, and what it's possible for changes with technology.
That's called market socialism.

Okay. So market socialism has long been known as the best way to structure an economy.

It's the situation currently enjoyed by very wealthy people, modern day communists are really asking that everyone be a capitalist, that the artificial barriers to becoming one be dropped. This won't happen because people with money don't like losing their money, so they pay the government to make laws that make it hard to lose money once you have it.

>It's the situation currently enjoyed by very wealthy people, modern day communists are really asking that everyone be a capitalist, that the artificial barriers to becoming one be dropped. This won't happen because people with money don't like losing their money, so they pay the government to make laws that make it hard to lose money once you have it.
Well yeah, that's the point of "seize the means of production"

>Citation needed

>Modern day communists are really asking that everyone be a capitalist

No they don't, modern day communists want a complete change in property relations such at all is owned by the community but each workplace is ran by those who work there.

By property do you mean land, or all types of property.
A land value tax is justified but a tax on all property is not.

In other words they want everyone to collectively take on the role of capitalist

>No they don't, modern day communists want a complete change in property relations such at all is owned by the community but each workplace is ran by those who work there.

Depends who you talk to.

The middle of the road argument is for private businesses to be private (identical to the accounts of the owner), and public businesses to be public (owned by the people who run them), and for natural monopolies to be controlled by the customers (the only way to run a monopoly).

There are no communists who argue against private property, like houses or cars or yachts, at least not in 2016; only against the hoarding of capital and it's use to make laws to keep it hoarded.

Unlike capitalists, communists aren't fans of government stepping in to make a business profitable.

>A land value tax is justified but a tax on all property is not.

Not on all property, no.

But on second or subsequent properties, yes. And on properties not owned by a citizen, those owned by corporations or foreigners.

If you own a house or a farm or a business of your own, I see no reason you should pay any taxes for that.

If you own another one, as a luxury or investment, you should pay taxes for the governments protection of it from homesteaders who could use it more than you could.

So 90% of people shouldn't have to pay taxes in their entire lives.

A capitalist is someone who has private ownership of the means of production (capital).
If capital is owned by the whole community it's not privately owned.

Then people who own shares in corporations are not capitalists, since the corporation is owned by an entire community?

>fyw communist structures are the most competitive in capitalist economies

Capitalism and capitalist are different things. Not everyone participating in capitalism is a capitalist for example.

Investment and research drives long run growth, I don't see why we should put disincentives on that by taxing them (as you need property to house your investment/researching).

A better idea would be to tax consumption with some exemption so that the poor pay little tax. This solves the problem of disincentising investment and also taxes the purchase of luxury items. I think most economists support a consumption tax.

Also proving that you don't need owners to be the same as managers (upper management, like CEOs) and that there's already a template for operating collectively owned businesses.

Because people can't agree on what the goals of the economy should be.

Should try to maximize the GDP, or is quality of life more important? Should we distribute resources as equally as possible, or do some people deserve much more than others? Should we care if some people cannot provide for the basic necessities of life, or just leave them to their fate?

Until everyone agrees one the goals of society, you can't even begin to judge how well a given economic policy satisfies these goals.

Not "an community" but "the community" in the societal sense. Those owning shares are still capitalists as it just means they have 1 share worth of private ownership of the means of production.

Is research property? Taxing consumption does absolutely nothing to prevent the concentration of capital. Concentration of capital is only good up to the point where you reach the critical mass to enable you to do something. It's a negative when it becomes a barrier to entry.

Aye but it would be wrong to say that each person in a communist society is a capitalist, as the means of production aren't privately owned.

Each person in a communist society exercises control over capital. Capital is not a concept exclusive to capitalism.

You need things to perform research with and you need property to house your research projects.

Concentration of capital isn't a problem as creative destruction ensures that even the most powerful of monopolies will fall over time and provides those monopolies with incentives to innovate.

Is consumption not the end goal of the economy? What is one man really that much better off if he consumes as much as another but has investments that he never bothers to convert to cash?

>Investment and research drives long run growth, I don't see why we should put disincentives on that by taxing them (as you need property to house your investment/researching).

It does. So we should want investment to go to the most productive places, not to gaming the economic system as designed.

There is no disincentive whatsoever for 90% of citizens, they can develop their homes, businesses, and farms as much as they like with no taxes.

People who buy property to make money by rents will pay a tax; and they'll pass it on to their renters. But competition will mean that they'll invent ways to provide cheaper, better services. The tax will add incentive, because it's applied in the right place.

>A better idea would be to tax consumption with some exemption so that the poor pay little tax. This solves the problem of disincentising investment and also taxes the purchase of luxury items. I think most economists support a consumption tax.

How could you organize that? Tax every sale? Transactions between customer and proprietor are none of the governments business, even if an economic argument could be made for it.

Maybe if you're talking about a tax that was only applied to things that cost 50,000 dollars or more, but even then the wealthy will game the system by purchasing things in smaller chunks. No, just leave sales tax entirely. Who does it help? What is it's justification?


An import-export tariff is okay; make it ten percent and link it directly to funding for intelligence and military, to defence spending.

And a vice-tax is okay; make it 50-100% on drugs, and earmark it for healthcare.

>Concentration of capital isn't a problem as creative destruction ensures that even the most powerful of monopolies will fall over time and provides those monopolies with incentives to innovate.
This isn't true and Schumpeter argues the opposite.

IP, copyright, and patents are property, and should be taxed like regular property.

You pay nothing if it's something you invented yourself and you own the rights.

You pay a percent based on how much it was worth the previous year if you own the rights but didn't invent it. Maybe increase the taxes every year so the company eventually releases it to public domain.

Exercising control over capital =! Capitalist
It's a necessary but not sufficient criterion for being a capitalist. What else is needed is private (that is others excluded from exercising control without your consent) ownership. Under communism each person exercises control over capital but it is owned by the community not by an individual.

Probably one of the biggest flaws of capitalism is inheritance, since inheritance isn't based on market principles, and the market is what regulates capitalism.

Next you're going to say capital doesn't exist in communism because capital is in the word capitalist, and therefore capital has to be privately owned to be capital.

The only problem there is the argument that inheritance is good for the people receiving it, but other forms of free money are bad for the people receiving them.

That's not at all what I was arguing.
Capital in capitalism = privately owned
Capital in communism = communally owned

>Giving your children your property is a flaw in capitalism

If I can choose to spend my money on booze etc why can't I give it to my children and let them spend it on booze etc once I no longer can?

If people are stuck with small scale farms and businesses then you are going to miss out on economies of scale.

What about people who build houses to make money by rents?

Transactions between customer and proprietor could be justified to pay for the enforcement of contracts (and for protecting the property being traded if you scrap the property tax).

Because when you spend it on booze, you've giving the booze manufacturer income and capital for generating economic value.

When you give it to your child, you are not giving it to them for their ability to generate value, but instead giving them capital in order to consume through no merit or labor of their own.

Markets rely on the fact that private parties will be self-interested, and not arbitrarily interested in other private parties due to kinship.

>If people are stuck with small scale farms and businesses then you are going to miss out on economies of scale.

On a farm the optimum size is that which can be managed by one farmer, one who is invested in keeping the land productive for the next generation. This can be easily owned by one person, the farmer.

>What about people who build houses to make money by rents?

They'd pay taxes on the value of those properties.

>Transactions between customer and proprietor could be justified to pay for the enforcement of contracts (and for protecting the property being traded if you scrap the property tax).

Contracts don't need enforcing. If one party backs out, it's void. Parties that are good are forcing people into contracts, or at writing tricksy contracts want contract law to be sacrosanct, I don't think they need rewarding. Parties that write contracts where both parties win in the end should be rewarded.

I don't see why you'd scrap the property tax, even if a sales tax could be justified. People would still own properties whose ability to make money depends on government protection. This is not the case with businesses, they don't need government protection to sell products in a market, only to keep people from stealing them, the same reason everyone should pay property tax. Except if it's your sole property.

Not the guy you replied to

>If people are stuck with small scale farms and businesses then you are going to miss out on economies of scale.
There is no reason farms have to be small scale. Most of the biggest corporations are public and owned by shareholders.

>What about people who build houses to make money by rents?
Rent gets even free market economists' panties in a bunch.

>Transactions between customer and proprietor could be justified to pay for the enforcement of contracts (and for protecting the property being traded if you scrap the property tax).
But you know it isn't. And if it was, there's already a method in tax code for such allowances. Tax deductions.

>What about people who build houses to make money by rents?
The answer to this is actually the welfare state. Turning income into capital is a good thing for building growth. People should be encouraged to do so. The problem is when society divides into classes of people who will never be able to have an income so they can save up income to put into a meaningful amount of capital, and people who are born into capital and get more capital simply because they own capital rather than working for it.

You want to tax people who are at the level where they don't contribute labor to the economy. You want the welfare state so income does not need to be spent on fulfilling basic needs, and all income is discretionary, and can be used towards investing in capital or consumption as the individual sees fit.

I hate to appeal to authority here, but that's the question you're essentially asking.

There is a near consenus of opinion of economists in favour of free trade.

Most people are economically illiterate (because there is very little personal cost in being so) and tend to focus on the more easily seen negatives of free trade and are hence protectionist.

Inheritence is fine.

Inheritence creates a large incentive for some people to supply better quality goods, services or labour, which benefits society as a whole.

The answer is mixed.
But the only constant is change
That is wh there is no such thing as a stable economy. It's only temporary. But a mixed capitalism is best. Not to be mistaken for socialism as many have. An idea that derives out incentive and innovation.
Free enterprise is the answer your looking for.

Capitalism used to be know as mercantilism. Laissez faire capitalism as it were. Has been around since bartering ended with the first currency in whats origin is hard to decipher being Asia or the Middle East

Mercantilism is closer to state capitalism than laissez faire

Aye, but there weren't really any regulations. People just did what they pleased. So it was laissez faire, or without government intervention. It was the government. But there could never be a state capitalism. Because if the state had complete or most ownership of Capitol. It technically would be communism.

There may have been little regulation, but there were still tariffs and government assistance.

You are kind of correct that feudalism has some analogues with socialism also.

Mercantalism was economics for the benefit and at the direction of states. It was a very top down economic system, merchants had freedom only to the extent that it would benefit their benefactor state

Taxes yes. Assistance yes. That would put it closer to a market economy. Not exactly laissez faire. But Marxism inherently is incorrect. It's proven by history and theory to be incorrect. Socialism and communisms ideas originated most likely from Marx trying to apply biological theories on plants into the economy. He never understood truly what he was talking about and argued it strongly getting himself expelled from several universities until he ran into a similar bumbling idiot named Engels. Any elementary economics class will teach you right away that a market economy is superior over all.

>Inheritence creates a large incentive
No it doesn't. Lots of rich people donate the majority of their wealth upon death. And any large incentive is mitigated by the fact that their offspring don't have large incentive.

The reason why is because property is treated as a natural right, as it and inheritance existed before competitive commodity markets, back in the day when villages didn't have multiple competing craftspeople.