Sunday, December 25, 2005

So what kind of economic/political system would be ideal?

So what kind of economic/political system would be ideal? A very good question. I think it fairly safe to rule out communism. A good essay and comments can be found on Capitalism is clearly not perfect. Part of the problem with capitalism as it is currently practiced may be indicated by these comments by Orion Schmidt at the above article.

“I disagree with you when you say that the lack of ethics is not supported by a free market economy. I think it most certainly is. It is, as a fact, cheaper to pay children to do the work of an adult, or, less radically, to push workers to the edge of reasonable limits in order to produce more product. It is cheaper to keep chickens in small cages, than to allow them to walk in their lifetime, or to over-milk cows until their utters bleed. These things happen, and they happen as a direct result of financial competition.”

I suspect that the real problem is that, while we all believe the things Orion says here, they are not, in fact, true. In the long run they are all counter productive. Count the cost of ignorant adults because they had to work their childhood away, of low per hour productivity and shoddy product because of over work, the added health costs for completely cooped chickens and the substantial investment (at least two years of food and care before they can start) wasted by over milking cows and the economics are bad. However the costs come mostly ‘yesterday’ or ‘tomorrow’, not ‘now’. Capitalism runs into severe problems when we only consider this week’s, this quarter’s, or this year’s figures instead of striving to understand and calculate and plan on a multi-year period of economic results.
For example: Was building the Exxon Valdez as single hull tanker good economic judgment? Yes, if you only measure the cost at building time, definitely not if you consider the actual life of the ship. Was allowing a drunk to run the ship rather than offering him rehab and firing him if he refused, good economic sense. No it was cheaper when the decision was made but wow, eh?
I think the truth is that most of the abuses of capitalism stem from ignorance and impatience, not from the basic principle of the “ism’.


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