Dear 100 Hour Board,
This question is big, and I don't expect you to solve such a difficult issue in a Board post. But I'm interested in hearing your thoughts.
I'm pretty liberal; my family is mostly conservative. Their conservativism tends to rely on two basic claims: (a) that the basic mechanism of capitalism has a tendency to lift everyone (i.e., the classic invisible hand argument) and (b) that capitalism has done more to improve people's lives than any other economic system.
I tend to be skeptical of both these claims, but I'm wondering what you think. I don't meant to pose this as a black-or-white question, as I know there's a lot of room for nuance - but on the whole, do you tend to agree or disagree? I'm interested in answers from any portion of the political spectrum. I'd especially appreciate whatever data or examples you want to use to support your reasoning.
I will admit that I don't know a lot about other economic systems because my econ classes primarily focused on capitalism based economies. However, I will say that every system has it's downsides. Reason being, economics is not ethics. In every economic system, you're going to have things that are economically optimal and morally reprehensible.
As far as your family's statements go, my personal skepticism doesn't lie with them naming capitalism but with their absolute nature. You can specify any economic system, and I am going to be highly skeptical that it lifts everyone and improves people's lives more than any other system. There isn't some magical system out there that objectively manages to drastically outperform every other economic system. Every system has its own trade offs, and often times it comes down to personal preference for which trade offs you think are the best.
I believe the first point is false, but the second is "true."
Pure capitalism is just as bad as communism at being a morally good system. The fuel for pure capitalism is, summed up, greed. Greed fuels competition which drives innovation, which drives the economy. Left unchecked, capitalism creates class divides and an economic caste system that certainly isn't an invisible hand. Pure capitalism abandons those in the throes of society without a second thought, believing that their outcomes are always just, either by God's judgment (especially if we're focusing mainly on U.S. capitalism) or by personal failures.
The critiques that Marx makes of capitalism and bourgeois politics in The Communist Manifesto are valid. His solutions to those pitfalls obviously weren't very successful, but we still ought to listen to what he points out. The history of all hitherto society is the history of class struggles.
The greed of pure capitalism does not care about human life, it cares only for profit. If pure laissez-faire capitalism were followed, that greed would drive society into the ground. It could have happened, too, if there wasn't unionization and trustbusting and the likes. Thus, if we systematically build in ways to curb greed and force the profit-hungry beast of an economic system to actually value its citizens, I believe capitalism can lift everyone. It has the potential to be the invisible hand.
Because of that potential, I do agree that capitalism has done more to improve people's lives than other economic systems... but it isn't the best economic system. It just tends to be better than the other ones we have worked out at the moment... That is, as long as you ignore the fact that of all the high- or upper-middle-income countries, the United States has some of the highest rates of poverty, homelessness, child hunger, our infant mortality rate is actually going up, too many people don't have access to affordable health care, etc etc etc. For a country that likes to tout how we're so great, a Gini coefficient of 48.5 is REALLY REALLY BAD. Like, the worst its been in 50 years kind of bad. Like, we're a global embarrassment kind of bad.
Based on most metrics, the countries that effectively mix socialism and capitalism are FAR better off than the U.S. And that's the tea.
I think a great example of the flaws of capitalism is the Industrial Revolution. Did the Industrial Revolution lift the country? Historically, yes. Did it do so while paying minuscule wages? So low that children were dropping out of school in elementary school to work in dangerous factories? While turning cities into hazy cesspools? While using the police to harm strikers? Also yes.
I agree that capitalism tends to "lift society", but for a lot of people it doesn't look like lifting. And for a lot of people it's complicated. I think the best modern day example is Amazon. Does Amazon get cheap stuff to my door quickly? Heck yeah! Does it provide a lot of jobs? It does. Do those jobs pay better than minimum wage? Yes. Does Amazon often have horrible working conditions? Does it pay it's workers way less than it could do? Does it put tons of other businesses out of work? Does it raise concerns of post-apocalyptic society with a mega corporation that listens to our conversations? Also yes.
There are many features of today's version of capitalism that used to be viewed as Socialist or Communist. Here are some examples: the weekend, 8 hour work days, child labor laws, minimum wages, work place safety, workers comp, paid vacations, sick days, benefits for workers, and even lunch breaks.
This doesn't even get into capitalism great sins of slavery, colonialism, human trafficking, and neo-colonialism.
Capitalism is a double sided sword. It's really easy to only focus on its benefits, or only on its failures. I think only focusing on one or the other is silly. Simply because we can have both. It's possible to regulate capitalism so there isn't slavery, there aren't sweat shops, so that people can have weekends, so that people get benefits etc. Pure capitalism ends with money accumulating at the top as multi-billionaires build upon a pile of disposable low & middle class bodies. Regulated capitalism lifts all ships.
Anyways, hope these thoughts help!