Theme: Externalities

ANSWERING THE HARD QUESTION
–“Q: Are there any legitimate weaknesses of capitalism as an economic system?”–

All economies are and always have been mixed economies and extreme attempts at economies always fail for reasons we understand.

Because government is the world’s most profitable business, and governments are both the insurers of last resort and investors of last resort and as such government investment in production (not consumption) will produce strategic advantage where it’s possible.

We seek a consistent government-economic relationship because it reduces our adaptive burden allowing us to maximize personal consumption in time.

Yet the distribution of private-sector state production of anything is dependent upon whether a population is in a state of plenty, going concern, or stress.

The primary problem of the twentieth century was the mixture of the false promise of endless growth in population and economy, with the adaoption of intergenerational transfer instead of intergenerational savings. This is why the developed world MUST collapse.

We list the spectrum of political biases without explaining that the only thing that matters is rule of law to protect against extreme economies on one hand, and to allow us to shift between economies as needed on the other. Oddly americans are better at this becuase of the general prohibition on state power outside of warfare and crisis. And that is the correct division of labor. But the left wants to violate the laws of nature in the material world just as they do so by social construction of words in the imaginary world. And that’s never possible. It’s just endemic in the feminine mind.

Capitalism without rule of law is private sector privatization of public capital incentivizing private corruption exhausting incentives (today) and destroying the legitimacy of the government, just as socialism-communism is public sector socialization of private capital, producing public sector corruption, destroying incentives for production, and destroying government legitimacy.

We have just about the best system but our rule of law is insufficient for defense against private sector corruption (the financial sector and the global business sector) as well as public sector corruption (the credentialist elites).

Both of those problems are easily fixed by law with the power to force the adoption of those laws into the constitution and law.

LIST:
Capitalism: bias to the private sector in the production of goods services information.
Classical Liberalism: Redistribution of the proceeds of private sector production to the production of commons lowering indirect costs while preserving direct costs. Maximizing incentives for all.
Democratic Socialism: Redistribution of the proceeds of private sector production for the public consumption of goods services and information.
Fascism: State Direction of Private Production for Strategic Purposes lowering direct returns on private production to produce indirect returns for the population.
Socialism: bias to the public sector for the production of goods services and information at the cost of incentive for private production and returns on capital.

Neither anarchism or communism are possible so they aren’t worth discussing.

Cheers
CD

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