Capitalism has to end somewhere, its just making life worse and we need to accept that
I am a capitalist myself but we have a problem that i've seen affect humanity all around the world. Stock prices, earnings, profits and revenues can't keep going up forever and ever.
Even a 10% drop in profits doesn't mean a company is dying especially when its a company thats basically already saturated with billions in revenue over the past couple decades. I see people throwing this judgement at Netflix, Disney, FMCG and social media companies all the time.
I don't know why people don't realize that every company can't increase its user base forever and a drop over a couple quarters is not the end of the company. This might've seemed like a reasonable belief in the 80s/90s when the world was barley connected but now other than some parts of Africa, China and North Korea, there is no more meaningful expansion to be had and no one wants to admit it and they keep pretending like its the past where continuously growing means a better company.
If you aren't inventing something new like AI, AGI/ASI, groundbreaking cures for diseases or spaceflight there is simply nowhere else to expand to without making your company worse.
Instagram, Facebook, Apple are perfect examples of this phenomena in play, simply making their products worse to squeeze as much as they can until it starts damaging them. I hate to go on this tangent but vaccine companies lobbying government officials to mandate boosters and other ridiculous measures involving their products is another example of this. For Mordena, J&J and the others, 2020/2021 was a unicorn year and their shareholders should accept that, any attempt to recreate and beat those years is simply foolish at this point and their attempts to do so is just making life worse for everyone.
This is why a lot of the services we used to enjoy are getting worse. From shittier and less variety of food in beloved restaurants, to worse cars that barely innovate anything, to shittier video games that no one wants to play, to shittier streaming services with even less variety than they had last fiscal year, to disgruntled employees because no one wants to pay them a living wage, all because senior company management fear their bottom line might be slightly worse if they improved any of their offerings and the market will descend on them and eat them alive.
I don't know where I am going with this but it has been a frustration of mine for a while now and I wish more people acknowledged it.
They don’t keep going up forever - they get crushed when something better takes their place. Capitalism is why we have video games, cars etc in the first place. We need more of it, not less. Companies like ge or Facebook are so big they essentially become a bloated self perpetuating conspiracy of their employees, essentially they become socialist mini societies. Large swath of their employees are grifters/anchor babies.
Thing is, uninhibited/pure capitalism tends to turn every industry into an oligopoly over time. Services/products decline when there's only 2-3 major providers and these behemoths get so large they gobble everything up and it becomes impossible to compete. It has naturally occurred and always will without some form of regulation to prevent it.
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And the ads, don't get me started about the ads, they just keep getting worse and worse in every product we use. On twitter my whole screen is full of ads in between tweets now and its only going to get worse because they have to increase profits by even more next FY. Every ad is so in your face and obnoxious now and companies keep trying to pile on more and more
then stop using the app and make something better than people want to use.
people hate ads. thats why netflix was able to explode in popularity (pay us money and you have no ads).
start a social media network people pay to use and has no ads (or figure out a new monetization strategy)
LOL, this entire screed sounds like the writings of a freshman poli sci major. You missed the core component of capitalism that is creative destruction. The lack of infinte growth you speak of is because you view the world as a static pie. Let's take a look at social media it has gone from individual fragmented blog like websites, to small forums, to myspace, to facebook and twitter, to snapchat, to tiktok and we are still seeing new platforms come up. When you look at things from this day in time view it never looks like anything can change, but zoom out and you will see that capitalism is littered with the corpses of billion dollar companies.
Creative Destruction is the key. I think you'll see major changes in the education system and other major structures in yrs to come. Will take time as the status quo (unions) have serious heels dug in and are typically against improving the overall "product".
I assume you've read Greenspan's Capitalism in America (link to WaPo review). Great book if you haven't.
I think the problem is that terms such as capitalism and socialism are poorly defined in society.
Capitalism in the form of several small/mid sized businesses competing with each other (monopolistic competition) isn’t bad at all. It leads to innovation, diversified products, etc.
What we have today is corporatism. Corporatism is essentially a state-controlled economy. It is not a free market system. The wealthy bribe politicians who decides who lives and dies whether it be through tax breaks, government policies (such as vaccines), bailouts during recessions (to the very actors who caused it), unlimited liability, and a repeated blind eye to blatantly illegal and unethical operations going on in said corporations. M&A activity has turned such corporations into mega-corporations that have such large market share that they can make inferior products at higher prices, whilst depressing wages and still remain in business.
People on here try to talk about the corporations that have gone underwater, but most corporations have been artificially saved by the government while mom and pop shops have been allowed to go bankrupt leading to market consolidation. Most of the biggest banks today would have gone underwater had it not been for bailouts by the government during the GFC.
I disagree with your point that management is “worried” about what defines a business and hence is pushing for higher margins. That’s what they want you to believe, but the reality is that executives get bigger bonuses if they show “growth” and meet financial targets. And like most they are selfish and only care about themselves no matter how many low level workers see what little they have being taken from them.
FWIW the stock market as we know it today is a scam that is a transfer of wealth to the rich who are able to afford teams of highly skilled traders to do well in the markets plus well-known insider trading among politicians. Everyday folk would not need to have capital tied up in the markets if they got employer pensions for being a loyal employee like they used to (not 401ks that are a reroute back to the rich). The stock market then would be a back and forth investment vehicle between people who are well to do (which is what it should be imo).
If you want to see what capitalism with enforcement of ethics and legality, looks like, look at the prosperous 60s/70s in America. Not what we have today.
TLDR:
The US is not even close to a capitalistic system anymore hence why quality of life is declining.
I agree I have a rudimentary understanding of the mechanics of the society we're in and whats causing the decline and I appreciate the way you explained it in a way that makes more sense so people will understand my gripes.
They think I am calling for socialism or communism by saying what I'm saying but I'm not. Whatever cycle we've found ourselves in despite its terminology is ruining our quality of life and people should speak up against it more.
Sure Putin
Behaviolar economics and game theory everyone. Study it up. Things like how to bet best on horse races by betting on the last most betted horse. Marginal opportutinity of another cent over the $0.50 asking price on a can of soda verses asking for $0.70.
Feel free to donate to the less fortunate than.
Like your grammar?
Thanks
By your title alone you are verifiably a colossal ignoramus. Capitalism as an economic model, as bastardized as it has been for the last 100+ years (central banks bailing out failing mega-businesses isn't capitalism, it's socialism), has lifted billions out of abject poverty and resulted in the most peaceful and prosperous period of human history. You do not know a lick of what you are talking about. The idea that companies will just grow into infinity is stupid, they have to come up with newer/better services than any alternatives that are presented by the market or they die, see IBM, Kodak, Xerox, the list literally goes on and on. Bigly ignorant OP.
This reads like some blissfully unaware fresh grad who thinks that the ideas batted around in some of his electives translates to an actual intelligent discussion in the real world. You'll learn though, hopefully.
OP is woefully naive here, no other system in the history of mankind has ever helped this many people. No true communist / socialist regime has EVER done the same at scale for any extended period of time (100+yrs) while we have proof point after proof point of capitalism lifting billions up into a higher standard of living
It's annoying seeing these kinds of posts -- I'm not even blaming OP but just amazing how little our schools / education system truly teaches about history. Most of these kids just listen to whatever CNN tells them (or their liberally curated newsfeed on social media apps) with the headline without diving any deeper. So they look at the their lifetimes (20-30yrs) and extrapolate the future based on this tiny set of data points. Honestly, what do you think is going to be more analytically rigorous -- analyzing the past 20yrs of history or analyzing the past 2000 years?
Our schools just don't teach practical knowledge. And while some argue that Republicans thrive off dumb voters, Democrats likewise thrive off of the same thing though with an "elevated" / "educated" level of stupidity -- which at the end of the day is honestly worse, as Twain said "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so"
To be blunt, I come to WSO intentionallly to avoid such stupidity and black and white reasoning. OP isn't saying capitalism as a whole is bad. He is commenting on US economic system in the past few decades. Thus bringing up points such as
are completenty tangential and useless because the very topic OP is discussing is the past 20 years. Also fwiw when you make a remark like this you implictly are implying that things have gotten worse in the past 20 years.
This isn't relevant to literally anything because CNN is a corporatist democratic media company. They are much more of a Biden News Network then an AOC one.
There is definitely theoretical stupidity that exists among the educated, but the points that OP are making if anything are supported in several political movements with the most popular being the MAGA movement on the right. You're correct that schools don't teach practical knowledge, and that knowledge is studying up the history of Detroit, Baltimore, St. Louis, etc and the greater Rust Belt and seeing the true and staggering amount of wealth that has been robbed from the US by corporatists in the past 5 decades.
Same goes for this comment too, I cannot believe people so dense are allowed to comment on WSO. I genuinely thought this forum hadn't been overun with uneducated people cosplaying on the internet till I took the time out to read these. Lord have mercy.
Let me translate. OP, you'll eventually see the money and sell your soul and conscience for some coin, while pretending to be religious so rural Republicans will still accept you.
Who cares about the historical impacts of capitalism? The entire discussion here is centered on the past few decades. You are going off topic, intentionally to avoid the discussion OP is trying to engage in.
Kodak failed for reasons that no amount of lobbying or bribing would be able to save them from (even if they tried)
In reality, let's look at some GFC bailouts, shall we?
https://money.cnn.com/news/specials/storysupplement/bankbailout/
Many of these companies have still not paid back yet to date.
And what did the mom and pop shops who had no impact on the GFC get? Nothing. They get to go bankrupt, yet the financial system that has swindled wealth away from them through PE offshoring and M&A consolidation gets to survive due to lobbying and bribing.
There's nothing intelligent about your "argument" which wasn't even coherent and for the most part off-topic let alone making a compelling point.
This reply is proof that there are possibly highschool drop outs on this forum and I'm starting advocate for work email verification before posting on here. There is nothing that can convince me that you and the people agreeing with you went to college and now work in IB or general finance for that matter. This is such a stupid reply, its almost satire.
If you are making the argument that society and governments are overly focused on tying national/global financial health to the stock market, I strongly agree with you.
However, that isn't an indictment of capitalism in general, it's merely an outgrowth of an unhealthy focus on the shareholder at the expense of labor.
Smart way to put it, I guess my use of capitalism is not all the way correct but my gripes with the current system stands as it is. And yes i am saying that governments and big business is tying financial health too closely to stock market returns and its ruining every thing
Random thought....I've never liked how people use the term - Capitalists. The original meaning of a Capitalist is someone whose "wealth employed in carrying on a particular business". When most people say they are a Capitalist they actually say they support the capitalist economic model. Merriam Webster disagrees with me as now a Capitalist is someone who supports capitalism, but if I'm working in a corporation and not risking anything but my time, doesn't seem correct.
If you own a 401k or stock in a company, you're basically a capitalist
This is so true and people don't get it. They're just mad they aren't the ones winning because they don't care about anyone else. It's sad.
Yes, in the modern definition you would be a capitalist, though you wouldn't have much say in how that money is applied with the companies you are investing in.
The Austrian painter was right
Capitalism is the single greatest force that has created a higher standard of living and saved lives (literally) in history. It has created food supply, inexpensive medicines, clean water, shelter in far reaching places around the globe. Couldn't and didn't happen without capitalism. Technology, i.e. the microchip which has literally changed the world in ways too numerous to list, couldn't have happened without capitalism.
Start thinking macro and you'll see that, although not perfect, there is no better way for growth. Think of it this way, capitalism creates the resources that socialism (and other systems) spend. Not saying they shouldn't be spent, but you need the resources in the first place!
We should not confuse corporate socialism with capitalism.
What we really need is a regulating body to prevent monopolies and oligopolies. We also need laws in place to tame individual greed with higher taxes. Higher taxes would promote dispersion of wealth by increasing the marginal cost of every dollar. It would encourage investment and distribution of wealth.
Any system will be corrupted by greed and the apathy of the people towards the corruption of the system. Also, same apathetic people people bitching and moaning about the big companies keep using their services/products. For example, a lot of people complain about Amazon, yet they still give Amazon their money. They complain about their government, yet they still give their government their money. I think these people shouldn't be allowed to vote. People like me should be put in charge. I will bring justice and balance to the universe. MA wasn't a bad dictator.
Tell me this is your first economic cycle without telling me it's your...
As a first year HF analyst who majored in Philosophy and History at top Unis,
I agree with you that capitalism has to end, as most academics within the philosophy space would agree that it’s not sustainable. Not for the reasons you mentioned exactly, but the problem with capitalism is that accumulation would at some point be unsustainable.
The goal of capitalism is to acquire as many resources as possible to fuel growth and dominance. Amazon is a good example of this, growing into every industry imaginable. The goods that Amazon sells aren’t really necessities that you can’t buy anywhere else, most of it is cheap shit from China that you use once or triggers your fancy. What bleeds out of this accumulation is profit and waste.
Profit for amazon and its shareholders, strengthen the company. The byproduct of this production is waste though, both for the object and the consumer. The object is wasteful and useless like most purchases, stripping away natural resources and causing pollution through shipping and industry. This waste through spending capital brings joy to the individual who become addicted to buying and using more things. Even the dividends and profits that investors got through the tech boom ends up as waste. Think about the rich Tesla guys after they become multimillionaires. They buy more expensive and more useless shit which drives the overall economy. They don’t reinvest anymore than what they must to sustain their opulent lifestyles, they have enough excess to spend and would prefer the lavishness than to be warren buffet.
This system can’t last forever because at some point we would have burned all the oil and possibility for such energy generations, causing declines to our standards of living. The question is what will get us to stop thinking like capitalists, where success is massive accumulation followed by a glorious waste of money. We already see that this theory of success is getting out of reach for most people, seen in the disparity in living standards even in wealthy nations, just look at our homeless problem. If people can no long spend their energy growing economically (such as the middle class getting squeezed so much they actually become lower middle class, lower middle class goes into poverty, etc) then you begin to see more catastrophic parts of society such as crime and drug use.
I’m not sure what comes after capitalism but it might look like a type of attitude where we are no longer servile to money and accumulation but rather living life in a more authentic way.
Where can I get some of your pot?
Just become a Christian Democrat (https://en.wikipedia.org/wiki/Christian_democracy) and fix it.
I agree that capitalism is a terrible economic model. It's the worst economic model, except for all the others.
I find it hard to say that we live in a capitalist system when the price of money is fixed.
EDIT: There’s also the “zombie economy” argument that the full pain of 2008 should have been allowed to happen and that everything since then is essentially corporate socialism.
Capitalism is a very good economic system but it should have some checks and balances. I know that many people are very anti regulations on this site but they are necessary because if they do not exist: the average person would get ripped off, the environment would go to shit, and we would be living in the 1920s again. In finance, most regulations exist because bad stuff happened.
Wow what a stupid post.
Let us know when you enter your 20s OP and still see if you feel that way
I've been busy with work so hadn't reviewed the responses to this post but God, Andy and the WSO team need to start vetting who can and can't comment on posts here based on their job before it turns to reddit. There is no way you and the others who gave blanket statements even finished high school talkless of college and now working in finance. This is such an eye opener
Enlighten us then chode
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