Capitalism, casinos and free choice


#1

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#3

I don't think that's a particularly new insight that capitalism isn't actually based on "fair trade between buyers and sellers." The fundamental critique of capitalism is that trades cannot be fair because every economic relationship involves a power imbalance. The house always wins doesn't just apply to casinos.


#4

Every? Certainly we can all name unfair ones -- most of us in the private sector work for owners far wealthier than ourselves being the most obvious one, but there's lots of economic relationships between equals. For example, many hobbies require equipment and people generally end up with equipment they they no longer need or which doesn't suit them. So hobbyists enter into economic transactions with each other.


#5

sometimes there are seller advantages, sometimes there are buyer advantages in information (insurance being an example where the buyer knows more than the seller). Yes, markets aren't perfect and it's the state's role to insure information transparency (and nothing else), but can we stop running around pulling our hair out every time somebody comes up with a reason why markets aren't perfectly perfectly awesomely perfect? Also, nobody HAS to go to a casino, although the cognitive addiction of staying there once you've gone is significant. But then again, it's a straw man to assume that everybody is gullible as crap without autonomous decisionmaking and then point fingers and yell "ohhh the bad corporations trick people!11!!!one!11oneoneeleven!"


#6

I should have been more clear. It's that every capitalist economic relationship, like the fundamental one between employer and employee you mentioned is unequal. People can have economic relationships along more balanced lines, like gift giving, but even these relationships are affected by the larger social order to an extent.


#7

You don't have to be gullible as crap to get taken by the house. They deploy a huge range of intellectual talent to ensure that despite you not being gullible as crap they'll part you with your money. They take advantage of your human traits. Has anybody ever sat in on a marketing meeting and squirmed at the way the participants propose ever more elaborate ways to trick customers out of more of their cash? it's been a long time since I heard anybody say "just serve your customers well and the money will follow".


#8

But just because it's an economic trade doesn't make it a form of capitalism. Capitalism is a specific, historically contingent form of economic trade, one that usually applies to large scale economic systems, and particular forms of the division of labor. It's called capitalism because it involves the raising and use of large amounts of capital. If you have $50 bucks to guy some equipment from your friend, I doubt you'd call that "capital", but if you have $50 million laying around and you spend it on a start up in the expectation that you will double your costs in buying that start-up, that's capitalism.


#9

You write "it's the state's role to insure information transparency (and nothing else)" as if that's some kind of axiom. Did you read this in your Greg Mankiw econ101 textbook?

So I take it you are all for monopolies and the distortions and rent-seeking they engender? How about other predatory practices like bait and switch loans or mortgages? Or companies that plant stores in multiple locations in order to knock others out of business, only to close up most of the stores once their goal is achieved? How about slave labor? Child labor? Forced labor? Indentured servitude? Company stores? I guess governments shouldn't do anything about any of that.

Is information transparency, even assuming its possible in most markets, very important if your only choice is to work with a single company (given your love of monopolies)? And how exactly can the government go about enforcing information transparency in global markets where parties are subject to different rules? And do you think there is any market more complex than the supermarket that actually manifests this vaunted information transparency? Hell, even the supermarket contains all sorts of opacity.


#10

I'm confused as to why this is a "fundamental critique" of capitalism. It seems like an inescapable and not necessarily harmful relationship, as long as its voluntary (or even satisfying to all parties involved). If I get hired to do a job for someone, I don't really mind that the person who hired me can fire me if I don't do the job I promised to do, or if they no longer require my services.


#11

That said, there's nothing wrong with using $50 million to start a company and hire employees to run it, is there? This is where I get confused at reflexive condemnations of capitalism (not that you're condemning it, but for folks who do). Like government, it seems to be only as bad as the people in charge.


#12

Capitalism and free choice, eh?

Here's the thing about benevolent capitalism, and about free choice - lots of people seem to think it exists, but I've never come across any compelling evidence for it.

I say, in the absence of anything convincing, can we drop the pretence and start operating under the assumption these things don't exist? The world makes a lot more sense that way.

A person is complicated enough to believe they have free will, and be fairly unpredictable. But people, they're more predictable than the weather, that's for sure. Does the atmosphere have free will?

The assumption that sticks in my craw, is that anyone can be 'worth' millions of times the 'worth' of another. You can scoff at the choice of words and scare quotes, but at the end of the day, somebody's net worth is a proxy for the value society places on them.

And when society appears to place millions of times more worth on one person than another, the 'valuable' person is somewhat apt to climb up their own arsehole. The entire basis of capitalism runs counter to egalitarianism, and doesn't stand a snowflake's chance in hell of ever resembling a meritocracy. This is why, in the far-right wingnut home of capitalism, you have people walking around claiming the poor don't deserve universal health care.

'...only as bad as the people in charge' - is why I'm an anarchist. Nobody deserves to be in charge - it's not something I'd wish on my worst enemy or best friend.


#13

Wow, what a spectacular strawman of an article. As long as trade is voluntary, it benefits both sides - if it didn't, why would people do it? That's how markets work, not some vague notion of what constitutes "fair". It's about choice. And this ridiculous article ignores that, assumes people are like mindless sheep, tries to make a completely voluntary trade into something nefarious, and then turn it into a larger critique of capitalism. The nanny-bully condescension level of this article is smothering.


#14

PT Barnum figured this out a long time ago....


#15

That said, there's nothing wrong with using $50 million to start a company and hire employees to run it, is there?

Except when you pay your staff so poorly that they rely on welfare payments to feed their children. Welfare payments in turn funded by the taxpayer (which if the accountant of the man/ woman with capital is any good is not going to be the capitalist!). Than I would suggest, there is something very wrong and distorted.

When access to clean water, clean air, education, health care and natural resources are in part controlled by those with capital and the welfare of the majority of human beings is subservient to the interest of that capital than there is something wrong.

Health Care in the US rather a great example of all that is wrong with the market when it comes to the provision of life's essentials. Writing from the UK where the current government is desperate to "level out" the playing field for the market in health care, this really matters.


#16

Because humans - yes, even me, even you - are not rational actors. We have specific biases that cause us to act contrary to our own (consciously known, stated) interests, even after we are told about, educated about, and explicitly instructed to compensate for those biases. Business make much better use of the decades of research on biases than individual consumers possibly can.

Also, because power imbalances mean that just because a trade is voluntary, doesn't mean it is just, fair, or good. If Walmart is the only employer hiring and you don't have enough savings to move, you're going to work for them, even if you still won't be able to pay rent and feed your family working full time. If you have no insurance and get really sick, you're going to go to the emergency room and incur an unknowable amount of debt not just because for any dollar amount you could owe, your life is worth more to you than that, but because in that moment you aren't thinking in dollars at all.


#17

The most genius comment I ever heard about a trade came from the used car salesman that sold me my first car not previously owned by my parents:

A good deal is a state of mind.

It comes to mind so many times when I think I got a bargain, or hear someone who thinks they did.

We all like to pretend we are winning. Does Macy's really have a One Day Only sale just one day or year, or is it more like one in every five days? Yet people rush to these sales as if they were finding amazing bargains every single frickin' time.

Do people kind of know the real prices of clothing is the sales price? Yes, but it doesn't lessen the sensation of getting a great buy.

Then if you buy an item at full price you feel all La Te Da me, I'm so rich I buy at full price.


#18

Most mazes in our economy are metaphorical: the confusion of multi-part tariffs for mobile phones, cable television or electricity.

Suggestion: the next time you're writing an article on how "the marketplace" doesn't really work and deceives customers, do not use services which are delivered by government-granted monopolies as two of your three examples.


#19

Having worked in the rag trade, I know full well what the price of clothing is. It makes me most reluctant to buy pants, lemme tellya...


#20

This is a straw man argument:

This I can only describe as a "recursive reductio ad absurdum straw man" (Impressive!)

Just wanted you to see what a straw man argument looks like.


#21

Where pants = underwear? If yes, completely agree. One of the few things that's overpriced for both men and women.