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Hobbes's avatar

Would you agree that the primary benefit of Capitalism is variety, and the primary benefit of government-regulated systems is standardization?

Asked by Hobbes (7255 points ) October 12th, 2010

It seems to me that the main benefit of a capitalist system is that it provides a great deal of choice. Because it is decentralized it can meet the varying demands of consumers for a variety of specialized products.

Government regulation, however, allows everyone to receive the same or similar access to a given service. It also allows for a single system to be coordinated on a national scale.

Take water, for example. People use different amounts of water, but everyone needs at least some, and everyone wants it to have a standardized quality. Similarly, road networks benefit from being built by a centralized government because it means a single network can connect the entire country. If you had multiple companies competing with each other to build roads, it would result in chaos.

Special-purpose or luxury items, on the other hand, seem to benefit from a capitalist structure, since not everyone wants the latest computer or a cosmetics kit or a particular sort of lamp, but some people do. A larger-scale example might be Housing. Not everyone wants to live in the same kind of house, or in the same place, and it would be nearly impossible for a centralized government to give everybody the sort of house they wanted in the location they desired. You need a decentralized network, which is what Capitalism provides.

As some of you may know from my previous questions, I have a tendency to think about political issues in terms of broad generalizations, but I think this is a valid one. Thoughts?

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35 Answers

josie's avatar

No. The benefit of capitalism is that it reflects the nature of Man- a creature with the capacity to reason, the need and ability to choose in order to act, and self interest as a moral guide.
Any institution that ignores Man“s nature is corrupt and doomed to fail. Always does. Always will.

Hobbes's avatar

@josie – As you say, choice and self interest are primary motivators for humans, but I would argue that they are not the only ones. Humans are capable of thinking about people other than themselves, though most won’t do it in all situations. I’m proposing that in some areas, choice and self-interest should be catered to, and in others, a centralized method is more appropriate.

josie's avatar

@Hobbes Capitalism is just the economic word for laissez faire. In a true laizzez faire environment, anybody who chooses to can look out for other people, by any means or method. I would never consider inhibiting anybody from looking out for their neighbor. Neither would you. So what are you talking about?

Hobbes's avatar

Laissez-faire is another way of saying “decentralized”. I’m talking about a hybrid system, aspects of which are laissez faire, and aspects of which are run by a centralized organization. I think this would work because some systems benefit from centralized planning, and some from more decentralized networks.

josie's avatar

@Hobbes Then it is not directed by individual volition/choice, and thus is immediately corrupt and doomed to fail.

Nullo's avatar

I would go so far to argue that government is monopoly.

JLeslie's avatar

Regulation in my mind is different that the government actually controlling or creating business. Regulation puts parameters in place, to me it might put ceilings on pricing, or safety measures for workers, but a capitalistic market can still function within the parameters. I like to think that regulation ideally is basically what the majority of us would feel is fair and honest business practices, try to keep the integrity. An upstanding business owner sould not feel a regulation harms his business, if the regulation is done correctly. It should do what he would do anyway. I saw on TV the other night someone complaining that Obama’s health care law includes that business must provide space for women to breast feed. The gentleman argued that it was ridiculous to order such a thing, when someone like his father, who was a small business owner does not need to be told to do this, he would simply allow a woman to use his office if she needed privacy. Well, my point to that is, if he will do it anyway, why is he pissed about it being in the bill?

Your hypothesis is interesting, I do think Capitalism helps creat more choice, with that I agree, but government working in concert with private sector does not have to limit the choice, except where it might be appropriate, when done right. Of course, nothing is perfect, there might be overregulation at times in some industries, and underregulation in others that should have more.

LostInParadise's avatar

I would say that government acts more to stabilize than to standardize. Capitalism provides variety, but there are two problems. The first is business cycles, which the government tries to keep from being too extreme. The second problem is the tendency for wealth to concentrate in the hands of the few, which can eventually lead to serious economic problems.

Hobbes's avatar

@Nullo – I suppose what I’m arguing is that monopolies can actually be beneficial for certain systems. Certainly not for everything, but sometimes having a single organization run something can make it much more efficient. Of course, this organization should be democratically subject to the will of the people it served, and so it would be driven by “individual volition/choice”.

@LostInParadise – It seems to me that problems arise when the accumulation of wealth or the swings of the market result in people on the lower end not being able to meet their basic needs (food, water, shelter, health, etc.)

jrpowell's avatar

@Hobbes :: Yes, there are certain things that are called a Natural Monopoly.

Does it make sense for 20 companies to dig up the roads to run water to every house?

squirbel's avatar

But if there was no variety in your society or any you had touch with – would you miss it?

Answering this will drill down to the crux of your question – nature of man included and all.

Hobbes's avatar

Of course I would, but my point is that it’s not a choice between variety and no variety. People want different things, but there are some things that everyone wants to the same or similar degree. Some things don’t require much variety – everyone wants clean air, clean water, efficient sanitation etc. Even if people use different amounts of water or flush different amounts of poop, I think they want the system to be standardized. Other things are different. There are lots of specialty objects and luxuries for which just couldn’t be efficiently created by a single organization.

CaptainHarley's avatar

We alaready have government-regulated systems. Ask any small business owner.

Hobbes's avatar

I know, I’m just saying that I think some balance between government regulation and capitalism is more desirable than pure laissez-faire Capitalism or total state-ownership.

CaptainHarley's avatar

I agree. : )

perspicacious's avatar

No. The primary benefits of capitalism is ambition, ingenuity, progress, and innovation.

Hobbes's avatar

But what that leads to is a great deal of variety.

perspicacious's avatar

What that leads to is a productive society, competition, fair pricing, The poster asked if variety is the “primary benefit.” The answer to that is no. It is a result, but not the primary benefit.

Saoirse's avatar

There’s a benefit to Capitalism?

Hobbes's avatar

@perspicacious – Do you think that competition is always desirable?

Nullo's avatar

@Saoirse Of course. Capitalism is the economic equivalent of Darwinism. Survival of the most profitable idea. In the race to the top, businesses compete with each other to provide the best quality for the lowest cost.
Socialism doesn’t have anything like that.

CaptainHarley's avatar

@Saoirse

Do you use a cellphone? Capitalism made that possible. You obviously use a computer. With out capitalism, the computer would have come years later, maybe never. Walk through a supermarket or a store like WalMart. See all those products? Capitalism made all of it possible. Allowing people to make a fair profit on goods and services makes for a vibrant and variagted culture.

And to spare my Liberal friends on here the effort, yes, government plays a role too .. that of keeping the capitalist engine from running roughshod over the well being of both the culture’s people and of the enviornment.

Hobbes's avatar

@CaptainHarley – It is arguable (though I’m not saying I necessarily support this position) that most modern “advancements” like the ones you mention haven’t actually improved the quality of life. Certainly medical technology and the like has saved the human race a great deal of suffering, but do cell phones, computers and Wal-Mart actually make us happier?

I’m aware that I’m departing from the original point of the topic, but I think it’s an interesting question. I would tend to agree with you though that the main function of government should be to act as a restraint on Capitalism, as well as to provide services that work better when coordinated by a single group (Police, Water, Roads, etc.)

CaptainHarley's avatar

Well, not THE main function, but perhaps third, right after national defense and responding to major disasters. : ))

Hobbes's avatar

Well, I’m an idealistic hippie and a pacifist who thinks nations shouldn’t exist, so I might resist that first one. ;-)

CaptainHarley's avatar

That is your right.

Nullo's avatar

It has been observed that competition creates better product, and that monopolies tend to stagnate.
Government has a monopoly on governance. Might it stand to reason that competition in government might create better governance? Am I Fluthing too late in the evening to realize that we already do this?

mattbrowne's avatar

I would rather use the pyramid in

http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs

The primary benefit of government-regulated systems is meeting the physiological and safety needs. The primary benefit of a market economy is meeting the esteem and self-actualization needs.

Hobbes's avatar

@mattbrowne – That’s a good way of putting it. Things like transportation don’t seem to fit neatly into that model though.

perspicacious's avatar

@Hobbes Yes, it benefits the consumer.

mattbrowne's avatar

@Hobbes – I think transportation as such is about problem solving. How to get from place A to B. The private sector can handle this. But the government has to define safety rules related to transportation.

Saoirse's avatar

@CaptainHarley

Capitalism did not make any of that possible. Whether money or capitalism existed or not it is human ingenuity and drive and intelligence that made all of those things possible. If capitalism never existed, don’t you think we still would have built roads and schools and hospitals? Wanted to make little pieces of technology to make our lives easier or more interesting? Ofcourse we would have. A human wants or needs something, he comes up with how to do it, he does it. Money/capitalism only serves to hinder human advancement, because it creates too many barriers between desire and goal.

And furthermore, government does not protect us from businesses doing things against our well being and certainly does not protect the environment from them, either. Perhaps they should, but they don’t.

Hobbes's avatar

Well, from what I understand, Capitalism makes trade possible over long distances and between people who don’t know one another. The result is that people can expend time and energy making things they don’t personally need, but which someone else is willing to pay money for.

Saoirse's avatar

@Hobbes

But that is possible with bartering as well. Money and Capitalism don’t really need to come into play. I think that might even be where they got the name “trade” from. Because when people bartered, they were trading their items for other items.

Hobbes's avatar

But bartering takes a long time and only works over short distances. Plus, when the stakes are really high, people get mad at each other, and a standardized medium of exchange helps.

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