Posts Tagged ‘Capitalism’

Toys Were Us

March 18, 2018

This is sad. Toys R Us is closing all of its stores. Here’s the report from the Washington Post.

Toy store chain Toys R Us is planning to sell or close all 800 of its U.S. stores, affecting as many as 33,000 jobs as the company winds down its operations after six decades, according to a source familiar with the matter.

The news comes six months after the retailer filed for bankruptcy. The company has struggled to pay down nearly $8 billion in debt — much of it dating to a 2005 leveraged buyout — and has had trouble finding a buyer. There were reports earlier this week that Toys R Us had stopped paying its suppliers, which include the country’s largest toymakers. On Wednesday, the company announced it would close all 100 of its U.K. stores. In the United States, the company told employees closures would likely occur over time, and not all at once, according to the source, who spoke on the condition of anonymity because they were not authorized to discuss internal deliberations.

Toys R Us, once the country’s preeminent toy retailer, has been unable to keep up with big-box and online competitors. The recent holiday season dealt another blow to the embattled company, which struggled to find its footing even as the retail industry racked up its largest gains in years. In January, the retailer announced it would close 182 U.S. stores, or about one-fifth of its remaining Toys R Us and Babies R Us locations.

What is going to happen to all the Toys R Us kids?

I guess they all grew up and kids today get their toys from WalMart and Amazon.com.

The glory of capitalism is its ability to engage in creative destruction. Businesses and industries are all subject to the strict discipline of the market. If they can no longer serve their customers in an efficient manner, they are destroyed to make way for businesses that can. The result is, hopefully, ever-increasing prosperity. We ought not to be over sentimental about the loss of Toys R Us. The company has not been functioning well for some time. If Amazon or Walmart can deliver toys to children cheaper and more efficiently, than so much the better for all of us.

I cannot help, though, thinking that we are losing something. I know using e-commerce to deliver products right to your door is more convenient. I know superstores like WalMart are cheaper. But, I am afraid that the children of the future are going to be missing out on something special, the delight in stepping into a store full of nothing but toys. Maybe smaller toy store chains will take Toy R Us’s place. Maybe not. I guess there is no stopping progress, if that is what this is, but I regret the losses along the way.

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The Triumph of Capitalism

December 23, 2013

Cracked.com is a humor website that besides being funny is also surprisingly informative. You can learn all sorts of interesting facts from the writers while laughing. One recent article listed five amazing pieces of good news that nobody is reporting. News reporting usually focuses on dramatic events and these stories are happening in the background without anybody really doing anything, so they tend not to be noticed. I remain a little skeptical about number 5, we are closing in on world peace.

This one seems laughable — mankind has gone from fighting with swords, to muskets, to machine guns — right up to the modern era of poison gas and nukes that can murder every human on the planet in minutes. Mankind’s technological growth has been marked mainly by increasingly efficient ways to slaughter each other.

Sure enough, the 20th century had to have been the most violent in human history. Two world wars, conflict in Southeast Asia, constant war in the Middle East — and those were just the ones that America was directly involved in. At the beginning of the 21st century, with Afghanistan, Iraq, Libya, and rumblings of war with Syria, it seems like the world is a pack of rabid dogs about to pounce on a Snausage pinata.

The Good News:

Even with wars in Afghanistan and Iraq, the first decade of the 21st century saw the number of annual battle deaths at its lowest ever in history.

Professor Joshua Goldstein put it best: “If the world feels like a more violent place than it actually is, that’s because there’s more information about wars — not more wars themselves.” Overall, we’re in the midst of an unheard of “long peace,” as no major powers have clashed since World War II, replacing them with smaller wars that historically would count as skirmishes — the U.S. lost 3,400 soldiers in Afghanistan, which is terrible, but during the American Civil War, 4,700 troops were killed on one side of one single battle. Here it is in graph form:

Via Wsj.com
Sans screaming.

OK, so maybe this is just a temporary breather after the bloodbath that was the previous century? Nope — it’s part of a long-term trend. As crazy as it seems to suggest it, the past couple of hundred years have been the most peaceful in world history. That’s including the world wars.

Yes, in absolute numbers, more people died violently in the 20th century than in any other century — but that’s because there are so many more people now. The chances that a person living in the 20th century would die violently were about 3 percent. That’s a historically low number — it was five times higher in prehistoric societies. In tribal societies, war was a daily occurrence — just the process of everyone settling down into large-scale governments, even violent ones, was an improvement. If our hunter-gatherer ancestors could see us now, they’d be confounded by the complete lack of annual head smashing and face stabbing (if you ever unfreeze a caveman, show him our violent video games — he’ll go nuts for that shit).

And it’s not just war, it’s all violent deaths — in 14th century England, some cities had a homicide rate as high as 110 per 100,000 citizens. London’s homicide rate in 2012 was just under 1 per 100,000. And we’ve previously talked about how violent crime is dropping to historic lows, even in the gun-crazy USA. No matter how you break it down, violence is slowly going out of style.
Maybe, but they were making similar statements back in 1913 and the international situation today is frighteningly similar to the situation just before World War I.
But I am more interested in the last piece of good news they present, number one, world-wide, poverty is dropping at a shocking rate. Please excuse the language.
For decades now, we’ve watched commercials that feature some retired actor stumbling through some impoverished village in some undisclosed location to make viewers feel bad enough to donate money. Considering that we’re mired in a worldwide recession, it’s a sensible question: “Does any of this shit even make a difference?”

Yes! Even though lately it seems like the whole world is in a race to the bottom, the poorest of the poor are actually climbing out of the financial shithole. From 1990 to 2012, the number of the world’s extreme poor was cut in fucking half. In case you were wondering, that would be the first significant global decline in extreme poverty.

Ever.

Not bad, right?

And these aren’t just statistical tricks here — when they calculate this, they’re not just counting income, they account for total living conditions — infrastructure, schools, access to clean water, everything. A billion people have that stuff for the first time. And what’s really encouraging is that this all happened three years ahead of the official estimates, which pegged 2015 as the soonest such a lofty goal could be achieved.

So how did this happen? International aid helped, but the big jump has been in the increased participation of previously isolated countries in international trade. You know how people are always complaining about how “they’re shipping our jobs overseas!” Well, this is where they went — to people who previously had no jobs at all. And that boom that swept across China and India is expected to continue in places like Sierra Leone, Ethiopia, and Rwanda — all of the places you previously only heard about in the context of heart-breaking ads begging for donations. If things continue at this pace, countries like Nepal and Bangladesh would likely see extreme poverty shrink to near-nonexistent levels.

What is the cause of this amazing reduction of poverty all over the world? The expansion of international trade and also the expansion of free market economics or capitalism. No system of economics or politics made by human beings is perfect and capitalism does have its flaws. Nevertheless, the expansion of free market reforms has been responsible not just for a reduction in absolute poverty but also for the rise of a middle class throughout the developing world. Countries like India and China, where the great mass of people have known nothing but poverty and near starvation now, at least, have a chance to live with some small degree of prosperity. For the first time in human history, the obese outnumber the starving.

Yet capitalism continues to be maligned as a system that enriches the few and impoverishes the many. Why is this? Are the critics of capitalism simply ignorant of these facts? Perhaps. Or, it may be that many of the fiercest critics of capitalism prefer to see the poor stay poor. Capitalism has a way of disrupting hierarchies. In a free market; the ambitious, the inventive or the hard-working can rise. The lazy or foolish can sink, even if they belong to an old family or a special caste. It is perhaps no coincidence that the defenders of the idea that the markets must be controlled and regulated tend to be those already on top. Think of how many grandchildren of successful industrialist embrace various forms of Socialism, or how successful European firms didn’t have a problem with Fascism or Nazism, or even Democratic Socialism. The biggest supporters of Big Government tend to be Big Businesses. As long as they have a hand in setting the rules,they can set them to their advantage. And, if you advocate the redistribution of wealth, you have many opportunities of redistributing wealth and power to yourself and your cronies.

I am a defender of capitalism because I am a defender of freedom, and because I would prefer that the poor not starve. As a system defined by the free exchange of goods and services, capitalism is the only economic system that promote freedom. Other economic systems such as Socialism or Feudalism are based on the forcible taking of goods and services from those that produced them to those deemed deserving by some elite. That way lies slavery and poverty.

 

The Tyranny of Choice

June 30, 2013

I read about this interview with Slovenian philosopher Renata Salecl in an article by John Sexton at Brietbart.com. The interview itself can be found at Der Spiegel. Ms Salecl believes that all of the choices we must make in modern life, under the capitalist system, causes us all too much stress which results in a “tyranny of choice”.

SPIEGEL ONLINE: Ms. Salecl, at the fast food chain Subway we have to make half a dozen decisions before we can finally enjoy our sandwich. Is that what you mean when you speak in your lectures about the “tyranny of choice?”

Salecl: I try to avoid places like Subway, and if I end up there I always order the same thing. When I speak about the “tyranny of choice,” I mean an ideology that originates in the era of post-industrial capitalism. It began with the American Dream — the idea of the self-made man, who works his way up from rags to riches. By and by, this career concept developed into a universal life philosophy. Today we believe we should be able to choose everything: the way we live, the way we look, even when it comes to the coffee we buy, we constantly need to weigh our decision. That is extremely unhealthy.SPIEGEL ONLINE: Why?

Salecl: Because we constantly feel stressed, overwhelmed and guilty. Because, according to this ideology, it’s our own fault if we’re unhappy. It means we made a bad decision.

SPIEGEL ONLINE: And if we make the right choice?

Salecl: In that case, we constantly feel that there’s something even better hiding behind the next corner. So we are never truly content and are reluctant to settle on anything.

SPIEGEL ONLINE: “Don’t let the common man decide. He’s not smart enough.” That argument has been used by autocrats for centuries. Do you mean to say they are right?

Salecl: No. I don’t criticize political or electoral freedom, but capitalism’s perversion of the concept: the illusion that I hold the power over my own life.

SPIEGEL ONLINE: But I do have that power. I can decide for myself what I want, even if the thought stresses me out.

Salecl: Not at all. A friend, who’s a psychologist, told me about a patient once: a woman who was well educated, had a good job, a house and a loving husband. “I did everything right in my life,” said the woman. “But I’m still not happy.” She never did what she herself wanted, but what she believed society expected from her.

SPIEGEL ONLINE: So we need to be better at pursuing our personal happiness?

Salecl: Even that is an illusion. Happiness has become a bar we measure ourselves against. The world is full of women’s magazines that strive to tell us what will make us happy. It’s filled with Facebook status updates, telling us how much other people are making of their lives. There are even indexes evaluating how happy certain nations are. “Be happy” has become a societal imperative. If you aren’t, you have failed.

SPIEGEL ONLINE: But the motto also tells everyone that they can make their own choices. That gives people greater control over their lives.

Salecl: Yes, but that’s only partially true. We still can’t control the consequences our choices will bring. That’s the next step. Not only do we want freedom of choice, but we also want a guarantee that whatever we choose will be exactly as we envisioned it.

SPIEGEL ONLINE: Why are we so afraid to just go with the flow?

Salecl: Because every time we decide for something, we lose something else. Buying a car is a great example. A lot of people not only read ratings before they buy their car but they continue afterwards — to make sure they really made the right choice.

SPIEGEL ONLINE: If I have no choice, because I can’t afford anything, will that make me happier?

Salecl: Paradoxically, no. One of the greatest gains of capitalism is that even the proletarian slave feels like a master. He believes he has the power to change his life. We are propelled by the ideology of the self-made man: we work more, we consume more and in the end we consume ourselves. The consequences are burnout, bulimia and other lifestyle diseases.

SPIEGEL ONLINE. Why do we treat ourselves so poorly?

Salecl: Sigmund Freud already discovered that suffering gives us pleasure — in a strange masochistic way. The tyranny of choice exploits that weakness. Consumer culture exhausts us. We suffer. We destroy ourselves. And we just can’t stop.

SPIEGEL ONLINE: But we aren’t really the victims. After all, we created this system ourselves and as long as we keep consuming, it will continue to exist. Ultimately, capitalism only mirrors human nature.

Salecl: That’s true. Freud also said we choose our own neuroses. Capitalism is the neurosis of humanity.

SPIEGEL ONLINE: There are other ways. There’s a restaurant in London that only serves one dish and people are lining up outside to try it. And a company in Berlin sells T-Shirts without showing them to customers first.

Salecl: That’s a clever marketing strategy. With children you can see the same thing. If you ask them at a movie theater what they want to see, they will likely be overwhelmed. On the other hand, if you say shortly before, “let’s go see James Bond,” they will probably say, “No, mommy, anything else, but not that.” If there are no boundaries, we make our own.

SPIEGEL ONLINE: Will we ever be truly free?

Salecl: No. But we can live a more relaxed life. We can accept that our decisions aren’t rational, that we are always conditioned by society; that we lose something every time we choose something else, and that we can’t truly control the consequences of our decisions.

If Ms. Saleci does not like the all of the choices that modern consumer based capitalism offers us perhaps she would like to return to a simpler system, like Soviet Communism.

They didn’t have many choices to make in the Soviet Union, just as the people in North Korea don’t get many choices on how to live their lives. Somehow they don’t seem to be any happier than people in free countries.

At the end of his article John Sexton observes,

In another talk, Salecl argues that choice offered in a capitalist society “also sort of in some way pacifies people.” She went on to say that capitalism leads to delusion when “at some point this subject starts believing that he is not simply a proletarian slave, but that he is a master, that he is in charge of his life.” She sums up by saying that “the ideology of choice is not so optimistic and it actually prevents social change.” [Lee Doren did a nice job responding to these statements back in 2011.]

Salecl’s critique of choice sounds remarkably like a communist apology for the failure of the proletariat to be sufficiently immiserated under capitalism. If only we weren’t distracted by all these pacifying choices, we would change society, i.e. rebel against the established order.

Another possible interpretation of the same data is that people don’t want massive social change because they are generally, albeit imperfectly as is always the case, happy at having the freedom to pursue life on their own terms. Most people like having a choice of beers. But to Salecl this is mostly a problem, an obstacle to be overcome in pursuit of a new order.

Basically this is the same attitude shared by many on the Left. Most people don’t want fundamental change because they are so befuddled by the prosperity and choices that capitalism brings that they don’t know what is really good for them. Luckily, we have people like Renata Salecl to tell us how awful it is that we have choices to make.

Personally, I like being able to choose my toppings at Subway.

It Takes a Village

July 18, 2012

to build a business. That seems to be what Barack Obama thinks. Actually, the Republicans are making a little more out of his statement than they really should. He didn’t precisely say, “you didn’t build your business”. What he did say is somewhat intriguing. Here is part of President Obama’s statement which puts his remarks in a fuller context.

There are a lot of wealthy, successful Americans who agree with me, because they want to give something back.  They know they didn’t -look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something – there are a whole bunch of hardworking people out there.

If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business. you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.

The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.  There are some things, just like fighting fires, we don’t do on our own.  I mean, imagine if everybody had their own fire service.  That would be a hard way to organize fighting fires.

In an important sense, President Obama is right. No great enterprise is ever accomplished by one person working entirely by himself. Thomas Edison invented the light bulb, but he hardly built his laboratory all by himself. He did not think up the idea all by himself but he built on the work of others who had worked before him. Albert Einstein did not just write e=mc² on a chalkboard one day. He built on the work that physicists had been doing for the past decade. No one does anything truly by themselves.

And yet, Obama is wrong too, and the way that he is wrong perhaps says something about the way he views the world. We justly honor people like Edison and Einstein because although they built on the work of others, they put that work together in new ways to create something altogether new and wonderful. Without such innovators, the work of others that they used would not have been used to its full potential.

A business person, entrepeneur, or capitalist also makes use of the work of others, just as Obama has said. What he did not say is that the capitalist makes use of the existing work, or investments, or factors of production, such as labor, land,  and capital to use economics jargon to make something new and wonderful, just as the inventor or scientist does. In fact, the capitalist, by bringing together the labor, capital and resources to make a business is the one indispensible person in making any sort of progress. Without the capitalist, there are no factories, no trade, no goods and services being exchanged for the good of everyone.

This understanding of capitalists seems to be directly opposite Marx’s understanding. If I understand him correctly, he believed that capitalists were a sort of parasite that leached off what the workers produced. Instead of profit being the just reward of the ones who took the risks and put everything together, he believed that it was what was stolen from those who did all the real work. I do not wish to speculate too much on the President’s inner thoughts, but I strongly suspect that this his close to his understanding of things as well.

Now, note, I am not saying that Obama is a Communist or a Marxist. I am not sure that he would identify himself as a Marxist in any sort of formal sense. Nevertheless, such ideas were and are very much a part of the academic environment in which he lived before turning to politics. With his background, it would be surprising if Obama did not fail to appreciate fully the importance of private enterprise.

He is wrong in another sense too. Firstly, I am not sure he is aware of the fact that government has no actual resources of its own. Everything he wants to give credit to the government for accomplishing, was ultimately paid for with taxes from the private sector. Sometimes, it is a good idea to take money for the common good, roads and armies come to mind as examples. Other times it is a terrible idea, think Solyndra, or stimulus packages.

Secondly, look closely at his statement. Notice that he seems to believe that collective action is only possible through the state. Consider his example of fire fighting. I can imaging fighting fires without a formal government organization. What about a volunteer fire company? How about a private fire fighting service that the people in a town pay a fee for? These examples may not work very well, but I want to illustrate that it is possible for people to work together without the federal government running things. It is possible to help the disadvantaged through private charities. Businesses are usually very good examples of people working together voluntarily.

It is this particular blind spot that I think Obama’s statement really reveals. This idea that nothing should be done unless government, preferably at the highest levels, is leading the way. I think that Obama simply does not see the importance of the voluntary associations that Alexis de Tocqueville saw as so essential to American success, and so misunderstands the factors that have made America what it is. This is the real problem with this president.

I am glad to see that I am not the only one who has described Obama’s economic views as essentially Marxist.

Laissez-nous Faire

January 20, 2012

Back in the good old days, when men were men, women were women, and transgendered hermaphrodites were transgendered hermaphrodites, There was a King of France named Louis XIV. Louis’s Minister of Finance was Jean-Baptiste Colbert. Colbert had lots of good ideas for helping everybody in France. Once Colbert brought together a group of French businessmen and asked them what he could do to help them out. Their response was “Laissez-nous faire”, or “Leave us alone.

I think that it is possible that, despite all of our modern scientific knowledge and technology, the people who lived in the seventeenth and eighteenth centuries were wiser than we are. Those French businessmen, at any rate, had a clearer idea of what was best for their long-term interests. Nowadays businessmen, when asked a similar question, would not hesitate to demand subsidies, tax breaks, regulations to keep competitors out of the market, and crony capitalism. It I were to name the greatest problem with Capitalism, it would be the Capitalists. To put it simply, too many businessmen don’t really want a free enterprise system. People generally assume that Big Government and Big businesses are opposed to one another, but the truth is, that all too often they are on the same side.

If you think about it, even in Louis XIV’s time, excessive government regulation of the economy really didn’t work so well. This was a time when the fastest mode of transportation was the horse. The industrial revolution had hardly begun. If men like Colbert would have been better advised to leave things alone back then, how much more so should his successors leave things alone in our infinitely more complicated world of today.

Colbert in 1682.


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