Massive Environmental Externalities

[latefordinner]

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Who ever claimed that?

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Explain to me how market capitalism could ever reach a steady-state

[Brainwalter]

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Who ever claimed that?

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Explain to me how market capitalism could ever reach a steady-state

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You yourself implied that there are ecological, physical limits to the amount of goods that can be produced. When those are reached, the economy can not expand. A constant amount of goods are produced each year. An average business earns an economic return of 0 (matching the rate of interest). Successful businesses make economic profits, unsuccessful ones make economic losses. Prudent fortunes are preserved, spendthrift ones are lost to the upwardly mobile. It's possible a high standard of living could be achieved in a short workweek, leaving lots of leisure time.

I'm sure you will deride this as a vision of the Great Capitalist Future, but I am just answering your question, and I don't see anything inherent in free trade and respect for private property that necessitates perpetual growth. Maybe you could explain that to me.

[latefordinner]

1) capitalism has shown nothing but the ability to liquidate natural capital and count that as a profit, rather than a cost. nothing i have ever read has convinced me that any market-based system can successfully internalize evironmental externalities

2) so are you asserting that if a capitalist economy reaches an outward bound point and stops growing that wealth generation stops? if the average business return is zero, and some people are still upwardly mobile, that means someone has to be downwardly mobile. There is a limit to downward mobility (zero), there is no limit to upward mobility. As some people get richer and richer more people's wealth will decrease to zero?

this will eventually result in the death of those people by starvation, the population will decrease until the economy shrinks to the point that it can grow again, and at some point in the future the cycle will happen again?

(note I am not placing a moral judgement on this assertion, i actually think there is no way that the earth can sustain its current population for any meaningful length of time)

[Brainwalter]

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1) capitalism has shown nothing but the ability to liquidate natural capital and count that as a profit, rather than a cost. nothing i have ever read has convinced me that any market-based system can successfully internalize evironmental externalities

[/ QUOTE ] I don't know if this is aimed at me, but it's irrelevant to the content of my post.

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2) so are you asserting that if a capitalist economy reaches an outward bound point and stops growing that wealth generation stops? if the average business return is zero, and some people are still upwardly mobile, that means someone has to be downwardly mobile. There is a limit to downward mobility (zero), there is no limit to upward mobility. As some people get richer and richer more people's wealth will decrease to zero?


[/ QUOTE ] I said spendthrift FORTUNES will be lost to the upwardly mobile, implying middle-or working-class thrifty/prudent people getting richer at the expense of the already-rich but wasteful. I thought you would be in favor of this.

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this will eventually result in the death of those people by starvation, the population will decrease until the economy shrinks to the point that it can grow again, and at some point in the future the cycle will happen again?


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No I am talking about a theoretical stable economy with stable population.

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(note I am not placing a moral judgement on this assertion, i actually think there is no way that the earth can sustain its current population for any meaningful length of time)

[/ QUOTE ] We shall see.

Edit: Also you said wealth creation would be zero, I wouldn't put it that way, wealth is created at the same rate it is consumed.

[latefordinner]

so stable economy + stable population = reversion to equal wealth distribution?

[Brainwalter]

No, I don't think that's necessarily true. I did not imply a more egalitarian distribution. Nor can I rule one out. Uneven distribution of wealth may be natural and what I said does not imply an equalization of wealth. I was just saying that there wouldn't have to be a permanent and inescapable caste system. the poor could be upwardly mobile, and the rich could spend their fortunes into oblivion, and in this way the wealth could still change hands from the non-productive to the productive (as I believe it does now, I was hoping that fellow yesterday would back up his claim that the 3% who hold the majority of the wealth manage to keep it in their families indefinitely, but I don't think he ever did). Production=consumption in the aggregate, but there would still be people who consume>produce, and some that produce>consume, and those people would obviously still lose and gain wealth respectively. However notice that if the average business venture is a break-even with the rate of interest, that the capitalists you despise are earning less of the profitable returns on their wealth that you begrudge them.

Also let me change the conditions I originally set: If we are at the natural physical limits of total production, that might imply that people are working extremely hard and long (or not- there could be some ultra-efficient processes at work), but that maximum amount of output is not the only point at which a mature economy could reach an equilibrium where consumption=production. It could be that people are just able to produce enough in 5 hours a week that they can spend the rest of their time at leisure, AND they have enough material wants satisfied that they are (in aggregate) content to do so. All that's required for a steady-state, non-expansionary capitalist economy is that total consumption=total production.

I'll ask you again, though, if you could explain to me why you think that capitalism requires a perpetual expansion, or why you assumed capitalists think such expansion is possible.