r/Capitalism • u/JewelJones2021 • 19d ago

What is Capitalism?

What do you think when you read the word or hear someone say, "capitalism"?

6 Upvotes

76% Upvoted

u/JewelJones2021 18d ago

Debt is different from poverty.

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u/No_Assistant8994 18d ago

Yes but debt will inevitably cause the largest market crash. Take for instance the 2008 housing crash, caused by debt

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u/mcnello 18d ago

This has the exact opposite correlation that you are inferring. Look at the following countries:

Countries with high debt to gdp:

|| || |Luxembourg|449|

|| || |Sweden|307|

|| || |South Korea|284|

|| || |Norway|279|

Countries with low debt to gdp:

|| || |Turkey|148|

|| || |Czech Republic|144|

|| || |Slovenia|118|

|| || |Greece|117|

High PUBLIC debt to gdp indicates a free market willingness to lend to PRIVATE institutions and is a seal of those company's creditworthiness.

LOW public debt to GDP indicates that companies in those countries are particularly risky and are NOT creditworthy.

I'm an American but have been residing in the Philippines for a couple of years now. The median American has a considerable amount of debt compared to the median Filipino. Americans have mortgages, student loans, etc.

You know what the typical Filipino individual has for debt? Nothing. Literally zero debt. You know why? They have ZERO access to the credit markets. Bank are extremely reluctant to finance mortgages, because property titling is so fucked up in this country. Transferring title is extremely risky (fraudulent title claims, scams, lack of transparency) and can take years. No banks are willing to finance these deals.

Your analysis is exactly opposite of reality. Lenders are eager and willing to put capital in these "high debt to gdp countries" because of (1) stable currencies; (2) Low credit risk; (3) Better rates of return compared to their low debt to gpt counterparts.

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u/No_Assistant8994 18d ago

Literally every market crash stems from defaulted debt . I don’t think you understand we are sleep walking into the biggest market crash. Debt is a good thing in moderation but when every government policy is financed on debt. We come back to how do we sort this throw more money at it bail out more businesses the cycle repeats.

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u/mcnello 18d ago

There's a huge difference between government debt and market debt. The key is to find the linkage between the two.

For example, the 2008 GFC was a result of an implicit backstop of the government creatures, Fannie Mae & Freddy Mac. It had very little to do with a general "too much debt in the economy."

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u/Libertarian789 17d ago

Good point the crisis had to do with the government interfering with the normal free market creation of debt by guaranteeing mortgages. Take away the government interference and there would've been no crisis whatsoever.

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u/Libertarian789 17d ago

Best policy then is to get rid of the Democrats since they have always been opposed to adding a balance budget amendment to our constitution

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u/No_Assistant8994 16d ago

I personally don’t think it’s a left or right argument. Being from the uk the tories have always borrowed more than labour.

Would this balanced budget allow for deficit in times of emergency?

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u/Libertarian789 16d ago

Yes any balanced Budget amendments allow for emergency spending but they also have a mandate that the deficit from the emergency be remedied in a very quick and orderly fashion once the emergency has passed.

Everything is a left or right issue. Either you are for government or you are for freedom. The right in England has been pretty much neutered by the more successful left to the point where the right is copying the positions of the left in order to stay in power. When the conservatives accepted the NHS that was when the total capitulation came I think

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u/No_Assistant8994 16d ago

Enforcing rapid repayment often leads to austerity and tax hikes in practice, it does more bad than good.

The idea that the right was capitulated by accepting the NHS is nonsense. The NHS was cross-party, and since then, many right-wing policies have been implemented (some of which failed). Sometimes, pragmatic governance is better than ideological.

'Everything is a left or right issue', and there we have it—the cause of polarisation. To my understanding, the countries that score the highest on the human freedom index are centrist; the US believes it's more freer than it is.

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u/Libertarian789 16d ago

No idea what you mean when you say rapid payment.

The Conservative Prime Minister who famously declared that the Conservative Party would no longer oppose the National Health Service (NHS) was Edward Heath.

In the early 1970s, Heath, who served as Prime Minister from 1970 to 1974, was the first Conservative leader to explicitly support the NHS as a permanent feature of British society. While the Conservative Party had been divided on the issue in the past, Heath’s position marked a significant shift, as he publicly stated that the NHS was now seen as an integral part of the British welfare state, and the party would not seek to dismantle it.

This was a key moment in the post-war period, as it solidified the NHS’s status as a cherished institution in the UK, regardless of the political party in power.

Yes everything is left or right. There is no working together. They are opposites a policy can use support freedom or can support government but not both.

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u/No_Assistant8994 16d ago

Most ChatGPT I’ve ever seen

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u/Libertarian789 16d ago

Do you object to people using the Internet for information? Are you a Luddite?

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u/No_Assistant8994 16d ago

Yes a Luddite after I correctly pointed out it was written by ChatGPT. I literally use it everyday for university work. But If I wanted to have a conversation with ChatGPT I’d simply go onto their website.

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u/Libertarian789 16d ago

You lost the debate and so now you want to debate about ChatGPT?

Why don't you try to focus on a good definition of what is capitalism?

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u/No_Assistant8994 16d ago

You’ve called it a cherished institution in the UK therefore surely it would be undemocratic to remove it.

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u/Libertarian789 16d ago

Ideally it would be removed with Democratic consent so that Britain would have a healthcare system that was based on lowering price and raising quality.

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u/No_Assistant8994 16d ago

Because that has worked for Americans. You do realise we have private healthcare and it’s a lot cheaper than the US system

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u/Libertarian789 16d ago

It has not worked in the United States. The United States has a very socialistic system where in competition was made illegal. Do you understand now?

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