Capitalism is the best economic system
All stages have been completed. The voting points distribution and the result are presented below.
Spelling and grammar points
With 4 votes and 28 points ahead, the winner is ...
- Publication date
- Last update date
- Time for argument
- Three days
- Voting system
- Open voting
- Voting period
- One week
- Point system
- Four points
- Rating mode
- Characters per argument
~ 0 / 5,000
In the rules of the debate, the instigator asks that I offer a different economic system to compete with capitalism. I can do that. With that said, what is capitalism?
The Balance defines capitalism as the concept by which individuals own the means of production. This includes labor, natural resources, capital goods, and entrepreneurship (1).
As opposed to a completely capitalistic economy, I suggest that a mixed economy which takes different aspects of socialism and capitalism. This hypothetical economic system would be able to regulate the use of natural resources. Because the government would regulate the use of natural resources under my CP, it runs counter to the definition that I provided.
Obviously, we are going to weigh the pros and cons of each economic system and conclude which economic system serves the people the best.
Entrepreneurship, or the process of planning and creating a business, is a net benefit for the economy. However, there comes a time in which government needs to interfere to prevent market failure. Monopolies are one of these “market failures” that hinders job growth and increases inequity among businesses and people.
Post-tax profits of companies have increased dramatically over the past decade, reaching roughly the equivalent of 7% of our GDP in 2014 according to the Economist (2). Since 2008, there has been $10 trillion dollars’ worth of mergers, which is one of the main factors driving up corporate profits (2). Yet, the Pew Research Center found that after adjusting for inflation, the average hourly wage made in 2018 had the same purchasing power as it did in 1978 (3). The Economic Policy Institute verifies this, finding that from 1973 to 2013, productivity rose by over 70%, while hourly compensation of workers rose a measly 9% (4). Businesses regularly eschew workers in favor of profit.
Make no mistake, business acquisitions that result in fatter profit margins without a subsequent increase in product or work quality can be comfortably labeled as monopolistic behavior.
Monopolistic behavior means that businesses can raise prices, profits etc. without any fear of any repercussions due to lack of competition. Barry Lynn and Phillip Longman of the Washington Monthly in the spring issue of 2010 explains how companies use the “innovation through acquisition” method which was popularized by Cisco in the 90s when it gobbled up over 100 innovative, small companies. Google used this method to acquire game-changing technologies that lead to Google Earth, Google Docs, and Google Analytics. This trend pervades drug companies especially, as when Pfizer took over Wyeth and Merck bought out Schering-Plough. The deals resulted in over 30,000 jobs being killed off (6). When a few companies have major clout, they can then fix prices to whatever they want. Under US law it is illegal. However, to revert to a complete capitalistic economy with no regulation would hike prices. Cardozo Law Review in their 2012 review of 75 cases of price-fixing among cartels, (not drug cartels, just a plethora of key players in industry that raised prices together a la an oligopoly,) they found that:
“For the economic studies’ post-2000 sample, the national and international cartel median overcharges averaged 20% and 25.8% (5).”
I don’t need to shovel stats done the voters’ throat to demonstrate this though. ISPs in the US provide a real-world example of behavior that the government should be able to curtail. The LA Times reports in July of 2018 that the recent merger between AT&T and Time Warner caused the cheapest streaming service provided by AT&T to jump by $5, a 14% increase, as well as an increase in its administrative fee from $0.78 to $1.99 monthly to bring in $800 million in extra revenue. As part of the “better service” aspect of the merger, the company put forth a $15 a month plan that offered less channels than the one that had its price increase by $5, which was previously the cheapest streaming service that AT&T offered (7).
In a capitalist economy, there would be no mechanism to fight the reckless accumulation of profit to inflate companies’ bottom line through business mergers. Because capitalism asks for private control of the factors of production, (including entrepreneurship,) any government influence would run counter to the definition I provided. Without the threat of legal action taken by the government, companies will not be deterred from engaging in this type of behavior. Vote Con for a mixed economy in which the government can prevent companies from throwing their weight around and hurting both consumers and workers alike through higher prices, lower quality products, and stagnant wages.
C2: Climate Change
If people own natural resources without any government interference, it would mean that climate change concerns would be exacerbated. Princeton professor Albert G. Milbank, Ph.D. student at the Princeton Environmental Institute DJ Rasmussen, and Robert Krop of Rutgers University published a report to the journal “Science” concluding that while the US will lose about .7% of the GDP for every one-degree Fahrenheit increase in global temperatures. Additionally, southern states like Arizona and Texas can lose upwards of 10-20% of their GDP if climate change goes unabated (8). To mitigate the effect of climate change on US citizens, we need to embrace regulations that would make a deep cut in C02 emissions. Unfortunately, capitalism forbids this. Despite supposed cooperation from businesses in meeting climate benchmarks, there is a dedicated lobby to fighting climate change legislation in Congress. Because private business owners are entitled to the means of production, they are not obligated to cede control of their coal. They can use all the coal they want without worrying about governmental influence. On the other hand, well-enforced climate policy would be able to decrease C02 emissions and prevent millions from dying. If the Clean Power Plan was not repealed by the current administration, the EIA suggests that by 2030 we could have seen C02 emissions fall 29-36% compared to 2005 levels, or by over 1,500 million metric tons of C02 emissions (9).
The EPA still plays a major role in setting guidelines for firms to follow without lofty, ambitious plans. The EPA is also tasked with enforcing the guidelines as well, deterring would-be polluters and punishing those who don’t comply to climate policies. Despite lackluster progress in enforcing climate policy under the current EPA headed by Andrew Wheeler, (and previously by Scott Pruitt under the same administration,) there has still been major successes in fighting climate criminals. For instance, when Volkswagen relied on faulty software to cheat the emissions standard test, they were fined nearly $3 billion (10). Not only does this send a clear message to other automobile producers that such behavior will not be tolerated, but it also prevents Volkswagen from continuing to use the faulty software to cheat emission standards again. Under capitalism, this could not exist because it runs contrary to the definition of capitalism.
My economic system allows the government to regulate the use of natural resources, which is a better solution than allowing private industries use it with reckless abandon. Vote Con because my system would allow nations to maintain better climate conditions on Earth.
Extend. Since I'm here and have nothing to do but wait for a response, here is a cool video.
Since I have more free space, I might as well do something with it.
It is a comedy special called "Randy writes a novel." It is slightly pretentious at certain bits, but is definitely worth your time. Special mention goes to the last part of the video which made me guffaw like a howler monkey in a room full of laughing gas.
I don't know what else to put here. Hopefully my opponent and I will debate this later.
Oh, and extend my points across the flow.
Oh, and extend my points across the flow.