A Question about Capitalism

[edgray]

I'm trying to figure out if capitalism requires growth to survive right now, and searching around the internet I'm finding many contradicting opinions on this.

From experience I would say yes, capitalism requires growth to function properly as when a country's growth slows its generally considered a sign of recession. Low growth rates normally go hand in hand with a recession, high unemployment, low spending and a stagnating economy.

But is it possible for a 0% growth capitalist society to function without rising unemployment and all of the horrors that recession brings with it?

This is a genuine question, not after an argument, but some well thought out opinions on the matter. Thanks!

 

[BornReady]

I think that's a myth started by Marx.

If your population is growing then your economy must grow too or unemployment will increase. This is true regardless of your economic system.

 

[edgray]

I think that's a myth started by Marx.

If your population is growing then your economy must grow too or unemployment will increase. This is true regardless of your economic system.

I've read some arguments with that point, but with no examples of a successful capitalist society working with zero growth, and also it's worth pointing out that economic growth normally outstrips population growth in a successful society. Also it doesn't explain recession. Why does everything go so wrong when growth halts?

 

[pjbleek]

answer,....unknown quantity at this time

 

[edgray]

I found this from the University of Cambridge website:

Capitalism's growth imperative
Myron J. Gordon and Jeffrey S. Rosenthal

Professor of Finance, Rotman School of Management, and Professor of Statistics, respectively, both at University of Toronto.

Address for correspondence: Professor M. J. Gordon, Faculty of Management, University of Toronto, 105 St George Street, Toronto, Ontario M5S 3E6, Canada; email: gordon@rotman.utoronto.ca, and jeff@math.toronto.edu.

Abstract

A capitalist firm operating in a competitive market is subject to a growth imperative, because uncertainty about the profit rate under a no-growth policy makes the firm's prospects highly unattractive in finite time and bankruptcy practically certain in the long run. A no-growth policy determines consumption and investment so that they and capital would remain constant over time if the latter's expected return were realised with certainty. Simulation is used to arrive at the probability of bankruptcy by the end of t periods and the expected values of capital and money, for relevant combinations of time and uncertainty under successively more realistic models of a no-growth firm in a competitive market. The sensitivity of the results to variation in the parameters in each of the models is evaluated. Finally, we establish that a plausible growth policy may achieve growth, but the problem of bankruptcy is not resolved.

 

[BornReady]

I've read some arguments with that point, but with no examples of a successful capitalist society working with zero growth

Do you have an example of any successful society working with zero growth?

 

[darkangel]

Do you have an example of any successful society working with zero growth?

And the answer is....

answer,....unknown quantity at this time

 

[edgray]

Do you have an example of any successful society working with zero growth?

nope.

 

[Accountable]

So mandatory growth and problems without growth may not be unique to capitalism?

 

[edgray]

So mandatory growth and problems without growth may not be unique to capitalism?

growth is a potential problem with all systems I would say, in fact, any human endeavours. What I'm trying to figure out is if capitalism requires growth to function properly or not. Painful experience with recession shows that there is the very real possibility of problems when growth shrinks, But is growth required, or can you envisage a functioning capitalist society with zero growth and none of the negative effects of recession?

 

[Accountable]

growth is a potential problem with all systems I would say, in fact, any human endeavours. What I'm trying to figure out is if capitalism requires growth to function properly or not. Painful experience with recession shows that there is the very real possibility of problems when growth shrinks, But is growth required, or can you envisage a functioning capitalist society with zero growth and none of the negative effects of recession?

My point is that you might have better results in your research if you look at societal systems, regardless of economic engine. We may be asking why butcher's tend to drown when held under water and can't find any studies on butcher respiration. Know what I mean?

So if you ask if society requires economic growth to function properly or not, you might be more successful. Wasn't the USSR problem an economic collapse? I truly don't remember.

 

[edgray]

My point is that you might have better results in your research if you look at societal systems, regardless of economic engine. We may be asking why butcher's tend to drown when held under water and can't find any studies on butcher respiration. Know what I mean?

So if you ask if society requires economic growth to function properly or not, you might be more successful. Wasn't the USSR problem an economic collapse? I truly don't remember.

But economic systems are tied to societal systems - the economic system of a given country has a profound effect on the society at every level.

The USSR is good example of complete economic collapse, that was most definitely their problem.

I was specifically asking about capitalism, as it's the dominant economic force in the world.

 

[edgray]

The same question from a different perspective:

can a society survive without the drive of consumerism?

 

[darkangel]

We live in a 'have now' and 'pay later' society. There is nothing wrong with consumerism per se. Indeed, without consumers there would obviously be no demand for producers. It is the constant 'pull and tug' between the producer and consumer, that drives business forward, and this constant pull and tug, also drives the technological upward curve, that leads to next generation products. Of course, competition between producers, drives this upward curve too.

 

[edgray]

We live in a 'have now' and 'pay later' society. There is nothing wrong with consumerism per se. Indeed, without consumers there would obviously be no demand for producers. It is the constant 'pull and tug' between the producer and consumer, that drives business forward, and this constant pull and tug, also drives the technological upward curve, that leads to next generation products. Of course, competition between producers, drives this upward curve too.

but what happens when we run out of things to consume? the resources on this planet are finite...

 

[pjbleek]

The same question from a different perspective:

can a society survive without the drive of consumerism?

nope. be like if you took bread off the shelves at the store, it would be insane

 

[darkangel]

but what happens when we run out of things to consume? the resources on this planet are finite...

Then we all die and the cockroaches inherit the world...

 

[edgray]

nope. be like if you took bread off the shelves at the store, it would be insane

do you mean that people wouldn't know what to do with themselves if they didn't have the option of just going out and buying stuff?

Then we all die and the cockroaches inherit the world...

do you think that's something we should be aiming for?

 

[pjbleek]

Then we all die and the cockroaches inherit the world...

that or we blow the shit out of each-other thousand times over

 

[darkangel]

do you think that's something we should be aiming for?

Of course not but at the rate we're going it's bound to happen. We will use up all of our resources and have nothing to back up money with. There's so many things that you have to factor into the equation. How far are we (all nations as a whole) willing to go to survive?