Surplus production a flaw of capitalism

Food for thought from this quote, posted by Blazer a couple of days ago.

“We must agree that we need to produce as of our requirement and not for corporate profit. Surplus production does not serve any purpose of human welfare other than creating surplus value for capitalists. We must reduce the eight-hour work-day according to our needs.”

Prem Mathrani is based in Dubai (UAE). He has written more than 50 articles in Sindhi on “Economic Dictatorship and Exploitation in Capitalist Business Organisations”.

There’s little doubt that variations of capitalist systems over the last couple of centuries have driven huge technological innovations and have lifted the standard of living and life expectancy of billions of people.

But the modern application of capitalism has a major flaw – to keep expanding business and making profits when many people have plenty of everything they need, corporations in particular have turned to pushing people through sophisticated marketing to buy and consume more and more of what they don’t need.

This creates two major problems. It puts increasing strains on limited resources, exacerbated by a growing world population and the shift by a bigger proportion of that population into higher standards of living and higher consumption.

And it has resulted in overconsumption that is unhealthy for individuals who succumb to the temptations and the marketing.

Two much food and two much drink are obvious examples. Heart disease and diabetes and other afflictions of the over-imbibing are a growing problem. Tools for a sedentary lifestyle is another example – it is perverse that so many people drive their cars to a gym to try to maintain their fitness. But far more people are encouraged to buy cars, to drive to malls to buy more things they don’t need.

An alarming modern marketing malaise is the advertising of products as healthy that are the opposite. Things like anti-bacterial soaps, wipes, sprays etc have legitimate uses, like in hospitals, but over cleaning homes is unhealthy as well as expensive.

Drug pushers are particularly insidious capitalists supplying a market that destroys lives. Worse, they often actively seek to hook victims in order to replace their imprisoned or dying clientèle. Pushing to many legal drugs to supposedly overcome illnesses are ethically suspect.

Surplus production – producing things we don’t need, straining finite resources, is a problem that is growing with the population.

This is something ‘the market’ won’t fix, because the market is the problem.

Capitalism has helped the human race make a lot of progress, but it has always had it’s flaws. And one of those flaws is in promoting an increasingly urgent problem – over consumption.

This is why some governments, including New Zealand’s, of looking to incorporating more of a social conscience into our capitalist system.

If marketed well modest consumption could become popular, but who would make money out of that?

125 Comments

  1. Socialism isn’t great either, another failure:

  2. David

     /  February 11, 2018

    Are we to have some UN style organisation that issues quotas for jeans or shoes and then decide if anti bacterial wipes are allowed to be made.

    [Deleted. You may or may not have seen a warning I made yesterday about too many personal attacks here. Stick to the issues please, and don’t continue the shitfighting. PG]

    We live in a world of ever expanding resources, 100s of millions lifted out of poverty and not dieing needlessly. There has never been a better time to be alive.

    • PartisanZ

       /  February 11, 2018

      @David – “There has never been a better time to be alive.”

      Tell that to the one billion children living in poverty around the world …

      “Oxfam estimates that it would take $60 billion annually to end extreme global poverty–that’s less than 1/4 the income of the top 100 richest billionaires.”

      So yeah … Why not some UN style organisation to reallocate just SOME of the wealth?

      Would those 100 richest billionaires be okay with 3/4 of their current income?

      https://www.dosomething.org/us/facts/11-facts-about-global-poverty

      • Trevors_elbow

         /  February 11, 2018

        David is right. You are wrong. Pretty simple. There is no better time to be alive than right now. Envy of the super rich doesn’t disprove that

        • Blazer

           /  February 11, 2018

          so when’s a good time to be…dead?

          • Trevors_Elbow

             /  February 11, 2018

            Make the argument that the world is dreadful right now Blazer compared to 150 years in terms of access to education, healthcare, housing, social security backstops or in terms of life expectancy and opportunity. Make the argument for once instead of the snide little niggles all the time.

            You won’t be able to – and the engine for improved access? The engine for improved measures like Life Expectancy? Yip that is right – market forces driving innovation for economic gain coupled with some appropriate and restricted redistribution.

            But the key driver has always been capitalism which ENABLES the economic pie to grow which ENABLES limited socialism in the form of targeted tax a& redistribution to function

            • Blazer

               /  February 11, 2018

              the world is as its always been…some thrive,some die,some have more than they ever need,some have far less than they need.The feudal system has new clothes.My interest and something you and others seem to deny is that when you drill down…Capital is created and allocated at the discretion of private individuals.Markets are manipulated,if they weren’t you would not have banks setting interest rates,manipulation of stocks and bonds,a forex gambling casino and endless military operations.Corky is the only one who seems to accept reality,and his response is simplicity itself…a so what..’I’ll take the fantasy…thanks’.

        • PartisanZ

           /  February 11, 2018

          There’s never been a better time to be alive for you and I trevors_elbow, but to extrapolate that even as far as “the millions lifted out of poverty” is drawing a long bow IMHO.

          How do we know their overall lifestyle – a health, satisfaction, connection paradigm – is better as urban sweatshop workers, transient indentured labour or globalised ‘Precariat’ than it was as rural subsistence villagers? [Or, for that matter, former well-paid unionised labour?]

          Meanwhile Westerners in their droves evacuate suburbia to find their ‘village’.

          Further, to project our own individual Western “no better time to be alive” onto the billions of people who are starving and annually dying from starvation and easily controlled disease in our ‘global village’ is quite simply to renounce thought and reason …

          • David

             /  February 11, 2018

            “How do we know their overall lifestyle – a health, satisfaction, connection paradigm – is better as urban sweatshop workers, transient indentured labour or globalised ‘Precariat’ than it was as rural subsistence villagers?”

            We know it’s better to be an urban sweatshop worker than a rural subsistence village. We know this because when people are presented with this choice, they overwhelmingly choose the sweatshops.

            Revealed preferences are telling.

            • PartisanZ

               /  February 11, 2018

              “Revealed preferences” my arse …

              Capitalism more-or-less ‘forced’ the agrarian peasantry into urban squalor in, for instance, the industrializing U.K., by a combination of industrializing agriculture and craft work, casualizing the labour force – a la ‘the hired man’ – and by the feudal-corporate-capitalist government enclosing the commons …

              The same sort of thing is happening now in the Third World …

            • David

               /  February 11, 2018

              “The same sort of thing is happening now in the Third World …”

              No it’s not. That’s why it’s still the third world.

          • David

             /  February 11, 2018

            “Further, to project our own individual Western “no better time to be alive” onto the billions of people who are starving and annually dying from starvation and easily controlled disease in our ‘global village’ is quite simply to renounce thought and reason …”

            Billions of people are not starving to death annually now are they? There are more people in the world than ever before, and they are better fed than ever before.

          • Trevors_Elbow

             /  February 11, 2018

            Oh please – enough of the “but what aboutism” and “isn’t it horrible”.

            The 3rd world is evolving economically just as the West did via industrialisation. Yes it isn’t perfect now and yes there is a way to go. But the improvements in life expectation, access to medicine etc is apparent.

            I know you have a deep centred, probably genuine, dislike of capitalism. But harnessing the drive of capitalism is the key factor in lifting people out of poverty.

            Many of the issues you point at are the results of dictatorship like governments in the 3rd world. No a lot can be done about them by external forces – the people of those countries need to find their own path to governments that support their needs and aspirations.

            And the hyperbole of Billions suffering/dying is just that hyperbole. Oxfam is no long an aid agency – its a left wing NGO promoting a political agenda…

            My well being is not affected by how rich someone else is unless I am denied the basics of life and opportunity to improve my position…. but to the Left with their warped “We are all equal” take on the world it is the only thing. We aren’t all equal. We are all different – therefore success for each of us will look different economically, socially, educationally.

            Denying our differences, as the Left constantly do, only creates what we see in many on the Lefts postings – bitterness, jealousy and calls at the extreme end for violence.

            • PartisanZ

               /  February 11, 2018

              “My well being is not affected by how rich someone else is unless I am denied the basics of life and opportunity to improve my position” … which is precisely what millions are denied at the global level …

              Okay, so in my haste I related two things – poverty and starvation death – in one sentence.

              “1 billion children worldwide are living in poverty. According to UNICEF, 22,000 children die each day due to poverty.”

              Hyperbole? That’s only 8,000,000 children …

              https://www.dosomething.org/us/facts/11-facts-about-global-poverty

              In the face of corporate-capitalism’s inequality and iniquity, “left wing NGOs promoting a political agenda” is exactly what the world needs …

              Nature strives for dynamic equilibrium.

      • David

         /  February 11, 2018

        “Tell that to the one billion children living in poverty around the world …”

        Comedy gold. More people have moved out of poverty in the last 20 years than in the entire previous history of the world. Almost all of this poverty is in countries that are run like Venezuela. Perhaps there is a clue there……

        Just take this fact;

        “Nearly 1/2 of the world’s population — more than 3 billion people — live on less than $2.50 a day. More than 1.3 billion live in extreme poverty — less than $1.25 a day.”

        In 1899, 99% of the world population lived in extreme poverty, less than $1/day. Progress has been staggering, and it’s still improving. All of that progress, all of it, is as a result of capitalism and freedom.

        Now is the best time to be alive in human history, and it’s getting better.

        • PartisanZ

           /  February 11, 2018

          Spurious arguments abound …

          “More people have moved out of poverty in the last 20 years than in the entire previous history of the world” is a very commonly used relativism.

          Firstly, there are a great many more people in the world …?

          But secondly, if “moved out of poverty” means living on more than $1.90 per day or even $2.50 per day, thought and reason have once again been renounced.

          How exactly are these income levels “out of poverty”?

          “In 1899, 99% of the world’s population lived in extreme poverty, less than $1/day”

          $US 1.00 in 1900 is worth $27.03 today. Coming from a history of much more self-provision they may not have looked upon it as poverty at all?

          I’m not saying things haven’t improved for many, but when our children’s children’s children are saying this same *SHIT* in 100 years time – which could have been corrected in a few decades or less – we’ll know what we’re really doing is justifying the maintenance of our own differential advantage …

          What that means is that for every advantage I gain over-and-above a certain ethical level, someone else looses and is disadvantaged … and some of them die of starvation … so I can eat KFC and drink Coke …

          I wonder … If all the world’s wealth were divided equally between all the world’s people, what would each our standard-of-living be? Up-market favela? Down-market suburbia?

          • David

             /  February 11, 2018

            “$US 1.00 in 1900 is worth $27.03 today. Coming from a history of much more self-provision they may not have looked upon it as poverty at all?”

            That is $1 in today’s money, it’s an inflation adjusted number.

            “I wonder … If all the world’s wealth were divided equally between all the world’s people, what would each our standard-of-living be? Up-market favela? Down-market suburbia?”

            Try it as seem how deep in blood you end up.

            • PartisanZ

               /  February 11, 2018

              $1 in 2016 = $0 in 1899

              Do you seriously expect me to believe that 99% of the world’s population still lived in money-less societies in 1899? Calling *BS* on that one …

              IMHO, it is better to critique extreme wealth than aspire to it … and ultimately it may be better – if not inevitable – to be uncomfortably deep in socially-progressive blood rather than deeply privileged by conservative capitalist blood-money …

              One thing you cannot do is claim that corporate-capitalism doesn’t own
              more than its share of assets and resources and, in acquiring them, hasn’t spilled more than its share of blood …

            • David

               /  February 11, 2018

              “$1 in 2016 = $0 in 1899”

              lol. You are funny.
              $1 in 2016 = 3.5 cents in 1899. You officially fail at maths.

              “Do you seriously expect me to believe that 99% of the world’s population still lived in money-less societies in 1899? Calling *BS* on that one …”

              Strawman much?

              “IMHO, it is better to critique extreme wealth than aspire to it … and ultimately it may be better – if not inevitable – to be uncomfortably deep in socially-progressive blood rather than deeply privileged by conservative capitalist blood-money …”

              Good to see your clear about this. You have plenty of company in the evil, totalitarian bloodsports. Just remember that it was the true believers than Mao, Polpot, and Stalin had up against the wall first.

      • Corky

         /  February 11, 2018

        ‘Tell that to the one billion children living in poverty around the world …”

        And why is that, Parti?

        • Kitty Catkin

           /  February 11, 2018

          There is nothing to stop anyone making donations to help those in poverty,

          • PartisanZ

             /  February 11, 2018

            Your Queen, Victoria, passed away on 22 Jan 1901 Miss Kitty …

            • Kitty Catkin

               /  February 11, 2018

              Why on earth do FOUR people think that making donations to stop people dying in horrible ways is a bad idea ? Are they so stingy that they won’t put their hands in their pockets to save a child’s life or enable a parent to feed their family ? Am I alone at YNZ in doing this ? Surely not. It’s not that bizarre, plenty of people do it. There are people dying of starvation, in wars that are not their doing and diseases that are preventable. Shame on the misers who object so strongly to the idea of saving lives by giving money to these people that they downticked the very suggestion that this is a good idea.

              Odd as it might seem to you, Parti, people are still giving money and time to people who are starving. UNICEF, World Vision, Medecins Sans Frontieres, Red Cross….charity didn’t end 117 years ago as you seem to imagine.

              And yes, I do make donations to these organisations myself and don’t just tell other people to do it.

  3. Alan Wilkinson

     /  February 11, 2018

    Socialism is when people queue for bread. Capitalism is when bread queues for people.

    Blazer prefers the former.

    • David

       /  February 11, 2018

      Bernie Sander’s is a fan of food lines too;

    • Blazer

       /  February 11, 2018

      Capitalism is when the bread is divided unevenly…the few gorge themselves,while the many are left with….crumbs.

      • Alan Wilkinson

         /  February 11, 2018

        No, that’s communism.

      • David

         /  February 11, 2018

        “Capitalism is when the bread is divided unevenly…the few gorge themselves,while the many are left with….crumbs.”

        Take a look around, those large wastelines tell you, everyone can gorge themselves.

        You cannot have equality without sacrificing freedom. Take your pick.

        • Blazer

           /  February 11, 2018

          I wasn’t being ..literal ..so what do we have here in NZ ..equality…or freedom?

          • David

             /  February 11, 2018

            Freedom, mostly.

            • Blazer

               /  February 11, 2018

              ‘mostly’…like almost…pregnant!

            • Kitty Catkin

               /  February 11, 2018

              Not at all, That’s a specious analogy. One is specific, freedom is relative, Pregnancy is a literal thing, freedom takes many forms.

  4. david in aus

     /  February 11, 2018

    People seem to conflate capitalism with socio-cultural aspects of a society. Capitalism is thousands and millions of people deciding individually what makes the best sense for them, not centrally planned with an ‘all-knowing’ body as in communism or absolute monarchy. It is good at allocating resources for the best profit.

    It accentuates a societies traits because it is generally profitable to do so.
    It doesn’t make a society fat, but allows them to become fat by providing the resources to overcome calorie deficits and then overconsume.
    American and New Zealanders are obese because of cultural factors, such as more-is-better mindset. Being fat (Polynesians) has been seen as being wealthy and the sanctions of being fat are limited. Japan and France, other capitalist states, are the slimmest in the Western world not because of sugar taxes or central dictates. They have severe social sanctions on being obese: difficulty finding jobs and intense judgments by society.
    South Korea is the plastic surgery capital of the world not because capitalism mandates it, but because aesthetic beauty has the most perceived value in that country.

    Capitalism is not the cause of the world’s maladies nor does it make moral judgments. It is a mistake to confuse capitalism with societal problems. It has been the most effective economic system and for all it’s flaws there is none better. Billions have had better quality-of-life and longer lives because of the benefits that can accrue from capitalism. The results of capitalism are generally a reflection of a society’s values.

  5. Blazer

     /  February 11, 2018

    the issue is where does this ‘Capital’ come from…and who allocates it?

    • Alan Wilkinson

       /  February 11, 2018

      It comes from saving and investment of money and time and effort and thought.

      But I know that is too obvious for you.

    • David

       /  February 11, 2018

      “and who allocates it?”

      The people who saved or invested it. Individuals in other words.

    • david in aus

       /  February 11, 2018

      Capital is generally savings. Spend less than you earn, you will develop capital. If you invest you allocate capital. When you decide to invest in a company or build our own business, you are allocating capital. What you spend on also determines, where people invest. Venezuela has problems because the government has mandated that private business can not allocate capital and only the government can.

      • Kitty Catkin

         /  February 11, 2018

        True. I was agreeably surprised to see my last bank statement, and I am on a tiny income.

        I do have some capital-no, Blazer, I am not going to say how much-but don’t touch that. The interest rate is risible, but it’s better than nothing.

        ‘Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. ‘ as Mr Micawber said.

        Yes, Blazer, he did say ought, not nought.

        • Kitty Catkin

           /  February 11, 2018

          PDTs with childish spite strike again. Does anyone have a spare wasp trap ?

  6. David

     /  February 11, 2018

    Hans Rosling showing what has really happened on poverty in the last 200 years, no one does it better;

    • PartisanZ

       /  February 11, 2018

      And … the antidote … ‘The Animated Visualizations and Data Distortions of Hans Rosling’

      http://www.andymyers101.com/post/101351392950/the-animated-visualizations-and-data-distortions

      Just over half way down the same data presented on a linear rather than logarithmic scale is very interesting …

      Also … ‘A Confused Statistician’ – https://mahb.stanford.edu/blog/a-confused-statistician/

      ” … although the sharp differences of thirty years ago are disappearing, almost half of humanity still live in conditions the average American, Australian, European, or Japanese would find unacceptable. Conservatively, somewhere around 2 billion people are seriously underfed or micro-nutrient malnourished.

      The third claim is that “People are much healthier.” Basically that may be true on average, but not in absolute numbers. In 1960, perhaps 1 billion of Earth’s 3 billion people were hungry, and several hundred million others were poorly nourished at best. That’s fewer than the 2 billion in bad health today because of dietary deficiencies, but the proportion of the population in poor health is not very different.”

      • David

         /  February 11, 2018

        Hans Rosling is a brilliant man who has contributed enormous amounts to world development, and is a serious statistician with many decades of experience in the third world until he died last year.

        The criticism you managed to dredge from the bottom of a google search is written by a film student. meh.

        On top of that, his main point is simply that Africa sucks. Well, just look at the economic and social policies followed by African countries and all you can see is a wall of corruption and Marxist ideology. Colour me surprised.

        • Blazer

           /  February 11, 2018

          the main influences in the African continent have been European capitalist countries….so now you can be,…surprised.

            • Blazer

               /  February 11, 2018

              interesting articles Al.Military domination by the west especially after the world wars and the industrialisation of the U.S are the primary causes of …Capitalist ascendancy.Themilitary /industrial complex Eisenhower warned of…has come to dominate strategic global resources.

            • Alan Wilkinson

               /  February 11, 2018

              That has nothing to do with most of Africa’s disaster states.

            • Blazer

               /  February 11, 2018

              of course it does.Colonial exploitation of Africas resources has a long history.Independence deprived them of capital as a…. punishment.Why do you think Gaddafi is…dead?

            • Alan Wilkinson

               /  February 11, 2018

              Probably not because of evil international bankers, B.

          • David

             /  February 11, 2018

            Africa has been there for a while. Europeans where there, what a couple of hundred years at most. The main influence on the African continent has been Africans.

            • Blazer

               /  February 11, 2018

              so the main influence on NZ has been the..Maori….logic=yes?

        • PartisanZ

           /  February 11, 2018

          @David – “On top of that, his main point is simply that Africa sucks.”

          Shit … Really? … I missed that …

          Watched it again … I think that might be your interpretation?

          I grant you, anyone who ‘visualizes’ [graphs] the infinite complexities of life through the quantum-simplistic axes of ‘life expectancy’ and ‘money income’ surely must be brilliant …

          • David

             /  February 11, 2018

            That is Andy Myers interpretation. Did you bother to even fucking read the links you posted?

            “I grant you, anyone who ‘visualizes’ [graphs] the infinite complexities of life through the quantum-simplistic axes of ‘life expectancy’ and ‘money income’ surely must be brilliant …”

            That is how you work with data. You take large amounts of data and present it ways that allows people to build a picture of what is underlying. Otherwise, you have no chance of understanding the infinite complexities of life.

            That is the whole point of statistics. The alternative is to be like you and just give up on understanding and just chant ‘down with the rich’.

  7. Gerrit

     /  February 11, 2018

    I find it strange that capitalists generates surplus production. Every company I have worked for planned production to meet projected sales figures.

    Not one planned for over production. You planned production to meet sales figures and dissected the product ranges to make sure you had the right products, in the right quantities in the right warehouse at the right time.

    Never made more then required.

    Even when sales figures tanked or sky rocketed, production was scaled accordingly.

    Be a poor management team that let raw materials, work in progress or finished goods blowout to eat up cash flow in a down turn.

    In an uplift in sales a good management team would have liaisoned with suppliers regarding required raw material stock, with factory staff regarding overtime and the banks (or shareholders) regarding funding for the increase in production. Management would make sure the factory capacity could handle the extra throughput.

    • Kitty Catkin

       /  February 11, 2018

      Yes. I imagine that a margin is allowed-they can’t say that 15,000 whatever be sold-but that doesn’t change this. No factory that made far more than can be sold or ordered far more raw materials would be in business long.

      • Kitty Catkin

         /  February 11, 2018

        exactly will be sold

        • Gerrit

           /  February 11, 2018

          That is why budgets are raised and set. Always started with the sales and marketing force where sales budgets and product development requirements are negotiated with volumes and product splits. Deep analyses on existing and potential (as in achievable sales) customer to get top line income figure.

          Set the profit required by shareholders as the bottom line.

          Set the operational budgets to make the top and bottom lines happen.

          And yes it is quite possible to get sales accuracy to within a few percentage points variation from budget if the management team has a good (knowledgeable) sales force and great sales report functions.

          If we look at Iphone sales for example, the graph looks like it has great highs and lows but I bet each one corresponds to a known new product introduction or sales drive.

          https://www.statista.com/statistics/263401/global-apple-iphone-sales-since-3rd-quarter-2007/

          No way would Apple build phones it did not think it could sell. Explore some of the other graphs linked to on the page. Sales and product analysis as they should be done by every business.

          • Kitty Catkin

             /  February 11, 2018

            True-but I don’t suppose that they can know to the last one and have to have some in reserve. My 15,000 figure was picked out of the air. I imagine that successful businesses make allowance for there being some surplus things that have to be sold at a discount. Better than having people go to the opposition because you haven’t made enough.

            A local business training whatsit here counts it as a success if someone decides at the end NOT to go into business. They are quite right. I can think of people who set up in business and failed because they didn’t do the research and homework first. The Business Training Enterprise teaches this, and it must save a lot of heartbreak. No good starting a business when there are enough similar ones or you won’t be able to survive financially until it starts making a profit and so on.

  8. Blazer

     /  February 11, 2018

    ‘projections’…so many variable factors…ask the board at….FBU.

    • david in aus

       /  February 11, 2018

      Capitalism is allowing companies to make profits and allow them to fail. FBU if they continue to make losses should fail. Subversion of capitalism has occurred in the GFC when governments keep alive zombie companies. Shareholders in financial companies in the GFC should have been wiped out. Constant bail-outs have resulted in Quantitative Easing which is a form of socialism, by socializing losses.
      QE is the antithesis of capitalism but was forced by mismanagement of governments.

      • Blazer

         /  February 11, 2018

        so Capitalism failed and you blame Socialism!Privatising the profits and socialising the..losses is how Capitalism works today.Heads we win,tails you…lose.

        • David

           /  February 11, 2018

          Failure of a company is not the failure of capitalism, it’s the success. The whole point of companies, the reason the whole concept was created, was so they can fail.

          • PartisanZ

             /  February 11, 2018

            Is the converse also true? Success of a company is not the success of capitalism, it’s the failure. The whole point of companies, the reason the whole concept was created, was so they can succeed …?

            Or peerhaps; Failure of an organ is not the failure of organism, it’s the success. The whole point of organs, the reason the whole concept [of organism] was created, was so they can fail …?

            • david in aus

               /  February 11, 2018

              Yes, failure is a part of capitalism. Failure is a part of life. I have failed to get gold in the summer and winter Olympics as well little nippers races.
              There are winners and losers in life. Unfortunately, what they told you in kindergarten wasn’t correct, we all can’t be winners.
              Capitalism allocates money to those who perform or thinks it will perform.
              Success and failure are a part of capitalism.
              If you let failure to continue, you get Venezuela. The definition of crazy is doing the same thing over and over again and expecting a different result. Capitalism, if it is let to continue, should extinguish failed models and let successful enterprises to thrive.
              If you are not as good another company, you should try to do something different or differently. If you suck as real estate developer, no one should give you more money.
              Society doesn’t owe you a living.

            • Blazer

               /  February 11, 2018

              ‘Capitalism allocates money to those who perform or thinks it will perform.’…how does it choose?…and once again where does it get this Capital…from.
              ‘Capitalism, if it is let to continue, should extinguish failed models and let successful enterprises to thrive…..how long does the trial last….to see if it…works?

            • PartisanZ

               /  February 11, 2018

              The cornerstone or ‘keystone’ of capitalism is incredibly simple. It’s simply this: My success is dependent upon your failure …

              It’s pre-kindergarten … it’s infantile thwarting-age stuff …

              Kindergarten is actually the beginning of its possible healing and growth towards something better … more socially useful … except that kindergarten is mostly run by those thoroughly infused with the ‘keystone’ doctrine … which also pervades the school that kindergarten must prepare the unfortunate child for …

              “The definition of crazy is doing the same thing over and over again and expecting a different result” … Like boom and bust?

              Currently, yes, there are winners and losers in life and often the winners don’t recognize what they’ve lost …

              Correction: “Capitalism, if it is let to continue, should extinguish failed models – like itself – and let successful derivatives and alternatives thrive.”

              The proof of all I say is contained in your comment above.

            • david in aus

               /  February 11, 2018

              “how does it choose?…and once again where does it get this Capital…from.”
              Case study:
              I got my initial capital to invest from savings from working as an employee after I left varsity. Those savings, I have invested to beget more capital. Some receive capital from inheritance, not me though, luckily my parents are healthy.

              I chose to invest in companies(shares), my own services business, and I am building houses now to rent out in Auckland with some of my capital. I bought quarter acre houses in Auckland in 2010, anticipating good returns and subdivisions in the future. Many others in 2010 were selling houses at a loss but my judgment was different from others. Some are buying shares now anticipating futures but others like me have reduced exposure.
              Many other individuals are making their own decisions, some will be profitable others not.
              My investments may or may not work out, I hope they do.
              That is how capitalism works.

            • david in aus

               /  February 11, 2018

              @Partisanz. Capitalism will be replaced when there is a different model which is more successful in producing beneficial societal outcomes.
              I am no ideologue, a pragmatist at heart. Capitalism is a model that has worked the best thus far, despite its booms and busts cycles. If there something else that works better, bring it on.
              One thing that is clear, is that communism has failed.

            • David

               /  February 11, 2018

              “Is the converse also true? Success of a company is not the success of capitalism, it’s the failure. The whole point of companies, the reason the whole concept was created, was so they can succeed …?”

              Nope, it is the success too. The whole advantage of capitalism is that when things fail, the resources and labour quickly get recycled into more successful undertakings. That is why capitalist countries are more dynamic.

            • David

               /  February 11, 2018

              “The cornerstone or ‘keystone’ of capitalism is incredibly simple. It’s simply this: My success is dependent upon your failure …”

              That is complete nonsense. Your zero sum game is observably laughable, just look at the world around you. Jeff Bezos is not rich because people in Africa are poor.

              This is all just bullshit for you to justify your own hatred of ‘the rich’.

            • Blazer

               /  February 11, 2018

              ‘One thing that is clear, is that communism has failed.’…Communist China seemsto be going…O.K.

            • PartisanZ

               /  February 11, 2018

              “Jeff Bezos is not rich because people in Africa are poor.”

              Yes he is. “Africa is not poor, we are stealing its wealth” – Nick Dearden

              Bezos, as a United States citizen, is a direct beneficiary of that stolen wealth … not to mention slavery … and the genocide of indigenous Americans …

              http://www.aljazeera.com/indepth/opinion/2017/05/africa-poor-stealing-wealth-170524063731884.html

            • david in aus

               /  February 11, 2018

              @Blazer. “Communist China seemsto be going…O.K”. Maybe the last 30 years have passed you buy. Deng Xiao Ping changed China from Communism to a version of capitalism. It was Deng who said ‘ i does not matter if a cat is black or white as long as it catches mice’. Deng was influenced by a model in Singapore. China now as a system where the private sector (companies) allocates most of the capital. There is such a thing as private property that does not occur in Communist countries. The Chinese government has kept the communist political systems to maintain power though.

          • Blazer

             /  February 11, 2018

            so you proclaim to be a ‘success’…did you achieve this,in spite of…Capitalism?

            • david in aus

               /  February 11, 2018

              Personal success is not about money, Blazer. Success is a value judgment. For me, someone with a purposeful life and is cherished by their family and society is a successful person.
              For a company to be successful, it has to be profitable. That is the purpose of a company. If it is not the purpose, it is a charity or a lifestyle choice. Failed companies are those that are bankrupt.
              Let us not confuse labeling people as successful or failures with commercial enterprises. That is reductionism at its worst.

            • Blazer

               /  February 11, 2018

              @david in aus…that was at David who yesterday proclaimed himself a success’…and judged me a ‘failure’.Capitalism promises to define you by wealth…thats a fact of life.Your property investments are an opportunist taking advantage of a tilted playing field…it would not be right to criticise you for doing so…but it is a triumph of Augustine ‘s ‘Libido Dominandi over the Categorical..Imperative.

            • Blazer

               /  February 11, 2018

              China ..capital..btw you now concede Capital is created and allocated…not saved..very good.
              https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2636097

            • david in aus

               /  February 11, 2018

              China created capital but not from savings? Well if it was so easy, I wonder why every country in the world doesn’t just create capital out of thin air. That’s right some have like Zimbabwe, Venezuela, and the Weimar Republic. Go to Venezuela now and become a billionaire in Bolivars but you are lucky if you can buy an apple with your billions.
              Chinese allocated their capital from savings. Have you noticed that many of our goods come from China these days? As compared to Maoist times, where there were minuscule Chinese exports.

            • david in aus

               /  February 11, 2018

              Chinese have one of the highest saving rates in the world.
              https://www.cnbc.com/2015/10/25/china-savings-rate-versus-the-world-in-a-chart.html

            • Blazer

               /  February 11, 2018

              wonder no longer…the $U.S is the default currency for international trade/petro dollar.The military might of the U.S maintains it.China is owed trillions in $’s and does not float the yuan.The so called ’empires of evil’,are those few countries who do not have private cental banks.Gadaffi wanted a pan African bank and to use other currencies for oil payments…that led to his demise.Allende is another that rocked the Capitalist boat=dead.Here is some perspective on Capitalism…you won’t like it,because you have embraced what you think it…means.

          • Blazer

             /  February 11, 2018

            can you have rich people without a whole…lotta..poor people?

            • Kitty Catkin

               /  February 11, 2018

              Yes. The employees are paid a wage-employees are workers, Blazer.

              There is another YNZer who had the good luck to SEE an opportunity to invest in property and the good sense to TAKE the opportunity and reap the rewards.

            • PartisanZ

               /  February 11, 2018

              @Blazer – “can you have rich people without a whole…lotta..poor people?”

              No. We cannot under corporate-capitalism … It only works that way …

  9. Gerrit

     /  February 11, 2018

    Fletcher building suffers from having fixed contracts over a very long build time. 7 years for both the Auckland Convention Centre and the Christchurch Legal Precint.

    Inital costing was too low (management fault) to get the contracts. Increases in building costs (materials and labour) escalated the build costs above the fixed contract price (management fault).

    Fletche’rs is not alone in this regard. The British firm Carillion also went bankrupt due to over commitment and too low fixed pricing contracts.

    It serves as a warning to all government to be wary of companies that have fingers in many pies. Why a construction company was delivering school lunches is beyond me. How can you have an effective management of a company that is so diversified?

    “More broadly, the company’s failure encapsulates a long-brewing debate in Britain over whether outsourcing public services to private enterprises is as effective as it has often been touted, and whether some contractors, like certain banks, have become too big to fail. After all, the government has had to step back in to keep public services that had been managed by Carillion running.”

    Management also diversified the Fletcher way to much, eating up capital without adequate returns.

    Yes extremely bad management, however not sure what the capitalist generating surplus product has to do with Fletcher’s quandary.

    • Gerrit

       /  February 11, 2018

      Also worth a read in regards the state allocating to many contracts into to few baskets.

      https://www.theguardian.com/commentisfree/2018/jan/15/carillion-failure-contracts-government-whitehall

      • Blazer

         /  February 11, 2018

        presumably they have..a tendering process and due diligence.

        • Gerrit

           /  February 11, 2018

          Been involved in a few government tender processes and I would not go as far to say corruption exists but same state or council managers are on easy street for they just reissue contracts without doing any process. Easy but lazy work by state or council managers on all levels.

          Many people wont tender for government contracts as it involves a lot of cost and time without even a 10% chance of gaining the contract.

    • Blazer

       /  February 11, 2018

      its a reflection on the over rating of managers and their ..projections..which are invariably wrong..That would be bearable if they weren’t paid so much…to be..wrong.

      • Gerrit

         /  February 11, 2018

        Many wont be paid anything at all soon. Expect either bankruptcy or a massive selloff of individual business units. Sharks will be circling and they wont be looking at employing the senior or middle managers.

  10. unitedtribes2

     /  February 11, 2018

    Thanks Blazer for that article. You don’t have a great deal of backers here but a good article all the same. I are a capitalist because its provide itself but I think the points in your article have merit also. I am content living on my land growing my own food and just enjoying the natural world. When I come in though I also enjoy that Movenpick Ice-cream

    • Blazer

       /  February 11, 2018

      fair enough..is it made in NZ!I see Tip Top owned by Fonterra import ice cream from…Spain…now.

      • unitedtribes2

         /  February 11, 2018

        Isreal

        • unitedtribes2

           /  February 11, 2018

          or maybe Israel

          • Blazer

             /  February 11, 2018

            try..Switzerland.

            • Kitty Catkin

               /  February 11, 2018

              Try Spain and I am becoming very tired of that weak pun that everyone who reports this feels obliged to use.

              It’s only two lines and I suspect that they won’t be around for long as they are not much liked.

            • Kitty Catkin

               /  February 11, 2018

              To the two PDTs-grow up.

  11. Alan Wilkinson

     /  February 11, 2018

    The whole premise of the article is bunk because it is based on an unjustified distinction between want and need. We don’t need to explore the universe or invest in science or technology but doing so unquestionably advances the human race. The distinction is crap and employed for ideological purposes only.

  12. If you think this is an actual problem, you missed the whole point of capitalism, and you miss the means through which it operates to elevate the quality of living for everybody, all around. Value creation is how we keep improving, value creation, or as you call it, a surplus of production, is the whole fucking point of capitalism. Not a flaw.

    • Also don’t take the cussing to be a sign of aggression, I happen to be using tap to talk on my phone at the moment, and I also just happened to cuss when I talk. Just FYI, I know tone doesn’t come across too well and text, so I figured I’d clarify before hand.

    • PartisanZ

       /  February 12, 2018

      Plenty of people world-wide “missed the whole point of capitalism” …. several billion of them [us] still living in poverty at last count …

      • Guess you should have. Capitalism, and get to be a little bit more like America then. It would amount to less poverty, it already has and our nation, and it had a worldwide effect. You’re welcome. If you want more of that effect, maybe Embrace capitalism yourself.

        • PartisanZ

           /  February 12, 2018

          Embrace capitalism and be more like America …?

          That’s precisely what we did during the Great Depression brought on by the failure of laissez faire capitalism. Moreover, we went streaking ahead of their ‘New Deal’ and created world-leading Social Security to compensate for rampant capitalism’s blatant deficiencies …

          The Social Security ethos, in one guise or another, built most of the houses throughout the late-30s to late-70s … with screes of ‘socialist’ innovation … and made us world leaders in almost every economic and social metric …

          It wasn’t ‘totalitarian socialism’ like Soviet or Chinese communism … it was democratic socialism … another name for the decent society … but you are definitely thanking the wrong -ism!

          • I disagree. I think we’ve done so well overall, and throughout history, in spite of that kind of nonsense latching onto and bleeding the benefits of capitalism. The only reason any of those policies had the capital to work, is because of the overall wealth (and ability to generate new value) capitalist policies tend to yield. When socialists take the fact that things are running well for granted, they take the propsperity for granted, and they go around building up good will with all these policies they eventually run out of money, they eventually have to know how to run things themselves and they don’t know how, so industries, political groupings, etc. begin to break down and deteriorate. Much like what you watched happen on the left in 2016 in terms of identity politics, and much like what you see in cities and states dominated by Democrat/Socialist legislatures. California is now the proud title holder of the highest poverty rate in the country, if I’m not mistake. And they say our economies “great” because it’s big. Let me tell you as someone who lives here, “more” doesn’t equal “more” when the bigger numbers come from inflation, from forcibly imposed new forms of taxation (sugar taxes, the new CA gas tax, vehicle registration, a proposed “mileage tax” in addition, etc.), and other bad left leaning policies mean that are “big” economy is shit, particularly when you factor in that we’ve got a deficit to match the size, and so while it may be a big state economy, it is NOT a healthy one.

            And as for capitalism’s deficiencies, there’s not a single economic system that has ever worked better for society, lifted more people globally out of poverty, or advanced our technology at the pace this system has. And yes, it’s even survived being saddled, sometimes for decades at a time, with expensive socialist programs. None of the alternatives addresses its supposed “deficiencies” any better than capitalism itself, and ALL of them come with a far higher price in terms of misery, loss of life, scarcity of resources, lack of individual freedoms, authoratarianism, etc. It comes, essentially, at the price of liberty, individual rights, free expression, all manner of other things that are of infinite, inestimable value to me.

            • PartisanZ

               /  February 13, 2018

              Interesting commentary on the United States experience Jack Sutter, thanks. It has limited … I’d say very limited relevance to the New Zealand experience (soon to be Aotearoa New Zealand)

              The label ‘socialism’ incorrectly attached – by the Right – to NZ’s Labour governed years, especially 1935 – 49, is nothing like the socialism you refer to.

              It was always, and increasingly became through the 50’s, 60’s and early 70s, a healthy mix of ‘socialised democracy’ and free enterprise: Capitalism and derivative capitalism underpinned by and underpinning Social Security … I know this from personal experience of a successful family private-enterprise business during the 50s & 60s …

              We were never in danger of becoming Russian, East European or Chinese socialist/communist, despite Power & Wealth’s constant fears and accusations of such … Indeed, of the few terrorist acts in NZ’s history, almost all have been perpetrated by the Capitalist Right against The Decent Society … the 1939 arson of our new Social Security Building in Wellington … the ‘Trades Hall’ bombing of 27 March 1984 which killed Ernie Abbott …

              The old Right Brigade, constantly used “compared to Lenin, Stalin, Mao, Pol Pot” argument is actually so irrelevant as to be utterly pathetic …

    • Blazer

       /  February 12, 2018

      Regurgitating propaganda is all you are doing. ..where’s the evidence of this benevolent form of. .Capitalism?

      • Scarcity is the problem capitalism solved, scarcity is what’s addressed by a surplus of production, and scarcity is the real problem, not the Surplus. Has nothing to do with propaganda, has everything to do with my own reasoning on the subject, if you have any specific flaws in my logic to point out, or evidence to point to showcasing exactly how a surplus of production is ultimately a bad thing, then I’m ears. But I kind of doubt it.

        • Blazer

           /  February 12, 2018

          there is a scarcity of housing in NZ .Running a so called ‘OPEN’ ECONOMY we can lay the blame on Capitalism for causing the..problem..over to you.

          • Alan Wilkinson

             /  February 12, 2018

            You know that is drivel, B, but you keep repeating it.

          • Housing is a created resource, improved over the years exponentially, along with everything else in terms of Technology, due to Innovations via capitalism.

            • Blazer

               /  February 12, 2018

              no you explicitly said- ‘Scarcity is the problem capitalism solved,’…..you were brought up with Capitalism ,but it is crystal clear…you do not..understand it.

            • lol okay, sure; do you go by a different standard for yourself then? Because I’ve actually explained a little bit of my reasoning, and you haven’t said much of anything except, basically, “you’re wrong”. So I wonder, of the two of our comments so far, which ones really display more of an understanding of the subject at hand to an impartial observer? I wonder. In any case, if you won’t even acknowledge that I understand the subject under discussion (along with the assertion that you do, though you haven’t backed that assertion up with anything), then I’m not sure how a discussion is supposed to move forward. If – every time someone expresses an opposing view to yours – your reaction is to assume “oh, they just don’t understand as well as *I* do”, then you might want to consider *you* either don’t understand it well enough to communicate it persuasively, or don’t understand it as well as you thought you did. I think I’m done here btw, I’ll mozy off, but that’s some food for that I’ll leave you with on my way out 😉 .

            • Blazer

               /  February 12, 2018

              you should play Rugby…huge sidestep you have there.You made the statement…’‘Scarcity is the problem capitalism solved,’…and when asked to elaborate on an example at odds with it…you resort to a completely facile defence.Try looking at the video about Capitalism further up the thread and you just may…learn…something.

            • you didn’t ask me to elaborate so much as you said I didn’t understand what I was talking about, but hey, don’t let me stop you with the condescension. You’re clearly changing a lot of minds with that tactic 😉 .

            • Blazer

               /  February 13, 2018

              you are gauging the degree of my challenge for you to respond now.Given you said…’ then I’m ears. But I kind of doubt it.’.the only conclusion is …you’re stumped!.Don’t feel bad though,many give Capitalism credit for things that it has absolutely no bearing..on.

            • Well if it’s easier on you to pretend like you did better in this back-and-forth than you actually did, more power to you lol