Should capitalism be regulated?

[MattS]

Should capitalism (free market) be regulated, or can it exist on its own through self regulation?

[SanctitasDeo]

Of course it should! Self-regulation works no better in the private sector than it does in the public. If men were angels! Madison wrote.

But they aren't. We need rules. History should tell us that. I mean, look at the Railroad Kingdoms, or the recent Financial Sector wizards producing money out of triply folded mortgages. The rules didn't even work that well on the last one. When the wizards are the regulators, the system breaks down.

Of course, that doesn't mean that government should control the market, either. Government is men, and those men aren't angels any more than the business kind.

[jerome1232]

History teaches us that it should be regulated, the degree of regulation however, is the fun part to figure out.

[Just_A_Guy]

My inclination is that think there is only one reason why economic regulation (i.e., with criminal consequences) is desirable in capitalism; and that to guarantee the free flow of information so that actors can make rational choices. Everything else, IMHO, should be dealt with through a competent and accessible civil court system. Let the capitalists keep each other honest through the threat of litigation.

[kapikui]

My inclination is that think there is only one reason why economic regulation (i.e., with criminal consequences) is desirable in capitalism; and that to guarantee the free flow of information so that actors can make rational choices. Everything else, IMHO, should be dealt with through a competent and accessible civil court system. Let the capitalists keep each other honest through the threat of litigation.

I tend to agree. The problem with regulating capitalism is that people are in their natural state. That is to say they are the "enemy of god" we are, in general, evil. When allowed to act without oversight capitalists will do vile things to get more money or power. The problem comes in with the fact that the most vile, power hungry people will go to whatever gives them the most of what they want. If you regulate capitalism because "people are evil", which from a certain point of view, they are, you will have the most evil people go to be the regulators, because that's how they can get the most power and money.

If I were setting laws regulating capitalism, the only thing I would put in is a law that basically says if a company makes statements that aren't true, or are misleading in any way, the individuals responsible are held to the same standard of truth that a witness in a court of law would. If a salesman lies to make a sale, he has essentially perjured himself. If a commercial lies, anyone involved in the commercial who knew it was false, is guilty of the same offense.

Other than that, pretty much everything would be deregulated. Take the BP spill. There were talks about greater regulation on oil drilling. I would remove the regulation. I would just hold companies, and their investors, responsible when something goes seriously wrong. If investors stood to actually have to pay out for a cleanup or something it wouldn't take long before the investors either forced far more stringent regulations than the government ever would, or would bail rapidly and tank the company. Anyone left would then have the option of personally suing those making the decisions for their lost money.

The problems that most liberals point out about what they call capitalism is actually from government intervention. Medical care is expensive because of what one has to go through to get anything approved. Gas prices, in the end, are mostly tax. Not just the tax the state charges you, but the tax the government applies to the oil companies at all levels, from buying or selling crude oil, exchanging the refined products, vast insurance policies required by the government, taxes paid on things they buy, employers portion of payroll tax, social security, unemployment, property taxes, and any number of other taxes. Companies don't pay taxes, you do. They give the money to the government, and then raise prices to compensate. If they can't raise prices enough, they pay employees less, cut benefits, hire fewer people, or whatever else they have to do.

[jerome1232]

Fear Laissez-faire, fear communism, meet somewhere really close to Laissez-faire.

Is that the sum of what has been said? If so, I agree.

[MattS]

Does that also mean things like farm subsidies should be abolished and that banks should be left to fail and therefore collapse?

[Backroads]

I lean more toward low-regulation. I believe high regulation can create plenty of problems on its own. I like what kapikui suggested--I would like laws that would punish dishonesty, laws that kept everyone at a few basic rules.

[Backroads]

Does that also mean things like farm subsidies should be abolished and that banks should be left to fail and therefore collapse?

Yes.

I truly believe that if you can't figure it out on your own terms (or with advice you seek out or accept), hey, that's that.

This is, of course, all Backroads' ideology.

Edited October 25, 2012 by Backroads

[Just_A_Guy]

Yes.

I agree. It isnt right that our titans of financial industry have been permitted to privatize profit while socializing losses. That will only make them more reckless the next time around.

Now, I'll qualify that a little with regard to banks going bust: deposit holders whose accounts were FDIC insured should be duly reimbursed.

[NightSG]

My inclination is that think there is only one reason why economic regulation (i.e., with criminal consequences) is desirable in capitalism; and that to guarantee the free flow of information so that actors can make rational choices.

This is pretty much my opinion on it; proper liability for damages, and treat fraudulent statements in advertising as fraud. Instead we have government organizations like the FDA redefining terms so that advertisers can lie and get away with it.

Labeling laws ahould also be handled in the same way as some states do for contracts. You can get away with selling a GRAPE flavored DRINK that contains nothing resembling grapes. Treat "weasel words" intentionally hidden like that as fraud, and you make much more informed consumers.

[kapikui]

Does that also mean things like farm subsidies should be abolished and that banks should be left to fail and therefore collapse?

Yes.

[slamjet]

Capitalism should be understood more, especially the cyclical nature of corrections and the concept of risk. Problem is, the ones who understand it the least are the ones passing the laws regulating it, thinking that down markets and risk is bad, very bad.