Right. So, boosters of free trade like to use Singapore as an example.
It’s a bad exemplar of the policies such people actually want for a pile of reasons, but Singapore does contain lessons for how to do trade and capitalism right (other than “be a city state,” which isn’t usually an option).
About 90 percent of the land in Singapore is state owned, and 85 percent of the housing is.
The point here is that trade is important to Singapore BUT the population is largely insulated from the effects of free money flows. Their living costs are stable because the state ensures that stability.
Likewise, Hong Kong, renowned for free trade back in the day, had a huge amount of the real estate owned by its government.
(I am fundraising to determine how much I’ll write this year. If you value my writing and want more of it, please consider donating.)
Free trade is not free financial flow, and real-estate markets should not be subject to foreign money flows or the vagaries of an economy run through trade. You make trade work by sharply limiting what it affects, not by letting it affect everything.
This means stable costs for the native population and workforce and stable costs for people doing business in the country, which means that trade can do its work without destroying its own foundation.
This is true of capitalism in general. Capitalism, due to its inherent flaws, destroys itself in a number of ways. For capitalism to work, policies need to be in place for it to actively avoid these pitfalls:
- It must not be allowed to form unregulated monopolies and oligopolies.
- It must not be allowed to run bubbles; it must not be allowed to engage in mass fraud.
- The money gained from it must not be allowed to turn into power which controls government.
- Money must not, generally speaking, be allowed to buy anything that matters; from health care to a good education.
Capitalism, as the standard saying runs, is a good servant, and a terrible master. Only fools let capitalists actually control anything in their society that truly matters.
If you enjoyed this article, and want me to write more, please DONATE or SUBSCRIBE.
Willy
I bet most wingnuts base their staunch beliefs on that ‘freedom speech’ Captain Kirk gave the yangs and the comms. Obviously, it’s a bit more complicated than that.
Stirling Newberry
“Market failure” – health care, education among them.
Ten Bears
Why would we want to protect capitalism from itself?
We have to stop doing what we are doing, it isn’t working.
Synoia
This is depressing:
It must not be allowed to form unregulated monopolies and oligopolies;
It must not be allowed to run bubbles; it must not be allowed to engage in mass fraud;
It must not be allowed to turn into power which controls government;
Money must not, generally speaking be allowed to buy anything that matters: from health care to a good education.
Where is this currently not the case?
Billikin
Why protect capitalism from itself?
Well, maybe so that we have a vibrant middle class instead of an ossified caste system. (That is the extreme, OC. But that is the general tendency of capitalism.) It is not just the middle class but almost all classes that suffer from such a system. The people at the top end up being only relatively better off. Historically, we are enjoying the fruits of capitalism because it provide a mechanism for bringing the aristocracy down a notch or two. But capitalism is building a new aristocracy, in fact if not in name.
It would be even healthier to bolster the poor and working classes, but how do we do that for an extended period of time? Politically, the poor and working classes have proved easy to play off against each other. Maybe China will show us the way.
Webstir
“Capitalism, as the standard saying runs, is a good servant, and a terrible master. Only fools let capitalists actually control anything in their society that truly matters.”
Doh!
Might I quote you, Ian?
robert jackson
Authoritarian philosopher king, educated at Harvard, wow! A polity dominated by EBT card dependents (Hillary did get a majority of votes) bodes ill, as well.
V. Arnold
On an individual basis, in the U.S.; there is only one solution; carry no debt, none, zip, zero.
No credit cards; debit, yes, but no credit cards (only if one pays off the balance every month[and that can be problematic if one is not extremely careful]). If one uses a credit card for monthly living expenses; that signals a problem already: Don’t do that.
Credit unions are your friend; banks are not.
The banks in the country I live in, just introduced credit cards for the masses within this last 8 years or so, and by design; many immediately got into trouble and are now credit blacklisted.
To live a life debt free is a journey of revelation; it opens up the world we live in with new eyes.
Barry
Fire is good. It cooks meat and clears away plants.
Therefore, fire departments should be outlawed. We shouldn’t interfere with fire’s creative destruction. With thermostats man prevents fire from seeking its optimum temperature. Internal combustion engines impose burdensome regulation inhibiting the free flow of fire.
Only when fire is unfettered will society be able to find and reward those who are fastest and have the greatest capacity for smoke inhalation. Allow fire departments to continue and you allow slow coughers to take over and make society inert and sedentary, hemmed in with walls and roofs and pipes and ducts and roads and vehicles and tools and books… and fast men will never reach their full potentials.
Ten Bears
So, when your house catches fire you’ll just stand there with you thumb up your ass and look at it?
When I was a kid, lo these many years ago, my solidly middle-class college educated atheist socialist grandparents had a merchantile out in the middle of what was the middle of nowhere. Sign on the wall said “In God We Trust, all others pay cash.”
That’s what made “America” “great”.
OldClark
An old saying (I made up)…
Capitalism is like rain: Too little and not much grows; too much and the crops are ruined, the town’s under water, and there’s a whole lot of misery.
Stirling Newberry
> Why would we want to protect capitalism from itself?
Because capitalism is dead. And now many people are saying.
The danger to capitalism, is capitalists.
DMC
Strict usury laws to put absolute ceilings on interest rates on money lent would go a long ways. Punitive taxes on profits above 20% or so. Separate the commercial and retail banks ala Glass-Steagall. Have a look at how Islamic finance works. They do almost entirely without interest, yet allow for profit from investment.
Willy
Somewhere between the once mighty Big Mac shrinking to the size of a slider, and health care being rigged to be mostly about money extraction, capitalism died. The biggest lobbies are… what? Still, at least fast food places are still posting their prices. Be nice if health care outlets could all do the same.
Hugh
If you have stable costs in the essentials, you don’t need great fortunes. This kind of goes along with banning monopolies and oligopolies. So 100% estate taxes on estates over a couple million and high (95%) marginal tax rates. It also goes along with severe limits on intellectual property.
V. Arnold
Speaking of debt; the meaning of the word mortgage, is rooted in old French and Latin:
It means death pledge; think about that the next time you think to buy a house…