When Capitalism is Great and Not-so-great

[@Moonhumming]

I think the problem with capitalism as a system is the fact that it makes commodities of absolutely everything. It commodifies people as laborers and it commodifies natural resources into things that can be manipulated into technology that can be sold. However, there are things that are inherently non-commodifiable. The example that I always use is one of bees. Bees produce an incredible amount of 'wealth' (crops and food) and they are doing this for 'free'. Trees also serve irreplaceable roles like cleaning water and air. Again, these services under the capitalist system are things that are done for 'free' and are therefore taken for granted. It's difficult to quantify the contributions of natural resources in terms of money until they are gone. Artificial pollination and air purification can cost ridiculous amounts of money and are a drain on energy and other resources. I really admire Sal and what he does. I used to hold the capitalist standpoint as well. But after a lot of thought, I do not believe pure capitalism to be a moral system. It neglects the needs of people who cannot work (the sick, the elderly, the mentally ill, etc.) and basically devalues them because they do not have utility as workers. As an able-bodied, able-minded person who can work, I realize that I do have a lot of opportunity and privilege within this system, but that there are people who are not like me that do not. Capitalism also looks worse and worse when its history with any other system of social inequality like racism or sexism is tied in with it The idea that capitalism is just a bunch of people of equal social standing going out to sell their goods and services isn't necessarily true. Capitalism is also a bunch of people redlining neighborhoods for increased profits or the American colonists eliminating thousands of Native Americans for better access to resources. For years, women were forcibly kept out of the workforce and were devalued socially because of it. All of these examples make sense within the capitalist model. The profit motive puts profits above all else. When you tell a diseased patient that the medicine needed to save them is too expensive, you have basically chosen money (an artificial means of exchange) over a person's life. And those are the issues that I, and many others like me, have with the capitalist model.

[@RedZeshinX]

My sentiments precisely. I think a system that encourages innovation and merit-based reward, yet conscientiously mitigates the deleterious effects of unchecked excess and acknowledges our natural, common empathy with the whole of humanity and the environment we live in, would be desirable and optimal.

[@Moonhumming]

Agreed.

[@bustinbinden]

Well put

[@burningknight7]

you sir/madam are intelligent.

[@erigor11]

Capitalism is inherently a morally flawed system. Also, it's currently ruinning science (which is the real main reason for our exponential development as a society, not capitalism).

[@lovaaaa2451]

Like 20 seconds in and you say ''I would consider myself a capitalist'' as a way of saying that you are in favor of capitalism. Well done mate this youtube channel you've got here clearly is an honorable academy.

[@vihaanmallela]

Well he is a capitalist, because he started a business...

[@alphadoughnut2651]

Lova aaa he still listed negatives.

[@dftew53]

Even if someone is bias, that doesn't mean that they're not being factual. There's no such thing as a form of media having no bias. In my opinion, Sal was fair because he showcased the pros and cons of each side.

[@Ariminua]

@@dftew53 It's true that there's no absolute absence of bias, and that the inclusion of bias doesn't automatically dismantle the credibility or factuality of an argument. But in the video, and other Khan academy videos talking about similar topics, it's clear Sal it too smitten with capitalism to give a direct picture of either system. He gives general characteristics of each but he don't give a clear definition of either. Even his pro-con analysis has obvious errors. He lists that capitalism's main incentive is essentially more profits whilst socialism doesn't possess, but ignores that humans can be incentivized simply by the joy of creating accomplishing some goal that can be resent in socialism. He talks at length about capitalists being innovators to stay competitive, but omits that most scientific innovation has been initiated by government sources such as the military. He talks about how capitalism is great for being a meritocracy, but he doesn't come out as being against inherited wealth for some reason seeing as it goes against that ideal. You know these points don't to be talked about at length but he completely omits them because of his bias for capitalism.

[@arrinjacob2088]

@@Ariminua Hi Richard, That's an interesting nuanced take. I consider myself to be more economically liberal, and I believe in privatization methods if it equates to the most optimal level of efficiency which can benefit anyone and everyone within the society. (Therefore, it's safe to say I am more capitalist in idealist theory). In regarding the points you raise, I think one can illuminate some solutions with a slightly leaning capitalist bias, for example... Discussing your first point: scientific innovation in a privatized market (basically what we have now), has the utmost goal of innovation in technological progress, for profit, but the consequence (if properly and fairly implemented) are solutions and research sanctioned by the government through contracts. I'm not saying that there aren't government employees also involved in such sectors, but I think there are conjoined mutually beneficial relationships between government departments, and specialized private companies. Its a win-win scenario in the most ideal case and I think if there was a more privatized market, more incentive would be present for such technologically innovative companies to compete to find the best solutions to the world's problems, and the most successful can be commissioned and/or mandated by the government through their appointed officials and hired government employees. With that said, I agree that there does not seem to be much of an inherent meritocracy occurring today, because of the government's interweaving relationship with multi-conglomerate corporations that benefit from the kind of "socialist policies" we see. This ends up hindering the formulation of small businesses/enterprises that can cohesively compete with the big players already established in the market (we see this through corporate welfare). Such realities cause the unvetted effects of unchecked capitalist environments that have corporations be virtually untouched to fair regulation that protect workers' rights and gives small businesses opportunities to compete, giving the consumer ultimately more choice in where they purchase their goods and services. In the end, we have a reality such as today, where the government spends more than what can be reasonably recuperated (this is more evident now due to COVID-19), fewer companies forming, less competition (unless you consider hyper-competition with the jobs offered by these major conglomerates), fewer incentives, fewer employment opportunities anywhere else besides the big corporations, fewer options for consumers to choose where to purchase their goods and services, high cost of living due to high taxes and inflated prices thanks to governments overspending, at times wage freezes.....I mean in the end, we don't have a fair equalized system that ensures the benefits of BOTH ideologies being practised as purely as they should. One last note, in regards to your remark about inherited wealth, Sal should have stated that in a purely capitalist society, the meritocracy should exist and the harsh realities of not upholding it, including that inherited business and the child of that wealthy hard-working entrepreneur failing to lead that company to greater success, will eventually fail and should fail ideally speaking. It goes back to "you get what you give", and if they are unwilling to continue to give to ensure they earn what they get, then they deserve to get precisely what they give...that means ZERO. Ideally, that's fair and in that situation, such an established business will fail. Just my two cents, sorry for the lengthy comment. Hope you enjoy the rest of your day!

[@AQGOAT24]

Although I don't study this subject in school, these are very interesting videos. Thanks Salman!

[@ayaaaaaaaaha]

its been nine years

[@g17maristelaangelczarinaug94]

U became Chrollo💀

[@peaceleader7315]

Bruhh... !!!

[@francisd7081]

This video was 95% capitalism and 5% socialism. It should have been a more balanced lecture/video.

[@anonifag]

Hey Sal, good thing you clearly stated your bias in this video, but I think you should have done that in your video on communism too.

[@noelakn]

Im proud he bias to capitalism

[@nanashi420]

​@noel8028 Capitalism is a destructive ideology that thrives on the suffering of billions. It also fails to teach people proper grammar, apparently.

[@durgamabhilash4752]

If someone is are a monopolist isn't there a good chance that he's got the government in his pocket?

[@babybirdhome]

Nope, not necessarily. Microsoft was a monopoly at the time that the government came after them. Bell was also a monopoly at the time the government came in and broke them up into the "baby Bells". Granted, a _smart_ monopolist would do everything in their power to have the government in their pocket, but it's not strictly necessary that the two will always go hand in hand.

[@robertstan298]

Uhm, yea babybirdhome, that's why they got tons of fines and anti-monopoly restrictions in the EU, they also got involved in a massive corruption scandal in my Country... but not in US.

[@aellareign7925]

No, that means they have multicolored money, a top hat, and a Get-Out-of-Jail-Free Card.

[@lamalamalex]

All monopolies are the result of government intervention!

[@lambbone8302]

Have any of you ever thought to wonder: What are the most corrupt and least corrupt countries in the world? You’d quickly find that progressive, big government social democracies are the least corrupt while countries like the USA where corruption and emassing huge, unparalleled amounts of wealth and power is perfectly legal, are more corrupt. Interesting www.weforum.org/agenda/2019/02/least-corrupt-countries-transparency-international-2018/

[@Melthornal]

@SalsaTiger83 Hard work =/= merit. Merit implies superior skill, not more work. Capitalism does not push towards higher and higher standards of skill, it rewards those who raise capital. Two vastly different goals. Capitalism does not reward based upon merit, it rewards based upon success in the marketplace.

[@SalsaTiger83]

Also, I don't try to "define" wealth. For me wealth is that I have access to the internet and its ressources, but also that I can enjoy the variety of food available to me, and all the little services and goods everyone takes for granted. That way, without capitalistic growth in the first place (which couldn't have been prevented anyway), most people even in the whole world would be worse off (or not exist at all) than they are now, even if some grew richer faster.

[@iamvoodoo]

My disagreements: 1) A naturally occurring monopoly, one that is not manufactured through government regulations, is not a strike against capitalism. Such companies must constantly innovate and price to market because so long as they are profitable, competitors will relentlessly try to unseat them. 2) Inheritance is useful in building towards capital accumulation for society. To dismantle a company so that descendants, competent or not, may forgo an estate is equivalent to economic degradation.

[@metashifter]

The idea you're probably looking for is the concept of common sovereignty. I was arguing with this guy on facebook who was racist against communism and socialism, and it took me close to 100 comments back and forth to get the point across that the perspective on common sovereignty is more important than even the form of government, because the perspective of common sovereignty held the government and the people is more powerful than the institutions themselves.

[@NewProgressiveEra]

Those extreme forms of capitalism (crony capitalism, monopoly, regular people losing incentive) that is happening right here in the United States. People get paid dirt-cheap wages while huge corporate CEOs make 300x the wage of an average worker. We need to switch to an economic system similar to Europe, where we take care of the poorest and make an economy geared for regular people, but those who work the hardest can still reap benefits, but not to the point where they have complete control over the economy.

[@olivias364]

wish you would've brought up the exploitation of labour (esp. in the third world) tbh..... also, it's interesting to me that americans view socialism and communism as virtually the same things? i mean like... i live in a socialist country (sweden) and it is based on incentives? it just presents itself in different ways - people here become lawyers for not As high salaries as you get in the US, but for job security and genuine interest. like i swear to god, law students study law bc they want to have a job that isn't in a sector which they find uninteresting. i study confectionary (and literature lol) not bc i want to earn a lot of money, but bc im interested in the fields and know that there are jobs there and i can like. survive doing something that i know i will feel happy doing. for people here, the options are: - labour based jobs (construction, cleaning), repetitive but secure and physically draining but 'simple' - skill based jobs (social workers, chefs), requires about the same amount of physical and mental capacity - education based jobs (lawyers, teachers, doctors), requires a lot of studies and mental capacity and people choose what they are most interested in since you get a similar amount of money regardless. like ofc there are differences and you do make significantly more money as a surgeon than as a construction worker, but you can Survive and Life Comfortably even if you work 'low-skill' jobs. medication is free up til 18 and even after that you get help to afford it (i get a 75% discount on my ADHD meds), dental care is free til 18, vaccines are free for children and provided in class by the school nurse, university is free and you get paid abt $160 a month to attend school, etc etc. people choose the kind of jobs they think will suit them the best and usually this works out fairly well. (right now, there's a lack of teachers and psychiatrists, so our gov. is working on that by lowering the entry requirements LOL..... not the best method imo) what i want to get at is that there are definitely incentives under socialism, and i dont want it confused with communism..... we're p against that here considering the winter war. socialism as we perceive it is essentially regulated capitalism/ liberal comminism - it's in the middle, and emphasizes equity and social security. it isn't perfect by any means, but it prevents a lot of the extremism present in capitalist and communist countries. it's a very interesting discussion, and actually... by swedish standards im not considered a leftist :0 tho literally the swedish right are still left in america by virtue of wanting to keep universal healthcare etc lolol

[@jnathanbush1780]

Nice and very informative, Im in Kenya and we are actually going through a period of "state capture" coupled with massive, massive corruption where its pointless to take any wealthy criminal to court, i mean, all he has to do is write the judge a nice check... So the economy is in free fall thanks to pure, unbridled capitalism.... Im starting to actually hate this system, the poor can only get poorer... N the rich richer

[@Chhaylin]

I think there's a fallacy here. Monopolies are not necessarily bad. The monopolist can raise prices, not innovate etc..., but there's always the threat of a new competitor who can produce at lower prices and who is more innovative so that he increases more market share.

[@Stargazer5781]

@dofuscato The problem is that since it is a monopoly, and since taxpayers cannot choose not to pay, the government has no incentive to fulfill any responsibilities or to not abuse its monopoly. The only threat the government faces is if taxpayers vote for a politician who defunds the government, which is probably against the politician's self-interest for many reasons, not the least of which are his obligations to his financers. There are also public choice theory problems with voting.

[@ex_orpheus1166]

Innovation can and has happened under socialism: aerial refuelling, the light emitting diode, electric rocket motor, the space capsule, space food, fast neutron reactor, GSP (GLONASS). All of the innovation that happened under capitalism happened with government patents, not private entities. Innovation happens in the pursuit of human curiosity and needs, not profits and artificial markets.

[@ganeshprem3043]

You've explained this very well.. these are interesting questions to ask and to think about.

[@Cythil]

Here we come to a issue. The first issue is how to define what is capitalism. The second issue which I will focus more on as you made the two discretions between these to economic system already and I find no reason to argue against it at this moment. Do capitalist societies that are unregulated always naturally transcend in to Corporatism?

[@kylemcclellan9686]

I think the reason "old money" is more respected has lot to do with the idea that it rarely refers to 2nd or even 3rd generation wealth. It sort of counters the notion that inherited wealth will ALWAYS be squandered. It's been said that a family's wealth is often gone within 3 generations. This is not the case with old money.

[@SalsaTiger83]

@exstntlstfrtn whenever there are oligopolies there is a balance between efficiency and free market. As soon as there are two competitors, they will compete, and with every additional competitor, the barrier to market entry gets lower.

[@noxure]

Socialists: Receives taxes from corporations to give free education. Sal: Receives donations from corporations to give free education.

[@jsymons1985]

Well, arguably those 20th Century experiments were not Socialist at all. They were authoritarian regimes, that used the term 'socialist', as a form of anti-western imperialist propaganda. Socialism is defined as "group control of the means of production", where group does not necessarily mean the state, but rather the people who contribute to the productive output. So a 'co-op' is a socialist organization, for instance. I think you should have added that nuance!

[@iamvoodoo]

@BarclayAvenue I agree. And that is what Khan alluded to by referencing corporatism. This is why I also think Anti-Trust laws are counter-productive, corporatist schemes while regulations serve business/government interests, not consumer interests. Governments should never develop the power to micromanage market behavior. Otherwise, consumers lose their ability to influence businesses in a manner which keeps them honest and exposed to failure.

[@099749]

a meritocracy is an aristocracy, as the best are those with most merit.

[@ekkamailax]

The people who innovate do not get rich. For example, the scientists who invented the personal computer, graphical operating system, and the internet did NOT get rich. It was the college drop outs with no skills who got rich by turning those existing innovations into profitable businesses.

[@iamvoodoo]

@lexinaut Cheats in a purely capitalistic environment do cause damage, but have no mechanisms to perpetuate bad behavior indefinitely; eventually market forces will eliminate entrepreneurs who repeatedly dissatisfy their customers. Cheats can only stay in business if they have cover from the government. Also, environmental damage can be mitigated if private property was properly defended and insurance was truthfully calculated using a market approach rather than artificial government caps.

[@Moepowerplant]

An initial phase of tight government control (more direct control, that is, not simply protecting particular cronies) of the economy, I think, is essential to progress, to protect local industry (in general) and build up infrastructure, before opening the field to free trade, and even then there are certain fields where government has a lot of say. In a country highly capitalist from the start it looks like there isn't even a proper state to begin with.

[@mvrak]

Planned obsolescence is a market strategy that is actually not an issue, because if there was a greater benefit from a more durable product a competitor could easily release it. By definition it is economical, because cost is analyzed at all levels. Please cite an example where this is not the case.

[@SuzLa1]

There was pure capitalisn in the industrial revolution in England where the corporation owners trapped the workers into poverty with bad working conditions. People such as the Chartists fought for better working conditions and others fought for rights such as to be in a trade union. The things that make working in the west a desirable place to live and work. If you want to go to pure capitalism again, then you will need to look to places where they force children to work for hardly any money.

[@jchien]

Sal, what do you say to criticisms to meritocracy leveled by people such as Alain de Botton? Since luck, physical barriers, congenital defects, unequal access to education, unequal opportunties due to life circumstances, rent from physical capital etc play a big role in social inequity, how can we justify the idea of meritocracy? And by meritocracy do we mean wealth is a measure of social contribution and an indicator of someone's merit and worth as a human being?

[@marcusdavenport1590]

You can do good under capitalism... There are non profits everywhere. Capitalism is more about freedom than it is about profit.

[@danghoang7455]

its about freedom to make a profit

[@marcusdavenport1590]

@@danghoang7455 it's about freedom to do whatever you want. Profit simply shows that you've provided value to society.

[@Elsoddo]

I'd just like to say something about sosialism. It's actually more capitalist than "communist". What it basicly means is that the state takes care of some vital things like security (police, firefighting, ect.), healthcare, education, roads, ect. EVERYTING else ('cept alchohol) is up for grabs. This enables basic needs to stay cheap, or free, and keep competition alive in, for exaple, the clothing industri, or the food industri. Kinda hard to explane thing in ONE comment.

[@MrLewisMovies]

I think the point that he was trying to make is that monopolies aren't bad. In the rare chance that a monopoly does occur in a free market. It is highly unstable and doesn't last long. All of the 'monopolies' that we have grown to known like Carnegie/Vanderbilt/walmart etc.. only became a monopoly with the government's help. Either through subsidies and corporate welfare, or by making it to hard for competitors to enter the market. You may disagree with this idea, but at least consider it.

[@SalsaTiger83]

@Melthornal After the great depression America became superpower number 1, I don't consider that a permanent failure. If you look at stock returns, the depression made a dent, but more than recovered afterwards. If they are "all" inherently flawed, why argue against a system that obviously works most of the time?

[@SalsaTiger83]

@kaching012 that's not a problem socialism vs capitalism, but more about recklessness versus morals. Look at the UDSSR and China. They are quite ruthless with their ressource grabbing, whereas the American citizens would never want a war to be fought for oil, even though that was a motivation that was behind some of their leader's decision.

[@mirandansa]

A) Picking a master when the alternative is starving to death, is not a voluntary choice. And jobs are not magical enough to ensure employment for everyone. B) In other words, people are not protected from deceptive advertising until the company is sued by its victims. (I understood you position as one which ignores planned obsolescence.) C) When there are wasted abundance of food in some regions and deadly scarcity in others, it's called gross inefficiency in resource distribution.

[@Amaroq64]

Sorry to just leave such an assertion in a youtube comment. I mean the negatives he says Capitalism has aren't actually part of the nature of Capitalism. We're a mixed economy, and the negatives he mentions arise from the Statist elements. For example, coercive monopolies can only happen if the government has propped up and/or protected them somehow. Without that protection, monopolies are actually beneficial, because they had to be the most efficient in order to gain a monopoly.

[@ygolonacable]

Out of 300 million Americans, how many are innovators?

[@Amaroq64]

Then I think we just have a discrepancy between our definitions of monopoly. I differentiate between a business that was able to dominate the market through efficiency (non-coercive monopoly) and a business that dominated the market through government intervention (coercive monopoly). Only coercive monopolies can set arbitrary prices and stagnate and still stay in business. Legitimate monopolies have to maintain efficiency and progress or lose their position as a monopoly.

[@SalsaTiger83]

@exstntlstfrtn with competition you usually compete on innovation or price. But even if a new innovative small company threatens the monopolist, he can sue, intimidate or just take over the smaller company. That's why moderm governments don't allow monopolies.

[@Amaroq64]

She was polarized because she knew what was true and right, and she was willing to fight for what's right. Aren't you? And many free-market intellectuals (even Austrians) reject her because they reject her morality. They think they can argue for an individualistic, egoistic system like Capitalism from Altruistic premises. They're contradicting themselves and they aren't willing to question their moral premises.

[@fayning]

That's why i turn to Buddhism which stresses wisdom and compassion and that they could be developed in everyone through proper training, rich or poor, smart or dull. Also it elaborates the root causes of sufferings and the paths to follow to alleviate them. Those other ~isms never mention about developing wisdom in individuals and the realization of the equality of being enlightened.

[@jchien]

A good question: in a market based economy, do people always benefit from the exchange of money for goods/services? Two different concepts: want and need. You want things that you think or assume is good for you, whether in the short term or long term. You need things that can really benefit you materially. People trade for things they want, not necessarily things they need. If there are instances where people pay a lot of money to some unscrupulous capitalist for trinkets or dodgy product

[@eloiselovesdevi]

very enlightening, thanks for posting this!

[@nicoheckens1]

Khan, is it really the capitalistic society that can ferment monopolies? If free trade were allowed, without tariffs. would that not break up monopolies domestically?

[@TheEnepicanParty]

The world is not static. It is ever changing, ever growing into different things. And if we, as a society see the world a certian way for all of our existance, we will never see beyond our ideas. The best ideology is not one that changes the world based on its perspective of the world, but an Ideology that judges the situation of the worle, and makes a choice free from biased opinion.

[@moise2606]

Hey! Good news! You're a socialist! You seem to be a bit mixed up between what a socialist and a communist is. But your questions are what socialism is trying to answer. (Sorry I'm not English so I may have made mistakes in my sentences)

[@SuzLa1]

If you have pure capitalism then people who inherited money will always be OK but people who couldn't afford an education or have poor parents will stay poor.

[@hommlespill5902]

I think I have a slight problem here because I kind off hate capitalism and socialism but I really like the concept off a democracy where the people decide most decisiouns and where they dont only vote for one guy to lead them all but where everyone gets a say in it and where the most logical and ethical correct decisioun is the one the goverment chooses instead of just voting for one guy to rule the contry for 4 years, so I dont like USA s way off doing it.

[@hommlespill5902]

with other words I think that we should combine more then just one Ideology like combining the good things from democrats with the good things from communism or combine in the few good things about facism to get the best and best government where the people also need to make sure that the goverment dousnt become corrupt in any way.

[@anatrue]

the us economics policy isnt really that simple. heres just a few brief facts. one guy doesnt rule over us. theres 3 branches of government - executive, legislative, and judicial. respectively, the president, congress, and the supreme court. its designed to prevent power from falling into just one persons hands. congress is the one who makes the laws. presidents do have veto power, meaning ability to reject a bill congress passed and prevent it from becoming a law. presidents typically cannot declare war without congressional approval, but there are some ways to sort of begin a war (an invasion, if you will, for lack of a better description) while waiting on congress to vote. the supreme court decides if things are constitutional; they can trash laws that are hundreds of years old and create new ones. people have the power to challenge laws through the legal system. we have an electoral college about which ive found a surprising amount of americans dont know. presidents win an election by winning states, which affords them a number of delegates (theyre like points in a game, except theyre people). each state has a different number of delegates based on population. the electoral college is only used in presidential elections (ie, the executive branch). congress represents states and are elected by their state. supreme court justices are appointed by the president. theres so much more. theres districts and assemblywomen and men, mayors, city hall, governors even. if you have questions, id be happy to answer objectively. to other khan academy fans and critics, if im wrong on something, please constructively criticize. i did my very best and im not going to be able to correct my mistakes with demeaning side chatter. khan academy is about learning. do not prevent learning.

[@hommlespill5902]

Alice West thanks for the constructive and well made explenation off how the american voting system Works. and I think its Nice that you say that this is about Learning in the end. Because you defenently tought me how it Works and I apriciate that so thanks for Teaching me somthing I didnt know before. :D btw sorry for horrible spelling

[@anatrue]

No apology necessary. Spelling does not measure intelligence. My chemistry professor in college had a PhD in analytical chemistry and he was the worst speller. He also taught me more chemistry than any other professor. I will always tell anyone who asks what I know in the most unbiased way I can. And what I don't know, we can learn together or from others. I don't believe in taking sides, only talking, understanding, and working together. May I ask, where do you live?

[@UNR3S7]

@ChallengeDK you are both right, socialism is an aspect of capitalism, but socialism can also act as a transition between Capitalism and Socialism. Really, though, the words are really mixed up ie: fascist Germany was considered "National Socialism" where socialism more means centered around the state. Really, the main problems are that consumerism is not sustainable and Economic Materialism (Big house, nice car) creates absolutely useless goods that simply separate the population further.

[@MoneyKur]

Capitalism has deep problems in that its sole incentive is money. The singular goal of businesses ultimately becomes infinite growth at any cost. It becomes in the best interest to protect business models over any innovation or challenge to status quo. My beef is not directly with capitalism. It is just product of societal priorities we need to reanalyze. But capitalism, in particular, resists such change because we feel entitlement, becoming compartmentalized and protective of "property".

[@SalsaTiger83]

@nicoheckens1 it might or might not... but you can see that sometimes there will be monopolies that can't easily be broken up just by competition. Especially not if the company in question fights with legal but not really "market-related" means.

[@raphael77ful]

The main thing we want is Peace and Education so forget about the capitalism & socialism !!

[@RKAddict101]

Liberty is the ability to act without the violent interference of another individual. Liberty grants you the ability to do as you wish (as capable within your power of course) as long as you are not harming anyone else. I agree, there are plenty of people with a lot of influence over my life, where in many cases I may not even realize it. But I disagree that it's a sensation and a sensation only. It's a very real thing and has an objective definition.

[@kajmobile]

HERE IS A BETTER WAY TO DO THIS VIDEO: When run well, both systems provide good incentives, a meritocracy, innovation, and fairness. When not run well, they do not. The difference is that capitalism produces ENORMOUS inequality in wealth, power, opportunity, and outcomes. Socialism does not. And social scientists say the root of most social problems (crime, poverty, struggle, suffering, lower overall well-being) is inequality.

[@TheEnepicanParty]

It is not hard to know that it is UNITY that got us where we are. No one can build a bridge alone. Capitalism and Communism together with Fascism, and Democracy UNITE! Leave your biased opinions aside, and find solution to the problems ahead. Talk to eachother, without childish name calling! Please, we cannot do this with only the bases of a single Ideology!

[@anthonybeervor2265]

@099749 well, an aristocracy is etymologically the rule of the "best", but the measurement of being the best people of an aristocracy is based on bloodline rather than merit.

[@MrLewisMovies]

Im not taking a side. I have never read a Rand book, but Adam Smith also believed that greed was noble. It was a persons greed that made them want to create the best product or the best service. Capitalism runs on greed, and i think that is the best system. The only way to be rewarded in a capitalist system is by benefiting others.

[@mvrak]

if only more people would understand that meritocracy is neither racist nor sexist

[@acphantom6437]

6:14 that's just a function of markets, not private ownership of capital to the exclusion of laborers For example scientists are really the ones who come up with ideas for life-saving drugs but when they are profitable for the pharmaceutical company do they share in the profits or do they earn their base salary and the profits are handed out to the owners and shareholders? Certainly the latter. In a market socialist system firms would compete but because lqborers own the capital they all share in the profits of successful innovation. Certainly that would promote innovation more than the current system of do your job and create innovations for capitalists to monetize or face being fired.

[@RKAddict101]

I was sad yet not surprised to not see "liberty" mentioned as a merit of capitalism.

[@SalsaTiger83]

@MoneyKur All the bussinessowners I know care a lot about their workers. Even most "bosses" in bigger companies care about their people. The problem with getting rid of a focus on "property" is to decide how to redistribute such wealth in a way that is fair, free of corruption, greed and actually enhances society. And then to tell this scheme of redistribution apart from one that looks equally good but doesn't work

[@099749]

@prophetchannel Which is why nobels should rise and fall, and not just expect to be lords, earls or dukes forever, and why they should show themselves worthy of it. Anyone can be made a noble, just as any nobel can be expelled.

[@bodhibunker521]

Danm, you went off on the "old money" pretty hard.... What about the "chance "old money" who does good?

[@keepermovin5906]

It’s a pretty small minority in a minority. most humans are greedy by nature, the few that are good don’t balance out the rest

[@stroopwafel9545]

well then you could also say that about monarchy, they can do good. but does a prince/princess deserve to inherit the power their parents hold?

[@perigrinus3133]

stupid question

[@eclipse6859]

If you added a microscopic amount of nuance to this, you could see how socialism is better for good incentives, meritocracy, innovation, and fairness. The USSR wasn't socialist or communist for the record.

[@SalsaTiger83]

@endauthority that is correct, but in general, the more you work the more you gain. You also have to generate a benefit for society. If you flip burgers all day, don't expect royal payment even if you work 20 hour shifts....

[@Hadrianus01]

Even though you label yourself as a capitalist..Thanks for providing these FREE videos for EVERYONE :)

[@visivoo3845]

As if Capitalists don't support free things...... That's one of many lies that Communists/Socialists preach. Watch "Free Software Free Society" on KZbin

[@gcod3d161]

@@visivoo3845 they’re okay with free things if it doesn’t cost them anything extra and doesn’t harm their profits, things like: roads, buses, fire dept

[@greeksurferdude]

Great video, but the blanket statements on "old money" turned me off. One works hard in a capitalist society not only for themselves but also for their offspring, who also often contribute. Family businesses are a great example of this where children aren't formal employees but definitely are assisting and supporting the business. This is something that should be greatly encouraged because it strengthens the family unit, promotes parental involvement, teaches adolescents good habits and provides an opportunity for invaluable practical training experience. "Old money" shouldn't be frowned upon.

[@stxrobstar]

Government in America is consolidating the biggest monopoly of them all. It directs the energies of sovereign individuals through the force of arms under the color of law while continuing to build upon their near monopoly of force - even as they protect vested interests & stifle the creation of independent enterprise. This all encompassing monopoly now serves to regulate & restrict the very act of creation & innovation as well as the distribution of the building block of civilization; Energy.

[@Melthornal]

I do not see how you can construe capitalism to be meritocracy or in any way whatsoever involving merit.

[@johnc1014]

Education- This should be the responsibility of the parents. Parents get to choose how and where they want their kids educated. Naturally, they would want the best they can afford. They create competition between different educational institutions which results in higher quality and lower prices. The government has a large monopoly on education through public schools. This is why our school system is declining in quality. Government funding of public colleges and universities is the reason their prices are increasing more and more. They can charge whatever they want because they government will pay for it through tax-payer dollars.

[@babybirdhome]

This premise requires that *_all parents ever_* are themselves educated and smart enough to know the difference between a good education and a bad education. It also requires zero corruption anywhere within the system in order to actually function the way you propose. All of these things are impossible.

[@Victorificationn]

Govermnent has always had control of education.The reasons why quality of education is declining is because governments have implemented reforms so education could become more flexible and adapt more easily to the market,which is totally bullcrap.Basically,the purpose of institutionalized education has become that of pumping out specialised workers and nothing else.Education is controlled by the market.Instead of education dictating what happens to society,society dictates what education should look like no matter how damaging it is. And no,education is a common responsability we have as a society to our children.Institutions have been created to facilitate this.What the fuck do parents have to do with it? The only people who should decide what education needs too look like are intelectuals and educators from all fields but most importantly academia.Not parents.

[@johnc1014]

babybirdhome Lack of education in the parents is still not justification for government to have any control over it. Neither of my parents graduated college, yet I will be earning by Bachelors, Masters, and likely my Ph.D. in Aerospace Engineering. If anything, due to the fact that my parents weren't well educated, they wanted be to be in order to have a better life than themselves. Also, your corruption point, is absurd in the context of parents vs. the government having the responsibility. If there is corruption in the parental side, then that is limited only to a specific family. Whereas corruption in government, of which this abounds, the said corruption impacts the entire nation. We see this with college/university costs and we see this with the decline in our educational system. Even in those cases where public education does produce some quality, it is at a cost far higher than if it were the same quality education under parental control. Also, under parental responsibility, that same education would likely be of even greater quality. Free market competition produces higher quality and lower prices. Government largely having a monopoly of education produces lower quality and higher prices.

[@johnc1014]

crackledoodle "Govermnent has always had control of education." Actually, no, it has not. Education in the United States started as private, largely by churches. Primary/secondary education in the colonies was largely accomplished through parents and churches coming together to start community schools to teach their kids. Many homeschool students still have something similar to this. For instance, at my church, kids go to different parents who have different backgrounds. One couple might teach foreign language, as they are fluent in more than just English. Another couple might teach math and science as they have an engineering background. Etc. To save money, a homeschool group can all pitch in to buy a certain curriculum and share it amongst themselves, as opposed to each family having to buy a separate set. This also provides great opportunities for socializing and extra-curricular activities. Early textbooks, such as the New England Primer, were used to teach kids things like reading the Bible. There were also other topics covered, such as basic arithmetic. Going to colleges/universities, most were started to train church leadership. This was the case with Harvard, Yale, Dartmouth, Princeton, and many other major universities that are still around today (only now they are secular). Harvard trained Congregationalist and Unitarian clergy. It's curriculum was largely secularized in the 18th century. Yale was established to train Congregationalist ministers in theology and sacred languages. Though Stanford is much later, and on the west coast, it's founding still included this: "The Trustees ... shall have the power and it shall be their duty: . . . To prohibit sectarian instruction, but to have taught in the University the immortality of the soul, the existence of an all-wise and benevolent Creator, and that obedience to His laws is the highest duty of man. . . . [also, I though this was interesting considering this was 1885] To afford equal facilities and give equal advantages in the University to both sexes." Dartmouth was originally founded as Moore's Charity School to provide education to Native Americans who desired to be missionaries to the native tribes. Wheelock, the founder and a Congregationalist minister (Puritan Calvinism) needed additional funding which he sought from friends and in his travels to churches back in England. Notice that he sought funding from voluntary sources, not government. . . . . "The reasons why quality of education is declining is because governments have implemented reforms so education could become more flexible and adapt more easily to the market,which is totally bullcrap." Actually, these reforms (such as No Child Left Behind and Common Core) have caused more standardization and "one size fits all" policy." Increased government interference in education means schools must do more "teaching to the test" instead of teaching to each students individual needs. There is also a lot more simple regurgitation of facts and memorization, instead of actual learning. . . . . "Basically,the purpose of institutionalized education has become that of pumping out specialised workers and nothing else." That is true. And considering how expensive college/university is now (though college is generally much less so), why would you go for anything other than to seek better employment. As a college student majoring in Aerospace Engineering, I must also take history, English, and social sciences. I've already taken plenty of history and English classes in high school. Social sciences are a complete waste of time. I don't want to take anything except that which is specifically geared towards my major because the cost of each unit is so high. This wasn't the case before government started getting involved and pumping millions of tax-payer dollars into education. While government has long funded higher education, this funding has always been a small portion of each institution's budgets. In recent decades the amount of funding has sky-rocketed, leading to higher prices, leading to more massive student debt. Government funds a university, the university can charge higher prices, students must take out more loans to pay for those higher prices, and often these loans are from government. Therefore, government spends even more on education through student loans. Thankfully, I started off in community college (where prices are far cheaper). I also earned several scholarships and grants through good grades (thanks to my parents encouragement since they didn't do the same). I am also using the military to help pay for college and I am currently working to save even more. I still will probably have to take out some loans near the end of my education, however, my goal is to limit this as much as possible. . . . . "Education is controlled by the market.Instead of education dictating what happens to society,society dictates what education should look like no matter how damaging it is." Firstly, education is largely controlled by government. Nearly all higher education students receive some form of government aid. On top of that, the institutions themselves receive aid. It is true that students can still choose from different institutions. This does mean that society (the people) dictate what education should look like. However, this is not damaging. If education went back to being inexpensive, it might be that more people go for more personal development. However, since prices are high, the purpose of education is to get a job. You get educated in some skill that is in demand. You get a job in that skill. You contribute to society using that skill, as well as earning a paycheck to live with said skill. This is not damaging. This leads to innovation in society. Right now, there are plenty of jobs going unfilled in information technology and health care. Also, (this does give you some basis for your "damage" claim) due to the increased push to go to college, trade jobs are often going unfilled. We need more welders, electricians, and other jobs of that nature. Often, these skills are not taught in university. They are somewhat taught in community college, but are largely a part of vocational schools. By the way, another reason prices of higher education are so high is due to that push to go to college. This increases demand. Anyone who knows anything about economics knows that higher demand means higher prices. A lot of kids are going to college without any idea of what they actually want to do. While this is fine to an extent, especially if you start at a community college, prolonging this costs you a whole lot of money. And, if you major in something like art, history, or some liberal major (gender studies, chicano studies, African American studies, women studies, and pretty much anything that ends in studies), you are very unlikely to actually get a job. . . . . "And no,education is a common responsability we have as a society to our children." Nope, it is the responsibility of individual parents. You have no responsibility in my children's education. And, I have no responsibility in your children's education. You educate your children however you see fit. And I'll educate my children however I see fit. . . . . "Institutions have been created to facilitate this.What the [f**k] do parents have to do with it?" Parents have the responsibility until their child is an adult. From that point the responsibility is exclusively on the student. They now have the responsibility to provide for their own education as they see fit. . . . . "The only people who should decide what education needs too look like are intelectuals and educators from all fields but most importantly academia.Not parents." Wrong. Not much else to say to that.

[@SalsaTiger83]

I will try to make this point, but I don't think anyone will understand it: In both free and "planned" markets, any growth follows an exponential curve, meaning something like 10% increase in value. However, planned economies tend to place their eggs in fewer baskets, because you generally have fewer people thinking about the strategy. And if these fewer people have a bad year, you have to start from a much lower starting point next year. I believe that is one reason why communists fail

[@SalsaTiger83]

@eydos the world is certainly not hell (for me at least it isn't, and I am not rich). Also many open source products are VC-funded, and development of Linux is mainly undertaken by paid developers.... It's a lot more complicated...

[@sonnybrown4758]

One thing I'd like to say is many free market economists would argue that monopolies are really only enabled by government. The railroads for instance. Leland Stanford used his political connections to have states pass laws to stop competition against his Central Pacific Railroad. These are not market entrepreneurs they are political entrepreneurs. Or neomercantilists. Using the state to build monopolies has built a soft form of fascism in the US called Croney Capitalism or Corporatism.

[@BlueGiant69202]

It's not too bad a start. The word "socialism" is substituted here mostly for Russian Communism and its totalitarian system so it might be better to use the word "communism" instead of "socialism". No mention is made of democratic countries with social programs or variations on capitalist enterprises such as Mondragon in Spain. No mention is made of extreme right wing capitalist countries or capitalist enterprises in Banana Republics. See "False Economy" by Alan Beattie as well.

[@AxlGuitarMaster94]

capitalism is the economical system that clearly and with proof makes the rich richer and the poor poorer... thus extending social differences and being responsible for a great deal of society's problems, like violence and inequality... does that seem fair to you? Oh and i am just expressing my opinion here no intention to offend anyone at all....

[@noxure]

What's the difference between "old money" and being royalty? Nothing, that's exactly the reason why they're so smug about it.

[@ese_cholito]

I hope Sal does a piece on Anarcho-Capitalism, and the disperse of monopolies through supply/demand

[@SalsaTiger83]

@AxlGuitarMaster94 And that's what I don't believe. For Technology to be that highly developed you need constant economic growth. In communism, empirically, this growth is severely lower. My explanation for this is that production is managed/controlled by much fewer people than in capitalism (except for the monopoly case, which we try to avoid at all costs). As soon as somebody screws up, a significantly larger portion of the economy is wiped out, the wealth slides back a lot.

[@mirandansa]

A1) You are mixing up "wage" with "compensation". A wage is a type of remuneration, and remuneration is a type of compensation. While a compensation can mean any pay, a wage is specifically the remuneration an employer pays an employee for their work measured by the amount of time/task/product. A2) You are changing your point. You said people "never starve to death because there are charities"; I say there are people who are starving to death despite all the charities. It's a fact.

[@JokersAce0]

@Mofostrobujo Monopolies maintain barriers to entry. They may have had the competitive advantage during the time of their ascension (under the assumption that there was actually competition at the time), but the barriers they build up prevents other firms from competing with them. Microsoft isn't as much of a true monopoly whereas a local gas and energy company who owns the only infrastructure to provide the product in its region is.

[@Amaroq64]

It would be very difficult for a monopoly to exist in a real Capitalism. But the company would have to be really good and efficient to get to that point. In which case, they would have had to raise our standard of living a lot. A monopoly in a real Capitalism is a force of good, not evil. And even once they become a monopoly, they don't get to relax, ever. There will always be potential competitors nibbling at the edges, just waiting for an opportunity to cut into their market.

[@elmundodefer]

there's no such thing as liberty in either systems. There's lots of people deciding many aspects of your life for you right now. And there's little you can do about it. Maybe not knowing this, is a way feeling the "liberty". Because in the end, that's what Liberty is. A sensation.

[@2leet2cheet]

"Sitting on your ass living off interest"...IS NOT POSSIBLE..To live off the interest you need to invest in something/someone in the first place. You provide CAPITAL to an entrepreneur with the agreement of a set amount of interest. If you make foolish investments then you LOSE money. Ever heard the sang "A fool and his money are soon parted"?

[@SalsaTiger83]

@Melthornal Well, most of the time the best product is favored by the market. Your statement "regardless of the circumstance" is a basic flaw in your logic: A model is a good model because it is more useful than the alternative, and it is not disproven by finding some data points that won't fit. You basically ignore factors like chance or complexity and blame their effect on some evil coporations....

[@davidhuynh3393]

well this greatly paints a clear picture thx!

[@SalsaTiger83]

@TheGstar1985 That's not capitlastic versus socialistic. It's not even really altruistic, because humans derive great satisfaction and pleasure from a sense of contribution. As I said before, I believe he even maximised the income he can derive from his videos by the way he does them free. You wouldn't be able to charge much for the videos (many have failed at that before), and now he has a solid salary, his impact is growing and he can also pay for staff. No socialism in this perspective....

[@HiroshiT34]

The problem is too many governments go to one way or the other, balance is the key!

[@supriya55]

so i just hit upon y video learning works. we have short attention spans. and even though your lectures are interesting, i find myself spacing out or distracted by other thoughts at times, so i just move the cursor back to the last thing i really remember you saying, to the point that i actually absorbed. and so i don't miss anything.

[@SalsaTiger83]

@Solthiel and you'd want to avoid these problems exactly how? Alternatives to capitalism normally revolve around state-planned production and assumes that the planning is done with an efficiency that has never been achieved by government officials and only rarely on a corporate level. That means you can't avoid occasional misdevelopments in markets, even though financial markets keep quite close to efficiency in the current system.

[@Amaroq64]

I guess it could be a problem of interpretation and context then. In my experience, whenever there seems to be a problem with capitalism, looking at a deeper and wider context usually reveals some statist meddling that caused the problem. But most people only see what's in front of them and they just blame capitalism.

[@richardmonson8657]

The word fair is often used in place of the word equitable and is a poor substitute in most cases. The capitalist and socialist spectrum is bounded by equality on one end and equitability on the other. Equality is achieved through redistribution, while equitability is achieved through innovation and determination. The former cannot even exist without the latter. The goal for government and society should be to ensure the needle along this spectrum is never so far from the right as to create a class of citizenry with democratic power to keep pushing the needle to the Left.

[@bnew241]

in america the government, through taxes provides basic education, police, and fire protection services, plus others, which is done for the good of society as a whole, but when it comes to health care everyone is left up to there own devices, does this mean that health care isn't a societal issue and education is? or something else. I am beginning to thing something else is at hand.. and my guess is rich health care providers and rich insurer's.

[@Solthiel]

Sal, I'm very glad you made this video and I'm pleased with your objectiveness on the matter. However, I must say that you avoided some very deep systemic problems with capitalism. These involve situations where competition actually just makes two half-baked products that form a market dichotomy, the emergence of global cartels, lack of accountability in corporate leadership, fiscal hatred of RnD, and arbitrary pay scales. I would go on, but here comes the character limit.

[@TheRoomforImprovement]

Solthiel What’s RnD?

[@NinaPenson_13]

@@TheRoomforImprovement Research and Development

[@elmundodefer]

I agree with a maximun of inheritable wealth! Also agree with the consecuences of removing incentive. Maybe I was not clear, but I didin't mention anything about removing incentive. (I mean, I suggested removing inheritance. I don't see how inheritance would be incentive to innovation). On the other hand, is a great idea to let the relatives get some of the wealth. At least, for instance, enough for not having to rent a place to live. Or some limited amount of cash per relative.

[@alainarnaud9528]

All that talk about capitalism is good if you live in a first-world country, but what about 90% of the people in this world who live in third world countries? I know Americans don't give a shit about the rest of the world (they don't even know there are other countries out there) but even in the United States there are a lot of poor people who do not have the same opportunities. Capitalism is not a fair model.

[@Melthornal]

@SalsaTiger83 That argument is bogus. At no point is skill ever a required factor for success. Success in the marketplace is determined by a huge number of factors, one of which may sometimes be skill. But it is not required. Furthermore, there is certainly no trend towards higher skill. Are you trying to tell me McDonalds employs higher skilled chiefs than La Tante Claire? They make more money and have more capital, therefore they must.

[@Yakushii]

Hehe, one of the great debates of our time. It's great that you dare to put yourself out there :)

[@meanmanturbo]

Que? A capitalist is someone who own capital (which I think you do since I think you won some stocks, so you are technically correct...). I has nothing to do with ideology. It is entirely possible to be a capitalist communist.

[@TheEnepicanParty]

So please drop your attitude about free markets, capitalism, socialism, communism, inovation, incentive and wake up the the crumbling and devestated world around us.

[@lclarsen]

@JaysGOP I was not aware that anyone believed the majority of the world lived under fascism or anarchism. There's much more laissez faire going on in places like the Congo or Guatemala than in the US. Scandinavia consistently tops lists for quality of life. Neither of those types of examples prove that certain policies are always good or bad, but at least they should be a part of an honest assessment of comparative economics.