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[GlyphGryph]

An economics professor at Berkely said he had rarely failed a single
student, but had once had a class in which most people passed but few learned anything.

The class (students) insisted that capitalism worked since everyone would be
motivated to work hard be rich, and a rising level of wealth would benefit everyone . The professor then said,
"OK, we will have an experiment in this class on capitalism."

"All grades will be competed for and everyone will work against each other to earn the highest grade."

After the first essays were graded the marks were awarded and were distributed across the class in the manner of a bell curve. Some students who had studied hard were upset that they got lower grades because wealthier students who had studied very little but had bought their essays got the available As.

As the second essay rolled around, most of the students who had studied hard
studied less in order to take on part-time jobs and buy quality essays. Some of the very brightest studied even harder to try and beat the quality of the purchased essays. The ones who had bought their essays in the first place didn’t study at all and got their parents to pay for even better essays to ensure they stayed ahead of the game. Three students who did study hard dropped out of the class altogether in order to write essays on commission for the wealthy students. The cost of essays rose and the number of students who could afford quality essays was low. Only a few people got an A and most got C’s

The richer students who didn’t care about their education were happy. The smart students were unhappy and exhausted from study and/or part-time work. Whether they studied or not they got consistently lower marks. The average students had dropped out to service the wealthier students’ demand for extremely high quality essays – which they could produce by working in teams.

By the time the marks were in for the third essay it was clear that the wealthier students had all the high marks while the best and brightest of the smart students could barely manage C’s The cut throat competition resulted in hard feelings massive distrust particularly between the students that produced their own work and those that relied on the work of others that they purchased.

In the end the smart students did poorly. The rich students did well and those who dropped out made money . The professor told them that capitalism would ultimately fail because competition means that people work against each other using whatever means necessary. This leads to some perceived benefits but ultimately bankrupts everybody.

[Truean]

An economics professor at Berkely said he had rarely failed a single
student, but had once had a class in which most people passed but few learned anything.

The class (students) insisted that capitalism worked since everyone would be
motivated to work hard be rich, and a rising level of wealth would benefit everyone . The professor then said,
"OK, we will have an experiment in this class on capitalism."

"All grades will be competed for and everyone will work against each other to earn the highest grade."

After the first essays were graded the marks were awarded and were distributed across the class in the manner of a bell curve. Some students who had studied hard were upset that they got lower grades because wealthier students who had studied very little but had bought their essays got the available As.

As the second essay rolled around, most of the students who had studied hard
studied less in order to take on part-time jobs and buy quality essays. Some of the very brightest studied even harder to try and beat the quality of the purchased essays. The ones who had bought their essays in the first place didn’t study at all and got their parents to pay for even better essays to ensure they stayed ahead of the game. Three students who did study hard dropped out of the class altogether in order to write essays on commission for the wealthy students. The cost of essays rose and the number of students who could afford quality essays was low. Only a few people got an A and most got C’s

The richer students who didn’t care about their education were happy. The smart students were unhappy and exhausted from study and/or part-time work. Whether they studied or not they got consistently lower marks. The average students had dropped out to service the wealthier students’ demand for extremely high quality essays – which they could produce by working in teams.

By the time the marks were in for the third essay it was clear that the wealthier students had all the high marks while the best and brightest of the smart students could barely manage C’s The cut throat competition resulted in hard feelings massive distrust particularly between the students that produced their own work and those that relied on the work of others that they purchased.

In the end the smart students did poorly. The rich students did well and those who dropped out made money . The professor told them that capitalism would ultimately fail because competition means that people work against each other using whatever means necessary. This leads to some perceived benefits but ultimately bankrupts everybody.

So, basic game theory and prisoner's problem?

We each stick to our story and the cops have nothing on us.
One of us rats the other out and the other goes to jail for a long time, will the rat gets little or no time.
We each rat each other out and we're both screwed.

Substitute the nouns, the ideas still work.

Then of course there's the route I took in college/law school: work multiple jobs, exhaust yourself, your health, and become bitter. I think that's kind of how this example ends too, come to think of it.

[Pnx]

It's a fun example but it ignores a lot of the pressures at work here to say, "we tried capitalism, it didn't work out." The perks to crowd sourcing wealth distribution are really too hard to ignore, we just need to control the ways in which it's done... you know, like with some kind of rules that make the wealth people get consistent and regular...
Maybe some kind of... regulations?

[Truean]

It's a fun example but it ignores a lot of the pressures at work here to say, "we tried capitalism, it didn't work out." The perks to crowd sourcing wealth distribution are really too hard to ignore, we just need to control the ways in which it's done... you know, like with some kind of rules that make the wealth people get consistent and regular...
Maybe some kind of... regulations?

Yups, regulations are good.

They also need to be carefully drafted and able to adapt though.

1.) If they are too stagnant and poorly drafted, then they will cause failures. The example is Regulation Q. This basically said that savings and loans could not pay above a certain interest rate on deposits (people holding money in savings accounts with them). When market interest rates went above this point, people stopped saving in savings and loans. A small crisis happened....

2.) If the regulations are too loose then people will just sidestep them. [insert a million relevant examples].

[GlyphGryph]

I'm actually going to rewrite: Here's my version

An economics professor at Berkely said he had rarely failed a single student, but had once had a class in which some students passed, though very few actually learned anything.

One semester, his students insisted that capitalism worked. Since everyone would be incentivized to work hard and obtain wealth, everyone would benefit from the increase in production. So the professor said, "Let us conduct an experiment, then, with this class as our laboratory."

"There will be a limited amount of grades to hand out - these grades must be competed for. Grades for any essay or assignment are transferable. I do not care how you accomplish your essays and assignments - all that matters are results. To incentivize regular good grades, every consecutive A will give you free points on all future tests. If you get a single failing grade, you will fail this class. One thing I don't support is plagiarism - a plagiarized essay is one that is identical to another essay I have received."

After the first essays were graded the marks were awarded and were distributed across the class. The material was new and difficult. Some students who had studied hard were upset that they received poor grades, having been beaten out by those students with wealth or social connections had managed to convince relatives to pull some strings and write the essay for them, or had purchased their essays outright. Since the essays were still unique, this was allowed. Some students failed, and dropped out of the class, while others accepted "loans" from the successful students to pull them just above the passing line. Since there were only a small number of passing grades available to the class, even some of the hardest workers had to accept the offer of loaned grades in order to pass.

As the second essay rolled around, most of the students who had previously studied hard stopped completely - instead, they picked up part time jobs, and used the income to purchase essays of their own that could compete. Some of the very brightest studied even harder to try and beat the quality of the purchased essays, especially knowing they would owe a few of their grade points on each essay to those students who loaned them points the first time around. The wealthy students repeated their previous success. Three students who did study hard dropped out of the class altogether in order to write essays on commission for the wealthy students. By working together, they could churn out very high quality essays in record time, at the cost of failing the class.

By the time the marks were in for the third essay, a pattern had become quite clear - the hardworking students needed to work ever harder just to get close to passing, since they owed a portion of each grade to the wealthy students. The wealthy students scores soared, since not only were they were still getting the bulk of the As, but thanks to the free points they were managing perfect As even after loaning out enough points for a few hardworkers to pass.

Finally, there was the final exam - The hardworkers did well, and the wealthy students did poorly. But the hardworkers owed so many points to the wealthy students that the wealthy student's poor grades weren't enough for them to fail the class, and many of the hardworkers still failed despite scoring highly on the test.

Ultimately, the hardworking students scraped by, failed early on by refusing to accept grade loans, failed due to burning out trying to pay back their grade loans, or failed on the final exam after paying back owed points. The wealthy students learned nothing, but did fairly well despite that by working off the points owed to them by the hard workers.  Those willing to work outside the system turned a profit collaborating on essays to sell to the wealthy, but obviously had to drop the class to do so. And the large swathe of students who struggled to understand the material failed early on, and don't really need to be considered.

The lesson here is that capitalism will ultimately fail, because it cements the advantages of those willing to abuse the system, while holding back those who work hard. Working outside the system or simply dropping out becomes an appealing alternative, and those who are both honest and hardworking are the ones who ultimately lose out.

[MonkeyHead]

Any system of governance/economics can be exploite for personal profit or gain to a certain extent. The trouble with Capitalistic systems is that this gain is so much greater, and so much more readily observable and availiable than any others that have the initial means to explot the system, without the aspects of other systems that prevent massive positive feedback loops.

Personally, the sooner the world adopts some kind of Parecon the better. Of course, this would no doubt be shouted down as "dangerous Red Commie thinking" by those that find the current system too much to thier benefit/liking.

[RedKing]

I love The Onion.

[Truean]

Any system of governance/economics can be exploite for personal profit or gain to a certain extent. The trouble with Capitalistic systems is that this gain is so much greater, and so much more readily observable and availiable than any others that have the initial means to explot the system, without the aspects of other systems that prevent massive positive feedback loops.

Personally, the sooner the world adopts some kind of Parecon the better. Of course, this would no doubt be shouted down as "dangerous Red Commie thinking" by those that find the current system too much to thier benefit/liking.

I think an honest problem with that is that abilities of people simply aren't equal or spread across different areas. I'm a good lawyer and accountant, but I'm not really that great at automobile mechanics etc. I'd be terrible at it and any work I would do on a car would be subpar at best.

Moreover, acquiring skills is a job in and of itself. If done well, then clearly there's a benefit. If done poorly.... There's a reason I spend at least 60-70 hours a week working and much of that is research. Sadly I'm not paid or appreciated for the overwhelming majority of this time.

One thing I do like about the theory (not the actuality which is different) of capitalism is how you're allegedly rewarded for working harder. The "Compensation for effort and sacrifice" section seems anti white collar to me and I'm not sure why "an office job is better than mining." I'd say an office job, done properly, is as monotonous as a factory job (which I've worked before). In order to keep track of corruption, you've got to fill out the same form 2349 times in one day or else there's no documentation.
It's very much like when I punched a drill press, except you're working in paper rather than metal.

Simply, how on earth do you compare who has the greater burden?

What I've always found odd is, you can implement this by buying enough shares of a corporation as a union. The problem is the difficulty in doing that and that you'd need a significant block of shares if not a majority.

[Levi]

Personally I think capitalism works great for most things, the bigger problem is government corruption and deregulation.  If the government did a better job of keeping corporations ethical and regulated, then I think it would be hard to find a more successful model than capitalism.

[Andir]

Personally, I think there  might be "over generalizing" (if that's even proper) how "bad" Capitalism is.  I'm not a rich person by any means, not yet.  I don't intend on being a multi-millionaire by any means.  I work as a developer for a small company (previously a big company) and I just bought my first house (at 33 years of age... not right out of college like most people) because I can now afford one.  It's not a huge house and I plan on paying it off in 10 years instead of waiting the full 30 in debt.  I also paid off my car early by cutting back on frivolous expenses allowing me to dump twice my mortgage payment on the house.  Reducing/eliminating my debt has allowed me to do much more with my life.  You just need to keep an eye on a goal and evaluate your purchases.

My parents were never "rich", and my brothers were never "rich."  We all started off in the lower/middle class.  We were told that if we wanted to go to college, we'd pay for it ourselves.  And I did.  Some of my family are still in the lower/middle but my parents decided that the best course of action is to buy up land and use that land for income (they let farmers farm the land for a cut of the profit.  They take care of land taxes and the rest is pure income.)  They started with a small stretch of land and invested the money each year into buying up more and more land.  They are currently sitting on over 330 acres and planning on more.  I wouldn't call them rich yet, but they pull in about 20-30,000 per year for nothing more than owning land and using it wisely.

Now, my Aunt wanted to do the same thing.  Unfortunately, she decided to spend all her income and never re-invest.  She ended up getting into trouble financially [not health, not divorce, just poor spending] and offered up her land to my parents who weren't exactly well situated to take over more land (about 50 acres) but they did it to help out my Aunt who needed the money at the time.  My Aunt is still "suffering" at a factory job and not saving/investing any of her money.  Of course, she complains at family gatherings how bad things are and how God must be punishing her for something (She's highly religious) but she just went out and bought a brand new truck...

So, the lesson I learned form this is that Capitalism DOES work if you don't do stupid shit with your money and spend it wisely by re-investing, saving, and generally living below your income.  You don't generally have to "work hard" either since owning land assets only require that you pay an accountant each year to do your taxes and maybe a lawyer from time to time to review contracts with farmers.

[MonkeyHead]

Yea Truean, that is the main limitation. However, I dont feel that being a Physicist and Educator entitles me to anything that any other productive citizen is entitled to - the only model that springs to mind of this on a large scale (and I know its not a great one) is that of the NHS over here in the UK - we all contribute to it based on our means (% of pay), and are all entitled to equal treatment from it.

In a Parecon, at some point someone (or some group of people) has/have to act as a body of authority, mandating what is more or less signifigant in terms of risk and reward. This is the point where exploitation can and probably would occur (unless a system of checks and balances are rigidly enforced, but by who - are they incorruptible?) where people (being human after all) take thier self intrests to mean more than some notion of a greater good. The advantage of a Parecon in this regard is that it should be self regualting with some lag time - if a monitoring body defines mining as a profession worthy of greater reward for thier risk, it will attract more people to work within it, and as a result a surplus of resources generated by it, and a defecit of others. This will no doubt neccitate a market adjustment to a model closer to some kind of economic equilibrium. Anyone acting in thier own self intrest (say by fixing the risk/reward for mining) might find thier economy lacking what they need to get by with little or no means to engage in trade. Now I am well aware that ths could be seen as a planned economy, but I see it more as "responding" rather than people saying "we need steel for some reason". Granted, Capitalism has this "sort of" built in with a survival of the fittest aspect, but where companies act in thier own self interest to ensure they keep making themselves rich, undesired leverage and control over markets seem inevitable (monopolies? De Beers, Microsoft...).

[Pnx]

So... basically people vote for what their share of the wealth is?

[ChairmanPoo]

You don't generally have to "work hard" either since owning land assets only require that you pay an accountant each year to do your taxes and maybe a lawyer from time to time to review contracts with farmers.

Ur gonna get ripped. By the farmers, and by the guys you hire to watch over them. You can't just "forget" about your inversions. Unless you're already obscenely wealthy, I guess, but maybe even then.

[GlyphGryph]

So, the lesson I learned form this is that Capitalism DOES work if you don't do stupid shit with your money and spend it wisely by re-investing, saving, and generally living below your income.  You don't generally have to "work hard" either since owning land assets only require that you pay an accountant each year to do your taxes and maybe a lawyer from time to time to review contracts with farmers.

Well, assuming nothing goes wrong and you're not hit by a natural disaster, anyways! Or that you don't suffer a debilitating illness. And you don't piss off someone who wants what you have or simply doesn't like you, and has the clout to get their way by making things difficult for you. And that you actually HAVE something to start with. And that the environment doesn't change in such a way so as to invalidate your investments before you break even. And that you aren't being deceived by the others you NEED to rely on to make investments in the first place. Or a whole host of other things.

Capitalism is nice when it works, but there's a lot of ways to make it stop working, and the sort of assholes that screw it up tend to be rewarded well by the system for doing so.

[ChairmanPoo]

Capitalism is nice when it works, but there's a lot of ways to make it stop working, and the sort of assholes that screw it up tend to be rewarded well by the system for doing so.

As we've seen with this subprime mortgages bullshit. The fuckers who came up with the so-called "financial alchemy" techniques got huge payoffs.

If this load of manure ends up accidentallying the world economy the joke will be on them, though.