Yoga Face said:
It has been refuted in economic terms only in the sense of the economics of the day.
I don't know what you mean by "the economics of the day", economic theory applies equally to any ideological system. Economics is a science, not a political system.
Our understanding of economics improves over time, as does, say, our understanding of the theory of gravity.
You can apply economic analysis to socialism, communism, or capitalism. The same laws of supply and demand apply in each case, the laws of economics don't change with your ideology.
There may well be valid reaosns for rejecting economically optimal solutions to problems. One somewhat famous Canadian example would be native indians when Europeans first encountered them. Arguably, they did not respond to prices in the way that Europeans did. They did not produce more beaver fur when the price was higher, or less when the price was cheaper.
However, that's because they were more concerned with security than with profits. They were constantly fighting wars with one another, and they viewed forming strategic alliances with the Europeans as critically important to their military successes--they wanted the flow of arms, sometimes direct military support from European soldiers.
So they traded in order to form alliances; they did not form alliances in order to trade. As such they conducted enough trade to make the Europeans happy, and did not worry too much about price.
So political concerns can marginalize the laws of supply and demand, national security interests can over-ride them, as can ideology. But they're still there, and from an economics perspective your claim has been refuted--there is no reason to believe it is some sort of economically suboptimal solution.
Whether it suits your ideology is a different question, one that economics can't answer.
However I note you haven't advanced a single reason why your ideology is better than mine, or than the one that governs trade in Canada. You have said you think it is "obvious", but it is anything but obvious to me.
Can capitalism exist without a super rich investment class ?
Do you count the Canada Pension Plan, the Teacher's pension, and so on, as a super rich investment class? Most of the big capitalists in this country are aggregates of little people like you and me.
That it is unfair that there is a super elite rich class - even if they are an economic necessity which is an assumption I challenge - is obvious.
It is not in any way obvious to me that it's unfair, whereas, say, communism to me is obviously unfair.
The laws of capitalism have a surreal quality to them. Right now we have a need and the skills to satisfy them but it is not happening is it? The skilled are unemployed and desperate.
I am not aware of anybody in Canada who is desperate. I have been to countries where people are desperate. I have looked at families sitting next to the road with their kids on their laps and nowhere to go and nothing to eat and no idea what to do about it.
I have never, ever seen anyone like that around here. We have an extremely generous social safety net by world standards. Nobody in Canada starves unless they are mentally disabled to the point of being unable to feed themselves. What we call "hunger" in Canada is "well fed" in many places and refers more to a lack of proper nutrition rather than to an outright lack of sufficient calories for survival.
In terms of why there is unemployment--
There is unemployment because there is change. Technologies come along and force people to adapt, changing the skills that are in demand. We also, recently, have plainly suffered from some serious "frictions" as a result of the collapse of a good chunk of the American banking system.
I am of the view that appropriate amounts of regulation can reduce the frequency of events like this, and that there was an inappropriate amount of regulation in place on banks in particular, that lending got out of control, and too many people tried to live beyond their means.
Even if we resolved those problems though, technological change would still inflict unemployment on us. That is not some feature of capitalism--that is a feature of change. When you develop cars you no longer have so much need for people to look after horses. And so on.
In Canada we have a system that affords people a lot of opportunity to adjust to changing realities, and while they may not be too comfortable during periods of adjustment, neither do they starve.
One point worth making---
Unions have made our economic situation MUCH worse. They have lobbied for barriers to trade, and government support for unsustainable industries. They have imposed barriers to the free flow of labour between nations.
This has prevented the wage gap between our nation and others from closing. A job that pays $1/hr in other countries pays $15/hr here, and it is not sustainable.
Had we not had "protections" in place this gap would have closed. We would have adjusted to reality slowly, over time. We would have found ways to cope with it, and devleoped strategies for enriching ourselves gradually over time.
Because we put it off, because we erected barriers to keep reality out, we now face a potential "dam bursting" sort of scenario where the change is no longer gradual--it can happen suddenly now, with massive factory closings, as reality bursts through our "protections" and sets things to where they should have been.
Rapid change like that is hard to adapt to, and by erecting those barriers to prevent globalization from performing it work, we've let the pressure build up so that what would have been slow gradual change now happens suddenly and catastrophically.
Unions are directly to blame for that--they were the #1 promotors of those barriers, which have now put us in such a precarious position.
