I would like to preface by saying I am very sorry if this is the wrong community. This post touches on the core philosophy of Marxism, and I was hoping to get some insight.
My friend claims that the only reason companies produce things is because the working class, regular citizens, are asking for it; he does not get behind the idea of companies subconsciously persuading people to buy the items they sell. He believes that because your regular person wants a new phone, kitchen equipment, clothes, whatever - they are pushing capitalism forward and therefore it is the right / natural system.
How would you reason? I feel conflicted. On one hand, people do want things and there is almost always something to produce it for them, but on the other hand companies are steadily pushing for profit, using various tactics to drive consumerism. I would appreciate what you guys think and what you would answer, because according to him, capitalism only exists because demand exists. Whether that's true or not, I hope we can discuss. Cheers!
He's confusing market economies with capitalism.
Market economies can exist without capitalism.
A lot of people think that anything to do with socialism means a USSR style planned economy, but socialism can utilise markets. In fact, ironically, truly free markets can only exist under well regulated markets.
Capitalist corporations want as little regulation as possible so they can influence the markets and do other capitalist shenanigans, like selling at a loss until you've cornered the market and then hike prices up.
Capitalism is like the malignant form of market economies.
Would you mind elaborating on this point? I imagine, in a primarily socialistic society, exchange/trade would work provided that companies were nationalised and the workers owned the means of production. I would love more enlightenment though!
This still wouldn't mean they aren't in the market.
People have this weird notion of everything related to socialism being somehow planned and preset by the government. That's a planned economy, something communism utilises, but which isn't anywhere in the definition of socialism.
Socialism is defined by the government owning OR regulating the means of production.
So for instance the social democratic countries in the Nordics, while often described as "a mixed economy" are just very well regulated market economies. So well regulated in fact, you could call it socialism. And "social democracy" is a socialist philosophy.
I'm not one for false dilemmas, and the whole "socialism/capitalism" divide is one, as "pure" capitalism doesn't exist anywhere. Even the bastion of capitalism, the US, knows that without certain policies (which are arguably socialist in nature, although that doesn't mean the US is, just the policy), capitalism would fuck the economy up in the blink of an eye.
That's why they have antitrust laws.
Because that is what is needed for a free market. A free market is often defined simplistically as when only the price and quality of the product determine the market situation.
In a capitalist market though, that's never the case, as the companies/people behind those products can do other things as well. You could never compete with McD even if you made absolutely amazing food for half the price they do, since anytime you outperform them, they could just det up shop next to you and literally give away free food until you go bankrupt, because McD has >40 000 restaurants across the world, so losing money on one wouldn't matter to them.
Thus they wouldn't be influencing the market fairly through the supply and demand of that market, but by unfairly distorting the competition because of the capital they wield.
Capitalist markets always put profit on top of everything. Everything. A country (such as one of the Nordics) can still value profits, but if it's putting societal welfare, labour protections, etc above profits at any cost and regulating markets to achieve that, I'd say one could argue they are socialist, by academic definitions.
And oh boy am I excited to once again argue the people who get mad when I call Nordics socialist. I'm Finnish myself, btw, and while I recognise the "mixed" nature of our countries, and that we have a lot of people who are capitalists and try to get rid of the regulations, we still have a lot of regulations and welfare compared to most countries.
If you're genuinely interested, here
https://en.m.wikipedia.org/wiki/Market_socialism
Although the system we have in the Nordics isn't quite as... red as what is most commonly thought of as "market socialism", but as the article mentions:
For one our liquor stores are all the same, "Alko", and Alko Oyj (OYJ = PLC) is owned by the government. Maintains excellent quality for liquor stores, and even makes a profit.
It has public shareholders who get dividends. Still owned and operated by the government though. Doing great, as well. And a great place to work, I hear. Definitely nothing like, say, LIDL, who hire inexperienced workers who's rights they ignore and then exploit. Which sort of shows me the core difference in what I'm saying.
The difference isn't much, but still matters a lot.
So essentially if companies just stopped being greedy, everyone just got a reasonable amount of profit instead of "the most we can get by any means necessary", we'd have a really good system already. One in which plane companies wouldn't be trying for profits so desperately they leave out bolts from doors and then have to assassinate people who blow the whistle on their bullshit.
Thank you for this excellent writeup.
Thank you for appreciating it. Feels guud
Extending for clarity: Capitalism is where owners extract more value from a business than they put in through work or risk. This is not to say that ownership alone should receive no compensation; putting your own capital at risk by investing it into a business should get some compensation - provided that the risk is real.
The problem arises when that compensation is wildly greater than the "risk" or work provided, because that unearned differential has to come from somewhere, and it invariably comes from shortchanging non-owner labor. Say you have a labor force of 100 people, but as a group, you're only compensating them 80% (ha) of what their labor is actually worth, and diverting the 20% into your own compensation. This means that, as a group, you have 80 employees and 20 slaves, or that each worker, on average, is 20% slave.