Re: Laissez-Faire Capitalism Discourages Altruism & Rewards Amoral People?

nini_pad@xxxxxxxxx wrote:

How long the situation was still
manageable Hoover just waited with the hope that his god "Invisible hand
of marketplace" will step in and solve the crisis.

Hoover never did anything of the kind.

Go back and read what he did. He start to intervene way too late.



The root cause was the fact that the average real wage did not keep step
with increase in productivity. This let very few money into the consumer
pockets, while accumulating all the wealth into the few superrich
pockets. They invested all this wealth in the hope that bigger fortunes
are to be made. Unfortunate for them, the consumers just didn't had
enough disposable income to buy the products of their investments. The
first recession triggered the collapse.

If that were true then why didn't prices simply fall to the point
where the goods could be sold?

Because the perfect elastic supply-demand curve it is a myth.
In real life they are sticky, have inertia. Greed is also involved.

There are cases when for a producer is more convenient to cut production
than to maintain it at the same level and cut prices. But doing so, it hurt
businesses having his employees as customers. This was the core stuff with
great depression. Every business owner look at his own interest, but by
doing so they hurt one another. And the population was at the center of
this idiotic behavior.

That is, there are situations into a system when it can not regulate itself.
The "invisible hand of market place" it is just a mythology for mentally
impaired to believe in it.

And why didn't the real wages keep up with the
increase in productivity?

Greed. The business owners said: "I INVESTED in machine, it is ME
responsible for increase in productivity, I have NO REASON to increase the
wages of the remaining workers. ". They even used the need for less
personal to put pressure on remaining workers to accept lower wages.

This destroyed the ballance in the system. Yes, there are things the market
can not handle by itself. For an economy to be stable is better to have an
average increase in wages matching the increase of the overall
productivity. But by market rules, this will never happen. The market rules
will always depress wages for every increase in productivity. Here is the
role of government to impose a minimum wage and keep it increasing with
the average productivity increase to keep the system stable.

If they didn't have enough money to buy new
stuff how did they have enough to play the market?

This is a 3 year old question :-)
Because of inequality, of course. If a business owners have 1000 workers
and fire 500 of them, but due to productivity increase he maintain
production, he get in his pocket the money workers lost.

The 500 workers will stop buying 1 pizza/day, but the business owner won't
start to eat 500 pizza/day to compensate for business. Pizza shop will get
in trouble and will fire a couple of workers too.

People have less money to buy new stuff but they (due to business owner)
have much money to invest and artificially boost the stock of the ... pizza
shop :-)

Yes, that is. Free market hurt itself whenever the inequality grow.

You're assuming too much.

No. it is the libertarian ideology that cloud your mind and refuse to accept
the facts. GD was a a general system failure of the unregulated free
market.


It is at least ridiculous to see exactly the wealthy idiots who gained
the most from FDR politics (left with their wealth and life) to be the
biggest critics of FDR. This just prove how less IQ we have into the
upper levels.

The politicies of FDR bankrupted the nation. Then throtled growth
and
far from preventing a communist takeover almost provoked one. Without
such idiocies the US would have been out of recession in 2 years at
most. In fact it took at least two terms to get out of it, and arguably
more.


This is just wishfull thinking or propaganda or rather both.


.

Relevant Pages