man your video's are very informative, last night i was researching communism and i was banging my head against the wall trying to understand it. when i watched your video, i was reassured, so thanks
And you shouldn't say you "cannot be pure capitalist".
The free market can provide education and healthcare.
We actually could allow people to die in the streets. Of course in a capitalist society if you don't like that happening you could always start a charity. Of course its much easier to force someone else to pay for it, but that's not exactly generous...
Equal opportunity is actually the stupidest idea ever embraced when described in its most literal form.
The ideal of equal opportunity is that no matter what you do your children will have as easy a time as the most successful person in the world.
This really gives you no incentive to do anything other then create children.
The beauty of capitalism is that even though there is not a level playing field, eventually the cream of the crop will rise to the top. Equal opportunity is actually wrong
be the product. So their shoe would have to be so innovative and desirable or cheap, that it would actually create incentives for innovations and competition for the competing shoe companies. So in my opinion a monopoly is a capitalist system would have to be so innovative and resourceful that it would create competition to meet it's standard. Shoe company x can't just magically beat it's competition and dominate the market without a great product that creates competition and jobs.
a monopoly is virutally impossible without government intervention and subsidies. IF that monopoly company, lets call it company x that you draw that dominates the market. (for lets say shoes) You say that they would dominate the market so firmly that they would not have to compete or innovate, which is a negative component of capitalism (what you say). But if they are a monopoly in a capitalist economny, their product; in this case shoes would ( please see next comment)
I'm sorry Sal, it is. The United States Economy rewards those with sociopathic dispositions. Who's willing to spend more hours away from the family and friends for the sake of money, knowing they may die tomorrow randomly? A schemer.
Who's willing to dedicate their life to egotistical calculation? To exploitation of legislative loopholes? To building a network of contacts to do all physical labor and paperwork for them?
@khanacademy I find it interesting that you support Capitalism, even though the khanacademy mentions right in its logo a "world-class" which Capitalism would utterly reject. In my own opinion, this "world-class" ideal is much more inline with, at least, the theories of Communism and Socialism.
It was good until you started advocating restrictions on market freedom. :P There would be no politicians funneling taxpayer money to their supporters if politicians did not take it upon themselves to redistribute wealth in the first place. A free market enables maximal honest competition to break up monopolies and is the enemy of crony capitalism. Mixing capitalism with even a little socialistic interventionism/central planning creates the corruption problems typically attributed to capitalism.
@ElasticGiraffe You said “honest competition”. Doesn’t “honest competition” require that you create some sort of Police force that will insure peaceful competition? Yet, if we in essence sell police enforcement to a community, wont we need some sort of progressive intake of wealth (not necessarily a progressive tax, but even just a “flat” percentage based tax.) Isn’t a system where the rich pay more, and the poor pay less, for the same service, a redistribution of wealth?
It seems to be that Communism always looks great on paper, but when applied to real life is almost always very authoritarian and oppressive. Capitalism isn't so hot either, though. They both pretty much suck!!!
Its not all about resource distribution but also job distribution. The last time employers were fighting over employees were in the sodding middle ages, so that situation is exceedingly rare. In most cases an employer will hire educated professionals to think for him and uneducated goons to work for him. This is how almost all corporations work today. When corps grow to this size its near impossible for lower corps to compete anyway, because they'll just be hired as employees instead.
I find it surprising that Sal aligns himself with capitalism given that the Khan Acadamy is a free service, providing education to all. Please correct me if I am wrong but I view that as a socialist thing to do.
@RhettConnelly there is nothing for free. Somebody has to pay for that service. Just because you are allowed to use something "for free: so to speak, it doesn't make it socialist. Socialism is demanding money for things you don't use and not intending to use. Or simply put, if give to all people a "free" pizza everyday, and demand 100 dollars for the service everymonth, doesn't matter you want a pizza or not, that is socialism.
@MaikUniversum I'm guessing that's a analogy to public healthcare. I don't really now enough on the subject to provide you with an argument. All I'm really interested in is a system that is unambiguously good. I think it would be founded on very simple ideas, but this has obviously never been achieved in human history.
@RhettConnelly you should look up into anarcho-capitalism then. It's the most simple, just and objective system for society to flourish without the violent state intervention. But if you want a system that can provide you an answer to all possible situations, then you won't find such system and it won't ever exist, actually, because humans are not angels, however, they are anot inherently bad creatures too.
@MaikUniversum This society wouldn't flourish. It will collapse into a Feudal age tyranny. Power is function of property, not of a governemnt control. In anarchocapitalism tremendous disparities in wealth can result and those owning more will oppress the rest using this same violence you run away from.
@MaikUniversum Ignorance? I have lived through it man, it's awful. I know it looks good on paper, but it is time to trow such childish dreams away. My solution - Capitalism with human face.
@MaikUniversum yes, it is a good old wisdom, forgotten by utopists as communists and anarchocapitalists. See Scandinavian countries and their welfare states for more concrete examples. and yes, every utopia looks pretty ugly when you live there...
Calling China a capitalist nation destroyed your credibility. We haven't lived in a pure capitalist nation since 1900 and no one has ever advocated for going back to that.
Communism is NOT a Meritocracy, ONLY the ELITE children GET a good education and no one from middle or lower classes would even be given a CHANCE to get educated enough to pass the test.
Stupid people inheriting wealth= the Communists and Saudi elite!
Typical "liberal" response to capitalism, without even properly defining what it is. "Yah, capitalism is pretty good, but what about monopolies? what about those who aren't educated? what about inequalities? what about pollution? what about people who inherit wealth? what about minimum wage?" By the end of all these qualifications, you end up with a mixed, government-regulated economy, on the verge of collapsing from indebtedness like the United States is today. Nuance means muddled.
@qtutoringhelps Just the fact that you label this video as a typical liberal response makes you seem pretty much brain dead, and then I look down and see your "read Ayn Rand" comment (like her mediocre philosophy pours all-knowing light on economics) , and I’m validated in my bias towards you =/
Can you explain how your ugly reply is anything other than a personal attack? ALL of the objections the creator of this video have been exhaustively and thoroughly answered by economists. I'd be happy to educate you in a Skype debate.
The kind of the objections raised in this video aren't typically raised by people who identify themselves as "liberals"? I've debated capitalism dozens and dozens of times with people and they always bring up the same groundless objections. As I said, if you want to debate this I'd be happy to school you.
@qtutoringhelps Here, last one, just because I'm helpful. I know you're a little older, so let me just point out a few things:
1. You're sounding like a creeper.
2. Youtube comments is not a chat room, replies work best in a 1:1, this also makes you look less crazy.
3. You're not saving the world, and not changing anyone's opinions. I'm sorry, its true.Being a D-bag on a decent video is "uncool". It seems you've found the correct realm for your type on youtube already =) stick w it buddy
"You're not saving the world, and not changing anyone's opinions. ..."
I'm not trying to save the world. What I am trying to do is demonstrate that you don't know what you're talking about, and I can prove that because you could never justify a single fundamental view you have on the subject at issue; which is why all you do is call people names.
I've never met a single person who calls Ayn Rand's philosophy mediocre who can honestly present and argue against it. Not a single person. It'd highly probably you haven't the slightest clue what capitalism is.
@qtutoringhelps That doesn't surprise me. From your youtube page, I'm sure you've built a nice world around yourself, and the people who surround you either agree with your perspective, or they're just passerbys whom you aggravate and provide short responses to your obnoxious extremism. "It'd highly probably you haven't" is hard to make out, but suggests a teeny tiny personal library, and limited reading on your part. Be assured, I've got "clues" about all sorts of neat stuff. =)
We have enough technology for no one to go hungry, die from most infectious diseases or work in slave conditions. However over a billion people are regularly hungry and tens of millions of people die each year from hunger/preventable diseases combinations. The vast majority of people work far harder than is necessary for jobs that aren't even socially necessary. Why shouldn't we address these problems directly? Ideology... aka "capitalism."
There is certainly not a global consensus in favor of capitalism, but the world lacks real democracy to translate the desires of the world's poor majority into policy. Most technological breakthroughs have been based on public funding... heavy regulation is often necessary to increase resource efficiency (such as vehicle MPG), workers/innovators work hardest for recognition not billion$ (which they can't access anyway...
@lclarsen Too bad that poor majority you mention lives in fascist/borderline anarchist states, NOT capitalist states, and the large majority of capitalist states feature standards of living for ALL people higher than they've ever been.
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.
@lclarsen Once again there is a fundamental misunderstanding of what capitalism actually means. Capitalism is not only an economic system, but is also POLITICAL system characterized by democracy, transparency and rule of law. Scandinavia, though much more socialist than the United States, is certainly still a mostly capitalist society. And Sweden, the country socialists herald as the greatest example of their ideology, has experienced an economic downturn since those policies were implemented.
I'm sorry, your definitions do not match common usage. Chile under Pinochet was considered not only capitalist but a textbook example approximating "pure capitalism." It was also one of the least democratic regimes in modern history. Govt transparency is wonderful, but certainly not a necessary condition for a capitalist system of ownership. I've read headlines for the last 50 years how Scandinavia's system is doomed. Their quality of life is/has remained at the top throughout.
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.
There seems to be a lot of bad blood against Khan... and life in general on this particular video.
So I hope no one minds over-much if I take this moment to thank Khan for attempting to divulge some level of comprehension into either theory! I could be woefully wrong, but the purpose of this video is to stimulate thinking, which Khan seems to do admirably in this and other videos.
To ask a question though, wouldn't mismanagement of resources by someone who, say, inherits wealth eventually be lost and come back to society? Or is there an "escape velocity" for wealth that, regardless of what you do, you simply have too much wealth to possibly lose any significant part of it? (Unless you literally try of course)
Also, monopolism is not a failure either. You have monopoly when one player is just better than the rest at providing goods and services at the best prices than the competitors would hope to achieve. If this monopoly were to fail to continue to innovate and provide best value, competitors would show up again. Ex. Microsoft losing market share to Apple in the OS market, mainly because of their disastrous Windows Vista.
@Mofostrobujo If it was simple as that, then it'd be perfect. Thing is, capitalism, when in its brute and sauvage form, is anti-democratic. See, several cases of monopolism nowadays are not because said provider is better, but because it found some questionable ways of preventing others to be competing with them - for instance, by forcing the state to make them the official and only provider allowed on said country. Many US companies did that to several (underdeveloped) countries.
@PaulHasyn You speak as though it is solely the fault of corporations that these countries are taken advantage of. The truth is, it is these countries' leaders that allowed the state to be raped and pillaged in exchange for financial gain. Then, there never was capitalism in these countries to begin with because it requires no market barriers to entry for any participant.
@Mofostrobujo Also, I'm sorry to inform you that your example is valid ONLY in rich countries such as the USA. The residents of underdeveloped countries (and even "in development" ones, in a less drastic degree), face the choice of either Windows or nothing at all. Isn't it monopolism? Where are the competitors? You north-americans need to look also outside your contry to talk about capitalism.
@PaulHasyn Well, assuming there are no barriers to entry, the competitors are in the shadows, keeping a check on MSFT. You seem to think that people in these countries should be entitled to better choices, but this is something that cannot be wished or regulated into existence. These countries need to become more capital intensive so that when their economy grows, their citizens can afford more choices. By the way, cloud computing may provide an alternative to these people. Capitalism at work.
@Mofostrobujo Monopolies hold prices as high as they can, thus increasing the cost of living. And because the price is high, production is down. Therefore under a monopoly we get less of the product/service. Monopolies are bad and thats why for the last 120 years we've had regulations against them.
@JaysGOP Companies only dream of being able to sell their products as high as they can. But it is not possible in the free market, because you invite competition. Take Standard Oil (Rockefeller's Company), he was selling kerosene for 1/10th the price of the competitors. When they were driven out of business, did he raise the price? NO. But kerosene prices rose after Standard Oil was dismantled on antitrust lawsuits, which were brought forth, not by the consumers, but by the loser companies.
@Mofostrobujo A monopolist manipulates price however he chooses by manipulating the supply. Because there are no competitors he can do this freely and will produce at a point where his profit is maximized. At said point, price is higher than factor cost, production is lower than it should be, and costs of production are higher than it should be. SO used the technique of lowering prices TEMPORARILY to drive smaller companies out of the local markets, and kept them high everywhere else.
@JaysGOP If somebody tried to drive me out of the market by predatory pricing, you know what I'd do? I'd suspend operations immediately and let the "monopolist" take the losses. I'd still have my assets, my inventory, and my wits. While I may not be profitable for a time, the other guy is making losses. In fact, I might even absorb some of the supply that he's giving away. That way, when he thinks he has won and raises prices. I'd enter the market again and make those losses permanent.
@Mofostrobujo Except once your out of the market, he raises his price, and once you go back in the market he undercuts you again. A monopoly is incredibly difficult to break without government intervention and no 19th century text about the evils of government will change that.
@JaysGOP I don't think you understand business. Even if your company is valued at billions and billions of dollars. A lot of that is stuck in hard assets. Companies keep just enough cash to operate the business on a day to day basis. if you engage in predatory pricing, you have NEGATIVE CASH FLOW, which will kill the business in a New York minute. So, if you use this tactic, expect to suffer greatly.
@Mofostrobujo What you fail to take into account is that the monopolist is only employing these price tactics in a small area to flush out local business. He has tons of assets to draw on and keeping prices temporarily low in one market is not going to bankrupt him. It will however bankrupt a smaller, local merchant which is why monopolies are so effective at keeping their monopolies.
@Mofostrobujo A true monopoly stretches beyond that. A true monopoly will leave no room for the competition even if they are better with their product than the co operation that holds the monopoly. You see in theory you'd think the 'market' would balance this out and prefer the quality product over the monopolised one. Reality is the monopoly forces certain choices since it has the power to eradicate the competition.
@Fangornmmc Cite one example in history where this has occurred. But your example has to come from a free-market monopoly. No special charters, no subsidies, no regulations or special decrees that would actually bestow power to this monopoly to force its products upon the population. The USPS doesn't count.
@Mofostrobujo Just one? Ok: the VOC (or translated to English Dutch east indian company) which was the biggest trading fleet in the golden age of the Netherlands. They had a monopoly on exotic goods from the 'new world' (aka America). And yes at the time there was a free-market, hell due to the VOC we got stocks in the first place. Which is a flagship for the free market. The very first stocks were basically investments into the VOC.
@Fangornmmc You really need to check your history then. Stocks were already a common thing by the time of the VOC. It started with mining companies. Also, there was nothing free-market about them. They were a creation of government. Legislation passed by all Dutch States General incorporated it, gave it a renewable monopoly on the east indies trade, granted it the authority to engage in battle with other merchant fleets, and its executives were appointed by the governors of the States General.
@Mofostrobujo But just for fun, here are some more: KPN which is a telecom company in the Netherlands used to dominate the market in telecommunications. There simply was no competition left, none. Or how about Standard Oil from Rockefeller, it had to be disbanded by the government because they too dsimply dominated the market.
It has happened in the past and its not unlikely it will happen again sometime, how about oil companies they will have to merge soon cause of alternative energy sources...
@Fangornmmc Yeah, let's have more fun. KPN was a government company which still retained its government granted monopoly on fixed-line telephony. Very free-market indeed.
Now Standard Oil was a free-market monopoly, but they never practiced the sorts of things you posted on your other comment. People were buying Standard Oil's products because they were the best. The kerosene they produced was cheaper and less flammable than the competition. No government decree forced them to do so.
@Mofostrobujo I think you didnt understand it, it was explained that if he becomes too powerful he can keep the prices very low or just get into the government and that way the other players wont have the slightest chance.
@Ducky888888 What's wrong with keeping prices too low? Don't you want cheaper stuff? Contrary to what other people think, undercutting competitors is only possible if you succeed in reorganizing your own resources so that your own production costs are lower; otherwise undercutting would only make you lose money. This whole notion of predatory pricing has long been debunked by all economists and is no longer viewed as true. Only the population at large still believes in it.
@Ducky888888 By the way, using the government to keep your own monopoly going is the most anti-free market you can ever get. Even Mr. Kahn himself acknowledges this is not Capitalism, but Crony-Capitalism. I call it Crapitalism.
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.
The tech industry is always a great example of the good merits of Capitalism simply because it's one of the few industries left where innovation outruns exploitation. In most situations, having a monopoly is more of a sign that you've paid off politicians to carry out your own interests than it's a sign that you're some genius innovator who deserves tons of money and people who will work for you, for dirt pay, forever.
@Npowell01 No, the technology industry is a great example of capitalism because it is the only industry left where government is minimally involved, so innovation is allowed to flourish. The fact that some corporations seek out favors from congress is not different than some dead beat people who seek to game the welfare system. One group pays with bribes, the other with votes. Why does capitalism get the blame then when it is clearly a failure of the political system?
Because it will always have to be paired with a political system. If it is incompatible with a political system, then that means it only works in an ideal state where people don't need government anymore.
Just like Communism doesn't work in real life because it was crafted for an ideal world where everyone is willing to share resources with their entire society.
Your question should be "Why does 'X' system of get the blame when it's clearly shitty humans that ruin everything?"
@Npowell01 That doesn't answer the question about why Capitalism gets the blame, and I think you're just straw-maning the argument by saying us "shitty humans" ruin everything. It's just the large majority of people in government, regardless of any political system. And it's not surprising that a lot of people are quick to blame the rich capitalist. After all, they're in the minority, and the government does a fantastic job in instilling this sentiment in our minds through school curricula.
Moreover, as an intelligent, innovative poor person who still finds it extremely hard to gather wealth from the simple fact that I'm constantly tired from work, education, and having to fend for my own and fulfill social obligations to people from the same economic rung as me, I find this constant notion I hear disgusting, the notion that we're all just a bunch of "deadbeats" looking for "handouts."
It's not that simple.
It's easy to gather more resources when you have them.
@Npowell01 I never equated deadbeat to poor people. That was your assumption. Look, a lot of poor people have been able to create wealth from nothing. Steve Jobs wasn't born rich, you know. In fact, More than 90% of the rich are self-made; with some of them coming from extreme poverty. Even in this economy, there are opportunities to create business. It's even easier to find them now thanks to the internet. However, you have to put in the extra effort, and this is where most just don't deliver.
Lobbyism is not a fault of capitalism; it is fascism, plain and simple. This kind of practice should be made illegal and anyone caught doing it jailed.
Regarding your use of the word fascism. "I do not think it means what you think it means." watch?v=G2y8Sx4B2Sk
World English Dictionary
fascism -
1. any ideology or movement inspired by Italian Fascism, such as German National Socialism; any right-wing nationalist ideology or movement with an authoritarian and hierarchical structure that is fundamentally opposed to democracy and liberalism
@LividImp You're right. I stand corrected. I meant to say fascist corporatism. However, in my defense, the U.S. seems fascist in many aspects, especially in the indoctrination of our youth by the public education system.
The most fascist thing about the US today that comes to mind is the "Patriot" Act. To that end, Sinclair Lewis reportedly once said, “When fascism comes to America, it will come wrapped in the flag and waving a cross.” Hardly the kind of actions of most teachers. My wife and I pay close attention to our boys' education, and all they ever do is teach the basics (they don't have time for anything else.) What exactly is this indoctrination you believe is going on? I don't see it.
o you bloody mufuck money is money whether old or new. people like you stand in que waiving your tails in front of capitalist to get some money. you dont qurstion this money is new or old
...continued: In those cases where capitalist incentives goes against peoples wellbeing or values you need socialist values to regulate the free market. I would be interesting to have a video about social democracy which in it's modern european form is a marrige between free market capitalism and socialist values through regulations of the market.
You touched a little on it in the end but I would have wanted a little more about where capitalist incentives goes against the good of the people. This is when you let the free market govern things that shouldn't be subject to the profit incentive. I'm talking about things like heathcare, military (like private military companys) etc. The capitalist incentives also don't protect things like the environment and other things that people might value...cont.
Bush reduced the corporate problem to "just a few bad apples" when in reality, the corporate entity has usurped the government, and therefore, the people... Obama has done literally nothing to fix this problem...
Hey dude, Bush 43 blew $1T on Iraq and Obama blew $1T on stimulus that was bribes to public service employee unions that gave kickbacks to the democratic party.
The whole GOAL is to monopolize. Take it from me. I'm a capitalist. You think I want other companies taking my business. It's basically open warfare. A silent gaming strategy.
This was REALLY biased. Capitalism has more good than socialism? No mention of the environment? He touches on lobbies and then focuses on inherited money? And governments that work with corporations in the way he is suggesting is, by definition, Fascism.
Capitalism is built on a series of very pervasive myths. "If you work hard, you'll acquire more capital" Utter nonsense... people in the west haven't seen salaries up in 20 years. On top of that, those who aren't working hard (failures IE BANKS) were handed money. Apparently, in capitalism... if you're hard working, it means you should pay for the risks the rich took. The reality, is that free markets and capitalism is currently responsible for MANY of the issues crushing people today.
@ShinEmperor I find it funny that capitalism allowed you to turn on your computer, log in to the internet, watch a free lesson on youtube, and then post such a venomous rant. I agree with you in that "work hard and you'll have wealth" is a myth, but that's not what capitalism is all about. Capitalism rewards those who create goods and services that people value. 1 out of every 10 entrepreneurs fail. Did all of them work hard? You bet, but only one created goods that people valued.
@TheJT33 Socialism essentially abolishes private property rights; Capitalism advocates private ownership. In that sense, they are opposites. In socialism the government owns the wealth, the people are -allegedly- supposed to own the government (we all know that most politicians are awful and don't do what the people want), and thusly the people own the wealth. Socialism is economics as well.
Wonder if you'll be as in favor of capitalism when socialism, much like communism in '81, collapses under the weight of global privatization pressures.
Of course capitalism requires government intervention. It's called upholding contracts. Wealth disparities are relative. The extreme poor in the United States live better than the upper classes in almost every nation.
Ultimately, Capitalism is an ethical issue. Who among us has the right to tell a person where he can place his money (property)?
Capitalism requires a moral character, that which the left refers to as "social issues" or it simply cannot be defined as capitalism.
@custer264 so true... I generally find that people with no idea of finance, math or bussiness like socialist ideas the best, even though they should know that they could not predict the effect of turning to socialism. I think Socialism as a movement is a good thing, because it keeps the more greedy capitalists on their toes. With countries like Venezuela or Bolivia turning socialist you should really think hard about worker welfare and health care...
@custer264 "The extreme poor in the United States live better than the upper classes in almost every nation." very untrue. and about the ethical issue, well it goes both ways. every choice you make about a form of government is an ethical issue and has pros and cons as far as improvement and damage to society. ultimately this is a choice between individual freedom and collective responsibility.
this video is just a disgrace. instead of trying to make give an unbiased acount of both philosophies, pros and cons etc., salman just admits he is biased, then continues to make a blatantly biased and unbalanced overview of the subject. as america is probably the only country in the world where "socialist" is considered a curseword, it's interesting to observe the timidness with which he describes some pros of socialism.
imagine a sportscaster honestly admitting a bias towards a certain team, and then narrating the game in a completely biased way- wouldn't you be annoyed? a reporter doing an unbalanced report on a subject? just because he's honest that he's biased (and we all are), doesn't mean it's appropriate.
@Hooya2 I came across this as spam for some reason. I really find it annoying that people abuse youtube's features simply to silence people who disagree with them. It is dishonest and obnoxious. I will flag this as "not spam" and upvote it, as there is nothing in this comment that is inherently off-topic and commercial.
Come on. Economics is one of those things where everyone thinks they're an expert. It was good of Salman to adress his bias from the start. It is called intellectual honesty. It's a better thing to do than to claim to be all-knowing.and in turn practice hypocricy. This video tries incredibly to give an unbiased account. I agree with you that he didn't cover socialism alot, but he highlighted some big problems that can happen within capitalism. This vid could do with a follow up.
Socialism and Communism is not innovative? No way! You are flying in our space ships. We are the Great Soviet People, who innovate more than any other nation.
Another big point - there is industrialisation that should have place before any innovation, otherwise there is nothing to innovate. You have nothing to innovate at the North Pole.
well, i just want to look at your presentation from another point of view, you say that the "old money" guy would not feel the need to be educated or innovative. I would like to argue against it with a very well known idiom - "a fool and his money are soon parted". a person who does not really deserve money will soon loose it. his empire of wealth will be taken away from him sooner or later and balance would be re-established once again. :-) it has happened several times in history.
You talked a lot about big wealth but I would have liked to hear more on the 'lower' side of the economy. That's when you really get into the government intervention in the form of taxation, financial support for studying/health care, unemployment - sometimes simply referred to as stealing by those who oppose it. It's an interesting discussion in which there are several viewpoints.
Eh, khan, if you're an inheritant, and you don't study, you won't keep your money, you should know this. And monopolies? You mean the opposite of competition? It's literally impossible, think monetary competition; i can't buy 5$ items twice with one 5$ bill. Read human actions, people.
THE US HAS SOCIALISM BECAUSE THE FED CONTROLS OUR MONEY. WHEN QE2 STOPS, INTEREST WILL RISE DRASTICALLY, WHICH TANK THE TEETERING HOUSING MARKET AND BANKRUPT THE BANKS, LEADING TO HYPERINFLATION. BUY SILVER AND PROTECT YOURSELF!!!!!!!!!!!!!!!!!!!!!
You may in fact achieve socialism this way, (assuming the number of shares conferred decision making power) although socialists would argue that generally workers do not have the means to do this sort of thing. Keep in mind, I am not arguing for Socialism, I am just trying to get the definition straight. You can read, "Socialism: A very short introduction" to get the basics. I think the one on capitalism is very interesting too. I think every political pundit should read both.
A free market monopolist can't hold their monopoly because the scarce resource of capital needed to maintain the monopoly, is in demand and subject to competition from direct competitors and/or alternative lines of productive activity. Great granddad is not compelled to bequeath his family. And those who inherit money and/or capital assets, often quickly lose it. 'Old money' loves socialism because government intervention reduces competition and/or risk.
You may in fact achieve socialism this way, but generally workers do not have the means to do this sort of thing, as a result of how capital is allocated in a society.
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.
@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.
@SalsaTiger83 To respond on how these problems should be avoided would be a very long response indeed. Each problem I listed likely has a different solution. But one thing is for sure, financial markets are NOT efficient, they are just cheating. This became more and more exposed as the economy collapsed under the weight of toxic CDOs, overhyped derivatives, and a long consolidation food chain leading all the way to investment banks. They inflated fake money and ruled our economy with it.
@Solthiel then you don't understand finance. Markets are overall efficient. You can find evidence for that if you look for it. Even more than you can find evidence for the opposite if you look really hard for both. The funny thing is: How can can you determine value more efficiently than the markets do?`Probably nobody can, because hey, they would be multi-billionaires right now... And without efficient valuation, the fudge-factor increases and you get a soviet economy...
@SalsaTiger83 Convenient. You're even aware that there are well supported opposing arguments to your position, yet if I don't take your side, that means I don't understand finance. This is becoming such a common trope in desperate capitalists I debate with. They constantly use Appeal to Authority without providing any actual counter-arguments. It humored me that you just proposed 'without efficient valuation...you get a soviet economy." Who doesn't understand finance again?
@Solthiel I try to avoid this "not agreeing / not understanding" bias, but in this case it is true. The problem is people who understand capitalism can show you from basic math to simple simulations from the ground up why there is no alternative to capitalism yet that would even come close to the current state of affairs. But socialists don't listen, they don't have the patience for this kind of reasoning, so they only get the "Appeal to Authority" part....
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
Financial markets arose because of the need to manage risk. That's all there is to it. Now in communist society there is still risk, but they haven't figured out how to manage it at all. For example, if you give someonen 100$ and let them bet on a coinflip, where they will win 2times the wager if they win, and they loose one time the wager in the other case. Most people go bankrupt in this game, even though there is 50% payoff. Understanding this is key to the communist/capitalist debate.
There is always greed regardless of what society you live in. Socialism gives a better platform for these rulers to drive down the living conditions of the common person which is ironic considering their economic principles preach "fairness". I can't believe there are governments like North Korea's for example where the higher ups in the government live in wealthy conditions and their subjects are forced to live in poverty and if they speak ill of the rulers, they will be sent to a work camp.
Before you begin deriving an opinion on this subject I highly recommend watching the following documentary films "Capitalism and Other Kids Stuff" and "Pyramid of waste: The light bulb conspiracy", "Capitalism Epic Fail!", and "The Corporation".
I think people make mistakes when they follow the writings of an academic about how things should be, rather than changing things naturally due to the time and circumstances. The people who fought for socialism in England were ages before Marx wrote his theories. I call his theories science fiction, because all people wanted was what makes the west a good place to live and work, such as workers rights, help with education and health care etc.
@SuzLa1 Actually, the US made its best strides with no workers rights, no help with education, and no health care. It was when the US "got help" that education standards have cratered, people are worst shape, and the standard of living has plateaued and gone down in the last 40 years.
Boston, in the 1700's, past London in standard of living coming from nothing to passing a great western city. So much for the chartists.
@trublu97 London is a strange place though, as one half live in the most expensive houses in the world and the other half are mostly immigrants looking for a better way of life. If it's so bad, why do people risk their life hiding in lorries hardly being able to breathe or move for miles just to get here?
@trublu97 I didn't say which system is better anyway, but was pointing out that people had to fight for things which some would consider socialism, such as education and workers rights that make the west a desirable place to live or work, so I wouldn't say any western nation is completely capitalist as if you were completely capitalist in the USA, you wouldn't have public education, public owned underground rail networks, trade unions etc.
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.
@SuzLa1 There was no pure capitalism in England. There never was. The government "encouraged" companies, which resulted in government using force if laborers refused to obey company decorum. England also had a national bank which automatically excludes it from being labeled "capitalistic".
btw i advocate something similar to germany's social market economy or the pre 80's us economy
jackinthebox96 6 days ago
man your video's are very informative, last night i was researching communism and i was banging my head against the wall trying to understand it. when i watched your video, i was reassured, so thanks
jackinthebox96 6 days ago
This was really good.
archedmandible 1 month ago
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Richard D Wolff should make some videos for Khan Academy :P
ZialusPT 1 month ago
And you shouldn't say you "cannot be pure capitalist".
The free market can provide education and healthcare.
We actually could allow people to die in the streets. Of course in a capitalist society if you don't like that happening you could always start a charity. Of course its much easier to force someone else to pay for it, but that's not exactly generous...
evan13579b 1 month ago
Equal opportunity is actually the stupidest idea ever embraced when described in its most literal form.
The ideal of equal opportunity is that no matter what you do your children will have as easy a time as the most successful person in the world.
This really gives you no incentive to do anything other then create children.
The beauty of capitalism is that even though there is not a level playing field, eventually the cream of the crop will rise to the top. Equal opportunity is actually wrong
evan13579b 1 month ago
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ZialusPT 1 month ago in playlist More videos from khanacademy
You can’t just purely have one kind of system…you need to incorporate whatever works in both system.
EthioGQ 1 month ago
be the product. So their shoe would have to be so innovative and desirable or cheap, that it would actually create incentives for innovations and competition for the competing shoe companies. So in my opinion a monopoly is a capitalist system would have to be so innovative and resourceful that it would create competition to meet it's standard. Shoe company x can't just magically beat it's competition and dominate the market without a great product that creates competition and jobs.
aaronon1 1 month ago
a monopoly is virutally impossible without government intervention and subsidies. IF that monopoly company, lets call it company x that you draw that dominates the market. (for lets say shoes) You say that they would dominate the market so firmly that they would not have to compete or innovate, which is a negative component of capitalism (what you say). But if they are a monopoly in a capitalist economny, their product; in this case shoes would ( please see next comment)
aaronon1 1 month ago
I Love how you draw :) you put it in such a simple way BTW thank you :)
eddiemperor 1 month ago
9:06
"I'm not saying this is happening everywhere."
I'm sorry Sal, it is. The United States Economy rewards those with sociopathic dispositions. Who's willing to spend more hours away from the family and friends for the sake of money, knowing they may die tomorrow randomly? A schemer.
Who's willing to dedicate their life to egotistical calculation? To exploitation of legislative loopholes? To building a network of contacts to do all physical labor and paperwork for them?
Npowell01 2 months ago
dude im a msaoist somthing you frogeting to menchen about
TheSupercat91 2 months ago in playlist History
@khanacademy I find it interesting that you support Capitalism, even though the khanacademy mentions right in its logo a "world-class" which Capitalism would utterly reject. In my own opinion, this "world-class" ideal is much more inline with, at least, the theories of Communism and Socialism.
NoahSV 2 months ago
I am viewer 34,001.
kimyuseung 2 months ago
why do ppl connect capitalism with Free market
many countries have Socialistic system in many ways but free market
other have capitalistic systems with limited free market
pay4cayray 2 months ago
Capitalism = Exploitation
237Michael 3 months ago 2
It was good until you started advocating restrictions on market freedom. :P There would be no politicians funneling taxpayer money to their supporters if politicians did not take it upon themselves to redistribute wealth in the first place. A free market enables maximal honest competition to break up monopolies and is the enemy of crony capitalism. Mixing capitalism with even a little socialistic interventionism/central planning creates the corruption problems typically attributed to capitalism.
ElasticGiraffe 3 months ago
@ElasticGiraffe You said “honest competition”. Doesn’t “honest competition” require that you create some sort of Police force that will insure peaceful competition? Yet, if we in essence sell police enforcement to a community, wont we need some sort of progressive intake of wealth (not necessarily a progressive tax, but even just a “flat” percentage based tax.) Isn’t a system where the rich pay more, and the poor pay less, for the same service, a redistribution of wealth?
AsmodeanSDAJ 3 months ago in playlist More videos from khanacademy
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Too many "he's" and not enough "she's"
billyram999 3 months ago
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billyram999 3 months ago
CAPITALISM ROCKS!!!
sammyjs1983 3 months ago
It seems to be that Communism always looks great on paper, but when applied to real life is almost always very authoritarian and oppressive. Capitalism isn't so hot either, though. They both pretty much suck!!!
Stevesrssrssrs 3 months ago
Its not all about resource distribution but also job distribution. The last time employers were fighting over employees were in the sodding middle ages, so that situation is exceedingly rare. In most cases an employer will hire educated professionals to think for him and uneducated goons to work for him. This is how almost all corporations work today. When corps grow to this size its near impossible for lower corps to compete anyway, because they'll just be hired as employees instead.
Langsorigingaleia 4 months ago
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I find it surprising that Sal aligns himself with capitalism given that the Khan Acadamy is a free service, providing education to all. Please correct me if I am wrong but I view that as a socialist thing to do.
RhettConnelly 5 months ago
@RhettConnelly there is nothing for free. Somebody has to pay for that service. Just because you are allowed to use something "for free: so to speak, it doesn't make it socialist. Socialism is demanding money for things you don't use and not intending to use. Or simply put, if give to all people a "free" pizza everyday, and demand 100 dollars for the service everymonth, doesn't matter you want a pizza or not, that is socialism.
MaikUniversum 1 month ago
@MaikUniversum I'm guessing that's a analogy to public healthcare. I don't really now enough on the subject to provide you with an argument. All I'm really interested in is a system that is unambiguously good. I think it would be founded on very simple ideas, but this has obviously never been achieved in human history.
RhettConnelly 1 month ago
@RhettConnelly you should look up into anarcho-capitalism then. It's the most simple, just and objective system for society to flourish without the violent state intervention. But if you want a system that can provide you an answer to all possible situations, then you won't find such system and it won't ever exist, actually, because humans are not angels, however, they are anot inherently bad creatures too.
MaikUniversum 1 month ago
@MaikUniversum This society wouldn't flourish. It will collapse into a Feudal age tyranny. Power is function of property, not of a governemnt control. In anarchocapitalism tremendous disparities in wealth can result and those owning more will oppress the rest using this same violence you run away from.
PopBogomil 1 week ago
@PopBogomil You are arguing from ignorance, but ok whatever.. what's your solution?
MaikUniversum 1 week ago
@MaikUniversum Ignorance? I have lived through it man, it's awful. I know it looks good on paper, but it is time to trow such childish dreams away. My solution - Capitalism with human face.
PopBogomil 1 week ago
@PopBogomil good old "looks good on paper, but in reality we must use violence". Anyway, what's your solution? Be more specific.
MaikUniversum 1 week ago
@MaikUniversum yes, it is a good old wisdom, forgotten by utopists as communists and anarchocapitalists. See Scandinavian countries and their welfare states for more concrete examples. and yes, every utopia looks pretty ugly when you live there...
PopBogomil 1 week ago
@PopBogomil is ti correct, that your solution is Scandinavian system?
MaikUniversum 1 week ago
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RhettConnelly 5 months ago
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RhettConnelly 5 months ago
Calling China a capitalist nation destroyed your credibility. We haven't lived in a pure capitalist nation since 1900 and no one has ever advocated for going back to that.
JaysGOP 5 months ago
You're confusing Communism with Soviet Communism; i.e. a degenerated worker's state.
omgiheartpie 5 months ago
Communism is NOT a Meritocracy, ONLY the ELITE children GET a good education and no one from middle or lower classes would even be given a CHANCE to get educated enough to pass the test.
Stupid people inheriting wealth= the Communists and Saudi elite!
thejihadresistance 5 months ago
Typical "liberal" response to capitalism, without even properly defining what it is. "Yah, capitalism is pretty good, but what about monopolies? what about those who aren't educated? what about inequalities? what about pollution? what about people who inherit wealth? what about minimum wage?" By the end of all these qualifications, you end up with a mixed, government-regulated economy, on the verge of collapsing from indebtedness like the United States is today. Nuance means muddled.
qtutoringhelps 6 months ago
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EndlessTurtles 5 months ago
@qtutoringhelps Just the fact that you label this video as a typical liberal response makes you seem pretty much brain dead, and then I look down and see your "read Ayn Rand" comment (like her mediocre philosophy pours all-knowing light on economics) , and I’m validated in my bias towards you =/
EndlessTurtles 5 months ago
@EndlessTurtles
Can you explain how your ugly reply is anything other than a personal attack? ALL of the objections the creator of this video have been exhaustively and thoroughly answered by economists. I'd be happy to educate you in a Skype debate.
qtutoringhelps 5 months ago
@EndlessTurtles
The kind of the objections raised in this video aren't typically raised by people who identify themselves as "liberals"? I've debated capitalism dozens and dozens of times with people and they always bring up the same groundless objections. As I said, if you want to debate this I'd be happy to school you.
qtutoringhelps 5 months ago
@qtutoringhelps Here, last one, just because I'm helpful. I know you're a little older, so let me just point out a few things:
1. You're sounding like a creeper.
2. Youtube comments is not a chat room, replies work best in a 1:1, this also makes you look less crazy.
3. You're not saving the world, and not changing anyone's opinions. I'm sorry, its true.Being a D-bag on a decent video is "uncool". It seems you've found the correct realm for your type on youtube already =) stick w it buddy
EndlessTurtles 5 months ago
@EndlessTurtles
"You're not saving the world, and not changing anyone's opinions. ..."
I'm not trying to save the world. What I am trying to do is demonstrate that you don't know what you're talking about, and I can prove that because you could never justify a single fundamental view you have on the subject at issue; which is why all you do is call people names.
qtutoringhelps 5 months ago
@EndlessTurtles
I've never met a single person who calls Ayn Rand's philosophy mediocre who can honestly present and argue against it. Not a single person. It'd highly probably you haven't the slightest clue what capitalism is.
qtutoringhelps 5 months ago
@qtutoringhelps That doesn't surprise me. From your youtube page, I'm sure you've built a nice world around yourself, and the people who surround you either agree with your perspective, or they're just passerbys whom you aggravate and provide short responses to your obnoxious extremism. "It'd highly probably you haven't" is hard to make out, but suggests a teeny tiny personal library, and limited reading on your part. Be assured, I've got "clues" about all sorts of neat stuff. =)
EndlessTurtles 5 months ago
@EndlessTurtles
The only thing I'm assured of is that you're a complete and utter vacuous tool.
qtutoringhelps 5 months ago
Read Ayn Rand to understand what capitalism actually means philosophically.
qtutoringhelps 6 months ago
Starbucks is a monopoly
fighter91 6 months ago
@fighter91 Starbucks is a monopoly and there are no other coffee shops in America or elsewhere. Oh, and Islam means peace.
dannidandannikins 6 months ago
We have enough technology for no one to go hungry, die from most infectious diseases or work in slave conditions. However over a billion people are regularly hungry and tens of millions of people die each year from hunger/preventable diseases combinations. The vast majority of people work far harder than is necessary for jobs that aren't even socially necessary. Why shouldn't we address these problems directly? Ideology... aka "capitalism."
lclarsen 6 months ago
There is certainly not a global consensus in favor of capitalism, but the world lacks real democracy to translate the desires of the world's poor majority into policy. Most technological breakthroughs have been based on public funding... heavy regulation is often necessary to increase resource efficiency (such as vehicle MPG), workers/innovators work hardest for recognition not billion$ (which they can't access anyway...
lclarsen 6 months ago
@lclarsen Too bad that poor majority you mention lives in fascist/borderline anarchist states, NOT capitalist states, and the large majority of capitalist states feature standards of living for ALL people higher than they've ever been.
JaysGOP 5 months ago
@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.
lclarsen 5 months ago
@lclarsen Once again there is a fundamental misunderstanding of what capitalism actually means. Capitalism is not only an economic system, but is also POLITICAL system characterized by democracy, transparency and rule of law. Scandinavia, though much more socialist than the United States, is certainly still a mostly capitalist society. And Sweden, the country socialists herald as the greatest example of their ideology, has experienced an economic downturn since those policies were implemented.
JaysGOP 5 months ago
@JaysGOP
I'm sorry, your definitions do not match common usage. Chile under Pinochet was considered not only capitalist but a textbook example approximating "pure capitalism." It was also one of the least democratic regimes in modern history. Govt transparency is wonderful, but certainly not a necessary condition for a capitalist system of ownership. I've read headlines for the last 50 years how Scandinavia's system is doomed. Their quality of life is/has remained at the top throughout.
lclarsen 5 months ago
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.
kajmobile 6 months ago
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Impavidius 6 months ago
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.
sonnybrown 7 months ago
There seems to be a lot of bad blood against Khan... and life in general on this particular video.
So I hope no one minds over-much if I take this moment to thank Khan for attempting to divulge some level of comprehension into either theory! I could be woefully wrong, but the purpose of this video is to stimulate thinking, which Khan seems to do admirably in this and other videos.
GotnozStyle 7 months ago
@Myself
To ask a question though, wouldn't mismanagement of resources by someone who, say, inherits wealth eventually be lost and come back to society? Or is there an "escape velocity" for wealth that, regardless of what you do, you simply have too much wealth to possibly lose any significant part of it? (Unless you literally try of course)
GotnozStyle 7 months ago
Also, monopolism is not a failure either. You have monopoly when one player is just better than the rest at providing goods and services at the best prices than the competitors would hope to achieve. If this monopoly were to fail to continue to innovate and provide best value, competitors would show up again. Ex. Microsoft losing market share to Apple in the OS market, mainly because of their disastrous Windows Vista.
Mofostrobujo 8 months ago 3
@Mofostrobujo If it was simple as that, then it'd be perfect. Thing is, capitalism, when in its brute and sauvage form, is anti-democratic. See, several cases of monopolism nowadays are not because said provider is better, but because it found some questionable ways of preventing others to be competing with them - for instance, by forcing the state to make them the official and only provider allowed on said country. Many US companies did that to several (underdeveloped) countries.
PaulHasyn 7 months ago
@PaulHasyn You speak as though it is solely the fault of corporations that these countries are taken advantage of. The truth is, it is these countries' leaders that allowed the state to be raped and pillaged in exchange for financial gain. Then, there never was capitalism in these countries to begin with because it requires no market barriers to entry for any participant.
Mofostrobujo 7 months ago
@Mofostrobujo Also, I'm sorry to inform you that your example is valid ONLY in rich countries such as the USA. The residents of underdeveloped countries (and even "in development" ones, in a less drastic degree), face the choice of either Windows or nothing at all. Isn't it monopolism? Where are the competitors? You north-americans need to look also outside your contry to talk about capitalism.
PaulHasyn 7 months ago
@PaulHasyn Well, assuming there are no barriers to entry, the competitors are in the shadows, keeping a check on MSFT. You seem to think that people in these countries should be entitled to better choices, but this is something that cannot be wished or regulated into existence. These countries need to become more capital intensive so that when their economy grows, their citizens can afford more choices. By the way, cloud computing may provide an alternative to these people. Capitalism at work.
Mofostrobujo 7 months ago
@Mofostrobujo Monopolies hold prices as high as they can, thus increasing the cost of living. And because the price is high, production is down. Therefore under a monopoly we get less of the product/service. Monopolies are bad and thats why for the last 120 years we've had regulations against them.
JaysGOP 5 months ago
@JaysGOP Companies only dream of being able to sell their products as high as they can. But it is not possible in the free market, because you invite competition. Take Standard Oil (Rockefeller's Company), he was selling kerosene for 1/10th the price of the competitors. When they were driven out of business, did he raise the price? NO. But kerosene prices rose after Standard Oil was dismantled on antitrust lawsuits, which were brought forth, not by the consumers, but by the loser companies.
Mofostrobujo 3 months ago
@Mofostrobujo A monopolist manipulates price however he chooses by manipulating the supply. Because there are no competitors he can do this freely and will produce at a point where his profit is maximized. At said point, price is higher than factor cost, production is lower than it should be, and costs of production are higher than it should be. SO used the technique of lowering prices TEMPORARILY to drive smaller companies out of the local markets, and kept them high everywhere else.
JaysGOP 3 months ago
@JaysGOP If somebody tried to drive me out of the market by predatory pricing, you know what I'd do? I'd suspend operations immediately and let the "monopolist" take the losses. I'd still have my assets, my inventory, and my wits. While I may not be profitable for a time, the other guy is making losses. In fact, I might even absorb some of the supply that he's giving away. That way, when he thinks he has won and raises prices. I'd enter the market again and make those losses permanent.
Mofostrobujo 3 months ago
@Mofostrobujo Except once your out of the market, he raises his price, and once you go back in the market he undercuts you again. A monopoly is incredibly difficult to break without government intervention and no 19th century text about the evils of government will change that.
JaysGOP 3 months ago
@JaysGOP I don't think you understand business. Even if your company is valued at billions and billions of dollars. A lot of that is stuck in hard assets. Companies keep just enough cash to operate the business on a day to day basis. if you engage in predatory pricing, you have NEGATIVE CASH FLOW, which will kill the business in a New York minute. So, if you use this tactic, expect to suffer greatly.
Mofostrobujo 3 months ago
@Mofostrobujo What you fail to take into account is that the monopolist is only employing these price tactics in a small area to flush out local business. He has tons of assets to draw on and keeping prices temporarily low in one market is not going to bankrupt him. It will however bankrupt a smaller, local merchant which is why monopolies are so effective at keeping their monopolies.
JaysGOP 3 months ago
@Mofostrobujo A true monopoly stretches beyond that. A true monopoly will leave no room for the competition even if they are better with their product than the co operation that holds the monopoly. You see in theory you'd think the 'market' would balance this out and prefer the quality product over the monopolised one. Reality is the monopoly forces certain choices since it has the power to eradicate the competition.
Fangornmmc 3 months ago
@Fangornmmc Cite one example in history where this has occurred. But your example has to come from a free-market monopoly. No special charters, no subsidies, no regulations or special decrees that would actually bestow power to this monopoly to force its products upon the population. The USPS doesn't count.
Mofostrobujo 3 months ago
@Mofostrobujo Just one? Ok: the VOC (or translated to English Dutch east indian company) which was the biggest trading fleet in the golden age of the Netherlands. They had a monopoly on exotic goods from the 'new world' (aka America). And yes at the time there was a free-market, hell due to the VOC we got stocks in the first place. Which is a flagship for the free market. The very first stocks were basically investments into the VOC.
Fangornmmc 3 months ago
@Fangornmmc You really need to check your history then. Stocks were already a common thing by the time of the VOC. It started with mining companies. Also, there was nothing free-market about them. They were a creation of government. Legislation passed by all Dutch States General incorporated it, gave it a renewable monopoly on the east indies trade, granted it the authority to engage in battle with other merchant fleets, and its executives were appointed by the governors of the States General.
Mofostrobujo 3 months ago
@Mofostrobujo But just for fun, here are some more: KPN which is a telecom company in the Netherlands used to dominate the market in telecommunications. There simply was no competition left, none. Or how about Standard Oil from Rockefeller, it had to be disbanded by the government because they too dsimply dominated the market.
It has happened in the past and its not unlikely it will happen again sometime, how about oil companies they will have to merge soon cause of alternative energy sources...
Fangornmmc 3 months ago
@Fangornmmc Yeah, let's have more fun. KPN was a government company which still retained its government granted monopoly on fixed-line telephony. Very free-market indeed.
Now Standard Oil was a free-market monopoly, but they never practiced the sorts of things you posted on your other comment. People were buying Standard Oil's products because they were the best. The kerosene they produced was cheaper and less flammable than the competition. No government decree forced them to do so.
Mofostrobujo 3 months ago
@Mofostrobujo I think you didnt understand it, it was explained that if he becomes too powerful he can keep the prices very low or just get into the government and that way the other players wont have the slightest chance.
Ducky888888 3 months ago
@Ducky888888 What's wrong with keeping prices too low? Don't you want cheaper stuff? Contrary to what other people think, undercutting competitors is only possible if you succeed in reorganizing your own resources so that your own production costs are lower; otherwise undercutting would only make you lose money. This whole notion of predatory pricing has long been debunked by all economists and is no longer viewed as true. Only the population at large still believes in it.
Mofostrobujo 3 months ago
@Ducky888888 By the way, using the government to keep your own monopoly going is the most anti-free market you can ever get. Even Mr. Kahn himself acknowledges this is not Capitalism, but Crony-Capitalism. I call it Crapitalism.
Mofostrobujo 3 months ago
@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.
JokersAce0 3 months ago
@Mofostrobujo you are comparing apples with oranges! microsoft only sell sowfware, apple sells software + hardware
pixelr0 3 months ago in playlist More videos from khanacademy
@Mofostrobujo
The tech industry is always a great example of the good merits of Capitalism simply because it's one of the few industries left where innovation outruns exploitation. In most situations, having a monopoly is more of a sign that you've paid off politicians to carry out your own interests than it's a sign that you're some genius innovator who deserves tons of money and people who will work for you, for dirt pay, forever.
Npowell01 2 months ago
@Npowell01 No, the technology industry is a great example of capitalism because it is the only industry left where government is minimally involved, so innovation is allowed to flourish. The fact that some corporations seek out favors from congress is not different than some dead beat people who seek to game the welfare system. One group pays with bribes, the other with votes. Why does capitalism get the blame then when it is clearly a failure of the political system?
Mofostrobujo 1 month ago
@Mofostrobujo
Because it will always have to be paired with a political system. If it is incompatible with a political system, then that means it only works in an ideal state where people don't need government anymore.
Just like Communism doesn't work in real life because it was crafted for an ideal world where everyone is willing to share resources with their entire society.
Your question should be "Why does 'X' system of get the blame when it's clearly shitty humans that ruin everything?"
Npowell01 1 month ago
@Npowell01 That doesn't answer the question about why Capitalism gets the blame, and I think you're just straw-maning the argument by saying us "shitty humans" ruin everything. It's just the large majority of people in government, regardless of any political system. And it's not surprising that a lot of people are quick to blame the rich capitalist. After all, they're in the minority, and the government does a fantastic job in instilling this sentiment in our minds through school curricula.
Mofostrobujo 1 month ago
@Mofostrobujo
Moreover, as an intelligent, innovative poor person who still finds it extremely hard to gather wealth from the simple fact that I'm constantly tired from work, education, and having to fend for my own and fulfill social obligations to people from the same economic rung as me, I find this constant notion I hear disgusting, the notion that we're all just a bunch of "deadbeats" looking for "handouts."
It's not that simple.
It's easy to gather more resources when you have them.
Npowell01 1 month ago
@Npowell01 I never equated deadbeat to poor people. That was your assumption. Look, a lot of poor people have been able to create wealth from nothing. Steve Jobs wasn't born rich, you know. In fact, More than 90% of the rich are self-made; with some of them coming from extreme poverty. Even in this economy, there are opportunities to create business. It's even easier to find them now thanks to the internet. However, you have to put in the extra effort, and this is where most just don't deliver.
Mofostrobujo 1 month ago
Lobbyism is not a fault of capitalism; it is fascism, plain and simple. This kind of practice should be made illegal and anyone caught doing it jailed.
Mofostrobujo 8 months ago
@Mofostrobujo
Regarding your use of the word fascism. "I do not think it means what you think it means." watch?v=G2y8Sx4B2Sk
World English Dictionary
fascism -
1. any ideology or movement inspired by Italian Fascism, such as German National Socialism; any right-wing nationalist ideology or movement with an authoritarian and hierarchical structure that is fundamentally opposed to democracy and liberalism
LividImp 7 months ago
@LividImp You're right. I stand corrected. I meant to say fascist corporatism. However, in my defense, the U.S. seems fascist in many aspects, especially in the indoctrination of our youth by the public education system.
Mofostrobujo 7 months ago
@Mofostrobujo
The most fascist thing about the US today that comes to mind is the "Patriot" Act. To that end, Sinclair Lewis reportedly once said, “When fascism comes to America, it will come wrapped in the flag and waving a cross.” Hardly the kind of actions of most teachers. My wife and I pay close attention to our boys' education, and all they ever do is teach the basics (they don't have time for anything else.) What exactly is this indoctrination you believe is going on? I don't see it.
LividImp 7 months ago
o you bloody mufuck money is money whether old or new. people like you stand in que waiving your tails in front of capitalist to get some money. you dont qurstion this money is new or old
jangbahadur1 8 months ago
FREE MARKETS CLEAR
truevoice08 8 months ago
capitalism ftw
dudecoolname 8 months ago
...continued: In those cases where capitalist incentives goes against peoples wellbeing or values you need socialist values to regulate the free market. I would be interesting to have a video about social democracy which in it's modern european form is a marrige between free market capitalism and socialist values through regulations of the market.
ingsve 8 months ago
You touched a little on it in the end but I would have wanted a little more about where capitalist incentives goes against the good of the people. This is when you let the free market govern things that shouldn't be subject to the profit incentive. I'm talking about things like heathcare, military (like private military companys) etc. The capitalist incentives also don't protect things like the environment and other things that people might value...cont.
ingsve 8 months ago
Bush reduced the corporate problem to "just a few bad apples" when in reality, the corporate entity has usurped the government, and therefore, the people... Obama has done literally nothing to fix this problem...
ProtectandServe21 8 months ago
The cause of all bad things is liberals and Khan is sounding like a liberal listening to NPR.
tnekkc 8 months ago
How could any dumb kid mis manage resourced worse than Obama has with the gov monopoly?
How has capitalism ever been as bad as Obama?
Obama acts like a king, but he is an incompetent boy.
tnekkc 8 months ago
@tnekkc Bush was much worse dude...
ProtectandServe21 8 months ago
@ProtectandServe21
Hey dude, Bush 43 blew $1T on Iraq and Obama blew $1T on stimulus that was bribes to public service employee unions that gave kickbacks to the democratic party.
Obama is spending $4T and taking in $2T.
Bush never did ANYTHING THAT stupid.
tnekkc 8 months ago
Nothing wrong with inheriting wealth.
What, should it be illegal to inherit intelligence or good looks too?
Children in here need to get over socialism. Tried, failed, capitalism has given you a high quality of life.
SPQRomantic 8 months ago
The capitalists fear what may not be purchased, for a trader cannot comprehend a thing that is priceless.
92451721921892113 9 months ago
Stupid people inheriting wealth = the bush family
foxychick6748 9 months ago 10
The whole GOAL is to monopolize. Take it from me. I'm a capitalist. You think I want other companies taking my business. It's basically open warfare. A silent gaming strategy.
kermitcintronsucks 9 months ago
This was REALLY biased. Capitalism has more good than socialism? No mention of the environment? He touches on lobbies and then focuses on inherited money? And governments that work with corporations in the way he is suggesting is, by definition, Fascism.
ShinEmperor 9 months ago 2
Capitalism is built on a series of very pervasive myths. "If you work hard, you'll acquire more capital" Utter nonsense... people in the west haven't seen salaries up in 20 years. On top of that, those who aren't working hard (failures IE BANKS) were handed money. Apparently, in capitalism... if you're hard working, it means you should pay for the risks the rich took. The reality, is that free markets and capitalism is currently responsible for MANY of the issues crushing people today.
ShinEmperor 9 months ago
@ShinEmperor I find it funny that capitalism allowed you to turn on your computer, log in to the internet, watch a free lesson on youtube, and then post such a venomous rant. I agree with you in that "work hard and you'll have wealth" is a myth, but that's not what capitalism is all about. Capitalism rewards those who create goods and services that people value. 1 out of every 10 entrepreneurs fail. Did all of them work hard? You bet, but only one created goods that people valued.
Mofostrobujo 7 months ago
Nice drawing 10:09 :]
fire9132 9 months ago
He treated Capitalism and socialism like they were opposites. Socialism is political, Capitalism is economical.
TheJT33 9 months ago 2
@TheJT33 Socialism essentially abolishes private property rights; Capitalism advocates private ownership. In that sense, they are opposites. In socialism the government owns the wealth, the people are -allegedly- supposed to own the government (we all know that most politicians are awful and don't do what the people want), and thusly the people own the wealth. Socialism is economics as well.
ReasonIsADivineGift 6 months ago
Wonder if you'll be as in favor of capitalism when socialism, much like communism in '81, collapses under the weight of global privatization pressures.
BoStevoD 9 months ago
@BoStevoD I think you don't got your facts straight...
sirvolders 9 months ago
NO MONETARY SYSTEM!
aresinnet 9 months ago
ANARCHY!
JustSolveIt 9 months ago
@JustSolveIt You must be a multiculturalist
1059232 9 months ago
@1059232 yeah :)
JustSolveIt 9 months ago
Of course capitalism requires government intervention. It's called upholding contracts. Wealth disparities are relative. The extreme poor in the United States live better than the upper classes in almost every nation.
Ultimately, Capitalism is an ethical issue. Who among us has the right to tell a person where he can place his money (property)?
Capitalism requires a moral character, that which the left refers to as "social issues" or it simply cannot be defined as capitalism.
custer264 9 months ago
@custer264 so true... I generally find that people with no idea of finance, math or bussiness like socialist ideas the best, even though they should know that they could not predict the effect of turning to socialism. I think Socialism as a movement is a good thing, because it keeps the more greedy capitalists on their toes. With countries like Venezuela or Bolivia turning socialist you should really think hard about worker welfare and health care...
SalsaTiger83 9 months ago
@custer264 "The extreme poor in the United States live better than the upper classes in almost every nation." very untrue. and about the ethical issue, well it goes both ways. every choice you make about a form of government is an ethical issue and has pros and cons as far as improvement and damage to society. ultimately this is a choice between individual freedom and collective responsibility.
orimilstein 9 months ago
this video is just a disgrace. instead of trying to make give an unbiased acount of both philosophies, pros and cons etc., salman just admits he is biased, then continues to make a blatantly biased and unbalanced overview of the subject. as america is probably the only country in the world where "socialist" is considered a curseword, it's interesting to observe the timidness with which he describes some pros of socialism.
orimilstein 9 months ago
@orimilstein Yeah, shame on him for stating his opinions and making value judgments while honestly admitting his biases.
Hooya2 9 months ago
imagine a sportscaster honestly admitting a bias towards a certain team, and then narrating the game in a completely biased way- wouldn't you be annoyed? a reporter doing an unbalanced report on a subject? just because he's honest that he's biased (and we all are), doesn't mean it's appropriate.
orimilstein 9 months ago
This has been flagged as spam show
@orimilstein "and then narrating the game in a completely biased way- wouldn't you be annoyed?"
I don't really listen to sports narrations, so I don't know.
Khan's commentary was interesting and raised valid points; I don't really care if he was biased.
Hooya2 9 months ago
@Hooya2 I came across this as spam for some reason. I really find it annoying that people abuse youtube's features simply to silence people who disagree with them. It is dishonest and obnoxious. I will flag this as "not spam" and upvote it, as there is nothing in this comment that is inherently off-topic and commercial.
exstntlstfrtn 9 months ago
@Hooya2 although i find the reply more argumentative for argument's sake, i'm not the one who flagged it as spam.
orimilstein 9 months ago
@orimilstein
Come on. Economics is one of those things where everyone thinks they're an expert. It was good of Salman to adress his bias from the start. It is called intellectual honesty. It's a better thing to do than to claim to be all-knowing.and in turn practice hypocricy. This video tries incredibly to give an unbiased account. I agree with you that he didn't cover socialism alot, but he highlighted some big problems that can happen within capitalism. This vid could do with a follow up.
DudeSpectre 9 months ago
Socialism and Communism is not innovative? No way! You are flying in our space ships. We are the Great Soviet People, who innovate more than any other nation.
Another big point - there is industrialisation that should have place before any innovation, otherwise there is nothing to innovate. You have nothing to innovate at the North Pole.
phpHanut 9 months ago
It seems to me that socialism contains all the good aspects of capitalism - along with a bit of balance.
TheSlowThinker 9 months ago
well, i just want to look at your presentation from another point of view, you say that the "old money" guy would not feel the need to be educated or innovative. I would like to argue against it with a very well known idiom - "a fool and his money are soon parted". a person who does not really deserve money will soon loose it. his empire of wealth will be taken away from him sooner or later and balance would be re-established once again. :-) it has happened several times in history.
mintoo2cool 9 months ago
You talked a lot about big wealth but I would have liked to hear more on the 'lower' side of the economy. That's when you really get into the government intervention in the form of taxation, financial support for studying/health care, unemployment - sometimes simply referred to as stealing by those who oppose it. It's an interesting discussion in which there are several viewpoints.
Squig2510 9 months ago
Eh, khan, if you're an inheritant, and you don't study, you won't keep your money, you should know this. And monopolies? You mean the opposite of competition? It's literally impossible, think monetary competition; i can't buy 5$ items twice with one 5$ bill. Read human actions, people.
ExquisiteDoom 9 months ago
Perhaps the answers lie in Buddhism?
smoothbanana 9 months ago
@smoothbanana yes, to attain perfect balance, is to attain perfection itself!
mintoo2cool 9 months ago
THE US HAS SOCIALISM BECAUSE THE FED CONTROLS OUR MONEY. WHEN QE2 STOPS, INTEREST WILL RISE DRASTICALLY, WHICH TANK THE TEETERING HOUSING MARKET AND BANKRUPT THE BANKS, LEADING TO HYPERINFLATION. BUY SILVER AND PROTECT YOURSELF!!!!!!!!!!!!!!!!!!!!!
FlipThatBond 9 months ago
You may in fact achieve socialism this way, (assuming the number of shares conferred decision making power) although socialists would argue that generally workers do not have the means to do this sort of thing. Keep in mind, I am not arguing for Socialism, I am just trying to get the definition straight. You can read, "Socialism: A very short introduction" to get the basics. I think the one on capitalism is very interesting too. I think every political pundit should read both.
jsymons1985 9 months ago
A free market monopolist can't hold their monopoly because the scarce resource of capital needed to maintain the monopoly, is in demand and subject to competition from direct competitors and/or alternative lines of productive activity. Great granddad is not compelled to bequeath his family. And those who inherit money and/or capital assets, often quickly lose it. 'Old money' loves socialism because government intervention reduces competition and/or risk.
charlessmyth 9 months ago
You may in fact achieve socialism this way, but generally workers do not have the means to do this sort of thing, as a result of how capital is allocated in a society.
jsymons1985 9 months ago
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.
Solthiel 9 months ago
@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.
SalsaTiger83 9 months ago
@SalsaTiger83 I'm not going to argue for or against its merits but you might want to examine something called "market socialism."
TheCareertalk 9 months ago
@SalsaTiger83 To respond on how these problems should be avoided would be a very long response indeed. Each problem I listed likely has a different solution. But one thing is for sure, financial markets are NOT efficient, they are just cheating. This became more and more exposed as the economy collapsed under the weight of toxic CDOs, overhyped derivatives, and a long consolidation food chain leading all the way to investment banks. They inflated fake money and ruled our economy with it.
Solthiel 9 months ago
@Solthiel then you don't understand finance. Markets are overall efficient. You can find evidence for that if you look for it. Even more than you can find evidence for the opposite if you look really hard for both. The funny thing is: How can can you determine value more efficiently than the markets do?`Probably nobody can, because hey, they would be multi-billionaires right now... And without efficient valuation, the fudge-factor increases and you get a soviet economy...
SalsaTiger83 9 months ago
@SalsaTiger83 Convenient. You're even aware that there are well supported opposing arguments to your position, yet if I don't take your side, that means I don't understand finance. This is becoming such a common trope in desperate capitalists I debate with. They constantly use Appeal to Authority without providing any actual counter-arguments. It humored me that you just proposed 'without efficient valuation...you get a soviet economy." Who doesn't understand finance again?
Solthiel 9 months ago
@Solthiel I try to avoid this "not agreeing / not understanding" bias, but in this case it is true. The problem is people who understand capitalism can show you from basic math to simple simulations from the ground up why there is no alternative to capitalism yet that would even come close to the current state of affairs. But socialists don't listen, they don't have the patience for this kind of reasoning, so they only get the "Appeal to Authority" part....
SalsaTiger83 9 months ago
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 9 months ago
Financial markets arose because of the need to manage risk. That's all there is to it. Now in communist society there is still risk, but they haven't figured out how to manage it at all. For example, if you give someonen 100$ and let them bet on a coinflip, where they will win 2times the wager if they win, and they loose one time the wager in the other case. Most people go bankrupt in this game, even though there is 50% payoff. Understanding this is key to the communist/capitalist debate.
SalsaTiger83 9 months ago
This has been flagged as spam show
There is always greed regardless of what society you live in. Socialism gives a better platform for these rulers to drive down the living conditions of the common person which is ironic considering their economic principles preach "fairness". I can't believe there are governments like North Korea's for example where the higher ups in the government live in wealthy conditions and their subjects are forced to live in poverty and if they speak ill of the rulers, they will be sent to a work camp.
bobbyewing311 9 months ago
Comment removed
bobbyewing311 9 months ago
Before you begin deriving an opinion on this subject I highly recommend watching the following documentary films "Capitalism and Other Kids Stuff" and "Pyramid of waste: The light bulb conspiracy", "Capitalism Epic Fail!", and "The Corporation".
trvsgrant1 9 months ago
I think people make mistakes when they follow the writings of an academic about how things should be, rather than changing things naturally due to the time and circumstances. The people who fought for socialism in England were ages before Marx wrote his theories. I call his theories science fiction, because all people wanted was what makes the west a good place to live and work, such as workers rights, help with education and health care etc.
SuzLa1 9 months ago
@SuzLa1 Actually, the US made its best strides with no workers rights, no help with education, and no health care. It was when the US "got help" that education standards have cratered, people are worst shape, and the standard of living has plateaued and gone down in the last 40 years.
Boston, in the 1700's, past London in standard of living coming from nothing to passing a great western city. So much for the chartists.
trublu97 9 months ago
@trublu97 London is a strange place though, as one half live in the most expensive houses in the world and the other half are mostly immigrants looking for a better way of life. If it's so bad, why do people risk their life hiding in lorries hardly being able to breathe or move for miles just to get here?
SuzLa1 9 months ago
@trublu97 I didn't say which system is better anyway, but was pointing out that people had to fight for things which some would consider socialism, such as education and workers rights that make the west a desirable place to live or work, so I wouldn't say any western nation is completely capitalist as if you were completely capitalist in the USA, you wouldn't have public education, public owned underground rail networks, trade unions etc.
SuzLa1 9 months ago
@SuzLa1
You're assuming unions are not allowed under a capitalistic society, and that is a false assumption.
KingRobbStark 9 months ago
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.
SuzLa1 9 months ago
@SuzLa1 There was no pure capitalism in England. There never was. The government "encouraged" companies, which resulted in government using force if laborers refused to obey company decorum. England also had a national bank which automatically excludes it from being labeled "capitalistic".
KingRobbStark 9 months ago