Why has Capitalism failed to produce optimal value everywhere?

[Fake Boris]

Sava was saying that capitalists are getting consumers to pay a lot more for something than it's worth and exploiting consumers. That's not synonymous with saying workers are exploited because consumers aren't a class since all human beings have to consume.

All human beings have to consume, however it is completely disingenuous to claim capital is simply deferred consumption. Capital will never be consumed in its totality.

[giblets]

You have to choose not to consume all of your income in the present in order to have capital, and in exchange you have the power to consume more in the future. I don't see how it's disingenuous to call that "deferred consumption". That's like saying it's disingenuous to call the US national debt "deferred taxation" just because the national debt will probably never be paid down to zero.

[Fake Boris]

That's not how it works in the real world.

Accumulated capital can indefinitely increase the intangible value of certain goods or assets. Either that, or it is lent until debt becomes untenable.

[giblets]

That's not how it works in the real world.

Accumulated capital can indefinitely increase the intangible value of certain goods or assets. Either that, or it is lent until debt becomes untenable.

You seem to be assuming that if available sound investments can't meet a certain threshold of profitability, people will just make stupid investments instead. I don't find that model of human behavior very convincing.

[Fake Boris]

You mean like subprimes?

[giblets]

People do lend to people with bad credit scores, they just demand higher interest rates to compensate for the risk.

[Fake Boris]

Credit bubbles always bust - this is an essential feature of the combination of profit and partial reserve banking.

[Hauldren Collider]

Credit bubbles always bust - this is an essential feature of the combination of profit and partial reserve banking.

If this is true, I highly encourage you to make a killing off of this by shorting some stocks.

[Aeson]

Well, knowing there will be an economic downturn at some point in the future is pretty easy, it's essentially a given due to human nature... timing is what makes it profitable. For all the glaring problems with Fake Boris' logic, he doesnt seem to be claiming the ability to predict the timing of the bursting of the bubble.

[ricketyclik]

Paiktis is such an awesome name. It's too Bad you Prefer Banana_Eater.

Ohhh, I thought it's Burrito_Eater.

[Kidlicious]

Credit bubbles always bust - this is an essential feature of the combination of profit and partial reserve banking.

You're arguing with people who don't understand the most very basic economic fundamentals.

[giblets]

Credit bubbles always bust - this is an essential feature of the combination of profit and partial reserve banking.

The concept of economic bubbles assumes things have inherent value independent of the market, can you prove that?

[Fake Boris]

The concept of economic bubbles assumes things have inherent value independent of the market, can you prove that?

No. All it takes for a bubble to burst is inability to repay debt, a factor that has nothing to do with any concept of objective value.

[Fake Boris]

You're arguing with people who don't understand the most very basic economic fundamentals.

I rarely agree with you, but you're correct on this.

[giblets]

No. All it takes for a bubble to burst is inability to repay debt, a factor that has nothing to do with any concept of objective value.

Debts are only impossible to repay if the lender had unrealistic expectations. Either:
1. The lender made an investment that was objectively worth less than what it costs
2. An unpredictable change in the market made the investment fail