This is not the end of capitalism

Tuesday, November 4th, 2008

Some of the comments on my last post on the economic unwinding of 2008 suggested that people think we are witnessing the end of capitalism and the beginning of a new socialist era.

I certainly hope not.

I think a world without regulated capitalism would be a bleak one indeed. I had the great privilege to spend a year living in Russia in 2001/2002, and the visible evidence of the destruction wrought by central planning was still very much present. We are all ultimately human, with human failings, whether we work for a state planning agency or a private company, and those failings have consequences either way. To think that moving all private enterprise into state hands will somehow create a panacea of efficiency and sustainability is to ignore the stark lessons of the 20th century.

The leaders and decision makers in a centrally-planned economy are just as fallible as those in a capitalist one – they would probably be the same people! But state enterprises lack the forces of evolution that apply in a capitalist economy – state enterprises are rarely if ever allowed to fail. And hence bad ideas are perpetuated indefinitely, and an economy becomes dysfunctional to the point of systemic collapse. It is the fact that private enterprises fail which keeps industries vibrant. The tension between the imperative to innovate and the consequences of failure drives capitalist economies to evolve quickly. Despite all of the nasty consequences that we have seen, and those we have yet to see, of capitalism gone wrong, I am still firmly of the view that society must tap into its capitalist strengths if it wants to move forward.

But I chose my words carefully when I said “regulated capitalism”. I used to be a fan of Adam Smith’s invisible hand, and great admirer of Ayn Rand’s vision. Now, I feel differently. Left to it’s own devices, the market will tend to reinforce the position of those who were successful in the past, at the exclusion of those who might create future successes. We see evidence of this all the time. The heavyweights that define an industry tend to do everything in their power to prevent innovation from changing the rules that enrich them.

A classic example of that is the RIAA’s behaviour – in the name of “saving the music industry” they have spent the past ten years desperately trying to keep it in the analog era to save their members, with DRM and morally unjustifiable special-interest lobbying around copyright rules that affect the whole of society.

Similarly, patent rules tend to evolve to suit the companies that hold many patents, rather than the people who might generate the NEXT set of innovative ideas. Of course, the lobbying is dressed up in language that describes it as being “in the interests of innovation”, but at heart it is really aimed at preserving the privileged position of the incumbent.

In South Africa, the incumbent monopoly telco, which was a state enterprise until it was partially privatized in 1996, has systematically delayed, interfered, challenged and obstructed the natural process of deregulation and the creation of a healthy competitive sector. Private interests act in their own interest, by definition, so powerful private interests tend to drive the system in ways that make THEM healthier rather than ways that make society healthier.

Left to their own devices, private companies will tend to gobble one another up, and create monopolies. Those monopolies will then undermine every potential new entrant, using whatever tactics they can dream up, from FUD to lobbying to thuggery.

So, I’m a fan of regulated capitalism.

We need regulation to ensure that society’s broader needs, like environmental sustainability, are met while private companies pursue their profits. We also need regulation to ensure that those who manage national and international infrastructure, whether it’s railways or power stations or financial systems, don’t cook the books in a way that lets them declare fat profits and fatter bonuses while driving those systems into crisis.

But effective regulation is not the same as state management and supervision. I would much rather have private companies managing power stations competitively, than state agencies doing so as part of a complacent government monopoly.

Good regulation is very hard. Over the years I’ve interacted with a few different regulatory authorities, and I sympathise with the problems they encounter.

First, to be an effective regulator, you need superb talent. And for that you need to pay – talent follows the money and the lights, whether we like it or not, so to design a system on other assumptions is to design it for failure. My ideal regulator is an insightful genius working for the common good, but since I’m never likely to meet that person, a practical goal is to encourage regulators to be small but very well funded, with key salaries and performance measures that are just behind the industries they are supposed to regulate. Regulators must be able to be fired – no sense in offering someone a private sector salary and public sector accountability. Unfortunately, most regulators end up going the other way, hiring more and more people of average competence, that they become both expensive and ineffective.

Second, a great regulator needs to be independent. You’re the guy who tells people to stop doing what will hurt society; it’s very hard to do that to your friends. A regulatory job is a lonely job, which is why you hear so many stories of regulators being wined and dined by the industries they regulate only to make sure they don’t look too hard in the back room. A great regulator needs to know a lot about an industry, but be independent of that industry. Again, my ideal is someone who has made a good living in a sector, knows it backwards, can justify their high price, but wants to make a contribution to society.

Third, a great regulator needs to have teeth and muscle. It has been very frustrating for me to watch the South African telecomms regulator get tied up in court by Telkom, and stymied by government department inadequacy. Regulators need to be able to drive things forward, they need to be able to change the way companies behave, and they cannot rely on moral suasion to do so.

And fourth, a regulator has to make very tough decisions about innovation, which amount to venture capital decisions – to make them well, you have to be able to tell the future. For example, when an industry changes, as all industries change, how should the rules evolve? When a new need for society is identified, like the need to address climate change early and systemically, how should the rules evolve? Regulators need to move forward as fast as the industries they regulate, and they need to make decisions about things we don’t yet understand. And even when you regulate, you may not be able to stop an impending crisis. It’s very easy to criticize Greenspan for his light touch regulation on hedge funds and derivatives today, but it’s not at all clear to me that regulation would have made a difference, I think it would simply have moved the shadow global financial system offshore.

So regulation is extremely difficult, but also very much worth investing in if you are trying to run a healthy, vibrant, capitalist society.

Coming back to the original suggestion that sparked this blog – I’m sure we will see a lot of failed capitalists in the future. Hell, I might join their ranks, I wouldn’t be the first ;-). But that doesn’t spell the end of capitalism, only the opportunity to start again – smarter.

129 comments:

  1. informednetworker.com says: (permalink)
    November 4th, 2008 at 1:17 pm

    This is not the end of capitalism…

    The failures of capitalists are not the same as the failure of capitalism. Despite the hardships wrought by mistakes in private financial institutions, we are still better off with private industry leading the way, as long as it is well regulated….

  2. buzz says: (permalink)
    November 4th, 2008 at 1:36 pm

    Mark Shuttleworth » This is not the end of capitalism…

    “To think that moving all private enterprise into state hands will somehow create a panacea of efficiency and sustainability is to ignore the stark lessons of the 20th century.”…

  3. Corey Burger says: (permalink)
    November 4th, 2008 at 1:50 pm

    Capitalism, specifically in the form of public companies, have a built-in failure in that they legally cannot care about anything but the bottom line. This does not mean we should scrap companies or force them to care about other bottom lines, but it does mean somebody does. That somebody is most places is the government. So while I agree with you on some of your points, I disagree with you on how far you should let private companies run things best left to the public interest. Now, of course, I come from a country (Canada) which, for the most part, has moderately efficient public utilities and large amounts of government capital to help them succeed, so that might colour my vision. I am also seeing the effects of Public-Private Partnerships here in British Columbia and they are not pretty. Fox, meet chicken inside this lovely coop we have provided for you.

  4. Ben says: (permalink)
    November 4th, 2008 at 2:15 pm

    Unfortunately, I think you are correct. This will not be the end of capitalism, however, it’s a very narrow viewpoint to imagine that there is only one alternative to capitalism, when there are many.

  5. AdamK says: (permalink)
    November 4th, 2008 at 2:20 pm

    Would you like to see some kind of regulator on OS market?

    Mark Shuttleworth says: Yes. The proprietary OS market tends to a natural monopoly, a position which Microsoft earned and then abused. The anti-trust regulations which kicked in have made a big difference for those companies which were being unfairly and illegally squeezed. Unfortunately, they can only go so far, but they have made a difference nonetheless.

  6. Ricardo Ramalho says: (permalink)
    November 4th, 2008 at 2:27 pm

    Greetings from Portugal!

    This text is right on the spot! :)

  7. Stylish Dog says: (permalink)
    November 4th, 2008 at 2:41 pm

    Not the end of capitalism… more the start of responsible capitalism.

  8. Andrew "Ampers" Taylor says: (permalink)
    November 4th, 2008 at 2:48 pm

    Excellent. I agree with this entirely.

    However a word about Hedge Funds. These should not be banned as I believe they play an important part in the business cycle by destroying weak companies and allowing successful companies to flourish.

    You write “So, I’m a fan of regulated capitalism.” I have very mixed feelings here. I accept that your arguments cannot be faulted from this quarter. However, there are two major enemies of “regulation” of any sort. These are “vested interests” and politicians”.

    I read your rule about deleting nasty comments so I won’t talk any further about politicians!

    Ampers.

  9. Paul Lockett says: (permalink)
    November 4th, 2008 at 2:50 pm

    That’s one of the most considered pieces of commentary on the current situation that I’ve read so far.

    The comment that “state enterprises are rarely if ever allowed to fail,” is more pertinent to the current situation than many realise.

    From a UK perspective, I think the problems in the banking sector are partly caused by the government taking the position, for many years, that some banks are “too big to fail.” It has created a situation where the banks have the free market pressure to go out and innovate, but without the fear of failure which would make them show some caution and force bad practices out of the industry in a less catastrophic way. It is a capitalist system, but distorted by one of the worst elements of a state enterprise.

    On top of that, the government’s guarantee that larger banks won’t be allowed to fail pushes customers to go to those larger institutions, creating an industry which is unnaturally concentrated in fewer hands.

    The whole situation was a recipe for disaster.

  10. Alex says: (permalink)
    November 4th, 2008 at 2:53 pm

    Time to read “The Black Swan” by Nicholas Taleb. One of the points he makes is that humans are notoriously bad at prediction.

  11. Jared Spurbeck says: (permalink)
    November 4th, 2008 at 3:12 pm

    I think that the problem, a lot of the time, isn’t that there isn’t enough government regulation. It’s that the regulators are — as you mentioned — either toothless, or bought out by the people they’re trying to regulate! I’m given to understand that the FDA has little power to enforce anything on the meat industry. And US towns regularly throw taxpayer money at Walmart, and force smaller businesses to move out in order to make way for them, simply because a Walmart Supercenter pays more in tax income for the space they take up.

    I’d like the government to not do these things. And to be able to use force not to compel people to make good decisions, but to keep the Walmarts and Microsofts of the world from hurting other people and stopping innovation. But when I try to think of what it’d take, I end up imagining the same things that you did — a perfect, empowered government agency, with intelligent and honest people who can basically see the future. And while everyone running for office tries to pretend that they are such people, I’m not sure they really exist.

    Even if I knew someone who were the way you described that a regulator should be, I’m not sure it would do any good to help her run for office. The people in charge still have all the power, and they don’t want people like that to be elected. This isn’t a situation where change can be imposed from the top down; it has to come from the bottom up. And partly because of that, I honestly think that the best regulator is the people themselves.

    The more access that the people of the world have to information, like via the Internet, the more they find out about these abuses of power. And what they can do to help check them. That’s why I feel that the Ubuntu Foundation, and Free / Open-Source Software, and even the Internet itself are some of the greatest forces for good in the world … because they’re all about empowering the helpless, and opening people’s eyes to what’s going on in the world around them.

    As long as you’re helping with those things, you’re a winner in my book, even if your start-up fails. ^.^ And maybe somewhere down the road you’ll be able to come back to it, when the people themselves have built up enough momentum that you can profitably sustain a business by helping them.

    But that’s assuming you even fail to begin with! Good luck!

  12. Russell Brown says: (permalink)
    November 4th, 2008 at 3:23 pm

    I would agree that regulated capitalism is probably the best place for most things, but there are some things that are definitely not best handled by the free market. Things like the fire and police services for example. People don’t often think of those as being ‘socialised;, but they are.

    For me, the main thing that is currently being operated in the capitalist arena (in the US) that really needs to be socialised is healthcare. The arguments are many (I could write an essay), but at the end of the day, people’s health should not be subject to company profits.

    Having moved from a country with socialised healthcare to the US, I can state categorically that capitalist health care Does Not Work.

    I think the world is starting to see that there is not one ideology that is perfectly suited to everything.

  13. Michael says: (permalink)
    November 4th, 2008 at 3:30 pm

    Very good post, but you do realize that every single one of your examples for regulating private businesses involves government in some way, right?

  14. Roberto Sarrionandia says: (permalink)
    November 4th, 2008 at 3:40 pm

    It is regulation that perpetuates old players in the market. Regulation makes it impossible for the new, the innovative and the rational to step up to the level of the old, antiquated and inefficient.

  15. diggs808 says: (permalink)
    November 4th, 2008 at 3:45 pm

    Mark, great post!

    By the way…are you not copyrighting anything this year on here? The copyright notice says Copyright 2006-2007 Mark Shuttleworth.

  16. James Stauffer says: (permalink)
    November 4th, 2008 at 4:03 pm

    The RIAA and patents problems aren’t caused by “unregulated capitalism” but by government intervention (that actually regulates capitalism).

    Monopolies seem to grow most with government help. FUD can be addressed in the free market. Lobbying is also government help. Preventing huggery is one of the primary reasons for government. So none of these problems are addressed by more regulation.

  17. ulaas says: (permalink)
    November 4th, 2008 at 4:06 pm

    I normally dont surf around the web to drop ideas here and there..
    It is just because that i like what you have done so far with your life and money.
    There is no way that someone can disagree with you that regulated capitalism is better than the one without it.

    I know that this is a subject that we can discuss days long and still have more to disagree, but as a regular citizen in a third world country i have to quickly put forward the reality that there is no way that you can optimally regulate capitalism.

    Capitalism will always allow regulators and their regulators to get in the way against a very well balanced ecosystem. Some people/countries go poorer, some will grow rich. Poors will continue to buy arms to kill their brothers from rich which will obviously render them even more miserable. I dont even want to talk about how capitalism is wildly wasting the resources of mother earth that belongs to everyone.

    The only so called opportunity that capitalism provides is indeed the opportunity to start over.
    But not to a healthy, vibrant capitalist society. To something completely reengineered…

  18. Mike G says: (permalink)
    November 4th, 2008 at 4:18 pm

    Well said! Wanna be the next US President? (just kidding….)

    Our political parties in the states are way too polarized (it seems) to set up such a balance….I hope I am wrong, and that the next sitting US President will read this post and learn from it.

  19. Flavio says: (permalink)
    November 4th, 2008 at 4:20 pm

    Mark, very interesting. It feels to me that you’re talking about the same thing (capitalism) just with a varying degree of state control. These are well know theories ranging from free market fans (liberism), your keynesian position to supporters of complete state control (socialists). I think other options are possible, that go beyond this. Imagine a society where work is not a means for profit, but “profit” is defined in terms of actual “value” for the people: this cheese is good, so let’s make it; this operating system will help us, so let’s develop it. Do we really need money at all? With have advanced technology, we have the Internet. Let’s communicate and cooperate, let’s not be driven by obscure market forces. What do you think?

  20. Martin-Éric says: (permalink)
    November 4th, 2008 at 4:46 pm

    I agree with Flavio about defining value in terms of contribution to society’s well-being rather than in monetary terms. I’ve been wanting to see such a society happen for a LONG time.

  21. Al says: (permalink)
    November 4th, 2008 at 4:47 pm

    I think the invisible hand of which you speak is not Smith’s. Smith hardly ever used the term–it only appears once in the Wealth of Nations and once in The Theory of Moral Sentiments–and its meaning has been much extended and abused. To fully grasp Smith’s notion of self-interest I think one has to also grasp his notion of sympathy.

    Guess who wrote this:
    “To restrain private people, it may be said, from receiving in payment the promissory notes of a banker, for any sum whether great or small, when they themselves are willing to receive them, or to restrain a banker from issuing such notes, when all his neighbours are willing to accept of them, is a manifest violation of that natural liberty which it is the proper business of law not to infringe, but to support. Such regulations may, no doubt, be considered as in some respects a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments, of the most free as well as of the most despotical. The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty exactly of the same kind with the regulations of the banking trade which are here proposed.”
    http://www.econlib.org/library/Smith/smWN7.html#II.2.94

  22. Jim says: (permalink)
    November 4th, 2008 at 4:55 pm

    Flavio: a market is exactly what you talk about though. You’re just exchanging money for bartering basically. Money is just the representation of what people value. It’s the liquid form of the value that people place on goods, services, ethical values, etc. Take a look at this Wikipedia page for a better definition and consider it: http://en.wikipedia.org/wiki/Money

    Mark: Very interesting post. What you mention as examples of companies that need regulation and only serve to push their own agenda like the RIAA would not be able to do this if it was not for the government propping them up with laws. If they were left to fend for themselves, the RIAA would not be nearly the oppressive threat that it is now. Now I don’t believe in pure anarchy, but I do believe in the classical minarchism where the role of the government is very small; namely for sovereign nation border defense and as the judicial system (which was basically what the U.S. was at its inception). If the government serves this purpose, you generally can control the thug problem that I believe anarchism would suffer from, but you also leave the market completely nimble and free along with the rights of people to pursue their own life, liberty and happiness.

  23. iVoted says: (permalink)
    November 4th, 2008 at 4:57 pm

    So you’re voting for McCain? :) All Ubuntu users clearly should

  24. Pat says: (permalink)
    November 4th, 2008 at 5:01 pm

    I think there is a lil bit of a language/semantics problem here between some of us commenters and you Mark. I imagine that many of the past comments referred to the death of ‘unregulated, free-market fundamentalism, capitalism’ and not ‘capitalsim in-any-and-all-forms’. And the new socialism that many are predicting and hoping for is not ‘big-brother-Stalin owns and controls everything communism’ that you seem to infer.

    In fact I think the new socialism (which could also be called ‘democratic socialism’ or ‘social democracy’) that many are talking about bears a very striking semblance to the ‘well regulated in the public interest capitalism’ that you are refering to here (which as you acknowledge yourself, is very different from the ‘unregulated free-market-fundamentalism capitalism’). So although you choose different language to talk about your ideal society, I imagine that there would be more points of agreement than you think.

    A few other lil points,

    Any judgement of Russia’s current state (e.g., blaming it on its history of communism) is now hopelessly confounded by the incredible damage caused by ‘shock therapy’ capitalism/deregulation.

    Second, although I agree that public monopolies can be bad, they are rarely even close to as bad as private monopolies. The push towards deregulation/privatization/etc… as often as not, ends up transforming public monopolies to private monopolies, and thus the public loses. This of course doesn’t have to be the end result, but this brings up the difficulty of regulating capitalism (or maintaining a public monopoly) but open debate (like your fostering here) is the best way to bring these issues under scrutiny and, hopefully, help us in transitioning to a more ‘well-regulated capitalism’/'democratic socialism’ world economy in which the public good becomes the focus again (or perhaps for the first time :P).

    Just my 2-bits,

    Pat

  25. diego german gonzalez says: (permalink)
    November 4th, 2008 at 5:11 pm

    Mr Shuttleworth
    I liked much to read his post: In Argentina we have suffered the two things, state companies and companies deprived with bad regulating organisms.

    With respect to as the established companies do all the possible one to fight the innovators not only one occurs in the scope of the businesses. Also in the community linux.
    In Internet, Ubuntu it is hard being attacked by means of campaigns of defamation on the part of people who consider it too easy, by people who say that it is not as easy as other distros, by people who say that he is uncertain and by people who say that she does not contribute anything to the community.
    if it does not understand east commentary it is fault of the gnome-translate

  26. ako says: (permalink)
    November 4th, 2008 at 5:11 pm

    Isn’t regulated capitalism more or less the same as socialism? Russia wasn’t socialism, it was communism. Not marxism, by the way, as marx was about sharing equally. Communism wasn’t. In communism most people had nothing, and a small number of people had a lot. Marx was actually right: in 1989 the people in eastern europe had enough of a few people taking everything, and the people living in poverty. So there was a revolution. That is was marx predicted.
    Not sure why people in the US as so upset about socialism. I’d say most of europe has to a degree socialism. People in europe seem to do pretty well, are quite happy, and financially well of.
    By the way, social just means caring about other people. The opposite of social is egoism, just caring about yourself. Can’t imagine anybody being proud of just caring about their selves.

  27. mac says: (permalink)
    November 4th, 2008 at 5:12 pm

    Mark, this is just to express my appreciation for you as an entrepreneur (and also as a person, for what it is known of you in the public domain). For me you fall in the same category than Ray Anderson (the Interface Carpets CEO, the one famous for the line “so right, so smart”) and I hope that your integrity will keep on bringing you success, also economical where applicable! :)

  28. raptros.v76 says: (permalink)
    November 4th, 2008 at 5:34 pm

    Mark, fair enough, but how are patents and copyrights anything other than regulations? And how is even allowing such lobbying or thuggery consistent with a free market? Also, have you read Ludwig von Mises’ essay on such “regulated capitalism” (which can be found at http://mises.org/midroad.asp )? You make good points, but I think you might want to take these questions into account.

  29. Thorsten Wilms says: (permalink)
    November 4th, 2008 at 5:37 pm

    Agree from start to finish :)

    Flavio: Cooperating to build things of real value is a nice idea and I think it works to some degree for free software. But overall, you need to take entirely selfish or even outright malevolent people into account. Greed, lying, cheating stealing and brutality and even direct sadism.

  30. casey says: (permalink)
    November 4th, 2008 at 6:56 pm

    Flavio don’t deceive yourself. The society you want requires something (magic pill…evolution?) to eliminate humanity’s ingrained “enlightened self interest” i.e. greed. It looks good on paper, but as long people are involved and bring human nature with them, then ‘capitalism is the worst best form of society’ that we’ve got.

  31. Petteri says: (permalink)
    November 4th, 2008 at 7:11 pm

    Blaah, arguing that capitalism is part of human nature….

    http://en.wikipedia.org/wiki/Begging_the_question

  32. Kazriko says: (permalink)
    November 4th, 2008 at 7:19 pm

    Mark, I honestly disagree with your comment about the RIAA. The market itself isn’t what lets the RIAA strengthen its position, the thing that permits the RIAA to reinforce its position is the very government regulations you’re arguing for. There’s usually an oblique approach to combating a monopoly. The problem is that in a regulated economy, the regulators are typically politically motivated and will assist the large monopolists in cutting off oblique approaches of competition.

    In a true free market system there would be nobody that the monopolies could lean on to use the government power of force initiation to maintain their monopoly power.

    Arguing that better regulators could make a regulated market work is much the same argument that the socialists use to invalidate the “socialism makes people lazy because they don’t get any direct benefit from their work” argument. That is, they claim that the people in a socialist system will be better people, and using those who were in past socialist systems and in capitalist systems as a behavioural template is faulty.

    I’m not sure if a completely free market would be better, but I do know that many of our current market problems are caused not by the market itself, but by the regulators of that market. Your RIAA example is a stark example of government causing market problems.

    I argue that regulators are subject to the same flaws as any other person, and a person given that power will ultimately succumb to them, just as a person dropped in a socialist system will succumb to the work ethic of a socialist system.

    Ultimately, to make socialism work as a system you have to succumb to the Stick, or initiation of force as a method of persuasion to work. If you take away the Carrot of capitalism, that’s all that is left. Some of the groups trying to bring socialism to the west have stated as part of their platform that those who refuse to work should be humanely euthanized. Personally, I prefer a system where people are encouraged to work by what they can gain from that work, rather than because they’ll be slaughtered if they don’t.

  33. Kazriko says: (permalink)
    November 4th, 2008 at 7:33 pm

    To Flavio:

    Obscure market forces?

    Ultimately, a real free market is anything but obscure. It’s very simple. It’s the aggregate of all of the people buying a product, and all of the people selling a product. A buyer finds a seller, or a seller finds a buyer, and they agree to a price. The aggregate of all of the buyers and all of the sellers with their respective prices and sale values is the market.

    As an aggregate, the buyers decrease as the price increases, the sellers increase as the price increases. Where the two lines meet is the equilibrium where the price is most likely to settle. Those “obscure market forces” are merely decisions by individual buyers and individual sellers as to what they are willing to buy/sell a product for. It’s the ultimate in individuals controlling what happens… Instead of some nebulous obscure government agency arbitrarily deciding who gets what.

  34. W. Niddery says: (permalink)
    November 4th, 2008 at 7:41 pm

    Mark,

    In every case where “heavyweights that define an industry” attempt to prevent new players from competing, in our current mixed economies they do so primarily by courting government favour. In an unregulated free market, that option does not exist. No matter the extent of their resources, their only means of keeping out new competition is by continuing to offer customers better value.

    A well-run large company does have an *economic* advantage; they can often profit at price points new players cannot match (given same quality, etc). But that kind of advantage is *earned* and there is no need for government to interfere. There are other ways to compete besides purely price and said company must “defend” its position on all of them if it hopes to acquire or maintain an effective monopoly.

    Such free-market monopolies are almost inpossible to achieve and even harder to maintain. Many try to claim Microsoft as one such example, but in order to do so, its detractors invariably redefine monopoly as having some lesser percentage of market share instead of all of it. Microsoft has market *dominance* to be sure, but are in fact far from a monopoly whether one considers operating systems, office suites, or browsers. It should also be remembered that Microsoft was the challenger to IBM’s supposedly unbreakable (except by govenrment) monopoly position leading into the 1980′s.

    Another common example is Standard Oil at the start of the 20th century. What most people do not realize is that despite their huge dominance in the late 1800′s and their ruthless efficiency that constantly lowered the cost of their products to their customer’s benefit and competitors chagrin, by the time they were convicted of anti-trust charges the free market had already reduced their share to about 11%! In other words, anti-trust charges were not needed and served no purpose besides penalizing success (that 11% still represented a large and growing profitable share in an exploding market serving the burgeoning auto industry).

    Should a company be *so* good in every way necessary to make competing with them a futile affair in a free market, they should be *applauded*. In a free market that can only mean that they *do not* become complacent and lazy but are actively providing what customers want at the best price and quality, and staying on top of new technology and changing customer preferences. You cannot name a single company that has managed this yet, but neither should such a development be feared, for as soon as such a company lets down its guard on any front, they open the door for renewed competition.

    Established positions are never unbreakable in a free market, but only in market where a company can acquire government favour or protection.

  35. Mark Shuttleworth on capitalism « Introspecting aloud says: (permalink)
    November 4th, 2008 at 7:49 pm

    [...] Nice post by Mark defending capitalism over socialism, while underscoring the need for sound regulation in any capitalist model. … state enterprises lack the forces of evolution that apply in a capitalist economy – state enterprises are rarely if ever allowed to fail. And hence bad ideas are perpetuated indefinitely, and an economy becomes dysfunctional to the point of systemic collapse. It is the fact that private enterprises fail which keeps industries vibrant. The tension between the imperative to innovate and the consequences of failure drives capitalist economies to evolve quickly. [...]

  36. Cabalamat says: (permalink)
    November 4th, 2008 at 8:51 pm

    Flavio: Do we really need money at all?

    Money is used to allocate scarce resources. As long as some resources are scarce, societies will find money useful.

    Of course there are some things that aren’t scarece at all, such as information. So vested interests have come up with attempts at making them scarce. Some of these attempts are called “copyright”, “patents” and “DRM”. These days, DRM is dying because customers have wised up that it destroys their freedom. Will some of the nastier aspects of copyright and patent law follow?

  37. Cabalamat says: (permalink)
    November 4th, 2008 at 8:58 pm

    One big problem of regulation is the problem of “regulatory capture” by the industry they are supposed to be regulating. This is an example of what Lessig means when he talks about “corruption”.

    I’m not sure what the solution to this is, but I think part of it is to make sure that there aren’t financial linksd between regulators and regulatees. So for example, it could be illegal for an industry to employ someone who used to regulate that industry, or for industries to give donations to politicians or political parties.

  38. Bill says: (permalink)
    November 4th, 2008 at 9:21 pm

    Mark -

    Finally, a reasoned voice in all of this debate.

    As a friend and I were discussing recently, capitalism only works *if there is a **perception** by everyone that the dream of success is attainable* (the actual reality of whether it is attainable will differ depending on circumstances and is actually irrelevant to the phenomenon). If people don’t believe that they can achieve the dream, then revolutions are born and those in power are removed.

    Here is how this was leveraged in the U.S. during the past 2 months:

    1. Years ago, when the U.S. stock market would crash (think October 1987), no “government bailout” money was available. Why? Because relatively few people were invested in the U.S. stock market and there was no political will for ‘bailing out’ Wall Street.

    2. The Wall Street investment bankers realized this fact, and knew that they wanted to take bigger and bigger risks to make more and more millions and millions. But those risks were too high to not be guaranteed by a government backing. So, what did they do? They went to all of the pension fund and other retirement fund managers and they convinced them to invest those funds in the stock market because “your beneficiaries will get much higher rates of return than if you continue to invest in ‘safe’ investments like municipal bonds and U.S. Treasury securities”.

    3. Sept. 2008. The market is crashing. The investment bankers are losing billions. There is a cry for a ‘government bailout’. A measure is taken up in the U.S. House of Representatives. It fails on Sept 29, as calls to senators and congressmen run 9 to 1 against “bailing out the fat cats on Wall Street”.

    4. Over the next several days, stock markets around the world plunge as the realization hits that the U.S. governments isn’t going to bail out the credit markets, or anyone else, and all of those people on Main Street, who are making panicked phone calls to their retirement fund managers, are coming to the realization that they are losing their entire retirement pension because, whether they like it or not, they’re “invested in the stock market” too.

    5. The U.S. Senate takes up the bailout package (plus an addition $150B of ‘sweeteners’) on Oct. 1, and passes it. The U.S. House of Representatives do the same on Oct. 3, and this time calls are running 50 / 50 to support / deny the bailout (i.e. only 50% of the people calling now believe this is a “bailout for Wall Street fat cats”). What changed in 5 days? People were getting hit in their own wallet.

    6. Wall Street bankers take the money the government is giving them and start to acquire weaker competitors to consolidate their market position. For instance, National City Bank is being acquired by PNC Financial with $7.7B of bailout money. Their top 3 executives split up $41M in bonuses.

    7. So, the Wall Street bankers have figured this out. When everyone has a vested interest, they will win and everyone else will maybe win or lose, but by leveraging the “capitalism perception”, the bankers will not ‘lose much’.

    BTW, a disclaimer here. I have been involved in my own startup for 9+ years and so I’ve bought in completely to the perception :-).

    Cheers,

    - Bill

  39. Alessandro says: (permalink)
    November 4th, 2008 at 10:24 pm

    Mark: “Hell, I might join their ranks”

    I sincerely hope not! And I also think Open Source may actually leverage a prolonged period of hardness to gain substantial market share away from commercial competitors. It is not just “price”, it is the process of de-localized accumulation of shared “capital” that is a killer when the economy goes into recession.

    Change is a threat to most and an opportunity for the brave (and lucky) ones.

  40. Chris Bauer says: (permalink)
    November 4th, 2008 at 11:01 pm

    It seems to me that the examples given of “failed capitalism” are really failed government regulation disguised as capitalism.

    For instance, the RIAA indeed lobbies governments to protect their failing policies. Well, it is the government’s own power to manipulate the market that the RIAA is lobbying for in the first place! That means without the government power to manipulate, the RIAA would have no reason to lobby, and thus be unable to drag the industry down with government issued copyrights and restrictions. In terms of their DRM, the market has already responded with competition. Amazon.com, for instance, has risen as a major player in the music industry due to their avoidance of DRM. The market, not government, has spoken by supporting the DRM free alternative.

    More often than not, it is the government’s own market interference that creates problems. Even in the mortgage crisis, the artificial interest rates set by the federal reserve encouraged banks and lenders to provide cheap credit. It was artificially low interest rates set by federal bank regulators that encouraged subprime lending, the market had no choice but to respond to government policy by providing unwise mortgages and credit. Once again, the market was blamed even though it was responding to government interference.

  41. Marcus Cake says: (permalink)
    November 4th, 2008 at 11:05 pm

    Regulated capitalism is the last man standing. We have no choice but to make it work. We must, however, acknowledge that it has failed its citizens comprehensively. The failure of regulated capitalism is equal to the collapse of central planning. The communists recognised their system had failed and chose to implement something else. Will capitalists do the same? Or will we try to save the status quo at any price?

    Regulated capitalism has delivered national insolvency, individual bankruptcy, inadequate retirement savings for the baby boomers, inadequate water, water shortages, food shortages, no substitutes for critical resources, pro-cyclical investment, war, stalled innovation and a vast waste of resources on a global scale. In short, our regulated capitalism was not regulated.

    Short term interests were able to unduly influence the regulator and long term interests of sustainability, solvency, equality, investment in the future and peace were sacrificed to short term opportunism. This opportunism occurred in industry and politics from the local to global level.

    A different level of regulation won’t resolve the situation. A depression may give this generation a new perspective, but the next generation may simply repeat the same mistakes. The regulation pendulum may just swing back and forward. The problem lies in the organisational structures we rely in an economy. These structures (now a hundred years old) allow short term opportunism of one individual to compromise the long term imperatives of the organisation or community. These structures are not transparent. The structures pioneered by the open source community demonstrate the potential of internet enabled communities.

    We need to build the Web 3.0 online social, industry and political networks on the critical path to Web 4.0 and pull in the next stage of financial markets, economic development, environmental sustainability, awareness, life, work and global governance. The transparency provided by these networks will have a far greater impact than pushing the pendulum of regulation in another direction, or choosing a new political system.

  42. Artem Vakhitov says: (permalink)
    November 4th, 2008 at 11:44 pm

    Mark, are copyright and patents really due to “private companies left to their own devices”? No, these are government-granted monopolies, not free market constructs. Are cooking the books, false advertising, thuggery, and fraud of any kind some specific features of free market? No, they aren’t, they just co-exist with it and distort it. Similarly, lobbying does not exist because of lack of regulation – often just the opposite! When there is no opportunity for regulation, you just cannot lobby anything. Therefore your post does not really explain why exactly we need regulation.

  43. Meneer R says: (permalink)
    November 4th, 2008 at 11:47 pm

    >Left to it’s own devices, the market will tend to reinforce the position of those who were successful in the past, at the exclusion of those who might create future successes. We see evidence of this all the time.

    Yes.

    This is even true, in it’s most simple and abstract form, with Money itself.
    There is this magical amount. This line. If you own this particular amount, the money will sustain itself. If you own more, it will grow autonomously. If you own less, it will shrink by itself due to taxes and inflation.

    Although we would expect the credit crisis to impact the ultra rich, the most likely candidates to pay the bills would be those people who’s wealth was just above that mysterious line. That is: the line just moved up.

    A foolish american president once said ‘money trickles down’. The truth is: it trickles up. It always did.

    That’s why besides regulation, having higher taxes for those who make more money, is the right thing to do. It’s no mystery why in the northern european states (I live in Holland) we have both a progressive tax system and one of the highest BNP in the world.

  44. Regulated capitalism: replace? more regulation? Web 3.0 tweaks? says: (permalink)
    November 5th, 2008 at 1:17 am

    [...] just finished writing a comment on the This is not the end of capitalism, Mark Shuttleworth, 4th November 2008. The article triggered a thought process that resulted in a long comment. I have reproduced the [...]

  45. Mike Zemack says: (permalink)
    November 5th, 2008 at 2:49 am

    Mr. Shuttleworth’s essay conflates two separate and distinct issues…the government’s proper role as protector of individual rights, vs. the arbitrary power of government regulators, which results in the violation of those rights.

    The answer to the issues of environmental pollution and fraud, for example, can be addressed with relation to individual rights. Here, it is proper for government to step in when the economic activities of one pollutes the property of another…a violation of that person’s property rights…by ordering fines and restitution be paid to the injured party (based upon the objective findings of a court). Objective, clearly defined environmental laws such as anti-littering laws, statutes banning the dumping of specific industrial wastes proven to be harmful into rivers, or legal bans on the selling of paints containing lead intended for sale to the general public are also appropriate.

    Similarly, fraud (such as “cooking the books” or deliberate misrepresentation of products) is a violation of the rights of the injured party. Civil and criminal penalties against fraudsters can and should be a tool of government in its role as protector of individual rights.

    The civil courts, another proper function of government, is a powerful “regulator” where people can settle disputes involving harmful products or breech of contract, in an objective forum.

    None of these governmental functions involve groups of bureaucrats with the power to impose rules that carry the force of law.

    But the arbitrary powers Mr. Shuttleworth would delegate to government regulators who would, for example, have the authority to “make very tough decisions about innovation” is scary indeed. This is odd, after Mr. Shuttleworth starts out with a strong denunciation of central planning. This is a call for dictatorial powers to be placed into the hands of one or a group of individuals that usurp the free and voluntary decisions of free individuals…i.e., the free market. Never mind the idea that some innovations may not flourish in a free market. To make a determination of that kind, a regulator would “have to be able to tell the future”-a logical impossibility given the kind of dynamics inherent in the billions of choices made by millions of participants of a free market. Short of the coercive roadblocks enabled by the kind of political connections endemic to a mixed economy…i.e. of “regulated capitalism”…there is virtually no way any company, no matter how large, can stop innovative new technologies in the long term. In any event, if the result of the voluntary, uncoerced trading decisions of private individuals pursuing their own best interests occasionally means that some “superior” product doesn’t “make it” in the market, then so be it. There is no inherent “societal” entitlement to “superior” or “innovative” products. No one should have the power, in a free society, to violate the rights of others through governmental coercion in order to impose his idea of which or whose products should “succeed” in the market.

    Government regulation is inherently corrupt, leading to “many stories of regulators being wined and dined by the industries they regulate only to make sure they don’t look too hard in the back room”. Industry influence on the bureaucrats that regulate it is a necessary result of “regulated capitalism” (a contradiction in terms, actually). Mr. Shuttleworth’s solution, however, is far worse than the disease. He proposes to eliminate the corruption by trampling all over the first amendment right of “the people peaceably to assemble, and to petition the Government for a redress of grievances”. Regulated companies are made up of people who have the right to “assemble” (form lobbies) in order to “petition the Government (i.e., the politicians who create the regulatory agencies)”. To make a regulator “independent” means to shield government from the peoples’ influence…an inversion of a key American principle. The problems caused by rights violations in one area, end up leading to rights violations in another. Anyway, how do regulators get “to know a lot about an industry, but be independent of that industry”, in “capitalist economies [that] evolve quickly”…without maintaining a close relationship with the very companies being regulated?

    Mr. Shuttleworth actually builds a stronger case against regulated capitalism than he does in its favor, in my view. His four steps to an “effective regulator” sounds contradictory and utopian after his description of central planning in the first few paragraphs. And if the government can’t even manage its copyright and patent functions without eliminating the undue influence of established players seeking to block innovative newcomers, how in the world can it ever hope to regulate entire industries in a capitalist system where “the imperative to innovate and the consequences of failure drives capitalist economies to evolve quickly”?

    The biggest contradiction is perhaps the key to this confusing essay. After exposing the futility of centrally planned economies, Mr. Shuttleworth ends by declaring that “regulation is…very much worth investing in if you are trying to run a healthy, vibrant, capitalist society”. Nobody “runs” a capitalist society. You “run” a planned economy. Under capitalism, people run their own lives, and government protects their right to do so.

  46. Mark Rose says: (permalink)
    November 5th, 2008 at 4:41 am

    Mark, you’re a true inspiration. We need more insightful leaders like you on the world stage.

  47. Denis Z says: (permalink)
    November 5th, 2008 at 8:20 am

    Hi Mark,

    I want to mention the organizational form in USSR was not socialism or communism but some kind of state capitalism (ethnograph Yuri Semenov call it politarism (sorry, I have link only to source of information in Russian: http://www.politidea.info/wiki/%D0%9F%D0%BE%D0%BB%D0%B8%D1%82%D0%B0%D1%80%D0%B8%D0%B7%D0%BC but maybe online translation will help to read it). So, it can be not correct to refer USSR as the example of socialism implementation. Do not trust Gorbachev & Co :) They transformed politarism to most awful and wild form of capitalism with unlimited destruction and seizure of resources. He and his buddies (Eltsin etc.) leaded politarism structures and then magically transformed into “democracy” leaders. Is it possible to trust such kind of people?

    And IMHO capitalism produces the worst and most destructive illness “Society of Consumption” when people increasingly consumes much more then they really require so driving the Earth to catastrophic resource shortage. Also I think we should not forget one should overview imperialism economical state not in the border of several countries and life level in it. But we should look to its phantastic debts, poverty and wars around the World caused by the usage of cheap human resources and seizure of natural resources performed by “most successful” capitalistic countries. They simply export poverty outside of their borders in this way hiding real state of things.

  48. Denis Z says: (permalink)
    November 5th, 2008 at 8:39 am

    I want to add comment regarding 2001/2002: the destruction you have seen in Russia is the mostly result of 90th. I live in Russia so remember this period of time very well: mostly all factories was stopped (during this time the most advanced factories was alcohol factories :( ), there was no reparation/renovation activity, mostly all agricultural unions was destroyed, the main source of income was uncontrolled and often criminal selling of natural resources (forest, gas, oil, metal) to other countries etc… Russia in 90th was some kind of Eastern bazaar where people are selling goods produced in other countries/places.

  49. Jo-Erlend Schinstad says: (permalink)
    November 5th, 2008 at 8:56 am

    Using your own logic, Mark, it would be possible to argue that Ubuntu will never be secure, never free of viruses, and never really user friendly, because Microsoft has proven that it isn’t possible to make such a system. The reason why a system fails isn’t always the system itself, design or implementation. It might simply be that the time isn’t write, that the people aren’t ready for the change, or that the transision is made for the wrong reasons. I think it’s wrong to classify the principles of communism and socialism as wrong simply because it didn’t work in the past. Actually I think the inevitable end result of capitalism is something we’ll consider similar to socialism today. Capitalism means cheaper, better, faster. In order to achieve this, we have to eliminate costs. We’ll need to replace workers with equipment and machines. Human beings are just too expensive — if they’re to be treated as such. The companies that make these machines and equipment, will have to keep making them; otherwise they’re a failure. Equipment will “spill” into less wealthy countries. Sooner or later, the human race should be biologically independent of our productions.

    It may take a while though, but then again… Sixty odd years ago, walking on the moon was a futuristic dream. Now it’s a forgotten memory. What we call ecological food, my parents called food. Capitalism has certainly paved the way here, but the cost has been extreme, and I’m not so sure it’s the best way to the future.

  50. Miguel A. Guillen says: (permalink)
    November 5th, 2008 at 9:21 am

    Regulated capitalism is another fail, minor fail than capitalism but a is a fail. Why? While the companies control the system, the people don’t have control over the system, the companies must be the tool no the objective.

  51. Boycott Novell » Links 05/11/2008: Theora 1.0 Released, GFDL Now CC Compatible says: (permalink)
    November 5th, 2008 at 9:29 am

    [...] This is not the end of capitalism [...]

  52. Flavio says: (permalink)
    November 5th, 2008 at 9:44 am

    @Thorsten
    What if people “passions”, even negative ones, could be used in a positive way? For some of them it is feasible, for some others you have to remove the main “motivation”, e.g. why steal if there’s no money and you’re not starving? why lie or cheat if there’s nothing to gain?
    Besides, I’d like completely invert your argument, do you think capitalism is sustainable? Can we go on like this? Capitalism structurally brings war, economic crisis, does not respect the environment and, at this stage, hinders the growth of culture, technology and science. And no, unfortunately it can’t be fixed: these are “design issues” of capitalism.

  53. Gustav Bertram says: (permalink)
    November 5th, 2008 at 10:48 am

    We need regulation because of IP law? A truly unregulated market would have no IP law. Intellectual property is an artificial monopoly, and therefore a restriction on the market.

    The examples you give are of companies using laws and regulation against competitors. So in order to regulate the abuse of regulation, we need more regulation.

    Won’t regulated capitalism constantly increase amount of regulation until we end up with central planning?

  54. tchomby says: (permalink)
    November 5th, 2008 at 12:03 pm

    Don’t you think there might be a third option, besides capitalism, regulated or not, and central planning?

    The problem with regulated capitalism is that it’s too corruptable. You have big economic powers, corporations etc, that become very rich and powerful, and that have every reason to try to corrupt the regulator and the political sphere in general, and that is clearly what happens. How do you hold on to good regulation in the face of such powerful forces working to corrupt the system? You inevitably end up with a hopelessly corrupt system, both political and economic.

    I think what you need is to bring the economy, as well as the political sphere, under democratic control, and by that I don’t mean central planning. I hope that some form of distributed decision making by direct, participatory democracy is possible, rather than economic markets and the profit motive.

  55. Steven Shaw says: (permalink)
    November 5th, 2008 at 12:21 pm

    Mark, you seem to have a problem with crony capitalism (or corporatism) and not with the kind of capitalism envisioned by Ayn Rand. Isn’t it the patents and government favours (often in the form of “regulations”) that help to keep the dominating power of existing corporations at the expense of the new entrepreneur?

  56. Boycott Novell » IRC: #boycottnovell @ FreeNode: November 4th, 2008 says: (permalink)
    November 5th, 2008 at 12:33 pm

    [...] is not the end of capitalism < http://www.markshuttleworth.com/archives/227 [...]

  57. Matt Casters says: (permalink)
    November 5th, 2008 at 12:50 pm

    Here in Europe we perceive socialism to be something completely different from communism.
    This association of socialism (basically the regulated capitalism you seem to advocate) with communism has led IMHO to an extremer capitalism in the United States. I think it might be some left-over from the Joseph McCarthy idiocy that led to this extremism where in some crowds even open source is considered “communism”.

    It was quite remarkable to watch President Bush a month ago on TV when he tried to wriggle out under the fact that the US is now subsidizing banks. Yet at the same time there are already a number of things in the US that are funded with public money, like for example the road network. Nobody except for a few nut-cases seems to think that this is a bad idea.

    Countries like my own (Belgium), The Netherlands and in fact most European countries prove that extremely important services like health care are indeed better handled by the government, at a cheaper price for all as well I might say. We’ve been happily living in this US termed “communist / socialist” reality for many decades now and it’s still working just fine.

    My conclusion: they tried extreme socialism called “communism” and it failed and the US tried unbridled capitalism and it failed as well. In the mean time we’ve been doing just fine in Europe with our socialistic approach.

    Of-course, if you’re a very cynical person (which I’m not), you might say it’s always the extremely rich that jump to the aid of unbridled capitalism and always the extremely lazy that defend communism.
    Personally I would say that a society can be judged by how it treats its most vulnerable. Taking away homes and savings doesn’t really fit into that picture.

  58. Darrell W says: (permalink)
    November 5th, 2008 at 1:33 pm

    What about decentralized democratic planned economies or participatory economies?

  59. Flavio says: (permalink)
    November 5th, 2008 at 4:23 pm

    @Jim
    Well I don’t know, but I’m not talking about bartering, I think people should just get what they need and be educated to administer “scarce” resources (which today are not the primary resources anyway) together. When you have what you need and know that everything is shared you don’t barter nor you buy or sell, you just live. In a global society, we share our future and our planet.

    @Kazriko
    You seem to have a rather norrow view about the role of economy in our society at large.
    How would you call the forces that brought us fascism, nazism and stalinism; the 2 world wars; many other (civil) wars throughout the years; pollution and global warming; and the list goes on…
    I called them “obscure”. Please come up with a better description.
    And about the government decisions stuff, don’t you think that also politics is determined by economic interests? Economy also determines politics, not the other way around.

    @Petteri
    Wow, that’s a smart answer!

  60. rolando says: (permalink)
    November 5th, 2008 at 4:52 pm

    Well, I live in a country with a “Revolution” that fight with the “Capitalism”. I don’t want to talk about Democracy and Socialist, I just wanna say that the Biggest company in my country like the Power (Electric), Telecomunication, Biggest Banks and more, are now property of the Gov.

    I think that this is a real problem, the international crisis “is not” taking us, because a very lot of money is used make us feel that nothing happend.

    I don’t want to think what will happend when crash our economy. I love the money :) I love work and win Money, I work really hard every day. Then I can’t understand why someone that likes to be resting in home, doing NOTHING in the “Socialist” system will have privilege that I can’t have.

    For example, some people that don’t study, don’t work and do nothig good for their country and societies, may have privileges like, FULL (100%) Credits for buy they houses, Electricity with NO COST or VERY CHEAP, NO PAY for water services and much more.

    I must to pay a 28% interst home credit, more us U.S.150$ of Electricity, and a lot of Taxes. I have to pay all than the others DON’T pay. This is NOT EQUAL

    Here every “Revulotionary” say that U.S.A. SUCKS, but LOVE go to Disney, eat in a MacDonald’s and use NIKE, LEVI, Ray Ban, and drink Coke or Pepsi.

    I think that this “Revolution” is just for some ones, and a Fake to others…

    I do my part as “Humanist”, Every year help people, have a very little Fundation that try to make that all people help child in the hospitals, brings in Christmas Gift for child with Cancer, and help to Old people too, with Cloths, medicine and all that we can recollect. This is my Way to do REVOLUTION.

    I Try, and work with my Family, educating my littles daugthers to be very and better persons every day, this is our “Revolution”, Education, Good Family Education, and love to others, help all that YOU CAN help, this is nice and is Revolution, think in others like a big Family, like a Community.

    Is NOT about control what you can see, read, say or think, I hope that everybody understand me, I’m talking about that the real Re-Evolution is inside of us, and only we can change this world. And don’t think that a NEW PRESIDENT, or a “Dictador” Will save all, and fix all.

    Mark your are rigth, therefor let me say you that we can do a better world, but bad things must to be, The Ligth need Shadows, The Good need Bad, Capitalism need Socialist, Ubuntu need “Ventanas” (Hasefroch).

    Maybe the BUG #1 is an Utopia

    Is OUR work find the correct balance.

    Please, sorry my poor english, Love, Peace a Progress for all world.

  61. Peng’s links for 5 November « I’m Just an Avatar says: (permalink)
    November 5th, 2008 at 5:11 pm

    [...] Shuttleworth: This is not the end of capitalism. Our favorite spaceman has a follow-up on a post he wrote about the “economic unwinding of [...]

  62. José Canelas says: (permalink)
    November 5th, 2008 at 5:11 pm

    “I think a world without regulated capitalism would be a bleak one indeed. I had the great privilege to spend a year living in Russia in 2001/2002, and the visible evidence of the destruction wrought by central planning was still very much present.”

    This statement invites us to believe what you observed and concluded and take it as a matter of fact. You just don’t feel any evidence is necessary to establish causality. And, of course, you’re wrong. Your statement is a bit like standing on a village next to the Vesuvius vulcano and concluding that the Big Bang is responsible for the destruction.

    I’d just like to point out that we’ve been living in that increasingly unregulated capitalist world for about 30 years. No need for evidence here, we can see the bleakness in the misery around our cities and peaking through the media and pouring out of the statistics on the poverty, hunger, overproduction, un and underemployment and in the ubiquitous human exploitation. Your stance on these matters is that capitalism can be reformed, regulated, tamed. No surprise here. Capitalism has treated you well, your worldview is shaped by that and you’ve taken the easier road, that it just needs a bit of tweaking here and there. Nevertheless, the bleak world you talk about is upon the vast majority of the human kind. The UN data confirms year after year that inequality is increasing (check any Human Development Report, search for “UN inequality”, whatever). Your hope that capitalism can be reformed, or that it can work for most of us, is simply baseless. We need something else.

  63. jimcooncat says: (permalink)
    November 5th, 2008 at 5:45 pm

    Corey Burger said: “Capitalism, specifically in the form of public companies, have a built-in failure in that they legally cannot care about anything but the bottom line.”

    It’s not necessary that they care about next quarter’s bottom line, though, at the expense of long-term success. Some public companies do have some vision for the future, and realize that without a healthy environment, healthy economy, and healthy personnel they don’t have a chance at a good bottom line in the future.

    U.S. businesses finally understand that there is something to be said for world peace, with the personnel problems they’ve had from their National Guardsmen being called up for their third deployment. It’s cost them a lot of dollars and totally fouled many local labor markets.

    And good luck with dropping health care benefits, since you won’t find replacements for your sick and infirmed personnel.

    Got an office building in a nice upscale coastal city? Maybe you should check out this whole “global warming” thing while there’s still a hope something can be done about it. Same if your customers or vendors have coastal real estate.

    Thing is, if you have something good you want to promote, it’s usually easy to justify it against the bottom line. If not, you just need a little creativity.

  64. zelrik says: (permalink)
    November 5th, 2008 at 8:42 pm

    I dont understand why the capitalism should stay. It’s all about infinite growth and our resources are finite. Capitalism the way we know it encourage waste, greed and all other nasty things… To me, we should stop this global suicide and define a hierarchic model that would more flat instead of pyramidal.

  65. Philip Ganchev says: (permalink)
    November 5th, 2008 at 11:48 pm

    Other commentators have already mentioned some ills of capitalism and markets, such as growth and inequality. Markets (and therefore capitalism) also ignore externalities, such as social health and the environment, and encourage private goods at the expense of social goods. They reward selfishness and punish generosity. They are also very inefficient, considering all the money wasted on market research, marketing, duplicating essentially the same products in different brands, and protection of “intellectual property”. They force 80% of people to do menial, debilitating and sometimes dangerous work, without realising their creative capacities.

    There are alternatives besides market-based economy (capitalism) and central planning (so-called socialism, which was at odds with socialist values). One is participatory economics – http://www.zcommunications.org/zparecon/pareconlac.htm

  66. Miss Kellie says: (permalink)
    November 6th, 2008 at 1:05 am

    All very interesting indeed!

    I think it’s time for a new social change…

    As Ulaas (above) said earlier: “…I have to quickly put forward the reality that there is no way that you can optimally regulate capitalism.” (I believe this statement to be true).

    Ulaas then said: “The only so called opportunity that capitalism provides is indeed the opportunity to start over. But not to a healthy, vibrant capitalist society. To something completely reengineered…”

    On that note, has anyone heard of The Venus Project? http://www.thevenusproject.com/

    I’m thinking that there is no need for Capitalism (or any other tried & tested system) to continue. In this instance, Capitalism is a flawed system – as is any profit structure or pyramidal structure.

    It is possible to live in a ‘resource based economy’ as opposed to the current ‘monetary based economy’. Scarcity is no longer a reality…

    Please watch ‘Zeitgeist Addendum’ which I’ve personally found to be profound: http://www.zeitgeistmovie.com/ I think Zeitgeist Addendum ties in perfectly with what Flavio (above) said: “…I think people should just get what they need and be educated to administer “scarce” resources (which today are not the primary resources anyway) together. When you have what you need and know that everything is shared you don’t barter nor you buy or sell, you just live. In a global society, we share our future and our planet.”

    I stumbled upon this discussion and think it’s a great platform for forward thinkers :-)

    I’ll be visiting here more often now that I’ve found it…

    Keep on keeping on!

  67. Artem Vakhitov says: (permalink)
    November 6th, 2008 at 11:23 am

    @tchomby: “I hope that some form of distributed decision making by direct, participatory democracy is possible, rather than economic markets and the profit motive.”

    There already is such a form of distributed decision making by direct, participatory democracy, and you use it every day. It’s called market. You vote with your wallet for the goods you need, based on whatever values you have.

  68. Andrew says: (permalink)
    November 6th, 2008 at 2:24 pm

    The benevelent regulator does not exist! Since the dawn of time, the Chief, the Lord, the King, the Don, the Company and the Government have all taken their share of the spoils; and labour has had to be sold, the public protected and the life savings of the old kept safe from becomming worthless.
    Self regulation through education, access to information and the protection of civil liberties and rights are the only way for capitalism to survive. As soon as a regulator is introduced, lobbying will ensue (bribery, corruption and protectionalism) and unfair practice result.
    If barriers to entry (business), protection of IP etc are protected at an individual level, then there is no need for any other regulation to exist. Human kind will be able to do what he/she can with the means at their disposal, but at the same time be responsible for their decisions.
    If you get sold a dud without full disclosure – you have recourse. If you have full information then you are an idiot.
    The internet is alread and will level the playing fields further. Be responsible and stop relying on regulators and the like to fleece you. Like spam, they are brokers you do not need.

  69. Flavio says: (permalink)
    November 6th, 2008 at 2:41 pm

    @Artem
    How do I vote against war with my wallet? Is there really someone voting for war with their wallet anyway?

  70. Artem Vakhitov says: (permalink)
    November 6th, 2008 at 4:27 pm

    @Flavio

    I thought you were talking about economy, not politics? What exactly has war to do with regulated or non-regulated capitalism *as such* – not with state or human nature in general? Within economy, you do vote with your wallet. Within politics, you vote at the elections – that is, if your country has such a device.

    Speaking about politics, I do envision a hybrid between direct and representative democracy which is enabled by modern communications technologies. It works like this: people elect representatives as before, and *by default* they act as people’s proxies. At the same time, each citizen can directly vote on specific matters via Internet if he/she so chooses, and his/her vote is counted proportionally to the number of people that the corresponding official represents: if it’s say 1000, then his/her voice (provided that this person is the only one voting directly) will count as 1/1000, and the representative’s voice will count as 999/1000. Of course the list of questions open for voting must be there well in advance.

    All of this, however, is pretty far from the topic of Mark’s post.

  71. Eva says: (permalink)
    November 7th, 2008 at 8:05 am

    Often people get stuck in the names Capitalism/Socialism/Communism, and they forget that we/humanity is just looking for a workable – sustainable – and most effective way of organizing/managing social life, roughly classified as political or economical.

    In that sense, it is not exactly “start again” but evolve smarter (which is very relative word all together..). I could go forever on this but the main point is:

    1.To understand that ever-seeking/evolving way of managing humanity one must consider human nature.

    1.1 Humanity, (if you look at it holistically, which is not hard at all but surprisingly few people have), is like an organism and follows UNIVERSAL PATTERNS. You have the individual cells – i.e humans, each specializing… and you have the aggregate body – humanity. Each cell – human, first cares about its own survival, then cares about the survival of its closest cells, then it contributes (even when being selfish) to the survival of the whole organism/humanity.

    1.2 So far, what we call “capitalism” has worked because it allows for a cell/human to develop its potential without asking from it to contribute or be equal to other cells. It allows it to be creative, and importantly: it stimulates that, and thus promotes DIVERSITY. And we all know “diversity is the spice of life!”. “Socialism” doesn’t so demandingly seek for creativity and as many socialist “organisms” as there might start, they will never live as long as one that is founded on the idea of a maximum “cell”/human development, initiated by first a selfish need and then contributing as a result to the better survival of the whole. I meant to say: socialism is not sustainable, given human nature.

    1.3 Having said ALL that, I do not think humans are evil, we care about our spread-out DNA deeply, it is just a matter of order (read “The selfish gene” :), and we are evolving towards a socialist capitalism. I.e. When I go to a store I care whether the product was made by fair employment/trade practices, whether it was no animal testing, recyclable, whether % is being donated to the poor… when I reach a certain stage of self development, I reach out to help others. So, there is our socialism in the free market. But we need to improve and evolve in step with our time, meaning a bit faster which might require realizing that our organism has larger priorities, environmental etc, and things at cell level have to change i.e re-prioritize, because without the organism the cells have a lesser chance of survival, especially long term.

    I meant to say, social capitalism is the way forward. :) Rising awareness to be in step with our time, might be even more important than regulations, Mark.

    Ideally, because every person, even the Dalai Lama, is corruptible, you would have pure democracy and no regulations, i.e people clicking on their screens and making decisions. I do believe that all peoples can keep better checks and balances on all peoples, and make better ultimate decisions, than those made by a few elected, democratically or socially…, individuals. One might bring the argument that “people are not educated” to make direct decisions, but that falls apart because those are the same people you trust to know and elect someone to make decisions for them. The Internet/media is great for educating and spreading the word, and at a given decision people can choose who to trust… let me look up the bio equivalent term. :)

    Isn’t it sad we had to wait so long for change.

  72. Steve says: (permalink)
    November 8th, 2008 at 11:32 am

    Please remember that nowadays, Russia is actually closer to capitalism then it is to Communism. If you ask me, that’s an incredibly big leap in just 17 years.

    Just something for everything to think about. When you think about communism, do you think of Stalin, and Soviet Russia? You’re thinking of Authoritarian Communism if you think this. Many people including myself prefer Libertarian Communism, which is more closer to Marxism.

  73. Macrohard says: (permalink)
    November 9th, 2008 at 8:07 pm

    Mark,

    Thank you for those words, it is very appreciated. I certainly needed a lift in my spirit lately.

    This has been certainly issues here in the US (and worldwide) about irresponsible government as well as irresponsible capitalism, regardless of who you are politically as well as economically.

    In the end however, it will be “humanity towards others” that will make the difference in all, not making deals behind closed doors and hands that exchange money…..

  74. tom says: (permalink)
    November 10th, 2008 at 12:54 pm

    Capitalism isn’t at the end of it’s rule. It has clearly some good feature you won’t find in any other systems. Some people are complaining that socialism is giving unhealthy powers to a group of people.
    In a capitalist world this happens too. George Bush, Bill Gates, Steve Jobs. These people get elected, or people give them money for their products and by doing so giving them power. These people are just as anybody else a bit selfish. Take for example Bill Gates he has more money then you can imagine. Is it correct for one man (although he has made quite an OS) to have more money then certain governments, countries, continents, worlds? Where does it stop? In a capitalist world we have the freedom to spit at other people all over the world and in our street who are being exploited @ minimum wage and/or have less money. Even in California 15 % of the people live in poverty.

    If some people of California didn’t buy their 25th car but gave it to the the government, although some of that money would go in someones pocket where it didn’t belong, but with a little bit of justice that money will pay so you’re neighborhood won’t have poor people, increase joy, make everybody more relax. I live in a socially correct capitalistic country named Belgium, here not everybody drives a car, everybody likes to drink a beer, What I mean is that wealth is spread under the people and is not in the hands of enterprises or socialistic governments. There are extremes of wealth and poverty in Belgium. However, the nation’s generous social welfare programs prevent abject poverty. Only 3.7 percent of the population (10 million) falls into poverty.

    The nation’s social welfare programs are extensive. There are 5 main elements to the Belgian social welfare system: family allowance, unemployment insurance, retirement, medical benefits, and a program that provides salary in the event of illness. Employers contribute the equivalent of 35 percent of a worker’s pay to the social welfare system and workers contribute 13 percent of their pay. Many companies also offer supplemental retirement and medical programs. Almost all Belgians are covered by medical insurance. Payments to medical providers were $12.97 billion in 1999. Belgium ranked thirteenth among the 24 OECD nations and fifth among the 15 EU nations. Each region has special councils that provide public assistance and aid to the poor. The National Housing Society provides low-income housing for the poor and immigrants. The Society is also in charge of eliminating slums and revitalizing urban neighborhoods.
    (source :http://www.nationsencyclopedia.com/economies/Europe/Belgium-POVERTY-AND-WEALTH.html)

    So as history shows us, communist systems won’t work, the capitalistic system will work for most of the people and the minority who didn’t like it they can go work @ minimum wage, lie down somewhere, drink take drugs until they die, expect when they’re someone you love (then we’ll give ‘m our money) but otherwise until they die!

    No I say profit from the benefits of capitalism and correct it with socialism where it fails. Not everybody will be rich and the rich won’t be poor (they’ll just have to give up the 5th swimming pool, 25th car, 4th castle) but crime will decrease and people who need help will get it.

    Am I wrong? It sure works here in Belgium!

  75. Brad Wogsland says: (permalink)
    November 11th, 2008 at 3:24 pm

    But regulation is too often just another tool of large corporations to stifle competition…

  76. Brian Donohue says: (permalink)
    November 14th, 2008 at 12:04 am

    Capital must indeed live, but capitalism must die. Most open source folks I tell this to understand what it means better than others. It’s the same thing as saying, “God is everywhere — we need no religion.” The -ism is the tail that makes the dragon, and I would have the same message for socialists and anarchists as well. This, of course, has mostly personal rather than societal meaning — I’ve written about that before. But I suspect that we’re at the point in history where this personal meaning will gain some prominence that is has long lacked in our culture. The election of Obama arises, in part, from that arising; and the economic crisis is going to take us further along that route.

    And in case anyone thinks I’m just some New Age kook talking out his butt from his comfy ashram, the reality is that I’ve worked on Wall St. for a fair piece of time. Right now, and until this time next month when I’m out there on line E, I’m working for a small company that’s been in the news lately, called AIG.

    For more on my perspective viz. living alternatives to capitialism, see some of the stuff at the blog on the “open source society” (yeah, I like PCLOS, so sue me).

  77. abch says: (permalink)
    November 14th, 2008 at 9:56 am

    Russian problems in 2001/2002, it is not a failure of central planning. It was a consequence of Soviet Union destruction. If USA divides into several parts with breaking economical links by political reasons – this will be the case. :-) So it’s not an argument…
    Look at China they use central planning without problems.

    About capitalism regulations. A regulator should exist. But it should be a low, not The One Choosen :-). IMHO The One Requlator is a quite naive.

  78. Google says: (permalink)
    November 14th, 2008 at 2:05 pm

    After seeing how Novell (sponsored by Microsoft) is attacking Redhat, are you still willing to put up with Novell sponsored crap like mono ? where are your ethics ?

  79. Francessca says: (permalink)
    November 14th, 2008 at 11:02 pm

    Hi Mark, did you read this? http://www.themike.org/2008/11/ubuntu-go-get-it-already.html
    This guy has a point, why are there no adverts on telly or viral ads online or even radio ads advertising Ubuntu? If more people know about it, more people will use it…surely? Isn’t that the whole idea?

    Ubuntu: Go Get It Already!

    I just read PC World’s review of Windows 7. Apparently, its just Vista repackaged with enough tweaks to break a few of your favorite programs. Unfair review, I say! I doubt the version available is even close to what you’ll get when they start shipping it on every new PC on the market. I thought Windows 7 was going to be revolutionary and from the ground up?

    While reading the review the previous thought crossed my mind. Would Windows 7 be the defacto operating system this time? After the so-called failure of Vista, will all the PC manufactures still jump on board and agree to distribute Windows 7 like they have with every other release of Microsoft Windows?

    I’m going with “yeah” on this one. Nothing will change. Well, actually it could. If Mark Shuttleworth would spend some of that money of his on Ubuntu commercials. You never see anything like that on TV. You see all those new Microsoft commercials and Apple’s ever-present Mac vs PC commercials. You can’t turn on the television without seeing these ads. The average consumer still doesn’t even know what Ubuntu is, let alone Linux and open source software.

    It seems like it would be so easy to do too! Think about it, first the commercial could point out that Ubuntu is both secure and stable. Then whip out the big guns and point out that almost all software for the PC and Mac have a free, open source counterpart with Ubuntu. Finally reveal that Ubuntu works on ANY computer and best of all, its 100% Free!

    Here’s the commercials’ tag line. “Fast… Flexible… Free… Ubuntu: Go Get It Already!”

    Run that commercial ten times a day. PC manufacturers will have discount models available with Ubuntu pre-installed by the end of the month. I’m sure there’s an angle for making money off the whole thing too, even for Mark and Canonical.

    Go on and say how the general public “isn’t ready for Linux.” I work in the technology sector. The “general public” still isn’t ready for Windows, but that hasn’t stopped them in the past thirteen years. They used it because it came with their PC.

    I know, this argument has been made before. I’m only bringing it up again because if more people started using Ubuntu, maybe The Daily Show would fix the Flash on their website so it worked with Ubuntu again. Thats all that I ask.
    Posted by Mike on Thursday, November 13, 2008
    Keywords: Linux, Microsoft, Ubuntu

  80. Aleks says: (permalink)
    November 15th, 2008 at 3:04 pm

    Hi Mark,

    I have to correct you a little bit – when you visited Russia in early 2000′s, and witnessed destruction – it wasn’t caused by central planning I think. The horrible state in which the country was at that time was caused by the “smart” ideas of “shock therapy” – dumping the central planned country (built in over 7 decades) into a “free market” environment overnight, and letting the “ideal” and “the only right” theory of free market sort out things. That’s what caused all the abandoned buildings, abandoned farms, factories etc. – something which was not thriving maybe, but at least alive and working steadily earlier to become forgotten and scrapped for parts in just a few years, leading to poverty, starvation, social unrest and the like.

    As to the end of capitalism – I don’t think that can be true. Elements of free market economy existed always in all human societies, whether they were slavery, or modern democracy types. As to more regulation – probably yes. The world’s become too open. Too much money flows around the world without any kind of control whatsoever from governments. The system which regulated the flow of money around the world wasn’t really designed to function in a world-wide market – each country was supposed to deal with it’s own problems, and that clearly wasn’t enough in today’s global economy. More control and regulation (and that doesn’t mean central planning of everything in the world) over international transactions and the global flow of capital should probably be employed, with governments (banks, financial ministries) worldwide working together.

    Or we could end in a worldwide hunger with rebellions everywhere, leading us to decades of anarchy :)

    That’s what I think anyways.

    Regards,
    Aleks

    Mark Shuttleworth says: I heartily agree with you that the shock therapy used in the transformation of the old Soviet economy to a free-market one was a very bad idea. The reality is that a dynamic, capitalist economy depends on many subtle factors – not least effective regulation, strong anti-trust and a deep pool of business skills. Jeffrey Sachs and co, who advised Russia on the shock therapy, would have been wiser to figure out how to create stronger institutions over time. They made, I think, the classic mistake of thinking that people in Russia were “desperate to be given the opportunity to be just like Americans”, and that the transfer of state assets into private hands would unleash a tidal wave of economic energy. Instead, people were given “pieces of paper” in which they had little faith, which made it easy for the wealthy and the connected to scoop up assets and resulted in the massively concentrated oligarch-owned economy which Russia has lived with ever since.

    I think the oil-fueled boom of the last 5 years fooled everyone into thinking that Russia has a solid economy today – the reality is that nobody asks deep questions while money is flowing into the system. Now that the oil price is taking a temporary dive, perhaps people will ask the necessary questions. Power and money are more concentrated in Russia than in any other economy of similar scale, which means that there isn’t a very vibrant and deep diversity of thinking in the economy. That makes Russia vulnerable to manipulation. If I were in there today I would be arguing strongly in favour of ways to broaden the ownership base of the economy. Perhaps the Kremlin will use the deleveraging process currently under way to achieve that, or perhaps they will just keep it concentrated by make sure it’s concentrated in the hands of their friends. I hope not!

    But to come back to transformations – I have a great admiration for the way the Chinese government is moving towards a free market. They have taken 20 years to build a deep pool of skills and experience in business management across the economy. They remain vulnerable in many ways, but the steady, almost subconscious shift towards private asset ownership has been far less traumatic than the shock approach used in Russia. I still think China will face rough patches – perhaps in 2009 as they face their first real contraction. The Chinese haven’t been asking tough questions because the educated have been getting wealthy for 15 years, but perhaps that will change when property prices contract and exports tumble.

    Anyway, I take your point that Russia in 2002 was suffering from a Washington-consensus-induced shock. But there was a deeper malaise that was a hangover from the days of central planning. Inefficient power, poor quality housing, ugly environments. Those will hopefully be a thing of the past.

  81. Memex 1.1 » Blog Archive » How to regulate says: (permalink)
    November 16th, 2008 at 10:36 pm

    [...] Shuttleworth is in favour of regulated capitalism. But he argues that regulation has to be done properly. Here are his guidelines. Good regulation is very hard. [...]

  82. This is not the end of capitalism « Bob Morris: Investing, tech, coffee. says: (permalink)
    November 17th, 2008 at 1:28 am

    [...] 16, 2008 · No Comments Mark Shuttlesworth, the founder of Ubuntu Linux, has a thoughtful post on the current economic problems and comes out strongly in favor of regulated [...]

  83. Nii Simmonds says: (permalink)
    November 17th, 2008 at 6:45 am

    Capitalism will never be die, it’s just a gloomy period for the gatekeepers of financial resources. This post by Michael Lewis http://tinyurl.com/5s5w2b describes one of the many culprits in this orgy of financial access. Greed and the lazze faire attitude is what fundamentally pushed this system to the brink of collapse. This collapse was brought by people borrowing more than they should have, investment banks initiating a complex financial derivative market; which I might add was so difficult to unravel, many smart, intellectual financiers were perplexed with all the derivatives.

    I wish I had a few hundred million dollars lying around…this is a good time to by some troubled companies.

    Nii Simmonds

    Nubian Cheetah blog

  84. Τhe Great Leviathan says: (permalink)
    November 17th, 2008 at 11:10 am

    The crisis that we are witnessing today is shaking the very foundations of neo-liberal capitalism. It is unfolding at an accelerating speed, and nobody is capable of saying where it will lead.The complexity of the financial crisis makes us a bit dizzy, but it is nevertheless possible to identify its principal mechanisms. The starting point is the existence of a considerable mass of “free” capital in search of maximum profitability. Periodically, this capital discovers a new seam and unleashes a dynamic which feeds on “self-fulfilling prophecies”: by rushing to cash in on what seems most profitable, the capitalists in fact raise the cost and thus confirm the optimism that started the rush. The warnings of those who explain why the Stock Exchange or the mortgage market cannot go sky-high are made to seem ridiculous, since the system works.
    The crisis is a glaring confirmation of the criticisms addressed to financialised capitalism from an anti-capitalist of and/or global justice point of view. All the economists who praised the benefits of finance are today making big speeches about the need to regulate it.So the ideological landscape is changing extremely quickly and we have to take strength from the rout of the advocates of neo-liberalism.

    But for all that, the crisis does not spontaneously create a climate that is favourable to alternatives. All the recycled neo-liberals have turned the lukewarm water tap full on and they are multiplying their own ideological rescue plans based on transparency, prudential ratios, separation of investment and deposit banks, reintegration of securitization into the balance sheets, limitation on the remunerations of the top executives, a credit rating agency, reform of accounting norms, etc.

    It is a question, as one of them has put it, “of saving capitalism from the capitalists”.

  85. BLOGDIAL » Blog Archive » Mark Shuttleworth, gold, ubuntu, capitalism, freedom and software says: (permalink)
    November 17th, 2008 at 3:31 pm

    [...] fortune into a private currency? What sort of person are we looking for? It seems to me that a Mark Shuttleworth type is the most likely candidate; someone who has been made aware of these problems and the [...]

  86. Barx says: (permalink)
    November 17th, 2008 at 7:13 pm

    Talking about Capitalism . . . . Mark . .. Try to buy yahoo is a good Inversion?

  87. Paul Merchant says: (permalink)
    November 19th, 2008 at 8:59 pm

    Mark,

    Thank you for another thoughtful post. You might be interested to note that a study of economics — capitalist economics, to be precise — can convince people to start using Ubuntu Linux.

    Free markets, when properly regulated, naturally break down business models propped up by artificial scarcity. Most proprietary software licenses and the poorly imagined intellectual property laws of many countries place computer users in a world of artificial scarcity. The world of Ubuntu Linux, however, is one of capitalistic abundance.

    The free market forces of capitalism are known to quickly commoditize technology. Ubuntu Linux, in the same way, puts some of the world’s most advanced software at the fingertips of every school boy and girl.

    Finally, as with free markets, open source development is messy. Instead of depending on a system that is centrally planned by a few, Ubuntu Linux relies on the often seemingly chaotic collective knowledge of many. The leadership of you, Mark, and Canonical has been more about providing for the health of the community than the planning each improvement in Ubuntu Linux.

    After studying economics a few years ago, I realized that it would be wise to make Ubuntu Linux my primary operating system. Ubuntu Linux, like capitalism, won’t be going away anytime soon.

  88. Raghu says: (permalink)
    November 20th, 2008 at 7:56 am

    Mark,

    bit off topic question , I still cant get audio working in many VTC (.mov files)video’s i upgraded to 8.10 but with no change the behavior , when we can see good quicktime like player in ubuntu.

    -Regards
    Raghu

  89. Trevor says: (permalink)
    November 21st, 2008 at 9:33 pm

    Mark,

    When you say that firms will get so big they will have a monopoly, you forget that once they swell to this size, they suffer the same problems as a centrally planned government.

    Linux got to where it is without regulation. Microsoft anti-trust was bogus, and unnecessary. As long the government doesn’t enforce a monopoly (such as Carlos Slim’s telephony in Mexico), there will always be consumers who choose something different.

  90. utnubuuser says: (permalink)
    November 24th, 2008 at 1:39 pm

    Hello Mr. Shuttleworth et all

    Great article. Reminds me of some of the discussions during the somewhat stormy period of the ’80s. Back then, the fledgling ‘privatization’ movement was stretching it’s wings and making it’s first overtures to the Americas, so to speak. One of the signs of change, historically, is upheaval. We, together, have all been more aware of our world and the universe we’re living in, than any generations before us, and I’m of the opinion that what is happening globally, to economies, is of no surprise to anyone.

    PS. That OS you got started,… nice!

  91. Isaac Freeman says: (permalink)
    November 24th, 2008 at 2:16 pm

    Funny how you start off with the point that unregulated capitalism will lead to so many problems, and then all of your examples are ones in which the corporations are introducing regulations which favor them. The real problem is crony capitalism. DRM, patent abuses and government granted monopolies are all examples of regulation, albeit regulation promoted by certain companies for their own benefit. In the absence of these regulations, as you point out, we would be much better off and innovation would trump incumbency — but you miss the point that the complaints you make _are_ examples of regulation.

    http://mises.org/freemarket_detail.aspx?control=485

  92. The Houston Electrician says: (permalink)
    November 26th, 2008 at 4:35 pm

    I feel that as our economy grows, the need for regulation increases.

  93. Nasdaq7 says: (permalink)
    November 30th, 2008 at 1:17 pm

    But you are the biggest socialist out there Mark. You give away technology and hard work for free.

  94. Fervent Frog says: (permalink)
    December 1st, 2008 at 11:26 am

    Croak! Ribet! Ribet!

  95. Twilight says: (permalink)
    December 3rd, 2008 at 6:53 pm

    The way i think of it:
    Government is a function requiring ‘brains’ to make decesions which are good for the whole aswell as for the individual. Plus bandwidth, by this I mean the speed at which one can communicate decisions and gather data about the system.

    Along these lines of thought:
    Central planning= theoretically more intelligent in making decisions because it is capable of planning for the good of the masses aswell as that of the individual. However central planning suffers from a lack of bandwidth, the process of bureaucracy is slow after all. Not to mention that the people making the decisions are still human and make mistakes.

    Free market planning= Everyone for themselves, excellent bandwidth since everyone knows their own situation well and is able to execute decisions with little delay. However planning is inherently shortsighted, taking care of only the individuals problems.

    Therefore I would say central planning is the best BUT has technical problems when implemented by humans.
    Therefore what NEEDS to happen —-> implement government via computers, technology provides the answer.

    Movies like terminator and such aside, this needs to happen. Its the next logical step.
    Apply the usual methods: observe what decision makers do, how they do it, model the process, make a rule/formula/expert system/whatever which can do the same and implement it in code. You may still need people for the harder decisions but as long as you start thinking about this as nothing more than a technical problem then were getting somewhere.

  96. Lucksh says: (permalink)
    December 4th, 2008 at 1:29 am

    Yes, regulated Capitalism will promote better ethical behaviour within organizations, as well as reduce Cannibalism of young Corporations. I am a person of south Asian descent and all Major Corporations over-there, are abusing the power to attract politicians and destroy Small businesses. This behaviour has spread across to North America and some parts of Europe to certain extent specially with the current economic instability. I totally agree to this article, we need Capitalism to maintain our roads, health sector, education lines in the world, but with regulations to support the growth of “Society’s and environment sustainability”….couldn’t have said it better

  97. DieB says: (permalink)
    December 8th, 2008 at 9:46 pm

    as for my part of the world I see big companies collecting and sharing (PayBack and other customer-programs) data that would allow central-planing – the thing is surely abouthow to keep things working. hereby i guess open source is somehow a “new technology” in organizing work.
    And those two developments and others created by capitalism – will build the weapons and tools of a new society. I hope we will then be able to do it better than all those who came before … (in the big view of human history – from cromagnon man up to today)

  98. Texas Insurance Man says: (permalink)
    December 9th, 2008 at 3:02 pm

    I agree with Matt, strong regulation in several sectors will help out our current system considerably. I also agree that allowing companies to fail is an important facet of capitalism.

  99. Anoop John says: (permalink)
    December 15th, 2008 at 4:40 pm

    I couldn’t agree with you more. Regulated capitalism is the way to go. On top of quality regulators, transparency and accountability in the regulation process will help public get involved in the process. Given that the world is moving towards effective democracy, this involvement of the people in making decisions is only a natural extension of the process.

  100. ion says: (permalink)
    December 15th, 2008 at 9:27 pm

    If someone thinks socialism is good, come to romania, or go to russia and you-ll see why it is not.

  101. I, the people » Idealni kapitalizem says: (permalink)
    December 15th, 2008 at 11:24 pm

    [...] Povezava (besedilo je v angleščini). [...]

  102. Wynand Meyering says: (permalink)
    December 16th, 2008 at 12:39 am

    Google Adwords are becoming really expensive. I used to think Microsoft was the bad guy and Google was the good guy – now I know better. Both are monopolies that use monopoly pricing…

  103. Wynand Meyering says: (permalink)
    December 16th, 2008 at 12:50 am

    A code signing digital certificate from Verisign costs $431/year. That is quite expensive – especially for small software businesses and independent developers. It seems the only major real players that provide those security certificates are Verisign, Thawte ( owned by Verisign ) and Instantssl. They probably control 80% of the market.

  104. libervisco says: (permalink)
    December 16th, 2008 at 10:19 pm

    With all due respect Mark, I think you’re contradicting yourself. First you espouse problems of capitalism so far which when you look closely at them all come down to private interests abusing government power to their ends through lobbying and corruption. And then instead of recognizing that you proclaim to be a fan of regulation. But isn’t that exactly the problem? All these laws these private incubent interests push to work in their favor ARE the regulation in question. They know that the system we have is “regulated capitalism” and thus try to sway the regulation to their ends.

    Your suggesting of regulated capitalism is only more of the same. I agree with you that private companies should play more of a role here, but I don’t agree that government should play ANY role whatsoever, not even as a lawmaker.

    This isn’t a failure of capitalism, it is a failure of state regulated capitalism – state regulated markets.

    Mark Shuttleworth says: Yes, I suppose you are right. These are failures of regulatory authorities. But ask yourself this – if there were NO regulation, would we really have seen a better outcome? Some people think that the absence of regulation leads to a freer, more competitive market. I think not. I think that an unregulated market tends to monopoly, not contestability. In this specific case, I think that big banks would have brutally eliminated newer, smaller, more ethical, more risk-averse banks. So we’d have seen fewer, less-accountable institutions, and been even worse off.

    What I’m arguing for is more effective regulation, not the absence of regulation. The truth is, it is extremely hard to regulate something as rich as a large bank. You have to hire amazingly insightful people, and pay them accordingly. And you have to fight hard against deep lobbying pockets. And you have to be willing to take risks, which means you have to be willing to accept mistakes, which is hard in matters political.

    Mark

  105. sohbet odalari says: (permalink)
    December 17th, 2008 at 6:02 pm

    that actually regulates capitalism

  106. kikl says: (permalink)
    December 17th, 2008 at 9:11 pm

    With all due respect libervisco:

    The absence of regulation would destroy the free market.

    The free market is in need of regulation just like a football game needs a playing field, a referee and rules. Without a referee, without a playing field and without the rules of the game, you won’t have a football game. The same must be said about capitalism. Capitalism without rules is anarchy. Look at Somalia. That’s a society without rules, it’s freedom without limits. Whoever has more weapons wins.

    Just take away the justice system, a government entity, and any decent form of capitalism is abolished! Why? because steeling is more profitable than growing crops. If that’s the kind of society you want, then X%&/§$ you!

    Any sensible discussion is not about whether we need regulation, we need it, there’s no doubt about it. We should really talk about what kind of regulation we need.

    Regards,

    kikl

  107. Max Kanat-Alexander says: (permalink)
    December 18th, 2008 at 4:09 pm

    > [snip] if there were NO regulation, would we really have seen a better outcome? [snip]

    I’ve thought about this a lot. If we phrase the question as “civil anti-trust regulation vs. no anti-trust regulation,” it becomes very muddy and unresolvable, because neither of those are actually the basic issue. I figure that any time a question won’t resolve, either you have bad data or you’re asking the wrong question.

    There *are* free market examples where large near-monopoly companies have been challenged by smaller competitors, and where real competition has ensued (for example, AMD vs. Intel in the PC CPU market), so we know that it’s *possible* for an unregulated free market to work, at least in individual cases.

    Also, theoretically, it’s possible for a “benevolent monopoly” to come about, where only one company produces a product at sufficient quality and cost to succeed.

    The problems come along when a Big Company does something unethical to actually block the ability of a Small Company to do business. That is the point where a government needs to step in–not long after, where the Big Company has eliminated all competitors through unethical means and become a monopoly, and now “needs to be broken up.”

    So, for example, I wouldn’t be in favor of government regulation of “Can we buy out this business?” But I would be in favor of regulation that says, “It is illegal to maliciously undermine a business and then do a hostile takeover.”

    What we lack, really, is a code of business ethics codified into a criminal code of law. Unethical businesspeople are far more damaging to society than a thief, and yet only the thief can go to jail (excepting certain defined *personal* violations of ethics, like embezzlement). As long as we allow businesses to trample on the “human rights” of other businesses, we’re always going to have problems down the line, and we’re going to depend on these unwieldy regulatory agencies that we have now.

    So I’m in favor of codifying business ethics into laws. If you want to call that regulation, then I’m in favor of that sort of regulation. But not, to a large degree, the types of “regulation” that we see now–attempts to fix the problem far, far from its source, that only complicate things and are as likely to cause problems as solve them.

    -Max

  108. Roberto A. Foglietta says: (permalink)
    December 19th, 2008 at 12:20 am

    Capitalism was starting to die in the same day communism fallen because that day we lost the main reason to be good capitalists: build a better system than enemy’s one. Controlled capitalism is a way to make people pay for the funeral of the capitalism. In fact money drive economic as well as they drive politics. Someone starts to make money, much more money s/he makes, much richer s/he will became. Much richer s/he becames, much money s/he could do. After a certain grade of richness he/she starts to buy media (tv, radio, news paper, advertise) in order to “educate” people to her/his value. S/he drives the consensus and the consensus drives politicians. So controlled capitalism means that the people pay taxes to support the welfare system but money for welfare are spent to save banks from their bankruptcy instead (supporting the debt of those have been driven to buy what they cannot afford sounds as a better way than helps banks directly). After a certain degree of richness the money have not a proprietor any more but they became companies which have their own aims and the people (as humans) loose not only the control of their economic and politic system but the control of their own natural environment.

    We need to think our economy in a completely new way to find a way out of this situation. We have to challeng our believing in order to do that. I have not a solution obviously but I have a small idea about a possible direction. Imagine a capitalist 2.0 company: its value is quantized and you can buy as many quotes as you can and you will be paid back in relations of the number of your quotes (and performance as well, obviously). Unlike the capitalism 1.0 the number of the quotes would not modify that your opinion is evaluated as one head. Probably many high-level employees would buy one quote in order to drive her/his company a little bit. The problem of many peers drive a big company exists but the problem of who controls the economy would not exist any more. I think the technology and the education could solve the first problem but could not solve the second. Under this conditions a monopoly would not be a such big problem until many people could buy a quote of the monopoly control (citizenship is that quote in some kind of social business). The most interesting aspects of this vision are: a) you can collect a lot of money and you can buy quotes of many companies but you never would have the power to drive one of them completely. This would be the same for any media company (tv, radio, news paper, etc. etc.) so if no one could drive the media then no one could drive nor the consensus nor the politics; b) as far you became rich enough to satisfy all you material dreams then as less money value because they could not buy the power of control. You can buy many houses but after a certain numbers, it would be impossible to maintain the control over all of them. You need to rise a company to manage all those houses but the company could not be controlled completely by one person only. It is the end of capitalism because it is the end of the dream that a man could became so rich to buy everything. Every man could became rich but after a certain degree of richness s/he could not manage the richness by her/himself so s/he lost progressively the control of her/his money then cease the reason to be excessive rich. Under these circumstances no one would became as rich as possible but only rich enough. Differently than communism we still have enough freedom to let our individual ego find in being brilliant artists, musicians, developers, plumbers, lawyers, etc. etc. the meaning of the life.

    We thought the battle was capitalism against communism instead the battle is always be for freedom. Freedom means that everyone should be enough free but this means that no one should control much more than her/his life. My freedom ends where starts others freedom. Freedom to manage money should limited in order to let people manage their own existence.

    We need to think in a completely new way to find a way out of this situation. I have not a solution obviously but I have a small idea about a possible direction. Imagine a capitalist 2.0 company: its value is quantized and you can buy as many quotes as you can and you will be paid back in relations of the number of your quotes (and performance as well, obviously). Unlike the capitalism 1.0 the number of the quotes would not modify that your opinion is evaluated as one head. Probably each employee would have one quote in order to drive her/his company a little bit. The problem of many peers drive a big company exists but the problem of who controls the economy does not exist any more. I think technology and education could solve the first problem but could not solve the second. Under this condition a monopoly would not be a big problem until many people could buy a quote. The most interesting aspects of this vision are: a) you can collect a lot of money and you can buy quotes of many companies but you never would have the power to drive one of them. This would be the same for any media company (tv, radio, news paper, etc. etc.) so if no one could drive the media then no one could drive nor the consensus nor the politics; b) as far you became rich enough to satisfy all you material dreams then as far money loose value because they could not buy the power of control. You can buy many houses but after a certain numbers, it would be impossible to maintain the control over all of them. You need to rise a company to manage all those houses but the company could not be controlled. It is the end of capitalism because it is the end of the dream that a man could became so rich to buy everything. Every man could became rich but after a certain degree of richness s/he could not manage the richness by her/himself so s/he lost progressively the control of her/his money then cease the reason to be excessive rich. Under these circumstances no one would became as rich as possible but only rich enough. Differently than communism we still have enough freedom to let our individual ego find in being brilliant artists, musicians, developers, plumbers, lawyers, etc. etc. the meaning of the life.

    We thought the battle was capitalism against communism instead the battle is always be for freedom. Freedom means that everyone should be enough free but this means that no one should control much more than her/his life. My freedom ends where starts others freedom. Freedom to manage money should limited in order to let people manage their own existence.

    If you had read my whole comment please take care to left me your opinion on my blog also: http://robfog.blogspot.com/2008/12/freedom-econ.html. If this practice to cross-comment a post with another post would not be considered polite then ignore my request, please.

  109. libervisco says: (permalink)
    December 19th, 2008 at 6:08 pm

    Thanks for the reply.

    Unfortunately I think you’re going after a very elusive goal. It’s been tried time and again and always resulted in the same thing, a collapse. And every time some people come along and say how we just need better regulation, just fine tune the system, but it never really changes the ultimate outcome. I think the problem is much more fundamental than that, but every often when someone suggests this people run away. The fear kicks in and default responses ensue instead of, at the very least, trying to understand what’s being suggested.

    Mark Shuttleworth: > I think that an unregulated market tends to monopoly, not contestability.

    Government regulation of the market is based on force rather than incentive. Every single regulatory rule either makes a prohibition or coercion and with it leaves certain businesses at an advantage compared to others. I think this is what contributes to the rise of monopolies more than anything that is void of force. Incentive is merely an incentive, but it still leaves you the possibility to ignore it and go against the grain risking loss of customers or huge success. By incentive I mean what most call “voting with your wallet”, but also ostracism, boycotts etc.

    I think government only helps keep the current monopolies going because humans are naturally driven by self-interest, *including those in the government*. Sooner or later the lobbying attempted by the big ones will be successful and laws that help lock their monopolies in place will be passed.

    And the anti-trust laws can only do so much. They only pay lip service to the problem and are far too inefficient.

    > In this specific case, I think that big banks would have brutally eliminated newer, smaller, more ethical, more risk-averse banks. So we’d have seen fewer, less-accountable institutions, and been even worse off.

    Where did those big banks come from in the first place? You may be familiar with the Fractional Reserve Banking practices (common in modern banking). I wonder if you’re familiar with the inherent flaw in it. It effectively allows banks to lend money they don’t have, charging interest in the process. This allows them great profits while causing inflation. This kind of practice is foolish because it exposes banks to the risk of quick collapse should there be a “bank run”, yet they do it anyway. Why? Because they expect a bail out. And the only one that can promise such a bail out is the government because no other company would buy a dead bank. The government, by its nature as a monopoly on force, simply does not have the accountability that private companies have.

    So what happens is what’s happening today. Nationalizations of the whole industries, at the taxpayer’s expense, only to do what? Prolong the crisis and have the taxpayers pay even more in the future. Regulations may change somewhat, but the fundamental problem remains.

    > kikl: The free market is in need of regulation just like a football game needs a playing field, a referee and rules.

    But a free market is not a football game. If you have two people with something to trade you have a free market. There needs to be no third party to oversee their transaction for that transaction to be made. If the deal is bad for either of them it simply wont happen. If either tries to steal, the other one can immediately defend himself. Unfortunately, the law here in a lot of places actually denies this right and goes so far as to disarm people of means of self-defense and thus cripple this particular market dynamic. Their substitute? Police.. which usually comes once the crime is already committed and damage done.

    I don’t see a free market as a “system” that needs to be built by someone and then implemented. It emerges naturally as individuals interact with each other in pursuit of self-interest.

    > Capitalism without rules is anarchy. Look at Somalia. That’s a society without rules, it’s freedom without limits. Whoever has more weapons wins.

    I think rules are emergent, not imposed. Order too is emergent, not imposed. Violence will only happen among people believing in violence. Defending government regulation is an expression of such a belief because government regulation cannot happen without the threat of violence. Thus what you’re defending is part of the problem rather than a solution, a problem evident even in Somalia. Factions that were fighting were fighting to become a new government and foreign forces were encouraging this by supplying the winning factions with weapons in the name of supposedly establishing one of them as the new government and “re-establishing” order. Thus incentive was provided for more violence, rather than less. This reflects a problem of the government oriented mentality, not of the free market.

    Indeed, the Somali market skyrocketed in their stateless years *despite* the faction wars.

    > Why? because steeling is more profitable than growing crops.

    What else is government doing than stealing? If you believe in absolute property rights as any capitalist would be inclined to then I probably don’t need to be convincing you that taking your property against your will is theft. Somehow you make an exception when it is the government doing it. Of course it is more profitable, then, when it is actually made legitimate, through government, to steal.

    If you actually allowed and educated people to hold on to their property, their means of self defense and be willing to use those to protect it themselves, acts of stealing would easily become far more expensive and thus far less profitable.

    Well, I don’t want to show disrespect. I am expressing my honest opinions. I didn’t develop them over night. I was a skeptic too, but when everything else fails isn’t the time to finally start looking at what we are usually inclined to ignore completely? All I ask is that you think about it rather than dismissing off hand.

    Thank you

  110. kikl says: (permalink)
    December 19th, 2008 at 7:19 pm

    “Order too is emergent, not imposed.” That’s interesting. Just ask all those people in jail, whether the order is imposed or not. That’s ridiculous.

    “If you believe in absolute property rights as any capitalist would be inclined to then I probably don’t need to be convincing you that taking your property against your will is theft.”

    If you believe in “absolute property rights”, then you need somebody to enforce these rights. That somebody is called government. Therefore, you need a government that enforces rule, for example “absolute property rights”, if you want capitalism to work.

    Wake up from your dogmatic slumber. Your just as brainwashed as the communists and you can’t see the obvious. Capitalism without rules doesn’t work!

    Regards,

    kikl

  111. Kevin Dean says: (permalink)
    December 19th, 2008 at 7:32 pm

    >> The free market is in need of regulation just like a football game needs a playing field, a referee and rules. Without a referee, without a playing field and without the rules of the game, you won’t have a football game. The same must be said about capitalism. Capitalism without rules is anarchy. Look at Somalia.

    Somalia is a horrible example. Look at how much money, time and weapons were dumped into the hands of Somalian warlords by the United Nations who has, since the collapse of the Somalian government, been trying very hard to put a government in place.

    Of course, while we’re on the subject of Somalia, I ask that you look at how much has blossomed in Somalia since the government there toppled. Infant mortality has dropped. Maternal mortality has dropped. Number of Somalians with access to a healthcare facility has doubled. Babies with low birthweight has fallen from 16 in every 1000 to .3 in the same.

    The assumption that people are too stupid, or somehow unable, to acquire the services they want (like clean drinking water or appliances that don’t explode when you plug them in) is insulting. If you’re talking police services or operating systems, people with skills will create a product or service that other people are willing to exchange for it and NONE of this requires coercive force.

    >> because steeling is more profitable than growing crops.

    I invite you to read from Frederic Bastiat, specifically, the Parable of the Broken Window. You’re seeing the short term, as he puts it “the seen”. What you fail to see is that “unseen” or the return for FUTURE goods. Every human being is different. We contribute different skills and talents to the marketplace and that specialization means that we’re each able to profit differently from things. The farmer may be capable of growing more healthy crops than you, but you probably build better furniture or whatever it is that you do. In the long run, tapping YOUR talents to produce a good or service and then trading it for the thigns you can’t easily produce, while ensuring you’ll be able to make future trades, is more productive.

    And before it goes there, no, it doesn’t require people “get wise”. People would figure this out pretty quickly, and indeed, most have. I would assume that the last time you were hungry, you went to a store and purchased some food. Was it fear of government retaliation that made you purchase that food or was it simply easier for you to exchange the money that you have for it? The idea that ONLY government can administer justice is also a bit odd. Surely justice is something in demand, and like all other products in demand, can be met by people in search of a profit by producing happy customers. Even without government police, theft wouldn’t simply be woven into the fabric of socieity. Theft is wrong because it deprives people of the fruits of their labor; it hurts people. Even in a world completely devoid of justice services (and I’m certain they’d exist, free of government), a thief would be expending a lot of energy avoiding the people, family and friends of those they harm.

    >> Any sensible discussion is not about whether we need regulation, we need it, there’s no doubt about it. We should really talk about what kind of regulation we need.

    Indeed, Mark hit the nail on the head when he said that good regulation is needed. Also as he pointed out though, it doesn’t need to be goverment regulation, done at the point of a gun.

    The best regulation is the simplest. Eliminate force and let customers choose. If a service meets a customer’s needs, those customers will continue to pay the service provider. If the service doesn’t meet their needs, they stop purchasing it. This is market regulation and without the voluntary support of customers, can’t exist. Bad business models fail and “bad business model” is defined as “not providing something people value”. Indeed, if people value a clean environment, someone will find a way to profit from cleaning it. Indeed, if people value fresh foods and clean water, someone will find a way to profit from providing it.

    Give humanity some credit. We’re all amazing individuals.

  112. libervisco says: (permalink)
    December 19th, 2008 at 7:50 pm

    > That’s interesting. Just ask all those people in jail, whether the order is imposed or not. That’s ridiculous.

    You compare people in jail with common individuals? Also, the imposed order you speak of in jails is nothing short of justice as revenge, not justice as repairing the damage to those damaged. I think justice shouldn’t be about revenge, that’s just adding more violence to violence.

    > If you believe in “absolute property rights”, then you need somebody to enforce these rights. That somebody is called government.

    No, that somebody is called Danijel, it’s me. I can defend myself or hire someone to defend myself out of my own free will. I don’t need government to impose its inefficient protection service and then force me to pay for it whether I like it or not.

    Isn’t THAT more obvious than seeking a third party that doesn’t even know you nor your situation and can’t react then and there when you need it?

    Think about it please.

  113. kikl says: (permalink)
    December 19th, 2008 at 7:58 pm

    “I can defend myself or hire someone to defend myself out of my own free will.” So defending yourself is merely a matter of the money you need for hiring someone. Somebody, who has more money than you, will just buy your defender and you will be defenseless. The free market does not provide any justice, it is in need of justice and therefore just rules must be imposed. Wake up man!

    Regards,

    kikl

  114. libervisco says: (permalink)
    December 19th, 2008 at 8:11 pm

    You’re ignoring what I said kikl. I said I can defend myself OR hire someone to defend me. It’s not like I can’t do both and like it’d be so extremely expensive to both own a gun and have a defense agency. Regardless of whom comes to my doors, even if it was my defense agent, showing intent to hurt me, I can defend myself.

    Of course, you’re playing the game I’ve seen played out so many times by now. Pushing your negative scenarios to ever greater extremes until you can’t come up with any more. It usually ends with running in circles, unless you actually start seriously considering what I’m saying instead of just being dismissive on sight.

    Just like any other business defense agency in question must be accountable to keep a reputation. Too many of these cases of defense agents being turned against those they’re supposed to defend is likely to result in loss of revenue and market outcry.

    Yet you’re defending an organization which goes against me by default and yet still remains fallible to bribe you’re describing. It pretends to protect me and sometimes perhaps even manages to do so, while stealing my money in the process and thus being the enemy of my property rights all along.

    That’s also consisted with what I usually encounter with dismissive posters; as they begin coming up with super extreme negative cases they don’t realize those same cases already apply, with government “regulating” things.

    I should wake up? Geez, right back at you man.. If wars are fought with guns, then by definition governments are constantly at war, with their own citizens. Break a law prohibiting a non-violent crime and ignore court orders long enough and what do you face, a gun! Refuse to pay taxes (refuse to get stolen from) and again ignore their court orders, and what do you face, a gun to your face. If that means “being protected”, if that’s the order you’re talking about, then I think I’ll pass.

    But I’m not give much choice am I? Why am I not being given a choice to live my life as my own?

    Again, I ask you to start thinking and stop being dismissive. It wont hurt I promise and it wont all of a sudden make you into a nut that you apparently somehow imagine I am.

  115. kikl says: (permalink)
    December 19th, 2008 at 8:29 pm

    I’m not defending any agency going against you. Your just completely dillusional to believe that you can defend yourself.

    “But I’m not give much choice am I? Why am I not being given a choice to live my life as my own?”

    As long as you choose to live together with other people, you will either act as a ruthless dictator or choose to live according to rules that the majority agrees upon. The latter is called democracy and it will restrict your freedom. In addition a number of basic human rights should be defended irrespective of the majority will.

    Regards,

    kikl

  116. libervisco says: (permalink)
    December 19th, 2008 at 9:27 pm

    > I’m not defending any agency going against you.

    You’re defending government.

    > Your just completely dillusional to believe that you can defend yourself.

    You can’t be serious man. :) I know you disagree, but I didn’t expect this. Ok, well, first of all you can’t exactly speak in my name and tell me what I can or cannot do (remember John Locke from Lost), so I’ll assume that if you’re making this claim you actually believe you aren’t capable of defending yourself. So if someone suddenly attacked you on the street you wouldn’t be capable of using your arms to resist? Or if someone threatened a gun at you, and you carried one for self defense too (assuming this was legal since I’m speaking about a hypothetical situation where you actually have that right), you wouldn’t know how to pick it up, aim and shoot? I know it probably takes training, but your statement implies you aren’t capable of self-defense, period, so no training would help you, right?

    I think you’ll have to rethink that one. Of course, the keyword again is thinking, not saying anything you can come up with to dismiss.

    > As long as you choose to live together with other people, you will either act as a ruthless dictator or choose to live according to rules that the majority agrees upon.

    That is a false choice. It would be near impossible to become a ruthless dictator if all of those other people believed in self-defense (which I seriously believe is a natural tendency of any human, even animals) and were actually allowed to exercise it (and without a government forcefully banning it, they would). As for living according to the rules of the majority that’s just an excuse for mob rule. If everyone is willing to defend themselves then the classic definition of liberty as “whatever floats your boat so long as it doesn’t sink mine” is perfectly and naturally applied by everyone involved and without anyone being above anyone to decree this as a rule.

    My freedom ends where yours begins. Don’t violate me and I wont violate you. If I try to violate you I risk being hurt by you. It’s just like the fact that if you decide to jump off a skyscraper you may very well die, a natural consequence. There was no government to decree the “law of gravity” into existence nor was it necessary for any other action-reaction process to be implemented.

    > In addition a number of basic human rights should be defended irrespective of the majority will.

    And who will decide what those rights are? If humans are fallible and corrupt, and your argument is pretty much founded on that belief then doesn’t it follow that we should not, under any circumstances give any one or few humans the right to decide *anything* whatsoever for the rest?

    That’s why every government corrupts. That’s why all governmental regulation fails. It cannot NOT to fail. People are naturally self-interested. Their power to govern should thus only be limited to the government of self and self only, not over anybody else. We need no single government. We need as many self-governments as there are individuals in the world.

  117. kikl says: (permalink)
    December 20th, 2008 at 4:05 am

    “I know it probably takes training, but your statement implies you aren’t capable of self-defense, period, so no training would help you, right?”

    Oh that depends on your opponent.Your completely dillusional to believe that you can always defend yourself with a gun. Your just a human being with limited powers.

    “It would be near impossible to become a ruthless dictator if all of those other people believed in self-defense.” Just about everybody believes in self-defense.That’s human nature. Nevertheless, world history has innumerable examples of ruthless dictators. So your reasoning is pretty flawed.

    “My freedom ends where yours begins. Don’t violate me and I wont violate you.” That sounds reasonable, but we may disagree on whether one of us has violated the others rights. Who’s going to decide who’s right? An independent judge in a fair trial, right? Or are you going to pull your gun to defend your rights? That’s anarchy your advocating.

  118. libervisco says: (permalink)
    December 20th, 2008 at 5:33 pm

    > Your just a human being with limited powers.

    So is the attacker and so are the police which you somehow think are gonna be better suited for the job of defending you, even though they aren’t right there and then when you are being attacked. Your point is completely moot. As for being delusional, I can say exactly the same thing with you, but it’s so obvious I don’t need to repeat it in my every post. ;)

    > Just about everybody believes in self-defense.That’s human nature. Nevertheless, world history has innumerable examples of ruthless dictators. So your reasoning is pretty flawed.

    History is also full of governments and people believing in violence that goes beyond self-defense, like you, to supposedly establish some perverted form of “order”. Who do you think is easier to conquer to a ruthless dictator, a society of people who think violence against them is alright and thus let governments violate them as a matter of course, or people who reject all violence against them and thus readily defend themselves? I would think a government makes it far more easier for ruthless dictators to rise for power.

    > That sounds reasonable, but we may disagree on whether one of us has violated the others rights. Who’s going to decide who’s right? An independent judge in a fair trial, right?

    Exactly man. :) I never said I don’t believe in arbitration (courts). In fact the only thing I reject is coercive monopolies, therefore, a monopoly on the arbitration services. We can agree to choose a trained third party arbiter and agree to accept his judgment on our dispute and his defense agent as the one who will enforce the decision.

    Even if you want the court process to resemble the one we have here you could have it (if there’s a demand there’s someone trying to capitalize on it), albeit you and most people would probably quickly realize that punishment based on revenge instead of repairing the damage and true rehabilitation isn’t a very effective way of dealing with the violators of individuals.

    I’ll take the liberty of guessing that you didn’t see that one coming in which case I think that underscores my point about you simply trying to dismiss everything off hand instead of actually understand where I’m coming from.

    I’m advocating more order than you’ll ever have with a government (which is effectively just a rogue corporation everyone is deceived to see as legitimate).

  119. rshortman says: (permalink)
    December 21st, 2008 at 7:47 am

    For the most part, I agree with you Mark. Proper regulation over capitalism would have prevented this problem to begin with, I’m sure we can all agree on that. I am no expert on the economy, but it just seems to me that the government is blind-sided, taking a position where they feel they have no choice in this matter. That’s a natural reaction for any bureaucracy, particularly one as large and complex as the US Government. Nobody wants to take risks anymore. Nobody wants to cause waves. They are satisfied with the status-quo for two reasons. 1. they’ve nested themselves into a comfortable little niche within bureaucracy and don’t want to step out of their comfort zone and actually WORK for their six-figure salaries. or 2. They feel change will get them into trouble and blame with be placed on them.

    That said, this is the accumulation of years and years of government growing too damn big and bureaucracy growing out of control. In the end, you have an weak, spineless, inefficient government that is afraid of creative destruction, afraid to let go, let things collapse, let the chips fall where they may. Government would do our children and our children’s children a terrible disservice if they do not let these corporate giants die. It will hurt at first, no doubt about it. It will suck immensely! That’s the price we pay for allowing democrats to control things with corporations in their back pocket. But with time, it will pass and the economy, America, capitalism and the world at large will be better and stronger for it. Perhaps in the future, we will learn from our mistakes and learn to regulate more wisely.

    No matter how much we lose if we let these guys die, we’ll lose much more if we allow Government to grow and socialism to take over.

  120. Kurt Rowley says: (permalink)
    December 22nd, 2008 at 5:30 pm

    Thanks to the posters here for some very clear-minded thoughts on the global economic crisis. The old Capitalism that could efficiently allocate resources using principles of comparative advantage and the wisdom of the players pursuing self-interest in an open and honest playing field is gone. The players have become befuddled, they do not understand the game anymore.

    I agree with Mark that capitalism must be regulated by competent regulators who are detached from commercial interests. However, well-intended but poorly conceived regulation helped us get into this mess. The regulators were trying to perform social engineering, to create an ownership society. The regulators in this case were finessed by short-sighted free market players. Governments are not skilled at upgrading economic systems, they are not designers. The regulators did not follow competent design practices in creating their regulations, they did not understand the incentives their new rules would create. How can we ever be sure that regulators can maintain the code of Capitalism? The system has become too large and complex, the rules too poorly enforced. There is too much spaghetti code and design processes are weak.

    So who has the ability to design a better economic system? I like the goal of direct democracy, of skilled participant designers. For example, Donohue’s ideas about ‘open source values’, those are good lessons learned about participative design. To add to his concept of values, I think we can also learn from the open source design process, think of the systematic processes followed when a community creates a software product to replace a legacy system. We can start with core structures that are known to work, consider lessons learned by the failed past systems, improve the theory of operations, add new and better methods, find sponsors to help implement the new system incrementally, encourage early adoption of the new system by people who are motivated by enlightened self-interest (a desire to improve the system and world they live in), then allow the best ideas to freely emerge.

    Like any open source system, a new economic system may need to be a parallel system for a time, until it is working well enough to ‘take over’ many of the functions of the previous system.

    Maybe better regulation of capitalism is a good stop-gap measure, but I believe we really do need a new economic system alternative. Not capitalism, socialism, or any other -ism that has been tried in the past. Our conditions have never existed before, our needs are unprecedented, we need a new hybrid system with some innovative features.

  121. lolz says: (permalink)
    December 28th, 2008 at 4:27 am

    1. Responsible Capitalism? There is no such thing. Capitalism is a system that relies on the profit system, and as such, is unsustainable. Only so much profit can be made because there is only so much profit to be made. It is a finite system, and I think that the most recent of economic crisis to strike the leader of world capitalism is the death knell for a system that is old archaic and outmoded. If you talk about the “consequences” of the Soviet period, how about the consequences of the 3 economic collapses the United States has suffered just in the 20th century, compare that to one economic collapse, of a system that by no means was socialism as defined by Karl Marx in the Communist Manifesto. All three of these events have had long lasting consequences years after they happened, just the same as in the soviet union. Not to mention the fact that Russia is experiencing super exploitation at the hands of super-wealthy oil barons who bought up all the natural resources after the collapse, that is the real source of Russia’s problems today, without that they could have recovered fine from the economic collapse.

    Free market capitalism I can completely agree is devoid of justice. The legal system is completely in favor of those who can afford to pay the cost of lawyers, law advice etc. Under capitalism no-one is equal before the law. The rich and famous get away with crimes that “average” people would get thrown in jail for years for, simply getting off with a slap on the wrist. Which is complete and utter bull-shit. Due to the out of control nature of capitalism money has increased peoples ability to gain power and manipulate the government and law making agencies of this government to such a degree that anything short of a revolution will not be able to “reform” it along with all of its crooked, corrupt, and otherwise incompetent organisms. Evidence of this can be seen quite clearly in recent news. Over 300 civil “servants” in Illinois have been found guilty and/or charged with corruption, slander, etc including the man who was trying to sell obama’s chair in the senate. Strangely he has no connection whatsoever to obama…weird. The corruption present in the government and civil service is so deep that it can never be reversed, or fought, corporations are too deeply entrenched and invested to ever be completely removed without a major revolution and re-structuring of society.

    Perhaps when we see the “Great depression” life style return to average americans they will open their eyes as they did in the early 1900s and a real working class movement will begin, and the government will be completely rebuilt to embody the interests and goals of workers, farmers, and average Americans across this country. So in a way I hope this crisis goes on and on, and drags on and on for decades (which it could, it has in the past look at the great depression, it wasn’t just from 1933-39, but went well into 1940′s until nearly the end of the second world war and the increase in production that gave it that spike). Oh and folks don’t count on the government to start massive public works programs to re-vitalize the economy, because it didn’t really work all that well in the 30′s actually, what actually got the US out of the great depression was not the public works projects, it was wwII. So what is in store for the US now? The capitalists need a WWIII to get themselves out of this mess, so who is willing to sign up for the draft? Be the first on your block to come home in a pine-wood box!

  122. kikl says: (permalink)
    January 4th, 2009 at 10:28 am

    The economy as a whole is so complex that it is difficult to tell, whether a certain event occurs due to some regulation. Maybe we need some kind of laboratory for testing how a certain regulation actually works before implementing it. Just a thought…

  123. Citizen says: (permalink)
    January 20th, 2009 at 7:30 pm

    Well Mr Shuttleworth..

    I think you spoke too much.

    You cannot say what you said about Russia and what you’ve felt in 2000/2001.. Yes for sure people may have told you that their pains were due to Russian Communism! Of Course! the Russian Gov and the US told them that!..
    well You did not (I said did not because may since you ve written this text you ve search about what is really communism I means its real fundamental principles. and you ve understood that The Real Communism has never been applied in Russia or any other big country.) understand what communism and socialism really are.

    to simplify everything you may consider the aim of each system : capitalism is money or profit.. and communism is society. You spoke about Railways. just look what happend in the UK. you spoke about power plan. just look in Europe. they what to ‘open to the concurrency” the market of electric power. But in that aim they had to ask to the public society to increase the price from less than 1€/KWh (in France for example) to around 6€/KWh. because at less than 1€/KWh no concurrence is possible. So can’t blame public society!
    I’ve still not told that during all this public powered era (which is still not ended) EU was on the top in research for renewable energy (wind mill, hydrogen cell, nuclear fusion..)

    just look at what you’re promoting open source and community.. why do we develop free softwares? for money? no. to be competitve? no. to reach 30% of the market? no. for us? YES! for all of us. to get the software we want away from any economic reason or lobbiyng (maybe a little in fact). this enter in the ideals of primitive socialism. and as you can see decision are taken by a central power which is independent from Canonical.
    Well now just consider Canonical is a State and Ubuntu a public company and you’ll get an idea of socialism society

    I Can’t tell you how it is in a socialist country because i don’t know. and anyone can tell you.
    But we ve seen that capitalism fails too often. Why do you (not only you) refuse socialism? You don’t know what it is! We all don’t know how it looks like! It’s just because you’re scared!
    Remember your mother: ‘Don’t say No before you tasted’

    regulated capitalism is just like Brussels sprout with ketchup.

    [Sorry for my broken English]

  124. Igor Salmin says: (permalink)
    January 21st, 2009 at 3:44 pm

    Greetings from Russia!

    I’m not a fan of historically real socialism. Capitalism is more perspective system for development. The Socialism is designed like a Mainframe, the architecture of Capitalism is closer to networks. Time of mainframes has passed. Globalisation will be successful only at the network architecture of system. But Capitalism has one fundamental problem which brakes its further development. The scale of the project “Capitalism” and speed of changes occurring in it does not correspond to the limited possibilities of out-of-date “Operating System” on which base it is created. Initially “Operating System” has been developed under the architecture of Mainframes. The problem is aggravated with that its source codes are closed. Also timely modification becomes almost impossible. Below I will explain these statements.
    The fact that the modern human society and the computer network are information systems allows a comparison to be made revealing a deep similarity between them. The key component of a computer network is the operation system with a nucleus containing algorithms and source data necessary for function and interaction of application programs. In the human society, the culture is an analog of the operation system. In its nucleus, the culture contains an ordered system of basic values determining the objective, not declared, morals and respective stereotypes of attitude to events occurring in both internal and outer worlds that manifest themselves in the human behavior in actual life situations. The nucleus of the Biblical culture dominating in the today’s society is for the most part a “closed source system” in which the tacit information quite often overrides the one proclaimed. It could be supposed that that was made in order to protect the “copyright” of developers and owners of “source codes” pursuing their lucrative purposes. It is known, however, that anything what is made by a human can be understood by another one. These “source codes” were revealed by a group of individuals named “Internal Predictor of USSR” in late 80′s.
    Irrespective of their element base and programming languages, all types of closed source information systems have a considerable objective disadvantage: they loss the prediction stability in certain circumstances. Starting from a certain level of system complexity, the task of introducing changes into and maintaining the performance of the system becomes non-trivial. It is far from being simple to ensure coordinated actions of many people who often do not know each other, work at various places and speak different languages. The closed state of source codes or their fragments leads to the growth of conflicts inside the system and it begins to crumble. Quite often, emerging problems are mended using local “patches” that leads to greater complexity of the system with the loss of stability ending in final operation failure. Similarly to the algorithm described above, a culture based on principles of “esotericism” suffers the risk of collapse when the resources of the “initiates” are not sufficient to “patch the gaps”, that is, to solve problems as soon as they occur. The system eventually “falls” with the increase of the time pressure. Here, opposite to computer systems, one cannot really avoid unpredictable effects by just pushing the Reset Button.
    Therefore, the new network culture is necessary for successful development of the project “Capitalism” with an open initial code. In Russia the kernel of such culture is developed, source texts are laid out in the Internet. Source texts can be downloaded from a site http://www.dotu.ru,then are compiled, installed, tested and use.

    Igor Salmin

  125. vitaminD says: (permalink)
    January 27th, 2009 at 10:39 am

    “Regulated or derregulated markets make no difference if you took the redpill.”

    At least Mr. Shuttleworth wants (I hope so) to change the cultural conditions trough the wire. Open Source is the next step of mankind regarding to our globalised world. The developer is at the same time the consumer – It`s definetly a great great step into a ONE OPEN SOURCE SOCIETY let us be free and let us life in creativity and so on (now I`m tired).

    “Uomo universale”

  126. Boycott Novell » IRC: #boycottnovell @ FreeNode: January 30th, 2009 - Part 2 says: (permalink)
    January 31st, 2009 at 4:01 am

    [...] http://www.markshuttleworth.co&#8230; [...]

  127. Andre says: (permalink)
    February 5th, 2009 at 4:24 pm

    Simply read a bit about ordoliberalism.
    http://en.wikipedia.org/wiki/Ordoliberalism

  128. Marco Costa says: (permalink)
    February 6th, 2009 at 8:33 pm

    Mark, you say that capitalism should be regulated, and yet you say that state control of enterprises would be totally undesirable because ‘state enterprises are rarely if ever allowed to fail’. Well, regulatory agencies share that same perk. I’ll give you the SEC as a recent example of an abysmal failure that will most likely remain in place, if it doesn’t get a funding raise.

    Your argument is also begging the question; if it is possible to have regulators that are superbly talented, independent, toothed and muscular and capable of making hard decisions about innovation, then you unwittingly made the case for socialism, because what you described is not a regulator, but a gifted entrepreneur, which profits and loses in the market based on how well he can estimate and forecast!

    If the Marxist fallacy that ‘freedom leads to monopoly and concentration’ was good theory, then – in a market with free entry, and little intervention as the web thankfully still is, Google by all means shouldn’t exist! Or GM, Ford and Chrysler wouldn’t be begging Washington for handouts while little Tesla Motors creeps in from outfield.

    Anti-trust laws and agencies do not reach their stated goals, if anything, the state _creates_ monopolies, by protectionist measures, credit expansion which invariably go to politically favored constituents, and finally regulations such as the Consumer Product Safety Improvement Act, that wipes out small toymakers who can’t afford to pay 3rd party testing for all their toys, while Mattel just adds another red line to its budget and enjoys further protection from new competitors.

    I’m gonna shut up now, and I’d just like to thank you for your amazing effort and generosity in getting this great distro out for all of us to use. Since I’ve installed Hardy I haven’t used anything else and it only gets better. Kudos to you and everybody at Canonical. :)

  129. emarkay says: (permalink)
    February 12th, 2009 at 10:57 pm

    I recall something about selling them a rope, and another about long lines for vodka, but in the end, we are our own worst enemies.

    Face it, our advanced society has lost it’s personal integrity; oh yea, some still do, but those loving creatures are compromised into evil once they find the lust of control on their plate…

    And speaking about the plate, all this becomes moot when what once is a bad IRA or a failed bank becomes a week in the hospital or a forever in the ground.

    It’s not the economy, it’s the food…

    http://www.dickdestiny.com/blog/2009/02/us-businessman-as-terrorist-looking.html

    (A blogger laments on the Peanut Butter Scandal and beyond…)