The Dirty Words of Economics

one of the dumb child who believes that I used to have was that life used to legitimately be in black and white I used to ask my parents and grandparents what life was like before color and they would just laugh at me all of their pictures were in black and white so I mean come on anyway I found this video a few years ago of a guy talking about what it was like back in the day in all day certain economic truths have become accepted as self-evident oh this should be good okay so he's talking about things that have apparently become self-evident rather than what life without color is like but it's something right what else does you have to say a second bill of rights under which a new basis of security and prosperity whoa whoa whoa I thought I finished my videos on the Bill of Rights do I make a part three all right so clearly not what the heck is he talking about among these are the rate to a useful and remunerative job the right to earn enough to provide adequate food and clothing and recreation the right of every family to a decent home right to adequate medical care and the opportunity to achieve and enjoy good health the right to adequate protection from the economic fears of old age sickness accident and unemployment the right to a good education all right jokes over I'm not a very good actor this is FDR and these are his proposed second economic Bill of Rights recorded in 1944 after his State of the Union address all of these rights spell security and after this war is one we must be prepared to move forward in the implementation of these rights he died before the war ended so what happened to these ideas well to answer that we need to back up a little bit in history World War one most of the countries in the world were pretty free-market capitalist and pretty isolationist and didn't look at all like this but the war made people realize that we couldn't just live by ourselves anymore new ideas along with some old ones started bubbling up especially after the Great Depression some people actually blame capitalism for causing a Great Depression in the first place a few countries took these ideas and ran with them like Italy Germany and the Soviet Union let's make one thing clear the economic fallout of World War one and the Great Depression were the direct cause of World War two racism and nationalism are more like sidekicks whenever the economy is bad people always look for someone to blame which usually leads to racism during and after World War two most countries started to adopt changes to their economies countries that were devastated by the war were rebuilt and restructured using FDR's Marshall Plan this is the same plan that he was working on implementing here in America and the same plan he was talking about in those second Bill of Rights countries like France Germany and Japan were all rebuilt under this plan even after FDR died America didn't have to rebuild though and we were filled with such a sense of victory that it was fairly easy to convince the well that no further changes were needed especially since communism which was our ally during the war was now our enemy this was the Red Scare that happened immediately following World War two and continued through the 50s and 60s any economic change that resembled what our Western European allies looked like was branded as a move towards communism and letting the Soviets win and behind it will come other federal program that will invade every area of freedom as we have known it in this country until one day we will awake to find that we have socialism one of these days you and I are going to spend our sunset ears telling our children and our children's children what it once was like in America when men were free in both the US and the Soviet Union any economic change that resembled a move towards the other was demonized and propagandized has result words like capitalism communism and socialism all became dirty words economists had to start using old terms like free market and command economy to even teach the differences now that the Red Scare is over in two generations have passed those terms aren't as scary as they used to be especially as a new generation of adults just went through the Great Recession and we're again looking for new ideas to prevent the next one so now that we're caught up in history let me start off by saying that this topic was on my list but because of this question and this suggestion I bumped it to this week let me start off with this question has true communism ever been tried before no follow-up self question has true capitalism ever been tried before also know what thousands of people play a small-scale simulation of capitalism every day as long as you play by the actual rules monopoly is true capitalism I personally never finished a game of Monopoly because we always ended up bending or adding in rules to keep the game going or to keep a player who is about to lose in the game it always ended up going for days and days but we'll get back to this example in a minute first let's discuss these two systems they exist on a spectrum with capitalism on one end communism on the other and socialism in the middle all right now stop if you're an economist stop typing you're angry comment I'll get to what you're thinking in a minute we're gonna start out simple and we'll build on it I need to be able to talk about these two dirty sea words in this dirty S word without Dragons our work without you boiling over an anger also keep in mind that this is an educational video and I'm not pushing for any of the topics I discussed today in fact I personally disagree with many of them but that doesn't mean I'm gonna ignore them or not present them so let's start with capitalism because I already have the game set up and I'm sure Wheatley can't wait to start knocking things over yes this is the Star Wars version yes I am actually playing and no they're not sponsoring this video although if they'd like to in true capitalism for a true free market economy the government is completely hands-off economists like to call this lazy Fair which is just French for left to do part of me wonders if economists just use these terms on purpose to overcomplicated make it too hard for the layperson to understand there are no government regulations on the market suppliers and consumers decide what goods and services will be available and how much they cost now you can spin this either way one way is by saying that the government has no place in regulating businesses or how much things cost or how much people earn which sounds pretty intuitive and even fair the other way is by saying that the government doesn't regulate what businesses do or how much things cost or how much or how little people are paid it wasn't just the tone that changed there without government regulations and oversight there be no environmental protections consumers would just tell companies or they're not they like them polluting rivers or clear-cutting forests by not supporting them and not buying their products there'd be no minimum wage either the market would decide the price of labor with no ceiling and no floor so potentially all the way down to zero now not that many people are willing to work for nothing so it's always suggested that the market would correct for this both because of a lack of willing workers and the unwillingness of consumers to buy from a company that uses slave labor prices would also be unregulated they'd be set at whatever the supply and demand graphs efficiency point predicts don't worry you do not have to know what that means other than it's the price point where every single product made is sold with no leftovers and no empty-handed consumers this literally never for common items there's always more supply than there is demand pink toilet paper for luxury items there's always more demand than there is supply like iPhones on release day in capitalism the supplier will set the price and they'll set it as high as people are willing to pay so take a life-saving medication for example the supplier can set it as high as they want when it comes to pay or die people are usually willing to pay whatever it costs again in true capitalism the government doesn't get involved in the market at all roads are privately constructed and maintained and services encounter like police fire water and sewage all privatized schools and hospitals are also private companies can't afford that life-saving surgery you died didn't pay your fire bill on time you watch your house burn down this is why true capitalism doesn't exist in the world today if you run a true free market simulation with no government regulations and everyone starts out the same eventually one person gets all the money now this simulation isn't perfect it's a fast-paced closed system with a finite amount of wealth so in the real world or wealth can come in from the outside or be created by loans there are millions of people and time is slow and endless wealth still accumulates at the top not in the hands of one but in the hands of the few you also have to remember that in the real world not everyone starts out with the same amount if you're born rich you already have a huge lead over someone who's joining the game poor because of the dog-eat-dog nature of a true capitalist system where people actually can go broke some people think that it's in the best interest of the very wealthy to keep the poor people just poor enough that they don't represent any competition but rich enough that they can continue buying their products and feel like they have too much to lose by revolting tell them that they're in the middle – not the bottom those homeless people they're at the bottom the upper-class keeps all of the money pays none of the taxes the middle class pays all of the taxes does all of the work the poor they're just to scare the out of the middle class so that was capitalism in a nutshell now let's talk about the other end of the spectrum communism in communism the government does not regulate what businesses do how much goods and services cost or how much people are being paid hey wait a second didn't you just say that about capitalism yes yes I did in fact you're gonna find over the next minute or so that there's a lot of similarities between communism and capitalism that you probably didn't think of before and both of these system either government is completely hands-off the market decides the value of goods and services and the value of one's labor those of you with keen ears probably notice the difference than that one nothing really costs anything in communism currency is usually dismissed entirely as it's just a way for someone who accumulate more wealth than they actually need in communism everyone contributes to the system what they can and they take from the system only what they need this system as well as capitalism is based on the idea that everyone is a rational actor in capitalism people would only buy things at the efficiency cost not a penny more or less in communism everyone contributes to the best of their ability and they take only what they need nothing more whether your contribution is sweeping the streets or being a dentist as long as everyone is happy that you're contributing to the best of your ability you're still part of the system and now you probably guess why this system doesn't exist in the real world either human psychology just isn't wired to think this collectively people are inherently selfish envious and jealous say you're a doctor who decides to treat this person before that person because this person contributes a little bit more or you're a tomato farmer he decides to give more tomatoes to that person because you're friends with them if you can one person decides to be selfish or jealous then the entire system breaks down alright since it's a new day and I'm still not done playing this game let's go back to assuming that either are possible in capitalism everyone has an equal opportunity to succeed but the harder you work the more you'll earn it rewards people's ingenuity and motivation the more you work the more you make and communism everyone is equal and nobody really strives to be more successful it facilitates the prosperity of the community at the expense of individual motivation so the more you need the more you take except now that sentence can be applied to either system in its entirety for capitalism the more you work the more you make money wise and the more you need subjectively the more you take capitalists are greedy pigs for communism the more you work the more you make for the community and the more you need objectively the more you take lazy communists lack motivation and now to the point where I play Kate those economists who've been foaming at the mouth ever since I showed you this spectrum where does North Korea and the former Soviet Union fall on this spectrum the answer is nowhere it's time to show you that the spectrum is not a simple number line I prefer showing it like a circle again capitalism on the Left communism on the right and socialism in purple so what's this green piece at the top then it's the dirty f-word of economics a word that's been so demonized by propaganda we don't even use it to describe our enemies anymore fascism across the center you have government involvement in the economy the further out from the center you get the less government involvement there is until there's none where there is no one the further towards the center you get the more government control there is also across the equator the further to the right you get the more collectivist your economy and further to the left the more individual up and down you have the distribution of power at the top with fascism you have a dictatorship power lies with one person or one party at the bottom of socialism we have a democracy government of the people and in the middle you have Anarchy yeah unlike what death metal bands might think Anarchy does not mean chaos it just means that there's no need for a government River at both ends of the spectrum capitalism and communism the government is hands off so let's work our way around this circle and figure out where some countries are let's start with this weird aquacolor a dictatorship with some capitalism this is what most countries were before world war 1 a monarchy where the single ruler really only cared what happened inside their walls and outside was the Wild West this really doesn't exist in the world anymore so now back to the original question where does the Soviet Union and North Korea belong on this back when this was just a spectrum you probably thought it was down here but it's actually up here the color they're sitting in is just a coincidence and this is one of the main problems with the propaganda of the Red Scare you know who else belongs up there Nazi Germany and fascist Italy there are three things complicating these term what a country calls itself what they actually are and what we call them there's very little difference between Stalin and Hitler they both called themselves socialists one was leader of the National Socialist Party and the other was the leader of the United Soviet Socialist Republics neither of them were though they were both fascists this was a war for democracy though so we couldn't really have a fascist dictator on our side so instead we called him and his country communists so once the war was over in fascism was defeated Stalin and communism became the new enemy in a fascist system the government controls both means of production and consumption they say how much will be made and how much people will get also known as rationing they're usually guilty of some huge human rights violations that all manner of crimes keep their people in line every country that we call a communist dictatorship is actually fascist and there's no such thing as a socialist dictatorship that's just another product of the propaganda machine so what about those other terms that economists had to start using because of the Red Scare well the free market exists down here the closer you get to capitalism the more free you are and a command economy exists up here the closer you get to the top the more command and control there is so let's be done with the evil of the world and get to countries that we actually like most countries of the world use some form of socialism and socialism the government controls the means of production for certain goods and services that it deems beneficial to the entire population unlike fascism which controls the means of production and consumption for everything down here in the purple we have countries like France Germany the UK Canada Australia and Sweden I'm pretty sure that's most of my demographics the closer towards the red end of the spectrum you get you have countries like Japan and lastly let's get to the United States most Americans probably think that we're way up towards the blue end we're actually more like here this might even be generous were probably more purple than you might think so with the election coming up a lot of ideas have been thrown around that would move America in one direction or the other so let's talk about some of those ideas and what those purple countries have that we don't you might actually find that America has more socialism than you previously thought let's get simple for a moment all of these countries have police fire and military provided by the government a way of protecting people from outside and within and protecting their property they also all have a national postal system and some sort of subsidized transportation network supervised by the government the difference being that in those other countries is usually a rail network and here in America we prioritized air travel which is much more costly to our wallets and the environment education is also socialized here in America at least up through high school most other countries offer some sort of free education all the way up through university so many politicians here in America have been discussing making college free or at least forgiving some sort of jail or at least forgiving student debt in order to combat the student debt crisis almost every country has a minimum voyage but what about a maximum Switzerland actually just passed a maximum wage and other countries are starting to look at the idea as well this is often associated with what's called a brain drain the idea is that if there's a cap on how much people are allowed to earn the smartest people are going to leave this actually happened in Egypt when they passed their similar law in Japan they have a similar idea called the progressive wage basically what this means is that the highest earner at a company can only make so much more than the lowest earner since we're talking about wages let's talk about that basic income idea this is when a country just cuts citizens a flat rate check a lot of countries do this and Finland just started their program a lot of Americans will scoff at the idea but we actually do it here we just call it a lot of different things on the small scale in Alaska it's called the Alaska Permanent Fund just by living there you get a small annual check it comes from the oil profits and it's managed by the state on the national scale we call it social security everyone pees into it and if you live long enough you get to draw from it it's under no threat of falling apart but this is only for the very old basic income would go a bit further though and has been supported by a wide range of politicians it would be a flat rate cheque for every single American and be enough for you to live on if you chose to do so some people say that this would be a validation of stay-at-home parents work or this could just supplement your income if you chose to continue working basically it's Social Security for everybody and more importantly it would replace all forms of welfare no more unemployment or food stay and by most estimates it would do it far more cheaply unemployment public housing food stamps EBT WIC all forms of welfare that you can think of could be replaced by basic income all of those current forms of welfare are actually socialism we just be bundling them all together and calling them one thing and eliminating several overlapping bureaucracies but that's really what socialism is government control over the distribution of goods and services in order to make sure that it's more equitable and cost-effective for everybody and it works in most countries most of the fear of socialism here in America has to do with taxes which I personally find a little bit strange since back in the Red Scare America had some of the highest taxes in the world they've slowly been cut over the last half-century but mostly for the very rich in 1950 earnings over $200,000 rataxes at 91% earnings under $2,000 rataxes at 20% there was no difference for being married or anything in 2015 earnings over four hundred and thirteen thousand two hundred dollars were taxed at thirty nine point six percent and earnings under nine thousand two hundred and twenty five dollars were taxed at 10% once they've been lowered like this it's incredibly hard to ever raise them again I did a video on America's progressive tax system a few weeks ago that covers the math and the candidates proposed systems a little more in depth with Americans paying so little in income tax we end up paying for those things that those highly taxed Europeans get from their government out of our own pockets the biggest example is by far the thing that you've all been waiting for me to talk about health care why do you guys hate me so much all right no more fun here for a minute we actually have socialized medicine here in America for old people through Medicare poor people through Medicaid and military and veteran's health care what we don't have is universal health care so if you're an ordinary citizen who doesn't fall into any of these categories you still pay for them through Medicare Medicaid and other taxes and in return you get no health care even if you have private insurance you're still paying for that out of your own pocket in addition to co-pays and other bills let's set aside the subjective quality of doctors and hospitals for a moment and talk about something objective say a Maine brand pill Americans pay more for the same pill than a European does because the company is selling directly to the person rather than to the government in a Europeans case while we're on the subject let me dispel one more myth Obamacare is not socialized medicine you don't sign up for Obamacare there is no Obamacare card you sign up for regular private insurance and have a Blue Cross or Aetna card all the Affordable Care Act did was require Americans to purchase health insurance and require those insurance companies to offer it to people who are previously denied it also offered a federal expansion of Medicaid but Medicaid is a state-run program so states were free to accept or decline it which just means that they're paying for it themselves if they didn't take it it's hopefully some of the propaganda and myths around these words and programs have been cleared up and you're able to look at them through a more objective lens and the next time a politician proudly proclaims that they're a socialist and your grandpa automatically hates them or you want to plan a vacation to the People's Republic of wherever or someone says something smart like communism works in theory you'll know better hey guys if you learned something from this video make sure to give that like button a click if you'd like to see more from me I put out new videos every weekend so go ahead and give that subscribe button of vigorous pressing I've never finished a game of Monopoly and I swear I'm going to do it this time so if you'd like to find out who wins make sure to follow me on Facebook and Twitter I'm almost to 250 subscribers too so make sure to share this with your friends and leave any questions you might have about the channel or any of the past videos that I've made down in the comments below but in the meantime if you'd like to watch one of my older videos how about this one

  1. I want as little socialism as possible.
    I mean in Flint Michigan we have almost no police here anyway so their what would be the difference?

  2. Congrats on getting so many things wrong!

    1. Fascism is essentially ultra right dictatorship. It's state capitalist, market liberal, ultra nationalist, and dictatorial. Germany, though the Nazis called themselves socialist, were nothing but socialists. Nazis controlled production but private firms owned the economy.

    2. Stalin was not fascist. He was a socialist and continued what Lenin started. Industries were owned by the state, from which the working class draws political power. That is the very definition of socialism.

    3. Free market capitalism doesn't exist because government regulation is necessary, and because eventually one player will win. By the end of the 19th century free market capitalism is all but dead and economies have moved to the next stage of caoitalism: Imperialism.

    4. Fascism is very much alive and well. Ultra right dictators who pretend to be democratic but suppress dissent still exist.

    There are many more mistakes but come on.

  3. You kept accidentally making the dominoes logo with your dice. Paid subliminal promotion? How capitalist of you.

  4. Yes, I agree socialized programs like having a military, Medicaid, police force, and welfare to get people genuinely struggling temporarily to get back on their feet. Those things are socialist but declaring yourself a True Socialist like Ocasio-Cortez and Sanders is just plain wrong to do and implementing what actual socialism is morally inept as government. Universal Healthcare and college is different as it’s a service provided by people and you getting a degree doesn’t do an overall public good to society and it isn’t your right to have a degree it’s truly a privilege like healthcare is. It makes doctors and others in the medical field restricted and there is no limit on how much they can treat you as they pay and are forced to provide for them. It happens at gun point and not under their own will. Also, the quality overall in The US healthcare is much better than Canada and these other countries as they are pushing towards more privatized healthcare. You make some good points, sir and agree with you on 95% of what you say but saying TRUE socialism is moral or even democratic when fully implemented is refutable. When the state has all the power in it’s programs it’s dangerous for what human rights they can violate for more power. In The Netherlands, the government healthcare euthanized sick, elderly people they deemed as not wanting to burden their system as taking up more of their money which is an overstep.

  5. Could you do a video on Feline Racial Supremacy over canines? Thanks for supporting the kitty master race.
    The cat tower in the background prompted this comment.

  6. 7:43 little did he know ,little did we know for that matter , that ppl would pay 1200$ for smth as useless as an iPhone .

  7. The life saving medication analogy is inaccurate since the government wouldn't be protecting the company's patent.

  8. It's really simple. Which nations do people who want a better life flee to? 99% of the time they go to mostly Capitalist nations if they can. That is a stone cold fact.

  9. Wow hey I also thought the olden days were legit just black and white too when i was young
    (my parents laughed when I said "I'm glad I was born after colour was invented" lmao)

  10. Communism was part of the Allies during the war but wasn't our ally. The only way they were an "ally" was being the enemy of an enemy and that was the best that could be said of the situation.

  11. Don't feel bad, dude. When I was a little girl, I used to think that if you had two positive pregnancy tests that you were having twins.

  12. We have a seperate term for those on the purple side though, they are called Social democrats, as socialism is not a market economy, meanwhile social democrats are, those are very diffrent, socalism is often a pre-state to communism, or as lening put it "The ultimate goal of socalism is communism."

  13. Excuse me, you just implied, whether you meant to or not, that Germany was not a capitalist state. WTF

  14. Every economic theory, model, or whatever works in theory. So next time someone "smart," says [insert economic system] works in theory, you could call their statement redundant.

  15. This is just wrong.
    Communism is the idea that private property should be absolutely abolished. Making the differentiation between private property (means of production) and personal property (your computer, bed, toothbrush, clothes, etc)

    Socialism in traditional Marxism is an in between stage between Communism, where eventually the government will be dissolved when it is no longer needed. And capitalism, where we are in the west. How we use socialism today is more akin to a Social Democracy, like Norway, Denmark, Sweden, etc, think of the Nordic Model. It is entirely based on a free market capitalist economy. This does NOT mean exclusively laissez-faire, where the government and the economy are effectively kept entirely separate. While this is the predominate use of the term in modern politics the distinction should be made between Social Democrats and Socialists as Communists tend to call themselves Socialists, or just Leftists, there can be a lot of confusion as the two systems are mutually exclusive to one another.

    If you are reading this now you most likely live in a Capitalist country. Business can be privately owned, with the means of production falling into the ownership of whoever owns the business itself. This is a very simplified version of what Capitalism really can extend into (as well as with the other two) but in the context of Communism this is the main distinction of the two. This absolutely can include a welfare state, social programs and socialized medicine doesn't not inherently imply socialism because of the word "social".

    Fascism is an entirely separate system that is founded on the principles of Nationalism. It is against both Capitalism for prioritizing individualism in economic action, and Communism for using class as a main identifier for personhood as opposed to nationality or ethnicity. How the economy is run is what is best for the nation at the time, be it for a war effort, or when at peace. The nation comes first over all else in Fascism. The individual comes first in Capitalism. The workers come first in Communism. And at this point the term Socialism can mean completely mutually exclusive things based on the person you're talking to.

    EDIT: I am not an economist, I am going off of the political philosophies themselves. I am a capitalist, but these terms, at least in America, have lost any and all meaning they actually hold to the point they're just buzzwords.

  16. There's quite a few mistakes about Communism, Socialism and Socialized Capitalism (Whether Social-Liberalism or Democratic-Socialism) which makes the explanation about Capitalism quite flawed. I really don't get why people try to imply that there's this "Crypto-Socialism" that exists in many Western Democracies such as France, the UK, Sweden and Norway. Although, I do think it's a good introduction to Political Economy in the modern era, just mistaken when speaking about "Socialism" because you didn't explain what Socialism means. It's true that "True Capitalism" aka Laissez-Faire Capitalism is nothing more than a concept and can't be more than just a concept – That's why "Existing Capitalism" always will and will need some form of a Socialized intervention, mostly through economic regulation in the form of government intervention such as taxation, subsidies and national ownership (either total or partial) of specific economic sectors, most notably the educational and medical sectors; Both of which have a very visible conflict of interests, for example how it's impossible to model an educational sector that is both inclusive and available to everyone while operating to turn a profit. That's why existing Capitalism will always have some form of welfare and socialized sectors that are funded through taxes, but it's not Socialism it's Capitalism and it's impossible to have a both a Capitalist and a Socialist economy. Don't try to frame economic regulation as Socialism. Socialism isn't a complicated concept to understand, it's the common ownership over the means of production and it's impossible to have both common ownership and private ownership over the means of production in the same time. It is possible to have private ownership over the means of production alongside economic regulation over (privately owned) capital which includes a public sector that's mostly owned by the state (but state ownership isn't common ownership. It's a way to democratize and socialize certain economic sectors that still essentially operate the same as privately owned – private ownership doesn't mean ownership by a single person.

  17. At 4:49 , "Monopoly is true capitalism" nope. The difference is that monopoly is based on a fixed pie "economic system" while capitalism has unlimited potential or what is called a positive sum game. Plus monopoly is clearly not capitalism since it follows rules that are obligatory rather than free voluntary exchange. You are forced to puy money when you got on a certain hotel or house or resident when you don't have to.

  18. Fascism isn't "more government control of the economy", they were very much capitalists. The rest of the video is good, but that part is inaccurate.

    I recommend you watch Philosophy Tube, Innuendo Studio and Contrapoints' primers on fascism.

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