The Fatal Flaw Of Free Market Capitalism 

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The problem with running away from your problems is that: A. There's a finite amount of "elsewheres" on the planet that you can run away to. B. If your problems revolve around an economic system built on the idea of infinite expansion, you can bet your ass that it will do its damndest to expand to all those "elsewheres" as well.

The problem is that every American thinks they'll eventually be the Coconut Man.

"Read economics 101" Economics 101: "People are perfectly informed perfectly rational actors and everything is explained by 2 lines on a graph" Literally any advanced business or economic book: "People are absolutely fucking stupid and here is how we make money off it"

Literally not a single person who suggests that people who can't find work should "just move" has ever had to move to find work. Moving costs money, something most unemployed people can't afford to do. It isn't a solution, it's just something that people who have enough say to people who don't have enough to blame them for their situation.

Coconut Man: "So, what will it be?" Me: "While you collected coconuts I studied the stick."

I had a cousin who constantly came up with schemes to get rich without working. All of them were just "What if I got somebody to do work for me and then didn't pay them fairly".

Thumbnail: "everybody gangsta untill the Amazon deathsquads show up" RU-vid: *Gives me an Amazon ad*

Step 1: Find large rock Step 2: Wait until dark Step 3: Bash in coconut man’s skull while he sleeps Step 4: Eat fill of manflesh and coconuts Step 5: Drag remains of coconut man into shallows, Step 6: Weight down corpse with rocks Step 7: Catch and eat fish that come to scavenge coconut man’s waterlogged corpse. Step 8: Mock N.A.P.

"Growth without limit is the logic of a cancer cell."

“Hyper online young adults who have no friends… LETS TALK ABOUT ANCAPS” best segue I’ve ever seen

my opinion of elon musk has changed a lot since coming across this channel

Another analogy is that not only has the coconut man taken all the coconuts, but he's also chopped down all the trees, somehow poisoned the ground so that no more will ever grow, and then built a boat to try to leave you on the island to starve.

Ah yes, Alden's Coconut Theory

First. Rodrick Alden would be proud of me right now.

You deserve a prize for unironically using the coconut island analogy.

The problem with anarchy is that by removing the existence of a govermant you've set up the conditions for a new one to pop into exzistance.

"Young adults, between the ages of 18 and 25 who are hyperonline and don't leave the house that often and have very few to no real-life friends." That hit..

Schrodingers anarcho capitalist: Wants rules and rights by the government to protect his property but also dislikes regulations that enforces these rights

Coconut Man's problem is that eventually the prospect of starving to death becomes more frightening to the other guy than taking coconuts by force.

I last heard the "if you don't like your job, just leave" argument from an acquaintance who hadn't worked in years. She and her kids live on her husband's income. Right now, she's in her 40s and doesn't have any particularly marketable skills, though she went to good enough schools that she could have acquired some. If, heaven forbid, something were to happen to her husband, she certainly wouldn't find the job market a friendly place. But that would probably only lead her to "I have to work a crappy retail job to support my kids, so why shouldn't anyone else have it easy?" In my view, that's how a lot of Americans justify our system. They have this idea that life is SUPPOSED to be a tough struggle, because "something something rugged American frontiersman something something builds character", and that it would be even tougher if we didn't have these wise, admirable "job creators" providing salaries. Such people (as with my acquaintance) also seem terrified that any attempt to make the system more equitable will just lead straight to Soviet-style communism, therefore our only choices in life are a) be happy with our lot or b) pull our individual selves up to better stations. Often, they subscribe to the view that there's too much regulation, but they don't see all in the ways in which the level of deregulation they profess to want would actually be detrimental to themselves or other people in their lives.

“There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs."- John Rogers

I think the Mexican drug cartels are probably similar to what we'd see under anarcho-capitalism. ...Anarcho-capitalism would very quickly become neo-feudalism anyway. The big corporations would hire mercenaries and start taking territory.

The problem with being an anarcho-capitalist is that you eventually grow past the age of 14.

Okay but have you ever considered that the coconut man bases his entire advantage in this situation on the understanding that you won't just bash his skull in and take a coconut for yourself? He's been running around a sizeable area picking, gathering and carrying coconuts to get them all in this one pile, how much strength could he possibly have left?

The intro should have ended like this: you can't have these coconuts but you can get deez nutz

Oh my god, the coconut analogy. Alden says: Based.

It's a good thing Atlas VPN isn't a company, or they might just sell all your super secret VPN data to a third party! But that'd never happen...

Coconut man is going to mysteriously die in his sleep on my Island....

“The only group of people who would not be affected by the negative consequences of moving that much would be young adults between the ages of 18-25 who are hyper online, don’t leave the house that much, with very few to no real friends. Let us now talk about anarcho capitalism and it’s proponents.” I SPIT OUT MY WATER, LEGENDARY BURN

I think what's missing at 13:09 (why we don't see more worker co-ops) is that while a worker co-op could be better in many ways, the people in charge aren't willing to give up control. Sure, the co-op would very likely be better for everyone employed there, but the directors and c-suite are reaping the benefits right now; things _could_ get better for them, but they could also get worse. For example, they could be fired by their employees for being sociopathic jerks. Another factor is that when someone builds a successful company, they often attribute that success to their own brilliance. They don't recognize that a huge part of their success comes from the success of the people who worked there. This is well-studied human psychology. So from their point of view, if their shining brilliance as a benevolent dictator has brought them this far, why risk it by changing things up? However this isn't something we can really push off for much longer. Large corporations have been more powerful than democratically elected governments for a long time now, and it's extremely dangerous to have non-democratic entities with so much power over billions of people.

People really do their best to not equate money with power. Lots of "free market" stuff would crumble pretty quickly if you just replace "money" with "power" or "influence". The Free Power Market, where everyone can fight for control over everything and anyone else! That sounds really sweet, doesn't it?

Vaush’s favorite rhetorical: coconut island.

5 seconds in and I knew we were gonna be talking about Alden’s Coconut Theory of Value.

At last. The academic recognition Dr. Alden deserves.

It's almost like a person's inner thought process, problem solving, and beliefs are more complex than "Right or left"

Anarcho-capitalism sounds like feudalism with extra steps.

"Everyone in a wealthy position has earned their place there" That is probably the biggest flaw in AnCap thinking. While some people maybe have gotten places in life through hard work and good morals, it is only a maybe. If the coconut man in the video was a good person he would have done whatever he could to make sure a fellow human being didn't starve.

Ya know. These old conservatives who keep telling the children they have to "just move" are going to have a very cruel and ironic fate when they realize they are going to die alone in a nursing home with their children living hundreds of miles away

Excellent video. I grew up in a family with parents working for government so I had zero understanding how companies operate. After graduation and a few years of working in private sector, one day I suddenly realized "Isn't this a small autocratic 'regime' I'm in?" That could be the first time my understanding of democracy was challenged. Since then, I always thought we human may have not evolved much intellectually from our tribal ancestors.

Refreshing video, my dad has a PhD in banking and management specifically wrote it on cooperative banking and management. He has been talking about how every workplace should be exactly the way you describe it right now, I never really grasped what he was on about when I was a teen. Interesting to really learn more about this in my mid 20's. I'll have to sit down and have a beer with my dad to talk about this sometime soon. Thank Adam!

A thing I find funny about Rand is that in Atlas Shrugged there’s a plot point where the corporations suppress an infinite energy supply, and this is treated like a criticism of socialism.

As old Patty Harper once said "Freedom to starve ain't freedom sir."

As I read some time ago: Unions and negotiation tables were the compromise we reached so worked didn't show up and beat the shit out of the owner. If they don't want unions I guess they want to go back to the old times.

Just an observation: for many decades the term "Laissez-faire" capitalism was commonly used, but then wealthy people and large corporations realized that the term, while accurate, had negative connotations (actually well deserved negative connotations) and so a new term was needed to put a positive spin on the situation. Thus the term "Free Market Capitalism" was born. It means the same thing as the traditional term Laissez-faire capitalism, but it sounds like it comes with a lot of freedom, so it feels like it's a wonderful idea. This clever PR trick has been quite successful: previously, if one said he was against Laissez-faire Capitalism, people would think, well that's understandable. But today if one expresses the same idea, you're accused of being against the FREE MARKET, and everyone dismisses your view as stupid and evil. So perhaps you should reconsider using the F-M term so much in your videos.

All according to Alden’s theory of value. Awesome video.

The UK already has a large co-operative literally called the co-operative group. In fact it already has 4,000 grocery stores. Co-op funeral care is also the largest funeral director in the UK with over 1,000 funeral homes, there is co-op insurance services, co-op legal services, co-op property, co-op power and they also fund a non-profit multi-academy trust in England called the Co-operative Academies Trust. Co-operatives are a more than viable solution and have already been adopted and already have been proven to work.

"Young people between the age of 18-25 who are hyper online, don't leave the house too often and have very few to no real friends. And so now let's talk about anarcho-capitalism..." This may be the smoothest transition I've ever seen in a youtube video.

People with jobs are homeless, at least in California. Everyone I know under the age of 35 lives with their parents still, which is not too far from homeless. I want to move out of my country, but it turns out that immigration laws have become so strict that I cannot. Moving to another state may end up costing more because I have a mentally disabled child and support services vary by state. But it is hard to know for sure because the healthcare laws are so complicated. Navigating the healthcare services necessary was awful, and the prospect of doing it again is daunting. They assume you are a criminal trying to defraud the state and must jump through all the hoops to prove you are innocent and just in need. The hoops don't deter the dishonest, though. Placing the burden on the worker to just move is the most asinine argument. We must revolt to re-establish the balance. Or rights have been usurped; our institutions corrupted; our watchdogs placated. The checks and balances have been monopolized. We have two parties that represent everything, and therefore no one. We the people have lost.

You ignored the other perfectly reasonable option to coconut man. It's called a spear in the gut.

I greatly appreciate the usage of Hide the Pain Harold in this video.

Less than a minute in the video and "Coconut milk" had updated it's definition in my head. Nice work

In Ireland when someone in my business class started talking about all the benefits of free market capitalism the teacher cut him off and reminded him about the famine. He shut up pretty quickly.

9:31 "Young adults, between the ages of 18 and 25, who are hyper-online, don't leave the house that often, and have very few to no real life friends. And so let us now talk about anarcho-capitalism" SAVAGE

crappy low wages wouldn't be such a problem if cost of living/housing weren't so outrageously high.

The idea of amazon's firing squad is actually horrifying.

I'm here before Adam gets a million subscribers. Boy is exploding.

ah yes, the coconut island, never gets old xD

3:56 "Big business takes the concept of chiefdom and upgrades it to a totalitarian dictatorship" - That's pretty fast plot-twist in just 5 seconds XD

There's already a good example of anarcho capitalism: The game ARK: Survival Evolved. The biggest servers are run by big guilds that completely dominate the servers and if you don't want to join, well, you can always start on a smaller server with (hopefully) better people on it.

Ahh yes, the coconut island *Vaush rubs his hands*

I couldn’t stop thinking about vaush with that opening coconut reference

This channel feels like the birth of a movement called “Elon Musk Trutherism”

One of the funniest counters to AnCap I have heard was from a work colleague, What about streetlights? Streetlights existing and being used generate zero profit for the operator. Zero. So under an AnCap system there would be zero streetlights in operation.

the "just MOOOOOOVE" and the coconut island analogy really reminds me of someone... nah i forget

I was going to write a rebuttal to Atlas Shrugged. Then I played Bio Shock and it was a perfect rebuttal, so go play that game.

"18-25 year olds who are hyper-online and have few to no real life friends. Anyway, let's talk about anarcho-capitalism" got a chuckle out of me

The problem isn't that the coconut billionaire has gathered the coconuts on his own, or that he did all the work while you were out, no. He exploited the birds on the island to carry the coconuts to them, now I hear he is buying all the houses on the islands too. The only option now is to punch the billionaire off his mountain of coconuts that he didn't build fairly (in this analogy, that would be making unions).

>get propelled to new heights by the algorithm overlords >shortly posts a video clowning free market capitalism Yes, I think this is based.

I've talked to a few ancaps. None of them were very bright.

"Let them eat cake" is the original "just move"

The 2 points which made me doubt previously held "purist libertarian" beliefs: 1. Land is not only scarce, on this planet it's traded as 2-dimensional plots. Without regulation, someone could turn my house into an enclave/prison with limited access, simply by buying property around it. This is often "solved" with neighborhood contracts (the HOA model), but that just moves the problem outwards a bit -- A malicious actor could still buy all the bridges around a city. The only real solution seems to be.... a shared public space, owned by a layered, democratic government. 2. Some natural resources, like the atmosphere and water, flow freely across property borders. Without regulation, this is an issue on a small scale (Neighbor's BBQ under your bedroom window), on a medium scale (A factory draining an aquifer), and even international scale (Landlocked mountainous countries can determine water flow towards river delta countries, by building hydro dams). The only way to protect these resources is... Layered, democratic governments enforcing protective regulations.

"Ah, I see you know about the oxidizing properties of oxygen. Yet you are still breathing to keep your metabolism functional. How interesting!"

"Imagine suffering a plane crash" - Already here, everybody knows what's coming.

Oh yes ayn rand. the person who wrote a book inventing a perpetual motion motor only to use it to transport oil for gas profits

I feel like I could ruin the analogy by fighting the coconut man for the coconuts, possibly to the death

"The subordinates can only hold the owner accountable thru a government" *laughs in government bailouts* *laughs in big corps lobbying politicians so they can have and keep a monopoly*

Really impressive you got Internet Historian to act in the visuals!

I've come to warn, Vaush is sueing, he wants his coconuts

Many people in this video don't know, but anarchism is usually anti-capitalist and since capitalism is a hierarchical system, it makes sense, Ancaps are not anarchists No I'm not a anarchist, I'm a Democratic Socialist.

Co-op capitalism I think is good phrasing to help people in the smooth brained US actually start to do something

The unregulated free market is literally the law of the jungle. Everybody thinks they're the top dog. In reality 90% would quickly find out they're the cod fish in the piranha pond. Which is the very reason we always have had some sort of government/state to prevent this from happening.

I've founded a worker cooperative. We are actually doing quite well, better than some of our non-coop competition. But it was not easy to do so, specially because of credit. A capitalist can show up in the bank (or the government, really) and just get a loan to start a business, a group of workers can't. And that's the main reason you don't see more workers cooperatives.

The irony of capitalism is that it needs government intervention in some sectors and some specific occurrences to remain the free market. Just like being tolerant means you eventually have to be intolerant to remain tolerant. People making the case for anarchist societies are either playing funny mind games or are very funny in their minds. Both capitalists and socialists in that case. Any anarchist society is doomed to fail

"Young adults between the ages of 18 to 25, who are hyper online, don't leave the house that often , and have very few to no (real life) friends" ouch

I love this Hungarian guy RU-vid channel using Andras "Hide the Pain" Arato meme. Inception much.

judging from the comments... we're screwed...

I am dying over that transition to talking about anarcho-capitalists

The fact that you used the coconut island analogy just made my entire week. Thank you.

Free market capitalism is its own worst enemy if underregulated. It leads to an ever-growing accumulation of wealth in the hands of the top 1% who end up spending a lot less than they earn, whilst simulatenously impoverishing the working and middle class who would normally spend a much higher portion of their income. This has a chilling effect on economic circulation, as workers having less money to spend forces a lower demand for any goods that aren't absolutely essential for survival. This continues until a point where an increasing percentage of workers is no longer able to make ends meet. Once this percentage becomes high enough, you end up with a system-ending event, such as a breakdown of society or a communist uprising. I'm not personally an anti-capitalist, I think market economies have the potential to provide some of the best quality of life imaginable for the people, but whenever I come across the "taxation is theft" or "regulation stifles innovation" and anti-union crowd, it just makes me groan. Regulations and taxes and unions are absolutely essential for the survival of a healthy and balanced market economy. Any absolutely free market will suffer absolute corruption until it collapses as the gap between poor and rich becomes too wide for society to remain stable.

It really is that simple. Any corporation builds power. With that power, they'll drive out competitors and crush or buy newcomers. And you now have... well, a state. There's a reason states pop off all over the place. All merchant cities eventually became states or got conquered by one.

I think the answer to the last question about co-ops can be answered in these ways: -If Co-ops are better then why are there so few of them? 1) This is like someone in 19th century Europe, living in the Austrian Empire asking 'well, if democracies are so much better, then why is all of Europe either an absolute monarchy, or a constitutional monarchy? Sure, we have Switzerland or whatever, but we'll never have most of Europe be republics' These absolutist systems are difficult to go against, in the same way that absolutist monarchies of the 19th century were clearly bad, but were also incredibly difficult to dislodge. Because of internal issues, and also because other autocratic states would aid whatever autocratic state you're trying to overthrow. (i.e. France during the revolution, or Russia during the revolution) In the same way the capitalists of today lobby, donate, change laws, and fight tooth and claw to stop any workplace democracy from happening, just like kings of old did with political democracy. 2) Coops and corporations dont exist in a vacuum. There are several systematic and institutional issues that exist that make forming coops more difficult. For example, in the U.S., credit unions aren't allowed to finance coops. This is bad because coops would probably get a lot of money from their local communities in form of credit from that community. And we know this because they did, until lobbying made that illegal. And banks are a lot less likely to lend to coops than they are to corporations. Tax breaks dont work, because it's not about the coops ability to make money. Coops are in pretty much every way financially the same as corporations, albeit a bit more stable. The problem is labor laws and laws governing firms. If you want to start a coop today, you have to create an organization that looks like a corporation with a single legal representative, and liability structures reminiscent of corporations, as well as ownership being murky due to property laws favoring 'simpler' corporation style ownership because the laws we have were made with corporations in mind first. And to make a coop you have to jump through hoops that corporations don't. If you want to get financing, or go to startup campaigns, get grants, etc. Then you will always hear people talking about LLCs, INCs, etc., but the ability for you to create a coop is never mentioned by people who are in charge of projects that promote startups. 3) The free market as we have it today did not emerge in some forest somewhere free of human intervention. It is a construction that has taken place over a long time, and we have constructed it in such a way as to favor private ownership with private incentives. The thing standing between us and a co-op driven society is all the laws we have constructed that require you to behave like a corporation, that require you to be financed like a corporation, and that subsequently require you to treat your coop members as employees. If we want more co-ops, we have to start changing laws to favor them. Laws like those today that favor corporations, and intrinsically guide us away from collective ownership.

The one thing that made me abandon 'true' free market capitalism is the lack of negotiation power that employees have in the current system. The average person doesn't have the luxury of not needing a job, they have bills and rent to pay, possibly even a family to look after. Employers use the threat of unemployment to unfairly forge unequal contracts. Nobody would accept an employment contract signed at gunpoint, but we all happily accept that a contract signed under coercion, with the threat of financial and economic ruin as the gun instead, is okay. I work in an industry with a huge shortage of workers and high salaries, and here I think the whole free market thing works great. Employees have a lot of power to decide where they work, can easily swap jobs for a better salary or position, can demand a raise in accordance with market values, are treat with respect and dignity because the companies are desperate to retain staff as they actively have to compete for workers. It's the libertarian utopia and how they imagine the whole market works. But this only works because the companies don't have that underlying threat of economic damage. All of these people can EASILY find new jobs and most have savings. They can negotiate fairly. It's for this reason that I don't think we can achieve a genuinely free market economy until we have UBI that provides everyone with a liveable income. By liveable, I mean they have a place to live, food to eat, can afford all basic necessities and still have enough left to buy a few comforts and luxuries for personal enjoyment so they can enjoy life. From there, we work to afford additional luxuries, not basic survival. If companies want our labour, they have to convince us why we should work for them. They can't treat us like shit as we can always just quit our job without fear of our lives being destroyed.

I don't know why you didn't like _Atlas Shrugged_ -- it's all about trains.

As a 20yr old young adult myself, I can confirm his description about young adults is 💯% very accurate.

What? You're poor? You don't like your job? You're treated badly and don't get a fair pay? Man just get a different job... -Americans

Interestingly, Germany has something along the lines of legally required workplace democracy. Well -- partial workplace democracy to be exact. Any company that employs more than 500 people is required by law to have 1/3 of its board members elected by the employees.

All the points in this video are correct, but I feel like some important ones are omitted. The owner is the individual putting the initial capital into the business. This means not only that he (or her) deprive himself of a portion of his belongings to set up everything, but also that he is assuming the risk of failure of the company which, depending on the case, could be countless times greater than "simply" lose a job. On this premise, why should I, the owner, GRANT the workers the power to decide how to organize the workplace and invest the capital? I'm not saying I should DENY it either a priori, I'm saying it should not be a given. I think a company owner should let every worker organize his workplace with the maximum degree of freedom under the premise this doesn't go against legality, safety or productivity. With "productivity" I mean that a worker shouldn't personalize his workplace to the point where he is spending all his time looking at plants or cat's pictures. I also think every worker MUST be heard and their ideas and preoccupations took into account. That said, the last word must be of the man or woman who set up the shop, the one having the absolute majority of the risk of failure. Besides, democracies in the workplace already exist between shareholders and the power to vote is directly proportional to the money invested and the risk taken, as it should be. Of course, in big companies like Amazon you can say that "even if a worker decides to become a shareholder, its share would be so minimal (in percentage) that its vote would be inconsequential" which is true and for which I don't have a solution, unless maybe the organization of a coalition between workers shareholders which would act as a single BIG personality on the board, democratically deciding its position before the decisionmaking of the company. I'm no economist but I honestly think free-market capitalism, while flawed, is the best system to grant the maximum degree of freedom and wellbeing to the maximum number of people. The problem is that is poorly implemented. An ideal free-market capitalism is one in which the government act as an arbiter between each private company, granting and enforcing the law on workplace wellbeing, safety and correct competition. If everyone play under the same set of rule, free-market capitalism is almost utopian. The problem is, of course, we have tons of different governments, each one with its own rules and not very good at being arbiters of the private companies (look at all the illicit work and tax evasion). So yeah, I'm not here to say I have the solutions to make free-market capitalism the best system possible, I just wanted to highlight a point this video omitted.

With your points about moving, that hits on one of my biggest issues with capitalism and that it relies on people with the fewest resources to make the most changes.

(Leans into the mic) 'Imagine you are on a plane ... and that plane crash-lands on a desert island ... '