Yes, capitalism is doomed to eventual failure and collapse. This fact can be easily proven with just 3 prepositions.
  1. A capitalist economy must expand in order to remain healthy.
  2. Expansion requires resources.
  3. Resources are finite within the universe.

Thus we find that there comes a point, wherein there are no resources free to be used for expansion. As expansion halts, the capitalist economy withers and dies.

We see here that due to no future expansion (there aren't any resources with which to expand), the economy cannot grow. (Even in an information based economy there comes a point when everything is known). Without the expectation of growth, there will be no investment, as there will be no return on investment. Short run Aggregate Supply will fall, as it is no longer profitable to produce. As SAS drops, unemployment will run rampant, and as no one has money to purchase goods and services, the economy collapses under it own dead weight.

Would all downvoters please say baa.

SocialistWolfs thesis is correct. Capitalism is bound to waste all resources, and fade away. And so will the world too.

As I first read the words, it seemed correct to me. Now I've been thinking. It is not that simple.

To blame the problem of limited resources on capitalism is a bit off-target, actually. A socialist economy has not unlimited resources. But the problems I guess SocialistWolf is trying to point out, are these:

  1. The ideology of capitalism does not include environmental concerns at all, unless they actively disrupt business (e.g. fishing industry need fish)
  2. The (capitalistic) value of recycleable resources is no larger than the value of non-recycleable resources. That means: A pure capitalist economy would just as well take a non-recycleable resource (say, oil) to make power as a recycleable (say, hydro-electricity or sunpower). There is no incentive to choose "wisely" - just short-term money-making.
  3. Capitalistic corporations expand. Why? Because the reason the investors put their money into a corporation was to maximize their profits. You can do that by expanding or by making a more effective organization.

As opposed to this would a pure socialist economy have the opportunity to control all these things - and take whatever concerns they want to take. A socialist society (=a society that collectively thinks of everyone as most important) would actively choose the solutions which benefit mankind the most, and most of the time that would be the most environmental option.

A socialist economy does only have to expand according to its population growth - but socialism doesn't either provide some sort of population control (OK we do not count killing people, Stalin is dead).

But resources are finite also in a perfect, socialistic world. We would just not have to use them. And if they ended, we would still not need any. Gee.

Yes I know - We do "NEED" resources. But we wouldn't kill off our entire economic system if they ended - we would just get a lowering of living standard. In a capitalistic system, we would get a much harder smack - the corporations would go bankrupt, people would get unemployed, and we would get a lowering of living standard.

My conclusion, added as an update the day after the original writeup, is: Capitalism (in its pure form) is more prone to choose methods which uses the cheapest available source of resources. The cheapest available source is not necessarily the most resource-saving or the most recycleable or the most resource-wasting.

A more controlled system than capitalism can control resource usage better than capitalism. Capitalism can not per definition control its resource usage! Today this is a problem with f.ex. oil. We have the technology to make cars that don't waste all the oil - but the market does not pay for them because they cost more to make.

There are three premises to this argument and a conclusion. By standard methods there are three parts to an argument:
  1. Premise
  2. Claim
  3. Evidence
Evidence in this case is wholly lacking. Furthermore, the claim must be supported by this evidence. The premises must also be accepted as true.

Furthermore, it is helpful for the argument to show where counter arguments (such as the one that I will make) are flawed. This is often done as evidence because that is one of the two things the counter arguments can attack (the other is the form)

  1. A capitalist economy must expand in order to remain healthy
  2. Expansion requires resources
  3. Resources are finite within the universe

  4. Therefore, capitalism is doomed to eventual failure and collapse is an excellent source for reading on logic and arguments and includes a large number of fallacies.

Hasty Generalization: A generalization based on too little evidence, or on evidence that is biased. Example: All men are testosterone-driven idiots. Or: After being in New York for a week, I can tell you: all New Yorkers are rude.
There is both too little evidence and that which is there is heavily biased.

A capitalist economy must expand in order to remain healthy
First off, just to make sure that everyone is talking about the same thing - let me define capitalism for the duration of this argument. It is unfortunate that this hasn't been done prior to my critique. Capitalism is an economic system which is characterized by private ownership of capital goods, investments by private decision, and prices, production, and distribution of goods are determined by competition in a free market. Thank you Merriam-Webster.

Now that that is defined, the statement that 'a capitalist economy must expand to remain healthy' can be looked at. Unfortunately, I cannot find any papers written about exactly what constitutes a healthy economy - but then I'm not an economist. Still, the question remains "is it possible for a system as described above to be healthy without expanding?" Can a capitalist system maintain a status-quo?

A status quo with respect to what? Here, we look at the second premise, and see that this is referring to resources. Capitalism itself will never hold a status quo for long with respect to ideas - some disruptive idea comes along and throws the economy upside down for awhile until things settle out. This is natural and good in the long run. It is even possible for the long run to reduce the consumption of resources as we see with the emerging ultra-light cars that are either electric or fuel cell powered. These cars take less energy to move around, and do so more efficiently. Why? Because someone can make money selling them. Thats capitalism for you. But yet, there is no evidence that a capitalist economy requires constantly more resources.

Expansion requires resources
There is that resource again. What does it really mean? A source of supply or support, a natural source of wealth or revenue, a source of information or expertise.

First off realize, that everything requires resources of of sort or another. It would be interesting to see what sort of economy exists with the heat death of the universe - if there is anything it will be the hoarding of what little energy can be found.

I've previously attempted to show that expansion of market does not require more physical resources. If anything, in economies where resources are important, there is an increased demand for more efficient use of these resources - higher gas millage, better recycling processes. Look at Japan, a very resource poor nation, and we see extremely efficient use and recycling of these resources. And yet, they continue to expand with better and more effective products.

The resources that are required more of are not the physical type, but rather the human type - ideas. But then, this is not about the resources of the mind. Knowledge is power.

Resources are finite within the universe
There are a finite number of particles in the universe. Yes. Its a really big number. As humans, we haven't even reached Type I civilization on the Kardaschev scale. It is difficult to extrapolate the resources (physical and energy) available to a society that is Type I, much less Type II or Type III (or the hypothetical type IV that can control and use all available energy in the universe), much less the economy that such a civilization would have.

The question of wise use of resources is one of the foresight of the people looking at long term investments. This is not unique to one system over another, but rather the availability of the resources and the forethought of management. I have yet to see research into the infrastructure of energy consumption in communist countries. The wind mill power arrays in the American southwest, the solar power farms. Are there examples of this forethought in Cuba or the old Soviet Union? Still, the lack of forsight cannot tacked on to capitalism - some people have it, some don't.

The incentive for a wise choice comes from looking far enough ahead, not from the economic system a person is in.

Therefore, capitalism is doomed to eventual failure and collapse
Capitalism is no more doomed to eventual failure and collapse than that of any other economic system. All economies and civilizations require some resources There is nothing unique about capitalism in this way. There are possible claims that I an throwing in a red herring, trying to draw the attention away from disproving the above argument - nevertheless...

  1. A (fill in) economy must consume resources to remain healthy
  2. Resources are finite within the universe
  3. Therefore, a (fill in) economy is doomed to eventual failure and collapse.
This is just as good (or bad) an argument as has been initially proposed and would show that any economy will eventually fail. Nothing unique about capitalism has been proven. When there are no resources, there is no economy. It does not matter if this is a capitalistic one or socialistic one.

I hope that I have shown sufficient reason that all of the premises are flawed and that the claim is moot with regards to the distinction that one economic system is doomed while others are not.

The note by m_turner is very important: The resources can be immaterial. More and more this is the case.
However, the "old economy" based on the exploitation of limited resources may be in trouble in some point. And it's not necessarily oil we're talking about here but water.

This is built-in feature of any capitalist company. This is not only a Marxist superstition and the need for expansion can be easily proven by simple Google search (eg. expansion is necessary in market economy..). The capitalists tell it themselves. If a company does not grow, some others will and they do their best to drive others out of the market.

One very important notion, however, was still missing and it's the concept of ratio of profit. I don't know what was the term used by Marx but this was the one of few things he really was right.
The ratio of profit decreases as time passes by. Capitalists have to invest more and more on automation and machinery. In the short term, they can get more profit than their less advanced counterparts but in the long run you have to invest more and more capital into a process. As a result some companies will go bankrupt and workers are laid off and finally we have a crisis here.
But this does not mean capitalism is doomed. Even we can find the tendency of decreasing ratio of profit from statistics, capitalism is able to resurrect itself. No system itself will collapse. Do you think the Soviet Union collapsed itself? No way, it was people who acted. In parallel, it has to be people who have get enough with capitalism and it's their duty to overcome the system. But back to the resurrection.. As the crisis has been won, some companies will come out of it stronger and the ratio of profit has increased. Again, there's historical evidence that this has happened before and is very likely to happen again.

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