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Seven Fixes for American Capitalism

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Re: Seven Fixes for American Capitalism

#51

Post by posterboy »

pseudolus wrote: post #20
simplecomplex wrote: post #13

Anti-trust isn’t equipped to deal with anything because it’s arbitrary and vague. “You’re too big because some bureaucrats said so” is not law. That’s not justice. It’s totalitarian. How can a company avoid breaking the law if they don’t know they’re breaking it?

>>Anti-trust isn’t equipped to deal with anything because it’s arbitrary and vague. That's something of a gross mischaracterization of antitrust law. The Sherman Act and other laws provide various guidelines as to what constitutes anticompetitive conduct. Through the succeeding decades since the introduction of antitrust legislation courts have also consistently built up case law that provides further guidance.

You are arguing in favour of the above argument. If case law has to be established on a case by case basis, then because the law is a priori insufficient.

Re: Seven Fixes for American Capitalism

#52

Post by magduf »

vxNsr wrote: post #44
grecy wrote: post #26

Earlier quoted context omitted.

For a long time America has been by far the richest country in the world, without a credible second place (though maybe China is that now) And yet for decades the quality of life of hundreds of millions of Americans is lower than that of people in other, poorer developed countries. Why is that? What's the point in having the richest country if it doesn't have the best conditions for those living in it? Is it worthwhi…

> And yet for decades the quality of life of hundreds of millions of Americans is lower than that of people in other, poorer developed countries. This statement is wildly ignorant or intentionally misleading, you are claiming that at the very least 2/3 of all americans have a quality of life worse than other poorer countries. this is simply a false unsubstantiated statement.

No, it's completely true. Most Americans do not have a better quality of life than most Swedes, most Danes, or most Germans.

Re: Seven Fixes for American Capitalism

#53

Post by spamizbad »

hevi_jos wrote: post #42
fallingfrog wrote: post #30

You can buy and sell almost anything under capitalism. You can buy or sell property. You can buy or sell pieces of a company (stocks). You can buy or sell human labor. And the way that businesses make money is by essentially arbitraging some market, for example by buying something in one place and selling it somewhere where it is more expensive, or by buying labor and selling the products of that labor at a profit. B…

What socialism system are you talking about? Just name one socialist country that applies your ideal scenarios. IMHO this system only exist in your mind, it is not real. Countries that people say are Socialist like those in the north of Europe, are really capitalistic societies. I have known plenty of real socialist countries in the world, and they only share misery. In those socialist countries, like Venezuela or Cu…

What’s the deal with both sides of the socialism debate leaning on “No true Scotsman!” To make their point?

I mean, a decade ago the conservative press was even trying to argue Venezuela wasn’t a true socialist country because 70% of its economy is still private. Source: https://www.foxnews.com/world/what-socialism-private-sector-...

Part of the reason “socialism” has seen a rise in popularity is that everything a millimeter left of Hayak is branded as socialism if it’s rhetorically convientient.

Re: Seven Fixes for American Capitalism

#54

Post by dnautics »

No mention of ending inflation, which is a deliberate state-driven policy to steal from the poor to give to the rich and make the state "look good" by lowering the metric of unemployment:

https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

"even in the long run, it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."

Re: Seven Fixes for American Capitalism

#55

Post by rizzom5000 »

nabnob wrote: post #45

I agree with some of the points being made in this article, but there's definitely better resources on this topic. The paper mentioned in the article, "Amazon's Antitrust Paradox", is very thorough and easy to read even for someone (like me) who doesn't have a background in economics. The key point made in that paper is that modern antitrust legislation only looks at price when determining whether a monopoly is harmi…

> This statement doesn't make any sense. If you increase the number of software engineers, the average wage will decrease.

It also assumes that there will be jobs available. Increasing the supply software engineers does not mean the demand will increase. I see this logic error all the time when people discuss solutions to income and wealth inequality. Actually, the solutions are taxation and estate taxes; but those proven solutions are rarely mentioned.

Re: Seven Fixes for American Capitalism

#56

Post by posterboy »

thomasec wrote: post #21
simplecomplex wrote: post #13

Anti-trust isn’t equipped to deal with anything because it’s arbitrary and vague. “You’re too big because some bureaucrats said so” is not law. That’s not justice. It’s totalitarian. How can a company avoid breaking the law if they don’t know they’re breaking it?

I think the ambiguity is kind of the point. If things were written out ("doing X is monopolistic"), then it would be easy for companies to operate in an noncompetitive manner, so long as they don't violate specific laws. Plus, the definitions of things like monopolies vary so much across industries, that it would be impossible to come up with specifics that cover every instance of anti-trust violations. I don't think…

OP alleges that the given rules are used for abusive judcement. You miss the point and opine that it works as intended. In sum, there's the funny argument that abuse is intended :D

Re: Seven Fixes for American Capitalism

#57

Post by amalcon »

tribune wrote: post #36

The chart showing USG spending / GDP excludes transfer payments, which strikes me as misleading. Transfer payments have ballooned in the time period shown and are still transfers of cash out of the government's coffers. I'm not some sky-is-falling Federal debt doomsayer; borrowing has been cheap and we're not breaking a sweat to service the debt. Still, it's hardly controversial that the current trajectory is unsusta…

Transfer payments are presumably excluded because GDP traditionally excludes transfer payments. Including something in the numerator, but not in the denominator, is a good way to get weird ratios. E.g. it would be possible (though it would not presently happen in the US) to have a spending:GDP ratio greater than one.

I do agree that it would be better to use some other denominator that does not have this problem, but it isn't a crazy decision to begin with.

Re: Seven Fixes for American Capitalism

#58

Post by api »

nabnob wrote: post #45

I agree with some of the points being made in this article, but there's definitely better resources on this topic. The paper mentioned in the article, "Amazon's Antitrust Paradox", is very thorough and easy to read even for someone (like me) who doesn't have a background in economics. The key point made in that paper is that modern antitrust legislation only looks at price when determining whether a monopoly is harmi…

Another thing the pricing test favored by the Chicago School doesn't consider is the effect of consolidation on entrepreneurship. Huge consolidated companies become de-facto standards that are hard to compete with for many many reasons and that have the resources to simply buy or clone any competitor in its crib. In the computing world they also tend to become platform monopolies with strong lock-in from APIs and network effects. You also get a huge problem with regulatory capture due to the massive budgets these companies have for lobbying and revolving door deals. If the mega-corps get big enough and exist long enough they start to effectively merge with the state.

The price to the consumer might not change a lot, but a lot of innovation doesn't happen when the market gets dominated by players like that.

Back to inequality -- this effect also leads to consolidation of more and more wealth at the top by these companies and to geographic consolidation of wealth in the cities where these monster companies are headquartered or have major operations. Today that's San Francisco, Seattle, Los Angeles, and New York. Due to the "law of rent" this forces up real estate costs in these cities, further making it hard for middle class people to build wealth regardless of where they live. Geographic wealth concentration means you face a choice between poor career prospects and living in a city where the real estate market takes all your surplus due to the natural spatial supply limits (land, commute times) that exist for housing.

Entrepreneurship is a major vehicle for geographic wealth dispersal and for class mobility from the middle class upward. Without entrepreneurship the ranks of the very wealthy become incredibly stagnant and almost like a generational nobility. (Europe has this problem too, though for very different reasons. In Europe the problem is too much cumbersome regulation making it too hard to start new businesses. So Europe has too much government and America has unstoppable mega-corps that crush everything new.)

Re: Seven Fixes for American Capitalism

#59

Post by bilbo0s »

pseudolus wrote: post #20
simplecomplex wrote: post #13

Anti-trust isn’t equipped to deal with anything because it’s arbitrary and vague. “You’re too big because some bureaucrats said so” is not law. That’s not justice. It’s totalitarian. How can a company avoid breaking the law if they don’t know they’re breaking it?

>>Anti-trust isn’t equipped to deal with anything because it’s arbitrary and vague. That's something of a gross mischaracterization of antitrust law. The Sherman Act and other laws provide various guidelines as to what constitutes anticompetitive conduct. Through the succeeding decades since the introduction of antitrust legislation courts have also consistently built up case law that provides further guidance.

Right.

It's not as ambiguous as people think it is, and that is what will likely disappoint a lot of people who think we can use it to reign in tech companies. It's actually been decided over the decades that some pretty specific things need to happen for an entity to warrant a breakup. For instance, Microsoft, was not broken up. AT&T was. There were actually some very specific reasons that this was the case. Contrary to popular belief at the time, it was not because Microsoft paid off the government.

By way of illustration using cases from anotheer era, I think Standard Oil and American Tobacco were broken up on the same day. The reasons behind Standard Oil are obvious so we don't need to go into that case, but American Tobacco is the interesting one. They thought they would get away with what they were doing because, in their minds, they were no different than the American Sugar Refining trust. They didn't control growing the tobacco, and they didn't control retail of the tobacco. Here's the thing though, they did control manufacturing of the products. ALL tobacco products. So you could grow tobacco, but there really was only one entity to which you could sell your crops. Ditto for retail of tobacco. You could only get products from one source. The court laughed off the United States v. E. C. Knight Company case because American Sugar did not control growing of sugar, or retailing of sugar, and they didn't even control all the making of sugar. So in reality, American Tobacco was something entirely different than American Sugar. The principals at American Tobacco had definitely miscalculated in this regard.

(Incidentally, by around 1920 (I think?), American Sugar could be shown to control Cuba's plantations, all refining of sugar, etc etc, and I believe? they were broken up too? Or maybe not broken up, but there were some sanctions for them? I don't remember it all it's been a while since law school. Anyway, you can google it if you want more info.)

Point is, you can't just have a successful company like Microsoft and claim that they have a monopoly. There's actually a lot more moving parts. It's why Microsoft walked out of court with a slap on the wrist. It's why American Sugar didn't even get a slap on the wrist in 1895, but the court had a good belly laugh. And it's why AT&T and American Tobacco got broken up as a result of their indictments.

Re: Seven Fixes for American Capitalism

#60

Post by chasd00 »

d_burfoot wrote: post #38

A lot of analyses of capitalism miss out on the fact that the problems it creates vary widely by sector. Warren Buffet said that if "a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down." That's because the airline industry didn't return profits to investors; instead the vast value created by the industry accrued overwhelmingly to the public,…

The computer you're typing on and your Internet connection has everything you need to create incredible value for yourself and humanity. No property, factories, government intervention required.

What's sitting in front of you is so mind bogglingly more powerful than the "airline industry".

btw "..for the government to make sure that.." is asking a lot. Keeping potholes filled gives the government a run for its money.

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