Anti-Tesla sentiment and the death of optimism

You know, I don't think that you and I are in that much disagreement on some of the basics.

I think we'd both agree that Capitalism can be good. Government serves a purpose in maintaining the framework of items you listed. We also agree that the corrupt ruling class combination of the Government and Capitalists (along with way too much of the media these days, I'd add) is a disaster.

Where I'd imagine that we differ is that I think that the pendulum has swung way too far in the direction of the State. With a debt that is now bigger than our GDP and the last hundred years of mostly one-way growth of government and its agencies, the Government is a huge black hole for money that encourages, institutionalizes, and legalizes ever-increasing degrees of corruption.

The best way forward that I see is to cut back the size and scope of Government. Get it back to doing the basics that it was commissioned to do (The Constitution) and not much else unless there's enough impetus for those functions that would drive Constitutional Amendments. If the incentive to sway law-making power would be reduced, much of the cronyism that exists today would disappear. The ruling class would be significantly diminished.

Sure, Wal Mart might have more economic power, but its lobbying and legislative power would be drastically reduced. At the end of the day, I have a choice to shop at Wal Mart or to not shop at Wal Mart. I don't have a choice regarding paying taxes to feed the behemoth of a Government that does not provide expected reasonable value for those taxes... not to mention the negatives of crippling public education, moving to a lowest-common-denominator-but-still-expensive healthcare system, etc.

> under the assumption the other player is a selfish dickhead. In a capitalist environment like America's, with no social controls or other factors besides ruthless logic, this is the default behavior.

Sigh. One of the most prominent features of capitalism is that it relies on mutually beneficial exchanges.

Ideal capitalism. Much of modern capitalism is about getting the person on the other side of the table into a desperate enough situation, that they have to take your 'mutually beneficial' offer. I present as Exhibit A Greenspan's speeches on lowering worker mobility during his tenure.

This.

The above said, the learning algorithm has flaws that can make Pareto optimality impossible (economists call this market failure). This is where we inject aspects of central planning into the modern economy, with debatable results.

For example, it presumes a level of information symmetry through the price mechanism. Markets begin to fail when people don't/can't understand what they're buying - the "market for lemons". This is why we have an SEC and mandatory , standardized, information filing for publicly traded companies for example.

Another is high levels of uncertainty about the sudden need to buy something, which is so expensive it can wipe you out - eg. Major surgery. Insurance markets cover this. But we all have observed the debates and challenges of managing a sizeable and representative risk pool.

Intellectual property and digitized products (music, movies, TV shows, software) also has a fascinating role here in that it is a public good that is open to free ridership unless (a) the good is a secret and is accessed only as a service or (b) the government enforces a temporary monopoly on an aspect of the product. The latter may be past its prime given the abuse of patents and copyrights leading to non-Pareto outcomes.

Great article. Very well articulated.

If you haven't seen it already, there's a BBC series called "The Trap" which raises interesting questions too around game theory reflecting human behaviour versus game theory driving human behaviour through modern capitalism.