Capitalism Has Gone Off the Rails • Hacker News Board

Re: Capitalism Has Gone Off the Rails

#31

Post by RangerScience » Mon, Nov 03, 2014, 5:54 AM UTC

stormbrew wrote: post #15

dnautics wrote: post #4

Earlier quoted context omitted.

Note that what Iceland did and the idea of clearing out bad capital and malinvestment are actually capitalist ideas, versus, say bailouts and central bank manipulation, which are not.

I think it's really important to make it clear that they (well, specifically bailouts really) are also not ideas of the opposing bogeymen, though. No one who even thinks of considering themselves socialist or, say, anarchist would ever say "Yeah, let's give a bunch more money to rich people!" The tendency for power to accumulate into the hands of a few, who then manipulate the economy to their own ends, is a problem…

"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants"

Hopefully we'll be able to do this in a less-than-literal fashion.

Re: Capitalism Has Gone Off the Rails

#32

Post by adventured » Mon, Nov 03, 2014, 6:05 AM UTC

radmuzom wrote: post #22

Animats wrote: post #17

This is an important article, but I doubt there will be a useful discussion of it here. The developed world has incredible productive capacity. With 1% of the workforce in agriculture and 8% in manufacturing, the US produces as much stuff as China. There are no significant shortages of any manufactured good anywhere in the developed world. Quality is pretty good across the board, too. This is unique in history. That'…

Great comment. The standard argument given by capitalists is that the "pie" will keep on growing, so while the existing owners of capital will get richer, it will also lift others out of poverty. Why is this not happening any more? Is it because earlier automation used to create "new" jobs which require labour, while now automation is removing the need for labour at all?

It's because the US is no longer a Capitalist nation; as such it no longer derives the maximum benefits of Capitalism. It was a mixed economy 30 or 40 years ago. Today it's a welfare state that depends on its central bank to remain solvent, with hyper regulation, high levels of debt, and high levels of taxation. The number of economic regulations and general laws passed each year in the US is truly astounding, and literally impossible to either keep up with or manage (this includes the laughable tax code).

A century ago there were hardly any regulations or taxes. Today every segment of the economy is highly regulated outside of tech and nearly everything you can taste, touch, smell, eat or look at is taxed (often multiple times).

Re: Capitalism Has Gone Off the Rails

#33

Post by psychometry » Mon, Nov 03, 2014, 6:06 AM UTC

mattmcknight wrote: post #27

Animats wrote: post #17

This is an important article, but I doubt there will be a useful discussion of it here. The developed world has incredible productive capacity. With 1% of the workforce in agriculture and 8% in manufacturing, the US produces as much stuff as China. There are no significant shortages of any manufactured good anywhere in the developed world. Quality is pretty good across the board, too. This is unique in history. That'…

This is not an important article, it is a rant against people with "tacky mansions", a turn of phrase that is more indicative of the author's point of view than the other conventional points about not understanding creative destruction. I think it is this overly nationalist view of economics that needs to die, not "capitalism". There is not less productive work to go around, it's just not being done in the US. We are…

A third of the population in the richest nation on earth lives in poverty. According to you, that's not a problem because even poorer people in Bangladesh are slightly less poor than they would be if American companies had never employed them. What kind of callous person could look around at all the suffering and think this system's working great? Or do you not look around at all, holed up in a tacky mansion of your own?

Re: Capitalism Has Gone Off the Rails

#34

Post by ef4 » Mon, Nov 03, 2014, 6:12 AM UTC

radmuzom wrote: post #22

Animats wrote: post #17

This is an important article, but I doubt there will be a useful discussion of it here. The developed world has incredible productive capacity. With 1% of the workforce in agriculture and 8% in manufacturing, the US produces as much stuff as China. There are no significant shortages of any manufactured good anywhere in the developed world. Quality is pretty good across the board, too. This is unique in history. That'…

Great comment. The standard argument given by capitalists is that the "pie" will keep on growing, so while the existing owners of capital will get richer, it will also lift others out of poverty. Why is this not happening any more? Is it because earlier automation used to create "new" jobs which require labour, while now automation is removing the need for labour at all?

> Why is this not happening any more?

It is happening. The average manufacturing wage in China is up 700% in fourteen years.

It isn't happening in the US and Europe, but that's because the average worker here still makes absurdly more money than the average worker in the developing world. The gap is closing quickly. As it does, we'll be able to see more evenly spread growth again.

But purely from a humanitarian standpoint, it's hard to argue that it's a bad thing for workers who make $7000 a year to be getting bigger raises than workers who make $37000.

Re: Capitalism Has Gone Off the Rails

#35

Post by adventured » Mon, Nov 03, 2014, 6:21 AM UTC

RangerScience wrote: post #11

maratd wrote: post #10

Earlier quoted context omitted.

I'm saying the US has some of those very same policies in place.

So who doesn't?

Hong Kong and Singapore are the two freest economies. They have very minimal welfare states, with relatively light regulation and taxation. Their wealth creation and economic growth have been astounding over the last ten years.

Meanwhile, most of Europe has seen zero GDP growth in real terms since 2004/05. France has seen an average of sub 1% nominal GDP growth for a decade; negative in real terms. Japan, which is a massive welfare state, has seen zero GDP growth for 20 years; their State spending dug such a deep hole, a quarter of their revenues go to just paying interest on debt, and they've taken to debasing their currency as the last step available to them to hold off further collapse. Spain, Italy, Portugal, Greece, et al. are welfare state disasters, rapidly imploding. The US has seen zero standard of living improvement for 40 years, and that's before accounting for the massive increase in debt that has yet to exact its full toll.

You can count the number of welfare states in the world that are doing well on one hand, with one of them being a temporary oil empire named Norway.

Re: Capitalism Has Gone Off the Rails

#36

Post by SwellJoe » Mon, Nov 03, 2014, 6:27 AM UTC

ef4 wrote: post #34

radmuzom wrote: post #22

Earlier quoted context omitted.

Great comment. The standard argument given by capitalists is that the "pie" will keep on growing, so while the existing owners of capital will get richer, it will also lift others out of poverty. Why is this not happening any more? Is it because earlier automation used to create "new" jobs which require labour, while now automation is removing the need for labour at all?

> Why is this not happening any more? It is happening. The average manufacturing wage in China is up 700% in fourteen years. It isn't happening in the US and Europe, but that's because the average worker here still makes absurdly more money than the average worker in the developing world. The gap is closing quickly. As it does, we'll be able to see more evenly spread growth again. But purely from a humanitarian stand…

From a purely humanitarian standpoint, it's hard to argue that it's a good thing for CEOs who make $9.6 million a year to be getting bigger raises than workers who make $37000.

http://www.csmonitor.com/Business/2014/0527/CEO-pay-hits-10-...

http://www.huffingtonpost.com/2012/05/02/ceo-pay-worker-pay_...

http://www.csmonitor.com/Business/2013/1212/CEO-vs.-worker-p...

http://www.epi.org/publication/ceo-pay-231-times-greater-ave...

Re: Capitalism Has Gone Off the Rails

#37

Post by rattray » Mon, Nov 03, 2014, 6:30 AM UTC

RangerScience wrote: post #25

Animats wrote: post #17

This is an important article, but I doubt there will be a useful discussion of it here. The developed world has incredible productive capacity. With 1% of the workforce in agriculture and 8% in manufacturing, the US produces as much stuff as China. There are no significant shortages of any manufactured good anywhere in the developed world. Quality is pretty good across the board, too. This is unique in history. That'…

We do have a model that has successfully demonstrating certain principles which may be capable of addressing this problem: Burning Man. Bear with me for a second. I'd say (and then pointing out my lack of formal or amateurish study of economics) that the issue you're pointing at is that capitalism doesn't function well in a post-scarcity environment, which we're entering. This is because our means of determining valu…

> what if it were primarily defined by altruism?

It's a fun question, but I think the answer is less entertaining: we would all be less happy. The fact is that most people are better at guessing what they themselves really want than other people are. It's a question of information. I know more about my desires than my friends do, for the most part.

Altruism is nice, but inefficient.

Spending quality time with friends & family, on the other hand, truly is priceless. I don't want them to be nice to me - I just want to be with them. So finding an economic (and cultural) system - be it a few tweaks on the current one or a radical rethink - that gives me more opportunities for a healthy social/family life ought to be the goal, in my opinion.

Re: Capitalism Has Gone Off the Rails

#38

Post by ef4 » Mon, Nov 03, 2014, 6:32 AM UTC

lotsofmangos wrote: post #16

dnautics wrote: post #4

Earlier quoted context omitted.

Note that what Iceland did and the idea of clearing out bad capital and malinvestment are actually capitalist ideas, versus, say bailouts and central bank manipulation, which are not.

Bailouts and central bank manipulation are also capitalist ideas, or at least they were developed by capitalist economists within a capitalist framework on behalf of capitalists to try and keep capitalism afloat. Bailing out banks and hoping they will spend it on industry just after they bankrupted themselves by gambling shows an unquestioning and total belief in the institutions of capital. Socialists would have jus…

> Bailing out banks and hoping they will spend it on industry just after they bankrupted themselves by gambling shows an unquestioning and total belief in the institutions of capital.

On the contrary, it betrays deep distrust in the actual institutions of capitalism: market prices and bankruptcy.

"Institutions of capital" cannot just mean "the people who hold the capital", because by that definition every oligarch since prehistory was a capitalist. That contradicts even Marx, who saw capitalism as a distinct modern development.

Re: Capitalism Has Gone Off the Rails

#39

Post by rattray » Mon, Nov 03, 2014, 6:34 AM UTC

psychometry wrote: post #33

mattmcknight wrote: post #27

Earlier quoted context omitted.

This is not an important article, it is a rant against people with "tacky mansions", a turn of phrase that is more indicative of the author's point of view than the other conventional points about not understanding creative destruction. I think it is this overly nationalist view of economics that needs to die, not "capitalism". There is not less productive work to go around, it's just not being done in the US. We are…

A third of the population in the richest nation on earth lives in poverty. According to you, that's not a problem because even poorer people in Bangladesh are slightly less poor than they would be if American companies had never employed them. What kind of callous person could look around at all the suffering and think this system's working great? Or do you not look around at all, holed up in a tacky mansion of your…

I don't think that's what they're saying. They're saying that the problem of American Poverty is temporary; even poorer people in Bangladesh are earning gradually more and more, and will one day earn as much as unskilled American laborers. And only then will unskilled Americans be able to find work again.

FWIW, I'm less enthusiastic about the current system/situation than mattmcknight appears to be.

Re: Capitalism Has Gone Off the Rails

#40

Post by ende » Mon, Nov 03, 2014, 6:35 AM UTC

stormbrew wrote: post #15

dnautics wrote: post #4

Earlier quoted context omitted.

Note that what Iceland did and the idea of clearing out bad capital and malinvestment are actually capitalist ideas, versus, say bailouts and central bank manipulation, which are not.

I think it's really important to make it clear that they (well, specifically bailouts really) are also not ideas of the opposing bogeymen, though. No one who even thinks of considering themselves socialist or, say, anarchist would ever say "Yeah, let's give a bunch more money to rich people!" The tendency for power to accumulate into the hands of a few, who then manipulate the economy to their own ends, is a problem…

Nor has any political force yet emerged built on that premise of social power structures. Perhaps classial liberalism, georgism, distributism, and good old fashioned anarchy. Every existing political force along the spectrum simply tries to subvert the pyramid to its own purpose.