Capitalism Has Gone Off the Rails • Hacker News Board

Re: Capitalism Has Gone Off the Rails

#161

Post by vacri » Mon, Nov 03, 2014, 1:01 PM UTC

collyw wrote: post #147

tsotha wrote: post #109

Earlier quoted context omitted.

Poverty is a relative thing. Very few actual poor people would recognize American "poverty" as such.

I disagree. I saw a definition of being rich as "never having to worry about money". Now take being poor as "always having to worry about money". Doesn't matter if you have got a widescreen TV. If you sell it off you may eat better for a few weeks, but after that you will still be in the same situation, in constant worry about money.

People really do need to give up on widescreen TVs as a marker for "not poor". I was in the Mekong Delta swampland, passing by rudimentary shacks that didn't close completely against the elements. I still saw big TV sets in them.

Re: Capitalism Has Gone Off the Rails

#162

Post by pacala » Mon, Nov 03, 2014, 1:01 PM UTC

curiouscats wrote: post #46

RangerScience wrote: post #8

Earlier quoted context omitted.

Yeah. I'm, to a decent degree, a fan of calling what we have today "corporatism" rather than "capitalism".

Yes. Many of the problems today have nothing to with capitalism but with government policies that are largely aimed at making those with the gold happy. Capitalism is mainly about having markets that have competition. NO organization is suppose to have market power. This isn't really possible, but that is the concept. And we are so hugely away from it we can't call what is going on now capitalism. We have allowed peo…

> NO organization is suppose to have market power.

This is naive wishful thinking. It's popular to create simplistic models to explain basic economic principles, models that assume perfect markets. However, reality does not (have to) comply to such models.

Analytically, the principle of economies of scale (1) strongly favors, through market mechanisms, the development of large entities. A large corporation, dividing its marketing and R&D costs over a large market share, has significantly lower costs than upstart small competitors. This enables it to out compete smaller upstarts, and serves as a natural barrier of entry to a specific market. Upstarts are either relegated to a small niche, or, having stumbled upon an entirely new market with no dominant players yet, grow to be a large dominating player in their respective market.

Empirically, every single market is dominated by a handful of large actors. This pattern is observed in local markets, national markets and global markets. Quick example for the HN crowd, the cloud hosting market. Amazon, Microsoft, Google, Rackspace account for more than half the market share (2). In a young market, with little regulation, where a lot of people on this site have plenty of technological skills to engineer an IAAS service from scratch. But few have the business skill, capital and timing to actually enter the market successfully.

(1) http://en.wikipedia.org/wiki/Economies_of_scale

(2) http://www.businessinsider.com/amazon-web-services-market-sh...

Re: Capitalism Has Gone Off the Rails

#163

Post by yummyfajitas » Mon, Nov 03, 2014, 1:02 PM UTC

rayiner wrote: post #155

yummyfajitas wrote: post #50

Earlier quoted context omitted.

95% of the biggest nation in the world (or maybe second biggest, no one really knows the exact pop of India and China) lives in far deeper poverty than poor americans. Many of them experience actual suffering - not enough food, no flush toilet, no power. What, precisely, do you believe poor Americans are suffering from? The only concrete answer I usually hear is envy (I.e. "oh noes the inequality"). http://economix.b…

Why should we care about people in India or China? We're entitled to shape our society the way we want, and to address the local ills we see fit to address. Our predecessors worked very hard so that we would be richer than India and China and have the luxury of figuring out how to better the lives of urban "poor" who have cable TV.

The premise underlying my post is the belief that all humans have equal moral value. I gather you don't hold this view and therefore will disagree.

However, if you favor some sort of protectionism, I'm curious why you think I should care about poor Americans. Supposing I were to give up humanism and revert to tribalism, as you seem to have done, why would I allow poor Americans into my tribe? Why not simply define my tribe as wealthy white males?

(I personally have practical reasons not to do this. A minority of my friends are American and a smaller minority of the Americans are white males. But those are just practicalities, not moralities.)

I'm also curious whether you favor imperialism. After all, if our goal is simply to maximize American utility, why not just pillage and plunder everyone else?

Re: Capitalism Has Gone Off the Rails

#164

Post by SCHiM » Mon, Nov 03, 2014, 1:02 PM UTC

yummyfajitas wrote: post #91

zanny wrote: post #75

Earlier quoted context omitted.

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more than dollar menu cheeseburgers per calorie. And if you don't have a working kitchen you can't cook farmers market produce. And that is at best. A lot of us are unemployed, and families are collapsing in on themselves as y…

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck This is entirely in the control of most poor Americans. India's GDP/capita is $5500 after adjusting for cost of living, yet India has a 20% savings rate. Poor Americans could reduce consumption and save if they wished. in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more th…

There have been studies that showed that the psychological problems that stem from being poor have little to do with your absolute wealth. It's more of a peer-thing. If you're the poorest man in a very rich peer-group you'll still feel miserable and less.

The problem then with being poor in America is not that you're rich compared to a farmer in vietnam, the problem is that you're poor compared to the people you see on your crappy TV.

To quote the report: "Mental health is also a key pathway through which inequality impacts on health. There is overwhelming evidence that inequality is a key cause of stress in itself and also exacerbates the stress of coping with material deprivation"[0]

[0] http://www.euro.who.int/__data/assets/pdf_file/0012/100821/E...

Re: Capitalism Has Gone Off the Rails

#165

Post by facepalm » Mon, Nov 03, 2014, 1:05 PM UTC

I don't think the healthiness of any specific industries (like banking and finance) has anything to do with capitalism. Just like, say, manufacturing CPUs has nothing to do with capitalism. If you have a bug in your manufacturing process then your company might go broke. Likewise, if there is a bug in your financial rules, financial institutions might break down. That has no bearing on the validity or invalidity of capitalism as a whole.

Re: Capitalism Has Gone Off the Rails

#166

Post by ceronman » Mon, Nov 03, 2014, 1:05 PM UTC

rayiner wrote: post #155

yummyfajitas wrote: post #50

Earlier quoted context omitted.

95% of the biggest nation in the world (or maybe second biggest, no one really knows the exact pop of India and China) lives in far deeper poverty than poor americans. Many of them experience actual suffering - not enough food, no flush toilet, no power. What, precisely, do you believe poor Americans are suffering from? The only concrete answer I usually hear is envy (I.e. "oh noes the inequality"). http://economix.b…

Why should we care about people in India or China? We're entitled to shape our society the way we want, and to address the local ills we see fit to address. Our predecessors worked very hard so that we would be richer than India and China and have the luxury of figuring out how to better the lives of urban "poor" who have cable TV.

> Why should we care about people in India or China?

Replace "India or China" with "Black or Hispanic" to see how sad this comment is. It still surprises me to see that we live in a world where racism is condemned but discriminating people for the place they were born in is socially accepted.

Now, to answer your question, we should care about people in India or China because they're people. Human beings. The place they were born in, just like the color of their skin, should be an irrelevant factor. Something assigned to you randomly just before birth.

Nationalism sucks.

Re: Capitalism Has Gone Off the Rails

#167

Post by badname » Mon, Nov 03, 2014, 1:20 PM UTC

james1071 wrote: post #105

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'…

There is more than one thing going on. Balance sheet recession. Mistaken policy response-austerity, German unhelpfulness in Eurozone. Globalization-i.e. cheap labour Automation Financial industry acting against interests of wider economy.

There are a lot of going on but the point is to single out symptoms from root causes. Otherwise we will wallow trying to deal with symptoms forever.

Dunno if anyone has yet mentioned one of the basic contradictions inherent in capitalism which could very well be at the root of what we experience. Means of production are private (factories, etc) and the owners as almost all players in capitalism take care to maximize _their_ profit and not society's well being. That maximization involves dumping down workers wages (another commodity in capitalism). Interestingly enough, workers are also consumers so dumping their wages erodes their purchasing power. And that's just one of the contradictions that stem from having a social mode of production driven by private interest.

The name of the most prominent economist that pointed out this and other contradictions some decades ago is Marx (which interestingly enough is never mentioned when capitalism crisis are on the table).

Re: Capitalism Has Gone Off the Rails

#168

Post by blumkvist » Mon, Nov 03, 2014, 1:27 PM UTC

amelius wrote: post #139

blumkvist wrote: post #131

Earlier quoted context omitted.

>Participatory decision-making involves the participation of all persons in decision-making on issues in proportion to the impact such decisions have on their lives. I live in a country in the EU. 90% of the population does not understand supply and demand. Even more people do not understand the notion if "rhetorics". You want those people to participated in making decisions? Do you really believe that? I am so fed u…

Perhaps we should fix democracy before we try to fix capitalism.

We should fix education before even attempting to fix democracy. Both scholarly and within the family.

Any attempts to temper with the social framework by largely un/poorly/mis-informed masses of people leads to catastrophes.

Russia 1917 Italy 1929 Germany 1934 Spain 1939

Some enlightened people will always try to exploit people's resentment to gain control and use it as they see fit. Soon the system is far worse than before.

Re: Capitalism Has Gone Off the Rails

#169

Post by upofadown » Mon, Nov 03, 2014, 1:28 PM UTC

deong wrote: post #148

upofadown wrote: post #132

There seems to be an almost religious belief that capitalism has to work in all circumstances. But you can't just keep pumping credit into an economy with the hope that it will continue to expand. People only have so many needs. After a while there is no real point in building either new factories or houses. Why isn't that fact that interest rates are zero not interpreted to mean that we are simply at capacity? Capit…

Because a simple walk down an average street nearly anywhere in the country strongly indicates otherwise. In science, we like to imagine that we'll begrudgingly discard our theories in the face of a single contradictory fact. Economists don't even seem to pretend that's a thing they'd ever do. There are some 50-60 million people living in poverty in the US. Schools don't have books or desks. People are quite literall…

I think you misunderstood my point. I am claiming that credit driven capitalism is incapable of providing any particular benefit under current conditions. In other words; capitalism is entirely ineffective...

From my perspective "playing financial games" is caused by the simple desperation of people who have large amounts of money and are having trouble coming to terms with the current reality. They face the horror of actually having to spend their capital...

Re: Capitalism Has Gone Off the Rails

#170

Post by yummyfajitas » Mon, Nov 03, 2014, 1:38 PM UTC

SCHiM wrote: post #164

yummyfajitas wrote: post #91

Earlier quoted context omitted.

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck This is entirely in the control of most poor Americans. India's GDP/capita is $5500 after adjusting for cost of living, yet India has a 20% savings rate. Poor Americans could reduce consumption and save if they wished. in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more th…

There have been studies that showed that the psychological problems that stem from being poor have little to do with your absolute wealth. It's more of a peer-thing. If you're the poorest man in a very rich peer-group you'll still feel miserable and less. The problem then with being poor in America is not that you're rich compared to a farmer in vietnam, the problem is that you're poor compared to the people you see…

Yes - as I said in my first post: What, precisely, do you believe poor Americans are suffering from? The only concrete answer I usually hear is envy

The best solution I see to the problem of envy is directing social opprobrium towards people who exacerbate the problem (e.g., politicians appealing to envy, celebrity news publicizing lifestyles of the rich and famous).