Capitalism Has Gone Off the Rails • Hacker News Board

Re: Capitalism Has Gone Off the Rails

#191

Post by BenoitEssiambre » Mon, Nov 03, 2014, 3:00 PM UTC

The main purpose of money is to provide a transaction medium. So that we can negotiate contracts and trade things without barter. This function requires money to act as an artificial store of value. However money doesn't have intrinsic value in itself so if people start to put too much faith into this paper, it can replace more tangible market based stores of value such as stocks, bonds commodities etc., those that are backed by real economic activity. When real economic activity is replaced by a government "paper" store of value, you get unemployment and sub potential production.

Right now in many places, Europe in particular, interest rates are artificially high, yes they are near zero but zero is high when the alternative private investments would be in the negative in risk adjusted, inflation adjusted term. That is why corporation and banks tend to hoard cash. Cash is kept artificially more valuable than market investments.

It is critical in these situations to have slightly higher than normal inflation to allow central bank real rates to be more negative and closer to market rates for stores of value. When central banks don't cause enough inflation, they are subsidizing holders of money and money like instruments to the detriment of those who invest in things that are tied to economic activity. They are subsidizing economic idleness, they are keeping an artificial store of value worth more than free market investments and this creates gridlock in the economy.

Re: Capitalism Has Gone Off the Rails

#192

Post by lkozma » Mon, Nov 03, 2014, 3:06 PM UTC

facepalm wrote: post #165

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 c…

This is a good insight, with the remark that CPU manufacturers are rarely bailed out by the taxpayers, after designing a faulty processor and getting close to bankruptcy.

Re: Capitalism Has Gone Off the Rails

#193

Post by kuni-toko-tachi » Mon, Nov 03, 2014, 3:14 PM UTC

Another absurd anti-capitalism diatribe from left oriented journalists.

Capitalism is not the problem. We have too little capitalism, not too much. Central banking and the banking industry in general are the problem, since it exerts monopoly control over interest rates and currencies. Free markets are resilent distributed networks and therefore self-regulate and self-repair. Concentration of wealth is a valid concern, but only because many normal mechanisms of exchange have been co-opted by central entities. Because of this, people have to go through intermediaries to facilitate exchange. These intermediaries often do not have the interests of those parties at heart.

Re: Capitalism Has Gone Off the Rails

#194

Post by elif » Mon, Nov 03, 2014, 3:18 PM UTC

yummyfajitas wrote: post #170

SCHiM wrote: post #164

Earlier quoted context omitted.

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).

I've had the privilege of having time to sit down and talk with plenty of folks struggling in the southeast US. None of them, that is zero, show any discernable 'envy.' What you are talking about is either a straw man or a deeply hidden psychological issue I just couldn't detect a hint of. Or perhaps you are mistaking the new paycheck-to-paycheck middle class for the actual poor. In my experience these are either fiercy proud or cynically hopeless people with so many immediate issues they lack even awareness about what us rich people are doing.

The real problems they face are debilitating sickness, taking care of a family member with debilitating sickness, struggling to continue sleeping where they are presently, struggling with maintaining a human identity in a society that treats them subhumanly, trying to get hired as a felon, trying to secure the trust of any financial institution, trying to break drug habits and cope with psychosis and other mental illnesses without access to a pharmacy or non-ER doctor.

Re: Capitalism Has Gone Off the Rails

#195

Post by dragonwriter » Mon, Nov 03, 2014, 3:20 PM UTC

yummyfajitas wrote: post #50

psychometry wrote: post #33

Earlier quoted context omitted.

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…

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…

> 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").

Even if that was the only thing and the only source of suffering for poor Americans was relative deprivation compared to others in their immediate context, so what? Relative deprivation is an important, extensively empirically demonstrated, source of disutility. If one is interested in alleviating actual human suffering that exists, rather than artificially creating self-justifying excuses to defend perpetuating suffering, one would recognize that it is an important problem (not necessarily something which we should blindly bear every cost to minimize, as doing so may at some point do more to exacerbate other sources of suffering than it does to alleviate the suffering directly attributable to relative deprivation, but likewise something that should be considered, weighed, and addressed to the extent practical without doing more harm than good.)

Re: Capitalism Has Gone Off the Rails

#196

Post by ap22213 » Mon, Nov 03, 2014, 3:20 PM UTC

yummyfajitas wrote: post #170

SCHiM wrote: post #164

Earlier quoted context omitted.

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).

Your continual use of the word 'envy' belittles the psychological affects of poverty. Your use of that word seems to imply that poor people can somehow eradicate their psychological suffering through positive thinking or something similar. It's the "pull yourself up by your bootstraps" approach to reducing poverty, as US conservatives so frequently say. It is these clever uses of words that aim to reduce very complex issues to simplistic ones, ignoring systematic affects and pointing blame at individual irresponsibility.

Re: Capitalism Has Gone Off the Rails

#197

Post by dyeje » Mon, Nov 03, 2014, 3:22 PM UTC

yummyfajitas wrote: post #50

psychometry wrote: post #33

Earlier quoted context omitted.

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…

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…

You should watch the 30 Days episode about living on minimum wage. It is not a life you would want to live.

Re: Capitalism Has Gone Off the Rails

#198

Post by JoeAltmaier » Mon, Nov 03, 2014, 3:25 PM UTC

ap22213 wrote: post #196

yummyfajitas wrote: post #170

Earlier quoted context omitted.

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).

Your continual use of the word 'envy' belittles the psychological affects of poverty. Your use of that word seems to imply that poor people can somehow eradicate their psychological suffering through positive thinking or something similar. It's the "pull yourself up by your bootstraps" approach to reducing poverty, as US conservatives so frequently say. It is these clever uses of words that aim to reduce very complex…

And yet, I can't shake the feeling that if you took away all my money and property, I would be employed and back in an apartment in a month. What's a guy to think, when folks complain about how its too hard to move, to get an education, to save money, when I know I can do it?

Its hard to empathize with people with an outlook so different, that they can't imagine working their way out of poverty. Because I can.

Re: Capitalism Has Gone Off the Rails

#199

Post by msandford » Mon, Nov 03, 2014, 3:30 PM UTC

zanny wrote: post #77

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 have no successful model for dealing with this. Canada seems to have had pretty good success with that basic income town. And no major western democracy has really attempted it yet. I like it because it lets you have a completely deregulated economy, because both employer and employee would be participating in voluntary negotiation without a huge bias towards the employer - when one side is starving and need she…

In theory that sounds great, but what happens if everyone says "fuck it!" and just starts taking the basic income? I think it's fairly obvious that with nobody paying taxes there is not enough government revenue to pay and thus the system falls apart. Let's call this 0% workforce participation.

On the other hand, if everyone works really hard and is super productive and starts businesses and etc then at some point their market wages totally swamp the basic income and it's essentially un-needed and kind of a joke. And if that were to happen, prices would rise to the point where the basic income isn't anywhere near enough to live off of comfortably and it's existence is worthless. Let's call this 100% workforce participation.

There exists a whole spectrum of workforce participation between 0% and 100% and some of them might be stable-ish such that there isn't a positive-feedback loop that quickly runs society off the rails.

The problem that the champions of basic income haven't really addressed is that people fear the degenerate case of 0% workforce participation (or nearly so) and the mental calculation that people seem so able to do but which proponents of basic income seem to find impossible: where does this money come from? Why will I as a worker have to pay for things that non-workers get? Why do I not get to keep the fruits of my labor?

Ultimately money is useless by itself, and the economic system is one which allows us to divvy up the limited physical goods (the planet is finite, our ability to manufacture is finite, roboticized production lines don't operate at infinite speed, neither are they free, we still need SOME farmers, etc) to people. A system which says that everyone can have even if no-one works sounds an awful lot like a perpetual motion machine and thus people are skeptical.

Re: Capitalism Has Gone Off the Rails

#200

Post by ap22213 » Mon, Nov 03, 2014, 3:33 PM UTC

JoeAltmaier wrote: post #198

ap22213 wrote: post #196

Earlier quoted context omitted.

Your continual use of the word 'envy' belittles the psychological affects of poverty. Your use of that word seems to imply that poor people can somehow eradicate their psychological suffering through positive thinking or something similar. It's the "pull yourself up by your bootstraps" approach to reducing poverty, as US conservatives so frequently say. It is these clever uses of words that aim to reduce very complex…

And yet, I can't shake the feeling that if you took away all my money and property, I would be employed and back in an apartment in a month. What's a guy to think, when folks complain about how its too hard to move, to get an education, to save money, when I know I can do it? Its hard to empathize with people with an outlook so different, that they can't imagine working their way out of poverty. Because I can.

Well, we could always do an experiment to see if you're right.

Let's assume that you aren't able to use any existing education or connections, you start off with significant debt, and you are located in an area with high unemployment. If you are able to be back in your apartment in a month, I'll eat this computer.

Edit: If we threw the idea up on kickstarter, I'm sure that there would be more than enough support to pay for your opportunity costs (assuming you're not independently wealthy). It'd be an interesting experiment.