11–20 of 64 posts
For instance, Detroit has not been a valuable place to have a business or home for decades but it has faded slowly, but the assumption that housing prices would go up forever was worth trillions, but as soon as it was disproved, those trillions disappeared fast.
Although capitalism is crash-prone to some extent it is the most reliable system mankind has ever come up with. It is arguably because it's idea of individual success reflects the nature of the animal the system is supposed to work on.
"its idea of individual success reflects the nature of the animal the system is supposed to work on." I don't quite follow you. Please explain.
The problem is misaligned incentives. Cash bonuses paid out long before the consequences of decisions become clear create problems.
Financial institutions can partly remedy this by replacing annual bonuses with long-term reward schemes like that adopted by Credit Suisse in 2005. If a decision proves to have been reckless/short-sighted a few years on, bonuses can be retracted.
Because much of the perceived value in capitalism is based on assumptions, and assumptions can change in value much faster than physical assets? For instance, Detroit has not been a valuable place to have a business or home for decades but it has faded slowly, but the assumption that housing prices would go up forever was worth trillions, but as soon as it was disproved, those trillions disappeared fast.
Earlier quoted context omitted.
"its idea of individual success reflects the nature of the animal the system is supposed to work on." I don't quite follow you. Please explain.
Sure, what I mean is that the pursue for individual success is a key feature of Homo sapiens species. Traditional capitalism declares it as its main trait. The fact that participants of a capitalist system are encouraged to act according to their natural behavioral patterns makes capitalism the most stable system ever known.
Society rests on and perhaps morality itself is based on the repression of innate desires. Males have a desire to procreate, but rape is forbidden. We have a desire to promote the success of those with our genes, but discrimination is forbidden. I would say our society is better off because we shun, outlaw, and degrade the exercise of traits we would like to see less of in those who share our society with us.
Humans are at a crossroads here. We have the knowledge, the vision, and the power to evolve ourselves into the species we choose to be. Why, if there is an alternative, would we choose to create a system that rewards those for behaving in a manner that we don't like, in a manner that we would like to see less of?
Imagine saying, "You're so greedy!" Now imagine saying, "You're so giving!" It's a totally different feeling. Imagine a society that promotes the giving over promoting the greedy.
However, what shouldn't really happen is a cluster of failures. That's caused by misinformation in the pricing system. Real saving rate doesn't matched up with interest rate, so people are being fooled by non-existent capitals.
At least that's how I understand it.
Earlier quoted context omitted.
Sure, what I mean is that the pursue for individual success is a key feature of Homo sapiens species. Traditional capitalism declares it as its main trait. The fact that participants of a capitalist system are encouraged to act according to their natural behavioral patterns makes capitalism the most stable system ever known.
Capitalism is one of the few social constructs that encourages negative traits. Who is to say that selfishness is better than altruism? Altruism seems to be a human trait as well -- we do act altruistically on occassion. Is it impossible to build a financial system based on altruism? We tend to think quite highly of those who give of themselves more than take. Why don't we build a financial system that rewards those…
A more substainable form is voluntary exchanges in which individuals exchange good and services for their percevied benefit. That's cooperation based on "stratching your back, you stratch my back".
Also note that individuals are what composed of groups. They are the smallest building block of society. Focus on them, and you benefit the group. The ideal situtation is that you would never need to sacrifice an individual for the whole group.
pat explanations were getting old a year ago. please don't upvote this crap.
Earlier quoted context omitted.
Sure, what I mean is that the pursue for individual success is a key feature of Homo sapiens species. Traditional capitalism declares it as its main trait. The fact that participants of a capitalist system are encouraged to act according to their natural behavioral patterns makes capitalism the most stable system ever known.
Capitalism is one of the few social constructs that encourages negative traits. Who is to say that selfishness is better than altruism? Altruism seems to be a human trait as well -- we do act altruistically on occassion. Is it impossible to build a financial system based on altruism? We tend to think quite highly of those who give of themselves more than take. Why don't we build a financial system that rewards those…
It's not clear to me whether that's a bug or a feature. Most cases in which altruism would be possible in the ancestral environment are cases in which acting "altruistically" actually benefits the actor in the long run. We're now in a world where it's less clear that those actions will benefit the actor (or actor's genes), on balance. Altruism does result in arguably worse outcomes in many cases (food aid to Africa, liberating Iraq, etc) in the modern world.
Is it impossible to build a financial system based on altruism?
Well, it doesn't seem stable. A financial system based on self-interest is stable when there are a few people with altruistic motives in the system. A financial system based on altruism would rapidly fail in the presence of a few self-interested people in the system.
Edit: removed extra "actually"s.
I couldn't find the view on one page / print button for a minute. The above is the proper URL if you, like me, do not enjoy pressing next.