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The Capitalist Manifesto: Greed Is Good (To a point)

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Re: The Capitalist Manifesto: Greed Is Good (To a point)

#21

Post by gort »

nazgulnarsil wrote: post #7

us free marketers have already lost...capitalism, greed, these are terms invented by anti-free market ideologues. the free market existed before the term capitalism was coined by Marx, what is greed but self-interest? those who pretend to be concerned with something other than their own welfare are in denial at best, and manipulative liars at worst. If we only ever debate on their terms we can not hope to avoid the s…

"those who pretend to be concerned with something other than their own welfare are in denial at best, and manipulative liars at worst."

http://wiki.lesswrong.com/wiki/Typical_mind_fallacy

You are not me.

Re: The Capitalist Manifesto: Greed Is Good (To a point)

#22

Post by sgibat »

nazgulnarsil wrote: post #18
rw wrote: post #14

Earlier quoted context omitted.

What do we want to achieve? Markets, with all of their permutations, are just a few tools in our toolbox. I completely agree with you that the debate needs to be made much less ideological and much more precise, but we cannot pretend these discussions are happening in a vacuum. I am a fan of Rawls' "veil of ignorance" line of reasoning. This is probably because I want to embrace "luck" not as an excuse for domination…

markets are not really a thing. they are just what happens in the absence of people shoving guns in other peoples faces. in the absence of force the only way to get what you want is to offer other people things that they want in exchange. this is civilization, the alternatives are barbarism.

that isn't entirely true. small groups behave more like communes. think of small tribes or family units. everyone has to pull their weight, but much is done simply for the good of others or for the good of the group as a whole. the domination of the market only emerges when a group grows to a certain size.

i would suggest that civilization requires both communes and markets to function properly -- basically, communes interacting with other communes and individuals in a market. markets may get you what you want, but to get things done, groups must behave like communes, all working together -- you do not barter over what you will get out of individual tasks. true, tasks are done in exchange for a continued wage, and the establishment of a job is done in a market. but once you are within a group, what is most effective? doing every task because you are paid to do so, or because you want the product to be as good as possible? I think that ties into one of the reasons that startups are so much more effective than large corporations; if I can try to put my finger on it, pride for the product and group cohesiveness.

i don't know what the answer is, but I just want you to consider that markets are not only not the only tool humans have used to cultivate civilization, but they are not even the first tool.

and when technology progresses to the point where we can give every individual a chance at a healthy and productive life at no cost to society, they will certainly not be the last.

Re: The Capitalist Manifesto: Greed Is Good (To a point)

#23

Post by berntb »

nazgulnarsil wrote: post #12
rms wrote: post #10

Earlier quoted context omitted.

Krugman was very influential in the development of a theory of international trade not involving perfect competition. Whatever you think about economics in general, it seems to be a pretty clear step towards more closely modeling reality.

the problem is that it is impossible to audit said models. unlike real science the social sciences can't isolate variables in order to test predictive power.

Like e.g. palaeontology, economists can't do experiments. You must remember that about economy.

I've read a bit too much criticism of economy as a science using the same argument you see from creationists against palaeontology. (That is, assumptions that all researchers are idiots and/or in a conspiracy against the creationists/left wing extremists.)

Re: The Capitalist Manifesto: Greed Is Good (To a point)

#24

Post by cchooper »

nazgulnarsil wrote: post #18
rw wrote: post #14

Earlier quoted context omitted.

What do we want to achieve? Markets, with all of their permutations, are just a few tools in our toolbox. I completely agree with you that the debate needs to be made much less ideological and much more precise, but we cannot pretend these discussions are happening in a vacuum. I am a fan of Rawls' "veil of ignorance" line of reasoning. This is probably because I want to embrace "luck" not as an excuse for domination…

markets are not really a thing. they are just what happens in the absence of people shoving guns in other peoples faces. in the absence of force the only way to get what you want is to offer other people things that they want in exchange. this is civilization, the alternatives are barbarism.

But why do you need to offer them something when you could just take it? The answer is that they will shove a gun in your face if you do. Property rights are just as much based on force as any other law.

Re: The Capitalist Manifesto: Greed Is Good (To a point)

#25

Post by rue »

As Marx summarised it, capitalism is characterised by a pattern of cyclical booms and crashes, generally crashing deeper each time.

He was not, actually, positing that it would eventually collapse but that it may survive its cycles so long as there are enough "willing" people to take the brunt of the crashes and least of the booms at the bottom rungs of society.

Of course, he probably had less of an idea about the resource problems we will be facing in the near- to mid future, complicating capitalism's crash-recovery.

Personally, I think it will take at least two more of these before there is anywhere near enough support for abandoning capitalism.

Re: The Capitalist Manifesto: Greed Is Good (To a point)

#27

Post by bokonist »

Any exchange between two actors can be in one of four categories:

1) voluntary in-kind exchange ( Christmas presents, buying each other rounds of drinks)

2) coercive in-kind exchange ( corvee, slavery, conscription, bound serfdom)

3) voluntary monetary exchange ( buying food at the super market )

4) coercive monetary exchange ( taxes )

#1 is great, but unfortunately is does not scale. It works very well among family, friends, and small communities, but it quickly breaks down in larger economies.

Of the remainder, #3 seems obviously the superior way to engage in transactions. And #3 is free market capitalism. Capitalism is not good because greed is good. Capitalism is good because it forces greedy people to actual produce something of value and exchange it, rather than just taking it from others.

The financial crisis is not an example of #3 but of #4. The "too big too fail" and "lender of last resort" policies have been in place for decades. They allowed banks to take huge risk, and then when the risks failed, the government uses its coercive powers to tax the public and bail out the financial system, thus encouraging even more risk taking.

Re: The Capitalist Manifesto: Greed Is Good (To a point)

#28

Post by anamax »

rms wrote: post #8
lionhearted wrote: post #4

A good piece. I have a serious question for people smarter than me about the following: -- "Then there was the 1997 East Asian crisis, during the depths of which Paul Krugman wrote in a Fortune cover essay, "Never in the course of economic events—not even in the early years of the Depression—has so large a part of the world economy experienced so devastating a fall from grace." He went on to argue that if Asian count…

Here is a summary of Krugman's work leading to the Nobel Prize with all the references for you to follow up on. If you don't have journal access, email me with a link to the paywall site and I can send you the articles you want. http://www.economics.ox.ac.uk/Research/wp/pdf/paper423.pdf Basically, you have to separate his work as an economist from his politics or make a general distinction between quantitative and li…

> Basically, you have to separate his work as an economist from his politics or make a general distinction between quantitative and literary economics.

And we think that the Nobel folks made that separation and didn't do it to "kick Bush in the leg" (to quote a committee member's comment in a previous year about a given award)....

> I respect Krugman's intuitions even if his predictions are often wrong. It's hard to predict the future, even for a noted economist.

The point of science is to predict the future....

Re: The Capitalist Manifesto: Greed Is Good (To a point)

#29

Post by bokonist »

rms wrote: post #10
nazgulnarsil wrote: post #9

Earlier quoted context omitted.

Krugman's contributions aren't widely discussed because they are in the realm of quantitative economic analysis. Heavy in math and not prone to simple explanations. Most of quant econ revolves around trying to use mathematical techniques to derive a more accurate model of what's going on with large scale scale economic aggregates (GDP and CPI are the most well known due to the media). Of course the critique of the en…

Krugman was very influential in the development of a theory of international trade not involving perfect competition. Whatever you think about economics in general, it seems to be a pretty clear step towards more closely modeling reality.

Can you name anything that Krugman said that was both a) novel and b) true? Can anyone? Did he really say anything about trade that wasn't known to Alexander Hamiliton? Did he say it in a way that wasn't already said more eloquently by Jane Jacobs? Sure he added a lot of mathematics, but the Wikipedia article is pretty damning on that front: "The econometric evidence for NTT was mixed, and again, highly technical. Due to the time-scales required and the particular nature of production in each 'monopolizable' sector, statistical judgements have been hard to make. In many ways, there is too limited a dataset to produce a reliable test of the hypothesis which doesn't require arbitrary judgements from the researchers." http://en.wikipedia.org/wiki/New_Trade_Theory

In other words, Krugman's contribution is a lot of math that has never been shown to work. When you add math to a theory in a way that does not improve people's understandings of the issue, you have not added to the world's store of knowledge.

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