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Capitalism Has Gone Off the Rails

spiegel.de

221–230 of 310 posts

Re: Capitalism Has Gone Off the Rails

#221
post #213

Earlier quoted context omitted.

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 th…

> In theory that sounds great, but what happens if everyone says "fuck it!" and just starts taking the basic income? That's actually an argument for basic income. It's the mirror image of money politics, only its actually democratic.

I want to write a really sarcastic comment, but that won't really achieve anything. I suspect that either I really don't get something, or that you really don't get something but I can't tell which.

You said "That's actually an argument for basic income" in response to my statement "if everyone stops working and starts taking basic income" which I don't understand. I thought I laid out a fairly clear argument that if everyone stopped working everything falls apart.

To me, the logical next events are that with not enough taxes the government either prints money or defaults on its debt. That leads to either to massive inflation (undermining the value of basic income and perhaps resulting in civil unrest like in the Arab Spring when food prices got too high) or in the case of default, quite possibly the government ceasing to exist.

So how does everyone taking the basic income solve a problem? Is the goal to get rid of the government? I can't take that seriously because if people are serious about a basic income, then it stands to reason that they want it to continue, and if the government fails, so does the basic income which it provides.

I'm not saying US-style capitalism is great and perfect; it's clearly flawed in huge, huge ways. But that doesn't somehow make the flaws of a basic income system non-existent does it?

Re: Capitalism Has Gone Off the Rails

#222
post #205

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).

This is not about envy, and you sound very condescending to me by calling the issues these people have 'envy'. This is about serious mental illness caused by a perception of enormous inequality. Envy is just an emotion, not a way of life. The cause of their problems is not just from celebrity news or politics. It's the very society we live in. You can't just ban advertisements for cars, or decide that cars can't look…

I don't know what you mean by "serious mental illness" or "way of life". You seem to be describing negative feelings, specifically a longing aroused by qualities someone else has. That's envy, according to the standard definition.

If you'd rather use the a different term to avoid inspiring negative feelings about me, feel free to suggest one. For the remainder of this post I'll use the term "Mind State X" to describe an unpleasant mental state resulting from the observation that other people possess qualities that you wish you had.

If we cannot change how humans react to inequality: we get jealous, get sick, turn criminal or exhibit other negative traits. Then we should instead change our society to address the real issue: the inequality itself, and not just it's perception. Now doing that would be a whole other barrel of fish obviously.

I'm confused. Is inequality intrinsically bad? If so, then Mind State X is irrelevant, and you should be able to make that argument without it. If Mind State X is the thing that is bad, then inequality is irrelevant if it does not cause Mind State X.

Lets also generalize this discussion of Mind State X. Many non-money related things cause Mind State X - I'm tall and good looking, some people are short and ugly. I have sex with many women, some people are involuntarily celibate. I'm somewhat skinny, other people are far more muscular than me. These things can also cause Mind State X.

For example, a woman I used to sleep with is now sleeping with someone who is much stronger and more muscular than me. I feel Mind State X as a result. I believe the solution is that she shouldn't inform me of this. You believe the solution would be for her to be prevented from doing this, I take it?

On to practical matters: Everything around them lets them know they're at the lowest rung of a very large ladder to the socio-economic top.

Residential segregation and targeted advertising would seem to be a great way to address this. Luckily the world is moving in that direction anyway.

Re: Capitalism Has Gone Off the Rails

#223
post #21

There's a lot of conflation in this article between distribution and economic growth, which I think arises from the Spiegel's European perspective. Going back to the start of the DAX tracking (mid-2011), we see okay performance in German DAX index, stagnation for the French CAC and British FTSE, and strong performance in the US S&P 500 and Japanese Nikkei. [1] Eurozone unemployment has soared into double digits of la…

A German here, I probably read Spiegel for >10 years (from ~2000 to beginning of 2014): They are kind of "left" which reflects in their articles "raises a second narrative about inequality". They'd support basic income any time. The Spiegel has turned into yellow press lately, I am surprised to see a (english) article on HN. Thank you HN for unveiling that there are some spots in Europe that are doing fine and that t…

"The Spiegel has turned into yellow press lately" that's your very own personal opinion but the way you serve it (as absolute truth) is yellow. Not to add in various other mishaps in your argument (eg "kind of "left"", thanks for unveiling ...). In short that's nice propaganda (albeit not very effective here).

Re: Capitalism Has Gone Off the Rails

#224
If I were a rich software engineer feeling angry at people who criticised the capitalist system we had, perhaps whilst failing to acknowledge that people in America die because they can't pay health insurance, or are homeless because they can't afford housing, or end up eating what they find in someone's trash because they can't afford to buy food, I think that I'd do one thing:

I'd consider whether perhaps I might be wrong. Maybe my worldview is a bit skewed by the situation I find myself in. Maybe my country isn't very fair at all, and it's not right that I have the privileges I do whilst my fellow citizens suffer. And maybe it's not the Government's fault, either. Perhaps those Europeans with their welfare states aren't all socialist nutcases, but maybe they have something right that America has got wrong.

Often I hear Americans say "this isn't real capitalism! we need more capitalism! less government!". And I look at the state of homelessness in their country, or those without health insurance, and I think "really? Do you really need more of that? Maybe instead you need to spend a little less on your military and a little more on looking after the least fortunate in your society, the sick, the vulnerable. Maybe that would make a difference."

The "more capitalism" mantra always makes me think of communists who argue "well, this wasn't real communism! That's why it failed!" And it's so ironic, because those most vocally against communism are the same people who are cheerleading extreme capitalism, failing to notice that they are simply on the other side of the mirror.

Re: Capitalism Has Gone Off the Rails

#225

Earlier quoted context omitted.

The freezer and electricity are available to at least 97% of poor Americans. One or more cars is available to 73%. http://www.census.gov/prod/2008pubs/h150-07.pdf For comparison, India and Bangladesh are likely to have electricity percentages around 50% (no good data is available) and car ownership rates in the single digits.

*Freezer and electricity are available to 97% of _all_ American (households). One or more cars is available to 73% of _all_ American (households).

No, _poor_ American households. See table 2-4 on page 52, look in the "Below poverty level" column on the right side of the page.

Re: Capitalism Has Gone Off the Rails

#226
post #113

Capitalism works just fine. The problem is throughout Europe and the US we have this weird kind of corporate socialism where governments are more and more involved in their respective economies and then blame "capitalism" when things don't work out. You can't call it capitalism if companies aren't allowed to fail. And banks are so heavily regulated they're de facto agents of the state. The banking crisis isn't an ind…

The banking crisis was a result of de-regulation, caused by neo-liberal government agendas. After the great depression, the banking sector was stable and only became problematic again when the laws that were introduced after the great depression started to be dismantled. Are you saying thats not what happened?

The US financial crisis happened in large part due to the monopoly of the "big three"[1] credit ratings agencies mislabeling bad debt as good. These agencies had a corner on the credit ratings market thanks to the US federal gov't (SEC) bestowing them with the coveted "Nationally Recognized Statistical Rating Organization" (NRSRO)[2] status, a status which only those three companies held between the mid-1990s until early 2003, firmly cementing them in the financial industry as the chosen ones for credit ratings. The US gov't also gave some extra protection to NRSRO-rated debt, e.g. by recognizing it as legal investments.[3]

So in this case, over-regulation and the monopoly it bred had quite a large hand in the financial crisis.

[1]: http://en.wikipedia.org/wiki/Big_Three_(credit_rating_agenci...

[2]: http://en.wikipedia.org/wiki/Nationally_recognized_statistic...

[3]: http://en.wikipedia.org/wiki/Nationally_recognized_statistic...

Re: Capitalism Has Gone Off the Rails

#227

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…

Respectfully, it believe you've misread that census report. 3% of _all_ American households lack a complete kitchen, not 3% of poor Americans. That is a much more striking statistic, and there's reason to believe it may be higher, since marginalized Americans are both the most likely to be suffering lack of basic resources and the most likely to be unrepresented by the US census. Further, this study only measured hou…

See Table 2-4, Page 52, the rightmost column ("Below poverty level"). 503/14157.0 = 3.5%.

http://www.census.gov/prod/2008pubs/h150-07.pdf

Re: Capitalism Has Gone Off the Rails

#228

Earlier quoted context omitted.

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…

I'm not tremendously impressed with Marx's analysis.

Here is my initial premise. Across the entire economy, current consumption is paid for by current production, with any difference buffered by available filled stockpiles and empty stockpile capacity.

If you eat an ear of corn, someone has to grow an ear of corn, and transport it to you. If that person grows more corn than other people want to eat, it has to be stored somewhere until those people get hungry again. And the transportation and storage themselves consume resources.

This is the economic gradient. Goods and services are brought to market by producers, and taken away by consumers. In order to make this worthwhile--remember that bringing something to market is not a zero-resource operation--the consumers must give the producers something of greater value to them than whatever it is they produced.

Because this is sometimes tricky, we all agree for convenience that everyone always wants "money"--whatever it may be--more than whatever it is that they produce.

This works just fine when all producers are also consumers.

Now introduce industrial capital. Now a producer can, via the multiplying effect of capital, potentially single-handedly satisfy the entire worldwide demand for a good or service, at lower cost than any other producer who lacks the required capital. Again, this still works fine, so long as that person can manage to somehow consume all those resources.

But then we run into a problem. What if that person cannot manage to spend that much? The excess has to be stockpiled, according to the premise. Without the convenient fiction of money, that super-producer would have to start filling warehouses with goods and services. (We will pretend for the moment that services can somehow be stockpiled.) But even then, until the imbalance is rectified, that guy will simply keep filling warehouses that can never be emptied. Those resources are lost to everyone else. The super-producer simply has everything he could possibly need or want, and there's nothing anyone could possibly give him in trade without first tricking him into thinking it is better than anything he already has. With money, the problem of warehouse space is solved by reducing all that surplus to a number, which is stored in a computer.

But then we run into another problem. The value of the money is determined via continual market recalculations by the amount currently in circulation. Warehoused money might as well not exist. The super-producer has to keep moving it around, or prices will adjust to accommodate the fact that it is not being spent. He therefore gets less in exchange for his production. Then, whenever he goes to buy something, prices rise again temporarily. So the super-producer "invests" his money stockpile, which is a fancy way of saying that he moves it around from being owned by him in his own name to owned by him in a fictional business name. Or it approximates virtual warehouse space for his owned physical goods and for his owned services. The point is that investment is not consumption.

Whenever someone produces at a level that far exceeds their level of consumption, someone else's production is essentially being thrown into an economic black hole.

That's the problem with Capitalism. It can concentrate wealth so much that the owner cannot possibly consume it all, over his entire lifetime, or even in the lifetimes of his heirs. And until someone in the line of inheritance can become creative enough to embark upon some consumption megaproject, the concentration of capital sucks the life out of the productive economy.

Marxism solves this problem by diluting the concentration right at the source, by distributing the capital production in the hands of more spenders. But then there are no megaprojects without re-concentrating that wealth via government.

The capitalist solution to this problem is to give rich people more expensive things to consume. If, for some reason, they don't want to consume, the system fails. And nowadays, rich people are mostly investing rather than spending. If they do not change their ways, and quickly, the traditional release valve is to take back ownership of resources by force.

Re: Capitalism Has Gone Off the Rails

#229

Earlier quoted context omitted.

In a word, yes. Although: 1) I don't necessarily agree with your claim "through democratic institutions can shape their societies as they see it" - democracies are quite a bit messier than that. 2) I wouldn't use the word "converging" - I would probably say becoming stuck in similar states of sub-optimal social organisation. And to touch on your other suggestions, I would say that, while these are certainly the riche…

The rules of economics do not dictate outcomes. Government intervention can move economies to different equilibriums. It's just how the rules of physics don't necessitate that people give up on the idea of flying. They dictate what one has to do to fly--not what one's end-goal should be.

I find it odd that you seem to find my outlook pessimistic. Quite the opposite: I would argue fervently that I absolutely believe in a world of flight. It is a world underpinned, a world that must be underpinned, at heart, by one utterly simple principle:

Let us defend the right of one another to the freedom to act as we each see fit, as long as we do not cause each other harm.

Note that this is still a world in which many people can and most certainly will make poor decisions and fall behind in life. But there is nothing stopping a true libertarian from feeling that some of their time and resources can be best spent helping those people improve their economic decision-making.

Yet a true libertarian would also honour the decision of another not to care (though they might not respect it.)

Re: Capitalism Has Gone Off the Rails

#230
post #213

Earlier quoted context omitted.

> In theory that sounds great, but what happens if everyone says "fuck it!" and just starts taking the basic income? That's actually an argument for basic income. It's the mirror image of money politics, only its actually democratic.

I want to write a really sarcastic comment, but that won't really achieve anything. I suspect that either I really don't get something, or that you really don't get something but I can't tell which. You said "That's actually an argument for basic income" in response to my statement "if everyone stops working and starts taking basic income" which I don't understand. I thought I laid out a fairly clear argument that if…

> I thought I laid out a fairly clear argument that if everyone stopped working everything falls apart.

Or the price of labor goes up. In a system where money buys the legislature, your only real recourse is to say "Fuck it, I'm out." Basic income would enable labor to vote by withholding labor. That's a feature, not a bug.

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