Blame Cronyism, Not Capitalism(journals.aom.org)
journals.aom.org
Blame Cronyism, Not Capitalism
https://journals.aom.org/doi/full/10.5465/amp.2019.0198.summary
260 comments
I think the best approach is a balance of powers between multiple branches of government, as we have in many liberal democracies. Executive, legislative and judicial. It's a long way from perfect, but it's actually worked pretty well for hundreds of years. Combined with a robust system of individual freedoms of speech, association, ownership and labour rights. What that all adds up to is capitalism plus regulation by a representative government.
The main alternatives that have been tried concentrate power in the hands of a single group, or ultimately a single person. In fact arguably giving power to a single group implicitly gives it to the leader of that group. This has always been a disaster, and always will be a disaster as long as we are recognisably human, with all the associated flaws.
Corruption and abuses are the result of human failings. We're always going to have to continuously strive against them.
The main alternatives that have been tried concentrate power in the hands of a single group, or ultimately a single person. In fact arguably giving power to a single group implicitly gives it to the leader of that group. This has always been a disaster, and always will be a disaster as long as we are recognisably human, with all the associated flaws.
Corruption and abuses are the result of human failings. We're always going to have to continuously strive against them.
The past 40 has seen an increase in housing regulation. NIMBYs create restrictive zoning rules.
Developers can only build after attending dozens of meetings. City council must grant an exception to the NIMBY laws.
Only wealthy developers can afford the process. Various council and board member get kick backs for the exemptions.
Housing is an important example because its the most expensive thing most people purchase. Grift is enabled by individuals electing representatives who oppose construction, not capitalism.
Developers can only build after attending dozens of meetings. City council must grant an exception to the NIMBY laws.
Only wealthy developers can afford the process. Various council and board member get kick backs for the exemptions.
Housing is an important example because its the most expensive thing most people purchase. Grift is enabled by individuals electing representatives who oppose construction, not capitalism.
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” -- Adam Smith
For the political experts out there, what would happen if we stopped allowing lobbying? That seems to me like the most obvious source of corruption.
Edit: ok, I should have worded better. What if we stopped allowing corporate lobbying through donations to elected officials?
I understand there would be loopholes to close, but isn't this the obvious source of government corruption?
Edit: ok, I should have worded better. What if we stopped allowing corporate lobbying through donations to elected officials?
I understand there would be loopholes to close, but isn't this the obvious source of government corruption?
The broad concept of "lobbying" is really just people bringing their concerns to elected representatives. I don't really see how you would ban it entirely.
There seems to me a massive difference between corporate interests openly bribing lawmakers in a brazenly material fashion vs. a group of concerned citizens merely voicing their concerns, yet the two are always conflated. Money is not speech and corporations are not people, I don't see why people tolerate this.
Well we do have laws against openly bribing lawmakers.
Lobbyists aren't handing over wads of cash, they are spending money on things like ad campaigns, surveys, studies, talks, busing people in to talk to their representative, etc which are meant to legitimately sway the opinions of both the elected officials and the electorate. Maybe to get more politicians to show up the lobbyists pay to serve nice steak dinners at a talk, and in the extreme maybe the talk is just a thinly veiled guise for what is really an expensive gift of steak dinner, but conceptually it's no different from any other potential catering option, and there is no simple way to ban it. Sure you can make specific schemes illegal, but there will always be another loophole. So long as you allow people to interact with their elected representatives and speak freely, there will be people who have their politician's ear. You might be able to eliminate lobbying by sequestering the politicians throughout their term, but that's going to have the opposite of the desired effect of making government more democratic.
Lobbyists aren't handing over wads of cash, they are spending money on things like ad campaigns, surveys, studies, talks, busing people in to talk to their representative, etc which are meant to legitimately sway the opinions of both the elected officials and the electorate. Maybe to get more politicians to show up the lobbyists pay to serve nice steak dinners at a talk, and in the extreme maybe the talk is just a thinly veiled guise for what is really an expensive gift of steak dinner, but conceptually it's no different from any other potential catering option, and there is no simple way to ban it. Sure you can make specific schemes illegal, but there will always be another loophole. So long as you allow people to interact with their elected representatives and speak freely, there will be people who have their politician's ear. You might be able to eliminate lobbying by sequestering the politicians throughout their term, but that's going to have the opposite of the desired effect of making government more democratic.
Bribery is not legal, never has been, and is not being advocates for.
If you want to call lobbying 'bribery' in a sort of exaggerated way, go ahead.
In my experience most of the rhetoric around bribery is reapoy just interested groups doing regular politics stuff--like 'if you do not support bill xyz we will tell our million newsletter subscribers you're a bad person'.
If you want to call lobbying 'bribery' in a sort of exaggerated way, go ahead.
In my experience most of the rhetoric around bribery is reapoy just interested groups doing regular politics stuff--like 'if you do not support bill xyz we will tell our million newsletter subscribers you're a bad person'.
There is very clear bribery going on though… speaking engagement fees, expensive vacations that are under the guise of lobbying, etc.
And it’s very clear that at least people in congress are very happy with this situation.
And it’s very clear that at least people in congress are very happy with this situation.
The problem is actually in the wide gulf between illegal bribery, and regulated lobbying. The law says "This is lobbying, these are the rules, and required reporting", and the law says "This is bribery, and these are the punishments". There's a lot of activities involving politicians and money that don't fall under either.
And removing the legal stuff (candidates get publicly disclosed campaign donations from companies in all the industries they're favourably disposed towards the status quo in, which gives a pretty visible hint to any voters who care about how they're going to vote on the issue) potentially backfires by making the grey area stuff more powerful (candidates have much smaller campaign budgets from capped donations from private individuals, but mystery benefactors are spending a disproportionate amount on astroturf campaigns against some of them anyway)
Easy.... congresspeople are public servants. As such make them be required to have a single bank account for their campaigns. This bank account has a $1 million limit.
Outlaw PACS/Super PACS.
Ban politicians from holding seats on corporate boards for 10 years following serving in any office, except they be returning to a board they already were on. (End revolving door/jobs).
Ban companies from donating at all to all elections.
Require news networks to supply free ads for candidates w/ equal airtime or ban all political ads period (I'd love this one). Let people get picked by merit of their debates alone.
I think the parties should also hold their primaries on the same day nationwide, so there's no 'game' or 'sport' it's just flat out - vote and be done with it, to the victor goes the spoils (the rest of the campaign$$ each candidate has amassed.
We also need ranked choice voting so that 3rd parties can have decent sway ...diluting the current duopoly and making it so interested parties and special interests if allowed would have to work harder and spend more to more parties to get their point across.
There's probably a slew of other things you could do. Of course this requires people in power to take away their own power...like that's gonna happen.
Outlaw PACS/Super PACS.
Ban politicians from holding seats on corporate boards for 10 years following serving in any office, except they be returning to a board they already were on. (End revolving door/jobs).
Ban companies from donating at all to all elections.
Require news networks to supply free ads for candidates w/ equal airtime or ban all political ads period (I'd love this one). Let people get picked by merit of their debates alone.
I think the parties should also hold their primaries on the same day nationwide, so there's no 'game' or 'sport' it's just flat out - vote and be done with it, to the victor goes the spoils (the rest of the campaign$$ each candidate has amassed.
We also need ranked choice voting so that 3rd parties can have decent sway ...diluting the current duopoly and making it so interested parties and special interests if allowed would have to work harder and spend more to more parties to get their point across.
There's probably a slew of other things you could do. Of course this requires people in power to take away their own power...like that's gonna happen.
I think they wanted to talk about getting money out of politics.
Lobbying, as it manifests in our (the United States, in my case) current form of governance, is a direct consequence of the fact that 538 people control how 30% of GDP is spent.
It has been pointed out that Daniel Webster was on retainer from various business interests while he was a senator. I don't know the figures for federal share of GDP in those days, but think it must have been much smaller.
538 (elected) people. Seems far more (rather than too few) than is necessary. If it were 10 elected people for example it becomes harder to hide in the crowd. Look how much scrutiny is applied to the supreme court.
I'd guess that the main issue they were highlighting was the "30% of GDP" part, which was actually more like 34% pre-covid (https://fred.stlouisfed.org/graph/?g=8fX). There has been a consistent upwards trend since the '50s, if not earlier, and there are people alive today who remember a time when we didn't even have a federal income tax.
The incentive for lobbying would remain and turn more deeply to black markets. To end lobbying you'd need to remove the incentive for lobbyists to seduce lawmakers.
Instead, remove the power of lawmakers or reduce/decentralize the power as much as pragmatically possible.
Instead, remove the power of lawmakers or reduce/decentralize the power as much as pragmatically possible.
In Plato's ideal republic the lawmakers, or protectors, were instead removed from society living in a parallel society dedicated to service. Therefore they would be incorruptable, or difficult to corrupt.
And how would one stop that, or would you really want to?
I consider campaigning to one's representatives a cornerstone of democracy and political activism. To get rid if that because groups we don't like also use it is anti-democratic.
I consider campaigning to one's representatives a cornerstone of democracy and political activism. To get rid if that because groups we don't like also use it is anti-democratic.
One of the arguments I heard around corruption caused by lobbying is that centralization of power makes it worse. It kind of boils down to persuading one person is easier than convincing many people.
Maybe in theory but in practice even in less centralized systems there is still generally just one person you need to persuade, and that one person is generally easier to persuade than if they were more central. If you compare local governments to state governments to the federal government, there is substantially more graft in the smaller governments. Local officials are cheaper to influence, have less of a spotlight on them (both from criminal investigators and the electorate), and have fewer competing interests to worry about.
> For the political experts out there, what would happen if we stopped allowing lobbying?
You mean, if you prohibit people (including other government decision makers) from communicating with government decision-makers about their preferences for government decisions?
Nothing good.
You mean, if you prohibit people (including other government decision makers) from communicating with government decision-makers about their preferences for government decisions?
Nothing good.
Lobbying is not actually that harmful when it's relatively transparent: i.e everybody can look up who funded who, which this kinda applies to US.
Many US citizens think lobbying is the source of the problem.At a first thought you may think that, but without lobbying you de facto have "unseen" lobbying: which is corruption, more or less.That's why in 'democratic' countries where lobbying is illegal, there's way more corruption.This is not to say that lobbying reduces corruption, no, but it's a way to somewhat keep transparency while influencing and pressuring politicians, which happens, happened, and will always happen.
Many US citizens think lobbying is the source of the problem.At a first thought you may think that, but without lobbying you de facto have "unseen" lobbying: which is corruption, more or less.That's why in 'democratic' countries where lobbying is illegal, there's way more corruption.This is not to say that lobbying reduces corruption, no, but it's a way to somewhat keep transparency while influencing and pressuring politicians, which happens, happened, and will always happen.
There have been a lot of attempts to curtail wealth driven lobbying. Capital somehow overcomes all of them.
This inability of capital to help itself from corrupting lawmakers is apparently the fault of the state, not the fault of capitalism for reasons I can't quite fathom but might make sense if I had a lot more money.
If somebody emerged from poverty in the third world though, and capital was tangentially involved then lavish praise is apparently due.
This inability of capital to help itself from corrupting lawmakers is apparently the fault of the state, not the fault of capitalism for reasons I can't quite fathom but might make sense if I had a lot more money.
If somebody emerged from poverty in the third world though, and capital was tangentially involved then lavish praise is apparently due.
>There have been a lot of attempts to curtail wealth driven lobbying. Capital somehow overcomes all of them.
Exactly. It’s called “capitalism” for a reason. Karl Marx understood exactly how it worked when he started using this term to refer to it. It’s also the basis for Marx’s “political economy” which understands the politics are inseparable from the economics.
Exactly. It’s called “capitalism” for a reason. Karl Marx understood exactly how it worked when he started using this term to refer to it. It’s also the basis for Marx’s “political economy” which understands the politics are inseparable from the economics.
Not a very useful thought experiment once you accept that you’d have to out-lobby the lobbyists to get it done.
I would guess the parent comment is referring to paid/corporate lobbyists.
Yes, we have political processes that have undefined read write access to unrelated settings and data.
You will have to format the drive and install a new Government.
You will have to format the drive and install a new Government.
Lobbying is just communicating your desires to your elected representative.
If we stopped it, we stop democracy?
If we stopped it, we stop democracy?
If we are discussing in good faith, the parent was probably talking about lobbying done by moneyed interests. Which is not necessary for democracy, itself a very broad term in its initial definition which does not include think tanks, political action comities and privately held mass media.
Wait what? You’re saying groups (think tanks, companies) shouldn’t be able to petition their elected representative as a condition of democracy?
Yes, companies aren't citizens.
Secondly, petitions are one thing, petitions with a hidden $1billion folded up in the middle is a bribe.
Bribes definitely should be illegal.
If I were to call up my senator, I should get the same 'attention' as Elon Musk would get if he were donating a Hospital to their hometown.
Secondly, petitions are one thing, petitions with a hidden $1billion folded up in the middle is a bribe.
Bribes definitely should be illegal.
If I were to call up my senator, I should get the same 'attention' as Elon Musk would get if he were donating a Hospital to their hometown.
Lobbing in the US at least I’d typically referring to large institutions , not citizens. The elimination of lobbying in the US is most often reference to the Citizens United ruling by the Supreme Court.
We want to ban large institutions from communicating with their elected representative?
Huh? I communicate with people every day without giving them money. We want ban large institutions from paying elected officials. Genuinely unsure if you are trolling or not.
Why wouldn't we?
The elected representatives represent Human citizens not Corporations.
Companies are not people.
The elected representatives represent Human citizens not Corporations.
Companies are not people.
You could compare it to a messaging protocol. If the message is attempting remote code execution you would want to remove the possibility to do so and/or [perhaps] drop the message.
Two things can be bad.
And I would expect many of capitalism's detractors would say that capitalism encourages cronyism.
Personally, I think all governments of all persuasions have proved their ability to line their own pockets, sometimes subtly and sometimes with bare-faced shame.
Many people think the go-to is more laws to try and dictate what is and isn't acceptable but that also doesn't seem to work, just creates more jobs and more money for the lawyers.
I think the old adage, "don't curse the darkness, light a candle" is the best back-stop. If anyone knows a better way, do it and show how it is better, then others will copy it.
Personally, I think all governments of all persuasions have proved their ability to line their own pockets, sometimes subtly and sometimes with bare-faced shame.
Many people think the go-to is more laws to try and dictate what is and isn't acceptable but that also doesn't seem to work, just creates more jobs and more money for the lawyers.
I think the old adage, "don't curse the darkness, light a candle" is the best back-stop. If anyone knows a better way, do it and show how it is better, then others will copy it.
You have to set the punishment high enough to prevent repetition of the offense. The death penalty seems suitable as great harm is done to a huge number of people. One bad move and democracies kill and maim millions.
One certainly can’t just put a bow on blaming cronyism and assume that capitalism without cronyism would just work (which is what the title implies…. And the article hedges but still kind of implies). Capitalism eventually leads to some pretty unbalanced outcomes as the distribution of profit to the factors of production shift, and it’s not clear that those imbalances would stabilize/correct without extreme intervention (e.g., illegal acts, revolution).
We’re seeing a shift to greater distribution for labor, but that’s after a very long period of favoring capital that doesn’t seem so much to be breaking down as giving way just a tiny bit (like a pressure release valve).
In a fully automated farming, manufacturing, and delivery future, it’s hard to see how capitalism alone would allow for the maintenance of a functioning society. Such conditions would heavily favor engineering/design, raw resources, and (most of all) capital over physical labor.
And, of course, any practical regulation will be imperfect and will lead to functional cronyism as a result of imperfect people working to craft evolving and imperfect laws…
We’re seeing a shift to greater distribution for labor, but that’s after a very long period of favoring capital that doesn’t seem so much to be breaking down as giving way just a tiny bit (like a pressure release valve).
In a fully automated farming, manufacturing, and delivery future, it’s hard to see how capitalism alone would allow for the maintenance of a functioning society. Such conditions would heavily favor engineering/design, raw resources, and (most of all) capital over physical labor.
And, of course, any practical regulation will be imperfect and will lead to functional cronyism as a result of imperfect people working to craft evolving and imperfect laws…
Is wealth inequality necessarily bad? Genuine question here.
I assume you are implying that wealth inequality is a motivator that makes people work harder and aim higher.
As with everything else in the universe, it works for some, it doesn't work for others and there are plenty who have almost literally no opportunities for whatever reason.
In western nations we think that most people have basically the same opportunities but if you are from a low-income family, you are likely to have more issues with your family, potentially more emotional and financial dependents. If you have been knocked back too many times, you can lose confidence and not have anyone to encourage you.
I guess in moderation, wage differences can motivate but at the point someone drops too low, they easily get caught in a cycle and then it becomes societies problem.
As with everything else in the universe, it works for some, it doesn't work for others and there are plenty who have almost literally no opportunities for whatever reason.
In western nations we think that most people have basically the same opportunities but if you are from a low-income family, you are likely to have more issues with your family, potentially more emotional and financial dependents. If you have been knocked back too many times, you can lose confidence and not have anyone to encourage you.
I guess in moderation, wage differences can motivate but at the point someone drops too low, they easily get caught in a cycle and then it becomes societies problem.
Like many things in life, wealth inequality is good in moderation. Excessive wealth inequality is very bad, especially if it is due to unfair/rigged situations.
Wouldn't matter one iota, if there was a guarantee on housing, food, clothing, education, and medicine.
Until that becomes part of the social contract - wealth inequality for some is a prison or death sentence or the means by which one is enslaved by their wages.
Until that becomes part of the social contract - wealth inequality for some is a prison or death sentence or the means by which one is enslaved by their wages.
if there was a lottery defined 99% of your life outcomes at birth would that be a bad thing?
if it was possible for an accumulation of wealth within one group to essentially divide humanity in different groups that could never be changed despite skill level compitance or morals of the individuals in each group would that be bad? so someone whose great great granddaddy did something now has power for no reason. and their line of decendands wont be able to spend money as fast as they accumulate it - without even understanding how or why.
wealth accumulation and private serveices (like education and healthcare) kind of make this an inevitability imho.
AFAIK its not one person being paid more than another thats the issue.. its those that are paid because they were born with money and add nothing to society that i think bothers people.
EDIT: a good book -The Ragged Trousered Philanthropists- for considering capitlism and the accumulation of wealth (also shock how relevant it is still 120 years later): https://freeclassicebooks.com/Robert%20Tressell/The%20Ragged...
if it was possible for an accumulation of wealth within one group to essentially divide humanity in different groups that could never be changed despite skill level compitance or morals of the individuals in each group would that be bad? so someone whose great great granddaddy did something now has power for no reason. and their line of decendands wont be able to spend money as fast as they accumulate it - without even understanding how or why.
wealth accumulation and private serveices (like education and healthcare) kind of make this an inevitability imho.
AFAIK its not one person being paid more than another thats the issue.. its those that are paid because they were born with money and add nothing to society that i think bothers people.
EDIT: a good book -The Ragged Trousered Philanthropists- for considering capitlism and the accumulation of wealth (also shock how relevant it is still 120 years later): https://freeclassicebooks.com/Robert%20Tressell/The%20Ragged...
The level of competition is such that you have to complete across multiple lifetimes. You happen to be in a large bucket with a lot of competition you have to be top 1% in that case to even go up to the next level, which includes successfully having children and putting them on a good path to be top 1% as well. Take risks and succeed.
The game is incredibly competitive and challenging and just understanding that is difficult.
The game is incredibly competitive and challenging and just understanding that is difficult.
It's an impossible feat if the competition has a 10 generations head start and is not playing by any rules.
>AFAIK its not one person being paid more than another thats the issue.. its those that are paid because they were born with money and add nothing to society that i think bothers people.
Sure, but how many wealthy people inherited their wealth and contribute nothing? It's actually a tiny fraction. It is quite common for people from better off backgrounds to be more successful, but arguably that's result of the previous generation investing in their kids and benefiting society as a result. Most doctors come from above average wealth families for example, but we want good doctors, right? The solution to that problem is better public education, not taxing the rich into the ground.
I can't imagine anyone here thinks idle trust fund babies are a wonderful benefit to society, there's a good argument for steep inheritance taxes, but equally it's not actually a significant problem in our economy. It's just a hot button topic that upsets people, but it's really a distraction.
Sure, but how many wealthy people inherited their wealth and contribute nothing? It's actually a tiny fraction. It is quite common for people from better off backgrounds to be more successful, but arguably that's result of the previous generation investing in their kids and benefiting society as a result. Most doctors come from above average wealth families for example, but we want good doctors, right? The solution to that problem is better public education, not taxing the rich into the ground.
I can't imagine anyone here thinks idle trust fund babies are a wonderful benefit to society, there's a good argument for steep inheritance taxes, but equally it's not actually a significant problem in our economy. It's just a hot button topic that upsets people, but it's really a distraction.
Sure, sorry, they question was wide open so i gave the most generic and introductory of answers..
I trust fund babies are the extreme on the spectrum but any time your parents wealth is the biggest factor in whether or not you are a success the system is broken.
imho i see many people who had support or investment from their parents doing very well when they are average or below average abilty.
Education is ulimately the absolute most important thing.. a nation (or humanity as a whole) has a limited number of assest: land, infrastructure and people. the people being the most dynamic with the largest value multipliers possible. IMHO its a no brainer that you want to invest in people via education as a top priority as it will in turn multiply up all other investment (and anything that means money has a bigger sway than ability i think is a bit broken).
To be clear i am not looking for the systems to be perfect, thats silly.. but i do prefer for example the idea of private education being illegal to ensure that grades actually mean something (not just how much money was spent on you).
Also as a side note i belive that people who think they are worth many times more than others within their oragnisation dont understand how their value is derived and where it came from.. so while i dont seek for all salaries to be equal, i do think within an org they should all be within a certain range (e.g. highest paid no more than 5 or 10 times lowest paid).
I have made / saved millions of dollars with a few hours work - but it was the existance of the org, the customers and the history that gave me the chance to do such good work more than it was my skill. people who can deliver solutions are actually more common than you think - good requirements and problems ripe for solving are thin on the ground.
I trust fund babies are the extreme on the spectrum but any time your parents wealth is the biggest factor in whether or not you are a success the system is broken.
imho i see many people who had support or investment from their parents doing very well when they are average or below average abilty.
Education is ulimately the absolute most important thing.. a nation (or humanity as a whole) has a limited number of assest: land, infrastructure and people. the people being the most dynamic with the largest value multipliers possible. IMHO its a no brainer that you want to invest in people via education as a top priority as it will in turn multiply up all other investment (and anything that means money has a bigger sway than ability i think is a bit broken).
To be clear i am not looking for the systems to be perfect, thats silly.. but i do prefer for example the idea of private education being illegal to ensure that grades actually mean something (not just how much money was spent on you).
Also as a side note i belive that people who think they are worth many times more than others within their oragnisation dont understand how their value is derived and where it came from.. so while i dont seek for all salaries to be equal, i do think within an org they should all be within a certain range (e.g. highest paid no more than 5 or 10 times lowest paid).
I have made / saved millions of dollars with a few hours work - but it was the existance of the org, the customers and the history that gave me the chance to do such good work more than it was my skill. people who can deliver solutions are actually more common than you think - good requirements and problems ripe for solving are thin on the ground.
The issue isn’t the number of people who are inheriting massive sums of wealth or what not - the issue is what people with lots of wealth end up doing (solely improving their own lives) and how that wealth could be used otherwise. (improving the lives of all)
I’m actually struggling to think of how someone could use wealth to solely improve their own life. If they invest it in a company, that investment creates jobs and pays wages, buys equipment and services that people were employed to provide. Even if they spend it on luxuries and entertainment, somebody had to make the luxuries, or provide the entertainment and they benefit.
Clearly productive investment is better, that last point is a bit tongue in cheek, but there’s at least some truth to it. The least productive use I could think of would be buying bitcoin, which is basically just funding turning electricity into heat.
Clearly productive investment is better, that last point is a bit tongue in cheek, but there’s at least some truth to it. The least productive use I could think of would be buying bitcoin, which is basically just funding turning electricity into heat.
>If they invest it in a company, that investment creates jobs and pays wages
Someone gives up most of their life to make the investor even richer. In exchange they get barely enough to eat and put a roof over their head (in some cases not even that). What a fair deal, praise the investor!
Someone gives up most of their life to make the investor even richer. In exchange they get barely enough to eat and put a roof over their head (in some cases not even that). What a fair deal, praise the investor!
A lot of the time they just don’t spend it and create dynasties. A lot of the wealth goes around and stays within the wealthy circle. Very little of it trickles down.
I mean, honestly, your narrative is very much in line with trickle down economics - which we know doesn’t work…
I mean, honestly, your narrative is very much in line with trickle down economics - which we know doesn’t work…
Wealth inequality is to complex a topic for a good\bad flag. On the one hand it is good because it shows there is a real reward for delivering something people want or need. On the other hand it can be bad when people end up homeless and starving not because the resources don't exist but because they are being horded by the wealthy.
A common argument is that relative levels of wealth don't matter too much.
Does it really matter if there is some Billionaire's if the average person is doing well for themselves ?
It's the average persons absolute amount of wealth going up that matters.
I think the real question is: Is an uneven distribution necessary to drive absolute levels of wealth up more quickly ? What level of wealth inequality produces the most growth ?
It's the average persons absolute amount of wealth going up that matters.
I think the real question is: Is an uneven distribution necessary to drive absolute levels of wealth up more quickly ? What level of wealth inequality produces the most growth ?
If left unchecked, it'll keep increasing until the people are forced to starve or "eat the rich".
No — that relies on the assumption that we're playing a zero sum game, which we're not.
There's nothing stopping wealth inequality from raising at the same time as living standards for the world's poorest do. In fact, it's exactly what's happening right now.
There's nothing stopping wealth inequality from raising at the same time as living standards for the world's poorest do. In fact, it's exactly what's happening right now.
There may be nothing stopping wealth inequality from rising alongside living standards for the poorest--but that is not what is happening right now. That trend ended in the US during the 1980s, and it is no longer true that "the rich are getting richer while the poor are also getting richer."
On a global scale, it may be possible to show that the world's poorest are improving. I hope so! But when people talk about income inequality, they're generally referring to national economies, where living standards for the poorest have been declining as the number of billionaires skyrockets.
On a global scale, it may be possible to show that the world's poorest are improving. I hope so! But when people talk about income inequality, they're generally referring to national economies, where living standards for the poorest have been declining as the number of billionaires skyrockets.
I wasn't talking about US, and that's exactly the point: global poorest are rapidly improving. And the only reason why a national economy like US is seeing income inequality is exactly because in reality, it's not a "national economy". It's part of the global economy, and in particular it's the part where the richest people from all around the globe end up.
The way I see it, it's not about the wealth itself, but the disproportionate influence in politics that it can yield. The wider the divide gets, the less democratic the country gets. Hypothetically.
It's good for some, bad for a lot.
It's inefficient. If capital becomes too concentrated, it won't be used as effectively if distributed more. There's probably a balance, but under capitalism wealth inequality tends to increase, if left unchecked.
Commerce, capitalism, etc. nothing works under extreme wealth inequality, prices just don't matter then. When someone has too much wealth compared to the others, it doens't even make sense to trade when the rest can only sway your wealth so little.
So when arguing about inequality, we're actually arguing just how much inequality exactly the system can work with.
So when arguing about inequality, we're actually arguing just how much inequality exactly the system can work with.
OK so... the "no true scotsman" game between warring ideologies is what it is. Marx more or less invents "capitalism" in his critique of it. Pro capitalists then came in with their own definitions of capitalism. Later anti-communists insist(ed) that socialism=stalin, and capitalism means liberalism. Whatever. Capitalism means different things. I'm not going to unknot that mess.
But... I will say that etymologically (ie in the early rhetoric), the word "capitalism" meant "regime where capitalists rule." Monarchy = monarchs rule; democracy means the people rule, etc. IE, the old banana republics would have represented near perfect capitalism.
In any case, I don't see why "Academy of Management Perspectives" decided to bring big-c "Capitalism" into it. What part of capitalism are they examining/exonerating? Defining capitalism simply as "private ownership & the existence of markets" is silly. This exists in many times and places that you couldn't credibly call capitalism.
Considering the context (Macedonia?) I think what is meant by "capitalism" is economic policies & changes of the last 30 years. Washington Consensus monetary policies, international/american compatible corporate/contracts law and such.
But... I will say that etymologically (ie in the early rhetoric), the word "capitalism" meant "regime where capitalists rule." Monarchy = monarchs rule; democracy means the people rule, etc. IE, the old banana republics would have represented near perfect capitalism.
In any case, I don't see why "Academy of Management Perspectives" decided to bring big-c "Capitalism" into it. What part of capitalism are they examining/exonerating? Defining capitalism simply as "private ownership & the existence of markets" is silly. This exists in many times and places that you couldn't credibly call capitalism.
Considering the context (Macedonia?) I think what is meant by "capitalism" is economic policies & changes of the last 30 years. Washington Consensus monetary policies, international/american compatible corporate/contracts law and such.
I've also long been perturbed by the definition of capitalism largely focusing on markets, private property, and even entrepreneurship. Since those are like, as old as human civilization probably.
Capitalism is at heart about none of those things. The most important component of it is the idea that the return to capital should be larger than the return to labor or ideas. That is, given that all human enterprise of any type generally requires capital, labor and ideas, capitalism is the name we give to a system in which the profits from that enterprise go primarily to whoever provided the capital.
There is always a justification offered for this, which is that the losses go to capital also (i.e. investing capital in some enterprise is more risky than investing labor or ideas). There are numerous, excellent refutations to this claim.
There is always a justification offered for this, which is that the losses go to capital also (i.e. investing capital in some enterprise is more risky than investing labor or ideas). There are numerous, excellent refutations to this claim.
Of those, private property - the Marxist definition of it, at least - is mostly new. For anyone not familiar, that definition of "private property" is something like productive assets used by other people for the profit of the owner, and "personal property" is like, your clothes or your TV. It's a little artificial, and fuzzy in some cases (but not that fuzzy, it's a useful way to look at society).
Prior to the industrial revolution, most private property was land and slaves (or serfs, same thing). Land supports only so many people, and land is finite, so both of those have limits on growth. And tools for any given trade were generally cheap enough that anyone of that trade would own their own set.
With the industrial revolution, suddenly the best ways to produce certain goods were wildly more expensive than what any given worker can afford, and even more wildly more productive. So there needed to be a mode of organization besides "every worker owns their own set of tools," and at the same time, factories were the first thing ever to be more valuable than owning land. So that's why "who owns private property" suddenly became an important question about 200 years ago, when "who owns land" would've been the entire discussion for most of human history.
Prior to the industrial revolution, most private property was land and slaves (or serfs, same thing). Land supports only so many people, and land is finite, so both of those have limits on growth. And tools for any given trade were generally cheap enough that anyone of that trade would own their own set.
With the industrial revolution, suddenly the best ways to produce certain goods were wildly more expensive than what any given worker can afford, and even more wildly more productive. So there needed to be a mode of organization besides "every worker owns their own set of tools," and at the same time, factories were the first thing ever to be more valuable than owning land. So that's why "who owns private property" suddenly became an important question about 200 years ago, when "who owns land" would've been the entire discussion for most of human history.
> Of those, private property - the Marxist definition of it, at least - is mostly new.
It is newly independently significant, not new.
> Prior to the industrial revolution, most private property was land and slaves
No, “private property” in the Marxist sense excludes both land and slaves, but most private property was generally held in the same hands that held land and, if not actual slaves in name, power over subject people equivalent to that of government (and often recognized as governmental authority) as a personal (though often not freely transferrable) property right.
It is newly independently significant, not new.
> Prior to the industrial revolution, most private property was land and slaves
No, “private property” in the Marxist sense excludes both land and slaves, but most private property was generally held in the same hands that held land and, if not actual slaves in name, power over subject people equivalent to that of government (and often recognized as governmental authority) as a personal (though often not freely transferrable) property right.
Why does the idea that capitalism has co-existed with civilization perturb you? Not criticizing, just honestly curious.
(I'm the GP, not P)
.. It perturbs me because it's usually a (imo) dirty rhetorical trick. The argument never really sticks to a "just markets & property" definition of capitalism. The way it usually works is: (step 1) define capitalism in a way that applies to most societies at most times; (step 2) proceed with the rest of the argument with a much more specific definition.
In this case, what the paper actually means by capitalism isn't just "Markets & Property," even though they do define things this way. What they actually mean by capitalism is privatisation and other major policies adopted post Yugoslav and Soviet dissolution. None of the paper makes sense otherwise.
If we're discussing history (the original context for the term "capitalism") the uber-broad definition doesn't work either. Capitalism has something to do with the industrial era, the ascendancy of merchants over medieval aristocracies & such. No one actually sticks to a definition of capitalism where the early stock markets of Amsterdam & London are not more capitalistic than feudal systems or whatnot.
It's just disingenuous, basically. If that's the definition of capitalism, there's not much to discuss. Most systems are capitalism. It's also ahistorical, since it ignore most usages of the term.
.. It perturbs me because it's usually a (imo) dirty rhetorical trick. The argument never really sticks to a "just markets & property" definition of capitalism. The way it usually works is: (step 1) define capitalism in a way that applies to most societies at most times; (step 2) proceed with the rest of the argument with a much more specific definition.
In this case, what the paper actually means by capitalism isn't just "Markets & Property," even though they do define things this way. What they actually mean by capitalism is privatisation and other major policies adopted post Yugoslav and Soviet dissolution. None of the paper makes sense otherwise.
If we're discussing history (the original context for the term "capitalism") the uber-broad definition doesn't work either. Capitalism has something to do with the industrial era, the ascendancy of merchants over medieval aristocracies & such. No one actually sticks to a definition of capitalism where the early stock markets of Amsterdam & London are not more capitalistic than feudal systems or whatnot.
It's just disingenuous, basically. If that's the definition of capitalism, there's not much to discuss. Most systems are capitalism. It's also ahistorical, since it ignore most usages of the term.
The dictionary definition is pretty straightforward:
"An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state." But wasn't that true in many ancient civilizations? Haven't individual merchants and property owners been around for a long time?
I think the significance of industrialization for capitalism was that it marked the first time that an individual could rapidly amass a large fortune within their own lifetime. Prior to that era, you had to be affiliated with the government in some way, able to raise taxes from a large number of subjects, to pull in that kind of money so quickly. The gap between the royals and the serfs began to fill with a middle class. Once capital became disentangled from government, people started talking about it more as an independent entity. It wasn't so much that capitalism emerged as phenomenon in the 18th century so much as it emerged into the public consciousness then.
"An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state." But wasn't that true in many ancient civilizations? Haven't individual merchants and property owners been around for a long time?
I think the significance of industrialization for capitalism was that it marked the first time that an individual could rapidly amass a large fortune within their own lifetime. Prior to that era, you had to be affiliated with the government in some way, able to raise taxes from a large number of subjects, to pull in that kind of money so quickly. The gap between the royals and the serfs began to fill with a middle class. Once capital became disentangled from government, people started talking about it more as an independent entity. It wasn't so much that capitalism emerged as phenomenon in the 18th century so much as it emerged into the public consciousness then.
[deleted]
Not what I said at all lol
It looks like what you said:
>I've also long been perturbed by the definition of capitalism largely focusing on markets, private property, and even entrepreneurship. Since those are like, as old as human civilization probably.
It seems like you want another definition of capitalism that would reflect a more recent development of it. Again, I'm not criticizing at all, just wondering what the perturbing aspect is.
>I've also long been perturbed by the definition of capitalism largely focusing on markets, private property, and even entrepreneurship. Since those are like, as old as human civilization probably.
It seems like you want another definition of capitalism that would reflect a more recent development of it. Again, I'm not criticizing at all, just wondering what the perturbing aspect is.
Human civilization goes back further than the 18th century jfyi
Of course. How is that related to the point you're trying to make?
Thanks. I guess that goes along with the discussion in the thread above about just when capitalism emerged. I would argue that it was essentially there at the beginning of private property, but that it was overshadowed by government until the 18th century, when it became relevant to talk about capital apart from government because it was now capable of creating change in society at a scale formerly only associated with the state.
The point being the things I listed are pre-capitalist sociological and economic structures.
Capitalism, as the term has been most over 200 years of its existence, refers to something that emerges in the industrial era.
> "And maybe in places like India or China, and other parts of the developing world, they would say, ‘capitalist industries are causing environmental harm and inadequate healthcare"
I don't think that's limited to "places like India or China".
I don't think that's limited to "places like India or China".
The author makes an important distinction between state enabled cronyism and market activities. Comments here seem to be missing the point. Regulation is the pretense which enables cronyism.
I enjoyed his appearance on the "Economics for entrepreneurs" podcast.
I enjoyed his appearance on the "Economics for entrepreneurs" podcast.
>Regulation is the pretense which enables cronyism.
Sort of, if you narrowly define cronyism as government favoritism. But it would be more accurate to say that capitalism itself encourages cronyism---in the absence of regulation, there is no need to rope in government officials and so the cronyism stays in the private sector. But it is no less cronyism. The article misses the real problem, which is that the over-concentration of capital that develops naturally in unregulated capitalism starves the general population of economic opportunities that they would otherwise have if the capital were more decentralized. It's also corrosive to democracy, which depends on the assumption that people are more or less equally empowered politically, at least within a few orders of magnitude.
Sort of, if you narrowly define cronyism as government favoritism. But it would be more accurate to say that capitalism itself encourages cronyism---in the absence of regulation, there is no need to rope in government officials and so the cronyism stays in the private sector. But it is no less cronyism. The article misses the real problem, which is that the over-concentration of capital that develops naturally in unregulated capitalism starves the general population of economic opportunities that they would otherwise have if the capital were more decentralized. It's also corrosive to democracy, which depends on the assumption that people are more or less equally empowered politically, at least within a few orders of magnitude.
>the over-concentration of capital that develops naturally in unregulated capitalism...
In such an unregulated capitalism system the producer would only obtain wealth by freely trading. It is the state intervention which creates the conditions for the centralization of wealth.
We're living in a time where interest rates (set by appointed technocrats) don't keep pace with the rate of inflation. Inflation as it is originally defined means literally to inflate the money supply. Again, the money supply is determined by unelected appointees. These same experts form a "plunge protection team" determined to protect financial markets, at the expense of all other participants in the economy. So yeah, we're seeing a large amount of wealth inequality currently.
We could turn to the historical cases as well. Railroad monopolies and government bailouts of these essential industries owned and controlled by blue blood families.
What I have a hard time turning to and finding empirical evidence for, would be this mythical unregulated capitialist economy which produced so much of the the inequality critics of laissez-faire capitalism ceaselessly cite.
In such an unregulated capitalism system the producer would only obtain wealth by freely trading. It is the state intervention which creates the conditions for the centralization of wealth.
We're living in a time where interest rates (set by appointed technocrats) don't keep pace with the rate of inflation. Inflation as it is originally defined means literally to inflate the money supply. Again, the money supply is determined by unelected appointees. These same experts form a "plunge protection team" determined to protect financial markets, at the expense of all other participants in the economy. So yeah, we're seeing a large amount of wealth inequality currently.
We could turn to the historical cases as well. Railroad monopolies and government bailouts of these essential industries owned and controlled by blue blood families.
What I have a hard time turning to and finding empirical evidence for, would be this mythical unregulated capitialist economy which produced so much of the the inequality critics of laissez-faire capitalism ceaselessly cite.
>In such an unregulated capitalism system the producer would only obtain wealth by freely trading. It is the state intervention which creates the conditions for the centralization of wealth.
No. You can concentrate massive amounts of wealth simply by freely trading. As you get wealthier, it gets easier to accumulate additional wealth. This is the essential feedback loop of capitalism. It's a feature, not a bug, and it is readily modeled (see, eg, https://www.wealthinequality.info/). But it causes significant social problems if left unchecked, as we are seeing today.
No. You can concentrate massive amounts of wealth simply by freely trading. As you get wealthier, it gets easier to accumulate additional wealth. This is the essential feedback loop of capitalism. It's a feature, not a bug, and it is readily modeled (see, eg, https://www.wealthinequality.info/). But it causes significant social problems if left unchecked, as we are seeing today.
Not only is modeling ridiculous in the context of human action, the model itself is loaded. It only allows individuals to receive payments which are a fraction of their existing balance. Therefore, under this model individuals wouldn't be able to receive a paycheck greater than their bank balance. So much for the rhetoric of living "paycheck to paycheck".
>1. All people (or, in model-speak, “agents”) start with equal wealth. 2. For each transaction, choose two agents at random. 3. Calculate a percentage of the poorer agent’s wealth. This percentage will be the amount exchanged. (If they have the same wealth, it doesn’t matter which you choose. This will be the amount exchanged.) 4. Randomly choose which of the two agents will receive the exchanged wealth and which will lose it.
While inequality is a symptom of a dysfunctional financial system, equality isn't a good unto itself. Systems which institutionalize inequality through cronyism are the problem. Not surprisingly, these half-baked economic models are used to double down on interventionism, resulting in further cronyism.
>1. All people (or, in model-speak, “agents”) start with equal wealth. 2. For each transaction, choose two agents at random. 3. Calculate a percentage of the poorer agent’s wealth. This percentage will be the amount exchanged. (If they have the same wealth, it doesn’t matter which you choose. This will be the amount exchanged.) 4. Randomly choose which of the two agents will receive the exchanged wealth and which will lose it.
While inequality is a symptom of a dysfunctional financial system, equality isn't a good unto itself. Systems which institutionalize inequality through cronyism are the problem. Not surprisingly, these half-baked economic models are used to double down on interventionism, resulting in further cronyism.
Why not blame both?
It's a category error to blame ideas for anything. Ideas don't have agency, thus they cannot have guilt. Giving human attributes like intent and blame to ideas is reviving the old gods and giving them new names.
Ideas don't have people, people have ideas. Every human action is carried out by a person. No action has ever been carried out by an idea.
Ideas don't have people, people have ideas. Every human action is carried out by a person. No action has ever been carried out by an idea.
That’s the point of the article…
did you read it?
Chesterton said that “too much capitalism does not mean too many capitalists, but too few capitalists”
I think this concept applies to cronyism as well: we will always have cronyism and corruption and no system we can dream up will eliminate it. Therefore we should distribute the cronyism as much as is practical to minimize and localize the damage it can do. Bad behavior is less likely when you live within driving distance of the person you are inflicting it on.
In practice this means many more small, relatively independent political units. An idea for which there is nearly zero support amongst the current elites who are nearly unanimous in wanting more centralization, which makes sense when considering their interests. I do hear occasionally about a national divorce, which would be a good start.
I think this concept applies to cronyism as well: we will always have cronyism and corruption and no system we can dream up will eliminate it. Therefore we should distribute the cronyism as much as is practical to minimize and localize the damage it can do. Bad behavior is less likely when you live within driving distance of the person you are inflicting it on.
In practice this means many more small, relatively independent political units. An idea for which there is nearly zero support amongst the current elites who are nearly unanimous in wanting more centralization, which makes sense when considering their interests. I do hear occasionally about a national divorce, which would be a good start.
It seems like cronyism can manifest in any system just as well as capitalism. Collectivist-isms are just as susceptible, and are perhaps more susceptible given their inherent dependence on the state's management of capital and resources. What do you think?
Blame Expectations, Not Reality
> capitalism increases inequality, it favors the wealthy at the expense of the poor
Does pure capitalism without cronyism give everybody an equal chance though? What if cronyism is the very product of current capitalism?
Finger swap is useless. To actually fix a problem, we need to find the root cause and fix the entire tree of problems one by one.
Does pure capitalism without cronyism give everybody an equal chance though? What if cronyism is the very product of current capitalism?
Finger swap is useless. To actually fix a problem, we need to find the root cause and fix the entire tree of problems one by one.
Insight: There is a single source of all harmful side-effects.
Insight: It's not capitalism. It's something else.
Perhaps the actual problem for the author is education because any moderate amount of reading comprehension coupled with a little skepticism should keep "insights" like this from spreading.
Insight: It's not capitalism. It's something else.
Perhaps the actual problem for the author is education because any moderate amount of reading comprehension coupled with a little skepticism should keep "insights" like this from spreading.
Not a shocker that corruption ruins things. I guess then the question is how you can design a broadly distributed system that removes the incentives for corruption and minimizes its impact. My guess is that such a system won't be found in capitalism
IIRC "the dictators handbook" mentions that the more people in a power position, the harder to corrupt, because it becomes more expensive. Of course this brings a slower process, so it's like a trade-off.
Link: https://www.mr-sustainability.com/stories/2020/dictators-han....
Link: https://www.mr-sustainability.com/stories/2020/dictators-han....
A great book, but I would love to see additional studies really breaking it down. My gut feeling is that this effect curves. At a certain size of selectorate you switch from direct influence, with linear costs, to indirect methods of influence, with much better scaling properties (eg. Uber and California Proposition 22).
While it becomes expensive to outright buy people, it also becomes prohibitively expensive to educate, and an ability to outspend with emotional appeals becomes more important than having a cogent argument.
While it becomes expensive to outright buy people, it also becomes prohibitively expensive to educate, and an ability to outspend with emotional appeals becomes more important than having a cogent argument.
Government and NGO can also be corrupted too, just look at the recent doctors without borders sex for food scandals.
Right, it's not something unique to corporations. It's a consequence of concentrated power
Corruption can’t be decoupled from any human organizational system, though. The system needs to be designed in a way to take corruption into account and minimize it.
In unregulated capitalism, corruption provides a huge competitive advantage, so controls must be put in place to counteract that. Typically that’s done with government intervention.
The idea that we can “blame cronyism, not capitalism”, is a red herring. Cronyism and corruption is something capitalism, as a system, must be able to deal with, or else capitalism is a poor system.
It’s like saying “don’t blame the engine, blame friction forces” for why an engine has poor qualities. Friction is a given and will always exist, it’s the poor engineering design of the engine that’s the problem. The design didn’t mitigate the friction appropriately.
In unregulated capitalism, corruption provides a huge competitive advantage, so controls must be put in place to counteract that. Typically that’s done with government intervention.
The idea that we can “blame cronyism, not capitalism”, is a red herring. Cronyism and corruption is something capitalism, as a system, must be able to deal with, or else capitalism is a poor system.
It’s like saying “don’t blame the engine, blame friction forces” for why an engine has poor qualities. Friction is a given and will always exist, it’s the poor engineering design of the engine that’s the problem. The design didn’t mitigate the friction appropriately.
Unregulated free trade doesnt reward corruption, it's the opposite. It rewards value to the consumer. Goverment intervention is what rewards corruption when it eventually becomes captured and now insiders control the levers of the economy forcing themselves on the end user. You need to invert your thinking, we need more freedom and less interventions by middle management. Market feedback needs to be emergent from the bottom up.
I’d argue that absent any regulations, there’s no such thing as corruption, just like without laws, nothing is criminal!
But is that the world we want?
The fact of the matter is that corruption, like crime, will always exist, so the system within which the corruption exists better be able to handle it, or it’s a poor system.
The author’s argument is basically the opposite - “the system is fine, it’s the pesky non-idealities that are the problem!”
My point is that this is a totally useless take. It’s like trying to build a rocket and wondering why it collapses on the launchpad because you hand waved away all the non-idealities: “oh, the rocket design was fine, it was those pesky non-idealities that we’re the problem!”
But is that the world we want?
The fact of the matter is that corruption, like crime, will always exist, so the system within which the corruption exists better be able to handle it, or it’s a poor system.
The author’s argument is basically the opposite - “the system is fine, it’s the pesky non-idealities that are the problem!”
My point is that this is a totally useless take. It’s like trying to build a rocket and wondering why it collapses on the launchpad because you hand waved away all the non-idealities: “oh, the rocket design was fine, it was those pesky non-idealities that we’re the problem!”
It will be found in open source networks, and possibly will come into being through government funding.
Since proof of work is inefficient in general and impossible for humans, society can only function with leaders. The problem with anti-capitalist ideology is that it without a healthy private sector, people who are uninterested in public service seek leadership positions there because those are the positions with most "profit." This is why every attempt at socialism has been a complete failure.
> such a system won't be found in capitalism
It won't be found even harder in communism, where the cronyism is baked into the system of governance.
It won't be found even harder in communism, where the cronyism is baked into the system of governance.
> My guess is that such a system won't be found in capitalism
It won't be found in communism or socialism, either.
It won't be found in communism or socialism, either.
capitalism seems like a more likely home for broadly distributed systems than government systems which are, by their nature, centralized
Capitalism quite clearly requires strong regulation. At least, any sort of positive capitalism that doesn't immediately succumb to monopolies, cartels and corruption.
The problem is that the loudest voices arguing for capitalism, also tend to argue against regulation, accountability, and that sort of thing.
The problem is that the loudest voices arguing for capitalism, also tend to argue against regulation, accountability, and that sort of thing.
They argue against regulations because:
- Regulations are often used as a tool of corruption and cronyism, e.g. regulation of housing construction entrenching landowner power.
- Regulations can block legitimate progress, e.g. the private antigen tests that were blocked throughout 2020.
- Regulations create complexity which acts as both a barrier to entry which creates monopolies, and as a hidden tax.
- Regulations are often theatre.
- Bad regulations are sticky; they don't sunset.
That's why I favor less regulations overall. But I don't favor no regulations. I still want regulations (or just "laws") that stop pollution, deceptive marketing, and so on.
- Regulations are often used as a tool of corruption and cronyism, e.g. regulation of housing construction entrenching landowner power.
- Regulations can block legitimate progress, e.g. the private antigen tests that were blocked throughout 2020.
- Regulations create complexity which acts as both a barrier to entry which creates monopolies, and as a hidden tax.
- Regulations are often theatre.
- Bad regulations are sticky; they don't sunset.
That's why I favor less regulations overall. But I don't favor no regulations. I still want regulations (or just "laws") that stop pollution, deceptive marketing, and so on.
> I still want regulations (or just "laws") that stop pollution, deceptive marketing, and so on.
Not allowing pollution isn't regulation, it's enforcing property rights.
Not allowing deceptive marketing (fraudulent contracts) isn't regulation, it's enforcing property rights.
If you can't see the difference between regulations and property rights then yeah, opposition to regulations will seem a bit bizarre.
Not allowing pollution isn't regulation, it's enforcing property rights.
Not allowing deceptive marketing (fraudulent contracts) isn't regulation, it's enforcing property rights.
If you can't see the difference between regulations and property rights then yeah, opposition to regulations will seem a bit bizarre.
Deciding that these are property rights issues and enforcing them as such is itself a form of regulation. Property rights themselves are a basic form of regulation. Expanding property rights to more areas is regulation. Everything that regulate things in a way that protects and enforces people's rights, ensures people aren't being exploited, robbed, misled, etc, is a form of regulation.
> Property rights themselves are a basic form of regulation.
In a general sense, perhaps, but not in the sense that people mean when they say that they're opposed to regulation. Context matters. In this conversation, "regulation" means a deviation from natural property rights, whether that involves directly infringing them, e.g. by attaching extra rules or penalties beyond simply respecting the equal rights of others, or granting artificial "property rights" which will necessarily infringe on others' natural ones.
> Expanding property rights to more areas is regulation.
"Expanding" the concept of property rights to areas where they don't naturally apply (like copyrights and patents) is definitely regulation, in the negative sense. But at that point you're not really talking about property rights any more.
In a general sense, perhaps, but not in the sense that people mean when they say that they're opposed to regulation. Context matters. In this conversation, "regulation" means a deviation from natural property rights, whether that involves directly infringing them, e.g. by attaching extra rules or penalties beyond simply respecting the equal rights of others, or granting artificial "property rights" which will necessarily infringe on others' natural ones.
> Expanding property rights to more areas is regulation.
"Expanding" the concept of property rights to areas where they don't naturally apply (like copyrights and patents) is definitely regulation, in the negative sense. But at that point you're not really talking about property rights any more.
Exactly. You don't want regulations merely for regulations' sake. Regulations need to be governed by a simple, transparent set of values, and enforce only those, but enforce them well and consistently, and keep the regulator accountable for how those values and regulations are enforced.
Blindly trusting regulators to know what's best is just as bad as blindly trusting corporations to know what's best.
Blindly trusting regulators to know what's best is just as bad as blindly trusting corporations to know what's best.
Regulation implies regulators, and regulators can become a bottleneck for power. They can demand bribes and favors in exchange for being allowed to operate and they can use their power to selectively eliminate political opponents sources of power.
Read "The Path to Power", LBJ biography. They describe this process plainly and how he continuously used his across his entire career in this way. Its very enlightening.
Read "The Path to Power", LBJ biography. They describe this process plainly and how he continuously used his across his entire career in this way. Its very enlightening.
Of course the regulators themselves also need to be regulated and held accountable. It's either that or prevent all concentrations of power, including corporations.
Regulations is what largely enables cronyism.
The world isn't black and white. There is good and bad regulation. Effective and ineffective regulation. For example car safety regulations are pretty effective. Cars are more safe now than they ever have been and its rare for there to be a problem with the safety systems in cars. Financial market regulation has been mostly a disaster and is in large part due to capture by the industry and serious conflict of interests at all levels of government.
Who regulates the regulator ?
If it is the government then it goes back to the people being aware of their interests and not allowing themselves to be manipulated. Which is never going to be the case.
If it is the government then it goes back to the people being aware of their interests and not allowing themselves to be manipulated. Which is never going to be the case.
The answer to this question has always been ideology. Establishing a deep an sincere belief in the purpose of an undertaking on the part of its functionaries is the most durable way to run a community of any sort.
Successful anarchist programs require some degree of ideological commitment to a greater cause. Switzerland is probably the most decentralized society on earth and you will notice the incredibly tight sense of right/wrong throughout Swiss society.
The people at the top are deeply cynical of ideology. They fill the ranks of middle management with true believers and play their own games.
In theory the regulators, as part of the government, serve the will of the people. But the state under capitalism serves no one but the massive corporations which these regulators are meant to govern. So we end up with fossil fuel guys running the EPA and Verizon lawyers running the FCC.
There is no one to regulate the regulators because the state in its entirety is isolated from accountability to the public.
There is no one to regulate the regulators because the state in its entirety is isolated from accountability to the public.
Capitalism requires strong regulation but communism requires top down control.
Whats the cause of amazon workers reportedly having to pee in bottles? Is that the government?
Capitalism is just evolution without physical war. It has the same beauty and horror as a lion eating a gazelle alive.
Capitalism is just evolution without physical war. It has the same beauty and horror as a lion eating a gazelle alive.
Whats the cause of amazon workers reportedly having to pee in bottles? Is that the government?
Yes, as a matter of fact, it is! Or rather, lack of effective government. An effective government would not only have laws to protect the workers, but also have a regulatory zeal to enforce such laws in ways they bite the employer, who obviously isn't treating its workers well enough.
Yes, as a matter of fact, it is! Or rather, lack of effective government. An effective government would not only have laws to protect the workers, but also have a regulatory zeal to enforce such laws in ways they bite the employer, who obviously isn't treating its workers well enough.
What is the cause of the worker who needs to pay the boss a $1,000 bribe to get a lucrative job in a communist system? Is that the government?
I mean sure, you could blame cronyism for any ideology or systems because these ideologies were always presented, as the name implies, in an ideal situation. What is always important is the ability of that system to be fault tolerant in a not so ideal world, which is where capitalism fails and that is squarely on capitalism itself.
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Why not blame human nature's shortcomings, instead of any *ism... Capitalism, Communism, Socialism and what not.
It's not very constructive, is it? "It's human nature to be exploited"
Then again, not a lot seem to happen when pointing at short-comings or issues of prioritizing profit and growth above all else in society either.
Then again, not a lot seem to happen when pointing at short-comings or issues of prioritizing profit and growth above all else in society either.
This view point was the basis of the US Constitution. Do not trust any central power. Pit them against each other to limit what they can do. Enumerate the rights of the people that government can not infringe.
The whole thing is based on the assumption that human nature tends to lead to exploitation of others, and build in safeguards against it.
The whole thing is based on the assumption that human nature tends to lead to exploitation of others, and build in safeguards against it.
Other way around... "It's human nature to exploit". Be it the nature or other species or other humans.
Of course not everyone is exploiting at the same level... Corporates and Governments are the apex predators in this exploitation chain.
It is very constructive because it points to the actual root of the problem so we can begin to solve it.
Laws and regulation that prevent cronyism are the solution.
Laws and regulation that prevent cronyism are the solution.
Except humans, business and politics are far too complex to encapsulate in laws, at least in their current format.
Look at a "simple" case in the news today. Several men who were abused in the 1970s have lost their case against Manchester City Football club who they say were responsible for the "scout" who abused them. If it was really simple, there would be no case. However, the Judge rules that at the time of the abuse, the man (who is currently in prison) was not officially a member of Man City staff so they are not liable vicariously for his actions.
I think something that is lacking in the UK at least, is more like a Charter for Society. What is it that we accept and don't accept. It would be much easier in Court if a ruling is made not just on the letter of a law that might not have thought of the specific scenario, not on common law of something that was close enough to this case but on whether it violates the charter.
Don't know, just a thought.
Look at a "simple" case in the news today. Several men who were abused in the 1970s have lost their case against Manchester City Football club who they say were responsible for the "scout" who abused them. If it was really simple, there would be no case. However, the Judge rules that at the time of the abuse, the man (who is currently in prison) was not officially a member of Man City staff so they are not liable vicariously for his actions.
I think something that is lacking in the UK at least, is more like a Charter for Society. What is it that we accept and don't accept. It would be much easier in Court if a ruling is made not just on the letter of a law that might not have thought of the specific scenario, not on common law of something that was close enough to this case but on whether it violates the charter.
Don't know, just a thought.
> It would be much easier in Court if a ruling is made not just on the letter of a law that might not have thought of the specific scenario, not on common law of something that was close enough to this case but on whether it violates the charter.
What do you mean by Charter for Society? A Constitution?
Doesn't this just devolve to the same problem? If the law doesn't address a specific scenario, what makes you think the charter will?
What do you mean by Charter for Society? A Constitution?
Doesn't this just devolve to the same problem? If the law doesn't address a specific scenario, what makes you think the charter will?
I'm just thinking there are times where there is a violent assault, for example, perhaps the person has previous and is basically a horrible person who was winding someone up or just doing stuff that most people would be disgusted with. Only some of that is easy to capture in law.
If a constitution/charter had something like "Our society does not accept people who are unecessarily aggressive or quick to get violent", then the perpetrator doesn't get away with it because they didn't actually hurt someone or reach the burden for proving "fear of violence" needed for assault.
Don't know. Probably not realistic but at least then a society could know how infrastructure, government and public services are directed; people who want to immigrate can see clearly that e.g. "We respect the rule of law and property" so that they don't think it is OK to not pay tax, to not insure their car etc; and also for people who are a pain because they are just selfish and do things that rub people up the wrong way, "we are mindful that the community is more important than the individual and the community can decide that they don't like what you are doing even if it isn't illegal"
If a constitution/charter had something like "Our society does not accept people who are unecessarily aggressive or quick to get violent", then the perpetrator doesn't get away with it because they didn't actually hurt someone or reach the burden for proving "fear of violence" needed for assault.
Don't know. Probably not realistic but at least then a society could know how infrastructure, government and public services are directed; people who want to immigrate can see clearly that e.g. "We respect the rule of law and property" so that they don't think it is OK to not pay tax, to not insure their car etc; and also for people who are a pain because they are just selfish and do things that rub people up the wrong way, "we are mindful that the community is more important than the individual and the community can decide that they don't like what you are doing even if it isn't illegal"
> Only some of that is easy to capture in law.
I think these kinds of things are captured in law all the time. Giving judges recommended sentencing guidelines but with leeway for discretion in a specific case. Distinguishing between assault and aggravated assault and battery, murder and manslaughter, etc.
I think these kinds of things are captured in law all the time. Giving judges recommended sentencing guidelines but with leeway for discretion in a specific case. Distinguishing between assault and aggravated assault and battery, murder and manslaughter, etc.
Cronyism is the logical conclusion of capitalism.
And every other system with regularors..
Could you elaborate how? Is this specific to capitalism? or is cronyism the logical conclusion of any societal system that lasts for a while? For example, and just to choose an example that is obviously not capitalist, would you say cronyism wouldn't happen in a communist society? As far as I understand, it very much happened in the URSS. I'm not bashing on communism, just trying to understand your statement.
Capitalism rewards owning capital heavily, so it naturally trends towards wealth concentrating. The argument against this is to regulate it, but overtime, you'll always end up trending towards capital becoming more powerful then the regulators. You'll always have Capital just buying the regulators, basically. You can have "resets" (like the Great Depression and WWII) that maybe fix this a little bit temporarily, but it'll end up going back to cronyism again as power (i.e. Capital) starts concentrating again.
Cronyism can exist in an economic system where there are positions of power. However, if you were to limit position of power, I believe you could make an economic system more resilient to cronyism. Obviously systems like the USSR had positions of extreme power so it was very prone to cronyism.
Cronyism can exist in an economic system where there are positions of power. However, if you were to limit position of power, I believe you could make an economic system more resilient to cronyism. Obviously systems like the USSR had positions of extreme power so it was very prone to cronyism.
How do you create a society that limits positions of power?
The US Constitution tries to do that by pitting different groups in power against each other, diffusing their power and forcing them to cooperate to achieve anything. And then adding a Bill of Rights specifically limiting the power government has over the individual.
Do you have a better idea?
The US Constitution tries to do that by pitting different groups in power against each other, diffusing their power and forcing them to cooperate to achieve anything. And then adding a Bill of Rights specifically limiting the power government has over the individual.
Do you have a better idea?
The US system isn't too bad, the main problem with it is capitalism. Under capitalism, you can't have a true democracy. The rich can always influence the public (Manufacturing Consent) or outright buy representatives. You have to keep wealth more distributed to avoid this, which means we need a system that doesn't so heavily reward and enable accumulation of wealth. I like many of the ideas of Mutualism [0]. Primarily the emphasis on credit unions, the limits on private property, and worker democracy.
[0] https://en.wikipedia.org/wiki/Mutualism_(economic_theory)
[0] https://en.wikipedia.org/wiki/Mutualism_(economic_theory)
And every other form of government. What's the point?
> Cronyism can plague any economic system, Klein explained, across the spectrum of free-market economies to governmentally controlled environments.
Try reading the article?
Try reading the article?
Yeah, I agree, but I think there probably exists economic systems that are far more resilient to cronyism then capitalism. Whereas I think capitalism will always result in cronyism.
What are those systems? And where is the real world evidence they are more resilient to cronyism?
Such as?
Really anything that tries to democratize or distribute the control of Capital better. I wrote in another comment that I like parts of Mutualism [0]. I think the emphasis on credit unions, the limits to private property, and the emphasis on workplace democracy would help limit wealth from becoming too concentrated while still enabling economic development, arguably even enabling it better then Capitalism.
[0] https://en.wikipedia.org/wiki/Mutualism_(economic_theory)
[0] https://en.wikipedia.org/wiki/Mutualism_(economic_theory)
As someone who lived in a communist system…no, cronyism is how you survive in a communist system. Otherwise you starve.
So you lived in a communist system with cronyism. That doesn’t invalidate OP statement. Cronyism is going to negatively affect all governments.
OP said capitalism.
Market forces are objective, real, external. They eliminate weak competitors, and cronyism weakens companies. So if capitalism is defined by existence of the market forces... than you are wrong. If you define capitalism as market + capital and the your claim is that market in combination of other (than private property) ways of allocating capital would work better... I still disagree.
Capitalism is not "markets", people have had markets at least as long as we've had agriculture. Capitalism is markets in pieces of paper such as government bonds, tulip futures, corporate stock, etc.
Capitalism is a great platform for cronyism because it accumulates huge amounts of wealth in one place. Without capitalism the wages of corruption would be much less.
Capitalism is a great platform for cronyism because it accumulates huge amounts of wealth in one place. Without capitalism the wages of corruption would be much less.
> Capitalism is markets in pieces of paper such as government bonds, tulip futures, corporate stock, etc.
Capitalism is private ownership of (and thus control, and benefit from) the means of production. Of these things you've listed, only corporate stock is—at some remove—a means of production. The stockholder owns part of the corporation which in turn owns capital goods.
Anyone can save and invest and become an owner of capital. The only thing leading to concentration of wealth (under any economic system, really, not just capitalism) is that most people don't care to sacrifice present consumption for a larger future gain. Fortunately there are some who do.
Capitalism is private ownership of (and thus control, and benefit from) the means of production. Of these things you've listed, only corporate stock is—at some remove—a means of production. The stockholder owns part of the corporation which in turn owns capital goods.
Anyone can save and invest and become an owner of capital. The only thing leading to concentration of wealth (under any economic system, really, not just capitalism) is that most people don't care to sacrifice present consumption for a larger future gain. Fortunately there are some who do.
Yes, people have had capitalism since Homo Sapiens emerged. It just became more sophisticated, enabling higher levels of productivity.
Institutions like contract law and constitutionally limited government helped the reign in corruption to some extent. If corruption is to mean deceit, abuse and exploitation, corruption has existed since as long as humans have existed. That is why homicide rates in prehistory were 30%.
Institutions like contract law and constitutionally limited government helped the reign in corruption to some extent. If corruption is to mean deceit, abuse and exploitation, corruption has existed since as long as humans have existed. That is why homicide rates in prehistory were 30%.
One colleague once told me capitalism is the natural state of world and that her dog was capitalist, because it picked up a stick and refused to let it go - and that is why socialism and communism (same thing for her) will never work.
When people consider your ideology "natural state of the world", you know your propaganda succeeded.
When people consider your ideology "natural state of the world", you know your propaganda succeeded.
Cronyism is essential part of Big Government, something that is not necessary for Capitalism but completely necessary for Socialism.
The entire basis of modern public administration (and one of the reasons it can be more bureaucratic than market mechanisms for delivering services) is that it attempts to rigorously exclude cronyism. The reason for civil service tenure, for example, was to stop politicians selling public service jobs to the highest bidder, or handing them over as a quid-pro-quo for favourable decisions. As seen in the late 19th and early 20th Century 'Progressive' movement in the US, for example, the idea was for a government of the highest possible rectitude.
Now, that obviously doesn't happen in all areas all of the time. And we have moved away from that kind of rules-structured ideal over the last forty years or so in pursuit of greater efficiency (which has re-introduced cronyism in the UK to a greater degree, for example - see the present government) but it's grossly over-simplified to say that cronyism is an 'essential' part of big government, when its original foundations were intended to produce a (big) government of laws and not men.
Now, that obviously doesn't happen in all areas all of the time. And we have moved away from that kind of rules-structured ideal over the last forty years or so in pursuit of greater efficiency (which has re-introduced cronyism in the UK to a greater degree, for example - see the present government) but it's grossly over-simplified to say that cronyism is an 'essential' part of big government, when its original foundations were intended to produce a (big) government of laws and not men.
The existence of all these protections against cronyism in the public sector is evidence that it is an inherent problem. If it wasn't, there would be no need for all the protections.
Edit: the problem is kind of moral hazard. Much like a chemical plant or nuclear reactor needs a range of protection systems to prevent the dangerous chemicals from going out of control, public administration needs a range of systems to prevent corruption getting too out of hand.
Edit: the problem is kind of moral hazard. Much like a chemical plant or nuclear reactor needs a range of protection systems to prevent the dangerous chemicals from going out of control, public administration needs a range of systems to prevent corruption getting too out of hand.
Yes indeed (and, even more so, the culture of non-corruption which reformers tried to put in place at the same time). But, like in the chemical plant, it is possible to run a government with minimal levels of corruption and many (better-governed) countries do it.
It's not just a public admin problem, either - corruption and self-dealing are potentially endemic in the private sector, too. The concern has traditionally been higher for the public sector, both because of the potential for abuse of state power and because it is/was seen to be corrosive to public trust and self-government. A private company is more likely to trade off the cost of controls versus the dollar value of the future loss (or the controller is the one running the firm strictly for their own benefit, in which case they're likely to get away with it without intervention by the legal system). And the largest companies have had actual public power greater than the smallest countries for centuries by this point, so the two concerns are not completely disjoint.
It's not just a public admin problem, either - corruption and self-dealing are potentially endemic in the private sector, too. The concern has traditionally been higher for the public sector, both because of the potential for abuse of state power and because it is/was seen to be corrosive to public trust and self-government. A private company is more likely to trade off the cost of controls versus the dollar value of the future loss (or the controller is the one running the firm strictly for their own benefit, in which case they're likely to get away with it without intervention by the legal system). And the largest companies have had actual public power greater than the smallest countries for centuries by this point, so the two concerns are not completely disjoint.
Capitalism without fair competition is not capitalism. There needs to be rules and regulation to have a level field. Huge barriers to entry, monopoly, oligarchy and so on all pervert capitalism. Currently, it's far far away from a good place.
How is capitalism without competition not capitalism? The capitalist is served very well by it, earning huge piles of money.
Competition is a key tenant of capitalism. It doesn't optimize and serve society without it. It holds individual's and corporation's self interest to maximize profit in check.
Capitalism serves capitalists, any serving of society is a side effect of same and is certainly not intentional.
That's like saying blame authoritarianism not communism. Communism led to authoritarianism in every country where it was tried. Blaming one means blaming the other indirectly.
Same here.
Same here.
The difference is this: in communism you always end up with authoritarianism, while in capitalism it happens less and less frequently. For this reason you can associate communism with authoritarianism.
The corruption is NOT typical to capitalism, both capitalism and communism have plenty of corruption. As a citizen of a former communist state, I can say that communism has even more corruption in general.
I think this is because capitalism doesn't deny that there is corruption and human beings at their innermost are not fair and just, so the capitalist institutions are designed to work around that. Communism on the other hand, assumes there is "a new man", which is fair, works as hard as they can and takes only what they need. But this is false, and never happens, so you need the state to enforce it, but then the people will still be humans and do what humans do: trade goods, services and influence, but under the table.
The corruption is NOT typical to capitalism, both capitalism and communism have plenty of corruption. As a citizen of a former communist state, I can say that communism has even more corruption in general.
I think this is because capitalism doesn't deny that there is corruption and human beings at their innermost are not fair and just, so the capitalist institutions are designed to work around that. Communism on the other hand, assumes there is "a new man", which is fair, works as hard as they can and takes only what they need. But this is false, and never happens, so you need the state to enforce it, but then the people will still be humans and do what humans do: trade goods, services and influence, but under the table.
What actually happens - you get communism and capitalism and both are equally evil when applied 100%. But you can get make them less concentrated, add less or more regulation and get to some sane compromies. You end up with some kind of social welfare state with mostly free market economy. At that point it doesn't matter where you started off, it's just branding.
> equally evil
That is a very hard to defend statement...mass deportations, famine, misery and all the other staples of communism are not nearly as bad in capitalism. And if capitalist countries do this to each other, it's not capitalism per se to blame, it's other aspects of politics (imperialism, colonialism, Neo-colonialism etc.) that can be separated from capitalism. Whereas communism on its own cannot separate from its worse tenets.
Being that they're not equally evil, IMO the middle ground is better to be closer to capitalism rather than in the middle.
I personally believe in UBI, but I consider myself a liberal right winger. I believe UBI is good because it makes the bureaucracy and the government mostly obsolete except for the places it really matters: infrastructure, military, education etc. The UBI will be more transparent and automatic, people will know they live off other people's money, not "the government". And the government cannot keep robbing Paul to pay Peter with each and every bill. This should over time reduce the amount we spend on social programs, which is in line with what I believe as a liberal that wants less taxes.
That is a very hard to defend statement...mass deportations, famine, misery and all the other staples of communism are not nearly as bad in capitalism. And if capitalist countries do this to each other, it's not capitalism per se to blame, it's other aspects of politics (imperialism, colonialism, Neo-colonialism etc.) that can be separated from capitalism. Whereas communism on its own cannot separate from its worse tenets.
Being that they're not equally evil, IMO the middle ground is better to be closer to capitalism rather than in the middle.
I personally believe in UBI, but I consider myself a liberal right winger. I believe UBI is good because it makes the bureaucracy and the government mostly obsolete except for the places it really matters: infrastructure, military, education etc. The UBI will be more transparent and automatic, people will know they live off other people's money, not "the government". And the government cannot keep robbing Paul to pay Peter with each and every bill. This should over time reduce the amount we spend on social programs, which is in line with what I believe as a liberal that wants less taxes.
Well, if you attribute soviet and chinese atrocities to communism you should also attribute colonial empires atrocities to capitalism. And then it's basically arguing about the estimates.
> And if capitalist countries do this to each other, it's not capitalism per se to blame, it's other aspects of politics (imperialism, colonialism, Neo-colonialism etc.) that can be separated from capitalism
That's just the branding decision I was speaking of. You chose to brand the sane modern version of capitalism - still capitalism, but sane modern version of communism - socialism. That way you get the conclusion you want cause of your political beliefs. I don't really care for branding, but lets be honest - it's not some universal truth, it's just a consequence of your decision of assigning labels to political systems in a particular way.
BTW famines were pretty common before Haber-Bosch process. Usually caused by natural causes + mismanagement. Sometimes also by bad intentions. None of these are political-system-specific. See the famine in Ireland for capitalist example.
> This should over time reduce the amount we spend on social programs, which is in line with what I believe as a liberal that wants less taxes.
As I see it in future most of the productivity will be concentrated in top 1% of people assisted by global empires of AI and automation and protected by IP laws [1]. And the rest of us will pay almost no taxes because we will provide almost no value so there's nothing to tax. If the rich fear the revolution and state control enough to pay for everybody else - we get post-scarcity. If not - we get a dystopia. Possibly both in different places or for different groups of people.
As for the mechanism - I don't really care. Make it UBI or make it 95% employement with most people doing useless jobs for 8 hours a day. End result is the same.
[1] thought experiment - in a world with self-improving general AI and IP laws but with no political mechanism to force someone to give up his IP to others - how do you prevent a world-wide monopoly
> And if capitalist countries do this to each other, it's not capitalism per se to blame, it's other aspects of politics (imperialism, colonialism, Neo-colonialism etc.) that can be separated from capitalism
That's just the branding decision I was speaking of. You chose to brand the sane modern version of capitalism - still capitalism, but sane modern version of communism - socialism. That way you get the conclusion you want cause of your political beliefs. I don't really care for branding, but lets be honest - it's not some universal truth, it's just a consequence of your decision of assigning labels to political systems in a particular way.
BTW famines were pretty common before Haber-Bosch process. Usually caused by natural causes + mismanagement. Sometimes also by bad intentions. None of these are political-system-specific. See the famine in Ireland for capitalist example.
> This should over time reduce the amount we spend on social programs, which is in line with what I believe as a liberal that wants less taxes.
As I see it in future most of the productivity will be concentrated in top 1% of people assisted by global empires of AI and automation and protected by IP laws [1]. And the rest of us will pay almost no taxes because we will provide almost no value so there's nothing to tax. If the rich fear the revolution and state control enough to pay for everybody else - we get post-scarcity. If not - we get a dystopia. Possibly both in different places or for different groups of people.
As for the mechanism - I don't really care. Make it UBI or make it 95% employement with most people doing useless jobs for 8 hours a day. End result is the same.
[1] thought experiment - in a world with self-improving general AI and IP laws but with no political mechanism to force someone to give up his IP to others - how do you prevent a world-wide monopoly
> That's just the branding decision I was speaking of. You chose to brand the sane modern version of capitalism - still capitalism, but sane modern version of communism - socialism.
That is not just branding. Communism had these tenets whenever it was tried. The only logical conclusion is that it's inevitable to get there. Capitalism had it's bad years, but now it's pretty good, it lifted billions out of poverty.
Communism still did intentional famines well into the 1940s, after WWII. Pol Pot was even later. By then, capitalist countries are much more tame and humane. Blaming intentional famines on the lack of fertilizers is just arguing without good faith. It's much more because of 1. lack of regard for human life and 2. central decisions like exporting food in a drought. These 2 traits are so common in communism that I believe they're inseparable.
That is not just branding. Communism had these tenets whenever it was tried. The only logical conclusion is that it's inevitable to get there. Capitalism had it's bad years, but now it's pretty good, it lifted billions out of poverty.
Communism still did intentional famines well into the 1940s, after WWII. Pol Pot was even later. By then, capitalist countries are much more tame and humane. Blaming intentional famines on the lack of fertilizers is just arguing without good faith. It's much more because of 1. lack of regard for human life and 2. central decisions like exporting food in a drought. These 2 traits are so common in communism that I believe they're inseparable.
> By then, capitalist countries are much more tame and humane
How would you classify the countries where starvation is common right now on the communism-capitalism spectrum? [1]. I'd say most of them are more on the capitalism side.
> Communism still did intentional famines
Introducing another variable (we only count "intentional" famines now) is just a way to distance the "capitalism" brand from famines in capitalist countries. BTW - there's a humanitarian crisis and possible famine in Afghanistan[2] which was recently destabilized by the tame and humane capitalist countries (including my own). It wasn't a great place to live before, but at this point it's hard to argue we improved things. But you can always say it wasn't intentional so it doesn't count.
That's the issue with ideologically-motivated branding I was trying to convey. You choose examples and adjust definitions to fit your cause.
I'm mostly fine with that, communism really sucked when it was introduced in my country, and I don't want to play the devil's advocate for much longer, but I hate it when people put their biases out there as objective truths.
[1] https://www.scoopwhoop.com/world/countries-starving-to-death [2] https://www.hrw.org/news/2021/11/11/afghanistan-facing-famin...
How would you classify the countries where starvation is common right now on the communism-capitalism spectrum? [1]. I'd say most of them are more on the capitalism side.
> Communism still did intentional famines
Introducing another variable (we only count "intentional" famines now) is just a way to distance the "capitalism" brand from famines in capitalist countries. BTW - there's a humanitarian crisis and possible famine in Afghanistan[2] which was recently destabilized by the tame and humane capitalist countries (including my own). It wasn't a great place to live before, but at this point it's hard to argue we improved things. But you can always say it wasn't intentional so it doesn't count.
That's the issue with ideologically-motivated branding I was trying to convey. You choose examples and adjust definitions to fit your cause.
I'm mostly fine with that, communism really sucked when it was introduced in my country, and I don't want to play the devil's advocate for much longer, but I hate it when people put their biases out there as objective truths.
[1] https://www.scoopwhoop.com/world/countries-starving-to-death [2] https://www.hrw.org/news/2021/11/11/afghanistan-facing-famin...
> Communism led to authoritarianism
And cronyism, too.
And cronyism, too.
"...that some government interventions to address the apparent shortcomings of capitalism invite cronyism"
LOL, so yet again, govermint is the problem!
It should be increasingly clear by now that capitalism itself is the problem. It naturally leads to the rich getting richer, and despoils everything in the name of profit, unless it is reigned in by government, taming it for the benefit of society, not just profit and growth. Cronyism is a symptom of too much private power.
LOL, so yet again, govermint is the problem!
It should be increasingly clear by now that capitalism itself is the problem. It naturally leads to the rich getting richer, and despoils everything in the name of profit, unless it is reigned in by government, taming it for the benefit of society, not just profit and growth. Cronyism is a symptom of too much private power.
Don't worry! Cronyism can be a symptom of too much public power, too! Did you think that Chinese firms thrive on merit, or access to cheaper-than-free capital supplied by political connections?
Yes, when I wrote 'private power', I really meant 'personal power'. Some of the worst cronyism is in so-called communist countries.
Pretty much every form of government/economy has cronyism problems. Crony capitalism, crony socialism, crony communism, crony dictatorships, etc. all exist.
It's human nature to want to help your friends before helping strangers, but that attitude leads to corruption when people in positions of power practice it repeatedly.
It's human nature to want to help your friends before helping strangers, but that attitude leads to corruption when people in positions of power practice it repeatedly.
Capitalism will lead to wealth inequality even apart from cronyism.
Yet in general it makes a populace who tries it, more fat, and grants a life of more pleasure, than any of its counterparts.
This itself might be bad for a nation though.
First you get a bunch of people in government who think they should get a percentage of that wealth made by the merchants (just like the feudal lords of old)
Second, the nation becomes so wealthy it has to just keep consuming more and more, and at some point people start having to come up with insane ideas, and gladiator sports, and just become a bunch of addicts because life has no purpose and is too easy.
I think I’m personally ready for some socialist/communist policies so people in my country can experience some actual suffering, and maybe even go hungry, and then at least they will stop talking about the pointless crap they always go on about it.
Yet in general it makes a populace who tries it, more fat, and grants a life of more pleasure, than any of its counterparts.
This itself might be bad for a nation though.
First you get a bunch of people in government who think they should get a percentage of that wealth made by the merchants (just like the feudal lords of old)
Second, the nation becomes so wealthy it has to just keep consuming more and more, and at some point people start having to come up with insane ideas, and gladiator sports, and just become a bunch of addicts because life has no purpose and is too easy.
I think I’m personally ready for some socialist/communist policies so people in my country can experience some actual suffering, and maybe even go hungry, and then at least they will stop talking about the pointless crap they always go on about it.
Complaining about crony capitalism, yet using a computer, driving on roads, buying stuff from stores, all things provided by crony capitalists.
Go live in a cave if you have a problem with it.
Go live in a cave if you have a problem with it.
Capitalism is not something that exists outside of government, governments create capitalism through property (and other) laws. And since capitalism forces firms to focus only on profit, it similarly forces them to attempt to corrupt government to increase their profits. The problem of cronyism exists inside of capitalism, not outside of it and not separable from it.
Of course Capitalism exists outside of the government. Look at the extremes: Capitalism : Mercantile Exchange were value is created by the providers and users. Socialism : Central Government sets values and controls every single aspect of your life.
Capitalism is based on rules of property and ownership, basically that I can own something, that you can't take it away from me through violence and that I can hire people to improve that something and they won't have an ownership stake on it (unless I want them to.) Those rules come from government. If you think about a society with no centralized rules on property and ownership, it wouldn't be very capitalistic, it would be much more like an anarchic steal-what-you-can system.
Those rules regarding property and ownership predate government. The government likes to pretend that only it can enforce those rules, when in fact it is the entity most responsible for violating them. You can't seriously claim to enforce property rights when you yourself are seizing a sizable chunk of everyone's income for your own use. Also, there is no reason at all that the rules need to be "centralized" or promulgated and enforced by some special class of rulers. Property and ownership and the justice of proportional punishment for violating them are all logical consequences of self-ownership and reciprocation. People are perfectly capable of arranging to enforce their own rights without depending on an overgrown, overpriced, centralized protection racket.
Capitalism describes
Capitalism doesn't prescribe
We should praise Capitalism for describing humanity better than other *ism
Capitalism doesn't prescribe
We should praise Capitalism for describing humanity better than other *ism
That's like saying that the rules of chess describe instead of prescribing. Perhaps it doesn't say anywhere that you should play chess. But neither does it suggest that the rules of chess "describe human play better than the rules of any other game."
Capitalism describes a system where ownership over all capital is marketized. A society can adhere to that system or not. Under Feudalism, for example, land ownership is instead attached to hereditary titles. You can argue that Capitalism is the best economic system for a society, but it is hardly the only one. In fact, compared to the millenia for which Feudalism lasted, Capitalism is very, very recent.
Capitalism describes a system where ownership over all capital is marketized. A society can adhere to that system or not. Under Feudalism, for example, land ownership is instead attached to hereditary titles. You can argue that Capitalism is the best economic system for a society, but it is hardly the only one. In fact, compared to the millenia for which Feudalism lasted, Capitalism is very, very recent.
> We should praise Capitalism for describing humanity better than other *ism
There are plenty of examples of non capitalist societies thorough history.
What does "capitalism" describe about humanity, exactly?
There are plenty of examples of non capitalist societies thorough history.
What does "capitalism" describe about humanity, exactly?
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Capitalism is the ultimate democracy, everyone votes with their labour and their purchases. The more regulation, the less power the individual has. Of course, some regulation is necessary to avoid abuses.
Discussions should be on the level of what rules allow society to reach a better result, not just try to artificially fix problems because it leads to even bigger problems.
Discussions should be on the level of what rules allow society to reach a better result, not just try to artificially fix problems because it leads to even bigger problems.
Everyone votes with their purchases, except the people with the most money get the most votes, and if you don't participate in the "elections" you starve? Sounds very democratic.
Regulations typically limit the power of the most powerful in society, whose power in turn restricts the rest of us. Thus, regulation frequently increases the freedom of most citizens.
Consider a business owner who treats his workers poorly. The workers could find new employers, but odds are they'd be treated just as poorly there, because these labour conditions are not atypical. Then a bill is passed which forces employers to improve labour conditions. Less power for elites means workers' freedom from having power exerted upon them increases.
Regulations typically limit the power of the most powerful in society, whose power in turn restricts the rest of us. Thus, regulation frequently increases the freedom of most citizens.
Consider a business owner who treats his workers poorly. The workers could find new employers, but odds are they'd be treated just as poorly there, because these labour conditions are not atypical. Then a bill is passed which forces employers to improve labour conditions. Less power for elites means workers' freedom from having power exerted upon them increases.
Are you trolling?
a) One dollar one vote? That's "ultimate democracy"? Really?
b) how much labour would you say the average ceo does compared to the average low level worker? The ceo works 200-500 times as hard? Really?
a) One dollar one vote? That's "ultimate democracy"? Really?
b) how much labour would you say the average ceo does compared to the average low level worker? The ceo works 200-500 times as hard? Really?
> Capitalism is the ultimate democracy, everyone votes with their labour and their purchases.
So only those who can perform jobs and buy things are able to vote? That sounds dystopian to me.
So only those who can perform jobs and buy things are able to vote? That sounds dystopian to me.
Why is cronyism bad? Because it distributes opportunity based on relationships rather than merit.
Why is unregulated capitalism bad? Because it distributes opportunity based on capital rather than merit.
But cronyism by definition operates at a human scale---a person can only have so many friends, after all---while the scale of capital is unlimited. in principle, one person can deprive millions of people of opportunities that might otherwise be available to them. So unregulated capitalism is a much, much bigger problem than cronyism.
Why is unregulated capitalism bad? Because it distributes opportunity based on capital rather than merit.
But cronyism by definition operates at a human scale---a person can only have so many friends, after all---while the scale of capital is unlimited. in principle, one person can deprive millions of people of opportunities that might otherwise be available to them. So unregulated capitalism is a much, much bigger problem than cronyism.
> But cronyism by definition operates at a human scale---a person can only have so many friends, after all
If your friends are Senators, Representatives, and the President, you can also deprive unlimited millions of people from opportunities.
If your friends are Senators, Representatives, and the President, you can also deprive unlimited millions of people from opportunities.
This is a great point. But your friends are unlikely to be Senators, Representatives, or the President unless you also have substantial capital.
OK, but getting rid of capitalism doesn't get rid of capital. No economic system has ever done that, and so you still have the problem that whoever controls capital has the power that comes with it. So who gets to control the capital, and what system of laws and regulations do we enforce that both protect and circumscribe how that capital is managed and used? This is the problem Marxists have struggled with, and never managed to convincingly answer.
I think capitalism is great, it has a lot of benefits. But it can't just be left open-loop. You're right that the concentration cannot be avoided, but it can be mitigated so that it does not become catastrophic, which I would argue is the point we are nearing. Wealth and income disparities have not always been as acute as they are today.
Right but it's not capitalism as such that does that. It's the regulatory, legal and political systems that do it. Those are what need to be reformed, not the basic freedoms of association and ownership that underly capitalism.
Look at China, Capitalism transformed that country. I know, my wife is Chinese and I first went there in 2001. It's raised hundreds of millions of people out of poverty after half a century of grinding poverty and starvation.
As for growing wealth inequality, that seems to be mainly a US phenomenon, the evidence for it having grown in Europe is pretty weak. I certainly don't see it as inevitable, it's an issue of direction and leadership.
Look at China, Capitalism transformed that country. I know, my wife is Chinese and I first went there in 2001. It's raised hundreds of millions of people out of poverty after half a century of grinding poverty and starvation.
As for growing wealth inequality, that seems to be mainly a US phenomenon, the evidence for it having grown in Europe is pretty weak. I certainly don't see it as inevitable, it's an issue of direction and leadership.
>Right but it's not capitalism as such that does that.
I assume by "that", you mean the concentration of wealth. But capitalism does concentrate wealth as a mathematical inevitability, because of the strong feedback loop between capital and income. The old saying, the rich get richer is literally true: having money makes it easier to make more money. It's intrinsic to the system. On an individual level, it's worldwide (ie, the disparity between individuals is increasing, though the disparity between nations is decreasing; see https://unu.edu/news/news/global-income-inequality-up-or-dow...).
That doesn't mean we should throw the whole thing out, but it does mean we can't just take our hands off the wheel and let it run laissez faire.
I assume by "that", you mean the concentration of wealth. But capitalism does concentrate wealth as a mathematical inevitability, because of the strong feedback loop between capital and income. The old saying, the rich get richer is literally true: having money makes it easier to make more money. It's intrinsic to the system. On an individual level, it's worldwide (ie, the disparity between individuals is increasing, though the disparity between nations is decreasing; see https://unu.edu/news/news/global-income-inequality-up-or-dow...).
That doesn't mean we should throw the whole thing out, but it does mean we can't just take our hands off the wheel and let it run laissez faire.
Corruption (Cronyism) is the route of issues in ALL economic systems (much worse in other systems such as autocracies, socialism, authoritarian socialism, etc). So let's not throw the baby out with the bathwater (see US scientific accomplishments in the last decade).
What needs to happen in the US to help right the ship is that the legal system needs to be tightened up and money needs to be significantly taken out of politics, the K street rotating door between government needs to be severed, and public wages (i.e. being a judge or public attorney) need to be competitive to private wages to ensure we have talent working to uphold the lack of corruption.
This wave of pro socialism is (a) greatly misunderstood by the majority of the people peddling it and (b) is a vote against the current situation without understanding what the situation they are about to jump into looks like (always thinking their are greener pastures).
What needs to happen in the US to help right the ship is that the legal system needs to be tightened up and money needs to be significantly taken out of politics, the K street rotating door between government needs to be severed, and public wages (i.e. being a judge or public attorney) need to be competitive to private wages to ensure we have talent working to uphold the lack of corruption.
This wave of pro socialism is (a) greatly misunderstood by the majority of the people peddling it and (b) is a vote against the current situation without understanding what the situation they are about to jump into looks like (always thinking their are greener pastures).
I definitely think there is a lot of "grass is greener" thinking going on right now. Especially amongst those on the far-left who are pushing communist/socialist ideas on twitter.
I had a discussion on reddit recently with a communist and the gist of their argument was basically:
1. I'm having a tough time in life because I have skills that aren't very profitable under capitalism.
2. Under communism the idea is 'from each according to their ability and to each according to their need'.
3. This removes the profit motive so my skills will be valued more under communism.
The problem is that these people aren't thinking about 3rd, 4th, 5th, etc order effects of their ideas. For example, profit isn't necessarily a bad thing. Profit encourages people build more things and efficiently use resources. You can't expect the same level of prosperity without a profit motive.
I had a discussion on reddit recently with a communist and the gist of their argument was basically:
1. I'm having a tough time in life because I have skills that aren't very profitable under capitalism.
2. Under communism the idea is 'from each according to their ability and to each according to their need'.
3. This removes the profit motive so my skills will be valued more under communism.
The problem is that these people aren't thinking about 3rd, 4th, 5th, etc order effects of their ideas. For example, profit isn't necessarily a bad thing. Profit encourages people build more things and efficiently use resources. You can't expect the same level of prosperity without a profit motive.
Agree. A lot of it is knee jerk reactions to the current situation. Its not to dissimilar from people voting out the current government because they are unhappy with their situation but without vetting the alternative (see brexit). Anyways its a dangerous situation as there is foment-able rage on the left (and many cases it is warranted).
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> Company A, having been dominant on the market for a long time, can simply tap into their savings and lower its prices, to the point where X is more attractive to consumers than X'. B, new to the market and wo. such substantial savings, cannot compete and goes bankrupt.
If it was this simple, why have so many gigantic corporations gone out of business over the years? Sears was once the world's largest retailer and built the world's tallest building to use as its headquarters. Now it's a penny stock. Why didn't they just lower their prices to push out competitors? Remember every town in America had a Blockbuster and AOL was synonymous with the internet? What happened to those companies?
If it was this simple, why have so many gigantic corporations gone out of business over the years? Sears was once the world's largest retailer and built the world's tallest building to use as its headquarters. Now it's a penny stock. Why didn't they just lower their prices to push out competitors? Remember every town in America had a Blockbuster and AOL was synonymous with the internet? What happened to those companies?
Just because an approach doesn't always work doesn't mean that it is often tried and often successful.
Even feudalism had numerous examples of once-powerful barons being deposed, but that didn't mean inherited privilege and killing off weaker competitors weren't characteristics of the system.
Even feudalism had numerous examples of once-powerful barons being deposed, but that didn't mean inherited privilege and killing off weaker competitors weren't characteristics of the system.
But if Sears or others are replaced with other monopolies then the point stands. For example if you imagine a market where every 20 years the old monopoly firm gets beat out by a competitive new entrant which very quickly establishes it's own monopoly, becomes sclerotic over 20 years and then itself loses, it doesn't really matter to consumers that there is turnover, they are almost always existing in a monopolized market.
Each time the incumbent A snuffs out such a competitor, they have to give away a lot of cash.
While financing this might become profitable after the competitor goes bankrupt and A raises prices again, there is a continuous stream of competitors trying to profit, which might erode A's capital to a point where it's not worth dumping.
There is also the risk of a bankrupt competitor open-sourcing their product out of either spite or benevolence, significantly and permanently demonetizing the product in question, damaging A (the dumper's) finances.
And yet another risk is the competitor not going bankrupt, but merely scaling down while A is done with its dumping.
https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
While financing this might become profitable after the competitor goes bankrupt and A raises prices again, there is a continuous stream of competitors trying to profit, which might erode A's capital to a point where it's not worth dumping.
There is also the risk of a bankrupt competitor open-sourcing their product out of either spite or benevolence, significantly and permanently demonetizing the product in question, damaging A (the dumper's) finances.
And yet another risk is the competitor not going bankrupt, but merely scaling down while A is done with its dumping.
https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
And what is your solution?
You can say something is flawed, but compared to what, and how would you improve it?
You can say something is flawed, but compared to what, and how would you improve it?
It's ok to express frustration with something without having a solution to it.
Frustration with something is not the same as being ‘against’ that thing.
If you are against it and you don’t have a solution then you are simply destructive.
If you are against it and you don’t have a solution then you are simply destructive.
I guess it's "okay" (what isn't "okay" in this context?). But it's certainly not useful. So you've restated the problem - great. This is a good way to lead into a solution, which is the the more useful thing to discuss. So let's hear the solution.
I don't have a solution. I don't have much knowledge of such extremely complex systems and I have no hope of coming up with a solution myself.
I can see that my car is sputtering black smoke when I drive it and correctly identify that it's a problem, but I bring it to an expert for a suggestion to fix it since I don't have much knowledge in this topic either.
I can see that my car is sputtering black smoke when I drive it and correctly identify that it's a problem, but I bring it to an expert for a suggestion to fix it since I don't have much knowledge in this topic either.
Fine, don't contribute to the discussion in a constructive way, but our peer are in the thread above is: https://news.ycombinator.com/item?id=29876728
How about you? What's your solution?
The solution already exists and is used, to varying degrees, by many western industrializted countries, especially in Europe.
1. Regulated Capitalism
2. State Funded Infrastructure.
ad 1) Capitalism isn't a bad system per-se, but needs to be kept in check. States need to ensure that un-competitive behavior is kept in check, that too-large monopolies are reigned in, that consumers are protected, that fair taxes are paid and that private wealth has no undue influence on politics.
ad 2) Structural systems required for a society to function properly have to be, at least partially, state funded, state controlled, or even state owned, thus ensuring the availability and baseline quality of structural services to as many citizens as possible, with regard for revenue generation being a secondary concern.
1. Regulated Capitalism
2. State Funded Infrastructure.
ad 1) Capitalism isn't a bad system per-se, but needs to be kept in check. States need to ensure that un-competitive behavior is kept in check, that too-large monopolies are reigned in, that consumers are protected, that fair taxes are paid and that private wealth has no undue influence on politics.
ad 2) Structural systems required for a society to function properly have to be, at least partially, state funded, state controlled, or even state owned, thus ensuring the availability and baseline quality of structural services to as many citizens as possible, with regard for revenue generation being a secondary concern.
These sound like reasonable improvements, and maybe not without their own potential vectors for cronyism. I am genuinely interested to read more.
Of course they create vectors for cronyism, massively. All these improvements require constant vigil by regulatory bodies, the justice system and the public itself.
They also rely heavily on the public being educated enough, interested enough and participatory enough to reflect bad behavior in their voting decisions.
None of this however is an argument for less regulation. It is an argument for education and political participation.
They also rely heavily on the public being educated enough, interested enough and participatory enough to reflect bad behavior in their voting decisions.
None of this however is an argument for less regulation. It is an argument for education and political participation.
Do you think that kind of vigil is sustainable? Surely there will be some ebb and flow there, and that's what concerns me: what if it flows too far into one extreme or the other and some new, unforeseen scourge worse than what we have today shows itself.
Are people taking care that they are educated, stay informed, have an active interest in what's going on? Then it can work.
It's not an easy process, it is active work in fact, but it is possible.
It's not an easy process, it is active work in fact, but it is possible.
> 1. Regulated Capitalism
This is why we have cronyism in the first place. Who do you think is writing the regulations? Who's funding the think tanks and the "grassroots" organizations? Who's paying for the campaigns?
This is why we have cronyism in the first place. Who do you think is writing the regulations? Who's funding the think tanks and the "grassroots" organizations? Who's paying for the campaigns?
Here in the UK we have pretty strict campaign finance limits and lobbying is also heavily regulated. In most European democracies the comment was referring to this is really not a serious problem. It's always a problem to _some_ extent, but the US is an extreme outlier on this one.
You're missing a crucial element here. The government actually helps keep companies like Company A in power.
It's more complex and doesn't always go like that. If X' is a superior product objectively, then company B can find investors willing to back them and take on company A. Company A could itself be an investor in company B
Yes way more complex as a recent article outlined regarding a very relevant story.
"$35BN Match Group file multiple lawsuits against muzmatch following repeated failed acquisition offers" -
https://news.ycombinator.com/item?id=29860034
"$35BN Match Group file multiple lawsuits against muzmatch following repeated failed acquisition offers" -
https://news.ycombinator.com/item?id=29860034
shrug I'm sure you can find much more examples of companies not behaving this way. This kind of behavior can be lessened with laws and penalties against frivolous lawsuits. It's hardly an indictment against the system itself.
On the other hand there are countless examples of similar strong-arming tactics that never see daylight. For example, negotiations with supermarket chains to get a spot on the shelf (and which spot), what the chain's cut will be, or which tools a car repair shop is allowed to use to be "licensed" to work on some brand (hint: it's the brand's own overpriced line of tools).
"Lets provide the better product/service at a lower price" is, by far, not the most common business tactic.
"Lets provide the better product/service at a lower price" is, by far, not the most common business tactic.
Indeed, over-regulation is cronyism
How would that play out? Company B lobbies Washington to legislate/prosecute frivolous lawsuits like those brought by Company A against its competitors? Seems to me any resources B can muster for such an endeavor would be dwarfed by A’s resources…
Why would it have to rise to the level of lobbying in Washington? That's not how the majority of laws get enforced. It would be more like:
- Law for frivolous lawsuits created with criteria
- Company A engages in said behavior
- Company B files motion to dismiss based on said criteria
- Judge agrees and dismisses lawsuit, and warns of contempt if the behavior continues
- Law for frivolous lawsuits created with criteria
- Company A engages in said behavior
- Company B files motion to dismiss based on said criteria
- Judge agrees and dismisses lawsuit, and warns of contempt if the behavior continues
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Yes, the fundamental problem is that there is a strong feedback loop between capital and income, so that the more capital is accumulated, the more it produces income. In practical terms, it means that the rich can not only buy rewards for the work they've put in, they can also buy opportunities for additional income---opportunities that poorer people could've won with hard work but now are no longer available. This feedback loop is exacerbated by a lot of factors, including things like cronyism and winner-take-all digital markets, but the fundamental problem is intrinsic to capitalism.
>the fundamental problem is that there is a strong feedback loop between capital and income...
As long as that capital is devoted to productive activities, such as investment in a company that employs people, or equipment that had to be manufactured and is used productively, I've no problem with that. None of those economic functions could have been substituted by labour, it took capital to do it, and in fact those activities promote and reward labour.
So we need to incentivise productive uses of capital, and tax unproductive uses. What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.
As long as that capital is devoted to productive activities, such as investment in a company that employs people, or equipment that had to be manufactured and is used productively, I've no problem with that. None of those economic functions could have been substituted by labour, it took capital to do it, and in fact those activities promote and reward labour.
So we need to incentivise productive uses of capital, and tax unproductive uses. What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.
>So we need to incentivise productive uses of capital, and tax unproductive uses.
I would agree that this would probably improve the situation, yes, as long as the concentration of wealth isn't leveraged to drive wages down.
>What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.
However productive the economy becomes, if its fruits are not shared more widely than they are today, it won't benefit society as a whole in the long run. In the last 40 years overall productivity has boomed, but the wealthy have grabbed a wildly disproportionate share of the resulting economic growth simply because their disproportionate share of capital gives them the leverage to do so.
I would agree that this would probably improve the situation, yes, as long as the concentration of wealth isn't leveraged to drive wages down.
>What's important is that capital is mostly used to benefit society, and capitalism has proved incredibly good at doing that efficiently.
However productive the economy becomes, if its fruits are not shared more widely than they are today, it won't benefit society as a whole in the long run. In the last 40 years overall productivity has boomed, but the wealthy have grabbed a wildly disproportionate share of the resulting economic growth simply because their disproportionate share of capital gives them the leverage to do so.
Any system is not devoid of a system of morals and ethics.
The issue we have today is one where the elite are completely devoid of any morals, or they have convinced themselves that they are acting morally in some fashion.
This is the issue with any system, whether it be capitalism, socialism, fascism, or communism. A select group of individuals eventually rise to the top, and they work to manipulate the system to their advantage -- just look at the conspiracies that were occurring immediately after Hitler and Stalin's deaths. Watch closely when Kim Jong inevitably passes, and there is a power void in North Korea. History repeats itself time and time again.
We, in general, are a morally bankrupt people, and everyone has been conditioned to act in one own's best interest. "I'm gonna get mine" because everyone believes the system is corrupt and that's how you have to behave to survive, but what people don't understand is it is the people that are corrupt, and this behavior simply perpetuates the corruption.
Too many people think it's a system issue. This place too much faith in structures created by man. This is an issue of hearts and minds. Always has been.
The issue we have today is one where the elite are completely devoid of any morals, or they have convinced themselves that they are acting morally in some fashion.
This is the issue with any system, whether it be capitalism, socialism, fascism, or communism. A select group of individuals eventually rise to the top, and they work to manipulate the system to their advantage -- just look at the conspiracies that were occurring immediately after Hitler and Stalin's deaths. Watch closely when Kim Jong inevitably passes, and there is a power void in North Korea. History repeats itself time and time again.
We, in general, are a morally bankrupt people, and everyone has been conditioned to act in one own's best interest. "I'm gonna get mine" because everyone believes the system is corrupt and that's how you have to behave to survive, but what people don't understand is it is the people that are corrupt, and this behavior simply perpetuates the corruption.
Too many people think it's a system issue. This place too much faith in structures created by man. This is an issue of hearts and minds. Always has been.
Morals and ethics are great but insufficient. In a system with an absence of consequences for unethical and immoral behavior - in fact, with the presence of incentives for those behaviors - even if 99% of the participants are sufficiently morally motivated to reject the siren song of wealth and power (which is a stretch) there will always be a few narcissistic, greedy, power-hungry sociopaths with an excess of inherited wealth that will trample all over your utopia.
It's useful to suggest that everyone behave morally, if more did so the world would be a better place. But it's unwise to build a system where that suggestion is the only check on bad behavior.
It's useful to suggest that everyone behave morally, if more did so the world would be a better place. But it's unwise to build a system where that suggestion is the only check on bad behavior.
What you're describing here is not capitalism but rather a single unwanted scenario that can come from it, specifically when there are too few producers in a category or, in your example, when there is only one.
Yes, it also ignores that price is only one of many factors in the market - doesn't matter to some consumers how cheap your widget is if my widget has new tech/features not found in your widget and consumers need those features. So company A in the example could drop prices and still not be able to compete with the superior product from company B. Happens all the time in the real world.
Market consolidation seems to be the mechanical conclusion of the current rules of the capitalist system, thanks to compounding effects.
>The maxime of capitalism is to maximize ones own profit.
Not sure I necessarily agree with this. I can understand how 1 might come to see it this way. Capitalism is about measuring ones contribution to society.
>What happens in practice is an accumulation of wealth == power in the hands of a small elite, which then no longer need to compete, cronyism or not, because they have the resources to defeat every competitor, even if the competing product is superior.
In our current system which is a regulated capitalist system this happens. It would be a strawman to assert this against capitalism and exclude any impact that government regulation may provide. I'm pretty most people could see government monopolies as abusing capitalism.
>Company A, having been dominant on the market for a long time, can simply tap into their savings and lower its prices, to the point where X is more attractive to consumers than X'. B, new to the market and wo. such substantial savings, cannot compete and goes bankrupt.
Lets evaluate.
Tesla: Market Cap of ~1,030 Billion $ off of ~$30 billion revenue.
Ford: Market Cap of ~100 billion $ off of $150 billion revenue.
GM: Market cap of ~100 billion $ off of $150 billion revenue.
Stellantis: Market cap of ~64 billon $ off of $100 billion revenue.
Very clearly shows why Ford and GM are rushing to get EVs out to market. Stellantis who had good plans has basically not arrived to market with anything. This is one of the highest regulated industries and capitalism is working great here.
>Okay, but the consumers still get X' when A buys the patents from the now bankrupt B, right? Maybe.
Patents != capitalism. A true free market would not have any patents. If you build something new and unique, everyone would be able to come in and copy it. We could debate the merits of the patent system and perhaps from society's point of view it's a good thing. However, it the current subject, this isnt capitalism you're arguing against.
>They have eliminated their competition anyway, so why bother, when they can just continue printing money by making X, right? Remember, the maxime is maximize-your-profit not deliver-the-best-product.
I think this is a good spot to come back around. Capitalism is not competition. Yes it engenders competition but that's the wrong way to look at it. This is something business owners need to learn. Capitalism is about solving problems and contributing to society. Capitalism measures this in one of the most effective ways.
Not sure I necessarily agree with this. I can understand how 1 might come to see it this way. Capitalism is about measuring ones contribution to society.
>What happens in practice is an accumulation of wealth == power in the hands of a small elite, which then no longer need to compete, cronyism or not, because they have the resources to defeat every competitor, even if the competing product is superior.
In our current system which is a regulated capitalist system this happens. It would be a strawman to assert this against capitalism and exclude any impact that government regulation may provide. I'm pretty most people could see government monopolies as abusing capitalism.
>Company A, having been dominant on the market for a long time, can simply tap into their savings and lower its prices, to the point where X is more attractive to consumers than X'. B, new to the market and wo. such substantial savings, cannot compete and goes bankrupt.
Lets evaluate.
Tesla: Market Cap of ~1,030 Billion $ off of ~$30 billion revenue.
Ford: Market Cap of ~100 billion $ off of $150 billion revenue.
GM: Market cap of ~100 billion $ off of $150 billion revenue.
Stellantis: Market cap of ~64 billon $ off of $100 billion revenue.
Very clearly shows why Ford and GM are rushing to get EVs out to market. Stellantis who had good plans has basically not arrived to market with anything. This is one of the highest regulated industries and capitalism is working great here.
>Okay, but the consumers still get X' when A buys the patents from the now bankrupt B, right? Maybe.
Patents != capitalism. A true free market would not have any patents. If you build something new and unique, everyone would be able to come in and copy it. We could debate the merits of the patent system and perhaps from society's point of view it's a good thing. However, it the current subject, this isnt capitalism you're arguing against.
>They have eliminated their competition anyway, so why bother, when they can just continue printing money by making X, right? Remember, the maxime is maximize-your-profit not deliver-the-best-product.
I think this is a good spot to come back around. Capitalism is not competition. Yes it engenders competition but that's the wrong way to look at it. This is something business owners need to learn. Capitalism is about solving problems and contributing to society. Capitalism measures this in one of the most effective ways.
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The incentives of capitalism lead to this, even if Adam Smith didn't discuss it.
Weird, never heard of a strawman that actually keeps happening in real life, over and over. People may be disgusted by the incentives of capitalism, but their disgust hasn't changed it very much.
Cronyism is indeed the disease and there is a solution on automation and transparency. Big Government is not the solutions and it will only make all the problems worse. I really don't understand why so many smart people think that solution for the whole world is to sit down and vote money into existence.
I will never work because it just can't work, everyone is different and has different priorities. A better world can only be built from the bottom up, just look at craft beer and how independent people were able to retake one of the most monopolistic industries in the world.
I will never work because it just can't work, everyone is different and has different priorities. A better world can only be built from the bottom up, just look at craft beer and how independent people were able to retake one of the most monopolistic industries in the world.
How exactly would automation assist in making an economic system more democratic and beneficial to the general population? Greater automation would simply push people further away from any wealth generated, creating more powerful cronies, and continuing the trend of low paid, low quality, serf like jobs in the service industry.
That is a problem that needs cracking but you are starting to see the solution emerging on the crypto and DeFi work.
What solution?
The DeFi space is a lot worse than the traditional economy by just about any measure right now: inequality, theft, fraud, instability, market manipulation, etc are all way worse.
The DeFi space is a lot worse than the traditional economy by just about any measure right now: inequality, theft, fraud, instability, market manipulation, etc are all way worse.
Have you considered the possibility that those “so many smart people” understand these things better than you? Have you considered the possibility that the craft beer industry can’t work or isn’t feasible to occur in other sectors?
There's something fundamentally undemocratic (and perhaps, sadly, realistic) about this take. Will advocating for broad de-regulation and business rule actually reduce cronism? Will it / can it reduce negative externalities?
I just think ... we've tried that. It's been the experiment of the last 40 years. What's next?