Ask HN: How could capitalism be improved?
Probably in a lot of ways, but to me some of the main issues seem to be (1) incentivizing short-term thinking; (2) locality mismatching, ie certain communities spending money on businesses whose owners live and spend elsewhere -- this is probably offset in many cases, I'm not sure; and (3) not accounting for externalized expenses, ie pollution and other drags on human/environmental well-being. I don't know what the solutions would look like for the first two, and attempts are being made at solving the third, but I'm curious if other people have thoughts on it that don't involve pivoting to ideological extremes. In case this does generate a discussion try to avoid sarcasm, straw-man, ad hominem, and moving goal posts...
34 comments
My ideas:
* Tax monopolies more heavily and redistribute that money in the same area. Take from Google, and give it to competitors like DDG, even Bing, and even back into Google.
* Heavily socialize basic things like transport, telecommunications and education. These are things that help foster growth from independent sources.
* The environmental issue is tricky. I don't think it's possible to deal with until things get really bad, at which point it'll be quite late. Hopefully not to the point where we go extinct (unlikely) but probably where millions will die (directly or indirectly). Until then, I don't know if there's much that can be done.
* Tax monopolies more heavily and redistribute that money in the same area. Take from Google, and give it to competitors like DDG, even Bing, and even back into Google.
* Heavily socialize basic things like transport, telecommunications and education. These are things that help foster growth from independent sources.
* The environmental issue is tricky. I don't think it's possible to deal with until things get really bad, at which point it'll be quite late. Hopefully not to the point where we go extinct (unlikely) but probably where millions will die (directly or indirectly). Until then, I don't know if there's much that can be done.
Heavily socialize education? What are you suggesting beyond what's currently done? To me, it already looks socialized about as far as can be done.
Unless by "education" you mean "college", which is pushing the boundaries of "basic things".
(I'm in the US, if that matters to this conversation.)
Unless by "education" you mean "college", which is pushing the boundaries of "basic things".
(I'm in the US, if that matters to this conversation.)
>The environmental issue is tricky
In the same vein of your first point, https://en.wikipedia.org/wiki/Pigovian_tax
In the same vein of your first point, https://en.wikipedia.org/wiki/Pigovian_tax
For (1) universal basic income is a step in the right direction. The less pressure there is to provide the basic necessities, the less need to take unproductive or unfulfilling jobs.
For (2) advanced economies are becoming more service heavy rather than production heavy. Many services are less location-dependent than goods production and therefore money can flow to more locales. (e.g. I know a few folks who are programmers + small scale farmers)
And (3) is hopefully becoming more important as the scale of the externalities increase (e.g. Chinese pollution hurts the whole world, not just China).
For (2) advanced economies are becoming more service heavy rather than production heavy. Many services are less location-dependent than goods production and therefore money can flow to more locales. (e.g. I know a few folks who are programmers + small scale farmers)
And (3) is hopefully becoming more important as the scale of the externalities increase (e.g. Chinese pollution hurts the whole world, not just China).
We are already looking at it, in China. The communist party is probably the only force preventing capitalism there from devolving into a thinly veiled oligarchy with the problems you mention we have in the west and in Russia.
They seem to be good at 1) long-term thinking, investing all around the world and building infrastructure 2) preventing people from moving out to big cities away from their birthplace 3) seem to be interested in addressing pollution externalities, building nuclear energy power plants fast.
They are still a massive polluter, so they are not perfect, and the political system is probably not a western liberal ideal, but we can and should learn from them.
The better capitalism will probably be less of capitalism and oligarchy, and more of a powerful social democracy state.
They seem to be good at 1) long-term thinking, investing all around the world and building infrastructure 2) preventing people from moving out to big cities away from their birthplace 3) seem to be interested in addressing pollution externalities, building nuclear energy power plants fast.
They are still a massive polluter, so they are not perfect, and the political system is probably not a western liberal ideal, but we can and should learn from them.
The better capitalism will probably be less of capitalism and oligarchy, and more of a powerful social democracy state.
Cities are generally considered efficient and good. We want people to live in them. In traditional Neoliberal thought, anyway.
Tons of people move to cities in China though. Shenzhen is basically dead when everyone goes home for CNY.
Tons of people move to cities in China though. Shenzhen is basically dead when everyone goes home for CNY.
Who is "we"? Of course, many people want to move, work and live in the big cities. But it is not clear it is preferable to let all of them do that and leave the rest of the China depopulated. The hukou system seems designed to keep big proportion of all people from settling and living in the big cities. And it seems this is working. For example, agricultural hukous are motivated from changing to urban hukous by property rights that urban hukous do not have.
> Who is "we"?
Classic Neoliberals, as stated. Or, people who like evidence-based policy in general. Cities are more efficient in terms of output per resource input, environmental externalities, etc.
China has some of the most populated cities in the world. Real estate prices are way beyond the average person's reach and it's only getting worse. People who migrate to cities for work are often slaving away with no end in sight, all just to send money back anyway. Heck, even 'skilled' labor is forced to do that because there's so much competition from the millions of others. Meanwhile the people who are left behind in the country struggle to get even a basic standard of living.
How one earth is that 'working'? China's QoL increases are entirely about it becoming richer in general. 户口 is a nasty bit of central planning that messes with peoples lives and crushes them at random. It hasn't stopped overpopulation. It hasn't solved the other problems. It gives people advantages based on a dice roll of their birth, rather than merit, and then the rest of the Chinese system compounds it.
Honestly, your comments are starry-eyed orientalism at its worst. Chinese 'capitalism' is a horror show.
Classic Neoliberals, as stated. Or, people who like evidence-based policy in general. Cities are more efficient in terms of output per resource input, environmental externalities, etc.
China has some of the most populated cities in the world. Real estate prices are way beyond the average person's reach and it's only getting worse. People who migrate to cities for work are often slaving away with no end in sight, all just to send money back anyway. Heck, even 'skilled' labor is forced to do that because there's so much competition from the millions of others. Meanwhile the people who are left behind in the country struggle to get even a basic standard of living.
How one earth is that 'working'? China's QoL increases are entirely about it becoming richer in general. 户口 is a nasty bit of central planning that messes with peoples lives and crushes them at random. It hasn't stopped overpopulation. It hasn't solved the other problems. It gives people advantages based on a dice roll of their birth, rather than merit, and then the rest of the Chinese system compounds it.
Honestly, your comments are starry-eyed orientalism at its worst. Chinese 'capitalism' is a horror show.
Yes the system is not meritocratic, some people have it much harder and can't do much about it. That sucks for the individual, but it "works" in the sense it is a hurdle/disincentive from the population overconcentrating at few big cities.
"The communist party is probably the only force preventing capitalism there from devolving into a thinly veiled oligarchy..."
China is even more of an oligarchy than the US in my opinion.
China is even more of an oligarchy than the US in my opinion.
How so? The oligarchs in China seem to be under control of the state/party, not the other way around.
The oligarchs are the party. You can see that the people in power have better living conditions, special privileges, etc. The "people" have no recourse to hold the leaders responsible.
Yes there is a privileged class. But that is the case everywhere. And it is most probably very corrupt too. However, what the China system has and the western systems do not have, is the absolute power of the party to set the policy and execute it. This includes making the powerful people (oligarchs) obey, or removing them from power if needed. It breeds infighting and turnover which is good for finding the most capable people. This seems to be impossible in the west; the wealthy powerful people are not removable from their power, irrespective of who is in control of the government.
That's only true to a point. In the west, people in power don't have (in theory) legal powers or privileges outside their office above the general public - you know "That all men are created equal...".
Just because there is turnover doesn't mean that the most capable people are in power. It could be that the most deceitful or powerful people are in power.
You can even see some of this in the worker union in China. It's basically a sham. It's run by the state and the safety protections are basically non-existent.
Just because there is turnover doesn't mean that the most capable people are in power. It could be that the most deceitful or powerful people are in power.
You can even see some of this in the worker union in China. It's basically a sham. It's run by the state and the safety protections are basically non-existent.
I think there is a correlation between the most powerful (politically) and the most capable (being able to make the right decisions for the country) but I agree that is not a universally accepted argument.
You seem to be familiar with China, how can a naive outsider learn about how the China really works inside?
You seem to be familiar with China, how can a naive outsider learn about how the China really works inside?
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In response to your #1, is there an alternative structure that doesn't promote short term thinking? I think this is generally human nature.
For #2, I think this problem exists globally. Money moves around, a lot. You can see it at the national level via trade surpluses or deficits. I'm not sure anything will really change that (other types of political structures have the issue, and many tariffs don't produce the intended results.
Regarding #3, everything has externalities. I don't actually see much being truly done for these issues - it shifts from one thing to another. The main way to reduce externalities is to reduce consumption, but I don't really see that happening. For example, EVs release less CO2, but still use rubber, the electric can come from coal, the lithium causes environmental issues in places like Chile. Is it a step in the right direction? I think so. Is the benefit really as good as its hyped up to be? I think not.
For #2, I think this problem exists globally. Money moves around, a lot. You can see it at the national level via trade surpluses or deficits. I'm not sure anything will really change that (other types of political structures have the issue, and many tariffs don't produce the intended results.
Regarding #3, everything has externalities. I don't actually see much being truly done for these issues - it shifts from one thing to another. The main way to reduce externalities is to reduce consumption, but I don't really see that happening. For example, EVs release less CO2, but still use rubber, the electric can come from coal, the lithium causes environmental issues in places like Chile. Is it a step in the right direction? I think so. Is the benefit really as good as its hyped up to be? I think not.
Capital is free to move around while people are often held in place by borders. If people were free to cross borders capital would have to compete for people instead of people and countries competing for capital.
I think Henry George had it right. We need to eliminate income and sales taxes, and tax land and other natural resources instead.
1. Improve forecasting and prediction technology.
2. I’m not sure that’s a problem.
3. Pollution is vandalism. Treat it as such, using fines or taxes.
2. I’m not sure that’s a problem.
3. Pollution is vandalism. Treat it as such, using fines or taxes.
I suppose it depends on where you live. The USA, France and South Korea all have different experiences of what capitalism means, to give three examples.
The economics articles that I've read generally suggest that you need laws and taxes that work against its excesses - workers' rights, environmental protection, consumer protection etc. These should be capable of being amended to address new problems as they arrive.
Regulation and taxation are rarely popular things on this corner of the internet but they're useful tools to tackle some hard problems.
The economics articles that I've read generally suggest that you need laws and taxes that work against its excesses - workers' rights, environmental protection, consumer protection etc. These should be capable of being amended to address new problems as they arrive.
Regulation and taxation are rarely popular things on this corner of the internet but they're useful tools to tackle some hard problems.
Maybe first ask, what is wrong about it?
Some thinking is inherent to the societies where capitalist relations or feudal relations or slave/master relations or hunter-gatherer band relations predominate. Short-term thinking, centralization and environmental externalities have been hallmarks of capitalism for centuries. Some things only change when relations of production go from one form to another.
One question is - what has improved under capitalism? That children don't have to go to dangerous, Dickensian factories is one improvement. Between labor agitation and capitalists realizing a literate population was more profitable, this changed in industrialized countries.
One question is - what has improved under capitalism? That children don't have to go to dangerous, Dickensian factories is one improvement. Between labor agitation and capitalists realizing a literate population was more profitable, this changed in industrialized countries.
I think consumerism specifically is more of an issue than capitalism, at least when it comes to pollution and the environment. People often conflate the two, but consumerism is a more recent phenomenon largely dependent on marketing and FOMO.
So, one way of improving it would be the widespread adoption of minimalism as a value. This seemed to be happening a few years ago with Marie Kondo et al., but I'm not sure if it has maintained momentum. Of course, it's also antithetical to the way Western capitalist economies are set up, so in the short term, a turn toward more digital consumption and less physical consumption might be helpful.
So, one way of improving it would be the widespread adoption of minimalism as a value. This seemed to be happening a few years ago with Marie Kondo et al., but I'm not sure if it has maintained momentum. Of course, it's also antithetical to the way Western capitalist economies are set up, so in the short term, a turn toward more digital consumption and less physical consumption might be helpful.
Make every transaction public.
Its a romantic notion, making every transaction public. A theory. But, alas, not all humans and much of society appreciate knowing every single detail. And those that do will cause a political crawl so devastating as to invoke the reverse of its intention.
What's included in a transaction? Your name and address listed alongside all the medical treatments you pay for?
Image having a sports league with only 5 teams. Do you think there would be a lot of competition?
So one very important way to improve capitalism is to break up monopolies and oligopolies much earlier and drastically than it is done nowadays. This is even more important in IT, with its winner-takes-it-all-market.
So one very important way to improve capitalism is to break up monopolies and oligopolies much earlier and drastically than it is done nowadays. This is even more important in IT, with its winner-takes-it-all-market.
We have a lot of crony capitalism, big corps in bed with government. I think there's a lot we could do to improve that situation but the fox is watching the hen house.
Capitalism its self is fine. Just as water is fine. It needs to be properly regulated. And regulations rely on federal/local culture. What works for the French isn't going to work for Peruvians isn't going to work for Nigerians.
100% recycle:
Remove unpaid externalities. Price in everything down to the exhaust and the packaging. Every manufacturer needs to be responsible for all of what they sell, make sure its all recyclable/reclaimable.
True responsibility:
Make CO level suite leaders personally responsible when they mess up big enough. Mostly in terms of negligence and loss of life. Things like Bhopal, heads should roll.
Firewall between politics and money:
Nothing's going to work if the people running it can be bribed (or any other similar term). Have an election? Here's a pool of tax money and advertisers have to provide discounted time and space.
100% recycle:
Remove unpaid externalities. Price in everything down to the exhaust and the packaging. Every manufacturer needs to be responsible for all of what they sell, make sure its all recyclable/reclaimable.
True responsibility:
Make CO level suite leaders personally responsible when they mess up big enough. Mostly in terms of negligence and loss of life. Things like Bhopal, heads should roll.
Firewall between politics and money:
Nothing's going to work if the people running it can be bribed (or any other similar term). Have an election? Here's a pool of tax money and advertisers have to provide discounted time and space.