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Comment by Animats | Hacker News Reader

Yes, there's an echo of Marx and Veblen here, but this becoming a big part of the economy is a recent phenomenon. It's a result of having vast manufacturing capacity.

Basic fact: for thousands of years, the big problem was making (or growing, catching, or mining) enough stuff. In the 20th century, that problem started to be solved. By the second half of the 20th century, the leading industrial nations had it solved. Then Asia caught up - Japan, Taiwan, S. Korea, and finally China. China was the big one, being a huge country. Suddenly there was overcapacity in almost everything.

Now, as I write occasionally, it just doesn't take that many people to make all the stuff. It's now possible to have a successful economy with a huge non-productive underclass. Economics and politics haven't caught up with this yet.

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Oh no, you said his name, and like clockwork my precious upvotes have started to turn to downvotes :-)

We agree, though. Capitalism is really, really good at growth and really, really bad at steady-state. We've never really come up with a good alternative for steady-state. I think Marx got the diagnosis right and the treatment wrong, which seems like a pretty modest hypothesis given the relative difficulty of the two. Regardless, we had better figure this out or things will get messy. Very messy.

TBH I have higher hopes for a couple more industrial revolutions to push the meltdown out beyond my lifetime. Bio and space, maybe? :/

> Economics and politics haven't caught up with this yet.

That seems unlikely. Political and economic leadership throughout the "White West" has been subsidizing and expanding the non-productive underclass for decades.

And most of that happened after the US ditched the gold standard in 1971, and part of the reason for that was a budget deficit. And the other countries often had FX reserves, only fueling the overcapacity and reducing bond yields.

Japan was already a powerful manufacturing nation well before the second half of the 20th century. Dont you know the defeated Russia at the end of the 18th ?

Japan defeated Russia at the beginning of the 20th century.

They definitely weren't a major manufacturing economy in the 18th century.

This was also not a prolonged war (lasted about a year and a half). Japan had to commit all its forces to the (successful) campaign. Russia was forced to surrender due to internal conflict and a stagnant economy, but had much more manpower it could have sent to turn the tides.

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