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Comment by karllager | Hacker News Reader

Fun fact: Capitalism depends on crises - they are not the exception, they are the rule. People forget that and treat it as something that happens, like a natural catastrophe. This is unfortunate, because this is a purely man-made thing, but still, even the high end media is kind of left in the dark about this central theme (let alone economists, who sometimes get lost in the details of their specialisation).

Now the real analytic question to ponder is: where exactly does this destructive element of capitalism originates from (left as an exercise for the reader).

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Crises aren't necessarily destructive, or something that needs to be prevented. When railroads were first built across the USA there was a huge bubble in railroad stocks. Many investors lost everything, but the country ended up with some great transportation infrastructure.

It's called a business cycle:

https://en.wikipedia.org/wiki/Business_cycle

Ray Dalio explanation here: http://www.economicprinciples.org

Well I'm glad you cleared all this up for us!

I'm sorry for being short on content, but I wish, more people would really go deeper into theory and open their eyes on the things around them and realize, that capitalism is an extremely aggressive beast that has sucked up everything, that is not itself.

Three days ago, I wondered (time and again) about all the fuzz about this site called facebook - within ten years it took something, that was not really exploited (social relations) and made it a first class business. Startup hubs are still dreaming of the next social startup - meaning exploiting special kind of relations (neighbours, potential partners, coworkers, what have you).

And we won't stop here. Think your dreams belong to you? Maybe today, but I can see large enterprises exploiting your very being for profit, soon. You find that disturbing? But why?

There are several issues to be aware of with the way society and technology is evolving for sure, but when you just shout "wake up sheeple!" and offer nothing but hand waving, you are not contributing much in that regard.

Yes, true. But I am not a salesman to sell you a solution.

All I ask for is to be more conscious about these, sometimes subtle, sometimes less so - things.

If it helps you, here's a simple framework of mine to develop some kind of directional feeling for technology: If it helps to lessen the power of a single entity it's perfect, if it enables you to do new things it's good, otherwise, it might only be a distraction.

Linux and free software is perfect, it is free and a huge enabler for all kinds of things - even for businesses. Bittorrent is good, because it is a huge enabler and took power off content distributors. Raspberry Pi is perfect, because it puts computing into a lot of hands. AWS is only good, because it is an enabler, but it actually feeds a single entity - so that's bad. Cryptocurrencies in theory are perfect, since they take power off single large entities - but they are not robust yet. Solar power is perfect, because it can a human make independent of a single large entity.

So, it is somewhat simple: There are things that liberate you - you as a person and let's you voluntarily choose to cooperate and there are things that lock you in - facebooks walled garden, adtech in general, where information asymmetry only grows - and many other things, that only make sense in the capitalist framework (in however shiny colors you want to paint its advantages).

Maybe that's a start?

Very sane reply. It is greed which is the source. To keep it simple.

Well, Minsky's financial instability hypothesis is at least interesting. His argument is, basically, that there's a cycle wherein: during normal times, people want to beat the averages, so they engage in more speculative bets; as that ratchets up, and speculative positions become increasingly leveraged, a point comes where debt is financing interest on speculative leverage; once enough people get suspicious, further debt isn't extended, so the speculative positions default and drive cascading defaults (since there's "blood in the water"); the after-crash period comes with a renewed sense of caution, and people accept lower yields as the price of earlier speculative frenzy; over time, the caution comes to seem outmoded and people believe that normal times are here again; and so on.

I'm not sure how I feel about this, but it's at least a perspective.

Basic differential equations: Any system with an effect proportional to the negative second derivative in it will tend to have cyclic behavior. That's a bit oversimplified, but in practice it often works out that way. And there's plenty of such things in the economy, so cycles in the economy are inevitable.

You can make solid cases that we don't need to have quite the crashes we actually do. But I don't believe in the existence of a real economy that doesn't have some substantial cycles in it that people will point to as evidence that something is wrong.

(Of course, if enough of those people get together and get put in charge of an economy, they often are successful at removing the cycles, by virtue of removing all instances of the economy going up at all....)

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