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Comment by kartan | Hacker News Reader

If you want capitalism to work, you need some kind of "homo economicus" that is able to look for their own selfinterest.

If what you have is companies powered by complex financial systems and artificial intelligence help while consumers are not able to get a discount right, you are going to end with all money in one side of the table with the other empty handed.

This is another reason to improve our education systems. We need to function in an increasing complex society and that requires an incresing education quality with more resources, better methologies and more time dedicated to build knowledge and less to build national identity. (To memorize the list of presidents is not as an useful skill as it used to be, I guess).

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homo economicus as an idea only became popular when economists noticed that it doesn’t exist.

In this context, you are probably right: the skills this study tested are probably something we need people to have. But zoom out a bit and it’s probably a lost case, and ethically dubious, to get people to conform to an ideal only to make a system work that is supposed to serve them.

Capitalism is a tool. It’s the best we currently have. But it’s not a moral philosophy or an end in itself.

I think capitalism is much simpler: capital begets capital. Those who have capital will accumulate more capital, almost infinitely, until the capital/income ratio reaches an equilibrium who knows how high (in the absence of major corrections like wars and hyper inflation). Add inherited wealth and low taxes. Capitalism's winners are those who already have capital. Thomas Pickety's book "Capital in the 21st Century" cogently illustrates this using massive tax return based data sets.

This is capitalism working. Not from the viewpoint of the academic justifiers of capitalism, but the from the viewpoint of people that have an actual vested interest in capitalism (aka the ones whose opinion actually matters and the ones who are the reason why we have this system in the first place).

what you have is companies powered by complex financial systems and artificial intelligence help while consumers are not able to get a discount right

Yeah agreed. Perhaps products (chatbots, voice?) that simply tell people what to do can partially solve for this.

In many cases however, people have self-interests based on vastly different values (think relationship or hobby), and their instincts are good enough at approximating what they want. And while personal finance is tricky for many folks, not every decision is like personal finance which has a easily defined value function like calculating compound interest or choosing discounts. So my view is people are usually right!

"Alexa thinks you should apply for a personal loan through Amazon Finance"

Yeah, no conflict of interest there

Capitalism is great for the many when most business are small and there's plenty of competition.

Capitalism is great for the few in more or less all other scenarios.

We live in one of the others, I'm afraid.

Don't corporations more or less fill the role of homo economicus?

I mean, that's not necessarily great for homo sapiens, but there you go.

> If you want capitalism to work, you need some kind of "homo economicus" that is able to look for their own selfinterest.

Capitalism works just fine. There're plenty of mechanics that punish people for their own stupidity.

The theoretical support for why capitalism is a good system, assumes people aren't stupid and only make trades and decisions that are rational and good for them though.

Arguing that you're going to take advantage of the weak, the old, the distracted, the powerless and the terrified may be a refreshingly open take on capitalism, but it's not what it's sold on.

> Arguing that you're going to take advantage of the weak, the old, the distracted, the powerless and the terrified may be a refreshingly open take on capitalism, but it's not what it's sold on.

The fact that your strength, youth, concentration and wit will give you an advantage over others is exactly why capitalism is fair and awesome.

Talk like that is how communist revolutions are triggered.

Well aren't you just full of yourself.

Myself? Not particularly, no. I am not particularly young, regularly suffer from depression and don't have a lot of ambition anyway.

I would be, personally, far better off with socialist system. Which doesn't change the fact that it is based on immoral grounds which repulse me.

"Age and treachery will always triumph over youth and skill"

-- ancient proverb, attribution uncertain

Does that mean that socialism (a necessarily coercive human-elaborated system) assumes people are stupid and make trades and decisions that are irrational and bad for them? Perhaps it does in denial of the evidence from the history of the 20th century.

People don't have to be sold on capitalism. It comes naturally because it's not a scheme devised by some right-wing Marx though people have elaborated on it. People trade with each other because it comes naturally as it does to every single living entity on the planet which trades with its neighbours and its environment. Wise capitalists see that it's in all our interests to take compassionate regard for the weak, old, distracted etc,. given that that's the fate (in some measure) for all of us ultimately. That's trading.

> Does that mean that socialism (a necessarily coercive human-elaborated system) assumes people are stupid and make trades and decisions that are irrational and bad for them?

Yes, that's the whole premise of collectivism: I can't take care of myself, so someone else has to.

It's completely baffling to me that you could be so… short-sighted, I guess?

Capitalism revolves around the concept of private ownership, which in itself requires the rule of law to be effective – definitionally a "coercive human-elaborated system". Moreover, in order to be effective, capitalism requires efficient, well-informed, competitive, free markets. We can directly observe that competition requires state intervention too. Your mooted "wise capitalist" will be forced out of the market by the "disaster capitalist" who isn't interested in compassion for the weak, because their fate isn't tied to each other.

In reality, any of these arguments about Socialism or Capitalism or Mercantilism or Communism or Liberalism or any other purist capitalised word are bunkum. There is not a simplistic answer to the question of "how do we structure a global economy such that people are fairly rewarded for their contributions to the human condition while ensuring that people are not taken advantage of or mistreated because of systemic power or wealth imbalances". There is almost always a mix of principle and practicality required. Competing interests abound. Successful economies, by most metrics, embrace a mixture of free trade with state regulation, acknowledging that while the free market is an astonishing engine for growth and prosperity it can easily destroy itself if unchecked.

One may also need to recognize that thinking in market terms have its limits.

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