Hacker News Reader

Extreme poverty is defined as someone living on less than $1.25 a day. Do you think that exploitation isn't occurring as long as someone isn't living in extreme poverty?

The exploitation model needs self-generating poverty. If it is lifting people out of poverty then it is destroying itself, as it will run out of the required poor people.

You can argue its not going fast enough, but the direction is unequivocally upwards so far.

Well now you're conflating extreme poverty with poverty. There are millions of people living in poverty in the united states. And you don't really need someone to be in complete poverty to exploit them.

Also, the direction currently is towards stagnating wages and growing wealth inequality.

> Well now you're conflating extreme poverty with poverty. There are millions of people living in poverty in the united states. And you don't really need someone to be in complete poverty to exploit them.

After extreme poverty ends, you get poverty to uplift and so on.

> Also, the direction currently is towards stagnating wages and growing wealth inequality.

The problem with such nice catchphrases that are repeated over and over by interest groups is that they are inaccurate, and often end up advocating for even higher inequality.

> The problem with such nice catchphrases that are repeated over and over by interest groups is that they are inaccurate, and often end up advocating for even higher inequality.

What specifically is an "inaccurate catchphrase" in what I've said?

Stagnant wages are the cause of multiple effects, many of them that are extremely localized. The US has had this effect, but the world has had it go extremely upwards in the last 5 decades. And along lower wages, have come increased value. The internet, for example, is super cheap and might not count as much into the budget of a person todaY: but tv and entertainment was a much higher cost between cable, newspapers, etc etc.

Smartphones, safer cars, cheaper travelling. Have to be very careful to look only at nominal bills to make economic judgement.

And maybe the most problematic and expensive things americans suffer generationally, housing and healthcare, are the defacto most intervened and regulated markets of all. It is the state, in its magnificent regulatory capture, that its pushing poverty unto people.

Also inequality has always been a topic of conversation, what is new is income inequality, and its still an open problem, not something there is economic consensus about. There are other things that have economic consensus, for example, getting rid of corporate taxes. But you dont hear that coming from "high inequality and stagnant wages" guys.

So "stagnant wages" was what you called an inaccurate catchphrase?

>housing and healthcare, are the defacto most intervened and regulated markets of all. It is the state, in its magnificent regulatory capture, that its pushing poverty unto people.

I won't defend much of anything about the state of housing or healthcare in the US. The government is certainly a huge part of the problem, I have no issue accepting that.

Here's the thing: I don't think that all government programs are good. Some are designed to push poverty unto people like you said. But the solution isn't to get rid of all regulation or the idea that government can be used as a tool for the masses.

We need to have a government that is much more aligned with the interests of the people than the interests of large corporations and capital. To me the way to do that is to expand the limits of democracy to include how the economy is run, how natural resources are used, and what the relationship between capital and workers should be.

Expand the limits of democracy as a way to vote expropiation?

When democracy is used to plunder, there is no way back. It will be living for the purpose of robbing others, and the poor have never fared well in such systems.

We live in a world with relative freedom but still very constrained. Look at the US spending 25% of its GDP through the state. And european countries reach 40 and even 50%! Half of every thing produced consumed by the state. The State is the enemy. It really is.

The most positive effect I can imagine is people being stroung enough to resist the powers of states and pit them against each other. The most scary future I see is the collaboration of countries. Concentration of capital is bad, but concentration of power is the true danger. And the State garners its concentration with the power of might.

What has more concentration of power, monarchies or representational democracies?

I'm suggesting that we can create a new form of governing that further decentralizes power.

Democracies are not powerful with a strong central government. If everyone votes something the state cant enforce, it would be pointless.

>had marx seen the soviet union at its prime he would have probably revised his own theory.

Actually I don't think so. Even Marx saw that socialism was a stage of history which followed from capitalism. In the same way that feudalism's aristocracy provides the conditions which create a merchant class that eventually overthrows the aristocracy, Marx sees capitalism and capitalists as providing the conditions which create a working class which eventually overthrows the capitalists. He would probably be annoyed with the soviets for trying to skip most of a phase and he would probably be annoyed with us, modern westerners, for not recognizing where in history we are - with rising inequality, increasing productivity but stagnating wages and the general increasing returns to capital.

>Marx's reserve army doesn't hold water.

Doesn't it? With chronic unemployment persisting since our most recent crash and now that we're finally reaching low unemployment ten years later, wages haven't moved much. If you explained the idea without mentioning Marx I think most people on the street would intuitively agree.

You don't think stagnation in wages can be attributed to the massive increase in women in the workforce?

Supply and demand, after all.

Overall I think the point is who cares what caused an increase in labor supply? It doesn't matter from where Marx's reserve army originates, just that capitalists desire and ensure that it exists to the detriment of the working class.

You really think that women as a group qualify as a reserve army?

Again, the composition of the industrial reserve really isn't the point. They're the able to work and unemployed. Whether we have at times integrated previously unused reserves on the basis of race or gender or class is basically irrelevant. The point is the fact of the reserve - that it exists. Look at 2008 on, we've had quite a substantial reserve with quite a diverse composition. But it's there, ensuring that wages won't rise (or rise much) during the boom times.

Perhaps we might have a better discussion if you told me what it is you're actually driving at because I'm not quite sure I see it.

It might have had some effect but decline in Union membership and collective bargaining power are much more important. After all, we're seeing record profits and a massive transfer of wealth to the top 1%. If workers could effectively organize, the increase in workforce wouldn't matter.

Ridiculous, thats not how unions work. Look at the history of argentina, where unions have constitutional protections, and tell me thats what help grow the economy.

Unions can only raise a workers wage in two ways: by increasing productivity (which they seldom do) or by restricting the amount of workers.

I don't really know anything about the situation in Argentina but I don't think Unions are an unequivocal good no matter what form they take. Unions in many cases have leadership that don't have the interest of the workers at heart. What I really mean is that workers organizing together and using collective bargaining is a proven way to increase worker conditions and pay.

  leadership that don't have the interest of the workers at heart

  workers organizing together and using collective bargaining

So what you're saying is we need decentralized unions on the blockchain?

Uber for Unions :)

That was a result of the incorporation of one of these reserve armies. Over time, new centers of industry will be born to serve the decentralized burbs that aren't cost-efficient to serve by existing infrastructure and the cycle repeats. We just happen to be living in one part of the cycle.

They do account for some, but not for all the changes. This is significant though, and often avoided to be spoken because of its pseudo-sexist interpretation.

He would have revised his economic modeling I mean, not his historical argument which is still sensible to me, albeit potentially irrelevant.

I dont think the reserve army makes any sense in todays world. But it did in his were labor was so interchangeable that people migrated for labor in masse all the time. I dont think out of work janitors put a lot of pressure on software engineer jobs. That unemployment in general drops wages, or that full employment increases wages, is a much older concept than Marx's.

The model said that

> large reserve of under-employed workers, or people who didn't previously participate in the labor force, is what enables the most exploitative jobs

This still holds.

> The model of exploitation they have cannot possible account for that.

No, what accounts for that is access to incredibly cheap energy, in the form of fossil fuels and electrification.

Energy is what lifted people out of poverty, not any of that other nonsense. Without coal, oil, and hydro power, most of us would still be subsistence peasants, regardless of whether or not we would live in Communism, Feudalism, Capitalism, Fascism, or some other -ism.

Out of curiosity, what is your model for the dramatic examples of India and China, which were faced with relative stagnation and incredibly dire, largely-intractable poverty for decades after WWII; followed by liberalizing (incrementally) their markets and explosive growth+massive declines in extreme poverty thereafter?

I don't know a ton about the economic history of these two countries, but prima facie this seems to belie your claim that it was simply energy availability.

There are counter examples to India and China that resulted in high standards of living without liberalizing markets, generally from valuable natural resources and low populations. There are zero examples without access to cheap energy.

PS: The China boom looks 'good' mostly due to how terrible the country was run prior to that. Expand the time scale and compare to other countries and things don't look nearly as good.

India's explosive growth [1] followed electrification, not lead it. [2] It's 'intractable poverty' following WWII was only 'intractable' because of colonial exploitation - the British Empire squeezed it for cheap resources, labour, and wealth (By forcing Indian markets open to imports, and by banning some forms of local production - Gandhi's salt march was an example of resistance to that.) At the same time, the empire did not actually invest in the same kind of infrastructure that Europe enjoyed for close to a century.

China's a bit of a different case - but for contrast, compare it to the USSR. Despite three decades of war, civil war, near-genocidal purges, and some more war, by the 60s and 70s, it has lifted millions of people out of a similar level of intractable poverty. Again, not on the back of its economic system, but on the back of industrialization.

It's hard to stay poor (Compared to world poverty in the 1800s) when you have running water, indoor plumbing, and electricity.

[1] https://tradingeconomics.com/india/gdp-per-capita

[2] https://www.slideshare.net/ashishverma061/growth-of-electric... - Slide 16.

> It's 'intractable poverty' following WWII was only 'intractable' because of colonial exploitation - the British Empire squeezed it for cheap resources, labour, and wealth (By forcing Indian markets open to imports, and by banning some forms of local production - Gandhi's salt march was an example of resistance to that.) At the same time, the empire did not actually invest in the same kind of infrastructure that Europe enjoyed for close to a century.

You are extremely confused about the history here. The British left India in 1947; WW2 ended in 1945. India and South Korea had a similar GDP/capita in 1950; they were on opposite ends of the spectrum 50 years later after 50 years of a wide GDP growth gap (during none of which time did British India exist).

I believe more than most people in the path-dependency of politics, especially with respect to things like colonialism. A lot of the sclerotic, Soviet-influenced, bureaucratic strangling of the Indian economy during this period is at least partially attributed to (reasonable) democratic political backlash against the abusiveness of the British economic system, in the form of eg labor laws that have been harming the economy for half a century.

Energy wasn't sufficient, but it likely was necessary. That said, the energy was lying around all through history, so something exogenous got people to use it. And to develop the technology to do so.

> so something exogenous got people to use it. And to develop the technology to do so.

That was James Watt's steam engine, which was efficient at turning combustion into mechanical motion, and it was happenstance that it was invented in 1780, and not 1580, or 1980. People didn't suddenly develop a need to move heavy things in 1780 - it came around then because of advances in steelwork, precision manufacturing, and general refinement of the idea (Such engines were around for over a century, but were not compact, or efficient enough to be very useful.)

All of a sudden, the labour of a coal miner was enough to feed a 10, then a 50, then a 100 horse-power engine. It was the AGI of its era.

Though why were they in development? This article says an early one was developed in 1698, to pump water from a coal mine:

http://www.his.com/~pshapiro/steam.engines.html

Why was there a coal mine? Why not use wood or charcoal? Why didn't the Romans go down this path? They invented a toy steam engine.

These things have many causes. Obviously watson's invention was a big inflection point.

But, as for the question "were liberal markets necessary?" my suspicion is yes. But, I don't actually know. I think the answer begins before James Watt.

Because people have been trying to invent ways to mechanically augment human power since someone had the bright idea to make a lever.

Why the steam engine did not succeed because Watt, was because the same reason that tri-deck galleons and gunpowder did not exist in the bronze age. Non-trivial practical inventions require a massive pyramid of other non-trivial practical inventions, each of which requires a pyramid of other non-trivial inventions, all of which have to solve a contemporary problem - cheaply then their alternatives.

If liberal markets were necessary for the invention of the steam engine, why was it invented in England, and not in Renaissance Italy? It had liberal markets, access to capital, and was a center of technological and cultural progress for hundreds of years.

There's no particularly satisfying answer to that, other then 'happenstance.'

Right, this is close to my model too, but it's in contradiction to the GP claim that energy is the reason and economic structures are behind the point.

It's almost tautological to say that energy is behind growth, but it's also independent of economic structure, which effectively boils down to "the manner in which we convert energy to utility".