https://medium.com/@CitationsPodcst/episode-45-the-not-so-be...
Entrepreneurs don't create value, labor does. Entrepreneurs seed and lead organisations that direct labor towards profitable activities.
Bill Gates took a certain level of risk, yes. He also had a strong financial safety net and head start by sheer circumstance of his upbringing.
Unless every employee throughout the lifetime of Microsoft was compensated in actual proportion to their contribution to the overall profit of the company, Bill Gates didn't derive his wealth from his contributions but simply from those of his employees.
We have a cultural norm of hero worship but Bill Gates wouldn't be where he is if he had paid everyone their fair share. The reason we don't consider this is that we consider this to simply be how businesses operate.
As but one problem: Microsoft employees, especially the early ones, don’t strike me as particularly good examples of abject victims of capitalism.
Kinda makes sense, but the last bit regarding fair share is probably more complicated. Weren't the early employees at MS given stock options and many became millionaires?
How should new employees who joined 10 years after MS's founding for example be fairly compensated (as they didn't contribute to reaching escape velocity)?
What you're proposing is just socialism that takes away power from the individual. That never works. You have no way to judge what the fair share is or what contribution someone actually made and thinking that you know how to value someone's life better than they do is just attempting to place a moral to be morally better than they are.
Also you might want to talk to the early employees of Microsoft who are millionaires, or any employees today who are highly paid with stock grants that give them a piece of the company, and most importantly talk to the billions of people who are living a little easier after the eradication of Polio thanks to the Gates Foundation.
Why $10 million? What about in countries outside of the United States? What if a wealthy person has a single asset that is worth more than $10 million and has one kid? ex: a $50 million commercial building. Would you force a sale of the asset and then strip away $40 million away?
What about lottery winners who win over $10 million? Should lotteries be capped at $10 million?
Those who invest or conspicuously splurge are a boon to the economy and to workers.
If a wealthy person and all her descendants save their money forever, then there's no harm to the economy. The money is just numbers in a computer, nothing concrete. (Politically, it could be dangerous, since there is always the threat that they could spend it.)
If she spends it digging holes, on the other hand, then that's wasting real resources. It employs people, yes, but in a pointless task. Their labor could have been better deployed.
There's obviously a continuum, but $100 million yachts are probably closer to the digging-holes side of the continuum.
(But maybe not. For example, spending $10 million on a painting for that yacht has very little real effect, since aside from the purchase transfer overhead, it is mostly moving numbers from one bank account to another.)
This is why communism _always_ fails. Every attempt at a top-down control of the entire economy will lead to failure. The economy is too complicated and chaotic for that to ever work.
I believe in this day and age we know a lot of things we didnt’t at the start of industrialization.
As soon as someone starts talking about keeping mindful about consumption they somehow end up being supportive of full blown communism.
Looking at the state of our earth you could easily say that capitalism doesn’t work, at all. It’s more nuanced than that though.
i look at north korea then i look at south korea. if capitalism doesn't work, at all, then communism must negatively work.
My comment was simply that you can question the state of capitalism in the world today without suggesting that communism should take it’s place.
P.s Also, have a talk to the insects, polar bears, cheetahs (only 7000 of them beauties left), etc.
Out of whack and out of balance.
On the other hand communism typically suffered from stunted innovation, outside of targeted areas, so they probably would be worse off, if they didn’t import tech from non communist states.
Most good stuff arises from public funded research imo. How and why? Because it’s down to individuals that are allowed to do their thing.
This gets stiffled in a short term, for profit organization. What we’re left with is often conservatism. Too many big orgs with big money simply want to keep things as they are, and it’s clear (or should be to everyone) that this is not wanted or sustainable.
Regarding man earth balance it’s currently down to over consumtion by us in the west.
As your average Swede I consume approximately 4 earths worth of resources. We either changes this behaviour volontarily or bad things will happen eventually.
There’s a lot of power in those piles of cash though so anyone that want’s to change anything is in for a tough fight.
Also, morality... you probably consume stuff originating from sweat shops and child labour.
We’ll it’s not our children!
Lot of high horses in the ”west” unfortunateley.
A critical comment regarding the state we’re in does not make me wish for a full blown totalitarian regime.
Marx was a philospher and writer with some points however, and I doubt he personally would appreciate what went down with Lenin & co.
It’s all about balance, and right now the balance is off by quite a bit.
The problem is that capitalism has turned in to ”consumerism”.
Not sure how to crack it, but in a way it’s a bit like a new enlightenment phase needs to take place.
If we had a marginal tax rate of 100% for all profits beyond $10 million, would that be communism? If we banned the sale of certain consumer goods, would that be communism? If we banned the private ownership of certain consumer goods, would that be communism? If we mandated shared ownership by all employees of businesses exceeding a certain size or revenue, would that be communism?
If so, how is the criticism of centrally planned economies relevant? If not, why are you talking about communism?
There are gazillions of ideas other than "let the government control the entire economy" (aka state capitalism) or "let the winners of the free market do what they want and f* everyone else".
You're not one of those that's still waiting for real communism to be implemented, because all the other attempts were done all wrong, are you?
>You're assuming the only alternative to laissez-faire capitalism
Where did I argue for laissez-faire capitalism? Pretty sure I only made the case for a market economy.
>why are you talking about communism
OP didn't make a case for regulating certain products or industries. OP made a case that individuals choosing how to spend their earnings is essentially misaligned societal resources ... as if they knew better.
>If we mandated shared ownership by all employees of businesses exceeding a certain size or revenue, would that be communism?
Yeah, you're on your way now. There are many Venezuelas on the road to Soviet Union.
You still haven't given an argument about why "conspicuously splurging is just a waste of resources" and "there's obviously a continuum" means "state capitalism now", though.
You also haven't bothered explaining how "every company beyond a certain size or revenue must be organised as a worker's cooperative" leads to state capitalism (or whatever you're trying to express by invoking the Soviet Union as the scary end), but I'd be fine if you at least bothered actually addressing the OP you replied to rather than just a strawman.
To reiterate, this is what you say you replied to:
> individuals choosing how to spend their earnings is essentially misaligned societal resources
(and also, more implicitly "OP thinks OP knows better how those earnings should be spent and therefore advocates a centrally planned economy, i.e. state capitalism")
This is what you actually replied to:
> Conspicuously splurging is just a waste of resources.
> If a wealthy person and all her descendants save their money forever, then there's no harm to the economy.
> If she spends it digging holes, on the other hand, then that's wasting real resources.
> There's obviously a continuum, but $100 million yachts are probably closer to the digging-holes side of the continuum.
Note that this is a refutation of the GP:
> Those who invest or conspicuously splurge are a boon to the economy and to workers.
I don't see how you can go from "rich people splurging are not actually great for the overall economy" to "state capitalism now", yet that is your interpretation.
OP didn't say "rich people shouldn't be allowed to waste resources", OP only said "rich people wasting resources is bad". There's an obvious solution that doesn't require controlling the entire economy: increase marginal tax rates to reduce wealth gain and make it harder for millionaires to become billionaires.
But I suppose that too inevitably leads to the Soviet Union?
I'll agree with this statement on capitalism. But we know communism is a disaster. That won't change.
all forms of economic transaction involves transferring money from one account to another. conspicuous splurging is a waste not in itself, but because of the opportunity cost of instead spending that money on capital investment, which will lead to higher production and consumption in the future for more people. if a rich person has extra money, he can use it to pleasure himself, or he can spend it on investment, hoping to make even more money. if he were to buy machinery for example, that would mean higher production and lower price, and many people will benefit from that. the aggregate benefit is higher in the long term.
but the goal of an economy is to allow as much conspicuously splurging as possible over the longest time possible. it is clearly utopic to have a society with such surpluses that everybody can own 10 space yachts, endless supply of the best food etc.
Actually I think so. I would prefer if more people won a modest amount vs. one person winning tens of millions with a large jackpot.
If buying a lottery ticket is a waste of money then all forms of entertainment are.
EDIT: Okay, fine, here are citations:
https://en.wikipedia.org/wiki/Gambler%27s_fallacy
No.
Plenty of householders or businesses have to sell an asset to settle some debt or tax bill, why not estate taxes?
Of course we might have to bring back capital controls for it to be functional.
In your best case scenario, where you actually successfully enforced this ludicrous policy, it would create ugly incentives for the government (or corrupt agents in the government) to profit from an untimely death of the self-made billionare. In this scenario, the murder of Jeff Bezos would lead to the nationalization of Amazon.
More likely, however, it would incentivize massive tax evasion, with schemes being cooked up to move money offshore as quickly as possible.
Having said that, I don't think there's any question that this policy would lead to massive tax evasion. Not including all the fun societal unintended consequences we can only speculate about ... and all for what? To punish some trust fund kids OP is bitter against?
there's incentive for the government to assisinate billionaires and forge wills that donate the whole shebang to the government.
and yet, they don't do this? it can't be a great incentive
https://www.cnbc.com/2018/03/05/who-is-jennifer-gates-bill-a...
I doubt we'll ever see another effective organic revolution in any developed nation because people in general no longer have the chutzpah for the actions required to change a government that doesn't want to change, and because we've all become contented from that pale white glow in front of our faces for ever longer fractions of every single waking moment. There's also the effective division of society. Two sides increasingly hate each other which means if either side ever crossed that invisible line, the other side would suddenly become hugely pro-government.
There are also some economic changes that mean France's situation would never be replicated in a place such as the US. In particular money no longer has any real meaning. It's not backed by anything and governments can 'print it' (not how most money is made, but that's another topic) to no end. The only real constraining factor is perception. So long as your people and other nations agree to believe your money has value, then it does. This is how we can spend trillions of dollars we don't have on wars, be $22 trillion in debt that nobody expects will ever be paid off, inject huge sums of money in the market to artificially inflate it and call that 'growth', yet still have an ultra-premium rated currency.
This is also why 'helicopter money' [1] is thought to be a good idea * . You print money, load it up on a helicopter, and then drop it down to the people. The asterisk there is because it's a good idea only if people don't expect it to be repeated. It all goes back to perception. Keep dropping the helicopter money and people stop believing in the value of the dollar and so it indeed loses all value. This is, as an aside, a major issues with things such as a basic income. We could easily 'afford' it. But you very much are risking a perceptive change on the value of the dollar with such systems in which case all that money you're tossing around becomes worth about as much as the beads at Mardi Gras. And tossing even more only trends towards hyperinflation.
The point of that aside on money being that France lived in a time where there was a fixed amount of money and their government was wasting that money. Today our governments waste money like never before but it has less effect on the common people since governments don't need the amount spent to be less than the amount 'earned.'
As much as they want. Without estate or gift taxes, either.
OTOH, it should be taxed as normal income to the recipient (as should capital gains), though to avoid excessive taxes on non-repeatable windfalls, there should be mechanisms both for recognizing and paying taxes on advance of realization and spreading taxes one incoe over several years after realization, with some limits on the latter.
And several higher tax brackets should exist above where the current maximum kicks in.
So?
> He was an ardent supporter of heavy estate taxes
Yeah, so what?
Heavy estate taxes are a not-horrible band-aid over not adequately taxing the income of rich people as income, but it's better and simpler just to tax income appropriately.
The fact that some rich people like heavy estate taxes doesn't really change that.
As much as they want/can.
> Trust fund babies only help yacht builders.
But it does convince the parents to build useful companies, provide useful services etc
As much as they fucking want. The rationale for taxation is the idea that you owe your government money by using up public resources (such as national defense, public works, emergency response, etc.). That's why you get taxed for activity such as buying stuff and earning a living. Dying doesn't use up the government's resources. You don't need the government's protection and assistance to die without interference.
Just lay your motives naked and talk about expropriating property from the rich without compensation. That's what estate taxes are, just with extra steps.
If this were the case, then everyone would be taxed equally. People with more money have always been taxed more (at least in the U.S).
Wrong.
There is nothing in socialism that prohibits you from owning things.
I'm gonna need some help figuring out how "means of production, distribution, and exchange" can't be expanded to include almost all private property.
If you're the product of the US education system then I can't really blame you. The the meanings of well-established political terms are completely warped into something else over there.
EDIT: Since HN rate limits me again, I'll just reply here:
The difference between private and personal property isn't about the thing so much as the use and intent. If you own a toothbrush for personal use, that's different from owning a toothbrush factory for producing toothbrushes you sell for money.
Only land and natural resources can be treated as something different in a sensible way, but that's explored in georgism, geolibertarianism and similar philosophies, not socialism.
Are you so envious and bitter that the idea that some people get given large amount of money is so painful to you that you think it must be forbidden?