Capitalists or Cronyists? | Hacker News Reader

Capitalists or Cronyists?

profgalloway.com

54 pointshliyan18 comments

This is a good point again, in the same line of reasoning as the Social Capital commentator.

If we don't allow businesses to fail now and again, there's never an opportunity for young people. Everything will always cost too much to be able to afford doing something on your own.

Case in point is myself. Shortly after uni, I worked for a hedge fund that grew to a billion dollars. The boss took a huge bet that went wrong during the GFC, and I ended up starting a new firm with a few other guys, using what I'd learned as well as the reputation (it wasn't the same kind of trading) to a new place, giving me a much bigger stake. If the boss hadn't screwed up, I'd still be an underling, the opportunity cost of leaving would keep it that way.

A similar story can be made for non-labour assets. I'm sure there's some smart operators in the airline industry with some ideas about how to run an airline business. But if we bail out the airlines, he can't buy the planes/landing slots cheaply, and most of the staff will correctly guess that their jobs are safer with the old airlines. And they will be around to compete with Airline 2.0.

Same in every other business, from mom and pop restaurants to investment banks. The forest fire is an opportunity for saplings.

There is an argument that if a business was okay before the pandemic and would still be okay after the pandemic, maybe it should survive the pandemic, because new businesses aren't that easy to build. If it's not okay after the recovery, let it fail then.

A counterargument might be that starting over isn't such a bad thing, as long as the former employees are taken care of.

I expect that it depends on the business.

People probably will argue that but it has some weaknesses. If a business was okay before and expected to be okay after a crisis then its creditors probably will let is survive the crisis.

It is appropriate for the government to act in the short term (especially while enforcing quarantines) to make sure everyone can feed themselves and nobody is left homeless. But business bailouts are fundamentally silly; capitalists are more than capable of keeping a business alive on life support if they think good times will come again in 6 months.

Capitalists and bankers are self interested, not stupid. If given any freedom to make choices they aren't going to shut down a good business because the government shuts things down for 6 months.

There's a funny thing about a market panic: the creditors disappear. This has little or nothing about the strength of the business in normal times.

The pandemic has made the situation binary for most businesses; either shut down if non-essential or face an abnormal surge of demand if they supply basic goods. Although credit might help neither of those cases requires new creditors.

The former case does require relief from their existing debts. Any existing creditor who insists on payment isn't going to get very much out of the situation vs. one who lets them off the hook for 6 months and then has a viable business paying back their debt. Deals would be worked out.

Creditors are looking to maximise their return. If a business is likely to bounce back after a temporary blip then they aren't going to insist on payment now.

Not to say it won't hurt; but someone has to be hurt in all this and the social contract is that the people who get hurt when the economy collapses are capitalists not taxpayers. The businesses would by and large survive.

I have a feeling that the same article could have been written 100 years ago, and still would be correct. (And even 200 years ago, Adam Smith was writing in the same vein, that we should have a meritocratic system, not cronyism.)

I think that capitalism, in the sense as described in the article, has always been just a dream, and never historically accurate. What actually somewhat changed it was adoption of social democracy as a response to the Great Depression (and the rise of USSR to some extent).

Social democracy is still fundamentally capitalism. Adam Smith was a left-wing radical living in a transnational period period between feudalism and capitalism where the main Tyrannical force was the state - now that has changed to corporations.

Whether you're left or right wing economically, it's an accepted fact that capitalism has a cycle of boom and bust built into it. Right-libertarians (e.g. The Democrats and The Republican Party) believe that this can be avoided by freeing the market by removing deleterious incentives, centrist Keynesians (e.g. FDR with the New Deal, Bernie Sanders) don't trust capitalists to self regulate and instead accept the cycle of boom and bust, but try to avoid the social unrest by smoothing out and mollifying the crises, and left-libertarians (e.g. John McDonell, Richard Wolff, Paul Cockshott) try to eliminate the cycle of boom and bust, much like the right libertarians.

This framing (e.g. of Democrats as economically right) may be provocative to Americans, but is natural in the rest of the world. I'm Australian and Bernie Sanders is to the right of our right wing party.

The Great Depression and the fact that vast quantities of capital were annihilated in two world wars which seriously reduced the power of those who own society.

There is another point you hint at that I want to underline: nations freely use ideological rhetoric to hide the same thousand year old wealth patterns. China is not communist, N Korea is a kingdom, the NSDP outlawed and jailed socialists and, as the article points out, social mobility in the US is fought by the ruling class at every opportunity.

> Letting firms fail, and share prices fall to their market level, also provides younger generations with the same opportunities we, Gen X and boomers, were given: a chance to buy Amazon at 50x (vs. 100x) earnings and Brooklyn real estate at $300 (vs. $1,000) per sq. ft. Just as we pretend our service men and women are heroes, and then treat them like chumps, CNBC advertisers and Peter Navarro want to pretend they give a sh*t about younger generations so they can protect the wealth of old people and management/advertisers. Enough already.

Scott Galloway often refers to this "wealth transfer" from the young to the old in his writing. I think it is an interesting idea and seems to be somewhat novel.

"If you're seeing this message, that means JavaScript has been disabled on your browser, please enable JS to make this app work."

How annoying.

Does anyone have a link to a plain text version of this article, or at least something that doesn't require javascript to read?

If you want to incapacitate yourself out of some irrational hatred for a programming language instead of just employing a tracking blocker like uBlock Origin, you kinda have to live with the consequences.

It's not irrational to not want to run arbitrary, poorly sand-boxed code just to read some text.

Enabling javascript means exposing myself to:

- javascript vulnerabilities

- tracking

- ads (which themselves are well known vectors of malware)

No thank you.

That's why he mentioned ublock - to prevent ads and tracking.

I do run uBlock, but it can't catch every novel JS tracking or advertising mechanism, while disabling JS can. In addition, I prevent exposure JS vulnerabilities and malware.

This is defense in depth, and has nothing to do with hating JS as a language, and everything to do with a desire for more security and privacy.

I approach defense similar to Swiss cheese model. You can't cover everything at every level, but if you have multiple levels, the probability of failure drops significantly.

You can decide not to drive a car in order not to die, at the cost of inconvenience and money because now you limit your options for groceries etc, and you limit the fun you have because your travel options are limited.

> some irrational hatred

Wasn't there a time when webcrawlers struggled to read such a site? And isn't there still at least a slight risk of being unindexable?

Regardless; the article is a page of text. It is pretty much exactly what the use case for HTML was envisioned to be. Even if people aren't browsing the web the way you want them to we should all take a moment of silence in awe of whatever fool butchered their site design so badly that it requires JavaScript to display formatted text.

I do hope Dr. Galloway didn't put money into this botch-job of a personal website.

Here is a sed solution.

cat > wp.sed

      1i\
      <pre>
   
      s|\"post_content\":\"|&</pre>|g;/\"comments\":/s||<pre>&|
      s|}]}|&</pre>|;s|{|\
   {|g;s|&lt;!-- \/wp:heading --&gt;||g;s|\\n||g;s|&amp;nbsp;||g;
      s|&lt;p&gt;&lt;em style=&quot;color:#7f7f7f;font-size:smaller&quot;&gt;||g;
      s|&lt;\\/em&gt;&lt;\\/p&gt;||g;s|&lt;!-- \\/wp:paragraph --&gt;|<br>|g;
      s|&lt;!-- \\/wp:image --&gt;||g;s|&lt;!-- \\/wp:heading --&gt;||g;
      s|&lt;!-- wp:paragraph --&gt;|<br>|g;s|&lt;p&gt;||g;
      s|\\u2019|\'|g;s|\\u2026|...|g;s|&lt;\\/p&gt;||g;s|&lt;p&gt;||g;s|\\u201c|\"|g;
      s|\\u201d|\"|g;s|\\u2014|--|g;s|\\u2018||g;s|&lt;!-- wp:heading --&gt;||g;
      s|&lt;|<|g;s|&quot;|\"|g;s|&gt;|>|g;s|\\||g;s|",\"|\
   &|g;s|comment_content\":\"|&</pre>|g;s|\",\"comment_approved\":\"|<pre>&|g;


   curl https://api.profgalloway.com/wp-json/pg/v1/nmnm/slug/capitalists-or-cronyists |sed -f wp.sed > wp.html

   firefox ./wp.html

Reply on news.ycombinator.com