The Capitalist Road to Serfdom | Hacker News Reader

The Capitalist Road to Serfdom

jacobin.com

39 pointsiForgotMyPW87 comments

> Today, the world’s biggest companies not only wield monopolistic power and exert considerable political influence, but in many cases have market capitalizations exceeding the GDPs of entire countries.

Comparing market capitalization to GDP makes no sense. Comparing revenue to GDP would be more appropriate.

I read it as saying, “there are state economies that, even surrendering all of the goods and services they’ve created and provided in a year, cannot exchange them for the full market value of some companies.”

Hasn't that been the case for at least a hundred years? I'm no economy historian, but I'd expect e.g. Liechtenstein's or San Marino's economy to be smaller than some company's market value since essentially their independence.

All that comparison really does is acknowledge that there are countries of vastly different size and wealth. Large companies from a giant nation will be much larger than a tiny country.

The size of some companies can be taken for granted. Living in a western industrialized country with many large companies, it’s easy to lose a sense of scale. The comparison widens the lens and grounds business organizations within the context of other human organizations e.g. the state. The comparison is also a setup for the next paragraph:

> One reason that’s significant: if many multinational companies actually were countries, they would be authoritarian dictatorships more ruthlessly efficient than any in existence. At many such companies, managers wield virtually unchecked power over subordinates and, thanks to modern technology, increasingly practice advanced techniques of monitoring and surveillance as well.

The missed distinction, of course, being that companies like Amazon don't send workers to penal colonies for forced labor, don't built walls to prevent them from leaving, and don't kill dissenters.

So not much like an authoritarian dictatorship at all.

Using those three characteristics as necessary conditions for authoritarian dictatorship excludes many actual historical authoritarian dictatorships as well.

Of course, in the context of layoffs, Amazon does effectively deport workers who are on employment-tied visas. In a sense, Amazon is sentencing them to "transportation if you can't find a job in a bad job market."

Yeah, but it compares companies from a state/economic zone of 300m or 450m people to a state of 4m people.

Sure, yeah, but that's like comparing a city of a 1million to one of 10k inhabitants and pointing at the much larger usage of construction material in absolute terms. Technically correct but ultimately useless.

If there's a company in the US that has a larger market cap than the US, that would make it more interesting. But even Apple is barely a tenth of it, and that's comparing the expected total future wealth of Apple to a year's worth of output of the US.

I'm not sure what comparing a year's amount of oranges to all future apples really tells us.

It’s useful in the argument that (1) states, as they’ve grown in size have also been reigned-in due to the power that comes with their size, and (2) that companies, as they grow in size, must be reigned-in due to the power that comes with their size (anti-trust, anti-monopoly).

Metaphors are useful but they can also just confuse the issue through unnecessary abstraction. The fundamental question is already there at the surface: it’s not about market capitalization or about gdp, but about the power that size in either metric represents. That’s the characteristic binding these two dissimilar ideas together.

I was just reading something on Medium about this wrt Apple

That may be an accurate way to read it, but I’d bet that people just casually reading through it will breeze past that comparison and take away “these companies are bigger than most countries”.

Which, of course, is a comparison that Jacobin is more than happy to let slide. Jacobin’s own description of itself is “Jacobin is a leading voice of the American left, offering socialist perspectives on politics, economics, and culture.”

Maybe, but I’m cautious about assuming my own superiority, i.e. that my lonely cohort and I are the only ones able to read and infer the proper meaning from writing, and that others are too easily misguided.

It's just an analogy, to show the vast scale of modern multi-national corporations. It's like when they say "If you lined up all of [X] in a row, it would encircle the Earth [N] times." Nothing more than an analogy. [X] never actually encircles the Earth. Some people are taking this analogy a bit too seriously.

The point is that these corporations have an unprecedented amount of market power, and as a result, political power too. Which makes it even more problematic that corporations are inherently non-democratic and don't answer to anything except profit: "By design, the corporation is not a democratic enterprise. Its management is hierarchical..."

Corporations are not exactly like authoritarian countries. Nobody is dumb enough to think that. It's just that there are some troubling similarities.

It's a bad and misleading analogy, because most readers will understand it as "companies are richer than countries"--which is probably exactly the feeling that Jacobin wants to evoke. I wouldn't accept such an analogy from a right wing news source (Fox News, say), and I won't accept it from a left wing news source.

To build on your analogy, it's like saying "if you laid all the people in the world in a line it would circle the globe N times" but not mentioning the fact that you're lining them up belly to back instead of head to toe.

We should hold ourselves to a higher standard.

> most readers will understand it as "companies are richer than countries"

Says who? You're not giving readers much credit.

No, I'm not. Most people don't understand the details of either corporate or national accounting, and the very important difference between an annual production measure like GDP vs a total market value measure like market cap will be lost on them, especially in passing.

Again you're speaking for "Most people" with no empirical evidence or polling.

Let me take a turn though: "Most people" aren't reading a Jacobin article at all. The only relevant audience is the readers of this article.

Unfortunately readers of Jacobin are perhaps particularly unlikely to understand the details of corporate and national accounting.

You're one of them.

Only in passing.

Thereby admitting that you actually know nothing about readers of Jacobin, and your slur was completely unjustified.

Bad reasoning. I bet you don't watch Newsmax, but you probably know some things about people who watch Newsmax.

I wanted to make a joke about it being exactly the kind of reasoning a Jacobin reader would use, but I'm refraining.

> I bet you don't watch Newsmax, but you probably know some things about people who watch Newsmax.

I don't, and I don't.

> I wanted to make a joke about it being exactly the kind of reasoning a Jacobin reader would use, but I'm refraining.

I'm not a regular Jacobin reader, "only in passing" as you say.

In any case, you're just spouting stereotypes invented in your own mind.

No, I've had enough Jacobin readers misinterpret Adam Smith to me to form an informed opinion.

Have you? How many, exactly?

In any case, it's not clear why interpreting Adam Smith (1723-1790) is an appropriate criterion here. Of course, I don't grant without evidence that you possess a correction interpretation of Adam Smith. FWIW (not much) I read The Wealth of Nations many years ago, though I don't claim to be a Smith scholar, and I have no wish to debate the matter with you. I just find it strange that you feel the need to drag him into this discussion.

> Have you?

Yes.

> In any case, it's not clear why interpreting Adam Smith (1723-1790) is an appropriate criterion here.

Because it speaks to both their reading comprehension and grasp of economics.

>> Have you?

> Yes.

You didn't answer my crucial follow-up question: "How many, exactly?"

> Because it speaks to both their reading comprehension and grasp of economics.

Not really. There's actually been quite a bit of work on that subject since the 18th century, if you hadn't heard.

What makes that follow-up question crucial?

The claim was "I've had enough Jacobin readers misinterpret Adam Smith to me to form an informed opinion." So the question is, how many do you believe is enough to justify the claim that your opinion is informed? Otherwise it would appear to be an unjustified overgeneralization based on extremely limited anecdotes.

"The print magazine is released quarterly and reaches 75,000 subscribers, in addition to a web audience of over 3,000,000 a month." https://jacobin.com/about

I would guess that the number you've had Adam Smith specific conversations with is one, possibly even zero, but unlikely more than two. After all, since you're an "Only in passing" reader, it's unclear how you would get into large numbers of conversations of any kind with large numbers of Jacobin readers, much less specific conversations about Adam Smith interpretation.

Your guess would be incorrect. One doesn't need to be a Jacobin reader to meet Jacobin readers.

Also you didn't explain why this question is crucial.

Obviously it's crucial, because keep avoiding it, refusing to answer, while defensively asking why it's crucial instead of simply answering. It's not like I'm asking for your social security number here.

I did actually explain why, though: "Otherwise it would appear to be an unjustified overgeneralization based on extremely limited anecdotes."

It's crucial because obviously it's crucial!

It seems this is how they are generally compared by economists? Revenue vs GDP doesn't really tell a good story. Wal-mart does not wield remotely the same influence as Apple, but have like 5x their revenue.

https://www.visualcapitalist.com/the-tech-giants-worth-compa...

The author of that piece is not an economist, he's a journalist with an undergrad business degree focused on real estate.

Influence is difficult to quantify, but Walmart certainly wields a lot of it. Just ask any of their suppliers.

  "...what may be attained by industrial or commercial success is still the nearest approach to medieval lordship possible to modern man."

source: https://www.panarchy.org/schumpeter/development.html

> If those companies were countries, they would be authoritarian dictatorships.

Although there are some fair points in the article, the main thesis that companies are countries is incorrect. Governments have a monopoly on physical force. Being fired is not the same as being thrown out of a country.

> the main thesis that companies are countries is incorrect.

That's not the main thesis. It's just an analogy.

> Thanks to current US labor law, many union elections are about as democratic as those held in banana republics — and that’s assuming workers are even able to initiate a union drive in the first place.

https://www.fordharrison.com/nlrb-general-counsel-seeks-to-l...

The NLRB has been trying to end “secret ballot” elections for decades, which is a scary name for “going into a voting booth and privately voting”. The reason being they want the name of each person who voted against the union so they can pressure them into voting with threats. Doesn’t sound very democratic to me!

Or so those who voted pro union can be later fired.

not if they have a union on their side

One thing I think is missing in this write-up is the element of autonomy. Yes, it's undeniably degrading that Amazon employees piss in bottles to make sure they meet their quotas. But: they aren't forced to take that job, or to piss in bottles (notwithstanding that getting fired often comes with serious consequences).

And I fully understand that putting food on the table (especially when it's for your kids) and putting a roof over your family's head is important, and needing to satisfy those needs is much easier than adhering to principles of not being subjugated, demeaned, and degraded. "Do I take the shitty Amazon job or do we move a few hundred miles in hopes of a better life" is a tough decision.

Hard problem. No easy solutions.

Sure, the solution is easy. Provide workers with more protections. Whether that is done through regulations, unions, or something else can of course be debated, but this is a very solved problem in most of the first world.

>But: they aren't forced to take that job

>And I fully understand that putting food on the table (especially when it's for your kids) and putting a roof over your family's head is important

I don't understand how you found these two sentences to be compatible.

Because Amazon is not (yet) the sole employer in our nation ?

Yet has taken out most competition and other employers in its market…

They basically are if you are an unskilled worker.

You could theoretically take a pay cut and work at a shop or something if you managed to figure out how to live without money.

if there are 100 job opportunities for a warehouse worker or delivery driver and 90 of them are Amazon doesnt leave much room for competition

There is some dark humor if one is again forced to look at the opportunities and finds many familiar places left previously.

Back when Dutch government was pretty much the only job agency companies offering such "opportunities" would be scrubbed from the list. If they send people there they just come back looking for work again. Not something the institution was willing to spend resources on.

I imagine one could explore something like a credit score with taxes that reflect what great employer you are. A piss bottle tax could bring in hundreds of millions in tax revenue. Perhaps it should be applied as a percentage CEO wealth, income and land tax. Or call it the asshole tax.

Multiple employers doesn't mean multiple jobs. It's not a cornacoupia where the average joe can just walk down an aisle and be like "hmmmm maybe delivery driver?"

in a lot of places it's starbucks, subway, walmart, amazon, or piecemeal construction work, and if those jobs are filled then you're SOL killer.

> One thing I think is missing in this write-up is the element of autonomy. Yes, it's undeniably degrading that Amazon employees piss in bottles to make sure they meet their quotas. But: they aren't forced to take that job, or to piss in bottles (notwithstanding that getting fired often comes with serious consequences).

How is it missing? It's right there in the article, almost word for word: "The inevitable rejoinder to all of this is that employment is ultimately voluntary: an Amazon employee who dislikes stringent work quotas or a supermarket cashier who refuses to perform their company’s spirit dance can always find gainful employment somewhere else."

What would alternative be? Worker run cooperatives have not been particularly successful so far. Serf had no choice of "changing a job" but a modern worker presumably has a lot more freedom to choose their employer.

The alternative would be to actually enforce antitrust laws and ensure that companies don't become as big and powerful as countries.

The basis of capitalism is competition. The theory depends on no single company having the power to move the whole market, but this theory is getting decimated by the empirical reality of consolidation and monopolization.

We all forget, because 9/11 happened literally a few days after it was announced, but the new Bush administration decided to give a wrist slap to Microsoft instead of breaking it up, which was the proposal of the Clinton administration. That's essentially when antitrust laws ceased to exist, and in the wake of the failure to do anything about Microsoft, mega-corporations and monopolies have thrived.

The basis of capitalism is private ownership of production, by definition.

The basis for why this is at all acceptable as a system to organize society is that competition, government restrictions, etc, whittle down private power to somewhat tolerable levels. There must surely be a better system which we haven't thought of yet though.

do you think capitalism would still be the base of that system?

It's complicated, but I think, no.

Many people, especially Americans seem to confuse capitalism with 'trade', 'competition', 'markets', etc, whereas I mean it as the private ownership of production, the profit from other people's work, etc. That seems fundamentally immoral in some ways from the very start.

Eg, I read an article about working with Elon Musk recently (https://www.businessinsider.com/working-for-elon-musk-spacex...), where they said "If there are employees not aligned with that vision, he will chew them out and he will do it in a vicious way, which is his right as owner.". I mean, no, we really should not be enshrining that, or even really tolerating it, in a decent society.

The question then is how should we allocate resources (capital), how should we incentivize risk, innovation, hard work, etc, What kinds of ownership are moral, etc.

I suspect we'll be stuck with some form of capitalism for a while though - like democracy, it's the worst system, except for all the others, for now.

interesting

On personal level, I would say FU money is a must - this should be the retirement plan goal for everyone, have enough for your life stile in liquid investments, so you can move to another country quickly if need be… On corporate level, maybe breaking of those de facto monopolies is not a bad idea, like breaking Ma Bell, Standard Oil, etc… Please note, this is not a financial advice, as I can provide advice to accredited investors only….

>Worker run cooperatives have not been particularly successful so far.

Common != Successful.

The fact we don't have many Mondragons probably has less to do with its intrinsic efficiency and more to do with pre existing wealth distributions.

>What would alternative be?

One change that Jeremy Corbyn put in his manifesto in 2017 was a law mandating one worker board seat for companies over a certain size.

I didnt think it was a particularly drastic change but it drove the big business lobbies into a fit of white hot rage.

do you think that would make an real difference? what about ending corporate lobbying and political donations?

Even with an egalitarian wealth distribution, who would want to invest only in the company they work for? That'd be putting all their eggs in one basket for no good reason. There are sensible reasons for outside investment to be a thing.

Does anyone have recommended reading on worker-owned corporations? How would it work in practice? Would it work? Are there any success stories?

I imagine that eg consultancies could be worker-owned.

Could a startup be worker-owned? How would that be different from a typical startup where workers receive stock grants? In the way they are governed?

Wikipedia is your friend

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

Not many success stories so far. A startup can be a cooperative but there will be no stock to grant. One worker = One vote. You can probably see why these things are not really popular.

A notable success story is the Mondragon Corporation. It's a federation of worker-owned cooperative businesses, and is the 7th largest company in Spain with billions in yearly revenue.

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

what industry is this?

From the Wikipedia link: "At the end of 2016, it employed 74,117 people in 257 companies and organizations in four areas of activity: finance, industry, retail and knowledge. By 2019, 81,507 people were employed."

Every startup is worker owned before it takes outside investment capital. Being worker-owned means either being limited to organic growth, or being forced to incur debt which is generally worse than giving up equity. It can totally work in sectors where capital intensity is very low, but it's a non-starter for businesses that are inherently dependent on large amounts of capital or predicated on quick initial growth.

The right wing characterization isn’t entirely unfair. The fact is if you remove all incentives for the investment of capital and still want growth from investment you need to centrally control capital to allocate it. This does create a large centralized authoritarian regime and while perhaps it doesn’t have to descend into meaningless elections it does seem to control the kinds of things we generally don’t want 51% of the voters to do the other 49%.

Just here to move the goalpost. Aaaand who's money are we going to take to publish our radical pamphlets?

I would have liked to see the author give more examples other than just Amazon. Apple, Google, Microsoft, etc.

More examples than perhaps the largest corporations in human history?

They only gave Amazon as an example. I was suggesting the other three much larger corporations that it did not give as examples that I'd like to see covered.

Amazon is such an easy target for any journalist

You put a period after Amazon, and then immediately listed three other names separated by commas. It's really easy to mis-see that as a list of four items separated by commas.

This article getting flagged is the confirmation that some points are valid

The article leaves me with an impression of trying to defend socialism and attack capitalism.

Yet when I read the text - it says that certain right-wing corners portray socialism as leading to authoritarianism, while at the same time being blind to the authoritarianism in corporations. But if authoritarianism in corps is bad, it's even worse at the scale of whole nations. So the final message seems to be "capitalism is bad, but not as bad as socialism"?

Weird take.

> So the final message seems to be "capitalism is bad, but not as bad as socialism"?

The message is that the power of individual corporations needs to be reined in.

First sentence of the article: "Some multinational corporations are now larger and more powerful than individual nation-states."

Later: "You could argue that in the earliest days of capitalism, something like the concept of free enterprise actually existed: firms of various sizes competed, with even the largest dwarfed in both size and influence by most nation states."

Also: "Unions can act as counterweights to the sometimes terrifying power held by management."

"an increasingly small number of ever-expanding corporate conglomerates dominate the labor market"

don't the big unions have some of the same power/control issues because of capitalism? a rich CEO of a union corp on a private jet seems almost worse than a rich tech monopoly CEO?

> don't the big unions have some of the same power/control issues

There's a potential for corruption in any human organization, even democratic organizations. Witness corruption in politics, for example. That's mostly unavoidable, humans being what they are.

The difference is that union leaders are still elected by the union members, whereas corporate CEOs are elected by the stockholders, not by employees. So even given some corruption, union leaders still represent the interests of labor better than CEOs do.

ah, i didn't know that thanks

news.ycombinator:

- "hey! you can now use Javascript to make apps on any platform!" 5 million comments

- "hey, capitalism might be bad" <tumbleweed>

It's rather "Hey, capitalism is terrible, we should try Socialism again. We'll not be fascists this time, promise"

eh, wrt the point, he's not wrong about authoritarian corporations

pretty easy to look at anti-trust laws within capitalism as a solution instead of "try socialism again"

It's Jacobin, the only possible solution is always socialism. Which is okay, but it's really not that interesting once you've heard it a few dozen times, so I'm not surprised people aren't jumping on it as if it's some new javascript framework.

Fair point, but it hasn’t even been an hour yet - on a Sunday morning.

The Jacobin's take on this is more or less equally trustworthy as Breitbart on civil right topics.

Jacobin is a very reputable publication. Super biased, but then that's why they're writing on this particular subject.

https://mediabiasfactcheck.com/jacobin/

Reply on news.ycombinator.com