Comment by jmyeet | Hacker News Reader

Comment by jmyeet | Hacker News Reader

It's reached the point where even the IMF (which is really a policy arm of the US State Department) has to admit it [1].

To many (myself included) this has been entirely obvious for a year or more. The interesting part is how many apologists come out of the woodwork to defend capitalism when they are not part of this and they're just as much a victim as anyone else.

I think the biggest problem is that people confuse markets with capitalism. Markets are commerce. They happen in every economic system. It is not a unique trait to capitalism. Capitalism describes how value is created (labor) and how the surplus value of labor is concentrated into the hands of the very few (the capital-owning class) where once that wealth was concentrated into the hands of an artistocratic class that derived from the divine right of kings (ie feudalism). That's literally all it is.

We desperately need to increase corporate taxation.

[1]: https://www.imf.org/en/Blogs/Articles/2023/06/26/europes-inf...

If we increase corporate taxes, companies will respond by either raising prices, struggling to innovate/grow, or going out of business. Which of those outcomes do you prefer and why?

This is capitalist propaganda.

Corporations will continue to exist as long as there's a profit to be made. If they have to pay 10% of those profits in taxes or 80% they're still making money and there's still a profit incentive.

The idea that a tax on profits will drive a company out of business belies a fundamental misunderstanding at best or deliberate deception at worst.

Think of it this way: what if there was a 100% tax on profits?

Why would anyone invest money in that venture?

You forgot "reducing dividends/buybacks" and "reducing executive pay".

I will suggest a different course of events:

In the 19th century the welfare of common people (in the industrializing countries) started to increase exponentially. Education, property ownership, economic activity, nutrition, energy availability and productivity absolutely exploded within a single generation. Many of the capitalists during that era were aristocrats of some sort, because they already had capital.

The rest of the old aristocracy felt threatened however, they could see that all these newly enfranchised and confident people would soon kick them out of their comfortable positions. So they started movements like the Labour movement (which protested city living/working conditions that were leagues better than peasants') and Socialism (which puts an aristocracy of party officials in charge).

Worst of all, they managed to somehow implant the idea that markets only work when severely constrained by suffocating regulations and dictates, which was extremely effective in killing small businesses. Really what we have now has very little to do with capitalism, how else would you explain the surge in things like stock buybacks which are essentially capital destruction (converting capital to paper valuation increases) or the insane growth of states towards 100% of GDP (which is decidedly not the most productive use of that capital).

Buybacks inflate the stock price, which increases the personal wealth of CEO, employees, board members. This is pure capitalism - after all, these people want to maximise their wealth.

Might you be assuming that capitalism and free markets reach some optimal state with respect to how broader society functions? This is not the case - free markets theoretically price some good or service at it's fair value to whoever would buy it. But it says nothing about optimising value across society (not to mention other measures of how well society is doing) because (a) things don't actually work out optimally (b) people don't really act rationally

It's too bad there's a shit load of money behind not raising the corporate income tax.

Reply on news.ycombinator.com