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Comment by carlosjobim | Hacker News Reader

> The issue is that a sizeable underclass is being created that have no wealth, not least because what wealth they did have has been funneled to the very wealthy.

This has happened in all of the industrialized world, and it's happening very quickly right now. The reasons you mention are very US-specific, but the funneling happens everywhere, usually by more traditional means such as rents and taxes.

Yes, taxes are greatly beneficial for the rich, just scrutinize any European government budget and you'll see it is in large part a scheme to pay out money to wealthy people that are in favour with the political class.

The reason for this massive wealth distribution is the inflationary monetary system, that's the common denominator in all countries experiencing it, and it's not hard to see how.

In the past, serfdom was at least more honest. You knew your tax payments went to the lord for his own benefit.

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> The reason for this massive wealth distribution is the inflationary monetary system

Inflation serves to reduce wealth (if just stuffed under the mattress), and encourages investment (to beat inflation). The real problem is that wealth begets wealth - if left to it's own devices the capitalist system will ensure wealth becomes concentrated in fewer and fewer hands. The only way this can be counter-balanced is with government regulation (e.g. anti-monopolistic laws, wealth redistribution).

In the absence of government intervention, wealth is more likely to tend toward the center. The issue is that any democratic form of government featuring any kind of legislature reliant on voting will be bought. First, large companies will want small little advantages like a new road to their factory. Overtime, it becomes massive like immunity from prosecution from drugs that kill people like opioids. Over time, these companies receiving benefits become indistinguishable from the government itself and drive nearly all policy like Boeing, Raytheon, Lockheed, JP Morgan, Goldman, etc. Generally, all attempts to stop this are subverted and used to the benefit of these megacorporations via riders on any such bill introduced by politicians who’re on the take. Further, the agencies tasked with enforcement of any regulation usually have people who previously worked at these companies or who hope to work at them in the future on their staff.

Humans respond to incentives, and all incentives line up toward the merger of corporation and state in a democracy. I’d like to see a free market democracy that lacks corporate personhood to see if that changes the structure, but a human life isn’t long enough to really witness such a thing.

>In the absence of government intervention, wealth is more likely to tend toward the center. The issue is that any democratic form of government featuring any kind of legislature reliant on voting will be bought.

Every non-democratic form will be bought even faster, if it's not operated directly by the "buyers" in the first place.

Though I doubt that "in the absence of government intervention, wealth is more likely to tend toward the center". There are dozens of ways for the rich to get richer and fuck the poor/center over without government intervention. In a more anarchic, no-government-at-all situation, for an extreme example, they are the ones to afford the best mercernaries and dictate terms...

My argument is not that any government or no government is better than another, but rather that this form of corruption is unavoidable in democracies.

As for anarchy, yes, you could have more or worse violent action, but the type you cite is directly how the current system works. In the USA, the US and its states have the greatest military strength and therefore set the terms. They also engage in military action on behalf of corporations like United Fruit, Coca-Cola, Exon, etc. The argument that "in the absence of a government the warlords would take over" ignores that the warlords are already in power. Further, I at no point advocated for anarchy. I merely stated that in the absence of government intervention, wealthy is more likely to tend toward the center. In the USA, the wealth gap has widened as government intervention in the market has increased and that is the basis of evidence for my argument. Today, the richest and poorest are further apart that any prior time in US history, and law/regulation is and has been in continuous expansion not retraction.

Corruption happens under any form of government, it doesn't require democracy. The risk for corruption is always there when power is centralized, the more you centralize the more incentive there is.

If anything democracy has only shown that it isn't a magic bullet for corruption. Part of the goal is that oversight by the voting public will eventually weed out the corrupt, that works somewhat and should certainly be better than no oversight from other forms of government.

I do not disagree with your first part. The second part, I would argue has been proven false. Voting changes nothing, and I dare say that were voting capable of changing anything, it'd be illegal. Obama and Trump both said they were antiwar and would end war, neither did. All of the Presidents of my life time have spoken against large deficit spending except for Clinton and Biden, and hilariously, only Clinton ever made any real progress on that front. The people are generally against the drug war, no change. The people are generally against mass incarceration, no change. The people are generally against corporate/government collusion, no change. The people have generally been against bailouts, no change.

Oh we're 100% on the same page. I whole heartedly believe the ideals behind democracy are meant to keep power in check, but we lost that before I was born.

I'd argue that I've never truly lived in a democracy, but I hope to one day. It's a system I would fight for if there were actually a semblance of a movement willing to stand up and say enough is enough. So far though I've been a bit sad, or maybe just disappointed, to see that the vast majority of our people don't seem interested in democracy, liberty, or individual freedoms.

Most people only “believe” in democracy when they’re on the winning side of an election. Later, when the elected individual doesn’t live up to his/her campaign promises everyone seems to have amnesia and they go right back to the polls.

Corporate personhood is a legal fiction that allows corporations to own property and be sued. It dates back to craft guilds in the bronze age.

I'm not sure what alternative you envision.

Corporate personhood is used to shield people from persecution for things they'd be persecuted for doing as private individuals. If there was no corporate liability shield, every single drug company employee involved in knowingly marketing and distributing harmful opiates could potentially be sued; no longer could people use "I was just following orders" as an excuse.

Sue the owners of corporations when they break laws. That’s my alternative vision. Why did no board members of major tobacco companies have to face the consequences of their actions when they knowingly falsely advertised their product? Take away corporate personhood and make the owners face the music.

Inflation serves to redistribute wealth, since the first people to receive the new money created are those who benefit most from it. The reduced value of money some rich man has under his mattress is of very little importance here, what's important is the reduced value of the money received as wages by labourers.

When Roman emperors inflated their currency, the first people to receive the new money created were their soldiers. Wealth of the rest of Roman citizens was in this way redistributed to the soldiers.

Today we have a fractional reserve system in banking, meaning that banks actually create money and inflate the money supply when they give a "loan". While a lot of this money goes to governments and some goes to companies, the wast majority of new money enters circulation by being lent to real estate purchasers. That's why real estate is so unaffordable. It's not more complicated than that.

> The only way this can be counter-balanced is with government regulation

Then start regulating the banks and take away their privilege of creating money from nothing.

>Inflation serves to reduce wealth (if just stuffed under the mattress), and encourages investment (to beat inflation).

Inflation, in the current form, transfers wealth to the first people to receive/spend the newly printed money (the financial system) from the last people to receive the newly printed money (this is termed the Cantillon effect). Since the end of Bretton Woods in the 1970s there's been a massive increase in USD inflation coinciding with a massive increase in wealth inequality, as would be expected from a system based around systematic transfer of wealth from the real economy to the financial industry. Technically inflation doesn't have to act like this; if it occurred via helicopter money airdropped equally into everybody's bank account, there wouldn't be a wealth transfer. But with the current system it's a systematic source of inequality.

> capitalist system will ensure wealth becomes concentrated in fewer and fewer hands. The only way this can be counter-balanced is with government regulation

I'd argue government is just the same. If you look at who holds office right now, it's predominantly the older generation [0]. They achieved that by becoming career politicians. Deng Xiaoping introduced capitalism which lifted generations of people out of poverty [1]. It has a good track record of doing that. The rich companies lobby the government to make competition for the little guy impossible and solidifying their concentration of power -- crony capitalism. I do think there should be a push and pull, but both sides are human and power hungry.

[0] https://theconversation.com/politicians-are-getting-older-sh... [1] https://www.nytimes.com/1997/02/20/world/deng-xiaoping-a-pol...

  > crony capitalism

how to get rid of crony cpitalism?

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