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Comment by fjordingo | Hacker News Reader

> if you're young and good at technology...

> ... but if you want to become super rich, and you're young and good at technology, working on what you're most interested in becomes a good idea again.

It's sad to me that the wealth inequality manifested and upheld by the current structure of capitalism, that people like Graham full throatily endorse, creates this mentality.

"If you're young" is a euphemism for "if you are free from the necessities of responsibility, and so are able to forego the lack of consistent income (and if you're in the states, a lack of employer provided health care".

pg, encourage the companies you give money to pay an equal portion of profits to their employees, and maybe even the "olds" can be free do what they love; rather than the fear induced indentured servitude currently so predominant.

May even give us better products and solutions, or as you say, allow people to do actual "great work".

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> wealth inequality manifested and upheld by the current structure of capitalism

I've been having this conversation over dinner with my wife for the last few years. What else is there? Here are the broadly categorized economic systems that I'm aware of (I sincerely request correction if I'm incomplete or mistaken):

- Subsistence (hunter/gatherer, limited farming... etc.)

- Despotism, feudalism, and other ruler-based economies that mix governance with economy by fiat

- Marxism (and it's entanglements into governance: socialism and communism)

- Capitalism, though it eventually captures governance as a failure mode

Of these systems, with the possible exception of subsistence, only capitalism really works. All forms of Marxism ever practiced lead to despotism, which most of us can agree is a bad thing. Even with a benevolent dictator for life, that life ends and the system degenerates at most in two generations of hereditary leadership.

How do you reset capitalism so that we refresh to healthy markets (a prerequisite for capitalism to act as a force for societal welfare)? How do you turn back the clock on regulatory capture, and monopolized consolidation where firms move to become parasitic instead of exchanging value?

Is there something else?

And no, Marxism and collectivism is not it. Drowning the individual is not it. Marxism hasn't lost its appeal precisely because it's one of the few models that addresses dramatic pay disparity. But it was created in Britain thinking about the factory workers of the time. We know now that it includes errors and misunderstandings of fundamental human behavior that make it turn into tyranny every time. We also know that it necessarily leads to central planning which is fragile and collapses. So that's not it.

If not Marxism, and not capitalism, then what?

> All forms of Marxism ever practiced lead to despotism, which most of us can agree is a bad thing.

What you call a Marxist system is something that Marx said could only work in the most advanced country if it was ready for it, which in that time was Germany. He said such a system would not work elsewhere.

So what form of Marxism failed? Even Lenin, who many Marxists did not consider Marxist, was a Marxist enough to say that Russia would not establish communism. That the Russian self-described Marxists had the chance to take power in Russia and they took it. That Lenin wanted to take power in early 1917 came as a surprise to Stalin, Trotsky, Kamenev etc., in fact Trotsky was not even with Lenin then. It surprised them because it was not a Marxist idea. Then Lenin introduced the New Economic Policy, i.e. capitalism. Then he died.

Marx clearly spelled out what not to do, and some did what he said not to do, then people attribute the failures of those who did what Marx said not to do, to Marx.

This kind of argument seems to always pop up in this context.

There have been 17 attempts that I'm aware of to create a government based off of the ideals that Marx preached.

Of those 17 attempts, every one has ended up creating extreme poverty for the masses. Every one has led to massive amounts of death and abject misery. Every one has led to a dictator that sees his people as just cogs in a machine, easily replaced.

No matter how great Marx's system is (and having seen the aftermath personally of one of those attempts to enact it, I'm inclined to think that his system of thinking is semi-articulate garbage), it's obvious that we can't do what he prescribed and get the results he claimed we would.

Frankly, the part where all of the power temporarily concentrates before redistribution is the problem area: no one can withstand the temptation to just keep it.

Or possibly they never intended to let it go in the first place.

There are far more than 17 capitalist countries which meet every criteria you've listed as an evil of Communism.

> There have been 17 attempts that I'm aware of to create a government based off of the ideals that Marx preached.

What does Marx say in the Communist Manifesto?

"The Communists turn their attention chiefly to Germany, because that country is on the eve of a bourgeois revolution that is bound to be carried out under more advanced conditions of European civilisation and with a much more developed proletariat than that of England was in the seventeenth, and France in the eighteenth century, and because the bourgeois revolution in Germany will be but the prelude to an immediately following proletarian revolution."

This is what Marx said, what his ideals were. A political fight in a country with the developed proletariat of the Ruhr Valley - Germany. What he can be judged by is what he said.

Marx said a precondition for his ideals would be the conditions the Ruhr Valley and Germany had. So if attempts made without the ingredients he stated failed, then Marx's ideals are shown to be correct. Your examples prove Marx was right.

"Marxism (or any other such system) has never been tried" is such a tired and pointless argument.

There have clearly been repeated attempts to implement it. If you say that none of them have actually implemented it, you should consider that strong evidence that it cannot actually be implemented. These attempts have clearly universally led to great harm, which is evidence that the attempt inevitably leads in that direction.

If you expect to defend Marxism this way from the accusation of having "failed", then at best you are kicking the ideological can down the road, and at worst engaging in No True Scotsman fallacy.

> Marxism (or any other such system) has never been tried" is such a tired and pointless argument.

> There have clearly been repeated attempts to implement it.

To implement what? People at the time of Marx asked him what system they should eventually implement. Marx replied he was not August Comte and did not write recipes for the cookshops of the future.

You have conjured up some non-existent system Marx supposedly wanted to put in place, then you say it was a failure, then you admonish people for not seeing Marx's system did not fail. What system? He explicitly said he had none.

Also, China by some measures has the largest economy in the world. Hanging over party conferences and Five Year Plan meetings are pictures of Marx and Mao. How has that failed. "Well, Marx's picture is there, but it's not real Marxist" people respond. Speaking of no true Scotsman cope.

>You have conjured up some non-existent system Marx supposedly wanted to put in place, then you say it was a failure, then you admonish people for not seeing Marx's system did not fail. What system? He explicitly said he had none.

No, I have not. I have pointed at every national-scale real-world system which its proponents argued to be intended as Marxist.

> How has that failed.... "Well, Marx's picture is there, but it's not real Marxist" people respond.

Now who is conjuring non-existent things?

Or are you seriously arguing that China is an example of "the most advanced country" which "[is] ready for [Marxism]" in the modern age, and that Maoism is an example of Marxism which you wish to claim as a success (while denying any Russian regime such status), and that "by some measures the largest economy in the world" (with several times the population of the USA) is ipso facto a success?

I don't think your argument merits a serious response, but there's a passing attempt anyway.

I just want capitalism where the capitalists pay the same tax rate as labor.

That sounds fairly awful. The top 1% of earners pay 45% of income tax (US figure). Why would you want laborers to pay so much more tax?

I clearly wrote tax rate, not total taxes.

And the top 1% gets a lot of wealth that isn't classified as income.

In what country is that?

Average tax rate paid by billionaires in the US is close to 8%

https://www.whitehouse.gov/omb/briefing-room/2021/09/23/new-...

The US of course, I specifically said that.

https://taxfoundation.org/data/all/federal/latest-federal-in...

> The top 1 percent of taxpayers paid a 25.9 percent average rate, nearly eight times higher than the 3.3 percent average rate paid by the bottom half of taxpayers

> The top 1 percent’s income share rose from 22.2 percent in 2020 to 26.3 percent in 2021 and its share of federal income taxes paid rose from 42.3 percent to 45.8 percent.

The post I was replying to suggested that everyone pay the same tax rate. I'm opposed to this. Progressive taxes are more fair, due to the marginal value of money.

I'm not sure the best way to change minds is using a facetious tone and quoting meticulously-crafted numbers from a right-wing think tank.

Billionaires get richer through asset appreciation, not income. The White House report is focusing on how fast the rich are getting richer and that's how they arrived at 8%.

A worker's salary is taxed at a high rate like up to 40%, whereas a wealthy person's gains from assets are taxed at a much lower rate like 15%. And that is if they realize the gains at all, because their unrealized gains don't get taxed at all.

Our current system (in which long term capital gains tax is much lower than income tax) rewards the owner class and punishes the workers.

The figures are misleading because if you have low income, your effective tax rate is indeed lower than the wealthy. But then you're barely surviving anyway. So if you're poor, you're screwed because you're poor. If you have a livable income, you're screwed because of high taxes. But if you're wealthy, the system exists to serve you.

The IRS is not a right wing think tank, the source is quoted immediately and you can find it here: https://www.irs.gov/statistics/soi-tax-stats-individual-stat...

You will discover that the numbers are reported correctly.

> A worker's salary is taxed at a high rate like up to 40%

The bottom 50% are taxed at 3.35% of income. That's the IRS' number, not something "meticulously crafted by a right-wing think tank". Or completely made up.

> their unrealized gains don't get taxed at all.

Good. It would be an absolute disaster to tax unrealized gains because, well: they're unrealized. I'm sure the numerous serious problems with doing that will occur to anyone thinking about the question honestly for a little while. The most obvious would be the total destruction of what social mobility we do have.

> a wealthy [sic] person's gains from assets are taxed at a much lower rate like 15%

This is insufficiently general. Anyone's gains from assets are taxed at a 15% rate for long-term gains. 60% of American families are homeowners, so it isn't correct to gloss receiving capital gains as exclusively the province of the wealthy.

As I said before, I support progressive taxation, and a higher rate for people who own (not earn) in the top 0.1%, say 20%, is something I would support.

But 15% is 4.5x of 3.35%, so in no world are the very wealthy paying a lower rate of tax than workers. It just isn't true. Therefore, if the OG poster got their wish, the 'capitalists' would pay much less tax, and the workers would pay a great deal more.

Income tax is an effective strawman. The only reason it's the predominant form of government tax income for the government is because of how taxes worked. Pre 1900, almost all tax came from trade, labour licenses and wealth/death taxes.

There are people in the US who increase their wealth by $1 million each year and pay no income tax because their increase in wealth was tied to assets, not increased income that year. By loss offsetting, or other evasion/avoidance measures, they can even end up paying little or no capital gains/asset taxes (which are already significantly lower than income taxes). And they aren't included in your figure.

These are the same people mentioned in the other comment reply to you, quote "A worker's salary is taxed at a high rate like up to 40%, whereas a wealthy person's gains from assets are taxed at a much lower rate like 15%. And that is if they realize the gains at all, because their unrealized gains don't get taxed at all."

If assets and capital gains were taxed in the same way (no intermingling, no loss offsetting) as income taxes, then tax would be far more equally distributed - which according to you, would be better right?

You think it's unfair to ask "laborers" pay more tax, since the top 1% already pay 45% of income tax

Let's adjust the law then and have the top 5% by wealth pay 45% of all wealth+income increase via tax, this must be fairer to you?

Basically I would agree with your argument if the practical effects were that the people in practice with the most money and secure income(from any form, be it employment or wealth/asset gain) were paying 45% of all the taxes, however that's not the case. And you are ignoring massively the unrealized gains and ability to offset losses which is available only to those with wealth, but not income. (e.g. I can't set aside my gross salary as a net loss and then use an instrument to gift it to my children a few years later with no effective tax)

The current system is designed to A) Easily extract taxes (do it before the commoners get the net money B) Keep assets with those who already own them C) Shift the tax burden on to the top 20-30% of earners by income, but not wealth.

The effective tax rates you quote for the US are both influenced by this system in a way we can't remove from the data, and show anyway that your belief is weaker than the facts you originally presented (ca. the 45% figure which ignored wealth/assets).

Capital gains tax is lower to offset the risk of taking a capital risk, which labor does not do in receiving a wage.

Much of “labor” participates in capital risk through retirement accounts and homes, blurring this 19th century distinction.

The “capitalists” are likely to sidestep taxation through politicians, lawyers and accountants (See the often quoted 1960s era “tax rate”) which is a phenomenon of power, that exists pre-capitalism.

> How do you reset capitalism so that we refresh to healthy markets (a prerequisite for capitalism to act as a force for societal welfare)?

Do you know about Sisyphus?

It's far too late in the history of discourse to try and change this perception, but 'Marxism' is not really so much of a system in-of-itself more than it is a grouping of influential ideas that were propagated by Marx and disseminated throughout history. Marx at no point ever attempts to describe an ideal economic system - Communism as an idea is far more intagible to him, and many 'modern Marxists' have long since re-oriented their ideological critique away from 'the establishment of Communism' and towards 'survival under Capitalism' as modern society is inexorably more alien than Marx could have ever known.

I think your bulleted list is a bit wonky.

The one that jumps out at me is implying “socialism is a form of Marxism” when it’s the opposite that is true.

There are thriving socialist governments right now. What benefit does your argument get from ignoring those?

Why do you have “capitalism” and “despotism, feudalism, and other ruler based economies” separate? Are you unable to see the oligarchy of the US?

> Drowning the individual is not it.

Spreading ownership across those necessary for a thing to exist is drowning them? Or is it drowning the Csuites?

If your online bookstore turned imitation product megastore requires the people boxing the goods and driving the trucks then they should own a piece of what their work creates; that means ownership in the company and a share in the wealth it creates.

Is it because a CEO is golfing with war criminals that they deserve to capture the economic production from the labor of so many?

The fact that a company can create one of the three riches men on the planet and have its employees who are the ones making that person’s wealth be on government assistance is absolute bullshit.

> What else is there?

What indeed.

> The fact that a company can create one of the three riches men on the planet and have its employees who are the ones making that person’s wealth be on government assistance is absolute bullshit.

I agree here. Even during the feudal era, if you happened to be employed in the envoy of one of the world's richest trading fleets, you would be treated with far greater respect than an Amazon worker.

In my opinion, a good first step is to stop looking at socialism and capitalism in absolute terms. I think its a mistake to idealistically cling to one archetype as the best of all possible archetypes. When you go the idealistic route, you are doomed to repeat the failings of the past.

I would argue that the most successful economies are blended economies that have achieved success by blending elements of both systems and perhaps other systems as well.

For example, the USA once had working conditions as described by Upton Sinclair in “The Jungle .” Those working conditions are no longer legal thanks to regulations. But regulations are an element of command-economy, not of free markets.

An example from the other side is the rise of China’s economy. I don’t believe China could have become “the world’s factory” without introducing elements of free market capitalism.

During the cold war, propaganda made socialism the bogeyman to the west, and capitalism the bogeyman to the east. I don’t think this fear is rational. To me they are just two economic archetypes of many. Each has its own merits and faults. The key is to apply them where they make sense.

To me the real enemies are: authoritarianism and corruption.

I see regulatory capture as a form of corruption. The regulators are corrupted by those who would like to externalize their costs onto society. How do we fight corruption? It’s a tough battle, but remember it has been done before. Tammany hall, etc.

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