Hacker News Reader

> The problem we are facing is that the producers are have become extremely productive due to capital and technology and are able crush those who do not have the access to the capital and technology.

This is a common mercantilist fallacy -- that the problem is we just have too much production. I submit that we have the opposite problem: goods and resources are too scarce, rather than too abundant. More efficient production is the solution, rather than the problem.

> The people who are not in this privileged group are caught in a vicious cycle are forced to remain consumers and are getting more and more dependent on these super producers.

I agree that the focus of the economy is consumption, but this is indicative of the problem as well. We need to encourage entrepreneurship. By this I do not mean subsidies -- more in terms of cultural encouragement and removal of legislative and regulatory obstacles.

It seems there is some misunderstanding. OP didn't say that there is too much production. The argument was rather that the barriers to entry are too high (very high capital costs etc.). This creates self-perpetuating oligopolies.

By the way, the whole point of the economy is to enable consumption. If there was no consumption, there would be no point to economic activity.

> The argument was rather that the barriers to entry are too high (very high capital costs etc.)

Really? You are saying this on Hacker News? Where we gather to assemble and identify our comparative advantages and engage in entrepreneurship with capital on the order of thousands of dollars?

You can also be a agricultural entrepreneur or a mining entrepreneur or steel entrepreneur. Admittedly, the competition in these arenas is indeed very stiff, and they have invested a lot of money in efficient production. As an individual, you have little comparative advantage in such industries. But if you have some insight into how to make these industries even more efficient, then you will have no problems securing income or even starting a consulting business.

> This creates self-perpetuating oligopolies.

I disagree. The bigger they are, and especially once the economies of scale diminish as the market is saturated, the harder they fall. Waste and communication issues provide a natural limit. We run into problems when the state intervenes to keep dinosaurs alive. What's good for GM is good for the country, and all that.

> By the way, the whole point of the economy is to enable consumption.

Yep, consumption is enabled by production. Human needs and wants are limitless. If we actually lived in a world of abundance and not scarcity, people would not need jobs and there would be no need for production. We would lounge around all day in the land of milk and honey.

> If there was no consumption, there would be no point to economic activity.

Consumption will never go away. We consume food, water, shelter, etc. The only way consumption goes away is if humans go away. And when humans (or preference-satisfying agents, to be clear) go away, then economic activity ceases.

These "super-producers" don't actually produce anything, they just own the means of production just as, in most (but not all) cases, their grandparents did. The actual producers of the goods are the working class, managed by a portion of the middle class not involved in professional services.

As Western countries have overvalued their currencies, lowered taxes on the wealthy, and weakened their labor standards, they thus ballooned their median costs of living - forcing labor to live on credit. As they then purchased lowered trade barriers for manufacturing from the elites of mostly ex-colonies (while carefully protecting intellectual capital and professional services), they have offloaded what their working class once did to poverty stricken countries, lowering median income, which is slightly offset by cheaper imported goods. This exacerbates income equality even more, creating a glut of the ex-working and management classes attempting to enter the professional middle class.

This, combined with lowered barriers to trade in professional services (and the radical progression in communications technology), will serve to lower the wages of the professional middle class, causing many of them to drop to the largely welfare supported lower class and to become entirely credit bound.

Bitcoins are seen as a way to avoid taxes, launder money, and perform illegal transactions:)

> As Western countries have overvalued their currencies Please explain this chart to me https://upload.wikimedia.org/wikipedia/commons/c/c9/Dollar_v...

It's a chart that means absolutely nothing to people who understand that it's the relative value of the dollar to the currencies of other countries that is meaningful. It would be fairly helpful in following the narratives to some classic movies, though.

Inequality and lack of social mobility within developed countries has gotten worse over the last decade, but over the whole world its decreased radically over the same time period. You should only "encourage local products and services in a big way" iff you don't believe the lives of people in developing countries have value.

I am trying to grasp what you are saying. I live in a developing country and I exactly know what you mean. Protectionism sends shivers down the spines of policymakers in developing countries. My country (India) has seen great progress in the last ten years thanks to relaxed trade and red-tape.

I am writing this on an Apple laptop. I love this machine and it is reasonably affordable for me. There is no incentive for an Indian company to ever produce a good laptop. Even worse is that there is never going to be an ecosystem in India that will work on complex engineering problems that go into making such a machine.

So while I enjoy as a consumer, I am only adding to the imbalance. It is not only for engineering products. China has become the producer for many simpler products that could have been made in India. I chose to become an entrepreneur and maybe will try and fix a miniscule part that imbalance some day, but I am not sure how many will. Are Indian producers better off because of China? I don't know.

For many decades, my country has been running a trade deficit at the cost of inflation. It all seems fine so far, but there is something surely wrong here. China has been doing the opposite, they have decided to become super producers, which is never possible in India because of the complex decision making.

In the ideal scenario, there must be a balance between global and local. It cannot be all global and no local (or the other way round), which is often a matter of perception. Globalization + technology has led to concentration of capital and the the playing field is not level. I still feel people everywhere must try and level the field.

I agree with you that Bitcoins can open markets because they can eliminate the friction of making payments when two parties live in different political regions that do not currently trade easily.

This is a good thing for individual liberty and self determination.

But I would disagree when you propose that the only solution is to prevent the most efficient producers of a good or service from selling as much as they can into their market.

I rather put my hopes on open access and competition; both of which are enhanced by a means of exchange that does not require the friction of a trusted intermediary.

I agree it's a hard problem. How do you rebalance without encroaching on individual liberty? The producers will need to eventually agree that this system is not sustainable in the long run and adapt. The initiative lies with them.