Comment by atleastoptimal | Hacker News Reader

Comment by atleastoptimal | Hacker News Reader

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Worldwide wealth inequality isn't as important to look at as overall worldwide poverty, which has gone down markedly over the past century. It is much preferable to be able to have running water and food despite the richest person in your country having 30 houses, over having no water or food but the richest guy only has 2 houses. In the former, inequality is higher, but the absolute pain of poverty is lower, which is a more relevant metric for human welfare.

The industrial revolution, in the 1800s, transformed England and Europe due to the incentives of the growth of industry, and the free movement of labor towards those incentives. Largely, those who worked in factories did so because the benefits/costs exceeded that of farm work. If there were no incentives to change, everyone would have stayed on the farm, preserving the agrarian status quo. Despite all the hazards, the benefit/cost was better for industrial work, largely because it paid more, the money allowing for the improvement of living conditions for those who worked in factories.

I agree that to get better working conditions has been a constant battle between the interests of the working class and capital owning class, but looking at everything through that lens ignores the whole point of work/industry in the first place, in that it produces surplus wealth, and only once that wealth is produced can societies make the decision on how that wealth is allocated. In every society that has generally followed the rule of "free market capitalism with common sense regulation and protection of private property", living standards, median wealth ownership and wages, etc. have almost universally gone up decade after decade.

>Largely, those who worked in factories did so because the benefits/costs exceeded that of farm work. If there were no incentives to change, everyone would have stayed on the farm, preserving the agrarian status quo.

This is true for the first generation of factory workers. After that the proletariat emerges, an urban underclass that can’t use the threat of going back to the farm as negotiating leverage, because they don’t know how to farm. I don’t think that the way that leftist governments went after farmers was fair or even humane, but the motivation for it was basically terror at being trapped under the thumb of the owner class.

If you were a handicraft worker and a factory opened, your old livelihood was destroyed. You may be making optimal choices for yourself by shifting to factory work, but to claim that factory life was better because people chose it obscures the fact that the old choices were made defunct by the factory opening.

If you look at the decline in poverty since 1980 most of that is due to China’s policies [1] which have combined social programs, central planning, with, yes, a portion of the economy running in market economics. And note that this occurred after private property was widely expropriated in a communist revolution. Free markets centralize wealth and power; the capitalist class always uses its wealth to control the political process as best it can. What we attribute to “common sense regulation” in the global north is actually the result of historical compromises made by the ruling class due to pressure from below. Left to itself the capitalist class will pursue profits at the expense of everything else. Failing to do so, capitalists will be outcompeted by those that do. (We see the effect of such structural incentives today with the climate crisis.)

Can markets be useful? Yes, as part of a broader policy that checks capitalist power either through labor or government. In the US I believe the government is captured by the capitalist class; thus it seems to me that organized labor is the only avenue for real progress in the US.

[1] https://documents.worldbank.org/en/publication/documents-rep...

The China thing people always bring up, but it's notable that the complete expropriation of private property and radical communist central planning preceded the massive periods of famine in China from 1950-1970, and only after free market reforms, creation of the special economic zones and integration into the world market did China see massive growth in general welfare.

Notably, Japan, South Korea, Hong Kong and Taiwan had much faster improvements in GDP per capita and general welfare compared to mainland China, and today enjoy a higher standard of living, despite starting from a similar point in the 1950s.

Still, I agree with you, social programs are necessary, and China's top-down programs have perhaps given it distinct advantages it otherwise would not have now, but fundamentally free market capitalism as a foundation has routinely been the biggest driver of wealth over the 20th century. My examples (the "Asian tigers") do have strong social welfare programs, workers rights, etc, but they all fundamentally are capitalist countries whose wealth came largely from the benefits of commerce, free market incentives for technological innovation, and free enterprise.

I guess my concern is about the living standards of workers not creation of wealth. I think your argument is that growing wealth helps the working class as it creates more wealth, and thus a bigger pie. My argument is that a bigger pie does not benefit the working class without external forces pressuring the capitalist class.

I agree markets can be beneficial in some ways but they also have pathological behaviors left on their own. In capitalist countries the capitalist class more or less runs the government, even in so-called democracies. This is because wealth and thus power sits with the capitalist class. In our society market effects over time have produced a wealth disparity so great that the capitalist class is pushing austerity measures that will likely succeed in further enriching itself at the expense of the working class - lowering living standards while increasing profits. In the meantime existential risks to the human race like climate change or nuclear war are not only neglected but actively stoked.

I also would caution against the use of the term “free” market; China directs its markets; even the “Asian tigers” story was the outcome of state policies deliberately building a manufacturing base including measures such as education and land reform - admittedly a much freer hand given was given to markets compared to China; yet in neither case would I characterize these gains as the result of markets operating truly independently or freely; in both cases market effects were guided and channeled toward specific desired outcomes.

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