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Comment by roenxi | Hacker News Reader

> ...So now a lot of us that were in that position are getting drawn in and being like, no actually the impoverishment that has always been the underbelly of capitalism...

What, because we have this alternate system where the underbelly of society is happy, hale and having a really good time? The global south have been doing great under capitalism, the reason they are poor is they don't have a history of industrial success. The Chinese in particular are where they are right now because they embraced capitalism rather than throwing more bodies into the maw of communism and I think most of the world would prefer to follow their lead. Getting wealthier at that rate looks like a lot of fun.

Impoverished underbellys are in every system, they have nothing to do with capitalism. The problem is we treat low status people like garbage. Capitalism is just not a cause or consequence of human status hierarchies. But the lot of low status people is probably only going to improve with more AI because they of all people will benefit from cheap access to a system that makes high-intelligence decisions with more knowledge than can fit in a human mind.

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I’m a fan of managed capitalism, which is the only capitalism we’ve ever known. I’m very nervous about what happens when unrestricted capital is allowed to consume all its guardrails and re-write all the rules to advantage itself. I imagine it leads to something extremely not-like the kind of capitalism that brought all those benefits you’re citing. I guess we might get to find out for ourselves!

Capitalism is a word invented by Louis Blanc for the bad thing "What I call 'capitalism' that is to say the appropriation of capital by some to the exclusion of others".

You don't actually call yourself a capitalist, because if you say that you actually say "I believe in a hard class system with a difficult to overcome divide between workers and capital owners and that the appropriation of capital by some to the exclusion of others is right". If you believe in a system that you feel is uncomfortably similar to Louis Blanc's bad thing, you say "This won't actually happen, this system is totally dynamic, with no permanent class division or any appropriation of capital by some to the exclusion of others" and you'd say things "I support free markets".

Capitalism is just a term for the concepts that predated Louis Blanc and were discussed by Adam Smith et al.

Your definition is nonsense: capitalism is a system in which the invested capital is also rewarded and not collectively owned. But it’s not a hard class system — as you’re given capital in reward for your labor. Capitalism is substantially more malleable as a class system than traditional feudalism (what came before in Europe) or modern communism (its main rival), which trades feudalistic class for status within the party.

> it’s not a hard class system — as you’re given capital in reward for your labor

The latter doesn't justify the former. If you are rewarded for your work, but it would require you many lifetimes of labor to reach the next class, that's for all intents and purposes a hard class system.

The argument for class mobility based on initiative doesn't make it a soft class system.

> Capitalism is substantially more malleable as a class system than traditional feudalism (what came before in Europe) or modern communism (its main rival), which trades feudalistic class for status within the party.

Doesn't make it malleable, just comparatively more malleable.

The problem is with the later stages of capitalism where everything is big and rigid, but you still need growth for the system to work.

What we need is a different system that improves on capitalism, but has at its heart a welfare state, doesn't reduce each individual to an economic actor and have incentives set so that each actor (or machine which seeks connections) can converge to the mean, instead of each one trying to reach the top.

But then it isn't Blanc's Capitalism-- or at least you claim that it isn't, so why use the word?

Adam Smith was not in favour of capitalism, and in fact warned against it. He was in favour of the free market, which is not the same thing. A market is free when it's transparent and accessible for everybody. Extreme discrepancy in wealth and capital leads to powerful parties dominating and controlling the market. Smith recognized that and warned against it, recognizing the need for workers to organize, and to prevent cartels and monopolies.

Whether capitalism is distinguishable from traditional feudalism depends entirely on how you regulate it.

Is it substantially malleable? If you’re given enough capital to live but not reach the upper levels is it really?

That's more about ambition. So many examples of people who started with nothing and became very wealthy. Capitalism enables this, it does not prevent it.

Thousands of people have been made millionaires by government lotteries in the United States.

>as you’re given capital in reward for your labor.

And when your labor is not needed because 'capital' itself supplies its own labor?

Capitalism is not a panacea and its history is steeped in blood.

The Dutch VOC, considered one of the first capitalist enterprises, carried out genocide in its pursuit to control spices in the Indies.

Capitalist interests in the US interfered in South American politics for decades, overthrowing democratically elected leaders and funding militias aligned with corporate interests. One of my closest friends is Guatemalan and most of his family was killed during the United Fruit Company conflict.

The Russians experienced one of the largest declines in quality of life in human history after the Soviet Union fell and the country became privatized.

Steeped in blood compared to what?

History as a whole is full of unsavory things, but we have to decide between things that can happen — and many atrocities have been committed trying to build Utopia. For example, the massive casualties of the USSR. Or those killed in South America — eg, by the FARC.

You should also include casualties of the coup in Indonesia, the Casualties of the Korean, Vietnamese, and secret war in Laos. Perhaps also the massacres performed by the Contras in Nicaragua,

> Steeped in blood compared to what?

Compared to social democracy and probably some other systems that protect the rights and interests of the poorest in society.

If we look at a map of places where Socialist Democratic parties are active [0, 1] it actually looks like a map of people who generally have pretty terrible living conditions for the poorest in society. Mainly because it covers most of the known world so it'd reflect the normal living conditions for poor people. And is an ideology that is well integrated with capitalism, I happen to note.

It is pretty hard to say that the social democracy is free from a bloody history vs capitalism when people like the US Dems claim to be part of the social democrats. They're pretty blood-spattered. They're part of the governing system of the largest and most aggressive military in the world.

[0] https://en.wikipedia.org/wiki/Socialist_International

[1] https://en.wikipedia.org/wiki/Progressive_Alliance

It's not just about the parties, but about the systems. Dutch social democratic parties haven't been in power in ages, but the foundation of our economy is social democratic, and right-wing parties don't dare to touch it. People like not having to worry about paid sick leave, maternity leave, unemployment, healthcare, disability, and a million other little things. That stuff is the fabric of our society.

All over northern Europe, you find high taxes, strong social safety nets, good healthcare, little violence, high levels of happiness and personal freedom, and high GDPs. This is the combination that works.

And the US was also on this path after WW2, but reverted course during the Reagan years, with all the consequences you see today.

And is the argument there that the Dutch no longer practice capitalism? They are one of the major names in the history of the limited-liability stock corporation, we've already had the VOC invoked in this thread. Pretty easy to see that representing the blood steeped face of capitalism. They still have stock exchanges in Amsterdam, so they haven't sworn off the shareholders.

Having a welfare state isn't capitalism but having one isn't the complete antithesis of capitalism. It is easy to see how a society could simultaneously support the VOC and a welfare state. Really easy, in fact - the VOC was mostly external and welfare is mostly internal, the systems don't need to interact at all.

It is impossible to hold the Dutch up as a group who have rid themselves of the blood-steeped history of capitalism when they are (1) a poster child of the blood-steeped history of capitalism (2) still supporting and encouraging capitalists. And (3) your comment could be interpreted as saying the social democrats don't actually hold power. At best that just establishes that capitalism isn't fundamentally steeped in blood since the Dutch have theoretically learned to behave responsibly over the centuries.

And to throw in a (4) have they apologised and made reparations for the VOC? It isn't obvious they've even repudiated the blood-soaked history of capitalism although maybe they have; I don't track Dutch politics.

I suppose the real question here is what exactly do you think "social democracy" is if not just standard democracy + welfare?

> And is the argument there that the Dutch no longer practice capitalism?

Who is saying that? Nobody.

> They are one of the major names in the history of the limited-liability stock corporation, we've already had the VOC invoked in this thread.

That's quite some time ago, though. That's not what we do today. What's your point with this?

> Having a welfare state isn't capitalism but having one isn't the complete antithesis of capitalism.

Exactly. It's about finding the right balance between the best parts of different ideas, while avoiding the worst parts.

> It is easy to see how a society could simultaneously support the VOC and a welfare state.

But it didn't. There was extreme poverty in the Dutch Republic during the days of the VOC. It was neither social, nor a democracy.

> At best that just establishes that capitalism isn't fundamentally steeped in blood since the Dutch have theoretically learned to behave responsibly over the centuries.

How does that undo the blood? It's that responsibility that's putting the brakes on the excesses of capitalism.

> I suppose the real question here is what exactly do you think "social democracy" is if not just standard democracy + welfare?

I'm really wondering what you think social democracy is, with a rant like that. It's certainly more than democracy + welfare, although those are definitely big parts of it. It's regulation, it's capitalism within responsible limits, it's cooperation and negotiation between unions and corporations. And it's government investment where it's necessary. That last part is something governments like to do less and less since neoliberalism, and they're also rolling back too much of the regulation.

It's undeniable that they've been weakening the social democratic system, but the core of it is still there. It's proven itself effective enough that all the toxic shit the right has been spewing about the left, even the right-wing parties don't truly dare to dismantle it.

>> > And is the argument there that the Dutch no longer practice capitalism?

> Who is saying that? Nobody.

Well a few comments ago you had that throwaway that the social democrats were less blood-steeped than the capitalists. Then you've held up, as social democrats, a group of capitalists with a long bloody history of capitalism and as far as I know never really did anything much to repudiate that history. And still practice capitalism today. You can still notionally buy shares from the same stock exchange that hosted the VOC [0].

And the follow up is me being a bit bemused. If the social democrats are the blood-steeped capitalists, how are they less blood steeped than the capitalists? Which capitalists are the blood-seeped ones if not the British, French and Dutch? I'd assumed you were talking about those 3 and the Americans until you held the Dutch up as a counterexample to bloodied capitalists.

[0] https://en.wikipedia.org/wiki/Euronext_Amsterdam - Great read

I get it. You don't really know what social democracy is. So let me give you the briefest definition: social democracy tries to balance the best parts of socialism and capitalism, while trying to avoid the worst parts. Those worst parts include that blood-steeped history. Social democracy explicitly tries to avoid that, by regulating corporations and protecting people's rights. The corporations can still make profit, but not by any means; not by hurting people.

That is something that didn't happen during that blood steeped history. The VOC had no meaningful restrictions. They could wage war, kill people, enslave people. They could sentence their own employees to death. These are the kind of excesses you want to prevent.

Social democracy is something that was invented about a century and a half ago, although in the early days, the difference with socialism and anarchism wasn't very well-defined yet; those three terms were used fairly interchangeably much of the time. But at least it was explicit about democracy, and it grew to become the dominant form of socialism in capitalist democratic countries. And there it grew to be what it became over the course of the 20th century: a balance to capitalism, instead of an outright rejection of it.

It hasn't always been perfect; there have been slip ups and poor decisions, but it doesn't have the kind of blood-steeped history that capitalism and totalitarian communism have. It's been fairly effective at what it tries to do. More so than any other ideology, except maybe liberalism. But they go fairly well together.

And would you accept then that capitalism as an ideology is no longer implemented anywhere? Because there aren't many modern nations more capitalist than the Dutch. And those that arguably are are only marginally more capitalistic. Like, if you do a search for "capitalistic countries" you can find [0] people who consider them to be in the top 10.

Must admit I'm having trouble getting over the idea that the Dutch of all people are being held up as different than the capitalists. Good bad or otherwise this conversation is going to be a high point of the week. What's next? Socialist Switzerland?

[0] https://worldpopulationreview.com/country-rankings/capitalis...

No country has a pure implementation of any ideology. Ideologies are directions you want to take society, and economic systems are always a balance. But the US is quite a bit more blatantly capitalist, with its lack of holidays, lack of worker rights, and everything geared towards an even more extreme division of wealth.

Netherland, and northern Europe in general (I never meant to single out Netherland specifically; Scandinavia is probably ahead of us), is absolutely capitalist, but not nearly to the extreme that the US is, and has more labour protection, better social welfare, better regulations. Not to the extent that it should have; it's still falling way short, and Netherland in particular has been falling further short since the neoliberalist wave of the 1990s and the string of right-wing governments of the past 25 years. But it's not the worst of the world in this regard, and it still has a fairly effective balance that consistently puts it near the top of most freedom and happiness indexes with the rest of northern Europe.

It's by no means perfect, and there's a lot that needs to be improved, but compared to most other countries, this is clearly a pretty effective system.

Did you know the Netherlands, back in 2019, scored [0] the highest wealth inequality globally according to Wiki? Just saying. It does look like a bit of a fluke but I found that hilarious. Although the wiki article actually specifically cites them for having good statistics so there must be some confidence.

So earlier, when we're talking about blood-soaked capitalists, we're not talking about the Dutch with their history of blood soaked capitalism and their ongoing largely uninterrupted capitalist tradition. But we are talking about the people who don't take very many holidays and lack "workers rights" - where I note that the US has had their ability to negotiate with their corporate overlords eroded so far that they get a median income of maybe 10% higher than the Netherlands [1]? Most workers should really work on chipping away at their rights, it appears to improve their bargaining position! Maybe PPP can give the Dutch an edge, but we're talking about a pretty marginal difference to start talking about one obviously being the more blood-steeped.

I mean, look. We don't really have anything to talk about here but I am going to say I'm not sure you know a capitalist country when you see it. If we're talking about the blood-soaked ones, the Netherlands are capitalist heartland. Not quite as bad as the UK. But bad enough that I suppose I can see why they'd rather rebrand as something other than straight capitalists.

[0] https://en.wikipedia.org/wiki/List_of_sovereign_states_by_we...

[1] https://worldpopulationreview.com/country-rankings/median-in...

> But the lot of low status people is probably only going to improve with more AI

I've got a bridge to sell you...

I mean historically, with essentially every other incrrease in technology and GDP this has been true, at least broadly speaking.

The quality of life of the poorest in the world has been improving over time.

It is absolutely worth considering "would things really be different this time?" But it's also a mistake to think automatically that it WILL be different this time.

It isn't necessarily a mistake if you can scare people into clicking, or perhaps granting you special regulatory privileges. It may be unethical.

> The quality of life of the poorest in the world has been improving over time.

Because those technological improvements were accompanied by social changes and regulation to adjust for the technological changes.

>I mean historically,

Past performance is not indicative of future results.

The problem is we have to think about the actions we are taking and what those results will be. Just saying "oh, all of history before now needed human labor, but don't worry we're replacing that and nothing is going to change" is a nonsensical statement. In previous times when massive technology changes occurred we typically see very large wars break out. This was terrible and all, but war was a regional thing with regional effects. During the 20th century war became a global thing with global consequences all the way up to biosphere altering weapons of mass destruction.

The threat of MAD set up a time of relative global peace coupled with fast transportation and an explosion in the human population has set up a very fragile state of humanity. Products must keep moving and energy must keep being produces or billions and billions of people will die because they need things from the other side of the world to show up.

It isn't enough to observe empirically how laissez-faire has increased living standards to the extent that it is permitted. It is also necessary to describe the impossibility of central planning due to the Economic Calculation Problem.

We must also observe that opponents to laissez-faire liberalizations are by definition proponents of illiberal central planning.

Yes, vaguely liberalized economies have had problems. It doesn't follow that the problems of these vaguely liberalized economies are exclusively the result of liberalization. HN will harp on cherry picked citations. A common theme will be judging events in the distant past by the standards of the present.

The alternative is not a utopia, it is a relatively less free and more centrally planned economy. The failure mode of these centralized systems is more catastrophic, results in less opportunity and less productivity.

https://en.wikipedia.org/wiki/Economic_calculation_problem

https://en.wikipedia.org/wiki/Nirvana_fallacy

AI is a technology to be used to improve the human condition. The laissez-faire system, to the extent that we allow it, is the decentralized way to allocate resources to serve humanity.

It's not laissez-faire that has increased living standards, it's the combination of the free market, union organizing, and resulting from that, regulation and the social safety net. Before that, there was still massive poverty. And many countries still experiencing poverty are lacking the latter half of that list.

Note that free market economics and laissez-faire economics are not the same thing. A free market requires a transparent market that's equally accessible to everyone, that's not dominated by cartels and monopolies, and that requires some regulation. Laissez-faire opposes that regulation and wants to give free reign to cartels and monopolies. Adam Smith explicitly warned against those, and pointed out the necessity of workers organizing to avoid being taken advantage of. And that, workers having negotiating power, that is what increased their living standards.

> We must also observe that opponents to laissez-faire liberalizations are by definition proponents of illiberal central planning.

This is bullshit. There's the entire free market economy in between those two extremes.

> This is bullshit. There's the entire free market economy in between those two extremes.

You see, here’s the big problem. You people can’t even agree about what the object of your argument even is.

Were are fucked.

I don't think it is that extreme. The problem with the poster's assertion is that one individual's "free-market" as the poster defines it, is another's state capitalism.

If the above poster feels that there is a pragmatic need for regulation, fine. However the underlying principles of laissez-faire remain clearly defined. By appealing to a pragmatic need for regulation, the poster opens the door for centralized capture of the market. Long term this trend creates malign incentives.

Historically those who couldn't achieve monopoly conditions by appealing to consumers on the market, used the power of the state instead. So there's a mixed bag at best here. Others contend that the truly toxic monopolies are created exclusively by this process. You can take you pick, we're free to disagree here, but denying the hazards of the regulatory state would be unreasonable. Maybe that's an acceptable trade off and I think that's a fair discussion.

However, all of that is a far way off from an appeal to special circumstances, "because AI", "markets bad" and therefore neo-luddite doom. It isn't something we have observed with other tech innovations, nor is it grounded in axiomatic reasoning.

> denying the hazards of the regulatory state would be unreasonable.

The same goes for denying the hazards of unregulated corporations.

Completely unregulated corporations will, if given the chance, grow to become their own unaccountable states, which the first corporations, like the VOC, absolutely did.

The need for regulation is written in blood.

You've chosen a poor example to illustrate your case.

The Dutch East India Company was a state granted monopoly. Obviously in this case, the regulations (state charter) empowered the abuses you feel so strongly about.

More generally, I'd caution against applying the present day norms around human rights to a distant historical case.

https://en.wikipedia.org/wiki/Presentism_(historical_analysi...

That monopoly doesn't mean all that much. Sure, they had no Dutch competitors east of Africa, but they had English, Spanish, Portuguese and local competitors. But due to their extreme wealth, they ended up controlling entire countries, a massive navy, and they minted their own currency.

Any corporation is inherently a grant by the state to act as a legal entity. If you truly oppose government regulation of corporations, you should oppose the existence of corporations themselves. And honestly, I think that would solve a lot of the problems with capitalism. But it would also cripple our ability to take on projects too big for a small group of people. The government grant and the concentration of wealth are the entire point of corporations.

Who do you mean by "you people"? I know what I'm talking about. It's unclear to me what you're talking about.

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