Comment by PaulHoule | Hacker News Reader

Comment by PaulHoule | Hacker News Reader

I'm going to argue that the original sin of capitalism is change over time.

The story of how microeconomics works so that the invisible hand empowers, say, a kid's lemonade stand, is straightforward and real.

The trouble is that the market can only guess at how future investments will pay off or how technology changes so we get ruptures when it is wrong: the business cycle is one consequences of this (accumulating debt now that can't be paid off easily later) but many of the other complaints about "the market" come from this too.

If you consider the "cost of living" issue for instance I think the real issue is that people don't like change; because technology is changing and the walls of the environment are closing we (or our children) will have hell to pay for instance if we don't rebuild our energy system, change the way we drive, etc. That's all going to cost money and things will be different -- maybe you want an 8 seat SUV but maybe you are going to get a 4 seat sedan. The thing is right now we don't have a completely clear picture of what the future is and it is certain that X% of any investment we make will be wasted.

The real sin was forgetting "the market" was only ever a model, not reality. We literally confused the map with the territory. Now that underlying reality is changing, and our mistake is thinking the model, i.e. the market, remains unchanged.

I really think this is disingenuous thinking. change over time is the original sin. The "market" is very much a real thing. It's the global fabric of everything in the entire world. It is definitely not a model.

Also let's not forget the original sin of communism - which is that everyone is a slave.

Everyone is a slave because you don't own your own labor. It is owned by the government. By definition the people are slaves in communism.

> The "market" is very much a real thing.

As real as any other legislation and as vulnerable to gaming, ignorance and malice.

> change over time is the original sin

Again, if change is a sin, so is evolution. The logical conclusion of your contention is going back to the trees and further to pre-life universe. And even that changes too much to qualify it as pure.

> Again, if change is a sin, so is evolution

No. That's putting words in my mouth, I was agreeing to Paul in him saying that Capitalism's weakest point is that it can't account for the future. You're probably trying to be a wordsmith to win an argument, but your post is entirely meaningless.

It can but it makes mistakes.

In the US we have that whole ‘circular economy’ with NVIDIA, OpenAI, etc.

The the EU you have to convince some niggardly German bankers to make a loan that will certainly be repaid. So of course they will be left out of the AI future.

Here when Solyndra failed many politicians acted like it was a crime, in China they have had many solar ventures fail but others succeeded and thanks to that they won. On the other hand they’ve built whole cities nobody wants to live in.

In America nobody wants to be DJI, rather they want to cherry pick profitable opportunities. The truth in the low altitude sky over Ukraine is that DJI beats Lockheed Martin, so the F-35 vs DJI is like horses va tanks. You gotta do the mass market things if you want to defend the high end, see The Innovators Dilemma

> Capitalism's weakest point is that it can't account for the future.

That's different from "change as the original sin" and I'd address it differently, but first allow me to remove the poetry from your statement because it doesn't really contribute to clarity.

Basically you're saying "Capitalism allows unpredictable changes that can break things" as opposed to "Another system (e.g. socialism) plans the future and allows only planned changes".

Both of these may be true for some ideal models but aren't true in reality.

Macro changes under real capitalism can and are entirely predictable although you may not know how to predict them - that's a different issue. They can also be tightly controlled by methods different from socialism.

On the other hand, socialism allows only planned changes... until it doesn't, because of unintended consequences. However, I don't claim that the failure of the USSR's socialist model wasn't foreseen or planned at some level of their leadership, which brings the conversation into the realm of fundamental politics where real capitalism and socialism have a lot more in common than is assumed by their usual treatment as opposites.

> but your post is entirely meaningless

To you. Let's steer clear of wild generalizations, the devil is still in the details. I'd appreciate if you use a clear language instead of me trying to guess the details necessary for a meaningful conversation.

I wouldn't say that Democratic Socialism as practiced today plans the future and allows only planned changes. It does appear (I'm an American so my view on this matter could definitely be skewed) to be more risk averse - though I think that's an unintended consequence and not a feature.

Since my original assertion was that markets aren't actually real, it makes sense that fundamental politics plays a far greater role than many people suspect. I would say that Americans should be learning this lesson at this very moment.

> I wouldn't say that Democratic Socialism as practiced today plans the future and allows only planned changes.

In other words, Democratic Socialism can't account for the future either, maybe it can mitigate some risks a bit better but it's still capitalism with similar risks of disruption-inducing changes.

If we exclude planned socialism from consideration, there would be no reason to single out capitalism for its unpredictability because the rest aren't materially better and arguing about it wouldn't add any insights.

> fundamental politics plays a far greater role than many people suspect.

It does indeed.

> I would say that Americans should be learning this lesson at this very moment.

Popular understanding cannot increase itself, it can only follow education, media and academia but it's lacking there either.

Is Democratic Socialism better at handling or responding to disruption-inducing changes? Or is that what you meant by your statement that maybe it can mitigate some risks better?

> I think the real issue is that people don't like change;

People like positive change - better standard of living, cheaper and high quality goods & services. They get the opposite and they don't like that, there's no mystery here.

> the original sin of capitalism is change over time

It was never supposed to be negative change, and calling what we have now "capitalism" is quite a stretch, the meaning of that word is now so vague as to render it meaningless.

> The thing is right now we don't have a completely clear picture of what the future is.

The future is what we make it and we have a pretty clear picture what actions lead to what consequences, it ain't exactly simple for everyone to understand but that's not necessary either. The problem is, the media and politicians only muddy the waters instead of elevating the valuable insights and proposals.

> the walls of the environment are closing

Poetic but misleading. The environment is a systemic function of multiple factors, it's really unhelpful to make it a political issue for the purpose of peddling more sacrifice from those on the losing side of wealth inequality.

No, no, you can't get away with saying "calling what we have now "capitalism" is quite a stretch, the meaning of that word is now so vague as to render it meaningless"

This is just simply not true. There are too many young people that want to be lawyers or ivory tower word architects, but the time for "winning arguments" because you're narrative is to make people believe untrue things, just does not work anymore.

"Capitalism" was a word coined by its critics just a few years before Marx wrote Das Kapital. People who actually like Capitalism tend to resist drawing some boundary around it and would rather have it be that thing that Maggie Thatcher and Angela Merkel and Hillary Clinton say "there is no alternative" to. In particularly they are loathe to even say it might be something that has some good aspects and some bad aspects and refusing to define it is necessary to keep that game going.

In particular it's hard to draw a line between many "communist" countries and capitalism. I mean, Stalin's great legacy was very rapid industrialization and technology development from 1920-1970 or so which was initially funded by starving farmers to buy machines from western industrialists to build factories. Post-Mao China has been out-capitalizing everybody else, which is the biggest problem people seem to have with them.

I'll argue that "capitalism" is about transforming society across time by deploying large amounts of capital so when somebody says "Facebook developed in a harmful direction because of capitalism" I'm going to argue that a system that wasn't fundamentally capitalist would never have made the investment to develop advanced microprocessors, the internet, social media, and all of that. You could have a different kind of capitalism which is kinder and gentler but if you didn't have capitalism you would not have 8 billion people on Earth because nobody would have made the investment to build all the fertilizer plants, etc.

First off, a great comment, I enjoyed reading it. Bringing some clearity to the meaning of "capitalism" is indeed a pressing necessity.

> I'll argue that "capitalism" is about transforming society across time by deploying large amounts of capital.

That definition of capitalism doesn't seem to clearly separate it from socialism though. If we combine it with this quote:

> Stalin's great legacy was very rapid industrialization and technology development ... Post-Mao China has been out-capitalizing everybody else

we reach the conclusion that capitalism can be practiced in socialists settings, indeed "deploying large amounts of capital" is quite normal for socialism. The only variables are the amount of capital available for deployment and the goals and professionalism of its managers.

So, the definition has to be augmented with something about the functioning of the market and the effects of that on distribution. I can't tell you what exactly because I don't burden myself with defining capitalism, or socialism for that matter, I view them more as points on a continuum, multiple points for each.

Particular changes have positive and negative aspects for different people. E.g. almost everybody was better off circa 1980 producing steel by the basic oxygen process and arc furnace except steel makers who had built open hearth furnaces 50 years ago and they had political power to maintain tariffs for a long time.

See also AI —- there will be positives but this site and all the others I am on have a lot of users who are afraid of losing their job or losing the joy in their job or being overwhelmed with AI slop.

There are certain systematic ways things break: in terms of politics the instinct is always to protect incumbents because they know it is a negative change for them and are already organized whereas the new entrants for which it is a positive change don’t even exist yet.

See also systematic biases in planning: like the “luxury apartments” that get built and are then unrented because there is no market for them…. Yet they were seductive to investors because they were sold with attractive but false numbers… and subsidized “affordable” housing is built on the same template and has been failing the same way ever since https://en.wikipedia.org/wiki/Cabrini%E2%80%93Green_Homes

I was talking to the systems engineering prof about “why are nuclear plants always late and over budget” and concluded that the vendors were basically dishonest and knew they quote an unrealistically low price and like a game of poker the customer would keep raising so as not to lose their sunk costs.

> Particular changes have positive and negative aspects for different people.

There are also the statistical notions of majority, median and average, not to mention Pareto optimality. How we measure the social effect of changes is another topic but it's more than clear that it can be measured.

> the vendors [of nuclear plants] were basically dishonest and knew they quote an unrealistically low price

I'm not sure why the vendors have to determine the honesty of the bidding process, that's not what contract theory would advise.

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