Comment by Animats | Hacker News Reader

Comment by Animats | Hacker News Reader

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> By putting capital ahead of everything else of course capitalism gives you technological progress. If we didn't have capitalism we'd still be making crucible steel and the bit would cost more than the horse [1] -- but if you can license the open hearth furnace from Siemens and get a banker to front you to buy 1000 tons of firebricks it is all different, you can afford to make buildings and bridges out of steel.

The history of how steel got cheap is not really capital-based. It wasn't done by throwing money at the problem, not until the technology worked. The Bessemer Converter was a simple, but touchy beast. The Romans could have built one, but it wouldn't have worked. The metallurgy hadn't been figured out, and the quantitative analysis needed to get repeatability had to be developed. Once it was possible to know what was going into the process, repeatability was possible. Then it took a lot of trial and error, about 10,000 heats. Finally, consistently good steel emerged.

That's when capitalism took over and scaled it up. The technological progress preceded the funding.

The trial and error was fueled by capitalism, trying to get the best product possible.

If it goes into a codified state system, it's regulated, resulting in a lack of motivation to take risks to make it better.

Eh, this is BS also.

What do investors want? Returns on their investment right.

So, as an investor do you throw your money blindly at a high risk endeavor that is likely to fail due to competition, or

Do you invest in setting up a limited rent seeking market that guarantees income in the future.

Unregulated free market capitalism always turns into one large bully that dominates over everyone else because one large bully that dominates over everyone else is a very effective system. Vote based governments such as democracy are a means of attempting to ensure that said government are somewhat controlled by the people and not by a king/corporations in the first place.

You can see examples of both.

For instance on Matt Stoller's blog there are endless articles about how private equity is buying up medical practices, veterinary practices, cheerleading leagues, all sorts of low-risk, high-reward rollups. You also see things like the current AI bubble where there is very much an "arms race" where it seems quite likely that investors are willing to risk wasting their money because of the fear of missing out.

Some other kind of social system is going to face the same trade-offs and note that "communism" in the sense of the USSR and China might not be a true alternative. I mean, Stalin's great accomplishment was starving his peasants to promote rapid industrialization (capital formation!) so they could fight off Germany and then challenge the US for world supremacy. People who are impressed with China today are impressed that they're building huge solar farms, factories that build affordable electric cars, have entrepreneurial companies that develop video games and social media sites, etc. That is, they seem to out-capitalize us.

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