Literally the most overwhelming thought, reading this, is "man, capitalism is a mistake"
The amounts of money circulating whilst some of us struggle to make rent ...
Nothing fair, or just, about this world we live in
The amounts of money circulating whilst some of us struggle to make rent ...
Nothing fair, or just, about this world we live in
It may be expressed in terms of money, but these are assets and capital. You wouldn't find a fab a very comfortable or satisfying place to live.
The reason the numbers get so big is the gargantuan accumulated savings that are prepared to fund the similarly gargantuan ventures. The large numbers are supported by maintaining and sustaining the capitalized value by profitable investment and depreciation.
When you talk about rent, while it may be expressed in the same unit (money), the economic function played is very different. Here, it is consumption rather than saving/investment. If the dollar equivalent of all those assets went towards paying rent, while it would secure housing for some time, it would eventually become completely exhausted, and so too would housing security. Large pools of assets are simply not a way to get stable housing, it would only consume the large savings society has accumulated to be able to undergo those big ventures. It would be short-sighted and harm us in the future.
The cause and solution to rental instability is to be found in housing, building, and land policy that restricts the production of housing.
> Housing is not an asset to society or the economy, it's a drain that wastes money on preserving human life.
You are equivocating between asset in the sense of 'generally useful thing', and the sense I used above which is a capital good. Housing is obviously a useful thing and necessary, just as all other consumptive goods like food, clothing, etc. That makes it an 'asset' in the former sense to people (there is no such thing as useful to the economy, which is just an abstraction). But housing, food, and clothing are not assets in the latter sense. I.e., paying for housing is a consumptive act and not a productive act. There is nothing good or bad about either, the distinction is simply a distinction of economic function. Eating is important, but eating uses up resources; it is consumption. Cooking is important, but it is not eating, you don't get anything out of it until you eat; it is production. Both rely on each other, neither can be given up completely without harm.
Thus, a proper balance must be struck, because it would be foolish and self-destructive to only consume. If there was only consumption, then this would simply sacrifice your future and you would not be able to survive after you have used up what was produced before. The question is about whether you want a stable, regular, and lasting way to be able to have valuable things like housing, food, and clothing. To do that, you have to refrain from consuming your entire stock of assets, you have to refrain from using up all the resources you have. But that is what you would to if you took all the capital that companies have saved up and consumed it. The purpose of my original post was to point out that you can't look at production as if it were consumption, they have different roles and if you mistake production as an opportunity to consume, it is self-destructive.
Replying by ignoring this distinction and instead making a strawman will not prevent your perspective from being self destructive.
Man, we need a better term for this criticism.
The US right now is more harsh to live in than the US pre-Reagan, which was more harsh than many countries with a strong welfare state, but all of them are capitalistic.
We all make different choices, and so have different consequences.
For example, I squandered the proceeds of a business deal on a new car. If I'd bought MSFT instead, I could have bought 100 new cars.
(hindsight stock picking is terrible!)
Besides, this can't work for everyone - if you get 100 cars without an equivalent amount of more work put in then someone else has to do that work without being properly compensated for it.
That profit comes from owning a piece of a productive company, productive companies often spring from early-stage losses that require investment money from somewhere, seed stage money comes from the high likelihood that later stage money will come in if the venture appears successful.
There are many problems with a gambling based economy, not least among them that over a long enough time line, all the money ends in very few hands.
https://www.macrotrends.net/2324/sp-500-historical-chart-dat...
Or, I might be completely wrong and just been on an incredible white-hot-streak gambling for the last 30 years.
All of that money that you've "earned" with investment, where do you think it came from? What do you think you've done to deserve it? If investment is fundamentally risky, then it's an unsound basis for a stable society (i.e. it's gambling); if it's not risky, then you can't even argue that you deserve that money by having risked your own capital.
Others might be more conservative and I hope they find and choose investments which match their style and risk-tolerance.
I don't care how you act. That capitalism benefits the rich is not the subject of debate. This isn't /r/wallstreetbets
What is at stake us that all value is created by labor; and that the capitalist class (of which you are a member) is allowed to profit despite not producing anything at all. That makes you a parasite. Isn't that what the rich say about the poor?
That's the communist "Labor Theory of Value" which is nonsense.
For example, spend the day digging a hole in your backyard. Did you create any value? Nope.
Can you explain how it's nonsense? Can you think of a valuable product or service that you consume that is not produced by labor?
> For example, spend the day digging a hole in your backyard. Did you create any value? Nope.
I didn't say that all labor produces value; I said that all value is produced by labor. As a Smart Guy who Created His Own Software Company with No Capital At All, I'm sure you know enough about elementary logic to recognize the difference.
> all value is produced by labor
But you deny that the labor of the CEO produces value.
Consider Microsoft. The company's stock was flat for 10 years. Then Nadella took over as CEO. The stock went up by a factor of 10. Same company, same employees, same intellectual property. The difference was Nadella. A similar story with Steve Jobs' second coming at Apple. And Steve Jobs at Pixar. There are innumerable such stories.
It's similar to military generals. An army's victory or defeat is pretty much entirely due to the general.
So in your view, there are only two options: (a) unlimited astronomical compensation for CEOs while line workers get minimum wage or (b) hippie commune? You really can't see any other option? Even 50 to 60 years ago, CEO salaries were not as distorted as they are today and yet the world did not grind to a stop.
> Then Nadella took over as CEO. The stock went up by a factor of 10
The stock is not a measure of productivity. It's a measure of expectation. The problem with you and many capitalists is that you view the stock as the company's product. It isn't. Is the current version of Windows ten times better than the previous version? No? Then why did the stock go up?
> It's similar to military generals.
Great analogy. A general (O-10) in the US army serving since 1986 makes $19,000/mo. A private (E-1) makes $2,407/mo. That's a difference of ~8x. Now explain to me again why a CEO makes >1000x what his employees make?
It was created by the company you invested in.
> What do you think you've done to deserve it?
I took the risk of providing capital for the company to use to create wealth.
Risk is an elemental characteristic of free markets.
That's right: the value was created by other people, but yet you are benefiting. That makes you a parasite.
> I took the risk of providing capital for the company to use to create wealth.
So what? I can take a risk by jumping into a shallow pool. That's not the same as labor and does not entitle me, ethically, to profit. The profit should go to the people who do the work.
This is classic Marxism.
The employees were compensated commensurate with the value they produced. The value the investors create is the result of taking the risk by providing the capital and organization needed for the company to operate.
If you don't believe that, you're free to organize with like-minded fellow travelers, set up a commune, and split the rewards equally. I would caution you, however, that 20,000 other communes have been set up in the US, and they all disappeared. In my estimation, the typical commune member leaves after about 2 years, because they were doing all the work and the others were lazing around getting their equal share.
Put another way, SpaceX would not exist without Musk.
Correct. Are you going to dispute it or is "this is Marxism" the extent of your argument?
> The employees were compensated commensurate with the value they produced.
If they were compensated commensurate with the value they produced, then there would be no profit for the company, and the CEO's compensation would not be 1000x that of a line worker.
> If you don't believe that, you're free to organize with like-minded fellow travelers, set up a commune, and split the rewards equally.
That is one approach supported by unions.
> Put another way, SpaceX would not exist without Musk.
Yes, and I would not exist without my parents. That does not mean that I give them 90% of my profit.
You're assuming the economy is zero sum, which it obviously is not.
That assumption does not follow from my statement.
What I do assume is that the easiest way to make money is to have money, which means that the rich and get richer and the poor get poorer. We've already seen that the rise of billionaires correlatives with an increase in wealth inequality and poverty.
> the rise of billionaires correlatives with an increase in wealth inequality and poverty
The rise of the wealthy in the 19th century corresponded with scores of millions of people rising out of poverty into the middle class and beyond.
> What I do assume is that the easiest way to make money is to have money, which means that the rich and get richer and the poor get poorer.
Creating value does not make the poor poorer.
Consider the wealth in America today. Compare it with the wealth in America in 1800. Where did all that wealth come from? Rich European immigrants?
Did you know that when Rockefeller built Standard Oil, the price of kerosene dropped 70%. Just who exactly was he "robbing"?
My statement was "long enough time line, all the money ends in very few hands." That has nothing to do with zero-sum. Even if we assume that your premise of "rich billionaires make everyone else richer too", it does nothing to contradict my statement.
> The rise of the wealthy in the 19th century corresponded with scores of millions of people rising out of poverty into the middle class and beyond.
The decrease in poverty in that time period stems principally from industrialized farming techniques, increasing available food resources. There is nothing in that process that requires super-billionaires.
> Creating value does not make the poor poorer.
That depends. If all the created value is in the hands of rich, it gives the rich the power to buy more things, including things that the poor people need, e.g. housing. That drives up prices for the poor, and effectively decreases their buying power. That's how supply and demand work.
> Consider the wealth in America today. Compare it with the wealth in America in 1800.
Now consider the wealth distribution in America now versus the wealth distribution in America 60 years ago. At that time, the difference between the rich and the poor was much smaller. It was also a time of great economic expansion, opportunity, and innovation. So clearly super-billioniares cannot be necessary for economic productivity.
Investing: the ROI math means you make money
> So what you're saying is that we all just need to become better gamblers?
It means take advantage of the free education you received. Make an assessment of what you enjoy and what you are good at. Select an opportunity in the intersection of those two endeavors.
People start businesses every day in America.
> Besides, this can't work for everyone
Wealth is not zero sum. If you create wealth, that does not mean someone else must be worse off.
I hope that India too can emulate this in my lifetime. I was born in Kerala and would love to see Indians live in a country that is as wealthy per capita ( PPP adjusted ) as Singapore or failing that even as wealthy as the USA.
Capitalism has it's problems. But you struggling with rent is entirely your self-inflicted problem...
Who said anything about struggling with rent? Sounds like you a grasping for a straw man.
> I hope that India too can emulate this in my lifetime
I, too, hope the best things for the people of China and of India. But India, by any metric, is already a capitalist economy, where its wealth is concentrated in the hands of a very few.
To the extent that China has been successful is distributing its wealth among many people, I'd say it's the authoritarianism, rather than the capitalism, that has been instrumental. The state sets agendas, quotas, and salaries specifically to produce that outcome. Top-down government control is not a feature of unbridled capitalism.
So we have two large industrializing economies, both capitalist. One (the authoritarian one) has succeeded in drastically reducing poverty; the other has not. And yet you think that capitalism is the driver of equality?
Capitalism produces wealth. You need some other system to distribute that wealth fairly.
The person they replied to, in the very comment they replied to…?
> > > The amounts of money circulating whilst some of us struggle to make rent ...
Nope. It is the driver of opportunity, though. It's up to individuals to take advantage of the opportunity, or not.
The problem is that after decades monopolies consolidated and you have massive offshoring of labor to cheap countries and offshoring of profits to tax havens, there's not much opportunities the working class individuals can take, as all the opportunities are now geared towards the asset owning rent seeking class.
Today you can buy a computer for $25. https://www.ebay.com/sch/i.html?_nkw=raspberry+pi
You can pick up a keyboard at the thrift store for about $5, and a monitor for maybe $15.
Did you ever compensate the school for their involuntary loan of that computer or are you now admitting that you are a thief?
Well, that's good news. I guess the cause of poverty must simply be laziness.
That's convenient, because it allows me to demonize the lower economic classes without having to address the systemic inequality that rewards capital ownership over labor.
Value is created by some combination of 1) working 2) taking risks.
Entertaining as it is, participating on HackerNews is not a path to making money.
Real estate agents operate in much the same way.
The problem: there's a second phase 50 years later, where the risk takers from 50 years ago own the world and do their best to prevent further rewards flowing to new risktakers. We are in that phase now.
The other problem: when the reward is so great, you do everything to get ahead, even illegal things, because the expectation value (winning*P(winning) + prison*P(caught)) is still positive.
Musk creating wealth has taken nothing from me. How about you?
> there's a second phase 50 years later, where the risk takers from 50 years ago own the world and do their best to prevent further rewards flowing to new risktakers. We are in that phase now.
Did you know that Hackernews is run by wealthy people who fund startups?
What illegal things did Bezos do to get rich? Jobs? Gates? Musk?
That's exactly what he'd like you to believe. Where did that money come from? Did he just print it himself?
> Musk creating wealth has taken nothing from me. How about you?
Considering that billionaires are actively involved in writing the laws that ostensibly apply to them (see also: regulatory capture), I hardly think that legality should be highest bar that we hold them to. After all, the lords of medieval France acted "legally" when they executed their tenant farmers for failing to pay rent after a bad harvest.
The value created by his company. That value can be turned into money by selling shares of it (stocks), or by borrowing against it (bonds).
Money is created by banks. When banks loan you money, that money is created by a notation in the bank's ledger. But they only loan money on collateral, which would be in this case the value of the company. The money gets destroyed (!) when the loan is paid off. But the value of the collateral remains.
A company is just a legal fiction. It doesn't do anything without people. The value was actually created by the people who work for Musk. In other words, those employees create a large value, and are paid a relatively low compensation. The difference goes to Musk, who contributed no value at all.
That's called theft.
> Money is created by banks.
Huh? No it plainly is not.
In capitalism, the wealthy provide the capex and reap the profit. In China, the government provides a lot of the capex and claims a lot of the profit (either directly or indirectly). They can then re-invest that, use it to set salaries free from market forces, etc.
The US could do more of that without getting into the contentious issue of raising personal taxes. Ie the government could control the flow of GPUs into the country, asserting that it had the right of first purchase, distribute them to a tightly controlled private company (think power or water company, with margins set by law), and probably make a profit on the cheaper hardware because they’d be a massive purchasing block. We won’t, though, because Google, Amazon, Oracle, etc are currently posed to make a _ton_ of money off doing basically the exact same thing.
Yeah, that one guy and 70% of the country https://www.yahoo.com/news/videos/70-americans-struggle-pay-...
Instead for the past century we have almost everyone in the world wanting or not minding moving to the hypercapitalist USA.
Ironically almost all the countries with emigration controls and exit visas in the past century were noncapitalistic countries trying to stop their people from fleeing to capitalistic countries.
The reasons Americans don't just move to whatever country they think they'd enjoying living in the most are often the same reasons most people all over the world don't. They have a life here. Family, friends, jobs and other ties to their community that would be hard to leave behind.
Uncertainty and fear also keep people from moving their lives to new countries. Especially when they're going to a place where they don't have friends and family to help them with things like expenses and childcare.
Americans in particular are unlikely to speak anything other than English and while English is often understood to some extent many places overseas it can't be assumed to be avilable everywhere. Understanding the local language is often a requirement for getting citizenship in a country and not being fluent will be a hindrance even where it isn't explicitly required.
It's also very expensive to move. You'll need to have enough money to live somewhere and feed and clothe yourself the moment you step off the plane. You'll need to store all off your things someplace until housing can be secured and that can take a lot of time. Countries can require thousands in fees to apply for citizenship and people struggling with basics like food and housing aren't going to be able to afford that. About half the country doesn't even have a passport and the expense of getting one (along with the needed documentation) would be an additional burden.
Other countries don't necessarily want you. Immigrating is difficult. Unless you can demonstrate that you've already got someone willing to hire you (and effectively vouch that you won't be a financial burden) or you have some much needed skill or one that a native citizen cannot perform you may not be welcome. No nation is obligated to accept responsibility for you just because you want to live there.
It'd be great if everyone everywhere could just pack up and leave to start a life wherever they felt like it, but there are many reasons why that just isn't realistic. There are tens of millions of people America right now living in places without safe drinking water because of heavy metal contamination. Why do you think they don't just pack up and move to cities with drinkable water? What about the tens of millions of Americans who live within one mile of toxic waste sites that have been linked to infant deaths, cancers, and other serious long-term health issues? Why don't they just move? Forget about America, how about all those starving Africans just move to somewhere with lots of food? The world just doesn't work that way.
> the idea that people can just pack up and go to live wherever they feel like is incredibly naive.
That's how America was populated. In the last 5 years, millions of people walked from South America to the US. Walked!
The tax increases in New York, California and Washington have resulted in an exodus of wealthy people.
I have absolutely no problem with wealthy people who refuse to pay their fair share of taxes leaving. Good riddance. If they want to act like parasites let them leech off the people some place else. Eventually those people will wise up and ask them to pay up or get out too. It's that or bow down and spend their lives in serfdom to their rich lords and masters. I prefer freedom over robber barons.
That's a reactionary emotional reaction that many countries started with and failed and led to people fleeing and the govts banning people leaving. Examples include East Germany, North Korea, the eastern bloc etc.
History has shown again and again that chasing away high earners with super high taxes like doctors, tech workers, small business owners etc. leads to worse outcomes for everyone because they already pay a large share of total taxes. Also, they may quit and just collect the welfare off the high earners tax income. At the federal level the top 1% pay 40% of federal taxes, that's not even counting the jobs they create. Imagine a place trying to serve 99% of the people with only 60% of the tax revenue. They're either going to increase the taxes till there's no one left to overtax or reduce govt services which reduces govt employment leading to lower tax collection and even more welfare spending.
Taxes on things discourage the use of things, that's why high taxes on smoking and alcohol work. Supertaxing economic productivity and rewarding people sitting around not working will and has led to lower economic productivity.
https://www.nber.org/system/files/chapters/c6521/c6521.pdf
I got a lot of downvotes making these comments and ran into posting limits. HN isn't a place for debates like this, you win, socialism is amazing, everyone upvote me now.
The funny thing about this is that practically every single person in the US between the ages of 25-45 was an early adopter and a big fan for some (or all) of FAANG in the early days, and clearly saw the importance. The fact that they aren't filthy rich and far wealthier than older people tells a story. Not a story of lattes and avocados, but a story where housing and education costs guaranteed that as a group they couldn't save, never had a chance to invest, still can't invest. With certain adjustments the story isn't so different for much of the western world.. maybe education was cheap/free but their domestic labor market was weaker, whatever. They were and are still pretty much guaranteed to be on the outside. Luck, timing, and good connections are nice at any time, but the last few decades it's everything. In another timeline maybe wealthy youth is landlording it over the impoverished oldies, but in the best timeline we'd split the difference.
Even worse, it's a uniquely bad time to be smart and hardworking, because that's the type of attitude that could stick you with a lack of resilience at just the wrong time. People who've coasted may do much better than ones who are striving. Would you rather be a university grad with new debt right now, or be a certified HVAC tech for the last 5 years? If you were a mechanic, would you want to own the shop with loans to pay off in this economy and tariffs to deal with, or would you prefer to be a simple employee that can just bounce once the company goes under? I've met phd's who are delivering pizzas to make ends meet. Blue collar folks not only have better job security at the moment, but going back some years, if they got a mortgage at the right time and place with that stable job maybe they could do normal life stuff like kids, retirement one day.
What lessons do we think young people will take from all this? Nothing against anyone who is lucky, but a stubborn belief in mythical meritocracy or the legendary American dream is absolutely stone-cold crazy these days. There's just the insiders and the outsiders and there's not much rhyme or reason to any of it.
I think the next decade will be one of the single greatest times to be smart and hardworking. I think we’ll see AI-powered tools evolve to give hardworking humans significantly more leverage than they’ve been able to individually harness before and coupling that with smart (meaning high and good judgment on how to use them) will be an incredibly powerful combination.
"In 1985, if you were a reasonably affluent American, the best computer that you could afford was the IBM PC AT. The PC AT would cost you about $6,000—$19,400 in 2026 dollars—and thus represented about a quarter of the median American’s annual income; and it ran on an Intel 80286 processor, capable of something like 900,000 instructions per second. Today, if you find yourself in a market stall in Nairobi or Lagos, you’ll be able to find a cheap smartphone—like the Tecno Spark Go, manufactured by China’s Transsion—for somewhere between $30 and $120. That phone will run on a processor capable of billions of calculations per second."
Please note that "commerce" and "capitalism" are not synonymous, and that the former does not imply the latter. Capitalism is in no way a prerequisite for technological development.
Really? Who else builds stuff?
Said the Christian in pre-Englightenment Europe: "Well, of course Christianity is the one true religion. After all, the whole civilized world is Christian."
However, I doubt anyone else would instead want to live in current day North Korea or pre-1990 eastern bloc countries, or in East vs West Germany.
An astute observation, if your knowledge of history begins and ends with the 20th century.
Maybe we can look at societies where the modern era hasn't touched, like some places in Africa. Why is the quality of life so great there that everyone wants to move from hypercapitalistic societies like the US to Africa instead of the other way around?
300 hundred years ago, every country in the world was ruled by an absolute monarch, and that fact alone was considered persuasive explanation of divine will: the world must always be thus. Since then, the philosophy of rulers has changed, but small-minded apologists for the status quo have not evolved in their thinking. "If our current approach isn't the best option," say the small-minded apologists, "why isn't anyone doing anything different?" The answer to that question, in case it wasn't obvious, is the same as it was 300 years ago: entrenched interests.
Are you seriously arguing that it is impossible to allocate today's abundance of resources in a more fair and productive way than our current system does?
Once people are given all the resources they want they are not motivated to work. The productive people get tired of the product of their hard work being forcibly taken away and stop working since they would be given resources anyway. That's how the system collapses since there aren't enough resources for everyone to sit and consume. Thats exactly what happened in the eastern bloc. https://www.chron.com/neighborhood/bayarea/news/article/When...
How many times should we run the same failed experiment and ruin millions more lives?
https://www.africadatahub.org/blog/what-usaid-funding-of-afr...
https://www.ft.com/content/c10e4f2f-5564-42a4-8aa7-66c78ca1c...
https://finance.yahoo.com/economy/policy/articles/kathy-hoch...
You are again straw manning an argument. I said nothing about giving people all resources with no work. In fact, I explicitly said the opposite: I want a society where people compete to provide labor in order to gain material advantage.
My argument against capitalism is that that competition should be fair: people should compete for resources with labor, and not against those who contribute no labor.
If someone wants to passively invest $3M into a new coffee shop and pay labor to work in it, banning it like you want to do will kill the economy and disadvantage the little guy.
Total non sequitur. Labor (and salaries) predate the existence of money, as well as capital investment.
Even under capitalism you can still volunteer, donate and create community orgs to build things, there's nothing stopping anyone.
Huh? You think that before investment, people didn't trade good and services of their own free will? You need to re-examine history. Commerce predates civilization.
If you think that slavery isn't needed under capitalism, how do you explain the extensive use of slavery under capitalism?
> Even under capitalism you can still volunteer, donate and create community orgs to build things
That's true, and is completely irrelevant to our conversation, because we're not discussing volunteering, we're talking about the distribution of profit. If there is no profit, there is nothing to distribute.
The Chinese, famously?
https://en.wikipedia.org/wiki/Reform_and_opening_up
> The reforms [starting in 1976] de-collectivized agriculture, abolished the people's communes, relaxed price controls, allowed foreign direct investment into China, and led to the creation of special economic zones, most prominently the Shenzhen Special Economic Zone and the Shanghai Pudong New Area. Private enterprises were allowed to grow, while many state-owned enterprises were scaled down or privatized. Shanghai Stock Exchange and the Shenzhen Stock Exchange were established in 1990, allowing a capital market system
Free commerce is not the same as capitalism. A country where production, wages, and ownership are decided centrally can hardly be said to be unfettered capitalism.
The reforms in China I listed heavily cut down on that. Are you claiming that China is somehow less capitalistic now compared to 1976?
By your metric the US isn't capitalistic because NASA and various govt agencies and entitlements worth trillions of dollars a year of taxes exist.
The US, like China, continues to use a mixed approach to economic management in the form of regulated capitalism. The degree of regulation in the US has been declining since the 1950s, resulting in larger wealth inequalities and more poverty.
Put another way, capitalism, like communism, is one of those pure ideologies that has never really been given a fair shake. In fact, human nature rules out the possibility of a fair trial for any pure ideology. We are political creatures, not ideological ones. If you really are beyond your high-school years, as your account age suggests, this should be obvious.
Unsurprisingly, the most successful systems are those that have proven to be better at meeting human nature on its own terms. Hence the triumph of capitalism as it is practiced today, which for all its flaws has the advantage that you don't have threaten people at gunpoint to force them to engage in it.
All the reforms fit a capitalistic model, not just a free commerce model.
https://news.ycombinator.com/item?id=48231586
And of course, Mao's communism was very anti-capitalistic.
Surely there is a disincentive to working hard as taxes approach high levels while resources are increasingly provided for free if one doesn't work. The Laffer curve and all that.
If you keep increasing taxes and reward people that don't work by giving them free and easy wealth, the tax revenue will actually go down at some point instead of going up, leaving less to redistribute. It's like killing the goose that lays the golden egg.
https://fee.org/articles/the-laffer-curve-its-time-to-stop-l...
That's one approach, but not the only one, to eliminating capitalism.
> Surely there is a disincentive to working hard as taxes approach high levels while resources are increasingly provided for free if one doesn't work. The Laffer curve and all that.
So in the US in the 1950s and 1960s, when the highest marginal tax rate was around 90%, did people suddenly stop working? Or did the US enter its highest period of productivity and income equality?
Why is your article making claims that, while true, give a distorted view of 1950s tax policy? It's certainly possible that an organization called the "Tax Institute" has an agenda they are trying to push.
[1] https://rooseveltinstitute.org/blog/effective-progressive-ta...
When did capitalism begin? How was 'stuff' created and distributed prior to that? How do other, distinct and contemporaneous modes of production create 'stuff'?
Capitalism began when Thag declared that he owns all the dinosaurs, and anyone who hunts a dinosaur must pay him 10 percent of the meat as a tribute, or else he will stab them with his spear.
First, pedantically, we did not share time with 'dinosaurs' in the sense you imply.
Secondly, pedantically, that kind of hunting was not the main source of calories for hunter-gatherers. It's more apt to imagine them as gatherers first and primarily.
Thirdly, and also pedantically, you are not describing the system of capitalism that I, and most educated people talk about when they use the word. That system has only been with us in the main for, generously, 250 years.
Critically, Thag and Grog both own the means of production for their spears and 'steaks' respectively. The necessary abstractions for capital accumulation, debt, and private ownership simply do not exist.
And as a matter of fact, there are many examples of non capitalist societies.
Communist countries copied technology, their inventions are very few. Capitalist countries routinely exhibit rapid technological development.
It was driven largely by people who wanted to make money off of their inventions. None of the progress came from communist countries.
Did you know that Gutenberg invented the printing press in order to make money?
Did you know the Wright Bros invented the airplane in order to make money?
And so on and so forth.
I am getting a little tired of repeating myself, but you're evidently confused so I'll indulge you.
The opposition to capitalist as a monetary system does not imply the opposition to the profit motive. As I've said several times, and which you continue to ignore, the exchange of goods and services in the form of commerce requires the profit motive. Conflating my position with communism is a straw man.
Since Marxism never works, there's something definitely wrong with the tenets.
Are you familiar with the idea of a thought-terminating cliche [1]?
You have given yourself permission to ignore everything associated with Marxism because you've been taught that it's "wrong." If you actually thought about your statement, you'd realize that you are quasi-intentionally dismissing ideas without consideration.
1. What does it mean for Marxism to have been "tried"? Do you consider the Soviet Union to be Marxist? I don't.
2. Even if Marxism had been "tried" and failed, so what? Do we dismiss capitalism because of failed capitalist states?
3. Even if Marxism in practice was futile, does that mean that very idea espoused by Marx is necessarily wrong? No, it does not. Newtonian physics is "wrong" in light of relativistics but there is still very much right about it.
[1] https://en.wikipedia.org/wiki/Thought-terminating_clich%C3%A...
But "capitalism" in its historical and practical meaning means nothing other than commerce, i.e. the society based exchange, the system of production based on exchange. It was only through capitalist accounting methods that businesses were able to conduct commerce in such a way as to contrast costs and proceeds, and therefore create the optimizations that lead to mass computer production or, what is the same, cheap computers for the masses.
Completely wrong. Many of my comments here distinguish commerce from capitalism.
Commerce, ie the exchange of goods and services, has existed longer than civilization. Even some animals do it.
Capitalism is specifically the substitution of labor with ownership as a means of profiting. This produces an imbalanced market: some people compete for resources by selling their labor, while others compete simply by owning capital: the means of production. The problem is that the latter mode allows unlimited accumulation of wealth, while the former is limited by time and effort.
Imagine if Elon Musk was working a salaried job that paid $60000 per hour. How long would he have to work in order to earn his current fortune?
The exchange of labor, to be sure, has existed nearly as long as civilization itself, perhaps longer, as all people cooperate by exchange through the division of labor right down to the family, and it is exchange whether the articles to be exchanged are money or physical things or even intangible, ephemeral things like love, pride, loyalty, or otherwise. Since human society is human cooperation by the division of labor, by your definition capitalism is nearly synonymous with human society itself. Fine by me.
I have no problem with the concept of money. Commerce always the exchange of good and services, including on a symbolic level: as you point out, affection, money, etc. "Money" is not the distinguishing factor between commerce and capitalism.
At the risk of repeating myself: the distinction is how wealth is acquired. Capitalism allows one to acquire wealth merely by possessing capital, which in turn engenders unlimited capacity to acquire more capital. Capital is unique among all those systems for that reason.
The distinction between capitalism and earlier forms of production is that money provides a means to index the yield of assets by capitalizing the value of those assets. The ability to quantitatively track the yield provides the ability to determine whether you are able to replace the asset or if you are consuming it. Accumulation can be planned by resolving to consume less than the yield of the asset. Capital and capital accounting, too, has existed nearly as long as civilization has existed. But the cause of the yield is in principle no different from the yield of resources in pre-history, which is refraining from consuming more than you produce. What is unique is the ability to determine the economic yield of things quantitatively, not procedure by which wealth accumulates.
Money is used by loaning it out, which requires no effort and most importantly: the amount of money you can loan out (and make a profit from) is not limited by the number of hours in the day, and therefore owners can always out-compete laborers.
> The distinction between capitalism and earlier forms of production is that money provides a means to index the yield of assets by capitalizing the value of those assets.
Now you're getting it!
Money is a medium of exchange. It is used by exchanging it for something else. A loan involves trading money in the present, which is more valuable, for money in the future. What produces value here is surrendering present goods indirectly through the intermediary of money. The creditor gives up consumption so that others can consume or produce earlier than they otherwise could have in absence of the loan. This is the value produced by loans in the eyes of the debtor.
> Now you're getting it!
Notice how any market automatically involves said accounting immediately when money is used. Your earlier insistence that markets and capitalism are distinct cannot be maintained.
A third of the world lives in poverty. That's the fault of capitalism.
There are so many other places where this sort of low-effort high-school edgelording fits in better than here.
A good sign of low-effort edgelording is championing an obviously broken system by using a straw man to disparage the alternatives.
So what you're saying is that capitalism lifted about two thirds of the world out of poverty.
Thanks to capitalism, I don't have to toil in the fields.
No, that's thanks to commerce not to capitalism. Capitalism benefits those those who hold capital, which is not me.
The fact that there are more than enough resources for no one to live in poverty should suggest to you that something is wrong with the distribution system.
"It's true, Mr/Ms Rationalist, that our patented Miracle Medical Snakeoil caused a third of your leg to become necrotic and fall off, but be glad for the two thirds that did not fall off!"
> No, that's thanks to commerce not to capitalism. Capitalism benefits those those who hold capital, which is not me.
Are you toiling in the fields? It seems to me like your attitude is that "If I can't be rich, then no one should be rich."
> The fact that there are more than enough resources for no one to live in poverty should suggest to you that something is wrong with the distribution system.
So instead of two thirds of the world not living in poverty, everyone should live in poverty equally?
The problem with capitalism is not that some people get rich and some people don't. The problem is that of an unfair playing field.
Everyone has a body and a mind, and commerce allows us to rent out those features in exchange for pay. People who are smarter or stronger or work harder or work more will be able to benefit more. That's how I got rich. But there's a limit to how rich I can get, because I have only one body and one mind and there are a finite number of hours in the day.
The other way to get rich is to own things. If you own a factory or real estate or bonds you get to charge other people and make a profit even though you are expending no effort. And in this case there is no limit on your profit, because you can use your profit to buy more capital and make more profit from that. The result is eventually a winner-take-all economy, where the winners own an increasing amount of society and everyone else pays them to use it. If that sounds familiar, it should, because it's feudelism, and is the eventual end state of capitalism.
You should really read a bit about the philosophy that you're arguing so vehemently for, apparently without knowing anything about it.
> So instead of two thirds of the world not living in poverty, everyone should live in poverty equally?
No, that's ridiculous.
You had a good comment until you wrote that. Don't lower your standards with stupid personal attacks.
> The problem with capitalism is not that some people get rich and some people don't. The problem is that of an unfair playing field.
I would love for things to be fair, but I grew up in the real world and learned that things weren't fair back when I was a kid in primary school.
Instead of lamenting about something that I can't control, I decided to focus my efforts on what I can control. Instead of tearing other people down, I built myself up.
Unless you can change the human characteristic of greed, the world will always be unfair. You can spit into the wind, or you can set a sail.
I apoligize for judging you based on the things that you write.
> Unless you can change the human characteristic of greed, the world will always be unfair.
There is nothing wrong with greed or unfairness, to a degree. As I said in my previous comment, some personal characteristics will naturally lead to inequality of outcome. That's fine, because everyone is deriving profit from the (variable quality) work that they are personally able to produce. I would say that greed and unfairness are essential to any system of commerce, which I support.
Capitalism, on the other hand, allows inequality on a grand scale that necessarily results in a society that no longer rewards hard work: the lords own all property, everyone else works for them, and there is no way to achieve wealth competitive with that of a lord simply by labor. The laborers work to surive, and the owner class consumes all the benefits. This is the system that we spent a century of war fighting to end. It seems silly to go back to feudalism just to appease the modern-day lords.
> Instead of tearing other people down, I built myself up.
Who, do you suppose, am I tearing down? I want a society that rewards hard work. A system with no social mobility is not that system. I want people to improve themselves in order to make more money. What I don't want is a society where the owner class are able to be parasites on everyone else, producing no labor (physically or intellectually) but showing giant profit. The modern day US is increasingly distant from its much more socially mobile past, and it's only going to get worse.
I'm not saying that the current crop of billionaires haven't worked hard to get where they are. I am saying that their work is not proportional to their benefit, and at a certain point they are able to continue benefitting despite producing noting of value.
I apologize for thinking you were willing to have a decent conversation. I won't waste any more of your time.
Thanks!
You're welcome!
Risk : Reward, that's obvious, isn't it? I have known many relatives who bankrupted themselves trying to "own" stuff. I also know some who succeeded and are rich. Starting a business is very hard, try it.
In order to risk one's own capital, one must first own capital. Today's working poor, just like the serfs of times gone by, have nothing to invest but their own labor. It's hard to build a business when you're fully occupied in working to buy food.
You've inadvertently pointed out the fundamental inequality of capitalism: in order to get the (potential) benefits of capital, you must first belong to the capitalist class.
Besides, America's poor have a higher standard of living than medieval kings.
Only if you define the standard of living in a consumerist way.
I sure wouldn’t.
Capitalism by itself does not produce egalitarian wealthy society. The system divides the populace into "capital owners" and "workers" who are in direct conflict.
There are plenty of capitalistic countries where most people are poor. In fact many of the as said Western countries has also high levels of poverty while running capitalism in the 1800 etc until post WW2 social democratic movements.
Once you dismantle those social democratic constructs such as labor unions and start shifting more power to the capital holders you'll see how the society splits apart to rich and poor. The rich use their wealth and power to rig the system to benefit themselves even more and become richer at the expense of everyone else. Ultimately they will remove democracy because functional real democracy is a threat to their wealth.
1. Average height increased throughout the 1800s
2. Life expectancy increased throughout the 1800s
3. Plenty of photos and paintings of towns that consist of middle class housing
> The system divides the populace into "capital owners" and "workers" who are in direct conflict.
That's what Marx claimed. I've had many jobs. In none of them was I ever in conflict. It was a negotiated relationship, where I provided labor and expertise in exchange for money. I've also been a boss, and if you ever have been you'd know you had no power over your employees. They only work for you because they want to. When they stopped wanting to, they simply disappear, and there's not a thing I could do about it.
In the US, every worker has the power to walk away and start their own business. The wealthy in America did not come from wealthy immigrants, they came from poor immigrants.
They can walk away at any moment and there's absolutely nothing Amazon can do about it.
Amazon pays significantly above minimum wage. Why don't they pay minimum wage?
Amazon benefits to warehouse workers include heavily subsidized health care (starting at $5 per week), up to 20 weeks of paid parental leave, prepaid college tuition, and a 401(k) company match.
That's the leverage workers have.
Most proletariats don't have that option since they need their incomes.
When an employee has exactly the options of taking it or leaving it is not leverage.
There are more than 1.1 to 1.3 million businesses in the US with over 30 employees. But somehow, a person is only employable by one of them?
16.6 million Americans are self-employed.
Do you even listen to yourself?
1. Today's poor are as tall as rich people, meaning they get plenty of nutritious food. They're taller than medieval kings.
2. Fresh vegetables and fruit from all over the world 365 days a year.
3. Flush toilets.
4. Air conditioning
5. Central heating
6. Infinitely better medical care
7. Endless amazing entertainment at the push of a button
8. Can communicate with anyone in the world, for free
9. Anything you want to know, at the push of a button
10. Far better clothing
11. Cars you can drive anywhere
12. Fly at 30,000 feet in complete luxury across the country
13. Free education, in any field you want
14. Hot and cold running water
15. Hot showers
16. Microwave ovens
I can go on if you like.