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Comment by hoggle | Hacker News Reader

So, was Marx right all along?

Marx's solutions were crap but his criticism of capitalism was spot on. That's hardly surprising: in the social sciences it's usually easier to find problems than to fix them.

Assuming you're referring to Karl Marx, much of what he said of capitalism is very much true- it's a game of winners and losers. What he didn't give is what many historians would refer to as a 'viable alternative'.

This (or, I suppose, a corollary which is that the capital owners/means of production are always in the strongest position) is what I have recently been thinking. If you are afraid of this development, invest heavily in the stock market. That way, you have a big hedge in the form of capital ownership in case your career gets automated away: Automation benefits capital owners. You would of course have to do this before this development goes too far, or capital in the successful part of the economy will already be too expensive.

Most people are already aware that being wealthy is a good way to make capitalism work in your favor and that saving money is a good way to become wealthy over time.

It's not a coincidence that most people aren't in a position to save enough to live off their capital.

You missed my point: if we are indeed moving towards a world of very heavily automated processes and hence an increased rich/average divide, owning capital will be a lot more profitable than it is today. So you probably wouldn't need an extraordinary income to invest enough to be in a very strong position. As I said, it's a hedge.

But of course, it's a hedge that has positive expected value even if this scenario does not pan out, so I really don't see the problem here. The stock market still beats all other savings options for long-term (>5 years) investments. No need to see the glass as half empty; we could all be running around gathering nuts and berries and trying not to get eaten by lions.

You missed my point: as capital makes labor ever more redundant, it will be more and more difficult for labor to secure enough capital to live off of. The present value in dollars of said quantity of capital will decrease over time, of course. But I see no reason to believe that the value in terms of man-hours (or anything else that labor actually possesses) will decrease, and every reason to believe that it will increase.

Why? Because we've heard this one before:

http://www.theguardian.com/business/2008/sep/01/economics

and history has proven it wrong. The increase in productivity happened, but whoops! All the increases went to capital, diluting the pool so that it was just as hard as ever for the working class to jump to the capital class, despite the increased productivity! Funny how that works. Now Marc Andreessen is trotting out the old canard again. Fool me once...

> it's a hedge that has positive expected value even if this scenario does not pan out, so I really don't see the problem here.

I save. You save. Most people that can save do save, because everyone already knows what you're saying. Every gradeschool and every highschool in the US repeatedly burns the lesson of compound interest into the minds of our kids. They even use an interest rate that doesn't take into account inflation or reserve policy so as to exaggerate the effects of saving, if anything.

Some people lack the self-control to save, but they're in the minority. The majority don't save not because they don't know that it's a good thing but because they can't. They're barely scraping by. If the car breaks, there go their savings. If the toilet breaks, there go their savings. Labor these days simply doesn't have the leverage required to carve out a livable chunk of the capital pie, and your suggestion that they have the leverage but not the self-control or knowledge of how compound interest works is patronizing in the extreme.

Where I live (*Norway; so this post is based on observations in my own economy), 90% of the income-earning part of the population put their savings into real estate, even though this appears to yield a very poor return on capital. So I don't think this point is nearly as universally accepted as you claim.

Also, this 90% of the income-earning population earn more than enough to save considerable portion of what they earn - I earned less than the average before going to grad school, and I still saved >50% of my post-tax income through economically sensible lifestyle choices (shared housing, cheap car and low car usage, home-cooked meals, low consumption on gadgets). This situation is certainly not identical for everyone in the world, but for my five million fellow countrymen, there is vast room for beneficial changes here. Please refrain from accusing me of being patronizing without asking about the background. This is a discussion of a small part of a big issue; this is one idea of what to do for insurance if e.g. you're a programmer and worried about the future prospects of your profession.

You have a point with regards to the "working poor" and other below-median groups, and this is a very serious structural issue. I have never implied that the solution to poverty is to buy stocks.

No, he wasn't. Marx was about the state owning the means of production, and that isn't the case here. We have a handful of super rich people (oligarchs) owning the means of production.

Marx was about something else, mostly. You should probably read a bit more of (or on) him.

Mmmm, maybe you need to refresh your understanding of Marx. This oligarchy was well described by Marx, what you're saying he 'was about' was his solution to said problem.

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