What does this even mean? Sounds like an activist buzzword. What evidence do we have that there are even "stages" to capitalism much less that we are in a later stage?
Capitalism is showing its flaws if we're paying a million dollars per job just to bring the job to our soil, although I suppose it's better then just keeping Foxconn products (or products that integrate their components) out at ports (or tariff them, like Russia with phones without a GLONASS chipset).
So it's not capitalism at all. It's something else.
Undue influence of individuals with power (via money or other mechanisms) is hardly unique to capitalist systems. Every socialist country has had the exact same problems with corruption and misuse of power. It's also pretty trivial to argue that such corruptions and abuses are far far more toxic under socialism because there is no "pressure relief valve" in the form of competition. Socialism is predicated on a monopsony, and over time a market with a monopsony will likely result in monopolies on the sell side. You eventually end up with no alternative to the corrupt choices.
"Late stage capitalism" is a political term that was likely created by someone that considers themselves a temporarily embarrassed bolshevik central planner.
Capitalism existing under a state that will subsidize the needs of capital is still capitalism. There never was a period where 'pure capitalism' existed, so it's a bit disingenuous to claim that the system we have isn't capitalism.
The outsourcing and automation and optimizing away of blue collar American jobs was already capitalism working as intended. Somehow, Trump and the Republicans have sold middle America a bill of goods and convinced them that globalism and capitalism are opposed to one another, when they are the same.
What's happening here is very much anti-capitalist.
I kind of halfway agree with the OP, I just wouldn't consider it a flaw of capitalism.
From a capitalist point of view, blue collar jobs lost in the US to outsourcing and automation deserved to be lost. The market optimized for a better solution for consumers, and that solution was cheaper labor and automation.
A true pro-capitalist party would admit that, rather than pander to coal miners and steel workers, and would try to make the US more competitive in the modern, global marketplace rather than try to drag the entire world back into the tar pit of American industrial dominance.
A true pro-capitalist party would even embrace socialist programs like nationalized healthcare and education, if that would make it easier for displaced workers to re-educate themselves and re-enter the workplace, and compete more readily with labor throughout the world, and take the burden of healthcare off of employers. Invest in infrastructure and technology. There's probably even a capitalist argument for basic income allowing the repeal of the minimum wage.
But "write as big a check as necessary and party like it's 1949" is just pandering, it's not even a serious attempt at a solution for anything.
> The market optimized for a better solution for consumers, and that solution was cheaper labor and automation.
While not optimizing for the externality that those consumers are also the labor that's displaced thus destroying their ability to consume and thus not not a better solution for consumers after all.
The market is not magic, it fails often and it's very annoying to continually hear people brush off those failures with the no true Scottsman fallacy. If capitalism means to you only a perfect free market then it's a meaningless term because no such thing exists and more importantly that ivory tower definition is not what people are referring to when they use the word, capitalism as implemented in the real world is what they're referring to and jumping in and claiming "that's not capitalism" adds nothing to the conversation.
So yes, that is capitalism, because this kind of thing is exactly what capitalists do: they curry for favors from government to get into protected positions to avoid competition. Capitalism is what capitalists do, and this is exactly the shit they do. Crony capitalism is still capitalism.
> So yes, that is humanity, because this kind of thing is exactly what humans do: they curry for favors from government to get into protected positions to reap all the benefits.
FTFY. The problem you describe is a human problem that will happen in any system, capitalist, socialist or mix of the two. Power corrupts, absolute power corrupts absolutely. Capitalism simply provides power in a normal distribution proportional to wealth. Socialism provides power in a power law distribution and the head of that distributions constitutes absolute power.
I think he is saying that this is not capitalism. The existence of bailouts and government programs to direct the markets is not capitalism's 'need' for those programs, despite any politician's attempt to sell that idea.
Not based on what the article says. If the factory never would have been built in the first place, the taxes never would have been paid.
Before: 0 jobs, $0 taxes (factory doesn't exist)
After: 13,000 jobs, $100M taxes (down from $300M if no tax concessions were given, as per article)
The incentives would cost the state about $200 million a year but Foxconn's payroll in Wisconsin could reach $700 million a year, Walker's office said.
Also the $3B is the cost over a decade, not in a single year.
> If the factory never would have been built in the first place, the taxes never would have been paid.
That does not make the incentives any difference than a cash payment in exchange for building the factory.
> The incentives would cost the state about $200 million a year but Foxconn's payroll in Wisconsin could reach $700 million a year, Walker's office said
The relationship between “would” and “could” in that sentence is quite important.
> That does not make the incentives any difference than a cash payment in exchange for building the factory.
Sure it does. A state writing a check for, say $100 million dollars requires spending $100 million dollars (possibly borrowing it to do so). Giving $100 million dollars in tax reductions requires spending $0. The former may not be feasible, while the latter generally is, so the two are not equivalent.
Giving $100 million in tax incentives, conditioned on a specific act, requires just as much spending (or more, if the income from the cash payment itself would have been taxable) as giving a $100 million cash payment, with the same conditions, with no special tax treatment.
That people can fail to see this may explain why these deals are politically popular, though.
If you keep more of your money through a change in tax policy, you are suggesting that the government gave you money? I'd argue that you are keeping what was yours all along.
Being bled less isn't the same as receiving a blood donation.
> If you keep more of your money through a change in tax policy, you are suggesting that the government gave you money?
That's a complicated question in the case of generally applicable changes in tax policy, like a new tax credit available to anyone who posts on internet discussion boards.
It's a simple, straightforward “yes” when the change in tax policy only applies to me, and only for a specific action (post on HN about the Foxconn factory deal, and get $5000 of your federal income tax.)
The latter is more like a government contract (but without the competitive aspects and other controls designed to assure fairness and public value.)
It really is a choice between three outcomes. (1) No factory is built, no taxes collected. (2) Factory is built, company pays full sticker price on the taxes. (1) is unappealing because nothing is created. So we arrive at (3), where the company understandably wants to renegotiate the sticker price on the taxes and the taxing body doesn't want to end up in scenario (1), so they come to an agreement somewhere in the middle.
Why is this translated into the company received cash from the taxing entity?
Is there a way to find out how much Foxconn pays in U.S. taxes right now? Or how much revenue they earn in the U.S.? If Apple has Foxconn make phones in Taiwan, and Apple then ships phones to the U.S., then Foxconn doesn't pay any taxes to the U.S. on those transactions, right? Only Apple would right? If Foxconn doesn't pay any tax to the U.S. right now (???), and they build a factory in the U.S. and don't pay any taxes in the future, then it is a wash (except for now the U.S. employees would be paying income tax, etc.). Or am I missing a piece of the puzzle? (As in, maybe Foxconn is currently paying a lot in U.S. taxes from whatever operations they have in the U.S. currently?)
Let's say you want to take a portion of my income in exchange for career services that has a cost of 1,000 dollars a year for you to provide.
You say "pay me 20% of your 100k job" netting you 19k, I refuse to pay that steep of a fee and counter with "take 10% or nothing" netting you 9k.
I don't believe its fair to say that you have lost 10k if you accept my terms as the alternative is receive nothing. You have increased your revenue by 9 thousand dollars as opposed to earning 0 dollars. The option you proposed is simply not on the table and can't really be considered.
Those taxes are a cost of doing business in the state - akin to the rent on a property. If nobody wants to rent your property at your asking price, you can let it sit empty and get zero, or lower your price and get more than zero. You are not "forgoing" anything by lowering your price in that case. You never had that revenue to give up in the first place.
Corporate welfare has existed in every "stage" of capitalism, and the justifications suit the political moods of the day (jobs for one polity, greentech for another). This isn't anything new, and capitalism would be better off without it.
> What evidence do we have that there are even "stages" to capitalism
Uh, the fact that history exists, and that within the set of historic systems which follow the basic system of property rights distinguishing capitalism [0], there's a clear sequence of different specific systems in history.
> much less that we are in a later stage?
The same is also evidence that the current stage is later than the previous ones, those it is admittedly speculative (until capitalism is displaced) that it is the latest stage.
[0] There's some debate over whether the mixed economy that is currently dominant in the developed world is properly a “stage” of capitalism (the system dominant in the 19th century and first labelled “capitalism” by it's critics) and not a successor system with some common features, but we can leave that debate aside for now.
Seems like a repackaging of the arguments against socialism. Arguments which are ridiculed here on HN "Just because most socialist states collapse into hotbeds of corruption doesn't mean it will happen here!"
This is from Marx, who wrote The Communist Manifesto, among other things. I won't try to summarize, other than to say Marx treats this ("late capitalism") as a developed state of capitalism, sort of a mathematical limit/end state, where certain things are taken to be inevitable.
While I understand that the use of the term 'mathematical limit' is meant to imply a stable equilibrium, in this context it does make it sound as if there are rigorous mathematical proofs that these unmentioned things are indeed inevitable. I'm not sure if that's what you meant to convey.
I think a better choice of word might have been "asymptote". Thanks for pointing this out.
At the risk of being a bit pedantic, limits don't imply stability, though, only that something is heading in a certain direction, and may or may not be reached.
I'm dying to hear you expound on exactly what Marx actually says and why what he says shouldn't be taken seriously. Cites and quotes while you're at it, please. (No third parties, please--he clearly doesn't need the help.)
A basic primer is linked below for you. I'm sure you'll have wonderful, super duper insightful, and super smart commentary on it. Looking forward to it!
Have you read that piece? Because I have read it before, and Domhoff writes with regards to Marxists rather than Marx. If you're going to slag Marx for what Leninists and their derivatives have decided to read into it--well, that's a pretty curious thing to do. Not uncommon, because frankly most people haven't actually read Marx and are unqualified to opine, but I know for a fact that Domhoff has, which makes this...well, like I said--curious.
The one criticism of that article I do have as far as what people he perceives as "Marxists" think (and I'm not one, though I do think that the general shape of what Marx describes, as opposed to either Marx's end-state conclusions or Marxists-the-fear-object group might believe) is that social democracy, which I will helpfully point out is not "Marxism", has also fairly obviously demonstrated its bones over the last decade-plus, after the article's writing, as that late-capitalistic model has created additional, shitty stresses on populations. Free market uber alles has catastrophically failed in every nontrivial employment, and while heavily-planned or fully-planned economies have obvious problems, social democracies the world over have this tendency to mostly work. I won't call them a global maximum, because that's impossible, but they have a decent claim to a local one.
Anyway, let's be real: this isn't a "basic primer" and it doesn't contain the argument you thought it did after you googled "Marxism critique". You don't have to like the way things are going, but if you're gonna pretend to an opinion, maybe give it an honest go before you offer it?
We've asked you many times not to post uncivilly like this, so we've banned the account. We're happy to unban accounts if you email us at hn@ycombinator.com and we believe you'll post within the guidelines in the future.
What does this even mean? Sounds like an activist buzzword. What evidence do we have that there are even "stages" to capitalism much less that we are in a later stage?