The fact that anyone today thinks that any other economic system we’ve ever tried is any better than the one we have is a damning indictment of our education system.
The fact that USA's brand of late-stage capitalism is even considered capitalism is an even more damning indictment of our education system.
Somewhere between Feudalism and Karl Marx, Adam Smith is spinning in his grave. How much we don't have capitalism and are living, globally, under an oligopoly, replete with robber barons in tech clothes; one can only laugh at.
The amount of misery under "capitalism" says there's got to be a better way.
I’m open to suggestions, at the end of the day it’s what works that matters, it’s just that every other system ever tried is minimum an order of magnitude worse. I’m not particularly a fan of the ‘red in tooth and claw’ brand of capitalism in the US. It’s a bit raw for me, but undeniably very dynamic.
Meanwhile in my lifetime capitalism has raised hundreds of millions of people out of poverty and into solidly middle class lifestyles globally.
My wife is Chinese so I’ve seen first hand how economic liberalisation has transformed that country. The Chinese brand of capitalism is severely flawed, largely due to an almost nonexistent rule of law, but compared to what they had before its night and day. It’s a shame the CCP seems to be thoroughly mismanaging it at the moment.
Mayor Unterguggenberger introduced a demurrage currency in Wörgl during the great depression before WW2. He "printed" 10000 shilling worth of Arbeitsbestätigungsscheine (work confirmation coupons). The coupons are valid until a certain period, then you have buy a stamp and glue it on. This approximates a -5% interest rate. People didn't hoard the coupons and the town accepted them for tax payments. The town was out of debt within a year and unemployment has shrunk by double digit percentages. The depression was effectively over and all it took was the equivalent of food stamps/unemployment benefits except transferrable between businesses and consumers with a demurrage fee.
The system doesn't have to be adopted by every business or citizen. For instance, 10% of unemployment benefits could be paid out as a demurrage currency with tax acceptance and you would see large scale welfare benefits with almost no burden on the general population.
The only burden of this system is juggling two different currencies and an insignificant 5% annual fee on the issued demurrage money supply. If pay out 10% of unemployment benefits or 15 billion dollars it would only cost 750 million dollars in the liquidity fee and that is assuming the money doesn't immediately go back to the government for tax payments at which point the costs keep shrinking and shrinking.
The problems with the Chinese brand of capitalism and the USA brand of capitalism is that both are called capitalism and the general public hasn't developed a better language for debating the nuances of each. If anyone dare say that the USA brand of capitalism is imperfect, they're automatically assumed to be a communist (I'm not even kidding - https://news.ycombinator.com/item?id=35497892), which totally misses all nuance.
The claim that it's capitalism that has raised hundreds of millions of people out of poverty is a common one, but it's our technology that's advanced. If we were still living under feudalism and the industrial revolution and the Internet happened, hundreds of millions of lives would still have transformed. Thanks to John Deere and Monsanto and the like, billions of lives have been raised up from subsistence farming to where we are today. There's the argument that we wouldn't have this technology without capitalism, and the length of the Egyptian and Roman empires without the Internet lend credence to this possibility, but it's also impossible to deny that we've never and can't test whether a system other than capitalism wouldn't also lift millions out of poverty, given the same advancements in technology.
It turns out that centralized, long-term planning is necessary for certain advancements. Eisenhower's US highway system, for example. Or the Manhattan project. Yes, the market is great for a large number of things. One of my most favorite is the food bank story, where they created their own internal market, with credits, and used that to more efficiently organize actors and allocate resources *.
I'm also just done pretending that USA's brand of capitalism is perfect, or that we have a free market in the first place in places where we don't (eg pharmaceuticals) but still try to run it in a capitalistic way, and then get surprised when someone like Martin Shkreli plays the game according to the rules, buys a company with a monopoly on a product, and then raises prices when that's just the rules we've set up for ourselves. Yes he went to jail, but that wasn't because he raised prices on Daraprim, but because he was also running a ponzi scheme and the attention made that finally catch up to him.
We're not going to get to a better system by upending what's been working well enough, but with smaller, more specific changes to the existing system to make it work better. Framing any changes to the system as a moral upheaval and equivalent to communism is the problem. We can have a better system. Yes, some of it involves sharing with others and caring for your fellow human. Some of those humans don't look like you and you may not like them. That's okay, you don't have to. There are people I don't like either. But what we have that works for some, also isn't working for others. When baby food is locked up because people are stealing it, if we assume it's mostly not being stolen and used for nefarious purposes, like cutting cocaine; if we assume people are stealing baby formula to feed babies, and that's criminal behavior according to the rules of our society; stepping back and looking at that from first principles, that all the rules of society and capitalism are for the benefit of humanity. If we really stop and think about that, something has gone wrong.
> The claim that it's capitalism that has raised hundreds of millions of people out of poverty is a common one, but it's our technology that's advanced.
The main factor there was economic liberalisation in south east Asia. Mainly China of course but not only. There was nothing inevitable about that, it was a political decision. The Soviet Union didn’t do it, North Korea didn’t do it, but China had Deng Xioping and he did do it. He or someone else could have easily gone a different way. My wife is Chinese and I’ve visited frequently in the last 20 years and seen the transformation for myself. My wife’s family there are among those who went from grinding poverty to a comfortable lifestyle owning several properties with 2 cars.
Owning properties privately, in China, before Deng that would have been unimaginable. My wife’s sister even owns shares. It’s capitalism gone mad.
Proto capitalism is what lead up to feudalism. The Roman empire didn't have modern capitalism with banking, company shares and insolvency but what they did have is a silver/gold standard with debt bondage. Debt bondage is still a thing in Pakistan and the dynamic is exactly the same. You borrow a little money, the interest payments become overwhelming, you are forced to work on behalf of the creditor who can decide your wage and the interest rate.and whether they pay you in food and shelter or in money. There is no reason why they wouldn't abuse this power.
You see it all begins very benign. A farmer has a bad harvest. He needs to bridge over this year until the next harvest. So he borrows money with interest. When the next harvest fails then he becomes unable to pay and is forced to sell his land and perversively, hired to work on his own land. He has functionally become a serf. All it takes is for this to spread to the rest of society and you end up with feudalism.
In other words, feudalism is what happens when proto capitalism is exaggerated to an extreme extent.
If you were to exaggerate modern capitalism I am not sure what would happen. Maybe hyperinflation, maybe world war 3, maybe a reform of the banking system, maybe mass starvation or maybe a revolution or maybe modern feudalism except serfs aren't allowed to own intellectual property or shares in companies.
So no, I don't think the problem is that we don't have capitalism. We clearly have more capitalism than we want or need. Robber barons are an intrinsic part of capitalism.
The answer is a market economy without capitalism. I don't even see why anyone would care about capital obsession in a free market anyway. That sounds inherently autocratic. At some point in the capital accumulation process one person owns the entire economy, how does that not make them a monarch eventually?
It actually seems to be about distributing power as much as possible. The effort right now with LLMs such as by Microsoft and Google is to rush to make them available to as many people as possible as cheaply as possible, even for free. That’s because this way they can create the maximum amount of value as efficiently as possible, with MS and Google skimming off the top of it all through advertising.
I’m sure premium private services will be a thing, but right now the sheer scale of the mass market seems to be a powerful democratising force. Let’s hope it stays that way.
I'm OK with accepting a certain amount of it. It's a thing. Is there a configuration under which there is no misery? What's the minimum possible amount of misery we could hope to achieve? My problem is that when people's thinking tends to go along the lines of "misery is bad therefore we must eliminate all of it" they come to conclusions that are counterproductive because they're trying to break the laws of physics.
If I came to a ludicrous conclusion, like we should eat babies because that would reduce misery, then attack that ludicrous conclusion. But being pro-misery because some people make bad conclusions from being against misery is, well, ludicrous.
The fact that you jump straight to Communism (without having the balls to openly say it) when nobody even mentioned it, that's a damning indictment of your education system. Or religious doctrine, I should say.
Ever thought that maybe Capitalism is just a small step in human history and that we can definitely do better? I wonder what happened to innovation, is it fine only as long as it doesn't threaten the status quo that keeps you complacent?
There are loads of other economic systems. Feudalism, oligarchy, tribal pastoralism, you name it.
I was mainly thinking in terms of critiquing the idea that value is created by labour, since HyperSane mentioned it twice in comments.
It happens that the labour theory of value in central to Marx but it’s not exclusive to him. Adam Smith indulged a lesser form of it in one of his uncharacteristic slip ups in economic theory. However it is in Marx that it achieves its most vertiginous heights of absurdity, and through his disciples that the most damage was done by it.
There is a direct causal line from the LTV and some of the direst economic disasters in human history. The most egregious case, despite some strong rival examples in Soviet Russia, is probably Mao’s Great Leap Forward which among other things fetishised steel production. Production creates value and steel is the most important economic product, so everybody should make steel.
It’s the damage the LTV caused itself that I was talking about. Communism is a political project associated with it but not directly what I had in mind.
As for innovation, I’m all for it. Capitalism maximises individual freedom by putting ownership of capital and rights of self determination of labour directly into the hands of citizens. By maximising individual economic freedom it maximises opportunities for economic innovation. This is why free market capitalist economies are so creative and dynamic.
Capitalism is responsible for chattel slavery in the Americas, the genocide of untold native populations in Asia, Africa, Ireland, the South Pacific and the Americas; famines and environmental destruction around the world; destroyed the stability of most of Africa, the Middle East, Central and South America; and it has rewarded bad behavior like pumping so much carbon into the atmosphere that we have irreversibly altered the climate of the entire planet. That's literally just skimming the surface - tetraethyl lead, CFCs, an anthology of chemical-related explosions and spills, the great Pacific garbage patch, depleted fisheries around the globe, the obesity crisis, the opioid crisis, the homelessness crisis, and so on.
I still stan (a version of) capitalism, I agree it's better than the other systems, but I do always get a giggle when people act like communism caused the worst disasters in history. They're not great, to be sure, but at least the Communists were mostly killing their own people through incompetence rather instead of killing the entire planet for avarice. It's humans all the way down, doesn't matter what system. Either you have accountability, or you don't and if you don't bad things happen.
Are you aware of the utterly catastrophic environmental devastation caused by the Soviet Union, and to this day by Chinese state industries? This is the problem with undemocratic centrally planned systems, with state controlled media. Complete lack of accountability.
Who's "we"? The West? The US? Humans? If it's the latter, we have had (and have) better - check out the Islamic financial system. It does have certain "capitalistic" principles (competition, no taxation by the government) but also places red lines against immoral practices. Best of all worlds basically.
Who said anything about knowing any good alternatives to the current system that could be switched to? If it was that easy, some country would have done it already, and they’d be winning the OECD.
I think the suggestion is rather that we are morally compelled as a society, to invest real effort into inventing something new to replace neoliberal capitalism.
States could, for example, be sponsoring experiments to validate new economic models, through e.g. low-barrier-to-entry applications for charter cities and other autonomous zones, as long as the applicant can show that 1. there is a novel economic model at play, and that 2. the zone is being carefully monitored to collect data for analysis by the Economics department of a major academic institution.
Economic experiments are going on all the time. Basic income, profit sharing, kibutz, all sorts. It’s not as if every western country is economically identical either. Neoliberal capitalism runs the spectrum from America to Scandinavia, via France.
One of the major advantages of neoliberal capitalism is it’s not exclusionary of alternative forms of economic organisation. It can exist very well alongside state capitalism, or almost anything else. After all individual freedom to organise as you choose is precisely its core characteristic.
If you want to establish a workers collective, or whatever you like, there really aren’t any barriers to doing so. In fact they do exist, some have been very successful. That’s great, but the fact that they are vanishingly rare I think says a lot more about the inherent problems with such systems than they do about capitalism.
