I liked the turn of phrase "Capitalism, in other words, holds less appeal in an era when the invisible hand feels like a death grip."
The article is very clear that the term capitalism wasn't defined in the survey, so "What do these category-based questions really tell us, then, about the allegiance of youth to ideologies? Nothing." Instead, it says to look to the policy question to get a sense of what young Americans think.
My interpretation - young Americans reject neoliberalism. But as the article comments:
> “Neoliberal” has gone from a term that describes an advocate of specific economic and political policies to an insult hurled indiscriminately on social media.
Err, blush.
The end is also nicely put:
> You do not need a survey to ascertain the plight of American youth. You can look at their bank accounts, at the jobs they have, at the jobs their parents have lost, at the debt they hold, at the opportunities they covet but are denied. You do not need jargon or ideology to form a case against the status quo. The clearest indictment of the status quo is the status quo itself.
They do? Global poverty is at an all time low. Things only the 1% had 10 years ago are now in the hands of almost every single individual, information no one had access to 30 years ago is now available to everyone in milliseconds. I'd say capitalism is doing just fine.
The problem is that capitalism has been so successful that everyone feels entitled to its gains instantaneously. Because of global trade wealth can easily become concentrated because market expansion pushes up capital availability and equity of people who have it. Most people in the top echelon of wealth hold it in stocks. That's why when we have a crisis (like 2008) the wealth gap collapses.
On your last point: from a historical chart [1] of U.S. net household wealth (in a 2014 Economist article), it seems the wealth gap didn't collapse or even moderate its increase in 2008. Indeed, it's reached the same territory which, in 1917, inspired the passage of progressive income and estate taxes in the U.S.
There's no doubt it re-accelerated after the crisis, but a lot of that has to do with credit conditions and tight money for the poor, and loose money for the rich.
Thank you for the link. I think the numbers quoted don't indicate a collapse in the wealth gap around 2008.
The WSJ article includes this observation: "The world is still staggeringly unequal, with the tiny sliver of those with $5 million or more in assets (we don’t have the exact number but it’s clearly a select club) owning more than the total population of those with $100,000 or less."
Perhaps there was a small inflection in the evolving wealth gap curve around 2008, but it seems minor and transitory. The article's numbers seem consistent with that.
Most of the world isn't capitalist, or at least not traditional western capitalism. Including the west currently, which is in an orgy of corruption and distortion and central control and unfree markets.
Your explanation of how things that used to be valuable are now valueless is exactly the problem from the article. If technological trinkets that are highly entertaining but inherently fundamentally worthless are our generations Faberge Eggs, or clickbait journalism on the internet or music on the internet or pr0n on the internet or social signalling spirals on the internet, that's "great" that its worthless so everyone can have it even if they have no money. On the other hand, when its labor or skill or craft or art, that's kind of a problem for everyone who has nothing else to sell, when that's basically the entire population.
There is also a forest for the trees argument. A state that fails most of its population is a failed state. Doesn't matter if one tree is in the best shape in history, or really that one tree doesn't matter at all, if the rest of the forest is dead. Failed states are ripe for revolution and that really great tree is going to get chopped in the guillotine no matter how great its achievement. A state that fails to serve its population will eventually get replaced, peacefully or otherwise.
The Global poverty might be lower, but at the same time there are more people in poverty since the middle class is dying out on every continent. Pretty sure the average American/European has more debt and is worse off than 30-40y ago.
Capitalism is based on debt/interest, which by definition is broken and only follows a downward spiral.
>>They do? Global poverty is at an all time low. Things only the 1% had 10 years ago are now in the hands of almost every single individual, information no one had access to 30 years ago is now available to everyone in milliseconds. I'd say capitalism is doing just fine.
It's not about material possessions. It's about power and representation. Wealthy people have an absurd amount of influence on the political process, and as their wealth increases in proportion to that of the poor, so does their influence.
Capitalism as an economic system may be fine. The problem is the way it is tightly intertwined with our political process and governance.
Culturally we seem to take the benefits of capitalism completely for granted. Nobody exclaims "capitalism is fucking amazing" when their favorite tv show is renewed for another season, or when a new awesome tv show is created.
If people made the connection that capitalism is the thing that's creating all these things in your life that you love.. that those things don't materialize magically as a result of people just doing their thing... that would change the perception of capitalism dramatically.
Capitalism see labor as a cost, and though outsourcing, overseaing, and automation attempts to drive that cost to as close to zero as possible. The fundamental problem is that people derive great benefit and satisfaction from their labor, their participation in production, and the knowledge of a job well done. Capitalism, over a long time, will always deny people that satisfaction. Young people can feel that truth in their everyday. It's Capitalism's fundamental, and intrinsic flaw. Work matters, and it is not a cost, it is a benefit.
People derive satisfaction from their labor, but they also derive fatigue, frustration, and dismay from it. There is a reason why people generally demand a for doing non-hobby projects. This means it is, on balance, a cost.
What's the best alternative to capitalism in your mind?
Capitalism is pretty good at making sure people are doing something actually useful to others, that's where a lot of the satisfaction of work lies in the first place.
Not all work is equally satisfying as well. Most kinds of work would make me miserable. Capitalism is great because you have a lot of wiggle room - you choose within the intersection of your abilities and what the world wants.
If your preferred work is something useless to society like digging random holes or whatever, you may be able to do that in a capitalist system as well if we implement some sort of basic income.
My first knee jerk argument was 'no true scotsman' capitalist edition, but that got me thinking.
Capitalism is basically markets on a large scale, and some form of market will exist as long as a single person has opportunity costs and performs some sort of optimization. Markets will always be with us in some form. How could we even go about opting out? Being dissatisfied with capitalism as a concept seems like being dissatisfied with gravity.
There are anti-capitalists who support markets, and it is not ridiculous to do so. Capital is a concept independent of trade, though the two tend to rub up against one another a lot in the Western world.
So, it's not necessary to oppose all trade in order to oppose the notion that one person can own everything people need in order to survive and rent it to everyone else.
That's absolutely fair. I was thinking of opposition to capitalism in pretty stark terms before you brought this up. The kind of Stalinist everything is centrally planned kind of totality.
That's like saying that hierarchy will always be around so being dissatisfied with it as a concept is like being dissatisfied with gravity (in feudal times). There are matters of degree. Genuinely curious: feudalism is to hierarchy as ? is to capitalism.
I think maybe some people think feudalism : hierarchy :: capitalism : markets.
I hadn't considered it that way, so thank you for a second point of view. I had been thinking of capitalism as the 'natural state' or lack of power being applied.
My best shot: Feudalism is to hierarchy as usury is to capitalism.
The natural state seems like people taking from outsiders and sharing amung their inner circle. Capitalism needs a lot of outside influence to keep going.
I don't know but I suspect my definition of capitalism and yours are different. From my perspective if I have a goat, and that goat has kids, and I trade you one for some seeds we have a functioning, but tiny, instance of capitalism.
I used my resources to produce more resources, you did too, and we exchanged in a way we both considered to be in our best interest (Or we wouldn't have done it).
I'd suggest this is more of an endorsement of free trade. (That is, no external party forced you to trade goats for seeds.)
Lots of societies have free trade that I don't think would be usefully described as "capitalist." (And anecdotally societies in which free trade is discouraged seem to end up with a lot of black market free trade activity -- it is just too powerful an attractor.)
To me capitalism is a more descriptive of a narrower and more modern development. Free trade is an aspect of it, but not sufficient to describe it.
I think I had made an assumption between countries like Venezuela and Soviet era Russia that had large black markets for a lot of goods and them being the opposite of capitalism.
Capitalism is not a natural state at all. It needs a sophisticated society, a rule of law, police and a majority who believe it is just. If this were not so, the disadvantaged would simply take or steal what they think they deserve.
It's more natural than centrally planned economies, which absolutely require rule of law, police, etc.
Capitalism is 1) that the relative value of choices needs to be determined and 2) those values are best crowdsourced.
If the rule of law breaks down, people will still trade, they will just trade for things that cannot be stolen or reneged on. Things like honor or reputation. This obviously eliminates the efficiency of a common currency, but at the end of the day, choices still have various priorities and the world is too complicated for even the smartest people to evaluate all the choices for everyone.
Anyway, those are the natural laws. Choices need to be made. Crowdsourcing is best when evaluating prices, especially regarding common goods and services.
My best shot Feudalism == Capitalism (specifically, unfettered capitalism).
Seriously.
Markets are where capital (ie. prior labour(yours or some one/thing else's)) is arbitraged for gain. The important part of this rather simplistic point is the arbitrage, it infers that the system is based on the twin concepts of demand and ownership, (or opportunity and opportunity-cost if you like).
Capitalism is the word we use to describe the de-evolution of markets into the private ownership of the means of production. In other words, where enough asymmetrical arbitration has taken place to enable an entity to buy out the rights of someone else to own the profit (ie. the demand portion) from the fruits of their labour. The ultimate expression of this private ownership is the ownership of the people themselves, ergo Feudalism.
Funnily, the last few centuries we attribute to the rise of capitalism, is actually the death throes of unfettered capitalism. See, the interesting thing about ownership it is a social compact, not a natural state. We can trade an item to both our benefits, only because we both agree that you own it and I do not. In a sense, the power IS the asymmetry in the arbitrage. Where this power is balanced between parties, we have free markets. Where it is not balanced, we have capitalism.
In fact, I like to argue that feudalism and capitalism are two facets of the same thing they're both about of having the control over the means of production. The only difference is in the mechanisms of both of those elements (means of production and control over it): in capitalism, the means of production is money, and the control is achieved through the legal system; while in feudalism, the means of production was land, and the control was achieved through military power.
If you look at it, there is a pretty clear evolution of those mechanisms: the military power became centralised in the form of the state, which then introduced the legal system as a less damaging way of resolving conflict; similarly, the value of property became measured in gold, which became the standard for a "virtual" currency, turning eventually into the fiat currency.
The two (means of production and the mechanism of control) feed off each other, with the former paying for the latter. And if you look at it, as soon as a society collapses the mechanisms revert to more "primitive" ones.
obtain a large enough, easily available enough pile of money today, to invest in productive resources, to generate a long term higher than inflation income stream.
It has very little to do with markets except rather abstractly along the lines of a financial market being one way to obtain that money.
The article has it backwards. Capitalism as a system has already completely given up on young americans. Almost completely closed and nearly impenetrable. Some young americans have noticed and unchecked the "like" right back at it, as if it cares.
Its hard to run capitalism efficiently enough for it to work without free markets or in the presence of insane levels of corruption or income inequality. Young people will never experience economic conditions where capitalism works, so liking it or not is fairly irrelevant if its not going to work anyway.
I think people should be given a stark choice - either eat government provisioned rations, take public transport, and live in public housing (socialism) or contribute to a fluctuating capitalist economy and roll the dice a bit. Then likely make a bit more money on average, although less predictable (capitalism)
The thing is that capitalism[1] can work reasonably well for almost everyone if capitalists weren't so shortsighted (and petty). Many Nordic countries get this right and their populations are the better for it.
As Schumpeter argued, capitalism enables its own enemies. Under socialism, the critics would be too busy trying to get the next meal to theorize critiques of capitalism. Despite our serious problems, we've never had it so good as in the last half century. We certainly would be worse off under any other economic system.
Unfortunately, this is a generation that gets most of their civic awareness from Hollywood, social media, and a homogenously leftist intelligentsia. Throw in a crisis and some stagnation, and is it really any wonder that young people hold such preposterous views?
What is incredible is that you can't conceive of how an average of six hours of TV watching might allow for many people to watch zero hours of television.
But since you brought it up, maybe you should look into what kind of people watch >6 hours of television per day.
hodwik is calling the entire poor class lazy. If being uncivil is something that's not allowed here, then why isn't he being reprimanded for being uncivil to an entire class of people?
> Under socialism, the critics would be too busy trying to get the next meal to theorize critiques of capitalism.
Obviously untrue. Even under Leninism and its offshoots (and leaving aside whether or not those are actually socialism) people (not the same people) were able to develop both new critiques of capitalism and critiques of the system that they were living under (in the latter case, this was a dangerous act, but people did it nevertheless.)
My god, you're so right - any criticism of capitalism is indeed preposterous! You should write a strongly-worded letter to the author of the article to set her straight.
What's preposterous about it? Minimum wage is less now than its been in 50 years. Do you really think that your average person has it better now? It's hard to get into a trade and your only other route is college which will put you in debt. Then once you have a degree you have to actually get a good job.
This doesn't even get into the fact that normal people are competing against people with wealth for the same coveted spots in colleges. That typically means better high schools, more opportunities, less debt (parents can cover). It's not surprising to see why younger people are upset. They economically don't have it as good as their parents!
It's easy for most of us to simply write off these people as lazy, stupid, whatever. But, we often forget how much easier we had it and just how much luck plays into things. Shouldn't we be trying to find a solution where people don't need luck to make it?
I think if you had a time machine and went back 50 years you would quickly realize all the things you're taking for granted that we have now. Right now is the best time ever for humanity.
The thing about capitalism is you need to find a path that lies in the intersection of your abilities and what the world wants.
Unfortunately in the US the default path is getting a college degree in whatever - and we're continuing to funnel young people down that path even though the world no longer wants generic college graduates.
College may still be a good path, but pick your major carefully based on empirical salary data and consider how long it will take you to pay back your tuition.
Sure, you can blame it on capitalism if you want, but pay close attention to a recurring theme in this article such as
" The minimum wage, which peaked in 1968, would have reached $21.72 in 2012 had it kept pace with inflation."
Along with
"Prestigious jobs are increasingly clustered in cities where rent has tripled or quadrupled"
This is not a mystery. QE and inflation is a direct wealth transfer from the poor to the rich. It's basic math and I'll repeat myself once again. When the upper middle class and rich can leverage themselves into assets that grow proportionally to inflation, they get richer and poor people get poorer. This is in addition to the fact that inflation is often a lopsided event from the top down (Fed lends to banks, which then lend to consumers etc.)
Can you elaborate on how QE and inflation is a direct wealth transfer from poor to rich? Do you mean that QE funds upper class purchase of assets with cheap debt versus inflation's havoc on lower income savings/purchasing power?
And isn't QE ultimately beneficial to the poor, in that it's funding labor that would otherwise go unused during a recession (for example)?
The phrase "direct wealth transfer" might be too strong, but it's clear that in many cases inflation has a disproproportionate impact on low income people than on high income people. Higher income earners are more likely to obtain regular pay-rises than lower income earners, so inflation has less of a negative impact on their pay. Lower income people tend to spend the vast majority of their income on meeting their basic needs, so any decline in real income has an immediate negative impact on their standard of living. Higher income people tend to allocate much more of their income to saving or investment, so a reduction in their real income has a much smaller impact on their standard of living. If an economic change makes the poor poorer, while the rich stay where they are (or even get richer), is it wrong to call that a "wealth transfer"?
QE removes government bonds from circulation, replacing them with reserves which pay less interest. This forces those seeking a return on idle cash to seek alternate mattresses, of which real estate is a handy one. This leads to more real estate transactions, and thus higher prices.
I'm no economist, but my understanding is that QE subsidizes capital for banks (by lowering interest rates) with the intent to lower interest rates set by those banks and encourage investment. This first most benefits banks, which are obviously not staffed by the poorest Americans, and secondarily benefits those who will take out loans against those (mostly commercial) banks, namely large businesses (the "corporations" in common discourse, though I hate misusing that term). Eventually I suppose these lower interest rates will trickle down to other banks, allowing middle and upper class Americans to take advantage of loans poor Americans usually can't -- refinancing mortgages and home equity loans, for example.
The argument that this helps the poor seems to rest in the conclusion that eventually QE will speed up recovery for everyone, but even if they do "benefit" from QE down the line, they will now be paying for QE the same way the rest of Americans do -- through their taxes (at some point down the line anyway).
Also,
> And isn't QE ultimately beneficial to the poor, in that it's funding labor that would otherwise go unused during a recession (for example)?
In the case of commercial loans I guess this is possible, but that's certainly not the point of QE, which is to stop businesses and people from pulling out or the markets at a time when that would have catastrophic events for the economy at large. I would assume that whatever portion of QE eventually trickles down to the lowest income brackets is largely offset by the corresponding inflation QE has caused, which is another way of saying that in real terms QE really helps the rich get richer, while the poor do not all that much better.
I suppose plans like the various stimulus packages that were proposed over the years would have had the opposite effect though (if they were effective).
Inflation and zero interest rates kills on two levels -- prices go up and saving is useless at a (near) zero percent return.
To make a return in this market, you either need to be rich and have access to investments funded by cheap debt or you're forced into increasingly risky investments i.e. the stock market.
Very different from the previous environment where you could save for decades at 5% and rely on compound interest.
> When the upper middle class and rich can leverage themselves into assets that grow proportionally to inflation, they get richer and poor people get poorer.
So, basically, "When in a capitalist society, the upper middle class and rich get richer and poor people get poorer."
No, he/she didn't say that and that's not true. We've oscillated a lot on the matter, between the gilded age, the new deal, the postwar years, and the reagan years into whatever the heck is going on now.
QE definitely benefitted the rich much more than the poor. Obama seems to have favored it because it was the only demand-side (sorta) stimulus that he could make happen with the politics being what they are. But nothing happens in a vacuum and it's not a definitive statement about capitalism vs other systems.
I'm well aware that they didn't say that. I'm saying that because disagreeing with them.
> that's not true.
Really? Why, in a capitalist system, would the upper middle class and rich, who are the only people with money to invest in assets that grow proportionally to inflation, not invest in assets that grow proportionally to inflation? Isn't the entire basis of capitalism that people act rationally in self-interest?
You addressed my first 5 words and ignored my further 3 sentences to justify those first 5 words, here. Could you do me and readers a favor and engage the argument here?
> We've oscillated a lot on the matter, between the gilded age, the new deal, the postwar years, and the reagan years into whatever the heck is going on now.
What matter could you possibly be talking about that spans a century of Western economics? What are you even saying?
> QE definitely benefitted the rich much more than the poor.
Agreed.
> Obama seems to have favored it because it was the only demand-side (sorta) stimulus that he could make happen with the politics being what they are.
Eh, who cares what Obama favored? That's not really even on-topic.
> But nothing happens in a vacuum and it's not a definitive statement about capitalism vs other systems.
I felt that I responded to this sentence well enough given it's not a definitive statement about anything, but if you'd rather I quoted it and responded to it separately, here's my response:
"Really? Why, in a capitalist system, would the upper middle class and rich, who are the only people with money to invest in assets that grow proportionally to inflation, not invest in assets that grow proportionally to inflation? Isn't the entire basis of capitalism that people act rationally in self-interest?"
In the future, if you want me to respond to your whole posts, maybe try making your whole posts make a coherent point.
No, printing money (QE, inflation, what have you) is absolutely NOT a capitalist tenet. Quite the opposite.
We do not live in a true capitalist society anymore, although we still use the term, and so disparage it. Creditism would be better, since the government and federal reserve push debt/credit like its the way the world aught to work, instead of production, saving, and intelligent reinvestment.
This is what bothers me so much about the new anti-capitalist push. Sanders is right about the banks and Wall Street and the like, but he's dead wrong that capitalism is the problem. The problem is this perverse crony capitalist centrally planned insanity we've been living in.
And this is not a republican or democrat thing. Its basically just the way things have worked for a long time, highly accelerating when Nixon stuck the final nail in the gold standards coffin.
> No, printing money (QE, inflation, what have you) is absolutely NOT a capitalist tenet. Quite the opposite.
It may not be a capitalist tenet, but it's an unavoidable result of capitalism. Capitalism works great for a little while, but then some people amass too much wealth and pull the ladder up behind them.
This is the only logical conclusion. Money and power allow you to change the playing field. So even if somehow we could start everyone off with equal opportunity and let them compete in a fair capitalist system, the ones who gain money and power early on will simply follow incentives and change the playing field in their favor. You can call this unfair playing field "perverse crony capitalism" and argue that it's not capitalism, and you're right, but so what? "True capitalism" will always turn into "perverse crony capitalism" so returning things to capitalism is at best a temporary measure.
> QE and inflation is a direct wealth transfer from the poor to the rich.
Inflation is a direct wealth transfer from holders of net dollar denominated assets to holders of net dollar denominated liabilities. (QE is not relevant, except as a potential source of inflation.)
> QE and inflation is a direct wealth transfer from the poor to the rich.
In high-inflation environment the debtors typically fare better than lenders. Aren't poor people likelier to be debtors and rich people likelier to be lenders?
yes, and the top post doesn't really make a lot of sense. Inflation devalues money, really poor people don't have any money.
The failure of the minimum wage not growing with inflation is a political one. If you want higher minimum wages vote for guys who campaign for the stuff, but it has nothing to do with monetary policy.
you of course and you would profit from inflation, but so would every college student with a loan or any poor family with a mortgage on their house. Debtors profit from inflation, that was the point
I think debtors will far more often be middle and upper class than lower class. The most indebted of the poor might have tens of thousands of dollars of credit card debt, but that doesn't really stack up against a $600,000 mortgage. Also in this day and age of getting your credit checked for everything it seems like a lot of poor people probably have fairly restricted access to loans.
Moderate inflation is in the interest of working people. While their incomes increase capital is eroded. That the minimum wage was not raised in line with inflation was a political choice.
The past 20 years have seen historically low inflation and interest rates. It's this fall in inflation and interest rates that has transferred so much wealth to property owners.
In cities where the supply of land is limited, the price of a home works out at about the level where your mortgage payments roughly equal what you'd pay in rent. Thus when interest rates are low for long enough house prices go up to compensate. With higher house prices the downpayment required also increases, making it harder to get on the first rung of the ladder. When inflation was high, people quickly built equity in their homes (since the mortgage principal is fixed but the value of your home rises with inflation.)
That's an insane claim to make and shows a gross misunderstanding of wealth and economics. Did you miss the part where I talked about leverage? This is basic math.
they should instead be giving up on big government which is undermining capitalism. it is big government that is holding them back through over regulation, over taxation, and playing political favorites. the same big government which has dumped hundreds of billions into education ever since the DOE was created with no improvement, the same big government which has expended trillions in its war on poverty with no improvement.
Bullshit. Americans are doubling down on Capitalism. They're taking out way more debt in order to take a chance at "making it big" a.k.a. a middle class job and a home.
The most interesting thing for me is seeing how the "public comments" section such as this one has started to shift.
I remember back when nearly everyone defended the system and people were shot down for suggesting that perhaps those who have power and influence try to influence and exercise power. (For instance, https://news.ycombinator.com/item?id=1182518, 6 years ago)
I think people still deny that this change has happened which make me think it's just a temporary thing.
the fact that we are living in a racist capitalistic nation does not make your Communist crap acceptable. Any and every communist experiment ever endeavored ends in failure and starvation. .. Usually at the hand of an oppressive tyrant. Take your screwed up world view and start your own communist utopia on an island far away from here. America is not a communist country. Progress your way out of this country.
That's the spirit! Glad there's a few of you left! :-)
Your hostility is perfect!
For the record, I advocate for criticism of all systems and an intellectual honesty and integrity combined with a willingness to learn, listen, and an openness to being wrong about, well, everything.
Obama is shit. His policies are what have killed the low end entry level worker. It's honestly ironic. Bush piled on the debt and tanked the economy then obama takes it to the next level. I don't have time to argue specifics you can read on your own. I am concerned that youth will not have the compass of true north that the older generations have. Most of Silicon Valley is full of topic skewed world views with a dusting of white guilt on top. God help us all Language is being shifted in a single generation.
I'm not picking sides here, but I generally stop reading someone's opinion on political matters when they start with blame for the president who presided during the time they believe the problems started.
Really, Obama himself is solely responsible for this? Not the party, or both parties, but specifically Barak Obama?
Well it couldn't possibly be all of the fabulously obstructionist Repubs in Congress that made it their primary mission to oppose the president on everything and refuse to compromise at all.
Asking people who are not thriving in a capitalistic economy (as numerous as they may be) what they think about capitalism is like asking the weakest sheep what they think about survival of the fittest. Of course they're going to associate the idea with hardship and injustice. No surprise there.
But I feel it, and I feel for everyone affected by it (and I'm not implying that those people are necessarily weak, by the way). Unfortunately, there will always exist some degree of disparity in resources and prosperity in society (at least, any "free" society), and a "fair" system is just one that provides opportunities for everyone; it doesn't give to those who aren't deserving (and of course, the definition of "deserving" is very much up for debate). But if those who do contribute more to society aren't rewarded any more than those who don't, then fairness ceases to exist.
What many people (especially the younger generation) fail to recognize is that capitalism is both the problem and the solution here. The real problem is, our current form of capitalism functions nothing like true "free market" capitalism. In a free market, education would be cheaper (you think the government subsidies, grants, scholarships, etc are doing anything but raise the price of tuition?). Every industry and business would have to prove their value to the masses (rather than certain players getting preferential treatment from government subsidies); otherwise our dollars would be voted elsewhere. As long as the government could ensure a level of transparency, we'd all get what we pay for, and of course, charities would still be able to do tremendous good in giving aid to the less fortunate (those who may be down on their luck, but not deadbeats). I truly believe that America's economic situation would be improved by those two things: increased transparency, and more freedom in the market.
When I hear someone blaming capitalism for their economic hardships, I like to imagine that person years in the future, now successful, having earned their way to a decent living. I imagine telling that person "ok, congratulations, but you didn't believe in capitalism, so give me all your wealth - I promise I'll look after it". And at that point, I can't imagine any response other than a resounding string of 4-letter words telling me to get lost.
I think you're deluding yourself, and your arguments have the same tone as defenders of communism when they say "oh of course communism didn't work in the USSR, but that's because they werent doing it properly!" Capitalism in 2016 is a hell of a lot less broken than capitalism in 1916 or 1816 when many markets were much less regulated. The answer is not "freer markets", but I agree with you that it's also not just more regulation. Instead, we need to be able to do more with less regulation, to have more efficient rules that make the economic game better fulfill its purpose of providing for everyone's needs and encouraging useful behaviours.
> I like to imagine that person years in the future, now successful, having earned their way to a decent living
Although looking at the social mobility charts, they're actually far more likely to be even more poor. But hey, keep imagining you're right!
I do agree that there's lots of horrible legislation out there. One problem I see in the US legislation is the schizophrenia in trying to maintain the illusion of a free market. All your politicians want to say they're pro-free market. But nobody aside from some of the more deluded Libertarians is going to accept poor people being turned away from the ER, or pharmaceutical companies being allowed to sell tainted drugs. So the legislation keeps creeping in, but without accepting that maybe this one sector isn't really suited to keeping up the "free market" charade?
What I don't like about this argument is that it vastly downplays corporations' ability to form monopolies and cartels in the absence of government programs to abuse. They are perfectly capable of using whatever means are at hand.
We've had periods of much less-fettered capitalism. It did not result in greater equality, in fact it had the opposite effect.
In regards to your last paragraph, you should realize that some people support redistribution not because they want rich people to give them money, but because they understand that capitalism is a flawed tool for tallying contribution to society, and a well-functioning economy needs a rebalancing hand. Likewise there are lots of people, capitalists even, who have arrived at your "success" scenario and yet still don't share your social darwinist views.
>>What I don't like about this argument is that it vastly downplays corporations' ability to form monopolies and cartels in the absence of government programs to abuse. They are perfectly capable of using whatever means are at hand.
Exactly. We have seen again and again that lack of government intervention in the economy does not lead to a "free market." It leads to monopolies and cartels.
>In a free market, education would be cheaper (you think the government subsidies, grants, scholarships, etc are doing anything but raise the price of tuition?)
Government subsidies, grants and scholarships were absolutely available in massive supply even 20 years ago, when annual college tuition for in-state public schools averaged about 10k (including room & board and books). The student loans didn't make it more expensive; the influx of students did. It's not the kids fault they were sold a bill of goods by their boomer parents, the media, and even employers about college being the only way to avoid fast food or ditch digging as a career.
>I truly believe that America's economic situation would be improved by those two things: increased transparency, and more freedom in the market.
Then, why is life-saving medicine that USED to be relatively cheap so needlessly expensive? That wasn't government regulation. Turing pharma with Daraprim, KV pharma with Makena, then doxycycline, etc., the list goes on. I think this is one place the government should have (and could have, actually) stepped in but didn't. The invisible hand is so darn arbitrary. Makes computers and flat-screens so dern cheap, but something that can save our life? Nah. Go figure!
Another example. I don't recall diamonds being anything but compressed coal. I don't think it's regulated much if at all (I don't recall the GIA being a government agency). There is no regulated market for it like there is gold and other precious metals. Yet, I'll be damned if it isn't expensive as hell. Why?
This isn't some local trend in history, everyone is born with anti-market bias. We come from small bands of hunter-gatherers with fairness and egalitarianism built in through reciprocal altruism. The problem is a lot of market policies seem unfair when you look at them at a glance. That's why older people become more fiscally conservative (including older liberals) because you start to understand the underlying mechanisms and the empirical support of market strategies. Read Bryan Caplan's "The Myth of the Rational Voter" if you want a more thorough discussion of this.
"Policies like a $15 per hour minimum wage — brought to mainstream attention not by Sanders, but by striking fast food workers years before — are not radical, but a pragmatic corrective to decades of wage depreciation. The minimum wage, which peaked in 1968, would have reached $21.72 in 2012 had it kept pace with inflation."
This is very, very false. Adjusted for inflation, the minimum wage in the US peaked at $10-11 in the late 1960s (http://money.cnn.com/interactive/economy/minimum-wage-since-...). Adjusted for PPP, the country with the highest minimum wage is Australia, at $11 per hour (excluding tiny Luxembourg and San Marino; data at https://en.wikipedia.org/wiki/List_of_minimum_wages_by_count...). No one has anything remotely like a $22 minimum wage. The median hourly wage in the US is below $22, ie. more than half of all jobs pay less than that.
I take the last quoted sentence to mean that the minimum wage "...would have reached $21.72...", not that it did reach that. Clearly, it didn't.
The author was illustrating the overall decline in purchasing power of the inflation-adjusted minimum wage, despite its nominal increase. Hence the economic decline experienced by minimum wage workers.
A lot of this is also simply put an issue of fraudulent paper money as well. Most gas here is $2.21 per gallon. As of today. Here's the rub...
Take a pre 1965 quarter. When it was still made with silver. If you take that quarter and melt it down. That .25 has enough silver to buy a gallon gas in today's silver price. $2.25 of fake inflated printed out of thin air "money" or a quarter made of silver. If the currency today was still constitutionally backed by gold and silver you could actually live acceptably working at McDonald's. So I say a good chunk of this is the currency.
Consider the software business. It's probably the most free market industry in existence, with a near total lack of government regulation, standards, interference, subsidies, price fixing, licensing, and oversight (with the exception of the disastrous patent system).
And look at the results: an ongoing, decades long explosion of new products, innovation, millions earning a great living, costs of software relentlessly driven to literally zero, revolutionary new technology every couple of years - does anyone think that could be made better with socialism?
On the other hand, the industries with the most government intervention seem to be doing the worst - finance, health care, higher education.
So you are saying that deregulating finance that gave us 2008 crisis was a good thing ? I think there are industries that need to be strictly regulated because they don't work for the good of the whole market if they are deregulated. One of them is finance.
2008 didn't happen because of a lack of regulation, it happened because of absolutely awful regulation. You don't need more regulation, you need smarter regulation. It is absolutely absurd that the federal government subsidized loans to (insolvent) poor people that they can't pay back -- resulting in subprime the mortgages that caused the crisis. Now, in no way am I saying banks had no hand in it; that's just untrue. But it certainly was not the one-sided affair leftist revisionists wish it were.
Last time I read up on this, I was led to believe that the regulations were only a minor factor, and the main thing driving the subprime explosion was demand in the investment market for misleadingly-rated mortgage-backed securities.
My understanding of the details is almost nonexistent, but I gather that there was some kind of statistical wizardry that let lenders load up a bunch of crappy mortgages into a package that was, in aggregate, supposedly an extremely safe investment with a very attractive return. These securities became the primary product, with the mortgages themselves being the raw material. The market demanded that production increase, so the lenders did the finance equivalent of drilling for tar sands oil. At this point there was no need for the government to mandate subprime mortgages. Lenders weren't just grudgingly implementing policy, they were enthusiastic, shouting from the rooftops for people to apply for mortgages even if they thought they wouldn't qualify. I clearly remember Countrywide's motto: "No one can do what Countrywide can". I guess it turned out that Countrywide couldn't do it either.
Yes it's nice having cheap super cool toys. It's nicer having less work and being treated well. But when a social economy interacts with human behavior it usually does not work out that way. But the above, having less work and having more free time, however you do it, is a worth goal for the economy. However you make it happen. Toys are not all that they are made out to be especially when you have no time to play with them.
That's all Capitalism I think is doing for us these days. Most methods of producing necessary things are so well understood and so efficient you can run them off machines for the most part. Capitalism is producing really cool toys for everyone. Yay!
"Studies in the United States have found that an increase in material wealth and goods in the country has had little to no effect on the well-being and happiness of its citizens."
What people need are experiences and those experiences are all about having the time to experience them.
"Instead, research shows that purchases made with the intention of acquiring life experiences such as going on a family vacation make people happier than purchases made to acquire material possessions such as a car. Even just thinking about experiential purchases makes people happier than thinking about material ones"
It's sort of sick that this idea that you need free time has been turned into the above analysis about purchasing experiences.
How does that have to do with an inability of young college graduates to make ends meet? A large number of are financially insolvent and rely on payday lenders, large debts, and the gig-economy.
Saying "That's too bad for them" while new billions are made on top is very Louis XVIth. The population at large will, eventually, try something to address this problem. It'd be nice to try to be on top of it early and handle it peacefully.
The software market, the Internet market, the entire ecosystem, it's working because the price of entering is lower. This isn't because of lesser regulation or a lack of standards and oversight, it's because over the past decade it has become so easy for anyone with an Internet connection to contribute. Not necessarily make the next best software business, but contribute to open-source (a decidedly un-capitalistic idea), provide opinions and give insight, and share.
This ability for anyone to connect and share with thousands of other people exactly as we are now is exclusive to this internet platform. That is the driver of success, of innovation, of technology and future. Every other media, every other market, is prohibitive to newcomers. There's a reason that disrupting a market is so praised, because it is something most everyone who tries, fails.
On the Internet, in software, disruption is the name of the game. It's a brand new sandbox that anyone can play in.
Open source is a very capitalist idea. It thrives because people have discovered that more money can be made with open source than with closed source. (The notion that it is un-capitalistic may stem from it not being very intuitive how it can make money.)
A friend of mine is CEO of a medium sized company. His only product is software that helps back end servers run faster. The software is open source, he gives it away to any company that wants it.
His company is doing extremely well. How is that possible? After companies use it for a while, they come back and are happy to buy a support contract rather than manage it themselves.
His business would not exist without open source software that his company developed.
I have an open source package. It comes in two forms: a no-cost one you can just download, and full-cost one where you pay me and I provide support. Both are MIT-licensed. It's a Python library and set of command-line tools for chemical similarity search.
I've had a few sales. Those plus support renewals make me about $25K/year. Consulting and custom software development augment my income.
Recently I was at a workshop, and found that actually many companies use my software. I had no idea it was so widely used. One even presented the results of some 60 CPU days spent using my software. They used the no-cost version, and had never considered paying me for it.
(I asked. They said they had no internal mechanism to give gifts to open source developers. I said I could offer them a PO. They said they would need to justify it. I said I had a new version with better performance and more capabilities. It was a frustrating conversation.)
I am not convinced that the open source, no cost, business model, where you hope that people are "happy to buy a support contract", will work for this combination of product and field. It may be that there simply aren't enough users in my field to support an open source company in the way you describe.
So while I know it works for some - as you said - I believe for me and this product, a non-free/open source license would make me more money than a free license.
I have a few concrete problems I've come across in selling free sofware.
Given that I distribute a software product, how do I provide an evaluation version of the newer, better library? Do I simply trust that they will either pay me or not use it? If they do use it anyway, do I shrug my shoulders and walk away?
How do I do market segmentation? That is, if a non-profit research site, or academic group, wants to use my software, do I give them a discount? But these are also the groups where some graduate student might look at it, see that it's open source, and put it on their github account.
Which is fine. I support them doing that. But I need to price things appropriately. So it's odd that I may need to charge more for academic groups than I do pharmaceutical company (pharma being my main customer base), because academic groups are riskier sales than pharmas.
Now, I could simply give it away at no cost, and hope there is enough support contract interest for the future. But I get the strong sense that people will do a one-off purchase to get the software even if they aren't willing to get a support contract after they download and start using it.
Could your free version still be sold for a price but with limited or no support? For example, two licences
1. Commercial license, no support: pay $/£/€ amount
2. Commercial license with support: pay $/£/€ amount
By commerical use, I mean companies or academic insitutions. Option 1 is cheaper, but presumably more than affordable for companies who want to use the software.
I guess what I'm saying is that even when the software is open source, can you stipulate that payment is required if used by a commerical company or academic institution? Some companies may not pay, but I'm guessing many other companies will be happy to pay for option 1. Or am I being hopelessly naive?
If you stipulate that payment is required for commercial use, companies will pay. My experience is that commercial companies by and large are honest and quite willing to abide by the terms.
While possible, that runs into another question: why would someone pay for support when they already have the software?
There are a few reasons: 1) they want to support new feature development, 2) they want to support me personally, or 3) they want support with understanding the API or doing integration.
I think most F/OS software has lousy documentation. I think that's because developers rarely like to write documentation, because free documentation writers are rare as hen's teeth, and because users aren't willing to pay for documentation.
Which is great if you want to sell your consulting services as well. That is, if the tool solves a problem, but is a hassle to use, then you get paid for configuration and customization. But that disincentivizes putting together a solid API with extensive documentation, where people don't need your help to understand how everything works.
> "even when the software is open source, can you stipulate that payment is required if used by a commerical company or academic institution?"
There are two issues. First, for the software to be open source, then there can be no legal mechanism to require later payment. What you propose is not "open source".
That said, it's might be possible to have a side agreement which does that. That agreement might not be legally enforceable, but a company will likely comply anyway, because they made the agreement in the first place.
But there's no way I'll obligate an academic group to pay me $20K should one of the grad students, or student with access to the shared disk, decide to redistribute it, after seeing that it's under an open source license. There's no way that will do me any long-term good.
My friend said that actually only a small percentage bought support. But he was happy about that, because the user base was so large that even a small percentage made for a lucrative business.
It's just a variation on give away the razor, sell the blades. Give away the music, sell the concert tickets. Open source enables reaching a much, much larger audience than would otherwise be possible, and at a much lower cost than doing advertising. (You also don't have to expend time and treasure dealing with piracy and the inevitable customer problems and anger with your DRM mechanism.) Another benefit is customers fix bugs and feed those back to you, so you've got a stronger product.
Another model for making money off of open source is using it as an advertisement delivery platform. We're all familiar with that stuff.
I also have a friend who expended a great deal of effort creating a very nice dev tool. He wanted to get paid for it, and made it closed source, pay only. An expensive marketing campaign is necessary to make that work (like what Coverity does), but he didn't have one. He made zero sales and was bitter about it.
I don't know your particular situation, and it might be worth a try for you to go pay-only. But be prepared to invest a lot in marketing.
As for the trust thing, my experience is that trusting customers works. Treat them as worthy of trust and respect, and they will respond likewise. Treat them with suspicion and DRM, and they'll live down to that expectation.
The biggest conference in my field has ~200 people. There might be 10,000 people around the world who might ever use my software in one way or another.
They tend to work in one of the one to two hundred or so companies doing drug discovery cheminformatics.
A "small percentage" of 200 is only a handful of companies. That's not enough to make a living. Rather, in that case it's more profitable to do custom software development in that case than off-the-shelf software. Because (oddly) people are willing to pay more for special one-off solutions than general solutions.
While if 10% of the field was willing to pay me once, and the handful of companies willing to pay support, then that's good money.
> "Another benefit is customers fix bugs and feed those back to you, so you've got a stronger product."
I've heard that a lot. I've also been doing free software in this field for 20 years. I've only ever received a handful of minor bug fixes.
My users are computational chemists and their IT support staff. They are not professional programmers. It's easier for them to pay me money to fix bugs than for them to do it.
Also, at some pharmas, code needs to be reviewed by the lawyers before being sent out.
I know one company that distributed source under the GPL, then found that their customers weren't willing to upgrade. Because they had made local changes, and found it too difficult to go through the lawyer review in order to send the changes upstream. It was easier for them to ask for new features instead.
> "advertising delivery platform"
Sure, and in-app sales. Except my software works on proprietary chemical compounds. I don't have access to the machines or the data, and no pharma in their right mind will allow me that sort of control of their in-house informatics platform.
> be prepared to invest a lot in marketing.
I wish to clarify that I am not looking to make my software proprietary. My argument is that I'm sure I could make more money with proprietary software than with free software.
Even if I make it proprietary, customers will get full source, no DRM, and the right to redistribute after (say), 10 years.
As for marketing, and as I found out, most people know of my software, and already use it. The problem is one of conversion less than marketing. Which is still a form of marketing, but less expensive.
> trusting customers works
So, one potential lead said they might buy my software. I gave them my list price. They said they didn't have the money to pay full price so could they get it for only $10K? This London-based organization has a full-time cheminformatics staff member, and over $100M in funding. I don't know if I should trust them, but I suspect it's a negotiating tactic.
Again, my point isn't to say that open source is a bad approach. I agree that there are business models where it does work. But it's not a panacea.
I would not argue that it works in all cases, my only point was that open source is very compatible with capitalism and lots of companies find it very profitable to go open and free source.
Do I trust them to undercut the price I think is reasonable? Do I trust them to tell me what the software is really worth to them? Do I trust that they will value my time appropriately?
That's why I have a problem with the word "trust" in this context.
Trust means if you make a deal with them, they'll abide by the terms.
Trust does not mean they won't negotiate hard to get the best deal they can. Trust does not mean they are obliged to show you their cards. Trust does not mean they value your time as you would.
I suspect you'll be very disappointed if you consider the latter to be trust issues.
I understand what you are saying. I want "trust" to mean something more than "will follow the terms of a deal."
Instead, trust is a highly multi-dimensional, culturally context-dependent concept. As such, I get little guidance from the phrase "trusting customers works", when I know that each aspect of trust has its own set of parameters, including some where I have no experience to guide me.
> This isn't because of lesser regulation or a lack of standards and oversight, it's because over the past decade it has become so easy for anyone with an Internet connection to contribute.
If the government required anyone writing software to have a license, and a permit, and have the result be approved by an agency before it was distributed, there'd be orders of magnitude less people entering the business.
I don't know any software engineers who have a license, or that a permit is required, or government approval of any sort.
You can bake cookies for yourself all you want, no problem. Try and sell them, and you need to get permits, inspections, etc. Try and cut hair, you need a license.
licenses such as LPIC and its windows equivalents hold a surprising significance in (dev-)ops. and the java certificate is often a requirement from what i've seen on my job hunts.
i admit that i can't say anything beyond this though.
Those are not licenses, as in they are not required by law for anything. I wrote a commercial Java compiler a while back for Symantec, and no permits nor license nor review whatsoever was required by the government to do it.
As for running my own software business, my only involvement with the government is registering the business and paying the taxes.
No, I don't. I was into computers in the 70's. The first thing anyone did with two computers was figure out a way to connect them together. A smorgasbord of technologies emerged - Fidonet, BIX, CompuServe, Prodigy, MCImail, RBBS, etc. Heck, even I invented one (it wasn't very good, although I did call it "web" (!)). The notion that the internet would not exist without the Arpanet protocol is pedantically true, but we'd have something else just like it but with a different protocol.
It's like saying if engineers had wheels and engines laying around everywhere, nobody would have thought of connecting them together and making a car without a government grant. (I can tell you for a fact that the first thing any engineer does with an engine and wheels is find a way to put them together!)
The Arpanet also kinda went nowhere until the restrictions on commercial use of it were lifted.
> It's like saying if engineers had wheels and engines laying around everywhere, nobody would have thought of connecting them together and making a car without a government grant.
But they didn't. I mean, if government projects lag behind private sector projects, why didn't we have ARPANET going nowhere while some private sector project jumped ahead? Even if you think we would have gotten their eventually (debatable), we can at the very least say that the government project got us there sooner.
As I said, the first thought anyone with two computers had was connecting them together. It's not a big step from that to inventing yet another protocol, which happened all the time. There wasn't anything miraculous about it.
Local networks run on the Ethernet protocol, developed by Xerox, and shows that an excellent network protocol does not require a government grant. And without Ethernet, there would have been Token Ring by IBM, or Token Bus by GM.
> On the other hand, the industries with the most government intervention seem to be doing the worst - finance, health care, higher education.
I find this a very parochial, US-centered statement. Many countries have these industries in greater regulation, and fare well in them. The conclusion I draw from the situation in the US is that its political structure, existing political-industrial relationships and the interests of its politicians are co-responsible for dysfunction in these industries, and not the general idea of government intervention.
As for why we don't see equal innovation outside of the US, I think the availability of human capital adequately explains it.
The software business is the exception to the rule. If you work in IT your future is much brighter than the rest of the generation. This article writes about the bleak future of the overwhelming majority of the twenty-somethings: those who do NOT work in IT.
Also the fact that software/computing is so much a game changer for so many industries has much more to do with the growth rate and wealth generation, than the fact that there is little government regulation. Software grows everywhere, even in communist/socialist countries.
As a person who was raised very leftist, and only became a conservative (to the consternation of all friends and family) in my 20's, I really don't know how to talk someone out of the left's bubble. I count it a miracle that I found my way out of leftism. Their politics are so lush and their imagery vivid. Ours, on the right, are dull, utilitarian, and based on comparatively dry topics like economics and social psychology.
It's no wonder politics is swinging left, but it is profoundly frightening. Young Americans, just 5-10 years younger than myself, have reached a new extreme. I believe the US is about to take a hard dive to the left, and I don't want my kids to grow up impoverished by it.
I've been looking for a country, to move to, which is more dedicated to classical liberal/capitalist ideals, and who's young people know and understand the value of hardwork, sobriety and dedication. Somewhere in Asia, perhaps?
What does the left/right split have to do with anything?
The rent is too damned high, the wages are too damned low, and none of us stand a statistically-significant chance of getting a return on the value we would bring to a company in this economy (mostly because that's not how equity is split, anymore).
I'm pretty sure we're just the confused ones here. left, liberal, democrat, republican, right, libertarian, socialist, conservative.
Those words are giant tents. I have a book that argues that Hitler was a "liberal" and another that says free-market military-backed imperialism is "liberal democracy". I have another that argues the state-communism of China and the USSR are "conservative".
So I have no idea what people mean when they use those words.
There is a lot of confusion -- no doubt. This has to do with the new usage of the term "liberal" to describe Democrats or people on the left, when historically, liberal meant people on the right, like Libertarians or Republicans. As a result, we now describe free-market liberalism as "classical liberalism", to distinguish it from modern "social liberalism".
To further complicate things, pundits on the left have attempted to associate the uglier side of left politics (namely, fascism) with the right, so you have a lot of people calling neo-nazis "far-right", when in reality, National Socialism was a leftist movement. Hitler was a "liberal", in terms of being a believer in large-scale government intervention in the markets.
Conversely, the USSR was and China is "conservative" in the classical sense. That is, they believe in government intervention in markets, which was called conservatism 100 years ago, and is called liberal today.
They mean nothing in practice because of bizarre narratives like that.
Before taking power, the Nazis caucused with the National Conservatives, the Free Conservative Party, and the German Conservative Party.
German leftists were first to the concentration camps under the Enabling Act of 1933. Under the Röhm Putsch, the Nazis killed and outlawed the left-leaning faction of their party. Under the Commissar Order, Hitler prioritized the death of leftists in conquered land. Socialists, leftists, liberals and communists got their own special badges at the death camps (https://en.wikipedia.org/wiki/Nazi_concentration_camp_badge#...)
The USSR and China are autocratic state-run corporatists. They are conservative in that they are effectively industrialized reactionary feudalism with integrated propaganda to prevent populist revolution.
And finally, some may enjoy calling an intentionally plutocratic state liberal, but it's essentially autocracy without coronation ceremonies.
The confusion here isn't that the ideas themselves are confusing. The historical record is abundantly unambiguous. However some don't like it so they do revisionism and taxonomy hand-waving to try to confuse people. But that's the nature of power.
That's because they were reactionary monarchists. The nationalising was a throwback to 18th century imperialism. That's a rather extreme form of "conservative". Its not like we're talking worker self directed cooperatives regulated by government for the public good.
Marxist in first international was about extending democratic principles to the organization of labor. When you have a single party dictator snatching up enterprise, you don't have first international.
Besides, the terms are for camps more than anything. It's an affinity, not a taxonomy.
Monarchism is a sort of leftism. It's still about having the state own and manage industry, rather than spreading its ownership out among many people. In the end, leftism always ends up looking like Monarchism anyway, to go to your 'affinity not taxonomy' claim.
No again. It's about syndicalism. Modern monarchism is structurally capital enterprise. Always has been. Antiquity talks to this. You have hierarchy, autocracy, authoritarian systems... that's capitalism - combining it with statecraft and religion, you get monarchism
Calling Nazism, democracies, socialism, and monarchism the same thing is about as useful a classification as calling them nouns.
It sounds like you think a system free from government would be free from coercion.
As if places in actual war, without government, is free from coercion or as if the natural animal kingdom with its dog eats dog nature is free from coercion.
Almost as if you're making the fanciful objectivist argument where everyone is pathological and greedy, but also upstanding and moral...
Monarchism and capital enterprise may be similar in their internal hierarchy, outside of some corporate structures, but they are rather unlike monarchies in one very important way.
A capitalist enterprise (outside of a handful of extremely inelastic markets, like defense, catastrophic healthcare and public safety) require that people choose to purchase their product. That is Democratic in nature.
Anarchy is not free of coercion. Fortunately, free markets are not anarchic. Ballot and autocratic are not the only forms of government. Capitalism is itself a form of government -- the left intuits this, but are clouded on the internal forces.
The nature of ballot-organized government, even direct democracy, is less democratic than that of dollar-voting markets.
Ballot government has much more in common with monarchy. Generally -- you're choosing a single person,and that person makes choices ostensibly on your behalf for a number of years. Additionally -- you may get to choose on some issues once in a while, and watch as your choices are undone by the courts and legislature.
Conversely, in dollar voting, everyone is making all of the choices all of the time.
As a result, unencumbered capitalism is a purer form of direct democracy, which measurably produces a more responsive form of government.
It allows the public to vote directly for specific desires, producing an organizing impetus which is more respondent to the will of the public than any other form of government, even direct democracy.
What the left intuits as misrule by business, is actually the result of the votes of their fellow dollar-voters. It is the wisdom, or folly, of the people.
Thanks for the thoughts. Social Sciences are so indeterminable. I appreciate the civility. I need to disengage from this now however. Plenty to think about.
> I've been looking for a country, to move to, which is more dedicated to classical liberal/capitalist ideals, and who's young people know and understand the value of hardwork, sobriety and dedication.
My 2 cents: Young americans are giving up on capitalism because they are some of the most impatient people I've ever met. They expect their careers to go from 0 to 60 in no time without putting in hard work, effort, time and experience to get the "dream career" they want. They don't see that great things in life require dedication.
Are you talking about the hard work of people like Bernie Madoff? Or perhaps Elizabeth Holmes? Or shit, maybe Mark Pincus?
Or maybe we just expect to get paid an honest day's wages for an honest day's work--you know, 8 hours, M-F, 9-5. Maybe we expect to get some actual equity in our companies. Maybe we recognize "experience" as mostly just the same self-serving sonofabitch getting away with taking credit for the accomplishments of those under them.
Dedication? To the companies of today? Don't make me laugh.
Not dedication to companies, but dedication to their craft and skills. Many of these young kids expect to become masters of their craft in short time and aren't willing to start at the bottom and work their way up.
I am 55 years old. When I was twenty, I was looking at an entirely different situation than the current generation. Right now the future for them is a lot more grim looking as my future looked in the eighties. TL;DR: you are wrong here.
What we have is no longer free-market capitalism, but "gangster" or "crony" capitalism.
The only bright spot in the US economy is the one part that hasn't been taken over via regulatory capture, rent-seeking etc. - the Internet and related technologies. (Although Comcast, Level3, ATT and the incumbent telecoms are trying to change that).
This quote is very apt, though over 150 years old:
*"When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it. "
I can't speak for my whole generation, but I used to be nearly ancap in highschool. We were coming of age a few years after the first dot-com crash, and it looked like a temporary market correction. The War On Terror still didn't sound like a joke, technology and the Web were still exciting and changing and hadn't gone completely walled-garden yet.
The game plan was simple, especially with Boomer parents: do well in highschool, do well in college, and then either get a good job (Boomer suggested) or start your own thing (Boomer accepted).
2008 hit, money gets tight for everyone, stock market tanks, and all of us watch as the bankers get bailed out--the ones with enough friends, anyways. My first company's accounts got acquired when Chase ate Washington Mutual and then charged us service fees until they'd drained our meager J2ME game profits. It was abundantly clear that "capitalism", as being practiced in the United States, was not a free market.
2011, a bit over three years later, Occupy Wall Street happened. A lot of protests happened. I saw protests in Houston--after work, of course!--and would later learn that threatened sniper actions against the protestors were ignored by the police. In Oakland, police shot an Iraw veteran in the head with anti-riot gear, landed him in critical condition in the hospital, and nobody gave a shit. In New York, in Zuccotti, the protests were more a spectacle for the bankers and finance folks than a serious way of changing the system, mostly because of the frivolous hippy shit that took it over.
In all cases, they were made fun of by the media until they dissolved from internal disorganization and distraction. The "We are the 99%" site was brilliant marketing and had such a clear message of desperation that it probably could've galvanized the entire Occupy movement, but instead we ended up with a bunch of environmentalists and progressives and hippies who were all bitching about their niche agendas and somehow failing to see in their echochamber intersectionality that they weren't saying anything that 95% of the rest of the 99% gave two shits about.
And now, in 2015, I see that the startup ecosystem and game is basically based on squeezing labor out of early employees while paying lip service to "visionary" founders. I see that large companies are bemoaning the lack of trained devs and yet who are pushing H1B support at the same time that everybody is pointing out the aggressive "train your foreign replacement" techniques of those same companies. I see great swaths of the Internet grown fat upon the domestic surveillance of advertising, a rot so deep that it'll probably kill off something like half of humanity's accumulated output from the last few years because it'll suddenly no longer be economical. And in this total ratfuck, finally, people are starting to go after the perceived oppressors--ye olde cisthet while males--because that's a more convenient target than grappling with the forces that put them there and are finding ways of flaying them still further in pursuit of the all might dollar.
So, yeah, you're damned right I don't believe in capitalism anymore.
Its not young people that matter but the class responsible for educating them, the intellectuals. Few intellectuals even know what capitalism is and what an historical achievement it is. Much to the intellectual's dismay on both the left and right she ain't going away after decades of smears, misrepresentation and attempts to ignore her arguments.
NB: This is not a book on economics, in this book she makes a moral case for capitalism based on her ethics of rational egoism, i.e selfishness. She was not primarily interested in politics or economics except as a consequence of her work in epistemology and ethics. I urge anyone who cares about the future of Western Civilization to read her books and judge it for yourself instead of repeating what others say about her. At the very least it will force you to examine some of your own premises and worldview, i.e it will make you think, even if you disagree.
The democrat party is so far to the left of JFK, that there's no real middle-ground between the parties anymore. America is at a tipping point right now. Things could get real nasty in the not too distant future. No wonder there's so many AR-15s sold and no wonder that the left wants to take them away.
Rate of return on capital is greater than the rate of economic growth over the long term, the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability.
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[ 3.2 ms ] story [ 239 ms ] threadThe article is very clear that the term capitalism wasn't defined in the survey, so "What do these category-based questions really tell us, then, about the allegiance of youth to ideologies? Nothing." Instead, it says to look to the policy question to get a sense of what young Americans think.
My interpretation - young Americans reject neoliberalism. But as the article comments:
> “Neoliberal” has gone from a term that describes an advocate of specific economic and political policies to an insult hurled indiscriminately on social media.
Err, blush.
The end is also nicely put:
> You do not need a survey to ascertain the plight of American youth. You can look at their bank accounts, at the jobs they have, at the jobs their parents have lost, at the debt they hold, at the opportunities they covet but are denied. You do not need jargon or ideology to form a case against the status quo. The clearest indictment of the status quo is the status quo itself.
The problem is that capitalism has been so successful that everyone feels entitled to its gains instantaneously. Because of global trade wealth can easily become concentrated because market expansion pushes up capital availability and equity of people who have it. Most people in the top echelon of wealth hold it in stocks. That's why when we have a crisis (like 2008) the wealth gap collapses.
[1] http://cdn.static-economist.com/sites/default/files/inequali...
Here's a more leveled look: http://blogs.wsj.com/wealth/2009/09/15/wealth-inequality-shr...
There's no doubt it re-accelerated after the crisis, but a lot of that has to do with credit conditions and tight money for the poor, and loose money for the rich.
The WSJ article includes this observation: "The world is still staggeringly unequal, with the tiny sliver of those with $5 million or more in assets (we don’t have the exact number but it’s clearly a select club) owning more than the total population of those with $100,000 or less."
Perhaps there was a small inflection in the evolving wealth gap curve around 2008, but it seems minor and transitory. The article's numbers seem consistent with that.
Most of the world isn't capitalist, or at least not traditional western capitalism. Including the west currently, which is in an orgy of corruption and distortion and central control and unfree markets.
Your explanation of how things that used to be valuable are now valueless is exactly the problem from the article. If technological trinkets that are highly entertaining but inherently fundamentally worthless are our generations Faberge Eggs, or clickbait journalism on the internet or music on the internet or pr0n on the internet or social signalling spirals on the internet, that's "great" that its worthless so everyone can have it even if they have no money. On the other hand, when its labor or skill or craft or art, that's kind of a problem for everyone who has nothing else to sell, when that's basically the entire population.
There is also a forest for the trees argument. A state that fails most of its population is a failed state. Doesn't matter if one tree is in the best shape in history, or really that one tree doesn't matter at all, if the rest of the forest is dead. Failed states are ripe for revolution and that really great tree is going to get chopped in the guillotine no matter how great its achievement. A state that fails to serve its population will eventually get replaced, peacefully or otherwise.
Capitalism is based on debt/interest, which by definition is broken and only follows a downward spiral.
It's not about material possessions. It's about power and representation. Wealthy people have an absurd amount of influence on the political process, and as their wealth increases in proportion to that of the poor, so does their influence.
Capitalism as an economic system may be fine. The problem is the way it is tightly intertwined with our political process and governance.
If people made the connection that capitalism is the thing that's creating all these things in your life that you love.. that those things don't materialize magically as a result of people just doing their thing... that would change the perception of capitalism dramatically.
A Bernie Sanders meme isn't reality. Vastly more than 1% are doing fine.
This has a pretty strong diminishing returns effect.
Capitalism is pretty good at making sure people are doing something actually useful to others, that's where a lot of the satisfaction of work lies in the first place.
Not all work is equally satisfying as well. Most kinds of work would make me miserable. Capitalism is great because you have a lot of wiggle room - you choose within the intersection of your abilities and what the world wants.
If your preferred work is something useless to society like digging random holes or whatever, you may be able to do that in a capitalist system as well if we implement some sort of basic income.
Capitalism is basically markets on a large scale, and some form of market will exist as long as a single person has opportunity costs and performs some sort of optimization. Markets will always be with us in some form. How could we even go about opting out? Being dissatisfied with capitalism as a concept seems like being dissatisfied with gravity.
So, it's not necessary to oppose all trade in order to oppose the notion that one person can own everything people need in order to survive and rent it to everyone else.
I think maybe some people think feudalism : hierarchy :: capitalism : markets.
My best shot: Feudalism is to hierarchy as usury is to capitalism.
I used my resources to produce more resources, you did too, and we exchanged in a way we both considered to be in our best interest (Or we wouldn't have done it).
If I'm way off base I'd love to hear.
Lots of societies have free trade that I don't think would be usefully described as "capitalist." (And anecdotally societies in which free trade is discouraged seem to end up with a lot of black market free trade activity -- it is just too powerful an attractor.)
To me capitalism is a more descriptive of a narrower and more modern development. Free trade is an aspect of it, but not sufficient to describe it.
It's more natural than centrally planned economies, which absolutely require rule of law, police, etc.
Capitalism is 1) that the relative value of choices needs to be determined and 2) those values are best crowdsourced.
If the rule of law breaks down, people will still trade, they will just trade for things that cannot be stolen or reneged on. Things like honor or reputation. This obviously eliminates the efficiency of a common currency, but at the end of the day, choices still have various priorities and the world is too complicated for even the smartest people to evaluate all the choices for everyone.
Anyway, those are the natural laws. Choices need to be made. Crowdsourcing is best when evaluating prices, especially regarding common goods and services.
Seriously.
Markets are where capital (ie. prior labour(yours or some one/thing else's)) is arbitraged for gain. The important part of this rather simplistic point is the arbitrage, it infers that the system is based on the twin concepts of demand and ownership, (or opportunity and opportunity-cost if you like).
Capitalism is the word we use to describe the de-evolution of markets into the private ownership of the means of production. In other words, where enough asymmetrical arbitration has taken place to enable an entity to buy out the rights of someone else to own the profit (ie. the demand portion) from the fruits of their labour. The ultimate expression of this private ownership is the ownership of the people themselves, ergo Feudalism.
Funnily, the last few centuries we attribute to the rise of capitalism, is actually the death throes of unfettered capitalism. See, the interesting thing about ownership it is a social compact, not a natural state. We can trade an item to both our benefits, only because we both agree that you own it and I do not. In a sense, the power IS the asymmetry in the arbitrage. Where this power is balanced between parties, we have free markets. Where it is not balanced, we have capitalism.
If you look at it, there is a pretty clear evolution of those mechanisms: the military power became centralised in the form of the state, which then introduced the legal system as a less damaging way of resolving conflict; similarly, the value of property became measured in gold, which became the standard for a "virtual" currency, turning eventually into the fiat currency.
The two (means of production and the mechanism of control) feed off each other, with the former paying for the latter. And if you look at it, as soon as a society collapses the mechanisms revert to more "primitive" ones.
obtain a large enough, easily available enough pile of money today, to invest in productive resources, to generate a long term higher than inflation income stream.
It has very little to do with markets except rather abstractly along the lines of a financial market being one way to obtain that money.
The article has it backwards. Capitalism as a system has already completely given up on young americans. Almost completely closed and nearly impenetrable. Some young americans have noticed and unchecked the "like" right back at it, as if it cares.
Its hard to run capitalism efficiently enough for it to work without free markets or in the presence of insane levels of corruption or income inequality. Young people will never experience economic conditions where capitalism works, so liking it or not is fairly irrelevant if its not going to work anyway.
Source: My creaky joints.
And sometimes die because they can't afford health care
Unfortunately, this is a generation that gets most of their civic awareness from Hollywood, social media, and a homogenously leftist intelligentsia. Throw in a crisis and some stagnation, and is it really any wonder that young people hold such preposterous views?
Under capitalism in America there are plenty of people too busy trying to get the next meal than to do anything else.
People in socialist Scandinavia are generally doing better.
Incredible that they have on average 6 hours per day to watch television, given how busy you say they are.
But since you brought it up, maybe you should look into what kind of people watch >6 hours of television per day.
http://www.marketplace.org/2013/11/04/wealth-poverty/income-...
Obviously untrue. Even under Leninism and its offshoots (and leaving aside whether or not those are actually socialism) people (not the same people) were able to develop both new critiques of capitalism and critiques of the system that they were living under (in the latter case, this was a dangerous act, but people did it nevertheless.)
This doesn't even get into the fact that normal people are competing against people with wealth for the same coveted spots in colleges. That typically means better high schools, more opportunities, less debt (parents can cover). It's not surprising to see why younger people are upset. They economically don't have it as good as their parents!
It's easy for most of us to simply write off these people as lazy, stupid, whatever. But, we often forget how much easier we had it and just how much luck plays into things. Shouldn't we be trying to find a solution where people don't need luck to make it?
The thing about capitalism is you need to find a path that lies in the intersection of your abilities and what the world wants.
Unfortunately in the US the default path is getting a college degree in whatever - and we're continuing to funnel young people down that path even though the world no longer wants generic college graduates.
College may still be a good path, but pick your major carefully based on empirical salary data and consider how long it will take you to pay back your tuition.
" The minimum wage, which peaked in 1968, would have reached $21.72 in 2012 had it kept pace with inflation."
Along with "Prestigious jobs are increasingly clustered in cities where rent has tripled or quadrupled"
This is not a mystery. QE and inflation is a direct wealth transfer from the poor to the rich. It's basic math and I'll repeat myself once again. When the upper middle class and rich can leverage themselves into assets that grow proportionally to inflation, they get richer and poor people get poorer. This is in addition to the fact that inflation is often a lopsided event from the top down (Fed lends to banks, which then lend to consumers etc.)
And isn't QE ultimately beneficial to the poor, in that it's funding labor that would otherwise go unused during a recession (for example)?
The argument that this helps the poor seems to rest in the conclusion that eventually QE will speed up recovery for everyone, but even if they do "benefit" from QE down the line, they will now be paying for QE the same way the rest of Americans do -- through their taxes (at some point down the line anyway).
Also,
> And isn't QE ultimately beneficial to the poor, in that it's funding labor that would otherwise go unused during a recession (for example)?
In the case of commercial loans I guess this is possible, but that's certainly not the point of QE, which is to stop businesses and people from pulling out or the markets at a time when that would have catastrophic events for the economy at large. I would assume that whatever portion of QE eventually trickles down to the lowest income brackets is largely offset by the corresponding inflation QE has caused, which is another way of saying that in real terms QE really helps the rich get richer, while the poor do not all that much better.
I suppose plans like the various stimulus packages that were proposed over the years would have had the opposite effect though (if they were effective).
To make a return in this market, you either need to be rich and have access to investments funded by cheap debt or you're forced into increasingly risky investments i.e. the stock market.
Very different from the previous environment where you could save for decades at 5% and rely on compound interest.
So, basically, "When in a capitalist society, the upper middle class and rich get richer and poor people get poorer."
QE definitely benefitted the rich much more than the poor. Obama seems to have favored it because it was the only demand-side (sorta) stimulus that he could make happen with the politics being what they are. But nothing happens in a vacuum and it's not a definitive statement about capitalism vs other systems.
I'm well aware that they didn't say that. I'm saying that because disagreeing with them.
> that's not true.
Really? Why, in a capitalist system, would the upper middle class and rich, who are the only people with money to invest in assets that grow proportionally to inflation, not invest in assets that grow proportionally to inflation? Isn't the entire basis of capitalism that people act rationally in self-interest?
What matter could you possibly be talking about that spans a century of Western economics? What are you even saying?
> QE definitely benefitted the rich much more than the poor.
Agreed.
> Obama seems to have favored it because it was the only demand-side (sorta) stimulus that he could make happen with the politics being what they are.
Eh, who cares what Obama favored? That's not really even on-topic.
> But nothing happens in a vacuum and it's not a definitive statement about capitalism vs other systems.
I felt that I responded to this sentence well enough given it's not a definitive statement about anything, but if you'd rather I quoted it and responded to it separately, here's my response:
"Really? Why, in a capitalist system, would the upper middle class and rich, who are the only people with money to invest in assets that grow proportionally to inflation, not invest in assets that grow proportionally to inflation? Isn't the entire basis of capitalism that people act rationally in self-interest?"
In the future, if you want me to respond to your whole posts, maybe try making your whole posts make a coherent point.
We do not live in a true capitalist society anymore, although we still use the term, and so disparage it. Creditism would be better, since the government and federal reserve push debt/credit like its the way the world aught to work, instead of production, saving, and intelligent reinvestment.
This is what bothers me so much about the new anti-capitalist push. Sanders is right about the banks and Wall Street and the like, but he's dead wrong that capitalism is the problem. The problem is this perverse crony capitalist centrally planned insanity we've been living in.
And this is not a republican or democrat thing. Its basically just the way things have worked for a long time, highly accelerating when Nixon stuck the final nail in the gold standards coffin.
It may not be a capitalist tenet, but it's an unavoidable result of capitalism. Capitalism works great for a little while, but then some people amass too much wealth and pull the ladder up behind them.
This is the only logical conclusion. Money and power allow you to change the playing field. So even if somehow we could start everyone off with equal opportunity and let them compete in a fair capitalist system, the ones who gain money and power early on will simply follow incentives and change the playing field in their favor. You can call this unfair playing field "perverse crony capitalism" and argue that it's not capitalism, and you're right, but so what? "True capitalism" will always turn into "perverse crony capitalism" so returning things to capitalism is at best a temporary measure.
Inflation is a direct wealth transfer from holders of net dollar denominated assets to holders of net dollar denominated liabilities. (QE is not relevant, except as a potential source of inflation.)
In high-inflation environment the debtors typically fare better than lenders. Aren't poor people likelier to be debtors and rich people likelier to be lenders?
The failure of the minimum wage not growing with inflation is a political one. If you want higher minimum wages vote for guys who campaign for the stuff, but it has nothing to do with monetary policy.
Who holds more debt, poor person renting or me leverages into a house on the coast?
The past 20 years have seen historically low inflation and interest rates. It's this fall in inflation and interest rates that has transferred so much wealth to property owners.
In cities where the supply of land is limited, the price of a home works out at about the level where your mortgage payments roughly equal what you'd pay in rent. Thus when interest rates are low for long enough house prices go up to compensate. With higher house prices the downpayment required also increases, making it harder to get on the first rung of the ladder. When inflation was high, people quickly built equity in their homes (since the mortgage principal is fixed but the value of your home rises with inflation.)
That's an insane claim to make and shows a gross misunderstanding of wealth and economics. Did you miss the part where I talked about leverage? This is basic math.
it might be nice to have capitalism again
I remember back when nearly everyone defended the system and people were shot down for suggesting that perhaps those who have power and influence try to influence and exercise power. (For instance, https://news.ycombinator.com/item?id=1182518, 6 years ago)
I think people still deny that this change has happened which make me think it's just a temporary thing.
Your hostility is perfect!
For the record, I advocate for criticism of all systems and an intellectual honesty and integrity combined with a willingness to learn, listen, and an openness to being wrong about, well, everything.
Really, Obama himself is solely responsible for this? Not the party, or both parties, but specifically Barak Obama?
That's a tough sell for me.
But I feel it, and I feel for everyone affected by it (and I'm not implying that those people are necessarily weak, by the way). Unfortunately, there will always exist some degree of disparity in resources and prosperity in society (at least, any "free" society), and a "fair" system is just one that provides opportunities for everyone; it doesn't give to those who aren't deserving (and of course, the definition of "deserving" is very much up for debate). But if those who do contribute more to society aren't rewarded any more than those who don't, then fairness ceases to exist.
What many people (especially the younger generation) fail to recognize is that capitalism is both the problem and the solution here. The real problem is, our current form of capitalism functions nothing like true "free market" capitalism. In a free market, education would be cheaper (you think the government subsidies, grants, scholarships, etc are doing anything but raise the price of tuition?). Every industry and business would have to prove their value to the masses (rather than certain players getting preferential treatment from government subsidies); otherwise our dollars would be voted elsewhere. As long as the government could ensure a level of transparency, we'd all get what we pay for, and of course, charities would still be able to do tremendous good in giving aid to the less fortunate (those who may be down on their luck, but not deadbeats). I truly believe that America's economic situation would be improved by those two things: increased transparency, and more freedom in the market.
When I hear someone blaming capitalism for their economic hardships, I like to imagine that person years in the future, now successful, having earned their way to a decent living. I imagine telling that person "ok, congratulations, but you didn't believe in capitalism, so give me all your wealth - I promise I'll look after it". And at that point, I can't imagine any response other than a resounding string of 4-letter words telling me to get lost.
Although looking at the social mobility charts, they're actually far more likely to be even more poor. But hey, keep imagining you're right!
I do agree that there's lots of horrible legislation out there. One problem I see in the US legislation is the schizophrenia in trying to maintain the illusion of a free market. All your politicians want to say they're pro-free market. But nobody aside from some of the more deluded Libertarians is going to accept poor people being turned away from the ER, or pharmaceutical companies being allowed to sell tainted drugs. So the legislation keeps creeping in, but without accepting that maybe this one sector isn't really suited to keeping up the "free market" charade?
We've had periods of much less-fettered capitalism. It did not result in greater equality, in fact it had the opposite effect.
In regards to your last paragraph, you should realize that some people support redistribution not because they want rich people to give them money, but because they understand that capitalism is a flawed tool for tallying contribution to society, and a well-functioning economy needs a rebalancing hand. Likewise there are lots of people, capitalists even, who have arrived at your "success" scenario and yet still don't share your social darwinist views.
Exactly. We have seen again and again that lack of government intervention in the economy does not lead to a "free market." It leads to monopolies and cartels.
Government subsidies, grants and scholarships were absolutely available in massive supply even 20 years ago, when annual college tuition for in-state public schools averaged about 10k (including room & board and books). The student loans didn't make it more expensive; the influx of students did. It's not the kids fault they were sold a bill of goods by their boomer parents, the media, and even employers about college being the only way to avoid fast food or ditch digging as a career.
>I truly believe that America's economic situation would be improved by those two things: increased transparency, and more freedom in the market.
Then, why is life-saving medicine that USED to be relatively cheap so needlessly expensive? That wasn't government regulation. Turing pharma with Daraprim, KV pharma with Makena, then doxycycline, etc., the list goes on. I think this is one place the government should have (and could have, actually) stepped in but didn't. The invisible hand is so darn arbitrary. Makes computers and flat-screens so dern cheap, but something that can save our life? Nah. Go figure!
Another example. I don't recall diamonds being anything but compressed coal. I don't think it's regulated much if at all (I don't recall the GIA being a government agency). There is no regulated market for it like there is gold and other precious metals. Yet, I'll be damned if it isn't expensive as hell. Why?
People want them and are willing to pay the offered price for them. Just like truffles that cost $20 for shavings at a fancy restaurant.
This is very, very false. Adjusted for inflation, the minimum wage in the US peaked at $10-11 in the late 1960s (http://money.cnn.com/interactive/economy/minimum-wage-since-...). Adjusted for PPP, the country with the highest minimum wage is Australia, at $11 per hour (excluding tiny Luxembourg and San Marino; data at https://en.wikipedia.org/wiki/List_of_minimum_wages_by_count...). No one has anything remotely like a $22 minimum wage. The median hourly wage in the US is below $22, ie. more than half of all jobs pay less than that.
The author was illustrating the overall decline in purchasing power of the inflation-adjusted minimum wage, despite its nominal increase. Hence the economic decline experienced by minimum wage workers.
And look at the results: an ongoing, decades long explosion of new products, innovation, millions earning a great living, costs of software relentlessly driven to literally zero, revolutionary new technology every couple of years - does anyone think that could be made better with socialism?
On the other hand, the industries with the most government intervention seem to be doing the worst - finance, health care, higher education.
My understanding of the details is almost nonexistent, but I gather that there was some kind of statistical wizardry that let lenders load up a bunch of crappy mortgages into a package that was, in aggregate, supposedly an extremely safe investment with a very attractive return. These securities became the primary product, with the mortgages themselves being the raw material. The market demanded that production increase, so the lenders did the finance equivalent of drilling for tar sands oil. At this point there was no need for the government to mandate subprime mortgages. Lenders weren't just grudgingly implementing policy, they were enthusiastic, shouting from the rooftops for people to apply for mortgages even if they thought they wouldn't qualify. I clearly remember Countrywide's motto: "No one can do what Countrywide can". I guess it turned out that Countrywide couldn't do it either.
https://en.wikipedia.org/wiki/One-Dimensional_Man
Yes it's nice having cheap super cool toys. It's nicer having less work and being treated well. But when a social economy interacts with human behavior it usually does not work out that way. But the above, having less work and having more free time, however you do it, is a worth goal for the economy. However you make it happen. Toys are not all that they are made out to be especially when you have no time to play with them.
That's all Capitalism I think is doing for us these days. Most methods of producing necessary things are so well understood and so efficient you can run them off machines for the most part. Capitalism is producing really cool toys for everyone. Yay!
https://en.wikipedia.org/wiki/Economic_materialism
"Studies in the United States have found that an increase in material wealth and goods in the country has had little to no effect on the well-being and happiness of its citizens."
What people need are experiences and those experiences are all about having the time to experience them.
"Instead, research shows that purchases made with the intention of acquiring life experiences such as going on a family vacation make people happier than purchases made to acquire material possessions such as a car. Even just thinking about experiential purchases makes people happier than thinking about material ones"
It's sort of sick that this idea that you need free time has been turned into the above analysis about purchasing experiences.
Saying "That's too bad for them" while new billions are made on top is very Louis XVIth. The population at large will, eventually, try something to address this problem. It'd be nice to try to be on top of it early and handle it peacefully.
This ability for anyone to connect and share with thousands of other people exactly as we are now is exclusive to this internet platform. That is the driver of success, of innovation, of technology and future. Every other media, every other market, is prohibitive to newcomers. There's a reason that disrupting a market is so praised, because it is something most everyone who tries, fails.
On the Internet, in software, disruption is the name of the game. It's a brand new sandbox that anyone can play in.
His company is doing extremely well. How is that possible? After companies use it for a while, they come back and are happy to buy a support contract rather than manage it themselves.
His business would not exist without open source software that his company developed.
I've had a few sales. Those plus support renewals make me about $25K/year. Consulting and custom software development augment my income.
Recently I was at a workshop, and found that actually many companies use my software. I had no idea it was so widely used. One even presented the results of some 60 CPU days spent using my software. They used the no-cost version, and had never considered paying me for it.
(I asked. They said they had no internal mechanism to give gifts to open source developers. I said I could offer them a PO. They said they would need to justify it. I said I had a new version with better performance and more capabilities. It was a frustrating conversation.)
I am not convinced that the open source, no cost, business model, where you hope that people are "happy to buy a support contract", will work for this combination of product and field. It may be that there simply aren't enough users in my field to support an open source company in the way you describe.
So while I know it works for some - as you said - I believe for me and this product, a non-free/open source license would make me more money than a free license.
I have a few concrete problems I've come across in selling free sofware.
Given that I distribute a software product, how do I provide an evaluation version of the newer, better library? Do I simply trust that they will either pay me or not use it? If they do use it anyway, do I shrug my shoulders and walk away?
How do I do market segmentation? That is, if a non-profit research site, or academic group, wants to use my software, do I give them a discount? But these are also the groups where some graduate student might look at it, see that it's open source, and put it on their github account.
Which is fine. I support them doing that. But I need to price things appropriately. So it's odd that I may need to charge more for academic groups than I do pharmaceutical company (pharma being my main customer base), because academic groups are riskier sales than pharmas.
Now, I could simply give it away at no cost, and hope there is enough support contract interest for the future. But I get the strong sense that people will do a one-off purchase to get the software even if they aren't willing to get a support contract after they download and start using it.
1. Commercial license, no support: pay $/£/€ amount
2. Commercial license with support: pay $/£/€ amount
By commerical use, I mean companies or academic insitutions. Option 1 is cheaper, but presumably more than affordable for companies who want to use the software.
I guess what I'm saying is that even when the software is open source, can you stipulate that payment is required if used by a commerical company or academic institution? Some companies may not pay, but I'm guessing many other companies will be happy to pay for option 1. Or am I being hopelessly naive?
There are a few reasons: 1) they want to support new feature development, 2) they want to support me personally, or 3) they want support with understanding the API or doing integration.
I think most F/OS software has lousy documentation. I think that's because developers rarely like to write documentation, because free documentation writers are rare as hen's teeth, and because users aren't willing to pay for documentation.
Which is great if you want to sell your consulting services as well. That is, if the tool solves a problem, but is a hassle to use, then you get paid for configuration and customization. But that disincentivizes putting together a solid API with extensive documentation, where people don't need your help to understand how everything works.
> "even when the software is open source, can you stipulate that payment is required if used by a commerical company or academic institution?"
There are two issues. First, for the software to be open source, then there can be no legal mechanism to require later payment. What you propose is not "open source".
That said, it's might be possible to have a side agreement which does that. That agreement might not be legally enforceable, but a company will likely comply anyway, because they made the agreement in the first place.
But there's no way I'll obligate an academic group to pay me $20K should one of the grad students, or student with access to the shared disk, decide to redistribute it, after seeing that it's under an open source license. There's no way that will do me any long-term good.
It's just a variation on give away the razor, sell the blades. Give away the music, sell the concert tickets. Open source enables reaching a much, much larger audience than would otherwise be possible, and at a much lower cost than doing advertising. (You also don't have to expend time and treasure dealing with piracy and the inevitable customer problems and anger with your DRM mechanism.) Another benefit is customers fix bugs and feed those back to you, so you've got a stronger product.
Another model for making money off of open source is using it as an advertisement delivery platform. We're all familiar with that stuff.
I also have a friend who expended a great deal of effort creating a very nice dev tool. He wanted to get paid for it, and made it closed source, pay only. An expensive marketing campaign is necessary to make that work (like what Coverity does), but he didn't have one. He made zero sales and was bitter about it.
I don't know your particular situation, and it might be worth a try for you to go pay-only. But be prepared to invest a lot in marketing.
As for the trust thing, my experience is that trusting customers works. Treat them as worthy of trust and respect, and they will respond likewise. Treat them with suspicion and DRM, and they'll live down to that expectation.
Yes, that is the problem.
The biggest conference in my field has ~200 people. There might be 10,000 people around the world who might ever use my software in one way or another.
They tend to work in one of the one to two hundred or so companies doing drug discovery cheminformatics.
A "small percentage" of 200 is only a handful of companies. That's not enough to make a living. Rather, in that case it's more profitable to do custom software development in that case than off-the-shelf software. Because (oddly) people are willing to pay more for special one-off solutions than general solutions.
While if 10% of the field was willing to pay me once, and the handful of companies willing to pay support, then that's good money.
> "Another benefit is customers fix bugs and feed those back to you, so you've got a stronger product."
I've heard that a lot. I've also been doing free software in this field for 20 years. I've only ever received a handful of minor bug fixes.
My users are computational chemists and their IT support staff. They are not professional programmers. It's easier for them to pay me money to fix bugs than for them to do it.
Also, at some pharmas, code needs to be reviewed by the lawyers before being sent out.
I know one company that distributed source under the GPL, then found that their customers weren't willing to upgrade. Because they had made local changes, and found it too difficult to go through the lawyer review in order to send the changes upstream. It was easier for them to ask for new features instead.
> "advertising delivery platform"
Sure, and in-app sales. Except my software works on proprietary chemical compounds. I don't have access to the machines or the data, and no pharma in their right mind will allow me that sort of control of their in-house informatics platform.
> be prepared to invest a lot in marketing.
I wish to clarify that I am not looking to make my software proprietary. My argument is that I'm sure I could make more money with proprietary software than with free software.
Even if I make it proprietary, customers will get full source, no DRM, and the right to redistribute after (say), 10 years.
As for marketing, and as I found out, most people know of my software, and already use it. The problem is one of conversion less than marketing. Which is still a form of marketing, but less expensive.
> trusting customers works
So, one potential lead said they might buy my software. I gave them my list price. They said they didn't have the money to pay full price so could they get it for only $10K? This London-based organization has a full-time cheminformatics staff member, and over $100M in funding. I don't know if I should trust them, but I suspect it's a negotiating tactic.
Again, my point isn't to say that open source is a bad approach. I agree that there are business models where it does work. But it's not a panacea.
> I suspect it's a negotiating tactic.
Of course it is!
Do I trust them to undercut the price I think is reasonable? Do I trust them to tell me what the software is really worth to them? Do I trust that they will value my time appropriately?
That's why I have a problem with the word "trust" in this context.
Trust does not mean they won't negotiate hard to get the best deal they can. Trust does not mean they are obliged to show you their cards. Trust does not mean they value your time as you would.
I suspect you'll be very disappointed if you consider the latter to be trust issues.
Instead, trust is a highly multi-dimensional, culturally context-dependent concept. As such, I get little guidance from the phrase "trusting customers works", when I know that each aspect of trust has its own set of parameters, including some where I have no experience to guide me.
If the government required anyone writing software to have a license, and a permit, and have the result be approved by an agency before it was distributed, there'd be orders of magnitude less people entering the business.
you can make your own chairs, furniture, oven, whatever...
its just easier to share your homemade products/code with the community over the internet, which makes software development look less regulated.
and you sure as hell won't be able to get a job outside of startups/web development without a license either.
That's why I mentioned "distribute".
> without a license
I don't know any software engineers who have a license, or that a permit is required, or government approval of any sort.
You can bake cookies for yourself all you want, no problem. Try and sell them, and you need to get permits, inspections, etc. Try and cut hair, you need a license.
i admit that i can't say anything beyond this though.
As for running my own software business, my only involvement with the government is registering the business and paying the taxes.
Wasn't it already made better with socialism? Do you not believe that things like ARPANET significantly contributed to the successes we have today?
It's like saying if engineers had wheels and engines laying around everywhere, nobody would have thought of connecting them together and making a car without a government grant. (I can tell you for a fact that the first thing any engineer does with an engine and wheels is find a way to put them together!)
The Arpanet also kinda went nowhere until the restrictions on commercial use of it were lifted.
But they didn't. I mean, if government projects lag behind private sector projects, why didn't we have ARPANET going nowhere while some private sector project jumped ahead? Even if you think we would have gotten their eventually (debatable), we can at the very least say that the government project got us there sooner.
Local networks run on the Ethernet protocol, developed by Xerox, and shows that an excellent network protocol does not require a government grant. And without Ethernet, there would have been Token Ring by IBM, or Token Bus by GM.
I find this a very parochial, US-centered statement. Many countries have these industries in greater regulation, and fare well in them. The conclusion I draw from the situation in the US is that its political structure, existing political-industrial relationships and the interests of its politicians are co-responsible for dysfunction in these industries, and not the general idea of government intervention.
As for why we don't see equal innovation outside of the US, I think the availability of human capital adequately explains it.
Also the fact that software/computing is so much a game changer for so many industries has much more to do with the growth rate and wealth generation, than the fact that there is little government regulation. Software grows everywhere, even in communist/socialist countries.
As a person who was raised very leftist, and only became a conservative (to the consternation of all friends and family) in my 20's, I really don't know how to talk someone out of the left's bubble. I count it a miracle that I found my way out of leftism. Their politics are so lush and their imagery vivid. Ours, on the right, are dull, utilitarian, and based on comparatively dry topics like economics and social psychology.
It's no wonder politics is swinging left, but it is profoundly frightening. Young Americans, just 5-10 years younger than myself, have reached a new extreme. I believe the US is about to take a hard dive to the left, and I don't want my kids to grow up impoverished by it.
I've been looking for a country, to move to, which is more dedicated to classical liberal/capitalist ideals, and who's young people know and understand the value of hardwork, sobriety and dedication. Somewhere in Asia, perhaps?
The rent is too damned high, the wages are too damned low, and none of us stand a statistically-significant chance of getting a return on the value we would bring to a company in this economy (mostly because that's not how equity is split, anymore).
Those words are giant tents. I have a book that argues that Hitler was a "liberal" and another that says free-market military-backed imperialism is "liberal democracy". I have another that argues the state-communism of China and the USSR are "conservative".
So I have no idea what people mean when they use those words.
There is a lot of confusion -- no doubt. This has to do with the new usage of the term "liberal" to describe Democrats or people on the left, when historically, liberal meant people on the right, like Libertarians or Republicans. As a result, we now describe free-market liberalism as "classical liberalism", to distinguish it from modern "social liberalism".
To further complicate things, pundits on the left have attempted to associate the uglier side of left politics (namely, fascism) with the right, so you have a lot of people calling neo-nazis "far-right", when in reality, National Socialism was a leftist movement. Hitler was a "liberal", in terms of being a believer in large-scale government intervention in the markets.
Conversely, the USSR was and China is "conservative" in the classical sense. That is, they believe in government intervention in markets, which was called conservatism 100 years ago, and is called liberal today.
They mean nothing in practice because of bizarre narratives like that.
Before taking power, the Nazis caucused with the National Conservatives, the Free Conservative Party, and the German Conservative Party.
German leftists were first to the concentration camps under the Enabling Act of 1933. Under the Röhm Putsch, the Nazis killed and outlawed the left-leaning faction of their party. Under the Commissar Order, Hitler prioritized the death of leftists in conquered land. Socialists, leftists, liberals and communists got their own special badges at the death camps (https://en.wikipedia.org/wiki/Nazi_concentration_camp_badge#...)
The USSR and China are autocratic state-run corporatists. They are conservative in that they are effectively industrialized reactionary feudalism with integrated propaganda to prevent populist revolution.
And finally, some may enjoy calling an intentionally plutocratic state liberal, but it's essentially autocracy without coronation ceremonies.
The confusion here isn't that the ideas themselves are confusing. The historical record is abundantly unambiguous. However some don't like it so they do revisionism and taxonomy hand-waving to try to confuse people. But that's the nature of power.
The Nazis nationalized industry. They're Socialists, on the left.
Marxist in first international was about extending democratic principles to the organization of labor. When you have a single party dictator snatching up enterprise, you don't have first international.
Besides, the terms are for camps more than anything. It's an affinity, not a taxonomy.
Calling Nazism, democracies, socialism, and monarchism the same thing is about as useful a classification as calling them nouns.
It sounds like you think a system free from government would be free from coercion.
As if places in actual war, without government, is free from coercion or as if the natural animal kingdom with its dog eats dog nature is free from coercion.
Almost as if you're making the fanciful objectivist argument where everyone is pathological and greedy, but also upstanding and moral...
A capitalist enterprise (outside of a handful of extremely inelastic markets, like defense, catastrophic healthcare and public safety) require that people choose to purchase their product. That is Democratic in nature.
Anarchy is not free of coercion. Fortunately, free markets are not anarchic. Ballot and autocratic are not the only forms of government. Capitalism is itself a form of government -- the left intuits this, but are clouded on the internal forces.
The nature of ballot-organized government, even direct democracy, is less democratic than that of dollar-voting markets.
Ballot government has much more in common with monarchy. Generally -- you're choosing a single person,and that person makes choices ostensibly on your behalf for a number of years. Additionally -- you may get to choose on some issues once in a while, and watch as your choices are undone by the courts and legislature.
Conversely, in dollar voting, everyone is making all of the choices all of the time.
As a result, unencumbered capitalism is a purer form of direct democracy, which measurably produces a more responsive form of government.
It allows the public to vote directly for specific desires, producing an organizing impetus which is more respondent to the will of the public than any other form of government, even direct democracy.
What the left intuits as misrule by business, is actually the result of the votes of their fellow dollar-voters. It is the wisdom, or folly, of the people.
Actually, you're looking for Ayn Rand novels.
Yes, hello Sander's supporters :)
Or maybe we just expect to get paid an honest day's wages for an honest day's work--you know, 8 hours, M-F, 9-5. Maybe we expect to get some actual equity in our companies. Maybe we recognize "experience" as mostly just the same self-serving sonofabitch getting away with taking credit for the accomplishments of those under them.
Dedication? To the companies of today? Don't make me laugh.
The only bright spot in the US economy is the one part that hasn't been taken over via regulatory capture, rent-seeking etc. - the Internet and related technologies. (Although Comcast, Level3, ATT and the incumbent telecoms are trying to change that).
This quote is very apt, though over 150 years old:
*"When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it. "
The game plan was simple, especially with Boomer parents: do well in highschool, do well in college, and then either get a good job (Boomer suggested) or start your own thing (Boomer accepted).
2008 hit, money gets tight for everyone, stock market tanks, and all of us watch as the bankers get bailed out--the ones with enough friends, anyways. My first company's accounts got acquired when Chase ate Washington Mutual and then charged us service fees until they'd drained our meager J2ME game profits. It was abundantly clear that "capitalism", as being practiced in the United States, was not a free market.
2011, a bit over three years later, Occupy Wall Street happened. A lot of protests happened. I saw protests in Houston--after work, of course!--and would later learn that threatened sniper actions against the protestors were ignored by the police. In Oakland, police shot an Iraw veteran in the head with anti-riot gear, landed him in critical condition in the hospital, and nobody gave a shit. In New York, in Zuccotti, the protests were more a spectacle for the bankers and finance folks than a serious way of changing the system, mostly because of the frivolous hippy shit that took it over.
In all cases, they were made fun of by the media until they dissolved from internal disorganization and distraction. The "We are the 99%" site was brilliant marketing and had such a clear message of desperation that it probably could've galvanized the entire Occupy movement, but instead we ended up with a bunch of environmentalists and progressives and hippies who were all bitching about their niche agendas and somehow failing to see in their echochamber intersectionality that they weren't saying anything that 95% of the rest of the 99% gave two shits about.
And now, in 2015, I see that the startup ecosystem and game is basically based on squeezing labor out of early employees while paying lip service to "visionary" founders. I see that large companies are bemoaning the lack of trained devs and yet who are pushing H1B support at the same time that everybody is pointing out the aggressive "train your foreign replacement" techniques of those same companies. I see great swaths of the Internet grown fat upon the domestic surveillance of advertising, a rot so deep that it'll probably kill off something like half of humanity's accumulated output from the last few years because it'll suddenly no longer be economical. And in this total ratfuck, finally, people are starting to go after the perceived oppressors--ye olde cisthet while males--because that's a more convenient target than grappling with the forces that put them there and are finding ways of flaying them still further in pursuit of the all might dollar.
So, yeah, you're damned right I don't believe in capitalism anymore.
Cf. Ayn Rand's https://en.wikipedia.org/wiki/Capitalism:_The_Unknown_Ideal
NB: This is not a book on economics, in this book she makes a moral case for capitalism based on her ethics of rational egoism, i.e selfishness. She was not primarily interested in politics or economics except as a consequence of her work in epistemology and ethics. I urge anyone who cares about the future of Western Civilization to read her books and judge it for yourself instead of repeating what others say about her. At the very least it will force you to examine some of your own premises and worldview, i.e it will make you think, even if you disagree.