People's general lack of education on "Capitalism" baffles me.
> “If we don’t invent a new capitalism, absurd economic solutions will win over and sweep us straight into recession,’’ Le Maire said in an interview late last month.
> A key example for him is Italy, where the populist government came to power riding a wave of public anger. It quickly threw out the rulebook on fiscal responsibility, sent bond yields higher and confidence lower, helping to push its economy into a slump.
An example of a failed fiscal policy is a government who gave up on fiscal responsibility. No shit Sherlock.
> “If we want capitalism to hold together work must be better paid,” Le Maire said. “There comes a moment when workers won’t tolerate it any longer.”
If you want better paying work: find a better paying job. If you can't get employed in one, develop/learn marketable skills to do so. If you want freedom from "finding work", create your own value by starting a business.
The system is fine. Sure, the system can have added "benefits", but it's not the system that is broken — it's the people.
>If you can't get employed in one, develop/learn marketable skills to do so
Tell this to a single parent working multiple jobs. When are they supposed to be brushing up on their web development skills?
>If you want freedom from "finding work", create your own value by starting a business
Not everyone can afford the startup costs and risks of starting a business.
>it's not the system that is broken — it's the people
Do you believe wealth is perfectly correlated with behavior that improves society?
I believe that history provides countless examples of the merits of capitalism and it's helped us achieve things that were previously unimaginable, but I don't think that's enough to say we can't do better for more people.
We've generally tried that. Turns out there appear strong ones who bend the rules to their wishes. So we had to gather together to defend ourselves from such behavior.
Here we see another iteration of power grab - and another iteration of defense. Government isn't only the burden, it also serves some purposes.
I agree that government serves some purpose. I agree that it's necessary to keep the strong from devouring the weak. But half the GDP? Is that much government necessary?
And if it is, then you don't get to complain that work doesn't pay very well. You're taking the rest of your compensation in the form of government.
> “If we don’t invent a new capitalism, absurd economic solutions will win over and sweep us straight into recession,’’ Le Maire said in an interview late last month.
This reminds me of the famous quote by F. A. Hayek:
> The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
I'm quite amazed it's taken this long. Of course, it hasn't actually happened yet either. If fair taxation alone were in place, the standard of living would be significantly better in pretty much any country.
Economically, the fairest tax system is one that does not affect people's behavior. The most straightforward means of doing this is a head tax, but that's not politically feasible. The best thing to do is a sales tax on price inelastic things.
Not really, they want other people to be taxed instead of them. Of course people always find someone richer than them to blame. (Taxes are already very progressive in France).
Even if rich people "cheat" and pay a smaller percentage than lower brackets, they still provide the overwhelming amount of tax dollars. The idea that rich people dont pay their share (whatever that is suppossed to mean, a moral premise that is very nonobvious) is silly.
Your comment is contradictory. If rich people pay a lower percentage than lower brackets, that corresponds exactly to the idea that they don’t pay their share. According to your logic, if the rich represented 85% of tax dollars (an overwhelming amount) and 99% of the total wealth/income, they should be let off the hook
Russia has less economic disparity than US-Canada (despite oligarchs), at least as they measured it.
Minimum international corporate tax rate, at least in theory sounds like it could kerb companies from moving HQs to low tax havens for the main purpose of reducing tax burden.
I am baffled about how clueless these people are :(
Europe with its hyper regulation and culture against change has stifled its own economies to a level where now they need to outlaw foreign competition...just let that logic sync in!
Instead of making their laws more attractive to innovation (by rethinking things like GDPR which just strengthens large companies or improving bankruptcy/Insolvency laws) the best idea they have is to outlaw them in hope this will create a vidid startup ecosystem...good luck with that.
Here is what you need to do:
1. Invest more in education, specially: Teach people how to be independent learners, self management, self motivation, etc.
2. Remove all hurdles to incorporate a business (should be as easy as signing up for a Facebook account).
3. Make it safe to fail by rethinking bankruptcy/Insolvency laws
4. Provide a social safety net for failed entrepreneurs so that they can get back on their feed quickly and try the next thing (to be fair, many European countries do this well already at least when it comes to healthcare)
5. Simplify the tax code so that entrepreneurs don't have huge overhead (hint, this could all be done by software)
6. Make it easier for small to mid sized businesses to hire and layoff employee's...have the government pay the bills.
7. Create a strong VC community with attractive tax laws
I once owned a mid size business in germany, and when the economy tanked (2008) and I had to declare bankruptcy the government fucking destroyed me...to the point that I left the country and never looked back! Thats not how you encourage innovation and competition.
Instead I moved to Silicon Valley, where I was allowed to fail a couple time more before I got the chance to drive home multiple exits and build 100M dollar businesses
The EU has about the same GDP as the USA, despite half of it being former Soviet Union. Several member states beat the US by GDP/capita, despite (because?) 28 days minimum holiday.
As far as I can tell, "globalism" is the biggest cause of inequality. It's not about QE or easy monetary policy. It's about the fact that I don't have to pay a guy next door high wages to have something done. I can pay someone in a developing nation 10x less to do the same thing. Doing this at scale is what got us in to this mess.
Some argue that globalism was inevitable, others that there is some shadowy group pushing an agenda. But whatever you believe, one outcome of globalization (and there are positives as well) but one negative outcome is income inequality.
What bugs me about this article is that these people think they can solve inequality with MORE globalism ("global" taxes, regulating international companies etc). I don't think doubling down on it is going to fix anything.
You know how you fix capitalism? You break apart the huge companies. You incentivize smaller companies (with progressive corporate income taxes and other things). Competition will yield lower prices and more innovation.
Yes the globalists want to turn America into a shithole country. Thus how obvious why populist leaders get elected. Was 2016 election a surprise to an avg Working class American? No.
It might increase income inequality in your country, but does it do so globally? I mean, that person in a developing nation will still likely get way more money than they would have from local work. So it serves as wealth transfer from developed to developing countries.
Now, large corporations are taking and pocketing a large part of that transferred wealth, effectively gouging it back (and making it even more concentrated in their home countries in the process). And why can they do that? Because, while capital and goods can flow across borders mostly unrestricted, labor is constrained by immigration restrictions. Chinese workers don't get direct access to the US market - no, they have to work for transnationals that will pay them slightly better than local wage, and then sell the product of their labor for as much as they can in countries where wages (and hence prices) are much higher.
>It might increase income inequality in your country, but does it do so globally?
I think locality matters for income inequality. The poor kid in Bangladesh, really doesn't care that someone owns a $100 Million apartment in Manhattan. However, if you are the working poor in NYC struggling to make ends meet, you are likely to feel something viscerally (maybe a tiny amount) when you go past those apartments.
People tend to compare and judge locally. Who you see, who you interact with on a daily basis matter far more than some theoretical person 1000's of miles away.
Local inequality matters more than global inequality because the cost of living has an equalizing effect. When a large portion of a population can no longer afford to live in their own country it's a big problem for society.
> It might increase income inequality in your country, but does it do so globally?
Yes, neoliberal globalism increases inequality in the distribution of wealth between individuals within developed states, and those in developing states, and globally. It also increases aggregate inequality between countries, particularly between (on the high side) countries whose comparative advantage lies in finished goods and services and those whose comparative advantage lies in extractive industries (other than those subject to effective cartel control, but that tends not to be long-term stable.)
OTOH, it tends to reduce extreme absolute poverty.
I think that the French economy would be better off if France simply outlawed all major US online monopolies. There is more than enough talent and ambition inside France to come up with better alternatives to all major US services... They just need an opportunity to start.
I think this is true of pretty much any country. Most of the talent is there, but they just don't have an opportunity to compete against big companies like Google.
Just look at China; they blocked all US online monopolies and as a result they've quickly come up with their own alternative versions of every major service and the Chinese economy is still going strong. As unethical as it may seem for the government to control such things, there is no doubt that they're better off like this (strictly economically speaking).
China has a population (and thus potential audience) more than 20 times bigger than France; I think it's a weak argument to claim the two economies would do similarly without further evidence. Similarly, I have trouble believing the talent is there, having talked to entrepreneurs in France and comparing my experiences there and in Silicon Valley.
We might then think to look at companies like VK in Russia, but VK is order of magnitudes away from the success of Tencent.
It probably is a chicken-and-egg problem. Speaking from my own experience, the comparatively very low software engineer salaries in France drove me to freelance (mostly for foreign clients), and later emigration.
There is simply very low demand for high-skill software developers. Compare the job ads in Paris vs. NYC for instance: the Paris tech ecosystem is overwhelmingly hiring for dirt cheap roles on outdated technologies.
I think it's a mix of culture, and the lower upside French startups can aspire to due to market size and heavy tax/bureaucracy burden.
Amusing. I suggest France adapts or dies if they want to continue to play a leading role. Countries are only as strong as their economy and France's economic performance is uninspiring.
Sarkozy is pushing for a transfer of Northern European wealth to the South but the EU is not the US.
It's hilarious that all these news outlets still don't get it. They think the French are protesting against capitalism, and that there's any continuity with what people like AOC are saying. The fact is, France is protesting against globalism. As the UK did with Brexit. And the US with Trump. And Italy with their new government. Even in Canada, our two biggest provinces have elected populist governments, and it's likely enough we could also have a conservative government by the end of the year who will likely also take advantage of populism.
Globalism promised a future where we could outsource manual labour to developing countries and we'd all have jobs in the information sector. Well now we're automating large parts of that sector, outsourcing some too, meanwhile we've also outsourced manufacturing and labour, now all we have left is shitty service jobs. It was by design and let's face it, people aren't happy.
US media can bury their heads in the sand all they want, but all these events are an indictment of globalism and all over the western world people are sick of it.
> They think the French are protesting against capitalism, and that there's any continuity with what people like AOC are saying. The fact is, France is protesting against globalism.
Globalism (at least the form.thst concretely exists and is being protested) is capitalism; it's true that some of the current protest is nationalist, xenophobic, and corporatist, while some of it class-conscious, not targeted against any non-economic identity group, and socialist, and that despite protesting against the same thing those two groups are diametrically opposed.
> So, you've basically just repeated media talking points
No, none of that is “media talking points”.
> and have nothing to say about globalism contributing to inequality and protest?
Other than the fact that I explicitly agreed that both xenophobic nationalistic corporatists and socialists are protesting in response to capitalist globalism...yes, actually I have more to say on the topic (and already said it in another subthread):
Literally talking points used to discredit conservative populism.
And from your previous comment:
> class-conscious, not targeted against any non-economic identity group, and socialist
Again, media talking points. PC culture has taken over the left; now instead of talking about inequality, they talk about a 'New Green Deal', gender pronouns, open borders/increased immigration, etc...
On the right, limiting immigration and tariffs are their solutions to reducing the outsourcing of labour (and both are valid economic principles), yet it gets dismissed with negative adjectives.
In both cases, all these talking points distract from the fact that inequality is the problem, globalism is one of the driving forces of inequality, and it's all glossed over by the media talking points you repeated.
49 comments
[ 3.5 ms ] story [ 121 ms ] thread> “If we don’t invent a new capitalism, absurd economic solutions will win over and sweep us straight into recession,’’ Le Maire said in an interview late last month.
> A key example for him is Italy, where the populist government came to power riding a wave of public anger. It quickly threw out the rulebook on fiscal responsibility, sent bond yields higher and confidence lower, helping to push its economy into a slump.
An example of a failed fiscal policy is a government who gave up on fiscal responsibility. No shit Sherlock.
> “If we want capitalism to hold together work must be better paid,” Le Maire said. “There comes a moment when workers won’t tolerate it any longer.”
If you want better paying work: find a better paying job. If you can't get employed in one, develop/learn marketable skills to do so. If you want freedom from "finding work", create your own value by starting a business.
The system is fine. Sure, the system can have added "benefits", but it's not the system that is broken — it's the people.
Tell this to a single parent working multiple jobs. When are they supposed to be brushing up on their web development skills?
>If you want freedom from "finding work", create your own value by starting a business
Not everyone can afford the startup costs and risks of starting a business.
>it's not the system that is broken — it's the people
Do you believe wealth is perfectly correlated with behavior that improves society?
I believe that history provides countless examples of the merits of capitalism and it's helped us achieve things that were previously unimaginable, but I don't think that's enough to say we can't do better for more people.
(I don't mean that the government charges 50% taxes on workers. I mean that, in France, government consumes 50%+ of GDP - or so I understand.)
Here we see another iteration of power grab - and another iteration of defense. Government isn't only the burden, it also serves some purposes.
And if it is, then you don't get to complain that work doesn't pay very well. You're taking the rest of your compensation in the form of government.
This reminds me of the famous quote by F. A. Hayek:
> The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
What is "fair" taxation?
Here's my parody of 'fair taxation'
* Corporations should pay no tax, or even better get subsidies and grants.
* Middle class should bear 99% of the tax burden.
* Rich, job creators should pay preferably no tax, but definitely less tax than a middle class person.
* Poor people don't pay government tax, but should be shut out of health care and other government services (except prisons and the armed forces).
... and Macron’s big take away is that France needs higher taxes?
Russia has less economic disparity than US-Canada (despite oligarchs), at least as they measured it.
Minimum international corporate tax rate, at least in theory sounds like it could kerb companies from moving HQs to low tax havens for the main purpose of reducing tax burden.
Europe with its hyper regulation and culture against change has stifled its own economies to a level where now they need to outlaw foreign competition...just let that logic sync in!
Instead of making their laws more attractive to innovation (by rethinking things like GDPR which just strengthens large companies or improving bankruptcy/Insolvency laws) the best idea they have is to outlaw them in hope this will create a vidid startup ecosystem...good luck with that.
Here is what you need to do: 1. Invest more in education, specially: Teach people how to be independent learners, self management, self motivation, etc. 2. Remove all hurdles to incorporate a business (should be as easy as signing up for a Facebook account). 3. Make it safe to fail by rethinking bankruptcy/Insolvency laws 4. Provide a social safety net for failed entrepreneurs so that they can get back on their feed quickly and try the next thing (to be fair, many European countries do this well already at least when it comes to healthcare) 5. Simplify the tax code so that entrepreneurs don't have huge overhead (hint, this could all be done by software) 6. Make it easier for small to mid sized businesses to hire and layoff employee's...have the government pay the bills. 7. Create a strong VC community with attractive tax laws
I once owned a mid size business in germany, and when the economy tanked (2008) and I had to declare bankruptcy the government fucking destroyed me...to the point that I left the country and never looked back! Thats not how you encourage innovation and competition.
Instead I moved to Silicon Valley, where I was allowed to fail a couple time more before I got the chance to drive home multiple exits and build 100M dollar businesses
> The EU has about the same GDP as the USA
But it has 60% more people.
> Several member states beat the US by GDP/capita
And several member US states beat the EU by GDP/capita...
Latvia and Estonia are not half of the EU, by any reasonable measure.
Keep in mind in Europe, health is publicly funded.
So anyone who smokes is subsidized by those who don't.
This way demand exceeds supply, and everyone receives bad healthcare.
In US, this will never be acceptable as you never subsidize anyone.
As far as I can tell, "globalism" is the biggest cause of inequality. It's not about QE or easy monetary policy. It's about the fact that I don't have to pay a guy next door high wages to have something done. I can pay someone in a developing nation 10x less to do the same thing. Doing this at scale is what got us in to this mess.
Some argue that globalism was inevitable, others that there is some shadowy group pushing an agenda. But whatever you believe, one outcome of globalization (and there are positives as well) but one negative outcome is income inequality.
What bugs me about this article is that these people think they can solve inequality with MORE globalism ("global" taxes, regulating international companies etc). I don't think doubling down on it is going to fix anything.
You know how you fix capitalism? You break apart the huge companies. You incentivize smaller companies (with progressive corporate income taxes and other things). Competition will yield lower prices and more innovation.
Now, large corporations are taking and pocketing a large part of that transferred wealth, effectively gouging it back (and making it even more concentrated in their home countries in the process). And why can they do that? Because, while capital and goods can flow across borders mostly unrestricted, labor is constrained by immigration restrictions. Chinese workers don't get direct access to the US market - no, they have to work for transnationals that will pay them slightly better than local wage, and then sell the product of their labor for as much as they can in countries where wages (and hence prices) are much higher.
I think locality matters for income inequality. The poor kid in Bangladesh, really doesn't care that someone owns a $100 Million apartment in Manhattan. However, if you are the working poor in NYC struggling to make ends meet, you are likely to feel something viscerally (maybe a tiny amount) when you go past those apartments.
People tend to compare and judge locally. Who you see, who you interact with on a daily basis matter far more than some theoretical person 1000's of miles away.
Yes, neoliberal globalism increases inequality in the distribution of wealth between individuals within developed states, and those in developing states, and globally. It also increases aggregate inequality between countries, particularly between (on the high side) countries whose comparative advantage lies in finished goods and services and those whose comparative advantage lies in extractive industries (other than those subject to effective cartel control, but that tends not to be long-term stable.)
OTOH, it tends to reduce extreme absolute poverty.
Just look at China; they blocked all US online monopolies and as a result they've quickly come up with their own alternative versions of every major service and the Chinese economy is still going strong. As unethical as it may seem for the government to control such things, there is no doubt that they're better off like this (strictly economically speaking).
We might then think to look at companies like VK in Russia, but VK is order of magnitudes away from the success of Tencent.
There is simply very low demand for high-skill software developers. Compare the job ads in Paris vs. NYC for instance: the Paris tech ecosystem is overwhelmingly hiring for dirt cheap roles on outdated technologies.
I think it's a mix of culture, and the lower upside French startups can aspire to due to market size and heavy tax/bureaucracy burden.
This is not about Capitalism, this is about sovereignty and financial determinism of a state.
Globalism promised a future where we could outsource manual labour to developing countries and we'd all have jobs in the information sector. Well now we're automating large parts of that sector, outsourcing some too, meanwhile we've also outsourced manufacturing and labour, now all we have left is shitty service jobs. It was by design and let's face it, people aren't happy.
US media can bury their heads in the sand all they want, but all these events are an indictment of globalism and all over the western world people are sick of it.
Edit - here's a good documentary about inequality: https://youtu.be/AFIxi7BiScI
Globalism (at least the form.thst concretely exists and is being protested) is capitalism; it's true that some of the current protest is nationalist, xenophobic, and corporatist, while some of it class-conscious, not targeted against any non-economic identity group, and socialist, and that despite protesting against the same thing those two groups are diametrically opposed.
No, none of that is “media talking points”.
> and have nothing to say about globalism contributing to inequality and protest?
Other than the fact that I explicitly agreed that both xenophobic nationalistic corporatists and socialists are protesting in response to capitalist globalism...yes, actually I have more to say on the topic (and already said it in another subthread):
https://news.ycombinator.com/item?id=19437188
Literally talking points used to discredit conservative populism.
And from your previous comment:
> class-conscious, not targeted against any non-economic identity group, and socialist
Again, media talking points. PC culture has taken over the left; now instead of talking about inequality, they talk about a 'New Green Deal', gender pronouns, open borders/increased immigration, etc...
On the right, limiting immigration and tariffs are their solutions to reducing the outsourcing of labour (and both are valid economic principles), yet it gets dismissed with negative adjectives.
In both cases, all these talking points distract from the fact that inequality is the problem, globalism is one of the driving forces of inequality, and it's all glossed over by the media talking points you repeated.