Nothing will change so long as we continue to stick with the outmodded, hypercapitalist notion of an economy defined purely monetarily. Money erases all actual social values and establishes only exchange value (abstracted from things that are actually important, like the fact that a vast majority of exchanges are destructive for the species and probably shouldn’t be happening) thus we’ve let ecosystems basically reach the point of collapse.
A proper economy needs to be general in Bataille’s sense. It needs to incorporate social goods as its measure, not just abstractions like gdp and exchange value.
This article is right that society has failed to adapt to rapidly proliferating digital technologies, leading to the complete erosion of social structures, without sufficient replacements, but in my estimation it does not go far enough
This may not be popular here because a lot of Ycombinator's wealth depends on this not happening, but competition laws need to change to allow developers/taxi drivers/home renters/etc. to collude openly against platforms.
Shareholders get to collude, even against consumers, by merging companies, and the government goes to great lengths to give specific minority shareholder rights to boost the collusion. But a group of small businesses don't get to if they don't merge; I think they should be able to collude against platforms backed by network effects, hardware lock in, etc., I'm not saying they should be able to collude against consumers.
For what it's worth, home renters already have that right. The right to organize is enshrined in law and tenant organizing is regarded as an important fight against the landlords.
> And we believe it’s up to tech Founders, VC’s and employees to do something about it. It’s up to us. Governments and other traditional forms of hierarchical power are ill-equipped to understand the network economy and evolve the new social contract.
Hard pass, I'll take a social contract defined through democracy every time.
Founders and investors, in particular, are uniquely unqualified to evolve the social contract because they have overwhelming financial interests.
Exactly. If anything, we need to transition to a democratic model based at least in part on sortition. Randomly selected citizens assemblies have already shown promise in Ireland, France, and elsewhere.
How do you ensure the people that are selected have any significant level of intelligence, or desire to better their country rather than just themselves, or have any applicable life experience or knowledge that would lead them to make good, wise, decisions? How can you ensure that if it's a random selection?
We don't ensure any of that currently for any of our politicians. In fact the system we have in place now has perverse incentives to ensure exactly the opposite, both on intelligence and self-interest.
So a purely random selection would seem like an improvement at this point.
It's the same as voting. You give everyone a vote because that is the least exploitable, fairest approach given the situation. You don't try to determine who is "most qualified to vote" because you end up with what the republicans are doing now. The likelihood that you accidentally recruit a power hungry dictator by virtue of his random selection to some position of power is much less than that individual maliciously seeking it of his/her own volition.
If sortition is used to select the members of a second legislative chamber, then we would expect the randomly chosen set of people to have the same average intelligence as the general population. This chamber would have the right to veto and suggest changes to legislation, but not initiate it or unilaterally change any laws.
Just as politicians may not be experts in the specific areas that they legislate on, the members of this second chamber would have the right to ask for input from specialists. This could be seen as an extension of the right that juries have in some states to ask questions of expert witnesses.
Even if, in practice, the second chamber end up mostly listening to advisers (or lobbyists) provided by the existing political parties, they would at least have to hear a variety of opinions, let's say in proportion to the partisan leanings of that chamber. This would eliminate gerrymandering and other problems like campaign financing.
It doesn't matter if they have a significant level of intelligence or desire to better their country. That's the beauty of the system. If you have a large enough sample and a well-designed deliberative structure, even a group of average, self-interested individuals will be able to perform well.
The deliberative structure used is based on research into group decision-making, and is usually some form of system where people split into small discussion groups that engage in structured discussion, then present something to the broader group, then discuss again, then shuffle into different groups and repeat the process.
The fact that people are self-interested also doesn't pose a problem, so long as the sample is large enough. You probably want at least 100 for good measure, depending on the population being represented. Because it's a representative random sample (ideally it's not fully random, but weighted to represent population demographics), you get a broad slice of the population and therefore many competing interests. An individual may wish to further their own interests, but this would conflict with the interests of everyone else. Overall, the group's incentive is to do a good job, because they live in society and their decisions will affect them.
>> Founders, investors, successful business owners and CEOs are more likely to show sociopathic behaviour than the average person next door.
This argument is being taken as a Gospel. Seems to be a work of people who gave us the Stanford Torture Experiment. Given 50% of the so called psych studies are not reproducible. Basing foundational changes on this kind, fast-food pop psy is not a great idea.
We have wisdom of thousands of years in the classics and religious texts, I would rely on them.
And then there will be a new set of rich and powerful, cloaked in the robes of the new ideology, and wielding its power to destroy their enemies and solidify their hold on power. Including many of the people who led the last revolution. We see it pretty much every single time.
Give animals more food than they need and they will share it with their friends. This IS reproducible and points to sociopathic behavior in the wealthy.
Classics and Religious texts suggest that stoning is an appropriate punishment for premarital sex, that bloodletting is a good cure for just about anything, that the earth is the center of the universe… I will take my chances with imperfect science.
Saying X is Y without any evidence to support it is neither helpful nor convincing, unless it is self evident. Suggesting science is equivalent to religion is most certainly not evident. In fact, I’d argue the only evident thing about that statement is that it is incorrect.
There may be some people that misunderstand science, or who try to apply it outside of the regime where it is appropriate, and that is an issue (science can never answer the question: is an action moral, for instance).
But the institution of science is as far from religion as it can get. Religion asks you to believe things because an individual or a book tells you that it is so, and rewards those who take those statements on faith. Science, on the other hand, asks you to test a statement, to use the scientific method to attempt to falsify hypotheses, and through an interactive and iterative process improve your understanding of the phenomena in question.
That difference is why science has taught us more about the world in the last 400 years than religion has in 4000. Hell, science taught us more about the world in the last year than religion has since cavemen were drawing the sun on cave walls.
That’s not to say religion is useless or necessarily negative. It can be, just like any other institution. And frankly, there is just not that much overlap between the realms of religion and science. Science does not attempt to answer questions about the existence of god, or the morality of actions.
The issue is when religious people or organizations attempt to use their religion to answer questions about the physical world. That’s when science is needed.
A skeptic does not take pride in a 50% reproducibility of science.
Learn the distinction between knowledge and wisdom before lecturing about science.
Most important emotion the OP has to contend with jealousy. I myself am a bowl of mediocrity but I do not label every other success or successful person as a sociopath using garbage science.
You're referring to the armies of lobbyists and SUPER PACs owned by the wealthy, those militant organizations suppressing candidates who dare to challenge the status quo?
The technology of killing someone and making it look like an accident or a suicide reached a state of high art at least 42 years ago. Here is one illustration.
The nearby photograph shows the late US Senator Frank Church displaying a Central Institute of Assassinations’ (CIA) dart gun that, depending on the poison used, either causes an immediate heart attack or a belated cancer. According to Congressional 1975 testimony, the gun fires a frozen poison-tipped dart. The tiny dart can penetrate clothing and leaves a barely-visible pin-sized red mark where it enters the victim’s body. In the heart attack version, once in the body, the poison melts, gets absorbed into the bloodstream, and causes cardiac arrest. The poison then denatures quickly, so that a routine autopsy is likely to ascribe the heart attack to natural causes.
In passing: Church probably paid for his courage–and for his progressive record–with his life. By 1984, at the early age of 59, he died of . . . cancer.
Bob Marley was also likely murdered by oncogenic viruses placed on a nail in his shoe which led to his brain cancer and ultimate collapse a few years later. He was not intimidated when his house was shot up and didn't back down. He too paid the price with his life.
Oncogenic viruses on the surface make their way into the blood stream upon skin penetration. Normally you can digest them if you eat them because they denature in the acidic environment of the stomach.
Molecular mechanisms of viral oncogenesis in humans:
Poisons such as Oleandrin, which is a toxic cardiac glycoside found in the poisonous plant, oleander (Nerium oleander L.), interferes in some essential processes within the cell, the most important of these being the inhibition of the Na-K ATPase. This protein enables the cell to exchange the cations Na+ and K+ between the intercellular and extracellular spaces by which, for instance, electric signaling is made possible in nerve cells. Oleandrin binds to specific amino acids in the protein, causing it to lose its function. After depolarization of the cell in which Na+ flows into the cell, the Na+ cannot be transported back into the extracellular membrane, causing the sodium gradient to disappear.
It's interesting that economic power is not perceived as hierarchical by the author. Or rather it seems like an ideological view.
Also:
> The rich get really rich, and the poor get poorer by comparison. Unfortunately, this has always been true. It is not an artifact of modern economics.
This is not true as far as I know. There have been times in recent history between the early ~1900 and ~1970 where the income gap decreased and worker protection increased. It was a time of stronger worker movements, unions, emancipation and policy aimed at the larger demographics of the public. The 70's mark a shift towards neo-liberal ideology in the western world.
The article is riddled with dystopian suggestions. There are some things I can agree with. For example I very much agree with the importance of workplace transparency. And there is also an underlying tone of empathy with the unfortunate, but it comes off as patronizing.
I think the biggest fallacy is to think that our societies are becoming more meritocratic almost by default (as assessed in the article). Ignoring whether that is a good thing or not, I doubt this is true at all or if it even can be measured objectively.
> It was a time of stronger worker movements, unions, emancipation and policy aimed at the larger demographics of the public.
A lot of the things you mentioned only developed during the time when there was (or seemed to be) a compelling competing ideology.
Communism/socialism was seen as a potential alternative to capitalism during that time, and I think that the competition of ideas during that time led to more benefits for the lower end of the economic ladder.
That's how competition of ideas looks like - with people being in conflict over these ideas, and those ideas (or ideologies as "idea packages") having to change and compromise to win over more people or be outcompeted as their supporters get outnumbered, defeated or even eliminated.
Well yes, militarily defeating most proponents of an idea is a reasonably effective way of subduing that idea or ideology. For historical examples, the nazi ideology is probably a major example, with the idea becoming much less prominent and widespread after WW2, all the while it's obvious that it would be quite popular in much of the world if the war had turned out differently. The idea of divinely sanctioned monarchy is another big one which was generally accepted but then mostly lost out through applied violence. The USA Civil war might also be thought of as this kind of war of ideas.
I disagree. I would say we have phrases like "war of ideas" to differentiate between actual war. It would seem to me that literal war indicates a failure of a war of ideas. If what you say is true, then the only conclusion to draw is "might makes right". i.e. whoever has the biggest stick has the best ideas. That's something I'll have trouble accepting.
A lot of the things you mentioned only developed during the time when there was (or seemed to be) a compelling competing ideology.
Communism/socialism was seen as a potential alternative to capitalism during that time, and I think that the competition of ideas during that time led to more benefits for the lower end of the economic ladder.
Yes. I've made that point before, but it's not a mainstream position.
Many of the problems we have with capitalism come from capitalism being a monopoly, and acting like one.
Here's anti-communism PR from the 1949-1955 on the distribution of wealth. Back then, capitalism had to be sold in a competitive market.[1][2]
>Unfortunately, this has always been true. It is not an artifact of modern economics.
That part doesn't even make any logical sense because there is nothing in economics that requires growing inequality. It's usually political power structures that need growing inequality. I would go one step further and say that growing inequality is bad for economic growth and has often ended in a revolution.
> Hard pass, I'll take a social contract defined through democracy every time.
When you say democracy, are you referring to democracy the abstract philosophy, or the specific concrete implementation of "democracy" that we currently operate under?
Would you be open to considering a third option: a complete re-implementation of democracy from the ground up?
> Founders and investors, in particular, are uniquely unqualified to evolve the social contract because they have overwhelming financial interests.
Similarly, are are you referring to founders and investors in the abstract sense (a general methodology for organizing and funding the implementing ideas), or the specific types of founders and investors that have risen to the top, under our current implementations of democracy, economics, etc?
Would you be open to considering an alternative approach: a new kind of founding and funding of the implementation of an idea, one that is deliberately designed from day one to avoid the shortcomings we see today, as well as be ever watchful for the emergence of novel new shortcomings that may emerge?
> When you say democracy, are you referring to democracy the abstract philosophy, or the specific concrete implementation of "democracy" that we currently operate under?
Both. At a philosophical level, democracy is a just (while imperfect) method for long-term decision making of a large system of humans. Nothing else comes close.
Concretely, our democracy has a lot of flaws but hasn't been awful enough to degrade into totalitarianism in many many years, so I'd say it's doing its job. It's even amenable to upgrades, if with difficulty from the enormous consensus required.
> Would you be open to considering a third option: a complete re-implementation of democracy from the ground up?
In the abstract, yes, poking at our poorly-architected democratic machine is one of my favorite hobbies.
In reality, there's significant risk of destabilization that comes with re-architecting a political system, so it's hard to say.
> Similarly, are are you referring to founders and investors in the abstract sense (a general methodology for organizing and funding the implementing ideas), or the specific types of founders and investors that have risen to the top, under our current implementations of democracy, economics, etc?
Specifically founders and funders as they exist in our economy under our current sociopolitical system (hence: they have competing interests in making society better vs owning a company that isn't bankrupt and returns value to shareholders)
> Would you be open to considering an alternative approach: a new kind of founding and funding of the implementation of an idea, one that is deliberately designed from day one to avoid the shortcomings we see today, as well as be ever watchful for the emergence of novel new shortcomings that may emerge?
I'm not sure what that means. Governments have a monopoly on force, so you must have system A or B but not both. Funding/founding is decentralized, so you may have both systems A and B, and the dominant system over time tends to be the one that makes the most money.
So am I open to an alternative founding/funding approach? Sure. Do I think it's going to improve the social contract in a world of ruthless capitalism? No.
> Both. At a philosophical level, democracy is a just (while imperfect) method for long-term decision making of a large system of humans.
At the abstract philosophical level, democracy doesn't dictate specific implementations, does it? And if it does, who enforces these dictates?
> Concretely, our democracy has a lot of flaws but hasn't been awful enough to degrade into totalitarianism in many many years, so I'd say it's doing its job.
If "not degrading into totalitarianism in many many years" is the standard/goal, but I'd rather we aim a bit higher than that.
> It's even amenable to upgrades, if with difficulty from the enormous consensus required.
In abstract theory - whether our concrete implementation is upgradeable in fact is unknown.
> Nothing else comes close.
Nothing else that we've tried, within recorded history up to the present , under a disorganized, poorly understood, multivariate environment. How many things have we tried? How many minds are working on the idea?
There was a time where nothing came close to the horse and buggy, but then something did.
There was a time when broad humanity was not very good at reading, writing, or even thinking in general, but then they became better.
> In reality, there's significant risk of destabilization that comes with re-architecting a political system
Only if you choose to physically roll out the new design (well, it may be a bit more complex)...but even if you do, there is a wide variety of options for how you might roll it out. It seems within the range of possibilities that if a clearly superior design/implementation existed (or was even under serious discussion), and the public had adequate knowledge of the details/philosophy of it, it would exert a kind of psychological force on the current system...kind of like when a business ups its game in response to a new rival showing up on the scene, as well as the effect that has on consumer perceptions, preferences, and demands.
> so it's hard to say
It is indeed...but with the internet, we can (well, we have the technical ability to at least) start a broad discussion on the topic, which may start shedding some light on the question (depending on the quality, format, etc of that discussion). Perhaps the new system itself could even be used to facilitate a high quality discussion, which would also provide some beta testing feedback.
> Specifically founders and funders as they exist in our economy under our current sociopolitical system (hence: they have competing interests in making society better vs owning a company that isn't bankrupt and returns value to shareholders)
> I'm not sure what that means.
Perhaps some innovation is needed here as well (with respect to this project at least).
Maybe, maybe not, I've heard many such predictions over the years during system refactoring. If it is not an immutable physical law of nature, and we are discussing what is possible in the future, I am skeptical of claims that things cannot be done.
> Funding/founding is decentralized, so you may have both systems A and B, and the dominant system over time tends to be the one that makes the most money.
Key word: tends.
Implicit: under the current system (for a given, fairly arbitrary set...
The Social Contract is one of the most misleading ideas that has ever been created - it's not a contract, and it's not voluntary. It's a sleight of hand, to for those in power to justify the use of force of on others.
If you live in a society, you agree to abide by its rules or to move to a different society that better suits you if they will accept you. Otherwise you are a renegade. I don't see how this is avoidable.
A state is considered intact if the government has a monopoly on the legitimate use of force. A state can become predatory if they abuse that legitimacy, but other than that, if the government loses its monopoly, you have what is referred to as a failed state.
> If you live in a society, you agree to abide by its rules or to move to a different society that better suits you if they will accept you. Otherwise you are a renegade.
Wut??? How can a person living on their own land be a renegade?
Yeah otherwise laws don't mean anything, right? It's free-for-all. From "stopping at a Red light is optional" to Vigilanteism. Can you explain how that would work? Would you want to live in that kind of state?
> you agree to abide by its rules or to move to a different society that better suits you if they will accept you.
Except there's no such thing as free immigration right now (except within the EU) and even if there were it would only be a market among offerings and there's no option for non-participation since states dominate all inhabitable territory on Earth.
What is that supposed to mean in English? In French it usually refers to the eponymous book from Rousseau, that basically explains that leaders powers are always in balance against the people's will to overthrow them and that there has to be some kind of mutual gains between leaders and the population they rule for it to be stable.
It was mostly an argument in favor of democracy and some kind of redistributive system.
That's true, but I agree with the parent comment that 'contract' implies an initial negotiation and optional agreement, and none of us had that negotiation nor option. It's just a misleading term to use, so it seems like a bit of sophistry.
I'm not a scholar on the subject, but in Rousseau's time I don't think the idea of a redistributive system was prevalent. My understanding is it was more about freedom from government intervention. The idea of governments redistributive function is more of a twentieth century development.
It looks like the first welfare programs started in France in the form of limited government funding for charity hospitals in the early 1900's, about 150 years after Rousseau's death
The "social contract" is not a contract, but the word "contract" is used to infer some kind of responsibility or "norm". In reality it refers to what ever equilibrium has been reach in a certain market context between business owners and everybody else. It is a fiction.
It's not a contract in the legal sense. It's a contract in the sense that both sides have obligations.
When you break a legal contract, you get sued in court. When you break the social contract, the mob rises up and kills you and everyone like you that they can get their hands on. So the rich and powerful had better treat it like it's a real contract, because it's what protects them. It keeps them in a world where they are the rich and powerful, and keeps them from a world where power is only fists and guns. The rich and powerful don't want that world; they want this one. So they'd better keep their side of the social contract.
Arguably you could say there something of a contract - a written body of rules that define how society functions and how it evolves the body of rules.
It's even voluntary in that you can expatriate. But to expatriate you must find another state to immigrate to, and if you don't like any of the social contracts available then tough luck.
I don't think the original concept is was very misleading. Essentially the idea was that if rulers infringe on too many freedoms, the people are morally allowed top rise up and kill them. Every day that you aren't trying to overthrow the rulers, you are affirming the contract.
We take this for granted today, but it was not always the case. Prior philosophy essentially held that the rulers had a God given right to power, and people had a philosophical duty to obey, no matter how they were treated.
There has been a lot of scope creep since the 1700's increasing the scope of government expectations, and deemphasizing the obligation to take action and revolt if you are not happy with the balance.
The original idea was very real politik, where people are only entitled to what they are willing to risk their lives fighting for.
Yeah, that's a really great perspective. It's a contract on the rulers - if you do X you'll be thrown out, not so much an obligation on the individual.
This reads as though written by someone who has never experienced being on the losing side (the long tail) of all the systems they're advocating for. It utterly fails to answer why anyone not at the top of the power curve would want society to be structured this way - most of the described "Social Contract" seems to imply precarity, replacability, and living at the edge of financial disaster for most. Meanwhile, there's little mention that those who hold real power in this kind of system are not part of the curve at all but are those choosing the algorithms and AI systems that rank everyone else.
Then there's this:
> Trickle down doesn’t work because it existed in a hierarchical structure based on the scale production technologies of the times before 2000. There was much more friction in that old system. But in a network economy, the means of production have shifted. It’s 10X more fluid, can create wealth at a much higher rate, decrease costs at a much higher rate, and the network can raise all boats.
To me this reads as "Trickle down didn't work last time, but this time it's different and it'll definitely work". How it will work this time is left as an exercise to the reader.
>It utterly fails to answer why anyone not at the top of the power curve would want society to be structured this way - most of the described "Social Contract" seems to imply precarity, [...] and living at the edge of financial disaster for most.
How much of this is due to wealth distribution and how much of this is due to human nature? eg, 60% of Millennials Earning over $100k Live Paycheck to Paycheck (https://news.ycombinator.com/item?id=27581105)
It would be interesting to know the geographic distribution of those millennials. Living paycheck to paycheck when earning $105k in Oklahoma seems irresponsible. In SF, depending on your situation, that may not be so unreasonable.
Moreover, how does that compare to other people (i.e. non-millennials) who make over $100k? The average (not median) savings rate in the US is pathetic - something like 10%. And that's obviously skewed by high-earners and FI/RE types. So 40% of millennials living below their means might actually be quite good in comparison.
> How much of this is due to wealth distribution and how much of this is due to human nature?
Probably not much.
1. The VAST majority of people who are living paycheck-to-paycheck are not making $100K. According to the same report, Seventy-two percent of those who make less than $50,000 live paycheck to paycheck. Do some high earners live paycheck to payccheck? Sure. But the VAST majority of people living paycheck to paycheck are not high earners.
2. The death of pensions matters. In the post-pension world, maxing out your 401K and then some is a bill. Period. $100K - $20K = $80K. That's almost certainly "paycheck to paycheck" territory if you're raising more than one kid without a spouse, even in low CoL areas. When comparing earnings across time, it's almost more important to consider pensions in addition to inflation.
3. The background of people making >100K also matters. Many people making over $100K are well-educated, which often means significant debt and/or catching up on retirement savings. Think doctors, lawyers, PhDs, etc.
4. CoL also matters. Many people making >$100K are living in a high CoL areas. $50K in Dacatur, IL = $114K in SFBA.
> 2. The death of pensions matters. In the post-pension world, maxing out your 401K and then some is a bill. Period. $100K - $20K = $80K. That's almost certainly "paycheck to paycheck" territory if you're raising more than one kid without a spouse, even in low CoL areas. When comparing earnings across time, it's almost more important to consider pensions in addition to inflation.
The death of pensions also frees up (lots of) money for zero-sum competition, especially the kid-related variety, which includes housing in desirable (=the schools are safe and have good outcomes) areas, or private school tuition, tutoring, et c. If you want to save but half your peers have already chosen "defect" and are putting an extra $20,000/yr toward their kids, who will be competing with your kids for scarce resources in the not-so-distant future, it gets damn tempting to make a choice that's very bad for your retirement but gives your kids a better chance of, if not rising, at least not dropping in socio-economic class.
>1. The VAST majority of people who are living paycheck-to-paycheck are not making $100K.
Right, because the VAST majority of people aren't making $100k.
> According to the same report, Seventy-two percent of those who make less than $50,000 live paycheck to paycheck.
In other words, increasing your income by more than $50k, only decreases "paycheck to paycheck"-ness by 12 percentage points. That seems to support the thesis that it's due to human nature rather than income distribution.
>The death of pensions matters
Everything you pointed out is true, but I don't see how it's relevant to the discussion of whether it's human nature or wealth distribution. The point of my original comment is that people live paycheck to paycheck despite having a lot of money, suggesting that it might not be a money issue but a human one (rat race, hedonic treadmill, etc.)
>3. The background of people making >100K also matters. Many people making over $100K are well-educated, which often means significant debt and/or catching up on retirement savings. Think doctors, lawyers, PhDs, etc.
The debt is higher, but not enough to account for the difference. If your income goes up by 242%, your student debt (and therefore payments) only goes up by 20%[1]
> In other words, increasing your income by more than $50k, only decreases "paycheck to paycheck"-ness by 12 percentage points. That seems to support the thesis that it's due to human nature rather than income distribution.
You're relating statistics which may be unrelated. It's at least not shown they are related, and I have reasons to believe they are less related than as presented. People that make over 100k but live paycheck to paycheck might primarily be made up of people who live in area with extremely high costs of living. People that make less than $50k might be primarily living in low to medium cost of living areas where thy can survive on that but don't have much chance to save.
Without normalizing based on cost of living, you aren't really making a comparison that is useful. By using hard values, such as $50k or $100k, but ignoring that the largest affect on what amount of that is disposable (and thus valid to be applied to savings) is a highly variable cost of living, you ignore variables so large as to make any assumption useless.
You might as well normalize and average values for income and savings the United States and China and make assumptions based on that across both populations together. It's essentially the same thing you're doing here, with a more obvious set of differences. The conclusions you make from it will have flaws in similar ways.
> In other words, increasing your income by more than $50k, only decreases "paycheck to paycheck"-ness by 12 percentage points.
You're assuming people are earning those higher incomes while staying in the same place. Generally that's not the case - you have to move to a higher CoL area to make a higher wage.
Lifestyle inflation definitely exists and very few people are immune. But pointing at "millennials" specifically has a "kids these days" kind of vibe.
I would also add you need to look at how you spend money.
Many of my peers and people I know have terrible spending habits. usually of the form 'I have X coming in a week I will spend Y' not thinking through that some other thing is going to take up most of X and now they have the debt of Y hanging over them.
A more optimal system would surely require a sophisticated technical implementation. I don't think the problem with that proposal is with technical people, but more so with the culture and organizational structures that rise to the top under within our current system.
A super-wealthy, benevolent entity + good culture + comprehensively good ideas + a good technical implementation seems like what we need right about now - making this happen under the circumstances we find ourselves in seems like the tricky part.
EDIT: "good" would probably be more accurately stated as "sufficiently adequate".
Trickle down doesn't work because it is motivated by the people who benefit from it rather than a macroeconomic need.
If the labor market is a buyer market (employers picking employees) then trickle down can't work by definition because the labor market is already stacked in favor of the employers. They already obtained all possible positive sum benefit from the strategy.
If the labor market is a sellers market then trickle down could work in theory but a sellers market means we are in an economic boom/expansion so people are happy and don't need further interventions beyond a raise in the interest rate.
>But in a network economy, the means of production have shifted. It’s 10X more fluid, can create wealth at a much higher rate, decrease costs at a much higher rate, and the network can raise all boats.
Okay now things are getting stupid. Economic saturation (aka overproduction) is sort of perverse. When companies boost production (creating wealth at a much higher rate), demand doesn't necesssarily catch up with increased production. [0] What happens is that the increase in productivity allows you to employ less people. That means less people can afford the overproduction because they are out of a job temporarily. Demand is going down in the short term. This means we are overproducing even more products relative to demand, resulting in even more layoffs. Lots of stuff and nobody there to buy it. Lack of demand then results in lack of investment. The economic growth and productivity growth are slowing down...
[0] It may sound shocking but billionaires wouldn't be billionaires if they didn't spend less than they earn. Creating more billionaires or giving them more money is an effective way of decreasing demand and thus the potential for your economy to grow.
Trickle down doesn't "work", because "work" has been defined a certain way. Define "work" another way, and it does "work". It also presumes that the government somehow has first dibs on what people earn, which is absurd.
Also stated as "The purpose of the system is what it does".
If the system as designed is concentrating wealth in the hands of a few individuals (who themselves helped set up the system), how can we say it's not working as intended? It seems to be working out very well for them.
Businesses create wealth, and then capture the vast majority of it in the process. Rising inequality should be proof enough for you that wealth concentration is happening.
No, the greater society is actually enjoying the vast majority of value created by a business. You know, the people happily giving their money to the business in exchange for goods and services.
It’s essential that the people who built those businesses receive a corresponding amount of wealth in exchange: it is their main motivator to create the business in the first place.
Businesses which, remember, add a tremendous amount of value to the society - value which is much greater than the wealth their founders receive.
No billionaires implies no founders. No founders implies no businesses. No businesses implies a poor, stagnant society where every body suffers. Kind of like all the communist experiments of the last century.
99.999% of business owners are not and never will be billionaires. There's plenty of upside and profit for business founders without the promise of them becoming so obscenely rich.
> No businesses implies a poor, stagnant society where every body suffers. Kind of like all the communist experiments of the last century.
This is just not a fair characterization; for example the Soviet Union was hardly stagnant -- in the span of 30 years they went from an agrarian society to being the first nation on Earth to launch a satellite and the first man into space.
Big business are the engines that drive the economy. For that you need billionaires.
A nation of small businesses sounds attractive to many people, and it's been tried more than once, but it just doesn't work. You're never going to have chip fabs, automaking, steel smelting, oil refining, ship building, turbine making, etc., without big business.
The Soviet Union has been described as a third world economy with a first world military. The US is a first world economy and a first world military. Thanks to the free market.
BTW, you can buy Soviet built cars. The only people who buy them are collectors who take a perverse pride in their awfulness.
Again, it's entirely possible to have big businesses without having billionaires. I just don't see why you are set on tying the two concepts together. You seem to think there would be no industry if there were no potential at having more money than you could spend in 1000 lifetimes.
I'm sorry, but we're going to have to agree to disagree there, because I'm just not buying that.
> The US is a first world economy and a first world military.
Depends on who you ask. There's a meme going around right now of a split screen "billionaire space race" with a chyron reading "Millions of Americans facing eviction". Tie that to the story today "Full-time minimum wage workers can't afford rent anywhere in the US" and I really have to wonder what "first world economy" really means. I mean, just today the US government started issuing checks to families with children in order to reduce child poverty... how is that even a thing in a first world economy where billionaires are racing to space? Seems broken to me.
I've asked people who lived in the former Soviet Bloc. I also know that the USSR build a wall to keep people in, and the US builds a wall to keep people out. People are also trying to swim away from Cuba.
I don't think you can wish that away.
> it's entirely possible to have big businesses without having billionaires
> the US builds a wall to keep people out. People are also trying to swim away from Cuba.
I mean, as you say the US is the #1 economic and military power in the world, and they have been imposing crippling economic sanctions on Cuba for 60 years. You really can't evaluate the situation fairly without including that relevant bit of information.
> The two have always gone together.
Under capitalism, yes, because that's how capitalism works. But one is not a necessary condition of the other. I've already given an example to disprove your assertion.
An economics teacher, when aggressively asked to prove why capitalism is the better system by his left-leaning students tells them:
"At the end of this year I will grade each student individual performance in private but officially you will all receive the same grade, the average of the entire class grades instead, so it is fair for everybody."
They loved it. At the end of the year some work got A grades, some B and some F. But on the average they all received a very honorable B+.
However, next year, with the exact same algorithm, all students received the same grade: Fail.
A society where people are not rewarded each according to his merit is a society where people are not trying their hardest to improve. If you prevent billionaires you also prevent your best performers, your middle class, your millionaires, your small businesses and such. The end result is a uniformly poor society where the most vulnerable hurt the most. Just like communism.
That's a nice little joke, but it bears little resemblance to capitalism vs. communism. This whole thread isn't even really about capitalism vs. communism, but it went that way because that's the way it seems to go anytime the economic order is challenged. "Billionaires are bad" -> "Well communism is worse!" Okay... but that doesn't change anything I said about billionaires and the USA.
Anyway, you seem to be under the impression that capitalism is a system that rewards merit, and communism is a system that doesn't. That's just not true. Capitalism is a system that rewards ownership, not merit. You're essentially saying that everyone who is rich deserves what they have, and as I look around at the pantheon of the wealthiest individuals in the world, I'm not seeing a lot of merit. Where are all the Nobel prize winners? Where are all the billionaire scientists?
Rewards based on ownership are the opposite of rewards based on merit -- you are required to show zero merit under a capitalist society to reap rewards, just a piece of paper declaring your ownership in an asset, ownership which is enforced by the state through violence. How does this lead to a meritorious society? To me it seems it would lead to a society where people don't strive for merit but for ownership of assets.
Look, all I'm arguing for is proportionality. No one is ever going to convince me that the 1% have so much merit that they deserve more wealth than billions of people.
> The end result is a uniformly poor society where the most vulnerable hurt the most. Just like communism.
The end result of capitalism is a society where 1% of the population own 95% of the wealth. Not uniformly poor, I'll give you that. It's quite lopsided and tilted. But one thing's for sure, the most vulnerable are still hurt the most under our capitalist society. Like I said in another post, the USA is sending out child tax credits to reduce childhood poverty this week. Poor children are some of the most vulnerable people in our society, and they are hurting so bad the government has to step in. Capitalism is doing nothing for them. And anyway, It's not like there aren't plenty of uniformly poor capitalist countries around today. Just look at Haiti for an example how of how bad it can get.
How? What's the mechanism? The key component of capitalism is that ownership dictates who gets rewards. It doesn't matter how meritorious you are -- if you don't have ownership you get nothing. That's how the whole thing works.
> That hasn't happened yet in 250 years of free markets. But the communist countries all achieved that in short order.
The whole point of communism is that ownership is communal, so it doesn't make sense to compare ownership between the two and say one is better at ownership. But just look at the trendlines in our system and tell me how things are going to get better under capitalist dynamics. The rich are going to get richer and the poor are going to get poorer. The end stage of capitalism is inevitable unless anti-free market dynamics are introduced.
> And yet people with nothing march literally thousands of miles to try to get into the US. Why aren't they marching to communist countries?
And what happens when they get here? Are they suddenly wealthy and prosperous in our capitalist utopia? Or are they some of the poorest and most marginalized people in our country? America's #1 export is propaganda. That people fall for the propaganda is not an endorsement of capitalism.
> It doesn't matter how meritorious you are -- if you don't have ownership you get nothing.
Tell that to the recent graduate getting multi hundred of thousand offers (with stock!) from FAANG companies.
Tell that to the entrepreneur owning 100% of his brand new company after filling a few forms and paying a small fee. Because that new company is worth exactly 0.
Ownership by itself gets you nothing. Making that property worth something is everything. And that’s why self made billionaires deserve their rewards.
> That people fall for the propaganda
It is funny to pretend to care about a category of people but then refuse them the right to think for themselves. Classical leftist: "We need to save the poor! From themselves…"
> Tell that to the recent graduate getting multi hundred of thousand offers (with stock!) from FAANG companies.
Compensation for labor is not exclusive to a capitalist system. You can receive compensation for labor irrespective of the ownership structure of a corporation. But since you've brought stock into it, that would prove my point -- it doesn't matter how meritorious the individual employee is, their total reward is based on their ownership. It may be that the corporation decides to give the employee more stock if they demonstrate merit, but that just reinforces the point that ownership is the fundamental determiner of compensation.
> Tell that to the entrepreneur owning 100% of his brand new company after filling a few forms and paying a small fee. Because that new company is worth exactly 0.
Okay, but under a capitalist system if that company grows the owner gets 100% of the gains. If someone else (employees) help the owner grow the company, they don't share in that at all (beyond the compensation they received for their labor).
> Making that property worth something is everything. And that’s why self made billionaires deserve their rewards.
I've yet to see an example of a self-made billionaire, sorry. Behind every billionaire is a legion of employees doing the actual value creation. And that's why no one deserves a billion dollars.
> It is funny to pretend to care about a category of people but then refuse them the right to think for themselves. Classical leftist: "We need to save the poor! From themselves…"
You don't know anything about me. Kindly keep your personal jabs to yourself.
> In capitalism ownership also extremely easy to acquire and readily offered as a great motivator.
The 1% own 80% of all stocks, so I disagree ownership is extremely easy to acquire. Acquiring ownership of valuable assets requires capital, and capitalists own most of that.
> In a newly created company? With what money?!
I said behind every billionaire, not a newly created company. i.e. there's no such thing as a self-made billionaire. I'd love to see an example, but so far no one has been able to show me one.
This is the crux of our differing point of view I think. You seem to think a billionaire built their business by themselves (self made) and therefore deserve to be billionaires due to their extraordinary merit. I believe that no one has so much merit, and the success of large businesses is more due to the value created by employees.
I can understand for entrepreneurs, that the first narrative is more appealing. But even if I were to agree with you that capitalism is a system that awards compensation proportional to merit of businesses (which I don't), it still doesn't follow that a founders are reaping rewards proportional to their merit; when a business grows in value, that value is allocated to shareholders according to their ownership stake, not their individual merit.
> the success of large businesses is more due to the value created by employees.
The obvious example is Steve Jobs. He turned around two floundering companies - Apple and Pixar - into immensely valuable companies, without changing the employees. You might argue that one was luck, but two? One right after the other? and the two were totally different businesses? You've got a lot of 'splaining to do about that.
You really haven't though. If you feel you have, cite it, but I'm not seeing it. All that's been asserted is that communism is terrible. I don't see how that proves that if billionaires don't exist then value can't be created. I'm not even arguing for communism. In fact you were the first one to bring communism into the discussion.
You haven't shown that one leads to the other. You're trying to use the USSR as an existence proof for your claim but the conclusion doesn't follow the premise. You have to make the connection if you want to make that claim.
You've asserted that if there are no billionaires, it follows there will be no businesses. That's a very strong claim that demands very strong proof.
Cuba was also propped up economically by the USSR (until the USSR collapsed due to its inability to function economically). The USSR ran a huge deficit in supporting Cuba, and did it for political reasons. Economically it didn't work.
Cuba can also trade with other countries.
I do enjoy your assertion that Cuban communism can only succeed if they have free trade with free market countries.
> then capture the vast majority of it in the process
No they don't. I buy things when I get more than my money is worth. So does everyone else. It's how trade works. Businesses are not extracting wealth from me or you.
Like I replied to the other poster, you are confusing value and wealth.
Let's say a company makes food. It costs them $2 to make and they sell it for $5. You buy it and eat it. Are you now wealthier? No. Your wealth actually decreased $5. Why would you enter this transaction if it made you less wealthy? Well because the food has some utility for you. You buy things when you get more "utility" than your money is "valued". But at the end of the transaction, you are not worth more.
On the other hand, the company's wealth increased $3. We call this increase in wealth "profit". It's the whole point of a business, and they extracted it from you. An exchange of goods and money occurred. Your wealth decreased, while their wealth increased. Is that not extracting wealth from you?
> I think you'll find it impossible to define the difference
It's not that hard...
Value is the dollar value you assign a thing. In large part this is subjective except when it comes to money, which only works because we all agree it has the same value.
Wealth is the sum total value of all your assets, minus all your debts. If all your wealth is not in dollars, this can be subjective too depending on who is assessing the value of the assets.
Let's say we both have $10 in cash. The total wealth in our economy is $20. I exhaust $2 to make the taco, you give me $5 for the taco. My wealth is now $13, we can all agree. Your wealth depends on the value. Since it is a taco, it has no intrinsic dollar value attached to it. The amount of value you assign the taco will depend on how hungry the buyer is. But if you eat that taco the taco is gone. Forever. Your wealth is now $5, and mine is $13. $2 is now missing from the economy, but like the second law of thermodynamics it all depends on how you define the bounds of the economy, as it's likely circulating elsewhere now and potentially creating assets rather than consumable goods. But you can see in this case I didn't actually create any wealth. I created value, and it was destroyed by you, but I ended up wealthier.
If you resold the food in your restaurant for $10 all that means is someone else valued the taco more than you. The analysis is the same though.
That's what you were told it's supposed to do. If it's not in fact doing that, then you have to ask yourself: who told you otherwise and why hasn't anyone fixed it? Also, who is incentivized not to fix it? You should be especially wary if the people who are incentivized not to fix it also have the power to fix it, and continually choose not to exercise it.
Unfortunately in our system, the wealthiest people have the most power, and they are incentivized to maintain a system that makes them wealthier. The wealthier they get, the more power they have over the system. We only have to look back as far as the 2017 TCJA to see how this dynamic plays out in real time.
Government, at least in nation-states that are sovereign currency producers, does indeed have first dibs on what people earn. Income taxes are usually withdrawn from salaries before employees are paid, and in the case of independent contractors, business owners, and capital gains taxes, individuals are on the hook retroactively for taxes.
The only perspective from which your statement makes sense is from the libertarian fantasy of government-as-parasite and individual-as-independent-producer.
> [0] It may sound shocking but billionaires wouldn't be billionaires if they didn't spend less than they earn. Creating more billionaires or giving them more money is an effective way of decreasing demand and thus the potential for your economy to grow.
You are saying that billionaires do more than consume; they save money. If we wish to be more specific, we could say that billionaires, by and large, invest money, billions of it, in enterprises which will make them more money.
Economies don't grow from some abstract demand existing, they grow from production (of final goods and services). Investment in productive assets is the key to the economy's growth.
Obviously some billionaires do more to be leeches than others, but that sort of enterprise seldom needs actual net investment. And obviously not all capital comes from billionaires, and not all billionaires deserve as much money as they have — but your premise here is quite backwards. A billionaire consuming all his wealth by building mansions, showy superyachts, private planes, and the like, is much worse for the economy than a typical billionaire investment, because the superyacht is not a productive asset, it is an extravagant waste.
Gross domestic product is a product, not a longing. You can demand all you like; if no one produces it, your economy does nothing.
Production is driven by growth in demand because capitalists, realizing the demand exists, expand their production on the premise that they might earn more profit. In turn, capitalists also stop producing things that are not in demand, as this is unprofitable.
> Economies don't grow from some abstract demand existing, they grow from production (of final goods and services). Investment in productive assets is the key to the economy's growth.
Production of something not in demand is a nonsensical way to try to grow an economy.
Investment serves an economy by allowing production to happen to meet demand. It's not something we need to encourage particularly hard because it has a built-in profit motive. A billionaire spending all their money is an incentive for other people to invest in the production of those things being built, which is important because it creates income for the workers, which creates demand. Investing for the sake of investing in production otherwise is limited since if people aren't buying, less money is circulating, and less actual useful stuff (such as improvement in living standards) can happen as a result. But I suppose that pointless production (a lot of recent VC activity looks somewhat like this) is still better than a billionaire parking money in hedge funds or HFT shops that are just buying/selling stocks that represent past investment, instead of that money going to the productive enterprise itself.
> Investment serves an economy by allowing production to happen to meet demand. It's not something we need to encourage particularly hard because it has a built-in profit motive.
Which is why billionaires invest. For a profit. We are on the same page.
GP post, on the other hand, was making the nonsense argument that our problem is billionaires reducing demand by investing money instead of spending billions on consumption.
billionaires are unproductive because they don't need the returns to capital their wealth generates, which means we get a gross misallocation at a macroeconomic level. we simply don't need billionaires at all, and would be better served as a society to have 1000 millionaires in place of each billionaire, who could allocate essentially the same capital much more efficiently.
When people say “hoarding cash” we mean something a little more nuanced than literally stuffing it into a vault: just because the wealthy are investing, doesn’t mean it’s beneficial. The desperate search for any returns means tons of cash is getting plowed into things like real estate in expensive cities (which prices out more people) and startups like Wash.io that crash and burn because they have no market but in the process take down tons of small businesses with them which cannot bounce back because of the hysteresis involved. A lot of the “investing” done by the wealthy is at best useless if not actually a net negative to society, and a lot of that money would have more social benefit if it was middle- or working-class people spending on goods and services instead.
> just because the wealthy are investing, doesn’t mean it’s beneficial.
Investments flow to the most productive use of the money. Your hypothesis is that the most productive use is not the most beneficial. That's a pretty tough case to demonstrate.
> is at best useless if not actually a net negative to society
If people prefer to buy stuff from Amazon, how is that not of benefit to those people?
As for real estate, there is only so much real estate in the cities. There is not enough for everyone. Who gets it? There has to be some distribution mechanism.
> Investments flow to the most productive use of the money.
Investments flow to the highest-returning investment. Sometimes that's productive (new factories, infrastructure, research), but sometimes it's pure speculation (land, gold, crypto) or an active drain on health and productivity (patent trolls, telemarketing, tobacco).
> Investments flow to the most productive use of the money.
Also investments propped up by regulatory capture (like zoning, which limits the supply of housing) and corporate buyouts (eliminating the competition) don't seem to be the most productive uses of money, unless you measure only short term gains for the super rich and the politicians they give money to.
Government regulation can and certainly does result in inefficient and mis-allocation of resources. Complaining about people who do follow such rules to make money is misplacing your ire.
> Complaining about people who do follow such rules to make money is misplacing your ire.
I'm not sure if I understand what you are saying. Am I not supposed to point out that the politicians who are supposed to represent the people are too often influenced by those with more money?
>> Investments flow to the highest-returning investment.
> Which is the most productive.
That's just a tautological statement. "It's more productive because it returns more money. Why does it return more money? Because it's more productive."
And you go on to contradict yourself about 2 sentences later when you say:
>> patent trolls
> are unintended consequences of poorly conceived laws, not free markets.
Which means not every investment that makes money is productive.
In a hypothetical free market where every actor has perfect agency, it might be true that money follows productivity. But just like "true socialism has never been tried" (scoff) there has never been a true "free market". In the market we actually operate in, wealth accumulation can be zero-sum.
> is the process of finding the value of something, which is productive.
Depends on the thing. IMO if the underlying thing (such as crypto or gold) isn't productive in and of itself, speculation on it is also zero sum.
Land may or may not be productive, depending on how it's being used. Poorly conceived laws also make it possible to achieve massive profits through real estate speculation without "producing" any wealth - which is zero-sum.
I reject the reductive view that someone only earns money when they increase productivity. Productivity increases will create new wealth. But wealth accumulation for individual actors is possible without providing any productivity increase whatsoever.
Every market participant is a neural network whose objective is to increase its own wealth. How this is done is rarely part of the equation.
Investments are just as good if they are made by the rich or by the poor (say your pension fund).
Savings add an incredible value to our society, no matter who makes them. Remember, one of the pillars that created Silicon Valley and made it hard to copy was availability of funding.
Essentially, excess profits can only go into one a a few places:
- retained earnings (cash in the company's bank account)
- reinvest in the company (either capex or opex)
- paid out as dividends (giving cash to shareholders)
- buy back shares (again, giving cash to shareholders, but in a different form)
- pay off debt (giving cash back to bondholders)
- spend more on labor (hire more workers, or pay workers more)
Realistically, there is nothing in this list that can increase or decrease "usefulness" without another variable. Poorly run companies don't reinvest in the right things (or at the right times). Poorly run companies buy back shares when they are expensive, or pay out dividends when they should be building the balance sheet or reinvesting into the company. And paying workers more only makes sense if it increases output (maybe happy workers make better shopping websites).
To use one wealthy person as an example, Jeff Bezos' billions are somewhat illusory. They give him control of the firm (which, is probably better served in his hands than yours or mine). He can't spend those shares. He can sell them for cash, or give them away to charity, but he cannot spend them in current form. He has chosen to invest them in charities, and more obviously, Blue Origin. But really, he first reinvested potential earnings back into Amazon, at a time when almost everyone thought he was stupid. His investing took awhile, but it created the largest, most capable retail firm in history. So the results of his "investing" seem to have been pretty impressive. I'm not sure about you, but I din't have the kind of foresight to make the decision (otherwise I would have owned Amazon stock back then!) And personally, I like the idea of being able to buy a TV without having to hop into a car and be stuck in traffic for 20 minutes or more. SO the benefit to me is I saved at least 20 minutes when I bought a TV.
You don't have to like this - nobody needs to "like" this. But picking on wealthy people because they've made money is definitely not a productive use of anyone's output.
Your reasoning is not wrong. And I also largely agree with your point. But I want to emphasize that reforming is still vital to the society, even if it just leads to another iteration of the same story.
The reason is that reforming gives the chance for the society to repeating the same pattern at a much higher level.
I.e., thousands of years ago, the long tail suffers in their body parts and basic livelihood. They might one day suddenly die from anything from disease, violence, starvation, etc. Now, the long tail suffers in comfort. One might be obseity, mental disorder, stress, etc.
And system in stagnation often degenerate, not just keeps in tact. The degeneration leads to breakdown of social structure and cultural norms, which eventually leads to chaotic conflicts.
Not only is it left to the reader, but the reader isn't told it took Nature about 400 million years of trail and error and a zillion failures to move from organizing things around Hierarchies to organizing things around Networks - https://www.edge.org/response-detail/10464
Agreed. Moreover, it's infuriating when people claim that 'technology' is responsible for changing the dynamics when they know (or should know) perfectly well that things like inequality and monopolies are caused by monetary policies which subsidize large capital-holders and thus give them an unfair advantage in the markets.
Also, to claim that 'the rich keep getting richer' has always been true is misleading, it's far worse today than ever before because our monetary system has never been so decoupled from the underlying economic processes of value creation. This means our system is more unfair than it has ever been before. There is almost no correlation between skill and success; on the other hand there is a significant correlation between cheating and success.
What the author fails to comprehend is the base has phase shifted into economies of network effects while the superstructure still views them as "just larger industrial scale". This contradiction will resolve itself eventually. What the author fails to comprehend is the magnitude of this separation and the severity of the correction when it does occur.
There's more easily refuted points too. The figured titled "How it will really go" is an apologia for the current system. In the last twenty years we have seen real material losses for the majority of people. Access to healthcare, education, and housing has shrunk. To put it simply, we have first hand evidence that there is not a rising tide lifting all boats.
What he does get right, he doesn't correctly consider the consequences of. Privacy will continue to be eroded in order to optimize network-effect oriented businesses. People will be forced into this because the current economic incentives will not change. There simply isn't an environment for anything else. What he fails to consider all of the rewards for this aren't incentivized in the system and therefore are easily cast aside once privacy has been eliminated. They may exist as carrots now, but without systemic incentives for them to exist, they won't last. His new social contract is based on a bait and switch.
As a whole it comes off as completely out of touch with the material conditions of everyday people. On the other hand, it's his job not to understand.
This guy wants to pretend globalization and monopolistic private ownership of networks is part of a futuristic society instead of just a naked power grab where production moves to the lowest paid location globally and the superrich use monopolist and cartel tactics to create huge spy networks to guard their hoard.
Imo we need to change the social contract back to what it originally was. The fed has too much power and its been used (perhaps inadvertently) to centralize power further. There’s a reason the bank of the US was abolished back in the 1800s.
Also, I think most people forget just how diverse the U.S. is. A great example: I don’t think guns are necessarily good in the city. But in the country I need a gun because I have mountain lions and bears in the area (and county sheriffs would take an hour or more to respond). So federal gun laws don’t make a ton of sense. States don’t have the same interests (see Florida vs Washington state) nor ethos.
The way the US stayed together was each state was sovereign. Some authority was seeded to the federal government for the betterment of all. That being said, both political parties are attempting to consolidate power, and neither likes what the other wants.
Imo the premise is correct we need a new social contract, but imo we need to reinstate the one we already had.
Compared to moving to another country? Yes it absolutely is. There are no legal impediments for moving to and living/working in another state for a US citizen. This in contrast to even the EU, where despite freedom of movement, there are significant legal restrictions/requirments depending on state/jurisdiction for permanent alien residency.
The only real impediment to moving between states as a US citizen is financial and social, but this is the case literally everywhere, even intrastate.
You absolutely do not have that freedom. Every country has their own rules and has it in their power to prevent you from moving to their country permanently.
>The fed has too much power and its been used (perhaps inadvertently) to centralize power further. There’s a reason the bank of the US was abolished back in the 1800s.
The Fed has too little power. It doesn't even have enough power to address all the macroeconomic problems that the congress is ignoring. Just think about it. We have to rely on the clowns in the government to make purely logic and rationally driven decisions relating to our economy when they are voted in for the exact opposite reasons. People vote based on emotion and ideology and that is how politicians have to think to win elections.
When you have a government that isn't even doing the bare minimum then yes you'll have to rely on a different institution even though it's not the job of that institution to solve the problem.
Honestly. I am tired of this. I am tired of people refusing to face reality, living in their little bubble and then blaming some guy named fed trying to extinguish a house fire with a bucket.
You have to raise the equilibrium interest rate. Either by raising inflation, lowering interest rates below the equilibrium rate, increasing borrowing or simply taxing money in bank accounts. I'd rather have a big inflation year that makes macroeconomics work again than endless stupid ideology.
This isn’t the 1800s anymore. The documentary, from what I’ve seen of it, discusses quantitative easing - which arose because of insufficient oversight over wallstreet. A lack of oversight that arose from repeated lobbying, weakening of the regulator, and faith that “the system will never allow it to happen” and “these are the smartest guys in the room”.
The old social contracts worked in an older world, which didn’t have mechanization and labor was the source of industry.
Today, network effects mean gmail is free but the user is the product, and other configurations which would seem extremely odd in the 1800s.
The FED isn’t even the problem for what you are trying to resolve. I cannot understand why people tend to focus on it.
>quantitative easing - which arose because of insufficient oversight over wallstreet.
Many would take issue with this conclusion. It's the fact that the Fed exists as a lender of last resort that created the moral hazard in the first place, thus enabling "Too big to fail" and all of that.
I am sorry to be this blunt, but for all practical discussions, those people are wrong.
Unless your goals are a reduction in US GDP, and dramatic decrease in financial ability in the USA, you need a central bank. In analogy terms, they’re the next evolutionary node in the banking tree. The higher complexity let’s you exert stability against things like currency manipulation, macroeconomic instability and the like.
The crash is because oversight disappeared and people bought into myths.
Crucially one of the myths that Wall Street believed was that someone else was always checking the work to find advantage.
Most of Wall Street aimed for safe advantage and were following along as a herd.
While I agree the network effects expose everyone to the power law distribution of outcomes, and awareness of that is and will continue to be jarring, you can mitigate those effects with privacy and distance. The problem isn't that people are rich or poor, it's that we have addictive technologies that prevent you from avoiding them.
His premise requires this network cohesion and continuity stays the same or increases, where I think we're at the threshold of social re-balkanization, where the weak links in networks (social media, class, etc) simply collapse on their own weight into traditional strong sub-networks based on family, region, ideology, religion, ethnicity, etc. Whether you see that as reactionary against inevitable progress of history, or hope for survival, it's the counter-bet to what he's predicting. I disagree that a new equillibrium he predicts will be a cohesive cultural homogenization mediated by network technologies. Like some globalized China or Singapore.
I think the social polarization we're seeing now is an example of weak-link network collapse in very fast motion, and an example is social-credit/vaccine passports, where you are going to see the resurgence of subcultures to the point of internecine civil conflict over them and measures like them. I would make a bigger bet on all-against-all conflict than what he in-effect describes as an efficient, China style, dominating, technologically empowered planned elite.
As someone who has spent a lifetime travelling in various subcultures, there will always been an underground, they will always be the future, they always prevail because that is where all non-linear growth comes from. The political middle and the comfortable have desire and symbolic comforts, but they do not have necessity and that's what makes me willing to always bet big against beliefs in a managed future.
The whole thing is predicated on ideas like, "Don't worry, everything will be provided for you, except dignity, but soon everyone will have forgotten what that was anyway. It was the only thing standing in the way." When I hear sentiments that map to that, the only meaningful question to me is how to get short.
One of the greatest paradoxes of our age is that countries like the USA and UK are, to a very limited extent, democracies. And yet, just about every political decision taken by these countries in the last 37 years, at the very least, has increased the powers of the Invisible Government while eroding the health, wealth, liberty, and happiness of the vast majority.
How have they gotten away with recklessly risking the physical and biological foundations of life itself? How in heaven’s name has the vast majority served as cheerleaders for their own impoverishment? The answer to such questions is that the American edifice of exploitation, parasitism, enslavement, perpetual warfare, and ecocide rests on massive, mutually-supporting pillars.
My encyclopedia and many articles I wrote about this subject establish the existence of just one pillar: Smears, incarcerations, and assassinations. Assassinations by themselves might work in a pure dictatorship. But in a system that has democratic pretensions, murders must be supplemented by other pillars. Here then is a glimpse of these pillars:
1. Cloak and Dagger: This pillar is obviously the focus of our interview. To secure more power and riches for its members, the Invisible Government often resorts to smears, incarcerations, and murders. It not only silences or murders its influential opponents, but it also targets innocent bystanders who might pose a threat to its power and goals. Also, when this serves its interests, the Invisible Government is perfectly willing to destroy junior members of its own cabal.
2. Reign of the Psychopaths: Apart from marginal, small-scale, instances of real democracies, all current political and economic systems on earth are conducive to the rise to power of conscience-less, irresponsible, self-seeking psychopaths. “We must admit to ourselves,” says Mike Krieger, “that there are truly evil geniuses out there, and in most cases these characters have taken control of the power structure.”
3. Total control of the banking system and of the issuing and coining of money. The critical importance of this aspect is captured in this article and in John Acton’s aphorism: “The issue which has swept down the centuries, and which will have to be fought sooner or later, is the people versus the banks.”
3. Sunshine Bribery: Eric Margolis’ witticism captures the sleaze of global politics: “It’s often cheaper to buy a legislator than a second-hand car.”
4. Information: From the movie, music, book, and school “industries,” to radio, TV, and newspapers, to online and offline encyclopedias, to bought experts and fake dissidents, to online search engines and social media—the Invisible Government controls most of our sources of information. As a result, all of us are, in varying degrees, denizens of Huxley’s Brave New World.
5. Human Nature. The Invisible Government capitalizes on a vast array of human failings to sustain and augment its riches and power. Here are just two examples of such failings. To begin with, we are all manifestly susceptible to indoctrination. This weakness is in turn exacerbated by the tendency to cling to “our” convictions in the face of overwhelming evidence against them.
Carl Sagan once said:
One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle. We’re no longer interested in finding out the truth. The bamboozle has captured us. It’s simply too painful to acknowledge, even to ourselves, that we’ve been taken. Once you give a charlatan power over you, you almost never get it back.
6. Controlled, Manipulated, Trivialized, and Rigged Elections. “If voting made any difference,” Mark Twain observed, “they wouldn’t let us do it.”
7. Broken Electoral Promises. In the absence of real democracy, there is a vast gap between what politicians and parties pledge before elections and what they deliver after elections. Woodrow Wilson, Franklin Roosevelt, and Donald Trump, for in...
Network effects are at the heart of most of the tech/culture/economy discussions that crop up here. Aside from the very obvious company spin, this is a good stab at the issue.
However, any system that rewards only 10% of its participants, is essentially Hollywood. It’s not sustainable, and people will simply check out. The only way to prevent that is to either change the odds, or to sell propaganda.
I like the gambler/house analogy. It’s also has intuitive suggestions on how they can be handled.
What is to stop governments from just taking over that spot? It’s perfect for what governments are meant to do, or think they are meant to do.
“You will have access to training” is a few rungs below the “lift yourself up by your bootstraps”. Especially after acknowledging that only 10% of the population actually perform fast enough for the system to reward you.
> However, any system that rewards only 10% of its participants, is essentially Hollywood. It’s not sustainable, and people will simply check out. The only way to prevent that is to either change the odds, or to sell propaganda.
Hollywood seems to reward a lot more than 10% of its participants. There are many thousands of people living middle-class lives as part of the movie business in Los Angeles and elsewhere. Much of their ability to do so is driven by the unions active in the entertainment industry and the protections they demand for non-superstar workers.
Sorry, let me rephrase that- I’m describing reward distributions in different industries - for example holly wood actors or major league athletes. For each successful actor/athlete there are millions who never even saw the light of day.
I am not talking about the larger business ecosystems, as those would exist for any industry.
Other stuff aside, can we please not go around capitalizing the word "founder"? I've seen it before in a few other blogs that get posted here. Makes it sound like an exalted priesthood, and it's pretty nauseating.
Maybe the issue is not how it is written but what it means to those who write the words. I also believe you're right about the cause (founders and technocrats are the new clergy).
Maybe part of the problem is in the first paragraph. Founders/VC types seem to think that being able to make money off of people's usage of your product is the same as "creating value" for those people.
To take an extreme example, if someone says I'll burn down your house if you don't pay me, is value created?
Ok and if an advertising based economy/culture creates a phony demand for something, and then people purchase that something, is value created?
Glad that someone is talking about the reality of how things are. The death of the nation state and other hierarchical organizations and of broad-based democracy is written in the mathematical structures of networks.
It just makes no sense to treat all nodes in a complex network equally since they are unequal by virtue of network structure itself. And it certainly makes no sense to create large C&C hierarchies when well-positioned nodes and clusters carry far more value and information.
And reality does not tolerate inefficient structures in the name of ideology for long in the modern world especially since all ideology is variable and none fundamental.
It will of course be covered up by various PR for a long time. But the writing is on the wall.
The proposals presented here basically boil down to:
You give up your privacy and I promise I won't use my big brother like knowledge of everything about you to force you under my thumb even further.
I've seen this movie before and the deal always gets altered further
I cant help but observe that the "Power law" is more or less +1-2 SDs above mean... The network effect is leveraging those in the top (say) 5%ile across all people.
Anyone with internet can use the software of the top 5% of programmers.
Anyone with youtube can view the top 5% of Skateboarders (or whatever content)
Etc.
This concentrates all the wealth onto them.
If we want to combat this concentrating force we need to also work on dispersion forces. We can ensure that those near the mean participate in the wins. For many this looks like equity.
across society we need to be bringing this equity to the public markets sooner. If I were the SEC I'd be working on rules that say companies cannot block sale/liquidity of shares (it is one's property after all). This would help create liquidity for the lower&middle folks who get equity in small businesses and allow large institutions to bring this opportunity to all (via index ETFs). Then instead of holding shares in some small startup you could, for example, sell some and hold an entire pool of startups (VC style) and spread your time investment in a single company across many, without job hopping.
> And we believe it’s up to tech Founders, VC’s and employees to do something about it.
Nobody stops Silicon Valley from saving the world, it's just that it is harder than creating Wi-Fi connected juicers and apps, even if that app is Facebook.
I understand the hubris, everyone uses these apps, but getting people hooked on something we are predisposed to want like sugar, social media or loot boxes only qualifies you as a predator.
Interesting that NFX posts always get showcased in HN in front page.Plus, any top comments on other posts also link to NFX website. Guess there is a big pro NFX lobby lurking in HN.
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[ 3.2 ms ] story [ 57.0 ms ] threadA proper economy needs to be general in Bataille’s sense. It needs to incorporate social goods as its measure, not just abstractions like gdp and exchange value.
This article is right that society has failed to adapt to rapidly proliferating digital technologies, leading to the complete erosion of social structures, without sufficient replacements, but in my estimation it does not go far enough
Much of Bernard Stiegler’s work centers around establishing such alternatives: https://arsindustrialis.org/manifesto-2010
Shareholders get to collude, even against consumers, by merging companies, and the government goes to great lengths to give specific minority shareholder rights to boost the collusion. But a group of small businesses don't get to if they don't merge; I think they should be able to collude against platforms backed by network effects, hardware lock in, etc., I'm not saying they should be able to collude against consumers.
Hard pass, I'll take a social contract defined through democracy every time.
Founders and investors, in particular, are uniquely unqualified to evolve the social contract because they have overwhelming financial interests.
They are the least competent group to be given power to shape any societal rules and contracts or to define how the humanity should look like.
So a purely random selection would seem like an improvement at this point.
Just as politicians may not be experts in the specific areas that they legislate on, the members of this second chamber would have the right to ask for input from specialists. This could be seen as an extension of the right that juries have in some states to ask questions of expert witnesses.
Even if, in practice, the second chamber end up mostly listening to advisers (or lobbyists) provided by the existing political parties, they would at least have to hear a variety of opinions, let's say in proportion to the partisan leanings of that chamber. This would eliminate gerrymandering and other problems like campaign financing.
The deliberative structure used is based on research into group decision-making, and is usually some form of system where people split into small discussion groups that engage in structured discussion, then present something to the broader group, then discuss again, then shuffle into different groups and repeat the process.
The fact that people are self-interested also doesn't pose a problem, so long as the sample is large enough. You probably want at least 100 for good measure, depending on the population being represented. Because it's a representative random sample (ideally it's not fully random, but weighted to represent population demographics), you get a broad slice of the population and therefore many competing interests. An individual may wish to further their own interests, but this would conflict with the interests of everyone else. Overall, the group's incentive is to do a good job, because they live in society and their decisions will affect them.
This argument is being taken as a Gospel. Seems to be a work of people who gave us the Stanford Torture Experiment. Given 50% of the so called psych studies are not reproducible. Basing foundational changes on this kind, fast-food pop psy is not a great idea.
We have wisdom of thousands of years in the classics and religious texts, I would rely on them.
There may be some people that misunderstand science, or who try to apply it outside of the regime where it is appropriate, and that is an issue (science can never answer the question: is an action moral, for instance).
But the institution of science is as far from religion as it can get. Religion asks you to believe things because an individual or a book tells you that it is so, and rewards those who take those statements on faith. Science, on the other hand, asks you to test a statement, to use the scientific method to attempt to falsify hypotheses, and through an interactive and iterative process improve your understanding of the phenomena in question.
That difference is why science has taught us more about the world in the last 400 years than religion has in 4000. Hell, science taught us more about the world in the last year than religion has since cavemen were drawing the sun on cave walls.
That’s not to say religion is useless or necessarily negative. It can be, just like any other institution. And frankly, there is just not that much overlap between the realms of religion and science. Science does not attempt to answer questions about the existence of god, or the morality of actions.
The issue is when religious people or organizations attempt to use their religion to answer questions about the physical world. That’s when science is needed.
> "Classics and Religious texts ... I will take my chances with imperfect science"
In fact, you directly disagree with one of the reasons you gave for "believing" in science:
> "science can never answer the question: is an action moral, for instance"
> "[religion said] stoning is an appropriate punishment for premarital sex"
Learn the distinction between knowledge and wisdom before lecturing about science.
Most important emotion the OP has to contend with jealousy. I myself am a bowl of mediocrity but I do not label every other success or successful person as a sociopath using garbage science.
Makes me think of Gwyneth Paltrow doing the food stamp challenge but ending up buying shit no person on food stamps would purchase.
You can't have a functioning democracy when you have militant organizations suppressing candidates who dare challenge the status quo.
http://drnissani.net/mnissani/revolutionarystoolkit/DartGun1...
The nearby photograph shows the late US Senator Frank Church displaying a Central Institute of Assassinations’ (CIA) dart gun that, depending on the poison used, either causes an immediate heart attack or a belated cancer. According to Congressional 1975 testimony, the gun fires a frozen poison-tipped dart. The tiny dart can penetrate clothing and leaves a barely-visible pin-sized red mark where it enters the victim’s body. In the heart attack version, once in the body, the poison melts, gets absorbed into the bloodstream, and causes cardiac arrest. The poison then denatures quickly, so that a routine autopsy is likely to ascribe the heart attack to natural causes.
In passing: Church probably paid for his courage–and for his progressive record–with his life. By 1984, at the early age of 59, he died of . . . cancer.
Bob Marley was also likely murdered by oncogenic viruses placed on a nail in his shoe which led to his brain cancer and ultimate collapse a few years later. He was not intimidated when his house was shot up and didn't back down. He too paid the price with his life.
Molecular mechanisms of viral oncogenesis in humans:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6336458/
Poisons such as Oleandrin, which is a toxic cardiac glycoside found in the poisonous plant, oleander (Nerium oleander L.), interferes in some essential processes within the cell, the most important of these being the inhibition of the Na-K ATPase. This protein enables the cell to exchange the cations Na+ and K+ between the intercellular and extracellular spaces by which, for instance, electric signaling is made possible in nerve cells. Oleandrin binds to specific amino acids in the protein, causing it to lose its function. After depolarization of the cell in which Na+ flows into the cell, the Na+ cannot be transported back into the extracellular membrane, causing the sodium gradient to disappear.
Also:
> The rich get really rich, and the poor get poorer by comparison. Unfortunately, this has always been true. It is not an artifact of modern economics.
This is not true as far as I know. There have been times in recent history between the early ~1900 and ~1970 where the income gap decreased and worker protection increased. It was a time of stronger worker movements, unions, emancipation and policy aimed at the larger demographics of the public. The 70's mark a shift towards neo-liberal ideology in the western world.
The article is riddled with dystopian suggestions. There are some things I can agree with. For example I very much agree with the importance of workplace transparency. And there is also an underlying tone of empathy with the unfortunate, but it comes off as patronizing.
I think the biggest fallacy is to think that our societies are becoming more meritocratic almost by default (as assessed in the article). Ignoring whether that is a good thing or not, I doubt this is true at all or if it even can be measured objectively.
A lot of the things you mentioned only developed during the time when there was (or seemed to be) a compelling competing ideology.
Communism/socialism was seen as a potential alternative to capitalism during that time, and I think that the competition of ideas during that time led to more benefits for the lower end of the economic ladder.
Communism/socialism was seen as a potential alternative to capitalism during that time, and I think that the competition of ideas during that time led to more benefits for the lower end of the economic ladder.
Yes. I've made that point before, but it's not a mainstream position.
Many of the problems we have with capitalism come from capitalism being a monopoly, and acting like one.
Here's anti-communism PR from the 1949-1955 on the distribution of wealth. Back then, capitalism had to be sold in a competitive market.[1][2]
[1] https://archive.org/details/Americas1955
[2] https://archive.org/details/MeetKing1949
That part doesn't even make any logical sense because there is nothing in economics that requires growing inequality. It's usually political power structures that need growing inequality. I would go one step further and say that growing inequality is bad for economic growth and has often ended in a revolution.
When you say democracy, are you referring to democracy the abstract philosophy, or the specific concrete implementation of "democracy" that we currently operate under?
Would you be open to considering a third option: a complete re-implementation of democracy from the ground up?
> Founders and investors, in particular, are uniquely unqualified to evolve the social contract because they have overwhelming financial interests.
Similarly, are are you referring to founders and investors in the abstract sense (a general methodology for organizing and funding the implementing ideas), or the specific types of founders and investors that have risen to the top, under our current implementations of democracy, economics, etc?
Would you be open to considering an alternative approach: a new kind of founding and funding of the implementation of an idea, one that is deliberately designed from day one to avoid the shortcomings we see today, as well as be ever watchful for the emergence of novel new shortcomings that may emerge?
Both. At a philosophical level, democracy is a just (while imperfect) method for long-term decision making of a large system of humans. Nothing else comes close.
Concretely, our democracy has a lot of flaws but hasn't been awful enough to degrade into totalitarianism in many many years, so I'd say it's doing its job. It's even amenable to upgrades, if with difficulty from the enormous consensus required.
> Would you be open to considering a third option: a complete re-implementation of democracy from the ground up?
In the abstract, yes, poking at our poorly-architected democratic machine is one of my favorite hobbies.
In reality, there's significant risk of destabilization that comes with re-architecting a political system, so it's hard to say.
> Similarly, are are you referring to founders and investors in the abstract sense (a general methodology for organizing and funding the implementing ideas), or the specific types of founders and investors that have risen to the top, under our current implementations of democracy, economics, etc?
Specifically founders and funders as they exist in our economy under our current sociopolitical system (hence: they have competing interests in making society better vs owning a company that isn't bankrupt and returns value to shareholders)
> Would you be open to considering an alternative approach: a new kind of founding and funding of the implementation of an idea, one that is deliberately designed from day one to avoid the shortcomings we see today, as well as be ever watchful for the emergence of novel new shortcomings that may emerge?
I'm not sure what that means. Governments have a monopoly on force, so you must have system A or B but not both. Funding/founding is decentralized, so you may have both systems A and B, and the dominant system over time tends to be the one that makes the most money.
So am I open to an alternative founding/funding approach? Sure. Do I think it's going to improve the social contract in a world of ruthless capitalism? No.
At the abstract philosophical level, democracy doesn't dictate specific implementations, does it? And if it does, who enforces these dictates?
> Concretely, our democracy has a lot of flaws but hasn't been awful enough to degrade into totalitarianism in many many years, so I'd say it's doing its job.
If "not degrading into totalitarianism in many many years" is the standard/goal, but I'd rather we aim a bit higher than that.
> It's even amenable to upgrades, if with difficulty from the enormous consensus required.
In abstract theory - whether our concrete implementation is upgradeable in fact is unknown.
> Nothing else comes close.
Nothing else that we've tried, within recorded history up to the present , under a disorganized, poorly understood, multivariate environment. How many things have we tried? How many minds are working on the idea?
There was a time where nothing came close to the horse and buggy, but then something did.
There was a time when broad humanity was not very good at reading, writing, or even thinking in general, but then they became better.
> In reality, there's significant risk of destabilization that comes with re-architecting a political system
Only if you choose to physically roll out the new design (well, it may be a bit more complex)...but even if you do, there is a wide variety of options for how you might roll it out. It seems within the range of possibilities that if a clearly superior design/implementation existed (or was even under serious discussion), and the public had adequate knowledge of the details/philosophy of it, it would exert a kind of psychological force on the current system...kind of like when a business ups its game in response to a new rival showing up on the scene, as well as the effect that has on consumer perceptions, preferences, and demands.
> so it's hard to say
It is indeed...but with the internet, we can (well, we have the technical ability to at least) start a broad discussion on the topic, which may start shedding some light on the question (depending on the quality, format, etc of that discussion). Perhaps the new system itself could even be used to facilitate a high quality discussion, which would also provide some beta testing feedback.
> Specifically founders and funders as they exist in our economy under our current sociopolitical system (hence: they have competing interests in making society better vs owning a company that isn't bankrupt and returns value to shareholders)
> I'm not sure what that means.
Perhaps some innovation is needed here as well (with respect to this project at least).
> Governments have a monopoly on force
https://en.wikipedia.org/wiki/Gun_ownership
https://en.wikipedia.org/wiki/Tank_Man
https://www.opendemocracy.net/en/transformation/how-did-gand...
> so you must have system A or B but not both.
Maybe, maybe not, I've heard many such predictions over the years during system refactoring. If it is not an immutable physical law of nature, and we are discussing what is possible in the future, I am skeptical of claims that things cannot be done.
> Funding/founding is decentralized, so you may have both systems A and B, and the dominant system over time tends to be the one that makes the most money.
Key word: tends.
Implicit: under the current system (for a given, fairly arbitrary set...
A state is considered intact if the government has a monopoly on the legitimate use of force. A state can become predatory if they abuse that legitimacy, but other than that, if the government loses its monopoly, you have what is referred to as a failed state.
Wut??? How can a person living on their own land be a renegade?
To nowhere, since there's nowhere else to go.
A) You are born into a system without your permission, and must abide by the rules of those in power or you will be punished.
B) Laws can also be morally sound and in place for good reason.
Except there's no such thing as free immigration right now (except within the EU) and even if there were it would only be a market among offerings and there's no option for non-participation since states dominate all inhabitable territory on Earth.
It was mostly an argument in favor of democracy and some kind of redistributive system.
Marriage contract? In Rousseau's time many women did not have those either.
It looks like the first welfare programs started in France in the form of limited government funding for charity hospitals in the early 1900's, about 150 years after Rousseau's death
When you break a legal contract, you get sued in court. When you break the social contract, the mob rises up and kills you and everyone like you that they can get their hands on. So the rich and powerful had better treat it like it's a real contract, because it's what protects them. It keeps them in a world where they are the rich and powerful, and keeps them from a world where power is only fists and guns. The rich and powerful don't want that world; they want this one. So they'd better keep their side of the social contract.
“You need to give me free education because of our social contract”
Which really means “give me free stuff cause I want it”.
It's even voluntary in that you can expatriate. But to expatriate you must find another state to immigrate to, and if you don't like any of the social contracts available then tough luck.
We take this for granted today, but it was not always the case. Prior philosophy essentially held that the rulers had a God given right to power, and people had a philosophical duty to obey, no matter how they were treated.
There has been a lot of scope creep since the 1700's increasing the scope of government expectations, and deemphasizing the obligation to take action and revolt if you are not happy with the balance.
The original idea was very real politik, where people are only entitled to what they are willing to risk their lives fighting for.
Then there's this:
> Trickle down doesn’t work because it existed in a hierarchical structure based on the scale production technologies of the times before 2000. There was much more friction in that old system. But in a network economy, the means of production have shifted. It’s 10X more fluid, can create wealth at a much higher rate, decrease costs at a much higher rate, and the network can raise all boats.
To me this reads as "Trickle down didn't work last time, but this time it's different and it'll definitely work". How it will work this time is left as an exercise to the reader.
> 'If you feed the horse enough oats, some will pass through to the road for the sparrows.'
How much of this is due to wealth distribution and how much of this is due to human nature? eg, 60% of Millennials Earning over $100k Live Paycheck to Paycheck (https://news.ycombinator.com/item?id=27581105)
Moreover, how does that compare to other people (i.e. non-millennials) who make over $100k? The average (not median) savings rate in the US is pathetic - something like 10%. And that's obviously skewed by high-earners and FI/RE types. So 40% of millennials living below their means might actually be quite good in comparison.
Probably not much.
1. The VAST majority of people who are living paycheck-to-paycheck are not making $100K. According to the same report, Seventy-two percent of those who make less than $50,000 live paycheck to paycheck. Do some high earners live paycheck to payccheck? Sure. But the VAST majority of people living paycheck to paycheck are not high earners.
2. The death of pensions matters. In the post-pension world, maxing out your 401K and then some is a bill. Period. $100K - $20K = $80K. That's almost certainly "paycheck to paycheck" territory if you're raising more than one kid without a spouse, even in low CoL areas. When comparing earnings across time, it's almost more important to consider pensions in addition to inflation.
3. The background of people making >100K also matters. Many people making over $100K are well-educated, which often means significant debt and/or catching up on retirement savings. Think doctors, lawyers, PhDs, etc.
4. CoL also matters. Many people making >$100K are living in a high CoL areas. $50K in Dacatur, IL = $114K in SFBA.
The death of pensions also frees up (lots of) money for zero-sum competition, especially the kid-related variety, which includes housing in desirable (=the schools are safe and have good outcomes) areas, or private school tuition, tutoring, et c. If you want to save but half your peers have already chosen "defect" and are putting an extra $20,000/yr toward their kids, who will be competing with your kids for scarce resources in the not-so-distant future, it gets damn tempting to make a choice that's very bad for your retirement but gives your kids a better chance of, if not rising, at least not dropping in socio-economic class.
Right, because the VAST majority of people aren't making $100k.
> According to the same report, Seventy-two percent of those who make less than $50,000 live paycheck to paycheck.
In other words, increasing your income by more than $50k, only decreases "paycheck to paycheck"-ness by 12 percentage points. That seems to support the thesis that it's due to human nature rather than income distribution.
>The death of pensions matters
Everything you pointed out is true, but I don't see how it's relevant to the discussion of whether it's human nature or wealth distribution. The point of my original comment is that people live paycheck to paycheck despite having a lot of money, suggesting that it might not be a money issue but a human one (rat race, hedonic treadmill, etc.)
>3. The background of people making >100K also matters. Many people making over $100K are well-educated, which often means significant debt and/or catching up on retirement savings. Think doctors, lawyers, PhDs, etc.
The debt is higher, but not enough to account for the difference. If your income goes up by 242%, your student debt (and therefore payments) only goes up by 20%[1]
[1] https://www.urban.org/urban-wire/which-households-hold-most-..., comparing the debt/income ratios of households in the second quartile and the 75-90th percentile.
>4. CoL also matters
Agreed, we need a study that controls for cost of living
You're relating statistics which may be unrelated. It's at least not shown they are related, and I have reasons to believe they are less related than as presented. People that make over 100k but live paycheck to paycheck might primarily be made up of people who live in area with extremely high costs of living. People that make less than $50k might be primarily living in low to medium cost of living areas where thy can survive on that but don't have much chance to save.
Without normalizing based on cost of living, you aren't really making a comparison that is useful. By using hard values, such as $50k or $100k, but ignoring that the largest affect on what amount of that is disposable (and thus valid to be applied to savings) is a highly variable cost of living, you ignore variables so large as to make any assumption useless.
You might as well normalize and average values for income and savings the United States and China and make assumptions based on that across both populations together. It's essentially the same thing you're doing here, with a more obvious set of differences. The conclusions you make from it will have flaws in similar ways.
You're assuming people are earning those higher incomes while staying in the same place. Generally that's not the case - you have to move to a higher CoL area to make a higher wage.
Lifestyle inflation definitely exists and very few people are immune. But pointing at "millennials" specifically has a "kids these days" kind of vibe.
That wasn't my intention. My only usage of "millennials" was to quote the article title.
Many of my peers and people I know have terrible spending habits. usually of the form 'I have X coming in a week I will spend Y' not thinking through that some other thing is going to take up most of X and now they have the debt of Y hanging over them.
> We need new social contracts or we’re headed for some nasty conditions.
> And we believe it’s up to tech Founders, VC’s and employees to do something about it.
"Tech people, please build something that pacifies the masses, or they might rise up and take our money!"
A super-wealthy, benevolent entity + good culture + comprehensively good ideas + a good technical implementation seems like what we need right about now - making this happen under the circumstances we find ourselves in seems like the tricky part.
EDIT: "good" would probably be more accurately stated as "sufficiently adequate".
If the labor market is a buyer market (employers picking employees) then trickle down can't work by definition because the labor market is already stacked in favor of the employers. They already obtained all possible positive sum benefit from the strategy.
If the labor market is a sellers market then trickle down could work in theory but a sellers market means we are in an economic boom/expansion so people are happy and don't need further interventions beyond a raise in the interest rate.
>But in a network economy, the means of production have shifted. It’s 10X more fluid, can create wealth at a much higher rate, decrease costs at a much higher rate, and the network can raise all boats.
Okay now things are getting stupid. Economic saturation (aka overproduction) is sort of perverse. When companies boost production (creating wealth at a much higher rate), demand doesn't necesssarily catch up with increased production. [0] What happens is that the increase in productivity allows you to employ less people. That means less people can afford the overproduction because they are out of a job temporarily. Demand is going down in the short term. This means we are overproducing even more products relative to demand, resulting in even more layoffs. Lots of stuff and nobody there to buy it. Lack of demand then results in lack of investment. The economic growth and productivity growth are slowing down...
[0] It may sound shocking but billionaires wouldn't be billionaires if they didn't spend less than they earn. Creating more billionaires or giving them more money is an effective way of decreasing demand and thus the potential for your economy to grow.
If the system as designed is concentrating wealth in the hands of a few individuals (who themselves helped set up the system), how can we say it's not working as intended? It seems to be working out very well for them.
This implies that wealth is zero sum. It isn't. Creating wealth, which is what businesses do, is not "concentrating" it.
If a business achieves a 10x leap in productivity and lowers prices for its customers, has it created wealth for others? Yes.
If that business is owned by a single person, has that person's wealth relative to the rest of society increased? Also yes.
Creating wealth is not concentrating it.
Businesses which, remember, add a tremendous amount of value to the society - value which is much greater than the wealth their founders receive.
No billionaires implies no founders. No founders implies no businesses. No businesses implies a poor, stagnant society where every body suffers. Kind of like all the communist experiments of the last century.
> No businesses implies a poor, stagnant society where every body suffers. Kind of like all the communist experiments of the last century.
This is just not a fair characterization; for example the Soviet Union was hardly stagnant -- in the span of 30 years they went from an agrarian society to being the first nation on Earth to launch a satellite and the first man into space.
A nation of small businesses sounds attractive to many people, and it's been tried more than once, but it just doesn't work. You're never going to have chip fabs, automaking, steel smelting, oil refining, ship building, turbine making, etc., without big business.
The Soviet Union has been described as a third world economy with a first world military. The US is a first world economy and a first world military. Thanks to the free market.
BTW, you can buy Soviet built cars. The only people who buy them are collectors who take a perverse pride in their awfulness.
I'm sorry, but we're going to have to agree to disagree there, because I'm just not buying that.
> The US is a first world economy and a first world military.
Depends on who you ask. There's a meme going around right now of a split screen "billionaire space race" with a chyron reading "Millions of Americans facing eviction". Tie that to the story today "Full-time minimum wage workers can't afford rent anywhere in the US" and I really have to wonder what "first world economy" really means. I mean, just today the US government started issuing checks to families with children in order to reduce child poverty... how is that even a thing in a first world economy where billionaires are racing to space? Seems broken to me.
I've asked people who lived in the former Soviet Bloc. I also know that the USSR build a wall to keep people in, and the US builds a wall to keep people out. People are also trying to swim away from Cuba.
I don't think you can wish that away.
> it's entirely possible to have big businesses without having billionaires
The two have always gone together.
I mean, as you say the US is the #1 economic and military power in the world, and they have been imposing crippling economic sanctions on Cuba for 60 years. You really can't evaluate the situation fairly without including that relevant bit of information.
> The two have always gone together.
Under capitalism, yes, because that's how capitalism works. But one is not a necessary condition of the other. I've already given an example to disprove your assertion.
"At the end of this year I will grade each student individual performance in private but officially you will all receive the same grade, the average of the entire class grades instead, so it is fair for everybody."
They loved it. At the end of the year some work got A grades, some B and some F. But on the average they all received a very honorable B+.
However, next year, with the exact same algorithm, all students received the same grade: Fail.
A society where people are not rewarded each according to his merit is a society where people are not trying their hardest to improve. If you prevent billionaires you also prevent your best performers, your middle class, your millionaires, your small businesses and such. The end result is a uniformly poor society where the most vulnerable hurt the most. Just like communism.
Anyway, you seem to be under the impression that capitalism is a system that rewards merit, and communism is a system that doesn't. That's just not true. Capitalism is a system that rewards ownership, not merit. You're essentially saying that everyone who is rich deserves what they have, and as I look around at the pantheon of the wealthiest individuals in the world, I'm not seeing a lot of merit. Where are all the Nobel prize winners? Where are all the billionaire scientists?
Rewards based on ownership are the opposite of rewards based on merit -- you are required to show zero merit under a capitalist society to reap rewards, just a piece of paper declaring your ownership in an asset, ownership which is enforced by the state through violence. How does this lead to a meritorious society? To me it seems it would lead to a society where people don't strive for merit but for ownership of assets.
Look, all I'm arguing for is proportionality. No one is ever going to convince me that the 1% have so much merit that they deserve more wealth than billions of people.
> The end result is a uniformly poor society where the most vulnerable hurt the most. Just like communism.
The end result of capitalism is a society where 1% of the population own 95% of the wealth. Not uniformly poor, I'll give you that. It's quite lopsided and tilted. But one thing's for sure, the most vulnerable are still hurt the most under our capitalist society. Like I said in another post, the USA is sending out child tax credits to reduce childhood poverty this week. Poor children are some of the most vulnerable people in our society, and they are hurting so bad the government has to step in. Capitalism is doing nothing for them. And anyway, It's not like there aren't plenty of uniformly poor capitalist countries around today. Just look at Haiti for an example how of how bad it can get.
That's right.
> The end result of capitalism is a society where 1% of the population own 95% of the wealth.
That hasn't happened yet in 250 years of free markets. But the communist countries all achieved that in short order.
> Capitalism is doing nothing for them.
And yet people with nothing march literally thousands of miles to try to get into the US. Why aren't they marching to communist countries?
How? What's the mechanism? The key component of capitalism is that ownership dictates who gets rewards. It doesn't matter how meritorious you are -- if you don't have ownership you get nothing. That's how the whole thing works.
> That hasn't happened yet in 250 years of free markets. But the communist countries all achieved that in short order.
The whole point of communism is that ownership is communal, so it doesn't make sense to compare ownership between the two and say one is better at ownership. But just look at the trendlines in our system and tell me how things are going to get better under capitalist dynamics. The rich are going to get richer and the poor are going to get poorer. The end stage of capitalism is inevitable unless anti-free market dynamics are introduced.
> And yet people with nothing march literally thousands of miles to try to get into the US. Why aren't they marching to communist countries?
And what happens when they get here? Are they suddenly wealthy and prosperous in our capitalist utopia? Or are they some of the poorest and most marginalized people in our country? America's #1 export is propaganda. That people fall for the propaganda is not an endorsement of capitalism.
Tell that to the recent graduate getting multi hundred of thousand offers (with stock!) from FAANG companies.
Tell that to the entrepreneur owning 100% of his brand new company after filling a few forms and paying a small fee. Because that new company is worth exactly 0.
Ownership by itself gets you nothing. Making that property worth something is everything. And that’s why self made billionaires deserve their rewards.
> That people fall for the propaganda
It is funny to pretend to care about a category of people but then refuse them the right to think for themselves. Classical leftist: "We need to save the poor! From themselves…"
Compensation for labor is not exclusive to a capitalist system. You can receive compensation for labor irrespective of the ownership structure of a corporation. But since you've brought stock into it, that would prove my point -- it doesn't matter how meritorious the individual employee is, their total reward is based on their ownership. It may be that the corporation decides to give the employee more stock if they demonstrate merit, but that just reinforces the point that ownership is the fundamental determiner of compensation.
> Tell that to the entrepreneur owning 100% of his brand new company after filling a few forms and paying a small fee. Because that new company is worth exactly 0.
Okay, but under a capitalist system if that company grows the owner gets 100% of the gains. If someone else (employees) help the owner grow the company, they don't share in that at all (beyond the compensation they received for their labor).
> Making that property worth something is everything. And that’s why self made billionaires deserve their rewards.
I've yet to see an example of a self-made billionaire, sorry. Behind every billionaire is a legion of employees doing the actual value creation. And that's why no one deserves a billion dollars.
> It is funny to pretend to care about a category of people but then refuse them the right to think for themselves. Classical leftist: "We need to save the poor! From themselves…"
You don't know anything about me. Kindly keep your personal jabs to yourself.
> a legion of employees
In a newly created company? With what money?!
The 1% own 80% of all stocks, so I disagree ownership is extremely easy to acquire. Acquiring ownership of valuable assets requires capital, and capitalists own most of that.
> In a newly created company? With what money?!
I said behind every billionaire, not a newly created company. i.e. there's no such thing as a self-made billionaire. I'd love to see an example, but so far no one has been able to show me one.
This is the crux of our differing point of view I think. You seem to think a billionaire built their business by themselves (self made) and therefore deserve to be billionaires due to their extraordinary merit. I believe that no one has so much merit, and the success of large businesses is more due to the value created by employees.
I can understand for entrepreneurs, that the first narrative is more appealing. But even if I were to agree with you that capitalism is a system that awards compensation proportional to merit of businesses (which I don't), it still doesn't follow that a founders are reaping rewards proportional to their merit; when a business grows in value, that value is allocated to shareholders according to their ownership stake, not their individual merit.
The obvious example is Steve Jobs. He turned around two floundering companies - Apple and Pixar - into immensely valuable companies, without changing the employees. You might argue that one was luck, but two? One right after the other? and the two were totally different businesses? You've got a lot of 'splaining to do about that.
See "The Making of Steve Jobs".
https://www.amazon.com/Becoming-Steve-Jobs-Evolution-Visiona...
In fact, read any history book that focuses on one person or business, and find one that became a billionaire by blundering about.
As for them not being self-made, why didn't their makers, if they were so smart and endowed with resources, become billionaires? Are they so generous?
I am not trying to. I am just pointing out the fact that if you want to eliminate the top of the pyramid (the 1%) you will lose the rest of it too.
It is the exact same free-market mechanisms that allows both to exist. And you are not proposing anything better instead.
That's not a fact you've proven (at least not here), it's just something you believe to be true.
The fact that you don’t want to accept this (“No one is ever going to convince me”) makes it just something you have decided not to believe.
You haven't shown that one leads to the other. You're trying to use the USSR as an existence proof for your claim but the conclusion doesn't follow the premise. You have to make the connection if you want to make that claim.
You've asserted that if there are no billionaires, it follows there will be no businesses. That's a very strong claim that demands very strong proof.
Cuba can also trade with other countries.
I do enjoy your assertion that Cuban communism can only succeed if they have free trade with free market countries.
No they don't. I buy things when I get more than my money is worth. So does everyone else. It's how trade works. Businesses are not extracting wealth from me or you.
Let's say a company makes food. It costs them $2 to make and they sell it for $5. You buy it and eat it. Are you now wealthier? No. Your wealth actually decreased $5. Why would you enter this transaction if it made you less wealthy? Well because the food has some utility for you. You buy things when you get more "utility" than your money is "valued". But at the end of the transaction, you are not worth more.
On the other hand, the company's wealth increased $3. We call this increase in wealth "profit". It's the whole point of a business, and they extracted it from you. An exchange of goods and money occurred. Your wealth decreased, while their wealth increased. Is that not extracting wealth from you?
Nope. What I did with what I purchased has no relevance to the transaction. For example, I could have resold the food in my restaurant for $10.
Wealth can certainly be destroyed. The people doing the destroying are "extracting", not the people who sold it to them.
> you are confusing value and wealth
Not at all. I think you'll find it impossible to define the difference.
It's not that hard...
Value is the dollar value you assign a thing. In large part this is subjective except when it comes to money, which only works because we all agree it has the same value.
Wealth is the sum total value of all your assets, minus all your debts. If all your wealth is not in dollars, this can be subjective too depending on who is assessing the value of the assets.
Let's say we both have $10 in cash. The total wealth in our economy is $20. I exhaust $2 to make the taco, you give me $5 for the taco. My wealth is now $13, we can all agree. Your wealth depends on the value. Since it is a taco, it has no intrinsic dollar value attached to it. The amount of value you assign the taco will depend on how hungry the buyer is. But if you eat that taco the taco is gone. Forever. Your wealth is now $5, and mine is $13. $2 is now missing from the economy, but like the second law of thermodynamics it all depends on how you define the bounds of the economy, as it's likely circulating elsewhere now and potentially creating assets rather than consumable goods. But you can see in this case I didn't actually create any wealth. I created value, and it was destroyed by you, but I ended up wealthier.
If you resold the food in your restaurant for $10 all that means is someone else valued the taco more than you. The analysis is the same though.
Even you use the words interchangeably.
> if you eat that taco the taco is gone.
Of course. Nobody said that wealth cannot be destroyed.
How so? Wealth is the aggregate, the individual assets have value. What's inconsistent here?
It does not work and increasing inequality is could be called "trickle up".
Unfortunately in our system, the wealthiest people have the most power, and they are incentivized to maintain a system that makes them wealthier. The wealthier they get, the more power they have over the system. We only have to look back as far as the 2017 TCJA to see how this dynamic plays out in real time.
The only perspective from which your statement makes sense is from the libertarian fantasy of government-as-parasite and individual-as-independent-producer.
You are saying that billionaires do more than consume; they save money. If we wish to be more specific, we could say that billionaires, by and large, invest money, billions of it, in enterprises which will make them more money.
Economies don't grow from some abstract demand existing, they grow from production (of final goods and services). Investment in productive assets is the key to the economy's growth.
Obviously some billionaires do more to be leeches than others, but that sort of enterprise seldom needs actual net investment. And obviously not all capital comes from billionaires, and not all billionaires deserve as much money as they have — but your premise here is quite backwards. A billionaire consuming all his wealth by building mansions, showy superyachts, private planes, and the like, is much worse for the economy than a typical billionaire investment, because the superyacht is not a productive asset, it is an extravagant waste.
Production is driven by growth in demand because capitalists, realizing the demand exists, expand their production on the premise that they might earn more profit. In turn, capitalists also stop producing things that are not in demand, as this is unprofitable.
Production of something not in demand is a nonsensical way to try to grow an economy.
Investment serves an economy by allowing production to happen to meet demand. It's not something we need to encourage particularly hard because it has a built-in profit motive. A billionaire spending all their money is an incentive for other people to invest in the production of those things being built, which is important because it creates income for the workers, which creates demand. Investing for the sake of investing in production otherwise is limited since if people aren't buying, less money is circulating, and less actual useful stuff (such as improvement in living standards) can happen as a result. But I suppose that pointless production (a lot of recent VC activity looks somewhat like this) is still better than a billionaire parking money in hedge funds or HFT shops that are just buying/selling stocks that represent past investment, instead of that money going to the productive enterprise itself.
Which is why billionaires invest. For a profit. We are on the same page.
GP post, on the other hand, was making the nonsense argument that our problem is billionaires reducing demand by investing money instead of spending billions on consumption.
And yet, oddly, both the Soviets tried it [0], and the Chinese are trying it [1].
[0] - https://www.jstor.org/stable/3131928
[1] - https://en.wikipedia.org/wiki/Under-occupied_developments_in...
They aren't. All the cash is invested, one way or another. Even "cash" in a checking account isn't cash, the bank loans it out.
Investments flow to the most productive use of the money. Your hypothesis is that the most productive use is not the most beneficial. That's a pretty tough case to demonstrate.
> is at best useless if not actually a net negative to society
If people prefer to buy stuff from Amazon, how is that not of benefit to those people?
As for real estate, there is only so much real estate in the cities. There is not enough for everyone. Who gets it? There has to be some distribution mechanism.
Investments flow to the highest-returning investment. Sometimes that's productive (new factories, infrastructure, research), but sometimes it's pure speculation (land, gold, crypto) or an active drain on health and productivity (patent trolls, telemarketing, tobacco).
Also investments propped up by regulatory capture (like zoning, which limits the supply of housing) and corporate buyouts (eliminating the competition) don't seem to be the most productive uses of money, unless you measure only short term gains for the super rich and the politicians they give money to.
I'm not sure if I understand what you are saying. Am I not supposed to point out that the politicians who are supposed to represent the people are too often influenced by those with more money?
Which is the most productive.
> speculation
is the process of finding the value of something, which is productive.
> patent trolls
are unintended consequences of poorly conceived laws, not free markets.
> Which is the most productive.
That's just a tautological statement. "It's more productive because it returns more money. Why does it return more money? Because it's more productive."
And you go on to contradict yourself about 2 sentences later when you say:
>> patent trolls
> are unintended consequences of poorly conceived laws, not free markets.
Which means not every investment that makes money is productive.
In a hypothetical free market where every actor has perfect agency, it might be true that money follows productivity. But just like "true socialism has never been tried" (scoff) there has never been a true "free market". In the market we actually operate in, wealth accumulation can be zero-sum.
> is the process of finding the value of something, which is productive.
Depends on the thing. IMO if the underlying thing (such as crypto or gold) isn't productive in and of itself, speculation on it is also zero sum.
Land may or may not be productive, depending on how it's being used. Poorly conceived laws also make it possible to achieve massive profits through real estate speculation without "producing" any wealth - which is zero-sum.
I reject the reductive view that someone only earns money when they increase productivity. Productivity increases will create new wealth. But wealth accumulation for individual actors is possible without providing any productivity increase whatsoever.
Every market participant is a neural network whose objective is to increase its own wealth. How this is done is rarely part of the equation.
Not at all. Please read more carefully.
> crypto
Can be productive. After all, people find many uses for it.
But I think I'll check out of this. Seems to me you're just being argumentative. I'll leave you with the last word.
Savings add an incredible value to our society, no matter who makes them. Remember, one of the pillars that created Silicon Valley and made it hard to copy was availability of funding.
Essentially, excess profits can only go into one a a few places:
- retained earnings (cash in the company's bank account)
- reinvest in the company (either capex or opex)
- paid out as dividends (giving cash to shareholders)
- buy back shares (again, giving cash to shareholders, but in a different form)
- pay off debt (giving cash back to bondholders)
- spend more on labor (hire more workers, or pay workers more)
Realistically, there is nothing in this list that can increase or decrease "usefulness" without another variable. Poorly run companies don't reinvest in the right things (or at the right times). Poorly run companies buy back shares when they are expensive, or pay out dividends when they should be building the balance sheet or reinvesting into the company. And paying workers more only makes sense if it increases output (maybe happy workers make better shopping websites).
To use one wealthy person as an example, Jeff Bezos' billions are somewhat illusory. They give him control of the firm (which, is probably better served in his hands than yours or mine). He can't spend those shares. He can sell them for cash, or give them away to charity, but he cannot spend them in current form. He has chosen to invest them in charities, and more obviously, Blue Origin. But really, he first reinvested potential earnings back into Amazon, at a time when almost everyone thought he was stupid. His investing took awhile, but it created the largest, most capable retail firm in history. So the results of his "investing" seem to have been pretty impressive. I'm not sure about you, but I din't have the kind of foresight to make the decision (otherwise I would have owned Amazon stock back then!) And personally, I like the idea of being able to buy a TV without having to hop into a car and be stuck in traffic for 20 minutes or more. SO the benefit to me is I saved at least 20 minutes when I bought a TV.
You don't have to like this - nobody needs to "like" this. But picking on wealthy people because they've made money is definitely not a productive use of anyone's output.
The reason is that reforming gives the chance for the society to repeating the same pattern at a much higher level.
I.e., thousands of years ago, the long tail suffers in their body parts and basic livelihood. They might one day suddenly die from anything from disease, violence, starvation, etc. Now, the long tail suffers in comfort. One might be obseity, mental disorder, stress, etc.
And system in stagnation often degenerate, not just keeps in tact. The degeneration leads to breakdown of social structure and cultural norms, which eventually leads to chaotic conflicts.
With these, reform is the only choice.
Also, to claim that 'the rich keep getting richer' has always been true is misleading, it's far worse today than ever before because our monetary system has never been so decoupled from the underlying economic processes of value creation. This means our system is more unfair than it has ever been before. There is almost no correlation between skill and success; on the other hand there is a significant correlation between cheating and success.
There's more easily refuted points too. The figured titled "How it will really go" is an apologia for the current system. In the last twenty years we have seen real material losses for the majority of people. Access to healthcare, education, and housing has shrunk. To put it simply, we have first hand evidence that there is not a rising tide lifting all boats.
What he does get right, he doesn't correctly consider the consequences of. Privacy will continue to be eroded in order to optimize network-effect oriented businesses. People will be forced into this because the current economic incentives will not change. There simply isn't an environment for anything else. What he fails to consider all of the rewards for this aren't incentivized in the system and therefore are easily cast aside once privacy has been eliminated. They may exist as carrots now, but without systemic incentives for them to exist, they won't last. His new social contract is based on a bait and switch.
As a whole it comes off as completely out of touch with the material conditions of everyday people. On the other hand, it's his job not to understand.
It is more about that it “already is” and “will be even more so.”
https://www.youtube.com/watch?v=9RbL8lTsITY
Imo we need to change the social contract back to what it originally was. The fed has too much power and its been used (perhaps inadvertently) to centralize power further. There’s a reason the bank of the US was abolished back in the 1800s.
Also, I think most people forget just how diverse the U.S. is. A great example: I don’t think guns are necessarily good in the city. But in the country I need a gun because I have mountain lions and bears in the area (and county sheriffs would take an hour or more to respond). So federal gun laws don’t make a ton of sense. States don’t have the same interests (see Florida vs Washington state) nor ethos.
The way the US stayed together was each state was sovereign. Some authority was seeded to the federal government for the betterment of all. That being said, both political parties are attempting to consolidate power, and neither likes what the other wants.
Imo the premise is correct we need a new social contract, but imo we need to reinstate the one we already had.
Federal power leaves no room for disagreement. At a state level, people have the freedom to move to another state.
The only real impediment to moving between states as a US citizen is financial and social, but this is the case literally everywhere, even intrastate.
If you disagree with the way that your state operates so strongly that you can't stand it anymore...moving becomes a pretty easy decision.
The Fed has too little power. It doesn't even have enough power to address all the macroeconomic problems that the congress is ignoring. Just think about it. We have to rely on the clowns in the government to make purely logic and rationally driven decisions relating to our economy when they are voted in for the exact opposite reasons. People vote based on emotion and ideology and that is how politicians have to think to win elections.
When you have a government that isn't even doing the bare minimum then yes you'll have to rely on a different institution even though it's not the job of that institution to solve the problem.
Honestly. I am tired of this. I am tired of people refusing to face reality, living in their little bubble and then blaming some guy named fed trying to extinguish a house fire with a bucket.
You have to raise the equilibrium interest rate. Either by raising inflation, lowering interest rates below the equilibrium rate, increasing borrowing or simply taxing money in bank accounts. I'd rather have a big inflation year that makes macroeconomics work again than endless stupid ideology.
The old social contracts worked in an older world, which didn’t have mechanization and labor was the source of industry.
Today, network effects mean gmail is free but the user is the product, and other configurations which would seem extremely odd in the 1800s.
The FED isn’t even the problem for what you are trying to resolve. I cannot understand why people tend to focus on it.
Because they don't know what they're talking about.
I'm a capitalist with many socialist friends. I disagree with them often, but I never think that they don't know that they're talking about.
People who are hung up on The Fed aren't even wrong. They just don't know what they're talking about.
Many would take issue with this conclusion. It's the fact that the Fed exists as a lender of last resort that created the moral hazard in the first place, thus enabling "Too big to fail" and all of that.
Unless your goals are a reduction in US GDP, and dramatic decrease in financial ability in the USA, you need a central bank. In analogy terms, they’re the next evolutionary node in the banking tree. The higher complexity let’s you exert stability against things like currency manipulation, macroeconomic instability and the like.
The crash is because oversight disappeared and people bought into myths.
Crucially one of the myths that Wall Street believed was that someone else was always checking the work to find advantage.
Most of Wall Street aimed for safe advantage and were following along as a herd.
His premise requires this network cohesion and continuity stays the same or increases, where I think we're at the threshold of social re-balkanization, where the weak links in networks (social media, class, etc) simply collapse on their own weight into traditional strong sub-networks based on family, region, ideology, religion, ethnicity, etc. Whether you see that as reactionary against inevitable progress of history, or hope for survival, it's the counter-bet to what he's predicting. I disagree that a new equillibrium he predicts will be a cohesive cultural homogenization mediated by network technologies. Like some globalized China or Singapore.
I think the social polarization we're seeing now is an example of weak-link network collapse in very fast motion, and an example is social-credit/vaccine passports, where you are going to see the resurgence of subcultures to the point of internecine civil conflict over them and measures like them. I would make a bigger bet on all-against-all conflict than what he in-effect describes as an efficient, China style, dominating, technologically empowered planned elite.
As someone who has spent a lifetime travelling in various subcultures, there will always been an underground, they will always be the future, they always prevail because that is where all non-linear growth comes from. The political middle and the comfortable have desire and symbolic comforts, but they do not have necessity and that's what makes me willing to always bet big against beliefs in a managed future.
The whole thing is predicated on ideas like, "Don't worry, everything will be provided for you, except dignity, but soon everyone will have forgotten what that was anyway. It was the only thing standing in the way." When I hear sentiments that map to that, the only meaningful question to me is how to get short.
How have they gotten away with recklessly risking the physical and biological foundations of life itself? How in heaven’s name has the vast majority served as cheerleaders for their own impoverishment? The answer to such questions is that the American edifice of exploitation, parasitism, enslavement, perpetual warfare, and ecocide rests on massive, mutually-supporting pillars.
My encyclopedia and many articles I wrote about this subject establish the existence of just one pillar: Smears, incarcerations, and assassinations. Assassinations by themselves might work in a pure dictatorship. But in a system that has democratic pretensions, murders must be supplemented by other pillars. Here then is a glimpse of these pillars:
1. Cloak and Dagger: This pillar is obviously the focus of our interview. To secure more power and riches for its members, the Invisible Government often resorts to smears, incarcerations, and murders. It not only silences or murders its influential opponents, but it also targets innocent bystanders who might pose a threat to its power and goals. Also, when this serves its interests, the Invisible Government is perfectly willing to destroy junior members of its own cabal.
2. Reign of the Psychopaths: Apart from marginal, small-scale, instances of real democracies, all current political and economic systems on earth are conducive to the rise to power of conscience-less, irresponsible, self-seeking psychopaths. “We must admit to ourselves,” says Mike Krieger, “that there are truly evil geniuses out there, and in most cases these characters have taken control of the power structure.”
3. Total control of the banking system and of the issuing and coining of money. The critical importance of this aspect is captured in this article and in John Acton’s aphorism: “The issue which has swept down the centuries, and which will have to be fought sooner or later, is the people versus the banks.”
3. Sunshine Bribery: Eric Margolis’ witticism captures the sleaze of global politics: “It’s often cheaper to buy a legislator than a second-hand car.”
4. Information: From the movie, music, book, and school “industries,” to radio, TV, and newspapers, to online and offline encyclopedias, to bought experts and fake dissidents, to online search engines and social media—the Invisible Government controls most of our sources of information. As a result, all of us are, in varying degrees, denizens of Huxley’s Brave New World.
5. Human Nature. The Invisible Government capitalizes on a vast array of human failings to sustain and augment its riches and power. Here are just two examples of such failings. To begin with, we are all manifestly susceptible to indoctrination. This weakness is in turn exacerbated by the tendency to cling to “our” convictions in the face of overwhelming evidence against them.
Carl Sagan once said:
6. Controlled, Manipulated, Trivialized, and Rigged Elections. “If voting made any difference,” Mark Twain observed, “they wouldn’t let us do it.”7. Broken Electoral Promises. In the absence of real democracy, there is a vast gap between what politicians and parties pledge before elections and what they deliver after elections. Woodrow Wilson, Franklin Roosevelt, and Donald Trump, for in...
http://drnissani.net/mnissani/revolutionarystoolkit/Revoluti...
However, any system that rewards only 10% of its participants, is essentially Hollywood. It’s not sustainable, and people will simply check out. The only way to prevent that is to either change the odds, or to sell propaganda.
I like the gambler/house analogy. It’s also has intuitive suggestions on how they can be handled.
What is to stop governments from just taking over that spot? It’s perfect for what governments are meant to do, or think they are meant to do.
“You will have access to training” is a few rungs below the “lift yourself up by your bootstraps”. Especially after acknowledging that only 10% of the population actually perform fast enough for the system to reward you.
Hollywood seems to reward a lot more than 10% of its participants. There are many thousands of people living middle-class lives as part of the movie business in Los Angeles and elsewhere. Much of their ability to do so is driven by the unions active in the entertainment industry and the protections they demand for non-superstar workers.
I am not talking about the larger business ecosystems, as those would exist for any industry.
To take an extreme example, if someone says I'll burn down your house if you don't pay me, is value created?
Ok and if an advertising based economy/culture creates a phony demand for something, and then people purchase that something, is value created?
It just makes no sense to treat all nodes in a complex network equally since they are unequal by virtue of network structure itself. And it certainly makes no sense to create large C&C hierarchies when well-positioned nodes and clusters carry far more value and information.
And reality does not tolerate inefficient structures in the name of ideology for long in the modern world especially since all ideology is variable and none fundamental.
It will of course be covered up by various PR for a long time. But the writing is on the wall.
I've seen this movie before and the deal always gets altered further
Anyone with internet can use the software of the top 5% of programmers. Anyone with youtube can view the top 5% of Skateboarders (or whatever content) Etc.
This concentrates all the wealth onto them.
If we want to combat this concentrating force we need to also work on dispersion forces. We can ensure that those near the mean participate in the wins. For many this looks like equity.
across society we need to be bringing this equity to the public markets sooner. If I were the SEC I'd be working on rules that say companies cannot block sale/liquidity of shares (it is one's property after all). This would help create liquidity for the lower&middle folks who get equity in small businesses and allow large institutions to bring this opportunity to all (via index ETFs). Then instead of holding shares in some small startup you could, for example, sell some and hold an entire pool of startups (VC style) and spread your time investment in a single company across many, without job hopping.
Nobody stops Silicon Valley from saving the world, it's just that it is harder than creating Wi-Fi connected juicers and apps, even if that app is Facebook.
I understand the hubris, everyone uses these apps, but getting people hooked on something we are predisposed to want like sugar, social media or loot boxes only qualifies you as a predator.
(this is independent of whether you approve of sending them to the border, of what your opinion is on border/immigration issues).