>Since the turn of the millennium, most American families have been invested in the stock market. Whether they came to be investors passively (by taking a job with a 401k) or actively (by buying Gamestop shares on Robinhood), the consequences for individuals can be profound. People who embrace their identity as an investor think differently, vote differently, and have different material interests from those who do not. “Investor” can even reframe an entire worldview: education becomes an investment in human capital, and is evaluated based on increases in future earnings potential; family and friends turn into investments in social capital, essentially call options on benefits to be harvested in the future. The capital metaphor becomes pervasive, like microplastics in our water and blood.
Investment in time, resources, the integrity of ones lower back when some one needs help moving...
I think people are uncomfortable with the consideration that things are transactional. We'd rather pretend they aren't, even though we all know that they are.
My guess is that many people don't consciously acknowledge relationships are transactional. And the word carries different connotations for different folks. My SO would probably be horrified if I said our marriage was 'transactional', and she has a language arts degree.
> My guess is that many people don't consciously acknowledge relationships are transactional.
If two people do not treat their relationship as transactional, then it is not transactional. I don't know how to make this any simpler: at least one counterparty has to, at least, agree to the notion of "transaction" entering into the interaction in the first place, for a transaction to be taking place (and, I think, it could be argued that both counterparties must approach it this way). If they don't, then there is no transaction.
You seem to regard the idea of transactions as something fundamental to all human behavior, like a law of physics. This is not the case.
Perhaps what you propose is possible, especially if the definition of transactional is strictly monetary. Yet everyone gives and receives in relationships; even if what is exchanged is only emotional, time, or otherwise intangible.
We all do some calculating, often subconsciously, about whether to continue to interact with someone else. And we have various thresholds or red lines which could lead to ending or at least significantly reducing future contact.
Sure, but the definition of "transactional" must be expanded to such a degree for the statement "human relationships are transactional" to be true, that the word ceases to have any real linguistic function. You might as well say "human relationships are defined by how people relate to one another."
And indeed, this is usually how such discussions about this topic proceed, with someone opening with the narrow definition of "transaction" - not necessarily monetary, of course, but at least two well-defined sets of things that two people intend to trade (and where a withholding from one party would result in a cancellation of the deal) - and then as you point out more and more human behaviors that don't work like this, they retreat to the point where, for example, a parent taking their child out for ice cream is a "transaction" because the child wanted ice cream and the parent wanted to do something nice for their child.
If that's your working definition of "transaction" then fine for you, but you can't then make some argument that it's neoliberal economics that best reflect human nature and fulfill human needs because of its insistence that all economic activity be mediated by a free market (i.e. a forum supposedly for the free and open proposal and settlement of transactions). The "transaction" of one, is not the "transaction" of the other: neoliberalism and indeed capitalism itself would not work even by their own internal logic if they assumed the same notion of "transaction" as that required of the statement "all human relationships are transactional."
Fair point, and in hindsight my comment failed to frame things as precisely as I'd hoped. I'll agree that transactional can become overly broad, to the point of losing its meaning. Though I do think the lense of economics can offer a unique way of evaluating about relationships. And not in a strictly financial sense. Which isn't to say it's the only way, or even the most important.
Would you consider a parental relationship to be transactional? There is a huge potential for the relationship to be negative - a child with special needs / medical bills, a child with views so different from yours it causes a huge rift, etc.
What positive return is guaranteed that makes these relationships beneficial? There are plenty of living beings who yeet their young out to live on their own from the start. Or is every parent either throwing away their time/money/effort on a losing transaction?
Is it a gamble for those who are poor, that their children will take care of them? What does that mean for rich people and their children? For extremely wealthy people, who can buy everything they ever need/want, is it solely a gamble that your child will want to spend time with you?
I don't believe it, I also don't treat/consider relationships as transactional. My argument is that if these relationships are transactional, there should be an obvious benefit otherwise most people would consider the potential gain to be too risky and not have these relationships.
People are likely subconsciously or otherwise doing the math. I had to take some calculated risks having kids because of some family history. And when folks get genetic testing, or abstain altogether, they too are weighing possible outcomes.
'Transactional' doesn't have to mean a perfectly balanced exchange or in kind. For some just a bit of acknowledgement is worth millions of dollars and/or years of sacrifice. For others they're never satisfied and forever feel cheated or unhappy with how they see things "balancing out" or failing to.
No, we don't all know that they are, because they aren't that.
Transactions are the signals for building trust, but they aren't the only components in the relationship. Shared history, shared vocabulary, commitments built on that that trust... These are not just transactions.
It's like saying that "we hate to admit it, but all the company really is is the emails and Slack messages the employees send to each other."
Like an investment in familiarity, emotional intimacy, and support? Whether you are spending or investing your time, it is a limited resource that you have allocated. Do you want to allocate it with those who you will never see or share more time or would you like a relationship to form and grow?
Sure, but why the impulse to frame it in economic terms? IMO it's far from the most interesting or insightful framing on the value of human relationships.
I do not mean to imply the economic frame is the only. Choosing the "correct" frame seems a modern folly. Instead, that frame is but one of many valid frames, yet valid it is. By using different frames we access different adjacencies in the concept space and by so doing can gain further insights through alternation.
People are friends because of the value they create, vis a vis any relationship requires investment, and its quality is determined based on the return on that investement. I would question the calling of any relationship that creates negative value a friendship.
Your statement is a specific framing of a friendship from an economical perspective. You may or may not find that perspective useful, but it's inevitably a simplification that focuses on some aspects of a friendship and leaves out others.
The (grand)parent comment is arguing that the things left out are the ones they find important. A friendship can be analyzed through value, but that's not necessarily a good way to build and sustain friendships.
Literal social networks (not the internet thing, just systems of people who interact with each other) are quintessential reputation economies. They can be analyzed, but there's a lot of fundamental differences with monetary economies. Reputation, unlike money, cannot be freely moved around the network: Alice thinking highly of me has no effect on my standing with Bob, unless there's some other link between Alice and Bob. Reputation also isn't nearly as conserved as currency: Asking for and receiving a favor (extracting value) from Bob can often strengthen the relationship, rather than deplete it, depending on the size of the ask and our existing rapport. And that's just some relatively surface level stuff.
You can model relationships in economic terms, but it's a very different type of economy. Given how bad we are at modeling money economies, relationship dynamics are probably a lost cause.
I'm curious how this view works out when trouble comes up. If you have a friend going through a rough time for a few months or years, do you just say I'm not going to get caught up in the sunk cost fallacy and cut ties? Even when I've had friends with difficult times and we spend less time together. I still feel for them and my heart hurts, even if I can't be around them as much to protect myself if they're spiralling.
Similarly what would you do if a friend was dying? Sorry I just don't see the ROI here, don't think I can get much out of your last few months?
But it's what is happening in societies, that are not even capitalistic. Some people are making "friends" only to gain some material (or equivalent) benefits, parents can view their children as an investment too, even the coupling of nobles in dynasties where politically motivated in the past.
There is no reliable evidence that this is actually happening on a widespread basis, or that it is being driven by shareholder capitalism. In general it's a good thing for people to own shares in multiple companies as this gives an incentive to act in ways such as voting that are good for the overall health of the economy.
You can subscribe to my beginner friendship tier, practically undistinguishable from a real friendship, for $100 a week! Act now, my friendship supply is very limited!
Basically the logical conclusion of neoliberal thought: nothing is worth doing unless profitable, anything not profitable is by definition not worth doing, pretty much replacing what earlier iterations of human civilization called "god" with "the market" as the arbiter of right and wrong and the main organizing force in society.
That’s their point - what can’t be easily quantified and extracted in the short term is ignored - environment, relationships etc can’t be directly deposited in one’s bank account and thus are ignored in the world view that’s being criticized here.
What if the thing in question is something that a majority of humans would agree is worth doing, but there is no way to extract profit? Which is to say, that the loop of capital goods -> apply labor -> extract value from labor -> accumulate more capital goods, does not map well to solving the problem / doing the work, etc?
You will end up in the Tragedy of the Commons situation. Everyone wants good schools; no one wants to pay for it. Everyone wants good roads; no one wants to fund it. Everyone wants to stop climate change; no one wants to change.
More or less, but the solution to the tragedy of the commons is quite simple: collective action which ensures that the burden of providing for the desired resource / behavior / service, is apportioned fairly. Then, in exchange for the collective demands, each individual's needs are met.
The reason we can't do that anymore is that it requires something like an equitable distribution of political power. Our current system is so top-heavy in terms of who determines policy and political direction, that even simple problems with easily-mitigated failure modes are beyond us.
The article is interesting insofar as it explores the possibility that increased retail access to equity investments biases a population towards deregulation. But to be honest paragraphs like this one just seem like a distraction and a base appeal to emotion. Investors aren't just biased by their investments; they are bad people, incapable of loving or being loved. I don't think capitalist societies have a monopoly on people who reduce their relationships with others to a series of transactions.
It's unclear what specific policy changes are being advocated by the author. Even if we decide we want to go back to the 1980s (do we? was life that good back then?) how specifically do we do it? Is it just by banning the marketing of securities to retail investors?
I mean this in a neutral way - this is basically just Marx's critique or capitalism. The part about small time investors identifying with their own perception of being a real investor is the petit bourgeois dynamic that Marx spoke of, in the era of Robinhood and 401ks. I'm confident the author knows this (and perhaps even takes it from there), and decided to leave it out, probably for a good reason.
Can you please (1) not post flamebait; and (2) not use HN primarily for ideological battle? We have to ban accounts that keep doing these things. I don't have a problem with your point of view but we need you to use HN in the intended spirit if you want to keep posting here.
There is this thing called "reasonable dosage". A huge hunk of the current problem is the large-corporation- and Wall Street-based financialization of far too much of normal human life.
It feels a little inevitable though, given the other rules of the system: Companies don't become more valuable by having a steady earnings forecast, they become more valuable by having an _increase_ in earnings that is forecast to continue increasing. How can everything always increase? Well when you reach market saturation on one product, start a new product in a different market. What if all the markets seem saturated? Find a new thing to commoditize, a new market to create... Any system where unlimited growth is rewarded is going to try to take over everything it possibly can.
In many ways, the growth obsession is a product of the Reagan-era deregulation craze, and the "Greed is the One True God" ethic that kinda took over Wall Street then. (Try reading some stories about GE before Jack Welch became CEO, and after.) Other big contributors:
- The huge sums of wealth which tens of millions of ordinary people feel they need to accumulate, to pay for their (grand)?children's college education, unexpected medical bills, many decades of retirement and elder care, etc. Compare that to (say) the 1950's.
- The huge structural and social barriers to creating small businesses in most economic sectors, compared to (say) 60 years ago. Back then, how many of the businesses in an average town were (at most) small-ish, family-owned companies?
- How d*mn much "money" is sloshing around the financial system these days, with the "at any sign of crisis, pour in more $trillions" monetary policies of the Fed.
> the growth obsession is a product of the Reagan-era
I hear you, but uncle Karl names and shames the growth-obsession in Das Kapital which predated Reagan by over 100 years. It's a part of the system that many people have incentive to deny, hide, or minimize, but endless growth seems to be a requirement of "the system of organizing our resources that prioritizes turning capital into more capital" aka capital-ism.
Capitalism, shareholder or otherwise, is a mechanism to optimize production, not a grand model for entire society. This statement does not imply socialism or other forms of heavy central government intervention. Rather, at the start of industrial revolution, and in poorest parts of the world today, having a full stomach and some clothes on your back is the most important thing. But as society becomes more prosperous, priorities other than optimizing production can be addressed, and public companies dedicated to only optimizing shareholder value are not the best tool to address these. Can be for profit and non profit organizations with charter than explicitly ranks different priorities. Can be services by local government, where everyone can easy move if they don't like tax/benefit balance. And so on.
I often wonder what certain industries could be if intensely focussed on "improvement" over profit taking. But then again the most "important" problems/industries are so capital intense without the profit motive I'm not sure who would sign up to fund such an endeavour.
> Capitalism, shareholder or otherwise, is a mechanism to optimize production
This has nothing whatsoever to do with capitalism.
Capitalism is an economic system in which those who invest capital rather than labor or ideas are considered to be entitled to the bulk of the profit from the endeavor. This is defended by the claim that the capital-ists are also exposed to more of the risk, and hence deserve more of the reward. There are strong counter-arguments to this position.
You are arguing against a strawman. Capitalism has little to do with entitlement. Capitalism is actually the only practical system which we have found for efficiently allocating resources at scale over extended periods of time in a way that improves living standards.
The counter arguments to this position are entirely theoretical and have never been proven to work in the real world. Perhaps there is some non-capitalist economic system out there waiting to be invented which could deliver superior results without eventually devolving into an authoritarian dystopia, but I doubt it.
Allocation of resources in capitalism is not a system beyond saying "let the capitalists decide". And how do we let them decide? Because we preferentially allow them to collect profits (over labor and ideas), creating an incentive (though not necessarily a requirement) on their part to maximise profit. So, capitalists will want to see the ventures they invest in generate profit, and the most obvious way to do this is to have the venture make things or provide services that others want to pay for.
However, just as there's no ironclad rule that an enterprise in a capitalist system must seek to maximise profits, there's also no ironclad rule that the best or only way to see profits is to do things that other people want to pay for.
Increasingly, the financialization of the US (and other) economies means that substantial profits can be obtained by extracting value from transactions, rather than creating value to society.
Mariana Mazzucato has discussed this at length in her excellent book "The Value of Everything: Making & Taking in the Global Economy Economics"
The point is that capitalism only works well for allocating resources when it happens to follow the goal of producing value for others, and in that sense any economic system that somehow prioritized this would have the same benefits as capitalism. Note that it also needs to take externalities into account, otherwise the short term benefits of value production-driven economic activity become a long term net negative. Capitalism has not proven itself in this regard so far.
The thing that is different about capitalism is that beyond (generally) favoring value production, it also favors the owners of capital as the beneficiaries of generated profit. This in turn makes the owners of capital have deeply vested interests in ensuring that this asymmetrical distribution of profit does not change (they will almost certainly lose if it does). That is what defines capitalism, not free markets, not value creation, not entrepeneurial activity.
Mazzucato is much more qualified and eloquent than I, and she does that quite well.
If you held a gun to my head, I'd severely limit the ability to extract value via financial transaction fees (either by directly limiting them or taxing the shit out of them), and I'd require corporate boards to have worker representation, and I'd require some level (25-100%, not sure) of worker ownership of for-profit corporations.
The goal of all these is to nudge for-profit corporations towards (a) actual value creation, instead of extracting value (b) increasing the distribution of profits to the labor class.
Having friends improves my living standards. It's also not a capitalist or socialist concept, it's its own thing. Having parks also improves my living standards, but there are few private parks for whatever reasons. There are many government run parks, but our local parks are actually established through land trusts and maintained by neighbor volunteers. I am sure that over time society will have many different type of needs and each may have different practical systems to address them, or the best system may not yet be discovered, or efficiency may not always be important. If the point is that big central government is not a good solution, you are preaching to the preaching to the choir - I grew up in USSR and don't want a rerun. But remember that current stock markets and corporations are also products of big government that privileges certain arrangements over many others possible.
I disagree with the idea that capitalism is a mechanism to optimize production.
In early days, capitalism did contribute to increased production- for example, the role it played in removing the crown's ability to grant monopolies in different fields to favorable subjects, and allowing private ownership at all.
Early monopolies and their place-men held back economic development, and allowing anyone who sees a new need to start a business definitely increased production, but Capitalism is governance by the owners of capital.
At this point, that is again holding back production, as capital owners (like the place men before them) incentives' are to increase their personal wealth even at the expense of production. We see capitalism inhibiting production most clearly in the way private equity consumes and destroys productive enterprises by loading them with debt, using the money to issue enormous dividends payable to the special class of shares held by the firm, and then selling the scraps of the company that remain after bankruptcy. This is also visible in the way that banks no longer offer loans to new businesses unless they have collateral to borrow against, and the flaws in how venture/angel investment works.
When optimizing for production, governments turn to policies that are considered socialist in order to remove these obstacles.
One category of this is stuff like social housing and free education/healthcare which reduce the cost of living for workers, increasing the size of a country's workforce and allowing cheap production of goods & services. Unemployment benefits and support for non-workers (like children and the disabled) also fall into this category, as that allows workers to change employers with less friction.
Other ways are limiting what owners of capital are allowed to do with their property- a prohibition on the Private Equity model of destroying companies would fall into this category, or subsidizing immature industry.
There is a balance between capitalist policies and state-controlled policies, where either side can inhibit production once it has power without responsibility to the citizens it operates on.
> Since the turn of the millennium, most American families have been invested in
the stock market.
The actual percentage appears to be 61%.
Now, that's definitely a majority and so the line is defensible. However, I would say that "most" has connotations that are in conflict with "more than 1/3rd of all Americans are not invested in the stock market".
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[ 2.8 ms ] story [ 126 ms ] threadI think people are uncomfortable with the consideration that things are transactional. We'd rather pretend they aren't, even though we all know that they are.
If two people do not treat their relationship as transactional, then it is not transactional. I don't know how to make this any simpler: at least one counterparty has to, at least, agree to the notion of "transaction" entering into the interaction in the first place, for a transaction to be taking place (and, I think, it could be argued that both counterparties must approach it this way). If they don't, then there is no transaction.
You seem to regard the idea of transactions as something fundamental to all human behavior, like a law of physics. This is not the case.
We all do some calculating, often subconsciously, about whether to continue to interact with someone else. And we have various thresholds or red lines which could lead to ending or at least significantly reducing future contact.
And indeed, this is usually how such discussions about this topic proceed, with someone opening with the narrow definition of "transaction" - not necessarily monetary, of course, but at least two well-defined sets of things that two people intend to trade (and where a withholding from one party would result in a cancellation of the deal) - and then as you point out more and more human behaviors that don't work like this, they retreat to the point where, for example, a parent taking their child out for ice cream is a "transaction" because the child wanted ice cream and the parent wanted to do something nice for their child.
If that's your working definition of "transaction" then fine for you, but you can't then make some argument that it's neoliberal economics that best reflect human nature and fulfill human needs because of its insistence that all economic activity be mediated by a free market (i.e. a forum supposedly for the free and open proposal and settlement of transactions). The "transaction" of one, is not the "transaction" of the other: neoliberalism and indeed capitalism itself would not work even by their own internal logic if they assumed the same notion of "transaction" as that required of the statement "all human relationships are transactional."
What positive return is guaranteed that makes these relationships beneficial? There are plenty of living beings who yeet their young out to live on their own from the start. Or is every parent either throwing away their time/money/effort on a losing transaction?
Is it a gamble for those who are poor, that their children will take care of them? What does that mean for rich people and their children? For extremely wealthy people, who can buy everything they ever need/want, is it solely a gamble that your child will want to spend time with you?
Why do you believe that guarantees are required? Or even that the return must be positive?
'Transactional' doesn't have to mean a perfectly balanced exchange or in kind. For some just a bit of acknowledgement is worth millions of dollars and/or years of sacrifice. For others they're never satisfied and forever feel cheated or unhappy with how they see things "balancing out" or failing to.
Transactions are the signals for building trust, but they aren't the only components in the relationship. Shared history, shared vocabulary, commitments built on that that trust... These are not just transactions.
It's like saying that "we hate to admit it, but all the company really is is the emails and Slack messages the employees send to each other."
It's not that simple.
And don't reply with a link to that japanese guy who sells his time to hang out.
that's just, like, your opinion, man
The (grand)parent comment is arguing that the things left out are the ones they find important. A friendship can be analyzed through value, but that's not necessarily a good way to build and sustain friendships.
You can model relationships in economic terms, but it's a very different type of economy. Given how bad we are at modeling money economies, relationship dynamics are probably a lost cause.
Similarly what would you do if a friend was dying? Sorry I just don't see the ROI here, don't think I can get much out of your last few months?
The reason we can't do that anymore is that it requires something like an equitable distribution of political power. Our current system is so top-heavy in terms of who determines policy and political direction, that even simple problems with easily-mitigated failure modes are beyond us.
It's unclear what specific policy changes are being advocated by the author. Even if we decide we want to go back to the 1980s (do we? was life that good back then?) how specifically do we do it? Is it just by banning the marketing of securities to retail investors?
Incidentally retail participation in public equity markets has traditionally been much lower in Europe and this is something that lawmakers are actively trying to remedy there: https://finance.ec.europa.eu/capital-markets-union-and-finan...
https://news.ycombinator.com/newsguidelines.html
- The huge sums of wealth which tens of millions of ordinary people feel they need to accumulate, to pay for their (grand)?children's college education, unexpected medical bills, many decades of retirement and elder care, etc. Compare that to (say) the 1950's.
- The huge structural and social barriers to creating small businesses in most economic sectors, compared to (say) 60 years ago. Back then, how many of the businesses in an average town were (at most) small-ish, family-owned companies?
- How d*mn much "money" is sloshing around the financial system these days, with the "at any sign of crisis, pour in more $trillions" monetary policies of the Fed.
I hear you, but uncle Karl names and shames the growth-obsession in Das Kapital which predated Reagan by over 100 years. It's a part of the system that many people have incentive to deny, hide, or minimize, but endless growth seems to be a requirement of "the system of organizing our resources that prioritizes turning capital into more capital" aka capital-ism.
This has nothing whatsoever to do with capitalism.
Capitalism is an economic system in which those who invest capital rather than labor or ideas are considered to be entitled to the bulk of the profit from the endeavor. This is defended by the claim that the capital-ists are also exposed to more of the risk, and hence deserve more of the reward. There are strong counter-arguments to this position.
The counter arguments to this position are entirely theoretical and have never been proven to work in the real world. Perhaps there is some non-capitalist economic system out there waiting to be invented which could deliver superior results without eventually devolving into an authoritarian dystopia, but I doubt it.
However, just as there's no ironclad rule that an enterprise in a capitalist system must seek to maximise profits, there's also no ironclad rule that the best or only way to see profits is to do things that other people want to pay for.
Increasingly, the financialization of the US (and other) economies means that substantial profits can be obtained by extracting value from transactions, rather than creating value to society.
Mariana Mazzucato has discussed this at length in her excellent book "The Value of Everything: Making & Taking in the Global Economy Economics"
The point is that capitalism only works well for allocating resources when it happens to follow the goal of producing value for others, and in that sense any economic system that somehow prioritized this would have the same benefits as capitalism. Note that it also needs to take externalities into account, otherwise the short term benefits of value production-driven economic activity become a long term net negative. Capitalism has not proven itself in this regard so far.
The thing that is different about capitalism is that beyond (generally) favoring value production, it also favors the owners of capital as the beneficiaries of generated profit. This in turn makes the owners of capital have deeply vested interests in ensuring that this asymmetrical distribution of profit does not change (they will almost certainly lose if it does). That is what defines capitalism, not free markets, not value creation, not entrepeneurial activity.
If you held a gun to my head, I'd severely limit the ability to extract value via financial transaction fees (either by directly limiting them or taxing the shit out of them), and I'd require corporate boards to have worker representation, and I'd require some level (25-100%, not sure) of worker ownership of for-profit corporations.
The goal of all these is to nudge for-profit corporations towards (a) actual value creation, instead of extracting value (b) increasing the distribution of profits to the labor class.
Plenty of capitalisms do, have done, and are currently doing, exactly this. I should know: I live in one.
In early days, capitalism did contribute to increased production- for example, the role it played in removing the crown's ability to grant monopolies in different fields to favorable subjects, and allowing private ownership at all.
Early monopolies and their place-men held back economic development, and allowing anyone who sees a new need to start a business definitely increased production, but Capitalism is governance by the owners of capital.
At this point, that is again holding back production, as capital owners (like the place men before them) incentives' are to increase their personal wealth even at the expense of production. We see capitalism inhibiting production most clearly in the way private equity consumes and destroys productive enterprises by loading them with debt, using the money to issue enormous dividends payable to the special class of shares held by the firm, and then selling the scraps of the company that remain after bankruptcy. This is also visible in the way that banks no longer offer loans to new businesses unless they have collateral to borrow against, and the flaws in how venture/angel investment works.
When optimizing for production, governments turn to policies that are considered socialist in order to remove these obstacles.
One category of this is stuff like social housing and free education/healthcare which reduce the cost of living for workers, increasing the size of a country's workforce and allowing cheap production of goods & services. Unemployment benefits and support for non-workers (like children and the disabled) also fall into this category, as that allows workers to change employers with less friction. Other ways are limiting what owners of capital are allowed to do with their property- a prohibition on the Private Equity model of destroying companies would fall into this category, or subsidizing immature industry.
There is a balance between capitalist policies and state-controlled policies, where either side can inhibit production once it has power without responsibility to the citizens it operates on.
> Since the turn of the millennium, most American families have been invested in the stock market.
The actual percentage appears to be 61%.
Now, that's definitely a majority and so the line is defensible. However, I would say that "most" has connotations that are in conflict with "more than 1/3rd of all Americans are not invested in the stock market".