> Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?
It's a pretty well written piece. I think people from all perspectives should take careful note of what he is actually advocating: discussing and figuring out the mechanisms of what a modern society should like rather than blindly following an agenda.
That said, this is a 70+ year old article, based on ideas and problems at the time. Capitalism will make people stop working and be less productive? If anything we worry about the opposite problem. College will only be a means to a career? Today academia is powerful and a political force unto itself. And we have so many welfare programs and safety nets and worker protects than Einstein was even able to dream about in 1949. In a way, we are living in a world he was advocating for.
If it was written today, I have no doubt Einstein would still care about inequality and education and politics and common "workers" enjoying life. But I also don't think I would see him caring as much about Marxism and the labor theory of value specifically as a mechanism for understanding it anymore.
> Capitalism will make people stop working and be less productive? If anything we worry about the opposite problem.
Well, unemployment is kind of a requirement of capitalism. You can't have the labor force calling the shots, it eats into profits. From the article:
> There is no provision that all those able and willing to work will always be in a position to find employment; an “army of unemployed” almost always exists.
He's being generous here, it's not just that an "army of the unemployed" almost always exists, it's a goal. Captains of industry in the current low-unemployment environment have been saying the quiet part out loud, that we need to increase unemployment. There's generally a target of 5% unemployment, which means capitalism has built-in waste.
> Well, unemployment is kind of a requirement of capitalism.
Says who? The only "requirement of capitalism" is that individuals are allowed to have ownership rights. Outside of a few niche organizations that benefit from economic distress, I think you will find a general S&P 500 consensus that low employment is a good thing for their stock prices.
> There's generally a target of 5% unemployment, which means capitalism has built-in waste.
That's because, in a free society, we have discovered that it's better to get people new and better jobs than be shackled to a milling machine from childhood.
> Says who? The only "requirement of capitalism" is that individuals are allowed to have ownership rights. Outside of a few niche organizations that benefit from economic distress, I think you will find a general S&P 500 consensus that low employment is a good thing for their stock prices.
If unemployment did not exist, the capitalist class would have no power to make workers work harder using the threat of losing their jobs. Of course, very high unemployment is not good for capitalism, nobody was arguing this. But very low unemployment below some threshold is also bad. Marx explained this, but if you do not believe him, capitalists themselves and their theorists say exactly the same thing, but with more gentle and less direct words: https://www.investopedia.com/insights/downside-low-unemploym...
Capitalism is a system in which those who control capital wield the most power, but without cheap enough labor to work the capital for a profit, capitalism will by definition give way to something else.
Realize capital has no market value without labor to work it. This goes for real estate too, which workers require to rest themselves just in time to return to work to turn a profit for those that control capital.
This is a warmed over version of labor theory of value which is at its core wrong. Value is entirely subjective and contextual, and utility is not a function of labor inputs.
Moreover high wages simply encourage innovation in labor saving devices and techniques. Tight labor markets aren’t the capitalists enemy. It’s no different than other input costs in some sense.
No, that doesn't sound right. The LTV says that commodities have an intrinsic value, and regardless of what their price is, the value of those commodities is determined entirely by the socially necessary labor time that went into producing them.
Um, no that's not correct. It's true that the origin of the labor theory of value is philosophers like Locke arguing that labor is the source of all value, but in the context that Marx was writing, Smith and Riccardo had popularized the notion that the market value of a good was proportional to the amount of aggregate labor that went into it. To his credit, Marx demonstrated that the market value of a good was not actually proportional to the amount of labor that went into it but he didn't abandon the idea that value of a good was somehow proportional to the labor used to make it.
Marx:
"Let us now take two commodities, for example corn and iron. Whatever their echange relation may be, it can always be represented by an equation in which a given quantity of corn is equated to some quantity of iron, for instance 1 quarter of corn == x cwt of iron. What does this equation signifify? It signifies that a common element of identical magnitide exists in two different things, in 1 quarter of corn and similarly in x cwt of iron. Both are therefore equal to a third thing, which in itself is niether the one nor the other. Each of them, so far as it is exchange-value, must therefore be reducible to this third thing.
[...]
As use-values, commodities differ above all in quality, while as exchange-values they can only differ in quantity, and therefore do not contain an atom of use-value.
If then we disregard the use-value of commodities, only one property remains, that of being products of labour."
In other words, Marx excludes use-value (what normal economists call "utility") as being a factor in the price of a commodity, apart from needing to exist at all (he reduces its relationship to a boolean relationship,) and makes it a function of labor quantity. This is so central to his argument that it comes up in the first few pages of Capital.
Marx always begins describing things in Das Kapital simplifying, and then, in later chapters, expanding the model, concluding that in fact it was more complex than was previously presented. The market value of some item would be proportional to the labor only if you consider an isolated industry as an almost closed system, like Marx did in the first book. At the third book, Marx shows that competition and search for profit would produce a force that equalizes the profits for several industries. In the end, prices cannot anymore be explained by the "value" of the product expressed in labor: several goods will be sold above or below their "value". Even if this value is still the origin of the surplus value that creates profit and growth in the capitalist economy.
Marx theory of value is much more elaborated than the one from Smith and Ricardo, and most arguments against it, are in fact arguments against naive and simplified versions of the theory.
I'm not certain of your point? Marx admits that LTV doesn't explain prices much earlier than the third volume; it's cental to his whole point, that the difference between the 'value' of a good and what a capitalist is able to sell it for represents exploitation. That's not a straw-man and asu_thomas was wrong to suggest it was.
No, this difference is the surplus value, which is part of the value of the good for Marx. If you remove the surplus value, you get the production cost. Marx does not argue that the "value" is just the production cost, it is certain that in a capitalist economy, which was what he was analyzing, the surplus value is part of the value, otherwise profit and growth would be impossible. Marx repeats in several parts that he considers in the model that all goods are sold exactly by their value, which for all goods, the surplus value is included. But later, Marx acknowledges that in fact, prices for each good cannot be explained solely by value (production cost + that surplus value) and that this simplified model needs to disappear when you take into account a model with several different industries competing.
But I do no not agree exactly with asu_thomas that the labor theory of value is so unimportant for marxism and I think you are right in questioning the affirmation. But I think you mixed a little the value theories from Smith and Ricardo and from Marx in your interpretation (the first two are the ones that do not consider this "surplus value" in the value and try to explain the capitalist profit as coming somehow from the labor of the capitalist or from other effects in the market and environment). And I also do not agree that the marxist theory of value is debunked and so easily dismissed. Certainly it is not a mainstream theory, but there are still marxist economists nowadays between the heterodox ones.
Actually he makes it a function of socially necessary labor time. Although I don't buy into labor theory of value, I think the "socially necessary" part is a pretty important part.
By the way, what is "his argument?"
Parent didn't say it isn't central to one of Karl Marx's many arguments, but rather that it's not central to Marxism, which is far greater than Karl Marx. Marxism is an intellectual tradition largely concerned with critiquing Marx's work just like we're doing here.
>but without cheap enough labor to work the capital for a profit, capitalism will by definition give way to something else
Demonstrate why this is true. What _exactly_ about the definition "private ownership of capital" necessitates that capitalism must give way if capital cannot be worked for profit by cheap labor?
> Capitalism is a system in which those who control capital wield the most power
Capitalism has no concern about power. It only speaks to ownership rights.
And, as an aside, what you are envisioning clearly puts the power in the hands of labour. As you said: "Realize capital has no market value without labor to work it."
“Ownership rights” are power. Capitalism evolved through the mercantile class under pre-capitalist systems leveraging their then-current power to force changes in the system which durably transferred power from the land-tied aristocracy to themselves.
Surely it is people that are entirely about power?
> “Ownership rights” are power.
Perhaps, but capitalism only describes one of many different ways of organizing ownership. It is not about ownership in and of itself. It turns out that we already have a word for ownership: Ownership. We came up with another word, capitalism, because it means something else.
> Surely it is people that are entirely about power?
Most people are in part interested in power and some people are entirely interested in power, but capitalism is entirely a system engineered for distributing power for the benefit of a particular class.
> Perhaps, but capitalism only describes one of many different ways of organizing ownership.
Capitalism implements (not describes) one particular way of organizing ownership, chosen for the effect it has on the distribution of power in society.
> but capitalism is entirely a system engineered for distributing power for the benefit of a particular class.
A previous commenter postulated a hypothetical world where capital only has value when labour is utilizing it. It in no way violated capitalism, but clearly labour holds the power in that world. After all, labour could just not use the capital and then take it from the dumpster after it gets thrown away for being worthless.
It is possible other worlds could see capital that is not dependent on labour and use that to take power, perhaps, but that's beyond the topic of capitalism. Nothing in capitalism says that there must be capital that is utilizable without labour.
> Capitalism implements (not describes) one particular way of organizing
ownership
Huh? Words can't implement anything. Only people can implement something.
If we were talking about the word “capitalism”, it would be in quotes; that’s how you make use/mention distinctions in English. “Capitalism” is a word, the thing it describes is capitalism, which is a system, which implements a design that people have made.
Indeed, capitalism does not implement capitalism, capitalism is the product of what people implemented. And when we talk about capitalism we are talking about a word that describes that.
> In what world do you think the people who own everything don't also have all the power?
A world where "Realize capital has no market value without labor to work it" is true cannot see power reset in the hands of those with capital as it asserts that capital has no value without labour, which means that labour holds all the power.
I don't know what world that was meant to refer to. It did not specify, nor was it it written by me in order to specify now. You may have accidentally pressed the wrong reply button?
> You cannot decouple ownership from politics.
That may be true, but the concept of ownership doesn't come from capitalism. Socialism, for example, also describes ownership. You cannot couple ownership with capitalism.
> A world where "Realize capital has no market value without labor to work it" is true cannot see power reset in the hands of those with capital as it asserts that capital has no value without labour, which means that labour holds all the power.
Yes and no, the capitalist needs the labour for their capital to be worth anything, but likewise the Labor needs the tools the capitalist owns to multiply the value of their labour.
Since capital gives control of the state (indirectly) the state tends to also support capital which then has a monopoly on violence and can coerce labor through means that the labour itself doesn't have. Historically this has come about in the police engaging in union busting (an example of how capital is power).
> but likewise the Labor needs the tools the capitalist owns to multiply the value of their labour
Labour doesn't need to multiply its labour, though. Labour remains valuable no matter what.
> Since capital gives control of the state (indirectly)
The state is just people. In a world where capital is worthless without labour, I assume that labour makes up the majority of the population – why would a small group of people sitting on capital that does nothing and is worthless have more power than the majority of the populace who actually bring value to the table?
> which then has a monopoly on violence
In a world where capital is worthless without labour, who, exactly, is going to enact that violence? You need labour to bring the violence...
Maybe, but for a somewhat tortured example: if you're a programmer with domain knowledge of a specific application then your value there might be worth $150k a year. If that's taken away from you and you have to learn a new domain then your value might be only $80k per year. If even a computer to work on is taken away from you then your labor is only worth minimum wage.
Painfully tortured, indeed, but let's try to work with it:
In this world of which we speak, if you take the labour away from the computer then the computer becomes worthless. At which point you can then you can collect the computer from the dumpster to then build yourself back up to being worth $150k per year plus the return on capital value.
Clearly labour holds the power in this world. It can completely destroy the capital owners. The inverse is not true.
Capitalism doesn't have to be concerned with power for it to result in those with capital holding the most power. 'Rights' that are only available to those with capital aren't really rights at all.
Likewise, math doesn't have to be concerned with resulting in CSAM material being distributed electronically. But it has resulted in that.
What is the takeaway here? Are you suggesting that we should rid the world of math because it might accompany something not liked? Indeed, no more math, no more electronic distribution of CSAM material. Problem solved?
Rights and ownership are defined and maintained by a state. A state is a monopoly on violence, not by right but by power. In other words, power precedes rights and ownership.
Additionally, capitalism is defined by relations to capital, not by relations to mere property. Big difference.
This is not really true. "Power" in a social context proceeds from social relationships. A king only has power if people buy into the idea that he has power. In other words, any power beyond individual brute force is a social construct. Even the idea that the state has a monopoly on violence is a social construct, (and is often not true, even in practice.) So social power depends on the ideas that people in a society hold generally, such as ideas about rights and ownership. So it's often those ideas that define the power relationships in society rather than the other way around.
Wrong. A king only has power insofar as a people exist to buy into the idea that he has power, hence why kings required armies from the start. As we know, kings did not exist prior to farms that needed protection. This is not a coincidence. Only from the circumstances of material preconditions could such divine rights even be imagined, whether it be kings or founders of PayPal.
Materialism is one reason why I believe Marxism is worth defending.
That's revisionist history. A king only has power insofar as a people exist to buy into the idea that he has power, hence why kings required armies from the start. As we know, kings did not exist prior to farms that needed protection. This is not a coincidence. Only from the circumstances of material preconditions could such divine rights even be imagined, whether it be kings or founders of PayPal.
Utter nonsense. Kings and the like could not exist until agricultural societies needed armies to protect them from invasion. Only from within such material circumstances and relations could divine right be wrought on a public imagination, whether it be monarchic kings or founders of PayPal.
And this is why materialism, Marxism or possibly otherwise, is worth defending.
While that may be true, capitalism does not concern itself with power or class or anything like that. It is narrowly focused. It is not some catchall term for anything you happen to observe alongside the ownership rights it speaks to. It's okay to use other words.
Capitalism has consequences like math has consequences.
I guess that's true, but what does that really mean in practice? CSAM, at least the digital kind, is a consequence of math. Are we supposed to brush it aside because "Oh, that's okay, it's just math!" or are we supposed to get angry with math and push for a math-less world? What is the takeaway here?
Moreover, while (digital) CSAM is, indeed, a consequence of math, if you see a problem with CSAM, why not just call it as such? Why try to obscure what consequence you encountered by calling every problem that might come from math, math?
> If unemployment did not exist, the capitalist class would have no power to make workers work harder using the threat of losing their jobs.
How so?
There could be 0% unemployment and anyone could find another job easily, but the other job could pay less, or have less flexibility, or be in a less convenient location, so you still prefer the job you have now.
Suppose unemployment is low because prices are high, so no one can afford to go without a job and will take jobs under unfavorable terms in order to make rent.
> There could be 0% unemployment and anyone could find another job easily
Technically, 0% unemployment would mean that you can't take another job, as you transitioning into another job would create frictional unemployment, which would mean that the unemployment rate would not be 0%.
In practice, somewhere around 3% is usually considered full employment. The 3% are those in the process of changing jobs.
> Technically, 0% unemployment would mean that you can't take another job, as you transitioning into another job would create frictional unemployment
Transitioning to another job only creates frictional unemployment if there is a period where you are out of work but looking for work. Otherwise (e.g., if you find a new job before leaving) if you have a break from work as part of transition, it creates a frictional exit from the labor force, not frictional unemployment.
But 0% unemployment is hard to imagine if employers can terminate workers without first finding them acceptable replacement employment.
It comes down to profit. Costs (like labor wages) cut into profits. Capitalism could hypothetically support a high thriving-wage for all workers and still create profit for the owners, but historically the owner intentionally depresses wages so that the owner's profit portion is larger.
High unemployment creates conditions favorable for the owners. It creates leverage for the owners to coerce the workers into accepting lower wages. A scenario where the state offered full employment as a competitive labor market to the private sector would force the private owners to raise their wages. Then they would have to deal with how they want to approach their profit situation. They'd probably just raise prices of their products. But in the end, the owner is making the decision on what the prices would be. Not the employees.
The way it does this isn't by paying workers more than competitors do for the same work. It's by charging customers less than competitors do, which actually selfishly benefits them by increasing their market share, but also distributes more wealth to workers because you can buy more for the same dollar (or the same amount of stuff and add to your savings or pay down debt).
What prevents this is uncompetitive markets, which are occasionally found as a result of natural monopolies, and more commonly found as a result of regulatory capture.
Are people really confusing unemployment with no job vacancies?
You could have 100% employment, and still have people looking to hire. If there are 1000 people in a population who all work, it doesn't mean none of the businesses are looking to hire
That would still require the employer to have a monopoly on jobs.
Unemployment is very frequently caused by people who can command wages well above subsistence level preferring to go unemployed while holding out for a wage consistent with their skills, even if there are a zillion subsistence-level jobs they could take in an instant if need be.
Wouldn’t that depend on the social safety nets in place? Say unemployment in Europe versus the US. Also nothing stopping a terminated person from seeking other employment opportunities.
You know that the basis of all production the most labour intensive industries are not in Europe or US. But in third world countries. Its where you find most factories, mines, farms... You know why the industries migrate there? Because there is very little social safety and labour is cheap. When we talk about capitalism, we need to remember that it is a global economic system.
Labor is cheap in those places because cheaply sold labor is a better deal for residents than subsistence farming; over time, the labor gets less cheap as living standards increase for those places.
It's obviously possible to take that observation too far, and to excuse all sorts of abuses. But the underlying phenomenon seems to square pretty well with what we know about living standards over time worldwide.
Very low unemployment (aka labor shortage) is bad for business owners, not capitalism. There is a difference. Capitalism is a system that everyone plays a role in in benefits from; it's not a group of people.
One could consider labor shortage good and healthy for capitalism itself, since it increases worker wages and thus builds political support for the capitalist system.
> the capitalist class would have no power to make workers work harder using the threat of losing their jobs.
They would have to offer higher wages and not just "industry average", like we saw during the pandemic. Then the planned economy folks decided that was the exact moment the free money faucet had to be cut off.
We just experienced this though and it wasn't good for their stock price. Low unemployment means they have to pay their workers more to hire or retain them. More expense means they either need accept making less (bad for stocks) or raise prices to make as much money, which could be bad for business.
People may work hard for a number of reasons of which unemployment is only one - more money, a promotion, personal interest in the outcome (e.g. scientist), personal work ethic, you like this job more than other jobs (job preference due to management, coworkers, location, job type).
Once again Marxism oversimplifies the world and ignores a lot of nuance.
This is not true for most people where I live. I live in a third world country. Most workers are just trying to survive. You know that the basis of production and where you find the most labor intensive industries is not in Europe or USA. These industries, the mines where metal is extracted, farms where lot of the food in produced, are all in third world countries. Why Siemens move their factories to third world countries instead of their own country in Germany? Because labour is cheap. Ask any worker that work in these places if he work by personal interest or ethics. They are just trying to survive. They have families and all possible jobs pays little and requires a lot of effort.
Perhaps you see this as an oversimplification because you are looking too near home in a biased position. The number of countries considered "rich" and "developed" is a minority. Capitalism is a global system.
I live in a developing country right now where jobs are plentiful. Employees jump from employer to employer for more money.
So while I don’t doubt the situation is different in your country, the fact that different situations exist would argue that it is an oversimplification.
> If unemployment did not exist, the capitalist class would have no power to make workers work harder using the threat of losing their jobs.
This seems to envision that nobody can find new kinds of useful work or otherwise work for themselves, which is odd when you're on a site where most of the people work in jobs that did not exist if we turned the clock back just a few decades and quite a few people are their own bosses.
It’s not about nobody. Individuals can escape the intention. Statistically though you can have a target achieved by slowing the economy, as evident in the current situation. Of course, if the goal is not optimisation of output but of it’s distribution (with different views on what is the proper objective) then capitalism is only different to socialism in terms of definition of that objective. But similar to how we never achieved true socialism, we have never achieved true capitalism either, so I am wary of discussing on the merits of each theory on the basis of the pitfalls of their application. We still need a proper descriptive theory of our experience and socialism inadvertently is better at forming the initial angle of attack, giving a more articulate basis of discussion in terms of distribution rather than output.
What gets called capitalism are basically imperfect, socially evolved things that have survived and worked well enough to survive. There are definitely rent-seeking parasites out there, but some of them are like the Kim family in NK.
I mean, you can say the same about Socialism, even if you avoid the nationalistic flavors thereof. It's not like Russia, China, Cambodia, etc. were peaceful and it's odd that you point to the reaction to those via CIA regime change without mentioning why they might be worried about Socialist revolutionaries to begin with. Che wasn't any too peaceful, either.
> If unemployment did not exist, the capitalist class would have no power to make workers work harder using the threat of losing their jobs.
What is the capitalist class in this case? In a perfect world this would be done by beatings and imprisonment, right?
> Of course, very high unemployment is not good for capitalism, nobody was arguing this.
It's not good in socialist or communist countries either. Or is that a uniquely capitalist problem?
> But very low unemployment below some threshold is also bad. Marx explained this, but if you do not believe him, capitalists themselves and their theorists say exactly the same thing.
Yes, that's what we're all agreeing on. It's not saying "Marx said it's bad, thus he was right about everything"
What is the substance of your post? What are you trying to say? Because it sounds like you're agreeing with capitalism but under the guise of supporting Marx
And the US politics would be better off if politicians didn't need to worry about their decisions causing the stock markets, and with it people's pensions or healthcare, to tumble.
401k, HSAs etc are the stranglehold on US politics.
> "Says who? The only "requirement of capitalism" is that individuals are allowed to have ownership rights."
This was extremely powerful @legitster. For some reason this cleared up economic theory to me. These threads get lost in worker rights, but, that has nothing to do with capital. Capital is about ownership rights. You should be allowed to own things and means to your own production. Socialism is about taking these rights away, the debate is which.
That seems like poor representation of socialism. Socialist policies typically increase worker rights. You could see that as merely taking away rights from existing capital-owners, but it seems to me that it's clearly a case of competing needs. Any rights you give to a worker is necessarily a restriction on their employer.
yes, you're right. that's what we call "class conflict", it just means that different groups of people have different, conflicting interests based on their relationship to the work
> Says who? The only "requirement of capitalism" is that individuals are allowed to have ownership rights.
That's not quite complete. To have capitalism, you also need labor to leverage capital. Capitalism requires the ability to extract money from the labor of other people.
If every company was worker owned, you could still have a market economy and private property, but it wouldn't be capitalism anymore.
> If every company was worker owned, you could still have a market economy and private property, but it wouldn't be capitalism anymore.
That's not correct. If every company was worker owned as long as the goods and services produced are traded on the open market as an exchange of value, that would still be capitalism. If "worker-owned" actually means government owned, however, then you're correct. Capitalism requires private ownership of the means of production.
> If every company was worker owned as long as the goods and services produced are traded on the open market as an exchange of value, that would still be capitalism.
No. We had "exchange of goods on an open market" long before we had capitalism.
> If every company was worker owned, you could still have a market economy and private property, but it wouldn't be capitalism anymore.
Again, says who?
Depending on your definition of capitalism, corporate charters pre-date capitalism! Corporate charters were rights granted by governments to pursue economic activity. What we define as the introduction of "capitalism" was the granting of individuals without nobility the rights to corporate charters.
Today, a corporation is still a government defined-entitity for the purpose of generating economic activity.
That's actually basically how the economy of Yugoslavia worked, worker's self-management [0] being the key term. You had worker-owned coops competing on the market.
If the labor supply increases, new enterprises will be able to hire and grow. This will shrink the labor supply and increase the price of labor.
The only time there are massive shifts are when some sizeable factor creates a disruption. Sometimes that’s technology advancement.
Other times it’s a policy change due to government intervention. The area where I live used to be the textile capital of the world until a policy change shifted all of it overseas and gutted the entire area.
And now that same area is thriving after years of being destitute. Old mills converted to fancy apartments. Old train tracks used to ship product converted to bike trails. Thriving tech community.
It ebbs and flows. But nobody making centralized decisions would have made the choices that led to it.
Economics doesn’t guarantee absolute efficiency just a reasonable approximation of efficiency.
Moderate unemployment is one such inefficiency, but so is misallocated labor. A worker moving to a higher paying job is hypothetically a more optimal allocation of resources because they can only be paid more if they are creating more value. However, the real world is messy and therefore the price signaling around pay isn’t perfect just as stock pricing isn’t perfect either…
The bizarre thing is in practice capitalism works so well despite these issues even before you consider government intervention, monopolies, incentives misalignment etc. However at some point it’s less about the system than the people operating it.
>The bizarre thing is in practice capitalism works so well
Does it? It's exacerbating environmental destruction, it creates all manner of bullshit jobs that are an epic waste of human potential and it has created a massive underclass who can't even afford the roof over their head.
I dont think this economic system will be looked upon fondly in 500 years any more than we're impressed with the divine right of kings.
That massive underclass existed long before capitalism. Agrarian societies have had poor people going back longer than recorded history, they also generally had slaves and or some form of serfdom.
Humans also caused massive environmental devastation going back to the Stone Age and across all economic systems. In the Americas only 1 in 6 mega fauna species alive 50k years ago survived to 10k years ago. In Australia it was 1 in 8.
Things have gotten worse but that’s less that individual humans have become more destructive, it’s mostly the simple fact there are more humans.
In theory a better option could exist we haven’t actually implemented anything better, humanity has tried many systems not just feudalism, communism, and capitalism and it’s the clear winner by the overwhelming majority of metrics. Mercantilism, tribalism, etc all have some upsides for some segment of the population but don’t result in nearly the same levels of widespread prosperity.
What we consider extreme poverty was normal throughout most of the globe and most of human history.
At least initially feudalism was economically worse than the the Roman imperial system in terms of output per person. It’s stable politically, but not objectively better.
Output increased overtime as technique and technology continued to improve, but that’s not a function of the feudalism specifically.
The USSR suffered from the resource curse towards the end. Its an affliction that has destroyed many economies of all stripes. It's the same reason why most of Africa is an economic basket case.
The USSR was instrumental to mankind becoming a spacefaring species. The US wasnt even interested until the USSR started and lost interest once they landed a man on the moon and declared that they had "won" the race. Were they still around space exploration probably wouldn't have stalled.
They were also instrumental in keeping the US government in line. US elites were terrified that the USSR and domestic communists might join forces to overthrow them. Elite fear of communists is why people in the 1950s could easily afford college, medical care and a roof over their head and why they were guaranteed a job doing something meaningful like building a dam or a bridge.
You're probably right that it's better that our finest minds are dedicated to making people click on ads and take out loans, though. This truly is the pinnacle of civilization. You have a whole computer in your pocket. You might have been able to buy a house in the 1950s and not be bankrupted by medical bills, but you couldn't play flappy birds.
You’re incorrect in terms of the space program. The US and Great Britain etc where very interested in rocketry and therefore spending significant sums before Sputnik. Which is how the US was able to launch a satellite in 1958 a year after Sputnik.
You don’t go from knowing nothing about rockets to launching a satellite in a year.
Further, the US slowed down but didn’t abandon its manned space program. It was spending a frankly crazy amount of money on a publicly stunt to get people to the moon, but we’ve continued to invest in the space program over the long term. Actually going past the moon requires long term habitation in space thus the interest in space stations.
everybody was interested in rocketry ever since V2s demonstrated that a good rocket made a good weapon.
The US wasnt particularly interested in space exploration unless the USSR did it first though.
Just like the UK wasnt interested in setting up an NHS until it became glaringly evident how well the soviet NHS (also called the NHS) worked and the US won't set one up even though ~70% of the population want one.
Yes, I'd much rather be subjected to clicking on ads and playing flappy bird than being kept behind a wall and standing in bread lines in the Soviet Union.
It's not waste unless you think of humans as little units of work, like a resource to be mined.
People complaining about a problem doesn't mean it is a problem. I want cheaper milk, I complain about the price of milk, but the price is probably correct and that's for me to grumble about.
"Captains of industry" want a pool of unemployed people they can pick from. If the pool is dried then that's fine. It's not a sign that capitalism has failed.
I think the implicit argument here is that "capitalism" means "rule by those who own capital." Hence a lack of unemployed people, which would hurt the captains of industry, _would_ be a failure under that definition of "capitalism."
If by "capitalism" we merely mean things like a market economy with property rights, then the question would be what to call a system that has this but where workers, rather than captains of industry, have more power? Whatever we want to call _that_ system, it doesn't currently exist, and we've seen that any moves in that direction are very strongly resisted (c.f. return to office policies driven by captains of industry freaking out).
> I think the implicit argument here is that "capitalism" means "rule by those who own capital."
what "rule" ? - capitalism doesn't set out to "rule" by anyone, it's been a system of owning capital (to put it very simply / abbreviated) for as long as I've known it. I would call myself a "capitalist" (in that i ascribe to it, used it to pull myself out of poverty) but i do not believe in anyone having "rule" over me, especially not my employers. As a sound bite: "freer the markets, freer the people".
> Hence a lack of unemployed people, which would hurt the captains of industry, _would_ be a failure under that definition of "capitalism."
Ok, I could argue "maybe not", but why would we be arguing under that definition of capitalism? Is it not the same as "well my definition of capitalism is that everyone gets ponies and candies, so if you have rotted teeth, that's a failure of capitalism, under that definition."
I'm saying this in jest but for a real reason, why would we "just pick a definition of capitalism and argue why it fails" ?
> If by "capitalism" we merely mean things like a market economy with property rights, then the question would be what to call a system that has this but where workers, rather than captains of industry, have more power?
Capitalism. I'll assume by "power" you mean things like bargaining power for salary negotiations, benefits, etc, which is what unions do.. then yes, by definition, the seller (union) has capital (labour) that the buyer (whatever boogeyman you want) will have to negotiate for. The alternatives are to take it by force, which goes both ways, and ends in eternal conflict or a ruling power (this time real "rule" not phoney "he gave me a job" rule.)
> Whatever we want to call _that_ system, it doesn't currently exist, and we've seen that any moves in that direction are very strongly resisted
I strongly resist the rise in milk prices as well. It's a natural thing to resist having to pay more for the same services, because one seems to be losing something for no reason.. that's not to say it's a bad thing. Milk is expensive, people have real needs.
The only way to supress the complaining is by 1. convincing people that's what they really want, or 2. beating / forcibly supressing that. CCP for example, does both, by attributing anything to nationalism and/or xenophobia - because it works and keeps the populace not demanding more power from the government.
> (c.f. return to office policies driven by captains of industry freaking out).
I would fathom that it's less "captains of industry wanting to enslave the common people like you and I" and more "commercial real-estate no longer has as much of a purpose and people do not want to be left holding the bag"
> what "rule" ? - capitalism doesn't set out to "rule" by anyone, it's been a system of owning capital (to put it very simply / abbreviated) for as long as I've known it.
It seems clear to me that those with a great deal of capital have far more influence over what laws get passed and enforced than those with less capital. And that many laws benefit those with more capital, often at the expense of those with less. I'd call that "rule."
If you need someone else to force something they don't want to do (get a certification) you negotiate with the entity who has the monopoly on violence to maybe consider your recommendations. Then you need to wait for an opportunity (a mishap in the field, someone got their toe cut off) the monopoly of force might want to act on. Then you can offer a solution (a certification program) supported by your prior negotiation that makes the monopoly on violence mandate a requirement (your proposal).
The result is that you now offer a service and a mandatory certification and your competitors must go through you to be able to offer the service to anyone else or face the monopoly on violence.
There doesn't have to be any exchange of funds or favors. You simply offer the confused representative of monopoly on violence a solution, all you need is to sell it well.
> those with more capital have far more influence over what laws get passed and enforced than those with less capital. And that many laws benefit those with more capital, often at the expense of those with less.
This is called corruption and crony capitalism, and it happens far less than you might think in the western world, and the effect is far greater in socialist and communist countries, or countries that don't respect capitalist fundamentals.
You can have power and rule over people without the need for a free market
Seems very unclear to me. If it were true then rich tech firms and banks wouldn't constantly be treated like piñatas by governments, who very much enjoy fining and regulating them despite their protestations.
This is the problem with socialist theory. It's full off assertions that in reality lots of people don't agree with or which are clearly untrue, über they're taken to be axiomatic.
Corporate CEOs do go to jail, there are numerous famous examples just from recent history. Elizabeth Holmes, the Enron guys, Sam Bankman-Fried.
If your post was true then these rich people would have just lobbied to change the law in their favor and won.
But yeah mostly governments prefer to take their money for vague crimes that don't even apply to individuals at all, and then leave them to earn more. Much better for the coffers that way.
Property rights and a market economy are not sufficient for capitalism.
For capitalism you also need to leverage the work of others for your own profit, i.e. wage labor. Syndicalism, for example, also allows for private property and a market economy. It's not capitalism, though.
Worker exploitation is a core principle of capitalism.
>as long as you're not breaking laws, you'll be fine.
My expectation is that this would most likely be nearly impossible without money and therefore work, because you can't live on land you don't have the rights to. From a quick search, you can legally camp in national parks in the same spot for up to 2 weeks before you have to move at least 25 miles. And of course, there are legal restrictions on hunting and fishing that (I expect) would be make feeding yourself impractical.
But that's besides the point. It's still exploitation even if other options are merely much more difficult/annoying/painful and not impossible.
Im my opinion, all employees in a business should receive about the same amount of money. Either someone is doing a necessary job and thus contributing just the same as everyone else, or that job is not necessary and then there is no need to pay someone to do it. There can some variance in the distribution and that might even be useful in some sense.
That said; I'm a syndicalist. I think that the people working in business should own that business. That way there's no issue of exploitation.
The capitalist model of economic progress allows too much inequality to creep in, something that in the long run is harmful for any society. It also allows of an unreasonable compounding of slight initial differences that then will explode into the madness we see today, where some individuals have more economic power than hundreds of millions of others - now that is unfair.
when marxists say "exploitation" it's just a mathematical fact, not a value judgement. it just means that workers, systemically (that is, it doesn't make a claim about any individual worker), don't get ownership over the full value that they produce. this must be true if you really think about it, otherwise there would be no reason to own a company that you aren't also a normal worker in
> don't get ownership over the full value that they produce.
But the value is subjective. A few lines of code is not valuable to me, no matter what context, so I am happy to trade it for a salary.
If I dig a hole for someone, someone agrees to pay me $50 for it. I value the $50 more than the cost of labour to do the hole. Me making holes is no value to me, and infact it's a good workout, so if they didn't pay me to do it I'd just go to the gym and do the same movement for free.
To them, it's probably the start of a fence or a clothesline or something that solves a real problem for them. Much more valuable than $50
on an individual level maybe it's (partially) subjective, but marx is concerned with the systemic level. he's talking about the industries which really drive the economy
i don't think there's ever been a successful attempt to reduce macroeconomics down to the microeconomics level. basically, the system as a whole cannot be calculated by summing up a model of all the individual behaviors, it doesnt work that way. there have been several broadly successful macroeconomic models
steve keen talks a lot about this same type of stuff and he's very much not a marxist, if you want a different perspective on it
No, it's not zero sum, it's possible to destroy value, i.e. 1+1 could equal less than 2. And it's also possible to create value, i.e. 1+1 could equal more than 2.
In the extreme case even literal bars of gold can become worthless after a few seconds of 'work', e.g. if someone throws them into an active volcano. After which no human individual or group would derive anything from it.
It's impossible for humans nowadays, but it is practically possible; one only needs enough delta v, which requires energy. There's certainly enough energy in existence to throw the Earth into the sun.
Yes, obviously this is absurd. But I'm just extrapolating your argument to make an argument: It is silly to expect any economic theory to account for throwing the Earth into the sun. But its also silly to expect an economic theory to account for other absurd behavior, like throwing gold into a volcano.
Every economic theory relies on simplified models of human behavior. Humans behaving irrational is not usually part of those models; the ways humans can behave irrationally is infinite - not useful for a model.
If not, have you completely misunderstood how easily this can be accomplished?
Raising an example that is not practically possible at all, by any dictionary definition of 'practical', such as moving the entire Earth into the Sun, and trying to confirm it meets that criteria by saying maybe in the very distant future it could be is just bizarre.
The latter is literally dozens, if not hundreds, of orders of magnitude harder to accomplish than the former. So even in some incredibly distant future where that would become 'possible', it would still not be practical in any sense that HN readers of 2023 would understand it.
If not, you have completely misunderstood the purpose of an argument reductio ad absurdum.
The point is not whether is is currently practical of if it will be practical at some point.
You are demanding that an economic theory makes sense of one particular, nonsensical human behavior. That demand is ridiculous; no economic theory tries to model irrational human behavior.
A reductio ad absurdum argument does not apply here because I, nor anyone else here, has ever claimed that economic theories have to satisfy all potential possibilities arbitrarily far into the future. In fact no one in this comment chain has even raised the mention of it other than you.
Have you completely lost track of the conversation? At best, it seems like an argument against the imagined thoughts made by yourself.
Well, you seem to make the argument that economic theories have to "satisfy all potential possibilities arbitrarily far into the future" because otherwise they are a "pretty dumb theory".
Or how is throwing gold into a Volcano any different from throwing the Earth into the sun, other than one being possible right now and the other maybe possible in the future? Both are pretty irrational and arbitrary actions.
> Or how is throwing gold into a Volcano any different from throwing the Earth into the sun, other than one being possible right now and the other maybe possible in the future?
The present day versus the far future is a very important difference, in addition to the several dozen or hundreds of orders of magnitude. Do you not understand how the normal person perceives possibilities in relation to time, or what orders of magnitude are?
Anything that is reasonably possible to do by a single individual right now, circa Sept. 2023, with normal single human adult scale resources, needs to be taken into account by any economic theories. If it's to gain credibility from the HN readerbase over the predominant theory.
If someone spending a few hours of effort could cause a theory to do the equivalent of a divide by zero then it's a dumb theory and close to zero passing readers will take it seriously.
If you have a valid economic theory, it doesn't matter if we apply it at 50BCE or if we apply it in 3000CE. Either an economic theory is able to explain a given economic situation and make predictions, or it is not.
> Anything that is reasonably possible to do by a single individual right now
Economic theories don't usually depend on the concrete specificity. Moreover; economic theories actually often pose the question "What if this thing that was not possible before suddenly becomes viable".
> divide by zero then it's a dumb theory and close to zero passing readers will take it seriously.
That might be a bad example; regular math doesn't do divide-by-zero, but we still use it very much.
> you can go into the woods, hunt and fish, and build your own shelter. as long as you're not breaking laws, you'll be fine.
That's a big no-go in almost all European nations. Fishing and hunting is always regulated, requiring permit and all the bureaucracy leading up to that.
Not an option for most - if any - nation on earth.
> If work was owed to the state (or syndicate),
That's neither what syndicalism proposes nor what I talked about.
If an owner of capital, i.e. a capitalist, makes money from a combination of his own efforts & automated systems (physical or software) he has invested in, by your definition he is no longer a capitalist. Ergo, your definition is either wrong, or at best incomplete.
If you make money on your own, from no capital inherited except what society has given you and you don't ever have any employees, only making profit from your own labor, then yes; that's not a capitalist.
How does that demonstrate that "my" definition is wrong or incomplete?
Because in the example I gave, you’re not making profit from your own labour, you’re also “exploiting” machines and software. How does this not meet the generally accepted definition of capitalism (a system in which private individuals or businesses own capital goods)?
Because the generally accepted definition of capitalism isn't "a system in which private individuals own capital goods".
(Software and machines are means of labor [0]. They are not workers and they don't receive wages.)
That's a widely held misconception. We had economic systems with "private individuals owning capital goods" before and we didn't call them capitalism. [1]
One central characteristic of capitalism is wage labor. If you don't make profit from leveraging disparages between wages paid and profits made, you're playing capitalism, but some other kind of game.
From your own link: "Capitalism is an economic system based on the private ownership of the means of production and their operation for profit". You're talking about something else.
Being "based on" means that private ownership and operation for profit are necessary conditions. It doesn't mean that they are sufficient; i.e.just because you have private ownership and operation for profit doesn't mean you have capitalism. We had private ownership and operation for profit long before there was capitalism, in systems that are not capitalism. (This is the modal fallacy)
The second error is closely related. Not everything that has private ownership and operation for profit is capitalism. It could be Syndicalism, for example, which also has private property and operation for profit. (This is the fallacy of faulty generalization)
So the first sentence of the wikipedia article you linked about capitalism is now wrong, based on 2 other wikipedia articles? I don't think this is a productive direction for discussion tbh.
> So the first sentence of the wikipedia article you linked about capitalism is now wrong
No, it's not wrong, the articles is perfectly fine and they don't contradict each other.
The phrase "Capitalism is based on private ownership and operation for profit" is absolutely true. But the conclusion you're drawing from these sentences is wrong.
If I say "Crêpe is a dish based on flour and eggs" that doesn't mean that if I have flour and eggs I have a Crêpe - because to prepare Crêpe I also need other stuff.
If I say "Crêpe is a dish based on flour and eggs" that doesn't mean that everything made from flour and eggs is a Crêpe - because there are many things made from flour and eggs that are not Crêpe.
Labor doesn't operate like that. If we wake up one day and suddenly need a ton of labor, we don't need idle worker. We can reassign active labor, like in World War II.
Also, it's weird to casually call people becoming homeless and starving and dying due to lack of work "slack". I'm sure the people desperate for money see that as a crisis more important than whatever abstract system crisis you are imagining.
The 60's were an era of labour shortage in the UK. Recently some British towns had a labour shortage, such as Reading. This means that garbage collection jobs pay well, which is a good thing for those that want to work and be home in time to collect the kids.
A labour market should have people dropping out for having babies, going to education, sickness, looking after elders of the family, going on adventures and self improvement, for example people that want to write their own app/book.
People who are not actively looking for work are not included in employment numbers (at least in the US). People voluntarily taking time away from working are not the reserve army of labor that our policies create to suppress worker power.
This is a nonsensical understanding of employment! The reason there are unemployed people is a combination of transit times (if you lose your job as a programmer tomorrow you don't want to be allocated to a job as a hairdresser just because that was the next slot that opened up temporarily) and because some people would like to work at a specific job but can't get one right now, and would rather live off savings or welfare for a while rather than compromise (e.g. jobbing actors).
Attempts at full employment were tried, it resulted in dead economies. This stuff is basic!
I would counter that you have a nonsensical understanding unemployment. You are imagining that everyone unemployed is so by convenient choice and voluntarily holding out for something that meets all their preferences. That is not true.
Socialism doesn't require forcing programmers to be hairdressers. That's a huge strawman.
Mostly that's actually indeed the case, because of how statistical agencies define employment. People who are so terrible at work that they can't get a job anywhere eventually give up looking and fall out of the workforce entirely, so don't count as unemployed anymore (arguably they should).
For the rest, sure, there are some who search but cannot find work. But what that usually means is they can't find work that matches their specialism. Maybe they could go stack shelves for a bit, but if your prior work was as a senior lawyer it makes sense to take the time to find a job that matches your skills.
Fair point, although I found in the discussion that zero percent unemployment was considered bad, whereas, as I see it, there are always people dropping in and out of the labour market. My point was that not everyone works all the time.
I think worth noting 5% unemployment doesn't necessarily mean an "army of the unemployed", by which I take you to mean a sliver of downtrodden persistently unemployed people.
It's a metric taken by sampling the population and asking if they're looking for a job at that moment. It could equally be every worker looking for a job 2.5 weeks out of the year.
It's obviously somewhere in between those extremes but picks up a lot of the latter as seasonal workers shifting to where there's demand.
Engels' concept of the reserve army of labor does not refer to a specific group of persistently unemployed people, but to the idea that there must always be some significant number of people who are unemployed. In other words, a statistical unemployment rate of 0% is not possible under capitalism. This is simply because if there was 0% unemployment, it would be impossible for businesses to hire anyone without poaching from another business. According to the law of supply and demand this would result in wages rising rapidly and without bound, much as the price of bread does during a famine, until it was impossible for businesses to make any profit.
"According to the law of supply and demand this would result in wages rising rapidly and without bound"
No it doesn't. Having to poach employees to increase your labor pool doesn't mean that you are willing to raise wages without and bound. A food crisis is where an inelastic demand meets a hard supply limit, so prices can go up dramatically, but they don't go up infinitely, not even in a famine.
Supply and demand does not allow for unbounded rises in prices because demand is never infinite. Rather, prices go up to the highest amount demand will allow for. For things like food for which demand is inelastic, prices can go up pretty high and people will eat into their savings if they have to, but labor will more likely be limited by the marginal productivity of individual workers.
> Supply and demand does not allow for unbounded rises in prices because demand is never infinite. Rather, prices go up to the highest amount demand will allow for.
Generally, yes, but it's not an absolute.
Each time an employee is poached for more money, that person has more money to spend; done frequently enough, this will increase the velocity of money and cause general inflation or even hyper-inflation.
I'm only speaking hypothetically because folks are talking about 0% unemployment.
Milton Friedman's "natural rate" of unemployment is basically "the rate capitalists are gunning for" in an attempt to suppress wages. Quite a bit below full.
I don't see anything in that link about increasing unemployment in order "suppress wages". Milton Friedman's comments are about monetary policy. Unemployment can be decreased by increasing inflation, but Friedman thinks thats a bad idea. He not arguing that anyone should "gun" for that unemployment rate, but rather that it should be accepted as the "natural" result of an elastic market.
>This is simply because if there was 0% unemployment, it would be impossible for businesses to hire anyone without poaching from another business. According to the law of supply and demand this would result in wages rising rapidly and without bound, much as the price of bread does during a famine, until it was impossible for businesses to make any profit.
You can tell from ideas like this that Engels never had to work a day in his life. Not everyone is going to instantly switch jobs when they hear about a slightly better one. And I thought capitalists were the ones that supposedly treats humans as mindless automatons.
If you're going to assume spherical cows like that, all businesses would already make 0 profits due to competition. In a hypothetical capitalist world with 0 unemployment, employers wouldn't poach anyone unless if they think that it would be a profitable decision. We'd have higher inflation, but that's not really the end of the world if everyone is employed. More importantly, our economy would stagnate due to not having any slack, but that's the to occur in any non-capitalism system that has 0 unemployment.
College has become mostly just that, a means to a career. It's even begun to wear that out and at higher levels become a means to a career in Academia. That's ultimately the beginnings of a massive ponzi scheme, it is now considerably detached from pure pursuits of knowledge, it's now become cannibalized for pursuits of funding.
It's less of a Ponzi scheme and more of a gamified, time and treasure expensive hazing ritual whereby the sheepskin "proves" "quality" and some measure of aptitude, intelligence, baseline of problem-solving ability, and ability to finish something. It has been and is also 4-N years of extended adolescence. And in the distant past, when universities were more selective and cheaper, it's where people often met their spouses.
How else should we prepare people for the various workforces: knowledge work, financial services, skilled trades, etc.?
Universities fear 2 things: bad publicity and losing accreditation. Perhaps accreditation orgs such as ABET (in the US) need to get off their collective, perfunctory rubber-stamping posteriors and ensure financial and fiduciary stewardship are occurring, and that a university doesn't become tantamount to a white-collar human trafficking recruiter demanding the life savings of their victims on the vague promises of a bright future.
The academic tracks are like a pyramid scheme: professors need graduate students, who then become professors who need graduate students, who become professors who need even more graduate students.
This was successful as we forced more and more young adults to go to colleges, but that growth is slowing while the academic tracks are still multiplying, which means there are PhDs and grad students who are very upset that their expensive pieces of papers will never get them the tenure job they thought was guaranteed. So we have very angry academics teaching our young adults -- and that's NEVER gone badly.
I'd argue that the evidence of "aptitude, intelligence, baseline of problem-solving ability, and ability to finish something" has much less value now.
University is more of a vocational college now - there are specializations for most things, and if you didn't choose the right specialization and are trying to break into a field it's much harder to do so given that there are other people with better education. Because the general university education has become so ubiquitous just having a degree has much less power now.
That's a shame that it's still and increasingly a one-way, expensive, usually water-down, specialization guessing game without trials of what's on the other end.
Also, an increasing requirement in some fields of a Master's or PhD is doubling down on the filtering system. That started to be a thing in the 2000's.
The irreducible question is: What should be done to fix or replace it? Fixing it with a fundamentally better alternative seems superior than the continued gamification of USN&WR pole positions. Also, college tuition needs upper limits because too many universities are tantamount to international labor human traffickers.
I posit there ought to be cheaper undergrad colleges that are more rigorous, more practical, and more of a funnel filter. That is, the prestige isn't derived from acceptance but filtering for excellence like some professional postgraduate degrees. You can go through various paths and retry as many times as you'd like. The point would be specific, strategic preparation of students rather than grade inflation, honor code proctor-less examinations, partying, and endowment and CIP embiggening at the expense of student debt peonage.
This is kind of my point. In 1949 when Einstein wrote this, the US state colleges were little more than vocational schools. He was advocating for a world ruled by academic achievement, kind of unaware of the brave new reality it would come with.
If it didn't come from Einstein, nobody would even pay attention. It just states the same gains and problems everybody knows (and did know by decades at that time), and restates the large showstopper without going into how to solve it (what nobody knows how even today).
It's a really good piece of popular communication. He was very good at that. And the situation didn't change much since then (at least the things he describes). So yeah, if you don't know a lot about the subject, the article is for you. Just don't expect to learn anything deep.
Most people don't know anything about the subject. People in this thread are likely far more educated than average on the subject, but I'm still seeing a lot of comments from people who don't understand the basics of labour theory.
Federal expenditures as a function of GDP were ~12% or so in 1950 (ie, coming down from the war). They are 25% or so now, 20% before covid. I’d imagine the states are about the same.
Yes, capitalism makes people less productive. Wall Street? The richest of the rich get rich by playing games with paper, not by doing something useful to society. Look at all the stupid skyscrapers in NYC that were simply built to launder wealth, aren’t occupied, and are beyond the means of 99.99% of US citizens, yet the dominate the skyline and shade the public parks. Capitalism is designed to have lazy winners.
> Capitalism will make people stop working and be less productive?
\aside: Adam Smith in The Wealth of Nations has a story about men who worked themselves into the ground, because they were paid by-the-piece (not per hour). They needed to be protected from themselves. (The psychological mechanism wasn't speculated, but I suspect maybe competition rather than greed.)
I would say that Marx and labor theory of value are still relevant as mechanisms for understanding capitalism. According to Marx, Capitalism is a mode of economics that has unleashed the productive forces, but its internal contradictions give rise to increasing crisises. There is a constant downward pressure on labor costs versus rising costs of living.
Crisis has been averted multiple times, and the productive forces continue to be unleashed. To prevent total collapse, concessions like welfare have been made.
However, there is a real possibility of potential growth being stifled by self interests of powerful economic actors. This bleeds out now into identity politics as people view the liberal system as incapable of providing the growth and future they thought would be delivered. Either unprivileged groups want to be paid high wages or the privileged groups want to protect their high wages from being cut down. This is a form of class warfare that isn't too different from what Marx observed in his days.
This still is far away from achieving the socialist mode of production where the workers become the planner and rulers of the economy to further unleash the productive forces.
Marxism is kind of like the chiropracty of economics. Just because Marx can explain everything and point out contradictions doesn't mean they are true.
QoL is still in an upward climb. Average lifetime working hours is still marching down. We've peaked out on literacy and child mortality and preventable diseases with available technology.
You have to ignore 120 years of intellectual progress on economics to still want to apply labor theory of value to problems. There may be a day when we can achieve some semblance of a "socialist" mode of production - but I can almost assure you it will not be from people following Marx's flawed analysis. It will be from people who understand either classical or keynesian economics, or whatever new understanding come from it, and apply them towards actual functional policies.
I mean, just look at actual literacy stats and you will find we have a ways to go on this. A frankly absurd number of people in the UK are functionally illiterate. Same in France.
Yet there are drug and mental health crises, and there are families whose quality of life hasn't improved since the last recessions. I don't believe that progress is so neatly linear, and the Hegelian philosophy behind Marx attempts to capture that, IMO.
Labor theory of value does have issues, but I don't think it can be so neatly dismissed either as alternatives appear to have vague criteria for what contributes to value.
Value being subjective and fluid is exactly what makes modern society function. I may value having lots of children. You may value not having lots of children. Expecting there to be an objective universal value on everything is a fool's errand.
I trade my time at work to sit at a comfy desk and type for money, and that is work. And I will negotiate for more time and money so that I may spend more time lifting heavy things at a gym. Funnily enough that is leisure and it costs me money. It is in the asymmetry of needs that we create excess value by working for each other taking care of the things they do not want to do for themselves.
Labor theory makes no sense in how people actually choose to go about their lives. Which is why modern economics is so focused on how to just maximise as much generic utility out of a market. And it is usually Marxists who are actually the most obsessed about counting up the little green slips of paper that don't mean anything.
You reference Hegel, but it is specifically his idea that progress is inevitable. Which is exactly why I reject Marx. Marx believed that making functioning plans was useless since progress was inevitable once unleashed. But Marx was a leech who counted on his friends for his subsistence and others to actually test his ideas. Progress is only made by intentional and planned efforts to deal with problems rather than just criticize and shake your fist at society.
> Marx believed that making functioning plans was useless since progress was inevitable once unleashed.
Marx believed that planning out the detailed structure of a future utopian society, in the tradition of Owen or Fourier, was useless. And he was right. Societies are not and have never been the product of intentional design: no individual has the necessary power, no group has the necessary agency. They're the accretion, year after year, of millions of independent agents doing the best they can with the constraints the past has imposed on them. We can adjust the constraints, to some extent, and maybe aim, very imprecisely, at some desired end state, but we don't get to skip straight there.
Okay, but this is not at all what Marx himself said. Marx was philosophically opposed in all of his writings to answering even the most basic questions about what a communist economy/government would look like. In his mind he was only proclaiming the inevitability of such a system. In fact, he regularly dismissed anyone who asked these types of questions as serving the bourgeoisie.
But it turns out that, after a socialist revolution, who is going to make the bread and who is going to distribute it is not a problem that will inevitably be solved.
> Okay, but this is not at all what Marx himself said. Marx was philosophically opposed in all of his writings to answering even the most basic questions about what a communist economy/government would look like. In his mind he was only proclaiming the inevitability of such a system.
No, the point is that he's not talking about a particular system. The famous soundbite from The German Ideology:
> Communism is for us not a state of affairs which is to be established, an ideal to which reality will have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence.
Communism, for Marx, is the thing that beats capitalism, and he's only willing to make claims about it that he thinks follow from that. He believes it will lack the features of capitalism that undermine its long term stability, and do a better job than capitalism of accomplishing the things that a mode of production needs to do to win out over others (namely, producing things), but anything more than that cannot be predicted decades-to-centuries out. Things will need to be administered, but they're not going to be administered by him, or in circumstances he can predict.
Consider feudalism. An educated Frenchman in 1700 could reasonably think that feudalism was on the way out, that it would probably mean the displacement of the aristocracy by the emerging bourgeoisie, that it would not have a patchwork legal system built out of a thousand years of accumulated hereditary agreements and local precedent, that it would professionalize government to some degree, that it would do a better job of maintaining a professional military, and so on. But they had no chance whatsoever of predicting the structure of the Federal Reserve, and it would be insane of them to claim otherwise.
Consider that Marx wasn't Marxist-Leninist although I think he was pro state. Anti-statist socialists like Kropotkin thought about some kind of decentralised planning. You could even have market as a distribution mechanism, but without capitalism through some variant of market socialism or market Anarchism.
> But it turns out that, after a socialist revolution, who is going to make the bread and who is going to distribute it is not a problem that will inevitably be solved.
Marx was, I think, of a very different mind about revolution than many of his later followers: I suspect that to Marx, a “socialist revolution” was more like the Industrial Revolution and less like the French (or, perhaps more to the point, Russian) Revolution.
Marx wasn't against providing concrete steps addressing coherent real issues adapted to the conditions in particular places (see the program for the German Communists that is often presented as an appendix to the Communist Manifesto). But the utopian end-state society was, in Marx’s view, rather far off.
This is exactly right, and Marx opposed revolutionary efforts in pre-industrial Russia (e.g. the Russian Revolution). He did advocate Russian support of revolution in Germany, but saw no use in revolution in pre-capitalist society.
> Marx believed that making functioning plans was useless since progress was inevitable
You're taking ideas out of your pants and putting on Marx's mouth. At least be honest and say you never read him and hate his ideas without knowing what they are.
I find the subjective argument too abstract for practical use. All the subjectivity in the world must come to head with reality and how it can be enforced in reality. I am of the opinion that logistics wins wars, and labor theory of value, with its flaws, is able to provide a sense of direction for me to act on. Maybe I can bet on an asymmetry of needs with someone wanting to raise a family with me if I was unemployed and they did all the work, but I have the impression that a partner would appreciate me being able to help with the work too.
Labor theory of value is incredibly easy to dismiss. Value is about what people will pay for things, not how much work they took to make. Bam there we go.
You just dismissed you incorrect idea of labor value theory. Go back to read about the subject. To "disprove" Marx you should at least read his damn book and show that you know what you're talking about.
this is a typical misinterpretation of the labor theory of value. it's not the silicon valley "I Am Adding Value" SaaS ideal.
the free market assigns the value created by laborers. it's as simple as that. the buyer wouldn't get this value in their life, at a price the market decided they pay, without the work of the laborer. the value wouldn't be created without the laborer, or any of the capital or tools that it took to create labor (since labor created the capital and the tools). much like machines, it's labor all the way down.
I didn't misinterpret shit. The amount of work something takes too create has very little to do with its value. Labor theory of value would be a joke if it wasn't so popular for some reason. Instead it's actively disinforming people
> it's labor all the way down
This is completely orthogonal to value. Sure things wouldn't exist without people to make them. That doesn't mean that the labor it takes to make something constitutes its value.
if you actually look at the inputs and outputs of entire industrial sectors, rather than individual firms, you generally find a very high correlation between the price of labor as input and the price out the output of that sector. like >96% for the uk as found by cockshott and cottrell in their 1995 paper
This kind of shallow dismissal could only be posted by someone who hasn’t spent much time thinking about economics, or thinking about why Marx remains one of the most relevant and influential theoreticians amongst people who do spend a lot of time thinking about economics.
For a start, Marx understood well that the price assigned to a commodity by a market and its value were often out of sync. If you’re confused about the difference between those things, think about Dogecoin as a particularly extreme example.
This kind of shallow dismissal of my shallow dismissal of a frankly idiotic idea that doesn't deserve a deeper dismissal could only be posted by someone who hasn't spent much time thinking about economics, or thinking about why Marx was popular not for his economic thoughts but for his sociological/political ones. Someone being popular doesn't make them right, but Marx was right about many things. Just not about labor theory of value.
> This kind of shallow dismissal of my shallow dismissal of a frankly idiotic idea that doesn't deserve a deeper dismissal
The labor theory of value was accepted wisdom prior to the late 19th century: it originates with Adam Smith and David Ricardo. It's wrong (or more accurately, not a good conceptual framework) but it's not obviously wrong, let alone "idiotic".
This is misleading. Adam Smith presented this as a possible solution to an economic paradox at the time. But later philosophers came up with much better solutions:
There's no reason to believe that Smith wouldn't have latched onto the much better solution. So being hell-bent on the incomplete answer from the 1700s is a unique peculiarity of Marxist theory.
> But later philosophers came up with much better solutions
Yes, later than both Smith and Marx. Marginalism didn't go mainstream until the 1890s, though the necessary pieces were there waiting to be assembled from about 1870.
How much is a glass of water worth? Should it change if it takes me 5 seconds or 5 years to procure? Using labor theory to assign value makes no sense and is not a workable model for anything for anything other than justifying Marx's own circular logic.
Marx discusses how skill (and factors like machinery, etc) factors into value in Capital vol 1. The idea isn't that any labor on any endeavor creates value at a constant rate across all individuals and all time.
Marx has some concept of "socially necessary" labor, but it doesn't really make sense because it wants to treat skill as some kind of simple multiplier as if we can assume that a modern doctor's labor is some simple multiple of a random medieval peasant's labor in diagnosing an illness, which is just a silly and oversimplified model.
Honestly it reminds me of like Marx's non-rigorous "eh whatever" approach to dividing by zero in his mathematical work. While one can define division by zero in non-standard analysis, that involves some actual rigor in how your treat it according to your definitions, not just shrugging your shoulders and doing it.
What you're getting at vis-a-vis highly skilled labor is known in Marxist economics as the labor reduction problem, and it's complicated (enough so that I wouldn't do it justice trying to elaborate the approaches in the time I have to respond). Marx died with it unsolved and it's a matter of discussion to this day. But you're conflating that problem with the concept of socially necessary labor, which is different and actually addresses the problem you posed (in Capital Vol 1, in the difficult early chapters). In order to produce value, the labor must be socially necessary, and the labor of any number of unskilled workers towards a highly complex problem (eg, treating a rare cancer) would not be socially necessary. It doesn't even have to be that complex. I don't have the skills necessary to make a wedding cake, and any attempt I make to do so would be so inept that it wouldn't be socially necessary labor.
Can't speak to the division by zero, but it doesn't come up in any of Marx important work. His mathematical manuscripts don't have any significant relationship to his work on political economy.
I mean, economics is a mathematical profession. It's hard for me to take his storytelling about things like the freedom of hunter-gatherers and such seriously when I know he wasn't rigorous in the things that are easier to check. Never mind the, err, implementation problems in basically every attempted revolution until somewhere around the point where the Nordic states found a way to subsidize it with resource extraction and found a voluntary version.
It strikes me as incurious to dismiss an entire field of thought because there were errors in a mathematical manuscript, especially when you clearly don't understand the fundamental concepts (I don't mean this as a dig. You just haven't learned them.). Marxism isn't the writings of a long dead guy in England in 1860. It's a living, breathing school of thought that's evolved significantly since then. What you're doing is akin to finding an error in Smith or Ricardo's [edit: unpublished manuscripts, not completed work] work (of which there were many) and using those errors to dismiss all of orthodox economics.
The revolutionary approaches have not succeeded thus far, granted. There is a branch of Marxism about revolution, but what we're talking about here is a description of capitalism. Marxist revolutionary activities have nothing to do with how potent that analysis is.
I spend a lot of time thinking about economics, and spend a lot of time surrounded by people who also spend a lot of time thinking about economics, being an economist. The labour theory of value, along with every other objective theory of value, was abandoned by economists more than 100 years ago, because it failed to explain how and why economic agents assign value to economic goods, which is what economists are interested in.
No it's not. For one, it can only assign values to things which are actually exchanged. When you look at things on the scale of states, this isn't always a possibility. You can't put the ISS on craigslist and see what it sells for.
Are you arguing that Germany is not a capitalist country? I was collectively speaking about the capitalist world.
> How can y'all be so damn certain you're the best in the world when five minutes worth of Googling is enough to completely destroy all your arguments?!
Uhhhh, maybe read the comments a bit more clearly before jumping in. Do you always just jump in on random threads to say Americans are dumb?
> Are you arguing that Germany is not a capitalist country? I was collectively speaking about the capitalist world.
Even then, assuming we're not just talking about the US, it's a stretch to say "we" peaked out. We have a lot to do before anyone can make that claim, the problem is that in most countries politicians have been bought off by rich elites to lower taxes and reduce public spending (which has been done especially to education as that's the easiest), so there is no tax base left to fund what needs to be done.
> Uhhhh, maybe read the comments a bit more clearly before jumping in. Do you always just jump in on random threads to say Americans are dumb?
Germany like many other Europeans would absolutely be considered a socialist country by most US standards (holding no distinction between socialism and social democracy).
This is a big part of the confusion, intentional as far as I can tell, generated by people trying to eliminate taxed, regulations, and worker protections in that they can flexibly do things like point out how Sweden is wonderful and has no minimum wage, so we should do that too, when the reality is inverted with successful universal collective bargaining guaranteeing everyone much better wages -- something that would probably get the national guard rolled out if US workers pushed for presently.
Specifically for the US and Germany literacy results, I see a difference between these and past methods of measuring literacy. In the first link, the most basic sample question required the user to interpret a simple table. The second and third level questions required users to navigate websites, including a task of finding the correct link to navigate to the correct page of a site.
I think this establishes a great point that we have an ever changing society with growing demands, where we now need to consider much more than just reading words. Internet literacy is a huge barrier, and it’s great to see it getting measured and accounted for as countries continue to adapt education to the changing times.
>You have to ignore 120 years of intellectual progress on economics to still want to apply labor theory of value to problems. There may be a day when we can achieve some semblance of a "socialist" mode of production
What an absolute load of crap. Economics as a whole is barely a science, at best a toy, and that multiple pathways exist is not an indictment of any theory. Marx's observations hold true all these years after, alongside the progress we've had.
You clowns would take a system as complex as, oh, simply the whole of human activity and try to reduce it to a few simple laws. Sorry, despite what you learned online, "supply and demand" is not a fundamental law of the universe. This is not physics. There are no simple answers. There aren't even proper answers. Every school of economics holds on barely by a thread. "Assuming a rational actor" is the "assume a spherical cow in a vacuum" of liberal economics.
I do not agree with the upper comment that economy is not a science. It is just a human science, where you could have different schools of thought based on different philosophies. But praxeology is indeed an example of something that is not science, as it rejects the scientific method and the empirism.
If economics is a science, how do you run an experiment?
Let’s say you want to see how phenomenon X scales as a function of population, and create a model X(p)
How do you set up N identical scenarios and, ceteris paribus, vary the population? You cannot.
Two separate nations are distinct systems. Setting up 2 identical factories next door, one with 100 staff and one with 1000 staff would be a monumental waste of effort, and what if the geographical separation, or airflow, or cloud cover, or… affected the experiment?
Let’s say you run a single economic experiment. How do you reproduce it? How does your counterpart reproduce it?
You do not create experiments. You create models that try to explain the world and check your model predictions and what happens in the world. When the two disagree, you update the model and try to explain what went wrong. As you cannot make experiments to check, it is inevitable that you will end with more than one model for different school of thoughts. As is in all academic disciplines that are part of humanities. This is not like in the natural sciences where you can agree with a single model. Nonetheless, this is better than having no empirism or scientific method at all and having models built based on some logical axioms treated as the ultimate truth, as some unscientific parts of the economy do.
Moreover, in the natural sciences, you also cannot perform experiments for some parts of cosmology, for example. Nonetheless, you keep creating models in the hope that they would allow you to discover and predict more things and to interpret better the universe. If they do, your model clearly shows some benefits, even if in the future with more powerful technology, it could be disproved. Economy do not need to be so different than this.
>Nonetheless, this is better than having no empiricism or scientific method at all and having models built based on some logical axioms treated as the ultimate truth
Like theories built on mathematics or logic?
Don’t get me wrong, I’m not shilling Austrian economics and I disagree with most assumptions of pure rationality, but I think an axiomatic approach to human decision making is not necessarily a bad thing. I’m sure preferences and biases have some mechanism we can quantify and explain from first principles.
It seems the many of the only people who really read and understood Marx looked at it and said “well ok, I’m going to be one of the capitalists, and this is actually good.”
There are actually planned economies in our system, Einstein would have been shocked by Walmart. I recommend “People’s Republic of Walmart” by Phillips and Rozworski if you want to read about it.
The labor theory of value is bogus, though. A doctor doing work on their own car and a mechanic diagnosing their own illness are both worse off than if they exchange their labor with each other, even if Marxist thought wants to equate their labors.
That's not quite right, there are several things Marx offerred that could be tested.
Such as, the most capitalist countries would be the first to fall to communism. Except they didn't the only countries that have ever fallen to communism were Monarchies ruled by an absolute divine monarch.
Or after a revolution, the institutions of religion and the state would wither away. Which Russia is getting close to going back to a sort of Theocratic-Facism, and the CCP may not be quite yet ready to dissolve.
I could bust out my old copy of the communist manifesto to check any more predictions he made, but at the end of the day Marx did offer falsifiable theories, it's just that it turns out anywhere Marxism could be falsified it was. If only he hadn't tied it to something as concrete and objective as economics and instead something more relative and cultural.....
> the only countries that have ever fallen to communism were Monarchies ruled by an absolute divine monarch.
If anyone is wondering why US/corporate empire spent so much blood & treasure, political capital, and moral high ground on sabotage & slaughter in places like Vietnam, Guatemala, and Indonesia - here's the answer. It was due to mortal fear that one of these third world socialist/communist popular movements might actually succeed. (That and plain old short-term business interests)
See: The Jakarta Method, The Devils Chessboard, The Brothers, etc.
> Such as, the most capitalist countries would be the first to fall to communism
He has so far been right in that, insofar as there is any progress in that direction, in that the progress from the capitalism Marx wrote about to the modern mixed economy in the advanced economies is an evolution toward communism implementing several of the elements of the program Marx laid out for the early stages of such a transition. The Leninist attempt to bypass market capitalism on the road to communism consistently, everywhere attempted, either got stuck in state capitalism durably, got stuck there until collapsing totally, or migrated from there toward market capitalism, failing entirely to bypass it on the road to communism.
Marx was talking about where progress toward communism would happen, not where people calling themselves Communists would succeed in taking power and fail to make any more progress toward acheiving communism than, in the best cases, getting a bit closer to where thr capitalist economies of Marx’s time were starting from.
- Why are you mentioning Russia? You do realize they've been capitalist for 30 years now, and that it's transformation to a more fascist state happened in those decades?
- Do you think Cuba was a monarchy, ruled by king Batista, before it fell to communism?
> anywhere Marxism could be falsified it was
Ironically, this is a falsifiable statement. One of the key predictions of Marx is that under capitalism, wealth and property would be concentrated in an increasingly smaller group over time. I would not consider that one as having been falsified.
> I could bust out my old copy of the communist manifesto to check any more predictions he made
That's not a great source for predictions, tbh. It's more of a pamphlet aimed at workers, not so much a theoretical analysis of capitalism or communism. In all fairness though, the books you'd have to read for those predictions are super long and dry, and honestly who has time for that?
It's a lot easier to argue against Marx than against Marxism, just as it's a lot easier to argue against Darwin than evolution. Marxism as a school of thought has evolved quite a bit since Marx, who any non-crank would admit was wrong about a host of things.
Marxism is largely descriptive, and so many people claim that it cannot be falsified. But there are ways you could falsify Marxism:
- Capitalism could mediate class conflict out of existence
- Capitalism could grow indefinitely without producing business crises
- Wages across the world could become roughly equal in terms of purchasing power, regardless of the country, without an economic crisis.
Now, these would have to happen in the actually existing world, and as such I can see the resistance to labeling them as falsifiable. So how would you falsify orthodox economics?
I thought value wasn't price? The way to salvage labor theory is really to turn it into macroeconomics where the labor value is amortized, which does restrict it as an applicable theory.
Labor Theory of Value: The value of a commodity can be objectively measured by the hours of socially necessary labor required to produce it.
So the "value" of a commodity is fixed at the time of production.
But what is "value"?
It's not the utility ("use value").
It's not the market price, which changes over time.
Marx and others try to map "value" to price (Transformation problem) and try to measure exploitation of workers using profits based on selling prices, so there's an attempt to consider this "value" as the correct, instrinsic worth of a commodity.
Consider a brand-new in-the-box iPhone. It has a fixed labor-theory-value, yet its price and worth go down every year as new models come out.
How does labor theory of value help to understand this?
Mainstream economists had moved to a subjective value model even before Marx's death. See the "Marginal Revolution".
This explains that the value of the old model iPhone is reduced because it is less useful than competing newer models, reducing the demand for the older model.
Yet according to labor theory of value, its value is determined by its production.
Thus "value" is best understood as a measure of a cost of production, not as a measure of the "worth" of a commodity.
> An hour of labor can produce wildly different amounts of value with different tasks, skill, materials, and especially capital equipment.
This is what I mean when I say "you should understand the labor theory of value before critiquing it." Capital goods are labor. They represent the accumulated labor required to produce them. If producing something requires a large amount of capital goods, then the labor that went into producing those capital goods is incorporated into the value of the product. You can apply a similar argument to acquired skills, etc.
Yes, "dead labor" if I recall Marx's term, embodied in the capital good - the useful part is the recognition that capital is simply the saved surplus value from previous work, applied to magnify current work.
But trying to apply the labor-value this way just further illustrates the mistake in asserting you can attribute value to the hours of labor in a finished good.
If no shovel is available, the value of a hole is the labor required to dig it with bare hands.
But if shovels are available, the value of the hole is the value of the labor of digging the hole plus the fraction of the labor embodied in the shovel that was consumed in digging the hole.
But if you introduce power tools, the value of the hole is the fraction of the labor of the construction and maintenance of the power tool that was consumed, plus the labor of the operator.
There is no rational way to form an equivalence of these things, except if you consider them costs of the hole, rather than the value of the hole.
Those different "hours of labor" whether current or past have different values based on how they are applied (utility value) rather than just "labor hours".
And then as a bonus, the hole has the same utility value regardless of how it was dug.
I think we agree that labor is a source of value - discovering, creating, transforming inputs to add value - and capital is surplus value from previous labor.
I think we disagree that socially necessary hours of labor is a useful "objective measure" of the value of the product.
I think too many variables have to be hand-waved away by that "socially necessary" qualifier, such that it completely hides any value (ahem) of the measure.
We've identified that we have to qualify socially necessary labor hours by
- average skill and diligence of the workers currently available in the region
- efficiency of the production processes for this item and all capital goods and materials used in production
- level of technological advancement for all of the above
- availability of competing products
That's a very abstract measure casually described as hours of labor, and seems to have little descriptive power, much less predictive power to help decide what will be worth producing. Frankly, I'm not sure if it can be calculated at all for any commercial product.
"The value of a commodity can be objectively measured by the hours of socially necessary labor required to produce it."
Can anyone cite the hours of socially necessary labor required to produce any single product? (See "I, pencil" for an example of the complexity)
Agree on the first three of your four bullet points. You're kinda missing the point on that last one: if you can correctly identify the value of the labor (again, including capital goods) that go into making a product, then what you have is the minimum value that a product will sell for in the long term. And, importantly, in a free market the price of the good should tend to be around that value. I kind of alluded to it in my previous post but didn't quite spell it out completely I think. Effectively, it is the value at which you get zero profit from the sale.
All else being equal, competitors will not be able to go any lower either (until and unless they gain some technical advantage) without selling at a loss. Exactly as you point out: there are various factors that can reduce that value - Marx points this out as well of course and I think it's sort of meant to be among the main contributions capitalism makes to historical economic development. But, for any interval of time over which there are no major technical advancements in the industry in question, in theory at least (i.e. in a more-or-less "pure" market with rigorous competition) the price of the product on the market will approach the point at which profit is minimized i.e. the value of the labor required to produce the good.
Looked at another way: the real value of capital goods (in an economic sense, anyway) is not in the production they enable, but that they allow for more efficient use of future labor time. If, and only if, the savings a capital good provides in labor time to produce a product, is greater than the value in labor required to produce the capital good in the first place, is it "worthwhile" to produce the capital good and put it to use.
You might hire someone with a sophisticated ditch-digging machine to dig your ditches for you, but would you still do it if you knew that producing that one ditch-digging machine took 500 men working 10-hour days for a month? And it was only good for digging 10 miles of ditches before breaking? Probably not, and the labor theory of value does a good job explaining why, IMO.
All that said, of course that's not at all how our market functions especially nowadays, and there is a Marxist approach to analyzing that as well - but that's out of scope of this thread.
There is the notion of "socially-necessary labor" and the amount of that required to produce a thing does depend on the capital goods available to the people doing the work (that is, the technological sophistication and level of economic development). The expectation is that it will go down the higher the economic development. This can even make things that previously weren't worth doing before, worth doing now, because their value in labor is finally less than their use value.
In principle market forces are supposed to drive down prices, are they not? Absent collusion and corruption, etc., we would expect the price of a good to be very close to the cost to produce it. This is what pro-capitalist, pro-market economists keep telling us, anyway - and that is at least the theory. But that cost to produce it is exactly the capital used in the production plus the labor applied to that capital. But if capital is just the product of labor, then in fact the cost to produce the item - and thus the price I will expect to pay in a competitive market, does in fact correlate quite well with the labor that goes into production.
I believe you’re mudding the argument with unrelated statements I didn’t make: brain surgeons working on a farm.
It’s simply: a worker who participates in the productive chain with labor can’t benefit from the value added by said labor. If thousands of iPhone are assembled by the worker, but said worker can’t afford even ONE iPhone, implicitly this means we value the worker 1/100000 of an iPhone.
If you think this is fair and proportional compensation, ok, but that’s an opinion. It’s not a natural law. I don’t think wage stagnation and pornographic profit margins are fair.
We may have more programs by volume but the barriers to entry and weird-ass financial requirements to keep benefits often drives the outcomes those programs are notionally intended to address. The social safety net today is significantly less functional than it was 30 years ago.
> A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child.
Sometimes, the needs of the community are such that the work to fulfill those needs is distasteful to most people. Until such time as such jobs can genuinely be completely roboticized, to whom should janitorial work be distributed? Garbage collection? Plumbing out backed-up toilets? Going out in the freezing cold to plow snow from the roads? Does anyone seriously believe that such work would be happily accepted full-time by anyone over, say, an office job, because why, they'll be socially celebrated for it? Or that it would be politically tenable to draft the wealthy and middle-class to occasionally take shifts for these jobs, as if they were a new kind of jury duty?
Where I’m from (in California) the garbage collection is done by a private company, and it looks like a pretty nice job if you’re physically fit. And it’s not looked down on at all, people there know what hauling their own garbage is like.
Snow removal is very high status and pretty, er, cool because of the big machines involved, and its government work with the pay and benefits you’d expect. Probably only the postmaster is as universally appreciated up there.
I’d happily drive the snowplow if it paid half what a software job pays. The only downside is you can’t really drink in the winter.
Plumbing is very entrepreneurial, especially the emergency “unblock my pipe” kind. That person could easily be making more than you and I.
So while surely there are some jobs that are miserable, many of them connected to factory farming of meat, I don’t think “office job” is automatically enticing to everyone. And there is still plenty of social status in necessary jobs, if done in an actual community.
You're making my point. Today, under a capitalist economy, these undesirable jobs can be made desirable because of privatization or high or stable income that is offered as renumeration. But under a socialist system that simply assigns these jobs to people, "according to society's needs", with no other distinction offered, then you will find few takers.
They're not exactly making your point. Today those incentives are required because individuals are raised to glorify wealth and success. It doesn't stand to reason that a different environment wouldn't lead to different results.
In Japan students are expected to clean their schools. It's not looked down upon; everyone has a shared responsibility for spaces they utilize. Cultivating that kind of environment leads to a cleaner society in general. One could easily imagine rotating janitorial/firefighter/etc shifts for able-bodied citizens the way we expect people to answer jury summons.
There are ways to motivate people beyond the purely economic, even if it runs counter to our upbringing.
> Today those incentives are required because individuals are raised to glorify wealth and success.
Nobody becomes a janitor to become wealthy or successful, so wealth and success are not what motivates people today to become janitors.
> Japan
In the army, we were required to clean our own barracks; the janitorial work wasn't contracted out. Shared spaces were on a rotating shift. It still sucked. Believe me, nobody was volunteering for extra shifts of the shared spaces.
What you're getting wrong is thinking that socialism would assign random jobs to random people, or somethng alike. Instead, a socialist system would probably consist of self-managed work where the benefit would be helping your community and getting to live in such a community where everyone works towards the benefit of the community. The surplus value of the work you do, and the work you need to survive like food production and distribution, would be distributed among the workers, not the owners.
My argument is that society has some needs that are unfulfillable if you simply expect that ordinary people will pick up the slack, because it's the kind of work that people find distasteful.
Consider when garbage collection worker unions go on strike, and garbage starts to pile up and up because it's no longer being hauled away. Surely people are motivated to solve that problem because having piles of trash everywhere is disgusting. Surely people would be respected by their neighbors for solving the problem. But does anyone lift a finger and say, I'm happy to volunteer my time taking my trash and my neighbors' trash to the dump so that our streets will be clean? Does anyone say, oh I wish I could do that for myself and my neighbors', and the only reason I'm not is because I respect the union's strike?
It's the same thing in companies, by the way. There's no such real thing as self-managed teams. Anywhere that tries, if you inspect the work put out by those teams, you will almost invariably find that people have cut corners on the aspects of the job which they think are boring or stupid or otherwise distasteful. It is incredibly rare to find people who have the integrity to not only have a standard but to hold themselves to that standard.
There have been and still are socialist economies. Jobs pay differently and people choose them. Central planning incentivises necessary but unpleasant jobs.
The main feature is that workers collectively run workplaces, municipalities, regions and ultimately the state. The rest of the details are up to said workers to work out among themselves.
No. Fundamentally, in a socialist system your compensation is relative to your need, not to the value of the task at hand, regardless of whether that compensation is cash, vacation days, or something else.
Who decides whether there is need for a receptionist that watches TV all day and occasionally yells at teenagers smoking in the hall? How is such job compensated? How do you measure consequences if such job disappears?
What people would want to do might look different if you took away all the bullshit jobs and jobs tied to peddling endless consumption on people. Both my Grandfathers were janitors, no one looked down on them, they enjoyed their jobs and took pride in it, they both got paid a decent enough for lower-middle-class wage.
Get rid of all the jobs that don't directly benefit your community and what people would want to do for their community would change drastically.
I'm not saying janitorial work isn't an honest profession, I'm saying nobody prefers janitorial work. Nobody in their childhood dreams of growing up and becoming a janitor. Your grandfathers can at the same time be someone who found dignity in that work and made the best of the hand they were dealt, and at the same time be someone who would prefer a different career path had a genuine choice been offered to them.
I think you overestimate how much "profession" plays a role here. I think people only really care about doing honest and worthwhile work. No one have any idea what they "want" to do in 5 to 10 years.
The problem that I see with work today is that the value from my work is so hard to derive that I can't help but see it as pointless. I mean what value have I generated from writing a bunch of code that is used to do some analysis? How is my company/industry providing value to society again?
I think IF people find genuine satisfaction from their work, then they are more likely to think that it is their "dream" profession. That is to say that what the profession is doesn't really matter as much as what the person think of their work, whatever that is.
For instance, if janitors is a highly respected and well paying job, would people still think less of sweeping floors and flushing toilets?
> I mean what value have I generated from writing a bunch of code that is used to do some analysis? How is my company/industry providing value to society again?
Does somebody pay money for your company/industry's product? If so then they're getting more value than the money they paid (unless they were coerced somehow into buying the product). All companies solve a problem for somebody, and indeed one of the reasons why a fully planned economy would be inefficient is because no planner can fully intuit all the problems in society which need to be solved (since the only way that question is not political is if it's reduced to the simple rubric of whether or not someone will pay money for a solution).
> For instance, if janitors is a highly respected and well paying job, would people still think less of sweeping floors and flushing toilets?
You're presuming that primary job satisfaction comes from external social validation. Time and time again we see that in cases where you would think that is the case, e.g. doctors who are well respected by society, children who are pushed into those careers by their parents can sometimes end up really unhappy because the internal motivation was never there, and many people who end up in that situation end up quitting and switching careers because life is too short to be in a career you hate just to make your parents happy.
Nobody is naturally internally motivated to pick up other people's shit. Societies with high levels of public cleanliness are that way because people in those societies clean up after themselves in public, not because people elect to spend their free time on a personal crusade to clean up after others.
I mean, in America? Right now? Maybe not... okay definitely not but I ask the same thing about Higher-taxes for the betterment of all. No way it would happen here - the people wouldn't accept it but it does work elsewhere and the people there are, by the ways we currently measure, way happier than we are.
I think a culture that teaches the value of community and does a great deal to impart on the youth that we have the nice, comfortable lives (with arguably more freedom) is because we share those burdens and its part of our civic duty... that its patriotic to do so. I could see that working out.
Plus how crazy is it to think that cultures and societies did operate similarly in the past, pre-industrialization? Isn't this the basis for the family unit?
I don't disagree, but you need to be very careful how you define community. A community that is defined by who is included nearly always cannot escape an implicit declaration of who is excluded, and a community which includes everybody is no community at all. When you have an in-group and an out-group, you sow the early seeds of conflict and discord.
> Isn't this the basis for the family unit?
No, this is the basis for the tribe, with similar concerns about intertribal conflict. Modern societies enjoy such peace and improved quality-of-life outcomes precisely because the state largely subsumes these tribes, and where the state is unsuccessful at doing so (e.g. religious affiliation), has at least succeeded in eliminating much of the worst of intertribal conflict within the state's sphere of control.
> but you need to be very careful how you define community. A community that is defined by who is included nearly always cannot escape an implicit declaration of who is excluded, and a community which includes everybody is no community at all. When you have an in-group and an out-group, you sow the early seeds of conflict and discord.
Okay but, as far as I can read this its just universally true? Respectfully, you're not making the case for it being impossible and you're pointing to something that literally exists now. If it's hard, cool, I'm not afraid of difficult challenges, I honestly believe most people aren't afraid either.
> No, this is the basis for the tribe, with similar concerns about intertribal conflict.
That's fine, a bigger circle of people is exactly why I believe that your premise I was originally responding to doesn't hold up to scrutiny. I think in the present day people are able to operate in several different tribes that are not in serious struggle with one another and there's nothing concrete to point to (as far as I know) that there's an upper limit?
In another comment you mention that "No one would choose to be a Janitor" and I think that is rooted in "At the snap of the finger we'd be socialist and that would cause chaos" kind of thinking. "Being a Janitor" is only a "bad thing" due to our present culture. I certainly don't think it's less important that someone is a Janitor as opposed to a Lawyer or something - The reason people "Don't" want to be Janitors right now is less to do with 'the job' and whatever stereotypes you have in your head but because it's one of the jobs that doesn't pay enough for someone to live comfortably. I don't think its a huge leap to believe that if you could live comfortably and with dignity as a Janitor, people would absolutely do it.
> you're not making the case for it being impossible and you're pointing to something that literally exists now. If it's hard, cool, I'm not afraid of difficult challenges, I honestly believe most people aren't afraid either.
I'm not making the case for it being impossible not because I believe it to be possible but because I'm coming from a place of humility that I may be wrong about it being impossible, because I honestly don't know all the relevant factors. But certainly I'm not familiar with any cases where it worked.
> I certainly don't think it's less important that someone is a Janitor as opposed to a Lawyer or something
Rationally, I agree with you here...
> The reason people "Don't" want to be Janitors right now is less to do with 'the job' and whatever stereotypes you have in your head but because it's one of the jobs that doesn't pay enough for someone to live comfortably.
... but here I disagree. Cleaning up after strangers is demeaning work, and not because of suicidal moirés but on an evolutionary level. You spread your shit to mark your territory, because the smell of shit told people to go away. Being forced to hold your nose and clean it up is not what marks a leader, it is what marks someone who has no other choice.
I think the people who volunteer to clean up their community beach, river, stream, city street would disagree with you. There's enough pushback to your current position that I can even think of memes that talk about this very thing
Also, this appeal to nature really doesn't hold up to scrutiny either. We do things that "go against our evolutionary nature" all the time. For example: None of us spread our shit anywhere. Or how, due to current culture and city design, people largely live isolated physically from larger communities. The list goes on.
The dynamics of group volunteering are different. When you get together with people to clean up a beach, the cleanup is the proximate reason you're there, but really you're there to meet up with others and socialize, with attendant interests like virtue-signaling and the like.
Go to any cleanup event like that and ask how many people do it by themselves, whether for fun or from a sense of moral duty, when there is nobody else to see them do it or to do it with them. Certainly there is no storage of places that need to be cleaned up, and would benefit by the efforts of individuals.
In this thread you've said both that people won't do 'unsavory' work, like cleaning, for social accolades but also that the people who do volunteer to clean up public spaces do it for social accolades (Virtue signaling)
I'm not going to pretend to know the motivations of all people who clean up beaches but it is unlikely that the overwhelming majority do it simply for clout farming. People are more than one thing. Regardless they are just one example of so many examples of good public work that people do right now - in a culture that I would argue does not meaningfully incentivize this behavior. I don't think whether or not people do it when they are alone is relevant here. We're literally arguing about whether people would in a different culture, not the selfish one we currently occupy. I think a society like that is not only possible but necessary.
But anyway, last thing I'll say is that I get the sense that your view is more informed by a pessimism about "how people are" - and that how they are is concrete and unchanging - rather than about data or thinking more holistically.
That's an upper-limit for social relationships not signing on to things conceptually - for example: Taxes. We know that our taxes go towards making things for all ~350 million of us (USA) or however populous your country and we're capable of recognizing that as a good thing. Or, at the very least, a necessary evil?
Same problem as communism, no? "We'll need a preemptive stage where we have a few guys, "the party", calling all the shots for the entire population, but once we get things straightened out we'll return the power to the worker, pinky swear"
Unless you go to explicitly authoritatian circles most communists (atleast the western ones I interact with) are explicitly against so-called Vanguard parties. A hypothetical communist revolution can be a slow transition without needing an authoritarian party to rule foe the course of it. Autocrats don't really want to give up their power.
Another 30 years of wage stagnation, rising income inequality, and shared prosperity running on empty and the average Joe will be willing to give much shadier characters than "the party" a try.
Human social structures don't have to concentrate power, though. At its best, that's the goal of the socialist project. Noam Chomsky makes the spicy take of calling the USSR "state capitalism" for precisly the reason that it is a concentration of power. He argues that the USSR largely just replaced capitalists with the state, but the power imbalance was not significantly changed.
It's not spicy, just silly. Using citizens buying things as the way to flow demand and value through companies that anyone can set up is about as far from power concentration as you can get.
Economics is not separate from politics. Capital compoubds exponentially and extremely unequally as a natural consequence of the free market, and that capital then has power over all of society.
Capital does not compound exponentially. It goes down as well as up, sometimes catastrophically. And what power does it have over society? It's just a way of measuring value. What is the actual power? Purchasing power?
Capital has to compound exponentially on aggregate, because if there is no return on capital, there is no reason to make new capital, and production grinds to a halt. So if it has to grow on aggregate, the fact it sometimes go down merely increases concentration of wealth, as it's then at a discount for those who have greater means.
Capital has power over society because society is reliant on material production. Being able to grant someone enough money that they no longer ever need to work (or merely enough for them to have a decent livelihood) is significant power over them and motivates them to do what you want. You can then use this kind of power over the media, politicians, etc..., and you can struggle to have the rules be to your benefit.
> Capital has to compound exponentially on aggregate, because if there is no return on capital, there is no reason to make new capital, and production grinds to a halt
There is no making new capital, except when governments do it. What you're citing isn't an iron law that forces capital to compound. Investment portfolios compound on average, because smart people pick companies that are doing really useful things (i.e. things people want to pay for) to invest in. But production doesn't stop when that doesn't happen for a company. It also doesn't happen for every investor.
> Capital has power over society because society is reliant on material production. Being able to grant someone enough money that they no longer ever need to work (or merely enough for them to have a decent livelihood) is significant power over them and motivates them to do what you want. You can then use this kind of power over the media, politicians, etc..., and you can struggle to have the rules be to your benefit.
There are far more direct and bad ways to have power and grant people easy lives. Being a noble in a 14th century court, or being in the PolitBuro living the easy life while millions starve in a socialist country are far worse outcomes. Yes, politicians are bribeable (that's why putting less power into government is a good idea) and media is bribeable (that's why working hard on instilling critical thinking into their children is one of the most important duties of a parent), and it all will be far from perfect.
But - as is often the case with such discussions - comparing a system like capitalism with a perfect world that magically has no power and infinite progress is just a fantasy. In reality, rewarding people who do things we want them to do is a good idea. If Netflix has stuff I don't want to watch any more, or breaks for a month, I unsubscribe. If my local government does a terrible job for a year, I keep paying or go to prison. Which of these involves more power, and which involves continued excellent service in exchange for a reward?
No. Because the power just concentrates in the Corporation. And when they become big enough with enough power, then they become the state. If they need roads or towns the build them and run them.
It's a sweeping take to say that everything Chomsky has said is wrong or immoral.
Fwiw, for anyone reading along, Chomsky didn't coin the term "state capitalism" and he was not the first to apply it to the USSR. Lenin himself actually uses the term to describe the USSR, seeing it as a necessary transitional step from (normal) capitalism to a socialist system:
"Reality tells us that state capitalism would be a step forward. If in a small space of time we could achieve state capitalism, that would be a victory."
And I'm of the opinion that the beginnings of the USSR, led by Lenin, were much more idealistic than what it would quickly become. Generally, it's the anarchists and libertarian sociliasts who are using the term disparagingly against a USSR that does not live up to their ideals. And, of course, Noam Chomksy is using the term "state capitalism" to describe a USSR that is much later in its history, or a USSR that is a thing of the past.
70+ years later and I don't believe it's possible to transition from (normal) capitalism to a socialist system without falling into "state capitalism" precisely because human social structures <generally> concentrate power. I guess I'll believe it when I see it.
I believe that the real answer lies in small socialistic mutual aid organizations, similar to the kinds of ethnic immigrant organizations that were formed in the US in the first half of the 20th century.
The radical Russian philosopher-aristocrat Kripotkin advocated for a wholesale government-social system based on the mutual aid or cooperative concept after spending time in poor, remote Russian villages as a young man. His takeaway: despite their rough situations, these people were happy and hopeful because they supported each other.
In the US, ethnic mutual aid organizations operated as clubs similar to a labor union or church by having regular gatherings, fundraisers, and social events. They remained viable by charging dues (on top of fundraising through events) to support the meeting facility and administration, and by operating a separate “insurance” payment to cover the membership if they ran into hard times, e.g. death of wage earner.
In short: For social support systems to be successful, I think it’s best to think small, local and shared culture and/or values. It has worked before.
You may like Marta Harnecker's "A World to Build: New Paths Toward Twenty-first Century Socialism." She outlines a vision that I resonated with a lot, but it is a little hard to put a neat label on. She comes from a Marxist background and usually frames her vision in such terms, but she frequently emphasizes the importance of decentralizing systems, and the importance of pushing power down towards the local levels as much as possible ("cities" are not local enough, for example, and she outlines a systems of communes that organize at something more like the neighborhood level). So there's still some level of national organization, but the goal is for ordinary people to have as much influence over that process as possible and to move decisions away from national levels down to more local levels.
> It's a sweeping take to say that everything Chomsky has said is wrong or immoral.
A statement can be both sweeping and largely true. We need to stop giving academics undeserved moral authority. Chomsky is a prime example of someone who speaks far beyond the boundaries of what he understands and advocates for immoral, destructive, and harmful policies and ideas.
> Fwiw, for anyone reading along, Chomsky didn't coin the term "state capitalism" and he was not the first to apply it to the USSR. Lenin himself actually uses the term to describe the USSR, seeing it as a necessary transitional step from (normal) capitalism to a socialist system:
This isn't surprising. as Marx defined it himself, socialism is communism as enforced by the government, meaning, the government seizes control of everything and runs everything. So "state capitalism" just means the existing businesses are now repossessed by the state.
> And I'm of the opinion that the beginnings of the USSR, led by Lenin, were much more idealistic than what it would quickly become.
Idealism is irrelevant. Marxism is a tool for causing people to be discontent and eventually revolt in a bloody revolution, and, so The USSR got exactly this, and so did China. In fact, Mao specifically used the "idealists", his Red Guard, to further his agenda, and, once he took power, he simply killed or imprisoned them all.
Marxism is an entirely failed ideology, as is socialism. All it can do is destroy; it has no vision for building anything of value. That we have to relearn this lesson is a damning indictment to our inability to transmit true knowledge and morality effectively to the rising generations.
> Chomsky is a prime example of someone who speaks far beyond the boundaries of what he understands and advocates for immoral, destructive, and harmful policies and ideas.
Quite a statement, care to elaborate? I’d be very interested in hearing of his “immoral” policies. With a bit of squinting this just reads as something “a corporation would say”
He praised Hugo Chávez, was a Cambodian genocide denialist, dismissed the eyewitness testimony of its refugees as "distortions", and praised Mao's moronic policies shortly after they caused the deadliest famine in human history.
> Lenin himself actually uses the term to describe the USSR, seeing it as a necessary transitional step from (normal) capitalism to a socialist system:
More accurately, from the actual existing system in the territories which became the Soviet Union, which were not a developed capitalist system (the prinary point of departure in Leninism from Marxism is bypassing market capitalist development as a prerequisite).
> Noam Chomksy is using the term "state capitalism" to describe a USSR that is much later in its history, or a USSR that is a thing of the past.
Its a fairly standard critique, which Chomsky did not originate, among non-Leninist socialists that Leninism and similar systems get stuck in state capitalism, even if the intent might notionally be to be transitional, in practice it never is (except in things like the Chinese example, where the transition is to not-exclusively-state capitalism, rather than something more like socialism.)
Moreover, capitalism is the least game-able of all systems, because it presumes that everyone is trying to game it. In practice there will be some structural inefficiencies and failures, but at least it starts from somewhere that is difficult to game.
No capitalism in itself is not the least game-able. It entirely depends on what flavor of it is in discussion. Free-market capitalism is inherently power centralizing. As a result, you need to ensure government is enforcing market competition.
Every actor is looking for a way to avoid market competition. Every time you hear a company discuss building a moat, that is a company that doesn't want to compete in a market and is actively working against the benefits of capitalism. Every time you see a monopoly, it is again a marketplace working against the benefits of capitalism (i.e. market competition).
At all times the government must strongly and actively maintain market competition or capitalism simply eats itself.
> Free-market capitalism is inherently power centralizing
I understand the argument you're making, but I don't think these are the words to use to do it, makes it more confusing, and you're glossing over some thorny issues. One could just as easily and more accurately say "power is inherently power centralizing".
I assume you are equating "free-markets" with "laissez-faire" markets which I don't think is accurate, else why would we separate the two concepts? Better to use the term "perfect market capitalism" (essentially markets where no player has the power to affect prices) and then specify market imperfections and failures as the cause of "inherent flaws" and worthy of regulation.
markets don't eat themselves, participants with power eat them.
But we also need to understand the difficulty of regulation. Keeping this brief thru a lot of hand waving and overgeneralization, Microsoft monopolized the personal computer market in the 1990's, and made buckets of money doing it, but they were not able to then leverage that into enduring monopolies in (the internet and) cell phones and cloud services, which together supplanted the personal computer as "what was popular" for personal information and communication. Would an evolving government regulatory regime applied to Microsoft have been able to create a better outcome in the same time frame without stifling industry than did what Schumpeter called the "creative destruction" of progress through free market forces? (yes I could word that more and better, but I want to hit reply and be done, so hopefully my point is not lost.)
When you talk about "free markets" failing, you feed the idea that socialism is a good idea, which is a serious baby/bathwater problem. Better that people learn more about perfect markets.
Thanks for the reply - Although I think you still may be missing my key point. I'll be brief, hopefully it comes across not as rude but as more direct.
"Power is inherently power centralizing" - we both agree that that is the fundamental issue.
"Laissez-faire" in any practical sense is worthless. No-one should reasonably in this day an age be advocating for essentially anarcho-capitalism or an adjacent laissez-faire derivative thereof. People do, I think it's incredibly naive - but you appear to be in agreement so we'll move on. We expect any form of state sponsored capitalism to enforce it's main benefits (of which I argue one of the most important keys is actual market competition).
> market's don't eat themselves, participants with power eat them.
Yes and the default state of any market is for there to be power imbalances. (it's almost impossible to have markets without them). And since power imbalances are in practice inherent in markets, and participants are what constitute a market, it is correct to say that "markets eat themselves". To contradict this is to either find a market without power imbalances (essentially only exists in theory), or find a market without participants (clearly a market not relevant for our purposes).
Since participants in markets are continuously trying to consume the market there must be a continuous countervailing force to prevent this. That is my thesis.
> When you talk about "free markets" failing, you feed the idea that socialism is a good idea, which is a serious baby/bathwater problem.
This is a terrible line of reasoning. It is essentially a head-in-the-sand defense. Essentially saying we shouldn't talk about the failure of free markets because by acknowledging their shortcomings when people look at all the different possible ways to improve it and one of the says they run across might be socialism. As a result we shouldn't discuss the failures of free markets. The rest of our post is well reasoned even though I disagree - this is not, so I won't spent much more time on it. In no point did I mention socialism, and avoiding discussing failings of a system because people might look to others is a weak way of defending its merits.
> Better that people learn more about perfect markets.
Perfect markets generally are not the state of markets. "Perfect Market Capitalism" is like the "Efficient Market Hypothesis" - its a simplification that makes reasoning much easier, and there are cases where you can apply it. But in practice there is clear, continuous evidence that it does not hold, and ignoring the messy bits is where the system falls apart.
Finally, regarding your PC example I'll saying the following: Ensuring companies are forced to engage in "fair market competition" (avoiding the no true scotsman of perfect market capitalism) by preventing the societal marketplace harming impacts of monopolies, oligopolies, network lock-ins and similar is essential for a healthy society. Any market with power imbalances will tend towards solidification.
We cannot avoid imperfect markets, there will always be transaction costs, barriers to entry, natural network effects. And when there aren't, participants in a market will find ways to introduce them for their benefit. Imperfect markets get more imperfect over time due to the actions of their participants. It is inherent in markets.
So we have two options, immediately address the most imbalanced cases. Or ignore them and hope that the market will become less relevant before the leader has a chance to leverage their position of power. The latter approach is wrong. "Tech" is the only field that moves fast enough for this to even be possible, and you can see from how centralized tech is that even in tech it more often fails than succeeds. Or put another way about regulation: yes you want term limits even if it means a great politician can only have two terms in office instead five, even if they could've done great things in those 5 terms. Because the risks of no term limits is much worse for society. Same reason you want to regulate market dominating companies, even if they could've done great things in that market dominating position, because the risks it brings to a net negative on society are to large.
A simple start is break up market dominant companies and prevent market capturing merges. But fundamentally society must always be vigilant in preventing markets from centralizing power, or from preventing any system from centralizing power. Capitalism (and most systems) centralize power by default. So society must always have a counterbalancing force to get the most benefit from capitalism. Free purely unregulated markets are bad because they centralize power to avoid competition. The goal of society should not be free markets. The main benefit of free markets are market competition. The goal of society should be to maximize market competition (which is different than striving for the impossible goal of perfect markets). And external force needs to act to balance to consolidating nature of free markets to maximize market competition and maximize benefit to society.
> This is a terrible line of reasoning. It is essentially a head-in-the-sand defense. Essentially saying we shouldn't talk about the failure of free markets because by acknowledging their shortcomings
I said (perhaps confusingly) we absolutely should talk about sources of market failure, but that we should not take ourselves into the weeds by calling them "free market failures" because market failures are the parts that are not free-as-in-freedom, they are on "free" as in "freedom"-to-coerce,-kidnap,-rip-off etc.
properly functioning markets require honest/symmetric information and choice, and that no player can control prices (that's off the top of my head, not writing a treatise here): then, show people that what markets do after that is precisely solve the thorniest of problems that socialists are trying to solve, allocation of resources.
> market failures are the parts that are not free-as-in-freedom, they are on "free" as in "freedom"-to-coerce,-kidnap,-rip-off etc.
Again, this is wrong. This is fantasy that people like to believe, but it is not the case. The failures on in the "free-as-in-freedom" parts. And that's the part I'm explicitly calling out because it is naive.
Communists arguing that the main thing required for communism is we get everyone to give up their own self-interest and work just as hard for no financial reward is wrong and devoid of reality. Saying that this is a requirement for successful socialism is absurd and ridiculous.
Free market capitalists arguing that people will just give up their own self-interest and not behave selfishly to maximize their profits, by explicitly avoiding and inhibiting perfect competition to their direct benefit, is also just as absurd and ridiculous. It's not because of a devolvement into laisse-faire or anarcho-capitalism (or due to 'extra-market coercion' or kidnapping as you list). It is inherent in free-as-in-freedom "free market capitalism". Selfishness drives profit motive. Profit motive in markets that are imbalanced create inequal power. Power imbalances in any human system (like a marketplace) centralize power. Centralized power prevents competition. That is the key point. And thinking that people won't be selfish and prevent legitimate market competition, or ignoring that power imbalances always centralize in systems, or believing that just giving people freedom to act will not devolve into centralized power is barely less naive than the "communists" view I wrote above. Free markets naturally lead to centralized power and eliminate market competition. That is the fundamental problem.
The essential force that free-as-in-freedom "free market capitalism" needs is a countervailing force that enforces market competition. Without it capitalism eats itself due to human nature. Just the same as communism eats itself due to human nature.
I'm trying to get you to stop throwing around the word "free market" in a meaningless way, especially in a negative light, because it muddies your argument and throws mud on "free markets" which most people have a positive impression of. When you say "free market", it is completely unclear to anybody who is not in your head wtf you are talking about; it only comes out when you finish your sentence slagging it.
"Free market" does not have a clear or set definition. It is not a term used by economists except as a catchall in the context where the audience knows what the economist is talking about. It comes from the time of "classical liberalism" when the liberalizing was "freeing" markets from the control of the aristocracy, but today we also need to keep them free of collectivism, even though collectivism in modern parlance fits the thinking that we now call liberalism, so I don't think it's a great idea to use those terms either.
To keep out of that linguistic morass, stop slurring the term "free market".
Markets always exist, because people will always trade, even if it's a spoonful of my prison rations for a spoonful of your prison rations. If we as prisoners make a trade, are you calling that a freedom? So just talk about markets. The little description I just gave is a clear thought, and the word free doesn't add anything. Black markets are the truest free markets, they entail free trade of all items. Everything not free about a black market is exogenous.
Learn the terminology of markets; economics studies "perfect markets", and then identifies sources of "market failures" and "market inefficiencies". The type of unregulated free market that devolves into cartels and monopolies and caveat emptor is better known as laissez faire. Markets that are regulated within western democracies are free markets that don't devolve.
on the surface you're just throwing words around on top of however many layers of more complex thought goes into your arguments.
Free markets are a good thing. If you want to talk about market failures, don't use the word free. Free does not mean "unregulated".
I believe capitalism is the best economic system we've invented and likely will invent, but, you give it too much credit. American capitalism has worked largely because it was underpinned by a foundation of Christian morality. With that foundation crumbling, capitalism will fail, like any other system would when managed by a largely corrupt and immoral society.
We are seeing it happen in real time. Our president is a crook. We have plenty of evidence that he influenced-peddled to foreign countries for millions. Our media lie to us constantly. Most of the government, including the DOJ, FBI, and CIA, are run by corrupt, partisan, and evil people who are largely unaccountable to the public. Our judicial benches are filled with partisan activists who largely ignore the law and the constitution as they make whatever rulings they can to promote their ideologies or world views. Capitalism will not save us from any of this, especially as long as so much of the public keep voting into office people who actively support this kind of corruption.
Isn't it? If one bank tries to send fake transactions, it can have real effects. If some crypto nodes try to send fake transactions, it mostly just doesn't work unless you have a 51% majority. But at that point the system is mostly worthless anyways.
With decentralized applications at least, there are always bugs and people lose their life savings due to poor mechanics or faulty code, and there's no recourse. See rekt.news for an idea of how 'ungameable' these financial products are.
With a federally insured bank, securities, or other regulated financial products there's a watchdog ensuring compliance and regulations, transactions are largely traceable and auditable, and if someone finds a way to game the system there's a legal entity with a massive presence that will come down on you anyway.
There are advantages to both, and centralized finance is certainly 'gameable' in ways also, but I definitely wouldn't say that it's more gameable than decentralized finance.
Well, if you divide your power hungry people into enough different lanes, and they spend their time duking it out with each other, and they end up having to compete among the citizenry for support, funding, etc than that seems like a pretty good system.
Of course the angelic souls who suddenly find themselves in charge of arranging such a system would have to be chosen somehow. Or would they just need to be ambitious creatures that take the reins and become benevolent dictators? Knowledge of human nature has to be a prerequisite here, does it not?
Well, in almost every functional democracy in the world, at some point the founders of it decided on a way to split up power. In the US, that meant 3 different branches of federal government, individual state governments, separation of church and state, and giving every citizen the right to establish a corporation and engage in trade (aka capitalism). So three separate estates, and subdivisions within each one. So we were lucky to have enough angelic (enough) souls who did arrange such a system (flawed as it is).
Contrast this to something like China where there is a single party and a single government with no checks or balances. And such as there is some free enterprise, it is not a universal protected right and even the richest citizens have no ability to affect politics. It does not seem like a favorable alternative.
People who become politically active in China end up disappearing regardless of party membership. I mean, you realise the "party" in a communist state is nothing like a political party in democracies? The word used is the same but their mechanics are totally different.
We had a one-party system in Yugoslavia. Today we have one ruling party which almost always wins the election and being a member will give you perks and advantages. Small parties are there mostly for the decor and coalitions. Sometimes the opposition will win at the city level, and then the county and state ruled by the party in power will do everything to undermine any disruptive actions, prevent advancements and things just stay blocked until that party wins the local election and unblocks the changes to attribute it to themselves. Also, significant infrastructure work often awaits for just before the next election, for better optics, or the government will choose where to invest public funds based on publicity and not the actual needs of the people, everything to secure the next election.
If anything, capitalism provides an alternate path for people craving money and power. If the estates remain sufficiently separated, they will tend towards balancing each other out and creating more stable governments.
Yep, I can (as well as Bill Gates) has access to chatGPT for $20/month. Same for airline travel (with a difference of a comfy chair).
Capitalism tends to edge towards maximality through high margin, high volume. Followed closely by low margin, high volume. And small ventures at low margin, low volume. All can coexist to improve the society.
Often, capitalism is discussed in the context of cronyism.
Knowing this, we ought to design an economic system accordingly!
The inevitable concentration of power should be out in the open, broadly consented to, and held accountable. We could call it "government".
Instead, in the most "anarchic" corners of capitalism we have "shadow governments" where power is tightly concentrated and undemocratic, but it's okay because "if you can't see it, it doesn't exist". Insurance giants, tech giants, finance giants, etc.
Edward Bernays was writing about this exact phenomenon 100 years ago (Propaganda).
Power isn't the problem. It's an amoral, nebulous concept.
There are no actual -isms in the world.* These are utopian fantasies supported as tribal, jingoist footballs not worth arguing about. Governments are varying degrees of:
1. Influence corruption of the rich directing elected (or military junta) officials
2. Proportion of embezzlement-adjacent and actual embezzlement corruption of officials spending money on their own needs and wants
3. Overall functionality and responsiveness of police and justice extending protections or harm balancing individual and collective interests, including positive and negative rights to liberties, property, trade, and taxation
4. Distribution of competency across government departments
The problem in the US specifically is that money concentrates power because elected officials are beholding to campaign financing. As a consequent, primarily celebrities and public figures are the only ones who are "electable" in 2 flavors of corporate-owned, tribal factions. As John McCain discovered, there is absolutely no will to fix it from within the system. As such, it can only be resolved outside of it through applying great, sustained pressure in a nonviolent manner.
* Communism was attempted but never implemented anywhere because it's either a utopian delusion or was sidetracked by totalitarianism and/or inadequate leadership. Capitalism doesn't exist anywhere except in a libertarian's mind. There is no "pure" "socialism" anywhere. Every political jurisdiction implements a special snowflake blend of regulations, corruption, freedoms, autonomy, and force.
Can you explain what you mean by John McCain discovering there is no will to fix it? Have always admired him but I'm unaware of his efforts to change, outside of voting for ACA and admitting Obama is a decent man.
I don't think anarchism is realistic in any long term sense. Someone will always come around and consolidate power by forming(and forcing people into) a government.
Zapatistas have around 30 years and they seem to be very close to Anarchism, Rojava has 10 years of democratic confederalism which is Libertarian socialism and let's say fairly close to Anarchism.
Gotta start somewhere, capitalism in it's current form has only been around for a few hundred years at best. Too many people have bought into Fukuyama's The End of History imo.
Anarchism as a thought has only existed for about 150 years, capitalism for maybe 500 years and still took a couple hundred to get going, so I don’t know what your standard is except to doubt that anything can come after it
That's why you need to have an ideology of democratization that ruthlessly crushes the spirit of those who try to excel. :-) Or give them some harmless sandbox to play in, like sports or art.
Is it a human thing, or a mathematical game theory thing. If you have a group of agents with diverse motivations, power will become concentrated in many conditions.
What I want is the structure of free market capitalism but more weight towards labor. essentially the problem (IMO) is that Capital can be super concentrated & is inherently mobile but Labor is distributed & wants to be immobile/stable because our main goal is to live life and raise family. this is the fundamental weakness in labor's negotiating position.
Unions are a solution but they also have power concentration problems. IDK whats a good solution but perhaps a state administered sustenance UBI that indexes to inflation & always comes out preferentially (like SS/medicare) from tax revenue. and slowly over time we grow the definition of baseline human necessities as economy advances.
People who say things like you say don't usually seem to have a very good definition of "capitalism".
For me, the word means that I can trade what I own to other people who want it and are offering me something I want in return. It means that, if I scrape and save, I'm allowed to turn around and invest those savings in another endeavor of my own and that whatever profits I make from it are mine to keep.
I know it's not a very eloquent definition, but I think it's rather objective, and I think it describes the western world today, more or less. Is this what you mean by it? Do you mean something else?
I don't see how it concentrates power. There are people who do capitalism poorly, and then they whine about how it was unfair to them.
Capital accumulates capital, debt accumulates debt. When you accumulate capital, you can own resources (land). This means those with capital will accumulate power.
You can talk about being "bad at capitalism" but the implies you assume everyone starts with equal opportunity (capital, land, power).
There is a distinction drawn in the definition between capital goods and goods in general. This is the classic "can you own a toothbrush in a communist country" argument and the answer is, as it always has been, of course yes.
> Most generally: "A socio-economic system based on private ownership of resources or capital."
That's circular and moronic.
Even the big about "private ownership of resources" is couched in terms that make it sound as if the person saying it is being excluded and treated unfairly. Do you know which resources capitalism lets a person own, or which person might own it?
Your money in your savings account, and you.
> You can talk about being "bad at capitalism" but the implies you assume everyone starts with equal opportunity (
It doesn't. It does assume they're adults that don't whhine about not everyone ending with inequal outcomes.
It's only circular if you assume that "Capital" doesn't have a definition. It does: Capital is resources that can be invested into the generation of more resources. In order to meet that definition, resources need to have a few characteristics: They either need to be tools of production in of thenselves (like a factory, or a hammer), or they need to be able to be turned into tools (say, iron ore), and they need to be possessable (an RF band or an idea or land only becomes capital when a system ensures it can be possessed), and they need to transferrable (your face isn't capital, the rights to your likeness are).
"Private" in this case distinguishes the system from other where, say, only the state can own capital.
> I don't see how it concentrates power. There are people who do capitalism poorly, and then they whine about how it was unfair to them.
And the fact that you (and others) can't see how it inherently concentrates power is exactly what's wrong with the current views of pure free-market proponents.
Free markets are bad. Market competition is good. It's that simple and people still don't seem to be able to distinguish them.
The only way to have market competition is to soundly enforce it. Any free market left alone eliminates market competition and consolidates power - that consolidated power then eliminates any efficiency gained from capitalism.
One of the single most important roles of government is to eliminate heavily unbalanced concentrations of power un order to maintain competition.
In the marketplace that means swift eliminating monopolies, in individuals it means maintaining some tempers inequality, and in democracy it means ensuring any concentrated power cannot perform regulatory capture. But you cannot do the latter without ensuring the former two. Everyone seems to recognize regulatory capture and the imbalance of power it involves in democracy, but some how cannot see the exact same issues in the individual or the marketplace. All three require market competition to be healthy and thrive - and aid concentration of power.
> The only way to have market competition is to soundly enforce it.
Which is why NYC taxis are so cheap. All the market competition cultivated by their sale of taxi medallions for $1mil+.
> One of the single most important roles of government is to eliminate heavily unbalanced concentrations of power
I've seen no historical evidence that any government, ever, has even attempted this "role". It would be a little weird if they could manage to do it considering that they are heavily unbalanced concentrations of power themselves.
> I've seen no historical evidence that any government, ever, has even attempted this "role".
It is normal where I am from. We have an entity that govern the competition and its role is to enforce competition whenever a company gains to much market share.
That way us, the consumers can avoid monopolies where we would otherwise not have the voting-power within our wallets.
But I thought we were discussing reality, and not whatever weird fiction you've imagined about those things. That was lip service to the idea, little more. Do you prefer Standard Oil, or Ma Bell where they broke up the national monopoly into a bunch of regional ones with no competition?
>For me, the word means that I can trade what I own to other people who want it and are offering me something I want in return. It means that, if I scrape and save, I'm allowed to turn around and invest those savings in another endeavor of my own and that whatever profits I make from it are mine to keep.
No offense, but your definition (as distinguishing capitalism from socialism) isn't very good either. Your first sentence is merely the definition of a market, which can still exist just fine under socialism (even the authoritarian varieties extant today feature markets).
As for the second part, that's the exact thing that proponents of socialism assert you are not free to do under capitalism. Your average worker has no hope of saving up to be able to "start an endeavor", and even well-off ones often are beholden to investors, which forces you to part with a substantial part of your profits you made to people who contributed no work to your endeavor. Likewise, if your business does become profitable, it is usually going to be as a result of work others did, not profits "you" made.
The key part of capitalism is that any profits in excess of the bare minimum go to the owners of capital, not the workers. Unless you have capital yourself, you either have no access to the means of production, or are forced to give up a substantial part of the value you produce.
Where are the markets in Venezuela? Which bakery could you go to in the Soviet Union when the bread line was long and the shelves empty at the state store?
Why is it that such places always end up using some sort of ration ticket instead of real currency?
> As for the second part, that's the exact thing that proponents of socialism assert you are not free to do under capitalism. Your average worker has no hope of saving up to be able to "start an endeavor",
No, they're just lazy losers. I read somewhere once that you can buy the hotdog cart at Costco for $400 or $450 like that.
But I suppose the ones that whine that they can't start an endeavor want to skip to the end of the game, where they own $500 million in McDonald's stock and a few dozen franchise stores... so my example doesn't count.
There exist opportunities for people at all levels of capital.
I'm not an entrepreneur myself, don't have any knack for it. But it's nice to know that the commies are always there, hiding in the shadows ready to swoop in and confiscate, if say, I did buy a food truck and put my brother-in-law to work running it.
> The key part of capitalism is that any profits in excess of the bare minimum go to the owners of capital,
You mean, the owners of the business. Sure. Why should it be otherwise.
No one with capital would trust the sorts of people who do minimum wage scutwork to be the sorts of partners who should be cut in on the profit. Go read r/antiwork and tell me those are the people who you'd trust with your life-savings. All they bring to the table is talentless meniality and a bad attitude.
> you either have no access to the means of production, o
What is a "means of production"? Are you lusting after some billionaire's water-powered Jacquard loom?
We're on Hacker News, if I'm not mistaken. The means of production for most of us is a laptop, and internet connection, and our brains. But maybe you're right, most people don't have access to that last one.
So go start your $450 hotdog cart and let us know how it goes instead of making unfounded assumptions and constructing strawman arguments on the internet.
Well, the problem is: hot dog cart might be a great business, until you account for all the government regulations, taxes, stupid sanitary requirements, etc. severely limiting your earning potential. Things like that were much easier in late 19th/early 20th century US. Capitalism is a great system, the only thing that can break it is too much government involvement.
"Stupid sanitary requirements." Incredible. Motte and bailey argument. It's weird that "sanitary regulations cut profits too much" is the safer position you are retreating to.
It's funny that you're mad about taxes when every step of the hot dog cart business requires public infrastructure. Contract law, credit cards, the highways to deliver hot dog carts to Costco, the streets to take you to Costco, "stupid traffic safety laws" that mean your car doesn't explode on the way, the public areas you plan to sell hot dogs from, "stupid flammable gas safety laws" that let you cook them without exploding, "stupid food safety laws" that mean you can buy known edible hot dog materials, currency, a legal system that prevents people from taking your money after the sale. There is a lot.
Or were you going to run your cart using whatever you can hunt out in an unpaved woods and cook it on gathered firewood?
Capitalism is independent of the operation of markets. Its definining characteristic is that the investment of capital in a human venture is treated preferentially to the investment of labor. Specifically, claims on the profit made by the venture first and foremost reside in invested capital, not invested labor.
It's pretty trivial to imagine how capitalism could retain this characteristic even in the presence of planned economies and/or highly regulated markets.
is that not just a no true scotsman argument? what you describe doesn’t exist anywhere at scale, humans have never found a way to do this idea at scale.
Your comment is incoherent. What specifically are you saying that we don't do at scale? (I never mentioned "scale", but apparently it is important to you, so...)
People trade things at scale all the time. Some trades are apparently valued in the millions and billions of dollars. Some people have savings that are large fortunes, and they often invest them.
You must be talking about something I am not, but it's difficult to figure out what the words even mean to you.
Your definition of capitalism is incomplete. You’ve described the essence of capitalism - as you see it - and people not adhering to your choice subset don’t ‘have a very good definition of "capitalism"‘
You’ve made a no true scotsman argument because all these other capitalist systems with their wage labour grievances and their accelerating inequalities tearing at the coherence of societies’ fabric are not _really_ what’s at the core of capitalism and if they just did it better then it’d be awesome.
The scale part comes in because what you describe - capitalism without wage labour - exists all over the world today, but only in the small. You cannot grow it to a country sized system.
> and people not adhering to your choice subset don’t ‘
Other people aren't bothering to define it at all. I could work with their definitions, if they ever bothered to speak them. Hell, if they ever bothered to even hint at what those might be.
This isn't about a difference in definition, but the other side not defining it at all. And all the waffling here, by you and others, suggests that this might not just be some oversight, but the same sort of strategic fallaciousness the left is infamous for.
The rest of your comment is as incoherent as the first. I'm not sure what "no true scotsman" argument you think I'm making. My definition applies, in varying, to most nations in western civilization. But most especially to those the leftists are most critical of. Take your pick.
There is no objective cost to things, the amounts you need to offer to entice individuals to do that work isn't a solved problem.
If the person is tired today and wont work unless you pay him a thousand dollars, then it costs a thousand dollars today. If the person is already fully booked, then you have to pay more than the previous customers plus pay those customers for the inconvenience you cause by taking their spot in that system, to be fair, so now it got very expensive.
How do you avoid this in your system? Do you enslave people and force them to work? Soviet did that, you weren't allowed to not work, you had to work, nobody was free.
What? How do you produce things? Do you will them into existence? That's great for you, most everyone else uses resources and labor to produce things. These represent objective costs.
> If the person is tired today and wont work unless you pay him a thousand dollars, then it costs a thousand dollars today.
Or you don't hire them today.
> How do you avoid this in your system?
A labor market.
> Do you enslave people and force them to work? Soviet did that, you weren't allowed to not work, you had to work, nobody was free.
That is capitalism though and has the same problems as capitalism. For example, the doctors guild could say that surgery costs a million dollars. That makes all the doctors rich, so all doctors agree to not perform surgeries for less than a million dollar. Does that mean that surgeries objectively costs a million dollars?
The way we solve that issue today is by regulating unions so they don't get that level of power. But what that regulation looks like isn't objective in any way, and it will shape the prices you will see, so labour prices are subjective.
Labor markets are not capitalism. A commodity production system using prices for exchange with productive instruments under private ownership is capitalism.
If we define capitalism to mean "anything that supports my argument" then yeah, of course you're right.
> For example, the doctors guild could say that surgery costs a million dollars.
And they would have exactly zero customers and go bankrupt, because another competing doctors guild would do the surgery because they value saving lives over driving luxury cars. Labor market.
> Does that mean that surgeries objectively costs a million dollars?
If you paid it, then it objectively cost that much when you paid it, no?
> But what that regulation looks like isn't objective in any way, and it will shape the prices you will see, so labour prices are subjective.
Yeah, labor prices are subjective. Observed labor, performed at a specific price, performed over a specific time, is objective.
How much labor and what amount of resources and what processes took place to transform those resources for any given product is very much objective. These values might change over time as some labor becomes more costly or resources become more scarce than others, but that doesn't change that there is an objective measurement to what it cost to make some thing. Not some thing that might exist in a day or a week, but some thing that already exists.
You can thump your subjectivity bible all you want, but you're wrong.
Why would there be another competing doctors guild? Worker organizations become monopolistic just like any other unless you regulate that.
edit:
> How much labor
Labor isn't fungible, you can't replace a doctor with an average person. No two human do exactly the same labor, labor is therefore impossible to quantify unless you simplify it, and how we decide to simplify that is also subjective. Naïve socialists tend to say that all work hours are equal, which obviously isn't true and wont work at all. So then we have to decide whose labour is worth what, and we are back at the unequal society we have today where some persons labour is decided to be worth billions and others barely anything, unless you come up with some new different way to value labour.
> Why would there be another competing doctors guild?
Why wouldn't there be? Communism is "the free association of producers." If people need a surgery and I'm a doctor with full access to the means of performing surgeries...
It might help to try to break out of the red scare/USSR box you're putting everything into. Nobody wants SLAVERY, BREAD LINES, or HOLODOMOR.
> Labor isn't fungible, you can't replace a doctor with an average person.
Nor am I advocating for it. You're continually taking the worst representation of a concept I'm explaining and it's becoming tiring. You can track labor as "heart surgeon labor" or "house painter" labor, or "serial concept misunderstander" labor.
And, by the way, none of what you said negates what I've said about objective costs.
> because another competing doctors guild would do the surgery because they value saving lives over driving luxury cars
No, because they can undercut they other doctors and get all their customers while still making a lot of money.
That's literally how all business work in competitive markets and most of them have nothing to do with 'saving lives', yet they behave in the same way.
And free market competition is something generally associated with capitalism because it's hardly possible without private ownership of businesses.
> performed over a specific time, is objective.
Because it's determined by the market (more or less the same like the price for all other goods). It's objective as much as the price of any good and service in a capitalist system is.
Sure, a labor market, like I've been saying. And my argument is that this raw information has usefulness to making economic decisions, and prices erase that information. A labor market determining the value of labor, and that labor being performed and imbued into some product, is a much more objective measure than that product costing some arbitrary amount set by some analyst trying to maximize margins.
You aren't refuting the fact that prices erase information, you're just explaining how markets work.
Labor can be worthless if it's 'imbued' into a worthless product. I'm not sure what you're suggesting, supply and demand determines the price, if your good cost more in labor and material to produce than anyone is willing to pay for it nobody will buy it.
> much more objective measure
So the market will set prices for labor but not for goods and services? What?
> You aren't refuting the fact that prices erase information
What does that even mean? Are you implying that workers should only be paid as much as they need to fulfill some set of needs and no more?
Really? That it costs labor and resources to make things? Is that really hard to understand?
> if your good cost more in labor and material to produce than anyone is willing to pay for it nobody will buy it.
Thanks for explaining markets again. This is tangential to my point.
> So the market will set prices for labor but not for goods and services? What?
You're getting close. Cost and price are separate entities. Price is "what I think someone should pay" cost is a set of labor and resources it took to make something.
> Are you implying that workers should only be paid as much as they need to fulfill some set of needs and no more?
No? I'm not saying anything about paying people or even the organization of production.
I'm saying that prices are a form of lossy compression. 5 + 7 + 6 + 2 = 20, but given 20, we have no idea that 5, 7, 6, or 2 were part of the equation or that there were four numbers to begin with. If it takes an hour of labor and a kilogram of wood to build something (something that, yes, someone wants because we're not talking about mudpies obviously), the cost to build that thing is an hour of labor and a kilogram of wood, not $20. $20 is arbitrary and effectively useless measurement. The number $20 contains information and you might be able to infer some of the information contained in it, but you can never actually be sure what the information is or the other pieces of information that make it up.
Prices erase information. As a system of measuring cost, they are pathetically limited. Yeah, ok I get it, people exchange things in markets and blah blah, but if a chair has 3kg of wood in it, then we know that it cost at least 3kg of wood (a resource) to produce.
> That it costs labor and resources to make things? Is that really hard to understand?
Yeah, but that's a pretty obvious thing? If that was the entire point then I'm sorry I misunderstood you.
> Prices erase information. As a system of measuring cost, they are pathetically limited
Yes. But I don't see a problem with that (I mean you can still estimate costs and offer a price based on that).
> but if a chair has 3kg of wood in it, then we know that it cost at least 3kg of wood (a resource) to produce
Same applies to labor though. e.g. it took the worker N hours to make it, he used up X amounts of calories to do that, his dormitory bunk costs Y etc. So X+Y+... is the "real" cost. That'd be absurd, the worker can/should charge as much for his work as the market will bare.
> There is nothing subjective about this.
No, the way you put it of course not. So what, though?
> If that was the entire point then I'm sorry I misunderstood you.
That's fine, no problem.
> Yes. But I don't see a problem with that (I mean you can still estimate costs and offer a price based on that).
It's not a problem in a capitalist or even a fully market-based system. My original point is that the information prices obscure might be functionally useful in a non-capitalist system.
> Same applies to labor though. e.g. it took the worker N hours to make it, he used up X amounts of calories to do that, his dormitory bunk costs Y etc.
Yes! There's some amount of cost to derive this information, and there would be thresholds where it just doesn't make sense to collect (or feasible). My point is that we actually do know the costs of various forms of labor and the amount of resources used in things, we just happen to throw them in the trash with each transaction.
> So what, though?
The information we throw out could be useful in scenarios other than "well, that's the price and that's all that matters." One example is the ability to price in known externalities of various resources (or the processes they go through). If you know fossil fuels burned at-scale are "bad" and you know exactly how much fossil fuels it took to build some product, you can immediately tax some externality-cost price amount of the product at point of sale.
In effect, this limits the scope of "economic planning" only to pricing externalities and lets "markets" (not really, because profit is gone, more like "distributed production") self-organize as a solving mechanism for those externality costs.
That's not to say you can't still use planning for bulding a freeway or a bridge or something, but fully planned economies are a beast of their own and I'm not a fan. This is a way of transforming markets into systems that operate within humanity's collective knowledge of the side-effects of production in ways that governments just can't handle.
> My point is that we actually do know the costs of various forms of labor and the amount of resources used in things
Price of the final good (or rather demand for it) can significantly influence the price of labor in certain cases though. There is no fixed "cost of labor" which is somehow directly tied to output produced by those workers.
> Price of the final good (or rather demand for it) can significantly influence the price of labor in certain cases though.
Absolutely, which is why I believe labor markets are a viable solution. Demand signals can propagate backwards and labor organizes accordingly.
> There is no fixed "cost of labor" which is somehow directly tied to output produced by those workers.
I think we're getting wrapped up in future vs past again. For any given product, a certain amount of different types of labor went into producing it. These hours and wages that went into the labor represent objective measures, and are fixed costs because there is no way to undo them.
If you were to make the same product again, the cost could absolutely be different, and you could make an educated prediction on the cost based on past knowledge, but you could not do so with 100% accuracy. I'm not suggesting that costs are predictable, but rather that they are measurable, and our current system doesn't even bother to measure them, it actually just erases the data with each transaction.
> That is capitalism though and has the same problems as capitalism.
No, capitalism is not “when there is a labor market”.
Capitalism is a system of property rights, of which an essential one is proprietary control of the means of production. Having a labor market is a feature of many economic systems, not just capitalism.
Insofar as some of the problems of capitalist systems are endemic to markets and not specifically tied to proprietary control of the means of production, any system with markets may share that subset of the problems of capitalism, sure.
> What's the objective cost of one hour of work painting a house?
You answered your own question. It cost one hour of house-painting labor. You have an action and a measurable duration. It doesn't get much more objective. How much you or someone values that labor is subjective, but the labor itself objectively happened.
And if I want you to paint my house, what does it cost me? The objective cost doesn't matter, what matters is what others are willing to exchange for it. I could spend ten hours of back-breaking effort digging a ditch, but if nobody wants a ditch, then it has no value. And if it's just for me, that's not economic activity. Economics involves exchanging goods and services.
How could anybody run a business if they don't know what it costs to make something? How is stating something so incredibly obvious and simple so difficult for you to understand?
Bank: What's your business plan?
Loan applicant: I don't need one! Costs are subjective lol!!1
> So explain what it costs a business to make something in non-monetary terms.
I've just spent like 20 comments doing so. Short version: labor and resources.
> Will the bank be loaning them painting hours?
Tangential to my point, but I'm happy to go into details on how this might work. Effectively various forms of labor would have a known cost (set by labor markets) and various resources would have a known cost (beyond the labor to extract them) derived from some social price-setting process (we can just call it "democracy" for now). So if you make widgets, you'd have to demonstrate to the bank that you can do so with X resources (at R cost) using A labor at L price, and together the total cost being N (remember, we can add R + L because they both have a price value either set by labor markets or by democratic pricing, ie a common unit) and you'd have to demonstrate there is a social need for your widgets at R + L cost. If you can do so, when another company orders 100 of your widgets, they take on the disaggregate cost of your widgets (100 * (R + L)) and that cost is removed from your company's costs. So although the costs are reducible to a single "price" (an at-cost price) which can be used for effectively limiting a company's upper ceiling on costs, the actual disaggregate costs are the ones that are tracked and passed through the economy until purchase by a consumer, who is able to inspect and act on the disaggregate cost (but pays the aggregate price as a single number). Yes, I know what you're thinking, shortages, clearing prices, etc etc. Short rebuttal: the consumer might not pay the actual at-cost price based on a set of automated incentives the company follows to limit shortages or clear inventory.
So back to your question, the bank might loan them a total aggregate amount that they can spend to acquire at-cost items from the economy to transform them into widgets, at-cost.
Happy to expand...and forgive me if I've been short, but the number of people engaging who are automatically assuming I want slavery or don't know how markets or prices work is making it difficult to separate good faith from bad.
How do you compare the value of these things with other things? In capitalism that is the role of price system.
How 1 hour of house painting compares to 1 hour of dog walking, with 1 hour of a neurosurgeon, 1 hour of dish washing, of 1 hour of playing football, etc?
Prices sometimes erase that data, when neoclassical economic rents are high. Which can be because the thing in question is just an item of speculative value, or it could be because of market asymmetries.
Otherwise, in a free market with many buyers and sellers, the economic profit of a given commodity will tend towards zero. And that means that it offers a very close approximation of the minimum possible incentive for people to produce that commodity. And incenting people to undertake the production process is part of the true cost of production, as all other forms of human effort and risk-taking are.
If we're just talking about prices as a singular aggregate number, then they erase vast amounts of data, whether they converge on cost or not. What it took to produce something isn't 34 currency. It took 2 hours of labor mill worker time, 3 hours of truck driver time, 6kg lumber, 6 minutes of oil refining, 3L diesel fuel, etc etc etc. Those are actual costs...and even those are still aggregate, but as separate buckets at least. The beauty of information like this is you can price things at PoS based on known information...how harmful are fossil fuels when used at-scale in production? Very? Ok, create a democratically-imposed pigouvian tax on them. Try doing that in a state where people have to claw over each other's backs just to make ends meet and the government is in the pocket of the oil industry.
But yeah, if you just want to know what something costs in currency, then yes, I agree that price converges over time to cost in competitive markets. This is exactly what Marx argued, yet everyone screams about him being wrong for some reason. It's one thing he got right.
I'd like to highlight one of the previous comments on this article:
>Here's some important things to think about:
>First, socialism is defined as worker or public control of the means of production and distribution. This has been interpreted in both libertarian and authoritarian ways.
>Second, if socialism is worker control, then it is fully compatible with free markets. Mondragon and Semco are both worker democracies, and operate successfully in the global market.
>If socialism is public control, this does not equal totalitarianism. Social democracy is a form of democratic public control of resources.
>I understand people's reasoning for preferring capitalism (ownership defined by contract) or socialism (ownership defined by use), and I respect that, but I would love to be able to have political discussions about these issues which take into account the complexity and diversity of these two very broad terms.
I live in an european country with a large social democratic party and it's not socialism, it's a vaguely leftist liberal welfare state party. Democratic socialism can be considered socialism, though, but nothing a single party (which gets around 8% of the vote here) can do to create a socialist state.
"democratic public control of resources" is a nebuluos definitiob, and the meaning of regular non-"democratic" socialism or communism can be interpreted as such. Usually the adjective considers more the means and not the ends, (democratic, revolutionary, but sometimes the ends too as in libertarian, authoritarian).
The Red Scare did such massive damage to the working class in the United States. McCarthyism, the Cuban Missile Crisis (which the US precipitated with MRBMs stationed in Turkey) and of course Ronald Reagan, who spent $3T+ of the Social Security surplus on military build-up. Remember that whenever anyone talks about Social Security going bankrupt and also why SS is even taxed.
Fun fact: Abraham Lincoln was essentially a Marxist too [1]:
> Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration.
Of course Americans don't know what socialism is because of this history but the more disturbing part is most Americans don't even know what capitalism is yet defend it anyway.
Capitalism is the exploitation of surplus labor value to the hands of the very few, the capital-owning class. It's not markets. Markets occur in every economic system. It's not "free" (no such thing) markets. It's simply the system of exploitation. We've replaced the monarchs of feudalism with oligarchs. That's all.
The Lincoln quote you referenced really blew my mind the first time I read it. No president before or since has encapsulated the issue so clearly.
"It is not needed nor fitting here that a general argument should be made in favor of popular institutions, but there is one point, with its connections, not so hackneyed as most others, to which I ask a brief attention. It is the effort to place capital on an equal footing with, if not above, labor in the structure of government. It is assumed that labor is available only in connection with capital; that nobody labors unless somebody else, owning capital, somehow by the use of it induces him to labor. This assumed, it is next considered whether it is best that capital shall hire laborers, and thus induce them to work by their own consent, or buy them and drive them to it without their consent. Having proceeded so far, it is naturally concluded that all laborers are either hired laborers or what we call slaves. And further, it is assumed that whoever is once a hired laborer is fixed in that condition for life.
Now there is no such relation between capital and labor as assumed, nor is there any such thing as a free man being fixed for life in the condition of a hired laborer. Both these assumptions are false, and all inferences from them are groundless.
Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights. Nor is it denied that there is, and probably always will be, a relation between labor and capital producing mutual benefits. The error is in assuming that the whole labor of community exists within that relation." [0]
> Fun fact: Abraham Lincoln was essentially a Marxist too
Along these same lines, watch at least the opening statements of first JFK-Nixon debate [1].
Nixon sounds like a Biden or Bush, he could be on the debate stage in 2024. He wouldn't win, but he would sure fit in.
JFK sounds like Xi Jinping. He won, but was assassinated 3 years later.
America is remarkably good at reinventing itself and what it means to be "American". Our history is worth studying in depth, without ideological blinders.
There's so much wrong with this comment but to start: the US didn't cause the Cuban missile crisis by first placing missiles in Turkey. This is known because historians have read documents and talked with people after the fact. The actual Soviet motivation was to use missiles in Cuba as a bargaining chip with respect to Berlin. Militarily, neither missiles in Cuba nor missiles in Turkey made much of any strategic difference.
> It’s little wonder, then, that, as Stern asserts—drawing on a plethora of scholarship including, most convincingly, the historian Philip Nash’s elegant 1997 study, The Other Missiles of October—Kennedy’s deployment of the Jupiter missiles “was a key reason for Khrushchev’s decision to send nuclear missiles to Cuba.” Khrushchev reportedly made that decision in May 1962, declaring to a confidant that the Americans “have surrounded us with bases on all sides” and that missiles in Cuba would help to counter an “intolerable provocation.” Keeping the deployment secret in order to present the U.S. with a fait accompli, Khrushchev may very well have assumed America’s response would be similar to his reaction to the Jupiter missiles—rhetorical denouncement but no threat or action to thwart the deployment with a military attack, nuclear or otherwise. (In retirement, Khrushchev explained his reasoning to the American journalist Strobe Talbott: Americans “would learn just what it feels like to have enemy missiles pointing at you; we’d be doing nothing more than giving them a little of their own medicine.”)
The mistake you're making is taking a politican's words at face value. If you were to ask JFK he'd say militarily the US couldn't accept nuclear missiles in Cuba. But our own military was willing to accept it, in fact that was one of the options presented to him: do nothing. The reason he did something was all political, because he was running for reelection, needed to look strong on the topic after the Bay of Pigs, and had publicly committed to not accepting missiles in Cuba earlier (as the Soviets had also publicly asserted they wouldn't put them in Cuba).
The book "Essence of Decision: Explaining the Cuban Missile Crisis" is somewhat regarded as a classic here that is worth reading.
Also, worth pointing out that I too can quote a Khrushchev (Nikita):
Q. How much did the crisis have to do with U.S. Jupiter missiles deployed in Turkey?
A. Zero. The missiles in Turkey were the same as the missiles in Italy and Great Britain. Why do you make the difference between those three missile bases? They are the same. They are the just the first step in a standoff confrontation in 1962 when both sides began to deploy missiles in their own territories. Those missiles in Turkey would be removed from Turkey anyway in two or three years.
From what I've read, most historians would agree with that take.
Yeah, 400,000 dead Americans and 27 million dead Soviets [1]. I'm no fan of Stalin but one thing that's absolutely irrefutable is his efforts killing Nazis. The human toll for that was unimaginable.
Any time I hear "Capitalism is [...]", it is when one forces his own, carefully worded definition, so that the subsequent arguments sound natural, logic, simple, irrefutable. "It's simply the system of exploitation".
Let me try that game. Capitalism is what emerges from trade and money. You can fight it, you can embrace it, but you won't eradicate it. Black markets and barter will emerge, which are forms of capitalism. In the end, all you can do is regulate it (or not). Then I would define socialism as an attempt to regulate it so it doesn't turn into the law of the fittest.
Socialism turns into the survival of the fittest as the civilians start fighting each other for food, and positioning themselves favorably for scraps by burying their neighbors for "crimes against the state." Everything anybody needs to know about socialism was already experienced by and written about by Solzenichen.
I said that socialism is an _attempt_. I certainly agree that it can fail and produce misery.
I'd like to define socialism as a moderate regulation of capitalism. Like, capitalism with the right balance of regulations (so industries aren't free to wreck the environment, risk people lives, etc), cheap/free social services/health care and taxing the wealthy more than the poor.
Then I could say I'm for socialism. Now a lot of "socialist" countries are dictatorships and/or heavily corrupt states. So I... don't know. I guess I'm a centrist then?
Trade and money existed long before capitalism. Capitalism is not trade and never was. Trade will always exist regardless of the economic system.
>law of the fittest
Fittest? Capitalism rewards who already has capital. Monopolies inhibit competition, stifles innovation, and effectively nullifies the "fittest" argument. Still, that's the ultimate dream of every capitalist.
This rhetoric is a result of propaganda funded by the very capitalists that need to justify their atrocities.
What really baffles me is that these arguments are, today, almost exclusively made by those that are not capitalists. They defend their overlords with more faith and fervor than most church goers. When in reality most are one medical emergency away from bankruptcy, but still think they might become a billionaire.
I'm basically saying neo-liberal capitalism, as in minimum-regulation capitalism, is unfair. You're right that it's about having capital already, not about being fit. Anyway, I think the law of the fittest is awful, so I'm not defending neo-liberal capitalism, quite the contrary.
Anywhere you have money and trade, you will have wealthy people, using their wealth to get unfair advantages over poor people, and get even wealthier. I don't care if it fits your definition of capitalism, even though I think it does. My point is that you can fight it, or embrace it, but it's going to emerge, and you won't eradicate it. So, instead of describing this naturally emerging thing as pure evil, let's try to make it fair, have regulations to protect consumers, taxes to redistribute wealth and prevent too much wealth accumulation. That's what I would like "socialism" to mean.
Being a billionaire is absolutely not my goal in life, not even a desire. Billionaires actually are lonely people, stuck in a very restricted social circle. They can't have normal friends. Ask minecraft's creator.
Please don't assume I'm a brainwashed wannabee-billionaire defending my "Capitalist" overlords. I would be better placed to assume you're the typical anti-system guy that thinks "Capitalism" is the root of all evil, and that sees everything in this light.
Einstein talks of a planned economy towards the end. It's easy to see how someone in 1949 might think it's a good idea, but in 2023 the idea seems antiquated. All of the major economies are largely not planned.
Now I wonder if the idea of a planned economy was just tried too early. Was it missing the quantized world we live in now, with increases in information processing and communication? Is there an AI advancement in our near future that can outperform the free economy?
It's a good reminder that at this time, the purpose of planned economies and Communism specifically was to make everyone collectively richer. Everyone kind of assumed that competition was destructive and a bad thing. Marx wrote about it, progressives believed it (which is why Americans begrudgingly put up with trusts and monopolies for long periods), and you can see it here in Einstein's writing.
Only in hindsight looking at the failure of Communism do we frame it as "choice vs equality".
There's a good semi-fictionalized book about how this framing changed called "Red Plenty".
> Einstein talks of a planned economy towards the end. It's easy to see how someone in 1949 might think it's a good idea, but in 2023 the idea seems antiquated
From the article: "A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society."
This has been tried, and results in horrible oppression within just a few years of implementation. I can see the appeal, but you have to re-invent humans to make it work.
> This has been tried, and results in horrible oppression within just a few years of implementation. I can see the appeal, but you have to re-invent humans to make it work.
From 50,000 years ago to 10,000 years ago there were no capitalists, no kings, no slave owners.
production to the needs of the community, distribute the work to be done among all those able to work and guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society.
It is not a system of horrible oppression, it is how the few remaining hunter gatherer bands live in the Amazon right now.
> From 50,000 years ago to 10,000 years ago there were no capitalists, no kings, no slave owners.
Citation needed. Humans have been anatomically modern since 100k BC, including the brain. There is no reason to think there haven't been kings or slaves in that time, just that there is no history about them.
Migratory hunter gatherer bands still exist, and no observation of them through history has found kings or slave owners among them. Nor is there historical evidence. I'm not sure how a migratory hunter gatherer band which has few possessions and moves from place to place would have some slave owners who not work and the others as slaves.
In fact much of the world was like this only a few centuries ago.
Migratory hunter-gatherer tribes have spawned some of the worlds "greatest" conquests - a good example would be the Mongols (who to this day hold the record for largest empire by geography). If it were just Genghis Kahn, that would be the exception that proves the rule, but there a lot more. https://en.wikipedia.org/wiki/Nomadic_empire has a nice list of friendly hunter-gathers and other nomadic tribes that decided to try to conquer their known worlds, genocide their enemies, enslave people, etc...
Yes I've wondered about this - the market-vs-planned economy question got decided in an era with completely different networking and information processing technologies. There's this famous story:
Sometime before 1989, a Soviet official asked economist Paul Seabright who was in charge of London’s bread supply. Seabright gave him an answer that is comical but also true: ‘nobody’. The bread we eat turns up on our tables thanks to an incredible team effort (bakers, machinists, electricity suppliers, distributors etc etc). And even more incredibly, there is no-one in charge of that team. It just happens.
Also - please do weigh in on this, its a genuine question - we are used to the idea that markets are efficient in that way - as described above. But that efficiency of the current state, but doesn't seem to take account of the evolution that happened to get to that point. Has anyone measured the work it takes to get the market to that endpoint? Is there even a name for this concept?
That is: For every business that is involved in the supply of bread to london today, there must also be lots of businesses that tried to be involved but failed. Is there an economic term for the work that goes into the failed businesses and initiatives that dont survive long enough to become players in the market? The bankruptcies, the people that had to sell their business off cheap to a competitor, the people who spent a few years trying then gave up and pivoted to something else. Is there a name for that lost effort?
Because it seems that if were comparing against a planned economy thats what we should compare with - the total effort over time to produce whatever X.
> But that efficiency of the current state, but doesn't seem to take account of the evolution that happened to get to that point. Has anyone measured the work it takes to get the market to that endpoint? Is there even a name for this concept?
I don't know of a term for this in particular, but the keywords to search for are "entry" and "social inefficiency".
I think food in general is a terrible example of the efficiency in the free market. Nearly 40% of all food in the US is wasted. The evolutionary pressure of the free market values high availability over efficient use of resources.
Good point but it might be possible that the most optimial system does include some food wastage because that has to be balanced against all the other factors
On the one hand, I think we’re probably already at the point where a workable planned economy is possible—-one in which everyone has an apartment and gets 3 square meals a day. But it’s hard to imagine a planned economy which wouldn’t underperform a free economy in the long term. You cannot expect to reduce the incentives for innovation without reducing innovation.
We have an example of how a planned market works in practice: the housing market.
The housing market is one of the most regulated “planned” markets. We’ve made it impossible to build in some cites and impossible to build density in almost all suburbs. And so we have a massive housing shortage that’s doubled the fair market price of housing.
If we let the market build enough homes to meet the demand, an apartment would be incredibly affordable. Someone working as a fry cook could afford a two bedroom. That being said, one could argue this planned market is working as intended… renters and first time home buyers are taking 30-50% of their incomes and giving it to property owners… who voted for this system.
While I agree that the housing market is significantly "planned", it's also not centrally planned. Zoning is determined by local citizens, which tend to have the opposite incentives to responsible growth, housing prices, and infrastructure costs. Also, the thing that make many housing decisions work is infrastructure, which is handled through entirely different mechanisms.
>If we let the market build enough homes to meet the demand, an apartment would be incredibly affordable.
I'm not entirely convinced that just letting builders "build more" is going to solve the issue. The reality is that companies are only going to build what they can sell and/or lease at a level that makes it profitable for them to build it. The three factors are then land value, materials, and labor costs. Materials and labor are a separate thing, so you're effectively saying that changes in zoning would decrease the land value. At this point, I'm not really sure that you'd see that impact. In many of the cities and areas where you'd want more density, the land values are already quite high, and it's unlikely that bringing in that density would decrease the land value.
What you're banking on is more housing increasing competition and bringing prices down, which would be unlikely to happen, mainly because of how long it would take to go from an empty lot to "ready-to-move-in" apartments. At best it would slow down double digit rent increases, which would obviously be a benefit, but it wouldn't suddenly make housing affordable.
From my perspective, we need to incentivize the building of affordable housing, rather than investor driven product. An investor driven product is going to try and have higher end finishes, novel floor plans, and other amenities to distinguish it from the market to maximize rents and valuations. Affordable housing can be built with normal finishes, reproducible floor plans, and comparable amenities. That's what will keep the cost down for the other two factors, material and labor, so that the end result is something that's affordable. The biggest problem is that no one in commercial real estate really likes building this kind of product, unless it's in an area without much direct competition.
> Einstein talks of a planned economy towards the end. It's easy to see how someone in 1949 might think it's a good idea, but in 2023 the idea seems antiquated. All of the major economies are largely not planned.
AAPL? MSFT? AMZN?
A large corporation is internally a planned economy. Why do they keep outcompeting small businesses?
Bad examples of what? It doesn't matter why big corporations keep outcompeting small businesses. They simply do. Thus “planned economies” are still a thing, not something “antiquated”.
It doesn't matter if you think that these are caused by impurities in the system.
Interestingly though, the extent to which big corporations outcompete small business is different in different economies. For example in Europe a much larger part of the economy is driven by small/medium business than in America.
> Was it missing the quantized world we live in now, with increases in information processing and communication? Is there an AI advancement in our near future that can outperform the free economy?
Einstein would tell you that we should be quantizing less, not more! :-)
No, it's not just a matter of quantifying more. The hard part of planning an economy is less "if I gather all the data in the world then planning an economy just becomes an optimization problem" and more "the biggest components in planning an economy is that A) how much individuals "need" of something depends on how painful it is for them to get it, and B) the individuals themselves wouldn't be able to tell you what this relationship is".
The best known way for you to get feedback on how much someone wants something is putting it out there and see how much they'll pay for it.
You can do that in planned economies, and historically that's what's been done. You let people try products with the surplus, basically acting as a VC fund, and if people buy that product at a price beyond that of production you make more, otherwise you make less. A market for labor and for consumer goods has been a part of every planned economy.
It really is the optimization and the logistics that was the difficult problem historically.
Due to the war a lot of economies were planned circa 1945. With the war and the depression in peoples recent memory the idea of free capital allocation seemed insane.
I've seen it convincingly argued that large corporations like Walmart operate like a planned economy internally, even if they are acting in an externally unplanned economy.
JT from Second Thought talks about it here: https://www.youtube.com/watch?v=xuBrGaVhjcI as well as early socialist attempts at doing the same thing with computers (Cybersyn in Chile).
The economy is still highly complex and chaotic. That means that computers or not, if you don't have complete information about what everybody is doing and the ability to simulate every mind in the world, then no, you can't perfectly optimize it.
You can only do some hacks here or there, estimate risks, and react. But guess what? That's exactly what our governments do.
In theory it might be possible, but it's just as possible that it would go in the exact opposite direction - increasing inequality, exploitation, etc. Given who is best able to influence the development and deployment of AI, which way do you think that will work out?
There was a big discourse called the "socialist calculation debate" that basically revolved around whether a planned economy could ever "beat" a market economy. To summarize a big complicated thing in a nutshell, a market system is pretty neat because market forces are determine the price (a reflection of the value) of goods and services in an unplanned manner. It's a system that takes in information, and the various actors in the system respond accordingly. It's never 100% accurate, but given enough time and stability, it's usually pretty close.
However, a pure free-market systems is always a reaction to information, so there's a lag in whether the price accurately reflects the value of a good or service. At the worst of times, prices can suddenly skyrocket and/or plunge, and if this ripples out, this creates the familiar boom and bust cycles in capitalism.
In the socialist calculation debate, proponents of a planned economy say it should be possible to determine the accurate prices of things faster than the market can. Opponents say that the economy is simply too complicated to ever take in enough information to calculate such things.
This discourse was all occurring well before computers and the Internet were common. The most recent serious attempt at a socialist planned economy was in Chile under Allende, who saw the potential of using technology to gather and organize such information. Chile in the 70s effectively built a proto-Internet to send information from manufacturers to a centralized location, where macro-economic decisions could be made based on the information (google "Project Cybersyn"). It would have been a really interesting test of the idea, but unfortunately the United States could not allow a democratically elected socialist leader to stand, and the CIA backed a coup to overthrow Allende. The US then installed Pinochet in his a place, a brutal dictator :(
I'm of the opinion that with widespread computer and Internet adoption, such calculations are not only possible but happening all the time. However, such "planned economies" exist to serve capitalist corporations such as Wal-Mart and Amazon rather than the economy at-large. A book called "The People's Republic of Wal-Mart" is a good discussion on that topic:
https://en.wikipedia.org/wiki/The_People%27s_Republic_of_Wal...
If you calculate the true price of an item faster than the market can you would make billions of the stock market.
Some of the world's brightest minds, an entire industry has worked on the problem and can still barely beat the S&P 500. So I dont think we can or have the capability right to do such a thing.
The process involves collecting and sharing information in a cooperative (not competitive) way. In a capitalist system, one of the roles of government at best is to regulate industries to encourage competition. Under capitalism, sharing information cooperatively usually looks like collusion or corruption, so we necessarily need laws preventing that.
A planned economy just doesn't make sense at all within a capitalist system, so there probably would be no stock markets, and no one would make billions.
You need material non-public information to do that accurately. It turns out that when you do have material non public information, it's really quite easy to beat the S&P 500, but we have to put people in jail for that because it would destroy capital markets otherwise.
This assertion is based on a rational market, which it's pretty clear we don't have. I think it's possible to 'outcalculate' a rational market. I don't think it's possible to consistently predict the circus we have instead.
> To summarize a big complicated thing in a nutshell, a market system is pretty neat because market forces are determine the price (a reflection of the value) of goods and services in an unplanned manner. It's a system that takes in information, and the various actors in the system respond accordingly. It's never 100% accurate, but given enough time and stability, it's usually pretty close.
No. A massive majority of the prices of things in the US are distorted by the government or the Federal Reserve. Agriculture is propped up by the government, the prices of healthcare are distorted by capitalist interests, landlords have benefited from lax government oversight, the railway workers strike was made illegal by Biden.
The list goes on and the prices are a reflection of these distortions. To say prices reflect reality is to be delusional to the political situation.
I'm sorry that wasn't captured in my nutshell explanation. A pure, "free" market would not have any such distortions, at least in theory. A pure free market would also not have any government services, such as roads, landfills, or the military/police, so that would affect market prices. I would also argue that such a pure "free" market system would still not collect all the information needed to accurately determine the "cost" of a thing, as certain costs are often not naturally captured in the price without some kind of government intervention (for example, a factory dumping toxic waste into a river for free without any government environmental oversight to say that is not allowed).
So yeah, I don't think there's a pure free market system in the United States.
This observation seems to hold true no matter the time or place:
"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights."
The combine of government/corporate control of information isn't so great either.
“Interlocking directorates, revolving doors of personnel and financial stakes and holdings connect the corporate media to the state, the Pentagon, defense and arms manufacturers and the oil industry.” [0]
People move to places with economic opportunity. That _tends_ to be places with free speech, but look at how many people move to places like Saudi Arabia or the UAE.
The total number of job opportunities in two countries over the span of the ~50 years they have been major oil producers is necessarily less than the number of opportunities available in an entire continent + one of the largest nations in the world over a period of centuries.
Almost 90% of the UAE’s population consists of migrant workers. The U.S. can’t get anywhere near that. Since people flock to countries with free speech, then the UAE must have extremely free speech laws. QED.
Of course this is as wrong as your original claim because seeing where people migrate is not a reliable indicator of whether their destination has “free speech” or not.
> You have a choice with that. Corporations cannot stop you from publishing your own blog.
Indeed, in America both myself and Rupert Murdoch are free to start a news media operation. I’m sure the journalistic merits of our respective works (and not how much capital and media connections we each have available to us) will determine our success in the free marketplace of ideas.
Of course state-run media will tend to publish propaganda in support of the government, but media is not a binary choice between Pravda and Fox News/MSNBC. It is naive to think that the current media landscape consists of each individual rationally selecting articles from all available blogs and news sites - we get most of our news from the places that have money to publish/research/advertise their stories, which is almost always (in the U.S.) done by private corporations.
Many articles about current events found on news aggregators such as HN tend to be by these sources not because of some hidden conspiracy but because these are the stories with the most visibility.
People complain of shadow bans, the amorphous algorithm pushing links away from the front page, comments getting eaten, and all sorts of supposed control on Hacker News every day.
How much advancement was because of a corporation? Versus some engineer/scientist that just got a 5% bonus that year, while the discovery netted billons.
The factories that lifted billions out of poverty weren't created by the scientist that got a 5% bonus. They were created by corporations. Things could be better. They're better than ever before though.
Money is inanimate, it can't actually do anything by itself. It takes labour and resources to realize an idea, and money is one way to control how labour and resources should be directed. This is why money (capital) equates to power.
As a result, under capitalism, those with more capital have more power to generate more capital, leading to a feedback loop that concentrates capital.
They are ruled by an avowedly Marxist (state-capitalist) government, who have lifted hundreds of millions from abject poverty, in the largest economic miracle of our lifetimes.
I'm not saying it was pristine. But you make an extremely poor case against Marx, or the negative effects of US imperialism on the global poor.
Practically all of Chinas economic growth was after and due to economic liberalization that welcomed corporations into the country. China is easily the best example of how much more economically effective markets and property rights are than central planning and state owned everything. Their dumbass government literally starved tens of millions of people because of their ill advised central planning attempt
I'm rather a fan of the BBC and not aware of anything particularly equivalent to it in the US. I have certainly seen the immense degradation that private ownership has had on the half century journalistic career of my mother however - she's extremely skilled as a reporter, but is basically reduced to a few soundbites between songs and commercials and a few weekend shows that I suspect are to fulfill an FCC mandate.
NPR has gotten worse in the last decade I'll give you that. PBS has always seemed unbiased to me. PBS newshour is easily the least biased new program in the US.
Modern capitalism has a lot of socialism in it. Socialized fire dept, sewage, roads, police, in most cases socialized healthcare, in the US they socialize bank & auto corporation losses whenever there's a recession, etc etc.
Fire departments, police and roads aren't "socialism". They are not the means of production and are not industry in any sense other than a desire to lay claim to successes that socialism itself doesn't possess.
Healthcare is most definitely producing goods. People will consume it much over their needs if it is free. A fire department or police are not, people will not call the fire department for the fun of it, only if there is fire.
That said, healthcare is definitely a troubling one because its interests do not align particularly well with a profit-driven model. It should probably have some kind of halfway model to discourage overt usage while ensuring people get healthcare in the scope they need it even if they have a bad financial situation. I don't have a good answer for it.
If only there was some sort of organization, beholden to the people by democratic election, which was obligated to protect and provide what does not particularly align well with a profit-driven model (military, roads and public transportation, fire & police services, sewer and water systems, GPS and weather reporting), to provide this other thing that does not align particularly well with a profit-driven model... hmm...
everywhere it's been done universally and not under/defunded for electoral reasons, the combined economy of scale/standardization, removal of $100Bn+ middleman industries and cheap proactive preventative care saving on expensive emergency treatments more than completely negate the "people going to the doctor for funsies" cost
I was speaking on behalf of the US in this instance, I do not believe the US GOV is capable of pulling a working public healthcare program for their scale.
Yeah... if it wasn't for examples around the world of "publicly owned" healthcare being absolute dog shit.
IE: the VA.
The VA is publicly owned healthcare for our nations heros and how are they treated? They kill themselves in the parking lot waiting to get treated.
Look at any public option around the world and you'll see okay results to start with... with long wait times, rationing, lower outcomes, etc as it ultimately fails.
I wouldn't wish the VA on my worst enemy and you're blind - purposely or religiously - if you don't see the massive problems with systems like it.
People don't run from Socialist/Communist countries because they are successful. Quite the opposite.
> Yeah... if it wasn't for examples around the world of "publicly owned" healthcare being absolute dog shit.
> IE: the VA.
My family's experience with the VA has been better than private healthcare. I am not a veteran, so I've been paying ~500 premiums for awhile to get a similar level of care to the veterans in my family. They do live in California and Minnesota, which are considered liberal states.
I stay away from the VA for all the reasons listed above. You could argue it's better than nothing but the fact remains that on aggregate private is better unless you are healthy (AKA: don't need it) and only care about free (aka: better than nothing).
Doesn't take too much googling to see that the VA suffers all the halmarks of why to not trust Government owned and operated options. And it's not getting any better with the current dysfunction of the government due to poor leadership from the top down and deep division as people ignore facts and history to support a religion that says socialism is good - despite the facts.
So again... I wouldn't wish the VA on my worst enemy even if you know a couple people lucky enough to not be fucked over by Uncle Sam.
Yeah a lot of these government programs do bear the hallmarks of 40 years of management dependent on people sworn to defund, dismantle and obstruct any efforts to improve or reform them, who promised their constituency they were dysfunctional and whose (re)election campaigns depend on failing programs to hold up and point at.
Would you invest in a company where half of the board was filled by people who swore that the very existence of companies like that was immoral bordering on tyranny, and that they were going to shrink the corporation down to the size where we could drown it in a bathtub? That sounds like a stock with a pretty poor long term outlook.
The religion right now kind of goes the other way: Government by democratically elected representatives is evil. Government by autocratic CEOs beholden only to an elite group of investors is good.
It's weird seeing so many (former? ostensibly?) freedom loving people suddenly swearing things like the country is going to die unless we take the right to vote away from people and give it to property (landowners).
"sword to defund, dismantle and obstruct" Which begs the question: Why is that a bad thing? Look at all the programs that are grossly mismanaged, underperform, destroy rights, etc. Look at the ever increasing public debt load for those programs with those problems. Look at the ever increasing tax demands as layers and layers of more taxes exist to punish those who do and reward those who do not.
"would you invest in a company" would you invest in a company who has no rewards to improve and instead is literally rewarded for being stagnant AND who controls a vertable army to enforce being part of the company? IE: The IRS that has hired tens of thousands to "get the rich" ( not really the rich... just the middle class which is the hardest hit by increasing taxes and enforcement of massive tax hikes)
"it's weird seeing" I'm a middle of the road person so you trying to strawman me into being a blank supporter of untrammeled CEOs isn't going to stick. Government must exist but it should be small enforcing reasoanble rules on companies which should also be small. The majority current federal government shouldn't exist (IE: the Medicaid/Medicare Ponzi Scheme) and a fair number of large corporations should be broken up (IE: blackrock, microsoft, etc).
No one says "give voting rights to property"... but people like you seem to think that states like CA should control the rest of the country out of sheer numbers. Idaho shouldn't be controlled by CA and vice versa. If the federal gov wasn't an overgrown cess pool we wouldn't have the do-or-die elections where corrupt pieces of shit like Joe Biden controls way more than any President should control. If we had limited government then the leadership choices would be what they were 40 years ago.
Complaining about Freedom loving is also funny from someone who's ostensibly supporting Socialism/Communism. Those are the literal opposite of freedom loving as the only way those work is authoritarian dictatorships. The literal goal of socialism is to enslave the population based on 50%+1vote leaving the other 49% of population controlled. And again, this is based on historical evidence of what happens when Soc/Com gets implemented: Destruction of freedom.
There's tons of reasons why America isn't pure democracy and why it's a representative republic at the federal level. And it's not to give rights to "land"... it's to keep voting rights with those who deserve it - locals - and to limit the rights of the federal government to steal rights. All you have to do is look at the largest purveyor of disinformation during the "covid pandemic" to see the US government and why it can't be trusted with that much power. and why anyone who wants that much power in the hands of the federal government is ignorant of history and reality.
Hint: Those are capitalist countries with strong welfare policies. AKA: "democratic socialism". Capitalist infrastructures with tax and spend policies (until it falls from the weight and starts declining - IE: Austerity measures to cut programs when promises outstrip the money available)
Last I checked a serious conversation relies on understanding what Socialism is. Welfare states aren't Socialist countries.
Just like the US isn't a capitalist country because they don't have a private military. If all you see is black and white, you'll miss all the good stuff in between.
The US isn't PURE capitalism. no one claims they are - and nothing about capitalism dictates that EVERYTHING has to be "private". But the US is absolutely a capitalist country.
Military? not socialism. Neither are police or fire departments. so "but military" doesn't carry any real point.
And those countries? still aren't socialists countries. The US not having "private military" doesn't change that.
This isn't "black and white". This is "socialism is failure based on 100+ years of historical evidence". This is logic and evidence. As I said, those are capitalist countries with strong welfare policies. This is also basic definition of socialism which isn't "the government does stuff".
The impulse to quantify like this is always fascinating to me in positions like this, as if the only thing a person can muster for a rebuttal is an appeal to some kind of vulgar, assumed utilitarianism. Where are the true believers anymore? Can the ultimately existential nature of humanity really only be of the form "worse-than/better-than"?
People treat the whole world as if they are choosing the right laptop!
OK, here's a non-utilitarian answer: People really like owning and controlling their own stuff. (I suppose you could make that a utilitarian statement, by saying that "really like" means "valuing", but I think it's much deeper than that. It's pretty deep in human nature, from what we observe in almost all societies. So one could say that communism is literally contrary to human nature. You might be able to make it work, but you need different humans than the ones you have.)
This is what I always go back to, if it's so good for people, just do it voluntarily. Organizational problems only get worse at scale. And if people can't be convinced to take part in doing it voluntarily, rather than forcing others to take part, then how is it even going to work out anyway?
They're the exact same except socialism is a more "watered down" version.
Definitions:
> Socialism is a political philosophy and movement encompassing a wide range of economic and social systems which are characterised by social ownership of the means of production, as opposed to private ownership.
> Communism is a political and economic ideology that positions itself in opposition to liberal democracy and capitalism, advocating instead for a classless system in which the means of production are owned communally and private property is nonexistent or severely curtailed.
In practice "Communism" means Leninism and its descendants, or occasionally revolutionary Marxism in general. No one reasonable would ever use it to refer to the likes of Olof Palme.
not in effective results. two sides of the same failed coin and both full of the same failed promises (promises made with different reasons but still the same promises).
Sloppy thinking is supporting either after 100+ years of proof that they fail on every level.
I find socialism amusing. It is best, I think, to consider socialism as a critique of capitalism. My working thesis is that capitalism is unavoidable. Markets do not solve every problem, but they solve many. The fact that socialism creates anger among many capitalists is, in fact, a point in favor of socialism as a critique: The anger wouldn't be there if the critique had no merit.
It is silly to attempt to achieve socialism. Better to use it as a gauge. Otherwise, it ceases to be a good measure and critique. Is the current system everything it could be? If not, then how could it be better and at what cost? This is like asking if a Market accounts for all costs. If it does not, that is, if a Market creates externalities, then it is time to consider, argue over, and politically implement alternatives.
I had to re-check what I said. I said alternatives to markets that create externalities. These are, in fact, markets. They just don't dump costs off the books.
That said, I agree. No "socialist" economic system has been able to not have markets. This is exactly my point: trying to implement a "pure" form of "socialism" is a foolish game. Much like trying to implement a "pure" form of "capitalism" is a foolish game.
Much better, to keep torturing metaphors, to allow iron to sharpen iron. The best outcome is achieved, I think, by allowing the debate to endlessly continue.
Unfortunately for you, we live in the world where "socialist" anything is the work of evildoers in the minds of many older Americans. So you're going to have to choose a different word if you want to be not only understood but also to avoid reflexive contrarianism.
May I suggest "Overton window?" It's scientistic enough that you could overload it to your use of "socialist" here. E.g., "We need to shift the Overton window to include C suite diversification." You won't get instead comprehension. But you'll at least get heads nodding instead of old grumps yelling their fears at you.
> if a Market creates externalities, then it is time to consider, argue over, and politically implement alternatives.
Until you can't, because gigantic corporations are stronger than states and can purchase even more power through capital.
It amuses me how often I see socialism dismissed as "amusing", only to see naive arguments against it. We live in this world RIGHT NOW. We have proof that the market does not regulate itself. Let me rephrase, they regulate themselves to extract maximum profit at the expense of anything and everything.
And again, as someone else pointed out, markets don't vanish under socialism. What most argue for is a baseline for every human being to exist and the removal of the profit motive.
Meanwhile capitalists gloss over all the inherent contradictions of capitalism like the need for infinite growth. Now that is amusing.
It's continually amazing to me that more than 100 years after Marx and Engels wrote their papers on Socialism and Capitalism, people can't see past much more than those choices. Which seems to be very much a false dichotomy.
We have so much more, significantly more data and analytical and modeling capability, and no alternative proposals are taken seriously? It's not like they don't exist, they just never make it as part of the conversation.
It's almost religious with which people limit themselves to the most known options and ignore any alternatives.
If we boil the definition of of socialism vs capitalism into "who owns the means of production?" Capitalism answers "a small group of people by natural right" and socialism answers "everyone, collectively". These definitions leave you with the only alternative being "a different small group of people" (arguably the USSR did model this, ergo allegations of "state capitalism"). Given industrial production (assuming no one is advocating for a return to feudalism) it's one or the other, there's a privileged class or there's not.
If you mean why has no one come up with different ideas for _accomplishing_ socialism post-Marx (or Lenin or Mao), well they have. There's all kinds of weird and wild ideas out there. Searchable terms for interesting ideas on organizing society include "participatory economics" and "democratic confederalism".
If things are setup so that anyone can own their own means of production, and then can have more say and more profit from existing means of productions they are associated with, the privilege reduces significantly.
Indeed, we have significantly more data. However, it seems that we have significantly less _truth_ than at any point in my lifetime, at least.
"Data" evokes images of objective, agenda-less sensors just sitting there, measuring, and passing on what was measured. But in reality, there is a substantial human element in capturing and recording "data" (e.g. SF crime statistics).
I'm not saying other options can't work. I am saying data is overrated in our current, heavily-divided and politicized, world.
"It's continually amazing to me that more than 100 years after Marx and Engels wrote their papers on Socialism and Capitalism, people can't see past much more than those choices. Which seems to be very much a false dichotomy.
"
It seems a very US habit to think only two extremes can exist on any issue. There are plenty of examples of other paths when you look at the different countries in Europe. They all strike different balances between socialism and capitalism. Heck, the US is not very "pure" capitalistic either. We have socialized healthcare (for some), welfare (for some), progressive taxes and more.
I would be very curious about totally different approaches.
> It seems a very US habit to think only two extremes can exist on any issue. There are plenty of examples of other paths when you look at the different countries in Europe.
I don't think it's a US thing at all. I don't deny EU countries have a more hybrid system in some ways, but then so do man US states. That isn't what I'm talking about though. Online arguments/debates for this stuff always revolves around the two extremes, as do political parties, even in EU.
> I would be very curious about totally different approaches.
They exist but Marxists and faux Marxists are very militaristic and don't want anything that threatens their monopoly even if it has a chance of working, worse, if it works then it makes them look stupid (barking up the wrong tree).
It is odd. Especially since their ideas are built around an older form of economy that we have long since moved beyond. Materialism as a guiding philosophy for economic theory seems outdated when in the developed world, economies are built upon services and information rather than production and many types of goods are already post scarcity.
“Radical centrism“ (rejecting this dichotomy) are failures that either can't go beyond the crank armchair or which languish in political parties that are about piecemeal reforms (some Green parties).
Simply produce something better than this dichotomy. But apparently that is too hard.
We live in a mixed economy. The false dichotomy is generally one purported by Socialists as the worldview depends on it. The ranks of "anarcho-Capitalists" are comparatively very few.
Not really, I don't have time for a debate on the pros and cons of each which is what providing some examples would lead to, nor do I have them handy at the moment. I was just making a point which I think stands firm without providing an example set of alternatives.
It seems most -isms inevitably leads to the superficially similar situation of a tiny elite either having total power or owning (almost) all resources, and thus power. Most would still prefer capitalism as at least it offers more personal freedoms and a chance of upward mobility.
I think the recent rise of anti-capitalism gets it wrong. Capitalism within the context of a nation can be made to work in a way that whilst imperfect has a reasonable balance.
It is specifically global capitalism (globalization) that is the problem. It allows for corporate super structures where workers nor governments have any leverage. Worker's rights cannot be defended so it's a race to the bottom. De-industrialization has hollowed out the middle class. Corporations pay little to no taxes. The triangle of government, business and worker that would ordinarily come to some kind of workable balance is gone. It's a never-ending stretch in one direction only: business.
Similarly, global capitalism allows corporations to hide all their dirty externalities. Dumping toxic trash in other countries, sweatshops, wrecking the environment, you just place that shit out of sight.
You would have considerable more outrage if a company would do that in their home country, close to their customer base.
I'll end with the uncomfortable truth that the above has led to the stagnation of the West and various global problems. At the same time it has significantly uplifted the general wealth of many developing nations.
I wonder how many people here have genuinely read and comprehended the works of Marx. While he remains a controversial figure, his theories offer valuable insights into the complexities of capitalism and socialism. Marx provided a framework for understanding how the capitalist system operates and how it creates class contradictions through components like rent, interest, and profit. These ideas continue to be relevant today, especially in identifying and addressing the societal issues caused by large banks, major corporations, and big landlords, which collectively place burdens on us all.
>I am convinced there is only one way ... a socialist economy... In such an economy, the means of production are owned by society itself and are utilized in a planned fashion.
There you have the problem. Things are controlled by 'society itself' and practical decisions such as who to hire to do what for how much have to be made by humans and we end up with iffy corruptish politicians doing that.
Maybe a way forward would be to have an AI make the decisions. At least that could be open source and non corrupt. I'd vote to give that a try providing you could vote it out again if it screws up.
As to socialism, unless it is international to the extent of producing a World Government which controls all military power, it might more easily lead to wars than does capitalism, because it represents a still greater concentration of power.
Perhaps one should also consider that many significant socialists were killed by other socialists. I am not saying this to defend capitalism or its order, however socialist organisations did not have an international standards that can prevent such calamities nor could they prevent the conflict socialist institutions may have with the workers councils.
> I recently discussed with an intelligent and well-disposed man the threat of another war, which in my opinion would seriously endanger the existence of mankind, and I remarked that only a supra-national organization would offer protection from that danger.
I believe that this is fundamentally the same opinion that Oppenheimer held, that resulted in the establishment seeing him as an enemy and a threat. I would like to resurrect these two gentlemen, bring them up to date on the history of the United Nations, and ask them if their opinions have altered.
Oppenheimer was naive bordering on stupidity. He advocated against nuclear weapon detection systems. Somehow the foremost expert on nuclear weapons believed these detection systems would not work but some random amateur physicist that happened to be head of the NEC was right in that they would. This was also how we learned that the Soviets had a bomb. Oppenheimer advocated for cooperation amongst nations in nuclear weapons and guess what, the Soviets rejected it.
Von Neumann was right about everything and him having personally experienced Soviet brutality didn't have the luxury of being ignorant of reality.
> him having personally experienced Soviet brutality didn't have the luxury of being ignorant of reality.
Allied troops didn't reach Hungary until 1944, and the Soviet-backed coup occurred in 1947. von Neumann moved to Germany in 1926, and to the US in 1933.
> Von Neumann was right about everything
He wanted the US to start WWIII with a nuclear first strike on the Soviet Union.
> and the Soviet-backed coup occurred in 1947. von Neumann moved to Germany in 1926, and to the US in 1933.
He personally experienced communism.
> He wanted the US to start WWIII with a nuclear first strike on the Soviet Union.
If we look at the past 100 years of Soviet existence what can we say has happened?
The spread of soviet arms across all of the world, hundreds of millions dead from famine, war between Russia and Ukraine today.
What is the alternate history where the US does invade the Soviet Union?
Also given we are talking about the smartest person from the 20th century, I'm going to guess his logic when coming to the conclusion of first strike was sound.
I think it depends on how you explain the history and structure of the UN. One one hand, eh, maybe the UN was just enough for the US and USSR to hold off launching nukes. On the other hand, they may look at the structure with the US and USSR/Russia being permanent security council members (or the idea of permanent members in general) self defeating since we are often opposed and the UN can't really do much without the sign off from the Security Council. So they may say, the UN isn't an argument against because the UN is badly structured designed to not have any real teeth in the first place.
> the UN can't really do much without the sign off from the Security Council.
Yes, it can; it has deployed peacekeeping missions without Security Council signoff (UNEF I), by the UNGA after France and the UK vetoed action in the UNSC, it adopted broad sanctions against South Africa, through the UNGA, after a triple veto by the US, UK. and France.
The UNGA has taken various action, including expelling Russia from the Human Rights Council, in respect to the Russo-Ukrainian war in a process starting with a Russian Security Council veto.
The common underlying factor in all of these is the UNGA “Uniting for Peace” resolution pit forward by the US during the Korean War because, while dodged initially in that situation because of the Soviet boycott of the UN over other issues, the problem with letting the Security Council veto be the end of the story was made very clear in that context.
I'll amend my statement then. The UN has no teeth against big players. The UN has done some things, but they tend to be with smaller nations without as much clout on the world stage. The UN, still has yet to really wrangle in the major powers on the world stage. The UN wasn't really effective in preventing US wars in the middle east (Afghanistan and Iraq), isn't really effective in the currently unresolved situation in Ukraine, nor is it effective in wrangling in China's territorial claims or their tensions with Taiwan. The US refuses to allow the UN's International Criminal Court to oversee war crimes committed by US troops, as I suspect the same is true for Russia. Or has it been effective in negotiation in the Israel-Palestine relationship. Nor, as a guess, will the UN do anything mention-able in easing China-US relations. It would be better to say, mutually assured destruction has probably done more to wrangle in world powers than the UN has. And the UN's structure is such that it ultimately will never really be able to reign in world powers.
This was also published before the Soviet nuclear bomb test, when the US had a nuclear monopoly and when Curtis LeMay was boasting about using it to win WW3.
> The UN's biggest flaw is the security council veto power.
100% the opposite.
The UN doesn't have any power to do anything that its members don't want to do. Because there's no enforcement mechanism except military action.
And no one is going to use military force to enforce anything against a nuclear power.
Which means that, in order for the UN to function, it needs to keep countries willing to participate. And the security council veto is a pragmatic means to that end.
My favorite sentence in his article still rings completely right-on:
"the ends themselves are conceived by personalities with lofty ethical ideals and—if these ends are not stillborn, but vital and vigorous—are adopted and carried forward by those many human beings who, half unconsciously, determine the slow evolution of society."
Half unconsciously: Explains a lot. You've got your Joseph II's and you've got your Suhartos.
Maybe one of the fundamental differences between a socialist and a capitalist lies in their degree of optimism about human altruism.
Socialists tend to be optimistic and believe that humans have the capacity to care for one another and collectively contribute to societal well-being.
Capitalists may be more skeptical of human nature, leaning on the idea that self-interest drives societal progress. They often argue that individuals are most motivated to contribute when they stand to personally benefit.
The article does shed a good light on humans relationship to the society it leans on and is hopeful of the possibility of a human system that can rely on a army of collective-good workers.
May be some day we will see such a system that doesnt discount the inherent competitiveness and survival bias of a individual.
"Since the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development"
That assumes that "socialists" are really trying to do this and not simply 1) jealous of those with more and 2) simply trying to replace who's in power - with them at the helm.
Why socialism? 70+ years ago? why not. Today? why not socialism? 100+ years of history of the abject failures on every level of every promise and the hell on earth socialism creates.
For every promise of moving past the "predatory phase of humanity" that socialism makes... it breaks and does so in worse ways than capitalism.
Imperfect capitalism has proven better than imperfect socialism at every level of analysis. IE, from the article:
"Private capital tends to become concentrated in few hands"
Inequality exists with capitalists? Guess what? No socialism structure shows that inequality ends with socialism - the inequality remains.
But... we can watch someone like Bernie talk about how evil capitalism is as he flys between his 3 houses, with all his super cars and buy seats to his shows and all his books. You can read all about it and talk about it on your iPhone at Starbucks drinking a latte.
Socialists want to place power in the proletariat, not themselves. This feels like a very emotional comment rather than one made from a logical standpoint.
They say they want that, yes. From a historical viewpoint, it seems reasonable to question whether they actually want that (or whether wanting it is enough to make it a realistic possibility).
I may be wrong about his car (I read previously that he had multiple sports cars - sorry, not "super" cars). He still has multiple homes and will sell you tickets to dinners and books to tell you how bad capitalism is.
And even if I happen to be wrong about the cars... he still has multiple cars, multiple houses and has the balls to talk about inequality.
Never forget that Bernie hated "millionaires" until he became one... then MAGICALLY his tune changed to hate "the rich" even though by every metric he's in the top %'s and has done so by... using capitalism to sell the lies of socialism/communism.
Bernie is the epitome of socialist: Hypocrite that doesn't follow his own religious preaching because he's one the elite who think's he's better than "evil capitalists".
When Bernie voluntarily gives his millions to the IRS to redistribute to the poor? Then we'll move past my mistake about how fancy his car(s) are. because at the end of the day he talks the talk but doesn't walk the walk. He's a walking banner of inequality that doesn't follow the rules he preaches.
The mark of the truly religious - both on him for being a hypocrite... and his faithful for ignoring his hypocrisy and "sins".
He has a house in Vermont, a one-bedroom apartment in DC, and a lakefront cabin. For an upper middle class octogenarian, that's completely unremarkable. Most American software engineers could easily do the same by middle age.
The reason Socialism, Communism, Anarchy et.al. will never happen.
Is because the Human Species naturally groups towards Autocratic Structures. The Human Natural State is Autocratic.
Wealth and Power accumulate to the few, whether in a Socialist Government, or a Corporation.
We can't handle Democracy.
And Free Market Economy is just a myth that is maintained for Corporations to maintain their power and convince people they are free.
Current Socialist programs are supported by the Rich. They are actually providing 'just enough' help to maintain the population above the subsistence level below which they will carry out a violent revolution.
The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. We see before us a huge community of producers the members of which are unceasingly striving to deprive each other of the fruits of their collective labor—not by force, but on the whole in faithful compliance with legally established rules. In this respect, it is important to realize that the means of production—that is to say, the entire productive capacity that is needed for producing consumer goods as well as additional capital goods—may legally be, and for the most part are, the private property of individuals.
This resonates for me in middle age, after rarely having more than $2000 free and clear despite a lifetime of hard work. I've lived movies like Pursuit of Happyness and In Time, but without the financial epifany. All I do is work.
If capitalism worked, then prices would get lower over time with increased per capita productivity. We got a brief taste of that for the last time in the late 1990s, but most people stopped getting raises after that, and now duopolies provide nearly all name-brand goods and services. As it stands now, it's pretty much over. I don't think anyone seriously thinks that homes, vehicles, food etc will ever decrease in price now.
We can generally agree on the causes being stuff like regulatory capture and not enforcing antitrust laws. But those aren't root causes. The real problem is power imbalance from wealth inequality. To address that directly, we could either provide more wealth to the working class via UBI or redistribute wealth from the owner class via taxation. Note that neither of those have been tried at a national level in anyone under 50's lifetime.
Which means that the national debt was planned. It represents the share of wealth transferred to the owner class, skimmed from the working class as a result of trickle-down economics.
The next 2-3 US elections are going to be really important though. Young people have a chance to democratically vote to substantially raise taxes on corporations and billionaires. This won't be so much anti-capitalist as trans-capitalist.
I say that because socialism and communism require a roughly 6 hour workday to provide enough labor for the system. But the median value of labor will never rise again, because of AI and automation. Meaning that work hours will increase as pay decreases. Which is self-evidently unsustainable. Which means that the traditional alternatives to capitalism will most likely not be viable, but will still be used as straw men against the political left by politicians to lure in low-information voters.
I believe that we passed the tipping point around the time of Bush v. Gore in 2000, when we were set to widely roll out renewable energy and electric cars, but chose not to (see Who Killed the Electric Car). Instead we invaded the Middle East at the behest of the owner class to protect established industries around fossil fuels. We're only achieving some semblance of self-sufficiency 20 years later despite capitalism, not because of it.
Admittedly, I don't have much faith in the political system to correct itself. So I sympathize with the political right's sentiment that government bad. But the government is We the People in the US, so that's like saying people bad. Which is othering and division. As we grapple with the actual truth of our struggle and stop blaming victims for our collective plight, I have faith that we'll solve these problems, perhaps summarily. Until then, I'm manifesting a more independent/off-grid lifestyle in an attempt to provide resources that capitalism has so far failed to provide me beyond a subsistence level.
The proof of everything I'm saying is in the failure of any billionaire to challenge the status quo in a material way. They claim that their money is tied up in stock and they pay themselves a trifle. Yet we watched as Musk made $44 billion liquid to buy Twitter. Their FUD should be a rudder for the rest of us towards real answers and strategy.
Now I go back to my toil, hoping to win the internet lottery but knowing deep down that real work is in service to others. My separation from the real contributions to society that I would have made by following my heart is like being poor twice.
I too am a bit surprised that the billionaire doesn't do more but looking at Musk or the land grabbing in California for a new city for example, to get anything done requires dealing with haters and grifters and scammers at the speed of policy changes.
Eventually they give up and try to make a name and legacy.
Helping people is hard. Helping a lot of people is really hard.
I think about gasoline from the evil oil execs. I never had to return their product. It's always affordable compared the associated costs, and it's always available and convenient, and there's no discrimination. California gas would be 20% cheaper if it wasn't taxed 4x before use.
Can we stop rehashing arguments for planned economies; they are terrible because they ignore the million micro signals that drive the economic engine. Instead they over and under produce just about everything because the central planners have an impossible job. Furthermore, older socialist theories still operate under the assumption that production is the biggest economy, rather than service. You can't translate the theories since the value add of service economies are rarely bound by the "means of production"(factories) and the labor value add fluctuates wildly with skill which breaks any sense of worker solidarity.
Socialism isn’t a planned economy. That was one attempt, the Marx-Leninist attempt in the USSR, at socialism. Socialism is the fundamental reordering of society to benefit the lowest wrung. You can have socialism with markers still, which is what is done in syndicalist style socialism. You can have limited social programs as a form of socialism as per social democrats. Or you can have more extreme radical direct democracy. There are thousands of ways to implement socialism, not all of them are the same.
> You can have socialism with markers still, which is what is done in syndicalist style socialism.
Co-ops have never operated outside the bounds of a democracy with a State. Notwithstanding, they don't appear to scale very well. The most common use case is related to agriculture, though there's a single mid-scale company in Spain that ancoms like to tout.
No one wants to take on all the risk of starting a business while socializing all the profit, hence, we don't usually see these spring up. But if the model is so good for workers, naturally, you'd expect popularity to rise. They've been around a long time and we're still waiting for that to happen.
> You can have limited social programs as a form of socialism as per social democrats.
That's just mixed economy, part of the fabric of Liberalism. Socialism necessitates the elimination of Capitalism.
Capitalism is not markets. Liberalism is says nothing about social programs, liberalism is about unrestricted markets and decoupling people from castes and traditions.
Did you read your link to socialism? It agrees with what I said.
People always discover that certain things they want require centralized planning, like welfare, a strong military, or high tech goods. The problem with socialism in practice is that it always ends up being more about being anti-capitalism than pro-syndicalism or pro-direct democracy, so you always end up with a scenario where power gets more centralized to the state.
You can’t reorder society to benefit the “lowest wrung[sic]” without planning at least some extent of the economy through directed means. Yes yes, there’s a bunch of variations of this but they’re just window dressing for the underlying ideology, usually to make it more palatable for the less bureaucratically natured among us.
If the taxes are performed to make the economy just or fairer (as opposed to finding public necessities), possibly.
I understand the absurdity of it. We had taxes for a long time before socialism. And we obviously need taxes.
But a long-term criticism of the welfare state has been that it co-opted taxes from being a means to fund public services to a means to reward/rebalance/rework society towards politically favoured groups.
> Can we stop rehashing arguments for planned economies; they are terrible because they ignore the million micro signals that drive the economic engine.
The economic engine you speak of today relies on an astonishing amount of centralization, it's an illusion that it is some kind of 'organic' engine.
We have billions of literally biological brains making many economic choices every day. Our current economy is a very distributed organic engine, it wouldn't work unless everyone contributed by deciding what to buy with their money.
It has central parts but the main decider in the engine is what consumers choose to buy.
Which is influenced by what products consumers can buy in the first place and what products they know and have a good impression of - which is in turn influenced by the decision of large distributors and media companies etc...
This even before getting into financing and regulations.
This assumes that people have access to accurate, up to date and unbiased information to make informed choices about what to buy.
Yes they buy things, to what extent the things available/popular are the product of a free market vs established conglomerates having regulators in their pocket for example is highly debatable imo.
How many of these giants would survive without a steady stream of government contracts?
This is a great discussion. We should define what the engine is.
United States spends ~3% of the GDP in defense. Obviously this creates markets but there is a relatively centralized decision to spend that amount of money.
There's a book "The People's Republic of Walmart" that makes these arguments. Walmart is a massive company, as large as some entire countries even, that operates an internal economy based on central planning. They tell all their suppliers exactly what will be produced, in what quantities, when it will be delivered and largely what it will cost. Modern stock control systems and supplier integration make it feasible.
Calling walmart centrally planned is a massive mistake. Walmart is only responding to what its customers want. That is not central planning as it has ever been used to describe an economy. Central planners repeatedly tried to dictate what consumers want. Walmart is quite literally a market, the opposite of centrally planned.
Responding to purchasing decision by downstream consumers is what the USSR tried to. In theory you would buy things, the price would be slightly higher than the cost, and whatever was being bought more would be produced more, with the profit reinvested in trying to make new products and services. In practice organizing the production efficiently was too difficult due to a confluence of a dozen factors.
Point being, responding to consumer demand is indeed what central planning is supposed to do.
And in practice, every level that has a say in the central planning - even at Walmart - tries to impose other agendas. What they would like to see more produced and consumed as opposed to what the would be purchaser wants. In Russia it might have been that someone wanted to drain off some money, while they knew some regional admin who wanted their figures to look good, etc up the chain. Result: garbage tractors and not enough of them. In the US, with central planning, gas engines are penalized or electrical ones are pushed - whether you think this is a good reason or not.
At least in the US, if Walmart central planning insists on procuring crappy paper towels, there is a good chance that their competitor Target, literally across the street, is at least ignoring them and perhaps even deliberately exploiting their mistake.
Free economy doesn't mean that a business shouldn't try and plan the hell out of things. It means that each business planning process is not the only one around, and all these business are free to have various obsessions (ethical, religious, racist or whatever - none of them traps everyone in), and all these are free to have other blind spots and bugs, etc. They do have bugs. They look for each other's bugs and respond to them.
> they over and under produce just about everything because the central planners have an impossible job.
A free economy is full of over and under production also - probably because exact production is an impossible goal. I feel the better difference is in how free and responsive all the actors can be. Free to over-sheep in a bubble. Free to copy-cat when there is demand. Free to try and exploit any perceived imbalance. Responsiveness and freedom from dogma is a more important characteristic?
I agree that the labor theory of value isn't useful, and pricing signals are more responsive than any command economy has yet been able to achieve.
However, overproduction is also a problem in capitalism, from a lot of perspectives. The profit motive assures that surpluses are produced, sometimes absurdly bountiful surpluses, and then must be consumed. In the short term, many businesses will fail or be amalgamated if their inputs are too abundant and can no longer support a profit margin. Long term, capitalists will arrange the economy such that surpluses will be consumed by the creation of new desires, rentier capitalism on the necessities of life like housing or healthcare or education, or, failing that, wars.
I'm not saying this is the only factor creating an insatiable loop; humans are pretty good at that by themselves. What's different about capitalism is that there just aren't any brakes you can apply, anywhere.
Are there solutions? Well, we could go back to before capitalism, but that wasn't so great either. When Adam Smith wrote his treatises, the prevailing view among elites was that giving the poor more wealth was a bad thing. It was more important that they be obedient and content with their lot. Smith correctly saw that it mas moral to increase the general wealth, and the wealth of the people was (roll title) the wealth of the nation. So Smith's insight was an important corrective.
I wouldn't want to go back to a system where elites arranged things so that I would be virtuous and poor. By many standards, I live a better life than an elite of the 18th century. But I also am part of a system that has no brakes at all, even as life becomes increasingly frantic and the externalities are piling up all around us.
I'm not sure it's fair to say that it's the government's fault since capitalism has pretty much trounced good governance, at least in the countries where I live in. It's not politically possible to do things that reduce the power of capitalists, even if they are widely popular.
I don’t have to be Adam Smith or elites to know how lottery winners from low end social strata end up.
One cannot simply drop wealth on poor.
So it should be a process.
Only problem we have now is that rich are getting more rich than poor are getting wealth. Where ideally rich could get more rich as poor get out of being poor but they also should be bound by process and timelines.
I think taxing any wealth that will last longer than one lifetime will be needed. But it has to be real and not that ultra rich hide wealth in bs trust funds.
> I don’t have to be Adam Smith or elites to know how lottery winners from low end social strata end up.
Is this actually true or just an appealing stereotype? I have no idea about any studies that looked into this. A quick google brings up this slate article[1] which seems to indicate most lottery winners are doing fine.
I’ve visited this site so many times before. I’m going to be frank with you. I’m not anti-socialist (I’m literally a communist myself) but I still believe that this off-topic, as this may not be the place for partisan economic discussion.
Is this supposed to be profound? It is literally devoid of any argument and is functionally equivalent of saying ”people in ideological group X are so dumb they don’t even understand their own ideology lol”. You could re-use it for any ideology, religion or conviction and it’s equally intellectually vapid for each.
It is an observation that well established, non controversial, principles of economics such as the effects of price controls are still challenged by socialists. Are socialists ignorant of economics or something else?
Example #1: Rent control. Why do socialists continue to demand rent control? Promoting better, cheaper and abundant housing for everyone is an excellent cause. It is critical to understand exactly how to achieve that outcome. Econ 101 classes all over the world teach the basics of supply, demand and pricing. These are well understood concepts that anyone involved in public policy should master.
Paul Krugman is as liberal as they come and a Nobel prize winner in economics. This is what he had to say about rent control in NYT:
"The analysis of rent control is among the best-understood issues in all of economics, and -- among economists, anyway -- one of the least controversial. In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that ''a ceiling on rents reduces the quality and quantity of housing.'' Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand. Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go -- and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended? Predictable. Bitter relations between tenants and landlords, with an arms race between ever-more ingenious strategies to force tenants out -- what yesterday's article oddly described as ''free-market horror stories'' -- and constantly proliferating regulations designed to block those strategies? Predictable."
I'm pretty sure this is not a valid Hayek quote. Hayek was not known for being unnecessarily confrontational (or pithy), so it doesn't sound like something Hayek would write or say to me.
I've searched for proper attribution and been unable to find it.
The article is talking about socialism. It does everyone a disservice to come in here, blur the lines, and post a trite self-satisfied comment like this.
Speaking of Communism "the goal" (classless, stateless ) vs "the philosophy", then that's a nonsensical statement. What preceded in Russia and China was precisely meant to advance Communism.
Trivially evident by answering the question: how does one "try" Communism? You have few choices: State Socialism, or anarchism, by way of vote or revolution. That has definitely been tried, with catastrophic results.
It's a pretty well written piece. I think people from all perspectives should take careful note of what he is actually advocating: discussing and figuring out the mechanisms of what a modern society should like rather than blindly following an agenda.
That said, this is a 70+ year old article, based on ideas and problems at the time. Capitalism will make people stop working and be less productive? If anything we worry about the opposite problem. College will only be a means to a career? Today academia is powerful and a political force unto itself. And we have so many welfare programs and safety nets and worker protects than Einstein was even able to dream about in 1949. In a way, we are living in a world he was advocating for.
If it was written today, I have no doubt Einstein would still care about inequality and education and politics and common "workers" enjoying life. But I also don't think I would see him caring as much about Marxism and the labor theory of value specifically as a mechanism for understanding it anymore.