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Reform capitalism or face revolution (latimes.com)
99 points by jdc 41 days ago | hide | past | web | favorite | 112 comments



The problem with the idea of "revolution" is that it assumes that some group, however small or large, has the panacea for fixing things up or maybe worse, the willingness to destroy things and find out what to build in place as time goes.

But no one can guarantee a revolution will improve things in any measurable capacity. The risk therefore, is enourmous. And in the process, people suffer, die and things can become permanently worse.

I believe than in the face of a problem, a slower pace of experimentations and careful, but meaningful changes are a safer and probably more effective approach.


The problem is a lot of people are already dying because of the current system. If you are in that situation, the downsides of revolution aren't really relevant.


I agree.

I would argue that a revolution is statistically something negative, and that if we can avoid it, we should.

But, It is a last resort, if there are no other options left, revolution is the one option that "the elite" cannot remove.

The reason why some people seem to be arguing for a revolution is that they have lost hope in there being other options.


>has the panacea for fixing things up

There are many people that believe there is a simple, obvious panacea, e.g.: "get money from the rich and give them to the poor".


Revolutions are generally predicated not on possessing solutions, but dissatisfaction, means, and opportunity.


Rich and powerful people will never accept even the most of the "slower pace of experimentations". Nothing of value was obtained without blood, unfortunately


"Nothing of value was obtained without blood, unfortunately"

That's a pretty big statement and completely false. Every single day things of great value are obtained without blood.

One thing people could do to change things politically is not to comply collectively, pressure the government via social media, protest peacefully and firmly etc.


funny thing about NEVER...we would never had Magna Carta without believing the commoner could over come this

King John was turned around..so can rich people be turned around...not all revolutions are fast and violent

some are slow and very subtle


The American revolution was led by rich and powerful people.


There are cooler heads like Warren Buffett that have been telling this for what, decades?



He's definitely part of the problem, and not part the solution.


Telling is a whole lot different than doing something about it. And definitely not investing (and even giving advice about it) into Capitalism doesn't help.

But I guess, it's not replace but "reform". He probably wants to secure his spoils.


Where is he with the give away pledge?


Is there any indication that people actually understand (and can mathematically demonstrate) how to fix this, or are all suggestions going to be based on economic or political ideologies?

I'm not an expert, and I've heard many times the thought that macroeconomics is simply too complex for anybody to understand, so you constantly retreat back to "my political tribe vs your political tribe" instead of treating this as an well understood equation that has many perfectly valid solutions that can be explored.


It's less of a "tribe" thing and more of an analysis of material conditions. People don't break out the guillotines if their lives are stable and their material needs are adequately taken care of; if they don't think there is something better on the other end of the blood bath.

The same way people don't join unions if they think they will make less money because of their union dues. They do these things as a means to improving their material conditions.

The problem is that one "tribe"'s material conditions are at the expense of the others. You can't increase wages without decreasing profit. So the profiting "tribe" is at odds with the wage "tribe".

I'm scare-quoting "tribe" because the traditional word is class which we've had ironed out of us over the last 40 years. This is class struggle and has existed for a long time.


> The problem is that one "tribe"'s material conditions are at the expense of the others. You can't increase wages without decreasing profit.

But while there are certainly many small businesses for which this is not true, for the billionaires and Fortune 500 companies, increasing wages would not decrease profit enough to actually change their lifestyle. At least for many, all it would change would be the number they see when they look at one of their many bank accounts.

In the meantime, the low wages mean that the "lifestyle" of a great many in the US is that of working poverty, not knowing whether they will be able to make rent and food in a given month, and certainly not being able to afford much in the way of leisure.


>The problem is that one "tribe"'s material conditions are at the expense of the others.

This presumes a closed system, and the assumption is demonstrably false in at least two ways. With an open system, you can conceivably have growth for both sides of the market (profit and wages).

For one, we are extracting energy and resources from nature, and the supply - at least of energy - is effectively unlimited. Longer term we can also mine the resources from outer space, which again is effectively unlimited. Granted, there are constraints on how quickly we can build out the gathering infrastructure for either, but there is no hard cap. Moreover, with the improvements in efficiency (economies and environmentalism go hand in hand here) we're reducing waste and reusing a lot resources and energy that would've previously been wasted, again moving the needle away from resource limitation and towards open-like system.

For another, the discussion is implicitly about USA (and similar case can be made for EU), meanwhile there's well known trade imbalance with goods purchased from abroad. Getting close to, or at, the point of balance is feasible; the current imbalance is result of difference in economical conditions and governmental policy.

The goods imported from abroad are specifically the ones that are mass-manufactured, which is where the wage laborers gets their wages from. The suppressed demand for local manufacturing suppresses wages of workers within USA (similarly, within EU).

Effectively we have outsourced the growth of wages to other countries. Making the source countries richer obviously has important benefits (stabilizing them politically, long term making them interested in clean environment, etc.), but it is a policy choice that needs to be balanced with in-country prosperity none the less.

And then there's the matter of changes in supply of workers, but that's a whole different subject for another day.

All in all, sure, reform capitalism: improve the trade balance, let the wages recover due to the demand that's already present, just supplied for from elsewhere.


> This presumes a closed system, and the assumption is demonstrably false in at least two ways. With an open system, you can conceivably have growth for both sides of the market (profit and wages).

Unless you're proposing we print money, it is a closed system. There is a relatively finite amount of money, growth, and consumption in any economy.

We've seen over the last 40 years that without concerted effort on the side of the working class, the owning class will keep and push wages low while keeping the gains of growth to themselves. It's well known that efficiency has increased while wages have barely grown.

No one is going to willingly share their profit with you, especially the lower you are in your income / skill level. That's why the average McDonalds employee in the US creates about $70,000/yr in profit and receives on average $18,000/yr.


>Unless you're proposing we print money

Yes of course; with a quarterly growth GDP currently around 3%[1], we should and indeed do "print" money at related rate. (again, with the assumption we're discussing USA here).

However my argument hinges on two other aspects: the system is open in regard to energy gathering and resource gathering. The system (again, assuming we're discussing USA) is also open in regard to outside trade - USA can't completely control the policy and state of economy of trade partners. Are you proposing we close up the borders and/or cap energy & resource extraction & waste recovery?

>without concerted effort on the side of the working class, the owning class will keep and push wages low while keeping the gains of growth to themselves

A salient observation.

>It's well known that efficiency has increased while wages have barely grown.

It is also well known the pool of labor supply has grown significantly.

I propose we slow down the supply of labor a bit, to help the price of labor go up naturally, without any forceful methods. Care to join me on this quest? It works well for every segment of work market where it's implemented: doctors, lawyers, licensed engineers, you name it.

[1] https://www.cbsnews.com/news/us-gdp-grew-3-2-in-the-first-qu...


Is it safe to say that, if the conditions of the lower and middle class are perfectly favorable, people are living healthy, productive, happy lives and there is upwards mobility for those who are willing to do whatever it takes to dedicate their lives to it, then wealth inequality in and of itself isn't the thing we need to optimize for?

Wealth inequality seems like a proxy metric for "the lower classes are struggling". Is the correlation (or causation?) between the two well established?


In general, people will put up with a lot of governmental issues so long as their own personal lives are fine. There are still issues with wealth inequality leading to some groups having an outsized influence in government which is a concern.


That's totally fair. Is there a way to separate wealth inequality from power inequality? e.g. Let's say I'm ok with Steve Jobs hoarding billions of he creates something game-changing for society over decades of starting/running a business, as long as that doesn't mean his vote is more important than that of an entire state.

Does this boil down to the fact that, in the current political system, wealth can be traded for political power, and if that exchange didn't exist, then wealth wouldn't be an issue in the first place?


> Is there a way to separate wealth inequality from power inequality?

No. Money can buy manpower, resources, time, and political access. Power can buy the laws in your favor and access to resources and manpower and make time in your favor.

> Let's say I'm ok with Steve Jobs hoarding billions

The surplus should have went to the workers. The fact he uses the surplus as his primarily personal slush fund to then reuse is an abomination.

> he creates something game-changing for society over decades of starting/running a business

Anybody could create something game-changing for society. Just because someone isn't acting for shitty SV style actions (make money on exploiting others), doesn't mean it could be game-changing. And people could start doing once their wages were not stagnating and held down.

> as long as that doesn't mean his vote is more important than that of an entire state.

It was worth that much, and other CEOs it too is worth the same.

I've seen time and again the refrain of "We'll bring good jobs in this area, give us a 10 year tax abatement, and do all these improvements". Long story short, the jobs suck, the company moves in free of taxes, sucks off the teat of the city, and then leaves for somewhere else to start the scam all over.

The deal (power) sounds too good with all the money surrounding the plan. And, it is. But Mr. Mayor gets to take claim of a pile of jobs, new industry, and something about revitalization. By the time the smoke clears, Mr Mayor will be long gone up the political foodchain.

Money and power go hand in hand. Power can be converted through time into money. And Money can be converted into power over time.


There is probably a fair exchange rate between CEOs and workers (depending on the risk taken and so on), but naturally, when workers are not in a position to freely negotiate (due to lacking bargaining power, lacking other employment opportunities, lacking other means of keeping themselves healthy, fed and warm), that point is somewhere muuuch lower than the current share of profit going to them (and to capital, in general).


"Does this boil down to the fact that, in the current political system, wealth can be traded for political power, and if that exchange didn't exist, then wealth wouldn't be an issue in the first place?"

I think so. Finding ways to completely eliminate that exchange is a challenge, however. Most of the exchange exists in wealth being able to buy a louder voice, either through lobbying or in the media. It would hard to break that without introducing some other inequity.


>> Is there a way to separate wealth inequality from power inequality?

Why does money buy power? As state control expands and authoritarian thinking is embraced by both parties in the United States, there is more centralized power TO purchase.

It is in everyone's best interest at the top (politicians and billionaires alike) that government continues to expand the size and scope of their aims, while keeping taxes low. Not so much for the average and poor people, but this seems obvious.


By saying that “both parties” are embracing authoritarianism, all you are doing is being useful to the clearly, unabashedly authoritarian party currently busy consolidating its power.

It’s just empirically untrue propaganda.


Knocking down strawmen left and right, I'm impressed. Or just the strawmen on your right in this case, I guess.

Both turn to authoritarianism to solve their problems. One party just happens to be more moral in doing so. That makes them preferable, somewhat. But friendly to libertarianism, neither party is, and calling it for what it is doesn't make me an ally of anyone.


In a libertarian system money is directly power. Of course, above a certain threshold of power consolidation power buys money.


I used to think that would be the logical result, but increasingly I'm convinced it's the relative not the absolute level of wealth, power/freedom and access that makes the difference in political stability.


> Is there any indication that people actually understand (and can mathematically demonstrate) how to fix this, or are all suggestions going to be based on economic or political ideologies?

This is an engineer's mindset, but human society is not a purely logical system. Ideology has to be a part of the conversation, because wealth inequality is about our values. Do we want a world in which a small number of people control most of the economic and political power, or do we value a world in which wealth and power are distributed more evenly? This seems like a relatively obvious question for me.


Do you believe that wealth has to be distributed equally or do you believe that some people earn more of the pie because of their own skills, efforts, and risk taking?


I do believe that -- in fact, I have no problem with a relatively modest income and wealth inequality. However, the wealth and income inequality that exists in the United States is far beyond that. In the United States, the top 1% controls 35% of the wealth in this country, while the bottom 40% controls less than 1%. This isn't just a difference in skills, effort, and risk-taking. This is flagrant exploitation and domination by the rich and powerful.

Furthermore, I don't believe that Jeff Bezos or any CEO has a claim to their billions. I agree that "billionaires are a policy failure" -- no one person has any right to that much wealth. Amazon's success is not solely attributable to Jeff Bezos, it was the work of thousands of employees and built upon publicly-funded technology research. That wealth should be distributed to society at large, not controlled by one man.

If you find yourself defending billionaires, I wonder, why? Do you think you will someday be a billionaire? If not, then billionaires are not your friend. Their money is money that is taken from your pocket, and the collective pockets of our society. The traditional argument for wealth inequality is "a rising tide lifts all boats", but that has been empirically false since the 70s -- despite a massive increase in wealth, most of it has gone to a very tiny portion of our population. And if you're not part of that population, what on earth do you have to gain from defending them?


One small point: 'their money is money that is taken from your pocket'. I wonder how you work that out. We buy from Amazon (if we do) because after consideration we reckon on getting more value, in its broader sense, from that supplier than from elsewhere. We have a choice. Amazon would go bust in short order if that value was not perceived to exist. And of course the same (with exceptions mostly due to government interference) happens with all other businesses. Wealth creation is not a zero sum game.


You're talking about one aspect of businesses -- their relationship with their consumers, which generally is not exploitative (although there are obvious exceptions).

However, Jeff Bezos's relationship with his employees is exploitative (especially warehouse employees). Consider also his relationship with publicly-funded research. We as taxpayers pay for public research, we helped pay to build the internet, and yet we don't see any dividends for that money.

Also, the mere fact that one person controls that much wealth is problematic politically. Jeff Bezos owns one of the largest newspapers in the world, which concerns me greatly. He has tremendous political influence in Seattle, and has been able to bully other cities into giving into his demands for HQ2. Massive amounts of wealth comes with it massive amounts of power, and power is a zero sum game.


Indeed, the only contribution we see is a tiny bit of corporate taxes for the billions of dollars of public research Amazon and especially others use.

This is, depending on point of view, either a failure of the patent system (government cannot directly patent nor license) or of taxation, or both.

Oh the low level, additional failure of laws promoting economic growth such that employees are evaluated by the company and paid any low offer with no recourse. This could be either fixed by unions (though these like dramatic not everyday negotiations and tend to produce fiefdoms) or again government, not necessarily directly central, setting and overseeing wage standards based on their globally agreed policies.

In short, introducing an intermediary who can negotiate with clout and is not easy to buy. (As seen in the past, union leaders and politicians are easy to buy.)


After Amazon drives others out of the market and changes the barriers to entry it is in a monopolistic position and that has a natural premium to to it.

The value consumers perceive is there in part because there are very few healthy other sites. For a lot of products probably zero. (Size matters after all.)


> That wealth should be distributed to society at large

Ok, let's say we do that--a 100% wealth tax on any personal wealth over $999,999,999. So Bezos forks over everything he has over that, and we distribute it.

First, how do we distribute it? Let's say we just divide it up equally among all 325 million Americans. That's about $370 per person. Wow.

But second, what happens once we finish distributing? What are most people going to do with that $370? Spend it on something. How many people are going to make that $370 grow? Not many. Which means, in practice, all that wealth will just concentrate again. If most of the people spend the $370 buying something on Amazon, a lot of that wealth will just end up back in Bezos' pocket.

In other words, redistributing wealth can temporarily make things more equal, but they won't stay that way.


First off, Jeff Bezos is not the only billionaire, so your $370 number is off. Second off, there's more that the government can do other than cash payments to individuals, they can invest in infrastructure (like education, housing, public transit, etc.) which pays long-term dividends to society. The wealth from this tax could be used to fund a public bank, which re-invests it and pays dividends back to the community. I'm not advocating for a specific policy proposal -- there exist many -- I'm defending the general principle that concentration of wealth is unethical and ought to be redistributed. Once you agree with that principle, you can work out exactly how best to do it, but that principle is necessarily an ideological one -- one that says that money and capital should serve the needs of the people, not the wealthiest corporations.


> Jeff Bezos is not the only billionaire

True. You might get it up to a few thousand per American if you counted all billionaires.

> there's more that the government can do other than cash payments to individuals, they can invest in infrastructure (like education, housing, public transit, etc.) which pays long-term dividends to society

Sure, spend the $1T or so you would get from all the US billionaires on infrastructure. That's a decent fraction of US federal spending--for one year. Then it's gone. Now what do you do?

What all of this leaves out is that wealth is not a zero sum game. Wealth gets created. If you want to reduce wealth inequality, you need to help more people create wealth, not try to take it away from people who have already created it.

> I'm defending the general principle that concentration of wealth is unethical and ought to be redistributed

I don't agree with this principle. But I might if you added a qualifier; see below.

> money and capital should serve the needs of the people, not the wealthiest corporations

Jeff Bezos made his billions by serving the needs of the people; that's what Amazon does. Lots of people shop there because it gets them the stuff they need, when they need it, for an affordable price.

Another way of putting what I've just said is that Bezos, in creating and growing Amazon as a corporation, created lots of wealth. A huge, efficient distribution system for lots of goods people want now exists that didn't exist before; that's a huge creation of wealth.

But lots of billionaires didn't get their billions that way. Lots of them did so by not creating any wealth at all, just transferring wealth from other people to themselves. For example, investment banks transfer wealth to themselves by taking advantage of asymmetric information to get other parties to accept the wrong end of zero sum trades. (For that matter, the entire US banking and financial system transfer wealth to itself by getting the Federal Reserve to print money that they use for loans.)

So if you were to modify your principle to say that concentration of wealth that does not involve wealth creation is unethical, I would agree with you. But that wouldn't be fixed by redistributing Jeff Bezos' wealth. It wouldn't even be fixed by redistributing the wealth of all the investment banker billionaires. You would have to shut down the Federal Reserve and re-engineer the entire US monetary, financial, and banking systems.


>Sure, spend the $1T or so you would get from all the US billionaires on infrastructure. That's a decent fraction of US federal spending--for one year. Then it's gone. Now what do you do?

Again, you're interpreting my moral claim (billionaires are a policy failure) as specific advocacy of a one-time wealth tax on billionaires and no other shift of U.S. policy. I believe in a massive shift in U.S. economic policy to the left, which would entail a number of different reforms aimed at reducing wealth inequality over the long-term.

>What all of this leaves out is that wealth is not a zero sum game. Wealth gets created. If you want to reduce wealth inequality, you need to help more people create wealth, not try to take it away from people who have already created it.

You need to do both. I never advocated for merely expropriating billionaires' wealth and making no other policy changes.

>Jeff Bezos made his billions by serving the needs of the people; that's what Amazon does. Lots of people shop there because it gets them the stuff they need, when they need it, for an affordable price.

Jeff Bezos made his billions by exploiting his workers. Despite the fact that they built the company and do almost all of the work that makes Amazon possible, he reaps all the profits. Workers built Amazon, not merely Bezos alone, and you're totally erasing everyone else's contribution.

>Another way of putting what I've just said is that Bezos, in creating and growing Amazon as a corporation, created lots of wealth. A huge, efficient distribution system for lots of goods people want now exists that didn't exist before; that's a huge creation of wealth.

The technology that enabled this massive creation of wealth wasn't created by Bezos though, it was created through publicly-funded research. Why is Jeff Bezos a billionaire but not Tim Barners-Lee, when by any measure he did far more to enable the creation of wealth? And again, like I said earlier, it is a huge creation of wealth, but that wealth goes into Jeff Bezos' pockets, not ours, nor his workers'.

>Lots of them did so by not creating any wealth at all, just transferring wealth from other people to themselves.

All billionaires get their wealth this way, by exploiting their workers. Furthermore, all the big tech companies participate in anti-competitive behavior (vendor lock-in, etc) which benefits them individually but hurts the wealth of society as a whole.

There's no reason, for example, a publicly-owned or worker-owned company could not have accomplished what Amazon did. All they would have needed is sufficient access to capital -- the basic technology already existed & wasn't created by Amazon, they just built the institutional structure.


> Again, you're interpreting my moral claim (billionaires are a policy failure)

Complaining about poverty is addressing a serious problem.

Complaining about some people having more money than you just screams envy and childishness.


These are two sides of the same coin. Our economy is structured so that wealth is concentrated at the top. This isn't just something that happens, it's a result of specific policy decisions. It went hand in hand with the dismantling of unions and the social safety net in this country in the 80s and onwards.

Regardless, if you're not a billionaire capitalist, why are you on their side? The rich are cognizant that capitalism is class struggle and openly state so, so why do you ally with them when they fight against you and your interests?


> These are two sides of the same coin.

No, they really are not. One is driven by envy and petty jealousy, and the other is motivated by a legitimate concern that someone might be living in poverty.


> Complaining about some people having more money than you just screams envy and childishness.

Where did he do that?

> No, they really are not. One is driven by envy and petty jealousy, and the other is motivated by a legitimate concern that someone might be living in poverty.

Screw off with the ad hominem. It doesn't suffice in lieu of a point.

> Complaining about some people having more money than you just screams envy and childishness.

So by your logic if you are poor and mention billionaires and income inequality then you are envious and full of petty jealousy. Therefore, only people who are well-off are able to even bring the subject up without being labeled as such. People who are well off have a vested interest in not bringing the subject up, as they maintain a comparative advantage with a cheap, underpaid supply of labor in their economy.

Every now and then, however, a well-to-do and handsomely paid software engineer with a conscious will bring up the subject. In which case, you can simply move the goalpost and label him as having petty jealously since they are probably not a billionaire.

In your framework, an economy with fatal inequalities will not be fixed. That's how you get revolutions.


> Where did he do that?

Everywhere. It's the central thesis. All statements were rooted on complaining about how some people are rich. If you remove them you're left with no assertion at all.

> Screw off with the ad hominem.

Excuse me? You're actually making that statement in defense of a personal attack based accusations of how someone is "on their side"?

> So by your logic if you are poor and mention billionaires and income inequality then you are envious and full of petty jealousy.

That's correct.

You can also pick other scapegoats such as the queen of england or Bill Gates, but they are not the reason why there is still actual poverty and malnutrition in the western world. You don't attack poverty by mounting petty propaganda attacks on the mega-rich.


>they are not the reason why there is still actual poverty and malnutrition in the western world.

Why is there poverty and malnutrition in the western world if not because of capitalism? Neoliberal capitalism has been the dominant economic system in the west since the 80s.


You're asking the wrong question. The right question is, why is there nothing else but poverty and malnutrition everywhere but in the western world? The answer: because in non-western societies, nobody has any incentive to create a lot of wealth, so they don't.

In other words, the problem is not that there are some people in the western world who are poor and malnourished. The problem is that the western world is the only part of the world that has a significant number of people who are not poor and malnourished. If the rest of the world would stop chasing after leftist chimeras and adopt neoliberal capitalism, they could create a lot of wealth too. The western world is way, way ahead in bringing people out of poverty and malnutrition.


This is ahistorical nonsense. The west industrialized hundreds of years ahead of the rest of the world and spent a century and a half plundering the global south. Regardless, China has managed to almost eliminate extreme poverty and hunger despite following a model very different than neoliberial Capitalism. As was the Soviet Union. Not defending these regimes, just stating a fact.

The majority of the world does follow neoliberial Capitalism and has for decades. And it has totally failed to reduce poverty. Almost all global poverty reduction since the 70s has taken place in China.

You also neglect the role of imperialism. The west has acquired much of its wealth through exploitation of the global south. So of course they are wealthier, because they have stolen wealth from everyone else, trapping countries in debt or dependence and overthrowing any regime that challenges neoliberial rule. Leftist regimes have done phenomenally well given the global economic context they live within -- Cuba has a similar life expectancy rate to the United States and phenomenally low malnutrition among developing Nations. China and Vietnam have experienced staggering economic growth for decades. Just compare India and China in this regard -- a country totally dominated by Western imperialism vs a left wing government that managed to forge its own development path


We evidently aren't living in the same reality so it doesn't seem like discussion will get anywhere.


You ignored my point - that the concentration of wealth is an inhibitor of solving poverty, and you failed to explain why you feel the need to defend billionaires' interests when they couldn't care less about yours, unless you're a billionaire.


> you're interpreting my moral claim (billionaires are a policy failure) as specific advocacy of a one-time wealth tax on billionaires and no other shift of U.S. policy

No, I'm disagreeing with your moral claim and illustrating how any policy that does not allow for creation of wealth is doomed. And any policy that does allow for creation of wealth needs to consider the reasons why people are willing to do it. Historically, satisfying leftist social and political dogma has not been among those reasons.

> The technology that enabled this massive creation of wealth wasn't created by Bezos though

Yes, it's true that wealth creation is never done in a vacuum--it builds on previous wealth creation. The technology that enabled Amazon's massive creation of wealth was another massive creation of wealth. Some of the initial technology for the Internet was created through publicly funded research, but the actual buildout of the infrastructure, along with optimizing the technology for a global network--the actual creation of that massive amount of wealth that connects every computer in the world to every other--was done by companies wanting to make money by selling Internet services.

> All billionaires get their wealth this way, by exploiting their workers

This is your opinion, not fact.

> all the big tech companies participate in anti-competitive behavior (vendor lock-in, etc) which benefits them individually but hurts the wealth of society as a whole.

Then why not focus on the anti-competitive behavior, instead of trying to remake the entire society in your leftist image?


>Then why not focus on the anti-competitive behavior, instead of trying to remake the entire society in your leftist image?

because my leftist image is good


Really? Please show me all the wonderful countries built in your leftist image where everyone is rich and nobody has to worry about poverty.


Socialism is a material struggle, it isn't an idealist Utopia where everything is perfect. It's a process. And most socialist regimes have been in the developing world, which had much less to work with and much weaker infrastructure. Regardless, China has lifted nearly a billion people out of extreme poverty over the last 40 years. I also think that Cuba's accomplishments have been admirable, despite decades of aggression and embargo from the United States. You may compare these regimes unfavourably to a developed country, but that's an unfair comparison, because they weren't developed countries before socialists took over. Compare them to other, capitalist countries in the global south and I think there is no question what model works better


>> Jeff Bezos made his billions by exploiting his workers.

You keep stating this like it an absolute fact. It is an opinion. And while it is true in some cases, it is definitely not true in the majority of them. If it is, please show your work that the majority of Amazon workers have been specifically exploited by the actual definition of the word, not "we paid them less for their labor than we got value out of it," which is called "running a business," not exploitation.

>> Why is Jeff Bezos a billionaire but not Tim Barners-Lee, when by any measure he did far more to enable the creation of wealth?

Building the best mousetrap does not entitle you to billions of dollars. This is a feature, not a bug.

>> Despite the fact that they built the company and do almost all of the work that makes Amazon possible, he reaps all the profits. Workers built Amazon, not merely Bezos alone, and you're totally erasing everyone else's contribution.

No, he does not. Have you heard of shares of stock that are publicly traded and also offered as a form of compensation to employees, which are literally exactly the opposite of what you are saying?

>> There's no reason, for example, a publicly-owned or worker-owned company could not have accomplished what Amazon did.

Then.... why hasn't any done a fraction of what Amazon, Microsoft, Netflix, Google, and others have done?

Your arguments are literally false. The facts are not in dispute here, especially on the claims that Amazon reaps all the profits - a lookup on AMZN and the various shareholders of said financial instrument is all you need to know about that particular part.


We could do this all day, but the fundamental difference here is you look at the normal functioning of capitalism and think it is just and good, while I look at it and see it as highly exploitative, unethical and inhumane. I think concentration of wealth and power in the hands of an unelected few is bad, and I think the world that these people have created is also bad. I think that we as a species can, and must do better.


>> That wealth should be distributed to society at large, not controlled by one man.

It is distributed to society via jobs, construction, technology, and so forth.

>> And if you're not part of that population, what on earth do you have to gain from defending them?

Some of us do not believe the leftist alternatives being proposed are better. This does not mean we actually like the status quo. You are knocking down a giant strawman here.


>Some of us do not believe the leftist alternatives being proposed are better. This does not mean we actually like the status quo. You are knocking down a giant strawman here.

I'm trying to be fair here, what alternatives are you defending? I want a world where billionaires have less wealth and power, do you disagree?


> It is distributed to society via jobs, construction, technology, and so forth.

No...it's not.

A fraction of the revenue of Amazon is distributed in that way.

Jeff Bezos' wealth is, by definition, controlled by one man.


"Earn" is not an accurate term, even if you don't agree with political analyses that define profit/rents as unearned. The fact is, over 60% of the 400 richest Americans were born wealthy. https://inequality.org/research/selfmade-myth-hallucinating-...


> The fact is, over 60% of the 400 richest Americans were born wealthy.

Your propaganda piece does not state that. It quotes forbes stating that 70% of therichest 400 in the US made their entire fortunes from scratch, but then tries to put an ideological spin on the article by asserting that they were born "priviledged", without providing any definition.


I think talking about earning is inherently talking about the creation of value, right? Wealth is arguably the proceeds of past value, work income, or income from a new enterprise the proceeds of current value.

There are definitely benefits to rewarding creating new value, I'll grant that. The invisible hand of economics helps distribute value fairly between equals.

But often the rewards of value are monetary, and are captured by those who already have money and power because of past value creation, rather then distributed according to the contributions of all individuals who participated in work.

Power and money further distort the abilities of less fortunate individuals to gain just compensation for their efforts.

I see that as exploitative and problematic. I think it also arguably undermines new enterprises and new value that might have been created had the work that people were doing been rewarded in an equitable manner.

And it's not like this system of exploitation is new, so the wealth that has been accrued by families is itself suspect.


At a fundamental level, incomes (and wealth) have to rise proportionate to productivity.

Average employee productivity has increased a lot since 1970s but wages (and thus wealth) hasn't.

The top 1% on the other hand reaped the benefits of low capital gains taxation, rates of interest an economic downturn that didn't collapse them and hoarded wealth and political power.

With this hoarded wealth (and political power) and low taxes for the govt to run, they have jacked up prices of healthcare, education and housing for the masses. At the same time, they are lending more to various governments who now have to cut benefits for the masses.

To fix it, just reverse it. Take a few billions off of each billionaire and subsidizing state college education would be a good start. Redistribution is important for revolutions to not happen.


A couple of questions here, purely reasoning about the math:

It takes something like 400k to be in the top 1%. That's a decent FAANG developer 10 years into their career, that's not exactly Andrew Carnegie level of wealth. Are those people to be taxed more? 35% federal + 10% state tax in CA. Will more taxes on that bracket make that much of a difference to the country as a whole?

Let's say we were to skim a billion off of all the billionaires in the US. That's about 500 of them. Does that solve the problem altogether? The government makes 7 trillion every year, that's a one time increase of 7%. Does that make that much of a difference?


Federal taxes don't exist to raise revenue, because the USD is a sovereign currency (the federal government is the sole issuer of the USD). They exist to avoid inflation and disincentivise certain behaviour.

The real solution is to simply spend more money to elevate people out of poverty. But then the question everyone asks is "how will you pay for it?" and instead of answering with the correct answer ("deficit spending is not the original sin, the reason why we are deficit spending is the important question") most political candidates instead say they'll tax rich people.

It just so happens that reducing the amount of money and influence incredibly wealthy people have has its own benefits (less corruption and lobbying power for one), but revenue raising is not one of them.


Good question.

Let's just put things in perspective. In the 10 years that the FAANG developer took to reach 400k income, some born-with-a-silver-spoon asset holding trust fund kid made more than $1 million a year, with lesser taxes than the FAANG holder.

The question is who was more productive? Why was the unproductive person taxed less for their income on that capital gains?


You would optimize the equation for whatever parameter values that your political tribe likes, so the fight between political tribes would still exist.


https://en.wikipedia.org/wiki/Gini_coefficient

"...Gini coefficient ... is a measure of statistical dispersion intended to represent the income or wealth distribution of a nation's residents, and is the most commonly used measurement of inequality. "


I don't know if it's mathematically sound, but increases in wages (especially at the bottom) and increase taxation at the top will certainly help alleviate the problem.


I read a fascinating thing somewhere about how Communist Russia had a school of thought that was exactly that - that you could see the economy as an equation to be solved, and they tried their hardest to solve it.

There were a number of issues, including getting good data on production (why tell the truth if you'll be killed or demoted for not meeting your production quota?) and that there wasn't a mechanism that allowed sufficient granularity into the types of items produced which led to all kinds of weird excesses (they mentioned pipes, specifically: that you could get a ton of some standard sizes, but others that would have to be recalibrated for and so would slow down production were simply not made, but the numbers only showed "growth in industrial pipe" - that kind of thing.

The idea was that the system was too complex to really turn into a system of equations, so the free market one out.

The article then theorized that a place like China, without any privacy scruples and with a semi-centrally planned economy, might actually be able to get enough data to create and solve that equation.

I wish I could find the article for you, it had some really interesting historical references and links to economic thought in that kind of planned system I think you'd find fascinating. Maybe some other HN'er knows what I'm talking about!


I'm not familiar with that specific article, but the idea you're brushing up against is that of the planned economy. There was recently a book released (that I've yet to read) that concerns the modern viability of a planned economy and looks to megacorporations to prove the viability.

https://www.goodreads.com/book/show/38914131-the-people-s-re...


Another fascinating read on the subject is Towards a New Socialism: http://ricardo.ecn.wfu.edu/~cottrell/socialism_book/

It's a really interested look at planned economies taking into account the updates in computer technology.

It's also worth noting that while the Soviet Union wasn't perfect, for most of its history, income inequality was about 10-1 (extremely low), and inflation was virtually unheard of.


If everyone has no income, that would make inequality exactly zero, I guess.

You also can't inflate zero...

What I'm saying is that I think you're leaving out some key aspects of this analysis.


The problem is that there was an unofficial currency, party membership reputation, and the whole state and society played that zero sum game. This took a toll on ... things (income, wealth, health, education, etc.).



You might want to start with

https://en.wikipedia.org/wiki/Economic_calculation_problem

I think I might have seen a version of the article you're referring to, but I don't remember when or where.


This is just overcomplicating the issue I think. How many decisions are made with a detailed macroeconomic analysis? Trump is even trying to influence the Fed’s policy to make himself look better, that is the level of macroeconomic literacy in operation today. You either decide change is necessary and make it work accepting the consequences, or just give up I suppose.

Anyway, it’s not like no one has run the experiment of trying a different system regarding healthcare and minimum wages.


The fundamentals are pretty obvious. Wealth inequality is increasing. One way to fix is that more progressive taxation.

It doesn't happen, though, because the rich have passed a critical tipping point where their money buys them enough influence to get their taxes lowered, thus making inequality worse (witness Trump's tax cuts).


>"Nobody likes to give themselves credit for this kind of messaging success, but progressive groups did a really good job of convincing people that Trump raised their taxes when the facts say a clear majority got a tax cut." ~Matthew Yglesias, Senior Correspondent for Vox

This tweet has since been deleted, but there are many articles citing it if you want to verify it.


Trump's tax cut disproportionately went to the very wealthy. Some data on that here: https://www.bloomberg.com/graphics/2018-tax-plan-consequence...

The richer you are, the higher the percentage your taxes went down. And that's a higher percentage on more income, too, so if you look at total dollars per income level it's much worse.


That's exactly what I would expect out of a progressive tax system, and what I think any reasonable person would expect. When there is a tax cut, the people who pay the majority of the taxes get the biggest benefit. In the chart you showed, the approximately half of the population that doesn't pay any federal income taxes still got a tax cut. How much of a tax cut do you expect a person to get when their tax bill is already <= $0?

https://www.marketwatch.com/story/45-of-americans-pay-no-fed...


It doesn't sound like we're disagreeing? I'm saying that the tax system needs to be more progressive to better fight income inequality, and that the tax cuts made things less progressive.

And some responses to the claim that nearly half of Americans don't pay federal income tax: https://www.brookings.edu/opinions/five-myths-about-the-47-p... The biggest one missing is that a sizable number of Americans are either retired, too young, still in school, disabled, etc., and don't earn a meaningful amount of income for these reasons. Why would you even expect everyone to pay taxes when not everyone earns income??


I don't expect everyone to pay taxes. I'm not even supporting the tax cut. But when tax cuts are going around I don't expect them to primarily go to the people who aren't paying any taxes. And I think the vast majority of voters have this same expectation. So complaining that tax cuts primarily benefited only the people who pay taxes... that doesn't make sense as a complaint.


That is not what progressive taxation means, by definition. When lower income earners pay a higher proportion of their income than higher income earners, that is a regressive tax structure. https://www.investopedia.com/ask/answers/042415/what-are-dif...


We're talking about the federal income tax, which is the example given in that article of a progressive tax. The net result of our particular progressive income tax system is nearly half the country pays no income tax. I don't have a problem with that. I believe every reasonable voter understands that when a tax cut comes, it doesn't really benefit the people who aren't paying the tax to begin with.


If the wealthiest are de facto not paying as much tax, proportionally, as the middle or poorest classes, then federal income tax is not truly progressive. It has been increasingly regressive since the peak marginal rates back in the 1950s. This includes the use of numerous loop holes in the tax code to avoid what should otherwise be a large tax, and those primarily benefit the wealthy. The overall tax burden is what counts. For instance, some states do not have income tax for anyone, but they get much of their revenue from sales tax. Sales tax is regressive because the wealthy spend a smaller proportion of their money on sales tax than those who live paycheck to paycheck.


Contrary to the belief of progressive billionaires, I think the reform of capitalism will come in form of local "soft socialism". Localism just makes sense and can be accepted by both left and right-wing people.


People who write this stuff don't have a clue how revolutions work actually work.


Must have been an awkward position to be in, when you tell the billionaires who pay you to research history for them, that things don’t often work out well for them.

On a serious note though:

• 2017: “Huge Human Inequality Study Hints Revolution is in Store for U.S.” https://www.inverse.com/article/38457-inequality-study-natur...

• 2015: “PAUL TUDOR JONES: Income inequality will end in revolution, taxes, or war” https://www.businessinsider.com/paul-tudor-jones-on-inequali...

• 2013: “History tells us where the wealth gap leads” https://aeon.co/essays/history-tells-us-where-the-wealth-gap...


All those studies base there idea on revolutions long long time ago. Now we have high tech war machines and high tech spying software and machines.

Where you needed ten loyal people to keep 100 to not revolt, you now just need 1 to keep 10.000 silent.

I think the time for revolution is over.


> high tech ... I think the time for revolution is over.

Ironically, not even 10 years ago we were having exactly the opposite conversation https://en.wikipedia.org/wiki/Arab_Spring


Not in the country that is relevant to this post.


“This time it will be different.”

The six most costly words in history.


Maybe Skynet is already here.


Concomitantly the tolerance for abuse has dropped rapidly. It used to be the government was racist and often genocidal, and the public tolerated or participated. Nowadays you cannot shoot and kill some protesters nearly so blithely. The state is armed to the teeth because the fear is greater: the populace also has magnified powers.


Assuming a system reset is inevitable, avoiding war seems like a worthwhile problem to solve.


[flagged]


I'm with ya through the second paragraph... then what the hell happened? I agree, the problem to solve is compensating people commensurate with their production. I think of rent-seekers as something like the fat of the economic system-- required to some extent but quite detrimental in excess.


Maybe you should tell us who isn't part of the class you are describing. I think it will be a pretty small group.


Property is theft. :)


Ah yes, those evil professors, non-profit employees, and pharma employees -- providing their professional services for a modest wage.

If professors are responsible for ballooning higher ed costs then why have their numbers decreased (replaced by ad juncts) and their pay remained flat? How, exactly, are they siphoning off that money? Because it sure as hell isn't coming from their salaries or job prospects. Consider for example CS professors, who make only 1/3rd of what they would make in the private sector.

Blaming non-profit employees for breakdowns in for-profit employment is just confusing. How, exactly, is this mechanism supposed to work?

I suppose you blame nurses for ballooning healthcare costs?

And in your mind, who isn't rent seeking?

Are landlords and other real estate owners rent seekers?

What about owners of valuable real estate (real or virtual) who sell ad space?

What about owners of stocks and bonds who don't actually work in those companies or contribute to those communities?

Or only the teachers and pharma researchers and non-profit employees?

To be frank, it's hard for me to take a rant about rent seeking seriously when it complains by name about teachers and pharma scientists -- people who do actual labor -- but not about literal rent seekers such as people who own large amounts of stock or real estate.

chunsj 41 days ago [flagged]

+1 for revolution. We cannot fix capitalism or we will not fix capitalism.


We won't fix capitalism, because capitalism doesn't need to be fixed.


lolwut


I keep seeing this drummed up, but at the same time global stats show that we are living collectively and individually in the most prosperous time in human history, with record low rates of poverty. The divide between rich, poor and middle class are largely led by one thing...stock holdings, among other volatile assets (though this is not what the media reports, I mean most of them are public companies.) I feel like Joseph Schumpeter warned about this.

In the end, I think unlike most of the more radical ideas that are anti-market out there...people mostly just want better social safety nets. That's not a "reform" of capitalism, that's a reform of government.


A lot of people also want increased social mobility.


Mean != 10%ile.

Mean != 50%ile.

Sufficience for the poorest (or at least the bottom half generally) is necessary.


Global poverty is at an all time low, hundreds of millions of people have been lifted out of poverty in the past decade alone.

https://www.cnbc.com/2018/09/19/world-bank-global-poverty-ra...


That's talking mostly cross-purposes.

Inequality is most socially acute within a given society, culture, or country. And inequality, poverty, and social precariousness have been escallating in the US and other generally more advanced countries.

Most global poverty alleviation has occurred in one country and one country only: China. The level of poverty alleviation is also based on an extreme measure -- dollars per day ($27/day is $10k/yr). Which, yes, makes a tremendous difference, but it's not as if we're talking about middle-class lifestyles.

There's a whole host of other issues with the "the world is a better place" story -- yes, there is some truth to it, but if that's the beginning and ending of your argument, you've left out one hell of a lot of salient points. Many of which are causing very real pain for people across the advanced world, as their reality falls far short of their expectations. That is the sort of thing which can become exceptionally destabilising socially and politically.

And has.


Government will always be usurped by unrestrained capitalism, as that is the most competitive action. The dualistic thinking of your comment ignores this inherent flaw of having a system with basically unlimited potential concentration of wealth and power. Corporations and the wealthy become the government, because it is an advantage to do so. It's just like monopolies that naturally occur. Government just happens to be the biggest one. Corporations and the wealthy decide eventually that they do not need to pay a commensurate share into the public good, and they suck the economic vigor, health, and wellbeing out of the nations that they usurp because they are by definition those that have successfully hoarded more resources than others. Government has never been a truly separate entity from the wealth-holding class, except in cases of revolution (which all tend to return to baseline eventually).


I guess it depends how you define prosperity.

Personally I wouldn't say we're getting more prosperous. Household debt is skyrocketing, savings are plummeting, income has been stagnant for decades. Most women can't afford to be a homemaker even if they want to. And the gap between rich and poor keeps growing.




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