Hacker News new | past | comments | ask | show | jobs | submit login
Capitalism, Alone (glineq.blogspot.com)
89 points by ubac 16 days ago | hide | past | web | favorite | 80 comments



Branko Milanovic is one of my favorite researchers.

His "Elephant Curve" is well-know. His book "The Haves and the Have-Nots" is excellent.

I used his dataset to replicate his results to show inequality in an interactive form here:

https://income-inequality.info


This is great. I still remember seeing his India top ventile vs US bottom ventile chart ten-ish years ago, absolutely blew my mind.


This is so true. The upper middle class in India would probably be lower middle class in the US.

However, let's not kid ourselves. Cost of living in India is equally or ever more cheap. $1-$2 for lunch a day? Rent is only $200/month? My god that's cheap for people earning $20,000/yr as opposed to someone even in Mississippi.

The real losers anywhere are the bottom quintile in a highly unequal society.


I know this will sound unbelievable but I believe the comparison is done at purchasing power parity, so it's adjusting for food and rent as well. Here's the graph I remember, though it unfortunately doesn't confirm or refute my memory that the comparison is at PPP:

https://www.washingtonpost.com/news/wonk/wp/2013/08/15/this-...


The graph makes me suspicious about the PPP component (it looks like normalized to US dollars?). I mean if it is completely adjusted for cost of living and everything (rent, food, etc) this seems off. Half the world is at $2k equiv?

I don't know how you could live in the US if you just made $2k/yr. Even if rent was entirely free. I'm a grad student and eat a lot of lentils, rice, eggs, and beans. $2k a year is pretty easy to blow through on just food (That's $167/mo, which is doable but not reasonable). What am I missing that is being captured here? I literally don't know anywhere in the US (I've lived in some pretty cheap and desolate areas) that you could do $2k for just rent in a year. I mean the poverty level is like $12k and you have to find really really cheap housing and eat a lot of lentils and rice to survive on that.

What am I missing? Is 50% of the world that malnourished? Are things like food and rent not being explicitly bought and thus not included? Combinations?


sorry for late reply -- I don't want to over-state my confidence on this, it could be I was wrong about PPP, and even if it is PPP it's possible that the comparison is missing somtehing. But I think part of the answer to your rent question is that many people in the developing world are living 1) multiple people to a room, in 2) informal settlements/structures that would not be legal in the US. And I do think it's possible to live off ~$60 a month for food in the US if you literally eat oats, rice and lentils -- it's terrible, I hope that goes without saying, but if we're just talking about what's possible I think that can explain the numbers.

I too am suspicious. I think it would depend very heavily on what the basket of goods contains used in the calculation. Also purchasing the same things is not at all representative of living a standard lifestyle in each country (trivially consider a country that has religious prohibitions on certain foods, or course the prices will be wildly different). Or different expectations of what constitutes shelter, etc, etc. That said though, in my experiences traveling, it has been shocking to me how desperately poor people can be in some countries.


> That said though, in my experiences traveling, it has been shocking to me how desperately poor people can be in some countries.

This I fully believe. But also having lived under $15k/yr, I can't fathom how that placed me in the 93(ish) percentile. I could understand being in the 70th percentile just by merit of things like having a cellphone and internet but half (48.9%) the world's population is on the internet (up from 36.6% in 2013) and 35% of people have smartphones (66.5% have mobile devices). So there's something that I'm really missing. I do know that internet and cellphones weren't as ubiquitous in 2013, but if that's what's accounting for the different then there's been a huge and rapid shift but I'd also argue that something is wrong.

Clearly there's something I'm missing here. Because with my past experience this suggests to me that living paycheck to paycheck and being malnourished in the US(living in the <13th percentile in the US) still puts you over the 90% mark (world). I assume this would be similar in Europe. I mean I know we have a SIGNIFICANTLY higher quality of life here, but this suggests to me that 80% of the world has to be extremely malnourished. Lines like this confuse me

> Almost a third of the people had less than $1,000 to spend for the whole year, that's less than $3 per day on average!

Because I can understand that if you're in India or southeast Asia and those are $3 US. But I literally cannot figure out how that would be possible in the US. Assuming everything you have and eat is coming out of your pocket.

I'm really just curious. I'm going to go ahead and assume the economists know more about economics than me. I'm legitimately just trying to make sense of this.


Which book is the post referencing?


I would love to know what piketty thinks of him as it sounds like there would be some strong disagreements about the fundamental nature of capitalism.

In piketty's world the "utopia" we now live is a result of anti-capitalist forces that destroyed or reorganized wealth during the chaos of the 20th century.


One dimension not addressed is how individual people join forces as companies and effectively turn against other groups of people.

What would happen to the economy if we'd only allow companies of 1000 people, of 100 people, or perhaps even of 1 person?


This is a fascinating concept!

On one hand it would keep companies from completely vertically integrating or expanding to encompass many verticals. Which would stimulate the economy in one way because more people would be exposed to the profits at the top or near the top of the market. Also the increased competition might result in the improvement of various small aspects of technology that would result in better efficiencies across the whole.

But on the other hand, limiting the size of companies would make us less competitive on a global scale because of the inherent cost in being forced to buy components, as opposed to vertically integrating. Also product costs may increase, which could negate any increases in wealth among the people.


This is a super complicated topic and I'm not sure it could practically be done. Vertical and lateral integration usually result in huge cost savings. It also reduces complexity. But this is also a feature that monopolies (or monopoly like companies) exploit. I don't think it would be competitive enough if all players weren't playing by this rule. Competition is good, but so is size (think like Bell Labs [0] and how much Google can do). This is all completely a guess though. But monopolies aren't inherently had, they just usually are because they exploit that power to hinder innovation. Monopolies can actually have huge benefits.

[0] Bell Labs was an agreement that Bell could have the monopoly (to reduce wiring and because of the network effect that they could take advantage of to connect the US with telephone lines) but there was also heavy regulation done during this deal that I'm sure others here are much more informed about and can correct/add to my comment with.

[^] I don't think there's ever been a "free market" nor do I think there ever could be. The US's largest economic growth happened in a "free market" in name only (propaganda a lot for the Russians) but was heavily regulated.


Vernor Vinge's short story 'Conquest By Default' features an interstellar anarchic civilization which has such a rule-against-scale (in any organization, including 'governments') as its highest law. That civilization then encounters Earth, with a number of oversized nations.


Other such limits are welcome. An umbrella organization should be allowed to only partake in a certain number of categories of business, and in a limited number. Barely anything is being done to control the power equity has over the system many deem as "competetive".

But this won't change. You can't change the system to protect others from greed, when people defend greed. One day they might gain from greed.


Such arbitrary limits won't work, especially now. For ex: WhatsApp has about ~50 employes[0]. The kind of wealth and value you can create with few people in software is very dissimilar to other sectors which (at least for now) requires a large number of people involved to be viable.

Another issue is what do you consider as part of a company? In the case of uber, would it include all the drivers or are they there on individual companies?

I guess all this comes down to what you are optimizing for: Quality of life for a median human or overall inequality. I think right now it is optimized for the former.

[0]: https://en.wikipedia.org/wiki/WhatsApp


If it would have prevented WhatsApp from being acquired by Facebook, wouldn't that have been it working?


The parent is drawing contrast to other companies. For example, let's say you are an ISP. There's a clear network effect there as well. But obviously 50 people can't dig all the ditches and run all the hubs needed to take advantage of that when your country is the size of the US.


One practical way of imposing such limits might be to eliminate limited liability. If owners are directly responsible for corporate actions, that might provide a defacto limit on company size based on profitability, insurance costs and organizational control efficiencies. (And maybe the intrinsic possible externalities ofa particular business.)


And lower liability limits so that if you, say, pollute a river, all owners are personally liable.


I've made this point before on HN, from a slightly different angle. Part of the problem with capitalism is that it's a monopoly. From about 1930 to 1980, communism was a serious ideological competitor. Capitalism had to deliver a better standard of living or risk being overturned by vote or revolution. That kept capitalism honest.

This was a mainstream position. It was accepted that companies had to do well by their employees and the larger society, or something would be done to them by governments or unions. This was accompanied by boasting about "the American way", and that boasting was backed by reality. Things we view as acceptable behavior today, such as huge increases in the price of medicines, were not even considered. Mergers to the point of creating monopolies were rarely attempted and usually rejected.

But by the 1980s, it was clear that the USSR's system just wasn't working out. Capitalism had won. That's when it started acting like a monopoly, able to set the rules. This started in a big way with the deregulation of the 1980s and 1990s. This was justified by faith in a "free market".

But businesses didn't want a free market with many competitors. That keeps prices down and doesn't allow enough control. What resulted was repeated mergers, until most industries were dominated by a very few number of companies. This was promoted as desirable.[1] The US now has three big banks, three big drug-store chains, and three big cellular phone companies. None of those industries used to be that centralized.

So we've ended up with not only capitalism as a monopoly, but monopoly capitalism.

[1] https://www.wsj.com/articles/peter-thiel-competition-is-for-...


> That keeps prices down and doesn't allow enough control. What resulted was repeated mergers, until most industries were dominated by a very few number of companies. This was promoted as desirable.

From the point of view of a single state, it can be desirable, provided said state keeps those companies on a tight leash to ensure the benefits are, to a high degree, captured for their own country. Internal competition eats into money for R&D and international competition. A big part of post-war Japan's success involved this sort of strategy: let a small number of large companies capture the domestic market, keep foreign competitors out, then set them loose on foreign markets while ensuring they cooperate where possible (R&D especially) for greater efficiency.


In my reading about American business going back to 1800, I don't see any of this "It was accepted that companies had to do well by their employees and the larger society". Capitalism did well by their employees and society because it worked. That's the beauty of free markets.

Capitalists, however, regularly tried to gain an advantage by manipulating the government into distorting the free market to give themselves an advantage.


> But businesses didn't want a free market with many competitors.

Those who own capital did not want competition, businesses never want competition but are forced by good governments to deal with it, in this case the government which the Capitalists own did nothing to stop them. SMEs were larger part of the US economy than big business. Now big business is using tech to destroy SMEs, or even various protected monopolies like taxis. These are not political decisions, they are capital backed decisions. They can be undone only with an organized populace. So far the propaganda war has been won by capital. But the populace is quickly becoming disillusioned by the American Dream. And so the rich have scapegoated immigrants. But that's only going to work for so long.'

Most growth in the US has been and continues to be captured by Capital. Entrepreneurs usually get a small piece... Capital does most of the work and those who own it eat most of the pie when it grows. Disparity grows and power becomes consolidated. They buy up more and more patents to keep competition out. They make third world countries into their bitch. It's a vicious cycle of perfected power consolidation that needs to be broken up. It's not healthy for anyone... other than idiot consumers that will buy anything advertised not caring about who is producing it, on what terms, and who it's hurting and whether or not it's sustainable. All things you buy have to be replaced and if there is no competition and all these monopolies than the things that you own, like you car, will eventually own you through the loan you will pay to buy it... Same goes with all things which will be reduced to services owned by a few which collect most of the profit.


"The fall of communism, in a strict Marxist view of the world, is an abomination,..."

Ok, but would Marxism understand the societies that have called themselves communist as being such - my understanding is the common argument is that they are not truly communist and that no, Marx would not have considered them as such. As this post doesn't seem to even address that argument I find it highly suspect, as well argued as it would otherwise appear.


It's kind of a half-and-half situation.

On the one hand, Marx anticipated communism rising up through society organically from the proletariat, whereas in most communist countries it was instead imposed in top-down fashion by a so-called "vanguard party" (see https://en.wikipedia.org/wiki/Vanguardism).

Vanguardism was a feature of the Leninist approach to communism, and Lenin had not-terrible reasons for preferring it -- namely that by the 20th century, people had been waiting more than 50 years for communism to bubble up organically the way Marx had predicted it would way back in the 1840s, and it never seemed to, you know, happen. Lenin argued (in What Is To Be Done?: https://en.wikipedia.org/wiki/What_Is_to_Be_Done%3F) that Marx was wrong in this regard, that the only way the working masses would ever embrace communism was if a narrow, elite activist class first educated and agitated them.

Vanguardism worked, in the sense that it resulted in the creation of formally communist governments, which waiting for Marx's prediction to come true had never (and still never has) done. But it also tainted those governments (which were of course staffed top to bottom with members of the vanguard party) with a strong sense of their people as cattle who needed to be herded by their betters, which then made it easier to abandon democracy, shutter the free press, and murder lots of people whenever they got in the way of the next five-year plan.

On the other hand, complaints by communists that existing communist governments weren't practicing Real Communism™ always had a whiff of no-true-Scotsmanism about them. Most countries with these governments were pretty miserable places to live, so they weren't exactly great advertisements to people who lived elsewhere for the idea that they should embrace communism themselves. So people who advocated for communism had to somehow find a way to assure people that the communism they were preaching wasn't the same thing as the system down the road that couldn't feed anyone and was riddled with secret police. Accusing the folks down the road of deviationism (https://en.wikipedia.org/wiki/Deviationism) was a useful way to do that.


>So people who advocated for communism had to somehow find a way to assure people that the communism they were preaching wasn't the same thing as the system down the road that couldn't feed anyone and was riddled with secret police.

This is a very cynical view, and does a disservice to the spirit of intellectual pursuit in normative social theory. The idea that the only reason why they would oppose such examples of communism is out of embarrassment doesn't fit well with their actual criticisms and reference to Marx himself. Thorough examination of Marx's notebooks and ancillary works only began in the 60s in English language literature. Your suggestion makes even less sense when one considers that the modern left critique of capitalism (usually focusing on concepts such as domination and totality) could be (and were) equally applied to the USSR.

This takes a much different form to deviationism. Deviationism is a result of party politics. It isn't a result of theoretical work. For example, many of the criticisms I mentioned in my other comment in this thread have not come from Trotskyists, Maoists, Titoists or any other "-ist"!


>The idea that the only reason why they would oppose such examples of communism is out of embarrassment

I was thinking it was more that the X I believe in is good, Y is bad but says they are X I better devote some resources to explaining why Y is not X lest people get the wrong idea.


It's also worth noting that Benjamin Tucker predicted vanguardism as a natural consequence of Marxism back in 1888.


cool, if he had made a probably shorter point along these lines as to why he will consider these societies that called themselves Communist as being such despite others saying they weren't I would not be questioning anything.

although as claudiawerner suggests below there are other reasons for finding the statement about Marxist thought not handling the collapse of these Communist companies to be factually inaccurate.


>Vanguardism worked, in the sense that it resulted in the creation of formally communist governments, which waiting for Marx's prediction to come true had never (and still never has) done.

Would you consider that the Nordic countries are growing communism organically albeit how rudimentary it is?


Sweden and Finland saw peak socialism decades ago. Neoliberal governments have rolled back many policies for workers and these countries are not so much different than other Western European states now.


The Nordic countries are very much capitalist social democracies. There’s nothing communist about them.


> my understanding is the common argument is that they are not truly communist and that no

the concept of the state is intended to be a temporary fixture that gets dissolved, and no communist state has ever been able to make that transition

pushes for decentralized finance aim to do the same thing under a strict private ownership and capital appreciation method, with egalitarianism sprinkled in

so it is interesting that these parallel ideologies are propelling towards the same zenith


I'm someone familiar with 20th c. and 21st c. Marxist literature. Academic Marxists today do not, in general, view the fall of Communism as an abomination, and in fact many of them celebrate it - and use it as a learning guide for avoiding such collapse. Peter Hudis, for example, speaks of the irony of the USSR falling into what Marx himself described as a situation in which the equality of wages creates an "abstract capitalist" of society. Moishe Postone, perhaps one of the most influential Marxists critical of the Soviet (and Soviet inspired systems) chastises "traditional Marxism" for similar reasons. The Japanese Marxist schools have their own criticisms in turn, as does the Frankfurt School (focusing on the similarity between forms of domination in the West and the USSR in the 60s).

The fact that the USSR and the ideology of Marxism-Leninism are associated so strongly with Marx himself is in my view an intellectual tragedy. But you won't find such associations made by professional modern theoreticians.

The author writes,

>But Marxist view is entirely powerless to explain 1989, the fall of communist regimes, and hence unable to provide any explanation for the role of communism in global history.

But this is wrong. The figures I have named above actually use a Marxist lens to explain the fall of communism and its fall in global history. Herbert Marcuse goes further in investigating the role of the Nazis is history in Hegel's idea of progressive development of freedom.

Why was the USSR not a socialist state? What lead to it being the way it was? Why did Stalin effectively admit as such in Economic Problems of the USSR? There are papers by Marxist historians, philosophers and value-theoreticians alike. Here[0] is one by Chattopadhyay, a respected figure in Marxist philosophy.

From Peter Hudis:

>This is in many respects a remarkable passage, for it anticipates the problems with many of the social experiments that will be carried out (ironically enough) in Marx’s name in the twentieth century. Two points are worth noting from this. First, wages, like property, are results of human activity. They are made necessary by the existence of alienated labor. To ignore alienated labor while altering wage and property relations through the elimination of private capitalists does not undermine the necessity for a ruling class to impose forced labor on the workers. Society has a whole now becomes the “abstract capitalist.”One form of oppression is ended by instituting an ever more egregious form of oppression. Second, if everyone is paid the same wage, labor becomes treated as a uniform abstraction. Treating labor as an abstraction, however, is precisely the problem with alienated labor.

[0] https://www.jstor.org/stable/25769087?seq=1#page_scan_tab_co...


What would it take for you personally to say that Marx was wrong (not about his critique of capitalism, but about his solution)? What are you waiting to see tried before you are willing to say that Marxism failed?

You have replied with strong knowledge of the literature, but it still sounds a great deal like "No True Scotsman" to me. For every approach, you can find a scholar who says that approach is wrong, so it can never be definitively disproven, because there's always a great Marxist scholar who says "No, that approach was wrong". But from where I sit, the following things seem to be true:

1. No nation-level Communist regime has ever been instituted organically, that is, without vanguardism.

2. Vanguardism has been tried, but produced something that was worse than capitalism - worse both economically and in terms of freedom.

That leaves... what? What are you, personally, looking for that you think would work? If it is tried and fails, will you say "they didn't do it right", or "I was wrong, but Marx wasn't; this other approach is the answer"? Or will you say that Marx does not give a viable answer on how to fix capitalism in a way that actually makes things better?


>1. No nation-level Communist regime has ever been instituted organically, that is, without vanguardism.

On the same token, no nation-level Communist regime has ever been instituted with vanguardism. They never claimed to bring about Communism, only that they were "socialist states". Nevertheless, it is important to distinguish Leninism as incorporating ideas from Lenin from Marxism-Leninism, an ideology created around Stalin's systematizing as a state ideology.

The truth is that I don't know what it would take, especially in today's world. I'm pessimistic about the possibility of workers as a whole uprising, and in the case that they did, succeeding. As David Schweickart wrote on his essay on Sartre's Marxism:

>Moreover, the democratic process, our best hope for relatively peaceful social change, is, increasingly dysfunctional, due in no small part, to the fact that, since the mid-70s, there has been a coordinated, beneath-the-radar, well-financed, largely-successful, ongoing effort, not only to keep “Democracy in Chains,” but to tighten those chains more and more so as to shield the wealthy from democratic discontent. Not good news for Marxists hoping to “win the battle of democracy.” At the same time the prospects for a violent revolution by progressive forces (as opposed to a right-wing military coup) are essentially zero. (A successful storming of the White House? A guerilla army swooping down from the Appalachian Mountains?)

But the point is this: by going through an intellectually lazy route to say that Marxism died with the collapse of 20th c. Communism, we are already shutting down discussion of what Communism could be. The hypothesis, from my point of view, has not been refuted. It is less a matter of teasing out Marx's vision of a future society (which is lacking, because of his philosophical commitments) but rather trying to see what a future society would look like based on the critique. Unlike the diagnosis from a doctor, the features of a socialist society flow from the critique of capitalism, indeed, I would say they are already within it.

I am no dogmatist. If we find that Marx's critique must be reformulated or even abandoned, then so be it. But I think this is less and less the case when Marx's framework is being fruitfully used today for apparently modern phenomena, from McDonaldsisation to the neoliberal state.

So to answer your question: For Marx to be wrong on the solution to capitalism would, for me, necessarily entail that his critique is lacking or wrong. Since we are more able to access the latter than the former, we can sort things out from there. This is actually a weak claim - because I admit that Marx's vision of socialism depends on his critique. A stronger, dogmatic, claim would be that even if Marx was wrong about capitalism then his socialism would still be the answer. I don't think that's defensible.


I'm not sure I agree with you about "especially in today's world". I think we may be closer to "those who make peaceful change impossible will make violent change inevitable" than many people suppose.

> This is actually a weak claim - because I admit that Marx's vision of socialism depends on his critique.

I disagree with you here. I think it is quite possible for Marx to be correct about his critique, and still be completely wrong about how to go about fixing it.


I don't think you can have it that way - the point of a critique is that it is some positive development, a hint or suggestion at a possible world without those things. If Marx criticised capital, abstract labour, etc. then we take it to mean that socialism would not have them. If they were fixed parts of all human society, then Marx's critique would be nothing more than an empty complaint, no different to arguing with gravity over a broken vase.

But as the Schweickart quote shows, there's no immediately obvious way to go about fixing it, once we admit that (1) there is a problem, (2) the problem can be fixed. It's a mistake to think that Marx thought revolution is the only way to abolish capital. But it's also a mistake to characterize him as a reformist.


"Marxism has therefore given up trying to provide an explanation for the 20th century history... The reason for this failure lies in the fact that Marxism never made a meaningful distinction between standard Marxist schemes regarding the succession of socio-economic formations (what I call the Western Path of Development, WPD) and the evolution of poorer and colonized countries. Classical Marxism never asked seriously whether the WPD is applicable in their case."

In fact this was/is an active area of research, namely Post Colonial Theory and Subaltern Studies, which has been heavily criticized and reified with a more classic Marxist analysis since. Post Colonial Theory and the Specter of Capital [1] is perhaps the most accessible such critique.

[1] https://en.wikipedia.org/wiki/Postcolonial_Theory_and_the_Sp...


Interesting piece, but there seems to me to be contradiction in its thesis: If people have become so devoted to monetary success alone, how can all these industries that rely on vice exist? Indulging a vice is inherently wasteful. It costs time that could be spent working, and money that could be better spent on self-improvement, or invested or saved.

And while we may have accepted greed to the point that there is nothing distasteful about saying one desires a better car or house, or a better paid job, in practice most people do not work day and night, spurning all other opportunities, to make it happen. In practice, most people make decisions every day that place other desires, both traditionally "good" and "bad", above the simple pursuit of more money. So to say that people have internalised capitalism to the exclusion of all else seems incorrect.

I have a different take: The development of capitalism and commodification had a mutually reinforcing relationship with the fluidity of labor and the fungibility of goods. Many "traditional" bonds between individuals and communities were really a consequence of local monopolies: There was only one local doctor, shopkeeper, school, etc., and a small pool of potential employers. As such, relationships were inevitably more personal.

As technology, law and institutions allowed civilisation to become more mobile, it allowed the possibility of markets in many areas of life where it was previously impossible. This is unavoidable. Even if you personally choose to stand still, the people around you move, meaning your relationships and interactions are nonetheless more transitory and impersonal. In such a world, commodification emerges not as the consequence of internalised capitalist ideology, but because it is the only way to manage constant interactions with strangers.

So it is commodification itself that has become internalised, not capitalism. Indeed, most modern society isn't arranged around acquiring capital and leveraging it or maximising its value, it's about the consumption of things and experiences—driven by materialist, emotional and spiritual instincts—using money as a points system used to ration them out. Most people approach their work in a simple way: they want to earn enough points to meet their basic needs, and indulge their desires to a point of equilibrium between effort and general satisfaction, after which they don't work any harder or longer.


> If people have become so devoted to monetary success alone, how can all these industries that rely on vice exist? Indulging a vice is inherently wasteful. It costs time that could be spent working, and money that could be better spent on self-improvement, or invested or saved.

Simple: people are not perfectly rational economic actors. I believe the study of irrational economics is called "behavioral economics."


I think this is a great way of putting it. Dating apps very often feel this way to me: no one is perfect, so it's very difficult to know if you're making the right set of tradeoffs, and then you feel very impersonal for looking at dating through that lens.

Currently reading The Paradox of Choice, hoping it gives me more clarity on navigating problems like this, but I'd be curious if others here have thoughts or additional reading on that topic as well.

With regards to the "one local doctor" point: I think the question is whether we lost something when we lost that mutual dependence on someone, forcing us to all get along. I'd argue the benefits we gained from more choice were better, but we didn't exactly acknowledge what it was that we lost.


Interesting article. I don't agree with a lot of it, one point I think is straightforward to respond to as a Marxist:

"Marxist interpretation of the 20th century is much more convincing in both its explanation of World War I (imperialism as the highest stage of capitalism) and fascism (an attempt by the weakened bourgeoise to thwart left-wing revolutions). But Marxist view is entirely powerless to explain 1989, the fall of communist regimes, and hence unable to provide any explanation for the role of communism in global history. The fall of communism, in a strict Marxist view of the world, is an abomination, as inexplicable as if a feudal society having had experienced a bourgeois revolution of rights were suddenly to “regress” and to reimpose serfdom and the tripartite class division. Marxism has therefore given up trying to provide an explanation for the 20th century history."

It's true that the dogma of the official communist parties has no explanation for this, but their theory degenerated and became distorted by the need to justify all the twists and turns of USSR foreign and domestic policy. A genuine Marxist view of the 20th century is that the world revolution began in 1917 in Russia, the "weakest link" of capitalism, but was not able to be completed in the industrial centers. There were a number of reasons for this, for example the growth of reformism in the German SPD, but the result is in reality a failed revolution that won a few outposts and held on to them for 70 years. As a useful example, the Paris Commune is another example of a failed revolution, although it only held out for a few months. It's not a Marxist view that a single country can "go socialist" in a world dominated by capitalism. So there was no "regression" back to capitalism.


It's literally not possible for one economic system to simultaneously "take over" the entire planet, so if a socialist or communist revolution ever took place there would absolutely be a first single country or group of countries to "go socialist." The USSR and its allies were, at the time of their existence and the height of their influence, recognized as being fundamentally communist in nature by communist scholars. Whatever deviations from that ideal caused them to fail are no greater in magnitude (or relevance) than the deviations current nation-states have from capitalism that libertarians use to No-True-Scottsman actually-existing-capitalism.

If communism 2.0 is a better system and wouldn't fail for the same reasons that the USSR did, then talk about those differences. When talking about communism 1.0 (and the many, many socialists/communists living today who basically have not deviated from the mindsets of the revolutionaries of the past), drop the special pleading and take the L.


> recognized as being fundamentally communist in nature by communist scholars

I'm familiar with that scholarship, and no, they weren't. The main reason being is that the USSR never claimed to be communist. The USSR based its ideology on Marx and Lenin, and Lenin invented this distinction, that "socialism" is a stage preceding communism, and communism is a stateless society (etc. etc. as Marx described it). The USSR claimed to be a union of socialist soviets. They used "socialist" in this sense.

By Communist party-affiliated scholars, there was some disagreement as to whether the USSR really was socialist. By academics in universities, there was more doubt cast on that.


The term capitalism is meaningless now.

For example: the Japanese mode of lifetime employment, low salaries, high intangible benefits to employment, an almost exclusively age based hierarchical system is labeled the same thing as the American model, where every individual is a capitalist and a sole individual's brand determines their compensation and worth. The two models are called "capitalist", but they share almost nothing.

If everyone is a capitalist, why aren't all of the world's markets integrated? Why is it so hard to strike a trade deal? Why is trade still organized into ideological blocs? We have always had global trade, but we've never ever had a shared definition of what "a capitalist society" actually means. And then of course the term is used extensively as an ideological cudgel.

Saying things like "Capitalism is the only means of production in the world" or "Capitalism is inevitable" has no meaning at all.

Do a find and replace with "Human Nature" and this makes a lot more sense.


It sounds like you're describing historical social differences between countries, rather than a different implementation of capitalism.

capitalism is the economic system that "lifetime employment, low salaries, high intangible benefits to employment" exist within. I.e. the concept of employment and salaries are part of capitalism, how they are used is up to the specific society.

Based on my experience I would would argue that capitalism influences the structure of society so that the world is getting more homogenous, and differences like the ones you describe are getting less and less. But that's a different issue from the ubiquitousness of capitalism.


So, maybe it will help to look at what is Not Capitalism.

In say some midecentury communist country, the workers owned the capital, right?

In practice, though, someone who called themselves a worker (a party secretary) with political power had de facto control over how and where the capital was allocated and spent. Sounds an awful lot like private ownership. Also, it resembles some parts of the US, like defense, where single bid contracts go conveniently to the friends of lawmakers. It's the taxpayer's capital, right, not privately owned?

The capital in these cases is not explicit in a spreadsheet, but it undeniably exists and is owned.

My example of the Japanese salaryman is similar: if my boss at Mitsubishi is the division leader of heavy industry, my paycheck comes in large part from being able to give his name on the phone with someone when asking for a favor. I'm not paid that, but I own the privilege -- the capital -- if I get high enough up at Mitsubishi. I can even pass this intangible owned thing along to my children, through my family name.

These are all of my cut-and-dry examples, but there are many which are more muddled. The spending of huge companies on lobbying--is that Capitalism? Or some perversion?

Depending on what point you're trying to make ideologically, these situations are all either Capitalism OR Not Capitalism, OR somewhere in between. So what the hell is capitalism anyway and why is it even useful to talk about it like the way the OP talks about it? That is my point.


Most of the people here only seem to have the vaguest of intuitions of what Capitalism is.

Capitalism is when the person who put up the capital gets ROI plus the surplus wealth created by the workers, and the workers themselves get a small fraction of said surplus called a wage minus any say over reinvestment of surplus.

The world is full of many large worker co-ops and credit unions that exist in democratic countries (AKA: not Capitalism).

Furthermore, it has been pointed out by many throughout history that state communism is no more than a lame reimplementation of the capitalist model where the state itself acts as the corporation. https://en.wikipedia.org/wiki/State_capitalism


How are worker co-ops and credit unions not a form of capitalism? It is a profitable application of capital, so what excludes it?


Making a profit is not capitalism. I don't know how I can more simply state it. Capitalism=private ownership of a company/economy (that's te literal one liner google definition even more condensed). Think of it like democracy vs dictatorship. Democracy->workers control surplus (investors still get their investment back+interest--there are different models), dictatorship->an investor or a proxy investor controls the company, or an upper class within the company control the surplus and workers get a set wage and have no power.

Ultimately it's the relationship the workers have with what they produce.

In the google definition it gives state ownership as a 'rather than capitalism' example, but that assumes a non dictatorship where the workers collectives are actually autonomous and self governed. In the case of Soviets and China, however, the system of collectives was always centralized state-capitalism (and later full blown state sanctioned hyper-capitalism). But there are commie examples like in Spain, where are a huge system of worker run co-ops that have existed since the late 50s with roots going further back to anarchist run co-ops of the civil war. https://en.wikipedia.org/wiki/Mondragon_Corporation https://en.wikipedia.org/wiki/Caja_Laboral


I don't see why you are talking about the state. I am trying to understand precisely why you would exclude worker-owned cooperatives such as John Lewis, building societies, lawyer partnerships, etc.

It appears your definition definition of capitalism is artificially narrow and instead of addressing role of capital, you are addressing ownership structure.


Or consider that the Nordic countries are confused when US politicians call their countries Socialist. I think the problem is that the word "Capitalism" (and "Socialism") are very high level terms but people use them to represent very specific ideas. So there is a huge breakdown in communication and everyone is just talking past one another (we could probably say this about quite a few hot topics).


Historically, free markets and private property protections would give rise to capitalism. But it seems like, in modern times, those two same ingredients give rise to something else. This "something else" is partially capitalistic, but the word seems to fit less and less.

Traditionally, a capital investment means something like a tire factory. The right factory in the right place gives the owner an advantage until the market changes or a new supplier makes an even better factory.

Putting things like software, a set of customer relations, a brand, or other modern business advantages in the same bucket as a tire factory just seems wrong.


A nice deep dive into that thought is the book “The Wealth of Networks” by Yochai Benkler

https://en.m.wikipedia.org/wiki/The_Wealth_of_Networks

It’s main focus is on what he calls Commons Based Peer-Production and how the default capitalistic model of private property doesn’t fit that mode of production


> Capitalism, in order to expand, needs greed. Greed has been entirely accepted by us.

Any system which does not take into account inherent human traits like greed, envy or laziness are bound to fail. That seems one reasons why Capitalism prevailed over Communism, since the former had fewer "wrong assumptions" about the human nature.


Communism, aloner.

There is a cost to socialism, if it ever becomes established, it is state socialism, and state socialism is inherently violent. You are free to associate with more people, to change your relationship with work and consumption, you are rich. Your problem is that you have chosen to be alone, and you blame society for not forcing you to be at least superficially engaged.


Capitalism engenders the same violence, only behind a mask of "free will".


Mask how? Yes, people are convincing, but that is in no way comparable to force.

The fact that many people are convinced to do things that suck for them in no way justifies a switch to deliberate, overt state imposition of what is supposed to be good for them.

If people are being convinced of unwise or unreasonable things, you have an obligation to do your own convincing.


The mask is as follows: firstly in a particular ideological and political conception of freedom as the freedom to buy and sell whatever you want (including your own labour), along with some things given by the liberal egalitarian state, secondly in the liberal construction of "free will" as the opposite of coercion. Marx criticized liberalism for its narrow conception of what it means to be free, and before that, Spinoza outlined why it is meaningless to talk of "coercion" and "consent" as proponents of negative liberties tend to talk about them.

It is not enough to be free, freedom lies, as Zizek says, in the freedom to define your own idea of freedom outside of the ideological context in which it is given to you, whether that's a Western capitalist ideology or one given to you by the CCP.


The thing is, only one of those spectrums of freedom is fully contained within the other.

You are free at any moment to commit your excesses to the state, or to any institution.


>The economic system and the system of values are interdependent and mutually reinforcing. Our system of values enables hyper-commercialized capitalism to function and expand. It then follows that no change in the economic system can be imagined without a change in the system of values that underpins it, which the system promotes, and with which we are, in our everyday activities, fully comfortable. But to produce such a change in values seems, at present, to be an impossible task. It has been tried before and ended in the most ignominious failure. We are thus locked in capitalism. And in our activities, day in, day out, we support and reinforce it.

But can capitalism expand endlessly? It seems to me that capitalism will expand itself to destruction.


You can resolve this paradox by making a distinction between the whole & its parts. Capitalism is not a monolith - it's a system where many competing firms and ecosystems vie to become the dominant producer. Some of them inevitably grow faster than others and take over the ecosystem. At that point capitalism is redefined to mean "the winner", and all the losers wither and die off. Then some small variation within the new definition of capitalism takes off, grows faster than its competitors, eventually replaces them, and redefines capitalism as itself. As a result, "capitalism" is always growing, but it doesn't mean the same things, and most of the things that it previously meant end up dying and being lost to history.

You can see this cycle actually happening if you look at history from the medieval rennaissance until today. "Capitalism" initially meant the decoupling of farm labor from manorial estates that owned the land; in the wake of Black Death, there was a surplus of land and a shortage of labor, and so peasant farmers were able to choose from the estates that were most productive and gave them the best life. That spurred competition among estates to improve farming mechanisms, which increased food productivity, which allowed some laborers to specialize into guilds. Capitalism was then redefined as the private ownership of the tools used for this specialized labor, which competed to produce the best quality goods at the lowest prices.

The surplus generated by this then allowed the conquest of the New World, of Africa, and of Asia, which opened a big new resource source and ushered in the era of mercantilism. Those raw resource sources then created demand for more efficient ways than the guild system, which led to the invention of industrial capitalism. "Industry" initially referred to one specific industry, textiles; as mass-production techniques were applied to more and more areas of the economy, "industry" eventually became synonymous with "capitalism", and people forgot that mercantile traders used to be the dominant corporations on earth, or that there was a time when everyone was either a farmer or landlord. Now software is eating the world, while software in 1975 was a tiny industry that most people thought of as a hobby or loss-leader.

Along the way there've been plenty of losers that were destroyed. If you were one of those peasant farmers who weren't among the most efficient, you are now dead. If you were a cobbler, or a tailor, or a baker, or a smith, or a weaver, you lost your specialty when industrialization came around. If you were a Luddite, sucks to be you. If you were a Native American, you're probably now dead too. If you were a plantation owner in the American South, you lost most of your holdings after the Civil War. If you're a factory worker in America, you're probably jobless. Someday software engineers will be the dinosaurs of the future.

But all of these groups are just written out of the narrative: capitalism is defined in terms of the winners, and the losers drop out of history. Capitalism will expand forever, but it won't look like the version of capitalism we have today.


but if at some point where scarcity is eliminated (a la star trek) and most production is not centered around capital accumulation, or working for the owner of capital, how could we still call that capitalism?

or is the argument that it is more of a colloquial term and people have used it to mean whatever they want/need it to mean?


I would argue that scarcity has been eliminated for the past 20 years at least - the world overproduces all basic goods: food, steel, plastics, you name it. We could hand out free meals to every starving child in the world and it would cost like 2% GDP at most.


Capital becomes "whatever gives you an advantage". I think it's a pretty good bet that people will continue to seek out advantages even if all material scarcity is eliminated. (Arguably, we're there already: there's been enough material goods to feed and shelter the whole world since the 1950s, and it's only the continued game-playing of elites that creates scarcity.) If you've ever observed, say, fandom, or PTA meetings, or programming language debates, or HN comment threads, or any other situation where the stakes are incredibly low but passions are incredibly high, you'll see evidence of humanity's ability to create status games where none existed before.

"Capital" in the sense we usually mean it - factory machinery and the financing to buy it - wasn't really a thing in agrarian capitalism or mercantile capitalism. And we're witnessing this redefinition in real-time as "data" becomes a form of capital despite not really being worth anything before the age of computers.


>"Capital" in the sense we usually mean it - factory machinery and the financing to buy it - wasn't really a thing in agrarian capitalism or mercantile capitalism.

This issue of capitalism changing its form, and capital not being same in one period as another, is only caused by your own interpretation and definition of "capitalism" which doesn't seem to be accepted by anyone else. In political economy and political philosophy circles, capital is defined as a social relation, not a thing. The things it does refer to concretize the relation, but they are not the relation itself.

The idea that capital is "whatever gives one an advantage" seems so general that it cannot be sensibly used to talk about the concrete historical birth of capitalism and its expansion. A more accurate view, keeping with history, is that capital tends to subsume things, so now we talk about "human capital" or "information capital".


What if the forces that propel capitalism find ever more creative ways to spend resources. I can think of a few historically: war, rent-seeking, bureaucracy.

But now with technology.


> But can capitalism expand endlessly?

There's no limit to the value one can add. Consider computer software - there's no limit to how good one can make software. There's no limit to making better art, better movies, better houses, etc.


There are always limits. Time, resources, energy, entropy, bandwidth, intelligence, cultural norms, the bounds of the law, physical stamina, what the market will bear. Value is subjective, so claiming that there is no limit to anything to which "value" can be applied in a capitalist marketplace is meaningless. Unbounded infinite progress only exists in the realm of pure math.


In the extremely limited universe of a chessboard, there are still an infinite variety of games one can play.

Just think of the "chessboard" of all the molecules that make up the earth.

I do agree, however, that a great many people seem to have very limited imaginations, and that this limits their lives.


>In the extremely limited universe of a chessboard, there are still an infinite variety of games one can play.

No... the set of all possible games of chess is finite, somewhere around 10^120.

You might call that "practically infinite," but another term for practically infinite is "really big, but still finite."

>Just think of the "chessboard" of all the molecules that make up the earth.

Entropy and thermodynamics are a thing, and the amount of work one can do with the molecules that make up the earth is also finite. Trek-style replicators and nanotech that instantly converts anything to anything else only exist in fiction.


> No... the set of all possible games of chess is finite, somewhere around 10^120.

You and your opponent can simply move your queens back and forth forever, making for infinite (albeit boring) game possibilities.

Besides, the posed question "can capitalism expand endlessly" is not a math question. It's a pragmatic question, and includes an implication of "for all practical purposes". Taking it literally is just being argumentative.


>No it's not. You and your opponent can simply move your queens back and forth forever.

We might disagree on this point, but to me, that's the same game regardless of how many times you move the pieces around, because that game ended in a draw. Moving queens around indefinitely to no purpose is no longer chess, there are no more possibilities to be found at that point, it's pure entropy.

>It's a pragmatic question, and includes an implication of "for all practical purposes". Taking it literally is just being argumentative.

I honestly don't think it's true for all practical purposes, either. I'm not trying to be argumentative, I legitimately disagree with the premise. When you're talking about capitalism, you need a market which will return a profit on something people are willing to pay for, and there are only so many things people will be willing to pay for, and only so much they will pay, because people's time and budgets are limited.


> Moving queens around indefinitely to no purpose is no longer chess

Nothing in the official rules says the game has to have a purpose to the moves. Nor do the rules say each board configuration must be unique to the particular game.

> I legitimately disagree with the premise.

That's fine, and your argument should support that, not some digression into mathematical infinities.

> When you're talking about capitalism, you need a market which will return a profit on something people are willing to pay for, and there are only so many things people will be willing to pay for, and only so much they will pay, because people's time and budgets are limited.

Capitalism is about taking something and adding value to it. The definition of adding value is adding something that people are willing to freely pay for. Budgets are not limited, because those people are also adding value to things, and trading the value they created for what they want.

I.e. there is no fixed supply of money. It is not zero sum.


My frustration with the arguments for communism and or socialism vs capitalism is that they are surface arguments on ideological basis. I see socialism and communism as dressed up authoritarianism.

A massive hand-over of power to a few in government is not an improvement over capitalism where a much larger group vie for power in a dual reinforcing and opposing system of government and corporate interests. To hand the economy over to the government creates a far more centralized system of power and all the discussion of supposed benefits we could attain by such a system does not nullify the massive threat to freedom by that kind of system.

Capitalism is a horrible system but its the least horrible one we know of. A better discussion is how do we get to a better regulatory regime.


The problem is as you state: discussions between ideology are not productive when at least one side is completely entrenched in that ideology.

Instead of focusing on ideology, focus on specific problems, and don't let the discussion occur in terms of ideology. This can be done by forcing specifics as much as possible.

Ideology is almost by definition, highly abstract. It's nice to talk about things when they're highly abstract, because their incredibly malleable.

But the problems we face in the world are not abstract. It's completely clear at this point that an ideological approach to solving problems will not work. But perhaps changing the discussions to be smaller and focusing on real issues in specific detail might be better.

I could be wrong. I've been unable to have a productive conversation with ideological opposites from me, but I seem to get closer when I talk about specifics instead of abstractions.


Capitalism is nothing more than giving everyone power to do whatever they want. The alternative is Communism which is giving a few government elites the power over everyone. Obviously, these extremes can NEVER be implemented so we will forever live in a middle ground between these two.

Each country will take steps in the latter and natural selection will find the best middle ground between this two. The big problem here is the Tyrannical aspect of Communism and the tendency for global wars. Want it or not almost every moral war was started on this envy stereotype that radical leftists have. Don't forget, Hitler was leader of the National Socialist Party.


Congratulations: You, along with most of the people here, have no fucking clue what Capitalism is. Capitalism is when the person who put up the capital gets ROI plus the surplus wealth created by the workers, and the workers themselves get a small fraction of said surplus called a wage minus any say over reinvestment of surplus. The alternative does not have to be a state system of communism at all. https://www.theguardian.com/social-enterprise-network/2012/j...




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: