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Unfortunately, we don't really have more and more technology. Business owners do, and they're just going to use it to earn more money for themselves and their shareholders. That's just how capitalism tends to operate.

I'm going to come right out and say that at some point, maybe we should re-evaluate communism. Of course it's going to need a massive rebranding, and we'll need to figure out how to prevent all the recurring themes of corruption and "making people disappear".

My colleague highly recommends Capital in the Twenty-First Century [1], which I'm looking forward to reading.

[1] http://www.amazon.com/Capital-Twenty-First-Century-Thomas-Pi...




Wouldn't increasing the progressivity of taxation improve redistribution without removing the efficient incentives that capitalism provides?


One of the many problems which this idea has is that it redistributes money away from people who are good at investing in growth, and gives it to people who are likely to spend on consumption goods.


...which is fine, really, because spending on consumption goods is the basis of the modern economy anyway. Giving money to the poor is one of the most effective ways to give money to the rich, and has the nice side effect of feeding a few mouths along the way.


Money invested in growth has different economic effects from money invested in consumption goods; the former is likely to be spent on capital goods, and thereby increase production and reduce prices in the future, whereas the latter is likely to be spent on raw materials and labor (or possibly just driving up prices), with fewer long-term benefits.


Your ignoring the most profitable use of capital which is bribes. Current tax laws are vary focused around letting rich people keep there money but there is little evidence US growth is particularly capital constrained. Overall economic growth tracks vary closely to population growth long term Per capita economic growth tending to hover around 1%.

Economics 101 is a vary limited model of how real world economy's work. In the real world ultra rich people tend to cause a lot of long term economic harm because there goals tend to be vary different from most people.

PS: Bill Gates sending aid money to developing areas may be a 'good' thing but it's not investing in the way your thinking.


Large corporations (such as those listed on the stock market) are not capital constrained, but the small, new and potential companies which are most important to growth are highly capital constrained.[1][2]

Some have argued that it is good that rich people often get their way, because the alternative is far worse.[3]

[1] http://www.theatlantic.com/business/archive/2012/09/the-30-y...

[2] http://www.nber.org/digest/feb11/w16300.html

[3] http://econlog.econlib.org/archives/2012/09/why_is_democrac....


Small companies may be capital constrained, but the constraints come from friction more than from limitations on capital supply. If DD on the proposal for Joe's Diner is going to cost more than the pre-DD profit expectation, it doesn't matter how much capital is in the pool, Joe won't be getting funded.

There's a nifty way around this: if Joe self-funds, he need not worry about his own principal agent problem. What kind of economies encourage self-funding? Those that provide employment opportunities sufficient for the purposes of saving and serving as a safety-net. NOT economies that systematically de-leverage the bulk of the working population.


This is because at some point ( like ... about now ) consumption becomes the bottleneck* for production.

*actually becomes the bottleneck for the transfer function between consumers and producers we call markets...


Past performance does not equate to future growth.


Why don't we teach more people to be better 'investors in growth'?


Possibly, but the internationalization of capital has made this much harder.

Throw in that governments have lousy track records at actual redistribution... it's much harder than it looks. You have to have government-levels of instrumentation of the processes, and that's expensive. This isn't just governments, either - public charities can run into this problem as well.


No it doesn't. People like to receive a benefit for the work that they do. When a person works and produces a surplus and it is stolen to give to people who produce nothing, it has a tendency to reduce their future output. This is the reason that communist states have a tendency to hold guns to the heads of their people and MAKE them produce for the government.


Communism per se is badly, badly broken. Piketty seems to be drawing to trying to get the genie of international capital back into the bottle. I doubt that's do-able.

Megan McArdle has, I think, a fine treatise on how the globalization of capital killed off the equilibrium that made even organized labor possible: http://www.bloombergview.com/articles/e023c820e0110130a0d758...

In the world described by JK Galbraith's "Modern Industrial State", organized labor sorta made sense. Now? Not so much.

Hayek and Milton Friedman ( generally considered economists of the Right, although that has problems ) have both espoused a basic income/negative tax. That's quite distinct from Communism.


Be careful with your terms there, communism and associated structures are rife with problems, ideal in theory only and all but impossible to implement using real-life humans.

I think we should start by re-evaluating capitalism (at some point in the next 500 years or so when we run out of steam on the current system), and then see what needs fixing rather than to throw caution to the wind and have a re-run of the 20th century.


"The future is already here, it's just not evenly distributed"


With communism, wealth is redistributed and centrally controlled by the government (or governments). I can't even trust my government will put my money to good use now.

It will also have a negative effect on innovation and technology. Some of the greatest technologies we have today is a result of fierce competition in the marketplace.

I run my own business now (it took many years of working for many terrible bosses and managers). I have many freedoms. Why would I want to take away the chance for anyone to ever have the chance to also achieve this freedom?

The answer is to invest more in education and bring more people to a level where they can make a living. Not to completely destroy the current system and bring everyone down to nothing.

I hope I'm not still around ever see this happen.


> The answer is to invest more in education

Suppose that you could snap your fingers and give every person in the United States a college education. Not just a degree, but the knowledge that comes with a degree (a high-quality degree for the sake of argument). What do you think would happen?

1. Employers would use the increased leverage to play members of the new labor force off one another until none of them were earning more than minimum wage, if that. By "employers" I mean to include venture capitalists because supply and demand still applies in VCistan -- a flood of entrepreneurs fleeing a crummy labor market means that VCs have all the leverage and can impose similarly crummy terms.

2. Enough new positions would appear (either through companies growing their staff or through investment in new companies) that everyone could earn a decent salary.

I'm 90% sure the answer is #1 and that your "solution" would have the effect of "bringing everyone down to nothing."

The supply of labor is fixed (everyone needs to eat) but the demand for it is not (and lower every day in aggregate). It's that simple. The game is rigged. In low-growth sectors of the economy, capital concentrates no matter how educated the players are (see: non-CS, non-petrol engineers). Just because we can run fast enough to win a slice in our sector (which is high-growth right now but won't be forever) doesn't mean that teaching others how to run fast is a strategy that leads to asymptotic success in the limit of teaching everyone how to run.

You don't have to implement a communist system to shut down the mechanism that rigs the game. BI/MI will suffice. So would some kind of total-employment system. But I see no reason to believe that the supply/demand gap for "average" labor would close for any realistic definition of "average" in a "free" market (I put scare quotes around "free" because Maslow's hierarchy ensures that no BI/MI-less market system is ever "free"). If it somehow did happen it would certainly go against the historical trend. Do you have a narrative to explain why the post-educational-revolution employment landscape would be fundamentally different from today or is it all wishful thinking?


More people would be able to create their own economies, create their own businesses.


Yes, but would the growth in new businesses suffice to absorb the deluge of educated labor? I strongly suspect that it would not, which would make the proposition a big win for those looking to purchase labor and a huge loss for those looking to sell labor.


With communism, wealth is redistributed and centrally controlled by the government (or governments). I can't even trust my government will put my money to good use now.

What? No! Communism doesn't even have a state, let alone a powerful central government.


[citation needed]

This differs from all the existing and previous Communist states. You can't just "no true Scotsman" your way round the problems of government under communism.


Most states which were controlled by a communist party did not see themselves as communist states, but rather as socialist states on the way to communism. (State) socialism was/is seen as a form of bootstraping mode to communism but communism itself is mostly state-less in marxist theories.


That does not preclude the fact that once there is a elite that runs the socialist state, they will put every resource, big and small, available to them to the task of perpetuating "bootstrap mode" forever.

Meanwhile, intellectuals who dream about the next coming of Communist Paradise on Earth will do nothing. Dreaming is cheap after all.


Citing examples of Communist states is a bit disingenuous when we're talking about Communism which is stateless by definition.


This time we'll kill the right people... :)


just because you benefited from the current system doesn't mean that everyone else can or even wants to. (just playing devils advocate).

Things are going to change very soon. I've yet to meet anyone in a currently stable industry that I couldn't replace with a robot in the next 20-30 years.

Hell, programming has gotten SO tremendously easy now that _almost_ anyone can do it. We're quickly approaching an age where learning how to code is the equivalent of knowing how to read.

So once we've automated everything. and everyone knows how to program things. Where do we go?


Sure, you can teach just about anyone to perform simple programming tasks but that doesn't mean they possess the knowledge, experience, and problem solving ability to actually be a competent programmer.

The thing you're forgetting is that development involves a lot of abstract thinking and years of understanding how "A" fits into "B". People with basic knowledge of a programming language can bang out easily conceptualized tasks like plotting their car's monthly gas mileage but ask them to write a simple Twitter clone and you're likely to receive blank stares. A seasoned developer could knock that out in an afternoon though (not at real Twitter scale of course!) because they have years of experience knowing how dozens of loosely-related systems and libraries can be assembled to create the bigger picture.

Saying that knowing how to "code" means anyone can create anything is like saying that anyone can paint the Mona Lisa given a canvas, paint, and a six week bootcamp session.


You spend your time fixing bugs. You can teach that but it takes up to decades.


And for the record I'm absolutely with you on not being able to trust the current establishments with my money.

We can easily change that with computers and diplomatic voting... and much MUCH better transparency.




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