The author assumes we have 'capitalism' to begin with. Even talks about big banks etc.
Secondly, he's citing 'information technology' as being the death of 'capitalism'. An industry, arguably the most aggressively capitalistic.
Then he talks about corporate monopolies (anyone who's read economics 101 would tell you corporate monopolies are rarely result of unadulterated capitalism, but rather state corporatism).
He mentions big companies using public data, most of that public data is generated, collected and shared openly by private companies to start with. I'm not even sure what his point was there...
Then he talks about alternative currencies, something which bloomed in response to flailing, devaluing state currencies. Which is just about the most free-market response to state currencies...
The next paragraph he references briefly the 'sharing economy', something pioneered and spearheaded by companies such as Airbnb and Lyft. Truly great success stories of consumer capitalism.
"The solutions have been austerity plus monetary excess. But they are not working." - What? Our public spending has increases by £50bn, how is this 'austerity'? The cuts have slowed down our public spending and even that has made us one of the strongest economies in Europe. So I'm not sure where he's getting the 'not working' from.
"Even now many people fail to grasp the true meaning of the word “austerity”. - Oh, the irony.
Most of the fluffy scenarios he describes, whereby private individuals make voluntary, mutually beneficial agreements with each other, is almost the very definition of capitalism!
>Then he talks about corporate monopolies (anyone who's read economics 101 would tell you corporate monopolies are rarely result of unadulterated capitalism, but rather state corporatism).
Let's talk about this point as a whole. Firstly, I don't think it is well substantiated, and there are numerous examples to the contrary- Microsoft, Standard Oil, United Fruit, telecoms, airlines, railroads- almost anything which requires significant initial investment to grow. But, more importantly- why distinguish between capitalism and what you call "state corporatism"? The corporations who lobby the state, or coerce the state, or even cause the formation of an authoritarian state in ways that work in their favor are merely being good capitalists- they're simply better at competing than other capitalists! When United Fruit coerces the US government into supporting a foreign coup, or a corporation coerces the police or military to massacre striking workers, or big oil asks for huge subsidies- it's no different from a capitalist perspective then investing in advertising or aggressive expansion, and all are about increasing control and centralizing power. If there were no state corporatism, how long would it be before a capitalist caused it to come about? Campaign finance laws, monopoly regulations, and public opinion can be rolled back or simply ignored until power is consolidated; the inherent unequal distribution of power in capitalism means that a comparative few people will always be capable of doing this. In the words of Woodrow Wilson: "If there are men in this country big enough to own the US government, they are going to own it". State corporatism, monopology, and inevitably authoritarianism are the end game of capitalism, not a perversion. You can't put limits on the definition of capitalism so that the second anyone is any good at it, and the most obvious oppression that being good at capitalism causes is then apparent, that suddenly it's "not capitalism" anymore because they didn't play by your rules in a system where the actual rules are what those with money say they are. Hopefully, this should make you more critical of the inherent viability of capitalism.
Telecom-- a government granted tri-opoly. The FCC limits the number of organizations who can license spectrum in a given metro area.
Airlines-- government regulated, airports are local government monopolies and they limit competition.
Microsoft- Not a monopoly in any line of business
I have been waiting for a long time for someone to come up with an example of an actual natural monopoly that exercises monopoly pricing power. In every case so far, either they had competition, or government is the one that was limiting competition in the first place, usually by regulation.
Your requirements are absurd - Every business will be subject to some sort of government regulation that could limit barrier to entry. That's why your conclusions are outlandish- Microsoft was literally deemed to violate antitrust law in federal court; there are plenty of obvious historical examples (United Fruit, Standard Oil, US Steel); Pharmaceutical companies consistently exhibit price gouging in medical monopolies, etc. Furthermore, oligarchical monopolies, like the telecoms, are not somehow exempt- they operate, lobby, coerce, and consolidate power together, despite being 3 separate companies. Utilities are generally natural monopolies, not government created- the major barrier is the huge costs on upfront infrastructure, which dwarf any regulatory costs.
Most importantly though, you failed to grasp the fundamental concept, that a government granted monopoly is not somehow uncapitalistic: it's hypercapitalism, the end goal of the system itself.
The seems like a life imitates art/art imitates life question.
It seems impossible for a completely unbiased government free from favored interests. Every sufficiently large corporation exerts influence or receives favors as a localized tax source or employer of voters.
You're using United Fruit as a counter-example to state corporatism?
United Fruit got its monopolies by subverting Central American governments, then maintained them by using the power of the United States government, up to and including actual raw military force.
If there's a better historical example of state corporatism, I can't think of what it could possibly be.
That is a large part of my point- natural monopolies, or more generally, any concentration of wealth in a capitalist society, rapidly progresses towards what you call "state corporatism" (but what I would just call "capitalism"). You seem to miss my main point - it was claimed that "corporate monopolies are rarely [the] result of unadulterated capitalism, but rather state corporatism"- my point is that state corporatism is the be-all and end-all unadulterated capitalism; the latter becomes the former, one is not a perversion of the other. "State corporatism" is merely a cop-out word to describe any inconveniently obvious examples of coercive forces within a capitalist society, so they can be dismissed as un-capitalist, and in some cases even twisted so that any laws which protect the public from unadulterated capitalism are guilty by association.
"my point is that state corporatism is the be-all and end-all unadulterated capitalism; the latter becomes the former, one is not a perversion of the other."
Sorry, that is simply not correct.
These are things that occur when the government has too much power. It doesn't matter what it calls itself. For instance, the Soviet Union engaged in plenty of imperialism (far worse than anything United Fruit ever did), despite being Marxist.
I'm sure we don't disagree on the atrocities committed by the Soviets.
>"Sorry, that is simply not correct."
We may be at an impasse, because to me and many others, it is not only logically apparent that capitalism leads to state corporatism, but verified by empirical evidence throughout quite a bit of history. Can you explain why you disagree - I'm genuinely curious and open minded. Do you think it is not to the advantage of a capitalist entity to lobby for and obtain a government granted monopoly? Do you think that it is not to the advantage of capitalist entities to influence the political process in their favor as much as possible?
If there was no state presence at all, do you think it wouldn't be to the advantage of a capitalist entity to effectively create and exhibit control over one? Or, do you think these things have not, or do not, happen in reality?
Capitalism is inherently a system which encourages the consolidation of power. I think the key issue is that while you've presented "government" as something inherently different than private market forces, often the two go hand-in-hand. If all government power in a capitalist state was removed, it would be only a matter of time before a "privatized" replica of the worst aspects of government is created, only this time without even any pretenses of not being controlled by a capitalist elite. You say "It doesn't matter what it calls itself", and I think that's something that can be restated. Power is abused by many who don't call themselves a government. There is little to no difference between capitalists who seek to control a government and a people, and the authoritarians you have called out.
I think you're wrong with the definition of capitalism. Capitalism is not necessarily free market and vice versa.
A historically accurate definition of capitalism (unlike communism for instance, capitalism was given name for the existing system and not for utopian ideal), I believe, would be that it is a system with two characteristics:
1. Most of means of production (capital) is privately owned.
2. Human labor is a market commodity.
I don't agree with the article that death of these things (and so capitalism) is coming, although I can certainly (being a leftist) imagine a free market system where neither of these conditions is true. For example, a system where large majority of economic production happens in democratically controlled worker cooperatives.
I guess we have slightly divergent definitions. My definition being voluntary exchange and private ownership of commodity and labor. I also have nothing against democratic cooperatives, just as long as I'm free to carry on working in a market economy elsewhere ;)
The important question is what you're trying to define. Are you trying to define existing system or some your ideal?
If you're trying to define existing system, I would disagree that exchange is voluntary here, unless you play with words and say people are free to die of hunger. (Also it's not clear what "private ownership of labor" means.)
If you're as capitalism designating some other ideal system (based on your values), for example anarchocapitalism, you should be aware that these always failed too, sometimes even more horribly than attempts for communism. But then anyway, why would you attempt to call this ideal "capitalism"?
This is actually the basic contradiction in your thinking. You say "the system we have is not really a capitalism", so the problems (that many people see) are not problems of capitalism. But then why do you want to call it capitalism, if not as the reference to what we have today?
I didn't say we couldn't at all, I personally would like to work in a market economy. Not in a cooperative, but similarly I would want others to have the freedom to work in a cooperative should they wish to.
> Most of the fluffy scenarios he describes, whereby private individuals make voluntary, mutually beneficial agreements with each other, is almost the very definition of capitalism!
No, that is the definition of a free market. Capitalism is a framework of ownership that operates in markets of varying degrees of freedom.
A barter economy is a free market, but not usually a capitalistic one.
The author is pointing out ways that the free market is starting to outgrow it's reliance on the ownership framework of capitalism and how capitalism's framework of ownership has problems dealing with the valuation and ownership of information.
I suspect we will increasingly see the old capitalistic structures use governments and force to hold the line against the free market.
Indeed. Ultimately, I think most private enterprises would rather not be competitve contestants of a free and open market but would rather be monopolists, monopsonists and above all, rent seekers (ideally a monopolist rent seeker earning rents from a entity spending other peoples money).
It is often much easier to compete by sabotaging competitors and potential competitors than by competing on the merits of the product/service that you provide.
Neoliberals have been very effective at promoting confusion between free and open markets (which most definitely require some form of regulation to remain free and open) and captialist/private ownership framework, largely to further deregulation and the rent seeking opportunities it affords.
"capitalism" as casually used can be broken down into a bunch of discrete, sometimes contradictory concepts, here's just a few off the top of my head:
----------
1. "CAPITAL"-ism with a capital "C": the policy that when labor and capital do something together, capital should get the bigger share of the return.
2. "Laissez-faire": a market that has as little regulation from the government as possible.
3. "Free market": a market that is generally untainted by what are considered "artificial" external manipulations, such as price-fixing, etc, that prevent it from reaching a natural equilibrium.
-----------
These sometimes contradict. For instance, pure laissez-faire can easily lead to monopolies, which hinders the ability of the "free market" value. Also, it's not clear at all that "CAPITAL"-ism naturally follows from either 2 or 3.
And even when you break it into these concepts there's still plenty of room for interpretation.
I guess what I was referring to by 'capitalism' was actually 'free-market' by that list. I should've been more concise. The author was attacking 'capitalism' as a whole, so I wanted to refute his general argument against market-oriented economies
You're correct but I think he is more on your side than not.
Where you want to lay claim to 'capitalism' as meaning 'free markets' I believe he chooses to relegate the term 'capitalism' to the sort of crony-stroking global corporate fascism that has evolved instead of free markets. I've often thought that free market advocates should just give up on claiming the "real" meaning of the term capitalism and just invent a new word that can't be conflated as easily.
That said, I'm not sure what to think about this gentleman's article and conclusions. It seems he is able to identify things that actually ARE real problems... however my initial reaction to what he describes as 'postcapitalism' is to be skeptical and to suspect that he may have an agenda. His rhetoric is notably light on actual details, however it has a subtle yet distinct flavor of forced redistribution that leaves an unpleasant taste.
"Secondly, he's citing 'information technology' as being the death of 'capitalism'. An industry, arguably the most aggressively capitalistic."
That would be historically ironic, wouldn't it? So much so that it has a ring of truth about it. Nature loves a good paradox.
By contrast, all the overtly socialistic authoritarian-Leninist states have evolved into slave states, mafia states, and totalitarian state-capitalism.
Marx's original idea really wasn't that. Boiled down, Marx argued that capitalism would transcend and obsolete itself through its aggressive over-production and innovation. It wasn't something to be imposed from above. It would evolve out of capitalism itself.
This is the fundamentalist reply - the same reply proponents of socialism give when confronted with the horrors committed by Stalin and others during the 20th century. It wasn't real socialism, you see.
Sorry for veering slightly off topic but since you mentioned this, may I ask if you have a recommendation of a few important books that would make a core of a "economics 101"?
Samuelson Nordhaus - Economics, though nowadays some prefer Mankiw - Principles of Economics. There is - obviously - a lot of criticism from several sides against both.
In the end there are several schools of economics. So it depends what Economics 101 text someone read. ;)
I think you're being overly defensive about his use of the word "capitalism", and in doing so have missed the entire point of the article.
> Secondly, he's citing 'information technology' as being the death of 'capitalism'. An industry, arguably the most aggressively capitalistic.
He's not talking about the info-tech industry being capitalistic, but rather some of the contradictions inherent within a capitalistic info-tech industry. Relying on scarcity of a product that has effectively zero marginal cost is a very strange place to be in.
> Then he talks about corporate monopolies (anyone who's read economics 101 would tell you corporate monopolies are rarely result of unadulterated capitalism, but rather state corporatism).
And anyone who's gotten beyond econ 101 knows that these black-and-white conceptions of the econ 101 capitalism have little to do with modern economic discourse or policy.
> He mentions big companies using public data, most of that public data is generated, collected and shared openly by private companies to start with. I'm not even sure what his point was there...
His point was that trying to make a business around owning, hoarding, and making scarce the public and private interactions of the populace at large (e.g. Facebook) is a shaky foundation.
> Then he talks about alternative currencies, something which bloomed in response to flailing, devaluing state currencies. Which is just about the most free-market response to state currencies...
This is where I started to become really convinced you had missed the forest for the trees. Yes, non-state currencies are a pet project of free-market purists. Yes, they are also a huge pet project of post-capitalists and marxists. If you would stop labeling the author as one of "them" in your political world-view that you are sworn to defeat, I think you may start to see a lot of parallels between what he's describing and what you seem to think of as "free-market capitalism".
> The next paragraph he references briefly the 'sharing economy', something pioneered and spearheaded by companies such as Airbnb and Lyft. Truly great success stories of consumer capitalism.
Again, you're so obsessed with your definitions of these labels that you're missing the whole point. "AirBnB and Lyft are private companies, therefore they cannot have anything to do with a large-scale transition in market dynamics!" sounds rather silly, don't you think? Especially when the author speaks incessantly about how new models are emerging naturally within old systems rather than the traditionally marxist conception of workers using the state to effect change?
> "The solutions have been austerity plus monetary excess. But they are not working." - What? Our public spending has increases by £50bn, how is this 'austerity'? The cuts have slowed down our public spending and even that has made us one of the strongest economies in Europe. So I'm not sure where he's getting the 'not working' from.
I don't know what world you live in where you don't think we're in a period of "austerity" right now. That's literally all that finance ministers and politicians and bankers and economists are talking about. Whether or not this fits your pet definition of what "austerity" should mean, the rest of us are going to continue using that word in the way that we have been using it and all seem to understand just fine.
> Most of the fluffy scenarios he describes, whereby private individuals make voluntary, mutually beneficial agreements with each other, is almost the very definition of capitalism!
Again -- you're focusing on proving the author wrong ("Haha! Contracts made without threats of violence are capitalism, but you said capitalism was ending!") rather than even beginning to listen to what he was saying in a holistic manner.
If you're fanatically obsessed with defending a econ 101 definition of capitalism: sure, you got him. There will still be voluntary mutually beneficial agreements; capitalism will survive.
For the rest of us: this article was not about the word "capitalism", it was about what arrangement of "voluntary, mutually beneficial agreements" can be expected to exist, writ large, in a system where marginal cost of production quickly approaches zero.
>anyone who's read economics 101 would tell you corporate monopolies are rarely result of unadulterated capitalism, but rather state corporatism
Corporatist despotism is the logical conclusion of any laissez-faire capitalist economy just as Stalinism is the logical conclusion of any Marxist economy. Businesses are sticky and over time will tend to clump together, for efficiency reasons, into larger businesses. Once these businesses reach critical mass, they start to have a significant amount of influence over politicians through lobbying and campaign contributions. They use this influence to do something called "regulatory hedging" whereby they can squeeze out competition and achieve monopoly through introducing complicated legal requirements that make it tough for the little guy to get ahead. The FDA and federal tax codes are good examples of this.
This will continue to happen time and again until we put in place good checks against businesses consolidating too much power. Of course, it's too late for that since we've already let them control our political system.
You can always transfer money from point A to point B, the only difference is how costly and transparent that transaction is is. Banning private contributions increases the cost but decreases the transparency.
There's a significant competitive advantage to writing your own rules for the game you're playing in, so as long as that much power is concentrated in so few hands, businesses are going to find loopholes and other means of getting what they want. An example would be a business threatening to fire all their workers in a certain area and move somewhere else unless they were granted what they wanted. Boeing did that quite effectively just recently in the state of Washington and was able to get a massive, multi-billion dollar tax break. So now Washington taxpayers are essentially subsidizing the bottom line of an already hugely profitable business.
Apology accepted? But I do know what I'm talking about. Monopolies in a market economy can only exist if they've had no competitors and have met all of their customers needs and defeated all competition. Google is a monopoly, because it's something we're all generally pretty happy with. Even the slightest downfalls in Google lead to competitors taking advantage of that. Say data privacy for example, Google were subpar there, so Duckduckgo gained major momentum. Market competition will almost always prevent monopolies. Monopolies occur within our current model because state regulation, state taxes (including corporate tax relief) create what's known as a 'barrier to market'. Meaning it's far, far more difficult for a competitor to actually compete on a product level.
Most of our debt's occur because interest rates are so high, and why are interest rates so high? Because they're pegged above inflation, and why do we have inflation? Because governments bide time and bribe us with free things either funded by debts they've instigates, or by printing fiat currency. Which aren't market ideals, by any definition.
I think I might go so far as to say I don't really think either of you know what you are talking about. Monopolies are created by barriers to entry into a market, this can include things like state regulation, but also things like intellectual property, and capital. Monopolies distort the market, but are not always net negative. Perhaps a good example are silicon wafer manufactures (technically an oligopoly, but the same arguments apply). Because the startup cost for silicon manufacturing is so high, and the infrastructure takes time to build, supply does not have to, and regularly does not match demand (bad). That said, the scales of economy involved with allowing a single company to produce so much silicon in this case makes that trade off well worth it.
I think it's silly when people use monopoly as a synonym for bad. Sometimes monopolies make sense.
I agree that sometimes monopolies makes sense, and that they're not all bad. So long as they're do through voluntary, customer means, then sure.
I mentioned in another response further up that, sometimes a company will provide services so well that they create a 'market satisfaction' whereby there'd by no point competing because consumers aren't looking for an alternative so there'd be little point. I think Google (before the privacy concerns were raised) were an example of that.
> I think it's silly when people use monopoly as a synonym for bad. Sometimes monopolies make sense.
Theodore Roosevelt's policy on monopolies was pretty much this. Monopolies that provided good service at reasonable prices were left alone, those that abused their power were attacked.
No, monopoly, market, or pricing power (the the terms are equivalent in anti trust law) exists when there is a range in which an entity can increase prices without losing sales to competitors. There is no percentage of market threshold.
This definition reflects the economic concept of a monopoly in that the presence of this pricing power indicates the absence of a competitive market with perfect substitutes for the goods sold.
> individualism replaced collectivism and solidarity
I find myself wondering if I am part of a remaining few who treasure that. I value self-sufficiency over dependency, moreso as I get older. I have come to realize that there can rarely be an imposed collective benefit that didn't come at the expense of at least one individual. The answer to "is it worth it?" will be dependent on which one you ask. Likely the same for "is it moral?" if I had my guess.
That said, I don't think individualism can last forever. The fast exchange of ideas gives incredible power to well coordinated groups. Will it descend into mob rule? Maybe, maybe not. Time will tell. We see regular examples of internet mobs taking down powerful people and companies. The recent Pao take-down comes to mind here. People have their opinions on whether or not it was justified, and mine is irrelevant here, but to me what is most striking was the sheer effectiveness of it. Eventually "we" will figure out how much power we wield and put it to use on targets of more consequence than the CEO of a cat picture website. Occupy could have really shaken things up with the right leadership in place. They were tactically effective, but lacked a leader to put them to effective use to achieve an end.
I think the time of the collective is fast approaching. As long as it's a volunteer collective, I have no issue. If it's forced at the threat of violence, I think my opinion would differ. I am not convinced that history inspires confidence on this one.
Internet mobs only take down powerful people and companies when those companies are built to facilitate those mobs.
Internet mobs have completely failed to take down any number of other bad CEOs, or influence the policy of any nation state in a significantly positive way.
The disconnect is leverage. You can rant all you like online, but corporations only care about sales and the bottom line. Unless Team Rant has a measurable effect there you have no real influence at all.
Internet mobs have been good at shaming middle- and low-status individuals who attract envy and/or who say the wrong thing in public. Careers and reputations have certainly been damaged or destroyed.
But don't confuse that kind of schoolyard game for political or economic influence - they're completely different things.
This is why I mentioned Occupy, they had the people in place to make a meaningful impact. They were able to come out in force so quickly because of the free flow of ideas and information. It may have been that quickness that kept them from forming a cohesive strategy for achieving their ends, but that could be a whole 'nother article in itself.
It can't be imposed. The term 'collectivism' is a poor choice due to its historical baggage of totalitarianism. 'Community' is slightly better.
I don't think this article is really talking about 20th century centralized socialism as we've understood it. I think we do have the potential to shed that cold war narrative and explore other more self-organizing possibilities.
Self sufficiency and dependency are not a 1-dimensional parameter. You can be self sufficient in some aspects, and dependent in others, and each of us can be like this in different ways.
Both aspects have their merits, and it is very easy to see that those merits are fundamental necessities. Governance is hard.
What I meant is that governance implies some dependencies. Ones that people may not want, which makes it hard to know what dependencies to apply through governance.
Agreed, I just meant I choose self-sufficiency over dependence when possible/practical. As I get older, it seems to impact my choices more and more--and I'm not (just) talking about basic necessities, it's also guiding my investment decisions and property purchases.
The 20th century, in contrast to past centuries, was an experiment in progressivism. The idea that the state can be used by the masses to improve the well being of individuals over what can be achieved in a situation of economic liberty. So what came of this? We're finding out is that the power to regulate, is also the power to grant special favors. That giving this power, even to a well intended political class, was resulted in a poor outcome for us.
I find it interesting that the EU took over the currency, interest rates and inflation are set by state actors, and that now we're seeing articles such as this one that blame economic liberties for the failure of the system.
The 20th century, in contrast to past centuries, was an experiment in progressivism.
Maybe from the magnetosphere. Otherwise, it's blatantly false ... well, at best limited to the coddled middle class western world, but only post WWII, and only if you exclude Vietnam, the Gulf War, and other major conflicts, the NSA's antics, and pretty much anything that happened in economics... perhaps with the exception of collateral debt and high frequency trading, which were progressing something ... I'm just not sure anyone really stood for it except its positive results on their bank accounts. I suppose Mao, Hitler, Pol Pot and the Japanese Empire were 'progressivist' by some definition, though!
I find the article lacking. Author makes a bunch of controversial yet unsupported statements. Even if they're true (something he doesn't really bother proving), the logical links from one to the next are missing.
Ie I can't even dismiss it as typical Guardian progressive ranting - because there is no coherent story to dismiss, more of a hot-potch of terms.
That's more or less correct. The problem is real (we don't need that many people to make all the stuff) but the proposed solutions are no good. He's into co-ops and "local", which just don't do much in the developed world because the big guys are not inefficient. (You're not going to beat WalMart on price with your local grocery co-op.) Then there's some Marxist analysis, which doesn't help; Marx wrote when companies needed huge labor forces.
Bernie Sanders, the presidential candidate, makes an interesting point. He questions the whole idea of economic growth as a national goal. “Unchecked growth – especially when 99 percent of all new income goes to the top 1 percent – is absurd. Where we’ve got to move is not growth for the sake of growth, but we’ve got to move to a society that provides a high quality of life for all of our people."[1] There's something to be said for that. You get what you measure and optimize for, and US policy has been to optimize for GDP. Maybe we should be optimizing for median per capita real income per hour worked, or "how much does an hour of work buy for most people". That's a number you never used to see in the press, but it shows up more now.
For start it omits taxes and wealth transfers - and secondly it measures 2009-2013.
2009 was the year right after the crash when 1% experienced a sharp decline in income.
Thirdly, the huge increase in healthcare (hence insurance) costs is largely carried by employers. That's one of the main reasons for stagnant wages of late - total compensation has been increasing but the increase is flowing into benefits - thus flat income.
I have been thinking myself about the issue of inequality and think it's being obfuscated by the language used (whereby it's discussed in terms of rich vs poor instead of US poor vs foreign poor).
Ie - how are the wages for the top 1% (lawyers, doctors, bankers, etc) affecting the wages for the bottom 50%? If anything I think that immigration has been a much larger factor (for the low skilled / paid sector of the economy).
I can't even dismiss it as typical Guardian progressive ranting
FYI because it is not clear from the article, but this is actually a marketing piece for a book:
Postcapitalism is published by Allen Lane on 30 July.
Paul Mason is the award-winning economics editor of Channel 4 News. His books include Why It's Kicking Off Everywhere: the New Global Revolutions ('Compact, urgent, present-tense, declarative and addictive' - Andy Beckett, Guardian); Live Working Die Fighting ('Indispensable, brilliant' - Ken Loach; longlisted for the Guardian First Book Award); and Meltdown: The End of the Age of Greed ('Lucid and sharply polemical' - Oliver Kamm, The Times).
>Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system’s defence mechanism is to form monopolies – the giant tech companies – on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.
This is a fascinating dynamic. How do you charge for information when nearly anyone can replicate it for free?
* Novelty - sure you can get civ4 for 2 dollars, but civ5 is "more desirable".
* Punishment - hexrays blacklisting engineers that use IDApro without a license.
* Technical - DRM it is only mildly effective, but architectural solutions such as gmail or WoW have a low piracy rate.
* Rewards - benefits to compliance, such as steam backing up your saved games and giving you hats.
If a nation were to completely ignore IP law would that provide a competitive advantage to that nation?
Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant.
I don't understand how this follows. Wouldn't having more information mean that prices form more correctly?
Lots of people get themselves into trouble pontificating on how the flow of information makes markets work or not work. What they often fail to notice is that there is also a market for information itself, and that it's not really necessary to special case "information" differently than any other necessary input.
We've been hearing about the impending “end of capitalism” since the beginning of merchant capitalism in the 16th century. Mercantilism still thrives even when commodities are produced by non-capitalist production methods.
The success of Uber, Airbnb, Ebay, Amazon underwhelms his argument. Information technology, and really the internet, have worked around traditional anti-capitalistic forces like taxes and regulation very effectively.
Awesome to see such an expression of technological optimism informed by social concern. A rare thing these days.
they have struggled to describe the dynamics of the new “cognitive” capitalism. And for a reason. Its dynamics are profoundly non-capitalist.
I believe the author refers to Yann Moulier Boutang's theory, espoused in his book Le capitalisme cognitif (translated in to English as Cognitive Capitalism): http://www.amazon.com/Cognitive-Capitalism-Yann-Moulier-Bout... .. I actually had it sitting on my bookshelf here in China (had to wait for the translation to come out before ordering) .. must remember to read it now!
It's interesting the Greece and 2008 global crises are usually brought up, but important to note that with capitalism comes a need for responsibility - especially regarding debt, and those failures were a result of irresponsiblity on the part of the governments and actors involved - not a defect of the capitalist system itself. In both cases, taking on massive debt and quite simply, living beyond one's or a state's means.
This seems like a bit of a strawman version of the Greek crisis in relation to capitalism, attributing to human failures actions which were a result of a complex series of coercive acts. The worldwide financial crisis was created because of strong incentives on financial institutions to game the system for profit. This led to a worldwide breakdown of economies, but nations were not equally able to respond with economic stimuli. The Greeks were in a particularly bad situation because of a wealthy class which has been able to avoid taxation. Corrupt government also played a very important part in the process.
But the underlying cause of the crisis was the fact that the rules of capitalism have the property of being exploitable by large financial institutions unless they are under strict public oversight, and even this has been shown to be ineffective. Rational self-interest by banks which damaged the world economy forced Greece into a series of austerity measures which progressively weakened their economy and their ability to pay their debts, locking them into a series of pressure to take yet more loans under terms which lowered their ability to repay them. The logical end of this was their most recent deal which surrendered national sovereignty over their economy.
So what we see from this example is that capitalism has shifted most of the power to those most able to manipulate it, financial institutions, and led to the degredation of national sovereignty. The extreme end of this scenario would be a world without any nations controlled entirely by banks, but I doubt we will get to that point before alternative models take hold, as very few people want to live in that kind of world.
The problem with Greece isn't capitalism, that much is obvious. The problem is the EU was designed to fail. It was created in such a way to appease the dominant economic countries by guaranteeing the EU would not be a transfer union. This all but doomed weaker economies from the get go.
Tied to one currency they lost the most effective means of combating budgetary and economic issues. Worse, as they become weaker it becomes ever harder for them to generate the hard currency they need.
So if anything what happened is exactly the opposite of capitalism, they could not compete because the rules agreed by governments prevented them. Yes Greece shares fault for working the books but the EU was formed to only favor the powerful countries and protect their interest, this was no union
Preventing the EU from being a transfer union is not what doomed the weaker economies; the fact that some of the weaker economies tried to turn it into such did.
The more capitalist weaker economies (note: most are poorer than Greece) seem to be doing just fine.
I wonder if it is possible to design a currency union with just a small amount of decoupling between the individual national bonds and the unified currency? e.g. all members of the union are required to make certain transactions in euro, but issue national debt in their own currency which floats in exchange vs the euro? I think this scheme has problems, but it seems like with the right decoupling points somewhere in the system, you might be able to operate the euro more robustly.
Full-on, spot-on, and a huge "hell-Yeah."
I've said it before and I'll say it again, we need to build a really big damn space ship.
(buildtheenterprise.org)
you can't run an economy on information alone. you can't eat information, or haul lumber with it. Information is just a lever that makes hauling lumber or producing food more efficient.
"Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work,"
The need for work hasn't reduced, it's just changed.
The issue is that someone will need to be doing the work and the people doing the work aren't going to put up with giving the majority of their pay to the rest of society (that don't need to work) for very long.
This idea will eventually lead to total wealth distribution and then the issue will be how you decide to split up the money.
Do we then need to have control on the number of kids a person can have? How about risky behavior (so health care costs aren't that high)?
Also, who decides how it's split up?
All of the articles about basic income and 'post capitalism' only take into account what will happen in the very beginning, which might seem like it's working.
They never discuss the long-term where 3 generations of families are living off of the system and the continued dependence of more and more people. What happens when the number of people on basic income vastly outnumbers the amount of people working? Will the government force people to work? A revolution? Starvation??
Capitalism is not perfect, but it's the one system that not only brought us the most technology and advancements, but also brought the most people out of poverty.
Most of these ideas aren't new. They have been tried and failed and are now just being re-packaged and prettied up into something that seems more palatable.
Secondly, he's citing 'information technology' as being the death of 'capitalism'. An industry, arguably the most aggressively capitalistic.
Then he talks about corporate monopolies (anyone who's read economics 101 would tell you corporate monopolies are rarely result of unadulterated capitalism, but rather state corporatism).
He mentions big companies using public data, most of that public data is generated, collected and shared openly by private companies to start with. I'm not even sure what his point was there...
Then he talks about alternative currencies, something which bloomed in response to flailing, devaluing state currencies. Which is just about the most free-market response to state currencies...
The next paragraph he references briefly the 'sharing economy', something pioneered and spearheaded by companies such as Airbnb and Lyft. Truly great success stories of consumer capitalism.
"The solutions have been austerity plus monetary excess. But they are not working." - What? Our public spending has increases by £50bn, how is this 'austerity'? The cuts have slowed down our public spending and even that has made us one of the strongest economies in Europe. So I'm not sure where he's getting the 'not working' from.
"Even now many people fail to grasp the true meaning of the word “austerity”. - Oh, the irony.
Most of the fluffy scenarios he describes, whereby private individuals make voluntary, mutually beneficial agreements with each other, is almost the very definition of capitalism!