Capitalism: the cause of and solution to all life's problems

[zompist]

governments are kind of shite at research. universities are better, and they often have alliances with industry in order to research things. but no, this idea that basic, unmotivated research often leads to useful results is not really true. people didn't discover the internal combustion engine as an accident while musing about the expansion of gases as a general phenomenon, it was working people, engineers and chemists and physicists trying to come up with something useful that went "what if we could do this thing", and tried, and managed it. a key problem with market coops is that you need to have copyright and patent systems in order to make sure people actually keep doing this under your socialism, and those tend to discourage innnovation strongly.

This is a pretty weird set of statements. Governments are great at research. Mostly great at funding it: the universities do all that research with heavy government funding. Plus, many of those universities are government institutions. Our government was key for developing agriculture, the Internet, particle physics, space travel, and a load of military innovations. The CDC is still key in advancing medicine.

I'm not sure what you're saying about patent and copyright-- they're needed but they're bad?

I'm not sure I get the pooh-poohing of basic research, or placing "physicists" in the category of people "trying to come up with something useful". Inventors and engineers are highly valuable, of course, and historically craftsmen and even humbler people have contributed immensely to science. But you also need abstract-oriented people to make sense of the practical information, and come up with theories that lead to more useful things. And really, for sure really, abstract ideas that are worked out for the theoretical fun of it often lead to practical results years or centuries later.

[Travis B.]

governments are kind of shite at research. universities are better, and they often have alliances with industry in order to research things. but no, this idea that basic, unmotivated research often leads to useful results is not really true. people didn't discover the internal combustion engine as an accident while musing about the expansion of gases as a general phenomenon, it was working people, engineers and chemists and physicists trying to come up with something useful that went "what if we could do this thing", and tried, and managed it. a key problem with market coops is that you need to have copyright and patent systems in order to make sure people actually keep doing this under your socialism, and those tend to discourage innnovation strongly.

This is a pretty weird set of statements. Governments are great at research. Mostly great at funding it: the universities do all that research with heavy government funding. Plus, many of those universities are government institutions. Our government was key for developing agriculture, the Internet, particle physics, space travel, and a load of military innovations. The CDC is still key in advancing medicine.

I'm not sure what you're saying about patent and copyright-- they're needed but they're bad?

I'm not sure I get the pooh-poohing of basic research, or placing "physicists" in the category of people "trying to come up with something useful". Inventors and engineers are highly valuable, of course, and historically craftsmen and even humbler people have contributed immensely to science. But you also need abstract-oriented people to make sense of the practical information, and come up with theories that lead to more useful things. And really, for sure really, abstract ideas that are worked out for the theoretical fun of it often lead to practical results years or centuries later.

Agreed completely.

[Travis B.]

About patent and copyright, IMO they tend to get in the way of innovation more than they help it. Yes free software does rely on copyright, but that is the because that is the only way to accomplish its goals within the current legal structures - there would be little lost if copyrights and patents were abolished today. And free software in practice exists in spite of copyrights and patents, not because of them, and much has been accomplished through free software, and this would not change if copyrights and patents were abolished.

[bradrn]

To me the big thing is that state ownership shares many of the disadvantages of private ownership, e.g. it is ultimately undemocratic as the workers are concerned. In many cases where state ownership may seem favorable, there is another alternative, which I have mentioned here - worker ownership and self-management but selective state funding. Such is democratic from the workers' perspective, yet is answerable to the state (and through it to the people) because funding is beholden to the purposes of a democratic government. It also does not require activities to be profitable, as many things, such as the R&D mentioned here, are not basically profitable but at the same time are necessary. This also has an advantage over plain nationalization because, as such bodies are not nationalized, future governments cannot decide to privatize them either as they are already owned solely by their workers.

This would be an acceptable alternative, I think. Just as long as we find a way to remove the profit motive for large enough businesses.

governments are kind of shite at research. universities are better, and they often have alliances with industry in order to research things. but no, this idea that basic, unmotivated research often leads to useful results is not really true. people didn't discover the internal combustion engine as an accident while musing about the expansion of gases as a general phenomenon, it was working people, engineers and chemists and physicists trying to come up with something useful that went "what if we could do this thing", and tried, and managed it. a key problem with market coops is that you need to have copyright and patent systems in order to make sure people actually keep doing this under your socialism, and those tend to discourage innnovation strongly.

This is a pretty weird set of statements. Governments are great at research. Mostly great at funding it: the universities do all that research with heavy government funding. Plus, many of those universities are government institutions. Our government was key for developing agriculture, the Internet, particle physics, space travel, and a load of military innovations. The CDC is still key in advancing medicine.

This is basically what I was trying to say.

I'm not sure I get the pooh-poohing of basic research, or placing "physicists" in the category of people "trying to come up with something useful". Inventors and engineers are highly valuable, of course, and historically craftsmen and even humbler people have contributed immensely to science. But you also need abstract-oriented people to make sense of the practical information, and come up with theories that lead to more useful things. And really, for sure really, abstract ideas that are worked out for the theoretical fun of it often lead to practical results years or centuries later.

In my experience this isn’t wholly correct. A lot of physicists these days do have a goal of making something useful. I’ve been doing research with the aim of making a new type of remote temperature sensor, for instance. The line between research and development is thin, and people cross over it all the time (in both directions, even). But yes, I agree that government funding should mainly prioritise the more abstract kinds of research which would otherwise be impossible.

(But then what about early-stage practical research which will eventually become a company, but can’t be profitable any time soon? I don’t know. Maybe a separate pile of money for them, with the expectation that they will eventually pay higher taxes as a company, or something like that?)

[Ares Land]

I know that's a very un-socialist thing to say, but the profit motive is useful. What making a profit can mean is that you produce something worth more than the resources you consume. That's a useful indicator, and we'd lose information getting rid of it.

Of course, there's a long list of cases where reasoning based on profit is unapplicable, because the value of health, fundamental research, or education doesn't translate into monetary terms.

But if you're producing, I don't know, machine tools, you definitely want your machine-tool factory to be profitable. (Though again, there are many questions that should be adressed, regarding how profitable it should be and what should happen to these profits.)

---

I don't think market socialism, workplace democracy and central planning are all incompatible.
In Europe, for instance, the economy does mostly all right with a hands off, market based approach. It would be desirable to introduce some workplace democracy in there -- though I think workers should get about 50% control, not complete control -- but the industries that do work well with a market-based approach can carry on on the free market regardless of how they're run.

On the other hand, if everyone agrees an economic sector should be developped, well, then that's definitely something the state (or a more local entity can take on.)
I think, for instance, we should bring back a solid consumer electronic sector, or textiles in Western Europe; that's definitely a project that could be submitted to the popular vote and taken on (at least in part, by sector). You could still have workers involved in the day to day running of these companies!

(The approach is the one used for nuclear programs worldwide. If it worked for nukes, it'll work for t-shirts and cell phones.)

[bradrn]

But if you're producing, I don't know, machine tools, you definitely want your machine-tool factory to be profitable.

But do you though? What if its profits come from adulterating its metal, or polluting the groundwater? This is the problem I was getting at earlier. The profit motive is extremely useful as you say, but only up to a point — once you’ve exhausted all the ways to increase profit by improving your product, the only thing left is to increase profit by worsening your product.

On the other hand, if everyone agrees an economic sector should be developped, well, then that's definitely something the state (or a more local entity can take on.) … (The approach is the one used for nuclear programs worldwide. If it worked for nukes, it'll work for t-shirts and cell phones.)

I disagree. Military applications are one of the few where the state has an incentive towards development: if the industry isn’t supported, the state is in danger. (Or at least, it’s perceived to be in danger, which from the perspective of incentives is equivalent.) I think a better analogy here is space travel: both the US and the USSR had a very temporary incentive to get it working, but once they got it working, it basically languished until it was recently taken up by people with a profit motive.

(Unless that last sentence is exactly what you meant: initial investment to develop an industry, then hand off to private companies. Though even here I still think the state needs an incentive, lest it ‘develop’ an unsustainable industry which collapses as soon as it’s handed off.)

[Ares Land]

But if you're producing, I don't know, machine tools, you definitely want your machine-tool factory to be profitable.

But do you though? What if its profits come from adulterating its metal, or polluting the groundwater? This is the problem I was getting at earlier. The profit motive is extremely useful as you say, but only up to a point — once you’ve exhausted all the ways to increase profit by improving your product, the only thing left is to increase profit by worsening your product.

I think profit is one criterion and that it can't be entirely left out. But it shouldn't be the only guiding principle. (We in the West have chosen to operate on a 'Greed is good' basis; that's not a healthy situation!)

We have ways to make sure industries don't worsen the product: we can enforce industry standards, for instance. One problem here is how to keep government honest. (The courts can put a company out of business, which is often motivation enough; but lobbyists can make sure the legislation isn't too stringent.)

I disagree. Military applications are one of the few where the state has an incentive towards development: if the industry isn’t supported, the state is in danger. (Or at least, it’s perceived to be in danger, which from the perspective of incentives is equivalent.) I think a better analogy here is space travel: both the US and the USSR had a very temporary incentive to get it working, but once they got it working, it basically languished until it was recently taken up by people with a profit motive.

(Unless that last sentence is exactly what you meant: initial investment to develop an industry, then hand off to private companies. Though even here I still think the state needs an incentive, lest it ‘develop’ an unsustainable industry which collapses as soon as it’s handed off.)

That's one possible approach, yes. Not necessarily the only one: I mentioned high speed trains; the French state has kept its close involvement in their development. (The approach is now slightly more hands-off. Personally I think service degrades as a result.)

I generally think a more market-based approach is best. But there are cases where bypassing the market more or less permanently is a perfectly reasonable democratic choice.

Again, taking trains as an example... Buses and cars will outcompete local train lines every single time, yet trains are a better mode of transport for various reasons (more efficient, less polluting.) Communications are another; it's unprofitable to bring fiber optics to rural villages in the middle of nowhere, but doing so anyway can be a political decision.
If fiber optics seem unbelievably decadent, remember this has been done for electricity and telephone lines.

Along the same lines, I'm a big partisan of the government directly creating jobs. We have a fairly high unemployment rate in Western Europe, a clearly expressed mandate to put an end to it, and the market's only solution is blackmail and wage slavery. The solution is obvious.

[Moose-tache]

I know that's a very un-socialist thing to say, but the profit motive is useful. What making a profit can mean is that you produce something worth more than the resources you consume. That's a useful indicator, and we'd lose information getting rid of it.

Respectfully, this is a mistake. Producing something worth more than the resources consumed is called "value," not profit. A worker who turns lead into gold is not making a single dollar of profit. Leftists have been careful to distinguish the two for nearly two hundred years, and seek ways to eliminate the profit feedback loop without disincentivising the creation of value. On the surface this is easy to do. Nearly everyone producing value today does so for a wage, and so if you can keep wages flowing after you've eliminated the profit motive, you're good. The big question is how to organize the movement of capital through the system if it is not propelled by profit motive, but this is entirely separate from the question of value.

[bradrn]

We have ways to make sure industries don't worsen the product: we can enforce industry standards, for instance. One problem here is how to keep government honest. (The courts can put a company out of business, which is often motivation enough; but lobbyists can make sure the legislation isn't too stringent.)

This was my point when I criticised regulation above. It doesn’t actually work very well, because (a) it’s never strict enough and (b) people don’t want to follow it. We use it only because we haven’t yet found a better alternative.

I disagree. Military applications are one of the few where the state has an incentive towards development: if the industry isn’t supported, the state is in danger. (Or at least, it’s perceived to be in danger, which from the perspective of incentives is equivalent.) I think a better analogy here is space travel: both the US and the USSR had a very temporary incentive to get it working, but once they got it working, it basically languished until it was recently taken up by people with a profit motive.

(Unless that last sentence is exactly what you meant: initial investment to develop an industry, then hand off to private companies. Though even here I still think the state needs an incentive, lest it ‘develop’ an unsustainable industry which collapses as soon as it’s handed off.)

That's one possible approach, yes. Not necessarily the only one: I mentioned high speed trains; the French state has kept its close involvement in their development. (The approach is now slightly more hands-off. Personally I think service degrades as a result.)

But transport, like defense, happens to be another essential industry, so naturally government tends to do better with it.

I generally think a more market-based approach is best. But there are cases where bypassing the market more or less permanently is a perfectly reasonable democratic choice.

Again, taking trains as an example... Buses and cars will outcompete local train lines every single time, yet trains are a better mode of transport for various reasons (more efficient, less polluting.) Communications are another; it's unprofitable to bring fiber optics to rural villages in the middle of nowhere, but doing so anyway can be a political decision.
If fiber optics seem unbelievably decadent, remember this has been done for electricity and telephone lines.

Along the same lines, I'm a big partisan of the government directly creating jobs. We have a fairly high unemployment rate in Western Europe, a clearly expressed mandate to put an end to it, and the market's only solution is blackmail and wage slavery. The solution is obvious.

I agree with all of this.

[Moose-tache]

Alright, let's stop putzing around. It seems that the problem that every economic system is trying to solve is the allocation of capital. Who owns it, who dictates its movement, who is entitled to its dividends. We can square this circle with a simple stroke of the pen. I give you: Economic Sortition.

All sole proprietorships, all shares in publically traded companies, and all capital assets are consolidated, divided into an arbitrary number of pieces, and distributed at random to individuals, for life. When you die, your holdings are randomly reassigned, and when your children reach adulthood they are randomly assigned a package of capital investments of their own.

This is obviously the perfect solution. Watch as I neatly parry any attempt at counter argument:

Q: But won't people just dismantle their companies, you know, rip out the copper and just live on the proceeds?
A: This is how many business owners operate already. Nothing is stopping them, if that's what they want to do.

Q: But most owners don't do that, because they want to leave something to their children, and sortition strictly forbids that.
A: You have to perform adequate stewardship of your holdings, because the only chance your children have is to be born into a world where that is what most people do.

Q: But that's just a tragedy of the commons. You're hoping other people act responsibly, but your individual actions have virtually no impact on... Oooh, OK I get it.

Your new currency, the Rand(o):

[Ares Land]

This was my point when I criticised regulation above. It doesn’t actually work very well, because (a) it’s never strict enough and (b) people don’t want to follow it. We use it only because we haven’t yet found a better alternative.

It's never going to be perfect, but nothing ever is. Regulations are actually mostly enforced.
I think the problem we have right now is that business owners succeeded in convincing everyone that rules like 'don't force your employees to piss in plastic bottles' are too difficult to enforce. It's pretty weird how you can get everyone to buy into obvious nonsense. (My own impression is that this due to a dearth of actually convincing left-wing political leaders.)

Respectfully, this is a mistake. Producing something worth more than the resources consumed is called "value," not profit. A worker who turns lead into gold is not making a single dollar of profit. Leftists have been careful to distinguish the two for nearly two hundred years, and seek ways to eliminate the profit feedback loop without disincentivising the creation of value. On the surface this is easy to do. Nearly everyone producing value today does so for a wage, and so if you can keep wages flowing after you've eliminated the profit motive, you're good. The big question is how to organize the movement of capital through the system if it is not propelled by profit motive, but this is entirely separate from the question of value.

I don't think that changes my point much. You can, for instance, produce loads of machine tools from raw materials -- lots of value added -- but find no buyers for them -- no profits. There could be all sorts of reasons for this -- I don't know, maybe buyers can import them cheaper or maybe everyone has more than enough machine tools already -- but your profit, or lack thereos, is important information.
Maybe you should just close shop. Maybe we should put punitive tariffs on foreign machine tools.
My understanding is that attempts at Marxists economy unwittingly deprived themselves of useful information.

Leftists like to treat profits as a moral failure, but I think it's an impasse. When you work at something, you expect to get something out of it in exchange, and that's normal enough. What's wrong is taking advantage of your position to swindle people out of their fair share.
That's why I support worker participation and why I think worker representatives should be on the board of companies. Employees helped create these profits, so of course they get a share of these and get to decide (along with other interested parties) what to do with them.

(...)

This is obviously the perfect solution. Watch as I neatly parry any attempt at counter argument:(...)

Have you read The Lottery in Babylon?

I really like the related, but more, mm, predictable idea of a universal capital grant. In the latest iteration of the idea (as suggested by my current guru Piketty), everyone gets 120,000 euros at age 25, to be paid for by a tax on capital.

[bradrn]

Your new currency, the Rand(o):

Ooh, a syllabic epi-epiglottal stop!

This was my point when I criticised regulation above. It doesn’t actually work very well, because (a) it’s never strict enough and (b) people don’t want to follow it. We use it only because we haven’t yet found a better alternative.

It's never going to be perfect, but nothing ever is. Regulations are actually mostly enforced.
I think the problem we have right now is that business owners succeeded in convincing everyone that rules like 'don't force your employees to piss in plastic bottles' are too difficult to enforce.

Yeah, you’re probably right here. I’m being too pessimistic.

I really like the related, but more, mm, predictable idea of a universal capital grant. In the latest iteration of the idea (as suggested by my current guru Piketty), everyone gets 120,000 euros at age 25, to be paid for by a tax on capital.

I like this! It seems an excellent idea.

[Torco]

Honestly I kinda like economic sortition.

Leftists like to treat profits as a moral failure, but I think it's an impasse. When you work at something, you expect to get something out of it in exchange, and that's normal enough. What's wrong is taking advantage of your position to swindle people out of their fair share.

basic stuff, but marxists are all for getting something out of it when they work: in fact, our problem with capitalism is that you don't get your work's worth, cause they guy who is blessed by this particular fiction actually gets all of your work's outcomes and in returns gives you as little dosh as possible. profit is not the outcome of labour, but of property and this is why we treat it as a moral failure: it's workers who whip the milk and owners who get the cream.

[MacAnDàil]

Along the same lines, I'm a big partisan of the government directly creating jobs. We have a fairly high unemployment rate in Western Europe, a clearly expressed mandate to put an end to it, and the market's only solution is blackmail and wage slavery. The solution is obvious.

Well, much more France than ot's neighbours, especially the overseas territories. Maybe if the education, job market, people's passions and the skills sets people already have had some more connection perhaps? Especially taking into account the latter two?

[zompist]

Economic Sortition.

All sole proprietorships, all shares in publically traded companies, and all capital assets are consolidated, divided into an arbitrary number of pieces, and distributed at random to individuals, for life. When you die, your holdings are randomly reassigned, and when your children reach adulthood they are randomly assigned a package of capital investments of their own.

Or you could call it Enforced Rawlsianism. I think it's not bad— it combines the economic justice of communism with the getting-ahead opportunities of capitalism.

I see one big problem: education. You are allotted a bowling alley at 21, and you know nothing about bowling alleys. But maybe there's an easy fix: you learn what your allotment is at 18 so you have some years to prepare.

[Vardelm]

I see one big problem: education. You are allotted a bowling alley at 21, and you know nothing about bowling alleys. But maybe there's an easy fix: you learn what your allotment is at 18 so you have some years to prepare.

Another problem: interest. I know nothing of bowling alleys, and everything I do know tells me I don't want to learn anything more. Why would I want to run one?

[Travis B.]

Economic Sortition.

All sole proprietorships, all shares in publically traded companies, and all capital assets are consolidated, divided into an arbitrary number of pieces, and distributed at random to individuals, for life. When you die, your holdings are randomly reassigned, and when your children reach adulthood they are randomly assigned a package of capital investments of their own.

Or you could call it Enforced Rawlsianism. I think it's not bad— it combines the economic justice of communism with the getting-ahead opportunities of capitalism.

I see one big problem: education. You are allotted a bowling alley at 21, and you know nothing about bowling alleys. But maybe there's an easy fix: you learn what your allotment is at 18 so you have some years to prepare.

The problem I see is that, say, I have been programming since I was 8 and have lived in my suburbs my whole life (as in reality I have) - and yet I am alloted work as a farmer - even though I barely know anything about farming and have no interest in farming and have always wanted to work as a programmer when I grew up. Being randomly assigned a job would have gotten me work I have neither skill nor interest in, while I have been developing my skills for years on something completely different. Of course, one could say that I would never have tried to become a professional programmer if I knew from day one that I would be randomly assigned a job - but that ultimately would have been a net loss for society,

[zompist]

I see one big problem: education. You are allotted a bowling alley at 21, and you know nothing about bowling alleys. But maybe there's an easy fix: you learn what your allotment is at 18 so you have some years to prepare.

Another problem: interest. I know nothing of bowling alleys, and everything I do know tells me I don't want to learn anything more. Why would I want to run one?

I don't want to speak for Moose, but I'd note 1) in our system, the child of a bowling alley owner might feel the same way; and 2) I assume that anything left unmentioned is the same as today. So you could sell the bowling alley and use the proceeds to do something you like.

[Travis B.]

Honestly I kinda like economic sortition.

Leftists like to treat profits as a moral failure, but I think it's an impasse. When you work at something, you expect to get something out of it in exchange, and that's normal enough. What's wrong is taking advantage of your position to swindle people out of their fair share.

basic stuff, but marxists are all for getting something out of it when they work: in fact, our problem with capitalism is that you don't get your work's worth, cause they guy who is blessed by this particular fiction actually gets all of your work's outcomes and in returns gives you as little dosh as possible. profit is not the outcome of labour, but of property and this is why we treat it as a moral failure: it's workers who whip the milk and owners who get the cream.

Agreed completely. To me the problem is not profit at all, but that workers do not get the product of their labor under capitalism, as the property owners at the top skim off the profits and throw the workers a pittance in return. (Of course taxes have to be taken out even in a socialist system, as much of society will require them for it to function.)

[Torco]

I see one big problem: education. You are allotted a bowling alley at 21, and you know nothing about bowling alleys. But maybe there's an easy fix: you learn what your allotment is at 18 so you have some years to prepare.

Another problem: interest. I know nothing of bowling alleys, and everything I do know tells me I don't want to learn anything more. Why would I want to run one?

Well, running a bowling alley is not the exact same as working full time at a bowling alley: you could limit yourself to hiring a competent manager and give him broad directives and work whatever job you want.

Alternatively, people could trade allotments: not in a moneyed way, but in a regular old yours-for-mine kind of deal, signed by some clerk from the ministry of sortition.

also it's not that bad if people don't start training for jobs at 8 years old, methinks: there's something to be said for children being children, as opposed to workers.

Agreed completely. To me the problem is not profit at all, but that workers do not get the product of their labor under capitalism, as the property owners at the top skim off the profits and throw the workers a pittance in return. (Of course taxes have to be taken out even in a socialist system, as much of society will require them for it to function.)

that's kind of what profit means, though: making money out of the delta between what the work is worth and how little you can get away with paying people by virtue of ownership. I agree that in regular speech profit can just mean make money, and this is why nerdy and old-fashioned reds use the word exploitation, which is not just lato sensu causing someone to be worse off for one's own sake but amongst socialists it's kind of a technical term meaning appropriation of surplus value.

marx should really have gone with technical terms instead of political ones, but then again german may just be confusing: pardon the sapir-whorf but few german thinkers of the age have the virtue of really clear nomenclature.