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Libertarian communism (self.PoliticalDiscussion)

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[–]haalidoodi 0ポイント1ポイント  (7子コメント)

Man thrives under capitalism. Even the ones who do not succeed to wealth do better than in the best "rejection of history" made new from whole cloth model.

I typically agree with this sort of sentiment and your general argument, though I believe it is also rather foolish to assume that the current system is the new and permanent "normal" simply because the Western world seems to have comfortably settled into it for what is, in the aggregate, a relatively small amount of time, about 70 years. I suppose when you've been raised in the West (as I was and I'm assuming you were as well) and been surrounded by what seems like a stable, relatively happy system and society it's easy to declare that we've reached the end of history, and that the only inevitability is that the rest of the world will slowly catch up and join the Western liberal capitalist democracies.

I say this is foolish because there are certain forces in society that are beginning to rock that equilibrium, issues that certainly could be attributed to flaws in the underlying system. Probably the biggest one is growing inequality. Now for the record, I have no problem with people being more or less successful in their own lifetimes: our current system is remarkable in that it has created an unprecedented meritocracy, especially in the private sector where all that really matters is how ambitious and skilled you are. The problem begins to occur when that wealth gets passed down from old to young, and gives them an enormous advantage over their peers. In this way, it becomes quite possible that while a technically meritocratic society is preserved, the children of the wealthy have such an advantage from early on that they become, for the most part, a new de facto aristocracy.

If this seems like mostly speculation, I will admit it's mostly backed up by my own subjective experience, though The Economist had a great article on this issue recently. But anyways, my own experience: the first half of my childhood I grew up as part of a poorer immigrant family in a lower-middle class environment, fairly typical. It was my high school experience that shocked me though, as I had the luck to get into a charter school in a very wealthy neighborhood. To summarize briefly: I saw parents willing to spend thousands on ACT classes, on private tutors and college prep advisors. I saw kids that were frankly absolute idiots get into good universities and get hefty trust funds that meant they never had to worry about their finances again. I saw completely unmotivated kids get wonderful jobs and internships because of the connections their parents had. This is not meritocracy in its true sense: this is something else, something much worse. Even now in university I see this: so many kids that are only there because of their parents and their resources. It's really saddening, but a daily truth.

Not that the system is completely broken yet: as I mentioned, I'm the son of poor immigrants and yet I'm doing quite well and like to think that I have a good future ahead of me. But the overall trend is still very negative. The tipping point will come, I believe, when Americans generally stop identifying each other as such, and their primary identity becomes one of class, not nationality. Right now, you don't really see class divisions in the US because regardless of wealth, nearly everyone likes to call themselves middle class, it's seen as the respectable and "all-American" position that everyone wants to hold. But I saw this weakening even in my high school years: even among the upper-middle class I often mingled with, there was a growing sense of superiority, in my opinion. And likewise the opposite among the poorer people I had interactions with: since people are mostly convinced that our system is highly meritocratic, a message that our culture constantly reinforces, then the poor view themselves as failures or weak people, while the opposite is true for the rich, regardless of the inherent advantages or disadvantages each of them had. And once such feelings become entrenched, once people begin to firmly, if subconsciously believe that they are part of a superior or inferior class...well, that's just a good old-fashioned aristocratic society.

[–]mrhymer 0ポイント1ポイント  (0子コメント)

Western world seems to have comfortably settled into it for what is, in the aggregate, a relatively small amount of time, about 70 years.

Capitalism did not start in 1945. People and trade and marketplaces and banks that loan capital are almost as old as recorded history. It was only when married with enlightenment concepts of individual rights and rule of law did capitalism come into it's own. It has existed in this for for at least 200 years. Think about man's progress in that time. It is greater than the previous 20000 years and capitalism is to blame.

Probably the biggest one is growing inequality. Now for the record, I have no problem with people being more or less successful in their own lifetimes: our current system is remarkable in that it has created an unprecedented meritocracy, especially in the private sector where all that really matters is how ambitious and skilled you are.

The inequality issue makes assumptions that are simply are not true in reality. Those assumptions are:

  1. That wealth is one share pool where those that have more somehow take it from those who have less. This false assumption is debunked merely by asking for a concrete example that exists outside of statistics and these assumptions.

  2. That wealth is harm. Again, when you ask for a concrete example of who is harmed and how the narrative falls apart.

[–]mrhymer 0ポイント1ポイント  (5子コメント)

The problem begins to occur when that wealth gets passed down from old to young, and gives them an enormous advantage over their peers.

How? How does a young person inheriting a billion dollars harm you? Harm anyone? This is especially true in a free place with a proper government. This young billionaire can legally and morally engage me in three ways.

  1. He can be my customer. This is not harm.

  2. He can hire me. This is not harm

  3. I can be his customer. This is not harm

If young billionaire does not inherit his money how does it benefit me?

Does my salary go up? no

If young billionaire inherits $2 billion does my salary go down?

No - I am paid the value of my efforts in the market regardless of how much or how little young billionaire has.

You could argue that young billionaire's money is removed from the economy and sits fallow. You would be wrong. Even young stupid billionaires invest their money into the economy somewhere and somehow.

There is no harm in inheriting wealth.

[–]haalidoodi 1ポイント2ポイント  (4子コメント)

I'm sorry to say this, but I fear that you're incredibly oversimplifying the situation, and are taking on an incredibly naive view of economics. Trust me, I know how markets work, how the free market works in theory and all the rest, I'm an economics student at a fairly reputable university. I really admire your idealistic view of the world, and I remember when I thought of capitalism in the same idealistic terms. But as has been observed by many of our professors: there may be plenty of libertarians in Econ 101, but none left by Econ 451. My point is, I understand many of your points, but you seem to be attributing to me certain admittedly primitive but common arguments (like the belief that wealth is a zero sum game) which I certainly do not hold.

How? How does a young person inheriting a billion dollars harm you? Harm anyone?

There are several things I want to say about this argument. Firstly, as is often the case in economics, it's not necessarily a matter of harm so much as one of efficiency. Could that money be put to better use? And if so, does that mean that by allowing such an inheritance, we are depriving society of a better outcome? There is plenty of economic evidence supporting these points, most prominently the recent, gargantuan IMF report that suggested that taking money from the top and dispersing it to the poorest has noticeable positive effects.

In the longer term, massive inheritances are economically inefficient because they skew the meritocracy that makes capitalism so successful in the short term. If you have what is essentially a randomly selected fraction of youth getting massive extra resources, even if not at the expense of others, then you achieve a non-optimal outcome as educational resources are allocated essentially randomly, rather than according to the best rate or return or best available marginal yield, as is theoretically the case in a true meritocracy. This is economically inefficient, can you argue with that?

Capitalism did not start in 1945

I didn't mean to argue that, if that's what it came across as. What did start in 1945 was something resembling a seemingly stable world order, where liberal capitalistic democracies became the dominant force economically and politically in the world, and large middle classes prosperously sustained themselves. What I am arguing is that we cannot necessarily expect this specific order to persist. Because you're right, markets have existed for thousands of years, probably for as long as people have settled in large groups. But throughout that entire time, have we seen major liberal democracies coexisting in relative peace and sustaining large middle classes? No, we generally saw autocratic regimes, lots of warfare and a large poor class sustaining a small aristocracy (now without exception of course, but as a general rule). What we have seen since the end of WWII is a historical abberation, albeit a very nice one, but my point is that we cannot be complacent and assume things will always be like this! I like liberal democracies coexisting in prosperous peace, but we can't assume this will always continue as if on autopilot--steps will need to be taken to preserve this!

The inequality issue makes assumptions that are simply are not true in reality

I use neither of these assumptions and still arrive at a harmful conclusion. To reiterate: excessive inequality leads to misallocation of educational and other developmental resources within a generation, gradually corroding the meritocracy that makes capitalism so productive and successful (and it absolutely is, capitalism is one of the greatest things to even happen to humanity, we don't disagree on that), eventually leading to a de facto aristocratic state where the children of one class have a distinct and significant advantage over all others, regardless of innate ability. Meritocracy collapses, capitalism's efficiency disappears and everything goes to rot.

Just to make clear again, I'm not anti-capitalist and I understand the power and significance of markets--unless you're a graduate student in economics, I expect that I have a fair bit more knowledge in the area than you do. My point is that because our system is so great at being productive, in satisfying needs, providing incomes and giving everyone a chance, we need to fight to preserve it from the flaws that would destroy it if we sit back and do nothing.

[–]mrhymer [スコア非表示]  (1子コメント)

I'm sorry to say this, but I fear that you're incredibly oversimplifying the situation.

I asked simple questions and made simple statements that took the argument from the statistical world to the real world. Your professors and their political counterpoints are redistributionists. They want to tell a particular narrative. The narrative lives in the statistics but it does not live in the real world. The statistics show inequality and that is emotionally unfair to us. That is the narrative that the redistributionists want to tell. The message that wealth is unfair and harmful to "society" justifies the action of redistributing that wealth. The problem is when you search for the individuals that are actually harmed by another gaining wealth you cannot find them. With the right measure you can tell any story with statistics. These inequality statistics are not trying to tell the truth in reality about wages over time. They measure the job not the people. If you measured a random sample of 1000 middle class people who have worked consistently for the last 30 years you would not see an average of stagnant wages. You would not see that because you would find that most if not all did not stay in the same job for 30 years. So while a receptionist job may have the same wage adjusted for inflation the receptionist from thirty years ago now owns a successful chain of dance studios and earns considerably more than she did as a receptionist for 8 months straight out of college.

But as has been observed by many of our professors: there may be plenty of libertarians in Econ 101, but none left by Econ 451.

Yes - free people making their own decisions about their own property is the bane of redistributionist economists. After all only centrally managed money create lucrative government jobs for economists. Free market money puts them in the same category of job as a meteorologist. Which would you rather aspire to head of the Federal Reserve or Senior weatherman trying to predict an uncertain future?

[–]haalidoodi [スコア非表示]  (0子コメント)

I'm going to consolidate responses to all three of your replies into this one post for the sake of convenience; I hope you will do the same in the future, to make life easier for both of us.

Your professors and their political counterpoints are redistributionists. They want to tell a particular narrative.

People become academics after years of scholarly debate, research, and exposure to a higher level of rigour than either of us has ever experienced. To suggest that they are part of some ideological conspiracy is frankly laughable, and leads me to question your actual knowledge of the topic.

The problem is when you search for the individuals that are actually harmed by another gaining wealth you cannot find them.

I'm going to ignore the obvious and known problems of externalities, because even if your own perfect world of purely beneficial, voluntary transactions, the weakness of the system can be shown. I will present a simple example that anyone with experience in actual academic economics is surely familiar with. Imagine the simple example of a market where all goods are perfect substitutes: any theoretical distribution of goods is Pareto efficient, meaning that nobody is being harmed by the distribution. Theoretically, a situation where one person has all the goods would be Pareto efficient, and yet you can hardly call that a "good" or desirable outcome. Just because nobody is actively being hurt doesn't mean that things couldn't be better--in many cases, much, much better.

After all only centrally managed money create lucrative government jobs for economists.

Last I checked, my undergraduate institution's graduating economics class was employed 70% in the private sector with another 15% in graduate school. These numbers are generally consistent across most economics programs.

Government core activities add value but you pay the cost of that value. A private enterprise creates a good or service that is valued above cost.

TIL externalities don't real. Let's just ignore the positive externalities that result from governments providing education, healthcare, defense and infrastructure. And while we're at it, let's ignore the negative externalities from many private products, whether cigarette smoke, factory pollution or noisy concerts. What you say may be true for private cost and value, but not true to societal cost and value. I mean come on dude, this is literally stuff you learn in high school econ!

It would be in a globe hopping power wielding position as heady as the IMF I assure you. Statisticians pay the hand that feeds them.

I'm not going to even touch this, as it's clearly stumbling into /r/conspiracy territory. All I will say is that if you actually bother reading the report and have some concrete criticisms of their methods or analysis, then please put that forward. But don't shoot the messenger because you don't like the message!

[–]mrhymer [スコア非表示]  (0子コメント)

Firstly, as is often the case in economics, it's not necessarily a matter of harm so much as one of efficiency. Could that money be put to better use?

Better put to use by whom? I assume your answer is benevolent government for the greater good. Let's explore that:

Government will spend the money to pay for the cost of government. The money will go dollar for dollar to pay for goods, salaries, and contracts.

The young billionaire will spend only a small portion of the money dollar for dollar. The rest he will invest in businesses that will use that money to pay for costs.

The different between the government spending of the money and the private spending of the money is that government never creates a value above cost for the economy. Government core activities add value but you pay the cost of that value. A private enterprise creates a good or service that is valued above cost. People and government will pay that company more than the good or service cost. That activity generates profit and grows the economy. The government merely takes from the economy and pays that value back to the economy. None of the government's activity with the old dead billionaire's money grows the economy.

The answer to your question is no one can spend the money better than a private individual not giving it to government.

There is plenty of economic evidence supporting these points, most prominently the recent, gargantuan IMF report that suggested that taking money from the top and dispersing it to the poorest has noticeable positive effects.

So you are telling me that an organization that only exists because there is centrally managed money system put in place by redistributionists put out a report supporting redistribution. That is stunning. What job would the economists/bankers of the IMF be doing if money were privately created and interest rates were solely market driven? It would be in a globe hopping power wielding position as heady as the IMF I assure you. Statisticians pay the hand that feeds them.

[–]mrhymer [スコア非表示]  (0子コメント)

What did start in 1945 was something resembling a seemingly stable world order.

I agree that this is unsustainable but for political reasons and not economic ones. The reason we had a peaceful world order is because the US used the crisis of a second world war to meddle. We essentially occupied and stripped the repeat offenders (Japan and Europe) of their military. Europe through NATO and we just sat on Japan.

Economically, the world modeled an earlier US period to generate economic prosperity. The period from 1870 to 1914. The US during this time was the most prosperous in history. To make a very long twentieth century story short one only needs to look to Hong Kong and Singapore to see that the more economic freedom for individuals the more success. China is another more recent example.

Despite it being the narrative that economists and politicians do not want to tell, the truth is the less government the more prosperity. Please do not confuse me with anarchists. Government is necessary and required in it's proper size, scope, and roles.

excessive inequality leads to misallocation of educational and other developmental resources within a generation.

Only because education and the other developmental resources are the sole domain of the government. Remove government and private investment will yield much better results.

eventually leading to a de facto aristocratic state where the children of one class have a distinct and significant advantage over all others, regardless of innate ability.

Again, I ask you - how? How would my life be better if Paris Hilton was less wealthy? Whose life, specifically, would be better?

unless you're a graduate student in economics, I expect that I have a fair bit more knowledge in the area than you do.

I am not currently a graduate student in economics but I have been. I have also been a professor of economics to undergrads in college but all of that is beside the point. Expertise does nothing to alter the truth of a thing. The beauty of this place is that we are all pure anonymous opinion that stand solely on the merit of argument. Don't sully that by bringing in credentials and disqualifications.

My point is that because our system is so great at being productive, in satisfying needs, providing incomes and giving everyone a chance, we need to fight to preserve it from the flaws that would destroy it if we sit back and do nothing.

I agree with you completely and I admire your defense of your position. The problem is that I am convinced that the flaw that will destroy the good thing we have is centrally managed fiat money and regulation.