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It took me years to realize that economics isn't physics - and it isn't ruled by physics-like laws. Instead, economics is governed by laws created by our societ

by MrTonyD 11y ago

It took me years to realize that economics isn't physics - and it isn't ruled by physics-like laws. Instead, economics is governed by laws created by our society. And what we think of as "free market" is really just norms of trade which are created by our society. There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just a legal arrangement. And there is no reason why the Walton family should continue to be allowed to use offshore corporations to loan themselves money to run all their WalMart stores - that is just a legal arrangement which allows them to avoid taxes and hide their billions offshore. Really, when you start to closely examine "free market", you come to realize that is it a chimera made real by those with power and money.

UK-AL 11y ago
Do you believe in property rights? Having a legal/police system to catch people who forcebly take property? Using trade to exchange property? This is the core of our system. And that system will always generate inequality. Not necessarily a bad thing. You can have laws to take the edge off inequality generated, but at the core of the system you can't really avoid it.
- MrTonyD 11y ago
  I believe in property rights to the extent that they benefit our society. That means that I don't believe in property rights as defined by the rich.
  - rubyfan 11y ago
    The good of society comes as a side benefit of the individual's right to enjoy one's own property... Not the other way around. That we are debating the goodness of property rights in this day is a mystery to me.
- paganel 11y ago
  > Do you believe in property rights? Not the OP, but I think a lot more people nowadays should read (or re-read) Locke's "Two Treatises of Government". That book is famous mostly for the second part, where Locke actually intellectually imposes private property as a thing in the Western world, but I found the first part equally interesting, where Locke fights against a guy called Filmer, who was of the opinion (prevalent until then) that all property was rightfully owned by the King, transferred to him from generations past since Adam. The thing I'm trying to say is that yes, private property is just a social construct, there's no divine nor moral thing about it, the concept came alive (so to speak) only because some guys in England didn't like that their possessions were in danger of being confiscated by the King's men. In the end private property is indeed theft, more exactly the imposition of someone's moral values over the other's by intrinsic force (if you "steal" you might go to prison or worst). The sooner we realize this the better, there's no second-guessing about it.
  - puredemo 11y ago
    >In the end private property is indeed theft, Private property can't be "theft" if there is no private property. If you don't believe in private property, you're sort of poisoning the well of any economic conversation, since it's the foundation of basically all of peaceful civilization. Without private property there is only tribalism and, "might makes right."
    - Frondo 11y ago
      One counterpoint: http://io9.gizmodo.com/5872764/the-greatest-mystery-of-the-inca-empire-was-its-strange-economy http://io9.gizmodo.com/5872764/the-greatest-mystery-of-the-i...
      - puredemo 11y ago
        I'm not sure this is much of a counterpoint. The Inca didn't have a centralized currency, but we really don't know whether they had private property or not, how disputes were handled, or so on. They also seem to have had civil wars, child sacrifice, and other violent traditions. That being said, many things are possible in groups with smaller populations, I've heard stories of large communes being fairly successful with up to several thousand people. However, at some point they tend to become too disorganized and break down, in one way or another. In contrast, the concepts of private property and trade have enabled our human family to grow to 7 Billion, and population growth is barely even slowing down yet. Civilization allows things to work on an entirely different scale by providing a somewhat standardized framework for our territorial disputes. This is also the most non-violent time in history by far, according to researchers, presumably due to the end of tribalism. So, for me personally, there would have to be extremely compelling arguments to even begin to argue against the utility of private property as a social and economic system.
- rubyfan 11y ago
  Clearly the parent does not believe in property rights when they believe unskilled non-differentiated labor should be rewarded with above market rates by force and at the expense of Walmart's shareholders. That individuals believe government should be directed at investors who risk their property to create wealth in order to take by force that property to redistribute it is perhaps the most offensive sentiment. > There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just a legal arrangement. And there is no reason why the Walton family should continue to be allowed to use offshore corporations to loan themselves money to run all their WalMart stores - that is just a legal arrangement which allows them to avoid taxes and hide their billions offshore
  - millstone 11y ago
    I can think of about a million sentiments more offensive than the idea that people who invest should be taxed and that we should have a social safety net.
    - rubyfan 11y ago
      Ha, there aren't a million other sentiments in the grandparent comment. No one is arguing the value of the social safety net. The comment goes above and beyond the safety net suggesting it shouldn't be needed and the remedy is redistribution. A safety net is one thing but arbitrarily inflating wages is another. I don't believe the suggested remedy would be proposed by someone who believes in property rights. Further, as a person who believes in property rights I do find the sentiment of theft of property for redistribution offensive.
  - Spooky23 11y ago
    Let them eat cake! (The concept didn't work out so well for Marie Antoinette) If a revolution comes and you find yourself thrown up against a wall somewhere, remember your comment this evening.
    - paulddraper 11y ago
- drewcrawford 11y ago
  You can absolutely avoid it. Inequality was so much less in the 1950s/1960s and we still had police and property. The disconnect here is that property rights are "more guidelines than actual rules", they are quite literally "made up". It used to be that keeping a black person out of your store was a "property right", until we decided it wasn't, and then we got rid of that one. It used to be that preventing airplanes from flying over your farm was a "property right" until it wasn't, and then we got rid of that one. You can only do that if "property rights" are artificial. I mean just look around you. We live in a world where Smartflash has a "property right" to your in-app purchases, Apple has a "property right" to your iPad, JSTOR has a "property right" to publicly-funded research, etc. etc. That's because we made it that way; let's unmake it, and do it differently!
  - Turing_Machine 11y ago
    "Inequality was so much less in the 1950s/1960s" To a first approximation every single person on the planet had far less in the 1950s/1960s. "Equality" sucks if it means that everyone is equally impoverished.
    - sytelus 11y ago
      Not sure about whole planet but I do realize that previous generation in USA had much higher savings rate, lower student loan, much lower mortgage to income ratio and much higher probability of retirement in 50s/60s. I have never heard people from that generation believing that they were less better off financially than we do, although we do benefit from natural evolution in technology and science.
- analog31 11y ago
  Do you believe in property rights? It seems like we probably benefit from an arrangement where we control the things in our immediate surroundings that we need in order to maintain reasonably stable and predictable lives. For instance it makes sense for me to control access to things like my glasses, bike, pajamas, etc. Property rights work pretty well for defining that arrangement. At the other extreme, we have situations where property rights can be overridden, such as taxation and eminent domain, and entities whose value depends on a stable money system provided by the government -- I see no a priori reason why the workable way to manage those things is not through a system of limited property rights. In broad terms, one such limitation is an agreement that taxation is not a violation of a fundamental human right. The more abstract and artificial "property" gets, the more reasonable that property rights are balanced against other things, such as redistribution. This is the core of our system. And that system will always generate inequality. Sure, and to the extent that it works, it's OK. When it doesn't work, then it seems reasonable to manage it in order to make it work better. Some broad-brush ideas are for the government to provide a functioning money system, and a way to redistribute wealth against the tide of inequality.
- ubernostrum 11y ago
  Do you believe in property rights? As a useful legal fiction subject to the same limitations as others of its genus, sure. As a natural moral right? Not in the slightest, because there ain't no such thing. The history of "ownership" of any given thing today is basically a history of force, fraud and the occasional lucky break. Who should own a piece of land? What moral claim do they have to it? The very best that can be said today is that they can trace a chain of transfers back to the person who most recently was able to stay on that land without being forcibly put underneath it by someone else. What kind of grounding for a supposed moral good is that? So I believe in Thomas Hobbes' conception of the state of nature -- namely, that there are no rights, no virtues, no morals, nothing but all-out war for resources, where what is "yours" is what you can take and keep by violence -- and in his conception of government as what we introduce when we get tired of that, and that this arrangement is better than the "war of all against all" even though it comes at the expense of sometimes having the government decide that "my" property could be put to a better use.
  - Turing_Machine 11y ago
    Could you post your address? I'll bet you have a lot of stuff that other people could use, and since you don't believe in property, you surely won't have any objections to them taking it.
    - ubernostrum 11y ago
      Wow, you sure did destroy that straw man over there. Now, do you want to try engaging with the actual argument (property is a useful legal fiction, not an inherent moral right)?
      - Turing_Machine 11y ago
        Hobbes's thesis is ridiculous, and has been refuted at great length by many over the centuries. I see no need to go over well-trodden ground yet again, but here are a couple of points: If you accept his arguments, you're basically advocating a dictatorship (or his era's equivalent, a king ruling by "divine right"). For another, his notion that humans are motivated purely by ego and self-aggrandizement is demonstrably wrong.
- zanny 11y ago
  There are different kinds of property rights. We have intellectual property - the use of state force to impose the idea that information is scarce when it is naturally not - we have real estate, where an arbitrary box of space relative to planet Earth is assigned to you - and we have traditional goods, where you can have an apple and claim it is yours. The first two are complicated, because they are extremely political. To own geographic space is entirely divisive from owning just the dirt under a house, or the physical material that composes it. To own an idea, a trademark or a patent, is to assign exclusivity to thoughts. Its much easier to say "we have scarce goods, so those that create them can sell them, and the buyer owns it". Its why I think goods property is a good thing, but our attempts to strong arm real estate and IP into the same formula is a cause of constant economic tension because they aren't a good fit. Just in this context for reference, I'm an IP abolitionist and think we should adopt homesteading of property again. Both forms of state granted monopoly to space and idea are being rampantly exploited by market forces and were conceived of in an age when technology did not enable the information exchange we have today. It would have been much more complicated to verify usage of a plot of land a hundred years ago than it would now, to know who previously owned it and for how long it has been unused before you could claim it as your own.
- sytelus 11y ago
  If you truely believe in property rights, you will get in big trouble from philosophical point of view. For example, if you live in US then very likely you will need to surrender your property to last know Native Amarican owner :). In Saudi Arabia, the ancestors of Saud family declared entire country as their private property. The result was that when oil was found there in 1930s, about 2/3 of the income was used by Royal family as their private income to build legions of palaces with elaborate gardens while millions of poor people went without food. Even today Saud family has about 5000 Royal princes, each one with their giant share of country's fortunate based on ancestral claims. This is ofcourse not new to Saudi Arabia. Most of the Monarchs all over the world believes entire country was their private property and people living there was just happened to bestowed the permission to stay there. How does property ownership philosophy sound now when you take it extreme?
  - vixen99 11y ago
    But you choose to ignore the other extreme. I mean that of 100% abolition of property rights, i.e., a recipe for anarchy. Of course you can truly believe in property rights when they are set according to an evolved legal constitution. That's how human beings work to form a better society. There is no such thing as 'trouble from a philosophical point of view' unless one thinks that the space between ALL and NOTHING is blank.
    - sytelus 11y ago
      I'm not against property right at all. I was just making logical argument to poke holes to show that something is at miss in asserting in its puritanical form. The property rights are generational because of ability to transfer those rights. This immediately establishes generational lock down if resources are limited while keeping less fortunate out. This applies to resources such as real estate and political power however not to resources that are unlimited such as creativity and innovation. A large number of people currently live in poverty because there is simply no way for them to acquire education, nourishment or healthcare because they couldn't chose their parents correctly. This doesn't necessarily imply re-distribution of wealth or socialization programs or welfare state or guaranteed basic income or even charities as the solution. In fact, they are almost certainly not the solution. I think we do not yet have correct model for economic rights and rewards established for modern human society. It is also likely that purely economic solution does not even exist given the innate human nature. In that case, the technology might be our only savior where by one day we can have virtually unlimited energy source and robotic savants to create age of abundance.
harryh 11y ago
Some things, like you say, are closer to rules that we can change. Other things, however, are a lot closer to physics: https://en.wikiversity.org/wiki/10_Principles_of_Economics https://en.wikiversity.org/wiki/10_Principles_of_Economics It's very important to understand when you're talking about the former and when you're talking about the latter.
deleted 11y ago
[deleted]
codeismightier 11y ago
I don't understand the hate against Walmart. It only has a profit margin of 3.12% [1] and return on assets of 7.69%. Now I suppose you could argue that all the profits are hidden away somewhere, but that sounds like an unfalsifiable statement. It certainly would be illegal to hide assets from shareholders. [1] https://finance.yahoo.com/q/ks?s=WMT https://finance.yahoo.com/q/ks?s=WMT
- MrTonyD 11y ago
  You're talking to someone who has spent most of his life in the Fortune 50 - working with executives who routinely hide the bulk of their wealth from any accounting. These techniques have been widely discussed in the press (if you look). So I must assume that you have, for philosophical reasons, chosen to disbelieve that the rich hide their wealth. Edit: Not sure why I was downvoted. But I was in the room as we reassigned profits to offshore entities for accounting purposes. And I was in meetings with our senior executives who were arranging to pay themselves in undervalued offshore stocks "off the books". Those offshores provided inflated services and inflated goods to the corporation and avoided taxation while making the executives rich. The value of those offshore stocks was "reinflated" with a phone call. And that is just one company - the Big 3 accounting firms provide these services routinely for both the corporation and its executives. (And when we reassigned profits that had the effect of lowering profits - and even making income disappear. I've seen these techniques used at more than one company.)
  - omalleyt 11y ago
    He's not saying the rich don't hide their wealth: he's arguing that corporations do not report artificially lower profits and then proceed to deny returns to their wealthy owners.
  - xacaxulu 11y ago
    Whenever I have a chance to learn some of these legal means of avoiding excessive taxation, I do in earnest. I see very wealthy people and it only drives me to emulate their business and investment strategies more. There are more than enough legal means of structuring your businesses, transactions and investments in ways that drastically reduce taxation. I made it about 4 years without paying any state or federal income tax. True it took a lot of work and planning, but the income retained was more than worth the effort.
tmorton 11y ago
That's absolutely true. But while physical laws just exist, "economic laws" are a complicated combination of biology, psychology, social norms, the legal system, etc. You can tweak the rules, but you can't run calculations that predict the results. Some of those legal arrangements might be unjust, but their results might be net-good all the same. We can, and should, keep evolving the social bargain, but upending it completely is very dangerous.
RodericDay 11y ago
Zizek phrased it kind of nicely once, in a way that stuck with me. He probably borrowed from somewhere, and I'll continue to lossily reproduce whatever the sentiment was, but it goes something like this. How is it possible that we are completely and utterly optimistic about breaking all sorts of physical barriers, like landing on Mars, and reusing rockets, and communicating worldwide via little handheld microcomputers, and reattaching body-parts, and aiming to live forever, and do all sorts of crazy biological engineering. And yet trying to imagine a world were you don't have billionaires having lavish parties while people starve or drone in soul-sucking jobs, or where sweatshops are deemed "bad but better than the alternative", or indeed any sort of radically different social arrangement is seen as hopelessly naive or regressive. He had better examples, something about a dude with a bifurcated tongue. But the idea stuck with me- what's up with the bounds of our imagination? How come they're limitless when it comes to facing off against gravity, and completely defeatist when it comes to erasing class distinctions?
- natrius 11y ago
  Communism happened. It killed lots of people, and made radical changes in the social order unappealing to most. Now ideas don't just have to sound plausible, but you also have to prove that they won't lead to the deaths of millions.
  - semi-extrinsic 11y ago
    Have you heard of social democracy, i.e. taking those ideas and not implementing them by being a murderous crazy dictator? It's working out just fine for the countries which are consistently ranked as the best to live in in the world. As opposed to the US, which is closer to third world status when it comes to things like low median wage, little to no maternity leave, expensive and poor healthcare system, school shootings, poor literacy rates, high drug use rates, etc etc.
    - maxerickson 11y ago
      US median wages aren't low compared to Western Europe. Modestly lower than the Nordic countries yes, but modestly higher than France and Germany and so forth.
ArkyBeagle 11y ago
If "free market" has any coherent and muscular meaning, it is as an alternative to those in political power assigning the equivalent of royal patents to pursue markets. So any rents-ey looking use of the political process is not free market no matter the wealth of those practicing it. This is what need work. Wal-Mart in specific originally hired women in rural areas at a wage appropriate as a second income. Their husbands worked at an industrial or agricultural job. Then they went through an explosion, but as the South Park says, the soul of every Wal-Mart is a mirror. The ag. or industrial job isn't there any more but by sheer momentum, that's the deal. Wal-Mart is also not exactly a sentence of eternal penury - people who stay a few years, just by self-selection can move up the food chain. I'm not current, but a department manager made enough to raise a family very frugally. A store manager made pretty decent money. The reason it's Wal-Mart and not Sears is decades of hard work at the logistics end - Wards and Sears shipped by train, even in the '60s. Wal-Mart just overran them with trucks. But in a way, what's waiting for the end of Wal-Mart seems worse - Amazon. The labor component of production of goods is still disappearing.
loki49152 11y ago
It's interesting that you faced this issue and came away with the exactly wrong conclusion. Economics is, at root, a physics problem. There's no way to get around that. Every aspect of the field comes down to asking questions about physical resources and their uses. People can attempt to ignore the fact that economics is a special application of physics, but they can't escape the consequences of ignoring reality forever. The belief that it's all just conventions and cultural agreements is exactly like believing that the Moon is just a bedtime story.
- jack9 11y ago
  > Every aspect of the field comes down to asking questions about physical resources and their uses. Nope. Moving 200 million in rock or 200 million in a paper check (or even a promise-based conversation). The extractable amount/usage of Labor and Resources outstrip the human ability to account for it. This has less to do with physics and more to do with "accounting". Without accounting you cannot have negative wealth, for example. This is not tied to physics. This is based on social contracts...all the way down to the currency. I am a little interested in this physics-based economy you speak of.
- imbellish 11y ago
  What you are referring to is more the traditional distinction between the materialists (i.e. Marx) and those that believe in market forces (i.e. Smith).
Fjolsvith 11y ago
Oh come on. I've started a manufacturing business with my smarts, a hammer, a tape measure, and a saw. In 5 years I will sell it for several million dollars. When a convicted felon can do that, the argument that we don't live in a Free Market doesn't hold any weight, imho. A person can find a need, build a business around it, and become powerful and have money.
pdkl95 11y ago
> economics isn't physics - and it isn't ruled by physics-like laws Professor Mark Blyth has a very good summary of this: https://www.youtube.com/watch?v=hmWbkPezgtU https://www.youtube.com/watch?v=hmWbkPezgtU The problem for economics as it's become very mathematical and technical is that the intrinsic beauty and rigor and appeal of the models themselves have become an attractor - something that research gravitates towards. [...] There is a great attraction in these types of models; they create a world of equilibrium, a world of stability almost by accident - they are just a consequence of the model, and it's a beautiful and seductive world.
rewqfdsa 11y ago
The laws of game theory, which underlie economics, are just as real as calculus.
stuaxo 11y ago
Yes, exactly this. We choose the rules, so we can push to have rules that don't have those people on food stamps. Unfortunately when you bring this up, most people can't countenance it.
igravious 11y ago
I know this was a week ago you wrote this but I only today came across this essay by Georg Henrik von Wright called "Humanism and the Humanities" that I think is apt. In §13 he says (and I'm going to quote the thing in full), <blockquote>I shall now advance a thesis which I am sure many will find controversial but which I think is true and, moreover, crucial for understanding the methodological status of the humanities and the relation of the humanities to the sciences of nature. The thesis goes as follows: Just as natural, i.e. non-intentional phenomena are 'governed' by natural laws, i.e. principles which tell us either what will invariably or in statistical average be the case under in principle recurrent and repeatable circumstances, in an analogous manner intentional phenomena are 'governed' by normative rules which tell us what people under given circumstances are (or were) expected or allowed or practically necessitated to do. I am, in other words, pleading for what might be called a 'methodological parallelism' between natural laws on the one hand and laws and other societal rules on the other hand. I am inviting you to see the difference between the humanities and the natural sciences in the light of the difference between the factual and the normative, between rules which state how things in fact go and rules which ordain how they should go according to the conceptions of those who instituted the rules.</blockquote> Make of that what you will :)

by MrTonyD 11y ago

UK-AL 11y ago

Do you believe in property rights? Having a legal/police system to catch people who forcebly take property? Using trade to exchange property? This is the core of our system. And that system will always generate inequality. Not necessarily a bad thing. You can have laws to take the edge off inequality generated, but at the core of the system you can't really avoid it.

MrTonyD 11y ago
I believe in property rights to the extent that they benefit our society. That means that I don't believe in property rights as defined by the rich.
- rubyfan 11y ago
  The good of society comes as a side benefit of the individual's right to enjoy one's own property... Not the other way around. That we are debating the goodness of property rights in this day is a mystery to me.
paganel 11y ago
> Do you believe in property rights? Not the OP, but I think a lot more people nowadays should read (or re-read) Locke's "Two Treatises of Government". That book is famous mostly for the second part, where Locke actually intellectually imposes private property as a thing in the Western world, but I found the first part equally interesting, where Locke fights against a guy called Filmer, who was of the opinion (prevalent until then) that all property was rightfully owned by the King, transferred to him from generations past since Adam. The thing I'm trying to say is that yes, private property is just a social construct, there's no divine nor moral thing about it, the concept came alive (so to speak) only because some guys in England didn't like that their possessions were in danger of being confiscated by the King's men. In the end private property is indeed theft, more exactly the imposition of someone's moral values over the other's by intrinsic force (if you "steal" you might go to prison or worst). The sooner we realize this the better, there's no second-guessing about it.
- puredemo 11y ago
  >In the end private property is indeed theft, Private property can't be "theft" if there is no private property. If you don't believe in private property, you're sort of poisoning the well of any economic conversation, since it's the foundation of basically all of peaceful civilization. Without private property there is only tribalism and, "might makes right."
  - Frondo 11y ago
    One counterpoint: http://io9.gizmodo.com/5872764/the-greatest-mystery-of-the-inca-empire-was-its-strange-economy http://io9.gizmodo.com/5872764/the-greatest-mystery-of-the-i...
    - puredemo 11y ago
      I'm not sure this is much of a counterpoint. The Inca didn't have a centralized currency, but we really don't know whether they had private property or not, how disputes were handled, or so on. They also seem to have had civil wars, child sacrifice, and other violent traditions. That being said, many things are possible in groups with smaller populations, I've heard stories of large communes being fairly successful with up to several thousand people. However, at some point they tend to become too disorganized and break down, in one way or another. In contrast, the concepts of private property and trade have enabled our human family to grow to 7 Billion, and population growth is barely even slowing down yet. Civilization allows things to work on an entirely different scale by providing a somewhat standardized framework for our territorial disputes. This is also the most non-violent time in history by far, according to researchers, presumably due to the end of tribalism. So, for me personally, there would have to be extremely compelling arguments to even begin to argue against the utility of private property as a social and economic system.
rubyfan 11y ago
Clearly the parent does not believe in property rights when they believe unskilled non-differentiated labor should be rewarded with above market rates by force and at the expense of Walmart's shareholders. That individuals believe government should be directed at investors who risk their property to create wealth in order to take by force that property to redistribute it is perhaps the most offensive sentiment. > There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just a legal arrangement. And there is no reason why the Walton family should continue to be allowed to use offshore corporations to loan themselves money to run all their WalMart stores - that is just a legal arrangement which allows them to avoid taxes and hide their billions offshore
- millstone 11y ago
  I can think of about a million sentiments more offensive than the idea that people who invest should be taxed and that we should have a social safety net.
  - rubyfan 11y ago
    Ha, there aren't a million other sentiments in the grandparent comment. No one is arguing the value of the social safety net. The comment goes above and beyond the safety net suggesting it shouldn't be needed and the remedy is redistribution. A safety net is one thing but arbitrarily inflating wages is another. I don't believe the suggested remedy would be proposed by someone who believes in property rights. Further, as a person who believes in property rights I do find the sentiment of theft of property for redistribution offensive.
- Spooky23 11y ago
  Let them eat cake! (The concept didn't work out so well for Marie Antoinette) If a revolution comes and you find yourself thrown up against a wall somewhere, remember your comment this evening.
  - paulddraper 11y ago
drewcrawford 11y ago
You can absolutely avoid it. Inequality was so much less in the 1950s/1960s and we still had police and property. The disconnect here is that property rights are "more guidelines than actual rules", they are quite literally "made up". It used to be that keeping a black person out of your store was a "property right", until we decided it wasn't, and then we got rid of that one. It used to be that preventing airplanes from flying over your farm was a "property right" until it wasn't, and then we got rid of that one. You can only do that if "property rights" are artificial. I mean just look around you. We live in a world where Smartflash has a "property right" to your in-app purchases, Apple has a "property right" to your iPad, JSTOR has a "property right" to publicly-funded research, etc. etc. That's because we made it that way; let's unmake it, and do it differently!
- Turing_Machine 11y ago
  "Inequality was so much less in the 1950s/1960s" To a first approximation every single person on the planet had far less in the 1950s/1960s. "Equality" sucks if it means that everyone is equally impoverished.
  - sytelus 11y ago
    Not sure about whole planet but I do realize that previous generation in USA had much higher savings rate, lower student loan, much lower mortgage to income ratio and much higher probability of retirement in 50s/60s. I have never heard people from that generation believing that they were less better off financially than we do, although we do benefit from natural evolution in technology and science.
analog31 11y ago
Do you believe in property rights? It seems like we probably benefit from an arrangement where we control the things in our immediate surroundings that we need in order to maintain reasonably stable and predictable lives. For instance it makes sense for me to control access to things like my glasses, bike, pajamas, etc. Property rights work pretty well for defining that arrangement. At the other extreme, we have situations where property rights can be overridden, such as taxation and eminent domain, and entities whose value depends on a stable money system provided by the government -- I see no a priori reason why the workable way to manage those things is not through a system of limited property rights. In broad terms, one such limitation is an agreement that taxation is not a violation of a fundamental human right. The more abstract and artificial "property" gets, the more reasonable that property rights are balanced against other things, such as redistribution. This is the core of our system. And that system will always generate inequality. Sure, and to the extent that it works, it's OK. When it doesn't work, then it seems reasonable to manage it in order to make it work better. Some broad-brush ideas are for the government to provide a functioning money system, and a way to redistribute wealth against the tide of inequality.
ubernostrum 11y ago
Do you believe in property rights? As a useful legal fiction subject to the same limitations as others of its genus, sure. As a natural moral right? Not in the slightest, because there ain't no such thing. The history of "ownership" of any given thing today is basically a history of force, fraud and the occasional lucky break. Who should own a piece of land? What moral claim do they have to it? The very best that can be said today is that they can trace a chain of transfers back to the person who most recently was able to stay on that land without being forcibly put underneath it by someone else. What kind of grounding for a supposed moral good is that? So I believe in Thomas Hobbes' conception of the state of nature -- namely, that there are no rights, no virtues, no morals, nothing but all-out war for resources, where what is "yours" is what you can take and keep by violence -- and in his conception of government as what we introduce when we get tired of that, and that this arrangement is better than the "war of all against all" even though it comes at the expense of sometimes having the government decide that "my" property could be put to a better use.
- Turing_Machine 11y ago
  Could you post your address? I'll bet you have a lot of stuff that other people could use, and since you don't believe in property, you surely won't have any objections to them taking it.
  - ubernostrum 11y ago
    Wow, you sure did destroy that straw man over there. Now, do you want to try engaging with the actual argument (property is a useful legal fiction, not an inherent moral right)?
    - Turing_Machine 11y ago
      Hobbes's thesis is ridiculous, and has been refuted at great length by many over the centuries. I see no need to go over well-trodden ground yet again, but here are a couple of points: If you accept his arguments, you're basically advocating a dictatorship (or his era's equivalent, a king ruling by "divine right"). For another, his notion that humans are motivated purely by ego and self-aggrandizement is demonstrably wrong.
zanny 11y ago
There are different kinds of property rights. We have intellectual property - the use of state force to impose the idea that information is scarce when it is naturally not - we have real estate, where an arbitrary box of space relative to planet Earth is assigned to you - and we have traditional goods, where you can have an apple and claim it is yours. The first two are complicated, because they are extremely political. To own geographic space is entirely divisive from owning just the dirt under a house, or the physical material that composes it. To own an idea, a trademark or a patent, is to assign exclusivity to thoughts. Its much easier to say "we have scarce goods, so those that create them can sell them, and the buyer owns it". Its why I think goods property is a good thing, but our attempts to strong arm real estate and IP into the same formula is a cause of constant economic tension because they aren't a good fit. Just in this context for reference, I'm an IP abolitionist and think we should adopt homesteading of property again. Both forms of state granted monopoly to space and idea are being rampantly exploited by market forces and were conceived of in an age when technology did not enable the information exchange we have today. It would have been much more complicated to verify usage of a plot of land a hundred years ago than it would now, to know who previously owned it and for how long it has been unused before you could claim it as your own.
sytelus 11y ago
If you truely believe in property rights, you will get in big trouble from philosophical point of view. For example, if you live in US then very likely you will need to surrender your property to last know Native Amarican owner :). In Saudi Arabia, the ancestors of Saud family declared entire country as their private property. The result was that when oil was found there in 1930s, about 2/3 of the income was used by Royal family as their private income to build legions of palaces with elaborate gardens while millions of poor people went without food. Even today Saud family has about 5000 Royal princes, each one with their giant share of country's fortunate based on ancestral claims. This is ofcourse not new to Saudi Arabia. Most of the Monarchs all over the world believes entire country was their private property and people living there was just happened to bestowed the permission to stay there. How does property ownership philosophy sound now when you take it extreme?
- vixen99 11y ago
  But you choose to ignore the other extreme. I mean that of 100% abolition of property rights, i.e., a recipe for anarchy. Of course you can truly believe in property rights when they are set according to an evolved legal constitution. That's how human beings work to form a better society. There is no such thing as 'trouble from a philosophical point of view' unless one thinks that the space between ALL and NOTHING is blank.
  - sytelus 11y ago
    I'm not against property right at all. I was just making logical argument to poke holes to show that something is at miss in asserting in its puritanical form. The property rights are generational because of ability to transfer those rights. This immediately establishes generational lock down if resources are limited while keeping less fortunate out. This applies to resources such as real estate and political power however not to resources that are unlimited such as creativity and innovation. A large number of people currently live in poverty because there is simply no way for them to acquire education, nourishment or healthcare because they couldn't chose their parents correctly. This doesn't necessarily imply re-distribution of wealth or socialization programs or welfare state or guaranteed basic income or even charities as the solution. In fact, they are almost certainly not the solution. I think we do not yet have correct model for economic rights and rewards established for modern human society. It is also likely that purely economic solution does not even exist given the innate human nature. In that case, the technology might be our only savior where by one day we can have virtually unlimited energy source and robotic savants to create age of abundance.

harryh 11y ago

Some things, like you say, are closer to rules that we can change. Other things, however, are a lot closer to physics: https://en.wikiversity.org/wiki/10_Principles_of_Economics https://en.wikiversity.org/wiki/10_Principles_of_Economics It's very important to understand when you're talking about the former and when you're talking about the latter.

deleted 11y ago

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codeismightier 11y ago

I don't understand the hate against Walmart. It only has a profit margin of 3.12% [1] and return on assets of 7.69%. Now I suppose you could argue that all the profits are hidden away somewhere, but that sounds like an unfalsifiable statement. It certainly would be illegal to hide assets from shareholders. [1] https://finance.yahoo.com/q/ks?s=WMT https://finance.yahoo.com/q/ks?s=WMT

MrTonyD 11y ago
You're talking to someone who has spent most of his life in the Fortune 50 - working with executives who routinely hide the bulk of their wealth from any accounting. These techniques have been widely discussed in the press (if you look). So I must assume that you have, for philosophical reasons, chosen to disbelieve that the rich hide their wealth. Edit: Not sure why I was downvoted. But I was in the room as we reassigned profits to offshore entities for accounting purposes. And I was in meetings with our senior executives who were arranging to pay themselves in undervalued offshore stocks "off the books". Those offshores provided inflated services and inflated goods to the corporation and avoided taxation while making the executives rich. The value of those offshore stocks was "reinflated" with a phone call. And that is just one company - the Big 3 accounting firms provide these services routinely for both the corporation and its executives. (And when we reassigned profits that had the effect of lowering profits - and even making income disappear. I've seen these techniques used at more than one company.)
- omalleyt 11y ago
  He's not saying the rich don't hide their wealth: he's arguing that corporations do not report artificially lower profits and then proceed to deny returns to their wealthy owners.
- xacaxulu 11y ago
  Whenever I have a chance to learn some of these legal means of avoiding excessive taxation, I do in earnest. I see very wealthy people and it only drives me to emulate their business and investment strategies more. There are more than enough legal means of structuring your businesses, transactions and investments in ways that drastically reduce taxation. I made it about 4 years without paying any state or federal income tax. True it took a lot of work and planning, but the income retained was more than worth the effort.

tmorton 11y ago

That's absolutely true. But while physical laws just exist, "economic laws" are a complicated combination of biology, psychology, social norms, the legal system, etc. You can tweak the rules, but you can't run calculations that predict the results. Some of those legal arrangements might be unjust, but their results might be net-good all the same. We can, and should, keep evolving the social bargain, but upending it completely is very dangerous.

RodericDay 11y ago

Zizek phrased it kind of nicely once, in a way that stuck with me. He probably borrowed from somewhere, and I'll continue to lossily reproduce whatever the sentiment was, but it goes something like this. How is it possible that we are completely and utterly optimistic about breaking all sorts of physical barriers, like landing on Mars, and reusing rockets, and communicating worldwide via little handheld microcomputers, and reattaching body-parts, and aiming to live forever, and do all sorts of crazy biological engineering. And yet trying to imagine a world were you don't have billionaires having lavish parties while people starve or drone in soul-sucking jobs, or where sweatshops are deemed "bad but better than the alternative", or indeed any sort of radically different social arrangement is seen as hopelessly naive or regressive. He had better examples, something about a dude with a bifurcated tongue. But the idea stuck with me- what's up with the bounds of our imagination? How come they're limitless when it comes to facing off against gravity, and completely defeatist when it comes to erasing class distinctions?

natrius 11y ago
Communism happened. It killed lots of people, and made radical changes in the social order unappealing to most. Now ideas don't just have to sound plausible, but you also have to prove that they won't lead to the deaths of millions.
- semi-extrinsic 11y ago
  Have you heard of social democracy, i.e. taking those ideas and not implementing them by being a murderous crazy dictator? It's working out just fine for the countries which are consistently ranked as the best to live in in the world. As opposed to the US, which is closer to third world status when it comes to things like low median wage, little to no maternity leave, expensive and poor healthcare system, school shootings, poor literacy rates, high drug use rates, etc etc.
  - maxerickson 11y ago
    US median wages aren't low compared to Western Europe. Modestly lower than the Nordic countries yes, but modestly higher than France and Germany and so forth.

ArkyBeagle 11y ago

If "free market" has any coherent and muscular meaning, it is as an alternative to those in political power assigning the equivalent of royal patents to pursue markets. So any rents-ey looking use of the political process is not free market no matter the wealth of those practicing it. This is what need work. Wal-Mart in specific originally hired women in rural areas at a wage appropriate as a second income. Their husbands worked at an industrial or agricultural job. Then they went through an explosion, but as the South Park says, the soul of every Wal-Mart is a mirror. The ag. or industrial job isn't there any more but by sheer momentum, that's the deal. Wal-Mart is also not exactly a sentence of eternal penury - people who stay a few years, just by self-selection can move up the food chain. I'm not current, but a department manager made enough to raise a family very frugally. A store manager made pretty decent money. The reason it's Wal-Mart and not Sears is decades of hard work at the logistics end - Wards and Sears shipped by train, even in the '60s. Wal-Mart just overran them with trucks. But in a way, what's waiting for the end of Wal-Mart seems worse - Amazon. The labor component of production of goods is still disappearing.

loki49152 11y ago

It's interesting that you faced this issue and came away with the exactly wrong conclusion. Economics is, at root, a physics problem. There's no way to get around that. Every aspect of the field comes down to asking questions about physical resources and their uses. People can attempt to ignore the fact that economics is a special application of physics, but they can't escape the consequences of ignoring reality forever. The belief that it's all just conventions and cultural agreements is exactly like believing that the Moon is just a bedtime story.

jack9 11y ago
> Every aspect of the field comes down to asking questions about physical resources and their uses. Nope. Moving 200 million in rock or 200 million in a paper check (or even a promise-based conversation). The extractable amount/usage of Labor and Resources outstrip the human ability to account for it. This has less to do with physics and more to do with "accounting". Without accounting you cannot have negative wealth, for example. This is not tied to physics. This is based on social contracts...all the way down to the currency. I am a little interested in this physics-based economy you speak of.
imbellish 11y ago
What you are referring to is more the traditional distinction between the materialists (i.e. Marx) and those that believe in market forces (i.e. Smith).

Fjolsvith 11y ago

Oh come on. I've started a manufacturing business with my smarts, a hammer, a tape measure, and a saw. In 5 years I will sell it for several million dollars. When a convicted felon can do that, the argument that we don't live in a Free Market doesn't hold any weight, imho. A person can find a need, build a business around it, and become powerful and have money.

pdkl95 11y ago

> economics isn't physics - and it isn't ruled by physics-like laws Professor Mark Blyth has a very good summary of this: https://www.youtube.com/watch?v=hmWbkPezgtU https://www.youtube.com/watch?v=hmWbkPezgtU The problem for economics as it's become very mathematical and technical is that the intrinsic beauty and rigor and appeal of the models themselves have become an attractor - something that research gravitates towards. [...] There is a great attraction in these types of models; they create a world of equilibrium, a world of stability almost by accident - they are just a consequence of the model, and it's a beautiful and seductive world.

rewqfdsa 11y ago

The laws of game theory, which underlie economics, are just as real as calculus.

stuaxo 11y ago

Yes, exactly this. We choose the rules, so we can push to have rules that don't have those people on food stamps. Unfortunately when you bring this up, most people can't countenance it.

igravious 11y ago

I know this was a week ago you wrote this but I only today came across this essay by Georg Henrik von Wright called "Humanism and the Humanities" that I think is apt. In §13 he says (and I'm going to quote the thing in full), <blockquote>I shall now advance a thesis which I am sure many will find controversial but which I think is true and, moreover, crucial for understanding the methodological status of the humanities and the relation of the humanities to the sciences of nature. The thesis goes as follows: Just as natural, i.e. non-intentional phenomena are 'governed' by natural laws, i.e. principles which tell us either what will invariably or in statistical average be the case under in principle recurrent and repeatable circumstances, in an analogous manner intentional phenomena are 'governed' by normative rules which tell us what people under given circumstances are (or were) expected or allowed or practically necessitated to do. I am, in other words, pleading for what might be called a 'methodological parallelism' between natural laws on the one hand and laws and other societal rules on the other hand. I am inviting you to see the difference between the humanities and the natural sciences in the light of the difference between the factual and the normative, between rules which state how things in fact go and rules which ordain how they should go according to the conceptions of those who instituted the rules.</blockquote> Make of that what you will :)