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I think that the intended meaning of the comment was that given an unfair initial distribution of scarce resources, capitalism has the most fair outcome (I woul

I think that the intended meaning of the comment was that given an unfair initial distribution of scarce resources, capitalism has the most fair outcome (I would disagree to some extent). You may argue that capitalism has increased the ‘unfairness’ of the distribution of resources, but capitalism can’t be solely blamed for the various geographical, religious and other reasons for the ‘unfair’/unequal distribution of resources.

wz1000 10y ago
> given an unfair initial distribution of scarce resources, capitalism has the most fair outcome Doesn't that go against the fundamental principle of capital accumulation? Those with the most capital are the ones who earn the most profit.
- dlss 10y ago
  You earn profit in a capitalist system by providing more utility to your consumers than you cost them. So no. "[Capitalism] is a vast conspiracy to make you happy." - John Updike
  - nicky0 10y ago
    I thought capitalism was where rich people owned things (land, buildings) and charged poor people to use them.
    - dlss 10y ago
      Right. The funny part is that for rich people to maximize their profit from poor people, they have to make their (land, buildings, websites, products, services) as awesome as possible. Think Disneyland, Google search, Apple hardware and software, etc. Hence Capitalism being a conspiracy to make poor people as happy as possible, short of switching places.
      - wz1000 10y ago
        The part you miss is that products, land, buildings and services mostly aren't targeted towards people in general. They are targeted towards the section of the population who will result in the most profit for the capitalism. Out of the examples you give, Disneyland and Apple hardware has its target demographic as the top quartile of the population. The people who spend all their money on basic necessities such as rent, food, water, heat can't ever access these "awesome" services. Homeless and people are criminalized by society and ejected from businesses and neighborhoods. The conspiracy is to extract excess capital from people, not make them happy. If someone has no or little excess capital, the capitalist doesn't want anything to do with him. Moreover, speculation leads to capitalists hoarding productive and useful resources such as grain, land, water for their own benefit, and often to the detriment of society. A particularly chilling example of this would be the 1974 Bangladesh famine, when food production in Bangladesh was at a local peak, yet speculative hoarding of grain drove 1-1.5 million people to starvation. This region is not a stranger to famine, exacerbated by speculative hoarding. In 1943, due to a combination of Churchill's policies and hoarding, an estimated 4 million people starved to death.
        dlss 10y ago
        1. Economics, unlike the other social sciences, is built off of mathematical assumptions about behavior. Computers are built similarly off of the math that is Von Neumann's modification to Turing machines, so I'll use them as a metaphor: if Windows 95 crashes, it's probably not a problem with the Von Neumann or Turing's work. This is to say that if you believe the 1974 famine in Bangladesh (which I also discuss below) is indeed a counter example to the optimality of markets for allocating scarce resources without violating natural law, I encourage you to examine the foundational assumptions and theorems in Economics to locate where the error is. That would be big news to a lot of people! 2. In response to: "Disneyland and Apple hardware has its target demographic as the top quartile of the population. The people who spend all their money on basic necessities such as rent, food, water, heat can't ever access these "awesome" services." The result of capitalism is not that everyone gets the same outcome. The result is that everyone has a better outcome than they would have with a system other than capitalism. This is why I above mention that if we could modify the laws of physics, we could do better than capitalism. Put another way: you and I do not have private jets. But we also wouldn't in any other system, at least on average. That's not a fault with axioms of capitalism, that'a a fault with the laws of physics (if only metal and rocket fuel were plentiful enough!... :p) 3. In response to your examples I generally encourage you to google the benefits of allowing others to speculate ("speculation economic benefits" in google looks good to a first glance). The gist of it is that speculators add liquidity to a market by moving risk to themselves (who demonstrably are happier to hold the risk than the other market participants). My understanding is that most speculation ends in financial loss. Re: "A particularly chilling example of this would be the 1974 Bangladesh famine, when food production in Bangladesh was at a local peak, yet speculative hoarding of grain drove 1-1.5 million people to starvation." I'm not so familiar with this example, however looking at Wikipedia (https://en.wikipedia.org/wiki/Bangladesh_famine_of_1974 https://en.wikipedia.org/wiki/Bangladesh_famine_of_1974) there seems to have been a major flood following a war in Bangladesh at this time. These seem to be pretty large confounding factors, but let's assume they are not and play a little game: --> Imagine you're in Bangladesh in 1974, and you are in possession of food enough to feed 100 people for 1 month. How do you decide what to do with this food? Remember that you do not know in advance when the food shortage will recover, and that if you don't save enough, you'll have to buy it at even higher prices or starve. Also, if you give all the food away, another famine may come along in the future, and you will have no capital left over to save those people. (For a reasonable ethical framework you can use to build an answer, consider reading the material provided for free at https://80000hours.org https://80000hours.org) Re: "In 1943, due to a combination of Churchill's policies and hoarding, an estimated 4 million people starved to death." I've often wondered by people use famines which happen in freer markets as examples, while ignoring the tremendous numbers of famines and shortages that happen through government intervention. Thank you for listing one. 4. For an example of what happens when scarcity occurs and speculators / hoarders aren't allowed to operate, consider the current situation in Venezuela https://en.wikipedia.org/wiki/Shortages_in_Venezuela https://en.wikipedia.org/wiki/Shortages_in_Venezuela . You can also find the a tremendous number of (Godwin's law skirting) examples from Russia and China (countries which acted similarly to Venezuela). You can find good economic analyses of all of these btw, if you are curious about how they were caused on a mathematical/game-theoretic level, and how to minimize the chance of such shortages happening in the future.

wz1000 10y ago

> given an unfair initial distribution of scarce resources, capitalism has the most fair outcome Doesn't that go against the fundamental principle of capital accumulation? Those with the most capital are the ones who earn the most profit.

dlss 10y ago
You earn profit in a capitalist system by providing more utility to your consumers than you cost them. So no. "[Capitalism] is a vast conspiracy to make you happy." - John Updike
- nicky0 10y ago
  I thought capitalism was where rich people owned things (land, buildings) and charged poor people to use them.
  - dlss 10y ago
    Right. The funny part is that for rich people to maximize their profit from poor people, they have to make their (land, buildings, websites, products, services) as awesome as possible. Think Disneyland, Google search, Apple hardware and software, etc. Hence Capitalism being a conspiracy to make poor people as happy as possible, short of switching places.
    - wz1000 10y ago
      The part you miss is that products, land, buildings and services mostly aren't targeted towards people in general. They are targeted towards the section of the population who will result in the most profit for the capitalism. Out of the examples you give, Disneyland and Apple hardware has its target demographic as the top quartile of the population. The people who spend all their money on basic necessities such as rent, food, water, heat can't ever access these "awesome" services. Homeless and people are criminalized by society and ejected from businesses and neighborhoods. The conspiracy is to extract excess capital from people, not make them happy. If someone has no or little excess capital, the capitalist doesn't want anything to do with him. Moreover, speculation leads to capitalists hoarding productive and useful resources such as grain, land, water for their own benefit, and often to the detriment of society. A particularly chilling example of this would be the 1974 Bangladesh famine, when food production in Bangladesh was at a local peak, yet speculative hoarding of grain drove 1-1.5 million people to starvation. This region is not a stranger to famine, exacerbated by speculative hoarding. In 1943, due to a combination of Churchill's policies and hoarding, an estimated 4 million people starved to death.
      - dlss 10y ago
        1. Economics, unlike the other social sciences, is built off of mathematical assumptions about behavior. Computers are built similarly off of the math that is Von Neumann's modification to Turing machines, so I'll use them as a metaphor: if Windows 95 crashes, it's probably not a problem with the Von Neumann or Turing's work. This is to say that if you believe the 1974 famine in Bangladesh (which I also discuss below) is indeed a counter example to the optimality of markets for allocating scarce resources without violating natural law, I encourage you to examine the foundational assumptions and theorems in Economics to locate where the error is. That would be big news to a lot of people! 2. In response to: "Disneyland and Apple hardware has its target demographic as the top quartile of the population. The people who spend all their money on basic necessities such as rent, food, water, heat can't ever access these "awesome" services." The result of capitalism is not that everyone gets the same outcome. The result is that everyone has a better outcome than they would have with a system other than capitalism. This is why I above mention that if we could modify the laws of physics, we could do better than capitalism. Put another way: you and I do not have private jets. But we also wouldn't in any other system, at least on average. That's not a fault with axioms of capitalism, that'a a fault with the laws of physics (if only metal and rocket fuel were plentiful enough!... :p) 3. In response to your examples I generally encourage you to google the benefits of allowing others to speculate ("speculation economic benefits" in google looks good to a first glance). The gist of it is that speculators add liquidity to a market by moving risk to themselves (who demonstrably are happier to hold the risk than the other market participants). My understanding is that most speculation ends in financial loss. Re: "A particularly chilling example of this would be the 1974 Bangladesh famine, when food production in Bangladesh was at a local peak, yet speculative hoarding of grain drove 1-1.5 million people to starvation." I'm not so familiar with this example, however looking at Wikipedia (https://en.wikipedia.org/wiki/Bangladesh_famine_of_1974 https://en.wikipedia.org/wiki/Bangladesh_famine_of_1974) there seems to have been a major flood following a war in Bangladesh at this time. These seem to be pretty large confounding factors, but let's assume they are not and play a little game: --> Imagine you're in Bangladesh in 1974, and you are in possession of food enough to feed 100 people for 1 month. How do you decide what to do with this food? Remember that you do not know in advance when the food shortage will recover, and that if you don't save enough, you'll have to buy it at even higher prices or starve. Also, if you give all the food away, another famine may come along in the future, and you will have no capital left over to save those people. (For a reasonable ethical framework you can use to build an answer, consider reading the material provided for free at https://80000hours.org https://80000hours.org) Re: "In 1943, due to a combination of Churchill's policies and hoarding, an estimated 4 million people starved to death." I've often wondered by people use famines which happen in freer markets as examples, while ignoring the tremendous numbers of famines and shortages that happen through government intervention. Thank you for listing one. 4. For an example of what happens when scarcity occurs and speculators / hoarders aren't allowed to operate, consider the current situation in Venezuela https://en.wikipedia.org/wiki/Shortages_in_Venezuela https://en.wikipedia.org/wiki/Shortages_in_Venezuela . You can also find the a tremendous number of (Godwin's law skirting) examples from Russia and China (countries which acted similarly to Venezuela). You can find good economic analyses of all of these btw, if you are curious about how they were caused on a mathematical/game-theoretic level, and how to minimize the chance of such shortages happening in the future.