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How is this any different to "trickle down" on a large scale? If you encourage capitalistic self-interest enough, it will create benefit? Why not just create th

by ue_ 9y ago

How is this any different to "trickle down" on a large scale? If you encourage capitalistic self-interest enough, it will create benefit? Why not just create the benefit directly instead of going the roundabout way of having people act in their own self-interest, fostering mean-spirited relationships between people, competition instead of cooperation and general wastage of resources? But perhaps there are other laws within capitalism. The law of value, for instance, which its recognition by capitalists and relative ignorance of it by wage labourers leads to Marx's theory of surplus value - this is the side effect of this self-interested activity of labour.

muninn_ 9y ago
Trickle down referred to giving tax breaks to rich people so that they would buy expensive things (like Ferraris) and that this spending would spur economic movement because people have to sell, make, and repair Ferraris. The money they receive they would then use to buy groceries or a new TV. This is far different than the notion of the invisible hand, if only we counted government influence (deciding winners and losers). > If you encourage capitalistic self-interest enough, it will create benefit? Yes. Look around. I don't discount the role government has played when it does do good things, but the wonders of the world today are largely driven by the desire to do some work in order to gain some measurable economic benefit. Period. You can't just create "this benefit directly". How would you do that? I also think your general perspective on business is being warped by your obvious bias. Competition in industry does not necessarily lead toward mean-spirited relationships, or destructive competition. It can, but look at the tech industry, if anything, the opposite has happened. Also, the wastage of resources is almost laughable. I say this not to be condescending, but because if there is one entity on the planet that is inefficient, it's government. Businesses go out of business if they don't use resources in the most efficient possible way. A government just prints more money, or if worse comes to worse, passes laws or regulations that distort the economy. There are countries that do better when it comes to private-public cooperation, namely Scandinavian countries, but even those companies are capitalist countries and recognize that government does not have the capacity to guide economic development as a whole compared to the free exchange of goods and services. It's helpful once in awhile to jumpstart an industry, like solar/wind power in the United States, but government should largely stay out of business (aside from obvious regulation and protection).
- TeMPOraL 9y ago
  Waste of resources is a good point. Both governments and private industries waste a lot, but the kinds of waste are different. For starters, in such discussion I'd ignore money, because as good as it is for being a proxy for everything, it's still ultimately an arbitrary, abstract quantity. Printing money, in a way, is fine. We should talk about waste in terms of real resources - like energy and human time. > Businesses go out of business if they don't use resources in the most efficient possible way. Except often there are more businesses than strictly needed, and the surplus production is a waste. But more importantly, in a saturated market every bit of fuel, paper, metal, every kilowatt-hour and every man-hour spent on advertising is a waste of resources. Simple as that. The companies play zero-sum games on such markets, where every action is meant to cancels out effects of actions of other companies. Governments don't advertise, because they don't play the competition game (at least not internally). Point being, there's lot of waste, public and private alike. Some is probably unavoidable thanks to thermodynamics alone, but it would be worth our time to consider how to build systems that waste less energy and human time just to operate.
  - JoeAltmaier 9y ago
    Tangentially, I cannot help but add this: mining imaginary points using electricity is one of the most egregious wastes of resources the human mind has ever conceived of. Burning our planet because we cannot trust one another to issue currency equitably is wrong in the worst way.
    - TeMPOraL 9y ago
      Yes, that's my feeling too. But in lesser way, this applies to a lot of our social and commercial systems - we're spending energy to enforce large-scale coordination between people. That spending could be entirely avoided if we could trust one another more. I doubt that in the nearby future we'll be able to make humans more cooperative by default, but I think it's worth stopping to consider just on what exactly we're spending energy, and maybe if there are ways to avoid that. In particular, I shake my head when I see people excited about new "trustless" systems that replace inter-personal trust with cryptography. It's not a victory, it's a defeat. Maybe necessary, but still a loss.
dsacco 9y ago
I was answering a specific question about the term, "invisible hand." You've raised valid points, but I wasn't trying to profess an ethical stance for relying on it one way or the other.
TeMPOraL 9y ago
> If you encourage capitalistic self-interest enough, it will create benefit? Why not just create the benefit directly instead of going the roundabout way of having people act in their own self-interest, fostering mean-spirited relationships between people, competition instead of cooperation and general wastage of resources? The idea is that this "roundabout" way is in fact more natural to individuals. People want to actively take care of themselves and their families first - you may say that "capitalistic self-interest" is actually rooted in our biology. Some forms of market economy seem to be the default, "lowest-energy-state" form of human self-organization. It has an added benefit of being heavily self-regulating through feedback loops implicit everywhere in trade. Now, it would be wrong to pretend it all worked out perfectly and everyone is happy. It didn't and people aren't happy. Yet capitalism has the neat quality of aligning with a lot of basic human needs[0], and that's why while seemingly "roundabout", it's still[1] much easier than top-down management of social goodness. -- [0] - Perceived autonomy would be another one of such needs. [1] - I do wonder if in an interconnected reality of "information age" we couldn't pull off central management driven by algorithms. Someone on HN pointed out to me though that this would still lose an important feedback channel, namely preferences of customers as expressed by purchasing decisions.
- codydh 9y ago
  > you may say that "capitalistic self-interest" is actually rooted in our biology. I hold such deep issue with this. Sure, there's an aspect to all living beings that they "self-preserve." But you seem to be implying here that it's part of human nature to be primarily self-interested, and if that's a correct assumption, it's one I believe to be deeply incorrect. We can look around and see people acting in self-interested ways all of the time, but we can also see people doing lots of benevolent, good, supportive things for other people. In addition, it's no surprise many people go around day-to-day acting this way, given that they live in a system which encourages (née requires) them to do so. Just because people can conform and act within a system, does not mean it is part of their nature. A system that actively encouraged and promoted the common good and communal caring among individuals would likely produce more of that behavior as well. Just because we see one type of behavior or another is not enough to decide that it's human nature.
cmdrfred 9y ago
>Why not just create the benefit directly instead of going the roundabout way of having people act in their own self-interest, fostering mean-spirited relationships between people, competition instead of cooperation and general wastage of resources? Because people always act within their own self interest for the most part. One may take more than their fair share of the benefits of society while others will attempt to get out of paying theirs. Don't forget the officials whom will attempt to push those monies one direction or another in order to enrich themselves. Capitalism is the only system that takes this into account as far as I can tell, everything else is either predicated on people willingly giving to help society on the large scale (counter to human nature) or forcing others to do so at the end of a gun (that tends to lead to dictatorships and suppression of freedom as it requires near total government)
- eli_gottlieb 9y ago
  >Because people always act within their own self interest for the most part. That's not really true. People are, roughly speaking, reinforcement learners. This means that, yes, they respond to rewards by seeking further such rewards, but there are multiple kinds of reward. Financial profit is only one of those, and it actually has a declining marginal happiness once personal income goes over a certain level. Other major rewards for real humans include being useful to other people, acting with personal autonomy, and exercising mastery (or learning towards mastery) in a domain of skill. When we talk about economic value, what we really care about is the intersection: good work is useful to others (meets the customer's needs), and it lets the worker autonomously exercise mastery over a skillset (or otherwise, save their energy for domains in which they can do so), and it's profitable or self-sufficient with respect to resources. That's the psychologically real self-interest of the person doing the work, combined with the psychologically real self-interest of the person who needs the work done. When you start disregarding working conditions and customer needs in the process of maximizing profit, your profit-maximization system has become useless for human purposes.

by ue_ 9y ago

muninn_ 9y ago

Trickle down referred to giving tax breaks to rich people so that they would buy expensive things (like Ferraris) and that this spending would spur economic movement because people have to sell, make, and repair Ferraris. The money they receive they would then use to buy groceries or a new TV. This is far different than the notion of the invisible hand, if only we counted government influence (deciding winners and losers). > If you encourage capitalistic self-interest enough, it will create benefit? Yes. Look around. I don't discount the role government has played when it does do good things, but the wonders of the world today are largely driven by the desire to do some work in order to gain some measurable economic benefit. Period. You can't just create "this benefit directly". How would you do that? I also think your general perspective on business is being warped by your obvious bias. Competition in industry does not necessarily lead toward mean-spirited relationships, or destructive competition. It can, but look at the tech industry, if anything, the opposite has happened. Also, the wastage of resources is almost laughable. I say this not to be condescending, but because if there is one entity on the planet that is inefficient, it's government. Businesses go out of business if they don't use resources in the most efficient possible way. A government just prints more money, or if worse comes to worse, passes laws or regulations that distort the economy. There are countries that do better when it comes to private-public cooperation, namely Scandinavian countries, but even those companies are capitalist countries and recognize that government does not have the capacity to guide economic development as a whole compared to the free exchange of goods and services. It's helpful once in awhile to jumpstart an industry, like solar/wind power in the United States, but government should largely stay out of business (aside from obvious regulation and protection).

TeMPOraL 9y ago
Waste of resources is a good point. Both governments and private industries waste a lot, but the kinds of waste are different. For starters, in such discussion I'd ignore money, because as good as it is for being a proxy for everything, it's still ultimately an arbitrary, abstract quantity. Printing money, in a way, is fine. We should talk about waste in terms of real resources - like energy and human time. > Businesses go out of business if they don't use resources in the most efficient possible way. Except often there are more businesses than strictly needed, and the surplus production is a waste. But more importantly, in a saturated market every bit of fuel, paper, metal, every kilowatt-hour and every man-hour spent on advertising is a waste of resources. Simple as that. The companies play zero-sum games on such markets, where every action is meant to cancels out effects of actions of other companies. Governments don't advertise, because they don't play the competition game (at least not internally). Point being, there's lot of waste, public and private alike. Some is probably unavoidable thanks to thermodynamics alone, but it would be worth our time to consider how to build systems that waste less energy and human time just to operate.
- JoeAltmaier 9y ago
  Tangentially, I cannot help but add this: mining imaginary points using electricity is one of the most egregious wastes of resources the human mind has ever conceived of. Burning our planet because we cannot trust one another to issue currency equitably is wrong in the worst way.
  - TeMPOraL 9y ago
    Yes, that's my feeling too. But in lesser way, this applies to a lot of our social and commercial systems - we're spending energy to enforce large-scale coordination between people. That spending could be entirely avoided if we could trust one another more. I doubt that in the nearby future we'll be able to make humans more cooperative by default, but I think it's worth stopping to consider just on what exactly we're spending energy, and maybe if there are ways to avoid that. In particular, I shake my head when I see people excited about new "trustless" systems that replace inter-personal trust with cryptography. It's not a victory, it's a defeat. Maybe necessary, but still a loss.

dsacco 9y ago

I was answering a specific question about the term, "invisible hand." You've raised valid points, but I wasn't trying to profess an ethical stance for relying on it one way or the other.

TeMPOraL 9y ago

> If you encourage capitalistic self-interest enough, it will create benefit? Why not just create the benefit directly instead of going the roundabout way of having people act in their own self-interest, fostering mean-spirited relationships between people, competition instead of cooperation and general wastage of resources? The idea is that this "roundabout" way is in fact more natural to individuals. People want to actively take care of themselves and their families first - you may say that "capitalistic self-interest" is actually rooted in our biology. Some forms of market economy seem to be the default, "lowest-energy-state" form of human self-organization. It has an added benefit of being heavily self-regulating through feedback loops implicit everywhere in trade. Now, it would be wrong to pretend it all worked out perfectly and everyone is happy. It didn't and people aren't happy. Yet capitalism has the neat quality of aligning with a lot of basic human needs[0], and that's why while seemingly "roundabout", it's still[1] much easier than top-down management of social goodness. -- [0] - Perceived autonomy would be another one of such needs. [1] - I do wonder if in an interconnected reality of "information age" we couldn't pull off central management driven by algorithms. Someone on HN pointed out to me though that this would still lose an important feedback channel, namely preferences of customers as expressed by purchasing decisions.

codydh 9y ago
> you may say that "capitalistic self-interest" is actually rooted in our biology. I hold such deep issue with this. Sure, there's an aspect to all living beings that they "self-preserve." But you seem to be implying here that it's part of human nature to be primarily self-interested, and if that's a correct assumption, it's one I believe to be deeply incorrect. We can look around and see people acting in self-interested ways all of the time, but we can also see people doing lots of benevolent, good, supportive things for other people. In addition, it's no surprise many people go around day-to-day acting this way, given that they live in a system which encourages (née requires) them to do so. Just because people can conform and act within a system, does not mean it is part of their nature. A system that actively encouraged and promoted the common good and communal caring among individuals would likely produce more of that behavior as well. Just because we see one type of behavior or another is not enough to decide that it's human nature.

cmdrfred 9y ago

>Why not just create the benefit directly instead of going the roundabout way of having people act in their own self-interest, fostering mean-spirited relationships between people, competition instead of cooperation and general wastage of resources? Because people always act within their own self interest for the most part. One may take more than their fair share of the benefits of society while others will attempt to get out of paying theirs. Don't forget the officials whom will attempt to push those monies one direction or another in order to enrich themselves. Capitalism is the only system that takes this into account as far as I can tell, everything else is either predicated on people willingly giving to help society on the large scale (counter to human nature) or forcing others to do so at the end of a gun (that tends to lead to dictatorships and suppression of freedom as it requires near total government)

eli_gottlieb 9y ago
>Because people always act within their own self interest for the most part. That's not really true. People are, roughly speaking, reinforcement learners. This means that, yes, they respond to rewards by seeking further such rewards, but there are multiple kinds of reward. Financial profit is only one of those, and it actually has a declining marginal happiness once personal income goes over a certain level. Other major rewards for real humans include being useful to other people, acting with personal autonomy, and exercising mastery (or learning towards mastery) in a domain of skill. When we talk about economic value, what we really care about is the intersection: good work is useful to others (meets the customer's needs), and it lets the worker autonomously exercise mastery over a skillset (or otherwise, save their energy for domains in which they can do so), and it's profitable or self-sufficient with respect to resources. That's the psychologically real self-interest of the person doing the work, combined with the psychologically real self-interest of the person who needs the work done. When you start disregarding working conditions and customer needs in the process of maximizing profit, your profit-maximization system has become useless for human purposes.