4 ms·

Favorite quote: "Those at the top have learned how to suck out money from the rest in ways that the rest are hardly aware of—that is their true innovation." R

Favorite quote: "Those at the top have learned how to suck out money from the rest in ways that the rest are hardly aware of—that is their true innovation." Rings true to me. That's why labor markets are purely competitive but the markets for products are dominated by price fixing. It's why you get more jail time for stealing a car than cheating your employees or customers to the tune of millions of dollars. And so on.

klenwell 9y ago
ChuckMcM offered an illustration of how this innovation has played out in higher education here a few years ago that has stuck with me: I think it is even worse than simply "easy credit", I think the rewards built in encourage exploitation. Allow me to explain. 1) You have capital seeking a return. 2) There exists a basic need that can be facilitated by the application of capital (a degree for a "good job"). 3) You remove all the risk out of providing capital for filling the need through government guarantees. 4) You provide a rate of return that is higher than the government guaranteed rate on their own capital instruments (treasury bills). #4 there, which gives you higher returns on low risk investments, creates a demand for those instruments. And that demand causes a supply of instruments to be created. And the regulation on that supply is minimal. The result is you get financial institutions giving loans to students for useless degrees at inflated cost institutions knowing that the government has made defaulting nearly impossible (hence the low risk) and they can offer better rates than t-bills. Students are being exploited exactly like unqualified home buyers were being exploited in the mortgage fiasco of 2008. What annoys me about the journalistic coverage is that the 'rage views' are "Students are graduating with few prospects from college and a mountain of debt" whereas the bigger story is that "Rich people demanding higher returns, enslave unsuspecting youth through their loan seller proxies." https://news.ycombinator.com/item?id=6225976 https://news.ycombinator.com/item?id=6225976 Then there is this observation by dsirijus a few years back which now with the ICO craze seems ever truer: Any sufficiently advanced business model is indistinguishable from a scam. https://news.ycombinator.com/item?id=8227941 https://news.ycombinator.com/item?id=8227941
deleted 9y ago
[deleted]
bobthechef 9y ago
"labor markets are purely competitive" Purely?
RodericDay 9y ago
Labor markets are extremely uncompetitive, because prices (salaries) are not public information.
- WalterBright 9y ago
  A few google searches will provide lots of statistical information on salaries in all sorts of categories.
pdkl95 9y ago
> markets We regularly hear people concerned about the hypothetical existential threat of a paperclip maximizer AI being invented in the future, yet this concern reliably ignores the AI overlords we already have: paperclip^Wprofit maximizing corporations. The VM for this type of AI has an incredibly slow clock rate and an extreme CISC ISA that often modifies itself in the RTC interrupt. The AIs are not a future threat; they already enslaved us. The problem is our unregulated capitalism. Until that is addressed[2] we are merely debating which profit-maximizer AI we want to serve. (my thanks to Charles Stross for the maximizer-AI/corporation metaphor[1]) [1] https://media.ccc.de/v/34c3-9270-dude_you_broke_the_future https://media.ccc.de/v/34c3-9270-dude_you_broke_the_future [2] I suggest heavy regulation to protect the useful parts of capitalism. Left alone, capitalism destroys the very markets it needs to survive.
- pitaj 9y ago
  > unregulated capitalism Ah yes, the unbridled laissez-faire capitalist markets throughout the world. It couldn't possibly be that our markets are more regulated than ever before, or that the very regulations and bureaucracy meant to protect us have caused these failures. No no no, it's capitalism's fault. It's certainly not that government power has for decades been exploited by the incumbents to kill competition. The market has failed. Now government regulation is necessary to protect us from the evil rich corporations who want nothing but profit. Rest assured, if we allowed them to operate freely it would result in catastrophe!
  - ComradeTaco 9y ago
    The US has allowed complete unbridled capitalism during the gilded age. Quoting Wikpedia "From 1860 to 1900, the wealthiest 2% of American households owned more than a third of the nation's wealth, while the top 10% owned roughly three fourths of it.[61] The bottom 40% had no wealth at all.[59] In terms of property, the wealthiest 1% owned 51%, while the bottom 44% claimed 1.1%" So pure, unregulated capitalism, lead to wealth inequality far, far more extreme than our current situation. 58 Peter R. Shergold (1982). Working-Class Life: The "American Standard" in Comparative Perspective, 1899–1913. University of Pittsburgh Press. pp. 5–7, 222, 224. ISBN 978-0822976981. 59 Steve Fraser (2015). The Age of Acquiescence: The Life and Death of American Resistance to Organized Wealth and Power. Little, Brown and Company. p. 66. ISBN 0316185434.

klenwell 9y ago

ChuckMcM offered an illustration of how this innovation has played out in higher education here a few years ago that has stuck with me: I think it is even worse than simply "easy credit", I think the rewards built in encourage exploitation. Allow me to explain. 1) You have capital seeking a return. 2) There exists a basic need that can be facilitated by the application of capital (a degree for a "good job"). 3) You remove all the risk out of providing capital for filling the need through government guarantees. 4) You provide a rate of return that is higher than the government guaranteed rate on their own capital instruments (treasury bills). #4 there, which gives you higher returns on low risk investments, creates a demand for those instruments. And that demand causes a supply of instruments to be created. And the regulation on that supply is minimal. The result is you get financial institutions giving loans to students for useless degrees at inflated cost institutions knowing that the government has made defaulting nearly impossible (hence the low risk) and they can offer better rates than t-bills. Students are being exploited exactly like unqualified home buyers were being exploited in the mortgage fiasco of 2008. What annoys me about the journalistic coverage is that the 'rage views' are "Students are graduating with few prospects from college and a mountain of debt" whereas the bigger story is that "Rich people demanding higher returns, enslave unsuspecting youth through their loan seller proxies." https://news.ycombinator.com/item?id=6225976 https://news.ycombinator.com/item?id=6225976 Then there is this observation by dsirijus a few years back which now with the ICO craze seems ever truer: Any sufficiently advanced business model is indistinguishable from a scam. https://news.ycombinator.com/item?id=8227941 https://news.ycombinator.com/item?id=8227941

deleted 9y ago

[deleted]

bobthechef 9y ago

"labor markets are purely competitive" Purely?

RodericDay 9y ago

Labor markets are extremely uncompetitive, because prices (salaries) are not public information.

WalterBright 9y ago
A few google searches will provide lots of statistical information on salaries in all sorts of categories.

pdkl95 9y ago

> markets We regularly hear people concerned about the hypothetical existential threat of a paperclip maximizer AI being invented in the future, yet this concern reliably ignores the AI overlords we already have: paperclip^Wprofit maximizing corporations. The VM for this type of AI has an incredibly slow clock rate and an extreme CISC ISA that often modifies itself in the RTC interrupt. The AIs are not a future threat; they already enslaved us. The problem is our unregulated capitalism. Until that is addressed[2] we are merely debating which profit-maximizer AI we want to serve. (my thanks to Charles Stross for the maximizer-AI/corporation metaphor[1]) [1] https://media.ccc.de/v/34c3-9270-dude_you_broke_the_future https://media.ccc.de/v/34c3-9270-dude_you_broke_the_future [2] I suggest heavy regulation to protect the useful parts of capitalism. Left alone, capitalism destroys the very markets it needs to survive.

pitaj 9y ago
> unregulated capitalism Ah yes, the unbridled laissez-faire capitalist markets throughout the world. It couldn't possibly be that our markets are more regulated than ever before, or that the very regulations and bureaucracy meant to protect us have caused these failures. No no no, it's capitalism's fault. It's certainly not that government power has for decades been exploited by the incumbents to kill competition. The market has failed. Now government regulation is necessary to protect us from the evil rich corporations who want nothing but profit. Rest assured, if we allowed them to operate freely it would result in catastrophe!
- ComradeTaco 9y ago
  The US has allowed complete unbridled capitalism during the gilded age. Quoting Wikpedia "From 1860 to 1900, the wealthiest 2% of American households owned more than a third of the nation's wealth, while the top 10% owned roughly three fourths of it.[61] The bottom 40% had no wealth at all.[59] In terms of property, the wealthiest 1% owned 51%, while the bottom 44% claimed 1.1%" So pure, unregulated capitalism, lead to wealth inequality far, far more extreme than our current situation. 58 Peter R. Shergold (1982). Working-Class Life: The "American Standard" in Comparative Perspective, 1899–1913. University of Pittsburgh Press. pp. 5–7, 222, 224. ISBN 978-0822976981. 59 Steve Fraser (2015). The Age of Acquiescence: The Life and Death of American Resistance to Organized Wealth and Power. Little, Brown and Company. p. 66. ISBN 0316185434.