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A lot of analyses of capitalism miss out on the fact that the problems it creates vary widely by sector. Warren Buffet said that if "a farsighted capitalist had

A lot of analyses of capitalism miss out on the fact that the problems it creates vary widely by sector. Warren Buffet said that if "a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down." That's because the airline industry didn't return profits to investors; instead the vast value created by the industry accrued overwhelmingly to the public, because of competition. So a good general strategy would be for the government to make sure that, at least in the long run, the rules for each sector are tweaked to make the sector look more and more like the airline industry. It's not hard to imagine a way for this to happen in the tech industry. We can imagine a technology sector that runs completely on commodity hardware, open-source software, and open APIs instead of walled gardens like FaceBook. This would just take a bit of political will and some smart regulations - no need to radically overthrow the system that has created so much prosperity for us.

chasd00 8y ago
The computer you're typing on and your Internet connection has everything you need to create incredible value for yourself and humanity. No property, factories, government intervention required. What's sitting in front of you is so mind bogglingly more powerful than the "airline industry". btw "..for the government to make sure that.." is asking a lot. Keeping potholes filled gives the government a run for its money.
clairity 8y ago
> “That's because the airline industry didn't return profits to investors; instead the vast value created by the industry accrued overwhelmingly to the public, because of competition.“ rhur? competition is essential to capitalism; monopoly returns to investors are not. no one is even guaranteed a profit. you describe exactly how capitalism is designed to work. this kind of basic misunderstanding is part of why we’re in the mess we’re in. economics and finance should really be required in high school.
- AnimalMuppet 8y ago
  I think it's a bit much to imply that Warren Buffet missed out on learning economics and finance in high school.
  - clairity 8y ago
    might yours be an intentional misreading? buffett surely knows that capitalism's purpose is to allocate capital efficiently in an economy, not generate outsized returns to investors, which is a form of inefficiency: "[E]ventually a fundamental rule of economics prevailed: In an unregulated commodity business, a company must lower its costs to competitive levels or face extinction." -- Warren Buffett, in the 1994 Berkshire Hathaway shareholder letter but he's not an impartial observer--a definitional statement that suits his vested interest is not surprising.
    - dragonwriter 8y ago
      > buffett surely knows that capitalism's purpose is to allocate capital efficiently in an economy No, it's not. That's an retrospective rationalization invented centuries after capitalism came into existence, and even after it was named by its critics. The purpose of capitalism which motivated them pushing the changes which formed it was to secure power previously held by the feudal aristocracy in the hands of the mercantile—what would become “capitalist"—class.
      - clairity 8y ago
        the history is debated, and knowledge is generally retrospective and rationalized. besides, the historical origin of capitalism has little to do with its pragmatic purpose. capitalism wouldn't be a practiced (locally optimal?) economic system were it not relatively efficient at allocating capital in an economy. decentralization of the means of production is also a critical feature of its success, but i'm sure the 18th c. bourgeoisie didn't think about that either.
        dragonwriter 8y ago

chasd00 8y ago

The computer you're typing on and your Internet connection has everything you need to create incredible value for yourself and humanity. No property, factories, government intervention required. What's sitting in front of you is so mind bogglingly more powerful than the "airline industry". btw "..for the government to make sure that.." is asking a lot. Keeping potholes filled gives the government a run for its money.

clairity 8y ago

> “That's because the airline industry didn't return profits to investors; instead the vast value created by the industry accrued overwhelmingly to the public, because of competition.“ rhur? competition is essential to capitalism; monopoly returns to investors are not. no one is even guaranteed a profit. you describe exactly how capitalism is designed to work. this kind of basic misunderstanding is part of why we’re in the mess we’re in. economics and finance should really be required in high school.

AnimalMuppet 8y ago
I think it's a bit much to imply that Warren Buffet missed out on learning economics and finance in high school.
- clairity 8y ago
  might yours be an intentional misreading? buffett surely knows that capitalism's purpose is to allocate capital efficiently in an economy, not generate outsized returns to investors, which is a form of inefficiency: "[E]ventually a fundamental rule of economics prevailed: In an unregulated commodity business, a company must lower its costs to competitive levels or face extinction." -- Warren Buffett, in the 1994 Berkshire Hathaway shareholder letter but he's not an impartial observer--a definitional statement that suits his vested interest is not surprising.
  - dragonwriter 8y ago
    > buffett surely knows that capitalism's purpose is to allocate capital efficiently in an economy No, it's not. That's an retrospective rationalization invented centuries after capitalism came into existence, and even after it was named by its critics. The purpose of capitalism which motivated them pushing the changes which formed it was to secure power previously held by the feudal aristocracy in the hands of the mercantile—what would become “capitalist"—class.
    - clairity 8y ago
      the history is debated, and knowledge is generally retrospective and rationalized. besides, the historical origin of capitalism has little to do with its pragmatic purpose. capitalism wouldn't be a practiced (locally optimal?) economic system were it not relatively efficient at allocating capital in an economy. decentralization of the means of production is also a critical feature of its success, but i'm sure the 18th c. bourgeoisie didn't think about that either.
      - dragonwriter 8y ago