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There is a system where it works more like the way you are suggesting -- it's called communism. The key reason why capitalism isn't "Feudalism 2.0" is because

by zaroth 7y ago

There is a system where it works more like the way you are suggesting -- it's called communism. The key reason why capitalism isn't "Feudalism 2.0" is because companies compete in a marketplace against each other, and there is freedom of mobility between employees across those companies. So maybe you could say that anti-trust law is a key component to ensure that your analogy is false.

js8 7y ago
I think you misunderstood my argument. I am not defending a particular system (and almost certainly not communism). I am pointing out that same arguments used to defend the privileges of capitalists were used to defend feudal privileges. The feudal lords also competed with each other. The freedom of mobility is not relevant if your only choice is just another feudal lord.
- zaroth 7y ago
  > But the arguments used to justify the power of capital owners over the operations (and profit distribution) in the company are in principle the same as those used to defend feudal lordship. It's a neat metaphor in a storybook sort of way, which is why it seems like you are making a political point and not a economic argument. > The freedom of mobility is not relevant if your only choice is just another feudal lord. There are ~30 million small businesses in the US, anyone can start one, and many people do. Anyone cannot decide to become a feudal lord; it is a position taken through force and violence and maintained at the tip of a spear. > In the political domain, humans eventually wisened up and decided ... I think this will eventually happen to founders in capitalism too. I think capitalism was the "wisened up" part after the prior attempts which don't allow an entrepreneur to take a new idea, bring it into the world, and own the result for themselves. Well, aside from the ~50% which goes to taxes.
  - js8 7y ago
    "which is why it seems like you are making a political point and not a economic argument" I am making an argument that the principal justification for power of these individuals is the same. It's neither strictly political nor strictly economic argument. "There are ~30 million small businesses in the US, anyone can start one, and many people do. Anyone cannot decide to become a feudal lord; it is a position taken through force and violence and maintained at the tip of a spear." Actually, you can decide to become a lord, it happens in mafias and gangs around the world till today. The lords in feudalism (unless it was inherited) rose from chieftains of tribes gaining more and more influence (often by using of violence) over more and more people. Just like starting a business, becoming a chieftain and lord is very risky. In fact riskier, because the stakes are higher, but also the rewards. Also, while there are small businesses in capitalism, yes, the core of it in practice are large businesses. And just like the lords, the owners of the large businesses are those who can either outsmart the other small owners, or just win the game of taking the risk. The issue I am talking about - winner (founder) takes all - is much more questionable in larger companies. The fact that there is no direct violence in economic competition between companies doesn't invalidate the comparison I am making. "I think capitalism was the "wisened up" part after the prior attempts which don't allow an entrepreneur to take a new idea, bring it into the world, and own the result for themselves." I interpret the history the other way around. The capitalism only happened after people wisened up and figured that the republic is better than monarchy, in the political sphere. This restricted the use of violence in competition for power, and allowed the companies (and their owners) to rise in the economic competition. But the question why should somebody keep unlimited and indefinite control over something (be it company or state) just by virtue of organizing people around creation of that something still stands.
    - zaroth 7y ago
      > I am making an argument that the principal justification for power of these individuals is the same. You're drawing an analogy in the roughest possible terms. "A person can choose to become X", where X is a company or a lord, does not logically imply anything about the two things other than they are both choices. (Everything at some level is arguably a choice, so in fact this says nothing). Similarly, "Doing thing X is risky" where X is starting a company or starting a gang, is not a logical argument for anything other than two random things are both "risky" (but perhaps in markedly different ways). > Also, while there are small businesses in capitalism, yes, the core of it in practice are large businesses. Roughly half of all employment, and the majority of employment gains, comes from small business. Roughly half of GDP comes from small business. > And just like the lords, the owners of the large businesses are those who can either outsmart the other small owners, or just win the game of taking the risk. In any competitive environment (be it sports, or selling widgets, or war) there are winners and losers depending on the preparation, skill, and execution of the players. "Football is war" is a metaphor, not a rigorous argument for why the Geneva Convention should apply to football. > The fact that there is no direct violence in economic competition between companies doesn't invalidate the comparison I am making. The fact that two things are meaningfully different in almost every sense does though. The only comparisons you've made are only in the most general metaphorical sense. > The question why should somebody keep unlimited and indefinite control over something (be it company or state) just by virtue of organizing people around creation of that something still stands. Besides the obvious point that no one has unlimited or indefinite control over anything, the tenants of private property are a well argued philosophical stomping ground. Why anyone should be able to own anything that they pay for... If they ever truly own it, if it is being taxed annually, or merely rented it from the State... If they should be able to keep it, or how much of it their family should be able to keep after they die... Whether a person can fully transfer title in something they create even if they are paid for it... The fundamental reason that we let people own the things that they create or that they pay for is because that becomes the incentive for people to work hard to create great things, and because it's a way to give meaning to life. The fundamental reason that we don't take everything away from people the moment they die, but merely take just a large share of it, when it's over a certain amount, is roughly similar. Other countries have tried to do it different ways, and IMO they have all turned out orders of magnitude worse for the wear.

by zaroth 7y ago

js8 7y ago

I think you misunderstood my argument. I am not defending a particular system (and almost certainly not communism). I am pointing out that same arguments used to defend the privileges of capitalists were used to defend feudal privileges. The feudal lords also competed with each other. The freedom of mobility is not relevant if your only choice is just another feudal lord.

zaroth 7y ago
> But the arguments used to justify the power of capital owners over the operations (and profit distribution) in the company are in principle the same as those used to defend feudal lordship. It's a neat metaphor in a storybook sort of way, which is why it seems like you are making a political point and not a economic argument. > The freedom of mobility is not relevant if your only choice is just another feudal lord. There are ~30 million small businesses in the US, anyone can start one, and many people do. Anyone cannot decide to become a feudal lord; it is a position taken through force and violence and maintained at the tip of a spear. > In the political domain, humans eventually wisened up and decided ... I think this will eventually happen to founders in capitalism too. I think capitalism was the "wisened up" part after the prior attempts which don't allow an entrepreneur to take a new idea, bring it into the world, and own the result for themselves. Well, aside from the ~50% which goes to taxes.
- js8 7y ago
  "which is why it seems like you are making a political point and not a economic argument" I am making an argument that the principal justification for power of these individuals is the same. It's neither strictly political nor strictly economic argument. "There are ~30 million small businesses in the US, anyone can start one, and many people do. Anyone cannot decide to become a feudal lord; it is a position taken through force and violence and maintained at the tip of a spear." Actually, you can decide to become a lord, it happens in mafias and gangs around the world till today. The lords in feudalism (unless it was inherited) rose from chieftains of tribes gaining more and more influence (often by using of violence) over more and more people. Just like starting a business, becoming a chieftain and lord is very risky. In fact riskier, because the stakes are higher, but also the rewards. Also, while there are small businesses in capitalism, yes, the core of it in practice are large businesses. And just like the lords, the owners of the large businesses are those who can either outsmart the other small owners, or just win the game of taking the risk. The issue I am talking about - winner (founder) takes all - is much more questionable in larger companies. The fact that there is no direct violence in economic competition between companies doesn't invalidate the comparison I am making. "I think capitalism was the "wisened up" part after the prior attempts which don't allow an entrepreneur to take a new idea, bring it into the world, and own the result for themselves." I interpret the history the other way around. The capitalism only happened after people wisened up and figured that the republic is better than monarchy, in the political sphere. This restricted the use of violence in competition for power, and allowed the companies (and their owners) to rise in the economic competition. But the question why should somebody keep unlimited and indefinite control over something (be it company or state) just by virtue of organizing people around creation of that something still stands.
  - zaroth 7y ago
    > I am making an argument that the principal justification for power of these individuals is the same. You're drawing an analogy in the roughest possible terms. "A person can choose to become X", where X is a company or a lord, does not logically imply anything about the two things other than they are both choices. (Everything at some level is arguably a choice, so in fact this says nothing). Similarly, "Doing thing X is risky" where X is starting a company or starting a gang, is not a logical argument for anything other than two random things are both "risky" (but perhaps in markedly different ways). > Also, while there are small businesses in capitalism, yes, the core of it in practice are large businesses. Roughly half of all employment, and the majority of employment gains, comes from small business. Roughly half of GDP comes from small business. > And just like the lords, the owners of the large businesses are those who can either outsmart the other small owners, or just win the game of taking the risk. In any competitive environment (be it sports, or selling widgets, or war) there are winners and losers depending on the preparation, skill, and execution of the players. "Football is war" is a metaphor, not a rigorous argument for why the Geneva Convention should apply to football. > The fact that there is no direct violence in economic competition between companies doesn't invalidate the comparison I am making. The fact that two things are meaningfully different in almost every sense does though. The only comparisons you've made are only in the most general metaphorical sense. > The question why should somebody keep unlimited and indefinite control over something (be it company or state) just by virtue of organizing people around creation of that something still stands. Besides the obvious point that no one has unlimited or indefinite control over anything, the tenants of private property are a well argued philosophical stomping ground. Why anyone should be able to own anything that they pay for... If they ever truly own it, if it is being taxed annually, or merely rented it from the State... If they should be able to keep it, or how much of it their family should be able to keep after they die... Whether a person can fully transfer title in something they create even if they are paid for it... The fundamental reason that we let people own the things that they create or that they pay for is because that becomes the incentive for people to work hard to create great things, and because it's a way to give meaning to life. The fundamental reason that we don't take everything away from people the moment they die, but merely take just a large share of it, when it's over a certain amount, is roughly similar. Other countries have tried to do it different ways, and IMO they have all turned out orders of magnitude worse for the wear.