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> Corporations are supposed to maximize profits. I think the last 60 years has proven Milton Friedman was inarguably wrong. Both with the idea that trickle dow

by tw04 7y ago

> Corporations are supposed to maximize profits. I think the last 60 years has proven Milton Friedman was inarguably wrong. Both with the idea that trickle down economics is a valid fiscal policy and that it is always in a corporations best interests to prioritize maximizing profits. The fact we’ve just gotten to a place where we consider it a fact of life is concerning.

rayiner 7y ago
> I think the last 60 years has proven Milton Friedman was inarguably wrong. The last 60 years have proven exactly the opposite. Almost every Western country that flirted with socialism in the 1960s and 1970s has move back towards free markets and deregulation. Canada's government spending as a percentage of GDP has dropped from over 50% in the early 1990s to about the same as the U.S. today. Sweden's has dropped from over 65% to under 50% since 1995. The EU has become a powerful pro-markets, pro-deregulation force. The sort of practices Friedman criticized, such as the government deciding how much airlines could charge for tickets, were routinely accepted even in the United States 60 years ago, but today are unthinkable even in Denmark or Germany. At the same time, countries in the third world have liberalized their economies, including China and Vietnam. Today, 95% of Vietnamese and 76% of Chinese agree that "most people are better off in a free market economy, even though some people are richer and some people are poorer." https://www.vox.com/2015/5/3/8539365/vietnam-capitalism-pew https://www.vox.com/2015/5/3/8539365/vietnam-capitalism-pew Simultaneously, we have seen the greatest burst of prosperity in the developing world in recorded history. Since my family moved to the United States from Bangladesh in 1989, per-capita GDP (adjusted for purchasing power) has tripled. The infant mortality rate has been cut by 75%. Life expectancy has increased by 15 years. This is a story that has played out all over the developing world, thanks to free markets and the investment and economic growth they enable. You'd have to be blind to deny that Milton Friedman was generally right (if not about all things, certainly about general principles).
- bjelkeman-again 7y ago
  At the same time income inequality is rising more or less everywhere [1] which is bad in several ways. [2] Those with capital are capturing more and more of the wealth, and we need to make sure that the growth in prosperity benefits all. [1] https://inequality.org/facts/global-inequality/ https://inequality.org/facts/global-inequality/ [2] https://en.m.wikipedia.org/wiki/Effects_of_economic_inequality https://en.m.wikipedia.org/wiki/Effects_of_economic_inequali...
  - icebraining 7y ago
    The numbers in [1] come from Oxfam, which gets them from a report by Credit Suisse. Here's what that report says: Globally, the share of the top 1% has been rising since 2007 and is now close to the level in the year 2000 (45% versus 47%). But the share of the top 5% has shown little change, staying steady at 70–71%, and inequality lower down the distribution has declined. The share of the bottom 90% has risen from 11% in the year 2000 to 18% in mid-2019 according to our estimates. So, essentially the top 1% is richer at the expense of the rest of the top 5%, not of everyone else. Billionaires eating millionaires, so to speak, not the poor. https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html https://www.credit-suisse.com/about-us/en/reports-research/g...
- RyanHamilton 7y ago
  >>Simultaneously, we have seen the greatest burst of prosperity in the developing world in recorded history. Inequality rose: The top 1% share of market income rose from 9.6% in 1979 to a peak of 20.7% in 2007 The environment suffered: The average global temperature has increased by 0.8 degrees. More worrying than these particular figures is the alignment of incentives that causes the trend. I like what capitalism has achieved in the short term, I worry about the long term where companies have traditionally maximised profit by externalising costs.
  - anchpop 7y ago
    Inequality is not an inherently bad thing. I would rather live in a society where everyone makes a living wage except for some billionaires (some inequality), compared to a society where everyone makes a poverty wage (no inequality).
  - flyinglizard 7y ago
    World poverty dipped. It’s true that inequality rose inside countries but it actually decreased on a global scale. Environmental issues are a byproduct of human development, not of any specific economic system. It is not clear to me how these issues would have been any better under socialist/communist regimes. If anything, the Soviet record on environment and workers health is abysmal.
- barrkel 7y ago
  And American wages have been stagnant in real terms since the 70s, potentially leading to malignant political forces.
  - kmlx 7y ago
    the US is just a very small part of the planet. thankfully. real progress has been happening elsewhere.
  - rayiner 7y ago
    American total compensation has grown steadily since the 1970s. Wages have been stagnant because almost all that growth has been eaten up by rising healthcare costs: https://fee.org/articles/dispelling-the-myth-that-wages-have-been-stagnant-for-decades https://fee.org/articles/dispelling-the-myth-that-wages-have.... That indicates a problem with our healthcare system, not a structural problem with the economy. (Likewise, if you look at returns to capital, they have been stable since the 1950s. The decrease in returns to labor have come entirely from increasing returns to real estate. Again, that’s a problem with housing markets—specifically, over regulation of housing—not the economy itself.) Using the 1970s as a baseline also dramatically skews the numbers. 1970 was a local minimum in terms of the percentage of the population that is immigrants (under 5%). Today it’s almost 15%. Even in a healthy economy, new immigrants aren’t going to be doing as well as the native born right off the bat. A growing immigrant share of the population is going to cause median wages to seem stagnant even if they’re going up within each demographic.
    - jdkee 7y ago
      1. Your citation is from a right-wing libertarian think tank. It is apparent from the analysis that the author is selectively choosing an explanation and back fitting the data. 2. While healthcare costs have increased, rising productivity gains have been almost exclusively caused by neoliberal policies and the effects of regulatory capture. See https://www.epi.org/publication/causes-of-wage-stagnation/ https://www.epi.org/publication/causes-of-wage-stagnation/
  - erik_seaberg 7y ago
- dctoedt 7y ago
  > Simultaneously, we have seen the greatest burst of prosperity in the developing world in recorded history. Do you have any back-of-the-envelope estimate of how much of that represents late-arriving dividends from massive, top-down, non-market government spending on infrastructure (the interstate, the Internet), the Cold War, and the space race?
- dragonwriter 7y ago
  > The last 60 years have proven exactly the opposite. Almost every Western country that flirted with socialism in the 1960s and 1970s has move back towards free markets and deregulation. All of them that moved away from capitalism toward socialism, creating the modern mixed economy, in the early 20th Century (i.e., every single country in the West) is still there, and most of them have moved farther from capitalism than they had by the opening of WWII. Sure, some of them that moved farther along that path than the average in the group have taken a couple of steps back, and in none of the countries has the change been unidirectional, there's always been a certain degree of back and forth policy, but the long-term trend isn't back toward capitalism.
  - deleted 7y ago
    [deleted]
  - rayiner 7y ago
    If you define "socialism" as "social services" that's true, but that's an incorrect definition of "socialism." Literally, socialism means government ownership and control of the means of production. Using a broad brush, you might expand that to include situations where the government micro-manages private markets, such as setting prices, so as to exercise control over production. Defined as such, the United States, and most of Europe, is further back towards "capitalism" than they were in the 1960s. In 1960, government agencies dictated what routes airlines could fly, what prices they could charge, etc. The same was true of trucking, telecom, energy, etc. Almost all of that was eliminated in the 1980s and 1990s. State-owned enterprises were privatized, utilities were deregulated, etc. The EU has consistently kept moving in that direction. Even where the government intervenes, it adopts more market-oriented approaches. In the 1930s, governments promoted universal phone service through imposing mandates on sanctioned monopolies (or state owned telecom companies). Today, countries like Sweden rely on measures like giving individuals tax breaks to build fiber. In the US, we replaced “government cheese” with SNAP debit cards. Obviously taxation creates deadweight losses too, but that’s different, and better than direct government control over production. That’s why Milton Friedman advocated a negative income tax. He sought to replace traditional social programs—and the bureaucrats that administer them—with cash payments to the needy: https://www.nytimes.com/2006/11/23/business/23scene.html https://www.nytimes.com/2006/11/23/business/23scene.html Even from the perspective of public spending for the welfare state, in the U.K. for example public expenditures as a percentage of GDP are below the levels from the late 1950s: https://www.economicshelp.org/wp-content/uploads/2014/12/government-spending-percent-gdp-obr-14.jpg https://www.economicshelp.org/wp-content/uploads/2014/12/gov.... And the whole economy is much more liberal than it was back then--British Telecom is a private company, etc.
- tw04 7y ago
  >You'd have to be blind to deny that Milton Friedman was generally right (if not about all things, certainly about general principles). BS - "The free market is good" does literally nothing to disprove my point that Friedman was horribly wrong in both of the quotes I presented. Trickle down economics doesn't work, period. The end-result of that policy is a shrinking middle class and a massive glut of capital in the hands of the top .5%. It isn't trickling down, it's doing exactly the opposite. Corporations maximizing profit at the expense of everything else resulted in the mess that is Boeing (who would collapse if the US government weren't willing to bail it out). The mortgage crisis. Ford and their Firestone tire debacle. 3M and their PFC dumping. The list goes on and on. Complete. Failure.
deleted 7y ago
[deleted]

by tw04 7y ago

rayiner 7y ago

> I think the last 60 years has proven Milton Friedman was inarguably wrong. The last 60 years have proven exactly the opposite. Almost every Western country that flirted with socialism in the 1960s and 1970s has move back towards free markets and deregulation. Canada's government spending as a percentage of GDP has dropped from over 50% in the early 1990s to about the same as the U.S. today. Sweden's has dropped from over 65% to under 50% since 1995. The EU has become a powerful pro-markets, pro-deregulation force. The sort of practices Friedman criticized, such as the government deciding how much airlines could charge for tickets, were routinely accepted even in the United States 60 years ago, but today are unthinkable even in Denmark or Germany. At the same time, countries in the third world have liberalized their economies, including China and Vietnam. Today, 95% of Vietnamese and 76% of Chinese agree that "most people are better off in a free market economy, even though some people are richer and some people are poorer." https://www.vox.com/2015/5/3/8539365/vietnam-capitalism-pew https://www.vox.com/2015/5/3/8539365/vietnam-capitalism-pew Simultaneously, we have seen the greatest burst of prosperity in the developing world in recorded history. Since my family moved to the United States from Bangladesh in 1989, per-capita GDP (adjusted for purchasing power) has tripled. The infant mortality rate has been cut by 75%. Life expectancy has increased by 15 years. This is a story that has played out all over the developing world, thanks to free markets and the investment and economic growth they enable. You'd have to be blind to deny that Milton Friedman was generally right (if not about all things, certainly about general principles).

bjelkeman-again 7y ago
At the same time income inequality is rising more or less everywhere [1] which is bad in several ways. [2] Those with capital are capturing more and more of the wealth, and we need to make sure that the growth in prosperity benefits all. [1] https://inequality.org/facts/global-inequality/ https://inequality.org/facts/global-inequality/ [2] https://en.m.wikipedia.org/wiki/Effects_of_economic_inequality https://en.m.wikipedia.org/wiki/Effects_of_economic_inequali...
- icebraining 7y ago
  The numbers in [1] come from Oxfam, which gets them from a report by Credit Suisse. Here's what that report says: Globally, the share of the top 1% has been rising since 2007 and is now close to the level in the year 2000 (45% versus 47%). But the share of the top 5% has shown little change, staying steady at 70–71%, and inequality lower down the distribution has declined. The share of the bottom 90% has risen from 11% in the year 2000 to 18% in mid-2019 according to our estimates. So, essentially the top 1% is richer at the expense of the rest of the top 5%, not of everyone else. Billionaires eating millionaires, so to speak, not the poor. https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html https://www.credit-suisse.com/about-us/en/reports-research/g...
RyanHamilton 7y ago
>>Simultaneously, we have seen the greatest burst of prosperity in the developing world in recorded history. Inequality rose: The top 1% share of market income rose from 9.6% in 1979 to a peak of 20.7% in 2007 The environment suffered: The average global temperature has increased by 0.8 degrees. More worrying than these particular figures is the alignment of incentives that causes the trend. I like what capitalism has achieved in the short term, I worry about the long term where companies have traditionally maximised profit by externalising costs.
- anchpop 7y ago
  Inequality is not an inherently bad thing. I would rather live in a society where everyone makes a living wage except for some billionaires (some inequality), compared to a society where everyone makes a poverty wage (no inequality).
- flyinglizard 7y ago
  World poverty dipped. It’s true that inequality rose inside countries but it actually decreased on a global scale. Environmental issues are a byproduct of human development, not of any specific economic system. It is not clear to me how these issues would have been any better under socialist/communist regimes. If anything, the Soviet record on environment and workers health is abysmal.
barrkel 7y ago
And American wages have been stagnant in real terms since the 70s, potentially leading to malignant political forces.
- kmlx 7y ago
  the US is just a very small part of the planet. thankfully. real progress has been happening elsewhere.
- rayiner 7y ago
  American total compensation has grown steadily since the 1970s. Wages have been stagnant because almost all that growth has been eaten up by rising healthcare costs: https://fee.org/articles/dispelling-the-myth-that-wages-have-been-stagnant-for-decades https://fee.org/articles/dispelling-the-myth-that-wages-have.... That indicates a problem with our healthcare system, not a structural problem with the economy. (Likewise, if you look at returns to capital, they have been stable since the 1950s. The decrease in returns to labor have come entirely from increasing returns to real estate. Again, that’s a problem with housing markets—specifically, over regulation of housing—not the economy itself.) Using the 1970s as a baseline also dramatically skews the numbers. 1970 was a local minimum in terms of the percentage of the population that is immigrants (under 5%). Today it’s almost 15%. Even in a healthy economy, new immigrants aren’t going to be doing as well as the native born right off the bat. A growing immigrant share of the population is going to cause median wages to seem stagnant even if they’re going up within each demographic.
  - jdkee 7y ago
    1. Your citation is from a right-wing libertarian think tank. It is apparent from the analysis that the author is selectively choosing an explanation and back fitting the data. 2. While healthcare costs have increased, rising productivity gains have been almost exclusively caused by neoliberal policies and the effects of regulatory capture. See https://www.epi.org/publication/causes-of-wage-stagnation/ https://www.epi.org/publication/causes-of-wage-stagnation/
- erik_seaberg 7y ago
dctoedt 7y ago
> Simultaneously, we have seen the greatest burst of prosperity in the developing world in recorded history. Do you have any back-of-the-envelope estimate of how much of that represents late-arriving dividends from massive, top-down, non-market government spending on infrastructure (the interstate, the Internet), the Cold War, and the space race?
dragonwriter 7y ago
> The last 60 years have proven exactly the opposite. Almost every Western country that flirted with socialism in the 1960s and 1970s has move back towards free markets and deregulation. All of them that moved away from capitalism toward socialism, creating the modern mixed economy, in the early 20th Century (i.e., every single country in the West) is still there, and most of them have moved farther from capitalism than they had by the opening of WWII. Sure, some of them that moved farther along that path than the average in the group have taken a couple of steps back, and in none of the countries has the change been unidirectional, there's always been a certain degree of back and forth policy, but the long-term trend isn't back toward capitalism.
- deleted 7y ago
  [deleted]
- rayiner 7y ago
  If you define "socialism" as "social services" that's true, but that's an incorrect definition of "socialism." Literally, socialism means government ownership and control of the means of production. Using a broad brush, you might expand that to include situations where the government micro-manages private markets, such as setting prices, so as to exercise control over production. Defined as such, the United States, and most of Europe, is further back towards "capitalism" than they were in the 1960s. In 1960, government agencies dictated what routes airlines could fly, what prices they could charge, etc. The same was true of trucking, telecom, energy, etc. Almost all of that was eliminated in the 1980s and 1990s. State-owned enterprises were privatized, utilities were deregulated, etc. The EU has consistently kept moving in that direction. Even where the government intervenes, it adopts more market-oriented approaches. In the 1930s, governments promoted universal phone service through imposing mandates on sanctioned monopolies (or state owned telecom companies). Today, countries like Sweden rely on measures like giving individuals tax breaks to build fiber. In the US, we replaced “government cheese” with SNAP debit cards. Obviously taxation creates deadweight losses too, but that’s different, and better than direct government control over production. That’s why Milton Friedman advocated a negative income tax. He sought to replace traditional social programs—and the bureaucrats that administer them—with cash payments to the needy: https://www.nytimes.com/2006/11/23/business/23scene.html https://www.nytimes.com/2006/11/23/business/23scene.html Even from the perspective of public spending for the welfare state, in the U.K. for example public expenditures as a percentage of GDP are below the levels from the late 1950s: https://www.economicshelp.org/wp-content/uploads/2014/12/government-spending-percent-gdp-obr-14.jpg https://www.economicshelp.org/wp-content/uploads/2014/12/gov.... And the whole economy is much more liberal than it was back then--British Telecom is a private company, etc.
tw04 7y ago
>You'd have to be blind to deny that Milton Friedman was generally right (if not about all things, certainly about general principles). BS - "The free market is good" does literally nothing to disprove my point that Friedman was horribly wrong in both of the quotes I presented. Trickle down economics doesn't work, period. The end-result of that policy is a shrinking middle class and a massive glut of capital in the hands of the top .5%. It isn't trickling down, it's doing exactly the opposite. Corporations maximizing profit at the expense of everything else resulted in the mess that is Boeing (who would collapse if the US government weren't willing to bail it out). The mortgage crisis. Ford and their Firestone tire debacle. 3M and their PFC dumping. The list goes on and on. Complete. Failure.

deleted 7y ago

[deleted]