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I don't want to defend capitalism, but I'd say that capitalism needing the exploitation of the weak is not even entirely true. There is strong evidence that ov

by carlob 6y ago

I don't want to defend capitalism, but I'd say that capitalism needing the exploitation of the weak is not even entirely true. There is strong evidence that overall economic growth peaked at times (or places) where income taxes were higher and the distribution of wealth and income was more equitable. Of course there is the whole matter of causation/correlation, but this at least shows that a capitalist society can and does prosper when the highest tax bracket is over 80%, while trickle-down economics mostly failed to induce general growth.

collyw 6y ago
What's the evidence you are referring to? I was listening to Thomas Sowell recently and he made some comments that sounded quite the opposite of what you say - that lowering taxes resulted in increased revenue. It's clearly different times and places that you / he are referring to, I am interested in learning a bit more.
- carlob 6y ago
  For example look at Plots 11.12 to 11.15 here[0], which show an inverse correlation between growth and inequality and a direct correlation between tax rates and inequality. There are some pretty simple arguments that would justify this: one individual with 20 times the average income is going to spend less than 20 individuals with the average income. Note that I'm not arguing for some Soviet-level of extreme equality, I'm just saying that the US in the 60s or Sweden from WW2 onward are much healthier economies than Europe during the Belle Epoque or the US nowadays. [0] http://piketty.pse.ens.fr/files/Piketty2019GraphiquesTableauxLiens.pdf http://piketty.pse.ens.fr/files/Piketty2019GraphiquesTableau...
jokethrowaway 6y ago
This is not factually correct. What happened during those years was that rich people managed to get custom laws to pay little taxes (probably corruption). The number of ad-hoc tax exemptions was ridiculous. Not too dissimilar to how nowadays middle class people pay taxes for both poor people and the super rich (who escape taxes via legal offshore companies). High taxation is also not capitalism given they imply threat of violence (eg. incarceration); a purely capitalist society wouldn't have taxes, it would just be a stateless free market based society with only voluntary transactions.
atq2119 6y ago
I agree with your general assessment, but I'd disagree with your conclusion about capitalism. The defining characteristic of capitalism is the private ownership of the means of production. As long as that ownership isn't equally distributed, that's exploitative by definition, because profits go to owners "for free" -- the owners don't have to work for those profits. This isn't really the case if ownership is equally distributed, but then how exactly would that be distinct from socialism, i.e. the collective ownership of the means of production? So it's plausible to suspect that those peak times of growth you talk about were successful precisely because capitalism was reined in by other policies, like those higher tax brackets leading to a more equitable (and "less capitalist") distribution of wealth and income.
- carlob 6y ago
  Exactly, my conclusion would be that totally unfettered capitalism tends to collapse either because of catastrophic economic crises, or war or revolution. As such even capitalism itself doesn't benefit from the extreme exploitation of the weak.
- scarygliders 6y ago
  I disagree with your reasoning. It appears to assume that the company or factory concerned has always existed. There must have been some point at which said company did not exist at first, then came into being. The person or people who started that company were likely to have begun it by; - performing any and all research required into starting the company - acquiring the premises (or starting from home/garage) - doing the work themselves - at the same time, managing the company; running the finances, sales, gaining new customers/contacts etc. If the company thrived, they then considered additional workforce. Perhaps they replaced themselves with these new employees to take on a more managerial position. So now you have a person or people who are concentrating on the managerial/sales/contacting/financing side. And now the company has additional employees. The company has provided employment to more than just the person or people who initially started that company. I do not agree that is "exploitative". Nor do I agree that the profits are going to the company owners "for free" - the owners are still performing work in the company. It's only the nature of that work (i.e. the tasks which need to be performed in order to keep that company going) that are different.
082349872349872 6y ago
When the pandemic came to italy, I thought about what would be needed to survive[1] a two month[2] lockdown[3]. I had thought that in relatively rich[4] countries, providing air (minutes) for everyone would be trivial, providing water (days) easy, and providing food (weeks) something that would require something less than 5% of the population labouring under slightly altered habits[5]. However, by mid summer it has become painfully obvious that not only did some rich countries shut off water to their citizens, there has even been an infamous case of someone being deprived of air. Now I am much less optimistic about climate change than I was last year. [1] considering only physiological needs [2] based on the chinese curves. It seems to have also been accurate for us. [3] In practice, we didn't even "lock down", relying more on shared responsibility, and managed to get new cases to single digits per day. Unfortunately we're now in a (smaller, at least for the time being) second wave. [4] For concreteness, consider those whose net worth exceeds GDP by at least a factor of 4. [5] This was before I learned that food processing elsewhere is done in much more crowded conditions than here. Q. Why is trickle down economics like UDP? A. One might attempt to joke about either, but very few are likely to get it.

by carlob 6y ago

collyw 6y ago

What's the evidence you are referring to? I was listening to Thomas Sowell recently and he made some comments that sounded quite the opposite of what you say - that lowering taxes resulted in increased revenue. It's clearly different times and places that you / he are referring to, I am interested in learning a bit more.

carlob 6y ago
For example look at Plots 11.12 to 11.15 here[0], which show an inverse correlation between growth and inequality and a direct correlation between tax rates and inequality. There are some pretty simple arguments that would justify this: one individual with 20 times the average income is going to spend less than 20 individuals with the average income. Note that I'm not arguing for some Soviet-level of extreme equality, I'm just saying that the US in the 60s or Sweden from WW2 onward are much healthier economies than Europe during the Belle Epoque or the US nowadays. [0] http://piketty.pse.ens.fr/files/Piketty2019GraphiquesTableauxLiens.pdf http://piketty.pse.ens.fr/files/Piketty2019GraphiquesTableau...

jokethrowaway 6y ago

This is not factually correct. What happened during those years was that rich people managed to get custom laws to pay little taxes (probably corruption). The number of ad-hoc tax exemptions was ridiculous. Not too dissimilar to how nowadays middle class people pay taxes for both poor people and the super rich (who escape taxes via legal offshore companies). High taxation is also not capitalism given they imply threat of violence (eg. incarceration); a purely capitalist society wouldn't have taxes, it would just be a stateless free market based society with only voluntary transactions.

atq2119 6y ago

I agree with your general assessment, but I'd disagree with your conclusion about capitalism. The defining characteristic of capitalism is the private ownership of the means of production. As long as that ownership isn't equally distributed, that's exploitative by definition, because profits go to owners "for free" -- the owners don't have to work for those profits. This isn't really the case if ownership is equally distributed, but then how exactly would that be distinct from socialism, i.e. the collective ownership of the means of production? So it's plausible to suspect that those peak times of growth you talk about were successful precisely because capitalism was reined in by other policies, like those higher tax brackets leading to a more equitable (and "less capitalist") distribution of wealth and income.

carlob 6y ago
Exactly, my conclusion would be that totally unfettered capitalism tends to collapse either because of catastrophic economic crises, or war or revolution. As such even capitalism itself doesn't benefit from the extreme exploitation of the weak.
scarygliders 6y ago
I disagree with your reasoning. It appears to assume that the company or factory concerned has always existed. There must have been some point at which said company did not exist at first, then came into being. The person or people who started that company were likely to have begun it by; - performing any and all research required into starting the company - acquiring the premises (or starting from home/garage) - doing the work themselves - at the same time, managing the company; running the finances, sales, gaining new customers/contacts etc. If the company thrived, they then considered additional workforce. Perhaps they replaced themselves with these new employees to take on a more managerial position. So now you have a person or people who are concentrating on the managerial/sales/contacting/financing side. And now the company has additional employees. The company has provided employment to more than just the person or people who initially started that company. I do not agree that is "exploitative". Nor do I agree that the profits are going to the company owners "for free" - the owners are still performing work in the company. It's only the nature of that work (i.e. the tasks which need to be performed in order to keep that company going) that are different.

082349872349872 6y ago

When the pandemic came to italy, I thought about what would be needed to survive[1] a two month[2] lockdown[3]. I had thought that in relatively rich[4] countries, providing air (minutes) for everyone would be trivial, providing water (days) easy, and providing food (weeks) something that would require something less than 5% of the population labouring under slightly altered habits[5]. However, by mid summer it has become painfully obvious that not only did some rich countries shut off water to their citizens, there has even been an infamous case of someone being deprived of air. Now I am much less optimistic about climate change than I was last year. [1] considering only physiological needs [2] based on the chinese curves. It seems to have also been accurate for us. [3] In practice, we didn't even "lock down", relying more on shared responsibility, and managed to get new cases to single digits per day. Unfortunately we're now in a (smaller, at least for the time being) second wave. [4] For concreteness, consider those whose net worth exceeds GDP by at least a factor of 4. [5] This was before I learned that food processing elsewhere is done in much more crowded conditions than here. Q. Why is trickle down economics like UDP? A. One might attempt to joke about either, but very few are likely to get it.