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I get a rise out of the "Marxism" boogeyman here. Few thinkers have done more than Marx to define and describe capitalism. People should worry less about marke

I get a rise out of the "Marxism" boogeyman here. Few thinkers have done more than Marx to define and describe capitalism. People should worry less about market structure and incentives. We have serious issues to repair in the financial markets, but the more pressing concerns should be quality of life, security, and productivity. We needlessly limit our universe of acceptable institutions and practices with a priori reasoning like "Marxism is bad, so this other thing must be bad too because I can describe it similarly." For what it's worth, I think index fund concentration is a symptom of the moral hazard of bailing out losers and failing to help winners improve on critical growth areas. The downside is protected, so equities rally. As they rally together, correlation rises and people diversify using index funds rather than picking stocks. Allow some dispersion and stock picking will come back. Two of this year's major volatility events have involved multi-billion-dollar losses by hedge funds with concentrated margin positions (Melvin and Archegos). It's only a matter of time before a chain reaction occurs, whereby one hedge fund liquidation leads to margin calls for other hedge funds, who in turn liquidate and exacerbate the process. If that happens big enough (or repeatedly enough), it will beat the bubble bullishness out of us.

TeeMassive 6y ago
> Few thinkers have done more than Marx to define and describe capitalism. The emphasis on material determinism which was the poor child of history and philosophy was genius but the near fanatical fixation on dialectical materialism just tainted the rest of his work to the point of irrelevance. While most historians and economist agree that the contributions of Marx made their field more down to earth by extending their studies with the human condition and material limitations, none would say that they based their research on Marxist dogma. While the problems he raised were not invalid, the vast majority of Marx's core predictions never came to be and the solutions to the problems he exposed were based more on messianic prophecies than on meticulous reasoning. Conditions gradually improved as opposed to a "liberating" revolts. Economies didn't collapse enough often to make it impossible to recover, the proletariat never shared any kind of unifying will based on their misery and in fact revolutions were always led by well fed and well educated petits bourgeois including Engels and Marx. > People should worry less about market structure and incentives. We have serious issues to repair in the financial markets What else would you propose and that would act both as a motivation and as a limitation without resorting to micromanagement?
- vidarh 6y ago
  A whole lot of his predictions didn't come to be in part because of his predictions. E.g. Germany got the worlds first modern healthcare and pensions insurance because Bismarck, terrified of a repeat of the uprisings of 1848 as Marxist and other revolutionary groups gained support, pushed through massive healthcare and pension reforms that became a blueprint for large parts of Europe. As such we really can't tell what the world would have looked like had his ideas not gained traction. But other than that, we don't really know whether or not he'll be right or wrong, because the core proposition of his predictions were that capitalism would start seeing crises once it had exhausted the ability to expand into new markets. And there he certainly did massively underestimate the extreme growth the world would see in population and how long it would take capitalists to fully expand into underdeveloped markets. In that respect Marx biggest demonstrable failure was that he was too optimistic about the rate of expansion of capitalism. Whether or not he'll be right about capitalism "eating itself" by being so efficient that it will drive the price of labour towards zero and so destroy the very markets it depends on, is not something we can really tell until we see how capitalism behaves once most countries have taken the "easy gains" of a developing economy. Once growth in China, India and Africa flatlines, we'll be able to get a real idea. A key question will be whether at that stage capitalism continues to drive down cost, and if it does whether or not sufficient redistribution happens to counter it and at a minimum maintaining purchasing power.
  - TeeMassive 6y ago
    > A whole lot of his predictions didn't come to be in part because of his predictions. That doesn't make any logical sense. At best it means self-contradictions: "The model fails because of itself". > E.g. Germany got the worlds first modern healthcare and pensions insurance because Bismarck, terrified of a repeat of the uprisings of 1848 as Marxist and other revolutionary groups gained support, pushed through massive healthcare and pension reforms that became a blueprint for large parts of Europe. And Marxists actively frowned upon those gradual increment in workers welfare because it directly contradicted a core tenet of Marxism that only a "real" revolution of the proletariat could increase workers' condition, which wasn't the case. Social democrats are not Marxist, were always frowned upon as "Marx-falsifiers" and even without Marxism, revolts, revolutions and civil wars happened well before Marx. > But other than that, we don't really know whether or not he'll be right or wrong, because the core proposition of his predictions were that capitalism would start seeing crises once it had exhausted the ability to expand into new markets. Sure, there never was a total lack of new markets but there was also many capitalist economies that did not have direct access to those markets and yet they never collapsed as Marx predicted. If anything, it means that it doesn't have that much of an impact on a capitalist economy's survival. And it's not like economists are not aware of scarcity of resources, labor and market, and in fact those factors come into play although not in a "total lack of new markets" but in a more gradual way. > Whether or not he'll be right about capitalism "eating itself" by being so efficient that it will drive the price of labor towards zero and so destroy the very markets it depends on, is not something we can really tell until we see how capitalism behaves once most countries have taken the "easy gains" of a developing economy. Once growth in China, India and Africa flatlines, we'll be able to get a real idea. Developing countries such as African countries and China and India are already seeing their remuneration increasing at tremendous rates, this can be seen by all metrics ranging from alphabetization rate going up to fertility rate going down. Yet the pre-Covid economy was soaring amid those factors. This goes directly against Marx predictions, those were not dampening the wellness of the global economy, and it's not like new populated continents were discovered. And a big factor for this, as it was for Malthusianism's failed predictions, was technology and automation, whose potential was never truly considered.
vidarh 6y ago
Mentioning Marxism here is expecially comical because a central argument of Marx was that the fierce competition spurred by capitalism caused immense growth, and that this is what would eventually make socialism possible. As such he cheered capitalism on for much of the first chapter of the Communist Manifesto. E.g.: > The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground — what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour? To Marx, socialism is the consequence of capitalism driving competitive pressure to a point where capitalism tears itself apart. As such, easing competitive pressure would be a bad sign from his point of view.
- alfiedotwtf 6y ago
  He flip flopped about a lot of things through this life e.g religion. One thing I never understood from The Communist Manifesto, was how did Marx not realise that what he was describing about the commune and communal living was exactly the same conditions described under surfdom but having the State taking place of a Lord.
  - vidarh 6y ago
    I don't remember him describing 'the commune' in the Communist Manifesto at all, so I'm not sure what you're talking about. Overall Marx wrote very little about what he expected a communist society would look like, and almost none of it is in the Communist Manifesto, which is much more focused on immediate political goals and relations to long extinct other political movements. How you have gotten the notion that Marx supported the continuing existence of a state, or a strong state of any form, I'm also unsure of, as he firmly argued the state becomes superfluous in a classless society, and otherwise regularly argued against a centralized state even in the shorter term. E.g. in his works on the Paris Commune he criticized the communards for not going further in destroying the state, and expressed support for the proposed loose federation of communes in its stead. And in Critique of the Gotha Programme, he skewered the forerunner of Germany's SPD for proposing state run public education, and pointed to the model then employed (1872) in the US as a preferable model to giving the state control over education. (He also argued for an armed working class for it to protect itself against oppression - in many ways he was more closely aligned with US politics than with the various 'socialist' states)

TeeMassive 6y ago

> Few thinkers have done more than Marx to define and describe capitalism. The emphasis on material determinism which was the poor child of history and philosophy was genius but the near fanatical fixation on dialectical materialism just tainted the rest of his work to the point of irrelevance. While most historians and economist agree that the contributions of Marx made their field more down to earth by extending their studies with the human condition and material limitations, none would say that they based their research on Marxist dogma. While the problems he raised were not invalid, the vast majority of Marx's core predictions never came to be and the solutions to the problems he exposed were based more on messianic prophecies than on meticulous reasoning. Conditions gradually improved as opposed to a "liberating" revolts. Economies didn't collapse enough often to make it impossible to recover, the proletariat never shared any kind of unifying will based on their misery and in fact revolutions were always led by well fed and well educated petits bourgeois including Engels and Marx. > People should worry less about market structure and incentives. We have serious issues to repair in the financial markets What else would you propose and that would act both as a motivation and as a limitation without resorting to micromanagement?

vidarh 6y ago
A whole lot of his predictions didn't come to be in part because of his predictions. E.g. Germany got the worlds first modern healthcare and pensions insurance because Bismarck, terrified of a repeat of the uprisings of 1848 as Marxist and other revolutionary groups gained support, pushed through massive healthcare and pension reforms that became a blueprint for large parts of Europe. As such we really can't tell what the world would have looked like had his ideas not gained traction. But other than that, we don't really know whether or not he'll be right or wrong, because the core proposition of his predictions were that capitalism would start seeing crises once it had exhausted the ability to expand into new markets. And there he certainly did massively underestimate the extreme growth the world would see in population and how long it would take capitalists to fully expand into underdeveloped markets. In that respect Marx biggest demonstrable failure was that he was too optimistic about the rate of expansion of capitalism. Whether or not he'll be right about capitalism "eating itself" by being so efficient that it will drive the price of labour towards zero and so destroy the very markets it depends on, is not something we can really tell until we see how capitalism behaves once most countries have taken the "easy gains" of a developing economy. Once growth in China, India and Africa flatlines, we'll be able to get a real idea. A key question will be whether at that stage capitalism continues to drive down cost, and if it does whether or not sufficient redistribution happens to counter it and at a minimum maintaining purchasing power.
- TeeMassive 6y ago
  > A whole lot of his predictions didn't come to be in part because of his predictions. That doesn't make any logical sense. At best it means self-contradictions: "The model fails because of itself". > E.g. Germany got the worlds first modern healthcare and pensions insurance because Bismarck, terrified of a repeat of the uprisings of 1848 as Marxist and other revolutionary groups gained support, pushed through massive healthcare and pension reforms that became a blueprint for large parts of Europe. And Marxists actively frowned upon those gradual increment in workers welfare because it directly contradicted a core tenet of Marxism that only a "real" revolution of the proletariat could increase workers' condition, which wasn't the case. Social democrats are not Marxist, were always frowned upon as "Marx-falsifiers" and even without Marxism, revolts, revolutions and civil wars happened well before Marx. > But other than that, we don't really know whether or not he'll be right or wrong, because the core proposition of his predictions were that capitalism would start seeing crises once it had exhausted the ability to expand into new markets. Sure, there never was a total lack of new markets but there was also many capitalist economies that did not have direct access to those markets and yet they never collapsed as Marx predicted. If anything, it means that it doesn't have that much of an impact on a capitalist economy's survival. And it's not like economists are not aware of scarcity of resources, labor and market, and in fact those factors come into play although not in a "total lack of new markets" but in a more gradual way. > Whether or not he'll be right about capitalism "eating itself" by being so efficient that it will drive the price of labor towards zero and so destroy the very markets it depends on, is not something we can really tell until we see how capitalism behaves once most countries have taken the "easy gains" of a developing economy. Once growth in China, India and Africa flatlines, we'll be able to get a real idea. Developing countries such as African countries and China and India are already seeing their remuneration increasing at tremendous rates, this can be seen by all metrics ranging from alphabetization rate going up to fertility rate going down. Yet the pre-Covid economy was soaring amid those factors. This goes directly against Marx predictions, those were not dampening the wellness of the global economy, and it's not like new populated continents were discovered. And a big factor for this, as it was for Malthusianism's failed predictions, was technology and automation, whose potential was never truly considered.

vidarh 6y ago

Mentioning Marxism here is expecially comical because a central argument of Marx was that the fierce competition spurred by capitalism caused immense growth, and that this is what would eventually make socialism possible. As such he cheered capitalism on for much of the first chapter of the Communist Manifesto. E.g.: > The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground — what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour? To Marx, socialism is the consequence of capitalism driving competitive pressure to a point where capitalism tears itself apart. As such, easing competitive pressure would be a bad sign from his point of view.

alfiedotwtf 6y ago
He flip flopped about a lot of things through this life e.g religion. One thing I never understood from The Communist Manifesto, was how did Marx not realise that what he was describing about the commune and communal living was exactly the same conditions described under surfdom but having the State taking place of a Lord.
- vidarh 6y ago
  I don't remember him describing 'the commune' in the Communist Manifesto at all, so I'm not sure what you're talking about. Overall Marx wrote very little about what he expected a communist society would look like, and almost none of it is in the Communist Manifesto, which is much more focused on immediate political goals and relations to long extinct other political movements. How you have gotten the notion that Marx supported the continuing existence of a state, or a strong state of any form, I'm also unsure of, as he firmly argued the state becomes superfluous in a classless society, and otherwise regularly argued against a centralized state even in the shorter term. E.g. in his works on the Paris Commune he criticized the communards for not going further in destroying the state, and expressed support for the proposed loose federation of communes in its stead. And in Critique of the Gotha Programme, he skewered the forerunner of Germany's SPD for proposing state run public education, and pointed to the model then employed (1872) in the US as a preferable model to giving the state control over education. (He also argued for an armed working class for it to protect itself against oppression - in many ways he was more closely aligned with US politics than with the various 'socialist' states)