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"Capitalism" is not merely a short-hand for "trade"; it's also a theory of capital. And its shortcomings are numerous: not only the ones you describe (externali

"Capitalism" is not merely a short-hand for "trade"; it's also a theory of capital. And its shortcomings are numerous: not only the ones you describe (externalities, exploitation of addictive behavior), but also game-theoretic races to the bottom, rent-seeking behavior, conflating capital with land [0], zero-sum positional goods, quasi-sociopathic corporations, the list goes on. Your core point is a good one: trade tends to be mutually beneficial, and good policies of ownership design [1] incentivize net-positive wealth creation. But there's a lot of good and bad ideas (and ideology) wrapped up in "capitalism" as such; it's worth teasing them all apart independently rather than the simple "Capitalism: Y/N" stances that pervade the discourse. I'm frankly ready to banish the words "capitalism" and "socialism" from our vocabulary entirely; they're simply not helpful. [0] https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty https://astralcodexten.substack.com/p/your-book-review-progr... [1] https://www.penguinrandomhouse.com/books/601899/mine-by-michael-heller-and-james-salzman/ https://www.penguinrandomhouse.com/books/601899/mine-by-mich...

fighterpilot 5y ago
You're right about the capitalism/trade distinction and it was a mistake to group them together. My post was pertaining more to trade than capitalism proper. "its shortcomings are numerous:" Can we elaborate more on these points? I don't view many of them as that fatal or bad particularly. Take positional goods. If there's no negative externalities, how is that bad? If person A wants to give lots of money to person B for a diamond, that has zero negative impact on me. Person A is presumably happier and person B is presumably happier (otherwise they wouldn't have traded). Nobody is losing in a nontrivial way here. You could maybe argue that a society with status strata is undesirable, but it's a bit of a stretch to lay the blame for that on capitalism, diamonds (or family pedigree or whatever) would be a status marker irrespective. Take quasi-sociopathic companies. Yes, they're amoral and generally will do anything for profit, but this is mostly a point about externalities. A chemicals company will treat their customers extremely well but will dump in the river because those impacted aren't their customers. There's examples of businesses treating their customers atrociously (e.g lead spiking of turmeric, not doing safety recalls, etc), but these are exceptions and aren't the rule, brand equity all the way through the supply chain incentivizes the opposite in general. Every business I patronage treats me like royalty and it's no coincidence. Regarding races to the bottom, do you mean things like the zero sum competion for speed among HFT firms? Isn't this waste just an inevitable byproduct of competition? As an industry, they've largely successfully automated away expensive human market makers, despite this zero sum waste that comes from that competition. It's not efficient to have 5 supermarket chains with 5 legal department and 5 HR departments, but we accept that we need that waste for competiton to function. Regarding rent seeking, that's fairly broad and it'd be better to discuss specifics.

fighterpilot 5y ago

You're right about the capitalism/trade distinction and it was a mistake to group them together. My post was pertaining more to trade than capitalism proper. "its shortcomings are numerous:" Can we elaborate more on these points? I don't view many of them as that fatal or bad particularly. Take positional goods. If there's no negative externalities, how is that bad? If person A wants to give lots of money to person B for a diamond, that has zero negative impact on me. Person A is presumably happier and person B is presumably happier (otherwise they wouldn't have traded). Nobody is losing in a nontrivial way here. You could maybe argue that a society with status strata is undesirable, but it's a bit of a stretch to lay the blame for that on capitalism, diamonds (or family pedigree or whatever) would be a status marker irrespective. Take quasi-sociopathic companies. Yes, they're amoral and generally will do anything for profit, but this is mostly a point about externalities. A chemicals company will treat their customers extremely well but will dump in the river because those impacted aren't their customers. There's examples of businesses treating their customers atrociously (e.g lead spiking of turmeric, not doing safety recalls, etc), but these are exceptions and aren't the rule, brand equity all the way through the supply chain incentivizes the opposite in general. Every business I patronage treats me like royalty and it's no coincidence. Regarding races to the bottom, do you mean things like the zero sum competion for speed among HFT firms? Isn't this waste just an inevitable byproduct of competition? As an industry, they've largely successfully automated away expensive human market makers, despite this zero sum waste that comes from that competition. It's not efficient to have 5 supermarket chains with 5 legal department and 5 HR departments, but we accept that we need that waste for competiton to function. Regarding rent seeking, that's fairly broad and it'd be better to discuss specifics.