5 ms·

“Capitalism can’t solve externalities” Blanket statements like that are so clearly false and I’m not sure what you’re implying. What is communism’s record on e

“Capitalism can’t solve externalities” Blanket statements like that are so clearly false and I’m not sure what you’re implying. What is communism’s record on environmental protection? Well, we can go to China or Russia for some clues. HUMANS aren’t good at understanding externalities. Of course this isn’t some new realization, we’ve known about the tragedy of the commons for some time which is why we have regulation.

lizknope 4y ago
https://en.wikipedia.org/wiki/Aral_Sea https://en.wikipedia.org/wiki/Aral_Sea
orthecreedence 4y ago
> when the profit mechanism itself is the cause for most externalities. I was pretty clear. I'll break it down for you though! I have costs, and I have sales. sales - costs = margin (or, profit). If my sales are steady, what's a good method of increasing margin? Reducing costs! How is this generally accomplished? By making some other sap pay for them: externalizing my costs. The profit mechanism actively incentivizes externalities. This is plain fact, and there's nothing "clearly false" about it. Our economic system encourages externalities, and then builds enormous state apparatuses to quell the effects. You're free to ignore the facts, though. > What is communism’s record on environmental protection? How is this relevant? And why is state planning the only solution in people's minds to replacing capitalist markets? There's more than either/or here. > HUMANS aren’t good at understanding externalities. We understand them fine. We're being literally paid to create them, though. > which is why we have regulation. Yeah, that's working great so far!
photochemsyn 4y ago
I think the problem with 'externalities' is that they're little more than convenient fictions that fly in the face of basic physical concepts like conservation of mass and energy. Any economic theory that relies on excluding 'externalities' to measure economic growth is purely nonsensical. Fundamentally, economics needs to adopt realistic system-level concepts, such as 'primary production' (gross photosynthetic input to a system like a lake). Then you can actually start to calculate how productive a hectare of land can be. This also clearly explains why concepts like 'infinite growth in a closed system' are so nonsensical. As far as capitalism, it's important to note the huge differences between 'investment capitalism' (Wall Street) and 'commodity capitalism' (Main Street). The latter is much more rationale, as it's not based on fairy dust, but actual real things, like farmers growing potatoes. Similarly, there are many areas of the economy that are best managed without any market influence, but rather by state-managed tax-financed programs (basic infrastructure development for example).
fleddr 4y ago
Humans understand externalities just fine, they just don't care about them because the more convenient option is to ignore them and optimize for the short term, which seems a key feature of our species. That short term bias keeps one alive for another day in our original biological state as hunter-gatherers, which we still are. But it's a pretty crappy quality at planetary scale. Pure market thinkers say that when you pollute a river, it will create a new market to clean up the river. That makes no sense as you might as well not pollute the river in the first place, so you can't claim efficiency. More importantly, this market to clean up the river does not spontaneously come into existence, as nobody is going to place an order for a clean river. It requires political will, which is easily corrupted, just like regulation. I would agree that communism would not solve this problem either. We, as citizens, are equally guilty of this outcome. The politician that plans for the cleaning up of the river will lose from the politician that builds a new sports stadium.
- bequanna 4y ago
  “Pure market thinkers say that when you pollute a river, it will create a new market to clean up the river.” Surely there is no one this naive.

lizknope 4y ago

https://en.wikipedia.org/wiki/Aral_Sea https://en.wikipedia.org/wiki/Aral_Sea

orthecreedence 4y ago

> when the profit mechanism itself is the cause for most externalities. I was pretty clear. I'll break it down for you though! I have costs, and I have sales. sales - costs = margin (or, profit). If my sales are steady, what's a good method of increasing margin? Reducing costs! How is this generally accomplished? By making some other sap pay for them: externalizing my costs. The profit mechanism actively incentivizes externalities. This is plain fact, and there's nothing "clearly false" about it. Our economic system encourages externalities, and then builds enormous state apparatuses to quell the effects. You're free to ignore the facts, though. > What is communism’s record on environmental protection? How is this relevant? And why is state planning the only solution in people's minds to replacing capitalist markets? There's more than either/or here. > HUMANS aren’t good at understanding externalities. We understand them fine. We're being literally paid to create them, though. > which is why we have regulation. Yeah, that's working great so far!

photochemsyn 4y ago

I think the problem with 'externalities' is that they're little more than convenient fictions that fly in the face of basic physical concepts like conservation of mass and energy. Any economic theory that relies on excluding 'externalities' to measure economic growth is purely nonsensical. Fundamentally, economics needs to adopt realistic system-level concepts, such as 'primary production' (gross photosynthetic input to a system like a lake). Then you can actually start to calculate how productive a hectare of land can be. This also clearly explains why concepts like 'infinite growth in a closed system' are so nonsensical. As far as capitalism, it's important to note the huge differences between 'investment capitalism' (Wall Street) and 'commodity capitalism' (Main Street). The latter is much more rationale, as it's not based on fairy dust, but actual real things, like farmers growing potatoes. Similarly, there are many areas of the economy that are best managed without any market influence, but rather by state-managed tax-financed programs (basic infrastructure development for example).

fleddr 4y ago

Humans understand externalities just fine, they just don't care about them because the more convenient option is to ignore them and optimize for the short term, which seems a key feature of our species. That short term bias keeps one alive for another day in our original biological state as hunter-gatherers, which we still are. But it's a pretty crappy quality at planetary scale. Pure market thinkers say that when you pollute a river, it will create a new market to clean up the river. That makes no sense as you might as well not pollute the river in the first place, so you can't claim efficiency. More importantly, this market to clean up the river does not spontaneously come into existence, as nobody is going to place an order for a clean river. It requires political will, which is easily corrupted, just like regulation. I would agree that communism would not solve this problem either. We, as citizens, are equally guilty of this outcome. The politician that plans for the cleaning up of the river will lose from the politician that builds a new sports stadium.

bequanna 4y ago
“Pure market thinkers say that when you pollute a river, it will create a new market to clean up the river.” Surely there is no one this naive.