4 ms·

It's late stage capitalism. It's how all 'free markets' end up eventually. The biggest players gobbling up all of the competition and essentially having a mon

It's late stage capitalism. It's how all 'free markets' end up eventually. The biggest players gobbling up all of the competition and essentially having a monopoly. All you have to do is drive through middle america to see the Ruby Tuesday/Strip Mall-ification effect on most of the United States. I love capitalism when it's functioning it's the greatest system ever invented. When it's just a market full of monopolies it's akin to dysfunctional communism from a consumer choice perspective. I don't know what the solution is.

MichaelCollins 4y ago
> It's late stage capitalism. It's going to get so much worse. Years from now you'll look back at the 2020s and think "I though THAT was the late stage? Boy I had no idea."
- pas 4y ago
  why will it get worse? what's the model that predicts this?
  - MichaelCollins 4y ago
    There seems to be no limit to the insanity people will tolerate with sufficient conditioning, so there is no reason to think there is a natural limit to how bad any economic or political system, capitalism or otherwise, can degrade. If you can't imagine how things could get even worse, then watch some science fiction or read some history books. Tearing people's hearts out to appease the sun god, or to repossess the organ after unpaid medical bills. We're not there yet, but that could be the sort of madness we're heading into.
    - pas 4y ago
      I agree, people can adapt to basically anything, but we have pretty clear precedents about who does what when faced with this or that. In the face of constant legally sanctioned/mandated exploitation the frequency of outlaw group appearances increases, similarly revolts start from time to time. (Not saying their success rate was any great.) Repossessing organs doesn't sound scary. The fanatics do scare me more, after all North Korea and every other successful oppressive regime was built on that. But it remains to be seen if it's possible to scale up totalitarianism to bigger scales.
  - BirAdam 4y ago
    It will get worse because the US federal government will not be able to pay debt service indefinitely. This will either mean a lowering of interest rates and acceleration of both inflation and debt accumulation (merely delaying the collapse of the dollar system) or US federal default which will collapse the dollar system. When dollars quit flowing to the states in return for federal program enforcement there will be little incentive for state governments to continue adhering to federal rules. Warriors likewise don't usually fight for free, so there's unlikely to be a large military presence to hold it all together. From many perspectives, you could consider this to be not the end of capitalism in the USA, but the end of empire altogether. Of course, the politicians, bankers, and managerial elite of the USA have kept this going far longer than I thought possible, so it may not happen that way at all.
    - pas 4y ago
      The spectrum between yaay everything is amazing and the dollar system collapses is ... pretty big. "U.S. interest costs won’t rise catastrophically in the short term, and there’s not really a reason to expect interest rates to stay high for decades. Furthermore, inflation will itself erode some of the national debt, reducing long-term interest costs relative to GDP." "Right now, interest payments haven’t even begun to rise as a percent of tax revenue, and one big reason is inflation. Interest rates are set in dollar amounts, and inflation increases the number of dollars in the economy, meaning that tax revenues increase in dollar terms as well." + debt rollover "the weighted average duration is only about 4 years." (so about half of the debt has to be renewed in about 4 years) "The Fed currently predicts that it will start cutting rates in 2023. And markets expect this to happen too." https://noahpinion.substack.com/p/us-government-debt-is-not-a-ticking https://noahpinion.substack.com/p/us-government-debt-is-not-... [sorry paywall] "a growing surplus of savings worldwide." https://www.fullstackeconomics.com/i/70962695/aging-populations-save-more https://www.fullstackeconomics.com/i/70962695/aging-populati... > end of empire that's unlikely though https://www.youtube.com/watch?v=pKVQDUQR8I4 https://www.youtube.com/watch?v=pKVQDUQR8I4
dbingham 4y ago
I am of the opinion that the solution is Free Market Socialism: a market economy where the businesses are governed by their workers. Capital is allowed a reasonable, regulated return on its investment (which takes the form of loans, not equity) and further financing can happen through crowd funding (since this system would naturally result in a much more even distribution of capital, an order of magnitude more people will have spare money to contribute to projects that interest them). Workers have a much weaker incentive to consolidate than investors do, since the consolidation results in them losing voice and power and there are no big cash payments in return (no equity financing means no big equity sales). So this system would tend to work against monopolization. In addition, workers have much deeper connections to the communities impacted by their business's operations than investors do - they usually live in them. So the tendency to externalize costs on to communities will be much lower (not gone, just reduced), since the workers will experience those costs along with the rest of their communities. Unions become completely unnecessary in this system. The people doing the work are governing the business, they get to set their own working conditions. And you still get all of the benefits of the free market - no government control, competition, the freedom to start new enterprises - with many of the rough edges sanded off.
- mind-blight 4y ago
  > Unions become completely unnecessary in this system. I don't think that's true. Unions exist to negotiate working conditions with management. Management doesn't disappear in the system that you're describing. Some of the incentives for poor working conditions disappear, but not all of them. There are non-profits that have unionized due to worker abuses. Ironically, I've worked in VC-backed startups most of my career, and I've experienced much less abuse than friends who work at non-profits
  - dbingham 4y ago
    Non-profits aren't usually governed by their workers. They're usually governed by an elected or appointed board. What I'm describing is a system in which all businesses become what are currently known as "worker cooperatives". In that system, if management produces conditions that the workers don't like, the workers vote management out. I'm not aware of any worker cooperatives that have unionized, though I believe Mondragon (one of the biggest, oldest, and most successful worker cooperatives) does have what amounts to a multicameral system with one of the councils filling the roll of the union in advocating for line workers. [1] [1] https://en.wikipedia.org/wiki/Mondragon_Corporation https://en.wikipedia.org/wiki/Mondragon_Corporation
BirAdam 4y ago
So, I wouldn't consider this late stage capitalism. I would consider it late stage republic. The government eventually attacks large commercial interests, as a result those large commercial interests purchase politicians. Any large commercial interest who refuses to bribe politicians will get attacked, so all of the large players do so. They then get entrenched, get bigger, get more powerful. Eventually, the line between government and corporation disappears. I do not believe that there is a way around this situation in any majoritarian government. In the USA, by the time McKinley was running for office, there'd already been two campaign finance reforms. It would seem that purchasing power is what always does and always will happen in majoritarianism. If you do not have regulatory capture, a monopoly should be impossible because any large amount of money being made is a signal that more resources are needed in a given market segment. If, otoh, you have a large interest purchasing politicians they can now erect barriers to entry preventing effective competition. Once those barriers are in place, people begin to accept them as necessary, right, proper, and true. Only once things begin to fall apart do people even begin to recognize how absurd it is that a license is required for a child's lemonade stand. Unfortunately, Utopia is impossible. All systems suck because all people are flawed. Socialism, capitalism, communism, fascism, monarchism; they're all bad. Additionally, they all really boil down to being either monarchy or oligarchy and every other term is just window dressing. You either vest power into a single person or a small elite group, and then people try to use magical words on pieces of paper to control those individuals. It works for a short time, and then it all starts to fall apart. Eventually, the ruling class realizes that the words on paper are just words and not magic, mos maiorum is lost and society starts to unravel. Modern governments have been better in the sense that it has taken a few hundred years for them all to become dangerous to their constituencies, but it is happening none the less.
mindslight 4y ago
I'm not convinced of this as a universal rule, rather than the results of specific details of our economy. A core assumption of capitalism is that capital is distributed. But our economy is highly centralized by design. Specifically the government creates a bottomless supply of money to loan out, but only to highly-legible highly-centralized entities. As such, big business has an endless source of cheap capital to draw from to invest, whether it's devouring other businesses or building out thousands of cookie cutter stores. Small businesses can only access the money trough by going through a consumer bank with its higher fees and scrutiny of business plans. Individuals can only access the money trough by taking out collateralized loans on legible assets. For the individual market we can readily observe the resulting destructive individual-disempowering dynamic for the markets that have been financialized - chiefly housing and education. A significant raising of interest rates would reign in this effect. Unfortunately it would take a long and protracted timeline for actual reform, as our economy has come to rely on the bottomless source of easy capital. But it's still worth keeping in mind the warped foundation our specific economy is built on, rather than characterizing the current moribund state as an inevitable end result of every market economy.
imtringued 4y ago
Capitalism and free market are inherently incompatible. >I love capitalism when it's functioning it's the greatest system ever invented. Capitalism is never functioning. It is inherently dysfunctional. The moment there is wealth and people should be happy, it breaks completely. It only "works" if the economy is growing or in other words, it only works if the economy has been recently destroyed by a war that justifies growth. What you might love is the market that capitalists eventually distort. >When it's just a market full of monopolies it's akin to dysfunctional communism from a consumer choice perspective. Capitalism is a monopoly based economic system. Getting rid of the monopolies gets rid of capitalism entirely and you are left with just a market based economy. I don't know what you are even talking about. >I don't know what the solution is. The solution is basically an liquidity theory (you could also consider it a trade theory of money) based approach that splits interest or as the Marxists call it "surplus value", into its individual parts and once you do so, you will realize that there is actually no room to compensate the owners of capital, only the owners of liquidity and liquidity is a public good, a service provided by the government and the public combined which then deserves to be taxed to bring costs and benefits in line. Liquidity preference was Keynes greatest discovery and nobody gives a damn, not even the Communists, so what other option than perpetual inflation did he have?

MichaelCollins 4y ago

> It's late stage capitalism. It's going to get so much worse. Years from now you'll look back at the 2020s and think "I though THAT was the late stage? Boy I had no idea."

pas 4y ago
why will it get worse? what's the model that predicts this?
- MichaelCollins 4y ago
  There seems to be no limit to the insanity people will tolerate with sufficient conditioning, so there is no reason to think there is a natural limit to how bad any economic or political system, capitalism or otherwise, can degrade. If you can't imagine how things could get even worse, then watch some science fiction or read some history books. Tearing people's hearts out to appease the sun god, or to repossess the organ after unpaid medical bills. We're not there yet, but that could be the sort of madness we're heading into.
  - pas 4y ago
    I agree, people can adapt to basically anything, but we have pretty clear precedents about who does what when faced with this or that. In the face of constant legally sanctioned/mandated exploitation the frequency of outlaw group appearances increases, similarly revolts start from time to time. (Not saying their success rate was any great.) Repossessing organs doesn't sound scary. The fanatics do scare me more, after all North Korea and every other successful oppressive regime was built on that. But it remains to be seen if it's possible to scale up totalitarianism to bigger scales.
- BirAdam 4y ago
  It will get worse because the US federal government will not be able to pay debt service indefinitely. This will either mean a lowering of interest rates and acceleration of both inflation and debt accumulation (merely delaying the collapse of the dollar system) or US federal default which will collapse the dollar system. When dollars quit flowing to the states in return for federal program enforcement there will be little incentive for state governments to continue adhering to federal rules. Warriors likewise don't usually fight for free, so there's unlikely to be a large military presence to hold it all together. From many perspectives, you could consider this to be not the end of capitalism in the USA, but the end of empire altogether. Of course, the politicians, bankers, and managerial elite of the USA have kept this going far longer than I thought possible, so it may not happen that way at all.
  - pas 4y ago
    The spectrum between yaay everything is amazing and the dollar system collapses is ... pretty big. "U.S. interest costs won’t rise catastrophically in the short term, and there’s not really a reason to expect interest rates to stay high for decades. Furthermore, inflation will itself erode some of the national debt, reducing long-term interest costs relative to GDP." "Right now, interest payments haven’t even begun to rise as a percent of tax revenue, and one big reason is inflation. Interest rates are set in dollar amounts, and inflation increases the number of dollars in the economy, meaning that tax revenues increase in dollar terms as well." + debt rollover "the weighted average duration is only about 4 years." (so about half of the debt has to be renewed in about 4 years) "The Fed currently predicts that it will start cutting rates in 2023. And markets expect this to happen too." https://noahpinion.substack.com/p/us-government-debt-is-not-a-ticking https://noahpinion.substack.com/p/us-government-debt-is-not-... [sorry paywall] "a growing surplus of savings worldwide." https://www.fullstackeconomics.com/i/70962695/aging-populations-save-more https://www.fullstackeconomics.com/i/70962695/aging-populati... > end of empire that's unlikely though https://www.youtube.com/watch?v=pKVQDUQR8I4 https://www.youtube.com/watch?v=pKVQDUQR8I4

dbingham 4y ago

I am of the opinion that the solution is Free Market Socialism: a market economy where the businesses are governed by their workers. Capital is allowed a reasonable, regulated return on its investment (which takes the form of loans, not equity) and further financing can happen through crowd funding (since this system would naturally result in a much more even distribution of capital, an order of magnitude more people will have spare money to contribute to projects that interest them). Workers have a much weaker incentive to consolidate than investors do, since the consolidation results in them losing voice and power and there are no big cash payments in return (no equity financing means no big equity sales). So this system would tend to work against monopolization. In addition, workers have much deeper connections to the communities impacted by their business's operations than investors do - they usually live in them. So the tendency to externalize costs on to communities will be much lower (not gone, just reduced), since the workers will experience those costs along with the rest of their communities. Unions become completely unnecessary in this system. The people doing the work are governing the business, they get to set their own working conditions. And you still get all of the benefits of the free market - no government control, competition, the freedom to start new enterprises - with many of the rough edges sanded off.

mind-blight 4y ago
> Unions become completely unnecessary in this system. I don't think that's true. Unions exist to negotiate working conditions with management. Management doesn't disappear in the system that you're describing. Some of the incentives for poor working conditions disappear, but not all of them. There are non-profits that have unionized due to worker abuses. Ironically, I've worked in VC-backed startups most of my career, and I've experienced much less abuse than friends who work at non-profits
- dbingham 4y ago
  Non-profits aren't usually governed by their workers. They're usually governed by an elected or appointed board. What I'm describing is a system in which all businesses become what are currently known as "worker cooperatives". In that system, if management produces conditions that the workers don't like, the workers vote management out. I'm not aware of any worker cooperatives that have unionized, though I believe Mondragon (one of the biggest, oldest, and most successful worker cooperatives) does have what amounts to a multicameral system with one of the councils filling the roll of the union in advocating for line workers. [1] [1] https://en.wikipedia.org/wiki/Mondragon_Corporation https://en.wikipedia.org/wiki/Mondragon_Corporation

BirAdam 4y ago

So, I wouldn't consider this late stage capitalism. I would consider it late stage republic. The government eventually attacks large commercial interests, as a result those large commercial interests purchase politicians. Any large commercial interest who refuses to bribe politicians will get attacked, so all of the large players do so. They then get entrenched, get bigger, get more powerful. Eventually, the line between government and corporation disappears. I do not believe that there is a way around this situation in any majoritarian government. In the USA, by the time McKinley was running for office, there'd already been two campaign finance reforms. It would seem that purchasing power is what always does and always will happen in majoritarianism. If you do not have regulatory capture, a monopoly should be impossible because any large amount of money being made is a signal that more resources are needed in a given market segment. If, otoh, you have a large interest purchasing politicians they can now erect barriers to entry preventing effective competition. Once those barriers are in place, people begin to accept them as necessary, right, proper, and true. Only once things begin to fall apart do people even begin to recognize how absurd it is that a license is required for a child's lemonade stand. Unfortunately, Utopia is impossible. All systems suck because all people are flawed. Socialism, capitalism, communism, fascism, monarchism; they're all bad. Additionally, they all really boil down to being either monarchy or oligarchy and every other term is just window dressing. You either vest power into a single person or a small elite group, and then people try to use magical words on pieces of paper to control those individuals. It works for a short time, and then it all starts to fall apart. Eventually, the ruling class realizes that the words on paper are just words and not magic, mos maiorum is lost and society starts to unravel. Modern governments have been better in the sense that it has taken a few hundred years for them all to become dangerous to their constituencies, but it is happening none the less.

mindslight 4y ago

I'm not convinced of this as a universal rule, rather than the results of specific details of our economy. A core assumption of capitalism is that capital is distributed. But our economy is highly centralized by design. Specifically the government creates a bottomless supply of money to loan out, but only to highly-legible highly-centralized entities. As such, big business has an endless source of cheap capital to draw from to invest, whether it's devouring other businesses or building out thousands of cookie cutter stores. Small businesses can only access the money trough by going through a consumer bank with its higher fees and scrutiny of business plans. Individuals can only access the money trough by taking out collateralized loans on legible assets. For the individual market we can readily observe the resulting destructive individual-disempowering dynamic for the markets that have been financialized - chiefly housing and education. A significant raising of interest rates would reign in this effect. Unfortunately it would take a long and protracted timeline for actual reform, as our economy has come to rely on the bottomless source of easy capital. But it's still worth keeping in mind the warped foundation our specific economy is built on, rather than characterizing the current moribund state as an inevitable end result of every market economy.

imtringued 4y ago

Capitalism and free market are inherently incompatible. >I love capitalism when it's functioning it's the greatest system ever invented. Capitalism is never functioning. It is inherently dysfunctional. The moment there is wealth and people should be happy, it breaks completely. It only "works" if the economy is growing or in other words, it only works if the economy has been recently destroyed by a war that justifies growth. What you might love is the market that capitalists eventually distort. >When it's just a market full of monopolies it's akin to dysfunctional communism from a consumer choice perspective. Capitalism is a monopoly based economic system. Getting rid of the monopolies gets rid of capitalism entirely and you are left with just a market based economy. I don't know what you are even talking about. >I don't know what the solution is. The solution is basically an liquidity theory (you could also consider it a trade theory of money) based approach that splits interest or as the Marxists call it "surplus value", into its individual parts and once you do so, you will realize that there is actually no room to compensate the owners of capital, only the owners of liquidity and liquidity is a public good, a service provided by the government and the public combined which then deserves to be taxed to bring costs and benefits in line. Liquidity preference was Keynes greatest discovery and nobody gives a damn, not even the Communists, so what other option than perpetual inflation did he have?