7 ms·

Well, cartels aren't capitalism. Capitalism would be someone coming in and realizing the prices are inflated and undercut the rent prices while still being pro

Well, cartels aren't capitalism. Capitalism would be someone coming in and realizing the prices are inflated and undercut the rent prices while still being profitable.

wwweston 4y ago
"Capitalism" can be a lot of things, including things which privilege capital without regard to market freedom for labor or consumer. Cartels certainly aren't free markets. To keep those you need policy which keeps them that way.
- SMAAART 4y ago
  George Orwell, of 1984 fame, would approve of this comment.
  - wwweston 4y ago
    Hard to say for sure, but probably correct: Orwell seemed to be a critic of totalist ideologies, certainly totalitarian communism but he also had words for unrestrained laissez-faire capitalism.
    - SMAAART 4y ago
      My comment was not political in nature, I was referring to https://en.wikipedia.org/wiki/Doublespeak https://en.wikipedia.org/wiki/Doublespeak
- deleted 4y ago
  [deleted]
- JoeJonathan 4y ago
  The Dutch East India Company is often considered integral to the history of capitalism, if not the start of capitalism itself, and was granted a 21-year monopoly on trade by the Dutch government.
  - JackFr 4y ago
    The real reason the Dutch East India Company is integral to the history of capitalism has less to do with trade and more to do with the innovative legal structure which for the first time separated the owners from the managers, and unlike all prior enterprises allowed for tradable claims on the ownership in the form of equity shares rather than an ownership governed by a partnership. The problem with using 'capitalism' in discussions like this is that there isn't a precise definition of it. To some people it simply means private ownership of the means of production, to others in includes free trade, to others (and to my thinking, the most precise, but YMMV) its about the separation of management and ownership and tradable claims on the firm.
  - scatters 4y ago
    The Pythagoreans are often considered integral to the history of mathematics, if not the start of mathematics itself, and they murdered the guy who proved that the square root of two is irrational.
    - ahoy 4y ago
      And are they not still mathematicians?
JoeJonathan 4y ago
How would that work in a real estate market? How could you convince landlords to lower prices?
- singlow 4y ago
  By not renting from them. A vacant house will pressure the rent downward. But this only works if there is a free market. If the regulations are limiting supply, prices will continue to go up.
- mnd999 4y ago
  Excess supply. But that will never happen. Low availability keeps prices high with no need to worry about things like quality. There is therefore no incentive to build to increase supply. When a market is this dysfunctional, state intervention is the only way forward. Build publicly owned housing and rent it affordably. This probably won’t happen either, because so many in government are also landlords. Edit: Wow, so many downvotes for advocating public housing.
  - cmiles74 4y ago
    It's worth pointing out that the software will recommend leaving apartments empty for the sake of keeping rents high. This is briefly mentioned in the article, but implies that we would need a lot of excess supply to make a difference in areas dominated by a small number of companies utilizing this product.
    - luckylion 4y ago
      Once additional supply is added, all the dynamics change though. The cartel can restrict their own supply at the price of profits, but cartel members will see that investors who are not part of the cartel enjoy the same high rents while having much higher utilization because they don't need to keep flats empty. The only way for the cartel to ensure that doesn't happen is to either make sure every (new) landlord becomes a member, or make sure there can be no new landlords. So far, they've use the latter option, and that's most likely because the first one is hard: if the cartel controls the market and keeps the prices high, new investors have no incentive to join, they'll make more money if they don't.
mola 4y ago
Capitalism is where the capital hold the power. And not surprising power likes to accumulate and be sustained by every mean possible
- gwright 4y ago
  I've been convinced lately that we have no collective agreement about what the term "capitalism" means any more. Yes there are text book definitions but none of those are used in typical public discussions like HN. Power tends to accumulate when government actions restrict voluntary trade that would have otherwise proceeded. That is a characteristic of governments not of "capitalism", IMHO.
  - Kye 4y ago
    There is no clear line between government and business in a place where spending money is protected speech. Much of the US government at all levels, but especially state and local, is fully captured by private interests.
colpabar 4y ago
Okay, if that’s the case - why isn’t that happening, and what should be done to make it happen?
- gwright 4y ago
  You need competition, which means you need developers to add more housing units, which means you need to change the regulations that prevent that from happening. Problems in real-estate are almost always government created IMHO and not "capitalism".
  - User23 4y ago
    There are plenty of housing units in the USA. Housing is extremely affordable in parts of many major American cities such as Detroit and Baltimore to name just a couple. For example you can buy a house in lovely Baltimore for under $25,000 in a neighborhood with amenities like a walkable park, and tennis and basketball courts[1]. The complaint is never really "housing isn't affordable," it's more along the lines of "I can't afford to live in the most desirable coastal real estate in the entire world" or "I can't afford to live in a safe place with a good school district" (a classism/racism dog whistle if ever there was one). [1] https://livebaltimore.com/neighborhoods/madison-eastend/ https://livebaltimore.com/neighborhoods/madison-eastend/
    - pixl97 4y ago
      Ah, yes, I found that $25k house in Baltimore... https://www.zillow.com/homedetails/2011-E-Lafayette-Ave-Baltimore-MD-21213/36453994_zpid/ https://www.zillow.com/homedetails/2011-E-Lafayette-Ave-Balt... I see some 'houses' in the area that you're looking at for $130k, built in WWII and likely have heating bills high enough to bankrupt the wealthy unless the place is ripped apart and modern insulation is put in.
    - mathgorges 4y ago
      As a native Detroiter I can confidently tell you that any house you can get for $25,000 will come with externalities that will make the house undesirable on balance. Large back tax bill, lack of city services (e.g. if live in Springwells, good luck getting a reasonable response time from Detroit PD if you're being burgled) and an unsafe transit situation are the most common ones I can think of. The houses are cheap for a reason. Its not as though Detroit is filled with provincial oafs that don't know what they're selling.
CPLX 4y ago
Capitalism doesn't just happen. The natural state of nature is cartels, that's what markets will trend towards without government regulation. If this effect isn't intuitive to you, consider what happens when the market for something is completely removed from government involvement, like the global market for cocaine. Or a market that develops in the absence of any kind of centralized authority, like Somalia. That's what happens to every market unless a state intervenes. The invisible hand of the market trends towards long term warlord/mafia type arrangements unless the public is organized enough to stop it.
- JackFr 4y ago
  > like the global market for cocaine. The global market for cocaine is highly regulated by very violent men with guns. It is for that reason that drug consumers favor legalization but drug suppliers oppose it.
  - CPLX 4y ago
    All global markets are highly regulated by very violent men with guns. The interesting part is who those men with guns are accountable to.
    - drewcoo 4y ago
      Governments normally maintain monopolies on violence.
ahoy 4y ago
How convenient it is that, whenever capitalism has a negative effect, people rush to say "oh but its not real capitalism, they're doing it wrong. That would never happen"
- yamtaddle 4y ago
  I think it's weird people are stuck on treating the real-world system of capitalism and ideals about how markets should work as synonymous. It's possible to criticize capitalism for its failures without necessarily questioning the underlying ideals about markets. They're not the same thing. Markets and market-thinking predate capitalism, and exist in and affect all kinds of non-capitalist systems, today and historically. They aren't solely a feature of capitalism, and capitalism isn't the same thing as markets.
- hbrn 4y ago
  I don't know any capitalism advocate that claims capitalism is perfect. It just happens to be way better than all of the suggested alternatives. And your No True Scotsman example is typically heard in reference to communism in USSR/China. I'll choose my billionaires over famine any day.
traverseda 4y ago
Land is pretty much the definitive natural monopoly. If you want land rights you're going to end up with monopolies formed around the use of land and natural resources.
try_the_bass 4y ago
No, that's "free market economics", which is slightly different. Cartels are very much capitalist, because they create more profits for everyone involved. The more parties you get involved, the better it is for all of them, and the worse is it for any competitors who do not join.
JohnFen 4y ago
That's more of a free market thing. "Free market" and "capitalism" are distinct concepts that can, but don't have to, coexist.
gowld 4y ago
"capitalism" != "free market" != "fair market with competition".

Well, cartels aren't capitalism. Capitalism would be someone coming in and realizing the prices are inflated and undercut the rent prices while still being profitable.

wwweston 4y ago

"Capitalism" can be a lot of things, including things which privilege capital without regard to market freedom for labor or consumer. Cartels certainly aren't free markets. To keep those you need policy which keeps them that way.

SMAAART 4y ago
George Orwell, of 1984 fame, would approve of this comment.
- wwweston 4y ago
  Hard to say for sure, but probably correct: Orwell seemed to be a critic of totalist ideologies, certainly totalitarian communism but he also had words for unrestrained laissez-faire capitalism.
  - SMAAART 4y ago
    My comment was not political in nature, I was referring to https://en.wikipedia.org/wiki/Doublespeak https://en.wikipedia.org/wiki/Doublespeak
deleted 4y ago
[deleted]
JoeJonathan 4y ago
The Dutch East India Company is often considered integral to the history of capitalism, if not the start of capitalism itself, and was granted a 21-year monopoly on trade by the Dutch government.
- JackFr 4y ago
  The real reason the Dutch East India Company is integral to the history of capitalism has less to do with trade and more to do with the innovative legal structure which for the first time separated the owners from the managers, and unlike all prior enterprises allowed for tradable claims on the ownership in the form of equity shares rather than an ownership governed by a partnership. The problem with using 'capitalism' in discussions like this is that there isn't a precise definition of it. To some people it simply means private ownership of the means of production, to others in includes free trade, to others (and to my thinking, the most precise, but YMMV) its about the separation of management and ownership and tradable claims on the firm.
- scatters 4y ago
  The Pythagoreans are often considered integral to the history of mathematics, if not the start of mathematics itself, and they murdered the guy who proved that the square root of two is irrational.
  - ahoy 4y ago
    And are they not still mathematicians?

JoeJonathan 4y ago

How would that work in a real estate market? How could you convince landlords to lower prices?

singlow 4y ago
By not renting from them. A vacant house will pressure the rent downward. But this only works if there is a free market. If the regulations are limiting supply, prices will continue to go up.
mnd999 4y ago
Excess supply. But that will never happen. Low availability keeps prices high with no need to worry about things like quality. There is therefore no incentive to build to increase supply. When a market is this dysfunctional, state intervention is the only way forward. Build publicly owned housing and rent it affordably. This probably won’t happen either, because so many in government are also landlords. Edit: Wow, so many downvotes for advocating public housing.
- cmiles74 4y ago
  It's worth pointing out that the software will recommend leaving apartments empty for the sake of keeping rents high. This is briefly mentioned in the article, but implies that we would need a lot of excess supply to make a difference in areas dominated by a small number of companies utilizing this product.
  - luckylion 4y ago
    Once additional supply is added, all the dynamics change though. The cartel can restrict their own supply at the price of profits, but cartel members will see that investors who are not part of the cartel enjoy the same high rents while having much higher utilization because they don't need to keep flats empty. The only way for the cartel to ensure that doesn't happen is to either make sure every (new) landlord becomes a member, or make sure there can be no new landlords. So far, they've use the latter option, and that's most likely because the first one is hard: if the cartel controls the market and keeps the prices high, new investors have no incentive to join, they'll make more money if they don't.

mola 4y ago

Capitalism is where the capital hold the power. And not surprising power likes to accumulate and be sustained by every mean possible

gwright 4y ago
I've been convinced lately that we have no collective agreement about what the term "capitalism" means any more. Yes there are text book definitions but none of those are used in typical public discussions like HN. Power tends to accumulate when government actions restrict voluntary trade that would have otherwise proceeded. That is a characteristic of governments not of "capitalism", IMHO.
- Kye 4y ago
  There is no clear line between government and business in a place where spending money is protected speech. Much of the US government at all levels, but especially state and local, is fully captured by private interests.

colpabar 4y ago

Okay, if that’s the case - why isn’t that happening, and what should be done to make it happen?

gwright 4y ago
You need competition, which means you need developers to add more housing units, which means you need to change the regulations that prevent that from happening. Problems in real-estate are almost always government created IMHO and not "capitalism".
- User23 4y ago
  There are plenty of housing units in the USA. Housing is extremely affordable in parts of many major American cities such as Detroit and Baltimore to name just a couple. For example you can buy a house in lovely Baltimore for under $25,000 in a neighborhood with amenities like a walkable park, and tennis and basketball courts[1]. The complaint is never really "housing isn't affordable," it's more along the lines of "I can't afford to live in the most desirable coastal real estate in the entire world" or "I can't afford to live in a safe place with a good school district" (a classism/racism dog whistle if ever there was one). [1] https://livebaltimore.com/neighborhoods/madison-eastend/ https://livebaltimore.com/neighborhoods/madison-eastend/
  - pixl97 4y ago
    Ah, yes, I found that $25k house in Baltimore... https://www.zillow.com/homedetails/2011-E-Lafayette-Ave-Baltimore-MD-21213/36453994_zpid/ https://www.zillow.com/homedetails/2011-E-Lafayette-Ave-Balt... I see some 'houses' in the area that you're looking at for $130k, built in WWII and likely have heating bills high enough to bankrupt the wealthy unless the place is ripped apart and modern insulation is put in.
  - mathgorges 4y ago
    As a native Detroiter I can confidently tell you that any house you can get for $25,000 will come with externalities that will make the house undesirable on balance. Large back tax bill, lack of city services (e.g. if live in Springwells, good luck getting a reasonable response time from Detroit PD if you're being burgled) and an unsafe transit situation are the most common ones I can think of. The houses are cheap for a reason. Its not as though Detroit is filled with provincial oafs that don't know what they're selling.

CPLX 4y ago

Capitalism doesn't just happen. The natural state of nature is cartels, that's what markets will trend towards without government regulation. If this effect isn't intuitive to you, consider what happens when the market for something is completely removed from government involvement, like the global market for cocaine. Or a market that develops in the absence of any kind of centralized authority, like Somalia. That's what happens to every market unless a state intervenes. The invisible hand of the market trends towards long term warlord/mafia type arrangements unless the public is organized enough to stop it.

JackFr 4y ago
> like the global market for cocaine. The global market for cocaine is highly regulated by very violent men with guns. It is for that reason that drug consumers favor legalization but drug suppliers oppose it.
- CPLX 4y ago
  All global markets are highly regulated by very violent men with guns. The interesting part is who those men with guns are accountable to.
  - drewcoo 4y ago
    Governments normally maintain monopolies on violence.

ahoy 4y ago

How convenient it is that, whenever capitalism has a negative effect, people rush to say "oh but its not real capitalism, they're doing it wrong. That would never happen"

yamtaddle 4y ago
I think it's weird people are stuck on treating the real-world system of capitalism and ideals about how markets should work as synonymous. It's possible to criticize capitalism for its failures without necessarily questioning the underlying ideals about markets. They're not the same thing. Markets and market-thinking predate capitalism, and exist in and affect all kinds of non-capitalist systems, today and historically. They aren't solely a feature of capitalism, and capitalism isn't the same thing as markets.
hbrn 4y ago
I don't know any capitalism advocate that claims capitalism is perfect. It just happens to be way better than all of the suggested alternatives. And your No True Scotsman example is typically heard in reference to communism in USSR/China. I'll choose my billionaires over famine any day.

traverseda 4y ago

Land is pretty much the definitive natural monopoly. If you want land rights you're going to end up with monopolies formed around the use of land and natural resources.

try_the_bass 4y ago

No, that's "free market economics", which is slightly different. Cartels are very much capitalist, because they create more profits for everyone involved. The more parties you get involved, the better it is for all of them, and the worse is it for any competitors who do not join.

JohnFen 4y ago

That's more of a free market thing. "Free market" and "capitalism" are distinct concepts that can, but don't have to, coexist.

gowld 4y ago

"capitalism" != "free market" != "fair market with competition".