5 ms·

‘Capitalism is dead. Now we have something much worse’

50 points by jrepinc 3y ago

1vuio0pswjnm7 3y ago
"I read him McNamee's reply: "I buy the basic thesis. The US kept interest rates at near zero from 2009 to 2022. This encouraged business models that promised world-changing outcomes, even if they were completely unrealistic and/or hostile to the public interest (eg the gig economy, self-driving cars, crypto, metaverse, AI). This came at a time of no regulation of tech and an accepted culture in business that said executives should maximise shareholder value at expense of everything else (eg democracy, public health, public safety)... had rates been at 5% the past 14 years, I doubt very much that the gig economy, self-driving cars, crypto, metaverse or AI would have gotten even 10% as much funding.""
- roenxi 3y ago
  Distorted interest rates touch everything. If we're going to pick a handful of things that low interest rates effected that basket is too varied. The gig economy is a major employer, the others are not. And AI isn't being pushed by low interest rates, it is being pushed by things like AlphaGo or ChatGPT being somewhat magical.
  - _jmw125 3y ago
    ...and where did the money for AlphaGo and ChatGPT come from again?
    - roenxi 3y ago
      Google and eventually the Paypal mafia types, respectively. You could have looked that up on Wikipedia.
  - somewhereoutth 3y ago
    ChatGPT and friends look magical, but as yet no great revolution in working practices or whatever has occurred. So the excitement about AI is based on 'very large future promise', which is exactly the kind of thing that ultra low interest rates tend to pump.
    - roenxi 3y ago
      I know a bunch of people who are very excited about AI and using it in a professional context. Their feelings are inspired by demonstrated and past performance, the future promise is so big that I don't think anyone can process it. I don't think they understand what exponential growth in processing power implies.
      - aleph_minus_one 3y ago
        > the future promise is so big that I don't think anyone can process it. Sounds like a sentence that was taken from some pulpiteer's sermon when talking about god or afterlife. In other words: this promise is rather some nice fairy tale for some naive nerds and investors who love to believe in it. > I don't think they understand what exponential growth in processing power implies. This is very easy: for the data points (x_i, y_i), you can draw a decent straight line through the data transformed data points (x_i, log y_i). Thus: exponential growth is just some fancy term for "we do linear regression/linear Taylor approximation in this transformed space". I'm deeply impressed by such deep mathematics *sarc*.
        roenxi 3y ago
        Although "we do linear regression ... in this transformed space" is correct, it also isn't an attempt to understand what exponential growth in processing power implies. That is an attempt (really, a success) at providing a definition of what exponential growth is [0]. Implications involves things like https://ourworldindata.org/brief-history-of-ai https://ourworldindata.org/brief-history-of-ai + little extrapolation. Interestingly, as I look at that article, it appears AI is actually solving college level math now - https://blog.research.google/2022/06/minerva-solving-quantitative-reasoning.html https://blog.research.google/2022/06/minerva-solving-quantit.... I wish I'd had that when I was at University. [0] Ironically, ChatGPT doesn't usually make that mistake, because it always tries to be calm and helpful it consistently makes a better-than-human attempt at reading comprehension whenever I've interacted with it.
remram 3y ago
I wish I could read the opinion without the entire account of the journalist's trip to Greece and the scenery around their meeting place.
graevy 3y ago
"More precisely, I will come to the following conclusion. Whenever the rate of return on capital is significantly and durably higher than the growth rate of the economy, it is all but inevitable that inheritance (of fortunes accumulated in the past) predominates over saving (wealth accumulated in the present). In strict logic, it could be otherwise, but the forces pushing in this direction are extremely powerful. The inequality r > g in one sense implies that the past tends to devour the future: wealth originating in the past automatically grows more rapidly, even without labor, than wealth stemming from work, which can be saved. Almost inevitably, this tends to give lasting, disproportionate importance to inequalities created in the past, and therefore to inheritance." (20.3) "The inequality r > g implies that wealth accumulated in the past grows more rapidly than output and wages. This inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a rentier, more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. The past devours the future." (27.6) - Thomas Piketty, Capital in the 21st Century
- eatonphil 3y ago
  This is a great book. I have Capital and Ideology on my nightstand too but I'm building up the fortitude to power through it.
  - wenebego 3y ago
    I just started reading it last night, really enjoying it
    - eatonphil 3y ago
      Capital in the 21st Century or Capital and Ideology?
      - wenebego 3y ago
        Misread your comment, haha. Capital in the 21st Century
shafouzzz 3y ago
[flagged]
troupo 3y ago
This... This is capitalism. Consolidation of big companies ruling their fiefdoms? That was what capitalism was literally doing until the various consumer and worker protections were slowly and painfully developed. Yes, painfully. See, for example, Battle of Blair Mountain https://en.wikipedia.org/wiki/Battle_of_Blair_Mountain https://en.wikipedia.org/wiki/Battle_of_Blair_Mountain
louwrentius 3y ago
I believe it’s a good thing if the HN crowd steps out of their bubble and inform themselves a bit more on topics of capitalism, socialism and communism. I feel more and more that those in power - the capitalists - have done a tremendous job of conditioning us from birth in the last 100+ years that capitalism is “the only way”. Yet if you read a book like “Debt: the first 5000 years” by David Graeber, it put things into perspective. And there is so much more to read.
- hackeraccount 3y ago
  Graeber's book was easily one of the most annoying books I've read in the last 10 years. It's worth reading though in the same way that some bad movies are worth watching - it will give you the chance to figure out just what's wrong with the world view it espouses and you can't really appreciate the critiques of it unless you know the source.
- aa1234556 3y ago
  [dead]
- notacoward 3y ago
  For those who say things like "what about USSR or North Korea": the problem there is/was not the socialism (or communism) but the authoritarianism. They're different axes on the political compass. Authoritarian state socialism is but one of many forms. Social democracy is structurally anti-authoritarian. "Laissez-faire" policies - the pseudo-populist alternative - actually gravitate toward government/industry collusion, often in the form of faux privatization of government functions. That's a cornerstone of fascism, which has its own sordid history and also seems to be where we're headed. Also, learn the difference between a political system and an economic one. Of course they're related (see "collusion" above), but it's a mistake to act as though they're the same thing.
  - ChatGTP 3y ago
    I agree, it's ridiculous that the majority of comments about socialism or communism end wit comments about authoritarian leadership. I do think we've been heavily trained to do this however.
heresie-dabord 3y ago
The chatty style (tourist journalism?) of the article detracts from the proposition that readers want to understand. FTFA: "We’re now in servitude, Varoufakis argues, to the fiefdoms of our new global masters, Lord Zuckerberg of Facelandia and Sir Musk of the rotten borough of X." tl;dr The working people live as interest serfs in an economy that has become impossible to afford for many. Meanwhile, enormously wealthy people have unchecked power over politics, technology, and public policy. These wealthy people can alter the workforce and fund movements according to their unrestrained and unscrupulous caprices. Public policy in the US is in tatters (and is under heavy strain elsewhere), affordable lodging is a quaint hypothesis, and the current middle class cohort (i.e. anyone with what used to be a good salary) is trying to characterise its debt despair as temporary embarrassment.
fzeroracer 3y ago
Ultimately I've firmly believed that the problem is investors and public companies. Investors tend to warp the economy solely to suit their needs as the rent-seeking class, which results in negative effects on how a company is ran because the needs of the shareholder are often against the needs of the customer and the worker. Both privately owned companies and worker owned companies tend to have far less issues in this regard and helps stymie the cycle of capitalism. Grocery stores are an example of where our choice is increasingly non-existent because all grocers operate under the same company.

50 points by jrepinc 3y ago

"I read him McNamee's reply: "I buy the basic thesis. The US kept interest rates at near zero from 2009 to 2022. This encouraged business models that promised world-changing outcomes, even if they were completely unrealistic and/or hostile to the public interest (eg the gig economy, self-driving cars, crypto, metaverse, AI). This came at a time of no regulation of tech and an accepted culture in business that said executives should maximise shareholder value at expense of everything else (eg democracy, public health, public safety)... had rates been at 5% the past 14 years, I doubt very much that the gig economy, self-driving cars, crypto, metaverse or AI would have gotten even 10% as much funding.""

roenxi 3y ago
Distorted interest rates touch everything. If we're going to pick a handful of things that low interest rates effected that basket is too varied. The gig economy is a major employer, the others are not. And AI isn't being pushed by low interest rates, it is being pushed by things like AlphaGo or ChatGPT being somewhat magical.
- _jmw125 3y ago
  ...and where did the money for AlphaGo and ChatGPT come from again?
  - roenxi 3y ago
    Google and eventually the Paypal mafia types, respectively. You could have looked that up on Wikipedia.
- somewhereoutth 3y ago
  ChatGPT and friends look magical, but as yet no great revolution in working practices or whatever has occurred. So the excitement about AI is based on 'very large future promise', which is exactly the kind of thing that ultra low interest rates tend to pump.
  - roenxi 3y ago
    I know a bunch of people who are very excited about AI and using it in a professional context. Their feelings are inspired by demonstrated and past performance, the future promise is so big that I don't think anyone can process it. I don't think they understand what exponential growth in processing power implies.
    - aleph_minus_one 3y ago
      > the future promise is so big that I don't think anyone can process it. Sounds like a sentence that was taken from some pulpiteer's sermon when talking about god or afterlife. In other words: this promise is rather some nice fairy tale for some naive nerds and investors who love to believe in it. > I don't think they understand what exponential growth in processing power implies. This is very easy: for the data points (x_i, y_i), you can draw a decent straight line through the data transformed data points (x_i, log y_i). Thus: exponential growth is just some fancy term for "we do linear regression/linear Taylor approximation in this transformed space". I'm deeply impressed by such deep mathematics *sarc*.
      - roenxi 3y ago
        Although "we do linear regression ... in this transformed space" is correct, it also isn't an attempt to understand what exponential growth in processing power implies. That is an attempt (really, a success) at providing a definition of what exponential growth is [0]. Implications involves things like https://ourworldindata.org/brief-history-of-ai https://ourworldindata.org/brief-history-of-ai + little extrapolation. Interestingly, as I look at that article, it appears AI is actually solving college level math now - https://blog.research.google/2022/06/minerva-solving-quantitative-reasoning.html https://blog.research.google/2022/06/minerva-solving-quantit.... I wish I'd had that when I was at University. [0] Ironically, ChatGPT doesn't usually make that mistake, because it always tries to be calm and helpful it consistently makes a better-than-human attempt at reading comprehension whenever I've interacted with it.

remram 3y ago

I wish I could read the opinion without the entire account of the journalist's trip to Greece and the scenery around their meeting place.

graevy 3y ago

"More precisely, I will come to the following conclusion. Whenever the rate of return on capital is significantly and durably higher than the growth rate of the economy, it is all but inevitable that inheritance (of fortunes accumulated in the past) predominates over saving (wealth accumulated in the present). In strict logic, it could be otherwise, but the forces pushing in this direction are extremely powerful. The inequality r > g in one sense implies that the past tends to devour the future: wealth originating in the past automatically grows more rapidly, even without labor, than wealth stemming from work, which can be saved. Almost inevitably, this tends to give lasting, disproportionate importance to inequalities created in the past, and therefore to inheritance." (20.3) "The inequality r > g implies that wealth accumulated in the past grows more rapidly than output and wages. This inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a rentier, more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. The past devours the future." (27.6) - Thomas Piketty, Capital in the 21st Century

eatonphil 3y ago
This is a great book. I have Capital and Ideology on my nightstand too but I'm building up the fortitude to power through it.
- wenebego 3y ago
  I just started reading it last night, really enjoying it
  - eatonphil 3y ago
    Capital in the 21st Century or Capital and Ideology?
    - wenebego 3y ago
      Misread your comment, haha. Capital in the 21st Century

shafouzzz 3y ago

[flagged]

troupo 3y ago

This... This is capitalism. Consolidation of big companies ruling their fiefdoms? That was what capitalism was literally doing until the various consumer and worker protections were slowly and painfully developed. Yes, painfully. See, for example, Battle of Blair Mountain https://en.wikipedia.org/wiki/Battle_of_Blair_Mountain https://en.wikipedia.org/wiki/Battle_of_Blair_Mountain

louwrentius 3y ago

I believe it’s a good thing if the HN crowd steps out of their bubble and inform themselves a bit more on topics of capitalism, socialism and communism. I feel more and more that those in power - the capitalists - have done a tremendous job of conditioning us from birth in the last 100+ years that capitalism is “the only way”. Yet if you read a book like “Debt: the first 5000 years” by David Graeber, it put things into perspective. And there is so much more to read.

hackeraccount 3y ago
Graeber's book was easily one of the most annoying books I've read in the last 10 years. It's worth reading though in the same way that some bad movies are worth watching - it will give you the chance to figure out just what's wrong with the world view it espouses and you can't really appreciate the critiques of it unless you know the source.
aa1234556 3y ago
[dead]
notacoward 3y ago
For those who say things like "what about USSR or North Korea": the problem there is/was not the socialism (or communism) but the authoritarianism. They're different axes on the political compass. Authoritarian state socialism is but one of many forms. Social democracy is structurally anti-authoritarian. "Laissez-faire" policies - the pseudo-populist alternative - actually gravitate toward government/industry collusion, often in the form of faux privatization of government functions. That's a cornerstone of fascism, which has its own sordid history and also seems to be where we're headed. Also, learn the difference between a political system and an economic one. Of course they're related (see "collusion" above), but it's a mistake to act as though they're the same thing.
- ChatGTP 3y ago
  I agree, it's ridiculous that the majority of comments about socialism or communism end wit comments about authoritarian leadership. I do think we've been heavily trained to do this however.

heresie-dabord 3y ago

The chatty style (tourist journalism?) of the article detracts from the proposition that readers want to understand. FTFA: "We’re now in servitude, Varoufakis argues, to the fiefdoms of our new global masters, Lord Zuckerberg of Facelandia and Sir Musk of the rotten borough of X." tl;dr The working people live as interest serfs in an economy that has become impossible to afford for many. Meanwhile, enormously wealthy people have unchecked power over politics, technology, and public policy. These wealthy people can alter the workforce and fund movements according to their unrestrained and unscrupulous caprices. Public policy in the US is in tatters (and is under heavy strain elsewhere), affordable lodging is a quaint hypothesis, and the current middle class cohort (i.e. anyone with what used to be a good salary) is trying to characterise its debt despair as temporary embarrassment.

fzeroracer 3y ago

Ultimately I've firmly believed that the problem is investors and public companies. Investors tend to warp the economy solely to suit their needs as the rent-seeking class, which results in negative effects on how a company is ran because the needs of the shareholder are often against the needs of the customer and the worker. Both privately owned companies and worker owned companies tend to have far less issues in this regard and helps stymie the cycle of capitalism. Grocery stores are an example of where our choice is increasingly non-existent because all grocers operate under the same company.