4 ms·

> Open markets where markets have been open for awhile (and no new game changing things like new technology, new ideology, etc. have happened) will maintain hom

by sfink 3y ago

> Open markets where markets have been open for awhile (and no new game changing things like new technology, new ideology, etc. have happened) will maintain homeostasis at that level. I think "homeostasis" is overselling it, even if I agree in the short to medium term. Any growth potential leads to pressure to take advantage of it, which leads to runaway growth until some sort of scarcity sets in, where one entity's ability to exploit the potential is decreased by other entities'. This leads to competition, which results in pressure for each entity to take advantage of more of it than other entities, which leads to entities evolving ways to restrict others' consumption even at the expense of their own. Free markets expand consumption of potential to the point of scarcity, at which time they produce evolutionary pressure towards non-free markets (via monopolies, regulatory capture, or whatever else is available). It's like a nutrient-rich drainpipe getting so clogged up with algae that the water stops flowing. Or fishing, where it's all good until you start making a serious dent in next year's breeding stock. Free markets in times of plenty can produce massive benefits. They raise people out of poverty, dramatically improve healthcare and education and opportunities, etc. AFAICT, they're the most powerful mechanism for doing so. And then eventually, they consume themselves. I take back the complaint about using "homeostasis". After all, it applies to systems that will eventually die.

lazide 3y ago
When a creatures homeostasis gets too out of whack, yes - it dies. Notably, I have yet to see any system that won’t die eventually. The giant Communism experiment died in the 90’s, for one. Luckily, most have mechanisms to adjust - if they’re willing and able to do so. Cancer, notably, is one such situation that hijacks that mechanism. I’d argue that culturally, we have such a cancer forming right now. And it’s not capitalism, or communism, or politics, or guns or anti guns, or whatever. It’s our inability to focus on and care about what we, as individuals, actually need and want, and push for it. An inability actively being grown and reinforced by a number of entities - and allowed because we refuse to acknowledge our weaknesses too.
imtringued 3y ago
The problem isn't scarcity actually. If you have scarcity, "it just works". It is in fact the opposite. Capitalism fails due to inevitable relative abundance. At some point you reach market saturation. Present abundant resources should be allocated to the future. This doesn't happen. When abundance happens, you no longer need full employment to produce all present consumption needs. However, the principle of hiring the most productive employees and letting them work full time results in the redundancy and unemployment of less productive people, because hiring a single employee has less fixed costs than hiring two employees assuming they both perform the same amount of work. The paradox is that the more productive person is producing the consumer goods of the person that was let go. That unemployed person can't afford to buy his own consumer goods since he doesn't get paid to produce them, because it saves the employer fixed costs. You could think of this as a greedy knapsack algorithm. This algorithm works while there is scarcity, since you can just hire all workers. It doesn't work when there is abundance, since workers have to earn enough income to buy their own products. Note how this relates purely to the structure of the economy. Now the classical objection to this is that the workers who produce but don't consume will save instead, which lowers the interest rate. This is supposed to happen even if the interest rate is already at zero or even negative. The capital market signals that present resources are supposed to be allocated to serve the future. This allows employers to hire the unemployed workers and let them work to satisfy future demand, such as interplanetary travel and colonization of the moon or building pyramids that last more than four thousand years.
- WalterBright 3y ago
  > Capitalism fails due to inevitable relative abundance If it's inevitable, there ought to be compelling examples?

by sfink 3y ago

lazide 3y ago

When a creatures homeostasis gets too out of whack, yes - it dies. Notably, I have yet to see any system that won’t die eventually. The giant Communism experiment died in the 90’s, for one. Luckily, most have mechanisms to adjust - if they’re willing and able to do so. Cancer, notably, is one such situation that hijacks that mechanism. I’d argue that culturally, we have such a cancer forming right now. And it’s not capitalism, or communism, or politics, or guns or anti guns, or whatever. It’s our inability to focus on and care about what we, as individuals, actually need and want, and push for it. An inability actively being grown and reinforced by a number of entities - and allowed because we refuse to acknowledge our weaknesses too.

imtringued 3y ago

The problem isn't scarcity actually. If you have scarcity, "it just works". It is in fact the opposite. Capitalism fails due to inevitable relative abundance. At some point you reach market saturation. Present abundant resources should be allocated to the future. This doesn't happen. When abundance happens, you no longer need full employment to produce all present consumption needs. However, the principle of hiring the most productive employees and letting them work full time results in the redundancy and unemployment of less productive people, because hiring a single employee has less fixed costs than hiring two employees assuming they both perform the same amount of work. The paradox is that the more productive person is producing the consumer goods of the person that was let go. That unemployed person can't afford to buy his own consumer goods since he doesn't get paid to produce them, because it saves the employer fixed costs. You could think of this as a greedy knapsack algorithm. This algorithm works while there is scarcity, since you can just hire all workers. It doesn't work when there is abundance, since workers have to earn enough income to buy their own products. Note how this relates purely to the structure of the economy. Now the classical objection to this is that the workers who produce but don't consume will save instead, which lowers the interest rate. This is supposed to happen even if the interest rate is already at zero or even negative. The capital market signals that present resources are supposed to be allocated to serve the future. This allows employers to hire the unemployed workers and let them work to satisfy future demand, such as interplanetary travel and colonization of the moon or building pyramids that last more than four thousand years.

WalterBright 3y ago
> Capitalism fails due to inevitable relative abundance If it's inevitable, there ought to be compelling examples?