4 ms·

I really don't understand why all this Marx 2.0 stuff is on Hacker News. Marx's ideas have been tried, over and over again, and failed. There are far better ess

by capz 12y ago

I really don't understand why all this Marx 2.0 stuff is on Hacker News. Marx's ideas have been tried, over and over again, and failed. There are far better essays on capital and technology out there. The Mouse and the Market "If you are for technological progress, and its wide availability, then you should be an enthusiastic supporter of capital accumulation and its rational investment." http://mises.org/daily/1786/ http://mises.org/daily/1786/ Taxing income is horrendous enough, but necessary. Taxing accumulated capital is just plain destructive.

capz 12y ago
I see the vanguard is already down-voting. That's fine, but anyone with any knowledge of start-ups should instantly see how the ideas put forth by Piketty are destructive. If I invest in a start-up, that's property. So next year, if the start-up grows and I'm taxed on that growth, I might be forced to sell my private shares to meet my tax obligations. How am I going to do that? And, the year after that, maybe the start-up tanks to a very low valuation, yet I still owe a tax. How is anything supposed to be created in that environment? Or are start-ups somehow special? Do they get special treatment? What about a family farm? Does the farmer have to sell off some land every year to meet his tax obligation? Or does he just continuously raise the price of food every year to offset the wealth tax? I would love to hear some answers from the Marx 2.0 crowd.
- ahomescu1 12y ago
  I up-voted you, I think you make some very good points. There are some big errors I keep seeing in the "tax the rich arguments" over and over: 1) High income and high wealth are not the same thing. People keep mixing the two together (switching between "tax high incomes" and "tax the wealthy" like they're the same thing). 2) Many rich people don't have huge piles of money lying around, but instead own valuable companies or other assets. For example, Mark Zuckerberg owns a large part of Facebook, but that's not directly convertible into its equivalent in dollars. In fact, after the IPO, he had to pay an enormous amount of taxes on that, which was money he didn't have at the time [1]. 1 - http://www.forbes.com/sites/robertwood/2013/12/20/mark-zuckerbergs-2-billion-tax-bill/ http://www.forbes.com/sites/robertwood/2013/12/20/mark-zucke...
  - mullingitover 12y ago
    > In fact, after the IPO, he had to pay an enormous amount of taxes on that, which was money he didn't have at the time [1]. He got that tax bill by exercising his options--he bought shares at $.06 that were worth significantly more, thus giving him a great deal of taxable income. It was in the form of shares, but it was still income. To say he didn't have the money at the time is a bit dishonest--those shares were (and are) highly liquid.
    - ahomescu1 12y ago
      > those shares were (and are) highly liquid. Are they? If he tries to sell all of them, will he get exactly what they're valued at? Selling a quantity like that will probably pull the price down significantly.
      - mullingitover 12y ago
        I'm guessing purchasing all those shares drove the price up, too. Might've been the whole point in buying up that many shares when the IPO was teetering.
        ahomescu1 12y ago
        Interesting, but my guess is something else happened. Since he bought the shares at a fixed price, I assume they came directly from the company itself (how can you buy at a fixed price on a competitive market?). Since he was allowed to do this, I assume those shares were never for sale on the market, so they couldn't impact the price. This is all guesswork though. Anyone here more knowledgeable that can jump in?
  - grifpete 12y ago
    wrt Zuckerberg you are mistaken. You are only liable for tax on a gain when you realize that gain. He became liable for tax when he sold stock and by selling it he had more than the cash needed to pay the tax.
buerkle 12y ago
That article is not too compelling. It talks more about a group of people recognizing a good idea over the original inventors. Sure it took capital to make it a valuable consumer product, but that is hardly a defense of hording large amounts of capital. It ends with "rational investment" = "free market", which worked great for the housing investment market in the early 2000s.
- capz 12y ago
  It is hard to "horde" a large amount of capital. I would say there are only 4 ways it can be done: 1.) Invest in a natural monopoly. That's fine, but most of these are highly regulated (e.g., utilities) and limit your returns. 2.) Invest in real estate. This is rent seeking at its finest. Henry George [1] addressed this issue, but his ideas have not been widely implemented (unlike Marx). 3.) Invest in government debt. I'm always surprised that people like Krugman and Piketty never bring this up, but the fastest way to reverse inequality would be to default on the national debt. The debt is just a transfer payment from tax payers to wealthy debt holders. It is almost like Feudalism. 4.) Buy and hold a nonperishable commodity. Even your example, the housing market crash, is not an example of hording. In fact, it is the opposite. It is the squandering of capital. Piketty might even argue it was a good thing (like WWII) since it reduced inequality. Or at least it did until the government intervened. [1] http://www.henrygeorge.org/whowashg.htm http://www.henrygeorge.org/whowashg.htm
  - buerkle 12y ago
    My fault for insinuating the housing crash was an example of hording. Clearly it was not. I meant that sentence as a critique for the statement in the article that the free market necessarily produces a rational investment.
    - capz 12y ago
      A priori, no investment is "rational." That is, was the construction of 100,000 tanks to export the Communist revolution a rational investment by the Soviet Union? How about the $2 billion in private equity that went into building Facebook, a system designed to let people "like" their friends? The point of a free market is that many experiments are run in parallel. Some of these are deemed rational via feedback. Some fail, and are deemed irrational. A free market is not more rational than a planned economy; however, unlike a planned economy, a free market isn't dependent on a single plan.
dpweb 12y ago
Didn't take the media long after this book came out to trot out old Marx. http://en.wikipedia.org/wiki/Association_fallacy#Guilt_by_association_as_an_ad_hominem_fallacy http://en.wikipedia.org/wiki/Association_fallacy#Guilt_by_as... In the capitalist west in the 20th century, it seems to me we've experienced what Marx envisioned, the struggle (sometimes violent) between the upper and lower classes, again and again. It is possible to be right in your assessment and wrong in your prescription. Strangely enough, I think we're more socialist than we think we are. A huge part of the massive US Govt is pure income redistribution, and even so we're still farther to the right than any European country that comes to mind.
- capz 12y ago
  Marx was wrong. Provably wrong. His ideas were put to the test across various cultures and geographies (Russia, China, Vietnam, Cuba, Angola, etc.). Failed. Failed. Failed. Failed. Failed. And the response to this is that they didn't go far enough. There were still capitalists somewhere. It would've worked if the whole world (echoed here by Piketty's world wide tax) was communist. Perhaps Marx was right in his assessment, but maybe there is no prescription. That is never brought up. Perhaps you're condemned to have a standard of living better than most royals enjoyed a century ago (CAT scans, Internet, Jet Travel - capital, capital, capital) and the price is ennui and jealousy of someone with 2000x more paper wealth. Maybe there is no alternative, or all the alternatives are just a lot worse. In the meantime, I will continue to think that any tax on accumulated capital is evil and label it as Marx 2.0.

by capz 12y ago

capz 12y ago

I see the vanguard is already down-voting. That's fine, but anyone with any knowledge of start-ups should instantly see how the ideas put forth by Piketty are destructive. If I invest in a start-up, that's property. So next year, if the start-up grows and I'm taxed on that growth, I might be forced to sell my private shares to meet my tax obligations. How am I going to do that? And, the year after that, maybe the start-up tanks to a very low valuation, yet I still owe a tax. How is anything supposed to be created in that environment? Or are start-ups somehow special? Do they get special treatment? What about a family farm? Does the farmer have to sell off some land every year to meet his tax obligation? Or does he just continuously raise the price of food every year to offset the wealth tax? I would love to hear some answers from the Marx 2.0 crowd.

ahomescu1 12y ago
I up-voted you, I think you make some very good points. There are some big errors I keep seeing in the "tax the rich arguments" over and over: 1) High income and high wealth are not the same thing. People keep mixing the two together (switching between "tax high incomes" and "tax the wealthy" like they're the same thing). 2) Many rich people don't have huge piles of money lying around, but instead own valuable companies or other assets. For example, Mark Zuckerberg owns a large part of Facebook, but that's not directly convertible into its equivalent in dollars. In fact, after the IPO, he had to pay an enormous amount of taxes on that, which was money he didn't have at the time [1]. 1 - http://www.forbes.com/sites/robertwood/2013/12/20/mark-zuckerbergs-2-billion-tax-bill/ http://www.forbes.com/sites/robertwood/2013/12/20/mark-zucke...
- mullingitover 12y ago
  > In fact, after the IPO, he had to pay an enormous amount of taxes on that, which was money he didn't have at the time [1]. He got that tax bill by exercising his options--he bought shares at $.06 that were worth significantly more, thus giving him a great deal of taxable income. It was in the form of shares, but it was still income. To say he didn't have the money at the time is a bit dishonest--those shares were (and are) highly liquid.
  - ahomescu1 12y ago
    > those shares were (and are) highly liquid. Are they? If he tries to sell all of them, will he get exactly what they're valued at? Selling a quantity like that will probably pull the price down significantly.
    - mullingitover 12y ago
      I'm guessing purchasing all those shares drove the price up, too. Might've been the whole point in buying up that many shares when the IPO was teetering.
      - ahomescu1 12y ago
        Interesting, but my guess is something else happened. Since he bought the shares at a fixed price, I assume they came directly from the company itself (how can you buy at a fixed price on a competitive market?). Since he was allowed to do this, I assume those shares were never for sale on the market, so they couldn't impact the price. This is all guesswork though. Anyone here more knowledgeable that can jump in?
- grifpete 12y ago
  wrt Zuckerberg you are mistaken. You are only liable for tax on a gain when you realize that gain. He became liable for tax when he sold stock and by selling it he had more than the cash needed to pay the tax.

buerkle 12y ago

That article is not too compelling. It talks more about a group of people recognizing a good idea over the original inventors. Sure it took capital to make it a valuable consumer product, but that is hardly a defense of hording large amounts of capital. It ends with "rational investment" = "free market", which worked great for the housing investment market in the early 2000s.

capz 12y ago
It is hard to "horde" a large amount of capital. I would say there are only 4 ways it can be done: 1.) Invest in a natural monopoly. That's fine, but most of these are highly regulated (e.g., utilities) and limit your returns. 2.) Invest in real estate. This is rent seeking at its finest. Henry George [1] addressed this issue, but his ideas have not been widely implemented (unlike Marx). 3.) Invest in government debt. I'm always surprised that people like Krugman and Piketty never bring this up, but the fastest way to reverse inequality would be to default on the national debt. The debt is just a transfer payment from tax payers to wealthy debt holders. It is almost like Feudalism. 4.) Buy and hold a nonperishable commodity. Even your example, the housing market crash, is not an example of hording. In fact, it is the opposite. It is the squandering of capital. Piketty might even argue it was a good thing (like WWII) since it reduced inequality. Or at least it did until the government intervened. [1] http://www.henrygeorge.org/whowashg.htm http://www.henrygeorge.org/whowashg.htm
- buerkle 12y ago
  My fault for insinuating the housing crash was an example of hording. Clearly it was not. I meant that sentence as a critique for the statement in the article that the free market necessarily produces a rational investment.
  - capz 12y ago
    A priori, no investment is "rational." That is, was the construction of 100,000 tanks to export the Communist revolution a rational investment by the Soviet Union? How about the $2 billion in private equity that went into building Facebook, a system designed to let people "like" their friends? The point of a free market is that many experiments are run in parallel. Some of these are deemed rational via feedback. Some fail, and are deemed irrational. A free market is not more rational than a planned economy; however, unlike a planned economy, a free market isn't dependent on a single plan.

dpweb 12y ago

Didn't take the media long after this book came out to trot out old Marx. http://en.wikipedia.org/wiki/Association_fallacy#Guilt_by_association_as_an_ad_hominem_fallacy http://en.wikipedia.org/wiki/Association_fallacy#Guilt_by_as... In the capitalist west in the 20th century, it seems to me we've experienced what Marx envisioned, the struggle (sometimes violent) between the upper and lower classes, again and again. It is possible to be right in your assessment and wrong in your prescription. Strangely enough, I think we're more socialist than we think we are. A huge part of the massive US Govt is pure income redistribution, and even so we're still farther to the right than any European country that comes to mind.

capz 12y ago
Marx was wrong. Provably wrong. His ideas were put to the test across various cultures and geographies (Russia, China, Vietnam, Cuba, Angola, etc.). Failed. Failed. Failed. Failed. Failed. And the response to this is that they didn't go far enough. There were still capitalists somewhere. It would've worked if the whole world (echoed here by Piketty's world wide tax) was communist. Perhaps Marx was right in his assessment, but maybe there is no prescription. That is never brought up. Perhaps you're condemned to have a standard of living better than most royals enjoyed a century ago (CAT scans, Internet, Jet Travel - capital, capital, capital) and the price is ennui and jealousy of someone with 2000x more paper wealth. Maybe there is no alternative, or all the alternatives are just a lot worse. In the meantime, I will continue to think that any tax on accumulated capital is evil and label it as Marx 2.0.