It took me years to realize that economics isn't physics - and it isn't ruled by physics-like laws. Instead, economics is governed by laws created by our society. And what we think of as "free market" is really just norms of trade which are created by our society. There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just a legal arrangement. And there is no reason why the Walton family should continue to be allowed to use offshore corporations to loan themselves money to run all their WalMart stores - that is just a legal arrangement which allows them to avoid taxes and hide their billions offshore. Really, when you start to closely examine "free market", you come to realize that is it a chimera made real by those with power and money.
Zizek phrased it kind of nicely once, in a way that stuck with me. He probably borrowed from somewhere, and I'll continue to lossily reproduce whatever the sentiment was, but it goes something like this.
How is it possible that we are completely and utterly optimistic about breaking all sorts of physical barriers, like landing on Mars, and reusing rockets, and communicating worldwide via little handheld microcomputers, and reattaching body-parts, and aiming to live forever, and do all sorts of crazy biological engineering.
And yet trying to imagine a world were you don't have billionaires having lavish parties while people starve or drone in soul-sucking jobs, or where sweatshops are deemed "bad but better than the alternative", or indeed any sort of radically different social arrangement is seen as hopelessly naive or regressive.
He had better examples, something about a dude with a bifurcated tongue. But the idea stuck with me- what's up with the bounds of our imagination? How come they're limitless when it comes to facing off against gravity, and completely defeatist when it comes to erasing class distinctions?
>what's up with the bounds of our imagination? How come they're limitless when it comes to facing off against gravity, and completely defeatist when it comes to erasing class distinctions?
In my experience, that's only true in America.
People in Canada, Australia, England and Argentina and perfectly happy to discuss and debate ideas and ways to remove (or drastically reduce) class distinctions. Politicians even enact policy to do it.
I think the propaganda of "The Communists" has been drilled into the American public so solidly, it's not only un-American to suggest a change to the status quo, it's also considered utterly impossible.
The US redistributes enough money to the poor to make them richer than the UK, and likely many other wealthy nations in the world. It's not like the US is some Mad Max universe where the poor are forgotten and left without aid.
I'm guessing parent means that the poor in the US are richer than the poor in the UK. (Not sure whether that would be in an absolute sense or relative to cost of living, nor have I verified it in either case.)
Communism happened. It killed lots of people, and made radical changes in the social order unappealing to most. Now ideas don't just have to sound plausible, but you also have to prove that they won't lead to the deaths of millions.
You don't have to prove that ideas won't lead to the deaths of millions at all. Right now there are a bounty of ideas floating around, many the basis of whole civilizations and governments which very possibly could lead to the death of millions if left to finish course. And nary a peep.
What do you believe communism is and how do you believe it goes counter to human nature? It's an impossible thing to discuss without nailing down exactly what it is you are talking about as most people haver wildly diverging ideas of what it implies.
But most people seem to tend to think that communism requires some kind of pure altruism to work (and to be fair, there have been socialist and communists that also believed that), but a central aspect of Marxism is the opposite:
The working class must learn to value its own work and not buy into the subjective moralism of the capitalist classes (that tend to ascribe virtue to wealth: if you're rich, it is generally assumed to be an indicator you have worked hard, while poverty equally is suspect), but be willing to grab the proceeds of their labour. Marx spent a considerable amount of time ripping to shreds early "utopian socialism" (Fourier, Owens et. al) for failing to understand this amongst other failings.
The very insistence of revolution as the mechanism for social upheaval in Marxism is explicitly that Marx did not believe that the ruling classes would be willing to give up privileges willingly even in the face of election defeats, and so once a sufficient working class majority comes into being, sooner or later there would be conflict.
An egalitarian system according to Marx is a desirable, advanced stage of society, but it will come into being, he argues, not because it is the right thing, but because it is the only possible next step: the working classes can only overcome the power of the capitalist classes through sheer numbers, and can unite only because capitalism eventually creates a situation where carving up the pie equally becomes a net improvement for a rapidly growing majority: The rational choice for most of us to maximize our own wealth is an equal distribution the moment the majority of wealth is health by a minority of people, because most of us will otherwise be in the majority that receives less (and for this reason he was insistent that a socialist revolution would fail if attempted somewhere not advanced enough to allow redistribution to eradicate poverty - if it instead merely spread poverty out, class struggles would resume).
Have you heard of social democracy, i.e. taking those ideas and not implementing them by being a murderous crazy dictator? It's working out just fine for the countries which are consistently ranked as the best to live in in the world. As opposed to the US, which is closer to third world status when it comes to things like low median wage, little to no maternity leave, expensive and poor healthcare system, school shootings, poor literacy rates, high drug use rates, etc etc.
I like social democracy. (I was just establishing the burden of proof, not taking a position.)
I'm skeptical that America has enough social cohesion for such a thing to be fully implemented here. Literacy and median wages are fine for the white majority, so we've got most of the trappings of a social democracy for white America. Why would Americans use the state to benefit all people when Americans aren't even willing to put agents of the state on trial when they kill unarmed black people?
First thing that needs to happen to social cohesion in America is stopping focusing everything on race.
Yes, minimum wage affects different races differently. But so does everything else. And one thing I'm pretty sure about : the rich are pushing down minimum wage for reasons that have nothing whatsoever to do with race. Even if the people involved are racists, it still would have little to do with why this is happening. So race is absolutely not relevant to this discussion.
The way this works is that money is being used to make a subgroup of our society desperate enough to do whatever a number of rich folks want them to do, no questions asked. Nobody really cares who's in this subgroup, as long as it's not them and they're sufficiently desperate.
So can we please shut up about whether the amount of melanin in the upper epidermis of some subgroup of the poor is small, medium or large and start talking about the economics at work here ?
The reason I mentioned race is because so many people around here want to ignore it. To ignore it is to ignore the reality that most Americans do not relate with minority groups. Bad news in a minority group is like bad news from the other side of the planet.
If your solution to a problem requires unity, you probably need to find another solution. America is not united.
You seem to accept that the powerful elite will work to push down wages (broadly including providing healthcare and the modern social democratic benefits) but are ignoring the possibility that the quickest and easiest way for them to achieve this is to divide and conquer the poor by race, and its working beautifully for them.
US median wages aren't low compared to Western Europe. Modestly lower than the Nordic countries yes, but modestly higher than France and Germany and so forth.
There's a choose your statistic problem, but it is ~$28,000 or $29,000 (that's based on the estimated median individual wage among employed persons (which I think wage implies employment)).
After government transfers, the bottom income quintile in the US makes more than in the UK and many other wealthy nations. Looking at heart disease and cancer, the US does better, with a less healthy more diverse population than just about every other country (the top ten hospitals with the best cancer survival rates are overwhelmingly in the US), maternity leave may not be mandated, but is available to many if not most. 98% of the US has completed at least 5th grade. And how is the US so different from a social democracy? Massive transfers of wealth to the poor, strong regulations, large government influence in industry, and of course democracy, with strong protections against a "murderous crazy dictator".
The US does well on cancer, but that's because cancer is mostly a disease of old age and the US spends a lot of public money via medicaid on older people.
> The study, the most comprehensive study of literacy ever commissioned by the U.S. government, was released in April 2002 and reapplied in 2003 giving trend data. It involved lengthy interviews of over 90,700 adults statistically balanced[clarification needed] for age, gender, ethnicity, education level, and location (urban, suburban, or rural) in 12 states across the U.S. and was designed to represent the U.S. population as a whole. This government study showed that 21% to 23% of adult Americans were not "able to locate information in text", could not "make low-level inferences using printed materials", and were unable to "integrate easily identifiable pieces of information." Further, this study showed that 41% to 44% of U.S. adults in the lowest level on the literacy scale (literacy rate of 35 or below) were living in poverty.[2]
Here's the explanation for this phenomenon: the former is an example of man versus nature, whereas the latter is man versus man. We're rational animals, so we can try to use our intellect to overcome the insurmountable physical odds of living in an otherwise uncaring universe. However, when we're pitted against each other, we have no such luck.
The standard left wing complaint is that billionaires don't have enough lavish parties, but instead reinvest their wealth in new productive capacity. See, e.g., Picketty, Krugman, or anyone favoring stimulus directed at the bottom of the income distribution. Do you dispute this?
As for erasing class distinctions, consider the possibility that we already have. Imagine telling a person in 1915 about the world today; the children of rich struggling hard in school with the goal of getting a job where they can work hard in order to provide consumption for the poor (who mostly don't work). These rich people will wear the same hoodies and turtlenecks as anyone else, live in moderately larger houses than the poor (or at least in moderately nicer locations), and have virtually no goods and services that are unavailable to the poor.
Would this modern world not count as wildly imaginative?
You are missing a big point. Sure super rich can only utilize fraction of their wealth however rest of the wealth rarely gets utilized to increase productivity of the society. The majority of investments in their portfolios (as per Piketty's carefully collected data) are actually in non-productive activities such as real estate, hedge funds, HFT, derivatives, commodity manipulation and so on. These investments manipulates markets such as real estate to perpetually increase value of their investments without positive impact on society. In fact, from analysis of Piketty's data it was found that if wealthy people only invested in "productive" instruments then their wealth accumulation would dramatically deaccelerate. So the argument that wealthy provides most of their capital for economy to bloom is fairly misleading. They do provide this capital for some GDP growth but it's fairly small part of their investment portfolio. The major portion of the portfolio has singular goal of generating massive passive income perpetually for generations by activities such as artificially limiting supply side or ballooning demand side in markets such as real estate. There are no known social advantage of these kind of investments. Next time when you send that $3000 mortgage payment, put a note there: "wealth transfer for 1%" :). See other comment: https://news.ycombinator.com/edit?id=10829915
How are real estate, hedge funds or derivatives non-productive? A hedge fund or derivative investment ultimately directs productive assets towards real world uses. If the wealthy are getting high returns from this (and Picketty claim the wealthy get the highest returns), then the wealthy are better at directing real investments to their most productive use.
Could you point me to the place in Picketty where he does more than speculate about how the wealthy gain more wealth?
These investments manipulates markets such as real estate to perpetually increase value of their investments without positive impact on society.
You seem to be confusing middle class NIMBYs (the main people manipulating real estate markets) with the very rich. Middle class homeowners are the ones preventing new construction, it's the wealthy developers who are trying (and failing) to be productive.
Money invested in real estate doesn't get used to manufacture goods and services or start industry or research or education or anything good for humanity. It's "sleeping money" as far as economy is concerned. In fact, it's worse because as more and more real estate gets owned by super rich and their investment arms, it puts more pressure on middle class by having to cut higher and higher portion of their income on mortgages and lowering their lifestyle standards, savings and risk taking abilities. As per some reports, as much as 30 to 70% of super rich portfolio gets directly in to real estate investments. As they buy up premium estates in major cities around the world, supply gets constrained, more people gets priced out of home ownership and must agree to pay ever increasing rents to those investors. It should be bewildering to anyone that this situation exists even though population hasn't been increasing much in western countries. This is known as "economic rent" (look up the term in Wikipedia) where investor strives to create a setup that passively generates income ad infinity without contributing to society. It's essentially creating generational entitlement system whereby suddenly usual economics like "you get what you worked for" no longer applies. The real estate has been primary tool for centuries to add phenomenal gains in to most of the super rich wealth and Piketty's data shows that it is the primary reason why wealthy are acquiring more wealth at rate much higher than overall GDP increase. It's hard for most people to see this because many times they are home owners benefiting from this while in reality they are not and also because they don't realize that real estate is basic human necessity just like air and water. No one wants Chinese billionaires or entities like Blackrock to buy up all of the water supply, inflate its price and then ration it to people with bidding wars. So the assertion that as super rich gets more richer, they benefit society by starting industries is pretty misguided. So far the data shows that this kind of productive investment has much lower returns than non-productive investments because of higher risk factors. So if rich were doing only doing productive investments, they would not be able to acquire more wealth at current pace.
You seem to believe the rich have the ability to somehow buy up all the supply of some good (land, water) and then arbitrarily raise the price.
As they buy up premium estates in major cities around the world, supply gets constrained, more people gets priced out of home ownership and must agree to pay ever increasing rents to those investors.
You are deeply confused. Buying up housing does not reduce the supply of living space; similarly, a rich person investing in a copper mine does not reduce the supply of copper. If the rich person makes improvements (e.g., buying land and building flats on it, buying a copper mine and expanding it) then they increase the supply.
Again, where in Piketty's book do you believe he shows that the rich buy up and artificially limit the supply of a scarce resource? Please cite a page #.
When there are 100 houses and 100 buyers in market, demand and supply is met and likelihood that transactions will yield fair prices is high. When investors from China and Wall Street descend on markets, you suddenly have 200 buyers and only 100 houses in market. If you live in a major city in western world, go meet the real estate agent nearest to you. Ask them how many bidding wars happen and how many deals are all cash. Most all-cash deals are almost always investor purchase. This is the reason (along with local laws on new construction) why we have housing inflated by massive 10% a year even though population gain is all but negligible. The result is that typical family now pays huge chunk of their income in highly inflated mortgage payment which is nothing but wealth transfer from them to super rich who hogged up critical resource in the hope to increase their investment return.
You are conflating supply of housing with real estate speculation. You might as well complain that GOOG is up $750 and AMZN is $630; this is completely true, but it doesn't make searching the internet or buying stuff online cost more.
He may be doing that, but he is not alone: the government has spent the past 8 or so decades trying to conflate the two in everyone's mind, and at this point, the only way to keep that up is to make housing into a de-facto collectible by strictly limiting its supply. This means that all those terribly high housing costs in SF are mostly economic rent, which is not productive and also tends to increase inequality. But that's not a problem caused by billionaire business owners, for the most part. It's caused by upper middle class worries about their speculative investment and the schools their children would go to, and the resulting regulatory capture.
They use the same iPhone, have access to the same chemo, and watch the same movies. The only difference is they fly in private planes instead of commercial, drive high end Mercedes instead of Fords, live in mansions instead of apartments. But their HVAC cools just the same as my window unit, it's just quieter. Yeah, they have lots of things we don't. But the difference is smaller than between a rich person in 1915 and a poor person today.
I think the life of the ultra rich is fundamentally different to the average middle income person in the same way that royalty lives a different life to a commoner. Sure we all breath, eat, sleep and procreate, but the differences in the concerns of the ultra rich and the rest of us is quite large.
A poor person today is richer in many ways to the rich of 1915 thanks to technological advance, but there still is a huge gap between the opportunities of the poor today and those of the ultra rich.
More fundamentally I just don’t think it is good for the ultra rich to live a life that is so different to the rest of society. These people have an enormous amount of power and it is not good for the rest of us if they live a life detached from the worries and concerns of us common folk. You just can’t make good decisions on the basis of bad information and if this is formed from the worries and concerns of your ultra rich friends and you then you are going to end up with a warped perspective of what life for most people.
> More fundamentally I just don’t think it is good for the ultra rich to live a life that is so different to the rest of society.
Why not? So Jay Leno has a 10,000 sqft garage and 500 cars, what do I care? Tom Cruise doesn't affect my daily life. Politicians do, and most of them are rich but not ultra rich.
People will always have a warped perspective of others, that's just how the human brain works. In fact we discuss that on HN frequently, how Silicon Valley can seem so clueless solving "white first-world problems".
The reason why I mention in the next sentence - the ultra rich have a lot of power. I want the powerful to understand how us commoners live.
The ultra rich have a very large influence over politicians. This is why they are important. If they just spent their time flying around in private jets and talking to each other then it wouldn't matter - once they start to have a very large influence over public policy it matters what they think.
As a non-member of the ultra rich all I can do is look in on the peeks they give us via the media. I am willing to admit that it is possible that they are exactly like you and me, but they certainly don't appear to be.
In regards concrete claims the ultra rich appear to far more to the economic right than the average person. I am sure you are aware of this.
Lots of groups are far to the economic right of the average person. For example, this is probably true of people who subscribe to Scott Sumner's blog.
Is it therefore reasonable to say "I think the lives of people who read Scott Sumner's blog are fundamentally different to the average middle income person in the same way that royalty lives a different life to a commoner"? If not, why not?
> In regards concrete claims the ultra rich appear to far more to the economic right than the average person.
Are you sure that's true? It may be, but there are certainly plenty of counter-examples. Gates and Buffett immediately come to mind, as well as presumably many of the people on this page: http://givingpledge.org/
I am not to sure how to the left Gates and Buffett actually are, but they are really good examples of ultra rich with the perspective of the upper middle classes. Unlike the hereditary ultra rich, they are self-made men who grew up in upper middle class families. The fact that they want to give away their wealth rather than pass it on to their children is a sign they recognise the morally corrosive nature of inherited wealth.
If I were asked I would be keen to lower taxes on incomes and raise taxes on inheritances. We really don’t need a self-perpetuating parasitic overclass.
How come they're limitless when it comes to facing off against gravity, and completely defeatist when it comes to erasing class distinctions?
The key distinction in this problem is between overcoming fixed barriers of nature and overcoming the dynamic, highly adaptable nature of human beings. Personally, I don't believe we're ever going to come up with a fixed set of laws that could constrain the infinite range of human behaviour to the realm of fairness and make cheating impossible. At least not without eliminating all freedom for everyone.
I was under the impression that Keynesian economics is/was said limitless facing off against gravity. However as was already mentioned, when these sort of experiments go wrong (e.g. Communism), they tend to go terribly wrong. It would be nice if we could actually perform these experiments on a local, entirely voluntary scale however the Fed seems to have captured that market already.
If "free market" has any coherent and muscular meaning, it is as an alternative to those in political power assigning the equivalent of royal patents to pursue markets.
So any rents-ey looking use of the political process is not free market no matter the wealth of those practicing it. This is what need work.
Wal-Mart in specific originally hired women in rural areas at a wage appropriate as a second income. Their husbands worked at an industrial or agricultural job.
Then they went through an explosion, but as the South Park says, the soul of every Wal-Mart is a mirror. The ag. or industrial job isn't there any more but by sheer momentum, that's the deal.
Wal-Mart is also not exactly a sentence of eternal penury - people who stay a few years, just by self-selection can move up the food chain. I'm not current, but a department manager made enough to raise a family very frugally. A store manager made pretty decent money.
The reason it's Wal-Mart and not Sears is decades of hard work at the logistics end - Wards and Sears shipped by train, even in the '60s. Wal-Mart just overran them with trucks.
But in a way, what's waiting for the end of Wal-Mart seems worse - Amazon. The labor component of production of goods is still disappearing.
The problem for economics as it's become very mathematical
and technical is that the intrinsic beauty and rigor and appeal
of the models themselves have become an attractor - something
that research gravitates towards. [...] There is a great attraction
in these types of models; they create a world of equilibrium,
a world of stability almost by accident - they are just a consequence
of the model, and it's a beautiful and seductive world.
Not the OP, but I think a lot more people nowadays should read (or re-read) Locke's "Two Treatises of Government". That book is famous mostly for the second part, where Locke actually intellectually imposes private property as a thing in the Western world, but I found the first part equally interesting, where Locke fights against a guy called Filmer, who was of the opinion (prevalent until then) that all property was rightfully owned by the King, transferred to him from generations past since Adam.
The thing I'm trying to say is that yes, private property is just a social construct, there's no divine nor moral thing about it, the concept came alive (so to speak) only because some guys in England didn't like that their possessions were in danger of being confiscated by the King's men.
In the end private property is indeed theft, more exactly the imposition of someone's moral values over the other's by intrinsic force (if you "steal" you might go to prison or worst). The sooner we realize this the better, there's no second-guessing about it.
Locke also wrote that "For this "labour" being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good left in common for others."
Which, I think, is the central issue regarding property rights and inequality. We should question all rent generating property rights, just as Locke did, and try to find a system of propert rights where rent doesn't create inequality.
Taxation seems to be he popular approach, but why not try to redefine the rights all together? What if such property rights were time limited, and came with a fee equal to the rent potential?
There are two components of private property. 1)the raw materials (or land) 2)the labor (or improvements).
I agree with your stance on component 1. The raw materials, the land, they do in fact manifestly belong to everyone.
On component 2, the labor or improvements, I don't think those do belong to everyone. They belong exclusively to the creator who can transfer title. In fact, society has no moral claim on this component at all in my estimation.
Here is my idea. Stop funding society by taxing labor. It's counterproductive. It's morally wrong. Tax material and land use. This is what society truly has a claim on and how society should fund itself.
> In the end private property is indeed theft, more exactly the imposition of someone's moral values over the other's by intrinsic force (if you "steal" you might go to prison or worst).
What you're pointing out is a monopoly called "The Legal System": a single dispute resolution system everyone must adhere to without choice (Government/Mafia). This monopoly is often based on geolocation. Property will be inherently aggressive if one is forced to use a specific dispute resolution system.
Everyone withholds stuff from others: it is 100% universal. In this way, the notion of "property is theft" can not hold because everyone (even animals) do it: consciously or subconsciously.
There is then the system of dispute resolution. This defines if a particular act of withholding was an act of "theft".
The combination of withholding + dispute resolution results in what we call property.
Competing dispute resolution systems is really that free-market people hope for. Dispute resolution systems do not have to be based on geolocation. In fact, people form millions of these unique systems every day, freely, without resorting to monopolies or the lowest of low dispute resolution: killing one another.
> The sooner we realize this the better, there's no second-guessing about it.
So ya. Property in and of itself is not theft. Forcing others to use a specific dispute resolution could be viewed as the theft.
> In the end private property is indeed theft, more exactly the imposition of someone's moral values over the other's by intrinsic force.
I'm curious how that follows? Many actions require force but are not theft (depriving someone of rightful resources). If your 'moral' values deprive someone of their own rightful resources you probably deserve to have some intrinsic force applied. In that way private property would seem to me to be close to a moral good.
Private property can't be "theft" if there is no private property.
If you don't believe in private property, you're sort of poisoning the well of any economic conversation, since it's the foundation of basically all of peaceful civilization.
Without private property there is only tribalism and, "might makes right."
I'm not sure this is much of a counterpoint. The Inca didn't have a centralized currency, but we really don't know whether they had private property or not, how disputes were handled, or so on. They also seem to have had civil wars, child sacrifice, and other violent traditions.
That being said, many things are possible in groups with smaller populations, I've heard stories of large communes being fairly successful with up to several thousand people. However, at some point they tend to become too disorganized and break down, in one way or another.
In contrast, the concepts of private property and trade have enabled our human family to grow to 7 Billion, and population growth is barely even slowing down yet. Civilization allows things to work on an entirely different scale by providing a somewhat standardized framework for our territorial disputes.
This is also the most non-violent time in history by far, according to researchers, presumably due to the end of tribalism.
So, for me personally, there would have to be extremely compelling arguments to even begin to argue against the utility of private property as a social and economic system.
You can absolutely avoid it. Inequality was so much less in the 1950s/1960s and we still had police and property.
The disconnect here is that property rights are "more guidelines than actual rules", they are quite literally "made up". It used to be that keeping a black person out of your store was a "property right", until we decided it wasn't, and then we got rid of that one. It used to be that preventing airplanes from flying over your farm was a "property right" until it wasn't, and then we got rid of that one. You can only do that if "property rights" are artificial.
I mean just look around you. We live in a world where Smartflash has a "property right" to your in-app purchases, Apple has a "property right" to your iPad, JSTOR has a "property right" to publicly-funded research, etc. etc. That's because we made it that way; let's unmake it, and do it differently!
Not sure about whole planet but I do realize that previous generation in USA had much higher savings rate, lower student loan, much lower mortgage to income ratio and much higher probability of retirement in 50s/60s. I have never heard people from that generation believing that they were less better off financially than we do, although we do benefit from natural evolution in technology and science.
It seems like we probably benefit from an arrangement where we control the things in our immediate surroundings that we need in order to maintain reasonably stable and predictable lives. For instance it makes sense for me to control access to things like my glasses, bike, pajamas, etc. Property rights work pretty well for defining that arrangement.
At the other extreme, we have situations where property rights can be overridden, such as taxation and eminent domain, and entities whose value depends on a stable money system provided by the government -- I see no a priori reason why the workable way to manage those things is not through a system of limited property rights. In broad terms, one such limitation is an agreement that taxation is not a violation of a fundamental human right.
The more abstract and artificial "property" gets, the more reasonable that property rights are balanced against other things, such as redistribution.
This is the core of our system. And that system will always generate inequality.
Sure, and to the extent that it works, it's OK. When it doesn't work, then it seems reasonable to manage it in order to make it work better. Some broad-brush ideas are for the government to provide a functioning money system, and a way to redistribute wealth against the tide of inequality.
As a useful legal fiction subject to the same limitations as others of its genus, sure.
As a natural moral right? Not in the slightest, because there ain't no such thing. The history of "ownership" of any given thing today is basically a history of force, fraud and the occasional lucky break. Who should own a piece of land? What moral claim do they have to it? The very best that can be said today is that they can trace a chain of transfers back to the person who most recently was able to stay on that land without being forcibly put underneath it by someone else. What kind of grounding for a supposed moral good is that?
So I believe in Thomas Hobbes' conception of the state of nature -- namely, that there are no rights, no virtues, no morals, nothing but all-out war for resources, where what is "yours" is what you can take and keep by violence -- and in his conception of government as what we introduce when we get tired of that, and that this arrangement is better than the "war of all against all" even though it comes at the expense of sometimes having the government decide that "my" property could be put to a better use.
Could you post your address? I'll bet you have a lot of stuff that other people could use, and since you don't believe in property, you surely won't have any objections to them taking it.
Hobbes's thesis is ridiculous, and has been refuted at great length by many over the centuries. I see no need to go over well-trodden ground yet again, but here are a couple of points:
If you accept his arguments, you're basically advocating a dictatorship (or his era's equivalent, a king ruling by "divine right").
For another, his notion that humans are motivated purely by ego and self-aggrandizement is demonstrably wrong.
Posit a "desert island" scenario in which an adult is marooned with a small child. Assume that rescue is impossible (or at least wildly unlikely). No legal repercussions to worry about.
The child has collected some fruit, clams, or whatnot.
The adult is hungry.
In this situation, a Hobbes person would simply take the food from the child.
While there certainly are some real people who would do that, most of us would not. They would prefer to collect their own fruit and clams rather than take them from the child by force.
Even if there weren't enough food to go around, many would give the food to the child and choose to go without themselves.
As with many political theories, the Hobbes model says rather more about its originator than it does about people in general.
Remember that Hobbes was writing at a time when philosophers liked to consider a "state of nature" -- the behavior of people before organized society, government, etc., come into being.
Many of these philosophers, including John Locke (who Jefferson cribbed heavily from when writing the US Declaration of Independence), wrote as if the morals of Enlightenment-era westerners would magically naturally exist in people living in such a "state of nature", and simply took them for granted.
Hobbes pointed out that this was balderdash. Our entire conception of propriety, of right and wrong, of what is or isn't acceptable, comes not from some natural moral law engraved into our hearts or deduced in an ideal pre-society state of pure reason, but rather is inculcated into us by the culture in which we live. So Hobbes dismissed the idea that people would be respectful and helpful in the "state of nature" and pointed out that, since that stuff only comes into being later with organized society, none of it would exist at that point. Hence the war of all against all.
Which is where your desert-island analogy, and most other attempts to tear down Hobbes' state of nature, fall apart: your stranded people come in with experience of an organized culture which taught a particular set of morals and norms. One of those norms is that the adult should go hungry to let the child eat, but there is no guarantee that some natural moral law written in the adult's heart would have produced the same outcome absent years of indoctrination in a particular culture's moral system (and in fact, in actual nature we can find examples of animal species where adults will kill and even eat young of their own species).
There are different kinds of property rights. We have intellectual property - the use of state force to impose the idea that information is scarce when it is naturally not - we have real estate, where an arbitrary box of space relative to planet Earth is assigned to you - and we have traditional goods, where you can have an apple and claim it is yours.
The first two are complicated, because they are extremely political. To own geographic space is entirely divisive from owning just the dirt under a house, or the physical material that composes it. To own an idea, a trademark or a patent, is to assign exclusivity to thoughts. Its much easier to say "we have scarce goods, so those that create them can sell them, and the buyer owns it". Its why I think goods property is a good thing, but our attempts to strong arm real estate and IP into the same formula is a cause of constant economic tension because they aren't a good fit.
Just in this context for reference, I'm an IP abolitionist and think we should adopt homesteading of property again. Both forms of state granted monopoly to space and idea are being rampantly exploited by market forces and were conceived of in an age when technology did not enable the information exchange we have today. It would have been much more complicated to verify usage of a plot of land a hundred years ago than it would now, to know who previously owned it and for how long it has been unused before you could claim it as your own.
Clearly the parent does not believe in property rights when they believe unskilled non-differentiated labor should be rewarded with above market rates by force and at the expense of Walmart's shareholders.
That individuals believe government should be directed at investors who risk their property to create wealth in order to take by force that property to redistribute it is perhaps the most offensive sentiment.
> There is no reason why the bulk of the billions taken-in by WalMart should go to the Walton family while their employees live on food-stamps - that is just a legal arrangement. And there is no reason why the Walton family should continue to be allowed to use offshore corporations to loan themselves money to run all their WalMart stores - that is just a legal arrangement which allows them to avoid taxes and hide their billions offshore
I can think of about a million sentiments more offensive than the idea that people who invest should be taxed and that we should have a social safety net.
Ha, there aren't a million other sentiments in the grandparent comment.
No one is arguing the value of the social safety net. The comment goes above and beyond the safety net suggesting it shouldn't be needed and the remedy is redistribution. A safety net is one thing but arbitrarily inflating wages is another.
I don't believe the suggested remedy would be proposed by someone who believes in property rights. Further, as a person who believes in property rights I do find the sentiment of theft of property for redistribution offensive.
I am opposed to social wealth re-distribution or the idea that one should not be able to filthy rich. However we need to make sure that balance of level playing field is maintained (for example, education and healthcare remains affordable for all), political power doesn't get bought up by few and necessities such as real estate doesn't become investment tool to artificially constraint supply and inflate prices.
Not quite the same sentiment and you have mis-attributed the quote.
If a violent revolution comes, I'd be thinking more about those pervasive comments touting a belief that theft of private property is somehow justified. I'd suspect those making such comments would be a little more regretful to see their rhetoric fulfilled.
If you truely believe in property rights, you will get in big trouble from philosophical point of view. For example, if you live in US then very likely you will need to surrender your property to last know Native Amarican owner :). In Saudi Arabia, the ancestors of Saud family declared entire country as their private property. The result was that when oil was found there in 1930s, about 2/3 of the income was used by Royal family as their private income to build legions of palaces with elaborate gardens while millions of poor people went without food. Even today Saud family has about 5000 Royal princes, each one with their giant share of country's fortunate based on ancestral claims. This is ofcourse not new to Saudi Arabia. Most of the Monarchs all over the world believes entire country was their private property and people living there was just happened to bestowed the permission to stay there. How does property ownership philosophy sound now when you take it extreme?
But you choose to ignore the other extreme. I mean that of 100% abolition of property rights, i.e., a recipe for anarchy. Of course you can truly believe in property rights when they are set according to an evolved legal constitution. That's how human beings work to form a better society. There is no such thing as 'trouble from a philosophical point of view' unless one thinks that the space between ALL and NOTHING is blank.
I'm not against property right at all. I was just making logical argument to poke holes to show that something is at miss in asserting in its puritanical form. The property rights are generational because of ability to transfer those rights. This immediately establishes generational lock down if resources are limited while keeping less fortunate out. This applies to resources such as real estate and political power however not to resources that are unlimited such as creativity and innovation. A large number of people currently live in poverty because there is simply no way for them to acquire education, nourishment or healthcare because they couldn't chose their parents correctly. This doesn't necessarily imply re-distribution of wealth or socialization programs or welfare state or guaranteed basic income or even charities as the solution. In fact, they are almost certainly not the solution. I think we do not yet have correct model for economic rights and rewards established for modern human society. It is also likely that purely economic solution does not even exist given the innate human nature. In that case, the technology might be our only savior where by one day we can have virtually unlimited energy source and robotic savants to create age of abundance.
That's absolutely true. But while physical laws just exist, "economic laws" are a complicated combination of biology, psychology, social norms, the legal system, etc.
You can tweak the rules, but you can't run calculations that predict the results. Some of those legal arrangements might be unjust, but their results might be net-good all the same. We can, and should, keep evolving the social bargain, but upending it completely is very dangerous.
It's interesting that you faced this issue and came away with the exactly wrong conclusion. Economics is, at root, a physics problem. There's no way to get around that. Every aspect of the field comes down to asking questions about physical resources and their uses.
People can attempt to ignore the fact that economics is a special application of physics, but they can't escape the consequences of ignoring reality forever. The belief that it's all just conventions and cultural agreements is exactly like believing that the Moon is just a bedtime story.
> Every aspect of the field comes down to asking questions about physical resources and their uses.
Nope. Moving 200 million in rock or 200 million in a paper check (or even a promise-based conversation). The extractable amount/usage of Labor and Resources outstrip the human ability to account for it. This has less to do with physics and more to do with "accounting". Without accounting you cannot have negative wealth, for example. This is not tied to physics. This is based on social contracts...all the way down to the currency.
I am a little interested in this physics-based economy you speak of.
What you are referring to is more the traditional distinction between the materialists (i.e. Marx) and those that believe in market forces (i.e. Smith).
I don't understand the hate against Walmart. It only has a profit margin of 3.12% [1] and return on assets of 7.69%. Now I suppose you could argue that all the profits are hidden away somewhere, but that sounds like an unfalsifiable statement. It certainly would be illegal to hide assets from shareholders.
You're talking to someone who has spent most of his life in the Fortune 50 - working with executives who routinely hide the bulk of their wealth from any accounting. These techniques have been widely discussed in the press (if you look). So I must assume that you have, for philosophical reasons, chosen to disbelieve that the rich hide their wealth.
Edit: Not sure why I was downvoted. But I was in the room as we reassigned profits to offshore entities for accounting purposes. And I was in meetings with our senior executives who were arranging to pay themselves in undervalued offshore stocks "off the books". Those offshores provided inflated services and inflated goods to the corporation and avoided taxation while making the executives rich. The value of those offshore stocks was "reinflated" with a phone call. And that is just one company - the Big 3 accounting firms provide these services routinely for both the corporation and its executives. (And when we reassigned profits that had the effect of lowering profits - and even making income disappear. I've seen these techniques used at more than one company.)
There is IRS accounting and GAAP accounting. You try to reduce profit for the former and maximize for the former.
Off shoring subsidiary profit shaving is a fairly common practice for IRS accounting. But all the profit stays on the corporate parents books in one way or another (they own the subsidiary). The point isn't to make the executives rich, but to make the shareholders richer by avoiding taxes.
Paying people in undervalued stock is common, but "off the books" sounds illegal. I don't know what that means.
Also most companies would never sell shares of it's subsidiaries. They like having total control of the subsidiary.
Big 4 firms wouldn't fuck over shareholders to get executives rich. Executives are small fish compared to the sorts of institutional investors who own F50 companies.
It's the Big 4 instead of the Big 5 because Arther Anderson got caught cooking Enron's books. It destroyed the firm. They aren't going to risk their entire business for some Walmart execs worth a couple million dollars.
F50 executives aren't the people who actually own the world. They are people who work for the people who own the world. If the executives are stealing, it's not something that is accepted. If found they'd be totally fucked.
Through tiny portions of the stock. For mature public companies, executives own very little of the company unless they are founders or heirs of founders.
He's not saying the rich don't hide their wealth: he's arguing that corporations do not report artificially lower profits and then proceed to deny returns to their wealthy owners.
Whenever I have a chance to learn some of these legal means of avoiding excessive taxation, I do in earnest. I see very wealthy people and it only drives me to emulate their business and investment strategies more. There are more than enough legal means of structuring your businesses, transactions and investments in ways that drastically reduce taxation. I made it about 4 years without paying any state or federal income tax. True it took a lot of work and planning, but the income retained was more than worth the effort.
I think people are uncomfortable with the fact that despite of razor thin margins, multiple members of Walton family are in top 20 most wealthiest people on planet while majority of their workers lives on conditions that borderlines poverty. So somehow mass accumulation of wealth was possible at all but the top. Logically, this argument is weak because even if you redistribute all wealth from top, each employee would gain barely a one time payment of $10,000 just due to massive size of Walmart and would not significantly improve their condition over long term. So wealth re-distribution is not the cause of poverty of Walmart condition.
Perhaps you should read up on it's labor practices. Two cases in point: They encourage their employees to sign up for food stamps, which results in a $6.2B government subsidy[1]. Also, the workers are intentionally paid so little (via only part-time employment) the company asks customers to donate food to their employees.
I know this was a week ago you wrote this but I only today came across this essay by Georg Henrik von Wright called "Humanism and the Humanities" that I think is apt.
In §13 he says (and I'm going to quote the thing in full),
<blockquote>I shall now advance a thesis which I am sure many will find controversial but which I think is true and, moreover, crucial for understanding the methodological status of the humanities and the relation of the humanities to the sciences of nature. The thesis goes as follows:
Just as natural, i.e. non-intentional phenomena are 'governed' by natural laws, i.e. principles which tell us either what will invariably or in statistical average be the case under in principle recurrent and repeatable circumstances, in an analogous manner intentional phenomena are 'governed' by normative rules which tell us what people under given circumstances are (or were) expected or allowed or practically necessitated to do. I am, in other words, pleading for what might be called a 'methodological parallelism' between natural laws on the one hand and laws and other societal rules on the other hand. I am inviting you to see the difference between the humanities and the natural sciences in the light of the difference between the factual and the normative, between rules which state how things in fact go and rules which ordain how they should go according to the conceptions of those who instituted the rules.</blockquote>
Oh come on. I've started a manufacturing business with my smarts, a hammer, a tape measure, and a saw. In 5 years I will sell it for several million dollars.
When a convicted felon can do that, the argument that we don't live in a Free Market doesn't hold any weight, imho. A person can find a need, build a business around it, and become powerful and have money.
Yes, exactly this. We choose the rules, so we can push to have rules that don't have those people on food stamps. Unfortunately when you bring this up, most people can't countenance it.
