"Socialism" and "capitalism" are the same

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Ranbot
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Re: "Socialism" and "capitalism" are the same

Postby Ranbot » Fri Jun 15, 2018 5:39 pm UTC

Tyndmyr wrote:...real world countries, you do run into some definitional issues as far as what countries are capitalist, and which are socialist, as real world examples are fairly messy. ...the Heritage organization's measurements... They rate countries such as Cuba, North Korea, etc poorly in economic freedom...

You [and others] might find this podcast about North Korea's capitalists interesting. https://www.npr.org/sections/money/2017 ... apitalists
(NPR's Planet Money Episode #800, if you have a preferred place to listen to podcasts.)

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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Fri Jun 15, 2018 5:51 pm UTC

I find the North Korean economy fascinating in general. In part, I suppose, because of how limited a lot of information is on it outside the country. Inaccessible stuff always has a certain cachet to it.

Will definitely listen to it when I have a moment!

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Re: "Socialism" and "capitalism" are the same

Postby Ranbot » Fri Jun 15, 2018 7:58 pm UTC

Tyndmyr wrote:I find the North Korean economy fascinating in general. In part, I suppose, because of how limited a lot of information is on it outside the country. Inaccessible stuff always has a certain cachet to it.

Will definitely listen to it when I have a moment!

Agreed...It's fascinating to get a window into that world. The episode hits many of the dichotomies of NK's flavor of socialism*, their isolationism, natural/spontaneous entrepreneurship, social fabric/culture, government control/crack-downs etc.

* - To the proponents of socialism reading this, I know full well that NK socialism is a beast that does not represent western concepts of socialism. Even so, there's valuable information to be gleaned from NK's example.

If you like that episode, Planet Money also had one (Episode #337) about the historical roots of China's embrace of capitalism [in their own unique way, of course]. It's a history that goes WAY back to the 1970s! :lol: But (edit) it starts with a poor farming village on the brink of starving who become the model for the rest of the country, and because that history is so recent they can interview people from that village who created that change. Link: https://www.npr.org/sections/money/2018 ... rmed-china
Last edited by Ranbot on Fri Jun 15, 2018 8:12 pm UTC, edited 1 time in total.

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Re: "Socialism" and "capitalism" are the same

Postby trpmb6 » Fri Jun 15, 2018 8:00 pm UTC

All I can do is work off of my personal experience. In 10 years I have been able to match the wealth my parents generated in 40 years. Is that possible for everyone? No. Especially not if they weren't willing to take the steps or risks I took to get where I am. Did I have an advantage that others do not? Sure. I was raised in a mostly stable middle-class household (my parents divorced when I was quite young but mother remarried to a wonderful man who raised me as his own). Neither of my parents were college educated, but I am. They were unable to pay for any of my schooling though. I had to pay that all on my own (which I am actually quite thankful for, that taught me a great deal of responsibility and forced me to focus on schooling since I knew I'd be saddled with debt upon graduation). So yes, I had an easier jump start than most.

But I think that's kind of the point to be honest. I think it should be the goal of parents to help jump start their kids so that they can rise up and be better off than they were. I see very tangible evidence that my children are far, far better off than I was as a kid. And that is what drives me every single day. My only hope is that they are able to take the foundation I've laid for them and propel even higher than I can hope.

That is why I support capitalism. I personally do not believe that I have exploited anybody in anything that I have done to get where I am. Someone may come up with some link to some distant relative of mine and try to use that against me. So be it.

I do feel bad for people who have all the qualities that would make them an exceptional person in society, whether it be business, government or otherwise, yet find themselves in untenable positions that are not within their control. We should do everything we can to help bring them up as this is a greater benefit to society. This is why I support programs like Big Brother, Big Sister.

My one real gripe with socialism is what happens when you have one person who is extremely passionate about what they do, gives everything 110%. But the guy next to them is only giving it 75%. What do you do then. That is really the one struggle I have always had with pure socialism.


Edit: It did take a lot for me to admit that I was privileged in my youth which helped spring board me. I generally don't view such things as a privilege per se. Particularly because, as I was growing up, I viewed my world as the potential "floor" in life. I was always the "poorest" (I use quotes because we were clearly not poor) kid in my circle of friends (wasn't until I was much older ~high school, that I began to realize this was a very flawed view). I had many friends whose parents were all much more affluent than my own. It didn't take long for me to put two and two together to understand what I needed to do to achieve the results i wanted in life. I've since achieved far more than I ever really imagined and I don't intend on stopping that progress.

edit 2: I should probably just delete this so I don't cause drama...
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Re: "Socialism" and "capitalism" are the same

Postby Pfhorrest » Fri Jun 15, 2018 9:59 pm UTC

trpmb6 wrote:
Spoiler:
All I can do is work off of my personal experience. In 10 years I have been able to match the wealth my parents generated in 40 years. Is that possible for everyone? No. Especially not if they weren't willing to take the steps or risks I took to get where I am. Did I have an advantage that others do not? Sure. I was raised in a mostly stable middle-class household (my parents divorced when I was quite young but mother remarried to a wonderful man who raised me as his own). Neither of my parents were college educated, but I am. They were unable to pay for any of my schooling though. I had to pay that all on my own (which I am actually quite thankful for, that taught me a great deal of responsibility and forced me to focus on schooling since I knew I'd be saddled with debt upon graduation). So yes, I had an easier jump start than most.

But I think that's kind of the point to be honest. I think it should be the goal of parents to help jump start their kids so that they can rise up and be better off than they were. I see very tangible evidence that my children are far, far better off than I was as a kid. And that is what drives me every single day. My only hope is that they are able to take the foundation I've laid for them and propel even higher than I can hope.

That is why I support capitalism. I personally do not believe that I have exploited anybody in anything that I have done to get where I am. Someone may come up with some link to some distant relative of mine and try to use that against me. So be it.

I do feel bad for people who have all the qualities that would make them an exceptional person in society, whether it be business, government or otherwise, yet find themselves in untenable positions that are not within their control. We should do everything we can to help bring them up as this is a greater benefit to society. This is why I support programs like Big Brother, Big Sister.

My one real gripe with socialism is what happens when you have one person who is extremely passionate about what they do, gives everything 110%. But the guy next to them is only giving it 75%. What do you do then. That is really the one struggle I have always had with pure socialism.


Edit: It did take a lot for me to admit that I was privileged in my youth which helped spring board me. I generally don't view such things as a privilege per se. Particularly because, as I was growing up, I viewed my world as the potential "floor" in life. I was always the "poorest" (I use quotes because we were clearly not poor) kid in my circle of friends (wasn't until I was much older ~high school, that I began to realize this was a very flawed view). I had many friends whose parents were all much more affluent than my own. It didn't take long for me to put two and two together to understand what I needed to do to achieve the results i wanted in life. I've since achieved far more than I ever really imagined and I don't intend on stopping that progress.
edit 2: I should probably just delete this so I don't cause drama...

(Spoilered for length, but quoted in case you do delete it, which I don't think you need to).

The big misconception about socialism today is that it has to involve continuous forcible redistribution, always taking from those who have more to give to those who have less, which does create concerns like those you worry about, the guy giving 110% percent being taken from to give to the guy giving it only 75%. There are some conceptions of socialism that might work like that, but the kind that most self-avowed socialists today advocate is the kind where different amounts of effort in life does result in a different quality of life, so nobody gets to coast at 75% on unearned advantages while other people give it 110% just to stay in place against the unearned disadvantages dragging them down. It's about removing the factors that push the rich richer and the poor poorer by virtue of them being rich and poor, making a level field where people's work is fully rewarded in proportion to its quality.

With regard to your family history, I'm not at all surprised that you were able to make more than your parents in much less time, precisely because under capitalism, the wealthier you are to start the faster you can accumulate wealth. If your parents came from a much poorer background than you do, and took 40 years to build up the wealth you were born into, then you have much less to overcome and can pocket much more of the rewards of your own work than they could, and so move forward a lot faster than they could. Someone else born now into the same conditions your parents were born into, meanwhile, who works just as hard as you did, will likely still be struggling for another 30 years just to get to where you are now.

The solution isn't to make it so that you have to start out in the same poor conditions as your parents and the people starting out like they did now, but to make it so that people starting out like your parents did can keep as much reward for their work as you do, so people who were born into poorer conditions than you but worked just as hard as you did should be about where you are in life now, and people born into the same onditions you were who slacked off their whole lives should be about as bad off as someone born much poorer who slacked off just as much.

You're concerned about people being rewarded for their hard work. So are socialists.
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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Fri Jun 15, 2018 10:36 pm UTC

Agreed that I see no need to delete it. No rule against sharing personal stories or anything.

Pfhorrest wrote:The big misconception about socialism today is that it has to involve continuous forcible redistribution, always taking from those who have more to give to those who have less...It's about removing the factors that push the rich richer and the poor poorer by virtue of them being rich and poor, making a level field where people's work is fully rewarded in proportion to its quality.


What sort of examples would you give for this? A socialist project that removes some unjust scenario but does not rely upon redistribution?

And what would make those things socialist, rather than just anti-corruption or what not?

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Re: "Socialism" and "capitalism" are the same

Postby Ranbot » Fri Jun 15, 2018 11:02 pm UTC

Pfhorrest wrote:The solution isn't to make it so that you have to start out in the same poor conditions as your parents and the people starting out like they did now, but to make it so that people starting out like your parents did can keep as much reward for their work as you do, so people who were born into poorer conditions than you but worked just as hard as you did should be about where you are in life now, and people born into the same onditions you were who slacked off their whole lives should be about as bad off as someone born much poorer who slacked off just as much.

You're concerned about people being rewarded for their hard work. So are socialists.


The most direct means to change this generational advantage of wealth would be a 100% mortality tax. People can have all the money they want until the day they die, then their surplus gets redistributed. That will fly like a lead balloon though. Although I tend to favor a capitalist approach I'm not 100% against an idea like that, at least in concept. A system like that needs a very high level of social cohesion and trust that 1) the wealth is shared [or believed to be shared] equally; and 2) that sharing wealth it is more advantageous to individuals than trying to cheat the system.* Social cohesion like that is easier to achieve in smaller groups/societies. However, a strong modern economic engine (capitalist or socialist) that can support lots of people needs a very large and diverse society supporting it, but the larger and more diverse a society is the harder it is to create social cohesion and trust.

* -
Spoiler:
...which are the same hurdles all socialist systems have. :|

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Re: "Socialism" and "capitalism" are the same

Postby Pfhorrest » Fri Jun 15, 2018 11:14 pm UTC

The first example that I want to give is my own anti-usury proposal, since I hold that that is the primary thing that drives the rich richer and the poor poorer, and most other things are knock-on effects from that, and just not enforcing those kinds of contracts would result in a natural redistribution of wealth from those with more to those with less, in exchange for their labor, until wealth was much more evenly distributed and there were no longer separate owner and worker classes, but everyone being both an owner and a worker, the workers thus receiving the full benefit of their work instead of a big chunk of it going to someone else just because he owns something.

But I know that the key (anti-usury) part of that is just my idea, and not something very widespread, so it's not a great example of what "most socialists today" think. The end of that scenario is pretty standard though. Most socialists advocate for (somehow or another, some of them okay with forceful redistribution if necessary) spreading the ownership of capital out into the hands of the people who work it. After that everything else can stay pretty much unchanged from how it is, and it will be socialist from there on out. (Imagine if stock ownership was spread out to the people in general, but the same companies existed and kept selling the same product and the same people kept working for those companies, except now they're getting a share of the profits, which maybe opens up different opportunities that start to reshape the economy indirectly). Note the word "continuous" in my post you quote, as it's important: you don't have to keep taking from those who have more and giving to those who have less for it to be socialist, people can still keep everything that they individually earn, but since they're both the owners and the workers, what people earn will be more in line with how much work they do.

I actually object to the stability of that last bit, and that's where my anti-usury position comes from, as I hold that usury causes such an initially-socialist system to be unstable, which is to say for any differences in wealth to become amplified over time and results in the re-emergence of an owner and worker class. Even ignoring that there is a natural inequality in the productivity of people that will result in unequal returns, there's always still random chance producing uneven returns too, and if getting a little bit ahead makes it easier to get further and further ahead, and vice versa, then you're not going to have the workers owning the capital for long.

Some socialists do advocate for ongoing continuous redistribution to counteract that instability, but it's not an intrinsic feature of socialism, and other solutions exist: like having everything collectively owned so it's not possible to buy up more than your one share of everything; or the less extreme version of that, having every business collectively owned by its employees, which again makes it impossible to own more than your one share of your one business. None of which are my preferred solutions, but that's beside the point. All that's needed for it to be socialism is for the workers to own the capital, whatever it takes to make that happen, and keep it from unhappening, which doesn't necessarily involve forced redistribution.

Ranbot wrote:The most direct means to change this generational advantage of wealth would be a 100% mortality tax.

Doesn't stop people from giving their kids tons of wealth while they're still alive. The kid who gets even a zero-down interest-free mortgage from his rich parents while they're still alive (never mind if they just give him a house) is at a huge advantage compared to someone who has to pay rent until they can save up enough to borrow from the bank at interest.
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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Fri Jun 15, 2018 11:36 pm UTC

Pfhorrest wrote:The first example that I want to give is my own anti-usury proposal,...But I know that the key (anti-usury) part of that is just my idea, and not something very widespread, so it's not a great example of what "most socialists today" think.


Agreed that it doesn't seem widely popular, but I'm certainly willing to entertain more theoretical ideas in terms of evaluating them.

It does seem somewhat socialistic without being directly redistributive, though...given that it directly ties legal benefits to some level of redistribution, I think it is intended as re-distributive all the same. I am, perhaps, a bit confused at how it would work in practice...

Labor contracts largely protect the laborer. Not enforcing contracts between employers and employees would largely leave employers able to screw employees over with little recourse. I am not sure how this will result in a more equal result.

The end of that scenario is pretty standard though. Most socialists advocate for (somehow or another, some of them okay with forceful redistribution if necessary) spreading the ownership of capital out into the hands of the people who work it. After that everything else can stay pretty much unchanged from how it is, and it will be socialist from there on out.


And how many of these appropriations have worked out in practice? By worked out, I mean that the economy continued to function well, and that the new distribution stayed roughly in place, and didn't just result in another group of people gaining and hoarding power for themselves?

(Imagine if stock ownership was spread out to the people in general, but the same companies existed and kept selling the same product and the same people kept working for those companies, except now they're getting a share of the profits, which maybe opens up different opportunities that start to reshape the economy indirectly).


Capitalism has this, yes. Go download Robinhood on your smartphone, and buy stocks. Your company or another, whichever. It's not something we need socialism to enable.

It has always struck me as odd, the fascination that socialism has with pairing the ownership of THEIR production with their work. It seems to forsake diversification. If I own stock in a company and work there, then what happens if the company performs poorly? Everything I have is at risk. If I work somewhere, and invest somewhere else, I at least get some diversification to hedge my personal risk.

I actually object to the stability of that last bit, and that's where my anti-usury position comes from, as I hold that usury causes such an initially-socialist system to be unstable, which is to say for any differences in wealth to become amplified over time and results in the re-emergence of an owner and worker class. Even ignoring that there is a natural inequality in the productivity of people that will result in unequal returns, there's always still random chance producing uneven returns too, and if getting a little bit ahead makes it easier to get further and further ahead, and vice versa, then you're not going to have the workers owning the capital for long.


I agree, and believe that in practice, redistribution has ended up in rapid concentrations of wealth/power among a new group of elites. Plus, yknow, the costs of a revolution or whatever in the meantime. Uneven gains and gains enabling further gains is bound to cause inequality even if you redistribute *perfectly*. Which, in practice, is pretty tough.

Ranbot wrote:The most direct means to change this generational advantage of wealth would be a 100% mortality tax.

Doesn't stop people from giving their kids tons of wealth while they're still alive. The kid who gets even a zero-down interest-free mortgage from his rich parents while they're still alive (never mind if they just give him a house) is at a huge advantage compared to someone who has to pay rent until they can save up enough to borrow from the bank at interest.


Happens a ton now. And yeah, just having wealthy parents during your upbringing is still a huge advantage. A 100% mortality tax would be easily avoided in the modern day, would bring in fairly little additional revenue, and do pretty much nothing to fix income equality.

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Re: "Socialism" and "capitalism" are the same

Postby ucim » Sat Jun 16, 2018 12:19 am UTC

Regarding the idea that people ought to be rewarded based on their work rather than for anything else, how would you handle the following scenarios:

1: Fred and Ethyl both work as bricklayers, and put in an equal amount of work. Does that mean laying the same number of rows and feet of brick, or working for the same amount of time and effort? Ethyl figures out how to work faster, so she lays twice as much brick in a day. Should she get paid more? Does it matter if her "trick" involves using better tools? Because the extra production she makes from her better tools is a form of usury if she gets paid more because of it.

2: Fred and Ethyl are programmers. Each of them has a great idea, and creates an app. They put the same amount of work into the app. Ethyl's is not popular, but Fred's is. Should they be rewarded equally? In this case the difference in value comes not from labor, but from a combination of marketing, quality, and suitability of the product for the target audience.

3: Fred and Ethyl are both equally well off, and Allan wants to launch his new business. Allan has no money but a great idea. He convinces Ethyl to buy the raw materials for him, in exchange for a percentage of the resulting business. Fred is not convinced. Instead, Allan convinces Fred to take a job building the devices for him, in exchanage for a fixed salary. Fred works all day at this, but keeps his savings. Ethyl risks her savings to kickstart the business. Should Fred get greater rewards from the endavor because he's working more? When the business fails, should Ethyl get her money back from Allan? When the business takes off more than anybody dreamed, should Ethyl be able to keep the windfall that Fred didn't get?

There's more to the economy than just raw work. There is risk taking, there is insight, there is invention, there is marketing, there are lots of things that contribute to whether or not an endeavor is successful. Shouldn't these things contribute to the reward for participating, no matter what the kind of participation it is?

And then, wouldn't those things lead to inequality? And wouldn't that inequality tend to propagate and grow?

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Re: "Socialism" and "capitalism" are the same

Postby Pfhorrest » Sat Jun 16, 2018 12:59 am UTC

Tyndmyr wrote:It does seem somewhat socialistic without being directly redistributive, though...given that it directly ties legal benefits to some level of redistribution, I think it is intended as re-distributive all the same. I am, perhaps, a bit confused at how it would work in practice...

Labor contracts largely protect the laborer. Not enforcing contracts between employers and employees would largely leave employers able to screw employees over with little recourse. I am not sure how this will result in a more equal result.


I'm not sure what you mean in the first part about tying legal benefits to redistribution, but in the second part there it does sound like you widely misunderstand me. I'm not talking about labor contracts at all, but about (clauses of) contracts that obligate the payment of rent or interest, in the absence of which such arrangements, while legally permitted, would not be economically reliable, discouraging their use. I contend that in their absence, different arrangements of sales that owners have no incentive to engage in now would be their next-best alternative, and that those arrangements would result in wealth gradually transferring from the owner class to the worker class until there is no longer a distinction between them.

I actually think most socialism focuses too much on the labor side of things, which I think is entirely a symptom of the real problem, which is the capital side of things. I'm not upset that people have to work in exchange for money, or that their employers pay them as little as they can get away with. I'm upset that people don't get to keep most of that money but rather have to pay to service debts they have to enter into to survive and be able to work, and that those debts put the workers at a negotiating disadvantage compared to their usually-wealthier-and-so-less-indebted employers that requires them to accept whatever they can get because they're desperate to pay the rent.

I think that it seems like it would be natural for wealth to flow from those who have more of it to those who have less of it over time, as those who have more of it pay those who have less to do work for them. The richer people get services and the leisure of not having to do things themselves, at the cost of their wealth; and the poorer people work more than they otherwise would need to, for the benefit of increasing their wealth. Over time you'd expect wealth to just even out on its own. But that doesn't actually happen. The reason why, I think, is that the poorer people also have to pay the richer people to borrow their wealth in order to live and work in the first place, so much of what the rich pay out comes right back to them and they can spend it again and again without ever losing it.

Comes back to them as a class, I mean, since it's not often that someone's boss is also their landlord and bank. But if they were... that'd be "feudalism", more accurately manorialism. I content that what we have now is effectively just that manorialism, except that (figuratively speaking) we now work one lord's land in exchange for money, and pay much of that money to live on another lord's land, which he can use to buy the product produced for the first lord; instead of just living and working on one lord's land and giving him much of the product thereof directly.

And how many of these appropriations have worked out in practice? By worked out, I mean that the economy continued to function well, and that the new distribution stayed roughly in place, and didn't just result in another group of people gaining and hoarding power for themselves?

So far as I know the only times it has ever actually happened, the resultant country was crushed by enemy forces, usually literal fascists, like in WWII Spain where an until-then-successful anarcho-syndicalist Catalonia was crushed by Franco and his foreign allies. (I hear something similar is happening in Kurdistan right now, though I haven't read much about that yet). In places like the USSR, they tried to go from market capitalism through state capitalism to socialism, and never got through the state capitalist phase. I think that's the inevitable end of that approach, and that makes it a horrible approach.

Capitalism has this, yes. Go download Robinhood on your smartphone, and buy stocks. Your company or another, whichever. It's not something we need socialism to enable.

I think you misunderstood. The point wasn't that people should be allowed to own stocks, which they obviously are already, but that ownership in abstract should be widely distributed, and that you don't have to completely change the way we do business to accomplish that, because just shuffling stocks around would accomplish that and leave business pretty much otherwise the same.

I own stocks already, but only for a few years now, and not nearly a proportional amount of them (i.e. not nearly ~1/300M of total US market cap, or ~1/7B of total world market cap), because I've been too busy most of my life struggling to pay the rent and didn't have leftover money to invest.

More to the point, I (and the 75ish percent of Americans who make less than me, and a substantial chunk of those who make more than me too) don't own nearly as much capital in the form of stock as I have to borrow just to have a place to live.

It has always struck me as odd, the fascination that socialism has with pairing the ownership of THEIR production with their work. It seems to forsake diversification. If I own stock in a company and work there, then what happens if the company performs poorly? Everything I have is at risk. If I work somewhere, and invest somewhere else, I at least get some diversification to hedge my personal risk.


Classical socialist theory predates that kind of economic savvy, and some people are still stuck in that old rhetoric, but there's nothing that stops socialism from incorporating it. Instead of everyone owning an equal share of their own company (which classical theory seems to presume will in turn hold an equal-ish share of the total economy), everyone just needs to own an equal share of the total economy. That was the point of mentioning stocks above.

If we were to forcibly redistribute wealth, I would do it via a basic income / negative income tax added to what we already have now, not via a revolution. Give everyone a tax credit of some fraction of the mean income, tax everyone that same fraction of their own income, and have tax refunds paid out in monthly installments instead of one lump sum, so everyone gets $(x% mean income - x% their income)/12 in free money every month. Bam, now nobody makes less than that fraction of the mean income, "average" people who make exactly the mean income see no difference at all, everyone below the mean income (which is usually a supermajority of people because incomes are usually heavily right-skewed) sees at least some net benefit, and most of the minority above the mean income still pay very little to fund their part of that, because only the tiny handful of people with exorbitant incomes actually make enough to hurt from it. Now everyone has an easier time making ends meet and more people can afford to invest and start joining the ownership class.

Maybe make investment easier too: perhaps a publicly-owned brokerage that offers no-cost accounts and a small number of free trades per month and easy automated investing tools, and maybe have an easy option for tax refunds to be automatically deposited into such an account, so when people get their "basic income" it's the easy default path for it to just end up invested in an index fund and earning returns, unless they need to pull it out to pay the rent or something.
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Re: "Socialism" and "capitalism" are the same

Postby ucim » Sat Jun 16, 2018 4:39 pm UTC

Pfhorrest wrote:Maybe make investment easier too: perhaps a publicly-owned brokerage that offers no-cost accounts and a small number of free trades per month...
I suspect that the difficulty people have with investing isn't the cost of the account. It's the cost of the investment itself, which the people on the lower end of the economic scale simply can't spare, and can't risk losing. It's also the need to (wisely) choose one's investments. It's pretty easy to make a small fortune in the market if you start with a large one.

Risk is real. It's worth something. That's why interest is a thing.

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Re: "Socialism" and "capitalism" are the same

Postby elasto » Sat Jun 16, 2018 5:11 pm UTC

If you want a 'socialist style' investment fund, it's hard to look beyond the Norwegian model.

Established in 1990, it takes the profits from the oil sector and invests in the stock market. It is currently worth about a trillion dollars, or about $200,000 per citizen. It owns 2.3% of European stocks and 1.3% of all global stocks.

It's fair in the sense that natural resources feel like they ought to belong to all citizens rather than merely being finders-keepers as per 'pure capitalism'. America has some of the greatest reserves of natural resources in the world, so there's no reason it couldn't follow this model also.

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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Mon Jun 18, 2018 2:09 pm UTC

Pfhorrest wrote:
Tyndmyr wrote:It does seem somewhat socialistic without being directly redistributive, though...given that it directly ties legal benefits to some level of redistribution, I think it is intended as re-distributive all the same. I am, perhaps, a bit confused at how it would work in practice...

Labor contracts largely protect the laborer. Not enforcing contracts between employers and employees would largely leave employers able to screw employees over with little recourse. I am not sure how this will result in a more equal result.


I'm not sure what you mean in the first part about tying legal benefits to redistribution, but in the second part there it does sound like you widely misunderstand me. I'm not talking about labor contracts at all, but about (clauses of) contracts that obligate the payment of rent or interest, in the absence of which such arrangements, while legally permitted, would not be economically reliable, discouraging their use. I contend that in their absence, different arrangements of sales that owners have no incentive to engage in now would be their next-best alternative, and that those arrangements would result in wealth gradually transferring from the owner class to the worker class until there is no longer a distinction between them.


Laws regarding renters mostly benefit renters as well. For instance, it is common for renters to have some sort of recourse against eviction. Often, they can't be evicted unless rent is unpaid for three consecutive months. In a world where rental contracts are not legally enforced, what stops a building owner from throwing you out if rent goes unpaid? Yeah, yeah, law may not require rent to be paid, but you gotta live somewhere, right?

And if you did, by some combination of laws, manage to stamp out profitable use of apartment rentals and the like, the resulting scenario would be that people stop building apartments for such purposes. Affordable housing gets fucked up badly. The lowest income folks end up living in ramshackle shacks. This is a real world problem, not really a solution.

I actually think most socialism focuses too much on the labor side of things, which I think is entirely a symptom of the real problem, which is the capital side of things. I'm not upset that people have to work in exchange for money, or that their employers pay them as little as they can get away with. I'm upset that people don't get to keep most of that money but rather have to pay to service debts they have to enter into to survive and be able to work, and that those debts put the workers at a negotiating disadvantage compared to their usually-wealthier-and-so-less-indebted employers that requires them to accept whatever they can get because they're desperate to pay the rent.


I do agree that personal debt can be a severe problem, and if you take on too much of it, it'll put you at a huge disadvantage.

However, I think this is largely a financial literacy thing. There are subcultures that avoid using personal debt a great deal, and generally they do a lot better at low income levels. Debt is not entirely bad, in that it can be a useful tool to escape poverty, start businesses, etc. However, overuse of short term, high interest debt will definitely keep you poor.

I think that it seems like it would be natural for wealth to flow from those who have more of it to those who have less of it over time, as those who have more of it pay those who have less to do work for them. The richer people get services and the leisure of not having to do things themselves, at the cost of their wealth; and the poorer people work more than they otherwise would need to, for the benefit of increasing their wealth. Over time you'd expect wealth to just even out on its own. But that doesn't actually happen. The reason why, I think, is that the poorer people also have to pay the richer people to borrow their wealth in order to live and work in the first place, so much of what the rich pay out comes right back to them and they can spend it again and again without ever losing it.


Rich people are able to borrow a great deal more money than the poor, though. A lot of folks in poverty have fairly minor credit. They may not even have a bank account, so outside of friends and family borrowing, which is common and not particularly exploitative, they probably have available credit of maybe 500-1000 bucks at most. The big money in debt does not come from keeping people impoverished. Your payday loan place is a cheap strip mall location, your bank that loans to businesses is a large high-rent business. Credit cards make most of their money from interchange fees, so folks that are middle class-wealthy are mostly subsidizing them.

So, while misuse of debt may be a great deal more common among the poor, debt as a whole doesn't look like it's weighted against the lower class in terms of wealth transfer. They're just not that profitable to deal with, and mostly, everyone would rather not.

I think you misunderstood. The point wasn't that people should be allowed to own stocks, which they obviously are already, but that ownership in abstract should be widely distributed, and that you don't have to completely change the way we do business to accomplish that, because just shuffling stocks around would accomplish that and leave business pretty much otherwise the same.


About 52% of the US owns stock. This is actually a severe low, with a peak at about 65% just before the Obama years, and dropping throughout. https://www.npr.org/2017/03/01/517975766/while-trump-touts-stock-market-many-americans-left-out-of-the-conversation

That's a pretty large chunk of the market, and while sure, not everyone owns equal amounts of stock, it's reasonably widely distributed, and could be more so, depending on how capitalist of an economy we have.

Classical socialist theory predates that kind of economic savvy, and some people are still stuck in that old rhetoric, but there's nothing that stops socialism from incorporating it. Instead of everyone owning an equal share of their own company (which classical theory seems to presume will in turn hold an equal-ish share of the total economy), everyone just needs to own an equal share of the total economy. That was the point of mentioning stocks above.


The big problem is that socialism "ownership" ends up being less than actual ownership. If I own something, I can sell it. That's largely the value in stocks. Buy low, hopefully sell high, everything's great.

But if we can freely buy and sell, then any forced equality would immediately end. And if we can't, then owning an equal share of stocks doesn't actually matter all that much. "owning" something I can't do anything with is meaningless.

Dividends are a bandaid that would require heavy market distortions, including crippling growth, in order to universalize.

ucim wrote:
Pfhorrest wrote:Maybe make investment easier too: perhaps a publicly-owned brokerage that offers no-cost accounts and a small number of free trades per month...
I suspect that the difficulty people have with investing isn't the cost of the account. It's the cost of the investment itself, which the people on the lower end of the economic scale simply can't spare, and can't risk losing. It's also the need to (wisely) choose one's investments. It's pretty easy to make a small fortune in the market if you start with a large one.

Risk is real. It's worth something. That's why interest is a thing.

Jose


Yeah, there's a reason I suggested Robinhood. It offers no-cost accounts and free trades. Toss fifty bucks in and go at it.

I highly doubt that socialism can create a lower barrier to entry.

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Re: "Socialism" and "capitalism" are the same

Postby Ranbot » Mon Jun 18, 2018 2:53 pm UTC

Tyndmyr wrote:
Ranbot wrote:The most direct means to change this generational advantage of wealth would be a 100% mortality tax.

Doesn't stop people from giving their kids tons of wealth while they're still alive. The kid who gets even a zero-down interest-free mortgage from his rich parents while they're still alive (never mind if they just give him a house) is at a huge advantage compared to someone who has to pay rent until they can save up enough to borrow from the bank at interest.


Happens a ton now. And yeah, just having wealthy parents during your upbringing is still a huge advantage. A 100% mortality tax would be easily avoided in the modern day, would bring in fairly little additional revenue, and do pretty much nothing to fix income equality.

True... I don't have any illusions that wealthy families wouldn't still have an advantage, but if society's goal was to redistribute/claw back generational wealth a 100% death tax would be a significant change. Don't forget that the current tax rules do make individuals report income/assets received, regardless of where it comes from.
Spoiler:
Just ask Paul Manafort, who is quickly becoming a tax law expert and should have a lot of time on his hands soon to answer questions. :lol:
A wealthy household could just pay the extra tax to transfer wealth to their children, but they could only do that while they are alive. Wealth transferred post-mortem would be tax fraud and presumably high risk. With a 100% death tax and enforcement of tax law, I think family generational wealth would change significantly in 2 to 3 generations; not all inequality would be gone but it would be more equitable than today.

I think a bigger flaw in the 100% death tax is wealthy families picking up and moving to other more tax favorable countries. As technology progresses people's mobility has always increased and will continue to increase, particularly for the wealthy. You have to balance redistributing wealth against possibly driving wealth out of the country/economy. There is already competition between different countries to be more alluring for individuals and businesses, and tax structure is one factor among many in that.

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Re: "Socialism" and "capitalism" are the same

Postby ucim » Mon Jun 18, 2018 3:34 pm UTC

Tyndmyr wrote:Yeah, there's a reason I suggested Robinhood. It offers no-cost accounts and free trades. Toss fifty bucks in and go at it.
...and that's why it's a red herring. We already have virtually free stock trading online. The issue is that people don't have the money for the stock in the first place, not that they don't have the money for ancillary fees. $50 of stock isn't going to make you rich anyway; you might as well put it in the bank or a mutual fund. If you want to make money on the insight you (hopefully) have on which companies will do much better than the average, you need to risk a significant amount of capital to do it. And that money is at risk. You could lose it.

Risk is a thing. That's why interest is a thing. You can't wish it away.

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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Mon Jun 18, 2018 4:15 pm UTC

Ranbot wrote:True... I don't have any illusions that wealthy families wouldn't still have an advantage, but if society's goal was to redistribute/claw back generational wealth a 100% death tax would be a significant change.


Setting aside for the moment the question of how, I'm not sure it should be society's goal. Working to provide a better life for your children seems at least as admirable as working to have a better life for yourself. I don't think there's anything wrong with leaving money for one's kids. Sure, sure, a few people happen to enjoy a vast advantage in how much they have, but attempting to set up the younger generation doesn't seem like it's morally wrong.

Anyways, yeah, both moving to advantageous locales and avoidance are issues. The richer you are, the easier it is to move for sure. The poor are always the folks trapped by terrible regimes, while the rich can usually dodge most stuff.

Anyways, we have an existing estate tax. It has a sizable exemption, so it's targeted at only the rich. Still, it is 40%. That's not 100%, but it's enough to test your theory that it would be a significant change for generational wealth.

The answer is that it isn't. Some 99.9% of estates pay absolutely no tax at all, and the amount gained in tax is less than 1% of the money inherited. In addition, it requires a disproportionately high amount of IRS resources to collect per dollar brought in. If we made your change to 100%, and avoidance did not increase at all, we would be looking at maybe 2% of money getting clawed back. Per lifetime. That's not going to significantly change the distribution of wealth. Plus, I bet avoidance would increase.

Rich people are entirely capable of utilizing trusts, gifts, and other financial tools to minimize tax liability. They have enough cash that it's worth hiring an accountant, so avoidance is fairly easy and doesn't require personal expertise. So, mostly what this would accomplish is a little more money for accountants, the IRS spending more on enforcement, and rich folks bailing on the country. All in all, probably not desirable.

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Re: "Socialism" and "capitalism" are the same

Postby Ranbot » Tue Jun 19, 2018 1:43 pm UTC

Tyndmyr wrote:
Ranbot wrote:True... I don't have any illusions that wealthy families wouldn't still have an advantage, but if society's goal was to redistribute/claw back generational wealth a 100% death tax would be a significant change.

...Working to provide a better life for your children seems at least as admirable as working to have a better life for yourself. I don't think there's anything wrong with leaving money for one's kids. Sure, sure, a few people happen to enjoy a vast advantage in how much they have, but attempting to set up the younger generation doesn't seem like it's morally wrong.

Providing for your kids with a better life should be giving them knowledge, attitude, ethics, training, connections, and/or early life stability (which could still be significant financial assistance), for them to provide for themselves later, without dependency on a trust fund. Proponents of capitalism praise the bootstrap, entrepreneurial abilities of capitalism, deservedly I think... but then say it's OK to let the progeny of wealthy capitalists coast on trust funds, because that's capitalism. I consider myself a proponent of capitalism, but I could do with less squirrelling assets away into trust funds, and more actual bootstrapping entrepreneurial work and would wholeheartedly support measures to divert more resources from the former to the latter.
Tyndmyr wrote:Anyways, yeah, both moving to advantageous locales and avoidance are issues. The richer you are, the easier it is to move for sure. The poor are always the folks trapped by terrible regimes, while the rich can usually dodge most stuff.

Right. You don't want wealthy people to leave completely. There is some trickle down effect through the economy, just not the amount that some politicians purport there to be. So, while I believe the things I said above about discouraging trust funds and the like, I also understand there's a balancing point. I don't know what that balancing point is, but I do feel like we could have something slightly more progressive.
Tyndmyr wrote:...
Ranbot wrote:...if society's goal was to redistribute/claw back generational wealth a 100% death tax would be a significant change.
Anyways, we have an existing estate tax. It has a sizable exemption, so it's targeted at only the rich. Still, it is 40%. That's not 100%, but it's enough to test your theory that it would be a significant change for generational wealth.

The answer is that it isn't. Some 99.9% of estates pay absolutely no tax at all, and the amount gained in tax is less than 1% of the money inherited. In addition, it requires a disproportionately high amount of IRS resources to collect per dollar brought in. If we made your change to 100%, and avoidance did not increase at all, we would be looking at maybe 2% of money getting clawed back. Per lifetime. That's not going to significantly change the distribution of wealth. Plus, I bet avoidance would increase.

Rich people are entirely capable of utilizing trusts, gifts, and other financial tools to minimize tax liability. They have enough cash that it's worth hiring an accountant, so avoidance is fairly easy and doesn't require personal expertise. So, mostly what this would accomplish is a little more money for accountants, the IRS spending more on enforcement, and rich folks bailing on the country. All in all, probably not desirable.

I would also assume that if society's mood shifted this drastically, they would close tax shelter loopholes that are currently built into the system. You could make all those tax shelters disappear by just making everyone declare all of their income or other assets, and if is derived from a deceased person(s), or you can't prove that you made the money with your own work/investments, then it's tax fraud. As far as enforcement, computer AI may make it pretty easy. There's so much data in the marketplace on our private spending and lifestyle habits that's ready for AI to sift through and provide a list of highest priority targets for an IRS audit. Private companies are already doing this to figure out what to try to sell us... the gov't will get there too, eventually, I think.

But, I do read what you're saying... we're already dabbling in this with the current estate tax with little benefit as you point out. Maybe I am being naive about enforcement. I'm willing to be wrong in this thought experiment.

Generally speaking, I fundamentally believe capitalism is the better model, based on history and human psychology. Capitalism wrings the most good out of people's innate and usually ugly greed. However, I think the system works best for everyone with some progressive socialism in the mix to keep the extremes of individual greed from running amok. I'm probably 3/4 of a capitalist and 1/4 of a socialist.

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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Tue Jun 19, 2018 2:48 pm UTC

Ranbot wrote:
Tyndmyr wrote:
Ranbot wrote:True... I don't have any illusions that wealthy families wouldn't still have an advantage, but if society's goal was to redistribute/claw back generational wealth a 100% death tax would be a significant change.

...Working to provide a better life for your children seems at least as admirable as working to have a better life for yourself. I don't think there's anything wrong with leaving money for one's kids. Sure, sure, a few people happen to enjoy a vast advantage in how much they have, but attempting to set up the younger generation doesn't seem like it's morally wrong.

Providing for your kids with a better life should be giving them knowledge, attitude, ethics, training, connections, and/or early life stability (which could still be significant financial assistance), for them to provide for themselves later, without dependency on a trust fund. Proponents of capitalism praise the bootstrap, entrepreneurial abilities of capitalism, deservedly I think... but then say it's OK to let the progeny of wealthy capitalists coast on trust funds, because that's capitalism. I consider myself a proponent of capitalism, but I could do with less squirrelling assets away into trust funds, and more actual bootstrapping entrepreneurial work and would wholeheartedly support measures to divert more resources from the former to the latter.


On average, wealthy people work longer hours than the poor, so the idea that the wealthy are all coasting on trust funds is, by and large, not accurate.

Wealthy people are, for the most part, bootstrapping entrepreneurial work. The proponents of capitalism are not anti-rich, because rich people are pretty helpful for capitalism, not a drag on it.

I would also assume that if society's mood shifted this drastically, they would close tax shelter loopholes that are currently built into the system. You could make all those tax shelters disappear by just making everyone declare all of their income or other assets, and if is derived from a deceased person(s), or you can't prove that you made the money with your own work/investments, then it's tax fraud.


I am less optimistic. In practice, anti-tax shelter efforts have born comparatively little fruit. It seems as if it's significantly easier to add a death tax than to make the rich give up all their tax loopholes. Simplifying the tax system and cutting down on shenanigans probably has some benefits regardless of if you have a death tax, but relying on that or AI is...wildly optimistic to make a currently unworkable plan function. If you can get either of the latter working, it's probably a way bigger deal than the former.

Generally speaking, I fundamentally believe capitalism is the better model, based on history and human psychology. Capitalism wrings the most good out of people's innate and usually ugly greed. However, I think the system works best for everyone with some progressive socialism in the mix to keep the extremes of individual greed from running amok. I'm probably 3/4 of a capitalist and 1/4 of a socialist.


I view capitalism as the ideal, and both socialism and cronyism as things that dampen the effectiveness of capitalism. The latter is sometimes ascribed to capitalism by critics of it, but cronyism isn't particular to any economic system, and is a problem everywhere. It's probably less of a problem for capitalism than for many other systems, because corruption is easier to work around sometimes, but it's definitely still a concern.

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Re: "Socialism" and "capitalism" are the same

Postby Leovan » Tue Jun 19, 2018 2:59 pm UTC

I'm not sure how you expect your 100% death tax to work. So if a four year old gets orphaned they're stuck with zero because leaving them a home that their parents paid off and enough funds to get through college would be unfair? At what age would such a situation be acceptable? Would this death tax also apply to husbands and wives? So if my wife dies half my assets get taken and I have to sell the house, or if she was the breadwinner, do I just lose it all?
How does it work with life insurance? Would that just be exempt (loophole) or would the option of having your loved ones cared for if you die be eliminated?

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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Tue Jun 19, 2018 3:01 pm UTC

Leovan wrote:I'm not sure how you expect your 100% death tax to work. So if a four year old gets orphaned they're stuck with zero because leaving them a home that their parents paid off and enough funds to get through college would be unfair? At what age would such a situation be acceptable? Would this death tax also apply to husbands and wives? So if my wife dies half my assets get taken and I have to sell the house, or if she was the breadwinner, do I just lose it all?
How does it work with life insurance? Would that just be exempt (loophole) or would the option of having your loved ones cared for if you die be eliminated?


Most death tax programs have a certain bracket that is exempted. That said, it could be a significant concern in such cases even for a very large lower bracket. Some areas have extremely high housing prices, and forcing a widow and orphans to sell the family home and move simply because dad died seems a bit cruel to most.

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Re: "Socialism" and "capitalism" are the same

Postby ucim » Tue Jun 19, 2018 5:15 pm UTC

Ranbot wrote:or you can't prove that you made the money with your own work/investments, then it's tax fraud.
Nice. Guilty until proven innocent.

Ranbot wrote:As far as enforcement, computer AI may make it pretty easy.
What could possibly go wrong? go wrong? go wrong?

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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Tue Jun 19, 2018 6:36 pm UTC

I'm not overly worried about an AI being super-competent. So far, AI research hasn't actually had much of a problem with that. The problem is usually that they're fairly specialized, and not really a good solution for most broad people problems. Some really cool niche uses, but sadly, major sociological problems have not been sorted out for us by AIs thus far, and big advancements in AI are always promised, but constantly pushed back into the future. Probably unlikely to happen for a while yet.

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Re: "Socialism" and "capitalism" are the same

Postby Ranbot » Tue Jun 19, 2018 8:13 pm UTC

Tyndmyr wrote:On average, wealthy people work longer hours than the poor, so the idea that the wealthy are all coasting on trust funds is, by and large, not accurate.

Wealthy people are, for the most part, bootstrapping entrepreneurial work. The proponents of capitalism are not anti-rich, because rich people are pretty helpful for capitalism, not a drag on it.

In my experience that's not true at all. There are lots of inheritors of wealth that are not entrepreneurial risk-takers at all, because wealthy or not, most people are not the entrepreneurial types like Elon Musk, Richard Branson, Bill Gates, Henry Ford, Donald Trump, etc. You can look up the family trees of the Rockefellers and Vanderbilts and see what their descendants did with all that incredible family wealth... it's pretty uninspiring bunch of politicians, bankers, philanthropists, and actors/actresses. The Duponts have those sorts and a couple entrepreneurial descendants, but they also have "the only member of the Forbes 400 richest Americans ever to be convicted of murder." Anyway, my takeaway is wealthy people are generally not entrepreneurs and families with excessive wealth breed laziness and show even less entrepreneurial ability as families with low to moderate wealth. BUT wealthy people really really enjoy the myth of the entrepreneur or the "job-creator" and perpetuate this myth whenever they can. It's a nice sound bite and makes them feel good, even if there's little to no truth in it.

Tyndmyr wrote:...but relying on that or AI is...wildly optimistic to make a currently unworkable plan function.

I think it's naive to believe the IRS isn't exploring AI right now. The IRS deals with numbers, which computers/AI are very good at managing. Computers/AI are already being leveraged heavily in the financial industry to make decisions without a human getting involved, like High Frequency Trading and risk calculations for a start. Police and military are using AI for more complicated identification of faces, voice, fingerprints, DNA, or image searching. IRS stuff is just numbers... It's not a matter of if they use AI it's a matter of when.

Tyndmyr wrote:I view capitalism as the ideal, and both socialism and cronyism as things that dampen the effectiveness of capitalism.

That's very idealistic to believe capitalism is the perfect ideal and only fails because of some "outside" force, i.e. socialism or cronyism. That's a religious level of belief. Even in the "Wealth of Nations" by Adam Smith (1776) [i.e. "The Bible" of capitalism] there were many very strong warnings against the dangers of unchecked capitalism.

It's also interesting that you decry cronyism soon after you defend wealthy people leaving large sums of money or property to their off-spring, which to me sounds like cronyism flavored by nepotism. Whether you give unfair advantage to a friend or business partner or to a family member the effect is the same, just different labels and feelings attached.

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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Tue Jun 19, 2018 8:35 pm UTC

Ranbot wrote:
Tyndmyr wrote:On average, wealthy people work longer hours than the poor, so the idea that the wealthy are all coasting on trust funds is, by and large, not accurate.

Wealthy people are, for the most part, bootstrapping entrepreneurial work. The proponents of capitalism are not anti-rich, because rich people are pretty helpful for capitalism, not a drag on it.

In my experience that's not true at all. There are lots of inheritors of wealth that are not entrepreneurial risk-takers at all, because wealthy or not, most people are not the entrepreneurial types like Elon Musk, Richard Branson, Bill Gates, Henry Ford, Donald Trump, etc. You can look up the family trees of the Rockefellers and Vanderbilts and see what their descendants did with all that incredible family wealth... it's pretty uninspiring bunch of politicians, bankers, philanthropists, and actors/actresses. The Duponts have those sorts and a couple entrepreneurial descendants, but they also have "the only member of the Forbes 400 richest Americans ever to be convicted of murder." Anyway, my takeaway is wealthy people are generally not entrepreneurs and families with excessive wealth breed laziness and show even less entrepreneurial ability as families with low to moderate wealth. BUT wealthy people really really enjoy the myth of the entrepreneur or the "job-creator" and perpetuate this myth whenever they can. It's a nice sound bite and makes them feel good, even if there's little to no truth in it.


It is convenient to blame the rich, and describe them as lazy. However, we have statistics on this, and do not need to rely on personal experience.

Rich people have fewer leisure hours on average http://www.nber.org/papers/w17982 and across all levels of income, income is positively correlated with hours worked. http://www.nber.org/digest/jul06/w11895.html

Tyndmyr wrote:...but relying on that or AI is...wildly optimistic to make a currently unworkable plan function.

I think it's naive to believe the IRS isn't exploring AI right now. The IRS deals with numbers, which computers/AI are very good at managing. Computers/AI are already being leveraged heavily in the financial industry to make decisions without a human getting involved, like High Frequency Trading and risk calculations for a start. Police and military are using AI for more complicated identification of faces, voice, fingerprints, DNA, or image searching. IRS stuff is just numbers... It's not a matter of if they use AI it's a matter of when.


I've done biometric software development. I assure you, it is not an AI. Sure, you can play with machine learning and just about anything, if you want, but for this area, you generally don't. The fact that something is "just numbers" does not mean that AIs are going to replace humans at it anytime soon.

Tyndmyr wrote:I view capitalism as the ideal, and both socialism and cronyism as things that dampen the effectiveness of capitalism.

That's very idealistic to believe capitalism is the perfect ideal and only fails because of some "outside" force, i.e. socialism or cronyism. That's a religious level of belief. Even in the "Wealth of Nations" by Adam Smith (1776) [i.e. "The Bible" of capitalism] there were many very strong warnings against the dangers of unchecked capitalism.


It's not a religious belief for me, merely a pragmatic one. I feel no particular compulsion to follow a hundreds year old "bible". Older economic works are interesting, yes, but we've learned stuff since then.

It's also interesting that you decry cronyism soon after you defend wealthy people leaving large sums of money or property to their off-spring, which to me sounds like cronyism flavored by nepotism. Whether you give unfair advantage to a friend or business partner or to a family member the effect is the same, just different labels and feelings attached.


An inheritance isn't cronyism. Bribes, giving your kid a job in the company because he's your kid...sure. Your kid having a better shot at life because he enjoyed a nice upbringing isn't cronyism either. That's a better shot at being successful everywhere, and it's nigh universal. If, however, your kid is a fuck-up, and you hire him for a position he's not otherwise qualified for, that's probably going to hurt productivity. Likewise, bribing government officials is usually a way to circumvent market mechanisms for profit. Also undesirable.

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Re: "Socialism" and "capitalism" are the same

Postby SDK » Thu Jun 21, 2018 3:29 pm UTC

Pulling this from another thread since the conversation has moved on...

Thesh wrote:In attempting to find a metric, you are doing the equivalent of finding a correlation between wine consumption and longevity and declaring that alcohol makes you live longer. Unless you actually study why the wine makes you live longer, you aren't doing science.

I'd like to understand your view on this better. I think you're saying that proving socialism is better in any way is impossible. I don't see how that can possibly be true, and there must be some metric for why you think it's better, or else why would you even support it?

To take your wine example, it is science to say that wine makes you live longer. Taking that result and saying alcohol in general makes you live longer is flawed, and I think you're saying that capitalists do the same thing when they say capitalism caused wealthy countries (when it could have been other factors). So maybe something other than capitalism caused that wealth, and maybe something other than alcohol caused that increase in longevity. In both cases, we should theoretically be able to find a metric that better explains what we see, if we do further tests or more analysis of the data we've got. For wine, it's likely the tannins, not the alcohol. For wealthy countries, it's likely [insert something here] instead of the capitalism. If one could show a stronger relationship with some other factor, that's science.

But that's just talking purely economics. You seem to be saying that there is no metric at all that can be used, but there are plenty aside from wealth that might show socialism as being better. Happiness, opportunity, wealth distribution... surely something can be used to show that socialism is better, at least at that one thing. Right?

But maybe I'm just misunderstanding what you were trying to say with this. Maybe you can explain?
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Re: "Socialism" and "capitalism" are the same

Postby Thesh » Thu Jun 21, 2018 3:52 pm UTC

I'm saying that Tyndmyr isn't even comparing capitalism and socialism. He's comparing countries, and labeling them as capitalist and socialist, and then assuming the differences are due purely to the economic system, ignoring things like imperialism, ignoring the distribution and control of global natural resources, etc.

America owns the most intellectual property, which makes America richer; Tyndmyr sees this fact and assumes it means that not only is the US economy more efficient, but the world economy is more efficient. He doesn't consider the possibility that the intellectual property may make the rest of the world poorer by simply by leading to greater inequality, or the possibility that the intellectual property is actually resulting in less overall wealth. The problem is that there is no attempt to show that intellectual property is actually making the economy more efficient - which is an important step when the only thing it allows you to do is prevent people from making something - but it is just assumed, without any evidence, that the intellectual property law is necessary for the creation of that product itself.


You just can't compare countries like that. It requires much more serious analysis which can't be done by finding a chart.

In my experience, capitalists tend to break things into macroeconomics and microeconomics, study them in isolation, and occasionally study how macroeconomic decisions affect entities on the microeconomic level. What they never do is study how microeconomic decision making affects the greater economy. The problem is that everything that they need, in order to show that capitalism is better, is in that last area. It's simply assumed that what's best for the business is best for the country. What they need to show is that the decisions that the business made are better for the country than the other decisions that they could have made; i.e. they need to study the opportunity cost.
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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Thu Jun 21, 2018 4:23 pm UTC

Is it not fair to label a country high-crime or low-crime based on it's statistics? Sure, we can break down why it's a high-crime or low-crime country(and sometimes that might indeed involve neighboring countries), but some trends correlating one factor with another will become clear when looking at countries as a whole. The statistics may not answer every question you have, but they're a good starting point for determining why things are a specific way, and for studying things in an unbiased fashion. Correlation may not be causation, but you generally want to start with it anyways.

I disagree that serious analysis cannot be charted.

I'd actually say the right wing folks as a whole tend to have the opposite problem with micro/macro economics. They rely too heavily on microeconomics, and comparing the country to an individual or a household. This can be a useful analogy, but there are instances where the two are not quite the same. They definitely consider how individual choices interact at a country level, though. It's sort of a foundation of capitalist economics.

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Re: "Socialism" and "capitalism" are the same

Postby Thesh » Thu Jun 21, 2018 4:25 pm UTC

And with that, you'll come to the conclusion that the best way to end crime is to end pollution.
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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Thu Jun 21, 2018 4:29 pm UTC

Thesh wrote:And with that, you'll come to the conclusion that the best way to end crime is to end pollution.


If supported by the data, what exactly is wrong with that conclusion?

The job of demonstrating causality does not end with the assembly of data to show correlation, but it's not really a step you can skip if you want to be scientific about it.

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Re: "Socialism" and "capitalism" are the same

Postby Thesh » Thu Jun 21, 2018 4:40 pm UTC

The point is that it's not supported by the data. To even suggest a correlation, you need to do multivariate analysis (which, good luck with that). You have not done this. You have nothing more than a correlation involving two variables: a binary labeling of either capitalist or socialist, and a ranking from the heritage foundation on economic freedom. That is not science. The vast majority of junk science health papers have done more legwork than you.
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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Thu Jun 21, 2018 4:45 pm UTC

As I said, it's not a perfect proxy, but it's decent for describing capitalism. The Heritage Foundation is definitely on the capitalistic end of things, and their view on what constitutes economic freedom is a pretty straightforward expression of capitalist ideology. It does originate from multiple variables, which isn't the arcane thing you seem to view it as, but rather something utterly routine for any such ranking. If you disagree with the precise measurements, methodology, or weightings, cool. We can chat about that, or compare against other models. No model is perfect, but some models are useful all the same.

However, you've not advanced any criteria at all for demonstrating your alleged superiority for socialism, instead claiming that it is somehow immeasurable.

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Re: "Socialism" and "capitalism" are the same

Postby Thesh » Thu Jun 21, 2018 5:10 pm UTC

Are you fucking kidding me? My argument has always been that every single thing that makes capitalism capitalism is in and of itself negative, pointing out that private property ownership itself leads to a less efficient economy in pretty much every way. Your only response in any one of these "debates" is to declare without any evidence whatsoever that not only is the profit motive is necessary, but that it actually makes up for all of the inequality due to the incentive for wealth creation! And your proof? But look, rich countries are capitalist!

You've never actually provided an actual argument in defense of any part of capitalism. You just dismiss all criticism of capitalism with your ridiculously simple high level analysis. So please, show me evidence that some aspect of private property ownership is in and of itself more beneficial to the economy than if that same exact property was democratically controlled by the workers or consumers.
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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Thu Jun 21, 2018 5:44 pm UTC

It's pretty hard to argue against socialism when your only definition of it is that it's undefinable.

As for your request, yes, wealth correlates with strong private property rights*. The same paper also establishes other links, such as an independent judiciary, press freedom, and deregulation.

*Why Many Developing Countries Just Aren't - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=292140

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Re: "Socialism" and "capitalism" are the same

Postby Thesh » Thu Jun 21, 2018 5:51 pm UTC

It's not complicated; socialism is a system of economics without private property ownership in which the means of production is ran for the benefit of the people, rather than for the profit of the business. Hence, show me any aspect of private property ownership that is directly positive.

Now, why did you pick private property ownership as you only variable, and not look at centralization of the control of wealth? Because the other argument I've made many many times, is that the reason why capitalism appears better is not because of private property ownership, but decentralization of the control of wealth - which I'm arguing for the latter, and capitalism tends towards the former.

Please, can you at least attempt to education yourself on the subject of socialism or just stop getting involved with these threads?
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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Thu Jun 21, 2018 5:54 pm UTC

Thesh wrote:It's not complicated; socialism is a system of economics without private property ownership in which the means of production is ran for the benefit of the people, rather than for the profit of the business. Hence, show me any aspect of private property ownership that is directly positive.

Now, why did you pick private property ownership as you only variable, and not look at centralization of the control of wealth? Because the other argument I've made many many times, is that the reason why capitalism appears better is not because of private property ownership, but decentralization of the control of wealth - which I'm arguing for the latter, and capitalism tends towards the former.

Please, can you at least attempt to education yourself on the subject of socialism or just stop getting involved with these threads?


I picked private property because you requested it. You gonna just gish gallop all over the place here, or did you actually want to discuss that?

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Re: "Socialism" and "capitalism" are the same

Postby Thesh » Thu Jun 21, 2018 5:56 pm UTC

Thank you for proving that you absolutely refuse to consider the arguments I have made, and are incapable of any argument more nuanced than a single variable analysis of capitalism vs socialism.
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Re: "Socialism" and "capitalism" are the same

Postby Tyndmyr » Thu Jun 21, 2018 6:02 pm UTC

Thesh wrote:Thank you for proving that you absolutely refuse to consider the arguments I have made, and are incapable of any argument more nuanced than a single variable analysis of capitalism vs socialism.


Dude. You're just throwing out low-effort accusations non-stop, and never returning to a point. That's a gish gallop. They're not arguments in any meaningful sense. It's a common strategy used by incredibly unscientific folks like creationists, because it's all they really have.

I answered your question as to why I focused on that. I focused on that, because that was the specific question you asked. You made a claim. I provided evidence demonstrating it as conclusively false. Rather than admitting you're basing your argument on a false claim, or challenging the source, or adapting your argument, you simply jumped to something else, together with a bunch of personal attacks. So far, you've cited fuck-all for sources, or bothered to do any legwork for your claims. The only topic you seem to enjoy is how dumb everyone who disagrees with you is. That's nice. I understand that you believe you are very smart.

However, it's not anything like an argument. It's just a toddler tantrum with a marginally better vocabulary.

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Re: "Socialism" and "capitalism" are the same

Postby Thesh » Thu Jun 21, 2018 6:15 pm UTC

No, it's not gish gallop, you are simply failing to understand the core concept that I am trying to explain: That correlation does not prove causation, that there are many many variables involved, and you can't just pick one and run with it. The only thing I have ever asked you to do is actually consider the details themselves. Showing a correlation is meaningless unless you can explain the mechanism by which it works. So explain how private property ownership is a net benefit, show me actual evidence that the positives outweigh the negatives.

If you want high-level statistical analysis to prove capitalism is better, then you need to figure out what all of the potential major variables affecting a country's relative quality of life are, and then figure out how each aspect correlates. Since this includes "history", this is not easy; hence, any measure you are trying to come up with is completely meaningless, with absolutely nothing to add to the debate at all. When people are advocating for libertarian socialism, well, it turns out that there isn't a major libertarian socialist economy, just a bunch of mixed economies, in which the "socialist" countries are ran as a for-profit companies. So how are you even going to begin to compare that?

You need to actually study socialism before you can debate it. You do not want to do this; you just want to defend capitalism, and that means the only thing you do is prevent good debate on socialism. I have a feeling this is your objective.
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Re: "Socialism" and "capitalism" are the same

Postby arbiteroftruth » Thu Jun 21, 2018 6:23 pm UTC

Thesh wrote:It's not complicated; socialism is a system of economics without private property ownership in which the means of production is ran for the benefit of the people


Given that you've also said that everything that defines capitalism is inherently negative, am I correct in understanding that in your view, socialism is *by definition* beneficial to the people? That is, suppose an economy doesn't have private ownership, and the means of production are *ostensibly* run to the benefit of the people, but the system attempting to do so happens to be incompetent. Would that system fail be to be considered socialist, because it's not *actually* run to the benefit of the people?


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