## The end of capitalism?

• 8.1k
There was nothing "end-times" about my post. What I said was that quantum computing would not solve existential matters. That is a long ways from saying "the end is at hand." There are lots of things we can do with existing technology to improve food, population, drinking water, and other matters.

Maybe the end is near. If it is, we'll soon find out. My personal feeling is that our collective demise is somewhere off in the distant future.
• 3.8k
Maybe the end is near. If it is, we'll soon find out.

Well no, actually, one never does find out; one never gets to say, 'I told you so'. It's really annoying.
• 2.9k
What would you picture as an alternative to capitalism? Not for now, but say 200 years from now? Petroleum and natural gas will be gone (per experts). We'll still have coal and China will have nuclear power. Europe will have a bunch of windmills.
• 3.8k
Here is the same general idea, but without the ecobabble and in depth analysis, which of course exposes its socialist origins and thus completely devalues it - in some folks eyes.
• 8.1k
The 100 best list is, as they say, for "tech-loving super nerds".

Sharpening the axe doesn't make the axe new and different. A lot of the stuff on the list is just sharper axes presented as stunning innovation--aka, bullshit.

The driving force behind all this axe sharpening is increased sales of axes that look, and may even be, slightly sharper. The first smart phone was an improvement over the simple cell phone that was 99% a phone, and not much else. The second through nth smart phone are just sharper axes.

Now, if XYZ Corporation came up with an actual, usable anti-gravity device (not just a magnetic levitating system) that would be worth writing about. A small pickup, no.
• 8.1k
In 200 years? in 2219 we will be living in an altogether different environmental regime. IF we continue to use hydrocarbons and exhaust the supply, continue to burn coal, continue to to pursue consumption over conservation, then global warming will have been beyond control for roughly 200 years. The climate will be warmer, oceans much higher. The asian glaciers will have melted (and will no longer feed the major asian river systems). The population of the planet is likely to have already dropped significantly and its lower carrying capacity will continue depopulation (natural depopulation will be brutal.)

Of necessity, the most useful technology will be simple and or primitive compared to the Hanover's BEST 100 list. As James H. Kunstler has shown, our whole productive system is predicated on cheap hydrocarbons. For its complex molecules and abundance, there is no substitute for petroleum. (Coal? Don't bother.)

Predicting what economic system will prevail in 200 years is out of the question. We don't know how much turmoil, upheaval, and chaos we will be dealing with 100, 150, or 200 years from now.
• 2.9k
Predicting what economic system will prevail in 200 years is out of the question. We don't know how much turmoil, upheaval, and chaos we will be dealing with 100, 150, or 200 years from now.

I think you're intentionally overstating. But why?
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I was speculating on what might be the case in 200 years, per your request. I think overstating the case would sound like "In 200 years several city-satellites of a million people each will orbit the earth." OR "in 200 years the earth's human population will have disappeared."

How can one overstate any 200-year estimation? Do you know what will exist in 200 years? If Thomas Jefferson had speculated about life in 2018, could he have over- (or under) estimated anything? He hadn't seen the first train in the US. (Jefferson had seen a steam boat in the late 1700s). Could Jefferson have predicted the ball point pen? An electric iron? Digging oil wells (started just 30 years after his death)? The means and end of slavery? A light bulb. A simple box camera?

Given that the various governments, corporations, and NGOs are unable to mobilize themselves and the population to sharply reduce the use of fossil fuels, it seems inevitable that we will continue to add a lot of CO2 and methane, and other green house gases to the atmosphere for quite a while. Technological turn-arounds are possible, but generally take quite a stretch of time. By the time we achieve significant CO2 reductions, it will probably be too late.

Am I unaware of the progress we are making? I am aware. I know that many electric utilities are now on track to produce a significant share of electricity (like...25%) from wind and solar within the next 5 to 7 years. I also know that oil is relatively cheap and most people are still buying new cars. The population is still growing, and people aspire to higher standards of living--both of which promise an enlarged CO2 output.

We didn't have a lot of time to make alternative arrangements when Global Warming became a thing back around 1985, and that was 35 years ago. Now we are chewing through the 10 years that we thought we had to make big changes, and we haven't made them yet (on a local, et alone global scale).

So, yes, I am pessimistic about our chances of avoiding the negative consequences of run-away global warming. However, I'm not expecting eco-armageddon next week. (more like... maybe 2050?)

One thing that is for sure, Capitalism isn't going to solve the problem.
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So, yes, I am pessimistic about our chances of avoiding the negative consequences of run-away global warming.

I think humans will burn all the fuel they can get their hands on. There's no run-away global warming in the forecast.

One thing that is for sure, Capitalism isn't going to solve the problem.

There's a theory that the development of private enterprise and trade may have been one of the causes of the Bronze Age Collapse. Prior to that economies were typically managed by central authorities, the so-called palace economy.

With the development of abstract money, a strange process started evolving in which people would basically act as if they had more resources than they really did. The optimism generated by that became something like social fuel. We're still living in that kind of world, so immersed in it that most of us don't realize that much of what we think of as our assets as a species is just abstract hot air. To turn and face it creates a feeling of vertigo.

I'm fascinated by the question of how the system will evolve going forward. Will it at some point completely collapse? Or will it give rise to something new?
• 366

Do you have any resources about economies becoming less productive because of inequality? I'd like to learn about that if it's true.

Also what I mean by trending towards greater socialism can be observed in much of the West. Free education, subsidised or free healthcare, increased benefits for disabilities to name a few of the things which become more achievable as governments become wealthier. It just wouldn't be feasible for a developing country to do what many Western countries have done here. Countries with capitalism will continue to be capable of more.

I think in the future we will see unemployment rates being much higher than today and the state taking care of a lot more people. As unskilled labourers or lower end blue-collars will continue to be replaced by computers and machinery. These people will need to be taken care of by greater socialist policies.
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Do you have any resources about economies becoming less productive because of inequality? I'd like to learn about that if it's true.

The problem of concentrated wealth in a nutshell is this: The uber-wealthy, who control such a large share of capital, have little incentive to innovate or invent. Continual growth of their already great wealth, and inequality, is pretty much guaranteed, short of a revolution or disaster (like WWI/the great depression/and WWII) which dispossessed them of much of their assets.

According to French Economist, Thomas Pikkety... r > g, where r = return on capital, and g = economic growth. In the long run, (like the last 250 years) r has been about 4% to 5%, and g has been about 1/10 of 1% -- a little bit above zero. So, obviously, those who own capital (land barons, traditionally, but also big share holders in Amazon or the RAMJAC Corporation***) get richer and richer, and everybody else does not.

Here is a PBS News Hour segment on Pikkety (a little over 6 minutes)

Here is another -- Bill Moyers speaking with Paul Krugman about Pikkety's book CAPITAL. (24 minutes)

NOTE TO @HANOVER: Pikkety is not a Marxist.

***RAMJAC Corporation is an invention of Kurt Vonnegut. In the novel Jailbird, we discover that RAMJAC Corporation owns 19% of all the wealth in the United States.
• 366

I thank you for introducing me to this concept of r>g, it is such a simple representation of the problem. It really changes my views on taxation.

Can you explain your reasoning as to why this leads you to believe inequality leads to lowered economic growth? I am not saying you're wrong but I don't quite understand it.

What ramifications are there in r>g for the mid-level entrepreneur that make him different from the ultra rich?
• 8.1k
I'm all in favor of social welfare programs, but welfare is not socialism. Socialism entails industrial democracy where the workers own the economy and direct its activities. (Most people are workers, so you'll be a participant.).

Automation and "artificial intelligence" is already cutting into white-collar and managerial jobs too. Labor, in general, is viewed as an unfortunate expense, so the more the entrepreneur can get rid of employees, the better. The work-force liquidating entrepreneur is short sighted, however. Who will buy his products and services if large swaths of the population are jobless and impoverished?

The solution proposed, nowhere implemented, is the guaranteed living wage, where the government pays the many jobless a fixed sum. This enables the jobless to take care of themselves, and it provides them with an income which ends up being spent on goods and services -- driving the economy.

Finland recently terminated a 2 year experiment of giving a random group of unemployed people a fixed sum every month. The control group did not receive the funds. The upshot is that the recipients of the cash were happier and healthier after two years, but were still not employed for the most part. Neither was the control group employed.
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Can you explain your reasoning as to why this leads you to believe inequality leads to lowered economic growth? I am not saying you're wrong but I don't quite understand it.

What ramifications are there for r>g for the mid-level entrepreneur that make him different from the ultra rich?

People in my age group -- I'm 72 -- grew up in the post-WWII boom. This boom lasted from the end of the war up to about the end of the 1960s, give or take 15 minutes. During this time economic growth (g) was actually pretty high. I don't know what the percent was, but millions of upward mobile minded people were able to buy houses, cars, have children, go to college, and create some new wealth for themselves. Around the beginning of 1970 (maybe 1973, the Arab Oil Boycott) the boom fizzled out. Since 1980 the trend has been toward continually increased inequality, and we are now back to where we were in 1910--very unequal.

I am not an economist, please understand. As I understand it, the very rich who own capital assets (like land, large shares of corporations, and so on) can count on a steady income from their property--at the rate of 4% to 5%. they don't have to do anything, really, to keep the cash flowing. They tend to become risk averse. They don't want to rock the boat of their wealth. They invest safely in assets that will return a steady and reliable yield.

Entrepreneurs, on the other hand, who either borrowed money or obtained it by some other means, can't afford to sit on their assets. They want to find business opportunities where their $100,000 investment will increase rapidly -- not at 4% a year, but by by 15% a year, at least for a while. In order to get high rates of return, one has to take more risks, which means betting on innovative technologies which may or may not pay off. Entrepreneurs--for better and worse--drive economic activities in new directions -- toward the electric car; toward the new app; toward the high volume low cost airline; toward the non-farm method of making meat (cultivating cell cultures in a vat, rather than cell cultures on the hoof) and so on. Micro-breweries are a recent innovation -- never used to exist. All the apps on a smart phone never used to exist. Some old businesses will always be around: Mining and smelting metal, for example; agriculture and food/fiber processing; transportation in one form or another; forestry and wood products; construction, etc. But take a look at construction: Maybe the printed house will be the next big thing to invest in -- it will be risky, but it might pay off for some. Economic growth doesn't come from owning large blocks of Manhattan property. (Many New York skyscrapers are on leased land which has been owned by the same family for generations.) It comes from what is done on top of the property--by entrepreneurs. Take Warren Buffet, owner of Berkshire Hathaway -- one of the richest people in the world. Buffet invests in businesses that have already proved themselves to be successful -- like Dairy Queen, for instance, or Burlington Northern Santa Fe Railroad. He is very unlikely to invest in a company making "beef" in a factory. When Buffet dies, his heirs will come into a huge fortune which will carry little risk. The difference between the entrepreneur and the rich is that the wealth of the rich is pretty much guaranteed. The wealth of the entrepreneur is on thin ice and has to be looked after. The entrepreneur can go broke overnight if he isn't careful; the rich are in no risk of going broke (short of some sort of cataclysm). Entrepreneurs can become very rich if they are very lucky. If they are just somewhat lucky, they may make a decent income. If they are unlucky, their investment will break even. If they are very unlucky, they may have to consider which dumpster will offer the best pickings. The best way to get rich is to be the sole heir of a fabulously rich old man with heart disease. (So I have heard, anyway.) • 366 Yes, I understand. I didn't mean political socialism but socialist policies. I very much agree with everything you said on the subject. You provide a sound argument for why entrepreneurs are likely to stimulate growth over the ultra rich. I would say though that unless taxation takes some of that money from the ultra-rich and redistributes it, the ultra-rich are not taking anything away from the mid-level entrepreneurs. Their wealth is growing independently and unlike income disparities, it's not like capital increasing is depriving anyone of any opportunities. It's just capital will account for a greater portion of the overall wealth because it's growing faster than the economy. It seems more logical to assume that increased capital can only increase economic growth. Alternatively, maybe no impact? I assume at least some ultra-rich will make some businesses and be a bit productive, invest into companies and make them more productive... things like that. The main problem appear to be the social and political implications. I may have to read Capital myself and see what he is saying precisely. It will be a real return to the past and the creation of an oligarchy! I wonder if it were feasible to dismantle these dynasties... like you can only pass on$10 million or less per person. What the impacts of that might be? Alternatively changing how taxation works but you can also see negative impacts for that too. Same with higher taxation on investments. It's a complicated issue.
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Here is the thread theme tune. It was written in response to the Aberfan disaster, when an old slag heap collapsed onto a school in South Wales in 1966.

• 8.1k
It seems more logical to assume that increased capital can only increase economic growth.

One of the means by which capital became so very fat was by getting tax law changed to cut estate taxes (allowing more to pass to heirs after death) and slash income taxes for the richest bracket. These changes starve governments of revenue, and displace the tax burden onto those less and least able to pay.

Government plays a role in economic growth, but in order to do its part, it needs adequate revenue. How does it stimulate growth? By building and maintaining big infrastructure -- roads, airports, locks and dams, canals, ports, railroads, and the like. These projects facilitate economic activity and put people to work, increasing prosperity and broad economic activity. With adequate income the government has subsidized education (K - PhD) to maintain a strong intellectual base. In many countries the state operates national health insurance which controls costs and improves broad health outcomes [which is why, without a national health insurance plan, the US compares so poorly to other countries on health outcomes per dollar spent].

So: diverting income to the super rich through favorable taxation plans starves government and burdens the working classes, all of which cuts the standard of living over the long run. Here's an example: the states used to support colleges and universities at about 75%. This enabled higher education to offer large numbers of people affordable tuition, and at the same time do research and public service. Now, most states pay only 25% of university costs which means much higher tuition, fewer public service programs, less pure research, and more corporate involvement.

Starved of taxation, government (federal down to local) have difficulty delivering the services which are critical to maintaining economic growth (g).
• 8.1k
I assume at least some ultra-rich will make some businesses and be a bit productive, invest into companies and make them more productive... things like that. The main problem appear to be the social and political implications.

Well, taking Warren Buffet and Berkshire Hathaway as an example again, Buffet has nothing to gain by wrecking his various corporate assets. If Burlington Northern Santa Fe Railroad is badly run and starts falling apart, it won't do Buffet any good at all. Same for all the various businesses which capital owns: They need to be operated successfully to hold their value.
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I may have to read Capital myself and see what he is saying precisely.

Good idea. I haven't read it myself--just excerpts and summaries by others. Not reading books I recommend others read is not commendable, but... one can only get so much done in a day.
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I wonder if it were feasible to dismantle these dynasties... like you can only pass on \$10 million or less per person.

Yes, this is perfectly possible. After the excesses of the late 19th century gilded age, the progressives in the US passed much higher taxes on wealthy people. It was really the "Reagan Revolution" starting in 1980 where wealth taxes were cut and we headed back into another "gilded age". Here's a chart showing the 20th century history of economic inequality.

• 366

I agree with most of your sentiment - that capital should be put to better use than accumulating wealth for already uber-rich dynasties and individuals. This seems like a point that any reasonable people would agree with and understand the utility of. However, it remains that taxation of the uber-wealthy still occurs and the more wealthy they are, the more money the government receives from them. So all of the things you're talking about, the uber-rich do contribute to - they should just clearly contribute more.

I wouldn't argue that all of the uber-wealthy are making successful and productive businesses but there are clearly some who, if nothing more than to amuse themselves, create and expand businesses and property which ostensibly they try to see succeed - if nothing else than for their ego.

I am not sure what all the ramifications would be for increased taxation in this globalised day and age but now that I have learned about r>g. I feel a new passion for this topic that I didn't feel before. Taxation as a means to prevent oligarchy... on top of all of the benefits you lay out and more... compelling.

I never really bought the idea that hard work and industriousness were absolute indicators of financial success but I think the illusion that it is could be preventing Americans from supporting these changes. r>g is a powerful debating tool in this regard, combined with the knowledge of the success of socialist programs. Such a more compelling argument (at least for me) could be made about this topic than is being made by the current left which focuses entirely on economic growth and the morality aspect, it's quite misleading.
• 8.1k
Here's an item in the Guardian (London) about a groundswell in favor of taxing the rich much more heavily. You might find it interesting.
• 58
It's pretty easy to start engineering something and come to an unexpected dead end.

We've engineered an agrarian society... we call it civilization and it's all essentially based on the demands of protecting a false surplus in order to support huge human populations.

Currently the false surplus is gained from fossil fuels. But ultimately everything comes from the source that grows the plant which provides the supposed surplus. The energy budget from the sun.

One of the demands of agriculture is hierarchy and specialization... and so society shifted away from hunter-gatherer in-group cooperation to in-group competition for resources. This shift to competition creates the space for hierarchy and systems of power.

Authoritarianism.

Capitalism, socialism, fascism, feudalism... These are all different forms of authoritarianism.

And each of these forms is a response to the demands of growing plants to create an alleged surplus.

It's not that Capitalism is failing, it's that the idea of civilization is failing. Capitalism is merely a response to the oft unconsidered demands of agriculture.

As it turns out basing the vast majority of human life on the demands of agriculture has run into a rather dramatic dead end.

Human caused climate change... uncontrolled tech expansion, the prioritization of greed in the human character... all of which are driven by authoritarianism as a means to support agriculture.

The fatal flaw? Large systems of power concentrate massive populations of will into the hands of very few people who can now use that concentrated power of will to destroy the ecosystem that nurtured us.

Hard to see this as anything other than what it is... a complete and utter failure of agriculture and the authoritarianism that derives from it in a variety of systemic flavors... like Capitalism or Socialism.
• 5.9k

Isn't agriculture necessary to feed the seven billion people on earth? How do you propose a society not based on agriculture, when eating is one of the few essential activities?

As it turns out basing the vast majority of human life on the demands of agriculture has run into a rather dramatic dead end.

Do you see how this is backward? We make demands on agriculture, because it is necessary to support the vast numbers of human lives, not vise versa.
• 58

"Do you see how this is backward? We make demands on agriculture, because it is necessary to support the vast numbers of human lives, not vise versa."

Do I really have it backwards?

The vast human population we have is because of agriculture. Before agriculture human populations were much, much smaller. And the entire ecosystem existed within the energy budget provided by the sun.

So, we adopted agriculture not to support huge populations but because of the false surplus that agriculture produce, seemed a good way to increase our chance of survival. In pursuing that false surplus huge amounts of human labor is required, and society becomes reliant on the false surplus.

Whenever a population has a food surplus, the population grows.

The demands of agriculture created the large populations. We did not start with huge populations and then developed agriculture to deal with the extra mouths. Now one of the main problems we have is that we keep feeding people without controlling our reproduction.

We you add to that the other demands that the agrarian lifestyle puts on the human character, you end up with things like greed... property... authority... wars... markets... climate change...

None of these things are necessary to human survival and in fact lead to just the opposite.

We blindly chose a path 10,000 years ago that leads to a dead end
• 5.9k
The vast human population we have is because of agriculture. Before agriculture human populations were much, much smaller. And the entire ecosystem existed within the energy budget provided by the sun.

So, we adopted agriculture not to support huge populations but because of the false surplus that agriculture produce, seemed a good way to increase our chance of survival. In pursuing that false surplus huge amounts of human labor is required, and society becomes reliant on the false surplus.

Agriculture does not go beyond the energy budget of the sun, so the "false surplus" you refer to is completely fictitious. Sure we have artificially lighted greenhouses, but this is such a minuscule amount of overall agricultural practises, which in themselves fall far short of maximizing the energy budget of the sun, that the energy used in these greenhouses is insignificant.

The demands of agriculture created the large populations.

This is where you have things backward. It is not the demands of agriculture which created large populations, it is the supply of agriculture which created the large population. The human demands of agriculture are actually very small in the modern mechanized farms such as in North America. A farmer can crop thousands of acres, or herd thousands of livestock, with very few employees. Agriculture makes no demand on the population, it simply supplies for the needs of the population. If the supply is higher than the need there would be a surplus, but the modern trend is to convert crops to fuel, so if anything, there is a shortage not a surplus.

We you add to that the other demands that the agrarian lifestyle puts on the human character, you end up with things like greed... property... authority... wars... markets... climate change...

I don't know how you are using "agrarian" here, but the lifestyle of the farmer is one of hard work, to provide for others. It is not properly characterized by "greed" and such terms. You have created a completely fictitious scenario, which casts the members of the agricultural society as evil villains, and that's just wrong.
• 58

"Agriculture does not go beyond the energy budget of the sun, so the "false surplus" you refer to is completely fictitious."

Are you certain of that? What is a more efficient solar energy converter... a plowed field or a forest?

The false surplus come from the fact that it requires huge amounts of energy to create and defend a field. The total amount of energy spent requires additional energy inputs beyond sunlight... like human labor... which is also ultimately fed by solar energy. Whether stored in the form of fossil fuels or created from field of hay for draft animals. So when people start planting fields there is a local surplus for a small community at the cost of eco-diversity. Essentially a number of energy converting niches get destroyed in the service of mono-cropping. If one plant was capable of completely converting that region's sunlight into plant energy then that plant would have take over the area.

That same ground cover by a field could only support a very few wanderers. This allows a society to gain more territory... and create more fields. At the cost of increased labor requirements to develop and sustain the fields. Increase population and the cycle continues...

And this is important for you to note... at every step in this process the land occupied by civilization is supporting far larger populations than that same land could support in it's natural state.

Which of course means that agriculture is overdrawing the solar energy budget of that land.
• 58

"it is the supply of agriculture which created the large population." Yup which is precisely what I've been saying.

When we choose to live an agrarian lifestyle we chose agriculture... and this enabled large populations and emphasized certain elements of human character that have led us to the point of nuclear war or ecological collapse... or creating a child race of AI... whatever... things are murky in the future because of the failure of the current systems.
• 5.9k
Are you certain of that? What is a more efficient solar energy converter... a plowed field of a forest?

A more efficient use of solar energy does not imply going beyond the solar budget, it just implies a more efficient use of the solar budget.

The false surplus come from the fact that it requires huge amounts of energy to create and defend a field. The total amount of energy spent requires additional energy inputs beyond sunlight... like human labor... which is also ultimately fed by solar energy. Whether stored in the form of fossil fuels or created from field of hay for draft animals. So when people start planting fields there is a local surplus for a small community at the cost of eco-diversity. That same ground could only support a very few wanderers. This allows a society to gain more territory... and create more fields. At the cost of increased labor requirements to develop and sustain the fields. Increase population and the cycle continues...

Your arguments are nonsense. Human energy comes from consumed agricultural produce. Fossil fuels come from solar energy. These are not instances of going beyond the solar budget. That the energy is collected at one time, and used at another, does not mean that the budget is broken.

And this is important for you to note... at every step in this process the land occupied by civilization is supporting far larger populations than that same land could support in it's natural state.

What is your proposed "natural state" of the land, barren rock, prior to all life forms?

Which of course means that agriculture is overdrawing the solar energy budget of that land.

No, all it means is that human beings are better at providing for other human beings (more efficient), with what the sun gives us, as farmers, in comparison to as hunter-gatherers..
• 58

Definition of agrarian (Entry 1 of 2)
1 : of or relating to fields or lands or their tenure
agrarian landscapes
2a : of, relating to, or characteristic of farmers or their way of life
agrarian values
b : organized or designed to promote agricultural interests
an agrarian political party

Environmental impact of agriculture:

https://en.wikipedia.org/wiki/Environmental_impact_of_agriculture

I'm not actually making anything up. There are observed differences between hunter gatherer lifestyles and farming... if you prefer. These observed difference are exactly as I've said.

You have only to examiner history to find record of the conflict of the two different lifestyles. Hunter gatherer lifestyles are significantly more sustainable and stable... when left alone. Tribal lifestyles tend to small group sizes with in-cooperation... and different views of property and what constitutes status.

I'd invite you to read Charles Mann, "1491" Or any of a number of historical documents discussing the generosity of indigenous tribes as a world wide pattern.

Here is a very concise example of how societies shape human character:

"Arawak men and women, naked, tawny, and full of wonder, emerged from their villages onto the island's beaches and swam out to get a closer look at the strange big boat. When Columbus and his sailors came ashore, carrying swords, speaking oddly, the Arawaks ran to greet them, brought them food, water, gifts. He later wrote of this in his log:

They ... brought us parrots and balls of cotton and spears and many other things, which they exchanged for the glass beads and hawks' bells. They willingly traded everything they owned... . They were well-built, with good bodies and handsome features.... They do not bear arms, and do not know them, for I showed them a sword, they took it by the edge and cut themselves out of ignorance. They have no iron. Their spears are made of cane... . They would make fine servants.... With fifty men we could subjugate them all and make them do whatever we want."
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