That sounds like you're just choosing to ignore the problem then, if you admit that unregulated "free" markets inevitably cause runaway inequality, but you're against both regulation and fixing the structural problems of the market.

You’re right. I do not see income inequality as it’s own problem. Poverty is a problem, but wealth and success is not.

If you admit that poverty is a problem, and you concede the conclusion of this "new" research that unregulated "free" markets result in the rich getting richer and the poor getting poorer, then it seems like you must then admit the latter effect is also a problem, because the poor getting poorer results in ever-increasing poverty, which you admit is a problem.

What I agreed with is that income inequality is inevitable in a free market system. I do not think free markets result in the poor getting poorer. The poor are much richer than they were, say, 50 years ago, especially in societies built on free market principles.

50 years ago is a bad choice of time period. Compare the difficulty in securing basic necessities like housing in 1969 vs 2019. There’s lots of cheap technological luxuries available today that didn’t even exist then, but just making ends meet is much harder than it used to be.

As far as the same principles applying to physics, keep always in mind that human societies are just another physical system subject to the laws of thermodynamics, and that wealth is basically just an evaluative perspective on the same old matter and energy, so flows of wealth will be bound to the same rules as flows of energy in the end. — Pfhorrest

Yes. Money is a metaphysical form of Energy, which can be both constructive and destructive. The trick is to control the flow to maintain a safe level of warmth (profit) while avoiding burning down the house. All of the political and economic systems we've tried so far have found it difficult to hit the sweet spot. Some tend to enrich the rich, and others to impoverish everyone. Venezuela is an example of a nation with vast resources that are squandered due to lose/lose political squabbles : Marxists versus Capitalists, and apolitical masses in the middle get trampled.

Economics is not for nothing called the "dismal science". But I am encouraged by this new economic model to hope that both Socialist and Capitalist economists will be able to agree on the numbers, if not the specific goal : free market vs balanced distribution. If both sides can at least agree on the mathematical facts, maybe they can find a way to meet in the middle with win/win solutions, rather than to swing to one extreme or the other. Thinkers in the past -- Adams, Marx, Carlyle -- have intuitively grasped the inherent disparities in resource and wealth distribution. But more accurate mathematical models should allow for better rational planning, and less political footballing. One can hope. :smile:

"Dismal science is a term coined by Scottish writer, essayist, and historian Thomas Carlyle to describe the discipline of economics. The term is said to have been inspired by T. R. Malthus' gloomy prediction that population would always grow faster than food, dooming mankind to unending poverty and hardship." https://www.investopedia.com/terms/d/dismalscience.asp

What I agreed with is that income inequality is inevitable in a free market system. I do not think free markets result in the poor getting poorer. The poor are much richer than they were, say, 50 years ago, especially in societies built on free market principles. — NOS4A2

Then you are not, in fact, giving the quoted articles the "benefit of the doubt" as you claimed.

:point: :up:

... you're just choosing to ignore the problem then, if you admit that unregulated "free" markets inevitably cause runaway inequality, but you're against both regulation and fixing the structural problems of the market. — Pfhorrest

If you admit that poverty is a problem, and you concede the conclusion of this "new" research that unregulated "free" markets result in the rich getting richer and the poor getting poorer, then it seems like you must then admit the latter effect is also a problem, because the poor getting poorer results in ever-increasing poverty ... — Pfhorrest

:clap: :clap:

Then you are not, in fact, giving the quoted articles the "benefit of the doubt" as you claimed.

I am, in fact. What I disagree with are the statist prescriptions.

50 years ago is a bad choice of time period. Compare the difficulty in securing basic necessities like housing in 1969 vs 2019. There’s lots of cheap technological luxuries available today that didn’t even exist then, but just making ends meet is much harder than it used to be.

In which period, then, is the poor wealthier than they are today?

I am, in fact. What I disagree with are the statist prescriptions. — NOS4A2

Then you should be down with libertarian socialism, which is anti-state (hence libertarian) but still looks for other ways to solve the problems of capitalism rather than just ignoring them.

In which period, then, is the poor wealthier than they are today? — NOS4A2

You just named one: 50 years ago. An average person my age in America 50 years ago would be well on their way to homeownership and eventually getting out from under the thumb of their landlord/bank, whereas I’m way ahead of most of my peers and lucky to own a tiny mobile home on rented land.

Then you should be down with libertarian socialism, which is anti-state (hence libertarian) but still looks for other ways to solve the problems of capitalism rather than just ignoring them.

It’s the socialism part I’m opposed to. We shouldn’t ignore its dismal and in fact deadly track-record.

You just named one: 50 years ago. An average person my age in America 50 years ago would be well on their way to homeownership and eventually getting out from under the thumb of their landlord/bank, whereas I’m way ahead of most of my peers and lucky to own a tiny mobile home on rented land.

I was speaking of the poor, not an average person. How was it better to be poor in the 50’s than today? Did they have a better quality of life? A higher lifespan?

It’s the socialism part I’m opposed to. We shouldn’t ignore its dismal and in fact deadly track-record. — NOS4A2

You seem to think "socialism" implies statism; I'm guessing you're thinking of the USSR. "Socialism" just means any system that avoids the consequences described in OP, of runaway wealth concentration. Libertarian socialism aims to do that without using the state; libertarian socialists are generally anarchists, and anarchists are generally libertarian socialists. Have you ever read anything at all about libertarian socialism?

I was speaking of the poor, not an average person. How was it better to be poor in the 50’s than today? Did they have a better quality of life? A higher lifespan? — NOS4A2

You wanted to define poverty in absolute terms earlier, yet here you seem to want to define it in relative terms. My point was that average people are much poorer today than they used to be; more people are poorer in absolute terms.

In absolute terms, I am poor; even if I could somehow magically consume nothing whatsoever, I am trapped in a situation, that I was born into, of owing someone or another money just for the right to exist somewhere without breaking the law, and am only very slowly making progress on the very long uphill climb to escape that situation. But in relative terms, I am ridiculously wealthy; I have a much higher income than the vast majority of individuals in this country (half of whom make half or less of what I do) and consequently a much larger safety net (compared to most people who have zero safety net) because I am actually making some progress toward climbing out of this hole (compared to most people who are making zero if not negative progress).

Fifty years ago, only people who were relatively poor -- poorer than average -- would face this kind of absolute poverty, and relatively average people would be better-off in absolute terms than even I am. Now, because of runaway wealth inequality, even people who are relatively wealthy, like me, are poor in absolute terms.

Housing is just my go-to example, BTW. Health care is another good one. Flat screen TVs and avocado toast are non-sequiturs, so don't even go there.

You seem to think "socialism" implies statism; I'm guessing you're thinking of the USSR. "Socialism" just means any system that avoids the consequences described in OP, of runaway wealth concentration. Libertarian socialism aims to do that without using the state; libertarian socialists are generally anarchists, and anarchists are generally libertarian socialists. Have you ever read anything at all about libertarian socialism?

I’ve never heard that definition of socialism.

I’m a big fan of Rosa Luxenberg and Orwell, but they spoke in a time of revolutionary upheaval, so I forgive their mistakes.

You wanted to define poverty in absolute terms earlier, yet here you seem to want to define it in relative terms. My point was that average people are much poorer today than they used to be.

In absolute terms, I am poor; even if I could somehow magically consume nothing whatsoever, I am trapped in a situation, that I was born into, of owing someone or another money just for the right to exist somewhere without breaking the law, and am only very slowly making progress on the very long uphill climb to escape that situation. But in relative terms, I am ridiculously wealthy; I have a much higher income than the vast majority of individuals in this country (half of whom make half or less of what I do) and consequently a much larger safety net (compared to most people who have zero safety net) because I am actually making some progress toward climbing out of this hole (compared to most people who are making zero if not negative progress).

Fifty years ago, only people who were relatively poor -- poorer than average -- would face this kind of absolute poverty, and relatively average people would be better-off in absolute terms than even I am. Now, because of runaway wealth inequality, even people who are relatively wealthy, like me, are poor in absolute terms.

Housing is just my go-to example, BTW. Health care is another good one. Flat screen TVs and avocado toast are non-sequiturs, so don't even go there.

I was speaking in terms of comparison, not absolute.

Yes, people are more wealthy today—financially, health-wise and in living standards—than they were 50 years ago. Not only that, but countries that only recently instituted free market policies are much wealthier now than they were only 20 years ago (China for example)

I’ve never heard that definition of socialism. — NOS4A2

Socialism in its broadest sense means any system where there is not an economic class divide between those who own and those who work; where everyone owns some of the means of production and everyone works them too. That division into owners and workers is the definition of capitalism; "free market" is not sufficient to count as capitalism, and there can be non-capitalist free markets, and non-free-market capitalism. It was actually Marx who first argued that free markets inevitably lead to capitalism, much to the disagreement of the other socialists of his time, the ones now called libertarian socialists in contrast. Libertarian socialists are the continuation of the original liberal movement toward both liberty and equality; those liberals who did not abandon equality for capitalism became the first socialists, and those socialists who did not abandon liberty for statism after Marx and then Lenin et al are the libertarian socialists.

That division into non-working owners and non-owning workers is the consequence of the problem described in the OP, and described by older socialist thinkers. Anyone who wants to avoid that division into owners and workers is some kind of socialist, whether they realize it or not.

I was speaking in terms of comparison, not absolute. — NOS4A2

In terms of comparison, a growing inequality definitionally makes more people poor, even if their absolute material conditions don't change or even improve, so "in terms of comparison" your argument is even weaker.

Yes, people are more wealthy today—financially, health-wise and in living standards—than they were 50 years ago. — NOS4A2

Not in places that were already developed capitalist countries then and still are now, like America. I gave you a couple of big examples in my last post to the contrary, so you can't just assert "nuh uh" in response. Show me how fewer Americans are poor today than 50 years ago, in terms of real basic necessities like housing and medicine, not luxury technological advancements like phones and computers.

Not only that, but countries that only recently instituted free market policies are much wealthier now than they were only 20 years ago (China for example) — NOS4A2

That's because those countries are also developing countries, technologically-speaking. Of course a country moving out of an agrarian period into an industrial period is going to get richer. That's not a consequence of their economic system, that's a coincidence.

Also, countries getting richer does not mean their poor are getting better off. Saudi Arabia is a fairly rich country, but almost all that wealth belongs to the royal family. Oil sales don't benefit the Arabian plebs much.

"Socialism" just means any system that avoids the consequences described in OP, of runaway wealth concentration. — Pfhorrest

I wouldn't loosely categorize Socialism as merely restraining the power of capital, as this doesn't necessarily strike at the heart of the power relations structured within capitalism viz., the relationship between an ownership class and a class of wage laborers. Otherwise, the capitalist class retains the power to disencumber restraints on capital and well...we all know what Marx said about Hegel's statement regarding history and repetition. Socialism requires overcoming the struggle between Capital vs. Labor, so that there is only Labor (or more broadly, the citizenry, or the people) that is in (democratic) control of Capital. To my mind, this would require restructuring ownership of means of production into worker cooperatives, and state ownership (within free, fair, universal democratic elections) of non-competitive industries (e.g. land, transportation, healthcare, education).

I suspect my views would be more anarcho-capitalist — NOS4A2

That sounds like you're just choosing to ignore the problem then, if you admit that unregulated "free" markets inevitably cause runaway inequality, but you're against both regulation and fixing the structural problems of the market. — Pfhorrest

Yeah right-wing libertarians typically argue for capitalism on deontological grounds, fully understanding that the consequences of capitalism often don't benefit people (this is why libertarianism often goes hand-in-hand with virulant racism).

:cool:
:up:
:clap:

I am, in fact. What I disagree with are the statist prescriptions. — NOS4A2

You're denying capitalism leads to escalating income inequality without some form of outside influence. That's a factual claim that made in the articles, not a prescription. You need to deal with this factual claim somehow.

PS__I didn't intend to disparage Marx, but to promote the linked article. — Gnomon

Yes, that's why I say you didn't need to preamble with a digression about Marxism, just talk about the article, but if you do preamble about Marx then it's fair to expect more digression about Marx. I have no problem with just considering the linked article's merit and implications; likewise, I have no problem discussing the Marx critique of capital and relation of it to this paper as well.

Socialism in its broadest sense means any system where there is not an economic class divide between those who own and those who work; where everyone owns some of the means of production and everyone works them too. That division into owners and workers is the definition of capitalism; "free market" is not sufficient to count as capitalism, and there can be non-capitalist free markets, and non-free-market capitalism. It was actually Marx who first argued that free markets inevitably lead to capitalism, much to the disagreement of the other socialists of his time, the ones now called libertarian socialists in contrast. Libertarian socialists are the continuation of the original liberal movement toward both liberty and equality; those liberals who did not abandon equality for capitalism became the first socialists, and those socialists who did not abandon liberty for statism after Marx and then Lenin et al are the libertarian socialists.

That division into non-working owners and non-owning workers is the consequence of the problem described in the OP, and described by older socialist thinkers. Anyone who wants to avoid that division into owners and workers is some kind of socialist, whether they realize it or not.

I’ll accept your broad sense of socialism.

But I don’t think there is much a distinction between owner and worker. It is more difficult and risky to start and run a business than it is to apply for a job and work for a wage. There is overhead, regulations, looking after employees, taxes and management. Owners are themselves workers. Many of us are self-employed, supply a service, do the work, provide jobs.

The distinction is between the private citizen and the state, the rulers and the ruled, those with the monopoly on property, on violence, on security, and those who must obey them and live by their rules.

Not in places that were already developed capitalist countries then and still are now, like America. I gave you a couple of big examples in my last post to the contrary, so you can't just assert "nuh uh" in response. Show me how fewer Americans are poor today than 50 years ago, in terms of real basic necessities like housing and medicine, not luxury technological advancements like phones and computers.

“Luxury technological advancements”? The ease of travel, communication, access to information, medical technology, food technology, etc. all raise the standard of life for the poor. We’re living in a period when the poor in America are overweight, the first time in world history where the poor are taking in too many calories.

That's because those countries are also developing countries, technologically-speaking. Of course a country moving out of an agrarian period into an industrial period is going to get richer. That's not a consequence of their economic system, that's a coincidence.

Also, countries getting richer does not mean their poor are getting better off. Saudi Arabia is a fairly rich country, but almost all that wealth belongs to the royal family. Oil sales don't benefit the Arabian plebs much.

It wasn’t only countries moving out of agrarian period (with collectivized farms and socialist, statist tinkering) but also developed countries like Sweden, Norway, Denmark, who had to cut government spending and open up markets.

Yes, that's why I say you didn't need to preamble with a digression about Marxism, just talk about the article, but if you do preamble about Marx then it's fair to expect more digression about Marx. — boethius

I'm sorry if my assertion about Marxism being "out of date", offended you. However, it wasn't a digression, but integral to my understanding of the article as an "update" of older theories, such as Smith and Marx. Besides, I was directly responding to the Marx reference in the original quote.

Do you think it's unfair to interpret the new statistical economic model as a valid "update"? I saw it as similar to Newton's law of gravity, which was updated and refined by Einstein, but not invalidated. I have no training in economics, and only a philosophical (not political) interest. So I may have overstated the importance of the Capitalist Casino concept.

I saw in it a more politically neutral view of who's at fault for the money/power inequities of the world. If the Matthew Effect*1 is inherent in any economic system, then there should be mathematical/rational solutions that men of Good Will*2 can agree on. Rather than relying on civil wars and military revolutions to throw the rascals out, perhaps -- in some Utopian future state -- we can keep the economy balanced with win-win strategies, instead of win-lose. Is that totally naive? :cool:

Matthew Effect*1 : https://en.wikipedia.org/wiki/Matthew_effect

Good Will*2 : this assumes that "bad will" is a minority trait

I'm sorry if my assertion about Marxism being "out of date", offended you. However, it wasn't a digression, but integral to my understanding of the article as an "update" of older theories, such as Smith and Marx. — Gnomon

No offense taken. It's a digression if you want to talk about Marx, but framing something as "baseless out of date" is unclear if you want to talk about that thing or not. Certainly out-of-dateness is a fair and debatable point of old theories. Likewise, your following sentence, that the upper class oppresses the workers is also worthwhile to discuss if it's a fair characterization of Marx as other posters have also responded to.

Do you think it's unfair to interpret the new statistical economic model as a valid "update"? I saw it as similar to Newton's law of gravity, which was updated and refined by Einstein, but not invalidated. I have no training in economics, and only a philosophical (not political) interest. So I may have overstated the importance of the Capitalist Casino concept. — Gnomon

Yes, I definitely think it's a good analogy to Newton, that Marx discovered some true principles that resulted in valid predictions (as well as false ones; where we can draw a parallel with Newton's focus and writing on alchemy), and that we have since both discovered new principles and verified new predictions.

Of course, there's a large body of work beyond this paper on inequality, most importantly empirical work showing inequality really does increase under laissez-faire policy frameworks.

For me, the significance of this paper is more as a retort to the "tabula rasa" hiding place / fantasy of laissez-faire proponents (that it's always whatever regulations remain that have caused the inequality, corruption and market failures and not the regulations, designed over centuries to keep inequality, corruption and market failures in check, that were removed).

The paper does it's best to create the laissezfaire fantasy world and simulate what happens. So, the point is that even with granting the laissezfaire proponent's insistence that things like corruption and asymmetry and unequal starting points can be simply ignored, their model still doesn't seem to work (unless the goal is to create oligarchy rather than a free and happy citizenry).

However, nowadays proponents of deregulation and lowering-tax-on-the-rich and removing anti-corruption laws have mostly abandoned the idea that these things are good for society in general; the paper in question is a small addition to a large pile of both theoretical reasons to believe as well as empirical reasons to believe deregulation, lowering taxes on the rich and legal-corruption are all bad for society (of course that doesn't immediately inform us what regulations, taxes and anti-corruption measures are worthwhile, just that the principle that getting rid of them will magically achieve those objectives even better is completely implausible and delusional, or more likely just propaganda from people who want those things regardless of wider social consequence).

Instead of making the case that removing these restrictions on the accumulation of and use of capital just so happen to create a situation those restrictions where designed to achieve, proponents of deregulation, lower-taxes-on-the-rich, and legal-corruption have moved to moral arguments instead of scientific (once empirical evidence is overwhelming it works less and less well to keep making ridiculous claims that are so easily checked to be false).

At least with moral arguments, it's not easy to just check that they are false. If one wants a world dominated by the wealthiest and one simply places no value on anyone else, then such a moral theory is perfectly sound. Likewise, if one is convinced taxes are theft and immoral then it can follow from this that no one should be taxed even if that means collapse of government and mafia rule, and it can also follow from this that lowering taxes of the rich is good to support even knowing that the rich won't reciprocate and lower everyone else's taxes to the point of collapse of the justice system, infrastructure etc (as it's simply the right thing to do).

Of course, few people really have values compatible with wanting a much worse society with much more suffering because taxing the wealthy is a worse crime, but it's much more work to carry out such an analysis and it will be different for each person what exactly their values are and why exactly a functioning society is better than a dysfunctional one for them and to what extent they would lift a finger to promote actions leading to such a better society in their definition; i.e. moral argumentation is not universal whereas the whole purpose of science is to be universal (we can all follow the same observations to same conclusions; so once something really is well established the same body of evidence and argumentation is valid for everyone); hence, why science denialism dressed up as some sort of moral crusade, including denying obvious economic realities, is at the heart of the movement for deregulation, lower-taxes-on-the-rich and legal corruption (which in turn corrupts various scientific institutions which helps, in part, to reinforce scientific denialism; i.e. regulatory capture of supposed objective watch-dog agencies as well a gaming, wherever possible, academics to be biases or at least easily pliant, leading to lot's of ethical failures that can be legitimately pointed to as examples of why self-labeled scientists and institutions cannot necessarily be trusted). Switching to moral arguments allowed 1 or 2 more decades of effective propaganda, but these arguments too are now losing effectiveness and methods of interpreting science without deference to experts have been developed (investigating conflicts of interest, better explaining the actual evidence and logic and evaluating how strong the evidence is or if it's just people paid to say-so).

Basically this “new” research is just reinforcing what Marxists have always been saying. — Pfhorrest

But without the Hegelian baggage.

Libertarian socialism and left libertarianism are views that address those underlying rules to fix the problem without state intervention — Pfhorrest

While I was in college, many years ago, Libertarianism seemed poised to become a viable third party in the US. What happened? Libertarians are now usually found on the right aisle, and are mainly allied with the Republican party (I suppose because they are opposed to state intervention). I'm a Militant Moderate, so the current move of both parties to extreme positions make it almost impossible to meet in the middle. So nothing of substance gets done. And the only way out of the impasse may be a Marxist versus Fascist revolution. Are there any Philosopher Kings out there for 2020? :sad: