Capitalism and the inevitable funnelling of wealth

I think there are cycles of power and wealth concentration in any given society.

Wealthy/Power naturally accumulates IN ANY CONCEIVABLE SYSTEM because the more you have of it, the easier it is to gain even more of it.

So wealth and power accumulates. This has a cost, both politically and economically. Eventually the society collapses when the accumulation reaches a certain point.

A whole paradigm change occurs and a new system of governance emergences along with a new vibrant economy and a new golden age follows

and then everything goes to the shitter once again.

>/pol/ and Veeky Forums are both to ideologically driven to discuss politics in an intellectually honest way

Unfortunately we are littered with engineers here so the discussion won't be so much better.

However mathematicians and physicists can be really good at thinking about these things without bias since they are mostly politically apathetic.

There's a wave of disenfranchised youths in America that are investing their time and energies in all kinds of non-market solutions - Neoliberal capitalism is working perfectly in the eyes of the government and they have no incentive to change. Research hacker / maker spaces and the concept of dual power institutions. It's the idea that if people are presented with a viable alternative to the rigors of capital then it will only be a matter of time before everyone jumps ship for a bigger slice of the pie. The trick is maintaining a DPI with lots of support and minimal interference. The hacker collective soon becomes the 'rogue cyber-terror group' if their objectives don't align with imperialist American interests, ya know

Fundamental theorems of welfare economics: A market tends to a competitive equilibrium which is Pareto-optimal (under some assumptions) and any desired Pareto-optimal equilibrium can be reached. (Actually they need a more precise writing, but you get the idea). The first one can be seen as the mathematical proof of Adam Smith's Invisible hand of the market.

en.wikipedia.org/wiki/Fundamental_theorems_of_welfare_economics

>Eventually the society collapses when the accumulation reaches a certain point.
Post hoc, ergo propter hoc.

I think technology naturally leads to unequal wealth and income. But that doesnt necessarily mean the non-wealthy are worse off.

Suppose that the next ten years of technology lead to economic efficiency that both doubles inequality, but halves the cost of living. True, it might be harder to compete with economic giants who can capitalize on such efficiency, but theres also less need to compete. If in the future, one only needs to make $10,000, to live at a standard of living typical of $50,000 in income, then one is better off ceteris paribus.

You should check out "the origin of wealth" it is an introduction to complexity economics
I wish I could find individual papers on complexity economics but have no idea what to search for

You could check out Peter Turchin as well, he deals with cycles of inequality. Though I think he is bit overconfident on the predictive powers of his model.

I used to be heavily involved in a non-profit hacker space that was relatively successful. It lead me to getting a job at a snazzy start-up that wanted their own hacker space, and I ran that for them. I have years of experience running hacker spaces, and years of technical experience outside of that.

You don't know what you are talking about. I don't like to appeal to my own authority, but it's not feasible to argue about this with you. So I just want to say you are a loon.

Capitalism should be left fully unregulated. Freedom brings about progress and wealth because free markets work.

Read Atlas Shrugged.

Nah there needs to be some order and negative feedback loops for complex systems to function properly
At least that's how I understood it, I could be wrong but that's what've learned

wealth isn't measured just by money, and inequality isn't inherently bad. If a person buys a fridge, for example, her quality of life will improve vastly in case she didn't have one before, but she'll also be poorer and inequality will grow.

>but she'll also be poorer and inequality will grow.

That doesnt make sense. Her income won change, so income inequality wont change. Her wealth will change somewhat, but not at the price of the fridge, because a fridge is also wealth. Wealth inequality wont change much.

You might want to read Piketty's capital in the 21st century, if you haven't already. Yes, wealth does tend to concentrate. This process is usually reversed only by world wars

>I've only ever read Atlas Shrugged: the post
>let me dazzle you with my meme economics

>This process is usually reversed only by world wars
This is also what Peter Turchin finds though he talks of conflict instead of world wars. There was another recent book by an economist called "the great leveler" which claims the same.
>Yes, wealth does tend to concentrate.
This was what happened in the sugarscape model.

I mean, I was mostly poking fun about the terror group thing, but I do believe that dual power is an important step forward, whether it be a hacker space or mutual insurance or whatever else. I am not under the assumption that hacker spaces operate as some kind of homogenous radical digital vanguards that would be silly

Whats a dual power institution? I googled "dual power" and the first results were about Lenin and Marxism. Not less looney than terror group or digital vanguards yet.

Dual Power is a fancy way of saying 'We're trying to create alternate frameworks for society outside of capitalism'

and yeah, it's a Leninist philosophy RE 1917 revolution
I suggest this article for a better explanation of what that means in a contemporary setting

left-liberty.net/?p=265

Also a bit from the Dual Power in Russian Revolution Wiki for a more modern take

"Libertarian socialists have more recently appropriated the term to refer to the nonviolent strategy of achieving a libertarian socialist economy and polity by means of incrementally establishing and then networking institutions of direct participatory democracy to contest the existing power structures of state and capitalism. This does not necessarily mean disengagement with existing institutions; for example, Yates McKee describes a dual-power approach as "forging alliances and supporting demands on existing institutions — elected officials, public agencies, universities, workplaces, banks, corporations, museums — while at the same time developing self-organized counter-institutions."[5] In this context, the strategy itself is sometimes also referred to as "counterpower" to differentiate it from the term's Leninist origins."

You have to be 18 to post here.

governments are puppets

that's retarded though, it would always result in severe wealth inequality and monopoly. But it's even more retarded today, when we already have severe wealth inequality and monopoly, freeing up the market in this climate would amplify the issues. There would be no restrictions, the people won't have any way to influence and restrict them either.

>Post hoc, ergo propter hoc

It collapses because there is a cost to wealth concentration and same for power consolidation in the hands of the elite. It's not healthy for the economy, nor for democracy.

>>As you all know capitalism is great so long as it's controlled

The literal textbook definition of capitalism is that government does not control anything and private owners control everything in terms of regulation.

So you're basically saying capitalism great as long as it isnt capitalism. You cant have it both ways. What youre asking for it plainly contradictory.
The more government steps in the less it is capitalism. You seem confused OP.

We were expecting you Mr. Engineer.

Who gives a shit what you call it. It is what it is.

le engineer meme XD

.. of the people!

> The literal textbook definition of capitalism is that government does not control anything and private owners control everything in terms of regulation.

Find me a textbook that says that. "Capitalism" is some what vague, but clearly refers to capital ownership, and presumably the ownership of things produced by that capital. Its hard to imagine any real property rights existing without an existing government, therefore government is implicit to capitalism.

...

None of this matters because the system that 'capitalism' tries to describe is currently not even being employed. It is merely a phoney simulation everyone in power has agreed to perpetuate ever since the idea of quantative easing was put in practice.

Central Banks aren't supposed to buy stocks, but they do these days, and massively.

Greece is a scary forecast of what kind of humanitarian crisis can emerge once the loaning stops and you can't default on your currency.

Actually, let me correct myself. Not everyone in power is comitted to quantative easing. Russia isn't, for example.

You basically need a strong populist president to come in and break up the trusts.

Too bad the current populist president is only president because of said concentration of wealth.

Thomas Piketty is intelectually dishonest. Read Carlos Goes' article discussed in IMF about that book. Piketty frauded data to prove his point.

As for OP, capitalism shouldn't be regulated, you should study Austrian Economics (maybe starting with Mises' 6 lessons). Sadly capitalism is already regulated (a lot)

>the economy works by making it good to make money
>WHY DO PEOPLE WHO HAVE MONEY HAVE IT BETTER WTF

communism is shit

Memes aside capitalism works great without regulation, it actually is the natural state of human cooperation in the grand scheme of things. It forces people to provide goods or services that people need or starve.
People that are stupid rich usually need government protections on their wealth or use the state on their benefit.

>Thomas Piketty is intelectually dishonest. Read Carlos Goes' article discussed in IMF about that book. Piketty frauded data to prove his point.
Carlos Goes argues that correlation does not equal causality, which is fair enough. I've wondered about the same thing when I read Piketty. But it still doesn't address the original claim, that wealth tends to concentrate, even if we disagree about the causes of that wealth concentration.

Just as an aside, you are familiar with the inherent flaws of capitalism, are you not? Flaws such as the cyclical nature of capitalism? Long term and short term debt cycles?

Do you really think it works that way in practice?

In capitalism if you have money it's harder to lose it and easier to make more, provided you dont bite off more than you can chew.

What do Russia do that separates them from the rest of the world? I'd argue they do exactly the same.

>data fraud

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All the right-wing propaganda economists immediately tried to tear Piketty a new one and they created all sorts of false claims.

There was no data fraud. Piketty and the economics community put those countered those claims immediately, but the right wing hatchet jobs kept spreading the rumours (or shall I call them fake news now?).

>Austrian Economics
>Mises

You guys live in an alternate reality. This stuff is like religion to you.

>funneling of wealth

It's interesting how people choose words. Wealth is not being "funneled"; in capitalism, people can create wealth.

Bill Gates created billions (maybe trillions) of dollars worth of wealth by producing a product that people valued more than the money it cost them. They were better off, Bill Gates was better off. He created wealth, not " funneled" it.

>You guys live in an alternate reality. This stuff is like religion to you.
You are the one who lives in fantasy land, and who doesn't understand basic economics.

A higher standard of living is achieved through higher productivity, and that is achieved by letting people free to think and produce, and by not taking away their incentive to do so (taxes).

Free markets are obviously the key to prosperity, and anyone who argues with this at this point is probably a moron.

How could you fix the issue of wealth concentration through monopolies, leading to the inevitable moment the markets become so saturated you will HAVE to work for one of the said monopolies.

Look how well the media monopolies have been treating us. Forging cleverly constructed propaganda, giving us bias new and shaping our government elections.

Freeing the market will only make these situations all the more common.

Steve Jobs didn't create anything you retard. He was just a CEO. The kids in child are making the phones.

He also didn't create any wealth. That money came from the consumers.

>basic economics

Oh here we go again with the pretension and the arrogance.

When will you engineers learn some humility?

Well sure, you can make your simplistic worldview of reality seem peachy when you construct a fantasy like that.

What Bill Gates did, in fact, was use his wealth and connections, that he had prior to ever earning a dime himself to sell his very rudimentary and inferior software to big state and corporate entities. He kept bribing governments worldwide to buy his inferior software and that's how he ended up with his billions.

If Bill Gates didn't exist, we would all be using superior software.

>Steve Jobs didn't create anything you retard. He was just a CEO. The kids in child are making the phones.
What you just said is equivalent to saying that the mind plays no role in wealth creation.

Those workers are doing what the CEO, engineers, scientists, etc tell them to do. Without someone doing the thinking and giving the orders, manual workers wouldn't know what to do and everything would go to shit. Retard.

>He also didn't create any wealth. That money came from the consumers.
The consumers gave him their money voluntarily, and they did so because they valued more that iPhone than the amount of money it cost them. They were better off, and Jobs was better off after that transaction. Win-win. Wealth creation.

For those interested in this stuff, read Ayn Rand, like I said in a previous post.

Pseudopol thread

Not even close.

Steve Jobs created Apple Computer Company and guided it to become the titan it is today. Without it, Apple would have been Steve Wozniak putting blueprints for snazzy home electronics in hobbyist magazines.

>the only capitalism is anarchocapitalism

>capitalism works great without regulation
Ahahahahahahahahahaha
Monopolies and corporatism are the natural stable endpoint of an unregulated market, they just give the maximum profit for a company and the incumbent company will do whatever it can to maintain that monopoly by artificially raising the barrier to entry, with anticompetition practices or above board things like buying manufacturing factories like Apple has done. Even in regulated markets where the formation of overly large , you

The natural state of human cooperation depends on how large the human pack is, for Hunter gatherer packs I'd say it's closer to anarchosocialism, for small solely agricultural societies its socialism, and for larger (but still very small) pre-industrial societies its anarchocapitalism. But anarchocapitalism only works there (if at all) because of the high social pressure on the owners to not fuck over people for money and rapid retribution if they do (impossible for the untouchable super rich shareholders) , as well as the high dependency of any business owners on small numbers of people (compared to the huge number of consumers shareholders have at their disposal in larger industrialised societies)

Yes stupid rich people use government protection. Without that they'd use private protect and have even less oversight from the people (since the state is there to and would be even more free to do whatever they want, since might makes right.

>>

Taxes don't act as an incentive to stop producing. It's absolutely twisted logic to think that getting a slightly decreased increase in money means people stop working harder. And, taxes work to ensure people are able to think and produce by funnelling wealth back into education, and keeping people safe through public services.

>inb4 muh private enterprises can do all the things
Enjoy your underclass of poor people who get subpar education and are doomed from the getgo to stay in the same socioeconomic class if not slip down further. That's not even mentioning that the poor won't be able to receive public services like police and firemen

>inb4 muh charity and voluntaryism

>be engineer or scientist
>create a new technology worth billions of dollars
>still just get paid your $65k a year salary
>Mr. Shekelberg says "look guys, it was ALL ME" and pockets the money
>you get laid off in a few years when Shekelberg decides to liquidate for a quick buck

>I thought the best place to start would be here.

Fucking hell user

Also you don't get taxed on the reinvested part of the revenue so actually taxes should incentivise innovation because you can retain wealth by reinvesting and growing your business instead of taking the revenue as profit and getting taxed on it.

Also if there are no taxes there is less incentive to not simply bag the revenue as profit. You are always taking a risk when reinvesting whereas profit is profit.

Funny how all the economic reasoning is inverted for all these liars from the right-wing. Funny how it always ends up being something that favours the rich.

Funny that. All right-wing policies magically end up favouring the rich. Weird coincidence.

I cannot stand the pretence any more. Right wingers are not intellectually honest. Bunch of liars and snakes.

> Implying the private sector won't be better at running our country than our pitiful excuse for a government.

Have you seen most government agencies? They are their facilities are normally complete shit compared to the private sector. Why do you think so much work is outsourced to private contractors these days?

and who do you think that all that money is owed to?
take your time friendo

Monopolies are only created through government favoritism. Less regulation combats monopolies and promotes competition to the benefit of the consumer.

>That'll be a $100 fee for using your Jumbo McFreeSpeech on the internet
>Thank you for doing business with Apple-Boeing-Sachs Corp., your friendly and exclusive choice in government

>I don't know what regulatory capture is, the post

Thats the problem with big govt., people can buy influence. Remove much of the govts power and corrupt fucks wont get any power over regular people.

Stop buying their shitty product if you dont like it. Can you opt out of paying for shitty government services? Nope gotta pay for gibsmedats for scum.

>opt out out of basic services like roads, police, the fire department, regulators making sure the food isn't poisoned
???

Why not just move to Somalia so you can live in paradise? Oh right, because only third-world African would be dumb enough to actually implement the retarded policies that you're proposing.

So what's going to stop the newly deregulated monopolies from pushing for new regulations that are friendly to them? You didn't think that far, did you?

>muh roads and muh somalia
Somalia is several military dictatorships not minarchist or libertarian in any sense

The fact that the government doesn't allow the initiation of force? If they cant force you to follow their regulations, then those are pretty ineffective regulations. They could force you to follow the regulations if they were in bed with government, which they all too often are.

What the fuck are you talking about, capitalism doesn't favor the wealthy, hedge funds rarely beat the market average.

The majority of the world's governments are aiding corporate capitalism in the generation of a globalist government controlled by a plutocracy.

Wow this is still up. Veeky Forums mods officially kill

>capitalism doesn't favor the wealthy

>implying a single engineer created billions of dollars of wealth
>implying a single engineer worked out the logistics of manufacturing, distribution, marketing, business orginization, patenting/legal, and human resourcing

Why is having a wealthy elite class a bad thing? Why is having huge wealth gap a bad thing? The value of money is directly related to the amount of money in circulation. Having big numbers sitting in bank accounts does little to the wealth you have, if anything it greatly slows inflation

It favors the poor too because competition encourages progress in distribution, technology, production, product diversity, and fairer prices.
You can't just make the government make people not poor, you will always have poor people as a result of freedom, but the lower class is better off now than EVER IN ALL OF HUMANITY'S HISTORY simply because of centuries of capitalism

What's inherently wrong with people getting rich? Consider people like Bill Gates or Steve Jobs. Is it wrong that they are so rich? They revolutionized the lifestyle of millions. They've earned their money. They created a product and sold it to people who wanted it. No one was forced into this capitalistic scheme, they just wanted nice computers and phones so they were willing to pay.

What is saying is that having strong government regulations allows scummy characters to take advantage of the system, getting rich without actually doing a service to anyone. People like pic related are just the ones you hear about. There are countless companies and old money that take advantage of the government systems for their own gain. There are selfish people in the world

Another reason is that we have no way of actually putting the right people in charge. The people that thrive in the government are not the nicest or the smartest or even the fairest. They are the best liars. Do you seriously think any politician writes their own speeches when they can just use their "fairly" given money to hire some public speaking specialist. All they have to do is look good on camera and sound reasonable. And boom they're in charge, with all the benefits the people have chosen to give them.

As long as they got their wealth fairly, there's nothing wrong with that. Wealth is relative, and in the actions of getting rich, one can elevate the common man. The average person can do things with computers and phones people couldn't dream of even a century ago. Our lives are better now due to the businessmen so it's fair that they get rewarded.

You are retarded. Capitalism is best when it's not controlled at all.

Oh yes, involving the private sector and mixing corporatism with state functions truly leads to brilliant results. Like the American prison system, for example, where corporations lock states into virtually never ending contracts and force quotas on the number of prisoners they receive, and do all they can to prevent prisoners that should be released being released, basically going against a prison's purpose. Face it corporate interests will lead to muddying the purpose of whatever function the private contractor is enlisted to do, just to make more money. Assuming you're American, you're literally just doing statism wrong. The American state is non transparent and is not there first and foremost to serve the public, though that is how it should be ideally.

>hedge funds rarely beat the market average.

For tax purpose.

Or do you actually believe that the rich are purposefully investing in assets that consistently get below market returns, lol.

In fact you get divide hedge funds into two groups. Self funded and outside capital. Outside capital ones are always below average and self funded ones are always above average.

It's all part of a tax scheme to obfuscate yearly capital gains.

>Have you seen most government agencies? They are their facilities are normally complete shit compared to the private sector.

ARE YOU EVEN IN STEM? LIKE SERIOUSLY HOW COULD YOU SAY THAT? HAVE YOU EVER BEEN IN A LAB?

Private labs are a joke compared to public labs. All equipment is old as fuck. Debilitated building and decade old processes.

>Why do you think so much work is outsourced to private contractors these days?

CORRUPTION you fucking dumbwit. The politician gets his "friend" to open a shell company. The shell company nets the way over budgeted contract. The shell company sub contracts to whomever and they take a big cut of that sweet tax payer money. Politician makes off with millions.

If you look at the 10 wealthiest people in the world right now, they are all inventors, innovators, men who have harnessed science and technology for the betterment of mankind. None of them inherited their wealth.

>capitalism is great...
...for the capitalists. For us peasants,
it's not so fckn great, Spanky.

Not any of the guys you're replying to but

>>muh roads and muh somalia
>Somalia is several military dictatorships not minarchist or libertarian in any sense
That's literally how people work when there's no state to maintain an agreeable monopoly on force. Read Hobbes

>The fact that the government doesn't allow the initiation of force? If they can't force you to follow their regulations, then those are pretty ineffective regulations. They could force you to follow the regulations if they were in bed with government, which they all too often are.

Virtually nobody is saying capitalism should be abandoned, Veeky Forums is overall slightly leftwing (at least relative to the rest of Veeky Forums) but not that left. What is definitely dumb though is this false equivalence of capitalism = anarchocapitalism, since one works and the other doesn't

Where do you people come from

>corporate monopoly is what unfettered capitalism leads to
>this monopoly can and probably will skimp on quality to maximise profits
>this monopoly can and probably will engage in anti competition practices, raise the barrier to entry stupidly high for any potential competitors, buy all manufacturing plants, blacklist, consumers that buy from their competitors or manufacturers that produce for their competitors (which is a big deal when the monopoly spans multiple sectors of the economy) and if they're rich enough and greedy enough (w hich they probably will be) , they may even engage in illegal (if the concept of "illegal" means anything in ancapistan ) practices like funding groups to steal from and destroy their competitors.

>bro just don't buy from them, go to one of your many other opti- oh wait
>bro just don't buy the product you need even though that neediness damages your ability to o be a completely rational actor

>t. Worthless individual with no skills

>You might want to read Piketty's capital in the 21st century,

debunked already google it.

Everyone benefits in a capitalist system rich people are rich because they provide value to others. If you actually provided value to others you'd also be rich.

you cannot have equality and freedom because people never behave the same and they only would through complete tyrannical control. Equality is Tyranny and Capitalism is Freedom. Social liberty and economic liberty are on and the same.

There is close to no country in the world that is purely capitalistic, all have a good amount of socialism in them to distribute the wealth more equally.

Also note that the increasing gap between rich and poor in the west is largely due to leftism destroying the traditional family, which used to be the primary and best working mechanism to redistribute wealth (e.g. doctor marries nurse, both are equally wealthy. today both remain single, now suddenly the society is statistically more inequal).

Economics favors the rich because they contribute more dumbfuck

>it's unbalanced in favour of the extremely wealthy.

Are you implying that any other resource distribution is more resistant to plutocracy than capitalism?

>Economics favors the rich because they contribute more dumbfuck

That's like saying, "the guy who has a monopoly on bread making deserves to own all the bakeries because he sells all the bread."

No it's not, you're fucking retarded

>for the betterment of mankind

That's the issue I have with your post.

That is not at all clear to me. Certainly they found a way to become rich.

However it's not at all clear that their product/service that we have to buy instead of that of the people they put out of business, is actually better.

For example, the world would definitely be better off if Bill Gates didn't bribe the world's governments and corporations to have Windows become the default operating system. It has always been the inferior software and still is to this day.

It's not clear to me that we are better of having Walmart/Amazon instead of the absence of Walmart/Amazon. I mean surely it's better for them but I'm not convinced that it's better for us.

>engineer calls others retarded

How cute.

For all you know I could be Elon fucking musk faggot

Somalia has government, in the form of warlords. Google military dictatorship or junta. Also I'm not advocating anarchism, libertarians still want a state, just a minimal one (night-watchman state).

To all retards saying they want "controlled capitalism", that's an oxymoron. You can't have a free market with SOME regulations just like you can't have a square with SOME additional angles.

Also, a little challenge to lefties, please provide a real world example of a monopoly forming without government interference. Monopolies only form out of government favoritism, there are no naturally occurring monopolies, this is because government can enforce restrictions with their use of military might. A company can't force you to buy their product, but the government can force you to buy a certain company's product (like how people were forced to buy health insurance from one company in the US, skyrocketting the cost of it.)

>Elon the engineer
>knowing anything about economics

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