[nicoburns]

Disproportionately large incomes also cause significant problems to capitalist societies, because our market system is predicated on the idea that we indicate our preferences by spending our money on the things we want. That system breaks down when a significant proportion of the wealth is controlled by only a few people, leading to many of the same problems you get in planned economies that have a similar concentration of power.

[bjornsing]

You switched from spending money to wealth. That exposed a weakness in the argument: it’s only when wealth is spent that the problem arises (if it exists at all).

[TheOtherHobbes]

No, because wealth is a monopoly over money, and holding on to wealth means someone else cannot make decisions about spending that money.

The problem doesn't just exist, it's very obvious and pressing.

And ultimately it leads to huge distortions in democracy and policy at every level.

There's a good case to be made for the assertion that any economy that prioritises the wealth of a very small number of individuals over eliminating poverty for most of the population is fundamentally and unavoidably unstable. At best it will be unable to operate as a functional democracy and at worst it becomes an oligarchy where inherited privilege trumps any real prospect of social mobility.

The fact that the US scores very poorly on objective measures of social mobility compared to more redistributive economies only reinforces this.

[WalterBright]

> No, because wealth is a monopoly over money, and holding on to wealth means someone else cannot make decisions about spending that money.

This implies that people become wealthy by taking money from others. This is not correct, people become wealthy (in a free market system) by creating wealth. The money supply automatically increases because of that.

There isn't a monopoly on money - anyone can create wealth.

[nicoburns]

This is more of an ideal than a reality. Anyone can create wealth, but it's not so simple to convince someone to give you money for it. A lot of value is generated and given away for free (Open source is perfect example. Other people might point to the work involved in raising children or running a home), and plenty of people manage to gain control of bootloads of money without providing any value (or even negative value).

A free market is an approximation of value at the best of times: at best it represents people's estimation of that value given the information available to them. But in real societies it's not even that good, it's distorted by power differentials. One of the most significant being wealth disparities. In a hypothetical society where everyone had equal wealth then a market does distribute wealth to at those people who others think are providing value. But as soon as there's a wealth disparity then people with more wealth have proportionally say over where money gets distributed and thus money accrues to what those people consider valuable. The greater the wealth disparities that exist the further away this gets from distributing money to those who truly create wealth.

[apocalypstyx]

The mere potential for spending would create a distortion/bias in favor of/in the direction of larger pools of accumulated capital prior to any expenditure and in spite of whether or not any specific potential expenditure were to take place.

[WalterBright]

> leading to many of the same problems you get in planned economies that have a similar concentration of power.

Yet it seems that the overwhelming bulk of products and services in the marketplace are designed for broad market appeal, not just to 1% of the population. For example, in Seattle, I don't even know of any stores that target the 1%.

McDonald's is one of the biggest (or the biggest) restaurateur, yet it clearly is targeted at pretty much everyone.

[kebman]

What you're talking about reminds me of the horseshoe model of politics. I've always found it fascinating how corporatism is so similar to aspects of communism, or how communist bureaus in some ways are very similar to corporations with huge market shares (de facto monopolies, with only token competition being allowed). A corporation of course works under the system of capitalism, which is often said to be the antithesis of communism. Yet the outcome of either model goven monopolist tendencies and largesse is strangely similar.

[tartoran]

Having experienced both I confirm that there are a whole lot of similarities between the two

[simoom22]

In political economy literature, the Soviet Union is often called a "state capitalist" type of economy rather than communist. It functioned as a giant corporation in global capitalism. https://en.m.wikipedia.org/wiki/State_capitalism