[ternnoburn]

I think it's human nature under capitalism. I think before the 1800s there were loads of different societies that valued things like community and mutual support over "got mine".

This is the fundamental assertion of anarchism -- people generally like helping each other and like feeling useful. If basic needs were covered, we'd use most of our time doing things that felt meaningful, and those things would make everyone's lives better.

[photonthug]

I mostly agree but propose another amendment: this is human nature under late-stage capitalism. Capitalism is pretty great in the beginning / middle, and can go on for a very long time in such a way that the interests of corporations, consumers, labor, and governments are all basically aligned. Late-stage is a very different game in all respects though.

One risk we are facing now is that when most of the people alive have only seen the perversions of unregulated and unapologetic late-stage capitalism, they will think this is what it always has to look like. The impulse to switch to a polar opposite or burn everything down is ill advised but becomes hard to ignore.

[ANewFormation]

So many modern problems can be traced to 1971. [1] That is the year that the US defaulted on our obligations under Bretton Woods effectively ending the system and causing currencies to become completely fiat, enabling governments to effectively print unlimited funny money.

This perverts capitalism so hard because you now end up with tens of trillions of dollars being dumped into the economy in horribly inefficient ways and so behaviors that make one likely to get some of this become far more economically relevant than just making the best product.

Our current economic system is obviously completely unsustainable at this point and may well end up being one of the shortest lived economic experiments ever. That's particularly ironic because, as you alluded to, for most of everybody alive today this is just how it's always been!

[1] - https://wtfhappenedin1971.com

[mschuster91]

> So many modern problems can be traced to 1971. [1] That is the year that the US defaulted on our obligations under Bretton Woods effectively ending the system and causing currencies to become completely fiat, enabling governments to effectively print unlimited funny money.

Correlation != causation. Yes, the end of Bretton-Woods certainly played its part, but there are other independent causes for most of the things that can be seen in the graphs - first and foremost, the oil crises of 1973 and later and the impact of the policies of Nixon, Reagan and Thatcher, as well as simple but massive technological progress that made the economical shifts (such as the decline in agriculture and industry as a share of the economy) possible in the first place.

Automation and IT in general are the largest drivers of the latter - more efficient and powerful diesel engines made a lot of farm labor all but redundant, and IT enabled constructing and orchestrating ever larger and larger things, all the way from machines to global sized corporations, and the resulting efficiency gains of scale were mostly looted by the rich elites.

[ANewFormation]

There is one straight forward causal mechanism - excessive money printing sends the monetary supply skyrocketing and directly drives inflation.

It's not hard to deal with inflation for the wealthy. You will generally have substantial wealth invested in inflation resistant appreciating assets, businesses can pass the inflation on to the customer, and so on.

But for labor it's a different story. Not only do you suffer far more from price increases with little in the way of offsetting assets, but inflation allows wages to 'secretly' grow stagnant or even decrease.

What I mean is that since e.g. 2020, the CPI has increased by 18%. So if you're not earning at least 18% more, you're more earning less than you did in 2020.

Without inflation this doesn't work. Workers' raises would actually increase their real earnings.

It's not hard to see how this single issue causally drives much of what happened in 1971 (and beyond.)

Notably the excessive money printing began somewhat before 1971 which is what caused the default that eventually happened in 71.

[camgunz]

Everyone agrees inflation is bad; what we don't yet really know is if it's worse than unemployment. The way the existing system works is if inflation starts to rise, the Fed raises the interest rate, hiring slows and people get fired, and this constricts the existing supply of money thus reducing inflation. But if you don't do that, and instead just put up with inflation, people get and keep jobs, so all you then have to do is make sure wage growth meets or exceeds inflation.

Politically this ended up not working (no pun intended). People explain this by saying losing a job affects that person whereas inflation affects everybody, but personally I put it down to the right demagoguing inflation as the sign of an incompetent government (it turns out it was transitory and the result of supply shocks--maybe not a good reason to throw millions of people out of work).

We'll never know the counterfactual, but the US managed this economic environment better than any of its peers, so honestly I don't know what a good faith criticism would even look like.

[somenameforme]

A term you definitely want to look up is "exporting inflation" which is largely why the US has thrived while others - well not so much. [1] This manifests in many ways, but I'll offer a simple example. The US remains the largest consumer economy in the world. So imagine you're Carland where your economy is mostly selling cars, and mostly to the US. And now imagine the US prints a bunch of money causing their currency to become worth less relative to yours.

At a first level analysis this sounds great because now you get even more dollars per car! But in reality that's not what happens. Instead US customers can't afford your cars anymore and so turn elsewhere and your economy, which is dependent upon the US, would start to decline and possibly even crash. So the solution? You print money and intentionally weaken your own currency - helping to eliminate the relative US inflation! Now the US inflation has transformed into real growth (for Americans) and you've 'imported' their inflation, but can at least continue selling your cars. So your economy stumbles on for another day while the US economy only grows larger.

But in contemporary times many of the factors that enable the US to export its inflation are gradually declining. And when you look at many of our economic indicators, without any particular 'superpowers', it's not so pretty. For instance our peers in debt:GDP ratio (4 worse, 4 better) are: Greece, Italy, Bahrain, Maldives, Laos, Cape Verde, France, and Bhutan. Not exactly the economic peers one wants.

[1] - https://search.brave.com/search?q=exporting+inflation

[mschuster91]

> People explain this by saying losing a job affects that person whereas inflation affects everybody, but personally I put it down to the right demagoguing inflation as the sign of an incompetent government (it turns out it was transitory and the result of supply shocks--maybe not a good reason to throw millions of people out of work).

The problem is, prices didn't fall (mostly due to corporate greed - corporate profits exploded in comparison with inflation [1]), and many people are worse off than they were prior to the pandemic, even after some of them got wage increases that in many cases didn't even come close to matching inflation.

The Biden administration could have done more to combat this but didn't, and Trump campaigned on that failure. The real issue is that the US desperately lacks any viable third party option which means, combined with the radicalization of the Republicans over the last decades, that there is no way of holding the Democrats accountable without electing ever more utter crazies.

[1] https://groundworkcollaborative.org/work/inflation-revelatio...

[camgunz]

This comes up on HN all the time [0] and it's complete garbage. Japan has a fiat currency; how have they dodged inflation? Where are the successful non-fiat economies? If there's some kind of moral hazard with printing money, why is one of the Fed's 2 mandates to keep inflation at 2%? Why aren't they constantly printing money? Why isn't inflation 1000%? How long do we have to wait for this conspiracy theory to prove out?

[0]: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

[somenameforme]

Japan is probably not the example you're after as it isn't the country many of us remember from back in the day when it was rivaling the US for economic dominance. Their economy has been in recession/stagnation for about 3 decades now. Their stock market is now finally above where it was in 1989, up 1.5%. [1] Though that will probably be short lived, especially as their population is now dying off fast enough that even places like Tokyo are declining in population! It's a great recipe for affordable housing, keeping inflation manageable, and much more. Probably not an advisable path to go down though!

An example of a successful non-fiat economy would obviously be the US. Until 1971 we had various forms of backing to our currency. After 1971 we invented this abomination of a system which probably only lasted as long as it did thanks to the growth of digital technologies making infinite growth, to meet infinite debt, briefly sustainable, all be it only with rather dramatic consequences, particularly for the lower half of society.

[1] - https://tradingeconomics.com/japan/stock-market

[camgunz]

The only real problem the Japanese economy has is their top-heavy population, which isn't a result of monetary policy.

By your own metric of Japan's failure (stock market value), the US economy has excelled tremendously since 1971 (yes, even adjusting for inflation), so now I'm confused about what argument you're making. I also assume all the other points I made stand.

[somenameforme]

The point with Japan is that their economy is completely stagnant. It's entirely possible to see a healthy growing economy without having runaway inflation. Again, the US was the obvious example. The Campbell's Soup Index is quite a visible illustration of how radically things changed. But with our current system you get endless inflation that negatively affects vast swaths of the population to the benefit of a relatively small percent. Or you get Japan - which went from competing for the world's largest economy to having a dead economy.

As a side note, population age ratios are directly determined by fertility rates. And we went from a system where people were comfortably raising family on a single income, to one where full time workers living alone are, in many cases, not exactly thriving, let alone trying to raise a whole family on that income. Most developed economies are seeing fertility rates plummet and it's entirely possible that monetary policy is indeed playing some potentially significant role in that!

[kmeisthax]

The end of the Bretton-Woods agreement is not the root cause; that in and of itself is downstream of the US government prosecuting a bullshit war in Vietnam for the last decade and change. To be clear, this is not the US government "perverting capitalism", this is the capitalist class abandoning a fiscal constraint they found inconvenient in order to continue a pissing match against the existential threat of communism. There is no world in which capitalism stays under a "sound money" gold standard, stops fighting interventionist wars, and doesn't immediately either get cornered by the Soviet Union[0] or obliterated by an ascendant American left.

With few exceptions, the government in the US acts on behalf of the capitalist class, not in opposition to it. There is no "pure" capitalism that would exist if the government just left free markets alone. Capitalists won't leave the free market alone. Capitalists will take ownership and control over the chokepoints of the economy, government or no[1], granting them their own sovereign territory they can levy taxes on. This is a state - a monopoly on the legitimate use of force - whose territory is not of a city or a nation but of a market niche.

This system is sustainable in some ways and not in others. Yes, the market is distorted, which means it sucks for us, but the people who own the market-state don't actually feel that punishment. Which means they won't stop. Something has to actually force them to stop.

[0] Analogous to how the PRC has cornered the modern neoliberal west today.

[1] To be clear, nation-states are also culpable in this process, both through sins of omission (failing to enforce antitrust law) and sins of commission (creating legal monopolies that form new economic chokepoints to conquer)

[somenameforme]

But Bretton Woods is indeed the root cause, because the entire system was a bit of a Trojan Horse (or at least turned into one). Why doesn't any random country just go print trillions of dollars, import what they can't locally produce, and boom - call themselves an advanced economy? It's because demand for their currency would plummet in other countries, and in their own country they'd do little but create runaway inflation and probably become the next Zimbabwe.

But when the US did this it was very different because with Bretton Woods we had already established the USD as the global currency to be used in international trade and settlement everywhere. So countries were unable to move away from the dollar as fast as they could other currencies. And in the interim we started setting up the Petrodollar to prevent them from doing this - by making it impossible to buy the most in-demand commodity in anything other than USD - making fighting against the dollar futile.

But one of Biden's many 'accomplishments' was pushing Saudi Arabia far away enough that they chose to not renew the 50 year Petrodollar agreement, which ended on June 9th 2024. This means now that the USD is completely and absolutely free floating with no backing, indirect or direct. And you can see this in which currency countries are holding as a reserve currency. [1] Just before Bretton Woods it was about 85% USD. It then plummeted (after the Bretton Woods default) and then bounced back to reach a peak of 72% in 2001. It's now down to 57% (Wiki table has not been updated with latest numbers) and continuing to steadily decrease.

As soon as a viable alternative currency emerges, the USD will collapse - and this entire economic system alongside it. Trump's ideas aren't so much radical as he is simply saying the quiet parts (probably as a result of intelligence briefings) out loud. This entire thing is why he's threatened 100% tariffs if BRICS countries try to replace the dollar. Of course tariffs from what would be a collapsed economy have far less weight behind them than e.g. the lack of access to oil. So the interesting times we live in are certain to continue for the foreseeable future.

[1] - https://en.wikipedia.org/wiki/Reserve_currency

[camgunz]

> This means now that the USD is completely and absolutely free floating with no backing, indirect or direct.

All fiat currencies are backed by the strength of their economies. The US denominates its considerable goods and services in USD. That's not nothing.

Literally all advanced economies use fiat currency, but only one benefits from petrodollars. Shouldn't whatever bad thing you think will happen to the US now already have happened to them?

[somenameforme]

No, fiat currencies are backed by the belief that the government will not abuse their ability to print money. The reason one backs their currency with a metal or whatever is not because that magically does anything in and of itself. All it does is constrain government's ability to excessively print money (and a guarantee of the continuation of such) which is important because printing money is highly rewarding and incentivizing in the short run, but catastrophically damaging in the long run. If a government acts responsibly with their monetary policy the difference between a fiat and backed currency is academic, outside of the guarantee of this behavior continuing indefinitely.

Most countries in the world have been abusing their currencies as a 'hack' for growth. The need for infinite and accelerating growth to fuel the infinite and accelerating debt caused actually seemed briefly sustainable thanks to the computing and internet revolutions. Granted you still have the zillion other negative effects (as per the wtfhappenedin1971) site, but you can at least keep moving forward because the peasants (who are the most negatively affected) will just take it anyhow, so long as they have bread and circuses.

But as soon as you stop the accelerating growth, you get drowned by your own decades of YOLO debt, faith in the currency collapses, and your economy right alongside.

[zanellato19]

Since the beginning of capitalism involved owning slaves, I find that very hard to believe.

This romanticization of early stage capitalism is awful. What is late stage capitalism? Because civil rights and women rights have been pretty recent in the grand scheme of things, so in that sense Capitalism was upheld and had most of its lifetime in a scheme that crushed the majority of its people I find the theory of:

> Capitalism is pretty great in the beginning

really hard to swallow.

[__MatrixMan__]

In the early days of capitalism there was plenty of authentic scarcity for it to work against. Its problems probably weren't any less, but the juice was plausibly worth the squeeze because the alternatives were terrible.

Now, most of us are working to maintain artificial scarcities, rather than mitigate authentic ones, and there are a lot more of us. So the a randomly chosen effect of our system is more likely to be negative because it's being chosen in a context that's very far from that long lost age when capitalism seemed necessary.

I think that's what makes it late-stage, when it's found to have more side-effect than desired effect. Like a yeast which started turning sugar into alcohol at a prodigious rate but then later the alcohol concentration is toxic to it and more effort is spent trying to filter it out than anything to do with its original purpose.

[error_logic]

Capitalism is still necessary, we just forgot what it took to save capitalism from itself during the great depression and have opened ourselves up to turning into modern Russia.

[isk517]

Not a die hard defender of capitalism by any means but this is a gross over simplification. If you look at all of the alternatives during the early stages of capitalism the vast majority had oppression as a built in feature. It didn't bring about utopia but it did offer the best advantages over the competition, up until the competition all went under.

[error_logic]

If everyone has destruction of the competition as their primary goal, everyone suffers. The voting system itself incentivizes that, and now competition is going to be driven underground and emerge destructively just as it did in the USSR.

Extremes of left and right-wing politics both require excessive force to implement.

We need a voting system that will overcome the nash equilibrum of mutually assured destruction by assigning weights to the outcomes of collective responsibility for our interactions, not just "be selfish or not" on an individual level or "stay in the frying pan or put some people in the fire" politically.

[__MatrixMan__]

Can you expand on this weighting idea you have re: voting?

[isk517]

I image they are talking about something like ranked choice voting. Australia currently uses a system like it instead of first past the post. From what I've heard it doesn't really stop a 2 party system from forming, but it does keep it stable because political parties can see which way the wind is blowing. If 40% of your vote came from people that had less extreme party as their first round choice, and 10% of your votes came from people that had more extreme party as their first round choice then you get a good idea of what the majority of your voters actually care about.

[zanellato19]

Sure, but the least awful of all awful is not great. Capitalism was the _least worse_ of the options we've seen. And even that can be debated, imo.

[photonthug]

> Since the beginning of capitalism involved owning slaves, I find that very hard to believe.

If you look into this a little bit more, I think you’ll find that the institution of slavery doesn’t strictly require any particular system of economics, government, or religion.

Anyway, you are misunderstanding what I meant by early / late capitalism.. it’s not just about specific calendar epochs like 1950-present. What I’m referring to is that any new market will have early/middle/late stages that are pretty distinct from each other. A new market might be created by new policy (say a change in import/export restrictions) or by new technology (like the internet or AI) or by new frontiers (like the East Indies before, and outer space soon). Late stage here just means the real ideation and competition is basically finished and now it’s time for consolidation, M+A, integrating vertically, optimizing exploitation/extraction, enshittification, etc.