> The amounts of money circulating whilst some of us struggle to make rent ...
It may be expressed in terms of money, but these are assets and capital. You wouldn't find a fab a very comfortable or satisfying place to live.
The reason the numbers get so big is the gargantuan accumulated savings that are prepared to fund the similarly gargantuan ventures. The large numbers are supported by maintaining and sustaining the capitalized value by profitable investment and depreciation.
When you talk about rent, while it may be expressed in the same unit (money), the economic function played is very different. Here, it is consumption rather than saving/investment. If the dollar equivalent of all those assets went towards paying rent, while it would secure housing for some time, it would eventually become completely exhausted, and so too would housing security. Large pools of assets are simply not a way to get stable housing, it would only consume the large savings society has accumulated to be able to undergo those big ventures. It would be short-sighted and harm us in the future.
The cause and solution to rental instability is to be found in housing, building, and land policy that restricts the production of housing.
That's right. Housing is not an asset to society or the economy, it's a drain that wastes money on preserving human life. Unlike valuable uses of capital like options trading and cryptocurrency.
Despite your reply obviously not being good faith, I will correct errors for others.
> Housing is not an asset to society or the economy, it's a drain that wastes money on preserving human life.
You are equivocating between asset in the sense of 'generally useful thing', and the sense I used above which is a capital good. Housing is obviously a useful thing and necessary, just as all other consumptive goods like food, clothing, etc. That makes it an 'asset' in the former sense to people (there is no such thing as useful to the economy, which is just an abstraction). But housing, food, and clothing are not assets in the latter sense. I.e., paying for housing is a consumptive act and not a productive act. There is nothing good or bad about either, the distinction is simply a distinction of economic function. Eating is important, but eating uses up resources; it is consumption. Cooking is important, but it is not eating, you don't get anything out of it until you eat; it is production. Both rely on each other, neither can be given up completely without harm.
Thus, a proper balance must be struck, because it would be foolish and self-destructive to only consume. If there was only consumption, then this would simply sacrifice your future and you would not be able to survive after you have used up what was produced before. The question is about whether you want a stable, regular, and lasting way to be able to have valuable things like housing, food, and clothing. To do that, you have to refrain from consuming your entire stock of assets, you have to refrain from using up all the resources you have. But that is what you would to if you took all the capital that companies have saved up and consumed it. The purpose of my original post was to point out that you can't look at production as if it were consumption, they have different roles and if you mistake production as an opportunity to consume, it is self-destructive.
Replying by ignoring this distinction and instead making a strawman will not prevent your perspective from being self destructive.
No, capitalism isn't a mistake, unregulated capitalism is a mistake. The solution is simple, don't let companies merge/acquire after a certain size. Capitalism works when there is a healthy competitive market. It doesn't work when there are 1-3 big companies all fixing prices.
The US right now is more harsh to live in than the US pre-Reagan, which was more harsh than many countries with a strong welfare state, but all of them are capitalistic.
Maybe, but you have very similar dynamics in China or other countries. At the root the problem is one of power dynamics, inequality, authoritarianism (whether legitimized by money or politics or both). Or said otherwise, an erosion of democratic and egalitarian ideals.
So what you're saying is that we all just need to become better gamblers? That doesn't exactly scream functional society to me.
Besides, this can't work for everyone - if you get 100 cars without an equivalent amount of more work put in then someone else has to do that work without being properly compensated for it.
It shifts the gains away from the marginal investor in Microsoft who was only willing to pay a penny less for those shares (probably an eighth of a dollar when this anecdote happened). Instead of them getting the 100 cars, the buyer who was willing to hit the ask earlier gets them.
That profit comes from owning a piece of a productive company, productive companies often spring from early-stage losses that require investment money from somewhere, seed stage money comes from the high likelihood that later stage money will come in if the venture appears successful.
> You're assuming the economy is zero sum, which it obviously is not.
That assumption does not follow from my statement.
What I do assume is that the easiest way to make money is to have money, which means that the rich and get richer and the poor get poorer. We've already seen that the rise of billionaires correlatives with an increase in wealth inequality and poverty.
> So what you're saying is that we all just need to become better gamblers?
It means take advantage of the free education you received. Make an assessment of what you enjoy and what you are good at. Select an opportunity in the intersection of those two endeavors.
People start businesses every day in America.
> Besides, this can't work for everyone
Wealth is not zero sum. If you create wealth, that does not mean someone else must be worse off.
China going capitalist ( while remaining authoritarian ) has helped lift 800 million out of desperate poverty.
I hope that India too can emulate this in my lifetime.
I was born in Kerala and would love to see Indians live in a country that is as wealthy per capita ( PPP adjusted ) as Singapore or failing that even as wealthy as the USA.
Capitalism has it's problems.
But you struggling with rent is entirely your self-inflicted problem...
So why aren't those people lining up to try and emigrate to non-capitalistic countries for a allegedly better life?
Instead for the past century we have almost everyone in the world wanting or not minding moving to the hypercapitalist USA.
Ironically almost all the countries with emigration controls and exit visas in the past century were noncapitalistic countries trying to stop their people from fleeing to capitalistic countries.
I don't know what you would define as "non-capitalistic" or why you'd limit your options to only those countries, but the idea that people can just pack up and go to live wherever they feel like is incredibly naive.
The reasons Americans don't just move to whatever country they think they'd enjoying living in the most are often the same reasons most people all over the world don't. They have a life here. Family, friends, jobs and other ties to their community that would be hard to leave behind.
Uncertainty and fear also keep people from moving their lives to new countries. Especially when they're going to a place where they don't have friends and family to help them with things like expenses and childcare.
Americans in particular are unlikely to speak anything other than English and while English is often understood to some extent many places overseas it can't be assumed to be avilable everywhere. Understanding the local language is often a requirement for getting citizenship in a country and not being fluent will be a hindrance even where it isn't explicitly required.
It's also very expensive to move. You'll need to have enough money to live somewhere and feed and clothe yourself the moment you step off the plane. You'll need to store all off your things someplace until housing can be secured and that can take a lot of time. Countries can require thousands in fees to apply for citizenship and people struggling with basics like food and housing aren't going to be able to afford that. About half the country doesn't even have a passport and the expense of getting one (along with the needed documentation) would be an additional burden.
Other countries don't necessarily want you. Immigrating is difficult. Unless you can demonstrate that you've already got someone willing to hire you (and effectively vouch that you won't be a financial burden) or you have some much needed skill or one that a native citizen cannot perform you may not be welcome. No nation is obligated to accept responsibility for you just because you want to live there.
It'd be great if everyone everywhere could just pack up and leave to start a life wherever they felt like it, but there are many reasons why that just isn't realistic. There are tens of millions of people America right now living in places without safe drinking water because of heavy metal contamination. Why do you think they don't just pack up and move to cities with drinkable water? What about the tens of millions of Americans who live within one mile of toxic waste sites that have been linked to infant deaths, cancers, and other serious long-term health issues? Why don't they just move? Forget about America, how about all those starving Africans just move to somewhere with lots of food? The world just doesn't work that way.
America was populated by giving people land in exchange for doing the hard work of settling the country so that the government could expand farther west. The land wasn't empty before then, but it wasn't populated like it is now either. It was hard work and bodies were needed so immigration was strongly encouraged. The existence of illegal immigration today is another thing entirely.
I have absolutely no problem with wealthy people who refuse to pay their fair share of taxes leaving. Good riddance. If they want to act like parasites let them leech off the people some place else. Eventually those people will wise up and ask them to pay up or get out too. It's that or bow down and spend their lives in serfdom to their rich lords and masters. I prefer freedom over robber barons.
Those factors apply to non Americans wanting to move to the US but it's apparent that there is heavy demand to the extent of millions taking dangerous trips and breaking laws just to get a foot into the USA. You cant find such latent demand to the same extent via surveys or visa applications in the other direction.
Those factors apply to everyone. Even, as I pointed out, within America itself. There are Americans living in places that are literally killing them. They aren't happy about, but they also can't just leave either. Learn about them and their lives if you really want to understand why.
I would be curious to see those stats that show they are no longer in poverty, as poverty is relative, aka when rent goes up many still can't afford it. Just because they have more money coming in, it doesn't mean they aren't poor. Wealth per capita in the UK, US, Germany, and so on is good but there is still rampant poverty in each where people struggle to afford food, housing, and utilities. The wages don't match the outgoings.
> But you struggling with rent is entirely your self-inflicted problem...
The funny thing about this is that practically every single person in the US between the ages of 25-45 was an early adopter and a big fan for some (or all) of FAANG in the early days, and clearly saw the importance. The fact that they aren't filthy rich and far wealthier than older people tells a story. Not a story of lattes and avocados, but a story where housing and education costs guaranteed that as a group they couldn't save, never had a chance to invest, still can't invest. With certain adjustments the story isn't so different for much of the western world.. maybe education was cheap/free but their domestic labor market was weaker, whatever. They were and are still pretty much guaranteed to be on the outside. Luck, timing, and good connections are nice at any time, but the last few decades it's everything. In another timeline maybe wealthy youth is landlording it over the impoverished oldies, but in the best timeline we'd split the difference.
Even worse, it's a uniquely bad time to be smart and hardworking, because that's the type of attitude that could stick you with a lack of resilience at just the wrong time. People who've coasted may do much better than ones who are striving. Would you rather be a university grad with new debt right now, or be a certified HVAC tech for the last 5 years? If you were a mechanic, would you want to own the shop with loans to pay off in this economy and tariffs to deal with, or would you prefer to be a simple employee that can just bounce once the company goes under? I've met phd's who are delivering pizzas to make ends meet. Blue collar folks not only have better job security at the moment, but going back some years, if they got a mortgage at the right time and place with that stable job maybe they could do normal life stuff like kids, retirement one day.
What lessons do we think young people will take from all this? Nothing against anyone who is lucky, but a stubborn belief in mythical meritocracy or the legendary American dream is absolutely stone-cold crazy these days. There's just the insiders and the outsiders and there's not much rhyme or reason to any of it.
> it's a uniquely bad time to be smart and hardworking
I think the next decade will be one of the single greatest times to be smart and hardworking. I think we’ll see AI-powered tools evolve to give hardworking humans significantly more leverage than they’ve been able to individually harness before and coupling that with smart (meaning high and good judgment on how to use them) will be an incredibly powerful combination.
> But you struggling with rent is entirely your problem...
Who said anything about struggling with rent? Sounds like you a grasping for a straw man.
> I hope that India too can emulate this in my lifetime
I, too, hope the best things for the people of China and of India. But India, by any metric, is already a capitalist economy, where its wealth is concentrated in the hands of a very few.
To the extent that China has been successful is distributing its wealth among many people, I'd say it's the authoritarianism, rather than the capitalism, that has been instrumental. The state sets agendas, quotas, and salaries specifically to produce that outcome. Top-down government control is not a feature of unbridled capitalism.
So we have two large industrializing economies, both capitalist. One (the authoritarian one) has succeeded in drastically reducing poverty; the other has not. And yet you think that capitalism is the driver of equality?
Capitalism produces wealth. You need some other system to distribute that wealth fairly.
China also does massive amounts of investment in new technologies and local companies. One of the reasons capitalism concentrates wealth these days is that it’s cheaper to generate enormous capex to prevent paying for labor than to deal with the opex of labor. Ie the road to wealth requires either wealth or investment from the wealthy.
In capitalism, the wealthy provide the capex and reap the profit. In China, the government provides a lot of the capex and claims a lot of the profit (either directly or indirectly). They can then re-invest that, use it to set salaries free from market forces, etc.
The US could do more of that without getting into the contentious issue of raising personal taxes. Ie the government could control the flow of GPUs into the country, asserting that it had the right of first purchase, distribute them to a tightly controlled private company (think power or water company, with margins set by law), and probably make a profit on the cheaper hardware because they’d be a massive purchasing block. We won’t, though, because Google, Amazon, Oracle, etc are currently posed to make a _ton_ of money off doing basically the exact same thing.
>It's up to individuals to take advantage of the opportunity, or not.
The problem is that after decades monopolies consolidated and you have massive offshoring of labor to cheap countries and offshoring of profits to tax havens, there's not much opportunities the working class individuals can take, as all the opportunities are now geared towards the asset owning rent seeking class.
> There are endless businesses you can start with little to no capital.
Well, that's good news. I guess the cause of poverty must simply be laziness.
That's convenient, because it allows me to demonize the lower economic classes without having to address the systemic inequality that rewards capital ownership over labor.
Capitalism incentivizes risk taking because the payoff is enormous - the most successful risk takers get to own the world 50 years later.
The problem: there's a second phase 50 years later, where the risk takers from 50 years ago own the world and do their best to prevent further rewards flowing to new risktakers. We are in that phase now.
The other problem: when the reward is so great, you do everything to get ahead, even illegal things, because the expectation value (winning*P(winning) + prison*P(caught)) is still positive.
> the most successful risk takers get to own the world 50 years later.
Musk creating wealth has taken nothing from me. How about you?
> there's a second phase 50 years later, where the risk takers from 50 years ago own the world and do their best to prevent further rewards flowing to new risktakers. We are in that phase now.
Did you know that Hackernews is run by wealthy people who fund startups?
What illegal things did Bezos do to get rich? Jobs? Gates? Musk?
> Musk creating wealth has taken nothing from me. How about you?
That's exactly what he'd like you to believe. Where did that money come from? Did he just print it himself?
> Musk creating wealth has taken nothing from me. How about you?
Considering that billionaires are actively involved in writing the laws that ostensibly apply to them (see also: regulatory capture), I hardly think that legality should be highest bar that we hold them to. After all, the lords of medieval France acted "legally" when they executed their tenant farmers for failing to pay rent after a bad harvest.
"while remaining authoritarian" implies that Authoritarianism is an exclusive trait of Communism, which is the most absurd thing I've ever heard. Use any Capitalist country with an Authoritarian leader as an example.
"In 1985, if you were a reasonably affluent American, the best computer that you could afford was the IBM PC AT. The PC AT would cost you about $6,000—$19,400 in 2026 dollars—and thus represented about a quarter of the median American’s annual income; and it ran on an Intel 80286 processor, capable of something like 900,000 instructions per second. Today, if you find yourself in a market stall in Nairobi or Lagos, you’ll be able to find a cheap smartphone—like the Tecno Spark Go, manufactured by China’s Transsion—for somewhere between $30 and $120. That phone will run on a processor capable of billions of calculations per second."
Please note that "commerce" and "capitalism" are not synonymous, and that the former does not imply the latter. Capitalism is in no way a prerequisite for technological development.
"Capitalism" is an ever shifting ambiguity that exists to be a scapegoat to attack but is completely meaningless in its concrete usage by the attackers.
But "capitalism" in its historical and practical meaning means nothing other than commerce, i.e. the society based exchange, the system of production based on exchange. It was only through capitalist accounting methods that businesses were able to conduct commerce in such a way as to contrast costs and proceeds, and therefore create the optimizations that lead to mass computer production or, what is the same, cheap computers for the masses.
> But "capitalism" in its historical and practical meaning means nothing other than commerce, i.e. the society based exchange, the system of production based on exchange
Completely wrong. Many of my comments here distinguish commerce from capitalism.
Commerce, ie the exchange of goods and services, has existed longer than civilization. Even some animals do it.
Capitalism is specifically the substitution of labor with ownership as a means of profiting. This produces an imbalanced market: some people compete for resources by selling their labor, while others compete simply by owning capital: the means of production. The problem is that the latter mode allows unlimited accumulation of wealth, while the former is limited by time and effort.
Imagine if Elon Musk was working a salaried job that paid $60000 per hour. How long would he have to work in order to earn his current fortune?
Every socialist tries to make this distinction and falls to their own guillotine. You do realize that "substitute with" is merely a synonym for "exchange"?
The exchange of labor, to be sure, has existed nearly as long as civilization itself, perhaps longer, as all people cooperate by exchange through the division of labor right down to the family, and it is exchange whether the articles to be exchanged are money or physical things or even intangible, ephemeral things like love, pride, loyalty, or otherwise. Since human society is human cooperation by the division of labor, by your definition capitalism is nearly synonymous with human society itself. Fine by me.
I have no problem with the concept of money. Commerce always the exchange of good and services, including on a symbolic level: as you point out, affection, money, etc. "Money" is not the distinguishing factor between commerce and capitalism.
At the risk of repeating myself: the distinction is how wealth is acquired. Capitalism allows one to acquire wealth merely by possessing capital, which in turn engenders unlimited capacity to acquire more capital. Capital is unique among all those systems for that reason.
I mean we don't really have any counter examples even China didn't really start advancing in any meaningful way until they started moving towards capitalism.
> The reforms [starting in 1976] de-collectivized agriculture, abolished the people's communes, relaxed price controls, allowed foreign direct investment into China, and led to the creation of special economic zones, most prominently the Shenzhen Special Economic Zone and the Shanghai Pudong New Area. Private enterprises were allowed to grow, while many state-owned enterprises were scaled down or privatized. Shanghai Stock Exchange and the Shenzhen Stock Exchange were established in 1990, allowing a capital market system
> They only started making things once they realized capitalism was better.
Free commerce is not the same as capitalism. A country where production, wages, and ownership are decided centrally can hardly be said to be unfettered capitalism.
Said the Christian in pre-Englightenment Europe: "Well, of course Christianity is the one true religion. After all, the whole civilized world is Christian."
That's because your question is silly. I'll spell it out for you: Just because all modern states are capitalist does not mean that all states must be capitalist, as evidenced by the many erstwhile states that were not capitalist. Your failure to see beyond your immediate surroundings and ignoring the first sentence of my previous comment is perhaps the reason for your silly question.
You don't have to demonstrate this kind of ignorance of human history on main.
Aren't you embarrassed? Do you value knowledge even a little bit?
When did capitalism begin? How was 'stuff' created and distributed prior to that? How do other, distinct and contemporaneous modes of production create 'stuff'?
Capitalism began when Thag, who was a good hunter, brought home two dinosaur steaks. His buddy Grog was a lousy hunter, but was good at making spears. Thag traded a dinosaur steak for a new spear.
First, pedantically, we did not share time with 'dinosaurs' in the sense you imply.
Secondly, pedantically, that kind of hunting was not the main source of calories for hunter-gatherers. It's more apt to imagine them as gatherers first and primarily.
Thirdly, and also pedantically, you are not describing the system of capitalism that I, and most educated people talk about when they use the word.
That system has only been with us in the main for, generously, 250 years.
Critically, Thag and Grog both own the means of production for their spears and 'steaks' respectively. The necessary abstractions for capital accumulation, debt, and private ownership simply do not exist.
Capitalism began when Thag declared that he owns all the dinosaurs, and anyone who hunts a dinosaur must pay him 10 percent of the meat as a tribute, or else he will stab them with his spear.
> It was driven largely by people who wanted to make money off of their inventions.
I am getting a little tired of repeating myself, but you're evidently confused so I'll indulge you.
The opposition to capitalist as a monetary system does not imply the opposition to the profit motive. As I've said several times, and which you continue to ignore, the exchange of goods and services in the form of commerce requires the profit motive. Conflating my position with communism is a straw man.
The fact that some countries (mostly the political west) developed a wealthy middle class post WW2 was not due to capitalism but due to social democracy.
Capitalism by itself does not produce egalitarian wealthy society. The system divides the populace into "capital owners" and "workers" who are in direct conflict.
There are plenty of capitalistic countries where most people are poor. In fact many of the as said Western countries has also high levels of poverty while running capitalism in the 1800 etc until post WW2 social democratic movements.
Once you dismantle those social democratic constructs such as labor unions and start shifting more power to the capital holders you'll see how the society splits apart to rich and poor. The rich use their wealth and power to rig the system to benefit themselves even more and become richer at the expense of everyone else. Ultimately they will remove democracy because functional real democracy is a threat to their wealth.
The middle class emerged in colonial America. During the 1800s, scores of millions of people came to the US with little more than a suitcase. They went into the middle class, and some into the wealthy. We know this because:
1. Average height increased throughout the 1800s
2. Life expectancy increased throughout the 1800s
3. Plenty of photos and paintings of towns that consist of middle class housing
> The system divides the populace into "capital owners" and "workers" who are in direct conflict.
That's what Marx claimed. I've had many jobs. In none of them was I ever in conflict. It was a negotiated relationship, where I provided labor and expertise in exchange for money. I've also been a boss, and if you ever have been you'd know you had no power over your employees. They only work for you because they want to. When they stopped wanting to, they simply disappear, and there's not a thing I could do about it.
In the US, every worker has the power to walk away and start their own business. The wealthy in America did not come from wealthy immigrants, they came from poor immigrants.
Most employees have absolutely Zero leverage. Ask any Amazon warehouse worker how much liberties they have and how much in practice they can negotiate. Just because some employees have had some leverage doesn't change the underlying power dynamics between employers and employees. In fact we're now seeing this play out in software as well with the AI hype train and I expect a reality check to hit many people previously in their cushy office jobs.
> Thanks to capitalism, I don't have to toil in the fields.
No, that's thanks to commerce not to capitalism. Capitalism benefits those those who hold capital, which is not me.
The fact that there are more than enough resources for no one to live in poverty should suggest to you that something is wrong with the distribution system.
"It's true, Mr/Ms Rationalist, that our patented Miracle Medical Snakeoil caused a third of your leg to become necrotic and fall off, but be glad for the two thirds that did not fall off!"
> > Thanks to capitalism, I don't have to toil in the fields.
> No, that's thanks to commerce not to capitalism. Capitalism benefits those those who hold capital, which is not me.
Are you toiling in the fields? It seems to me like your attitude is that "If I can't be rich, then no one should be rich."
> The fact that there are more than enough resources for no one to live in poverty should suggest to you that something is wrong with the distribution system.
So instead of two thirds of the world not living in poverty, everyone should live in poverty equally?
> It seems to me like your attitude is that "If I can't be rich, then no one should be rich."
The problem with capitalism is not that some people get rich and some people don't. The problem is that of an unfair playing field.
Everyone has a body and a mind, and commerce allows us to rent out those features in exchange for pay. People who are smarter or stronger or work harder or work more will be able to benefit more. That's how I got rich. But there's a limit to how rich I can get, because I have only one body and one mind and there are a finite number of hours in the day.
The other way to get rich is to own things. If you own a factory or real estate or bonds you get to charge other people and make a profit even though you are expending no effort. And in this case there is no limit on your profit, because you can use your profit to buy more capital and make more profit from that. The result is eventually a winner-take-all economy, where the winners own an increasing amount of society and everyone else pays them to use it. If that sounds familiar, it should, because it's feudelism, and is the eventual end state of capitalism.
You should really read a bit about the philosophy that you're arguing so vehemently for, apparently without knowing anything about it.
> So instead of two thirds of the world not living in poverty, everyone should live in poverty equally?
It may be expressed in terms of money, but these are assets and capital. You wouldn't find a fab a very comfortable or satisfying place to live.
The reason the numbers get so big is the gargantuan accumulated savings that are prepared to fund the similarly gargantuan ventures. The large numbers are supported by maintaining and sustaining the capitalized value by profitable investment and depreciation.
When you talk about rent, while it may be expressed in the same unit (money), the economic function played is very different. Here, it is consumption rather than saving/investment. If the dollar equivalent of all those assets went towards paying rent, while it would secure housing for some time, it would eventually become completely exhausted, and so too would housing security. Large pools of assets are simply not a way to get stable housing, it would only consume the large savings society has accumulated to be able to undergo those big ventures. It would be short-sighted and harm us in the future.
The cause and solution to rental instability is to be found in housing, building, and land policy that restricts the production of housing.