Why capitalism?

post by Algon · 2015-05-03T18:16:02.562Z · score: 8 (12 votes) · LW · GW · Legacy · 164 comments

Note: I'm terrible at making up titles, and I think that the one I gave may give the wrong impression. If anyone has a suggestion on what I should change it to, it would be much appreciated.

As I've been reading articles on less wrong, it seems to me that there are hints of an underlying belief which states that not only is capitalism a good economic paradigm, it shall remain so. Now, I don't mean to say anything like 'Capitalism is Evil!' I think that capitalism can, and has, done a lot of good for humanity. 

However, I don't think that capitalism will be the best economic paradigm going into the future. I used to view capitalism as an inherent part of the society we currently live in, with no real economic competition.

I recently changed my views as a result of a book someone recommended to me 'The zero marginal cost society' by Jeremy Rifkin. In it, the author states that we are in the midst of a third industrial revolution as a result of a new energy/production and communications matrix i.e. renewable energies, 3-D printing and the internet.

The author claims that these three things will eventually bring their respective sectors marginal costs to zero. This is significant because of a 'contradiction at the heart of capitalism' (I'm not sure how to phrase this, so excuse me if I butcher it): competition is at the heart of capitalism, with companies constantly undercutting each other as a result of new technologies. These technological improvement allow a company to produce goods/services at a more attractive price whilst retaining a reasonable profit margin. As a result, we get better and better at producing things, and it lets us produce goods at ever decreasing costs. But what happens when the costs of producing something hit rock bottom? That is, they can go no lower.

3D printing presents a situation like this for a huge amount of industries, as all you really need to do is get some designs, plug in some feedstock and have a power source ready. The internet allows people to share their designs for almost zero cost, and renewable energies are on the rise, presenting the avenue of virtually free power. All that's left is the feedstock, and the cost of this is due to the difficulty of producing it. Once we have better robotics, you won't need anyone to mine/cultivate anything, and the whole thing becomes basically free.

And when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system? Of course, the arguments presented in the book are much more comprehensive, and it details an alternative economic paradigm called the Commons. I'm just paraphrasing here.

Since my knowledge of economics is woefully inadequate, I was wondering if I've made some ridiculous blunder which everyone knows about on this site. Is there some fundamental reason why Jeremy Rifkin's is a crackpot and I'm a fool for listening to him? Or is it more subtle than that? I ask because I felt the arguments in the book pretty compelling, and I want some opinions from people who are much better suited to critiquing this sort of thing than I.

Here is a link to the download page for the essay titled 'The comedy of the Commons' which provides some of the arguments which convinced me: 

http://digitalcommons.law.yale.edu/fss_papers/1828/

A lecture about the Commons itself:

http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2009/ostrom_lecture.pdf

And a paper (?) about governing the commons: 

http://www.kuhlen.name/MATERIALIEN/eDok/governing_the_commons1.pdf

And here is a link to the author's page, along with some links to articles about the book:

http://www.thezeromarginalcostsociety.com/pages/Milestones.cfm

http://www.thezeromarginalcostsociety.com/pages/Press--Articles.cfm

An article displaying some of the sheer potential of 3D printers, and how it has the potential to change society in a major way:

http://singularityhub.com/2012/08/22/3d-printers-may-someday-construct-homes-in-less-than-a-day/

Edit: Drat! I forgot about the stupid questions thread. Should I delete this and repost it there? I mean, I hope to discuss this topic with others, so it seems suitable for the DISCUSSION board, but it may also be very stupid. Advice would be appreciated.

164 comments

Comments sorted by top scores.

comment by [deleted] · 2015-05-04T07:52:51.464Z · score: 12 (12 votes) · LW · GW

The problem is that everybody is having strong opinions about capitalism without even considering that it is not a "thing" but a category based on its definition, and there are multiple definitions of it.

The anti-capitalist, Marxist definition largely rests on private property (somehow) meaning you own more stuff you work with. Other people don't own the stuff they need to work with, so they need to "sell out" and become your employees. A typically capitalist company for a Marxist would be one guy owning 100 taxicabs and hiring 100 (or rather 300, in 3 shifts) drivers. Here the drivers, not having money to buy their own taxi cabs, must rent themselves out as employees. This is partially exploitative. Often Marxists propose it is not coming from free-market outcomes, but often it is more like some folks rob people with violence e.g. rob natives of their land then hire them when they have no other way of making a living. Another important aspect of a Marxist theory is alienation. The way I understand it, if the driver owns his taxi cab, he uses his own value system to work. Sometimes he is driven by the profit motive. Sometimes he gives rides to friends for free. When he is an employee, he runs the value system of the employer. This is IMHO what is understood as alienation.

I don't need to explain, hopefully, that pro-capitalist libertarians understand it completely differently. It is not about the size of your property, but a general legal framework for propertarian, exhcange-based relations.

The "wonderful part" is that there are setups that are capitalist for Marxists, but socialist for libertarians: such as Soviet type state capitalism. (Lenin was open about it, he said they must do state capitalism before they can go to socialism.) There are also setups that are non-capitalist for Marxists but capitalist for libertarians: such as homesteader farms, each working on his own, not employing employees.

Try to get this conundrum. Everybody thinks they know what capitalism is. They actually only know what their side of the debate defines as capitalism. One side defines it as a GENERAL propertarian legal framework, and the other side as a SPECIFIC setup where some own productive resource, some not, and the first employ the rest.

This is why it is such a huge mind-killer for about 150 years now. It is worse than is-Pluto-a-planet, it is more like are-planets-bad, without even knowing what we understand under planets.

It is really crappy if you think about it, how people can misunderstand each other. The worst part is this. People on the Marxist side tend to think libertarian, propertarian legal frameworks (so the other sides definition of capitalism) slide towards huge corporations and widespread employment (instead of working on your own gig) , they consistently tend to ignore the surprising survivability of self-employment and small business. If we would take Marx seriously, the small business owner petite bourgeoisie should have disappeared by 1900 or so. Instead, it still thrives. They think all private property tends towards this type of concentrated, corporate, exploitative type. On the other hand, libertarians have a tendency to ignore employment and the proletariat at that. Libertarian economics textbooks explain the basic theory on how the shoemaker barters shoes with the baker. The problem is the term "baker", is it someone who bakes, or someone who owns a bakery? To libertarians the distance between these two are small. They tend to ignore that such a thing as working class exists, with people who never break out from working for others for generations on and on.

So both sides tend to ignore phenomena that fits in the other sides definition. Marxists ignore self-employment and startups, libertarians ignore the perpetual working class who will never open as startup and depend on others for giving them jobs.

For information, there is a bunch of people called Distribustists who understand both sides. They may be wrong - they are very much a bunch of romantic Catholics - but at least understand both sides, while the sides themselves tend to talk past each other. Here is a decent series, third and fourth article. Again the point is not whether this is right, but the point is to show how both sides misunderstand each other, and these guys understand both sides. They get it property and market transactions are very important - but they also get that when lots of people (proletarians) have no productive property, their negotiation position will be low. They seem to be mostly following Adam Smith here.

comment by Algon · 2015-05-04T08:12:52.885Z · score: 2 (2 votes) · LW · GW

Thanks for the recommendations. I'll definitely read them.

comment by ChristianKl · 2015-05-03T21:33:04.854Z · score: 9 (9 votes) · LW · GW

You can 3D print plastic. You can't 3D print computer chips. There are economies of scale with creating computer chips. The same is true for creating batteries. Tesla builds it's gigafactory because the huge volume allows cheaper production.

If I look over the items in my flat no one that can be 3D printed by a makerbot springs out.

Owning a solar rooftop means owning capital that produces a return. It doesn't make that energy free. If energy costs would be near zero I would use much more energy. Having a market that sets prices on energy use prevents people from wasting it.

The question presupposes that capitalism is the only way we organize our society. That's far from the case.

Not every transaction of value happens the same way. When government tries to solve a problem it does it through huge bureaucratic hierarchies. If I ask a friend to help me move to another flat then I the default isn't monetary payment. When open source is distributed for free on the internet you have yet another framework for value exchange.

Our society mixes different systems of value transfer. Wikipedia doesn't work through market incentives and that's okay. It can assist alongside with Britannica. There's no need for either-or.

comment by Algon · 2015-05-04T07:04:39.693Z · score: 0 (0 votes) · LW · GW

The examples you outlined there are part of a governing system called the Commons, which is an older system than capitalism. That is what the author was advocating. Edit: This first paragraph is very badly phrased, but I can't rephrase it properly right now. Sorry for any confusion.

He proposed that this sort of system would not allow for rampant abuse, and gave examples of how in various Commons around the world, resources were self-regulated by the community.

People do not necesarilly need a market to prevent them from wasting electricity. That is part of the governing structure of the commons, wherein social rules prevented overconsumption from occurring.

Yes, there are economies of scale which allow for things like batteries to be built. In fact, one needs to be able to use such economies of scale in order to make a profit. But 3D printing requires no such thing. You pointed out that nothing that could be made by a 3D printer springs out. But your flat itself is able to be made by 3D printers, and at a much lower cost than what we currently have. You can also 3D print solar panels. And this is just right now. The technology keeps on getting better.

comment by ChristianKl · 2015-05-04T11:25:47.903Z · score: 1 (1 votes) · LW · GW

Yes, there are economies of scale which allow for things like batteries to be built. In fact, one needs to be able to use such economies of scale in order to make a profit.

It's a mistake to assume that efficiency of production isn't important because there's no money.

People do not necesarilly need a market to prevent them from wasting electricity. That is part of the governing structure of the commons, wherein social rules prevented overconsumption from occurring.

Social rules aren't very flexible. You could have a social rule that a person is supposed to travel at maximum two round trips by plane per year.

That would prevent overconsumption but there are people who I want to ride plains 40 per year. I want a high class Salsa dancing teacher to have the opportunity to be every weekend in a different city to teach at a different Salsa congress.

Markets that price plane rides provides the necessary flexibility of not having everybody consume the same amount and still prevent overconsumption. They also provide incentives for companies to compete with each other to be more efficient at offering plane rides.

es, there are economies of scale which allow for things like batteries to be built. In fact, one needs to be able to use such economies of scale in order to make a profit.

Economies of scale mean that you get more efficiency. That means that you need less resources to get to the same result.

But your flat itself is able to be made by 3D printers, and at a much lower cost than what we currently have.

If that would be true than capitalism would pressure companies who want to make flats to use that technology. Currently that doesn't seem to be happening.

In fact I observe that rents around me rise rather than that housing get's cheaper.

comment by Algon · 2015-05-04T11:44:38.701Z · score: -1 (1 votes) · LW · GW

One of the reasons that capitalism is considered to be the best economic paradigm rather than the Commons was because of an influential paper written about half a century ago called the tragedy of the commons. Another paper written later as a rebuttal was called the 'comedy of the commons' and you might want to give it a read, because it would be much better structured/backed up than my responses.

And 3D printing houses was just accomplished. Its just getting of the ground, but its expected by industry experts to make a huge impact on the construction market. If I remember rightly, its estimated that around 2025 it will become the dominant construction technique.

comment by Lumifer · 2015-05-04T14:46:41.148Z · score: 4 (4 votes) · LW · GW

One of the reasons that capitalism is considered to be the best economic paradigm rather than the Commons was because of an influential paper written about half a century ago called the tragedy of the commons.

No, that's a very misguided view.

Capitalism is considered to be the best economic paradigm because it helped many societies generate huge amounts of wealth in reality.

comment by Algon · 2015-05-04T14:56:50.320Z · score: -1 (1 votes) · LW · GW

hmm, i thin I phrased that poorly. What I meant to say is'X is part of the reason why the Commons was dismissed as an economic paradigm'.

comment by Lumifer · 2015-05-04T15:02:01.555Z · score: 1 (1 votes) · LW · GW

You don't think the experience of Marxist countries had something to do with that? X-/

comment by Alex_O · 2015-05-09T11:11:28.650Z · score: 0 (0 votes) · LW · GW

Some socialist 'countries' were successful though, on an economical point of view. Anarchists often refer to revolutionary Spain and the CNT. Although they were ultimately destroyed in war by the alliance of fashism and the moderate left, the economical development boomed during the short Republic life. Even the USSR, which is not usually considered socialist in anarchist circles (see first comment) went from an economy based on agriculture to a huge industrial power in less than 50 years.

comment by ChristianKl · 2015-05-04T12:40:38.716Z · score: 2 (2 votes) · LW · GW

One of the reasons that capitalism is considered to be the best economic paradigm rather than the Commons was because of an influential paper written about half a century ago called the tragedy of the commons.

The main reason why capitalism is considered to be good is that it works in practice. It's not about a single paper.

If you argue that efficiency of battery production isn't important, than that corresponds to waste. Not using economies of scale to produce chips and batteries means wasting resources.

I don't even argue that every commons problem should be solved by markets.

Having electricity priced by the market allows entrepreneurs to do things with electricity that 99% of the population consider a waste of energy. It's enough that the entrepreneur believes that he can make a profit with investing energy that way.

If you had social rules preventing energy waste, that's not possible. The social rules prevent the entrepreneur from doing his project. The prevent innovation that most people consider to be crazy.

SpaceX needed to get special laws passed because it couldn't simply buy the usage rights for a public beach. At the scale at which SpaceX operates that's okay. It's okay for them to go to the legislators and ask them to pass a law that gives them special rights. In a lot of cases it's not that easy for entrepreneurs to get special usage right to a public good.

It's okay that our society uses different paradigms to solve different issues.

I like David Ronfeld's IN SEARCH OF HOW SOCIETIES WORK. It illustrates how we use different paradigms of markets, hierarchies, tribes and networks to solve different issues.

It's a much better intellectual framework then to think in the Marxist terms of capitalism vs, socialism.

If I remember rightly, its estimated that around 2025 it will become the dominant construction technique.

Could you link to source for that estimate?

comment by Algon · 2015-05-04T13:09:41.112Z · score: -1 (1 votes) · LW · GW

Dr. Berokh Koshnevis, a professor of industrial and systems engineering in the university of Southern California, with support and funding from the US department of defence and NASA for creating techniques for 3D printing buildings was quoted as saying that after 20,000 years of human construction, 'the process of constructing buildings is about to be revolutionised' link:http://singularityhub.com/2012/08/22/3d-printers-may-someday-construct-homes-in-less-than-a-day/ It should give you all the info you asked for.

comment by [deleted] · 2015-05-04T13:41:00.719Z · score: 2 (2 votes) · LW · GW

There is a different issue with construction, which Robert Heinlein pointed out 70 years ago. Basically imagine that buying a car would mean a bunch of workmen going to your site and hand assembling one there. How inefficient it would be. I.e. the issue is the lack of mass manufacturing of (obviously modular) houses from subassemblies, like every sane manufacturing process.

Of course prefabs exist but they should have became the dominant model long ago.

3D printing is another custom-assembly thing at the end. Why can't we just prefab?

comment by Algon · 2015-05-04T14:07:22.064Z · score: -2 (2 votes) · LW · GW

Prefabs are, correct me if I'm wrong, made using current technologies, which are more expensive than just printing off a few walls, a base and all the other stuff. Also, the 3D printer is potentially much faster. In fact, scratch that, I am reasonably sure that it is much faster, and can, or will soon be able to, produce a similar quality product for less cost, and with less waste. Also, I suspect that you would be able to transport these printers in one or two large trucks from some nearby construction centres, with the trucks also going back to get the feedstock.

The internet of things stands to greatly increase the efficiency of the current logistics systems in place. I mean, they're shockingly bad. I was actually surprised by how inefficient they tend to be. And this whole paragraph is largely useless.

comment by Lumifer · 2015-05-04T14:41:55.100Z · score: 3 (3 votes) · LW · GW

Prefabs are, correct me if I'm wrong, made using current technologies, which are more expensive than just printing off a few walls, a base and all the other stuff.

Current technologies can't "just print off a few walls". Are you comparing current-technology prefabs with future-technology 3D printing?

Also, the 3D printer is potentially much faster.

Much faster than this?

comment by Algon · 2015-05-04T14:48:18.945Z · score: -1 (1 votes) · LW · GW

Perhaps. And probably cheaper too. Also, I don't think that was taking into account the time it took to make the parts, or the shipping times.

And yes, I am comparing current pre fab tech to 3D printing. I apologise if I wasn't clear.

comment by Phothrism · 2015-05-04T10:25:34.015Z · score: 1 (1 votes) · LW · GW

I'm not getting what would be so great about 3D printing solar panels at all - are you saying that 3D printing electronics will become as cheap as producing in bulk? That kind of seems unlikely to me.

Or are you using the words 3D printing to mean that producing things in general will become much much cheaper? If so what about the resources required or are they not as big a part of the cost as I think?

comment by Algon · 2015-05-04T11:37:18.580Z · score: 0 (2 votes) · LW · GW

Oh, that was just one example. I didn't mean anything very deep by saying solar panels. But yes, 3D printing will just get better and better. I mean, it is more cost effective, right now, to get a 3D printer and just print off some common household items than buying them. Like those little things you use to hold up toilet rolls. And as 3D printing gets better and better, and cheaper and cheaper, we will be able to make more things at home without needing to but them.

Sure, the feedstock will cost something for the near future, and so will the energy, but both those things will get cheaper and cheaper. Energy in the form of the energy internet, where we all effectively pool together the various forms of renewable energy we use to provide free energy, at much higher efficiencies than right now. The feedstock will eventually be free because automatons will be able to gather them. And they'll be running of free electricity, and be constructed by... 3D printers and automatons. It'll take a while to get there, but once we do, there won't be any need for companies producing utilities or services. It'll be self-sustaining.

And the resources required, right now, aren't that much of an issue. Someone designed a 3D printed to run off thrown away plastic. Eventually, we'll have enough stuff floating around that we can just make new things out of the old unwanted ones. Of course, that's assuming we make things from all recyclable things.

Now, some people here have mentioned that we couldn't just go wild with 3D printing and print a skyscraper for everyone (can't think of another example right now), as it wouldn't be sustainable. However, I am not advocating a situation where there is suddenly no form of governance about how much you should make. Rather, I am saying that capitalism is not necessarily it.

The alternate? The Commons. I've heard that the paper 'the comedy of the commons' is very good, so you might want to give that a read.

Also, I expect this to be a slow process. The book I was reading pegs the 'eclipse of capitalism' by about 2050, which I find reasonable. And in regards to copyright laws and things like that, many people are advocating for creative commons licences, which is growing as a movement. Eventually, we'll live in a society where social capital is more important than material capital. But capitalism, in the materialistic sense, won't be needed to govern it.

comment by Lumifer · 2015-05-04T14:56:33.150Z · score: 1 (1 votes) · LW · GW

it is more cost effective, right now, to get a 3D printer and just print off some common household items than buying them.

I don't believe this to be true. Can you provide some supporting data?

comment by Algon · 2015-05-04T15:24:01.904Z · score: 1 (1 votes) · LW · GW

Ok, so a cheap, low end 3-D printer costs about $400-500. Feedstock costs about $30-40 per KG. Now, with one of these, you can make things like stands, casings, door handles, so on and so forth.

Lets assume that things like this would cost you about $200 dollars a year, including things that you would have to replace because they're damaged. Now, if you use about a kg or two each year, and use hollow constructions, you could make a 'return' of about $120 each year, including the filament costs. That's about 4 years before the 3D printer pays for itself.

You could also get something like the filbot: http://www.gizmag.com/filabot-plastic-recycling/25848/ for about $300 (not the one in the link), in which case you pretty much eliminate filament costs and you'd break even in roughly... 4 years. Still, its probably a good idea to get one if you're going to be printing a lot of things and want to recycle some of you old stuff.

Now, of course, the technologies getting better and better each year, so you'd probably be wise and wait a few years before investing in one. However, it is still a reasonable purchase right now.

I will add one caveat, however. You probably won't get things with as high a quality finish as if you bought them, but from a functional stand point, they're fine.

Edit: Also, this: http://www.appropedia.org/Waste_plastic_extruder and this: http://reprap.org/wiki/Recyclebot make some decent points about sustainable development.

comment by ChristianKl · 2015-05-04T18:38:39.688Z · score: 2 (2 votes) · LW · GW

Lets assume that things like this would cost you about $200 dollars a year,

Who spends $200 dollar per year on door handles, stands and casings?

comment by Algon · 2015-05-04T18:44:01.328Z · score: -1 (1 votes) · LW · GW

I meant things like that, on that sort of scale and complexity.

comment by ChristianKl · 2015-05-04T18:46:49.571Z · score: -1 (1 votes) · LW · GW

Could you list what things of that scale and complexity you brought in the three years and roughly what you payed for that?

In my own experience I don't think I spent $600 dollar on that kind of stuff.

comment by Algon · 2015-05-04T19:01:59.237Z · score: 1 (1 votes) · LW · GW

Alright. So, personally (as I'm just one person, and fairly frugal by nature, with a pretty poor memory) I have bought several tissue box holders, a little soap box, two phone cases, a replacement for my satchel's arm strap (which could have been easily repaired with a 3D printer), a couple of plastic door handles, several headphones which I replaced because the little bits at the end broke of (you know, the small ones) and I had to get, and would like to get, several other things replaced because of some small but important little bits that fell off.

This is off the top of my head, and I'm not even the home owner. If you included all the little bits and bobs over the past three years that my family and I have bought/replaced and would like to replace but its too damn expensive over the past three years, I think £400 is not too unreasonable, which is about $600.

comment by Lumifer · 2015-05-04T16:04:09.371Z · score: 2 (2 votes) · LW · GW

with one of these, you can make things like stands, casings, door handles, so on and so forth.

You can?

Your toilet paper roll holder usually has a steel spring inside. The door handles need to have sufficient mechanical strength -- both for the screws (or bolts) and for the cases when someone leans on them. Will 3D-printed out of the standard feedstock door handles be strong enough? I have my doubts. And how often do you change door handles in your house?

That's about 4 years before the 3D printer pays for itself.

First, please estimate labor costs for all of that and price it in. Time is valuable. Second, will a "cheap, low-end 3-D printer" even last four years?

I don't have problems with the idea that 3D printing is a very interesting technology which could impact things at some point in the future. What I have problems with is the claim that the time is now. I don't think it is.

comment by D_Alex · 2015-05-05T02:54:25.122Z · score: 2 (2 votes) · LW · GW

I have a 3D printer (Makerbot 2, not really low end, cost ~$2000), so let me correct a couple of misconceptions in this thread:

  1. 3D printed parts can be, and usually are, quite strong. The strength of a part is directional - the parts are much stronger in the direction parallel to the filament deposition than in the perpendicular direction. But door handles and the like are no problem at all. The parts can also be strong and very light, because printing the inside volume as a honeycomb mesh is possible (and is the default option at least on the printer driver I am using)

  2. The labout input in actually making a part is minimal, surely less than a trip to the store to buy one. Currently, the labour-intensive part is finding or producing the right design - but once the design is made, it can in theory be available to anyone in the world to use. "Thingiverse" is an attempt to collate the various designs, unfortunately it is full of sub-mediocre stuff and not sufficiently easy to navigate around.

I have literally hundreds of 3D printed objects around me right now, most are models of industrial plants and boats. But I have also made a few everyday objects that I otherwise would have had trouble getting at all, including:

  • A control knob for my amplifier, the original was lost somewhere
  • A knob for window wiper control for my car
  • The little thing that you pull to open the door in the car
  • A hard-to-explain bracket that holds a milk shelf in my fridge

Now that i have made the models (and it was fun to do, so was there a labour "cost"?), these things above should be available on the 'net for anyone... I feel kinda bad for not doing that, but the problem is this: How do I identify say the fridge bracket, so that people can find it? OK, its a Fisher and Paykel 350 l fridge, model ABC-1234 or w/e, but then...? Now if the fridge maker provided the design on their web site, we'd be getting somewhere, and if 3D printers have sufficient penetration, perhaps they will one day.

comment by Lumifer · 2015-05-05T18:01:11.237Z · score: 1 (1 votes) · LW · GW

I think that at the moment 3D printers (for home use) are toys. Certainly, cool toys and I've been tempted to get one a few times. But then I realize that while the magic of materializing physical objects out of bytes and some plastic filament is great, I just don't need many (if any) small uneven pieces of plastic.

The claim that I objected to at the start of this sub-thread is that a 3D printer is now a cost-effective method of producing useful household objects. I didn't think so and I still don't think so. Saving money on a 50-cent bracket via buying a $1,000 printer doesn't look particularly rational to me. Maybe things will change in a few years. We'll see.

comment by D_Alex · 2015-05-06T03:32:55.607Z · score: 0 (0 votes) · LW · GW

cool toys and I've been tempted to get one a few times

If you can use a 3D design program like Google Sketchup - do it! It is a cool toy, it is at least of minor practical use, and you might catch a wave to the future.

Saving money on a 50-cent bracket via buying a $1,000 printer doesn't look particularly rational to me

Naturally. But throwing away a $1000 item for the lack of some stupid bracket that should cost 50 cents but can't be had for any money AFAICT is not great either...

comment by Lumifer · 2015-05-06T14:49:33.941Z · score: 0 (0 votes) · LW · GW

It is a cool toy

I agree -- but I don't find its output either cool or useful enough. When the 3D metal printers come down in price, I might reconsider. I find things like this considerably more appealing, but maybe that's just me.

But throwing away a $1000 item for the lack of some stupid bracket that should cost 50 cents but can't be had for any money AFAICT is not great either...

Never had this happen to me, ever :-P

comment by Algon · 2015-05-04T17:01:26.215Z · score: 1 (1 votes) · LW · GW

Eh, I meant more like phone stands and cases. Door handles as in the actual nob. Do people lean on door handles? Also, what kind of toiler paper holders do you use? I've never seen one with a spring inside. What sort of mechanism does it use?

And a low quality 3D printer is something that probably could last a few years. And if not now, then certainly in a few years time.

The thing is, 3D printing is only really getting its legs under it. In order to really revolutionise things it needs to have the proper infrastructure developing alongside it which is only happening now. Each industrial revolution not only had a new mode of production, but also a new form of energy and communication accompanying it. We have the communications medium, the internet, but the so called 'energy internet' and the 'internet of things' are just starting to emerge, and it will probably take a few decades before the whole 'third industrial revolution' is finished.

By the way, I didn't just make that up, Here's an article from the economist briefly covering the idea: http://www.economist.com/node/21553017

comment by Lumifer · 2015-05-04T17:43:43.530Z · score: 1 (1 votes) · LW · GW

The thing is, 3D printing is only really getting its legs under it.

I agree. But the future is uncertain. 3D printing might revolutionize DIY manufacturing or it might not. I am aware that some people are pretty sure it will, but their arguments tend to lean in the "because we want it to happen" direction.

A simple welding setup will give me a much more useful DIY capability than a 3D printer at the moment. And I will be able to produce a variety of home items out of scrap steel quite cheaply. Still, home welding isn't particularly popular.

comment by ChristianKl · 2015-05-04T18:36:55.463Z · score: -1 (1 votes) · LW · GW

How many 3D printed objects do you have in your household?

comment by Vaniver · 2015-05-03T19:20:26.933Z · score: 7 (7 votes) · LW · GW

I used to view capitalism as an inherent part of the society we currently live in, with no real economic competition.

I think it's best to approach this by asking what capitalism is. I see it as a distributed computing resource allocation system.

That is:

  1. Decision-making is decentralized. Each agent has private information and communicates with the market through 'prices.'

  2. Actual decision-making / computing is going on; agents are choosing between alternatives, constructing portfolios, gathering information, and so on.

  3. There are some scarce resources that could be used to satisfy multiple different desires, but there's not enough to satisfy all desires.

You can construct an alternative by flipping those descriptions. For example, rather than a decentralized system, you could have a centralized system. This is empirically worse off, because we don't have easily scalable centralized computing, and information transfer is hard. (If you've already got billions of biological computers running around, why not make use of them?)

A zero marginal cost society is one in which we can satisfy all desires, without ever having to face tradeoffs between those desires. While this could eventually be possible, it seems unlikely, and is more likely to be accomplished through editing our desires than editing our environment. What's more likely is that the sort of things that we consider costly will change.

For example, consider a moon colony where air has to be filtered, to process CO2 back into breathable O2. You either have a bottle exchange, pipe connection to a filtration facility, or pay for the cubic and wattage to have plants that do your filtration for you, but 'breathable air' is a thing you budget for and part of your utility costs. On Earth, breathable O2 is zero marginal cost, because there's so much of it lying around.

Water is only slightly more expensive--yes, bottled water isn't cheap, but tap water is two and a half gallons for a cent. (People in the US use about 80 gallons of water a day, or about 32 cents a day, but rare is the person who drinks over a gallon a day.) So water is 'minimal marginal cost'--people will typically turn a tap on without a second thought if they want some water, but people also only consume ~4 times their volume in water a day, rather than hundreds or millions of time their volume.

Food is again more expensive, but still cheap enough that it is rare (in the developed world) to not have enough to eat, and cheap enough for government programs to fund distribution programs with only mild taxation. Most don't think of food as being zero marginal cost; it's typically expensive enough to get mindshare along with the rest of the budget.

But suppose that everything physical becomes as cheap as water. You decide you want a cup of Earl Grey tea, hot, and so you 'turn on the tap' and there it is. You decide you want a motorcycle, and so you 'turn on the tap', and there it is. At that point, what is the scarce commodity that is wanted more than had?

Some obvious things come to mind: status, attention, time, and so on. Bits of information are already cheap enough to transfer that many websites generate elaborate content to attract eyeballs, because sometimes those eyeballs click on ads or buy t-shirts or donate money. We already live in a world where people make professional salaries by designing clothing for electronic avatars. Even in the world where everything physical is free, it seems that there will be things for 'capitalism' to operate on. (You can imagine the differences between a capitalist attention economy and a communist attention economy, for example.)

It seems unlikely to me that we will reach a point where the physical world is as cheap as water in the next several decades--I think that 3D printing will be roughly competitive with current manufacturing (factories can make a lot of things very cheaply, and precision 3D printing may be finicky enough to require factory-like conditions), and we already know that renewables aren't as cheap as non-renewable energy (that's why we're going to all the trouble of drilling that oil). If energy isn't zero marginal cost today, more of it coming from solar isn't going to make the costs any lower!

comment by Zubon · 2015-05-06T14:51:53.438Z · score: 2 (2 votes) · LW · GW

I see it as a distributed computing resource allocation system.

Yes, good. Markets are a means of exchanging information via price signals. Prices distill a lot of information about production, distribution, and consumption into a single number. All the effort behind "I, Pencil" is output in the price of a pencil, and I can compare my need to that cost.

See also the economic calculation problem.

comment by Algon · 2015-05-03T19:28:45.171Z · score: 1 (3 votes) · LW · GW

Would you be okay with waiting a while before I reply? I need to check a few things here and there.

Edit 1: Renewable energies have lower subsidies globally than fossil fuels. In Germany, a quarter of energy comes from renewables. In fact, only 7% of the renewable sector in Germany was owned by the big traditional power and utility companies. The rest is owned by individuals (40%), energy niche players (14%), farmers (11%), various energy intensive industrial companies (9%), financial companies (11%) and small regional and international utilities owned another 7%. Gerard Mestrallet, CEO of GDF suez (a French utility company) called it a 'real revolution'

There are communities around the world where, after everyone switching to renewable energy sources, they no longer paid energy bills. That is, their energy was free. Part of the reason why we energy is not at zero marginal costs right now is because the current facilities, which are based on technologies from the second industrial revolution, are too inefficient. The building of an energy internet in the US will likely cost about $1.2 trillion, with a return of about $2 Trillion. This doesn't even begin to take into account how much more efficient such a system would be than the current one. The savings would be massive.

It requires massive corporations to take advantage of economies of scale in order to get a profit from fossil fuels. The new 'energy internet' is far more efficient. In fact, if it is properly installed, it represents a future where energies will be zero marginal cost.

temporary edit: that's it for today. I need to switch off the computer now.

comment by [deleted] · 2015-05-04T15:30:58.863Z · score: 2 (2 votes) · LW · GW

Their energy is not free. Even ignoring repayment and maintenance schedules, there is marginal cost because they only have so many renewable generators installed.

comment by VoiceOfRa · 2015-05-04T00:19:34.613Z · score: 2 (6 votes) · LW · GW

Renewable energies have lower subsidies globally than fossil fuels.

Citation please.

In Germany, a quarter of energy comes from renewables.

Only, because of German subsidies for renewables.

comment by D_Alex · 2015-05-04T06:50:40.510Z · score: 1 (3 votes) · LW · GW

Citation please.

"Fossil fuel subsidies reached $90 billion in the OECD and over $500 billion globally in 2011.[1] Renewable energy subsidies reached $88 billion in 2011.[2] "

from http://en.wikipedia.org/wiki/Energy_subsidies

(This is without even considering that fossil fuel usage imposes external costs such as pollution, that the fossil fuel user does not pay. Some have argued that this amounts to an effective subsidy of the order of a trillion dollars per year).

comment by Alsadius · 2015-05-04T11:56:06.735Z · score: 2 (4 votes) · LW · GW

But renewables are vastly smaller than fossil fuels, and the relevant number is subsidy per unit energy.

comment by D_Alex · 2015-05-05T02:26:57.538Z · score: 0 (0 votes) · LW · GW

But renewables are vastly smaller than fossil fuels

Not really. From http://en.wikipedia.org/wiki/Renewable_energy :

"Based on REN21's 2014 report, renewables contributed 19 percent to our energy consumption and 22 percent to our electricity generation in 2012 and 2013, respectively"

So if you believe Wikipedia (and is there a better general source?), fossil fuels attract more subsidies per unit energy as well as in total.

comment by Alsadius · 2015-05-05T15:05:19.283Z · score: -1 (1 votes) · LW · GW

Remember, a lot of renewables get thrown in together without being the same. The renewables that get subsidies are mostly the flashy new ones, like wind, solar, and ethanol. Those are only a few percent of world consumption. Virtually all renewable energy production is either hydroelectric(which is quite profitable, and attracts basically no subsidies) or burning of wood and dung(which almost entirely happens in poor countries that can't afford to subsidize much of anything). Slightly dated graph, but one that gives a good sense of how things break down: http://en.wikipedia.org/wiki/Renewable_energy#/media/File:Total_World_Energy_Consumption_by_Source_2010.png

Also, over 80% of fossil fuel subsidies are outside the OECD? Seriously? 80% of the money spent on anything being non-OECD is hard to fathom, because the OECD has somewhere around 80% of the world's money, and a lot more disposable income to blow on subsidizing things.

comment by D_Alex · 2015-05-06T03:22:45.696Z · score: 1 (1 votes) · LW · GW

Remember, a lot of renewables get thrown in together without being the same. The renewables that get subsidies are mostly the flashy new ones...

I have provided a few facts... you are trying to put a certain interpretation on them. To what end? What is it exactly that you are trying to argue?

Seriously? 80% of the money spent on anything being non-OECD is hard to fathom...

And now you are denying the data.

What is subsidised and where, is decided by factors that are not necessarily obvious or "sensible", and there is a huge element of political electability. In OECD, fuels are a source of taxation revenue, whereas farmers, for example, benefit from subsidies. In the middle east and South-East Asia, fossil fuel is heavily subsidised, eg. in Indonesia gasoline sold for about 90% of crude oil price while I was there (and Indonesia imports their crude). I read that fully half of government revenue was at one point used to pay for the fuel subsidies. Why? Well, as soon as there is a discussion of reducing the subsidies, protests break out, and the politicians supporting the reductions do not get re-elected....

comment by Alsadius · 2015-05-08T16:00:09.311Z · score: 0 (2 votes) · LW · GW

If that non-OECD number is to be believed, 2% of non-OECD GDP goes to fuel subsidies. Or, if you prefer to think of it this way, it's close to 1/3 of the total world oil market to fossil fuel subsidies. And this number comes from a think-tank that's obviously out to make an anti-subsidy point, with no detail as to where it came from or why we should believe it. Think tanks aren't to be immediately dismissed, but they frequently exaggerate badly.

And the discussion is about why renewables get used. German use of renewables is very different than Canadian or Congolese, and aggregating them leads to muddy thinking and useless stats. Germans use modern renewables because the government is dumping a bloody lot of money into the industry. Canadians use renewables because we have massive amounts of easily-tapped hydroelectric potential, and hydro dams are the cheapest source of power known. Congolese use renewables because they have no better options than burning wood.

I'll agree with you that some poor countries spend a lot on subsidizing gasoline, but it's only a lot by poor-country standards, and it's hardly all of them. I want a better source than naked statement of a number from a biased group before I'll believe it adds up to that staggering a sum. And even if it does, that has no impact on the US, where fossil fuel is nearly unsubsidized - if you want me to think that renewables and an "energy internet" are a good choice for the US, then you need to explain how switching from a cheaper source to one that's more expensive even with bigger subsidies is a net cost savings.

comment by D_Alex · 2015-05-10T06:00:38.373Z · score: 0 (0 votes) · LW · GW

I still do not understand your objective in this discussion. It seems that you are implicitly against subsidising renewable energy. Is this correct?

(I work in the oil and gas industry, by the way, so fossil fuel subsidies sort of help me out...).

For that matter, I do not understand the upvotes in this thread. A citation was asked for - then it was provided - and then there are several posts attempting to invalidate the citation, attracting upvotes. Strange.

I want a better source than naked statement of a number from a biased group

We all do... could you please provide one?

if you want me to think that renewables ... are a good choice for the US...

I don't know when this discussion started to be about the US, and I don't know if I really care enough about what you think to put in more effort... are you in a position to influence what the US chooses? If yes, then I will explain why this statement:

how switching from a cheaper source [presumably fossil fuels] to one that's more expensive [presumably renewable energy]

is wrong.

comment by Alsadius · 2015-05-12T18:32:13.857Z · score: -1 (1 votes) · LW · GW

I am explicitly against subsidies, full stop. I am also of the belief that the fashionable sorts of renewables(wind, solar, etc.) get vastly more subsidies than any other form of power, particularly in the developed world, and this belief is borne out by my own experiences with my local government and with stories from elsewhere. And I thought the US was being discussed, because it usually is, but looking upthread it seems I was in error there. If any country was being discussed it was Germany, though their example is hardly different - they're spending a ton of money for an inferior power source.

comment by Vaniver · 2015-05-03T21:17:49.974Z · score: 1 (1 votes) · LW · GW

There are communities around the world where, after everyone switching to renewable energy sources, they no longer paid energy bills.

Right, but what was the alternative? Suppose I talked about communities where, once everyone bought into the buyer's cooperative, food was free. (That is, they invested the capital accumulated up-front into a black box that was able to provide food for the community for twenty years.) A few things become apparent:

  1. There must be some sort of limitation. Food could easily be free for me, because I can only eat so many calories a day, but not free for me and my closest million friends in the developing world, unless they also buy in. (For energy use, the relevant user is probably heavy export manufacturing.)

  2. While this sounds great, whether or not it makes numerical sense is another question. How much would you be willing to pay now for free food for the rest of your life? There's some number where it makes sense for you as a customer, even if that requires taking out a loan now, and there's some number that makes sense for them as a supplier, but there's no guarantee that your number will be bigger than their number. (It might cost them a million dollars, and only be worth $100k to you.)

That's not to say these sorts of arrangements never make sense--they often do. But whether or not they make sense has to include some accounting to be serious. (I will note that Exxon is investing in renewable energy--whether as a PR move or a hedge against a foreseeable change in the future, I don't know. But my impression is that once it does make sense to switch, they'll switch. They're in this business for the money, not because they like oil.)

It requires massive corporations to take advantage of economies of scale in order to get a profit from fossil fuels. The new 'energy internet' is far more efficient.

Whoa, hold on a second. Let's take for granted that the energy internet exists as you describe it: an infrastructure investment that costs $1.2T but returns $2T. This requires even more massive corporations than the ones that we currently have, the largest of which typically make investments in the $B rather than the $T. (The largest publicly held corporation is worth about $0.5T.) The issue at stake isn't efficiency, but scale.

That is, a company with $1.2T to invest in nuclear, or coal, or oil, or so on, might also be better than the current US energy supply, and this is just a generic statement of the form "if you invest more money into X, X will be better" and "if you make an organization larger, the amount it can invest in multiplicative improvements increases." (In general, this is one of the reasons why I don't think antitrust laws are all that useful; having people like Rockefeller or Carnegie sitting on metaphorical gold mines and interested in investing in efficiency to get even more profits seems like a good way to ramp up technological growth.)

comment by Algon · 2015-05-04T07:29:00.606Z · score: 1 (1 votes) · LW · GW

Ok, so I'm not advocating a world where there is suddenly no business modal and everyone does whatever the hell they want.

I'm advocating (seriously, the book was really comprehensive and very good) the Commons as a governing scheme, wherein members share their resources and have general rules of self governance. This has happened around the world, and there are many isolated communities which have practised this governance model for centuries.

And in regards to your last point, I didn't say that companies would fund anything like this. It would in fact be the people themselves. That is, utility companies will pass on the cost to their customers in the form of small hikes, and the rest will be absorbed by the government over about three decades.

Things like this (upgrade of the electricity grid) have happened before, and they were also public ally funded. For example, in America in the early 20th century, many people didn't have electricity as they were living in rural areas. The then power companies didn't want to invest in them, as they thought rural homes were too few, too spread out and lacking in purchasing power. As a result, the government attempted to do it themselves. And thus the rural electric administration was born.

Sadly, the government could not do provide power to rural America all be themselves. So what did they do? They encourage rural farmers to form electric co-operatives, and granted them low-interest loans along with technical and legal assistance.

The result? Rural America got electricity for about 40% of the cost of what the utility companies estimated it would cost. Massive economic benefit shortly followed.

comment by Vaniver · 2015-05-04T14:33:48.781Z · score: 0 (0 votes) · LW · GW

Ok, so I'm not advocating a world where there is suddenly no business modal and everyone does whatever the hell they want.

Agreed! But this is why it's important to keep "free" separate from "cheap." At some point, someone will want something and not obtain it. The questions are what, why, and who. Capitalism seems like the best scheme for answering those questions, because of the various properties I discussed above (and some that I haven't brought up yet).

One of the strengths of capitalism is that it allows voluntary organizations to spring in and out of being--and so people can form whatever cooperatives they want, to take advantage of any new ideas or differing economies of scale. When things move from 'expensive' to 'cheap,' the sorts of organizations that exist around those things change accordingly.

Government is useful primarily for involuntary organizations--which have their benefits, but also their drawbacks, and should be employed with caution. It seems very likely to be proper to enforce nonviolence on the population through violent means, while much less likely to be proper to enforce a particular purchase or behavior on the population through violent means. But there are other purchases or behaviors that it may be proper to enforce, and so on.

comment by Algon · 2015-05-04T14:45:28.427Z · score: -2 (2 votes) · LW · GW

That's why I'm advocating the commons as an alternate to capitalism. I mean, capitalism has done a lot of good, but it has also done a lot of bad. Or more accurately, it has allowed a lot of bad things to happen. I would still prefer a capitalist world to the old hunter gather one, or a Marxist society. But I just think that the Commons represents a good, or maybe even better, alternative.

I've added a few links to the main discussion post. I recommend them because they will probably get the idea of the commons across way better than I can.

comment by Dahlen · 2015-05-03T23:36:17.876Z · score: 5 (7 votes) · LW · GW

Disclaimer: If I'm wrong about something, I appreciate corrections, but please don't be an asshole about them. I know myself not to understand economics very well.

When something is as ubiquitous, as pervasive, as well-supported, as institutionally-backed as capitalism, you have to make significantly better arguments against its use than the mere fact that it has some obvious inefficiencies in some branch of it. Capitalism can wreak ruin among large swathes of the world, for all people care about. That still wouldn't stop them for doing their damnedest to preserve the system.

As someone who's been working for a while at coming up with economically sane alternatives to capitalism, I'll do my best to share my understanding of why, as it were, "it's complicated".

One, capitalism is what emerges when an economy can make proper use of currency, and the state allows people to trade without monopolizing all economic activity within its territory. Wherever it is found, money obeys certain laws and trends, which have been codified into a fairly rigorous science called economics. In other words, you'd have to move beyond money and trade for capitalist economics not to apply. This is non-trivial. Take my word for it. I've dedicated a lot of brainpower to the matter and I have yet to find a factor as motivating as money that you can introduce into an economic system. Socialist states have attempted to run money economies on non-capitalist principles and got fucked over by economics -- the same economic laws which they rejected. It is far easier to invent capitalistic workarounds for disruptive technologies than to redesign the economic system of a country or of a planet.

Two, capitalism does not exist in a vacuum. It's not intellectually self-contained. You cannot uproot explicitly capitalistic ideas from people's minds, in ignorance of the implicit ideas they were founded on, and expect them not to grow back. This goes as deep as people's understanding of the idea of property or the necessity of trade. Take property, for instance. You can get a feeling of the fluidity of the concept by looking at the debates around intellectual property. Is piracy theft? Yes or no? In ye olde days, to steal something meant to forcefully and illegitimately transfer ownership from someone to yourself, depriving the rightful owner of his/her wealth. Piracy of digital products, however, does not deprive anyone of anything; you can make as many copies of something as your storage space allows, without anyone getting poorer; you only deprive some people (the author, the distributors) of potential wealth. With intellectual property, the concept of property gets redefined so as to allow capitalism to continue as normally. You could also take a look at the extremes of the ideological spectrum to see how they differ in their understanding of property. On the right side, you have the libertarians who say "taxation is theft". They draw the borders around the idea of property so as to include their gross income, as decided by the market forces, and view the state's claim to a share of that as illegitimate. On the left side you have those who say "(private) property is theft". They feel (not kidding here) entitled, as a class, to everything that came out of the hands of wage-workers, a.k.a. the proletariat, a.k.a. people who do not own other means of production than their own capacity for labour. When they speak of the revolution of the proletariat and the expropriation of the wealth of the bourgeoisie, they feel like they're taking back what was rightfully theirs from the start.

Or take trade. One of the most stupid... eh, I mean, frequently asked questions I get when I suggest the idea of a moneyless economy is, "but doesn't that mean going back to barter? How would you convince people to work for nothing?". It's a struggle to get people to simultaneously keep in their minds the ideas of working for nothing and of paying for nothing, and why, when taken together, they don't lead to the sort of disaster that they would if they were considered separately. With modern people, there's simply a trade-shaped hole in their minds. It's how they were raised to view an equitable acquisition of something -- as an exchange between two things of equal value.

These conceptualizations of the economic side of life are fundamental. They cannot be changed in a population within two or three generations, and they meaningfully impact the economic behaviour of people.

Three, it's quite the mistake for folks to focus so much on ordinary vanilla goods like food or water or various widgets, and to neglect the sorts of products that barely ever appear in non-capitalist economies -- the edge cases that prove the real challenges. You could be completely primitive and still not worry about the availability of food or clothing or shelter. This therefore has no important implications for capitalism. Consider instead other classes of goods or services. Benefiting from the time and skills of a good surgeon. Luxury goods. (Have you been around upper class people? It's one of those rare circles where the impact of prices over desirability deviates from ordinary intuitions -- goods get more desirable as they get expensive.) Exceedingly good service. Mercenary work. (It used to be a thing, you know.) The value of a good engineer. Basically everything that requires going that extra mile. There's no motivator quite like profit.

Four, people, and the powerful sort in particular, happen to very much like the status quo. For all the talk about eradicating poverty and income inequality, there's something that some people want, that you cannot get in a relatively egalitarian society: bargaining power. You cannot get a child who isn't starving to work in a sweatshop. You cannot have so much leverage against someone who can defend himself from your attacks. Without slaves, there are no masters. There are less cruel ways to talk about what I mean, as well: money is enmeshed in modern government, and states (whose income is overwhelmingly extractionary) demand for taxes to be paid in money. (After all, it would be inefficient for a government to demand payment in physical goods or in labour, for much the same reason as barter is inefficient.) Libertarians love to emphasize the antagonism between the government and the market, but in truth they're deeply interconnected, more so than they have opposing interests. The only category of people that do not directly have a vested interest in the preservation of capitalism comprises poor and powerless people, and even they may get used as cannon fodder if capitalism, when it eventually goes down, goes down in flames. (So they're indirectly interested in the general stability of the regime.)


Long story short, no, capitalism and the profit motive are not going anywhere, and no disruptive technology is going to change that. It doesn't matter how cheap basic goods become, or how easy everything is thanks to automation. If the maintenance of the system requires that producers tap into the endless bag of bullshit needs and jobs in order for us to still have something we call "value", then so be it. If you look at technology as some kind of way out of capitalism, ask yourself who produced the technology, and what their revenue is.

comment by Viliam · 2015-05-04T20:32:50.189Z · score: 4 (4 votes) · LW · GW

everything that requires going that extra mile. There's no motivator quite like profit.

Yes, this is the question I would want to have answered first, when speaking about a hypothetical non-capitalist economy. Imagine that there is a situation where...

  • someone else needs you to do something for them (because they and their friends don't have the necessary skills)
  • you are neither their friend nor family; after doing the work for them you will probably never meet them again
  • you would honestly rather spend your day doing something else, such as playing your favorite computer game
  • if required, you have a plausible excuse (you can pretend that the work exceeds your skills, even if it doesn't)

...what would motivate you to do it for them anyway?

One option is to bite the bullet and say "well, in my utopian society such things would simply never be done". It is an option; and maybe living in such society could still be better on average than what we have now.

Yes, a few people would sometimes die because all surgeons would be playing League of Legends online. But everyone accustomed to living in that society would understand that you cannot blame those surgeons, because they made their free decision they were entitled to; and if you have a different opinion about what surgeons should do, instead of complaining, you should have become a surgeon yourself and do what you believe is right. Maybe the number of people who would die this way would be still smaller than the number of people who today die for other capitalism-caused reasons.

But in our society we have this intuition that if you require other people to go an extra mile for your benefit, you should in return do something else for their benefit. Money, token money, barter, or just something nebulous like status. ("I will remove your appendix if you upvote all my LessWrong comments.")

Other solution is coercion. You have a Taskmaster General, people tell him what they need done, and he assigns those tasks to people who have the necessary skills. If you don't do the assigned task, you get shot. No money necessary, and people are still motivated.

This comes with a lot of problems, for example sometimes you are assigned a task that is truly above your skills, but no one believes you (too many people already tried to excuse themselves by claiming something was too difficult for them, but when a gun was put to their heads, they did it successfully), so you fail, and then you get shot. Also, the Taskmaster General will most likely abuse their powers horribly.

Yet another choice -- beyond trade, coercion, and not having things done -- could be perfect brainwashing. A society where people would be psychologically unable to refuse a request for help. Some people already tried this, but they overestimated their brainwashing skills. But for the sake of experiment, let's suppose that the brainwashing is done successfully. We still have a problem of what happens when there are more requests than people can fulfill. You have to make priorities. How specifically? What if no one will give priority to your pressing needs, because they will always prioritize something else, including completely stupid stuff? Maybe the brainwashing should also include making people unable to requests things they don't seriously need. Or maybe, before you make your request officially, a jury of your peers will evaluate whether your request is reasonable. -- But I feel this direction assumes that the brainwashing itself will act like an intelligent and benevolent entity. Otherwise you could get a society where e.g. most people become religious, and most of the tasks done will be religious rituals. People will request them because they will honestly feel that making God happy is the most important thing, and their brainwashed neighbors will be unable to refuse.

comment by Dahlen · 2015-05-04T22:32:33.102Z · score: 0 (0 votes) · LW · GW

Good points. I don't know, I genuinely don't know yet; this problem is by far the biggest obstacle in the face of a non-capitalist economy (all the rest require more easily conceivable technological and institutional infrastructure). Still racking my brains...

(A more detailed, but still incomplete presentation of this little snippet of an idea was actually the theme for a mega-post I got planned, but it looks like every time I open my mouth about a potentially controversial topic my karma barely manages to break even and I get trolled to hell and back, so that's a bit of a deterrent for me to even talk about politics any longer.)

The challenges are on multiple levels: 1) to show up at all at work; 2) to exceed expectations and do a great job; 3) to innovate, invent, revolutionize a field.

The only other bunch who has about the same stated goals consists of the anarcho-communists (which provide most of the availabe discussion on the topic), but they don't go about it in a rational way. When confronted with the problem of laziness, their approach is 60% "revolution will kiss it and make it better", 30% "we need to indoctrinate everyone thoroughly into communism" and 10% "if someone refuses to work, off with their heads!". (Broadly, the three approaches you mentioned.) They can't into incentives, disapprove of even mild and justified hierarchy, are heavily into Marxist concepts, and allow wishful thinking to heavily bias their model of how things would happen. That's not how you succeed in such an endeavour.

Coercion is probably the worst way out of this. Creating an atmosphere of fear is inimical to prosperity, innovation, industry, and the entrepreneurial drive. It puts people out of the "thrive" mode and into "survive" mode. The output is bound to be mediocre at best.

It might be very necessary to think outside of the box on this topic, to step outside the contemporary Western paradigm and explore the matter from all possible angles. Who knows, maybe money isn't the end-all-be-all of it. The neural underpinnings of self-interested motivation certainly predate the invention of money. I've considered rewards in luxury goods and in status, promotion to aristocracy, demotion to serfdom, consumers as management class... heck, even getting people on stimulants to improve their productivity. I've even considered limited monetary circuits for certain classes of goods, but before becoming convinced of the merit of this idea, I need to quell my fears that down that road lie Wall Street, landfills, corporate jargon, and mandatory ubiquitous advertising.

I won't expand on this any more until I feel like I have something especially useful to say, and will only post that essay (which gets a few FAQs out of the way) if I have reasons to expect that more good stuff than bad will come out of the ensuing discussion. And even that, probably not here but on Omnilibrium.

comment by Viliam · 2015-05-04T23:04:31.206Z · score: 4 (4 votes) · LW · GW

By the way, getting money for your work is not only about motivating you by a reward. It is also a way to give you resources for your future plans.

"If your plans work, you get money, which you can use to finance more ambitious plans" is a nice feedback mechanism that channels money towards plans that work, as opposed to wasting resources on stupid plans that fail. (Yeah, it does not work perfectly. But in many small cases it does.) Without this mechanism, your ability to realize your plans would only depend on your military power or social skills.

So it's not just about the risk that the possible startup investors would not be allowed to keep their profits, but also the risk that they would simply not be allowed to create the startup, because they couldn't accumulate the necessary capital. -- Imagine that you have a great startup idea, which requires 100 days of uninterrupted full-time work, and then will revolutionize the world. But as soon as you don't participate in your usual work for 20 days, your comrades become resentful, and after 40 days they will physically stop you from working on your startup (which they believe is a bad idea that cannot work; this is why no one already did it before you). Even without violence, maybe just everyone will refuse to cooperate with you anymore, and let's say that you need some cooperation to succeed.

comment by VoiceOfRa · 2015-05-05T01:33:29.458Z · score: 3 (5 votes) · LW · GW

Good points. I don't know, I genuinely don't know yet; this problem is by far the biggest obstacle in the face of a non-capitalist economy (all the rest require more easily conceivable technological and institutional infrastructure). Still racking my brains...

So do you have any evidence this is doable, because right now you sound like the crackpot saying "my perpetual motion machine will work just as soon as I figure out a way around the second law of thermodynamics".

comment by ChristianKl · 2015-05-04T20:53:42.888Z · score: -1 (1 votes) · LW · GW

or just something nebulous like status. ("I will remove your appendix if you upvote all my LessWrong comments.")

Doctors already have a high status in our society. If you look at upvoting LW post you miss how most status works.

comment by ChristianKl · 2015-05-04T22:25:46.558Z · score: -3 (3 votes) · LW · GW

you would honestly rather spend your day doing something else, such as playing your favorite computer game

Is quite easy to have a system where there's social disapproval for people who spent a lot of time playing computer games. Especially when you have social norms where it's normal that people are open about how they spent their time.

comment by Viliam · 2015-05-04T23:08:49.158Z · score: 4 (4 votes) · LW · GW

Then instead of freedom, you have to do what other people think you should do. Unless you have enough social skills to convince them to let you do something you actually enjoy.

If people can punish you for playing computer games, they can also punish you for e.g. writing a book about rationality.

comment by ChristianKl · 2015-05-05T10:08:24.050Z · score: 0 (0 votes) · LW · GW

You can have social norms that hold people who have passion for big long term goals in high regard. That discourages sitting around and playing computer games all day while it encourages big projects like writing a book about rationality.

Don't treat present societal norms as universal when it comes to taking about possible systems.

Then instead of freedom, you have to do what other people think you should do. Unless you have enough social skills to convince them to let you do something you actually enjoy.

For a society like this to work in a way that people can do what they enjoy you might need a higher average social skill level than we have in our society. You need deeper interactions.

Then instead of freedom, you have to do what other people think you should do.

We also don't have perfect freedom. In our society you get punished socially if you are poor. You can replace that norm with asking whether people work towards a life purpose that inspires them.

comment by Lumifer · 2015-05-04T23:30:14.876Z · score: -3 (3 votes) · LW · GW

Is quite easy to have a system where there's social disapproval for people who spent a lot of time playing computer games.

You forgot an important qualifier: in Northern Europe.

comment by ChristianKl · 2015-05-05T09:26:35.974Z · score: 0 (0 votes) · LW · GW

You miss the point. We are talking about possible social systems.

comment by VoiceOfRa · 2015-05-04T00:31:34.080Z · score: 4 (6 votes) · LW · GW

It's a struggle to get people to simultaneously keep in their minds the ideas of working for nothing and of paying for nothing, and why, when taken together, they don't lead to the sort of disaster that they would if they were considered separately.

Because they still lead to disaster when taken together. If the idea is that people work for nothing and get goods for free, what's anyone's motivation to work?

comment by [deleted] · 2015-05-08T10:44:05.127Z · score: 0 (0 votes) · LW · GW

To be fair, a lot of work is self-rewarding. To understand Steven Jobs, you cannot really just look at his bank account.

But a lot of other work isn't. But I guess a good answer would be that people use money to buy status anyway, so any system that that just gives status to people doing the best work could roughly work and in small communities it indeed does.

On the other hand, money has clear advantages as a vehicle of conveying status, rather obvious ones. The real "trick" seems to be that money also buys productive resources, not just status. So a succesful businessman can cash out into a yacht or reinvest the profit. This seems to be the difference, it is possible to give status to someone just through popularity, or a king giving a medal and a knighting, but this cannot be converted into productive resources. Probably every transactional system needs a medium of exchange that buys both status and productive resources and if it does it will be effectively equivalent to money.

On the third hand, lacking status does not make people starve.

I guess I am back to the idea I talked about before. Within small communities, like an extended family, socialism. Give status to best workers but not through money, because you want to feed etc. everybody inside your microcommunity. And between these microcommunities capitalism.

comment by VoiceOfRa · 2015-05-09T02:22:57.321Z · score: -1 (1 votes) · LW · GW

To be fair, a lot of work is self-rewarding. To understand Steven Jobs, you cannot really just look at his bank account.

And yet he did in fact wind up with a rather large bank account. Are you seriously going to argue that if managing Apple wasn't profitable he wouldn't be doing something else?

comment by [deleted] · 2015-05-11T07:44:20.499Z · score: 0 (0 votes) · LW · GW

For some values of "not profitable" yes. The point is that the "profits" must came in the form of success, achievement and status. Not necessarily money, although indeed money is the most common form of success, achievement and status in a commercial, peaceful period of history. Jobs may have been a stellar general during WW2, and in that case making headlines and history books would be the "profit", not the generals salary.

comment by Dahlen · 2015-05-04T00:41:56.436Z · score: -2 (4 votes) · LW · GW

You know what, I'm still trying to figure this one out, but when I do, I'll share it with someone who's open to the idea of an answer. I've seen you around. You've made up your mind already. I'm totally not getting sucked into that kind of conversation.

comment by VoiceOfRa · 2015-05-04T02:53:10.563Z · score: 0 (2 votes) · LW · GW

You've made up your mind already.

Only in the same sense that your typical physicist can be said to have "made up his mind already" about the possibility of perpetual motion machines.

comment by ChristianKl · 2015-05-04T01:05:33.901Z · score: 1 (1 votes) · LW · GW

I don't think the central point of money is that it's the best motivator. The great advantage of a market economy is that the amount of resources that get spend on useless projects that nobody is willing to pay for get's reduced.

For all the talk about eradicating poverty and income inequality, there's something that some people want, that you cannot get in a relatively egalitarian society: bargaining power. You cannot get a child who isn't starving to work in a sweatshop.

I don't buy that argument. The West doesn't really need sweatshops at current labor prices. Labour costs are only a tiny element of the price of our products.

Instead of jeans from China I would much rather have a computer doing the work and creating a jeans that matches my own size.

(After all, it would be inefficient for a government to demand payment in physical goods or in labour, for much the same reason as barter is inefficient.)

Various countries have a draft and the US has jury duty which asks for payment in labor. The payment that German had to pay because of the treaty of Versailles was in physical goods.

comment by VoiceOfRa · 2015-05-04T02:50:23.565Z · score: 1 (1 votes) · LW · GW

Instead of jeans from China I would much rather have a computer doing the work and creating a years that matches my own size.

Yes, the Chinese should just stick to pre-industrial age agriculture.

comment by Dahlen · 2015-05-04T01:40:22.109Z · score: 1 (1 votes) · LW · GW

The West doesn't really need sweatshops at current labor prices.

That's... better news than I hoped for. I had a hunch that extremely cheap labour is not so much a necessity than a preference of the producers, but not that the practice could be eradicated altogether.

comment by [deleted] · 2015-05-05T07:59:05.121Z · score: 3 (3 votes) · LW · GW

You ever been to a village with a "sweatshop"? I have. They're the highest paying employers in town. The kids working at the "sweatshop" have more food, more clothing, and ultimately more education than their peers. These "sweatshop" factories result in more social benefit than all of the foreign aid that flows into these countries.

comment by Zubon · 2015-05-06T14:41:37.634Z · score: 3 (3 votes) · LW · GW

This is important. On an absolute scale, sweatshop jobs are not great jobs. But they are better than many of the jobs that most of humanity has worked over the centuries, both in terms of labor and reward.

Many people are enthusiastic about eliminating sweatshop jobs. Eliminating bad options does not create better ones. If a sweatshop job is the least bad option around, and you eliminate it without creating a better option, you have just worsened someone's life.

I wouldn't want to work in a sweatshop. I don't want anyone to need to work in a sweatshop. But we should recognize that bad options are the best options available when all the other options are even worse. You can't just get rid of bad things. You must also create something better to replace them.

comment by ChristianKl · 2015-05-04T18:24:44.779Z · score: 1 (1 votes) · LW · GW

Even if Nike wants to have it's T-Shirts manufactured at a higher hourly wage, it's not as easy for them to do so because they don't own the factories in which the T-Shirts get produced.

There were attempts by Western companies to pay workers more money but the factories owners simply lie over the wage they pay the workers. That wages also often is still over the average wage in the region.

comment by Lumifer · 2015-05-04T00:57:35.187Z · score: 0 (2 votes) · LW · GW

Given all this, I have to wonder why have you "been working for a while at coming up with economically sane alternatives to capitalism".

comment by Dahlen · 2015-05-04T01:02:15.280Z · score: 1 (1 votes) · LW · GW

It's entertaining to think about, and besides I'm not expecting anything bigger than a village-sized intentional community to come out of it. I'm pretty okay with capitalism existing and being successful for as many people as possible.

comment by Lumifer · 2015-05-04T01:03:46.885Z · score: 1 (3 votes) · LW · GW

If that's all you want, kibbutzim exist, are about village-sized, and are definitely not capitalist...

comment by Dahlen · 2015-05-04T01:29:02.074Z · score: 2 (2 votes) · LW · GW

... and are mostly Marxist and I'm tired of that shit. It's exhausting to try to talk about economic matters with ideologues who can't take a good honest look at reality. That's why I strive to improve the accuracy of my beliefs by testing them against the most unfavourable, painful, and cynical version of reality that still remains plausible.

From what I've researched so far, there certainly seems to be a world of broadly "leftist" economic thought imaginable beyond Marxism.

comment by Viliam · 2015-05-04T21:00:11.785Z · score: 0 (0 votes) · LW · GW

Any opinion on Mondragon Corporation? Seems large and successful... well, guessing from the Wikipedia article, because I do not have other information about them. And they are not completely anti-capitalist, but neither are they a typical capitalist corporation.

comment by Dahlen · 2015-05-04T22:50:30.538Z · score: 0 (0 votes) · LW · GW

An interesting business model, one I knew about for quite a while and would like to see a little more of. If the numbers allow, I'd go a step further and satisfy internal (employees') demand of co-op products for cheap or for free, and sell the surplus, thus paying people partly in goods, partly in money. Sharing with insiders, trading with outsiders. (I don't know whether Mondragon co-ops do that, and couldn't find anything about it.) It seems to combine the best of both worlds... at least to the naive eyes of a non-economist.

comment by Viliam · 2015-05-05T09:02:09.379Z · score: 1 (1 votes) · LW · GW

A frequent complaint I found online about co-ops is that the ability to take profits without sharing is too tempting, and soon most of them become two-tiered.

You have the old employers who have founded the company together and now they are co-owners; and the new employers who were not given the option of co-ownership, and have to work like employees in a regular company. Alternatively, instead of hiring new employess, some services are supplied by a contractor, so the contractor's employees de facto work for the co-op, but are not its co-owners.

This is something that idealists complain about, because their dream is that "if co-ops will become popular and successful, gradually all companies will become co-ops, and every worker will be a co-owner", that is a peaceful gradual transition from capitalism to workers-owned economy; but in reality it seems like the co-ops only change the economical monarchies to economical oligarchies, not economical democracies. They become similar to companies as usual with multiple owners.

Actually, I imagine that this change can come quite naturally, even if you don't plan it. Imagine that you are an idealist, and your dream is to transform the whole world to co-ops. You and your other idealistic friends create a co-op which e.g. makes computer games. And you need someone to clean your rooms. Would you make that person an equal co-owner? That feels like an overkill. So you would just pay some company to send someone to clean your rooms.

But in a way that shows practical problems of workers-owned economy. If you have people who work for multiple companies, should they get an ownership in each of them? But then they should probably get smaller ownership than people who only work for one company. If there is a production chain where a company X produces tools or services for a company Y, shoud employees of X automatically get ownership of Y, and vice versa? That could be rather impractical for companies which provide services to huge number of customers, such as phone companies. -- Saying that something is "workers-owned" is merely an applause light unless we specify which workers owns how much of which company.

comment by RichardKennaway · 2015-05-05T12:54:41.933Z · score: 0 (0 votes) · LW · GW

Another example is John Lewis, a UK chain of department stores owned by its employees.

comment by James_Miller · 2015-05-03T19:12:03.547Z · score: 5 (5 votes) · LW · GW

when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system?

Goods that can be produced for zero marginal cost per copy but have a positive fixed/sunk cost (like software) pose a challenge for any economic system including capitalism because you need a way to pay for the fixed costs but you want to let anyone who gets any value from the good get it. But capitalism, I believe, offers to best hope in part because of capitalism's creativity. In the past advertising revenue was found to be a way to pay for the production of the zero marginal cost goods of television and radio shows. And Wikipedia, blogs, and open source software projects have arisen in the capitalist world.

Note there is a difference between price and cost. Even if costs=0 prices can, and sometimes should be positive.

comment by Algon · 2015-05-03T19:23:08.607Z · score: 1 (1 votes) · LW · GW

Oh, I know that no cost doesn't equal zero profit. It is entirely possible that the world will stay capitalist because of various powerful groups (the book also happens to covers this topic. I would recommend it. I think its quite good. But of course, the whole reason I posted this was to see if it is actually any good. So let's wait and see?)

You said that there are fixed costs for things like t.v. shows, and I agree. But part of the reason, maybe most, that people don't create things for free is because the want wealth. And people typically want wealth because it lets them get various goods and services. But if you can get those services for essentially nothing, then there isn't much need for profit.

So if you can get things for essentially zero and have most of your basic needs provided for, you don't really need a job. With this sudden upsurge in free time, and with the basically free equipment, people are capable of indulging their creative/intellectual pursuits.

Just look at all the great works people have put up for free on the internet. Sure there are things like patreon, but creators only really want to make a decent wage so they can provide for themselves and their families, no? You said that there are fixed costs for things like t.v. shows, and I agree. But part of the reason that people don't

comment by James_Miller · 2015-05-03T20:14:30.443Z · score: 1 (1 votes) · LW · GW

Lots of adults today in the United States don't work, and I expect this percentage to increase as we get richer and acquire better automation. But if we keep intellectual property then some people will create stuff that they are only willing to sell for a positive price so they have money to buy stuff that other people are unwilling to give away for free. This could be an efficient outcome if it motivates people to create stuff that otherwise wouldn't exist.

comment by Algon · 2015-05-04T07:10:12.987Z · score: 0 (0 votes) · LW · GW

I didn't mean to say that 'capitalism will be destroyed'. Just that I was converted to the idea that it will one day be eclipsed by The Commons as an economic paradigm. The market will still exist, and may well continue to be the dominant economic paradigm, but it is also possible that the commons will overcome it. So people who only sell things for a positive price will still exist. But more and more, people are making things on creative commons licences, where everyone is allowed to freely use it. This trend has emerged in various sectors over the past decade or two, and is only growing. Hotels for example are being challenged by various free, or very cheap, services where members stay at other members houses.

comment by knb · 2015-05-04T02:16:23.204Z · score: 3 (3 votes) · LW · GW

In it, the author states that we are in the midst of a third industrial revolution as a result of a new energy/production and communications matrix i.e. renewable energies, 3-D printing and the internet.

Even if Rifkin was right about manufactured products and energy becoming ~free, that leaves about 70% of the US economy that remains not-free, i.e. the service sector. You can't 3D print a dentist or plumber.

In any case I greatly doubt that 3D printing will be cheaper than current manufacturing. A 3D printer is not a nanofactory, and won't be anytime soon.

This is basically an argument that we are nearing a "post-scarcity" economy, and therefore we must transition to communism. This is an idea as old as Marx, if not older.

In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!

The problem is that there is a massive amount of not-fun work which needs doing. Contra the marxists, most work is not fun--and will never be fun. Corey Doctorow tried to solve this problem in his Utopia by using a form of pseudo-money called Whuffie.

comment by Viliam · 2015-05-04T12:26:22.524Z · score: 1 (1 votes) · LW · GW

The problem is that there is a massive amount of not-fun work which needs doing. Contra the marxists, most work is not fun--and will never be fun.

I think it is more complicated than merely "fun" and "not fun".

Some work requires a lot of education -- programming, or surgery. The work itself perhaps is not so bad, and someone would volunteer to do it for free... but first they would have to spend years or decades just getting the necessary education and skills.

If we would have an utopian society tomorrow -- where I would know that I will never have to work for living, and yet all my needs will be fulfilled -- and someone would ask me "Viliam, could you make a new version of LW website?", I would probably say "yeah, it seems like an interesting work, I will start it right now". But I could give this answer only because I have already gained my skills in the existing system, and the process of gaining them included doing a lot of work that I hated. Instead, if the utopian society would start when I was 10 years old, even if I would decide to spend my life programming, I would be focusing on funny parts and ignoring the frustrating parts, so I would probably lack many skills that I have now.

tl;dr -- sometimes the work itself is "fun", but getting all the necessary education and skills is "not fun", which could be a problem in long run even if it would work in short run

Also there is the problem of checking quality. You could have people who want to do surgeries for fun, but you wouldn't want them anywhere near you. There could be many professions where you could get volunteers for the wrong reasons.

comment by knb · 2015-05-07T06:13:34.248Z · score: 0 (0 votes) · LW · GW

Some work requires a lot of education -- programming, or surgery. The work itself perhaps is not so bad, and someone would volunteer to do it for free... but first they would have to spend years or decades just getting the necessary education and skills.

Sure, but a lot of work is just not fun at all, and practically no one is intrinsically motivated to do it. No one is going to become a plumber or garbageman for kicks; some kind of instrumental motivation is needed. I've noticed a lot of people on the political left are really hostile to the idea that some people have to do unpleasant work--and isn't just the fault of some arbitrarily cruel capitalist.

As I mentioned above, Corey Doctorow tried to solve this problem with "Whuffie," but I think Whuffie is fundamentally flawed, and would not provide a well-functioning incentive structure.

comment by Viliam · 2015-05-07T07:25:38.525Z · score: 2 (2 votes) · LW · GW

I've noticed a lot of people on the political left are really hostile to the idea that some people have to do unpleasant work--and isn't just the fault of some arbitrarily cruel capitalist.

This is probably a rude thing to say, but I suspect that these people are spoiled children from middle- and upper-class families, so they never had to do the unpleasant work.

comment by RichardKennaway · 2015-05-07T07:30:17.801Z · score: 1 (1 votes) · LW · GW

As I mentioned above, Corey Doctorow tried to solve this problem with "Whuffie," but I think Whuffie is fundamentally flawed, and would not provide a well-functioning incentive structure.

Whuffie is love, and love does not scale.

comment by ChristianKl · 2015-05-04T16:01:52.974Z · score: 0 (2 votes) · LW · GW

But I could give this answer only because I have already gained my skills in the existing system, and the process of gaining them included doing a lot of work that I hated.

While that might be true in your case, I think there are a bunch of self learned hackers who didn't learn their skills in the formal way.

comment by OrphanWilde · 2015-05-07T12:29:32.217Z · score: 2 (2 votes) · LW · GW

Capitalism is less truly an economic system and more truly an economic modeling language.

Natural fisheries versus farming provides an excellent illustration of this; if you followed the sames rules for "unregulated" natural fisheries (that is, anybody may catch any number of fish) in farming, whoever picked a vegetable would own it, and farming couldn't exist as it does today. But replace the fishery rules with the farming rules, and whether or not it is "capitalism" is determined wholly by the framing; if you charge for a limited number of "licenses" to people to take a certain number of fish, and you're "regulating", an "anti-capitalist" act, whereas if you sell "shares" in the natural fishery, again charging people to take a certain number of fish, and you're engaging in capitalism.

Likewise, "tax" people for property they "own", and you're being capitalistic. "Lease" people property the government "owns", and you're being anti-capitalistic.

Capitalism is just a way of framing the rules in terms of private ownership.

To demonstrate:

I propose a new system of non-transferable shares of our national resources owned by all members of the public through a national resource trust corporation; conversion of these resources, because of the opportunity cost involved, will involve paying a portion of the value of said resources into a national resource trust corporation. The national resource trust corporation will also oversee and enforce intellectual property rights for a percentage of the value of said intellectual property, to pay for enforcement and to compensate for the opportunity cost imposed. Dividends on the proceeds will be paid out to all shareholders.

What did I just propose? A "capitalistic" welfare system.

comment by Jiro · 2015-05-07T14:48:53.236Z · score: 0 (2 votes) · LW · GW

Likewise, "tax" people for property they "own", and you're being capitalistic. "Lease" people property the government "owns", and you're being anti-capitalistic.

One could equally well say "letting people own property is capitalistic. Taxing them for property is less capitalistic precisely because it is equivalent to the government really owning the property and leasing it".

In other words, you haven't shown that the same situation is or isn't capitalistic depending on the framing. Rather, you've shown that both framings are equally capitalistic, but they just have different starting points. In one situation, you start out with capitalism (owning property) and make it less capitalistic (taxing the property). In another, you start out with a socialist situation (government owns the property) and make it more capitalistic (people can lease it and get some rights over it).. Either way you end up in the same place.

comment by Lumifer · 2015-05-07T14:59:25.006Z · score: 0 (2 votes) · LW · GW

Either way you end up in the same place.

In practice, you don't end up in the same place.

"I own this property and pay $1,000 in taxes to the government" is a very different situation from "The government leases me this property for $1,000".

"Property" is a large bundle of rights that does not boil down to cash flows.

comment by Jiro · 2015-05-07T16:06:56.606Z · score: 1 (1 votes) · LW · GW

You end up in the same place in this hypothetical. OrphanWilde postulated a situation where the same situation could be described as taxing people on property they own or the government leasing property. If these are in fact two different framings of the same situation, it follows that in this hypothetical, the government has an unusual kind of lease that does grant the kind of rights you are referring to, even though a normal lease would not do so.

Of course I may be steelmanning too much and he may have just not noticed that his hypothetical requires a very atypical kind of lease.

comment by OrphanWilde · 2015-05-07T18:20:12.327Z · score: 0 (0 votes) · LW · GW

Mexican land trusts are a good example of a "lease" arrangement that behaves identically to ownership as we typically regard it.

comment by Lumifer · 2015-05-07T16:09:32.486Z · score: -1 (1 votes) · LW · GW

the same situation could be described as taxing people on property they own or the government leasing property

I think that would require considerable violence to the words "own" and "lease".

comment by OrphanWilde · 2015-05-07T15:50:33.011Z · score: -1 (1 votes) · LW · GW

Why is taxing property less capitalistic?

The only reason you can or cannot own land in the first place is that government has asserted that land is something that you can own, and will protect your claim of ownership by force. Government enables that ownership in the first place - just as it -doesn't- enable ownership of the ocean, and does enable ownership of physical processes but not mathematical processes. Setting terms on the manner in which ownership is handled isn't more or less capitalistic; the difference, rather, is between good rules, and bad rules. Ownership of land has proven, on the whole, a very productive arrangement; it's a good rule. That's not the same as "capitalistic."

comment by Salemicus · 2015-05-07T16:53:42.943Z · score: 2 (2 votes) · LW · GW

The only reason you can or cannot own land in the first place is that government has asserted that land is something that you can own, and will protect your claim of ownership by force. Government enables that ownership in the first place - just as it -doesn't- enable ownership of the ocean, and does enable ownership of physical processes but not mathematical processes. Setting terms on the manner in which ownership is handled isn't more or less capitalistic; the difference, rather, is between good rules, and bad rules. Ownership of land has proven, on the whole, a very productive arrangement; it's a good rule. That's not the same as "capitalistic."

This kind of claim is very popular on the left, and it always puzzles me, because it's so obviously false on so many levels.

Firstly, land ownership long predates any government. In fact, it even seems to predate humans! It would be more historically true to say that land ownership created government than that government created land ownership.

Secondly, just because the government recognises your property right in something, doesn't mean you own it in any meaningful way. You seem to picture an omnipotent government that could even enable ownership of the ocean, but if it tried it would find itself much more like Canute. Unless you can enforce ownership, it's meaningless. People simply don't pay royalties every time they sing Happy Birthday, regardless of its copyright status. And so on.

Thirdly, just because the government doesn't recognise your property right in something, it doesn't mean you don't own it. Does Tony Montana own the cocaine he imports? He buys it, he sells it, he stores it, he makes use of it how he wants, other people accept that it is "his," no-one else can get hold of it except by his agreement. That's ownership. The fact that the government doesn't recognise his legal title is irrelevant, he has other methods of enforcing his claim.

In summary, government recognition of title is neither necessary nor sufficient for ownership, nor is it the historic origin. I myself am the title-holder of a plot of land that I do not own in any meaningful sense, because the writs of the government that recognises my title do not run in that area. Instead, there are other people who are currently enjoying all the property rights of that land, using it, earning money from it, excluding others from it, maybe even transferring their ownership. Perhaps I should go there and tell them that because the government doesn't recognise their claim, they can't do any of that stuff. Something tells me they might not find the argument persuasive.

comment by OrphanWilde · 2015-05-07T17:58:41.917Z · score: -1 (1 votes) · LW · GW

This kind of claim is very popular on the left, and it always puzzles me, because it's so obviously false on so many levels.

  • I'm a minarchist.

Firstly, land ownership long predates any government. In fact, it even seems to predate humans! It would be more historically true to say that land ownership created government than that government created land ownership.

  • You and I have different working definitions of the word "government" if you think "government" is something which was invented, rather than recognized.

Secondly, just because the government recognises your property right in something, doesn't mean you own it in any meaningful way. You seem to picture an omnipotent government that could even enable ownership of the ocean, but if it tried it would find itself much more like Canute. Unless you can enforce ownership, it's meaningless. People simply don't pay royalties every time they sing Happy Birthday, regardless of its copyright status. And so on.

  • You're arguing with what I "seem" to be rather than what I am.

Thirdly, just because the government doesn't recognise your property right in something, it doesn't mean you don't own it. Does Tony Montana own the cocaine he imports? He buys it, he sells it, he stores it, he makes use of it how he wants, other people accept that it is "his," no-one else can get hold of it except by his agreement. That's ownership. The fact that the government doesn't recognise his legal title is irrelevant, he has other methods of enforcing his claim.

  • The agents enforcing his claim are -also- governments. If he enforces his own claim, he is, de facto, a government.

[Edited: Quoting mistake]

In summary, government recognition of title is neither necessary nor sufficient for ownership, nor is it the historic origin. I myself am the title-holder of a plot of land that I do not own in any meaningful sense, because the writs of the government that recognises my title do not run in that area. Instead, there are other people who are currently enjoying all the property rights of that land, using it, earning money from it, excluding others from it, maybe even transferring their ownership. Perhaps I should go there and tell them that because the government doesn't recognise their claim, they can't do any of that stuff. Something tells me they might not find the argument persuasive.

  • I don't know if you noticed your own subtle shift from "the" government to "a" government when you wrote this sentence. If you didn't, pay attention. It matters.

At any rate, I think you are trying to fit what I am saying to a political agenda that doesn't match my own. I don't -have- a political agenda here. I'm asserting, as somebody who would be described as an extremist capitalist, that "capitalism" isn't an economic system. What people usually mean, when they say "capitalism", is either exactly the set of economic rules they think would work best, or exactly the set of economic rules they disagree with most.

comment by Salemicus · 2015-05-07T18:05:03.867Z · score: 1 (1 votes) · LW · GW

If you assert that any entity that enforces property rights is a government, then your claim is (1) circular and (2) a distortion of the term "government" beyond all recognition. Tony Montana certainly doesn't look like a government.

comment by OrphanWilde · 2015-05-07T18:12:58.797Z · score: 0 (2 votes) · LW · GW

Any entity which acts as the final enforcer for any set of rules at -all- is a government; your city can send police to arrest you, your county can do likewise, so they both qualify; your HOA has to sue you for breach of contract in a court run by a government who will enforce the decisions of that court by sending a policeman if necessary. Tony Montana isn't -a- government, but rather an agent of one; the Mafia.

comment by Salemicus · 2015-05-07T19:06:32.597Z · score: 0 (0 votes) · LW · GW

But Tony Montana isn't an agent of anyone, he works for himself. There is no final enforcer in that situation, it's an anarchy in that sense (which is why the drug trade is violent). But property still exists.

In fact, governments are much closer to anarchies than your "unlimited escalation" would allow. The reason I can't enforce property rights in my land isn't because of some rival government, but because of anarchy that the government can't suppress.

comment by OrphanWilde · 2015-05-07T19:26:11.075Z · score: 0 (0 votes) · LW · GW

But Tony Montana isn't an agent of anyone, he works for himself. There is no final enforcer in that situation, it's an anarchy in that sense (which is why the drug trade is violent). But property still exists.

  • Since I haven't seen the movie in question, I'm at a disadvantage to say properly whether Tony Montana qualifies as a government; he could readily be equivalent to a monarch, however, inwhichcase it could reasonably be asserted that he qualifies as a government in himself.

In fact, governments are much closer to anarchies than your "unlimited escalation" would allow. The reason I can't enforce property rights in my land isn't because of some rival government, but because of anarchy that the government can't suppress.

  • In what meaningful sense, then, is the government the government of that land? They're unable to govern. If it were a rival government, we'd call it civil war, and we'd say the rival government is the effective government of that land. It's possible - I'm unaware of the exact circumstances - that nobody is governing that land.
comment by Salemicus · 2015-05-07T19:32:46.456Z · score: 0 (0 votes) · LW · GW

It's possible - I'm unaware of the exact circumstances - that nobody is governing that land.

Finally, you concede the possibility! Yet property still exists there. So how's property merely a creation of government again?

comment by OrphanWilde · 2015-05-07T19:37:49.478Z · score: -1 (1 votes) · LW · GW

The property of whom? You? Begging your pardon for insensitivity, but in what meaningful sense do you own it?

ETA:

Does it belong to someone else? In what sense do -they- own it? They get use of it? Do I own the sky because I can enjoy its hue? Or do they, or representatives on their behalf, actively prevent anybody else from taking use of it? If that's the case, in what sense are they, or those representing their interests, not a government?

comment by Salemicus · 2015-05-07T20:26:00.100Z · score: 1 (1 votes) · LW · GW

I own it in the sense that I acquired the land lawfully, I have the title deeds, my name is on the land registry in the capital, I used to "properly" own it until the anarchy, and if the government makes its writ run again, I'll own it again "properly." It's all quite awkward because I wanted to sell the land before this happened, but obviously now no-one is keen to buy.

But now there are other people squatting on the land. They didn't chase off the government, they just took advantage of the chaos. They get the use of it (they are farming it). They do prevent other people from making use of it, yes (otherwise farming would be pointless). But they're certainly not the government, they're just some squatters. If all their neighbours (also mostly squatters!) showed up arrayed against them, they wouldn't be able to hold onto the land. They aren't capable of "infinite escalation." But human society doesn't work like that (mostly). And I'm certainly not going to put together some group of mercenaries to expel them. So those guys now effectively own the land, and they could probably sell it to some other group of squatters living in that anarchy. As long as the central government doesn't reclaim the area, or some rival government emerges, effective property ownership in that area is going to be governed by the tacit norms and mutual understandings among those people. Which sucks for me (although it's not like the land is worth a huge amount) but does appear to have been the norm for most of human history.

comment by OrphanWilde · 2015-05-07T20:50:38.729Z · score: -1 (1 votes) · LW · GW

I take no disagreement with anything you've said - "infinite escalation" is strictly theoretical, as there's an upper bound on resources. So do we have any disagreement at this point?

comment by Salemicus · 2015-05-07T20:58:48.814Z · score: 1 (1 votes) · LW · GW

You seem to be saying that property, at least in land, derives from government. I'm saying no, not necessarily, and I have given you a concrete example. And frankly I think that most property derives from private, tacit, anarchic methods of enforcement, and that government, while sometimes a helpful agent, isn't the prime mover.

comment by [deleted] · 2015-05-20T14:24:38.646Z · score: 0 (0 votes) · LW · GW

I don't understand your example. My view of property is force based, you own a land either because you can protect it by force or because someone who can i.e. the government allows you.

Thankfully force is not the only arbiter of human relationships. However its opposite, compassion or altruism does not seem to play much of a role in the idea of property. A third option is trade, cooperation for mutual gain, non-altruistic, and force plays a role in rare cases in punishing defectors but usually people don't defect largely because they want to continue a beneficial trade and not because of that kind of fear.

Is your point that property can be trade-like? That it exists not only because either you or the government has enough guns to chase away trespassers, but also because a tit-for-tat trade-like "I won't touch stuff you call yours if you promise the same" social agreement is seen as mutually beneficial, even without much of an enforcement?

comment by Salemicus · 2015-05-20T15:16:19.011Z · score: 1 (1 votes) · LW · GW

Is your point that property can be trade-like? That it exists not only because either you or the government has enough guns to chase away trespassers, but also because a tit-for-tat trade-like "I won't touch stuff you call yours if you promise the same" social agreement is seen as mutually beneficial, even without much of an enforcement?

Kinda. I would de-emphasise the "mutually beneficial" and "promise" bits and emphasise the notion of self-reinforcing equilibrium. After all, you do have to defend your property, because theft does exist, but you don't have to defend it very much, at least in normal times, because Hobbes was wrong; we do not have a constant 'Will to contend by Battle.' Similarly, international relations are fundamentally anarchical, so most countries judge that they need armies, but that doesn't mean that they are constantly on a war footing, nor that "there is no place for industry, .. culture of the earth," etc.

comment by [deleted] · 2015-05-20T15:31:44.328Z · score: 1 (1 votes) · LW · GW

Similarly, international relations are fundamentally anarchical

I would argue with that. There is policeman: the yanks. Pax Americana, used to be Pax Britannica pre-1914 or so, which was a similar policing role, just more polite perhaps. There is also a quasi-democratic state-like thingy, the UN. It was anarchic before. Roughly before the "Anglosphere" became dominant. 18th century, for example. But today? Putin thought it is anarchic then found not being allowed to trade with about 80% of the GDP of the planet is not such a good deal.

Wasn't like the whole point of having the UN is to stop it from being anarchic?

comment by Jiro · 2015-05-20T15:32:10.923Z · score: 0 (0 votes) · LW · GW

My view of property is force based, you own a land either because you can protect it by force or because someone who can i.e. the government allows you.

How does that not apply to things other than land? You have your life because either you can protect it by force or because the government does so.

comment by [deleted] · 2015-05-20T15:39:10.538Z · score: 0 (0 votes) · LW · GW

No, not only because of that. There is also a trade-like aspect. A mutual social agreement that if nobody tries to kill the other, and thus we do not have to waste our resources on maintaining an ability to protect it by force, then everybody benefits from it.

My point is that you sound like to me it is only the direct deterrent, the immediate cost of the attack matters, my point would be here more like the consideration "if I attack someone, I erode the rule, the social agreement against attacking, and make it likelier that others attack me". And because it could be a tragedy of commons, one level higher there is the social precommitment to punish the attack because everybody is better off if such rules are enforced. It requires ability to punish, sure, which is force, but not a very impressive one, a mob with pitchforks will do in a pinch.

comment by Jiro · 2015-05-20T16:00:58.404Z · score: 0 (0 votes) · LW · GW

How does that not apply to almost everything? We have a mutual agreement not to take each other's land.

(If your answer is that everyone has life and not everyone has land, then use another example that not everyone has, such as money, or legs. How does your characterization of land not apply to those? You only have money, or your legs because either you can protect them or because the government does.)

comment by [deleted] · 2015-05-20T16:30:15.257Z · score: 0 (0 votes) · LW · GW

My point is that it does apply.

comment by Jiro · 2015-05-20T16:47:21.675Z · score: 0 (0 votes) · LW · GW

That would mean that your statements about owning land also apply to owning your legs.

comment by [deleted] · 2015-05-21T07:26:00.858Z · score: 0 (0 votes) · LW · GW

Yes, that is the point!

comment by OrphanWilde · 2015-05-08T13:25:50.455Z · score: -1 (1 votes) · LW · GW

You've given me a concrete example of how, as soon as government stopped enforcing your property, it stopped being your property. What exactly did private, tacit, anarchic methods of enforcement avail you?

comment by Salemicus · 2015-05-08T13:35:03.052Z · score: 1 (1 votes) · LW · GW

It stopped being my property, but it didn't stop being anyone's property. There's nothing to say that private, tacit, anarchic methods of enforcement will give the same result as government enforcement.

comment by Lumifer · 2015-05-07T18:18:23.378Z · score: -1 (1 votes) · LW · GW

Any entity which acts as the final enforcer for any set of rules at -all- is a government;

So in a traditional (patriarchal) household, each husband is a government, right? And all parents, too?

comment by OrphanWilde · 2015-05-07T18:28:21.714Z · score: 1 (1 votes) · LW · GW

No, because few husbands or parents are willing or able to act as final enforcers.

Final enforcement requires unlimited escalation. No matter how you escalate the situation, a final enforcer will escalate back.

comment by Lumifer · 2015-05-07T18:52:35.046Z · score: 0 (2 votes) · LW · GW

Is this equivalent to saying that a government is any entity which has the will and the ability to kill you if it deems necessary?

And I think that parents of small children are final enforcers. No one sues their five-year-old for throwing a tantrum.

comment by OrphanWilde · 2015-05-07T19:21:26.212Z · score: 1 (1 votes) · LW · GW

Is this equivalent to saying that a government is any entity which has the will and the ability to kill you if it deems necessary?

  • "If necessary to enforce rules" might be a slightly better modification; somebody who kills you because it's more convenient than not killing you isn't necessarily trying to govern your behavior, after all.

And I think that parents of small children are final enforcers. No one sues their five-year-old for throwing a tantrum.

  • They're unwilling or unable to escalate.
comment by Jiro · 2015-05-07T15:59:30.819Z · score: 0 (2 votes) · LW · GW

By that reasoning, making people slaves isn't less capitalistic, either. The only reason you can or can't control your own life is that the government has asserted that you do or don't, and will protect either you or the slaveowner's claim by force.

Also, by that reasoning, you cannot ever assert that the government is violating someone's rights, since rights do not exist independently of whether the government sets the terms.

comment by OrphanWilde · 2015-05-07T18:05:17.651Z · score: 0 (0 votes) · LW · GW

By that reasoning, making people slaves isn't less capitalistic, either. The only reason you can or can't control your own life is that the government has asserted that you do or don't, and will protect either you or the slaveowner's claim by force.

  • No, your reasoning requires treating capitalism as a system rather than a model, which my opening comment explicitly rejects. Something isn't "more" or "less" capitalistic.

Also, by that reasoning, you cannot ever assert that the government is violating someone's rights, since rights do not exist independently of whether the government sets the terms.

  • And here you're extending the argument into an entirely different domain in which I have thus far made no claims whatsoever. In order for my claim to extend in this manner, two things would have to be true: First, there would have to be a good natural rights argument for land ownership. (There isn't, although there -are- very good natural rights arguments for ownership of other things, including farms and buildings sitting on that land - an important distinction.) Second, I'd have to have rejected natural rights, which I haven't done.
comment by Jiro · 2015-05-07T18:43:24.778Z · score: -1 (1 votes) · LW · GW

No, your reasoning requires treating capitalism as a system rather than a model, which my opening comment explicitly rejects. Something isn't "more" or "less" capitalistic.

If you can't compare how capitalistic two situations are, you can't claim that they are equally capitalistic either, which you are implicitly doing.

And here you're extending the argument into an entirely different domain in which I have thus far made no claims whatsoever.

Being able to justify your argument also implies being able to justify the things that it implies. This is true whether you claim those things or not.

In this case, you've said that you can characterize ownership of land as being enabled by the government on the grounds that you need government force to keep owning it. This argument extends both to other kinds of ownership (including farms and buildings) and other kinds of rights. It is equally true that you rely on government force to keep owning a building, and it is equally true that you rely on government force in order to prevent someone from killing you.

comment by OrphanWilde · 2015-05-07T19:19:02.033Z · score: 0 (0 votes) · LW · GW

If you can't compare how capitalistic two situations are, you can't claim that they are equally capitalistic either, which you are implicitly doing.

  • No, I'm saying "domain error".

Being able to justify your argument also implies being able to justify the things that it implies. This is true whether you claim those things or not.

  • Again: "Domain error". More explicitly, this time.

In this case, you've said that you can characterize ownership of land as being enabled by the government on the grounds that you need government force to keep owning it. This argument extends both to other kinds of ownership (including farms and buildings) and other kinds of rights. It is equally true that you rely on government force to keep owning a building, and it is equally true that you rely on government force in order to prevent someone from killing you.

  • Ownership of land is an exclusive right of conversion, whereas ownership of farms and buildings is an exclusive right of the -product- of conversion. Your argument about preventing people from killing you is yet another attempt to shift domains; domain error, again.
comment by Jiro · 2015-05-07T23:08:00.279Z · score: -1 (1 votes) · LW · GW

Ownership of land is an exclusive right of conversion, whereas ownership of farms and buildings is an exclusive right of the -product- of conversion. Your argument about preventing people from killing you is yet another attempt to shift domains; domain error, again.

You're shifting arguments. Your argument wasn't "conversion", it was that the government will protect your claim by force. Protecting your claim by force is something that applies to land, buildings, and the right not to be murdered. Of course, if you bring up a new argument, anything I say about your old argument may not necessarily apply.

comment by OrphanWilde · 2015-05-08T13:24:27.277Z · score: 0 (0 votes) · LW · GW

Actually, you shifted arguments, and I permitted it in that case, but nice attempt to try to berate me for what you've been doing all along. But at any rate, at this point I must conclude discussions with you can't be productive, because as soon as you realized I wouldn't permit you to change the subject and pretend we were having the same discussion, you instead resorted to petty debate tactics. Good day.

comment by Jiro · 2015-05-08T14:58:05.276Z · score: 0 (0 votes) · LW · GW

The only reason you can or cannot own land in the first place is that government has asserted that land is something that you can own, and will protect your claim of ownership by force.

I didn't change the subject. It's right up there.

comment by Lumifer · 2015-05-07T14:45:35.075Z · score: 0 (0 votes) · LW · GW

Capitalism is just a way of framing the rules in terms of private ownership.

Yes, but framing matters. Rules formulated in terms of private ownership will be different and have different consequences than rules formulated in terms of government licenses.

comment by VoiceOfRa · 2015-05-08T02:15:24.704Z · score: -1 (1 votes) · LW · GW

if you charge for a limited number of "licenses" to people to take a certain number of fish, and you're "regulating", an "anti-capitalist" act, whereas if you sell "shares" in the natural fishery, again charging people to take a certain number of fish, and you're engaging in capitalism.

There is an important difference between the two systems. In the capitalistic system the way the fishery is managed is determined by the shareholders, whereas in the anti-capitalistic system it's determined by the government, i.e., ultimately everyone who votes for it whether they have any direct interest and/or connection to the fishery or not.

comment by OrphanWilde · 2015-05-08T13:10:04.517Z · score: 0 (0 votes) · LW · GW

You're assuming they're voting shares.

comment by VoiceOfRa · 2015-05-09T02:13:12.333Z · score: 0 (2 votes) · LW · GW

Well, yes that is the obvious inference from the capitalistic description you gave.

If they're non-voting then who has voting control over the fishery management? If the answer is simply "the government", I don't see what's to "capitalistic" about your capitalistic system.

comment by RichardKennaway · 2015-05-08T13:36:37.640Z · score: 0 (0 votes) · LW · GW

You're assuming they're voting shares.

I believe that VoiceOfRa is referring to the vote that (presumably) put the government in power that nationalised the fisheries, and is selling what it calls "shares" in them. If these are non-voting shares, as you imply, then the management and ownership of the fisheries remains in the government's hands. What you have described is a nationalised industry. The "shareholders" do not have a share in ownership, only a licence to fish, whatever is written on the piece of paper they received.

What did I just propose? A "capitalistic" welfare system.

I'm not clear about the details (what is meant by "conversion of these resources"? -- the phrase sounds like specialised jargon) but this looks like nationalisation of the means of production, a standard socialist policy. This is not to say that it cannot work (although the record of nationalised industries mostly does say that) but it does not resemble anything normally called "capitalism".

comment by OrphanWilde · 2015-05-08T14:17:18.080Z · score: 0 (0 votes) · LW · GW

I believe that VoiceOfRa is referring to the vote that (presumably) put the government in power that nationalised the fisheries, and is selling what it calls "shares" in them. If these are non-voting shares, as you imply, then the management and ownership of the fisheries remains in the government's hands. What you have described is a nationalised industry. The "shareholders" do not have a share in ownership, only a licence to fish, whatever is written on the piece of paper they received.

  • The share is not in the fishing -industry-, but in the stock of fish.

I'm not clear about the details (what is meant by "conversion of these resources"? -- the phrase sounds like specialised jargon) but this looks like nationalisation of the means of production, a standard socialist policy. This is not to say that it cannot work (although the record of nationalised industries mostly does say that) but it does not resemble anything normally called "capitalism".

  • Conversion is a specialized term referring to the process of changing goods from one form to another, usually from an unprocessed natural state to a processed or final consumption-ready state; in this case, it could mean taking coal from the ground and burning it to produce electricity.

And no, I wouldn't advocate nationalizing the means of production. Actually, what I proposed was, in its entirety, taxing people on land (not buildings or improvements, but land only) and intellectual property.

comment by Lumifer · 2015-05-04T00:56:24.780Z · score: 2 (4 votes) · LW · GW

when you can get your goods, energy and communications for basically free, doesn't that undermine the whole capitalist system?

Ask me that when I actually would be able to get my goods, energy, and communications for basically free.

I'm not holding my breath.

By the way, the traditional name for this sort of arrangement is "communism".

comment by [deleted] · 2015-05-03T20:19:12.350Z · score: 2 (2 votes) · LW · GW

There will always be ways to lower the marginal cost of a product. Even if this cost is measured in atoms, people will be looking for ways to reduce that cost.

There will also be art for a very long time. When everyone has a practically infinite supply of goods at their disposal, they will still want to create things for status, and this will be instantly transferable around the world. The internet increased the supply of art even as it reduced the marginal cost while leaving fixed costs mostly untouched.

There will be limits to transportation. Right now, that theoretical limit is the speed of light. People may compete for the right to travel to a far off world or to reach new worlds faster.

comment by Slider · 2015-05-04T20:32:40.866Z · score: 1 (1 votes) · LW · GW

The situation isn't so that we first had a theory of capitalism and then went to implement it. Instead we started doing stuff and found that it had ideological baggage. Capitalism is the only option because it's the only fleshed out option because we suck at (rigousrously) imagining alternative economic possibilities.

I have found the theorethical foundations to be pretty weak (as far as theorethical sense of elegancy goes) but here the proof is in the pudding. The theorethical constucts links to real world behaviours are a lot more stronger than the internal logic.

I have in my mind toyed with some alternative ideas but I am hesitant to actually talk about them. The act of publicly imagining on the possibility that gods are not real is really close to open revolt against theocrasy. Also history points out how dangerous halfthought alternatives are. A lot of the communist states did not do anything concrete that would be communist economy. Instead "for the people" became an excuse to have centralised elitist solutions. Therefore I think it's not enough to take steps into a new direction but actually able to run something different.

There are base level contradictions that are really unconfortable to have but most people somehow incorporate them into their thinking. If trade is exchange of like-for-like how can you make money off trading? If trading isn't like-for-like what are the conditions for it being acceptable? If you buy a luxury item at a high price or you buy the same luxury item at a lower price in which case are you more wealthy? If you buy the high price item your nominal value is more and you are richer. If you have a company that produces its services for a low price or high price which leaves the society more empowered? The high priced one has more room to propagate it's methods of production. However the lower priced one leaves its customers more richer. On one hand competition and driving prices down is looked as good effecf yet we speak highly of companies that make a big bottom line. That is competition is a mechanic of profit prevention in that the most modest profit claim wins. On one hand a customer buying for a higher price than neccesary is seen as stupid but the one that enables the biggest group of morons is seen as the smartest. Greating the latest frivoulous need makes you the "forward moving force of the economy" but people not affording healthcare defines healthcare not to be in the interest of the public.

comment by VoiceOfRa · 2015-05-05T01:52:43.491Z · score: 4 (4 votes) · LW · GW

If trade is exchange of like-for-like how can you make money off trading? If trading isn't like-for-like what are the conditions for it being acceptable?

The problem is that "like" isn't a well-defined concept the way you use it. Trade works because the value of goods is a two place function, i.e., if Alice gives Bob a coffee for $2, that's because Bob values the coffee more than he values the $2, while Alice values it less.

comment by Slider · 2015-05-05T03:03:27.634Z · score: 0 (0 votes) · LW · GW

Well then trade is not exchange of equals, which I guess is a decent position. But then it's hard to make that two placed "values" to play nice with value when the owner is not spesified. That is if Bob values it at $2 because he knows that Charlie values it at $3 so he can sell it to Charlie to gain $1 why is it okay for Bob to end up with that $1 instead of Alice selling it directly to Charlie so that Alice ends up with the $1? I could kinda understand if a goods "one place value" would be the value that the person that would give up most to have it would exchange it for. The situation is even more bizarre if Bob would prefer to have the $2 instead of the coffee if Charlie didn't exist.

The only way it makes sense if Alice is unable to trade with Charlie. But this is counter to assuming that trade is free. Bob has motive to keep Alice from trading with Charlie. Bob also gains without giving. If Alice buys apples for $3 and Charlie sells them for $2 I get that Alice and Charlie get to switch to a higher desirability product but Bob scores a apple or a coffee without giving up anything. If Alice and Charlie work to produce their respective cheap products Bob enjoys the fruits of labour without having to work. Economic productivity would actually be increased if Bob didn't exist.

An interpretation, trade might be win-win for the pairwise participants but it makes everybody else lose in the same go. Bob ends up overall winner because he participates in all the trade while Alice and Charlie acts as outsiders 1 time and insiders 1 time. It can also be argued that it hurts outsiders more than it helsp the insiders. Otherwise Alice should break even.

comment by [deleted] · 2015-05-05T08:08:49.027Z · score: 2 (2 votes) · LW · GW

Well then trade is not exchange of equals

This statement doesn't even make sense. Trade occurs because people have different utility functions over property. If I'm a coffee house with lots of coffee, my marginal utility of one more cup of coffee is less than $2. If you're a thirsty consumer with lots of money and no coffee, then the marginal value of a cup of coffee is greater than $2. Trade occurs because you value the cup of coffee more than your $2, and I value your $2 more than that one cup of coffee. Your valuation of the coffee equals or exceeds my valuation of the coffee.

The rest of your example is basically about information flow and market inefficiencies, and seems rather tangential.

comment by Slider · 2015-05-05T09:59:49.120Z · score: -1 (1 votes) · LW · GW

If there were even more thirstier money holder I would not get the cup at $2. The coffee shops valuation of the coffee is entirely dependent on the sell value of the good and not because the owner wants to drink the coffee.

The tangent is about how only inefficient economies have traders (people that make money by not creating property but receiving and releasing property). If the coffee house employs workers or buys coffee beans there is an element of functioning as a trader. That is the coffee house asks more from the customer than it thinks the components of the coffee are worth.

There is additionally the issue that the exchangers don't need to benefit in similar scales. The coffee can be near parity for the thirsty customer while the trade value for the coffee house can be substantial. Because the coffee house and the customer partly use money to buy goods from shared pools of products by buying the customer hurts his buying power.

comment by RichardKennaway · 2015-05-05T12:45:16.011Z · score: 2 (2 votes) · LW · GW

only inefficient economies have traders

Only if you consider the absence of costless, automatic, instant teleportation of goods from where they are made to where they are wanted an inefficiency. If that is inefficiency, there is no such thing as an efficient economy.

You might as well go further and consider the absence of instant creation of goods from thin air an inefficiency. Indeed, is there anything one spends effort on, that the existence of that effort could not be judged an inefficiency?

That is the coffee house asks more from the customer than it thinks the components of the coffee are worth.

There is no such thing as what the components of the coffee "are worth". The growers grow coffee, the distributors transport it, the baristas turn it into cups of coffee, and the owner of the coffee house provides the premises and equipment. The customer pays all of them for providing a cup of coffee at the place and time he wants it. The "intrinsic worth" of coffee plays no part in any of this.

comment by Slider · 2015-05-05T15:49:49.567Z · score: -3 (3 votes) · LW · GW

I don't need to refer to intrinsic worth but the amount they are giving up in order to aquire the components of the coffee. Employees are paid salaries and coffee beans are bought.

There are markets where those assumtions are quite valid such as stock markets. I see I have hit some kind of nerve and seem to be playing a connotation bingo. If Bob were hired as a trucker that would be fine but the "economic niche" can be disproportionally large compared to any real input a trader gives. It gets especiallly blatant when a trader buys and sells the exact same good to generate a money advantage from its price fluctations. It smells more like abuse of the abstractions deployed to handle the economy than them being used to actually contribute to solve a real problem.

comment by Zubon · 2015-05-06T14:29:05.741Z · score: 3 (3 votes) · LW · GW

As said above, no economies are perfectly efficient, and traders make their money improving that efficiency. This is not a new revelation: we have over a millennium of history of people hating traders, moneylenders, etc. for "getting rich doing nothing" while they provide valuable efficiency improvements.

It gets especiallly blatant when a trader buys and sells the exact same good to generate a money advantage from its price fluctations.

Price fluctuations indicate real problems to be solved. That is what traders and middlemen do: resolve those problems. Prices fluctuate because the need for things varies over time and space and between individuals. "Buy low, sell high" means "buy something when there is so much that people want to get rid of it and sell when there is so little that people want more." The profit in between is (1) recognizing that difference over time and (2) being willing to buy something you don't want, hold it when you could be using that money for something else, and then sell it to people who want it more. If there were not value in that, you would just hold your surplus until you needed it. You can capture all the benefits that traders provide by just never trading (note: this is a bad idea).

The same applies with trading goods over space (excess in one area, dearth in another) or between individuals (finding the people who want to buy what you want to sell). The economy is not perfectly efficient, so the trader makes money by smoothing those inefficiencies and incurring the transaction costs of moving things across time and space, along with the risk of ''being wrong'' and losing the investment.

comment by Slider · 2015-05-06T14:46:12.309Z · score: 0 (0 votes) · LW · GW

I would like to understand what is the efficency they provide, if they in fact do. I guess it is that Bob effectively makes Charlie appear in Alices world. Hopefully one would go from isolated individuals to individuals connected via traders to individuals connected directly to each other. Still it is in the traders interest to not tip off the existence of Charlie to Alice.

I do have a qualm about there being no upper limit how valuable this "organization" work is.

comment by Zubon · 2015-05-06T15:09:38.743Z · score: 3 (3 votes) · LW · GW

I'm presuming you do not sell things, much or often? Because finding buyers is a big transaction cost, especially if you are mass producing something. The expertise needed to make 1000kg of soap is not the same expertise needed to find 1000 people who each need 1kg of soap and sell it to them.

Can I presume you do buy things? A grocery store is one of those traders. Alice produces bananas, you are Charlie, and Bob the grocer buys bananas from Alice and sells them to you. But wait, that is Alice1. Alice2 grows peaches, Alice3 grows wheat, Alice4 grows... It would be very inefficient for you to visit every Alice to do your grocery shopping, especially when they are spread around the country and the world, and you can imagine the cramp it would put in Alice's production to try to be available to sell to you whenever you needed in whatever quantity you needed. That is what Bob does: he talks to all of those Alices, brings all of those products together, and makes them available to you in arbitrary quantities and convenient hours. Bob is a trader.

Individuals connected directly to each other is nice for some things but misses out on a lot, such as economies of scale. Alice specializes in producing things, and Bob specializes in collecting things from producers and getting them to consumers. This is like how the water company brings water to your house; you are partly paying for the water, but mostly you are paying for the availability of water. If you want to get rid of the water trader, get a bucket and go to the stream.

comment by [deleted] · 2015-05-08T10:31:10.047Z · score: 0 (0 votes) · LW · GW

The situation isn't so that we first had a theory of capitalism and then went to implement it.

No, partially it was actually done that way. https://en.wikipedia.org/wiki/The_Great_Transformation_(book)

Polanyi argues that many traditional, NON-ideological, but more like evolved local custom types of restrictions (i.e. Burkean conservative restrictions) on the operation of the free market were removed by government action to pave the way for the market, in an ideological hope that it will enrich society (it did, but anyway).

(Take it with a grain of salt, though, Polanyi had strong socialist sentiments, even marrying in the communist movement. Not to be confused with his bro, Michael Polanyi, who generally had libertarian leanings.)

comment by Algon · 2015-05-04T20:53:02.823Z · score: 0 (0 votes) · LW · GW

Well, I guess I sort of agree with the things you said, though I'm not sure how else I could express my feelings on your comment.

But I think that the Collaborative Commons does provide an alternate to capitalism in the form of a social economy rather than a market economy. And the rise of things like social entrepreneurship seem to back that up.

comment by Slider · 2015-05-05T00:55:00.976Z · score: 0 (0 votes) · LW · GW

Digging up a little deeper on the issue I think I have already figured out a lot of the details that the Collaborative Commons direction seems to be heading into.

I have been trying to label my thinking as "contributionism".

Traditionally you have, fixed costs + unit costs = costs paid by consumers + leftovers claimable by the corporation (= profit). Usually the fixed costs are what they are and the amount that is produced is varied. Additionally we offer the product at some price. This gives it the form of, cost_f + Xcost_u=c_cost_uX+profit. Homo economicus selects the product with cheapest price so there is pressure to set c_cost_u as low as possible but we want to have profit as high as possible. Dividing by X we get cost_f/X=c_cost_u+profit/X. If the company is really efficent they can set their profit slightly less of the 0 profit c_cost_u price of the next best competetitor (in reality they won't accept a 0 profit but then you use a figure of the lowest profit they accept instead of not bothering to make the product). Traditional analysis rather wants to see it in terms of marignal cost where you don't see the profit so much as ebing part of every product but instead you first make the product some amount to offset the fixed costs and then you are free to make addiotional units purely to make excess money. However this method is pretty tricky if you don't know how many units will be sold if the value of X is unknown. In practice you have to aim for a price / scale point. If you get the price low you eat into your money per itemt ath you won't make your invesment back. If you set it too high people either don't afford it or it gets outcompeted by cheaper products. So there is sweepspot range where the "price is right" that it accumulates more money than it loses to competition / being expensive. If you hit anywhere in there you get a profit and if you hit a better spot you get more money. However while you can make an educated guess it ends up being a guess neve the less. I am using suggestive phrasing that it need not be so.

We can do the optimatization differently. We know the fixed costs are going to be cost_f and we would like to make 1000 from the operation so profit=1000. cost_f + Xcost_u=c_cost_uX+profit -> X(cost_u)-X(c_cost_u)=profit-cost_f -> X*(cost_u-c_cost_u)=profit-cost_f -> cost_u-c_cost_u=(profit-cost_f)/X -> c_cost_u=((profit-cost_f)/X)-cost_u. Now we have only one unknown on the left and one unknown on the right. This is also the price point of making exactly the profit that we want. Instead of fixing the ask price we have fixed the profit. Now we start offering these and when new customers arrive we retroactively change the price of already sold products (It always goes down so they probably don't mind). Now we are perfectly competetive while getting the profit that we want regardless of volume. It's impossible for us to price wrong.

This kind of alternate scheme makes more sense for which cost_u is low. However there are plenty of areas where cost_u is effectively zero. Once a game has been programmed installing it on 1 billion computers has virtually 0 cost. Also once a songs has been composed downlaoding it to an addiotional ipod is practically free. I call this ability "copyability". They tend to be characterised as those with low cost_u but high cost_f but in general there is a degree into it. For example if you make chairs you still need additional wood so additional chairs is not free. but then you don't need to redesign the chair. If you make designer chair a bigger portion of your product is actually inthe design rather then in the raw materials. Also if you make 1 medicine pill it isn't completely free to make another but the essential effort was to get it tested as safe so the second costs about 1/100000000th what the first costed. In fact it doesn't really make sense to apply the concept of marginal cost here. You are never really limited by raw material cost when making medicines.

However this has all sort of edgy theorethical heterodoxy going for it. For example you no longer become a billionare if you make a product that has sell volume way more than you thought was economical for. Bug or feature? You have to say good buy to winning the marketing super lottery. But in exchange the legitimacy of hit products is better and the price representing the effort to get the thing done is better. You also have a big disperancy with ability to pay and actual amount paid. Even if you already paid 100$ for a product you migth end up getting 30$ later back. If we use the old rules of evaluation of everything being worth what the consumer is willing to pay for it you got 100$ of value for 70$ paid. Also hit products have lower price than those that barely make economic sense. Usually when you want good shoes you pay more to get more. However similar products one being selected as being the one worth using and getting it goes down in price making it a good rule of thumb of getting the cheapest applicaple product to get the best quality.

There is also the property that all customers pay the same price. No more getting stuff cheap from the sale bin. There is no price guessing so there is no arbitrary drops. Instead of being smacked with a first user "fine" of being a first adopter when your product "normalises" you actually have paid just as much as those that dollar bin buy their stuff. You just got your earlier by having the chance that it will stay a niche product forever (and never hits the masses). But if you were ok witht he price point of the product when you got it there isn't any gambling from your point going on. In fact we can precollect commitments on how many people would buy it from the dollar bins to jump straight to mass sales without going throught first adopter phase. That is what would have been a tragic overpricing can be can be salvaged to a working price point as people don't have an incentive to underreport what they woudl be willing to pay for a product. That is if you overreporting doesn't cost nearly as much where each cent that you overreport is a loss for you in the traditional haggling scheme. In fact we might first have a idea of thing that might be worth doign and then have the financial commitments from end users before production even begins. That is we have an alternative economical activity motivator framework. You can have a project setup and financed for the sake of having it done. For example how many "I will chip in 30$ to have man go to Mars" we need to get our rockets together? 50%6 billion30$ = 90 billion budjet. Will that get us there? Does it make economical sense? Notice how we can have commitment levels under and over 30$. Notice how we don't need to make anyone a multimillionare to get it organised. That is the budjet can compromise just many regular level people working on it with down to earth "just let me support myself" money demands. How we currently do speculation is that we let a enterprise take a loan and then either let it bankcrypt spectacularly or hit upon on a permit to print money. Notice how both of these options are a drain on society.

The thing is that the alternatives never really want to get spesific. Yeah it would be nice that those who do work would have the right to organise work how they see it would work best since those probably know best. But if you don't provide any microdetails on how it is supposed to work it becomes an empty slogan. That is a suit with deskjob holding and maanging the ownership is pretty far from the ideal but if we dont' have a concrete way fo imagining what to have in its stead it doesn't help to tear anything up and leave just a vacuum. If employers with no desk jobs would select among themselfs one that did start a desk job identical to the current suit would that be significant enough? That is the curretn system is good in that sense that there is clear appointed persons that are financially responcible. Althoguth we could argue that in a system where goverment goes on to cover up the losses when it comes time to live with the responcibility it creates a position of power without any accountability. But it kinda means that if we no longer have "big players" that assume enourmous repsonciblities in hoeps of getting ennourmeous greeds filled we need to have a method how we make the group of people that shoulder the responcibility larger. We could argue that in the current state the responcibility of the consumer is artifically limited. That is if you buy a product that is produced by firm that goes bankcrupt you have gained a product as if it made financial sense when it in fact didn't. That is when you are at the super market the products that will flop are pretty comparable in price to the products that won't. The process of eliminating the investor greed motive migth mean that the economical reality is more directly exposed to the customer. Curretnly we have set prices that have an element of false promise. You can buy a product as if it made financial sense even if it ends up not doing so. There migth be a need to have a speculative elemtn on the prices. Would it be okay if to have a little higher nominal prices on shelfs but then have the ones that make economical sense go down? Would it be okay that if you could not just arrive into a "set table" of having already produced products waiting on the shelf ready to buy you would actually have to keep money preattached to upkeep the selection? Could it be okay if you needed to select which kinds of products you will buy 3 months in advance instead of 1 day in advance? Would you rather pay 100$ now for sneakers or make the decision to attach 70$ to it now and know that it makes economical sense 3 weeks later (or know that it won't and rereceive that 70$)?

comment by Val · 2015-05-03T20:14:34.302Z · score: 1 (3 votes) · LW · GW

The biggest issue I see with unregulated capitalism is its poor handling of the tragedy of the commons. (in the shape of global resources)

comment by VoiceOfRa · 2015-05-04T00:14:25.920Z · score: 4 (6 votes) · LW · GW

Um, the capitalist solution is to privatize and fence the commons. This isn't always practical but I've yet to see another approach that works.

comment by [deleted] · 2015-05-04T12:31:59.588Z · score: 5 (5 votes) · LW · GW

When the commons are small enough, community pressure can work just as well. The issue is largely that of scaling. Communism works pretty well inside a nuclear family. Somewhat less well but sort of doable between roommates who are good friends. After careful selection of truly communal minded people, it can be stretched to the Dunbar number i.e. the kibbutz movement. Beyond that number, not at all.

I have this impression that succesful capitalisms often rely in microcommunisms on the nuclear family, extended family, close friends, or old-employees-who-are-almost-family-now level. When you have to transact for everything, things get tiresome and wasteful quickly. So it is useful to have small units of highly communal minded people work together and not transact but rather have on their micro level a to each according to needs, from each according to ability attitude (this is how a normal family works) because they know each other very well and know their needs and abilities, they cannot really be faked. And transacting being done between these small groups, not between individuals.

Ironically, also tragically, I think the problems of Eastern Europe partially come from Soviet type communism breaking down these natural microcommunisms, so now you see all these sad things like siblings fighting over inheritance instead of solving it amiably, or even tiny businesses operating on the boss gives orders to everybody level instead of the everybody notices what needs to be done and does it level (which would be natural for a family type small business where people are on good relations). This saps energy and effort away from focusing on transacting where it needs to be focused on i.e. between these groups.

comment by Algon · 2015-05-04T07:31:33.853Z · score: -2 (2 votes) · LW · GW

The commons itself works. Read the 'Comedy of the commons' which was written as an answer to Garret Hardin's 'tragedy of the commons'.

comment by [deleted] · 2015-05-04T12:35:54.490Z · score: 1 (1 votes) · LW · GW

Look, the fact that a given group of people can do X in a given situation is not a solution to other people doing Y in another situation. Just because you or I would not litter anyway, it does not mean no-littering signs are unnecessary nor that there is not a difficulty with enforcing them. It is different people, probably in different situations, circumstances, even with different litter.

This is a common problem IMHO and generally I think the best conceptual model is to think that the good part and bad parts of human nature don't cancel each other out, they exist side by side. So for example power-hunger or aggression and charitability are both being parts of human nature, but not canceling each other out, but operating side by side.

comment by Algon · 2015-05-04T13:21:42.828Z · score: 0 (0 votes) · LW · GW

I think this lecture and paper might better get across what I mean: http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2009/ostrom_lecture.pdf http://www.kuhlen.name/MATERIALIEN/eDok/governing_the_commons1.pdf That is, I am advocating a certain type of management rather than just hand waving it away and saying 'social guidelines will make it work',

comment by OrphanWilde · 2015-05-07T04:18:10.909Z · score: 0 (0 votes) · LW · GW

The issue is that the solution to tragedy of the commons situations always seems to be moving more things into "the commons".

comment by cousin_it · 2015-05-04T22:22:47.548Z · score: 0 (0 votes) · LW · GW

Yeah, that's one big problem.

Another big problem is that unregulated capitalism will happily let me become sick/homeless/dead, if the market price of my labor is lower than the minimum required to keep me healthy/housed/alive.

A couple days ago I was hanging out with some friends and we watched this new movie "Nightcrawler". It's about a "creepy" guy. The first scene of the movie is him begging for a job or even an unpaid internship, and being turned down. Then he turns to a "creepy" occupation to keep himself alive, and the general tone of the movie is "c'mon everybody let's hate him". Each of us, completely independently, had a reaction more like "WTF America, you're using money as a motivator and then you act offended when people go to extremes?"

In technical terms, capitalism provably maximizes economic efficiency under certain assumptions, but doesn't maximize aggregate utility under the same assumptions. These two things are not the same, because money has diminishing marginal utility. If poor Alice needs a loaf of bread to survive, but rich Bob can pay more for the loaf because he enjoys watching bread burn, then Alice just dies. A centrally planned system of 1 loaf per person would've worked better in this case.

comment by Raiden · 2015-05-09T22:56:03.361Z · score: 0 (0 votes) · LW · GW

I strongly suspect that the effectiveness of capitalism as a system of economic organization is proportional to how rational agents participating in it are. I expect that capitalism only optimizes against the general welfare when people in a capitalist society make decisions that go against their own long-term values. The more rational a capitalist society is, the more it begins to resemble an economist's paradise.

comment by MaximumLiberty · 2015-05-08T15:34:51.134Z · score: 0 (0 votes) · LW · GW

I've not read the Rifkin book, so it may have a response to the criticism I'm about to make of your rendition of the key idea.

"The margin" is a concept that is set in a temporal context. That is, the margin is about a decision being made. Historically, economists think primarily of the short term margin: changed to production that can occur without changes in capital (and so, prototypically only using variations in inputs such as labor, energy, and raw materials). This is where marginal cost can fall to zero.

But economists also recognize two further changes, which can be classified as medium and long term margins, but which is which often depends on the structure of the industry. One type of change is the application of additional capital. Typically, this is the medium term margin. The second is competitors entering or exiting the market. This is usually the long-term margin. At this margin, marginal costs never ever fall to zero.

Under a condition of zero short-term marginal costs driving prices below the long-term average cost, competitors will exit the market or differentiate themselves. In the former situation, you eventually arrive at a duopoly or monopoly. In the latter situation, you end up with monopolistic competition (which I think is a fairer description of most consumer goods, for example).

Thus, I think the idea of prices generally falling to zero because short-term marginal costs fall to zero is misplaced. To put it simply, marginal costs are not total costs.

comment by dumky · 2015-05-04T05:12:10.661Z · score: 0 (0 votes) · LW · GW

It would be helpful to define terms first. Capitalism is the system of private ownership of scarce objects. People are scarce, land is scarce, resources are scarce. Even if energy becomes plentiful, the means of production of that energy will remain scarce (solar panels and other capital goods). Even if you can 3D print any object, the resources used as inputs are still scarce.

In short, scarcity will not go away, although it will continue to get significantly better, as more valuable and useful things can be produced with less (less labor, less energy, less resources, etc). Therefore private ownership and voluntary association, aka capitalism, will remain.

comment by Xerographica · 2015-05-03T20:16:36.188Z · score: -6 (6 votes) · LW · GW

What is the demand for threads? Does it matter that none of us knows the answer?