Capital is just another name for power and powerful people fight to maintain and accumulate more power - welcome to the world, summer child.
It's woefully naive to expect individuals to give that power up for social-positive goals, it practically never happened throughout human history. We achieve social-positive goals by behaving as a society and limiting what the powerful can do with their power - democracy, market regulation, progressive taxes, they are all forms of limiting the accumulation of capital and power.
And it just so happens that the current system we came up with - a mixed market with a strong, democratically elected public authority, yet freedom for individuals to pursue taxable profits - is the one that seems to work the best, because it pushes powerful people, both politicians and capitalists, to cater to the needs of society if they need to maintain their power. It's not an utopia, human nature has not changed and some would chain other people up tomorrow like in medieval times if they could get away with it, yet it works remarkably well.
It's nothing short of amazing that it works, really, we are privileged to live in a society where the powerful are so limited in what they can do with their power. We can still fine tune & tax more, of course.
We didn’t just “come up with that society”: many aspects of it were deliberately constructed because previous iterations failed badly. Deposit insurance, which is the subject of this post, was a depression-era phenomenon that came into existence because many banks failed catastrophically. Many other aspects of our modern society, from old-age pensions to welfare to our global defense alliances, were also born of similar disasters.
The main objection in this post is that certain members of our society seem to view those developments as “old fashioned” and unnecessary, and would like to roll them back. Some go so far as to advocate for and donate considerable wealth to politicians who promise to do so. But of course when those people are themselves exposed to the exact risks those systems were designed to protect against — suddenly they’re enthusiastically in favor of government protection.
The lesson here is that you should not look at our society and take it for granted. It took work to get us here, and it takes constant work to keep it in place. There are people who would throw it away for a momentary profit, and those people will tell you their beliefs are founded in principle. But for your own protection, you should pay attention to how seriously they take those principles when their money is on the line, and update your mental model accordingly. In this case the answer is: they do not take those principles very seriously at all.
Of course it didn't all spontaneously emerge, it was a result of a long political struggle of the masses against those in power; I was condensing for brevity and specifically mention existing room for improvement. I disagree though with your the read of the article. In the author's own words:
> I would probably argue that venture capitalists are not good for society regardless of what they’re investing in. ... I am feeling particularly secure in my opinion on the investor class after the shitshow we just witnessed
...
> People are realizing that despite the hundreds of billions of dollars being deployed each year by venture capital firms in pursuit of “innovation”, the world doesn’t really feel hundreds of billions of dollars better off for it.
The sentiment here is clear, and has nothing to do with rolling back old-fashion regulations. Rather, it's a pure and unadulterated call against investor freedom and profit driven innovation. It's, dare I say it?, a call for economic Stalinism: stripping the "investor class" of their power to direct economic activity, investment and innovation. The author is silent about the implications of those ideas, but let's just say the historic record is not excellent.
This is what I reacted to, and I'm telling the author to chill, go a little easier on that thick ideological slurpee, perhaps read a little more and come back when they come to appreciate the finer nuances of how society really works.
> And it just so happens that the current system we came up with - a mixed market with a strong, democratically elected public authority, yet freedom for individuals to pursue taxable profits
This is naive to the point of absurdity, when the rich and powerful quite often are gifted loopholes for the profits to not be taxable, with a wink and a nudge from the "democratically elected public authority".
I would certainly love to live in your illusion that "we are privileged to live in a society where the powerful are so limited in what they can do with their power" when they are constantly bailed out from their mistakes and get literal "get out of jail free cards" from their misdeeds. Things that would get you in prison get them a slap on the wrist at most.
> naive to the point of absurdity, when the rich and powerful quite often are gifted loopholes for the profits to not be taxable
This is not how I read OP. You’re reading a Panglossian “we’re in the best of all worlds.” I read we’ve found a good solution, but it’s a work in progress.
Democracy alone has evolved through the centuries, ranging from electoral fetishism to enlightened autocracy. Progressive taxation, meanwhile, is a mostly modern invention. Yes, it’s easier to take a cheap shot at how the rich are powerful, but that’s OP’s other point, the rich are always powerful. How they are incentivised to use that power, and how they accumulate it, is a much more productive (and intellectually challenging) discussion than pointing out we aren’t in a utopia. (We know that. Everyone knows that.)
The rich will always be powerful. The irony is that we do live in the best of all worlds, but it still sucks. There's no utopia, there's only dystopia.
And I disagree that democracy will ever be improved, at least not with humans at the helm.
I proposed no alternative because there is no alternative.
A benevolent AI would not work as humans will be the ones to define the constraints under with the benevolent AI operates. Make no mistake, the ruling class will define constraints that will give them more power.
My remark about "humans at the helm" may have given you the false impression that I am optimistic about technology solving our societal woes. I apologize for that. I state that there's no eucatastrophe to save us from ourselves. My remark was intended as a sardonic statement that while there are humans, nothing will ever be improved. These problems are as old as humanity, and will only cease being problems when humanity ceases to exist.
Everything from wage theft to dumping millions of gallons of crude oil in bodies of water is little more than a fine if you are a registered corporation.
Exactly. Democracies, it turns out, are actually very difficult to fully implement for a plethora of reasons. We, for the most part in the "west" live in a technocracy to which governing bodies are subservient and acquiescent. My personal desire is that as our current world continues to unravel, enough people wake up to this fact and say, "no more". That would be a grand step towards a better democracy.
“Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.”
Applies to the democracy + capitalism combination, as well.
We can try to improve upon it, but should be carefull to not kill the goose that lays the golden eggs.
One can believe that the combination of democracy and capitalism is the best thing humanity could come up with, and realize it still sucks.
Humans are tribal above all else. We evolved to cooperate on small bands hunting animals in some African savannah, not to cooperate in large scale as the world we create requires. Any government system we come up with will become dysfunctional because we are unfit for the world we created.
My point still stands. The ruling class is as powerful as they always were, and operate on rules designed by them, so that they can better oppress the lower classes. And I don't advocate that a different system would be any different. There will always be a ruling class.
Nothing is more permanent then temporary loopholes.
They exist only for long enough time until the next loophole is put in place.
> One example would be tax cuts in exchange for committing to provide N jobs.
Gotta love this one. Trickle down economics at its best. "Thanks for going through the trouble of getting richer by expanding your business. Here's some extra tax exemptions for your sacrifice. The silly peasants will pay taxes in your stead".
> tax cuts in exchange for committing to provide N jobs.
Does this ever work? That is does it work better than not giving tax cuts in the long run.
Committing costs very little, especially if the tax advantages are not clawed back if the jobs fail to materialise. How does one really measure the number of jobs created by the tax cut versus those that might well have been created even if there were no tax cut.
They get a tax cut and commit to paying N people less than the value they create for their companies, what's the cost? You must have accidentally erased that part while editing.
> and by living I mean bring your backpack and no cash, and try to make a comfortable life, obtain employment or start a business without using your existing capital or home country connections.
I don't really suppose the experience would be vastly different to being an alien in an OECD country, tbh.
> You can easily test the strength of that illusion by living for a time in almost any non-OECD country
I lived in both sides of the fence, don't worry.
> just that we need to appreciate what we have and not talk out of our behinds about the oppression
Yes, I'm thankful to be able to discuss with you how badly we are screwed without fear of getting even more screwed.
What else should I be thankful for that our benevolent ruling class gives me? That they don't behead me and put my head on a stake?
You seem to mistakenly believe that I would like to burn down the system to live under a Khmer Rouge 2.0. I just don't live under any illusion that our ruling class is benevolent. That they exert their power through political influence and crony capitalism instead of just coming to my house and murdering my family is not something to be thankful for.
When I say "appreciate" I don't mean it in a peasant to senior kind of subservient humility, to be thankful for the crumbs.
Rather, to stop and understand the subtleties of our setup and how much of our unprecedented wealth and freedom results from perhaps not very obvious design choices. Every possible system we can come up with has to deal with the problem of human greed, corruption, tribalism. There is no magical alternative around the corner where public officials are virtuous and competent - they are just as bad and greedy as the capitalists, only now they control not only the government but also all economic activities. As a person who lived in a Stalinist economy and the robber baron transition to market economy that followed it, let me reaffirm what you probably experienced yourself: you really really don't want to give control of the economy to the political elites.
Is a better and fairer world possible? Yes, I'm absolutely sure of it. But it will necessarily be an iterative redesign of our own. We'll still have capitalism in the sense of capital ownership and market competition, but maybe you would have an universal income that you can invest in any company. We will still have jobs but perhaps no more wage slavery, with enough robotic productivity to make housing, food and physical safety universal rights.
> And it just so happens that the current system we came up with - a mixed market with a strong, democratically elected public authority, yet freedom for individuals to pursue taxable profits - is the one that seems to work the best, because it pushes powerful people, both politicians and capitalists, to cater to the needs of society if they need to maintain their power. It's not an utopia, human nature has not changed and some would chain other people up tomorrow like in medieval times if they could get away with it, yet it works remarkably well.
I think the conclusion I'm coming to, at least for now, is that while that is in fact the system that we owe much of our current wealth to, it is not necessarily the system we currently live under. Yet we do have a society that likes to pretend it is still the system.
> It's woefully naive to expect individuals to give that power up for social-positive goals, it practically never happened throughout human history.
I would disagree emphatically with this statement. Prior to the advent of capitalism (200 years ago) there was significantly more long term vs short term thinking in society.
We as a people and culture often engaged in massive generation spanning projects where the people who would see and benefit from the results could be generations in the future and the people who started the project would be long dead before it was finished. How much of this do we see today? The ROI cycle now is what a quarter, a few years...
While I don't disagree that power tends to accumulate and is seldom given away, the focus wasn't solely on the acquisition and hoarding of capital. You can see the change in architecture, city design, the arts, and almost every aspect of life. Even simple utilitarian structures were often built as monuments of progress expected to serve generations. We can't even expand existing highways to meet demand.
There always were and always will be the selfish in society but society as a whole wasn't always this selfish.
Yet "capitalism" is actually the best way to limit that power of powerful people and make status pretty closely linked with ability.
In every other attempt at forming different societies (from feudalism to capitalism) it's generally the ones good at power games that win, not the ones with the actual best abilites.
It is said of Stalin he was the best power game player ever born, he was equalled by no one in power accumulation games.
The possible exception to this is small tribes, where it was usually the people who added the most to a tribe that got power (if you were a power game player two friends could basically topple you).
But we're not going back to tribal life, so there we go. Capitalism is still the best of all the bad systems we have.
Is status really linked to ability? Was SBF an anomaly, or just might it have been the case that he benefitted from obvious unearned social capital, like his Stanford professor parents? And that he, like plenty of others, told a story about “doing good by doing well” that so many wealthy people love to hear?
It's woefully naive to expect individuals to give that power up for social-positive goals, it practically never happened throughout human history. We achieve social-positive goals by behaving as a society and limiting what the powerful can do with their power - democracy, market regulation, progressive taxes, they are all forms of limiting the accumulation of capital and power.
And it just so happens that the current system we came up with - a mixed market with a strong, democratically elected public authority, yet freedom for individuals to pursue taxable profits - is the one that seems to work the best, because it pushes powerful people, both politicians and capitalists, to cater to the needs of society if they need to maintain their power. It's not an utopia, human nature has not changed and some would chain other people up tomorrow like in medieval times if they could get away with it, yet it works remarkably well.
It's nothing short of amazing that it works, really, we are privileged to live in a society where the powerful are so limited in what they can do with their power. We can still fine tune & tax more, of course.