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The Expanding World of Poverty Capitalism (nytimes.com)
63 points by smacktoward on Aug 28, 2014 | hide | past | favorite | 100 comments



I know some will balk out of fear and comfort, but we are approaching a boundary that will force these schemes to expand into the socio-economic strata that you also belong to. Sure it's easy to ignore the brewing storm because it's at the horizon, but what happens when the government and the corrupt officials find that they have sucked the poor and down-trodden dry and their revenue streams are atrophying. Let's see, you speed, well we need to make sure that you are not a serial speeder and need to monitor you for an increasing number of months at a cost of $100 per month for equipment and services. Let's see...what else? You drink.... you've been drunk in public. Well we need to make sure you are not doing illegal things while you are drunk so we need to monitor you for an ever expanding number of months.


The alternative is incarceration; would you rather that be mandatory? Crimes were committed (whether what was committed should be a crime is a different discussion), incarceration is the normal punishment and means of ensuring the crime (nor others) is not repeated within a given period of time. Thanks to technology & private services, we can give the convicted an option which prevents/discourages recidivism within that period, but otherwise lets them largely return to freedom. Being costs above and beyond what the jurisdiction has budgeted (on the represented will of the people), either let the convicted opt for paying for the means for that freedom, or take the free route of being locked in a box for a prolonged period. Sure there are issues subject to objection in this, but remember: the alternative is dump these options and just incarcerate.

BTW, PSA: an out-of-state driver in NY caught speeding can be subjected to an additional >$300 "safe driving assurance" (or some rot) fee, paid to ensure said driver is not arrested outright next time discovered (for any reason) driving in the state. No 3rd-party services/mechanisms involved, just straight-up legal extortion which, per the lead article's premise, hits the poor harder than the better-off.


The just alternative is that the State pays for the programs it deems necessary to force on people for the good of society. It's not a question of funding: incarceration is at least an order of magnitude more expensive than surveillance.

If you think that large punitive fines are a useful disincentive to crime (whether that's true or not depends on several factors, but for people living paycheck to paycheck and in deep debt, probably not), fine, argue that. But that's a separate issue. So far as I can tell, there's no policy argument for making people for their own surveillance, if what you're concerned about is improving social outcomes.


The issue with shifting to "soft" enforcement is that the softer enforcement allows the punishments to be extended for much longer than a jail sentence. Instead of 3 days for public intox it might be a year of ankle monitoring at $350 a month, and because the city wants the year to look attractive they either take away the incarceration option or increase the sentence. So the very poor get incarcerated for longer, and the less poor end up with a fairly massive chunk out of their income. Also because the city isn't paying they have a lessened interest in reducing the fees.

If you look close you can see some hidden pernicious issues with it. Fundamentally it means that the state can be really mean to the poor and not impact the better off. Penalties that one can buy their way out of can even to an extent encourage lawbreaking.


A sample of Southern IL justice :

Speeding ticket. Want to keep it off your mandatory insurance so your rates don't go up? We have an online school where you can learn to not be a speeder. It'll cost you a couple hundred on top of the fine and administration fees.


My understanding is that you actually SAVE a ton of money in the long run by keeping it off your driving record. So I don't see it being in the same class of predatory practices outlined in the original article.


It's a close cousin of what we see in the article.

When the system that rips me off daily offers me the option to get ripped off in a small way to avoid getting ripped off in a big way, I don't feel like I'm really SAVEing.


I don't think it's a close cousin at all. Making you pay a fee to take a class that they spent resources putting together and administering is quite different than the private companies in the article who are just shafting the poor and using that as a sales tactic to implant themselves deeper into local governments.

Also note that you can get away with taking the anti-speeding class only once. It's a one-time deal they offer you, mostly as a warning. It's not a continuous stream of revenue for the party administering the fee.


If you have ever taken one of those courses, whether brick and mortar or online, you will understand that it's simply a con job that the driving school industry has pushed through.

If the intent were really to penalize and disincentivize then punishment would need to be relative, e.g., your speeding ticket would need to be a percentage of your last annual income.


Don't speed to excess. Don't drink to excess.

Given so many do, I'm unsurprised governments seek to increase enforcement & stakes, given limited resources. (malum prohibitum a separate issue.)


Several comments here are addressing the use of the word "capitalism." It's being used because this op-ed writer knows his audience.

Writing on the editorial pages of the Times, he knows he is reaching a primarily liberal audience. He is writing in the context of Democratic political campaigning against big corporations about the financial meltdown, growing income inequality, poor job growth coincident with record corporate profits, and tax shenigans like inversions.

In short, he's speaking to an audience that tends to be suspicious of businesses larger than the local grocer, and that has already been whippped up in that direction for several years now.

So: he frames his pet issue in those terms, in order to get the maximum response from the audience. (It's also why he name-drops several Republicans, despite the fact that these fees are charged in localities controlled by either party).

Seen objectively, the issue is not actually with capitalism, since one of the major examples of fees hitting the poor are municipal court fees--which don't go to private companies at all. They are directly assessed by the local government to pay government expenses. But they're still hurting the poor. NPR had a great story about it recently:

http://www.npr.org/2014/05/19/312158516/increasing-court-fee...


Alex Tabarrok has been discussing this passionately on the Marginal Revolution blog:

http://marginalrevolution.com/marginalrevolution/2014/08/fer...

http://marginalrevolution.com/marginalrevolution/2012/04/deb...


This seems expensive, inefficient and destined to trap people in a cycle of poverty.

I'd rather my taxes cover the true cost of the court system and the courts focus on reforming individuals rather than cost recovery.


Expensive and inefficient for society, great for those who profit from the poor. Of course they're trying to trap people in a cycle of poverty - what's better than having customers who can't escape?


Personally I would tend to agree with you, except I want the money to be used to discurage crime in the first place - by making it much harder to be a criminal. I don't feel an ounce of pity for those who have to pay for their ancle bracelets.

I do agree that you shouldn't go to prison just for not paying your court fees, but if you drive drunk or sell drugs on the street I am not crying for you.


The key word here is "defenseless". Add "criminal" to that and they lose the protection of society too. There's nothing keeping us from grinding them to pink slime on an optimized exploitation curve. They die at 35.


destined to trap people in a cycle of poverty.

Only if those people persist in committing crimes.


It doesn't seem like you understand. This privatization is creating a cycle that is contributing to people being repeat offenders.

So yes, "only if these people persist in committing crimes", but the government is making it harder on them to get their life back together after committing the 1st crime.


The $free alternative of incarceration remains, independent of whether costly alternatives exist.

Alas, human nature is such that making it easy "to get their life back together after committing the 1st crime" decreases the incentive to do so. The main point of sentencing is to discourage recidivism.

I'm concerned about a subculture normalizing crimes, 1st or subsequent. Objecting to punishment with zero consideration of the cause thereof facilitates the underlying problem.


I worry more about subcultures having their normal criminalized e.g. the drugs those people do need to be punished severely.

This goes back to prohibition and the Ku Klux Klan supporting it to antagonise Irish Catholics.


This is already happening with crack vs coke, but I assume you know that =)


Alas, human nature is such that making it easy "to get their life back together after committing the 1st crime" decreases the incentive to do so.

[citation needed]


It's not easy to get your life back to together. It's very difficult already. These offenders are punished enough already, society should not be making it more difficult.


The very fact this article is talking about government and business in symbiosis means the author doesn't understand the word 'Capitalism'.

When big business are in cahoots with government, to good or bad effect (usually bad) it's Corporatism, not Capitalism.


I often hear this kind of argumentation and I frankly don't buy it.

When businesses are in cahoots with each other it's called cartels.

Lets not pretend there is some pure version of capitalism that isn't tied to some special interest.


Mixing business with government is government. It takes the power from the customer and puts it into the hands of regulators.


Mixing government with business is business. It takes power from the citizen and puts it into the hands of capital.

This is not a disagreement with you, by the way. But just as Rawlsian liberals can't postulate a government that's immune to corruption into existence, libertarians and market fundamentalists can't postulate businesses that don't co-opt government to entrench their market positions.


Either way, government is evil. Remember, libertarian is a philosophy, not a political belief and the Libertarian Party gets a lot of flak for making compromises in order to be popular.

There's nothing wrong with calling yourself libertarian and supporting some sentimentalized conservative version of government, but government by definition violates the "non-aggression principle".

I don't disagree with you either, in fact you've really only restated what I said.


Any organization that have it's own interest is potentially evil whether government or private enterprise.

You can't define your way out of that.


Potentially, but not by definition. That's an important difference. Only one has the potential to be good, and only one is controllable by the people who are truly effected by it.


Both have the potential to be both good and bad.

If you are trying to promote some sort of ancap/libertarian approach lets just stop here that view is in my mind as naive as a communist view and there is no basis for those kind of moral claims.


By. Definition. That's all that needs to be known.


The ability for a business to use the government to its own ends its directly proportional to the size and power of the government. One of the best examples I can think of is Gazprom. While technically a private company its really just an extension of Vladimir Putin's government. In the US you find the similar arrangements in the defense and intelligence sectors.

The less powerful the government, the less power there is to be had by co-opting it.


But you are in that assuming that private enterprise wouldn't be able to establish a monopoly via the market, a monopoly that wasn't necessarily established via "fair game".

The less powerful ANY organization the less power. It's not exclusive to governments.


Natural monopolies are near impossible, and have never harmed anyone. I've only heard of 2 in all of U.S. history. I don't remember which they were, but they didn't last long and they were entirely insignificant in the grand scheme of things.


Natural monopolies are indeed possible and they are indeed of course harming people. DeBeers being just one example of that.


DeBeers only has a 40% market share, bad publicity is a major driver for them. At their highest they only had 90% share, that means there were other choices. >.>

Not a monopoly. No real harm either. If you want to complain about where the money went after the transactions were made, that's another subject.

You're so set on arguing with me. I think it's best if you sat down.


Capitalism is the separation of state and economy. When governments set interest rates, print money, tax people and recruit through special interest, it's Corporatism.


Which basically just means that instead of a state having the physical power someone/something else will.

Again you can't define your way out of this.


Haha oh I can. So do you also make the argument that a river is and evil Capitalist because it deprives a drowning man of oxygen? A salt plain has power over a dying mammal that can't find food. Is that also evil Capitalism? No. Capitalism is about best dealing with the fact that the universe owes us absolutely nothing and that the only consolation for that is freedom, voluntary association and opportunity. You can't diminish all forms of 'power' because it's within nature itself.


Nope. You're describing a specific form of libertarianism.


There's no ideologically pure world where businesses are uninvolved with government. Indeed, if you take the oft-cited "must maximise profits at any cost" motivation, businesses must lobby government to their advantage.


Then stop voting for a government that has power to dole out to lobbyists.


What would that look like? It would have to be unable to spend money on anything or make any kind of economic or product safety policy. It would be hard to distinguish from no government at all.

No, lobbying is something intrinsic to any representative system. What can be tackled is the flow of money - once it's accepted that money isn't speech.


instead, vote for a government that is powerless to rein in the natural power of capital


And that would be... ?


So what's your definition of capitalism?

I think the original definition originated sometime in the 19th century, probably from Marx, and it meant the actual, real world system (this is different from communism, which designated an ideal).

I always understood it as an economic system based on two characteristics:

1. Private ownership of capital.

2. Labor as a market commodity.

I think these two aptly describe both 19th century and current economic systems, and I don't think this implies anything about symbiosis (or lack of thereof) between government and business.

Addendum: Maybe you mean free market, which, in my view, is a different thing. At least because it, like communism, describes an ideal, not an factually existing system (I am not aware of sufficiently closed economic system which could be considered to be a free market).


3. Liberty to mutually contract.

"Pay this fee to a 3rd party or you go to jail" isn't.


"Liberty" is definitely not a part of Capitalism. In capitalism liberty only applies to those with capital, just like liberty only applies to those with power in any system.


Everyone has capital, if only their minds & muscles - therefore all have liberty, and are capitalists.


While "sweat equity" is a fun ideal, in reality it is not very similar to passive equity. That is in essence what wealth in capitalism is. Income via passive equity.

When one is dependent on "their minds & muscles", what that actually means is that they are forced to work in government approved income activities(nothing illegal) or face imprisonment or death. That doesn't sound much like liberty to me. On the other hand, those with enough passive equity no longer need to work in government approved activities provided by the asset class, and very much do enjoy the benefits of liberty.

That said, it is very obvious to are tied to an ideology(likely because it benefits you a great deal personally), and I won't spend any more time trying to enlighten you.


Nope. Capital is what you own, not what you are. You can exchange labor for capital, but until you do, you do not have capital.


"So what's your definition of capitalism?" - Mutual, voluntary free economic association of trade in commodity, time and subjective value.

The original definition was prior to that, first used by Anne-Robert-Jacques Turgot in a positive, anti-feudalist sense.

Those two are components of Capitalism, but by no means is is inclusive of the concept of central governance. When banks are centralised, they aren't privately owned.

When the money and currency itself is printed and distributed by a central regime, it isn't private. So when the value itself isn't private, then ownership of capital isn't private.

The terminology to best describe this hybrid of centralised ownership of currency and labor and partial free-markets are better described as 'Corporatism' or to be more brutal an 'Oligarchy'.


> The original definition was prior to that, first used by Anne-Robert-Jacques Turgot in a positive, anti-feudalist sense.

I think you're wrong. I looked around the Internet and it really seems that the word "capitalism" originated from "capitalist", first used by Marx in Communist Manifesto.

See e.g. https://answers.yahoo.com/question/index?qid=1005122700456

(I would be interested to see exact quote from Turgot, that uses the word.)

What you describe was called "economic freedom" or "economic liberalism". And I already said that, when I mentioned "free market". Markets obviously are prerequisite for capitalism, but they don't have to be free in this sense.


You're describing laissez-faire capitalism, which is a subset of unqualified capitalism. Any system where all or most of the means of production are privately owned and operated for profit is a form capitalism, regardless of what the government does to manipulate the market.


Free market (in ideal form or not) is a prerequisite for capitalism.


The problem with the word capitalism is that there are at least four definitions for it. The meaning usually depends on where you are coming from in the political spectrum. The author should have used "the current system" instead of the word "capitalism". But you know, nowadays the trend is to blame everything on capitalism, and it sells really well, so as long as people keep buying it we will keep seeing that word around.


The current system is capitalism. The degradations are part of capitalism in practice. If you only accept categories that are theoretically pure, you cannot speak about the real world.


Governments have been increasing their regulation and redistribution for over a hundred years now, yet we still call the system "capitalism". At what point will we agree that the Western nations have either blended or socialist systems?


> At what point will we agree that the Western nations have either blended or socialist systems?

A good line in the sand would be: whenever a government spends more of its revenue on social transfers than on the legislative, military, and judicial branches combined, it's either a blended or a socialist form of government.


I think we all agree that western nations do not have some kind of pure form of libertarianism. That's why we call it capitalism, and not libertarianism.


How much government regulation, redistribution, and ownership is required before we call it socialism? I am not saying that socialism or mixed systems are bad, but I would like the system we are in to be accurately described.

It seems that many of the bad things which occur are ascribed to capitalism, when they should be attributed to the mixed (or socialist) economy we actually inhabit in the west.


Surely that's why libertarians make a distinction. Capitalism is the word we use for the various systems that we inhabit in practice.

The things that you are calling 'socialism' are the products of democracy.


Nowadays the public expenditure of many European countries is above 50% of the GDP. This is, more than 50 cents of every monetary unit are being expropriated and distributed according to a central planning. Even for the US, the figure is around 40%.


No kidding, these kinds of hit pieces are just more excuses for more socialism. It's a shame when the world has no idea how big of a difference there is between a capitalist economy and "mixed economy". (ie. partially socialist)


and ie. partially capitalist.


Right. A mixed economy is neither socialist NOR capitalist. You simply can NOT act as if the three have the same effects or even look the same.


This is all sick in it's own way, but it's not capitalism. Why do people equate every system in which someone makes a profit with capitalism?


> This is all sick in it's own way, but it's not capitalism.

In the same way that the USSR wasn't communism. Does that matter if it's the result when you don't just deal with spherical humans in a vacuum?


It's the evil twin of capitalism, crony capitalism, which is what we have in this country.

(Technically, it should be called fascism, since it's the binding together (fasces) of government and business in an unholy union.)


Crony capitalism, corporatism... Call it whatever you want, but it doesn't really exist outside the framework of capitalism. I'll keep looking for the true scotsman just in case I'm wrong, though.


Eh. There's one thing where people are able to purchase, own, and maintain capital, and make money off its output. There's another thing that's about using the coercive force of the state to force people to send you resources that they wouldn't if they were free to do as they pleased. It's meaningful to refer to the former as "capitalism" and call the latter something more like "fascism". It's also quite meaningful to discuss the discuss the manner in which they interact and the impurity of extant capitalist systems.

But the big people in charge (or at least with connections) forcing the little people to send them resources? That's a pattern far older than the notion of capital investments, and dates back to our early primate days, before our most basic notions of investing in the future through things like, say, agriculture. So I say it's pretty much orthogonal to capitalism.


>"But the big people in charge (or at least with connections) forcing the little people to send them resources?"

This sounds like feudalism to me, though I know the word has negative connotations, and is now associated only with the distant past.


This kind of thing exists in any form of government. Even if there is no money, the idea of making people pay for their own punishment (through any means, including their labor) has been around forever.

The idea that communism or socialism is free from this kind of thing is ridiculous.


> The idea that communism or socialism is free from this kind of thing is ridiculous.

Oh, sorry, I was referring to the problems specifically described in the article, not to "the idea of making people pay for their own punishment" in any general sense. I should have been more clear about that, or maybe you should be more careful about setting up straw men.


"Crony" capitalism is just regular capitalism.


Where is the true capitalism to be found then?


Not tied to government mandates, maybe?


Where is that?


"in Washington state, N.P.R. found, offenders even get charged a fee for a jury trial — with a 12-person jury costing $250, twice the fee for a six-person jury."

Is that legal/constitutional?


No idea about legality (not being in or from US I have an excuse for my ignorance); however the idea of charging the defendants for administering justice can be traced back to at least the inquisition. They had a price list for "interrogation" operations, which were payable by the subject being tortu^Winterrogated.

Because a good number of their subjects failed to survive the administrations, these costs were often extracted from their family and relatives, retroactively.

On the director's commentary track for Brazil, Terry Gilliam notes that the inquisition's practice of charging fees for their (in)justice was one of the major ideas when honing the script and the storyboard.


I'd like to see the data behind this quote:

"This new system of offender-funded law enforcement creates a vicious circle: The poorer the defendants are, the longer it will take them to pay off the fines, fees and charges; the more debt they accumulate, the longer they will remain on probation or in jail; and the more likely they are to be unemployable and to become recidivists."


It isn't deeply empirical, but this article provides some exposition on it:

http://www.npr.org/2014/05/19/312158516/increasing-court-fee...


This state of affairs has been slowly accumulating since the 80s. There probably aren't any rigorous data sets that 'prove' the characterization of that statement, but one young social worker actually went and lived in a poor neighborhood that exhibited this sort of poverty / correctional custody trap, her account is here:

http://www.amazon.com/Run-Fugitive-Fieldwork-Encounters-Disc...


The quote that you've used is a deductive argument. It would be interesting to see if the effects are borne out in the data, but I'd look for a hole in the premises of the actual argument first - if only to see what data may or may not be relevant to its soundness.


It seems more and more every day the government of the United States is not there to serve or help it's citizens - it's purely there to serve and help big business.

Sooner or later this has to end. I just hope it's not too violent when it does.


Why does it have to be violent at all? Many people on this site are a fan of Larry Lessig. Check out his alternative to the "violent end" of big business Mayday.us


I don't think it has to be violent, but I think the way things are going it will be.

Tens of millions of people are without healthcare, getting their homes taken away and are unable to provide for their families.

To put it bluntly, they're desperate.

Also, America has a history of violence, an armed populace and a "I'll take what's mine" foundational attitude.

Combine desperate people with a history of violence, and you get Ferguson, New Orleans, etc. etc.


This is surprisingly reminiscent of a particular scene from a Terry Gilliam's Brazil: http://youtu.be/nSQ5EsbT4cE

No doubt other science fiction authors and directors have tacked this topic as well.


Tax the rich.


We do. Heavily. They pay the bulk of all taxes.


I'm sure how you know these tax discussions inevitably go, so I'll just ask you to reread your commit and correct the very large inaccuracy in the last line to be what you actually meant to say.


And the right to steal from, or "tax", the rich, comes from where? In other words, I'm curious how you think this is moral.


Money (and property) are social constructs.


I'm curious how you think it's moral to deny justice to, or steal from the poor.


I don't think those are moral things to do. But if you vote you do, because you are funding a group of people (the government) that does exactly that: denies justice to the poor (e.g. the war on drugs), and steals from them (e.g. the poor have fewer tax-evading strategies at their disposal).


This is obviously false. Voting is a way of interacting with the state. Neither voting nor not-voting implies support for any particular state policy any more than using a state issued currency or holding a passport does.


To Curb Global Poverty Every 3rd World Currency Should Be Pegged To OPEC Oil For 4 Years Till https://en.m.wikipedia.org/wiki/Triffin_dilemma Is Resolved.


No good can come from this.


Sounds like a good idea.




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