Print

Please login or register.
1 Hour 1 Day 1 Week 1 Month Forever
Login with username, password and session length

[thompson]

Ah, yes. Workers rights are “communist”, but having a government central planning agency* effectively dictate returns throughout the entire financial sector, the beating heart of any capitalist economy, apparently isn’t. That the decisions of the central planners has disproportionately benefited the wealthy and has driven trillions of malinvestment in cash furnaces like oil fracking and propped up countless other zombie firms and their overpaid execs is totally “ok” too.

Inverse Socialism: where the means of production owns the state.

*The central planning agency I refer to is of course the Federal Reserve Bank.

[Qassius]

Ah, yes. Workers rights are “communist”, but having a government central planning agency* effectively dictate returns throughout the entire financial sector, the beating heart of any capitalist economy, apparently isn’t. That the decisions of the central planners has disproportionately benefited the wealthy and has driven trillions of malinvestment in cash furnaces like oil fracking and propped up countless other zombie firms and their overpaid execs is totally “ok” too.

Inverse Socialism: where the means of production owns the state.

*The central planning agency I refer to is of course the Federal Reserve Bank.

I do think that the manner the state and their involvement in the financial system is disastrous. Economists beat their chests over QE and stimulus, when all it does is redistribute wealth to the rich. The Cantillon Effect will leave Mr. Goldman Sachs with more money, while the average person's savings dwindle; inflation is a cruel mistress.

While I don't necessarily agree with the whole Austrian Economics train, Ludwig Von Mises did discuss how "Mixed-Economies" with regulation so vigorous like in Nazi Germany were defacto socialist due to the integration of the state in the running of businesses even while nominally owned by the business-owners. The Managerial Elite as envisioned by James Burnham is alive and well, and the fact that those in politics and business freely flow into each other is emblematic of that.

The fact that the state intervenes when workers deign to think to organize is just another facet of how this system is perpetuated.

[thompson]

Indeed. The situation is so bad I’ve seen people in investment forums openly scoff at quaint notions such as “profitability” and point instead to cashflow and the company’s ability to ride out seemingly perpetual losses because they can always “raise more cash”. The worst part of this is that these people have been 100% right and have been making an absolute killing on the market over the past 10 years.

Profitability doesn’t matter. Amazon makes bugger all profits too (relative to company valuation). I don’t know what this is, but it isn’t capitalism.

[Reelya]

A lot of this however is complicated by the fact that paper wealth is just that, paper. It doesn't necessarily equate to actual physical resources. The government could print money so everyone has the same amount of "money" as Bezos, but that wouldn't necessarily equate to a single dime's worth of extra physical production. If everyone had $180 billion in the bank then a cup of coffee would cost $250 million dollars and nobody would get out of bed for less than $500 million per hour. And a house would cost $300 billion.

So it's not necessarily that straightforward as going by "the numbers" because a lot of them are really just abstract numbers.

A better relative measure is to measure each person's consumption, i.e. how much they're able to spend per year, not how much they earn per year. If people are competing as to who can have the highest number in their bank account but they're not actually spending it, that amounts to little more than economic e-peen, not their consumption of real-world resources. Bezos makes something like a million times as much as a regular person, but he definitely doesn't personally consume a million people's worth of resources per year.

You get to the point where your income is so large that there just aren't more things you need to spend it on, so it becomes arbitrary after that. *Relative spending* then becomes the more realistic metric, because that does in fact indicate your access to real physical resources.

[SalmonGod]

74% of federal prisoners tested have been positive for COVID-19

[bloop_bleep]

If everyone had $180 billion in the bank then a cup of coffee would cost $250 million dollars and nobody would get out of bed for less than $500 million per hour. And a house would cost $300 billion.

If everyone had $180 billion in the bank, then Jeff Bezos would have the same buying power as the people who work at Amazon's warehouses, with all that would imply. Not sure what point you're trying to make here.

[MrRoboto75]

74% of federal prisoners tested have been positive for COVID-19

well they can't vote so

[thompson]

A lot of this however is complicated by the fact that paper wealth is just that, paper. It doesn't necessarily equate to actual physical resources. The government could print money so everyone has the same amount of "money" as Bezos, but that wouldn't necessarily equate to a single dime's worth of extra physical production. If everyone had $180 billion in the bank then a cup of coffee would cost $250 million dollars and nobody would get out of bed for less than $500 million per hour. And a house would cost $300 billion.

So it's not necessarily that straightforward as going by "the numbers" because a lot of them are really just abstract numbers.

A better relative measure is to measure each person's consumption, i.e. how much they're able to spend per year, not how much they earn per year. If people are competing as to who can have the highest number in their bank account but they're not actually spending it, that amounts to little more than economic e-peen, not their consumption of real-world resources. Bezos makes something like a million times as much as a regular person, but he definitely doesn't personally consume a million people's worth of resources per year.

You get to the point where your income is so large that there just aren't more things you need to spend it on, so it becomes arbitrary after that. *Relative spending* then becomes the more realistic metric, because that does in fact indicate your access to real physical resources.

I’m sympathetic to this argument, but it doesn’t mean there isn’t a problem. The current oil fracking farce is an excellent example of how Fed policy HAS led to enormous amounts of real-world resources being wasted producing oil in a far more inefficient way than available to competitors. Rich people got richer, but who do you suppose picks up the tab? If Trump gets his way it’ll be taxpayers. I don’t think anyone really objects to people getting rich on merit. The problem is, reward is becoming less correlated with merit all the time and government policy, not the market, is primarily to blame.

How many generations of Bezos’ deserve to be effectively infinitely rich?

[bloop_bleep]

A lot of this however is complicated by the fact that paper wealth is just that, paper. It doesn't necessarily equate to actual physical resources. The government could print money so everyone has the same amount of "money" as Bezos, but that wouldn't necessarily equate to a single dime's worth of extra physical production. If everyone had $180 billion in the bank then a cup of coffee would cost $250 million dollars and nobody would get out of bed for less than $500 million per hour. And a house would cost $300 billion.

So it's not necessarily that straightforward as going by "the numbers" because a lot of them are really just abstract numbers.

A better relative measure is to measure each person's consumption, i.e. how much they're able to spend per year, not how much they earn per year. If people are competing as to who can have the highest number in their bank account but they're not actually spending it, that amounts to little more than economic e-peen, not their consumption of real-world resources. Bezos makes something like a million times as much as a regular person, but he definitely doesn't personally consume a million people's worth of resources per year.

You get to the point where your income is so large that there just aren't more things you need to spend it on, so it becomes arbitrary after that. *Relative spending* then becomes the more realistic metric, because that does in fact indicate your access to real physical resources.

I get what you mean now, but I don't understand why you would think the fact that the majority of Bezos's wealth is just sitting there completely unused while 1 out of 5 American children starves makes it better.

[Reelya]

Because it's literally just pieces of paper. Using it doesn't mean making more resources, it means changing allocation of existing resources. It's a systematic issue. If you give resources to those people then those resources have to come from somewhere else, probably from raising the price of the resource for everyone who isn't the person you're re-allocating the resource to.

Jeff Bezos handing out money doesn't solve the issue. Whatever resource is purchased with that money is no longer available to people who you didn't give the money to (the proximate effect is that the price rises).

The core argument here is that since rich people are sitting on piles of unused money that's somehow making everyone else have less (of real things). It just isn't. That isn't how it works. If Jeff was a wild spender it would probably drive inflation more than do anything else, causing everyone else's money to lower in value. People saving/hoarding/not-spending money is strongly anti-inflationary.

We could definitely stimulate more consumption of real resources by everyone in general. There would be a number of ways to achieve that. However, think what that actually does for the planet and the environment? So, because people like Jezz Bezos are hoarding money, according to the idea, then other people can't access as much resources. But ... we're already consuming WAY too much resources, so stimulating more consumption as a way to fix inequality seems like a poor solution. If Jezz Bezos wasn't sitting on all that stimulus money think how much hotter the economy could burn I guess. Which isn't necessarily a good thing.

What people like Jeff Bezos have is purely nominal wealth. You could say that Jeff Bezos could afford to buy 90 billion hamburgers and give everyone in the world 12 hamburgers and how this would help world hunger. Except it's a stupid idea and wouldn't work, because the world cannot produce that many extra hamburgers. Sure, you can use the money to commandeer existing food and redistribute it, but then other people find that if they want any of the remaining hamburgers they're now $50 each. So this idea that just because on-paper such-and-such amount of money is enough to provide resources to everyone is actually a complete lie. The resources don't exist. You use money to change resource allocations, not to make fundamentally more resources (and if you do: you just wreck the environment that much quicker).

[The Ensorceler]

You can, however, shut off a very large number of debt cycles and adjacent things like missing/inadequate infrastructure in a community. Large amounts of open debt is hilariously inefficient at using resources due to the Vimes Boots principle. If you can only afford to buy cheap things that wear out quickly, you may buy the same things so many times over/pay for repairs that you spend more in total and consume resources faster than getting the higher-end model to begin with. The resource thing doesn't always work like this (food probably doesn't, although... nutrition affects healthcare costs so even there exclusively cheap food might start looking expensive), but it does fairly often, and simply having your populace out of debt lets them make these more efficient choices.

[andrea]

The matter is also somewhat complicated in that Bezos's wealth isn't exactly fungible. It is calculated based on the market value of the stocks he owns, but that isn't quite money. If he tried to access a large enough chunk of it, the actual value would become significantly lower. If you nationalized it in order to sell it and generate revenue for social programs, it would be worth much, much less that its currently stated value. It is wealth, but it is not money. While it may look like it since it is quoted in dollars, there isn't actually a 180 billion dollar pile of money sitting unused.

A better measure for inequality may be spending capability ( as in how much money one can reasonably afford to consume, regardless of availability of goods.), Mind you, even with that he is waaaaaaay richer than any common person, but that is a more accurate representation , if difficult to calculate, of how much richer than the common person he is.

Due to the way those huge net worths are tied to the market worth of businesses rather than actual physical stuff owned or money, it can be hard to fix without creating some perverse incentives or suboptimal situations. For example, if you have a wealth tax on shares, you basically force companies to issue enough dividends to pay the tax. Lets say, a 5% tax on all shares. For anyone to afford holding the company, that company needs to pay at least 5% dividend or owning it becomes extremely costly; since revenues are often quite a lot less than worth of a company, it becomes crippling. Of course you can have a threshold, but then you are incentivized not to grow your company. Which could arguably be considered a plus actually, with an incentive toward smaller companies. More diluted ownership is also a possibility, the effects of that I honestly don't know.
Point is, going directly after that accrued value has a lot more consequences to everyone than just lowering unequality.

I wonder if going after corporations themselves wouldn't be a more effective route, closing some tax loopholes and exemptions.

But regarding wealth accumulation itself, a favourite of mine is an inheritance tax. Let people earn and keep a lot in life, but don't let it accumulate across generations to make aristocracy.

[Reelya]

That's actually a really good point.

If you have a lot of something, but only a small percentage of that thing is actively traded, then the market price already takes into account how much of that thing is available, so it's silly to extrapolate out the market price to the stockpile and say it's "worth" that. Because it clearly isn't.

It's like saying that De Beers is sitting on a stockpile of $20 trillion worth of diamonds and they should sell the lot to raise money to provide to charity, and you've already earmarked where the $20 trillion will be used. Of course that won't happen because there isn't $20 trillion available for anyone to buy diamonds, and even if you did get it, that diverts money away from other things, and anyway, the price would crash to next to nothing if they did that.

EDIT: In the case of Bezos, the wealth isn't money as pointed out. It's Amazon. All of Amazon. To "spend" that, you'd need to liquidate Amazon as a company, which would destroy vast amounts of actual real value.

Also, say Bezos sold his shares in Amazon then gave all the money he raised to charity. What happens then? Who would he sell it to? Clearly, people who are less philanthropic than he is would have to buy it. Obviously this isn't a solution.

[thompson]

Has anyone actually advocated confiscating Besos’ wealth? I must have missed it.

It’s all well and good to discuss hypotheticals. But here, in the real world, real wage earners are losing real purchasing power due to low-to-negative real (inflation adjusted) wage growth, while wealthier people can borrow at near-zero interest rates which drives real investment in companies that can remain perpetually unprofitable either due to being horribly inefficient and MORE resource-intensive than competitors (I’ll mention oil fracking again, but there are plenty of other examples), or use their free debt to drive their real competitors out of business by selling everything at cost (Amazon being prime example of this).

Whether Bezos has 180 billion or 180 trillion isn’t really the point. It’s the whole economic environment that allows such things that is the problem. The whole point of capitalism is that it’s supposed to be meritocratic. Take that away and what’s left?

Taxing the wealthy* doesn’t mean using more resources. You could, you know, reduce the deficit. Maybe even build decent infrastructure, or, god forbid, better public transport or something. Maybe we could put more teachers in schools and teach people math properly so they realise living within their means is actually a desirable thing to do. Private companies generally won’t do this kind of stuff because they can’t monetise it. I’m not faulting them for that, it’s not their role. But that doesn’t mean no one should, and it’s better than a lot of the wasteful shit today’s free Fed money is being spent on.

*I’m referring to introducing a higher marginal tax rate and closing loopholes for high income earners. Whether Bezos** is affected by this is irrelevant- his heirs will be when they pay capital gains tax on their inheritance.

**I don’t intend to pick on Bezos, he’s just a convenient example.

[Frumple]

Didn't MSH advocate it? It's pretty inherent to the whole "no goddamn billionaires" thing. I guess you don't necessarily need to directly confiscate it to do that, but it'd probably help

Pick on bezos as much as you please, though, the companies he has influence on immiserates its employees constantly, when they're not actively trying to murder or maim their workers. Like most billionaires I'm aware of, he's someone it'd probably be ethically neutral at worst to guillotine. Merely reducing the wealth concentration he's on top of to something not fucking insane would be a less final option