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[Urist McScoopbeard]

@Naturegirl,

That scenario makes perfect sense to me! However, I think it's the minutiae of production and simple volume of global supply and demand that causes problems, among other things.

My two cents: [and I am not an economist so sorry for what will inevitably very strange thoughts]

I think, conceptually, Capitalism as a function of predicting... demand in products, for lack of a more specific definition, makes a lot of sense. A centrally planned economy, at least on a national scale, is simply not feasible--it's too damn hard for a group of bureaucrats to understand the real needs and wants of a large group. In fact, even in the social democracy that the US kind of practices (and many other countries actually practice to fairly good effect) fails to understand the substance of human need. This may be an obvious statement, but in my opinion, economics =/= the accurate prediction of mass satisfaction.

It facilitates the survival of a large part of it's [unwilling] participants--or at least explains it, but doesn't do much raise their quality of life--a metric which is, in and of itself, probably quite.... malleable in terms of what the average persons excepts it to be.

And of course, left UNCHECKED, Capitalism--as a system containing many corporate entities--completely destroys any semblance of freedom within a highly structured society. It places the corporation above the individual or even the collective good. All you have to do is look at 19th Century America to see the evils that lurk in the dark places of economic thought--but I won't go into detail here.

How do we fix this? It's a mess, and honestly, I think people might be too big of bastards to actually change to a system where everyone can find some semblance of peace and real freedom...

But regulation is a good place to start. As other have pointed out, most of the resources we need to survive are produced in larger quantities than we actually consume, and should probably be made available publicly for little or no cost. Corporations often complain that regulation will stifle productivity, or at least competitiveness, but there has to come a point when SOMEONE says, that just doesn't matter--while our technology has advanced exponentially, along with so-called labour-saving devices, the amount of time, energy, and ultimately LABOUR we put into our careers has remained pretty much  unchanged since basically 1869, which is when Grant made the eight-hour work day a national standard. Of course, it's difficult to measure the change in workload in such a rapidly changing labour environment and over such a long period of time, but generally speaking with the amount of and cost of education to get a well-paying job, the expectations beyond the minimum requirements in pretty much every career, and other factors (like the rise in cost of housing) means that people are working harder and for less than they have in a while. Not to mention several economic depressions...

And I'm pretty much just talking about the US there, needless to say in many other countries it is even worse--fuck, slavery by any other name is still practiced in many places in the world.

Beyond that, I think the larger change has to in the socio-political realm. It's not enough to simply regulate the current environment, big changes have to be made. If you're going to REQUIRE people to be part of your society from birth with no chance to consent to that agreement you have to at least abide by the social contract (We give up some freedom for protection, BUT we also recognize that even the strongest among us are not so strong that they cannot be killed by the weakest, in essence, we are all equals so we agree to play nice) in the traditional sense, but also economically--no one is so important that they deserve many hundreds of times more wealth than the average person, and no one is so low they deserve anything less than a good, comfortable life.

The changes to get from point A to point B are many and varied, things like employee tracking (looking at you Amazon), property taxes (remember when a home was something passed down like 15 generations? Yea, neither do I), and even the societal view as "work" as natural part of life have to go away completely. That's all extremely fucked up shit that too many people accept as normal and okay.

EDIT: I'm gonna stop here before my thoughts spiral out of control lol, I could probably fill a whole book w/ this dicourse, but I'm just kind of stream-of-consciousness-ing it rn.

[Naturegirl1999]

Streams of consciousness are interesting to read. Sometimes I find myself doing that too. They can be interesting to write, too. You make good points. Things need to change. And the path is many simultaneous paths of change, that need to intersect. That could have been worded better. What I’m saying is I agree with you.

[Red Diamond]

I am wondering if this is a language/translation issue?  Canonically the "total amount of labour expended in" the production of something is its cost, and cost is not the same thing as value.  And I think what you term "use-value" usually is just called "utility." But cost is related to value; I have heard it defined this way: cost is how much it takes to make something, value is how much you are willing to exchange for something, and utility is how much benefit you get from something.  These are related but subtly different concepts.  Also note that this is entirely independent of monetary systems -adding money to the equation just adds a dimension, it doesn't change the base principles.

To illustrate the link between cost, value, and utility, let's consider our person digging ore again. If it takes too much time to dig up the resources, the cost (time and effort to dig it up) is not worth whatever else you would be doing with your time and effort: you value your time and effort doing other things higher than the cost of the ore.  But now say you know that if you dig up the ore you can make a shovel and so get even more ore, faster.  Now the cost to dig that initial ore is the same: it takes the same amount of time to dig.  But now you value it higher: you are willing to exchange your time to dig, because having the ore has high utility: once you have it, and make a tool from it, you reduce the cost of digging more ore.   Now people who value ore less (are willing to exchange less for it) are more likely to exchange things for it.

That said, I agree that creation of wealth and/or value is orthogonal to corporate versus individual "ownership" of goods.  I don't actually see capitalism versus communism so much as "economic" systems but more they are "socioeconomic" systems.  That is, supply and demand still applies to socialism as it does to capitalism; marginal utility doesn't change depending on who owns production.  The differences are all in how the wealth is distributed and the social side effects of each. 

To Reelya's point: I hope I did not contribute to the confusion about trading and value.  I believe trading generally does always create value for at least one party in the trade.  In fact the "capitalist" approach to trades is where each party is trying to maximize their own value gained from the trade.  That is, each wants to get the most possible for the least cost.

To the mind of the Capitalist ideologue, value appears as "costs of production" because Capitalism cannot naturally admit that all value is the quantity of labour required to produce a given use-value.  That was the original form of Capitalist ideology back in Karl Marx's day.  Then Karl Marx came along and then they had to ditch this objective concept, replacing it with subjective concepts that were designed to muddy the water, to confuse value and utility even though that it clearly idiotic even at the level of everyday experience. 

People distribute their labour/value according to utility, but that is the only way in which the two concepts are related.  We have a pie (the total labour in society) and we then carve that up according to utility, but not the tiniest amount of extra pie is made during the process of the pie being cut.  Utility decides where the value goes, it does not create any value at all; if something loses utility it still retains it's original value even though nobody wants it.  That is why sellers make a loss if they cannot sell something, the item's value has to paid off even if nobody wants it because the labour used to make it still happened and was not available for other tasks. 

@Naturegirl,

That scenario makes perfect sense to me! However, I think it's the minutiae of production and simple volume of global supply and demand that causes problems, among other things.

My two cents: [and I am not an economist so sorry for what will inevitably very strange thoughts]

I think, conceptually, Capitalism as a function of predicting... demand in products, for lack of a more specific definition, makes a lot of sense. A centrally planned economy, at least on a national scale, is simply not feasible--it's too damn hard for a group of bureaucrats to understand the real needs and wants of a large group. In fact, even in the social democracy that the US kind of practices (and many other countries actually practice to fairly good effect) fails to understand the substance of human need. This may be an obvious statement, but in my opinion, economics =/= the accurate prediction of mass satisfaction.

They have already created centrally planned economies on a national scale and they 'worked'.  That Capitalism is not itself a global centrally planned economy is one of Capitalists favorite illusions about itself.  The shops control what is produced and they also decide simultaneously what you the customer will be able to consume; if they do not forsee your 'needs' then your needs will not be met and there is no magic element to it, it is all human administration and bureaucracy.  The difference between Communism and Capitalism in this matter, is merely the latter wraps it's planning up in illusions of freedom and spontaneity, while simultaneously spreading philosophical errors to make this nonsense believable. 

To sum up, Capitalism is a planned economy pretending not to be; because non-planned economies aren't real, are impossible and cannot exist. 

Ironically the Coronavirus has dispelled the illusion quite well.  When people suddenly decided they wanted to buy loads of toilet paper and pasta in the UK, those items disappeared from the shelves of all the shops.  The Capitalist economic planners, just as the maligned Communist ones did not have the gift of magic foresight to prepare for changes in consumer demand and therefore there were shortages.

[Bumber]

Edit: Or you have a yuge agency / buncha marketplaces / middlemen that would facilitate the trades, throwing their work hour values into the mix.

Or a fleet of drones.

[Reelya]

Yeah. For reference the event that's usually mentioned that planned economies don't work is the "shortages" in Russia in the mid 1970s. They used to show footage of empty shelves with the only thing notably being plastic buckets left.

However, that was absolutely nothing to do with central planning. If it was a planning issue, they should have had too much of some things as well as too little of other things.

https://dc.etsu.edu/cgi/viewcontent.cgi?article=2667&context=etd
In fact the explanation for empty shelves was fundamentally the same as the core explanation for empty shelves in Western countries this year. Russia had issues with inflation, and they didn't want to raise prices because that would have upset their base of supporters. So they put in price controls at government stores. Price controls lock it in so the prices don't respond to changes in demand. This means that, under inflation, the products become artificially cheap, people then start to hoard them, this hoarding leads to typical panic buying, and then rationing is introduced to try and combat the panic buying. We had people queuing for stuff just this year as a result of rationing of goods, with people grabbing some even if they didn't need it and hadn't already panicked because if something is rationed, you feel like you should get your share just in case, it makes it feel like it's running out.

So, what happened in Russia wasn't a result of "shortages" at all. In fact, they didn't have any supply interruptions to cause the problem. That's not what the problem was. They were in fact producing just as many goods as ever before and after the crisis. That's why I'm writing "shortages" in quotation marks. The problem they had was purely a demand-side problem, and it was due to their strict pricing regulations. The reason buckets were left behind as a visible item on shelves is that buckets are not a consumable item, so they have very little value as a hoarding commodity. You're not going to strike it rich as the black market bucket seller during a buying panic.

What happened in 2020 is the same as what happened in Russia. There are laws against price-gouging by supermarkets, so they couldn't just jack the prices up of panic-bought goods this year, so they brought in rationing, 1 or 2 packs per person, that kind of thing. So 2020's shoppageddon in response to the coronavirus, the shortages in Venezuela and the shortages in Russia in the 1970s, all of them involve the same core mechanisms. It's nothing to do with a "planned economy" or otherwise. If you deliberately restrict things so that prices can't change to reflect demand then you either get shortages or gluts, since it's much slower to adjust production output levels than it is to adjust price. The idea that having state-run factories caused the issue in Russia is just a convenient just-so story that industrialists tell because then they can claim we need all factories to be in their hands.

[MaxTheFox]

I firmly believe both pure capitalism and pure socialism are hell. I want a highly mixed economy. The government must control a lot of industry and companies (the more useful ones) while "peripheral" industries must be left to capitalists to ease load on the bureaucracy.

I oppose communism (as in true communism. The USSR had authoritarian socialism) and anarchism too-- as humans can't be trusted to not be greedy assholes.

I would also force many fascist and other far-right (actually far-right. Neither American nor Russian governments are truly far-right, both are normal right) parties to disband under the threat of state violence. The black stain of Nazism must be cleansed from our society.

[Zangi]

Edit: Or you have a yuge agency / buncha marketplaces / middlemen that would facilitate the trades, throwing their work hour values into the mix.

Or a fleet of drones.

Drones are more on the transportation side.  The physical logistics.  It is another value that needs to be taken into account.  Somebody needs to maintain the fleet.  And you still need long-haulers.

The non-physical logistics is finding out what everyone wants and what they have available for trade.  Then connecting the dots, so at the very least, most everyone gets what they want for that day/week/month.
Barter sounds great, but I don't see it being really practical when you have millions of people(and/or 100s of thousands of groups/guilds) in the marketplace, trying to trade their stuff away.   Or the services they offer / for specific services that is close to them.

The crux goes back to, I don't need/want what you have to offer, get me something I need/want and I'll trade. 

1. Currency is the obvious fix to that.  Value is basically currency, but without the ability to use it as an intermediary to exchange for goods.
2. Gov't agency or intermediary marketplace(merchants guild) will take the item and issue a credit.  Which is basically currency anyways, but controlled by someone other then 'you'.  Now, most barter now goes thru the dominant local middleman who need to charge a value fee to keep their services running and store/transport items.

[Reelya]

I firmly believe both pure capitalism and pure socialism are hell. I want a highly mixed economy. The government must control a lot of industry and companies (the more useful ones) while "peripheral" industries must be left to capitalists to ease load on the bureaucracy.

That's why I think a lot of creative industries couldn't really be done as purely public companies. Let me give the game industry as an example.

Most game companies go broke for example. Only a relatively small amount of them succeed. So, a lot of risk is taken by individuals who want to become game programmers / game designers. If you nationalize the profits, you also have to nationalize the losses. That's why it's wrong to look at only the successful game creators and companies for example and say "those should have been public profits!" it's because we're only looking at the successful ones that made money and not taking into account the ventures that lost money. (this is called Survivorship Bias). You'd have to justify the losses to the public purse from making things that fail as well as the profits to the public purse from things that succeed. If it was public, the type of games being made would be very different, and probably a lot less diverse.

One argument might be that if the entire industry was nationalized, then the risks could be spread out. Then nobody would go broke or be forced to leave the industry, right? A great thing. Until you realize that then, game development would be a life-long guaranteed job that people who already have those jobs would hold onto tooth and nails. The average age of game developers would shoot way up and you'd find it's suddenly very hard for anyone new to break into the industry. You wouldn't have had people like Carmack and Romero coming along and disrupting the market with their innovative game design back in the early 1990s. That just would not have happened under such a system.

To get funding, every game would have to go through layers and layers of approval from majority-rules elected officials, so pretty much everything would be what the majority already think they want. Imagine if the development budget for every game ever made came down to a majority vote of congress. Niche things that appeal to a small number of people just wouldn't get created and things that would get created would be focus-tested to appeal to the majority at all times. It's hard to see how "Indie" anything could really get off the ground under such a system. It would be illegal for you to market your own products. All you could do is put out free demos and hope that you get an interview for the public game-developer org to pick up your title or give you a job.

[McTraveller]

After reading some of the above posts, I've realized that much of the malaise of modern systems comes from the fact that the concept of economic loss has been twisted.

First, some definitions:
 Wealth is goods, the ability to produce goods, or the ability to perform services.
 Services are activities that are performed that may transform or move physical objects or produce social effects.  I think "labor" may be a synonym for this definition of services.
 Social effects is a huge generic category here and covers things like emotion, entertainment,  government, security, etc.
 Cost is the amount of resource and service (labor) required.
 Value is the subjective relationship people use to weight economic decisions.  Here's a secret: money most closely represents value, not wealth!  Argument: inflation.

Spoiler: Related to previous discussions about trade (click to show/hide)

I would say that trades conserve wealth, but they do not conserve value.  Value changes over time, space, and from person to person. Trading an apple for a banana does not change the apple an banana.  But one day you may have to trade two apples for a banana - the value changed.

In the purest sense, there is only one type of economic loss: the destruction of wealth.  Anything else is not really a loss but is an opportunity cost, and that's an important distinction.  One big problem with capitalism is that it treats opportunity cost as a loss, when it really isn't!

Here are some examples of economic loss:  A hurricane comes and floods a city. That is economic loss: buildings are destroyed.  A virus takes out a population - the ability for people to make new stuff is reduced.  Schools close: education stops, the ability to perform services is reduced.  You offshore manufacturing: you lose the ability to build, operate, and maintain state of the art factories.

Here are things that are called loss but are just opportunity costs: investing in a failed game company. Buying into bitcoin at the wrong time. Having to sell your house for less than you paid for it.

The reason those things are not losses is because no wealth was destroyed.  I will allow that perhaps you can say that some activities today will result in more wealth in the future than others. But that is why I define it as opportunity cost, not loss: it's like saying music piracy is a "loss" - it is not a loss, it is an unrealized gain.  There is a massive difference.

So what happens though? Our economic system turns those non-losses into local hardship through the mechanism of debt.  Our debt system is messed up - it allows essentially infinite downside for finite initial investment.  And it is truly non-physical; it's just a social construct which means it can be changed.  You cannot have physical debt after all: you cannot eat food that doesn't exist.  So any social construct that says "I'll let you eat this apple today in exchange for two apples in a year" is bound to cause problems one way or another.

Spoiler: long example (click to show/hide)

Consider a simple example:  You and I are both farmers. You have a good idea to make a plow to make life easier.  I agree to work 1/10th of your field for a year so you can take that 10th of your time to make the plow. Now - I could put you in debt and say "You have to pay me 2/10ths a field yield for 1 year in exchange."  The idea being that if your plow works, you will be able to easily make that back and be happy to pay me.

If the plow works - great! Everyone is happy.  If the plow doesn't work - well you are sad, because you either get 8/10ths of your field next year for the normal work or you will have to work harder to make 12/10ths to have your usual amount because you are giving me 2/10ths of it, or you will presumably get sent to jail or whatever for not paying the debt.

But what if instead of making that debt - it's treated just as an investment? Instead of saying "you owe me 2/10ths of a field of yield" instead it is "if the plows work, I get to use it on my field too."  So the investment is a little extra work, but if it fails - the end state is no different than the first: two fields, no plow; everyone still owns their fields, etc.

The concept of debt is tied to most economic problems. Investment is definitely necessary, but debt is a non-physical problem.

[MrRoboto75]

I'll pay you on Tuesday for the hamburger I received today.

[Max™]

Seems nobody noted that if I did the whole week for a shovel and week for a well vs four weeks for a well thing, I could then dig two more wells before the other guy finished his first one.

Not sure what insanity infected sort of bullshit it takes to believe improving the effectiveness of labor reduces the value of labor, but maybe it's easier for me to avoid because I just default to distrusting beliefs to begin with, but no, looking at it in a reasonable and sane fashion, MY labor is more valuable to ME if I make it more effective.

Capitalism is concerned with situations where others benefit from and think important their value of my labor, and perhaps that is where others were getting mixed up, but that is patently absurd to someone free from such brainrotting ideologies.

I may have to tolerate it due to it getting here first, but I'll be damned if I accept it and allow it to dictate my reality or my thoughts.

[Reelya]

Not sure what insanity infected sort of bullshit it takes to believe improving the effectiveness of labor reduces the value of labor, but maybe it's easier for me to avoid because I just default to distrusting beliefs to begin with, but no, looking at it in a reasonable and sane fashion, MY labor is more valuable to ME if I make it more effective.

Most likely it comes down to Motivated Reasoning, which is something we all need to be careful of. It can lead to types of double-think, which is explaining similar things in contradictory ways when they either support or don't support our world-view. So it's not about that idea, it's probably about some other bigger idea, which that idea was supporting.

If you couched that concept as part of a pro-capitalist argument then probably you wouldn't get a peep out of anyone about it, it would be accepted as self-evident, whereas if that concept came up in a discussion of a model of socialism, then suddenly people would be trying to poke holes in the concept as some form of "gotcha!" moment. If the exact same idea came up in a context they supported, they wouldn't make, or even accept, the validity of those same objections. Note how when I said that trades happen for equivalent value, in the context of explaining market socialism, then suddenly that was perceived as some kind of fatal flaw that would cause the entire system to collapse. Whereas if you were explaining "efficient free markets" and made the same point about how in an efficient free market all trades are between rational actors for things of equivalent value, then if you asked the same person to elaborate on that they'd probably say it's a linchpin of the system, and a proof of the true efficiency of the system: after all the free market came up with an efficient price discovery method such that both sides got their fair value in the trade, right? Note I'm not targeting anyone here, it's just an example of how these kinds of things can play out.

Sometimes this can manifest in different ways, such as rejecting a supporting idea for being too unspecific or too specific to be a valid point - even flip-flopping between these complaints. A sure sign of motivated reasoning is if someone said something was too unspecific, so you gave a specific example, and now the claim is that the example is too specific. If you find yourself defending a point for being both too much of something and too little of the same thing, you're probably dealing with someone who is using Motivated Reasoning rather than an open mind.

For people who are free market pro-capitalists this can often manifest in certain ways:

"self interest" is seen as the highest economic value, as long as it's the employers doing it. The Free Market is only truly efficient when everyone does what's in their own best interests. Things will generally approach the optimal outcome as long as we do this. Capitalists are justified to secure their self-interests by any means necessary as the way that maximizes overall total wealth. Thus we need less regulation on businesses.

However, as soon as workers start to do things that they believe are in their economic best interests, we say "what do they know", "they're greedy", "they don't know their own best interests", "they should put the company first" and that strikes or other actions are "holding the country to ransom" for "greed". Thus, we need stronger anti-union anti-worker organizing laws.

However, haven't we already been told that all that's wrong, and that everyone working in what they believe is their own best interests is what leads to an efficient economy? Why is it suddenly when it's "workers" that the most efficient arrangement is some type of subservient communist-like behavior of putting the collective first? And suddenly, we need strong regulation and government intervention for that thing.

[Urist McScoopbeard]

So the problem is precisely the balance of the distribution of labour/energy/man hours/whatever between self-interest and common interest, right?


Also to reply to Red Diamond,

While not really the gist of what I was saying, I'll point out that the failure of human beings to predict or otherwise convince the proper authority figures of looming disasters and other, less drastic large scale changes--and in turn act on that knowledge does not reveal Capitalism to be a planned market economy in disguise, only that in the examples given human beings are simply more reactive than predictive when it comes to... adjusting to change? The difference between a free market economy and planned economy as far as I can see is who is doing the planning, so to speak, it's all mostly reactive (unless you want to get into marketing, and targetting, and etc.)

[Reelya]

It's a little bit different to that. Remember that it's not capitalists making the pricing decision, it's a distributed network of agents all making pricing decisions in response to their own local supply/demand signals. For example, a local shopkeeper can change his prices based on local and short-term changes in supply or demand. All the shopkeeper "knows" is his own inputs and outputs, and he uses those signals to adjust both supply requests and prices. The information is local that's why it's not "planned". A "planned" economy means that you make local decisions based on non-local information, which isn't happening here.

He might run out since he may not be able to order new stock fast enough, but then you just go to the next shop along, and the first shopkeeper knows he should probably increase the amount he's ordering from the wholesalers. If he can't increase the amount he's ordering, say because the supplier says there isn't enough to fulfill that demand, or if his shop is nearing capacity for what he can throughput, then he'll raise prices - as long as nobody can undercut him, in which case he'll just lose that extra business.

EDIT: for example, a local shopkeeper gets 50 watermelons a week, but recently 100 people per week are coming into his shop asking for watermelons. So he calls the supplier and says "you gotta send me an extra 50 watermelons per week". If they have another 50 watermelons to give him, all is good and he won't raise prices - he already worked out the optimal price to sell a watermelon at given the effort required - leaving the price alone and just getting more is guaranteed to double his profits, but raising the price is a lot more risky. If he's even 5 cents more than the next guy, he'll lose most of his business. Only if he can't get more watermelons, then he'll think about raising prices - the reasoning is that if your store can't get more watermelons then neither can the next shop, and if so many extra people are asking for watermelons, there's a shortage everywhere, so raising prices is not risky, in that situation. Conversely, if he's not selling that many watermelons, or if people come in and check out the watermelons a lot but don't buy them, he could drop his prices to make more money. This is how it works, and why it isn't a "planned economy" by another name. It's not planned, because all the information signaling is locally distributed through the network.

The point there is that the consumer can choose their retailier, and the retailers can set their own prices, and the retailers can choose their suppliers, and those different suppliers are also free to choose their pricing, along with workers being able to select from multiple employers, and each employer being able to negotiate with each employee, individually, for how much money they're going to be paid (leaving aside bargaining power: but there is still bargaining going on. That's the point). So you can say it's "planned" in that decisions are being made by someone, but that really goes against the nature of what we actually mean when we say "planned economy". What we actually mean is some architect or organization with a vision of how the whole is going to work. That doesn't exist in capitalism. It's like calling the internet a centralized network, because there are servers.

[MaxTheFox]

-snip-

This is why games and art in general should be left to the free market.