28 Comments
May 16, 2023Liked by Jeremiah Johnson

My 15yo has taken to arguing economic systems with my wife and I (both economists). There is a strong Ugh, Capitalism vibe. OTOH, my 15yo is debating economic systems. I'll take the W.

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If the kid is actually trying to learn about economic systems, that's a W. If its just 'Dad, capitalism is the reason Taylor broke up with meeeeee' then its an L.

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Heh. Fortunately for me, it's the former. His weakness is that he can't wrap his naive mind around the fact that evil is the root of all money.

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Have you read any C4SS or Markets Without Capitalism? Might interest you.

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I haven't read much, although my impression of C4SS isn't particularly positive. Is there anything in particular I should read from them?

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In capitalism wealth pools at the top. The folks at the top use that wealth and power to manipulate markets and influence policymakers. This is why we have antitrust laws to guard against that sort of thing. Those antitrust laws haven’t been heavily enforced for like 40 years. Wealth began to use its power to buy our politicians after the Citizens United ruling. The corporate consolidation of America has led to de facto oligopolies where competitors can all raise prices tacit parallelism style under the guise of inflation — it’s also led to a situation where the closure of a single factory caused formula shortages for the mothers in America.

I get some of your criticisms of some of the stuff you posted here. But seriously, you don’t have to look far to see that corporatism is killing American capitalism. These things can be fixed, but not by denying there’s a problem that is, at least partially, related to capitalism. It needs some tweaking so that the people controlling the money do not control every aspect of our lives.

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This comment is a great example of the issues discussed in this piece. Your complaints in the first part are poorly argued and unsupported. We need some more examples of how not enforcing antitrust laws has cause concentrations in many industries! The really weakness of this paragraph is the reference to the formula shortage which, while maybe not caused by, but definitely exacerbated by *government* policies which limited the importation of formula from other countries!

You further weaken your argument by saying “corporatism is killing American capitalism “ so is it corporatism or capitalism that’s the problem? And what tweaking do you propose? Just like in the examples in this post, you are not providing solutions just hand waving at possible “tweaks”.

To limit the discussion, what tweak to the US economic system would have fixed or prevented the formula shortage?

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Maybe breaking up the industry oligopoly so that there are more production facilities so that the closure of one doesn’t threaten the whole chain. Corporatism is the problem, and an eight year old could figure out that capitalists buying our politicians is the problem, so your calling my paragraph weak just makes you look like a shill.

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Well we first need to establish why the industry is an oligopoly so we dont end up here again. It's hard to start a new manufacturer of baby food! There are lots of (probably justified) regulations on ingredient content and quality as well as lots of regulations on advertising and labeling language. But there are other manufacturers over seas in europe and elsewhere that aren't able to sell here because they dont comply to our regulatory regime or choose not to pay to have their products certified here. Before we break up current manufacturers (which doesn't guarantee there would be more supply or that the industry would be less fragile to supply chain shocks) we should ask how we can bring already existing manufacturers into the market. Maybe the existing manufacturers have "bought" politicians, but thats hardly a problem of capitalism. Or maybe many complex forces have come together to produce a regulatory environment which is hostile to new entrants, which is again not a problem with capitalism.

I'll also note you have again blamed corporatism instead of capitalism. I happen to agree with the general point that corporatism is the problem! But maybe we just disagree on what changes we should make. And I don't think "break up the industry" is enough of a plan. How many manufacturers is the optimum number of manufacturers? How big should they be? How do we handle a company that wants to enter the market? Which manufactures do we break up, into how many pieces? How should the assets be broken up? I don't expect you to have detailed, exact answers to these questions (I think they are impossible to answer to be honest), but maybe you have some general ideas or estimations that would flesh out your plan some?

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Wow. Thanks for such a thoughtful, dare I say, wondrous response. I thought you were going in a totally different direction, but I see the logic you’re using here. I do agree that these are not problems inherent to capitalism as a system, but there’s the thing as a system and then there’s how it plays out in practice, and I suppose my true gripe and fear is how it has played out in practice.

Ultimately, what I’ve thought of would also be quite expensive and hard to organize, and difficult to protect from abuse and fraud, but theoretically, government could become a champion of smaller businesses and help destroy these barriers to entry by providing vouchers for business-related legal services, tax advice, the myriad things that go into running businesses. Perhaps going as far as providing low-interest loans. Basically instill and support more entrepreneurship in the population and balance the scales. Perhaps it can be limited to industries of significant import to America, either as outlined by Congress or perhaps left to the discretion of the President.

I am open to other solutions. This is just what comes to mind. Unfortunately, without institutional support, these ideas will probably never be explored or even debated, so I feel a little deflated writing this. But again, thank you for responding and letting me see things another way.

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"here’s the thing as a system and then there’s how it plays out in practice, and I suppose my true gripe and fear is how it has played out in practice"

This is a great point! And happens with almost every system/ethos/philosophy/etc it seems.

I think we pretty much agree on where we are trying to get but come at it from different ends. I focus much more on removing the existing barriers vs creating (new) programs to promote new entrants or support smaller ones. Every time i try to think of some act the government (at any level) could take, i just think of all the downstream consequences or upstream barriers. It's so complex I don't know how you move forward in small steps but I also don't think tearing things down and starting over is good either - thats just asking for violence and dictatorship which to me is much worse than the broken situation we have now.

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There’s no doubt about it. You’re right about that. We need to be very careful not to give the government power to persecute.

Maybe it all goes to education. I think if Americans were taught about forming corporations, some of the ways money gets raised (sale of shares, borrowing), and small business entrepreneurs were given some serious tax cuts, we might see some movement in a good direction. As much as I am hostile to corporatism, I do believe the business corporation is a great and powerful invention that can be leveraged for good.

There are also ham-handed ways of doing it like giving the government more power to intervene in private interests, but I think more along your lines, that could lead to violence and dictatorship if not managed incredibly well.

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Everyone, please, look up the word corporatism. It does not mean what you think it does.

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As soon as I saw the headline, I thought of the Bono sticker.

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Good article. I think it's fine to complain about a system while also taking part in it. I have a high paying, white collar job, but I don't like seeing people living in filth on the street while endless amounts of Teslas and SUVs roll by. The contrast makes me feel... icky. Not saying that homeless people didn't exist before capitalism, nor am I saying that there is a better system, but when you see a disparity like that it's easier to say 'Ugh, Capitalism' instead of 'I dislike observing huge wealth disparities.' Maybe I'm part of the problem.

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This article has suddenly made me connect the dots for something I’ve been noticing for some time, but until now I’ve merely puzzled over. I watch videos on YouTube, and I often read some of the comments. More and more I see commenters blaming “capitalism” in situations where it makes little or no sense, or at the least portrays a very poor understanding of both politics and the economy. Sometimes the comment is several sentences, blaming capitalism for whatever the subject of the video is, sometimes for reasons or in contexts that baffle me. At other times the entire comment consists of nothing more than the word, “Capitalism”, as if that explained everything. Sometimes I have let myself get pulled into replying, writing something along the lines of, “Do you realize that capitalism, for all its faults, has created more opportunities, more wealth, more jobs, more prosperity, more innovation than any other system humans have come up with so far? It’s imperfect, but which system is better?”

The other day I watched a short video of interviews of young people in Japan answering questions about Japanese customs of what is considered good manners in Japan and how well foreigners understand such customs in Japan when they visit, and what they think of the customs of other countries. (I know, but it was actually kind of interesting.) But there were comments that just said, “Capitalism.” Huh? But after reading this, now I get it!

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While I agree with this article that many critiques of capitalism today are of this variety, I actually think there's a more steelman way of conveying how many people feel (I don't think it falls into one of the three buckets).

People feel like the modern world over-indexes on money as the main form of measuring self-worth. When working in tech, there are these metrics called Key Performance Indicators (KPIs). Every major business unit has a handful that are reviewed weekly and they are intended so that the leadership team can review a manageable subset of KPIs every week and measure the performance of the individual teams. The tricky part is getting these KPIs right *and* knowing when to change them. There are perverse incentives at stake whenever you try to distill complex phenomena into simple numbers (sometimes you get people hacking customer service metrics so that unhappy customers don't even leave feedback). It is important to do it otherwise it's impossible to measure progress.

In the case of society, those numbers are often bank balance and income for individuals and GDP/growth rate for nations. It gets very hard to separate out money from worth when the KPIs are set up this way. In most companies, you can alleviate the pain of bad metrics by re-evaluating KPIs once in a while, throw away the ones that don't make sense and adjust how things are measured. In the case of society, we've had the same KPIs for over 400 years and it shows its age.

Could be a cope in itself but we've had human society for over 4000 years and capitalism for only a 400 of them so critiques will come, most will be bad, some will be valid and a few will help guide us to enough change that future systems may look very different than what we have now.

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I think part of this is coalition management. If I say that health care is too expensive because capitalism, it means I'm not saying "health care is too expensive because doctors charge too much", which doctors might have problems with.

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See also: “the deep state,” “the patriarchy,” “whiteness,” “loss of family values,” etc.

The jerseys that the people wear are different, but the lazy argumentation is nearly always the same.

What others am I missing?

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Fine, I’ll bite. Capitalism is an economic system in which the means of production are privately owned. This leads to an exploited working class that have to sell their labor to the ruling class in order to survive.

While capitalism didn’t cause many necessary evils of life like cancer, it exacerbates these problems on a structural level: for example, megacorporations lobbying for looser environmental regulations and releasing carcinogenic chemicals and pollution into the environment that increase cancer rates, or a for-profit healthcare system forcing many Americans to go into life-ruining medical debt to pay for cancer treatments. Can some of these problems be solved by better welfare and social reforms under capitalism? Sure, but the system itself is structured so the majority of wealth is at the top (with the richest 1% of people having more wealth than the bottom 50% put together according to Oxfam) and the people at the top have all the power and the incentive to prevent those reforms from happening if it’ll cut into their profit margins.

There’s a salient point to be made here about the trend-ification of anticapitalist sentiment, and how capital subsumes its own critique into itself, but that point can’t be made by someone who fundamentally agrees with the captitalist system that’s wreaking devastation on this planet and all its inhabitants.

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"they’re upset at the demands inherent to living life in the modern world."

I think this could just be shorted to "they’re upset at the demands inherent to living life" because many, if not most, of the things they are complaining about would still exist just as much at any other level of technological/economic development -- most people in a hunter-gather tribe don't get to sit around practicing their preferred form of art all day, they're going to be out digging for root vegetables and such.

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idk I think that some of these problems are capitalism's fault. take Mondays - the problem with Monday is not simply the existence of Monday, but going back to jobs where people are split into laborers and owners of the means of production, and those owners have an economic incentive to take as much labor from the laborers as possible for as little money as possible, in the pursuit of infinite growth. yes, labor still will exist post capital, but the goal is that with equal treatment for everyone and no incentive to exploit people doing labor will be significantly less painful. of course, there are much better reasons to destroy this exploitation that is fundamental to capitalism than "i hate Mondays" but i think it's not completely wrong to say that the reason Mondays suck is because labor is exploited. though i will say i do agree that people blame capitalism for things without really knowing what capitalism *is*, which is obnoxious and can lead to bad arguments

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In essence I think people feel exploited and alienated today due to our current economic system, and they know just enough to blame capitalism, but not enough to express how or why, or to think up short or long term solutions

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I've been seeing more complaints about this recently, so maybe it's past its peak.

Maybe the new thing to blame is "the algorithm" or AI?

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Pemex is still a for-profit business. Why do capitalists pretend it's not capitalism if a government is involved? It's no different than if Pemex were wholly-owned by a private equity firm.

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Being able to use violence to achieve your goals is a difference.

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As if there is no history of corporations using violence to achieve their goals? Hrm.

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