TFA falls in the first category as it makes an argument (which I believe btw) that interest rate policies in place result in net transfers of wealth from poor to rich since the 80's.
I could also believe arguments that free market capitalism is a form of local gradient ascent of the GDP landscape that does anticipate or react to global or systemic risks like global warming.
I could also believe an argument that our metrics of societal prosperity don't measure what we really want, which is a moral judgement about whether the society is better or not. E.g. if all the wealth gets concentrated in the 1% and the remaining 99% becomes figurative or even literal slaves, that's probably a worse outcome even if productivity increases. The problem is that while it is easy to cook up such what-if thought experiments, it is not easy to quantify the result into a mathematical model of moral social utility. Come up with such an objective, measurable metric and economists will start using it. Seriously try coming up with one and you will see why no one has. Moral philosophy is still a field of philosophic arguments, not solved problems.
> The problem is that while it is easy to cook up such what-if thought experiments, it is not easy to quantify the result into a mathematical model of moral social utility.
that said... you seem to be implying that we should do things only if we can make decisions using a well understood objective model with easily measurable inputs and outputs. but if that model leads us to a world that i'd characterize as a moral travesty ("all the wealth gets concentrated in the 1% and the remaining 99% becomes literal slaves"), i'll take my chances with the thing that's hard to quantify that might get us a better outcome. and maybe that'll lead to even worse suffering. but seems worth a shot.
EDIT: as a deeply logical person who greatly values the scientific method, i understand the desire to come up with a model of morality that has strong mathematical foundations, which can have its tenets checked against empirical evidence to provide us with something closer to a mechanically produced answer to a moral question. but i don't think we're there yet. and i think to some degree, it's fundamentally impossible, but i think we could get closer, and i think beyond some core moral tenets, it is best to optimize in a utilitarian way. but before we start the optimizing, i want to prevent things like slavery, or even de facto indentured servitude. i wish i could provide you with something like a mathematical proof of why indentured servitude is bad, but i'm going to keep operating on the premise that it's bad, despite the fact that i can't prove it in a mathematically rigorous way.
It goes by many names
Unconditional Basic Income
Negative Income Tax
Social safety nets
Single Payer systems
Or various Welfare schemes
It may not be obvious, but your post is not critiquing capitalism. Free-market capitalism is solution in the space of how we decide to allocate scarce resources. It stands mostly in contrast to various forms of collectivism and central decision making (socialism).
Take UBI/negative income tax since it is most relevant to the linked article. UBI is the equivalent of saying that rather than construct our incentive models in such a delicately balanced way as to target a specific value of τ, the wealth redistribution constant, let's just forceably redistribute wealth by that amount. It's only non-capitalist in the sense that any form of taxation and central governance structure is non-capitalist, but of possible welfare schemes it is probably the most capitalist -- it punts the issue of how those funds should be spent and lets their new owners decide.
If it makes you feel better I said "most non-sociopaths want A", which doesn't imply that you are one if you don't want A. Nor does it imply that you are not a sociopath if you want A. But seriously, if you are ok with the poor running out of resources and starving, or even want it, then you'd be considered a sociopath.
"Free-market capitalism is solution in the space of how we decide to allocate scarce resources."
Exactly, which is why "we" is the society, and "we" usually decide that every human being is entitled to have their minimum needs met. The one who disagrees is labeled a sociopath - that's just how it works. Some nihilists for example may have a completely logical theory as to why people, like companies, should be subjected to market forces. "If animals die from hunger why not humans? If you don't work, you don't eat." But we don't reason with them, we dismiss them because our basic values are different. Do you understand now that I chose my words carefully?
And what are those basic needs? Potable running water goes to your sink. That's not required for survival. Most societies carried water from the river. Romans had aqueducts but they didn't go to people's houses. Child mortality is down because of advancements in science and medicine.
Who do we pay for all these things? The scientists who contributed to the growing snowball of knowledge are long dead. We are lucky to have been born in the 20th and 21st centuries and benefit from the amazing wealth humanity has built up.
Capitalism deals with conferring PRIVATE PROPERTY rights to individuals and privately owned organizations of any size. PRIVATE PROPERTY IS A MONOPOLY RIGHT TO EXCLUDE OTHERS FROM THE USE OF A RESOURCE. Show me that this is always the best way to allocate the resources. Is selling a lake to a capitalist the best way to make sure the lake is not polluted? Is enforcing the monopoly right of an inventor to threaten others at the point of a gun (see what I did there) to extract rents from them for building on their idea the best way to promote scientific progress and software and drugs?
Only if by "we" you only include progressive liberals and ignore the other half of society that gives preference to individual responsibility over welfare.
You obviously put a lot of time into your reply and I'm sorry to not address anything else, but so long as the "debate" is taking controversial political positions as axiomatic, there isn't really any point to continuing this further. I bid you good day, sir.
I've had this happen a lot. When someone is ideological they think that only their position is axiomatically true and everyone else is making assumptions. I understand how you feel, but this exceptionalism is keeping you from engaging in good faith with other viewpoints. Anarcho capitalism is the best, our system is the best, etc. You never seriously challenge your assumptions and that's why you sincerely believe that "capitalism is as inevitable as gravity."
I gave you lots of good info above as a starting point but happy to discuss substance if you ever want to. Good day!
I'm curious about one assertion you made in particular:
>it is not easy to quantify the result into a mathematical model of moral social utility. Come up with such an objective, measurable metric and economists will start using it.
I agree that this is a hard problem, but I can't help thinking that we are already pretty close to at least being able to at least measure symptoms of an "immoral" economy -- like if we couldn't graph a function, but COULD graph its derivative.
I'm thinking of metrics we already have: overall distribution of wealth (and its change over time), inter-generational economic mobility, rates of poverty/hunger/homelessness, access to essential services, educational outcomes based on family income, you get the idea.
We know having money is a huge leg up, we know a child whose parents make $18,000 a year doesn't have the same chances (or even access to comparable education) as a child in an affluent family. I'm wandering off into other, more contentious debates, but my point is that there are plenty of metrics we already have that we can point to and say, "This is a bad sign. This is not a good number, and its badness is self-reinforcing and will only get worse." Just look at productivity: it's gone up consistently, year over year, for decades, and yet the real value of wages hasn't moved. SOMEONE is profiting off of that surplus value, but it certainly isn't the workers.
At that point, the arguments begin about how to fix those metrics, and we're back to square one, but I'd argue that there is plenty of evidence for people who want to make the case that the current incentives in American capitalism are unfair, if not unjust.
Yes it is. Economics is a social science, like psychology and archaeology. The empirical precision of physics and chemistry are not required for a discipline to be scientific; standards of rigor and reproducibility in methodology are. Moreover there is a significant amount of rigor in much of economics, despite widespread memes that the entire discipline is wanton fluff.
That aside, we encounter flaws and unresolved problems in many theories in every scientific field of study. A coherent argument can be posited that denying the supremacy of capitalism as a broad, categorical model is analogous to denying that the Earth is round. I don't necessarily endorse this view, but there is enough evidence to construct a sane backing for that position. It's not absurd, even if it's not absolutely correct. We need not understand everything about gravity or resolve all issues pertinent to its existence to more or less agree on the main points. Similarly, for specific definitions of social stability, productivity and happiness, capitalism is demonstably superlative given the implementation track record.
Efficacy is more the word I would have gone for, compared against other systems we have historical evidence for.
How about Science? How about Wikipedia? How about languages, is someone paying someone for using a word?
Because these systems have led to a lot more advancement, when people can collaborate and add to a growing snowball of work.
Wikipedia beat Britannica.
Linux + BSD beat Windows.
WebKit beat IE.
Apache and NGinX beat IIS.
Most languages are open source.
And so on. And yet in drugs we still have the patent system. And the superbugs are back because we run out of antibiotics. And the USA which has the most patents also pays the most per capita for the same drugs. Who wins from these monopolies?
And before you say that Intellectual Property shouldn't be considered property, throwing other anarcho-capitalists under the bus, consider this: if people shouldn't own ideas, should people be able to own large bodies of air, water, land, etc. that they personally will never use? Will that make them more or less likely to become polluted for example?"
The same John Locke who popularized the idea of homesteading or "mixing one's labor with the land" as anarcho-capitalists' favorite way to theoretically paper over acquision of natural resources in their theory also emphatically said that a man shouldn't own too much land.
Yet that's what Capitalism is. At its core it is about granting PROPERTY to private entities and enforcing it. PROPERTY IS A MONOPOLY RIGHT TO EXCLUDE OTHERS FROM THE USE OF A RESOURCE. And pure unfettered Capitalism recognizes no limits on who can own what, as long as the what isn't other people.
Look at what happened at Lake Baikal the largest freshwater lake in the world, and tell me how capitalism improved the use of that resource.
The commenter said that capitalism is unequivocally the best system, and to say otherwise is like denying that the earth is flat. Under what metrics is capitalism the best? Unless we can all agree on the exact same set of metrics with the exact same prioritization, then the question of whether or not capitalism is the best system is an inherently political question.
The commenter mentioned maximizing GDP (as would most economists). GDP is a heavily flawed metric that gets way more attention than it should. Apart from broken window fallacy and such, it says nothing about distribution of wealth, living conditions, happiness, effect on environment, non-monetary output (eg. open source software), technological advancement, social mobility, etc. It would be impossible to reduce any of these into a single meaningful metric.
The "rigor" you speak of in its models are comically oversimplified to the point where they're often completely divorced from reality and useless. One only needs to look at the atrocious track record of economists to see the uselessness of them. It's called the "dismal science" for a reason.
Your argument about the empirical validity of economic models would be more persuasive if you could cite some of those models that are in common use in the profession, and formulate an argument about how they oversimplify reality.
I think at this point the burden of proof is on economists to justify their profession. They completely failed to foresee the recent financial crisis, with the so-called "Great Moderation" and economists like Ben Bernanke saying the depression problem has been solved.
* Theory of competitive advantage is flawed and doesn't hold up to reality. Free trade is not unequivocally good. I wrote about it in this comment https://news.ycombinator.com/item?id=15159057 , but I'm basically parroting economist Ha Joon Chang who wrote multiple books about this
* The assumption of individuals being rational and utility-maximizing is false (eg. charity, stock market).
* Efficient market hypothesis. See any financial asset bubble.
* Austerity economics. The severity of the Great Depression was exacerbated by the government's austerity response. Yet here we are 80 years later demanding austerity from Greece and such.
* Money multiplier http://positivemoney.org/how-money-works/advanced/the-money-...
* Phillips Curve
Steve Keen wrote a book called "Debunking Economics" that explains theoretical flaws in the basic supply/demand curves that are the foundation of economics, though I'll admit I didn't read the book.
Ultimately though, neoclassical economics is just too damn oversimplified to result in many meaningful actionable policy takeaways. It's too constrained by its owned rigid model of how economies are supposed to work, and thus too free market dependent and status-quo preserving.
But almost every argument you bring up, was brought up a decade ago by economists, and is now considered party mainstream economics literature.
Unemployment rate - Every economists knows this, unemployment rate is not the only measure of employment they use. Another one is the "prime age employment population ratio" which doesn't suffer from these same problems.
GDP is again only one measure. Here is the OECD talking about how GDP is only one measure of life and well being. http://www.oecd.org/statistics/measuring-well-being-and-prog... So economics is well aware of this.
You say they failed to foresee the financial crisis, but western medicine fails to cure cancer. That doesn't mean Western Medicine is bunk, because it's still your best shot at not dying of disease. And it would have been far worse if we didn't know about fiscal or monetary policy.
It's true free trade is still thought of as unequivocally producing an increase in efficiency and GDP. But the negative effects are starting to be researched.
A minority of economists think individuals are rational and utility maximizing.
EMH is again something economists are split about, and most economists are have much more nuanced view of this that doesn't prevent asset bubbles.
And with the money multiplier, there is an argument about the mechanism. But that is different than saying that money isn't multiplier, or that reserve ratios don't have any influence on the monetary base.
Philips curve describes a correlation between inflation and employment, a relationship that holds 90% of the time.
It seems like your problem is with a straw man Chicago school hardliner(not for instance Paul Krugman), not with the majority of the field of economics which pretty much agrees with you on everything(besides free trade but this is changing). And maybe Ha Joon Chang is right, but there is also a lot of evidence on the other side that free trade is very beneficial to economies. It's not an open and shut case against free trade.
Remember economics is really hard. Especially macroeconomics(the portion you are critical of) which is probably the hardest science there is. There are no controlled trials. You have statistical experiments where n is maybe a 100, and all trials are hopelessly confounded.