Comment by roenxi | Hacker News Reader

Comment by roenxi | Hacker News Reader

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I enjoy defending capitalism; I think the principle of funneling resources to people who create more resources is sensible.

It needs to be underscored that whatever this is, it isn't capitalism. Exactly which -ism it is I know not; but it is a terrible idea.

Central banks interfering in markets can only be to raise prices long-term. They aren't going to interfere to drop prices, the political pressure is unbearable over the medium term. I'l jump to the American Fed because I know a bit more about it - they haven't been able to sustain interest rate rises in my lifetime [0], there is a very clear downtrend.

This sort of activity in turn disables all the signals used to vent incompetent companies from the system. A direct result of these policies by the BoJ will be companies that take in resource, and churn out value that is less than the inputs. It is unsustainable, stupid and destructive. There are no excuses for it.

I lump the US Fed's QE programs into the same basket, but at least they muddy the waters enough that the links aren't obvious to a neutral observer. The Bank of Japan's activities are sick.

[0] https://tradingeconomics.com/united-states/interest-rate

A very similar argument was presented by Andy Haldane of the Bank of England, discussing the reasons for stagnating productivity in the UK.

Centrally controlled misallocation of public resources on a large scale. A particularly nasty form of Socialism.

It works for China.

No it doesn't. It was the root cause of the Global Financial Crisis in 2008, and will be the root cause of the next financial crisis which is definitely coming. It doesn't work.

The root cause of the 2008 GFC was improperly risk rated mortgage backed securities and associated credit default swaps, not China’s central economic planning.

Your brain isn't working too well today. Try reading the original comment that you replied to. Centralized misallocation of public resources is the root cause. The banks took insane risk only because they knew they would be bailed out by taxpayers money, which is a forced redistribution/misallocation of public resources.

The final straw is not the root cause.

Funneling resources to people who create more resources does make sense, provided the assumption that those specific individuals are the key ingredient to the resource creation.

From what I understand, the people you defend capitalism from tend to assume that those individuals themselves are less relevant than is their place in the larger system.

Does this summary of the arguments line up with your experience?

Genuinely productive people are pretty rare (1 in 100 type numbers). I can't claim to know exactly what a debate opponent is thinking, but usually I assume:

1) Most people are more involved with the famous and common 'bullshit jobs' instead of the much fewer super-productive jobs - like a couple of farmers who can feed orders of magnitude more people than just themselves. Maybe they haven't interacted with the parts of the economy that do genuine wealth-creation and don't understand it.

2) They don't accept that incentives matter more than inherent nature, so they believe the productive will continue producing even if the incentives to do so are reduced, so resources can be redirected to 'those with needs'.

The second is a pretty defensible position, although obviously I disagree most of the explicit and implicit assumptions.

As an aside, this has already become one of my fastest down-voted comments. Could someone stop by and explain what they don't like about it? I didn't think it was very inflammatory.

I'm starting to question if the rich are not overvalued because as more and more money is being shoved into their pockets I have one thing to ask. Where's the economic miracle?

Not only are everyday people poorer but GDP is stagnant. From a western perspective the rich got a ton of raises and failed to deliver. We have countries with negative birthrates and people living in smaller homes with more food insecurity. Central Banks have been doing their best to raise prices and keep the rich afloat yet I don't see the big economic miracle.

Prehaps the source of their wealth is not productivity but good old fashioned power dynamics? What value are the rich providing to most people exactly? Wonderful new technology? That's pretty neat but what else do they have to offer?

> Genuinely productive people are pretty rare (1 in 100 type numbers).

That may be true in bullshit heavy fields. When it comes to actual labor though the figure is closer to 99 in 100. Unproductive plumbers just aren't going to last very long.

Also you're getting downvotes because you're ambiguously questioning the merits of socialism. But you already knew that.

Capitalism has become pretty controversial lately, so if I had to venture a guess I would say that's likely why.

Can I ask why you put quotes on 'those with needs'?

It is language that leads to hot debate and that I don't personally like. I wanted to keep it isolated from the rest of my paragraph because it isn't my frame, it is the frame of people I don't agree with.

I assume you're alluding to: "From each according to his ability, to each according to his needs."

The last time Capitalism was this inequal it led to communism and fascism with fascists chiding that their ideological enemies were "plutocracies".

I honestly don't think this will fix itself until we face great depression 2. When the government is no longer able to bail out the rich because they will have accumilated so mamy resources that nobody will be able to save them from self-imposed financial peril.

Depending on field productivity is insanely top-weighted. Take the Music Industry. The Beatles produce incomprehensibly more profitable content than your local garage band. Their value isn't merely a result of capitalism too. Even in a non-capitalistic system they would be highly valuable musicians.

One phenomenon that's been happening is the increasing top-heaviness of society due to automation because you simply need less people to work. The value of labour has plummeted for other reasons as well such as mass immigration and the workforce increasingly incorporating women.

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