They don't have thousands of years of evidence. The modern economic system has only existed about 200 years. It's precursor was around a couple hundred years before that. Prior to that, the economic system looked very different. And there was a wide range of economic systems prior to that.
> that this is just the natural state of the world (for which they have thousands of years of evidence to point to).
You write:
> And there was a wide range of economic systems prior to that.
That is my point. every single one of those 'wide range of economic systems' (including the ones directly intended to produce equality) produced inequality.
That didn't seem like the point you were making, what you seemed to imply is that some form of the current system has existed forever.
But lets work with your new point. Saying "all the economic systems we've tried produced inequality" with the implication being there's no point in attempting to devise new ones is rather like saying "all materials we've devised produced some amount of friction". Sure. But some produce a hell of a lot more than others. And it's still worth searching for new materials that produce less friction so that they can be used in applications where friction is a detriment.
Some economic systems produce a lot more inequality and environmental degredation than others. Our current system has produced a lot more than most. And a lot of the proposals on the table would almost certainly produce less than our current system does.
Which other systems are you referring to? Feudalism, fascism, and communism all produced more inequality than free-market capitalism. Note that equality or inequality involves more than just income and assets.
Environmental degradation is more a function of overpopulation and technology than the economic system. With free-market capitalism we at least have the potential to price in the environmental degredation externality in a fair and consistent way through taxes. That approach has been underutilized so far, but with most other economic systems it's not even an option.
There are many more options than feudalism, fascism, or communism. And my point is that the lack of awareness of them is part of the problem.
For example, there's the form of Democratic Socialism I propose above: where we replace the current business structure with worker cooperatives funded by regulated loans or crowd sourcing that compete with each other in a free market. We know worker cooperatives work, because there are many successful worker cooperatives operating well in the current capitalist economy. There's no reason to believe they would stop functioning well in a free market economy where all businesses are worker run.
And like I said, I have a whole bookshelf full of alternative proposals. Some of which don't make a whole lot of sense. Some of which are very plausible. And some of which are already working in micro, just waiting to be tried in macro.
There's nothing stopping workers from creating worker cooperatives today and getting business loans today. We don't need a new economic system for that. But lenders won't lend without a high expected ROI.
Yes, worker cooperatives have formed and functioned in the existing economy. Which is part of how we know using them as the foundation of our economy, rather than a niche aspect of it, could work.
> But lenders won't lend without a high expected ROI.
Exactly, that's what's stopping them. Worker cooperatives don't provide the return on investment that investor ownership grants. They don't allow those with capital (wealth) to demand a large portion of the returns from the business. That's what requires the new economy - removing the option for capital to demand ownership and control so that it has to make do with a reasonable, regulated return on its loans.
This is an unrealistic fantasy. Capital owners don't lend money to businesses just for fun. You haven't proposed a viable way to encourage lending. If they can't achieve a high expected ROI on business lending then they'll use their capital for other purposes.
> Which is part of how we know using them as the foundation of our economy, rather than a niche aspect of it, could work.
We don't use worker cooperatives in the same way we don't use corporations. There is no overarching entity that uses any of these things.
If worker cooperatives are so great, they should be outpacing corporations. Some do. For example, companies like Winco and Mondragon exceed productivity of their corporate counterparts. That's fine. More power to them. Their story should encourage others to start worker cooperatives.
> That didn't seem like the point you were making, what you wrong seemed to imply some form of the current system has existed forever.
My meaning was very plain. I said many people would be unconvinced that anything could be done to achieve equality. I then stated they could point to thousands of years of human life (which, as you correctly stated, contained many economic systems). If you put both points together, you'd see that I was saying essentially that 'no human system tried has achieved equality', so many people would believe that there are few changes we can make to ours to achieve this goal.
I'm going to expound on this idea more. Please consider everything I say before jumping to conclusions this time.
> Sure. But some produce a hell of a lot more than others. And it's still worth searching for new materials that produce less friction so that they can be used in applications where friction is a detriment.
Correct. But there's more than one knob. Some systems produce little inequality, but lots of destitution. Others produce lots of inequality but little destitution. By all objective metrics, ours produces little destitution, and while it produces inequality, it is a different form of inequality than many other systems. For example, marxism and communism in the forms tried produce more equality, but utter destitution for large swaths of the population (it's a race to the bottom). Our system of free markets, even in its heavily corrupt form, produces inequality, certainly, but little destitution, by all objective metrics. Moreover, of the inequality we create, it is a shifting inequality. Studies show that family fortunes in the United States do not form dynasties as they do in other economic systems (like monarchist mercantilism, for example). Most family wealth dissipates by the third or fourth generation.
If some inequality that ends up being redistributed is the price we pay for less destitution, then I don't see why equality ought to be prized.
> Some economic systems produce a lot more inequality and environmental degredation than others. Our current system has produced a lot more than most. And a lot of the proposals on the table would almost certainly produce less than our current system does.
Okay, and as I said, simply optimizing for 'equality' and 'environment degradation' would not lead to a good economic system. There are other goals you're completely ignoring. WE can create a system that's perfectly equal and great for the environment, but leaves everyone destitute.
For me, there's a hierarchy of needs here. First, destitution must end, then we can talk about equality. But ultimately, if the world is extremely unequal, but no one is destitute, then that economic system is good. And we're very close to that by continuing with current trends
> But ultimately, if the world is extremely unequal, but no one is destitute, then that economic system is good. And we're very close to that by continuing with current trends
Yes. If everyone is actually better off compared to the equal society, then the only problem is jealousy really. So why not attack that instead, people will never be equal anyway since nature is unfair, and some will always be much more beautiful, talented etc, even in a perfectly "equal" society. Capitalism just amplifies the human condition, raises everyone, and raises the best even more.
It seems to me that our consumeristic culture makes people extremely jealous. As I've stated countless times here, I don't like Mark Zuckerberg, or Jeff Bezos. I want to make sure that their wealth cannot buy them the ability to affect my life (and I've called openly for their prosecution for when they've done those things based on existing criminal law).
That being said... I don't begrudge them their wealth. I don't begrudge them their private jets. I have nothing to complain about. I have a home, a wonderful family, a lovely spiritual life, a fantastic community, etc. I have things that their money would never buy. Half the time I feel sorry for them.
It seems to me many of my fellow citizens are simply jealous of their material goods and want their private jets and all that nonsense for themselves. No thanks. We should discourage this kind of materialism.
> For me, there's a hierarchy of needs here. First, destitution must end, then we can talk about equality. But ultimately, if the world is extremely unequal, but no one is destitute, then that economic system is good. And we're very close to that by continuing with current trends
This strikes me as an excellent way to put it, and is really at the core of why I look upon “alternative solutions” with a cynical eye.
Every proposal I’ve seen results in limiting overall wealth of our society. That just doesn’t pass the smell test for me.
To put it another way - it’s far easier for a wealthy society to achieve equality than it is for an equal system to achieve wealth.
Ironically, this seems to more closely mirror the writings of Marx than the goals of the self-described Marxists I’ve encountered.
> The free market and worker cooperatives are completely compatible.
I agree.
But there is something that needs to change in order for worker cooperatives become the dominant business form. So long as capital can demand ownership, worker cooperatives will remain a relative niche. What needs to change in markets is we need to remove the ability for capital to demand ownership. That's essentially the core of my proposal for a new system.
Replace the LLC and Stock Corporation with the worker cooperative. Remove the investor stock owner relationship from the economy. Legally mandate that all businesses be formed as worker owned cooperatives. And then regulate the amount of interest that banks and financiers can charge on their loans to limit their power over those worker cooperatives.
What you get is a free market economy where all businesses are democratically run by their workers and the relationship between capital and labor is flipped. It would vastly increase equality, with out increasing destitution. And would likely have some small decrease on environmental degradation.
In some ways it's a very gentle refactor of our existing economy. In other ways, it's far reaching and drastic (stock markets go away entirely and traditional banks become a primary mechanism of savings).
The idea that replacing ownership with loans will lead to good outcomes is frankly shocking to me.
There's a reason all major religions historically prohibit usury (the charging of any interest, as well as enforce debt jubilees), while encouraging ownership.
Frankly, this sounds like a great idea, but it vastly understates the role of the markets (esp the stock market) in lifting others out of poverty.
Humans are not machines. We cannot always work. Stock ownership provides the ability for the disabled, the elderly, etc to earn income based off of work they'd already put in. It's like buying a stake in society. Without it, each person would be measured based off their economic output. I know you claim that's how the current system works, but imagine how much worse it would be if there were no other way to earn money other than by working.
> It would vastly increase equality, with out increasing destitution.
Your meaning was not plain, you wrote a few very broad sentences and in your clarifications it seems you were talking about a single problem - equality. The original post was outlining many problems, inequality being one of them and the systems being proposed potentially address many problems.
But that's fine, such is the nature of dialog over text.
> Studies show that family fortunes in the United States do not form dynasties as they do in other economic systems (like monarchist mercantilism, for example). Most family wealth dissipates by the third or fourth generation
This is likely to be an outdated statistic at best. If you go back three or four genenerations, you will find yourself passing through a time when the US had very high inheritance taxes and a 90% top marginal tax rate. That period of time did likely prevent the formation of dynasties across it. However, those policies have since been repealed and current studies show very low social mobility and a significant increase in dynastic formation. [1, 2]
> Some systems produce little inequality, but lots of destitution. Others produce lots of inequality but little destitution.
If you're just measuring destitution and inequality, then you're getting a very narrow picture. You can't leave out things like environmental degradation from your calculation. The environmental degradation - in climate change - threatens to upend what gains there have been made in destitution and the current system is completely failing to respond appropriately to the threat. So the great likelihood is that if we stay with the same system on the same trendline, there's a cliff coming in our near future.
> For me, there's a hierarchy of needs here. First, destitution must end, then we can talk about equality. But ultimately, if the world is extremely unequal, but no one is destitute, then that economic system is good. And we're very close to that by continuing with current trends.
Saying "first destitution" must end before we consider any refactors of the current system makes very little sense. There are other options on the table than state socialism or returning to mercantalism. Systems that have the potential to increase equality, decrease environemntal degredation, and decrease destitution. All at the same time. Systems that haven't been tried in macro yet, but are working just fine in micro - for example the move to universal worker cooperatives funded by credit unions and crowd sourcing that I propose. And that's just one of many proposed possibilities. Those doing the work of proposing alternatives are absolutely including things like destitution in their calculations.
Throwing your hands up and saying "we can't do better than this" frankly runs counter to the very mindset that this website is supposed to represent. We can always do better.
> This is likely to be an outdated statistic at best. If you go back three or four genenerations, you will find yourself passing through a time when the US had very high inheritance taxes and a 90% top marginal tax rate. That period of time did likely prevent the formation of dynasties across it. However, those policies have since been repealed and current studies show very low social mobility and a significant increase in dynastic formation. [1, 2]
How is it possible that you can dismiss my claims for being too long ago, and then cite claims on dynastic formation made today? Surely, in order to make the latter claim, you would need to wait equally long into the future as my claims were into the past? Would you look at my family, which has risen exponentially from poverty and claim we're forming a dynasty? How could you possible know it's a dynasty until I'm dead and my children inherit?
I don't believe the tax policy argument is satisfying. The studies show that the wealth dissipates due to squandering, not taxation. Even with a 90% income tax, these heirs still get millions and millions (likely billions in todays dollars), and yet still lose it all.
> The environmental degradation - in climate change - threatens to upend what gains there have been made in destitution and the current system is completely failing to respond appropriately to the threat. So the great likelihood is that if we stay with the same system on the same trendline, there's a cliff coming in our near future.
Even the worst models of climate change do not predict the catastrophic ends you are attempting to paint. You're just distracting from the issue at this point. In general, I find doomsday predictions unvaluable. Nevertheless, i'm not going to fall for this change in goalposts.
> Systems that haven't been tried in macro yet, but are working just fine in micro - for example the move to universal worker cooperatives funded by credit unions and crowd sourcing that I propose
So... a free market? There is nothing incompatible with the system we have and worker's cooperatives.
Although I will say credit unions have proven just as dangerous and capable of malfeasance as banks (Savings and Loans Crisis of the 80s, which everyone seems to forget for some reason).
> We can always do better.
Sure, we can improve some things in my hierarchy of needs by following down our current path, which, unlike your changes, is empirically shown to improve material conditions. This idea that because the current system hasn't made everyone's life better overnight, it must be replaced, is foolish. Some people have this constant drive to change things. Doing nothing is also a choice. And often a good one.
> Even the worst models of climate change do not predict the catastrophic ends you are attempting to paint. You're just distracting from the issue at this point. In general, I find doomsday predictions unvaluable. Nevertheless, i'm not going to fall for this change in goalposts.
Yes. Yes they do. [1] That, and climate reality has so far been worse than our worst case models in many respects. [2]
Anyway, we could keep going, but we've been at this all morning so it's probably best to let it lie. I feel comfortable I've made my point well enough, and I think you've made yours. I think we're unlikely to make further progress in a low bandwidth media.
I dunno, maybe if/when I write the book I dream of I'll be able to address more of your points in more detail and with more data and you'll find that more convincing than I can be reactively writing forum posts. Until then, I've appreciated the dialog.
Nothing would fundamentally change about human nature and society if the scenario in [1] comes to pass. Humans will still likely thrive and be happy, as we have for many years.
