Comment by II2II
2 days ago
I would argue that greed is the problem, not profit.
One could argue that government policies are anything but altruistic. They fund public education because you need an educated workforce. They fund public health insurance because a healthy workforce is a productive workforce. You distribute the cost over the entire population. Both remove direct costs from employers (e.g. training and providing private health insurance). Both have a tendancy to reduce costs and improve consistency because you are working at a larger scale. It also creates order in society since people generally feel as though more of their needs are being met, and they feel less exploited. All of this contributes to profit both on a social scale and for individual businesses.
Somewhere along the line people forgot the lessons of the 20th century. They forgot that profit goes beyond a line on the current financial statement. It also reflects long term interests.
Human nature (greed) is never the problem, because it cannot be changed. Focus only on what can be changed. Design a system that manages human nature, pointing it in a direction that is beneficial, while taming its side effects.
A denial of human nature is how you get authoritarian socialism with centralized planning, which leads to catastrophe because of the local knowledge problem, and because people have no private incentive to do anything.
"Capitalism" is an incomplete first step towards a system which channels greed into something that's beneficial for all stakeholders. A profit-driven actor making their production more efficient to increase profits is a good thing for everyone.
But capitalism is incomplete because the profit-motive can become pathological. Market failures are commonplace.
The only solution that is proven to work is a mixed economy done right, with clever and lean regulations, and a government not influenced by money, and with the government stepping in occasionally to provide public goods that the market cannot, and with private actors otherwise free to make profits as long as they are not harming any third parties.
> Human nature (greed) is never the problem, because it cannot be changed. Focus only on what can be changed.
The statement might appear to be pedantically true, but it's not true in practice. Sure, greed cannot be eliminated, but you certainly have systems which control the actions which result from greed. In reality, the actions brought on by greed are the real problem and we have an entire branch of the US govt(the legislature) dedicated to setting up mechanisms(laws) to discourage unwanted actions via threat of consequences.
So, it's certainly possible to mitigate the effects of greed. What people are pointing out is that of late corporations(and more specifically the C suite) have faced few if any consequences for detrimental behaviour driven by greed.
Hence the problem.
We are saying the same thing.
> centralized planning, which leads to catastrophe because of the local knowledge problem, and because people have no private incentive to do anything.
The local knowledge problem might have been an issue with central planning a few decades ago, but I don't think it is anymore. Everyone now has in their pocket a device with which they're able to instantly send any kind of information anywhere. We now have computers and software powerful enough to process all this information. The price mechanism is an ancient, inefficient and slow way to transmit information compared to what we could achieve today if we really wanted to.
People have all kinds of incentives other than profit. People wouldn't just lie down and die if they couldn't make money by owning things. The failures of past attemps at planning had more to do with the limited technology they had and the poor decision-making structure that centralized power and allowed too much corruption. That doesn't mean planning will always have that kind of a result.
> a government not influenced by money
This is impossible in capitalism, which will always over time create concentrations of capital large enough that influencing the people in government will become affordable, no matter how hard you make it. Government is just people, and there'll always be ways to influence people using money. In a well designed government it would be hard and expensive, but you can never make it impossible. Eventually a corporation or an individual will become so wealthy that they can afford it, and at some point conditions will arise where influencing the government will be a cheaper way to increase profits than fairly competing in the market.
> The local knowledge problem might have been an issue with central planning a few decades ago, but I don't think it is anymore.
I think you are right in principle. The signals can be centrally computed, if all the relevant edge data was somehow made available to the central compute. I see two practical problems. What is the actual probability that a government won't royally screw it up? I would give a pessimistic assessment given the lack of theory and lack of empirical case studies. If a government wanted to run a small opt-in test case, I would not be opposed to it, but I would expect it to fail. In any case, why would you want to risk it? Why not just do market socialism?
The other practical problem is the incentive question. I read what you wrote, but I can't help but feel it's a bit hand-wavey. Maybe you have a personal constitution that means you don't need to work for profit. But I believe most people, including myself, would only do the minimum if no personal gain was involved, unless it was a truly unusual circumstance like someone invaded my country which stoked nationalist fervor. But in a normal economy in a normal country, I do not believe you will be able to sustain high output or high innovation.
> This is impossible in capitalism
It's an ideal that's impossible, but you can asymptote rather close, there are a number of social democracies (which are mixed economy, i.e. capitalist) in Europe that attest to that.
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Who decides the clever and lean regulations? How do we maintain the best ones when power changes hands in government?
> Human nature (greed) is never the problem, because it cannot be changed.
Citation needed.
Human nature is not greed though. Human nature is very very varied and adaptive. And the historical norm of human nature is one of sharing, community and support, as much as such a claim can even be made. And human nature is subject to the whole bigger system in which it lives.
Capitalism is in many ways such a system, one that is built around driving the worst parts of human nature. And the thing is the profit motive becoming pathological is not a bug. This is the key defining feature of the system. Capitalism really isnt even about markets. Its about consumption, and producing things specifically to sell them in order to make some markup. The goal is specifically to find ways to make money, and stuff like fulfilling peoples needs, quality, workers rights, and regulations are clearly things that are getting in the way.
Exactly. I can't express the degree to which people thinking we can fix it with just one more surgical precision law drive me up the wall. They've clearly never tried to do anything regulated.
The second, third and Nth order consequences of the sum of the shortsighted quick fixes these people have peddled result in a world where only sociopathic corporate entities can do anything, and of course those entities are incredibly "greedy", they wouldn't be able to remain profitable if they weren't.
Those vacant main street store fronts (metaphorical or literal, your pick) are only half vacant because the PE fueled megacorp that owns them doesn't deem it worthwhile to rent them. The other half are vacant because the cost of jumping through the regulatory hoops to rent them in a lawful manner is unjustifiable for the small time owner.
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>I would argue that greed is the problem, not profit.
I would point out that's precisely what the "private equity firm"--is that true or just a buzzword? no private equity group is taking this library private--is saying about the current library, that the greed of the unionized employees is running the library for their own benefit and at great cost to library and at the expense of the public, and it could be run more efficiently. So, you agree with them at least that much.
>Somewhere along the line people forgot the lessons of the 20th century. They forgot that profit goes beyond a line on the current financial statement.
huh? that wasn't "the lesson of the 20th century". if anything, the 20th century represents democracy and market capitalism's greatest joint achievement, with much less disease and starvation and much more freedom at the end vs the beginning.
you live in one of the greatest times to be alive, and all you can do is complain. when and where from the past would you rather live out your life expectancy of half what it is now, coupled with no HN to bitch on?