Comment by ElevenLathe
10 days ago
IMO this is a symptom of the falling rate of profit, especially in the developed world. If truly productivity enhancing investment is effectively dead (or, equivalently, there is so much paper wealth chasing a withering set of profitable opportunities for investment), then capital's only game is to chase high valuations backed by future profits, which means playing the Keynesian beauty contest for keeps. This in turn means you must make ever-escalating claims of future profitability. Now, here we are in a world where multiple brand name entrepreneurs are essentially saying that they are building the last investable technology ever, and getting people to believe it because the alternative is to earn less than inflation on Procter and Gamble stock and never getting to retire.
If outsiders could plausibly invest in China, some of this pressure could be dissipated for a while, but ultimately we need to order society on some basis that incentivizes dealing with practical problems instead of pushing paper around.
>If truly productivity enhancing investment is effectively dead (or, equivalently, there is so much paper wealth chasing a withering set of profitable opportunities for investment), then capital's only game is to chase high valuations backed by future profits, which means playing the Keynesian beauty contest for keeps.
What if profit is dead because wealth is all concentrating in people who don't need it from a marginal consumption standpoint, which means asset prices blow up because everyone rich believes that they need to "invest" that money somewhere... but demand shrivels outside of interestingly-subsidized areas like healthcare because nobody else is making enough to even keep up with the asset price rises?
And without demand, where would innovation come from?
If you accept that the economy can be in disequilibrium, then it is very easy to see how this happens.
Rich people learn a habit that makes them consume less than their investment returns. The difference is reinvested, resulting in a net increase of their equity. Even if you say they spend 90% of their returns on consumption, the last 10% still grow in absolute terms. Since returns are paid proportionally based on the quantity of equity, you can clearly see that money is allocated from where it has high marginal utility to places where it has low marginal utility.
Of course this leads to a contradiction. If money is held by people who have a low marginal utility for consumption, why would investments pay high returns? Your equity is the latent demand that your investments need to pay you the returns in the first place. You'd increasingly be paying yourself. That is equivalent to investing into something that yields a 0% return which in turn is equivalent to doing nothing.
"in people who don't need it from a marginal consumption standpoint".
We need the rich to spend more money. There are plenty of cool ways to do this. Build a mile high pyramid on a Nevadan playa, a canal to the Sea of Cortez to re-flood the Salton Sea, humans on other planets, new city states a la Praxis, interstellar probes, etc.
Some billionaires are doing some of these things. Hope more do in the future.
Profit is a myth of epistemic collapse at this point. Productivity gains are also mythical and probably just anecdotal in the moment.
Perhaps I’m misunderstanding but a lot of people (ok, well, a few, but you know) make a lot of money on relatively mundane stuff. Technocapitalism’s Accursed Share is sacrificing wealth for myth making about its own future.
What percentage of work would you say deals w/ actual problems these days?
In a post-industrial economy there are no more economic problems, only liabilities. Surplus is felt as threat, especially when it's surplus human labor.
In today's economy disease and prison camps are increasingly profitable.
How do you think the investor portfolios that hold stocks in deathcare and privatized prison labor camps can further Accelerate their returns?
What’s an example of work that does not deal with actual problems?
Online influencers, podcasters, advertisers, social media product managers, political lobbyists, cryptocurrency protocol programmers, digital/NFT artists, most of the media production industry, those people w/ leaf blowers moving dust around, political commentators (e.g. fox & friends), super PACs, most NGOs, "professional" sports, various 3 letter agencies & their associated online "influence" campaigns, think tanks about machine consciousness, autonomous weapon manufacturers, & so on. Just a few off the top of my head but anything to do w/ shuffling numbers in databases is in that category as well. I haven't read "Bullshit Jobs" yet but it's on the list & I'll get to it eventually so I'm sure I can come up w/ a few more after reading it.
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> If outsiders could plausibly invest in China
But they can and they do.