Rigged Economy or Statistical Inevitability?
NOTE : I was working on this reply to "tendency for the rate of profit to fall" when the thread suddenly disappeared. So I'm posting it here under a new title.
Quoting Wallows
Marxism is old news, based on outdated science. It assumes that economic inequities are the result of intentional exploitation of the masses by an evil minority. While there may be some truth to that presumption, there are also other forces at work. For example, Adam Smith's "Invisible Hand" theory suggested a more positive interpretation of self-interest inadvertently producing unintended social benefits.
Now, a new mathematical theory of economics surprisingly concludes that wealth inequity is inherent in any free market. An article in Scientific American magazine (Nov 2019), is entitled The Inescapable Casino. The mathematician author concludes that, in a market economy "you win some and you lose some, but the longer you stay in the casino, the more likely you are to lose. The free market is essentially a casino that you can never leave." And the house always wins. This surprising conclusion is based on his economic model of modern wealth transfer, which indicates that "after a large number of transactions, one agent ends up as an 'oligarch' and the other 999 end up with virtually nothing." This result was despite initial equality of opportunity. So the bias seems to be inherent in the nature of statistics (luck). I would call that occult force the "invisible Left-hand of Economics".
The author notes that the same statistical patterns are found in physics, involving "phase transitions" and "symmetry breaking". So, it seems that economic inequality is essentially inevitable. Which is why the system will ultimately break without artificial (government) redistribution of wealth. The article notes that most developed nations today are near the critical break-point. And the US economy has one of the highest coefficients of inequality in the world. Hence, the author concludes that "it may be that inequality naturally increases until oligarchies begin to form, at which point political pressures set in, preventing further reduction of equality." In a democratic system with a mixed economy, those adjustments can be made without violent revolutions, but tend to barely maintain the status quo.
The bottom line here is that "the notion that individuals bear all responsibility for their economic outcomes simply because they enter into transactions voluntarily" is misguided. Instead, "luck plays a much more important role than it is usually accorded." Hence, the unfairness is "inherent in market economies." No need to despair though. Armed with this mathematical information, economists and politicians, plus national and world banks, can work together to tweak the economy to maintain a better balance. Let's hope they get a handle on the problem before a new world war, or multiple civil wars, do the bloody surgery for us. :smile:
Oligarchy : rule by a few super-rich people
Is Inequality Inevitable : https://www.scientificamerican.com/article/is-inequality-inevitable/
Rigged Economy : https://www.scientificamerican.com/article/the-american-economy-is-rigged/
Quoting Wallows
This one is a biggie. In Marxist economics it essentially means that the labor force is starved from the means of production, reentering, and blatant and merciless exploitation starves the economy pool, that you end up with a plutocracy holding 90+% of all wealth.
Marxism is old news, based on outdated science. It assumes that economic inequities are the result of intentional exploitation of the masses by an evil minority. While there may be some truth to that presumption, there are also other forces at work. For example, Adam Smith's "Invisible Hand" theory suggested a more positive interpretation of self-interest inadvertently producing unintended social benefits.
Now, a new mathematical theory of economics surprisingly concludes that wealth inequity is inherent in any free market. An article in Scientific American magazine (Nov 2019), is entitled The Inescapable Casino. The mathematician author concludes that, in a market economy "you win some and you lose some, but the longer you stay in the casino, the more likely you are to lose. The free market is essentially a casino that you can never leave." And the house always wins. This surprising conclusion is based on his economic model of modern wealth transfer, which indicates that "after a large number of transactions, one agent ends up as an 'oligarch' and the other 999 end up with virtually nothing." This result was despite initial equality of opportunity. So the bias seems to be inherent in the nature of statistics (luck). I would call that occult force the "invisible Left-hand of Economics".
The author notes that the same statistical patterns are found in physics, involving "phase transitions" and "symmetry breaking". So, it seems that economic inequality is essentially inevitable. Which is why the system will ultimately break without artificial (government) redistribution of wealth. The article notes that most developed nations today are near the critical break-point. And the US economy has one of the highest coefficients of inequality in the world. Hence, the author concludes that "it may be that inequality naturally increases until oligarchies begin to form, at which point political pressures set in, preventing further reduction of equality." In a democratic system with a mixed economy, those adjustments can be made without violent revolutions, but tend to barely maintain the status quo.
The bottom line here is that "the notion that individuals bear all responsibility for their economic outcomes simply because they enter into transactions voluntarily" is misguided. Instead, "luck plays a much more important role than it is usually accorded." Hence, the unfairness is "inherent in market economies." No need to despair though. Armed with this mathematical information, economists and politicians, plus national and world banks, can work together to tweak the economy to maintain a better balance. Let's hope they get a handle on the problem before a new world war, or multiple civil wars, do the bloody surgery for us. :smile:
Oligarchy : rule by a few super-rich people
Is Inequality Inevitable : https://www.scientificamerican.com/article/is-inequality-inevitable/
Rigged Economy : https://www.scientificamerican.com/article/the-american-economy-is-rigged/
Comments (55)
Here's what I think about what you have in mind. The tendency for the rate of profit will actually accelerate... upwards.
Marx was a guy living in a time when productivity increases such as seen today were nil, zero, uncomparable.
You will most likely see the automatic stabilizers in the economy... failing to account for the deflationary spiral we will most likely experience (think Japan). After Japan will be South Korea, the Scandinavian countries, Germany France, and lastly the US. The US will be last because the greenback is still the unit of exchange across the world and their demographics are growth-oriented.
Fueling hamfisted growth will be from BRIC countries (except Russia, there's something economically downright fucked in that country).
The neocons are having an orgy given that they convinced the masses that trickle-down works. It does work; but, only through trade. Furthermore, since the whole world seems to have adopted the fiat system, and accepted the implicit neo-Keynesian sentiment that goes along with it, I see the Austrian school making a comeback sometime soon.
Everyone should be cumming in their pants.
Ah yes, just like with Climate Change the powers that be will totally happy to change the system they benefit from, for sure.
Not at all, it posits that ongoing inequities are a result of systemic features of the political-economic system that reward and punish the respective sides of preexisting inequities. Everyone is just doing their best to get ahead, but the system rewards those who are already ahead allowing them to get even further ahead, and punishes those who are already behind making them fall even further behind. It’s not about mustache twirling evil villains, it’s about systemic injustice.
It’s like you’ve never even heard a Marxist critique before. E.g. the big banker villain of Mary Poppins Returns was widely criticized from the left as making it seem like it’s just a few bad actors like that behind all the problems and if they’re just defeated the system will work fine again, when really it’s the system that’s at fault and the individuals in charge of it are largely irrelevant.
Basically this “new” research is just reinforcing what Marxists have always been saying.
FWIW I agree with the conclusion that “free markets” as we have them today inevitably lead to inequality, but disagree that state intervention is the only solution. The problem is in the nature of the rules of allowable transactions in the “free” market, which still has all kinds of claim rights (e.g. to property) and powers (e.g. to contract), not just a complete free reign of unchecked liberty rights. Libertarian socialism and left libertarianism are views that address those underlying rules to fix the problem without state intervention, usually by limiting the claim right to property, but on my version by limiting the power to contract (especially contracts of rent and interest), in any case actually increasing the freedom of the market, not decreasing it, while undermining the systemic advantages that such claims or powers give to those who are already ahead in the game.
"lawless irregularity" in Marx = a general form of random variation.
"ideal average" in Marx = a driving trend that obtains all else held equal.
Other than that, and offering prayers to the oligarchy in the church of the market, nice post.
Quoting Gnomon
Why is Marx old news but not Adam Smith?
Furthermore, Adam's Smith's invisible hand was about patriotism stopping capital flight from the imperial center, England towards their colonies.
And on this point, Marx was right that capital will relentlessly go where it's gonna get the best returns; i.e. patriotism be damned, to which any modern economist will say "of course". So Marx seems to have the modern view of things on the invisible hand business you bring up.
Furthermore, the central economic prediction of Marx is that capital accumulation is relentless and without an internal limiting natural balance (until the system destabilizes itself), exactly the same prediction the casino market arrives at.
Adam Smith also has this basic prediction and a large part of the Wealth of Nations is about what the sovereign needs to do (what state intervention is necessary) for the system to keep functioning.
Where Marx disagrees with Smith are on these potential fixes. Marx is a market economist who sees the market as more efficient than the previous feudal order.
As such, Marx and Smith are in complete agreement on the production capacity of free markets (for this reason Marx views the early stages of capitalism as a good thing). Marx's prediction that free markets will lead to large iniquities (large capital accumulations) and labour arbitrage and other advantages of capital will out-maneuver "parliamentary" (first-past-the-post representational systems) was essentially immediately proven correct in the 19th century leading to the predicted "destabilization" of WWI (which included a "communist revolution" that predictably failed due to not being global enough) and then repeat of the same processes leading to WWII with massive Smithian sovereign interventions that stabalize the system ... but, as predicted by Marx, capital accumulation wins out in first-past-the-post representational systems (but there are much more equal society's in direct democracy systems, that Marx viewed favourably).
Marx also has extremely modern elements to his economic theory such as the roll of psychology in the free market: that the desire to accumulate more capital is a psychological feature that will dominate the market; in contrast to the "fair Aristocrat not motivated by money but rather honor and justice etc." view of the elite; that the Aristocratic elite of the time definitely viewed themselves as, going so far as to having a game of not touching money to symbolize this. Only recently are economists bothering to deal with this obvious fact (that people who have read Marx have pointed out but also people with a knowledge of philosophy) that simply because something has wide utility, such as money, doesn't justify accumulating as much as possible (one still needs a goal to justify this process and if one has a goal, one will presumably spend money on this goal rather than accumulate it indefinitely). It's fairly recent and extremely modern accepting indefinite capital accumulation is a psychological feature of the market and there is a modern psychological explanation for it which is people compare themselves to their peers and as they get richer they just continuously update their peers as equally rich. Marx doesn't have this modern scientific explanation, but the conclusion is accurate (that there are enough of these people to always push capital accumulation further, and whoever doesn't loses) and this psychological feature in his economics was proven correct with time and with modern psychological and sociological methods.
There's of course a lot of completely wrong predictions Marx makes and Marx mixes moral judgments into economic theory (again a very modern twist, but I agree not scientific in either case), but the unfair position of workers (most people) leading to ever greater and global concentrations of capital and so an oligarchic tendency of unregulated markets is pretty much the essence of Marx's critique of capitalism; the predicted market crashes happened, and the organizing of labour also happened, but the global communist revolution did not (and I don't think will) happen (rather I disagree with Marx's view that industrialism is good and workable, regardless of who owns the means of production, and so I predict either ecological collapse or de-industrialization and a return to more local economies that do not really fit in the Marxist conception of the future).
Now, I understand that in the States it is safer to approach foundations of social policy with "Marx was wrong ... but" or "socialism is wrong and can never work ... but" and also just assume Marx is all bunk without ever reading Marx; however, this is a safe space to get to know any thinker. It's a safe bet that Marx is not likely the most negatively propagandized (non-religious founder at least) thinker of all time because he had nothing accurate to say. The creation of the middle class was a Marxist project by people self-consciously using broad elements of Marx's economic theory, just differing with Marx on the moral objective of economic policy; and, inline with Marxist theory, almost immediately after the purpose of creating the middle class (avoiding Soviet expansion through communist revolution) disappeared, capital is immediately dominating labour through global labour arbitrage and even more intensely in first-past-the-post representational systems and the middle class is dwindling leading directly to labour agitation and instability (where is the middle class rising in contemporary times that proponents of capitalism point to as success? China, where every economists has read Marx and the sovereign intervenes extensively as Smith recommends).
This doesn't really have anything to do with your post, but if you want to preamble your with a digression about Marx I thinks it's fair to then expect responses that digress about Marx.
Both are "old news". Any 21st century solution to the problem of economic inequality will have to take into consideration the "invisible left hand" of the market casino.
But this is what Marx is talking about: capital accumulation has no natural balance, market transactions are not fair (favour the owners of capital) and the system destabilizes itself.
What the casino paper seems to be doing is simply a numerical simulation of Marx's model of unregulated capitalism. I see nothing in the paper nor in what you present to lead to the conclusion that such a numerical simulation is needed to arrive at the conclusion (just as numerical simulation wasn't needed to find Neptune or to tell us the sun will rise in the East tomorrow, though will of course simply confirm these conclusions).
Again, I have no need to digress into Marx to discuss the casino paper's content or implication, but if you want to disparage Marx, for whatever your reason, this seems like a poor choice of disparaging. Perhaps I'm wrong, that Marx has the right conclusions for preposterous reasons and this casino model finally brings us the right conclusions for the right reasons, but that seems far fetched.
Someone should invent a game to illustrate this startling novelty. "Monopoly" has a nice ring for a name.
I suspect that Marx may have been talking about a problem that was endemic in Europe prior to the French Revolution. "Under the ancien régime, ennobled families were granted privilege in the literal sense; that is, they answered to a different set of laws ("privy": private, "leges": laws). In particular, they were exempt from taxation." [see the article below]. The rich and powerful have always enjoyed special exemptions not available to the hoi poloi. And vice versa : The article quoted James Baldwin, "anyone who has struggled with poverty knows how extremely expensive it is to be poor."
The article reveals that the inequalities of economies is as old as bartering. So, the question now is, what are we going to do with this new insight? Join the class revolution, and hope the "inevitable" dialectic is swinging in our direction? Or join the political system and work together for a more equitable tomorrow? Pessimists will choose one solution, and optimists another. But the laws of statistics will always prevail. And the same law will apply to the Many and to the Few. Since mathematics is amoral, the "law" will be on the side of those who know the Law. At least now we know that the Casino is inherently rigged, and can make human laws to offset the "natural" physics of power . . . along with the artificial leverage of of politics : Privilege.
. . . and the dialectic goes on . . . :smile:
Privilege : https://hedgehogreview.com/issues/identitieswhat-are-they-good-for/articles/privilege
Sorry, I have no training or aptitude for economics or politics. So this article was news to me. I was surprised to hear that laws of physics also apply to metaphysics, i.e. economics. :smile:
PS__I didn't intend to disparage Marx, but to promote the linked article.
Maybe now kids on the short stack of the Monopoly bank will be able to calculate their way out of poverty. :joke:
The article says, " these mathematical models demonstrate that far from wealth trickling down to the poor, the natural inclination of wealth is to flow upward, so that the 'natural' wealth distribution in a free market economy is one of complete oligarchy. It is only redistribution that sets limits on inequality." Now, the masses will have the authority of mathematics on their side of the debate about "confiscation" versus "redistribution".
But I'm putting my money on the house to win in the end. :wink:
Quoting Gnomon
A new cri du cœur for rabble everywhere: "With mathematics (e.g. statistical mechanics) for us, who can stand against us?" :strong:
Quoting Gnomon
:clap:
¡Viva la revolución!
[quote=boethius]Perhaps I'm wrong, that Marx has the right conclusions for preposterous reasons and this casino model finally brings us the right conclusions for the right reasons, but that seems far fetched.[/quote]
Perhaps.
Quoting 180 Proof
Agree with the latter, not so much the former. The way to push for la revolución! is through mass movements and the politicians elected by them, not by a crossed-fingers faith in bourgeois economists, politicians and the...IMF.
Except Marx's argument in Capital is that, under the basic assumptions outlined in a free market economy, a Capitalist system will inherently produce inequality because of the social relationship between the proletariat and the bourgeoisie, and the latter's drive towards profit in order to remain within the bourgeois class, not necessarily or exclusively the "intentionality" to exploit or immiserate.
:snicker:
But really, OP is 150 years too late.
No amount of statism and legislation can correct inequality, and worse, we risk burying ourselves beneath more regulations and rules designed by technocrats, most of which already hinder our chance at income mobility.
The linked articles make the opposite argument: That State intervention is necessary, because there is no intrinsic mechanism in a capitalist economy to keep inequality from rising.
How do you account for that finding?
Yeah, but you don't ever want to know who lives there.
Did anyone mention tax havens with some 15 trillion in wealth held in the Bahamas.
The upside is entrapment. Let's see if anyone knows what I mean by that.
For one it is based on the yard sale model, in which wealth is never created, it is only exchanged, can we really see that as an accurate representation of reality? For instance it basically means that you are always paid what your work is worth (plus or minus a tiny amount), so if you force 1000 people to build a luxurious palace for you and you give them $1 a day in compensation for their work, supposedly that palace would be worth about the total amount you gave to the workers, which is obviously wrong. Say they build it in 1000 days, that palace would surely be worth much more than $1 million.
This model would have luck or randomness as the main force driving economic inequality, while ignoring the forces that actively act to create and maintain that inequality for their own self-interests. The other article you linked gives a much more plausible account of what actually goes on:
Are we really to believe that the rich do not exploit the poor, always pay them what their work is worth, do not act to profit at the expense of others and are only innocently exchanging wealth in a big yard sale?
We have the technology to produce basic necessities much more efficiently than in the past, why do so many people struggle so much to get them still? It's not the result of an unfortunate law of mathematics written into the fabric of the universe, it's by design. The vast majority are made to struggle, so that they earn just enough to pay rent and food and a tiny surplus to keep them entertained and prevent them from revolting. The more they struggle without revolting, the more the rich can profit off their work and enjoy the results. The surplus of wealth produced by the workers doesn't go back into the hands of the workers, it goes and stay in the hands of those they work for, so that the workers keep struggling and producing a surplus that they never get to enjoy.
Money held in offshore tax havens can sit there till it rots, which nobody wants.
This is fundamentally an issue about fractional lending and credit. As long as there are people willing to work (something that will never end), the economy will grow.
As I posted in another thread, then there's deflationary tendencies ongoing that will supply the prole with unimaginable goods.
All in all, here's the takeaway. If money is kept and stored, then it isn't doing any work, and hence deflation takes place. I'm quite content with letting the house win everything because it increases my purchasing power through deflation.
I give the articles the full benefit of the doubt. I just don’t think giving the state more power over our private affairs is the answer.
I don’t think so. I suspect my views would be more anarcho-capitalist, though I wouldn’t call myself one.
You’re right. I do not see income inequality as it’s own problem. Poverty is a problem, but wealth and success is not.
What I agreed with is that income inequality is inevitable in a free market system. I do not think free markets result in the poor getting poorer. The poor are much richer than they were, say, 50 years ago, especially in societies built on free market principles.
Yes. Money is a metaphysical form of Energy, which can be both constructive and destructive. The trick is to control the flow to maintain a safe level of warmth (profit) while avoiding burning down the house. All of the political and economic systems we've tried so far have found it difficult to hit the sweet spot. Some tend to enrich the rich, and others to impoverish everyone. Venezuela is an example of a nation with vast resources that are squandered due to lose/lose political squabbles : Marxists versus Capitalists, and apolitical masses in the middle get trampled.
Economics is not for nothing called the "dismal science". But I am encouraged by this new economic model to hope that both Socialist and Capitalist economists will be able to agree on the numbers, if not the specific goal : free market vs balanced distribution. If both sides can at least agree on the mathematical facts, maybe they can find a way to meet in the middle with win/win solutions, rather than to swing to one extreme or the other. Thinkers in the past -- Adams, Marx, Carlyle -- have intuitively grasped the inherent disparities in resource and wealth distribution. But more accurate mathematical models should allow for better rational planning, and less political footballing. One can hope. :smile:
"Dismal science is a term coined by Scottish writer, essayist, and historian Thomas Carlyle to describe the discipline of economics. The term is said to have been inspired by T. R. Malthus' gloomy prediction that population would always grow faster than food, dooming mankind to unending poverty and hardship." https://www.investopedia.com/terms/d/dismalscience.asp
Then you are not, in fact, giving the quoted articles the "benefit of the doubt" as you claimed.
Quoting Pfhorrest
:clap: :clap:
I am, in fact. What I disagree with are the statist prescriptions.
In which period, then, is the poor wealthier than they are today?
Then you should be down with libertarian socialism, which is anti-state (hence libertarian) but still looks for other ways to solve the problems of capitalism rather than just ignoring them.
Quoting NOS4A2
You just named one: 50 years ago. An average person my age in America 50 years ago would be well on their way to homeownership and eventually getting out from under the thumb of their landlord/bank, whereas I’m way ahead of most of my peers and lucky to own a tiny mobile home on rented land.
It’s the socialism part I’m opposed to. We shouldn’t ignore its dismal and in fact deadly track-record.
I was speaking of the poor, not an average person. How was it better to be poor in the 50’s than today? Did they have a better quality of life? A higher lifespan?
You seem to think "socialism" implies statism; I'm guessing you're thinking of the USSR. "Socialism" just means any system that avoids the consequences described in OP, of runaway wealth concentration. Libertarian socialism aims to do that without using the state; libertarian socialists are generally anarchists, and anarchists are generally libertarian socialists. Have you ever read anything at all about libertarian socialism?
Quoting NOS4A2
You wanted to define poverty in absolute terms earlier, yet here you seem to want to define it in relative terms. My point was that average people are much poorer today than they used to be; more people are poorer in absolute terms.
In absolute terms, I am poor; even if I could somehow magically consume nothing whatsoever, I am trapped in a situation, that I was born into, of owing someone or another money just for the right to exist somewhere without breaking the law, and am only very slowly making progress on the very long uphill climb to escape that situation. But in relative terms, I am ridiculously wealthy; I have a much higher income than the vast majority of individuals in this country (half of whom make half or less of what I do) and consequently a much larger safety net (compared to most people who have zero safety net) because I am actually making some progress toward climbing out of this hole (compared to most people who are making zero if not negative progress).
Fifty years ago, only people who were relatively poor -- poorer than average -- would face this kind of absolute poverty, and relatively average people would be better-off in absolute terms than even I am. Now, because of runaway wealth inequality, even people who are relatively wealthy, like me, are poor in absolute terms.
Housing is just my go-to example, BTW. Health care is another good one. Flat screen TVs and avocado toast are non-sequiturs, so don't even go there.
I’ve never heard that definition of socialism.
I’m a big fan of Rosa Luxenberg and Orwell, but they spoke in a time of revolutionary upheaval, so I forgive their mistakes.
I was speaking in terms of comparison, not absolute.
Yes, people are more wealthy today—financially, health-wise and in living standards—than they were 50 years ago. Not only that, but countries that only recently instituted free market policies are much wealthier now than they were only 20 years ago (China for example)
Socialism in its broadest sense means any system where there is not an economic class divide between those who own and those who work; where everyone owns some of the means of production and everyone works them too. That division into owners and workers is the definition of capitalism; "free market" is not sufficient to count as capitalism, and there can be non-capitalist free markets, and non-free-market capitalism. It was actually Marx who first argued that free markets inevitably lead to capitalism, much to the disagreement of the other socialists of his time, the ones now called libertarian socialists in contrast. Libertarian socialists are the continuation of the original liberal movement toward both liberty and equality; those liberals who did not abandon equality for capitalism became the first socialists, and those socialists who did not abandon liberty for statism after Marx and then Lenin et al are the libertarian socialists.
That division into non-working owners and non-owning workers is the consequence of the problem described in the OP, and described by older socialist thinkers. Anyone who wants to avoid that division into owners and workers is some kind of socialist, whether they realize it or not.
Quoting NOS4A2
In terms of comparison, a growing inequality definitionally makes more people poor, even if their absolute material conditions don't change or even improve, so "in terms of comparison" your argument is even weaker.
Quoting NOS4A2
Not in places that were already developed capitalist countries then and still are now, like America. I gave you a couple of big examples in my last post to the contrary, so you can't just assert "nuh uh" in response. Show me how fewer Americans are poor today than 50 years ago, in terms of real basic necessities like housing and medicine, not luxury technological advancements like phones and computers.
Quoting NOS4A2
That's because those countries are also developing countries, technologically-speaking. Of course a country moving out of an agrarian period into an industrial period is going to get richer. That's not a consequence of their economic system, that's a coincidence.
Also, countries getting richer does not mean their poor are getting better off. Saudi Arabia is a fairly rich country, but almost all that wealth belongs to the royal family. Oil sales don't benefit the Arabian plebs much.
I wouldn't loosely categorize Socialism as merely restraining the power of capital, as this doesn't necessarily strike at the heart of the power relations structured within capitalism viz., the relationship between an ownership class and a class of wage laborers. Otherwise, the capitalist class retains the power to disencumber restraints on capital and well...we all know what Marx said about Hegel's statement regarding history and repetition. Socialism requires overcoming the struggle between Capital vs. Labor, so that there is only Labor (or more broadly, the citizenry, or the people) that is in (democratic) control of Capital. To my mind, this would require restructuring ownership of means of production into worker cooperatives, and state ownership (within free, fair, universal democratic elections) of non-competitive industries (e.g. land, transportation, healthcare, education).
Quoting Pfhorrest
Yeah right-wing libertarians typically argue for capitalism on deontological grounds, fully understanding that the consequences of capitalism often don't benefit people (this is why libertarianism often goes hand-in-hand with virulant racism).
:up:
:clap:
You're denying capitalism leads to escalating income inequality without some form of outside influence. That's a factual claim that made in the articles, not a prescription. You need to deal with this factual claim somehow.
Yes, that's why I say you didn't need to preamble with a digression about Marxism, just talk about the article, but if you do preamble about Marx then it's fair to expect more digression about Marx. I have no problem with just considering the linked article's merit and implications; likewise, I have no problem discussing the Marx critique of capital and relation of it to this paper as well.
I’ll accept your broad sense of socialism.
But I don’t think there is much a distinction between owner and worker. It is more difficult and risky to start and run a business than it is to apply for a job and work for a wage. There is overhead, regulations, looking after employees, taxes and management. Owners are themselves workers. Many of us are self-employed, supply a service, do the work, provide jobs.
The distinction is between the private citizen and the state, the rulers and the ruled, those with the monopoly on property, on violence, on security, and those who must obey them and live by their rules.
“Luxury technological advancements”? The ease of travel, communication, access to information, medical technology, food technology, etc. all raise the standard of life for the poor. We’re living in a period when the poor in America are overweight, the first time in world history where the poor are taking in too many calories.
It wasn’t only countries moving out of agrarian period (with collectivized farms and socialist, statist tinkering) but also developed countries like Sweden, Norway, Denmark, who had to cut government spending and open up markets.
I'm sorry if my assertion about Marxism being "out of date", offended you. However, it wasn't a digression, but integral to my understanding of the article as an "update" of older theories, such as Smith and Marx. Besides, I was directly responding to the Marx reference in the original quote.
Do you think it's unfair to interpret the new statistical economic model as a valid "update"? I saw it as similar to Newton's law of gravity, which was updated and refined by Einstein, but not invalidated. I have no training in economics, and only a philosophical (not political) interest. So I may have overstated the importance of the Capitalist Casino concept.
I saw in it a more politically neutral view of who's at fault for the money/power inequities of the world. If the Matthew Effect*1 is inherent in any economic system, then there should be mathematical/rational solutions that men of Good Will*2 can agree on. Rather than relying on civil wars and military revolutions to throw the rascals out, perhaps -- in some Utopian future state -- we can keep the economy balanced with win-win strategies, instead of win-lose. Is that totally naive? :cool:
Matthew Effect*1 : https://en.wikipedia.org/wiki/Matthew_effect
Good Will*2 : this assumes that "bad will" is a minority trait
No offense taken. It's a digression if you want to talk about Marx, but framing something as "baseless out of date" is unclear if you want to talk about that thing or not. Certainly out-of-dateness is a fair and debatable point of old theories. Likewise, your following sentence, that the upper class oppresses the workers is also worthwhile to discuss if it's a fair characterization of Marx as other posters have also responded to.
Quoting Gnomon
Yes, I definitely think it's a good analogy to Newton, that Marx discovered some true principles that resulted in valid predictions (as well as false ones; where we can draw a parallel with Newton's focus and writing on alchemy), and that we have since both discovered new principles and verified new predictions.
Of course, there's a large body of work beyond this paper on inequality, most importantly empirical work showing inequality really does increase under laissez-faire policy frameworks.
For me, the significance of this paper is more as a retort to the "tabula rasa" hiding place / fantasy of laissez-faire proponents (that it's always whatever regulations remain that have caused the inequality, corruption and market failures and not the regulations, designed over centuries to keep inequality, corruption and market failures in check, that were removed).
The paper does it's best to create the laissezfaire fantasy world and simulate what happens. So, the point is that even with granting the laissezfaire proponent's insistence that things like corruption and asymmetry and unequal starting points can be simply ignored, their model still doesn't seem to work (unless the goal is to create oligarchy rather than a free and happy citizenry).
However, nowadays proponents of deregulation and lowering-tax-on-the-rich and removing anti-corruption laws have mostly abandoned the idea that these things are good for society in general; the paper in question is a small addition to a large pile of both theoretical reasons to believe as well as empirical reasons to believe deregulation, lowering taxes on the rich and legal-corruption are all bad for society (of course that doesn't immediately inform us what regulations, taxes and anti-corruption measures are worthwhile, just that the principle that getting rid of them will magically achieve those objectives even better is completely implausible and delusional, or more likely just propaganda from people who want those things regardless of wider social consequence).
Instead of making the case that removing these restrictions on the accumulation of and use of capital just so happen to create a situation those restrictions where designed to achieve, proponents of deregulation, lower-taxes-on-the-rich, and legal-corruption have moved to moral arguments instead of scientific (once empirical evidence is overwhelming it works less and less well to keep making ridiculous claims that are so easily checked to be false).
At least with moral arguments, it's not easy to just check that they are false. If one wants a world dominated by the wealthiest and one simply places no value on anyone else, then such a moral theory is perfectly sound. Likewise, if one is convinced taxes are theft and immoral then it can follow from this that no one should be taxed even if that means collapse of government and mafia rule, and it can also follow from this that lowering taxes of the rich is good to support even knowing that the rich won't reciprocate and lower everyone else's taxes to the point of collapse of the justice system, infrastructure etc (as it's simply the right thing to do).
Of course, few people really have values compatible with wanting a much worse society with much more suffering because taxing the wealthy is a worse crime, but it's much more work to carry out such an analysis and it will be different for each person what exactly their values are and why exactly a functioning society is better than a dysfunctional one for them and to what extent they would lift a finger to promote actions leading to such a better society in their definition; i.e. moral argumentation is not universal whereas the whole purpose of science is to be universal (we can all follow the same observations to same conclusions; so once something really is well established the same body of evidence and argumentation is valid for everyone); hence, why science denialism dressed up as some sort of moral crusade, including denying obvious economic realities, is at the heart of the movement for deregulation, lower-taxes-on-the-rich and legal corruption (which in turn corrupts various scientific institutions which helps, in part, to reinforce scientific denialism; i.e. regulatory capture of supposed objective watch-dog agencies as well a gaming, wherever possible, academics to be biases or at least easily pliant, leading to lot's of ethical failures that can be legitimately pointed to as examples of why self-labeled scientists and institutions cannot necessarily be trusted). Switching to moral arguments allowed 1 or 2 more decades of effective propaganda, but these arguments too are now losing effectiveness and methods of interpreting science without deference to experts have been developed (investigating conflicts of interest, better explaining the actual evidence and logic and evaluating how strong the evidence is or if it's just people paid to say-so).
But without the Hegelian baggage.
While I was in college, many years ago, Libertarianism seemed poised to become a viable third party in the US. What happened? Libertarians are now usually found on the right aisle, and are mainly allied with the Republican party (I suppose because they are opposed to state intervention). I'm a Militant Moderate, so the current move of both parties to extreme positions make it almost impossible to meet in the middle. So nothing of substance gets done. And the only way out of the impasse may be a Marxist versus Fascist revolution. Are there any Philosopher Kings out there for 2020? :sad: