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Reilly
Mountain climber
The Other Monrovia- CA
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Jul 22, 2015 - 08:15am PT
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Unadulterated poppycock not worth commenting on except to note that the author floats his
three premises with pure methane. Markets will ALWAYS achieve efficiency unless
restricted by meddlesome governments.
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mouse from merced
Trad climber
The finger of fate, my friends, is fickle.
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Jul 22, 2015 - 08:17am PT
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Sorry, the new font style turned me off...it's difficult to read so f it.
And I DON'T CARE ANYWAY!!!!!!!!!!!!!
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survival
Big Wall climber
Terrapin Station
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Jul 22, 2015 - 08:20am PT
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Whooo boy, this one should bring some fun out of the woodwork!
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EdwardT
Trad climber
Retired
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Jul 22, 2015 - 08:26am PT
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Derf, derf, derf.
Gersh gurndy morn-dee burn-dee, burn-dee
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MikeL
Social climber
Seattle, WA
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Jul 22, 2015 - 09:15am PT
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A complicated argument (and lengthy one at that).
It’s always "the end of the world"--as we know it. Things are always changing, and that especially includes metrics for measuring (and even) what constitutes success. Profit-maximization and serving self-interests are myopically short term, narrow, and increasingly seen as subordinate and not fully relevant to other objectives.
We are awash in data these days. Information has inundated us. It’s no longer helping so much.
An orientation toward efficiency presents the old traditional (Smith, Taylor, Fayol, Sloan, Chandler, etc.) reductive, predictive, mechanistic models of organizing and management. Efficiency requires highly honed structures and processes, and perfect information. Such models fail when environments invariably shift rapidly, unpredictively, disruptively. Flexibility, resiliency adaptability, entrepreneurship, innovation, openness, non-categorical thinking, creativity, engagement / commitment, vision / mission / purpose, collaboration, radical empowerment, trust, distributed capabilities . . . these are the characteristics that describe successful organizations today. What’s needed are organizations that benefit from or use shocks (so-called, “anti-fragile systems”)—like viruses or Al Qaeda or ISIS.
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NutAgain!
Trad climber
South Pasadena, CA
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Jul 22, 2015 - 09:23am PT
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Markets will ALWAYS achieve efficiency unless
restricted by meddlesome governments.
Reilly, if you've taken an economics class in college (or even high school), this statement does not reflect that acquired wisdom.
Here's is more background on different theories or schools of thought on what constitutes a "free" market and how to achieve efficiency:
https://en.wikipedia.org/wiki/Free_market#Concepts
A relevant quote:
...This result is described as market efficiency, or more specifically a Pareto optimum.
This equilibrating behavior of free markets requires certain assumptions about their agents, collectively known as Perfect Competition, which therefore cannot be results of the market that they create. Among these assumptions are several which are impossible to fully achieve in a real market, such as complete information, interchangeable goods and services, and lack of market power. The question then is what approximations of these conditions guarantee approximations of market efficiency, and which failures in competition generate overall market failures. Several Nobel Prizes in Economics have been awarded for analyses of market failures due to asymmetric information.
The point of government regulation is not "to be meddlesome and mean to corporations" but to create the conditions that most closely approximate the ideal conditions, including freedom of choice and access to information.
Both the seller and the buyer need to have access to all relevant information and both sides need to be willing and able to walk away from the transaction. Under these conditions, you have a natural balance of power. In the absence of government regulations (which is your narrow definition of "free") you are letting corporations do whatever they want, and then you have an imbalance of power in economic transactions between buyer and seller, because in some circumstances the buyers don't have alternatives, they can't walk away from the transaction, and they don't have access to the information to make an informed decision.
Here's a specific example of how access to information and regulation relate to each other. In California in 2012, Proposition 37 proposed mandatory labeling of foods that have GMO ingredients. Access to more information to make informed purchasing decisions is good for consumers, and yet voters turned down this proposition!!! Why and how could that be? Because corporations feared lost sales if consumers knew what they were buying. So they meddled in government affairs by funding the distribution of misinformation that deceived and confused voters and skewed the election.
How could corporations (and rich individuals who have something to gain by the continued success of the corporations) achieve this result? Anyone really trying to create the conditions of a free and ideal market would see that something is broken there. That condition is becoming more prevalent because of past and ongoing corporate (rich and power individuals behind them) meddling in government affairs. The Citizens United Supreme Court ruling opened the floodgates for this to happen. There is a very definite imbalance of power, and it continues to swing further out of balance because the corporations have successfully found a weakness in the legal mechanisms to protect consumers, to put buyers and sellers on equal footing (and keep corporations from becoming so powerful that they are essentially dictatorships that can grow more powerful than the countries in which they started). That weakness is campaign finance. It will be the chief downfall of our society if we don't fix it, and maybe its already too late.
I think these concepts could be explained to almost everyone in a manner that they would understand and see what is in it for them personally.
Reilly, can you point out something that seems not right about what I have said here, and tie it to how your life would improve as a result of changing it? Would it also help most of our society, or just a very small minority (e.g. stockholders of specific companies).
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deschamps
Gym climber
Flagstaff, AZ
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Jul 22, 2015 - 09:50am PT
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Markets will ALWAYS achieve efficiency unless
restricted by meddlesome governments.
You should take some economics classes. You will learn why this is not true. Research "externalities."
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JEleazarian
Trad climber
Fresno CA
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Jul 22, 2015 - 10:21am PT
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I read the Gaurdian daily, so this article amused me. I would say the first comments in the Gaurdian understand capitalism much better than the author of the article. The author would be well-advised to read George Stigler's article on the theory of the firm, written more than a half century ago.
Markets will ALWAYS achieve efficiency unless
restricted by meddlesome governments. [Emphasis supplied]
The point of government regulation is not "to be meddlesome and mean to corporations" but to create the conditions that most closely approximate the ideal conditions, including freedom of choice and access to information.
Both the arguments for and against the quoted proposition about market efficiency depend on definitions, and end up largely tautological. What is a "meddlesome" regulation? As the second quote points out, the point of regulation is "not to be meddlesome." Can we define a "meddlesome regulation" therefore as one that misses the point?
You also need to define efficiency, not optimization. A Pareto optimum means there are no more mutually beneficialy exchanges. An efficient market is one that has all information available to all participants at the same time, and where price responds immediately to new information.
When Eugene Fama and others propounded the efficient market hypothesis, they were not saying that the definition, above, is true. Rather, they hypothesized that markets behaved as if that definition were true. They did so specifically to claim that the best predictive model of stock market prices was a random walk.
John
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Jan
Mountain climber
Colorado, Nepal & Okinawa
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Jul 22, 2015 - 10:21am PT
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I can't help but remember Alan Greenspan's incredulity that the banks who brought about the sub prime mortgage collapse "would act against their own self interest".
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JEleazarian
Trad climber
Fresno CA
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Jul 22, 2015 - 10:24am PT
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that the banks who brought about the sub prime mortgage collapse
Jan, I beg to differ. The needed economic correction of housing prices brought about the subprime mortgage collapse. TO lay the blame solely on the banks ignores every other actor who brought this about.
John
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NutAgain!
Trad climber
South Pasadena, CA
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Jul 22, 2015 - 10:40am PT
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I don't agree with many points or assumptions in the article, but it does raise quite an interesting conversation.
once knowledge becomes a productive force in its own right, outweighing the actual labour spent creating a machine, the big question becomes not one of “wages versus profits” but who controls what Marx called the “power of knowledge”.
In an economy where machines do most of the work, the nature of the knowledge locked inside the machines must, he writes, be “social”
This is updating the socialist/community-centric society models into an information age. The same ideals and the same pitfalls exist. It boils down to who owns the fruit of each individual's labor, and what incentives are there for individuals to work hard and create innovation. That said, the information age IS more sensitive/reactive though, in the sense that small changes in the ownership of information can make HUGE changes in the distribution of wealth and power and ability to control the ownership of future information.
One other interesting point (which I'm not sure was actually in the article or is my own post-reading digestion with my reactions mixed in), is the focus on value. People trade things based on their assessment of equal value, and money is an intermediary that facilitates any-to-any trade without having to find someone who wants what you have and who also has what you want. Aside from material needs that are the typical focus of economics, people also have need to be loved/appreciated/respected, to feel belonging, to be remembered or leave a legacy... these types of needs create individual motivation to create value. We can think of a person selling their time to develop an open-source software component or share something of their knowledge and receiving the currency of group acceptance, appreciation, and the sense that they are leaving something of value for the future ("leaving a legacy"). I don't know how economists account for these types of emotional, spiritual, and intellectual currencies and trading, but it seems to be central to understanding the dynamics of our society and how to reshape it toward some more collaborative ideal. Just focusing on the exchange of material currency is missing a big part of the picture, and is perhaps this hole in our economic foundation is what lead to the imbalance of power with corporations focused on material acquisition.
Maybe real advances will be made in socialist agendas when we take a hard look at the personal incentives for individuals to participate in a community, and accurately account for the costs and benefits of it, in terms of physical, intellectual, emotional, and spiritual value.
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nah000
climber
no/w/here
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Jul 22, 2015 - 11:09am PT
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2 cents [ok maybe more like 25]:
problem with this article is that it doesn't accept that if there is to be a "post-capitalist" system it will be built on a foundation of capitalism. [and in the face of automation and the limits of the natural world the only alternative to a new system - that likely will include among other things a guaranteed income - will be continuous and entrenched physically violent class warfare]
a new system will not, as he states, replace capitalism.
one of the statements he begins with is that capitalism replaced feudalism. this is mistaken: capitalism was built on and continues to be rooted in feudalism.
capitalism was and continues to be built and grounded [for better and for worse] on a foundation of feudalism [a centralized banking system that puts the ability to create the mode of exchange in the hands of a few, rather than the many].
in a parallel manner a second premise of his is also flawed: "post-capitalism" will not replace capitalism. if a new system is to succeed it to will also be built on the foundation of the system that made it both possible and then necessary. just as it was due to the successes of feudalism that capitalism became first possible and then necessary it will be due to the successes of capitalism that a new system will be first possible and then necessary. [and in both cases it is also due to the shortcomings of the old systems that new systems built onto the old foundations were and will be required]
just as the successes of industrialization expedited and necessitated the creation of capitalism and also inevitably led to safety nets, labour protection laws, etc. and etc., automation and a networked world will also lead to a new system built on old foundations.
however, if it is to be successful, this new system will not replace capitalism.
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MisterE
Gym climber
Being In Sierra Happy Of Place
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Topic Author's Reply - Jul 22, 2015 - 11:21am PT
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One thing is for certain, systems that fail
invariably fail
to see it coming.
I think that was an important point of the article.
nah000: Another point is that paradigm shifts are way more probable in the information age, as well - less static, more fluid.
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Big Mike
Trad climber
BC
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Jul 22, 2015 - 11:26am PT
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“It is the elites — cut off in their dark-limo world — whose project looks as forlorn as that of the millennial sects of the 19th century. The democracy of riot squads, corrupt politicians, magnate-controlled newspapers and the surveillance state looks as phoney and fragile as East Germany did 30 years ago. All readings of human history have to allow for the possibility of a negative outcome. It haunts us in the zombie movie, the disaster movie, in the post-apocalytic wasteland of films such as The Road or Elysium. But why should we not form a picture of the ideal life, built out of abundant information, non-hierarchical work and the dissociation of work from wages? Millions of people are beginning to realise they have been sold a dream at odds with what reality can deliver. Their response is anger — and retreat towards national forms of capitalism that can only tear the world apart. Watching these emerge, from the pro-Grexit left factions in Syriza to the Front National and the isolationism of the American right has been like watching the nightmares we had during the Lehman Brothers crisis come true.”
Dry read, but very interesting material. When money fails to buy milk and bread we will inevitably have to look towards the next social order. May co-operation rule the day!!
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Big Mike
Trad climber
BC
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Jul 22, 2015 - 12:21pm PT
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E- you were supposed to like this on facebook so it could receive a larger audience... ;)
Edit Lol John of course.. I was just bugging E..
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JEleazarian
Trad climber
Fresno CA
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Jul 22, 2015 - 12:37pm PT
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He shared it on Facebook. Does that count?
John
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Jan
Mountain climber
Colorado, Nepal & Okinawa
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Jul 22, 2015 - 04:38pm PT
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Man's understanding of nature has always been linked to his economic system. For 99% of our time on this earth we lived as hunters and gatherers, finding our food whereever we could (200,000-8,000BC). Next we figured out how to domesticate animals so that we could milk and bleed and kill them at our leisure instead of chasing them down. We then figured out horticulture which is primitive farming with a stick or other hand held instrument.
Next came agriculture around 6,000 BC which was the basis of the fuedal system - massive crops made possible by irrigation and plows, that could be taxed by elites who then perpetuated a class system. This was followed by the fossil fuel age in which we are currently immersed, which made industrialization including agribusiness possible. That has only gone on now for about 250 years. Both capitalism and Marxism are responses to that. Although one can argue that incipient capitalism started before industrialization, it was industrialization that brought about its triumph.
When the fossil fuel runs out, our subsistence mode will have change yet again, so it makes sense that we will look back on capitalism as a 3-4 century phase of human history while Marxism in state form anyway, lasted less than that. The information economy will have to be based on an energy source other than fossil fuels and on a self replicating rather than endlessly reproducing demographic, assuming we don't annihilate ourselves fighting over the last of the fossil fuels. Of course there's always epidemics and food scarcity to worry about between now and then as well. Will capitalism's short term greed for pesticides and profits extinct the bees and destroy a large part of our food crops along with them? That's just one of several scenarios.
Small wonder people are interested in a post capitalist world.
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Dingus McGee
Social climber
Where Safety trumps Leaving No Trace
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Jul 22, 2015 - 07:08pm PT
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Pipe dreams? Free and abundant information does not mean free energy. There will always be a cost when moving our bodies.
Some will settle for a "movie" and the idea of the "real thing" will change more to pseudo, vicarious reproductions that placate some people.
The motivated people will figure out a way to get those "things" that free and abundant information has not yet give us/them and stay quiet about it until they get their price.
Until all the information that could be known is available/free there never will be a monopoly on new-good ideas.
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Fossil climber
Trad climber
Atlin, B. C.
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Jul 22, 2015 - 09:35pm PT
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Doesn't matter - we won't last that long.
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