Though in general, I think there is an obvious trend in markets - if the people are rich, you reinvest money into new products or into improving your existing products so you can sell more stuff. When the people are poor, you use psychologically targeted advertising to make people buy things they cannot afford and sit on vast cash reserves because fundamental to capitalism is that markets respond to the needs of capital, but when you have incredible wealth inequality the only demand of capital is making more capital, and sitting on money becomes more profitable to shareholders than taking risks trying to get the drippings out of an already empty pot of middle class wealth.
Simply put, my favorite metric of whether an economy is fair is how large an advertising budget the economy as a whole has. The larger it is, the less fair the market is, and the more unequal the wealth distribution is, and every society should aspire to be one where nobody needs to advertise because all your reinvestment can go into making more, better stuff rather than trying to manipulate people in buying your stuff over someone elses stuff. The more valuable advertising is the poorer your country is.
I say better financial education, and then the next step.
I don't think it's enough, though, when you're trying to stretch a $230 paycheck to $300 in expenses.
I don't think it's enough, either, when you look at how poor people get dinged with so many more fees than the less-poor whenever they go out to do anything in the world.
And I don't think most of the "save what you can" advice is particularly meaningful when you're telling people to put aside $10 a month. One big family gathering could wipe out a year's savings on food costs alone!
I think the first solution has to be getting people--especially the poorest--paid more for the incredibly taxing work poor people tend to do, like cleaning, cooking, all those jobs where you're on your feet 8, 10, 12 hours a day and your body's worn out by the time you're 40.
Oh and the decline of unions meant that workers lost their ability to successfully lobby their government, business meanwhile increased their lobby efforts.
So, I see the root causes as a rigged game against workers. (Rigged as the odds slightly against our favour, so we get just enough wins and benefits as to not realize that we are loosing overall).
Take 2 different scenarios:
1) Youth gets paid $4/hr (well below the minimum wage) to work in their chosen field as an apprenticeship. Graduates with a certification in their field with a little bit of money saved up, no debt, and real work experience.
2) Youth gets into massive student loan debt, gets a degree but has no real job experience or employment prospects. Has to work the next decade to pay off their student loans.
The one that makes the most sense and that would result in people being better off is illegal.
Two of the three would be the death knell for our economy, whereas the third is politically unpalatable.
My high school had a financial literacy requirement, but it was a half year class taught by one of the worst teachers I've had (very nice lady but like the computer teacher they were just riding out to retirement and relegated to these classes that were undersupplied and they weren't knowledgeable in), the content was out of date, and sparse. They cover things like writing checks, bank account creation, but I remember nothing covering how loans work or anything of that nature because the math required would make the class too tough for general education. The class was really something the school just paid lip service to as the state required it. It's a damn shame school's don't have better experiences because people enter the world totally unequipped for the financial predators that loom.
Loans (interest, and also contracts in general) are not required to be presented at a level that /most/ of the population can understand. There is a giant, thick, legal language contract that even if you are a lawyer you probably don't really understand (it hasn't been adjudicated, so you don't know what a judge feels it says).
Disclosure: I do use credit cards, but only as a convenient and insurance providing mechanism for accessing my bank account and recouping some of the fees built in to prices by the predatory banking industry.
In nature, getting between a mother and her baby is perhaps one of the most dangerous situations you can be in. very few predators, unless they are out of options, consider humans a viable meal. But even ruminants will potentially attack you to defend their young.
Trying to treat humans as cold calculators of utility is perhaps the worst idea economists have clung to over the years.
If you downvoted the parent of this comment and would like to help me do better in future, I'm all ears...
If anyone is interested, I recommend reading up on socialist theory. If you like markets mutualism, market socialism, or collectivism may be interesting to you. If you think planning might be a better route for the 21st century check out syndicalism or communism. There's a number of other philosophies I'm not acquainted with. Also, inb4 "communism/socialism is big government and authoritarianism", I'm tired of explaining the failings of tankies.
There hasn't been any evidence yet that central planning is effective in the long run. What do you think will work this time around?
Central planning and command economies work really well inside corporations, such as Apple or Google. They don't make internal decisions by hosting mini-markets and pitting their workers against each other, they have departments who study demographics and departments that study research and logistics and so on.
Tankies claiming the fall of communism is just around the corner are in the same bucket of "bad" as free market libertarians who adore corporations.
That's because they can fire anyone that works for the company who doesn't agree with the goals. Do you propose to jail or disappear people that disagree and work against the direction defined by the central plan?
Again though, I'm not here to talk about the failings of autocratic state planning advocated by tankies.
That said, while most people seem to barely know about his writings in Capital Volume 1, Volume 2 and 3, published by Engels after Marx death, went on to point out that while there was a struggle between the factory owning capitalists and their workers. There was also a struggle going on between production capitalists and finance capitalists. And that the ultimate culprit of capitalism was likely to be finance.
IIRC, Marx even noted that in the long run it would likely be better for production capital to ally themselves with the workers against finance. But that production capital was more likely to squeeze the workers as they themselves got squeezed by finance (with landlords and other rent seekers lumped into finance).
Managing static resources is easy.
Now, cooperatives are interesting. They mostly don't work, but when they work, they are great.
What we call "capitalism" is a perverted incarnation with low interest rates and extremely high monetary inflation. This eliminates the ability to save for the lower class, and pushes in the middle class into wall street's fake "investments" where they can be scavenged by management fees, insider gaming, and bubbles caused by the surplus of dumb money.
Despite what the inflation acolytes preach, prices should be downward trending because price is the primary metric that an economy optimizes for! Gains in productivity should be directly reflected in the price of goods (eg computer technology, which has been advancing strong enough to resist the forced inflation). Instead, these gains are inflated out of sight and the corresponding new money is distributed to the gatekeepers of monetary creation.
In a functioning economy, workers should be able to gradually save some surplus, decreasing their reliance on weekly income, and giving them more bargaining power. This should cause wages to rise, creating a feedback cycle where workers demand to work ever less (as their marginal utility per extra dollar drops).
Instead, extremely low interest rates create a zero-sum treadmill for any modern necessity that can be financialized (eg housing, healthcare, cars, education), leaving us to compete against one another for minute changes in standing while the banksters collect the surplus as rent.
Then again, perhaps my argument is just a no true Scotsman similar to the ones defending communism, and any fiat capitalistic system will eventually succumb to itself and centralize in this manner (deprecate wealth in favor of income).
What I do definitely know is we're not going to get there by demanding top-down change, because the top retains power for itself regardless of what paradigm it promises. We must secure our freedom through technological means and build a better system from the ground up.
The point about organizing from the bottom up is spot on. I believe many of socialism failings were because of attempts to organize top down and not allowing people to manage themselves. This is why I'm particular to anarchism, as the focus is on creating freely associated communities that come together so power comes from the bottom up and there are no concrete hierarchies. Many also have abandoned the idea of some great revolution to topple the system and instead opt for building structures like co-ops, mutual banks, neighborhood assemblies, community gardens, and charities in hope of building a new society in the shell of the current one.
The goals of society at large should be reached through agreement.
These goals might be reflected in decreased costs (or even funding) for desired activities and 'taxes' on undesired or activities that should be limited; or maybe through another agreed means.
Individuals, and possibly small groups of individuals, should then be free to choose their own means and methods for realizing those goals (or abstain from that process).
In that case the solution is not communism, the solution is compensating people with stocks or other forms of equity.
less than 1% of the population make minimum wage. Most companies, even the big ones you hate, pay well above minimum wage. For instance, All of the fast food places in my area pay $10.15/hour starting. The minimum wage is a few dollars less than this. The free market has pushed the wages higher, because nobody will work for less than this.
"I dream of a world in which the typical worker's wages hadn't been suppressed and decoupled from productivity for the last four decades"
It hasn't been suppressed or decoupled. If you have essentially have the skills that a high school student can perform at 30 years old, you aren't going to get paid enough to have a house, 2 kids, and a car. I see nothing wrong with this. If anything, the wages in the past were artificially inflated. Especially when you factor in unions.
We also are now competing globally. The beloved Internet has also created an environment where we need to compete with someone overseas making much less.
It has many parallels to file sharing over the last decade: musicians and artists now have to compete with the filing sharing sites because of the Internet and this same paradigm shift has now moved to other industries and jobs. The only difference is that I don't see people here on HN crying out to give the artists money through government intervention. Quite the contrary.
"and give it away instead of tryin' to get us all to punch the monkey and win"
I don't really see a problem with so many people trying to make money online. Money has fueled pretty much every technology breakthrough in the last 50 years.
Money also gives you power..over your own life and your own decisions. I started my own business online 5 years ago. I can schedule my own vacations and I don't need to answer to a boss. This is true freedom. I also contribute to many open source projects. When I was working for a living, I contributed nothing.
Your 'dream' would mean that most things online were free, ruining the ability for the independent artist to actually make a living with what they love. The end result would actually mean less freedom because our only choices would be working for the government or a large corporation.
The need for money will not go away any time soon and the person with the money makes the rules.
What we need is more educated people (so they don't have to work terrible jobs for little pay) and more people starting businesses and making money doing what they truly love (creating a more independent society).
I don't think so. Not according to this[1]. Besides, close to minimum wage is hardly live-able.
[1] http://poverty.ucdavis.edu/faq/what-are-characteristics-mini...
I dream of a world in which the typical worker's wages hadn't been suppressed and decoupled from productivity for the last four decades, and people had the disposable income to work less and write and make art more, and give it away instead of tryin' to get us all to punch the monkey and win. I dream of a world in which we can ALL punch the monkey and win! Well, ok, maybe not, but still...