I believe the canonical exploration of this idea belongs to he-who-shall-not-be-named. Rich people playing zero-sum games while the poor starve is the natural outcome of building an economy off of the notion that value creation is about doing what wealth-weighted-people want as opposed to what uniformly-weighted people want.
Obviously the best answer lies between the extremes and is a function of an economic sector's structure, growth rate, etc, rather than a single universal solution. The real tragedy is that the school of thought which pursues this angle has been so thoroughly demonized and shunned that its principles have to be rediscovered and rebranded before they can enter the arena of public discourse. On an absolute scale the ideas are simple and fundamental enough that they really ought to be a starting point for discussion rather than a conclusion.
Basic fact: for thousands of years, the big problem was making (or growing, catching, or mining) enough stuff. In the 20th century, that problem started to be solved. By the second half of the 20th century, the leading industrial nations had it solved. Then Asia caught up - Japan, Taiwan, S. Korea, and finally China. China was the big one, being a huge country. Suddenly there was overcapacity in almost everything.
Now, as I write occasionally, it just doesn't take that many people to make all the stuff. It's now possible to have a successful economy with a huge non-productive underclass. Economics and politics haven't caught up with this yet.
We agree, though. Capitalism is really, really good at growth and really, really bad at steady-state. We've never really come up with a good alternative for steady-state. I think Marx got the diagnosis right and the treatment wrong, which seems like a pretty modest hypothesis given the relative difficulty of the two. Regardless, we had better figure this out or things will get messy. Very messy.
TBH I have higher hopes for a couple more industrial revolutions to push the meltdown out beyond my lifetime. Bio and space, maybe? :/
That seems unlikely. Political and economic leadership throughout the "White West" has been subsidizing and expanding the non-productive underclass for decades.
They definitely weren't a major manufacturing economy in the 18th century.
If so, the problem must go away with a sane wealth redistribution program. (What might be much more realistic than taxing marketing.)
The technological approach is more interesting to me. If you can make distributed manufacturing efficient enough that a single person or group of people can own the capital needed to sustain themselves, you place a lower limit on the extent to which market-based social contract regression can harm a population. Alternatively, from the capitalist angle: companies that directly trade goods for labor are in a unique position to profit from a glut of labor that is not competitive on the global market.
This isn't a new idea. We call them communes. They have a well deserved reputation for being a shitshow. Probably because what they're trying to do -- boil a globe-spanning sprawl of infrastructure and trade down to an acceptable MVP -- is really, really hard. Unlike the world economy, though, that difficulty is a function of technology, rather than politics. Technology improves over time. Politics does not. Which means there's probably going to be a crossing point. I haven't the faintest clue when. I do my (tiny) part by contributing to "industrial" open source projects (mechanical and electrical modeling and simulation), which sorely need any attention they can get, regardless the underlying philosophy.
I'm thinking about it in terms of improving autonomy
http://effective-altruism.com/ea/1cm/autonomy_a_search_for_a...
I've been trying to find a community. But it seems pretty diffuse.
That list of bullet points hits hard. Bookmarked.
The name is excellent. It focuses on the work to be done, ties it to a traditional virtue, and jettisons the baggage that would otherwise come with references to earlier iterations on the theme.
Ditto that about the community being diffuse, although my failure to find similarly minded company may in part be due to the fact that I haven't figured out how to boil this all down to an elevator pitch. The "Autonomy" post helps.
Feedback and/or participation would be great
I think my next step is to see if it'll take on HN, so I've just submitted it. If not try and repackage it and get it on an interesting blog/website. Where would you expect to see something like that?
Suppose you take a group of 20 people making minimum wage, and rather than buying the cheapest internet possible 1Mbps x 20, they buy a 100Mbps connection and share them. Well there is added HW requirements, but for the cost of 1Mbps everyone is getting 5+Mbps except everyone is not using at the same time so it's closer to 20+Mbps.
There is a lot of things you can buy in bulk and see similar savings. The most obvious being housing. The classic 15 collage students in a house can be a lot cheaper than a dorm room. But, it also applies say vacations with carpooling / car rentals and a beach house, or stables like bulk rice.
Hardware is the cheap part, people are not. (Until infrastructure becomes really big such as roads, mass transit and big ISPs. Because these utilise economies of scale in workforce.)
My point was most communes are closer to having roommates to collage fraternity side vs soviet worker camp.
If government wants to get involved, they should replace wealth generating income taxes with taxes on planet destroying consumption.
I totally agree with reforming our tax system away from income taxes and towards a land value tax, carbon taxes, and other Pigovian taxes. Or at least we can start taxing capital gains at the same or a higher rate than income taxes.
In fact most countries already do this through taxes on fossil fuel, etc. The US has a bit of catch up to do there.
So yes, your statement about the police is correct. But if there were neither criminals nor police, the situation would be the same as with criminals and police, only less expensive. I believe this is why they call it zero-sum.
I don't see how taxation will solve the criminals/police problem, but it's fairly clear for legal services.
Nuclear buildup may look similar to the cat and mouse game of law enforcement but in fact they're two different games; the former cannot be used to reason about the latter.
It would be nice if top financial regulators didn't believe that trade was a zero-sum activity. The belief is many thousands of years old, but it's never been, you know, true. The vast majority of all value is created through the exchange of already-existing assets.
Could you explain that? Not having studied much economics, I would defined "value" the net sum of assets across society. From there, I would say that no value is created through exchange, only through production. The purpose of financial markets would then be to optimize production, not in an end in themselves.
That is value directly created by exchange.
When two parties agree to an exchange, it suggests that they both valued what they ended up with more than what they started with.
It looks useless, but it is not. It provides liquidity to the market, and smooths out pricing inefficiencies which results in more accurate pricing.
The growth of “zero-sum” activities may, however, be even more important. Look around the economy, and it’s striking how much high-talent manpower is devoted to activities that cannot possibly increase human welfare, but entail competition for the available economic pie. Such activities have become ubiquitous: legal services, policing, and prisons; cybercrime and the army of experts defending organizations against it; financial regulators trying to stop mis-selling and the growing ranks of compliance officers employed in response; the huge resources devoted to US election campaigns; real-estate services that facilitate the exchange of already-existing assets; and much financial trading.
Much design, branding, and advertising activity is also essentially zero-sum. ...
Such zero-sum activities have always been significant. But they grow in importance as we approach satiation in many basic goods and services. In the US, “financial and business services” now account for 18% of employment, up from 13.2% in 1992.
What's interesting is that it's the UK's former top financial regulator saying this. It's not a new idea, but it used to be the sort of thing you saw in Mother Jones, and occasionally heard from Warren Buffett. This is a concept that needs to become mainstream and start influencing tax policy.
There's a lot that could be done through tax policy to push capital in more productive directions. The elephant in the room is zero-sum financial activity. Buffett used to say that short-term capital gains should be taxed at 100%. Taxing them at top-bracket personal income tax rates might not be a bad idea. It's a start.
Hedge funds get a completely unnecessary tax break which has a small but powerful lobby.
All the ways that businesses pay for capital should be taxed at the same rate. This includes dividends, interest paid, and stock buybacks. There's a bias towards borrowing rather than dividends, which generates unnecessary banking activity. It's the relative tax rates that matter, not the absolute ones, because they drive business decisions.
Maybe advertising should not be a tax-deductible business expense. US consumer advertising just moves demand around. It doesn't add demand because US consumers are spent out, as the CEO of WalMart says.
Politically, the key to doing this is to do it all at once, with the overall corporate tax rate adjusted to make it revenue-neutral. There will be losers, and they will have lobbyists lined up halfway down the Mall to get into the Capitol. But there will be winners, too, mostly in industries that actually do something. It's politically possible.