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[Senn Typhos]

Dig a canal with a spoon, etc. Break a window, pay for new window, everyone profits! except for the person who has to replace his windows. . .

Leave it to you to put a depressing spin on a world war, Soter. :/

[orange]

Dig a canal with a spoon, etc. Break a window, pay for new window, everyone profits! except for the person who has to replace his windows. . .

Actually, WWIII would be an excellent way to get out of this.

Most commodities stay around, and their solid occupation of space keeps them from being as lucrative as they could be. There gets to be a point where there's simply too much money and nothing to spend it on.

Ammunition and weapons have the benefit of being high-demand, one time use items. Build a thousand bombs, the builder gets profits, the factory workers get paid, and tomorrow we need another thousand.

I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.

Forget any idea of what you think World War III could have been (quaint 1960/70s idea).

A true superpower war is likely to open with the destruction of infrastructure and systems upon which the post-Apollo/post-Internet era has become increasingly dependent.  A true superpower war will destroy any hope of a world where radicals are marginalized/contained and basic freedoms are the norm.

A true superpower war is unlikely to result in the "reorganization of the international system,"  it is likely to destroy any concept of an international system.  Continental systems (US/Canada, EU) likely disintegrate and even regional systems might breakdown.

At the end of a true superpower war, the population of the planet is likely to be much smaller, the environment much harsher, and the distribution of resources based not on any democratic or electoral basis, but on who is able to take it by force.

Planetary Dark Age.

[Victoria Stecker]

Would EVE still be running? I could live with that...

[Z.Sinraali]

Soter understands the broken window fallacy. <3

I'd rather ignore the minefield of defining socialism and look at the question of whether capitalism works or not. What does it mean for capitalism to work? Adam Smith's great insight was that individuals pursuing their own interest can, given the right conditions, maximize the gain to society as a whole. Given that, is the rise of systemic risk posed by highly-leveraged, highly-interconnected financial institutions a success or failure? Should the freedom to fail include the freedom to drag the rest of the economy down with you?

[orange]

Soter understands the broken window fallacy. <3

I'd rather ignore the minefield of defining socialism and look at the question of whether capitalism works or not. What does it mean for capitalism to work? Adam Smith's great insight was that individuals pursuing their own interest can, given the right conditions, maximize the gain to society as a whole. Given that, is the rise of systemic risk posed by highly-leveraged, highly-interconnected financial institutions a success or failure? Should the freedom to fail include the freedom to drag the rest of the economy down with you?

It is a failure to appreciate the mechanics of capitalism (to include greed) and attempt to force a desired end-state through utilization of other methods.

As an example, monopolies are bound to arise in a capitalist system.  However a monopoly generally fails to maintain innovation within its field, it has no incentive to do so.  Given time, monopolies (real or de facto) can and are broken by market forces.  People, through government, seek to avoid real monopolies, breaking them up when it is no longer beneficial for the monopoly to exist, sometimes accepting cartels (real or de facto) in order to maintain the appearance of a competitive market.

Unions are an interesting response to a capitalist system, but when a company is willing to reward its employees the union is in-effect a manpower subcontractor.  The union potentially creates a monopoly of available labor.

In every case, we weigh freedom and security.  The freedom to fail, and drag the economy with you, is a potential risk of said freedom.  However, with said freedom, there exist potential rewards.  If we reduce the risk, reduce the amount of freedom allowed, we can establish a more secure, less dynamic economy in which decline and growth are both minimized.

[Vikarion]

In every case, we weigh freedom and security.  The freedom to fail, and drag the economy with you, is a potential risk of said freedom.  However, with said freedom, there exist potential rewards.  If we reduce the risk, reduce the amount of freedom allowed, we can establish a more secure, less dynamic economy in which decline and growth are both minimized.

In any naturally arising system such as a capitalist economy, attempts to reduce downsides tend also to have corresponding and amplified effects upon upsides. Or, in other words, when you try to reduce lows by 10%, you are likely to reduce highs by more than 10%.

[Senn Typhos]

I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.

Other wars people believed would bring about the end of the world:

World War I
World War II
Cold War

[lallara zhuul]

What is wrong with having an economical system that would favor steady and slow growth instead of an economical system that is prone to sudden shifts?

EDIT: There was something great about living under the constant threat of nuclear apocalypse of the Cold War, seeing these irresponsible shits running about without any clue of how that felt is kind of neat

[orange]

I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.

Other wars people believed would bring about the end of the world:

World War I
World War II
Cold War

They each did "end the world" in their own way.  World ending does not inherently mean species or even civilization ending.

Arguably World War I & II in Europe are interrelated, one setting up the other.

World War I & II led to changes the world over that we have been dealing with for the past 65 years.  World War I weakened the European colonial powers and in the wake of WWII, the colonies gained independence and some struggle with it to this day.  They resulted in the decline (and destruction in some cases) of the European powers (Britain, France) as world leaders, supplanted by the United States and the Soviet Union.

The Cold War never went to superpower-superpower war, thankfully.  But it did change the world,  powerful country's with lots of resources feed the resources to scientist and engineers to create the basis for marvels of our modern world, like the Internet and now-retired Space Shuttle.  It also showed (as history before it did) how the little power defeats the big power, Vietnam & Afghanistan.

Actual war with Iraq under Saddam was easy, big powers are great at that.  The hard part is/was the follow-up occupation/police action, big power militaries are not geared to fight those.

[Borza]

Would you propose raising the tax on capital gains for those with a lower income or lowering the tax on those with a higher income in order to equalize treatment of capital gains?

I can see taxation of financial transactions putting a serious hindrance to investment in fresh IPOs of startup companies that have grown beyond "Main Street."  I can also see it reducing the number, scale, & frequency of transactions; in general making the market postured towards less risk-taking, possibly retarding overall economic growth.  I am not an expert on the financial system, but I can see a financial transactions tax not achieving the desired results as it slows the exchange of goods & commodities and thus revenue and capital gains.

Bull. The financial sector is completely out of whack with the rest of the global economy.
e.g.


(From here)

Traders are just pushing money around doing make-work and patting themselves on the back for achieving... nothing

[Senn Typhos]

Actual war with Iraq under Saddam was easy, big powers are great at that.  The hard part is/was the follow-up occupation/police action, big power militaries are not geared to fight those.

Well the problem there is using an army as a police force. Which is pretty much the opposite of what an army is supposed to be used for.

[Julianus Soter]

Would you propose raising the tax on capital gains for those with a lower income or lowering the tax on those with a higher income in order to equalize treatment of capital gains?

I can see taxation of financial transactions putting a serious hindrance to investment in fresh IPOs of startup companies that have grown beyond "Main Street."  I can also see it reducing the number, scale, & frequency of transactions; in general making the market postured towards less risk-taking, possibly retarding overall economic growth.  I am not an expert on the financial system, but I can see a financial transactions tax not achieving the desired results as it slows the exchange of goods & commodities and thus revenue and capital gains.

Bull. The financial sector is completely out of whack with the rest of the global economy.
e.g.


(From here)

Traders are just pushing money around doing make-work and patting themselves on the back for achieving... nothing

And thus the world of fiat currency comes tumbling down. . .

[Z.Sinraali]

You've lost me, Dex1. What is "a failure to appreciate the mechanics of capitalism (to include greed) and attempt to force a desired end-state through utilization of other methods," and how does that answer my question of "what does it mean for capitalism to work?" I'm not trying to be pedantic here. I just don't want to misread between the lines and attribute a view to you that you don't hold.

I mean, you mention the rise of monopoly power and unions as things that happen in a capitalist system, but I don't think that's what you're saying is the defining feature of 'capitalism working,' especially since you explicitly said they were examples. (As a side note, any chance I can get a source for the claim that monopolies will naturally break up, given enough time?)

Actually, hell, I'll take a shot at misreading between the lines. Please correct me when I'm wrong here. It seems to me that what you (and Vik) are saying is that, regardless of what it means specifically for capitalism to work, capitalism working necessarily includes higher risk and higher reward. Is that at all accurate?

[orange]

Would you propose raising the tax on capital gains for those with a lower income or lowering the tax on those with a higher income in order to equalize treatment of capital gains?

I can see taxation of financial transactions putting a serious hindrance to investment in fresh IPOs of startup companies that have grown beyond "Main Street."  I can also see it reducing the number, scale, & frequency of transactions; in general making the market postured towards less risk-taking, possibly retarding overall economic growth.  I am not an expert on the financial system, but I can see a financial transactions tax not achieving the desired results as it slows the exchange of goods & commodities and thus revenue and capital gains.

Bull. The financial sector is completely out of whack with the rest of the global economy.
e.g.

[image removed]

(From here)

Traders are just pushing money around doing make-work and patting themselves on the back for achieving... nothing

Your response seems fair with regards to "general financial" transactions.  My response was to a discussion of capital gains and my layman's understanding of capital gains.

Also, why is my opinion bull?  Did I claim it as fact?  It is my conjecture at a possible side effect of increasing taxation on capital gains.

You've lost me, Dex1. What is "a failure to appreciate the mechanics of capitalism (to include greed) and attempt to force a desired end-state through utilization of other methods," and how does that answer my question of "what does it mean for capitalism to work?" I'm not trying to be pedantic here. I just don't want to misread between the lines and attribute a view to you that you don't hold.

I did not respond to the question of "What does it mean for capitalism to work?"  I responded to the other two questions without providing a definition of "capitalism working."

I will try to provide examples of capitalism working to me.

Richard Branson

Elon Musk

Steve Jobs

These individuals have built successful, society changing companies, and transformed existing industries when they enter them.  But maybe that is not what you mean?

I mean, you mention the rise of monopoly power and unions as things that happen in a capitalist system, but I don't think that's what you're saying is the defining feature of 'capitalism working,' especially since you explicitly said they were examples. (As a side note, any chance I can get a source for the claim that monopolies will naturally break up, given enough time?)

I can provide examples were I think de facto monopolies are broken up naturally given time.  For example, in the mid-90s, Microsoft seemed to have a de facto monopoly, but today other options are gaining significant market share in various areas and some of them with much less in the way of resources than Microsoft.

Another example is the attempt by the government to maintain competition in the space launch market actually led to the merger of the two companies (Boeing's & Lockheed's Launch systems merge to form ULA) creating a monopoly.  This monopoly is being targeted by at least an entrepreneur interested in lowering launch cost (SpaceX).

I suppose my claim that monopolies naturally break up is poorly written.  It may have been better of me to say "given time, a monopoly will be broken."

Actually, hell, I'll take a shot at misreading between the lines. Please correct me when I'm wrong here. It seems to me that what you (and Vik) are saying is that, regardless of what it means specifically for capitalism to work, capitalism working necessarily includes higher risk and higher reward. Is that at all accurate?

I can not speak for Vik, only myself.

Capitalism, raw capitalism, allows for people to take high risk and be highly rewarded.   By placing security nets (bail outs) the risk is lowered / shared by others.  It is a trait of it, not necessarily whether it is working or not.   It is not working if higher reward does not have higher risk or if low risk allows for a higher reward than a higher risk activity.

[Borza]

Would you propose raising the tax on capital gains for those with a lower income or lowering the tax on those with a higher income in order to equalize treatment of capital gains?

I can see taxation of financial transactions putting a serious hindrance to investment in fresh IPOs of startup companies that have grown beyond "Main Street."  I can also see it reducing the number, scale, & frequency of transactions; in general making the market postured towards less risk-taking, possibly retarding overall economic growth.  I am not an expert on the financial system, but I can see a financial transactions tax not achieving the desired results as it slows the exchange of goods & commodities and thus revenue and capital gains.

Bull. The financial sector is completely out of whack with the rest of the global economy.
e.g.

[image removed]

(From here)

Traders are just pushing money around doing make-work and patting themselves on the back for achieving... nothing

Your response seems fair with regards to "general financial" transactions.  My response was to a discussion of capital gains and my layman's understanding of capital gains.

Also, why is my opinion bull?  Did I claim it as fact?  It is my conjecture at a possible side effect of increasing taxation on capital gains.

Capital gains has historically been much higher in the US during some periods of high economic growth, back when the financial sector didn't dwarf the rest of the economy. The two are intrinsically linked.

I hope that increased capital gains will have a reduction on activity in the financial system, because currently there is far more useless shuffling of money going on there beyond efficient allocation of capital investment in production. Many of the 'commodities' traded these days have only the most tenuous link to reality - derivatives so esoteric few of those actually trading them even understand them properly [disclaim: nor do I claim to, but that's what some people in the business say]

Another pretty good speigel article -

In the 1970s, capital gains tax was 40 percent, and the highest income tax bracket paid a rate of 70 percent. Under George W. Bush, these rates dropped to 15 percent and 35 percent, respectively. For example, it emerged a few weeks ago that legendary investor Warren Buffett earned $63 million last year but was only required to pay 17 percent in taxes.

As for myself I'm not anti-capitalist, I'm more anti-corporate. An economy made up to a far greater extent of co-operatives and partnerships would be far more healthy and stable imo.