I was a useful idiot for capitalism

https://www.theatlantic.com/ideas/archive/2020/08/i-was-useful-idiot-capitalism/615031/

by legnaflow • 4 years ago

68 97 4 years ago

lazyeye2• 4 years ago

How come the people of Silicon Valley, always so desperately concerned about issues of social justice, never talk about wage inequality?

IMO this is an issue for which the scale and impact is far greater than what seems to be the issues of concern for most of the people working in big tech.

RyanHamilton3• 4 years ago

Some are: "And what do I see in our future now? I see pitchforks. " https://www.politico.com/magazine/story/2014/06/the-pitchfor...

lazyeye2• 4 years ago

I meant coming from a position of concern for injustice rather than risk and self-protection.

diordiderot• 4 years ago

Inequality is a good thing! The more inequality you have the more jobs capitalist create. Pretty soon most of us will be working 3 or 4

hnbad4• 4 years ago

This reminds me of the old political cartoon of the fat cat factory owner sitting on the table with the white worker and the immigrant, hoarding a huge pile of cash and telling the white worker "careful, I think he wants to take your money".

Wage inequality is a problem, but the entire economic system is built on underpaying workers, i.e. extracting "surplus value" aka "profit" and paying it out to the owners for merely owning the company. Likewise rent-seeking extracts rent from individuals for using something the rentier merely owns, on top of any cost of maintenance, improvement, or loans, which themselves pay interest on top of the actual value of the money provided.

The foundation of the system is to make money from nothing by enforcing and thus manifesting the fiction of "property rights" and withholding the hoarded dead weight of "stuff" (or in intellectual property even just "ideas") from the society that could benefit from it unless allowed to leech on its actual productive effort in the form of rent, wage or interest. Societal progress in the past hundreds of years (especially in Europe) has been primarily defined by expanding this fiction (even the concept of land as such property is fairly new, see Enclosure). In essence even modern states live off this fiction except the property is the ability to exist within their sphere of influence and the rent is taxes, though the state's function is more of a tool to enable this system by providing a framework of violence to enforce it than as a beneficiary (although its higher officials often benefit immensely from it, they function more like the highly-paid C-level executives than the owners of a firm).

So yes, wage inequality is an issue but the problem is less that some tech workers get paid too much but rather that most of the surplus value workers generate doesn't end up on their paychecks and this problem is essentially unsolvable under the economic system, at least within a traditional corporate structure (less so in a co-operative).

Also your claim is actually wrong. Wage transparency (i.e. the right to talk to coworkers about each other's salary to help them better negotiate) is a big topic, although mostly framed as a solution to discrimination. And unionization is the easiest way to tackle wage inequality because it gives power to those unable to bargain for better wages on their own.

TheOtherHobbes2• 4 years ago

I don't entirely agree with the Marxist analysis of surplus value. What happens in practice is that some people have unusual talents for inventiveness, imagination, and social organisation. They can invent and innovate and that's broadly a social good.

It becomes exploitative when their talents are owned by rentier investors, whose sole contribution to a project is financial.

Of course the money doesn't exist physically. The investment is really a political endorsement of the project and the individuals. This unlocks resources and creates social credibility. Sometimes this comes with an explicit personal message from the investor, sometimes it's just numbers.

The problem is that stock markets support casual rent-seeking which disconnects investors from the projects they throw money at. Casual investors have zero interest in the long-term health of a company. All they want is the highest possible short-term return. And this culture is what forces corporations to aggressively devalue wages and worker comp, right from the initial seed round all the way through to the other side of IPO.

The typical HN reader is somewhat insulated from this, because their skills are needed to make projects happen. But casual labour is considered a fungible expense that needs to be minimised.

Politically this leaves most of the population disenfranchised. Some token electoral democracy doesn't change the fact that most people have almost no political power in their work environment, and have to accept top-down orders that undermine their own prosperity and welfare.

zozbot2344• 4 years ago

This reminds me of the old political cartoon of the fat cat factory owner sitting on the table with the white worker and the immigrant, hoarding a huge pile of cash and telling the white worker "careful, I think he wants to take your money".

Then that cartoon should be reversed, because most of national income (GDP) is wages - profits and rents are a much smaller fraction. Wage inequality driven by skill differentials and technical change explains the bulk of income inequality since the 1980s. The literature is fairly unambiguous on that point.

In fact, those market sectors where labor costs are pushed uniformly higher by distortionary policies without compensating gains in efficiency (such as education, healthcare and general administration) are the ones that exert the highest burden on the rest of the economy, leading to inflation and pushing real incomes down; this is what Baumol's cost disease is all about.

bjornsing6• 4 years ago

If you say so comrade Lenin. ;)

But have you tried investing in shares? If you have then maybe you’ve realized the fact that they don’t always go up.

hackerlight• 4 years ago

Very few people get rich off wages, and those that do pay 40-50 percent tax for the privilege. It's ownership of assets, largely tax free, and propped up by government policy, that drives inequality.

Gibbon13• 4 years ago

The 40-50% tax is to prevent people earning wages from breaking out and competing with the truly wealthy.

qikInNdOutReply3• 4 years ago

But then all of a sudden, around 1980, that progress slowed, stopped, and in many ways reversed.

Conveniently the moment, large scale spyplanes confirmed the sovjet union was a messy paper tiger, not the industrial science powerhouse it propaganda made it out to be. Ever after that, it was crisis management and containement towards collapse. Before that it was panic and better-this-then-that-negotations with unions. It was a watershed moment back to the gilded age.

hnbad4• 4 years ago

Care to elaborate for those unable to read between the lines?

zjp2• 4 years ago

When we realized the Soviet Union was about to collapse in on itself there was no more political (or moral, or whatever lens you want to look at it through) incentive to try to make our system any better than it was.

simple-thoughts• 4 years ago

Remember from the perspective of someone in the 1950s, a managed scientific communist system could be more efficient in the same way scientifically managed assembly lines replaced craftsmen. So in a lot of capitalist countries there was a constant fear that the communist system might actually be better and thus should be compromised with. Once the info about actual state of affairs in communist systems was revealed, it was no longer seen as a threat.

rob74• 4 years ago

Yeah, that's my theory as well: as long as there was a "socialist block", the capitalist countries felt some kind of obligation to demonstrate that capitalism could also care for the not-so-well-off. After that, it was back to capitalism's essence of the rich (the exploiters, if you want to use socialist jargon) getting richer and the poor (the exploited) getting poorer.

ndsipa_pomu• 4 years ago

Having a strong "socialist block" could easily have the reverse effect whereby political discourse is scared away from socialist ideas as they are considered to be evil communism (c.f. McCarthyism). I would consider that a lot of mainstream media (owned by rich and powerful people) has attempted to keep alive the idea that socialism is the enemy and needs to be fought against.

db48x• 4 years ago

This is so dumb. The entire history of “capitalism” is of the rich getting richer and the poor getting richer too.

marketerinland2• 4 years ago

They’ve been saying that the poor are getting poorer my entire life.

Yet in my country, we’re healthier; longer living; and yes the average person is wealthier than ever before.

It’s physically impossible for the poor to get poorer every year without a complete societal collapse. Yet people keep repeating this line.

s30002• 4 years ago

With the growth of China, will the pre-1980 times come back?

yakubin2• 4 years ago

China is a capitalist country.

dontreact7• 4 years ago

I have many issues with the CCP but as long as large scale war is avoided, this will be the silver lining in its rise. Hopefully there are clearer successes of some socialist aspects our society can learn from.

lp4vn2• 4 years ago

In the 60's western economists were afraid that the authoritarian central planning of the Soviet Union was intrinsically more efficient than the slowly adapting free market to the extent where economists started to study ways of incorporating the sovietic dynamic in the west. [https://www.gsid.nagoya-u.ac.jp/sotsubo/Krugman.pdf]

Now China doesn't represent any kind of alternative model that risks replacing the one adopted by western countries, unlike the Soviet Union. Realistically nobody is afraid of being taken over by China. So I think that any kind of impact that China might have in this regard would be quite limited.

ZeroGravitas• 4 years ago

I think one confounder is whether waging a war requires a lot of human beings.

If it does, then you need some kind of modern society to keep them relatively happy, or they'll fight for the other side. If you can deploy killer drone robots, then you don't need to worry about what the population thinks as much.

TheOtherHobbes2• 4 years ago

The neoliberal counter-reformation was planned long before then. The Chicago School and Hayek had already been planted and nurtured. The shift started in the late 70s with organised attacks on the concept of unionisation, socialised welfare, and government investment, combined with aggressive promotion of the private sector as a glorious, efficient, and generous engine of progress.

All of this was carefully seeded and very deliberately promoted and funded immediately after WWII. The most obvious example was the Mont Pelerin Society, which was given to Hayek to organise and wasn't just ideologically anti-Marxist, but aggressively anti-Keynesian.

The fall of the Soviet Union accelerated this process by finally removing much of the organised opposition to it. But it was already up and running long before Gorbachev became President.

dontreact7• 4 years ago

There were many movements planned in the 1970s, but the failure of the Soviet system seems like the key driving force in the rise of this one to me.

Zpalmtree• 4 years ago

is there anything tech types won't blame on capitalism? Did we suddenly introduce capitalism in the 80s?

piva003• 4 years ago

No, but in the 80s the rules of capitalism changed. The issue isn't capitalism per se but how the distribution of wealth generated by labour changed.

In the 80s we got a whole new set of capitalism: financial capitalism and neoliberalism. The breakdown of collective action, breakdown of solidarity between workers and a more hyper individualistic world.

This is exposed in the article, even though it focus on USA's changes, those changes have rippled through the globe.

Neoliberalism and hyper-financial capitalism begins in the 80s, that's what was introduced.

Did you read the article?

hnfong3• 4 years ago

If the OP read the article they would have realized the author wasn't a "tech type"....

Gibbon13• 4 years ago

I think the share of the economy going towards the financial sector went from 4% to 17% between 1970 and 2010.

bladelessninja213• 4 years ago

How could one change "rules of capitalism"? Capitalism is an idea, if anything's changed it was the system, so the system might have adopted some other ideas - that would be a change.

It's like having a car, disassemble wheels and call all cars useless.

It seems like USA is surprised that concentrating more and more power in few hands leads to corruption and as a cure they want to concentrate more power into hands of few (government) in the name of social justice expecting different outcome than before.

lp4vn2• 4 years ago

We're leaving in absolutely unprecedent times: automation starting to effectively displace workers, huge demographic changes taking effect and a turning point in capitalistic system that for the last 50 years worked undisputedly to supress wages and erode the standard of o living of the middle class that had the upperhand in the previous 50 years. And I'm not even talking about a certain pandemic nor about the nuclear revival with the ukranian war.

I think today we live in a time as revolutionary as the 60's in the XX century but without the optimistic atmosphere. I'm certain people don't notice this because we don't have the cultural effervescence of that time, for example, but I'm sure that in the future historians will write about how difficult and exceptional the 20's of the XXI century were.

bladelessninja213• 4 years ago

Blaming capitalism for corruption while giving government more and more power, solution: let's give the government more power in the name of social justice and expect that no one in the system is corrupted - wow, that's just perfect reasoning... Socialism never worked in the past, because it simply ignores the fact that people have no reason to work hard when they see someone who's chilling gets the same outcome.

chimprich3• 4 years ago

Blaming capitalism for corruption while giving government more and more power

Do you think governments have had "more and more power" in the last fifty years? What is your reasoning?

To me, it seems like capital has far more power compared to fifty years ago.

let's give the government more power in the name of social justice and expect that no one in the system is corrupted

Spoken like a true ideologue. Does this argument not work in reverse? Money == power. If you concentrate more and more wealth in fewer hands, then you can also expect corruption.

it simply ignores the fact that people have no reason to work hard when they see someone who's chilling gets the same outcome

The thing about capitalism is that capital generates capital. Someone who is already wealthy can "chill" and get a better outcome than someone who works much harder.

bladelessninja213• 4 years ago

Do you think governments have had "more and more power" in the last fifty years? What is your reasoning?

If opposite was true then there would be never debate about helping bankers after crisis few years back, government shouldn't have power to "help" private investors with taxpayers' money.

If you concentrate more and more wealth in fewer hands, then you can also expect corruption.

Why should I care about corruption inside companies? Corrupted companies are less effective, they will eventually die. What I care about is corruption inside government - you have no solution for corrupted officials - I have: just don't give them too much power, then even if they are corrupted they won't make much damage.

The thing about capitalism is that capital generates capital. Someone who is already wealthy can "chill" and get a better outcome than someone who works much harder.

That's not the feature of capitalism, that's feature of corrupted government with too much power - in free market, if you have capital and don't create any goods, but only spend it eventually you have less capital - it's simple math.

283042834092342• 4 years ago

"... Socialism never worked in the past"

It did. It does. Just not in the United States. In the Netherlands socialism worked just fine and provided many great benefits to all, except the super wealthy.

bladelessninja213• 4 years ago

Are you talking the country that gained its wealth from years of capitalism and centuries of colonialism? Yep, it will fail soon, like it always do.

bjornsing6• 4 years ago

A union? Sure, fine. But I was talent. I was creative. I was an individual.

Seriously, this is the right attitude. We need to find a regulatory framework for capitalism that works with this mindset.

The OP seems to advocate a more “Swedish system” where (almost) everybody is unionized and that mental framework is applied to all work (except e.g. sports and literature where everybody understands it’s impossible). As a Swede I’d like to caution against this in the strongest possible way. It is the road to serfdom for every talented and ambitious individual, regardless of background. It just perpetuates the class society.

SturgeonsLaw• 4 years ago

It is the road to serfdom for every talented and ambitious individual, regardless of background. It just perpetuates the class society.

The same can be said about a non-unionised workforce, so what's the solution?

bjornsing6• 4 years ago

I think the “Swedish model” is actually pretty good for the “collectively employed”, i.e. in roles where you can easily be replaced. The logic should be “if the employer treats you like a collective, then you should bargain as a collective.”

For more creative work where talent is very unevenly distributed my impression is that the US doing pretty well actually. A Swedish engineer can only dream of the opportunities for being “exploited” that are available to their American colleagues.

Also, if you feel exploited by capitalism you should consider what it feels like to be exploited by capitalism, the unions and the state working together. That’s essentially the situation you’ll end up in if you walk the Swedish path. Some people don’t mind trading their freedom for “safety”, but for those who do it feels terrible.

To improve on the US model for creative work I think regulation should focus on strengthening the creative destruction side of capitalism. This might seem counterintuitive, since people like stability. But I think the fairness of a capitalist system depends on it. I don’t mind if rich people have more power in society, as long as they have to risk that power in order to exercise it. What’s unfair to me is that a class of people get to call the shots and reap all the rewards, but get bailed out in various ways when things go sour.

greenyoda• 4 years ago

Archive with full text of article: https://archive.ph/SNZK2

Also, this article is from 2020, but generated hardly any discussion when it was posted on HN back then.

goatsneez• 4 years ago

My own observations of this 'blame capitalism' trend in collective social murmuring gained amplitude perhaps a decade ago, becoming really strong in the past 5 years. I am profoundly puzzled at the 'ad-hocness' and superficiality of the oft presented argument (which this articles is just an sample of). It is not because 'capitalism' is some sacred cow, or that the social maladies affecting communities are irrelevant or unimportant. It is the lack of understanding the very assumptions one makes about the alternatives (as well as 'capitalism' as a concept).

Just as any non-material concept, such as democracy, love, courage, and etc, so capitalism is a model, an abstraction of reality, which is context dependent.

So my contribution to the argument is to bring to attention that just as social-democracy can be de-facto a dictatorship, or 'love' can be a prison, or dictatorship can bring religious freedom and the end of slavery (e.g. early Persian empire) and contrast it with early America colonization governments, similarly capitalism as a concept can be approached.

Fundamentally, it is the mixture of government (power) with private enterprise (wealth) that historically is known to generate the greatest human corruption. Just like there people recognized that religion and state should be separated to avoid corruption of both, it should be followed by a divorce of private enterprise and state. [if one should summarize it in one sentence]. It has nothing to do with capitalism, socialism, nationalism, communism... the principle lies elsewhere.

bladelessninja213• 4 years ago

I cannot agree on your last point: capitalism is a system where those two (government and private enterprise) are separated by design, simply because first one has little power over second (free market) and second has little power over first (no interest in corrupting officials if there is nothing or little to gain).

M95D2• 4 years ago

no interest in corrupting officials if there is nothing or little to gain

Except there's a lot to gain! Don't you remember when banks were saved in 2008? Don't you remember that copyrights used to be 28 years? Don't you remember the times when you could build your own vehicle, pass an inspection and then legaly drive it on public roads?

toyg2• 4 years ago

It's interesting that the hippie-to-yuppie generation, of which the author is admittedly a member, seems currently busy publishing a lot of mea culpa pieces like this article. It's a good development, if anything because admitting fault is difficult for everyone. But:

- Hopefully this is not a desperate attempt at staying relevant. Taking the author at his own word, that whole generation is now unreliable: they messed up and are fundamentally corrupt. Unless they have a spotless, near-sainthood track record, anybody born before the mid-70s should probably be ignored when defining the strategic horizon.

- They never seem to suggest a way forward anyway, exactly like this author. That's probably because they have little knowledge of the now, they can only analyze what came before.

The real cultural breakthrough will happen when someone "clean" will manage to elaborate an actual way forward, a democratic socialism for the digital age that actually works (or promises to work) on a mass-scale. It probably shouldn't be called that, it will use new terms so it can eschew old labels; but it should promise redistribution, respect, and creative satisfaction, for all people.

Until that happens, we are simply in damage-limitation mode. Technology has enabled capitalist excesses in an unprecedented way, most of the cyberpunk-theorized digital feudalism is already reality. What can we do? That is the question.

zozbot2344• 4 years ago

a democratic socialism for the digital age that actually works (or promises to work) on a mass-scale. It probably shouldn't be called that, it will use new terms so it can eschew old labels

You could call it socialism with Scandinavian characteristics. Mind you, Scandinavian countries are actually fairly high on rankings of economic freedom; they choose to levy redistributive taxes as opposed to trying to socialize the economy with heavy regulation and central planning, as has long been the model in the U.S. and elsewhere in the West. This is in accordance with Deng Xiaoping's famous quip: "white cat, black cat, if it catches mice it's a good cat."

s30002• 4 years ago

The elephant in the room is globalization. The same resources have to be shared among many more people. Even if energy is no problem, there is e.g. a limited amount of fish protein that can be fed to life-stock.

I’m betting that a jobless super-automated future will arrive even sooner than experts have been predicting.

We already live in that future. If there were only one type of car, one type of trousers and shirts, a limited selection of food and standardized housing, there would be hardly any work for anybody.

The end of the article is kind of funny. It could as well be a plea for Capitalism and startup culture:

Drag dreams out into the light of day, show their sources, compare them with fact, transform them to possibilities … a dream … with a sense of the possible.”
He also wrote that the urgent national inflection-point struggle a century ago was “between those who are willing to enter upon an effort for which there is no precedent, and those who aren’t. In a real sense it is an adventure.”

It comes down to taxes and investments. The masses can always vote for politics that shift spending power from corporations to politicians or to themselves. They can also pool their money and invest by themselves.

For some reasons, unprecedented efforts seem to require free capital. How else but with Capitalism can that be provided? More democratic investments like kickstarter.com look too much like etsy.com to be viable contenders.

bjornsing6• 4 years ago

there is e.g. a limited amount of fish protein that can be fed to life-stock.

Or maybe the time has come to let people eat that fish instead? Sure, the Western middle class may not be able to eat as much meat then, but as a whole, wouldn’t humanity be better off?

snapplebobapple3• 4 years ago

This just in: Boomer unsatisfied with the natural outcome of integrating the massive third world labor force into the first world combined with NIMBY politics at home, incorrectly attributes the outcome to "the right" and "evil corporations"

bladelessninja213• 4 years ago

Sadly, he's not an exception, people truly believe that, people who have right to vote.

TrevorFSmith• 4 years ago

Who do you suppose offshored our jobs while protecting their backyards? I'm guessing that it was rich people running corporations.

snapplebobapple3• 4 years ago

Nimbyism is caused by the vast majority of property ownere, not just rich people. If you own already rampant price increases are a positive feature not a cost (atleast in most property owners minds). Outsourcing was just the likely correct thing to do in that context. It raised more people from abject poverty than all the foreign aide we funded by a large margin. The context now is more complicated and muddy because, while the ussr seemed to prove outsourcing creates a middle class that can topple bad regimes, china proves those regimes can maintain control by not losing their resolve for bloodshed.

I was a useful idiot for capitalism

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