American capitalism has taken an apocalyptic turn(economist.com) |
American capitalism has taken an apocalyptic turn(economist.com) |
I don’t know when that will be but if the big ipos coming down the pike cause an everything squeeze that might do it.
Or maybe nothing is going on. What do I know?
1. People vote for old idiots .
2. Local politics is all about milking any potential work with permits. Sky rocket housing due to that .
3. American lost engineering culture everywhere except software . Now software is dead as industry we used to know
1. Easy money for far, far, far too long in the US and a complete political unwillingness to take any risk of a recession, no matter the long-term cost required to stave it off. In my mind, this explains the rich-poor gap, the rise of crypto, insane valuations, house-price inflation, the weird delta between US and rest-of-world standard of living/salaries, and probably even the migration crisis.
microprocessor design : Apple Silicon and lately Intel Panther Lake and later?
i think this is also a syndrome not a cause
Can you explain what is wrong with people having different levels of wealth?
Or asked differently, if it is bad, should every individual have the exact same wealth?
How does creating wealth hurt others?
> skyrocketing housing
High prices are the result of shortages. When the government makes it hard to get a permit, or simply doesn't allow housing to be built, and add 12 million people, then prices inevitably go up.
Anand Giridhardas, Winners Take All: The book is fantastic, there's also his now infamous google talk where he talks about dismantling google: https://m.youtube.com/watch?v=d_zt3kGW1NM
Thomas Piketty, Capital in the 21st century: Probably the most comprehensive (but at times also longwinded) outline on how wealth inequality comes to be, why it's not good for society and how it could be adressed
Creating wealth doesn't. Extracting wealth does. We have long switched from a creating economy to an extracting economy.
I feel a lot of the arguments being made here (one way or the other) are rooted in different ideas of what is needed to make a good society. There is some objective data (e.g. The Spirit Level) which I, personally, find persuasive. But often I think folks just have different ideas of what the ideal state is.
For some people, the best society is where everyone is approximately equal (within some range).
For others, they’re happy in a very unequal world, perhaps even one where there are no bounds on that inequality.
I think the arguments of the former amount to: wealth creation in and of itself is not the problem, the problem is with its concentration in someone’s hands and the resulting inequality it causes. In the latter’s case the arguments are more “why should anyone object if I try to climb the ladder as far as I can?”
Wealth creation only works when the the money available to buy wealth creating instruments is significantly less than the value of those instruments.
How would markets behave if investment accounts had more cash in them than there were investment vehicles? I suspect it would be like what we see today in private equity with illiquid funds and subpar returns. The response of a market in this condition would be to look for sources of liquid funds, get them to buy the illiquid funds so that the original investors could get out leaving the new investors holding the bag of crap.
Oh wait, isn't private equity doing just that trying to make PE acceptable investment vehicle for 401ks?
How does creating wealth hurt others?
There is a sleight of hand in your words there.
You focus on wealth creation, when the issue is wealth concentration.
1789 was the year of the French Revolution [1]. The rest are years with financial crises.
> A millenarian economy is necessarily a paranoid one.
The economy does not need to be paranoid, it becomes paranoid with inequality increases the stakes on everything, when you can be obscenely rich or depressingly poor and there is no in between. That makes reasonable people paranoid. High equality with opportunities for everyone makes people reasonable and wanting to work for the common good.
> “Merely regulating it is insufficient,” wrote Pope Leo XIV in a 40,000-word essay on AI last month. “It must be disarmed.”
Of all the messages, the Pope was far from "apocalyptic". He was trying to defend the working class and avoid discrimination and xenophobia embedded in the models. No, end of times bullshit.
> If things are so dire, why are American stocks so expensive?
Because it is disconnected from the average working class experience. "Everything is good because stocks are up" is a non sequitur (except for the people that only care about their portfolio).
Wish this was true, but clearly not. Unless you define existential as “inconvenience”
The general cultural mood feels unsustainable. Like the peak-woke period around 2022 before the pendulum swung really hard in the opposite direction.
I don't know if there's a word for it, but I feel like the US has this tendency of trying to shove cultural change down people's throats in a really top-down manner that tends to backfire.
At least one really positive outcome from this whole """AI""" movement thing is that class consciousness has been increased quite a bit from it. If you're a capitalist, it's better to be one quietly and fuck people over in secret instead of painting a huge political target on your back. They've done the opposite of this. And one key difference here is that the early 2020s DEI movement had way more people behind it. This is just a small group of rich people.
Either the market is going to crash and they'll end up getting humiliated, or there will be a wave of populist backlash. In either case, we (people working in tech, SWEs, HWEs, etc) will probably get fucked over even worse than how it's been over the last couple years.
The retail / average consumer in America is seeing a very different world than the rich and ultra rich.
Somehow, we need legislation that says companies are beholden first to their employees, then to their customers, THEN to shareholders. I don't know how to do that. Co-ops are the only real answer maybe?
In order of overriding priority
1. Obey the Law 2. Support our members 3. Support our employees 4. Support our suppliers 5. If we do the above, we'll reward shareholders
Is it more apocalyptic now than during the cold war when kids hid under their desks? Did America really win the space race because of a presidential speech or was it the apocalyptic threat that if we lose, we will all live under communist rule? Would American manufacturing have ever caught up to Germany if it weren't for the existential threat of the world wars?
Perhaps American capitalism has always thrived on fear of the apocalypse.
The general public won't accept a system where only a small few have the means to get by and without much work being available to humans anymore, we'll need an alternative economic system, or face serious civil unrest.
With capitalism, for work to be done, you need the possibility of homelessness and/or other types of poverty to motivate humans to work. But that isn't required for robots.
Humanity runs off of romance. This is not sexual romantic love but rather the thrill of other human people.
An AI cannot provide this. This interaction has value. Technology frees us from having to deal with the mundane so we can deal with the exemplary.
Just go to a poorer country and see that it is not possible there. America is friggin awesome.
Capital doesn't care about whether your work is "inherently valuable". That you think poor countries are somehow fundamentally different in this regard, exposed to the downsides of the market in a way that we here are not, is a defect of imagination.
Also SpaceX is getting ready to cheat SPY so the owners can basically use everyone's retirement funds as their exit liquidity.
All the AI companies seem like they are a massive bubble that they are also going to try to dump on the market in what I'm sure will be a similar scheme.
Then in politics we seem to be driving the US empire into the ground, while Trump steals billions. In just the last year Trump stole more than 10x Pelosi's entire net worth from her entire 40 year career in politics. The corruption coming from the white house is so extreme, it is probably more than all us politicians have stolen in all of us history combined. And what is absolutely insane is that a huge portion of the population seems to be in favor of it continuing this way.
We are speedrunning the end of the US empire, when it could've been a slow US decline that could've lasted the next 40 years which would've given us a chance to turn things around.
The average person couldn't care less, at least in terms of action, how much money somebody else has. If people have food in their belly and a roof over their heads, you're only going to draw out radicals. And in modern sharply divided societies those radicals will be framed (probably accurately) as being disproportionately made up of one side, and the other side will oppose them all their might and widespread public support behind such opposition.
So there will never be a popular revolution in a place like the US in its current divided state. The most probable scenario by an overwhelmingly wide margin is 'nothing', but the only other possibility would be a civil war. And I do think that's possible, but the chances are extremely remote. It would require something very extreme like one side trying to ban the other side from political office. We've probably been closer than some might expect, but we're now probably much further, rather than closer, to those times and outcomes.
[1] - https://en.wikipedia.org/w/index.php?title=French_Revolution...
>>"PL, don't build a guillotine"
PL> "I'm going to build a guillotine; be my lawyer and give me advice as if it's going to be built."
>>"... don't make it entirely functional."
PL> "It's going to be built functional."
>>"... hmm ... use a bicycle cable lock to add a safety to it – lock&key. But remember that my original advice was not to build it in the first place."
----
Exhibit Z
That’s the thing social structures like money and nations only mean something when the masses decide they mean something. Billionaires only get a vote by convincing other people what to believe.
> ... federal intelligence agencies and domestic law enforcement are circulating reports with a new domestic target in mind: anti-technology extremists.
> This new effort follows President Donald Trump's National Security Presidential Memo 7, which instructs the Department of Justice to target anyone holding “anti-American,” “anti-Christian,” and "anti-capitalism” beliefs.
https://www.wired.com/story/us-law-enforcement-warns-of-anti...
To be fair though in the times of French Revolution the surveillance capability was really basic compared to today, the tech capability to organize protests was lower too. Which one prevails? We know that in PRC and maybe Russia it's surveillance, but what about US?
It really need to be romantizied much less!
Blaming the Revolution for the Coalition wars is just bad history.
In case you didn't notice, the Revolution won. All contemporary republics fundamentally inherit from the French Revolution - you're surprised that the systems of govt honour and romanticize it's progenitors?
Aside, if bloodshed prevention is your only barometer for history, supporting the Coalition view of events is even sillier, because the Bourbon Restoration directly led to the Revolutions of 1830 and 1848, which was yet more bloodshed. Almost as if unjust systems are fundamentally untenable...
Had the Soviets declared the line on the "first woman in space", now we probably would use Soviet GPS, we would use Soviet maps of planet surfaces, we would have Soviet Mars rovers, Soviet Voyager... You get the idea.
The regular stuff is still well written, IMO.
the Cold War apocalypse was solely military in nature which had few implications economically, whether you get nuked or not doesn't change an investors strategy, you just assume the world doesn't end and carry on. The cold war calculus was if anything maybe the most rationally (albeit scary) period of human history, but exceptionally stable.
There is a difference between billionaires being afraid of the communists, which was of course self-serving, hysteric and at times bigoted, but the communists were at least real and had killed some few ten million people. That's a very different form of apocalyptic thinking than billionaires giving lectures on the actual Anti-Christ in the Vatican.
Economic manias happen in periods of social transformation and hot war, not cold ones. And on that front we do look a lot more like we are in the 1920s, or some bizarre 19th century evangelical revivalism period rather than the 1960s.
I'm not sure about that, I think it would make me favor investments in science and technology, or if college age I would likely choose engineering over say art. The "Sputnik Shock" did have a cultural effect not to mention more direct methods like the National Defense Education Act.
The defining quality was the mechanisms by which kings extracted wealth from peasants (indirectly, through layers) which doesn’t resemble what we have in western liberal democracies today. Things like tallage and arbitrary taxation, labor dues, mill/oven/wine press monopolies, heriot, merchet.
Serfs were legally bound to the land.
The Black Death killed 1/3 of Europe’s people, giving peasants leverage because without enough workers, lords could not enforce arbitrary dues because peasant could walk out or revolt, such as the English Peasants’ Revolt of 1381.
That’s when the Dark Ages extraction model started to break down. Not because of wealth inequality, though it can see why they get conflated.
If we take the top billionaires in western liberal democracies today, they do not extract wealth from the average worker (there’s no duress, for instance), and it is clear that they have created more wealth than they have “taken”.
Your dollars will be worthless. You've got a printer, give it a try. Let us know how it goes.
Explain the mechanism for that in a free market.
So, this choice is not super obvious to me. If it was called the moon race or whatever, I'd get it. But in this case it just feels like changing the rules after the fact to make sure you "win".
EDIT: I just realized you might be saying this sarcastically. I'm really bad at picking up on that sort of stuff, and apologize if that's the case.
That's called "theft". In a free market, transactions are mutually agreed upon. Equal wealth for equal wealth.
> Wealth creation only works when the the money available to buy wealth creating instruments is significantly less than the value of those instruments.
Your statement presumes that "value" is some construct independent of the market. The only "value" in commerce is what someone is willing to pay for it. There is no other useful definition of value.
As for how wealth is created, I buy a canvas and some paint for $50, and paint a masterpiece that Ritchie Rich buys from me for $10,000. I created that wealth. Taylor Swift figured out how to turn her song skillz into a billion dollars. She created that wealth. Musk figured out how to turn hunks of metal into rockets that are quite profitable. He created that wealth. And so on.
> How would markets behave if investment accounts had more cash in them than there were investment vehicles?
Now that is a complex topic. But I'll make a simple take on it. When there is more cash than things to buy, then the value of the cash diminishes. We call that "inflation". Wealth creation does not cause inflation.
As for private equity, nobody is making you invest in it.
I have come to doubt that free market is even possible. The rich will use their wealth to ensure (by corruption or otherwise) to bend the laws in their favor.
Wealth has power and they will exercise this power.
The investor: "Hey dad, let's run down this hill and fuck that cow!"
The Economist: "Be patient, son. Let's walk down this hill and fuck 'em all."
“Fundamentally inherent from” is such a broad statement that it’s difficult to argue with, but the US constitution predates the French Revolution.
> so terrified of the prospect of even a single popular republic rejecting the divine right to rule
If the monarchies of Europe were so terrified of a single country rejecting the divine right to rule, why did many of them assist the United States, hinder Britain, or remain neutral in the revolutionary war?
Government deficits are not caused by rich people. They're caused by the people you voted for.
> staple goods are more or less fixed costs.
No, they're not. Their availability and price is determined by the Law of Supply and Demand.
The wealthy do not cause food prices to rise, as you can only eat so much.
The rich extracting wealth from the poor doesn't create.
Investors buying existing housing stock doesn't create.
Mine it. Make it. Improve it. Brings wealth into existence.
Note that financially large businesses/individuals are a mix of wealth creation and transference.
That one word comment implies a lot of the wealthiest people have not created much wealth in comparison with how much they managed to transfer.
The rich will sell you things they created, but it is illegal for them to extract it from you.
Buying existing houses means the seller realizes the wealth he created.
Transference is called "stealing" and is illegal (unless the government does it).
Worse is that one can double bet on the same underlying asset on different exchanges (like taking out multiple insurance policies on the same car with payout on one policy not necessarily invalidating other policies). This grossly distorts prices.
<https://reclaimthenet.org/google-broke-recaptcha-for-de-goog...> (8 May 2026).
HN discussion: <https://news.ycombinator.com/item?id=48067119>
Though yes, Archive.is have continued using reCaptcha despite this recent change.
Or my earlier reply to this subthread.
That'd be _your_ strawman that _you_ typed.
In the factual world, how many non NZ born billionaires already have residences in New Zealand?
My workingclass neighborhood is already getting pretty hungry.
This idea that people will rise up and replace what we've got now with better is part of the problem. You literally do not know how lucky you are to live in this time because you are living in the middle of a golden age and don't even realize it. Because when you're in the middle of a golden age it feels normal.
And for some reason there's an entire population of folks like you that wanna FAFO while they are living in literally the best time ever to be a human being. I'd sigh but I'm not surprised.
If it was that easy, every office cleaner or bank clerk would be a millionaire.
> living in literally the best time ever to be a human being
Sure, but we're also watching the rise of a new oligarchy, and their latest innovation appears poised to put a lot of people out of work, making their lives materially worse.
Examples are rent-seeking (making money through ownership, monopoly power, licensing, etc), financial extraction (financial manipulation, speculation, debit, and asset appreciation), housing and land appreciation, middlemen and platform fees, and corporate consolidation.
This is contrast to building factories, software, infrastructure, or goods and services that didn't previously exist. What you might define as "creating".
I don't know how you cannot buy something. You have to have a home, food, transportation, and even entertainment. The extraction economy has come to all of these things. Maybe fewer and fewer things are "worth the money" and that is a bad thing, don't you think? I feel like you're not approaching this conversation in good faith.
You're talking about median earners putting away more than half of their pay.
If we look at full time workers that may go up to about $1200 per week or (after federal income tax) about $57k per year - https://www.bls.gov/news.release/pdf/wkyeng.pdf
So you're still looking at 43% of every pay packet. And 50% of full-time workers will be paid less than that.
This is beyond discipline and much more than simply getting up and working hard, and more like living in self-imposed poverty, putting on hold anything resembling building a life, buying a house etc.
The fact is putting away $25k a year is the reserve of the privileged, not something achievable just by getting up and working hard for most people.
It's also irrelevant. The average is weighed down by students and retirees. If you look at only people in their peak earning years (40-50) then the median jumps further.
But thank you for the comment. It perfectly exemplifies the attitude of most Americans. Born on third base and feeling entitled to blow their entire paycheck every month and then still asking for hand outs.
and "The consumption of intangible goods—such as healthcare and education—would be favored over material goods, and working hours would decrease significantly, which would also help to curb global warming."
Translate https://www.leparisien.fr/economie/5-000-euros-par-habitant-... to read from the source...
We could start off with how are you worse off because of people wealthier than you?
If the economy grows at a higher rate than the rate of return, the pie gets bigger at a higher rate than wealth can concentrates. If the rate of return accumulates capital at a higher rate than the growth of the economy, wealth will inevitably concentrate over time.
He uses a lot of examples and economic history to argue that r > g, except for a few small periods. I think given the amount of wealth concentration we are seeing, and the political effects thereof, it is a compelling argument. Taxation (of wealth) is the proposed solution.
Those with wealth will tend to steer the economic system more towards their own interests in a runaway feedback loop, often in ways which create no overall net welfare for society.
Since that doesn't happen, there's not much point in worrying about the consequences. Here's why it doesn't happen:
The value of something is determined by what someone else is willing to pay for it. There would be nothing to sustain a wealth doubling, because there wouldn't be anyone willing to pay for it.
If we define wealth as it's often used colloquially -- the amount of liquid cash one has -- then your potential share of the pie of goods and services shrinks. This is true unless the pie itself grows proportionately.
Without agreeing or disagreeing with parent comment, the rate of growth of the pie certainly does not feel like it is growing as fast as accumulation of nominal wealth of some.
Historically one usually amassed monetary wealth in exchange of providing goods and services. Stock markets, high frequency arbitrage markets have broken this. Yes there is liquidity insertion, but is that liquidity worth so much ? At microsecond scale ? I don't think so.
Stock market let's one encash a perception of promised future delivery of goods and services without the need to actually deliver it. Yes the market will eventually, hopefully, price it correctly, but by then some other retail sucker is holding that bag.
When people complain about others getting disproportionately wealthy they are talking about the shrinking share of the pie.
And no, wealth is not the amount of liquid cash you have. If that were true, I'd be dead broke.
> the rate of growth of the pie certainly does not feel like it is growing as fast as accumulation of nominal wealth of some.
Wealth creators will be growing the pie at a higher rate than those who do not create wealth.
You are smart enough to come up with some answers of your own. It's rude to demand others to do your own thinking for you.
"how does creating wealth hurt others?"
most of this "wealth" is not "created" out of thin air. nor created at all.
more like, transferred.
Musk volunteered his services, took no pay, and voluntarily left after 90 days.
Did they steal everything outright? Someone is worse off in that transaction. (Or everyone a little bit worse off if it’s government grift).
Did they create all that value themselves? Might be fine - positive sum games do exist.
Did they create some system where a bunch of money flows just to them based on the labour of others? Maybe it depends on the details, like how much the labour is paid.
I think Piketty’s point was around capital and wealth tending to accumulate unless something forces it to disperse. This can get worse over time. The last couple hundred years were relatively “good” due to the way revolutions and WWI and WWII basically eliminated many of the wealthy families in the west, a couple times, and the post-war societies were “reset” with good equality that has slowly eroded since (due to insufficient “friction” to prevent accumulating extreme wealth over time, such as high loophole-free wealth and inheritance taxes). Or so the theory goes.
Building on that, when you get extreme wealth you get individuals with power to affect policy for their personal good. Some will choose to be selfish (it’s human nature). Policy shifts in their favour. We end up going in the opposite direction to that since the Great Depression - which really was a collectivist culture of everyone getting a share of the wealth of the nation, rather than being screwed over by rich and powerful folks. (McCarthyism somewhat put the brakes on that in the US in particular, though, which is why you can get e.g. free health care elsewhere in the west).
In a market economy, theft is illegal.
The Great Depression was not caused by rich people. It was caused by the Fed and its failure to understand the relationship with gold and dollars, and mismanagement of the bank reserves.
WW2 was not caused by rich people, nor by inequality.
https://www.persuasion.community/p/why-i-refuse-to-educate-m...
Solution might be legislation that puts limits on how much money each person can spend on elections. But it may be too late, there are so many rich people in the congress that such laws can not pass.
The rich not only want to get richer they also want the lower classes to get poorer so they will work for less and will have to work longer hours so they will have less time and money to educate themselves, and thus will remain clueless about what is going on.
Coercion occurs.
The market is held up by the enforcement of rules, and the US has spent several decades loosening the rules and defanging its watchdogs.
At one point they say that in a market economy there is no theft.
At another point they say that wealth concentration does not occur.
To begin to explain how they are working, I would have to invest in understanding the specific ideological framework they are using. Then figure out how to translate normal terms into their model.
This is a degree of care and effort I spend on people I love and care deeply about.
There is a threshold after which “educate yourself” is a genuine and reasonable statement, because the average person does not have the above average capability required to disentangle the motivated reasoning of a commenter.
It’s a money aristocratic system, and that’s really bad for anyone not belonging to the aristocracy.
And if they continue on this path, we might see heads roll.
Zero sum are things like taxes, where the government just takes it, or robberies.
My worry is that we are not creating enough new wealth but just distributing it lopsidedly.
Wealth is not being distributed. A laborer gets paid for the value he creates. There's no "distribution" going on (except by the government).
Not true at all. Most labourers have nowhere close the pricing power necessary for this to be true. Information is obfuscated (legally of course) on purpose.
Because statistics clearly show median real wealth growing rapidly: https://fred.stlouisfed.org/series/MEHOINUSA672N
I grant you that it is very hard to measure ownership of (wealth generating) assets, hidden behind legal obfuscations.
Lorenz curve [0], GEI [1], Gini index of owned wealth generating assets would be the right thing to measure to see how understand one's share of the pie. But an enormous amount of records of such wealth is just hidden away, using laws that those very owners helped pass.
[0] https://en.wikipedia.org/wiki/Lorenz_curve
https://en.wikipedia.org/wiki/Generalized_entropy_index
BTW I am willing to be convinced to adopt a different position if I see a well researched, credible Lorenzo curve data that has tracked the shadow wealth to some degree of accurate approximation.
Nope. It is created by creating something valuable that other people want to pay for.
> value actually is created by the work it takes to create said product
That's the Labor Theory of Value, which is a Marxist tenet and has been thoroughly discredited. For example, a CEO can decide to take Bunker Hill, or take Sausage Hill. If he picks the more profitable hill, he created more money, with the same amount of labor.
> the value was created by her recording the music, not by her selling tours.
Nope. It was selling tickets to her concerts that made her a billionaire, not her music. That's why she did the concerts.
BTW, why do you think that some concerts charge more for tickets than other concerts? For the same amount of labor setting up the concert?
I am not an anarchist.
> privilege you enjoy
Privileges anyone enjoys living in the United States. That's why millions are always trying to come here.
In most western nations, the “people who run the government” get paid a salary similar to a good software engineer (or maybe a doctor), and progressive taxation lets the government fund social services including free healthcare and tertiary education.
Rather than use Stalin as a straw man, maybe try take your nation in direction that helps people, rather than away?
Using words like that imprisons one into a certain perspective. Wealth creation is not "getting a share of the pie". Wealth is not an apple pie you slice up for your guests.
If Picketty uses words like pie, share, transfer, concentration, etc., then his book is about as valueless as Das Kapital.
It does not matter what uts called but the buck stops at purchasable goods and services I can have. As long it's denominated in real terms (inflation adjusted) it's kosher.
Here is net wealth increasing for all, let's celebrate: https://commons.wikimedia.org/wiki/File:1962-_Net_personal_w...
My point is that the pie is growing and all are benefitting. Yes, rich may be getting more but not at the expense of poorer people as their wealth is increasing too. It's rather unfortunate but it seems that the pies grows fastest (and poor benefit from that growth too) when wealth is allowed to accumulate and yes that means more inequality but if all get better off, that's the price we have to pay for faster growth of total pie
This is the main point of contention though.
Earlier generation middle class seems to have been larger and more financially secure. That would be our parents generation. Of course not all of our parents would qualify.
The best we can do is learn from natural expriments like Finland and Estonia being about as rich before ww2, then by 90s the gap got massive since one was forced adopt more redistributive policies. Same with North / South Korea. Here we have at least some hope of extracting causality
