Sure, today's working class can get access to more goods and services than ever before but when it comes to things that actually matter like our time and our ability to feel fulfilled in our work; we have never been so poor.

People today are unhappy. Our working conditions are deteriorating and we are starting to feel like slaves. Our rents or mortgages are massive and we cannot afford to lose our jobs. People are no longer allowed to be themselves because saying the wrong thing to the wrong person might have serious negative repercussions for their careers and livelihoods. People are turning to video games and drugs to give themselves the feeling of fulfilment that they desperately need.

Based on US statistics I'm like in the top 5% of household income bracket but I feel like a slave at work - I seriously wonder how people in the bottom 95% must feel!

The distribution of income seems so unnatural: http://money.cnn.com/calculator/pf/income-rank/ I bet the distribution of wealth is even worse.

My paternal grandfather, in common with many of his generation was sent to work in a coal mine at the age of 14. Had he not died from a dust induced respiratory disease a few years back I can well imagine him dying from laughter on reading such a ridiculous statement.

People are unhappy because their workplace (and maybe society in generaly) is full of happiness landmines that didnt exist before.

Happiness land mine wise, I am deeply unconvinced. Nothing new under the sun in that department.

Very few people say "the present has a number of trade-offs that's arguably not much better or about as bad as the past." That said, I think a lot of the gains are invisible to white professional class heterosexual secular/christian males, which is part of the problem.

As a pure issue of labor, the average work conditions are probably the same or worse than in 1970 and purchasing power is about the same. Both of those are bad things that need to change, but there are vast cultural and technological improvements that often get diminished, and I think the comment above is a pushback against that, which does advance their argument.

If you only identify with the historically most privileged group, a lot of the advantages like "not being provided with inferior safety equipment because of your race" or "living in constant fear of your career being destroyed because of your sexuality" don't seem very important. What seems "toxic" to the most privileged group can seem like "acceptable tradeoffs" to other groups, and this also speaks to the attitudes of many immigrants and H1-B employees.

Racism in any period in time other than today was far, far worse. Not just, of course, for non-whites in Europe. What were the survival chances of a lone white man in Moorish Spain ? Not good. In India ? You would have been attacked and killed because you were probably trading goods they could steal. Africa ? Same. Japan ? It was illegal for foreigners to be in Japan, punishable by death, before the Meji restauration.

Especially for minorities today's living conditions are amongst the best that have ever existed. Even today's Saudi Arabia is more tolerant of women and homosexuals, and especially much more tolerant of black/otherwise different ethnical people, than the Ottoman empire was 100 years ago. Yes, they kill them, however they don't publicly torture them first anymore.

Racism is not something that's new or unique to our portion of history. It is a constant throughout the entire history of the world that not being part of the majority ethnicity was very, very bad for you, with few exceptions, like the Roman Empire.

I think you're on the right track with the second part of your argument though. Working conditions for the middle class today have, imho, clearly deteriorated compared to 10-20 years ago (depending on whether you're talking Europe/America/Asia and which "class"). This is a constant across most (all ?) of the world, and certainly seems to be getting worse. And there is an exception : China, although that's begun to deteriorate as well. India still seems to be moving forward. But today's level in the west is still at 1980-1990 level conditions, no worse. Compared to before that, we've still advanced. But a hell of a lot of middle class people were better off in 2000 than today.

The comment at top of thread was that relative to the ultra-rich (top 1%), things had got worse for the rest (the other 99%). The commentator expressly accepted that s/he was in a traditionally privileged position - yet it was still difficult.

There are many improvements required to help groups within the other 95%, whether that be by country, ethnic group, gender or anything else. But, you're simply having a different argument, when point of consideration is the much biggest gains that the top 1% is making relative to ALL other groups. This both includes the group you define as privileged and underprivileged.

Even to engage with your argument - the "trade-offs" you're citing that have led to 'cultural and technological improvements' for disadvantaged groups are social movement that weren't created or aided by the ultra-wealthy or large corporates. Quite the reverse. Using the principle of charity, the only 'improvement' I think you could put in this category would be globalisation - and honestly it's too big a change for us to know the outcome on that one.

Sure, there's a good chance: if he was white and middle-class, a statistically decent bet on this website. But otherwise there's a better chance your grandfather was deprived of a decent job by a union, so that the union members could earn more (at the expense of the hypothetical grandfather and the employer and its customers.)

Which isn't to diminish the part about fighting for better working conditions, mind you, which was real enough... but just to point out the checkered nature of this history.

My focus is more on white-collar jobs (which apparently makes up most of US jobs today: http://www.businessinsider.com.au/great-news-weve-become-a-w...). We have become boxed-in and subjected to deteriorating work conditions.

I think allowing white-collar workers to work remotely would be a huge step forward. Then more flexibility with regard to work hours would be another big step forward. These two things are so easy for most companies to implement (and studies suggest they would actually benefit form this financially) and yet they don't do it because the executives at these companies want to feel 'in control' of their employees.

These types of statements are not constructive in any way.

When has this not been the case? "The good ole days"?

Well, decades later, by so many measures, many things are pretty amazing, if you are wealthy or are willing to live as an ascetic and are smart enough to be in a field that at least somewhat resembles its former self's wages. Modern computing devices, building materials, medicine, tools, educational resource availability, and international travel & communication are here, and they are great!

Soon, even the automation of truly tedious, mind-crushingly boring and dangerous but needed tasks that are non-trivial, like driving, will be accomplished. (all the people who have staked their lives on this work whom are no longer needed, please, just don't look at them, they'll figure it out. No problem, Okay?)

Where is all the wealth? Where is the growing middle class? Where are the new cities? Where is the new infrastructure? Where is the game-changing innovation, lifting humanity and life on Earth higher and higher, spawned from the vast business landscape, fomenting living centers all across the nation, an America of much greater population size and no obesity epidemic? Where is the efficiency?

You want a home? You're ready to contribute to society, you're smart, you're burning to make your mark and live? Well, you didn't do it right, so do it right this time and save and be smart and someday you'll be able to afford a home next to a job. A place to grow a family in, in safety and stability. Maybe you'll still be living in your parent's home when they die of old age.

Well the news is in, and we have. But only for those at the top. People at the bottom still work dangerous jobs. Things like mining might be safer than they were before, but they are still very dangerous professions; and these days the job security is worse than it was in the 1930s in such industries. There's also the constant assimilation of jobs by automation.

Many people in first world countries still can't afford shoes, while the richest 1% today are in real terms far wealthier than any 1% has been in the last 100 years.

Devoid? Perhaps not. Completely out of touch with reality? Absolutely.

Actually, what's striking to my mind is how mysteriously consistent the income distribution is with the same family of power law distributions (Zipf-Mandelbrot, Pareto, etc.) that describes such other, disparate, natural phenomena as the frequencies of words in natural languages [1], the sizes of cities [2], the sizes of asteroids [3], the abundances of species [4], the sizes of grains of sand on a beach [5], the magnitudes of earthquakes and avalanches [6], and many other things in the world.

Anyway, my point is simply that the shape of the income distribution should not be so surprising, or strike us as "unnatural", given how often we observe the same shape of distribution for all kinds of things, both in economics and in the natural world.

[1] https://en.wikipedia.org/wiki/Zipf%E2%80%93Mandelbrot_law

[2] http://pages.stern.nyu.edu/~xgabaix/papers/zipf.pdf

[3] http://250words.com/2014/07/the-mathematics-of-asteroids-ear...

[4] https://en.wikipedia.org/wiki/Relative_abundance_distributio...

[5] http://arxiv.org/pdf/cond-mat/0412004.pdf

[6] https://books.google.com/books?id=x8nSBwAAQBAJ&pg=PA57&lpg=P...

Are the sizes of cities and asteroids "symbolic systems"?

Anyway, my point (consistent with yours in fact) is simply that the shape of the income distribution should not be so surprising, or strike us as "unnatural", given how often we observe the same shape of distribution for all kinds of things, both in economics and in the natural world.

Even the other 95% of us have almost always have been poorer than we now are. Here in the suburban northeast a person can work about 40 hours per week at any restaurant or department store or do almost any other kind of normal menial labor to bring home something like $20k per year.

On that income, they can live a much better life than almost anyone ever did 50 years ago. Sure, they'll spend half of their income on housing, never be able to afford much time off from work, and may never travel anywhere by air, but people have always lived like that. Meanwhile they benefit from ever improving medical technology and the boundless educational opportunities afforded by the worldwide web.

People may be incapable, for psychological or emotional reasons, of taking proper advantage of the exceptionally good circumstances they find themselves in. That doesn't make them poor in my book.

As I understand it (not a US citizen) most of this technology comes with a mortgage sized debt if you aren't insured? If so I think this reinforces the GP's case.

----

MRI: ~$2.5k

Laparoscopic surgery: $2k -$5k

One day of hospital inpatient care: ~$2.2k

Heart bypass: ~$100k

3 months chemotherapy: $20k-$30k

----

I'll let you judge for yourself whether these are outrageous and crippling or not.

I'll only add that, from my limited experience here in CT, the hospital will waive most of your bill if you show financial need. I'm not sure if the state picks up the tab or if the hospital just eats the cost when this happens, but I've seen the waiving of medical fees firsthand.

I have no experience with the big expensive ones like chemo or heart bypass.

I couldn't agree more with the OP. Jobs are hard to get. Even chit jobs are not the chit, I grew up with. They are just Terrible. Even immigrants are leaving them. Unions are declining for numerious reasons. Realeste will be unobtainable for many of us. To top it off--we are being regulated, and fined like no other generation I can remember. Banks, landlords, schools, employers are taking every cent they can from us. Police are basically revenue collectors in my neighborhood. I don't see people out socializing at night. They safely go to the coffee shop, and just go home. Let's go fishing--no, the oceans gave been decimated. Let's go for a drive--well there's global warming. Let's just have sex, well some us still do that, but it's so clinical, and in the back of my mind, "Do I really want a kid from this person who's still trying to live up to the standards his/her mother's, mother grew up in?" (In that last sentence, you can reverse mother/father, and the meaning is the same.) Do I trust my fellow man in business, and moral issues; not like I used to. It's just too cut throat, and I have seen people do horrid things to their brother in order to get ahead financially.

So no, I don't see a lot of happy people.

As to the "good stuff". We don't have a draft. We have access to cheap stuff made in China. Cars are supposedly a bit safer, but I'll take a older vehicle that I can work on over a proprietary computer on wheels. They figured out the genome, but I trust my doctor less than I ever did before.

I ran out--honestly.

Last time I checked homeowners insurance prices were something between 0.5-1% of the home value annually. It sounds ridiculous but it does not cover flood, you need separate insurance for that.

Edit: Lender will require this insurance until home is 100% paid off.

Chit jobs?

This tells you everything you need to know about happiness. How hard and how many years a person fought to get to the top 5% may have very different views about how happy they are.

I look around on the subway in the morning and almost everyone has this glum, unhappy expression on their face.

In my opinion : no.

I agree with the thrust of your post: the working class is rich in palliatives and bromides and poor in things that actually make life better, but I do take a small issue with your superlative. I'm certainly glad I'm not a 19th century meatpacker.

I think his point is that those jobs still exist, the working poor are still suffering as much as they always have been, and that there's been a recent reversal in progress.

My ancestors worked in shitty conditions that destroyed their bodies to see that their descendents could have a better life. And, here we are, and their descendants are living relatively as terribly as they did.

If money is the problem, then the solution is not to engage in petty social democratic welfare reforms, but to end the monopoly on currency and allow for communities and individuals to coordinate savings-investment decisions and account for their local capital using the denomination of currency that they have decided to create. This is the mutual credit solution as advocated by 19th century anarchists and a minority of monetary reformers since then.

Pfeffer quotes Article 23 on the "right to work," and indeed full employment has always been a bizarre fetish for Keynesians, social democrats, Marxists and conservatives. The Protestant work ethic is the right-wing version of the labor theory of value. It is a contradiction how so many bemoan the supposed rat race working conditions and then advocate the "solution" of having the state put everyone into the rat race through full employment policy. Nowhere have I seen any social democratic reformer argue for artisanal crafts and decentralized governance. It's always more and more massive centralization. I will note it was the mercantilists who first provided economic rationales for full employment. And they went to great lengths to achieve it: anti-vagrancy and poor laws to forcefully turn people into serfs. The current proposals are more humane, but borne of the same logic of "to live is to toil".

I will also note that a reason why formal models haven't focused that much on things like subjective utility and happiness is because those suffer from intractable aggregation problems. It's easy to speak of the "public interest" in colloquial language, it is brutally difficult to model and quantify it, actually drawing the line of how far it extends. Then, of course, interpersonal comparison of utility is fraught with issues because there is no measurement of utility as such. Robert Nozick's thought experiments have been good at illustrating this.

This trite paternalistic reformism leads nowhere except to further exacerbation of instability.

There's a really banal reason for this. The vast majority of people want jobs.

In Argentina when they implemented an incredibly popular "right to a job" scheme (Plan Jefes) and then replaced it with basic income (i.e. get the same money but you don't have to turn up to work), a majority continued to do their jobs.

It helped that the jobs that the state were paying them to do were, by and large, necessary and rewarding - looking after the elderly, etc. I doubt if the work they were doing were debt collection or cold calling to sell insurance they'd have wanted to continue working.

Indeed, it was the neo-Keynesian focus on full employment that led to short-sighted reliance on economic models like expectations-agnostic Phillips curves and IS-LM models with interest-sensitive money demand to the exclusion of other macro considerations, that ultimately culminated in a stagflation bust in the 1970s. Nor was this even a perversion of Keynesianism. It was Keynes himself who formulated simultaneous-equations IS-LM in lectures from 1933-1934.

Employment as end in of itself also led to mercantilist-era injustices.

But again, this is tangential to the issue of money.

As far as I can see, only industrialists who profit from lower wages and a more docile workforce would be against this.

>Nor was this even a perversion of Keynesianism.

Neo-Keynesianism was absolutely a perversion of Keynesianism. It was an attempt to marry it to Neoclassical economics, which was antithetical to Keynesianism in the first place.

>It was Keynes himself who formulated simultaneous-equations IS-LM in lectures from 1933-1934.

No it wasn't. It was Hicks and Meade trying to apply some sort of equilibirium fetishism to the theory of interest, employment and money.

As far as I can see, only industrialists who profit from lower wages and a more docile workforce would be against this.

Job guarantee proposals are minimum wage. Even if they were not, the idea that industrialists benefit from a "docile workforce" is couching things in a questionable Marxian reserve army of labor analysis. It's not as if state-administered job guarantees are going to be tools of empowering the working class. It's going to be administered as a neutral tool for economic efficiency. Even then, the industrialists absolutely benefit from easy access to a minimum wage workforce.

It was an attempt to marry it to Neoclassical economics, which was antithetical to Keynesianism in the first place.

Nonsense. Keynes came from the neoclassical Marshallian tradition.

No it wasn't. It was Hicks and Meade trying to apply some sort of equilibirium fetishism to the theory of interest, employment and money.

Yes, it was. Hicks and Meade only developed one particularly influential variant, and they were inspired by notes from Keynes' lecture attendees who were taught a four-equation model with almost no major difference other than having an exogenous variable for "state of the news" (expectations). Ultimately this was not a major difference, since neo-Keynesians like James Tobin did focus on such areas, and on financial instability as well.

Robert W. Dimand documents the origins of IS-LM and Keynes' Marshallian roots in a 2007 paper: http://www.unites.uqam.ca/philo/keynes/docs/dimand.pdf

Maybe. But that doesn't mean it's incorrect.

What's your explanation for the much-observed fact that most of the productivity gains of the last thirty years haven't trickled down to most of the workforce?

>Keynes came from the neoclassical Marshallian tradition.

No one in modern economic theory belieces the Marshallian tradition is identical to modern neoclassicism - never mind neoliberalism.

Monetary policy is one of the main reasons. Instead of letting a secular deflation emerge with growths in total factor productivity, central banks still do price level stabilization instead. The monetary disequilibrium economists have written much on this. George Selgin has a great and relatively accessible essay called Less Than Zero that discusses this.

No one in modern economic theory belieces the Marshallian tradition is identical to modern neoclassicism - never mind neoliberalism.

But there is no single "modern neoclassicism," that's the point. Yet to somehow deny that Marshall was a neoclassical is to make the term meaningless. The approaches of Marshall, Menger, Walras and others all had important differences despite being ultimately lumped as "neoclassical".

Neoliberalism isn't even an economic idea. It's a political term used by people opposed to it to describe what they perceive as a shift into corporate rule since the 1970s. Yet this narrative is full of holes, not least of which is the history of mercantilism, imperialism and later corporation-state cooperation. I'll be writing a book on this subject at some point.

Yeah, that's what happened in the 19th century. It didn't help improve poverty at all - exactly the opposite, in fact. The series of financial crises and subsequent misery is partly what led to the creation of the federal reserve.

>Neoliberalism isn't even an economic idea.

It's strongly linked to neoclassicism. Plenty of neoliberal dogma has its underpinnings in neoclassical ideas (e.g. theory of the firm).

Theory of the firm has many variants. Coasian, Alchian, evolutionary, etc. Again, what type of neoclassicism? What is neoliberalism, anyway? [1] It's used as a snarl term rather than a particular set of ideological convictions. I've seen it used to describe various forms of economic liberalism, but also more esoteric Foucaltian analyses.

The Golden Age of Capitalism was still a time of imperialism (Truman Doctrine in effect), one of seven times less regulation than today (as measured by size of the Federal Register) and all sorts of other statuses that are nowadays attributed as being unique to neoliberalism. There was no sudden "jump" in the 1970s, it's been an ongoing process since mercantilism.

[1] http://folk.uio.no/daget/neoliberalism.pdf

Which it isn't, because it acts as a choke on spending.

>It's acknowledged that the period from 1874-1896 was one such event.

Acknowledged by historical revisionists.

>As for banking panics, they were always particularly bad in the United States because of geographic limitations, specific bondholding requirements and other restrictions.

Or rather, lack of counter-cyclical spending.

>Theory of the firm has many variants. Coasian, Alchian, evolutionary, etc. Again, what type of neoclassicism? What is neoliberalism, anyway?

A political ideology that champions unconstrained markets, privatization, fiscal austerity and zero constraints on the movement of goods and capital. This isn't a controversial definition even if people do use it with a snarly tone of voice.

>There was no sudden "jump" in the 1970s,

If you take a look at the share of labor's income as a % of GDP there absolutely was. The trigger point was likely Reagan firing the air traffic controllers (that marked government support for open season on all unions).

Because much of the productivity gains of the last 30 years have less to do with extra labor done by workers, and more to do with the fact that we've had personal computing advances, industry-specialized software, etc., etc.

It used to take our accounts payable team two weeks to process an expense reimbursement, because I had to give them the paper receipts, mail it in, they would record the data by hand into a ledger, validate it by phone, and then cut me a paper check. Now, I can take a photo of the receipt, submit it digitally, and it's automatically recorded and validated by TriNet expense software, and the payment is programmatically added to our accounting software. All someone has to do is click "Approve" or "Disapprove".

It used to take me a couple hours to write a pen-pal, and a few days worth of travel time in the mail before they would receive the letter. Now I can send them an email, a Facebook message, an SMS, a tweet, etc., etc.

Guilt by association with Marx? Seriously? That's what passes for a rebuttal?

>It's not as if state-administered job guarantees are going to be tools of empowering the working class.

They were in the 30s. If you can drop your McJob and get a guaranteed job with decent benefits and pay with the Public Works Administration you can tell your boss where to shove it. That's called "empowering".

>Nonsense. Keynes came from the neoclassical Marshallian tradition.

"Reaction against" would be more accurate. Keynes never had an equilibrium fetish (the kind that is used to pretend that unemployment isn't a problem because "a reversion to the mean is just around the corner").

The purpose of the New Deal was not empowerment, but emergency restructuring. Some of the initial programs (AAA, NRA) were deemed unconstitutional and it was built into a corporatist model for maximum expediency. There weren't any McJobs in the 30s, and the New Deal was certainly not about "decent benefits and pay". Nor would a contemporary minimum wage JG be.

Marshallian analysis was not a purely comparative static approach. It did allow for dynamism and fluctuations as actors converged between states. That Keynes spoke of homogeneous investment functions and "marginal efficiency of capital" shows that he was still rooted in that tradition.

You're moving the goalposts, though. IS-LM is still his.

That must be why they throw a torrent of lobbying dollars at think tanks that say that raising the minimum wage will cause the sky to fall.

>The purpose of the New Deal was not empowerment, but emergency restructuring.

You must have a different definition of "relief for the poor" than the rest of us.

>There weren't any McJobs in the 30s

Believe it or not, cooking was actually a thing in the 30s too, and it was, likewise, one of the lowest wage jobs out there (~35 cents an hour avg wage).

Again, I don't see how the New Deal can be couched in such heroic terms. The principal influences for the New Deal were Foster and Catchings, who looked it at from the lens of economic output.

Fight it, accept it and then whinge about it and subsequently post lower profits seems to be the default modus operandi.

>From that point on, the minimum wage JG force would certainly be a benefit in offering an easily accessible venue for sellers of labor who will be compensated at a price no higher than what the law sets as the minimum floor to begin with.

Putting a floor on wages lowers wages to that level huh? Brave hypothesis. Too bad about the evidence.

>Again, I don't see how the New Deal can be couched in such heroic terms

It was never popular with neoliberals.

only as a proxy for security

And also personally I get a good old dopamine kick out of solving problems in a group. It may be that I'm socialized to behave that way. But then again a culture that ingrains that kind of behaviour... (see above).

http://www.gizmag.com/bumpy-whale-fins-set-to-spark-a-revolu...

And then again I'm of the firm belief that parasitism is a basic feature of complex reproducing systems. So, the solution is more of a process, an arms race, than a destination or closed end solution.

http://infidels.org/library/modern/meta/getalife/coretierra....

There are plenty of people in the UK who do seem to live a "benefits lifestyle" - i.e. they (seem to) choose not to work. I guess most of them are looking at lower paid jobs where the difference in earnings from a 40 hour a week don't make it sufficiently worthwhile for them to start working, when they can get the majority of it for not working.

freeload - intransitive verb:

to impose upon another's generosity or hospitality without sharing in the cost or responsibility involved

I know a few people over 30 with ridiculously accommodating parents who still live at home and play MMOs for 12+ hours a day. I feel sometimes the solution for many people is to simply force people to do what's best for them.

It's also a contradiction that the same people that moan about the pursuit of money and say that money isn't everything are the people that advocate increasing taxes to fund this or that program as the solution to every problem.

The belief that "money isn't the most important thing" is not inconsistent with the belief that "a government needs to raise taxes to pay for the operation of a society".

I left my last job, because I was bored, we were on autopilot as a company, and I had completely mastered our architecture and system. Any assignment I received was trivial to complete. In most ancient societies accomplishing a feat like this would result in not having to do as much work and to supervise others doing it while I take it easy and explore my own interests. While I do think many employers would never do this, as I was exiting the company I discovered, through conversations with my CEO and CTO, that a version of this was more readily available for me than I realized, and I could have done more to take advantage of it.

When I reach such a position of trust and respect of my executives again I will definitely leverage it more than I did at my last job. I suspect a lot of professionals fail to do the same.

Also, the left is generally a fan of basic income, which isn't along the "to live is to toil" line of thinking.

And as a final a side note, in Canada it's perfectly legal to make your own currency (e.g. Calgary Dollars), but its use hasn't seemed to have had any politically significant effects.

The private organizations are certainly large and centralized. They are this way largely because of legal climates that subsidize their inefficiencies and inhibit the onset of diseconomies of scale.

It's not a proper interpretation to think of the government and the private sector as being opposed. After all, governments do want economic growth and competitiveness in international trade. As such, their actions will often be to help private corporations get larger through protectionist measures that might have good short-term effects (higher employment and larger industry) at the expense of the long-term effects when the propped up large industry inevitably starts to trample on the citizens it was supposed to help. Again, the solution is not to keep engaging in the vicious circle of reform, but settle it grassroots at last.

Gabriel Kolko's The Triumph of Conservatism documents this process quite well during the U.S. Progressive era. Governments and corporations collude for shared ends more often than not. Corporations are creatures of the state, let's not forget.

And to clarify, I wasn't strictly referring to government when I said "public organizations". I think any public institution is more or less constantly under threat from private interests, and when parts of a government are captured (as in your examples), I no longer consider that part of them a public institution.

Though the fact that there's a range in the degree of capture, with the USA not doing well and a place like Switzerland doing well, I don't see it necessarily as an inevitably large property of government itself.

What I find unconvincing in both anarchist and libertarian philosophies is their solutions for preventing the same sort of capture of their institutions - given that (at the very least) natural monopolies exist, and in both scenarios the institutions that are explicitly public aren't especially strong.

Usually diseconomies of scale start at a very large level , far above the level of a single community. That's the case for most physical goods.

Heck , you see it best in small countries like Israel - everything tends to form into monopolies or duopolies , exactly because of economies of scale. And when the state tries to think about building alternative companies, the sums involved are quite high - $500 million + . this is way beyond what a community could afford to aggregate even under optimal conditions.

I spent more money on my education in USA that what my parents had earned over their lifetime, without any government support. I wonder why American youngsters are so pessimistic about their future. If a poor Indian can come here and kill it they have no excuse.

All ideologically "pure" solutions like different anarchist models, puristic free market ideologies etc. turn out to be very fragile if there is some aspect of human nature and social organization they didn't take into account.

Free markets modulated with social democracy seems to work very well in practice.

It's the old dilemma between big ball of mud vs. finding the right set of primitives that fix it all.

Has that worked ever? Are the people of Flint say supposed to fix things by issuing their own currency?

Granted, issuing currency is not a magical bullet for misallocations in real capital. Though it just might speed up the process of finding new complementary uses of it. Political constraints like being vetoed by a higher authority still exist.

While I agree with much of your sentiment, Keynesian and Marxist economists favour full employment at least in part because in economic terms it raises the reservation wage because there is no reserve labour pool.

That said, Marxian economists have evolved significantly and a lot of them have since converted to some form of Post-Keynesianism.

Maybe it's because the decentralized system is less efficient in combat with a more centralized one, which ends in arms race to total centralization?

For example, the First International was formed as a response to the more organized bourgeoisie, which often utilized the state repression apparatus against unions. And unions themselves formed as a reaction against organized wage labour.

But I think many leftists today are coming in favour of universal basic income. In the sense it is democratic, and democracy can be considered both centralized (we all agree on something) and decentralized (we all have the same amount of power). So I think the left is becoming more and more pro-democratic, which can be the solution to your conundrum.

The problem is, centralization is short-term thinking. With centralization you can set out to do one specific thing and it will happen (e.g. Manhattan project, Apollo project). But centralization in the long-term turns into 20th century USA vs. Soviet Union, because the central planning committee gets every specific thing they want but what they want is not the same as what is good for the country.

Centralization is, essentially, monoculture. If the monoculture is perfectly adapted for existing circumstances then it will be more efficient than a more diverse system but then as soon as circumstances sufficiently change there is a catastrophic systemic failure.

I think there are solutions to monoculture problem, like subsidiarity.

I hear you but, the way you've expressed this could use some improvement. If one of them did, they would cease to be a social democrat; social democracy implies central control.

Please elaborate on the idea of ending the monopoly on ccy, and the model of small communities you have. Could your idea of community be a subset within a formal association (e.g. church group with a membership, elected board and minor constitution). Or could it be a subset of a limited company?

Both models are fine. Private currencies have historically come from a variety of institutions. You could have a particular mutual credit bank issuing certificates convertible to a valued commodity as an incentive for locals to trade in and coordinate infrastructure renovation or other projects. You could have labor vouchers redeemable for some hourly or other unit of work, as Josiah Warren tried them.

Right now there are models like CES and time banking that are somewhat active but highly limited as a result of jurisdictional constraints.

There's no particular limit to level of subsidiarity or type of currency. Local currencies have a history: https://en.wikipedia.org/wiki/Local_currency#Characteristics

Private trading circles or backing currency with commodities (usually natural resources mined by oligopolies) would seem to veer towards making society more unequal rather than less.

That's a very strange point of view, because localism is absolutely fundamental to the more sophisticated and modern European ideals of social democracy.

And it's not necessarily antithetical to centralised provision of essential services like healthcare, infrastructure management, and even business development.

The soc dem origins of the EU have left it notoriously generous when it comes to funding small business initiatives at the local level.

Beautifully put. Great comment overall.

You might be interested in Hayek's 1974 paper on the subject [1]. It's an excellent read in which he briefly outlines the evolution of money, outlines how central banking practices such as inflation targeting can be dangerous, and makes the argument for decentralized money - akin to Mundell's "currency areas" [2], although he never uses the term.

The ultimate aim in decentralizing currency is the "control of value by competition" so that central banks would be unable to harm their representatives and constituents through poor monetary policy, as Hayek outlines in section 9 of the paper. This would also help curb the "beggar thy neighbor" QE "attacks" we currently observe from major US, European, Chinese, and Japanese central banks.

He notes the same point about employment that you make, with which I agree: My impression is that economists have become somewhat over-ambitious concerning the degree of stability that is either achievable or even desirable under any conceivable economic order, and that they have unfortunately encouraged political demands concerning the certainty of employment at a hoped for wage which in the long run no government can satisfy.

The problem is that decentralization simply transfers the power of the mint from central banks, who are generally supposed to be "public" entities that act in the best interests of the overall nation, to a natural oligopoly of private institutions that will still need government oversight, and who will have short-sighted incentives that are generally aligned against the best interests of the nation as a whole.

Not to mention that this oligopoly of new, money-issuing private banks will still need government regulation and oversight to function together smoothly and provide some basic level of welfare to the low-wage, low-skill, menial laborers that will still be required to pick the food and work the registers in this capitalism, free-market skewed society.

Hayek uses a shaky argument here: The real danger is thus that, while today the people submissively put up with almost any abuse of the money prerogative by government, as soon as it will be possible to say that money is issued by 'rich financial institutions', the complaint about their abuse of the alleged monopoly will become incessant. To wring from the money power their alleged privilege will become the constant demand of demagogues. I trust the banks would be wise enough not to desire even a distant approach to a monopoly position, but to limit the volume of their business may become one of their most delicate problems.

He argues that banks will limit their power because they will be wary of the helpless, powerless complaints of the demagogues? That is the position we find ourselves in today, with many people upset and complaining about the power of the TBTF banks and corporate entities in the US, but with vocal demagogues unable to do anything about it but complain on internet forums. Banks will take as much power as they can get as it is the nature of the private corporation to achieve a monopoly at all costs, especially when dealing with a product like printing money that has huge barriers to entry and massive network effects that will inevitably lead to an oligopoly (think Visa, Chase, Mastercard in the credit market).

I don't know what the best way forward is, but I do not believe it to be increased privatization and more power for the corporation over the individual and the society.

[1] https://mises.org/library/denationalisation-money-argument-r...

[2] https://www.aeaweb.org/aer/top20/51.4.657-665.pdf

Actually Hayek himself was somewhat confused on the subject. He didn't favor free banking. Lawrence H. White later wrote a paper in 1999 entitled "Why Didn't Hayek Favor Laissez Faire in Banking?" that clears up some misconceptions.

Your definition of "currency" is too narrow, though. It includes much more than monetary certificates for bank deposits. See the history of local currencies, Silvio Gesell's Freiwirtschaft, etc.

Even within a free banking system, there would be inherent limitations in that banks would have to adjust their reserves so as to make full use of their lending capacity and profit on interest, because of the clearinghouse mechanism acting as a reflux. You're aware of the free banking theories of Selgin, White and Dowd, I presume.

Once you extend "currency" to being much more than bank money, though, I think your concerns become severely diminished.

A local currency is no different in practice than a national currency. Its use is just restricted to a particular area and thus its value is tied to a different basket of goods and backed by a different issuing authority. But all of the derivative instruments would scale up and down across both categories of currency - local bonds vs national bonds, local bank deposits vs national bank deposits, local equities vs national equities.

> Even within a free banking system, there would be inherent limitations in that banks would have to adjust their reserves so as to make full use of their lending capacity and profit on interest, because of the clearinghouse mechanism acting as a reflux. You're aware of the free banking theories of Selgin, White and Dowd, I presume.

This addresses the possible amount of risk in the system by using clearing house latency to set a cap on fractional reserve banking and ensuring that banks are marking their positions to market and not lending out too much without enough assets to back their loans. (Note that it does not eliminate risk in the system, but that banks would have to agree with one another on the latency or "reflux" as you call it that would keep the system somewhat safe from bank runs and the proliferation of unsecured loans.)

It does not address the issue of the redistribution of wealth and the creation of social safety nets that would be minimized under a free banking system as they are inefficient in a pure profit sense.

> Once you extend "currency" to being much more than bank money, though, I think your concerns become severely diminished.

I use "currency" as Hayek does: a generally accepted media of exchange. This definition is already sufficiently broad, as it captures all money created by all central banks, as well as most forms of marketable equity and debt, which are simply first order derivatives of the money created by a central bank. I'm not sure what "bank money" refers to but I assume this definition covers that asset class as well. So it is almost impossible to broaden the definition I am working with, and it does not diminish the validity of my argument or concerns at all.

Certainly some systemic cooperation would be in order to maintain reflux, but it's more reliable than deposit insurance when people's equity is at stake.

Social safety nets can be ensured from a myriad of techniques.

There might be a lot of reasons why decentralized governance isn't advocated. First, there was a proximate experience in Occupy Wall Street of how decentralization torpedoes activism. I think a lot of activists walked away from that thinking "the best possible time, the worst possible approach." OWS was a painfully squandered opportunity to get "petty social democratic welfare reforms" through conventional means.

The "mutual credit solution" also doesn't necessarily work without global participation. And again, I think a lot of well-meaning radical communists—the kind far removed from the Soviet nomenklatura—realized that global revolution is basically impossible. They weren't pursuing the same goals as 19th century anarchists, but they faced the same challenges: how do you convince people of your ideas which work only when the WHOLE WORLD participates? After all, if we live in our little republic with decentralized mutual credit economies, we'll just get taken over by a country that has a well-fed and disciplined army. That's not precisely what happens historically, but Chinese communism at least was achieved by violence, not by ideas. To spread radical ideas, you have to do the things that centralized countries are good at, like fielding armies. I can't see a world where "mutual credit" can survive side-by-side with huge armied countries.

> full employment has always been a bizarre fetish for Keynesians, social democrats, Marxists and conservatives.

I think people emigrate to where the jobs are, regardless of what government there is. You're not appreciating that we already live in a world where there are lots of different ways of governance and participation. But we have legs, and legs on average move people from poor countries to richer ones. That's a law of nature stronger than politics. So I wouldn't call it a "bizarre fetish;" it's just that political ideas that produce more jobs tend to survive. It's a Darwinian process that selects for full-employment ideas.

The countries that don't provide full-employment are eventually emptied of their people. We call that brain drain in some places. In Russia, population declined 4% from 1991 to 2008. That's INSANE: two decades of population decline! I think availability of work for talented people, a legitimate meritocracy, safety, etc., all have a role in this decline. But regardless, all ways of Russian government thinking will cease to exist if people don't want to live there.

So be honest: do you think a kid born in a "mutual credit" country will want to stay there, or will still want to move to the United States?

The Bolsheviks never tried decentralization. Quite the contrary, they were all devoted to having a single top-down vanguard force the program on the citizenry. They nearly destroyed their country between 1918-1921 with their policy of "war communism" and had to introduce capitalist reforms in the NEP just so the peasantry didn't starve to death. Their doctrine of international revolution was a separate idea altogether.

Also, how does relinquishing monetary monopoly mean you have to retire the army? They're two completely orthogonal things.

OWS was a joke from the start. It had no identifiable goals to speak of.

College enrollment has increased by more than 1000% and graduation rates have increased by 10% thanks to those "assholes" who run colleges and those "jerks" who underwrite college loans. (US Census)

Those "assholes" in the environmental industry and their "criminal" counterparts in government have cut by about 2/3 air pollution in the US since 1900, while the population has exploded. (US EPA).

Progressives have an important role to play in demonizing business, finance and government. It gets the ball rolling for reform that sometimes creates new businesses. Thank you progressives.

They don't know when to stop and the hysteria/drama engine chugs along causing government to over-reach with feel good legislation and regulation & boondoggles that rob the treasury and business of funds needed to train, hire and maintain a vibrant work force... of good paying jobs... not retail and fast food gigs.

Also interesting how you think in binary, things are either good or bad, assholes or saints. Could it be that some good can come from more access to college, while other negative effects like administrators taking advantage of unlimited financing to naive students that results in crippling lifetime debt happen at the same time?

At the end of the day it's still the same academicians doing the work at these institutions, regardless of the funding source. If the DOD has more success than the NIH for example in funding good research, it's probably because their budget is literally 20 times bigger.

The education system that we ultimately got was a far cry from John Dewey's philosophy, no matter how much lip service he receives.

It's all about risk/reward and trying to reduce your personal risk as much as possible.

I would hardly call it ’indentured servitude’. Everyone has a choice.

There needs to be more personal responsibility.

Yes, everyone has the choice of starving in the streets.

Without regulations on insurance and socialized health care almost no one would receive the supposed benevolence of those assholes in health care.

>College enrollment has increased by more than 1000% and graduation rates have increased by 10% thanks to those "assholes" who run colleges and those "jerks" who underwrite college loans.

Colleges stand to profit from enrollment rates, college loans are a debt factory, college costs have skyrocketed while relative incomes have shrunk dramatically. Those assholes and jerks have laughed their way to the bank with winfall profits from this "everyone needs to go to college" propaganda.

>Those "assholes" in the environmental industry and their "criminal" counterparts in government have cut by about 2/3 air pollution in the US since 1900, while the population has exploded.

Not sure what your point about this is considering that the EPA is a liberal construct in the first place. In libertarian society there would be no EPA.

>Progressives have an important role to play in demonizing business, finance and government. It gets the ball rolling for reform that sometimes creates new businesses. Thank you progressives.

I can just feel the aggression oozing off of your comment here. Progressives also have an important role to play in civil rights, social systems that everyone relies on, and supporting and funding an infrastructure that allows equal footing for the poor and the rich. But I see you're sticking to the "big gubment stay out of my life" narrative and I can tell that you would probably benefit from that being the case.

>They don't know when to stop and the hysteria/drama engine chugs along causing government to over-reach with feel good legislation and regulation & boondoggles that rob the treasury and business of funds needed to train, hire and maintain a vibrant work force... of good paying jobs... not retail and fast food gigs.

You know who robs the treasury of more funds than social programs? Businesses that don't pay taxes. Do you know who robs businesses of money? No one because when you go into business and fail that's no one's fault but your own.

What's a good paying job without socialism anyway?

You are also ignoring the comically large environmental pollution that isn't airborne. Superfund sites, things like Love Canal, are all the fault of these companies.

There's a thought experiment called the "Prisoner's Dilemma": two people are caught robbing a bank, and are taken to separate interrogation rooms; they can either rat their "friend" out or stay silent. If they both keep their mouths shut, they both take a short sentence; if one talks and the other doesn't, the rat goes free and the other guy gets a big sentence; if they both talk they both get a mid-range sentence.

The people who play this game can be neatly divided into the ones who play for the minimum jail time, and the ones who play to build trust with their friend.

Now imagine that, instead of reducing your jail time, screwing your neighbor nets you a few thousand dollars.

“The focus on costs, profits, and economic success has pushed concerns of human well-being to the side. And this economic focus has apparently led to a belief, at least as reflected in choices about who and what to honour, that the ends surely justify the means, no matter how harsh.”

All of those, on some level, are affecting the consumer negatively for profit. They all fail in the long term, but are less expensive in the short term, making business easy for the people who can't run a business to save their life.

For a non-serious look at the subject read "TFM - Total Frat Move".[2] This is a very light book, but it captures the fraternity mindset at a party school. The frat is a training ground for assholes. The important item is in the introduction: "All but two US presidents since 1825, 76 percent of the U.S. Senate, most high-level executives, and all of the Apollo 11 astronauts were in fraternities."

[1] http://www.amazon.com/Assholes-A-Theory-Aaron-James/dp/08041... [2] http://www.amazon.com/Total-Frat-Move-W-Bolen/dp/1455515035

Pretty much the entire film is about how asshole-ism works in our social networks.

[1] https://en.wikipedia.org/wiki/Delta_Kappa_Epsilon#Controvers... [2] http://yaleherald.com/sports/bros-booze-and-balls-why-yale-a...

I'm guessing most people didn't read it through, everything was well written, cited and not vulgar. Ultimately it touches that we need to adjust our values as a society and move away from just raw wealth to more intangible things that are not currently modeled effectively in economics. Things like family, community, feelings of respect and dignity for your self and others.

The title might be off putting but the content of the essay is solid

His conclusion seems to be that in discussions of things like Obamacare, the gig economy and Greek austerity people don't focus on the human impact as much as he'd like them to. Which is fair enough I guess but doesn't really justify the title.

"The prince" is the best book I ever read on business.

I'd say, given a population of 7+ billion, most assholes simply make a bed of shit and then lie in it, dragging their family and friends down with them. Nothing winning about it.

Now, if you are rich and powerful, but not enough so to be famous, then I could see your point.

So in your mind you've been swindling people your whole life.

That's pretty awful.

If someone sells something to me and makes profit, that means it could have been sold to me for less, and they are pocketing the difference. So they are exploiting the fact that I value the thing they are offering at more than it is actually worth to make profit.

All profit is this way. Small profits are tolerable, large profits usually have the adjective 'obscene' attached to them because they are inherently exploitative.

To make large profits you must either rip off your employees by underpaying them, rip off your customers by overcharging them, or some combination of the two. See, for example, Apple. Enormous profits, how? Exploiting factory workers in sweatshops. Criminally conspiring to drive down tech workers' wages. Combined with overcharging for every product.

When you buy something, it's because you value it more than the money you pay for it.

When you sell something to somebody, it's because you value it less than the money you get for it.

Win-win!

And, channeling Carlin: Everybody making less money than you is a loser, everybody making more money than you is an asshole.

Having said that, it's all too easy to find instances of wealth 'created' on the backs of other people, or on the back of natural resources that will run out. I've seen way too many people with college educations get taken advantage of, fresh out of school, just because the employer could. Why not?

The evidence against the zero-sum perspective of wealth is overwhelming.

You can go and harvest the wheat. Or, you can let the wheat rot, and spend your day digging a hole and filling it in. Same energy spent. One creates value, the other doesn't.

You can light the gas under your stove, or you can set your curtains on fire. One destroys value at speed, the other doesn't.

You can sew something with a needle and thread. Or you can use a hand-wound sewing machine you inherited from a relative. Same outcome, one is far more energy-expensive than the other.

Slavery, colonization and wars enabled a lot of prosperity building too, and also a lot of technological innovation.

I'm interested in this topic - what to do about corporations. Something I think about: if we don't have corporations what replaces them? How do you implement business that require commitments that are larger than family?

For example. Consider a digital social network that was oriented around commercial arrangements. You could form complex contracts in a group, and produce a reputation system formed from sets of people. There would be a deposit system, and an opt-in judiciary for dispute resolution. Could this - a digital upgrade of the icelandic commonwealth - be a more powerful mechanism than The Corporation?

There's a big difficulty in wanting to get rid of corporations, and that is that they emerged from a process of true evolution. The Dutch and then English East-India companies allowed humans to do things that had just not been viable previously. In fact, they were so successful that they could have obsoleted nation states. Certainly the East India company could have, and was reined in only because its shareholders and employees continued to show deference to the crown. Nation-states got scared at that point, and imposed significant political controls - corporations are not allowed to maintain standing armies. So I think it's important to appreciate what powerful tools they are. Any discussion about getting rid of them needs to consider - how do you implement large-scale projects in a hypothetical world without corporations?

The challenge, as I see it, is to have governments with a spine, but governments not so big that they stifle freedom or crowd out opportunities. Governments need to be powerful enough to overrule the biggest corporations so that corporations can exist without the cronyism. Power alone is insufficient though because even a powerful government is peopled by individuals who can sometimes be bought cheaply.

The East India Company is a somewhat terrifying example of what is possible with unbound power for corporations. It's an equally bad and unsubtle endpoint as an all government central economy. Diversity of thought and composition, as in many places, yields better results than homogeneity.

I think corporations are necessary for large-scale, long-term commercial endeavours. Certain classes of services to both individuals and businesses need continuity and corporations are well-suited to providing that kind of continuity.

Where we are today forgives incumbent large corporations too much and (certainly in Canada) makes it far too difficult for entrepreneurs to start small businesses.

there is no case where value is created and no energy was spent.

thus wealth is limited by energy.

Natural resources don't run out. The quantity of elements on earth has and will remain the same for a few billion years. Application of energy and information permits inter-conversion of their combined forms as we wish, if we're smart enough. Not a given, I admit.

The creation of global wealth over the last 20-30 years has brought millions out of poverty. This is unprecedented. And it hasn't been wealth taken from others.

our technological ability to extract power from the sun is so limited we are forced to mine the earth to extract solar energy from the past (aka oil).

natural resources do run out. they are frequently converted into forms that are unuseable. in the rare event that a natural resource can be converted back to a usable form (recycling) we must further tax our energy reservoirs to perform such feat.

the wealth that was taken from the earth was not taken from anyone you know now. Perhaps your great great great grandchildren will live in a society where oil is more expensive then gold.

However even when we remove all the factors I describe above there is still wealth 'theft' taking place in our society right now. The issue is that some forms of wealth need to be extracted by many people working together. when you have these creatures called billionaires that own wealth they in no way produced all by themselves you know that wealth among these collaberative groups was distributed unevenly. This is known as wealth inequality and it happens as a direct result of extracting wealth from other humans.

You say natural resources don't run out, how about clean air and clean water? Species diversity?

when said artist accumulates 1 billion dollars worth of wealth did that mean he painted 1 billion dollars worth of paintings? Did the billionaires of the modern world single handedly each create a billion dollars worth of wealth?

take a 747 airliner. a product worth less than a billion dollars in value. such a product must be built by multitudes of people because projects of such immense complexity require man hours that exceed several life times. If billionaires exist it implies that the billionaire built several products of equivalent value and complexity all by himself.

for a single man to hold such extraordinary wealth of absurd proportions means one thing and one thing only. He built his wealth off the backs of others.

Not at all. There are no bounds to the value of a painting, for example. None of that is wrapped up in the value of the paints and canvas, which is easily demonstrated by my using those same paints and canvas to paint a picture, and I'd have to pay to dispose of the result.

Or guaranteed minimum landlord profit.

Because rent will rise by exactly whatever guaranteed minimum income becomes.

Same way college costs rise to whatever loans are available.

That seems unlikely, because of competition. Not merely of identical units, but of all alternatives. We are not terribly supply-constrained on housing, nationally or globally (some markets certainly are, actually or artificially).

"Same way college costs rise to whatever loans are available."

Money that is available only to a single purpose is a substantially different dynamic than money that can be put to other uses.

It includes those cities which do not have housing restrictions. It includes any new units permitted inside existing housing restrictions. It includes increased sharing of housing (this is also impacted by other forms of "housing restrictions" but most people live in situations below maximum occupancy). It includes moving outside of cities entirely (made more attractive in the presence of a basic income).

To the extent that people choose these alternatives, rents will face downward pressure. They may still go up, but "the entirety of BI will simply become rent" seems wrong.

If I could earn a guaranteed $25k for breathing, I sure as hell wouldn't be where I am now, since I could go home and buy a good chunk of land, do some subsistence farming, and happily hack away and read at my leisure.

Secondly, if we go that far why not push for more public housing as well (can do it in a failing city like Michigan or build a new city) and let people create their own economies?

I don't know, I ask that every time I drive down the road in Silicon Valley.