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OrphanWilde comments on Why capitalism? - Less Wrong Discussion

6 Post author: Algon 03 May 2015 06:16PM

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Comment author: OrphanWilde 07 May 2015 12:29:32PM 1 point [-]

Capitalism is less truly an economic system and more truly an economic modeling language.

Natural fisheries versus farming provides an excellent illustration of this; if you followed the sames rules for "unregulated" natural fisheries (that is, anybody may catch any number of fish) in farming, whoever picked a vegetable would own it, and farming couldn't exist as it does today. But replace the fishery rules with the farming rules, and whether or not it is "capitalism" is determined wholly by the framing; if you charge for a limited number of "licenses" to people to take a certain number of fish, and you're "regulating", an "anti-capitalist" act, whereas if you sell "shares" in the natural fishery, again charging people to take a certain number of fish, and you're engaging in capitalism.

Likewise, "tax" people for property they "own", and you're being capitalistic. "Lease" people property the government "owns", and you're being anti-capitalistic.

Capitalism is just a way of framing the rules in terms of private ownership.

To demonstrate:

I propose a new system of non-transferable shares of our national resources owned by all members of the public through a national resource trust corporation; conversion of these resources, because of the opportunity cost involved, will involve paying a portion of the value of said resources into a national resource trust corporation. The national resource trust corporation will also oversee and enforce intellectual property rights for a percentage of the value of said intellectual property, to pay for enforcement and to compensate for the opportunity cost imposed. Dividends on the proceeds will be paid out to all shareholders.

What did I just propose? A "capitalistic" welfare system.

Comment author: VoiceOfRa 08 May 2015 02:15:24AM 1 point [-]

if you charge for a limited number of "licenses" to people to take a certain number of fish, and you're "regulating", an "anti-capitalist" act, whereas if you sell "shares" in the natural fishery, again charging people to take a certain number of fish, and you're engaging in capitalism.

There is an important difference between the two systems. In the capitalistic system the way the fishery is managed is determined by the shareholders, whereas in the anti-capitalistic system it's determined by the government, i.e., ultimately everyone who votes for it whether they have any direct interest and/or connection to the fishery or not.

Comment author: OrphanWilde 08 May 2015 01:10:04PM -1 points [-]

You're assuming they're voting shares.

Comment author: VoiceOfRa 09 May 2015 02:13:12AM *  2 points [-]

Well, yes that is the obvious inference from the capitalistic description you gave.

If they're non-voting then who has voting control over the fishery management? If the answer is simply "the government", I don't see what's to "capitalistic" about your capitalistic system.

Comment author: RichardKennaway 08 May 2015 01:36:37PM *  0 points [-]

You're assuming they're voting shares.

I believe that VoiceOfRa is referring to the vote that (presumably) put the government in power that nationalised the fisheries, and is selling what it calls "shares" in them. If these are non-voting shares, as you imply, then the management and ownership of the fisheries remains in the government's hands. What you have described is a nationalised industry. The "shareholders" do not have a share in ownership, only a licence to fish, whatever is written on the piece of paper they received.

What did I just propose? A "capitalistic" welfare system.

I'm not clear about the details (what is meant by "conversion of these resources"? -- the phrase sounds like specialised jargon) but this looks like nationalisation of the means of production, a standard socialist policy. This is not to say that it cannot work (although the record of nationalised industries mostly does say that) but it does not resemble anything normally called "capitalism".

Comment author: OrphanWilde 08 May 2015 02:17:18PM 0 points [-]

I believe that VoiceOfRa is referring to the vote that (presumably) put the government in power that nationalised the fisheries, and is selling what it calls "shares" in them. If these are non-voting shares, as you imply, then the management and ownership of the fisheries remains in the government's hands. What you have described is a nationalised industry. The "shareholders" do not have a share in ownership, only a licence to fish, whatever is written on the piece of paper they received.

  • The share is not in the fishing -industry-, but in the stock of fish.

I'm not clear about the details (what is meant by "conversion of these resources"? -- the phrase sounds like specialised jargon) but this looks like nationalisation of the means of production, a standard socialist policy. This is not to say that it cannot work (although the record of nationalised industries mostly does say that) but it does not resemble anything normally called "capitalism".

  • Conversion is a specialized term referring to the process of changing goods from one form to another, usually from an unprocessed natural state to a processed or final consumption-ready state; in this case, it could mean taking coal from the ground and burning it to produce electricity.

And no, I wouldn't advocate nationalizing the means of production. Actually, what I proposed was, in its entirety, taxing people on land (not buildings or improvements, but land only) and intellectual property.

Comment author: Jiro 07 May 2015 02:48:53PM *  1 point [-]

Likewise, "tax" people for property they "own", and you're being capitalistic. "Lease" people property the government "owns", and you're being anti-capitalistic.

One could equally well say "letting people own property is capitalistic. Taxing them for property is less capitalistic precisely because it is equivalent to the government really owning the property and leasing it".

In other words, you haven't shown that the same situation is or isn't capitalistic depending on the framing. Rather, you've shown that both framings are equally capitalistic, but they just have different starting points. In one situation, you start out with capitalism (owning property) and make it less capitalistic (taxing the property). In another, you start out with a socialist situation (government owns the property) and make it more capitalistic (people can lease it and get some rights over it).. Either way you end up in the same place.

Comment author: Lumifer 07 May 2015 02:59:25PM *  1 point [-]

Either way you end up in the same place.

In practice, you don't end up in the same place.

"I own this property and pay $1,000 in taxes to the government" is a very different situation from "The government leases me this property for $1,000".

"Property" is a large bundle of rights that does not boil down to cash flows.

Comment author: Jiro 07 May 2015 04:06:56PM *  0 points [-]

You end up in the same place in this hypothetical. OrphanWilde postulated a situation where the same situation could be described as taxing people on property they own or the government leasing property. If these are in fact two different framings of the same situation, it follows that in this hypothetical, the government has an unusual kind of lease that does grant the kind of rights you are referring to, even though a normal lease would not do so.

Of course I may be steelmanning too much and he may have just not noticed that his hypothetical requires a very atypical kind of lease.

Comment author: OrphanWilde 07 May 2015 06:20:12PM 0 points [-]

Mexican land trusts are a good example of a "lease" arrangement that behaves identically to ownership as we typically regard it.

Comment author: Lumifer 07 May 2015 04:09:32PM 0 points [-]

the same situation could be described as taxing people on property they own or the government leasing property

I think that would require considerable violence to the words "own" and "lease".

Comment author: OrphanWilde 07 May 2015 03:50:33PM -2 points [-]

Why is taxing property less capitalistic?

The only reason you can or cannot own land in the first place is that government has asserted that land is something that you can own, and will protect your claim of ownership by force. Government enables that ownership in the first place - just as it -doesn't- enable ownership of the ocean, and does enable ownership of physical processes but not mathematical processes. Setting terms on the manner in which ownership is handled isn't more or less capitalistic; the difference, rather, is between good rules, and bad rules. Ownership of land has proven, on the whole, a very productive arrangement; it's a good rule. That's not the same as "capitalistic."

Comment author: Salemicus 07 May 2015 04:53:42PM 3 points [-]

The only reason you can or cannot own land in the first place is that government has asserted that land is something that you can own, and will protect your claim of ownership by force. Government enables that ownership in the first place - just as it -doesn't- enable ownership of the ocean, and does enable ownership of physical processes but not mathematical processes. Setting terms on the manner in which ownership is handled isn't more or less capitalistic; the difference, rather, is between good rules, and bad rules. Ownership of land has proven, on the whole, a very productive arrangement; it's a good rule. That's not the same as "capitalistic."

This kind of claim is very popular on the left, and it always puzzles me, because it's so obviously false on so many levels.

Firstly, land ownership long predates any government. In fact, it even seems to predate humans! It would be more historically true to say that land ownership created government than that government created land ownership.

Secondly, just because the government recognises your property right in something, doesn't mean you own it in any meaningful way. You seem to picture an omnipotent government that could even enable ownership of the ocean, but if it tried it would find itself much more like Canute. Unless you can enforce ownership, it's meaningless. People simply don't pay royalties every time they sing Happy Birthday, regardless of its copyright status. And so on.

Thirdly, just because the government doesn't recognise your property right in something, it doesn't mean you don't own it. Does Tony Montana own the cocaine he imports? He buys it, he sells it, he stores it, he makes use of it how he wants, other people accept that it is "his," no-one else can get hold of it except by his agreement. That's ownership. The fact that the government doesn't recognise his legal title is irrelevant, he has other methods of enforcing his claim.

In summary, government recognition of title is neither necessary nor sufficient for ownership, nor is it the historic origin. I myself am the title-holder of a plot of land that I do not own in any meaningful sense, because the writs of the government that recognises my title do not run in that area. Instead, there are other people who are currently enjoying all the property rights of that land, using it, earning money from it, excluding others from it, maybe even transferring their ownership. Perhaps I should go there and tell them that because the government doesn't recognise their claim, they can't do any of that stuff. Something tells me they might not find the argument persuasive.

Comment author: OrphanWilde 07 May 2015 05:58:41PM *  -1 points [-]

This kind of claim is very popular on the left, and it always puzzles me, because it's so obviously false on so many levels.

  • I'm a minarchist.

Firstly, land ownership long predates any government. In fact, it even seems to predate humans! It would be more historically true to say that land ownership created government than that government created land ownership.

  • You and I have different working definitions of the word "government" if you think "government" is something which was invented, rather than recognized.

Secondly, just because the government recognises your property right in something, doesn't mean you own it in any meaningful way. You seem to picture an omnipotent government that could even enable ownership of the ocean, but if it tried it would find itself much more like Canute. Unless you can enforce ownership, it's meaningless. People simply don't pay royalties every time they sing Happy Birthday, regardless of its copyright status. And so on.

  • You're arguing with what I "seem" to be rather than what I am.

Thirdly, just because the government doesn't recognise your property right in something, it doesn't mean you don't own it. Does Tony Montana own the cocaine he imports? He buys it, he sells it, he stores it, he makes use of it how he wants, other people accept that it is "his," no-one else can get hold of it except by his agreement. That's ownership. The fact that the government doesn't recognise his legal title is irrelevant, he has other methods of enforcing his claim.

  • The agents enforcing his claim are -also- governments. If he enforces his own claim, he is, de facto, a government.

[Edited: Quoting mistake]

In summary, government recognition of title is neither necessary nor sufficient for ownership, nor is it the historic origin. I myself am the title-holder of a plot of land that I do not own in any meaningful sense, because the writs of the government that recognises my title do not run in that area. Instead, there are other people who are currently enjoying all the property rights of that land, using it, earning money from it, excluding others from it, maybe even transferring their ownership. Perhaps I should go there and tell them that because the government doesn't recognise their claim, they can't do any of that stuff. Something tells me they might not find the argument persuasive.

  • I don't know if you noticed your own subtle shift from "the" government to "a" government when you wrote this sentence. If you didn't, pay attention. It matters.

At any rate, I think you are trying to fit what I am saying to a political agenda that doesn't match my own. I don't -have- a political agenda here. I'm asserting, as somebody who would be described as an extremist capitalist, that "capitalism" isn't an economic system. What people usually mean, when they say "capitalism", is either exactly the set of economic rules they think would work best, or exactly the set of economic rules they disagree with most.

Comment author: Salemicus 07 May 2015 06:05:03PM 1 point [-]

If you assert that any entity that enforces property rights is a government, then your claim is (1) circular and (2) a distortion of the term "government" beyond all recognition. Tony Montana certainly doesn't look like a government.

Comment author: OrphanWilde 07 May 2015 06:12:58PM 1 point [-]

Any entity which acts as the final enforcer for any set of rules at -all- is a government; your city can send police to arrest you, your county can do likewise, so they both qualify; your HOA has to sue you for breach of contract in a court run by a government who will enforce the decisions of that court by sending a policeman if necessary. Tony Montana isn't -a- government, but rather an agent of one; the Mafia.

Comment author: Salemicus 07 May 2015 07:06:32PM 1 point [-]

But Tony Montana isn't an agent of anyone, he works for himself. There is no final enforcer in that situation, it's an anarchy in that sense (which is why the drug trade is violent). But property still exists.

In fact, governments are much closer to anarchies than your "unlimited escalation" would allow. The reason I can't enforce property rights in my land isn't because of some rival government, but because of anarchy that the government can't suppress.

Comment author: OrphanWilde 07 May 2015 07:26:11PM 1 point [-]

But Tony Montana isn't an agent of anyone, he works for himself. There is no final enforcer in that situation, it's an anarchy in that sense (which is why the drug trade is violent). But property still exists.

  • Since I haven't seen the movie in question, I'm at a disadvantage to say properly whether Tony Montana qualifies as a government; he could readily be equivalent to a monarch, however, inwhichcase it could reasonably be asserted that he qualifies as a government in himself.

In fact, governments are much closer to anarchies than your "unlimited escalation" would allow. The reason I can't enforce property rights in my land isn't because of some rival government, but because of anarchy that the government can't suppress.

  • In what meaningful sense, then, is the government the government of that land? They're unable to govern. If it were a rival government, we'd call it civil war, and we'd say the rival government is the effective government of that land. It's possible - I'm unaware of the exact circumstances - that nobody is governing that land.
Comment author: Salemicus 07 May 2015 07:32:46PM 1 point [-]

It's possible - I'm unaware of the exact circumstances - that nobody is governing that land.

Finally, you concede the possibility! Yet property still exists there. So how's property merely a creation of government again?

Comment author: Lumifer 07 May 2015 06:18:23PM 0 points [-]

Any entity which acts as the final enforcer for any set of rules at -all- is a government;

So in a traditional (patriarchal) household, each husband is a government, right? And all parents, too?

Comment author: OrphanWilde 07 May 2015 06:28:21PM 1 point [-]

No, because few husbands or parents are willing or able to act as final enforcers.

Final enforcement requires unlimited escalation. No matter how you escalate the situation, a final enforcer will escalate back.

Comment author: Lumifer 07 May 2015 06:52:35PM *  1 point [-]

Is this equivalent to saying that a government is any entity which has the will and the ability to kill you if it deems necessary?

And I think that parents of small children are final enforcers. No one sues their five-year-old for throwing a tantrum.

Comment author: Jiro 07 May 2015 03:59:30PM *  1 point [-]

By that reasoning, making people slaves isn't less capitalistic, either. The only reason you can or can't control your own life is that the government has asserted that you do or don't, and will protect either you or the slaveowner's claim by force.

Also, by that reasoning, you cannot ever assert that the government is violating someone's rights, since rights do not exist independently of whether the government sets the terms.

Comment author: OrphanWilde 07 May 2015 06:05:17PM -1 points [-]

By that reasoning, making people slaves isn't less capitalistic, either. The only reason you can or can't control your own life is that the government has asserted that you do or don't, and will protect either you or the slaveowner's claim by force.

  • No, your reasoning requires treating capitalism as a system rather than a model, which my opening comment explicitly rejects. Something isn't "more" or "less" capitalistic.

Also, by that reasoning, you cannot ever assert that the government is violating someone's rights, since rights do not exist independently of whether the government sets the terms.

  • And here you're extending the argument into an entirely different domain in which I have thus far made no claims whatsoever. In order for my claim to extend in this manner, two things would have to be true: First, there would have to be a good natural rights argument for land ownership. (There isn't, although there -are- very good natural rights arguments for ownership of other things, including farms and buildings sitting on that land - an important distinction.) Second, I'd have to have rejected natural rights, which I haven't done.
Comment author: Jiro 07 May 2015 06:43:24PM 0 points [-]

No, your reasoning requires treating capitalism as a system rather than a model, which my opening comment explicitly rejects. Something isn't "more" or "less" capitalistic.

If you can't compare how capitalistic two situations are, you can't claim that they are equally capitalistic either, which you are implicitly doing.

And here you're extending the argument into an entirely different domain in which I have thus far made no claims whatsoever.

Being able to justify your argument also implies being able to justify the things that it implies. This is true whether you claim those things or not.

In this case, you've said that you can characterize ownership of land as being enabled by the government on the grounds that you need government force to keep owning it. This argument extends both to other kinds of ownership (including farms and buildings) and other kinds of rights. It is equally true that you rely on government force to keep owning a building, and it is equally true that you rely on government force in order to prevent someone from killing you.

Comment author: OrphanWilde 07 May 2015 07:19:02PM -1 points [-]

If you can't compare how capitalistic two situations are, you can't claim that they are equally capitalistic either, which you are implicitly doing.

  • No, I'm saying "domain error".

Being able to justify your argument also implies being able to justify the things that it implies. This is true whether you claim those things or not.

  • Again: "Domain error". More explicitly, this time.

In this case, you've said that you can characterize ownership of land as being enabled by the government on the grounds that you need government force to keep owning it. This argument extends both to other kinds of ownership (including farms and buildings) and other kinds of rights. It is equally true that you rely on government force to keep owning a building, and it is equally true that you rely on government force in order to prevent someone from killing you.

  • Ownership of land is an exclusive right of conversion, whereas ownership of farms and buildings is an exclusive right of the -product- of conversion. Your argument about preventing people from killing you is yet another attempt to shift domains; domain error, again.
Comment author: Jiro 07 May 2015 11:08:00PM *  0 points [-]

Ownership of land is an exclusive right of conversion, whereas ownership of farms and buildings is an exclusive right of the -product- of conversion. Your argument about preventing people from killing you is yet another attempt to shift domains; domain error, again.

You're shifting arguments. Your argument wasn't "conversion", it was that the government will protect your claim by force. Protecting your claim by force is something that applies to land, buildings, and the right not to be murdered. Of course, if you bring up a new argument, anything I say about your old argument may not necessarily apply.

Comment author: OrphanWilde 08 May 2015 01:24:27PM 0 points [-]

Actually, you shifted arguments, and I permitted it in that case, but nice attempt to try to berate me for what you've been doing all along. But at any rate, at this point I must conclude discussions with you can't be productive, because as soon as you realized I wouldn't permit you to change the subject and pretend we were having the same discussion, you instead resorted to petty debate tactics. Good day.

Comment author: Jiro 08 May 2015 02:58:05PM *  0 points [-]

The only reason you can or cannot own land in the first place is that government has asserted that land is something that you can own, and will protect your claim of ownership by force.

I didn't change the subject. It's right up there.

Comment author: Lumifer 07 May 2015 02:45:35PM 1 point [-]

Capitalism is just a way of framing the rules in terms of private ownership.

Yes, but framing matters. Rules formulated in terms of private ownership will be different and have different consequences than rules formulated in terms of government licenses.