I'm fairly happy that the author as a former investment banker and a current journalist for the Investors Chronicle understands capitalism pretty well.
I've read Chris Dillow's blog for a long time. If you scratch away the Marxist sheen, which some people will find toxic at first glance, he has a few basic themes which are pretty hard to argue with:
Modern capitalism has failed to keep everyone employed. It may have helped countries out of poverty but there remains a persistent and growing underclass.
Most subsidies to the poor end up directly in the pockets of the rich. i.e. rent accounts for 50% of the income of people on welfare.
The poor are statistically less happy i.e. Frank Gallagher maybe pissed up all the time and maybe happy, but most people are not.
The stability of corporate entities is overestimated. Most companies have the life expectation of a forty year old man.
Managerialism is a failure, and an unhealthy obsession of the modern left.
Whether you agree with the Marxism bits or not he is generally an interesting read.
Thank you for an introduction to the author. I'll look for some more of his work.
I try to be very careful about bashing things on HN -- it's too easy, and everybody does it. If I implied the author was somehow generally incompetent, I apologize.
He's just smoking crack here. Whatever his merits as a columnist and journalist, in my opinion he's out of his depth on this topic. I also appreciate your providing his credentials. Since my comment was on this essay and not on him, it doesn't make sense to respond to that information in one way or another. The last thing I want is to start some kind of discussion on Dillow the person. My remarks were entirely about the concepts and structure of his argument in this one essay (along with an observation about the use of the word "capitalism" in general) I found the material off-handedly shallow, ill-conceived, and not very well thought-out.
> Modern capitalism has failed to keep everyone employed.
Im not sure how you would know that. Depends on your defintion of "modern capitalism". If it is how current western states work then sure not everybody is employed. I would however argue that in a system without minimum wage, wellfair, unemployment insurance, retraining programmes ... unvoluntary unemployment would be very, very low.
Now note, Im not making a value jugment here.
> Most subsidies to the poor end up directly in the pockets of the rich. i.e. rent accounts for 50% of the income of people on welfare.
Well, of course it does. Do you imagen a underground economy of poor people or something. Most money is spend on things owned by large cooperations, walmarkt, mcdonalds and simular.
> The poor are statistically less happy i.e. Frank Gallagher maybe pissed up all the time and maybe happy, but most people are not.
It depends on who you ask. There is quite a bit of research but it all has the fundmental problem of measuring happyness. Asking people if they are happy does not really make sence when you think about culture or signaling. So yes there is research that suggests there is a general positive corrulation with wealth and happyness but there is also research that suggest that after some level of wealth you stop getting happier. Some research suggest its only importend how rich people you interactive with are.
> The stability of corporate entities is overestimated. Most companies have the life expectation of a forty year old man.
Yes.
> Managerialism is a failure, and an unhealthy obsession of the modern left.
Agree. There are much more fundamental problems in the economy then wages of managers for example.
I disagree with your first point if I understand it correctly. Even relatively right wing or libertarian economists like Tyler Cowen consider that the low hanging fruit for most businesses is now gone. There is a dearth of investment opportunities and the demand for labor especially at the low end is not there in the west.
Though I agree that there are people who can work but won't work, I think this is overestimated. This is a point of principle hardly worth arguing.
I'll take you up on your response to the expenditure of the poor ends up in the pockets of the rich.
The point is that the poor get "blamed" for needing this money. The market will allow the price of a piece of land with some bricks on it to increase due to demand. But clearly the market can't magically create land.
> Even relatively right wing or libertarian economists like Tyler Cowen consider that the low hanging fruit for most businesses is now gone.
Well Cowen is quite on his own with this possition and even he is arguing that it will pick up again. Read the last chapter of the great stagnation.
Also just having a economy that doesn't grow doens't really have anything to do with jobs. You can have full employment in a economy that is shrinking. The question is about laber market equillibrium, if wages ajust downwards eventually you will have full employment.
> The point is that the poor get "blamed" for needing this money. The market will allow the price of a piece of land with some bricks on it to increase due to demand. But clearly the market can't magically create land.
Well the market can creat land, but the market can creat any natural resource but that does not mean every resource becomes more expensive all the time.
If rents get bigger somebody will have the idea to nock down a small building and build a bigger one. Also the notion that there is a lack of land is strang, specially in america, there if tons of land that is very cheap its just not where most people would want to live.
The market can not creat land but it can creat living space.
Though I agree that there are people who can work but won't work, I think this is overestimated.
I think that people who feel that way generally overlook the role of housewives in society. I don't know if it's still current, but I recall a few years ago seeing estimates that ~10% of all women in America were unemployed, by choice, for reasons of home-making, or whatever the most politically correct alternative of 'housewifery' is (not trying to be inflammatory, I genuinely don't know).
As America has a slight gender bias towards females, that means that ~5% of the population is willfully unemployed. Unemployment is, what, 7% right now?
Also, yes, I'm well aware that employed does not negate underemployed, which is where I really feel that America is suffering right now, but we're just talking about employment figures.
I think you are misunderstanding. Nobody cares about voluntary unemployment, if people dont want to work and just live of some other source of income family, saving or something like that. There is no economic argument about that.
The problem is people that can work, but dont because the gain of working is not big enouth to overcome the lost of safty net payments.
I've read Chris Dillow's blog for a long time. If you scratch away the Marxist sheen, which some people will find toxic at first glance, he has a few basic themes which are pretty hard to argue with:
Modern capitalism has failed to keep everyone employed. It may have helped countries out of poverty but there remains a persistent and growing underclass.
Most subsidies to the poor end up directly in the pockets of the rich. i.e. rent accounts for 50% of the income of people on welfare.
The poor are statistically less happy i.e. Frank Gallagher maybe pissed up all the time and maybe happy, but most people are not.
The stability of corporate entities is overestimated. Most companies have the life expectation of a forty year old man.
Managerialism is a failure, and an unhealthy obsession of the modern left.
Whether you agree with the Marxism bits or not he is generally an interesting read.