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Flash Boys Has Been Dethroned At The Top Of The Amazon Bestseller List By This Book
From a critique of pure capitalist algorithmic frontrunning (which was at the top Amazon bestseller spot until a few days ago)...
... we go to a critique of pure capitalism.
Which of course, is merely a rehash of a critique of all capitalism as expounded some 150 years ago by this book.
And to think all it took was 147 years of 'capitalism' for the circle to be complete from Das Kapital's labor-vs-capital Marxist manifesto to Thomas Piketty's Capital "exposing capitalism's fatal flaw" topping the Amazon book charts. One wonders who finds the time to read the 696 page tome whose core thesis is well-known for socialists the world over: under capitalism the rich, or hoarders of capital, get steadily richer in relation to everyone else; inequality gets worse and worse and it's all unavoidable, between #Selfies, The Voice semi-finals, and Dance Moms finales.
One thing is certain: the financial asset tax we warned about back in 2011 is coming with a bang.
So, communism's heyday is coming again, right? Maybe. One thing is certain: liberals couldn't be more delighted about mandatory equality. But as we discussed yesterday, there is one thing that no one seems to want to discuss about Piketty's findings... gold...
Well, feature the chart that Professor Piketty publishes showing inequality in America. This appears in the book at figure 9.8; a similar version, shown alongside here, is offered on his Web site. It’s an illuminating chart. It shows the share of national income of the top decile of the population. It started the century at a bit above 40% and edged above 45% in the Roaring Twenties. It plunged during the Great Depression and edged down in World War II, and then steadied out, until we get to the 1970s. Something happened then that caused income inequality to start soaring. The top decile's share of income went from something like 33% in 1971 to above 47% by 2010.
Hmmm. What could account for that? Could it be the last broadcast of the “Lawrence Welk Show?” Or the blast off of the Apollo 14 mission to the Moon? Or could it have something to do with the mysterious D.B. Cooper, who bailed out of the plane he hijacked, never to be seen again? A timeline of 1971 offers so many possibilities. But, say, what about the possibility that it was in the middle of 1971, in August, that America closed the gold window at which it was supposed to redeem in specie dollars presented by foreign central banks. That was the default that ended the era of the Bretton Woods monetary system.
That’s the default that opened the age of fiat money. Or the era that President Nixon supposedly summed up in with Milton Friedman’s immortal words, “We’re all Keynesians now.” This is an age that has seen a sharp change in unemployment patterns. Before this date, unemployment was, by today’s standards, low. This was a pattern that held in Europe (these columns wrote about it in “George Soros’ Two Cents”) and in America (“Yellen’s Missing Jobs”). From 1947 to 1971, unemployment in America ran at the average rate of 4.7%; since 1971 the average unemployment rate has averaged 6.4%. Could this have been a factor in the soaring income inequality that also emerged in the age of fiat money?
This is the question the liberals don’t want to discuss, even acknowledge.
h/t @Not_Jim_Cramer
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Why is it that all critique of capitalism as an economic/political system is seen as communist? There’re many other ideologies/paradigms of thoughts that formulate realistic alternatives to a capitalist system. During the Spanish Civil War the communist (supported by the state capitalist mr. Stalin) were just as hated by the anarchists, syndicalists and international brigade as the fascist were.
Furthermore the ‘so called’ liberals – I guess it’s the democrats or the like that’s referred to – in USA, would in a Danish/North European context be seen as extreme right wing capitalist (and not anything comparable to a communist). It’s true that they use the state to serve the interest of their (acknowledged or not) masters (the <1%).
Capitalism is an extreme efficient system to create growth (as cancer is it), but it’s also an extreme system to disenfranchise the majority of the people – both in relation to political, social and economic power. But most importantly capitalism is a system that commodifies everything.
The survival of the human race depends on finding alternatives to capitalism (and not just reimplementing capitalism – I know what we have now is a perversion of capitalism/a form of neofeudal fascism).
Well, am I the only left-wing anarchist on this site?
In America, "anarchy" means "disorder," unlike what it means everywhere else, which is "cooperation between people without a top-down, central authority running everything."
Americans simply cannot fathom order without control, which is what makes them ripe for Orwellian totalitarianism. It is also why hardly any Americans are willing to call themselves "anarchists." "Anarchist" is an epithet in America.
As in all things, the real reason that these phenomena have occurred is "overthunk".
One crucial element left out of all the above is the simple fact of 'too many people for too few (and still declining at an even faster pace) well paid jobs, careers, businesses and professionals' opportunities.
Aside from the increases in worldwide populations, we have the unique one in this country of women demanding the right to kill their infants, so that they can go to work outside the home out of boredom, as one element contributing to it. No one knows in those 50,000,000 abortions and counting (nature did not intend for mankind to interfere with its propagation of the species, to 'rhyme' itself) who among them might have been one or more of the Leonardos, Einsteins, or god forbid, Blankfeins.
The paradigm shift is occurring without any help from willing accomplices. There will eventually have to be a growing One World Government to feed, clothe, and otherwise occupy them ( without a workplace to go to for their entire lives) the growth from 6,000,000,000 to 7,000,000,000 then 8,000,000,000 then 9,000,000,000 ad infinitum till max is reached and reverses to the mean.
With that will come not just minimum wages, but guaranteed at-birth-lifetime-incomes to provide the necessities of life, it not the outright extinction of fiat currency altogether as an unnecessary obstacle to obtaining subsistence levels of existence.
Go Long Hobby Lobby.
Wish I could live two hundred years with intact faculties to see the landscape in 2100.
I have an honest question about the premise of this post: If the growth of income inequality since the '70s is really all down to the corruption of capitalism by the watering down of money, then what was it prior to the great depression -- and prior to the federal reserve -- that was keeping wealth disparity so high? In the 1890s, the dollar was tied to gold, there was basically no wealth redistribution, companies could grow as large as they wanted, there was no minimum wage, no socialized medicine, no welfare, and no inflation.
Also, Roosevelt's seizure of gold in 1933 was arguably the most anti-capitalistic crime ever committed in America. And that is exactly where income inequality is cut by half in this chart.
It seems to me that a lot of people here would like to have it both ways: A purely capitalistic society, with more income equality. I think this chart proves that's an oxymoron. If you want real freedom, then a lot of people are going to be poor and a few people are going to get rich. I'm personally fine with that, but people seem a little confused about something: If you are not rich in America -- whether it's the freewheeling gold-based America of the 1890s or the current socialist iteration -- it's your fault for not playing the game well enough.
The ability to print fiat ad libitum and hand it over to the fascist ownership class is not the only way to increase inequality. But it’s obviously a very effective way. The only reason equality rose – for a while after The Great Recession and WWII – was that the ruling elite were scared to death by an awakening working class. The working class were organizing – in labor unions, political parties and otherwise. The Third World was revolting and throwing out their former colonial masters – many places resulting in brief periods of democracies (before USA/CIA installed their puppet dictators – Google yourself for the list). All this made the elites fear revolution/radical change in the fabric of the western societies. In order to counter the tendencies the solution was to give some benefits/rights to the working class – benefits that now are or has been removed.
The ‘freedom’ you’re referring to is – to me – hollow. There’s a big difference between ‘de jure’ freedom (the freedom you have en USA – the so called American Dream (“You have to be asleep to believe in it” – George Carlin)) and ‘de facto’ freedom. The former refers to some written rights and the second to ‘real possibilities’. In other words: my definition of freedom is real possibilities to live a life of your own choosing. With that definition there’s, paradoxically, much more freedom in social democratic societies like Sweden, Denmark and Norway, than in more capitalist societies like USA.
Well-put. This true definition of "freedom" is exactly what the right-wingers in America refuse to understand; and their refusal to understand it is exactly why they will continue to lose elections. They are out of touch with what people actually want. Freedom is self-actualization, not just a lottery ticket that may or may not be worth anything.
Ah but come on. The American Dream is the only thing that keeps the economy ticking over. If people didn't believe they could ever get rich, there'd be a fucking revolution. And after that revolution, people would keep dreaming.
Not everyone can get rich. If they did, it wouldn't be rich. There'd be no incentive for other people to try harder. In the end, the malcontents are always going to be malcontents, and the rich are always going to be rich. Stupid and lazy rich people lose their fortunes. Hard working poor people gain them. That's the American Dream and it does exist, at least, in a theoretical way. It always will.
Thanks. This is a very intelligent response. I agree with you that negative freedom isn't the only freedom (I phrase things in American libertarian shorthand sometimes). I've spent enough time living in Europe to understand the appeal of social democracy.
What I find interesting is the statement you made that most of the world probably would have progressed toward democracy by now had it not been for American imperial interference. It seems undeniably true. Yet all that interference, from United Fruit to Anglo-Iranian Oil, is the natural result of a capitalist system. The nature of capitalism is for corporations to ultimately control the levers of state and foreign policy, as that's the only logical outcome.
It's not a contradiction to believe in the American Dream and to also believe that outcome is inevitable. It's just pure Darwinism. I'm not saying I think it's good for society, or that I like the outcome. Simply that it appears unavoidable.
Thanks for the thoughtful response.
I say all income (not just profits) from the sale of this book should be "donated" to the gov't.
To profit would make him just another greedy capitlaist. F-ing hypocrit.
Troll. Nobody begrudges a man the actual fruit of his work. That however is not "capitalism" as practiced anywhere in the world, at any time. The 5% that are holding 90% of the wealth in America are NOT doing 90% of the work. For the most part, they're not doing any work at all, at least not any work that has any social value.
Nobody turned their gold in in 1933. Please. Laws like that are not enforceable. Certainly that law did not affect the wealth of capitalist robber barons like Carnegie or Rockefeller.
Also, inequality is not caused by monetary policy. It is caused by too much protection for capital, by overvaluing capital and property as compared to people. The social reformers up through the 1960s managed to gradually ease the massive inequality in America, only to see that trend reversed in the last 40 years, as one by one the right-wing in America has stripped away and eroded the protections that were established in the wake of the Great Depression, mostly by FDR.
"It's your fault for not playing the game well enough" is exactly the lottery mentality among the right-wing 99% that prevents progress. There is no such thing as playing a rigged, corrupt game "well enough," and anyone that has lived more than five minutes in the real world knows this.
Yes, there is a chance you could become rich. You could also go to Vegas and have better chances. Your overestimation of your chances, and your subsequent defense of a game that is stacked against 99.999% of people, is exactly the problem. You're brainwashed. You're not doing the math right. Your expectations for your own success are completely irrational and unrealistic, even though they feel so right.
Just to clarify my position, I think if you were born in Soviet Russia and didn't become a high-ranking communist official, or if you got purged and executed, you also weren't playing the game well enough.
Nor am I advocating conformity; nor belief in "gambling" or the impossible lottery. The American economy is no more a lottery than avoiding purges is in North Korea. It's a matter of being quick on your feet.
Gripe all you want, but that's been the human condition since we came down from the trees and one monkey beat the shit out of the other monkeys until they died or did what he said. There is no political system that actually alleviates that; it's just one or the other monkey in control. If you're not with the monkeys in charge, you're going to be sore about it. The rest is bullshit.