After the fall
June 28, 2018 8:09 PM Subscribe
I notice, talking to younger people, people who hit that Napoleonic moment of turning twenty since the crisis, that the idea of capitalism being thought of as morally superior elicits something between an eye roll and a hollow laugh. Their view of capitalism has been formed by austerity, increasing inequality, the impunity and imperviousness of finance and big technology companies, and the widespread spectacle of increasing corporate profits and a rocketing stock market combined with declining real pay and a huge growth in the new phenomenon of in-work poverty. That last is very important. For decades, the basic promise was that if you didn’t work the state would support you, but you would be poor. If you worked, you wouldn’t be. That’s no longer true: most people on benefits are in work too, it’s just that the work doesn’t pay enough to live on. That’s a fundamental breach of what used to be the social contract. So is the fact that the living standards of young people are likely not to be as high as they are for their parents. That idea stings just as much for parents as it does for their children.
John Lanchester on the ten years following the credit crunch.
After the crash I saw a banker on T.V. say that even if he had known the market was going to crash he would have still had to keep investing in derivatives. It wasn't a choice, because that was the market. Pure capitalism without rules is a race to the bottom. Without protections, business will immediately engage in any underhanded business dealings allowed by law no matter how unscrupulous or dangerous. They have no choice, because if they don't, the other guy will. If it becomes legal to water down milk, that will happen tomorrow, because no business can take the risk that their competition won't do it. Businesses in a capitalist system have much less freedom as to how they operate than people think.
One example of this is Walmart purposefully managing their employees pay and schedules so they can take maximum advantage of welfare and food stamp benefits. The lack of a living wage immediately becomes a rule for these companies to exploit to their maximum advantage.
posted by xammerboy at 8:42 PM on June 28, 2018 [52 favorites]
One example of this is Walmart purposefully managing their employees pay and schedules so they can take maximum advantage of welfare and food stamp benefits. The lack of a living wage immediately becomes a rule for these companies to exploit to their maximum advantage.
posted by xammerboy at 8:42 PM on June 28, 2018 [52 favorites]
He uses macroeconomics as a punching bag, a sort of "haw haw, those economists thought they had it all figured out, huh?" without acknowledging that politicians routinely ignore economists. The similarities between economic theory and political economic plans are about as close as scientific study findings and the headlines that make it to the Today Show.
Any economist would have been able to tell you that repealing the laws we've seen evaporate would be bad. Any economist would be able to tell you why strong anti-trust action is needed. Any economist can tell you why taxes need to be higher, or why interest rates should have rebounded.
There were no adults in the room. The economic advisors were businessmen working to sculpt the economy for their businessmen colleagues, rather than trying to build a robust national economy.
posted by explosion at 9:03 PM on June 28, 2018 [20 favorites]
Any economist would have been able to tell you that repealing the laws we've seen evaporate would be bad. Any economist would be able to tell you why strong anti-trust action is needed. Any economist can tell you why taxes need to be higher, or why interest rates should have rebounded.
There were no adults in the room. The economic advisors were businessmen working to sculpt the economy for their businessmen colleagues, rather than trying to build a robust national economy.
posted by explosion at 9:03 PM on June 28, 2018 [20 favorites]
Is this the same John Lanchester who wrote the novel Capital?
I'm increasingly seeing (especially among under 30's) a kind deep disdain for capitalism coupled with various approaches to solve issues in-spite of capital / politics / the existing order. It's early days but things seem to accelerate more now.
Requiring full-cost accounting would be a goof start - system needs more that tweaking; capitalism is destroying out planet right now. Tweaks just lead building a bigger the raft of derivatives, offsets and externalities that to my tiny intellect look like fraud at best.
posted by unearthed at 9:37 PM on June 28, 2018 [6 favorites]
I'm increasingly seeing (especially among under 30's) a kind deep disdain for capitalism coupled with various approaches to solve issues in-spite of capital / politics / the existing order. It's early days but things seem to accelerate more now.
Requiring full-cost accounting would be a goof start - system needs more that tweaking; capitalism is destroying out planet right now. Tweaks just lead building a bigger the raft of derivatives, offsets and externalities that to my tiny intellect look like fraud at best.
posted by unearthed at 9:37 PM on June 28, 2018 [6 favorites]
Interesting article, but if you end that much introspection into the global financial system with "all we need to do is tweak capitalism a little bit and do it better", of course I don't trust that you're capable.
It's a bit odd that this article, that explicitly says that a sociologist would do a better job at explaining what needs doing next than an economist, ends on economic policy suggestions. I do find it hard to argue against 'ban tax havens' as a start, though. Making sure the super-wealthy cannot flee the reckoning coming to them is an important early goal, and this is the biggest hole we have in the system.
posted by Merus at 10:00 PM on June 28, 2018 [3 favorites]
It's a bit odd that this article, that explicitly says that a sociologist would do a better job at explaining what needs doing next than an economist, ends on economic policy suggestions. I do find it hard to argue against 'ban tax havens' as a start, though. Making sure the super-wealthy cannot flee the reckoning coming to them is an important early goal, and this is the biggest hole we have in the system.
posted by Merus at 10:00 PM on June 28, 2018 [3 favorites]
He uses macroeconomics as a punching bag, a sort of "haw haw, those economists thought they had it all figured out, huh?" without acknowledging that politicians routinely ignore economists.
Lanchester writes: "For the people inside the system that caused a decade of misery, no change. For everyone else, a decade of misery, magnified by austerity policies. Note that austerity policies were not recommended by mainstream macroeconomists, who predicted that they would lead to flat or shrinking GDP, as indeed they did."
Seems pretty clear he is faulting politicians for ignoring economists, leading to more misery.
posted by JackFlash at 10:08 PM on June 28, 2018 [12 favorites]
Lanchester writes: "For the people inside the system that caused a decade of misery, no change. For everyone else, a decade of misery, magnified by austerity policies. Note that austerity policies were not recommended by mainstream macroeconomists, who predicted that they would lead to flat or shrinking GDP, as indeed they did."
Seems pretty clear he is faulting politicians for ignoring economists, leading to more misery.
posted by JackFlash at 10:08 PM on June 28, 2018 [12 favorites]
I’m quite far from having a strong understanding of economic policy, but in the USA if there were a federally mandated living wage as minimum wage, adjusted for local cost of living; nationalised/single-payer healthcare for all; some universal basic income; a complete overhaul of education systems and funding for them, including university; and a sensible 24-hour, 4-day work week we’d be in a better place as humans.
Bonus points if the funding primarily comes from the military, police, corporate, and large religious institutions that have skirted paying their fair share for the last century or so.
Education is the cornerstone, and at this point I don’t know what we can do to get it back. But we must.
posted by a halcyon day at 10:11 PM on June 28, 2018 [22 favorites]
Bonus points if the funding primarily comes from the military, police, corporate, and large religious institutions that have skirted paying their fair share for the last century or so.
Education is the cornerstone, and at this point I don’t know what we can do to get it back. But we must.
posted by a halcyon day at 10:11 PM on June 28, 2018 [22 favorites]
there's going to be another crash that makes 08 look like previews in Hartford within ...fourish years.
I hate being right but- I think I'm gonna be right.
posted by The Whelk at 10:12 PM on June 28, 2018 [26 favorites]
I hate being right but- I think I'm gonna be right.
posted by The Whelk at 10:12 PM on June 28, 2018 [26 favorites]
The Middle Class in Crisis , 24 hour Day-cares, lifelong debt, shame and fear (The Baffler)
posted by The Whelk at 10:28 PM on June 28, 2018 [5 favorites]
posted by The Whelk at 10:28 PM on June 28, 2018 [5 favorites]
My wife and I and all our friends graduated college just before the crash, and I hired and supervised recent graduates after the crash. For our generation, there was this pervasive idea that you'd basically be OK; you just had to go to college, major in whatever, and worst-case-scenario end up as a barista or an admin assistant in a nonprofit or something but still be able to afford an apartment and have kids and you'd basically be fine. If you wanted more, you could strive for it, but there was no real danger of being homeless or on food stamps or of having kids and not being able to afford child care. You might have some student loans, but it would be manageable to pay off in a decade or so.
It completely changed for the kids graduating college by 2014 or so. There was no more complacency. They knew they had to strive and excel, just to be able to pay back student loans and live independently. The worst case scenario was no longer just being poor; it was being destitute. You easily could end up with $200k in loans and no job prospects.
There's going to be another crisis, and it will be brought on by student loans. Student loan debt is just too high, salaries are too low, and kids are getting taken advantage of. And colleges are 100% complicit in this process.
posted by miyabo at 10:38 PM on June 28, 2018 [59 favorites]
It completely changed for the kids graduating college by 2014 or so. There was no more complacency. They knew they had to strive and excel, just to be able to pay back student loans and live independently. The worst case scenario was no longer just being poor; it was being destitute. You easily could end up with $200k in loans and no job prospects.
There's going to be another crisis, and it will be brought on by student loans. Student loan debt is just too high, salaries are too low, and kids are getting taken advantage of. And colleges are 100% complicit in this process.
posted by miyabo at 10:38 PM on June 28, 2018 [59 favorites]
Competition: Find the craziest graph that shows how bad the student debt crisis really is
explain to me the future where this isn't a nation-wide catastrophic crisis.
And I'm not even getting into the fact that we're doing sub prime mortgages again, and the auto-loan industry.
Just join a social affiliation group, is all I'm saying.
posted by The Whelk at 10:45 PM on June 28, 2018 [28 favorites]
explain to me the future where this isn't a nation-wide catastrophic crisis.
And I'm not even getting into the fact that we're doing sub prime mortgages again, and the auto-loan industry.
Just join a social affiliation group, is all I'm saying.
posted by The Whelk at 10:45 PM on June 28, 2018 [28 favorites]
This was a great essay. I was particularly struck by this:
posted by Catseye at 11:38 PM on June 28, 2018 [27 favorites]
How it’s been working out here in the UK is the longest period of declining real incomes in recorded economic history. ‘Recorded economic history’ means as far back as current techniques can reach, which is back to the end of the Napoleonic Wars. Worse than the decades that followed the Napoleonic Wars, worse than the crises that followed them, worse than the financial crises that inspired Marx, worse than the Depression, worse than both world wars.I knew our incomes were declining, but wow.
posted by Catseye at 11:38 PM on June 28, 2018 [27 favorites]
Just join a social affiliation group, is all I'm saying.
You mean like the Elks?
posted by thelonius at 12:21 AM on June 29, 2018 [5 favorites]
You mean like the Elks?
posted by thelonius at 12:21 AM on June 29, 2018 [5 favorites]
Yeah.
or the Masons or the Socialists or really any group that is into helping their membership like abstractly
posted by The Whelk at 12:31 AM on June 29, 2018 [6 favorites]
or the Masons or the Socialists or really any group that is into helping their membership like abstractly
posted by The Whelk at 12:31 AM on June 29, 2018 [6 favorites]
My wife and I and all our friends graduated college just before the crash, and I hired and supervised recent graduates after the crash. For our generation, there was this pervasive idea that you'd basically be OK; you just had to go to college, major in whatever, and worst-case-scenario end up as a barista or an admin assistant in a nonprofit or something but still be able to afford an apartment and have kids and you'd basically be fine. If you wanted more, you could strive for it, but there was no real danger of being homeless or on food stamps or of having kids and not being able to afford child care. You might have some student loans, but it would be manageable to pay off in a decade or so.
I graduated college in 2008. I think the generation that came of age then and the next couple of years definitely had the wool pulled over our eyes to how much student loan debt would effect us. The student loan debt crisis and explosion of college tuition was just starting to be recognized then. However, no one in my friend's circle thought if you ended up a barista or low-level admin assistant that you'd be able to make it. Maybe this is a class thing, but my circle of friends were not well off and it was drilled into us that you could not get by on a minimum wage job. Granted, I don't know your socio-economic status, but when you see your parents and your friends' parents with their above minimum wage but still not livable wage jobs struggling to support a household, you definitely learn that you have to do more to live better.
posted by LizBoBiz at 12:45 AM on June 29, 2018 [20 favorites]
I graduated college in 2008. I think the generation that came of age then and the next couple of years definitely had the wool pulled over our eyes to how much student loan debt would effect us. The student loan debt crisis and explosion of college tuition was just starting to be recognized then. However, no one in my friend's circle thought if you ended up a barista or low-level admin assistant that you'd be able to make it. Maybe this is a class thing, but my circle of friends were not well off and it was drilled into us that you could not get by on a minimum wage job. Granted, I don't know your socio-economic status, but when you see your parents and your friends' parents with their above minimum wage but still not livable wage jobs struggling to support a household, you definitely learn that you have to do more to live better.
posted by LizBoBiz at 12:45 AM on June 29, 2018 [20 favorites]
...but this is where the negative consequences of the bailout start to be really apparent – life did not get harder for banks and for the financial system. In the popular imagination, the people who caused the crisis got away with it scot-free, and, as what scientists call a first-order approximation, that’s about right.Sorry for the wall of text, but I just wanted to quote this for truth. I'll never forget the dumb shock I felt when I heard that the bank bailout money had been given with no strings attached. Like everyone else I knew at the time, I had just assumed that to qualify for the bailout, the banks would have to show their plans for ceasing their harmful and unethical (albeit technically legal) practices. I mean... really? REALLY?
In addition, there were no successful prosecutions of anyone at the higher levels of the financial system. Contrast that with the savings and loan scandal of the 1980s, basically a gigantic bust of the US equivalent of mortgage companies, in which 1100 executives were prosecuted. What had changed since then was the increasing hegemony of finance in the political system, which brought the ability quite simply to rewrite the rules of what is and isn’t legal.
That impunity, the sense that these things had consequences for us but not for the people who caused the crisis, has been central to the story of the last ten years.
It would be easier to accept all this, philosophically anyway, if since the crash we had made some progress towards reform in the operation of the banking system and international finance.
...and a sensible 24-hour, 4-day work week we’d be in a better place as humans.
I think I must be missing something here; doesn't that come out to 96 hours a week?
posted by The Underpants Monster at 1:51 AM on June 29, 2018 [8 favorites]
I think I must be missing something here; doesn't that come out to 96 hours a week?
6 hours/day X 4 = 24
posted by Lanark at 2:02 AM on June 29, 2018 [3 favorites]
6 hours/day X 4 = 24
posted by Lanark at 2:02 AM on June 29, 2018 [3 favorites]
I think I must be missing something here; doesn't that come out to 96 hours a week?
6 hours/day X 4 = 24
Ah, that makes sense. Thanks!
posted by The Underpants Monster at 2:24 AM on June 29, 2018 [3 favorites]
6 hours/day X 4 = 24
Ah, that makes sense. Thanks!
posted by The Underpants Monster at 2:24 AM on June 29, 2018 [3 favorites]
I think there's another crash coming soon, brought on by awful economic policy, loosening of the already loose restraints on the banks and the new trade wars that will not end well.
And the bankers will thrive, the normal people will bear the brunt.
I grew up under Thatcher and middle aged, comfortably middle class me is calling for revolution now before everything crashes. Fuck electing the status quo, more socialism is needed, government needs to start caring for everyone, not just donors and corporations.
posted by arcticseal at 3:00 AM on June 29, 2018 [14 favorites]
And the bankers will thrive, the normal people will bear the brunt.
I grew up under Thatcher and middle aged, comfortably middle class me is calling for revolution now before everything crashes. Fuck electing the status quo, more socialism is needed, government needs to start caring for everyone, not just donors and corporations.
posted by arcticseal at 3:00 AM on June 29, 2018 [14 favorites]
Is this the same John Lanchester who wrote the novel Capital?
Yes. A fine writer.
posted by doctornemo at 3:26 AM on June 29, 2018
Yes. A fine writer.
posted by doctornemo at 3:26 AM on June 29, 2018
> That idea stings just as much for parents as it does for their children
Does it, though? Many of the Boomers I know would happily sell out their children and grandchildren’s futures for a few extra bucks to spend at the slots on their next cruise. That’s how they vote, anyway.
posted by The Card Cheat at 3:31 AM on June 29, 2018 [41 favorites]
Does it, though? Many of the Boomers I know would happily sell out their children and grandchildren’s futures for a few extra bucks to spend at the slots on their next cruise. That’s how they vote, anyway.
posted by The Card Cheat at 3:31 AM on June 29, 2018 [41 favorites]
Competition: Find the craziest graph that shows how bad the student debt crisis really is
explain to me the future where this isn't a nation-wide catastrophic crisis.
I work in higher ed - American, mostly - and I'm frequently astonished at how rarely I hear discussions of student debt in this world.
One useful exercise is to ask a roomful of academics (faculty, staff, trustees, publishers, etc.) for people to raise their hands if they are still paying off student debt. When between 1/3 and 2/3 of hands go up, there are many, many amazed and shocked faces. Even in 2018.
And I have been told by some in the ed tech space to stop mentioning it, because it's boring or irrelevant.
posted by doctornemo at 3:34 AM on June 29, 2018 [13 favorites]
explain to me the future where this isn't a nation-wide catastrophic crisis.
I work in higher ed - American, mostly - and I'm frequently astonished at how rarely I hear discussions of student debt in this world.
One useful exercise is to ask a roomful of academics (faculty, staff, trustees, publishers, etc.) for people to raise their hands if they are still paying off student debt. When between 1/3 and 2/3 of hands go up, there are many, many amazed and shocked faces. Even in 2018.
And I have been told by some in the ed tech space to stop mentioning it, because it's boring or irrelevant.
posted by doctornemo at 3:34 AM on June 29, 2018 [13 favorites]
Lanchester came to the attention of a number of us with his non-fiction book Whoops! Why Everyone Owes Everyone and No One Can Pay (it's called something else in the US, I think) about 2008 and all that, which was largely written from the research he did for Capital. It was one of those "Ah, I see!" moments, very like The Giant Pool of Money was over the pond.
posted by Grangousier at 3:40 AM on June 29, 2018 [2 favorites]
posted by Grangousier at 3:40 AM on June 29, 2018 [2 favorites]
Does it, though? Many of the Boomers I know would happily sell out their children and grandchildren’s futures for a few extra bucks to spend at the slots on their next cruise.
There's definitely an element of this that comes back to Lanchester's/Napoleon's point about understanding somebody by how the world looked when they were twenty.
This is really sharply illustrated (in the UK at least, not sure how it plays out elsewhere) by popular narratives around the housing crisis. Over the past five decades or so, the relative price of houses has soared to the point of insanity while the price of consumer goods has gone down. And we know this, this isn't exactly an esoteric theory. But there are a ton of people in my parents' generation (turned 20 in the 1970s) who just can't see why These Young People Today are complaining about not affording houses while they spend all their money on takeaway coffees and iPhones. And it is really, really hard to shift that mindset in someone else, I have been close to banging my head off the wall in conversations about this. You can usually get them to acknowledge eventually that houses cost a bit more now so it might take a bit longer to save up - it's much, much harder to get them to acknowledge that the world has changed, here, and that saving up for a few years is not ever ever going to cut it.
And then you see another round of it with people who bought houses during the insane property boom years a bit later - "these young people today, they want their perfect house straight off! They should do what we did and buy a starter home and work up the ladder from there, they just don't want to put work into a fixer-upper." But the ladder is now missing many rungs, people often can't afford to buy until they already have children to house anyway, and the fixer-upper you had in 1997 would now be snapped up by a cash buyer as property no.14 in a modest buy-to-let portfolio, the world has changed.
People are much more willing to see things as tougher but fundamentally operating under the same rules, than they are to acknowledge that the rules don't work any more.
posted by Catseye at 4:00 AM on June 29, 2018 [49 favorites]
There's definitely an element of this that comes back to Lanchester's/Napoleon's point about understanding somebody by how the world looked when they were twenty.
This is really sharply illustrated (in the UK at least, not sure how it plays out elsewhere) by popular narratives around the housing crisis. Over the past five decades or so, the relative price of houses has soared to the point of insanity while the price of consumer goods has gone down. And we know this, this isn't exactly an esoteric theory. But there are a ton of people in my parents' generation (turned 20 in the 1970s) who just can't see why These Young People Today are complaining about not affording houses while they spend all their money on takeaway coffees and iPhones. And it is really, really hard to shift that mindset in someone else, I have been close to banging my head off the wall in conversations about this. You can usually get them to acknowledge eventually that houses cost a bit more now so it might take a bit longer to save up - it's much, much harder to get them to acknowledge that the world has changed, here, and that saving up for a few years is not ever ever going to cut it.
And then you see another round of it with people who bought houses during the insane property boom years a bit later - "these young people today, they want their perfect house straight off! They should do what we did and buy a starter home and work up the ladder from there, they just don't want to put work into a fixer-upper." But the ladder is now missing many rungs, people often can't afford to buy until they already have children to house anyway, and the fixer-upper you had in 1997 would now be snapped up by a cash buyer as property no.14 in a modest buy-to-let portfolio, the world has changed.
People are much more willing to see things as tougher but fundamentally operating under the same rules, than they are to acknowledge that the rules don't work any more.
posted by Catseye at 4:00 AM on June 29, 2018 [49 favorites]
Don't miss that very enlightening counterfactual based on Milanović's crucial work:
What if the governments of the developed world turned to their electorates and explicitly said this was the deal? The pitch might go something like this: we’re living in a competitive global system, there are billions of desperately poor people in the world, and in order for their standards of living to improve, ours will have to decline in relative terms. Perhaps we should accept that on moral grounds: we’ve been rich enough for long enough to be able to share some of the proceeds of prosperity with our brothers and sisters. I think I know what the answer would be. The answer would be OK, fine, but get rid of the trunk. Because if we are experiencing a relative decline why shouldn’t the rich – why shouldn’t the one per cent – be slightly worse off in the same way that we are slightly worse off?
posted by doctornemo at 4:26 AM on June 29, 2018 [9 favorites]
What if the governments of the developed world turned to their electorates and explicitly said this was the deal? The pitch might go something like this: we’re living in a competitive global system, there are billions of desperately poor people in the world, and in order for their standards of living to improve, ours will have to decline in relative terms. Perhaps we should accept that on moral grounds: we’ve been rich enough for long enough to be able to share some of the proceeds of prosperity with our brothers and sisters. I think I know what the answer would be. The answer would be OK, fine, but get rid of the trunk. Because if we are experiencing a relative decline why shouldn’t the rich – why shouldn’t the one per cent – be slightly worse off in the same way that we are slightly worse off?
posted by doctornemo at 4:26 AM on June 29, 2018 [9 favorites]
I think I know what the answer would be. The answer would be OK, fine, but get rid of the trunk.
Given that (as one example among many) lots of people in the US are fine with children from overseas being separated from their parents and/or put in jail in the service of some nebulous notion of "security", I fear this massively overestimates the extent to which people in the developed world give a fuck about alleviating, or even just not directly causing, the suffering of citizens of the developing world.
posted by howfar at 4:50 AM on June 29, 2018 [6 favorites]
Given that (as one example among many) lots of people in the US are fine with children from overseas being separated from their parents and/or put in jail in the service of some nebulous notion of "security", I fear this massively overestimates the extent to which people in the developed world give a fuck about alleviating, or even just not directly causing, the suffering of citizens of the developing world.
posted by howfar at 4:50 AM on June 29, 2018 [6 favorites]
Without protections, business will immediately engage in any underhanded business dealings allowed by law no matter how unscrupulous or dangerous
And thinking the law is a limiter appears to be more wishful thinking.
Wells Fargo making fake accounts may have resulted in a fine - but how much of an effect did it have on the company? If there was not 'confidentional informants' in that case - would the government enforcement have happened?
posted by rough ashlar at 5:02 AM on June 29, 2018 [5 favorites]
And thinking the law is a limiter appears to be more wishful thinking.
Wells Fargo making fake accounts may have resulted in a fine - but how much of an effect did it have on the company? If there was not 'confidentional informants' in that case - would the government enforcement have happened?
posted by rough ashlar at 5:02 AM on June 29, 2018 [5 favorites]
How it’s been working out here in the UK is the longest period of declining real incomes in recorded economic history. ‘Recorded economic history’ means as far back as current techniques can reach, which is back to the end of the Napoleonic Wars
Economic historians have done income/quality of life studies back into the 15th-16th centuries for England; they have to use different techniques, and thus may not be directly comparable.
The research suggests that the decades of the 1790s-1800s were especially bad for poverty - a fall in real incomes (due to increases in food prices, etc.) from c1700.
posted by jb at 5:04 AM on June 29, 2018 [2 favorites]
Economic historians have done income/quality of life studies back into the 15th-16th centuries for England; they have to use different techniques, and thus may not be directly comparable.
The research suggests that the decades of the 1790s-1800s were especially bad for poverty - a fall in real incomes (due to increases in food prices, etc.) from c1700.
posted by jb at 5:04 AM on June 29, 2018 [2 favorites]
Out of curiosity does that roughly correlate with the acceleration in enclosure - essentially the privatisation of common land - and are causal connections drawn?
posted by Grangousier at 5:06 AM on June 29, 2018 [5 favorites]
posted by Grangousier at 5:06 AM on June 29, 2018 [5 favorites]
Does it, though? Many of the Boomers I know would happily sell out their children and grandchildren’s futures for a few extra bucks to spend at the slots on their next cruise.
Having attended and read minutes from a few city hall meetings about housing when I lived in Silicon Valley let's just say the argument 'don't you want your kids to be able to live near you' was met with near open contempt. Even being rich on paper makes ordinary people into sociopaths.
posted by Space Coyote at 5:09 AM on June 29, 2018 [21 favorites]
Having attended and read minutes from a few city hall meetings about housing when I lived in Silicon Valley let's just say the argument 'don't you want your kids to be able to live near you' was met with near open contempt. Even being rich on paper makes ordinary people into sociopaths.
posted by Space Coyote at 5:09 AM on June 29, 2018 [21 favorites]
Requiring full-cost accounting would be a goof start - system needs more that tweaking; capitalism is destroying out planet right now.
Like eMergy accounting? Good luck with that - there is the Florida mangrove case and that's about it from officialdom seeing it as a valid idea.
There's going to be another crisis, and it will be brought on by student loans. Student loan debt is just too high, salaries are too low, and kids are getting taken advantage of. And colleges are 100% complicit in this process.
In the US of A that is a government protected business model. You can't go bankrupt in the US system on student loans so that debt follows you in the US of A. The economic or libertarian speak would be risk of default is priced out of the model and therefore prices are distorted. An endpoint seems to be a lower-cost bypassing of the system via industry-specific certifications and acredited online schools to avoid the higher cost and risk of forever-debt.
The above isn't worrysome? Why not the below:
Someone is working on neural-net feedback learning in an attempt to drive the per-student cost down and once that gets a thumbs-up the only thing left for a formal argument of students pressing flesh together will be socialization. Don't worry about the socialization POV - President Zuckerberg in 2028 will just let the world know facebook is all the socialization you need.
posted by rough ashlar at 5:23 AM on June 29, 2018 [1 favorite]
Like eMergy accounting? Good luck with that - there is the Florida mangrove case and that's about it from officialdom seeing it as a valid idea.
There's going to be another crisis, and it will be brought on by student loans. Student loan debt is just too high, salaries are too low, and kids are getting taken advantage of. And colleges are 100% complicit in this process.
In the US of A that is a government protected business model. You can't go bankrupt in the US system on student loans so that debt follows you in the US of A. The economic or libertarian speak would be risk of default is priced out of the model and therefore prices are distorted. An endpoint seems to be a lower-cost bypassing of the system via industry-specific certifications and acredited online schools to avoid the higher cost and risk of forever-debt.
The above isn't worrysome? Why not the below:
Someone is working on neural-net feedback learning in an attempt to drive the per-student cost down and once that gets a thumbs-up the only thing left for a formal argument of students pressing flesh together will be socialization. Don't worry about the socialization POV - President Zuckerberg in 2028 will just let the world know facebook is all the socialization you need.
posted by rough ashlar at 5:23 AM on June 29, 2018 [1 favorite]
Well as for the benefits to the middle classes of the developing countries, the bad news is that Milanovic's elephant graph, according to a new updated and extended recalculation by the World Inequality Report, is flattening down, so much that it now looks increasingly like the Loch Ness Monster
posted by talos at 6:12 AM on June 29, 2018 [10 favorites]
posted by talos at 6:12 AM on June 29, 2018 [10 favorites]
Off topic, but a call out to his wife, M.J.Carter, historian and novelist.
Back to our regularly scheduled commentary.
posted by BWA at 6:55 AM on June 29, 2018 [1 favorite]
Back to our regularly scheduled commentary.
posted by BWA at 6:55 AM on June 29, 2018 [1 favorite]
It turns out that capitalism is the solution to the Fermi paradox.
No matter what existential problems we're trying to figure out and hopefully solve for humanity's continuation -- poverty, health crisis, climate change, fascism, authoritarianism, surveillance economy -- capitalism gets in the way.
And it's our own choosing.
posted by runcifex at 7:07 AM on June 29, 2018 [4 favorites]
No matter what existential problems we're trying to figure out and hopefully solve for humanity's continuation -- poverty, health crisis, climate change, fascism, authoritarianism, surveillance economy -- capitalism gets in the way.
And it's our own choosing.
posted by runcifex at 7:07 AM on June 29, 2018 [4 favorites]
The Bank for International Settlements, the Basel-based central bank of central banks, gives a twice yearly estimate of the OTC market. The most recent number is $532 trillion
To put that in perspective (OTC meaning Over The Counter transactions which are "directly executed between interested parties, and not only is there no grown-up supervision, in the sense of an agency overseeing the transaction, but it is actually the case that nobody else knows what has been transacted") that figure is ~6 times the annual current global GDP
posted by talos at 7:17 AM on June 29, 2018 [1 favorite]
To put that in perspective (OTC meaning Over The Counter transactions which are "directly executed between interested parties, and not only is there no grown-up supervision, in the sense of an agency overseeing the transaction, but it is actually the case that nobody else knows what has been transacted") that figure is ~6 times the annual current global GDP
posted by talos at 7:17 AM on June 29, 2018 [1 favorite]
[OTC] is ~6 times the annual current global GDP
That sounds bad, but I'm new to this OTC metric. Is that historically a big change in that ratio?
posted by Reasonably Everything Happens at 7:32 AM on June 29, 2018
That sounds bad, but I'm new to this OTC metric. Is that historically a big change in that ratio?
posted by Reasonably Everything Happens at 7:32 AM on June 29, 2018
"Pure capitalism without rules is a race to the bottom. "
Quoted for emphasis. God damn it.
posted by corvikate at 7:33 AM on June 29, 2018 [3 favorites]
Quoted for emphasis. God damn it.
posted by corvikate at 7:33 AM on June 29, 2018 [3 favorites]
It turns out that capitalism is the solution to the Fermi paradox.
I actually kind of seriously believe this. It seems to me that any civilization starts out desperate to find or produce enough resources and products to support its needs. It organizes itself around producing supply because there isn't enough stuff to meet demand.
However, as it develops and advances technologically, producing enough stuff stops being a problem, at least in the mid-term. But you have a social order built around maximizing production based on the assumption that there will always be a need for more stuff, except now there isn't. Look at all the crap we're making, and choking ourselves on, not because anybody demanded it, but because people need some way to participate in the economic system and the only way we know to do that is to produce something and then go out and find demand for it. Or create that demand if it isn't there naturally.
The ability to shift from an economy of scarcity to an economy of plenty without collapsing back to a tech level that can't supply what people need seems like a perfectly likely great filter to me.
posted by Naberius at 7:45 AM on June 29, 2018 [30 favorites]
I actually kind of seriously believe this. It seems to me that any civilization starts out desperate to find or produce enough resources and products to support its needs. It organizes itself around producing supply because there isn't enough stuff to meet demand.
However, as it develops and advances technologically, producing enough stuff stops being a problem, at least in the mid-term. But you have a social order built around maximizing production based on the assumption that there will always be a need for more stuff, except now there isn't. Look at all the crap we're making, and choking ourselves on, not because anybody demanded it, but because people need some way to participate in the economic system and the only way we know to do that is to produce something and then go out and find demand for it. Or create that demand if it isn't there naturally.
The ability to shift from an economy of scarcity to an economy of plenty without collapsing back to a tech level that can't supply what people need seems like a perfectly likely great filter to me.
posted by Naberius at 7:45 AM on June 29, 2018 [30 favorites]
the argument 'don't you want your kids to be able to live near you' was met with near open contempt.
This is part of the "nuclear family" trope: a "family" is mom, dad, and minor children; no other family members exist. Adult children, mom & dad's parents - those people are welcome to visit for the holidays, but they're not supposed to be present for day-to-day communication.
There is no concept of a community, of a group of people larger than 4-6 who live together, that should be influencing each other's decisions and supporting each other through troubles.
So there's no understanding of things like student loan debt as more than a crisis of millions of individuals, no room to address the economy by making life easier for people who are being crushed, rather than for people who "deserve" help by some standard that doesn't take into account how communities work, including "how financial predators feed on some communities more than others."
posted by ErisLordFreedom at 7:48 AM on June 29, 2018 [20 favorites]
This is part of the "nuclear family" trope: a "family" is mom, dad, and minor children; no other family members exist. Adult children, mom & dad's parents - those people are welcome to visit for the holidays, but they're not supposed to be present for day-to-day communication.
There is no concept of a community, of a group of people larger than 4-6 who live together, that should be influencing each other's decisions and supporting each other through troubles.
So there's no understanding of things like student loan debt as more than a crisis of millions of individuals, no room to address the economy by making life easier for people who are being crushed, rather than for people who "deserve" help by some standard that doesn't take into account how communities work, including "how financial predators feed on some communities more than others."
posted by ErisLordFreedom at 7:48 AM on June 29, 2018 [20 favorites]
There is no concept of a community, of a group of people larger than 4-6 who live together, that should be influencing each other's decisions and supporting each other through troubles.
I'm not sure it's as bleak and uniform as that - I had possibly the most anodyne, bourgeois, denatured suburban upbringing possible, but still see my parents weekly (they live about 20 miles away), and they regularly help out with our kids. My partner's mom, the living half of a much more bohemian / intellectual couple that lived in the city, and is is also nearby, has the same relationship with us.
Looking around our broader group of friends, co-workers, and acquaintances, I see a pretty wide array of arrangements, from little-or-no contact with extended family to multi-generation households.
posted by ryanshepard at 8:30 AM on June 29, 2018 [3 favorites]
I'm not sure it's as bleak and uniform as that - I had possibly the most anodyne, bourgeois, denatured suburban upbringing possible, but still see my parents weekly (they live about 20 miles away), and they regularly help out with our kids. My partner's mom, the living half of a much more bohemian / intellectual couple that lived in the city, and is is also nearby, has the same relationship with us.
Looking around our broader group of friends, co-workers, and acquaintances, I see a pretty wide array of arrangements, from little-or-no contact with extended family to multi-generation households.
posted by ryanshepard at 8:30 AM on June 29, 2018 [3 favorites]
That sounds bad, but I'm new to this OTC metric. Is that historically a big change in that ratio?
The distorting factor here is that the notional value of any given deal may vastly overstate the actual amount of money at stake. Basically, your gains or losses may depend on the movement in value of an asset, with the asset being defined as an essentially arbitrary, quite large number. That arbitrary number is taken as the value of the bet even though that amount is not actually at stake in any meaningful sense. No party even has that money.
To try to really simplify, I can bet you that the value of today's dollar's worth of soybeans will go up, even if I don't have any. You pay me the amount the value increases, or I pay you the amount the value decreases. The notional value of the deal would be a dollar, but realistically the entire dollar is not at stake. Probably one of us is going to be paying the other a few pennies, and that's what the market value will be. Now, we could also make that same bet with respect to $100 million worth of soybeans in today's market. (Again, neither of us has $100 million in cash or in soybeans.) The change in value of the soybeans per unit is going to be the same whether we're talking one dollar's worth or $100 million's worth. So, at the end of the period, one of us going to be paying the other those few pennies times $100 million. Using a larger notional value therefore does increase the actual market value of the bet, but it works as a multiplier. Calculating the market value of a transaction like this is difficult (and changes constantly based on the passage of time), but no one in their right mind would buy my rights to that deal for $100 million or anywhere close to it.
I think Lanchester is overrated generally. He's not great at translating technical terms to layman's terms with precision (she says, inviting the same criticism in her comment).
posted by praemunire at 10:10 AM on June 29, 2018 [5 favorites]
The distorting factor here is that the notional value of any given deal may vastly overstate the actual amount of money at stake. Basically, your gains or losses may depend on the movement in value of an asset, with the asset being defined as an essentially arbitrary, quite large number. That arbitrary number is taken as the value of the bet even though that amount is not actually at stake in any meaningful sense. No party even has that money.
To try to really simplify, I can bet you that the value of today's dollar's worth of soybeans will go up, even if I don't have any. You pay me the amount the value increases, or I pay you the amount the value decreases. The notional value of the deal would be a dollar, but realistically the entire dollar is not at stake. Probably one of us is going to be paying the other a few pennies, and that's what the market value will be. Now, we could also make that same bet with respect to $100 million worth of soybeans in today's market. (Again, neither of us has $100 million in cash or in soybeans.) The change in value of the soybeans per unit is going to be the same whether we're talking one dollar's worth or $100 million's worth. So, at the end of the period, one of us going to be paying the other those few pennies times $100 million. Using a larger notional value therefore does increase the actual market value of the bet, but it works as a multiplier. Calculating the market value of a transaction like this is difficult (and changes constantly based on the passage of time), but no one in their right mind would buy my rights to that deal for $100 million or anywhere close to it.
I think Lanchester is overrated generally. He's not great at translating technical terms to layman's terms with precision (she says, inviting the same criticism in her comment).
posted by praemunire at 10:10 AM on June 29, 2018 [5 favorites]
It seems to me that any civilization starts out desperate to find or produce enough resources and products to support its needs. It organizes itself around producing supply because there isn't enough stuff to meet demand.
However, as it develops and advances technologically, producing enough stuff stops being a problem, at least in the mid-term. But you have a social order built around maximizing production based on the assumption that there will always be a need for more stuff, except now there isn't.
Not sure if this was your intention, but this is pretty much the orthodox Marxist interpretation of commodity fetishism and the modes of production.
Feudalism served its purpose, then went away. Capitalism likewise served its purpose but we refuse to admit its time has passed, so instead we've put it on a feeding tube so it can keep soiling the bed.
posted by joechip at 11:41 AM on June 29, 2018 [5 favorites]
However, as it develops and advances technologically, producing enough stuff stops being a problem, at least in the mid-term. But you have a social order built around maximizing production based on the assumption that there will always be a need for more stuff, except now there isn't.
Not sure if this was your intention, but this is pretty much the orthodox Marxist interpretation of commodity fetishism and the modes of production.
Feudalism served its purpose, then went away. Capitalism likewise served its purpose but we refuse to admit its time has passed, so instead we've put it on a feeding tube so it can keep soiling the bed.
posted by joechip at 11:41 AM on June 29, 2018 [5 favorites]
Well, I don't really think the feudal system looked around one day and went, "Well, looks like my work here is done. I must go elsewhere where I am needed!" and then rode off into the sunset on a white horse. It was displaced by a different system gradually, with a lot of disruption and resistance. A lot of people died, and odd bits of it are still hanging around.
I don't think it's immediately clear what system is going to replace capitalism and, as was the case with feudalism, power is concentrated in the people who are most invested in preserving it at all costs. So it's not going to happen anytime soon, and it's not going to happen without some shit hitting some fans. Particularly since, as I was going for above, the shift from an economy of scarcity to an economy of plenty is far more complicated than the shift from an economy of scarcity based around land to one based around finance.
posted by Naberius at 1:57 PM on June 29, 2018 [2 favorites]
I don't think it's immediately clear what system is going to replace capitalism and, as was the case with feudalism, power is concentrated in the people who are most invested in preserving it at all costs. So it's not going to happen anytime soon, and it's not going to happen without some shit hitting some fans. Particularly since, as I was going for above, the shift from an economy of scarcity to an economy of plenty is far more complicated than the shift from an economy of scarcity based around land to one based around finance.
posted by Naberius at 1:57 PM on June 29, 2018 [2 favorites]
This was a really great article that sort of stretched the limits of my barely-existing finance/macroeconomics knowledge, and I got a lot out of it. Thanks for posting it. Maybe the thing that tickled me most of all was the blunt question after several thousands words of economic discourse and financial policy analysis:
Since it isn’t, a simple question arises: where’s all the fucking money?
posted by mostly vowels at 4:03 PM on June 29, 2018 [4 favorites]
Since it isn’t, a simple question arises: where’s all the fucking money?
posted by mostly vowels at 4:03 PM on June 29, 2018 [4 favorites]
I have been mucking about in the works of Adam Smith lately and I would just like to say that this system is NOT capitalism. Smith believed in appropriate government oversight. He believed in what we now call moral hazard. This is plutocracy. Merchants make the rules about markets. We are basically at the stage of fully transforming into a pluto-kleptocracy. Capitalism like Marxist Communism has never been tried. Both have been inspirational for other systems that claimed their mantle but by calling the global west Capitalist is like claiming the Civil Rights Act ended racial thought and bigotry in the USA. This by no means an argument for Capitalism. I just think we could get more traction pointing out that those who talk about capitalism and innovation while being thieves masquerading as merchants, like the too-big-to-fail bankers, need to have the slip they hide behind ripped away. Yes, I am a cranky pedant.
posted by Ignorantsavage at 10:51 PM on June 29, 2018 [9 favorites]
posted by Ignorantsavage at 10:51 PM on June 29, 2018 [9 favorites]
Economist Alan Blinder recently wrote a book about why politicians don’t take policy advice from economists, an appreciation of the book’s strengths and weaknesses here.
posted by shothotbot at 7:22 AM on June 30, 2018
posted by shothotbot at 7:22 AM on June 30, 2018
From the article:
Donald Trump presidential campaign, 2000
posted by XMLicious at 11:01 AM on July 1, 2018 [2 favorites]
At this point we should skepticize with extreme prejudice anything which even just sounds like it might have been said by Donald Trump.Both France and the US elected presidents who had never run for office before.
Donald Trump presidential campaign, 2000
posted by XMLicious at 11:01 AM on July 1, 2018 [2 favorites]
if there were a federally mandated living wage as minimum wage, adjusted for local cost of living; nationalised/single-payer healthcare for all; some universal basic income; a complete overhaul of education systems and funding for them, including university; and a sensible 24-hour, 4-day work week we’d be in a better place as humans
But - won't somebody think of the billionaires?
posted by HiroProtagonist at 8:29 PM on July 1, 2018 [1 favorite]
But - won't somebody think of the billionaires?
posted by HiroProtagonist at 8:29 PM on July 1, 2018 [1 favorite]
>Calculating the market value of a transaction like this is difficult (and changes constantly based on the passage of time), but no one in their right mind would buy my rights to that deal for $100 million or anywhere close to it.
Well, yes, until your counter party fails, and no longer acts as the hedge you anticipated for your exposure to $100million worth of soy bean futures that you have sold to somebody expecting physical delivery. So you in turn fail, and the buyer in turn is disrupted as their delivery fails, and it cascades through the market. As I am sure you are aware, the mortgage cds in 2008 only paid 7% or similar, but when they became valueless (or at least temporarily of unknown value) the problem ricocheted throughout the finance system because it wasn’t the loss of the 7% income that was the problem.
posted by bystander at 7:15 AM on July 7, 2018
Well, yes, until your counter party fails, and no longer acts as the hedge you anticipated for your exposure to $100million worth of soy bean futures that you have sold to somebody expecting physical delivery. So you in turn fail, and the buyer in turn is disrupted as their delivery fails, and it cascades through the market. As I am sure you are aware, the mortgage cds in 2008 only paid 7% or similar, but when they became valueless (or at least temporarily of unknown value) the problem ricocheted throughout the finance system because it wasn’t the loss of the 7% income that was the problem.
posted by bystander at 7:15 AM on July 7, 2018
Been down so long it looks like up:The 08 crash is all around us and getting worse
posted by The Whelk at 10:31 AM on July 7, 2018 [3 favorites]
posted by The Whelk at 10:31 AM on July 7, 2018 [3 favorites]
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This thread has been archived and is closed to new comments
Still, these sorts of articles and discussions with my peers give me hope that understanding is changing, and we can built a better future. Maybe many young people will lose their convictions as they age. Yet as I understand it, less of us are going to go into positions where our material interests change. Less of us are going to have reason to stand by and let capitalism continue its ravages.
posted by AnhydrousLove at 8:35 PM on June 28, 2018 [1 favorite]