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wonderpup

Moneyweek- The Rise Of The Robots.

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Compliance was a stepping stone towards the goal of making yourself richer.

You had a better option, didn't take it.

But I did get richer.

But you become less rich than if you don't use violence. Therefore you are an idiot.

That may or may not be true- but what we both seem to now agree is that I have indeed got richer via the use of violent threats- so to that degree we agree that violence works.

it means reject without violence, without threats. That's what free is free from. You know this, we've been over it a dozen times at least.

Not so- it's entirely possible for free trade to occur when one party is under threat. For example:

Your vehicle breaks down in the desert and your water runs out and you are under threat of dying from thirst. I then happen to come along and make you the following offer- I will save you from death, give you water and drive you to the next town if you agree to sign over to me all your wealth and property.

If you reject my offer you will die- but this does not mean you not free to choose- this situation is still a free market.

So you see the mere existence of a threat is not in itself a negation of the free market. In the above scenario I am threatening to leave you to die in the desert if you do not give me what I want.

What you are trying to articulate- I think- is that you have this 'special Injin rule' that you believe should be obeyed by market participants- the 'special Injin rule' being that market participants should not use violence as a tool of negotiation.

My question to you is simple; Why not? If you agree that it's ok for me to threaten to leave a man to die a painful death in the desert in order to gain a bargaining advantage- why is it not ok for me to threaten to beat him up to gain a bargaining advantage?

In both cases my choices are causing harm to occur to that person- in both cases they have the ability to accept or reject my offer and suffer the consequences of doing so.

You make this spurious distinction between passive threats and active threats and try to hang an entire philosophy on the difference.

If there is no moral reason why I should not use violent threats as a tool of negotiation- and you agree there is no moral reason- then why can't I do so?

Is it just because you-Injin- say so- is that really all you have?

In the vast flat plain of your amoral world view stands this single upright monolith upon which is carved the legend "Thou shalt not use violence'

Says who and why? Who made this law, from where did it arise and on what basis does it stand?

And if your answer is merely the utilitarian claim that violence is less efficient than non violence then violence is not incompatible with a free market- it's merely a less efficient version of a free market.

So we can see that violence does not negate a free market- it's just another way of doing business.

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Wonderpup expresses beautifully the problem in terms of what happens when the market value of an average human brain drops below maintainance costs.

When this has happened in the past, the brain often doesn't get maintained and dies.

However there are other factors to consider beyond labour value. There is also political value and emotional "feel good" value to those better off.

As long as voting masses have some power in the affairs of state, they will attract a dividend from the capital owning class. But how did they get a vote in the first place? Largely because of the increasing value of their labour, which started getting pricey compared to capital after the Black death, and got pricier when increasing productivity of capital allowed specialised jobs to proliferate.

What may be "different this time" is if automation can actually replace that base commodity of a trainable socially adept brain, which has been the basis of labour wealth since the inception of the middle class.

All the polyanna arguments about the adaptability of humans, about humans being freed up to do other things, miss this tipping point: when technology becomes more adaptable than humans. This has never happened before.

I suspect, but may be wrong, that it will take some time for robots to undercut the market for human social skills. Maybe we can all enjoy fabulous wealth just chatting amongst ourselves, or "hosting" services largely performed by our automated assistants.

Maybe the bleeding edge creative jobs will be a last bastion of human brainpower for a few.

But when robots finally get better at the soft social things, we have another worry - when and why won't they eventually win political power? It is a statistical fact that if systems become self replicating, then there will be selection pressure for selfishly reproducing systems.

'The tipping point' is the phrase I should have been using all along- that's really what this debate is about. The counter argument is always based on taking the past and mapping it onto the future- so since technology has not permanently disenfranchised humans in the past- this will never happen in the future.

But this argument does ignore the possibility that the point might be reached where the cost/benefit analysis might tip in favour of automated solutions on a more or less ongoing basis.

In a race where the speed of one horse were increasing in a linear fashion, while the speed of the other were increasing exponentially which horse would you bet on to win a long race? Even if the first horse had a big head start the logic of exponential curves would make the second horse a good bet.

It's like the joke about the two campers and the bear- technology does not need to overtake humans in every sphere to create mass unemployment- it only has to overtake humans in the narrow sphere of average work requirements. So while it may be true that an automated warehouse robot could not write poetry in it's spare time as well as the warehouse worker it replaced- it could do his day job just as well if not better.

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Not at all - every seller and every buyer in a free market has morals of their own.

If a seller would rather sell grain to starving humans, they will. Would you?

But you agree that there is no moral rule in a free market that says he must do so. The market does not impose moral rules on market participants- so in that sense it is an amoral system.

You can take anything you like, but that doesn't mean you will face no consequences. If you keep stealing from people, they will either 1) stop associating with you and suggest that others don't either (ostracism) or 2) down tools and stop making stuff which will only be stolen anyway. As people want stuff, it is likely that 2 will be the last resort, after 1 has failed.

Morality doesn't need to be considered at all here.

I agree- the market is an amoral system.

Why do you keep bringing morality into it? You don't need to consider it.

Ofc, you can use violence/threats and then force a trade. We call this 'theft', by implication of it not being a free trade.

This is incorrect. If there is no morality there can be no theft.

Also if there is no morality there is no reason not to use violence as a bargaining tool.

So you have the following problem:

If the market is amoral then violence is simply one way to bargain- I offer you a threat of violence if you do not comply- you are then free to reject or accept the consequences of my threats and act accordingly.

Now- we know that violent threats are not immoral in a free market- because as you have pointed out we need not consider morality. So what does that leave us with?

We are left with your utilitarian argument that violent threats are not the most efficient way to bargain.

So we can say the following- violent threats are not a basic violation of free markets they are merely an inferior way to negotiate in a free market.

You see in the abscence of any moral objection to violence all that remains to you is the utilitarian claim that violence is less efficient than non violence- so all you are really saying to me is that in a free market negotiation it would be wiser to use non violent rather than violent means to negotiate.

What you have not demonstrated is why the use of violent threats breaches some basic principle of free markets- and the reason that you have not been able to do so is simple- the the free market has no priciples or morals of any kind.

And in an amoral system violent threats are a perfectly valid tool to use in a negotiation between two parties- both of whom are free to accept or reject the consequences that those threats might bring about.

One is done peacefully, the other isn't. You're trying to argue that theft is free trade, when it clearly isn't. You could argue it is coercive trade (aka theft) - such as taxation - but you can't argue it is free trade.

The distinction you make between a 'peaceful' trade and a trade that employs violent threats is merely a difference in negotiating tactics- in some situations a peaceful approach will work best, in others a violent approach will be more effective.

What you keep wanting to say is that using violent threats is not only less efficient but is in some way morally wrong.

But- alas- the market is not a moral construct and so the distinction between the morally right and morally wrong does not exist in this context- and you have already agreed that this is so.

And the sad truth is that the utilitarian argument you replace morality with does not disallow the use of violelce- it merely defines it as being an inferior bargaining technique- so you do not-in fact- rule out violent threats as a negotiating strategy- you simply claim that other strategies are superior.

So to summarise your position as I see it:

Violent threats as a bargaining technique are not immoral because the free market does not concern itself with morality- therefore the use of violence cannot violate any moral principles of the free market because the free market has no moral principles- it is a strictly amoral system based on the paradigm that the most efficient way is the superior way.

The values of the free market are not therefore moral values but utilitarian values. So this being so we can derive the following:

Violent threats are simply an inferior bargaining technique than other non violent means.

So your objection to the use of violent threats is simply that they are not the best way to negotiate in a free market.

Is this accurate?

Edited by wonderpup

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Wonderpup expresses beautifully the problem in terms of what happens when the market value of an average human brain drops below maintainance costs.

When this has happened in the past, the brain often doesn't get maintained and dies.

However there are other factors to consider beyond labour value. There is also political value and emotional "feel good" value to those better off.

As long as voting masses have some power in the affairs of state, they will attract a dividend from the capital owning class. But how did they get a vote in the first place? Largely because of the increasing value of their labour, which started getting pricey compared to capital after the Black death, and got pricier when increasing productivity of capital allowed specialised jobs to proliferate.

Few people understand the relationship between black death and the creation of labour power through pricing power.

What may be "different this time" is if automation can actually replace that base commodity of a trainable socially adept brain, which has been the basis of labour wealth since the inception of the middle class.

All the polyanna arguments about the adaptability of humans, about humans being freed up to do other things, miss this tipping point: when technology becomes more adaptable than humans. This has never happened before.

That line of argument that many argue I view as trying to avoid the argument. An analogy is what happens if we run out of oil. And some(including me argue we won't in the forseeable future).. but if the argument is 'what happens if we run out of oil'... the question is a hypothetical.

I suspect, but may be wrong, that it will take some time for robots to undercut the market for human social skills. Maybe we can all enjoy fabulous wealth just chatting amongst ourselves, or "hosting" services largely performed by our automated assistants.

Maybe the bleeding edge creative jobs will be a last bastion of human brainpower for a few.

At one point I was hopeful of jobs like guide in a MMORPG.. now I have come to believe the new economy is never going to create real jobs in substantial numbers. I believe the last stand of the human worker will ironically be in things like brick work and carpentry.

But when robots finally get better at the soft social things, we have another worry - when and why won't they eventually win political power? It is a statistical fact that if systems become self replicating, then there will be selection pressure for selfishly reproducing systems.

This would be a good debate to have. I hope we can control them... I have a feeling no one can control something smarter than themselves, let alone thousands or millions of times smarter.

At some point we will have to imbue computers with emotions so that they can make moral choices at a high level, based not on a binary yes/no of a situation, but on a general feeling on the preponderance of thoughts. This is why humans have emotions. The potential situations we can find ourselves in are limitless so it could never all be programmed for or anticipated. And since a completely rational choice is not known, the entity has to go with its emotional feeling. For example we will imbue robots to be afraid of dangerous situations. Why - because we don't want it getting broken.

It gets pretty wild, like the example you gave. The robots with an interest in self-replication will tend to spread over time moreso than robots without those traits.

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Food is produced from labour. Land/locations exist with or without labour.

Right, so a bunch of peaches you have picked up from the ground and put in a basket is all yours. If they are still on the ground, they are the first person to turn up's?

If you are hinging property rights on labour then this is a very trite distinction with a million grey areas.

What if i have improved the land? What if I planted the seed? What if the seed just fell out of my pocket? What if I defended the peach tree from animal predators?

If you monopolise food, you are holding on to what your have laboured for (sowed, watered, nurtured, harvested etc).

Yes, just like my land.

If you monopolise a location, you are holding on to what you haven't laboured for - you have just stuck a fence around it and threatened people who come near it.

********. You clearly have no real world experience of producing food, but you are happy to pontificate upon it with all the sophistication of a sixth former.

Most amusing.

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There is a huge distinction between excluding the 'poor' from food directly and excluding them from land. No one made the land.

But people expended vast labour to improve it and provide infrastructure that gives much of its value.

One of the best written expositions of this important distinction is by Winston Churchill...

http://www.landvalue...hen-we-can.html

In short... the landless have justified grievances against the rich... those with land do not. There is easily enough land on the planet to feed everyone. This is where the arguments against technology are futile. People have been able to feed themselves for thousands of years and we can certainly do so today. Robots are only a problem if you have no means to create wealth (food) yourself. Those with land will always be able to support themselves and robots will only improve their lives.

OK so actually you libertarians are radical left land redistributionists! Who'd have thunk it.

By the way, there are no "poor" who have access to significant productive land, by deinition, since that access is valuable.

I think you would get less pushback from lefties if you just stated from the outset that you would first allow chavs all over the 9th Duke of ******youshire's family acres before cutting off all welfare.

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Right, so a bunch of peaches you have picked up from the ground and put in a basket is all yours. If they are still on the ground, they are the first person to turn up's?

If you are hinging property rights on labour then this is a very trite distinction with a million grey areas.

What if i have improved the land? What if I planted the seed? What if the seed just fell out of my pocket? What if I defended the peach tree from animal predators?

Yes, just like my land.

********. You clearly have no real world experience of producing food, but you are happy to pontificate upon it with all the sophistication of a sixth former.

Most amusing.

they place security on food unsold and skipped at supermarkets...stops the poor getting it.

Also means that people have to buy food to give to soup kitchens to help the poor.

Edited by Bloo Loo

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they place security on food unsold and skipped at supermarkets...stops the poor getting it.

Also means that people have to buy food to give to soup kitchens to help the poor.

Not much security - I know a few "Freegans" around here!

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1) Would you keep making stuff if thugs kept coming around and stealing it from you?

2) That's up to the individual doing the productivity and the distribution.

As for your final question, I'm not sure what bearing it has on reality. Wealth doesn't fall from the sky - it has to be produced. If you want 100 people to be equally wealthy, how are you going to arrive there?

(1) Well, I go to work even though the givernment takes a significant proportion of what I earn, so I guess the answer to that is yes. Is that really the best that you and Injin can manage to try and prove that free trade is more productive than coerced trade?

The relevance of my final question (i.e. is it better for 100 people to have £1 each or for 1 person to have £101) is that the utilitarian argument for markets is that they maximise productivity (i.e. total number of £££'s). They give no consideration to equitable distribution (the winners tend to do very well, the losers get crapped on from a great height).

I was therefore seeking to suggest that even if your (unproven) assertion about the efficiency of markets is true, your supposed ideal of a system that seeks only to maximise productivity (with no consideration of distribution) is a pretty crap thing to hold as an ideal.

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Having only the option of theft never occurs in reality.

Theft or die? Yeah, some option that is. I take it you've never worked with street kids?

Land ownership? Not in a free market, buddy.

So property rights are okay, apart from land. I guess no-one builds factories or houses in Injin world then?

Nope. it's actally very easy. All you need to do is not attack anyone else. Can you do that?

I can do that - because I'm not in a position where that is my only realistic option. If I had to steal to feed my starving family, I would.

What about fi the pay off is always lower than another option?

But it isn't.

Not if theres another option which yields higher reward than theft. Which is always the case.

No it isn't.

Nah, you werre just being rude. Feel free to apologise (or you can still go ****** yourself.)

No. *I* wasn't the one that called *you* a "sack of shit", and I didn't tell you to "go ****** yourself" (twice).

The basis for your entire philosophy is both at odds with reality and logically flawed. If you can't face up to that, and have to resort to ad hom attacks, then that's your problem, not mine.

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Right, so a bunch of peaches you have picked up from the ground and put in a basket is all yours. If they are still on the ground, they are the first person to turn up's?

If you are hinging property rights on labour then this is a very trite distinction with a million grey areas.

What if i have improved the land? What if I planted the seed? What if the seed just fell out of my pocket? What if I defended the peach tree from animal predators?

Where did you find this pile of straw men? If I haven't made myself clear, please don't fill the void with assertions I haven't made.

I didn't say that you couldn't occupy land. I didn't say that improving the land with your labour would be disregarded either. I merely pointed out that - if the land is unchanged, in neutral condition - putting a line around it and saying it is yours, is an act of aggression. It suggests you saying 'come over this line and I will attack you'.

I suggested that people need to be compensated, if your monopolisation of the land has displacing them in some way. The details of how, I won't explore just now* (it is implementation, rather than theory), but this is the core point. Equally, if you have improved the land (ie. mixed in your items and labour), you would be owed compensation if you were displaced from the land by another.

Yes, just like my land.

The land, perhaps. The location, no.

********. You clearly have no real world experience of producing food, but you are happy to pontificate upon it with all the sophistication of a sixth former.

Most amusing.

How about you lay off the insults and try to comprehend what I am writing instead?

I used the term location very specifically. See above for why.

EDIT: * I am happy to discuss implementations, but only once the theory has been outlined.

Edited by Traktion

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(1) Well, I go to work even though the givernment takes a significant proportion of what I earn, so I guess the answer to that is yes. Is that really the best that you and Injin can manage to try and prove that free trade is more productive than coerced trade?

If you tax too highly, people abandon living here and/or ultimately working at all (ie. take benefits instead). The former will be attracted to places where less of their income is stolen, as busting a gut in a high theft zone isn't worth the bother.

The relevance of my final question (i.e. is it better for 100 people to have £1 each or for 1 person to have £101) is that the utilitarian argument for markets is that they maximise productivity (i.e. total number of £££'s). They give no consideration to equitable distribution (the winners tend to do very well, the losers get crapped on from a great height).

I was therefore seeking to suggest that even if your (unproven) assertion about the efficiency of markets is true, your supposed ideal of a system that seeks only to maximise productivity (with no consideration of distribution) is a pretty crap thing to hold as an ideal.

You're suggesting that everyone should have an equal amount of wealth, regardless of their skills and their motivation (essentially, communism - it doesn't work). You're also offering no method of getting here (other than theft, I suppose).

Stealing to apply a flawed system seems rather daft. Why would you want to debate it?

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The relevance of my final question (i.e. is it better for 100 people to have £1 each or for 1 person to have £101)

A more realistic comparison: is it better for 100 people to have £1 each or for 1 person to have £100 and 99 people to have £10?

Remember wealth is not a zero sum game.

the utilitarian argument for markets is that they maximise productivity (i.e. total number of £££'s).

'Free markets' is just another name for freedom of association. Freedom increases productivity.

the winners tend to do very well, the losers get crapped on from a great height.

Losers always get crapped on, whatever the system. Given the choice I think I would rather be at the bottom of the pile in the US than North Korea.

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If you tax too highly, people abandon living here and/or ultimately working at all (ie. take benefits instead). The former will be attracted to places where less of their income is stolen, as busting a gut in a high theft zone isn't worth the bother.

But you accept that people will tolerate some level of theft (taxation), so you're only arguing a matter of degree. You previously suggested that people wouldn't produce if they kept having stuff stolen from them. I just proved that they do.

You're suggesting that everyone should have an equal amount of wealth, regardless of their skills and their motivation (essentially, communism - it doesn't work). You're also offering no method of getting here (other than theft, I suppose).

Stealing to apply a flawed system seems rather daft. Why would you want to debate it?

Note that I never suggested that everyone having £1 was optimal. I only suggested that it was better than one person having £101 and everyone else having none.

But in principle, I would suggest that a reasonably broad distribtion of wealth is preferable to the narrow (e.g. top 10% own 90% of everything) distribution that capitalism has delivered us.

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A more realistic comparison: is it better for 100 people to have £1 each or for 1 person to have £100 and 99 people to have £10?

Remember wealth is not a zero sum game.

Erm, so I guess you're all for printy printy then?

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...But in principle, I would suggest that a reasonably broad distribtion of wealth is preferable to the narrow (e.g. top 10% own 90% of everything) distribution that the current system has delivered us.

I doubt many people here or elsewhere would disagree with this. The question is, how do we go from here to there? Do we allow some people, call them for arguments sake an Elite, to take stuff away from everyone and give it out to who they think should get it? Or do we try and leave people alone, to do their best, and to freely associate with each other to work things out between themselves consensually?

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Erm, so I guess you're all for printy printy then?

No, because wealth is not the same thing as money.

To make it easier I'll replace the pounds with gold. The comparison is the same.

Is it better for 100 people to have 1 gold coin each or for 1 person to have 100 gold coins and 99 people to have 10 gold coins?

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No, because wealth is not the same thing as money.

To make it easier I'll replace the pounds with gold. The comparison is the same.

Is it better for 100 people to have 1 gold coin each or for 1 person to have 100 gold coins and 99 people to have 10 gold coins?

Sorry - from your example, I thought you were conflating wealth with money.

So what you're saying is we can have a coerced market that delivers 1 unit of wealth (i.e. genuinely useful stuff) to all 100 people in th population, or a free market that delivers 100 units of wealth to one person and 10 units to the other 99.

So you're basically back to asserting traktion's unproven point that free markets are more efficient than coerced markets, then?

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So you're basically back to asserting traktion's unproven point that free markets are more efficient than coerced markets, then?

How many cars does the average North Korean own?

Even if that were not true, freedom is better than slavery. The Berlin wall wasn't built to keep the West Germans out...

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I doubt many people here or elsewhere would disagree with this. The question is, how do we go from here to there? Do we allow some people, call them for arguments sake an Elite, to take stuff away from everyone and give it out to who they think should get it? Or do we try and leave people alone, to do their best, and to freely associate with each other to work things out between themselves consensually?

I think my problem is that the "leave everyone alone..." etc argument is basically a free market. And as you'll no doubt have surmised, my objection to the free market being left alone to sort itself out is that market economics* is precisely what has delivered us to our current position where the gap between rich and poor continues to grow unchecked.

(*admittedly with some state intervention - but only really to try and limit the worst excesses of what the market would deliver us...)

You have only to look at the salaries of FTSE100 CEO's to realise that when market economics is left untamed, the winners reward themselves handsomely** at the expense of the majority non-CEO workers who have seen their standard of living fall enormously and we find ourselves in a kelptocracy.

(** irrespective of any genuine "talent" - after all, I could have ruined RBS for far less than they paid Fred Goodwin to ruin it)

I don't think communism is the answer. Everybody earning a mandated £1 isn't going to incentivise anyone to try harder to better themselves, but if it takes state coercion (or otherwise) to redistribute the worst excesses of wealth disparity and force people to trade with each other like *decent* human beings rather than forcing*** Chindian 8-year olds to work for 20p a day to make my trainers, then so be it.

(*** no violence - they'll just starve to death if they don't)

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How many cars does the average North Korean own?

How many fridges/stereos/PC's/ipods does the average Chinaman own? They produce shedloads of stuff, but most of them don't get much benefit from their productivity. Not because it's stolen by the state, but because the labour market places such a low value on human labour when there are another billion people in the queue for your job.

Of course in their infinite wisdom, the free marketeers would obviously point out that the chinese peasant farmer can always just set up his own rival to Apple any time he fancies...

Even if that were not true, freedom is better than slavery. The Berlin wall wasn't built to keep the West Germans out...

As I said previously, communism is NOT the solution, but nor is capitalism.

If you want "free", you could try Liberia pre-2005. Pretty much no laws there then, so you have complete freedom to get shot by a 12 year old with a Kalashnikov...

Freedom without boundaries is anarchy.

Edited by SLL

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How many fridges/stereos/PC's/ipods does the average Chinaman own?

By all accounts since the state stopped trying to run everything the average standard of living in China has massively improved. Some people have also got very rich (the 100 pound x1 and 10 pound x 100 thing in action).

As I said previously, communism is NOT the solution, but nor is capitalism.

I'm not sure there is or ever has been such a thing as 'capitalism' except in the minds of Guardian readers.

If you want "free", you could try Liberia pre-2005. Pretty much no laws there then, so you have complete freedom to get shot by a 12 year old with a Kalashnikov...

I don't think the experience of Africa translates that well to the developed world. Belgium managed 541 days without a government and still avoided the Mad Max scenario.

Freedom without boundaries is anarchy.

Actually that would be chaos. Our aim should be to maximise everyone's freedom until you cannot increase one person's freedom without reducing another's.

Edited by the shaping machine

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By all accounts since the state stopped trying to run everything the average standard of living in China has massively improved. Some people have also got very rich (the 100 pound x1 and 10 pound x 100 thing in action).

I think the increased productivity correlates with technological advances and western economies pricing themselves out of actually making things more than it does with changes to the politico-economic system. The standard of living for the "man in the street" in Russia has if anything reduced since the end of communism, but the oligarchs are sitting pretty.

I'm not sure there is or ever has been such a thing as 'capitalism' except in the minds of Guardian readers.

I'm not sure that there is or ever has been such a thing as 'communism' except in the minds of Telegraph readers.

I don't think the experience of Africa translates that well to the developed world. Belgium managed 541 days without a government and still avoided the Mad Max scenario.

But the organs of state (police, public sector, etc) were still all in place to ensure that the existing rules continued to be enforced.

Actually that would be chaos. Our aim should be to maximise everyone's freedom until you cannot increase one person's freedom without reducing another's.

Freedom is generally a good thing. But you seem to be a little unclear in advocating that we should be seeking to maximise the total amount of freedom, but also that we should not increase one person's freedom if it reduces another person's freedom.

Any freedom I have (e.g. to build my house here on this bit of land) has the potential to restrict the freedoms of someone else (e.g. spoils their nice view and/or their ability to walk across that bit of land). So should I be allowed to build my house or not?

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The problem pure free markets face today is that the production has become so efficient that it employs relatively few workers. However it was those same workers who were buying the production.

Why this did not emerge for the last few centuries, all western societies faced a permanent labour shortage. This meant when viewed broadly labour could always negotiate a wage in proportion to their production. As capitalism increased the production, so too did the wages. It was a virtuous circle, and clearly the more capitalist countries were more prosperous. (think Switzerland and the Netherlands as examples).

The problem today is there is no longer that permanent labour shortage. We are transititioning to an era of a permanent labour surplus. This means firms are paying the market rate for labour which is falling, even as the production continues to rise. See companies like Walmart which have brought such efficiency gains to retailing, yet pay not increasing.

For 2 or 3 decades western nations made up this growing gap by extending more and more credit. Until 2008 that is when that hit mathematical limits.

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The problem pure free markets face today is that the production has become so efficient that it employs relatively few workers. However it was those same workers who were buying the production.

Why this did not emerge for the last few centuries, all western societies faced a permanent labour shortage. This meant when viewed broadly labour could always negotiate a wage in proportion to their production. As capitalism increased the production, so too did the wages. It was a virtuous circle, and clearly the more capitalist countries were more prosperous. (think Switzerland and the Netherlands as examples).

The problem today is there is no longer that permanent labour shortage. We are transititioning to an era of a permanent labour surplus. This means firms are paying the market rate for labour which is falling, even as the production continues to rise. See companies like Walmart which have brought such efficiency gains to retailing, yet pay not increasing.

For 2 or 3 decades western nations made up this growing gap by extending more and more credit. Until 2008 that is when that hit mathematical limits.

What if we look back more than 200 years? Is this a parallel to the transition from full employment of the population on the land as peasants and agricultural labourers, into the industrial revolution, where machines replace people, and the now displaced flood into the new cities competing with each other for sweatshop opportunities?

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  • 296 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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