On regulation: no one disputes the necessity of traffic laws, criminal courts, or laws protecting property rights, for example. Ditto government control over business, the economy and life generally. It’s is a question of degree and of kind. In this sense, government is a “necessary evil”; we try to limit its influence, but recognize that government in its various forms and iterations can’t be altogether dispensed with.
Labour anxiety and discontent: there’s no way around the fact that maximizing profit is the essence of capitalism. So the relative “impoverishment” of labour is inevitable. The trickle-down wealth effects of capitalism plus the political organization and power of labour have diminished the degree of impoverishment (relative to wealth corporate elites), but I suspect that when the middle class starts feeling the pinch, things get iffy for the so-called “establishment”. Will Rooseveltian concessions have to be made? Perhaps.
I completely agree, Regulation is a matter of degree. And next week I will write about what happens when liberalism goes to far and flips into extreme libertarianism. I am a classic liberal and that means I am skeptical of too much regulation. But no regulation is also bad. We have to find the right balance and that is what these discussions are all about.
I also agree that the point of capitalism is to employ capital in the most profitable way possible. But I prefer JEnsens enlightened shareholder maximisation where you try to maximise shareholder value in the long run and that means not bleeding out your employees or nature or your local communities. Because in the long run that will backfire spectacularly. Oddly, this morning on my way into work, I hear a stat in a p[odcast that I am not sure is real, but if it is it is scary. On the podcast it was claimed that in the 190 years between 1759 and 1947 the GDP per capita of India was unchanged. For 190 years of British colonialism the East India Company stripped the country bare. As I said, I haven't fact checked that number...
India: where my Scottish great-grandparents made a fortune in the Indigo business. They put my grandfather and all his brothers in all the “best” schools, Sunningdale and Eton, with the vain hope of becoming part of the British establishment, as in the Peerage. Money in and of itself, is never enough. Re the colonial bit, the idea was that British investment improved life, on the whole. Still much-disputed!
Kindly Capitalism: even Charlie Marx had good things to say about Capitalism. The big question is whether or not, in the long run, profit trumps (pun intended) social well-being or perhaps human survival itself. I say this while confessing (probably an exemplification of my bad faith or some kind of contradiction) that I love markets, money, and my cresature comforts.
The India GDP figure (and varitions on the same theme eg India's share in world GDP for same/similar times) is often mentioned, but never attributed.
Whenever I hear it I always mentally discount whatever the speaker is saying.
Of the many bad things about colonialism, I don't know why this factoid (fictiontoid??) has become so widespread when there are others which are verifiiably true and show much worse actions by the rulers.
I have learnt that querying the figure angers people and risks all sorts of ad homonim allegations.
That said, I would like to know the details of who/where the figures can be obtained.
I just downloaded the 2020 edition and looked at real GDP per capita in 2011 US Dollars. It says India's GDP/capita in 1750 was $1,068 in today's dollars. In 1947 it was $985. That is a drop of 8% in 190 years. I don't know what inflation was over the period but in real terms it implies a decline of 0.04% per year in GDP/capita.
I am not nodding my head JK, I am shouting here, here. Capitalism is a wild animal. Powerful, agile, capable of great feats, but in need of a strong chain around its neck. Leave it alone and it will eat you alive without the slightest pity. Look how it was in the age of slavery. Organisation and improvements in education have reduced the exploitation of the poorer classes and now it is the turn of the unorganised, servile, middle class. Pulling its forelock before its masters is not saving it.
very good start to what I am sure is going to be an excellent series. Can't wait!
About status envy. As much as I like de Botton, I even more like to remember Charlie Munger, who posited it is not inequality that poisons society as much as it is envy. I do feel that the rise in conspicuous consumption is an evil last found to the present extent 100 years ago.
There are large unpaid externalities here, hence I think it was a major policy mistake in many countries such as Germany to actually make to purchase of status symbols such as large SUVs easier, e.g. by allowing them to be offset from income taxes.
Apart from that, what ails young folks more than status anxiety is housing. Artificial scarcity on the one hand, and not building public housing despite the historic, generational opportunity of ZIRP: if I was young, and the governments had done that to me, I'd surely feel shafted, and vote accordingly.
Imposing tariffs in 19th or early 20th century is very different from imposing it in 21st century, as american manufacturing was still in development so it is arguable that protecting the nascent industry, even if for consumers it would be bad first but good over the long run, was understandable, as this was the strategy that got england to lead the first industrial revolution and was copied by the rest of europe, and they also industrialised that way. Now that usa is the dominant force, it is bad to impose tariff because fair and open trade is great for those that already developed their industry and positioning on the global trade.
This is going to divide the readership! Remember folks, discussion is good!!
I know. But we need to discuss these things because this creates better outcomes than just living in an opinion bubble with nor criticism allowed.
Very clearly written with a simple yet powerful point: We're all doomed (in the near future at least).
Ok, that is a bit harsh. I didn't mean to come across that apocalyptically.
Definitely a personal 'glass almost empty' reading of the piece and I totally accept the piece itself isn't doom-mongering.
On regulation: no one disputes the necessity of traffic laws, criminal courts, or laws protecting property rights, for example. Ditto government control over business, the economy and life generally. It’s is a question of degree and of kind. In this sense, government is a “necessary evil”; we try to limit its influence, but recognize that government in its various forms and iterations can’t be altogether dispensed with.
Labour anxiety and discontent: there’s no way around the fact that maximizing profit is the essence of capitalism. So the relative “impoverishment” of labour is inevitable. The trickle-down wealth effects of capitalism plus the political organization and power of labour have diminished the degree of impoverishment (relative to wealth corporate elites), but I suspect that when the middle class starts feeling the pinch, things get iffy for the so-called “establishment”. Will Rooseveltian concessions have to be made? Perhaps.
I completely agree, Regulation is a matter of degree. And next week I will write about what happens when liberalism goes to far and flips into extreme libertarianism. I am a classic liberal and that means I am skeptical of too much regulation. But no regulation is also bad. We have to find the right balance and that is what these discussions are all about.
I also agree that the point of capitalism is to employ capital in the most profitable way possible. But I prefer JEnsens enlightened shareholder maximisation where you try to maximise shareholder value in the long run and that means not bleeding out your employees or nature or your local communities. Because in the long run that will backfire spectacularly. Oddly, this morning on my way into work, I hear a stat in a p[odcast that I am not sure is real, but if it is it is scary. On the podcast it was claimed that in the 190 years between 1759 and 1947 the GDP per capita of India was unchanged. For 190 years of British colonialism the East India Company stripped the country bare. As I said, I haven't fact checked that number...
India: where my Scottish great-grandparents made a fortune in the Indigo business. They put my grandfather and all his brothers in all the “best” schools, Sunningdale and Eton, with the vain hope of becoming part of the British establishment, as in the Peerage. Money in and of itself, is never enough. Re the colonial bit, the idea was that British investment improved life, on the whole. Still much-disputed!
Kindly Capitalism: even Charlie Marx had good things to say about Capitalism. The big question is whether or not, in the long run, profit trumps (pun intended) social well-being or perhaps human survival itself. I say this while confessing (probably an exemplification of my bad faith or some kind of contradiction) that I love markets, money, and my cresature comforts.
The India GDP figure (and varitions on the same theme eg India's share in world GDP for same/similar times) is often mentioned, but never attributed.
Whenever I hear it I always mentally discount whatever the speaker is saying.
Of the many bad things about colonialism, I don't know why this factoid (fictiontoid??) has become so widespread when there are others which are verifiiably true and show much worse actions by the rulers.
I have learnt that querying the figure angers people and risks all sorts of ad homonim allegations.
That said, I would like to know the details of who/where the figures can be obtained.
The highest quality data source (if there is such a thing as high quality data for GDP in the 18th century) is the Maddison Project Database at the University of Groningen: https://www.rug.nl/ggdc/historicaldevelopment/maddison/releases/maddison-project-database-2020?lang=en
I just downloaded the 2020 edition and looked at real GDP per capita in 2011 US Dollars. It says India's GDP/capita in 1750 was $1,068 in today's dollars. In 1947 it was $985. That is a drop of 8% in 190 years. I don't know what inflation was over the period but in real terms it implies a decline of 0.04% per year in GDP/capita.
thank you for this. It is sobering. That said, I assume the numbers for Belgian Congo and Dutch Java would be even worse.
Thinking about status anxiety: could there be a connection with the popularity of bitcoin, even more, altcoins?
You bet!
I am not nodding my head JK, I am shouting here, here. Capitalism is a wild animal. Powerful, agile, capable of great feats, but in need of a strong chain around its neck. Leave it alone and it will eat you alive without the slightest pity. Look how it was in the age of slavery. Organisation and improvements in education have reduced the exploitation of the poorer classes and now it is the turn of the unorganised, servile, middle class. Pulling its forelock before its masters is not saving it.
very good start to what I am sure is going to be an excellent series. Can't wait!
About status envy. As much as I like de Botton, I even more like to remember Charlie Munger, who posited it is not inequality that poisons society as much as it is envy. I do feel that the rise in conspicuous consumption is an evil last found to the present extent 100 years ago.
There are large unpaid externalities here, hence I think it was a major policy mistake in many countries such as Germany to actually make to purchase of status symbols such as large SUVs easier, e.g. by allowing them to be offset from income taxes.
Apart from that, what ails young folks more than status anxiety is housing. Artificial scarcity on the one hand, and not building public housing despite the historic, generational opportunity of ZIRP: if I was young, and the governments had done that to me, I'd surely feel shafted, and vote accordingly.
Imposing tariffs in 19th or early 20th century is very different from imposing it in 21st century, as american manufacturing was still in development so it is arguable that protecting the nascent industry, even if for consumers it would be bad first but good over the long run, was understandable, as this was the strategy that got england to lead the first industrial revolution and was copied by the rest of europe, and they also industrialised that way. Now that usa is the dominant force, it is bad to impose tariff because fair and open trade is great for those that already developed their industry and positioning on the global trade.