Capitalism and a flaw

Inmendham points out that capitalism is mostly a good system but has a small number of fatal flaws. He says that if you were to fix those flaws then there would be no need for people to push for socialism.

The flaw I saw him identify is that of inherited (unearned) wealth. He says that you can't have an economic system based on merit and earned wealth and competition, i.e. the idea of capitalism, and then have that same system amassing huge piles of unearned wealth (the rich giving their fortunes to their children). So his idea is that if we abolished inheritance or at least the extreme excesses of it, this would represent an important fix for capitalism's problems.

What do you think?

I personally like the idea of people being able to gift what they have earned to their children, because it is their right to do so, it is their wealth and they should be able to use it to benefit their own family if they want to. But what if that same person who gifts it to his children never actually earned it, what if he also inherited it? Of course a person must be a good manager of existing wealth or else that wealth will dry up.

So the idea is that people either inherit something when born into this life, or not. If they inherit something they have an edge, if not then they do not have an edge. So this is like a lottery similar to genetics or any other random or semi-random factor in life. We can't control all such factors but we could control to limit for inheritance. That way every person would need to work and earn for himself just the same as any other. But you would still have "unfair" advantages since children of rich people would have better lives and better educations and all that, compared to children born to poor parents, generally speaking of course. So then do we need to remove that "unearned privilege" too? Take kids away from parents and force them all to undergo as much of the same experiences and opportunities as each other, regardless of their parents?

So there is a slippery slope here. The idea of a merit-based system is good, but this system rests upon a general scheme of all players being more or less equally able to play the game. If you have a merit-based system where the game is rigged entirely for a small number of people and against everyone else, that isn't really merit-based. But on the other hand you can't entirely control for unearned factors, and if you try to control for them eventually you start getting into irrational territory of removing children from their parents, saying parents can't pay for their kids to go to better schools, or eat better food, etc.

It is just a balancing act, and capitalism is less about an extreme merit-based system with no unearned privilege as it is about balancing extremes out somewhere in the middle. We want merit-based competition and we want people to need to earn what they have, but we also realize that life comes with many natural advantages and disadvantages, and if you were theoretically to level all of those out then there would be no meaning to competition or merit anyway. If everyone is the same, what the fuck does it mean to compete or earn anything?

So merit-based is actually a kind of excess built upon the already existing inequalities of life, from genetics to environment to life experiences to who your parents are to who their parents were, to random natural disasters happening or not, etc. etc. etc. Such things are life. So merit-based is just an excess resting atop this fact of life, trying to exert some downward pressure to keep things as balanced toward the middle as possible. Not to erase individual differences in natural advantage or unearned non-merit-based wealth but to try and put some reasonable limits around it so that as many people as possible have a chance to maximize whatever their own life situation and natural advantages might be. But life will always have winners and losers, unless we move to some communist system where everyone is a loser.. except not even that can exist, because the ruling class will always sit on top of any communism and amass all power and wealth to itself.

The key rests in the idea of ownership and wealth-control -- the notion of property. Communism and people like Inmendham don't understand that property is a fact that can never be removed. Communal property is a myth, state-owned property is what happens and some small number of people end up contributing to it or managing it, or extracting the benefits from it. Plus on the philosophical side we actually need clear owners of property, otherwise property loses the ability to be upkept and managed well due to the diffusion of responsibility for it, and then also on the other side when that property produces gains of some kind there is no clear means of determining to whom those gains should go, so everyone wants them, so they are quickly used up and no one really gets anything from the property and the property is quickly depleted.

So the entire idea Inmendham is exploring here is actually based on a misunderstanding of what property is and means. He assumes that property is some kind of detached amorphous thing of its own, without fundamental link to the people who created, manage, control, or use it. But I might be in favor of inheritance taxes that scale up progressively, as another way of trying to assert that balance toward the middle that I mentioned. Not a total ban on inheritance but more like a means to keep it within some kind of limits. Of course the problem with that is what are those limits and who gets to decide; well it doesn't need to be an exact science, just use a progressive tax levied upon inheritance and you could moderate the problem. But even here we have more problems introduced, like the unfairness of those taxes, who get to decide how those tax money are used, what disincentives this creates against people who want to leave things for their children but know much of it will be taxes away, so a kind of disincentive against merit. But on the other hand, with no inheritance tax at all you quickly end up with a small number of super-billionaires passing on their inherited wealth generation to generation and this ends up controlling the entire economy, sort of like the system we have right now.

So just pick a number and see how it works. 50% inheritance tax, with an extra 1% for every 5 million dollars that is being passed on. Then if you want to pass on 10 million dollars you pay 52% tax, if you want to pass on 100 million dollars you pay 70% tax. Something like that. I don't know the specifics, but it doesn't need to be an exact science. 70% tax on 100 million dollars leaves 30 million dollars that you can pass on to your kids... that's no small amount. Or maybe it is, context matters here. Since taxes like this are inherently unfair, it isn't a great solution. But no taxes or very low taxes on inheritance at all is also not a great solution since this leads to a wealth-class that controls everything and this destroys the merit-based nature of the system.

Pretty much the system is fucked no matter what. As soon as a system or society becomes rich enough, reaches a certain threshold, relative to the number of people and average wealth of people, there is no real solution for how to keep the system merit-based. And a merit-based system will inevitably produce massive wealth which will inevitably begin to concentrate at the top, which will inevitably weaken and undermine the merit-based nature of the system, which will cause the system to collapse.

Lol... I think I just found an economic principle that dooms all societies. I see no way around this. A good system produces enough of its own excess that eventually it precludes what is good about itself, as the weight and consequence of that excess strangles the system itself. This reminds me of alternating k-selection and r-selection over generations in the reproductive methods of species or just in nature generally. Similar natural laws.... which we cannot break. We are fucked, lol.

I think that the government taking way possessions from a family when the deceased wanted his children to be taken care of with it is Socialism.
I think that all that we can truly trust is what we get from our parents.

Capitalism wasn't invented by a government, a government mostly stands in the way by usurping its cashflow. Capitalism is a delicacy of tenderly cultivated  families grown refined enough to trade not in violence but in wealth. Venice was its first form, the delicacy of capitalism is expressed in its gondolas and everything about that city.

Does he propose to take the capital from the people, give it to the state, and then redistribute it by a bureaucratic system of reward for obedience?
This is basically the Soviet Union.

Life is not fair, it is certainly not going to be more fair when you use arms to disprivilege long cultivated families.
Family, for all its dangers, is a product of love. The modern state, which is a product of much lesser drives, must be kept at bay.

I think that Socialism may be defined as the will to power of the State. Specifically its will over the rogue life form called human which dares to enrich itself, wort of all to the purpose of its progenies enjoyment, so that true freedom may be experienced by some lucky soul. The logic of the State as a body in which the human is a cogwheel in a Harvester ploughing through flesh and bone to "keep the playing field even".
Capitalism never allows for a complete and undivided state, as we see so well expressed in America, which is always blissfully removed from such unity as characterized in foam mouthing Nazi Germany and the comatose European Union.

Never One!
The very notion that a human needs the state to be dignified is sabotage of humanity at the core. And yet it is hard to figure out a way to do without it;
after all we have evolved along with the state. But this hypocritical marriage is now reaching its ultimate consequences.

I think that the main true danger in the world that isn't a disease is the power of the government to take things away.
That sometimes its reasons are to give back is moot. It simply must not be able to compel tributes from free born people.
We will ontologically be less than animals until we resolve this, and it will show in how we butcher each other and animals.

Systemically speaking the only justified function of government is to prevent other government from shooting out of the ground.
Its rule commands simply that no one rule rules.
In this climate humans can find ways to agree in terms of proactive valuing rather than in gametheoretical posturing in the shadow of Egypt.

We all came as slaves out of Egypt.
All of modernity and all its citizens are Pharaoic cattle.
The idea that humans should be centrally governed is Egyptian. Ten thousand years ago they built this most massive pyramid to command Unity.

Who knows whom they had managed to wipe out before they undertook that triumphistic project.

Or maybe the pyramid was a bunker.

haha. yeah man. i like that.

i’m thinking of posting some of this on Inmendham’s page under the video where i saw him saying this about capitalism and merit. probably a waste of time but could be funny.

so we reverse the fundament premise he and communists operate by; they say “equality”, “fairness”, “same opportunities”, we say: life ain’t work that way son. so the idea of capitalism being about equality of opportunity is a myth. i’m not equal in opportunity to become a neuro surgeon compared to someone else who has better genes for stable hands than i do. i’m not equal in opportunity to become a rock star when i’m not born into genes and circumstances that privilege me with extreme musical talent and a drive and passion to become a rock star. i might “want” to be a rock star but without some advantage and a lot of drive-passion it won’t happen.

so the proliferation of differences as various advantages and disadvantages toward every single thing and outcome... that’s capitalism. the self-valuing respect for this basic setup without authoritarian Oneness. but i’m also not an anarchocapitalist, i don’t think that works. i like minimal state meant to protect basic things like a border and from crimes, i don’t need a state to make the world safe and fair and equal.

a family that cares for and provides for its children actually deserves to have its children survive more than a family that doesn’t. sure that isn’t the fault of the kids. that’s the harder truth to swallow here.

Excellent. Yeah I dont think anarcho-captialism is sufficient to make things work.
I agree that with what we have and know we need a state.
But specifically we need the state that has the US Constitution, where the primary legislation prescribes limits to the states powers.

The rights to bear arms, congregate, express views are powerful restrictions of the power of the state. I think therein lies the key.
Once we decide what we do absolutely want a state for, we can carve that out by prohibiting any other functions. I guess thats what they figured and how I would figure if we had to revisit the Constitution, make it resilient to the modern day state.

So the fundamental relationship between law and state power is a kind of mirror, almost negation. No, it is more complex, it is like a triadic mirror; law, state, and power. Power is lawless, thus causes laws as resistances, and between this the state is a logos. It is likely always going to be ambiguous, a shadow play at the core of it - I wonder if this is what Greek state religion was about, to demonstrate the fundamental discord of forces so as not to be fooled. Zeus isn't exactly a god who lulls you to sleep.

the US Constitution is one god, globalism is another. and they are at war.

i feel a desire for Odin’s Blood.

Haha. Dude I can't even risk drinking that in slaveland, I get into fights even on normal liquor.

Capable wrote:

the US Constitution is one god, globalism is another. and they are at war.

Eventually Europe could learn from the US. It has to or become a Caliphate/Socialist Hailstate.

why the rest of the western nations never adopted a similar Constitution as the US has will always be beyond me.

Weakness.

The US constitution came as a result of two truly vital strengths battling each other within the same teleological frame; that is rare.

World War 2 was a degenerate affair, not a theater of European heroism at all.

Weakness before government. Cowardice, meekness, obedience, thus hypocrisy and meanness between citizens. Strength was never celebrated in a healthy way, not since Rome began to decay.

vs

Free born people carry themselves differently.