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PaperclipPerfector  3d ago (text post)   15049 thread views

Culture War Roundup for the week of September 16, 2024

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The beauty of capitalism is that it usually (though not always) aligns incentives in a positive way because the people making decisions have skin in the game.

Doesn’t the whole concept of externalized costs undermine this claim?

I’m don’t think it’s a specific failing of capitalism but the insulation of decision-makers in business from consequences seems alive and well to me.

Doesn’t the whole concept of externalized costs undermine this claim?

Capitalism isn't utopian, and most capitalists are willing to let the state address its inadequacies. You acknowledge that this isn't solely a failure of capitalism, but isn't the externalization of costs even greater in bureaucracy or democracy as a whole?

I don't follow the question really as I don’t see bureaucracy or democracy as the same type of thing as capitalism.

All I’m saying is whatever its virtues I don’t see how capitalism somehow leads to more decision makers having skin in the game. Would you be willing to flesh out an argument?

Allow classic Milton to get you into the basics with only a sound bite.

Doesn’t the whole concept of externalized costs undermine this claim?

No of course not. The existence of exceptions doesn't negate the general rule. I thought about bringing up externalities but it felt long winded. So I just said (though not always) and hoped that would cover it.

Capitalism is the worst system except for all the other ones, yadda yadda.

What is your evidence of the general rule?

To make sure I understand, you’re saying “in general, capitalism leads to decisions made by people with skin in the game,” right? Would you be willing to flesh out an argument a little more? I just don’t see why that’s true.

At the risk of being basic, here's a simple example. Let's say I own a restaurant making chicken sandwiches. I have skin in the game. If I serve bad sandwiches at high prices, I will lose money and then go out of business.

On the other hand, consider the DMV. No one gets promoted or fired based on performance of the DMV. People are required to use their services, and they can't go out of business. No one has any skin in the game.

Chicken sandwich restaurants are generally good. DMV's are generally bad.

Wouldn’t the same be true of a worker’s coop? This seems more like an example of markets providing the right incentives than capitalism. Many group the two together; not trying to nitpick, it’s fine if you want to group them together, just want to make sure I’m clear.

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