Disclaimer: politics is really hard and really controversial, and Iâm about to give a political opinion.
I think the evidence is already overwhelming that capitalism is suboptimal. The difficulty isnât in providing evidence for that, itâs in providing evidence for a specific superior system. No matter how clever you are, you canât write down a system for the organization of an entire world economy and know with perfect accuracy what would happen if that system were put into place. The world is too complicated. This isnât really a problem with anti-capitalism, but rather a problem with non-reformism. EAâs have differing political opinions, although they cluster around social liberalism/âsocial democracy (if the polls are to be believed), but theyâre universally reformist because reform is just a way safer bet.
For example, itâs generally uncontroversial that markets lead to inequality of wealth, and if youâre a utilitarian you should consider unequal distribution of wealth to be suboptimal (in a vacuum at least), because of the principle of diminishing marginal utility. In fact if you believed that market outcomes were axiologically perfect, you wouldnât be an effective altruist, because in order for that to be the case all dollars spent would have to have an equal effect on global utility. So letâs say youâre an EA looking at the cause area of âwealth inequalityâ and you brainstorm some solutions:
Organize a large group of revolutionaries to overthrow a government and institute a one party state that appropriates private property and runs the economy via a central plan.
Institute a higher progressive income tax, using the revenue to fund more social programs, a universal basic income, and public housing.
Organize a large group of revolutionaries to overthrow a government and institute a stateless gift economy that relies on negotiated coordination between firms to distribute goods and services according to need.
The empirical data doesnât like the first idea. Itâs been tried, and it successfully reduced inequality, which was the goal. In 1980, the GINI coefficient of the USSR was .29, which is pretty equal! But the country was plagued by political problems, mostly a result of a lack of democracy, which lead to mass executions, ethnic cleansing, and other things but I think weâve proved the point already. The same approach led to similar problems elsewhere.
The second idea has also been tried, and it also successfully reduced inequality. The country with the highest income tax in the world is Belgium, which⌠okay thatâs a bad example because they also committed mass executions and ethnic cleansing. But the second highest income tax in the world belongs to Finland, which has a GINI coefficient of .26, even lower than the USSR! And itâs a stable democracy with a very high standard of living. Other countries with mixed market economies and strong welfare states achieved similar results. This seems like the standout intervention so far, AND it requires the least effort!
The third idea has never been tried on a large scale, so there is no empirical data. You could give arguments for why it would or would not work, but it would ultimately all be speculative. Iâm not sure what kind of non-empirical data would convince me that the non-speculative opportunity cost of revolution is worth the speculative benefits. Also, I have extremely strong suspicions that it wouldnât work because of things like price signals and rule of law.
The odds that the current global economic status quo is better than any possible alternative is 0%. However, constructing a system that performs better is very difficult. If it were easy, someone would have done it by now. There are some very interesting models of socialist economies. I find the Cockshott-Cotrrell model really interesting, I really like the Lange-Lerner model. I donât like Parecon. But can these models perform as well as or better than the current world economy? Predicting the behavior of the capitalist economy is infamously difficult, and we have hundreds of years of empirical data to work with. Predicting the behavior of an economy that doesnât even exist yet is impossible. Itâs too complicated. I canât predict what would happen if the whole world adopted the Lange-Lerner model, but on priors, I think that any system made âby handâ is automatically at a loss against a system with hundreds of years of tweaks, regulations, and real life trial-and-error adjustments to its known failure modes.
So I guess the only thing that could convince me to agitate for the founding of a specific radically different system would be if that radically different system already existed and was superior according to my value system. Previous attempts at socialist economies produced low inequality, low unemployment, and decent growth, which is cool and all, but the Nordic model can do exactly the same thing but with more consumer goods, more democracy, and without the shortages and surpluses that plagued the soviet bloc. I am aware that this approach means that there are utopias in possibility space that I am actively ignoring, but I think the risk-neutral approach is to do exactly that.
EAâs of different political opinions than my own likely have different justifications.
I think youâre absolutely right about the evidence strongly supporting capitalism being less than ideal from a utilitarian perspective but also not supporting any putative drop in replacement system (and providing a lot of evidence that revolutions are a terrible idea in most places). As Churchill once said of Parliamentary democracy, itâs the worst system apart from all the others that have been tried.
But I would think for critics of capitalism there are plenty of feasible options short of completely eliminating it. The Nordic model is (for better and for worse) notably less capitalistic than the United States model, for example. Many well established problems with market economies like externalities and lack of public goods (and utilitarian issues like wealth inequality) are feasibly solvable to a much greater extent than under the present system, and seem to fall into the category of âsystem[s] involving power structures for which there is a lot of attention on the left but almost no attention within EAâ
I think there are other reasons why EA doesnât get involved (there is has a lot of attention as a problem already, achieving change is extremely difficult and costly, and given uncertainty and different starting premises EAs are highly unlikely to agree with each other. though the latter hasnât stopped them exploring other fields). Iâm not sure getting more actively involved in the politics of economic distribution would actually improve EA as a movement, pursue the ârightâ goals or achieve any success though.
Thank you so much for your comment! I think this is roughly the view I held before writing this post, although you did it better than I could have.
There are two issues that come to mind.
Is it not also the case that these social democracies and their welfare states benefit from, and perhaps even rely on for their high standard of living, the suffering of others? Whether thatâs suffering of others in the past (colonialism), present (think horrendous labor standards at the bottom of Western supply chains), or future (extractivism/âgeneral profit over planet markets often effectively take welfare from the futureâs poor and give it to the presentâs rich). Finland would be much poorer if it were not part of a larger global market in which a lot of the existing wealth was accrued via oppression. Bottom line: if it is the case that social democracies with high standards of living can exist only by distributing fairly among its citizens wealth which was partly created unfairly (even if not directly by the Finns but by someone else and then paid for by Finns, e.g. cobalt mining in Congo), then itâs not clear to me that a world in which every country becomes like Finland is just. And perhaps it is not even possible, in that the extraction of resources necessary to give the entire world a standard of living similar to that of European social democracies may well be unsustainable (e.g. it seems very unlikely 88% of the world could own an electric car as is the case in Norway).
If we retroactively apply the idea that radically different system would have to exist and be superior according to your value system, we seemingly miss out on most of the worldâs great cases of moral progress. Athenian democracy, the abolishment of slavery, the introduction of voting rights for women, perhaps most cases of great moral progress came at the expense of a status quo for which much more evidence was available. Could you not make the case that a similar move would be necessary to end what we might call global apartheid?
I donât draw precisely the same conclusions as you (Iâm somewhat less reluctant to entertain strategies that aim to introduce untested systemic changes on a relatively large scale), but I really appreciate the clarity and humility/âtransparency of your comment, and I think you outline some considerations that are super relevant to the topic of discussion. Thanks for writing this up :)!
Disclaimer: politics is really hard and really controversial, and Iâm about to give a political opinion.
I think the evidence is already overwhelming that capitalism is suboptimal. The difficulty isnât in providing evidence for that, itâs in providing evidence for a specific superior system. No matter how clever you are, you canât write down a system for the organization of an entire world economy and know with perfect accuracy what would happen if that system were put into place. The world is too complicated. This isnât really a problem with anti-capitalism, but rather a problem with non-reformism. EAâs have differing political opinions, although they cluster around social liberalism/âsocial democracy (if the polls are to be believed), but theyâre universally reformist because reform is just a way safer bet.
For example, itâs generally uncontroversial that markets lead to inequality of wealth, and if youâre a utilitarian you should consider unequal distribution of wealth to be suboptimal (in a vacuum at least), because of the principle of diminishing marginal utility. In fact if you believed that market outcomes were axiologically perfect, you wouldnât be an effective altruist, because in order for that to be the case all dollars spent would have to have an equal effect on global utility. So letâs say youâre an EA looking at the cause area of âwealth inequalityâ and you brainstorm some solutions:
Organize a large group of revolutionaries to overthrow a government and institute a one party state that appropriates private property and runs the economy via a central plan.
Institute a higher progressive income tax, using the revenue to fund more social programs, a universal basic income, and public housing.
Organize a large group of revolutionaries to overthrow a government and institute a stateless gift economy that relies on negotiated coordination between firms to distribute goods and services according to need.
The empirical data doesnât like the first idea. Itâs been tried, and it successfully reduced inequality, which was the goal. In 1980, the GINI coefficient of the USSR was .29, which is pretty equal! But the country was plagued by political problems, mostly a result of a lack of democracy, which lead to mass executions, ethnic cleansing, and other things but I think weâve proved the point already. The same approach led to similar problems elsewhere.
The second idea has also been tried, and it also successfully reduced inequality. The country with the highest income tax in the world is Belgium, which⌠okay thatâs a bad example because they also committed mass executions and ethnic cleansing. But the second highest income tax in the world belongs to Finland, which has a GINI coefficient of .26, even lower than the USSR! And itâs a stable democracy with a very high standard of living. Other countries with mixed market economies and strong welfare states achieved similar results. This seems like the standout intervention so far, AND it requires the least effort!
The third idea has never been tried on a large scale, so there is no empirical data. You could give arguments for why it would or would not work, but it would ultimately all be speculative. Iâm not sure what kind of non-empirical data would convince me that the non-speculative opportunity cost of revolution is worth the speculative benefits. Also, I have extremely strong suspicions that it wouldnât work because of things like price signals and rule of law.
The odds that the current global economic status quo is better than any possible alternative is 0%. However, constructing a system that performs better is very difficult. If it were easy, someone would have done it by now. There are some very interesting models of socialist economies. I find the Cockshott-Cotrrell model really interesting, I really like the Lange-Lerner model. I donât like Parecon. But can these models perform as well as or better than the current world economy? Predicting the behavior of the capitalist economy is infamously difficult, and we have hundreds of years of empirical data to work with. Predicting the behavior of an economy that doesnât even exist yet is impossible. Itâs too complicated. I canât predict what would happen if the whole world adopted the Lange-Lerner model, but on priors, I think that any system made âby handâ is automatically at a loss against a system with hundreds of years of tweaks, regulations, and real life trial-and-error adjustments to its known failure modes.
So I guess the only thing that could convince me to agitate for the founding of a specific radically different system would be if that radically different system already existed and was superior according to my value system. Previous attempts at socialist economies produced low inequality, low unemployment, and decent growth, which is cool and all, but the Nordic model can do exactly the same thing but with more consumer goods, more democracy, and without the shortages and surpluses that plagued the soviet bloc. I am aware that this approach means that there are utopias in possibility space that I am actively ignoring, but I think the risk-neutral approach is to do exactly that.
EAâs of different political opinions than my own likely have different justifications.
I think youâre absolutely right about the evidence strongly supporting capitalism being less than ideal from a utilitarian perspective but also not supporting any putative drop in replacement system (and providing a lot of evidence that revolutions are a terrible idea in most places). As Churchill once said of Parliamentary democracy, itâs the worst system apart from all the others that have been tried.
But I would think for critics of capitalism there are plenty of feasible options short of completely eliminating it. The Nordic model is (for better and for worse) notably less capitalistic than the United States model, for example. Many well established problems with market economies like externalities and lack of public goods (and utilitarian issues like wealth inequality) are feasibly solvable to a much greater extent than under the present system, and seem to fall into the category of âsystem[s] involving power structures for which there is a lot of attention on the left but almost no attention within EAâ
I think there are other reasons why EA doesnât get involved (there is has a lot of attention as a problem already, achieving change is extremely difficult and costly, and given uncertainty and different starting premises EAs are highly unlikely to agree with each other. though the latter hasnât stopped them exploring other fields). Iâm not sure getting more actively involved in the politics of economic distribution would actually improve EA as a movement, pursue the ârightâ goals or achieve any success though.
Thank you so much for your comment! I think this is roughly the view I held before writing this post, although you did it better than I could have.
There are two issues that come to mind.
Is it not also the case that these social democracies and their welfare states benefit from, and perhaps even rely on for their high standard of living, the suffering of others? Whether thatâs suffering of others in the past (colonialism), present (think horrendous labor standards at the bottom of Western supply chains), or future (extractivism/âgeneral profit over planet markets often effectively take welfare from the futureâs poor and give it to the presentâs rich). Finland would be much poorer if it were not part of a larger global market in which a lot of the existing wealth was accrued via oppression. Bottom line: if it is the case that social democracies with high standards of living can exist only by distributing fairly among its citizens wealth which was partly created unfairly (even if not directly by the Finns but by someone else and then paid for by Finns, e.g. cobalt mining in Congo), then itâs not clear to me that a world in which every country becomes like Finland is just. And perhaps it is not even possible, in that the extraction of resources necessary to give the entire world a standard of living similar to that of European social democracies may well be unsustainable (e.g. it seems very unlikely 88% of the world could own an electric car as is the case in Norway).
If we retroactively apply the idea that radically different system would have to exist and be superior according to your value system, we seemingly miss out on most of the worldâs great cases of moral progress. Athenian democracy, the abolishment of slavery, the introduction of voting rights for women, perhaps most cases of great moral progress came at the expense of a status quo for which much more evidence was available. Could you not make the case that a similar move would be necessary to end what we might call global apartheid?
I donât draw precisely the same conclusions as you (Iâm somewhat less reluctant to entertain strategies that aim to introduce untested systemic changes on a relatively large scale), but I really appreciate the clarity and humility/âtransparency of your comment, and I think you outline some considerations that are super relevant to the topic of discussion. Thanks for writing this up :)!