Remarkl
2 min readSep 22, 2021

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The economic and political machines are components of a single machine. Politics is collective bargaining continued by other means. Marxists and laissez-faire capitalists each try to capture that bargaining process so that their side always "wins," but that's just defection in a Prisoners' dilemma; if one side wins, both sides lose, because workers need someone to organize their efforts, and capitalists need customers.

This last point is crucial: Jeff Bezos is sooooo rich because sooooo many people can afford to use his services. His wealth is the discounted present value of the cash flows coming from his companies. The more customers he has, the more wealth he has. If he uses that wealth to disadvantage his customers economically, he cuts his cash flow. In other words, what's good for America - including well-paid jobs, a social safety net, a strong infrastructure, and confidence in our voting systems - is good for Amazon.

The big variable is scarcity vs. abundance. If Jeff were in the unicorn business, it wouldn't matter how many customers he had, as the supply of unicorns is, as the economists say, inelastic. Scarcity makes widespread wealth impossible, because scarcity prevents widepread distribution of what money can buy.

Thus, the great positive externality of capitalism is its relentless war on scarcity. The more stuff a capitalist can make, the greater the discounted present value of the cash flows arising from it, provided, that the political machine can put purchasing power in the hands of future customers. The political machine is the only machine that can do this, because competition makes unilateral adjustments too risky. So businesses and customers, in Congress assembled, must negotiate how the customers will get just enough money to buy all of what the capitalists can produce.

As it happens, businesses tend to underestimate their own capacity - otherwise they'd all be pushing for a UBI right now - so we get resistance to increasing purchasing power until some sort of tectonic shift occurs, usually after the mismatch between capacity and purchasing power causes a financial crisis. That's how homo not-so-sapiens rolls.

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