They don't matter because we've finally created a world where the modern peasant is as economically irrelevant as any other outdated farm or industrial equipment. If you opened a printing press staffed by scribes with fountain pens, you'd just lose money. Same goes with hiring your modern peasant; they're simply incapable of producing net economic value thanks to centuries of engineered optimization.
If you have kids, even if your partner and you are both high IQ, you're statistically more likely than not to add to this mass of economically unviable peasants unable to be top-tier in the global economy of tomorrow. Maybe that's partly why birthrates in the first and second world have plummeted, as we all kind of know this, if only tacitly.
I don't think this is the case. I think it's about wealth inequality and the resulting centralization of power. When you concentrate all the wealth to such a small number of people, the only thing they can do with it is to buy more property. They just can't consume that much. They buy property, which means it gets more expensive for the regular people, so they are no longer able to afford it. That then means they must pay rent for everything to the extremely wealthy. That causes regular people to have less money for consumption, and the rich will use the money to buy even more property.
This cycle continuously makes the rich richer and the poor poorer, and that's what's causing economic irrelevance of the masses. They can no longer afford to buy services from each other, because the rich are sucking all the wealth up and not using it to consume/buy services from regular people. Sure, they consume some luxury goods, but not enough to employ the masses. We need a huge wealth redistribution to enable regular people to buy services from each other again and make themselves relevant to each other.
That at the end is a really strange take, providing a complex reason for what has a very simple explanation. The birthrates are plummeting because:
* the process of pregnancy, giving birth and everything postpartum is incredibly taxing to a woman's body, and it's not surprising that women choose not to go through it now that they have a choice.
* our economic system actively punishes people who do choose to have kids.
* our more and more individualistic societies make the upbringing more of a chore than it used to be. It takes a village, but the village is gone.
> our economic system actively punishes people who do choose to have kids
This is likely true in USA, but false in many other countries.
There are many countries, e.g. in Europe, where people with many children have disproportionate advantages, because the state takes money from the people with few or no children and gives the money to the people with many children.
Moreover, there are adequate protections for parents during pregnancy and during the following time after birth.
Nevertheless, these measures had very little effect on the birth rates, except inside some restricted segments of the populations, which had a tradition of depending on such subsidies. It may be argued that for a majority of the populations these financial measures actually diminish the birth rates, because they take money mostly from the young people not having children yet, which reduces their revenues, which makes them even more reluctant to attempt to have children, due to the fear that they will not have adequate revenues to support them.
Few modern people, when confronted with the fact that their revenue would be insufficient for raising 2 children, would reach the conclusion that the solution to this problem is making 6 children, in order to get enough state aid. Most will choose to make only one child or no children.
> There are many countries, e.g. in Europe, where people with many children have disproportionate advantages, because the state takes money from the people with few or no children and gives the money to the people with many children.
No, the state "takes money" from the people with few or no children to ensure that there will be a functioning society even when those people can't contribute to it themselves any more.
> Moreover, there are adequate protections for parents during pregnancy and during the following time after birth.
While that is true, the pure biology is not something you can fully protect from (yet). There are still women for whom a childbirth turns fatal.
> Nevertheless, these measures had very little effect on the birth rates,
Because the measures aren't enough. For example, even despite all the measures, I end up paying € 1200 a month for about 40 hours of childcare, for two kids. Per month. That's a mortgage level of expense. And that's because they go to school now. Before that it was over € 2000, net.
> It may be argued that for a majority of the populations these financial measures actually diminish the birth rates, because they take money mostly from the young people not having children yet, which reduces their revenues, which makes them even more reluctant to attempt to have children, due to the fear that they will not have adequate revenues to support them.
This isn't true. Young people earn less than older people, and thus pay less taxes. What makes young people reluctant to have children are unnaturally high housing costs, not the subsidies towards parents.
>There are many countries, e.g. in Europe, where people with many children have disproportionate advantages, because the state takes money from the people with few or no children and gives the money to the people with many children.
Which countries are those?
I come from one of the countries with the worlds best support for parents, Sweden, and even there it's an economic burden to have children.
> There are many countries, e.g. in Europe, where people with many children have disproportionate advantages, because the state takes money from the people with few or no children and gives the money to the people with many children.
Can you link to this tax that is only levied on "people with few or no children?"
You've missed the main reason: children were always a pension mechanism, and today we have socialized (, and private) pensions. There's no need to have children if you think, in the end, the state (, or you bank account) will look after you.
* take it from a young parent that also knows a lot of other young parents - that's really not the reason. We are older millennials, and none of us expects to have a liveable pension anyway, we all save separately for old age if we can.
* it's not the "state" that is supposed to look out for you, but your own money invested during the career. I see that money subtracted from my paycheck every month. I only want the state to provide stability and security so that money can be put to good use.
Birthrates are declining in places (like the US) that do not have socialized pensions. (Social Security is not that... secure. And regardless, it's existed much longer than the recent birthrate decline here.)
I think you're missing that people generally and innately want children, irrespective of "pension". If people aren't having children, it is because of sufficient negative incentives, not because of "pension".
People are not having as many kids. And we haven’t seen a significant uptake of other forms of child bearing either. Options such as surrogacy, etc haven’t risen as much, and while those may be expensive, neither has adoption.
So it’s not just the child bearing aspect, but the raising of a child that appears to be an issue as well.
These are all policy choices though. None of them are ordained by nature or inevitable.
Being alive is much more than being economically viable. This kind of economic thinking is alluring because it seems "objective" or "data driven" but it is really just an oversimplified model of the world. These models have long drifted from reflecting reality.
Think of how DJT won two elections despite what all the data said. The data did not reflect reality.
The idea that modern peasants exist or that they do not add to economic output certainly reflects the data. But the data is useless if it does not reflect reality.
Arguably, we've let metrics rule in the same way the Soviets optimized for steel and wheat production, but instead for pure economic market signals. Doing so, we see a market strongly signaling that it has a peasant surplus. Unfortunately for them, peasants are (presumably) conscious beings, so suffering ensues.
If the 2024 DJT win is to be interpreted as a peasant revolt against this system, perhaps it's one that is attempting to use the non-market force of government to create new Schelling points (mostly via protectionism) that meet libidinal (more in the Mark Fisher sense, less Lyotard) desires. Procreation is literally libidinal, after all, so we can see how powerful our system's market forces must be to completely override it.
Reminds me of an article by Yanis Varoufakis - a leftist economist / politician - I saw posted in an HN comment recently [1]. My interpretation of it was that the petrodollar effectively undermines middle class Americans by artificially inflating the dollar, undermining American workers with cheap imports and loss of jobs in favor of multinationals.
That argument makes a lot of sense to me. The importance of financial sectors are exaggerated. Ever increasing federal debt acts as a tax on other nations though that wealth doesn't goto the average American. It skews wealth to a few sectors. E.g. The economic data is correct but measures a distorted system.
> Their thinking [centrists] is hard-wired onto a misconception of how capital, trade and money move around the globe. Like the brewer who gets drunk on his own ale, centrists ended up believing their own propaganda: that we live in a world of competitive markets where money is neutral and prices adjust to balance the demand and the supply of everything. The unsophisticated Trump is, in fact, far more sophisticated than them in that he understands how raw economic power, not marginal productivity, decides who does what to whom — both domestically and internationally.
Oh, I see. Life is all about one's input into the global economy. Technology has rendered it simply impossible to conceive of a higher purpose than middle management in a large corporate. Finally someone with the answers!
For economically irrelevant peasants they get paid a lot. GDP per capita was $82,769 in 2023, up from $39,490 in 2003. Life can still be hard due to high property prices and the like but that's another issue really.
Birth rates in the first and second world have plummeted because the economics are disadvantaged to the point that most of the pipeline needed to create children has been shuttered. Agency has been stripped, and psychological differences in gender have been exploited towards a for-profit business model where there will be no children. Its the same thing the USDA uses in combating the screw-worm, but we call it online dating. If you only match up against people you aren't compatible with long term, you never get to the stage where you couple up and have children. Part of that is also financial security, and there is a biological wall where after a time you can't have children.
The concentration of production today has become one-sided, and lacks the ability for economic calculation. Price discovery for example has completely failed in a number of markets as a result of dark pools, and sieving of business into fewer hands through non-reserve debt issuance is occurring gradually but surely.
The socialist calculation problem defined by Mises seems to be occurring, few have noticed yet because the problem by definition is chaos with no differentiating features aside from the overall volume of chaos growing.
Statistics also really can't tell you anything about chaotic environments (stochastic environments). Islands of consistency within the 3-body problem as an example for the literature that applies.
> On occasion, there’s money left over to go out to a fast-food restaurant for a treat. The four kids usually split three $5.99 meals at Taco Bell (YUM +2.05%) or two $5 meals at McDonald’s (MCD +3.52%), for which Burns accumulates rewards points for future discounts.
The auto-inserted stock ticker symbols in this article really drive the point home...
There’s a completely separate economy for property owners and people with capital than those without. The gap between the two is harder and harder to shoot. The middle doesn’t exist in a lot of places, and it’s mostly legacy/inheritance that keeps people in the same economic class.
As the article says, the top 10% of income earners account for 50% of the spending. I’d bet the top 1% accounts for over 35%. The rich rule, for now.
>the top 10% of income earners account for 50% of the spending
And hence climate change and environmental degradation. Something to remember every time someone says think of the poor as an excuse for not dealing our emissions.
One thing I learned during a 6 month class of entrepreneurship, is that a company and product have much higher odds of success if it targets people with higher income.
* Those people have more money to spend so they are more likely to buy since it doesn't hurt their wallet
* There are fewer of them so it's easier to advertise and communicate to them
* You don't have to make a lot of product, you just have to increase quality, so you don't even have to scale production or think about economies of scale
I thought business did not involve income inequality, but it absolutely does.
That means it's utterly impossible to make a product for lower income people unless it's really really good.
This is one of those things that really mystifies me. We always hear about startups, killer apps, etc. that generally target a fat margin, even the cloud providers with economies of scale are doing everything they can to avoid becoming a "dumb pipe", but at the same time in the background there are a bunch of companies which somehow make e.g. manufacturing matchsticks profitable. What is their secret?
Their secret is not having delusions of grandeur. VC convinces us that a business is not a success unless it eats the world within ten years. In actual fact, many businesses make a very modest profit and took decades to get big enough you might consider them a success story. That’s fine. Shareholder value is not the only kind of value.
"Profitable" is just a calculation of inputs and outputs, what it actually looks like varies wildly. Manufacturing and tech/service industry and infrastructure are totally different types of business, often with radically different types of startup costs, cashflow, growth patterns, ownership models and employee compensation expectations.
- Wealthy people have plenty of extra money. Their biggest worry is finding new shiny trendy luxuries and bling, to show that wealth off. It's relatively easy for entrepreneurs to dream up and make such stuff.
- Poor people don't have extra money. Their biggest worry is having enough to afford food, clothing, housing, transportation, and medical care. It's extremely hard for entrepreneurs to out-compete existing providers of those (to the poor).
I don't think they are concerned with finding new ways of spending money to show the wealth off. It's kinda stupid and anyone who stumbled on some cash gets over it in a year or two tops, or otherwise they are so stupid their cash will the siphoned off by someone smarter in another few years anyway. Biggest problem of selling things to rich people is that they hear so much bullshit all their lives, including bullshit from fake friends, fake lovers etc., that it's really hard to bullshit them with anything anymore, and you have to do it to sell them the next "amazing" gadget.
>That means it's utterly impossible to make a product for lower income people unless it's really really good.
Rather really really cheap. There is definitely a demand for servicing lower income people. It's just not a great place to be for people with middle class sensitivities.
Wouldn't a more narrow specific audience you need to target and market be more expensive than a broad campaign?
If you use a broad campaign that's targeting more people overall due to a larger pool of potential users...you should see more customers. And a more generic less targeted ad should be cheaper per click or whatever KPI.
Low-margin, high volume products for low income people don't sell on advertisement, they sell on price. You need the economies of scale, and that requires tons of upfront capital investment.
Today’s day and age you don’t even have to increase quality. You simply repackage stuff in a new social media friendly way.
I mean, just look at the success of Goop and the general “wellness” industry which keeps criticizing Big Pharma (which deserve a lot of legitimate criticism that need to be solved with better, not necessarily more, regulation) when all the criticisms apply to wellness with the added concern that they’re completely unregulated and have no testing requirements.
> That means it's utterly impossible to make a product for lower income people unless it's really really good.
The flip side is that products targeted at poor people are actually amazing. Something like a cheap grocery chain involves logistic and technological capabilities that were unachievable through most of human history. And the price points society hits for things that are effectively magical are absurdly low.
The default expectation for someone who can lift heavy objects or maybe do some cleaning would be that they can scrape together just enough food to survive. But the modern economy is so optimised at the low end that most people can actually achieve a pretty reasonable standard of living on very questionable levels of productivity, skill and ability. Although not luxurious by modern standards, obviously.
> products targeted at poor people are actually amazing.
> pretty reasonable standard of living
This is a deep misunderstanding of what constitutes progress and a reasonable standard of living.
Modern TVs and phones are great, sure, but they're an order of magnitude smaller than big-ticket costs like housing and education. Combined with real wages being stagnant since the 70's, most Americans have seen their standard of living decline.
That's also a much more crowded market and your rivals are probably more ready to outspend you. For instance if you're selling vitamins, are your odds of succeeding in the luxury market that much higher ?
Not really the way I’d put it: it has to be really, really cheap or really, really indispensable (why is a smartphone a must have for a homeless person…?)
The whip on your back, the ability to choose your work to some degree, the part where you get paid, the part where you don't get food housing and medical care from the owner but from your own money, the expectation of basic social respect... Pretty much everything except the part where you don't really have shit at the end.
> What is the difference between forced slavery and economical slavery ?
Carrot or stick.
People like to work for carrots, people don't like to be worked under threat of a stick. A horse that doesn't work dies either way, but one is much happier than the other.
Free market refers to market participants being free to pick and choose transaction terms for themselves. It is entirely unrelated to the presence or absence of slavery.
The key question is something like "am I getting the best deal on offer?" for workers and "are these workers having the biggest impact possible?" for managers. The economy provides structures for the two parties to negotiate the best answers they can find.
Slavery puts the decisions to the slave owners, economic slavery retains the decision with the worker. If workers are in a terrible situation then at least they can reorganise if they see a better. With slaves they probably could think of better ways to organise, but the owners blocked them from acting.
In practice it means workers have and can act on strong incentives to upskill and find more effective working habits.
How stable will the new government be after this hypothetical revolution? Will the technology for mass scale killer robots still be accessible? Isn't this tactic likely to just make the situation even worse than it already is?
One idea of Yuval Noah Harari is AI, robotics, etc will make the normal citizen irrelevant in the global economy. The ultimate barometer is if governments require less soldiers, the game is up, nobody will even care about common citizen.
One thing missing in the inflation discussion is asset inflation. Yes government measured inflation went down while stocks and every other asset kept going up. This is a massive transfer of wealth and spending power to those who have assets. When COVID hit and stimulus started hitting the working class, it drove up all prices because they for a brief period of time had spending power and therefore labor negotiating power. Now things have returned more to status quo where the wealthy asset owners keep getting most of the gains from technology driven increases in efficiency while the people working in meat packing plants have been put back in their role.
The second example is surprising and doesn't seem to fit with the first story.
> As a result, her family is spending thousands of dollars less per month than they did before, Harley said. Fortunately, despite these big changes to their budget, “I really don’t feel like we have gone without” so far, she said.
This family is on $140K and cut their spend by thousands a month without feeling they are going without. A big difference to the first family with a bunch of kids making ends meet thanks to side gigs next to a single $65K income.
Americans need too fully support their richest and their real estate owners, because they'll become rich like them just in any moment. Everyone will receive one beautiful real estate and a small plastic bag with minerals. It's the last mile, you'll make it!
There is a general process where people with money use that money to make themselves more powerful (by controlling the media, buying politicians etc) and richer (by investing that wealth and using the power they bought) in a self reinforcing cycle. The two world wars came along and reversed this process for a while, but it is back with a vengeance. I guess modern tech is only going to accelerate the process. I see it ending in one two ways:
Elysium: A tiny group of super rich live in fabulous luxury, while the rest of humanity live in economic slavery and squalor. (Like the film, 'Elysium').
The French Revolution: The bulk of humanity finally have enough of the greed of the oligarch class and do something about it.
Honest question about first story: how come they need $1000/week if they spend on groceries $100/week? I am sure rent eats a large chunk of that thousand but it still doesn't add up.
It's a very high cost of living area. I live here. In this area (Portland metro) you should expect they spend about half their money on rent, if not even a bit more. $2500-$3000 a month would not be surprising for a family of 6.
The cost of healthcare is also extremely high, 22% on average in the metro area. This is probably skewed by the elderly.
Add in a phone bill, electricity ($150 average), internet, garbage, water & sewer and $1000 a week for a family of 6 seems low to me, actually. They're doing a very good job making do with their relatively modest income ($77k/yr), only 55% of the area median income for a family of 6.
I dont know about Portland, but I live in suburbs of NY. Even an hour away, what you save in rent you end up giving up in the entire drive-park-ride-subway shuffle.
- You have to drive to the train station (pay for car, insurance, gas). Homes walking distance to train station are extra premium costs.
- You have to pay to park at the station (~$10/day for me)
- You have to pay for the rail ticket ($37 roundtrip / day for me)
- You have to pay for the subway/bus from the rail station to the office ($5.50 / day)
All-in, on RTO day trip costs $53 not including the car. Its not huge for a tech worker, but for many people this is prohibitive.
You can use pre-tax FSA transit accounts, but 1/3 of the time the cards dont work and you pay out of pocket. Then you cannot reimburse because FSA providers like HealthEquity do not allow transit post-reimbursement, even when their cards malfunction. Then, you lose the balance if you dont (cant) spend your balance in time. The entire system is set up to squeeze people.
The time aspect is huge. I try to load up Udemy courses and podcasts and try to turn it into forced learning time.
w/r/t Annual Costs, note that there are slight monthly discounts available. The discounts break-even at 4days a week, so the discounts dont even work unless you are 5 days RTO. There is no winning!
People love to hate billionaires, but most NIMBY initiatives that block housing development and drive up the rents are pushed by groups of regular citizens, not the super-rich. Also true outside the US. Czechia hardly has any millionaires, but bored pensioners with a quest to meddle in everything are plentiful and they have, uh, results. So do some green NGOs.
This. We continue to own goal ourselves and then blame the ultra wealthy. It's quite perplexing.
That isn't to claim that there aren't issues stemming from income inequality. Just that cost of living issues are some of the most pressing day-to-day and are often self inflicted (voting against infrastructure, voting against public transit, voting in favor of boneheaded zoning, etc).
Most NIMBY movements don't rely on democratic majorities. Often, it is "just" work of a tiny minority of very dedicated people who found out ways to hijack the standard mechanisms to the detriment of supermajorities.
Health insurance, car payments, car insurance… I might be overlooking something. But with health insurance, you have the monthly payments PLUS you have costs on top of that when you actually go to the doctor/hospital.
I have “good” insurance for a family of 4 and on top of my monthly insurance premiums (maybe $500/month? I honestly try to ignore it) I paid at least 3,000 in additional. But one kid did do a 2 week hospital visit.
>> Honest question about first story: how come they need $1000/week if they spend on groceries $100/week?
(looking at my own paycheck and bank statement):
- Rent / Housing
- Health insurance premiums
- Health insurance deductibles
- Health insurance balance bills (what insurance mysteriously doesnt pay)
- Health insurance co-pays
- Prescription co-pays and balance bills from PBM*
- Electric, Gas, Water, Sewer bills
- Phone+internet (often locked into 2yr plans so you cant shop around)
- (for me and some) Car insurance / gas
- (for me and some) Public transport
- (for some) student debt payments
All this is before any restaurants (a luxury, even for qsr), savings (good luck), travel (not realistic for many), dental /orthodontic (often deferred)
For those outside the US or some lucky US states, a PBM is a pharmacy "benefits" manager, which creates many rules for where you can fill your prescription to have it covered by health insurance. Mine (OptumRX) will set higher prices than I could get if I shopped around for medicine. If I choose the lower price, I either pay for it myself (out of pocket, not applying insurance) or they will bill the difference between what I paid and the higher "fair" price they set. There is no winning. Sometimes the PBM price is so high it is better to just pay out of pocket, or even to purchase the meds overseas (which I know people do, esp those closer to Canada.) Also, your doctor has to send the prescription electronically to the pharmacy, which makes it difficult to shop around since you dont actually have the prescription in hand and many doctors wont respond to you once you've left the clinic. Death by a thousand cuts.
Prescriptions are at least somewhat transferable (you provide some information to the new pharmacy and they do it).
The first example sure has a lot of payroll deductions, $680 a week is ~$35,000 a year. I guess health insurance premiums are probably deducted before the $680.
In fact, the most frustrating parts of living in Europe where this is not the case, is that too many things here are targeted at the poor because they make the majority of purchasing power due to forced equality of outcomes we have here in EU. Start with airlines. Nowhere in the world are the airlines so terrible as in the EU - not even in the very poor countries like India, or most African ones. Yes they are cheap, and affordable for everyone, but virtually all of the premium segment has been eaten alive and ceased to exist altogether, or became a joke (google "euro business class").
Seriously, forced equality of outcomes have been tried in the Soviet Union. Have the results been forgotten?
It's sponsored article promoting notion that frugal life is eating at fast food "restaurants" but using various apps, coupons, and tactics. Frugal eating is simply buying fruits and vegetables then cooking, frying, boiling them, and it's also infinitely healthier.
Go to India or China and look at the average persons buying power, then go to Texas or California. Singapore and Switzerland are in a comparable income bracket, but have a combined population of <15M.
Trick about USA is that it is really open for business and private ownership and investment into anything. Unlike almost any other sizeable country.
Entire world can't avoid the US if they want to say, save for retirement (because stock market everywhere else is an absolute joke because their governments want it so).
Entire world can't avoid the US if they, on the other hand, want VC funding (just because in some countries a "startup" in the American sense is literally illegal, and in almost all countries, in practice impossible because no one will invest without a tangible collateral).
And the list goes on. That's why the world is whole lot frightened now with what Trump is doing because all of us - from Europe to China - know that without America, we are simply not.
It's safe to say that if not the American market, my life and life of literally everyone with any cash who i know, even those not realising it, will simply never happen in any positive way.
> Entire world can't avoid the US if they, on the other hand, want VC funding (just because in some countries a "startup" in the American sense is literally illegal, and in almost all countries, in practice impossible because no one will invest without a tangible collateral).
I'm a bit confused by the sentiment here. Do I understand correctly that you're saying the rest of the world has made "startups" in the American sense illegal, but is also terrified of losing in America what they've deliberately outlawed domestically?
Yes! Because their socialist-ish or simply paternalist/statist governments made things illegal to prevent "inequality" or simply to keep things under state control as much as possible, but the people want to save for retirement and they want to build startups, too.
Quite obviously, interests of people, society, and the state are always in contradiction.
People want to be rich and free.
Government wants to control and redistribute (merely as a tool of control), and make people into slaves.
Society wants equality (inequality creates oligarchy and poor masses too easy to manipulate).
So they are all in inevitable contradiction and countries mostly differ in who of them is stronger: in America, people are the strongest. In Europe, societies are. In Russia, state is.
America provides all of us a way out of the contradiction: countries can be statist of socialist however they like; people channel their capitalist instincts to America. The entire world lives this double life for generations and we are all frightened with the perspective of this ending one day. If that happens, rest of the world could be truly devoured by millions of ambitions people now seeing no way to realise their ambitions.
If you have kids, even if your partner and you are both high IQ, you're statistically more likely than not to add to this mass of economically unviable peasants unable to be top-tier in the global economy of tomorrow. Maybe that's partly why birthrates in the first and second world have plummeted, as we all kind of know this, if only tacitly.