Any real lefties here?

And no, I don't mean pseudo-left neoliberals and Democrats, I mean actual lefties. Socialists, Communists, Marxist-Leninists, etc. Any of you guys identify with that?

Personally I identify broadly as a nationalist-leaning socialist, I'm between the top and bottom left of the political spectrum.

I don't see any nitty-gritty political philosophy debating here, and maybe that's because I came here from a political debate forum, but I definitely am interested to see what you guys got.

Oh, and I guess you can also ask me shit about it. Might as well, just to get discussion going.

 

I am not sure I would consider neo-liberal left at all, I would consider them more right-leaning moderates who do not understand liberalism in the slightest.

Nationalist-leaning socialist? Nationalist for what? Nationalism tends to be a shitty justification for blindly following some charismatic or autocratic leader and socialist how so?

As for myself, I float around depending on the policies I am discussing. I do not consider communism feasible and socialist policies are alright depending on their application. I have no issue with a sufficient safety net, but I am not an advocate for extreme re-distribution in the name of equality.

 

Appeals to a more collectivist society and because I generally agree with the existence of the state.

In most cases it certainly does and I won't lie and say that isn't true. I would rather fight for the left as a whole movement and figure out the specifics later, which seems to be the general political strategy for the right.

Communal/Democratic control of the means of production and the abolition of currency.

Communism by definition is stateless and I don't believe people would function very well without the state, so I agree, and that's the main thing that keeps me from considering myself communist over socialist.

From each according to his ability, to each according to his deeds (socialism).
From each according to his ability, to each according to his needs (communism).

 

Right-Libertarian on the edges of anarchy

 

I'm a socialist with communist tendencies. Unrestricted capitalism benefits nobody but the uppermost echelons of society, while trampling everybody else into the dirt.

 

More or less identify as Right-Libertarian

 

How do you think unrestricted capitalism only benefits the upper echelons of society, and how do those upper echelons trample on everyone else?

Also, socialism is quite the chameleon of a concept. Even if I accept the premise that pure unrestricted capitalism is not the most ideal, what types of departures do you think are necessary to improve the lot of the people?

I am quite interested in looking at the unintended consequences here, and also attempting to separate out the politics from the economics as much as possible.

 

I don't speak from principle, I only look at the evidence. The more unrestricted capitalism is, the more it concentrates wealth in the upper echelons of society, which necessitates a reduction of wealth in the vast majority of society, historically speaking. Also historically speaking, this tends to correlate with negative conditions for the majority of society.

Good question. I don't have the blueprints of an ideal socialist society in my head, but I can speak of at least one example in my experience. Consider the DOL ruling regarding fiduciary advice that came into effect last Friday, June 9th. Essentially, it establishes new standards for investment firms giving advice. It also sets ground rules on what investment advisors can be compensated on.

Prior to the ruling, we were required to make "suitable" recommendations for customers who struggled to decide what to do with old 401ks/pension plans. However, we were primarily bonused on getting people to move their 401k/pension assets to IRAs, as that made the investment firm a lot more money at the expense of the customer So, in the end, we had 101 reasons to move your retirement assets to an IRA, and very few reasons not to do so. Your average person not being investment-savvy, they trusted our word, and were fleeced. The DOL ruling fixes that, as we can no longer be bonused on moving money to IRAs, we can only be bonused on metrics that don't actively hurt the customer.

In my mind, there is no separation between politics and economics. I'm not an idealist, I'm a pragmatist. I'm most satisfied with the political system that benefits the most amount of people it rules.

 

I'n not really like that, I'm an easy guy and don't really care about that, I mean I do care but I feel like I can't change anything.
Mostly just feel like it's alright.

 

I'm not sure I agree with this. Even if proportionally more wealth concentrates in the upper echelons of society, it does not follow that nominally the non-upper echelons have less wealth. It is possible, for example, for the upper ecehelons' wealth to increase 20%, whereas others increase 10% (or decrease, but it certainly does not necessitate a reduction in wealth).

To be fair, in most of history, we have almost always had restrictions on capitalism in its 'purest' form, the only question being the the extent of the restrictions (how much regulation, who to regulate; how much distribution, who to distribute to; etc). I would contest quite a few atrocities have occurred due to severe restrictions (eg. Mao Zedong in China). Accordingly, we need some form of principles to categories these atrocities (and non-atrocities) and extract the most important elements of a fair/just/ideal economic and political system (eg perhaps eschewing the elements that existed in systems causing atrocities, and promoting elements in systems causing non-atrocities (although this ignores the dynamic nature of economic systems, just an example)).

I would be interested to see if whether the American courts did not decide to extend the common law or equity because they thought it was the province of the legislature (given implied legislative intent that financial advisers were previously non-fiduciaries in retirement contexts). If that were the case, then your argument would not hold up in my opinion since the Government would have crowded out the legal system from doing its work due to the separation of powers. This then, becomes a legal problem, not an economic one, even if it is economic in nature.

Based on this quick article: DOL Fiduciary Rule: Everything You Need to Know It seems that legislation defines 'investment advice fiduciary' to — pre-amendment — not have made financial advisers fiduciaries (meaning they must act loyally) when their advice pertained to retirement matters (loosely). That seems to be a creature of Statute, and so the problem is inherently Governments in nature (ie the Government did not legislate in the first instance). Accordingly, to reiterate, it does seem to be a legal matter with economic dimensions, as opposed to an economic problem caused by a restraint on capitalism. I understand this blurs the economics and politics, which is why I would like to try to separate the two as much as possible.

Also to add, I do not think that unrestrained capitalism means no rules whatsoever, but rather, the rules are set by the market, and so when government intervenes to provide the rules in the first instance, it is no criticism to say that the rules needed changing is evidence against unrestrained capitalism, because the government in the very first instance crowded the market out from the need create rules in the first place — it is a dynamic system where the actions of the government affect the actions of the market, and evidence from that cannot be superimposed onto a what-if there was no government intervention scenario.

Yes I do agree that they are intimately interwoven, but for an example of a non-legal economic matter, suppose the government decides to subsidies X company by giving it $1 billion. To me this is more of an economic question, than whether financial advisers should be fiduciaries in certain situations to avoid bad conduct against those needing retirement advice (The former seems to be primarily an economic latter, whereas the latter seems to be a legal issue with economic dimensions). I also don't want to come from an idealistic ground, but a pragmatic one, yet it is important to understand the elements underlying the systems we are discussing, one being that there is a difference between redistributing income, and and a difference between regulating market behaviour.

 

I would identify myself as a right-wing conservative. Being from europe, I'd like to know your view on the EU. And by saying EU I don't mean europe.

 

The fundamental concept to any graph analysis in economics supports this.

Government intervention through regulations and restrictions will indefinitely cause market inefficiency's, especially through redefined equilibrium which lie below the point of a perfect allocation of resources.

aka: Peeps are worse off when the government attempts to fix society's problems through regulation of highly competitive markets.


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The strangest thing about socialist thinking is that it pretends that the individual is not self actualizing, whilst focusing on the 'group think' motivations of a collective. A strange sort of school-yard tribalism which in practice melts the rights of the individual in the pursuit of the larger group. After governments collapsing with nations of poverty and millions of people dead, do people start to realize that maybe, just maybe, big governments are the problem.

 

Right, it doesn't necessarily follow, but historically, that tends to be the effect.

Right, putting a madman in charge and having him implement draconian restrictions on all of society isn't idea. So I agree, we need principles that empirically promote the best society for the largest population.

The Securities and Exchange Commission, from which most investment advice regulations arise, was created by an act of the U.S. Congress in 1934.

Before the creation of the SEC, the market didn't establish its own rules. It had every chance to do so for decades, but it didn't.

Yet even with rules intended to set minimum standards of behaviour, capitalism strained itself against those rules. What does that say of the market's ability to regulate itself ethically?

I see what you're saying, but rules regarding financial advice don't simply affect market behaviour, they affect the financial well-being of ~90% of the population. If financial advisors are allowed to fleece your average Joe, you can be sure that their profits aren't going to benefit the needy. They're lining the pockets of millionaires and billionaires.

 

Disagree - see further below.

I question your method of obtaining knowledge - see further below.

There was an issue with investment advisers being non-fiduciaries with respect to retirement matters pre 1934? The market (common law) has rules against undue influence, unconscionability, misleading and deceptive conduct, and so on. Also, if it was an unresolved issue since 1934, then does that imply it took the Government near 83 years to solve it (assuming the current legislation is a solution - it is easily arguable that making financial advisers fiduciaries in this situation is using a sledge hammer to break a walnut).

Even restricted-capitalism (we do NOT have capitalism in its 'purest' form at the moment) still 'strains' itself against those rules. What does this simply tell you about human beings?

Will talk about this with the below.


Essentially, we have a philosophical and practical question: what epistemological method should we use to gain actionable knowledge about 'the market', 'the economy', etc. You contest that we can resort to history as a method of obtaining actionable knowledge about the market. Here, I disagree. For the most part, The Second Chapter of Mises' Human Action is very relevant for this debate. The debate is also extremely practical (since I know you care about practicality insofar as it relates to real people's actual well-being). It is practical because IF looking at history is a bad method of obtaining knowledge about the market, then IF we apply that bad knowledge to the real world, we should expect a not-so-good outcome; the opposite is also true.


Essentially, the reason I disagree with using History as a method of gaining knowledge about the market is because, assuming we overcome all the difficulties with reference to the need to read primary sources, etc etc, fundamentally you have a complex non-linear system. There are hundreds of thousands of variables affecting the market. You are ingesting all these hundreds of thousands of variables (probably through secondary sources (no offence)), and coming to a conclusion. The same hundreds of thousands of variables could be consumed by another person, and a different conclusion would be reached. There is simply no shortage of conclusions the mind will superimpose onto a scenario like this. Being a reasonably intelligent person, you are always going to have an opinion — so will other people, and there will always be differences. Case in point, I disagree with you with respect to the empirical evidence (even if you say we haven't looked at the same evidence, ultimately you'll accept the point that some people simply disagree with your point of view on the same evidence).


Just because you call something 'empirical' does not necessarily follow that that is a good method of obtaining knowledge. Empiricism insofar as it relates to science, tries to isolate single variables, and has a body of literature that is regarded as 'correct' from which, any hypotheses that contradict those accepted theories are met with heavy skepticism (example, if a hypothesis contradict Newton's Laws, it is probably going to be met with skepticism). No such body of literature really exists with respect to economics: economists disagree over simple things such as what a media of exchange is. Furthermore, as I said, analyzing a system of human interactions is analyzing a complex non-linear system of which you know nothing about the actual individual actors of that actual system, nor can you even identify the variables that exist in that system, their strength, and their changing nature. It is simply not a good method of obtaining actionable knowledge, and although I myself am guilty from time to time in referring to historical events to support my own view, ultimately, I think at best they can only be used to support a view, that view being something which must be reasoned a priori in the first instance. You simply cannot draw any conclusions from history as first principle with respect to economic systems.




To the extent that interests are misaligned with respect to investment advisers and prospective retirees. The way I see the situation: prospective retirees are deciding to go to financial advisers because they think doing so will satisfy their wants: to get good retirement/investment advice. Your contention is that they are actually getting bad retirement/investment advice, caused by misaligned interests, and that therefore this constitutes some form of market failure? Let me ask some questions since you know the industry quite a bit (as you work in it):

• Do consumers think that the financial adviser probably prioritises their companies interest over the clients interests?
• What are consumers views on financial advisers generally? (Eg people hate lawyers and love doctors)
• Is there a competitive advantage to being a 'good' financial adviser?
• To the extent that investment firms now lose revenue (presumably), what consequences does this have do you think?

Ultimately I think what we have is an adverse selection problem: consumers can't differentiate between good and bad investment advisers, and so discount the price of all financial advisers, causing the 'good' ones to exit (not enter) the market; in other words, this is an information asymmetry problem and the purported solution is that by rendering the adviser a fiduciary, the information asymmetry is resolved by allowing the consumer to inherit by proxy the advisers information about what is truly best for the consumer (an alignment of interests). Prima facie the solution seems fine, I just wonder what unintended consequences it might have.


Also, as to the effect of the DOJ ruling, I'm curious. I would imagine you would only allowed to be 'bonused' if the client has informed consent of how you are being compensated; the absence of informed consent would, even if the bonus regime did not harm the consumer, still be a breach of ones' fiduciary duty (unless they are taking a non-legal meaning of the word 'fiduciary' yet still using that word...). I read earlier that you said now you can only be bonused on metrics that don't actively hurt the consumer. Is that what the DOJ ruling explicitly says? How do you guys determine what metrics don't actively hurt the consumer, what are some examples?

 

I'M BACK. After a long and somewhat difficult sabbatical, I'M BACK. Thank you all who respond to me for your grand patience, especially @malakadang.

Yes, massively so. It turns out that if you don't legally require people to act in their client's self-interest, sometimes, they won't do so.

It does now, yes.

Yes, it does. And I don't see how making financial advisers fiduciaries is using a sledge hammer to crack a walnut.

Human being are imperfect, selfish, greedy bastards.

Essentially, the reason I disagree with using History as a method of gaining knowledge about the market is because, assuming we overcome all the difficulties with reference to the need to read primary sources, etc etc, fundamentally you have a complex non-linear system. There are hundreds of thousands of variables affecting the market. You are ingesting all these hundreds of thousands of variables (probably through secondary sources (no offence)), and coming to a conclusion. The same hundreds of thousands of variables could be consumed by another person, and a different conclusion would be reached. There is simply no shortage of conclusions the mind will superimpose onto a scenario like this. Being a reasonably intelligent person, you are always going to have an opinion — so will other people, and there will always be differences. Case in point, I disagree with you with respect to the empirical evidence (even if you say we haven't looked at the same evidence, ultimately you'll accept the point that some people simply disagree with your point of view on the same evidence).[/quote]

I'll agree that complicated evidence can have multiple interpretations, but is that the main reason you disagree with my interpretation?

This is 100% untrue. There is absolute a body of knowledge (or consensus, if you prefer) in economics. A priori economics only holds true if we have 100% perfect knowledge about human psychology - which of course, is a laughable idea. Human behaviour follow certain trends, and these trends repeat throughout history. Disagreement on a subject doesn't mean that the consensus is incorrect - it just means that there is disagreement.

To answer your questions:
- Pre-DOL ruling, yes, financial advisory firms are for-profit businesses.
- In my personal experience, it's mostly confusion. Your average person doesn't know a 401k from an IRA from a checking account.
- There's a small advantage to being a good financial advisor, but being the least corrupt among thieves doesn't earn you a parade.
- Good question - my firm is still dealing with the consequences of the DOL ruling, and will be until January 2018 at the VERY earliest. Revenue will probably be lost, given how hard financial firms fought against this ruling, but there's already a shift towards acquiring non-requirement accounts, and getting accounts we already control managed.

Well if the consumer had 100% access to all information, and was 100% equipped to process all information, I wouldn't be worried. I could make 80 inappropriate retirement sales pitches every single day, and it wouldn't effect anything.

Another great question. What you heard is essentially true, we can't be bonused on things like how many old 401k accounts we transfer to IRAs, we can't be bonused on most investment selections. Actually, the only main thing we can be bonused on now is customer satisfaction surveys, with some input from non retirement account numbers - how many brokerage accounts could we steal from competitors, how many managed accounts could we open, etc.

 

I don't know where I am but I believe in the world working together to expand our understanding of energy and the universe rather than squabbling over fake genders or donkeys and elephants.

 

I live in Canada, we/it recently became a country only about 50-60 years ago, before that we were sovereignly recognized as part of the uk. Those above ideals are far too socially advanced for me to intuitively comprehend as those before brought forth.

 

....yo, are you mad fam? This year we celebrated Canada's 150th anniversary O_O

 

was a leftie until i was like 12 and realised my right hand just needed a bit of love and showing lol i can use both hands now

 

Not true whatsoever

That's communism