The Business Cycle: refuting "free market" myths (1 of 2)

[themaniusedtob]

vote for mr1001nights for president

[tothemax01]

As the resources (capital, labour) leave the original productive concerns, things start to crumble - prices start to rise, jobs start to get laid off, credit starts to tighten, some businesses go under etc etc and so proceeds the snowball. We have just seen one after all. Then after all the garbage has collapsed via bankruptcy, we start again.

So stop reading that dog-sh!t and start reading something educational, dipsh!t.

[tothemax01]

Since non-spare resources are being burned, these resources have to come from somewhere - and are inevitably transferred from existing profitable companies to lesser-so ones (as money becomes more available and thus cheaper and thus lower rates of return are still profitable), and are also inevitably squandered with consumer credit (read: housing).

[tothemax01]

Regarding the latter: In a system where there is a constant stock of money, any money saved constitutes an abstention from a consumption of resources, and any of this money lent out via real loans - is an allocation of those spare resources for production. When banks issue money-substitutes (electronic accounts etc) in excess of this money (via false loans), this false credit is then used by companies to acquire resources in excess of what the market would otherwise allow.

[tothemax01]

So, here is the correct (not that you like the concept of 'correct') answer to the question "what causes the business cycle": Central banking and legalization of fractional reserve banking. The former is Marxist (number 5 in communist manifesto), the second is fraud. The former prevents a free-market - anyone who things that a market is free when something as critical as the interest rates of money is beyond its control - is insane.

[tothemax01]

Marx already laid out the process, you say? I have read the communist manifesto, these things were TRIED. It is indicative of the leftist mentality when they follow the following logic: method X produces result Y, X is done, Y didn't happen, therefore X was not done - a blatant 0=1 logical fault. So, leftist, how do you answer the fact that centralized economic calculation is impossible? How do you answer the biological fact that people are not equal? With obscurantism non-answers, no doubt.

[brownie1982ad]

@tothemax01 Communist manifesto is not Marx's main work. Kapital is.

[tothemax01]

And never does socialism lay down exactly how it should work. The socialist believes it is sufficient to convince the masses that capitalism is evil, and the new communist utopia will simply emerge as 'workers shed their chains'. It is for this reason that socialism devotes 95% of its time to doing what you do in these videos, 'attacking' (in your demented manner) capitalism, and maybe we get 5% alternatives and an exact process description of how they would work.

[HoGraz]

@tothemax01 Well you know we could at least get rid of things like DEBT finance which is a way to hold you down.

[tothemax01]

Marxist philosophers are masters of abusing reason and intelligence, using their rhetorical skill and mastery of obscurantism, to pretend they know exactly how the world works and how to fix it. Not that they want to though! How could a leftist possibly flourish in a perfect world! Without the havoc wrecked, by his own hand, what would he have to promise to fix (and make worse)? Indeed, there is no greater prove that this is his nature, in that he claims 'socialism didn't happen, try again'!

[tothemax01]

Ha, listen to you, you smug socialist sack of cr@p. There is no adjective for men like you - what does one call a man who speaks about the current social system as the ultimate evil, with his magical stories about the 'class war', munching the words like it is chocolate in his mouth, whilst espousing socialism. Its one thing to espouse it before the fact, but after it has happened and proven its real results?

[causeimthesquid]

You should read some FA Hayek and revisit this afterwards. Inflation is the result of an increased supply of money. The resulting higher prices are a consequence of a devalued currency.

Money does not bring time into the market, that is the role of interest. Interest rewards how money is positioned over time. Interest is the price of renting money and is subject, in a free market, to the same laws of supply and demand

[MirageScience]

The business cycle is a part of the fractional reserve banking system not capitalism. The Federal Reserve (in the US) introduces and reduces the money supply in a market giving people in the market false signals of risk. More money given to the banks to lend causes a boom because more people can borrow money due to lower interest rates. The reduction of the money in the market reduces banks lending ability causing people who where dependent on the low interest rate to go belly up.

[DystopianUtopia]

1:18 LOL

Sir, youd have more integrity (and Id take you much more seriously) if you stopped using terms like 'capitalist class' and 'exploitation of the workers'. It makes you sound like some 'revolutionary' Che Guevara wannabe. You contradict yourself by saying laissez-faire still gives opportunity for 'exploitation' and the business cycle, then saying the 'capitalist class' needs govt to keep unemployment and inflation and general 'oppression' high.

This video is laughable, try again

[canaan1967]

@DystopianUtopia

You are inestimably uninformed. Why should he stop using those terms if they are an integral part of how our "free market" is run.

[DystopianUtopia]

For one, that's the big mistake. We don't have a free market and haven't had one for a long time. Secondly, these terms are simply subjective and only exist to those who percieve them. These is no absolutely class structure, because the dividing lines are completely based on one's methodology on how you place them. If workers are doing badly now, it is due to the current slump due to previous mal-investment caused by the Fed, and the inflation tax which redistributes from poor to rich.

[Weeth]

"When the capitalists do not get a sufficient rate of profit, then a slump is the result." That is the logical equivalent of saying, "When solids are removed from a liquid, filtration occurs." lol...

Economy-wide, mass profit-loss is simply a description of what a "slump" is—just as the removal of solids from a liquid is a description of what filtration is. It has absolutely nothing to do with causality.

What an inane proclamation. Where do you get this stuff?

[purplepamphleteer]

Ah, the "labor theory of value." Might not want to base your argument on that, since it was refuted many decades ago.

[PsykodelikCyoldier]

I think the point is that capitalism creates corporate capitalism, who funded FDR who put in the FED, the science based corporations like oil companies a segment of the capital class put in the FED to greater shift power in there favor

[studentofsmith]

@PsykodelikCyoldier Capitalism, by which I mean free market economics, is not perfect and human beings have a tenancy to take the good for granted and focus on the bad. I think the public's demand that politicians "do something" about the bad outcomes of capitalism opens the door to corporate capitalism.

"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators." P. J. O'Rourke

[Wishchrono]

NICE, Philip Glass music in the intro :D

[ivar197]

Not the same crap on labour cost not being represented by product prices and wages, thus creating a class war. its bollocks, its been debunked for a 100 years by guys like Mises.

All trades are voluntary in a free economy, no one is coercively oppressing workers,

[procuts69]

your crazy if you dont think there is a class war in this country at this moment,the federal reserve has created imaginary money out of thin air greatly reducing the value of the dollar illimanating the middle class and causing the businesses to horde capitol thus forcing the working class to take what they can get rather than paid what they should be ....there u have it prolitarin/bourgeuse explotation and turning free market into a communist country

[ivar197]

It is not a free market what the FED and other de-facto government agencies are doing.  They hold a monopoly to initiating violence, that is exploitation indeed, but it is not the free market.

[procuts69]

more accuratly is corporate capitolism free markets actually work,corporate capitolism is all about reaching the top of the pyramid no matter who dies in some ways i feel this is destructive,once the top is reached then what? collapse it and start the process over again gobbling up all the weak on the way down? it not good its just not sustainable

[procuts69]

i agree with you they exploit thats exactly why socialism is almost a better system when it gets to this point.well i wont say that but we just need regulation a referee to say to the corps hey out of bounds dont fuck over your workers or your getting to big if you fail it will cause catastroph throughout the system we need to do something before tha happens what say you?

[ivar197]

That judge is capitalism. If an enterprise does bad work, it goes bankrupt and changers owners to its lenders. Right now we have what youre talking about, socialising losses by government takeover so everyone has to suffer by someones stupid decisions. That would just be on a more grander scale in full blown socialism.

[procuts69]

i just think the gap between super rich and super poor should be so great that it would force the lower classes to suffer dearly without ever really having a chance it would be as we arent no better than indian casts ,and shouldnt happen in country that boasts freedom and liberty for all kind of hypocritical but thats just my opinion,i see alot of money being wasted that could be used elsewhere,like illegal immagration for instance if we locked down the border we would save billions

[ivar197]

That doesnt make any sense! Castes require political power to enforce them, in a variation of slavery, which is similar to the current system of politically enforced corporate monopolies. Without political power, nothing prevents new competition from coming in. Make no mistake, big corporations dont want a free market economy, political benefits are useful for them. Free market is only usefur for the up and coming new businesses.

[rflosi]

You definition of inflation is incorrect. You are claiming a result of inflation is inflation. Inflation is simply an increase in the money supply which has the effect of devaluing the currency, thus prices rises.

[mr1001nights]

watch part 2, where I address that point

[teewillis1981]

The Boom and Bust cycle is the product of government and the incredibly damaging control of the interest rate set by the Federal Reserve. Perfect example of the "Myth" you call the Free Markets: the Internet. You hate corporatism not capitalism.

[Wishchrono]

That's libertarian bullshit. "You hate corporatism not capitalism" - Corporatism IS capitalism dumbass. One may argue there's no "real" capitalist society, but capitalism IS happening. As for socialism, consider that left-wing STATEless societies are to prefer, benefitting the people MORE as opposed to anarcho-capitalism.

[procuts69]

and benefitting the people is a bad thing?as we are seeing we are not free people anymore i have felt that way for atleast ten years.all of our basic liberties are being sold to corporate america becasue they need slaves for thier hoggish capitolist agenda im for unions which is a form of socialism,if you spend 30 years working for some co.they should absolutly take care of you when u retire its only proper and ethical fuck capitolism if they cant see that we need to be socialist greedy bastards

[Kl0kw3rk]

This video is what happens when you have no education.

[mr1001nights]

Exactly: Education is a system of imposed ignorance

[Rundstedt1]

(2/2)

there will always be a class which will exploit and a class which will be exploited. It is really difficult to understand the claim of the free-traders who imagine that the more advantageous application of capital will abolish the antagonism between industrial capitalists and wage workers. On the contrary, the only result will be that the antagonism of these two classes will stand out still more clearly"

Marx on the question of Free Trade. 1848

[Rundstedt1]

(1/2)

To sum up, what is free trade, what is free trade under the present condition of society? It is freedom of capital. When you have overthrown the few national barriers which still restrict the progress of capital, you will merely have given it complete freedom of action. So long as you let the relation of wage labor to capital exist, it does not matter how favorable the conditions under which the exchange of commodities takes place,

[jwein8282000]

LOL , When was this written? 1845? There is this thing called the futures exchange, which sends future price signals. So company A knows what company B knows.

[mr1001nights]

Actually future contracts have existed since the early 1700s. Currently they account for a small % of fin. market transactions&by no means eliminate hierarchical&competitive informational deficiencies, nor overall uncertainty about prices&supply/demand conditions (rooted in the struggle between labor and capital) Actually, often the reduced uncertainty gained in future contracts introduces other uncertainties, like massive speculation or the (traditional) failure of 1 side to honor the contract.

[jwein8282000]

ok whatever im sure there was some caveman that did a futures exchange in 15000BC, not the point. Small % is a red herring as the size has nothing to do with the effect on knowledge. Actually speculation helps the futures markets with liquidity, and usually mass speculation only occurs when the state intervenes stoking demand bubbles. ;) And as for your last point a metoer could hit and we could all die too. You offer NO, ZERO, NADA, solutions to any of this in any case.

[Sepero1]

Mr1001nights, I think this video might be misquoting wikipedia just a little bit.

[mr1001nights]

I'm quoting An Anarchist FAQ, not wikipedia

[Austrolibertarian]

Hierarchy causes booms and busts? The Keynesian explanation based on consumption makes more sense than whatever you're talking about. The boom and bust cycle occurs when capital is funneled into areas where it would not otherwise flow due to lower than market interest rates, i.e. malinvestment.

[TheSAMathematician]

@Austrolibertarian Hayek was even better.

watch?v=d0nERTFo-Sk

provides a basic outline of both Hayek and Keynes.

[Rundstedt1]

Its easy to be a Stateless-Neocon/Market-anarch­ist, all they have to do is say everything that ever happened that was good was because of the market, and all that ever happened that was bad was because of the state, and not care about the intellectual dishonesty. Its like they wake up in the morning and say oh damn, the state gave me a pimple, if only there was a truly free market acne cream it would be cured. on no, my milk has spoiled, if only the state hadnt put that date on it..."

[Okooka]

It is intellectually dishonest to write off a whole strain of thought based on such anecdotal criticism.

And since when are market interchangeable with neocons? (Stateless neocons? Kind of an oxymoron)

[Rundstedt1]

It is an apt descriptor of an elitist philosophy that empowers the moneyed class above all else.

The critism is only seemingly anacdotal to you because it is a general illustration of the arguments given, the actual arguements given by Stateless-Neocons are what are really fallacious.

[graaaaaagh]

Wrong. All economic problems are caused by state intervention in the economy; this is how the massive wealth gap is created and maintained. Corporate personhood, tax breaks, subsidies, land grants, copyrights, patents, anti-union laws, etc. - all come from the STATE. The state is the driving force behind the capitalist system.

A free market would be nothing like capitalism.

[MarxBakuninMe]

I think you might be right. Capitalism I don't think could exist without a state.

[graaaaaagh]

Precisely.

[graaaaaagh]

Whoever thumbed-down my comment about state intervention obviously has a very poor understanding of the world. What's next? Giving me low ratings for stating that the sky is blue?

[MarxBakuninMe]

"Free market" and "capitalism" are synonymous for most people, especially on the left, hence the hostility, I think. Kevin Carson's blog certainly opened my eyes towards that one.

[graaaaaagh]

Yeah, we need to dispel that misconception. Most people seem to listen, excepting mr1001nights.

[SecessioPlebis]

Not only on the left, "Anarcho-Capitalists" added their part to that misconception.

Most who are aware of the history of socialism know that there are forms of market socialism like mutualism, Freiwirtschaft or individual anarchism, however these forms have a high risk of developing back into capitalism as property inequalities grow.

[Rundstedt1]

Haha - yup. Everything bad that happens is because of the state. Haha. Broken record, bla,bla, freemarket bla,bla... typical Stateless-Neocon

[graaaaaagh]

By saying that I'm guessing you're denying the fact that corporate personhood, tax breaks, subsidies, land grants, copyrights, patents, anti-union laws, etc. come from the state. Rather than listening to my arguments, you simply disregard them. You obviously have a very poor understanding of economics.

[Rundstedt1]

No, you are virginally young and undereducated capitalist pushing radical capitalism while denying that it is capitalism that is the problem. You obviously have a very poor understanding of politics, political economy and history. Stateless-Neocons can't really be debated, because they will just blaim anything they feel like that they don't like on the state, while blindly assigning any benifits to the market; its just silly and frustrating to debate such a superficial idiocy as this.

[graaaaaagh]

You are wrong again. I hate capitalism. And don't play the age card. I don't care how old you are; if you knew a thing about the state and its function in society, you wouldn't be advocating the state.

[Rundstedt1]

ohh - quick with the thumbs down aren't we? Does that make you feel better? You hate capititalism but you advocate the most capitalist system of all? Yea right, you want to tell a history teacher about history. If you knew anything, period.

[graaaaaagh]

I'm sure you've thumbed-down plenty of comments yourself. A free market is not capitalism.

[Rundstedt1]

True, not necessarily; but that advocated by the Market-anarchist system is. It allows for the accumulation of capital in private hands and does not put the means of production in the hands of the people. Allowing private capital accumulation in that system leads to total oligarchy, feudalism or fascism as the moneyed elites take power and form a state for their own benefit. At best Market-anarchism is a vicious circle. I have run out now, be back later.

[Curlz31]

This is your most ridiculous video yet.

[Rundstedt1]

I was looking forward to seeing this; what happened? It says its no longer available.

[0n0matopoeia]

Try hitting refresh you genius. For such a smart Marxist I figure you would be able to figure that out.

You must be a mac user. They're pretty commie.

[destructicon500]

What does tech savvy have to do with being a Marxist?!

[Rundstedt1]

Don't worry about him he was just a troll that left a stupid message on my board and when I chastised and blocked him he responded here.

Haha - he's probably right though, cause I can play it now. I'm too impatient with technology sometimes. My generation didn't even have color TV, and then we had to walk five miles uphill in the snow to get to school; both ways, they'd move the damn school just so we'd have to walk uphill on the way home too. :)

[graaaaaagh]

Why won't you allow my video response?

[graaaaaagh]

Why do you still not allow my video response?

[graaaaaagh]

And still?

[graaaaaagh]

Who the fuck is thumbing down a simple question? And you still won't allow my response.

[graaaaaagh]

The overproduction is caused by state intervention. Watch my video "The State as an externalizing mechanism".

[MarxBakuninMe]

You are a mutualist now, right? (Just curious).

[graaaaaagh]

I'm an anarchist without adjectives. I take influence from all anarchist schools of thought. I don't care about organizational preference as long as it's voluntary.

[graaaaaagh]

watch?v=7_EjFdR0Fqs

[FistsoFuckinFreedom]

What research have you done on economics?

[thorsmitersaw]

zero. its why he and Chomsky do not understand the horrible internal incentive mechanisms of state, thinking its "as benign as we want it to be"

[FistsoFuckinFreedom]

Chomsky knows, his research clearly shows it. He's just not able to put 2 and 2 together.

[graaaaaagh]

Yeah, how anyone could think that a group of people with absolute power to enforce their arbitrary rules can somehow be made benign is ridiculous.