He champions individuality, yet suggests we all have the same motivational style: Muhammed Ali would be a fighter regardless of what he was paid. Can Friedman explain why I am motivated to spend hours composing and studying music with little if any financial reward? Surely if financial accumulation was the only motivating factor, I would only direct my energies on the most fiscally promising activities. He may accuse me of self-indulgence, but not laziness.
@Uberloinvongenchler Milton does not suggest that we all have the same motivational style. He suggests only that we should be free to use financial compensation, which is surely a motivator for many people. In the same way he would argue that you should be free to pursue your own interest by studying music. Milton does not, and would not, accuse you of laziness.
@MrReasonableThinking I think there is more to it than that. Friedman overestimates the importance of material rewards and fails to understand the complexity of their nature. First of all material rewards are effective only up to a certain point, when our basic needs are met their importance declines drastically (that is why the correlation between GDP and reported life satisfaction practically disappears in developed countries).
@sasoslacek ....so in other words, you want to take advantage of the luxuries that taxation gives us all (theoretically), but when its ur time to contribute back to a society that has contributed to you and your success you balk? Does that about sum it up?
@flipgood89 I think you have the wrong person. I pay my taxes and have never claimed that taxes are a bad idea. In fact I think it would be a brilliant idea for the state to start collecting taxes from the rich as well as from the poor.
Respond to this video... Secondly, financial compensation is most effective as a motivational factor for simple manual work. When it comes to even simple mental tasks, psychological experiments have shown that the promise of financial compensation can even reduce performance. When it comes to complex intellectual and creative work, it would seem that financial rewards are not an adequate mode of compensation.
@sasoslacek The degree to which people are motivated by financial compensation is irrelevant. Friedman simply insists that we should be free to compensate people financially, should we choose to do so. In fact, Friedman would champion your freedom to compensate people in non-financial ways, just as much as he advocated for people's right to free financial exchange.
@MrReasonableThinking ....yeah, but friedman and those who ascribe to his way of thinking engage in severe conformation bias, in order to draw their conclusions. For instance, that the "free market" is a neutral economic system that divides winners and losers based on hard work and merit. That is the guiding principle of Friedmans idea of "freedom" and when subject to any form of empiricism, has been throughly debunked.
@MrReasonableThinking ....to answer your question --- well, of course not. The problem is that libertarian principles would have you believe that our economic distribution rewards the "hard working" and punishes the "lazy", which accounts for our social and economic stratification. Other people will argue that we have an imbalance in opportunities that controls these outcomes. and that our economic system is largely a result of power relationships, not merit.
@flipgood89 The effect of "an imbalance in opportunities" is not mutually exclusive with the positive impact of hard work. Both can be important.
Friedman certainly accepted that there is an imbalance of opportunities, and that factors other than hard work can contribute to success. However, he also saw the significance of both hard work and merit.
If you cannot see that hard work will produce better outcomes than laziness, you ought to reexamine the world around you.
@MrReasonableThinking . We are in agreement that hard work produces better outcomes than laziness, but how are we to tackle the imbalance of opportunities? That imbalance indicates a structural and institutional problem, and a violation of our social contract which is, theoretically, unconstitutional. How are we to solve that imbalance that the free market has produced? Govt?
@flipgood89 It is not the free market that creates inequality. You could blame it on god, nature, or random chance, but the fact that some people are born smarter, faster, happier, healthier, more attractive, or stronger is not the fault of free markets.
So, given the inequalities that exist in nature, how can we create the best society? As Friedman says, "A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both."
@MrReasonableThinking .Nobody is talking about innate abilities promoted by genetics. What we are talking about, for instance, is the difference in quality of education and resources for school districts of some neighborhoods vs. others. How can we reasonably expect children from disadvantaged schools to compete with children who attend schools with far greater advantages? The principles of this country are equality, not a second class citizenry. Society is controlling success. Thats the point.
@flipgood89 But those differences are ones which contribute to inequality. The logical reasoning your ideology would propose would be socialism and at it's worst communism. The aforementioned two systems simply do not work. You have to live in the real world, and that it is that it is sometimes not fair. Imperfections exist.
@flipgood89 (cont). No you didnt misinterpret my "of course not" response. Its just that phrases like hard work and merit dont paint a complete picture about our economic distribution, and often are inconsequential in who is rewarded. For instance, is Paris Hilton more talented, educated, and hardworking than all of the bottom fifth? How do we as a nation guard against an aristocracy like environment, and the disadvantaging of many in our populous, structurally?
@flipgood89 Because I asked two questions, your answer: "of course not" was ambiguous and I may have misinterpreted it in my response. If it seems like I didn't get your message correct, please let me know.
I really like the casino metaphor, it is refreshingly honest. The house sets the rules, calculates the odds so that in the long run players always lose and walks away with their money in the end. The people play along in the vain hope of coming out of the whole stupid game a winner (which some of them do, but they are always the exception to the rule). The problem is clearly the casino itself and the fact that I can not opt out of the casino of capitalism.
@sasoslacek What part of capitalism is it that you would like to opt out of? There are plenty of free market arrangements in which you partake, despite your alleged desire to "opt out". For example you were, when you posted that comment, making use of a computer and the internet, both of which you paid some cost to use.
@MrReasonableThinking Capitalism is not a sum of independent parts, it is the totality, a unity of contradictions if you will. You can not understand it by looking at concrete elements (markets) in isolation. There is another more concrete problem from the historical perspective: if you say that capitalism is just a bunch of markets (reminds me of the slogan that communism=soviets+electrification), you will have to conclude that capitalism has always existed and miss what is specific to it.
@sasoslacek Although capitalism could be considered "a bunch of markets," the definition is more than that. It is an economic arrangement in which nearly all markets are free. Thus, I am not forced to conclude that capitalism has always existed.
Allow me to rephrase my original question so that you might answer it. What is it about capitalism that makes you want to "opt out"? Perhaps you could thoroughly answer this question by including what you believe capitalism is.
@MrReasonableThinking I think you need to define what you mean by markets being free before we can continue that part of the discussion.
As for why I would like to go beyond capitalism, we could start with the current crisis, depletion of natural resources and prospects of an ecological disaster, immense poverty across the globe, concentration of economic power that makes true democracy impossible, increasing intensity of work for those employed and rising unemployment for the others.
@MrReasonableThinking I don't see how this is relevant to the discussion, but I'll play along. I am one of the privileged few and suffering from economic hardship is not something I would have first hand experience with, the crisis did not change that.
@sasoslacek The alleged effects of capitalism, listed above, are presumably a bad thing because they cause you or others to suffer. It would seem then that you believe capitalism is a bad thing, not for those reasons alone, but rather because "crisis...ecological disaster, immense poverty..." cause people to suffer.
Capitalism and its effects have apparently not caused you to suffer, so I still wonder why you wish to opt out. Do you wish to opt for the sake of others' suffering?
@sasoslacek I feel it relevant to determine the root of your distaste for the aforementioned capitalist issues, because if indeed it stems from suffering, I would challenge that assumption. Rather than individually challenging pieces of your anti-capitalist notion, like the alleged increasing intensity of work, I would rather contest your fundamental reason for opposition to capitalism, which I imagine is that you believe it causes suffering (though not your own).
@MrReasonableThinking Indeed, we can start the debate there and let me be more precise: capitalism has achieved marvels completely unimaginable in any prior mode of production, brought material well-being to millions, brought with it limited political democracy (a huge improvement over the unlimited autocracy of royalty). Yet still more than half the world population lives in poverty, we are quickly depleting the planets resources and destroying ecosystems.
@sasoslacek So it seems that your oncern is for the suffering of others. Natural resources are only valuable as a tool for improving the lot of mankind, and widespread poverty is presumably bad because it is synonymous with suffering. Unless you value ecosystems in themselves more than human suffering, rather than as they are relevant to the human race, your argument seems to be rooted in the belief that capitalism causes unjust suffering for many people.
@MrReasonableThinking Close enough. Although I would not make my point on the basis of justice, rather that 1) we are all going to be up shit creek if we go on like this and that 2) much of the suffering is needless given the development of productive forces and could therefore be alleviate with a different social organization of production.
@sasoslacek Capitalism, by allowing people the freedom to use their property as they see fit, puts those resources to work as efficiently as possible. If we examine the alleged failures of capitalism you noted above, several of them are actually perfect examples of the brilliance of capitalism. In the following posts I'll explain a few of the successes relevant to the points you noted. I'll include "the current crisis," "the depletion of natural resources," intensity of work." and "unemployment"
@sasoslacek Although fiscal crises come and go, in the long run, they are insignificant. Even the largest recessions or depressions are but a blip in the radar compared to the economic improvement we see over the long run. Note the impact of the great depression in a chart of "cumulative total return of US equities from 1802 to 2010" (google that phrase for a chart). It's easy to accuse capitalism of failure if you blind yourself to vast economic growth while focusing on short term volatility.
@MrReasonableThinking "It's easy to accuse capitalism of failure if you blind yourself to vast economic growth while focusing on short term volatility." It's also easy to miss the bigger picture, namely that both the benefits of economic growth and the burdens of crises are shared extremely unequally. Those that are bearing the brunt of the crisis in the US for example shared little of the benefits of economic growth during the last thirty years. Skyrocketing prices of education ...
@sasoslacek ... and healthcare along with other prices meant that real wages were rising only marginally if at all. There was a significant increase in the share of low-income jobs at the expense of middle-income jobs, masses of college graduates working as flight attendants or parking lot attendants etc. The brunt of the crisis is borne by the middle and lower classes in the form of unemployment and decreased home equity. And they don't qualify for government bail-outs.
@sasoslacek You suggest that the poor "shared little of the benefits of economic growth," and go on to cite examples that seem to illustrate a falling real wage and declining quality of life, including rising costs of education, and difficulty earning high wage jobs. Unfortunately your examples aren't representative of economic reality. Despite anecdotal hardships that exist in today's society, the middle and lower classes have seen significant gains in real compensation and quality of life.
@MrReasonableThinking That is not true. If you look at actual data you will find that in the US at least real wages have been increasing marginally for the middle class, yet the rise was negligible compared to the first few decades after world war II. It is not quite clear what was happening to real wages of the lower class, some data shows that they were declining, other data shows that they were increasing marginally, in any case there certainly was no significant improvement.
@MrReasonableThinking In any case the problem during the last forty years both in the US and in Europe was that wages did not keep pace with productivity. While wages as a share of GDP were declining in Europe and basically stagnating in the US, productivity has been increasing rapidly. So the gap was being patched up with household debt and we all know where that got us.
@sasoslacek Real wage growth as defined by total hourly compensation has grown in step with productivity. Please google "trends in real wage growth chicago fed" for a concise, but clear explanation. If you can provide primary source data that demonstrate flat real hourly compensation growth, I would love to see it. The latter measure is preferable because it takes into account all benefits a worker receives for each hour of labor he endures. The Chicago Fed study elaborates.
@MrReasonableThinking I hope that as you gain a better understanding of the economic reality, you'll begin to consider the possibility that capitalism actually benefits all people, not just the wealthy.
@MrReasonableThinking Well, I don't know where this study contradicts what I have written about real wages. It's just as I have claimed: "However, the data do suggest that growth in average real wages has slowed significantly since the 1960s and 1970s." I have never claimed there was a decrease or even stagnation.
@sasoslacek I'm not sure if you did not read the whole study, or did not understand its conclusion. I think this quote is illuminating: "once proper account is taken of relative price change, there has been no major change in the relationship between real wages and productivity." That directly contradicts your previous statement. The quote you cite is from the authors' discussion of incomplete data analysis.
@MrReasonableThinking The author is clear enough that misunderstanding is impossible. What I quoted is not purely a methodological discussion but a discussion of the trends in real wages and the fact that the positive trend has slowed significantly. The second part of the article deals with the relationship with productivity and this is a separate problem. Have not had time to look into that part carefully, will get back to you when I do.
@sasoslacek Allow me to clarify how the study contradicts your claims. You said, "wages did not keep pace with productivity," while the Chicago Federal Reserve found that, "there has been no major change in the relationship between real wages and productivity."
@sasoslacek Given that we want natural resources to be used in the way that benefits humanity most, we should be indifferent to current vs. future consumption, with a desire only for the most beneficial outcome. By allowing for the free market to operate, we harness its knowledge. If it's true that resources being used today would be more useful in the future, individuals can simply buy resources, and sell them when they are needed in the future, creating efficient allocations through time.
@MrReasonableThinking Worth noting, is that if you believe that the market is failing to limit its resource consumption to an efficient level, you can profit from the failure by buying commodities. In fact, anyone can protect themselves from the alleged market failure. The truth is though, that the market sets incredibly efficient prices for resources because of the free markets for those resources. For example, traders buy oil futures simply to save oil for future use.
@MrReasonableThinking "The truth is though, that the market sets incredibly efficient prices for resources because of the free markets for those resources." True, providing that there are sufficient alternatives available. But since the totality of resources is limited growth also reduces the availability of resources. That is something that the market can not take into account: that at some point there my be nothing to chose from, nothing to enter the market.
@sasoslacek You say, "[the limited nature of resources] is something that the market can not take into account." Yet this is certainly not the case. Even in the case of limited resources, markets can make rational decisions. Certainly market participants will consider the scarcity of resources when they choose to buy or sell such resources. Thus, the markets can and do "take that into account."
@MrReasonableThinking By definition markets do not take account of externalities. In economic literature this problem is referred to as the tragedy of the commons: participants in a market acting rationally will necessarily deplete common resources.
@sasoslacek In the absence of property rights, a tragedy of the commons occurs. That's why it's important to allow private ownership of our earth's resources.
Though I'm tempted to continue to elaborate on why resources are efficiently conserved, when we allow for private ownership and free markets, I would prefer, for now, to focus on the power of capitalism to benefit the poor, through growth in productivity and real wages. Please see my recent comments on the topic and the relevant study.
@MrReasonableThinking I would like to linger on this point a bit longer. There is a problem, namely that there can not be private ownership of the earth's resources, at least not without disastrous consequences. Would you like to see all those people that can not afford proper food to also suffocate as a consequence of not being able to afford air? And who would own the air? It is there, nobody produced it, nobody can legitimately lay a claim on it.
@MrReasonableThinking Regarding "efficient allocations through time". This crisis shows that that sort of allocation is quite irrational. People don't have sufficient knowledge of the future and make their decisions based on insufficient information and flawed expectations (i.e. housing prices will rise for ever at the current rate). A second problem are externalities. Since the costs of pollution are shared by all and not by the polluter directly, markets make pollution rational.
@MrReasonableThinking A similar thing goes for the allocation of risk. Take Fukushima for example. It is perfectly ludicrous to build a nuclear power plant where it stands, but it was still built. Since the risks are shared widely, but the profits from taking high risks to decrease costs are enjoyed by the company directly, market rationality demands that highly irrational decisions are taken.
@MrReasonableThinking Another thing is the time span with which actors on the market operate. The performance of CEOs is judged on a quarterly and yearly basis. The effects of human action on the environment can make themselves felt and manifest as costs only after decades or even centuries. Climate change is beginning to manifest as a cost only when it is far too late to prevent it from happening.
@MrReasonableThinking The problem is that a substantial amount of suffering today is needless given the tremendous power of our productive forces and that negative consequences of economic growth might soon outweigh the positive ones. Therefore a different organisation of productive forces is needed.
@sasoslacek Capitalism is about competition. Competition is the driver of productive forces. Unless you're Buddhist, humans naturally have desires. People want stuff they like, there is limited stuff, and thus people must compete for this stuff. Luck makes some better at competing than others. That's a given. The tough and skilled get the stuff, the pussies and fairies cry about their failures and blame the system. However, the system encourages invention and efficiency, benefiting the whole.
@GodOfSkyAndThunder Well, Tarzan, for us living in civilization it is not quite as simple as that. Society is not an ant colony where the "tough and skilled" get "stuff" and that is that. We are not born with the skills needed to function in society, we acquire them during socialization. Luck itself is a product of society (there is nothing natural about sub-saharan Africa being poor) it is not a pre-existing condition.
@sasoslacek Then why do you give a fuck? If you are "one of the privileged few," and thus lucky, seize this opportunity to increase your fucking capital, bro. Spend your time and resources developing money-making skills. It's the right move. I'll say it now and will say it again: Money makes you happier, all else equal. Don't waste your time pussying out and trying to legitimize yourself by making dumb liberal comments on this site.
@GodOfSkyAndThunder That's the first time anybody has accused me of being a liberal. And on the basis of my critique of an orthodox liberal. How did you come to that conclusion?
There is no ceteris paribus with money. You have to earn it. If earning it causes you more distress than spending it will give you pleasure, there is no reason to earn it. If I have no use for the extra money, why the hell should I bother?
@sasoslacek Capitalism is a perfect system given the way the universe naturally operates. Milton is a clever shit and is entirely correct. Humans accept, with their limited brains, that luck is a phenomenon that exists. To humans, everything in the universe is initially luck. As Milton-beast discusses, you cannot choose to be born talented, to a wealthy family, or with a massive cock or a small cock. However, given luck in the universe, the system of Capitalism maximizes good. More later.
@GodOfSkyAndThunder Capitalism is a human product, we created it and we recreate it on a daily basis. The universe did not come down to earth and create it to suit its "natural" operation. Capitalism maximises nothing, the whole can not be in a causal relationship with its part. In capitalism some prosper, some don't, it's good for some, terrible for others. Simply bleating "capitalism gooood" does not help us understand anything about it.
...but this isn't true in the fact of it's application.
Keynes' fraud-theft system of the mass murdering Debt Syndicate, replaced anything even remotly kin to sane economics.
By the time of the Great Depression this had blossomed into a full power plundering War of Aggression system. Guess who financed both Lennin and then Hitler? That would be the Wall Street, City of London & Vatican City BANKERS!
@centurion180ad Are you mad because your poor? Are you mad because your so ignorant that you cant figure out a way to profit from the evil horrid bakers? Arrest them for what? They haven't committed any crime. Oh wait there smarter then you. I guess thats there crime.
@brianGosh1 I know a way to profit, and it's the way Al Capone did it. There is no other way. Who in the Hell do you think all these invasions are for? Are you so //stupid// & //blind//? 3 days after the announcement of the bombardment of Libya, there was ALREADY a new central bank set up by the IMF. The reason for removing Saddam ultimatly, was because he was refusing to sell his oil in dollars. All those carbon taxes go to private cental banks. Fiat currency is pure theft. Wake up!
Forceful redistribution of wealth cannot make everyone equally prosperous. It can, unfortunately, make everyone equally poor. Free market capitalism based on voluntary exchange is actually the humanitarian approach. As Friedman says: It is impossible to tax a corporation without punishing shareholders, consumers, and employees. As Mises noted, the interests of these groups are not antagonistic under a capitalist system.
@weavermama ....you cant view taxation as "punishment" ....America promotes the success of corporations through order, laws, and infrastructure. Those things are not free, my friend.
@flipgood89 "Government is good at one thing: It knows how to break your legs, hand you a crutch, and say, "See, if it weren't for the government, you wouldn't be able to walk."~Harry Browne. To the extent you are referring to the adjudication of disputes by courts, and laws against the initiation of violence and fraud, we are in agreement. Such a constitutionally limited government has historically necessitated less than 4% taxes as a share of GDP.
While statists fallaciously employ the zero sum game argument in regards to private wealth generated through voluntary exchange, they refuse to acknowledge its legitimate application to the coercive transactions of govt. redistribution ( whereby for one party to be enriched, the other must, by necessity, be impoverished).
@flipgood89 In your opinion, has there ever been a burdensome rate of taxation in human history? Between shareholders, employees, and consumers, who would you wish to see pay more in taxes? Could a Govt. levy taxes at 99% with no deleterious effects? Are you familiar with the Laffer Curve? Did you know that in 1913, only 0.5 % of income was taxable? Folks who earned over 250,000 in todays dollars paid 1 %, and those making over 6 million paid only 7%.
@weavermama ...I wouldnt use the economic character of the early 20th century as evidence to support your claims considering it was that environment which led to the great depression (centralization of wealth & lack of econ exchange). Empirical analysis of our tax structure and rates indicates a burden that is weighted in the middle. Thats unfair. The theoretical concept of paying taxes so that we promote a healthy, educated, safe populous is not. The quality of taxation is askew, not the idea.
@flipgood89 LOL. I used the year 1913 because it was the year that the income tax was first levied on the American people. The Federal Reserve Act along with the economic central planning by BOTH Hoover and Roosevelt were responsible for the Great Depression. Are you aware that the 16th amendment conferred no new power of taxation? An individual cannot delegate to govt. a right he himself does not posses. If it is immoral for individuals to use force to deprive others of their rightful.....
........Property, then it is likewise immoral for them to delegate that task to a government, even a democratically elected one. When you subsidize something you get more of it; when you tax something you get less of it. What do you expect would be the result of taxing the generation of wealth and subsidizing dependence?
@weavermama ...welfare is supposed to encourage mobility by providing a baseline standard of living conditions. The effect of dependence on welfare (dependence is overstated, btw) is the effect of an imbalance in social and economic opportunities. We generated a social contract in order to uphold the constitutional spirit of general welfare and equality for all. Its in societies best interest to have a educated and well-balanced populous, not an aristocracy.
Norway, Sweden and Finland all have lower business taxes and 70% of their GDP 's are created in the private sector. They are NOT socialist state planned economies.
so freidman likes unfairness, who knew but why douse he talk about the strongest and the luckyest not about the weakest and the most vaunerable, this is the problem with the extreme right they don't care about thye weakest amoungst us
Even so, you're not taking anything into account. You're not taking the menial jobs offered by western companies that pulled Hong Kong out of poverty, and is now enriching India, or the multi-generational head start places like Europe, North America, and Japan have on other places in the world. You're taking a lot of things for granted, Not long ago, there were wealth gaps in this in what is now the 1st world. It was the market that improved this.
@jrsub3 you mean as a child? i belive you, it was a time (pre ragan, thater ow & freidman) due to ameicas ideals & kainsian economics when it was easier to start poor in england & america and become well off, now of corse its the mainland eourpean economies which offer this chance, sadly not our semi freidmanite economies, they are a poor advert for feriedmans ideas, sama as marx, very clever good analists,there solyutions have been totaly disproven by history marx and freidman miror imeges
@jrsub3 i agree with your development sentiment, thats why i am a kainsian who belives in mixed economies and a fair distribution of wealth, if you a fudel subsistance economy is absolutly no use for getting people out of poverty, but the worst type of capitalist economy for poor people anywhere especial in poor countries, its a very unregulated explotative economy, where the developed companies take the vast majority of the wealth, & only share it with the rich elite & the poor get exploited
@jrsub3 its easy to have rich city states, even rich small countries, based on sucking wealth from elsewhere, rather than being based on 'socialuy useful labour' its based on collecting money, no employing a mass of people, these places are have no social useful perpose as there is no way to distribute the money fairly through work
This is like listening to a serial killer talk about fairness. This claim of financial wizardry by america is disgusting. We stole a continent, scraped everything up off the ground and put it on the stockmarket!! We ruthlessly dump our surpluses on weaker nation in class based action. Fucking Pigs.
@theFranksandtheBeans what do u think requires a benevolent anarchy... and dont u think if gold was the only currency, and gambling was the only profession, it would be a fairer world than the world of pigs?
There's nothing wrong with everybody being a duplicate if everybody would be beautiful and intelligent. Boxing is idiotic. Muhammed Ali ruined his health.
I'm a libertarian and I'm a socialist and I agree with everything said in this video. I think the market is an excellent anarchic tool for allocating resources and I most definitely believe that decisions should be made by the people who will face the consequences of those decisions. That's why I'm a libertarian and it is also why I'm a socialist.
@wowsa0 Are you also both dead and alive? No one can be both a socialist and a libertarian. Who decides issues of lifestyle; what to eat, drink, smoke, etc? The individual or the state? Another way of asking that question is, do you own yourself or does the state. Who decides how the fruits of the people's labor is spent? The individual or the state? And whose desires should you put above the other, those of you and your family or those the state?
@fzqlcs The term 'Libertarian' was originally used to describe socialists who were also anti-state. The state is not a necessary part of socialism. Do some research on libertarian socialism and you'll find that it is in theory supposed to empower individuals by putting decisions affecting them in their own hands. Not in the hands of the state and not in the hands of a private business.
@ilkkavu Those may be your choices, but not mine. Only a moron thinks most people are losers in capitalism. In America, folks below the poverty level are more likely to have larger living areas, an automobile, air conditioning and television than the middle class of nearly every other nation. You don't get intelligent duplicates (Hitler's super race) with socialism. Socialism only works for true losers seeking to give at the expense of others. Everyone else is stuck with no way out.
@fzqlcs People are getting poor in America. The middle class in disappearing.
You could get intelligent duplicates with genetic engineering. Nothing to do with Hitler's nonsense. Capitalism only works with endless growth. There is no growth in the future. The golden age of capitalism is over. There future society is highly automated. People's needs can be met without anybody living at the expense of others because most of the work is done by machines.
Really? Where do you think you got this magic box that gives you endless free entertainment, an unlimited amount of information within milliseconds, and the ability to speak instantly with people all over the world?
@ilkkavu You're plain wrong there, anyone who engages in free trade (basis of capitalism) is a winner, otherwise no one would want to trade in the first place. Capitalism isn't a zero-sum game, both parties gain from trade and the "economic pie" overall gets larger.
@ilkkavu Monopolies contain the seed of their own destruction, if a monopoly makes big profits, it will become more attractive to set up business in that sector while being slightly cheaper, thus forcing the old monopoly to become competitive again. Free trade isn't allowed to work, with the tariffs or quotas etc. that distort the market.
@ilkkavu The growth of the economic pie only depends on people's consumption, as long as people want more or to better their lot, there is room for growth.
@n8style No it doesn't. It depends on natural resources. Mostly energy. These resources are limited. The population can not grow for a very long time anymore. And when the growth stops, capitalism does not work anymore.
@ilkkavu The amount of energy that the world uses is a tiny fraction of the amount that the planet receives from the sun so there's no problem there.
Agree that the population can't continue to rise indefinitely, but even with no population growth living standards will continue to rise as long as there's capitalism.
@n8style There is a huge problem. It's called peak oil. Solar energy is very expensive.
Nothing can grow indefinitely and that's is the problem with capitalism. Capitalism demands growth. Otherwise it will not work. Living standards will grow only in poor countries like China. In western countries living standards will decline. 6 billion people with western living standards is impossible. There just insn't enought natural resources.
@ilkkavu Nonsense! It seems your reasoning is along the lines of, "suppose you have 5 people working a farm then increase it to 10, there will be much more production, but suppose you increase it to 100 the production per worker (and thus per capita wealth) will be far less." This is true in one special case, fixed technology. When technology grows (as in a free market), new inventions allow for greater crop yields, longer food storage, computers which make real wealth grow rapidly over time.
@ilkkavu Also, who says we will use only oil for the rest of eternity? Capitalism has a built in safeguard that works far better than any central government. It is called the price system. As the supply of oil is depleted, the price will rise, causing alternative energy sources to become more cost competitive. The less oil there is the more greedy entrepreneurs will research and invest in alternatives.
6) Markets can coexist with drastic forms of autocracy and despotism – as they did under eighteenth-century absolutism, not to speak of various sorts of military junta or fascist dictatorship in the twentieth century. But they can also be combined with advanced forms of parliamentary democracy. Market economies could also worsen the misery of broad masses, by an absolute lowering of their standard of living,
5)Similarly, market economies in the sense of ex post allocations of resources have historically existed in the most variegated forms. In principle, there could be market economies with ‘perfect’ free competition: though in practice this has hardly ever been realized. There can be market economies skewed by the dominance of powerful monopolies able to control large sectors of activity and so to fix prices over long periods.
4) You can have planning based on routine, custom, tradition, magic, religion, ignorance – planning rules by rain-makers,shamans, fakirs and illiterates of all kinds. Worst of all, you can have planning directed by generals; for every army is based on an a priori allocation of resources. You can have planning organized in a semi-rational way by technocrats or, at the highest level of scientific intelligence, by workers and disinterested specialists.
3)Both basic kinds of labour allocation have existed on the widest possible scale throughout history. Both are therefore quite ‘feasible’. Both have also been applied in the most variegated fashions, and with most diverse results. You can have ‘despotic’ planning and ‘democratic’ planning .You can have ‘rational’ planning and ‘irrational’ planning. .
2)These are the two basic ways of allocating resources, and they are fundamentally different from each other – even if they can on occasion be combined in precarious and hybrid transitional forms, which will not be automatically self-reproducing. Essentially they have a different internal logic.They generate distinct laws of motion. They diffuse divergent motivations among producers and organizers of production, and find expression in discrepant social values.
1)The term ‘planning’. The concept itself needs to be more precisely defined. Planning is not equivalent to ‘perfect’ allocation of resources, nor ‘scientific’ allocation, nor even ‘more humane’ allocation. It simply means ‘direct’ allocation, ex ante. As such, it is the opposite of market allocation, which is ex post.
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the mechanisms for capital market increased regional imbalances in development regions demand for capital grows, investments are growing, incomes are growing and still investments growing so the demand for capital , the banking system if not set in a different way, moved the savings from poorer areas to wealthier ones where the demand for capital is higher and higher profitability
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Myrdal and Perroux (theory of cumulative imbalances):market mechanisms lead to an imbalance in the use of regional resources, there is a tendency in the capitalist system to concentrate economic activities in areas where the development begins, leaving other areas with a stagnant or decline
There's a reason why there are no current adherents to the Stockholm school of economics (and that the similarities it had with Keynsian economics are being abandoned rapidly) and why Myrdal's theories about the welfare state are crumbling to dust. And there's an even better reason why the reputations of such "reactionaries" (Myrdal's term) as Friedrich A. Hayek and Milton Friedman continue to rise while neither Myrdal's nor Perroux's rise from obscurity.
Who supports these liberal theories of Friedman and vonHayek simply can not understand the fact that the free market will be given opportunities to catch people, but not everybody will be able to grasp, but only those who have economic power can exploit the Consequently the gap between rich and poor is growing, it's nice to live in the illusion that the world is a Cartesian plane where you can find a static equilibrium, but unfortunately it is not
Quite the contrary. While it is true that there is a great deal of wealth disparity in the US (and to a large extent that has to do with govt welfare programs and their detrimental effects), the fact is that the "poor" in the US, on average live comparably to the MIDDLE CLASS of Europe (including the countries you mentioned). The US has the wealthiest "poor" in the world. I don;t care that the rich are rich; I care that the poor are BETTER OFF under capitalism.
'm sorry, but I do not think that without unemployment benefits, a person who remains without a job, can get better ... I do not think that without minimum wage workers can get better, if we look at equilibrium in the labor market, you'll tell me that an increase in minimum wages or unemployment benefits leads to higher unemployment, so what is the way out? starve those without work or increase unemployment? there is something wrong with the system?
I'm sorry, but I'm not telling you what I "think". It is a fact that unemployment compensation, more than anything else, increases and prolongs unemployment. It is a fact that the minimum wage accomplishes nothing but the elimination of jobs. It is also a fact that the market does not require these things for workers to obtain employment and continuously improve their standard of living. And capitalism eliminates starvation.
as regards the success of the theories of Myrdal and Perroux I suggest you try to find as they were created industrial districts of Grenoble (France) will see that, where properly applied, they were really good ... greetings ...
I am unfamiliar with any special success of Grenoble. Industrial districts are (originally) a market phenomenon discussed by Marshall and reflected nothing more "the concentration of specialised industries in particular localities as individuals pursue their self-interests. The IWW tried to adopt a much distorted concept ruled by "workers councils" and Italy has promoted the concept but not with great success given relative living standards.
Well on this point we disagree, I believe that the so-called industrial clusters are the place for professional development and skills acquisition, where tissues of small and medium enterprises can compete with large companies, providing products and services of better quality, taking into account also the fact that each area has its own peculiarities which can be reflected on their productivity (what is now the case in Brazil),
The facts, again, are against you. In actual fact the evidence is overwhelming that the unhindered marketplace serves best to encourage competition and technological innovation and has led to markedly improved conditions for both workers and consumers (who get more and better products) than manipulated systems such as the one you suggest.
here I introduce the concept of bottom-up development to the contrary from the dawn of capitalist development that has found a development led by areas External
about the fact that socialism has never worked (but sorry you think Denmark, Sweden, Finland are third world countries or developed social democracies?), I ask you a question, motivated by the fact that the nations mentioned above will be the first that by 2020 will not use more oil, thus eliminating the factor that leads to excellence stagflation? when the free market will be able to do so?
The Scandinavian miracle is a fairy tale. The countries you mention have all been economically stagnating in realtion to countries (the US, Ireland, etc.) that have more greatly embraced capitalism. Their living standards (GDP per capita) have steadily fallen as a relative measure.
Even if it were remotely credible that those countries will not use more oil in 10 years, where did you get the bizarre notion that it leads to "excellence stagflation" (whatever that means)?
I think you know the Phillips curve, I think you know that it was Friedman to see her again in the '70s, when the original relationship between unemployment and inflation trade-off did not give more credible, there was in fact the phenomenon of stagflation is not it? what was the root cause of this phenomenon? mistake or was the fluctuation of oil prices?
Yes, I know the Phillips curve. I also know it is (and was) a fairy tale that doesn't hold in either the long or short term. The tentative realtionship was not undermined by the fluctuation of oil prices (if there was a problem with oil prices, it was that they were not permitted to fluctuate due to price controls) which never had any relationship to the curve in any event, but to the underlying assumptions behind the curve itself.
that a relationship exists between the stagflation of the 70s and the fluctuation of oil prices is not my ward, but a fact of life, highlighted by all economists, I suggest you read Macroeconomics by Olivier Blanchard, shows that the fluctuation of oil prices is reflected in the general prices and the balance of the labor market, bringing an increase in the natural rate of unemployment ... which leads to inflation and stagnation, commonly called stagflation
Your facts are nothing of the kind. The notion that oil was the casue (or a factor in) stagflation is not even a mainstream idea among Keynesians, Post Keynesians or even New Keynesians (of which Blanchard is part). And even if it were, the other economic schools, who combined comprise more than the Keynesians scoff at the notion. The most widely accepted theory is that inflation is a purely MONETARY phenomenon and not a function of any single commodity or the labor market.
I do not know about you on which books you've indoctrinated, and if you feel like you have time, try to study the effects on prices and price expectations in the medium and long term (AD-AS model) an increase in the price of oil .. .
for me the GDP per capita is not a reliable indicator of health status of a country, but if you like to consider this, I can only say that Norway is the third country in the world for per capita GDP (it is a fairy this?), I can say that Sweden, Denmark, Finland, come ahead of UK, Germany, France, Italy, Spain, Australia, etc. Now I do have another question, can you tell me what is the country with the highest rate of private debt in the world?
Socialists NEVER like the clean economic data. But there is an important point to be made. Economists do not rely solely on GDP per capita alone. It is invariably adjusted to factor out the distortions of massive oil wealth. Once that is done Qatar, Kuwait and Norway fall behind the United States and Ireland (two decidedly more capitalistic countries).
Of course, when one understands the data, this is obvious ... as is the fact that private debt is irrelevant to the discussion.
or me it's important to talk about private debt, since for the Austrian and monetarist theory the great evil of state intervention is the increase of public debt, that to be covered must lead to an increase in taxes, why not mention the private debt ? Why not say that the most capitalist country in the world that the United States is the country with the highest level of private debt in the world?
I didn't say private debt wasn't an important issue but that it is irrelevant in a discussion of capitalism vs. socialism. But since you asked, public debt is worse than private debt, becasue private debt is freely engaged in, is retired by the productive activities of those that incurred it, it doesn't inflate the money supply stealing money from savers and it dosen't fuel the boom and bust cycle.
That the US has the largest private debt does not alter relative levels of prosperity.
I have my doubts about what you say, first: compare private debt and public debt is important to understand how capitalism and socialism, capitalist countries have high levels of private debt, socialist countries (better call them interventionists) have a higher level public debt.
I do not believe that government debt is worse than the private sector, if I have to borrow to make me care hospital, to study, not free to choose, I resort to bank credit, and the ability to bank credit is based on the concept of multiplier of money, then there are two or increases the monetary base, or decrease the reserve bank, resulting in the first case of having a monetary expansion and a second to have fewer guarantees on bank deposits, what is worse? I do not know
The notion that govt debt isn't worse than private debt is completely unsustainable. The acquisition of personal debt dies not distort the economy as a whole, it does not create bust periods like we are now experiencing. In fact, the real problem you are describing (when mentioning the multiplier effect) is not a private debt issue at all but the expansion of the money supply by the central bank (a fundamentally socialst act).
the systematic use of private debt, create economic distortions, create bubble ready to burst, since, if we exclude the idea of increasing the monetary base to meet the growing demand for private credit (as would have the same effect of an increase in public spending ), The only alternative is to reduce the coefficient of bank reserves, with the risk of exposing the financial system to a state of insolvency General
NO economics school (not even the Keynesians who argue - incorrebtly - that it is "overproduction") maintains that private debt creates economic distortions in the form of "bubbles". In an evironment dominated by a central bank, such events can only occur as a direct result of the socialistic manipulation of the money supply by the central bank (or by printing money). You are invalidly confusing such activity with private debt in a capitalist economy.
The American economy has grown as families borrow to consume, coming to create a form of economic well-being fictitious. On the one hand with the use of Subprime lending, which was granted by banks with low interest rates, guarantees very low, then rose significantly and became unbearable for the families, and second through irresponsible use of credit cards (eg . revolving cards) which permit the deferral of charges on the uses at the end of the month, and indefinitely.
This time your response was pure economic ignorance from beginning to end. Economic growth results from production NOT consumption (it has nothing to do with consumer borrowing). Sub-prime lending resulted from expansion of the money supply by government and regulators insisting that lending standards must be lowered and promising losses would be socialized. The entire problem you describe is, BY DEFINITION, one of socialism - not capitalism.
is the production that determines the growth? true, but what determines the production? back to the old question, is the demand that determines the supply or the supply that determines the demand?Damage resulting from subprime mortgages in the first analysis can only be so short-sighted view from your explanation, the real damage comes from the securitization of the underlying debt that poisoned the entire world financial system, you tell me that the securitization of debt and social practices?
Economically, it is ALWAYS production that not only determines growth but PRECEDES demand as entrepreneurs respond to their expectations of the future.
Investment in subprimes resulted from the govt manipulation of the money supply radically distorting the risk signals in the marketplace. Such actions make it appear in the marketplace that leaving fund idle is actually riskier than taking on derivatives, etc. You are discussing the symptom, not the cause.
say it is supply that determines the application is the stupidest thing an economist (as you define yourself) can say, anticipate the demand does not mean create but discover latent needs, so discover the unmet demand (these are principles of marketing ), to emphasize that this is precisely the question that determines the supply and not the other way, you can produce what you want but if there is an application that supports the whole supply remains unsold, and there is no increase growth..
i think people have screwed up milton friedman's ideas and we need a libertarian leader soon
MrBigEnchilada 4 months ago
Very Interesting
rgnko7 6 months ago
He champions individuality, yet suggests we all have the same motivational style: Muhammed Ali would be a fighter regardless of what he was paid. Can Friedman explain why I am motivated to spend hours composing and studying music with little if any financial reward? Surely if financial accumulation was the only motivating factor, I would only direct my energies on the most fiscally promising activities. He may accuse me of self-indulgence, but not laziness.
Uberloinvongenchler 8 months ago
@Uberloinvongenchler Milton does not suggest that we all have the same motivational style. He suggests only that we should be free to use financial compensation, which is surely a motivator for many people. In the same way he would argue that you should be free to pursue your own interest by studying music. Milton does not, and would not, accuse you of laziness.
MrReasonableThinking 7 months ago
@MrReasonableThinking I think there is more to it than that. Friedman overestimates the importance of material rewards and fails to understand the complexity of their nature. First of all material rewards are effective only up to a certain point, when our basic needs are met their importance declines drastically (that is why the correlation between GDP and reported life satisfaction practically disappears in developed countries).
sasoslacek 7 months ago
@sasoslacek ....so in other words, you want to take advantage of the luxuries that taxation gives us all (theoretically), but when its ur time to contribute back to a society that has contributed to you and your success you balk? Does that about sum it up?
flipgood89 1 month ago
@flipgood89 I think you have the wrong person. I pay my taxes and have never claimed that taxes are a bad idea. In fact I think it would be a brilliant idea for the state to start collecting taxes from the rich as well as from the poor.
sasoslacek 1 month ago
@sasoslacek ....you're absolutely right...my comment should have been directed to someone else. My bad.
flipgood89 1 month ago
Respond to this video... Secondly, financial compensation is most effective as a motivational factor for simple manual work. When it comes to even simple mental tasks, psychological experiments have shown that the promise of financial compensation can even reduce performance. When it comes to complex intellectual and creative work, it would seem that financial rewards are not an adequate mode of compensation.
sasoslacek 7 months ago
@sasoslacek The degree to which people are motivated by financial compensation is irrelevant. Friedman simply insists that we should be free to compensate people financially, should we choose to do so. In fact, Friedman would champion your freedom to compensate people in non-financial ways, just as much as he advocated for people's right to free financial exchange.
MrReasonableThinking 7 months ago
@MrReasonableThinking ....yeah, but friedman and those who ascribe to his way of thinking engage in severe conformation bias, in order to draw their conclusions. For instance, that the "free market" is a neutral economic system that divides winners and losers based on hard work and merit. That is the guiding principle of Friedmans idea of "freedom" and when subject to any form of empiricism, has been throughly debunked.
flipgood89 1 month ago
@flipgood89 ... I'm not sure I understand your assertion.
Do you believe the lazy enjoy as much success as the hard working, in a free market?
You think that hard work doesn't help achieve success?
MrReasonableThinking 1 month ago
@MrReasonableThinking ....to answer your question --- well, of course not. The problem is that libertarian principles would have you believe that our economic distribution rewards the "hard working" and punishes the "lazy", which accounts for our social and economic stratification. Other people will argue that we have an imbalance in opportunities that controls these outcomes. and that our economic system is largely a result of power relationships, not merit.
flipgood89 1 month ago
@flipgood89 The effect of "an imbalance in opportunities" is not mutually exclusive with the positive impact of hard work. Both can be important.
Friedman certainly accepted that there is an imbalance of opportunities, and that factors other than hard work can contribute to success. However, he also saw the significance of both hard work and merit.
If you cannot see that hard work will produce better outcomes than laziness, you ought to reexamine the world around you.
MrReasonableThinking 1 month ago
@MrReasonableThinking . We are in agreement that hard work produces better outcomes than laziness, but how are we to tackle the imbalance of opportunities? That imbalance indicates a structural and institutional problem, and a violation of our social contract which is, theoretically, unconstitutional. How are we to solve that imbalance that the free market has produced? Govt?
flipgood89 1 month ago
@flipgood89 It is not the free market that creates inequality. You could blame it on god, nature, or random chance, but the fact that some people are born smarter, faster, happier, healthier, more attractive, or stronger is not the fault of free markets.
So, given the inequalities that exist in nature, how can we create the best society? As Friedman says, "A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both."
MrReasonableThinking 1 month ago
@MrReasonableThinking .Nobody is talking about innate abilities promoted by genetics. What we are talking about, for instance, is the difference in quality of education and resources for school districts of some neighborhoods vs. others. How can we reasonably expect children from disadvantaged schools to compete with children who attend schools with far greater advantages? The principles of this country are equality, not a second class citizenry. Society is controlling success. Thats the point.
flipgood89 1 month ago
@flipgood89 But those differences are ones which contribute to inequality. The logical reasoning your ideology would propose would be socialism and at it's worst communism. The aforementioned two systems simply do not work. You have to live in the real world, and that it is that it is sometimes not fair. Imperfections exist.
kazoh0lic 2 days ago
@flipgood89 (cont). No you didnt misinterpret my "of course not" response. Its just that phrases like hard work and merit dont paint a complete picture about our economic distribution, and often are inconsequential in who is rewarded. For instance, is Paris Hilton more talented, educated, and hardworking than all of the bottom fifth? How do we as a nation guard against an aristocracy like environment, and the disadvantaging of many in our populous, structurally?
flipgood89 1 month ago
@flipgood89 More simply:
How are we to solve the imbalance that nature (or god) has created?
We cannot. But by giving people freedom, we can at least afford people the best opportunity to rise through virtue, merit, and hard work.
Additionally free markets are the best means for improving the quality of life of those who have the least.
MrReasonableThinking 1 month ago
@flipgood89 Because I asked two questions, your answer: "of course not" was ambiguous and I may have misinterpreted it in my response. If it seems like I didn't get your message correct, please let me know.
MrReasonableThinking 1 month ago
I really like the casino metaphor, it is refreshingly honest. The house sets the rules, calculates the odds so that in the long run players always lose and walks away with their money in the end. The people play along in the vain hope of coming out of the whole stupid game a winner (which some of them do, but they are always the exception to the rule). The problem is clearly the casino itself and the fact that I can not opt out of the casino of capitalism.
sasoslacek 9 months ago
@sasoslacek What part of capitalism is it that you would like to opt out of? There are plenty of free market arrangements in which you partake, despite your alleged desire to "opt out". For example you were, when you posted that comment, making use of a computer and the internet, both of which you paid some cost to use.
MrReasonableThinking 9 months ago
@MrReasonableThinking Capitalism is not a sum of independent parts, it is the totality, a unity of contradictions if you will. You can not understand it by looking at concrete elements (markets) in isolation. There is another more concrete problem from the historical perspective: if you say that capitalism is just a bunch of markets (reminds me of the slogan that communism=soviets+electrification), you will have to conclude that capitalism has always existed and miss what is specific to it.
sasoslacek 9 months ago
@sasoslacek Although capitalism could be considered "a bunch of markets," the definition is more than that. It is an economic arrangement in which nearly all markets are free. Thus, I am not forced to conclude that capitalism has always existed.
Allow me to rephrase my original question so that you might answer it. What is it about capitalism that makes you want to "opt out"? Perhaps you could thoroughly answer this question by including what you believe capitalism is.
MrReasonableThinking 9 months ago
@MrReasonableThinking I think you need to define what you mean by markets being free before we can continue that part of the discussion.
As for why I would like to go beyond capitalism, we could start with the current crisis, depletion of natural resources and prospects of an ecological disaster, immense poverty across the globe, concentration of economic power that makes true democracy impossible, increasing intensity of work for those employed and rising unemployment for the others.
sasoslacek 9 months ago
@sasoslacek Is your distaste for "the current crisis... and rising unemployment" rooted in your own suffering, the suffering of others, or both?
MrReasonableThinking 9 months ago
@MrReasonableThinking I don't see how this is relevant to the discussion, but I'll play along. I am one of the privileged few and suffering from economic hardship is not something I would have first hand experience with, the crisis did not change that.
sasoslacek 9 months ago
@sasoslacek The alleged effects of capitalism, listed above, are presumably a bad thing because they cause you or others to suffer. It would seem then that you believe capitalism is a bad thing, not for those reasons alone, but rather because "crisis...ecological disaster, immense poverty..." cause people to suffer.
Capitalism and its effects have apparently not caused you to suffer, so I still wonder why you wish to opt out. Do you wish to opt for the sake of others' suffering?
MrReasonableThinking 9 months ago
@sasoslacek I feel it relevant to determine the root of your distaste for the aforementioned capitalist issues, because if indeed it stems from suffering, I would challenge that assumption. Rather than individually challenging pieces of your anti-capitalist notion, like the alleged increasing intensity of work, I would rather contest your fundamental reason for opposition to capitalism, which I imagine is that you believe it causes suffering (though not your own).
MrReasonableThinking 9 months ago
@MrReasonableThinking Indeed, we can start the debate there and let me be more precise: capitalism has achieved marvels completely unimaginable in any prior mode of production, brought material well-being to millions, brought with it limited political democracy (a huge improvement over the unlimited autocracy of royalty). Yet still more than half the world population lives in poverty, we are quickly depleting the planets resources and destroying ecosystems.
sasoslacek 9 months ago
@sasoslacek So it seems that your oncern is for the suffering of others. Natural resources are only valuable as a tool for improving the lot of mankind, and widespread poverty is presumably bad because it is synonymous with suffering. Unless you value ecosystems in themselves more than human suffering, rather than as they are relevant to the human race, your argument seems to be rooted in the belief that capitalism causes unjust suffering for many people.
Is this correct?
MrReasonableThinking 9 months ago
@MrReasonableThinking Close enough. Although I would not make my point on the basis of justice, rather that 1) we are all going to be up shit creek if we go on like this and that 2) much of the suffering is needless given the development of productive forces and could therefore be alleviate with a different social organization of production.
sasoslacek 9 months ago
@sasoslacek So your concern is for the current, allegedly avoidable, suffering and for the future suffering of all?
If this is correct, I will move forward. I believe that capitalism alleviates, rather than causes, suffering, in both the present and the future.
MrReasonableThinking 9 months ago
@MrReasonableThinking OK, that is a rather broad point, but we can start from there.
sasoslacek 9 months ago
@sasoslacek Capitalism, by allowing people the freedom to use their property as they see fit, puts those resources to work as efficiently as possible. If we examine the alleged failures of capitalism you noted above, several of them are actually perfect examples of the brilliance of capitalism. In the following posts I'll explain a few of the successes relevant to the points you noted. I'll include "the current crisis," "the depletion of natural resources," intensity of work." and "unemployment"
MrReasonableThinking 9 months ago
@sasoslacek Although fiscal crises come and go, in the long run, they are insignificant. Even the largest recessions or depressions are but a blip in the radar compared to the economic improvement we see over the long run. Note the impact of the great depression in a chart of "cumulative total return of US equities from 1802 to 2010" (google that phrase for a chart). It's easy to accuse capitalism of failure if you blind yourself to vast economic growth while focusing on short term volatility.
MrReasonableThinking 9 months ago
@MrReasonableThinking "It's easy to accuse capitalism of failure if you blind yourself to vast economic growth while focusing on short term volatility." It's also easy to miss the bigger picture, namely that both the benefits of economic growth and the burdens of crises are shared extremely unequally. Those that are bearing the brunt of the crisis in the US for example shared little of the benefits of economic growth during the last thirty years. Skyrocketing prices of education ...
sasoslacek 9 months ago
@sasoslacek ... and healthcare along with other prices meant that real wages were rising only marginally if at all. There was a significant increase in the share of low-income jobs at the expense of middle-income jobs, masses of college graduates working as flight attendants or parking lot attendants etc. The brunt of the crisis is borne by the middle and lower classes in the form of unemployment and decreased home equity. And they don't qualify for government bail-outs.
sasoslacek 9 months ago
@sasoslacek You suggest that the poor "shared little of the benefits of economic growth," and go on to cite examples that seem to illustrate a falling real wage and declining quality of life, including rising costs of education, and difficulty earning high wage jobs. Unfortunately your examples aren't representative of economic reality. Despite anecdotal hardships that exist in today's society, the middle and lower classes have seen significant gains in real compensation and quality of life.
MrReasonableThinking 7 months ago
@MrReasonableThinking That is not true. If you look at actual data you will find that in the US at least real wages have been increasing marginally for the middle class, yet the rise was negligible compared to the first few decades after world war II. It is not quite clear what was happening to real wages of the lower class, some data shows that they were declining, other data shows that they were increasing marginally, in any case there certainly was no significant improvement.
sasoslacek 7 months ago
@MrReasonableThinking In any case the problem during the last forty years both in the US and in Europe was that wages did not keep pace with productivity. While wages as a share of GDP were declining in Europe and basically stagnating in the US, productivity has been increasing rapidly. So the gap was being patched up with household debt and we all know where that got us.
sasoslacek 7 months ago
@sasoslacek Real wage growth as defined by total hourly compensation has grown in step with productivity. Please google "trends in real wage growth chicago fed" for a concise, but clear explanation. If you can provide primary source data that demonstrate flat real hourly compensation growth, I would love to see it. The latter measure is preferable because it takes into account all benefits a worker receives for each hour of labor he endures. The Chicago Fed study elaborates.
MrReasonableThinking 7 months ago
@MrReasonableThinking I hope that as you gain a better understanding of the economic reality, you'll begin to consider the possibility that capitalism actually benefits all people, not just the wealthy.
MrReasonableThinking 7 months ago
@MrReasonableThinking Well, I don't know where this study contradicts what I have written about real wages. It's just as I have claimed: "However, the data do suggest that growth in average real wages has slowed significantly since the 1960s and 1970s." I have never claimed there was a decrease or even stagnation.
sasoslacek 7 months ago
@sasoslacek I'm not sure if you did not read the whole study, or did not understand its conclusion. I think this quote is illuminating: "once proper account is taken of relative price change, there has been no major change in the relationship between real wages and productivity." That directly contradicts your previous statement. The quote you cite is from the authors' discussion of incomplete data analysis.
MrReasonableThinking 7 months ago
@MrReasonableThinking The author is clear enough that misunderstanding is impossible. What I quoted is not purely a methodological discussion but a discussion of the trends in real wages and the fact that the positive trend has slowed significantly. The second part of the article deals with the relationship with productivity and this is a separate problem. Have not had time to look into that part carefully, will get back to you when I do.
sasoslacek 7 months ago
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@sasoslacek Allow me to clarify how the study contradicts your claims. You said, "wages did not keep pace with productivity," while the Chicago Federal Reserve found that, "there has been no major change in the relationship between real wages and productivity."
MrReasonableThinking 7 months ago
@sasoslacek I see now that you are continuing to look into the article. My mistake overlooking your last line. Enjoy.
MrReasonableThinking 7 months ago
@sasoslacek Given that we want natural resources to be used in the way that benefits humanity most, we should be indifferent to current vs. future consumption, with a desire only for the most beneficial outcome. By allowing for the free market to operate, we harness its knowledge. If it's true that resources being used today would be more useful in the future, individuals can simply buy resources, and sell them when they are needed in the future, creating efficient allocations through time.
MrReasonableThinking 9 months ago
@MrReasonableThinking Worth noting, is that if you believe that the market is failing to limit its resource consumption to an efficient level, you can profit from the failure by buying commodities. In fact, anyone can protect themselves from the alleged market failure. The truth is though, that the market sets incredibly efficient prices for resources because of the free markets for those resources. For example, traders buy oil futures simply to save oil for future use.
MrReasonableThinking 9 months ago
@MrReasonableThinking "The truth is though, that the market sets incredibly efficient prices for resources because of the free markets for those resources." True, providing that there are sufficient alternatives available. But since the totality of resources is limited growth also reduces the availability of resources. That is something that the market can not take into account: that at some point there my be nothing to chose from, nothing to enter the market.
sasoslacek 9 months ago
@sasoslacek You say, "[the limited nature of resources] is something that the market can not take into account." Yet this is certainly not the case. Even in the case of limited resources, markets can make rational decisions. Certainly market participants will consider the scarcity of resources when they choose to buy or sell such resources. Thus, the markets can and do "take that into account."
MrReasonableThinking 7 months ago
@MrReasonableThinking By definition markets do not take account of externalities. In economic literature this problem is referred to as the tragedy of the commons: participants in a market acting rationally will necessarily deplete common resources.
sasoslacek 7 months ago
@sasoslacek In the absence of property rights, a tragedy of the commons occurs. That's why it's important to allow private ownership of our earth's resources.
Though I'm tempted to continue to elaborate on why resources are efficiently conserved, when we allow for private ownership and free markets, I would prefer, for now, to focus on the power of capitalism to benefit the poor, through growth in productivity and real wages. Please see my recent comments on the topic and the relevant study.
MrReasonableThinking 7 months ago
@MrReasonableThinking I would like to linger on this point a bit longer. There is a problem, namely that there can not be private ownership of the earth's resources, at least not without disastrous consequences. Would you like to see all those people that can not afford proper food to also suffocate as a consequence of not being able to afford air? And who would own the air? It is there, nobody produced it, nobody can legitimately lay a claim on it.
sasoslacek 7 months ago
@MrReasonableThinking Regarding "efficient allocations through time". This crisis shows that that sort of allocation is quite irrational. People don't have sufficient knowledge of the future and make their decisions based on insufficient information and flawed expectations (i.e. housing prices will rise for ever at the current rate). A second problem are externalities. Since the costs of pollution are shared by all and not by the polluter directly, markets make pollution rational.
sasoslacek 9 months ago
@MrReasonableThinking A similar thing goes for the allocation of risk. Take Fukushima for example. It is perfectly ludicrous to build a nuclear power plant where it stands, but it was still built. Since the risks are shared widely, but the profits from taking high risks to decrease costs are enjoyed by the company directly, market rationality demands that highly irrational decisions are taken.
sasoslacek 9 months ago
@MrReasonableThinking Another thing is the time span with which actors on the market operate. The performance of CEOs is judged on a quarterly and yearly basis. The effects of human action on the environment can make themselves felt and manifest as costs only after decades or even centuries. Climate change is beginning to manifest as a cost only when it is far too late to prevent it from happening.
sasoslacek 9 months ago
@MrReasonableThinking The problem is that a substantial amount of suffering today is needless given the tremendous power of our productive forces and that negative consequences of economic growth might soon outweigh the positive ones. Therefore a different organisation of productive forces is needed.
sasoslacek 9 months ago
@sasoslacek Capitalism is about competition. Competition is the driver of productive forces. Unless you're Buddhist, humans naturally have desires. People want stuff they like, there is limited stuff, and thus people must compete for this stuff. Luck makes some better at competing than others. That's a given. The tough and skilled get the stuff, the pussies and fairies cry about their failures and blame the system. However, the system encourages invention and efficiency, benefiting the whole.
GodOfSkyAndThunder 9 months ago
@GodOfSkyAndThunder Well, Tarzan, for us living in civilization it is not quite as simple as that. Society is not an ant colony where the "tough and skilled" get "stuff" and that is that. We are not born with the skills needed to function in society, we acquire them during socialization. Luck itself is a product of society (there is nothing natural about sub-saharan Africa being poor) it is not a pre-existing condition.
sasoslacek 9 months ago
@sasoslacek Then why do you give a fuck? If you are "one of the privileged few," and thus lucky, seize this opportunity to increase your fucking capital, bro. Spend your time and resources developing money-making skills. It's the right move. I'll say it now and will say it again: Money makes you happier, all else equal. Don't waste your time pussying out and trying to legitimize yourself by making dumb liberal comments on this site.
GodOfSkyAndThunder 9 months ago
@GodOfSkyAndThunder That's the first time anybody has accused me of being a liberal. And on the basis of my critique of an orthodox liberal. How did you come to that conclusion?
There is no ceteris paribus with money. You have to earn it. If earning it causes you more distress than spending it will give you pleasure, there is no reason to earn it. If I have no use for the extra money, why the hell should I bother?
sasoslacek 9 months ago
@sasoslacek Capitalism is a perfect system given the way the universe naturally operates. Milton is a clever shit and is entirely correct. Humans accept, with their limited brains, that luck is a phenomenon that exists. To humans, everything in the universe is initially luck. As Milton-beast discusses, you cannot choose to be born talented, to a wealthy family, or with a massive cock or a small cock. However, given luck in the universe, the system of Capitalism maximizes good. More later.
GodOfSkyAndThunder 9 months ago
@GodOfSkyAndThunder Capitalism is a human product, we created it and we recreate it on a daily basis. The universe did not come down to earth and create it to suit its "natural" operation. Capitalism maximises nothing, the whole can not be in a causal relationship with its part. In capitalism some prosper, some don't, it's good for some, terrible for others. Simply bleating "capitalism gooood" does not help us understand anything about it.
sasoslacek 9 months ago
...but this isn't true in the fact of it's application.
Keynes' fraud-theft system of the mass murdering Debt Syndicate, replaced anything even remotly kin to sane economics.
By the time of the Great Depression this had blossomed into a full power plundering War of Aggression system. Guess who financed both Lennin and then Hitler? That would be the Wall Street, City of London & Vatican City BANKERS!
ARREST THE GOD DAMN BANKERS
centurion180ad 10 months ago
@centurion180ad Are you mad because your poor? Are you mad because your so ignorant that you cant figure out a way to profit from the evil horrid bakers? Arrest them for what? They haven't committed any crime. Oh wait there smarter then you. I guess thats there crime.
brianGosh1 10 months ago
@brianGosh1 I know a way to profit, and it's the way Al Capone did it. There is no other way. Who in the Hell do you think all these invasions are for? Are you so //stupid// & //blind//? 3 days after the announcement of the bombardment of Libya, there was ALREADY a new central bank set up by the IMF. The reason for removing Saddam ultimatly, was because he was refusing to sell his oil in dollars. All those carbon taxes go to private cental banks. Fiat currency is pure theft. Wake up!
centurion180ad 10 months ago
Forceful redistribution of wealth cannot make everyone equally prosperous. It can, unfortunately, make everyone equally poor. Free market capitalism based on voluntary exchange is actually the humanitarian approach. As Friedman says: It is impossible to tax a corporation without punishing shareholders, consumers, and employees. As Mises noted, the interests of these groups are not antagonistic under a capitalist system.
weavermama 11 months ago 10
@weavermama very well said.
adulby 10 months ago
@weavermama ....you cant view taxation as "punishment" ....America promotes the success of corporations through order, laws, and infrastructure. Those things are not free, my friend.
flipgood89 1 month ago
@flipgood89 "Government is good at one thing: It knows how to break your legs, hand you a crutch, and say, "See, if it weren't for the government, you wouldn't be able to walk."~Harry Browne. To the extent you are referring to the adjudication of disputes by courts, and laws against the initiation of violence and fraud, we are in agreement. Such a constitutionally limited government has historically necessitated less than 4% taxes as a share of GDP.
weavermama 1 month ago
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While statists fallaciously employ the zero sum game argument in regards to private wealth generated through voluntary exchange, they refuse to acknowledge its legitimate application to the coercive transactions of govt. redistribution ( whereby for one party to be enriched, the other must, by necessity, be impoverished).
weavermama 1 month ago
@flipgood89 In your opinion, has there ever been a burdensome rate of taxation in human history? Between shareholders, employees, and consumers, who would you wish to see pay more in taxes? Could a Govt. levy taxes at 99% with no deleterious effects? Are you familiar with the Laffer Curve? Did you know that in 1913, only 0.5 % of income was taxable? Folks who earned over 250,000 in todays dollars paid 1 %, and those making over 6 million paid only 7%.
weavermama 1 month ago
@weavermama ...I wouldnt use the economic character of the early 20th century as evidence to support your claims considering it was that environment which led to the great depression (centralization of wealth & lack of econ exchange). Empirical analysis of our tax structure and rates indicates a burden that is weighted in the middle. Thats unfair. The theoretical concept of paying taxes so that we promote a healthy, educated, safe populous is not. The quality of taxation is askew, not the idea.
flipgood89 1 month ago
@flipgood89 LOL. I used the year 1913 because it was the year that the income tax was first levied on the American people. The Federal Reserve Act along with the economic central planning by BOTH Hoover and Roosevelt were responsible for the Great Depression. Are you aware that the 16th amendment conferred no new power of taxation? An individual cannot delegate to govt. a right he himself does not posses. If it is immoral for individuals to use force to deprive others of their rightful.....
weavermama 1 month ago
........Property, then it is likewise immoral for them to delegate that task to a government, even a democratically elected one. When you subsidize something you get more of it; when you tax something you get less of it. What do you expect would be the result of taxing the generation of wealth and subsidizing dependence?
weavermama 1 month ago
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flipgood89 1 month ago
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@weavermama ...welfare is supposed to encourage mobility by providing a baseline standard of living conditions. The effect of dependence on welfare (dependence is overstated, btw) is the effect of an imbalance in social and economic opportunities. We generated a social contract in order to uphold the constitutional spirit of general welfare and equality for all. Its in societies best interest to have a educated and well-balanced populous, not an aristocracy.
flipgood89 1 month ago
Norway, Sweden and Finland all have lower business taxes and 70% of their GDP 's are created in the private sector. They are NOT socialist state planned economies.
warriorprince1010 1 year ago
so freidman likes unfairness, who knew but why douse he talk about the strongest and the luckyest not about the weakest and the most vaunerable, this is the problem with the extreme right they don't care about thye weakest amoungst us
rictorn 1 year ago
@rictorn Friedman was born incredibly poor.
Even so, you're not taking anything into account. You're not taking the menial jobs offered by western companies that pulled Hong Kong out of poverty, and is now enriching India, or the multi-generational head start places like Europe, North America, and Japan have on other places in the world. You're taking a lot of things for granted, Not long ago, there were wealth gaps in this in what is now the 1st world. It was the market that improved this.
jrsub3 1 year ago
@jrsub3 you mean as a child? i belive you, it was a time (pre ragan, thater ow & freidman) due to ameicas ideals & kainsian economics when it was easier to start poor in england & america and become well off, now of corse its the mainland eourpean economies which offer this chance, sadly not our semi freidmanite economies, they are a poor advert for feriedmans ideas, sama as marx, very clever good analists,there solyutions have been totaly disproven by history marx and freidman miror imeges
rictorn 1 year ago
@jrsub3 i agree with your development sentiment, thats why i am a kainsian who belives in mixed economies and a fair distribution of wealth, if you a fudel subsistance economy is absolutly no use for getting people out of poverty, but the worst type of capitalist economy for poor people anywhere especial in poor countries, its a very unregulated explotative economy, where the developed companies take the vast majority of the wealth, & only share it with the rich elite & the poor get exploited
rictorn 1 year ago
@jrsub3 its easy to have rich city states, even rich small countries, based on sucking wealth from elsewhere, rather than being based on 'socialuy useful labour' its based on collecting money, no employing a mass of people, these places are have no social useful perpose as there is no way to distribute the money fairly through work
rictorn 1 year ago
This is like listening to a serial killer talk about fairness. This claim of financial wizardry by america is disgusting. We stole a continent, scraped everything up off the ground and put it on the stockmarket!! We ruthlessly dump our surpluses on weaker nation in class based action. Fucking Pigs.
theFranksandtheBeans 1 year ago
@theFranksandtheBeans what do u think requires a benevolent anarchy... and dont u think if gold was the only currency, and gambling was the only profession, it would be a fairer world than the world of pigs?
pranab69 1 year ago
There's nothing wrong with everybody being a duplicate if everybody would be beautiful and intelligent. Boxing is idiotic. Muhammed Ali ruined his health.
ilkkavu 1 year ago
@ilkkavu "Nothing wrong with everyone being a duplicate?" Are you sure you are not a duplicate of Adolph Hitler? He shared that vision.
fzqlcs 1 year ago
Is it fair, that Milton Friendman is the most wise man ever to live? NO! But what if he didn't exist!
AroundSun 1 year ago
I'm a libertarian and I'm a socialist and I agree with everything said in this video. I think the market is an excellent anarchic tool for allocating resources and I most definitely believe that decisions should be made by the people who will face the consequences of those decisions. That's why I'm a libertarian and it is also why I'm a socialist.
wowsa0 1 year ago
@wowsa0 Are you also both dead and alive? No one can be both a socialist and a libertarian. Who decides issues of lifestyle; what to eat, drink, smoke, etc? The individual or the state? Another way of asking that question is, do you own yourself or does the state. Who decides how the fruits of the people's labor is spent? The individual or the state? And whose desires should you put above the other, those of you and your family or those the state?
fzqlcs 1 year ago
@fzqlcs The term 'Libertarian' was originally used to describe socialists who were also anti-state. The state is not a necessary part of socialism. Do some research on libertarian socialism and you'll find that it is in theory supposed to empower individuals by putting decisions affecting them in their own hands. Not in the hands of the state and not in the hands of a private business.
wowsa0 1 year ago
@fzqlcs I am a libertarian socialist.
ilkkavu 1 year ago
@ilkkavu You were 100 percent socialist 3 minutes ago.
fzqlcs 1 year ago
@fzqlcs Who would you rather be: a beautiful and intelligent duplicate or an ugly stupid loser? Most people are losers in capitalism.
ilkkavu 1 year ago
@ilkkavu Those may be your choices, but not mine. Only a moron thinks most people are losers in capitalism. In America, folks below the poverty level are more likely to have larger living areas, an automobile, air conditioning and television than the middle class of nearly every other nation. You don't get intelligent duplicates (Hitler's super race) with socialism. Socialism only works for true losers seeking to give at the expense of others. Everyone else is stuck with no way out.
fzqlcs 1 year ago
@fzqlcs People are getting poor in America. The middle class in disappearing.
You could get intelligent duplicates with genetic engineering. Nothing to do with Hitler's nonsense. Capitalism only works with endless growth. There is no growth in the future. The golden age of capitalism is over. There future society is highly automated. People's needs can be met without anybody living at the expense of others because most of the work is done by machines.
ilkkavu 1 year ago
@ilkkavu
"Most people are losers in capitalism"
Really? Where do you think you got this magic box that gives you endless free entertainment, an unlimited amount of information within milliseconds, and the ability to speak instantly with people all over the world?
EGarrett01 1 year ago
@EGarrett01 From research done with public sector financing.
ilkkavu 1 year ago
@ilkkavu
Really? And how did you end up with it?
EGarrett01 1 year ago
@ilkkavu You're plain wrong there, anyone who engages in free trade (basis of capitalism) is a winner, otherwise no one would want to trade in the first place. Capitalism isn't a zero-sum game, both parties gain from trade and the "economic pie" overall gets larger.
n8style 1 year ago
@n8style That is a naive view. Free trade just does not exist and does not work. Capitalism leads to monopolies that destroy the free market.
ilkkavu 1 year ago
@ilkkavu Monopolies contain the seed of their own destruction, if a monopoly makes big profits, it will become more attractive to set up business in that sector while being slightly cheaper, thus forcing the old monopoly to become competitive again. Free trade isn't allowed to work, with the tariffs or quotas etc. that distort the market.
n8style 1 year ago
@n8style The times for indefinitely growing "economic pie" are over.
ilkkavu 1 year ago
@ilkkavu The growth of the economic pie only depends on people's consumption, as long as people want more or to better their lot, there is room for growth.
n8style 1 year ago
@n8style No it doesn't. It depends on natural resources. Mostly energy. These resources are limited. The population can not grow for a very long time anymore. And when the growth stops, capitalism does not work anymore.
ilkkavu 1 year ago
@ilkkavu The amount of energy that the world uses is a tiny fraction of the amount that the planet receives from the sun so there's no problem there.
Agree that the population can't continue to rise indefinitely, but even with no population growth living standards will continue to rise as long as there's capitalism.
n8style 1 year ago
@n8style There is a huge problem. It's called peak oil. Solar energy is very expensive.
Nothing can grow indefinitely and that's is the problem with capitalism. Capitalism demands growth. Otherwise it will not work. Living standards will grow only in poor countries like China. In western countries living standards will decline. 6 billion people with western living standards is impossible. There just insn't enought natural resources.
ilkkavu 1 year ago
@ilkkavu Nonsense! It seems your reasoning is along the lines of, "suppose you have 5 people working a farm then increase it to 10, there will be much more production, but suppose you increase it to 100 the production per worker (and thus per capita wealth) will be far less." This is true in one special case, fixed technology. When technology grows (as in a free market), new inventions allow for greater crop yields, longer food storage, computers which make real wealth grow rapidly over time.
netster007z 1 year ago
@ilkkavu Also, who says we will use only oil for the rest of eternity? Capitalism has a built in safeguard that works far better than any central government. It is called the price system. As the supply of oil is depleted, the price will rise, causing alternative energy sources to become more cost competitive. The less oil there is the more greedy entrepreneurs will research and invest in alternatives.
netster007z 1 year ago
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6) Markets can coexist with drastic forms of autocracy and despotism – as they did under eighteenth-century absolutism, not to speak of various sorts of military junta or fascist dictatorship in the twentieth century. But they can also be combined with advanced forms of parliamentary democracy. Market economies could also worsen the misery of broad masses, by an absolute lowering of their standard of living,
zsylvana 1 year ago 3
5)Similarly, market economies in the sense of ex post allocations of resources have historically existed in the most variegated forms. In principle, there could be market economies with ‘perfect’ free competition: though in practice this has hardly ever been realized. There can be market economies skewed by the dominance of powerful monopolies able to control large sectors of activity and so to fix prices over long periods.
zsylvana 1 year ago 4
4) You can have planning based on routine, custom, tradition, magic, religion, ignorance – planning rules by rain-makers,shamans, fakirs and illiterates of all kinds. Worst of all, you can have planning directed by generals; for every army is based on an a priori allocation of resources. You can have planning organized in a semi-rational way by technocrats or, at the highest level of scientific intelligence, by workers and disinterested specialists.
zsylvana 1 year ago 2
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3)Both basic kinds of labour allocation have existed on the widest possible scale throughout history. Both are therefore quite ‘feasible’. Both have also been applied in the most variegated fashions, and with most diverse results. You can have ‘despotic’ planning and ‘democratic’ planning .You can have ‘rational’ planning and ‘irrational’ planning. .
zsylvana 1 year ago 2
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2)These are the two basic ways of allocating resources, and they are fundamentally different from each other – even if they can on occasion be combined in precarious and hybrid transitional forms, which will not be automatically self-reproducing. Essentially they have a different internal logic.They generate distinct laws of motion. They diffuse divergent motivations among producers and organizers of production, and find expression in discrepant social values.
zsylvana 1 year ago 2
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1)The term ‘planning’. The concept itself needs to be more precisely defined. Planning is not equivalent to ‘perfect’ allocation of resources, nor ‘scientific’ allocation, nor even ‘more humane’ allocation. It simply means ‘direct’ allocation, ex ante. As such, it is the opposite of market allocation, which is ex post.
zsylvana 1 year ago 2
Wow fletchforfreedom, there is not much to say to your arguments.
But this; Typing what the facts are doesnt make it true, that just says its like this cause I say so.
Any actual graph of wealth will make you look stupid with your poor people are richer in the US statement.
There is no such thing as capitalism and there never has been, you bitch about the banking system printing money and suddenly thats socialist.
Its all a part of your worshipped system of exploitation.
demammoet 1 year ago
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demammoet 1 year ago
Wow why dont you start off with generalized vagueness and negative stereotypes to make your point.
Hes not advocating his logic hes bashing anything non capitalist without actual argumentation, just emotional bashing.
Like socialism actually turns us all into drones, what planet is he from, like we change species.
In the end its a pep talk, "win or loose we benefitted from them taking a chance"?
Nothing said, that isnt economics thats not reason and explaination.
That is spin.
demammoet 1 year ago
@demammoet Wow. Why don't you miss the point a little more.
syghur 1 year ago
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the negative effects of backward areas are greater than the benefits they derive from contact with the developed areas
losheva 2 years ago
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the mechanisms for capital market increased regional imbalances in development regions demand for capital grows, investments are growing, incomes are growing and still investments growing so the demand for capital , the banking system if not set in a different way, moved the savings from poorer areas to wealthier ones where the demand for capital is higher and higher profitability
losheva 2 years ago
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Myrdal and Perroux (theory of cumulative imbalances):market mechanisms lead to an imbalance in the use of regional resources, there is a tendency in the capitalist system to concentrate economic activities in areas where the development begins, leaving other areas with a stagnant or decline
losheva 2 years ago
This is not about theories retard !
mwangolatrue 2 years ago
Perhaps it is not known theories to you, Myrdal's theoretical key concept "circular cumulative causation" (the theory)
contributed to the development of modern Non-equilibrium economics
losheva 2 years ago
There's a reason why there are no current adherents to the Stockholm school of economics (and that the similarities it had with Keynsian economics are being abandoned rapidly) and why Myrdal's theories about the welfare state are crumbling to dust. And there's an even better reason why the reputations of such "reactionaries" (Myrdal's term) as Friedrich A. Hayek and Milton Friedman continue to rise while neither Myrdal's nor Perroux's rise from obscurity.
Socialism has never worked.
FletchforFreedom 2 years ago
Who supports these liberal theories of Friedman and vonHayek simply can not understand the fact that the free market will be given opportunities to catch people, but not everybody will be able to grasp, but only those who have economic power can exploit the Consequently the gap between rich and poor is growing, it's nice to live in the illusion that the world is a Cartesian plane where you can find a static equilibrium, but unfortunately it is not
losheva 2 years ago
Quite the contrary. While it is true that there is a great deal of wealth disparity in the US (and to a large extent that has to do with govt welfare programs and their detrimental effects), the fact is that the "poor" in the US, on average live comparably to the MIDDLE CLASS of Europe (including the countries you mentioned). The US has the wealthiest "poor" in the world. I don;t care that the rich are rich; I care that the poor are BETTER OFF under capitalism.
FletchforFreedom 2 years ago
'm sorry, but I do not think that without unemployment benefits, a person who remains without a job, can get better ... I do not think that without minimum wage workers can get better, if we look at equilibrium in the labor market, you'll tell me that an increase in minimum wages or unemployment benefits leads to higher unemployment, so what is the way out? starve those without work or increase unemployment? there is something wrong with the system?
losheva 2 years ago
I'm sorry, but I'm not telling you what I "think". It is a fact that unemployment compensation, more than anything else, increases and prolongs unemployment. It is a fact that the minimum wage accomplishes nothing but the elimination of jobs. It is also a fact that the market does not require these things for workers to obtain employment and continuously improve their standard of living. And capitalism eliminates starvation.
FletchforFreedom 2 years ago
as regards the success of the theories of Myrdal and Perroux I suggest you try to find as they were created industrial districts of Grenoble (France) will see that, where properly applied, they were really good ... greetings ...
losheva 2 years ago
I am unfamiliar with any special success of Grenoble. Industrial districts are (originally) a market phenomenon discussed by Marshall and reflected nothing more "the concentration of specialised industries in particular localities as individuals pursue their self-interests. The IWW tried to adopt a much distorted concept ruled by "workers councils" and Italy has promoted the concept but not with great success given relative living standards.
FletchforFreedom 2 years ago
Well on this point we disagree, I believe that the so-called industrial clusters are the place for professional development and skills acquisition, where tissues of small and medium enterprises can compete with large companies, providing products and services of better quality, taking into account also the fact that each area has its own peculiarities which can be reflected on their productivity (what is now the case in Brazil),
losheva 2 years ago
The facts, again, are against you. In actual fact the evidence is overwhelming that the unhindered marketplace serves best to encourage competition and technological innovation and has led to markedly improved conditions for both workers and consumers (who get more and better products) than manipulated systems such as the one you suggest.
FletchforFreedom 2 years ago
here I introduce the concept of bottom-up development to the contrary from the dawn of capitalist development that has found a development led by areas External
losheva 2 years ago
about the fact that socialism has never worked (but sorry you think Denmark, Sweden, Finland are third world countries or developed social democracies?), I ask you a question, motivated by the fact that the nations mentioned above will be the first that by 2020 will not use more oil, thus eliminating the factor that leads to excellence stagflation? when the free market will be able to do so?
losheva 2 years ago
The Scandinavian miracle is a fairy tale. The countries you mention have all been economically stagnating in realtion to countries (the US, Ireland, etc.) that have more greatly embraced capitalism. Their living standards (GDP per capita) have steadily fallen as a relative measure.
Even if it were remotely credible that those countries will not use more oil in 10 years, where did you get the bizarre notion that it leads to "excellence stagflation" (whatever that means)?
FletchforFreedom 2 years ago
I think you know the Phillips curve, I think you know that it was Friedman to see her again in the '70s, when the original relationship between unemployment and inflation trade-off did not give more credible, there was in fact the phenomenon of stagflation is not it? what was the root cause of this phenomenon? mistake or was the fluctuation of oil prices?
losheva 2 years ago
Yes, I know the Phillips curve. I also know it is (and was) a fairy tale that doesn't hold in either the long or short term. The tentative realtionship was not undermined by the fluctuation of oil prices (if there was a problem with oil prices, it was that they were not permitted to fluctuate due to price controls) which never had any relationship to the curve in any event, but to the underlying assumptions behind the curve itself.
FletchforFreedom 2 years ago
that a relationship exists between the stagflation of the 70s and the fluctuation of oil prices is not my ward, but a fact of life, highlighted by all economists, I suggest you read Macroeconomics by Olivier Blanchard, shows that the fluctuation of oil prices is reflected in the general prices and the balance of the labor market, bringing an increase in the natural rate of unemployment ... which leads to inflation and stagnation, commonly called stagflation
losheva 2 years ago
Your facts are nothing of the kind. The notion that oil was the casue (or a factor in) stagflation is not even a mainstream idea among Keynesians, Post Keynesians or even New Keynesians (of which Blanchard is part). And even if it were, the other economic schools, who combined comprise more than the Keynesians scoff at the notion. The most widely accepted theory is that inflation is a purely MONETARY phenomenon and not a function of any single commodity or the labor market.
FletchforFreedom 2 years ago
I do not know about you on which books you've indoctrinated, and if you feel like you have time, try to study the effects on prices and price expectations in the medium and long term (AD-AS model) an increase in the price of oil .. .
losheva 2 years ago
for me the GDP per capita is not a reliable indicator of health status of a country, but if you like to consider this, I can only say that Norway is the third country in the world for per capita GDP (it is a fairy this?), I can say that Sweden, Denmark, Finland, come ahead of UK, Germany, France, Italy, Spain, Australia, etc. Now I do have another question, can you tell me what is the country with the highest rate of private debt in the world?
losheva 2 years ago
Socialists NEVER like the clean economic data. But there is an important point to be made. Economists do not rely solely on GDP per capita alone. It is invariably adjusted to factor out the distortions of massive oil wealth. Once that is done Qatar, Kuwait and Norway fall behind the United States and Ireland (two decidedly more capitalistic countries).
Of course, when one understands the data, this is obvious ... as is the fact that private debt is irrelevant to the discussion.
FletchforFreedom 2 years ago
or me it's important to talk about private debt, since for the Austrian and monetarist theory the great evil of state intervention is the increase of public debt, that to be covered must lead to an increase in taxes, why not mention the private debt ? Why not say that the most capitalist country in the world that the United States is the country with the highest level of private debt in the world?
losheva 2 years ago
I didn't say private debt wasn't an important issue but that it is irrelevant in a discussion of capitalism vs. socialism. But since you asked, public debt is worse than private debt, becasue private debt is freely engaged in, is retired by the productive activities of those that incurred it, it doesn't inflate the money supply stealing money from savers and it dosen't fuel the boom and bust cycle.
That the US has the largest private debt does not alter relative levels of prosperity.
FletchforFreedom 2 years ago
I have my doubts about what you say, first: compare private debt and public debt is important to understand how capitalism and socialism, capitalist countries have high levels of private debt, socialist countries (better call them interventionists) have a higher level public debt.
losheva 2 years ago
I do not believe that government debt is worse than the private sector, if I have to borrow to make me care hospital, to study, not free to choose, I resort to bank credit, and the ability to bank credit is based on the concept of multiplier of money, then there are two or increases the monetary base, or decrease the reserve bank, resulting in the first case of having a monetary expansion and a second to have fewer guarantees on bank deposits, what is worse? I do not know
losheva 2 years ago
The notion that govt debt isn't worse than private debt is completely unsustainable. The acquisition of personal debt dies not distort the economy as a whole, it does not create bust periods like we are now experiencing. In fact, the real problem you are describing (when mentioning the multiplier effect) is not a private debt issue at all but the expansion of the money supply by the central bank (a fundamentally socialst act).
FletchforFreedom 2 years ago
the systematic use of private debt, create economic distortions, create bubble ready to burst, since, if we exclude the idea of increasing the monetary base to meet the growing demand for private credit (as would have the same effect of an increase in public spending ), The only alternative is to reduce the coefficient of bank reserves, with the risk of exposing the financial system to a state of insolvency General
losheva 2 years ago
NO economics school (not even the Keynesians who argue - incorrebtly - that it is "overproduction") maintains that private debt creates economic distortions in the form of "bubbles". In an evironment dominated by a central bank, such events can only occur as a direct result of the socialistic manipulation of the money supply by the central bank (or by printing money). You are invalidly confusing such activity with private debt in a capitalist economy.
FletchforFreedom 2 years ago
The American economy has grown as families borrow to consume, coming to create a form of economic well-being fictitious. On the one hand with the use of Subprime lending, which was granted by banks with low interest rates, guarantees very low, then rose significantly and became unbearable for the families, and second through irresponsible use of credit cards (eg . revolving cards) which permit the deferral of charges on the uses at the end of the month, and indefinitely.
losheva 2 years ago
This time your response was pure economic ignorance from beginning to end. Economic growth results from production NOT consumption (it has nothing to do with consumer borrowing). Sub-prime lending resulted from expansion of the money supply by government and regulators insisting that lending standards must be lowered and promising losses would be socialized. The entire problem you describe is, BY DEFINITION, one of socialism - not capitalism.
FletchforFreedom 2 years ago
is the production that determines the growth? true, but what determines the production? back to the old question, is the demand that determines the supply or the supply that determines the demand?Damage resulting from subprime mortgages in the first analysis can only be so short-sighted view from your explanation, the real damage comes from the securitization of the underlying debt that poisoned the entire world financial system, you tell me that the securitization of debt and social practices?
losheva 2 years ago
Economically, it is ALWAYS production that not only determines growth but PRECEDES demand as entrepreneurs respond to their expectations of the future.
Investment in subprimes resulted from the govt manipulation of the money supply radically distorting the risk signals in the marketplace. Such actions make it appear in the marketplace that leaving fund idle is actually riskier than taking on derivatives, etc. You are discussing the symptom, not the cause.
FletchforFreedom 2 years ago
say it is supply that determines the application is the stupidest thing an economist (as you define yourself) can say, anticipate the demand does not mean create but discover latent needs, so discover the unmet demand (these are principles of marketing ), to emphasize that this is precisely the question that determines the supply and not the other way, you can produce what you want but if there is an application that supports the whole supply remains unsold, and there is no increase growth..
losheva 2 years ago