14 May 09
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Originally posted by FMFIt's not a pyramid scheme because these countries also experienced growth. There's a difference between rising inequality due to unequal distribution of benefits and a pyramid scheme which is purely distributional and does not generate any net wealth. Markets are just like power tools and, as such, require safety procedures.
So when all the developing countries have become developed countries, and there is no one left to work for infrahuman wages, how much will sports shoes cost in the USA?
Right now, not everyone in the USA can afford top brands - that's with people in far off sweatshops - one of the engine rooms of U.S. "capitalist" prosperity - getting only $100 or so a month, in 200 years or so" NOT a pyramid scheme. Use the sports shoes as the illustration.
I think that any ideological discussion about freedom or choice makes little sense, in my view. A rich capitalist society is not necessarily more or less free that a rich socialistic one. The politicization of economics is, in my view, a sad leftover from the XXth century.
14 May 09
Originally posted by LundosAnd you would propose what length of time?
FAIL.
Try again.
I suppose I could yield that despite the freedoms since the 1700's, that there could have been some mercantilist views and protectionism in limited amounts... but Adam Smith was influential in England, and the US financial structure took much from England's. Hamilton was an astute financial policy-maker and he did not seek to drain funds from private enterprise for socialist spending purposes. He sought to put the US on sound financial footing. When was the US allegedly not capitalist in the last 200 years, which is actually since 1809, so sounds like a tough challenge to find.
14 May 09
Originally posted by PalynkaTrue, too much politicization of economics in some debates... but as far as less spending and lower taxing leading to higher growth... and more free enterprise leading to more innovation... there are some issues that just happen to strike political sensitivities but which largely happen to fall in favor of freer, more capitalist policies over more socialist/restrictive policies, imo.
It's not a pyramid scheme because these countries also experienced growth. There's a difference between rising inequality due to unequal distribution of benefits and a pyramid scheme which is purely distributional and does not generate any net wealth. Markets are just like power tools and, as such, require safety procedures.
I think that any ideological d ...[text shortened]... tic one. The politicization of economics is, in my view, a sad leftover from the XXth century.
14 May 09
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Originally posted by eljefejesusNice contradicting yourself there.
True, too much politicization of economics in some debates... but as far as less spending and lower taxing leading to higher growth... and more free enterprise leading to more innovation... there are some issues that just happen to strike political sensitivities but which largely happen to fall in favor of freer, more capitalist policies over more socialist/restrictive policies, imo.
The discussion should never be in absolutes such as "less spending+less taxing = higher growth". If you keep such reasoning then optimally you would be in anarchy as government spending would eventually equal zero.
So the discussion can never be about "less taxes is better" or "more taxes is better", but what exactly can be done with taxes and what level of spending is best.
14 May 09
Can you truly say that any decent number of governments (specifically socialist or mixed-economy but predominantly socialist ones) out there would not reap net economic gains from reducing spending and taxes?
It is tough for politicians to avoid making themselves more likely to gain political points by offering some new gift or program... rather than cutting something that people have grown accustomed to having.
As for the difference between contradicting myself and balancing my views, surely you know better that to purposefully make a false attack and expect it to stand...
14 May 09
Originally posted by eljefejesusPlease, stop making this about socialism all the time. Even your hero Friedman acknowledged that a certain amount of government was neccesary.
And you would propose what length of time?
I suppose I could yield that despite the freedoms since the 1700's, that there could have been some mercantilist views and protectionism in limited amounts... but Adam Smith was influential in England, and the US financial structure took much from England's. Hamilton was an astute financial policy-maker and ...[text shortened]... in the last 200 years, which is actually since 1809, so sounds like a tough challenge to find.
When was the US allegedly not capitalist in the last 200 years, which is actually since 1809, so sounds like a tough challenge to find.
Have you ever heard of the McKinley Act, the Fordney-McCumber Act, the Payne-Aldrich Act or the Smoot-Hawley act? Many examples of a US government being against free markets and free trade. And that's just scratching the surface. Funnily enough they are all republican. Imaging that.
14 May 09
Originally posted by eljefejesusWhat I'm saying is that it depends on what they need to cut on. Maybe they need to increase spending in some areas, maybe they need to cut it in others. Generalizing in the way you're doing is politicizing it, imo, hence the contradiction.
Can you truly say that any decent number of governments (specifically socialist or mixed-economy but predominantly socialist ones) out there would not reap net economic gains from reducing spending and taxes?
It is tough for politicians to avoid making themselves more likely to gain political points by offering some new gift or program... rather than ...[text shortened]... views, surely you know better that to purposefully make a false attack and expect it to stand...
14 May 09
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Originally posted by LundosYour question was how long it pursued a capitalist political policy, are you saying that only pure laissez-faire capitalism without rule of law to prevent market faiures qualifies to meet your criteria?
Let me ask you this then: How long have the US persued a capitalistic political policy (internal and foreign)?
And by capitalistic I refer to your 'definition' with freedom of choices and free markets.
EDIT: This is for elje and spruce.
As you mentioned, even Friedman found use for government (who doesn't, this isn't anarchy being discussed, is a predominantly-capitalist, market-based economy versus a more socialised economy with government-owned healthcare for example)... so aside from providing better (rather than always more or always less) regulation, rules of the game through uncumbersom laws, enforcement, institutions, and the occasional imperfections that governments cannot seem to avoid... in what ways did these laws put the US into a different category than a pre-dominantly capitalist model... example? and compared to which more capitalist countries?
14 May 09
Originally posted by Palynkaso besides the allocation of spending, you don't see a pervasive need to trim government spending in the long-term across the international government budgets panorama?
What I'm saying is that it depends on what they need to cut on. Maybe they need to increase spending in some areas, maybe they need to cut it in others. Generalizing in the way you're doing is politicizing it, imo, hence the contradiction.
you don't see lower world interest rates and less crowding out of investment?
I do agree that some government investments (such as educating its people and providing other infrastructure) can help support economic growth... however considering decreasing marginal returns and the affects on interest rates, inflation, misallocation of resources, and so on, there appears a clear need to cut (yes, in general, but a supported and correct generalization) government spending. Just start by looking at Japan and the US debt levels, as well as many European governments.
Countries that have stronger savings rates and better fiscal management like Chile, Ireland, and Norway may be good examples of the gains in reduced spending/dept and reduced taxes.
14 May 09
Originally posted by eljefejesusNo, of course not. But where do you draw the line? Social Security, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission for example?
Your question was how long it pursued a capitalist political policy, are you saying that only pure laissez-faire capitalism without rule of law to prevent market faiures qualifies to meet your criteria?
As you mentioned, even Friedman found use for government (who doesn't, this isn't anarchy being discussed, is a predominantly-capitalist, market-bas ...[text shortened]... a pre-dominantly capitalist model... example? and compared to which more capitalist countries?
As you mentioned, even Friedman found use for government (who doesn't, this isn't anarchy being discussed, is a predominantly-capitalist, market-based economy versus a more socialised economy with government-owned healthcare for example)... so aside from providing better (rather than always more or always less) regulation, rules of the game through uncumbersom laws, enforcement, institutions... in what ways did these laws put the US into a different category than a pre-dominantly capitalist model... example? and compared to which more capitalist countries?
So basically you want to argue Keyens vs. Friedman in the long run?
You do know that in neoclassical growth models, the long-run rate of growth is exogenously determined - in other words, it is determined outside of the model.
The US have have been protectionistic and followed beggar-thy-neighbor policies for the better part of the last 200 years. Great Britain on the other hand have been as liberal as it gets. Or do you just want to argue the last 50 years?
14 May 09
Originally posted by eljefejesusBut Norway's government spending is quite high, so even your good examples show that it's not necessarily the size that weighs down on the economy, but mostly about what governments are doing with that money.
so besides the allocation of spending, you don't see a pervasive need to trim government spending in the long-term across the international government budgets panorama?
you don't see lower world interest rates and less crowding out of investment?
I do agree that some government investments (such as educating its people and providing other infrastru ...[text shortened]... land, and Norway may be good examples of the gains in reduced spending/dept and reduced taxes.
14 May 09
Originally posted by PalynkaSo is Denmarks and Swedens and these countries are considered very rich. How can that be?
But Norway's government spending is quite high, so even your good examples show that it's not necessarily the size that weighs down on the economy, but mostly about what governments are doing with that money.
I know that Harvard and a lot of the better US Universities were taught the same macro and micro economics as us. I wonder, then, why there's such a different outcome?
14 May 09
Originally posted by FMFRe: Cost of Shoes. They will cost about the same. The companies are not passing savings on to consumers (heaven forbid!) The cost of shoes is based on what the market will bear, and companies are pocketing the difference. But why should we care? If I want those shoes, I decide what price I will pay. I could care less what it cost to make them.
So when all the developing countries have become developed countries, and there is no one left to work for infrahuman wages, how much will sports shoes cost in the USA?
Tell me please, specifically, in what way is your promise of "capitalist prosperity for all in 200 years or so" NOT a pyramid scheme. Use the sports shoes as the illustration.
Re: Is capitalist prosperity a pyramid scheme that comes crashing down as soon as there is nobody left to exploit? No, because all those formerly exploited workers are now consumers. Start learning what Chinese consumers really want that they can't get at home -- that's the next gold mine for the West.