[vioppyskype]

That's the thing about capitalism, you can only imagine what prices will be in the future. So you can't plan accordingly and you can't even regulate your economy. Of course, you have to try to regulate it because if you didn't you would have widespread deflation and spending in the economy would plummet.

OTOH, if you have planned economy you can set your production and prices.

I know you have this idea that capitalism has a long history of success, but that's just dead wrong. Capitalism has a long history of failure, and those failures are getting more and more frequent, and worse and worse.

The USSR
China under Mao
Cuba
North Korea

Yeah, planned economies are winners.

What planet are you from?

A central state committee has never managed an economy better than a market. They do a better job than a Czar, which I admitted in the Venezuela thread. But compared to a free market, a planned economy is unresponsive, shows little initiative, and is too politicized to be effective.

Show me Capitalism's long history of failures. For every downturn, you'll see an upward progression that makes up for it and then some.

[baskentt]

The USSR
China under Mao
Cuba
North Korea

Yeah, planned economies are winners.

What planet are you from?

A central state committee has never managed an economy better than a market. They do a better job than a Czar, which I admitted in the Venezuela thread. But compared to a free market, a planned economy is unresponsive, shows little initiative, and is too politicized to be effective.

Show me Capitalism's long history of failures. For every downturn, you'll see an upward progression that makes up for it and then some.

Read Marx, Engels or the ´Black book of capitalism´ (Robert Kurz) for that. There are plenty. It can in fact be argued, that for every upward progression, you´ll see a downturn that makes up for it and then some. Remember, that you also have to see things on the global scale - sure WE are relatively well off right now...

EDIT: I guess the two most prominent instances of capitalism really being not all that great are the two world wars - the first being indeniably a child of capitalism and the second having its roots in the first and the great depression. BTW, i regard the eastern socialist states of the 20th century as state-capitalistic states - they still produced goods, the only difference was that the workers were now supposed to identify with the state - which indeed brought forth the cynic nature of the ongoing self-disciplination of the populace, obeying the ´natural laws´ of the ´machine´. ´Work´ was still an abstract universal value (and i think the propanganda art of both National Socialism as well as ´Communism´ shows this pretty well), purpose of which unquestioned (´alienated´ in the Marxist term (´entfremdet´)).

EDIT II: In general it´s hard to compare a ´truely´ communists ´state´s wealth with that of a capatalistc one, since you cant just take the GDP of both. GDP is generated mostly by ways that communism strives to eliminate. If you knit a sock for your neighbor, who then cuts your hair as a price, that´s 0 in GDP. If you produce a sock for someone else, who then sells it, there is no barber involved yet, but it already counts twice in the GDP (your loan, and the transaction of selling the sock). This assessment may not be all too accurate, but you get the idea...

EDIT III: This brings up another thing, that might remind you, that even now (disregarding the financial crisis for a minute), things around you do not change all for the better: My grand-ma used to actually knit socks for me as presents - GDP: 0. In capitalistic terms, it would have been more ´wealthy´ if she had worked at a factory instead, to earn some money, so she can go out and buy me socks. I regard the way she did it as inmeasurably preferable. Now, think about elderly care - what´s better: To grow old and die among your family at home, or be shoved off to some retirement home? In capitalism, the latter is clearly to be prefered, since the former does not induce nearly as much money-flow and profit-opportunity - and thus grandpa and grandma ´have to´ pay a lot of money to exile from their families - or the families pay it, by -guess- ´working´ (whoring themselves out to whoever will buy their ´workforce´), instead of taking care of the elderly themselves... It´s like a sick man´s vision if you think about it.

EDIT IV: And the middle generation? Well, ´modern´ parents work - both of them. Childcare is handled quite in the same fashion as elderly care - Kindergartens all around (the social democrates actually wanted to make it a ´right´ to get a place in Kindergarten). While the parents are missing out on a good deal of their kids childhood while raising the pressure on salaries with their combined labor, chances are either him or her produce something that nobody really wants. Maybe not. But one thing is sure: Both will complain about the TV-commercials they have to see. And eventually, they will have to buy some of this crap, if they want to go back to work tomorrow. And they do want to go back to work tomorrow - after all they are sane people...
Of course they are both worried about the environment - ´something oughta be done!´. The next thing in the news is the economy will probably only grow by 1% this year. That´s horrible! ´What about my job ? Why cant those bastards up there keep the economy running. Greedy selfish punks! We need to sell more cars!!! But hey - thanks for the eco-taxes!!! How are they supposed to sell cars if the gas prices are so ****ing high !?!? And what about my stocks ?!´ - ´Oh, dont worry, darling, the guy in the bank said, they are absolutely save, yet very profitable - what firms did he say, he would put our money in, again?´ - ´Heck - i dont care as long as they are going up! That´s his job - that´s what i pay him for...´

This is my picture of the average ´self-responsible´ ´econmic subject´ that ´satisfies´ his ´demand´ according to his ´preference matrix´, resulting in a ´rational´ ´free´ market, with the ´optimal allocation of ressources´ geared towards maximazing ´utility´.

[Eujacwta]

It is exactly due to many production already being almost fully automated and communication being so cheap, that there is so little to do for the money. Remember, that investments need to be profitable - and not only that: they should be the MOST profitable option.

Sure, a lot of private homes could have gotten solar panels up, and this way invest their money into the real economy - yet, the ´Telecom´ stocks seemed to be a more profitable investment - until it crashed. Just one example out of the top out of my head...

There's plenty to do with money. Look at telecoms expanding into Africa. Do we have a space elevator yet? We don't lack in places to invest, we lack in ideas.

[JeremyBalll]

Read Marx, Engels or the ´Black book of capitalism´ (Robert Kurz) for that. There are plenty. It can in fact be argued, that for every upward progression, you´ll see a downturn that makes up for it and then some. Remember, that you also have to see things on the global scale - sure WE are relatively well off right now...

Well, that'd be a lot of work. I'm lazy. How about you rattle a few off?

I'm guessing these would mostly consist of third world countries that were left impoverished by colonialism. Is that about right? I'd say in response that the reason these countries were hurt by capitalism is that they failed to compete aggressively. South Korea was a Japanese colony that improved itself through capitalism. Hong Kong was a British colony that improved itself through capitalism while it was still a colony. If Tanzania suffered, it was because Julius Nyerere (a good guy with good intentions) imposed a home brewed brand of socialism on it.

[doksSirmAdods]

The USSR
Show me Capitalism's long history of failures. For every downturn, you'll see an upward progression that makes up for it and then some.

Compare post-war growth rates with growth rates in the late 1800s. (In the US) Capitalism with all its jagged edges is hardly better than Marxism. Only if you soften those do you have dynamic wonderful thing.

I agree. That doesn't mean that capitalism doesn't work. It simply means that we need a useful framework of laws to minimize the effects of talentless hacks. Reform is the solution, not revolution. Right, but I think you and I differ sharply on the quantity of laws that should be in place to soften things up.

The value of money is related to its supply and demand. Increasing the supply decreases its value. And I'm telling you a trillion is a drop in the monetary bucket.

Then they get jack ****. I never told them to securitize. They either make a deal, or they don't. Your bank who sold the mortgage to other people doesn't care. The holders of the senior tranches which would get paid even if they foreclose don't care. The people who you would wipe out by renegotiating have a choice between calling your bluff or walking away with nothing.

And if the Soviet Union wasn't communist, then what was? Or are you a believer in magical fairy tales? "Communism" was a fairy tale the Soviet elite told the masses so they could keep control while life was ****y. Yes, it was a planned economy, badly mismanaged by people who weren't really trying to improve the general welfare, fighting an arms race it had no business fighting.

Greed is sometimes irrational. Fear is sometimes rational. We use different words, but we mean the same thing. No. I think the markets are still irrational. The initial panic had everyone selling anything they could even the things that weren't that badly affected.

Who gets the money. If it's me, I'm cool with that. If it's given to the bottom fifty percent of wage earners, I'm cool with that. If it's given to the same banks that got us into this mess, then I have a problem. I'd suggest paying down some of the debt with it. That way when we need to stop printing it but we're still running a deficit we have a little more breathing space.

At an immense cost. We should have learned our lessons, but we didn't. So what makes you think we'll learn this time?

I'm rooting for an apocalypse. I've got canned food, a couple guns, plenty of ammo, batteries, the whole nine yards. I'm a libertarian. Well, as long as it doesn't involve nukes you're pretty set. I'm personally envisioning some sort of environmental disaster where food production falls sharply triggering global instability.

It's not a black box. But it is very complex. I agree though that economists are pretty lazy as far as scientists go. I wouldn't call it lazy. The problem is certain neoclassical assumptions, never proven, have somehow become dogma. Then loads of fancy math has been built upon a foundation of sand. When the conclusions drawn disagree with reality, they reject reality or try slightly different math.

I have very mixed feelings about economics. Some days I wonder why I even bothered, other days I'm excited at how easy it should be to make a meaningful advance given the amount of things that are just now being looked at.

If physics were run like economics, we'd still treat Aristotle as an expert on the subject. Yeah, we'd still be ostracising those heretics that don't believe the Earth is the centre of the Universe.

[QQQQQ-Trek]

Edited my previous post for examples, Felch.

[byncnombmub]

Well, this thread's bought it.

[jamisi]

[QUOTE=Agathon;5536532]
This is pure faith based economics, and deserves no more time than a witch doctor's economic theory. [QUOTE]

Says the Marxist. Felch's "faith-based" theory in relation to money supplies and inflation/deflation is just as provable as Marx's (who doesn't have any faith in markets or money supplies). The witch doctor's theory is probably amorphous, filled with truisms, and cannot link micro with macro in a single theory. In other words, just like those spouted by every other economist teaching college level courses in America.

[CHEAPSOFTOEMONLINE]

EDIT II: In general it´s hard to compare a ´truely´ communists ´state´s wealth with that of a capatalistc one, since you cant just take the GDP of both. GDP is generated mostly by ways that communism strives to eliminate. If you knit a sock for your neighbor, who then cuts your hair as a price, that´s 0 in GDP. If you produce a sock for someone else, who then sells it, there is no barber involved yet, but it already counts twice in the GDP (your loan, and the transaction of selling the sock). This assessment may not be all too accurate, but you get the idea...

I don't think there is much less of that in capitalist countries.

[santorio]

Well, this thread's bought it.

There is still some good stuff here. Barnabas' post was good, f.e. A real-world experience of deflation. I've sure not experienced it personally.

But we would all be better off if some people would weigh more carefully what they choose to reply to. These string quotes are unbearable.

[soprofaxel]

I'll have a look when I can. Any good places to check?

I've run into it in classes and seen references to it in other places, I'm trying to see if I can get a good source online. Generally though growth in the 1870s-1900s was below 1% per year while, now it's on average 2-3% per year. I still need to find a source to back that assertion.

How many trillions are floating around? My guess is that it would raise the inflation rate by ~2%. But then again, I have no idea about the true numbers. I don't think anyone can give you a good guess. The problem is that money is mostly created by the financial sector these days through credit. The question is how many trillions would be created by that initial trillion.

Then they walk away. Junior tranches were sold at a discount for that very reason. Right, but you'd have to negotiate with them. If the holder of the junior tranche is different from the holder of the senior tranche, the guy you'd wipe out by renegotiating has no stake in seeing you not foreclosed upon. I agree that if the mortgage were still together or the junior tranche deep enough, there'd be some incentive to renegotiate to prevent foreclosure.

I agree. I'm wondering how Agathon feels about the the practical history of Marxist theory. I have a feeling that Marxist theory could produce a workable economic situation if: 1) It were democratic, 2) the rest of the world didn't go out of its way to destroy it, 3) the vast majority of inhabitants wanted the country to be communist, 4) some other conditions that escape me at the moment. Needless to say, none of the communist countries came even close to meeting those conditions. The countries that might have, instead put a social safety net in place and the workers calmed down because things weren't so bad anymore. (I also suspect that solution beats Marxism.)

DanS has been buying. I've been buying. I think that the bubble was irrational, and people came to their senses. You're right that a lot of lemmings sold things they shouldn't sell, but they're idiots. You can't stop human idiocy, it's a powerful force. And other people sold things they shouldn't have sold because they were forced to raise money from somewhere and the bad stuff wasn't selling.

Sounds good. Would it pull us out of a deflationary spiral though? Probably. If not... that would imply we can print money with no consequences (inflation being the normal downside to printing money).

Environmental disasters would be interesting. The guy with the most guns will eat though, so sell your Prius and buy a Bushmaster. Maybe. I'm thinking the guy with most guns that starts in the least devastated part of the world will eat. Actually... drinkable water may be the real crisis. We're already having problems on that front.

[ñàéäèíã]

There is still some good stuff here. Barnabas' post was good, f.e. A real-world experience of deflation. I've sure not experienced it personally.

But we would all be better off if some people would weigh more carefully what they choose to reply to. These string quotes are unbearable.

Dan, you're no fun.

[voodoosdv]

I'm with Dan actually.

I have a feeling that Marxist theory could produce a workable economic situation if: 1) It were democratic, 2) the rest of the world didn't go out of its way to destroy it, 3) the vast majority of inhabitants wanted the country to be communist, 4) some other conditions that escape me at the moment. Needless to say, none of the communist countries came even close to meeting those conditions. The countries that might have, instead put a social safety net in place and the workers calmed down because things weren't so bad anymore. (I also suspect that solution beats Marxism.)

When an economic system is batting 0 for 30, at what point do you stop hoping that next time "gets it right" and start figuring there is some inevitible link between the government stepping in to control the economic life of a nation and the government stepping in to control the political/social life of a nation?

[sleepergun]

Really? You honestly believe this? You're like a Commie Kenobi.

Cuba was boned after the Soviet Union pulled out. It was "saved" by resorting to a limited form of capitalism, where Canadian and Europeans would spend their vacations at crappy resorts the natives were forbidden from entering. Then when Hugo Chavez came into his oil wealth, Cuba was able to tone down the capitalism. Hardly a success story.

Where do you get your information from?

Cuba survived an artificial peak oil. How do you think a capitalist economy would do under those conditions? Pitifully I can assure you.

[thighikergove]

If there's more than two quotes in a post, I just skip the whole thing.

Having a thousand quote blocks per reply is a Poly tradition, dating back to the good old days of Middle East and Abortion threads.

Don't you have any sense of nostalgic longing?

[wallyfindme]

Summary of the article Kid provided:

"The sky is falling! The sky is falling! The sky is falling!"

[Qahtwugc]

That article didn't prove your case that planned economies are better than free markets. In fact, North Korea is more restrictive than anywhere else in the world, and it failed. It also didn't prove that free market economies would fail in the event of peak oil. It showed that Cuba survived by adjusting to diminishing resources.