Capitalism vs Socialism

[Athe~]

Well, this has certainly changed since I went to bed, I've got a lot of catching up to do.

 

[GodCubed]

Omfg walls of text. Massive. Fecking. Walls. Of. Text.

I'm happy I didn't get into this particular discussion. :O

 

[Lowriderinho]

Lenin, Stalin, Mao, Pol-Pot, Kim , and so on ... come on guys

 

[Nixon]

Lenin, Stalin, Mao, Pol-Pot, Kim , and so on ... come on guys

Just because some communists are evil doesn't mean that communism is. I could easily look up horrible capitalists, but it doesn't prove anything. We're discussing the systems, not the dictators that implemented them.

 

[slbenficacoach]

Big socialist governments? well we've had bad ones from the right and the left wing, we have PS (left) and PSD(right) these are the 2 parties that get the government, the others are just to ornament, what happens here is that there is too much self interest on those who enter in politics, and we are sick of seeing so much hipocrisy, I mean, raise taxes and prices, but still buy top-notch vehicles for transportation? When we had that NATO thing, we spent 5 million on those millitary cars(missing the word,blinded cars or smt) that haven't even arrived!​

Yeah, the problem with big socialist governments is that they always spend too much of other peoples money.

The governments start with great intentions.They promise free education, free health care, pensions, dole money, housing benefits. They want to make society better, no one questions there intentions. These people mean well.

The problem comes when they have to deliver on these promises. All the above is not cheap, in fact it costs an absolute fortune. It doesn't cost the government anything however, but it costs the people. So the government has to take money from the people. They have to take that money by force, if you don't pay your taxes you are going straight to jail.

So the governments start by taking just a small amount of money from people, but this isn't enough. They start taking more and even more money from the people. And when even this isn't enough to fullfill all the promises they have made they have to borrow money from the bank. On this money they are charged interest and it costs them even more to pay it back. But the government was already losing money or elsee why did it have to get the bank loan?

This is what happened in Portugal. Big government stealing money from the people and then spending it. And when there wasn't enough money to be got from stealing from the people they endebted the people by borrowing from the banks.

Well, no one is going to extend credit forever and sometime the government had to pay. But of course, it wasn't the government who had to pay, government is just a bunch of buildings in the capital. It was the people who had to pay. Their big socialist government had endebted them. So when the government ran of of money it had to lay people of and cut back services. It couldn't keep paying money it didn't have.

This started with socialists who had the best intentions, they really did. When they say they wanted a better society I believe them. But life is not about intentions, it is about results.

 

[Jay Pricey]

Omfg walls of text. Massive. Fecking. Walls. Of. Text.

I'm happy I didn't get into this particular discussion. :O

I was just wondering about who actually has read all of this.

 

[drezzy86]

I was just wondering about who actually has read all of this.

I did ...and i'm still going to vote conservative

 

[Joel`]

I'm hearing you and I've heard these arguments millions of times. The banker creates wealth out of thin air that isn't based on real economic activity. His government helped him out with deregulation and orienting the economy toward finance. But none of it was sustainable and ultimately the rest of the population has to pay the price. This is why you can't assume that wealth creation or short-term economic growth is good for everyone or that it trickles down. Also, if it trickled down, than why was the American middle class shrinking and unemployment and poverty on the rise? This is the fundamental flaw with "trickle-down economics" (the silly thing that Reagan made up)...policy that benefits the wealthy mostly does just that, and ultimately, someone else has to pay.

Trickle down depends on your government re-distributing wealth effectively. You've had George Bush as president for 8 years, go figure. The middle class shrinking is a pretty meaningless statement too.

Your manufacturing died because of global overproduction...organized labor stood firm over its demands, so labor moved overseas. In the 50's and 60's, England would have been fine paying its workers so highly. But with an overvalued currency and high wages, England's manufacturing sector couldn't compete with the others in an era of global overproduction. So it moved towards finance instead. It benefitted in the last few decades from the huge financial asset bubbles blown around the world, but now those are coming to an end.

Wages were high because of the trade unions. Nothing to do with capitalism failing. As I said, we were forced to finance because the labour government failed.

For the dignity of work and to have a better job. I would rather be a manager than a worker even if the salary was the same.

Good for you. To most people a title means nothing, if you're not going to have the rewards related to the title. You would be happy working harder, being better at your job and earning the same as your employee's?

On how these financial incentives are determined, why are you asking me? It would depend on the specifics of that country. I'm just pointing out that there are a variety of ways financial incentives could be used in a socialist economy. And no, you wouldn't just turn it into a free market, because under this scenario the people prefer a socialist economy, probably because it could guarantee full employment and take care of the needs of its entire populace. Or because capitalism is inherently unstable.

If you're going to say it's a solution, I was asking how you're going to implement it, because it's such a broad spectrum and would be extremely difficult to implement properly.

OK, well some fairly privatized health care systems suck, and some more state-controlled ones seem to work better...not sure how this proves that markets are the solution to health care. Canada's system is much more 'socialist' than America's (and we call it that), but Canadians are much more satisfied with their healthcare system than America is. I'm sick right now, and rather than spend hundreds going to the doctor for a check-up in America, I'd prefer to be in Sweden where I didn't have to worry about it. I don't give a **** if it's not the most efficiently posibble solution, if a banker has to make 400,000 instead of 500,000 so average people don't have to worry about being sick, than I'm all for it. Another reason that I'm probably more inherently 'socialist' than 'capitalist,' which is I guess what the thread is about.

All of those socialist systems with great health care are funded by capitalist economy's which is what I've been saying all this time. Capitalism with social provision. I'd like the NHS to be privatised because it's horribly inefficient right now and provides a poor service, and partial privatisation is an obvious solution to that.

Not saying you guys had little choice, I'm just saying that capitalism inherently leads to crises of overproduction, which is what we're facing now, and is inherently unstable. Quite a contradiction to the ideas of Friedman or anything you'd find in an econ textbook.

And what do you mean by overproduction? Operating past your productive capacity? Most sensible government isn't going to allow unsustainable growth.

OK, as for the majority of countries not using fiscal policy as a tool for controlling the economy, that's a load of bollocks, as you British would say. Every country still uses this today. Why do you think both the governments in the US and UK went on such a spending spree over the past decade? To increase aggregate demand. Come on, look at one of your textbooks, increased state spending leads to an increase in aggregate demand. That's about as much of a fact as you can get in this discipline. Was Keynesian style economics as effective from the late 70's until 2007? No, because amazing amounts of wealth were created in the financial sector, which is why the state didn't increase in size during this time period in relation to the economy. Keynesian style government spending won't get you those profits. However, none of those profits were based on real economic activity, and the house of cards is crashing down. Some people want to use Keynesian spending to get out of this mess, but we already did it in the 00's (which prevented the crisis from happening earlier) and now our deficits are out of control. There's nowhere to go.

Where did I say spending isn't a part of AD? Country's aren't using it to control the economy, they use monetary policy. Fiscal policy is supposed to be used to fund supply side policy now, and increasing AD is a consequence. The UK has used monetary policy to control the economy for some time, the recession was the first time we've ever used keynesian style demand management, and that was out of desperation. The UK went on a spending spree because of stupid economic decisions made by the government in a quest for high growth and to garner votes in elections. As I said, Brown claimed to end boom-bust, look what mess that has got us in.

OK. Well I know a few that do think it's a good example of a successful socialist system. But at the end of the day, what makes you happy is probably more important than other things, and if the people there are happy and like their system, why attack it on grounds of efficiency?

I was attacking it on the fact it isn't a socialist system as you'd like to believe. It's capitalist.

I don't really agree with this point and I'm not sure where this argument is going...I made the point that ultimately other factors determine a country's success economically than just how little the government intervenes in the economy. Economists think though that because markets inherently work, you let them work their magic in any country and you will see growth. I'm just making the point that that's not true and depends on other factors...the implications of this are important, because depending on what these factors are, the solution for the given country might not be to simply let markets work their magic.

No one believes that markets will always naturally work no matter what, market failure is a widely accepted part of modern economics. Stop assuming that all economists act like this, they don't. Perhaps you should pick up an Econ textbook up that you hate so much and get an idea of how it currently is.

Not really. If you spent a year in El Salvador you'd be begging for N. Korea. In N. Korea you know you're not going to get shot or robbed. In El Salvador, violence and poverty are a part of your existence.

You'd get shot for slightly stepping out of line. Poverty is still incredibly high in N.Korea.

Why do markets fail? If they're inherently stable and self-regulating (which is why we're always supposed to get the state to get out of the way), they shouldn't fail. These same textbooks say that slashing tariffs, for example, is objectively the best solution for any country, because that means you are removing impediments to the natural equilibrium that markets reach. Yet now markets are failing? Now the state is supposed to step in? It's a huge contradiction. Governments fail because of incompetence or bad decisions, but if markets are systems that inherently reach equilibrium, and the state should always step out of the way, than markets shouldn't fail. The market doesn't much conscious decisions like states do.

As I've said earlier, economists don't act like this, stop saying they do. Read my above post.

Not sure what your argument is here...that because the Washington Consensus has two valid points it's a great document? Also, making sure firms are competitive in global markets is certtainly not a concern of the Washington Consensus, since it believes in removing all barriers to trade. That prevents you from growing new firms.

I didn't read it, but removing barriers prevents firms entering the market? What?

Economists do believe that the free-market is perfect, which is why most of them argue that in every circumstance, the solution is getting rid of big bad government. Haven't you read Friedman? His fundamental theory is that markets are inherently self-regulating and stable, that they allocate resources in the most efficient and effective method possible. Because of this, the solution to everything is having the state step out of the way. Getting rid of regulations. Cutting taxes. Cutting the size of the government. Read any chapter of any of his books and that much is clear. And in fact, Friedman doesn't even believe market failure is possible, which is why in his work on the Great Depression (the one Bernanke believes to be infallible), the crisis is simply a liquidity crisis caused by the government's (especially the federal reserve's) failure to provide credit...even though they took unprecedented measures to do so, he thinks they should have done more and the Great Depression never would have happened. How this guy became famous is beyond me.

I've never heard of any modern economist wanting rid of the government, wanting it to play a smaller part, yes, but none, no. So Friedman didn't believe in market failure either? Great, it's a shame that his economic theories play little part in modern Britain. He's famous because his thinking strongly influenced Thatcher, and she had the most radical changes in a long time. I don't know about America. I've only read small parts about him, but I know that most common economic theory disagrees with him.

I'd say we're in agreement here in this paragraph other than the last 3 sentences. But that means we completely disagree with Friedman...a purely capitalist country is Friedman's paradise...have you read Free to Choose? This guy is even opposed to public education. As far as a system that leans toward socialism, many people think the Scandinavian countries lean more towards socialism than capitalism, so why not look to them? As far as 'fixing the flaws,' well, the USSR did that for about 25 years, but that threatened the wealthy capitalist nations of the world (if the nations they depended upon for raw materials and cheap labor revolted, it could be catastrophic) so we spent the entire post WWII era trying to prevent such an idea from spreading. There's a reason that every time a left-leaning government came about in Latin America, we somehow helped remove it.

Friedman's monetarist policies failed in the UK, so I don't pay attention to him. The UK hasn't used much of what he has said since monetarism spectacularly failed.

Lack of productivity being a major issue? What do you mean here? The crisis was due to overproduction.

What crisis? I said lack of productivity is an issue of a socialist system.

As you've stated many times before, an unequal economy producing more is better than an equal one that produces less. Depending on how the numbers line up, I disagree with you, which is why I guess I'm inherently more socialist and capitalist. Often times these gains are only enjoyed by a few wealthy people while everyone else suffers...I would rather have a system where everyone's needs are taken care of than one where there is dire poverty and great amounts of wealth coexisting, even if the "average" is poorer. I also don't think that possession of useless consumer goods leads to happiness. I think my life would be better without the internet and FM, but unfortunately, I'm addicted. But these ideals are very different from the fundamental ideals of capitalism, which hold that wealth creates happiness. There's too much psychological research proving otherwise, and even if there wasn't, it's something I know from personal experience.

So you'd like to live in Sweden, with a capitalist economy funding a strong socialist state?

If you said markets aren't self-regulating and stable, well then you're breaking with Neo-classic economics, and Friedman would scold you for such socialist talk. If you do think that markets are inherently unstable and lead to crisis, and you do admit that deregulation caused the current crisis, then I applaud you...but from that perspective, the state should play a much greater role in managing the economy and tempering the business cycle than you seem to be admitting. How can you say that markets are inherently unstable and then say Keynesian economics is dead and 'like' the post listing Milton Friedman videos?

He made other good points. Can you stop putting words in my mouth. You can't look at it and just say "markets are this, if they're not then they're must be this" each case is unique, to say you harped on about "one size not fitting all" earlier, then surely you should understand that? Market failure isn't in every market, markets can manage themselves fine, if and I mean IF, a failure occurs, such as under provision of merit goods, then the state steps in to correct the failure. This does not mean that the government should continue to step in all the time, nor does it mean it should be letting them constantly run free. Economics has developed far further than just assuming we do X thing in Y situation each time. I've already stated that I don't want to see us not having any state intervention, but nor do I want the state to be intervening when it's unnecessary. If a country suffers rising unemployment, and the government doesn't analyse the type on unemployment, and they just increase AD to fix it. If it's cyclical unemployment, then great, it'll help. If the unemployment was geographically immobile, it won't do a thing. This shows that you can't just take everything as absolute in economics, there are far more variables to consider, and then it's the state's job to make the economically best decision, whether that be not intervening or intervening.

This is just us two going around in circles now, which is quite pointless. You're also insistent on acting like I'm purely capitalist, I already disagreed with that sentiment, so you're wasting your time saying that I'm assuming markets are perfect, they're not, the system is flawed, I accept that, I am just all for having a capitalist system where the state acts to correct any failures that may occur, I believe this system is far better than a socialist system, which has more severe flaws than the capitalist system, which are harder to correct making it far more difficult to implement. I don't see the point in assuming that markets always act perfectly, for the sake of not admitting to being part socialist.

---------- Post added at 03:14 AM ---------- Previous post was at 03:10 AM ----------

Omfg walls of text. Massive. Fecking. Walls. Of. Text.

I'm happy I didn't get into this particular discussion. :O

I regret it now! XD At least it's mainly quoting that makes my posts walls of texts, Curtis' fingers must be bleeding by now.

 

[Athe~]

Wow, after reading this through, I can tell you this is now way out of my league.

 

[curtis290]

Can't...go on...any longer...7.18AM...must go to bed...

 

[GodCubed]

Can't...go on...any longer...7.18AM...must go to bed...

I can't decide whether you and Joel are heroes of political debating or just really stupid...

 

[Niall]

Depending on how I look at it this is in my opinion both the best and worst thread on Base at the moment. I'm currently writing my dissertation on North Korea and integration into the Capitalist World Economy.

It's too late for me to join the discussion now but if this thread is still alive tomorrow I will join in.

 

[Joel`]

I can't decide whether you and Joel are heroes of political debating or just really stupid...

Stupid, definitely stupid! XD

 

[ajt09]

I have to say. After reading everything, my head (like the fish I had for tea) is well and truly battered. Extremely interesting though

 

[Joel`]

I have to say. After reading everything, my head (like the fish I had for tea) is well and truly battered. Extremely interesting though

My brain feels much similar. XD

 

[Chaz Sexington]

******* evil university internet blocked my post earlier. Anyway, here goes...

I've lived in both Norway and Britain, which I would consider socialist economies. Norway only survives due the fact that 75% of its income is government-owned oil revenue and Britain's struggling. In Norway I feel socialism has gone way too far - an example being a political debate where the socialist tree-huggers were trying to defend high taxes against a bunch of small to medium businesses (family businesses) who had to take out loans to pay tax. They were all running profits, but during bad years they had to spend all their savings on taxes.

A more local example is one of the local schools were banned from serving food at the price of 40 quid a month, as poorer students couldn't necessarily afford this. This is a country were the minimum wage is 10£ an hour.

Immigration also struggles in socialist countries. In Norway hardly any Somalis speak Norwegian and 99% (official figure) are unemployed. In the US, where unemployment benefits aren't very good, the statistics are much better. The problem is that those that are actually unemployed don't get as good a treatment as others.

As before, the NHS spends over 100,000,000,000 quid a year on catering to 51 million people. This is just another example of how the private sector (Germany) can do this cheaper and faster. In Norway it is ILLEGAL to offer private companies building contracts for roads, though some clever right-wingers in the south (Kristiansand) figured out a loophole in the legislation and got it done privately, which made the road cheaper and of the same quality as the other roads.

On the other hand, I prefer governments subsidising flights so more people can afford to travel, subsidising public transport (though not running it - it's mostly publicly run in Norway and it's a disaster), subsidising roads etc.

I am however for either
A) Regressive taxation. Rich people tend to use less public services, so why is it fair that they pay a higher net tax than others?
B) More votes to the rich. They supply the money and should have a say in how it's spent! Alternatively, only make landowners eligible to vote.

 

[Athe~]

A) Regressive taxation. Rich people tend to use less public services, so why is it fair that they pay a higher net tax than others?
B) More votes to the rich. They supply the money and should have a say in how it's spent! Alternatively, only make landowners eligible to vote.

I'd like to think you're joking

 

[Joel`]

A) Regressive taxation, no. Was a huge mistake in Thatcher's era with the poll tax.
B) Maybe not more votes, I'd prefer economics to be a compulsory subject so everyone doesn't complain and the media goes wild whenever there's tax rises/spending cuts for perfectly viable economic reasons.

 

[jmoser]

I actually just finished taking a class called Capitalism and its alternatives...but I am in no state of mind to process all of this text and come up with some sort of rational response. However, I thought some of you might appreciate this video if you haven't already seen it. Not necessarily capitalism vs socialism per se, but these two guys were certainly close to the opposite sides of the spectrum. Anyways I found it rather entertaining and the economics behind it are actually very sound.

YouTube - "Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem

 

[curtis290]

Trickle down depends on your government re-distributing wealth effectively. You've had George Bush as president for 8 years, go figure. The middle class shrinking is a pretty meaningless statement too.

Trickle-down in America simply means cutting taxes for the rich because they would create more wealth...but usually rich people invest this extra money in assets, which is what contributed to the bubbles. The middle class shrinking isn't a meaningless statement, it's an important indicator of what our economy has been doing for the past few decades.

Wages were high because of the trade unions. Nothing to do with capitalism failing. As I said, we were forced to finance because the labour government failed.

As I said, you were forced into finance because thanks to how strong labor was, wages were high and you couldn't compete in the global economy in manufacturing. In the 50's or 60's, that wasn't a problem, but once we reached the state of global overproduction in the 70's, Britain's manufacturing could no longer compete with other countries' due to their strong currency and high wages. The same exact thing happened in the US, labor was strong and wages were high, but when the 70's came around, our manufacturing was undercut by increasing global competition, and that's why both of our manufacturing sectors have been steadily shrinking since then.

This is pretty much right out of Marx, he believes that capitalism leads to overproduction and to crisis, and you said you agreed with me. Last Great Depression was a result of agricultural overproduction combined with the asset bubbles, and this one is a result of industrial overproduction combined with asset bubbles...there's nowhere to go, and the future is bleak.

Good for you. To most people a title means nothing, if you're not going to have the rewards related to the title. You would be happy working harder, being better at your job and earning the same as your employee's?
If you're going to say it's a solution, I was asking how you're going to implement it, because it's such a broad spectrum and would be extremely difficult to implement properly.

To most people a title would mean something because ideally you would believe in what you do. This doesn't happen in a capitalist system, where people simply work to get paid. But in a communist system, we can probably assume that a popular revolution led to the creation of such a government and that the people believe in it. In the 50's and 60's and through the mid 70's, people believed in the Soviet Union and building socialism, and productivity was very high. For a variety of reasons, they stopped believing in the 70's and especially 80's and started drinking heavily, and productivity decreased drastically. So if you forced communism on people in Britain or the US, then yeah, people wouldn't work, but I don't think that's a likely or fair hypothetical scenario...if communism did exist in these countries, it would be the result of a crisis in capitalism and a popular revolution. People at that point would believe that markets don't work and in the importance of their work in sustaining the national economy. They would believe in what they're doing.

I already told you how to implement it. Reward good workers by promoting them or giving them extra credits to spend on luxury goods, perhaps. Punish the ones that don't do work. It would simply operate like any other industry.

All of those socialist systems with great health care are funded by capitalist economy's which is what I've been saying all this time. Capitalism with social provision. I'd like the NHS to be privatised because it's horribly inefficient right now and provides a poor service, and partial privatisation is an obvious solution to that.

No, they are funded by the labor and resources that drive the economy. As we've both agreed, the best solution is a combination of capitalism and socialism. You can call it a 'capitalism with social provisions,' or you can call it socialism with markets, so we're just splitting hairs here: and sexington said Britain was a socialist country, and since you liked his post I'm assuming you agree. Anyone from the 19th century looking at Sweden today would not think of it as a capitalist country, and for many economists and Americans, Sweden would be a nightmare. In the Communist Manifesto, Marx lists ten steps in building socialism and 'revolutionizing the mode of production.' Here are a few of them: 2. A heavy progressive or graduated income tax, 3. Abolition of all rights of inheritance, 4. Confiscation of the property of all emigrants and rebels, 5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly, 6. Centralization of the means of communication and transport in the hands of the state, 10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc. None of those are that radical by modern standards, so I would say what makes today's society decent to live in is that we've moved far from capitalism and close to socialism.

And what do you mean by overproduction? Operating past your productive capacity? Most sensible government isn't going to allow unsustainable growth.

Global overproduction. Meaning that industrial output of the advanced industrial nations isn't increasing, they are just fighting for increasingly smaller slices of the pie. They have to use a weak currency and low wages to prevent getting undercut by foreign competition. Factories in these countries do not operate anywhere near full capacity. Investment is in better plant equipment to increase efficiency so the same can be produced at a cheaper price, enabling them to undercut foreign competitors. Of course this means that full capacity is only increasing and firms are operating at even lower capacity, simply contributing to the problem of global overproduction. Of course this creates higher levels of unemployment and decreasing wages, which is why when labor in the UK and US pressed for higher wages, it only meant they were killing their industries by making them unable to compete with foreign competition.

Marx thought this leads markets to crises and that it would cause the urban working classes to revolt. Didn't quite happen in the 19th century because the middle and upper classes appeased them through compromise (which infuriated Marx). In the Great Depression, it did lead to the fall of liberal capitalism in several countries, but the revolts were fascist and not socialist, which I discussed earlier. This time around? Our best case scenario is that we all end up looking like Japan has for the past couple of decades (zero growth for two decades, they reached the pinnacle of industrializing, then financialized, and now try and bail out their financial sector as much as possible, which is basically the path we have taken). If that's the case, we won't have a revolution for a while, but can people put up with little growth for decades? Something has to give.

Where did I say spending isn't a part of AD? Country's aren't using it to control the economy, they use monetary policy. Fiscal policy is supposed to be used to fund supply side policy now, and increasing AD is a consequence. The UK has used monetary policy to control the economy for some time, the recession was the first time we've ever used keynesian style demand management, and that was out of desperation. The UK went on a spending spree because of stupid economic decisions made by the government in a quest for high growth and to garner votes in elections. As I said, Brown claimed to end boom-bust, look what mess that has got us in.

You said that most countries don't use fiscal policy to control the economy, which is simply not true. It affects AD. Sure, they focus publicly on monetary policy (and you get monetarists running around who think this is the only way to manage an economy because fiscal policy involves government spending, which is inherently bad), but fiscal policy is still used to control the economy. In the US's case, we cut back on government spending in 90's when the economy was growing, and Bush engaged in deficit spending in the 00's to keep consumption levels high and to prevent the crisis from rearing its head earlier. I don't know as much about Britain, but I really doubt Brown's spending spree (done for the same reason as Bush's) was the first time you've 'ever used keynesian style demand management,' because government spending effects AD, and certainly is used in controlling the economy. Governments know this and take it into consideration when managing their budgets. Brown went on a spree because it could keep consumption high and make it seem that the economy was doing OK.

I was attacking it on the fact it isn't a socialist system as you'd like to believe. It's capitalist.

Again, you're splitting hairs, and as we have already agreed, all of these countries are a mix between capitalism and socialism, and the Scandinavian countries are certainly close to socialism. They are better places to live than the more capitalist leaning countries. This speaks to the merits of socialism, not capitalism. I don't think you can really point to Sweden and cite it as an example of why capitalism rocks and socialism sucks. Anyway, Chaz Sexington said Norway and Britain were both socialist countries, and you liked his post, so don't you agree?

No one believes that markets will always naturally work no matter what, market failure is a widely accepted part of modern economics. Stop assuming that all economists act like this, they don't. Perhaps you should pick up an Econ textbook up that you hate so much and get an idea of how it currently is.

But they do, and I don't know where you get it in your head that economists in the past few decades think like Keynes and not Friedman. That's why for the monetarists, depressions are not caused by market failure, they are caused by government failure. By the central bank's failure to provide adequate liquidity. Any economist or econ textbook these days tells you that the best solution is always to get rid of the state and let markets do their thing. That's why the Washington Consensus is widely considered to be the ten commandments of economics, why leading economists say things like 'free trade is the fundamental axiom of economics.' This ideology is based on the assumption that markets inherently work, and that state involvement is inherently inefficient.

You'd get shot for slightly stepping out of line. Poverty is still incredibly high in N.Korea.

I guarantee you the murder and crime rates are much, much higher in El Salvador. And that there are plenty of places in the world where starvation is a greater problem than in N. Korea

As I've said earlier, economists don't act like this, stop saying they do. Read my above post.

Have you paid any attention to what has happened in economics in the past 30-40 years? Look up neo-classical economics on google or something. Here's a quote from the wikipedia page: "Neoclassical economics emphasizes equilibria, where equilibria are the solutions of agent maximization problems. Regularities in economies are explained by methodological individualism, the position that economic phenomena can be explained by aggregating over the behavior of agents. The emphasis is on microeconomics. Institutions, which might be considered as prior to and conditioning individual behavior, are de-emphasized. Economic subjectivism accompanies these emphases." In other words, markets naturally reach equilibrium through supply and demand. Before the crisis, pure Keynesians were considered cranks and the Friedmanites dominated the discipline. Luckily that's changing.

I didn't read it, but removing barriers prevents firms entering the market? What?

In the Washington Consensus you're supposed to remove as many barriers to international trade as possible..."protectionism" is considered to be pseudo-economics, and that's why in my econ class the professor put all of the slides of famous economists saying that "free trade" is the fundamental basis of the discipline of economics. Because markets inherently work and reach equilibrium, you must get rid of anything that impedes their functioning, you must get rid of any barriers between markets.

I've never heard of any modern economist wanting rid of the government, wanting it to play a smaller part, yes, but none, no. So Friedman didn't believe in market failure either? Great, it's a shame that his economic theories play little part in modern Britain. He's famous because his thinking strongly influenced Thatcher, and she had the most radical changes in a long time. I don't know about America. I've only read small parts about him, but I know that most common economic theory disagrees with him.

Maybe you go to a Keynesian school or something but in no way, shape, or form does "most common economic theory disagree with him." Friedman is considered the Godfather of modern economics. He is considered within the discipline to be the most important economic thinker since Keynes. Our Federal Reserve Chair did his dissertation on Friedman, and is following his ideas to the t in trying to get us out of the crisis. The discipline has worshipped him for 30 years now, where have you been?

Friedman has two curents of thought: the first is that because markets inherently work, the smaller and less state there is, the better (this guy wanted to get rid of public education because it was inefficient). This is what most people in American constantly talk about when the subject of economics is brought up: the answer to EVERYTHING is always privatization, deregulation, or cutting taxes and the state's budget. For many Americans even still today, the idea that deregulation was a cause of this crisis is unfathomable. The other Friedman current is his monetarist stuff, which is basically that since markets don't fail, the Great Depression was caused by government failure: the central bank not providing enough liquidity. Even though they took unprecedented measures to do so, they should have done more, and that's what caused the crisis. Our Federal Reserve chairman has taken on near dictatorial powers following this guys' ideas.

Friedman's monetarist policies failed in the UK, so I don't pay attention to him. The UK hasn't used much of what he has said since monetarism spectacularly failed.

Well good then, we're on the same page. Unfortunately, Friedman's monetarist policies have been the norm now for two decades in the US, and we're spending trillions right now trying to implement his ideas. Scary stuff.

What crisis? I said lack of productivity is an issue of a socialist system.

The crisis we're in now. Overproductivity is the problem of capitalism, becomes markets plan things poorly. Lack of productivity is not necessarily a problem with a socialist system, it would depend on the socialist system in question. Its inability to produce complex consumer goods is the main problem of a socialist system.

So you'd like to live in Sweden, with a capitalist economy funding a strong socialist state?

Yep, I'd like to live in Sweden, a socialist economy that utilizes markets and thankfully looks nothing like traditional capitalism.

He made other good points. Can you stop putting words in my mouth. You can't look at it and just say "markets are this, if they're not then they're must be this" each case is unique, to say you harped on about "one size not fitting all" earlier, then surely you should understand that? Market failure isn't in every market, markets can manage themselves fine, if and I mean IF, a failure occurs, such as under provision of merit goods, then the state steps in to correct the failure. This does not mean that the government should continue to step in all the time, nor does it mean it should be letting them constantly run free. Economics has developed far further than just assuming we do X thing in Y situation each time. I've already stated that I don't want to see us not having any state intervention, but nor do I want the state to be intervening when it's unnecessary. If a country suffers rising unemployment, and the government doesn't analyse the type on unemployment, and they just increase AD to fix it. If it's cyclical unemployment, then great, it'll help. If the unemployment was geographically immobile, it won't do a thing. This shows that you can't just take everything as absolute in economics, there are far more variables to consider, and then it's the state's job to make the economically best decision, whether that be not intervening or intervening.

This is just us two going around in circles now, which is quite pointless. You're also insistent on acting like I'm purely capitalist, I already disagreed with that sentiment, so you're wasting your time saying that I'm assuming markets are perfect, they're not, the system is flawed, I accept that, I am just all for having a capitalist system where the state acts to correct any failures that may occur, I believe this system is far better than a socialist system, which has more severe flaws than the capitalist system, which are harder to correct making it far more difficult to implement. I don't see the point in assuming that markets always act perfectly, for the sake of not admitting to being part socialist.

Friedman made few good points, he simply rehashed and dumbed down what Hayek wrote and applied it to an American context. I've read a lot of both of them, and Hayek is a million times smarter. Friedman's monetarist stuff is a complete contradiction to his other stuff (that the state is supposed to step in out of nowhere and take these huge measures to provide liquidity in the system, when in everything else he writes, markets are naturally equilbriating and everything the state does is bad), not to mention it's a crock of ****. But because of how haywire the discipline has gone, people actually listen to this stuff, and his work on the Great Depression is considered by many to be the Bible, and this would include our federal reserve chair. He's also incredibly ideologically inconsistent in that he never ONCE criticizes our massive military or suggests we move toward privatizing it (although this happened in the Bush administration), and if you believe in anything Friedman says, than the military should be cut in half and privatized like crazy. Of course he would never say this because he had political motivations of making his ideology popular to the Republican Party. That's the main reason why I don't respect him.

I already answered most of this in the other posts. To be fair, for a while it was unclear what you believed and I was making judgements based on what you had said...I mean, you said footballers weren't overpaid, started a post on why capitalism is superior to socialism, in another post you pulled up a thing on comparative advantage, you liked some posts that were pretty far right-wing, so judging by those things and by some of your arguments and what you were focusing on, I figured you were just a standard econ type. In the end it seems that we agree more than it seemed at first, but if you do believe that "markets can manage themselves fine," than market failure shouldn't occur, and certainly not on a global scale. If they manage themselves fine, than the best solution is almost always to remove any impediments to their functioning, whether these are regulations, state-owned enterprises, taxes, tariffs, etc. This is what Friedman thought and what most economists have thought for the past 30 years (and what most of the American public thinks), and seems to be what many people in this thread think. If you believe that markets are inherently unstable and should be tempered by an active state, as I do, than you pretty much agree with Keynes. I'm still not sure which side you're on.

Also, you started a thread saying that pure capitalism was better than pure socialism. We both agreed that a mix of markets and socialism is what is best, so how then does the prove capitalism is inherently superior to socialism? If given the choice between traditional capitalism and pure socialism (assuming that there was an urban revolution in an industrialized country that created such a system), I would certainly choose pure socialism (unless I was one of the few wealthy people in traditional capitalism).
You say you can't be criticized for advocating for pure capitalism, when that's what this very thread is doing. It's completely unfair for you to include welfare states in your definition of capitalism when we're debating between the inherent merits of socialism and capitalism (especially considering you 'liked' Chaz sexington's post that described Britain and Sweden as socialist, so we should put those both in the socialist category and not the capitalist category, right?). We're both socialists and we're both capitalists, and that means we think there is a lot of merit and flaws to both systems/ideologies.

If you think, as I do, that America is too capitalist, than you (along with me) would be considered to be a pinko-commie by American standards and to be too far to the left by any American economist's standards. For most American economists and for most of the American public, American hadn't gone capitalist enough. It wasn't doing enough to cut back on the size of the state and its involvement in the economy. This was always the solution to every problem for American economists. Then the crisis hit, and now a lot of people are re-thinking the discipline.

******* evil university internet blocked my post earlier. Anyway, here goes...

I've lived in both Norway and Britain, which I would consider socialist economies. Norway only survives due the fact that 75% of its income is government-owned oil revenue and Britain's struggling. In Norway I feel socialism has gone way too far - an example being a political debate where the socialist tree-huggers were trying to defend high taxes against a bunch of small to medium businesses (family businesses) who had to take out loans to pay tax. They were all running profits, but during bad years they had to spend all their savings on taxes.

In other words, its economy is dependent on its resources...every country is like that.

Also, if you're going to include Norway and Britain as socialist (Norway I can understand, but Britain?) than that means the debate is between countries like Norway and Britain and countries that are much more traditionally capitalist...if these are your categories, none of the OECD countries really would qualify as capitalist. We'd have to look at countries like Mexico, and I would definitely prefer Norway or Britain to Mexico (unless I was a rich Mexican, which would be awesome).

A more local example is one of the local schools were banned from serving food at the price of 40 quid a month, as poorer students couldn't necessarily afford this. This is a country were the minimum wage is 10£ an hour.

These are your problems? Man, I would prefer having to deal with that than having to deal with 1 in 7 people living in poverty and unemployment at the highest levels since the 30's (America right now).

Immigration also struggles in socialist countries. In Norway hardly any Somalis speak Norwegian and 99% (official figure) are unemployed. In the US, where unemployment benefits aren't very good, the statistics are much better. The problem is that those that are actually unemployed don't get as good a treatment as others.

And you don't think these immigration issues have to do with the fact that Norway is pretty much the most homogenous country in the world?

As before, the NHS spends over 100,000,000,000 quid a year on catering to 51 million people. This is just another example of how the private sector (Germany) can do this cheaper and faster. In Norway it is ILLEGAL to offer private companies building contracts for roads, though some clever right-wingers in the south (Kristiansand) figured out a loophole in the legislation and got it done privately, which made the road cheaper and of the same quality as the other roads.

And our healthcare system is completely inadequate. I would much rather live in a place with an "inefficient" healthcare system that took care of me than an "efficient" one that didn't. I don't care if the banker makes 400,000 instead of 5, and I guess that's why I answered socialist in the poll.

On the other hand, I prefer governments subsidising flights so more people can afford to travel, subsidising public transport (though not running it - it's mostly publicly run in Norway and it's a disaster), subsidising roads etc.

Public transportation is non-existent in the US because of its history of private involvement. This means that Americans all drive big cars, consume lots of oil, pollute the air like crazy, and get fat from never walking anywhere. In fact, in many cities the auto companies actually bought up public transportation and dismantled so people would have to buy cars.

I am however for either
A) Regressive taxation. Rich people tend to use less public services, so why is it fair that they pay a higher net tax than others?
B) More votes to the rich. They supply the money and should have a say in how it's spent! Alternatively, only make landowners eligible to vote.

Lol assuming you're joking...if not, I don't know what to say. However, this is 'pure capitalism,' and for much of the capitalist countries' history, non-land owners couldn't vote (in Britain this was until 1867). Another reason why capitalism sucks is because capitalist governments are afraid of the poor using their votes to re-distribute wealth.

I actually just finished taking a class called Capitalism and its alternatives...but I am in no state of mind to process all of this text and come up with some sort of rational response. However, I thought some of you might appreciate this video if you haven't already seen it. Not necessarily capitalism vs socialism per se, but these two guys were certainly close to the opposite sides of the spectrum. Anyways I found it rather entertaining and the economics behind it are actually very sound.

YouTube - "Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem

That video is awesome!!!!!!!!!!!! But it was unfair to Keynes, they sort of portrayed him as a monetarist with the 'liquidity' trap and all that. That's Friedman, not Keynes. Keynes was the one that questioned the effectiveness of monetary policy with his famous 'pushing on a string' criticism. For Keynes, both fiscal and monetary policy should be used to control the economy. For monetarists: only monetary policy, because fiscal policy involves state-spending, and any state-spending is inherently inefficient.



Well, there went my day. Good lord I'm tired. If you guys think this takes a long time to read, imagine how long it takes to write.