Capitalism vs Socialism

[I Hate Fish]

As long as there is free will, man will exploit man through the various "isms" and man will kill man.

 

[Joel`]

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.

We used to use Keyenesian style demand management, but that era is over, and the government has rules laid out determining how fiscal policy is used. Strictly speaking, monetary policy is the only thing we actively use to control the economy.

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.

What textbooks are you reading? My textbooks both say that monetarism failed in the '80's, and Keynesian demand management has also been made extinct. As I said, it's wrong of economists to just assume one case applies for everything.

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?

America is not England. I don't know how Economics is taught there, so I don't go around screaming about most textbooks say this, when frankly, the modern ones in Britain don't say any of the things you claim they do.

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

There's still inequality though, since you won't to argue with me saying I must debate on the merits of pure capitalism, why are you not doing the same with socialism? Both systems have incredible flaws, it's naive and stupid to debate on the merits of the pure ones. The capitalist system driving a socialist state has been implemented in pretty much every successful economy in today's age. The government should play as small a role as possible, and only step in when the markets do fail. And I'm sorry, but it's ignorant to assume that markets will never fail, and I have no interest in which capitalism God of Economics says that they don't. Economics is a subject that constantly changes, by the sounds of it, perhaps America should get out of the past.

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.

Markets can and can't manage themselves fine. Each market is different, and thus the state is expected to act differently depending. Whether that be by intervention or letting the market be.

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.

He made other points than Britain is a socialist country, you know? Why must we debate on the merits of pure capitalism and pure socialism, when both systems are so flawed neither will be implemented, thus making it a pointless argument. We're most likely never going to live in a pure system of either, so why bother arguing over a purist system? I would much rather live in a capitalist state, where the government acts to correct market failures and to re-distribute the wealth created by the free market capitalism, and to make sure the economy is in a state allowing firms to produce. And before you say it, yes I realise it is the country's resources that create the wealth, but as I have stated many times before, capitalism makes the most of them in the most productive way, even if market failures do occur.

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.

Americans are stupid.

 

[Chaz Sexington]

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

Ah, but you fail to see my point! The standard of living is due to the vast natural resources, not the political system. Even Kuwait manage this.

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).

Comparing countries won't really work, as the cultures are inherently different. I'm just saying that the level of taxation isn't helping businesses, as it's strangling them, preventing them from upgrading equipment or buying new technology.

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).

Why the US is in its current situation isn't due to capitalism, it's due to unwarranted public spending (wars). But it's the principle of the matter, e.g. if you can afford a Lamborghini, but your neighbour can't, should you be banned from buying one?

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?

No. We grant them the exact same, if not better, opportunities as other Norwegians.

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.

I don't think the American one is very good either, however you're still paying for inefficient public healthcare over here, whereas you are free to chose in the US, depending on your income. I would prefer a mix of private companies with public funding as a healthcare system, as I know that both ends of the spectrum (NHS and US system) are inadequate; the NHS in quality and the US system in coverage.

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.

A car in Norway costs 350,000 NOK, aka 60,000 USD. Due to taxes. Public transport outside the cities isn't viable in the US due to the geography and demographics, so subsidising petrol and cheap cars make sense.

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.

Re-distribute is a nice word for institutionalised theft

In the end, you need a mix of both, as libertarianism and communism both fail hard at most things.

 

[Nixon]

Do people think that either system can be implemented in every country? Are some countries suited to one rather than another in terms of culture and way of life? Or do you believe that the people in a country would adapt to a new system?

 

[Chaz Sexington]

Do people think that either system can be implemented in every country? Are some countries suited to one rather than another in terms of culture and way of life? Or do you believe that the people in a country would adapt to a new system?

I personally believe it depends on the culture. If you introduced a Scandinavian social democracy as the new US style, it wouldn't work due to demographics, culture and geography. In this way, I think that many countries wouldn't be able to handle democracy either, as they'd elect a dictator who would abolish the democracy.

 

[curtis290]

We used to use Keyenesian style demand management, but that era is over, and the government has rules laid out determining how fiscal policy is used. Strictly speaking, monetary policy is the only thing we actively use to control the economy.

But that's not true, the government uses both to manage the economy. It's true that they focus publicly on monetary policy and don't claim that government spending is for the sake of increasing or decreasing aggregate demand (which would be unpopular, they claim it is for other reasons, in the case of increasing spending, perhaps social services or defense spending, or in the case of decreasing spending, to cut back on inefficiency), but they know the effects fiscal policy have on the economy and act accordingly. This is why Brown and Bush went on spending sprees in the 00's, they wanted to keep consumption high and keep signs of the recession from showing.

What textbooks are you reading? My textbooks both say that monetarism failed in the '80's, and Keynesian demand management has also been made extinct. As I said, it's wrong of economists to just assume one case applies for everything.

America is not England. I don't know how Economics is taught there, so I don't go around screaming about most textbooks say this, when frankly, the modern ones in Britain don't say any of the things you claim they do.

Perhaps things are different in England. The Keynesian influence is much stronger there. The Cambridge Journal of Economics, for example, is great, but before the crisis, from what I understand it had lost prestige in recent years due to the direction the discipline has taken. The textbooks I read use nothing but models (that are based on assumptions such as markets being self-equilibriating) that prove that all government spending is inefficient, that regulations (whether they're minimum wage or anti-trust regulations) are inefficient, that monetary policy alone is effective in controlling the economy, that "free trade" always works. Since these models use math, economists assume that their discipline is a hard science and claim they are the only ones who should be involved in the decision-making process. They want insulation from popular pressures and from accountability for that matter (why Bernanke freaked out at the notion of auditing the Fed months after the fact, he said it would impede his powers), and they want "politics" to be left out of the equation. Well, every economic decision is fundamentally a political one, but economists want to be the ones that make the decisions.

Markets can and can't manage themselves fine. Each market is different, and thus the state is expected to act differently depending. Whether that be by intervention or letting the market be.

Agreed. But this belief separates us from mainstream economists, who would use math and models and a one-size-fits-all plan to solve a nation's problems (the Washington Consensus) rather than look at the unique situation of every country.

There's still inequality though, since you won't to argue with me saying I must debate on the merits of pure capitalism, why are you not doing the same with socialism? Both systems have incredible flaws, it's naive and stupid to debate on the merits of the pure ones. The capitalist system driving a socialist state has been implemented in pretty much every successful economy in today's age. The government should play as small a role as possible, and only step in when the markets do fail. And I'm sorry, but it's ignorant to assume that markets will never fail, and I have no interest in which capitalism God of Economics says that they don't. Economics is a subject that constantly changes, by the sounds of it, perhaps America should get out of the past.

He made other points than Britain is a socialist country, you know? Why must we debate on the merits of pure capitalism and pure socialism, when both systems are so flawed neither will be implemented, thus making it a pointless argument. We're most likely never going to live in a pure system of either, so why bother arguing over a purist system? I would much rather live in a capitalist state, where the government acts to correct market failures and to re-distribute the wealth created by the free market capitalism, and to make sure the economy is in a state allowing firms to produce. And before you say it, yes I realise it is the country's resources that create the wealth, but as I have stated many times before, capitalism makes the most of them in the most productive way, even if market failures do occur.

You say that we're not discussing pure capitalism vs. socialism, but isn't that part of the discussion? What about this post:

Post 79:
Only people who live in the fantasy world of pseudo-economics come up with half the stuff you say. There's always going to be a mix of capitalism and socialism, if you're going to argue between the two then you take the two fundamental ideals

Also, on several occasions you claim that pure capitalism is better than pure socialism:

OP: Looking at every country that has ever tried leaning more towards socialist policy than capitalism policy they have always been far less successful
Post 63: We have provision of merit goods and taxation disincentives on demerit goods, no? But that's mixing both ideals. If we went strictly free market vs complete planned economy, the free market wins every time.

That's a place where I disagreed with you. I would prefer to live under a purely socialist system (perhaps the USSR in the 50's, 60's, and 70's) than a purely capitalist system (perhaps the US until the 1930's). I also would prefer to live in a system that is closer to socialism (Sweden) than to capitalism (Mexico). You said that in the OP that "every country that has ever tried leaning more towards socialist policy than capitalism policy [has] been far less successful," which I disagree with. I would say the Scandinavian countries are successful by some of the most important indicators (well-being surverys, political participation, GINI coefficient, health care, low poverty and crime rates, government responsiveness, among other things), and they lean more towards socialism. More capitalistic leaning countries have greater amounts of inequality and social problems. So that's where I disagreed with you. As I said before, I think markets are useful, but I think the pursuit of social welfare and equality is extremely important (in fact, more important than "productivity," but I won't concede that a highly socialist economy has to be less "productive"), so I believe in a mix between the two, leaning more toward "socialism." Which is how I answered in the poll.

Also, if markets fail and are inherently unstable, why should the government "play as small a role as possible?" If markets are prone to instability, the smaller the role the government plays, the more volatile they are likely to be.

As far as economics changing goes, it's a good thing the discipline changes. Keynesians used to dominate the discipline. But 30-40 years ago we had the Friedmanite revolution, and the discipline has taken a nasty turn (and for political reasons as well). Luckily, since the crisis, people are really beginning to rethink the discipline, and everyone is re-reading thinkers like Keynes and Minsky now.

Americans are stupid.

Agreed. But I think the Brits have more in common with Americans than they'd like to admit. We're an offspring of Britain (though influenced a lot by other European cultures). It's always been my personal belief that the British are the Americans of Europe. This seems to extend as well to politics: Americans are vehemently anti-state and pro-free market, and the British seem to lean more this way than continental Europeans. In Britain, social conservatives tend to be more economically conservative, which is how it works in America. Often times it's not like this on the continent, where you have parties like the Christian Social Democrats that are socially conservative and support the idea of the welfare state. It's the complete opposite in the US, where we have tons of social conservatives, and ideologically, they are more passionate about being anti-state and pro-free market than taking a stand on social issues. Many social conservatives vote on abortion alone (which of course was a Supreme Court decision and can't be influenced by public policy), but for the majority of them, they only want the candidate that promises the largest tax cuts who throws in the occasional speech on "family values." The idea of a Christian who was center-left on economic issues would be sickening to them. I think Britain is the same in that the economic conservatives are generally socially conservative as well (correct me if I'm wrong).

---------- Post added at 03:46 PM ---------- Previous post was at 03:24 PM ----------

Pretty much did an essay on this the other month, it was on nationalism, but hey all the same.

If anyones interested in nationalism, check out Tom Nairns 'The Break up of Britain'. He basically argues the point that nationalism can be used as a tool to avoid homogenising economies that come with capitalism. Quite an interesting read.

Looks interesting, will check it out.

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

I think 'crazy' would be the better adjective.

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

Glad you took the time to read it. Although, I'm sure the readers will believe the better points are being made by the person they agree more with, as is always the case in debates.

Do people think that either system can be implemented in every country? Are some countries suited to one rather than another in terms of culture and way of life? Or do you believe that the people in a country would adapt to a new system?

Yes, yes, and yes. For example, a communist system being forced upon a people will lack legitimacy and productivty would be extremely low since the populace wouldn't give a ****. But in the case of a popular revolution, the populace will believe in 'building socialism' and in what they are doing, and productivity will be high (how it was in the USSR before the state lost legitimacy and the people stopped caring and started drinking in the 70's and 80's). Some countries will be inherently more capitalistic leaning for a variety of reasons. The US's huge size I think makes it much more likely to be more free-market oriented; the state will just be inefficient in such a large country. States seem to be much more efficient at playing a large role in the economy in small countries.

Also, countries like the US and UK have such a strong history of economic liberalism that a socialistic system wouldn't work there unless attitudes changed...people definitely believe in these places that work is purely for profit. The motivated ones are constantly trying to climb their way up the latter, and the other people work just hard enough not to get fired and are paid just enough so that they don't quit. So if we saw socialism in the US, there would be a bunch of free-riders. Wouldn't happen in some other cultures.

Another thing is that the welfare state tends to be smaller in immigrant countries, which makes sense. Why redistribute your resources to some immigrant who just came there to suck up welfare money? This is another reason why Americans are so anti-state, they know that a lot of immigrants just come for welfare money. There's a racial aspect as well: the American south has shown time and time again that the real reason it is so anti-state is that because it doesn't want to redistribute white money to blacks, and poor whites believe this as well (because they know there's one group below them on the social ladder, blacks, and they don't want that to change). During the Great Society era, the South blocked the bill that would have given us European-style national health care because it would have racially integrated the hospitals. Another example is how worshipped Reagan is by Southerners, his anti-state rhetoric was so popular with them (and they still parrot it to this day) is because he would make these speeches on the "welfare queens" (black single mothers who would play all of these tricks to get more welfare money, such as having more kids).

This is also proven by the Scandinavian countries: they are super homogenous, which means they are more willing to fork over their resources, because they know they are giving them to their countrymen of the same ethnicity. The US and UK are more diverse places though, which is a cultural reason they wouldn't support that kind of welfare state.

 

[sass101]

But that's not true, the government uses both to manage the economy. It's true that they focus publicly on monetary policy and don't claim that government spending is for the sake of increasing or decreasing aggregate demand (which would be unpopular, they claim it is for other reasons, in the case of increasing spending, perhaps social services or defense spending, or in the case of decreasing spending, to cut back on inefficiency), but they know the effects fiscal policy have on the economy and act accordingly. This is why Brown and Bush went on spending sprees in the 00's, they wanted to keep consumption high and keep signs of the recession from showing.



Perhaps things are different in England. The Keynesian influence is much stronger there. The Cambridge Journal of Economics, for example, is great, but before the crisis, from what I understand it had lost prestige in recent years due to the direction the discipline has taken. The textbooks I read use nothing but models (that are based on assumptions such as markets being self-equilibriating) that prove that all government spending is inefficient, that regulations (whether they're minimum wage or anti-trust regulations) are inefficient, that monetary policy alone is effective in controlling the economy, that "free trade" always works. Since these models use math, economists assume that their discipline is a hard science and claim they are the only ones who should be involved in the decision-making process. They want insulation from popular pressures and from accountability for that matter (why Bernanke freaked out at the notion of auditing the Fed months after the fact, he said it would impede his powers), and they want "politics" to be left out of the equation. Well, every economic decision is fundamentally a political one, but economists want to be the ones that make the decisions.



Agreed. But this belief separates us from mainstream economists, who would use math and models and a one-size-fits-all plan to solve a nation's problems (the Washington Consensus) rather than look at the unique situation of every country.



You say that we're not discussing pure capitalism vs. socialism, but isn't that part of the discussion? What about this post:



Also, on several occasions you claim that pure capitalism is better than pure socialism:



That's a place where I disagreed with you. I would prefer to live under a purely socialist system (perhaps the USSR in the 50's, 60's, and 70's) than a purely capitalist system (perhaps the US until the 1930's). I also would prefer to live in a system that is closer to socialism (Sweden) than to capitalism (Mexico). You said that in the OP that "every country that has ever tried leaning more towards socialist policy than capitalism policy [has] been far less successful," which I disagree with. I would say the Scandinavian countries are successful by some of the most important indicators (well-being surverys, political participation, GINI coefficient, health care, low poverty and crime rates, government responsiveness, among other things), and they lean more towards socialism. More capitalistic leaning countries have greater amounts of inequality and social problems. So that's where I disagreed with you. As I said before, I think markets are useful, but I think the pursuit of social welfare and equality is extremely important (in fact, more important than "productivity," but I won't concede that a highly socialist economy has to be less "productive"), so I believe in a mix between the two, leaning more toward "socialism." Which is how I answered in the poll.

Also, if markets fail and are inherently unstable, why should the government "play as small a role as possible?" If markets are prone to instability, the smaller the role the government plays, the more volatile they are likely to be.

As far as economics changing goes, it's a good thing the discipline changes. Keynesians used to dominate the discipline. But 30-40 years ago we had the Friedmanite revolution, and the discipline has taken a nasty turn (and for political reasons as well). Luckily, since the crisis, people are really beginning to rethink the discipline, and everyone is re-reading thinkers like Keynes and Minsky now.



Agreed. But I think the Brits have more in common with Americans than they'd like to admit. We're an offspring of Britain (though influenced a lot by other European cultures). It's always been my personal belief that the British are the Americans of Europe. This seems to extend as well to politics: Americans are vehemently anti-state and pro-free market, and the British seem to lean more this way than continental Europeans. In Britain, social conservatives tend to be more economically conservative, which is how it works in America. Often times it's not like this on the continent, where you have parties like the Christian Social Democrats that are socially conservative and support the idea of the welfare state. It's the complete opposite in the US, where we have tons of social conservatives, and ideologically, they are more passionate about being anti-state and pro-free market than taking a stand on social issues. Many social conservatives vote on abortion alone (which of course was a Supreme Court decision and can't be influenced by public policy), but for the majority of them, they only want the candidate that promises the largest tax cuts who throws in the occasional speech on "family values." The idea of a Christian who was center-left on economic issues would be sickening to them. I think Britain is the same in that the economic conservatives are generally socially conservative as well (correct me if I'm wrong).

---------- Post added at 03:46 PM ---------- Previous post was at 03:24 PM ----------



Looks interesting, will check it out.



I think 'crazy' would be the better adjective.



Glad you took the time to read it. Although, I'm sure the readers will believe the better points are being made by the person they agree more with, as is always the case in debates.



Yes, yes, and yes. For example, a communist system being forced upon a people will lack legitimacy and productivty would be extremely low since the populace wouldn't give a ****. But in the case of a popular revolution, the populace will believe in 'building socialism' and in what they are doing, and productivity will be high (how it was in the USSR before the state lost legitimacy and the people stopped caring and started drinking in the 70's and 80's). Some countries will be inherently more capitalistic leaning for a variety of reasons. The US's huge size I think makes it much more likely to be more free-market oriented; the state will just be inefficient in such a large country. States seem to be much more efficient at playing a large role in the economy in small countries.

Also, countries like the US and UK have such a strong history of economic liberalism that a socialistic system wouldn't work there unless attitudes changed...people definitely believe in these places that work is purely for profit. The motivated ones are constantly trying to climb their way up the latter, and the other people work just hard enough not to get fired and are paid just enough so that they don't quit. So if we saw socialism in the US, there would be a bunch of free-riders. Wouldn't happen in some other cultures.

Another thing is that the welfare state tends to be smaller in immigrant countries, which makes sense. Why redistribute your resources to some immigrant who just came there to suck up welfare money? This is another reason why Americans are so anti-state, they know that a lot of immigrants just come for welfare money. There's a racial aspect as well: the American south has shown time and time again that the real reason it is so anti-state is that because it doesn't want to redistribute white money to blacks, and poor whites believe this as well (because they know there's one group below them on the social ladder, blacks, and they don't want that to change). During the Great Society era, the South blocked the bill that would have given us European-style national health care because it would have racially integrated the hospitals. Another example is how worshipped Reagan is by Southerners, his anti-state rhetoric was so popular with them (and they still parrot it to this day) is because he would make these speeches on the "welfare queens" (black single mothers who would play all of these tricks to get more welfare money, such as having more kids).

This is also proven by the Scandinavian countries: they are super homogenous, which means they are more willing to fork over their resources, because they know they are giving them to their countrymen of the same ethnicity. The US and UK are more diverse places though, which is a cultural reason they wouldn't support that kind of welfare state.

Omg I've never seen a post as long as that before (Besides stories) :O

 

[Joel`]

But that's not true, the government uses both to manage the economy. It's true that they focus publicly on monetary policy and don't claim that government spending is for the sake of increasing or decreasing aggregate demand (which would be unpopular, they claim it is for other reasons, in the case of increasing spending, perhaps social services or defense spending, or in the case of decreasing spending, to cut back on inefficiency), but they know the effects fiscal policy have on the economy and act accordingly. This is why Brown and Bush went on spending sprees in the 00's, they wanted to keep consumption high and keep signs of the recession from showing.

Fiscal policy is a tool of supply side policy, it is no longer recognised as a tool of management in Britain.

Perhaps things are different in England. The Keynesian influence is much stronger there. The Cambridge Journal of Economics, for example, is great, but before the crisis, from what I understand it had lost prestige in recent years due to the direction the discipline has taken. The textbooks I read use nothing but models (that are based on assumptions such as markets being self-equilibriating) that prove that all government spending is inefficient, that regulations (whether they're minimum wage or anti-trust regulations) are inefficient, that monetary policy alone is effective in controlling the economy, that "free trade" always works. Since these models use math, economists assume that their discipline is a hard science and claim they are the only ones who should be involved in the decision-making process. They want insulation from popular pressures and from accountability for that matter (why Bernanke freaked out at the notion of auditing the Fed months after the fact, he said it would impede his powers), and they want "politics" to be left out of the equation. Well, every economic decision is fundamentally a political one, but economists want to be the ones that make the decisions.

None of my textbooks follow strict models, the only Maths involved is the Marshall-Lerner condition, and in Microeconomics with balance sheets and cost curves etc. We're generally taught the theories and the flaws within them, and what we do to fix them. You'd get very few marks in an exam if you just assumed one size fit all, the majority of marks are for evaluating your ideas.

Agreed. But this belief separates us from mainstream economists, who would use math and models and a one-size-fits-all plan to solve a nation's problems (the Washington Consensus) rather than look at the unique situation of every country.

As I said, we wouldn't assume we increase demand to solve unemployment blandly, you look at the root cause of the unemployment and attempt to fix it accordingly. I'd find it quite annoying if the economists at the top of my country refused to look at the individual states as of thing, and as I said, at education level, we're taught against that philosophy.

You say that we're not discussing pure capitalism vs. socialism, but isn't that part of the discussion? What about this post:

We're discussing capitalism vs. socialism, that doesn't mean you can only choose between the pure of each system, that makes little sense when you consider the flaws of both systems. I wouldn't like to live in a pure system of either. And we're still debating over the fundamental ideals of each system, I believe a welfare state needs to exist, that doesn't mean I want to see the state controlling all of the markets. Just like if you were arguing for socialism you wouldn't be saying you want the state to play a small part. You still have to take a fundamental philosophy that you believe in, and then accounting for flaws you add bits from the other side in to strike a balance of your ideal system. I still believe that's arguing capitalism vs. socialism, no?

Also, on several occasions you claim that pure capitalism is better than pure socialism:

The free market has greater allocative efficiency but will under-provide merit goods. A planned economy is going to be less productive with better equality. Would you rather be stung by a bee or a wasp? Either way, it's going to hurt.

That's a place where I disagreed with you. I would prefer to live under a purely socialist system (perhaps the USSR in the 50's, 60's, and 70's) than a purely capitalist system (perhaps the US until the 1930's). I also would prefer to live in a system that is closer to socialism (Sweden) than to capitalism (Mexico). You said that in the OP that "every country that has ever tried leaning more towards socialist policy than capitalism policy [has] been far less successful," which I disagree with. I would say the Scandinavian countries are successful by some of the most important indicators (well-being surverys, political participation, GINI coefficient, health care, low poverty and crime rates, government responsiveness, among other things), and they lean more towards socialism. More capitalistic leaning countries have greater amounts of inequality and social problems. So that's where I disagreed with you. As I said before, I think markets are useful, but I think the pursuit of social welfare and equality is extremely important (in fact, more important than "productivity," but I won't concede that a highly socialist economy has to be less "productive"), so I believe in a mix between the two, leaning more toward "socialism." Which is how I answered in the poll.

And I choose a system leaning toward capitalism, which is how I answered the poll. As I've already said, Sweden is still a capitalist economy driving the socialist state, so it's a poor example of a successful socialist system, especially since you keep hanging me up on arguing for pure capitalism. I don't know enough about the USSR history, I'll have to check it up, you're contradicting what I was taught about the USSR, so I can't sensibly argue without my own knowledge.

Also, if markets fail and are inherently unstable, why should the government "play as small a role as possible?" If markets are prone to instability, the smaller the role the government plays, the more volatile they are likely to be.

They should play as small a role as possible, as in only step in to correct failures, and their intervention stops there.

As far as economics changing goes, it's a good thing the discipline changes. Keynesians used to dominate the discipline. But 30-40 years ago we had the Friedmanite revolution, and the discipline has taken a nasty turn (and for political reasons as well). Luckily, since the crisis, people are really beginning to rethink the discipline, and everyone is re-reading thinkers like Keynes and Minsky now.

Keynesian broke down for Britain in the '70's and the winter of discontent, monetarism broke down in the '80's when destroying the money supply didn't have as much of an effect as they'd expected. The subject needs to venture into new directions rather than repeating history, in Science if your experiment fails, and you try a new theory which also fails, you find a new theory and not force the old ones to fit.

Agreed. But I think the Brits have more in common with Americans than they'd like to admit. We're an offspring of Britain (though influenced a lot by other European cultures). It's always been my personal belief that the British are the Americans of Europe. This seems to extend as well to politics: Americans are vehemently anti-state and pro-free market, and the British seem to lean more this way than continental Europeans. In Britain, social conservatives tend to be more economically conservative, which is how it works in America. Often times it's not like this on the continent, where you have parties like the Christian Social Democrats that are socially conservative and support the idea of the welfare state. It's the complete opposite in the US, where we have tons of social conservatives, and ideologically, they are more passionate about being anti-state and pro-free market than taking a stand on social issues. Many social conservatives vote on abortion alone (which of course was a Supreme Court decision and can't be influenced by public policy), but for the majority of them, they only want the candidate that promises the largest tax cuts who throws in the occasional speech on "family values." The idea of a Christian who was center-left on economic issues would be sickening to them. I think Britain is the same in that the economic conservatives are generally socially conservative as well (correct me if I'm wrong).

We're probably closer to America than the rest of Europe, you're right, but no offence intended, I find Americans to be far more arrogant about their system. When Obama was being elected, and he was being labelled a hardcore socialist, well.. Also, religion should never have any influence over politics whatsoever, but you can see my opinions on religion in the "Do you believe in God?" thread.

 

[curtis290]

Omg I've never seen a post as long as that before (Besides stories) :O

Well it was two posts, but if you think that's long, you should check out pages 3 and 4.

Ah, but you fail to see my point! The standard of living is due to the vast natural resources, not the political system. Even Kuwait manage this.

I didn't fail to see your point, it's exactly what I said.

Comparing countries won't really work, as the cultures are inherently different. I'm just saying that the level of taxation isn't helping businesses, as it's strangling them, preventing them from upgrading equipment or buying new technology.

Well each country's geography, demography, and history is different, but if you can't compare them at all then you can't have much of a discussion about anything (that's what Comparative Politics is about), and we certainly couldn't have a discussion in this thread.

Taxation on business does provide impotant social services that Norwegians have that I envy them for. It also prevents huge firms from gaining monopolies. Sure, in the US we have small businesses, but they are increasinlg being limited to things like restaurants. Small businesses are being crowded out in the US, not because of heavy taxes or big government but because the government is small and stays out of the economy and doesn't tax large corporations very much, so you get the Wal-Marts of the world replacing local hardware stores.

Why the US is in its current situation isn't due to capitalism, it's due to unwarranted public spending (wars). But it's the principle of the matter, e.g. if you can afford a Lamborghini, but your neighbour can't, should you be banned from buying one?

I doubt it's a case of being "banned" from buying one, it's probably that taxes are so high that it's difficult. Anyway, yeah, if paying for your neighbor's medical bills so he doesn't die of cancer means taxing you so you can't get the Lamborghini, then I'm all for it. That's why I answered socialist.

No. We grant them the exact same, if not better, opportunities as other Norwegians.

So you're telling me that the world's most homogenous country wouldn't have any immigration problems? That immigrants wouldn't have difficulties adapting to the culture? I find it hard to believe. Also, if you give them the same, if not better opportunities than natives, than why is unemployment so high?

I don't think the American one is very good either, however you're still paying for inefficient public healthcare over here, whereas you are free to chose in the US, depending on your income. I would prefer a mix of private companies with public funding as a healthcare system, as I know that both ends of the spectrum (NHS and US system) are inadequate; the NHS in quality and the US system in coverage.

You're free to choose between ****** overpriced insurance packages. You might say the NHS is inefficient, and I don't know much about it, but I would prefer an inefficient system that takes care of me to one that doesn't. Another reason why I answered socialist. Taking care of a country's citizens to me is more important than productivity.

A car in Norway costs 350,000 NOK, aka 60,000 USD. Due to taxes. Public transport outside the cities isn't viable in the US due to the geography and demographics, so subsidising petrol and cheap cars make sense.

But public transportation inside the big cities does make sense, as it does in medium sized cities, yet it's virtually non-existent. Bus and train systems between cities also make sense, yet in the US they are privatized and incredibly expensive. It's cheaper to drive a car to a neighboring town than to take a bus. This is bad for the environment and leaves us consuming too much oil. High-speed trains would make regional travel cheaper and more convenient than using planes (also very bad for the environment), but there's no initiative in the US to do so because we don't like big bad government.

In the end, you need a mix of both, as libertarianism and communism both fail hard at most things.

I think most people agree.

Fiscal policy is a tool of supply side policy, it is no longer recognised as a tool of management in Britain.

Not sure about Britain but in America "supply side economics" is another name for 'trickle-down theory.' Maybe it means a different term there. It is true that in places like the US and Britain, fiscal policy isn't publicly considered a tool of management, but people in government know the effects it has on the economy and act accordingly. Which is why Brown and Bush went on spending sprees.

None of my textbooks follow strict models, the only Maths involved is the Marshall-Lerner condition, and in Microeconomics with balance sheets and cost curves etc. We're generally taught the theories and the flaws within them, and what we do to fix them. You'd get very few marks in an exam if you just assumed one size fit all, the majority of marks are for evaluating your ideas.

Hmm, well, in America, econ textbooks are almost nothing but math, and in econ classes all of your assignments are problem sets and the tests are entirely mathematically based...you wouldn't ever write an essay, for example.

As I said, we wouldn't assume we increase demand to solve unemployment blandly, you look at the root cause of the unemployment and attempt to fix it accordingly. I'd find it quite annoying if the economists at the top of my country refused to look at the individual states as of thing, and as I said, at education level, we're taught against that philosophy.

I wouldn't disagree with that, although if unemployment happened to be high not because of structural issues but because of a general recession, than I would increase government spending to increase consumption and push the economy forward.

We're discussing capitalism vs. socialism, that doesn't mean you can only choose between the pure of each system, that makes little sense when you consider the flaws of both systems. I wouldn't like to live in a pure system of either. And we're still debating over the fundamental ideals of each system, I believe a welfare state needs to exist, that doesn't mean I want to see the state controlling all of the markets. Just like if you were arguing for socialism you wouldn't be saying you want the state to play a small part. You still have to take a fundamental philosophy that you believe in, and then accounting for flaws you add bits from the other side in to strike a balance of your ideal system. I still believe that's arguing capitalism vs. socialism, no?

So we're discussing the fundamental ideals of each system but can't talk about each system in its pure form? Seems to be a contradiction. We both agree that a mix is needed. We both agree that markets 'work' to a certain extent. We both believe that the state should have a role in planning and managing the economy, that high employment should be pursued, that equality is a good goal in some sense (depends on how much equality you want, but I think you would agree that how Britain looks better today in terms of equality than it was in the 1800's, which is a good thing), that taking care of a populace's social and physical needs is important. So we're both socialists and we're both capitalists. The problem I've had is throughout the discussion you say things like "well Sweden has markets, so that means capitalism is better than socialism." One could also say "Sweden has a huge state, extremely high taxes, as well as a number of qualities that would make many consider it a socialist country, and is better off than more capitalist leaning countries, so that proves socialism is better than capitalism."

The free market has greater allocative efficiency but will under-provide merit goods. A planned economy is going to be less productive with better equality. Would you rather be stung by a bee or a wasp? Either way, it's going to hurt.

I would prefer a planned economy that is less productive but takes care of its citizens than to a more productive economy that doesn't, which is why I answered socialist in the poll. Sure, Britain and the US had extremely productive economies in the 19th century, but for the vast majority of the population, life was pretty rough.

And I choose a system leaning toward capitalism, which is how I answered the poll. As I've already said, Sweden is still a capitalist economy driving the socialist state, so it's a poor example of a successful socialist system, especially since you keep hanging me up on arguing for pure capitalism. I don't know enough about the USSR history, I'll have to check it up, you're contradicting what I was taught about the USSR, so I can't sensibly argue without my own knowledge.

And as I've said, Sweden is still a socialist economy that utilizes markets. As stated earlier we both agree that a mix is necessary. If we're arguing about the fundamental "ideals," well I voted for socialism because I think its ideals are better. I think equality is certainly a better ideal than productivity. Will pure communism without markets work? I don't think it will be very efficient. Will pure capitalism work? I think it will be productive (sometimes too much so, sometimes not enough so) but inherently very unstable and highly unequal. Neither would be successful, but considering communism is supposed to be a utopian society, I certainly think that its ideals are better than capitalism.

As for the USSR, I've studied it quite a bit and under a pretty prominent Russian history scholar. Much of the time people bring in their own ideological bias into the history, so you have a lot of people that go on and on about how inefficient it was an how bad of a system it was and that no one could have actually believed in it, that they all opposed the government other than the few who were brainwashed, etc. etc. Might be different in Britain but in the US at least a lot of people that teach Russian history are cold warriors who bring in a lot of bullshit theory. That's definitely how the popular discourse goes in the US too, the way we understand the USSR is very much influenced by the Cold War and a lot of people still think of it in terms of this mindset (we beat them and they lost, that Reagan defeated them is another one most conservatives believe in, or the most common, "communism fails, can't work, etc.").

Perhaps more importantly, there's the benefit of hindsight: since it fell, people assume that the whole thing was just a failed experiment that lasted a long-time because of how oppressed the people were. Of course in the 50's, 60',s and 70's, when we were still doing nuclear attack drills in the classrooms and when they were beating us in the space race and when we were scared socialism would take over (why we had to intervene in any country that had a socialist-leaning government), the perspective was very different. Back then it was a very efficient machine that was big and scary. Now, since we can look back in history, all people talk about is how it "didn't work." If you consider where Russia was socially, economically, and politically when the Revolution occurred in 1917 and the hardships it went through in World War I, the civil war, and World War II, and where it went in the 50's and 60's, and think it "worked" just fine.

I really don't think I've said anything at all in this thread about the history of the USSR that's the least bit controversial or even incorrect. I don't think any decent Soviet historian would make any serious disagreements with what I said: not that I'm super smart or right or anything, just everything I said was fairly obvious, generic, and not really opinionated, and pretty much in agreement with mainstream scholarship (unless you call the cold warrior scholars mainstream). Was it different from popular discourse or maybe what you or I have heard growing up? Certainly. But that has to do with the inaccuracy of popular discourse.

Practically speaking, a pure version of neither works very well, and you need a combination of both. But in terms of ideals? I prefer equality to productivity, in fact, so much so, that I would support an "inefficient" (of course it depends on how you define efficiency) healthcare system, for example, if it took care of everyone. Or an "inefficient" subway system that provides cheap transportation for the whole populace, meaning they don't have to go out and buy cars that pollute the air. So I voted for socialism in the poll.

They should play as small a role as possible, as in only step in to correct failures, and their intervention stops there.

You stated what you believed without answering my question. If markets fail and are inherently unstable, why should the government "play as small a role as possible?" If markets are prone to instability, the smaller the role the government plays, the more volatile they are likely to be. If the state should play as small a role as possible, it means that markets are inherently self-equilibriating and self-regulating and that the state should get out of the way in order to not interfere with this process.

First of all, the idea that the state should only play as small a role as possible and only to correct failure sounds like you're calling for an extremely small state that does very little...sounds close to pure capitalism. You even said that the US is too capitalistic, and in the US (as well as in any country of the world) the state does much more than only step in to correct failure. At the very least you believe in public schools right?

Third, the logic that "the state should play as small a role as possible, as in only step in to correct failures, and their intervention stops there" has been prevalent in the US for the last few decades, and that is what caused the crisis. The logic has been that "markets know best" was used in deregulating our financial system, which enabled the crisis. So it's an axiom that I profoundly disagree with. We tried getting the state to play as small a role as possible, and it led to giant unsustainable asset booms that are crashing and taking the real economy down with them.

Keynesian broke down for Britain in the '70's and the winter of discontent, monetarism broke down in the '80's when destroying the money supply didn't have as much of an effect as they'd expected. The subject needs to venture into new directions rather than repeating history, in Science if your experiment fails, and you try a new theory which also fails, you find a new theory and not force the old ones to fit.

Keynesianism was perhaps the appropriate theory of the Bretton Woods era. Friedman and the free traders were the appropriate theory of the era of floating exchange rates. What will be the new era and what will its theory be? I don't know. But people these days are throwing out their Friedman books and re-reading Keynes, Minsky, Galbraith, etc.

We're probably closer to America than the rest of Europe, you're right, but no offence intended, I find Americans to be far more arrogant about their system. When Obama was being elected, and he was being labelled a hardcore socialist, well.. Also, religion should never have any influence over politics whatsoever, but you can see my opinions on religion in the "Do you believe in God?" thread.

No disagreement there. Americans are pretty **** arrogant about everything that is our own. When it comes to our free market ideals though, one of the reasons we are so arrogant about our system is that we worship it with a religious fervor...big bad government is about as evil as anything in the world for a lot of Americans, and these Americans tend to be very religious. Usually evangelicals. I'm not sure exactly why, but I have a few hunches. Socially conservative Americans (many of whom tend to reside in the South) tend to dislike blacks (they would never admit it, but they do), and they all really don't like immigrants from Mexico. The state re-distributes wealth by taxing wealthy people (pretty much exclusively white) and giving it to these people.

Also, the state is atheist. It is secular. Conservatives in American insist that we are a Christian nation founded on Christian ideals, and though they don't like to admit it they are aware of how secular the state is. They know that there can't be school-sponsored prayers (Supreme Court decision in the 90's), that they can't have a huge tablet of the ten commandments in a public courthouse (this type of thing has happened a few times recently), that abortion is legal (Supreme Court decision in 73), etc. They also know that the discipline of sociology has a lot of influence in the government (things like social work, criminology, prison corrective stuff) and so does psychology, which are both very atheist disciplines (founded on the ideas of Marx and Freud, respectively, two big time atheists of Jewish decent). Because of this atheism, they want the state to be as small as possible and to play as small as possible a role in our lives, especially if it's the federal government (Southern history, and is less likely to be influenced by Christian politics than local and state governments). Unless, of course, it is enforcing some Christian ideal, then they want the state (federal government) to play a big active role in our lives and telling the state governments what to do. Or immigration. They'd love the government to build a huge expensive fence on the border with Mexico. Or the military. They want to spend even more on the military so we can shove a boot up the ***** of the towelheads.

As far as the Brits go, they aren't nearly as bad about being arrogant about their culture/government/whatever but they do cling to the idea of getting to have an empire (why they joined the War in Iraq, IMO). Also, along with Americans they are somehow paranoid about the world being against them. Though in the Americans' case it's understandable, because a lot of people in the world do hate us, and anti-American sentiment is common and real (and usually deserved, but most Americans don't get that). But I don't understand why people complain about 'anti-English sentiment' or 'anti-British sentiment' because quite frankly I've never seen it. Also, the English can be pretty arrogant about their football...I mean, they think it's SO much better than La Liga, Serie A, Bundesliga, etc. when there really isn't that much separating the big 4 if you look at the leagues as a whole. A lot of them are overconfident about the NT too, not as much before this tournament (I think failing to qualify for the Euro '08 was humbling) but often times before a big tournament everyone goes crazy about how England is the most talented team in it and then they crash out and the media attacks the players and the coach for choking. Well maybe the team just isn't as good as everyone makes it out to be.

Also, I think Europe in general can be sort of snooty about a lot of things and sort of look down on non-Europeans, and it's something I've sort of experienced with English travelers in particular. The French can be really snooty too (haven't been there but I've heard many stories). I mean I get it, Americans can very pretty stupid and provincial, but Europeans can be really condescending about it. But I'm way off topic again.

 

[Joel`]

Not sure about Britain but in America "supply side economics" is another name for 'trickle-down theory.' Maybe it means a different term there. It is true that in places like the US and Britain, fiscal policy isn't publicly considered a tool of management, but people in government know the effects it has on the economy and act accordingly. Which is why Brown and Bush went on spending sprees.

Supply side policies here are those that aim to expand the productive capacity of the economy (LRAS curve), education, subsidies, taxation cuts etc.

Hmm, well, in America, econ textbooks are almost nothing but math, and in econ classes all of your assignments are problem sets and the tests are entirely mathematically based...you wouldn't ever write an essay, for example.

I wish my economics lessons had Maths, I should totally go study over there! Our exams are made up of a data analysis question (showing two trends in data and comparing), an analysis question (E.G. Explain the effects of inflation on an economy) and a data response essay question, much like the one I posted earlier. It's all essays, no maths and no models.

I wouldn't disagree with that, although if unemployment happened to be high not because of structural issues but because of a general recession, than I would increase government spending to increase consumption and push the economy forward.

So you identify that we have cyclical unemployment and take the correct policy of increasing demand.

So we're discussing the fundamental ideals of each system but can't talk about each system in its pure form? Seems to be a contradiction. We both agree that a mix is needed. We both agree that markets 'work' to a certain extent. We both believe that the state should have a role in planning and managing the economy, that high employment should be pursued, that equality is a good goal in some sense (depends on how much equality you want, but I think you would agree that how Britain looks better today in terms of equality than it was in the 1800's, which is a good thing), that taking care of a populace's social and physical needs is important. So we're both socialists and we're both capitalists. The problem I've had is throughout the discussion you say things like "well Sweden has markets, so that means capitalism is better than socialism." One could also say "Sweden has a huge state, extremely high taxes, as well as a number of qualities that would make many consider it a socialist country, and is better off than more capitalist leaning countries, so that proves socialism is better than capitalism."

And then I could say that Sweden reduced tax, privatised their public industries, deregulated as they saw the extra profit that would be made that way.

And as I've said, Sweden is still a socialist economy that utilizes markets. As stated earlier we both agree that a mix is necessary. If we're arguing about the fundamental "ideals," well I voted for socialism because I think its ideals are better. I think equality is certainly a better ideal than productivity. Will pure communism without markets work? I don't think it will be very efficient. Will pure capitalism work? I think it will be productive (sometimes too much so, sometimes not enough so) but inherently very unstable and highly unequal. Neither would be successful, but considering communism is supposed to be a utopian society, I certainly think that its ideals are better than capitalism.

But human's aren't equal, some are smarter, more athletic, more ambitious, motivated, **** even more good looking. Why should we all be equal, when we're clearly not. For instance, entrepreneurs such as Richard Branson, Alan Sugar. Scientists such as Stephen Hawking. They've devoted their lives to what they do, worked incredibly hard to achieve what they have, and in turn have reaped the rewards for their work ethic. Why should someone who floats through life with little ambition to work and get educated be afforded the same riches as those who worked their *** off for what they get?

I really don't think I've said anything at all in this thread about the history of the USSR that's the least bit controversial or even incorrect. I don't think any decent Soviet historian would make any serious disagreements with what I said: not that I'm super smart or right or anything, just everything I said was fairly obvious, generic, and not really opinionated, and pretty much in agreement with mainstream scholarship (unless you call the cold warrior scholars mainstream). Was it different from popular discourse or maybe what you or I have heard growing up? Certainly. But that has to do with the inaccuracy of popular discourse.

It was essentially that Russia sucks and was a failed attempt at communism. We generally look at the oppression of China in the past now, I've studied very little on Russia, it wasn't on the syllabus for any of my history or econ lessons.

Practically speaking, a pure version of neither works very well, and you need a combination of both. But in terms of ideals? I prefer equality to productivity, in fact, so much so, that I would support an "inefficient" (of course it depends on how you define efficiency) healthcare system, for example, if it took care of everyone. Or an "inefficient" subway system that provides cheap transportation for the whole populace, meaning they don't have to go out and buy cars that pollute the air. So I voted for socialism in the poll.

And I think that we have an inefficient system that isn't working as intended. A privatised system like other country's have (Not America) still take care of everybody, with far greater efficiency, with better health quality and shorter waiting times. Why are we paying more out on our NHS, when money is tight enough already, to receive less of a benefit than paying less? It's illogical.

You stated what you believed without answering my question. If markets fail and are inherently unstable, why should the government "play as small a role as possible?" If markets are prone to instability, the smaller the role the government plays, the more volatile they are likely to be. If the state should play as small a role as possible, it means that markets are inherently self-equilibriating and self-regulating and that the state should get out of the way in order to not interfere with this process.

Not all markets fail, the government generally intervenes to provide merit and public goods, i.e. street lights, since the market will under-provide them. It doesn't mean because that market fails, all of them do, government's job is to step in to correct failure when it does occur. It doesn't happen with every market, the government should generally sit back and only intervene when absolutely necessary. Hence, the state should play as small a role as possible

First of all, the idea that the state should only play as small a role as possible and only to correct failure sounds like you're calling for an extremely small state that does very little...sounds close to pure capitalism. You even said that the US is too capitalistic, and in the US (as well as in any country of the world) the state does much more than only step in to correct failure. At the very least you believe in public schools right?

We provide merit goods, tax demerit goods to prevent over-consumption, prevent monopoly company's taking over. Which are all market failures in their own right. You're hung up on the small a role as possible. It isn't a defined limit, technically the smallest role possible could be 99% intervention. And of course I believe in public schools.

Third, the logic that "the state should play as small a role as possible, as in only step in to correct failures, and their intervention stops there" has been prevalent in the US for the last few decades, and that is what caused the crisis. The logic has been that "markets know best" was used in deregulating our financial system, which enabled the crisis. So it's an axiom that I profoundly disagree with. We tried getting the state to play as small a role as possible, and it led to giant unsustainable asset booms that are crashing and taking the real economy down with them.

And when the state played a big part in our mining industry and got trampled on by the trade unions, it crashed that industry.

No disagreement there. Americans are pretty **** arrogant about everything that is our own. When it comes to our free market ideals though, one of the reasons we are so arrogant about our system is that we worship it with a religious fervor...big bad government is about as evil as anything in the world for a lot of Americans, and these Americans tend to be very religious. Usually evangelicals. I'm not sure exactly why, but I have a few hunches. Socially conservative Americans (many of whom tend to reside in the South) tend to dislike blacks (they would never admit it, but they do), and they all really don't like immigrants from Mexico. The state re-distributes wealth by taxing wealthy people (pretty much exclusively white) and giving it to these people.

Religion shouldn't play a role in politics like I said, I dislike religion anyway. I remember seeing an American rally on TV when McCain lost, and they were all angry for the fact McCain will praise the Lord Jesus and Obama didn't therefore McCain should win. That's the logic to elect a president on..

Also, the state is atheist. It is secular. Conservatives in American insist that we are a Christian nation founded on Christian ideals, and though they don't like to admit it they are aware of how secular the state is. They know that there can't be school-sponsored prayers (Supreme Court decision in the 90's), that they can't have a huge tablet of the ten commandments in a public courthouse (this type of thing has happened a few times recently), that abortion is legal (Supreme Court decision in 73), etc. They also know that the discipline of sociology has a lot of influence in the government (things like social work, criminology, prison corrective stuff) and so does psychology, which are both very atheist disciplines (founded on the ideas of Marx and Freud, respectively, two big time atheists of Jewish decent). Because of this atheism, they want the state to be as small as possible and to play as small as possible a role in our lives, especially if it's the federal government (Southern history, and is less likely to be influenced by Christian politics than local and state governments). Unless, of course, it is enforcing some Christian ideal, then they want the state (federal government) to play a big active role in our lives and telling the state governments what to do. Or immigration. They'd love the government to build a huge expensive fence on the border with Mexico. Or the military. They want to spend even more on the military so we can shove a boot up the ***** of the towelheads.

Anyone running for president will constantly use the line "Praise God" or something too, playing on the fact they know they won't get elected being atheist.

As far as the Brits go, they aren't nearly as bad about being arrogant about their culture/government/whatever but they do cling to the idea of getting to have an empire (why they joined the War in Iraq, IMO). Also, along with Americans they are somehow paranoid about the world being against them. Though in the Americans' case it's understandable, because a lot of people in the world do hate us, and anti-American sentiment is common and real (and usually deserved, but most Americans don't get that). But I don't understand why people complain about 'anti-English sentiment' or 'anti-British sentiment' because quite frankly I've never seen it. Also, the English can be pretty arrogant about their football...I mean, they think it's SO much better than La Liga, Serie A, Bundesliga, etc. when there really isn't that much separating the big 4 if you look at the leagues as a whole. A lot of them are overconfident about the NT too, not as much before this tournament (I think failing to qualify for the Euro '08 was humbling) but often times before a big tournament everyone goes crazy about how England is the most talented team in it and then they crash out and the media attacks the players and the coach for choking. Well maybe the team just isn't as good as everyone makes it out to be.

I wouldn't say we're hung up on an empire, I think a lot of people can be quite embarrassed about what we did in history. And the majority are against the Iraq war tbh. Also on the football team, I blame the media for that. They big the team up so much before a tournament, heaping pressure on the side, and then viciously attack them for a poor performance.

Also, I think Europe in general can be sort of snooty about a lot of things and sort of look down on non-Europeans, and it's something I've sort of experienced with English travelers in particular. The French can be really snooty too (haven't been there but I've heard many stories). I mean I get it, Americans can very pretty stupid and provincial, but Europeans can be really condescending about it. But I'm way off topic again.

Ahh, the cheese eating surrender monkeys. The only nation to build tanks with one forward gear and 8 reverse gears.

 

[curtis290]

Supply side policies here are those that aim to expand the productive capacity of the economy (LRAS curve), education, subsidies, taxation cuts etc.

I would agree that in the discourse, they justify the programs/spending on these programs' objectives. But the leaders do know the effects government spending has on AD and act accordingly. That's why Brown and Bush went on spending sprees: they wanted to increase consumption to prevent signs of a recession from showing.

I wish my economics lessons had Maths, I should totally go study over there! Our exams are made up of a data analysis question (showing two trends in data and comparing), an analysis question (E.G. Explain the effects of inflation on an economy) and a data response essay question, much like the one I posted earlier. It's all essays, no maths and no models.

I really wish our classes were like yours...I would love to write essays and do theoretical stuff. That's how political economy classes are here, which I really enjoy. If you like math you would like our courses here. But I think the mathematization of economics over the past 30 years is one of the big problems of the discipline...too many economists going around with models they think are infallible when they don't work out that way in real life. I think the trend exists because economists want to think of themselves as scientists, and the more mathematized the discipline is, the more objective it seems. The more it seems like a hard science, the more we have to listen to economists, who claim to be the priests of a special knowledge that only they understand, and the less we have to listen to the public/politicians/political scientists/historians/sociologist/etc.

But the reality is that economics is not a hard science, not anywhere close. Ultimately there are too many factors within a nation's economy, the global economy, as well completely non-economic factors (weather, states, people, etc.) to really accurately measure or predict things as well as economists say they can. More often than not, they're simply wrong, and of course they all say different things. But since the discipline is mathematized, they claim that we have to listen to them.

So you identify that we have cyclical unemployment and take the correct policy of increasing demand.

Well right now I don't think the unemployment problems in Britain or the US are cyclical, they are the impacts of a global economic crisis, so deficit spending is a necessary band-aid, but one that only helps a little bit in the short-term and doesn't address any of the structural issues. Britain already did it so much that its deficit is extremely high, so they can't do it anymore. It's pretty much the same in the US (although unfortunately, our deficit spending in the 00's was on the Iraq war). Like I said, the future is bleak for both of our countries.

And then I could say that Sweden reduced tax, privatised their public industries, deregulated as they saw the extra profit that would be made that way.

As we've both agreed, a mix exists in the OECD countries, and that's the best system. But the fact that arguably the best countries in the world to live in are the ones closest to socialism in the 1st world shows how good the inherent qualities of socialism are, which is what the debate was about, and why I voted socialist in the poll.

But human's aren't equal, some are smarter, more athletic, more ambitious, motivated, **** even more good looking. Why should we all be equal, when we're clearly not. For instance, entrepreneurs such as Richard Branson, Alan Sugar. Scientists such as Stephen Hawking. They've devoted their lives to what they do, worked incredibly hard to achieve what they have, and in turn have reaped the rewards for their work ethic. Why should someone who floats through life with little ambition to work and get educated be afforded the same riches as those who worked their *** off for what they get?

In a socialist system, the humans that are smarter will be engineers, doctors, physicists, etc., the ones that are dumber will be factory workers. The humans that are smarter will be glad that they use their brains at their jobs. The good looking humans will get the girls. The ambitious/motivated ones will work their way up in politics. They will climb their way up the job ladder and be put in charge of more people. They will enjoy the higher status that they have in society. The people that work harder and do better at their jobs can receive bonuses or rewards. Scientists like Stephen Hawking don't do it for the profit, that's been my point all along. No way he does what he does for money...why didn't he go into iBanking then? He does it because he loves physics and wants to discover great things and make a name for himself in history.

The Soviet scientists were the same. Look at where Russia was in 1945. Less than 30 years ago they had a revolution that tried to re-build the fabric of the society and economy, and this revolution happened in an agrarian backwater that had been devastated by WW1 and lost a lot of the little industry it had. Then they were torn apart by Civil War. Then the country was virtually destroyed in World War II. But they emerged out of the rubble in 1945 and within a couple of years had nuclear ICBM's. Twelve years after the war they were the first to put something in space, and four years after that, they put a man in space. The US was in a state of panic at the time.

It was essentially that Russia sucks and was a failed attempt at communism. We generally look at the oppression of China in the past now, I've studied very little on Russia, it wasn't on the syllabus for any of my history or econ lessons.

Well that's what I'm saying. The popular discourse is that it's a failure, but I don't think prudent historians would make such a generalization. First of all, what is a "failure" and what is a "success." They are really loaded terms, and most historians wouldn't classify a long period of history as a success or a failure. If we are going to though, it lasted over 70 years, and it's hard to classify something that lasted that long as a failure. Second, considering where it was when the Revolution occurred in 1917 (an agrarian backwater barely out of feudalism that had been devastated by World War I) and what it went through in the civil war and World War II, I really don't think you can classify it as a failure. The growth it went through from 1945 until the mid 1960's was nothing short of a modern miracle, and that's why the US was scared shitless of it during this time period.

And I think that we have an inefficient system that isn't working as intended. A privatised system like other country's have (Not America) still take care of everybody, with far greater efficiency, with better health quality and shorter waiting times. Why are we paying more out on our NHS, when money is tight enough already, to receive less of a benefit than paying less? It's illogical.

I'm not familiar with the NHS but what if privatizing it simply makes it look more like America's system? Maybe there is another solution, or maybe even more state control is the solution. Point is, even if the NHS sucks, it's better than America's, and it's more socialist. Another reason I voted socialist.

Not all markets fail, the government generally intervenes to provide merit and public goods, i.e. street lights, since the market will under-provide them. It doesn't mean because that market fails, all of them do, government's job is to step in to correct failure when it does occur. It doesn't happen with every market, the government should generally sit back and only intervene when absolutely necessary. Hence, the state should play as small a role as possible

But clearly the government does more than just provide merit and public goods, it regulates the economy, tries to steer it towards growth in certain sectors, tries to temper the business cycle, among many things. But if the government should play as small a role as possible, you're asking for major deregulation, privatization, etc. The government plays a smaller role in the US than it does in Britain. And a smaller role in Mexico than it does in the US. If you think the government should play as small of a role as possible, you prefer Mexico to the US, and the US to Britain. Most people do buy your logic: that the government should play as small of a role as possible. But this is what led us to the crisis. We heard this same line from economists over and over and over again: get the big bad government out of the way! That because markets know best, the state should play as small of a role as possible. They said that the boom of the 90's and 00's was because we had done this, because we had done the right thing in moving towards deregulation and a more market oriented economy. Well, none of that growth was sustainable, and look where we are now. Markets clearly don't know best, and when you have the state play as small of a role as possible, you leave yourself prone to crisis.

We provide merit goods, tax demerit goods to prevent over-consumption, prevent monopoly company's taking over. Which are all market failures in their own right. You're hung up on the small a role as possible. It isn't a defined limit, technically the smallest role possible could be 99% intervention. And of course I believe in public schools.

I am hung up on the small a role as possible. Because this is what economists/the general public said over and over again. With every issue, the answer was deregulate, privatize, cut taxes, cut tariffs, get the government out of the way. The government should play as small a role as possible because markets know best. The logic of "the smallest role possible" is what caused the crisis.

And when the state played a big part in our mining industry and got trampled on by the trade unions, it crashed that industry.

Well it sounds like the unions and not the state crashed the industry. Even if it was the state, one example doesn't make or break the role of the state. I could also list plenty of examples of when the state should have played a larger role but didn't. I could list plenty of instances where privatization occurred and it ruined an industry. I could list examples in mining where state-run companies did wonders for the country (Chile). Anyway, in the case of Britain, the reason mining crashed was from global competition. Countries such as Chile, Brazil, China, etc. have access to higher grades of metal and have lower labor costs since they're poor countries.

Religion shouldn't play a role in politics like I said, I dislike religion anyway. I remember seeing an American rally on TV when McCain lost, and they were all angry for the fact McCain will praise the Lord Jesus and Obama didn't therefore McCain should win. That's the logic to elect a president on..

Yep. America is a fiercely Protestant country, and there's a reason that even though we have lots of Catholics, we've only had one Catholic president in our history. Even though this was in the 1960's, the entire South was scared shitless about him because they thought he was taking orders from the Vatican. As far as having to "praise the Lord Jesus" to get votes, that is thanks to Bush. He was the first president to constantly talk about his faith and how it influenced his politics. The evangelicals loved him for it, and it created a precedent in American politics. Nowadays you have to constantly talk about your faith if you want to get elected, and even Obama had to talk about it. Obama though is not very religious, which is one of the many reasons why socially conservative Americans hate him.

We are sort of in the middle of one of our "Great Awakenings"...American history is marked by periods of religious revival and fervour, and we've had one since the late 70's (many, including myself, believe it was a direct reaction to the 60's), which comes in the form of contempory, non-denominational, evangelical American Christianity. It is still going strong, and today, over one in four Americans consider themselves "born again christians." They mobilized politically for the first time to defeat Carter (an evangelical) and put Reagan into power (who didn't even like the evangelicals and wouldn't be seen with them)...why? Because American social conservatives care more about having a strong foreign policy and cutting back on the role of the state in the economy than they do about the faith of the person in charge. An evangelical left-leaning Democrat would get killed in elections by a Catholic economic conservative who didn't care about social issues and never went to Church. It's one of the reasons why I can't stand American social conservatives, they are such hypocrites.

Anyone running for president will constantly use the line "Praise God" or something too, playing on the fact they know they won't get elected being atheist.

America will never have an atheist president in our lifetime. You can quote me on that.

I wouldn't say we're hung up on an empire, I think a lot of people can be quite embarrassed about what we did in history. And the majority are against the Iraq war tbh. Also on the football team, I blame the media for that. They big the team up so much before a tournament, heaping pressure on the side, and then viciously attack them for a poor performance.

Yeah I know the majority were against the war, but for the few that supported it, I think that was the reason. And that included the Blair administration. It doesn't suprise me, because the politicians are going to be the ones that are the most power-hungry, the most reminiscent of the British empire.

Ahh, the cheese eating surrender monkeys. The only nation to build tanks with one forward gear and 8 reverse gears.

They can't even go to a World Cup without surrending.

 

[Joel`]

I would agree that in the discourse, they justify the programs/spending on these programs' objectives. But the leaders do know the effects government spending has on AD and act accordingly. That's why Brown and Bush went on spending sprees: they wanted to increase consumption to prevent signs of a recession from showing.

Of course they know its effect on AD, I'm just saying we use fiscal policy as a supply side policy first, the AD increase is a mere consequence.

I really wish our classes were like yours...I would love to write essays and do theoretical stuff. That's how political economy classes are here, which I really enjoy. If you like math you would like our courses here. But I think the mathematization of economics over the past 30 years is one of the big problems of the discipline...too many economists going around with models they think are infallible when they don't work out that way in real life. I think the trend exists because economists want to think of themselves as scientists, and the more mathematized the discipline is, the more objective it seems. The more it seems like a hard science, the more we have to listen to economists, who claim to be the priests of a special knowledge that only they understand, and the less we have to listen to the public/politicians/political scientists/historians/sociologist/etc.

It's a social science and that's all it ever will be. I don't see how Maths makes them seem smarter or even make it harder. Neuroscience doesn't involve Maths, still one of the hardest subjects there is.

Well right now I don't think the unemployment problems in Britain or the US are cyclical, they are the impacts of a global economic crisis, so deficit spending is a necessary band-aid, but one that only helps a little bit in the short-term and doesn't address any of the structural issues. Britain already did it so much that its deficit is extremely high, so they can't do it anymore. It's pretty much the same in the US (although unfortunately, our deficit spending in the 00's was on the Iraq war). Like I said, the future is bleak for both of our countries.

Agreed, the pointless fiscal spending to create employment was pointless and artificial in my opinion. They were un-needed jobs and a drain on our already tight resources, the public sector is never going to add value to the economy, it's the private sector that needs to grow right now.

As we've both agreed, a mix exists in the OECD countries, and that's the best system. But the fact that arguably the best countries in the world to live in are the ones closest to socialism in the 1st world shows how good the inherent qualities of socialism are, which is what the debate was about, and why I voted socialist in the poll.

But none of those socialist states would exist if there wasn't a capitalistic driving force, and those country's are starting to become more capitalist as they realise the productive values, such as Sweden deregulating, lowering taxes and privatising in the '90's.

In a socialist system, the humans that are smarter will be engineers, doctors, physicists, etc., the ones that are dumber will be factory workers. The humans that are smarter will be glad that they use their brains at their jobs. The good looking humans will get the girls. The ambitious/motivated ones will work their way up in politics. They will climb their way up the job ladder and be put in charge of more people. They will enjoy the higher status that they have in society. The people that work harder and do better at their jobs can receive bonuses or rewards. Scientists like Stephen Hawking don't do it for the profit, that's been my point all along. No way he does what he does for money...why didn't he go into iBanking then? He does it because he loves physics and wants to discover great things and make a name for himself in history.

I disagree. Yes, Hawking does it for the love of Physics. They're exceptions, not the rule. Especially in today's age. Are the majority really going to stay in through education into their 20's, when they can leave at 16 and be free, and not lose anything? Are you really going to try hard in school if it has no benefit on your life and career afterwards? Are you really going to spend a large amount of your time growing a business if you're not going to be rewarded for it? Or will you do the bare minimum? I think you'll do the bare minimum. I mean sure, it'd be great if people did things just for some status, but realistically, no.

The Soviet scientists were the same. Look at where Russia was in 1945. Less than 30 years ago they had a revolution that tried to re-build the fabric of the society and economy, and this revolution happened in an agrarian backwater that had been devastated by WW1 and lost a lot of the little industry it had. Then they were torn apart by Civil War. Then the country was virtually destroyed in World War II. But they emerged out of the rubble in 1945 and within a couple of years had nuclear ICBM's. Twelve years after the war they were the first to put something in space, and four years after that, they put a man in space. The US was in a state of panic at the time.

Was that not driven by a competition, bragging rights over America? Surely the government was pumping a ton of cash in for the sake of beating America? Leads me onto another point, competition breeds productivity, if everything is equal, there's again no incentive for business to compete with others.

I'm not familiar with the NHS but what if privatizing it simply makes it look more like America's system? Maybe there is another solution, or maybe even more state control is the solution. Point is, even if the NHS sucks, it's better than America's, and it's more socialist. Another reason I voted socialist.

I'd have to have faith in the government implementing it right and not like America, and I think they would considering how well known it is that your healthcare is far from great.

But clearly the government does more than just provide merit and public goods, it regulates the economy, tries to steer it towards growth in certain sectors, tries to temper the business cycle, among many things. But if the government should play as small a role as possible, you're asking for major deregulation, privatization, etc. The government plays a smaller role in the US than it does in Britain. And a smaller role in Mexico than it does in the US. If you think the government should play as small of a role as possible, you prefer Mexico to the US, and the US to Britain. Most people do buy your logic: that the government should play as small of a role as possible. But this is what led us to the crisis. We heard this same line from economists over and over and over again: get the big bad government out of the way! That because markets know best, the state should play as small of a role as possible. They said that the boom of the 90's and 00's was because we had done this, because we had done the right thing in moving towards deregulation and a more market oriented economy. Well, none of that growth was sustainable, and look where we are now. Markets clearly don't know best, and when you have the state play as small of a role as possible, you leave yourself prone to crisis.

Again, you're hung up on the fact I said small state and ignoring "as small as possible" as in as small to the point where the system is still working. I don't know if you use the term, but we call it government failure when they fail to intervene or intervene wrongly to correct a market failure. I consider the Mexican and US government failures. We also have - or supposed to - target sustainable growth, where fiscal policy expands when we're beneath our trend rate of growth, and fiscal policy is cut when we are above our trend rate, thus letting the business cycle to operate properly, and reduce the effect of any recession. This clearly didn't happen, Brown broke his own fiscal rules in the quest for higher growth, and it all collapsed on him. Which is why we have now created an independent fiscal policy group to avoid political reasons influencing poor economic decisions.

I am hung up on the small a role as possible. Because this is what economists/the general public said over and over again. With every issue, the answer was deregulate, privatize, cut taxes, cut tariffs, get the government out of the way. The government should play as small a role as possible because markets know best. The logic of "the smallest role possible" is what caused the crisis.

Explained above what I mean by "as possible"

Well it sounds like the unions and not the state crashed the industry. Even if it was the state, one example doesn't make or break the role of the state. I could also list plenty of examples of when the state should have played a larger role but didn't. I could list plenty of instances where privatization occurred and it ruined an industry. I could list examples in mining where state-run companies did wonders for the country (Chile). Anyway, in the case of Britain, the reason mining crashed was from global competition. Countries such as Chile, Brazil, China, etc. have access to higher grades of metal and have lower labor costs since they're poor countries.

You used an example of markets failing causing the crisis due to lack of intervention, I countered with an example of too much state intervention.

Yep. America is a fiercely Protestant country, and there's a reason that even though we have lots of Catholics, we've only had one Catholic president in our history. Even though this was in the 1960's, the entire South was scared shitless about him because they thought he was taking orders from the Vatican. As far as having to "praise the Lord Jesus" to get votes, that is thanks to Bush. He was the first president to constantly talk about his faith and how it influenced his politics. The evangelicals loved him for it, and it created a precedent in American politics. Nowadays you have to constantly talk about your faith if you want to get elected, and even Obama had to talk about it. Obama though is not very religious, which is one of the many reasons why socially conservative Americans hate him.

Bill Maher made an excellent film, "Religulous" on religion in America. Some of his interviews with Christian's are hilarious, but also quite pathetic at the same time.

They can't even go to a World Cup without surrending.

Haha. XDXD

 

[Nixon]

In a socialist system, the humans that are smarter will be engineers, doctors, physicists, etc., the ones that are dumber will be factory workers. The humans that are smarter will be glad that they use their brains at their jobs. The good looking humans will get the girls. The ambitious/motivated ones will work their way up in politics. They will climb their way up the job ladder and be put in charge of more people. They will enjoy the higher status that they have in society. The people that work harder and do better at their jobs can receive bonuses or rewards. Scientists like Stephen Hawking don't do it for the profit, that's been my point all along. No way he does what he does for money...why didn't he go into iBanking then? He does it because he loves physics and wants to discover great things and make a name for himself in history.

Would the idea of incentives and rewards for performance not be more suited to the capitalist system? Giving rewards for performing better removes the idea of equality if people who are better can make more money and earn more rewards than those who don't.

 

[curtis290]

Of course they know its effect on AD, I'm just saying we use fiscal policy as a supply side policy first, the AD increase is a mere consequence.

Maybe, but I would say the AD increase is more than a mere consequence...I think it's an important reason for why they choose to spend or not spend.

It's a social science and that's all it ever will be. I don't see how Maths makes them seem smarter or even make it harder. Neuroscience doesn't involve Maths, still one of the hardest subjects there is.[/QUOTE]

Well it's not about seeming harder, it's about seeming more objective. If you write a book to prove your point, people will be like sure, we'll read your book, along with the history and poli sci books. But if you use math you can say "see, I objectively proved that my theory is correct! Now you have to listen to me, because the math says I'm right!" So this is one of the reasons the discipline headed in that direction. Economists then constantly criticize other social scientists/politicians/the public for not knowing the math. So when we disagree with them, it's not because we have a different opinion, it's because we're wrong. So we listened to the economists for the past few decades and look where it got us.

Agreed, the pointless fiscal spending to create employment was pointless and artificial in my opinion. They were un-needed jobs and a drain on our already tight resources, the public sector is never going to add value to the economy, it's the private sector that needs to grow right now.

Yeah, unfortunately I don't see much doing well in the private sector. Obviously finance is going to contract since it's based on unsustainable asset bubbles. Manufacturing won't do well because of the global crisis of overproduction and a lack of demand. Agriculture won't do well because of overproduction (in the US we pay our farmers not to grow crops), there's no increase in demand, and because in the developed countries agriculture is a small part of the economy. There's no good or service, no economic sector right now that has a good outlook. Sometimes people throw in the generic "technology," but that definitely won't do well either. It really doesn't take that much to produce these high tech goods, the overseas competition is strong and there are only more and more competitors all the time (nations like India are entering the market), and the technology sector also suffered from the same crisis of overproduction...in the mid 90's, it grew like crazy from too much easy credit and making too much in stocks. That bubble already burst in the 00's. So yeah, I'm pessimistic about the future.

But none of those socialist states would exist if there wasn't a capitalistic driving force, and those country's are starting to become more capitalist as they realise the productive values, such as Sweden deregulating, lowering taxes and privatising in the '90's.

And none of those capitalist countries would be good places to live if there wasn't extremely extensive wealth redistribution and a huge state that provided extensive social services and regulated the economy.

I disagree. Yes, Hawking does it for the love of Physics. They're exceptions, not the rule. Especially in today's age. Are the majority really going to stay in through education into their 20's, when they can leave at 16 and be free, and not lose anything? Are you really going to try hard in school if it has no benefit on your life and career afterwards? Are you really going to spend a large amount of your time growing a business if you're not going to be rewarded for it? Or will you do the bare minimum? I think you'll do the bare minimum. I mean sure, it'd be great if people did things just for some status, but realistically, no.

Few of the great thinkers in history were in it for profit. If we look at all of the philosophers, scientists, etc. these were never the wealthiest people in society, and they usually didn't make all that much from their ideas. If they wanted to be bankers they could have. Of course they are the exception because they are one of the small number of brilliant minds. Brilliant minds are passionate about what they do and aren't in it for the money. Scientists make a decent living, but they don't make as much as bankers or businessmen. They chose science though because that's what their passionate.

Even the inventors are like this. The greatest inventor of this era, Thomas Edison, was not in it for the money. He was a really curious person from a young age and inventing new things was his passion. The most important invention of the 20th century, the airplane, was certainly not invented for commercial reasons. They did it because they wanted to fly. Sure there are plenty of examples of inventions that were made for profit, but the greatest thinkers and inventors usually did it from curiosity, passion, and sometimes, the desire to make a name for themselves in history. Philosophy, science, math, invention, these things are part of the human condition and were around long before capitalism and will be around for much longer (unless capitalism wipes out the human race, of course )

You ask if the majority will stay in school until their 20's, and the ones that need to will. About half our population in the US goes to college. The vast majority of them go just to party though. In a socialist system, the brilliant people, the Einstein's, Hawkings, etc. will go to college because they are thinkers and they love it, just as in a capitalist system. Many people are smart and would prefer to be an engineer, physicist, or professor to being a farmer. They will go to school. The rest? They will have some schooling (the extent would be determined by the society), because school would be free in such a system, and after that they will go into whatever profession they choose.

Most people do the bare minimum today, at least in America. They do ****** in schools and then get ****** jobs that they try just hard enough not to get fired from. Many people would be like this is a socialist system. But many people wouldn't. Remember, in this scenario, there was a popular revolution that created a socialist government. If there was popular support for socialism, people would believe in what they are doing. But just as in a capitalist system, if you don't work, you will be punished. They can demote you, take away your goods/currency, or throw you in jail.

Was that not driven by a competition, bragging rights over America? Surely the government was pumping a ton of cash in for the sake of beating America? Leads me onto another point, competition breeds productivity, if everything is equal, there's again no incentive for business to compete with others.

Part of it was competition, part of it was 'building socialism,' part of it was wanting to leave your mark in history. That's what scientists want to do. But you're getting off topic here. The reason I brought up the space race was simply to counter the claim that the USSR was a failure. I was simply bringing up the point that considering where they were in 1945, their victories in the space race were nothing short of a modern miracle. As far as competition goes, you can still have competition in a socialist system if you want it, you can compete with other countries, you can have different plants competiting with each other, different cities competing with each other.

I'd have to have faith in the government implementing it right and not like America, and I think they would considering how well known it is that your healthcare is far from great.

Well, maybe implementing it right is making it more state-run, or maybe it's reforming the way it's run now rather than changing it. Maybe it's privatizing it more. Or maybe privatizing it more will only make it worse. Who knows, it's hypothetical. But I forgot what we were even arguing about with the NHS to begin with...I think my original point was simply the fact that countries with more state-control in their health care systems are better off than us, which is one reason why I voted socialist in the poll.

Again, you're hung up on the fact I said small state and ignoring "as small as possible" as in as small to the point where the system is still working. I don't know if you use the term, but we call it government failure when they fail to intervene or intervene wrongly to correct a market failure. I consider the Mexican and US government failures. We also have - or supposed to - target sustainable growth, where fiscal policy expands when we're beneath our trend rate of growth, and fiscal policy is cut when we are above our trend rate, thus letting the business cycle to operate properly, and reduce the effect of any recession. This clearly didn't happen, Brown broke his own fiscal rules in the quest for higher growth, and it all collapsed on him. Which is why we have now created an independent fiscal policy group to avoid political reasons influencing poor economic decisions.


Explained above what I mean by "as possible"

And as I said before I am hung up on it. You say "small as possible" as in as small to the point where the system is still working. That's what economists said. The logic has been that because the state should be as "small as possible," we should always cut back on the size of the state or get rid of its involvement. This was seen as the solution to virtually every economic problem. An axiom such as "the state should be as small as possible as long as the system keeps running," is a dangerous line of logic. It's the logic used by economists and the mainstream American public in the deregulation/private sector craze of the 80's through the 00's. For a while it seemed like it was working, and whenever there were gains, people said "see, this is what you do when you get rid of the government, so let's do it some more!" Well, it ultimately screwed us over in the long run.

Now you can say that it should only be as small as possible "to the point where the system is still working," but "working" is quite ambiguous...where do you draw the line? How do you define what is working and not working? More importantly, it might seem that cutting out state involvement is making the system work when the negative affects occur far in the future. Often times the result of privatization, deregulation, tariff slashing, tax cuts, etc. in the short term is growth. But often times it's unsustainable and will bring us a crisis in the long run, which is what we're dealing with right now.

You used an example of markets failing causing the crisis due to lack of intervention, I countered with an example of too much state intervention.

My example was used simply to prove the point that markets don't always know best and that the state shouldn't always play as small of a role as possible, because that's been the underlying logic behind the past few decades. And it resulted in a global depression. We were told that we should deregulate finance because the markets knew best. But as it turns out, they didn't. Your example was irrelevant, because obviously there will be instances of too much state intervention, and it was also miniscule in comparison. The global financial crisis is a bigger deal than one industry being hurt in Britain back in the 70's (which we already agreed was due to global competition more than anything).

Bill Maher made an excellent film, "Religulous" on religion in America. Some of his interviews with Christian's are hilarious, but also quite pathetic at the same time.

Saw it, it was really funny. You HAVE to see the movie Jesus Camp. Absolutely have to. It's not a comedy, it's a documentary, and a very good one. Maybe one of the best I've seen on American culture. Rent it next chance you get. Or download it online.

Would the idea of incentives and rewards for performance not be more suited to the capitalist system? Giving rewards for performing better removes the idea of equality if people who are better can make more money and earn more rewards than those who don't.

For a variety of reasons. Socialism guarantees full employment, basic needs, social services, etc. to everyone. It is also less prone to crisis than capitalism. It also creates equality and gets rid of social ills such as crime. Giving rewards for performances doesn't eliminate the idea of equality if your base salary is still the same. But there are a variety of ways to give rewards anyway, and it certainly isn't incompatible with socialism.

 

[Joel`]

Maybe, but I would say the AD increase is more than a mere consequence...I think it's an important reason for why they choose to spend or not spend.

The AD increase is definitely just a consequence, at least following economic policy correctly. Brown had political motives of being re-elected and spending helped him achieve this. He lied to the public about ending boom-bust. He was either extremely stupid and economically naive, or he chose to ignore economic consequences in order to gain political power.

Well it's not about seeming harder, it's about seeming more objective. If you write a book to prove your point, people will be like sure, we'll read your book, along with the history and poli sci books. But if you use math you can say "see, I objectively proved that my theory is correct! Now you have to listen to me, because the math says I'm right!" So this is one of the reasons the discipline headed in that direction. Economists then constantly criticize other social scientists/politicians/the public for not knowing the math. So when we disagree with them, it's not because we have a different opinion, it's because we're wrong. So we listened to the economists for the past few decades and look where it got us.

There's a whole other branch of Economics called Econometrics that deals with mathematical models to prove things. Economics should be open to debate, there is no necessarily right answer. Like I said, in the UK we're marked in exams on our ability to form and evaluate economic opinions. There's not necessarily a right answer to the essay's, if you can make strong points and back it up with economic knowledge you'll do well. If you walked in and said I'm right, this model shows it. You'd fail.

And none of those capitalist countries would be good places to live if there wasn't extremely extensive wealth redistribution and a huge state that provided extensive social services and regulated the economy.

So capitalism needs socialism and socialism needs capitalism? But really, capitalism is the driving force behind both of those. Capitalism builds the foundations and you add socialistic aspects to it to correct things. I don't see an economy built on socialism foundations and then simply fixing the flaws with it simply, which is why I voted capitalism.

Few of the great thinkers in history were in it for profit. If we look at all of the philosophers, scientists, etc. these were never the wealthiest people in society, and they usually didn't make all that much from their ideas. If they wanted to be bankers they could have. Of course they are the exception because they are one of the small number of brilliant minds. Brilliant minds are passionate about what they do and aren't in it for the money. Scientists make a decent living, but they don't make as much as bankers or businessmen. They chose science though because that's what their passionate.

Even the inventors are like this. The greatest inventor of this era, Thomas Edison, was not in it for the money. He was a really curious person from a young age and inventing new things was his passion. The most important invention of the 20th century, the airplane, was certainly not invented for commercial reasons. They did it because they wanted to fly. Sure there are plenty of examples of inventions that were made for profit, but the greatest thinkers and inventors usually did it from curiosity, passion, and sometimes, the desire to make a name for themselves in history. Philosophy, science, math, invention, these things are part of the human condition and were around long before capitalism and will be around for much longer (unless capitalism wipes out the human race, of course )

You ask if the majority will stay in school until their 20's, and the ones that need to will. About half our population in the US goes to college. The vast majority of them go just to party though. In a socialist system, the brilliant people, the Einstein's, Hawkings, etc. will go to college because they are thinkers and they love it, just as in a capitalist system. Many people are smart and would prefer to be an engineer, physicist, or professor to being a farmer. They will go to school. The rest? They will have some schooling (the extent would be determined by the society), because school would be free in such a system, and after that they will go into whatever profession they choose.

Thinkers do it to think yes. A business doesn't do it for the love of business, profit drives them. If you know you'll lose your profit, there's no incentive to produce more. Thinkers are giving the economy the product, but it's up to business to make and produce it. As they don't need to bother, productivity is very low. The economy's productive output falls rapidly.

Most people do the bare minimum today, at least in America. They do ****** in schools and then get ****** jobs that they try just hard enough not to get fired from. Many people would be like this is a socialist system. But many people wouldn't. Remember, in this scenario, there was a popular revolution that created a socialist government. If there was popular support for socialism, people would believe in what they are doing. But just as in a capitalist system, if you don't work, you will be punished. They can demote you, take away your goods/currency, or throw you in jail.

And then when you look over at the capitalistic riches of another country, and how you might be equal, but you're no better off, it hits you like a shovel and the popular movement stops. Why do you think N.Korea don't allow them to look past their own country? Their is an extremely popular movement for their leader, he's probably the most loved leader of any in the world domestically. If they were allowed to see the rest of the world, then the popular movement would cease immediately.

Well, maybe implementing it right is making it more state-run, or maybe it's reforming the way it's run now rather than changing it. Maybe it's privatizing it more. Or maybe privatizing it more will only make it worse. Who knows, it's hypothetical. But I forgot what we were even arguing about with the NHS to begin with...I think my original point was simply the fact that countries with more state-control in their health care systems are better off than us, which is one reason why I voted socialist in the poll.

But I prefer Germany's healthcare, which is why I voted capitalism. We are reforming it, massively. Removing the paperwork, getting rid of jobs we don't need so more goes into actual healthcare. The way it's run right now is a joke. The private system must make a profit to survive, inspiring better efficiency and productivity, because otherwise they fall out of business. The public system can fail to produce effectively and still survive. The public system is handed money, as they have it they spend it for the sake of spending it, even though it adds nothing to the system. If I gave you £100, you go out and spend on what you need to. You have £20 left, do you give it me back "oh, I only needed a fraction of what you gave me, here it is back". I sincerely doubt it, the vast, vast majority of people will spend it because they can.

And as I said before I am hung up on it. You say "small as possible" as in as small to the point where the system is still working. That's what economists said. The logic has been that because the state should be as "small as possible," we should always cut back on the size of the state or get rid of its involvement. This was seen as the solution to virtually every economic problem. An axiom such as "the state should be as small as possible as long as the system keeps running," is a dangerous line of logic. It's the logic used by economists and the mainstream American public in the deregulation/private sector craze of the 80's through the 00's. For a while it seemed like it was working, and whenever there were gains, people said "see, this is what you do when you get rid of the government, so let's do it some more!" Well, it ultimately screwed us over in the long run.

I think there's some fundamental differences in the way we've learnt Economics here. I've never been taught to use the words "will", "always". You always, always say that "this may happen", "this could happen". It's almost a cardinal sin to say things are a certainty.

In history we've always tried to get more and more, natural human greed. Recently we've discovered about sustainable growth and how that is what we aim for. We had rules and regulations set out to achieve it until Brown blew it all away with his infamous "I've ended boom-bust". I've always seen America as seeing itself as an economic juggernaut, and in the end producing until the point of collapse. Your economics over there probably needs to take a serious look at itself before you do over-produce to death.

Now you can say that it should only be as small as possible "to the point where the system is still working," but "working" is quite ambiguous...where do you draw the line? How do you define what is working and not working? More importantly, it might seem that cutting out state involvement is making the system work when the negative affects occur far in the future. Often times the result of privatization, deregulation, tariff slashing, tax cuts, etc. in the short term is growth. But often times it's unsustainable and will bring us a crisis in the long run, which is what we're dealing with right now.

Again, we're taught to examine long run effects, always aim for the sustainable option. The Tory government always advocated supply side policies to expand our economy without inflationary effects, even if it was long run growth, it was sustainable and would permit more growth in the future. It was Labour and their spending spree, spending money they didn't have, and made no effort to raise, that went hungry for the short run, unsustainable growth. And I strongly disagree with what they did.

My example was used simply to prove the point that markets don't always know best and that the state shouldn't always play as small of a role as possible, because that's been the underlying logic behind the past few decades. And it resulted in a global depression. We were told that we should deregulate finance because the markets knew best. But as it turns out, they didn't. Your example was irrelevant, because obviously there will be instances of too much state intervention, and it was also miniscule in comparison. The global financial crisis is a bigger deal than one industry being hurt in Britain back in the 70's (which we already agreed was due to global competition more than anything).

And my example was used to prove that the state doesn't always know best and that the markets should be left sometimes. Not sure how you can call it irrelevant when it's the exact reverse of what you did. It was not miniscule, it wasn't just one industry, it was THE industry. Unemployment had never been so high, we had raging inflation from years of just pumping up demand fiscally. The North of England still hasn't recovered from this "miniscule" event, over 20 years on. The global competition took the business because labour were granting 20% pay rises year upon year. Why would any firm stay in Britain and pay those wages?

Saw it, it was really funny. You HAVE to see the movie Jesus Camp. Absolutely have to. It's not a comedy, it's a documentary, and a very good one. Maybe one of the best I've seen on American culture. Rent it next chance you get. Or download it online.

Will do.

For a variety of reasons. Socialism guarantees full employment, basic needs, social services, etc. to everyone. It is also less prone to crisis than capitalism. It also creates equality and gets rid of social ills such as crime. Giving rewards for performances doesn't eliminate the idea of equality if your base salary is still the same. But there are a variety of ways to give rewards anyway, and it certainly isn't incompatible with socialism.

I disagree that it guarantees full employment, and that it's less prone to crisis. How do you create full employment from nowhere? If your firms don't want to produce more, if they have no incentive to produce more, they won't employ people. The government has to spend and subsidise to generate the employment. But where do they get the money from for this? They definitely aren't making enough from tax, they're creating employment that won't pay back with a taxable profit. You have to lend money, then you end up in a financial hole a la Portugal. I'd say that's a crisis.

How are rewards not unequal? Are banker's bonuses fair then? If there's the same basic wage, why wouldn't firms just turn to capitalistic ways by "rewarding" employee's making them richer for being better, and producing more. You can still offer the same basic wage, doesn't mean equality at all if bonuses are reigned in on top.

 

[curtis290]

The AD increase is definitely just a consequence, at least following economic policy correctly. Brown had political motives of being re-elected and spending helped him achieve this. He lied to the public about ending boom-bust. He was either extremely stupid and economically naive, or he chose to ignore economic consequences in order to gain political power.

I think he just wanted to get re-elected, and increasing consumption would make it seem like the economy was doing OK and prevent the crisis from rearing its head earlier.

There's a whole other branch of Economics called Econometrics that deals with mathematical models to prove things. Economics should be open to debate, there is no necessarily right answer. Like I said, in the UK we're marked in exams on our ability to form and evaluate economic opinions. There's not necessarily a right answer to the essay's, if you can make strong points and back it up with economic knowledge you'll do well. If you walked in and said I'm right, this model shows it. You'd fail.

Sounds like a good system. Too bad it's not like that in the US. To be fair, in America you are required to provide reasoning behind your models, but generally this "reasoning" is just explaining how they work.

So capitalism needs socialism and socialism needs capitalism? But really, capitalism is the driving force behind both of those. Capitalism builds the foundations and you add socialistic aspects to it to correct things. I don't see an economy built on socialism foundations and then simply fixing the flaws with it simply, which is why I voted capitalism.

But capitalism came first, and markets do exist, so of course you can say capitalism drives it. But just as capitalism drives it, socialism is what makes it worth living in.

Thinkers do it to think yes. A business doesn't do it for the love of business, profit drives them. If you know you'll lose your profit, there's no incentive to produce more. Thinkers are giving the economy the product, but it's up to business to make and produce it. As they don't need to bother, productivity is very low. The economy's productive output falls rapidly.

I will agree with this to a certain extent, but keep in mind that in a purely socialist system, the state can and does implement new technologies into production since the economy is centrally planned and not run by markets. Do they do so as efficiently as in a capitalist economy? Most of the time no, but it depends on how you define "efficiency," and how important you make it out to be.

And then when you look over at the capitalistic riches of another country, and how you might be equal, but you're no better off, it hits you like a shovel and the popular movement stops. Why do you think N.Korea don't allow them to look past their own country? Their is an extremely popular movement for their leader, he's probably the most loved leader of any in the world domestically. If they were allowed to see the rest of the world, then the popular movement would cease immediately.

I think this is the biggest problem with socialism. A command economy can't produce specific complex luxury goods as well as a capitalist economy. If people get the sense that what they have isn't as good as what it could be, they get restless. The grass is always greener on the other side. If they see that other countries have better luxury goods, they will grow restless. This is ultimately what happened to the USSR. The government was so convinced in the superiority of socialism that they promised the public better luxury goods than the west. They thought they could make better washing machines. Well, as it turns out, the washing machines weren't very good, and the people got fed up. But perhaps the problem wasn't with socialism, it was with the USSR. The state emphasized the importance of consumer goods and that they would be good at producing them, so they public in turn believed in luxury goods and wanted to have them. But if the populace didn't believe that consumer goods were important, than it wouldn't matter that the people in capitalist countries had super cool vacuum machines. How would this be done? Education, I guess, and the persistent teaching of the ideals of socialism (if there's a socialist revolution we'll assume the people believe in this stuff). You could call that brainwashing, but it wouldn't have to be, and anyways we're brainwashed by advertisements all of the time in our society.

But I prefer Germany's healthcare, which is why I voted capitalism. We are reforming it, massively. Removing the paperwork, getting rid of jobs we don't need so more goes into actual healthcare. The way it's run right now is a joke. The private system must make a profit to survive, inspiring better efficiency and productivity, because otherwise they fall out of business. The public system can fail to produce effectively and still survive. The public system is handed money, as they have it they spend it for the sake of spending it, even though it adds nothing to the system. If I gave you £100, you go out and spend on what you need to. You have £20 left, do you give it me back "oh, I only needed a fraction of what you gave me, here it is back". I sincerely doubt it, the vast, vast majority of people will spend it because they can.

I won't comment on the NHS anymore but the German system is a very unique one and I think would only work in their context. It is very much based on the employer providing healthcare, and this in turn has to do with the relationship between the German banks and firms, which is much, much different than what you see in Britain, so I don't know if it would be possible to transplant the Germany system here. Even the German system though is less privatized than what we see in America, which is why I voted socialism.

I think there's some fundamental differences in the way we've learnt Economics here. I've never been taught to use the words "will", "always". You always, always say that "this may happen", "this could happen". It's almost a cardinal sin to say things are a certainty.

From what it sounds like your econ classes are doing a good job. Maybe you've had really good teachers? In the US, at least, economics always operates in rules and laws. That freer trade improves an economy is a "law" in economics, for example. Or that minimum wage hurts an economy (in all our econ classes here we learn the math of how it hurts productivity and that the economy would be better without it, even though Keynes more or less "proved" this to be untrue, of course I hate to use the word 'proved' so I'll say reasoned very strongly). Economists will tell you these to be absolute truths because the math says so, but historical and real-world examples shows otherwise.

In history we've always tried to get more and more, natural human greed. Recently we've discovered about sustainable growth and how that is what we aim for. We had rules and regulations set out to achieve it until Brown blew it all away with his infamous "I've ended boom-bust". I've always seen America as seeing itself as an economic juggernaut, and in the end producing until the point of collapse. Your economics over there probably needs to take a serious look at itself before you do over-produce to death.

America like Britain moved away from manufacturing and towards finance, though not as much. Overproduction is a global problem that has undercut our manufacturing. But our main domestic problem is too much consumption, which was encouraged by a lack of regulation and too easy credit. That's why everyone here is in debt up to our eyeballs. The whole thing is unsustainable and our trade deficit is also out of control because of it.

Again, we're taught to examine long run effects, always aim for the sustainable option. The Tory government always advocated supply side policies to expand our economy without inflationary effects, even if it was long run growth, it was sustainable and would permit more growth in the future. It was Labour and their spending spree, spending money they didn't have, and made no effort to raise, that went hungry for the short run, unsustainable growth. And I strongly disagree with what they did.

Well I think Labor's spending spree was more just to fuel consumption and keep the crisis from rearing its ugly head. When you're in government you don't want to have a crisis, it makes you look bad. So they wanted to prolong it as long as possible, which is what we did in the US too. In the case of countries like Britain and the US though, there was deregulation that led to unsustainable asset bubbles. Sure, profits were great for two whole decades, but it wasn't sustainable. At the time, the idea was to make the government "as small as possible while still working," and it looked to the mainstream like these were still working. But they weren't. This is the problem with the axiom that the government should be as small as possible.

And my example was used to prove that the state doesn't always know best and that the markets should be left sometimes. Not sure how you can call it irrelevant when it's the exact reverse of what you did. It was not miniscule, it wasn't just one industry, it was THE industry. Unemployment had never been so high, we had raging inflation from years of just pumping up demand fiscally. The North of England still hasn't recovered from this "miniscule" event, over 20 years on. The global competition took the business because labour were granting 20% pay rises year upon year. Why would any firm stay in Britain and pay those wages?

I never said the state always know best and that markets should never be left to themselves, if I did than I would believe in a purely communist society. Economists and many Americans, however, say that markets always know best, and that the state should always get out of the way because everything it does is inherently inefficient. Your example was irrelevant because I was countering the opinions of many economists and was stating why the idea that "markets always know best" is incorrect, a discussion your example had nothing to do with. You brought up the reverse example of the state doing a bad job in one instance, but clearly there are instances when the state does a bad job, and I never claimed that the state is infallible or that we should have a centrally planned economy without markets.

But on to your example, it is miniscule because one industry in one small country in the 1970's doesn't compare to the global economic crisis we are in now, that effects billions of people. Also, we already established the decline of Britain's mining industry was because of global competition, not state involvement. No matter what the state did or did not do, British copper would not compete with Chilean copper, which comes from a third world country with low wages and a cheap currency. It sounds like you're actually arguing that it was the unions that ruined British copper rather than the state, but if we pin the blame on the unions, even if they hadn't struck, with lower wages they still wouldn't have been able to compete with the metal from third worlds (which was of higher quality, produced at a lower costs because the workers were on third world wages, and of course because these countries have cheap currency, whereas the pound is very strong). This is simply the inevitable process of globalization, not the fault of too much state involvement.

I disagree that it guarantees full employment, and that it's less prone to crisis. How do you create full employment from nowhere? If your firms don't want to produce more, if they have no incentive to produce more, they won't employ people. The government has to spend and subsidise to generate the employment. But where do they get the money from for this? They definitely aren't making enough from tax, they're creating employment that won't pay back with a taxable profit. You have to lend money, then you end up in a financial hole a la Portugal. I'd say that's a crisis.

Are we talking about a command economy (which is what I am assuming Nixon was talking about) or a socialist welfare state? In a command economy, there is full employment. That's how it is in command economies. The state is in control of everything and employs everyone. There aren't really crises in such an economy the way there is in a capitalist economy. In a capitalist economy, you get the boom and bust cycle. Not in a socialist system. You do get stagnation, but not crisis. That's what happpened in the Soviet Union when things started falling apart in the late 70's and 80's, people stopped caring and productivity plummeted. But this wasn't a crisis, it was just really bad stagnation. Of course it was a "crisis" in the dictionary's definition of the word, but it's not an economic crisis of market fluctuations, which is how we're using the word.

If we are talking about socialistic welfare states like Sweden goes, I would say it's the same. The economy is much less prone to the crises of the business cycle. You don't get the extreme market fluctuations you do in a capitalist system, which is how the capitalist countries were before 1929, because the large state tempers the business cycle. You do get stagnation though, which is what people criticize these countries for. But not crisis and the fluctuations. Chances are, if you have a big state and a socialistic economy, you're not going to have a giant asset bubble. You'll probably miss out on that bubble and not enjoy the gains that the more deregulated countries are enjoying, but that means you won't feel the crash that they do.

Also, I wouldn't classify Portugal as socialist, and Portugal is one of these countries, like the UK, that racks up huge deficits to increase consumption and put off the effects of the crisis until a little bit later. We've done the same thing in the US: our federal deficit is out of control and was under the Bush administration. And we are by no means socialist.

How are rewards not unequal? Are banker's bonuses fair then? If there's the same basic wage, why wouldn't firms just turn to capitalistic ways by "rewarding" employee's making them richer for being better, and producing more. You can still offer the same basic wage, doesn't mean equality at all if bonuses are reigned in on top.

It's up to the people. But in this hypothetical communist scenario, everyone is given the same wage and same goods, and special rewards can be given on top of that. Say everyone gets a few credits to spend on luxury goods, and if you do really well than you get a couple of extra credits. That could work. There's a million different hypothetical scenarios here. But I fail to see your point...your criticizing me for not staying true enough to communism in some hypothetical scenario? Nixon just made the point that you wouldn't see people working in a communist system because there's no rewards. I said well you can have rewards. Now you're saying no, that that's not communist enough? I could easily envision a scenario where you have a communist economy (state ownership of everything, no private property, everyone earns an equal wage) where a number of incentives are given for good performances. This would still be a communistic system. But I don't see why I should have to defend it as being communist or not, because it's a hypothetical scenario, and certainly one with a planned economy that just about anyone would classify as communist (why we would even debate about it though is beyond me).

Anyway, Nixon then said then why would you have this when you could have markets determining these incentives? I said simply because in this scenario, for whatever reason you want a socialist system. Maybe the want full employment, maybe they want to be as close to the idea of equality as possible (but give these little incentives on grounds of practicality), maybe they want the state taking care of everyone, maybe they believe the state does a better job of running and planning the economy than free markets? I don't know, it's a hypothetical scenario in which a communist government exists...I was just pointing out that in this hypothetical scenario there would be a way to offer rewards. That's all I'm saying.



Edit: another reason I voted socialist and posted here was to disagree with the sentiment of the OP. Not taking into consideration whether or not what I or Joel said is right, let's think about the timing and circumstance of the debate. If we were having this in the 70's and 80's, after the fall of Keynesianism, than yeah, I would understand. It would be a time to talk about how great markets are. Or even in the 90's and 00's. But it's not that time any more. First of all, we've heard the whole discussion on why capitalism is better than socialism (the reasons you listed in your paper and what people have said here) a billion times. Maybe not as much in the UK, but I've heard it a million times in the US. Individuals won't work as hard in a socialist system, firms don't have the incentive to produce, they don't have the incentive to adopt new technologies, there's no innovation, equality is unfair, etc. etc. etc. etc. I've heard them so many times and they're so common that I just don't feel there's that much of a need to repeat them again. If anything, people should be playing devil's advocate for the sake of having an interesting discussion.

But more importantly, we've been hearing nothing but the logic of markets for 30 years now. For the last 30 years, it's been nothing but Milton Friedman, nothing but "markets know best," nothing but "get that big bad inefficient state out of the way," nothing but "cut taxes," nothing but "reduce tariffs," nothing but "privatize," nothing but "deregulate." We've been hearing this stuff over and over and over again. So I get sick of hearing it and have to argue against it when I do because few people seem to. But even more importantly, taking all of this into consideration along with the events of the past 3-4 years, I think it's not really the time to be talking about how awesome markets are. We just heard all of that ****, deregulated our economies because of it, and then it resulted in a global financial crisis...so I don't think right now is the time to be talking about how great markets are. We already know how great they are and that they work, but right now we should be talking about the fact that often times they clearly don't work and that they are inherently prone to crisis. We should be talking about what the state should do to prevent something like this from happening again, we should be talking about how we need to move towards a more mature understanding of markets, not one that says the market should be left alone every time. So right now just doesn't seem to be the right time for an ode to markets. That's the main reason I'm writing in this thread. As I said in the first sentence in my first post here, "I don't want to get involved in this."



Anyway, I think I've said my piece for the socialism side, does anyone else want to give it a go? Though I guess they're not commenting in the thread, a surprisingly high amount voted for socialism...what do those who voted socialist think? Why did you vote socialist?

 

[jack3liam]

Egypt and Libya are by far the richest African countries. (Don't mention what's happening to them now 8-|)

ther not communist just a dictatorship with lots of oil

 

[FinglasRed]

I haven't read the entire thread, only the first page lol. I think socialism, it eliminates greed and inequality. In socialism, everybody has something. In capitalism, a small percentage of the population has everything and the rest has nothing.
Eastern European socialism didn't work because of Stalin's implications as dictator. He was a butcher. Shortly before Lenin's death he said that Stalin is a "danger to Russia", I wonder what happened Lenin lol.
Btw, somebody said that capitalism has worked in 'Great Britain'. It has worked for England (I refuse to endorse the occupation of Scotland, Wales and Ireland) because they exploit(ed) many weaker nations for their own greed and gain. What has capitalism done to the West now? We're all broke, except for the bankers who are getting million euro bonuses for robbing us blind. With Capitalism in place, there will always be a cycle of boom and bust. Socialism offers economic stability and social equality.
As far as I see it, people who believe capitalism is the way to go believe that we're not all born equal.

 

[Joel`]

I haven't read the entire thread, only the first page lol. I think socialism, it eliminates greed and inequality. In socialism, everybody has something. In capitalism, a small percentage of the population has everything and the rest has nothing.
Eastern European socialism didn't work because of Stalin's implications as dictator. He was a butcher. Shortly before Lenin's death he said that Stalin is a "danger to Russia", I wonder what happened Lenin lol.
Btw, somebody said that capitalism has worked in 'Great Britain'. It has worked for England (I refuse to endorse the occupation of Scotland, Wales and Ireland) because they exploit(ed) many weaker nations for their own greed and gain. What has capitalism done to the West now? We're all broke, except for the bankers who are getting million euro bonuses for robbing us blind. With Capitalism in place, there will always be a cycle of boom and bust. Socialism offers economic stability and social equality.
As far as I see it, people who believe capitalism is the way to go believe that we're not all born equal.

Socialism always leads to a large, controlling, central government, with control of major aspects of society. Power should be with the many, not the few.

We're not equal. Some are physically superior, some are intellectually better, some are more creative and others are practical. Should Messi be paid the same as Adam le Fondre? They're equal, after all. Why should pharmaceutical companies invest millions/billions into researching life saving drugs, if their rewarding profit is stripped from them. If they make no profit, where does the money come from to invest? Why should one man work his finger to the bone for another to leech off his taxes. There's a reason all major economies have a welfare state funded by the capitalist machine, because it's the only way to create wealth. China was a poor, impoverished nation, that is now on the way to becoming the major economic super power now that it has embraced the free market ideals. Incomes are rising for all in China, because they actually have some wealth to spread. I'd rather be a small part of something huge, than being an equal part of nothing.

Socialism is a nice ideal, it has major economic flaws in its implementation.

 

[rewdewa]

Socialism all the way!