ringledman
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Anyone watched 'Tropic of Cancer' on BBC 2 tonight?
Cuba - Rations for all foods except the very basics. Consumer goods prohibatively expensive.
Tourist waiters earning $100/day, being the average yearly salary for everyone else.
The more educated, the less you earn.
Socialism at its best...
Very good point, capitalism is an economic system, while socialism is a political system. You also point out something that proponents of socialism never mention: in order for the socialist agenda of one group of society to succeed it has to be enforced upon everyone. This is one of the biggest gripes I have with it.When economic models become political philosophies they fail. Economics should be about a scientific and pragmatic search for the best way to manage an economy. Therefore socialism and capitalism are not comparable; socialism is closer to a religion than an economic philosophy as it seeks to control many aspects of society.
Any form of intervention in a free market is based on a subjective view of a few people. Therefore, every intervention distorts competition. Pure free market capitalism does not allow intervention.It should also be remembered that the free market is an artificial construct and open competition can only exist with intervention and active regulation from governments. I don’t see how pure capitalism or pure socialism could ever work.
The debate is really about what type of state intervention/interference should take place in the market and what it’s objectives should be.
Germany after WWII is as close as the world has seen to true free market capitalism in the last 150 years, even if it wasn't a conscious choice. The new government was way to busy with what a government is actually meant to do: national defense, policing, road infrastructure, etc, and therefore didn't intervene in the free market. This resulted in the most successful economic period Germany has ever seen, until a few years later state intervention was reintroduced, immediately causing negative economic results.Do you have examples of where capitalism (without state intervention, subsidies and protection of capitalists) has worked economically?
Exactly! However, in true free-market capitalism, where the state is prohibited from intervening in the economy, there would be no bribing of politicians for economic benefits.Corruption will always destroy capitalism or communism.
As soon as you introduce politicians, it's the kiss of death.
The great depression was not the result of a failure of free market capitalism. It was the result of state intervention in the 20s through a massive increase in the money supply, and further intervention in the 30s through state spending, price/wage fixing, etc.Nowhere near as long as the queues in the depression of the 30s in America.
No, they did not do even remotely a good job at providing basic food. Have you ever talked to East Germans, Hungarians or Bulgarians that "lived" under communism/socialism? I have met many and I saw it first hand in East Germany after the Berlin wall came down. The diets of these people were far from adequate.Generally the communist/socialist countries of eastern europe did a very good job in providing basic food to everyone. It was luxury goods that were in short suppy.
The US embargo is only partially to blame, and incidentally the embargo is a form of state intervention, not free market capitalism. The world is a big place, but yet Cuba has failed to create any meaningful productive sector, despite its low wages.As regards Cuba, their main problem was the United States embargo and trade sanctions. Cuba has a fine record in health and education.If Ireland had similiar sanctions imposed we would be in a very sorry state....only cars from the 50s and no inward investment or indeed export markets for most of our produce.
And this is different to capitalism how?You also point out something that proponents of socialism never mention: in order for the socialist agenda of one group of society to succeed it has to be enforced upon everyone.
This is nonsense. It is perfectly natural for many people to prioritise buying of Irish goods over imports in order to improve our economic woes, but those nice guys in WTO/GAAT have their own bibles of regulations to prevent such interventions. Regulations work both ways, not just the way that suits you.Any form of intervention in a free market is based on a subjective view of a few people. Therefore, every intervention distorts competition. Pure free market capitalism does not allow intervention.
I also disagree that the free market is an artificial construct. Quite the opposite, it is the most natural form of economic exchange, i.e. people exchange products free from any coercion or enforcement as they wish to. As soon as you add regulations or other interventions the system becomes man made or artificial.
If by capitalism you mean our current system then there is no difference. As I mention in my previous post, the current economic system does not remortely resemble free-market capitalism, it is more adequately called interventionism. In true free-market capitalism all participants in economic transactions are free to exchange products for money (and vice versa) as they see fit to do. The only thing that is enforced is property rights and and protection from coercion or manipulation. Apart from that everyone is free to transact in whatever way the see fit.And this is different to capitalism how?
This is nonsense. It is perfectly natural for many people to prioritise buying of Irish goods over imports in order to improve our economic woes, but those nice guys in WTO/GAAT have their own bibles of regulations to prevent such interventions. Regulations work both ways, not just the way that suits you.
But the capitalist system itself would be enforced by a higher authority. And the rules of that system (e.g. GAAT/WTO rules) are imposed by a higher authority. And those who want a system whereby public services are provided to all based need, rather than based on ability to pay are left swinging in the wind.In true free-market capitalism all participants in economic transactions are free to exchange products for money (and vice versa) as they see fit to do. The only thing that is enforced is property rights and and protection from coercion or manipulation. Apart from that everyone is free to transact in whatever way the see fit.
Herein lies the difference, nobody is restricted or encouraged to do anything specific that is decided by a higher authority.
Yes it is natuaral for people to prioritise, but prioritisation should not be enforced by a group of politicians. It should be up to individuals to choose whether they want to buy Irish or not. Forcing people through regulation to buy Irish will have absolutely no positive effect on the economy, as consumers will face higher prices than they would if they were completely free to choose where they spend their money. If you are happy paying a higher price for an Irish made product, good for you; if you want to buy a cheap Chinese product, good for you. This is what competition is all about, and distorting it through intervention will always result in higher prices or lower quality (directly or indirectly) for the consumer.
If creating economic growth were so simple to achieve as prioritising the buying of local goods over imports, then banning imports would be the ultimate solution. Worked great for the GDR.
we’d all be using Microsoft software, and a lower quality version of it at that, if it was not for governmental interference to allow other players to stay in the market.
I think when Chris talks about forcing people he is talking about government intervention, tariffs or embargoes etc.
I am of the opinion that people should be free to buy whatever goods they want as long as they are safe to consume. Protectionism impacts on the weak and the vulnerable and protects the haves from the have-not’s.
I think that the free market is an artificial construct in as much as governmental oversight is required to stop businesses from abusing their market dominance in order to become monopolies; we’d all be using Microsoft software, and a lower quality version of it at that, if it was not for governmental interference to allow other players to stay in the market.
Can you back that up please?Large corporations have become so large and dominant, precisely due to regulations.
Let me try and explain differently. Take as an example horse drawn carriage rides in a park. Initially, there are no regulations; if you have a horse and a cart you can try and attract customers that want to take a trip around the park. Business takes off and more people start offering the same service. The best thing you can do to protect your business from new competitors, is appeal to the local council or government that there should be regulation and strict rules of this service "for the benefit of the customers". As you are already established in the business new regulations are not much of a problem for you. But if you have to add the cost of complying with regulations to all other start up costs then setting up the business quickly becomes less appealing.Can you back that up please?
For an example of how large companies can abuse their market position just loom at Standard Oil. If a company has lots of cash it can keep competition out of the market by below cost selling, targeted at their budding competitions market.
Yes indeed, the tulip mania was a speculative bubble, but there was plenty of government intervention. Take a look at this article for a different look at the crash: [broken link removed]There has to be a legal framework that business is conducted within, unless you’d like to see a return to charter companies like the British East India Company? Therefore there will be some form of government regulation, be it overt of more subtle.
As for all crashes being caused by government interference, as far as I recall the Tulip Mania of the 1630’s was not caused by any government but a simple speculative bubble.
Oh yes, those guys at Fox; you're absolutely right, they are constantly re-writing history, and are also in absolute denial of their "everything is great in the economy" reporting of 2006/7. My economic beliefs are as much aligned with them as they are with Marx and Engels. While on the surface they are calling for free markets, they are also calling for massive government deficits and Federal Reserve money printing, which from the Austrian School's point of view is the ultimate government intervention. The only difference between Republicans and Democrats (economically speaking), is that Democrats admit that they will increase government size, power and spending, while Republicans state the opposite, but still do it.There's a big drive in the rightwing media in America at the moment to sell the virtues of completely free market capitalism. I’m not a big fan of the clowns on Fox News and their fanatical attempts to re-write economic history (I'm not saying you're like that!). Life is complex and one size fits all dogmas that purport to offer a simple answer to everything really don’t stand up to scrutiny.
Yes indeed, the tulip mania was a speculative bubble, but there was plenty of government intervention. Take a look at this article for a different look at the crash: http://www.econ.ucla.edu/thompson/Document97.pdf
So the tourists in Killarney should have to wade through piles of horse manure because of some theoretical view that 'regulations' (about horse nappies in this case) will restrict market competition?Let me try and explain differently. Take as an example horse drawn carriage rides in a park. Initially, there are no regulations; if you have a horse and a cart you can try and attract customers that want to take a trip around the park. Business takes off and more people start offering the same service. The best thing you can do to protect your business from new competitors, is appeal to the local council or government that there should be regulation and strict rules of this service "for the benefit of the customers". As you are already established in the business new regulations are not much of a problem for you. But if you have to add the cost of complying with regulations to all other start up costs then setting up the business quickly becomes less appealing.
With all the talk of regulting the financial industry more, not one financial corporation is publicly rejecting such an idea, because it makes sure that competition is kept at bay.
How about a law that states that you have to clean up after your animal if it defecates in a public place (like there is for dogs)?So the tourists in Killarney should have to wade through piles of horse manure because of some theoretical view that 'regulations' (about horse nappies in this case) will restrict market competition?
He was being dishonest when he said that. Anyway, that's not the point Chris is making.This might be a good time to replay Sean Fitzpatrick's infamous interview of a couple of years back (was it with Marion Finucane?) bemoaning how 'excessive regulation' was holding back these bastions of growth and development.
The only thing that needs to be enforced by government is criminal law, property law and contract law. My point is that governements should be precluded from deciding what and how means of economic production are put to use.But the capitalist system itself would be enforced by a higher authority. And the rules of that system (e.g. GAAT/WTO rules) are imposed by a higher authority. And those who want a system whereby public services are provided to all based need, rather than based on ability to pay are left swinging in the wind.
Yes it is a regulation, but not on the economy, rather on the government. Making it illegal for governments to tinker in the economy (through stimulus, tax incentives, tariffs, etc.) restricts governments, not the means of economic production.Forcing people NOT to prioritise through WTO/GAAT rules is regulation in itself. Or is it just one set of regulations that you seek to demonise?
Tourists in Killarney have nothing to do with my example. To add to Purple's comment, we do not need to regulate through horse nappies. We do not need to spend time on money to come up with a report and pay horse experts for feedback. All that needs to be done is the enforcement of existing littering laws.So the tourists in Killarney should have to wade through piles of horse manure because of some theoretical view that 'regulations' (about horse nappies in this case) will restrict market competition?
I would strongly suggest that you do not believe a single word that man mutters. How many financial institutions have publicly complained against the talk for new regulations, except for rules on executive pay? Regulation protects those that are being regulated, not their customers.This might be a good time to replay Sean Fitzpatrick's infamous interview of a couple of years back (was it with Marion Finucane?) bemoaning how 'excessive regulation' was holding back these bastions of growth and development.
WHy not just legalise slavery?I do believe if we had minimal government interference in the Irish economy ,we would have a much more productive country.
Reduce the minimum wage and welfare rates to the bare minimum.
Reduce taxes on work and VAT.
Reduce public sector numbers and reduce the remaining workers salaries.
All these measures would mean that people would have a big incentive to work and costs would fall across the board stimulating all buisnesses.
The only problem is the transition pain would be so painful no politician would endorse it.
WHy not just legalise slavery?
But seriously, why this mad rush for 'more productive'? What benefits arise for society from a 'more productive' country?
Some interesting leaps of faith there. Has this actually happened anywhere?High productivity leads to greater income for the country, leading to lower taxes and a greater standard of living for all.
Higher productivity, leading to lower income taxes and higher consumption taxes (penalising those who earn less) and a greater standard of living for some (but definitely not all).
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