> The expectation of rising real incomes was built into the American culture
Ah that's the classic propaganda line:
"I am not poor, I am just pre-wealthy."
...So I sure don't want to vote for anything that would jeopardize my wealthy position when I get there.
The key in all of this is ability to manipulate the people into believing and voting in a particular way. US has no shortage of zombies who don't think on their won. Blame the education system, blame the system as a whole, I don' t know. As long as people don't base their votes on reality they will end up voting against their own good because they are being manipulated.
Basic health care, tax cuts for the super rich, trickle down wealth, futile wars, all this things are being delegated (via votes) from un-informed people to the politicians via a manipulative process. I see this within my own extended family, I see it on the streets, in the stores, in school and at work.
> US has no shortage of zombies who don't think on their won.
A human being is at the most juvenile when he encounters a view contrary to his own and ascribes it to stupidity.
If only everyone was as enlightened, as educated, as brilliant as he ... then everyone would understand.
No. Grow up.
I will never be wealthy and I will still continue to vote for a fair tax system. A flat tax system. Because everyone should pay the same, regardless of status or income.
I won't always be healthy and I will still continue to vote against a socialist healthcare system. Because everyone should pay for what they use, no more and no less. Not just with healthcare, but with everything.
You don't believe what I believe? That's fine. But how dare you ascribe my beliefs to ignorance? That in itself, is ignorance distilled. The refusal to even consider anything but your own stunted views.
> I will never be wealthy and I will still continue to vote for a fair tax system.
What makes you think that's fair? I didn't say what is fair or not, you brought that into the discussion. Do you think marginal utility doesn't make sense. Why is linear, percentage based, tax "fair"? Seems rather arbitrary to me.
> I won't always be healthy and I will still continue to vote against a socialist healthcare system. Because everyone should pay for what they use,
Ok except that the world where each individual is isolated and should just get what they need for themselves by paying and nothing more is a fantasy world. Exactly the kind of a situation I was talking about. Turning human lives and their health into a marketable commodity is craziness. Letting emergency services handle terminal heart patients, which would have been managed better by preventive care is insanity. Checking people's accounts before pulling the ambulance to the door is a pretty scary society, and maybe you evaluated it and decided to vote for that, I decide not to. Starting wars just to fuel the military industrial complex, is craziness. Letting old people die of hunger and neglect is craziness.
> You don't believe what I believe? That's fine. But how dare you ascribe my beliefs to ignorance?
I dare because it seems at least some of your beliefs are crazy and are hurting not only yourself in the long run but others. Maybe you'll say that you don't care about others, and it shouldn't matter what happens to them, and I say that's crazy as well.
> ... their health into a marketable commodity is craziness
> ... fuel the military industrial complex, is craziness.
> ... old people die of hunger and neglect is craziness.
> ... your beliefs are crazy
> ... and I say that's crazy as well
When you develop the maturity to actually consider another human being's view point and respond in an intelligent manner, I'll be happy to respond in kind.
Let's try a random example.
> Letting emergency services handle terminal heart patients, which would have been managed better by preventive care is insanity.
I see where you're coming from. You no doubt feel that by reducing the costs to preventative care through government subsidy, we could create a reality where the overwhelming majority of the population would be actively screened for heart disease and treat it as soon as detected, reducing overall costs.
You're wrong. Even the poorest of the poor can afford to see a physician once a year to get screened. Even if they paid out of pocket. The kind of tests you're talking about cost less than a hundred dollars.
So why don't they? They choose not to. Maybe they despise doctors, maybe it reminds them of their own mortality, maybe they feel like it could never happen to them, but they do make that choice. And it's not because of cost.
See how that works? I made an effort to understand why you said what you did, I thought about it, and then I responded without calling any of your ideas crazy, insane, ignorant, or stupid.
A flat tax? That's a bit too socialist for my tastes... should a man making $100k per year really be forced to pay twice as much as a man making $50k per year, just for being more productive? Wouldn't a head tax be better, since everyone would then pay equally? Plus you would not have the disincentive effect on marginal labor of your "make twice as much, pay twice as much" scheme.
Also, why should I be forced to pay for your military and your police force? Shouldn't it be my choice to consume what I want?
What if your paying the way for the other guy, who is 20 years your junior, allows him to better pay your medical bills when you get sick at age 70, and have no money to pay yourself (through no fault of your own you have lost a lot when X disaster occurred)? The swings and roundabout of the system aren't ever simple. Likewise, what about the 5 year old who needs state help, has contributed nothing, has had no chance to and has done nothing wrong. Who should pay if the parents don't?
I assume/hope scarmig is being sarcastic here? ;) But yes historically (middle-ages and before) head-based tax systems were considered fair.
Anyhow, non-progressive taxation and market-based health-care is a waste of human capital, not to mention that it leads to grossly inhumane situations.
People that don't get that should look at the stats and/or study some basic economics. For example, how does the UK spend only about half as much on healthcare, and still has a higher life-expectancy than the US?
I will never be wealthy and I will still continue to vote for a fair tax system. A flat tax system. Because everyone should pay the same, regardless of status or income.
Trouble with a flat tax system is the poor can't afford the tax rates the nation's current expenditure would require. It would work O.K. if the expenditure was much lower, but I see no way to get from here to there.
Aside from that, I've come to believe that a flat tax system isn't actually fair. The less income someone has, the more taxes cut into basic living expenses (because a greater portion of that person's income is spent on basic needs). On the other hand, someone with large incomes sees no tightening of basic living expenses because they make enough that the money lost to taxes falls solidly into the "extra income" region.
I'm not very good at describing this idea yet, but I tie it back to the idea I have happened upon that (for example) a 25% raise to a person making $40k is in terms of spending power much more than a 25% raise. This is because discretionary income is much smaller than $40k. The new $10k can be considered added discretionary income (assuming the person was meeting basic needs before) thus making it in effect much larger than a 25% bump.
I am not an economist, but it sounds like you're getting at something similar to the diminishing marginal utility of money. I can't find a good source online that explains this, but the basic idea is that the more money someone has, the less each additional increment is actually worth. For example, a $10,000 raise is a lot more useful to a person that makes $50,000 a year than to one who makes $500,000 a year.
There may be a connection with progressive taxation, in the sense that if money has diminishing marginal utility, then a flat tax on money is actually regressive in terms of utility. So then a progressive tax on money is closer to being "fair" in the sense of being a flatter tax on utility.
That's correct. Alfred Marshall's theories of utility are the basis of modern economic analysis. Todd Buchholz' New Ideas from Dead Economists has a great introduction to these ideas while being more accessible than the typical econ textbook.
"The less income someone has, the more taxes cut into basic living expenses (because a greater portion of that person's income is spent on basic needs)."
Covered by Milton Friedman's proposal of a flat tax with a minimum standard of living deductible, e.g. 10k USD. Furthermore, those making less than that 10k would get the 'refund' as some sort of social security. Developed in his book "Capitalism and Freedom".
"I'm not very good at describing this idea yet,"
What your describing is, as far as I can tell, the concept of "marginal utility".
Oh god. Don't give them a refund, just make the first X,000 tax free. That's better than circulating the money through the hands of a bunch of bureaucrats.
I think the act of actually paying a tax is quite important, despite the bureaucratic overhead. For the same reason, I think payroll taxes and the like should be directly paid by checks (not just deducted from pay and handled by the employer). This way, a person would actually have that money and then have to commit the physical act of giving their money to the government instead of just seeing it as money not in their paycheck.
rdtsc's not talking about you personally, but about the median voter. Many political arguments are founded in ignorance (in contradiction of available data or in defiance of logic), and observing this fact is not equivalent to a judgment of people who happen to hold the same opinions.
Having said that...
Because everyone should pay the same, regardless of status or income. [...]
Because everyone should pay for what they use, no more and no less.
These are perfectly valid opinions to hold, but to express them as if they were facts is to assume the correctness of your premises. I can see why you hold those positions, but I can also think of compelling arguments for the opposite positions.
> But how dare you ascribe my beliefs to ignorance?
Because they do seem to stem from ignorance with regards to the purpose of a society. Why should I refrain from robbing you if I am sick and hungry whilst you seem to have more than you need? We have entered into a society in order to protect ourselves, which means that even the poorest in our society must have healthcare and food on the table, which again requires all of us to pay a certain amount of our money for things we might not directly need. You might not need healthcare, roads, public transportation etc. but you do need to not be killed and robbed by people who have nothing.
Because your views are stupid.
Easy example: a homeless tramp dying of ebola.
(You can substitute a bunch of other diseases naturally occuring in the USA if you like)
You'd normally want to pack that guy into a medical isolation unit pronto. You probably won't save him but at least you'll stop other people from catching it from him.
But no! maratd vetoes this because it's not fair. The hobo should pay for his isolation unit and until he can, he should be kicked out into the streets to act as a plague vector.
Rinse and repeat for all the other issues you haven't thought about properly.
I've said for a long time the basic problem in the States isn't capitalism vs. socialism or rich vs. poor, but rather educated vs. uneducated. I think I'm not being out of line to claim that on the average an American's high-school-level education is pretty poor. People who are victims of poor education don't know history (which is rich in examples of past policy), can't think critically or reason about potential outcomes, and don't know to sometimes be healthily skeptical of things they're told.
Those kinds of people will never be able to vote in their best interests because they have no idea what their interests even are, because they're easily manipulated, and because they're incapable of reasoning critically about even the most basic policy decisions. That's how you wind up with people holding up picket signs saying "Obama=socialism" on one side and "Keep your hands off my Medicare" on the other.
But if you read it carefully, the truth is that we're not getting worse. We're just not getting better as fast as others. We used to be the best. Now we're in the middle. We're not worse than we were 60 years ago. We're better. Other countries have just gotten better much faster. Which is a trend that applies to a lot in America these days.
Education IS improving. So, I think anything that tries to relate an absolute decline to "the failure of our schools" is wrong. Maybe that's not your point though.
The thing is that what you describe at the beginning of your post is actually typically human. Experiments have shown we all have cognitive biases that make us bad at "being skeptical" and "reasoning about potential outcomes" or using past examples to predict future events (even when we're well educated.) Humans are just not good at doing that stuff. We can overcome our biases but that's not really taught in school. You can read about a lot of it at http://lesswrong.com/
So I don't think it's that helpful to bundle up people who struggle with cognitive biases as "Those kinds of people" There's a chance that "our kind of people", aka people who read hacker news, are much better at being rational but it's probably because we've taught ourselves to think like computers! Because that's a big part of what being a hacker is.
I'm not saying education is better or worse than in the past, just that (in general) it's not up to the task of producing an electorate capable of voting rationally. After all, it's often people of retirement age you see holding those anti-Obamacare signs. Their basic education did happen 60-odd years ago and it clearly failed them.
But there's a big difference in thought process between "I think voting this way is best for everyone" and "I think my benefits will go up if I vote this way".
I think a person's best interest is often (not always!) the same as the general interest. Education comes in to play when a person is educated enough to be able to rationally reason that case. For example, "I have a perfectly good well on my property, but I understand that contributing to a public water supply system may benefit me in the long run, because maybe my well will go dry." Or maybe, "I have a well, but contributing to a public water system will increase commerce in the area which will directly benefit me."
Obviously that's not always going to be the case, and people can and will reason incorrectly, but the important part is that a person is capable of applying some modicum of thought instead of just "The rent is too damn high" or "Obama is a communist, hang him for treason."
Calling people names because they disagree with a progressive tax structure or mandated health insurance isn't a convincing argument for your side. There are arguments to be made for and against these policies.
In fact, it would be helpful for you to recognize that you are simply one side of a two-sided issue, each side of which believes they are obviously correct and that the other side is too uneducated to know how wrong they are.
From a rational point of view I can understand how someone with a high income is against a progressive tax structure. How someone how has millions of dollars stashed in an account votes against a socialized basic care. I don't understand why someone living on government's check, and having poor health due to a financial inability to go the doctor, is voting against it. That is the issue.
The problem I am describing is people being manipulated to vote against their own interest. Religious, fears, fake promises are all used effectively by those in power to recruit and manipulate others to do their bidding for them. That is what is scary.
"I don't understand why someone living on government's check, and having poor health due to a financial inability to go the doctor, is voting against it."
Because maybe these people actually see the immorality of taking from others by force?
"The problem I am describing is people being manipulated to vote against their own interest."
So morality has no bearing on your position? "Fuck morality and others, as long as I get mine, and then some?" Seems like your position is in direct contradiction with the values you claim to defend.
Morality has a bearing on it. Not letting die, or for that matter, enabling a minimally humane life for everyone, is as important, or more important than the dictum against (potentially unjust) taxation.
I see why in the US one might be against this, as I've lived there (working at a great IT job in central San Francisco), and have seen the poverty, and the human suffering (not to mention the smell of bums on the bus). Probably feels like there'll be no end to it, and then, in order not to feel guilty or bad, one closes ones eyes to it by believing it's their own fault; 'lazy smelly bastards!', but that doesn't change the moral reality of it.
When judging oneself, feel free to be ruthless like Ayn Rand, when judging others, please be considerate, and take into account more than economics alone.
In a way I evaded it too. Not by borking up my morality, but by voting with my feet when the opportunity presented itself. I am back in the UK now, and happy to be part of a society that treats it's weakest members well (or ok-ish at least).
I wonder what it is between the US and Europe, that we have such different notions of (social) justice. Perhaps it is because Europe has more history, that we have seen over and over that wealth is often gained (and lost) by luck, that often it accumulates over dozens of generations in the hands of the few. While the US is only now developing it's own aristocracy. I even heard a British nobleman once vehemently argue that wealth is not deserved.
So yes, being pragmatic we do allow the market to flourish, and do allow the wealthy to enjoy their wealth, but we don't confuse economics with morality, and moderate it's excesses through progressive taxation, some redistribution, and universal health-care. Human life and happiness trumps justice on the economic plane.
That is a strange moral system you have in the US. In other countries, it is morally acceptable to take from the rich and redistribute to the poor.
The reason is that in those countries, wealth and lack of wealth is thought to be a great part influenced by factor outside your control (chance). That is even backed by studies, if you are born in a poor families, you will have less opportunities than a rich kid in a rich family.
Taxing the rich to help poor people in those circumstances is not to punish hard work to reward lazyness(=immoral), it is perceived as balancing unfairness in nature.
On the other hand, there are other reason why a poor could be against taxing the rich that have nothing to do with some fluid concept like morality. It could be, for example, that they agree with the numbers and the theories presented by the party disagreeing with the taxes. After all, trickle down economic could work as described, why not, it is supported by important AND qualified people.
What is missing in US politics (and generally in politic) is a scientific approach to the proposition. The level of proof required to submit political proposition as important as tax level is much lower than what you need to convince your wife to let you buy an XBox. That is the problem, voters are provided with vague theories with nothing to back them.
Take a look at "your" money. Notice that it says "Federal Reserve Note." That's because it's a promise created, promoted, distributed and backed by the government. In a very real sense, it's their money.
As the "property" you feel so strongly about, belongs to the government, it seems only fair that you should follow their rules in the use and disposition of it, don't you think?
I have another question, too, which is on a completely different tack. Why don't you care about the poor and weak in your society? Don't you see you're all in it together? Doesn't common fellow feeling let you see that trying to lift up the disadvantaged is a genuinely human and humane thing to do?
Taxes are part of the package deal. You get some things back for them. The package deal (the contract if you will) in theory is voluntary. You are free to get your ocean liner and set sail into the international waters where you don't have to pay anyone anything.
Well maybe not so tongue in cheek. You see, I have lived in US for more than a decade and noticed there is a disproportionate number of Randian type libertarians here. Mostly are just college kids who read Atlas Shrugged and now they want government to get out of their business.
This is the immaturity and fantasy world that I was referring above. For all intended purpose, a place where FDA, SEC, tax authority (IRS) don't exist and are out of people "hair" exist -- many of those places are pretty scary to live in, Somalia is one of them, other poor countries are also there. You'd think those would be a libertarian paradise, no controls, no need to pay taxes, but reality the opposite is true.
| Because maybe these people actually see the
| immorality of taking from others by force?
Based on this statement, the only form of taxes that you approve of is a 'pay whatever you want' system, right? Otherwise, all taxes is immoral, or at least any tax that is imposed on at least 1 person that feels it is too high.
| So morality has no bearing on your position?
One of the things being described is the people that hold positions like, "Don't you dare touch my socialist programs (Social Security, Medicare, etc), but vote against Obama because he's a socialist and socialism is evil... the Bible says so!"
Whose propaganda line? I've never heard anyone in favor of small government say that. There aren't people in the electorate who think they're going to wind up wealthy to swing an election.
The lack of increasing real incomes doesn't have anything to do with "tax cuts for the super rich". It's the combination of globalization and the importation of ten million poor people. If you're doing a job that can be taught to a Central or South American peasant in a few weeks you simply have no power in the labor market.
I would be interested to see more statistics and trends of people over time. Many of the statistics I see divide people into classes by income, but ignore the fact that the people within those classes change.
For instance, let's say that people in the next generation decide to go to college for 10 more years, leaving at 32 rather than 22. Then, when they get out, they make 50% more income than the previous generation. Overall, they might be better off throughout their life; but the statistics will make it look like there is a huge lower class (who are in fact just young and haven't reaped the benefits of their education yet).
The more our earning is concentrated to a small part of our lives, the more it will look like class divisions. And depending on how the accounting is done, the upper classes may consist largely of people with temporarily high incomes (from inheritance, selling a house, etc.).
[None of the above is meant to imply that there is not a problem. Just that statistics can be deceptive, and can hide the real solutions from us.]
EDIT: Specifically, I think it would be interesting to divide people into classes like: "X% of people will see an income over $80K sometime during their lives". That seems like a better indicator of opportunity to me.
You see that same issue when people complain that X% of the population doesn't pay income taxes: it's true, as far as it goes, but it ignores that people nowadays have extended periods of studenthood, sabbaticals, and partial retirement (among other things). The daughter of two professors working on a PhD in mathematics is not of a lower class than a high school educated waitress, despite making a similar amount.
It's an interesting argument that I've heard many times in different ways. I'm inclined to think there's some truth to it.
But when you look at trends, income is stagnant, wages are stagnant AND measures of social mobility are low as well as studies that show a lack of evidence for second and third generation immigrants being significantly better off.
That plus the (admittedly anecdotal) evidence that single earner lower middle class families who own their homes and cars are much rarer seems to indicate that the shrinking middle class is a reality (measured mostly by some vague "quality of life" metric.)
So it's complicated. The most compelling argument I've heard is that necessities are getting more expensive relative to general inflation (gas, food, housing) On the other hand, what you get for your money is much more advanced now technologically. So it's not like we're strictly speaking worse off even if our relative purchasing power has decreased.
I guess I was inferring a counter argument to "the middle class is declining" which goes something like "the middle class is changing and not the same types of people now that it was then." Young people studying longer, settling down later, more immigration, etc.
I went on a quest to find the numbers years ago and those were the conclusions I came back with. The numbers are messy. I wish I had them or remembered what I read to form those conclusions. I'm actually drawn to this question because I thought of trying to make a website that drew together the data with visualization and statistical analysis.
If you find the data please being it back and share it.
This article is a great explanation of what I've been thinking all along. The rising tide has been in efficiency and technology but every American is realizing these gains through computers, phones, and access to information. The baby boomers were able to get an education, buy a house, a car, have a kid and go on vacation, and all of those things have been squeezed to the breaking point in the past two generations. On the other hand, you can consume all you want on the internet, and with enough experience, cheat the system and download unlimited music, tv shows, movies, ebooks and software. If you want all the luxuries of the baby boomers, you have to be frugal and prioritize. Education: go to community college and transfer to a cheaper state school. Car: buy a cheap 90s honda. House: save for a down payment, but rent is still the same or cheaper than buying and you have flexibility to move. Kids: that may take more time.
You make it sound like a community college education and 90's Honda are bad things to have. They might not be as nice as your neighbor but it's certainly nicer than 100 years ago, no?
This sure fits an interesting middle ground sort of journalism. I don't think I'm quite qualified to describe it, anyone up to help?
For one, it tackles the same insecurity subject conspiracy theorists like Alex Jones approach. However, he keeps it in the realm of rationality. What is the "It"? The main subject seems to be a description of the position and orientation of classes in USA society, and how they're changing.
Now, why is this so different than what other publications publish? I've heard before that Class in America is a touchy subject, and I don't see it mentioned much in The New Yorker, the New York Times, on TV, or in any of the sites I read online.
It seems like something in the idea of Classes conflicts with the Left/Right narrative you hear in 'the media'. Classes should have interests within themselves, not necessarily 100% split among party lines. And the media mostly tells the stories from party perspectives. Does that make sense to anyone? This is confusing to me.
Class is both very real and very touchy in the United States. But people use the term in a really broken way, typically trying to map arbitrary income groups with classes. Which is convenient for everyone: Democratic-aligned classes can try to maintain their privileged position using class rhetoric to bludgeon Republican-aligned classes, and Republican-aligned classes can deny class altogether and take advantage of real but ignored class rifts within the Democratic coalition.
Of course, the classes at the bottom of the respective coalitions get screwed in the process. Which isn't to say that there's any grand lower-class coalition waiting to be made: disempowered classes align themselves in the partisan coalitions out of genuine self-interest, not out of false consciousness. They're just getting a disproportionately small serving of the winnings.
> disempowered classes align themselves in the partisan coalitions out of genuine self-interest, not out of false consciousness. They're just getting a disproportionately small serving of the winnings.
To quote John Steinbeck, "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires."
I think it's a lot simpler and sadder than what we want to admit. Most viewers of Fox News are pretty old, and most viewers/readers of liberal media have high paying white collar jobs.
Most people are working multiple jobs and don't interact with politics, so they more or less don't have to be appeased to. They are just trying to pay their bills.
Stratfor isn't really a news media company like the times or a tv station. IIRC they sell analysis & forecasting services to governments and large corporations.
The author of this article wrote a book called The Next 100 Years which is a pretty interesting read.
One thing I don't see addressed here (or in other articles linked to in this thread): corporate governance. Abusing the standard corporate governance model, where shareholders delegate to a Board of Directors, is one of the key ways that rich people game the system.
Delegating in itself isn't, but it opens up a security hole as soon as corporate executives realize they can game the system by becoming board members--both in their own companies and in each other's companies. If you look at most corporate boards today, they are composed of executives of other companies, and their main function is to allow said executives to rubber-stamp each other's golden parachutes.
This is pretty old now (2000-ish?) but is a pretty great graphical and interactive demonstration of how interlinked the big corporations' boardrooms are.
Check out the 'popular maps' for some good examples.
Edit: It was connected to littlesis.org in 2011 ("a free database of who-knows-who at the heights of business and government")
Related to this, Showtime is currently airing a rather brilliant set of documentaries narrated by Oliver Stone called the 'Untold History of the United States'.
It basically puts this article into broader context, from the entry to WW2 onward.
Would be interesting to know how much different the reception of those documentaries is for a US-educated citizen. They definitely fit to the overall history being taught over here in Europe, but might conflict heavily with the official narrative in the US.
I'm currently watching that series... interesting stuff. Another must, for any who haven't seen it, is the British documentary series "Century of the Self", about American conditioning specifically.
It's not specifically about American conditioning though... it starts with Freud (Austria, then UK), wanders off to Edward Bernays (Austria, the US), talks about the US PR/Advertising industry for a while (totally fascinating to bear in mind while watching 'Mad Men' IMHO) and then ends up with Tony Blair (UK) via Bill Clinton.
Thanks for the Showtime documentary pointer - will look that up.
Great points in this article and I agree with just about everything.
But I think that to really understand the problem you have to look at things from a wider and more fundamental perspective.
First of all, the United States and what is happening to it does not exist in a vacuum. The US is part of a global system which has a lot of integration.
We need to look at actual human needs and real resource distribution on a global basis to understand the problem and come up with a solution.
We need to tie our financial and business calculations into human and environmental needs in a direct way rather than relying on indirect regulation by government. We also need to come up with a system that factors in massive technological unemployment, including large sectors of the professional workforce.
I think there are probably several different approaches that will work, but you have to get away from the typical 'economic' arguments and go at things from a more fundamental level. I believe the key is to find ways to ensure the application and distribution of technologies that meet human needs. We may need some new types of institutions.
I'm confused about the perceived dichotomy of taxation and private investment.
If the government threatens to take their cash, wealthy individuals and entities will find ways to use that cash to further their wealth instead of giving it to the government.
So if the government's taxes are too high, the wealthy won't have the money to invest, but if the taxes are too low, the wealthy have a no-risk, stable return on their cash- sitting on it.
I think this is exactly what we're seeing- low taxes and low inflation are encouraging inefficient use of capital- putting it neither into consumption nor investment.
Just as a wave of unemployment lays the basis for a more efficient workforce, couldn't a new wave of inflation (since taxes are politically impossible) right the ship?
The idea has possible merit, but I want to complain about how you're getting to it. For one thing, the implication that inflation is politically easy is probably not true. There is a large contingent of the right (e.g. the Ron Paul crowd) who are always running around talking about auditing the Fed and how fiat money is ruining everything, etc. More strategically, the people who have the greatest incentive to fight inflation are money lenders who own outstanding fixed rate debt, i.e. banks, and as we've learned recently the banks are not exactly without political influence. Though granted increasing the rate of inflation probably is politically easier than raising taxes.
The second thing I want to question is this:
>So if the government's taxes are too high, the wealthy won't have the money to invest, but if the taxes are too low, the wealthy have a no-risk, stable return on their cash- sitting on it.
How does sitting on cash generate any return at all? You have to invest it in something to cause the value to increase, unless the value of money itself is actually increasing (i.e. a period of deflation), which is almost invariably its own brand of near-immediate catastrophic meltdown.
But you're on the right track, because the problem at present is that they invest their money in safe investments, like treasury bonds, as opposed to higher risk private investments.
The relationship between the investor purchase of government debt and economic growth is very squishy: It's effectively investing in the government. Higher demand for government debt reduces the interest rate the government pays. The money not paid in additional interest by government is then put back into the hands of Congress which it can use to either reduce taxes or fund additional programs at the same level of outstanding debt principal. If the government uses the money wisely then it helps the economy; if they use it inefficiently (or just less efficiently than private enterprise would have) then it hurts.
Naturally this leads to all of the arguments about who should get tax cuts and whether government spending, or what kind of government spending, is better for the economy than putting the money in the hands of private enterprise.
But the other compounding factor is that the normal way we know of to cause inflation is for the Fed to print money and buy government securities with it. This will certainly drive private investors away from government securities, because you simultaneously have the Fed bidding down nominal the interest rate and the inflation reducing the real returns at a given nominal rate, but that doesn't mean you don't you still have the same amount (or more) of capital being "invested" in the government (i.e. the real interest government pays on capital goes down not up), it's just that the Fed is doing the investing with newly created money instead of private enterprise doing it.
Furthermore, if you drive the private investors away from government securities, the question becomes what they invest in instead. This is the flip side of the "who should get tax cuts and what should taxes buy" question: If investors tend to take their money and invest in R&D then we're in business. If they tend to do commodity speculating with it then we're in trouble.
It pretty much seems to come down to this: We need to find a way to get investors to invest in things that help the economy. "Quantitative easing" may cause them to do that either if the default private alternative to government securities is economically beneficial, or if we can arrange for it to be using e.g. tax incentives or government subsidies.
I think we're grokking the same here, but one disconnect:
You're presupposing that the wealthy want _some_ return on their wealth, and I think that in many cases, that simply isn't true.
Take a look at all of the money stranded offshore that corporate America is waiting on Uncle Sam to allow into the US without taxing- that money is probably not earning much if anything; think of the tinpot dictator or the kleptocrat who squirreled away a nest egg in a Swiss or Cayman bank account, and think of the smuggling kingpin south of the border with a swimming pool full of cash.
They all share the following in common- highly liquid and inefficiently invested wealth. They have little hope of increasing the value of this wealth by investing it or consuming with it because to do so requires a big hit to its dollar value (taxation or risk of seizure). The best return (for them) is to let it slowly (in our case very slowly) inflate until a rainy day comes.
The only practical and sure-fire way to bring that money back to productive use is to redistribute it via inflation.
Why do you expect that capital held offshore for tax reasons is invested inefficiently? These companies are not (in general) in violation of the law, they're just exploiting transfer pricing[1] to accumulate capital in a foreign subsidiary in a low tax jurisdiction. That subsidiary can for the most part still invest it in whatever, including U.S. stocks and other securities. They can in many cases even loan it back to their domestic sister company so that it can use the money to grow its business (without paying tax on it, because it's a loan instead of income), which often provides even more tax benefits because the interest paid on the loan is often tax deductible in the higher tax jurisdiction.
There are some restrictions, e.g. the U.S. company may not be able to issue a dividend or do a stock buyback unless it reports at least some taxable profits within the U.S., but as long as the foreign subsidiary's capital account keeps growing, it causes the parent company's stock price to appreciate accordingly and that provides investors with their ROI.
There are ways that this can be less efficient. In particular, the parent company's investors may themselves have made more efficient investment choices than the company's executives investing the money on their behalf if their returns were provided in the form of dividends or stock buyback instead of stock price appreciation as the existing tax code strongly encourages. And this is actually very likely to be the case in practice, because e.g. Apple executives are now sitting on a huge mountain of cash that it likely will never be more cost effective to issue all of as dividends under the current tax code than continue to invest in situ, which means that computer company executives are now permanently in charge of picking stocks for however many hundred billion dollars worth of the world economy. That doesn't guarantee that those execs will make worse investment decisions (or will choose poorly in hiring someone to do it), but it seems at least plausible that someone hired primarily for their ability to sell iPhones or manage a global supply chain will be a worse hedge fund manager than an actual hedge fund manager. But this is just the capital gains tax debate all over again: As long as we tax even reinvested dividends immediately but allow unrealized stock appreciation to be tax deferred indefinitely we're going to spur that sort of crazy economic machinations.
When unions were strong (c. 1950-1980), they were essentially a monopoly on certain types of workers that were vital to production in many industries.
This monopoly allowed the workers to extract a larger proportion of the value of this industrial production through higher wages.
With the US focus on free trade (c. 1975-present), the unions no longer had a monopoly on labor, since companies could now find labor in other countries. Labor could no longer enforce their favorable monopoly pricing. (They tried, and had some success in the US, but often the "victory" caused companies or factories that paid good wages to their workers to be uncompetitive with overseas companies or factories that did not, and forced to close.)
The bottom line is that I'm very much afraid that globalization and a rising middle class are mutually exclusive, and will continue to be so for several decades.
surprised the corporate agility theme doesn't explicitly include globalization displacing former US-based middle class jobs? globalization has positive economic consequences for the US as a whole, but not to key parts of the displaced middle class, at least not yet?
When Karl Marx wrote Capital in 1867, he said capitalism would never be able to get rid of credit bubbles, financial crises, high unemployment etc. He said that over time the problems would get worse and worse with greater and greater financial crises. Here we are about a century and a half later and you just have to look at the housing bubble, the bank crisis, TARP and the government bailout, unemployment in the US and Europe and the Arab countries which helped cause the Arab spring to see how prophetic he was in this respect.
Marx and Engels wrote that the world has seen five economic systems. Each system collapsed due to internal contradictions. The first system was hunting-gathering, then Babylonian/Greek/etc. style slavery, then feudalism, and then capitalism. They saw the Paris Commune as the harbinger for the next economic system which would replace capitalism.
The central contradiction in capitalism Marx spells out clearly in Capital, although its a little too much to explain in a comment. Basically workers create $240 of wealth every eight hour work day, but are only paid $200 a day. The $40 goes to profit, to get more capital, to make more commodities. But what is happening here - the worker is shorted $40 a day, and what happens with that money is commodities are made. Who are going to buy all these commodities when workers are not getting all the wealth they create? Well credit fixes that in the short term but creates a bigger long term problem.
The communist manifesto says "the commercial crises that by their periodic return put the existence of the entire bourgeois society on trial, each time more threateningly". I certainly feel this way. So apparently does Stratfor. On this point, the left and right are in agreement.
Marx, however, was and is historically inaccurate. Both in his understanding of the past and his predictions of the future. Check out Immanuel Wallerstein or Fernand Braudel for more accurate, careful, and relevant histories that're not just glorifications of the ruling class.
Looking at your example, it fails to explain why wages rose for 200 years before the alleged stagnation hit (sure, you can hack some Leninist stuff on about imperialism, but it's mostly unconvincing). Worse, Marx's grand scheme of progress is pretty flawed: even in one lifetime, people readily shift to and from one economic system to another, and each system relies upon and coexists with its predecessors and successors.
Wide swaths of life and economic activity aren't subject to what Marx described as capitalism, and as capital increasingly tries to squeeze more and more value out of people, people increasingly shift to using exit as a means of liberation. Look around you, and you can see it: that's what's most marvelous about the era we live in.
Braudel is a fantastic historian in his own right, but especially important in this context in that he started his career as an overt Marxist who wanted to contribute to Marx's theory by supplying the actual history on which it depended. That is to say, a history told not from the perspective of popes and princes, but one based on material data about the world's great systems; macro-economic factors like weather patterns and the price of grain. This was supposed to be the vantage point from which the nefarious dynamic of capital would reveal itself most clearly, with the underlying data providing an empirical basis for Marx's economic theory, thereby grounding the whole enterprise in reality.
As it turned out, materialist history did provide a very revealing perspective, but not the one Braudel anticipated. Quite the opposite. Among its many revelations was the unavoidable fact that Marx's assertions about history simply weren't supported by the facts. Over time, Braudel found his reverence waning. Eventually, his loss of faith turned into outright rejection. That said, were it not for Marx, Braudel's absolutely brilliant history may never have been written. And that would be a shame, since the materialist approach that Braudel pioneered has become more relevant than ever in our own data-driven age.
It warms my heart to no end that there's another Braudel fan here! =)
I didn't intend to come off as wholly dismissive of Marx--it's very fair to say that he's one of the great thinkers of political economy and sociology. But relying on 19th century thinkers when they've been surpassed always strikes me as unfortunate.
Anyone who thinks that the recent financial crisis is due to a fundamental failing of the free market just has not been paying attention, or has an ideological ax to grind. The latest economic crises are mostly the result of bad government policies and excessive government debt.
Government policies, perhaps, though mostly in the sense that it creates the regulatory environment that finance works in. But government debt? Hardly. It may have been a headwind due to issues in Europe, but the core cause was overleveraged financial firms.
Government policies are what created gargantuan financial firms who were in a position to overleverage themselves because they didn't think there was any risk in it. And low and behold governments bailed their asses out. In a more diversified market the companies that had overleveraged themselves would simply have gone under. More so, in a situation where the government had not put pressure on lenders to give loans to "sub-prime" borrowers, the whole mess would have never gotten so out of hand. Defaults would not have been so high, and real estate valuations would not have been so inflationary.
Additionally, we've pretty much gotten over that problem. The problem now is a sovereign debt crisis, especially in Europe, and that has little to do with the market.
That's a pretty interesting paper but I'm not convinced that the evidence presented backs up its conclusions. One of the things they do is measure various parameters relative to 7 different affordable housing goal criteria (such as loans to census tracts with median income of 80% or less than the median income of the metropolitan area). However, the authors don't seem to address the problem of separating the effects of each different criteria. Also, the data is fairly limited (only from 3 years, in 2 states) and they make some pretty strident assumptions. For example, they can't seem to find a possible causal link between the state of the real estate market in the mid 2000s and an increase in mortgages spurred by affordable housing legislation several years prior to their 2004-2006 window.
To me though it seems obvious that putting more people into the housing market, especially while it is experiencing a moderate boom would simply amplify that boom, as folks who managed to end up with some positive equity would work to maintain it, "flip" their properties, etc. As long as the market was always going up and people could generate positive equity just by sitting on their ass defaults were rare, because it would have been easy for people to sell their properties if they couldn't make payments in the future. Also, a lot of these mortgages were designed for flipping, having low payments early on before balloon payments later, making it easier to avoid default in the early years. On the other side of the equation, investors ate up securitized mortgages while the market was going up because they thought there was no risk. If people defaulted on their mortgages the properties would just be foreclosed on and since the property would inevitably have a higher market value than the mortgage, there was no downside for the investors. Which works just fine until the market reaches its breaking point and stalls out, after which people start going underwater on their mortgages, defaults increase, valuations fall, and everything goes to hell, as we saw.
The paper addresses the proposition of affordable housing legislation causing an excess in sub-prime lending just prior to the peak of the real estate boom. However, it fails to address the more important and more basic question of whether affordable housing legislation injected an excess of "unqualified" buyers into the housing market, distorting the market and leading to a bigger boom and a bigger bust.
However, as I mentioned, that whole mess (regardless of its cause) has only contributed a comparatively small amount to the much larger sovereign debt crisis that the world is facing now, which would take a lot of stretching to blame on the market.
It's actually a good example of the market working by correcting imbalances in the economy (agreed that the government is mostly responsible for those imbalances). You can either get the pain over with or stumble along zombie-style like the Japanese have been doing.
When AIG and Lehman went down, the crisis had already hit.
That's what was meant by "financial crisis".
The government actions to abilout AIG only happened after.
So you have your timelines backwards.
And the NINJA mortgage issuers (like Goldman's Countrywide) weren't issuing dodgy mortgages because the government was taking on the risk, they were doing it because they could offload the risk to chumps like AIG and Lehman.
Pure systemic free-market failure. Basically the banks were trusted to regulate themselves, and the risk controls all over New York, Frankfurt and London were pants. If we still had the heavy regulations of the 1970s, none of it would have happened.
Why does capitalism have to lift anyone out of poverty? The opportunity to own assets and control your own production sometimes provides the means to do so. Just because enough impoverished people are not becoming rich per year does not mean capitalism is not working as intended.
Evenly distributed across the world, you mean. The pressure discussed in this article and probably most of this thread doesn't have to do with that distribution, though. It has to do with the distribution in the US, which has most definitely skewed towards the top. Wealth might be on some trend to level out world-wide, but what's happening here right now and over the past few decades is not that global trend. It's an American trend.
The trend in the US has nothing to do with capitalism per se. We added ten million Central and South American peasants to the bottom end of the job market over the last twenty years or so. I don't know why anyone would be surprised to see a bifurcation of income strata.
Is it possible to travel and believe this 100%? Capitalism might be the best option but I'm not that confident after seeing the so-called progress it has inflicted on a lot of places. I don't know what a better option is, but I the warts of capitalism sure are ugly.
I mean that I have seen the opposite of progress. Native people with formerly proud cultures. Not technologically advanced, sure, but long traditions and ones anyone should be proud to have (or had, past tense, in this case). And these groups appeared completely devastated and exploited.
From your point of view, maybe. But these aren't museum exhibits. They're people. They want the same sorts of things the rest of us want, and they're willing to make adjustments.
Bit of a sloppy analysis... The $40 that the worker is "shorted" doesn't disappear into some magic portal that leads to another dimension where rich people secret it away from the economy. It goes to the workers at the bank, or to other businesses that get capital to pay their workers, or perhaps the owners of the company so they an buy a few commodities themselves.
I find HN to be quite rich, in both content and discussions about said content. I don't post because I usually don't have anything significant to add to the conversation.
I have to say though, your comment deeply disturbs me. Those weren't poisonous words. And I highly doubt that his comment, which seems quite informative, comes from his "dreams of a world made of slaves".
I can tell you're American. Constantly when I travel to the US, I get spoon fed this bullshit when people find out I'm Canadian. I have literally - on more than one occasion - had people tell me how they couldn't live in a "socialist" country like Canada. They then proceed to educate me (without any indication I want to hear shit about their opinions or beliefs) on the benefits of capitalism, how Obama is enslaving America, how universal health care is freedom lessening crap, and so on. It blows my mind the level of intolerance and subtle hatred.
He's just being part of the discussion, providing opposing information and some of his opinions. Chill the fuck out.
I assure you that your "burden" of having to "constantly" listen to Americans educate you about socialism is more than outweighed by people like you assuming we are all one homogeneous mass that behaves that way ("I can tell you're American" followed by a lecture about the "blow your mind" level of intolerance and hatred here, as if that is uniquely American)
I wonder how you maintain the cognitive dissonance that so many people here seem to hate Obama and Obamacare, yet somehow re-elect him. Must be confusing.
First, I didn't call it a burden so you can't exactly quote me as having said that. But it's cool, it is a pain in the ass so go for it.
Second, I don't think America is a "homogeneous mass that behaves that way" and neither did I say that. I said that this (getting to hear long-winded rants about political views, religion, social issues, etc.) occurs constantly when I'm in the US. You've confused my statement of anecdotal evidence as a statement of all encompassing truth. It isn't. I don't believe the majority of Americans are like this. I just think (note that word: think, not know, it's my opinion) you have a significant portion of people that are like this, are quite vocal about it, and aren't overly tolerant of differing opinions.
Third, I'm not confused and no simultaneously differing viewpoints are rolling around in my brain either. I didn't state my own opinions on the matter of Obama, capitalism, universal health care (bet you can guess where I stand on that one though), I merely stated MY experiences with the opinions of Americans I had ran into while traveling. Yes, you relected Obama. Cheers. 48.97% of people that voted didn't vote for Obama. Maybe the people I'm referring to are a subset of them, no?
My point is that I highly doubt you've met that many Americans, not enough to state an opinion on a "significant portion of Americans" at least -- hence my statement about judging us as a homogenous mass. Perhaps I should have been clearer: I suspect you are over-extrapolating. I also believe there are plenty of people from other countries with similar (and equally vocal) beliefs as well.
I visit Canada frequently, Nova Scotia to be exact, and in my time there I have run across some interesting viewpoints, but I would not pretend to have a firm grasp of any significant portion of Canadians. I understand it is one fairly isolated region, it is small, and I don't have full context.
Now, to give you some perspective, there are 310 MILLION Americans, which is 10 times more than Canada. I think people often don't realize this. There are as many people in California alone as all of Canada (more actually). Within the span of 9 hours we could drive and visit cities within California with such different ideologies you'd not understand how they can all operate together.
So excuse me for being highly suspicious of any person claiming they've met some Americans and thus reached some conclusion on how a significant portion of them think. Especially when normally something like this could just as easily be explained by confirmation bias and particularly vocal minorities.
I suppose my point is that I don't understand the need to bring "Americans" into this at all. You were having a discussion with one individual that you know little about, so what is the need to essentially say "I bet you are of nationality X for this negative reason". Outside of being a by the book presumptive and prejudicial position, it will also serve to alienate people that may otherwise agree with you.
I have visited plenty of other countries where people have expressed similar sentiments towards "socialism", Canada included. I'm not even sure why I'm bothering responding to this comment, it's so absurd and clearly blindingly biased. As if literally no one on earth other than Americans could dislike socialism that much.
He didn't say "Communism is great, let's all hold hands and dance in a circle around a big red star"; he said, "Marx claims capitalism and other systems have some flaws." There's a big difference between the two statements.
Your knee-jerk reactionism betrays you. Marx is capable of having some good--or at the very least, thought-worthy--points amid an ultimately flawed solution (communism). For you to dismiss a point by painting it with a "red menace" ad-hominem (not your words, but certainly their spirit) is, too, dangerous thinking--or perhaps lack of thinking.
No offense, but aren't you "pushing" an agenda as well? People are entitled to push their agendas in an open forum such as this. I, for one, welcome open and honest discussion in good faith.
That is all well and good. But is there a real world example of an economic and social system that works that is not based on capitalism? And by works here I don't mean just GDP, maybe also life expectancy, crime, health stats, education level, general happiness if available.
Basically if I get a free pass and resource to move anywhere, I where do I go find this "better" place that moved beyond Capitalism and is free of these contradictions.
I hear North European countries are a pretty good place to be? I've never been there. What makes that better and how far are they both from the current Capitalist system that US has and also how far are they from Marx's ideal?
> The central contradiction in capitalism Marx spells out clearly in Capital, although its a little too much to explain in a comment. Basically workers create $240 of wealth every eight hour work day, but are only paid $200 a day. The $40 goes to profit, to get more capital, to make more commodities.
The labor theory of value just doesn't make sense. The only system in which it does is a communist system. And even then, if somebody values the commodity more than the value of the labor that went into producing it, they'll pay that price to acquire it on the secondary market.
Basically workers create $240 of wealth every eight hour work day, but are only paid $200 a day.
But workers don't create that much wealth in a day by themselves; they need plant and material to create the product or service that is sold. The buildings they work in, the machinery that they use, the raw material they consume, are equally important inputs to production and it is these which are supplied by the capitalist.
I think Marx went into over simplification when it came to issues like these.
Even in this case, and in most cases. The workers are actually are super fortunate to even have and opportunity to make $200 without taking any risks at all. Everything is built ready, all the investments and risks are born by somebody else. All you do is work(Im not saying that's easy or insignificant, but it is individually insignificant to the larger scenario where somebody has built a big industry- your contribution are small but are compensated), and at that kind of financial security forgoing 1/6th part of your earnings is hardly a problem.
Marx was concerned with the differences between an agrarian society moving to an industiralized society and the implications it had for the control of wealth and power. Prior to industrialization, at least in the mind of Marx, individuals were able to effectively reap what they sowed on a farm somewhere (also an oversimplification, but still). In an industrialized era, one man at the time could not compete on his own for lacking capital, an education, and connections (put Marx into the context of his time and geopolitical background). Marx wasn't overly concerned with the issue of compensation of a capitalist being commiserate with the risk s/he takes, but rather the protection of individuals who now live in a world where they are, more likely than not, stuck working for somebody else.
While I don't really know about the particulars of his proposed solutions, I think Marx does identify a real problem that free-markets on their own do not guarantee solutions to.
It's never a bad idea to be on the look out to make sure our economy is working to serve everybody involved in it, at least in my opinion. That's my biggest takeaway from Marx.
Marx was actually not so much concerned with fair compensation as with fair distribution of power ( of which money is one aspect).
> The workers are actually are super fortunate to even have and opportunity to make $200 without taking any risks at all.
I think the most important point about Marx analysis is, that this statement may or may not be true. There is nothing in the 'capitalist production process,' which guarantees that the workers are treated well ( or even survive their workday). If the bourgeois gains a advantage by treating his workers well, he will do it. On the other hand, if he gains a advantage by hurting his workers then he will either do it, or be replaced by someone who is willing to hurt his workers.
I think an important detail to consider, if I remember it correctly, is that Marx is assuming that there's a moral imperative to consider when paying workers based on the value of their work because they aren't able to create this kind of value on their own in an industrialized society because the means of production is otherwise owned/controlled by a powerful establishment (bourgeois or something). An agreement between labor and management/capitalism is required to make sure that the workers' are able to take home a pay they find adequate considering the value they create. I think a way Americans have been able to strike this balance in the past is via labor unions. This probably isn't so much the case any more.
So the buildings get paid?
Marx did work under the assumption of the "Labor theory of value" [1], which states that only labor adds value to raw products, and that only humans are paid. So the price of a consumer product may be broken down into labor costs, raw material, R&D, long term investments etc. But each of the non labor points can be broken up further and in the end you end with only labor.
19th century economists did then follow this thought to construct the market backwards, that is some were trying to model markets based not on utility of a product and demand, but purely on labor costs.
No, the person who invested in the building and bought the machinery and raw material gets reimbursed and paid the opportunity cost of their investment, aka normal profits (as opposed to economic profits). I think the labor theory of value is one of Marx's main errors; it sort of works for agriculture because food does actually grow out of the ground, land was owned without being built, and in the 19th century the vast bulk of the expense involved was labor based, but this didn't translate well to industrial production at all.
I sort of agree, that the labor theory of value is one of the main problems of Marx's analysis. Sort of, because I think the premise that only people accept money and you always end up with profits or wages is essentially tautological. However, it is not a very useful way to think about (modern) markets, since one is too busy to trace back flows of money to actually understand their behavior.
Yes and no. Of the $40 the worker is shorted, a portion goes to the capitalist and a portion goes to the buildings they work in, the machinery they use and the raw material they consume. The benefits of those things accrue to the capitalist even though it was finance with the value created by the labor of the worker. Only the upfront costs to begin a business are attributable to the capitalist. All the growth of that business is attributable to the value created by the work being marshalled by the capitalist.
I'm not sure that the $40, as a percentage of wage, would even cover my sick and annual leave, professional indemnity insurance, insurance against accidental injury, professional body costs, registration costs, mileage and expenses claims, clothing costs, immunizations, continuing professional development costs and the other things I guess I have missed. My employer is good.
Agreed. but I would argue that a) the upfront costs to begin the business are significant, b) the benefits also accrue to the workers insofar as a growing business provides ongoing employment, and c) the marshaling of work is itself a form of work. It's not like you just tell 200 workers to turn up somewhere and production/distribution/sales happens automatically.
Plus, an individual worker might create $240 of wealth for the customer, or he might create $160, or he might create -$160. The big driver of the gap between value created and wage paid is the level of risk assumed. You cannot capture all the value you create in the economy without also capturing all the risk. People who try to do this are called "entrepreneurs" and they often end up insolvent.
Because if you say we should go down to zero profits, then we get nothing to invest further. Needless to mention the enterprise/corporation/etc itself will have no motivation for growth, why should they when there is nothing to gain?
Because socialism or communism works so much better right? People are especially envious of the great freedom people in North Korea are enjoying? Same as Cuba? Venezuela? Argentina? (wanna change your currency to another one in Argentina to hedge yourself against a very strong inflation? you can't, because the socialist state won't let you do that)
What's next after Karl Marx? That the homophobic racist murderer that was the Che Guevara was correct?
The thing that saddens me the most on a forum supposedly made of entrepreneurs trying to create wealth is to see that there are so many people who are still failing for the poisonous words of a corrupt few who would have just loved to rule the earth: be it Kim-Jong Ill or Kim-Karl Marx, it makes me very very scared.
The first thing socialists and communists tries to do is to ruin everyone and reinforce the power of the state.
I choose freedom. Even if it means bubbles and crises.
You know, a reactionary living in 19th century might have said "because democracy works so much better right? People are so envious of the great freedom people in France are enjoying." With the memory of the French Revolution fresh in their mind, they probably would have been reasonable to say so.
That's tricky, because it's not so much a question of successes relative to the past (which I assume you'd agree are many) but a question of successes relative to alternative worlds where a capitalist system had developed in those countries. And there's also a question of what counts as communism/radical socialism in your book--China, even now, has far more government involvement in the economy than many Western countries, and even more so under Deng. Does it count? What about Congress-style socialism in India?
That said, and emphasizing I have no love of the following countries and think some form of liberal democracy would have worked substantially better...
Cuba started from a fairly good baseline, so we shouldn't read too much into it, but it has superior healthcare and education to much of Latin America.
The Soviet Union had a couple decades of breakneck economic growth: many economists, perhaps even the majority, expected it to have outgrown the West by the 1980s. This should be discounted somewhat, though, this time because the UK and the USA also rapidly developed at various points in their history.
The USSR also excelled at generating a large class of engineers, scientists, and mathematicians, who contributed a large body of knowledge to the world. And it made some pretty good chess players, too, when it wasn't cheating like crazy.
My point is that if you sat there in 1800 and looked at the track record of democratic/republican revolutions at that time, you'd come to a different conclusion than if you did so in 2012.
Reaching for extreme examples at the outset is a sign that something is amiss with your argument.Observing that capitalism might have structural flaws is not a call for the implementation of soviet-style communism, and your ideological tone is debasing the discussion. Please chill out, and show a little more respect to other participants.
Your comparison of North Korea with Marx shows unequivocally that you don't have any clue what you're talking about. It is actually laughable how wrong you are. Maybe you should read some Marx before dismissing something you don't know the first thing about.
Afraid of ideas and discussing them, eh? You've also thrown together several orthogonal concepts, displaying a lack of understanding common to folks who watch too much corporate television.
I seriously doubt that Karl Marx would have approved of North Korea. Just because someone calls themselves 'Communist' doesn't necessarily mean it's so. There are plenty of dictatorships that call themselves "The Democratic Repubic of X" or something like that. Just because democracy is in the name doesn't make them democratic.
(Oddly enough, Marx probably would have approved of the Khmer Rouge. He was really into violent upheaval to transition between forms of government.)
| The first thing socialists and communists tries to do is to
| ruin everyone and reinforce the power of the state.
|
| I choose freedom. Even if it means bubbles and crises.
|
| "Better dead than red".
This just seems to be an opinion born of privilege. Would you adhere to "better dead than red" if the death came from starving in the streets (while people born into money like Paris Hilton live it up) rather than some romantic idea of fighting off foreign invaders and living in the hills (i.e. Red Dawn)?
If we move to a system where half of the country is either stagnant or losing ground while the other half is surging, the social fabric of the United States is at risk, and with it the massive global power the United States has accumulated.
Translation: If half the US citizenry is utterly suffering, we won't be able to keep drone-bombing Yemeni infants, Oh the horrors!
You'd think that preventing the suffering of half of the USA might be an aim in itself.
Also, what's wrong with leaving the Yemeni children alone? Oh, I forgot, we want to provoke more terrorism. Maybe even hit the jackpot and start World War 3.
Ah that's the classic propaganda line:
...So I sure don't want to vote for anything that would jeopardize my wealthy position when I get there.The key in all of this is ability to manipulate the people into believing and voting in a particular way. US has no shortage of zombies who don't think on their won. Blame the education system, blame the system as a whole, I don' t know. As long as people don't base their votes on reality they will end up voting against their own good because they are being manipulated.
Basic health care, tax cuts for the super rich, trickle down wealth, futile wars, all this things are being delegated (via votes) from un-informed people to the politicians via a manipulative process. I see this within my own extended family, I see it on the streets, in the stores, in school and at work.