With austerity biting hard across Europe….

The richest country in the world, which is also the biggest proponent of capitalism can’t prevent huge areas of its major cities degenerating into slums.

This I have some sympathy with. And it might not get better until the Chinese get wealthy enough that they price themselves out of their own manufacturing markets.

…..and we only have one little planet that isnt getting any bigger.

I’d argue that the increased openess that comes from international contact and trade will only improve that situation.

I’d argue that creating an unserviceable demand for *stuff* will completely F*@K us.

Why would more of the same lead to a different outcome?

You do realise that there are many models of capitalism, right? Why should it be more of the same?

You do realise that there are many models of capitalism, right?

Please elucidate further.

😆 did I turn your perfect little Free market world upside down Mcboo? Bless.

Some peoples lives” = Actually hundreds of millions of people lifted out of grinding poverty.

Some people. People like you. Not everyone in India and China will share in this Nirvana, much like those in the west.

Are you blaming Western liberal democracy for Chinese totalitarianism? Do you want to try again?

Not for creating it. But for getting into bed with it. People like you seemed to think that by implementing free trade and the like with China that it would somehow turn Democratic, or should I say capitalist. That was the post cold war thinking of the 90’s.

Instead, all it taught the leadership of China was to have its cake and eat it. One party state that play the capitalists at their own game. All thanks to your greed.

The same goes for Russia. At least they make the effort of holding rigged elections for their one party state.

Please elucidate further.

Well,
you got the, “I’m bigger than you so I’m taking everything”
the, “I’m still bigger than you but if you keep your nose clean, I’ll give you some if you work most of your time for my good”

not forgetting the famous money trick

“Money is the cause of poverty because it is the device by which those who are too lazy to work are enabled to rob the workers of the fruits of their labour.’

‘Prove it,’ said Crass.

Owen slowly folded up the piece of newspaper he had been reading and put it into his pocket.

‘All right,’ he replied. ‘I’ll show you how the Great Money Trick is worked.’

Owen opened his dinner basket and took from it two slices of bread but as these were not sufficient, he requested that anyone who had some bread left would give it to him. They gave him several pieces, which he placed in a heap on a clean piece of paper, and, having borrowed the pocket knives they used to cut and eat their dinners with from Easton, Harlow and Philpot, he addressed them as follows:

‘These pieces of bread represent the raw materials which exist naturally in and on the earth for the use of mankind; they were not made by any human being, but were created by the Great Spirit for the benefit and sustenance of all, the same as were the air and the light of the sun.’

… ‘Now,’ continued Owen, ‘I am a capitalist; or, rather, I represent the landlord and capitalist class. That is to say, all these raw materials belong to me. It does not matter for our present argument how I obtained possession of them, or whether I have any real right to them; the only thing that matters now is the admitted fact that all the raw materials which are necessary for the production of the necessaries of life are now the property of the Landlord and Capitalist class. I am that class: all these raw materials belong to me.’

… ‘Now you three represent the Working Class: you have nothing – and for my part, although I have all these raw materials, they are of no use to me – what I need is – the things that can be made out of these raw materials by Work: but as I am too lazy to work myself, I have invented the Money Trick to make you work for me. But first I must explain that I possess something else beside the raw materials. These three knives represent – all the machinery of production; the factories, tools, railways, and so forth, without which the necessaries of life cannot be produced in abundance. And these three coins’ – taking three halfpennies from his pocket – ‘represent my Money Capital.’

‘But before we go any further,’ said Owen, interrupting himself, ‘it is most important that you remember that I am not supposed to be merely “a” capitalist. I represent the whole Capitalist Class. You are not supposed to be just three workers – you represent the whole Working Class.’

… Owen proceeded to cut up one of the slices of bread into a number of little square blocks.

‘These represent the things which are produced by labour, aided by machinery, from the raw materials. We will suppose that three of these blocks represent – a week’s work. We will suppose that a week’s work is worth – one pound: and we will suppose that each of these ha’pennies is a sovereign. …

‘Now this is the way the trick works -’

… Owen now addressed himself to the working classes as represented by Philpot, Harlow and Easton.

‘You say that you are all in need of employment, and as I am the kind-hearted capitalist class I am going to invest all my money in various industries, so as to give you Plenty of Work. I shall pay each of you one pound per week, and a week’s work is – you must each produce three of these square blocks. For doing this work you will each receive your wages; the money will be your own, to do as you like with, and the things you produce will of course be mine, to do as I like with. You will each take one of these machines and as soon as you have done a week’s work, you shall have your money.’

The Working Classes accordingly set to work, and the Capitalist class sat down and watched them. As soon as they had finished, they passed the nine little blocks to Owen, who placed them on a piece of paper by his side and paid the workers their wages.

‘These blocks represent the necessaries of life. You can’t live without some of these things, but as they belong to me, you will have to buy them from me: my price for these blocks is – one pound each.’

As the working classes were in need of the necessaries of life and as they could not eat, drink or wear the useless money, they were compelled to agree to the kind Capitalist’s terms. They each bought back and at once consumed one-third of the produce of their labour. The capitalist class also devoured two of the square blocks, and so the net result of the week’s work was that the kind capitalist had consumed two pounds worth of the things produced by the labour of the others, and reckoning the squares at their market value of one pound each, he had more than doubled his capital, for he still possessed the three pounds in money and in addition four pounds worth of goods. As for the working classes, Philpot, Harlow and Easton, having each consumed the pound’s worth of necessaries they had bought with their wages, they were again in precisely the same condition as when they started work – they had nothing.

This process was repeated several times: for each week’s work the producers were paid their wages. They kept on working and spending all their earnings. The kind-hearted capitalist consumed twice as much as any one of them and his pile of wealth continually increased. In a little while – reckoning the little squares at their market value of one pound each – he was worth about one hundred pounds, and the working classes were still in the same condition as when they began, and were still tearing into their work as if their lives depended upon it.

After a while the rest of the crowd began to laugh, and their merriment increased when the kind-hearted capitalist, just after having sold a pound’s worth of necessaries to each of his workers, suddenly took their tools – the Machinery of Production – the knives away from them, and informed them that as owing to Over Production all his store-houses were glutted with the necessaries of life, he had decided to close down the works.

‘Well, and what the bloody ‘ell are we to do now?’ demanded Philpot.

‘That’s not my business,’ replied the kind-hearted capitalist. ‘I’ve paid you your wages, and provided you with Plenty of Work for a long time past. I have no more work for you to do at present. Come round again in a few months’ time and I’ll see what I can do for you.’

‘But what about the necessaries of life?’ demanded Harlow. ‘We must have something to eat.’

‘Of course you must,’ replied the capitalist, affably; ‘and I shall be very pleased to sell you some.’

‘But we ain’t got no bloody money!’

‘Well, you can’t expect me to give you my goods for nothing! You didn’t work for me for nothing, you know. I paid you for your work and you should have saved something: you should have been thrifty like me. Look how I have got on by being thrifty!’

The unemployed looked blankly at each other, but the rest of the crowd only laughed; and then the three unemployed began to abuse the kind-hearted Capitalist, demanding that he should give them some of the necessaries of life that he had piled up in his warehouses, or to be allowed to work and produce some more for their own needs; and even threatened to take some of the things by force if he did not comply with their demands. But the kind-hearted Capitalist told them not to be insolent, and spoke to them about honesty, and said if they were not careful he would have their faces battered in for them by the police, or if necessary he would call out the military and have them shot down like dogs, the same as he had done before at Featherstone and Belfast.

Robert Tressell, ‘The Ragged Trousered Philanthropists’

So the IB puts on his good old 33 again…..who’s singing today Dusty Springfield, Mungo Jerry, Edith Piaf?

How inconvenient that income inequality is a global problem affecting economies across the economic and political spectrum. How inconvenient that the levels of income inequality when Vanderbilt built the railways over a century ago dwarf what exists today. How inconvenient that Argentina has higher levels of inequality than the UK (if the stats are to be believed – a big assumption).

Far more importantly, people are trying to do things about it and interesting for the first time (ever?) income inequality was a headline issues at the World Economic Forum in Davos this weekend. Why? Because it is a global problem with a strongly re-inforcing mechanism that needs to be broken? Why, because it is an issue for which neither economics nor politics has an easy answer. Economics is great at devising indices and measures to illustrate the problem but weak in explaning “the why?” or what to do about it.

Perhaps most interesting of all, an article in today’s FT describes how at the end of the Open debate which involved people of many persuasions including representatives of the Occupy movement there were two votes – 66% of people though that “capitalism was not working” and then 90% thought that it “could be fixed”. A failure of what…..?

The article goes on to describe how among the extremes of debate came a sensible consensus that all systems need to achieve a better balance between growth and stability and growth-for-the-sake-of-growth had taken the global economy to the brink to many times.

Don’t forget who are (some of) the people who have done so spectacularly well over the past 25 years – the bankers and the hedge fund managers. And then wonder (not for too long) that if the world’s most important central bank prints money and at the same time keeps interest rates down in the belief that this will create permanent prosperity (what type of rational economics is this?), that those who can access money at no cost, will do so, some of them will be spectacularly successful. And even a socialist (sic) government in the UK will fail to prevent this.

Please elucidate further.

There’s a sliding scale from pure free-market (zero taxes, no public services, public ownership or public regulation) to somewhere near socialism.

Some people. People like you

Its only just gone noon and we already have our second member of the STW Flat Earth Society. El-Bent and TJ and a big pile of magic beans.

Where is TJ anyway? He was about to explain how India started to get wealthy after 1991 but it had nothing whatever to do with economic liberalisation.

We seek him here we seek him there….

Not for creating it. But for getting into bed with it. People like you seemed to think that by implementing free trade and the like with China that it would somehow turn Democratic, or should I say capitalist. That was the post cold war thinking of the 90’s.

Instead, all it taught the leadership of China was to have its cake and eat it. One party state that play the capitalists at their own game. All thanks to your greed.

Rubbish. It is, slowly, turning democratic. People are starting to protest, corrupt officials are slowly being held to account, and a large part of that is only possible due to the rising wealth which is making uncensored communication available.

Don’t forget though, for every action , there’s an equal and opposite reaction

There are plenty of western governments looking very enviously at the Chinese leaderships ‘best of both worlds’ solution. And as everyone knows, times of economic crisis are the perfect cover for driving through unpopular policies.

We know have 2 European countries that have effectively been ordered by an unelected ‘commission’ to suspend democracy

There’s a sliding scale from pure free-market (zero taxes, no public services, public ownership or public regulation) to somewhere near socialism.

And where on this sliding scale do “we” need to be for everything to be marvellous?

You see, you started talking about capitalism in it’s widest sense, and then when I joined in in the same vein, talking about capitalism generally, you suddenly seemed to think that it was important that we start considering exactly what types of capitalism we mean.

So you go first, precisely which are the bad types of capitalism that have got us in this mess, and which are the good types of capitalism that are going to get us out of it?

RPRT – exactly, its important to be precise. So here is a simple example (repeating myself sorry). Better “capitalism” – the banking model/strategy employed by Standard Chartered, Worse “capitalism” – the banking model/strategy employed by RBS. Same time, same environment, different PEOPLE, different result.

Five years ago SC share price near £10 today near £16, RBS share price £5 today 26p.

Have a listen to their “capitalist” CEO this weekend:

You see, you started talking about capitalism in it’s widest sense, and then when I joined in in the same vein, talking about capitalism generally, you suddenly seemed to think that it was important that we start considering exactly what types of capitalism we mean.

I started talking about types of capitalism precisely because the term wasn’t being used in its widest sense, but rather using a very narrow definition similar to that proposed by the Tea Party.

So you go first, precisely which are the bad types of capitalism that have got us in this mess, and which are the good types of capitalism that are going to get us out of it?

OK, I think a mixed-economy is the best bet, I don’t agree with the way the current austerity measures are being brought in, but I do think that the previous level of government spending was unmaintainable. What do you think?

Mogrim – can you list those economies that are not “mixed economies” today?

I think I’d better get on with some work.

I’ll come back later though.

But just to be going on with, I’m not sure that there is any sort of capitalism that doesn’t concentrate wealth into the hands of fewer and fewer people.

And I’m against that in principle.

rightplacerighttime – Member
But just to be going on with, I’m not sure that there is any sort of capitalism that doesn’t concentrate wealth into the hands of fewer and fewer people.

And I’m against that in principle.

When you come back maybe tell us why it matters if some people get very rich if lots of other see real and lasting improvements in their lives. Me I’m disgusted that the average compensation of a FTSE100 director went up by 49% last year. What on earth for? Have they no idea what is going in the economy? I’m an economic liberal but that kind of thing makes me want to reach for a pitchfork. That doesnt mean the whole system is wrong though, it suggests we need to break down so cosy cartels in the boardroom.

Your one redeeming quality Mcboo is your sense of humour, you have to have one to believe what you do.

Rubbish. It is, slowly, turning democratic. People are starting to protest, corrupt officials are slowly being held to account, and a large part of that is only possible due to the rising wealth which is making uncensored communication available.

It’s smoke and mirrors.

can you list those economies that are not “mixed economies” today?

There isn’t one I can think of, but the mixes are different. In this country we are heading more towards the free market for everything end of the spectrum. Not good.

In terms of the other mix, too much financial services too little else.

Your one redeeming quality Mcboo is your sense of humour, you have to have one to believe what you do.

I’m also un-approachably handsome. And modest.

What do I do exactly chap? Professional orphanage burner?

Me? I needed some sleep.

Those like McBoo that are wedded to the capitalist model fail to grasp that just because a state is called socialist it does not mean it is socialist. To call China and India (ex) socialist / communist states is simply wrong. They never have been such. China was totalitarian and India an odd mish mash of stuff.

Me I’m disgusted that the average compensation of a FTSE100 director went up by 49% last year. What on earth for? Have they no idea what is going in the economy? I’m an economic liberal but that kind of thing makes me want to reach for a pitchfork. That doesnt mean the whole system is wrong though,

Errmmm – it clearly does

How many of these evil FTSE100 companies are homes to public pension schemes? I assume they invest their money somewhere.

I’m with uncle Jezza on this one. Lets put aside the whole equality arguament

The main problem is that there is no longer the remotest link between a companies performance, and the subsequent rewards for the people at the top.

The disconnect is total!

I can do this all day

The word socialist was added to the Preamble of the Indian Constitution by the 42nd amendment act of 1976, during the Emergency. It implies social and economic equality. Social equality in this context means the absence of discrimination on the grounds only of caste, colour, creed, sex, religion, or language. Under social equality, everyone has equal status and opportunities. Economic equality in this context means that the government will endeavour to make the distribution of wealth more equal and provide a decent standard of living for all.[citation needed]…

Following independence, the Indian government officially adopted a policy of non-alignment, although it had an affinity with the USSR. The party’s commitment to socialism has waned in recent years, particularly following the assassination of Indira Gandhi and her son Rajiv Gandhi. Elected in 1991, the government of Narasimha Rao introduced economic liberalisation with the support of finance minister Manmohan Singh, the current prime minister of India.

WHat – find dubious quotes that label something as something it is not?

USSR claimed to be socialist but never was, same as China.

You can keep a cat in a kennel and call it rover but it remains a cat.

Surely given the fact that we’re talking about pay for the directors of the companies that are in the FTSE 100, the argument that there is a disconnect between their performance and reward is pretty fragile.

If their performance wasn’t good, they wouldn’t still be in the FTSE 100, would they 😉

As a matter of interest, its also worth noting that while the average may have been 49% – the median payrise for the FTSE 100 (yep, the top hundred companies) was 16%

So, half the people who run the top 100 companies got less than sixteen percent – A nice payrise admittedly, but, well, you must be doing something right to keep your company in the top hundred, mustn’t you 😉

mcboo – Member
We live in an amazing time…..literally hundreds of millions of people in India and China are being lifted out of absolute poverty in a process that has been going on for 20 years and continues to accelerate.

a wide range of anti-poverty policies have been introduced since the 1950s, which nonetheless started to prove effective only 20 years later. If the decline in poverty went from 60% to 35% between the 70s and the early 90s, globalization and liberalization policies made this trend go backward throughout the 90s.

http://www.poverties.org/poverty-in-india.html

USSR claimed to be socialist but never was, same as China.

You can keep a cat in a kennel and call it rover but it remains a cat.

Well, you keep claiming the UK is a capitalist country TJ – but you and I both know that deep down its not, is it? If it was, you wouldnt be working for the NHS, would you 😉

Zulu-Eleven – Member

Surely given the fact that we’re talking about pay for the directors of the companies that are in the FTSE 100, the argument that there is a disconnect between their performance and reward is pretty fragile.

If their performance wasn’t good, they wouldn’t be in the FTSE 100, would they

That’ll come as a relief to Lloyds Group and RBOS I’m sure.

wow
ok yeah can we hold up just for a min

and agree that however we look at it theres gonna be problems for us all no matter what the reasons are… welfare state dismantled, price of living going nuts, unemployment through the roof, massive black economy…

(this is the situation in europe right now… i live in france and all these issues are on the mainstream news every day)

so my question is:

what the **** can we do on an individual level about it??

and before the inevitable

‘we cant do anything, hands tied, gotta pay the mortgage… the kids the pensions etcetc…

if not now then when?? when its too late? cause in much of europe… the ‘siesta’ economies in particular, its happening now dammit and the uk will not be far behind IMHO.

for my bit ive:

1. just sold my van (price of fuel up a few cents every week for the last 6 months) and am not buying another vehicle

2. veg garden now twice the size with a new polytunnel… food costs are going up in a similar way to fuel price here in france.

3. bought our house outright (this isnt quite so obvious now but… negative equity plus the instability of french banks could lead us into trouble i feel)

4. invested in a bunch of bike consumables (its our main form of transport and i can future proof it to some degree and do the work myself)

5. bought a wood fired range to get us off the gas (sh!t the price of gas at our last refil ?!@?£!)

so thats a start, i ve gone for the ones which have an immediate economic benefit, are sustainable and i think improve our quality of life…at any rate they stop me worrying all the time about whether we can continue to afford the next quarters bills.

so folks give me some solutions please, we all need em i reckon…

I’d start on the DIY[/url]

teamhurtmore – Member

Ernie, you are finally getting it. As you said, the economists who screwed up….and economist are …..people…..finally a eureka moment has arrived.

Your inability to pay attention is worrying hurty, I hope you are more diligent in your paid work.

It is you who makes a distinction between capitalism and capitalists, not me. According to you : “history will tell us that we have seen a failure of capitalists rather than capitalism”. So let me repeat once again what I have previously told you :

ernie_lynch – Member

The fact remains you claim that there was nothing wrong with the economic model in place in 2008 (whatever you like to call it) and it was only the people who were at fault. Firstly almost no one agrees with you hence the propping up of failed institutions, introduction of quantitative easing, etc, all of which was in direct contradiction to the existing protocols. And secondly ‘the market’ is a wholly man-made entity, if the people who operated within it were wrong, then so was the system. You can’t distinguish the two.

As I said, blaming the capitalist and not capitalism is a cop out and an obvious attempt to remain in denial of the unpalatable truth that something which you believed in turned out to be flawed.
Posted 2 days ago

See ? I completely disagree with your claim that “it was only the people who were at fault”.

Of course Thatcher, Reagan, Blair, Bush, Brown, and all the economists who advised them, including Friedman, were wrong. Because they put their complete faith in capitalism, a system which is inherently flawed. And they were not just wrong, but spectacularly wrong, because they went much further than anyone had previously with their “neo” liberal economic policies.

According to them capitalism is so perfect that all that was required was for all government intervention and “red tape” restrictions to be removed, and a liberated unregulated free-market capitalism would prosper for the good of all (of course they never actually believed that, but that at least was what they argued, and voters swallowed it hook line and sinker)

History has proved them to have been utterly wrong, capitalism is deeply flawed and allowed to run amok it will screw itself. At least John Maynard Keynes recognised this undeniable fact, and offered practical solutions to minimizes the worse effects of a flawed system which cannot be trusted.

The tragedy is that despite the overwhelming evidence that anti-Keynesian economics is not a solution to anything, many western governments still appear hellbent, after a brief lull, in trying to offer it as the only solution. Apparently you can overcome the fact that unemployment doesn’t work, that screwing people’s wages doesn’t stimulate demand, and that austerity makes a bad situation worse, by simply having “faith” and ignoring history. And where governments lack the willingness to implement futile economic policies which lack any public support, the bankers have even been successful in having them removed and replaced by their own unelected handpicked team.

And guess what, they don’t learn. So history repeats itself a decade or so later in Greece.

Listen hurty if you want to lecture me on Marxism then at least give the geezer some credit and attribute the quote to him, and quote him fully :

“History repeats itself, first as tragedy, second as farce” Karl Marx

Welcome to the farcical age.

ernie_lynch – Member

Your inability to pay attention is worrying hurty, I hope you are more diligent in your paid work.

Ernie – you are meant to put smilies after ironic comments!! Your whole post is showing a complete lack of diligence with regards to what I said. Never mind, its boring now!

Indeed I do make the distinction between capitalists and capitalism and Keynesians and Keynesiasms for very good reason.

It is indeed a shame that there is so much anti-Keynesian sentiment around – policies that work when you have a flat LM curve. Trouble is the people who implemented Keynesian economics did it so poorly that its strengths are no ignored just when they are most needed. Did you go and read Ball’s speech?

Go back to UK economic history and you will see how “people” implemented Keynes’ policies badly – Tories and Labour governments. Surely you remember the phrase – “Stop, Go”? Then they mis-represented it as wanton spending – poor old JMK must be turning in his grave.

But there is no need for anyone to worry – we are all in the safe hands of President Barosso. His presentation today makes you feel so much better?!?? 😕

http://ec.europa.eu/commission_2010-2014/president/pdf/20120130_jmbpresentation_en.pdf

OOI – where was there any reference to Marxism? Actually don’t bother, it REALLY is boring.

Listen hurty if you want to lecture me on Marxism then at least give the geezer some credit and attribute the quote to him, and quote him fully :

History repeats itself is not necessarily misquoting Marx.

all that was required was for all government intervention and “red tape” restrictions to be removed, and a liberated unregulated free-market capitalism would prosper for the good of all

History has proved them to have been utterly wrong, capitalism is deeply flawed and allowed to run amok it will screw itself.

Sorry Ernie – are you saying that we achieved that? We really achieved a state where all government intervention was removed?

I mean, if we’d achieved that, and it fell apart, then you might have a point, but all you’ve demonstrated is that a market with continued government intervention failed – if there had been a truly influence free market, we wouldn’t have bailed anyone out, would we.

I could just as easily comment out that a communist system failed, and you’d (rightly) reply “aha, but there’s never been a truly communist system”.

Its a pointless allegation

… more slaves about? 🙄

wha
like the ol type o slave
or maybe a wage slave
how about sex slaves

😉

Hurty you appear to be under the impression that keynesian economics is some sort of panacea for capitalism, it isn’t. Although I have to say that I don’t recall you ever putting forward a keynesian argument on here, you always appear to fully back the present government’s neoliberal alternative to Keynes. You seem to be all over the place mate, still, never mind.

But no, it’s not imo so much a question that “the people who implemented Keynesian economics did it so poorly”, it’s more a case that keynesian economics is far from perfect, it still relies on capitalism. It just tries to deal with the failings of capitalism in a more manageable way, which it does quite successfully, as it happens.

But you still get serious problems in capitalists economies whichever model they use. The most advanced and successful capitalists economies can expect not much more than say about 10 years of economic stability – maybe 20 years, top wack. The less successful ones can expect to be more or less in a permanent state of crises. All of which is piss-poor to say the very least.

So yeah, it was the failings of social-democracy which paved the way for the monetarist/anti-keynesian alternative. Although ironically and paradoxically it was also the successes of social-democracy which paved the way for monetarist/anti-keynesian governments. The improved wealth and standard of livings which were the result of social-democratic policies created a new class of individuals with high levels of expectations. The monetarists successfully tapped into this and appealed directly to their personal greed at the expense of the common good. Soon they resented paying taxes and were seduced by such things as buying their council houses at giveaway prices. They had done well under social-democracy and now they become greedy and just simply wanted more.

So anyway, basically however much you tinker with capitalism it still remains inherently flawed. None of which of course detracts from the fact that social-democracy is immeasurable more desirable and successful than brutal neoliberalism.

BTW I wasn’t talking about “misquoting Marx” mogrim, I was talking about crediting the quote to him and quoting him fully. And I’m pretty sure he was the first to point out the farcical nature of how history repeats itself. And also I’m fully aware that hurty wasn’t lecturing me on Marxism……I just wanted an excuse to quote Marx and point out that Marx had said much the same thing 😀

Good article in this month’s Prospect magazine about this.