One of the problems I see in Iceland which I think is an urgent problem for "an economics of the left" or "heterodox economics" to consider is... how can a place like Iceland grow?
Part of the reason the Friedmanite gospel was so enthusiastically embraced was that it offered a small island in the North Atlantic with limited trade resources a way to greater prosperity.
Fish and wool are just not the engines of wealth-bringing trade at this moment. The green (thermal) power makes life in Iceland more sustainable, but it's not something you can export.
Now I'll agree that no-one in Iceland has an intrinsic right to afford Range Rovers and other status symbols that the owners of the privatised banks in particular seemed to love...
Still... does an "economics of the left" really hold out anything more than the decline of resource-poor regions?
Question based on top quote: Are you defining "the good life" as being able to afford "Range Rovers" etc, . Are Range Rovers even useful, practical in Iceland's environment or would it just be a status symbol?
Question based on bottom quote: The "decline" that you are concerned about ... is this simply the loss of the ability to have wall-to-wall Range Rovers or are we talking about having nothing to exchange for the basics ... food, fuel, etc.?
Time to start questioning the ASSUMPTIONS, one of the beginnings of change. Now where's the fun in that! - Megatron
I guess I didn't express it clearly.
I'm saying that there is no reason to build particular "earth-killing" status symbols into an economic model.
However... I'm also saying food and fuel is not enough!
Is there a mechanism in leftist economics for countries who have limited resources to move beyond subsistence living?
For people - there's redistribution, safety nets and education. But we haven't begun to develop these things seriously for countries...
It's mostly a point about why the Friedmanite model is psychologically appealing if you don't live in a big country with lots of resources...
OK, good place to start.
Question: The US loves to enhance its standard of liveing through (what I would define as) illegal means; example, invasion of Iraq to secure crude oil resources. Are you allowing for illegal/immoral "mechanisms"? If not, that's cool. Just asking questions. Now where's the fun in that! - Megatron
Obviously, not Range Rovers, but perhaps relatively sophisticated manufactured goods? Ovens, refrigerators, washers--standard appliances that are truly labor saving and improve the quality of life. Another level of wealth would be those thing which are entertaining and useful in drawing us closer to the larger world, computers, routers, televisions, radios, etc.
Robert Wright postulated in NonZeroSum that the world was on an evolutionary course toward greater knowledge /complexity, effected, as he saw it by more tightly intergrated transportation and communication mechanisms, those in turn were driven by man's natural propensity to trade. In his view, trade was an underlying mechanism--rather like natural selection--that was a driving force for social evolution.
Of course, as we all know, if we've read our Gould, there's no reason to suggest that evolution has any real 'goal' or purpose. Biology is not necessarily teleological. We just like to think of ourselves as an obvious endpoint, rather than say the horse (I'd personally argue that bacteria could make a greater claim as a 'sucessful' species, but I digress) So arguments about the mechanisms of 'trade' as evolutionary and good and leading to the glorious flat world (qua T. Friedman and M. Friedman) are just that--arguments. There's nothing to suggest that a society--or collection of societies --that manage to trade excessively and create lots of stuff -- is actually better suited for survival than a society that trades less, has less of those things we call 'wealth' but perhaps prioritizes their cultural so that communication and knowledge exchange is highly valued, material exchange, not so much.
So I'm thinking the idea of wealth needs to be understood outside of a commoditized context. Wealth is not necessarily 'a thing', wealth can perhaps better be thought of as a comfortable relation between the physical world and ourselves; and that comfort should be thought of in both pyschological and physical terms. For example I think there are huge pyschic imbalances in the western world view that sees animals, land and water as a means towards wealth generation and not an end in and of itself. When metatone described the idea of 'subsistence' living, as some how 'not' wealthy, I was struck by how fundamentally locked into the idea of 'wealth as things' we are. I think if we're going to survive as a species (which I am deeply in favor of) we need to move beyond that view.
Question: What is the "good life" that people are striving for?
YES YES YES !!! Now where's the fun in that! - Megatron
interesting diary...of course friedman's voodoo looked good, laying in the hot springs wishing you could vary your rotted shark diet, and wondering what your home would be worth if glossy malls and phat SUVs started springing up everywhere...
like alchemists of old, turn dross into cash, baby, live now, pay later, it's magic, look we're real first-worlders now.
as goes iceland today, so will go england tomorrow.
over-populated, resources inadequate and abused, self-sufficiency will have to take over from lying for money phancy phinancial shervices as prime national priority.
and a better country will ensue, once the corner's turned...
and the icelanders will get back in their free sulphur-water and get back to phantasising about the next cargo cultist who will come along and show them how to be real players in the Great CON Game.
they might still have the last laugh, as england struggles to make enough hot water to keep 60,000,000+ people clean, beating old range-rovers into solar water heaters in the rain, or gathering peat on the windy moors or salty bogs to warm their wee hearths!
i wish i could be sure that this cycle will not rpeat itself ad infinitum, seems people are historically always suckers for a get-rich-quick scheme, the great free lunch in the sky...
maybe we'll write an epic saga so spielbergian, so wagnerian it will be chanted for millennia around our mugs of lichen tea as we huddle cosily in our igloos, barding and quothing and quaffing away:
"beware of the silver-tongued economists, with their smooth come-ons, rolex watches and pretty, pretty lies.
when they whisper sweet nuthins about how they'd like to mortgage your mother and privatise your ass, tell 'em to take a long hike on a short glacier, and come back when they get a clue."
it's the LORE, adapt or migrate! ~Government budget deficits are not nearly as dangerous as the deficits we have created in vital and complex natural systems.~ Naomi Klein.
An ET classic.
melo:
Lichen tea....priceless....
a long hike on a short glacier...
I almost choked on my croissant.... "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Lay down with me Tell me no lies Just hold me close- Don't patronise
------Don't patronise.
-Bonnie Raitt
From another Bonnie Raitt fan. Capitalism searches out the darkest corners of human potential, and mainlines them.
my heroine...
the person i would most like to meet and jam with.
bar none ~Government budget deficits are not nearly as dangerous as the deficits we have created in vital and complex natural systems.~ Naomi Klein.
what were you playing?
if you remember...
:) ~Government budget deficits are not nearly as dangerous as the deficits we have created in vital and complex natural systems.~ Naomi Klein.
If it is, for technical reasons, impossible to maintain what any given day and age would consider a prosperous society in a certain geographic area, the obvious solution is to either transfer wealth from areas that are more hospitable to the development of what is considered a prosperous society, or transfer people the other way.
I'll assume that forced transfer of people is out of the question, but there is little reason in principle that voluntary movements should be discouraged (although there may be practical barriers that need to be overcome, such as language differences or issues related to labour rights). Bulk transfer of wealth to poor districts is a routine part of what states do.
As an aside, it's sometimes the case that the borders themselves, rather than geography are the problem - witness the fact that free cities were ubiquitous during the Hanseatic Era, existed where conditions were favourable during the Middle Ages but declined sharply from the Renaissance onward.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
That's the discussion in the general public, anyway.
But if we're limiting the discussion to more regulation of a capitalistic system versus less regulation, then it seems the most prudent course is to avoid wild swings in the economy which displace and disrupt the lives of working people, and indeed families.
Otherwise, a nation such as Iceland--with few resources for export--is living on vapor anyway.
Surely, between nationalizing fisheries and gov't completely abandoning education and health care, there is a space for rational capitalism.
Older economists (and I'm thinking of my professors who were already 80 years old in the 1980s) used to say that every 30 years or so, imbalances happen and that's when the wealth needs to be redistributed. The irony, I believe, is that people like Friedman understand this. They understand that there is no pure concept of freedom that would see wealth freely accumulate at the highest echelons, whereas the mid-to-lower ranks become progressively poorer. I'm not sure that Friedman, within a capitalist context, would describe this as Friedman.
What's left unsaid, however, in a free market capitalist model is that, even though we recognize that huge wealth imbalances are completely unhealthy for capitalism, they will happen, because people are greedy. Of what benefit is it for an uber-wealthy capitalist to redistribute his own wealth when all the other rich guys are still accumulating?
Greed is the default failure of the free-market system.
It remains to be seen what the GDP of Iceland will be when thing settle down - maybe the cycle-average growth rate won't be anything to write home about. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Smelting is very very energy intensive. Hence bauxite by bulk carrier to Iceland to smelter ports, free electricity (more or less), and then ingots exported. You can't be me, I'm taken
Culture, art and innovation. People like culture and art and are willing to spend huge sums on them. Encouraging them a little, creating new market models for both art and innovation, and moving the centre of gravity of the economy away from meaningless financial bullshit towards 'service' products that actually service people could do something interesting.
Markets and distribution methods are potentially global now, so as long as there's decent bandwidth there's no reason any country in the world should be left out.
Yes, this would lead to some extent to the creation of self-funding funny money. But that's what happens already anyway. The only difference now is that people believe - or used to believe - that their money, and its managers, were Very Serious™.
That's about to change, and something low maintenance but productive needs to take its place.
great comment, top to toe... ~Government budget deficits are not nearly as dangerous as the deficits we have created in vital and complex natural systems.~ Naomi Klein.
Germany is making a lot of money from its 'green' technology right now (which goes from wind turbines to scrubbers to integrated production processes). Vestas is a huge company in the context of a small country like Denmark.
If Iceland stops drowning huge swathes of its natural reserves for large hydro to power aluminium smelters, it might conceivably drive up tourism by improving its green reputation.
See also this earlier discussion.
Fortunately, the financial crisis seems to have had a dampening effect on this insanity.
Just to bug Starvid, the Audi A2 (in what was one of the stupidest decisions yet by Audi) has of course been discontinued. Was already discontinued at that time!
