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In any case, you continue to not address the issue of why the periphery should accept depression conditions rather than the core accepting some inflation.
Investing German surpluses outside the Eurozone does nothing to address the intra-Eurozone imbalances, by the way. And buying existing shares just inflates asset prices, it doesn't improve the capital base of the periphery (or of the EU as a whole) and so doesn't really constitute "surplus recycling". tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
I'm not arguing for any of those solutions, as I see both as unacceptable. I want to see widespread sovereign defaults, bank recapitalizations and the emergency funds of the ESFS spent on infrastructure spending in the periphery as a way of offsetting austerity.
Investing German surpluses outside the Eurozone does nothing to address the intra-Eurozone imbalances, by the way. And buying existing shares just inflates asset prices, it doesn't improve the capital base of the periphery (or of the EU as a whole) and so doesn't really constitute "surplus recycling".
The important point here is not improving capital bases as such, but of financing CA deficits without debt to buy enough time to restore competitivness. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Better productivity is not exclusively about higher capital content in the production.
But overwhelmingly it is.
There are always smarter and more efficient ways to do things,
But finding them requires an industrial base from which to learn.
- Jake Friends come and go. Enemies accumulate.
The whole unfettered free-market thing doesn't seem to work too well either.
The entire set-up of the Soviet economy proves the opposite. No matter how many tractors, coal mines or capital-intensive megaprojects you had, the inherent inefficiency of the planned economy wrecked productivity entirely.
That's not actually true. The Soviet economy performed more or less as a Solow model of capital accumulation would predict. When you calibrate your model to the whole world, the Soviet Union overperforms during the interbellum (usually ascribed to the Soviet Union being part of an international trade system that was shielded from the Depression) and slightly underperforms during the postwar period (usually ascribed to Russia being part of a smallish international trade system - larger international trade systems tend to perform better, which is why you have international trade systems in the first place).
But Russia was a third-world country in 1918. And Germany, well, wasn't.
The Soviet political system just isn't visible in the gross GDP and growth data.
Of course, having a police state and fighting unprofitable colonial wars in Central Asia tends to divert industrial output from consumer goods into military hardware and man-hours from industry into the army and political police. A point the Americans may want to keep in mind.
Besides, the ability to make and distribute consumer goods isn't in itself a particularly useful measure of the health or value of an economy.
We don't actually have a useful model of what a healthy economy does look like. Mid-century social democracy probably comes closest, but the - apparently - inevitable slide into economic dictatorship by the non-proletariat has to be considered a bit of a flaw.
Exports (2010)--SEK 728.2 billion (U.S. $102.9 billion). Imports (2010)--SEK 687.6 billion (U.S. $97.2 billion). Major trading partners, exports (2010)--Germany 10.1%, Norway 9.9%, U.K. 7.6%, U.S. 7.3%, Denmark 6.5%, Finland 6.2%, France 5.1%, Netherlands 4.7%, Belgium 3.9%, China 3.1%. Major trading partners, imports (2010)--Germany 18.3%, Norway 8.7%, Denmark 8.5%, Netherlands 6.4%, U.K. 5.7%, Finland 5.2%, Russia 4.9%*, France 4.8%, Belgium 3.9%, China 3.9%.
Major trading partners, exports (2010)--Germany 10.1%, Norway 9.9%, U.K. 7.6%, U.S. 7.3%, Denmark 6.5%, Finland 6.2%, France 5.1%, Netherlands 4.7%, Belgium 3.9%, China 3.1%.
Major trading partners, imports (2010)--Germany 18.3%, Norway 8.7%, Denmark 8.5%, Netherlands 6.4%, U.K. 5.7%, Finland 5.2%, Russia 4.9%*, France 4.8%, Belgium 3.9%, China 3.9%.
* This is mainly oil, especially heavy/sour gunk which we process into motor-grade diesel a the refinery in Lysekil. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Far as I can see lines are a sign of: 1) limitation in access (you don't line for something everyone has in abundance) and 2) power allocated at the point people are lining to (in the reverse, you have people going door-to-door) and 3) distribution by stubbornness
Distribution by market forces just changes the last point to distribution by market power. When it comes to capital and resources, distribution by market power can be argued on basis of efficiency. When it comes to consumer goods, unless you assume homo economicus, I see no reason that it is more efficient to distribute from market power then from stubbornness. Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
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