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Another economy theory

by das monde Tue Nov 29th, 2005 at 10:03:27 PM EST

Obviously, I have been away for some time from this blog. I still have other priorities how to consume the time, but I may share a spontaneous thought for the current economics dicussions here. Noticeably, hot economic questions are being discussed: Why did the working middle class gain no substantial wealth improvement in the last 30 years, despite productivity increase? Why only the rich class is doing better and better? Is wealth distribution largely independent of economic policies?

A big difference between haves and have-nots is this. The have-nots have a fierce competition for jobs, the haves have much milder competitions. Most importantly, the haves co-operate, they make many deals. The rich are providing financial, legal, leisure and other services to each other like "rabbits taking sex". Oh yeah, if we identify a cooperation act with sex, the rich are having a constant orgy, while the poor are fighting each other just to catch an eye contact with an employer. They don't even know how sexually frustrated they are.


Take for example the current US oligarchy of Republican politicians, corporate managers and fundamentalist Christian "moralists". You may notice the strongest implementation of the communist principle "from everyone according to the ability, to everyone according to the need" ever seen.

For another example, why African communities are so poor? Without Western intervention or globalization, they probably would live centuries before, not too idealistically, but working for each other and enjoying life. But now all they can do is to fight for the right to suck a multinational dick. [Sorry for explicit language.]

The poor have the problem that they cannot find ways to be useful to others. But the haves are merciless with giving them few chances to cooperate creatively, brainwashing only with competition ideologies, and restricting them to WalMartish harems.

You may tell that something is wrong with the world when poverty is leaping in a country like the Netherlands. Globalization may provide a richer landscape of opportunities and effectiveness, but the tightly united world economy will greedily roll to the nearest hollow point, with other nice valleys never visited.  

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I think about this topic often. Can we do to change this situation? There are many ways, but to start with requires a government that is willing to address tis honestly. Like, for instatnce, taxing the hell out of the rich (in the US, for sure...).

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Wed Nov 30th, 2005 at 03:48:14 AM EST
If we to believe the doomsday myths, the critical sorting out will be on moral grounds. Probably that's how survival of the moral works - the greedy civilisations and communities just down survive certain critical times somehow. It may make sense - if the environment becomes really tough ecologically and/or economically, the best chance for you to survive must be to live in a moral community.

The choices that governments make are, of course, part of the game. That's why it is important not to insist on exactly the same ideology everywhere - the best "theory" may look fantastic in short run, but disastrous somewhere along the way.

A good thing to do would be to educate the poor countries and communities, so that they would know basic economy, would be able to create their own opportunities, and withstand simplistic ideology pressures from outside. If the rich do not know when it is enough wealth for them, it is difficult to ask the poor not to frantically reach out for everything they might individually have. But a balanced attitude would provide them more options.

by das monde on Wed Nov 30th, 2005 at 04:54:15 AM EST
[ Parent ]
The masters, being fewer in number, can combine much more easily: and the law, besides, authorises, or at least does not prohibit, their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work, but many against combining to raise it.


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 04:07:04 AM EST
Marx obviously, or some other nasty commie. Probably French...

Adam Smith debunked the sort of nonsense in that quote centuries ago when he described how free market economics would lead us all to the promised land.

by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 04:30:17 AM EST
[ Parent ]
Sometimes you try to snark too hard.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 05:51:45 AM EST
[ Parent ]
Not sure how to read that.
by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 06:10:50 AM EST
[ Parent ]
Not sure how to read your comment above.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 06:11:42 AM EST
[ Parent ]
I'm not sure whether you meant my comment wasn't effectively snarky or whether you thought I was accidentially hitting the right target.
by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 06:14:48 AM EST
[ Parent ]
Which one is it?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 06:16:26 AM EST
[ Parent ]
I knew it was Smith: not only did I recognise the quote but the painfully pedantic style is a dead giveaway. The reason noone reads his book is that it is simply too awful to contemplate - I'm still working my way through the audiobook after a year. Which reminds me ....
by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 06:20:06 AM EST
[ Parent ]
Painfully pedantic? He was writing in the 1770's, cut the guy some slack.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 06:22:02 AM EST
[ Parent ]
Yes, but unfortunately I'm reading (or listening to it) in the 2000's: it's painfully pedantic from where I'm sitting. And I'm cutting the man enough slack to struggle on through it.
by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 06:28:52 AM EST
[ Parent ]
I don't think I could stomach an audiobook version. Who is the reader?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 06:33:50 AM EST
[ Parent ]
Some escaped robot. It's awful. Sample here. There's no way I'm going to work through the book itself though, so it makes an illuminating substitute for radio. I have a very abridged version I'm actually going to read.
by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 06:40:37 AM EST
[ Parent ]
52 seconds from comment posted to reply posted - that must be the record...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Nov 30th, 2005 at 03:30:09 PM EST
[ Parent ]
I think Migeru and I take our cranky mid-morning break at about the same time ...
by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 03:51:30 PM EST
[ Parent ]
I guessed and checked with google. Adam Smith, of course. (Paragraph 12.) He explains the assymetry very clearly.

We rarely hear, it has been said, of the combinations of masters; though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and every where in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is every where a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things which nobody ever hears of. Masters too sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy, till the moment of execution, and when the workmen yield, as they sometimes do, without resistance, though severely felt by them, they are never heard of by other people.

So the assymetry is supposed to be normal?

Perhaps the human civilisation is not grown up yet. Ancient wisdoms say: don't cause pain to the others; control your own desires and powers. Yet the prevailing economic ideologies explicitly say to follow only your own interests, disregard the others; and they glorify unlimited greed and firmly oppose any critique of it. Was this really what Adam Smith meant?

by das monde on Wed Nov 30th, 2005 at 04:34:22 AM EST
[ Parent ]
Adam smith was denouncing the fact that this asymmetry was taking for granted, and that it was bad for the common good. At least that's my reading of him.
Whenever the legislature attempts to regulate the differences between masters and their workmen, its counsellors are always the masters. When the regulation, therefore, is in favour of the workmen, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.
Hiw view of "the combinations of the masters" was rather hostile:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
Smith does read as strongly pro-labour throughout, although his view of the "corporations" (guilds) would have made him frown on large, powerful unions.
The pretence that corporations are necessary for the better government of the trade, is without any foundation. The real and effectual discipline which is exercised over a workman, is not that of his corporation, but that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence. An exclusive corporation necessarily weakens the force of this discipline. A particular set of workmen must then be employed, let them behave well or ill. It is upon this account that, in many large incorporated towns, no tolerable workmen are to be found, even in some of the most necessary trades. If you would have your work tolerably executed, it must be done in the suburbs, where the workmen, having no exclusive privilege, have nothing but their character to depend upon, and you must then smuggle it into the town as well as you can.

The Wealth of Nations makes for some jaw-dropping reading (just like Macchiavelli's The Prince, by the way) because of how strongly and frequently it is misrepresented in the public discourse. For instace:

Such regulations may, no doubt, be considered as in some respect a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments; of the most free, as well as or the most despotical.
There you have a clear endorsement of government regulation of powerful business interests. (And I am not taking this out of context: this is smack in the middle of his discussion of the banking system — Smith would have liked the Tobin tax)

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 05:50:16 AM EST
[ Parent ]
Agreed. Machiavelli is also not that simple as many think.
by das monde on Wed Nov 30th, 2005 at 06:02:05 AM EST
[ Parent ]
Which leads one directly to the suspicion that many people who quote them (and many others of the old masters) as authorities have never read any primary sources.
by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 06:12:44 AM EST
[ Parent ]
Suspicion?

People copy reference lists from papers just so it looks like their work is properly referenced. That is a fact.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 06:14:20 AM EST
[ Parent ]
Reading primary sources is hard: you have to be a language freak like me, who enjoys reading facsimiles of 18th-century books where the 's' looks like an 'f' and English nouns are capitalized as in German.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 06:15:42 AM EST
[ Parent ]
If they'd even read the translated version that'd be fine - it's all I'm going to do.  The problem is that they seem to be several generations deep into regurgitation of selected quotes at this stage.
by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 06:27:01 AM EST
[ Parent ]
Physics is no different than economics in this respect, trust me.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 06:34:20 AM EST
[ Parent ]
You do mean selected quote, in the singular, right?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 06:42:45 AM EST
[ Parent ]
You may have a point there.
by Colman (colman at eurotrib.com) on Wed Nov 30th, 2005 at 06:49:14 AM EST
[ Parent ]
(which frankly I am getting sick of)

Since economics is the physical representation of social status, the idea of a rising tide lifting all ships is purest nonsense.  It is probably not your ship that is being lifted.  

On a different note:  The first step in colonization is to destroy the local economy, giving the locals no recourse but to accept enslavement in the new economy.  The West has done this everywhere.  

The Fates are kind.

by Gaianne on Wed Nov 30th, 2005 at 10:36:28 AM EST
Since economics is the physical representation of social status
Hmmm.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 30th, 2005 at 10:38:32 AM EST
[ Parent ]


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