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Monday Message Board

January 21st, 2013

Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

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  1. Jarrah
    January 23rd, 2013 at 16:31 | #1

    @Jordan
    “By your logic slavery and feudalism are capitalism since they had private property”

    Since you are ignoring the second criteria, it’s no wonder you’ve arrived at such a ridiculous conclusion.

  2. Jarrah
    January 23rd, 2013 at 16:40 | #2

    @Tom
    “If you believe that the world is still practicing Keynesianism post 70s that is fine, people are entitled to their beliefs.”

    I presume by this condescending dismissal that you don’t want to actually discuss whether my ‘belief’ has any basis. Is that because you suspect I might be correct?

    “If these meant people do not have property rights”

    Why do so many people insist on erecting strawmen? I didn’t say “do not have property rights”, so basing your argument on a false accusation is a waste of your time and mine.

    Perhaps you’d like to do some research before lodging your foot so firmly in your mouth.
    http://www.economist.com/node/8815075
    http://www.aeaweb.org/assa/2006/0108_1300_0204.pdf

  3. Jarrah
    January 23rd, 2013 at 16:50 | #3

    @Ikonoclast
    “We ought to add that the capitalists (the owners of the means of production) extract surplus value from their workers who are wage labourers with only their labour to sell.”

    So what? Workers extract surplus value from their collaboration with the capitalist too. This is why both groups (so far as they can be distinguished in reality) join up to produce.

    “The “rentier” receives income derived from economic rents, which can include income from real estate, patents and copyrights.”

    Not any old income from real estate, only the extra derived from artificial scarcity. Also note that the second two are government-provided monopolies, and thus antithetical to capitalism.

  4. Jordan
    January 23rd, 2013 at 17:02 | #4

    @Jarrah
    Maybe you could read second sentence to see that i did not ignore it.

    Real differences in capitalism vs feudalism is in what is produced. Rest of the descriptions is equaly applied. Feudalism does not have slavery, which is only difference from it. Feudalism is based on agrarian production, just as slavery.

    Feudalism has a description of a “rentier” from capitalism and capitalism is about that relationship translated onto capital goods and means of production that produces other then food. Not much of a difference in relations just difference in products.

    Democracy changed that relationship, but not as much as it did change banking system. Before democracy, debt would be forgiven after king’s death. Whatever debt king (state) accumulated, it would be forgiven, hence there were many royal assasinations for that purpose. For me, it was hard to swallow such widespread fratricide in history of assasinations untill i connected it with higher purpose of forgiving the debt of state as a new begining for the new king.

    If a king lived long time it succeded only by looting other countries to pay off debt. Force of a compund interest is a killer of an economy. Even Moses knew that and ordered a Jubilee every 7 years. Deutoronomy:15. Romans were first in history of banking that did not have Jubilee and erased it from Izrael, when Jesus advocated return of a Jubilee, Romans killed him.

    I am connecting history of economic tought by Michael Hudson, Richard Wolf and Robert Lietar and pulling out other relations in history known to me.

    Keynes offered another solution to debt besides looting other countries and since then there was no wars within developed world. Except in Yugoslavia.

  5. Jarrah
    January 23rd, 2013 at 17:27 | #5

    @Jordan
    “Maybe you could read second sentence to see that i did not ignore it.”

    In your disparagement of my definition, where you conclude that feudalism and slavery fit, you ignored it.

    “Real differences in capitalism vs feudalism is in what is produced.”

    The real difference was cultural. See Appleby’s ‘The Relentles Revolution’.

  6. Jordan
    January 23rd, 2013 at 18:03 | #6

    @Jarrah
    No i did not ignore it, i said that free market is less free today then ever in history.

    The real difference was cultural. See Appleby’s ‘The Relentles Revolution’.

    So, are you agreeing that culture of getting sick of death and suffering is leading the change in relations of production and consumption?
    That was my point just expressed in other words.

    What is produced is about economic observation, what changed it in human is psychological observation. Just a different point of observation in POV, not difference in understanding.

  7. Chris Warren
    January 23rd, 2013 at 18:41 | #7

    @Jarrah

    You are struggling because you are not using concepts in a rigorous way. Citing other authors who also may have done so (if so – Appleby) does not help.

    Just cherry-picking a few characteristics that apply generally, and assume they apply specifically to capitalism – is futile. But then to pretend that they define capitalism is fallacious.

  8. Jordan
    January 23rd, 2013 at 18:47 | #8

    A culture is a visible result of social coordination. The social coordination is changing violence and suffering in political and economic history led by idea in Bible in form of a better world-heaven.
    That social coordination is enlarged and strenghten by speed of communication. As social coordination becomes stronger it enlarges state sizes and relations in production and distribution. Speed of communication is hugely advanced by internet and planes hence you can expect social coordination to enlarge and consider the whole world as a single social organization prety soon.

    Such huge social coordination changed differences in developed areas across the world. Last few decades were marked with lessening the difference by developing China, S. America, India and Africa somewhat. That is a mark of social coordination on the level of the whole world. It was led by right wing political spectrum which is on the first look opposed to such thing. But that is a product of it. It looks like social coordination in aristocrats is working toward better world no matter what is a policy prefference. Something of an aristocratic benevolence/ philanthropy that changes the world for the better led by social cooperation and culture of discust for death and suffeering.

    Social coordination suported by speed of communication will change the world in the imediate future much more then we can imagine, led by discust toward human suffering and death. It is going toward idea of heaven on earth given in Bible.

    Social coordination can organize production and distribution as it wants, limited only by a notion of what is possible. Every change always have loosers who will fight the change and such conservativism changes it for the better toward more durable solutions.

    J.M. Keyness expressed idea of new financial system that enables change for the better.
    MMT is a slightly changed Keyness theory of a system that enables even better world if allowed to creep in into conservative population who fear loosing what they have.
    As i wrote before, you can understand MMT only if you are ready to forget what you can loose, but think of what everyone can get and it is based on strict separation of real values vs nominal values.

    Neoclassical economic understanding assumes that nominal price is representative of real value of products and services and never looks back. It assumes that nominal value is real value. MMT keeps separated nominal from real value to reach to the process by which enables distribution with the least suffering to anybody.
    Neoclassical theory is protected by fear of loosing an advantage over others.

  9. Julie Thomas
    January 23rd, 2013 at 19:09 | #9

    @Jarrah
    “Luckily, in general people start caring about the environment once they’re rich enough to not worry about the next meal or next season, something that only became possible thanks to capitalism. ”

    Oh come on, do you really believe this? Got a reference?

    The old hunter-gatherers were people who cared about the environment?

    And you make far too much of Ikon’s ‘simplification’ of issues. In a discussion some things have to be simplified, you know that.

  10. Jarrah
    January 23rd, 2013 at 19:35 | #10

    @Julie Thomas
    “Oh come on, do you really believe this? Got a reference?”

    Yes and yes.

    “The old hunter-gatherers were people who cared about the environment?”

    No, in general they did not. Their small ecological footprint was due to low population.

    “In a discussion some things have to be simplified, you know that.”

    Absolutely. Every single one of my comments, for example, has been massively simplified. There is a difference, however, between simplification and incorrect blanket statements.

  11. Jarrah
    January 23rd, 2013 at 19:39 | #11

    @Jordan
    “No i did not ignore it”

    Yes, you did:

    By your logic slavery and feudalism are capitalism since they had private property.

    ..which totally ignores the fact I stated private property AND FREE EXCHANGE was a succinct definition of capitalism.

    Please stop trolling. I admit I’ve encouraged you by replying, so unless you deal with what I actually write, I won’t do so again.

  12. Jarrah
    January 23rd, 2013 at 19:40 | #12

    Note to Ikonoclast and Julie Thomas – my replies to you are in moderation due to having links in them.

  13. Jordan
    January 23rd, 2013 at 19:59 | #13

    @Jarrah
    You ignored what Chris Warren wrote to you.
    You assumed that free market did not exist in slavery and feudalism and i am saying that it did exist with same processes and laws troughout history so you can not claim that free market exists only in capitalism and hence define it.

    Wasn’t market at the time so free that included sales of people?

  14. Jordan
    January 23rd, 2013 at 20:15 | #14

    Here is a transcript of speech of representative Jim McDermont to hearing on a debt ceiling by GOP.

    ““The whole world is watching this hearing. It is the first hearing on this issue. The whole point of a society is to create and run a government to make order for people. People don’t like chaos and this hearing is about how to create chaos to get what you can’t get politically with votes.”

    http://www.rawstory.com/rs/2013/01/22/rep-mcdermott-slams-gop-for-using-debt-ceiling-to-push-social-darwinism/

    This represent the difference in worldview between conservatives and liberals.
    Conservative base their worldview as individual in the world fighting for its own benefit, on the other hand, liberals base their worldview as group of individuals fighting for benefit of all, toghether and in coordination.
    Due to such worldview; for liberals a government is a group that works for benefit of most in the whole group that decides on how trough social coordination, while conservatives see government as an obstacle to advancement of particular individuals.

  15. Jim Rose
    January 23rd, 2013 at 20:33 | #15

    @Jarrah on ‘still practicing Keynesianism post 70s’, Greg Mankiw in a 2006 JEP article made great use of Laurence Meyer’s recent memoir A Term at the Fed to show who was really influencing modern macroeconomic policy making.

    The book by Meyer left the reader with one clear impression: Recent developments in business cycle theory, promulgated by both new classicals and new Keynesians, have had close to zero impact on practical policymaking in the USA.

    Meyer’s analysis of economic fluctuations and monetary policy is intelligent and nuanced, but it shows no traces of modern macroeconomic theory.

    Meyer’s reasoning would seem familiar to someone schooled in the neoclassical-Keynesian synthesis that prevailed around 1970 and had ignored the scholarly literature ever since.

  16. January 23rd, 2013 at 21:02 | #16

    There was no Keynesianism in the 70s.

    I have just a piece on that after the laughable piece by Arnold Kling which Sinclair Davidson linked.

    You only use fiscal policy when monetary policy doesn’t work i.e a liquidity trap. That happened during the GFC but never at any other time in the USA post war!

    David Glasner made the incisive comment once the General Theory was more about monetary economics.

    Most people have never read the book. It wasn’t his best book and in some places hard to read but it is essential reading.

  17. Jordan
    January 23rd, 2013 at 21:29 | #17

    JR you are right in real terms since deficit spending has the same effect as fiscal policy, and
    nottrampis you are right in literal sense only.

    Problem is that fiscal spending by deficit spending have a danger of comming under attacks by deficit hawks and ask to reduce debt that such spending has accumulated.

    Since deficit and debt are not a problem for sovereign state in time of fiat money and it can increase indefinetely unless politicians say that it can’t. It is not a problem operationaly only politicaly.

  18. Julie Thomas
    January 24th, 2013 at 06:55 | #18

    @Jarrah

    That link is really inadequate, but the reasoning on which I base this assessment will not be acceptable to you, or understood by you, until you address the problem that Chris Warren has raised about your – very prolific and energetic – efforts to defend what is an indefensible position.

    And again, you take such a simplistic view of life. The question of whether hunter-gatherers ‘cared’ for the environment can be ‘won’ by you if you rely on old-fashioned outdated ideas of what life – psychological as well as physical – was like for the hunter-gatherers. There is lots of new stuff from Anthropology and evopsych about how dodgy these old assumptions were. Pfft, so much rubbish written about human nature based on the notion that the white man was the peak of human evolution.

    So, you are necessarily simplifying and I don’t think you have been criticised for doing that?

    But the simple message I get from your arguments, is that capitalism is a good thing, the best thing humans have come up with and despite all the problems, we should continue on with this same ideology; that growth is an unquestioned good and any other possibility a bad thing.

    The thing is Jarrah, the thing that you don’t really get, is that there are a lot of people like me, who have ‘rational’ – as rational as yours anyway – and evidence based reasons for arriving at the conclusion that the last 30 years have not been ‘good’ and on balance, looking back, all the choice and freedom that people like you insist is ‘progress’ and essential, seems to have only made some people, perhaps people who have your particular personality type, happy.

    Let’s not argue about the happiness research; as an ex-psychologist, I am not impressed with self-report data and real measures of happiness, such as suicide rates and health – both physical and psychological, are showing that people are not happy with all the choice and stuff they have been suckered into thinking are good things.

    And you support this obscene imbalance of power where marketers can lie and mislead and use any psychological coercion they like to convince people that they need to buy stupid ugly stuff. Of course there is good stuff that came about through capitalism; the question is was it worth all the bad things?

  19. Ikonoclast
    January 24th, 2013 at 07:47 | #19

    @Julie Thomas

    It is very clear that capitalism is at a final crisis point. Naturally, a lot who have been beating the capitalist drum for a very long time are in complete denial about the looming realities.

    1. Capitalism demands endless growth. The biosphere is a finite system. Ergo capitalism is in conflict with the laws of physics and the laws of ecology.

    2. Climate change analysis shows at least 4 degrees C of global warming are already built in to the natural systems. With current unabated growth in greenhouse emissions 6 degrees C plus will soon be built in. This will be catostrophic to the biosphere. Certainly, global civilization will collapse over about the next 100 years. Regional adaptations may allow remnants of our species to survive.

    3. Many other analyses (e.g. ecological footprint analysis) and signs (mass extinctions and range migrations of species) show the dire state earth’s biosphere systems are in.

    4. At the same time, a massive rearguard justifcation, defence and apologia for capitalism is mounted to prevent positive change. This, coupled with the immense momentum of the system, its modes of production, demographics and geopolitics make it immensely difficult to turn the ship of political economy around. This could perhaps been averted if post 1972 we had taken Limits to Growth seriously and begun to change our system including jettisoning capitalism. We actually needed to have fossil fuels phased out by 2000 and the world population stablised by that date. The 30 years from about 1972 to 2002 were our last chance. Instead we saw an exponential growth and intensification of all the wrong things. Our fate was sealed.

    A comprehensive catabolic breakdown of civilization will now occur and the process has already started. The current economic crisis will be permanent and indeed will deepen. There is no way now to grow out of this crisis. There are not enough quality resources left to underpin the neecessary growth.

    Around the globe, the first signs are the food crises beginning to overtake certain countries. Food crises will deepen and widen. In Australia, this will take the form of rapid food inflation. By 2022, I suspect so-called middle class families wanting to eat to the same standard will need to increase spending on food and non-alcoholic beverages from the current 17% to about 35% i.e. a doubling.

    Households will also find it very difficult to keep household “infrastructure” running. The quality and reliability of whitegoods is declining rapidly and this decline will become systemic. It will soon be very difficult to buy a fridge, dishwasher or washing machine that lasts longer than two years. Most households could dispense with the dishwasher and probably will. It is a little more difficult to do without washing machines and fridges though in time people will have to do so. Ironically, the load on our grid may be lessened by the collapse of the whitegoods and air-conditioning industries as the “middle-class” becomes unable to afford these items.

    Capitalism has entered the mode of churning out the cheapest stuff possible with built-in obsolesence the norm. Nothing in the whitegoods arena is now meant to last longer than the warranty period. This of course is an inefficient use of our remaining resources and energy sources. Cars (although the best ones still remain reliable) are also a great waste of our remaining resources. The costs of cars and fuel will also escalate rapidly over the coming decade. A transport crisis will occur as many people can no longer afford automobiles and our inadequate mass transit system is in no position to take up any slack. This transport crisis will compound unemployment and other economic problems.

    I could go on but you get the picture.

  20. January 24th, 2013 at 07:58 | #20

    right in a literal sense only?

    in what way am I wrong?

    By the way I have some lovely Ry coder stuff before my rant against Kling

  21. Jordan
    January 24th, 2013 at 08:42 | #21

    @nottrampis
    in that deficit spending is not allways called fiscal policy.

  22. January 24th, 2013 at 09:07 | #22

    anything to do with the budget is fiscal policy.

    In normal times when there is an economic downturn Keynesians would argue let automatic stabilisers ( passive fiscal policy) do their work BUT make monetary policy your main tool.

    The GFC was a bit like a Depression , it lead to a liquidity crisis and therefore made monetary policy impotent. Hence the need for active, not passive, fiscal policy

  23. Chris Warren
    January 24th, 2013 at 09:18 | #23

    @Ikonoclast

    I may sound like a pedant here, but this statement:

    1. Capitalism demands endless growth. The biosphere is a finite system. Ergo capitalism is in conflict with the laws of physics and the laws of ecology.

    needs qualification.

    Capitalists will still demand their profits even if there is no growth, or even in a long-run recession, or even during wars, when growth is corrupted.

    However capitalism only seeks growth because it maximises profits. If a capitalist could make 10% in a no-growth, sustainable project, and 5% developing growth, – no growth will occur.

    Modern capitalism has captured normal economic activity and then parasitically claimed it as its own. However this faux association with growth means that capitalism has some funds it can use to temporarily fund countervailing tendencies, eg welfare state.

    Of course capitalists have to be forced to fund the welfare state, and if they can erect a military dictatorship to avoid this sliver of humanity – that is what they will do if they get the nod from the world’s centre of capitalism (originally UK, more recently USA). These hugely profitable capitalist dictatorships ringed America – and boosted American growth in the 1950′s-1970′s

    Greece
    Portugal
    Spain
    Turkey
    Indonesia
    Philippines
    South Korea
    South Vietnam
    Iran
    Saudi Arabia
    Morocco
    Tunisia
    Venezuela
    Uruguay
    Paraguay
    Peru
    Nicaragua
    Mexico
    Haiti
    Guatemala
    Dominican Republic
    Columbia
    Chile
    Bolivia
    Argentina

    Thankfully much of the Yankee fascism has been thrown out, although America dispatched many terrorists to prop-up its satellites, and arranged many assassinations, so America is in early deep trouble – surviving mostly on the fact that the dollar is still the reserve currency.

  24. January 24th, 2013 at 10:26 | #24

    capitalism means endless growth?

    Ever heard of business cycles? There were quite a few depressions before the grest Depression.

  25. Chris Warren
    January 24th, 2013 at 10:51 | #25

    nottrampis :

    Ever heard of business cycles? There were quite a few depressions before the grest Depression.

    Huh?

    What is your point?

    Capital accumulation occurs despite business cycles, although this may require greater concentration, greater population and yet more stimulus.

    No one is saying that capitalism means endless growth “forever”, because it eventually collapses in one final business cycle.

  26. Ikonoclast
    January 24th, 2013 at 12:46 | #26

    @Chris Warren

    I appreciate your reply. It’s a very good one. I have no problem with pedantry. In most cases it is accuracy and comprehensiveness. People who can’t handle accuracy and comprehensiveness in thinking get all huffy and call it “pedantry”.

    David Harvey’s video “Crisis Theory and the Current Conjucture” is very enlightening. I recommend it to all who read this blog. Even if you are pro-capitalist watch it. As John Stuart Mill said “He who knows only his own side of the case, knows little of that.”

    http://davidharvey.org/

  27. Jim Rose
    January 24th, 2013 at 16:14 | #27

    the life expectancy of the downtrodden proletariat has close to doubled under the horrors of capitalism according to Robert Fogel:
    1. Of the children born between 1835 and 1845, nearly a quarter died in infancy, and another 15 percent perished before age 15. Those who survived endured persistent malnutrition, typhoid, tuberculosis, measles, rheumatic fever or malaria while labouring hard seven days a week.
    2. Those born in the 1920s had about a 10% chance of dying before age 15.
    3. Those born in the 1960s had about a 99% chance of making it to 15.

    The idea that parents should not bury their children is a blessing of 20th century capitalism. Parents in the good old days had large families in the hope that some would live to adulthood.

    The good old days were terrible. How much extra would you want to step into a time machine and go back 100 years? 40 years back to 1972 – pre-colour TV? To the Menzies era?

  28. Will
    January 24th, 2013 at 16:37 | #28

    ^^ the above

    This is getting tiresome. Boring drivel. I wish you guys would knock off “we are for freedom and free markets and capitalism, you aren’t” crap.

  29. Chris Warren
    January 24th, 2013 at 18:52 | #29

    @Jim Rose

    All those existed under Gorbachev and in Yugoslavia.

    But under capitalism – the right to own colour TV’s is not equal. How many colour TV’s can you afford working at $2 per day?

    Thanks capitalism.

  30. Jarrah
    January 24th, 2013 at 20:13 | #30

    @Ikonoclast
    “1. Capitalism demands endless growth.”

    No, it doesn’t. It tends to create growth (in economic activity and capital – it would be better if you were precise about what you mean by ‘growth’). This is an important distinction. People being what they are, this tends to create growth in consumption and resource use. If people were content to keep consuming at previous, lower, more simple levels, then the fairly constant growth in productivity and efficiency that capitalism allows would deliver a diminishing use of resources, even better than your preferred steady-state economy.

    But people aren’t like that. What you want to happen would require wholesale change in our cultural expectations, even our very biology. Good luck.

  31. Jordan
    January 24th, 2013 at 20:26 | #31

    On the matter of endless growth is shown i Say’s Law about interaction of unemployment and inflation and Okun’s Law about necessary growth of 3,9% to account for population growth of 1% and productivity growth of 1% so it doesn’t cause unemployment. Having growing unemployment year over year will cause social and political instability. To prevent instability economy have to grow over 3%. Therefore, capitalism demands endles growth.

  32. January 24th, 2013 at 20:39 | #32

    the point is chris depressions mean negative growth.

    so much for endless

  33. Jarrah
    January 24th, 2013 at 21:44 | #33

    @Jordan
    “To prevent instability economy have to grow over 3%. Therefore, capitalism demands endles growth.”

    You are conflating capitalism and ‘people who want economic stability’. Capitalism is just an ism, it doesn’t and can’t demand anything at all. Like so many intellectually lazy people, you think ‘capitalism’ means ‘whatever is the current socio-economic complex’. Capitalism is a big part of our current system, but still just a part.

    Your assertion (without foundation in theory or practice, as I’ve said before) implies that capitalism collapses when there isn’t 3% economic growth. Your theory doesn’t give a time limit, but let’s say 20 years is a reasonable time. Japan has had less than 3% growth since the early ’90s. Why hasn’t capitalism collapsed there?

  34. Jordan
    January 25th, 2013 at 02:29 | #34

    @Jarrah
    Instability doesn’t mean collapse, but it is true that implies to all other systems.
    Japan did not have instability because of good employment no matter finacial collapse in 1992. Unlike present USA, Japan have kept employment good for 2 decades but with fiscal spending that reached 230% debt to GDP. They did not allow collapse of financial system to cause high unemployment.

    Japan have GDP corresponding population rate which is also falling.
    Okun’s Law considers productivity growth and population rate. In Japan, both were falling last two decades. ANd working hours were also falling, from 72 to 58 hours a week. All of it just says much about GDP as measure of wellbeing.

    Bush was just siting there expecting that stimulus of 2008 would bring the financial crisis over election time and dump it to new president. But stimulus worked for only 3 months, it gave every person only $600, what was stimulus in Australia? AUD 2300?

  35. Jordan
    January 25th, 2013 at 03:01 | #35

    @Ikonoclast
    Yanis Varoufakis presentations also point to Savings(capital) glut as the problem of present capitalism. There is no enough assets to invest to in the world for such ammount of capital.
    Since 1980s, that saving glut is pushing down interest rates which led to lower inflation. Without benefits of higher inflation eating up debt, it came to the debt limit and that started deleveraging and unemployment.

    Huge deficits in developed world had some effect of clatching onto capital glut but at the same time interest paid out on that capital also enlarged it and exascerbated the problem. SImple high marginal taxes acros the world would solve that problem easy. Tax it instead of borrowing it for what deficit spending is used is the way to solve the problem of Saving glut.

    For those that cry wolf about high taxes, let me point out that such savings (except pension savings which low interest rates are ruining) are never going to be used for consumption and thats why they keep growing. It is a surplus which can never be consumed by owners of that capital, they allready have consumed what they wanted, this is saving after consuming.

  36. Jordan
    January 25th, 2013 at 05:07 | #36

    On a side note, it looks like Krugman finaly understood the correct relationship between private sector and public sector:

    Those who claim to be deeply upset about public sector deficits should be asked, what would have happened, given this attempt by the private sector to move into surplus, if the public sector had tried to stay in balance. Can you say Second Great Depression?

    It says that private sector (all of us) is a beneficiary of deficits of public sector which MMT is desperately tring to show to clueless economists who argue against public sector deficits and go for surplus as something moral and good for people.

  37. Chris Warren
    January 25th, 2013 at 06:20 | #37

    @Jarrah

    In fact capitalism has restricted growth in the Third World.

    It has also misallocated growth in Western societies and according to Christine Legarde is now producing “contraction”.

    A normal, non-capitalist growth would not produce this worsening disaster.

    But like bad apples – one capitalist eventually destroys everyone.

  38. Chris Warren
    January 25th, 2013 at 08:34 | #38

    Life under Capitalism, but not as we know it…

    In capitalism, unions are typically banned, as this assists profiteering. However workers can fightback, sometimes at the risk of their lives (as in Colombia).

    In Korea – capitalism runs riot and still displays the values of the Kwangju massacre of pro-democracy students. Currently – according to LabourStart …

    The President of the Korean Government Employees’ Union (KGEU), Kim Jungnam, launched a hunger strike in the streets of Seoul outside the offices of the Presidential transition committee on 15 January.

    He is protesting the sacking of 137 workers, among them the union president and general secretary, who are being punished for their union activities. They are accused of being leaders of an “illegal organization” — the KGEU.

    President-elect Park Guenhye, who will take office on 25 February, has pledged to achieve social integration. The KGEU is demanding that she recognize the union and reinstate the sacked employees.

    Kim will continue his hunger strike until these issues are resolved.

    We call upon trade unionists around the world to show their solidarity by sending off messages of protest and solidarity today.

    Click here to send off your message.
    http://www.labourstartcampaigns.net/show_campaign.cgi?c=1693&src=ub

    Please spread the word – share this message with your friends, family, co-workers and fellow union members.

    Thank you!

    Eric Lee

  39. January 25th, 2013 at 09:08 | #39

    @Jarrah

    I agree with Zhang’s paper that there there are difference in the level enforcement of property rights (some areas strongly enforced while some areas are very weak) in China. He’s argument that the “asymmetric property rights” is related to China’s growth is an interest point which I have not looked into.

    For the argument that, “asymmetric property rights” is one of the reason for China’s pollution you’ll have to explain other countries, say, the top 10 polluted countries in the world.

    Furthermore, to argue industrialisation being utterly independent to capitalism is a strange argument if you argue capitalism tends to create growth because growth in consumption will need to be accompanied with growth in production. On a global scale, even if China didn’t industrialise, some other country will have to, if the local manufacturing industry declines or fails to meet the grow in demand.

  40. Tony Lynch
    January 25th, 2013 at 10:52 | #40

    @Ikonoclast

    So that is why, in the last week, and in a new house with Harvey Norman supplies whitegoods, i) the door to the oven fell off; ii) the dishwasher just stopped & I was told “it’s not worth fixing it”.; iii) the fridge door handle came off & the only way to fix it meant a new door; then iv) water pooled on the floor in front of the fridge and it had to be regassed – & now, again, there is that puddle; and v) the mesh inside the microwave door detached itself, presumably letting the radiation out into the room; and vi) the agitator in the washing machine decided that it wanted to free itself from any material attachment to the rest of the machine.

    I’ve had it.

  41. Sam
    January 25th, 2013 at 11:34 | #41

    I’m surprised and disappointed. I expected more from Alan Kohler in today’s The Drum. http://www.abc.net.au/news/2013-01-24/kohler-privatisation-is-good-for-qld/4482140
    He makes the silly and naive case for privatisation you rightly decry, JQ. He believes paying down gross government debt is an inherently responsible thing to do, never mind the effect on net fiscal position. All this must apparently be done to appease credit rating agencies who make the same basic error, who embarrassed themselves so thoroughly during the GFC, and who were completely ignored by investors after they downgraded the US. I now put Kohler in Paul Krugman’s category of “Very Serious Person.”

  42. Ikonoclast
    January 25th, 2013 at 11:41 | #42

    @Tony Lynch

    Yes, I am getting quite concerned about the decline in quality of most goods now. To give some recent examples from my situation;

    1. Brand new, supposedly high quality brand, $8,000 ride-on mower began snuffing out after 20 minutes operation with just 15 operational hours on the clock. Took the dealership 5 attempts to fix it, taking it away for a day or two each time. They have been good about it but they really had no option under warranty and I was starting to demand a “replacement engine since this one doesn’t work”. Tested OK for an hour once. But is it really fixed? Time will tell after this rainy spell.

    2. New fridge, less than one year old. Mid-range brand. Door closing latches are cheap plastic and both have now broken in warranty period under normal use by four sensible adults. One fixed under warranty, wonder what they will say when I claim for the other one? Clearly, as soon as 1 year warranty period is over they will break again within one year. Already, a cooling or circulation fan has become rattly and noisy. Wonder what that presages? I find fridge mechanics these days to be of the opinion “there ARE no good fridges now”. Where does that leave the consumer? All whitegoods are headed the same way.

    3. All meat purchased from the large grocery duopolies is pumped full of water. I have measured one and a half to two cups of water coming out of 1 kg of “lean, 5 star” beef mince, beef strips or round steak cut up for curries and stews. The same for chicken breasts supposedly natural, free range, organic and all the other meaningless bulldust they claim. It is actually impossible to sear this meat as the water just comes out and broils it. I’ve found a new butcher who seems better… for now… probably until the duopolies drive him out of business. Also, did you know all of Australia’s top quality meat is exported? We get only the dregs the overseas rich don’t want yet we pay top dollar for it with 25% to 33% infused water content. Where is the consumer protection in this country?

    4. All fruit and vegetables purchased from the large grocery duopolies are old (not fresh) and spoil if not used within 2 or 3 days even if stored appropriately. A proportion (about 10% to 20% it varies) is unuseable when cut open. That is, it is bad inside. Specialist fruit are a little better and much more expensive. I can recall as a kid, my uncle had a bag of potatoes under his house. These lasted for months (stored in a cool, dark place). Funny how modern potatoes go soft and grow from the eyes after a week even if stored in the same manner.

    If these trends continue, I expect possession of a middle class income will be next to meaningless within 5 to 7 years. You simply won’t be able to buy any goods worth having with it. The current whitegoods and food fiasco is the beginning of the end. Sure, we will scrape by. You can live on potato peelings if you have to. And there’s a kind of justice to it. The Western middle-class will finally get to share poverty with the third world workers they have directly and indirectly exploited.

  43. Sam
    January 25th, 2013 at 13:09 | #43

    @Ikonoclast
    Man, you need to stop shopping at junk stores like Harvey Norman. Good quality things still exist, but you have to buy online.

  44. Ikonoclast
    January 25th, 2013 at 14:14 | #44

    @Sam

    Fair enough point (not that I shop at HN very often). But with respect to refrigerators can you name a single brand worth buying now or are they all, as I suspect, junk? It’s no good naming a $10,000 or $20,000 millionaire’s brand unit and recommending it for the average middle class person.

    I’ve noticed a phenomenon now in consumer blogs where one set of people will say brand X is good (fridges or whatever), “my brand X has lasted 10 years etc. etc.” Then another set will say I bought brand X (comparable model) in the last two years and it is junk. Of course, with any brand you will find a range of people from supporters to detractors based on personal contingent experience.

    However, there seems to be a pattern that once good and reliable brands can no longer be trusted at all. Quality has declined markedly. It seems to be bound up with parts (compressors etc.) all being made in places like India and China and then assemblage happening in places like Mexico.

    Essentially, the collapse in manufacturing in USA and Europe is accompanied by off-shoring to places that do it on the extreme cheap. In addition, experienced workers are laid off in USA and Europe and in the developing world the workforce, management and quality control still havr their training wheels on. In addition, late stage manufacturing capitalism is finding it harder and harder to squeeze profits from real goods. The push is to cheap, rushed, intentionally rapid-obsolesence products.

    There are some areas where this is not true yet, notably heavy manufactures, automobiles and solar equipment from the better quality manufacturing countries namely Japan, Sth Korea, Germany and sometimes still the USA (though less and less). In time, at little as 10 years now, it will all go the same way. The decline process is inevitable for reasons of physics (limits to growth and the law of entropy) and reasons of political economy (impending collapse of late stage capitalism).

    In the meantime, we all have to live, so the search for fridge that might last longer than a few years goes on. I still have a family. If I was an old curmudgeon (well I am that) who lived on his own (not yet), I wouldn’t give a rats. I’d build myself a Coolgardie safe and make do with that. One can live on dried, cured and salted meats and fish, pickles, preserves, root vegetables, powdered milk, flour, tea, damper, some fruit dried and fresh etc. Probably be far healthier than most modern diets.

  45. Ikonoclast
    January 25th, 2013 at 14:24 | #45

    As for the shop online claim, I looked and I saw all the usual suspects; same junk as in HN or other chain stores. Maybe I am looking in the wrong place?

  46. Mel
    January 25th, 2013 at 15:20 | #46

    Ikonoclast: “Clearly, as soon as 1 year warranty period is over they will break again within one year.”

    Retail/ manufacturer warranties don’t override stat warranties. I’m surprised by how many people don’t know this. Also, if a product has a major fault, you can demand a refund or replacement. You do not have to settle on a repair.

    And yes, Harvey Norman are in my experience, lying sleazy scum. I almost shoved a defective vacuum cleaner up the ar$e of a smug salesman on one occasion last year ;)

  47. Tim Macknay
    January 25th, 2013 at 16:07 | #47

    Essentially, the collapse in manufacturing in USA and Europe is accompanied by off-shoring to places that do it on the extreme cheap. In addition, experienced workers are laid off in USA and Europe and in the developing world the workforce, management and quality control still havr their training wheels on.

    This process in now in reverse.

  48. Ernestine Gross
    January 25th, 2013 at 17:31 | #48

    Ikonoclast, your talk about future food shortages had an impact on me. On a very small corner of my garden I’ve grown tomatoes and other vegies (water from the tank of course). I’ve got a substantial excess supply of tomatoes (all plants, grown from seeds, prospered this year, the year when tomatoes are relatively cheap in the shops). I wonder how long my enthusiasm will last. I am not into the manufacture of fridges as yet but yoghurt production is on the list.

  49. Jordan
    January 25th, 2013 at 17:47 | #49

    Here is a confirmation of theory of Nominal Surplus Circulation and Big Switch of supporting agregate demand by debt instead of income with lowered credit requirements and lower interest rate untill it hit the debt ceiling by Steve Randy Waldman

    http://www.interfluidity.com/v2/3830.html

  50. Jim Rose
    January 25th, 2013 at 18:53 | #50

    Katz, the Communist Party of each country was a conspiracy controlled and financed by a hostile foreign power that recruited members for clandestine work and used that apparatus to collaborate with espionage services of that hostile power. Their treason from 1939 to when Germany attacked the USSR is one of many examples.

    A contemporary analogy would be a Fundamentalist Muslim party running for elected office while partly funded by Al Qaeda, whose policies are dictated by Al Qaeda, and whose leaders and some members have aided Al Qaeda via espionage activities. It is not clear that free speech and free elections require a government to tolerate the existence of such a party, and that the government could not close it as a criminal conspiracy.

    The Venona intercepts revealed Wally Clayton, a leading official within the Communist Party of Australia, was the chief organiser of Soviet intelligence gathering in Australia. It was Venona intercepts that led Chifley to set-up ASIO.

    As Bob Carr recently recalled, PAUL Keating, as president of Young Labor in 1968, always referred to the Left of the ALP as “the comms”. important figures in the ALP Left were dual members of the Communist Party of Australia.

    See http://www.theaustralian.com.au/opinion/thankfully-whitlam-and-co-rescued-labor-from-the-reds/story-e6frg6zo-1225887763473 and Mark Aarons’ reply.

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