111 thoughts on “The reality wars are over. Reality won.

  1. Reality always wins, it’s just the cost it extracts from people too stupid to acknowledge that and the damage they do to those around them.

  2. As pleasing as the claim sounds, it isn’t so.

    Nonsense is still pervasive. The underlying paradigm that government is ipso facto pernicious persists. The elite continues to assert its right to rule — the 1% remains firmly in charge. Poor people are still being bombed because they are poor. Wanting a better life and being willing to work hard and take risks to have it is still not a reason for others to pay attention, but rather, to use them to instill fear in the ruled. There’s still no serious action on climate change. More money is still spent on killing people than meeting their needs. There’s still a war on drugs. People are still persecuted because they are gay.

    None of this is likely to be overturned any time soon.

  3. @John D

    I imagine PrQ was using “reality” in the sense of “not dogma based on something other than evidence and ethics” He might perhaps have intended it in a narrower sense — correspondence with observable data.

    Other places where reality remains on the defensive:

    God … most people still avow faith.

    Secular dogma:

    One must give incentives to the rich, disincentives to the poor, and inflict sufficient brutality on those who come on boats to make them imagine that the brutality from which they fled is the best of all possible worlds.

    We owe our descendants no duty AND debt is evil.

    Private hospitals and schools should be publicly funded.

    Ecosystem services should be traded for opportunities to give incentives to the rich. It’s best when doing this to talk about “jobs” and the evil of latte sipping chardonnay-swilling inner city elites.

    Brutalising animals is OK because they aren’t human. (but see exception for boat people)

  4. JQ

    Unfortunately, from webreading over the last week, about 99% of the population agrees with your statement. Without changing their positions.

  5. @Fran Barlow if people are still being persecuted because they are gay, you have forgot what it was like a few decades ago.

    social friction is totally different from living a secret life out of a real fear of violence and arrest.

  6. @Jim Rose

    More murders motivated by anti-gay bias occurred last year than any year since the National Coalition of Anti-Violence Programs began collecting data in 1998, the national advocacy organization reported this week.

    In 2011, 30 fatally violent hate crimes were committed against lesbian, gay, bisexual or transgender victims, 3 more than the previous year’s total. At the same time, overall reports of anti-gay hate violence were down last year. But the authors of the report don’t think the drop in reports of violence actually reflects a drop in violence. The National Coalition of Anti-Violence Programs collects its data through 41 member programs across the country who receive calls and reports of LGBT hate crimes in the local communities. The authors of the report said they suspected a link between the rise in murders and the drop in overall reports of violence — when more murders occur the small centers are overwhelmed and able to conduct less community outreach.

  7. The reality wars are far from over, just visit the blogs of Andrew Bolt or Piers Ackerman. Fran Barlow makes some great poimts about social issues but the actions of Newman and Co also show that reality is far from the minds of many.

  8. Surprising to witness such Panglossianism from JQ, and ironic so close on the heels of the IEA’s latest World Energy Outlook. It’s entirely clear that the Fossil Fuel Mafia have won so comprehensively that in effect they could withdraw right now, retire to their well-supplied bunkers and watch the cash roll in while the world (left with no conceivable way to avoid 4-6deg of warming) fries.

  9. @Crispin Bennett

    Fran’s attempt at a tight definition “correspondence with observable data” is the best place to start. Even limiting the definition to that of objective, observable reality and evidence derived from empirical observation we would have to say humanity, as a whole, has scarcely begun to get a grip on observable reality. I mean beyond the mere “biological perception” of reality which
    is common to all related animals (say mammals) with similar sets of senses.

    Most of humanity still believes implicitly in sets of religious and cultural myths. The major religious positions are Christianity, Islam, Hinduism, Buddhism, Atheism/Agnosticism (and so called “Folk Religions”). All of the major religious/cultural myths are essentially mutually truth exclusive. If one is right then all the others are wrong. Since none represents a majority of humanity then the majority of humanity is wrong about reality even if one of the major religions is right. Science however has shown very conclusively there is no real fact or evidence basis for any of the religions. They are all inventions. They are all wrong.

    According to some sources, basic scientific literacy, even in the West, extends to only about 5% of the adult population. This is when setting a reasonable standard for the test for scientific literacy. Given this statistic, the basic scientific literacy of the entire world’s adult population must be of the order of 1% or less. A basic understanding of the deeper philosophical problems of knowledge (epistemology) and belief would not belong to more than .1% of the population. In this sense, humanity has barely begun to grapple with the problem of understanding reality.

    Given this poor scientific and philosophical understanding and the lack of ability to think critically, is it any wonder our poulation is easily manipulated by religious, cultural, political and economic propaganda? No, we have not even begun to fight the reality war properly. We are still primitives. Science is the mere plaything of consumerism and militarism. The existential crisis of climate change, species extinctions, resource depletions etc. must mature us or destroy us.

  10. I think, Prof Q, it would be more pertinent to say that science won, or that denialism lost.

    – the campaign allegedly hinged on Superstorm Sandy, which was the chicken of AGW coming home to roost in the face of the deniers;
    – Romney’s campaign team still believed that they were going to win right up to election night because they swallowed the Rasmussen line, which was the reason they thought visiting Pennsylvania would be a good idea to expand the map because they already had the swing states won;
    – Nate Silver’s psephological methodology has been comprehensively proven correct, in the face of Rasmussen getting every swing state three to six points wrong, and Gallup getting their national polls over seven points wrong;
    – Karl Rove still denied the election result when everyone else had called it, and had to have electoral logic explained to him live on Fox News, slack-jawed and aghast.

  11. David Petraeus has to face up to the reality of his failure in war and the US has to face up to the reality of the failure of their military.

  12. I hate to burst anyones bubble but
    Arizona woman runs down husband with car for not voting: police
    http://news.yahoo.com/arizona-woman-runs-down-husband-car-not-voting-045426220.html
    She claimed that she was enraged because she expects tha hardship that will come if Obama was reelected. And that fear had some reasoning behind. That is what they were told by their boss.
    Under Citizen United rulling in USA companies have the right to spend money on election campaigns and that also includes puting the employees to work campaining. There was a lot of bosses who had sent emails to their employees to vote for Romney or they can expect hardship if Obama is reelected.
    This “lady” must have taken those threats by bosses very seriously

  13. The reality war nor the cultural war has been won strictly speaking, look around how many Religious Fundamentalist there are still, how much people still deny AGW, how much influence the Tea Party still have over the Republicans and don’t even get me started on EU’s austerity.

    There is nothing wrong about being optimistic, but this is simply too far from reality itself. I don’t see much point of this thread and the cultural war thread other than asking for trolls.

  14. Whilst I agree to some extent with M0nty ( afterall he is a cricket lover) reality has not won until those challenged by reality fess up.

    This has neither occurred in the US nor here.

    the reality challenged Catallaxy is performing as though nothing happened at all as M)nty would undoubtedly concur with.

  15. Perhaps the question is which reality reigns. Obviously the Democrat win didn’t suddenly change the minds of the millions who believe science is communism in disguise, but it may mean they can be safely ignored and progress can occur.

    History reminds us that the next generation of conservatives will mostly accept the science and then try to take the credit for the innovations it wrought.

  16. No reason for leftists to educate Cataplexy or any other assemblage of fascisto-frotteurs to change their ways.

    These folks are the best weapons of the Left.

    The punters take one look at them and take to wearing garlic around their necks.

  17. @Greg vP

    That must be one the most comprehensive misreadings of a futurism blog ever.

    Yes, that’s it, Greg. Expect the left to go full steam ahead with neuro reprogramming in response to the recession. It’ll be Labor Party policy in no time.

  18. @JB Cairns
    Catallaxy had an extraordinary day a couple of days after the recent US election. The whole site seemingly went crazy. There is a normal level of unreality about the place, but this was some sort of strange attractor, or singularity of non-spatial existence. It was amazing to watch. Kates’ execrable pile of filth on Quadrant about “damaged women” was merely the tip of the submerged garbage barge.

    The only way for the reality-challenged is to burrow further down the rabbit hole. At some point they’ll dig their way to China. Which, to mix a metaphor, probably means they will turn Communist. After all, Dubbya did nationalise the banks, so anything is possible from the neocons.

  19. @Katz
    I did so want Kates’ Quadrant piece on the election to blow up in the MSM. That would have been glorious. It’s only a matter of time before the seedy side of the right on the Webs comes in contact with polite society, given how the hard right of the LNP is increasingly powerful within the party, as evidenced in preselections.

    There’s an decent yarn unfolding about how the Tea Party experience is being brought to Australia, yet to be told. One wonders if any of the Canberra press gallery will get off their comfy chairs and discover it. Probably not.

  20. JB Cairns :Whilst I agree to some extent with M0nty ( afterall he is a cricket lover) reality has not won until those challenged by reality fess up.
    This has neither occurred in the US nor here.
    the reality challenged Catallaxy is performing as though nothing happened at all as M)nty would undoubtedly concur with.

    but “fessing up” ain’t going to happen.

    isn’t there some saying along the lines of

    “science advances funeral by funeral”

    there were people who truly believed that if they were inocculated for smallpox with cowpox they would turn into cows.
    it didn’t matter that the inocculated didn’t turn into cows,those who believed it,died believing it.

    i saw a map of the world according to the flat earth believers,from the north pole naturally.
    Australia was the right width but really,really thin.which is a big surprise to the truckies on the north south run.

    so is separating education from religious indoctrination as a receiver of monies from the public purse a possibiliy?

  21. It’s interesting to see so many confusing ‘reality’ with what’s printed in right-wing blogs. I personally don’t give a stuff what The Australian thinks about climate change. I do give a stuff that the FFM has decided that it can, and we must, live (or die, mutatis mutandis) with 4-6 deg of warming.

    In a long-term sense, JQ’s right that reality will win, ’cause it (physics, essentially) is going to heap disaster upon us. But cognisance of reality, which I presume is what’s being talked about here, has no effect whatsoever on what’s happening to our increasingly blighted planet, and there’s not even one remotely plausible route to its doing so. Marx, it seems, was right about superstructure/substructure, after all.

  22. Reality won, eh? Will someone please tell that to Jaques Derrida and the folks in the cultural studies department?

  23. I would like to return to examples of home grown “bone headed stupidity,” namely the renewed calls for the privatisation state owned infrastructure, particularly electricity assets, including the distribution networks which are natural monopolies. It would appear the “zombies” are restless at the Productivity Commission and Infrastructure Australia.

    The argument goes that electricity is cheaper in Victoria simply because their electricity assets were privatised. I have a suspicion there might be a little more to it than that.
    I well remember the arguments that were put to justify the sale of Telstra. Arguments I am hearing again. I fear unless a concerted effort is made to counter the free market dogma eminating from bodies like the Productivity Commission and Infrastructure Australia ” reality” will lose out, and the public will see essential services like electricity and water in private hands.

  24. see Expressive voting and identity: evidence from a case study of a group of U.S. voters by Arye L. Hillman free at Public Choice http://link.springer.com/article/10.1007%2Fs11127-011-9784-0?LI=true

    Hillman analyses Jewish voters as expressive voters: “Jews earn like Episcopalians and vote like Puerto Ricans” many American Jews vote contrary to their economic self-interest. This is consistent with expressive voting – voting for symbols rather than policies that work.

  25. @Mel
    @Jim Rose

    That’s one of the clearest examples of the right’s break with reality. Conservatives seem genuinely mystified by the reluctance of Jews to vote for a political party that waves the bible around while demanding racial purity, Christian supremacy, aggressive military expansion and crackdowns on ethnic minorities.

  26. @Jim Rose. Jim I can only go by lived experience. When Telstra (a government owned monopoly) was privatised we were promised a free market utopia. What we ended up with was private telcos including Telstra saying they could only see a business case for rolling out high speed broadband in major capital cities. Hence the NBN,and taxpayers forking out eleven billion dollars to access telecommunications infrastructure they once owned. Jim I do not lay awake at night, nor I suggest do many other people, wishing they had a second or third power cable or water main running down their street. Nor is it practical. But this is the only way you get real competition. Which is why such services are referred to as natural monopolies. Which is why they should remain in public ownership. That way the buck always stops with the elected government.

  27. Rosey:

    “This is consistent with expressive voting – voting for symbols rather than policies that work.”

    Nope. Let me amend that sentence to make it reality based:”This is consistent with [sensible] voting – voting for [good policy] rather than policies that work to make the elites richer and screw the poor and hated minorities, for example gays.”

    You are aware aren’t you that Romney had no plan to improve the US economy and that he wanted to waste money on dopey projects like buying unneeded warships to match the number in operation during the steamboat era.

  28. @Richard McGuire John Quiggin is an inadvertent excellent critic of state ownership.

    He has devoted much to showing that governments are so incompetent an owner and so incapable of running a process free of politics that governments – mostly recently in Queensland – cannot even sell a state owned enterprise for a good price under the full glare of the media and the public. Imagine how hopeless day to day state owned enterprise decision making is much farthur from the public eye?

  29. @Mel Romney had plan to improve the US economy. you may not agree with it, but he still had a plan:
    1. making the U.S. energy independent;
    2. getting people into job training;
    3. opening more free trade with Latin America;
    4. cutting the deficit; and
    5. reducing taxes on the middle class.

  30. @Jim Rose. Sure Jim, but tell me, would like a second or third power cable or water main running down your street ? This is how real competition works. Do you think it would be cost effective ? If your answer is no. Your solution appears to be a privately owned monopoly. Private enterprise can also stuff up you know. Have you not heard of the GFC ?

  31. Rosey:

    “1. making the U.S. energy independent”- No. Romney had no plan to do this, only a slogan. Besides, any such plan would constitute central planning and thus contradict everything Romney says he stands for.

    “2. getting people into job training” To do this properly costs a fortune (see the European examples) and there is no way Romney would have funded anything meaningful. Besides, anything meaningful would constitute central planning and … well .. you know the rest.

    “3. opening more free trade with Latin America” So he wants to end the Cuban embargo? Big deal. Or what else, precisely, do you mean? Can you also point to the modelled growth? Oops, did I just mention models? Sorry …

    “4. cutting the deficit” – Not likely given his plans for military expansion. Moreover, why would this be a good idea during the Great Recession?

    “5. reducing taxes on the middle class.” Right. So he actually wants to increase the deficit. Glad we got that sorted.

    As I say, Romney had no plan. He had a Pink Elephant hiding in an Oak Tree while eating Boysenberries and called it a plan, but that doesn’t make it so.

  32. @Jim Rose
    1. is proof that reality can not win with conservative dogma, not the way they propose with drill baby drill. Only way to make US energy independent is to cut oil subsidies and spend that for developing alternatives. all of them.
    2. job training will not produce job offerings, only more skilled unemployed.
    3. will provide some cheaper products at the expense of more unemployed,
    4. and 5. are contrary to each other even assuming that Romney proposal included only middle class as you sneakilly added.
    Reality can not win with conservatives beacuse they deal with false facts not because thay are not smart. But facts are chery picked based on anecdotal evidences.
    Or chery picking the facts from different point of view then the argument.

  33. @Mel
    “Oops, did I just mention models? Sorry …”

    Models are only unreliable when climate scientists calibrate them using transparent, publicly available values drawn from rigorous, evidence-based data.

    By contrast, we can always trust a projected economic model that relies on private companies promising that they’ll grow in size and be wildly successful with an absolute minimum of waste.

  34. @Jordan

    I’m going to disagree with point #1. There’s a strong possibility that the US is sitting on massive deposits of oil that can only be extracted in the dirtiest, most environmentally damaging ways known.

  35. @Jim Rose
    Reality can not win with conservatives on privatizing monopolies that are in government hands.
    Market is best at picking the winners and loosers to get best results. That is what everyone agrees with.
    But there is no market at monopolies like broadband cables, power lines, water providers, education providers, police, fireman and so on. Arguing that the market is the best for things that effectively do not have markets is reality that will hardly puncture alternative reality conservatives take.

  36. @Sancho
    You are correct about energy reserves in the ground, but at what price are they extractable?
    Without subsidies, at what price? Without externalities?
    At what energy usage to extract a unit of energy?

  37. Mel, from http://economistsforromney.com/
    President Obama has:
    • Relied on short-term “stimulus” programs, which provided little sustainable lift to the economy, and enacted and proposed significant tax increases for all Americans.
    • Offered no plan to reduce federal spending and stop the growth of the debt-to-GDP ratio.
    • Failed to propose Social Security reform and offered a Medicare proposal that relies on a panel of bureaucrats to set prices, quantities, and qualities of healthcare services.
    • Favored a large expansion of economic regulation across many sectors, with little regard for proper cost-benefit analysis and with a disturbing degree of favoritism toward special interests.
    • Enacted health care legislation that centralizes health care decisions and increases the power of the federal bureaucracy to impose one-size-fits-all solutions on patients and doctors, and creates greater incentives for waste.
    • Favored expansion of one-size-fits-all federal rulemaking, with an erosion of the ability of state and local governments to make decisions appropriate for their particular circumstances.

  38. @Jim Rose
    This is a pure lie. Opposite of the truth.
    (Obama) “and enacted and proposed significant tax increases for all Americans.”

    Local governments raised fines and fees and taxes because fall in real estate based income to local gov. fell abruptly.

    “• Offered no plan to reduce federal spending and stop the growth of the debt-to-GDP ratio.”

    Can you find any negative consequence of high debt or deficit in USA? Please, i would really appreciate if you can find one, because i looked for it and could not find it. Please.
    They say it is an investors confidence that suffer from high debt of government. Since i was a businessman i can tell you that i never tought of taxes or government’s debt before i needed to hire someone. Only thing i worried was; would i have this preassure to to keepanother worker in the future from higher number of orders? Government debt is never an issue for a businessman.
    Except for those that make money on interest on government debt, never a tought and i still could not find a way it could be an issue for hiring.

    “• Failed to propose Social Security reform ”
    Can you explain to me why the SS needs reform, because i can not find one reson for it? Can you find out how much did SS contribute to the deficit?
    I know, they say it is about unfunded future liabilities. Can you tell me how much are unfunded future liabilities for defense department?
    Can you tell me how much are all future unfunded liabilities for US budget and do they matter for something or are they correct?

  39. Lies, distortions and red herrings. Obama raising taxes is complete bullshit, for example. He has actually lowered federal income tax rates and passed other cuts. Only by counting those penalty taxes associated with ACA non-compliance, and discounting all the reduction and extensions that by any definition provide net fiscal relief is that remotely true.

    The other items are equally problematic and dishonest.

    The best and only coherent economic argument for Romney was made by Chait in his epic nymag article, which was essentially that Romney’s key economic advisers understand counter-cyclical economics, and the need for monetary and fiscal expansion, and Romney is a technocrat, so beyond the campaign when he becomes responsible for economy, he would pass stimulus appropriately reframed for their creduluous base, and he would at least have a better shot at passing that through the Republican Congress than Obama.

  40. “Sure Jim, but tell me, would like a second or third power cable or water main running down your street ? This is how real competition works.”

    Early power and gas companies in the US did exactly that.

    “Private enterprise can also stuff up you know. Have you not heard of the GFC ?”

    That was a combination of market failure and government failure.

  41. @Jim Rose
    That still does not explain the reality that there is no market at monopolies, market which conservative use as argument that it will make monopolies better.
    Market does not exist for monopolies or network industries.
    Deffinition of monopoly….?
    So what is the true reason to privatize monopolies? When it is well known that government is providing services at bellow market price and equitably, hence automatic loss to budget but more then equal benefit to industry and people.
    Why to take away such huge benefit from industry and people? For whom is taken away?

  42. “The reality wars are over. Reality won.”

    If only this were true. Trying to be optimistic, the disastrous consequences of the over-burdening of our poor, unappreciated planet are ever more apparent and this can only become the general view. But that won’t change the mindset of those who believe what they prefer to be true, and the shift in position will soon be rationalized away.

  43. Jordan, if the government wants to see a service sold at below cost, they can subsidise it out of the budget, plain for all to see. prescription drugs are subsidised.

    why did the government own TAA? airlines are not a natural monopoly.

  44. Jordan, you did not look very hard for negative consequence of high debt or deficit in USA. Obama has presided over the weakest recovery since the Great Depression:
    • Government Policies and the Delayed Economic Recovery. Editors: Lee E. Ohanian, and John B. Taylor, September 02, 2012.

    • The Economic Crisis from a Neoclassical Perspective by Lee Ohanian. Journal of Economic Perspectives, Fall 2010, pp. 45-66.

    • Ellen R. McGrattan & Edward C. Prescott, 2012. “The labor productivity puzzle,” Working Papers 694, Federal Reserve Bank of Minneapolis.

    • Fiscal Sentiment and the Weak Recovery from the Great Recession: A Quantitative Exploration by Finn E. Kydland and Carlos E. J. M. Zarazaga, 2012

    John Taylor has published too many papers to mention since 2007 on how bad government policies are prolonging the great recession

  45. @Jim Rose
    do you plan to ignore most of my questions?
    I was really hoping that while searching for answers you would be able to see the reality, … ah ..well
    Why did the gov. own TAA? don’t know.
    Maybe you know why did gov. own internet?
    Or atomic bomb? Or nuclear reaserch for power source? Or why did gov. own satelites? GSP? Or why does government own money?
    Do you know?

  46. @Jim Rose
    I guess you are trying to say that gov. debt is taking away from private investment at 1% interset rate. Are you really serious?
    1% interest profit is more attractive then 3% or 5% interest profit???
    Whom are you kidding?

  47. The reality is that despite four years of wilful and obstructive behaviour the Repubs were unable to gather sufficient support to lead govt. They must now compromise or take the full blame for the consequences.

  48. Jordan, many of your questions are answered in the links provided and at http://johnhcochrane.blogspot.co.nz/2012/11/debate-with-goolsbee.html#more where cochrane argues that
    ” by what economics is the central key to escaping sclerotic growth that we should sharply raise marginal tax rates on investment and business formation? When, ever, has a society experiencing sclerotic growth restored robust prosperity by a tax-based redistribution?”

    perhaps you could answer this question?

  49. @Jim Rose
    I can not answer that question because i never thought about it and i do not know if anyone is proposing to do it that way, but i can answer this question;
    ” by what economics is the central key to escaping sclerotic growth that we should sharply raise marginal tax rates xxxxxxxx? When, ever, has a society experiencing sclerotic growth restored robust prosperity by a tax-based redistribution?”
    I erased from your question that which noone is proposing or suggesting in order to answer it.

    Lets imagine an equilibrium economy. with everything constant and everyone spends all income and everyone is employed and capital is constant 0% inflation. Equilibrium.
    Everything is fine, but oops, someone is born, another mouth to feed, to school, to clothe. But since it is equilibrium that new person will stay unemployed and to be fed and clothed it has to be taken from someone else. And now it is a same amount of money but more people, what will happen?
    Same amount of money but more food and clothes needed, what will happen?
    What will happen in equilibrium if one person get to keep more and more money while the amount of total money is same?

    We are not in sclerotic growth, we are in sclerotic recovery.
    Any sclerotic growth with cash reserves of the companies high and extreme wealth aslo high and majority of people without good income and with high unemployment, like we are in now the answer to boost the economy is high marginal tax rate. Or transfer of frozen wealth to those that will use it or need it and which will go back to those on the top again and send it down trough tax again and again. It is called surplus circulation as Yanis Yaroufakis calles it (even tough he applys it mostly to global movement of money and trade).
    It is called SURPLUS CIRCULATION. Since it is heterodox term i will explain it again.
    Movement of money in economy
    ->wealthy (or who has money and idea)->worker->product->wealthy->worker->
    YOu see the movement from wealthy trough production to workers who buy products with money going back to owners. It is a circle of money flow.
    Now if you cut the flow and stop it at one place which naturaly is at the wealthy and keep accumulating it. Can you make the wealthy keep the circle flowing if he will lose by keeping the flow like in deflation would happen? no you can not. Except by taxes, which will redistribute that accumulated capital (frozen) to the ones that will now have enough to buy products the wealthy produce.
    It is frozen capital, or in todays case it is frozen at government debt since there is no other place to invest, there is no buyers (poor workers) of possible products.
    Capital would freeze in stock market too since price of stocks are no benefit to companies, stock prices are reflection of a company’s equity value. There is no benefit in capital inflow to companies past IPOs.
    Surplus not as in Marxists sense but in discretionary income, savings sense. Savings that will never, never be used for products or services, or never be invested into production.
    Surplus as in so much wealth that it will be frozen in financial assets that will only produce more wealth that will never be spent on services. Something like investing capital on capital to produce more capital. It is frozen in productive sense.
    So such surplus has no way of reaching production and purposeful use unless taxed and redistributed to those that will use it.

  50. The period of most prosperous growth of USA was with the highest marginal tax rate ever 94%.
    Period between 1950-1965 in communist Jugoslavia which had really progressive tax was of world record growth average 12.7%. for 15 years.

  51. Or to use simpler wording.
    High marginal tax rate is a way to move capital from unproductive part of GDP to productive part, trough those that will benefit from and know how to use it best. From investing capital on capital (frozen kapital) to investing in production.
    Amount of money or GDP number itself will not change. For that you need to print money, since private banks won’t do it anymore, there is too much risk for banks, then the government must in order to raise GDP number itself and with that to reduce deficit.

  52. “The reality wars are over. Reality won.”

    True iff you adjudicate who won by reference to reality. Which is kinda taking a side in the whole war, which is, tragically, ongoing. Seems some people just don’t know when they’re beat – in reality.

  53. Jordan, marginal taxes are about one-third higher in the major EU states so per capita incomes are about 1/3rd lower that the USA.

    the Swedes had the third-highest OECD per capita income, almost equal to the USA in the late 1960s, but higher levels of income inequality.

    By the late 1980s,Swedish government spending grew from 30 percent of gross domestic product to more than 60 percent of GDP. Swedish marginal income tax rates hit 65-75% for most full-time employees as compared to about 40% in 1960.

    Swedish economists encountered a new phenomenon they named Swedosclerosis:
    1. Economic growth slowed to a crawl in the 1970s and 1980s.
    2. Sweden dropped from near the top spot in the OECD rankings to 18th by 1998 – a drop from 120% to 90% of the OECD average inside three decades.
    3. about 65 per cent of the electorate receive (nearly) all their income from the public sector—either as employees of government agencies (excluding government corporations and public utilities) or live off transfer payments.
    4. No net private sector job creation since the 1950s, by some estimates!

    In 1997, Lindbeck suggested that the Swedish Experiment was unravelling.

    Sweden is a classic example of Director’s Law. Once a country becomes rich because of capitalism, politicians look for ways to redistribute more of this new found wealth to the middle class.

    HT: http://www.project-syndicate.org/commentary/the-three-swedish-models

  54. Can someone explain to me why, in Obama’s first post election speech, the only ‘sound-bites’ I heard were about tax cuts, and not just to the rich?

  55. @Jim Rose
    Where are important statistics?
    Why do you consider the growth as all important? What for?
    If there is an equilibrium and no population rise, why would you expect the growth?
    What do you need the growth for?

  56. For a very long time, I find the discussions involving Jim Rose very amusing. It is like observing a randomisation process in verbal arguments under the control of Jim Rose.

  57. Important statistics are unemployment rate and wealth distribution.
    Sweden has the most equal wealth distribution in the world.
    Bottom 20% people hold 19% of wealth
    Secong quintile 20%
    Third 20%
    fourth 20%
    top quintile holds 21 %
    Income distribution and tax scheme made it so equal.

    Usually the reason for growth is to have healthy economy, to fight inflation and low unemployment.
    But reality is that growth is needed to follow the population growth so that they have jobs available for new people entering the economy and inflation is there so that there is new money to cover for new products needed for new population.
    I was asking the questions in hope that you will try to answer them. In hope that you will see what are your priorities but to no avail.
    You were probably thinking that answers are too obvious, but they are not. They reveal motivations for such economic philosophy that has no purpose but to make rich richer.
    While the central purpose of economic philosophy should be full employment, reduced suffering and maximised prosperity.
    All your conservative philosophy is for making rich richer.
    In todays time technology is such that all food and production needed for survival is done with about 15% of workers, food with only 1% population, rest of them is to make life easier and nicer for everyone. But no, some wants it all for them only.

  58. @Ernestine Gross
    Isn’t that how usual argumenting with conservative goes? Loosing an argument then jumping to another one in order to avoid conceiding the point.
    The conservative reasoning process most probably look the same as their arguing process.

  59. @Jim Rose

    why did the government own TAA? airlines are not a natural monopoly.

    I think you might have history backwards here. The government created TAA to counter the ANA monopoly, didn’t it? TAA and ANA/Ansett-ANA acted a bit like a duopoly for a long time, but they did pioneer safe, good quality air transport in Australia when no one else wanted to. The feeling at the time was that TAA kept a lid on what Ansett might charge.

    It is possible to evaluate these things in terms of cost-benefit. Public and private systems have advantages and disadvantages which can be more-or-less evaluated in economic terms rather than relying on abstract value systems. I don’t know if you’ve ever been in business but the universal objective is to charge customers as much of the utility of the product as you can get away with, where public services only have to cover costs. This may or may not be a big issue. Private is typically better where genuine competition conditions exist because it is usually more innovative and responsive, but not always, eg, the US highly-privatised health care system costs about twice per capita as much any other country to provide a service with outcomes that equal countries spending a tenth as much.

    What beats me about you guys is that you are happy to pull a magical principle out of somewhere that precludes one option.

  60. @Ernestine Gross

    Yes, in some cases it is best not to argue or engage in discussion with certain posters. More generally, it is interesting to consider how many people have ever changed an opinion via blog argument and associated (personal) research prompted by said blog argument.

    I have changed one personal view. Namely, that I now view some renewable energy EROEI (wind and solar esp.) as sufficient to sustain our economic systems (along with the associated and necessary energy savings) and thus avert a fossil fuels peak energy crisis.

    I now leave in the air the question of whether world economic growth can continue much longer. However, I have my doubts and suspect that if not an energy shortage then other material shortages, species extinctions, climate catastrophes and over-population will halt real economic growth within a decade or two.

    Ernestine’s and JQ’s severe doubts about some (many?) aspects of MMT have given me pause and made me more cautious about MMT claims. However, I am still a Keynesian with a Functional Finance twist in pragmatic terms and a kind of a Green Marxist with an evolutionary rather than revolutionary bias in “academic” and idealistic terms.

    Unless corporate, oligarchic capitalism is at least morphed into a kind of worker collective capitalism (where the capital belongs to the workers’ collective of each enterprise rather then to capitalist owners, “rentier” shareholders and executive managerialists) then I see little chance of the economic system or the entire political economy ever being properly responsive to the legitimate right and needs of the workers and the masses of ordinary people.

  61. Ikonoclast :@Ernestine Gross I now leave in the air the question of whether world economic growth can continue much longer. However, I have my doubts and suspect that if not an energy shortage then other material shortages, species extinctions, climate catastrophes and over-population will halt real economic growth within a decade or two.

    Malthusian predictions have invariably been proved wrong throughout history, though it never stops people making them and changing the terms of prediction once disproved.

  62. @Ikonoclast
    Yes i thought so too, in some cases is better to leave them be, like in cases when due to lack of contradictory arguments readeship dwindles so that blogers are forced to beg friends to contradict comments to spark discussions. Maybe JIm Rose was such case.

    I do not believe that we can keep heating the earth at this pace and not cause more issues. Even tough i believe it is the heat energy that is taken from earth and placed into atmosphere more of a problem then C02 emmissions. It is like placing a giant heater on earth and expect not to get wormer. So even solar project trap more energy and keeps it here on earth, not nearly as much as fosil fuels but still..

    I am also proponent of worker cooperatives but in evolutionary ways not revolutionary as you say and the idea is slowly building up to the critical mass.
    Tough, there is a problem with it too. I am from Croatia, former Yugoslavia republic where worker collectives were implemented in the whole country after WII. I am learning more and more about resons why it did not succed.
    The main reson was the private property instinct, wish to keep the gains in power and distribution. There was a rulling class, a bit tougher to find it in worker collectives, but there was a rulling class.
    It was a bureaocracy within collectives that decided distribution of surplus and they steared it to themseves slowly but more noticably. Reforms in 1963 tried to deal with it and failed. Praxis schoolars argue that it was the middle level of state aparatus that prevented reforms which aimed to spread collective power of workers themselves from factory level to national level. State top administration with Tito and Kardelj wanted to do reforms but republic bureaocracy which held distributive power did not. So they kept on thinking about preserving the privilege but economy needed constant work and development (central planing). Decission makers were more and more mired in preserving their status then solving the real problems in economy. They became inert and were doing only ad hoc solutions. With the pressure from kapitalist world and foreign debt Yugoslavia’s rulling class was easily lured into capitalist thinking and saw a loot that was theirs for taking, but fought a war over loot in the end.
    We are now private money neoliberal paradise.
    Same what happen with a lot of Sillicon Valley start ups that started as workers collective but switched to private ownership of those that started it as soon as there was a lot of profit to share. Private ownership instinct was stronger then collective philosophy.
    Richard Wollf had a nice description in his last Economic update on how to solve that. It will require a school system with emphasis on liberal arts education and civic purpose to prevent privat ownership instincts. But we see that those courses and schools are dissapearing in privatized systems.
    http://rdwolff.com/content/economic-update-puerto-rico-colony-and-laboratory

  63. @Ikonoclast

    I have benefitted a lot from JQ’s blog and also from some commentators, you included. On political matters (where my ignorance was – or still is – most outstanding) I’ve reached a possibly temporary conclusion, namely: Sensible Labour and sensible Liberals and sensible Greens are all social democrates with slightly different shades of emphasis. The quality of the policies depend on the quality of the people whereby I would consider honesty to be a ‘key performance indicator’ for quality. The rest of them I call ‘neocons’ (the con bit is so ‘realistic’ in my subjective opinion, and I don’t have to distinguish between ‘left’ and ‘right’) in my private mental model. This is some progress, No?

  64. @Jordan google harold demsetz 1968 why regulate utilities. discusses how when there is so called natural monopoly, competition in the market is displaced by competition for the market. franchises can be used to replaced utility regulation with auctions to supply the market at the lowest price and cost.

    the franchising response to natural monopolies dates back to the 1850s.

  65. @Ikonoclast
    Yes i thought so too, in some cases is better to leave them be, like in cases when due to lack of contradictory arguments readeship dwindles so that blogers are forced to beg friends to contradict comments to spark discussions. Maybe JIm Rose was such case.

    I do not believe that we can keep heating the earth at this pace and not cause more issues. Even tough i believe it is the heat energy that is taken from earth and placed into atmosphere more of a problem then C02 emmissions. It is like placing a giant heater on earth and expect not to get wormer. So even solar project trap more energy and keeps it here on earth, not nearly as much as fosil fuels but still..

  66. My post has not been moderated for 4 hours so i am reposting it in two parts
    @Ikonoclast
    I am also proponent of worker cooperatives but in evolutionary ways as you say and the idea is slowly building up to the critical mass.
    Tough, there is a problem with it too. I am from Croatia, former Yugoslavia republic where worker collectives were implemented in the whole country after WII. I am learning more and more about reasons why it did not succed.
    The main reason was the private property instinct, wish to keep the gains in power and distribution. There was a rulling class, a bit tougher to find it within worker collectives, but there was a rulling class.
    It was a bureaocracy within collectives that decided distribution of surplus and they steared it to themseves slowly but more noticably. Reforms in 1963 tried to deal with it and failed. Praxis schoolars argue that it was the middle level of state aparatus that prevented reforms which aimed to spread collective power of workers themselves from factory level to national level. State top administration with Tito and Kardelj wanted to do reforms but republic bureaocracy which held distributive power did not. So they kept on thinking about preserving the privilege but economy needed constant work and development (central planing). Decission makers were more and more mired in preserving their status then solving the real problems in economy. They became inert and were doing only ad hoc solutions. With the pressure from kapitalist world and foreign debt Yugoslavia’s rulling class was easily lured into capitalist thinking and saw a loot that was theirs for taking, but fought a war over the loot in the end.
    We are now private money neoliberal paradise.
    Same what happen with a lot of Sillicon Valley start ups that started as workers collective but switched to private ownership of those that started it as soon as there was a lot of profit to share while new entrants became employees only. Private ownership instinct was stronger then collective philosophy.
    Richard Wollf had a nice description in his last Economic update on how to solve that. It will require a school system with emphasis on liberal arts education and civic purpose to prevent privat ownership instincts. But we see that those courses and schools are dissapearing in privatized systems.

  67. @Jordan

    The main reason was the private property instinct,

    I spent over a month touring workers councils and BOALs and studying associated labour in Yugoslavia in 1980. I have followed it since but not in detail.

    In my view the main reason was not “private property instinct”, but as you point out:

    It was a bureaocracy within collectives that decided distribution of surplus and they steared it to themseves slowly but more noticably.

    and

    Decission makers were more and more mired in preserving their status

    but importantly:

    foreign debt

    .

    Your comment:

    State top administration with Tito and Kardelj wanted to do reforms but republic bureaocracy which held distributive power did not.

    is interesting as Tito died in 1980. Are you suggesting that these problems disrupted selfmanagement in the 70’s.

    As I recall, strikes (mostly over workers income) increased in the 1980’s. Right-wing commentators often try to invoke some idealistic interpretation of apparent self-management failure. The far left (including anarchists) do also. These views can coalesce as in the case of the Yugoslav Praxis .

    You can see a right-wing misinterpretation in the British Journal of Political Science – v10, n3, July 1980: G. Shabad, Strikes in Yugoslavia: Implications for Industrial Democracy.

    Nonetheless, with this experience, the theory of associated labour and self-management is a viable form of alternative to capitalism. Whether this is by evolution or not, depends on circumstances, not theories.

  68. Jordan :
    @Jim Rose
    I guess you are trying to say that gov. debt is taking away from private investment at 1% interset rate. Are you really serious?
    1% interest profit is more attractive then 3% or 5% interest profit???
    Whom are you kidding?

    American capitalists prefer to invest millions at low interest, than thousands at higher interest.

    Fact of life. This also leads to Third World underdeveloped, because hopeful microstates able to service small loans are denied this opportunity as capitalist funds all swarm to larger economies.

    Borrowers seeking funds in Switzerland, even with good interest prospects were rebuffed, even as millions were made available to multinational corporations at lower rates.

    Bloody reality wins again.

  69. @Jim Rose
    I guess you are trying to say that gov. debt is taking away from private investment at 1% interset rate. Are you really serious?
    1% interest profit is more attractive then 3% or 5% interest profit???
    Whom are you kidding?

    American capitalists prefer to invest millions at low interest, than thousands at higher interest.

    Fact of life. This also leads to Third World underdeveloped, because hopeful microstates able to service small loans are denied this opportunity as capitalist funds all swarm to larger economies.

    Borrowers seeking smaller loans in Switzerland, even with good interest prospects were rebuffed, even as millions were made available to multinational corporations at lower rates.

    Bloody reality wins again.

  70. @Chris Warren
    It was a bureaocracy within collectives that decided distribution of surplus and they steared it to themseves slowly but more noticably.
    Private property instinct was cause of that. What else could be the reason behind bureaocratic spontaneous strugle to preserve privileges; selfishness, greed? I just call it private property instinct. We know how strong it is.
    In a situation where, theoretically, everyone is same, works and contributes the same, why would one distinct class develop? They had privilege to distribute a surplus. Due to private property instinct, they steered it to themselves.

    Full decade before ’80 this poped up and Praxis was banned in 1974. The privileged class got hurt by their writings.

    There were mass demonstration of students in ’68. Students were the kids of privileged class, and their demands were for more rights. From whoom?
    Student demonstrations in Zagreb in ’71, for more rights from centralized directives. They were all demonstrations for more privilege. Those that enjoyed privileges wanted more.
    The rulling class used the students for demonstrations, cause they were too afraid to do it themselves, and Tito’s reaction after ’71 proved them right.
    It was much later that workers started demonstrations, once the difference in benefits of regular worker in production from benefits of bureaocracy became too obvious. It was more then 10:1 distribution difference in a country where everyone was taught that we are the same. And contribution was skewed and distribution was skewed toward bureaocracy. Hence, it was too obvious to ignore. But to no avail for workers.
    First it were demonstrations for privilege to distribute, then much later demonstrations against unequal distribution.

    Tito and Kardelj reforms failed in 1967.
    Rulling class demonstration in 1968, ’71
    Workers demonstrations in ’80s

  71. @Chris Warren
    That was my attempt to make him think about it, and was hoping that he would answer; ok, market is broken, which is opening for another attack.

    Honestly, i did not consider that but was thinking more on the line that investing in production became too risky. With a default on credit, no interest rate can help returns on loans. And Treasuries are super safe.

  72. @Jim Rose
    Yes. They didn’t have that or this utility so they joined forces to build it because private “entrepenuers” did not have resources or they saw no profit in it.
    Can you imagine building power line 20 miles for 20 houses. Only state would do that for the benefit of those 20 homes. Private utilities would demand those 20 houses to pay for all of it.
    Only state could do it.

  73. Jim,

    I would have thought it was a duty of a person such as yourself to explain to the innumerates on Catallaxy the methodology behind Silver, Wang and even our own Simon Jackman and why they were all getting the same results.

    Why were you silent? Was this another Lindzen moment for you?

  74. Jim Rose :
    @Jordan was there a reason for the stae owning utilities

    In a very large nutshell, since early days of Australian settlement there was some distrust about unfettered capitalism and having a large number of government businesses and a large scale of government involvement in the economy was accepted as a way to maximise social goals, Australia at the time being highly populist, egalitarian and unionised. TAA was just the latest in a line of GBE’s which only started being dismantled in the 80’s.

  75. @Jim Rose
    That’s a fairly weak point. There was two airline policy. AFAIK it was supposed to supply a level of competition while maintaining continuity, safety and quality of air service to a small dispersed population. Those were the days when governments were actually expected to make reality-based decisions that benefited the community rather than satisfy anyone’s rights of access to markets or enact particular world views, so you might consider forgiving them their ideological incompetence. (Those were the days!)

    You might note that at that time there was an even more limited market for air travel in Australia than there is now and there weren’t lines of entrepreneurs proffering alternate comprehensive services. (The airlines were expected to cross-subsidise their less profitable routes.) You might also note that despite deregulation, we remain very close to the two airline policy outcome so it’s likely the policy rationale was reasonably realistic.

  76. Good point, Jim Birch, when you write about “make reality-based decisions’ in the context of the size of Australia and its physical properties.

    “ideological incompetence” is a good one, too.

  77. Mel, from http://economistsforromney.com/
    • Reduce marginal tax rates on business and wage incomes and broaden the tax base to increase investment, jobs, and living standards.
    • End the exploding federal debt by controlling the growth of spending so federal spending does not exceed 20 percent of the economy.
    • Restructure regulation to end “too big to fail,” improve credit availability to entrepreneurs and small businesses, and increase regulatory accountability, and ensure that all regulations pass rigorous benefit-cost tests.
    • Improve our Social Security and Medicare programs by reducing their growth to sustainable levels, ensuring their viability over the long term, and protecting those in or near retirement.
    • Reform our healthcare system to harness market forces and thereby reduce costs and increase quality, empowering patients and doctors, rather than the federal bureaucracy.
    • Promote energy policies that increase domestic production, enlarge the use of all western hemisphere resources, encourage the use of new technologies, end wasteful subsidies, and rely more on market forces and less on government planners.

  78. @Jordan

    You need to be clearer wiht what you mean as private property. Is it personal private property, or private property in means of production.

    You cannot blame private (personal) property instinct as everyone wants possessions to improve life (even Robinson Crusoe).

    It is beholden on any economic system to serve and enhance this aspect.

    When bureaucrats took decision making away, this was done on the basis of gaining a free hand to solve a supposed economic crisis. (At least in the example of the shipworks used in the Brit. J. Pol. Sc., Shabad article I referenced).

    This was NOT a private property instinct. It is a forced deformation occasioned by economic circumstances.

    You cannot blame people for having natural instincts. Supposedly abolishing a private property “instinct” or economy does no good if collective property, and new communal “instinct” then seeks capitalist profits and debt-derived (hopeful) advantages – which often do not become true in reality.

  79. @Chris Warren
    I do not blame people for having natural instincts. I just state the proces and reasoning. I am not saying that such instinct should not be there, but just to know why workers collectives fail sometimes.
    Here is more about the process but since is a collections of writings from a lot of phylosphers and statesman it is sometimes contradictory but invaluable insigts.
    http://balkanologie.revues.org/index681.html
    Contradictions are that some claim that self-governing never reached further then factory level and sometimes claim that it wasn’t allowed but still claims that did not succede that which wasn’t implemented.

  80. Again in moderation, links are blocking it there, so i am reposting it with broken up link.

    I do not blame people for having natural instincts. I just state the proces and reasoning. I am not saying that such instinct should not be there, but just to know why workers collectives fail sometimes.
    Here is more about the process but since is a collections of writings from a lot of phylosphers and statesman it is sometimes contradictory but invaluable insigts.

    http : // balkanologie. revues.org / index681. html

    Contradictions are that some claim that self-governing never reached further then factory level and sometimes claim that it wasn’t allowed but still claims that did not succede that which wasn’t implemented.

    Self-governing is an idea Tito picked up in Spanish Civil War from Barcelona Commune which was destroyed by Stallin. It is something very close to banishing private property willingly, idealisticly for greater purpose.
    Close but not it, there was private property but in limited ammounts, houses, cars, land up to a subsistence size. The reasoning is simillar as progresive taxes in order to feed hungry and those that do not have subsistance level earnings, except measured in wealth not in income. Erradicatind private property as ideal but not really practical.
    I am talking about private property instinct as an instinct to distribute results of production, which was supposed to delivered to every employee equally, towards themselves even tough belonges to everyone equaly.
    Something as stocks that are equally divided, but bureaocracy is deciding what ammount dividend is going to whom. And they made up reasons why it should go more to them.

  81. @Jordan

    Self management was not an idea that Tito picked up in Spain. It was based on a deeper reassessment by a group of post WWII communists around Kardelj. The inspiration was a deliberate effort to reject central planning and “Go back to Marx” particularly starting from Rochdale workers and associated labour.

    having personal property in houses, land, and cars etc is NOT “limited”. It is drawing a distinction between reasonable private (personal) property and unreasonable private property which can only be explained by social forces.

    There no “supposed to delivered to every employee equally”.

    However the bureaucrats did seize more than their reasonable share as in China and Vietnam. But nothing like as under full-blown capitalism, and for different reasons that may offer long-term hopes.

  82. @Chris Warren
    Sory for the lack of vocabulary in order to express myself more persicely.
    You are closer to the way it was then my description but only to those that you pointed out. Except about the idea.
    Here is description of Barcelona Commune, since it is long writing, read Industry chapter and a bit more after it. It is a nice description of what Tito and Kardelj attempted. Both of them fought in Spanish civil war
    Since it is very similar to set up in Yugoslavia, i deduct that they picked it up from there.

    http : // http://www.english.illinois.edu/maps/scw/anarchist. htm

    The link is broken up so it does not stop in moderation again.

  83. @Chris Warren
    Sory for the lack of vocabulary in order to express myself more persicely.
    You are closer to the way it was then my description but only to those that you pointed out. Except about the idea.
    Here is description of Barcelona Commune, since it is long writing, read Industry chapter and a bit more after it. It is a nice description of what Tito and Kardelj attempted. Both of them fought in Spanish civil war
    Since it is very similar to set up in Yugoslavia, i deduct that they picked it up from there.

    http : // www . english.illinois.edu/maps/scw/anarchist . htm

    The link is broken up so it does not stop in moderation again.

  84. ratee :
    The last word. A friend flicked this to me to amuse me and I thought of this chat room.
    http://conservapedia.com/Main_Page
    This is not going away if anything it just gets weirder and weirder.

    Concerning Conservapedia, there are three possibilities. One is that it is a massive satire project to build on the traditional RW talking points and push them just beyond the point of rationality. A second is that the owners/admins of the site are seriously, in a clinical sense, mentally ill and desperately need some help. The most horrifying possibility is that all information there is 100% legitimate and represents the measures to which those responsible for the site and their thousands of followers can be so heavily invested in their particular reality bubble.

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