174 thoughts on “Another sandpit

  1. I find concerning the relative lack of safeness and robustness of our general infrastructure when faced with predictably regular events. A standard cyclone / rain depression event occurs down on the Australian east coast and we can’t cope. Yes, pocket regions do get unusual events eg, Bundaberg gets largest recorded flood.

    However, all residential and commercial infrastructure should be progressively moved to higher ground. Any residence or commercial site inundated should see the following events occur. Owner is offered pre-flood market price by State or Commonwealth for land and structure. If owner refuses the purchase offer, said offer lapses after 6 months. If owner accepts, structures are dismantled, sold as scrap or moved as appropriate. Land becomes part of a “flood park”. Said flood park is state land and maintained as a grassed park. The state can use the flood park for roads, cycle ways, running paths, basketball courts etc as appropriate but always with the understanding that said roads, bikeways and facilities will flood periodically, be blocked off that their true express purpose is to form flood buffers and flood reservoirs in time of flood.

    The idea of flood parks ought to enter the collective consciousness. The idea of building domestic, commercial or industrial structures on any flood park or any natural flood plain will be seen by all and sundry for the short-sighted foolishness that it is.

    The standard would be;

    (a) no building construction is ever permitted again below any known historical flood level nor within 2 extra vertical metres of the highest known flood level.

    (b) all buildings below known flood levels will be progressively bought up, obsoleted etc. and the land turned into flood parks.

    In and around small towns, flood parks may become government owned grazing land where grazing animals can be agisted.

  2. I’m, in a fanciful frame of thinking, developing a plan for a tube line in Sydney.

    It occurs to me that there is a need for a Beaches line which progresses in both directions from Bondi Junction north to Vaucluse, under the Harbour entrance to manly then arcing across towards the spit taking in mosman and terminating at North Sydney. A branch line heads north following the main commercial and residential centre finishing at Pittwater. The southern end heads south from Bondi junction swinging towards waverley , clovelly, randwick/coogee, maroubra, matraville, and phillip bay.

    This line would take on a traditional metro theme style for Australia with a new artform I’ll sugest to be Abor-nouveau which I’ll justify as the line goes from the first French settlement of La Perouse to the Aboriginal haven between Sydney Harbour and Pitwater that Captain Cook made special mention of. Abor-nouveau extracts the beauty of Australian nature, the bush as well as the coast, translated through Aboriginal eyes into art and forged into steel, glass and natural materials as features in all stations.

    This line weaves through some of Sydney’s densest population areas to link in with existing rail nodes in a circuit not possible any other way. It would provide a circumfrel route while also servicing the spoke routes to the city. Some carriages would have surfboard holders.

  3. @Ikonoclast The studies starting from Sam Peltzman showed that OECD governments grew in the 20th century in line with the growth in the size and homogeneity of the middle class that was organised and politically articulate enough to implement Director’s law.

    Once a country becomes rich because of capitalism, politicians looked for ways to redistribute and churn more of this new found wealth to the middle class.

    Government spending grew in the 20th century because of demographic shifts, more efficient taxes, more efficient spending, a shift in the political power from the taxed to the subsidized, shifts in political power among taxed groups, and shifts in political power among subsidized groups and in particular to the elderly.

    The post-1980 economic and fiscal reforms are an example of a political system converging onto more efficient modes of income redistributions demanded by the middle-of-the-road voter as deadweight losses of taxes and regulation grew.

    Improvements in the efficiency of taxes, regulation and spending reduce political pressure to suppress the growth of government and thus increased or prevented cuts to both total tax revenue and spending. Economic regulation lessened after 1980 but social regulation grew unabated. The post-1980 reforms saved the welfare state.

  4. @Jim Rose

    Once a country becomes rich because of capitalism, politicians looked for ways to redistribute and churn more of this new found wealth to the middle class.

    That would be true if capitalist controled government, because that shift hapened only by government laws which you eloquently described after this sentence. You did explain how government did that.
    Now, we know that capitalist did not ask government to do this middle class enrichement, it was unions that forced government to do this, not capitalists.

    The trouble came from resource constraint of oil, somewhat by rage of OPEC about USA support of Israel war with Arab countries so they implemented oil shortage, which would be resource constraint which caused inflation rise into destructive levels. This inflation destroyed savings and capital accumulation. Governments then realised that they have to subdue unions and reduce wages by cutting marginal taxes from 91% to 75%. This allowed for higher capital accumulation.

    Inflation caused by price of oil and its impact on price of everything did not subside untill natural gas exploration replaced some demand for oil. At the same time high interest rates were wreacking havock in unemployment which additionaly helped fall of inflation. This allowed for fast capital accumulation and power of capitalist to take over the leverage over governments. This leverage was used to cut marginal taxes further which allowed for shift of income growth onto management. Now there is a lot of capital accumulation but not enough spending from stagnating income growth of consumers to support further capital accumulation. What to do?

    There is a lot of savings but not enough consumption, what to do? Aaha, debt can replace income as a source of consumption. Thats how we got to the absolute debt ceiling. Debt was serviced by more debt and every time we hit the debt ceiling credit conditions relaxed so debt growth can continue and extra capital accumulation allowed for more credit by lowering interest rate.
    This “absolute” debt ceiling came about because creditors do not trust debtors to pay it back. If it wasn’t so, they would keep krediting debtors even more just so they can consume and provide for more capital accumulation, because they have plenty of savings for investments but they can not find creditworthy borrowers.

    Now this debt fearmongoring is used to destroy welfare state claiming that governments can not do it anymore. Did post-1980 save welfare states or is it still an open question?
    Yes, reforms post-1980 reduced welfare state and by that supposedly it received less pressure now to be reduced. But, is it less pressure now or by succes did the reformes get more wind to do more cutting is alternative scenario problem. No, That can not be argued by alternative scenario.

    I can argue by alternative scenario too: If welfare was not reduced, people would relly less on debt to fund consumption and we would not hit the debt ceiling yet. That is more logical then yours, given the reason for financial collapse in USA which you do not accept.

    Now, what facts from history will you sellect to prove your thinking?
    I am sellecting the size of the private and public debt as proof of how economies grew through consumption growth while mean income growth was left stagnating. Low interest rate as proof that there is saving glut. Banking collapse as proof that consumers can not pay back the debt and grow consumption anymore.

    What are your real world observed conditions that prove your theories?

  5. @Jordan


    Unfortunately you were sucked-in by by a capitalist looney. Everything that Jim Rose has posted has been fake or has been capitalist propaganda.

    Capitalist politicians do not look for ways to distribute wealth to the middle class. In fact they only distribute to their own strata of overpaid gluttons feeding on expropriated wealth and this is getting worse as time goes by. In Australia this strata has set itself up with a very cosy Remuneration Tribunal so their incomes can fly up to great heights without being constrained by the constraints they place on the rest of society.

    This is all demonstrated by the income trends over time in capitalist America. The real middle class (ie the quintile in the middle of the income distribution) gets no major benefit from a country becoming rich compared to normal folks.

    The top quintile gets it all – and keeps most of the benefit of “a country becoming rich” to itself. The top 5% of this upper strata – ie 1% of the population – gets gigantic wealth. The lower

    All this is well demonstrated at:


    The chart “Increase in after-tax by Income Group 1979-2009” says it all.

    The top strata (top quintile) increased their incomes by 95% as the “country grew richer”.

    The middle class only by 25% pretty close to the social average.

    But worse is to come. The trend is for the upper quintile, those with levers on economic, social and political policy, are only making themselves richer and richer at the cost of depriving everyone else of a fair go.

    According to the presentation in the 8 charts, it appears the rot set-in around 1979.

  6. @Chris Warren
    Nope Chris, maybe you just did not read last sentence in first paragraph. True, i suck at english writing and i appologise for that. It is that a lot of my mistakes escape proofreading (if i do it) but it becomes obvious only after my comment get posted and that is when i can see my writing mistakes.
    I apologise to all about it. I hope that my heterodox point of view makes up for that.

  7. @Chris Warren
    I get it now.
    I intentionaly used conservative/ capitalist terminology trying to reach to Jim easier and you cought that and think that i “were sucked-in by by a capitalist looney”. I can differentiate ideological terminology and when i try to reach to someone i try to use their language. That is why you felt i was not progressive liberal, of course wrongly.

    The middle class only by 25% pretty close to the social average.

    That is true in income numbers, but consumption by same class was higher thanks to debt. So debt enabled usage of real values but nominal income was flat.
    What really matter to me is what value i used, not so much nominal value i received. Altough, after such debt fuelled consumption there is a problem left in its wake: debt. I can reduce it by bankruptcy since there is no inflation or refinancing with lower interest rate to eat it up.
    SInce huge numbers of people are in debt and that would requier multy year effort to process bankruptcies, why not do general debt jubilee and problem solved we can go on to consume real values again by debt or by income growth/inflation.

    Other problem is what to do to prevent future debt ceiling: raising marginal tax rates to reduce exorbitant savings which are pushing interest rates down and reducing income growth; Job Guarantee with livable wages to repair infrastructure and get it up to the age we live in; raise minimal wage; get financial sector reduced so it doesn’t get the most educated resources for themselves which are needed for ither sectors (with best salaries from financial sector our best and brightest went there for inovation instead into real sector)

    What is observed in real world is that middle class standards were raised quite a bit and JR is right about that, but the problem is that that was achieved by debt that is unsustainable not by capitalist benevolence. Nominal Surplus (savings/ capital accumulation) have been transffered to middle class for consumption by debt, not by raising income, and now, that has stopped.

  8. I was having a think about why it seems to be cheaper to mine coal than it is to create a tunnel for a train. It’s a shame that Sydney’s 3 metre thick coal seam is at 850 metres depth, otherwise we could have some coal mogul create quite an extensive tube system under Sydney for a profit.


    of course a lot of the cost is in lining the tunnels (three tunels to make a fully operational line) building stations and developing the control system to make it all safe.

  9. @Jordan The growth of government and the welfare state were outcomes of the democratic process. Much of the welfare state is about increased subsidies for the elderly.

    The levelling of income differences across a large part of the population preceded the growth of government in the developed world over the 20th century. The levelling led to forming of larger voting blocs with common interests

    Labor held power once only every decade or two in Oz in peacetime and not for long.

    The welfare state emerged where unions were important and where they were not. Unions are minor players these days, but the Bismarkian welfare state is just as strong.

  10. @Jim Rose
    Yes, it is strong and it is strongest welfare state in all of the world, at par with Netherland, Germany and Norway and what you can tell from it. The countries with the strongest welfare state did not get harmed by GFC. Such strong automatic economic stabilisers are saving economies. But that also says that welfare states do have higher marginal taxes to cover for it and with that incomes are growing to support growing debt.

    Here is a great but long 90 min presentation about social costs of wrong ideology and about last 40 years that i was writing about last few days. First speaker asks an important question: is society there to support GDP/economy or is economy supposed to serve and support society?

    Second speaker is talking about monetary and financial effects on the economy.

  11. @Jordan

    “is society there to support GDP/economy or is economy supposed to serve and support society?”

    GDP is no more than the aggregate monetary value of transactions carried out by the members of a society during a period of time.

    The question posed indicates to me how confused people seem to have become. Every member of a society is an element of ‘the economy’ of the society. It seems to me, out of context macro-economic talk, typical of news and current affairs programs, contributes to this confusion.

  12. @Ernestine Gross
    Think harder EG.

    Every member of a society is an element of ‘the economy’ of the society

    Correct one is: every member of a society participates to the economy.

    What you said is like saying that every member of a society is an element of the democracy.
    You can participate in democracy or not, not be an element of it. Why agency then?

    Your first sentence describes exactly how i said it but then you switched.
    Economy/GDP is a product of a social convention developed trough thousands of years and elements of the economy serve the society as members see fit.
    Size of the GDP/ economy depends on coordination of its participants and their decisions. That coordination is enforced trough government and trough succesfull coordination they can achieve whatever they agree to. There is only resource constraints that prevent a society to achieve anything imagined, there is no organisational constraints.

    Money is a mean to achieve anything desired and without resource constraints, since governments control the money, issue it, destroy it, distribute it, government can achieve Australian economy or Zimbabve economy. It is totaly up to them depending what government wants and government is chosen by the society. There is no operational constraints only political/ coordinational.

    It all depends what governments think they need to do; to sacrifice people to get good GDP numbers or satisfy people through economic messures.

    So the question is; is economy there to serve society (socializm) or is society there to serve economy/GDP (neoliberalizm)?

  13. @Jordan see Franklin Allen and Douglas Gale’s 2007 book Understanding Financial Crises for a good read. The introduction is online.

    financial crises have been around for hundreds of years.

    In the early 1990s, Norway, Sweden and Finland experienced systemic banking crises with bank failures and negative economic growth; double digit unemployment.

    Their welfare states were reformed big time to finance the bailouts. Sweden even introduced school vouchers.

  14. @Jordan

    “Think harder” seems to be a currently popular phrase among some members of the subset of societies who pose questions about ‘the economy’ without bothering to describe their mental model of ‘the economy’.

    Given your answer, your original question makes no sense to me and I therefore opt out of further discussion.

  15. Ernestine Gross :

    Given your answer, your original question makes no sense to me and I therefore opt out of further discussion.

    Bit odd.

    It seems to me that a real question is whether:

    “is society there to support GDP/economy or is economy supposed to serve and support society?”

    Rightwing economists would say either;

    there is no society except to the extent that individuals support productivity and growth, or

    society is only to support the economy. If you do not work you receive nothing.

    This also flows into history with such claims as: the British had a right to dispossess Australian natives because the British had a superior mode of production [Blainey view].

    It also flows into politics with strong economies exploiting other economies or migrant/guest workers, for the sake of their own economy, not the interests of humanity.

    Other economists would recognise that society and quality of humanity that arises, is more important than continuing to prop-up an economic system that is destroying society by concentrating most of the benefits within an elite strata – clearly seen in the USA since around 1979.

    Due to the real conditions that exist in the Third World and in the streets of most European capitals this issue cannot be swept away dismissively by rather overly-satisfied academics.

  16. @Jim Rose

    “financial crises have been around for hundreds of years.”

    Gee, thanks for that Jim. With my extensive (for a lay person) reading of history and economics I would never have realised that. Lucky you alerted me to it.


  17. @Ernestine Gross

    In my opinion, Ernestine looks at economic matters in an unorthodox manner which doesn’t even fit the (supposed) standard orthodox-heterodox split in (capitalist) economics. Although, Ernestine would disagree with my above statement at several levels I am sure.

    The debate initially turns on what is meant by the economy. I assume it can mean;

    (a) the financial economy including all monies, credits, debts, financial instruments and non-material assets plus the national accounts and standard macroeconomic measures.

    (b) the real economy including all material elements of the economy including humans, the latter at least so far as they labour, think and manage.

    (c) the economy can also equal a and b above, always understanding that the whole is greater than the sum of the parts and can emergent phenomena can… well emerge.

    Furthermore, we can talk of political economy which equals a and b above and the whole of our institutional and social apparatus and the whole of our mental apparatus at least at the ideational level.

    At the political economy level, we can see that by definition there cannot be a split between society and economy. However, there can be splits, divides and even chasms between individual interests and between class interests.

  18. Ikonclast,

    You appear to be more in agreement with Ernestine and at odds with Jordan

    Your “the real economy including all material elements of the economy including humans” equals Ernestines “Every member of a society is an element of ‘the economy’ of the society”.

  19. @BilB

    Well, if we look at it technically, yes.

    But Jordan was making more of a rhetorical point than a technical point. He was essentially saying the economy ought to be for the people, all the people, and not just for the benefit of the rich. We have to cut Jordan some slack, I dont think English is his first language.

    Ernestine was asking for some technical rigour with terms etc. so that we are talking about the same thing at each point in the debate. Ernestine, IMO, also wants to see the output of the economy reasonably equitably distributed.

  20. Ernestine Gross
    I sincerely appologise for a derisive instruction.
    My intention was not to hurt but to provoke and knowing that you are hard thinker, I did not expect such reaction.

    Since an economy is measured in GDP, i wrote “economy/ GDP”, giving it a meaning that majority are looking at GDP as all encompasing meaning of an economy and a meassure of a success. If using GDP, humans are not an element of an economy, only labor is, labor which can be quantified as a number of productive labor so that succes can be described in GDP.

    Then in order to get a better quantification of succes of a society, GDP is then divided by all members of the society to get GDP per capita.

    This is where GDP/ economy is taken wrongly as a measure of succes on its own. Knowing that small number of people can claim large part of GDP with just a little is distributed to majority it should be understandable that GDP is not all that matters.

    Such confusion is more visible in American thinking where just recently was acnowleged that there is a huge inequality gap that is not taken into account when looking at GDP number as explanation what happend in a long term. While total GDP numbers show a strong recovery, if separated by looking at lower 90% of income then and only then can real process be seen. and it shows that mean income did not grow.

    Because of such confusion, economists concentrate only on the GDP number not taking into account how different sectors of an economy behave. You can get enormous growth of financial sector and no rise in employment, no real benefit to the economy but a benefit in a measurable number of GDP.

    This problem is visible even in MMT community which tries real hard to differentiate real vs. nominal values and bases a lot of thinking around economic inter sectorial balance.
    By using only GDP as a meassure of a succes, it gives a meaning that that is all we need to look at and bases efforts on the path of lets grow GDP no matter how.
    FED by its actions of QEx money printing is growing only financial sector which shows in stock market succes. Many economists use QEx as prove that Keynesianism of printing money and putting it into economy did not work. The truth is that money went only into the banking sector and is kept there, it did not trickle down into the real economy. QExs did raise GDP but employment is not up.

    This phylosophical problem will be coming from USA to Australia.

    So, this problem is circling around my question: is society there to serve GDP/ economy (conservative thinking) or is economy there to serve society (socialist thinking)?

  21. GDP is a good measure of success, that those countries with high per capita GDP have the best living standards is no coincidence.

  22. sdfc :
    GDP is a good measure of success, that those countries with high per capita GDP have the best living standards is no coincidence.

    Yes, but the real issue is how they get there.

  23. @sdfc
    That is true but it was achieved by union power and by fractional reserve banking, not by will of the capitalists.
    Fractional reserve banking allowed for positive selection of new technologies.
    In former socialist systems there is no fractional reserve banking, it was 100% reserve requierments. The private banking system allowed for positive destruction which did technological advance.
    Unions on the other side forced capitalists to give welfare to greatest number of people which is a socialist atribute.

    The thing is that capitalism could deliver even more wellfare with socialist tweeking of the system. So it was a mixed economy, not capitalism, that gave the greatest wellfare to the greatest number of people.

    More importantly, my intention was describing the developement of a mixed economy, not wanting to compare -isms, and the issues it is encountering in solving its problems.

  24. Jordon,

    No need to apologise. I wasn’t offended. My response was my way of saying there is something wrong on the conceptual level.

    Regarding your subsequent post, I agree with you the QE money went to the wrong people. I seem to recall the phrase: ‘the wrong people have the money’ is ascribed to Keynes but I can’t quickly reference this at present.

  25. sdfc :
    Capitalism delivers the greatest welfare to the greatest number of people.

    by taking it off many others.

  26. CL
    Explain to me why a legislature that redefines marriage to permit a ‘union’ between two men (for the first time in human history) cannot also decree that a man can marry a beagle.

    And tiresome as this argument is, CL is perfectly correct.

    No lie.

  27. The reaction from Gross and Ikonoclast got me thinking that i introduced a radical concept of an economy serving the society. I know it is not wrong concept because i grew up in it, schooled with it in mind so it must be a radical concept only between capitalist schooling and fully socialist schooling.

    What i mean by it is how society solved problems as they come up in fully socialist frame of mind. Society discovers next problem as it solves a previous, larger one. A society solving smaller and smaller problems is called progress, right?
    So, capitalist society progress on economic problems and socialist society progress on social problems. Therefore, mixed economy is the best way.

    I lived in a society that had really advanced in social progress and that came from the mindframe that economy serves the society. This society really took to the heart french parole “Egalite, Liberte, Fraternite”. It really did a lot to equalise inequalities like between man and woman, by sizeable corporations have provided food and babysiter services at the place of work and other would provide money for it if unable to. Absolutely equal pay to woman as to man.
    Inequalities between rich and poor:Corporations provided for housing financing by who needs it the most order, or building housing apartment blocks. The whole subdivisions were built by huge corporations to provide housing for workers. Employee kitchen were great, i never heard anyone complaining about the food at work, never. Corporations were solving employee’s problems since they were in ownership and democratic control of its employees.

    Yes, socialist countries did fail somewhat at economic progress, but social progress was astounding comparing it now to what i encountered in the USA. Living in Croatia in socialist time were stress free economicaly. In the US, just to ballance my checkbook took a lot of time, to decide on choices and utility of them were stressfull time.

    Let me talk about the process of transition that Croatia as a socialist society took to transform into capitalist society which is still ongoing.

    First step was to introduce Holding companies as mother corporation that will manage only the flow of money. The purpose of Holding companies were to reduce nonmonetary benefits to employees (labor costs), like food at work, housing financing, babysiting, transportation costs and more in return for slight increase in monetary benefits to employees.

    The purpose of such program was to erase from people’s mind the idea that society can solve its problems, to overturn the thinking that economy should serve the society. The transition encompasses economical and more importantly psychological state of mind.
    In Croatia today, all you can hear is complaining and complaining, from not being able to understand this process and not coping with the changes. This transition was forced upon this society even tough it was seeked by population not knowing what it really means, attracted by beautifull and hypnotic Hollywood movies and capitalist propaganda.
    Today, there was more and more of grief and contrition about where this society chose to go. Croatia is a neoliberal heaven now.

  28. Capitalism is always claimed to be a “job creator” and a “wealth creator”. It’s almost as if capitalism is a god, creating all of these things ex nihilo (out of nothing).

    I am particularly amused when I read a book about a “great man” who did things like this. “He built a new mansion by the river and cleared 600 acres for the cultivation of corn”. Oh, he did it all by himself did he? Oh no wait a minute, the carpenters and day labourers built the mansion and the slaves cleared the 600 acres and planted the corn.

  29. @sdfc

    Actually the opposite is true. If a capitalist can make a product with less labour, this is what they will do.

    But there is another aspect – if capitalists have to use a certain amount of labour – they will destroy Australian jobs and replace them with Third World offshore labour.

    And further – when capitalism goes into crisis, job growth collapses, and when recovery emerges, the quantity of jobs is less.

    Even OECD researches have exposed your claim. Free trade has not produced more jobs in the Third World, it has provided better jobs.

    Under socialism, social need creates jobs. If there is no need – ie productivity is high – jobs can be reduced through a shorter working week mechanism.

    If capitalism is forced by public opinion to create jobs, you will find that wages stagnate and/or factors shares of labour decline.

    You can see the basic pattern of post-war capitalist job creation in:

    “The OECD Jobs Study: Facts, Analysis, Strategies” (1994) isbn 9264141456

  30. why does socialism lose at the ballot box? Australia has had but one left-wing government elected since 1949.

    Democratic socialism is pointless because electoral power is fleeting: sooner or latter, the left wing parties representing the socialist alternative lose power and capitalism is resorted.

    Under pension fund socialism, with the majority of the share market etc., owned by superannuation funds, any call for wide-spread nationalisations is political suicide. The same for re-nationalisation later when the left-parties get another turn in office.

  31. @Jim Rose

    OECD capitalism, where the exploitation is exported into the Third World and there is funded general funded welfare, is in fact the best of all possible worlds.

    The problem is that eventually the Third World develops and offshore labour eventually demand the same wages and living standard as in the West.

    So anyone merely looking at conditions at one pole of global political economy are simply; fools looking through Rose coloured glasses.

  32. Not this clear, black-and-white dichotomous drivel again. Listening to Jim you would think that people haven’t been trading their labour for commodities/money for thousands of years and it was just recently that the concept was invented by the right.

  33. @sdfc

    That’s like saying under Feudalism, the overwhelming number of jobs are as peasants and serfs working for Feudal lords. It’s a truism of the system under standard conditions and standard definitions. Capitalism and the mixed economy are expressly set up to allow private enterprise to dominate our society hence it is a truism they will employ most people.

    Speaking of definitions, isn’t it interesting that family businesses which only employ family members are called private businesses. They could just as easily be called family cooperatives. It’s simply a matter of defintion. So, how many family cooperatives do we have in Australia? Is the so-called “backbone” of the economy not so much small business but family cooperatives? Interesting thought isn’t it? Every self-employed tradie seems to have a spose who answers the phone and does the office work. Sounds like a cooperative to me. Every small or extended family that runs a business within the family is a cooperative.

  34. We don’t actually live in a feudal society Ikonoclast. I don’t know what you have against the self employed but many small businesses employ non-family members. In fact every one I can think of off the top of my head that I know employs people outside of the family. Our family business employs both. From memory around 47% of the employed in this country are employed by smalll business, that’s a lot of family members.

    You might think communism is just smick but it doesn’t seem to work. Capitalist economies deliver higher living standards.

  35. @sdfc
    But if communlsm allowed for fractional reserve banking then it would be delivering higher living standards to all equally and it would not have a financial crisis as capitalist do, since in communlsm it was allowed for CB to print money as needed. CapitaIism does not allow government to print money when economy needs it desperately.

  36. sdfc :
    Chris, there is always going to be some unemployment. It’s why we have things like the dole.

    yes, but this is frictional unemployment. Capitalism creates additional unemployment.

    Capitalism also increases instability over time, so this element of unemployment ratchets up in concert with other signs of macroeconomic instability.

    Capitalist unemployment is often longer-term than normal frictional unemployment.

    Getting rid of capitalism will not necessarily abolish all unemployment but will decimate it. Without capitalism, the means will be available to abolish all unemployment if society decides this is what it wants.

    Capitalism only has low unemployment if capitalists can sell substantial quantities of products offshore, or they expect a larger population in the future when they will expect to realise their super profits.

  37. Chris,

    “Without capitalism, the means will be available to abolish all unemployment if society decides this is what it wants”

    Socialism/communism tends to resolve unemployment with artificial jobs and labour camps.

    Australian Capitalism resolves this with social welfare.

    It is purely an organisational matter. The cost to each economic system is the equal.

  38. @BilB

    There is no such thing as artificial jobs as there is plenty of social needs that can be served.

    The problem with capitalism providing welfare is that this is only provided against the wishes of capitalism and is unsustainable in the long-run.

    So we need to formulate an escape from capitalism.

  39. Well then, Chris, I suggest that you organise a citizens referendum on that very Point,

    “we need to formulate an escape from capitalism”

    It will be good to see how many down trodden victims of capitalism you are able to draw out of the shadows, and who might want to escape to Cuba. I hear the flights into Cuba are quite cheap as most of the traffic is outbound.

  40. You can always find the downtrodden victims of capitalism crawling on the refuse-tips in the Philippines, or the electronic reclamation yards in Africa, or the corpses in a burnt-out factory in Bangladesh, or the bankrauptcy courts in Sydney, or the Salvation Army depots in any capital city.

    Go to it.

    A referendum, in due course, is certainly on the cards.

  41. Ah, now I’m a happy capitalist so I won’t be signing your refferendum, even though I will applaud the effort particularly if you specifically mention the capitalistic oppression of poker machines and “sports” clubs.

    Might I suggest though that there is a huge difference between the poverty of overpopulation and capitalistic oppression.

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