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Can we have a civil, thoughtful discussion on this?

Discussion in 'Economics & Trade' started by Kode, Jan 11, 2017.

  1. Ashwin Poonawal

    Ashwin Poonawal Active Member

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    When we look around we see that high concentration of wealth actually kills competition.

    The existing degenerate environment of greed forces new entrepreneurs to compromise their moral convictions and adopt cunning ways, first for their businesses to survive against the unscrupulous competition, and later, after testing the fruits of corrupt methods, to prosper. The first offense of a kind against one’s own self is the most painful. Each subsequent one is easier than the preceding one. This craving for quick gratification is evident in mature and growing economies all over the world. Look at how processed food is made unhealthy with harmful preservatives and cheap ingredients, the quality of food in chain restaurants has degraded over the years, farm produce is made unhealthy by high-breeding, and the quality of dairy products by rampant use of hormones and antibiotics.

    The U.S. seems to be leading the way in such greedy health degrading enterprising. This makes the nation fat and unhealthy, requiring more medical attention. On the other side, medical drugs/treatments are marketed at exorbitant prices, and once they are in circulation, our medical drug industry shows instances of suppressing and discouraging immerging cheaper/better remedies, and of suppressing discoveries of dangerous side effects. The common man is getting squeezed from every side. The subtle influence of the rich on our legislature keeps our tax code from correcting the loop holes, which favor the rich heavily. This keeps the taxes of the less affluent high, and the entitlement programs strained. Our automobile industry ignored, or bought and shelved technical innovations, to avoid prerequisite expensive modifications to production processes, loosing against foreign completion in the end, retarding the country’s progress. Even our national sports have turned excessively commercial. Our society is losing from every side.

    As globalization advances, the economic gap between the developed and underdeveloped economies of the world keeps shrinking. This is eating away the advantage the rich countries enjoyed. The resulting tightening profit conditions within the rich countries make their big businesses, having had tested the blood of easily rising wealth during the post world-wars era, tend to exploit domestic consumers by low quality products and to shortchange the employees by keeping the remunerations way lower than the actual values rendered by their services, progressively more and more, creating unscrupulous competition for smaller businesses, forcing these ways down the line. This keeps lowering the standard of living of the masses.

    What we need is a way to defuse the power of money on economic decision-making, releasing the economic factors from the narrow channels of money flow that keep enriching the economically high and mighty. This needs to be effected without blocking individual’s ability to acquire wealth, which motivates economic production. It is best to achieve this economic power diffusion with least interference from other entities, like continued meddling by the government.

    Countries around the world try it in varying degrees and by different combinations. But so far most of the experiments have tried to shift the control from money to authority. USSR was an extreme example of this. This cannot work for long, because human greed for power, wealth and fame, has a high tendency to take over the process.
     
  2. AFM

    AFM Well-Known Member

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    That's absurd and everything that follows from such an absurd statement.
     
  3. a better world

    a better world Member

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    Supply side has worked well?

    Even taking your selected years, the socially-disastrous 'rust-belt' phenomenon proceeded apace during those years

    And as for the theory itself, its basic premises are based in unreality, and will ultimately lead to its own collapse,
    as with every system based on unreality.

    Friedman's model ...... in which the assumptions on which its logical
    consistency depends — the most important being:

    1. that no economic actor has the power to directly
    influence market prices,


    2. all market participants have perfect information as to the determination
    of market prices,

    3. that there are no external costs
    or benefits associated with the production or
    consumption of goods,


    4. and that people behave rationally as the term “rationally” is defined by
    economists—

    are not simply unrealistic and contradicted by empirical evidence
    but are, in fact, impossible to achieve in the real world.
    (Blackford 2013)).
     
  4. Econ4Every1

    Econ4Every1 Active Member

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    As confusingly written as that sentence is, I'm just not sure how that applies. How is what you've said analogous to my hypothetical at all?

    If "Dad" is analogous to the government, it sounds like you're saying that some other government would provide for the people (kids)?

    Please explain?

    Not at all.

    The analogy between "Dad" and the government was simply to convey the fact that both have authority to impose rules. Of course, there are limitations on the rules a father just as there are limitations to the rules of the US government.

    The issue, imo, is to focus on rules that make things better for the nation as a whole.

    On a related note....

    There was an experiment done where groups of people are given real money. They are told they are competing with other groups and to win they have to pool their money together to win against other groups. However, they are also told they have the choice to donate the money they have been given.

    During the first round of the game, people, on average, give about 1/2 of their money, but by the 6th round of the game, the average people donate drops to about 15%. In the 7th round, the rules of the game change such that people are allowed to donate a portion of their money, in addition to what they need to donate to win the game, to punish players they feel aren't donating enough. In the 7th round, donations rise to 60% and 6 rounds later are between 85-90%

    Now in the contest of competition, "freedom" is deleterious to the group. People tend not to see the bigger picture (winning the game) and instead are either focused on keeping what they can for themselves as is generally only takes a single person to "free ride" to infect the group. People are more pursued by the injustice of free riders then they are at the prospect of winning the game.

    The government isn't a sudo-Dad, rather it is a collective authority that is responsible for creating the rules in society that will encourage people to work together to maximize it's potential to:

    1) Protect itself from other groups that don't share the same value system

    2) To maximize the health, education, and well-being of citizens in order to best accomplish #1

    Now I freely admit this is my interpretation of the role of the government rather than something strictly codified in the Constitution. However, the Constitution can be amended and I would support ideas that meet these goals. If it's not obvious, I don't believe that our current structure maximizes these goals and I think it's definitely headed in the wrong direction.
     
  5. AFM

    AFM Well-Known Member

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    Do you know what supply side economic policies means ?? There is no assumption that market participants have perfect information. That is impossible to achieve. And yet supply side economics has produced growth of ~ 3% corrected for inflation and population growth whilst the command control economics of Obama produced ~ 1%.
     
  6. Econ4Every1

    Econ4Every1 Active Member

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    Ok, so I understand what you mean when you say "privilege". I think I would use the qualifier "economic" or "economic privilege" when using the term. Personally, I think there is a lot of "cultural baggage" attached to the term given recent uses of the term with respect to statements like "white privilege". I think the term "privilege" tends to foster resentment and I don't think it's the best way to approach the problem if actually solving the problem is the goal.

    Having said that, I was at the local high school the other day with some children where there is a running track with several lanes (just like you see in the Olympics). As I'm sure you are aware the starting points of each lane are staggered with the outside lane starting ahead of the other runners. The children (who were young) were only able to process what they saw in front of them and they felt it was unfair to start the outside runner so far head.

    This is an exercise in equity vs equality. We stagger the lanes because it's obvious that equity is more important than equality at the start. The Children were demanding equality oblivious to the reality each runner faces.

    This is exactly what we have today. People who either cannot see the problem of equality or who simply don't care.

    My approach to this problem focuses less on the injustice of the issue and focuses more on how EVERYONE is better off under a system of equity.
     
  7. a better world

    a better world Member

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    Well, an understanding of our own nature is obviously important.

    Empirically, you can see how vigorously people resist redundancy or displacement,
    or how much they appreciate the chance to participate in rewarding employment.

    {Prince Charles has apparently refurbished a formerly aristocratic 18th century house
    (Dumfries House) in a depressed mining area of Scotland with high youth unemployment.
    The manner in which the youth have responded to new employment possibilities created
    by the project demonstrates a fundamental desire of people to participate.]

    Inadequate proposition, in the real world (see the Dumfries House example above) .

    The responsibility is contained in a two-way process between the individual and the community

    I disagree with the first part of that sentence (except for the most-severely disabled).

    As to the 'value' of an individual's participation, that can be adjusted to above poverty level, provided
    you adjust your economic model to allow it.

    (Is Loyd Blankfein's participation , whose company needed a taxpayer funded bailout during the GFC,
    worth a thousand times that of his office cleaner? It's an insane proposition)
     
  8. Ndividual

    Ndividual Active Member

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    I would instead say that 'The responsibility is contained in a two-way process between the individuals living in the community.'

    In the first part of my sentence "Not everyone is capable of participating" I was referring solely to those who are physically/mentally incapacitated.

    The 'value' of an individual in a community is the sum total of of what their employer is willing to pay and what aid/assistance other members of the community are freely willing to contribute to retain them as a member of the community.

    If the company, Goldman Sachs in that case, is/was willing to pay him a thousand or even more times that of his office cleaner I have no complaint. Personally, I would rather government refrained from bailing out any business or individual, leaving it to the private sector if they wish to do so.
     
  9. a better world

    a better world Member

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    The first part of that sentence suggests a willingness to acquiesce in gross misallocation of resources (we agreed - theoretically at least - there are sufficient resources to eliminate poverty, but resources are not infinite); the second part avoids the fact that govt. was forced to bail out private sector financial institutions during the GFC, unless you would also acquiesce in the massive social upheaval that would have followed the collapse of the global economy.
     
  10. a better world

    a better world Member

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    Let's see: lower business taxes, lower wages, less govt. regulation. But notice Trump does not seem all that confident with his (projected) supply-side plan; he's already accusing successful free-traders like China and Germany of unfair play despite their WTO membership. Meantime poor global economic conditions are resulting in loss of confidence in the political process everywhere.

    If only supply-side actually worked in the real world - of course everyone would embrace it whole-heartedly.
    But as George Blackford pointed out in his recently quoted article (above), supply-side must fail amid the complexities of real economic life.
     
  11. AFM

    AFM Well-Known Member

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    You clearly know nothing about supply side principles, objectives, and results.

    Supply side economic policies result in economic growth rates ~ 3 times that of Obamanomics and Western European economics.
     
  12. Strasser

    Strasser Well-Known Member

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    Mostly true, and yet Wall Street insists on massive immigration and millions of green cards anyway, so we don't have to care about them or their needs, they're creating their won serious political problems and problems of those kind never work out well, and no, babbling ideological platitudes and memes about 'free markets n stuff' isn't going to do a damn bit of good against the kind of existential realities generated by mindless self-indulgence and narcissism, and hiding behind private armies in gated communities isn't going to help, either.
     
  13. Strasser

    Strasser Well-Known Member

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    Mostly true, and yet Wall Street insists on massive immigration and millions of green cards anyway, so we don't have to care about them or their needs, they're creating their won serious political problems and problems of those kind never work out well, and no, babbling ideological platitudes and memes about 'free markets n stuff' isn't going to do a damn bit of good against the kind of existential realities generated by mindless self-indulgence and narcissism, and hiding behind private armies in gated communities isn't going to help, either.
     
  14. Strasser

    Strasser Well-Known Member

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    Triplpost
     
    Last edited: Apr 21, 2017 at 1:09 PM
  15. Strasser

    Strasser Well-Known Member

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    DBlpost
     
    Last edited: Apr 21, 2017 at 1:08 PM
  16. Strasser

    Strasser Well-Known Member

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    This is actually pretty good for a short piece. It certainly meshes with the problems Robert Morris faced when he was chosen to figure out how to finance the American Revolution, but was supposed to do it without any tax revenues, which of course was a very formidable proposition. His only viable solution was of course one, to finance some of it himself, and he wasn't that rich, and two, form a bank. Contrary to many Americans' belief, the Bank he formed was a huge success, and still has the same name today, and Andrew Jackson's hatred of banks was badly misplaced, based entirely on his own incompetent failure at speculation.
     
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  17. Mircea

    Mircea Well-Known Member

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    But, of course, there would be Dollars.

    Currency is simply a medium used to conduct and facilitate trade. The intrinsic value of the currency is related to the GDP.
     
  18. Mircea

    Mircea Well-Known Member

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    Money is Capital, when it is used to generate income. I'm not seeing where Capitalism or competition negates the formation of monopolies. Plenty of monopolies have existed, or do exist today.

    Wealth is acquired. You have to want to acquire Wealth in order to have Wealth. Acquiring Wealth is a personal choice. Many people have no desire to acquire Wealth for any number of reasons, including the fact that acquiring Wealth may cause "personal hardships." One can spend $120/month on cable/satellite TV, or one can use that $120/month to purchase stocks or save it to purchase property that would create Wealth and also perhaps generate Income (in the case of Rental Property).
     
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  19. Mircea

    Mircea Well-Known Member

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    What exactly are you looking at when you "look around?"




    Well, the OPEC Oil Embargo of 1973 would see to disprove that statement.



    That more or less is true, especially with the Internet availability.




    External costs can be built into pricing. External benefits are effectively a windfall for benefactors.





    The Poor™ would be an example of group who consistently behave irrationally.

     
  20. AFM

    AFM Well-Known Member

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    Money is capital in a limited sense - to purchase raw materials to be processed using capital equipment and human capital for resale which generates income as you point out.

    Governments are the only entity that can create monopolies. If a certain company does produce a product exclusively at a profit then competitors will enter the market with improvements in process or technology to produce that product at lower prices. Monopolies may exist for "short" periods of time but in a true free market system without gov interference competitors will enter the market and the original company may actually go out of business if they cannot compete. That's of course Schumpeter's creative destruction.

    Wealth is produced. Most people do so by trading their human capital for wages which are used to purchase houses, cars, bank accounts, stocks, etc ...
     

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