A regular green claim is that, for the sake of the planet, we can’t afford any more economic growth. How many times have you heard something like the following:
The other tough reality demanding more honest business reflection is the incompatibility of further, orthodox economic growth in the OECD with the 2C target. The structure of markets relying on the shareholder model also demands that companies must grow. But the best analysis available suggests that growth in OECD countries cannot be squared with halting warming at 2C, 3C or even 4C.
Where are the companies brave enough to even ask the question of what the optimal size of a company might be, after which it should grow no further, and how that company should be governed and function with regard to investors?
What would a world without economic growth really be like?
At first we probably wouldn’t notice. Next year would be much the same as this year. But there would be an important but subtle difference, which would become more apparent with every passing day.
Capitalism is not a zero sum game, because of growth. It is possible for me to become wealthy, without harming anyone, because the total sum of all wealth can be expanded. If someone creates a new wonder drug which helps cure cancer, or a new educational game for your kids which dramatically improves their school results, nobody is hurt – everyone benefits. The sum of global wealth is increased, because there are fewer sick people, or because you have more leisure time to spend with your kids, rather than nagging them to do more homework. That is the essence of wealth creation.
Remove the growth, and something terrible happens. People can still become wealthy – but only at the expense of everyone else. The economy is not allowed to grow. You can’t stop people from innovating – but to suppress growth, you have to make everyone poorer, every time an innovation arises which in the normal scheme of things would have caused economic growth. An enforced zero growth economy turns achievement and success into exploitation.
How can growth be suppressed? The simplest way is to put a price on carbon.
For example, consider the EU emissions trading scheme. All businesses over a certain capitalisation were allocated a ration of carbon credits, based on their history of energy usage.
This created a myriad of perverse incentives. For example, any business which created a new product, had to pay a penalty for their achievement, by buying more carbon credits off less innovative competitors.
Thankfully these destructive practices mostly ground to a halt, when the European carbon price collapsed – in my opinion, most likely because many of the EU member states tried to cheat, to give their own national markets an unfair advantage, which resulted in an embarrassing oversupply of carbon credits across the EU.
However, even a pure auction system would in my opinion act as a growth suppressant – under an auction system, big businesses which control large pools of carbon credits get to gang up on small innovators, by forcing them to pay a premium for the carbon credits they would need, to profit from their innovations.
Some innovation, energy efficiency related innovations, might still be possible – but at the very least carbon pricing takes the focus off product improvement, and refocusses businesses on reducing energy use, by any means possible – say by switching off the heating in winter, like a fairy tale scrooge callously mistreating their workers.
An enforced zero growth economy is a cruel economy. Because when economic growth is suppressed, individual innovation, thought, humanity’s greatest asset, is turned into an instrument of pain. In an enforced zero growth economy, the ambitious only become wealthy, by making everyone else a little poorer.
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To Phillip: Ask any of the thousands of engineers who left Venezuela and friends and family so they could increase their salaries from $450/month at PDVESA (the Venezuelan government owned monopoly oil company) to the US where they make a minimum of $9,000/month at any one of a number of companies. Government monopolies are worse than any private monopoly and there is no monopoly oil company in the US. Capitalism leads to an improved standard of living for everyone due to its emphasis on increasing productivity. Government companies all over the world never improve productivity, so wages stagnate.
A zero growth economy implies that the population remains the same but the big boys are saying we only need a few million of us around. I do believe that will need a whole lot of negative growth to happen. The BRICKS couldn’t be coming on line at a better time.
“emphasis on increasing productivity.” … therefore leading to the sale of the most product at the lowest price thus benefiting the most people. Leftists love to carp about the riches of someone like John Rockefeller but his riches were spit in the ocean compared to the value of the benefit he provided to millions of people. Ditto most other rich industrialists who would have brought us exactly ZERO benefit if not for the lure of getting rich. Greed is … natural.
Mike – Thanks, agree with this.
Greed is natural – it bring more mating = off-spring opportunities (generally).
Mind, some of your verbiage above looks pretty off-base, and your justifications – to me, IMHO – seem a tad inconsistent.
Your right.
My misunderstanding, no doubt.
Good night (here).
Auto
Economic growth is what allows living standards to improve. It gives economies “breathing room”, allowing for inevitable economic shocks (like the Great Recession). It is also what allows us to have a cleaner environment. The greenie luddites endgame is with people shivering in mud huts, eating twigs (and burning them), and living shorter, harder lives.
The law of diminishing returns is upon us. How much improvement is needed when you are satisfied with the living standard you have? If you have 2.5 bathrooms how much will one more improve your standard of living? The idea that everyone will be happier with yet bigger houses with even more stuff in them is beginning to lose its luster as people now have the spare time to discover that surrounding yourself with excess material wealth is not a prerequisite for a happy life.
When you look at what free market capitalism has created for us – our cup runneth over.
For some, maybe. For others, not so much. Also, you have erected a straw man there. No one said that “more is better”, nor that bigger is better necessarily. This isn’t about improving the lives of people who are already wealthy. People know instinctively what quality of life is. Getting rid of poverty, and strengthening the middle class are good places to start.
Erroneous assumption in the first sentence. Planet Earth is not the limit of human action, so pfthtpt on your “law of diminishing returns” theory. Not everyone is as well off as you presume. Many have very little and have to work damn hard for that little. Capitalism is more likely to raise that poor person’s lot in life than misguided Malthus ‘ism.
” Bruce Cobb For some, maybe. For others, not so much. Also, you have erected a straw man there. No one said that “more is better”, nor that bigger is better necessarily. ”
No – it’s not a “straw man”. Every free 1st world capitalist country is seeing it’s indigenous population stabilize. A population that is no longer growing = far less opportunity to seize on a growing market (outside of the occasional new “thing” to come along).
Compared to poor starving people in 3rd world socialist hell holes who spend 95% of their income on food, the so-called “poor” in the USA on welfare and food stamps are living like royalty. Not only do they have clean hot and cold running water, central heat and air conditioning, free education and all the food they can eat, (looking at them waddling along), some of them own a car, some even own their own house. There isn’t much room left for our economy to “grow” and I think that’s the foolish idea behind admitting millions of poor immigrants here – like that will somehow keep growth going as though a capitalist model cannot survive without it. I say bunk to that.
The cure for the 3rd world is for them to become HONEST, EDUCATED AND SELF SUFFICIENT. They need to exploit their own natural resources to become rich like us and that means ending this UN CAGW nonsense being imposed on them. Then they too will see their populations stabilize just like ours did – naturally.
Bruce, good summary, thanks. Ever notice the green leftists want fewer people but they never lead by example?
Some do. I know a few that have no kids and live modestly. I presume they expect my grandkids to pay for their Social Security benefits, as they left no offspring to do so.
While China overtakes the western democracies in economic and military power by choosing not to be subjected to this idiotic carbon tax scheme, we are supposed to just give up all that we are as fairly well off States because some leftist, green idiots who may have some temporary power or control in some parts of governments say we should… Because there is a possibility of global warming, which is still being debated within the scientific community. And, none of these “saviors of the world at our expense only” idiots have not even considered that what they are preaching may be too late or that we can have adaptation strategies IF it comes down to it. Instead of shutting down the economic well being and rushing into a shutdown / destruction of our economies, we should be doing exactly what the non participants in this scheme are doing. Expanding and growing. If we all die of heat stroke, at least it’s mutually assured destruction instead of laying down and giving up. The Idiots I mentioned above can lie down, give up and be responsible for themselves if that’s what they want…Just don’t shove it down everyone else’s throats.
Mr. Pissed off. And plenty.
From a game theory standpoint, if I were China and Russia, I would be stoking climate fears to the maximum extent possible — even to the point of falsifying my climate data to make it appear “worse than we thought”. Given the West’s proclivity for self-loathing and our willingness to impair our future prosperity to indulge the neuroses of the Greens, all that China and Russia need to do to dominate the world is to convince us to shut down our own economies. Global Warming is the psychological super weapon of choice to be used against the west.
So true. And perhaps they are more successful with obama over here helping them along.
I think there is a good possibility that the Commies have been behind the destructive green / CAGW movement from the beginning
Jim Francisco
May 27, 2015 at 11:41 am
“I think there is a good possibility that the Commies have been behind the destructive green / CAGW movement from the beginning”
Well, it was the UN, actually. After the attempt to make the UN the world superpower failed in 1961 after the Katanga massacre, they needed a decade to reorient themselves and then came up with Limits To Growth, the Sustainability scarecrow, ecological destruction, see 1971 summit on the environment, Maurice Strong.
Club Of Rome: “…the common enemy of humanity becomes humanity itself…”
If there is disparity in the world, give a hand up where you can, and if it’s possible within reason without committing economic suicide to come t a parity. What makes everyone in the world richer is that there are better, more prosperous economies. The politics and other social factors which limit some regions in the world from becoming more prosperous is only going to change when the people in those less well to do regions make some necessary changes in their political and social systems…Not by throwing money at them. Now…A welfare world rather than a welfare state…Expanding the welfare system to the entire world. It has already been proven it doesn’t work. Give them the tools to do it and help them work it out themselves where ever possible, but do not throw money at them because it will be a never ending waste as has already been proven here in the U.S.
Indeed, but that’s only icing on the cake.
Thwarting gold circulation, and then moving irredeemable debt (IOU nothing) to the asset column and calling it ‘money’, is unbeatable.
There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
By the way, what makes people think we even have positive growth? Fabricated GDP numbers?
GDP = Money supply X velocity? No one can even define the money supply!
In fact, in our debt-based monetary system, what matters is the marginal productivity of debt. That is, how much additional GDP is produced for each new unit of debt incurred.
If the marginal productivity of debt is negative, that means that each new unit of debt incurred DESTROYS capital.
Well, the marginal productivity of debt is negative. We are going backwards.
Carbon taxes will only grease the skids.
Well the sun is only slated to last
It’s surprising greens haven’t recommended taxing use of the sun thinking that would slow down the sun getting brighter. Don’t we need to prevent the suns energy output from causing all of the water vapor on the earth to disappears into space in 1 billion years?
As stupid as that sounds the zero sum game greens like to play is equally as stupid.
Hymn to Money
by Ayn Rand
excerpt from Atlas Shrugged
(Note: Ayn Rand uses the term ‘money’ to mean ‘gold money’.)
Must Give Value for Value
So you think that money is the root of all evil. Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced, and there are men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must do so by trade, and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by men who produce. Is this what you consider evil?
When you accept money in payment for your effort, you do so on the conviction that you will be able to exchange it for the products of the effort of others. It is neither the moochers nor the looters who give value to money. Neither an ocean of tears nor all the guns in the world can transform those pieces of paper in your wallet into bread you will need to survive tomorrow. Those pieces of paper, which should really be gold, are a token of honor – your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on the moral principle that is the root of money. Is this what you consider evil?
Wealth Is the Product of Man’s Capacity to Think
Have you ever looked for the root of production? Take a look at an electric motor and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover how to do it for the first time. Try to grow food by means of nothing but physical motions – and you’ll learn that it is man’s mind that is the root of all the goods produced and of all the wealth that has ever existed on earth.
But you say that money is made by the strong at the expense of the weak. What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Does it follow, then, that money made by the inventor of the motor is at the expense of others who invented nothing? Is money made by the intelligent at the expense of the fools? Or by the able, at the expense of the lazy? Money is made – before it can be looted or mooched – by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.
Every Man is the Owner of His Mind and His Efforts
To trade by means of money is the code of men of good will. Money rests on the axiom that every man is the owner of his mind and his efforts. Money allows no power to prescribe the value of your effort, except by the voluntary choice of the man who is willing to exchange the fruits of his effort with you. Money permits you to obtain for your goods and labor what they are worth to men who buy them, but no more. Money permits no deals except those to mutual benefit by the free judgment of traders. Money demands of you the recognition that men must work for their own benefit, not their injury; for their gain, not their loss – the recognition that they are not beasts of burden born to carry the weight of your misery – that you must offer them value, not wounds – that the common bond among men is not the exchange of suffering, but the exchange of goods. Money demands that you sell, not your weakness to men’s stupidity, but your talent to their reason; it demands that you buy, not the shoddiest they have to offer, but the best money can find. And when men live by trade – with reason, not force, as their final arbiter – it is the best product that wins, and the best performance. It is the man of best judgment and highest ability that wins, and his reward is commensurate with his productivity. This is the code of coexistence whose tool and symbol is money. Is this what you consider evil?
The Scourge of Men Who Attempt to Reverse the Law of Causality
But money is only a tool. It will take you wherever you wish, but will not replace you as the driver. It will give you the means for the satisfaction of your desires, but will not provide you with desires. Money is the scourge of men who attempt to reverse the law of causality – men who seek to replace the mind by seizing the products of the mind.
Money will not purchase happiness for the man who has no concept of what he wants. Money will not give him a code of values if he’s evaded the knowledge of what to value. It will not provide him with a purpose if he’s evaded the choice of what to seek. Money will not buy intelligence for the fool, admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, thus trying to replace judgment with money, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and frauds come flocking to him, drawn by a law which he has not discovered, that no man may be smaller than his money. Is this the reason why you call it evil?
Money Will Not Serve the Mind That Cannot Match It
Only the man who does not need it, is fit to inherit wealth – the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and cry that money has corrupted him. Has it? Or has he corrupted money? Do not envy a worthless heir: his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among your cronies: loading the world with fifty parasites instead of one would not bring back the dead virtue embodied by the fortune. Money is a living power that dies without its root. Money will not serve the mind that cannot match it. Is this the reason why you call it evil?
Money As a Means of Survival
Money is your means of survival. The verdict you pronounce upon the source of your livelihood is the verdict you pronounce upon your life. If the source is corrupt, you have damned your own existence. Did you get your money by fraud? By pandering to men’s vices or their stupidity? By catering to fools, in the hope of getting more than you deserve? By lowering your standards? By doing work you despise, for others you scorn? If so, then your money will not give you a moment’s joy or a penny’s worth of happiness. Then all the things you buy will become, not a tribute to you but a reproach; not an achievement but a reminder of shame. Then you’ll scream that money is evil. Evil, because it will not pander to your self-respect? Evil, because it would not let you enjoy your depravity? Is this the root of your hatred of money?
Money Is Always an Effect with You As the Caus
Money will always remain an effect and refuse to replace you as the cause. Money is the product of virtue, but it will not give you virtue and will not redeem your vices. Money will not give you the unearned, whether in matter or in spirit. Is this the root of your hatred of money?
Or do you mean that it’s the love of money that’s the root of all evil? To love a thing is to know and love its nature. To love money is to know and love the fact that money is the product of the best powers within you, and your pass-key to trade your effort for the efforts of the very best among men. It’s the person who would sell his soul for a nickel, who is the loudest in proclaiming his hatred of money – and he has good reason to hate it, too. The lovers of money are willing to work for it. They know that they deserve it. Let me give you this rule of thumb: the man who damns money has obtained it dishonorably; the man who respects it has earned it.
The Only Substitute for Gold Money is the Muzzle of the Gun
Run for your life from anyone who tells you that money is evil. That sentence is the leper’s bell of an approaching looter. So long as men live together on earth and need means to deal with one another – their only substitute, if they abandon money, is the muzzle of the gun.
When Coercion Is the Standard, Murderers Win over Pickpockets
But money demands of you the highest virtue, if you wish to make it or keep it. Men who have no courage, pride, or self-esteem, men who have no moral sense of their right to their money, and are not willing to defend it as they would defend their life, men who apologize for being rich – will not remain rich for long. They are the natural bait for swarms of looters that stay under the rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of his guilt, and of his life – just as he deserves.
Then you see the rise of men of a double standard – men who live by force yet count on those who live by trade to create value to back their looted money – hitch-hikers of virtue. In a moral society these are criminals, and statues are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law – men who use force to seize the wealth of disarmed victims – then money becomes its creator’s avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters who get it from them the way they’ve got it from you. Then the race gets under way, and the prize goes, not to the ablest at production, but to the most ruthless at brutality. When coercion is the standard, the murderer wins over the pickpocket. And then society vanishes in a spread of ruin and slaughter.
Money Is the Barometer of Society’s Virtue
Do you want to know whether that day is coming? Watch money. Money is the barometer of society’s virtue. When you see that trading is done not by consent but by compulsion – when you see that in order to produce you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal not in goods but in favors – when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – then you will know that your society is doomed. Gold is so noble a medium that it does not compete with guns and does not make terms with brutality. It will not permit a country to survive as half property, half loot.
Paper Money Is Mortgage on Wealth That Doesn’t Exist
Whenever destroyers appear among men, they start by destroying gold money, for it is man’s protection, and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold is an objective value, an equivalent of wealth produced. Paper money is mortgage on wealth that does not exist, backed by guns aimed at those who are expected to produce. Paper money is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: “account overdrawn”.
When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and to become fodder for the immoral. Do not expect them to produce when production is punished and looting rewarded. Do not ask who is destroying the world. You are.
Where Wealth Is Obtained by Conquest There Is Little to Conquer
You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it’s crumbling around you while you are damning its life-blood – money. Throughout man’s history money was always seized by looters of one brand or another, whose names changed, but whose methods remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor. That phrase about the evil of money which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves – slaves who repeated motions discovered long before by someone’s mind and left unimproved for centuries. So long as production is ruled by force and wealth is obtained by conquest, there is little to conquer. Yet through all the centuries of stagnation and starvation, men exalted the looters as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised producers as slaves, as traders, as shopkeepers – as industrialists.
The Country of Money
To the glory of mankind there was, for the first and only time in history, a country of money – and I have no higher, more reverent tribute to pay to America, for this means: a country of reason, justice, freedom, production, achievement. For the first time man’s mind and money were set free, and there were no fortunes-by-conquest but only fortunes-by-work, and instead of swordsmen and slaves there appeared the real maker of wealth, the greatest worker, the highest type of human being – the self-made man – the American industrialist.
The Essence of Morality
If you ask me to name the proudest distinction of Americans, I would choose – because it contains all the others – the fact that they were the people who created the phrase “to make money”. No other language or nation has ever used this combination of words before; men have always thought of wealth as a static quantity – to be seized, begged, inherited, shared, looted, or obtained as a favor. Americans were the first to understand that wealth must be created. The phrase “to make money” holds the essence of morality.
Yet these were words for which the Americans were denounced by the rotten cultures of the looters’ continents. Now the looters’ credo has brought you to regard your proudest achievements as a hallmark of shame, your prosperity as guilt, your greatest men, the industrialists, as blackguards, and your magnificent factories as the product and property of muscular labor, the labor of whip-driven slaves, no better than the pyramids of Egypt. The rotter who simpers that he sees no difference between the power of gold and the power of the whip, ought to learn the difference on his own hide – as I think he will.
Blood, Whips, and Guns – or Gold
Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, men become the tools of men. Blood, whips, and guns – or gold. Take your choice – there is no other – and your time is running out.
Most excellent!
“Until and unless you discover that money is the root of all good..”
True but money still can be the root of problems –
http://www.listen2unclejay.com/gallery/albums/userpics/10001/women-problems.jpg
I found the mistake here that whoever graded it missed:
You mixed up the sign on #4) Money is the root of all problems.
This is incorrect. Lack of money is the root of all problems.
So you must reverse the sign, and hence problems are equal to lack of woman.
Well, I thought at least some of the ladies here would thank me for pointing that out.
*mumbles to self while kicking rocks in the back lot*
Wow…Well said Ayn. Very apt.
Economic growth must keep pace with population growth. Any restriction placed upon the economy will produce a negative feedback upon the population. Elites will, of course, be insulated from any adverse effects- for the poor of the world it would be catastrophic!
The elites in the Russian Monarchy weren’t very well insulated during the Bolshevic revolution. I’m not advocating that, but elites do take falls when their society crumbles around them.
Dalquist, the problem the Czar had in Russia, and the Shah in Iran, and many Mercantilists in Latin America – is “too little too late”.
The last Russian Czar was relaxing toward some freedoms – a legislature was elected, for example, except the Marxists executed it.
The Shah of Iran was moving toward some freedoms, including for females.
But Marxists and Religionists offered a quick-fix to people who didn’t grasp individual freedom.
“Did you say you wanted to buy more jet fuel Mr. Gore?” “Sorry…We’re clean out of it”
These are not the people you want in your lifeboat. Theirs is a model for failure and lacks the simplest expression of self-survival. I’d be perfectly happy to pass laws forbidding them from being consumers of manufactured goods. Especially food, but let us help kick-start their poverty by denying them electricity.
As a teacher, I am confronted daily with the miseducation of today’s youth. In many public schools basic economics is not taught because the NEA/AFT consider it to be “right-wing”. So, here I am looking at future voters who have no idea of what a “supply chain” is. Where did all this stuff come from? Houses, cars, electronics, the desk you’re sitting at? They don’t know. So, I take a quick poll of the kids think. What do companies make? “Pollution”. What does the gov’t do? “They give you money.”
And no, I’m not just talking about climate scientists. I primarily teach 18-19 year old college students. The majority have what I call an “institutional view”, where your life is “hopeless” because larger forces beyond your control, racism, sexism, ableism, etc. make it impossible for you to succeed.
So, the EPA will continue to destroy jobs and push industry off-shore and the kids will blame the “greedy” companies for low wages and the lack of opportunity here at home, cheered by Hollywood celebrities and the mainstream media.
It’s a common misconception among “progressives” that there is a fixed amount of money and that the rich control it all.
The first cave man who sharpened a rock for cutting created wealth and grew the economy.
If the rich control wealth disproportionately, how does one explain Bill Gates and Mark Zuckerberg…among many, many others who created wealth from nothing but an idea?
Dave Worley
This is because 85% of liberals/progressive/socialists/communists “earn” a living from the fixed resources of government/universities/teaching/union job markets where there IS only a fixed amount of resources and you MUST kill and defeat competing (liberals) interests among the “rich” (the powerful bureaucrats) to “get your “fair” share of the single-sized-fits-all pie of economic resources. That “fighting” for limited resources IS their life, their future and their past. They have NO other experiences. SO, therefore, that morally bancrupt competition for fixed financial resources unwilling given from a population forced to pay their taxes by a police-enforced amoral state is their life.
Were that it were true that most liberals were leeches on society but Obama did not get elected without being backed by wealth and crony capitalists. People who should know better vote liberal.
Executive secretary of U.N.’s Framework Convention on Climate Change, admitted that the goal of environmental activists is not to save the world from ecological calamity but to destroy capitalism.‘
“This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for at least 150 years, since the Industrial Revolution,” she said.’
And it’s not like the idea of communist socialism hasn’t already been proven to be a recipe for poverty. It convinces me that the only thing people who espouse socialism actually want is POWER for themselves; they couldn’t care less about the dire consequences socialism brings to people under their thumb.
Bingo we have a winner. Case in point: Clinton’s pay to play
One part of the issue involved is that new wealth is created in reality as a surplus of capacity that can be “reinvested” in the transformation of future cycles of production. Wealth is not a computer model regarding the whirlwind of paper in the market. The difficulty in organizing modern capitalism is somehow effectively being able to distinguish between Slash and burn pirates who are taking off with the booty and entrepreneurs who are creating new wealth. Sometimes both creatures tangled up in the same corporation but only the latter is actually creating wealth for the economy. Then there are the lawyers that largely fall into the pirate category using writs as their cutlasses.
Or maybe more broadly, new wealth is the result of productivity improvements. Those who invent better ways of doing things are really the people creating new wealth. However, liquidity is essential to creating the incentives that drive innovation. So we need a financial sector that provides for a high degree of capital mobility and liquidity. Without it the engine would be starved of fuel.
“lawyers that largely fall into the pirate category” Or parasite category per the class action SEC litigation notices I receive from time to time telling me I’ll get $5 and they’ll get $5,000,000.
It appears that people who *can* learn from history are the abnormal ones.
That “zero sum” conclusion is true as far as it goes, but only if people OBEY the law that the economy can’t grow. What would really happen is that all or nearly all of our economic activity would move to the black market. The result would look very much like Latin America, where most economic activity already is in the black market (simply because business is so over-regulated and overtaxed there that no one can afford all the fees (and bribes to bureaucrats) he’d have to pay to operate a business legally, so everyone just bribes the police instead).
Where are the
companiesgovernments brave enough to even ask the question of what the optimal size of acompanygovernment might be, after which it should grow no further, and how thatcompanyshould be governed and function with regard toinvestorsindividuals?Funny how they never bother to ask the right question.
But still Greenies and Commies and “Free Market Advocates” are silent on The Central Banks, The Petro-Dollar and Fiat Currency in general.
Real fans of a free market (not a “Free Market”, it’s easy to masquerade) know we have not had one for decades. There is a big difference between choosing growth to being forced to grow in order to counter the fake money flooding the market and devaluing everything you do.
So many impressions from travel. The dourness of Hanoi vs the vibrancy of Saigon. The shabbiness of St. Petersburg. The tin shanty towns of Africa. Grinding poverty. Black markets in Shanghai, South Vietnam,Chile. The anti-free market leftists are delusional(insane?) and dangerous. Morally obscene.
The real disaster comes from the infighting of liberal policy designs, with one side cutting growth back while the other side assumes growth will pay for rapidly rising debt obligations and over-promises of benefits for votes. At this rate we will have one advanced fighter plane for an air force and one advanced ship for a navy.
If you believe that capitalism doesn’t work, or that command economies under socialism work better, then answer me just one question. Where is the Venezuelan toilet paper?
Beware of the term “capitalism”, popularized by Karl Marx who meant something fundamentally different from the person who raised the term herein.
It’s much better to talk of individual freedom protected by defense and justice systems.
That encompasses both ideas and actions, many of which are economic. It avoids the mind-body dichotomy that neo-Marxists and Mercantilists believe in.
Mercantilists talk of economic freedom but don’t really mean it, we have much here in the form of the Bush family in the US and Stephen Harper in Canada, but Latin America really suffers from it. Though not as badly as they do under Marxism.
Marxism and Mercantilism are based on a negative view of humans as incapable and untrustworthy. That leads to fixed-pie economics, and drive-to-the-bottom ethics. Environmentalism is based on those two presumptions.
Environmentalists fail to look around them and grasp the obvious – demonstrated productivity for human life including secure shelter and medical advances, as well as the tended gardens, the replanted forests, clean water, and waste disposal. It’s as though they have a psychological barrier to accepting reality. (Their evasion is amazing. For example:
– an accomplished aviation mechanic in northern Vancouver Island claimed that people are cutting down all the trees, yet he’s undoubtedly flown over huge areas of trees, including many replanted areas.
– people keep babbling that deer are in urban areas near Victoria BC because their habitat has been eliminated by development, yet there are huge areas of wilderness not far from the cities (often in the news as some of it is a protected watershed). The obvious reasons for deer being in urban areas is better food (people flowers and vegetables are much tastier than rough shrub leaves), fewer of the strong predator (cougars – deer can handle individual dogs), and they are now being tolerated instead of harvested (they are now a resident population, breeding in the city).
Marxism and its Post-Modern derivative are bizarre ideologies. They actually teach contradiction – it’s called “dialectic logic”. They teach lying for the cause. And more than Mercantilism they always create an elite, because without a life-fostering moral compass, without recognition of the power of the mind, people are easily conned. Without respect for individuals, that elite will be oppressive. The bad rises – look at Lenin and Trotsky who met as cheap thugs in jail, look at Adolph Hitler (who was elected)
Tom J May: I dislike gross exaggerations. Ayn Rand had strong ideas for individual freedom before she met Patterson. Why do you want to tear her down?
Phillip, you are missing that people are more productive, due to better knowledge, more trading of values, and accumulated capital (gasp!) which funds machinery to produce more per person. Compare today with a century ago, in most fields and notably agriculture. And look at the standard of living most people have. (Even really poor people, in part because a more productive society has more to give to deserving people in need. No, the government did not do it – check the number of private charities in NYC a century.)
As for the effectiveness of squeezing competition, I recommend reading http://www.moralindividualism.com/monopol3.htm.
CBeaudry: Well, you are asking which is in theory good. But why do you assume inflation is needed to pay for interest on loans?. The interest is in effect rent payments for the capital you use. You are doing something with it, such as buying equipment to make things.
TheOriginalMikeM: You are very confused. See my reply to CBeaudry above. OTOH, inflation can and should be zero. Note also that growth and inflation do not go together.
(Interesting to compare products that are relatively static in design – when price is adjusted for inflation, it is little changed over many decades.)
I recommend economists Northrop Buechner, George Reisman, and Richard Salsman for rational explanations.
For a broad review of the benefits of individual freedom to humans, including a contrast to the Middle Ages, I recommend Andrew Bernstein’s narrowly-named book “The Capitalist Manifesto” and variants of it.