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Topic: Finding the best system of economy (Read 16498 times)

  • ersi
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Finding the best system of economy
From the article (book review) Innovation: The Government Was Crucial After All

Quote
"The great advances of civilization," wrote Milton Friedman in Capitalism and Freedom, his influential best seller published in 1962, "whether in architecture or painting, in science or literature, in industry or agriculture, have never come from centralized government." He did not say what he made of the state-sponsored art of Athens's Periclean Age or the Medici family, who, as Europe's dominant bankers but then as Florentine rulers, commissioned and financed so much Renaissance art. Or the Spanish court that gave us Velázquez. Or the many public universities that produced great scientists in our times. Or, even just before Friedman was writing, what could he have made of the Manhattan Project of the US government, which produced the atomic bomb? Or the National Institutes of Health, whose government-supported grants led to many of the most important pharmaceutical breakthroughs?

We could perhaps forgive Friedman's ill-informed remarks as a burst of ideological enthusiasm if so many economists and business executives didn't accept this myth as largely true.


  • rjhowie
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Re: Finding the best system of economy
Reply #50
Well ersi with him  making me a Commie is such a hoot and will salute the picture of my Monarch above the fireplace and proudly in a Royalist home.  That is almost as funny as the chance of Belfrager becoming a Protestant.  :D :faint:
"Quit you like men:be strong"

Re: Finding the best system of economy
Reply #51
:lol: Or me becoming a Christian of any variety.  :lol:

  • krake
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Re: Finding the best system of economy
Reply #52

  • Josh M
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Re: Finding the best system of economy
Reply #53

I would not be so vocally anti-capitalist, if capitalism had a sound economic theory. Unfortunately capitalism does not have a sound economic theory.

The whole theory is built on the assumption of indefinite growth of production, consumption, and trade. This is of course untenable - even in theory. A sound theory would be built on satisying consumer needs (believe it or not, those needs are actually limited) based on the resources available. Even capitalist theory knows that the resources are limited, but they push for unsustainable hypes and hikes anyway because of alleged consumer demand. Naturally the boom is followed by the crash.

Another element that always caught my attention in capitalist theory was the mantra "price is information". This basically seems to mean "buy when it's cheap and sell when the price is up". This too is untenable - even in theory. In real economy, price is a contract. The buyer and seller agree on a price. When the price changes, it means that the agreement is off. When the agreement between the buyer and seller is off, there's zero trade, i.e. zero economy. Therefore the sustainable way is to keep prices steady, so that both decent people and capitalists alike will be safe from crashes.

Entirely agree. These thoughts frequently came on my mind too. Growth cannot be perpetual. At least not worldwide, neither perpetual in any single country. However, those who are living zero growth or low growth conditions are often dismissed as "the lost generations". But CPI (inflation figures) and GDP growth rates ... say usually nothing about 'how's life?' cause most GDP growth is benefited by tiny extremely wealthy group and ordinary people do not participate in such growth. If inflation is say about 1 percent or even 15 percent in some countries... and your money (wage for employment, retirement benefit, unemployment/social/housing/family benefits, investment income) is not getting up with the same rate (better with higher rate), people are becoming actually poorer than they were previously. Why central banks aims for 2 percent inflation (every year!!!!) ? And those crazy people who sitting at central banks always thinking that everything is fine. Yes. It is fine. (Just for them personally). Switzerland, Euro-zone, Japan and some few other examples show that 0 inflation figures does not harm economies. Exactly the opposite, its stabilizes individual savings, consumption, life planning etc. People are generally happier with 0 inflation. Negative inflation (deflation) is bad for manufacturing, corporations and employment. But very low (above zero) figures are OK for everyone.
  • Last Edit: 2014-12-30, 14:38:10 by Josh M

  • Belfrager
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Re: Finding the best system of economy
Reply #54
No one knows what is economy. Understood? Good.
Unfortunately, we have to live listening to economists, ruled by economists, defenestrated by economists.*

Economists are the fortunetellers, the charlatans of this globalised society.
Like meteorologists, another kind of charlatans, they always know why and how something happened, but they always fail about what's going to happen.

Surprisingly, or maybe not so much, they rule this brave new world.

* You, not me.
A matter of attitude.

  • ersi
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Re: Finding the best system of economy
Reply #55

Switzerland, Euro-zone, Japan and some few other examples show that 0 inflation figures does not harm economies. Exactly the opposite, its stabilizes individual savings, consumption, life planning etc.

Quite right.

Contrary to von Mises and Friedman for whom "price is information", Keynes provided the observation that "prices tend to be sticky". Prices (and wages are viewed as a kind of price in classical economics) tend to be sticky because this is what people want - arrangements/agreements/contracts that work and provide security. Why else have the arrangements?


Economists are the fortunetellers, the charlatans of this globalised society.
Like meteorologists, another kind of charlatans, they always know why and how something happened, but they always fail about what's going to happen.

Good analogy. Economists are perfectly comparable to meteorologists. However, it's a pretty sensible mathematical science, not hodgepodge or charlatanry. I have seen good predictions a number of times.

Meteorologists can quite accurately predict their own imprecision, when they do their work. Economists unfortunately are generally dishonest, lazy and stupid. They falsely imagine they are as accurate as physicists, while they can systemically be only as precise as meteorologists.
  • Last Edit: 2015-01-09, 08:27:54 by ersi

  • ersi
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Re: Finding the best system of economy
Reply #56
Hopefully someone will make a YT clip from 3:25 to 7:45 of this video. Or at least from the economic insight between 4:40 and 5:00. Here's the video http://arenan.yle.fi/tv/2451570
And the insight, if you don't understand the language (Swedish):

The host: Where does the money (for the ECB's purchase of state bonds) come from?

The analyst: Good question. The money comes from ECB's computers. It's the money that the ECB can create - in its capacity as a central bank - out of nothing.

My observation is that money out of nothing is a relatively new idea. Money used to be understood as a measure of value of real-life assets primarily, as in accounting. The theory of monetary eigenvalue used to be secondary. These days it's the other way around. The turning point was, inasmuch as I know the history of world economy and finances, the collapse of the Bretton Woods system. This system was undermined by the United States when it ceased to be in their own interests. They didn't like that the system served everybody's interests.

The specific event was this: "On 15 August 1971, the United States unilaterally terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a fiat currency."

  • Belfrager
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Re: Finding the best system of economy
Reply #57
My observation is that money out of nothing is a relatively new idea. Money used to be understood as a measure of value of real-life assets primarily, as in accounting. The theory of monetary eigenvalue used to be secondary. These days it's the other way around. The turning point was, inasmuch as I know the history of world economy and finances, the collapse of the Bretton Woods system. This system was undermined by the United States when it ceased to be in their own interests. They didn't like that the system served everybody's interests.

That's correct.

I don't remember the exact number but the amount of financial transactions worldwide compared with the amount of real money that exists is up to one hundred times more or something like that. Just numbers in computers.
Pay the debt? press delete.
Simple as that.

What takes us to the Saxon strategy against Southern Europe, of course. Economy it's a weapon, always was.
A matter of attitude.

  • ersi
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Re: Finding the best system of economy
Reply #58


  • Belfrager
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Re: Finding the best system of economy
Reply #59
Some (many) idiots are easily convinced by the media that their wellbeing depends on what is told to them how "economy" goes.
Then, the same very idiots votes. That's why "economy" exists. And economists, the useful clowns.
A matter of attitude.

  • ersi
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Re: Finding the best system of economy
Reply #60


  • ersi
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Re: Finding the best system of economy
Reply #61
Here's a lecture on how common paradigms of economics ignore environment and how environment should be incorporated in economics. The central statement of the lecture somewhere in the middle, "Economy is a subset of the environment."

  • Belfrager
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Re: Finding the best system of economy
Reply #62
The central statement of the lecture somewhere in the middle, "Economy is a subset of the environment."

Is it? and about bitcoins? and about futures? is it financial gambling a part of environment? :)


Course there's a big diference between economy and financial... no one really speaks about true economics these days, everything is about financial.

A matter of attitude.

  • ersi
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Re: Finding the best system of economy
Reply #63

The central statement of the lecture somewhere in the middle, "Economy is a subset of the environment."

Is it? and about bitcoins? and about futures? is it financial gambling a part of environment? :)

"Subset" is something different than "part". "Economy is a subset of the environment" means that economy exists completely thanks to and on the mercy of the environment, like foetus depends on mother.

  • Barulheira
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Re: Finding the best system of economy
Reply #64
I'm not so sure. But I won't dispute that.

  • Belfrager
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Re: Finding the best system of economy
Reply #65
I'm not so sure. But I won't dispute that.

They don't think like us. Course a subset is a part.
A matter of attitude.

  • OakdaleFTL
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Re: Finding the best system of economy
Reply #66
Subset" is something different than "part". "Economy is a subset of the environment" means that economy exists completely thanks to and on the mercy of the environment, like foetus depends on mother.
As I've known for a long time: You don't know what most terms of logic mean! :)

Might I recommend any introductory text in modern elementary (basic, simple; preliminary, required) logic?! :)

To your point that ""Economy is a subset of the environment" means that economy exists completely thanks to and on the mercy of the environment [...]" is merely a notion that your absurd ideology finds comforting... (You like to think that -once you've defined a term- it then has an effect upon reality! Sorry, kidd-o: Your delusions are your own problem; and your opinions based upon them are as supportable as they'd be without them -- to the likes of me.
Which is why they've seldom convinced me...
(I'd say "Put up or shut up!" But you don't seem to have actual opinions... :) )
进行 ...
"Humor is emotional chaos remembered in tranquility." - James Thurber
No one listens to me as much as I do and even I have my limits...
"Science is the belief in the ignorance of experts!" - Richard Feynman

  • ersi
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Re: Finding the best system of economy
Reply #67

As I've known for a long time: You don't know what most terms of logic mean! :)

Might I recommend any introductory text in modern elementary (basic, simple; preliminary, required) logic?! :)

To your point that ""Economy is a subset of the environment" means that economy exists completely thanks to and on the mercy of the environment [...]" is merely a notion that your absurd ideology finds comforting...

Are you making a point about logic or ideology? I used to think there was a difference between the two. Teach me.

  • OakdaleFTL
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Re: Finding the best system of economy
Reply #68
Are you making a point about logic or ideology? I used to think there was a difference between the two. Teach me.
No you didn't; no you don't!
The idea that "economy" and "ecology" are sets is preposterous...

If you don't understand that the real world is something different from the dry terminological disputes of so-called scholars, you'll remain ignorant of much that goes on there.

Let me offer you some new definitions: "Economy" is what people do, in place of warfare... " And "Ecology" is what happens..." I'm sorry to be so blunt; but I'm also sorry you're so obtuse.
进行 ...
"Humor is emotional chaos remembered in tranquility." - James Thurber
No one listens to me as much as I do and even I have my limits...
"Science is the belief in the ignorance of experts!" - Richard Feynman

  • Belfrager
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Re: Finding the best system of economy
Reply #69
Being Eco the same, nomy means measuring and logy means knowing. The first means quantity concerns while the second means quality concerns.
A matter of attitude.

  • ersi
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Re: Finding the best system of economy
Reply #70

The idea that "economy" and "ecology" are sets is preposterous...

Why? How?


Let me offer you some new definitions: "Economy" is what people do, in place of warfare... " And "Ecology" is what happens..." I'm sorry to be so blunt; but I'm also sorry you're so obtuse.

As per usual, your definitions are Oakdalean, i.e. defective.

Economy is what people do in place of warfare? Is e.g. going to the library or voting an economic activity? Your fav school of economy in fact denies govt any role in economy, even though govt is, from one point of view, something that people do, and from another a group of people that do stuff.

And ecology is what happens? Here you are missing the specification - happens when, where, to what, by whom? Is ecology what happens when people do stuff other than warfare? 

Better definitions:
- Economy is the sum total of people's economic activity, i.e. production, consumption, trade, commerce, and finances. This occurs regardless of peace or war, even though it takes different forms depending on peace, war, level of social (dis)order, etc.
- Ecology is the environment that enables the activity we call life, including economic activity.

  • Belfrager
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Re: Finding the best system of economy
Reply #71
Best system of economy - robbing banks.
In others words, paying back with love.
A matter of attitude.

  • ersi
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Re: Finding the best system of economy
Reply #72
Robert Koons has an interesting article about theoretical economics where he says that disagreements in economics are due to disagreements in metaphysics. This has been my impression too.

According to Koons, there are broadly three kinds of metaphysics:

- Spinozan a.k.a. cosmic
- Cartesian a.k.a. dualistic, which in its modern version is reductive physicalistic and atomistic
- Aristotelian a.k.a. intermediate

Spinozan or cosmic metaphysics yields socialist or progressive view of economics, says Koons. Cartesian or dualistic yields classical liberal or libertarian economics. Aristotelian metaphysics yields conservatism, a peculiar Koonsian conservatism.

The last is, according to the article, of course the best or the rightest kind of economics and sociology due to stemming from the rightest kind of metaphysics. Its notable features are respect for property rights and inheritance, where socialism would overstep them by treating everything as common property because the only agent, in the eyes of socialists, is the society.

Another feature of conservatism is orderliness, having moral distinctions of vice and virtue, so that rights and liberties would not become a license to treat one's own property indiscriminately, as it may happen in libertarianism.

There are some random isolated points in the article that I agree with, but it doesn't seem to present a coherent whole. For example, it's not quite clear to me how Koons derives libertarianism from Cartesianism and why cosmic metaphysics can be called Spinozan. (Maybe because Koons has read Spinoza and I haven't?)

And I cannot agree with his overshooting criticism of socialism and liberalism. The features he criticises, such as indiscriminate license and lack of property rights, are inherent only to anarchism and totalitarianism. Ordinary socialism and liberalism have more nuance than Koons permits.

On the other hand, a point of agreement between me and Koons is the view of the individual as microcosm of society (he doesn't say this, but describes it this way) wherefrom stems a necessity for an ordered system of intricate priorities, if we are to make sense of the world. It's just that I would not label it in any way Aristotelian and there are plenty of distinctly Aristotelian elements that I have nothing to do with. However, I agree with the basic premise that disagreements about economics correlate with disagreements about metaphysics or world view.

All in all, the article is a nice abstract thought exercise with a great inspiring potential, even though it crumbles down structurally and stays at the level of musings, not a coherent system. That's why it's among Koons' unpublished papers, I guess.

  • krake
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Re: Finding the best system of economy
Reply #73
Best system of economy - robbing banks.
In others words, paying back with love.
That's what bankers are doing by playing monopoly with money they don't own. :)
They don't even have to pay back with love. If the bank gets bankrupt, it will be bailed out with taxpayer money.

  • Belfrager
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Re: Finding the best system of economy
Reply #74
If the bank gets bankrupt, it will be bailed out with taxpayer money.
Because you are a slave. I'm not.
Tax payers is the modernist name for slaves.
A matter of attitude.