how will the left spin this

[Diuretic]

To answer your question, yes, you can have an advanced capitalist economy without big government. History shows us that big socialist governments tend to correlate with stagnant living standards, and you still have inequality, even in the most hardline socialist governments.

Okay that's a start. Can you cite some examples of advanced capitalist economies without "big" government.

And can you cite some examples of "big socialist governments" and the correlation of their existence with "stagnant living standards.....and.....inequality."

 

[Diuretic]

I wrote:

Perhaps the "small is beautiful" mantra is fine in a textbook but in a real economy with the supercharged power of an advanced capitalist economy a government that was too "small" would be wiped out

Baron asked:

How is an advanced capitalist economy going to "wipe out" our government?

I answer:

I was thinking in terms of the irrelevance of nations. A corporation is a collection of individuals who pool their resources to achieve things that they could never achieve as individuals. While the power of that corporation is weaker than the state they are operating in then they will be subject to the authority of the state. But if that corporation grows so powerful that it can ignore the state then government of that state becomes effectively irrelevant. To maintain its relevance the state must be more powerful than the corporation, it must exercise control over the corporation.

 

[BaronVonBigmeat]

Okay that's a start. Can you cite some examples of advanced capitalist economies without "big" government.

And can you cite some examples of "big socialist governments" and the correlation of their existence with "stagnant living standards.....and.....inequality."

Inequality is something every society has pretty much, socialist or not. If you want equality, you're going to have to go back to a tribal society. I'd be more worried about a general rise in living standards, and much more importantly, a fluid society. But if it's specific examples you want...

USA vs. USSR
China today vs. truly communist China
India today vs. India past
eastern europe vs. western europe
Germany 1947-1971 vs. Germany 1971 - present
south korea vs. north korea
Britain (and now Ireland) vs. France and Germany
Britain 1815-1915 vs. Britain 1915-present (living standards are still going up IIRC, but nowhere near the same rate)
Nearly any 3rd world or Latin american country vs. countries w/ property rights
Zimbabwe now vs. Zimbabwe 10 years ago
Cuba pre-Castro vs. Cuba post-Castro
USA before 1929 vs. USA 1929-1947
Taiwan 1947 - current

(not that all of these are shining examples of the small government ideal; it's all relative)

It isn't that corporations are generous and give out bigger salaries to workers. They don't of course, they're looking for the cheapest price they can get. But the workers are consumers themselves, and they in turn are looking for the cheapest price they can get. Companies have to offer better goods or lower prices to stay alive (unless they have government protection, which is always bad). Instead of asking why worker's wages are stagnant or falling (in terms of buying power), maybe we ought to be asking why prices never seem to go down.

I was thinking in terms of the irrelevance of nations. A corporation is a collection of individuals who pool their resources to achieve things that they could never achieve as individuals. While the power of that corporation is weaker than the state they are operating in then they will be subject to the authority of the state. But if that corporation grows so powerful that it can ignore the state then government of that state becomes effectively irrelevant. To maintain its relevance the state must be more powerful than the corporation, it must exercise control over the corporation.

Okay...but governments have guns and armies and things that kill people. I can't think of any corporations that field their own armies, probably because it would be a terribly money-losing proposition. Even a lowly country like Bolivia can nationalize a big corporation's oil infrastructure on a whim, and there's really nothing they can do about it.

 

[Huckleburry]

Baron,
I think that your view of the economy is overly simplistic. First you fail to account for externalities (positive and negative) that are not counted in our economy. While much of what you argue is appealing on paper, it fails the reality test. This is true becuase one of the implicit assumptions you are making is that externalities do not exist. But they do.

The easiest example of externalities is in the form of enviormental degradation. No market exists for oxygen creation, or carbon sequestraion, yet these things have a real impact on our economy. Until a market exists for certain essential goods your model can not function.

I agree that government could and should be scaled back. But their are some areas and insitutions which are essential to commerce. Interestingly you fail to note the importance of instutional stability in the success of many of the examples you use.

Also, I really like national parks. In fact, I think that the National Park Service is one of the few good uses of my tax dollars. Of course...I am a barefoot, granola eatin hippy, who just happend to find his way into a suit.

Cheers
Huck

 

[Diuretic]

Inequality is something every society has pretty much, socialist or not. If you want equality, you're going to have to go back to a tribal society.

I think even then there's be inequality. I agree with that point. I'm not for enforced equality, that simply imprisons an individual who is capable of doing more. It also removes any motivation from them. Why should I bother to do better at work, for example, to get myself promoted when there was no material benefit in for me (this "psychic income" stuff is all very well but it doesn't pay the rent). So, command economies are crap, they don't work. At this time in human existence pure communism, as pointed out by Marx and Engels, isn't possible in any advanced society. So, my position is to ameliorate the excesses of capitalism and restraining capitalists rather than destroying something that has probably been the most potent and effective and beneficial force in human history.

I'd be more worried about a general rise in living standards, and much more importantly, a fluid society.

Agreed. My old ex-Trot mate used to say, "a BMW in every driveway, but if you want and can afford a Maserati, then get one."

But if it's specific examples you want...

USA vs. USSR
China today vs. truly communist China
India today vs. India past
eastern europe vs. western europe
Germany 1947-1971 vs. Germany 1971 - present
south korea vs. north korea
Britain (and now Ireland) vs. France and Germany
Britain 1815-1915 vs. Britain 1915-present (living standards are still going up IIRC, but nowhere near the same rate)
Nearly any 3rd world or Latin american country vs. countries w/ property rights
Zimbabwe now vs. Zimbabwe 10 years ago
Cuba pre-Castro vs. Cuba post-Castro
USA before 1929 vs. USA 1929-1947
Taiwan 1947 - current

(not that all of these are shining examples of the small government ideal; it's all relative)

Interesting list that one. It would take a long time to get through them but food for thought.

It isn't that corporations are generous and give out bigger salaries to workers. They don't of course, they're looking for the cheapest price they can get. But the workers are consumers themselves, and they in turn are looking for the cheapest price they can get. Companies have to offer better goods or lower prices to stay alive (unless they have government protection, which is always bad). Instead of asking why worker's wages are stagnant or falling (in terms of buying power), maybe we ought to be asking why prices never seem to go down.

Prices don't go down because of market distortion. As we know, there is no such things as a perfect market.

Must be why everyone's looking to China and India. They know the west's consumers are in big trouble.

Okay...but governments have guns and armies and things that kill people. I can't think of any corporations that field their own armies, probably because it would be a terribly money-losing proposition. Even a lowly country like Bolivia can nationalize a big corporation's oil infrastructure on a whim, and there's really nothing they can do about it.

Good point. Of course the old British mercantilist companies (eg the East India Company) had their own armies but the state put an end to that - obviously too much of a threat. The state demands a monopoly on the use of force. As for Bolivia, I think Morales will find out when he's gone too far. His country doesn't have the infrastructure to get to its natural resources so he will have to come to an accommodation with the multinationals. I reckon that's so close you could almost crank up the stopwatch.

Edit to add: Thanks for the link to the paper on the fluid society, interesting read.

 

[rtwngAvngr]

Baron,
I think that your view of the economy is overly simplistic. First you fail to account for externalities (positive and negative) that are not counted in our economy. While much of what you argue is appealing on paper, it fails the reality test. This is true becuase one of the implicit assumptions you are making is that externalities do not exist. But they do.

The easiest example of externalities is in the form of enviormental degradation. No market exists for oxygen creation, or carbon sequestraion, yet these things have a real impact on our economy. Until a market exists for certain essential goods your model can not function.

I agree that government could and should be scaled back. But their are some areas and insitutions which are essential to commerce. Interestingly you fail to note the importance of instutional stability in the success of many of the examples you use.

Also, I really like national parks. In fact, I think that the National Park Service is one of the few good uses of my tax dollars. Of course...I am a barefoot, granola eatin hippy, who just happend to find his way into a suit.

Cheers
Huck

No, markets only function on SCARCE commodities. Think of oxygen as a ubiquitious free commodity, which should be free to everyone, like air, or the internet. .....own3d.

 

[Mariner]

one of the few here willing to lay out an actual list of what you'd cut. I'm with you on cutting the military (why do we need enough nuclear warheads to end life on earth 10 times over, exactly?), reducing the deficit (perhaps George Bush could call Bill Clinton for some advice on that), some parts of the "War on Drugs," and even looking at some of the large, old gov't departments to find out if they're doing useful work. Why exactly hasn't the "small gov't" Republican Party taken on this task, if that's what they stand for? Clinton/Gore's "Reinventing Government" initiative actually did take on some of these issues, far more substantively than any Republican actions since.

Medicare and Medicaid... I don't see how you'd cut them. Medicare provides elderly and disabled people with medical care. Are you really going to take away a quadriplegic person's home health aide or bedsore surgery? Medicaid provides poor people with health care. Cut it, and the costs are shifted to hospitals, particularly their emergency departments. So, when you're in a car accident you'll be waiting in a place clogged by people seeking care for advanced medical conditions that often could have been managed/cured/prevented if they'd had regular care. Diabetes is the classic example, where an ounce of prevention is worth a pound of cure, but no insurer is willing ot pay the preventative costs yet, and excellent programs that actually work can't stay afloat.

Mariner.

 

[Matrixx8]

http://news.bbc.co.uk/2/hi/business/4955092.stm

"Gross domestic product grew at a 4.8% annual rate, more than twice the 1.7% recorded in the last quarter of 2005. "

guess the tax cuts worked :teeth:

Oversimplifications seem to work well with some on this forum. Unfortunately, you did not establish a causal relationship between tax cuts and GDP. Nor does GDP tell you anything about how such additional value is distributed or even how it is arrived at in economic terms.

Here's someone who understood the problem better than most:

"Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product ... if we should judge America by that - counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

"Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans." Here is a quote from Robert Kennedy (University of Kansas address, March 1968)

In short, GDP says nothing about distribution of wealth and quality of life.

 

[rtwngAvngr]

Oversimplifications seem to work well with some on this forum. Unfortunately, you did not establish a causal relationship between tax cuts and GDP.

Though there is a correlation, and causality cannot be disproved.

 

[Matrixx8]

Though there is a correlation, and causality cannot be disproved.

Nor can the existence of Hobbits. Logically it's not possible to prove a negative. So what's your point?