I added an o/t comment to another thread that MW asked me to summarize. Here is the summary, courtesy of the RSA. Personally I reckon the speaker is a complete tosser, but you may think different....
Forbidden Bible Verses — Genesis 42:18-28
1 hour ago
14 comments:
Great irony that the artist uses a monopoly board...
... but he is a very talented fellow to be able to draw so effectively like that.
Fantastic cartooning, and a load of old bollocks on "wage repression" - he starts from "wages as a proportion of national income" and leads it to "reduction of income" and "inability to buy goods and services" hence credit. Which is just pure sophistry because it completely ignores that the total of national income may have increased.
And he does nothing to convince that the problem isn't more to do with politicians and governments and tax systems that attempt to control and restrict and encourage in different areas. Just leave things the hell alone.
Well, in a similar sort of irrelevant and inconsequential way, I could continue the cartoonist's work. He has a small problem with the geography of the Monopoly board. He 'forgets' the existence of Chance cards - in fact lampoons others for forgetting those. Really? He 'forgets' the existence of Community Chest cards too.
And finally he says he can see the problems but not the solution. Well, I'd say that if you have no proposed solution, your analysis of the problem is substantially incomplete.
But he does have a proposed solution, in an indefinite sort of way: that somehow it stems from the wonderful work of a long discredited German economist.
The only interesting thing I did pick up from his partial analysis was the vague possibility that the Thatcher/Reagan actions were in the right direction: they were correct in curbing the unions but went too far in favouring the financial sector. Maybe we just need to disfavour that sector too (in a proportionate way) and then we will find a better median position. [Funny though how it is the more left-wing type of USA President who has been favouring corporatism; makes one wonder all over again whether fascism is right-wing.]
This all adds to my view that the politics of government is too binary: but how can it be otherwise, when one needs to bribe one's voters to turn out enthusiastically.
Well, maybe we just need government to do less. Less welfare state; less corporate protectionism and bailout.
But government seems keen on more: more from the USA Federal Government and less from USA states; 'ever closer' EU superstate; more responsibilities for the United Nations; and ever higher proportions of GDP being spent by ever more-encompassing higher levels of government.
The trouble with big (corporations and government) is the plausible attractiveness of the efficiency (including standardisation for the 'ease' of global economy and society).
What is forgotten is the lack of flexibility to cope with change. World government fights change and wins: by building a damn. That is until the water rises so high that the damn bursts. And then the damage is far worse than it would have been living with annual floods in the known regions.
So maybe the changey hopey we need is the one that recognises that less is more.
Best regards
L, the cartooning is fantastic. Love it.
As to the prof's "analysis", he's not completely wrong, certainly less wrong than most people.
He is a Marxist so he blames 'capital accumulation' and illustrates this with a bakery which reinvests profits in more plant and machinery. Well, that's good capitalism, in my books, whoever finances the expansion (profits or banks or shareholders).
And he says that the financial crisis was shoved geographically from the USA in 2008 to Greece today, which is bollocks, the two things might have the same cause but are otherwise not related.
But most of the time he reckons that the bankers are to blame, in which he would be entirely correct. Towards the end briefly mentions that the banks persuaded people to take out ever larger mortgages, which they can only do if house prices are rising and/or people take out ever bigger LTV mortgages.
So the prof has just got to learn to stop bashing capitalism and to start bashing Home-Owner-Ism instead.
@ Nigel: "Well, maybe we just need government to do less. Less welfare state; less corporate protectionism and bailout."
Yes of course, less regulation, less banning, fewer foreign wars etc, but I trust you are aware that on the spending side, the UK government spends much more on corporate welfare than it does on 'the welfare state' and old age pensions put together?
I'm not a Marxist, I think it's just one big system of false accounting.
However, I do think that the declining share of output going to labour as opposed to capital and especially rent is an issue.
I can't see any way out of this situation until people start getting pay rises. Yes, it will be inflationary, but develeraging and rebalancing the world economy against a background of price/wage inflatrion - rather than debt deflation - will be a heck of a lot less painful.
MW I agree it is the 'fault of the bankers', but why? Well, it's because they have been given special privilidges by politicians, that's why. Banking is a very important piece in the jigsaw that is successful human action, but it only works if it plays to the same rules as everyone else.
In short banking needs reform. It needs the state to take away its special privilidges. It could start with the reform of the 184 banking act, as proposed by Douglas Carswell.
Trouble is once you start down that road you end up with Hyekian denationalisation of money, and that idea all politicians hate.
So, the speakers analysis is clouded by his Marxism. His analysis is wrong as his facts are wrong. It is not at all a 'crisis of capitalism' or 'a crisis of banking' it is a crisis of crony capitalism or corporatism. What is needed is more 'true' capitalism, not less.
BTW excellent analysis by Janet Daley in the Torygraph today.
I have developed a little phrase to describe blokes like the speaker:-
They are 'clever enugh to know they are clever, but not clever enough to know that they're not clever enough'.
Just thought I'd share that with you. Developing phrases like that is down to my rep. training...
SL: "I do think that the declining share of output going to labour as opposed to capital and especially rent is an issue."
Capital is our friend! Capital is good! The amount of money that 'owners' of capital can get is strictly limited because it is merely accumulated labour which has to be constantly replaced by paying for more labour, and if automation replaces labour, then that labour will do something which machines can't yet do - at the margin, labour is always king.
It's best not to confuse proper capital with monopoly power or with rents (which are much the same thing).
L, yes, it's a crisis of crony capitalism or of corporatism, the worst excesses of which I refer to as Home-Owner-Ism or the Quangocracy. None of this can be blamed on small-government free-market liberalism, i.e. proper capitalism.
As I said above, the Marxist problem is that they fail to distinguish between the various kinds of capitalism - a lot of people get rich via theft, but lots of other people get rich fair and square. Blaming everything on rich people is missing the point.
What the early Socialists got wrong was blaming everything on the factory owners who paid such terrible wages. They missed the previous step which was depriving the small holder farmers of their land, which presented them with the stark choice: starve to death on the land or accept terrible wages in the towns which were at least enough to keep you alive.
Janet Daley was talking complete shite. The welfare state may be woefully badly designed, but it is far from the most expensive or biggest of our problems.
MW - too much of it (and all that lolly they printed) is just sloshing around in the casino.
Not (as a spread better) I have anything against the casino, but it is getting a bit silly.
MW - I think you've misunderstood JD as to the 'expense' of the Welfare State. It is not that it directly costs us too much, it's that the fallout from it destroys wealth creation. Since 1945 the socialist state has marketed itself as looking after its citizens 'from the cradle to the grave'. In action this means that the State has replaced the family as the core basis of society. People have become entitlement slaves (junkies?)of the State - that is of the taxpayer. And the result of that is wild irresponsibility. Furthermore lots of the framwework that has gone towards building this social democratic nirvana has messed up the price signal, the minimum wage for example. Therefore by 'costs' she does not just mean the actual wealth transfers but the wild distortions and attitude changes brought on by trying to build a socialist state on the back of human action, freedom and markets or if you pefer, capitalism.
The trick is to have merit goods like health and eductaion paid for by wealth transfers (which you and I broadly agree on) and capturing the privatised taxes (which you and I agree on absolutely) whilst not destroying the wealth creating ability of capitalism (I prefer Mises term 'human action' to 'capitalsim').
In both of the cases of health and education this can be done by a voucher system leaving the provision of the actual service to the effeciences of competitive free markets. And in the case of privately collected taxes we can...
Try reading La Daley's piece again.
SL, "all that lolly" is not capital though, is it? It's done deliberately to create inflation and is just a tax on savers and a subsidy to borrowers, i.e. yet another ugly face of Home-Owner-Ism.
L, I wholeheartedly agree that the UK version of the welfare state is very badly designed for exactly the reasons you mention, this could be fixed quite easily by having a flat rate Citizen's Income for a similar cash cost. The cash cost has never bothered me, the knock-on costs bother me very much.
I don't think JT's point is as subtle as that. She just wants to get rid of welfare payments to poor people, full stop, and she doesn't really mention the welfare payments to rich people (corporatism Home-Owner-Ism) or to borrowers (inflation).
MW I really am not sure she does just want to get rid of welfare payments to poor people. But I wholeheartedly agree that she is a home-owner-ist. You might even say she is home-owner-ist jihadist.
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