Globalization

POSTED BY: deepgirl187
UPDATED: Tuesday, August 26, 2025 22:20
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SIGNYM

Friday, October 19, 2007 7:53 PM

Fred automates his factory. He lays 60 people off. In doing so he improves productivity and generates more income. That extra money is invested or spent and that in turn generates more activity which needs to be filled by hiring more people somewhere in the economy. Can I garentee that all 60 of Freds redundant workers will get jobs as a result or that the jobs will be as well paid. No, but at least some of the jobs created (in the design, manufacture and maintainance of advanced production machinery) will probably be better paid than the ones that were lost.

Not only can you not guarantee it theoretically, but I can show it does not happen. Just plain doesn't. I've already cited the results Bush's policies, I can point to the recent Russian and Indian experience with capitalism (growth of a middle and upper class, more than offset by impoverishment of everyone else.) as well as historic examples of dozens of other nations.

So we will agree to disagree, and as I feel that I have theory, math, and evidence on my side I'll continue to say that capitalism causes the concentration of wealth which leads to recessions and depressions. In fact, this theory came about through the study of the causes of economic depressions. In your rosy view of capitalism, depressions should never occur. But clearly they do.

The challenge is to capture the benefits of capitalism w/o including the bad parts.

Your response is simply to say: capitalism has no "bad parts".

---------------------------------
Always look upstream.

LEADB

Saturday, October 20, 2007 1:12 AM

Sig,
I'm not entirely sure where you are headed. You aren't claiming we have pure capitalism in the US, are you?

Best I can tell, we have capitalism with significant socialist protections; though I think part of your point is the Bush admin is tearing back some of the protections, and heading toward 'purer' capitalism, and I'd tend to agree; and I'm suspecting it is not a good thing.
==
I'm also starting to be curious what it is Rue wants to replace our economic structure with.

RUE

Saturday, October 20, 2007 1:17 AM

A philosophy.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

SIGNYM

Saturday, October 20, 2007 2:03 AM

Quote:
Sig,
I'm not entirely sure where you are headed. You aren't claiming we have pure capitalism in the US, are you? Best I can tell, we have capitalism with significant socialist protections; though I think part of your point is the Bush admin is tearing back some of the protections, and heading toward 'purer' capitalism, and I'd tend to agree; and I'm suspecting it is not a good thing.

First of all, there never was "pure" capitalism and there never will be. Not because of government socialist tendencies but because capitalism (as featured by Adam Smith anyway) requires that competition take place "without fear or fraud". Right now, business has such a vast legal advantage (enforced by guys with guns, tasers, and batons) over workers that the competition which is supposed to take place among roughly equal actors is simply business playing one nation off against another for the cheapest environment ... with no power large enough to demand meaningful negotiation. That is NOT capitalism.

USA business interests abroad (and at home) are often enforced at the point of a gun- all you have to do is look at the Mideast, the Phillipines, Indonesia, Carribean, and South and Central America for a long, sordid history of government-sponsored rape and pillage and tyranny. The hellhole that we created in Haiti or Nicaragua or the Marianas yesterday is the hellhole that we compete against today.

So what Bush is promoting is what is called "socialism for the rich and capitalism for the poor". It's a one-sided policy.

If he were to promote capitalism, the first thing he would do is place unions, individuals, and business on the same tax structure, with same benefits, and the same legal responsibilities and liabilities. A business that knowingly makes a decision which kills people should be put to death (broken apart and sold off).

But capitalism does has some strong points. People have often said "If you don't like it so much what would you put in its' place?" We've already tried communalism, feudalism, mercantilism, command economies, socialism, and corporatism... the hard part is coming up with something that would be a living, evolving system with its own set of interests and motivations that would embrace the best parts of capitalism w/o reproducing its worst features.

And that's what I'm aiming at.

I'd like to think along with people who'd like to come up with somehting better. The problem is, so many people think there is nothing better.

---------------------------------
Always look upstream.

RUE

Saturday, October 20, 2007 2:29 AM

That's why the first and hardest thing you have to do is change a mind.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

FLETCH2

Saturday, October 20, 2007 6:52 AM

Quote:
Originally posted by rue:
And you both seem to accept the result of this modeling when it comes to teasing out strengths of the capitalist system. And you yourself use this approach to conclusions of your own. But when SignyM uses the same approach to describe capitalism's internal contradictions or weaknesses you cry foul.

I'm actually trying to match his style in the hope it will result in him hearing me. Unfortunately it produces yet another oversimplification which is why I'm becoming convinced I'm wasting my time.

Quote:

So, I truly hope to see a real discussion between the both of you and not this kind of shadow boxing.

It takes two to have a discussion and unfortunately Siggy has decided that accepting his anti-profit rant is a pre-requisite of having that discussion we will get nowhere.

Quote:

The thing I would like to see next is if you believe capitalism has NO weaknesses. And if not, why not.

It doesnt have weaknesses, it has problems, huge huge huge problems, that include such things as US interpretation of IP, Us corporate personhood, the distorting effects of large players in markets where they illegally limit competition, the distorting effects of media ownership, the effects of money on the political process....

However none of them are Siggy's "profit drag" theory and since accepting that is the only way we will ever stop him from ranting and as I'm not going to accept his idea because it's stupid I guess we wont get to discuss the rest.

SIGNYM

Saturday, October 20, 2007 2:07 PM

Fletch2: The concept of "profit as a drag" comes from the history of serious economic depressions that seem to go hand-in-hand with capitalism. Despite that you seem to think it's a lunatic explanation concentration of wealth is the classic explanation for the problem of wharehouses stuffed with goods and nobody able to buy. Just because the problem has been ameliorated with the introduction of "monetary policy".... a "fix" that we still apply today... doesn't mean that the process has gone away. All it takes is a committed "supply sider" like Bush to amp up the "gain" on that particular feedback, and recession (or worse) will come roaring back.

Now, concentration of wealth is a demonstrated effect of capitalism. You can see it here, and everywhere that capitalism touches. Unless there is some feedback to control that particular process, it will inevitably end with a very few people having a lot of money, and most people having very little. Not only is that "not fair", it's sure-fire way to destroy the demand that drives the economy. In the USA we tried fixing the problem with monetary policy, the EU used actual redistribution of wealth. Unfortunately for the USA, the monetary policy (making more money available through low interest rates) fueled the development of an "alternate currency"- housing speculation- in which people depended on the increasing value of their homes to support their spending.

You can disgaree with me all you want, and I'm sure you will, but the day to day facts of our economic decline require some sort of explanation and I'm convinced that explanation lies in "profit as a drag", which is aided and abetted by our current administration. And if the concept is as faulty as you claim, what DOES cause economic depressions and concentration of wealth? And why do we continue today to apply the remedy that was dreamt up in response to such a faulty theory?

BTW- You think this is "ranting"?

HAHAHAHAHA!!!!
---------------------------------
Always look upstream.

LEADB

Saturday, October 20, 2007 9:47 PM

If you would direct your attention to this chart:

http://finance.yahoo.com/currency/convert?amt=1&from=USD&to=EUR&submit
=Convert
you can see one of the effects of allowing too many dollars slip into circulation. $80/barrel oil is only 50Euros/barrel. I wonder what the price of oil in Euros was a year ago....

Edit: Oil was about $60 last year, and .8 Dollar to the Euro. About 48 Euros/barrel.

Interesting. One could reasonably argue the value of a barrel is the same this year as last (minor rise) while the value of the dollar is dropping.

SIGNYM

Sunday, October 21, 2007 4:37 PM

Too many dollars.... and the ones that aren't with the top 1% are outside of the country, thanks to our imbalance of trade.

That's why I've been actively looking for investments not based on the US dollar for about the past year: international stocks, international bond funds, gold, currency baskets etc. The fall of the dollar and the coming recession was an easy call. I've been trying to project what's going to happen as a result.

When you have an economic slowdown it can happen in one of two ways: with inflation (the infamous "stagflation" of the 70s) or deflation (the Great Depression). I suspect that the average person in the USA will get the worst of both worlds: starving for dollars while prices of everything the USA imports (which is just about everything) will skyrocket. (People who assume that the cost of goods in the USA will drop to meet the US demand don't realize that the cost of goods in the USA will reflect international demand.) So yah... we'll be holding the bag. Think about the devaluation of the Argentine peso in 2002 and the crisis around that time.

If you want to protect your worth, you should know that - aside from trading currencies in the forex and purchasing international commodities like gold and oil- a nation holding US dollars can only purchase dollar-denominated investment: US stocks, US real estate, US Treasuries. So foreigners holding US dollars can only "dump" them in certain ways. Right now, the overseas institutions that are holding dollars and dollar-denominated investments like Treasuries and US stocks (China, OPEC) are "leaking" their dollars into gold and other currencies, or simply refusing to accept more USD. They don't seem to be buying US real estate (as happened in the 70s when Asians with suitcases of cash bought up homes in LA and commercial real estate elsewhere) or US stocks (whose price has fallen despite numerous rescue attempts by the Fed.) But if you want your supply of dollars to increase as the value of the dollars falls, you have to be holding whatever it is that foreigners will be willing to buy should they choose to dump our currency. Aside from gold and other currencies, I haven't figured out what that is.

Also, the elections are coming up in a year, which may strengthen the dollar, so I wouldn't hold anything that can't be converted at about that time.
---------------------------------
Always look upstream.

RUE

Tuesday, October 23, 2007 5:14 PM

Without having had such a specific analysis, I too came to the conclusion: 'things can't go on this way'. (And hence the repeated debate with Rap.)

Despite being able to point to shifting and isolated positive indicators, overall there are major problems with the US economy - federal deficit spending, loss of jobs and imbalance of trade, failing infrastructure (as an economic issue), low R&D, low numbers of US graduate students in technical fields, foreign oil dependence -

And other worrisome trends by other countries looking after their interests - oil being priced in euros (many countries will not accept USD), as SignyM mentioned countries gradually reducing their dollars (treasuries and bonds) in favor of gold (and euros), etc.

While some (Rap) may find it unpatriotic to invest against the dollar, I personally have no interest in going over the cliff following the path Dubya laid out. And in reality he himself has no intention of going over the cliff with the rest of the country - he has HIS escape well constructed and ready. (Dubai anyone ?)

***************************************************************
"Global warming - it's not just a fact, it's a choice."

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