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call to action posted:Well, it certainly didn't create it, as the US middle class was founded on European bones post-WWII. Is the theory that globalization was the only way to sustain that lifestyle after Europe recovered? Please be aware that there was a globalized world before and between the world wars, which pretty much lead to similar effects in many countries as today. since you asked Is international free trade good? International trade allows, in theory, to exploit different factor endowments (including resources) and technological skills of countries by playing to relative advantages. This, not only in theory, allows the world to produce everything more efficiently (same principle as division of labor). If you think about it a little bit, this is so generally true that we basically only need to argue about how big this improvement is, not if it exists. And: if it is perhaps outweighted by something else... It is not really controversial that the amount and range of products available today can be attributed mostly to, next to new technologies, globalized trade. Both factors here are necessary. In practice companies, for example, use economies of scale and scope to make products available which would otherwise not be profitable to produce. This is especially true for parts of the value chain that the end-consumer never comes in contact with. There are endless arguments, from economies, resources/factors, to competition and politics why a lot of trade basically leads to more consumable stuff produced on the planet earth (I will return later to the question if everyone actually profits from this). So yes, end of trade would mean that most products we enjoy today would disappear, even in the long run, as resources and investments have to be shifted towards products which are inefficient to produce in the country. There are some nice examples to how things look when the range of products decreases. You might feel that it is not necessary to have so many products of the same type. And to a degree, markets tend to produce too many varietes. But variety is still good and the other extreme really hurts your quality of life. Prime examples are really countries which do not trade internationally. Basically, nothing you buy really fits you and most things are not very good. Nevertheless the theory is also clear on the following: A big country like the United States CAN profitably implement protectionist measures. Even measures which would not be profitable will first and foremost hurt the smaller countries (in economic terms). As funny as this sounds, compared to US, the classic "smaller" country today is China. There are numerous things countries can try to do to profit more from trade and a lot of papers have been written of this. But intuitively, a powerful country can do almost everything it wants. That's why the WTO exists and that's why everyone gets so drat nervous about Trump. So when is free trade not good then? There is a range of protectionist measures that make sense overall. Certain industries and certain times in a country require these things and the WTO generally allows this. Let's talk however about more systemic problems. First, not everyone profits from trade. Wages, for example, will not rise in every sector if labor is immobile (this is why the EU also includes free movement). Statically and overall, all countries will profit in an absolute sense. But in reality it does matter where you work and labor is not just labor. As such, trade can lead to structural problems in countries, even in Western countries. Second, increased trade obviously leads to more production which leads to environmental issues. Overall, it will be hard to make a case that trade is bad for Western countries. Trump is not really targeting trade. He is trying to profit from it more because he realizes he leads the only country in the world which can dictate terms to every other country. For other countries results differ, but it is virtually impossible to overestimate the real positive impact trade has on our consumerist lifestyles. It has been a long time since Western countries didn't really trade, but everytime this did happen it lead (or would have lead) to deep crises over a span of five to ten years. The trick is now the realize these are not temporary crisis, those were adjustments to a state where things simply sucked more. Let's go to non-Western countries. Again, overall, trade has had many positive effects. Poverty, infant death, illiteracy etc. have decreased almost exponentially parallel to international trade (there are of course real analyses of this) in the last fifty years. It's clear that even if you want to attribute all this to technology (which you should not), then trade was still the cataclyst for diffusion. A good case can be made that the ONLY efficient development aid we have actually come up with was international trade and investments. Especially in countries in which exploitative institutions (Acemoglu/Robinson argument) makes every other form of development aid that is not motived by personal profit pretty much useless. Arguing that non-developed countries are worse off is usually done by people who idealize agricultural and tribal lifestyle. One can argue about this. The reality of such life, however, has been really lovely. Famine, child death, exploitation and lack of culture are mere symptoms of these economic hardships. So the question is not if international trade has helped people. The question is of course always if we can do better. And here I find it helpful to look at the semi-developed countries such as for example Turkey (because I know Turkey). Turkey is not a rich country nor has it been for a while. A good way to see what this looks like are the rural parts of Turkey, where things are not really developed. However, Turkey has on the surface profited greatly from international trade, because it allowed instant access to almost all Western consumption goods. Even Westerners can live comfortably in Istanbul. If you have money, you can get almost everything you can also buy elsewhere. Supermarkets stock consumer items from all-over the world. And while the range is still smaller than in Western countries, this kind of stuff has an immeasurable impact on real people's lives. Think just of medicine! I mean poo poo, a village doctor in East-Anatolia without any trade can pretty much not help you at all. This is true for almost every semi-developed country in the world. There is a negative here, however. Everything you import, efficient as it may be to do so, needs to be payed (in the end) by inland production. Inland production in Turkey, however, is not very high. Turkey therefore can chose to take on debt as an economy, or it can try to produce where it is competitive. And here comes the problem for non-Western countries. They are only competitive (or have a relative advantage) in sectors which are not long-run desirable, ie, low-grade industry, textiles, agriculture and such. Profits from these ventures quickly find their way to the West. These industries do not further the development of the countries much (compare impact of tech industry to textile industry on a community, for example). They lock in people to the choice to either take a low-education job or work abroad, leading to brain drain. They are also easy to shift, making the countries economic power volatile and dependent even more on Western countries. It is NOT obvious that semi-developed countries can overcome these issues to close the gap. In fact there are strong structural reasons why Western countries will keep their advantage in exactly the sectors which we can call long-run desirable. So while trade helps the actual life of people right now a ton and has done so inverse-proportional to how advanced the country was before trade, it also leads to structural issues that are not easy to overcome. And I actually do not know a single country which has. Estonia has tried, I guess. My verdict is this. Without trade, lives of most people on the planet would immeasurably suck more. But free trade may not lead to an equitable world in the long run, and it is not clear this was ever the intent of Western countries.
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Jan 11, 2017 09:52
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call to action posted:
Man you could have at least read the post tho rude Paradoxish posted:And what people are saying is that there's no way we ever reach that point, at least for manufacturing. There's already a floor for most "unskilled" labor that can be outsourced where it's cheaper to just say "gently caress third world labor" and run an automated facility that can operate with a relatively small number of skilled workers instead. We aren't in danger of running out of places to exploit just yet, so it seems pretty unlikely to me that we'll hit peak exploitation before automation makes the issue moot anyway. In my opinion the "exploitation" is yet to happen. Don't get me wrong. The current state of outsourced manufacturing sucks for the people involved. But it sucks less than before for the large majority of actual people in those countries. Because while we can talk about what should be different to reduce poverty, increase literacy and abolish slave labor, the facts are that international industrialization is the ONLY working and long term plan that did improve on these things in reality. And in every country it did so exponentially. Every country where fifty years ago large parts of the population where in danger of starvation or death by illness each year, and where now manufacturing moves out of because "people simple aren't poor enough anymore to exploit", it a HUGE achievement. Each case dwarfs monumentally the impact, both theoretical and factual, of any other development aid or government attempt. For me, it shows that any workable political, developmental and economic system needs to be based on the assumption of human self-interest, because in the end this is the catalyst of any change. Short of human nature making a U-turn and countries declaring that "we are one" and "everything will be shared" in unision, THIS is the only measure we ever had to improve peoples lives over the world. I keep making this point because international trade is, was and will be opposed by people who simply do NOT have a real politically viable alternative. THAT BEING SAID, I think it is far easier to lift people out of total poverty than it is to make a just-industrialized country work in light of Western economic power. I made the point above without automation, but automation makes it even more true. The canon that development will lead to convergence is simply misleading. It is much more likely that the individual desire for quality of life will lead to a rational, yet destructive build up of implicit or explicit debt of non-Western countries, both in terms of trade balance and in terms of ownership of capital within the country. This enables a macroeconomic exploitation in the long term. This is important in my opinion because it is compatible with the incentives of all decision makers involved, including the people. Macroeconomic debt always hits the next generation more than me, for example. So in my opinion the issue is not that on a long term basis everyone is now less poor, the issue is that we tell people that even without political change they will "one day" achieve Western lifestyle.
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Jan 12, 2017 09:30
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The reason trade in medical care is not globalized is literally logistics tho In Europe, for example, it's quite normal to fly to a cheaper country to have expensive medical care. The reason it's not overwhelming is because there is a huge uncertainty about quality in those countries. Arabs, on the other hand, have all their medical procedures done in UK or Germany. Far less of this can be seen in the US. Because the US is logistically more isolated. If you run this in one of the most robust and simplest model classes, you consistently identify distance as a or the major determinant of trade streams for a large group of goods and almost all services.
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Jan 13, 2017 06:04
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Comparative advantage is an attractive theoretical model because it is so obviously true no matter how more complicated you make the factors in it. It's not true that there are no "more realistic" developments of this setup, it's just easy to see that this mechanism will prevail in this model class anyway. What you need to understand though is that the model is not half as normative as it is made out to be here. I have already written above how it is not at all clear that trade will lead to convergence of technology and living standards. Blindly optimizing comparative advantage may optimize global welfare and is efficient, and that will remain true no matter what bells and whistles you put on that model, BUT the distribution mechanism is not at all specified enough to make it a necessarily good idea. But there we are in the details of international trade policy already, because all sorts of strategies that will be proposed presume the existence of a more-or-less international market. And when we are arguing here, it was first about arguments like "globalization is bad because capitalism". Well, the reality is that the problem to solve are poverty levels north of 75% across most of the people living on this earth. And what alternatives are there? Foreign aid is ineffective. First, it is impossible to control how foreign aid is used. Given that part of reality, and the reality that inequality is large in developing countries, most of the money ends up in the hands of elites: either directly, or indirectly through corruption and exploitative institutions. Due to these exploitative institutions, foreign aid is unable to stimulate growth and change (see Acemoglu/Robinson). Furthermore, it can be said that therefore foreign aid supports and cements inequality and exploitative institution orders in developing countries. Given this dire outlook, the exponential decrease in poverty and illiteracy due to international trade is nothing but cool and good. Whoever doesn't understand the magnitude of improvement in quality of life this has brought to the majority of people living on earth, is a sheltered rich-world baby. If you do not comprehend that precisely in the countries participating in international trade and industry, the poverty level (people with less than 2$ adjusted PPP per day) has dropped from 95% of the population in 1981 to less than 30% in 2011, all while in the countries NOT participating much in international trade, such as Sub-Saharan Africa, the drop was only from 75% to around 70%. And this with substantial foreign aid influx with all sorts of different programs! These facts are just more extreme if you consider longer time frames and lower poverty thresholds. So if you assume technological diffusion will just magically create factories and jobs, then reality has already proven you wrong. If you assume that poverty levels have to decline because of growth convergence, then reality has proven you wrong. If you assume that participation in trade has not lead to the comparably biggest decline in poverty levels, then you are also wrong. Some pages before, I have written enough words on the negatives of international trade and the outlook of technological and welfare convergence. But let's stop with this exploitation bullshit now. Whether you like it or not, the only effective and realistic instrument for improving people's life has been profit interest of international capital. The only way forward is to recognize this and deal with it, not live in some sort of fantasy world where bound capital (aka the wealth y'all wanna distribute here) in terms of factories and universities, and all the connected infrastructure, will just unroot and magically fly through the air to Africa. I mean gently caress
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Jan 23, 2017 12:21
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trade is overall good against poverty rarely and I mean rarely has there ever been a fact so obvious and supported by data in recorded history of society and lol if u think that poor third worlders arent gonna be the first to suffer if world trade declines developing countries like the BRICS gonna lose all their nice toys and product variety and western countries are gonna be comparably slightly inconvenienced at best edit: I mean it's gonna suck what with less iphones and such. But for certain third world countries I could literally draw a line in the income distribution and say "here, all you guys below this, probably gonna die of starvation/sickness" Edit2: and America using its large-country bargaining position in world trade may also very well have the same effect. Trump may very well be killing peeps for the jobs y'all wanna have back Haramstufe Rot fucked around with this message at 23:25 on Feb 2, 2017 |
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Feb 2, 2017 23:21
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call to action posted:As they should. Nobody should ever accept "well the poor people in China are slightly less poor now" as a valid excuse for the complete destruction of the American middle class. I agree! The fact that exclusively due to trade the global poverty level has decreased from 45% (people living with less than 2$ppp) to less than 5% in 35 years is not really relevant because who cares about those couple of millions brown people. What is important is to keep the ideological Leftist imperative intact, which means that trade is bad because it smells somewhat like Capitalism and that's certainly bad because someone said it is!!!!! This is not at all the opinion of some non-poor, sheltered Westerner who can not possibly fathom the material reality of a 40% decline in global poverty. It is not the opinion of someone who prefers outdated leftist ideology to facts and, by virtue of disconnected echo-chamber dogmatism, belongs to the groups responsible for the death of Western liberalism and leftism. nono, not at all
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Feb 7, 2017 17:55
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"we could not care less if tens of millions of black and yellow people starve to death, at least without trade there is less capitalism" literally this thread and lol the idea that now suddenly IMF investments have defeated poverty. How clueless can you be? readingatwork posted:Why is protectionism destined to fail? It may not be perfect but it was the normal way of doing business for centuries. Yes and exactly during that time there was no economic growth (for literally thousands of years) and one third of your country might suddenly die because there's too much or too little rain.
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Feb 8, 2017 10:26
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Nice piece of fish posted:Please qualify this statement, unless you're just a lovely troll. Unless you draw full equivalence between fur-clad tribespeople and Egypt (literally a vast kingdom of immeasurable wealth, literally several thousand years ago) this statement is complete nonsense. You should also learn the meaning of the word "literally" sometime. just read Piketty I guess.   Countries of wealth were always also countries of active trade. Nevertheless, for the vast majority of human existence, economic growth, both globally and locally, was lower than 1% or non-existent. At the same time, inequality was much higher than virtually anywhere today, also for countries which were comparably wealthy (aka your example of Egypt). Countries with active trade, on the other hand, were always also associated with higher social mobility because of two things. First: opportunities outside hereditary or caste-like instutitions and second, foreign influences and opportunities. Successful trade in many goods necessitates a relative flexible and adaptible economy (see Venice for example). The extend of exploitive institutions, which enables and propagates both poverty and inequality, is closely associated with protectionism (or trade which is only open to state actors for example oil). On the other side, countries regressing into political and economic isolation are consistently regressing on measures of wealth, poverty and institutional inclusivity, even today. To be sure, these things are interrelated (that is, they are determined simultaneously) and so correlation does not equal causation, even if the latter surely exists. See Acemoglu/Robinson for more on this. For more development from 1820 onwards, please refer to Bourguignon and Morrisson (2002) – Inequality Among World Citizens: 1820–1992. In American Economic Review, 92, 4, 727–744. Furthermore Chen and Ravallion (2010) – The Developing World is Poorer than We Thought, But No Less Successful in the Fight Against Poverty. In The Quarterly Journal of Economics, 125, 4, 1577–1625.  The reason why trade specifically seems to be important (and not just, let's say industrial technology), is that the four factors of institutions, productions, trade and poverty are correlated even despite global influences like technology. So for example, the most successful developing countries are those which participate in trade, whereas the least succesful countries are those which do not. Notably, foreign aid is definitly not the determining factor, as here there is no relation between poverty reduction and foreign aid. Trade does not mean free trade, nor does it mean unfettered capitalism. But less exploitative institutions are a key factor, and relatively free economic opportunities are the primary association with these. sources Frankel, Jeffrey A., and David Romer. "Does trade cause growth?." American economic review (1999): 379-399. Rodrik, Dani, Arvind Subramanian, and Francesco Trebbi. "Institutions rule: the primacy of institutions over geography and integration in economic development." Journal of economic growth 9.2 (2004): 131-165. Dollar, David, and Aart Kraay. "Growth is Good for the Poor." Journal of economic growth 7.3 (2002): 195-225.   Haramstufe Rot fucked around with this message at 12:06 on Feb 8, 2017 |
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Feb 8, 2017 11:43
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Cerebral Bore posted:
Socialism is not a theoretical framework tho. It does not have any theory as to how to organize production and distribution of said production except for some bearded dude saying "people will literally change to be perfect once the system is perfect". No one knows what the perfect system is, just that it is not the current system. The argument in entirety is: Since A is bad, B must be better because it is not A. Hence, Venezuela.
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Feb 25, 2017 12:40
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Uranium Phoenix posted:Just because you don't understand something doesn't mean no one does. I have some questions: 1. So I create a start-up. I hire three programmers in addition to me. Now I own only 1/4 of my idea/company? Would that not reduce my incentive to start the company ex ante? 2. What gets voted on by workers and what is managed? Does everyone get the same wage? What's keeping a dominant coalition from hoarding all profits? Is there a rule on who gets to be CEO? 3. I guess we can not have capital markets because we can not invest in companies. How do investments happen? How do companies ever grow? How do we buy that new CNC machine we need but do not have the cashflow for. Debt? 4. Isn't it terribly inefficient for everyone to have the same share no matter what capital he brings into the company? If not, how will we realistically be able to control actual work contribution? 5. Is skill taken into account or does everyone get to decide on everything? Whats keeping Trump or Le Penn type of populist from killing the company for his/her own profit? Uranium Phoenix posted:We can see social democracies (Norway, for example) where inequality is reduced by means of taxes and strong social programs, and we can see it that it leads to higher quality of life. This is not a perfect system, but there is ample evidence to show it is better. By creating economic rules where people own the place they work and their private property, income inequality is drastically reduced and the benefits of society are spread out evenly, instead of concentrated. The key reason for this is that you want to prevent that inequality from ever happening again (Capital in the 21st Century shows wealth concentration will happen without either an end to capitalism or a global tax system to prevent it). With solid social programs to make sure no one goes without things like housing, food, and healthcare, and more democracy in political, economic, and social institutions, we can reasonably say that the system would be better (The Spirit Level goes into depth about how reducing inequality has massive benefits to all aspects of society). After all, there are enough houses for everyone to live in, and there's enough food produced by the world for no one to go hungry; the problem is one of distribution. No one has claimed it a "perfect system," but it's demonstrably better than what we have and therefore is worth moving towards. To be clear, "Socialism" does not mean "full communism now," it doesn't even mean the end of markets or governments; it's merely a change in how production and wealth are distributed in society. wait, so Norway is the socialism we are talking about? Oh, so socialism is then a social market economy? Okay then. In actuality, a proposal for a socialist system should not include any critique of capitalism and how things should be better (aka this eliminates 99% of all articles I read). Instead, it should be a proposal that stands on its own merits entirely. Everyone can write a critique of a system. But things work the way they do because they are within the system. If you change it, you better be able to bring a good concept to the table on how poo poo works. That's what I am looking to read. BTW I find it funny tho that you take Piketty's theoretical model at face value, despite its technical shortcomings (don't get me wrong, the book is great even if just for the data). I mean, it's a pretty neoclassical model - which is I guess fine now as long as it shows r > g? Haramstufe Rot fucked around with this message at 19:39 on Feb 25, 2017 |
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Feb 25, 2017 19:34
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Uranium Phoenix posted:"Workers own the means of production" is a pretty broad framework, and there's a lot of ways it could work. If you want an example of a large company set up on a largely socialist model of collective ownership, there's the Mondragon Corporation to read up on, otherwise, you can research how worker cooperatives operate--and there's not just one way! There are actual examples to look at, so no need to go into hypotheticals. You know where I studied there was an institute of cooperative economics, so I am aware. I am also aware that there are pro's and con's. But still, what about my questions? Or are we already at the point where no concrete socialist system proposal exists and we are hand-waving "We'll think about that once Socialism is here?" So you propose some people own share and others do not own shares, like Mondragon? Because I was talking about a Socialist system, not a business organization. For cooperatives, as I said, some thing work and some things don't. But that's within the current system. Uranium Phoenix posted:No, you didn't follow my argument. Inequality = bad. Social democracies like Norway reduce inequality; that's good. Reducing inequality more would be even better. Socialism proposes to do that by stopping individuals from accumulating too much wealth/power/capital. Therefore, socialist policies are good. Social democracies are capitalist systems and things work in a capitalist system may, for many reasons, not work well in socialist systems. See Venezuela, for example. Socialism doesn't propose to reduce inequality in a capitalist system last time I checked. Not that, you know, I don't agree with you on your actual inequality point. Far from it. But the way you argue is just so wrong to me... sorry? Uranium Phoenix posted:Plenty of socialist proposals can stand on their own merits. Again, the fact that you haven't bothered to read very much about the subject is not a failing of socialism. The idea that no one is allowed to critique the current system as part of their proposal is a rather strange, arbitrary limit you've come up with. If we're going to come up with the best system, doesn't it make sense to compare systems to see which one is best? It's a conjecture based on a critique without an actual basis in a political/economic alternative framework. Uranium Phoenix posted:If someone was advocating for Capitalism and pointing how how it was better than Feudalism, you wouldn't dismiss the proposal purely because it included a critique of the latter. Someone could easily come to me with an exact plan of, say, Norway's economic and political system and then compare it to Feudalism. That's valid. That's not what Socialists with me tho. Uranium Phoenix posted:Most socialist proposals include a critique of capitalism because if a system doesn't have major problems, it wouldn't be necessary to even come up with an alternative. Proposals are not invalid because they include critiques of other systems. nah, if proposals come with an actual valid plan then they are valid. Uranium Phoenix posted:Do you disagree that capital tends to accumulate more and more wealth without interference? Without more information my answer is probably no, I do not disagree. Uranium Phoenix posted:That's what I was citing Piketty on. Capital accumulating too much wealth is bad. Piketty's solution is "global tax on capital." Another solution is to eliminate the power of capital through socialism. Dunno about either those solutions, the first could be possible eventually. The second has the issue that no socialism actually exists and if it existed, it failed miserably, and so while we could eliminate the power of capital, we don't know what else we eliminate with it, right? Haramstufe Rot fucked around with this message at 20:45 on Feb 25, 2017 |
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Feb 25, 2017 20:37
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cool, I have some more questions, cause I like to understand things by working through concrete cases - I think that's really useful to see how fleshed out these socialism ideas/theories are.uncop posted:1. The company owes you money for your unpaid contributions to it. For example, your unpaid salary could be likened to credit, while your idea could be likened to voteless shares. This debt has to be paid, and there ought to be no legal way for your employees to decide to default on it if the company doesn't go bankrupt. Sort of like how the constitution sets limit on state democratic choices. There's also the possibility for founders to have a larger amount votes, or recent hires to have less, so that stability is preserved in the early phases of expansion. I am really interested in how this is supposed to work in practice. Say I own the majority of the company (up until contribution from workers, let's say the profits are equally split from when they enter but I retain my shares on existing capital and idea) but they have the same voting rights (so each gets one in my example?). Can I sell my shares if I don't agree with the votes? Or can I take my idea somewhere else? If not, can I quit and start a company doing the same thing? Or sell the idea and tech to a competitor and just wait until my company crashes? After all I still own the idea, right? uncop posted:2. These things are currently and also should be decided by the company itself. Typically people do not get the same wage (but the range is limited). Who and what the CEO is is voted on. The share of management and voting is decided on a practical basis, but there's a tendency to have way less managers than in the average capitalist company. And again, such a company cannot be legally taken over and its rules ignored by even a majority, much like a state cannot. So l understand you right: The company sets a constitution like a state, that can not be changed? But that must be state regulated, right? If not, the early coalition would just write a constitution which is advantageous to the core workers and lovely for newer workers (see Mondragons issues). That means those things can not really decided by the company I'd say. Or, what's keeping me from choosing a more efficient way of structuring the company when I work in a field where co-ops are not most efficient (after all, I am free to make a co-op today as well if I think it efficient)? Clearly, the state can not allow the companies to decide by themselves as long as they are in competition. In certain fields, would that not push all businesses towards the most un-coop border set by law lest they be outcompeted? If so, isn't this basically equal to just regulating wages? uncop posted:3. We can have capital markets, however we can't exchange power for money, only future profits. I'm pretty sure this is a solved problem already, since co-ops have no problems growing. You can take loans, sell voteless shares, agree among members to invest a certain amount each, get subsidized by the state and so on. So if I buy the majority shares on your profits such that let's say I'll get 55% of future profits for myself, would that really solve the inequality problem? Clearly I have no obligation towards that company since I am not voting in its decisions (otherwise that would not make sense either). So then, voting rights are just about the distribution of non-share allocated profits, right? In the lifetime of many larger businesses there comes a time when a significant amount of shares have to be issued to progress or survive. But those shares don't usually need to give as high return, if at all, given that they come with voting rights. If they don't, returns obviously need to be higher for the same amount. I'd be worried that this pushes return-seeking investors into even more frenzied buying sprees and makes the capital markets more volatile. Another issue I see is that if workers vote, then they can decide the dividends (and if not, the company would just bankrupt itself by inflexible capital payments). Then, however, they have the incentive to push out investors who in return will need higher interest. Seems like capital markets would be really high risk and illiquid. This could be a serious issue for growth and innovation? I mean I understand that coops exist IRL, but they are not exactly the most successful companies and they are mostly prevalent in certain industries, and usually in countries which have co-ops also for historic reasons (Germany, France, Spain). Germany, for example, has a shitton of coops and they do really well for specific businesses which target the shareholders themselves. Everywhere else, they have less success. There is actually theory on coops based on transaction costs and principal agent to suggest that they have pro's and con's. Logically, a world with only coops would be inefficient then. uncop posted:4. The workers together decide which work is worth which salary. It isn't historically terribly difficult to find a solution most can agree on. Profits are shared according to everyone's investment, which is often, but not always, considered equal either in an absolute sense or per labor-hour. Profit tends to have a smaller role than in capitalist companies though, because salary raises are a natural way to distribute surplus fairly. Let me look at that in two contexts. First, how do you attract good workers to your company? Let's say you are drilling in the Baltic Sea and you need a geologist specialized in water and rock movement around drilling platform supports. There's not so many of those in Europe, so the usual thing to do is to hire him for a lot of money. But now this guy makes a significant amount more than normal workers because his skill is scarce. And if not, the guy will just start a single-person consulting business and make millions anyways. Or consider the case of hiring a CEO. The guy is a decent leader but not really worth all that much, except without his network it's difficult to get leads and new customers. Workers are clearly unwilling to give up wages to pay for such a person, nevertheless a company may be out-competed by another who has this guy. Second, we know to illicit honest work without endless shirking (see GDR for the negative case here), compensation needs to have at least two components - a fixed part and a performance based part (possibly more). The performance based part can be very rough, like getting fired, but that's just a trade-off between efficiency and difficulty of implementation. Empirically, better compensation schemes increase productivity. Paying everyone the same wage would obviously lead to terrible productivity - some performance based measure needs to exist. But implementing this requires the workers input. Therefore, they have an incentive to vote tactically. We know that in these situations, voting is not really so cool because it's either dictatorial, allows tactical voting or some worker group will get shafted on their salaries in favor of another (one of these three things are necessarily true). And all these decisions have to conform to the market conditions such that workers will not just leave to somewhere else, or the company's products become too expensive to sell. How do you solve this dilemma? uncop posted:5. The direct democratic ideal is that people decide on things that concern them. Something like CEO choice is probably decided by everyone, while everyday details of work are decided by the ones doing that work. People with skill tend to command certain respect since they're people who the voters personally know and their opinions are listened to. They're like lobbyists. And yeah, the company cannot be taken over by a rogue CEO because there are strict limitations on what a CEO can do without a majority vote. (There does not need to be a CEO at all, but it's the same with any governing entity.) I'm not an expert on what exactly those limitations tend to be, but it's a tried and tested thing in the real world. cool, I don't have more questions except the above. Uranium Phoenix posted:Your questions are basically asking about how socialist businesses would work. I point out there are working examples of worker-owned businesses that you could research and you say both "but what about my questions?" and "no no, socialist system, not business organization." There's not one way to do socialism, just like there's not one way to do capitalism. Well I am literally part of a cooperative - my bank. My questions are not answered by researching my bank. I have googled, but I have not found a concrete systemic proposal for a socialist system. Maybe I am bad at googling. But to be quite honest, and from the reaction in this thread, I think it might also be that the emperor really has no clothes. Maybe nobody really knows what socialism is supposed to look like. Uranium Phoenix posted:I can't point you to a fully working socialist system and the research within it because it doesn't currently exist. You seem to want me to talk about how exactly a socialist system would work in specific detail, which is not a question that can be answered in a single forums post; it would take a book. In fact, people have written books about it. You might check out the Marxism thread for suggestions on how to learn more! Since you know my concerns, could you point me to a good book or academic article (perhaps a review article) which is heavy on concrete, workable proposals and light on rehashing critiques on capitalism? I have read Marx & Schumpeter if that helps. Uranium Phoenix posted:Again, you're demonstrating you basically know nothing about socialism. You've already shown you can't define it in the most basic form, nor do you seem to have any conception of what its proponents want. Next, some quick googling shows Venezuela has around 1 million people in worker-owned businesses, and a working population of around 20 million (of 30 million total population). It doesn't really fit a reasonable definition of "workers own the means of production in the economy," and it also has some very powerful capitalists. Venezuela may or may not be socialist, but it is a state where things which work very well in, for example, Europe (price controls, subsidies etc.) have catastrophic consequences because the system is not organized in the same way. In Europe, we understand very well what such measures might do. But in Venezuela, no one has the slightest idea. Of course it's a terrible system - but maybe so is socialism! That's why it is an example. Uranium Phoenix posted:Think about before capitalism really existed, say, in Europe, when the dominate economic form was feudalism. By your logic, no one could argue that it was bad because any other ideas they proposed, like capitalism, would be conjecture. Even if people could point to efficient markets, or how rich merchants were able to do X or Y better than feudal monarchs, or how quality of life was better in small non-feudal communities, those would exist in a largely feudalist system so would, under your logic, be invalid. It's like if you dismissed the theory of relativity before it had a chance to get tested based on the idea that it wasn't tested yet. No that's not what I said. But to test a theory, a theory has to exist. That markets are more efficient than gold-based mercantilism is a valid theoretical proposition that does not depend on the system at all, but is a concrete theory of allocation. Of course now we can formulate that much better than early writers of the time, but certainly the effort was made. But "less inequality the better, no inequality the best" is not an actual theory. "Less inequality is better in a market democracy" is a better proposition and it is actually also not true for every level imo. There is an elusive, dynamic optimum of inequality that is lower than what is reality in almost everywhere in the world. But this depends critically on the current market institutions, specifically education and labor markets but also product markets. Nothing of this translates necessarily to another system, not even to another country. I am willing to demand less inequality because I firmly believe the optimum is below what we currently have, but I really don't have a theory to prove it beyond the current academic articles, that, I am sure, you are aware of. The efficiency of a market system, on the other hand, can be proven by information theoretical standpoints. And even that is a much more deep argument because not every market system is efficient in every case. But, for example, we know that a price-based system weakly dominates every other possible allocation mechanism in many situations and we know that a price based allocation is the most informational efficient way to do so, an argument that is independent of economic system. I am all for this poo poo if it exists for socialism Uranium Phoenix posted:My claim that inequality is bad and that reducing inequality is good is not conjecture; I cited The Spirit Level for that claim and it is amply backed by evidence in that book. Because I probably have to point it out, I don't believe "everyone in society will literally be 100% equal" because that's neither ideal nor possible. What's ideal then? Uranium Phoenix posted:Okay, that wasn't a trick question or anything, I think we're on the same page here. We at least seem to agree that 1) capital, without adequate regulations, will tend towards increasing inequality and 2) inequality is bad. The disagreement is on the solution. I don't disagree that the last fifty years are not exactly a good showcase to judge socialism. But we can look at specific issues in these countries and a detailed analysis - as has been done - does show many systemic issues in communist or socialist countries. I know a lot about the GDR, less about South America, so my statements about Venezuela was really just to illustrate that there are worse systems than capitalism and that in those systems, things which are perfectly fine in Norway lead to lovely outcomes. Anyway, we know some things about how economies work whether they are capitalism or socialism or whatever else. This knowledge, applied to socialism and to existing examples, leads to some serious questions - not necessarily mine of course. So your claim was that reduced inequality leads to better outcomes. We already know this to be true, to an extend, in European economies, so one solution would be to roll with this. On the other hand, there is a lot of reasons to belief that you will trade inequality with economic inefficiency in socialism - historical analysis as well as theoretical analysis. If we already have a system where we can improve things and where we know a lot about how things work (and can actually analyze it scientifically), doesn't is make sense to be skeptical of socialism? If socialism doesn't promise more than less inequality, and is probably a lot worse in other areas? Ol Standard Retard posted:I know it's not exactly proper to pile on posters but you shouldn't be asking questions as fundamental as this. You should be doing a slightly-deeper-than-Google-scrape-of-Wikipedia bit of research before you even post. Why tho? I see tons of people posting the most ridiculous crap which shows they obviously have not done deep research into economics, politics or history before they post. Am I breaking some sort of sacred rule by treating socialism the same way? Should I show more reverence? Lighten up buddy. MiddleOne posted:All of these things, with the exception of selling your shares, would be just as illegal under a socialist market system as they already are under a neo-liberal market system. All that's really changing in your example here is who controls the board. So I can sell my shares to the competitor company, but even though they own the majority of the company now, they are not actually allowed to do anything like take the tech and develop their own product? That doesn't really sound like how things work now. If I sell my company to which I own 75% to facebook, then facebook gonna get the tech. Perhaps I misunderstand. your edit MiddleOne posted:The idea could be separated from the company but typically that would have to happen under some kind of royalty agreement just like in the real world. What I mean is that clearly if its socialism, I can not really own my own company, nor idea, nor anything else because it's just paradoxical and antithetical to no privately owned capital. But then many business forms, like start-ups, are just not possible. Also this situation: Imagine I am like a ingenious inventor building some cool machine, but I need to hire three cleaning staff. Now they vote for something stupid and I quit the company. The company now does nothing, and I start a new one. I have basically fired them. How does this make sense in a socialist system? Haramstufe Rot fucked around with this message at 10:46 on Feb 26, 2017 |
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Feb 26, 2017 10:17
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uncop posted:The right to get the company to buy back your share depends on type of the share, but I think it would make sense for this sort of "founder share". Or you could just quit but keep your shares and enjoy the dividends. Your shares might not be as well protected as in a capitalist society however, maybe their value would be diluted as accumulating worker effort gets calculated into the pie, maybe the company could force you to sell them back at some rate that's deemed fair at the time. However, you can't just take your idea and run, privately owned patents probably wouldn't be a thing in an actual socialist society. So you'd have nothing to sell, at best you could start a competitor or begin working in one. Alright that works, but retains the issue that as soon as I hire someone, I have to basically sell all my ideas and their future applications or revenues for future profit streams of a company I can not control. This means I am giving up something, since it is unlikely a cooperative would be a) as efficient in every sector and b) profit streams are not the goal of the whole undertaking anyway. This carries over to any sort of compensation I'd say beyond just monetary profits (because the giving up part is the whole idea). So we should conjecture that innovation&entrepreneurial incentives are lower in a socialist society. I'd say data supports this conjecture. uncop posted:Co-ops today set their own rules about how they do business and that's what I likened to a constitution. Changing those rules tends to be a lot easier than changing a constitution, but it usually still requires a universal vote and more than a simple majority. States would have to regulate minimal sanity check limitations on those rules, for example right now you can't legally define a nondemocratically ruled co-op. But yeah, I'm sure people in a free society would find ways to make unequitable rules anyway. Democratic but private companies are a market socialist thing, and market socialism still has many core weaknesses of capitalism that would have to be alleviated by centralized wealth transfers or a similar system. A public sector would have to act to maintain full employment so that workers would be able to realistically choose a workplace that they don't find unfair. This means organizations would be a lot less flexible than they are now and, by necessity, much more centrally planned than we might imagine. So here this would lead to efficiency loss in the many sectors where static rule sets are not a good idea (which is most in my impression) uncop posted:What you're saying about a situation where exploitative structures are the most efficient is a huge reason why socialists including Marx tend to favor planning over markets. However, I still personally see having markets as the natural choice for now, since an early socialist state would still be in international competition with capitalist states and trading with them. Yeah I agree. It's hard to judge the efficiency losses we incur by such a system, of course, but it's pretty clear that the equal distribution is bought with a lot of efficiency loss in any case. Like I guess my main point is that there's a ton of things we can do in the current system, which seems to have many advantages over more centrally planned approaches.. if we really wanted. uncop posted:What you say is true, the current style of capital markets would not combine well with socialist enterprise. It's questionable whether you could even have banking as free enterprise, since finance is pure rent-seeking and thus incompatible with socialist ethics. A working financial system is necessary, however, so it might end up as a publicly owned, centrally planned thing. I agree that equity is probably not compatible with a socialist system for the stated reasons. But relying on public debt in a democracy is also highly problematic, in that the consequences are not fairly distributed among voters and generations. We can see that all over the world. In any case, a centrally planned financial sector would necessitate state planning on a scale which we are currently unable to provide. Solving these sorts of problems with incentive compatibility is computationally so difficult, that I am not sure it is possible. uncop posted:The research you mentioned accurately describes consumer co-ops. Most of the existing big co-ops are consumer co-ops, which are different from worker co-ops and actually not very socialist. It's why socialists tend to mention Mondragon as opposed to other big co-ops in Europe. Actual worker co-ops are generally a tiny part of any economy and need more testing, but testing would require active state policy that helps worker co-ops form. Basically you just can't get adequate free market money to aggressively expand a beginning worker co-op when there are so many more lucrative options out there. Well, one might disagree with profit seeking but I think it's clear that in many industries (so, the ones where a small cooperative would be a potential entry) companies are lucrative for investors if they are more productive than their competitors. The inability of coops to be a valid choice as a business format tell us more, because of course we can acquire funds on debt markets and we even can trade future profit streams for capital today. We also do not see a higher prevalence of coops where capital requirements are low (not at all). So according to economic theory, coops make sense for markets with certain features and indeed these are the areas where we do see a lot of coops - banks, agriculture, housing and retail distribution. That coops tend to make more stable and long-term decision, perhaps than even necessary, is very cool&good in these cases and less so in others. I think the point is pretty solid here that there's more to it than just access to finance. Given that, a possible policy action would be of course to subsidize coops, being aware that this may distort to inefficient productivity. uncop posted:I think that the workers would have to compromise on wage equality to attract foreign talent, and they would end up doing it for the sake of their own job security. If they're a truly special person, they would be reasoned to be in a job category of their own, vital enough to deserve greater salary. And really, when talking about regular experts rather than pampered CEOs, their salary expectations aren't unsustainably huge. 200k compared to 20k is just 10x difference. I don't think they could compete in the international CEO market though, for better or worse. They would have to use other avenues of finding "leads and customers". I think that cooperatives are well suited for business that do not need a wide variety of experts. But in technical or high tech companies the distribution of talent is very uneven. You'd find that if there is competition in the labor market, results would be very uneven and especially so for less educated workers. I don't think free choice of employment is a valid option in that case, nor is free choice of compensation. We are basically back at central planning for wages and telling people what to learn and where to work, which by the way was a terrible and dehumanizing system in the GDR that I would fight against to the death before I see it again. uncop posted:We have to remember that money is not the most important motivation for most people to do their work well. The soviet communist system of employment was equivalent to mediocre capitalist companies' system of employment, meaning that aside from lack of monetary motivation, there was also a lack of any other kind of motivation to work hard. I would actually look at how modern low hierarchy capitalist companies motivate their employees. There are a lot of methods that workers will find acceptable, given that in low hierarchy companies most ideas are provided by the workers themselves. Also, salaries that include a performance based part tend to be found equitable as long as the base salary is large enough not to be stressful. Psychologically people tend to like rewards for winning and hate punishment for losing, and socialism's concern is not punishing the losers rather than not rewarding the winners. Monetary transfers make things simple, but the theory of incentives is not limited to money. We can, and do, build the whole deal on a lot more general platform with social compensation, preferences for security, preferences for altruism, preferences for status and prestige and so forth. It's just insanely more complicated to find a fair and acceptable compensation scheme (making central planning even more impossible of a task). Monetary transfers are really convenient for technique, but the principle deals entirely with choice sets of whatever. To be honest, providing incentives for performance in a structured fashion will be a basic problem to solve in every society as long as people actually want things in a structured manner (and if not, it just doesn't matter what we do anyway). Anytime you do not properly motivate your workers, all you are doing is throwing away productivity and social welfare you could have had by using a better scheme. I am not an expert in management science, but I am aware that they do not restrict themselves to money and I think the move towards incentivizing non-monetary things is very natural in light of the decision theory behind it. That doesn't mean though that monetary transfers are not insanely important. Where I live, there are a lot of start-ups failing because they think they can rely (for the wrong reasons of course) on non-monetary incentives instead of providing very good monetary incentives as well. In any case, the issue is the same. quote:About relying on worker votes, it's been noticed that people vote for their employment to be as secure as possible, so the aggregate tends to vote in favor of company stability and success. That is, as long as the company is sure to guarantee new jobs for workers that its decisions displace, because otherwise people are likely to vote for stagnancy, which would cause instability. That guarantee might be a core motivation for Mondragon to have grown so huge, since obviously the profit motive doesn't really explain it. Well if there is a vote for both stability AND success, I don't think there is a huge conflict of interest. On other hand if there conflicts of interests, such as closing one department over another, there is no reason to assume that a vote would chose the better option insofar it exists. Each non-defective voting system can be manipulated (Gibbard–Satterthwaite) so in the end these kind of decision would have to be made by someone uninvolved like a manager or the state. That doesn't imply that coops do not have advantages in a world where profit orientation of external investors equally crushes incentives for socially welfare maximizing management decisions, aka "the world we live in" Haramstufe Rot fucked around with this message at 13:47 on Feb 26, 2017 |
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Feb 26, 2017 13:40
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Crowsbeak posted:Remember everyone caps on caps on caps has suggested that Workers in first world companies should have to lsoe their jobs and see them moved to unsafe sweatshops that pay .50 $ a day because apparently that is moral. I said that reduction of absolute poverty from 85% worldwide to less than 30% worldwide is a huge achievement but thanks I forgot to discount brown people's value sufficiently I guess?
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Feb 26, 2017 18:45
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SSJ_naruto_2003 posted:You said that less inequality wasn't good so I think you're actually just saying random poo poo to get people to argue with you. nah I did not, indeed on this very page I said something else entirely, but thanks for projecting bullshit Crowsbeak posted:I will gladly do that because I care more for my fellow Americans. I could give one poo poo about someone in Bangaldesh. Also if someone were to come to power and promised that liberals who want Americans to suffer because a bangaldeshi deserves their job would dissapear. I would vote for them in a heartbeat. tekz posted:Been catching up with this thread and liberals justifying themselves out of concern for the plight of third world workers is really heartwarming Well apparently we can not, because Americans are who matter. Helsing posted:This is an awful lot of work to put into arguing somebody whose opening salvo was the bizarre statement that "socialism is not a theoretical framework". Well after arguing about it two pages, it seems pretty obvious that socialism is not a theoretical framework? Apparently the only possibly working plan you guys have is a planned economy, with market socialism being not viable. But that's something we can technically not do in a way that is not terrible. So there's no workable plan, only wishful thinking. And really, that was my impression. Sure, my statement is a bit irksome to stir up discussion, it's D&D after all. But if my statement was incorrect, someone would have come out immediately and said: "you are wrong, here is a link to a paper detailing exactly an analysis of our proposed allocation/distribution mechanisms in a socialist system". Because if that plan exists, what could be easier than just post the source to show me wrong. But all that happens is attacks, projecting opinions I don't even have and shuffling about how I am somehow wrong but we can't say how. And that's why it is a religion and not an actual theoretical framework. Hell, the only actual sources posted were loving Piketty and some popular "science" books. Even I could do better and post some some Marxian econ articles even if they aren't exactly very good. 9-Volt Assault posted:Wrap it up. Nothing but unfettered capitalism is possible in a way that is not terrible. There's like this really big elephant in the room that one might actually do a more social social market economy if people actually wanted to and if people actually voted, but that goes completely above your head so that full communism now is somehow the more likely thing people will vote for in your mind, even though no one can even propose a workable framework to how that might look. And then you wonder why everything is terrible, rich people laugh in your face and your parties are getting like 2% of the votes. cool, you are doing your job well Haramstufe Rot fucked around with this message at 09:02 on Feb 27, 2017 |
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Feb 27, 2017 08:44
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When do we get to see the great liberal fight for better working conditions, safety standards, collective bargaining and pay for said workers with the same vigor that they've pursued investor rights and privatization?
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Orange Devil posted:Remember when Great Britain and the United States lost WW2 because they ran a planned economy? Remember when Nazi Germany lost WW2 because they ran a planned economy? Ratoslov posted:Remember when every corporation ever went bankrupt because they ran a planned economy? "Corporations are the same as countries, hence, the world should be run non-democratically in a hierarchical fashion lead by CEO Donald Trump, competing with other worlds on the market of worlds" - Forums poster Ratoslov Dead Cosmonaut posted:Had any of the optimization theory the Soviets painstakingly developed been applied through computing, the Soviet Union would have fixed a good deal of its problems. It's entirely feasible to think about the optimization problem a planned economy has to solve. It's well known that, with stable preferences, solving the problem for just one market alone is hard enough that we can not realistically do it with computers. But an economy is not a static problem in a single market.
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Feb 27, 2017 17:31
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uncop posted:While it's true that optimal economic planning is computationally infeasible, there are a lot of computationally infeasible problems which have feasible approximate solutions. In a market economy, people's spending and production decisions form an algorithm that "plans" the economy. If we knew enough about the behavior that makes market-based resource allocation work, it could be simulated with a randomness-using algorithm. Or if we studied economies in general, we might identify general rules that could be used as parts of a partial planning algorithm, and leave the rest to people's organic decisions, extending the reach of the planned section of the economy whenever science advances. complex systems analysis in Macro was a trend in the mid 90's that didn't lead to good&workable models is what I heard Another approach was econophysics, which afaik was also a total failure compared to what was promised Post-Keynesians are alive and well though. There's a new thing starting around Paris Schools of Econ right now as far as I know, so it's even got mainstream backing. But more to the point, centralization vs. decentralization is THE core topic of mechanism design, of which algorithmic mechanism design is the CS application. It's an interesting and active research area and might eventually turn up results, but it's nowhere near that. Read up on where we are wrt. to informed principal problems if you are interested. It's not clear at all which problems we can theoretically solve centralized and which are inherently too expensive (from an incentive standpoint). The actual algorithmic application by approximate solutions is another separate issue to be solved, but not the only one. Bottomline: It's dishonest and wrong to say we currently have the means to run a good planned economy. I would be totally up to having a good discussion about it but, well, I guess that'll be difficult here Haramstufe Rot fucked around with this message at 21:04 on Feb 27, 2017 |
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Feb 27, 2017 21:00
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BrandorKP posted:Whatever system we end up with in the future, it must provide those things : adequate food, shelter, education, and healthcare, to the populations that participate in it. The wages of the failure to provide those things will be death, in a literal sense, from instability and the growth of reactionary right. So why not a social market democracy? Identify failures of markets by applying the existing theory to the more and more advanced empirical modeling we have available today, think seriously about uncertainty and limited rationality, regulate and redistribute the poo poo out of everything with some machine learning mechanism design magic. The tools will be here sooner or later. The issue is that people/corporations either want free markets or full communism, both of which are ideologies without any economic theory support behind them.
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Mar 3, 2017 21:16
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| # ¿ May 19, 2024 11:15 |
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you can and will continue to be able to become rich by investing if you have the correct ratio of time to assets. For most people, the correct investing strategy (which is a mix of stock ETF and bonds), does not lead to being rich in their lifetime because they have too little cash. Sadly, there is no investment strategy that will get you predictable, higher returns. And if you think you can time the market or follow advice X or strategy Y or learn about metaphysical chart reading, you are really just a sucker for either the hope industry, or for the big players. As a single investor, you can't play the game and win with pretty much the same mechanic as playing at a casino. Yeah you could walk out with some money, but in the long run they own you. All you can really do is own part of the economic growth. Which is cool and good, but doesn't help if you only have 10k in cash. something something policy intervention necessary
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Mar 8, 2017 18:15
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