Yowsa. That certainly is a lot of text.

I think there's a big difference between practical socialism, like what we have in Scandinavia, and the theoretical which is based on class struggle, conflicts and so on. I think the latter is a croc of shit, to be honest, and I don't accept the notion that social classes exist.

What we have in Denmark is a sort of mix of socialism and liberalism mainly put forth by the Social Democratic party. The extremes are not all that far from that, our most liberal parties are slightly more liberal than socialistic, and our most socialistic parties are slightly less liberal.

A welfare state is a good thing if it is done right, and yes there can be quite a bit of bureaucratic overhead in that, but that's one of the prices.

I'm quite certain that I am on the more liberal, libertarian, side in Denmark, but I think that's still a lot more "red" than most American politicians.

^598 pages is a monster, for sure. You know you're in trouble when the table of contents alone is 8 pages. Still, there's only one way to eat an elephant. At a chapter a day, its only 17 pages of reading per sitting; which isn't bad, especially if you can read it at work

I would say that this excerpt from the Book is relevant to your comment:

"...if we include under the term 'Marxist' all who have accepted the basic
Marxian principles - that class conditions thought, that Socialism is
inevitable, and that research into the being and working of the socialist
community is unscientific - we shall find very few non-Marxists in Europe
east of the Rhine, and even in Western Europe and the United States many
more supporters than opponents of Marxism. Professed Christians
attack the materialism of Marxists, monarchists their republican-
ism, nationalists their internationalism; yet they themselves, each
in turn, wish to be known as Christian Socialists, State. Socialists,
National Socialists. They assert that their particular brand of
Socialism is the only true one- that which 'shall' come, bringing with
it happiness and contentment. The Socialism of others, they say, has
not the genuine class-origin of their own."


If you've read many powerful authors, such as Dawkins, you will know that you don't have to read the entire work to be moved, every chapter can force open your eyes.

Modern Europe invalidates Von Mises.
Human society is flourishing quite nicely there under various flavors of Socialism despite Von Mises "proof" that it can't possibly happen.

Originally published in 1947
Ah the good old days.

^Elaborate please. Have you read this book? How does a place invalidate a person? Can you quote the portion of Mises' work you are referring to? How is modern Europe flourishing if we are in a global recession? Why are you attempting to criticize the book based on its publishing date?

The geometric theory of gravitation was published by Albert Einstein in 1916, do you have a problem with that as well?

If your writing is vague to the extent it raises five questions with only 3 sentences, it is going to be hard for you to communicate with others.

^ http://www.sciam.com/article.cfm?id=the-social-welfare-state

imstellar, if you need a duel of Nobel economist vs. Nobel economist, go pick up a copy of Conscience of a Liberal by Paul Krugman.

Personally, I'm not particularly in the habit of debating dead men. Is there something you have to say of your own about the politics and economics of today?

For example, do you think our unemployment increases are because a) there's a credit deflationary cycle spiraling out of control or b) because companies are in the midst of rightly liquidating their malinvestments, or c) because the national debt is too high, or d) some other specific problem (please specify).

Building on that question, given that explanation of the cause, what is the cure, or at least the macroeconomic advice our leaders should be giving us?

Finally, and most crucially, are there people who are suffering now that don't deserve to be suffering? If so who are they, and what (if anything) should be done to help them?

Feel free to give the answers you think Mises would've given, though I'd rather hear your own answers.

^I'll give you my answers, because I seriously doubt I could echo someone of Mises' caliber.

You say people are suffering, but what does that have to do with economics? From a purely scientific standpoint, like physics, there is nothing human about economics. Compassionate, just, fair: these are not adjectives of an economic theory, they are adjectives of human action. If suffering is your problem, them human compassion is your solution; charity from friends, family, coworkers, or private organizations. If unemployment is your problem, then science is your solution. Employment raises when demand increases, and employment falls when demand decreases. That is the scientific reality. There is no reason for science to care whether jobs are lost or gained. If you attempt to subvert that reality due to human compassion, you may as well be pissing into the wind or pushing a cow into a barn.

I care about homeless people, and jobless people, and miserable people because I am human and I have compassion. Because I am compassionate, I am interested in the best way to get the cow back in the barn. You lead a cow by covering your finger with salt, and letting it lick it off as you walk into the barn--you don't push or pull with all your might on the cow's ass. That is a scientific reality.

Bubble or burst, why should science care? Nobody complains about the bubble, but everyone cries about the burst. That is a human problem, not an economic problem. It is no more possible to "fix" the burst than it is to push a cow into a barn or successfully piss into the wind. It has to happen, its going to suck, but that is the scientific reality.

I can give you my scientific solution, but it wouldn't make sense. If I saw you pushing a cow into a barn and told you to put your hands in salt, what would you say? You'd look at me like I was raving mad. It wouldn't make any sense to you because you don't understand the underlying mechanics. That is the purpose of posting this book. The sooner people realize that they can't push the cow into the barn, the sooner we can start looking for real solutions---solutions which actually help people.

I defy every man, because I care about every man.

I have no idea what point you're trying to make but I suggest next time you put a short explanation in and use the [collapse] tag so we don't have a huge post to scroll through.

Free market capitalism has lifted more people out of poverty than socialism.

Has there been an honest critique of socialism in action by socialists?

I would recommend Heaven on Earth: The Rise and Fall of Socialism by Joshua Muravchik, except it's very long and somewhat dry.

I'm sure that once you graduate college and get a job, you will be able to see the link between economics and suffering much better. I predict your ideas on economics will be drastically different in 10 years, but by all means, continue to fight your good fight.

This doesn't have anything to do with the site, so you should probably take it out of the main section. Also, your personal *politics have nothing to do with science, so you should probably remove this from that channel as well.

Edit: Oops, I didn't mean to give that handout to qm. Let's just call it sift affirmative action.

imstellar, for what it's worth, your explanatory paragraph doesn't make any sense and gives me the impression that your thinking on these issues has not made the leap from abstraction to reality. I could be wrong, of course, but why not do yourself and your positions a favor by stating them in clear, concise, straightforward terms. Forget the cow and science analogies and spit it out in plain English. If your ideas are too precious to be stated outright, then what is the point?

Comment hidden because you are ignoring dag. (show it anyway)

I have added a [[snip]] to this post to put most of this inside.

Imstellar,

You have such a selective perception about economics and economic theory. I bet you hold this whole Mises book dear to heart because it basically reinforces your preset beliefs.

Contrary to what you believe Mises thoughts towards socialism have been rebuked and disproven by the Socialist economies of Europe that mix capitalistic incentives with large government spending. Not to mention the large economic boom Communist China has experienced in the last 15 years.

The debate comes down to running against the Misean ideal of liberty in society, which he goes to analyze very well in a model socialist economy but never explains how you apply liberty as an ideal in a capitalistic system. Liberity has been shown to take a secondary position in many actions of capitalistic agents.

You talk about welfare of citizens in a pure liberty based, free market system, well such a system would have no moral qualms then by eliminating its work force and moving to China, or taking in illegal workers from Mexico because you know paying Americans with their socialistic health care, welfare and employment benefits runs contrary to free market ideology.

Essentially every time you argue for these Misean systems you are arguing for a particular system that 90% of the world disagrees with, the world isn't about efficiency and free market capitalization, its about welfare systems, its about government systems that sometimes care for their citizens over economic efficiency. The same socialist states you claim are failures also happen to have consistent steady growth, high levels of education, unemployment benefits, liberal governments, and nationalized health care system.

Contrast that with a capitalistic society like America. Which one would be more favorable to live in for an individual.

>> ^imstellar28:
The geometric theory of gravitation was published by Albert Einstein in 1916, do you have a problem with that as well?

Might be just me, but last I heard all the quantum physicists had quite a bit of a problem with general relativity

Furthermore, you didn't give a single answer to any of NetRunner's questions, you merely stated that you and your 'economic science' don't care about these answers, that 'science' doesn't care for bubbles or them bursting or for people losing or gaining jobs (unemployment). Funny then, because I was taught how unemployment, economy cycles and sector bubbles factor into macroeconomics (which for the most part is concerned with social economics) since the 10th grade.

I'll stop there. Unfortunately, while I possess some knowledge of economics and feel like I have a lot to say, I won't start debating it, because that way I'll never have the time to finish what I started. What I really meant to say (looking at the last paragraph of your last comment) was, please don't marginalize your presence on the Sift to aggressive antagonism. All that can come out of it is alienation and moodiness.

>> ^EDD:
Might be just me, but last I heard all the quantum physicists had quite a bit of a problem with general relativity

Not so. It is true that physicists have not yet managed to unify gravity into the standard model of particle physics, but general relativity on its own works perfectly fine on large scales, which you can check for yourself every time you use a GPS unit.

Now, wether or not general relativity is still relevant has of course no bearing on the validity of the writings linked to here. To get back to topic:

>> ^imstellar28:
From a purely scientific standpoint, like physics, there is nothing human about economics.

Really? Unlike physics, economics is all about humans interacting with each other. The actions of the individuals in the economy are largely governed by human feelings, such as love, hope, happiness, sadness, optimism and (especially during crashes) panic. An indication of this is that all the major economic models work perfectly as long as the individuals behave according to plan, i.e. rational as defined by the economists. But as soon as the system comes out of equilibrium, people start acting much more emotional and the models become useless.

This site is absolutely ridiculous. I post a free online copy of one of the most thorough and definitive rebukes of socialism and all I am met with is personal attacks and administrative edits?

If I'm apparently not allowed to make long posts, why is that even enabled? For what its worth I thought the post would auto-trim itself...as what 99% of other websites do? Instead an admin came in and cut it down to one line?

If there is to be administrative interference, what of all the persecution and irrelevant comments posted here?

Who posting here has read this book, is interested in reading this book, has questions about this book, or has even heard of this book? Some people in this life actually read, and are always looking for new books to read. Given that practically everyone on this site is a socialist, I thought I would take the time to at least expose them to the Richard Dawkins of economics. If this is not okay, why is there even a book channel?

Looking at a book cover, and going off on a nonsensical tirade filled with personal attacks is patently ridiculous. If you think I am married to Austrian economics anymore than I am married to Newtonian mechanics, you have much to much to learn about science, and those who practice it.

The reality is, your socialism is no more safe than Christianity when brought under the light. Everyone here is so confident in their beliefs, so why not spend 30 minutes a day reading this book? If your belifs can survive this book anymore than a Christian's beliefs can survive the onslaught of Dawkins, then you can sleep safe at night knowing you probably are right.

If not, then you are just living in a fantasy world sustained by nothing more than your own ego, and it is only time or strict denial that will prevent it from crashing down like the world around you.

Get over yourself.

>> ^imstellar28

It has been the custom for a long time to only cross post to the main page if the topic is directly related to the website itself, or to only post it in the relevant channel if otherwise. Now, that could of course be spelled out more clearly in the FAQ, but you have been around for so long now that I thought you would have noticed. Don't start acting like your toes have been stepped on if an admin then does justifications to the post that you yourself thought would be done automatically to make the front page more user friendly.

Now, I appreciate you sharing a free piece of literature with us. Heck, I'll even grant you a *quality for it. But don't expect people to take a lot of time out of their busy schedule to read the whole thing before being allowed to discuss the topic. This is called Sift TALK, which means that it is a forum for talking. If people want to talk, that's what they'll do. If that talk goes a little outside of the scope of the book, so be it.

Personally, I think all this labeling of different ideologies serves only to obscure the issues of what works or not. I only notice that I live in a scandinavian society that has been built up since WW2 to become the best place in the world to live by most social markers. Whether you want to label that socialism or social democracy or liberalism or whatnot doesn't really bother me. I understand that you object to our high taxation on moral grounds, but I don't subscribe to objectivism myself. (Pardon me if I misrepresent your views.)

But since you apparently don't want to talk about this despite posting it in Sift Talk, I'll leave off here.

Awarding imstellar28 with one star point for this contribution to Sift Talk - declared quality by Ornthoron.

I'm not read enough on European socialist states to know whether they prove or disprove Misean theories of economics. Here's the bottom line: Europe has an absolute right to govern how they see fit, but in the US we require freedom and liberty. It's that simple. It's ridiculous to use Europe as a model for any U.S. policy, because the entire principles of our Declaration of Independence and our Constitution were based on doing the opposite of what Europe was doing.

I don't see how you can have a socialist economy and also have liberty and freedom. The whole idea behind these concepts of liberty and freedom is to maintain a right to choice, and that extends to where you choose to spend your money, as well.

^who would have guessed the provider of cat-fart videos would be the only beacon of light and reason amid the darkness?

Oh please, blankfist, must we dance this aged dance yet again? Do I need to type the litany of socialized services you take for granted every day?

You will not find a pure capitalist or socialist system in the world. The United States is a blend of the two balancing systems, just like Europe.

I am posting the preface in its entirety, as I think it touches on most socialistic arguments put forth here. If this preface intrigues you, by all means...read on.

"It is a matter of dispute whether, prior to the middle of the nineteenth 15 century, there existed any clear conception of the socialist idea—by which is understood the socialization of the means of production with its corollary, the centralized control of the whole of production by one social or, more accurately, state organ. The answer depends primarily upon whether we regard the demand for a centralized administration of the means of production throughout the world as an essential feature in a considered socialist plan. The older socialists looked upon the autarky of small territories as 'natural' and on any exchange of goods beyond their frontiers as at once 'artificial' and harmful. Only after the English Free-Traders had proved the advantages of an international division of labour, and popularized their views through the Cobden movement, did the socialists begin to expand the ideas of village and district Socialism into a national and, eventually, a world Socialism. Apart from this one point, however, the basic conception of Socialism had been quite clearly worked out in the course of the second quarter of the nineteenth century by those writers designated by Marxism as "Utopian Socialists." Schemes for a socialist order of society were extensively discussed at that time, but the discussion did not go in their favour. The Utopians had not succeeded in planning social structures that would withstand the criticisms of economists and sociologists. It was easy to pick holes in their schemes; to prove that a society constructed on such principles must lack efficiency and vitality, and that it certainly would not come up to expectations. Thus, about the middle of the nineteenth century, it seemed that the ideal of Socialism had been disposed of. Science had demonstrated its worthlessness by means of strict logic and its supporters were unable to produce a single effective counter-argument.

It was at this moment that Marx appeared. Adept as he was in Hegelian dialectic—a system easy of abuse by those who seek to dominate thought by arbitrary flights of fancy and metaphysical verbosity—he was not slow in finding a way out of the dilemma in which socialists found themselves. Since Science and Logic had argued against Socialism, it was imperative to devise a system which could be relied on to defend it against such unpalatable criticism. This was the task which Marxism undertook to perform. It had three lines of procedure. First, it denied that Logic is universally valid for all mankind and for all ages. Thought, it stated, was determined by the class of the thinkers; was in fact an "ideological superstructure" of their class interests. The type of reasoning which had refuted the socialist idea was "revealed" as "bourgeois" reasoning, an apology for Capitalism. Secondly, it laid it down that the dialectical development led of necessity to Socialism; that the aim and end of all history was the socialization of the means of production by the expropriation of the expropriators—the negation of negation. Finally, it was ruled that no one should be allowed to put forward, as the Utopians had done, any definite proposals for the construction of the Socialist Promised Land. Since the coming of Socialism was inevitable, Science would best renounce all attempt to determine its nature.

At no point in history has a doctrine found such immediate and complete acceptance as that contained in these three principles of Marxism. The magnitude and persistence of its success is commonly underestimated. This is due to the habit of applying the term Marxist exclusively to formal members of one or other of the self-styled Marxist parties, who are pledged to uphold word for word the doctrines of Marx and Engels as interpreted by their respective sects and to regard such doctrines as the unshakable foundation and ultimate source of all that is known about Society and as constituting the highest standard in political dealings. But if we include under the term "Marxist" all who have accepted the basic Marxian principles—that class conditions thought, that Socialism is inevitable, and that research into the being and working of the socialist community is unscientific—we shall find very few non-Marxists in Europe east of the Rhine, and even in Western Europe and the United States many more supporters than opponents of Marxism. Professed Christians attack the materialism of Marxists, monarchists their republicanism, nationalists their internationalism; yet they themselves, each in turn, wish to be known as Christian Socialists, State Socialists, National Socialists. They assert that their particular brand of Socialism is the only true one—that which "shall" come, bringing with it happiness and contentment. The Socialism of others, they say, has not the genuine class origin of their own. At the same time they scrupulously respect Marx's prohibition of any inquiry into the institutions of the socialist economy of the future, and try to interpret the working of the present economic system as a development leading to Socialism in accordance with the inexorable demand of the historical process. Of course, not Marxists alone, but most of those who emphatically declare themselves anti-Marxists, think entirely on Marxist lines and have adopted Marx's arbitrary, unconfirmed and easily refutable dogmas. If and when they come into power, they govern and work entirely in the socialist spirit.

The incomparable success of Marxism is due to the prospect it offers of fulfilling those dream-aspirations and dreams of vengeance which have been so deeply embedded in the human soul from time immemorial. It promises a Paradise on earth, a Land of Heart's Desire full of happiness and enjoyment, and—sweeter still to the losers in life's game—humiliation of all who are stronger and better than the multitude. Logic and reasoning, which might show the absurdity of such dreams of bliss and revenge, are to be thrust aside. Marxism is thus the most radical of all reactions against the reign of scientific thought over life and action, established by Rationalism. It is against Logic, against Science and against the activity of thought itself—its outstanding principle is the prohibition of thought and inquiry, especially as applied to the institutions and workings of a socialist economy. It is characteristic that it should adopt the name "Scientific Socialism" and thus gain the prestige acquired by Science, through the indisputable success of its rule over life and action, for use in its own battle against any scientific contribution to the construction of the socialist economy. The Bolshevists persistently tell us that religion is opium for the people. Marxism is indeed opium for those who might take to thinking and must therefore be weaned from it.

In this new edition of my book, which has been considerably revised, I have ventured to defy the almost universally respected Marxian prohibition by examining the problems of the socialist construction of society on scientific lines, i.e., by the aid of sociological and economic theory. While gratefully recalling the men whose research has opened the way for all work, my own included, in this field, it is still a source of gratification to me to be in a position to claim to have broken the ban placed by Marxism on the scientific treatment of these problems. Since the first publication of this book, problems previously ignored have come into the foreground of scientific interest; the discussion of Socialism and Capitalism has been placed on a new footing. Those who were formerly content to make a few vague remarks about the blessings which Socialism would bring are now obliged to study the nature of the socialist society. The problems have been defined and can no longer be ignored.

As might be expected, socialists of every sort and description, from the most radical Soviet Bolshevists to the "Edelsozialisten" of western civilization, have attempted to refute my reasonings and conclusions. But they have not succeeded, they have not even managed to bring forward any argument that I had not already discussed and disproved. At the present time, scientific discussion of the basic problems of Socialism follows the line of the investigation of this book.

The arguments by which I demonstrated that, in a socialist community, economic calculation would not be possible have attracted especially wide notice. Two years before the appearance of the first edition of my book I published this section of my investigations in the Archiv für Sozialwissenschaft (Vol. XLVII, No. I), where it is worded almost exactly as in both editions of the present work. The problem, which had scarcely been touched before, at once roused lively discussion in German-speaking countries and abroad. It may truly be said that the discussion is now closed; there is today hardly any opposition to my contention.

Shortly after the first edition appeared, Heinrich Herkner, chief of the Socialists of the Chair ("Kathedersozialisten") in succession to Gustav Schmoller, published an essay which in all essentials supported my criticism of Socialism.[1] His remarks raised quite a storm amongst German socialists and their literary followings. Thus there arose, in the midst of the catastrophic struggle in the Ruhr and the hyper-inflation, a controversy which speedily became known as the crisis of the "Social Reform Policy." The result of the controversy was indeed meagre. The "sterility" of socialist thought, to which an ardent socialist had drawn attention, was especially apparent on this occasion.[2] Of the good results that can be obtained by an unprejudiced scientific study of the problems of Socialism there is proof in the admirable works of Pohle, Adolf Weber, Röpke, Halm, Sulzbach, Brutzkus, Robbins, Hutt, Withers, Benn, and others.

But scientific inquiry into the problems of Socialism is not enough. We must also break down the wall of prejudice which at present blocks the way to an unbiased scrutiny of these problems. Any advocate of socialistic measures is looked upon as the friend of the Good, the Noble, and the Moral, as a disinterested pioneer of necessary reforms, in short, as a man who unselfishly serves his own people and all humanity, and above all as a zealous and courageous seeker after truth. But let anyone measure Socialism by the standards of scientific reasoning, and he at once becomes a champion of the evil principle, a mercenary serving the egotistical interests of a class, a menace to the welfare of the community, an ignoramus outside the pale. For the most curious thing about this way of thinking is that it regards the question, whether Socialism or Capitalism will better serve the public welfare, as settled in advance—to the effect, naturally, that Socialism is considered as good and Capitalism as evil—whereas in fact of course only by a scientific inquiry could the matter be decided. The results of economic investigations are met, not with arguments, but with that "moral pathos," which we find in the invitation to the Eisenach Congress in 1872 and on which Socialists and Etatists always fall back, because they can find no answer to the criticism to which science subjects their doctrines.

The older Liberalism, based on the classical political economy, maintained that the material position of the whole of the wage-earning classes could only be permanently raised by an increase of capital, and this none but capitalist society based on private ownership of the means of production can guarantee to find. Modern subjective economics has strengthened and confirmed the basis of the view by its theory of wages. Here modern Liberalism agrees entirely with the older school. Socialism, however, believes that the socialization of the means of production is a system which would bring wealth to all. These conflicting views must be examined in the light of sober science: righteous indignation and jeremiads take us nowhere.

It is true that Socialism is today an article of faith for many, perhaps for most of its adherents. But scientific criticism has no nobler task than to shatter false beliefs.

To protect the socialist ideal from the crushing effects of such criticism, attempts have recently been made to improve upon the accepted definition of the concept "Socialism." My own definition of Socialism, as a policy which aims at constructing a society in which the means of production are socialized, is in agreement with all that scientists have written on the subject. I submit that one must be historically blind not to see that this and nothing else is what has stood for Socialism for the past hundred years, and that it is in this sense that the great socialist movement was and is socialistic. But why quarrel over the wording of it! If anyone likes to call a social ideal which retains private ownership in the means of production socialistic, why, let him! A man may call a cat a dog and the sun the moon if it pleases him. But such a reversal of the usual terminology, which everyone understands, does no good and only creates misunderstandings. The problem which here confronts us is the socialization of ownership in the means of production, i.e. the very problem over which a worldwide and bitter struggle has been waged now for a century, the problem (above all others) of our epoch.

One cannot evade this defining of Socialism by asserting that the concept Socialism includes other things besides the socialization of the means of production: by saying, for example, that we are actuated by certain special motives when we are socialists, or that there is a second aim—perhaps a purely religious concept bound up with it. Supporters of Socialism hold that the only brand worthy the name is that which desires socialization of the means of production for "noble" motives. Others, who pass for opponents of Socialism, will have it that nationalization of the means of production desired from "ignoble" motives only, has to be styled Socialism also. Religious socialists say that genuine Socialism is bound up with religion; the atheistical socialist insists on abolishing God along with private property. But the problem of how a socialistic society could function is quite separate from the question of whether its adherents propose to worship God or not and whether or not they are guided by motives which Mr. X from his private point of view would call noble or ignoble. Each group of the great socialist movement claims its own as the only true brand and regards the others as heretical; and naturally tries to stress the difference between its own particular ideal and those of other parties. I venture to claim that in the course of my researches I have brought forward all that need be said about these claims.

In this emphasizing of the peculiarities of particular socialist tendencies, the bearing which they may have on the aims of democracy and dictatorship obviously plays a significant part. Here, too, I have nothing to add to what I have said on the subject in various parts of this book (Chapter 3, Chapter 15, and Chapter 31). It suffices here to say that the planned economy which the advocates of dictatorship wish to set up is precisely as socialistic as the Socialism propagated by the self-styled Social Democrats.

Capitalist society is the realization of what we should call economic democracy, had not the term—according I believe, to the terminology of Lord Passfield and Mrs. Webb—come into use and been applied exclusively to a system in which the workers, as producers, and not the consumers themselves, would decide what was to be produced and how. This state of affairs would be as little democratic as, say, a political constitution under which the government officials and not the whole people decided how the state was to be governed—surely the opposite of what we are accustomed to call democracy. When we call a capitalist society a consumers' democracy we mean that the power to dispose of the means of production, which belongs to the entrepreneurs and capitalists, can only be acquired by means of the consumers' ballot, held daily in the market-place. Every child who prefers one toy to another puts its voting paper in the ballot-box, which eventually decides who shall be elected captain of industry. True, there is no equality of vote in this democracy; some have plural votes. But the greater voting power which the disposal of a greater income implies can only be acquired and maintained by the test of election. That the consumption of the rich weighs more heavily in the balance than the consumption of the poor—though there is a strong tendency to overestimate considerably the amount consumed by the well-to-do classes in proportion to the consumption of the masses—is in itself an 'election result', since in a capitalist society wealth can be acquired and maintained only by a response corresponding to the consumers' requirements. Thus the wealth of successful business men is always the result of a consumers' plebiscite, and, once acquired, this wealth can be retained only if it is employed in the way regarded by consumers as most beneficial to them. The average man is both better informed and less corruptible in the decisions he makes as a consumer than as a voter at political elections. There are said to be voters who, faced with a decision between Free Trade and Protection, the Gold Standard and Inflation, are unable to keep in view all that their decision implies. The buyer who has to choose between different sorts of beer or makes of chocolate has certainly an easier job of it.

The socialist movement takes great pains to circulate frequently new labels for its ideally constructed state. Each worn-out label is replaced by another which raises hopes of an ultimate solution of the insoluble basic problem of Socialism—until it becomes obvious that nothing has been changed but the name. The most recent slogan is "State Capitalism." It is not commonly realized that this covers nothing more than what used to be called Planned Economy and State Socialism, and that State Capitalism, Planned Economy, and State Socialism diverge only in non-essentials from the "classic" ideal of egalitarian Socialism. The criticisms in this book are aimed impartially at all the conceivable forms of the socialistic community.

Only Syndicalism, which differs fundamentally from Socialism, calls for special treatment (Chapter 16, Section 4).

I hope that these remarks will convince even the cursory and superficial reader that my investigation and criticisms do not apply solely to Marxian Socialism. As, however, all socialistic movements have been strongly stimulated by Marxism I devote more space to Marxian views than to those of other varieties of Socialism. I think I have passed in review everything bearing essentially on these problems and made an exhausting criticism of the characteristic features of non-Marxist programmes too.

My book is a scientific inquiry, not a political polemic. I have analysed the basic problems and passed over, as far as possible, all the economic and political struggles of the day and the political adjustments of governments and parties. And this will, I believe, prove the best way of preparing the foundation of an understanding of the politics of the last few decades and years: above all, of the politics of tomorrow. Only a complete critical study of the ideas of Socialism will enable us to understand what is happening around us.

The habit of talking and writing about economic affairs without having probed relentlessly to the bottom of their problems has taken the zest out of public discussions on questions vital to human society and diverted politics into paths that lead directly to the destruction of all civilization. The proscription of economic theory, which began with the German historical school, and today finds expression notably in American Institutionalism, has demolished the authority of qualified thought on these matters. Our contemporaries consider that anything which comes under the heading of Economics and Sociology is fair game to the unqualified critic. It is assumed that the trade union official and the entrepreneur are qualified by virtue of their office alone to decide questions of political economy. "Practical men" of this order, even those whose activities have, notoriously, often led to failure and bankruptcy, enjoy a spurious prestige as economists which should at all costs be destroyed. On no account must a disposition to avoid sharp words be permitted to lead to a compromise. It is time these amateurs were unmasked.

The solution of every one of the many economic questions of the day requires a process of thought, of which only those who comprehend the general interconnection of economic phenomena are capable. Only theoretical inquiries which get to the bottom of things have any real practical value. Dissertations on current questions which lose themselves in detail are useless, for they are too much absorbed in the particular and the accidental to have eyes for the general and the essential.

It is often said that all scientific inquiry concerning Socialism is useless, because none but the comparatively small number of people who are able to follow scientific trains of thought can understand it. For the masses, it is said, they will always remain incomprehensible. To the masses the catchwords of Socialism sound enticing and the people impetuously desire Socialism because in their infatuation they expect it to bring full salvation and satisfy their longing for revenge. And so they will continue to work for Socialism, helping thereby to bring about the inevitable decline of the civilization which the nations of the West have taken thousands of years to build up. And so we must inevitably drift on to chaos and misery, the darkness of barbarism and annihilation.

I do not share this gloomy view. It may happen thus, but it need not happen thus. It is true that the majority of mankind are not able to follow difficult trains of thought, and that no schooling will help those who can hardly grasp the most simple proposition to understand complicated ones. But just because they cannot think for themselves the masses follow the lead of the people we call educated. Once convince these, and the game is won. But I do not want to repeat here what I have already said in the first edition of this book, at the end of the last chapter.

I know only too well how hopeless it seems to convince impassioned supporters of the Socialist Idea by logical demonstration that their views are preposterous and absurd. I know too well that they do not want to hear, to see, or above all to think, and that they are open to no argument. But new generations grow up with clear eyes and open minds. And they will approach things from a disinterested, unprejudiced standpoint, they will weigh and examine, will think and act with forethought. It is for them that this book is written.

Several generations of economic policy which was nearly liberal have enormously increased the wealth of the world. Capitalism has raised the standard of life among the masses to a level which our ancestors could not have imagined. Interventionism and efforts to introduce Socialism have been working now for some decades to shatter the foundations of the world economic system. We stand on the brink of a precipice which threatens to engulf our civilization. Whether civilized humanity will perish forever or whether the catastrophe will be averted at the eleventh hour and the only possible way of salvation retraced—by which we mean the rebuilding of a society based on the unreserved recognition of private property in the means of production—is a question which concerns the generation destined to act in the coming decades, for it is the ideas behind their actions that will decide it.

Vienna, January 1932"

>> ^dystopianfuturetoday:

Oh please, dft, don't act as if my point is trite and beneath discussion? You sound like the people from the other party who say we're a Christian nation because the money is printed with 'In God We Trust' and our 'Pledge of Allegiance' says 'One Nation Under God'. To them, the discussion is over, too.

Just because our Congress put 'In God We Trust' on our money does not mean we're a Christian nation, right? And why is that? Because we left a tyrannical EUROPEAN rule with a nationally recognized church, and our founding fathers wanted this new nation to be secular. Funny how Republicans want to rewrite that portion of our history.

And just because our government has voted to increase our taxes, its own size and forces us to pay for new socialized services does not mean this was the intended direction of the nation. Never in a single utterance of our founding fathers did they ever want a socialist nation. Funny how Democrats want to rewrite that portion of our history.

"The government is best which governs least" - Thomas Jefferson

^The point is that we HAVE discussed this ad nauseum blankety-blank, and we always say the same things, over and over and over and over and over and over and over and over.

Your ideas are fine, but you never speak in specifics. Platitudes, jingoism and historical quotes are fine, but at the end of the day, you've done nothing to persuade me to believe a RonPaultopia would even be able to function at all?

Love the new tearful intro, imstellar. Always cast yourself as the victim when people don't agree. How dare we not fully appreciate this dusty, aged, cold-war tome, what hath lain dormant through 60 years of unprecedented economic activity.

I doubt anyone would confuse my statements for jingoism. That aside, I believe if you scroll up the page to my first comment, you'll notice I didn't address you. You addressed me. Sorry if you think I was trying to engage you in another discussion ad infinitum, but I simply wasn't addressing you. I forgive your ego.

Furthermore, sorry if you think my points are unoriginal. Reading back through the page I see all of your comments are so meaningful, important and most definitely original. I bow to your superior arrogance intellect.

^Laying claim to freedom and liberty is jingoistic.

Also, I didn't call your arguments unoriginal, I've just heard them before so many times. My ego accepts your forgiveness and returns the favor. I bet we could fit both our egos in imstellar's ego and still have room for a hot tub and mini bar.

^What? dft, jingoism has nothing to do with laying claim to freedom and liberty. That makes no sense. Explain yourself. Jingoism is "extreme patriotism in the form of aggressive foreign policy". [edit] And, also "excessive bias in judging one's own country as superior to others", which you cannot infer from my comments. I never said the U.S. was superior.

And, claiming I use platitudes does mean you were calling me unoriginal - or at the very least dull, meaningless or trite. You pick your ad hominem meaning, and we'll run with that. Sorry if I tend to use real definitions of terms instead of whatever fits my agenda.

^(I clearly offended you, and I'm sorry. There is no question that you are a smart, thoughtful and well intentioned guy. I don't think you are dull, meaningless, trite, etc. I've just had similar conversations with you many times and expressed some exasperation in a lame way. Sorry.)

As far as I know, jingoism isn't limited to country, and can be used as a term to describe any party or faction. Whether it's correct usage or not, I'm guessing you understand my meaning. Only the anarchists can truly claim the brand of liberty and freedom you speak of.

"but in the US we require freedom and liberty" This also comes off a bit platitud-y to me. As if Europe lives in chains while we carry the torch for truth and justice. Freedom and liberty are complex concepts that can be applied in infinite ways. One man's liberty is another man's slavery. Having healthcare gives you freedom from sickness. A shortened work week gives you freedom to spend time with the people you love. Social Security gives elders the freedom to not die of starvation, alone in an alley. My point is that we can apply these terms to a broad range of political philosophies, and that trying to pin it on your own lapel is a hollow exercise.

One more thing, bf

Quoting the words and guessing at the intentions of the founding fathers is like quoting religious scripture, we can always find something to back up our arguments, but there are also tons of things we choose to forget.

I assume you wouldn't support voting rights being restricted to white land-owning males? Or slavery? Right?

^You didn't offend me, really. It did read as ad hominem, as if you were making a personal attack about my character as opposed to my actual comments in order to win an argument. For that, I will always respond, and respond fervently.

The type of liberty and freedom I "speak of" is very far from anarchy. I believe in the writ of law as it pertains to limited government set forth by our Constitution, and for some reason Republicans and Democrats alike try to revise that to mean lawlessness. That's unfair.

"but in the US we require freedom and liberty" - I didn't mean "in stark contrast to Europe". I was saying we are not Europe, so any juxtaposition with Europe is an exercise in sophism. My original point was you cannot have liberty and freedom in a socialist society, because money is being extorted and stolen from us (violently) in order to pay for socialized services, etc. etc. etc. Blah, blah, blah.

This is the part where you say it's something we've discussed ad naseum though for some reason for a topic we've apparently discussed to its absolute end I still feel like I'm being taken out of context constantly and shoved into some fringe group next to Anarchism. And then with the next breath told I'm a chest-thumping Nationalist! They're not even close to being in the same realm!

I hope you can see how that kind of extreme diametrical labeling can be inferred as an attack on my character more than a true critique of my politics.

>> ^dystopianfuturetoday:


You understand you are comparing the words of people who lived two hundred years ago whose words were recorded in English to that of two-thousand year old text written in dead languages that, to this day, scholars still argue if Genesis refers to a "God", "Goddess" or "Goddesses" that created the universe. I'm sorry, you're just wrong.

And to point out slavery as if it was a protected right under the Constitution suggests to me how little you may know about the history of this country. Forgive me if I sound as if I'm being condescending. I'm really not, but you do understand the Declaration of Independence was written at the beginning of the Revolution, right? And you do understand at that time, it was imperative to have all colonies backing the new Union lest we lose... even the Southern colonies, which refused to join the Union if slavery was to be abolished.

So, of course I wouldn't want to give voting rights to white land-owners only. That's absurd. Here again I cannot help but think you're trying to shove me in another fringe group. You act as if we are all too stupid and petty to live with freedom and liberty. As if for some odd reason a larger, richer, socialized government is the best alternative. That makes no sense to me.

^So you disagree that the words (not limited to the ones in the Constitution) of the founding fathers are used to justify a great many contradictory things? It seems like a fairly uncontroversial point to concede, but I guess we iz sparring.

dystopianfuturetoday,

If it is true that you and blankfist have had many many discussions over and over as you say, why is it you still fail to even understand the basic framework surrounding his position?

I'll quote Mises as his "dusty, aged, cold-war tome" is once again, relevant:

"Thus Marxism protects itself against all unwel-
come criticism. The enemy is not refuted: enough to unmask him as
a bourgeois.' Marxism criticizes the achievements of all those who
think otherwise by representing them as the venal servants of the
bourgeoisie. Marx and Engels never tried to rehte their opponents
with argument. They insulted, ridiculed, derided, slandered, and
traduced them, and in the use of these methods their followers are
not less expert. Their polemic is directed never against the argument
of the opponent, but always against his person."

I imagine you are going to try to deflect that by mocking the usage of the term Marxist, so I have included this as well:

"I hope that these remarks will convince even the cursory and
superficial reader that my investigation and criticisms do not apply
solely to Marxian Socialism. As, however, all socialistic movements
have been strongly stimulated by Marxism I devote more space to
Mamian views than to those of other varieties of Socialism."

"Opposition in principle to Socialism there is none. Today no influential party would dare openly to advocate Private Property in the Means of Production. The word "Capitalism" expresses, for our age, the sum of all evil. Even the opponents of Socialism are dominated by socialist ideas. In seeking to combat Socialism from the standpoint of their special class interest these opponents—the parties which particularly call themselves "bourgeois" or "peasant"—admit indirectly the validity of all the essentials of socialist thought. For if it is only possible to argue against the socialist programme that it endangers the particular interests of one part of humanity, one has really affirmed Socialism. If one complains that the system of economic and social organization which is based on private property in the means of production does not sufficiently consider the interests of the community, that it serves only the purposes of single strata, and that it limits productivity; and if therefore one demands with the supporters of the various "social-political" and "social-reform" movements, state interference in all fields of economic life, then one has fundamentally accepted the principle of the socialist programme. Or again, if one can only argue against socialism that the imperfections of human nature make its realization impossible, or that it is inexpedient under existing economic conditions to proceed at once to socialization, then one merely confesses that one has capitulated to socialist ideas. The nationalist, too, affirms socialism, and objects only to its Internationalism. He wishes to combine Socialism with the ideas of Imperialism and the struggle against foreign nations. He is a national, not an international socialist; but he, also, approves of the essential principles of Socialism. [2]

The supporters of Socialism therefore are not confined to the Bolshevists and their friends outside Russia or to the members of the numerous socialist parties: all are socialists who consider the socialistic order of society economically and ethically superior to that based on private ownership of the means of production, even though they may try for one reason or another to make a temporary or permanent compromise between their socialistic ideal and the particular interests which they believe themselves to represent. If we define Socialism as broadly as this we see that the great majority of people are with Socialism today. Those who confess to the principles of Liberalism and who see the only possible form of economic society in an order based on private ownership of the means of production are few indeed."

In reply to this comment by blankfist:
^This is the part where you say it's something we've discussed ad naseum

Yes. You see taxes as theft and I see them as a rudimentary part of living in a democratic nation. As long as we split on this, we are doomed to forever argue in circles.

Oh, and as I tried to explain above, you are jingoistic in regards to political party, not nation.

*sigh*

I'm having liberal guilt; I stirred this pot, and look what it wrought.

blankfist, you're cute when you claim all social programs are forbidden by the Constitution.

dft, you're cute when you say "jingoism".

imstellar, you're cute when you copy/paste massive sections of classical works of economic theory when people ask you what you think.

Perhaps I'm cute when I exclaim "Won't you all please think of some way to help Obama!"

*cough*

Failing that, at least try to answer my questions from above, because I'm finding much of my beliefs scarily vindicated by this crisis, and it's clear you feel the same way, even though we have very different economic religions.

Suffice to say, I think we can all agree that we should steer clear of cows pissing in the wind in any kind of economic situation.

^Plenty of hydroelectric possibilities with cows pissing in the wind. Think outside of the box, hippie.

>> ^dystopianfuturetoday:
You see taxes as theft and I see them as a rudimentary part of living in a democratic nation.

Nope. I said income tax. I believe in excise tax and user fees.


>> ^NetRunner:
blankfist, you're cute when you claim all social programs are forbidden by the Constitution.

Nope. I have said the Constitution details the limited power of the federal government, and when they decide to socialize services and fund them through income tax (force payment) instead of, say, user fees (elected payment), then, yes, that's unconstitutional.

^ What do we need to do to fix our economic apocalypse?

What should we do for people who're suffering because of it?

You opposed Obama's stimulus plan, right? What should government do instead?

What should be done with the zombie banks? Receivership, bankruptcy, or bailout?

>> ^NetRunner:

I think I've touched on this before, but I'll give it another go.

To fix the economy, I doubt there's any definitive answer to make things good before things get bad for a while, but what you can do is minimize that "bad" time. In other words, between Obama, Bush and The Fed, we've been committed to over 9 Billion, which causes hyperinflation, which means our currency is devalued. Here's what I think they should've done:

1. No Bailouts. No Stimulus. No printing of new money. No hyperinflation. Our dollar will be worth more.
2. Cut government spending! We could start by closing the 800 or so bases in the 130 countries outside of the US? The government spends too much. There's lot to cut.
3. Abolish income tax. If we did, the government would go back to what it was getting a little over ten years ago.
4. Sound money. Slowly we need to transition back to the gold/silver standard. We can start by offering sound money as an option to the fiat Fed money.

This doesn't mean things will be instantly great. We'd see a lot of the problems we're seeing now, and probably in larger concentration, but I would bet you we'd pull out of it in a year or so. As it is now, I think we're going to see major suffering in the US for many, many years to come.

[edit]Oh, and how could I forget:
5. End the war in Iraq. Pull the troops out now. Not in 2010.

[edit, edit]
sex is fun.

Sex is fun.

NetRunner,

I think unemployment increases when demand decreases, and unemployment decreases when demand increases. Demand increases when wages are increased and wages increase when production is increased.

I think it is a mistake to think you can simply cure a depression. You can do things that put you in the right direction, and try to prevent it from happening in the future, but there is nothing that is going to instantly fix this economy. If it was possibly to simply correct a global recession with a magic wand, why wouldn't we just use that same wand on developing countries with terrible economies and bring everyone out of poverty?

Long term, to increase employment you have to increase production, and you aren't going to want to hear it, but I think resources in the hands of private owners is the best way to do that. You have to let prices drop, companies fail, and people lose their jobs. In 18 months it will be mostly over, which if you think about it, is only maybe 9 more months if the government hadn't intervened in the first place.

Short term, no matter what you do this recession is going to be hard. People are going to lose jobs, end up homeless, and worse. I honestly don't understand why recessions are viewed so negatively; the only distinctly negative symptom is increased unemployment, don't you agree? Yes, prices drop and people lose money, but the biggest problem is people losing their jobs. Look at this graph:

http://4.bp.blogspot.com/_3bGnkNeoPxk/SZiQ1JIJUqI/AAAAAAAACag/qP1TeKCqlIQ/s1600-h/research.stlouisfed.org.png

Right now the rate of unemployment is 8% and we are pumping trillions into our economy to fix this, yet in 1990s (a time of relative prosperity) the rate of unemployment was also 8%. In the last 50 years, there are at least 7 instances of it being this high, yet do you remember anyone freaking out to the extent we are today?

I am realistic in that I don't expect to go from complete dependence on the government to zero dependence overnight. Private severance packages, unemployment benefits, and personal savings are all essential in easing the transition between jobs. If we are going to spend several trillion, why don't we just put it all in unemployment insurance? If the market can correct itself in 18 months if left alone, why don't we just combine the two ideologies: let the market correct itself, however brutal it may be, but directly combat the suffering caused by unemployment by increasing benefits to those affected? Keeping our hands off the market, and returning to reasonable spending will help establish a strong foundation for the economy; it will bounce back stronger than ever if we would only let it. In the meantime, we can also help out those in need. Wouldn't that be the best of both worlds?

I mean honestly, we are talking about an increase in unemployment from 6% to 8%, do you really want to risk throwing the world into a 20 year depression, debasing our entire money supply, bankrupting the US, or having the dollar lose its status as the worldwide currency over a 2% increase in unemployment?

>> ^NetRunner:
^ What do we need to do to fix our economic apocalypse?
What should we do for people who're suffering because of it?
You opposed Obama's stimulus plan, right? What should government do instead?
What should be done with the zombie banks? Receivership, bankruptcy, or bailout?


**Danger** Unpopular personal opinion follows **Danger**

1. Stop printing truckloads of money. Stop bailing out failing companies. Stop throwing cash at worthless unions. Stop bloating the government. Stop proposing more and more spending. Stop looking to the government to fix all of lifes problems. Let it fall. The failed business models will collapse and others will take their place. It's not an apocalypse, but it will become one far down the line if we keep reviving the failures.

2. It's not the government's responsibility to help people who are suffering. Especially not by redistributing the money of the citizenry.

3. Government intervention should only revolve around incentives for business and lowering the taxes. Other than that, I don't want them doing anything.

4. Let them fail.

A consequence of a free market system is failure. If you can't accept that there are winners and losers in reality, and you keep preventing the failure of others, it will bite you in the ass. If you want government provided healthcare, food, banks, paychecks, etc., there are plenty of other countries that offer to take your money and provide them. I would prefer to keep at least one country that favors leaving the choice of how to spend privately made money to the citizens.

Imstellar,

Regarding your unemployment figures and the levels you cite from the 70s and 80s when unemployment was 9% to 11%, the Fed at the time was maintaining high interest rate levels, in response to growing unemployment levels it started to cut back interest rates to increase aggregate demand.

The interest rate now is 0%, the Fed cannot provide any stimulus to the economic given that there is large fear in the economy regarding credit. This is why Fiscal policy has come into effect, seeing as there is no avenue for Monetary policy in the system right now.

Furthermore it was predicted that 8% was going to be the average unemployment level for the whole of 2009, while in February the unemployment level spiked to 8.1%. The projections were clearly too optimistic.

With regards to accusations of hyperinflation, the actuality is that American investors are retaining more of their money here, while China continues to buy Treasury bills and accumulating American debt. Their already vast US dollar reserves demand a sustain dollar thus hyper inflation nor a dollar run is unlikely to occur any time soon. However the US accumulating the money around the world means less is available to other less developed nation seeking the same.

The whole argument about the package being too big has been discussed, I believe the package itself is too small, the CBO projected a shortfall of 14% of GDP over the next two years which translates to $2 trillion.

This is not a recession of over accumulation and over investment in capital that would be absorbed over a period of time, this is a recession where American wealth was lost through housing and share prices to a tune of $12 trillion dollars. Thus demand in consumption and new housing construction both declined, savings have increased but will take years to recover the lost wealth.

The current package covers only half the possible GDP losses in both these cases even at the most optimistic level, another renewed stimulus package will probably be coming in a few months. Something that is mentioned by many economists but not at all covered in the media http://mediamatters.org/items/200903060025?f=h_latest

Also the belief that private ownership and free market capitalism will simply avail this situation with hard work is one of the most ridiculous things I keep reading on this website. You sound like the Banks that failed, claiming that their problems were not insolvency based but liquidity based, you know that if we just gave them more money they could cover their debts. But you know if we just make the economy more capitalistic everything will be fine, not really accounting what it means to be unemployed for a vast majority of Americans, look at trickle down economics and tell me how that worked out.

By the way, I don't hold the view that what is occurring right now is necessarily bad for most Americans who are by and large supportive of Obama's steps towards so called 'socialism' that you claim.

Look at the figures, the US economy almost doubled since the 1970s, yet the incomes have actually declined, adjusted for inflation your father and grand father earned more then you.

Look at post World War 2 America, high rates of growth and productivity up and until the oil shocks, suddenly all these programs that have sustained American prosperity were regarded as 'socialism'. Republican control has seen Government outlays funneled to the rich rather then the whole populace. Big government is bad yet each Republican president has only increased its size rather then decrease it while at the same time pushing forward larger tax cuts. The Middle class suffering all through this.

Right now the American people have a great opportunity to turn around the tide, and am supportive of this, yet there are calls that's it is all socialism, well if its so bad then why is the majority of Americans supportive of these plans? Why is that almost every income group voted for Barack Obama's policies when they were defined a full year in advance?

Liberty and Free Commerce is an ideal of the American people, but so is Social Welfare and so is affordable health care for all. To make the assumption that the Founding fathers wanted America to abide the same rulings they have set out in the 1700s is fairly ridiculous to me. As if these men would be stuck in time and just as rigid as the religions they all thought were so filled with folly. Not to mention the selective nature of statements that people take from the constitution and the bill of rights.

It's American by the people for the people last time I heard. Not by the people for free market capitalism and 1% of the populace.

Personally I agree with what DFT and Ornthoron suggest, the labels themselves are more the problem than either socialism or capitalism in themselves is. We, and most other nations, have always had aspects that were socialist, capitalist, and a few other things such as authoritarian besides at times or in places. The difference tends to be in degree, what policies or areas they are applied in and to what extent. Extremes of any in the wrong places can get pretty ugly, the trick is more in finding the right balance between them. We're just so used to sound bite politics and easy two minute answers that we forgot real problem solving involves a bit more time, effort, and judgment than that. That's the thinking that got us into this problem and it won't get us out.

Drug war, war on terror, finances, and so on, it's all the same. We want easy one step bumper sticker answers and real life just won't cooperate with us on that. What we need are intelligent processes that keep all options open and adjust as needed based on current conditions and past results. I hold little hope of us actually getting it though. It won't happen just because it should and the American people for the most part can't be bothered to get involved in their own lives and nation, they'd rather watch reality TV. If we want better we've got to make it happen and I don't think we will.

Farhad2000,

Why did you focus on a single line of my post when that line was not representative of the overall message I was trying to convey? You ignored 99% of the material in that post and instead only focused on one line which I explicitly gave as personal opinion. You don't need to give me an economic history lesson about federal interest rates and unemployment. I have personally plotted the two together over the past 65 years and performed a trend analysis myself. Have you even seen such a graph?

My point was that the biggest "problem" with a recession is unemployment, do you agree or disagree? If you agree, why out of the trillions in bailouts is little to no money going to address this problem? If you disagree, what is the problem?

As far as your claims that the economy has "doubled" in what sense does taking out a huge loan double ones fiances? If I have 5,000 which I use as a downpayment for a 10,000 car, did I just "double" my finances? The national income of the US is currently in the neighborhood of 15 trillion. The national debt is over 10 trillion, and upwards of 65 trillion when you include entitlements.

I would suggest that you look at an overlay plot of national income versus national debt (with and without entitlements) for the last 39 years and report back to me if you would still say that the economy has doubled since 1970. For a more thorough analysis, take the integral of those two curves and report to me the net differential. Is the number positive or negative? What is the magnitude now versus 1970? How about versus 1912? If you don't immediately have these answers, why are you making such claims?

i've just read pretty much all of this thread and i have to say, it's absolutely incredible just how little i understand or am intrigued about. i'm not saying that's a positive thing either. it just stuns me sometimes when i read a chunk of the english language and am subsequently none the wiser.

i hope that helps with the discussion.

Farhad2000,

I am posting this again just for you, so I hope you read it. It was already posted above, but I do not think you took notice. You said, "...Not by the people for free market capitalism and 1% of the populace."

"Even the opponents of Socialism are dominated by socialist ideas. In seeking to combat Socialism from the standpoint of their special class interest these opponents - the parties which particularly call themselves 'bourgeois' or 'peasant' - admit indirectly the validity of all the essentials of socialist thought. For if it is only possible to argue against the socialist programme that it endangers the particular interests of one part of humanity, one has really affirmed Socialism."

You are arguing against capitalism by claiming that it only benefits 1% of the populace. The idea that science or logic only applies to certain groups of people, or somehow benefits certain groups over others, is a distinctly Marxist idea,. If you are okay with that, fine, but keep in mind the source of your ideas.

Also, keep in mind the difference between theory and practice. In theory, socialism is "for the people" but what has it ever been in practice? In the last 3 months , we have spent over a trillion dollars. How much of that money did you personally receive, and how much money did the top 1% receive? In looking at tax evasion, what percentage of middle class americans fail to pay their tax in full, when their income is directly withheld; and what percentage of the top 1% fails to pay their tax in full, when their income is largely obscured? If the government is the appropriator of money, and the top 1% has lobbyists, contacts, and political persuasion in the government, how exactly do you ever expect "the people" to win? If the top 1% are on the government payroll does that help or make it even worse?

In a capitalistic society, the top 1% have the most money but the people control the appropriations. In a socialistic society, the top 1% have the most money and control the appropriations. A perfect example is Henry Paulson: he made $54 million last year and he is controlling who gets the bailout money ($1 trillion plus). How can you argue otherwise? If you want "power for the people" aren't you on the wrong side?

Please clearly state your goals and how exactly they are achieved in your paradigm.

I can at least understand and sympathize with NetRunner's perspective on unemployment. That is a case of all people helping all people; even if I don't agree with forcing people to help, I can understand the reasoning. In the big scheme of things, unemployment benefits are such a small amount of money compared to our national income its really not a big deal. If we are talking about 2% unemployment, with people receiving 2 months of benefits at half their previous wages (large overestimation), that is less than 0.16% of our national income, or less than $25 billion. $25 billion! I mean seriously, that is like nothing when taken out of $15 trillion. That cannot be said of multi-trillion dollar socialistic bailouts to failing corporations, the governmental manipulation of markets, inflation, the creation of booms and bursts, etc.

Why should we spent upwards of 15% of our national income to indirectly address a problem which can be solved directly with less than 0.16% of our national income?

imstellar,

I've not read your book or the Communist manifesto, nor do I care to. I'm sure they are both of historical interest, but they have nothing to do with the here and now. While I am more of a socialist than, say, George W. Bush, I have no desire to live in the kind of by-the-numbers, pure socialist system that haunts your sheltered existence. I'd just like a decent health care system, more effective schools and a better life for the everyday working stiff. If that makes me a commie in your book, then so be it.

We have evolved past the early 20th century capitalist/socialist tintypes to which you cling. Both systems have their pluses and minuses and neither seems to work well in the absence of the other. Capitalism works well for a great many things, but fails in situations where making money is not the measure of success, like education, healthcare, medicine, infrastructure etc...

You are very quick to dismiss those who see things differently than you as close minded. Maybe it's time you took a look in the mirror. In a decade (at most), you will look back at some of these comments and cringe. When I say this, I'm speaking from experience, as I believed in all that Ayn Rand nonsense at your age too.

^dystopianfuturetoday,

I don't think it is probable to achieve success without defining your goals. The goal "I'd just like a decent health care system, more effective schools and better life for the everyday working stiff" is rather vague. Can you try and be more specific?

You claim that education, healthcare, and medicine are not advanceable by capitalism. Would you not agree that private medical practice has been the mainstay of our healthcare system? As far as I can tell, the vast majority of all healthcare providers are private individuals or companies interested in making money. All major medicine manufacturers are private and also interested in money. Esteemed private colleges and schools, such as Duke, Harvard, Yale; again all interested in making money. I'll give you infrastructure only because its not as clear-cut.

Do you really have a problem the quality of healthcare available in america, or do you have a problem with access for the average person? Do you really think we need more effective schools, or do you think the average person can't afford effective education? I'm not sure what comprises your idea of a better life, but how can such an ambiguous goal ever be realized?

It sounds like your problem is with access, rather than actual quality, yet I will not know for sure until you are more clear about your goals. If my assumption is true, why are you trying to overhaul the system itself, when all you really need to do is increase access? In my mind, that is like ripping out a door and installing a new one rather than making an extra key.

If you have evolved past the early 20th century capitalist/socialist tintypes, why are you trying to paint my arguments with such terms, and how can you even use such terms if you haven't read the material from which they were derived? You did the same with blankfist when calling him an anarchist. If you did it to him, how can you be so sure you aren't doing it to me?

I will admit, your disdain for history is troubling. The primary reason you aren't in a jungle hunting wild boar is because of human history, and the knowledge your ancestors have passed down. To disrespect that knowledge, and throw that out the window because you think "we know everything" in the 21st century, is I think, very dangerous in many ways.

The health care part I don't think needs to be as hard as some think it is, solutions seem to be both in reach and non-damaging to any real competition. The only ones hurt should be the vultures. It's based on costs and reducing them, the following page will help set the table for the idea. The Kaiser Family Foundation, home of the Kaiser Permanente health care groups, offers a bit of data for it and tends to be a well respected source.

http://www.kff.org/insurance/snapshot/chcm010307oth.cfm

As that demonstrates we as Americans pay twice as much or close to it per capita what other nations do, nations such as Germany, United Kingdom, Sweden and so on manage to cover all of their people and to do it for about half of what we pay to just cover some of them. The why of it is both the problem and the solution.

Private insurance companies have managed to insert themselves so heavily into our politics and policy over the last few decades that as rules were rewritten they always tended to be weighted in favor of those who donated big money, and that wasn't us as consumers. Simply replace them if they can't be more than vultures. I do NOT want "socialized health care" in the sense of a micromanaged system but there does seem to be both valid reason and need to have national insurance.

That would probably cover just basic services such as high blood pressure, check ups, and such like that, the expensive stuff such as transplants would likely still fall under supplemental insurance for those who can afford it. They don't tell the docs what to do, we've got medical boards to set standards of care. They just pay the bills. And the docs and hospitals are still self employed, they just submit basic services to a national insurance instead of private.

Yes, there's a million ways it could be done badly but paying twice as much as others for worse services isn't exactly an option worth defending either. We've just got to pay attention and stay involved if we can manage that.

Other aspects of this mess are similar. We don't need sweeping changes to our way of life or anything ridiculous like that, we just need some moderation and redistribution. Yes, I know, dirty word redistribution is, at least until we think about circumstances and the extent we'll redistribute it to. Over the last 30 or so years worker productivity has climbed and climbed again, business profits have climbed and climbed again, and CEO compensation has climbed then climbed again. The one that that hasn't changed much is OUR level of compensation. Real wages adjusted for inflation has been nearly stagnant with minor increases compared to the value offered.

They donated the big bucks, they made the rules to more and more favor themselves, and though yes, it was all legal, it's also legal to say enough is enough and it's time to stop profiteering while your nation falls into disrepair. Power attracts power and money attracts money, we all know it works like that and on the surface there's nothing wrong with that. At least not until it's taken to an extreme. When we hit that extreme we end up with depressions, revolutions, or other civil disturbances which serve to level the playing field again. If we want to avoid the occasional unrest and disturbance we've got to keep a better balance in the first place. Balance is what we forgot. You can't keep feeding the majority of a nations wealth to a very small number of people and expect that nation to become anything but poor as a whole. If the people can't afford to buy anymore the markets cease to function and all the free market idealism in the world won't get them going again. You need to keep money in the pockets of those who are most likely to actually spend it too.

>> ^imstellar28:I can at least understand and sympathize with NetRunner's perspective on unemployment. That is a case of all people helping all people; even if I don't agree with forcing people to help, I can understand the reasoning. In the big scheme of things, unemployment benefits are such a small amount of money compared to our national income its really not a big deal. That cannot be said of trillion dollar socialistic bailouts to failing corporations, the governmental manipulation of markets, inflation, the creation of booms and bursts, etc.


My goodness, my efforts are paying off -- he's starting to have a grudging respect for my beliefs, even if he doesn't agree with them.

I think, imstellar, you just inadvertently stumbled into the main complaint us progressive/liberal people have about what Obama's doing with the economy now. He seems to be continuing this socialism-for-the-rich policy, which is vastly more expensive than anything we've ever dreamed of proposing in terms of unemployment, welfare, and health care, and that's saying quite a bit.

I would agree in general that we need for the losers to lose, mainly these investment banks that built these ponzi schemes. Problem is, when Paulson let Lehman fail, it triggered a run on the banks. In fact, the only thing that's stopped that from happening to all banks is the expectation that government will find a way to keep them afloat somehow.

That's why I see the question of how we deal with the banks as being one of the most important questions right now. If we let them fail, this really will be a huge depression, likely bigger than 1929, and more like the earlier "Long Depression" that followed the Panic of 1873. If we bail them out, not only is that unlikely to work, it would probably make the nation bankrupt, while heaping huge sums of cash into the pockets of the very people who built this house of cards.

I think the only reasonable option is to put them in receivership -- nationalize them. The government takes over the bank, wipes out the shareholders, brings in new management, straighten out the balance sheets, and then sell the bank back to private investors.

That way we keep the bank intact, make the losers lose, and while the risk is socialized, the taxpayers would get any upside that would be gained in the process.

All this talk about debt and deficit spending seems like hot air to me. Sure, we need to worry about it, but it's not really driving any of our issues right now. Cutting government spending right now would be a horrible idea, because it'd just add more people to the unemployment lines (even if I'd otherwise be happy to see the engines of war lose their biggest customer). Cutting taxes might help, but keep in mind Obama did that in the stimulus package (the largest middle-class tax cut in history, lefty demagogues would say), as well as spending money investing in infrastructure, to try to bring down unemployment. As Farhad said, it's probably insufficient to the size of the downturn we're in, but it should lessen the blow.

imstellar and blankfist, you both bring up inflation as a long-term risk. Here's what Brad DeLong has to say about that risk. I'm no economist, but my reading is that he's saying "good point, but here's how we would detect if inflation became an issue, and all of those metrics say we're good to go." From what I'm reading, deflation is the problem we're looking at, not inflation, and while it's true that if we make the stimulus too big it would lead to inflation, I think we're nowhere near that point right now.

Incidentally, that's the answer to imstellar's question about "why don't we do this in good times/developing countries too?"

I also love the compromise plan of saying that government should buff up our social safety net so that an economic crash doesn't put people on the streets, starve them, push them out of school (if there), or forgo medical treatments, then I'm all for letting the rest of the economy crash as hard as it cares too. I think, generally speaking, that's more in line with progressive ideology than what Obama's actually doing.

>> ^imstellar28:

I know that was directed to dft, but I'd say that I'm more concerned about access and some rough standards of quality in healthcare and education than necessarily having them be government-run, and I think dft would agree with that.

I personally think there's a lot of empirical data to say more government involvement in health care would improve access and the standard of quality, but I'll confess I think there's a good case for saying the reverse is true of education.

My goodness, this is sounding like we've found a decent swath of common ground for once.

I'll whip that away by saying I think there should be 100% taxpayer funded forms of both healthcare and eduction for even the poorest among us (the latter including undergraduate college education), but I'm not picky about whether the shcools or hospitals are owned and operated by government or not.

"real life just won't cooperate with us on that. What we need are intelligent processes that keep all options open and adjust as needed based on current conditions and past results. I hold little hope of us actually getting it though. It won't happen just because it should and the American people for the most part can't be bothered to get involved in their own lives and nation, they'd rather watch reality TV."

here, here.

This thread has reached the boredom threshold for me. I'm sure we will pick this up again somewhere very soon, so hold those thoughts and questions till then.

Stellar, I will prove to you that socialism can work... loan me a million bucks.

sex is fun

I'd still like someone to address what I said about unemployment, I think it was a good point. One which I haven't heard, or thought of, before this conversation.

Fascinating, if tangential debate between Michael Albert and David Horowitz on the contemporary relevance of socialism: http://www.zcommunications.org/znet/zdebatehorowitz.htm

A Non-Libertarian FAQ: http://world.std.com/~mhuben/faq.html

Great site on how to deal with evangelical libertarians, now with the Ron Paul Quackery enabler!:

http://world.std.com/~mhuben/libindex.html

Imstellar,

As always you misinterpret data to fit your perceptions.

Real GDP growth has doubled from 1970 to 1990 check BEA, national debt has only increased larger then a fraction of total GDP from 1980 to 1990, with massive debt growth from 1990 to 2000. These levels however are still below levels of World War 2.

Your example really however applies when it comes to the recent so called growth from 1997 to 2007, as real wage increases were nonexistent, so was real stock market growth on the S&P 500. So instead of the economy expanding the US economy has been fueling growth with borrowing. At the same time credit card debt started overtake real wages, with massive increases from 2003Q1.
http://www.businessweek.com/the_thread/economicsunbound/archives/2009/02/the_failure_of_1.html

Your idea that private enterprise can solve these issues is again wrong, given that the Progressive movement brought government intervention to sustain fair markets and competition which lead to break ups of monopolies. Bringing forth agencies like the FDA, FTC and the Interstate Commerce Commission. The Federal Reserve was created to control tariffs and antitrust cases. All these agencies came about in the 1900s and were responses to citizen requests after laissez-faire economics in the 1800s, they also paved the way for the roaring 20s. Before you start complaining about the the government extending the great depression a recent study showed that only 20% of professional economists hold that view, and even then they claim that they Fed should have been the one to instigate change by reducing interest rates and allow credit back in the economy but this is in hindsight with development of Monetary policy in the 50s and 60s.

Furthermore, I never advocated for socialism in the US because it is not going to happen, what I said was socialistic policies, the capitalistic component is not being removed from the US unlike what you seem to believe. Its called a Mixed economy for a reason. There is no pure capitalistic or socialistic economy in the world bar Cuba and some failed states, the closest capitalistic state in the world is actually Singapore.

You keep saying '2%' unemployment.

The unemployment problem is far more severe, but you are underestimating its very nature, the stimulus package was created to save or create 3.5 million jobs, the unemployment figures currently place it at 4.4 million (half of this in the last 4 months) since the start of the recession.

With levels spiking to 8.1 as I mentioned earlier in single month, the highest level since 1983. This strikes at consumer confidence, and further reduces consumption and aggregate demand, not to mention that it means that more foreclosures are coming. Consumption is already taking a hit as confidence plummets and expenditure is being relegated to essentials (however I think the electronics sector will still thrive, especially the video games market, it has been shown to be fairly recession proof unless EA goes crazy and starts to buy up other companies).

Not only are layoffs large but there is increasing firms that are simply coming out of entire market sectors. The Labor department has stated that Unemployment benefits will not recover lost jobs but more must be spent on actual job retraining to realign the US economy with trend factors over the last 10 years, 4.5 billion is in the stimulus package for job retraining. That is still too low as in current dollars $20 billion a year went to job training in 1979, compared with only $6 billion last year.

This recession will fundamentally rebuild the economy, even with unemployment benefits and a sudden resurgence in consumer confidence there is not enough credit available to allow a short term return to employment. Which again necessitates the large fiscal policies we are seeing enacted.

Education will also play a vital role in this, am an advocate of centralized educational standards. I disagree with educational avenues in the US, which usually require graduates to graduate with massive debt which they repay for several years afterward. Not to mention that systems like the SAT and No Child Left behind have only created a system where children learn more about test taking then actual acquisition of knowledge. But this is another debate entirely which I don't really feel like expanding on right now.

Finally. Again to reiterate what I said about the 'let them fail' ideas with regards to the banking system. The Treasury still has not made up its mind how it will cover the toxic debt, the Fed let Lehman Brothers fail and see what happened, the entire finical sector melted down and dragged several other big firms with it. There is talk of letting Citigroup fail, that is a huge bank, and the actual cross exposure is not clearly relevant if its allowed to fail. It could drag the rest of the financial sector with it. However there is clear rallying right now as Citigroup posted a profit, with markets perking up.

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