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DJ Barry Hammond

Politics Thread (encompassing Brexit) - 21 June 2017 onwards

By DJ Barry Hammond, in General Chat

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David Guiza

David Guiza

Posted
Posted
2 hours ago, MattP said:

What a silly thing to get upset about though. 

 

Boris has done his job with these articles mind, back at the top of the Tory members poll now for next leader. 

Oh, absolutely. It's way down the list of ridiculous/offensive/nonsense things that he's done. It's just embarrassing more than anything, hence the Ben Swain comparison. Genuinely baffles me as to how he's so popular; he's just about self promotion and personal gain. People talk about Corbyn manipulating the masses, but Boris is a genius for that.  

  • Like 1
The Fox Covert

The Fox Covert

Posted
Posted
3 hours ago, David Guiza said:

The real life Ben Swain strikes again - still such an inspired choice for foreign secretary https://www.theguardian.com/politics/2017/sep/30/boris-johnson-caught-on-camera-reciting-kipling-in-myanmar-temple

What a surprise! Tory foreign secretary exposed as an ignorant chauvinist bigot. Well I never!!! I once worked with Simon Heffer, now a prominent right wing political journalist. His views were and still are grotesquely reactionary, in fact virtually neanderthal. I once heard him say that the people in the former British colonies were better off under British rule.

  • Like 2
fuchsntf

fuchsntf

Posted
Posted

Why are the British crap at politics....crap at understanding negotiations.

Our elite universities, apparently produces generations of unique qualities,

politics must of got left with the dross, and incompetent, but best liars.

Why are the best big  businesses not in British businessmens hands.

Banks are still crap, and poorly ran.

There are good great small firm British businessmen, but are not listened to, they are without lobby.

Our authorities and organisations are pathetic, major services incompetence at the top ranks.

We love blaming others, and get  away with it...

  • Like 1
Guest Kopfkino

Guest Kopfkino

Posted
Posted (edited)
On 29/09/2017 at 21:50, toddybad said:

I've got a degree in physics so the maths isn't a problem (well, it wasn't then anyway!)but does make me think it's probably quite boring lol

I presume that your example of employment benefits is one that's been simplified for explanation purposes. So what empirical data and tests have convinced you of the power of free markets? Whenever you've discussed the subject you've talked of being minded to believe that zero regulation entirely free markets would be the best. By best do you simply mean most efficient? And what do you mean by efficiency?

So when it comes to regulated markets, or nationalised industries, how far does the research go - by which I mean, does it not only consider the impact upon the system itself but also look at benefits and costs elsewhere in the economy? I only ask this as you so often see political decisions which seem to have benefits in one area - for example if you take unemployment benefit again, if you were to reduce the payable period of the benefit you would find cost savings but how do you quantify the likely knock on costs for the NHS for impaired mental and physical health? 

In terms of its merits as a science, how repeatable are results? In physics, as you might imagine, experiments are effected by almost everything - particularly those at quantum level where even observing the experiment affects it - so how does this relate to economics?

I suppose I'm interested in how economics has led you to believe in deregulated free markets when the evidence I observe (through my tinted lenses) is multiple failures caused by deregulation. It may be that we can never agree on this but I am interested to understand HOW you've come to your view.

When you're ill and can't sleep on a Saturday night, what better thing to do than spend nearly an hour typing a load of nonsense to post on Foxestalk.

 

 

Tbh it would take me to write a full-on essay to address that properly which isn’t feasible. I dare say to extract the answers you want, you might have to be a little less open-ended. What I anticipate you will have unleashed is moody me. It’s worrying times, complacency over the free market argument set in and now we’re losing it and I can’t for the life of me understand why. At least by 2022 I should have reached fluency in German and can move to Switzerland. Failing that Australia or the US will suffice.

 

I actually haven't ever really said I'm minded to believe that zero regulation and an entirely free market would be best. I believe when leicsmac and I had an exchange on the matter, I explicitly said that government has a responsibility to oversee the functioning of the market and that requires regulation (preferably through a regulatory body). For a start, basic law and order is needed which is effectively regulation. I very much do believe the government has a role to play in redistribution as well. I wouldn’t be in a position to benefit from a world class education rn if it wasn’t for government redistribution. The problem, I feel lies when the government overextends it reach when it is not, and can never be properly informed. Government is an economic actor in the same way firms and households are, so why is it acceptable for it to meddle in a markets function and use coercion when other actors cannot. As I've quoted before, Mises was quite correct to say "if one rejects laissez-faire on account of man's fallibility and moral weakness, one must for the same reason reject every kind of government action". For state intervention to work, it needs to more decentralised and targeted at local needs. A FTSE100 company doesn’t centralise its decision making so the state shouldn’t either.

 

I mean it all depends on the research but yes there are plenty of studies out there that look at effects beyond the immediate. In fact, I’m pretty sure there was a recent study that did exactly as you posited, or something similar. But with all due respect, it’s not possible for me to be across all the literature. Though I can be sure, I have rarely seen anything that says competition is bad for consumer welfare, and therefore very little to say nationalised industry is good for the consumer. Being as nationalised industry is just state monopoly.

 

I don’t think best is most efficient, no. Efficiency in economics can take many forms (there’s about 10 that I can think of). I genuinely believe these things will provide the best overall social outcome. Often that also coincides with efficiency. But again, it’s blurring the lines of philosophy and economics. I am interested in an economic policy that promotes personal freedom, but that comes from having to apply philosophy to economics rather than just studying economics.

 

However, there is mathematical proof that the free market is Pareto efficient (first theorem of welfare). But that relies on the assumption of information being shared symmetrically which is highly unlikely (you can argue the price signal does this to a degree but it is mostly true that there is always asymmetric information). The fact this assumption doesn’t hold seems to be the justification for government intervention. But government suffers exactly the same problem because it could not possibly process the information it needs to be able to be informed. It then uses coercion affect things. Fundamentally, for a system to be good for everyone, there cannot be coercive acts because coercion is bad for the person being aggressed.

 

The question is, who do you want to do things. The ‘market’ which is a collection of people co-operating for mutual benefit, or the government which is made up of people who are office-seeking, such that they have to make decisions which give them best chance of election. Although my portrayal there is obviously one which leads you down a certain path, there’s not a right or wrong answer. But who should be in charge of an individuals life?

 

And that ultimately is where my belief comes from. It’s not that my belief in the free market comes from economics. Economics gives me the tools to see how markets work and why things like rent controls/price controls are disastrous but it more confirms my belief in the free market rather than leading to it. For example, I’m concerned to read in the FT today that Corbyn also has a policy of presumed consent for organ donation. Effectively, when you die, your organs become property of the NHS. Now I don’t find that in itself problematic (in terms of organ donation), I find what it symbolises problematic. He’s a man that wants the state to own my body when I die. I want to be able to make my own choices and have personal freedom, I don’t want the state to have rule over my life and I certainly don’t want it to think I am its property. And similarly, I want there to be competition over who provides my electricity so I can choose what is best for me and not have it provided by the state. It doesn’t need to be provided by the state, the state just needs to ensure there is a fair marketplace for me to make that choice, a marketplace which benefits me and the supplier of my electricity.

 

 

Anyway, being as this started from your Guardian piece where I pointed out the problem with the housing market might actually be the fact it is probably the least free market aside from healthcare and possibly education. The planning system in the UK is one of the most restrictive in the world. There is a wealth of empirical data out there which suggests that the key determinant for long-run house prices is the restrictiveness and severity of the planning system. In fact, an LSE study showed that a third of the average house price in England is due to the restrictive planning system. A study from the US suggested that restrictive planning laws around high TFP cities has meant that the economy was between 8 and 13% smaller. Given that London is our major source of productivity and is heavily ‘protected’ by planning laws, I suspect the impact might even be bigger for the UK. It’s basic economics, restricting supply pushes up prices and that it pricing out productive, younger workers from our main source of economic productivity. Imagine what we could do if we reformed the planning system, had a system much like Germany for example, and unleashed the power of the market to build houses. Certainly would be much better than rent controls or the government building houses (if it can get permission) and pushing housebuilders out by selling below market price.

 

Think of an industry like software and how lightly regulated it is and how it is rapidly advancing and delivering all sorts of productivity gains compared to a heavily regulated industry like banking which in truth is a mess.

 

I genuinely find it incredible that people sit there in their Ikea chair having a go at capitalism and the free market using their smartphones and their laptops to tell the world via Twitter before they pack for a week in Marbella. There’s the wonder of what the free market can do for you, there’s the result of an entrepreneur motivated by profit, there’s the result of competition making things more accessible for everyone. 27% of people think airlines should be state owned. Budget airlines have effectively created a situation where people see a foreign holiday as a divine right. It’s bonkers.

 

It’s a worry how naïve people seem to be about the ideas they’re entertaining and it’s worrying how uninformed it is. These people are walking around with a starbucks and an iPhone for god sake. I mean I worry when someone like yourself is at least half switched on and genuinely believes that Gordon Brown ordered QE. It’s just wrong. The MPC asked Alistair Darling if he would extend their framework, discussions were held and he signed t off. It came from the BoE but the chancellor had to sign off on them creating an APF to be able to buy assets for QE. Quite different to Gordon Brown ordering it.

 

 

Right the whole question of economics being a science or not is such wasted energy. As far as I see it, economics is no different to medicine. We don’t really know what causes a recession or why consumers act the way they do sometimes in exactly the same way health folk don’t really fully understand the effects of lifestyle and diet. It seems that one week we’re told to drink red wine, the next we shouldn’t. And the reason for both is because it’s very difficult to actually run the experiment. We’re not able to just create a financial crisis to see how it goes, nor are we able to randomise policy decisions to observe the effects (although this was done in Oregon with state health insurance which was interesting). You do tend to find a lot of findings are replicated when applied elsewhere. That is more the case where populations are relatively homogenous (say comparing states in the US as opposed to comparing Bolivia with China) because human behaviour can be obstructive. Many believe that means it isn’t a proper science. It will become more of an empirical scientific field as data becomes more available because in that sense its still only in its fledgling years compared to the tradition sciences. I expect it will be able to better inform policy in the future and leave less of it down to ideology and philosophy. Anyway, so be it if it isn’t a real science.

 

 

I would love to see your evidence for repeated failures of deregulation. I’d be careful saying the financial crisis because I expect a damned good explanation (which I suspect you won’t have). I once asked that question of Alf and he never responded.

Edited by KingGTF
katieakita

katieakita

Posted
Posted
20 hours ago, toddybad said:

Don't expect.a response from fox. He only has a bile setting so isn't capable of discussing a detailed point that might affect his pre-programmed opinions

Indeed, their is a denial setting on a lot of people regarding the goings on at the Government owned Post Office. It says a lot when the elected government lacks the courage to hold civil servants to account  and are treated with utter contempt and rather than deal with wrong doing throw more money at it and hope it goes away. A positive will be when it does come out it will show Cable and the other high ranking Lib/Dems who were involved with the sale of Royal Mail and the £2.3 billion Network Transformation program of the Post Office during their spell at BIS as the bumbling incompetents they are and the Tories inability to control useless corrupt Civil servants

 

As for Labour's support for a Post Bank it should make perfect sense to anyone with a Brain and a heart, if only by allowing the financially excluded to access cheaper borrowing from Credit Unions and  a government owned Bank at rates set by the government not the quickquid/Wongo interest rates how can it not be a good thing. The French model generates around £1 billion a year profit run on a very small scale the only losers would be the pay day lenders (and those political parties they sponser). You will struggle to find a country that has a Post Bank that is not successful other Northern European countries also use it to lend money for the purchase of Green energy products like solar panels which again has got to be a positive. You can go further and look at the cost and success of project Merlin and ask would it not have been more beneficial to the taxpayer to use a Post bank for the project. Also for the British taxpayer owned  Post Office a more viable way forward would be to stop subsidising the Bank Of Ireland and Santander and look to do what is best for those who own it.

Guest MattP

Guest MattP

Posted
Posted
8 hours ago, KingGTF said:

When you're ill and can't sleep on a Saturday night, what better thing to do than spend nearly an hour typing a load of nonsense to post on Foxestalk.

 

 

Tbh it would take me to write a full-on essay to address that properly which isn’t feasible. I dare say to extract the answers you want, you might have to be a little less open-ended. What I anticipate you will have unleashed is moody me. It’s worrying times, complacency over the free market argument set in and now we’re losing it and I can’t for the life of me understand why. At least by 2022 I should have reached fluency in German and can move to Switzerland. Failing that Australia or the US will suffice.

 

I actually haven't ever really said I'm minded to believe that zero regulation and an entirely free market would be best. I believe when leicsmac and I had an exchange on the matter, I explicitly said that government has a responsibility to oversee the functioning of the market and that requires regulation (preferably through a regulatory body). For a start, basic law and order is needed which is effectively regulation. I very much do believe the government has a role to play in redistribution as well. I wouldn’t be in a position to benefit from a world class education rn if it wasn’t for government redistribution. The problem, I feel lies when the government overextends it reach when it is not, and can never be properly informed. Government is an economic actor in the same way firms and households are, so why is it acceptable for it to meddle in a markets function and use coercion when other actors cannot. As I've quoted before, Mises was quite correct to say "if one rejects laissez-faire on account of man's fallibility and moral weakness, one must for the same reason reject every kind of government action". For state intervention to work, it needs to more decentralised and targeted at local needs. A FTSE100 company doesn’t centralise its decision making so the state shouldn’t either.

 

I mean it all depends on the research but yes there are plenty of studies out there that look at effects beyond the immediate. In fact, I’m pretty sure there was a recent study that did exactly as you posited, or something similar. But with all due respect, it’s not possible for me to be across all the literature. Though I can be sure, I have rarely seen anything that says competition is bad for consumer welfare, and therefore very little to say nationalised industry is good for the consumer. Being as nationalised industry is just state monopoly.

 

I don’t think best is most efficient, no. Efficiency in economics can take many forms (there’s about 10 that I can think of). I genuinely believe these things will provide the best overall social outcome. Often that also coincides with efficiency. But again, it’s blurring the lines of philosophy and economics. I am interested in an economic policy that promotes personal freedom, but that comes from having to apply philosophy to economics rather than just studying economics.

 

However, there is mathematical proof that the free market is Pareto efficient (first theorem of welfare). But that relies on the assumption of information being shared symmetrically which is highly unlikely (you can argue the price signal does this to a degree but it is mostly true that there is always asymmetric information). The fact this assumption doesn’t hold seems to be the justification for government intervention. But government suffers exactly the same problem because it could not possibly process the information it needs to be able to be informed. It then uses coercion affect things. Fundamentally, for a system to be good for everyone, there cannot be coercive acts because coercion is bad for the person being aggressed.

 

The question is, who do you want to do things. The ‘market’ which is a collection of people co-operating for mutual benefit, or the government which is made up of people who are office-seeking, such that they have to make decisions which give them best chance of election. Although my portrayal there is obviously one which leads you down a certain path, there’s not a right or wrong answer. But who should be in charge of an individuals life?

 

And that ultimately is where my belief comes from. It’s not that my belief in the free market comes from economics. Economics gives me the tools to see how markets work and why things like rent controls/price controls are disastrous but it more confirms my belief in the free market rather than leading to it. For example, I’m concerned to read in the FT today that Corbyn also has a policy of presumed consent for organ donation. Effectively, when you die, your organs become property of the NHS. Now I don’t find that in itself problematic (in terms of organ donation), I find what it symbolises problematic. He’s a man that wants the state to own my body when I die. I want to be able to make my own choices and have personal freedom, I don’t want the state to have rule over my life and I certainly don’t want it to think I am its property. And similarly, I want there to be competition over who provides my electricity so I can choose what is best for me and not have it provided by the state. It doesn’t need to be provided by the state, the state just needs to ensure there is a fair marketplace for me to make that choice, a marketplace which benefits me and the supplier of my electricity.

 

 

Anyway, being as this started from your Guardian piece where I pointed out the problem with the housing market might actually be the fact it is probably the least free market aside from healthcare and possibly education. The planning system in the UK is one of the most restrictive in the world. There is a wealth of empirical data out there which suggests that the key determinant for long-run house prices is the restrictiveness and severity of the planning system. In fact, an LSE study showed that a third of the average house price in England is due to the restrictive planning system. A study from the US suggested that restrictive planning laws around high TFP cities has meant that the economy was between 8 and 13% smaller. Given that London is our major source of productivity and is heavily ‘protected’ by planning laws, I suspect the impact might even be bigger for the UK. It’s basic economics, restricting supply pushes up prices and that it pricing out productive, younger workers from our main source of economic productivity. Imagine what we could do if we reformed the planning system, had a system much like Germany for example, and unleashed the power of the market to build houses. Certainly would be much better than rent controls or the government building houses (if it can get permission) and pushing housebuilders out by selling below market price.

 

Think of an industry like software and how lightly regulated it is and how it is rapidly advancing and delivering all sorts of productivity gains compared to a heavily regulated industry like banking which in truth is a mess.

 

I genuinely find it incredible that people sit there in their Ikea chair having a go at capitalism and the free market using their smartphones and their laptops to tell the world via Twitter before they pack for a week in Marbella. There’s the wonder of what the free market can do for you, there’s the result of an entrepreneur motivated by profit, there’s the result of competition making things more accessible for everyone. 27% of people think airlines should be state owned. Budget airlines have effectively created a situation where people see a foreign holiday as a divine right. It’s bonkers.

 

It’s a worry how naïve people seem to be about the ideas they’re entertaining and it’s worrying how uninformed it is. These people are walking around with a starbucks and an iPhone for god sake. I mean I worry when someone like yourself is at least half switched on and genuinely believes that Gordon Brown ordered QE. It’s just wrong. The MPC asked Alistair Darling if he would extend their framework, discussions were held and he signed t off. It came from the BoE but the chancellor had to sign off on them creating an APF to be able to buy assets for QE. Quite different to Gordon Brown ordering it.

 

 

Right the whole question of economics being a science or not is such wasted energy. As far as I see it, economics is no different to medicine. We don’t really know what causes a recession or why consumers act the way they do sometimes in exactly the same way health folk don’t really fully understand the effects of lifestyle and diet. It seems that one week we’re told to drink red wine, the next we shouldn’t. And the reason for both is because it’s very difficult to actually run the experiment. We’re not able to just create a financial crisis to see how it goes, nor are we able to randomise policy decisions to observe the effects (although this was done in Oregon with state health insurance which was interesting). You do tend to find a lot of findings are replicated when applied elsewhere. That is more the case where populations are relatively homogenous (say comparing states in the US as opposed to comparing Bolivia with China) because human behaviour can be obstructive. Many believe that means it isn’t a proper science. It will become more of an empirical scientific field as data becomes more available because in that sense its still only in its fledgling years compared to the tradition sciences. I expect it will be able to better inform policy in the future and leave less of it down to ideology and philosophy. Anyway, so be it if it isn’t a real science.

 

 

I would love to see your evidence for repeated failures of deregulation. I’d be careful saying the financial crisis because I expect a damned good explanation (which I suspect you won’t have). I once asked that question of Alf and he never responded.

I don't want you to stop posting but you shouldn't be wasting your time here.

 

You are the first poster I've seen in ten years who is far too intelligent for this place. 

fuchsntf

fuchsntf

Posted
Posted
1 hour ago, MattP said:

I don't want you to stop posting but you shouldn't be wasting your time here.

 

You are the first poster I've seen in ten years who is far too intelligent for this place. 

I am too humble, I just pretend to be stupid, so not to embarrass the the foxestalk masses and status quo..:sleep:

  • Like 1
Lionator

Lionator

Posted
Posted
1 hour ago, katieakita said:

what happened?

 

Same as the election really, stuttering, stumbling and running around questions. I should rephrase that she's putting her own nails in her coffin.

  • Like 1
leicsmac

leicsmac

Posted
Posted
12 hours ago, KingGTF said:

Right the whole question of economics being a science or not is such wasted energy. As far as I see it, economics is no different to medicine. We don’t really know what causes a recession or why consumers act the way they do sometimes in exactly the same way health folk don’t really fully understand the effects of lifestyle and diet. It seems that one week we’re told to drink red wine, the next we shouldn’t. And the reason for both is because it’s very difficult to actually run the experiment. We’re not able to just create a financial crisis to see how it goes, nor are we able to randomise policy decisions to observe the effects (although this was done in Oregon with state health insurance which was interesting). You do tend to find a lot of findings are replicated when applied elsewhere. That is more the case where populations are relatively homogenous (say comparing states in the US as opposed to comparing Bolivia with China) because human behaviour can be obstructive. Many believe that means it isn’t a proper science. It will become more of an empirical scientific field as data becomes more available because in that sense its still only in its fledgling years compared to the tradition sciences. I expect it will be able to better inform policy in the future and leave less of it down to ideology and philosophy. Anyway, so be it if it isn’t a real science.

 

1

That is a very interesting analogy, and I can see where you're coming from. You might posit that that medicine is a study of the human body at a fundamental level, while economics is a study of a facet - just one facet, however - of human behaviour and social interaction. Both have effects that, I believe, while well understood and known about, involve a heavy element of luck - and we don't really know how much of a factor that is because as you say it is very difficult to source long-term reliable empirical data. There do seem to be some similarities.

 

I had this discussion with Sampson earlier in the thread about this, and I don't remember if I'd discussed it before with you, so if you'd humour me because you're very knowledgable on the topic - what do you make of the assertion that economics doesn't look long-term enough because it covers human behaviour and that is naturally geared to short-term (within a lifetime) results? Do you think that lassiez-faire is the way to go for humanity in perpetuity? I think we discussed how free-market economics was a microcosm for evolutionary principle (and I think we ended up disagreeing on how closely they mirrored) but I'm not sure we covered this stuff.

Guest

Guest

Posted
Posted
13 hours ago, KingGTF said:

When you're ill and can't sleep on a Saturday night, what better thing to do than spend nearly an hour typing a load of nonsense to post on Foxestalk.

 

 

Tbh it would take me to write a full-on essay to address that properly which isn’t feasible. I dare say to extract the answers you want, you might have to be a little less open-ended. What I anticipate you will have unleashed is moody me. It’s worrying times, complacency over the free market argument set in and now we’re losing it and I can’t for the life of me understand why. At least by 2022 I should have reached fluency in German and can move to Switzerland. Failing that Australia or the US will suffice.

 

I actually haven't ever really said I'm minded to believe that zero regulation and an entirely free market would be best. I believe when leicsmac and I had an exchange on the matter, I explicitly said that government has a responsibility to oversee the functioning of the market and that requires regulation (preferably through a regulatory body). For a start, basic law and order is needed which is effectively regulation. I very much do believe the government has a role to play in redistribution as well. I wouldn’t be in a position to benefit from a world class education rn if it wasn’t for government redistribution. The problem, I feel lies when the government overextends it reach when it is not, and can never be properly informed. Government is an economic actor in the same way firms and households are, so why is it acceptable for it to meddle in a markets function and use coercion when other actors cannot. As I've quoted before, Mises was quite correct to say "if one rejects laissez-faire on account of man's fallibility and moral weakness, one must for the same reason reject every kind of government action". For state intervention to work, it needs to more decentralised and targeted at local needs. A FTSE100 company doesn’t centralise its decision making so the state shouldn’t either.

 

I mean it all depends on the research but yes there are plenty of studies out there that look at effects beyond the immediate. In fact, I’m pretty sure there was a recent study that did exactly as you posited, or something similar. But with all due respect, it’s not possible for me to be across all the literature. Though I can be sure, I have rarely seen anything that says competition is bad for consumer welfare, and therefore very little to say nationalised industry is good for the consumer. Being as nationalised industry is just state monopoly.

 

I don’t think best is most efficient, no. Efficiency in economics can take many forms (there’s about 10 that I can think of). I genuinely believe these things will provide the best overall social outcome. Often that also coincides with efficiency. But again, it’s blurring the lines of philosophy and economics. I am interested in an economic policy that promotes personal freedom, but that comes from having to apply philosophy to economics rather than just studying economics.

 

However, there is mathematical proof that the free market is Pareto efficient (first theorem of welfare). But that relies on the assumption of information being shared symmetrically which is highly unlikely (you can argue the price signal does this to a degree but it is mostly true that there is always asymmetric information). The fact this assumption doesn’t hold seems to be the justification for government intervention. But government suffers exactly the same problem because it could not possibly process the information it needs to be able to be informed. It then uses coercion affect things. Fundamentally, for a system to be good for everyone, there cannot be coercive acts because coercion is bad for the person being aggressed.

 

The question is, who do you want to do things. The ‘market’ which is a collection of people co-operating for mutual benefit, or the government which is made up of people who are office-seeking, such that they have to make decisions which give them best chance of election. Although my portrayal there is obviously one which leads you down a certain path, there’s not a right or wrong answer. But who should be in charge of an individuals life?

 

And that ultimately is where my belief comes from. It’s not that my belief in the free market comes from economics. Economics gives me the tools to see how markets work and why things like rent controls/price controls are disastrous but it more confirms my belief in the free market rather than leading to it. For example, I’m concerned to read in the FT today that Corbyn also has a policy of presumed consent for organ donation. Effectively, when you die, your organs become property of the NHS. Now I don’t find that in itself problematic (in terms of organ donation), I find what it symbolises problematic. He’s a man that wants the state to own my body when I die. I want to be able to make my own choices and have personal freedom, I don’t want the state to have rule over my life and I certainly don’t want it to think I am its property. And similarly, I want there to be competition over who provides my electricity so I can choose what is best for me and not have it provided by the state. It doesn’t need to be provided by the state, the state just needs to ensure there is a fair marketplace for me to make that choice, a marketplace which benefits me and the supplier of my electricity.

 

 

Anyway, being as this started from your Guardian piece where I pointed out the problem with the housing market might actually be the fact it is probably the least free market aside from healthcare and possibly education. The planning system in the UK is one of the most restrictive in the world. There is a wealth of empirical data out there which suggests that the key determinant for long-run house prices is the restrictiveness and severity of the planning system. In fact, an LSE study showed that a third of the average house price in England is due to the restrictive planning system. A study from the US suggested that restrictive planning laws around high TFP cities has meant that the economy was between 8 and 13% smaller. Given that London is our major source of productivity and is heavily ‘protected’ by planning laws, I suspect the impact might even be bigger for the UK. It’s basic economics, restricting supply pushes up prices and that it pricing out productive, younger workers from our main source of economic productivity. Imagine what we could do if we reformed the planning system, had a system much like Germany for example, and unleashed the power of the market to build houses. Certainly would be much better than rent controls or the government building houses (if it can get permission) and pushing housebuilders out by selling below market price.

 

Think of an industry like software and how lightly regulated it is and how it is rapidly advancing and delivering all sorts of productivity gains compared to a heavily regulated industry like banking which in truth is a mess.

 

I genuinely find it incredible that people sit there in their Ikea chair having a go at capitalism and the free market using their smartphones and their laptops to tell the world via Twitter before they pack for a week in Marbella. There’s the wonder of what the free market can do for you, there’s the result of an entrepreneur motivated by profit, there’s the result of competition making things more accessible for everyone. 27% of people think airlines should be state owned. Budget airlines have effectively created a situation where people see a foreign holiday as a divine right. It’s bonkers.

 

It’s a worry how naïve people seem to be about the ideas they’re entertaining and it’s worrying how uninformed it is. These people are walking around with a starbucks and an iPhone for god sake. I mean I worry when someone like yourself is at least half switched on and genuinely believes that Gordon Brown ordered QE. It’s just wrong. The MPC asked Alistair Darling if he would extend their framework, discussions were held and he signed t off. It came from the BoE but the chancellor had to sign off on them creating an APF to be able to buy assets for QE. Quite different to Gordon Brown ordering it.

 

 

Right the whole question of economics being a science or not is such wasted energy. As far as I see it, economics is no different to medicine. We don’t really know what causes a recession or why consumers act the way they do sometimes in exactly the same way health folk don’t really fully understand the effects of lifestyle and diet. It seems that one week we’re told to drink red wine, the next we shouldn’t. And the reason for both is because it’s very difficult to actually run the experiment. We’re not able to just create a financial crisis to see how it goes, nor are we able to randomise policy decisions to observe the effects (although this was done in Oregon with state health insurance which was interesting). You do tend to find a lot of findings are replicated when applied elsewhere. That is more the case where populations are relatively homogenous (say comparing states in the US as opposed to comparing Bolivia with China) because human behaviour can be obstructive. Many believe that means it isn’t a proper science. It will become more of an empirical scientific field as data becomes more available because in that sense its still only in its fledgling years compared to the tradition sciences. I expect it will be able to better inform policy in the future and leave less of it down to ideology and philosophy. Anyway, so be it if it isn’t a real science.

 

 

I would love to see your evidence for repeated failures of deregulation. I’d be careful saying the financial crisis because I expect a damned good explanation (which I suspect you won’t have). I once asked that question of Alf and he never responded.

I will respond to this when I get some time either later or tomorrow King. It seems there are two main points id take forward to discuss from this - people being uninformed regarding the trhe nature of economics (and political decisions) and how far economic theories can be tested. 

SpacedX

SpacedX

Posted
Posted (edited)
On 01/10/2017 at 01:52, KingGTF said:

When you're ill and can't sleep on a Saturday night, what better thing to do than spend nearly an hour typing a load of nonsense to post on Foxestalk.

 

 

Tbh it would take me to write a full-on essay to address that properly which isn’t feasible. I dare say to extract the answers you want, you might have to be a little less open-ended. What I anticipate you will have unleashed is moody me. It’s worrying times, complacency over the free market argument set in and now we’re losing it and I can’t for the life of me understand why. At least by 2022 I should have reached fluency in German and can move to Switzerland. Failing that Australia or the US will suffice.

 

I actually haven't ever really said I'm minded to believe that zero regulation and an entirely free market would be best. I believe when leicsmac and I had an exchange on the matter, I explicitly said that government has a responsibility to oversee the functioning of the market and that requires regulation (preferably through a regulatory body). For a start, basic law and order is needed which is effectively regulation. I very much do believe the government has a role to play in redistribution as well. I wouldn’t be in a position to benefit from a world class education rn if it wasn’t for government redistribution. The problem, I feel lies when the government overextends it reach when it is not, and can never be properly informed. Government is an economic actor in the same way firms and households are, so why is it acceptable for it to meddle in a markets function and use coercion when other actors cannot. As I've quoted before, Mises was quite correct to say "if one rejects laissez-faire on account of man's fallibility and moral weakness, one must for the same reason reject every kind of government action". For state intervention to work, it needs to more decentralised and targeted at local needs. A FTSE100 company doesn’t centralise its decision making so the state shouldn’t either.

 

I mean it all depends on the research but yes there are plenty of studies out there that look at effects beyond the immediate. In fact, I’m pretty sure there was a recent study that did exactly as you posited, or something similar. But with all due respect, it’s not possible for me to be across all the literature. Though I can be sure, I have rarely seen anything that says competition is bad for consumer welfare, and therefore very little to say nationalised industry is good for the consumer. Being as nationalised industry is just state monopoly.

 

I don’t think best is most efficient, no. Efficiency in economics can take many forms (there’s about 10 that I can think of). I genuinely believe these things will provide the best overall social outcome. Often that also coincides with efficiency. But again, it’s blurring the lines of philosophy and economics. I am interested in an economic policy that promotes personal freedom, but that comes from having to apply philosophy to economics rather than just studying economics.

 

However, there is mathematical proof that the free market is Pareto efficient (first theorem of welfare). But that relies on the assumption of information being shared symmetrically which is highly unlikely (you can argue the price signal does this to a degree but it is mostly true that there is always asymmetric information). The fact this assumption doesn’t hold seems to be the justification for government intervention. But government suffers exactly the same problem because it could not possibly process the information it needs to be able to be informed. It then uses coercion affect things. Fundamentally, for a system to be good for everyone, there cannot be coercive acts because coercion is bad for the person being aggressed.

 

The question is, who do you want to do things. The ‘market’ which is a collection of people co-operating for mutual benefit, or the government which is made up of people who are office-seeking, such that they have to make decisions which give them best chance of election. Although my portrayal there is obviously one which leads you down a certain path, there’s not a right or wrong answer. But who should be in charge of an individuals life?

 

And that ultimately is where my belief comes from. It’s not that my belief in the free market comes from economics. Economics gives me the tools to see how markets work and why things like rent controls/price controls are disastrous but it more confirms my belief in the free market rather than leading to it. For example, I’m concerned to read in the FT today that Corbyn also has a policy of presumed consent for organ donation. Effectively, when you die, your organs become property of the NHS. Now I don’t find that in itself problematic (in terms of organ donation), I find what it symbolises problematic. He’s a man that wants the state to own my body when I die. I want to be able to make my own choices and have personal freedom, I don’t want the state to have rule over my life and I certainly don’t want it to think I am its property. And similarly, I want there to be competition over who provides my electricity so I can choose what is best for me and not have it provided by the state. It doesn’t need to be provided by the state, the state just needs to ensure there is a fair marketplace for me to make that choice, a marketplace which benefits me and the supplier of my electricity.

 

 

Anyway, being as this started from your Guardian piece where I pointed out the problem with the housing market might actually be the fact it is probably the least free market aside from healthcare and possibly education. The planning system in the UK is one of the most restrictive in the world. There is a wealth of empirical data out there which suggests that the key determinant for long-run house prices is the restrictiveness and severity of the planning system. In fact, an LSE study showed that a third of the average house price in England is due to the restrictive planning system. A study from the US suggested that restrictive planning laws around high TFP cities has meant that the economy was between 8 and 13% smaller. Given that London is our major source of productivity and is heavily ‘protected’ by planning laws, I suspect the impact might even be bigger for the UK. It’s basic economics, restricting supply pushes up prices and that it pricing out productive, younger workers from our main source of economic productivity. Imagine what we could do if we reformed the planning system, had a system much like Germany for example, and unleashed the power of the market to build houses. Certainly would be much better than rent controls or the government building houses (if it can get permission) and pushing housebuilders out by selling below market price.

 

Think of an industry like software and how lightly regulated it is and how it is rapidly advancing and delivering all sorts of productivity gains compared to a heavily regulated industry like banking which in truth is a mess.

 

I genuinely find it incredible that people sit there in their Ikea chair having a go at capitalism and the free market using their smartphones and their laptops to tell the world via Twitter before they pack for a week in Marbella. There’s the wonder of what the free market can do for you, there’s the result of an entrepreneur motivated by profit, there’s the result of competition making things more accessible for everyone. 27% of people think airlines should be state owned. Budget airlines have effectively created a situation where people see a foreign holiday as a divine right. It’s bonkers.

 

It’s a worry how naïve people seem to be about the ideas they’re entertaining and it’s worrying how uninformed it is. These people are walking around with a starbucks and an iPhone for god sake. I mean I worry when someone like yourself is at least half switched on and genuinely believes that Gordon Brown ordered QE. It’s just wrong. The MPC asked Alistair Darling if he would extend their framework, discussions were held and he signed t off. It came from the BoE but the chancellor had to sign off on them creating an APF to be able to buy assets for QE. Quite different to Gordon Brown ordering it.

 

 

Right the whole question of economics being a science or not is such wasted energy. As far as I see it, economics is no different to medicine. We don’t really know what causes a recession or why consumers act the way they do sometimes in exactly the same way health folk don’t really fully understand the effects of lifestyle and diet. It seems that one week we’re told to drink red wine, the next we shouldn’t. And the reason for both is because it’s very difficult to actually run the experiment. We’re not able to just create a financial crisis to see how it goes, nor are we able to randomise policy decisions to observe the effects (although this was done in Oregon with state health insurance which was interesting). You do tend to find a lot of findings are replicated when applied elsewhere. That is more the case where populations are relatively homogenous (say comparing states in the US as opposed to comparing Bolivia with China) because human behaviour can be obstructive. Many believe that means it isn’t a proper science. It will become more of an empirical scientific field as data becomes more available because in that sense its still only in its fledgling years compared to the tradition sciences. I expect it will be able to better inform policy in the future and leave less of it down to ideology and philosophy. Anyway, so be it if it isn’t a real science.

 

 

I would love to see your evidence for repeated failures of deregulation. I’d be careful saying the financial crisis because I expect a damned good explanation (which I suspect you won’t have). I once asked that question of Alf and he never responded.

Thank you for sharing your insight in such an articulate and engaging post - greatly enjoyed reading that several times over.

 

My own concern is not so much Corbyn, but the substantially more intelligent and dangerous Shadow Chancellor who makes no secret of his inspiration. When asked to name the most significant influences on his political ethos, cites the fundamental Marxist writers of "Marx, Lenin and Trotsky". This makes McDonnell a rift in the continuum of Labour history where the party chancellors and shadow chancellors have been many things - but they have not been out and out Marxists. Dennis Healey was a Marxist in his youth although that what not uncommon on late 1930s academia with fascism on the rise. Gordon Brown for all his flaws was still an advocate of his Fife kinsman Adam Smith and he embraced many of the fundamentals of the free market system whilst disagreeing with opponents on how the proceeds should be distributed and spent. One can challenge the wisdom of the remedy that was applied to the 2008 crisis but his action was to preserve the market system as opposed to usurping it with a socialist doctrine. The fundamental failure of the latter consistently throughout history is that it destroys the basic means of free exchange and institutes a tyranny to suppress those that object.

 

Last week during a Momentum fringe event at the Labour Party Conference, amongst other fringe entryists such as The Alliance for Workers Liberty, McDonnell hailed an organisation called Class Wargames - ("training the militants of the cybernetic communist revolution to come") for its work in planning for the possibility of an economic crisis in the event of a labour government coming to power. Also on the panel was Corbyn's guru Paul Mason who warned comrades to get ready for a tough fight with the establishment - "it may be like Stalingrad" he said. All bellicose rhetoric no doubt, but polling is indicating the way in which capitalism and the markets are discredited and any imperfections are perceived as the need for greater state control and the punishing of wealth. For the advocates of free market capitalism, responding to this tectonic shift in opinion that has been building in pressure since the financial crisis is extremely challenging in the face of consistent failure of the pro-market camp to make their case and the current crisis of values that confronts the Tories. Very little seems to work when warning rightly disaffected voters too young to understand or remember the economic crises of the 1970s and now in real time, the Corbybista disaster that is Venezuela is dismissed as a mainstream political meme designed to attack Corbynism. I also fail to understand how this generation that rightly fought for the preservation of a unified Europe can support a political leader - and acolyte of Tony Benn - who was utterly opposed to the EU and cravenly cowered away in spite of the campaign of lies perpetrated by the Leave camp. We tend to use Trotskyite in the perjorative sense a brief comparison of Trotsky’s outlook with Corbyn’s does more than expose the hollowness of Corbyn’s alleged radicalism — it exposes the extent to which the entire left has lost the plot in recent decades. I am ceaselessly reminded of Maynard Keynes’s remark "Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back." It's a shame that Gramsci is so much harder to pronounce than Trotsky. 

 

This leaves the Tories completely screwed as Jeremy all but opined in his speech last week. He's right. This isn't a temporary blip - this huge swing marks an exponential crisis for the party not seen for two and a half decades when they were torn asunder by ratification of the Maastricht treaty under Major. Conservative motives are judged as disreputable, evil even and far from the class divisions of the past, the battle lines on the hustings will be defined by generational demographics.  

 

The defining tenet of the communist manifesto is encapsulated in the following statement from Marx himself..

 

"The theory of communism, may be summed up in the single sentence as the abolition of property"

 

Marx and Engels published their revolutionary treatise in London in February 1848, coinciding with popular uprisings against the elites began to spread across the continent. Should we doubt that McDonnell or any of his supporters given the chance would when confronted by crisis hesitate to the effect erosion of private property and holdings, institute compulsory socialisation of assets, raise taxation and enforce state regulation? - you tell me, but you can be sure that this would be the moment that the likes of John McDonnell and his ilk have lived their entire life for. 

Edited by Line-X
  • Like 3
Sampson

Sampson

Posted
Posted (edited)
10 hours ago, Line-X said:

Thank you for sharing your insight in such an articulate and engaging post - greatly enjoyed reading that several times over.

 

My own concern is not so much Corbyn, but the substantially more intelligent and dangerous Shadow Chancellor who makes no secret of his inspiration. When asked to name the most significant influences on his political ethos, cites the fundamental Marxist writers of "Marx, Lenin and Trotsky". This makes McDonnell a rift in the continuum of Labour history where the party chancellors and shadow chancellors have been many things - but they have not been out and out Marxists. Dennis Healey was a Marxist in his youth although that what not uncommon on late 1930s academia with fascism on the rise. Gordon Brown for all his flaws was still an advocate of his Fife kinsman Adam Smith and he embraced many of the fundamentals of the free market system whilst disagreeing with opponents on how the proceeds should be distributed and spent. One can challenge the wisdom of the remedy that was applied to the 2008 crisis but his action was to preserve the market system as opposed to usurping it with a socialist doctrine. The fundamental failure of the latter consistently throughout history is that it destroys the basic means of free exchange and institutes a tyranny to suppress those that object.

 

Last week during a Momentum fringe event at the Labour Party Conference, amongst other fringe entryists such as The Alliance for Workers Liberty, McDonnell hailed an organisation called Class Wargames - ("training the militants of the cybernetic communist revolution to come") for its work in planning for the possibility of an economic crisis in the event of a labour government coming to power. Also on the panel was Corbyn's guru Paul Mason who warned comrades to get ready for a tough fight with the establishment - "it may be like Stalingrad" he said. All bellicose rhetoric no doubt, but polling is indicating the way in which capitalism and the markets are discredited and any imperfections are perceived as the need for greater state control and the punishing of wealth. For the advocates of free market capitalism, responding to this tectonic shift in opinion that has been building in pressure since the financial crisis is extremely challenging in the face of consistent failure of the pro-market camp to make their case and the current crisis of values that confronts the Tories. Very little seems to work when warning rightly disaffected voters too young to understand or remember the economic crises of the 1970s and now in real time, the Corbybista disaster that is Venezuela is dismissed as a mainstream political meme designed to attack Corbynism. I also fail to understand how this generation that rightly fought for the preservation of a unified Europe can support a political leader - and acolyte of Tony Benn - who was utterly opposed to the EU and cravenly cowered away in spite of the campaign of lies perpetrated by the Remain camp. We tend to use Trotskyite in the perjorative sense a brief comparison of Trotsky’s outlook with Corbyn’s does more than expose the hollowness of Corbyn’s alleged radicalism — it exposes the extent to which the entire left has lost the plot in recent decades. I am ceaselessly reminded of Maynard Keynes’s remark "Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back." It's a shame that Gramsci is so much harder to pronounce than Trotsky. 

 

This leaves the Tories completely screwed as Jeremy all but opined in his speech last week. He's right. This isn't a temporary blip - this huge swing marks an exponential crisis for the party not seen for two and a half decades when they were torn asunder by ratification of the Maastricht treaty under Major. Conservative motives are judged as disreputable, evil even and far from the class divisions of the past, the battle lines on the hustings will be defined by generational demographics.  

 

The defining tenet of the communist manifesto is encapsulated in the following statement from Marx himself..

 

"The theory of communism, may be summed up in the single sentence as the abolition of property"

 

Marx and Engels published their revolutionary treatise in London in February 1848, coinciding with popular uprisings against the elites began to spread across the continent. Should we doubt that McDonnell or any of his supporters given the chance would when confronted by crisis hesitate to the effect erosion of private property and holdings, institute compulsory socialisation of assets, raise taxation and enforce state regulation? - you tell me, but you can be sure that this would be the moment that the likes of John McDonnell and his ilk have lived their entire life for. 

On 01/10/2017 at 01:52, KingGTF said:

When you're ill and can't sleep on a Saturday night, what better thing to do than spend nearly an hour typing a load of nonsense to post on Foxestalk.

 

 

Tbh it would take me to write a full-on essay to address that properly which isn’t feasible. I dare say to extract the answers you want, you might have to be a little less open-ended. What I anticipate you will have unleashed is moody me. It’s worrying times, complacency over the free market argument set in and now we’re losing it and I can’t for the life of me understand why. At least by 2022 I should have reached fluency in German and can move to Switzerland. Failing that Australia or the US will suffice.

 

I actually haven't ever really said I'm minded to believe that zero regulation and an entirely free market would be best. I believe when leicsmac and I had an exchange on the matter, I explicitly said that government has a responsibility to oversee the functioning of the market and that requires regulation (preferably through a regulatory body). For a start, basic law and order is needed which is effectively regulation. I very much do believe the government has a role to play in redistribution as well. I wouldn’t be in a position to benefit from a world class education rn if it wasn’t for government redistribution. The problem, I feel lies when the government overextends it reach when it is not, and can never be properly informed. Government is an economic actor in the same way firms and households are, so why is it acceptable for it to meddle in a markets function and use coercion when other actors cannot. As I've quoted before, Mises was quite correct to say "if one rejects laissez-faire on account of man's fallibility and moral weakness, one must for the same reason reject every kind of government action". For state intervention to work, it needs to more decentralised and targeted at local needs. A FTSE100 company doesn’t centralise its decision making so the state shouldn’t either.

 

I mean it all depends on the research but yes there are plenty of studies out there that look at effects beyond the immediate. In fact, I’m pretty sure there was a recent study that did exactly as you posited, or something similar. But with all due respect, it’s not possible for me to be across all the literature. Though I can be sure, I have rarely seen anything that says competition is bad for consumer welfare, and therefore very little to say nationalised industry is good for the consumer. Being as nationalised industry is just state monopoly.

 

I don’t think best is most efficient, no. Efficiency in economics can take many forms (there’s about 10 that I can think of). I genuinely believe these things will provide the best overall social outcome. Often that also coincides with efficiency. But again, it’s blurring the lines of philosophy and economics. I am interested in an economic policy that promotes personal freedom, but that comes from having to apply philosophy to economics rather than just studying economics.

 

However, there is mathematical proof that the free market is Pareto efficient (first theorem of welfare). But that relies on the assumption of information being shared symmetrically which is highly unlikely (you can argue the price signal does this to a degree but it is mostly true that there is always asymmetric information). The fact this assumption doesn’t hold seems to be the justification for government intervention. But government suffers exactly the same problem because it could not possibly process the information it needs to be able to be informed. It then uses coercion affect things. Fundamentally, for a system to be good for everyone, there cannot be coercive acts because coercion is bad for the person being aggressed.

 

The question is, who do you want to do things. The ‘market’ which is a collection of people co-operating for mutual benefit, or the government which is made up of people who are office-seeking, such that they have to make decisions which give them best chance of election. Although my portrayal there is obviously one which leads you down a certain path, there’s not a right or wrong answer. But who should be in charge of an individuals life?

 

And that ultimately is where my belief comes from. It’s not that my belief in the free market comes from economics. Economics gives me the tools to see how markets work and why things like rent controls/price controls are disastrous but it more confirms my belief in the free market rather than leading to it. For example, I’m concerned to read in the FT today that Corbyn also has a policy of presumed consent for organ donation. Effectively, when you die, your organs become property of the NHS. Now I don’t find that in itself problematic (in terms of organ donation), I find what it symbolises problematic. He’s a man that wants the state to own my body when I die. I want to be able to make my own choices and have personal freedom, I don’t want the state to have rule over my life and I certainly don’t want it to think I am its property. And similarly, I want there to be competition over who provides my electricity so I can choose what is best for me and not have it provided by the state. It doesn’t need to be provided by the state, the state just needs to ensure there is a fair marketplace for me to make that choice, a marketplace which benefits me and the supplier of my electricity.

 

 

Anyway, being as this started from your Guardian piece where I pointed out the problem with the housing market might actually be the fact it is probably the least free market aside from healthcare and possibly education. The planning system in the UK is one of the most restrictive in the world. There is a wealth of empirical data out there which suggests that the key determinant for long-run house prices is the restrictiveness and severity of the planning system. In fact, an LSE study showed that a third of the average house price in England is due to the restrictive planning system. A study from the US suggested that restrictive planning laws around high TFP cities has meant that the economy was between 8 and 13% smaller. Given that London is our major source of productivity and is heavily ‘protected’ by planning laws, I suspect the impact might even be bigger for the UK. It’s basic economics, restricting supply pushes up prices and that it pricing out productive, younger workers from our main source of economic productivity. Imagine what we could do if we reformed the planning system, had a system much like Germany for example, and unleashed the power of the market to build houses. Certainly would be much better than rent controls or the government building houses (if it can get permission) and pushing housebuilders out by selling below market price.

 

Think of an industry like software and how lightly regulated it is and how it is rapidly advancing and delivering all sorts of productivity gains compared to a heavily regulated industry like banking which in truth is a mess.

 

I genuinely find it incredible that people sit there in their Ikea chair having a go at capitalism and the free market using their smartphones and their laptops to tell the world via Twitter before they pack for a week in Marbella. There’s the wonder of what the free market can do for you, there’s the result of an entrepreneur motivated by profit, there’s the result of competition making things more accessible for everyone. 27% of people think airlines should be state owned. Budget airlines have effectively created a situation where people see a foreign holiday as a divine right. It’s bonkers.

 

It’s a worry how naïve people seem to be about the ideas they’re entertaining and it’s worrying how uninformed it is. These people are walking around with a starbucks and an iPhone for god sake. I mean I worry when someone like yourself is at least half switched on and genuinely believes that Gordon Brown ordered QE. It’s just wrong. The MPC asked Alistair Darling if he would extend their framework, discussions were held and he signed t off. It came from the BoE but the chancellor had to sign off on them creating an APF to be able to buy assets for QE. Quite different to Gordon Brown ordering it.

 

 

Right the whole question of economics being a science or not is such wasted energy. As far as I see it, economics is no different to medicine. We don’t really know what causes a recession or why consumers act the way they do sometimes in exactly the same way health folk don’t really fully understand the effects of lifestyle and diet. It seems that one week we’re told to drink red wine, the next we shouldn’t. And the reason for both is because it’s very difficult to actually run the experiment. We’re not able to just create a financial crisis to see how it goes, nor are we able to randomise policy decisions to observe the effects (although this was done in Oregon with state health insurance which was interesting). You do tend to find a lot of findings are replicated when applied elsewhere. That is more the case where populations are relatively homogenous (say comparing states in the US as opposed to comparing Bolivia with China) because human behaviour can be obstructive. Many believe that means it isn’t a proper science. It will become more of an empirical scientific field as data becomes more available because in that sense its still only in its fledgling years compared to the tradition sciences. I expect it will be able to better inform policy in the future and leave less of it down to ideology and philosophy. Anyway, so be it if it isn’t a real science.

 

 

I would love to see your evidence for repeated failures of deregulation. I’d be careful saying the financial crisis because I expect a damned good explanation (which I suspect you won’t have). I once asked that question of Alf and he never responded.

10 hours ago, Line-X said:

 

Can only echo these 2 posts. especially KingGTF who put it much more eruditely than I ever could.

 

I'd also add another one of depressing tactics has been Bernie Sanders trying to bizarrely claim that small, oil-rich and natural resource-rich free-market capitalist countries with higher tax rates like the Scandanvian countries are Socialist countries - and the age old problem of Socialists picking and choosing their definition of Socialism to things which have nothing to do with the common ownership of industry (be it through state control or syndicate control) and the old "that's Socialism" to a non-Socialist system like the Nordic model and "that's not true Socialism" when a genuine Socialist country like Venezuela capitulates - hasn't helped in getting to this position where Socialism is being promoted as any kind of even comparable replacement for free-market Capitalism which I also cannot understand either.

 

The reason why the current Labour government scare me far more than any other I can remember - is that it's the first time in my voting lifetime I can remember where either a hard-Right or hard-Left populist party actually have a very good chance of getting power.
 

It reminds me of that old Simpsons' episode with the self-help guru Brad Goodman who gets famous just by saying a lot of meaningless niceties which sound profound and Lisa says exactly how I feel about Corbyn - "he's just peddling a bunch of easy answers".

 

Look at some of the ideas Corbyn has talked about in the past and present - all easy answers, but all Economic quackery:

 

Money printing

Rent controls

Price fixing

A fast minimum wage hike to £10 in 3 years

 

It's the easiest thing in the world to say taxing the rich and giving to the poor will pull people out of poverty or that increasing the minimum wage will pull people out of poverty or that rent controls will push rent prices down or price fixing will solve inflation - but this is an incredibly simplistic view of Economics and goes against all the basic principals of Economics and the basic law of Supply and Demand which governs human interaction -

 

Printing money just causes people to spend a lot more which causes all businesses to have to put their prices up rapidly to deal with the increased demand which they cannot keep up with which leads to hyper inflation as people's savings become more and more worthless people also end up spending incredibly quickly as prices are rising which causes the Economy to spiral into hyper-inflation - and nearly all the worst most catastrophic examples of hyper-inflation in history (The Weimar Republic, Greece 1944, Hungary 1946, Yugoslavia 1994, Zimbabwe 2008) - all have money printing  playing a major role in them.

Rent controls - Simultaneously increase demand in housing and reduce the amount of Landlords who want to supply as they cannot make money of it - it then also reduces the amount in which Landlords can put back into renovation, construction and fixing damages of housing reducing the number of houses being built and the reducing the quality of these houses as Landlords cannot afford to be responsive to tennents needs - you have to allow Landlords to make a living no matter how "greedy" or manipulative they seem - it's how we get more and better housing.

 

Price controls - Price ceilings and capping prices causes hikes in demands and lower supply (as more people can afford it but less people can make money off it) - and as there's no way for businesses to put prices up to compensate for the added demand and lack of supply it just causes a shortage and no way for the market to correct for that shortage. - and a price floor and state set minimum prices not allowing for the market to find a natural supply-and-demand equilibrium price causes producers an incentive to produce more increasing supply but consumers would go and buy substitutes instead causing spending in unsellable markets and many businesses having to cut jobs as a result (as they cannot compensate by cutting prices to sell more because of the artificial government intervention).

 

Btw rent controls and price fixing are some of the most unanimously agreed on principals in Economics - that rent controls and price fixing are a horrific ideas for the long-term health of the housing market or Economy and these are exactly the kind of principals that Chavez was obsessed with which have just caused such huge problems in Venezuela too.

Minimum wage - How do you honestly think businesses will respond to the higher outgoings needed by having to pay more to employees and the greater spending in the economy caused by this therefore leading to increased demand meaning they have to hire more people to create greater supply as a result of this demand? This is just going to lead to inflation which makes the minimum wage rise worthless and businesses having to cut jobs as a result - there's a reason minimum wage generally goes up at a steady rate as a result of inflation and not the other way around -I get that people are frustrated at the decreasing of real spending during austerity but a sudden swing the other way is absolutely not the answer.

 

And all this is expected to be paid by a "small" rise in taxes by big businesses which won't cause any of them to have to cut jobs or put up prices (leading to inflation) to deal with this? People cannot honestly be that naive.

 

It reminds me of that 90 day price and wage freeze which Richard Nixon got elected on the back of campaigning for because it's an easy answer which appeals to people's hearts intuitively but is incredibly naive Economics and turned out to be a disaster.

 

Farage and UKIP scared me, but I didn't think they'd ever had any chance of getting into realistic power- even though I was an avid Remainer and thought te referendum fiasco was ridiculous, but this current Labour government is a different beast entirely.

 

But as, the reason they are scary is because you can see the shifting opinion and we know MacDonnell and Abbott are self-described defenders of Marx, Lenin, Trotsky and Mao and you have to be pretty blind not to see Corbyn comes from the same place as these and the likes of Tony Benn etc.- it's the shift that scares people, the idea that this is the start to a shift to the hard Left and the slow drift away from free-markets and towards Socialism and Governments monopolies. Free-market Capitalism has proven to be by far and away the best system humans have ever designed at pulling people out of poverty and making people far free-er individuals, given far greater individual liberties - because it's not naive enough to think poverty is just about the raw numbers in front of you and how much money you have and instead promotes innovative ideas which society and individuals themselves decide are worthwhile through competition and the laws of supply and demand - which have included far better agricultural machines and systems, fast and efficient travel and vehicles, much cheaper food in relation to hours of labour work.

 

All Socialism does is lead to mass poverty - it screws with the laws of Supply and Demand in the way that things which people need do not get made on the scale on which they need them - 100 years on and we've still yet to a see a Socialist regime which wasn't either 1. An Economic disaster which led to mass poverty and the death of millions or 2. Only held together by brutal dictatorships who forced people to do things against their wishes for "the Economic good" of the country - and most times it's both.

And please, stop with this "it's just a few industries" "it's not really Socialism, it's just Nordic Capitalism" - because to anyone who's been paying attention to what Corbyn, Abbott and MacDonnell have been saying, it's clear where their actual influences lie - and even if they don't achieve it themselves it's the way they're shifting the argument in that favour for future generations. THAT'S what's scary about it - that's why it's just as scary as Donald Trump or Nigel Farage on the populist hard-Right and while many Corbyn supporters can (righty) see how Trump is dangerous and what his victory means for the belittling of the American democracy, what's scary is how they cannot see that Corbyn is doing the same thing just on the other side of the spectrum - he's a hard-Left populist ideologue who's peddling a bunch of easy answers.

It doesn't help that Theresa May is an incompetent robotic leader who can't seem to get anything right in a very Gordon Brown kind of way, but Corbyn absolutely isn't the answer and he absolutely isn't "the lesser of two evils" - he's a FAR bigger evil much like Trump was over Hilary. And I hope we aren't in the same situation whereas May's incompetence doesn't match Hilary's incompetence where the incompetent but clearly lesser evil ends up losing to the frightening, charismatic ideologue.

I understand it makes intuitive sense and appeals to people's hearts which is why Socialism and the hard-Left is such a less obvious evil than facisicm and the hard Right, but make no mistake, it's just as evil and just as devastating to the poor and average people of the country - this has been shown over and over again throughout the last century and we've spent most of the last century trying to tackle Government intervention and state monopolies and it's frightening that's we're seeing the beginning and the foundations of a comeback here - that's what's frightening more than anything. Things like price fixing, mass wealth distribution and monopoly of unnecessary government markets do not pull people out of poverty - they just keep everyone in poverty and inhibit the wealth creation of a nation and the innovation which makes things which do make basic amenities easier and cheaper to access. 

Edited by Sampson
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Sampson

Sampson

Posted
Posted (edited)
On 27/09/2017 at 21:48, The Doctor said:

Tbf to FoxUlike, the point behind it is less strawman of the need for wealth inequality, and more a point of does it need to be this extreme - and the answer is no, it doesn't. There's a whole world in between the existence of wealth inequality (an inevitability of private enterprise) and what we have now, rampant wealth inequality meaning most are stuck in a system that consistently fails them. That chasm is what people who talk of solving wealth inequality look at in the main. Very few want to completely eradicate any pay disparity, but they look at a sliding scale where those at the top don't continue to grow faster than those at the bottom. Take the financial year 14/15 - £44bn was spent on family benefits, tax credits and income support for those in work, from a total government expenditure of £737.14bn, i.e. 5.96% of all government spending was on welfare for working families. At last count we're spending 42% of GDP, which would make that welfare spending on working families equivalent to 2.5% of GDP. In other words, NATO expects us to spend less on defence than the vaunted wealth creators expect us to spend subsidising their wage budget. Wealth inequality may be a necessarily evil, but the disparity doesn't have to be this extreme unless you completely missed the point of the film Wall Street and genuinely believe that greed is good spiel.

 

Spending calculations: http://visual.ons.gov.uk/welfare-spending/

But again, you're not taking into account what happens after government intervention and wealth distribution.

 

No one thinks poverty and having to subsidise working families is fun, but the more you tax the mega-rich companies, the more they have to put up prices which leads to inflation making people's money worth less anyway and people less being able to afford food (because again, it's not just about looking at the simple figures we got in) - the smaller companies who they buy or produce from often getting a big brunt too - the more the big companiles in whatever sector either have to deal with increases in demand due to more spending in the economy while simultaneously having to deal with higher taxes is a double hit - which both naturally lead to price increases and inflation.

It's difficult getting the perfect balance right - absolutely it is. But more government intervention in markets in this way inevitably leads to failure - because the laws of supply and demand offer truer and more natural pricing than government intervention ever can - again, that;s not to say markets and perfect, but it's so intuitive to say that there are people in poverty, - we have to tax the rich to give them more money is absolutely intuitive, I get that - but you also have to understand why it can be so, so dangerous to the real value of the average person's wage and why it can inhibit innovation which gets round these barriers and that's why free markets have shown historically to be far better at pulling people out of poverty than government interventioned ones and why heavy tax burdens on the rich can be catastrophic to the poor people of a nation even though they may be getting more money they can easily end up being far less wealthy and cause far more poverty.

 

On 27/09/2017 at 15:30, leicsmac said:

I haven't always lived in the US (only for the last few months, actually)...so I am acutely aware of what the political compass is like in other parts of the world. I suppose you could call Obama centrist, as like you said economically he was very free-market oriented...but socially his administration was very liberal. Would you deny that socially conservative movements around the world aren't in favour of gay marriage and abortion, then?

 

Regarding the rest of what you say here...I'm not sure I'm being clear enough on my point because it appears to have been missed: economics is important now and probably will be for a while yet, but it's by no means the most important factor for humanity long-term. And the reason for that importance - why economies collapsed and the social upheaval that results from them, often resulting in very bad consequences...is simply because we attach critical importance to those systems. It works simply because people believe it does, not because of any inherent quality attached to it. That means that it is, and always will be, subjective; in a way that other fundamental areas of science are not. Like I said, long term...scientific advancement and what humans do with resources regardless of arbitrary economic concerns we put on them matters much more.

 

The idea that the only alternative to a monetary-based economy is a barter system is IMO fallacious too - or at least the idea that that will always be the case. The overall goal of economic systems should always be, IMO, an endgame where we don't need them any more - where a system is in place where scarcity (either natural or contrived) is a thing of the past, where distribution is so effective resources can be produced practically on demand, where humans no longer have to manufacture or labour and can instead involve themselves in the creative and the leisurely as and when they like.

 

Just because we rely so heavily on something for the present time...doesn't mean that always has to be so.

 

The only way the idea that a barter system is the only alternative to money is fallacious is if we ever reach a point where robotics and technology is at such a point as to whereas human labour is rendered completely obsolete so we don't have to negotiate what limited labour time we have - where robots think for us and create all new technologies, where they can pick up anything we want, where they advertise for us and tell us what we want, where they create and build all new ideas, where they are our government and govern us, where they resolve all human conflict, where they create every piece of music, art, film, computer game and book ever possible to create, where they decide what's fashionable and what clothes to wear etc. etc..

And that frankly, sounds terrifying to me - the loss of the individual in Socialism taken to its absolute extreme.

In any other system, yes, the barter system absolutely is the only other alternative to money - a universal means of exchange for acquiring someone else's labour for favours. How else is anyone going to receive an efficient way of negotiating for the skills and services they provide to others - even if it's through the kindness of their heart.That isn't fallacious at all, that's Economics 101, the first thing you ever learn in your first lesson of A-Level Economics - you may call it something else, you may call it "a universal tally of favours" - but that's what money is, that's how we negotiate quickly and easily without having to spend our limited labour hours bartering who and what to offer our limited labour too - it's either bartering each and every deal or a system in which we have a universal tally to exchange goods, services and labour for - can you please explain what other possible systems we can come up with?

 

Of course they are man-made subjective ideas which we attach to them, but so are human rights, so is language, so are laws, so are ideas of subdividing animals into species when we are all just differently deformed evolutions from the same bits of bacteria. - just because something is man-made doesn't mean these things are bad or we will inevitably evolve past language or basic human rights - in fact t's exactly these collective man-made "fictions" which are what separate humans from the rest of the world and what we've built our industry on. Money or Economics will not die out anymore than language or laws will because it's not possible to create huge interacting systems without them without turning humans into one connected hive-mind (yes, I've read Yuval Harari too) - because Economics and money are just the study of how humans interact with each other and how those interactions work within society and that's it. Of course there are faulty Economics which cause horrible devastation - just like there are faulty laws or faulty human rights which cause horrible devastation - but that's bad Economics, just like those are bad laws or and human rights, it does not mean the existence of Economics is not an absolute necessity to mass human interaction, just as it does not mean human rights and laws are not essential to the flourishing of the human race - humans would be either extinct or still in the trees with the chimpanzees and have very little knowledge of their own self-consciousness or all the fruits of human history and knowledge without any of those subjective man-made fictional things.

I could easily see a future date where humans do come up with systems which are genuinely much better than Capitalism and manage to keep its benefits while stopping its flaws (but there's certainly been nothing which comes close to Capitalism so far) - but I cannot see a future where money would become obsolete - even in Lenin's Communist vision where everyone would receive the same amount for the same amount of labour hours, regardless of the job, money was still used as a quick form of exchange and negotiation and measuring labour hours,

Maybe there are alien races who perfectly understand empathy and can instantly negotiate with thousands of different people at the same time some of whom are millions of miles away meaning money isn't needed, but humans - who are not mind reading and mind communicating creatures - are never going to get to that place without some kind of Invasion of the Body Snatchers style loss of individualism which I would hope most humans of the future will guard against.

Edited by Sampson
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The Doctor

The Doctor

Posted
Posted
2 hours ago, Sampson said:

But again, you're not taking into account what happens after government intervention and wealth distribution.

 

No one thinks poverty and having to subsidise working families is fun, but the more you tax the mega-rich companies, the more they have to put up prices which leads to inflation making people's money worth less anyway and people less being able to afford food (because again, it's not just about looking at the simple figures we got in) - the smaller companies who they buy or produce from often getting a big brunt too - the more the big companiles in whatever sector either have to deal with increases in demand due to more spending in the economy while simultaneously having to deal with higher taxes is a double hit - which both naturally lead to price increases and inflation.

It's difficult getting the perfect balance right - absolutely it is. But more government intervention in markets in this way inevitably leads to failure - because the laws of supply and demand offer truer and more natural pricing than government intervention ever can - again, that;s not to say markets and perfect, but it's so intuitive to say that there are people in poverty, - we have to tax the rich to give them more money is absolutely intuitive, I get that - but you also have to understand why it can be so, so dangerous to the real value of the average person's wage and why it can inhibit innovation which gets round these barriers and that's why free markets have shown historically to be far better at pulling people out of poverty than government interventioned ones and why heavy tax burdens on the rich can be catastrophic to the poor people of a nation even though they may be getting more money they can easily end up being far less wealthy and cause far more poverty.

 

I didn't actually say anything about taxing mega rich companies more - that's a strategy to raise more money so we can continue to subsidise their wage budgets to a ridiculous degree: something we need to get away from - the welfare system should be for supporting frictional unemployment (an inevitability of any system wider than one community), not to enable companies to save on wages. This is where government intervention comes in and is far more effective than the market, setting a proper living wage as the minimum wage (which then should be tied to inflation, because as it is millions are facing effective pay decreases year on year by a wage rising slower than inflation), or for a truly revolutionary system, setting a linked wage cap, so the highest earners wage has a ceiling based on the lowest earners.

Webbo

Webbo

Posted
Posted
22 minutes ago, The Doctor said:

 

I didn't actually say anything about taxing mega rich companies more - that's a strategy to raise more money so we can continue to subsidise their wage budgets to a ridiculous degree: something we need to get away from - the welfare system should be for supporting frictional unemployment (an inevitability of any system wider than one community), not to enable companies to save on wages. This is where government intervention comes in and is far more effective than the market, setting a proper living wage as the minimum wage (which then should be tied to inflation, because as it is millions are facing effective pay decreases year on year by a wage rising slower than inflation), or for a truly revolutionary system, setting a linked wage cap, so the highest earners wage has a ceiling based on the lowest earners.

That's assuming that all companies are growing the same or all start from the same point. If you force a company that's losing money to increase wages beyond what they can afford then you force them to lose jobs to cover the shortfall.

The Doctor

The Doctor

Posted
Posted
Just now, Webbo said:

That's assuming that all companies are growing the same or all start from the same point. If you force a company that's losing money to increase wages beyond what they can afford then you force them to lose jobs to cover the shortfall.

Then let them fail. People claim the market is good at weeding out failure, yet trot out this argument. If a company cannot afford to have employees earning a pittance without government help, then you've got a failed enterprise on your hands.

Webbo

Webbo

Posted
Posted
10 minutes ago, The Doctor said:

Then let them fail. People claim the market is good at weeding out failure, yet trot out this argument. If a company cannot afford to have employees earning a pittance without government help, then you've got a failed enterprise on your hands.

It won't be the market though, it'll be the govt that's putting them out of business.

 

There's an argument about not subsidising low wages but if you away with it they'll be a price to pay with employment and poverty.

 

 

I can't believe I'm actually defending wealth redistribution.

The Doctor

The Doctor

Posted
Posted
4 minutes ago, Webbo said:

It won't be the market though, it'll be the govt that's putting them out of business.

 

There's an argument about not subsidising low wages but if you away with it they'll be a price to pay with employment and poverty.

You're making a distinction where one doesn't need to exist, unless only specific types of failure should be punished - in which case I'm baffled as to why failure to fulfill your responsibilities as an employer shouldn't.

 

theres a price to pay with in work poverty now. If a building is structurally unsound, as trickle-down economics has been for years, you don't just give it a new coat of paint and go on until it collapses, you pre-emptively demolish it and rebuild.

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