comrades, is bitcoin a great leap forward for international socialism?

[stevendobbs]

I'm a socialist and im very interested in the emergence of bitcoin. And I see that many libertarians, and ayn randbots are likewise intrigued.

What interests me at the moment about the bitcoin approach, is that it appears to be a 'worker owned' financial system that unites some disparate globe spanning ideologies.

economic secessionist movements is one way to move forward together into the new global age of socialism? a 1000 years of socialism, helped by bitcoin emergence?

[1714791392]

1714791392

[1714791392]

1714791392

[1714791392]

1714791392

[cbeast]

I'm a socialist and im very interested in the emergence of bitcoin. And I see that many libertarians, and ayn randbots are likewise intrigued.

What interests me at the moment about the bitcoin approach, is that it appears to be a 'worker owned' financial system that unites some disparate globe spanning ideologies.

economic secessionist movements is one way to move forward together into the new global age of socialism? a 1000 years of socialism, helped by bitcoin emergence?

Socialism and every and all other "isms" are reifications and silly nonsensical words that allude to an idea that is too vague to imply anything specific. The fact is, bitcoin has powerful attributes that provide necessary functions for trade better than other types of "money." Getting goods and services to our family members around the world is important for people that love peace. Bitcoin is a step in the right direction until we have something even better one day. You can call it Socialism, but all men are brothers or at least distant cousins.

[cryptobard]

Anything is, vacuously, a step forward for international communism, if you catch my drift...

Getting goods and services to our family members around the world is important for people that love peace. Bitcoin is a step in the right direction until we have something even better one day.

I think these two sentences are worthy of a /thread.

[ThomasV]

I think that Bitcoin is neutral with respect to the "left versus right" debate.

Bitcoin is anti-Keynesianism, and pro austrian economics.

Keynesianism is often associated with the left, but that association is wrong; most governments follow a keynesian policy, whether they are left or right sided.

The debate between right and left is mostly about wealth redistribution, and the size of the government in the economy.
Bitcoin is neutral in this debate; it is perfectly possible to envision a taxation system adapted to Bitcoin (see Falkvinge's article on that:
http://falkvinge.net/2011/05/19/the-information-policy-case-for-flat-tax-and-basic-income/ ).

What Bitcoin does not allow is to create money out of thin air. It is sound money.

[Piper67]

Neither socialist nor libertarian, Bitcoin honest be 

[someotherguy]

What Bitcoin does not allow is to create money out of thin air. It is sound money.

Bitcoin is created out of thin air (ducking) in many respects.  However its value is in it's platform, and the ancillary services the free market provides to support that platform.  Its value is also derived from the public's perception of Bitcoin and its value in its use as a store of value.

[GideonGono]

I'm a socialist and im very interested in the emergence of bitcoin. And I see that many libertarians, and ayn randbots are likewise intrigued.

What interests me at the moment about the bitcoin approach, is that it appears to be a 'worker owned' financial system that unites some disparate globe spanning ideologies.

economic secessionist movements is one way to move forward together into the new global age of socialism? a 1000 years of socialism, helped by bitcoin emergence?

If Socialism = freedom from banksters, centralized govt money etc then I'm a Socialist too, comrade.

[johnyj]

This "comrades" word bring some good team spirit 

[AnonymousBat]

I'm a socialist and im very interested in the emergence of bitcoin. And I see that many libertarians, and ayn randbots are likewise intrigued.

What interests me at the moment about the bitcoin approach, is that it appears to be a 'worker owned' financial system that unites some disparate globe spanning ideologies.

economic secessionist movements is one way to move forward together into the new global age of socialism? a 1000 years of socialism, helped by bitcoin emergence?

I thought socialist economies didn't have money? If everything costs $0 what do you need money for?

[ineededausername]

I'm a socialist and im very interested in the emergence of bitcoin. And I see that many libertarians, and ayn randbots are likewise intrigued.

What interests me at the moment about the bitcoin approach, is that it appears to be a 'worker owned' financial system that unites some disparate globe spanning ideologies.

economic secessionist movements is one way to move forward together into the new global age of socialism? a 1000 years of socialism, helped by bitcoin emergence?

I thought socialist economies didn't have money? If everything costs $0 what do you need money for?

The Marxist definition of socialism is the statist period before the utopian communist part.  Only after socialism is there no money.

[NghtRppr]

I'm a socialist and im very interested in the emergence of bitcoin.

What kind of socialist? A peaceful and voluntary socialist or a coercive and mandatory socialist? In other words, in your world would myself and others be free to opt out of your socialist paradigm?

[Bitcoin_Silver_Supply]

I'm a socialist and im very interested in the emergence of bitcoin.

What kind of socialist? A peaceful and voluntary socialist or a coercive and mandatory socialist? In other words, in your world would myself and others be free to opt out of your socialist paradigm?

The latter is not a socialist, though he may still think of himself as such.

[hugolp]

The latter is not a socialist, though he may still think of himself as such.

If that is the case 90+% of socialists are not socialists.

[johnyj]

Although politically people have some freedom to choose between socialism or liberalism, but economically it is always monarchism, while the central bank have the total rule

It seems a centralized management is always the final result, either it is based on force or based on intelligence. If it breaks, then efficiency will drop

[cryptobard]

The latter is not a socialist, though he may still think of himself as such.

If that is the case 90+% of socialists are not socialists.

Painful truth many choose to ignore.

[stevendobbs]

The latter is not a socialist, though he may still think of himself as such.

If that is the case 90+% of socialists are not socialists.

Many people reject socialism in error: If they could forget the soviet propaganda of what socialism is all about, and the covergent fearsome propaganda of the ultracapitalists which agreed with stalins convenient definitions - then most people would probably be intensely relaxed about socialism.

Socialism could mean state control of industry, or it could mean pushing worker owned cooperatives. The latter is a libertarian-socialist position, the former requires a really healthy democracy in order to be valid and safe.

State socialism can exist without democracy, but will be pretty damn evil. Democracy without socialism is dangerous polar opposite. And only animals that live on both poles are what? penguins and polar bears, walruses and stuff like that?

[evoorhees]

The latter is not a socialist, though he may still think of himself as such.

If that is the case 90+% of socialists are not socialists.

Many people reject socialism in error: If they could forget the soviet propaganda of what socialism is all about, and the covergent fearsome propaganda of the ultracapitalists which agreed with stalins convenient definitions - then most people would probably be intensely relaxed about socialism.

Socialism could mean state control of industry, or it could mean pushing worker owned cooperatives. The latter is a libertarian-socialist position, the former requires a really healthy democracy in order to be valid and safe.

State socialism can exist without democracy, but will be pretty damn evil. Democracy without socialism is dangerous polar opposite. And only animals that live on both poles are what? penguins and polar bears, walruses and stuff like that?

My only question is, does your definition of socialism permit an individual to own the product of his labor and that which is voluntarily traded to her?

If not, then how do you justify using force and coercion on peaceful people?

[MatthewLM]

Socialism is used to describe a broad range of ideas. I regard those that wish for redistribution of wealth to be socialists for examples, others would not.

a 1000 years of socialism

Was the Nazi reference on purpose?

[greyhawk]

Socialism is used to describe a broad range of ideas. I regard those that wish for redistribution of wealth to be socialists for examples, others would not.

a 1000 years of socialism

Was the Nazi reference on purpose?

Nazis were socialists after all, so....

[stevendobbs]

Socialism is used to describe a broad range of ideas. I regard those that wish for redistribution of wealth to be socialists for examples, others would not.

a 1000 years of socialism

Was the Nazi reference on purpose?

Nazis were socialists after all, so....

Sorry, but Adolf Hitler was certainly no Clement Atlee, who was a real socialist.

But there is convergence between conservative, libertarian political-economy and the fascist political economy - for example: class distinction is both supported and accepted by fascists and modern libertarianism alike. It is as though fascism has undergone a rebranding with the most overtly disgusting ideas filtered out. And yet, still social darwinism is well accepted by libertarians of the conservative sort thinking.

[stevendobbs]

I'm a socialist and im very interested in the emergence of bitcoin.

What kind of socialist? A peaceful and voluntary socialist or a coercive and mandatory socialist? In other words, in your world would myself and others be free to opt out of your socialist paradigm?

One might choose to live on an empty island? But remember, socialism knows no borders - wherever unfairness emerges, socialistic principles will gain popular support. You have to work with that, or suppress it. And if you are against suppression, then socialism will triumph - its fairly inevitable.

As marx said, "the definition of peace is the absence of resistance to socialism"

[greyhawk]

Socialism is used to describe a broad range of ideas. I regard those that wish for redistribution of wealth to be socialists for examples, others would not.

a 1000 years of socialism

Was the Nazi reference on purpose?

Nazis were socialists after all, so....

Sorry, but Adolf Hitler was certainly no Clement Atlee, who was a real socialist.

But there is convergence between conservative, libertarian political-economy and the fascist political economy - for example: class distinction is both supported and accepted by fascists and modern libertarianism alike. It is as though fascism has undergone a rebranding with the most overtly disgusting ideas filtered out. And yet, still social darwinism is well accepted by libertarians of the conservative sort thinking.

Nazi is short for National Socialist. Go watch Riefenstahls coverage of the Reichsparteitag 1936 in Nürnberg. Anything and everything said there is Socialism in it's purest form.

[Bitcoin_Silver_Supply]

The latter is not a socialist, though he may still think of himself as such.

If that is the case 90+% of socialists are not socialists.

Meant to say "former" here.

[blacbe]

socialism or communism works well in communities a good example of this is the zapatistas. a large state can't be trusted with any form of ism. people should be able to live how they please; trade, share or form a collective as they please. if a community wants to band together to form a commune and the state prevents that then it is not a free society. a free society is more important than any ideology. you cannot have a socialist utopia without at first a free society or else you will have a dystopia.

i see the benefits of socialism but i am not a socialist and neither am i an ideologue. i do, however, uncompromisingly believe that people should live as they want and any state that prevents that or tries to is illegitimate.

[hugolp]

One might choose to live on an empty island? But remember, socialism knows no borders - wherever unfairness emerges, socialistic principles will gain popular support. You have to work with that, or suppress it. And if you are against suppression, then socialism will triumph - its fairly inevitable.

As marx said, "the definition of peace is the absence of resistance to socialism"

Marx was a bourgeois. You are a traitor to the cause by citing a bourgeois.

[stevendobbs]

One might choose to live on an empty island? But remember, socialism knows no borders - wherever unfairness emerges, socialistic principles will gain popular support. You have to work with that, or suppress it. And if you are against suppression, then socialism will triumph - its fairly inevitable.

As marx said, "the definition of peace is the absence of resistance to socialism"

Marx was a bourgeois. You are a traitor to the cause by citing a bourgeois.

ha - thats a laugh.

if you are of the working class and advocate a return to socialism or communism - then you will be merely seeking personal advantage through the apparently unholy, politics of jealousy.
alternatively, if you are not of the dirt poor classes, then you are a hypocrite.

I don't buy it sorry.

Fact is, human nature could be described as communist, because for for most of its existence, human societies could be described as communist. Perhaps socialism is an attempt to marry human nature to the industry and technological age.

[stevendobbs]

Socialism is used to describe a broad range of ideas. I regard those that wish for redistribution of wealth to be socialists for examples, others would not.

a 1000 years of socialism

Was the Nazi reference on purpose?

Nazis were socialists after all, so....

Sorry, but Adolf Hitler was certainly no Clement Atlee, who was a real socialist.

But there is convergence between conservative, libertarian political-economy and the fascist political economy - for example: class distinction is both supported and accepted by fascists and modern libertarianism alike. It is as though fascism has undergone a rebranding with the most overtly disgusting ideas filtered out. And yet, still social darwinism is well accepted by libertarians of the conservative sort thinking.

Nazi is short for National Socialist. Go watch Riefenstahls coverage of the Reichsparteitag 1936 in Nürnberg. Anything and everything said there is Socialism in it's purest form.

yeahp, and north korea call themselves the Democratic Republic of Korea - does their evil regime undermine the case for democracy? like bollocks. It is not about whatever is said, it is about what is done.

Libertarian conservatives have some very bizarre ideas which are exactly the same in some respects as the fascist political economy minus the racist garbage. Ideas of class that are supported as a good thing in the fascist political economy are upheld by interpretation of property rights of ultra capitalism.

[NghtRppr]

I'm a socialist and im very interested in the emergence of bitcoin.

What kind of socialist? A peaceful and voluntary socialist or a coercive and mandatory socialist? In other words, in your world would myself and others be free to opt out of your socialist paradigm?

One might choose to live on an empty island? But remember, socialism knows no borders - wherever unfairness emerges, socialistic principles will gain popular support. You have to work with that, or suppress it. And if you are against suppression, then socialism will triumph - its fairly inevitable.

As marx said, "the definition of peace is the absence of resistance to socialism"

It's kind of annoying when you don't answer my questions. What kind of socialist are you? A peaceful and voluntary socialist or a coercive and mandatory socialist? In your world would myself and others be free to opt out of your socialist paradigm? These are direct questions which require direct answers.

[stevendobbs]

why are you annoyed? I answered fully. Suggesting for example, that you could live on a remote island and hope that its future citizens do not advocate socialism.

coercion has its place if there is resistance: for example, their is a great, existential, need to tax the rich more in order that the rest of society need not suffer the Utility Penalty or a drain on GDP from the effect of dampened velocity of money - if that need is resisted, then the resistance must be pushed through.

remembering that ultimately wealth belongs to all of society, one should only really expect that fundamental human rights are respected, less so, arbitrarily framed ones around property.

All this takes place under the mandate of some sort of democracy.

[NghtRppr]

Thanks you've made your stance perfectly clear. That form of socialism I reject.

wealth belongs to all of society

No, it doesn't.

under the mandate of some sort of democracy

Democracy is three people on an island and two of them vote to rob the third.

[stevendobbs]

I don't expect that you will agree with this, but I assume that you are aware?

The idea that wealth belongs to all comes from a couple of directions:

1) it all really comes from the land, and the land existed before mankind and life on earth. It seems strange to carve it up into fiefdoms unless there is some overall organisational advantage - which is arbitrary decision.

2) because of criminality and less than moral but legal practices through history - when you look at the past few centuries, theres been some rotten regimes ruling our ancestors: Wealth has often built up in some individuals in the past, then effectively laundered by the elite to legally pass on that right of property from one generation to the next and beyond. As each generation passes, opacity in the origin of that wealth in some eyes, legitimises it!

3) fairness and meritocracy is a good thing.

[stevendobbs]

Democracy is three people on an island and two of them vote to rob the third.

no, its rather more balanced than that. that one person can kick up such a fuss that its worth the other two making some effort to get the thirds cooperation.

In reality. there many issues that interest the different groups of society. And in the trading off of each others ideal directions and protected ideas and rights even minority factions can gain traction in a democracy.

Under libertarian society, the force of the state exists to protect the right and stature of the few. Democracy without teeth is a rubber stamp.

[NghtRppr]

Fairness is a good thing. What's fair about you sitting in the shade and watching me felling a forest, clearing the stumps, plowing the soil, sowing the seeds, tending the crops, harvesting the corn and then you coming to claim some of it? You did nothing. I did all the work. That hardly seems fair.

[stevendobbs]

Fairness is a good thing. What's fair about you sitting in the shade and watching me felling a forest, clearing the stumps, plowing the soil, sowing the seeds, tending the crops, harvesting the corn and then you coming to claim some of it? You did nothing. I did all the work. That hardly seems fair.

fairness doesn't mean that those who do not contribute, should necessarily gain a near equal amount to those that do:

Its just I do not agree that our system, because of market failure correctly rewards work done. Markets have a problem of both over and under valuing goods, and that includes labour. I take the view, that an hours work, is an hours work and it may be more or less unpleasant than another hour.

[hugolp]

One might choose to live on an empty island? But remember, socialism knows no borders - wherever unfairness emerges, socialistic principles will gain popular support. You have to work with that, or suppress it. And if you are against suppression, then socialism will triumph - its fairly inevitable.

As marx said, "the definition of peace is the absence of resistance to socialism"

Marx was a bourgeois. You are a traitor to the cause by citing a bourgeois.

ha - thats a laugh.

if you are of the working class and advocate a return to socialism or communism - then you will be merely seeking personal advantage through the apparently unholy, politics of jealousy.
alternatively, if you are not of the dirt poor classes, then you are a hypocrite.

I don't buy it sorry.

Fact is, human nature could be described as communist, because for for most of its existence, human societies could be described as communist. Perhaps socialism is an attempt to marry human nature to the industry and technological age.

Typical bourgeois answer. You did not reply to what I said and tried to pass over it.

You are a traitor to the working class follower of the bourgeois Marx.

[NghtRppr]

I take the view, that an hours work, is an hours work and it may be more or less unpleasant than another hour.

Do you think that an hour worth of pushing a broom is of the same value as an hour worth of brain surgery?

[stevendobbs]

Typical bourgeois answer. You did not reply to what I said and tried to pass over it.

You are a traitor to the working class follower of the bourgeois Marx.

try to avoid inflammatory style of posting please, mr moderator?

[stevendobbs]

I take the view, that an hours work, is an hours work and it may be more or less unpleasant than another hour.

Do you think that an hour worth of pushing a broom is of the same value as an hour worth of brain surgery?

not necessarily, but I think more so, than the current market price of labour suggests.

Stupid people, need stupid jobs to do. But stupid people are not animals. A vast gap in earnings is legalised slavery in a market economy because as we know, markets follow the money and its all about this:

Energy Production Priority.

[JeffK]

I take the view, that an hours work, is an hours work and it may be more or less unpleasant than another hour.

Do you think that an hour worth of pushing a broom is of the same value as an hour worth of brain surgery?

Society could not exist without both

[Vitalik Buterin]

I take the view, that an hours work, is an hours work and it may be more or less unpleasant than another hour.

Do you think that an hour worth of pushing a broom is of the same value as an hour worth of brain surgery?

Society could not exist without both

And that's where the theory of marginal value comes in. Which is more valuable - gold or water? Well, it depends on how much water you have.

[stevendobbs]

And that's where the theory of marginal value comes in. Which is more valuable - gold or water? Well, it depends on how much water you have.

It is dangerous to attribute the concept of goods to human beings? Markets may work well at setting the priorities of production. But to have a unregulated market in human beings; in their labour risks or perhaps IS, a form of slavery.

[NghtRppr]

And that's where the theory of marginal value comes in. Which is more valuable - gold or water? Well, it depends on how much water you have.

Exactly right. We have a winner!

If you are in the desert and you are offered a gallon of water or an ounce of gold. You'd take the water. Repeat the process enough times and eventually you'd get to the point where you'd say, "let me take a look at that gold". The 1st gallon of water is worth more than the 1st ounce of gold. The 1,000th gallon of water might not be.

But to have a unregulated market in human beings; in their labour risks or perhaps IS, a form of slavery.

The only bad thing about slavery was that you couldn't quit. You got to sing songs, pick cotton, you got fed, you had a roof over your head, etc. However, when the whip comes out and you say "I quit!" and you can't quit. That's when it becomes a bad deal.

I'm being slight facetious but you get the point.

[Hawker]

And that's where the theory of marginal value comes in. Which is more valuable - gold or water? Well, it depends on how much water you have.

It is dangerous to attribute the concept of goods to human beings? Markets may work well at setting the priorities of production. But to have a unregulated market in human beings; in their labour risks or perhaps IS, a form of slavery.

Is there a reason why every debate on this forum relies on slavery and the holocaust ?  Surely you can make a logical case without resorting to emotional rhetoric to prop it up?

[NghtRppr]

Is there a reason why every debate on this forum relies on slavery and the holocaust ?  Surely you can make a logical case without resorting to emotional rhetoric to prop it up?

It's not emotional rhetoric when it directly relates to the issue at hand. If I suggest that we kill all people with blue eyes and you say that would be genocide, is that emotional rhetoric? No. It's a fact. That would be genocide.

[stevendobbs]

And that's where the theory of marginal value comes in. Which is more valuable - gold or water? Well, it depends on how much water you have.

It is dangerous to attribute the concept of goods to human beings? Markets may work well at setting the priorities of production. But to have a unregulated market in human beings; in their labour risks or perhaps IS, a form of slavery.

Is there a reason why every debate on this forum relies on slavery and the holocaust ?  Surely you can make a logical case without resorting to emotional rhetoric to prop it up?

not really; look at the world. Do you think it is near optimum? of course you don't.

There is some serious issues that cannot be swept under the carpet any longer. billions of people are living in a precarious state, hungry, or worried, through the developed and developing world - now is as good a time as any for emotion to drive the overall vision.

Did you know that nearly 100,000,000 children die every decade from poverty related causes? We of the left argue that poverty is sustained as a consequence of prevailing economic policies. So its a life and death issue that economic policy be reviewed.

Now even in the rich developed world, something like 14% of US families experience food insecurity - the richest nation on earth - a large % of its population hungry - in the UK it is similar but well masked by social charities.

Many people, many ordinary people here would fit into the category of Mortgage Slave, or Slave to their Land Lord etc.

---

edit:
when i was posting what I posted, i was thinking or Rising Inequality in Earnings.

How can any of you justify static median income, and rising income at the top? what is the point of economic growth if it is never shared?

[Hawker]

stevendobbs - all good points but slavery relates to taking a person by force and selling them to someone who can kill them on a whim or work them to death.  While its tragic that there is poverty in our world, its not quite the same thing as slavery.  The impact of the point you make is diminished as people can see the cheap emotional trick you have used the buttress your argument.

[stevendobbs]

stevendobbs - all good points but slavery relates to taking a person by force and selling them to someone who can kill them on a whim or work them to death.  While its tragic that there is poverty in our world, its not quite the same thing as slavery.  The impact of the point you make is diminished as people can see the cheap emotional trick you have used the buttress your argument.

I'm not sure bondage by force, or bondage by necessity has any real practical difference.

edit:

slavery is frightening, and the way things are going leads to defacto slavery.

[NghtRppr]

what is the point of economic growth if it is never shared?

It is shared. Look at the lowest class in America. They all have refrigerators, color TV's, cars, etc, etc. They live like richest people did 50 years ago. The rich get rich by making the poor better off. How do you think Bill Gates and Steve Jobs got rich? By putting computers and iPods in the hands of millions of middle and lower class people instead of just the richest.

[stevendobbs]

what is the point of economic growth if it is never shared?

It is shared. Look at the lowest class in America. They all have refrigerators, color TV's, cars, etc, etc. They live like richest people did 50 years ago. The rich get rich by making the poor better off. How do you think Bill Gates and Steve Jobs got rich? By putting computers and iPods in the hands of millions of middle and lower class people instead of just the richest.

nooo it isn't though:

median income is flat, top end gains rise.

how is that possible?

It is possible because the median worker is working harder, and harder - productive goes up, but earnings remain static for most, whilst gains at the top accelerate.

Project that forward and imagine a political economy, where the wealth and power is dominated by a new aristocracy; a return to serfdom.

[stevendobbs]

what is the point of economic growth if it is never shared?

It is shared. Look at the lowest class in America. They all have refrigerators, color TV's, cars, etc, etc. They live like richest people did 50 years ago. The rich get rich by making the poor better off. How do you think Bill Gates and Steve Jobs got rich? By putting computers and iPods in the hands of millions of middle and lower class people instead of just the richest.

i didn't fully answer this:

The point about cheap tech. Cheap tech is not the most important expenses a citizen makes. We spend most of our money on:

Housing,
Health,
Education,
Transport,
Food,
gadgets are just bits of plastic.

[blacbe]

what is the point of economic growth if it is never shared?

It is shared. Look at the lowest class in America. They all have refrigerators, color TV's, cars, etc, etc. They live like richest people did 50 years ago. The rich get rich by making the poor better off. How do you think Bill Gates and Steve Jobs got rich? By putting computers and iPods in the hands of millions of middle and lower class people instead of just the richest.

nooo it isn't though:

median income is flat, top end gains rise.

how is that possible?

It is possible because the median worker is working harder, and harder - productive goes up, but earnings remain static for most, whilst gains at the top accelerate.

Project that forward and imagine a political economy, where the wealth and power is dominated by a new aristocracy; a return to serfdom.

serfs worked less hours than the modern average westerner and enjoyed lower taxes. serfdom would be a step up unfortunately. that road was paved 50 years ago

[NghtRppr]

It is possible because the median worker is working harder, and harder - productive goes up, but earnings remain static for most, whilst gains at the top accelerate.

Productivity goes up because new technology is invented. We have riding lawnmowers instead of push mowers. We have backhoes instead of shovels. All of these things make work easier, not harder, while increasing productivity.

I suggest that you read "The Anti-Capitalistic Mentality" by Ludwig von Mises. It's fairly short and argues against a lot of what you're saying.

Here's the free PDF version: http://mises.org/etexts/anticap.pdf

[hugolp]

Typical bourgeois answer. You did not reply to what I said and tried to pass over it.

You are a traitor to the working class follower of the bourgeois Marx.

try to avoid inflammatory style of posting please, mr moderator?

Is not inflammatory. Marx was a bourgeois and you follow his teachings, therefore you are infected with buorgeois mentallity. You need to break free of the buorgeois teachings of Marx to be able to understand how the world works and bring about the real socialist revolution. Otherwise you are just a traitor to the cause and a willing follower of the buorgeois.

[stevendobbs]

It is possible because the median worker is working harder, and harder - productive goes up, but earnings remain static for most, whilst gains at the top accelerate.

Productivity goes up because new technology is invented. We have riding lawnmowers instead of push mowers. We have backhoes instead of shovels. All of these things make work easier, not harder, while increasing productivity.

I suggest that you read "The Anti-Capitalistic Mentality" by Ludwig von Mises. It's fairly short and argues against a lot of what you're saying.

Here's the free PDF version: http://mises.org/etexts/anticap.pdf

median income is static. why cant median income grow with GDP growth?

do you recognise as we of the left do, that as purchasing power parity falls, the relative importance of such median workers, the people who actually work in the economy falls away. So then the market economy, which naturally chases profit margins, develops products primarily more and more, for those who can afford it - a small and rising elite will consume ever more of national production - the cost of living compared to static wages will rise for most.

In contrast, a proper, well managed society will have a smaller wealth gap, and rising productivity will translate directly, to rising earnings.

You can see the effect in this plot:

from http://a-new-red-dawn.blogspot.com/2011/08/misery-loves-company.html
high GDP/capita converges with many low GINI nations - which suggests, the argument against redistribution - socialism levels everybody down, is false.

the USA is a rather unusual anomaly. My prediction is that the USA will lurch to the left chavez style in the next 10 years, unless progressive reforms are already in place.

[stevendobbs]

Is not inflammatory. Marx was a bourgeois and you follow his teachings, therefore you are infected with buorgeois mentallity. You need to break free of the buorgeois teachings of Marx to be able to understand how the world works and bring about the real socialist revolution. Otherwise you are just a traitor to the cause and a willing follower of the buorgeois.

again, this sort of post doesn't really do it for me. Think yourself into my position: What is there for me to reply to? really?

perhaps a reflection post to illustrate the problem:

You are infected with libertarian-capitalist mentality. You need to break free of the elitist notions of Ayn Rand and Milton Friedman to be able to understand how the world works and how it crushes real freedom in the name of liberty. Otherwise you are just a willing serf of the new aristocracy or a wannabe.

--see? such a post has no real content to reply to

[hugolp]

It is possible because the median worker is working harder, and harder - productive goes up, but earnings remain static for most, whilst gains at the top accelerate.

Productivity goes up because new technology is invented. We have riding lawnmowers instead of push mowers. We have backhoes instead of shovels. All of these things make work easier, not harder, while increasing productivity.

I suggest that you read "The Anti-Capitalistic Mentality" by Ludwig von Mises. It's fairly short and argues against a lot of what you're saying.

Here's the free PDF version: http://mises.org/etexts/anticap.pdf

median income is static. why cant median income grow with GDP growth?

do you recognise as we of the left do, that as purchasing power parity falls, the relative importance of such median workers, the people who actually work in the economy falls away. So then the market economy, which naturally chases profit margins, develops products primarily more and more, for those who can afford it - a small and rising elite will consume ever more of national production - the cost of living compared to static wages will rise for most.

In contrast, a proper, well managed society will have a smaller wealth gap, and rising productivity will translate directly, to rising earnings.

You can see the effect in this plot:

from http://a-new-red-dawn.blogspot.com/2011/08/misery-loves-company.html
high GDP/capita converges with many low GINI nations - which suggests, the argument against redistribution - socialism levels everybody down, is false.

the USA is a rather unusual anomaly. My prediction is that the USA will lurch to the left chavez style in the next 10 years, unless progressive reforms are already in place.

And this has happened because of the policies the authoritarian left have defended (and to be fair also defended by the right wing).

I dont understand how you can complain of something produced by what you defend.

[stevendobbs]

I dont understand how you can complain of something produced by what you defend.

http://uncyclopedia.wikia.com/wiki/Physics_doesn't_exist,_it's_all_about_Gnomes#Ecognomics
As underpants gnomes would say, there are 3 steps to getting rich: Phase 1: Steal Underpants Phase 2: ?? Phase 3: Profit!

-- you assert that the 'authoritarian left' has created the distribution above?

That is a very strange thing to say? the left wing has not been setting the direction of our economies since the late 1970's. We've seen now 30 years of free trade direction and associated ideas. The democratic state has been rolled back, central banks and other agents have filled that power vacuum.

And post credit crunch we inherit this mess.

[NghtRppr]

30 years of free sporadically regulated trade

FTFY

[hugolp]

That is a very strange thing to say? the left wing has not been setting the direction of our economies since the late 1970's. We've seen now 30 years of free trade direction and associated ideas. The democratic state has been rolled back, central banks and other agents have filled that power vacuum

Hahahaha. Was this ironic or you really believe it? If you do I recommend that you go and check the data (at least only for mental health).

[Hawker]

stevendobbs what would you say to someone who argued that its the lack of competitiveness of Western economies that is causing the huge burst in inequality.  The jobs that kept the working classes going are now being done in China and there is simply not need for their labour.  Naturally the rentier classes (doctors, public servants, lawyers and so on) are able to carry on getting paid as there is no way their work can be outsourced to China.  And the guys at the top are global players - there is little link between them and the country they live in.  The net effect is that the bottom 50% or so is scrabbling around for jobs and their wages are being inexorably driven to Chinese levels.  And this is bigger than any 1 country and certainly bigger than any 1 party; I can't see any escape from it.

[hugolp]

stevendobbs what would you say to someone who argued that its the lack of competitiveness of Western economies that is causing the huge burst in inequality.  The jobs that kept the working classes going are now being done in China and there is simply not need for their labour.  Naturally the rentier classes (doctors, public servants, lawyers and so on) are able to carry on getting paid as there is no way their work can be outsourced to China.  And the guys at the top are global players - there is little link between them and the country they live in.  The net effect is that the bottom 50% or so is scrabbling around for jobs and their wages are being inexorably driven to Chinese levels.  And this is bigger than any 1 country and certainly bigger than any 1 party; I can't see any escape from it.

The thing is that what you call the "rentier classes" are getting hammered as well, so your theory does not hold. Obviously they suffer less because they were in a more relax position but they are getting punished by the policies that are being applied.

[Hawker]

stevendobbs what would you say to someone who argued that its the lack of competitiveness of Western economies that is causing the huge burst in inequality.  The jobs that kept the working classes going are now being done in China and there is simply not need for their labour.  Naturally the rentier classes (doctors, public servants, lawyers and so on) are able to carry on getting paid as there is no way their work can be outsourced to China.  And the guys at the top are global players - there is little link between them and the country they live in.  The net effect is that the bottom 50% or so is scrabbling around for jobs and their wages are being inexorably driven to Chinese levels.  And this is bigger than any 1 country and certainly bigger than any 1 party; I can't see any escape from it.

The thing is that what you call the "rentier classes" are getting hammered as well, so your theory does not hold. Obviously they suffer less because they were in a more relax position but they are getting punished by the policies that are being applied.

I take your point.  Life is harder for the rentiers as the educated working class is after the same jobs.  But they still have secure well paying jobs for life.  If we are talking about inequality, a few years unemployment will push a man well below the median lifetime earnings.  My central point is that wages in Western societies for unskilled workers will be driven down and that is driving inequality.  And its been going on since the 1970s in all our societies so its probably bigger than 1 party's 4 year election pledges.

[hugolp]

stevendobbs what would you say to someone who argued that its the lack of competitiveness of Western economies that is causing the huge burst in inequality.  The jobs that kept the working classes going are now being done in China and there is simply not need for their labour.  Naturally the rentier classes (doctors, public servants, lawyers and so on) are able to carry on getting paid as there is no way their work can be outsourced to China.  And the guys at the top are global players - there is little link between them and the country they live in.  The net effect is that the bottom 50% or so is scrabbling around for jobs and their wages are being inexorably driven to Chinese levels.  And this is bigger than any 1 country and certainly bigger than any 1 party; I can't see any escape from it.

The thing is that what you call the "rentier classes" are getting hammered as well, so your theory does not hold. Obviously they suffer less because they were in a more relax position but they are getting punished by the policies that are being applied.

I take your point.  Life is harder for the rentiers as the educated working class is after the same jobs.  But they still have secure well paying jobs for life.  If we are talking about inequality, a few years unemployment will push a man well below the median lifetime earnings.  My central point is that wages in Western societies for unskilled workers will be driven down and that is driving inequality.  And its been going on since the 1970s in all our societies so its probably bigger than 1 party's 4 year election pledges.

But I think you are wrong. Inequality and worse production system is what is driving low-skilled workers to go under the level of subsistance, not the other way around.

[Hawker]

hugolp - inequality was not lower in the 60s because people were kinder.  It was because all of society's labour was needed.  Now it isn't needed at the unskilled end of the labour market and naturally that drives down the price of labour and creates inequality.

I know you disagree with something but I don't know quite what part you think is wrong? 

[hugolp]

hugolp - inequality was not lower in the 60s because people were kinder.  It was because all of society's labour was needed.  Now it isn't needed at the unskilled end of the labour market and naturally that drives down the price of labour and creates inequality.

I know you disagree with something but I don't know quite what part you think is wrong? 

I dont think the inequality is growing because the evil asians are stealing from us. Its because the production system in the USA and in Europe has changed. The asian development could have happened without affecting us.

The main reason for the increase in inequality is the increase of the monetary inflation since the 70's coupled with the changes in the way the CPI gets calculated. If you understimate the CPI (like Nixon, Reagan, Clinton, etc... did) the people that earn a wage will suffer because their wages are not getting actualized.

This is why during the 80's and specially during the 90's started appearing so many low-cost services. It was the market reaction to the empoverisment of the middle classes and trying to provide the services they wanted but at a price they could afford.

[Hawker]

hugolp - inequality was not lower in the 60s because people were kinder.  It was because all of society's labour was needed.  Now it isn't needed at the unskilled end of the labour market and naturally that drives down the price of labour and creates inequality.

I know you disagree with something but I don't know quite what part you think is wrong? 

I dont think the inequality is growing because the evil asians are stealing from us. Its because the production system in the USA and in Europe has changed. The asian development could have happened without affecting us.

The main reason for the increase in inequality is the increase of the monetary inflation since the 70's coupled with the changes in the way the CPI gets calculated. If you understimate the CPI (like Nixon, Reagan, Clinton, etc... did) the people that earn a wage will suffer because their wages are not getting actualized.

This is why during the 80's and specially during the 90's started appearing so many low-cost services. It was the market reaction to the empoverisment of the middle classes and trying to provide the services they wanted but at a price they could afford.

Asians aren't evil.  I assume you were being ironic.

If your view is US-centric, I think you'll find that the US had been financing a trade deficit since 1975 or so.  That's 36 years of US workers not being able to compete and the US borrowing money to cover that lack of competitiveness. 

What I am interested in is the question of what impact you think unskilled labour being priced out of the market had.  Do you really believe it had no effect? 

[hugolp]

Asians aren't evil.  I assume you were being ironic.

Yes, I am refering to the language governments and some "intelectuals" and "economists" (not so curiously from conservatives to communists) about the evil asians that are stealing urrrjubs!

If your view is US-centric, I think you'll find that the US had been financing a trade deficit since 1975 or so.  That's 36 years of US workers not being able to compete and the US borrowing money to cover that lack of competitiveness.

What I am telling you is that it is the other way around. The USA financing its deficits through inflation is what has caused the discoordination in the economy and the lower oportunities for workers, while it has benefited politicians and also to a degree the financial system.

What I am interested in is the question of what impact you think unskilled labour being priced out of the market had.  Do you really believe it had no effect?

What I am telling you is that the problem with the unemployment and lowering of real wages of unskilled workers has almost nothing to do with the development of Asia, but it has to do with the policies that have been followed in USA and in Europe. The asians are just being used as scape-goat so people dont look at the ones at home that have benefited from the situation.

[Hawker]

Asians aren't evil.  I assume you were being ironic.

Yes, I am refering to the language governments and some "intelectuals" and "economists" (not so curiously from conservatives to communists) about the evil asians that are stealing urrrjubs!

If your view is US-centric, I think you'll find that the US had been financing a trade deficit since 1975 or so.  That's 36 years of US workers not being able to compete and the US borrowing money to cover that lack of competitiveness.

What I am telling you is that it is the other way around. The USA financing its deficits through inflation is what has caused the discoordination in the economy and the lower oportunities for workers, while it has benefited politicians and also to a degree the financial system.

What I am interested in is the question of what impact you think unskilled labour being priced out of the market had.  Do you really believe it had no effect?

What I am telling you is that the problem with the unemployment and lowering of real wages of unskilled workers has almost nothing to do with the development of Asia, but it has to do with the policies that have been followed in USA and in Europe. The asians are just being used as scape-goat so people dont look at the ones at home that have benefited from the situation.

I know from personal experience that UK manufacturers fought tooth and nail to survive the impact of Chinese imports.  I've actually been in an extrusion plant in 2001 waiting for the liquidators agents to take the machinery (which was immediately shipped to China ironically enough).  The MD set up a "consultancy" from his back bedroom.  Maybe Americans didn't fight that hard but at least in the UK, there is a direct link between trade with China and the removal of low skilled manufacturing.  I can't help but feel that the loss of those jobs affected the workers incomes.  Spread that over the country and you have a huge number of people who have reduced income.  To say this doesn't affect income inequality seems a little bizarre. 

[hugolp]

I know from personal experience that UK manufacturers fought tooth and nail to survive the impact of Chinese imports.  I've actually been in an extrusion plant in 2001 waiting for the liquidators agents to take the machinery (which was immediately shipped to China ironically enough).  The MD set up a "consultancy" from his back bedroom.  Maybe Americans didn't fight that hard but at least in the UK, there is a direct link between trade with China and the removal of low skilled manufacturing.  I can't help but feel that the loss of those jobs affected the workers incomes.  Spread that over the country and you have a huge number of people who have reduced income.  To say this doesn't affect income inequality seems a little bizarre.

No. There is a link between the loosing competivity of the western countries and that they loose industry. And this industry obviously goes somewhere else. But we have seen in history many nations with higher, much higher, wages outcompete nations with lower wages. Wage is only one factor of the cost of production.

[stevendobbs]

That is a very strange thing to say? the left wing has not been setting the direction of our economies since the late 1970's. We've seen now 30 years of free trade direction and associated ideas. The democratic state has been rolled back, central banks and other agents have filled that power vacuum

Hahahaha. Was this ironic or you really believe it? If you do I recommend that you go and check the data (at least only for mental health).

whats all this hahaha padding about? Are you the kid who thinks he knows everything sniggering at the teacher from the corner?

In UK political economy, there have been two major Primeministers since world war 2.

Clement Atlee and Maggie Thatcher.

Unlike other leaders, these PM's set the direction that the nation would follow for decades. Clement took us to the left, and the nation stayed left despite conservative victories at elections. They maintained the basic approach clement applied, and the economy continued to recover, with debt as a % of GDP shrinking rapidly.

then came Thatcher.

In the USA, a similar thing happened. From pretty rational economic policy, the USA went bizarre with Reagan's wreckenomics. US debt then surged as Reagan laughably followed the laffer curve - the pot of gold at the end of the rainbow of low taxes which doesn't exist.

Both nations suffered in comparable ways. The USA's fiscal stance collapsed and has never recovered. The UK's huge assets, built up by socialist policies prior to thatcher were spent on tax cuts funded by privatisation and asset stripping of housing stock.

[hugolp]

whats all this hahaha padding about? Are you the kid who thinks he knows everything sniggering at the teacher from the corner?

In UK political economy, there have been two major Primeministers since world war 2.

Clement Atlee and Maggie Thatcher.

Unlike other leaders, these PM's set the direction that the nation would follow for decades. Clement took us to the left, and the nation stayed left despite conservative victories at elections. They maintained the basic approach clement applied, and the economy continued to recover, with debt as a % of GDP shrinking rapidly.

then came Thatcher.

In the USA, a similar thing happened. From pretty rational economic policy, the USA went bizarre with Reagan's wreckenomics. US debt then surged as Reagan laughably followed the laffer curve - the pot of gold at the end of the rainbow of low taxes which doesn't exist.

Both nations suffered in comparable ways. The USA's fiscal stance collapsed and has never recovered. The UK's huge assets, built up by socialist policies prior to thatcher were spent on tax cuts funded by privatisation and asset stripping of housing stock.

Again, check the data. You are going to be surprised about how the stories that have explained you dont fit what really happened.

You could also define what you mean by "left economics" and "right economics", just to be sure.

[stevendobbs]

If your view is US-centric, I think you'll find that the US had been financing a trade deficit since 1975 or so.  That's 36 years of US workers not being able to compete and the US borrowing money to cover that lack of competitiveness.  

What I am interested in is the question of what impact you think unskilled labour being priced out of the market had.  Do you really believe it had no effect?  

I largely agree, and I would add - I think they justified this sustained trade deficit by way of saying.. "Its ok, look we have inward investment."

But I think they will count anything as inward investment: Is a foreign take over of a PLC because business taxes are low a valid way of saying we have inward investment, likewise for credit investment and real estate - which was us ultimately funded by the winners of the trade imbalance.

[stevendobbs]

Again, check the data. You are going to be surprised about how the stories that have explained you dont fit what really happened.

the data supports my position. Perhaps you have misunderstood?

[stevendobbs]

Wow, no one here knows what socialism is at all.  To answer the OP post, bitcoin is a free market based mechanism for exchanging value and is in essense the very opposite of socialism since it eschews state controls and socialism can only be achieved through the state.  Marx was not a socialist but if he were around he would probably describe bitcoin as a progressive petite bourgiouse subversion of global capitalism due to its universal and international acceptance but ultimitaly a distraction to workers struggle for liberation from capital.  But the main benefit of bitcoins is that it makes ideology irrelevant.  But in the market place of ideas socialism and communism failed to achieve its goals (at a massive cost in lives, over 100 million) and has been fundamentally rejected by all human societies even where Communism is at the helm for the simple reason that it goes against human nature and no statist project that goes against human nature will last for long.

Socialism need not be state control - and even so, thats ok if it has democratic mandate. Most socialists are very relaxed about cooperatives - worker owned enterprises which compete in the market place.

People continue to confuse markets with capitalism only. There will always be markets, how ever production priorities are set.

[hugolp]

Again, check the data. You are going to be surprised about how the stories that have explained you dont fit what really happened.

the data supports my position. Perhaps you have misunderstood?

I have some more time to loose, so come on, state what do you think is this left wing economic policy that happen before the 70's and how is this right wing policy that happened after the 70's. Please be concise and avoid rethoric.

[Andrew Bitcoiner]

Wow, no one here knows what socialism is at all.  To answer the OP post, bitcoin is a free market based mechanism for exchanging value and is in essense the very opposite of socialism since it eschews state controls and socialism can only be achieved through the state.  Marx was not a socialist but if he were around he would probably describe bitcoin as a progressive petite bourgiouse subversion of global capitalism due to its universal and international acceptance but ultimitaly a distraction to workers struggle for liberation from capital.  But the main benefit of bitcoins is that it makes ideology irrelevant.  But in the market place of ideas socialism and communism failed to achieve its goals (at a massive cost in lives, over 100 million) and has been fundamentally rejected by all human societies even where Communism is at the helm for the simple reason that it goes against human nature and no statist project that goes against human nature will last for long.

Socialism need not be state control -

you don't know what you're taking about.

[Hawker]

I know from personal experience that UK manufacturers fought tooth and nail to survive the impact of Chinese imports.  I've actually been in an extrusion plant in 2001 waiting for the liquidators agents to take the machinery (which was immediately shipped to China ironically enough).  The MD set up a "consultancy" from his back bedroom.  Maybe Americans didn't fight that hard but at least in the UK, there is a direct link between trade with China and the removal of low skilled manufacturing.  I can't help but feel that the loss of those jobs affected the workers incomes.  Spread that over the country and you have a huge number of people who have reduced income.  To say this doesn't affect income inequality seems a little bizarre.

No. There is a link between the loosing competivity of the western countries and that they loose industry. And this industry obviously goes somewhere else. But we have seen in history many nations with higher, much higher, wages outcompete nations with lower wages. Wage is only one factor of the cost of production.

I agree.  They move up the value chain.  In the UK, manufacturing output has risen constantly.  What has fallen is manufacturing employment.  And within that fall, you see its the low skilled workers are at the greatest disadvantage.  Their work can be done elsewhere and thus they are no longer needed.

The reason this matters is that these unemployed low skilled people create a huge inequality.  Its not just that they earn less themselves.  The move from an economy where there was a labour shortage to an economy where there is a constant desperate supply of surplus labour puts those who buy labour in a very strong negotiating position.  While there may be other factors, this long term trend of having a permanently insecure labour force with constant unemployment and low wages has the be a big factor in the growing inequality in all our countries.

[hugolp]

I agree.  They move up the value chain.  In the UK, manufacturing output has risen constantly.  What has fallen is manufacturing employment.  And within that fall, you see its the low skilled workers are at the greatest disadvantage.  Their work can be done elsewhere and thus they are no longer needed.

The reason this matters is that these unemployed low skilled people create a huge inequality.  Its not just that they earn less themselves.  The move from an economy where there was a labour shortage to an economy where there is a constant desperate supply of surplus labour puts those who buy labour in a very strong negotiating position.  While there may be other factors, this long term trend of having a permanently insecure labour force with constant unemployment and low wages has the be a big factor in the growing inequality in all our countries.

Again, I am telling you the reason there is high unemployment is not due to the chinese taking the jobs, its due to the policies that the western countries have followed. The chinese "taking the jobs" is just a consequence. If we would have followed different policies there would not be this unemployment.

[Hawker]

I agree.  They move up the value chain.  In the UK, manufacturing output has risen constantly.  What has fallen is manufacturing employment.  And within that fall, you see its the low skilled workers are at the greatest disadvantage.  Their work can be done elsewhere and thus they are no longer needed.

The reason this matters is that these unemployed low skilled people create a huge inequality.  Its not just that they earn less themselves.  The move from an economy where there was a labour shortage to an economy where there is a constant desperate supply of surplus labour puts those who buy labour in a very strong negotiating position.  While there may be other factors, this long term trend of having a permanently insecure labour force with constant unemployment and low wages has the be a big factor in the growing inequality in all our countries.

Again, I am telling you the reason there is high unemployment is not due to the chinese taking the jobs, its due to the policies that the western countries have followed. The chinese "taking the jobs" is just a consequence. If we would have followed different policies there would not be this unemployment.

OK give me a clue.  What policies would have prevented Chinese manufacturing from replacing unskilled "Western" manufacturing?

[cryptobard]

Once upon a time there was a brilliant man named J. Orlin Grabbe. He said the following:

Your first responsibility is to take care of yourself, so you won't be a burden to other people. If you don't do at least that, how can you be so arrogant as to think you can help others? You make progress by adapting to your own nature. In Rabelais' Gargantua the Abbey of Theleme had the motto: Fay ce que vouldras, or "Do as you will." Rabelais (unlike the Book of Judges) treats this in a very positive light. The implication is: Don't go seeking after some ideal far removed from your own needs. Don't get involved in some crusade to save the human race--because you falsely think that is the noble thing to do--when what you may really want to do, if you are honest with yourself, is to stay home, grow vegetables, and sell them in a roadside market. (Growing vegetables is, after all, real growth--more so than some New Age conceptions.) You have no obligation under the sun other than to discover your real needs, to fulfill them, and to rejoice in doing so.

In this approach you give other people the right to make their own choices, but you also hold them responsible for the consequences. Most social "problems", after all, are a function of the choices people make, and are therefore insolvable in principle, except by coercion. One is not under any obligation to make up for the effects of other people's decisions. If, for example, people (poor or rich, educated or not) have children they can't care for or feed, one has no responsibility to make up for their negligence or to take on one's own shoulders responsibility for the consequent suffering. You can, if you wish, if you want to become a martyr. If you are looking to become a martyr, the world will gladly oblige, and then calmly carry on as before, the "problems" unaltered.

One may, of course, choose to help the rest of the world to the extent that one is able, assuming one knows how. But it is a choice, not an obligation. Modern political correctness and prostituted religion have tried to turn all of what used to be considered virtues into social obligations. Not that anyone is expected to really practice what they preach; rather it is intended they feel guilty for not doing so, and once the guilt trip is underway, their behavior can be manipulated for political purposes.

For some reason this always come to mind when I hear/read socialists talking about their personal utopias.

Anyways, don't mind me

[hugolp]

I agree.  They move up the value chain.  In the UK, manufacturing output has risen constantly.  What has fallen is manufacturing employment.  And within that fall, you see its the low skilled workers are at the greatest disadvantage.  Their work can be done elsewhere and thus they are no longer needed.

The reason this matters is that these unemployed low skilled people create a huge inequality.  Its not just that they earn less themselves.  The move from an economy where there was a labour shortage to an economy where there is a constant desperate supply of surplus labour puts those who buy labour in a very strong negotiating position.  While there may be other factors, this long term trend of having a permanently insecure labour force with constant unemployment and low wages has the be a big factor in the growing inequality in all our countries.

Again, I am telling you the reason there is high unemployment is not due to the chinese taking the jobs, its due to the policies that the western countries have followed. The chinese "taking the jobs" is just a consequence. If we would have followed different policies there would not be this unemployment.

OK give me a clue.  What policies would have prevented Chinese manufacturing from replacing unskilled "Western" manufacturing?

I will do something better than that, Ill give you a whole explanation on how the policies produced the outcome. I wrote this some time ago:

Why did the USA industrialized under a hard money monetary system? The big USA industrialization happened when prices were going down. But then, when the USA government adopted inflationary policies the USA started to deindustrialize.

The history of the British empire shows a similar picture. During the XVIII century the British empire had a (more or less) hard money system and his industries were the envy of the world. During the XIX century it followed inflationary policies and it started the deindustrialization.

The reason is that not all investments are good investments, therefore more investment is not necessarily better if its not done right. Following inflationary policies deindustrializes a country, as history show. Its also easy to explain why:

Inflation does not only brings higher prices, but also lower interest rates. The interest rates are a basic factor (among others) when investing, because its the price of financing the project. A project might not be profitable with 6% rates but it might be at 3%. This is specially true for long term investments. Therefore artificially lowering interest rates makes entrepeneurs start more long term investments than they really should. All this investments bid resources away from other projects. This is in fact, a bubble. The bubbled industry is temporarely profitable and therefore can outpay other industries for the labor and resources. Therefore part of the production has to be outsourced. At the moment this seems a good deal because the bubbled industry seems to be a more valuable activity.

But when the bubble bursts and all this investments are revealed as malinvestments, there is a problem. The country where the productive industry has moved is now specialized to some degree and has achieved a better productivity in that activity, while the country with the bubble has reduced it because less people were developing it. Therefore its not profitable to do that activity in the country with the bubble anymore (a industrialized country is always more productive than a low wage country, regardless of the mambo jambo to justify China growth).

The sensible solution would be to allow the after bubble correction to happen, purge all the malinvestments, save and invest again under a sound monetary system, to start new productive industry. The problem is that the government reaction is usually to lower more the interest rates to re-inflate the bubble, with the effect of destroying even more productive industry, that is sent to other countries.

And it gets to a point that the capital structure is so distorted that not even 0% interest rates and crazy money printing re-inflates the bubble.

And here we are.

[Hawker]

hugolp that doesn't make sense.  The lack of competitiveness of low skilled workers affects hard money countries like Japan and Germany, "mostly hard money" countries like the UK and whatever you call the US which has a low inflation but is a reserve currency.  They say "correlation doesn't mean causation" but what you posted doesn't enen have correlation.

[hugolp]

hugolp that doesn't make sense.  The lack of competitiveness of low skilled workers affects hard money countries like Japan and Germany, "mostly hard money" countries like the UK and whatever you call the US which has a low inflation but is a reserve currency.  They say "correlation doesn't mean causation" but what you posted doesn't enen have correlation.

Germany and Japan are not hard money countries.

[Hawker]

hugolp that doesn't make sense.  The lack of competitiveness of low skilled workers affects hard money countries like Japan and Germany, "mostly hard money" countries like the UK and whatever you call the US which has a low inflation but is a reserve currency.  They say "correlation doesn't mean causation" but what you posted doesn't enen have correlation.

Germany and Japan are not hard money countries.

So is there any hard money country in the world?

[stevendobbs]

...Communism is at the helm for the simple reason that it goes against human nature and no statist project that goes against human nature will last for long.

what version of humanity are you speaking for - the last couple of decades are very little compared to of order, 100,000 years of human existence.

What is human nature? that question must not focus on some narrow period of history, but over the totality. And for a very long period, human society was hunter gatherer. You could say we've been communist for a 100,000 years, and that is human nature:

but now we have technology, transport, communications. The challenge is to maintain our human nature - a desire for fairness, a rejection of hierarchy, in this new technological age.

[stevendobbs]

Again, I am telling you the reason there is high unemployment is not due to the chinese taking the jobs, its due to the policies that the western countries have followed. The chinese "taking the jobs" is just a consequence. If we would have followed different policies there would not be this unemployment.

free trade is what did it. free trade drove the credit crunch.

note how they call it free trade, rather than de-regulated trade. As though they are trying to sell and idea using the powerful word, "free"

free is a powerful word otherwise supermarkets wouldn't promote brands by way of, "buy one get one FREE"

We all know its a dumb, yet it clearly works.

Likewise, FREE Trade - is a trick.

[stevendobbs]

I have some more time to loose, so come on, state what do you think is this left wing economic policy that happen before the 70's and how is this right wing policy that happened after the 70's. Please be concise and avoid rethoric.

it is not time to lose, but an opportunity for you gain a broader understanding.

prior to late 1970's UK fiscal stance steadily improved, the politics was highly focused on trade balances, subsidies were used to support industry and the state owned the commanding heights of the economy.

And that direction was set by Clement Atlee, our best ever prime minister.

And then Thatcher reversed all that. Privatisation programs, asset fire sales of housing stock and of course, de-regulation. The tories believe in the idiotic concept of Trickledown Effect which I'm sure you will agree is bullpoo.

But by placing their entire vision upon ideas that down work, such as trickledown, such as blind de-regulation of trade. The axis of idiocy, Thatcher and Reagan wrecked fundamentally crippled two advanced economy's http://a-new-red-dawn.blogspot.com/2010/11/reagan-thatcher-axis-of-idiocy.html

slight error in the colouring of the graph, but the % of gdp to debt is accurate.


Belief in trickledown effect manifests itself in flatter tax rates thus risking the entire economies efficiency to the Utility Penalty (and indeed, the UK gdp/hour worked is very low compared to peer nations, even during pre-crash)

And besides the Utility Penalty of rising gaps in disposable incomes justified by the false belief in Trickledown Effect, the consumer votes gets skewed increasing the cost of living for the majority.

Under these ridiculous neoliberal polices, UK GINI has risen so most people are worse off - right wing economics has a huge opportunity cost associated with it.

[hugolp]

^^ stevendobbs I asked you for a comprehensive list of what you consider "left wing policies before the 70's" and "right wing policies after the 70's" not a polical speech like the one you posted. I specifically asked for no rethoric. You might want to try again.

PS: And please dont use the term neo-liberal. Its just a propaganda term with no real economic definition (if it had a concise and exact definition it would not work well as propaganda tool).

[stevendobbs]

^^ stevendobbs I asked you for a comprehensive list of what you consider "left wing policies before the 70's" and "right wing policies after the 70's" not a polical speech like the one you posted. I specifically asked for no rethoric. You might want to try again.

PS: And please dont use the term neo-liberal. Its just a propaganda term with no real economic definition (if it had a concise and exact definition it would not work well as propaganda tool).

you attempt to define the terms of the debate arbitrarily - which is a tactic. No mr moderator, I won't play your game.

To summarise,

past 30 years, neoliberal economic policy has been in vogue.
privatisation, flatter taxes, deregulated trade have been the prevailing policy direction for the past 30 years. And the graph and others I've posted show context. you can see how fiscal stance has stopped improving since thatcher. A similar, arguably worse thing happened in the USA.

The western economies will remain in doldrums until the left takes over in the USA and the EU - and eve then, its touch and go. There is some serious structural problems with regards to energy policy that might constrain growth.

[MatthewLM]

Seems to me there has been much more regulation and regardless of what there was before, any regulation is deadly.

[hugolp]

^^ stevendobbs I asked you for a comprehensive list of what you consider "left wing policies before the 70's" and "right wing policies after the 70's" not a polical speech like the one you posted. I specifically asked for no rethoric. You might want to try again.

PS: And please dont use the term neo-liberal. Its just a propaganda term with no real economic definition (if it had a concise and exact definition it would not work well as propaganda tool).

you attempt to define the terms of the debate arbitrarily - which is a tactic. No mr moderator, I won't play your game.

To summarise,

past 30 years, neoliberal economic policy has been in vogue.
privatisation, flatter taxes, deregulated trade have been the prevailing policy direction for the past 30 years. And the graph and others I've posted show context. you can see how fiscal stance has stopped improving since thatcher. A similar, arguably worse thing happened in the USA.

The western economies will remain in doldrums until the left takes over in the USA and the EU - and eve then, its touch and go. There is some serious structural problems with regards to energy policy that might constrain growth.

If by "define terms of the debate arbitrarily" you mean that I asked you to define your terms the way you liked so everybody could understand what you were saying... Yet you keep using rethoric to avoid defining in a clear and concise way what you say.

Your refusal to define the terms you are using is a clear indication for anyone with a sane and rational mind.

If you are up for a rational debate and start by leaving the rethoric aside and define your terms (the way your prefer) in a strict way, I gladly will continue. If you keep with rethoric and nothing else, Im done.

[stevendobbs]

If by "define terms of the debate arbitrarily" you mean that I asked you to define your terms the way you liked so everybody could understand what you were saying... Yet you keep using rethoric to avoid defining in a clear and concise way what you say.

Your refusal to define the terms you are using is a clear indication for anyone with a sane and rational mind.

If you are up for a rational debate and start by leaving the rethoric aside and define your terms (the way your prefer) in a strict way, I gladly will continue. If you keep with rethoric and nothing else, Im done.

many of us will have seen your tactic before. Do x,y,z or i'm not playing, look you didn't do what i told you to do. I win, goodbye?!

The world is complex and it doesn't fit neatly into concise lists and boxes, which is why I choose to narrate to background of important political-economic trends such as GINI over time, fiscal stance and highlight changes of policy through intervening decades.

again,

prior the 1980's the UK had a much lower GINI, it had a tight fiscal policy as evidenced by the graph i presented. The rich were taxed a high % of there income. The nation manifestly was pretty socialist - not just re-distributive but a major player in the economy from point of view of ownership with major corporations in state hands.

The economic policy prior to the 1980's was relaxed about use of subsidy.

Since the 1980's subsidises have been reduced and indeed, the EU single market takes a dim view of nations propping up companies against the market.

The elimination of subsidy and tarif protections is a huge change.

[stevendobbs]

Seems to me there has been much more regulation and regardless of what there was before, any regulation is deadly.

how can any regulation be deadly?

consider trade rules on standardization? then buying and sellers can be clear on what they are trading.

Environmental protection protects ecological services - a huge part of the economy which the market ignores.

[Hawker]

stevendobbs - you ignore the fact that since about 1970, large parts of our society have been uncompetitive.  If you have 5-10% of the population who are permanently insecure, a lot of the rest of the society will feel the downward pressure.  And this is nothing to do with politics; it happened in socialist France as much as Thatcher's England.  If you focus on inequality, you are focused on the symptom, not the cause.

[stevendobbs]

As a whole, the nation WAS competitive - why? because we had a balanced and stable finances.

the 1970's period is unfortunate.

Opec strangled the world economy by restricting oil supply, it hurt us a great deal, and led, in error to people voting in thatcher.

Energy is key to economic growth, the rest are just symptoms.

--

fundamentally, an hours work, is worth an hour - if a worker here is not competitive vs a labourer in a foreign land, then perhaps its just a fault of the currency markets and other features which act to make the playing field hilly - one of the many market failures we constantly deal with - So that justifies subsidy and tarrif barriers to correct for market failure.

[Hawker]

As a whole, the nation WAS competitive - why? because we had a balanced and stable finances.

the 1970's period is unfortunate.

Opec strangled the world economy by restricting oil supply, it hurt us a great deal, and led, in error to people voting in thatcher.

Energy is key to economic growth, the rest are just symptoms.

--

fundamentally, an hours work, is worth an hour - if a worker here is not competitive vs a labourer in a foreign land, then perhaps its just a fault of the currency markets and other features which act to make the playing field hilly - one of the many market failures we constantly deal with - So that justifies subsidy and tarrif barriers to correct for market failure.

http://www.bbc.co.uk/iplayer/episode/b00scpzn/The_Box_That_Changed_Britain/

Prior to 1970, if you imported from the far East, shipping costs were 30% of the product price.

By the time containerisation was done in 1984, its was less than 2%.  In the UK, its cheaper to get goods from China to Felixstowe than it is to get them from Felixstowe to Manchester.

That alone removed the competitive advantage being local offered many workers.  And there has been a lot of technology changes, like just in time stocking, that have similar effect.  Those who rely on unskilled labour are at a permanent disadvantage.  They have been for 40 or so years.  If you consider that Google and others are now piloting driverless vehicles, you can expect another tranche of delivery men, truckers, taxi drivers and so on to be added to the uncompetitive group.  

And no political change really affects that underlying fact.  Socialism can't make up for the fact that we have huge amounts of surplus labour.

[stevendobbs]

And no political change really affects that underlying fact.  Socialism can't make up for the fact that we have huge amounts of surplus labour.

the disparity in earnings is the cause of surplus labour.

[Hawker]

And no political change really affects that underlying fact.  Socialism can't make up for the fact that we have huge amounts of surplus labour.

the disparity in earnings is the cause of surplus labour.

Yes - an English worker earns more than a Chinese worker so if its the same product and carriage costs are 1%, the English worker will be unemployed.  Make that apply across 5% of the labor force and you have a recipe for labour being squeezed and capital making better returns.

[hugolp]

And no political change really affects that underlying fact.  Socialism can't make up for the fact that we have huge amounts of surplus labour.

the disparity in earnings is the cause of surplus labour.

Yes - an English worker earns more than a Chinese worker so if its the same product and carriage costs are 1%, the English worker will be unemployed.  Make that apply across 5% of the labor force and you have a recipe for labour being squeezed and capital making better returns.

Then why does Germany exists? And why does the industry does not go to Africa where the price of labour is way cheaper than anywhere else?

It seems to me your theory is too simplistic.

[stevendobbs]

carriage costs don't matter - as we can correct for market error in labour costs between territories with subsidy and tarrif barriers - but ideologically, these tools have been removed.

the reason for surplus labour coming from disparity is because elites require little labour to serve them being few in number, and yet demand the highest priority of production to go to them.

solution is to to level out disposable income with the tax system, and then growth and employment will increase.

[Hawker]

And no political change really affects that underlying fact.  Socialism can't make up for the fact that we have huge amounts of surplus labour.

the disparity in earnings is the cause of surplus labour.

Yes - an English worker earns more than a Chinese worker so if its the same product and carriage costs are 1%, the English worker will be unemployed.  Make that apply across 5% of the labor force and you have a recipe for labour being squeezed and capital making better returns.

Then why does Germany exists? And why does the industry does not go to Africa where the price of labour is way cheaper than anywhere else?

It seems to me your theory is too simplistic.

I agree its simplistic.  And you make a good point about Germany. 

German unemployment is always about 8% and that doesn't include the people who are kept on the payrolls by a taxpayer subsidy.  My understanding is that the "natural" rate of unemployment is 2 or 3%.  So you have that 5% of people sloshing about the German labour markets as well.  And Germany is becoming more inequitable as a result.  Google "german inequality" and you'll see what I mean.

Even though what I say is simplistic, it seems to me that having a large group of people whose labour is surplus to requirement will affect inequality.  Of course there are other factors.  But adopting a socialist agenda while that lack of competitiveness is still there will achieve nothing.  For the same reason, I think a US budget stimulus will generate jobs in China more than in the US and worsen the trade deficit.  Increased demand without increased manufacturing competitiveness won't do much for US jobs.  But that's off topic to stevendobbs thread so lets not go there

[stevendobbs]

Even though what I say is simplistic, it seems to me that having a large group of people whose labour is surplus to requirement will affect inequality.  Of course there are other factors.  But adopting a socialist agenda while that lack of competitiveness is still there will achieve nothing.  For the same reason, I think a US budget stimulus will generate jobs in China more than in the US and worsen the trade deficit.  Increased demand without increased manufacturing competitiveness won't do much for US jobs.  But that's off topic to stevendobbs thread so lets not go there

Another option: Rather than compete, don't. Alls we really require is a supply of energy

[Hawker]

Even though what I say is simplistic, it seems to me that having a large group of people whose labour is surplus to requirement will affect inequality.  Of course there are other factors.  But adopting a socialist agenda while that lack of competitiveness is still there will achieve nothing.  For the same reason, I think a US budget stimulus will generate jobs in China more than in the US and worsen the trade deficit.  Increased demand without increased manufacturing competitiveness won't do much for US jobs.  But that's off topic to stevendobbs thread so lets not go there

Another option: Rather than compete, don't. Alls we really require is a supply of energy

No iPhones.

You may think its shallow but if you try to get a no free trade policy adopted, that's what your opponent will say and you will not get it passed.

[JeffK]

And no political change really affects that underlying fact.  Socialism can't make up for the fact that we have huge amounts of surplus labour.

the disparity in earnings is the cause of surplus labour.

Yes - an English worker earns more than a Chinese worker so if its the same product and carriage costs are 1%, the English worker will be unemployed.  Make that apply across 5% of the labor force and you have a recipe for labour being squeezed and capital making better returns.

Then why does Germany exists? And why does the industry does not go to Africa where the price of labour is way cheaper than anywhere else?

It seems to me your theory is too simplistic.

Africa is where China gets their exploitable labor/resources (mostly resources though)

[FinShaggy]

Working on Starting a Bitcoin town here:
https://bitcointalk.org/index.php?topic=216139.0

[Rez]

Socialism is used to describe a broad range of ideas. I regard those that wish for redistribution of wealth to be socialists for examples, others would not.

a 1000 years of socialism

Was the Nazi reference on purpose?

Nazis were socialists after all, so....

Nazis were socialists like the Tea Party are lobbyists for the chai trade.

[xxjs]

is bitcoin a great leap forward for international socialism?

Socialism is taking from some and give to some by force. Socialism is about herding the subjects to start quarreling about which group is injustly receiving and which is unjustly taken away from. Socialism is sacrificing yourself and others to the collective. Socialims is being part of society when you are supposed to pay, and outside when you expect to receive. Socialism is about using all powers to feed the society beast, including debasing money.

Obviously, sound money like bitcoin doesn't support that. Rather, sound money like bitcoin support laws between men and women that are based on nature, individual rights and voluntary action, resulting in prosperity and life.

[ronimacarroni]

no, bitcoins doesn't aim at making everyone equal.
But it will make everyone richer.
I think, maybe...

[MonkeyBear68]

Concentration of wealth, when it occurs to extremes, is merely wasted. Unfortunately for humans the trickle-down effect does not work. The 1% in America have 32 Trillion sitting in offshore accounts. The US deficit is only around 16 Trillion. If the 1% had been taxed properly to pay for their wars that mostly benefitted them, then the US would not have a deficit. Furthermore most of the 1% are psychotic in their level of indifference to the plight facing the lower class in society.

In order to provide for the needs of an increasingly larger world population a global collectivist society is the only one that will succeed. Humans by their very nature have leaders and followers, this has been the case through all history. Mathematics prove we cannot all be rich; someone needs to buy the products produced. Time and time again governments are called upon to bailout businesses that are too big to fail.

Global collectivism provides for leadership (elites) and re-distribution of the remaining wealth in a fair manner. The internet has brought about Digital Collectivism which is becoming more and more prominent every year. In 100 years we will all be cybernetic machinations of such. Resistance is Futile.

[nrd525]

Bitcoin doesn't do much for socialism as it does little to promote equality and democracy.  It is more likely that Bitcoin, like many new forms of business, will create a small rich elite.

Bitcoin does challenge the power of the state, but whether this attack is a strong one remains to be seen. It is equally possible that the state will be able to regulate Bitcoin (by regulating the conversion of fiat into Bitcoin) and use the blockchain to track transactions - effectively making anonymity very difficult.

The bitcoin forum does encourage socialism by exposing some of the flaws of capitalism, unregulated markets, and excessive speculation.  The securities and lending sections of this board show what happens when capitalism goes to its logical (and libertarian) conclusion. You get scams and securities that are jokes.

[ronimacarroni]

Bitcoin doesn't do much for socialism as it does little to promote equality and democracy.  It is more likely that Bitcoin, like many new forms of business, will create a small rich elite.

Bitcoin does challenge the power of the state, but whether this attack is a strong one remains to be seen. It is equally possible that the state will be able to regulate Bitcoin (by regulating the conversion of fiat into Bitcoin) and use the blockchain to track transactions - effectively making anonymity very difficult.

The bitcoin forum does encourage socialism by exposing some of the flaws of capitalism, unregulated markets, and excessive speculation.  The securities and lending sections of this board show what happens when capitalism goes to its logical (and libertarian) conclusion. You get scams and securities that are jokes.

Wait what?
That's not what I got out it.
Look at mtgox, it used to be number 1 and no people are getting fed up with it because its witholding funds, so they're taking their business elsewhere.
Same with butterfly labs.
Also nobody is owed a garauntee on the money they lend/borrow. You do the background check.
Besides that its cool that bitcoins doesn't lose value.Well in the long run, maybe

[Mike Christ]

The bitcoin forum does encourage socialism by exposing some of the flaws of capitalism, unregulated markets, and excessive speculation.  The securities and lending sections of this board show what happens when capitalism goes to its logical (and libertarian) conclusion. You get scams and securities that are jokes.

And in return, the people who were made stupid by regulation and security are forced to take responsibility for their own actions, leading to a wiser, more alert, and hardened people, capable of self-reliance without the crutch that is Momma Government.

When you, nrd525, spot a scam, do you:

A. Realize what you're looking at is a scam, thanks to having seen or been scammed before, and thus avoid being scammed

or

B. Ignore it and recklessly do as you please, and if anything goes wrong, bitch and moan about how Bitcoin has failed and capitalism can never work, and beg that some central entity be capable of issuing Bitcoin refunds so the next time someone recklessly does as they please, their sheepishness, which caused their turmoil to start, will overcome any sensibility they could've attained by taking the moment to analyze their situation and resort to the obvious option, A, but instead relied on Momma Government to magically fix their problems when they either couldn't or simply refused to take ownership over their own actions

Of course you would go for option A, but what about all the stupid people, incapable of thought and unable to handle any freedom whatsoever?  Obviously they need hand-holding.  Since, you know, they might otherwise have to do the horrible act of figuring things out on their own, and we can't have people thinking for themselves--just think of the anarchy that would ensue!

[MonkeyBear68]

And in return, the people who were made stupid by regulation and security are forced to take responsibility for their own actions, leading to a wiser, more alert, and hardened people, capable of self-reliance without the crutch that is Momma Government.

When you, nrd525, spot a scam, do you:

A. Realize what you're looking at is a scam, thanks to having seen or been scammed before, and thus avoid being scammed

or

B. Ignore it and recklessly do as you please, and if anything goes wrong, bitch and moan about how Bitcoin has failed and capitalism can never work, and beg that some central entity be capable of issuing Bitcoin refunds so the next time someone recklessly does as they please, their sheepishness, which caused their turmoil to start, will overcome any sensibility they could've attained by taking the moment to analyze their situation and resort to the obvious option, A, but instead relied on Momma Government to magically fix their problems when they either couldn't or simply refused to take ownership over their own actions

Of course you would go for option A, but what about all the stupid people, incapable of thought and unable to handle any freedom whatsoever?  Obviously they need hand-holding.  Since, you know, they might otherwise have to do the horrible act of figuring things out on their own, and we can't have people thinking for themselves--just think of the anarchy that would ensue!

And if the person promoting the scam is lying about it, then it might be hard to identify it as a scam. Regulations and laws are meant to protect against such scenarios as well. The smartest person in the world can still be lied to.

[nrd525]

Check my posts -successfully identifying scams since Pirateat40 (before Micon).  Fortunately, I think I've only been scammed for a total of $40 in my entire life and that had no impact (as it wasn't security related) on my ability to question Pirate's operation, Patrick Harnett, or the more recent CasinoBet one.  It's my background in economics (and minimal investment experience) which is more useful.

Even if someone isn't planning on running a scam, with no effective enforcement mechanism - it makes sense for a lot of companies to run away with the money. Especially any company that has a lot of investor money (ex. Just Dice) in it or a product which is highly profitable (like an ASIC).  Now the fact that many of these people don't run away with the money is due to a combination of not wanting to take risks and thinking they'll make more money in the longterm from maintaining a successful business.

Note I'm not a huge fan of regulation. I'd prefer to use transparency and democracy.

[hlynur]

imo bitcoin itself is like a toy that humanity has to figure out how it fits in our ecosystem.

right now it's docking in markets where its advantages (anonymous, nearly no regulation, to a a point taxfree) are needed most.
Drugmarket, Gambling, Illegal services & Moneylaundering. last one will boom in the coming years of chaos with regulative approaches until most of the gaps are closed.

The web as a global network with it's own world is in need of a tool for fast transactions of value and payment for virtual services (social networks, website hosting etc) and goods (first all kinds of digital media, then niche products etc), so that will be the next market to dock. (we're scratching heavily there already)
Hopefully this huge buying power triggers btc to spread back into everyday use of the real world economy accompanied by a political movement speaking out for more transparency like public taxwallets of governments and other stuff.

I see a lot of potential for regional cryptocurrencies in local communities interchangeable with each other and backed up by btc (there are already some succesful analog predecessors that helped communities stumble through the crisis with little to no harm because they had a nearly closed circle of value exchange).
I'm no expert on this subject but that approach fascinates me since some years, this decentralisation seems like a good way of handling some of the problems. (not sure if it could work on a larger scale in big cities with a lot of import of global resources though)

yea well...bitcoin utopia 


on the other side....when i see how snowden affair leads to ridiculously few outcrys in public and demonstrations in the western world... (everybody's just trying to deal with it and go on as if nothing has happened, war in syria is already replacing public attention from this subject in the media)
then I'm sure we have to go through the Middle Ages of the Digital Era first until there's hope for any of these ideas.
And that would in fact mean btc becomes more like another new cashcow market in the hands of the above mentioned rich elite able to control spread of wealth even more than today.

there are always two sides of a coin. (internet went the same way -  humanity benefit a lot but at the same time we see more centralised control than ever before in its history)



interesting world we live in 

[c4p0ne]

An old article and another interesting indictment of Bitcoin from Marxists.org. Except for some fundamental misunderstanding of hacking, I think the piece makes some realistic and uncomfortable points. I wonder what the people here think. Capitalist responses welcome, but keep it CIVIL.

The digital currency Bitcoin has hit the headlines in recent times for its novelty, as well as for its phenomenal rise in price over the past few years. But how much of the Bitcoin sensation is hype, and what is the reality?

Bitcoin is a method of payment and a digital currency that was launched in 2009. It has been described as “cash for the internet” and the price of all bitcoins in circulation currently amounts to USD 1.5 billion. One of its key features is its decentralized structure that prevents regulation of the currency by a central authority or bank. It is this aspect of Bitcoin that is trumpeted by Utopian libertarians who see it as the embryo of capitalism without regulation or control, a dream that is already being scuppered by the realities of the modern world. Others see Bitcoin simply as an opportunity to get rich quick and then get out before the bubble bursts, and in that sense Bitcoin paints a microcosmic picture of the nightmarish short-termism and irresponsibility that is the hallmark of capitalism in decline. It is hardly surprising that such a phenomenon should take off in the midst of a global crisis of capitalism.

According to some, the technology pioneered by Bitcoin and other so-called crypto-currencies is potentially game-changing when it comes to online transactions, with as much potential for a revolution in payment processing as Napster was able to achieve with music downloads. However, what is already becoming clear is that this technology can never be used to its full potential under capitalism: to really unleash the power of technology in all fields, not least in online transactions, we require a socialist plan of investment in technology and a plan for the use of technology to develop the economy in the interests of need and not profit.

Bitcoin as a currency

The most hardcore Bitcoin enthusiasts insist that the crypto-currency hails a brighter future free from human error and untrustworthy governments. The economic collapse in Cyprus in 2013, which led to the government seizing a percentage of the deposits of the wealthiest accounts in Cypriot banks, was seized upon by Bitcoin developers who pointed out that such a situation would never arise if only those deposits were held in Bitcoins, out of reach of governments who need bailing out when crisis hits. Similarly, supporters of Bitcoin point to the eye-watering quantitative easing that is being carried out, most notably in the USA, and the damage and instability the tapering of that easing is causing in the emerging markets, as evidence of the irresponsibility of central banks when it comes to managing currencies.

By contrast to normal currencies, which are backed by central banks and governments, the Bitcoin network is maintained by volunteers, who receive bitcoins in return for maintaining the network (a process referred to a “mining”). Transactions are indelibly recorded on the ‘block-chain’ – a ledger of all transactions ever made - of which every Bitcoin user has a copy. This decentralized setup makes it impossible for one person or entity to control the currency; instead any changes to the network have to be agreed upon by all those who work to maintain it. This may look good on paper, but the proof of the pudding is in the eating; and in the complex and dynamic reality of the modern economy Bitcoin seems to be leaving libertarians with an unpleasant taste in their mouths.

The value of a bitcoin is incredibly volatile. On multiple occasions it has seen its growth mushroom, only to collapse by as much as 50% in a matter of hours. Recently it increased in value by 60 times over the course of a single year, reaching over USD 1,200 in December 2013, only to have fallen to around USD 650 today. It goes without saying that such a volatile commodity makes for an extremely bad currency. Bitcoin enthusiasts insist that the currency will stabilize given time and wider adoption of Bitcoin, but this seems unlikely.

Means of exchange

The use of a commodity as a currency gives it a two-fold function. Firstly it makes it into the universal equivalent in which the value of all other commodities can be measured. And secondly it makes it into a means of exchange. These two functions are closely linked. Historically, precious metals like gold have been used for this task because they concentrate a lot of value - i.e. socially necessary labor time - into a physically small and durable object. This is possible because gold, as a rare metal, requires a significant quantity of socially necessary human labor to extract and form into a tradable commodity. It therefore does not require much gold to reflect the value of large quantities of other commodities, making it easier to transport and thus facilitate trade. Its physical property of durability also recommends it as a means of exchange. Clearly gold fulfills both the functions required of a currency; but it’s also clear that the second function of currency, as a means of exchange, could be fulfilled with even greater ease by banknotes or even just electronic transfers. What matters when it comes to currency as a means of exchange is not the intrinsic value of the currency but the ease with which it can be moved around.

However, whenever tokens representing valuable commodities replace the commodities themselves it’s important to remember that the tokens are only replacing one of the functions of currency – that of means of exchange. The function of being a universal equivalent in which all value can be measured must still be fulfilled by a commodity that has a real value (i.e. contains socially necessary labor), something that banknotes or electronic signals hardly possess. For this reason, any tokens that are used as currency must be backed up by a commodity of real value, i.e. they must ultimately represent the actual value of commodities in circulation in the economy.

In the modern world banknotes and electronic transfers clearly aren’t convertible into metallic money, e.g. gold. Going into a high street bank and demanding the equivalent in gold of a ten pound note is not likely to get you very far. Instead the currency is guaranteed by the government and backed up by the strength of a nation’s economy. Today, banknotes fulfill the function of money as a means of exchange, while the strength of the nation’s economy as a whole provides the value against which goods and services can be measured and traded. So where does Bitcoin fit into all this? Clearly it is a means of exchange, but it is not backed up by a government and a national economy. Bitcoins do not have an economic anchor and so their value is entirely driven by speculation and subject to the whims of investors. Such an empty currency really cannot be considered a currency at all as it is entirely crippled by contradictions.

Money as a social relation

There is an upper limit on the number of bitcoins that will ever be produced, which has been set by its developers, and which will not be reached until the early 22nd Century. But this is entirely arbitrary. Marx points out that when it comes to money, the amount in circulation in a given economy is determined by the sum of all the prices of the commodities being exchanged, divided by the speed at which those commodities change hands. In other words, the amount of money needed in circulation for the economy to function properly cannot be set arbitrarily or on a whim, but is determined by the strength and development of the economy as a whole. Bitcoin is not tied into an economy; in fact it is extremely hard to find real commodities to buy with bitcoins, and therefore the number in circulation is entirely divorced from the real world.

It is this abstract attitude to the concept of money that seems to plague every aspect of Bitcoin. Tyler Winklevoss, one of the twins who claim that Facebook was their idea and who are high-profile backers of Bitcoin, declared “we have elected to put our money and faith in a mathematical framework that is free of politics and human error”. Strangely for a man so closely linked with the world of social networking, Winklevoss seems unable to grasp the fact that money is, by definition, social.

It is not possible to separate money from the societies that use it, nor to place it outside of the influence of the real people who use money throughout the wider economy. This is the reason, historically, why central banks arose in the first place – not as a dark conspiracy forced on society by incompetent governments, but as a result of the development of trade using a universal equivalent. Money, as a universal equivalent, seeks to neutralize the “private” aspect of commodities in general by making all commodities convertible on the same terms. In that sense it is a socializing instrument and can no more be separated from society and placed under mathematical control than trade as a whole could be.

Bitcoin transactions are currently illegal in Russia, and Chinese banks have been banned from handling Bitcoin transactions. Singapore has classed bitcoins as goods rather than currency, but Britain has scrapped plans to charge VAT on the mining of bitcoins. The USA is reviewing the situation and has yet to indicate what its stance in relation to the crypto-currency will be. Finland classifies it as a “digital commodity” not a currency, and Germany treats it as private money. The status of Bitcoin at the moment is clearly not that of a legitimate currency, but it is also obvious that governments are not entirely sure in what way they should classify it.

Could Bitcoin ever become a bona fide currency as its advocates argue? Many point out that it’s simply a case of getting Bitcoin to be more widely accepted – it’s a self-fulfilling prophecy whereby if more people use it then it will become a viable currency because it will have economic activity backing it up. This is a classically abstract and Utopian idea. Purely hypothetically this idea may be true, in much the same way that if everybody simply stopped obeying the law then the law would no longer exist. But an idea is not correct simply because it looks good on paper; its validity is proven only by its capacity to be implemented in practice.

Governments and central banks

It seems highly unlikely that Bitcoin will gain wide acceptance for a number of reasons. Governments and central banks are unlikely to give up their control of national economies, precisely because that is the method by which they seek to regulate the economy. For example, since the slump of 2008/9 quantitative easing has been carried out on an extraordinary scale in order to try to keep money flowing around the economy. The good sense and impact of this policy on millions of workers around the world has been discussed elsewhere. It is important to note for now that this is viewed by the bourgeoisie as one of the only solutions they have to the crisis. Any threat to take that kind of control out of their hands to be dispersed through a decentralized structure is going to be met with the full weight of the bourgeoisie and their state apparatus in opposition to such an attempt.

For Bitcoin to be widely adopted it would have to offer something better for people than the currency they already use. Bitcoin’s advocates explain that its advantage over traditional currencies is that it can stop meddling by governments. In other words it affords the wealthiest people, who already have a great deal of money or who have enough money and time to “mine” bitcoins, the security of knowing that when economic crisis comes their money will not be threatened by governments looking to raise funds to bail themselves out. This may be an attractive prospect for all the wealthy Russians who lost money when the crisis took hold in Cyprus, but for the vast majority of people Bitcoin, as a method of exchange, offers them nothing because they have no money to exchange for commodities in the first place. Whether we use Bitcoin or Dollars, it makes no difference if we have none of either. Bitcoin as a currency has no impact on the ownership of the commanding heights of the economy and therefore is of little interest to the vast majority of ordinary people.

Finally, Bitcoin appears to be extremely vulnerable to hackers, with the most recent in a long list of scandals being the bankruptcy of Mt Gox, the largest Bitcoin exchange in the world that handled 70% of Bitcoin transactions, following a major attack in which USD 500 million worth of bitcoins were stolen. Also, already this year USD 2.5 million has been stolen from the Silk Road 2.0 website (which uses bitcoins to trade) and Flexcoin (a Bitcoin bank) was forced to close following the theft of USD 600,000 from its system.

Some of these thefts have been possible due to bugs in the software that supports the bitcoin network, demonstrating the vulnerability of an entirely digital currency. Because Bitcoin transactions and owners are anonymous, trading with Bitcoin is akin to handing over a bag of cash down a dark alleyway; and storing it is like keeping wads of cash in a shoe-box under your bed. Even firms who specialize in keeping bitcoins safe seem unable to protect themselves against hackers, so to expect everyone to have the technological skill to protect their computers sufficiently to avoid the theft of their life savings is frankly ridiculous. Banks spend billions protecting themselves from theft; for Bitcoin to be widely adopted would require similar efforts on the part of each and every member of the public – such a situation would be impossible.

A Utopian fantasy

Making Bitcoin a currency is not simply a case of declaring it to be so and watching it take off. At the moment it clearly is not a currency, given its abstract nature and lack of an economic anchor, and its prospects for becoming one are slim. It exists in a world that already has historically evolved and established currencies, compared to which it has little to recommend itself for the majority of people. On top of that, at a time of economic crisis when governments are doing all they can to regulate their own money supply, and with increasingly nationalist inclinations as is inevitable at a time of capitalist crisis, a decentralized, international currency will be met with firm opposition if it tries to begin to tether itself to any kind of real economic activity.

As if this wasn’t demoralizing enough for anarcho-capitalist Utopians, recent developments have burst another of their bubbles. Bitcoin is supposed to prove that building a system that runs perfectly well without centralization is possible. This is yet another fundamentally mistaken idea of how the economy works. Bitcoin was set up as a perfectly decentralized system, but to expect it to begin working on a capitalist basis and remain decentralized is pure fantasy. Everything changes and nothing remains the same – under capitalism that change takes the form of concentration of capital and, in a capitalist system where capital equals power, that means the centralization of power in the hands of a smaller and smaller number of people.

Ghash.io is a bitcoin mining pool that allows members of that pool to aggregate their resources and processing power to mine bitcoins more effectively. So far this single mining pool (in essence a cartel) has gained more than 40% of the total computational power on the bitcoin network. All that is required is for this cartel to gain 51% of the processing power for it to be able to control the network entirely, giving it the power to reverse transactions and invalidate other people’s currency.

Under capitalism centralization is inevitable. As has already been pointed out, central banks are not the result of conspiracy or accident, but the inevitable product of economic development and trade. The Utopians behind Bitcoin dream of giving people power over their own lives; but long as capitalism exists that will never be possible. We should not see centralization as the enemy, but rather the class that controls these centralized institutions. Only by bringing banks and businesses under democratic workers’ control can we socialize production and allow people to govern their own lives.

Bitcoin as an investment

Marx points out that, when it comes to tokens as currency, those tokens only have a use-value if they have an exchange value. In other words, unless those tokens are accepted as a valid currency then they have no useful function whatsoever and therefore have absolutely no value (even if human labor has gone into producing them). Bitcoin is barely a valid currency since it has almost no economic anchor (pretty much the only place it’s possible to buy things with it is the illegal Silk Road website) and yet bitcoins are changing hands for extraordinary amounts of money and are therefore attracting the attention of investors. Why is this happening?

This is a classic example of a speculative bubble. Bitcoin is new, fashionable and often in the news. Its cult status, anti-government aura and lack of clear regulation or understanding of it by the authorities makes it attractive to investors looking for somewhere to make some quick cash. Because it does not have an economic anchor it is very susceptible to waves of speculation that can have a snowball effect in pushing the price of bitcoins up – hence a 60-fold increase in price over the course of a year.

Of course, the same factors that mean the price can increase rapidly also mean that it can collapse in the blink of an eye. News of hacking or other malfunctions have caused Bitcoin prices to take a tumble multiple times in a short space of time. Mere rumors, or rumors of rumors, can cause jumpy investors to abandon ship which, without any real value to back it up, has the capacity to cause Bitcoin prices to collapse entirely, wiping out fortunes in the process.

Investing in Bitcoin is therefore a risky but potentially profitable business. At the present time this is a rare thing. Investment in Britain has fallen 25% since 2008; many large companies have zero debt on their balance sheets (meaning that they are not borrowing any money to invest); there is GBP 750 billion in cash sitting in British banks, owned by big business, that is not being invested; and, most damning, industrial production and trade is in the doldrums all over the world and yet the stock markets are booming. Clearly there is a lot of money sloshing around the world, and yet none of it is being invested in real production as there’s no profit to be realized there. This is a process that has been going on for years, but has taken a particularly acute form since 2008/9.

The contradiction of overproduction

The reason for this is the crisis of overproduction that is paralyzing the global economy. In the last period capitalism has been extended well beyond its limits, primarily thanks to the vast expansion of credit. Working people, who are paid less than the value of the goods that they produce, were able to borrow money to allow them to continue consuming. But this can only go so far, and for the last five years the economy has been suffering the hangover for the previous period of wild borrowing. There is now a glut of commodities in the economy, which means that capitalists cannot profit from investment – why invest in more production when you can’t use the productive capacity you already have?

The result is that capitalists look to speculation and gambling on the stock markets to make their money. In such circumstances, Bitcoin is an attractive prospect. It holds next to no real value, but it is something that can be invested in, traded and made a profit out of. No new value is created – it is simply making money out of money – but from the capitalists’ point of view that is the only thing that matters.

Speculative bubbles such as this are prone to burst, and Bitcoin is extremely volatile and has seen its price rise and fall dramatically since its conception. Normally such volatility would put investors off, with most looking to invest in something with more stability and a higher likelihood of a good return. For this reason, bubbles as flimsy as this one do not normally last very long. But Bitcoin has proven fairly resilient to the enormous shocks that its volatility gives rise to, and despite halving in price on a number of occasions it continues to attract investors. This is a reflection of the desperation of the capitalists who are completely starved of investment opportunities. There are so few avenues of profitable investment available at the moment that something a volatile as Bitcoin remains a viable investment.

Such activity is clearly not sustainable and has little to do with Bitcoin as a currency. Unlike the anarcho-capitalists who have an ideological attachment to Bitcoin, most investors are simply using it as a vehicle to make money. As soon as the bubble bursts completely or a new fashionable investment opportunity comes up, they will discard Bitcoin without a second thought. Such speculation is interested in making money out of money, not in investment in real production or in supporting libertarian pipe-dreams.

Bitcoin as a technology

According to some enthusiasts, while the currency itself may not be viable, the technology behind Bitcoin is of great interest, with serious potential for “revolutionizing” the way that online transactions take place. The technology allows for direct transfers from person to person, like handing over cash, without expensive payment providers such as PayPal or Visa acting as middle men and charging high fees for each transaction, as well as by removing high fees for cross-border payments.

This “revolutionary” potential for Bitcoin has already been seized upon by the major investment bank JP-Morgan Chase who, last year, filed for a patent for an online payment system that is based on Bitcoin technology. But this serves to highlight the real problem when it comes to technology under capitalism. The reason for high transaction fees is not a lack of sufficient technology, but rather that firms are out to make a profit out of transactions, rather than trying to facilitate exchange so that people’s needs can be met.

In other words, a revolution in the way that online transactions are carried out will not come from different technology but a change in who owns and controls that technology and in what way. For all its technological innovation, if crypto-currency is owned by JP-Morgan or some other capitalist firm we can guarantee that it will not be used unless it can make profit. It is this capitalist economic system that holds back the development and use of new technology – it is therefore capitalism that must be the target of our revolution.

In a socialist economy we could make full use of all the technology that currently exists for the fulfillment of need rather than the pursuit of profit. We would also be able to direct investment in new technology where it is needed most, as opposed to what might make the most money for an individual capitalist investor. This is not something that can be achieved under capitalism, nor is it something that can be achieved by demanding decentralization and anarchy. Only by socializing the means of production through centralization and democratic control can this potential be realized.

The future of Bitcoin

Bitcoin has little prospect for becoming an accepted currency, neither is it a long term investment option. While its technology has the potential to be developed, this will never be used to its full capacity as long as it is confined within the limits of capitalism. Bitcoin represents little more than an anarcho-capitalist pipe-dream and a speculator’s playground, and in that sense reflects the failures of capitalism and the inadequacy of anarchist, libertarian economic ideas. In short, looking to Bitcoin for revolutionary economics will leave us looking in vain.

Faced with an unprecedented crisis of capitalism and attacks on living standards people are looking to radical economic solutions and the ideas of socialism are gaining an increasing echo. People are looking for ideas to turn society on its head and for real control and ownership over their own lives. In this enormously turbulent period that we are entering into, fashionable speculative bubbles and trendy anarcho-libertarian ideas will disappear into insignificance and be overshadowed by open class struggle and socialist revolution.