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

[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.

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[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.