What economic approach would actually work?

[Seamus Fermanagh]

I am told that supply side thinking fails.

I am told that the free market fails.

I have seen directed economies fail.

So what works? Or is it just a matter of who is raping whom at the moment and nothing can be done?

[Gilrandir]

I am told that supply side thinking fails.

I am told that the free market fails.

I have seen directed economies fail.

So what works?

China.

[Montmorency]

I don't really know that much about it yet, abstract academic theory least of all. I've been browsing Noam Chomsky and contemporary socialist (or quasi-) sources like Current Affairs and Jacobin for the past year, and linked sources through them. People aren't kidding when they say that socialist ideology is probably the most highly elaborated ideology in extent. The best course of action to advance my knowledge might be to find and talk to local socialists face to face. Conveniently for the sake of my local political involvement, many of them likely double as community activists.

My impression now is that if the far left had to agree on one thing, it would be: radical subsidiary democracy, everything, everywhere. Government, civics, industry, family...

This civilization would involve a comprehensive cultural reeducation of humanity, and probably a dismantling of nations and private markets and even (fixed or involuntary) hierarchy. It would have to do this while increasing its capacity to tackle global issues relating to climate, resource management, and space exploitation (use a different term). I'm not sure what it could take to reach this point, or what steps would be absolutely necessary or testamentary. I'm sure thinkers have ventured answers here and there, ones that I'm unaware of to assess. It is possible to argue contrarily from human nature. It is also a fair point that appeals to "human nature" fail to account for our ignorance of the bounds of human nature(s). On the other hand, I suspect that whatever human nature is, it will become obsolete soon.

The modern left's vision is probably brand-new territory for the species. We really have tried everything else. We haven't tried the cyberdystopian libertarian/fascist syndicrat vision, but it is what we're aiming for by inertia today. I feel like all the other conservative or libertarian worlds just look like modernized variants of historical societies. The average Democrat's ideal of welfare state capitalism is unstable, since capitalism and its oligarchy are more resilient than any particular configuration of state. The New Deal was the high tide, and reproducing it woudln't resolve the world's ills; to try would be a waste of initiative.

The bottom line: I do not believe that socialists can attain their ends - how far short they fall, I can't say. I partially agree that these ends are good or worthwhile. I am convinced that most right-wing values and projects are ruinous, depraved, and worth opposing.

It would be a real coup to engineer some kind of Big Tent Marxism, coöpting morally-aligned conservatives to work beside them and help refine the ideology. Another challenge is absorbing the broader left ("liberals") and the minimally political. Count this pessimistic statist in. March to the edge of the 100 Acre Woods.

Spoiler Alert, click show to read: 

We need to get new songs, though. Music plays an important role in politics, and there need to be songs other than the Internationale, Soviet marches, or punk/industrial metal.

[Sarmatian]

That's like what my cat does, except she says "for food" at the end.

Concerning the question, I don't believe an entire new system is needed. Capitalism can work with strong government oversight. We need separation of corporations and state.

[Furunculus]

state capitalism that succeeds in not falling into corporatism?

[Montmorency]

That's like what my cat does, except she says "for food" at the end.

Concerning the question, I don't believe an entire new system is needed. Capitalism can work with strong government oversight. We need separation of corporations and state.

How can you maintain this oversight, if it's always been inadequate? Where does it come from? Do we continue to live just as we have for the past generation? How, and is it desirable?

state capitalism that succeeds in not falling into corporatism?

Like contemporary Russia and China. But it also applies to mid-century social democracies - which is our genealogy. Where are we now? It's the norm for the modern state, charged with managing at least the contours of production and enterprise, including the investment of public funds toward private (or personal) profit. State capitalism may just be inextricable from oligarchy, whether the ruler is a corporate board, a dictator, or a vetted bureaucrat.


One point: It's off the mark to consider socialism as straightforwardly a state ownership and control of, or intervention in, economic functions or institutions. If this were a proper definition, we would have to consider history as evincing an overwhelmingly socialist model for millenia, up to the modern era. But Louis XIV was no socialist. I now realize that state ownership is always merely a means to an end, democratic communal determination. (I would have known this had I done the assigned reading in the Communist Manifesto way back when.) It has been hard to swallow for someone whose instincts run towards top-down paternalistic statism, but it looks like for socialism to truly ever succeed you can't have any trace of capitalism remaining in either the culture or the economy. Capitalism will always beat socialism where given a chance, like rock beats scissors.

I wouldn't be surprised if there's a sci-fi story from the 1970s that follows a prosperous Galactic Socialist Federation where, oh no! Some of the backwater colonies have degenerated into late-stage capitalism and are ruthlessly sweeping across systems in a tide of military and economic imperialism.

At least I'm never wrong to be pessimistic.

[edyzmedieval]

Most of the criticism for state oversight comes from the fact that it is very susceptible to corruption, and strong state oversight always ends up in considerable cronyism, siphoning of budgets from public projects and other issues.

[Sarmatian]

How can you maintain this oversight, if it's always been inadequate? Where does it come from? Do we continue to live just as we have for the past generation? How, and is it desirable?

Finding a perfect system is impossible, because it doesn't exist. Human error and human nature will always be a factor, in any system.

I don't know how to achieve strong government oversight, but then again, I'm pretty sure our ancestors a several centuries ago couldn't have imagined separation of church and state.

One of the problem in the west is that media can be used to redirect people's anger, and that media is ultimately only responsible to its owners. It should be their job to point out toxic influence of corporations in most western countries, but as media is owned by corporations , that's not going to work.

Lobbying should be made illegal. Politicians should come under more scrutiny about the source of their money, not just whether they payed taxes or not. Funding political campaigns should be illegal. The state should provide all possible candidates with a fixed amount of funds that they are able to spend on campaigns. Trying to influence a politician should be akin to trying to bribe officials and should come with heavy fines and possible jail time.

[Crandar]

Spoiler Alert, click show to read: 

We need to get new songs, though. Music plays an important role in politics, and there need to be songs other than the Internationale, Soviet marches, or punk/industrial metal.

[Agent Miles]

Since this is a site about war games, I'll post the obvious. An economic model that keeps your homeland out of the dustbin of history is what works. I suppose that would be "Darwinian Economics". A nation with an economic model that is less than optimal would adapt less well to its environmental threats, i.e. competing nations' economies, and become extinct. The free market economy of the U.S. became a directed economy under central authority during WW II to survive. Agrarian Tsarist Russia of 1914 would not have survived as well as industrialized Stalinist Russia of 1941 did. Both Japan and Germany enjoy a better economy today from peaceful expansion than they ever had under autocratic domination. On a grand scale, governments fiddle with free enterprise and central planning to reach some Goldilocks zone where enough wealth is generated to pay for social, environmental and industrial expansion. Depending on the type of government, the livelihood of the citizens is encouraged to achieve this or they are simply enslaved either by regulation or literally. Total capitalism or total socialism requires total autocracy, so (mostly) free nations are left with an economic stew of competing models. Free market capitalism has the best feedback loop. If your friend saw a movie that sucked, most likely you will spend your money on a different movie. Under total central planning, everyone must watch all the movies whether they suck or not, because they have a deep moral lesson and the masses must be indoctrinated...blah, blah blah. What works is some form of capitalism so that we don't produce biplanes with jet engines and a mix of central planning authority so that the jets we do make follow safety, environmental and buyer-beware regulations.

[Montmorency]

Finance appears to have a situation where not only is the money they have enough to bribe people in all sorts of ways, but also the complexity of what they do is extreme. Oh, and the processes are done to the standard of Criminal Law which as for funsies it also crosses borders makes getting anyone guilty of anything next to impossible.

I believe that if all industries had the same method of oversight as Pharma does in the UK, there would be a lot less corruption since the risk : reward would look very different.

There exists the suggestion that corporations "as persons" be held accountable to criminal law, possibly including the death penalty. One problem is that the individuals involved still have the opportunity to scatter and continue their bad behavior elsewhere.

If corporations were democratically built and controlled by the whole body of their workers, each individual would have a clearer liability and a corporate criminal penalty would impinge on the whole body responsible. If the offense was a small conspiracy concealed from oversight, then normal criminal statutes can also still apply (whereas the contemporary centralized structure gives executives the dodge that someone below them must have been at fault).

And I wonder just how British pharmaceuticals compare to others in "corruption". If they're big enough, then can't limited fines be accounted for as but one more operating cost, as long as the profits of rule-breaking exceed the costs? That seems to be the case across industries and countries. Cost-benefit analysis is supposed to estimate the costs and the benefits separately for each affected party, not just the corporation; forcing the inclusion of negative externalities on environment and society seems like a worthy approach.

Finding a perfect system is impossible, because it doesn't exist. Human error and human nature will always be a factor, in any system.

I don't know how to achieve strong government oversight, but then again, I'm pretty sure our ancestors a several centuries ago couldn't have imagined separation of church and state.

One of the problem in the west is that media can be used to redirect people's anger, and that media is ultimately only responsible to its owners. It should be their job to point out toxic influence of corporations in most western countries, but as media is owned by corporations , that's not going to work.

Lobbying should be made illegal. Politicians should come under more scrutiny about the source of their money, not just whether they payed taxes or not. Funding political campaigns should be illegal. The state should provide all possible candidates with a fixed amount of funds that they are able to spend on campaigns. Trying to influence a politician should be akin to trying to bribe officials and should come with heavy fines and possible jail time.

Maybe not perfect, but what if it has a 'baked-in' tendency?

Lobbying: you need a system to allow people to voice their concerns and desires. Right now this is channeled through lobbying and advocacy groups, many of which aren't all that rich. And they're specialized, while it's difficult for any one person to have a clear position on all the possible issues. That could be separated into two difficulties then, but they're equally important. How would, for example, the government hear about the importance of various environmental issues beyond at best a popular mandate not to Saruman everything?

Influence: there would be absolutely no recourse or contact with politicians once they have been elected? I'm not sure eliminating communication between the elected and the electorate is a good idea. Rather than trying to seal off the leadership from the public, maybe putting more of the public in leadership and oversight roles...

Since this is a site about war games, I'll post the obvious. An economic model that keeps your homeland out of the dustbin of history is what works. I suppose that would be "Darwinian Economics". A nation with an economic model that is less than optimal would adapt less well to its environmental threats, i.e. competing nations' economies, and become extinct.

It's actually correct, I think, to say that economic and political forms as a rule are determined not by individuals but by physical factors like geography and technology (and you may add culture, though calling it physical is tendentious). In short, the economic system of any one time and place tends towards the one that is most effective or productive given other constraints. So agrarian feudalism works with one set of the variables, venture commercial oligarchy in another, and so on - an unstable equilibrium, since the variables are always shifting. Achieving socialism (which doesn't have to mean Leninist central planning) would somehow require breaking with history, if socialism doesn't turn out to simply be the natural outcome of other political, economic, social and technological trends into the future.

[Gilrandir]

The free market economy of the U.S. became a directed economy under central authority during WW II to survive. Agrarian Tsarist Russia of 1914 would not have survived as well as industrialized Stalinist Russia of 1941 did.

And industrialized France didn't survive. Surviving can be explained by more than the type of economy.

[Husar]

I just looked for "modern communist music" on Youtube and it's not promising....

Much better to promote via association:

Spoiler Alert, click show to read: 

Or maybe just an excuse for me to post a Cuban salsa video.

[Sarmatian]

Yeah, I stick to the classics.

[CrossLOPER]

I am told that supply side thinking fails.

I am told that the free market fails.

I have seen directed economies fail.

So what works? Or is it just a matter of who is raping whom at the moment and nothing can be done?

You can have whatever system you want, so long as you have proper oversight to make sure that the system works as its supposed to work. Some systems are easier to implement than others, usually those that function naturally with minimal guidance. Capitalism is favorable in this respect, but there is always some jacka** that wants more for less. The key is to apply just enough pressure to make sure that corruption stays down. The best way to do this is to decentralize oversight as much as possible and make sure to pay those in charge very well. It's easy to bribe one guy. It's simply not feasible to bribe everyone.

[rory_20_uk]

You can have whatever system you want, so long as you have proper oversight to make sure that the system works as its supposed to work. Some systems are easier to implement than others, usually those that function naturally with minimal guidance. Capitalism is favorable in this respect, but there is always some jacka** that wants more for less. The key is to apply just enough pressure to make sure that corruption stays down. The best way to do this is to decentralize oversight as much as possible and make sure to pay those in charge very well. It's easy to bribe one guy. It's simply not feasible to bribe everyone.

Absolutely. In my "bubble" of Pharmaceutical Medicine in the UK when we promote we are all constantly scared of the PMCPA and their powers to award fines, force recall of material (massive cost and loss of face) or just pop in for an audit - £15k a time, at least three and the company is practically paralyzed in the meantime. There are no"rules" just guidelines. Meaning if the PMCPA think you have done something wrong, you have. The only appeal is a Review Board who will triple the fine if they don't agree.

Compare that to the ICO. Utterly toothless who seem to do as little as possible and state they want to work with the offender which appears to be sending an email over with their thoughts and that's about it.

Finance appears to have a situation where not only is the money they have enough to bribe people in all sorts of ways, but also the complexity of what they do is extreme. Oh, and the processes are done to the standard of Criminal Law which as for funsies it also crosses borders makes getting anyone guilty of anything next to impossible.

I believe that if all industries had the same method of oversight as Pharma does in the UK, there would be a lot less corruption since the risk : reward would look very different.

[Fisherking]

I am told that supply side thinking fails.

I am told that the free market fails.

I have seen directed economies fail.

So what works? Or is it just a matter of who is raping whom at the moment and nothing can be done?

Great questions Seamus.

Supply side economics is simply Neoliberalism. It is corporatism where government pick the winners and losers. Just exactly what we have had for decades, to one degree or another. It is Mercantilism with a new name.

Free market is something that has been in short supply for well over a century. Its chief criticism is over production. This cry comes mainly from large producers being out competed by startups and upstarts. The key opposition to the concept is its lack of government control and regulation. Most people have been convinced that they are too incompetent to decide for themselves what is a good product or service. People today have never had economic liberty to be participants and producers in the economy. They can see no further than consumerism. The modern mind set is of employment by a producer rather than being a fully productive contributor in the economy. Government and Corporate propaganda have taking all confidence from them and they fear what that freedom would bring.

Directed economies all fail eventually. What emerges out of the chaos is always a free market until government moves in to set limits, pick the winners and losers and start the process over again.

None are perfect. There are always winners and losers. But of them all the free market is the most natural way of establishing trade and custom. It should be the one where people are most able to make a living but it does depend on one’s wits.

[Montmorency]

Great questions Seamus.

Supply side economics is simply Neoliberalism. It is corporatism where government pick the winners and losers. Just exactly what we have had for decades, to one degree or another. It is Mercantilism with a new name.

Free market is something that has been in short supply for well over a century. Its chief criticism is over production. This cry comes mainly from large producers being out competed by startups and upstarts. The key opposition to the concept is its lack of government control and regulation. Most people have been convinced that they are too incompetent to decide for themselves what is a good product or service. People today have never had economic liberty to be participants and producers in the economy. They can see no further than consumerism. The modern mind set is of employment by a producer rather than being a fully productive contributor in the economy. Government and Corporate propaganda have taking all confidence from them and they fear what that freedom would bring.

Directed economies all fail eventually. What emerges out of the chaos is always a free market until government moves in to set limits, pick the winners and losers and start the process over again.

None are perfect. There are always winners and losers. But of them all the free market is the most natural way of establishing trade and custom. It should be the one where people are most able to make a living but it does depend on one’s wits.

Neoliberalism is definitely distinct from mercantilism. Mercantilism serves the wealth of the state, but neoliberalism serves the wealth of the market - state and consumer both for the market: "dictatorship of the shareholder". From national economic and political oligarchies to a transnational economic (so by extension political) oligarchy. One has affinity to central control, the other to soup.

Why do you think individual consumers are more competent to evaluate products than the producers who create them or the purveyors who market them?

What's the difference in "freedom" if winners and losers emerge without state backing, as opposed to with state backing? It's all government. That's exactly what a "free market" looks like if you prioritize government (e.g. republican) function from maintaining the public good to effervescing private commerce on the largest possible scale. Large organizations and wealthy individuals (self-aggrandizingly "job creators" and "innovators")will certainly seek to dominate at the expense of the common weal - why is it acceptable for these not even to be nominally accountable to something? Why does Property need a despot?

All economies fail - because societies collapse. Be careful about how you use "directed" economy, as all economies beyond happenstance itinerant exchange rely on some organization.

[Pannonian]

Great questions Seamus.

Supply side economics is simply Neoliberalism. It is corporatism where government pick the winners and losers. Just exactly what we have had for decades, to one degree or another. It is Mercantilism with a new name.

Free market is something that has been in short supply for well over a century. Its chief criticism is over production. This cry comes mainly from large producers being out competed by startups and upstarts. The key opposition to the concept is its lack of government control and regulation. Most people have been convinced that they are too incompetent to decide for themselves what is a good product or service. People today have never had economic liberty to be participants and producers in the economy. They can see no further than consumerism. The modern mind set is of employment by a producer rather than being a fully productive contributor in the economy. Government and Corporate propaganda have taking all confidence from them and they fear what that freedom would bring.

Directed economies all fail eventually. What emerges out of the chaos is always a free market until government moves in to set limits, pick the winners and losers and start the process over again.

None are perfect. There are always winners and losers. But of them all the free market is the most natural way of establishing trade and custom. It should be the one where people are most able to make a living but it does depend on one’s wits.

See Brexit for an example of an unregulated free market. You have two sides competing for consumers (votes). They offer directly competing products in a zero sum contest within a finite period. There is no regulation whatsoever on the products each side offers. Once the consumer has made their choice and paid their money, the winner is under no obligation to provide what they'd advertised, because there is no regulation governing what they'd promised and what they will deliver. And they are free to use whatever advertising they want to say what they want, again without regulation on their accuracy.

From what I've read on the development of regulatory standards for food and medicine, I wouldn't want any kind of rollback on regulations. China is the result when you have lax regulatory standards.

[a completely inoffensive name]

Building on Pannonian's point, regulation is part of a series of checks and balances between capital and labor. Like with government itself, to maintain it requires eternal vigilance. I don't see how unregulated markets are a solution to our imperfect life just as I don't see how anarchy is a solution to our imperfect politics.

[Fisherking]

Neoliberalism is definitely distinct from mercantilism. Mercantilism serves the wealth of the state, but neoliberalism serves the wealth of the market - state and consumer both for the market: "dictatorship of the shareholder". From national economic and political oligarchies to a transnational economic (so by extension political) oligarchy. One has affinity to central control, the other to soup.

Why do you think individual consumers are more competent to evaluate products than the producers who create them or the purveyors who market them?

What's the difference in "freedom" if winners and losers emerge without state backing, as opposed to with state backing? It's all government. That's exactly what a "free market" looks like if you prioritize government (e.g. republican) function from maintaining the public good to effervescing private commerce on the largest possible scale. Large organizations and wealthy individuals (self-aggrandizingly "job creators" and "innovators")will certainly seek to dominate at the expense of the common weal - why is it acceptable for these not even to be nominally accountable to something? Why does Property need a despot?

All economies fail - because societies collapse. Be careful about how you use "directed" economy, as all economies beyond happenstance itinerant exchange rely on some organization.

Sorry for the wall of text.

As far as I can determine the difference between Neoliberalism and Mercantilism in practice is that Mercantilism regulates businesses for the benefit of the state while Neoliberalism regulates business for the benefit of the politicians and their friends.

The Oligarchy exists because government decides economic winners and losers. The business interests write the laws and regulations and pass them off to their friends in government.

Government intervention in the economy has never worked. It has distorted the market, again selected winners and losers and robbed those at the lower end of the economic scale through inflation. Keynesianism is at the heart of this. Its goal is gradual inflation and the elimination of deflation. This assures those higher up the economic scale keep what they have and can build upon it while eliminating the benefits of saving or storing wealth.

A free market is not consumer vs. producer. A free market is the free exchange of goods and services. Both parties are participants. Each offer something the other wants and they arrive at a contractual agreement to make an exchange. If either party is dissatisfied then no exchange occurs. If one uses sharp practices or their item fails to live up to expectations they will eventually suffer the consequences.

What you fail to see is economic liberty. When government decides who may be a producer and who must remain a consumer it is not freedom. Each person participating has something to offer. Be that goods, services, or labour. Under the current system most of us are limited by government control of the the market place. There are many hoops to jump through if you want to offer goods or services so you are primarily left with labour. This creates a situation where your contribution is of limited. Rather than the market deciding whether your contribution is worthwhile the government has made exclusions.

You have limited your self to the current paradigm. You don’t see your self outside the current set of controls place upon you.

What makes it the business of government how an economy works? Their picking of winners and losers is cronyism. Governments have different mandates. Few if any are actually concerned with the wellbeing of the population. More so what they can extract without causing rebellion. Government’s stated purpose in the U.S. was the protection of the rights of the citizenry. That is not their wellbeing or happiness.

Government can claim a mandate for regulating corporations as they are a creation of the state. There is no such mandate for individuals. Regulations skew and retard competition which assures that those with the most means retain their positions regardless of the quality of their work. In the U.S. regulation began at the request of large corporations who were being out competed and such regulatory practices continue to this day.

Regulated Economies collapse, unregulated ones re-aline to meet conditions. If there were a glut in one sector you would have to adjust your product or move into another.

See Brexit for an example of an unregulated free market. You have two sides competing for consumers (votes). They offer directly competing products in a zero sum contest within a finite period. There is no regulation whatsoever on the products each side offers. Once the consumer has made their choice and paid their money, the winner is under no obligation to provide what they'd advertised, because there is no regulation governing what they'd promised and what they will deliver. And they are free to use whatever advertising they want to say what they want, again without regulation on their accuracy.

From what I've read on the development of regulatory standards for food and medicine, I wouldn't want any kind of rollback on regulations. China is the result when you have lax regulatory standards.

Brexit is not an example of unregulated free market. It is an example of buying a pig in a poke. Had you bought a defective product you would have recourse in court. Buying the word of politicians leaves you with little recourse short of open rebellion, which is about the only thing that would get their attention.

Products that are unsatisfactory don't get bought or re-bought. Those which cause real harm have legal recourse, and always have.

Building on Pannonian's point, regulation is part of a series of checks and balances between capital and labor. Like with government itself, to maintain it requires eternal vigilance. I don't see how unregulated markets are a solution to our imperfect life just as I don't see how anarchy is a solution to our imperfect politics.

The division between Capital and Labour is part of the regulatory construct. Think of what you might produce or what service you could provide to earn a living if there were no limitations placed on you. It is a question of skills and knowledge to provide what others would exchange for. In the last 60 years or so we have moved from a country where most people were self employed to one where most people are employed by a corporation or government. Intellectual property has shifted from individuals who created it to the corporations who employe them via government regulation.

[Husar]

What exactly is the advantage of deflation over inflation?
You appear to be saying that if Johnny Doe saves 200 bucks in his trailer and they increase in value over time, it somehow advantages him compared to Sir John Doe who has stashed away 20 million in the cellar of his mansion that increase in value at the same percentage every year and also owns shares in several corporations that increase in value even more. Why?

Regarding the need for legislation, how does the market account for environmental problems for example? Most peoples' economic (and other) interests are short-term and do not take into account mid-term or long-term planning. We're not too different from Dodos who like the excitement of the jump but do not take into consideration the end result of the fall. Regulation is a means to force us onto a more sustainable path.