The failures of socialism

[MSimon]

Too numerous to list.

But we do have a few outstanding examples.

The USSR. Mao's China. And why does socialism fail? It destroys information.

http://www.nobelprize.org/nobel_prizes/ ... cture.html

The lecture is entitled: The Pretence of Knowledge

The gist - markets give real information on supply and economic demand. When socialists set prices (commonly in the West that is done by subsidy and taxation these day - which avoids the appearance of a command economy while having the same effect). The most notable recent examples are Germany and Spain giving up subsidies for "renewables" after determining that they were wrecking their economies. A study done in Spain found that the Spanish economy lost 2+ jobs for every job created in the renewable sector. Quite a multiplier. German businesses have threatened to go elsewhere due to the rising cost of electricity.

Energy is life.

===============

What else destroys information? Increasing the money supply without a corresponding increase in production. Done with enough vigor money ceases to be even a short term store of value.

[Schneibster]

There's never been socialism. It always devolves into authoritarianism, which is what you're in favor of (see Hayek, von Mises, Stalin, Koch and Koch, the Iranian Grand Ayatollah).

[Schneibster]

As far as actual successes of socialism the Scandinavian countries spring immediately to mind. Neither Russia nor China has ever actually seen socialism. Germany never did either, no matter how much hay they tried to make out of being "socialist." Their socialist revolutions were all captured by totalitarians; authoritarians like Hitler. Stalin and Mao.

Calling these socialism is risible to say the least.

Socialism is simply the sharing of the work of production and the profits of production among the same people, instead of one set doing the work and the other taking the money. If you want the money do the work. Just sayin'. Nazi "socialism" was redistribution of a small portion of the wealth to keep the proles quiet. Soviet "socialism" was little better. Chinese "socialism" was worst of all, actually destroying resources to pretend to creating others that are "better," that are actually of inferior quality. Then paying people who went along with the imaginary plan with grain stolen from people who you pretend didn't grow it and starve to death for crimes against the state.

[choff]

I'm wary of John Maniac Keynes and Lunatic Von Mises, Henry Hazmatt's scary too.

[Schneibster]

You want to know about neo-Keynesianism and post-monetarism.

[choff]

Parents were Social Credit supporters, you might want to do a search on "The Chicago Plan", which goes well beyond anything advocated by they or other monetary reformers.

[Schneibster]

"The Chicago Plan"

Never heard of it. Doesn't sound promising; Chicago is freshwater. Libertardian. Right wingnut.

You know who John Kenneth Galbraith was? Have you read The New Industrial State?

How about James Galbraith? Have you read this: http://utip.gov.utexas.edu/papers/Colla ... ivered.pdf

The Death of Monetarism, more or less, delivered in the very memorial lecture of the chief monetarist himself.

In March 2008. Yes, just then. Just six months before.

By the son of the Neo-Keynesians.

You know, there are times when you see stuff like this and you wonder, even an old cynical atheist like me, whether there has to be a god simply to create incredibly amusing and juicy anecdotes just like that one, just to embarrass those who presume to pretend to speak for it/her/him/them.

[Jccarlton]

I've been doing some research and thinking about this. Some links:
http://pjmedia.com/richardfernandez/201 ... nd-losers/
The video at the end is scary. An entire country ruined for decades over Mao quoting a banner, "Peoples Communes are good."
The problem is that once an organization gets to be large the distance between real information and the people who need to act on it get more sclerotic and distractions like the global warming fiasco generate noise that kills the signal.:
http://alfinnextlevel.wordpress.com/201 ... -stupidly/
The institution's red tape stifles creativity and cronyism puts the wrong people in charge:
http://www.discovery.org/a/15171
http://sultanknish.blogspot.com/2013/06 ... hings.html
I've been thinking about this since I was restructured and we have a sick system all up and down.

[Schneibster]

OK, well I went and looked up The Chicago Plan and found out it was a (probably disastrous) plan to create a central monetary authority in an era when there was no instantaneous communications, much less the ability to make monetary commitments of any size instantly. This is the problem, you see; the Chicago Plan is just another type of Gold Standard, and it won't work any better; in fact, even worse since it can inflate far worse than gold which at least has intrinsic value.

It just looks like another funnel to the rich people and the banksters. Sorry don't think I'll put any of my money in there.

[choff]

Modeled by IMF economists, conclusion was !0% growth for USA economy if this 1930's banking and monetary reform plan was enacted today.

https://www.imf.org/external/pubs/ft/wp ... p12202.pdf

Actually, nothing to do with the gold standard, replacement of bank created debt based currency with government created credit based currency.

[Schneibster]

So you don't know why the two are equivalent?

Here, let me help: the velocity of new money is minimized by the majority capture of most of the existing money by the extremely rich.

It doesn't matter how you change the percentages. It won't matter how much you let the banks lend. If you don't take the money away from the ultra rich the same thing will happen again in ten years. You're just kicking the can down the road.

The same thing comes with a hard gold standard; sooner or later the ultra rich have it all and you've got the same problem again.

You see? The two are equivalent.

It's really quite simple; either you redistribute some way or the ultra rich collect it all and the economy stops. There isn't anywhere to hide.

I honestly think when someone makes their second billion you take the first one away and give them a big medal. Nobody can spend a billion dollars. And if I'm wrong and they can, then make it big enough they can't. Say ten billion. Whatever, just beyond anyone's reasonable ability to spend. And after that, either make them invest it all, in stocks, or tax it all away. Use it or lose it.

It's just a thought, it probably has lots of little problems, but it gets rid of the big problem: as long as the money's all in the ultra rich's bank accounts it's not in the global economy and everyone is poor. Are we all gonna just sit here sucking our thumbs because we can't freakin' think what to do??!!?

[choff]

They're not, in the debt based, only a fraction of government debt is caused by government spending over and above revenue, usually about 10% of all government debt. The other 90% of government debt is compound interest on the principal.

In the latter, the government creates the money necessary to cover revenue shortfalls, no borrowing required, hence no compound interest, only one tenth as much money is created.

Hence the currency is only debased a fraction as much as the debt based system where private banks create ten times as much of the currency to purchase government bonds.

As Thomas Edison said,"If the Nation can issue a dollar bond it can issue a dollar bill.
The element that makes the bond good makes the bill good also. The
difference between the bond and the bill is that the bond lets the
money broker collect twice the amount of the bond and an additional 20%.
Whereas the currency, the honest sort provided by the Constitution pays
nobody but those who contribute in some useful way. It is absurd to say
our Country can issue bonds and cannot issue currency. Both are promises
to pay, but one fattens the usurer and the other helps the People."

[choff]

I think we're talking past each other a bit, I though you were comparing a credit based system to the current system, you thought I was comparing a gold based system to the current system.

[Schneibster]

I repeat, what do you do about the low velocity of money due to the hoards of the ultra rich?

You're just ignoring it, it's not going to go away.

After reading the cross-post, no, it wasn't just a cross-post, you're honestly ignoring the hoards of the ultra rich and their (hidden, in your reckoning) effect on every other organ in the economy.

[Schneibster]

You can take 90% of the hoards from 90% of the ultra rich and affect their collective lifestyles minimally if at all. With this money you can fix the economy, restoring the money to circulation and making everyone rich. You'll pay with slight inflation, which can be offset with some minor monetary policy if it even peeps too loud.

What you have to make sure of is that you don't take the money away from the few billionaires who are actually doing something important with it. That's where it gets interesting.

Then you start taking it from the banks. That's when the bitter squalling and whining starts. They may try to blackmail us with the economy again. Reminding them that all they are is money, and if the money fails so do they will generally take care of that. If necessary we can catch some of them cheating and put them behind bars and strip them clean. The rest will quickly fall in line after that.

I think it's time we stopped letting banksters run the economy. It's too important to be open to their obvious greed. They can have a house like the rest of us and less than three cars. When they start getting uppity and buying big ticket items it's time to investigate them.