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Why free market capitalism works

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uspe
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11 Jun 2019, 9:32 pm

amazon and wapo - algorithm shopping and feminism/lgbt - inflation and demand die in darkness - socialism rising like a phoenix



Last edited by uspe on 11 Jun 2019, 9:38 pm, edited 2 times in total.

Antrax
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11 Jun 2019, 9:33 pm

shlaifu wrote:
Antrax wrote:
shlaifu wrote:
Antrax wrote:
shlaifu wrote:
Antrax wrote:
I have no issue with affordable safety nets and poverty alleviation. The problem is when the social programs overrun the economic productivity of a country as seen in Greece, the economy collapses under the crushing debt. Norway, Sweden et. al have a huge natural resources to population ratio that allows them to provide some hefty social benefits without outrunning their economies.


That's not what ruined greece, btw.


Please entertain me with tales of what actually ruined Greece. Be as factual as you can be.


let me google that for you:
https://en.wikipedia.org/wiki/Greek_government-debt_crisis#Causes


Usually good in an argument when citing a source to have that source support what you're actually arguing.

From the Wikipedia article (emphasis mine):
"In January 2010, the Greek Ministry of Finance published Stability and Growth Program 2010.[30] The report listed five main causes, poor GDP growth, government debt and deficits, budget compliance and data credibility. Causes found by others included excess government spending, current account deficits, tax avoidance and tax evasion"

Now where did that deficit and overspending come from:
Greek "social expenditure" (as a percent of GDP)

2000: 17.8
2005: 19.9
2010: 24.9
2015: 25.4

United States "social expenditure":

2000: 14.3
2005: 15.6
2010: 19.4
2015: 18.8

Canada "social expenditure":
2000: 15.8
2005: 16.1
2010: 17.5
2015: 17.6

OECD average "social expenditure":
2000: 17.4
2005: 18.2
2010: 20.6
2015: 19.0

Source: https://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG#

Now Greece isn't the only country with high social expenditure, but they did have a debt crisis because their government spending outpaced their economic growth.



Except that the numbers you give show social expenditure in % of GDP.
Until 2008, social expenditure is at comparable percentage with US and other countries.
THEN the crisis hits and AFTER the crisis the percentage goes up.
Note: after the crisis, GDP goes down, so if social expenditure stays the same, its percentage of GDP goes up.


Now to some things in the wikipedia article you seem to have not read carefully: Greece was/is corrupt and bad at collecting taxes.
Greece had the highest military spendings in % of GDP in the EU.

Their social spending however, according to the numbers you found, were average.

They cut down on that now, though, meaning: cutting pensions, cutting healthcare (I read about widespread multiple use of single-use items in hospitals.)
They did however buy two submarines from Germany in 2010 and paid their debt to German banks, which would otherwise have collapsed.
\

Greece GDP 2010: 299.4 billion
Greece GDP 2005: 247.8 billion

Greece social expenditure 2010: 74.5 billion (24.9%)
Greece social expenditure 2005: 49.3 billion (19.9%)

Relative social spending 2010 to 2005: 1.51 or a 51% increase in social spending. Over a 5 year period.

If you're going to correct me it helps to actually be correct.


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Antrax
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11 Jun 2019, 9:55 pm

TheRevengeofTW1ZTY wrote:
Why don't we just create a new system that works in favor of everyone? That seems like the best solution to me. Not "You HAVE to be Capitalist!" or "You HAVE to be Socialist!" Or "You HAVE to be Communist!"

I think we have been brainwashed to think that we have to abide by such archaic forms of governments. We need something new that works for everybody ASAP!


All of these come with different flavors and nuances. Purely capitalist and purely communist societies largely don't exist in this world currently or historically.

The reasons I advocate for capitalism are several:

1. Freedom. At its purest form capitalism gives each person individual agency. The only limitations are that of resources.

2. Efficiency. Free markets have by and large been the most efficient forces at allocating resources in the history of the world.

3. Robustness to outliers. This is what I mostly was trying to explain in my original post. While other systems can be broken by outlier persons, free market capitalism actually depends on them.

I recognize that there is a need for some social interventions as our society cannot be ruled by efficiency alone, but caution that due to scarcity of resources these interventions need to be chosen carefully as we cannot afford everything that we want.


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shlaifu
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12 Jun 2019, 4:11 am

Antrax wrote:
shlaifu wrote:
Antrax wrote:
shlaifu wrote:
Antrax wrote:
shlaifu wrote:
Antrax wrote:
I have no issue with affordable safety nets and poverty alleviation. The problem is when the social programs overrun the economic productivity of a country as seen in Greece, the economy collapses under the crushing debt. Norway, Sweden et. al have a huge natural resources to population ratio that allows them to provide some hefty social benefits without outrunning their economies.


That's not what ruined greece, btw.


Please entertain me with tales of what actually ruined Greece. Be as factual as you can be.


let me google that for you:
https://en.wikipedia.org/wiki/Greek_government-debt_crisis#Causes


Usually good in an argument when citing a source to have that source support what you're actually arguing.

From the Wikipedia article (emphasis mine):
"In January 2010, the Greek Ministry of Finance published Stability and Growth Program 2010.[30] The report listed five main causes, poor GDP growth, government debt and deficits, budget compliance and data credibility. Causes found by others included excess government spending, current account deficits, tax avoidance and tax evasion"

Now where did that deficit and overspending come from:
Greek "social expenditure" (as a percent of GDP)

2000: 17.8
2005: 19.9
2010: 24.9
2015: 25.4

United States "social expenditure":

2000: 14.3
2005: 15.6
2010: 19.4
2015: 18.8

Canada "social expenditure":
2000: 15.8
2005: 16.1
2010: 17.5
2015: 17.6

OECD average "social expenditure":
2000: 17.4
2005: 18.2
2010: 20.6
2015: 19.0

Source: https://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG#

Now Greece isn't the only country with high social expenditure, but they did have a debt crisis because their government spending outpaced their economic growth.



Except that the numbers you give show social expenditure in % of GDP.
Until 2008, social expenditure is at comparable percentage with US and other countries.
THEN the crisis hits and AFTER the crisis the percentage goes up.
Note: after the crisis, GDP goes down, so if social expenditure stays the same, its percentage of GDP goes up.


Now to some things in the wikipedia article you seem to have not read carefully: Greece was/is corrupt and bad at collecting taxes.
Greece had the highest military spendings in % of GDP in the EU.

Their social spending however, according to the numbers you found, were average.

They cut down on that now, though, meaning: cutting pensions, cutting healthcare (I read about widespread multiple use of single-use items in hospitals.)
They did however buy two submarines from Germany in 2010 and paid their debt to German banks, which would otherwise have collapsed.
\

Greece GDP 2010: 299.4 billion
Greece GDP 2005: 247.8 billion

Greece social expenditure 2010: 74.5 billion (24.9%)
Greece social expenditure 2005: 49.3 billion (19.9%)

Relative social spending 2010 to 2005: 1.51 or a 51% increase in social spending. Over a 5 year period.

If you're going to correct me it helps to actually be correct.


Am I understanding this correctly then:
Greece was fine(ish) in 2005 and decided to increase spending on social stuff by 10% a year, went bust in year 3 and decided to keep going?
And what did the crash of 2008 have to do with it all then?
I've been told by the media that that had to do with it...


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Pepe
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12 Jun 2019, 5:25 am

Antrax wrote:
shlaifu wrote:
Antrax wrote:
shlaifu wrote:
Antrax wrote:
I have no issue with affordable safety nets and poverty alleviation. The problem is when the social programs overrun the economic productivity of a country as seen in Greece, the economy collapses under the crushing debt. Norway, Sweden et. al have a huge natural resources to population ratio that allows them to provide some hefty social benefits without outrunning their economies.


That's not what ruined greece, btw.


Please entertain me with tales of what actually ruined Greece. Be as factual as you can be.


let me google that for you:
https://en.wikipedia.org/wiki/Greek_government-debt_crisis#Causes


Usually good in an argument when citing a source to have that source support what you're actually arguing.

From the Wikipedia article (emphasis mine):
"In January 2010, the Greek Ministry of Finance published Stability and Growth Program 2010.[30] The report listed five main causes, poor GDP growth, government debt and deficits, budget compliance and data credibility. Causes found by others included excess government spending, current account deficits, tax avoidance and tax evasion"

Now where did that deficit and overspending come from:
Greek "social expenditure" (as a percent of GDP)

2000: 17.8
2005: 19.9
2010: 24.9
2015: 25.4

United States "social expenditure":

2000: 14.3
2005: 15.6
2010: 19.4
2015: 18.8

Canada "social expenditure":
2000: 15.8
2005: 16.1
2010: 17.5
2015: 17.6

OECD average "social expenditure":
2000: 17.4
2005: 18.2
2010: 20.6
2015: 19.0

Source: https://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG#

Now Greece isn't the only country with high social expenditure, but they did have a debt crisis because their government spending outpaced their economic growth.


<learning mode activated>
I'm out of my depth here but wasn't the catalyst of the Greek economic collapse the KFC...errr...I mean the GFC?
I'm in total agreement that irresponsible social expenditures were unsustainable even without the fried chicken. :mrgreen:

BTW, Australia hasn't had a technical recession for over 25 (29?) years and still counting. 8)



Pepe
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12 Jun 2019, 5:45 am

uspe wrote:
australia get ready .


Could you elaborate?

TheRevengeofTW1ZTY wrote:
I guess that explains why I hate Democrats as much as I do Republicans. They both have long histories of racism and oppressing certain people, even though Democrats pretend to be the "not racist" ones (a crock of horse s**t).

Don't ever trust politicians! Left or right, they're all the same! :eew:


Don't hold back.
Tell us what you really think. :mrgreen:

Twilightprincess wrote:
If I’m appointed as Supreme Leader, I’ll make everyone happy...at least the people who don’t disagree with anything I say. :twisted:


Supreme leader of the universe, and the Grand Poohbah of Atheists!
I am your humble servant, your eminence. <genuflect> :mrgreen:



Antrax
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12 Jun 2019, 9:20 am

shlaifu wrote:
Antrax wrote:
shlaifu wrote:
Antrax wrote:
shlaifu wrote:
Antrax wrote:
shlaifu wrote:
Antrax wrote:
I have no issue with affordable safety nets and poverty alleviation. The problem is when the social programs overrun the economic productivity of a country as seen in Greece, the economy collapses under the crushing debt. Norway, Sweden et. al have a huge natural resources to population ratio that allows them to provide some hefty social benefits without outrunning their economies.


That's not what ruined greece, btw.


Please entertain me with tales of what actually ruined Greece. Be as factual as you can be.


let me google that for you:
https://en.wikipedia.org/wiki/Greek_government-debt_crisis#Causes


Usually good in an argument when citing a source to have that source support what you're actually arguing.

From the Wikipedia article (emphasis mine):
"In January 2010, the Greek Ministry of Finance published Stability and Growth Program 2010.[30] The report listed five main causes, poor GDP growth, government debt and deficits, budget compliance and data credibility. Causes found by others included excess government spending, current account deficits, tax avoidance and tax evasion"

Now where did that deficit and overspending come from:
Greek "social expenditure" (as a percent of GDP)

2000: 17.8
2005: 19.9
2010: 24.9
2015: 25.4

United States "social expenditure":

2000: 14.3
2005: 15.6
2010: 19.4
2015: 18.8

Canada "social expenditure":
2000: 15.8
2005: 16.1
2010: 17.5
2015: 17.6

OECD average "social expenditure":
2000: 17.4
2005: 18.2
2010: 20.6
2015: 19.0

Source: https://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG#

Now Greece isn't the only country with high social expenditure, but they did have a debt crisis because their government spending outpaced their economic growth.



Except that the numbers you give show social expenditure in % of GDP.
Until 2008, social expenditure is at comparable percentage with US and other countries.
THEN the crisis hits and AFTER the crisis the percentage goes up.
Note: after the crisis, GDP goes down, so if social expenditure stays the same, its percentage of GDP goes up.


Now to some things in the wikipedia article you seem to have not read carefully: Greece was/is corrupt and bad at collecting taxes.
Greece had the highest military spendings in % of GDP in the EU.

Their social spending however, according to the numbers you found, were average.

They cut down on that now, though, meaning: cutting pensions, cutting healthcare (I read about widespread multiple use of single-use items in hospitals.)
They did however buy two submarines from Germany in 2010 and paid their debt to German banks, which would otherwise have collapsed.
\

Greece GDP 2010: 299.4 billion
Greece GDP 2005: 247.8 billion

Greece social expenditure 2010: 74.5 billion (24.9%)
Greece social expenditure 2005: 49.3 billion (19.9%)

Relative social spending 2010 to 2005: 1.51 or a 51% increase in social spending. Over a 5 year period.

If you're going to correct me it helps to actually be correct.


Am I understanding this correctly then:
Greece was fine(ish) in 2005 and decided to increase spending on social stuff by 10% a year, went bust in year 3 and decided to keep going?
And what did the crash of 2008 have to do with it all then?
I've been told by the media that that had to do with it...


Greece was fine-ish in 2005 because the Greek economy was growing very rapidly. Since the economy was growing rapidly Greece increased government spending (not just on social policy but that was a significant component), and had a stable debt at ~100% GDP. Due to some corruption issues there was also some question about whether Greece was hiding some of its debt.

The crash in 2008 did 3 things:

1) It sent the Greek economy in reverse such that instead of tax receipts rising due to a growing economy, they were falling due to a recession economy.

2) Since a lot of social spending is designed to help people through hard times it stressed those systems by adding more people to them.

3) It forced creditors who themselves were going through hard times to come calling on some of that debt.

The result was Greece's debt spiked because the spending it had been doing during good times was not sustainable during bad times.


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Pepe
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12 Jun 2019, 8:08 pm

Antrax wrote:
The crash in 2008 did 3 things:

1) It sent the Greek economy in reverse such that instead of tax receipts rising due to a growing economy, they were falling due to a recession economy.

2) Since a lot of social spending is designed to help people through hard times it stressed those systems by adding more people to them.

3) It forced creditors who themselves were going through hard times to come calling on some of that debt.

The result was Greece's debt spiked because the spending it had been doing during good times was not sustainable during bad times.


Part of the problem with Greece was that it had a very active black economy.
Less taxpayer money to draw upon.
Retirement at age 55 didn't help either.

BTW, Perhaps I am showing political bias but I was initially under the impression that only a socialist political government could have economically stuffed up the country so much.
I was surprised that wasn't the case. 8O



Shamtroll22
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13 Jun 2019, 8:42 am

Many months ago, I would've believe this but now not at all...capitalism is not an embodiment of markets and should not be conflated as such. Rather, capitalism, that is to say an economy based on the accumulation of wealth within the context of a market economy is based upon the distorting of markets and market principle for the sake of preserving those privileges currently enjoyed by the corporate establishment as a result of state sanctioned economic intervention at the expense of the worker who simply wishes to be in control of his own destiny (to own the means of production and obtain the full product of his own labour)

However, thanks to the four monopolies (Land, Money, Patents, and Trade) this is sadly not possible thus necessitating the creation of alternate institutions, tax resistance, the use of black and gray markets with the end goal being the abolition of the state and capitalism.

I would recommend reading Pierre Joseph Proudhon and Benjamin Tucker as well as checking out C4SS (Center For A Stateless Society, a Left Market Anarchist Thinktank and organization)


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Antrax
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13 Jun 2019, 8:51 pm

Shamtroll22 wrote:
Many months ago, I would've believe this but now not at all...capitalism is not an embodiment of markets and should not be conflated as such. Rather, capitalism, that is to say an economy based on the accumulation of wealth within the context of a market economy is based upon the distorting of markets and market principle for the sake of preserving those privileges currently enjoyed by the corporate establishment as a result of state sanctioned economic intervention at the expense of the worker who simply wishes to be in control of his own destiny (to own the means of production and obtain the full product of his own labour)

However, thanks to the four monopolies (Land, Money, Patents, and Trade) this is sadly not possible thus necessitating the creation of alternate institutions, tax resistance, the use of black and gray markets with the end goal being the abolition of the state and capitalism.

I would recommend reading Pierre Joseph Proudhon and Benjamin Tucker as well as checking out C4SS (Center For A Stateless Society, a Left Market Anarchist Thinktank and organization)


Why do people assume I am not already familiar with leftist thinkings... I'm curious how many of these "read Marx," or "read Tucker" types have read the works of Milton Friedman or Thomas Sowell. While I don't know them inside and out due to limited time, I am tangentially familiar with the 19th century "Boston anarchists" and their bizarre beliefs.

The issue they have is not with market capitalism (in which the corporate establishment is always vulnerable to superior competition), but with governmental intervention in market capitalism. Governments can create monopolies by introducing regulations and permits that force out smaller competition.

That said the government did not save: Sears, A&P, Pan Am, Blockbuster, Kodak and many more from going extinct. Each of those companies ruled their respective market place for a time.


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