The General Economics Thread

If you want to have a conversation about correct etiquette, this isn't the place for it. Nor do I have an interest in policing everyone else I ever talk to, even when they offend me. Sarcasm is about all I have the time for.

Sigh, just read my edits and addendas. Don't get distracted by a joke. It's not meant to derail the conversation. If you want to discuss sexism and sexual tension in the workplace, take it to the sexism thread. Unless you want to discuss the economical implications, it doesn't belong here.

"I'm tired of that kind of blatant sexism not beignets properly challenged, its bigoted and should have no place in erased conversation." Thanks for pointing it out. I genuinely hadn't paid attention, or rather, I projected the most charitable interpretation out of bias in the authors' favor.

edited 17th Sep '17 1:58:52 PM by TheHandle

I read your edit, the post is still sexist and bigoted. Still as pointed out this isn't the place for this and I'm pretty sure I've made my point about about how I view the assumption that strait men are hormone controlled animals. If you'd like me to explain further I can make a post in the Sexism and Men's Issues thread.

Back on topic.

Crony Capitalism is a form of capitalism, in some ways it's the purest form, because it's all about profit even at the expense of morality or long term sustainability.

That's why I don't trust the market, crony capitalism isn't a bug for the market, it's a feature.

edited 17th Sep '17 1:58:39 PM by Silasw

"Crony Capitalism" is the purest form of capitalism.

The free market will always devolve into such a state without outside intervention. It's not self regulating.

In other words, the Market carries within it the seeds of Feudalism? Something like that?

More that Laissez Faire Capitalism is self-defeating-in a competition that continues long enough, mathematics suggests that the odds approach 1 for a winner to emerge, which means an unbreakable monopoly and all that follows when that happens.

edited 17th Sep '17 2:16:01 PM by ViperMagnum357

Toys 'R Us files for Chapter 11 bankruptcy.

Finland’s Welfare State Has a Massive Baby Problem

That's hardly a problem confined to Finland. Birth rates in developed countries are, in general, incredibly low.

edited 19th Sep '17 9:35:45 AM by RainehDaze

It's an interesting economic problem.

It's one of those things that blatantly contradicts the old Malthusian world-view, whereby as productivity increased, childbearing would increase to match, guaranteeing that human populations would persistently live in subsistence conditions. Rather, evidence has shown that childbearing is a response to subsistence lifestyles, for the following reasons:

• As child mortality is higher, you have more children in the hopes that some will survive to maturity.
• Children are old-age insurance, helping ensure that you'll be taken care of after you are no longer able to work.
• A secondary cause, as most women are employed in home-making and other domestic labor, they do not have careers that childbearing will disrupt.

As standards of living increase beyond that subsistence level, childbearing rates decrease as these factors subside. This is why immigration is seen as so vital to the economic health of developed nations.

edited 19th Sep '17 12:15:40 PM by Fighteer

Sweden gets it right.

Actually, crony capitalism, which is to say poorly regulated markets, contain within them the seeds of socialist revolution, but thats a topic for another day.

There's obviously a misunderstanding of what crony capitalism is. It's not what happens when a market is minimally regulated. It's defined as " An economy that is nominally free-market, but allows for preferential regulation and other favorable government intervention based on personal relationships. In such a system, the false appearance of "pure" capitalism is publicly maintained to preserve the exclusive influence of well-connected individuals." according to businessdictionary.com. It involves the government bottlenecking the competition, bailing out failing businesses, special tax breaks, government subsidies and grants and state intervention. In other words, it's just another form of a State approved monopolies. It is not a true free market.

What about a monopoly-approved State?

Unless Disney buys out the US government, I'm not too worried about that.

Private organisations have gotten large enough to become governments in the past, not just the East India Company but also a number of religious orders/organisations.

And once again you're ignoring the possibility of a monopoly existing that isn't created/sustained by government regulation.

I'm not ignoring it, I just posit that most monopolies come from crony capitalism, government bottlenecking and interference rather than a free market. In a free market, if you don't like the choices, you can always start your own business. You can't do that with crony capitalism in place, buddying up with the government to take control of the market themselves.

There's plenty of ways other than regulatory capture for Capitalist princes to make a mockery of the very notion of competition. What are you going to do if a utility practices abusive pricing, build a redundant infrastructure network?

Or "I'm going to start my own small, local shop!" You're not going to out-compete large multinationals on pricing, range of stock, or convenience. Quality is a very specific niche that can be filled but that's not competing with them; they'll still have a stranglehold on most goods.

There are plenty of business whose entrance and initial costs are so high that only a few companies and corporations can afford to enter and still they don't actively undermine each other.

Energy, pharmaceuticals, heavy industry like cars and machinery, computers, logistics, communications and construction are costly to operate and start. Which is why the main corporations operating in those areas are decades if not at least a century old, because they pioneered and were early starters they could create their own monopolies and oligopolies while pulling their weight to prevent any sort of competition from settling in.

Those types of industries naturally form local monopolies and engage in oligopoly at a large scale, you don't need any sort of government to let that happen, as witnessed with the US telecom and all oil tycoons dominating the markets.

The point is that a poorly regulated market leads to crony capitalism, more or less inevitably.

Krugman: Why do you care about how much other people work? (revisited) (NYT, login-walled)

Krugman notes a recent post by Greg Leiserson corroborating a point he made three years ago, basically saying that tax reform has (or should have) no direct effect on the distribution of labor income.

This is kind of tricky to understand, so I'll just quote him directly:

In other words, if people work more or less in response to tax law changes, they are correspondingly paid more or less, and so there's no direct effect on how much anyone else is compensated for their own work.

... I don't follow...

Taxes are widely seen as a method for redistributing wealth from the rich to the poor. The conservative argument against this that the more value people recieve from the government, the less motivation they have to work hard and earn money. In theory, this should undermine everyone's work ethic (because we then have a whole class of moochers among us, living large while not working any harder). The new study points out that if government recipients work less, they will earn less, so their lifestyle shouldnt affect anything.

On the other hand, it isnt true that recipients of gov aid work less than the rest of us (once you control for the unemployment rate in their demographic group), so the whole argument is a bit esoteric.