The General Economics Thread

Marx is also as important to economics as Adam Smith. It's just that his prescription for solving the problems he saw completely ignored human nature and the actual lessons of the last time they'd tried to fix a country through revolutionary terror.

Thermidor or not, a lot of thngs did get fixed. The Empire was indisputably an improvement over the Old Regime, and the Restoration failed utterly to turn back the clock.

Progress is an organic thing — it's not cleanly divisible into positive and negative values. Economic history shows clear trends over time towards greater economic freedom and lower inequality, but it takes quite a few detours along the way. No one thinker is ever perfectly right or perfectly wrong.

edited 8th Dec '17 11:06:43 AM by Fighteer

Really? I was under the impression that current research suggested the exact opposite (at least when it came to inequality). Then again I’m just be projecting Capital in the 21st Century on to the whole of history.

Very much this.

There was certainly a trend towards improvement, but that came to a halt and has started reversing in various places—and there's no sign that it's going to change or things are going to become more equal just because that's how it used to be.

Disney And Fox Reportedly Working Out Fine Print On Deal Time for some monopoly busting, I think.

I don't think I've ever heard of a merger between media companies ever being blocked even during more heavily regulated times.

It would not surprise me at all if Disney just eventually came to own the entirety of American media/pop culture post Mickey Mouse eventually.

Can Disney beat Murdoch? Wouldn't that be the day?

I mean, they're image-obsessed amoral exploiters, but they have a lot of redeeming traits, and, most importantly, they aren't a threat to humanity, liberal democracy, and civilization, in quite the same way. A Disney-owned world is Chrapsaccharine. A Murdoch owned world...well, Trump and Theresa May are giving us a taste.

edited 8th Dec '17 6:46:54 PM by TheHandle

Not if the Murdochs get a position to take the reins, according to this article.

I don't think there's a particular trend toward income equality. It's not even always society becoming more exploitative, it's just that as technology improves productivity, there's a larger pool of surplus wealth that will tend to benefit the rich more than the poor do.

The poor don't always get poorer, but they do tend to get richer at a slower rate than the already rich. This means that even if everyone becomes richer, the gap between the rich and poor will tend to increase even without explicit exploitation.

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Stagnant wages and inflation.

Simply, when we're seeming to get into a situation where productivity goes up and yet wages don't, where there's more wealth but everything also costs more, then only the rich are getting anything whilst the poor are getting less and less. Especially as more and more jobs are becoming automated, so the value of actual labour can only go down.

edited 8th Dec '17 7:02:14 PM by RainehDaze

Video on the pros and possible cons of Universal Basic Income, depending on how it's implemented.

I was surprised to see Kurzgesagt cover that topic, because it's so controversial, but they gave it quite a fair treatment. Try to ignore the comments.

Is it really that controversial? I feel many opponents of UBI just aren't taking the idea very seriously and just kind of dismissing it. There is no real organized movement against it (yet) as far as I've seen.

On a somewhat related note what are people's thoughts on (or if they have ever heard of) Henry George, and I suppose Georgism in general.

I have to say, he's become one of my favorite Economist, and it's through him that I feel that I've come to better understand ideas like the factors of production, monopolies, rents and similar concepts.

On the other hand I'm much more skeptical that his premier policy (the single tax on land value) would be nearly as effective at addressing all of societies economic ills as he and his followers believe. Not to mention that I find the idea of needing only a single tax to be a little ridiculous.

The same people who argue that any form of welfare is bad and that people chronically abuse it are against UBI, it just doesn't have enough momentum to need serious opposition.

I swear that if the comment "better dead than read" is un-ironic and serious, my life is complete.

In the old days (before the late 1970's), when large corporate employers built up a surplus of profit, they would reinvest that surplus into expanding production ans, consequently, hiring more workers. Even when the surplus was due to increases in productivity from automation, large employers would invest in research and development which would, in turn, yeild new products and services that would result in hiring more people (as well as paying them more). Thats why the economy didnt collapse after the invention of the steam engine.

This has stopped happening. Now job and payroll growth remains stagnant, partially obscured by the rise of part time employment with fewer benefits (on a global scale its obscured by the rise of living standards in the BRIC countries). Large employers are showing record making profits, without record making employment rates.

Wealth and income disparity isnt new. Prior to the Great Depression and two world wars, it was worse than it is now. But the trend of the last 40 years is back toward pre-war levels of socio-economic stratification. I dont know when we reach the point of no return, or if there is one (or if we are heading toward another global crisis). What we need right now is intelligently targeted stimulus spending to increase consumer demand (without a rise in personal debt). But thats a political issue, not an economic one.

edited 9th Dec '17 1:17:41 PM by DeMarquis

"This has stopped happening." Maybe in the US. What about China?

The question you need to ask is "Why has it stopped happening". Because, as pointed out, it still does happen elsewhere. And the answer is simple: Wage repression is terrible economics.

The way an economy is supposed to work is that when productivity goes up, workers get paid more. This means that every month, they turn around and go "What is the next thing on my priority list I would like to buy?" And that is a new market. Employers expand employment for one, and only one reason: Because they need the workforce to supply a new demand.

Under this - let us call it "The unionized economy" model, when labor productivity goes up, so does demand for goods and services, so it does not matter if car manufacture now only employs a tenth what it used to - Those workers are paid ten times as much, as are the workers in other high-productivity sectors, which means there are now entirely new companies selling computers, holiday packages, and robot cleaning maids.

Then enter a stupid idea. The stupid idea is that it is good for the economy if wages stagnate. Because, says people who have experience running a firm - "Wages come out of profits! if I did not have to pay people more, I would be raking in the dough! If nobody had to pay higher wages, we would all be rich (We, here defined as the 0.1 percent)".

This is every bit as shitty a piece of reasoning as the idea that the budget of a government is in any shape or form like the budget of a household. But it accords with the lived experience of CE Os - after all, paying your employees less than everyone else does is a great way to make money if you can avoid it blowing up in your face.

And these people have lots of spare cash to donate, and lots of cultural clout, because titan of industry is a prestige profession.

Thus: Regan. And union bashing. ECT. The wheels ought to have come of nearly instantly - but here is a thing. Sources of demand are fungible - if workers get to keep more of their paychecks because you are running a titanic deficit. Or they have more available cash because finance is lending them collectively trillions? That can keep the system turning over. Until it blows up. That does not mean any of this was a good plan.

Well, thats a good question. Im not aware that the capitalist R and D cycle ever happened in China. Isnt their economy state dominated, even now? Where else might it be happening? Western Europe is going through the same process we are. Russia since the fall of the USSR, maybe. India? Most other places are too under-developed, and too depended on foriegn imports to develop a profitable technical development sector. I think the trends Ive identified (stagnant development of new jobs, financed by profits) have global implications.

.. Its mostly a US and UK thing. Wages do go up in mainland europe when the economy grows. Our problems are mostly "Fucking stupid austerity" on occasion stopping growth from happening at all.

This is not a thing that just happened in the US because of technology or globalization or some other external factor. The problem is deliberate class warfare committed upon the great mass of the people by the rich.

The rich are, and probably have always been, better resourced and organized than the poor are. So they are able to accumulate wealth faster than the lower classes. But modern economic productivity requires the active participation of a working class. Historically, the upper classes have never manifested any particular ability to see the larger picture, or plan for the really long term. So they tend to accumulate wealth until the house of cards comes collapsing around them.

edited 11th Dec '17 6:20:10 PM by DeMarquis

Finland is one of the best countries to live, so why are so many smart young people leaving?

We're finally reaching peak Finland; people are figuring out they should leave.