Double Dip Recession

I only asked because I'm interested to know how other people think, so attack me, why not

"scarcity is what creates value" brilliant, which is why an abundance of commodities also brings down their value. Which is I think something both I and ttosca pointed out.

Also it's through this same mechanism that labour is devalued. Which is something that happens under capitalism, it matters not whether the state steps in to control labour conditions because only scarcity creates demand.

Interesting thing about china, which I didn't realise until today, the recently created proletariat is most unimpressed now they find themselves unemployed. Apparently they have over 20million unemployed, which is a new problem. Before, most of these people were self sufficient peasantry but now they have moved into built up areas they are in need of "welfare"

As for socialist states, its more helpful to look at the social anthropology of how our ancestors lived without money as a form of exchange.

If we are going that far back then it's also worth looking at the fact we lived in mud huts and people used to barter for goods & services. Personally I'd rather we kept the concept of money because I really don't like the idea of having to trade a duck for a couple of loaves of bread.

The problem with the idea that we could function without money,minimathsmouse, is that it is outdated. Yes, it worked 10,000 years ago. But now it can't. How many bananas should I trade for an iPad? How does the company making the iPads obtain the raw materials they need? Do they have to barter pork bellies? And how can they know that the owner of the raw materials requires pork bellies? What if they don't, and they require cheese instead? Currency was developed because it fulfilled a need for a medium of exchange and that need has grown rather than shrunk.

Increasingly complex societies require currency as a form of exchange.

scarcity is what creates value. you cannot pass a law that says 'everything has no value' because people will choose to value things more or less as they
see fit.

how can you police that? however nicy nicy you try to dress it up sounds very oppressive to me.

you seem to be prepared to sawp freedom for some faux equality.

What a human wants is always more than they need It's interesting to see that people have such a low opinion of human nature. Contrary to how people behave now I think people would behave differently once you break down the link btw commodities and monetary value. Everything has a use value.

In terms of people holding onto the goods of their labour, it would be very counter productive for them to do so. As with any collective/communal/ or group people within the group would all have vastly different skills and abilities. I might be excellent at growing potatoes but I can't live on potatoes alone. You could manufacture 1 computer a week/day but you can not eat it, you would have to reach a consensus whereby you share or you go without.

I once hired some very expensive digging equipment, I hired it for a fraction of it's monetary value. I returned it to its owner because it no longer had a use value to me. I could have given it away but had I have stolen it I would have invariably have sold it. Why? because it has a monetary value, otherwise I could have stolen it and given it away. It is the same with all forms of private property, if you break the link btw it and its monetary value and instead boil it down to use value, many problems people perceive with sharing can be overcome.

In terms of children and Hula-hoops, have you noticed in a nursery how all the children descend upon the new toy, much grabbing and tears before they reach a consensus. After which time the " fetish" for the new toy almost always is replaced with disinterest and it is demoted to it's use value. The children use the item, usually for what it is intended and is shared. With an abundance of commodities that have no value other than their use, that would also happen on a wider level.

In terms of state power, coercion and enforcement we see plenty of this through governments preventing freedom of speech and assembly, the tactics used against all forms of protest, the state military machine, the policing of citizens and the powers of stop and search etc,

As for socialist states, its more helpful to look at the social anthropology of how our ancestors lived without money as a form of exchange.

niceguy2

That whole discussion about whose army/police is better is a sideline, and an unprofitable one. What ttosca will do is claim that in his/her perfect socialist state, that wouldn't happen, and we're back to square one.

However, the issue of the very existence of a ruling class who has to make the decisions, and an army/police who enforce them, in his/her supposed classless society is (I think) far more significant since it immediately renders any claims to classness moot.

The problem I have with this sort of ideological socialism is that it so fundamentally goes against innate human behaviour. It's treating people as things to be pushed around rather than letting them determine their own fate.

The difference is that the police & army in a democratic/capitalist society do not go around using violence on its own citizens unless a crime has been committed. Even then there is due legal process and you must be tried and convicted by an independent judiciary.

Compare this to any socialist/communist state where the only way the state has been able to function has been to have powerful secret police who can make you disappear for saying the wrong thing as defined by the politician you are criticising.

I know which I'd choose to live in anytime.

I think it was Mr Pants that said Labour are not trusted economically and that means you live in a small world, that is what the right think, not the left and there are just as many lefties as those in your world. Think a bit wider!

If our system has evolve dover hundreds of years, it will not dramatically change over night, we are too steeped in history of democracy. That said MMMouse, we could lean towards a more equal pay system , narrow the gap and that is what governments need to seize upon, public's disgust at executive corporate pay over a number of years.

Iti s clear, happier societies , as recently measured have less inequity but some disparity for the competitive souls to flourish as well as those that like to nurture, organise or design.

World is big enough for all personality types to flourish. I do believe measuring happiness is a good way to develop policy - quite surprised tories are adopting this, but that is my prejudice

What, you mean like how the army, police, and media functions under Capitalism? Do you think Capitalism would survive a day without the threat of force from the army and police and other state actors who claim a monopoly on violence?

If you like, then yes. So you do admit that your 'classless', equal society would have, by definition, a separate class to create and enforce laws?

What are you talking about? In such a society, people wouldn't have to 'give up their stuff'. First of all, personal property isn't the issue.

Yes it is. In order to achieve your equal society you can't have some people living in penthouses and some in 2-up, 2-down victorian terraces. So you would have to appropriate personal property in order to create equality. Unless you plan to leave me in my penthouse while the person down the road doesn't have enough room for their family.

Secondly, more people would have more wealth, because the wealth wouldn't be appropriated by Capitalists. Finally, the stuff that would be taken from Capitalists are factories, buildings, natural resources, etc. We don't need Capitalists to make use of them. They are free to leave. In fact, we would celebrate it.

Let's imagine that you get all this stuff from 'capitalists'. Who then actually owns it? Do I get to own a factory in this country? And doesn't that make me a capitalist? Who gets the stuff?

^Society. People. The people who actually make the stuff, rather than Capitalists, who now hire people to make shit to sell.

If society decides that they 'need' every child to own a hula-hoop, then every child would own a hula-hoop.

Yes they would. Which is why, no doubt, the internet would both survive and flourish under socialism.^

But who would actually do it? Take me through the process for deciding about the hula-hoop.

If society decides that they 'need' every child to own a hula-hoop, then every child would own a hula-hoop.

And every child would want more than one hula-hoop because that is human nature, but would a child who thieves another child?s hula-hoop be seen as one of those members of society who decides that all children now need two hula-hoops, or would there be some tyranny required to maintain the one hula-hoop per child ideal?

What a human wants is always more than they need.

Then that opens up the obvious problem with state planned economies that is that a truly communist society, like you are describing above, would never have invented the hula-hoop in the first place. Innovation requires the natural selection of bad ideas that the free market is so good at providing. I'm sure you will be able to provide many examples but, off the top of my head, I'm struggling to think of a single invention that has benefitted everyday life for mankind that came from a non-capitalist country.

flatpack-

To achieve your 'society' you would have to have a mechanism to enforce it. That enforcement mechanism requires a police service and people to develop the enforcement mechanism. That tier of enforcement would be a class.

What, you mean like how the army, police, and media functions under Capitalism? Do you think Capitalism would survive a day without the threat of force from the army and police and other state actors who claim a monopoly on violence?

Further, because people aren't going to give their stuff up happily, you have to take it from them. Will they stay in your country when you're taking their stuff? They may do, but many may leave. What will you do about that? Will you let them leave?

What are you talking about? In such a society, people wouldn't have to 'give up their stuff'. First of all, personal property isn't the issue. Secondly, more people would have more wealth, because the wealth wouldn't be appropriated by Capitalists. Finally, the stuff that would be taken from Capitalists are factories, buildings, natural resources, etc. We don't need Capitalists to make use of them. They are free to leave. In fact, we would celebrate it.

Who's going to decide what 'human needs' are, anyway?

Society. People. The people who actually make the stuff, rather than Capitalists, who now hire people to make shit to sell.

If society decides that they 'need' every child to own a hula-hoop, then every child would own a hula-hoop.

Do we 'need' the internet? Some might say no but an awful lot of people would say that, yes, we do.

Yes they would. Which is why, no doubt, the internet would both survive and flourish under socialism.

fph - completely agree.

You cannot change human nature and we are all pretty similar animals regardless of the culture we grew up in. Why is it that mutually beneficial systems of trading goods and services arise spontaneously wherever human society is? Can anyone name a society, however primitive, that does not trade? Trade necessarily involves the exchange of labour which leads to some being employers and some being workers. All this just evolves naturally wherever humans are.

In stark contrast, the few socialist societies have had to be enforced from the top down - always involving an oppressive and brutal state.

I think it's unachievable and displays a dangerous misunderstanding of human nature.

To achieve your 'society' you would have to have a mechanism to enforce it. That enforcement mechanism requires a police service and people to develop the enforcement mechanism. That tier of enforcement would be a class.

Further, because people aren't going to give their stuff up happily, you have to take it from them. Will they stay in your country when you're taking their stuff? They may do, but many may leave. What will you do about that? Will you let them leave?

Who's going to decide what 'human needs' are, anyway? Do we 'need' the internet? Some might say no but an awful lot of people would say that, yes, we do.

Thank you Niceguy2, it would economical suicide on our part to revert to welfarism and to up taxation on business now. We may need to but we can't.

You're right. Ultimately, socialism is the aim. However, the situation is going to have to get a lot worse before the majority are willing to stand up and overthrow Capitalism

Ttosca, yy unfortunately things may have to get a lot worse

"This would mark the beginning of a classless society in which human needs rather than profit would be motive for production. In a society with democratic control and production for use, there would be no class, no state and no need for money"

Out of interest how many people think a classless, stateless society (no class powered government) that concentrates on meeting human need is a bad thing? How would we feel about giving up money? Are we being irrational and protectionist?

Is it a condition of us having more that someone else should have less? if we all had a fiver in our pocket that money wouldn't even go as far as it does now!

I agree mini that we do need fundamental changes. But the changes we need must be global in scale. We live in a global digital economy and the only way we can effectively ensure banks do not over leverage themselves again and the rich cannot engage in a race to the bottom is to have action at a global level.

If all the rich countries had similar taxation rates, similar rules on bank regulations etc then this would go a long way towards learning from past mistakes. Unilateral action from UK government alone to raise taxes to punitive levels is just going to be economic suicide.

"Economics can't BE a zero sum game" - I'm sure you understood that though. I maintain it is true (and self-evident) although I understand that Marx, and the left in general, refuse to accept this

Are you proposing that Marx and many other left wing economists are actually fairies or figments of our imagination. That only one idea exists within economics, everything else is, well politics!

Joseph Stiglitz not only would disagree with you but has over time hopped over to the left, seen the light so to speak.
www.guardian.co.uk/commentisfree/cifamerica/2010/oct/19/no-confidence-fairy-for-austerity-britain

I don't believe Keynesian type investment is the answer unless it is combined with really fundamental changes that prevent future crisis but then that may be the difference btw being left and thinking that the flaw is the capitalist means of production.

pants-

Obviously the economy isn't a zero sum game, as wealth has increased over time. However, that's not to say that at any given point in time, there is only so much wealth to go around:

There is only so much tax revenue that a government can spend. Either it spends it on the poorest and most vulnerable, or it pays for tax breaks for the rich.

Similarly, any company has a budget. If the CEO and those at the top are being paid 500x the average person at the bottom, then the person at the bottom cannot be paid very much. The multi million pound bonuses for management consultants subtracts from the total possible about payable to the workers who actually produce value.

etc, etc.

niceguy-

tosca, you views are clearly ridiculous and I think if you had any credibility before then you certainly dont have any now. Just how can you advocate the government to not pay PFI then at the same time argue we should continue borrowing to ensure people have money to spend.

No. Investment leads to economic growth. What part of that don't you understand?

Just who would you borrow from? As soon as the markets realise that the UK government reneges on its debts when it suits them then our interest rates would go through the roof and the only lenders would be the corporate equivalent of Brighthouse.

I was being flippant about writing off debts. However, nationalisation of industries and negotiation on debts is not unprecedented. Ultimately, creditors would rather see all of 80% of a debt paid off than none of 100%.

mini-

You're right. Ultimately, socialism is the aim. However, the situation is going to have to get a lot worse before the majority are willing to stand up and overthrow Capitalism.

minimathsmouse My quote should have read "Economics can't BE a zero sum game" - I'm sure you understood that though. I maintain it is true (and self-evident) although I understand that Marx, and the left in general, refuse to accept this - Please feel free to correct me.

MoreBeta You are absolutely right, trade tends to make the average person wealthier but within that sample, some people get very rich, some get very poor. As a child of a Northern mining town I totally understand where you are coming from.

In theory, a developed economy ends up creating high-value goods and lets developing countries make mass produced cheap equivalents. Hence why the Tata Nano is built in India whilst their 'sister' cars, the Tata owned Range Rovers and Jaguars, are built here in the UK. There are two obvious failures with this theory though. Firstly, even if there are lower profits to be made, we have 2.5 million economically inactive people in this country that it would make more sense to put to work making small profits, rather than sitting on the dole making none. It is these people who would directly benefit from the liberalisation, deregulation and reduction of business laws, red tape and taxation. Secondly, as mass employers close down, as you see in Detroit but are just as prevalent across huge swathes of the North, they leave mass localised unemployment in their wake. If so far as I believe government should be getting involved in business, finding ways to focus new investment in these areas should be their priority.

Countries must always be free to compete against each other but must also be prepared to dip their hands in their pockets and bail others out, or set up trade agreement that benefit one to the detriment of another or give incentives to poorer countries & give aid, is that right?

Competition is a zero sum game. Ever run a race, played a game of tennis, did you win? I have won many games of tennis, my opponents lost If I were to be so utterly fab at tennis I could win every grand slam, no one could beat me. I'd be the last man (woman) standing. You could incentivise everyone else to train harder, work longer, want it more but if they weren't as good as me, they still wouldn't win.

This is what is happening with corporate and world competition. We acknowledge that businesses grow, reinvest, reinvent and then buy up their opponents or use any means to close them down, killing off the competition. We acknowledge that south east asia is in a very strong position, we are indebted to them and they hold the ace cards in terms of manufacturing and export. We were once in their position. When we were we still had a reserve of unemployed and impoverished, just as they do.

It isn't competition that is needed to end poverty it is co-operation.

The big problem with global trade as we are now finding is that yes it makes everyone on the planet richer on average but unfortunately at the individual level there are winners and losers. Not everyone gains. That is why in the current fiancial crisis there is increasing talk of protectionism, trade barriers rising and 'British jobs for british workers' attitude springing up.

This is happening in all Developed countries. Look at the rhetoric around the US and French elections.

Firms moving car factories out of Detroit has devastated the local economy where houses cannot be sold for even $1. Workers in Mexico gained from having a car factory built there but workers who vote for a US President in Detroit hate what global trade did to them and their town. The same thing in France with the car industry down 10% this year alone.

Go back to the 1980s and you get the same thing happening in old industrial towns in the UK. Long term unemployment for many people where old industry shut down and got sent offshore. Thatcher got blamed but these industries were finished economically anyway.

Global trade is a good thing in the long run but politiicans have to get elected every 4 years.

Economics can't a zero sum game can it? I don't get this, not all economist think in the same way.

trade is the only way of reducing global poverty agreed but as I have said before capital wasn't investing in trading goods, either between countries or individuals. Capital wanted instead to make money out of money, that doesn't involve enriching the little people living on $1.25 a day.

"Ed Milliband this morning on R4 says that the workers need to share in the wealth they create, because workers create the wealth. Huruh at last Ed says something sensible."

If you should ever think Ed Milliband has said something sensible I always find it safer to assume that you've misheard him! This is a case in point. It sounds to me that all Ed is advocating is that the worker buys shares in the company they work for! Plenty of companies offer share purchase schemes, often at advantageous rates to their employees, it would appear that Ed is merely endorsing these.

Would that not be the easiest way for an individual worker to own part of the means of production?

minimathsmouse It will be impossible to set a global corporation tax rate - there are too many vested interests. Just give it up. It will never happen. Why, for example, would the Cayman Islands give up their tax haven status - it is their only asset. Likewise, can you imagine trying to get, for example, the US and France to agree to the same tariff. Also, why shouldn't the developing nations be allowed to undercut the developed world?

This smacks of an "I'm alright Jack, pull the ladder up" mentality that once again, seeks to fix the status quo where rich countries stay rich, poor countries stay poor and a billion people continue to make do on $1.25 per day. I've said it before and I'll say it again, trade is the only way of reducing global poverty. It's working - slowly, I agree but it is working. Making a poor man wealthy doesn't make a different wealthy man poor - we can all get wealthy together. How else do you explain the fact that everyone in the country today (even the unemployed and those on benefits) has a better standard of living than the medieval nobility did? Economics can't a zero sum game can it?

Countries must always be free to compete against each other. If a government wishes to raise the tax burden on its businesses, it has to accept that in doing so it will make those businesses less competitive.