Moneyless Sharing: A Solution to the Problems of Capitalism?

[russ_watters]

It seems a couple of clarifications are needed here -

I prefaced my earlier post with this statement Revolution means rapid social change and although it can include coup d'etats or armed rebellion more often than not is achieved through peaceful protest and I doubt anyone would seriously disagree that economic injustice has triggered many such revolutions.

Well, ok - I guess if you use that loose of a definition though, you could say the US has a revolution every decade or so.

The full data set is available here in a report which sets out to answer the question 'Is the U.S. a Good Model for Reducing Social Exclusion in Europe?'
http://www.cepr.net/publications/social_exclusion_2006_08.pdf

Very interesting paper. Regardless of the nitty gritty, I would agree that the US isn't a model to use if your goal is to decrease "social exclusion". But socialists and capitalists are driven by different starting premises, so to me the question is an irrelevancy.

Given the current data and trends it seems to me that in the long term such a system has to be unsustainable not only in the US but in all countries which are on the same curve as unchecked eventually the Gina coefficient reaches 1 whilst the intergenerational income coefficients also reaches 1 which clearly cannot happen. A bit like the Highlander series - 'In the end there can be only one'

It is a hyperbolic function, so there is no need to put such limits on it. That's a mathematically flawed way to look at the data (you are reading it upside-down). It is convenient to use a coefficient that is between 0 and 1, but the concept it is describing a difference in income between zero and infinity.

I am not advocating socialism as a superior socio-economic model, which I get the impression some here think I am, or promoting any other socio-economic model for that matter. In fact my opinion of capitalism mirrors Churchill's quote re democracy "Democracy is the worst form of government except all those other forms that have been tried from time to time."

Granted, but such discussions always lead in that direction anyway. If the system is flawed, it is natural to look for a better one.

Russ made the point that even Americans living in poverty in the US are relatively better off than the poor of other countries.

I said that poor in the US fare worse than in Europe (which is true) and Milo said they are better off in the US than in "Socialist utopias". Such a thing doesn't exist, but it is true that those countries on the far left have typically fared badly on that score.

I am interested to see if others agree that at some point things will have to change or popular social unrest will inevitably occur in highly capitalist countries and what they think of the idea that the longer the current system continues without voluntary modification the greater the forced eventual modifications will be.

I don't see any good reason for such unrest in a healthy (by capitalist standards) capitalist country.

 

[eaboujaoudeh]

i think that the day u will reach social unrest is the day that Mr. Burnankee decides that healthcare is too expensive on the federal reserve..or decides to cut the wages on unemployed ppl...now those things are dangerous, but as long as ppl are eating/sleeping under a roof/ getting paid while staying at home, there's reallly no such thing as civil unrest

 

[russ_watters]

That isn't the way our money system works - Bernake (the Federal reserve) doesn't have such powers.

 

[russ_watters]

btw, what's wrong with a Capitalist-socialist hybrid like in Europe? i'll put again the example of scandinavian countries?!

It is a delicate balance. A certain amount of socialism is necessary in any country (there are some people who are simply unable to take care of themselves), but too much socialism can be quite stifiling for the economy. Sweden is a good example of that. It is not the successful hybrid that some think:
http://www.lewrockwell.com/dieteman/dieteman33.html
http://www.neolibertarian.net/articles/sanandaji_20060414.aspx

Other Scandanavian countries are also not necessarily good examples because their socialism is supported by oil revenue. They are not self-sustaining and are going to be in a lot of trouble when their oil runs out.

I forsee major problems for Europe in general over the next few decades. Socialism (and to a lesser extent, government bureacracy in general) as a political ideal is self-sustaining, meaning that once enacted a socialist policy is virtually impossible to revoke. France's current problems are a good example. Everyone knows there is a real employment crisis there, but if a politician tries to do something about it, they get strung-up. As the public sector grows with government bloat, the private sector will shrink, and with it, the most efficient part of the economy. Europe is already growing significantly slower (economically) than the US, and that momentum will continue to build. The EU will help slow the acceleration, but it won't be able to stop it. They aren't the USSR, but eventually their similar ideals will make the countries of Europe implode for the same reasons if they don't do something about it.

This, from the second article, is perhaps the most dangerous aspect of socialism:

The many years with a large welfare system seems to have reduced the Swedish populations working ethics and made it more acceptable to live on government handouts, which have increasingly become an alternative to work. In a survey conducted in 2002, 62 percent of Swedish employees answered that they viewed it as acceptable to claim the right to sick leave even if one is not restrained by disease to work. This attitude seems to correlate closely with the large increase in Sick Leave which we have experienced in Sweden.

In theory, socialism's largest pro is the ethics on which it is based. But the reality is that socialism breeds mediocrity, laziness, and inethical behavior, contributing heavily to the decline of a civilization.

 

[X-43D]

What i don't like about capitalism is that people have to compete and work hard to make money but they can never reach the top of the social pyramid. Money doesn't come so easy for most people like it did for Bill Gates or Warren Buffet. Most people have to work hard for their incomes.

Also about half of all human effort today is wasted on the administration of the capitalist system. Everybody who uses money, counts money, receives money, worries about money, steals money, catches the thieves, gambles for money, handles credit cards, handles other value papers, everybody who works in the banks, half of all the people working in the supermarkets, are working with the administration of the money system. The money system is a centrally controlled system.

So we are already today getting by fairly well, on average globally, with only a small part of the possible workforce actually producing anything useful.

 

[Art]

Well, ok - I guess if you use that loose of a definition though, you could say the US has a revolution every decade or so.

Can you provide examples of the revolutionary socio-economic changes in the US every 10 years you refer to? Even changes in governing parties seem me to have had only minor impacts to the overall system.

Very interesting paper. Regardless of the nitty gritty, I would agree that the US isn't a model to use if your goal is to decrease "social exclusion". But socialists and capitalists are driven by different starting premises, so to me the question is an irrelevancy.

No the question isn't relevant I agree. I provided the title and ref of the full report only because you implied I had cherry picked stats from it and had proclaimed an interest in seeing the source in full. That just happens to be it's title.

It is a hyperbolic function, so there is no need to put such limits on it. That's a mathematically flawed way to look at the data (you are reading it upside-down). It is convenient to use a coefficient that is between 0 and 1, but the concept it is describing a difference in income between zero and infinity.

Not sure what you mean by this. My point is obviously related to a coefficient getting ever nearer the magical 1 which btw is not quite infinity simply all income. Social strife would be an issue long before then. Check out the Gini coefficient world map on this page http://en.wikipedia.org/wiki/Gini_coefficient and tell me how many countries with a Gini over 0.5 you would label as havibg stable governments.

Granted, but such discussions always lead in that direction anyway. If the system is flawed, it is natural to look for a better one.

All I am looking for though at the moment is an admission that the system is flawed.

I said that poor in the US fare worse than in Europe (which is true) and Milo said they are better off in the US than in "Socialist utopias". Such a thing doesn't exist, but it is true that those countries on the far left have typically fared badly on that score.

My apologies I mixed up yours and Milo's posts.

I don't see any good reason for such unrest in a healthy (by capitalist standards) capitalist country.

But isn't that the whole point. The various indicators suggest many countries with severe economic inequality, typified by the US in this instance, are far from healthy.

 

[denverdoc]

It is a delicate balance. <snip>
This, from the second article, is perhaps the most dangerous aspect of socialism: certain amount of socialism is necessary in any country (there In theory, socialism's largest pro is the ethics on which it is based. But the reality is that socialism breeds mediocrity, laziness, and inethical behavior, contributing heavily to the decline of a civilization.

Thats poppycock. Especially the part about unethical behavior--utter nonsense. Must be reading too much Ayn Rand. By far the most violent "civilized" developed country in the world is the US. The highest rate of incarceration, well the US again. The only one that still finds a need for execution, the US. So i agree with the balance--you need to find ways to motivate individuals to do their best. Profit sharing seems like a good way to get around the lord/serf arrangement that capitalism is based on. My thoughts are capitalism can work pretty well, if only the corporation is avoided. This is a relatively recent dev't which many far thinking patriots warned us against. It produces a system where the most sociopathic employee typically rises to the top, and guess then about how ethically they behave.

 

[Astronuc]

What i don't like about capitalism is that people have to compete and work hard to make money but they can never reach the top of the social pyramid. Money doesn't come so easy for most people like it did for Bill Gates or Warren Buffet. Most people have to work hard for their incomes.

There's nothing wrong with hard work - that's just the way it is. I am more concerned whether or not the system is fair. The failure in capitalist systems is the failure to rein in the likes of Enron and Worldcom. Laissez faire capitalism just does not work.

Another major failure of capitalism is economic disparity.

Extreme concentrations of wealth hurt not only those far down the economic. Concentrated wealth distorts democracy, by giving a small elite both the motive and the means to buy the policies they want from contribution-hungry politicians. . . . . And concentrated wealth spawns a culture of excessive consumption that subverts all of the nonmaterial values people find difficult enough to sustain in a modern capitalist economy.

The Wealth Inequality Reader

Wealth is distributed more unequally in the United States today than at any time since the twenties. Does it matter? The authors of The Wealth Inequality Reader answer this question with a resounding yes. Twenty-five substantive, readable essays explore the hidden vector of wealth inequality: its causes, consequences, and strategies for change. Plus: an illustrated overview offers the latest statistics on wealth inequality in a series of one-page snapshots. The essential reader on wealth inequality, this book is a must-have for both the activist and the scholar.

ibid.

 

[eaboujaoudeh]

well its true money did cost us lots of things, but can u imagine a world without it? Currency was a huge and important invention. 2nd for u russ, i know bernanke doesn't control this much , but last time he spoke he was already complaining about healthcare prices. As for the Scandinavian countries, i think you mayb be right that they are pushing extremes on their system and promoting lazyness and decouraging their ppl to be driven like the american ppl. (propably why we see too much suicide cases in Sweden).
As for France i think they have enough jobs for their populace but its their openess to illegal immigrants especially alrgerians is drowning their economy, a pb we see all over the EU, like Germany! ever been to Hamburg? looks more like turkey..i think Europe's major pb is not their system as much as it is related to their aliens. If u ask me what i think, the american system is most succesfull till now, unfortunately not all countries can sustain a system similar to the american one. It's like you develop systems with what you got on your land.

 

[denverdoc]

(propably why we see too much suicide cases in Sweden).
As for Franc.

Thats not so. Suicide rates in alaska are just as high. This is a biological issue that should be excluded--I remember 20 years ago it was that the sexual looseness of the situation was the cause. Suicide rates fairly follow latitude.

 

[denverdoc]

well its true money did cost us lots of things, but can u imagine a world without it? Currency was a huge and important invention. 2nd for u russ, i know bernanke doesn't control this much , but last time he spoke he was already complaining about healthcare prices. As for the Scandinavian countries, i think you mayb be right that they are pushing extremes on their system and promoting lazyness and decouraging their ppl to be driven like the american ppl. (propably why we see too much suicide cases in Sweden).
As for France i think they have enough jobs for their populace but its their openess to illegal immigrants especially alrgerians is drowning their economy, a pb we see all over the EU, like Germany! ever been to Hamburg? looks more like turkey..i think Europe's major pb is not their system as much as it is related to their aliens. If u ask me what i think, the american system is most succesfull till now, unfortunately not all countries can sustain a system similar to the american one. It's like you develop systems with what you got on your land.

I'd like to imagine money out of the eqn, not sure how it could be best implemented. Theres a moneyless exchange system up in Boulder, CO, USA I have thought about belonging to. I see where itmight work small scale, but build a dam or rocket, gets messy.

 

[siddharth]

I want to make a point on the difficulty of measuring poverty, especially in my country.

In India, the "poverty line" is decided based only on a concept of a minimum nutritional level. The official estimates of the poverty line are based on a calorie norm of 2400 per capita per day for rural areas and 2100 per capita per day for urban areas[1]. (This norm was fixed in the 1970's)

The government then fixes the poverty line by the amount of money needed to buy food items at the market price, which correspond to the specified minimum calorie norms. If the total income of an individual is below this value, the person is deemed to be living below the poverty line.

Notice that this definition does not factor in the cost of other essential goods and services, such as clothing, housing, health care or education. Even by this "bare minimum" definition, around 25% of the population (ie, about 275,000,000) lives below the poverty line [2,3].

In comparison to the poverty line measurement of poverty which the government uses to boast about the effectiveness of its policies, the 2006 UN Human Development Index (which seems to be a more realistic measure of poverty) ranks India 126 out of 177 countries[4].

There's nothing wrong with hard work - that's just the way it is. I am more concerned whether or not the system is fair. The failure in capitalist systems is the failure to rein in the likes of Enron and Worldcom. Laissez faire capitalism just does not work.

Another major failure of capitalism is economic disparity.

I agree. I also think that the government has the potential to play an important role in promoting the welfare of developing societies, especially through redistributive policies.

[1] - http://mospi.nic.in/compenv2000_appendix%206.htm
[2] - https://www.cia.gov/cia/publications/factbook/print/in.html
[3] - http://economictimes.indiatimes.com/articleshow/702850.cms
[4] - http://hdr.undp.org/hdr2006/statistics/countries/country_fact_sheets/cty_fs_IND.html

 

[eaboujaoudeh]

Thats not so. Suicide rates in alaska are just as high. This is a biological issue that should be excluded--I remember 20 years ago it was that the sexual looseness of the situation was the cause. Suicide rates fairly follow latitude.

hmm. interesting i didn't know that. but most things i hear from my friends up in sweden is that they tell me that there's nothing special to do..as if they got bored and had no goals, so i conculded that it might be the governmental policy of just doing everything for the people so they don't even need to try.

 

[eaboujaoudeh]

camels for oil

I'd like to imagine money out of the eqn, not sure how it could be best implemented. Theres a moneyless exchange system up in Boulder, CO, USA I have thought about belonging to. I see where itmight work small scale, but build a dam or rocket, gets messy.

well yeah..in the old days in the arabian penninsula desert they used to barter things, especially in Camels. i would like to imagine an american petroleum company renting land for mining and paying in camels :P its like 200 camels/month..wouldn't u just pay a 2billions dollar/month to get out of such a contract :P

 

[eaboujaoudeh]

to siddharth, well for my part i think its hard to get jobs for a densely packed billion human beings !. what can a government do in that case?
basicly where do u think the government can do more?

 

[denverdoc]

well yeah..in the old days in the arabian penninsula desert they used to barter things, especially in Camels. i would like to imagine an american petroleum company renting land for mining and paying in camels :P its like 200 camels/month..wouldn't u just pay a 2billions dollar/month to get out of such a contract :P

I agree, and maybe a topic of a new post, which might bring fresh insights. I tried money, drugs, and sex. Pitifully, I would suggest in at least my case, the feeling of family, intellectual stimulation, freedom frm ethical conflict and comfort are the biggest forces in descending order. But I'm not egotistically driven the same way as many of my peers, who count publications like animal skins. A different kettle of fish,--one very much aware of payback, the other just being the best citizen one can be.

 

[eaboujaoudeh]

well i think then u should start that new post !

 

[denverdoc]

well i think then u should start that new post !

OK...

 

[russ_watters]

Can you provide examples of the revolutionary socio-economic changes in the US every 10 years you refer to? Even changes in governing parties seem me to have had only minor impacts to the overall system.

How is that a reasonable criteria for defining a revolution? Typically, a change in governing parties is the definition - they don't have to be very different. Heck, historically most revolutions end up replacing one dictator for another, changing virtually nothing.

My point is obviously related to a coefficient getting ever nearer the magical 1 which btw is not quite infinity simply all income.

Look at the equation and what it means. A Gini coefficient of 1 is A/(A+B)=1/(1+0), which would mean that the one richest person in the country has all of the country's wealth and everyone else has precisely zero. The actual wealth distribution curve is hyperbolic. Besides not being "magical", a gini coeff of 1 is unattainable as a mathematical limit. It is an asymptote.

Check out the Gini coefficient world map on this page http://en.wikipedia.org/wiki/Gini_coefficient and tell me how many countries with a Gini over 0.5 you would label as havibg stable governments.

Not many, but so what? It is not relevant, since you are comparing different political/economic systems with different reasons for stability/instability (not the least of which is the extreme poverty level in many of those countries due to non-functional economies). Heck, it says so right there next to the map!

All I am looking for though at the moment is an admission that the system is flawed.

Of course the system is flawed: all systems are flawed. But it is still by far the best there is (the capitalist/democratic one in general, I mean).

But isn't that the whole point. The various indicators suggest many countries with severe economic inequality, typified by the US in this instance, are far from healthy.

You posted a map implying the countries that are above .5 are good examples, but how many of them are mature capitalist countries? Are you saying the US isn't healthy or just that the US will become like those other countries? Either way, it simply doesn't follow logically.

edit: For example, the Central African Republic is one of the higher ones (.6). It is clearly unstable, but is it because of the .6 Gini or because it has a per capita GDP of $1,100 and somewhere on the order of 60% poverty? I think you will find that the US is unique in its ability to maintain a high per capita GDP and a high Gini coeffiient at the same time (thus relatively low poverty) .

 

[russ_watters]

Thats poppycock. Especially the part about unethical behavior--utter nonsense.

Did you read the article? Have you ever talked to a Russian...? Malaise is a way of life.

 

[russ_watters]

What i don't like about capitalism is that people have to compete and work hard to make money but they can never reach the top of the social pyramid. Money doesn't come so easy for most people like it did for Bill Gates or Warren Buffet. Most people have to work hard for their incomes.

Do you know what fraction of our billionaires are self-made? Do you know that Bill Gate's ealy years at Microsoft were spent using a motel as an office and doing marathon programming sessions?

Sure, luck had something to do with it. It always does - ask the winner of any NASCAR race. But skill and hard work is important as well.

Also about half of all human effort today is wasted on the administration of the capitalist system. Everybody who uses money, counts money, receives money, worries about money, steals money, catches the thieves, gambles for money, handles credit cards, handles other value papers, everybody who works in the banks, half of all the people working in the supermarkets, are working with the administration of the money system. The money system is a centrally controlled system.

So we are already today getting by fairly well, on average globally, with only a small part of the possible workforce actually producing anything useful.

Wasted? Useless? Part of the beauty of the capitalist system is that money does work too!

Heck, the opposite is the basic problem for socialism/capitalism: it doesn't value humans. Humans do the work and provide the economic value, but the system does not reward them with value equal to their work but instead sees them as expendable burdens to be supported. It does not take much for a slightly sociopathic despot to sieze upon the idea and create horrible misery in the name of economic progress. Stalin murdered millions not because of racism (ie, Hitler), but because of the economic implications of their existence.

 

[Art]

How is that a reasonable criteria for defining a revolution? Heck, historically most revolutions end up replacing one dictator for another, changing virtually nothing. Typically, a change in governing parties is the definition - they don't have to be very different.

Revolution \rev`o*lu"tion\, n. [F. révolution, L. revolutio.]

A drastic and far-reaching change in ways of thinking and behaving. http://artcode.org/lexicon/definitions/revolution.php?size=384

Now show me what you base your definition on.

Look at the equation and what it means. A Gini coefficient of 1 is A/(A+B)=1/(1+0), which would mean that the one richest person in the country has all of the country's wealth and everyone else has precisely zero. The actual wealth distribution curve is hyperbolic. Besides not being "magical", a gini coeff of 1 is unattainable as a mathematical limit. It is an asymptote.

I meant what was your point not what were the maths; though I see you now agree it is not infinite.

Not many, but so what? It is not relevant, since you are comparing different political/economic systems with different reasons for stability/instability (not the least of which is the extreme poverty level in many of those countries due to non-functional economies). Heck, it says so right there next to the map! Of course the system is flawed: all systems are flawed. But it is still by far the best there is (the capitalist/democratic one in general, I mean). You posted a map implying the countries that are above .5 are good examples, but how many of them are mature capitalist countries? Are you saying the US isn't healthy or just that the US will become like those other countries? Either way, it simply doesn't follow logically

edit: For example, the Central African Republic is one of the higher ones (.6). It is clearly unstable, but is it because of the .6 Gini or because it has a per capita GDP of $1,100 and somewhere on the order of 60% poverty? I think you will find that the US is unique in its ability to maintain a high per capita GDP and a high Gini coeffiient at the same time (thus relatively low poverty) .

You asked for evidence that countries with a Gini index >0.5 were susceptible to anti-government unrest and I provided it. You can dismiss the correlation as mere coincidence if you like but I think you are deluding yourself. As for the US being a special case and thus immune - I already addressed that in the analogy I supplied earlier; which incidentally you appeared to agree with.

I think what you will find is that like other countries with high income inequality the government will become more and more repressive to quell dissent from an ever increasing % of the population who believe the American dream is their personal nightmare. Sooner rather than later you will see legislation such as the Patriot Act (an oxymoron if ever there was one) being used to suppress any organised protest as is already happening with 'free speech' zones being designated far away from the object of their protest and of course the TV cameras when the president comes to town.

Despite your protestations of the effects I see you do concede that capitalism in it's current form is flawed, which seems to me to be a somewhat paradoxical position to hold, never-the-less what changes do you think need to be made for it to survive as the socio-economic system of choice for the long term?

Interestingly it seems Forbes,which I don't think anyone could ever accuse of being left wing, agrees with my assessment as to the effect of income inequality without economic mobility.

One lesson of all this is that societies where the spoils are more unevenly divided, such as the U.S., had better be mobile--or else. If a large enough number of people believe they have a fair shot at success, then they will put up with the megarich. But if large numbers feel stuck at the bottom, sooner or later they will explode

Do you know what fraction of our billionaires are self-made? Do you know that Bill Gate's ealy years at Microsoft were spent using a motel as an office and doing marathon programming sessions?

There are only 371 billionaires in the US in total, many of which inherited the bulk of their wealth and so they are hardly a representative sample for the economic aspirations of the general populace.

 

[denverdoc]

Did you read the article? Have you ever talked to a Russian...? Malaise is a way of life.

As a matter of fact I have. I was incredulous to find re the women there:
1) better educated than US counterparts
2) less prone to obesity
3) far less materialistic
4)far more committed to family

No one complained of malaise. Hope for a better life, yes, but i doubt that would be different anywhere.

 

[siddharth]

to siddharth, well for my part i think its hard to get jobs for a densely packed billion human beings !. what can a government do in that case?
basicly where do u think the government can do more?

Here's some of the issues which I think the government should seriously look at

- Agriculture sector:

60% of the working population in India is employed in agriculture, while it's contribution to the GDP is 19.9%[1]. My last post highlighted the problem with the existing poverty line in India. If one uses a "better" poverty line, which includes other basic commodities, the rural poverty will be at 85%[2].

What the government could do:

(i) Phase out the land ceiling act! Small land holdings are going to affect productivity.
(ii) Provide opportunities for education and training so that farmers can move to the manufacturing and service sectors.
(iii) Invest in infrastructure. For example, invest in improving irrigation. Half the farmers still depend on the monsoons for irrigation[3]

- Education:
The literacy rate in India 59.5% [1]. I think that the government needs to completely rethink it's policies here. Currently, the state of government funded schools are absolutely terrible, especially in rural areas.

There's a interesting view how the government could improve education by deregulating some of it's criteria for low-budget private schools.

http://indianeconomy.org/2007/03/09/the-unknown-education-revolution-in-india/" ,

in a 2005 Delhi study[11], James Tooley found that children in low-budget unrecognized private schools did 246% better than government school children on a standardized English test, with around 80% higher average marks in mathematics and Hindi.

There are important lessons here for education policymakers in India. Education entrepreneurs need to be encouraged by removing rules that hinder the establishment and operation of schools in the primary, secondary and higher secondary areas of education. Competing schools will create choices for parents, improving access and quality for all. The government can then focus its limited education budget on the neediest sections of society.

This is a http://www-tech.mit.edu/V124/N60/knesmith.60c.html" , which offers the same idea.

As I have mentioned before in a previous post, I strongly feel that reservation in educational institutions on the basis of caste has got to go.

- Labor laws

Some of the Labor laws in India are rigid, inflexible and completely stupid. I honestly feel that the policy makers who made them had no clue about economics or the way markets work (See http://news.bbc.co.uk/2/hi/south_asia/4103554.stm" ). As a result, the distorted market for labor is going to hurt employment, especially in the manufacturing sector.

IMO, the government needs to do much more in many other fields as well, such as improving transport links between rural areas and providing adequate health facilities. Most of the popular media coverage seems to be focusing only on the GDP growth (mainly due to the IT sector). I think it's time they look beyond the rosy picture at the actual inequality present, and ways to alleviate poverty.

[1] - CIA fact sheet on India
[2] - http://www.epw.org.in/articles/2006/06/10238.pdf
[3] - http://www.fao.org/ag/Agl/AGLW/aquastat/regions/asia/index5.stm

 

[eaboujaoudeh]

u know since u mentioned it, India can't be far away from being able to become like China, you have everything it takes, + higher education levels. we have the same trouble with our government, it just kills us to see all our resources thrown away in theft and corruption. well best of luck for both of our countries :).

 

[russ_watters]

Now show me what you base your definition on.

Oh, c'mon. That isn't the applicable definition and you know it.

I meant what was your point not what were the maths; though I see you now agree it is not infinite.

? Uh, no...

The point was two-fold:
-A gini coeff of 1 is unattainable.
-There is nothing "magical" about a gini coeff of 1.

You asked for evidence that countries with a Gini index >0.5 were susceptible to anti-government unrest and I provided it. You can dismiss the correlation as mere coincidence if you like but I think you are deluding yourself.

Well, fine. You've made your point with spurious logic and you're ok with it. Ok, then...

As for the US being a special case and thus immune - I already addressed that in the analogy I supplied earlier; which incidentally you appeared to agree with.

? You do realize other people can read this thread, right? You can't just put words in my mouth and expect people not to see through you.

I think what you will find is that like other countries with high income inequality the government will become more and more repressive to quell dissent from an ever increasing % of the population who believe the American dream is their personal nightmare. Sooner rather than later you will see legislation such as the Patriot Act (an oxymoron if ever there was one) being used to suppress any organised protest as is already happening with 'free speech' zones being designated far away from the object of their protest and of course the TV cameras when the president comes to town.

A bold prediction. And ultimately meaningless since we can't test it. But we can use logic and similar examples to show whether or not it makes sense. And clearly, the US simply does not fit with other countries with high gini coefficients. The gini coeff is about the only thing that is similar between the US and countries with stability issues.

Despite your protestations of the effects I see you do concede that capitalism in it's current form is flawed, which seems to me to be a somewhat paradoxical position to hold

Of course capitalism is flawed - but why is that paradoxical?

You're using that statement like Creationists use "it's only a theory..." Saying capitalism is flawed is not the same as saying capitalism is a bad system. You're trying to fire a gun that isn't loaded.

Capitalism is flawed and it is also the best system we have and are likely to have.

never-the-less what changes do you think need to be made for it to survive as the socio-economic system of choice for the long term?

It's survival is not at stake. It is perfectly stable as is. But clearly, the US could do a better job with government waste, helping the truly needy, and avoiding helping those who are scamming the government.

Interestingly it seems Forbes,which I don't think anyone could ever accuse of being left wing, agrees with my assessment as to the effect of income inequality without economic mobility.

Do you have a link to that? A quick google implies you are wrong: http://findarticles.com/p/articles/mi_kmfor/is_199704/ai_n15360096
http://www.forbes.com/forbes/2003/0317/098_print.html

There are only 371 billionaires in the US in total, many of which inherited the bulk of their wealth and so they are hardly a representative sample for the economic aspirations of the general populace.

So...you're saying you don't know what fraction of our billionaires are self-made?

 

[Art]

Oh, c'mon. That isn't the applicable definition and you know it.?

It's the dictionary definition. If you can find a source to support your personal definition please provide it otherwise concede the point and move on.

The point was two-fold:
-A gini coeff of 1 is unattainable.
-There is nothing "magical" about a gini coeff of 1. ?

How is this relevant to the discussion? It is the movement towards 1 that matters.

Well, fine. You've made your point with spurious logic and you're ok with it. Ok, then...

Yes I've made my point using logic supported by authoritative sources isn't that how one is supposed to debate on this forum??

? You do realize other people can read this thread, right? You can't just put words in my mouth and expect people not to see through you.

lol Pot-kettle springs to mind. Maybe I'm confused because your argument is somewhat confused and contradictory.

A bold prediction. And ultimately meaningless since we can't test it. But we can use logic and similar examples to show whether or not it makes sense. And clearly, the US simply does not fit with other countries with high gini coefficients. The gini coeff is about the only thing that is similar between the US and countries with stability issues.

Yet strangely Forbes whilst very supportive of wealth inequality in principal, agrees with the thrust of my argument http://www.forbes.com/billionaires/free_forbes/2003/0317/098_2.html

Of course capitalism is flawed - but why is that paradoxical?

Because whilst conceding capitalism is broken you argue it doesn't need fixing.

You're using that statement like Creationists use "it's only a theory..." Saying capitalism is flawed is not the same as saying capitalism is a bad system. You're trying to fire a gun that isn't loaded.

As I was saying.

Capitalism is flawed and it is also the best system we have and are likely to have. It's survival is not at stake. It is perfectly stable as is. But clearly, the US could do a better job with government waste, helping the truly needy, and avoiding helping those who are scamming the government.

Come now Russ, even you must concede that the current trend of growing wealth inequality must reach a point where it becomes intolerable to society as a whole (by current trends the USA will be on a par with Mexico by 2043). In your statement above you begin by stating that the current system is stable (in fact you claim perfectly stable) as it is and yet then go on to suggest 'socialist ' fixes that are needed which seems to show a lack of conviction in your initial assertion.

Do you have a link to that? A quick google implies you are wrong: [/QUOTE] Link provided above and ...ters and I'll be able to answer the question.

 

[X-43D]

There is the payment system which forces people to pay money for goods and services. Poor people simply don't have the money to pay for goods and services and become dependent on others. We need a share system, not an exchange system. A system with exchange and accumulation is a capitalist system, with all the disadvantages it brings with it. Dependency and a lack of individual freedom, economic inequality, a centralized control system with a gigantic bureaucracy, the money system and value papers, banks, people who make prices, people who demand money payments, receive and count the payments, people who steal money, people who chase, stop and arrest the thiefs, people building cashiers machines, pay interest, mortgages, robbery, murder for financial gain, gambling, etc. So much effort is wasted on the administration of the money system, so that only a small amount of people actually produce anything useful.

 

[Astronuc]

There is the payment system which forces people to pay money for goods and services. Poor people simply don't have the money to pay for goods and services and become dependent on others. We need a share system, not an exchange system. A system with exchange and accumulation is a capitalist system, with all the disadvantages it brings with it. Dependency and a lack of individual freedom, economic inequality, a centralized control system with a gigantic bureaucracy, the money system and value papers, banks, people who make prices, people who demand money payments, receive and count the payments, people who steal money, people who chase, stop and arrest the thiefs, people building cashiers machines, pay interest, mortgages, robbery, murder for financial gain, gambling, etc. So much effort is wasted on the administration of the money system, so that only a small amount of people actually produce anything useful.

Modern industrialized/developed societies are built upon a commercial economy, which is far different from economies of 3000-5000 years ago, which were either hunter/gatherer or agrarian. In addition, the population is much more dense.

In parts of the ancient world, tribes fought over hunting grounds or agricultural areas. Slavery (human trade) was common 2000-3000 years ago, and in some societies women and children more no more than property, which is still unfortunately the case even today.

One has to ask - is there any socio-economic system that it is immune from the problems stated above. One could steal food, clothing, livestock, . . . as much as one could steal money. Most, if not all, human societies experience/suffer from thievery, violence, murder, gambling.

Can a human community exist in which resources are shared - as in a commons? This was theoretically the goal in socialism or communism, but just as in capitalism, there are always individuals or small groups who seek to take or control a disproportionate share of the resources.

 

[Astronuc]

Looking closer to home - in the US.

In Turnabout, Infant Deaths Climb in South
http://www.nytimes.com/2007/04/22/health/22infant.html

HOLLANDALE, Miss. — For decades, Mississippi and neighboring states with large black populations and expanses of enduring poverty made steady progress in reducing infant death. But, in what health experts call an ominous portent, progress has stalled and in recent years the death rate has risen in Mississippi and several other states.

The setbacks have raised questions about the impact of cuts in welfare and Medicaid and of poor access to doctors, and, many doctors say, the growing epidemics of obesity, diabetes and hypertension among potential mothers, some of whom tip the scales here at 300 to 400 pounds.

“I don’t think the rise is a fluke, and it’s a disturbing trend, not only in Mississippi but throughout the Southeast,” said Dr. Christina Glick, a neonatologist in Jackson, Miss., and past president of the National Perinatal Association.

To the shock of Mississippi officials, who in 2004 had seen the infant mortality rate — defined as deaths by the age of 1 year per thousand live births — fall to 9.7, the rate jumped sharply in 2005, to 11.4. The national average in 2003, the last year for which data have been compiled, was 6.9. Smaller rises also occurred in 2005 in Alabama, North Carolina and Tennessee. Louisiana and South Carolina saw rises in 2004 and have not yet reported on 2005. . . . . continued

This is disturbing!

 

[edward]

Looking closer to home - in the US.

In Turnabout, Infant Deaths Climb in South
http://www.nytimes.com/2007/04/22/health/22infant.html

This is disturbing!

Food stamps can be used to purchase junk food, but not multivitamins.

 

[edward]

1. Half the world — nearly three billion people — live on less than two dollars a day.

2. The GDP (Gross Domestic Product) of the poorest 48 nations (i.e. a quarter of the world’s countries) is less than the wealth of the world’s three richest people combined.

3. Nearly a billion people entered the 21st century unable to read a book or sign their names.

4. Less than one per cent of what the world spent every year on weapons was needed to put every child into school by the year 2000 and yet it didn’t happen.

5. 1 billion children live in poverty (1 in 2 children in the world). 640 million live without adequate shelter, 400 million have no access to safe water, 270 million have no access to health services. 10.6 million died in 2003 before they reached the age of 5 (or roughly 29,000 children per day).

http://www.globalissues.org/TradeRelated/Poverty.asp

I have read a number of stats on this subject, but I think number 4. puts into perspective how truly uncivilised this supposedly modern world is.

 

[russ_watters]

We need a share system, not an exchange system.

I guess that's philosophy, but it doesn't have any real meaning unless you can turn it into a coherent description of a functional economic system. It is just useless idle pseudo-philosophizing.

Can you describe what this "share system" is and how it would function?

Bellyaching about the flaws in the current system is not useful. Coming up with real, viable, functional solutions is.

 

[russ_watters]

http://www.globalissues.org/TradeRelated/Poverty.asp

I have read a number of stats on this subject, but I think number 4. puts into perspective how truly uncivilised this supposedly modern world is.

#4 doesn't make any sense. Could you explain it to me? What I mean is this "by the year 2000" thing. Starting when? And how?

In any case, those stats are a snapshot in time. They don't tell you how things are changing. Or why...

 

[ShawnD]

http://www.globalissues.org/TradeRelated/Poverty.asp

I have read a number of stats on this subject, but I think number 4. puts into perspective how truly uncivilised this supposedly modern world is.

There was one question in my grade 9 economics class that stuck with me. Why are Canada and America wealthy?

Because America has resources.
Wrong! Both India and Africa have lots of natural resources, but neither are wealthy.

Oh, it's because America has a lower population density so the share of resources per person is greater!
That is also wrong. Hong Kong and Japan have overwhelming population density, but they are both wealthy.

Well then it must be because America has a lot of infrastructure.
That is also wrong. When the Europeans invaded America (I say invaded because it was inhabited at the time), they started with literally no infrastructure of their own, and this was as little as ~300 years ago. The people who live in India now have lived in India for literally thousands of years, so they had a head start on developing infrastructure.

Ok well maybe it has something to do with civil unrest since India did have a great conflict against Britain and they did have the succession of Pakistan.
Wait a minute, that same exact thing happened to America. There was a war with Britain, then a war due to succession.Maybe India is just meant to be poor. Who knows.
edit: siddharth makes some very good points and they seem to agree with the idea that poverty is caused by less-than-perfect economic planning. We can't fix poverty by giving handouts (as suggested by any stats about feeding or educating the "world"). All we can do is change our government policies, and that can only be done from within the country; the UN generally frowns on the idea of external forces changing government policies (Iraq).