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Old October 11th, 2017, 04:38 PM   #41

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Quote:
Originally Posted by tomar View Post
For most of human history there were shortages of even the most basic of necessities starting with food.....

Then in the 1950s or so we entered the era of plenty.

And now we have a weird situation:

On one hand there are many unfulfilled needs (infrastructure, security, etc..)
On the other hand we have the capability to produce more than enough to fulfill these needs
And at the same time we have large numbers of unemployed and poor (a recent EU study claims that a quarter of EU citizens are either poor or at severe risk of becoming poor)

So we have the means, we have the needs, we have the workforce and yet somehow we cant make it work....or at least we cant make it work for a significant number of people

Why ?
In a few words: wealth is overly concentrated in too few hands, thus leaving the real economy bloodless. You need a healthy middle class (the traditional "bourgeoisie") to keep capitalism running smoothly, and it is exactly this part of society that has been targeted extensively from the 80's and from neoliberal economics prevailing after that point, in favour of the upper class and in sharp contradiction to what was happening after WWII and the golden years of capitalism up until the oil crisis of the 70's.

Capitalism runs in circles and is a constant struggle for wealth distribution. The more the regulation, the less the inequality and the concentration of wealth in fewer hands. Deregulation favours the financially powerful, who get even more powerful this way. Before the '29 crash there was little to none regulation, with a wild-west type of economy: great opportunities and opportunism, frenzied gains and losses, excessive inequality, financial bubbles. The roaring 20's. Then it all came down miserably and inevitably. After the Great Depression settled in, FDR initiated unthinkable up to this point, socialist-type reforms that regulated the economy, most notably the banking sector, and capitalism in general. Pressure from the radicals and the masses of the desperate in his country, and the fear that Communism might become more appealing to them played a not so small part in this. This type of regulated Capitalism was exported to post-war Europe, giving birth, among other things, to the welfare state. The prosperity of the 50's and 60's gave way to the problems of the 70's (see oil crisis), which led to the criticism of that model, allowing the neoliberal model to gain prominence. Enter Reagan and Thatcher, and you have a new steering of the wheel. Deregulation. The pre-war phenomena begun replicating, in a more cultivated, attractive corporate package. And of course, yet another major crash followed, that of 2008. Only that this time, the previous game-makers hold firmly the model unchanged and their privileges retained. We haven't gone back to regulation again. Instead, we are headed to uncharted waters.
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Old October 12th, 2017, 12:16 AM   #42
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I think you will see that we are in a classic period of the Kondratiev Curve.

Click the image to open in full size.

In the past at this point in the curve we would be in a depression, with falling prices and very high unemployment. That we are not is due to novel experiment of Governments (mostly Western ones) pumping in massive amounts of liquidity resulting in large increases in National Debt.

We have yet to see if this will work.

But in any case we are seeing the de-skilling and elimination of middle Class white collar jobs - particularly in the over priced and over regulated Western World.

To add to the problem for the First World Middle Class, they are ones on whom the main tax burden falls.

Every other wave just like this one has involved the introduction of radical new technology and then a Banking crisis. In every case, so far, it has ended in revolution and war - we will see if we tame it this time.
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Old October 12th, 2017, 01:20 AM   #43
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Originally Posted by EmperoroftheBavarians43 View Post
15 dollars would buy you 152 dollars worth of stuff in 2017 money in 1950. However seeing as the problem I'm citing started in the 70s and 80s that's really not the relevant part honestly don't know why I put 1950 in.
Ok so basically prices have been multiplied by about 10....

I have just looked up "minimum wage in 1950" and it was $0.75 ($1 in 1956) ... Today its $7.25 so slightly less than 10 times more
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Old October 12th, 2017, 01:30 AM   #44
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Originally Posted by peccavi View Post
I think you will see that we are in a classic period of the Kondratiev Curve.

Click the image to open in full size.

In the past at this point in the curve we would be in a depression, with falling prices and very high unemployment. That we are not is due to novel experiment of Governments (mostly Western ones) pumping in massive amounts of liquidity resulting in large increases in National Debt.

We have yet to see if this will work.

But in any case we are seeing the de-skilling and elimination of middle Class white collar jobs - particularly in the over priced and over regulated Western World.

To add to the problem for the First World Middle Class, they are ones on whom the main tax burden falls.

Every other wave just like this one has involved the introduction of radical new technology and then a Banking crisis. In every case, so far, it has ended in revolution and war - we will see if we tame it this time.
The problem is that world pop has tripled in 60 years , something that is not reflected in Kondratiev's cycles...

The other unique situation since the 1950s or so, is the era of plenty.... Never before could the world produce most ANYTHING in most any quantity....
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Old October 12th, 2017, 02:01 AM   #45
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Quote:
Originally Posted by Solidaire View Post
In a few words: wealth is overly concentrated in too few hands, thus leaving the real economy bloodless. You need a healthy middle class (the traditional "bourgeoisie") to keep capitalism running smoothly, and it is exactly this part of society that has been targeted extensively from the 80's and from neoliberal economics prevailing after that point, in favour of the upper class and in sharp contradiction to what was happening after WWII and the golden years of capitalism up until the oil crisis of the 70's.

Capitalism runs in circles and is a constant struggle for wealth distribution. The more the regulation, the less the inequality and the concentration of wealth in fewer hands. Deregulation favours the financially powerful, who get even more powerful this way. Before the '29 crash there was little to none regulation, with a wild-west type of economy: great opportunities and opportunism, frenzied gains and losses, excessive inequality, financial bubbles. The roaring 20's. Then it all came down miserably and inevitably. After the Great Depression settled in, FDR initiated unthinkable up to this point, socialist-type reforms that regulated the economy, most notably the banking sector, and capitalism in general. Pressure from the radicals and the masses of the desperate in his country, and the fear that Communism might become more appealing to them played a not so small part in this. This type of regulated Capitalism was exported to post-war Europe, giving birth, among other things, to the welfare state. The prosperity of the 50's and 60's gave way to the problems of the 70's (see oil crisis), which led to the criticism of that model, allowing the neoliberal model to gain prominence. Enter Reagan and Thatcher, and you have a new steering of the wheel. Deregulation. The pre-war phenomena begun replicating, in a more cultivated, attractive corporate package. And of course, yet another major crash followed, that of 2008. Only that this time, the previous game-makers hold firmly the model unchanged and their privileges retained. We haven't gone back to regulation again. Instead, we are headed to uncharted waters.
I am not sure it is a "capitalism" problem.... Rather its human (or even animal look at squirrels) nature to accumulate as much as possible... Even in communist countries there was a Nomenklatura that had all the privileges. And communist countries had their economic crises as well, even though they were fully regulated.
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Old October 12th, 2017, 03:41 AM   #46
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Quote:
Originally Posted by tomar View Post
The problem is that world pop has tripled in 60 years , something that is not reflected in Kondratiev's cycles...

The other unique situation since the 1950s or so, is the era of plenty.... Never before could the world produce most ANYTHING in most any quantity....
This time its different - I bet they were saying that in 1870 as well!

This is always the refrain but surprisingly, history has a nasty habit of repeating itself albeit in a slightly different guise.
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Old October 12th, 2017, 02:01 PM   #47

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"Today its $7.25 so slightly less than 10 times more"
using nominal money value is misleading , the money could be worth 10 time less

there are several measure of real income ,
my personal one is how much of one income go into purchasing food
for an average resident in a wealthy country it's ~15% of income ( It change with social class of course )
for a middling state it's ~30%
for a third world population it reach ~80%
in case of famine it exceed 100% , that's the Lassale minimum for obtaining sustainable work from someone

Or as the old sign said ......."will work for food"
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Old October 12th, 2017, 03:00 PM   #48

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Quote:
Originally Posted by sparky View Post
.
"Today its $7.25 so slightly less than 10 times more"
using nominal money value is misleading , the money could be worth 10 time less

there are several measure of real income ,
my personal one is how much of one income go into purchasing food
for an average resident in a wealthy country it's ~15% of income ( It change with social class of course )
for a middling state it's ~30%
for a third world population it reach ~80%
in case of famine it exceed 100% , that's the Lassale minimum for obtaining sustainable work from someone

Or as the old sign said ......."will work for food"
Has the art of cooking declined? It seems so. Many young people with whom I speak don't know how to cook. I am not talking about microwaving things, but cooking. Buying out costs more and is often less healthy. It seems as if the healthy foods have all increased disproportionately. Still, cooking at home can still be quite economical and healthy.
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Old October 12th, 2017, 05:58 PM   #49

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Quote:
Originally Posted by tomar View Post
For most of human history there were shortages of even the most basic of necessities starting with food.....

Then in the 1950s or so we entered the era of plenty.

And now we have a weird situation:

On one hand there are many unfulfilled needs (infrastructure, security, etc..)
On the other hand we have the capability to produce more than enough to fulfill these needs
And at the same time we have large numbers of unemployed and poor (a recent EU study claims that a quarter of EU citizens are either poor or at severe risk of becoming poor)

So we have the means, we have the needs, we have the workforce and yet somehow we cant make it work....or at least we cant make it work for a significant number of people

Why ?
Imperfection is part of reality. Poor people will always exist because poor people are defined as people who have less money than average. It's like "short people", short people will always exist as long as we have tall people.

Now, in absolute terms, today the standards of living in the world are tremendously superior to the past. Today the average Mexican lives better than an American in the 1950's, for instance.
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Old October 12th, 2017, 06:02 PM   #50

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Quote:
Originally Posted by Solidaire View Post
In a few words: wealth is overly concentrated in too few hands, thus leaving the real economy bloodless. You need a healthy middle class (the traditional "bourgeoisie") to keep capitalism running smoothly, and it is exactly this part of society that has been targeted extensively from the 80's and from neoliberal economics prevailing after that point, in favour of the upper class and in sharp contradiction to what was happening after WWII and the golden years of capitalism up until the oil crisis of the 70's.
That is a very ignorant comment, first you fall to the 18th century mercantilism fallacy of the "glut": that you need people with money to buy the goods produced. You should read some basic manual of economics.

Quote:
Capitalism runs in circles and is a constant struggle for wealth distribution. The more the regulation, the less the inequality and the concentration of wealth in fewer hands. Deregulation favours the financially powerful, who get even more powerful this way. Before the '29 crash there was little to none regulation, with a wild-west type of economy: great opportunities and opportunism, frenzied gains and losses, excessive inequality, financial bubbles. The roaring 20's. Then it all came down miserably and inevitably.
That's a very folkloric interpretation of economic history. Serious scholars have hypotheses that the Great Depression was caused by bad policy from Herbert Hoover actually.

Read this article:
A different view of the Great Depression?s cause | VOX, CEPR?s Policy Portal

Quote:
After the Great Depression settled in, FDR initiated unthinkable up to this point, socialist-type reforms that regulated the economy, most notably the banking sector, and capitalism in general. Pressure from the radicals and the masses of the desperate in his country, and the fear that Communism might become more appealing to them played a not so small part in this. This type of regulated Capitalism was exported to post-war Europe, giving birth, among other things, to the welfare state. The prosperity of the 50's and 60's gave way to the problems of the 70's (see oil crisis), which led to the criticism of that model, allowing the neoliberal model to gain prominence. Enter Reagan and Thatcher, and you have a new steering of the wheel. Deregulation. The pre-war phenomena begun replicating, in a more cultivated, attractive corporate package. And of course, yet another major crash followed, that of 2008. Only that this time, the previous game-makers hold firmly the model unchanged and their privileges retained. We haven't gone back to regulation again. Instead, we are headed to uncharted waters.
That's just leftwing ideology of the cheapest variety.

You should try to be less Manichean about world economic history. It's complex and sophisticated field of inquiry and not something like "evil bankers wanted to exploit the working masses and enacted evil neo-liberal policies which generated crises, to solve for this problem we need socialism and put these evil bankers under control and confiscate their wealth". No, that is not remotely the way the world works.

Last edited by Guaporense; October 12th, 2017 at 06:05 PM.
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