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On September 14 2016 09:02 WhiteDog wrote:Show nested quote +On September 14 2016 08:27 Nyxisto wrote:I'll have to look through the book for the actual quotes(the thing is enormous) but this is one graph of the book basically shows his central r > g thesis over historical periods: + Show Spoiler +And I think it's pretty clear that the birth of the modern economy, at least until very recently, had a huge liberating effect and that inheritance and wealth inequality, although of course being stark, have today less of a role than they had during historical periods. I think you totally misunderstood Piketty's book. The r > g thesis is a case against unregulated capitalism : there is no natural mecanism that permit g (growth) to be superior to r (the return of interest on capital) but when r > g, inequality rise. Fact is, inequalities in capital assets today are similar to the pre WWII era (and what permitted g > r after WWII is not the "modern economy" but the destruction of capital during WWII). And inequality of income are pretty high : + Show Spoiler +Any kind of comparaison with pre capitalist society is kinda useless. The overall wealth produced was so low that inequalities were not that high until the start of the industrial revolution (except for some specific historical counter exemple). The distribution of wealth was following various customs and laws, and most workers were autonomous (producing their own food and all) for a big part of history. Tjhe 320 billion figure is evaluated through : the cost of the education of the migrants (83 billion dollars paid by Mexico) and the cost of the social reproduction of the future workers (the cost for the food of the future workers) compared to the sum send by the mexican workers in the US to Mexico during the period.
Yes, exactly. But given the graph I posted we can see that there was a vast period of actual economic growth and low returns on capital, implying that we actually saw a decline in inequality up until the 70's and 80's of the last century. Only very recently inequality has risen again but not yet to pre-modern level.
So we clearly must have been doing something right. No matter if rapid technological increase, or increase in globalization, we can't demonize the modern neoliberal system completely because it actually has managed to create a vast amount of wealth for a vast amount of people.
Also if I remember correctly Piketty strongly emphasizes the relation between pop. growth and economic growth to the point of equating the two. So a competition for labour doesn't seem to be as important as having a young and constantly growing population(to combat inequality), which makes sense as young people usually don't fall into the capital owning class.
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On September 14 2016 09:18 Nyxisto wrote:Show nested quote +On September 14 2016 09:02 WhiteDog wrote:On September 14 2016 08:27 Nyxisto wrote:I'll have to look through the book for the actual quotes(the thing is enormous) but this is one graph of the book basically shows his central r > g thesis over historical periods: + Show Spoiler +And I think it's pretty clear that the birth of the modern economy, at least until very recently, had a huge liberating effect and that inheritance and wealth inequality, although of course being stark, have today less of a role than they had during historical periods. I think you totally misunderstood Piketty's book. The r > g thesis is a case against unregulated capitalism : there is no natural mecanism that permit g (growth) to be superior to r (the return of interest on capital) but when r > g, inequality rise. Fact is, inequalities in capital assets today are similar to the pre WWII era (and what permitted g > r after WWII is not the "modern economy" but the destruction of capital during WWII). And inequality of income are pretty high : + Show Spoiler +Any kind of comparaison with pre capitalist society is kinda useless. The overall wealth produced was so low that inequalities were not that high until the start of the industrial revolution (except for some specific historical counter exemple). The distribution of wealth was following various customs and laws, and most workers were autonomous (producing their own food and all) for a big part of history. Tjhe 320 billion figure is evaluated through : the cost of the education of the migrants (83 billion dollars paid by Mexico) and the cost of the social reproduction of the future workers (the cost for the food of the future workers) compared to the sum send by the mexican workers in the US to Mexico during the period. Yes, exactly. But given the graph I posted we can see that there was a vast period of actual economic growth and low returns on capital, implying that we actually saw a decline in inequality up until the 70's and 80's of the last century. Only very recently inequality has risen again but not yet to pre-modern level.
It does not imply that at all, it just imply inequality were not rising, not that inequalities were declining. Plus, as Piketty showed in the book, what actually best describe the period (from 1950 to 1970-1970) is the importance of state owned wealth.
Plus your "premodern level" doesn't mean much. I just told you that inequality in the middle age were not as high as pre WW II or as today. It's pretty easy to understand : gdp was absurdly low back then.
So we clearly must have been doing something right. No matter if rapid technological increase, or increase in globalization, we can't demonize the modern neoliberal system completely because it actually has managed to create a vast amount of wealth for a vast amount of people.
This kind of comment is so absurdly ignorant. The pre 1970 era was not a globalized era : the bretton woods prevented high mobility of capital. The migration were small, the distribution of income was high, the publicly owned wealth too, keynesian redistribution was important, etc. We were doing good things indeed : everything that we are not doing today.
Also if I remember correctly Piketty strongly emphasizes the relation between pop. growth and economic growth to the point of equating the two. So a competition for labour doesn't seem to be as important as having a young and constantly growing population(to combat inequality), which makes sense as young people usually don't fall into the capital owning class.
It's just a basic, very basic fact in economy that an increase in population leads to an increase in GDP. Doesn't mean much if the increase in GDP is lower than the increase in population (the gdp per capita can decrease). Piketty, in his book, actually repeat what we now know for sure : what is really important for real and long term growth is an increase in productivity. Migration does not do that at all.
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Weren't the 70's and the 80's when neoliberalism became the new black ?
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On September 14 2016 09:44 Godwrath wrote:
Weren't the 70's and the 80's when neoliberalism became the new black ?
It's the start of the shitshow yeah.
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On September 14 2016 09:02 WhiteDog wrote:Show nested quote +On September 14 2016 08:27 Nyxisto wrote:I'll have to look through the book for the actual quotes(the thing is enormous) but this is one graph of the book basically shows his central r > g thesis over historical periods: + Show Spoiler +And I think it's pretty clear that the birth of the modern economy, at least until very recently, had a huge liberating effect and that inheritance and wealth inequality, although of course being stark, have today less of a role than they had during historical periods. I think you totally misunderstood Piketty's book. The r > g thesis is a case against unregulated capitalism : there is no natural mecanism that permit g (growth) to be superior to r (the return of interest on capital) but when r > g, inequality rise. Fact is, inequalities in capital assets today are similar to the pre WWII era (and what permitted g > r after WWII is not the "modern economy" but the destruction of capital during WWII). And inequality of income are pretty high : ![[image loading]](http://theeconomiccollapseblog.com/wp-content/uploads/2014/04/Thomas-Piketty-Inequality.jpg) Any kind of comparaison with pre capitalist society is kinda useless. The overall wealth produced was so low that inequalities were not that high until the start of the industrial revolution (except for some specific historical counter exemple). The distribution of wealth was following various customs and laws, and most workers were autonomous (producing their own food and all) for a big part of history. Tjhe 320 billion figure is evaluated through : the cost of the education of the migrants (83 billion dollars paid by Mexico) and the cost of the social reproduction of the future workers (the cost for the food of the future workers) compared to the sum send by the mexican workers in the US to Mexico during the period.
I think the message in that graph is clear: we need to replicate the great depression and WW2 for the sake of inequality.
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On September 14 2016 14:28 WhiteDog wrote:Show nested quote +On September 14 2016 09:44 Godwrath wrote:
Weren't the 70's and the 80's when neoliberalism became the new black ? It's the start of the shitshow yeah.
Yeah, i was asking to Nyxisto when he said that inequality started to rise again on 70's and 80's, and then he said we were doing something right, but you addressed him before i pushed the send button.
On September 14 2016 18:23 Acrofales wrote:Show nested quote +On September 14 2016 09:02 WhiteDog wrote:On September 14 2016 08:27 Nyxisto wrote:I'll have to look through the book for the actual quotes(the thing is enormous) but this is one graph of the book basically shows his central r > g thesis over historical periods: + Show Spoiler +And I think it's pretty clear that the birth of the modern economy, at least until very recently, had a huge liberating effect and that inheritance and wealth inequality, although of course being stark, have today less of a role than they had during historical periods. I think you totally misunderstood Piketty's book. The r > g thesis is a case against unregulated capitalism : there is no natural mecanism that permit g (growth) to be superior to r (the return of interest on capital) but when r > g, inequality rise. Fact is, inequalities in capital assets today are similar to the pre WWII era (and what permitted g > r after WWII is not the "modern economy" but the destruction of capital during WWII). And inequality of income are pretty high : Any kind of comparaison with pre capitalist society is kinda useless. The overall wealth produced was so low that inequalities were not that high until the start of the industrial revolution (except for some specific historical counter exemple). The distribution of wealth was following various customs and laws, and most workers were autonomous (producing their own food and all) for a big part of history. Tjhe 320 billion figure is evaluated through : the cost of the education of the migrants (83 billion dollars paid by Mexico) and the cost of the social reproduction of the future workers (the cost for the food of the future workers) compared to the sum send by the mexican workers in the US to Mexico during the period. I think the message in that graph is clear: we need to replicate the great depression and WW2 for the sake of inequality. Pardon my ignorance, but do you mean that we need another WW to find again the political will for a more redistributive system ?
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The European Union needs a military headquarters to work towards a common military force, the Commission president has told MEPs in Strasbourg.
But Mr Juncker said a common military force "should be in complement to Nato". "More defence in Europe doesn't mean less transatlantic solidarity."
All EU members have military forces; most are also members of Nato; and several have extensive experience of operations abroad, from peace-keeping to war-fighting.
The real question is how to organise these component parts to get greater security. Mr Juncker insists that the EU must have a role here.
He wants to improve EU command and control facilities and appears to be suggesting that EU civil and military aspects of a given mission should be run out of the same headquarters.
He also insists that whatever the EU does it should not detract from Nato. But defence resources are finite. His critics will say nothing should be done that duplicates existing Nato activities, as that sends a signal of disarray in Western ranks to Moscow.
http://www.bbc.com/news/world-europe-37359196
I guess this is Juncker's response to nationalisms. Quite the guy.
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On September 14 2016 06:57 Nyxisto wrote:
So instead of treating this as an intellectual hobby where the only form of left-wing politics is acceptable is one that pleases privileged Europeans why not simply use any means that drastically reduces poverty no matter where? And even Picketty pointed out that the world has never been more egalitarian than it is today, despite living in a capitalist system.
From memory, Piketty is actually saying that current inequalities are returning to the standards of the worst periods of the XIXth and the beginning of the XXth century. The result of decades of deregulation is that the 62 wealthiest persons on Earth own as much as the 3.5 billion poorest people. Of course, even under neoliberalism, the majority of the population does get something from growth, but a growing part of the wealth created is captured by the richest.
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The super rich of today are really nothing compared to the robber barons. The relative wealth of for example Rockefeller was pretty insane.
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I have the feeling that things got worse with the collapse of the soviet union. As long as the soviet union existed there always was this strife for the better system.
Nowadays capitalism is seen as a system without alternative and worker rights get slowly but surely reduced - not for those working for 30 years already but for young people joining the market. I wonder whether our immigrants are willing to join and pay for our unions. My guess is no. Also the big unions themselves in Germany got pretty toothless. It is the small ones for example train conductors and pilots that still effectively fight for their members.
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On September 14 2016 21:31 Banaora wrote:
I have the feeling that things got worse with the collapse of the soviet union. As long as the soviet union existed there always was this strife for the better system.
Nowadays capitalism is seen as a system without alternative and worker rights get slowly but surely reduced - not for those working for 30 years already but for young people joining the market. I wonder whether our immigrants are willing to join and pay for our unions. My guess is no. Also the big unions themselves in Germany got pretty toothless. It is the small ones for example train conductors and pilots that still effectively fight for their members.
I think it's fair to estimate that capitalism would have continued on this path regardless of the Soviet Union's status, but your point is well taken. There isn't enough ideological pressure on capital, that much is clear.
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On September 14 2016 21:31 Banaora wrote:
I have the feeling that things got worse with the collapse of the soviet union. As long as the soviet union existed there always was this strife for the better system.
Nowadays capitalism is seen as a system without alternative and worker rights get slowly but surely reduced - not for those working for 30 years already but for young people joining the market. I wonder whether our immigrants are willing to join and pay for our unions. My guess is no. Also the big unions themselves in Germany got pretty toothless. It is the small ones for example train conductors and pilots that still effectively fight for their members.
You mean the system that slaugherted tens of millions of people was a strife for a better system?
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On September 14 2016 22:23 GoTuNk! wrote:Show nested quote +On September 14 2016 21:31 Banaora wrote:
I have the feeling that things got worse with the collapse of the soviet union. As long as the soviet union existed there always was this strife for the better system.
Nowadays capitalism is seen as a system without alternative and worker rights get slowly but surely reduced - not for those working for 30 years already but for young people joining the market. I wonder whether our immigrants are willing to join and pay for our unions. My guess is no. Also the big unions themselves in Germany got pretty toothless. It is the small ones for example train conductors and pilots that still effectively fight for their members. You mean the system that slaugherted tens of millions of people was a strife for a better system?
He means that this system, even if it was a giant—and criminal—fraud, was seen as a counter-power, and scared elites enough so that they would make concessions to the masses.
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On September 14 2016 22:27 TheDwf wrote:Show nested quote +On September 14 2016 22:23 GoTuNk! wrote:On September 14 2016 21:31 Banaora wrote:
I have the feeling that things got worse with the collapse of the soviet union. As long as the soviet union existed there always was this strife for the better system.
Nowadays capitalism is seen as a system without alternative and worker rights get slowly but surely reduced - not for those working for 30 years already but for young people joining the market. I wonder whether our immigrants are willing to join and pay for our unions. My guess is no. Also the big unions themselves in Germany got pretty toothless. It is the small ones for example train conductors and pilots that still effectively fight for their members. You mean the system that slaugherted tens of millions of people was a strife for a better system? He means that this system, even if it was a giant—and criminal—fraud, was seen as a counter-power, and scared elites enough so that they would make concessions to the masses.
That's a class warfare (elites vs regular people) analisis with no bearing on reality.
Economic growth and increasing individual freedom in all realms (the exact opposite of the soviet union) is what makes countries prosperous. I assume we will disagree on this 
We will surely agree this "counter-power" was not worth it right?
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On September 14 2016 22:34 GoTuNk! wrote:Show nested quote +On September 14 2016 22:27 TheDwf wrote:On September 14 2016 22:23 GoTuNk! wrote:On September 14 2016 21:31 Banaora wrote:
I have the feeling that things got worse with the collapse of the soviet union. As long as the soviet union existed there always was this strife for the better system.
Nowadays capitalism is seen as a system without alternative and worker rights get slowly but surely reduced - not for those working for 30 years already but for young people joining the market. I wonder whether our immigrants are willing to join and pay for our unions. My guess is no. Also the big unions themselves in Germany got pretty toothless. It is the small ones for example train conductors and pilots that still effectively fight for their members. You mean the system that slaugherted tens of millions of people was a strife for a better system? He means that this system, even if it was a giant—and criminal—fraud, was seen as a counter-power, and scared elites enough so that they would make concessions to the masses. That's a class warfare (elites vs regular people) analisis with no bearing on reality. Economic growth and increasing individual freedom in all realms (the exact opposite of the soviet union) is what makes countries prosperous. I assume we will disagree on this We will surely agree this "counter-power" was not worth it right?
You are talking with hindsight using everything you know from today.
Back then there were the student protests in 68. Communist parties in many different European countries. The terror of the RAF in Germany and other fighters in other European countries using soviet ideology. It **was** a struggle which was the better system. We **now** know who won.
And just so you know - there are still people in eastern Germany that tell "not everything was bad back then". People used to help each other more and there was less envy and competition. The other side is the west was better off all the time. Just imagine once it would have been different with the west worse off...
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I have often heard that back before the fall of the soviet union, ostentatious displays of wealth and general douchebag behaviour was much more frowned upon than it is today. That there was a much more sense of community everywhere in the UK. Of course it is probably coincidence.
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On September 14 2016 23:55 Banaora wrote:Show nested quote +On September 14 2016 22:34 GoTuNk! wrote:On September 14 2016 22:27 TheDwf wrote:On September 14 2016 22:23 GoTuNk! wrote:On September 14 2016 21:31 Banaora wrote:
I have the feeling that things got worse with the collapse of the soviet union. As long as the soviet union existed there always was this strife for the better system.
Nowadays capitalism is seen as a system without alternative and worker rights get slowly but surely reduced - not for those working for 30 years already but for young people joining the market. I wonder whether our immigrants are willing to join and pay for our unions. My guess is no. Also the big unions themselves in Germany got pretty toothless. It is the small ones for example train conductors and pilots that still effectively fight for their members. You mean the system that slaugherted tens of millions of people was a strife for a better system? He means that this system, even if it was a giant—and criminal—fraud, was seen as a counter-power, and scared elites enough so that they would make concessions to the masses. That's a class warfare (elites vs regular people) analisis with no bearing on reality. Economic growth and increasing individual freedom in all realms (the exact opposite of the soviet union) is what makes countries prosperous. I assume we will disagree on this We will surely agree this "counter-power" was not worth it right? You are talking with hindsight using everything you know from today. Back then there were the student protests in 68. Communist parties in many different European countries. The terror of the RAF in Germany and other fighters in other European countries using soviet ideology. It **was** a struggle which was the better system. We **now** know who won. And just so you know - there are still people in eastern Germany that tell "not everything was bad back then". People used to help each other more and there was less envy and competition. The other side is the west was better off all the time. Just imagine once it would have been different with the west worse off...
Well, Germany is the perfect example of why Communism does not, in fact work (or maybe rather, why the Marshall plan DID work, but the two are quite closely related). Because the west was better off all the time, because of Capitalism. In other countries you could point to other factors. For instance, a comparison between Netherlands and Poland is a comparison between two completely different countries. But between East and West Germany, was an artificial boundary with one side under a capitalist democracy, and the other side under a communist oligarchy. It's about as close to a random trial in macroeconomics as we will get (although NK vs. SK is another good example of the same).
And the conclusions are pretty clear: the productivity was simply much much lower in the communist countries. Were there upsides? Sure. But there is no need to repeat the experiment when we have learned our lessons from it. A good system should try to support and build on a capitalist basis to incorporate what was good about communism: mainly the social cohesion, which you point out (althoug I would also argue that there was more social cohesion in the capitalist countries in the 60s and 70s than there is now in our highly individualistic societies).
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Those kind of discussion are way too simplistic to be of any use. Communist try-outs had great success (one of which being that it was a society without any unemployment, with less inequality, a society that achieved high level of scolarization/alphabetization and health with rather low ressources to begin with). When you look at the human development index of Cuba and their GDP, and compare it to Qatar's development index and their GDP, everybody has to be shocked at the quality and the efficiency of Cuba's system that permit them to achieve better level of life expectancy and scolarization than qatar with less than a tenth of their GDP per capita.
So there's clearly sector where the "communist hypothesis" has had great results. At the same time, all communist economy did not produce enough goods for consumption (and were almost always in a situation of shortage), had high deficiencies in their political systems (leading to many crimes) and almost no increase in productivity (their growth was entirely based on an heavier use of their labor and capital). Not to mention all communist societies were at war for most of their history (the USSR used to spend 15 % of its GDP in its army ... twice as much as what the US spent on it back then, which is funny considering the US spend a lot more than almost anybody else on it today).
The question is not "what's best between capitalism and communism ?", it's "how can we build a better world ?" and the communist experience can have some clue on that.
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On September 15 2016 00:44 WhiteDog wrote:The question is not "what's best between capitalism and communism ?", it's "how can we build a better world ?" and the communist experience can have some clue on that.
This is simply too jagged a pill for many to swallow, particularly for those who pretend they live in a black and white world.
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EPT![[image loading]](http://www.nybooks.com/wp-content/uploads/2014/04/krugman_3-050814.png)
