Market Fears, Loathing in Europe

Radley Balko | February 13, 2008, 10:02am

While on a fellowship in Europe, Newsweek editor Stefan Thiel reviewed and compared economics textbooks for college and high school students in France, Germany, and the United States. He writes about what he found in the current issue of Foreign Policy.

“Economic growth imposes a hectic form of life, producing overwork, stress, nervous depression, cardiovascular disease and, according to some, even the development of cancer,” asserts the three-volume Histoire du XXe siècle, a set of texts memorized by countless French high school students as they prepare for entrance exams to Sciences Po and other prestigious French universities. The past 20 years have “doubled wealth, doubled unemployment, poverty, and exclusion, whose ill effects constitute the background for a profound social malaise,” the text continues . . . Capitalism itself is described at various points in the text as “brutal,” “savage,” “neoliberal,” and “American.” This agitprop was published in 2005, not in 1972.
[...]
Equally popular in Germany today are student workbooks on globalization. One such workbook includes sections headed “The Revival of Manchester Capitalism,” “The Brazilianization of Europe,” and “The Return of the Dark Ages.” India and China are successful, the book explains, because they have large, state-owned sectors and practice protectionism, while the societies with the freest markets lie in impoverished sub-Saharan Africa. Like many French and German books, this text suggests students learn more by contacting the antiglobalization group Attac, best known for organizing messy protests at the annual G-8 summits.

One might expect Europeans to view the world through a slightly left-of-center, social-democratic lens. The surprise is the intensity and depth of the anti-market bias being taught in Europe’s schools. Students learn that private companies destroy jobs while government policy creates them. Employers exploit while the state protects. Free markets offer chaos while government regulation brings order. Globalization is destructive, if not catastrophic. Business is a zero-sum game, the source of a litany of modern social problems.

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Comments to "Market Fears, Loathing in Europe":

gaijin | February 13, 2008, 10:16am | #

These ideas, like most others in democratic societies, will get tested by the global marketplace. I'll look forward to the leftist excuses when the prove non-competitive.

james | February 13, 2008, 10:18am | #

I am absolutely not surprised. Their textbooks are going to reflect the current dogma pervading their society the same as US textbooks reflect ours look at how many economic textbooks promote the Keynesian view of economics. Our textbooks on government extol the virtues of government programs and interventions. We aren't really any more informed then the Europeans are socialism is just called democracy.

Nick | February 13, 2008, 10:18am | #

Legislation in Germany allows mothers to stay home from work for two years after the birth of a child and receive almost full pay and benefits. Then the same people who praise the legislation complain there are no daycares.

Jim | February 13, 2008, 10:18am | #

Interesting piece, I wish it was longer, as I have another half-hour remaining of my mandatory work break. I'll get a croissant.

james | February 13, 2008, 10:18am | #

the last "are" should be "our"

Justin | February 13, 2008, 10:21am | #

I live in Utah, the reddest state in the United States, and we were taught Ayn Rand Objectivism as if it were gospel in my Political Science class. Extremism dwells everywhere, it seems.

creech | February 13, 2008, 10:26am | #

The International Society for Individual Liberty is one of the few libertarian organizations supporting small pro-free market, individual liberty groups around the world. They need the donations of American libertarians to help support and build such groups to counter the pervasive collectivism foreign students are fed. The same amount you sent to Ron Paul should be sent to ISIL to continue their good works.

P Brooks | February 13, 2008, 10:27am | #

Business is a zero-sum game, the source of a litany of modern social problems.

As we all know, only one party benefits in a transaction. Merchants who sell goods and services are siphoning money out of the neighborhood (or nation) like vampires sucking the lifeblood out of their hapless victims.

ed | February 13, 2008, 10:33am | #

we were taught Ayn Rand Objectivism

Consider yourself fortunate.

John Edwards | February 13, 2008, 10:33am | #

joe | February 13, 2008, 10:35am | #

In other news, the economic standard of living surpassed that in the United States sometime in 2007, for the first time since the 19th Century.

joe | February 13, 2008, 10:35am | #

...in Great Britain, that is.

Shane | February 13, 2008, 10:36am | #

damn brits.

joe | February 13, 2008, 10:38am | #

Frankly, I'm stunned there enough healthy Brits to have an economy. Shouldn't they all be sick and dead because of their health care system?

I guess not.

Episiarch | February 13, 2008, 10:40am | #

Speaking only anecdotally, but in Spain the job market is fucking horrible. Jobs are hard to get, especially ones which have far too many applicants like psychologists. The pay is horrible--shocking, really, if you are from the US. Rents and mortgages are similar to US levels or higher, but with the aforementioned low pay.

Nobody is hopeful or excited, they are only hoping to get any job that will just let them get by.

Like I said, this is only what has been told to me by friends and acquaintances, and so is anecdotal, but they all say it across the board.

robc | February 13, 2008, 10:44am | #

joe,

Unlike some other countries, Britain has private health care in addition to the socialized.

Rick | February 13, 2008, 10:46am | #

joe's trolling today. Please don't feed him.

james | February 13, 2008, 10:58am | #

Eventually socialism in all its forms will die out and I include democracy in the socialism group. Socialism is not an effective form of government and it is extremely expensive. We have already witnessed the collapse of communist socialism I believe next to collapse will be European socialism and then eventually American socialism (democracy) will collapse as well. No predictions as to when this will happen but eventually it will happen. There is no way that our government can continue to spend money the way it has been eventually the house of cards is going to collapse if it is not already in the process of collapsing.

Nick | February 13, 2008, 10:59am | #

Why would Spain need any psychologists? They have Siesta! I think if we had siestas, we'd be happier.

Mike Laursen | February 13, 2008, 11:01am | #

joe's trolling today. Please don't feed him.

No shit. The posting is about France and Germany, so he brings up ... Great Britain.

james | February 13, 2008, 11:02am | #

"As we all know, only one party benefits in a transaction. Merchants who sell goods and services are siphoning money out of the neighborhood (or nation) like vampires sucking the lifeblood out of their hapless victims."

There are millions of people in our country who don't understand that in economic transactions both parties tend to benefit or there would be no transaction. Would someone please send a memo to the MSM so at least in the US we can start getting the economics right.

Nick | February 13, 2008, 11:03am | #

Yeah, and Great Britain isn't even a country name, it's an island. If we want to get all pissy.

Sam Grove | February 13, 2008, 11:04am | #

In other news, the economic standard of living surpassed that in the United States sometime in 2007, for the first time since the 19th Century.

We trust the news. The news always tells it like it is.

The question: according to who?

joe | February 13, 2008, 11:05am | #

Why, it's not even European! Or socialist!

Really, joe, I don't see what that has to do with anything.

Now leave us alone so we can talk about how socialism in European countries destroys their economies.

Mike Laursen | February 13, 2008, 11:07am | #

joe, don't act like you were trying to start serious discussion about socialism. Your original comment was clearly in the trolling/potshot mode.

Sam Grove | February 13, 2008, 11:07am | #

I believe next to collapse will be European socialism and then eventually American socialism (democracy) will collapse as well.

Or perhaps the other way around. When we can no longer support NATO and have to close our bases in Europe, the socialist paradises of Europe will be left to their own devices.

Sam Grove | February 13, 2008, 11:09am | #

Should that be "according to whom?"
Never mind, 'says who?'

joe didn't even provide a link so we can see the proof with our very own eyes.

von Laue | February 13, 2008, 11:10am | #

I'm making a post about not the topic....

von Laue | February 13, 2008, 11:10am | #

Then finishing the sentence!

von Laue | February 13, 2008, 11:10am | #

me me me me me me me look at me

Sam Grove | February 13, 2008, 11:12am | #

and joe, in case you hadn't noticed, there's lots of commentary here about 'U.S. socialism', not 'U.S. free markets'.

What portion of U.S. health/medical care is dominated by the government?

mediageek | February 13, 2008, 11:13am | #

Joe, I think you will find this link relevant to the discussion.

Episiarch | February 13, 2008, 11:15am | #

Why would Spain need any psychologists? They have Siesta!

Only in southern Spain where unemployment is even higher and wages even less. My anecdote is for Catalonia (Barcelona), which is one of the most productive regions in Spain. Southern Spain must be in fucking horrible shape.

joe | February 13, 2008, 11:18am | #

Happy to oblige, Sam Grove.

http://business.timesonline.co.uk/tol/business/economics/article3137506.ece

mediageek, I can't stream video at work.

Slocum | February 13, 2008, 11:20am | #

In other news, the economic standard of living surpassed that in the United States sometime in 2007, for the first time since the 19th Century.

That's based on currency fluctuations, not PPP (which is what matters for living standards). Not to mention the fact that in France, the UK is another instance of nasty, brutish free-market AngloSaxonisme.

joe | February 13, 2008, 11:20am | #

http://www.photius.com/rankings/economy/gdp_real_growth_rate_2007_0.html

Real GDP growth 2007:

Spain: 3.6%

United States: 3.4%

Reformed Republican | February 13, 2008, 11:20am | #

Sam,

You mean other than medicine patents, the FDA, insurance regulation, and licensing requirements?

von Laue | February 13, 2008, 11:21am | #

You work??!?

Neu Mejican | February 13, 2008, 11:21am | #

If I look here
http://en.wikipedia.org/wiki/Human_Development_Index

I see that France, but not Germany beat the US on this "normalized measure of life expectancy, literacy, education, standard of living, and GDP per capita for countries worldwide."

Both the US and Germany are losing ground on the index, while France is gaining.

FWIW.

Reformed Republican | February 13, 2008, 11:25am | #

Does that study correct for things like the influx of immigrants?

joe | February 13, 2008, 11:25am | #

Sweden 4.2%

Finland 4.9%

joe | February 13, 2008, 11:26am | #

RR,

It's "real GDP growth," which generally refers to growth corrected for population and inflation.

somebeach somewhere | February 13, 2008, 11:26am | #

Your original comment was clearly in the trolling/potshot mode.

Aha! Joe's new nickname: Potshot Joe!

P Brooks | February 13, 2008, 11:27am | #

Speaking of PPP

Nick | February 13, 2008, 11:29am | #

If joe is not a government bureaucrat I'll eat my keyboard.

TrappedEastOfTheBigMuddy | February 13, 2008, 11:31am | #

@james

"As we all know, only one party benefits in a transaction. Merchants who sell goods and services are siphoning money out of the neighborhood (or nation) like vampires sucking the lifeblood out of their hapless victims."

There are millions of people in our country who don't understand that in economic transactions both parties tend to benefit or there would be no transaction. Would someone please send a memo to the MSM so at least in the US we can start getting the economics right.

But is is so easy to feel that the damn, heartless trader in benefiting more. And besides, I'm having a hard time making end meet...

Easier still when the other guy is a big corporation. Worse, what Joe Q. Normal hears is that BigBoxCo made N billion dollars this year, and no one mentions that that was on M billion transactions, and after paying for K millions of hours of labor by J thousands of people just like you.
The pure size of the numbers involved can shoot perspective all to hell.

Educating folks is surely the right approach to throttling back this dogma, but it is slow going, and doesn't make inspiring rhetoric.

Oh, and we can snark about the glowing success of overt socialist takeovers such as Chavestopia. But that might make more enemies than converts.

Nick | February 13, 2008, 11:31am | #

mediageek, that video makes me change my ideas about the role of government. I believe banning white people from dancing is necessary for the sake of the children.

Gawd awful, that was.

somebeach somewhere | February 13, 2008, 11:32am | #

If joe is not a government bureaucrat I'll eat my keyboard.

Up until a couple of years ago, he was!

dbcooper | February 13, 2008, 11:39am | #

US GDP per Capita @ PPP is about 30% higher than the UK's.

The standard of living in the UK is not particularly good on a subjective basis for most people IMHO.

Neu Mejican | February 13, 2008, 11:42am | #

I am gonna guess that a basic knowledge of economics in the population is fairly tangential to the overall success of a particular country.

In democratic countries at least, the very principles that underpin how the market works will tend to shape regulations over the long term. If policies are too detrimental, they will eventually be replaced with more successful/beneficial policies in an ongoing refinement of the regulatory structures in the economy.

Burdensome regulations with little overall impact, or impact on only a few citizen's will fossilize, for sure, but policies that are broadly detrimental will become unpopular.

This is also true in more oppressive countries...it just takes guns to change the policies, rather than votes.

Cesar | February 13, 2008, 11:43am | #

How can they say with a straight face that the worlds freest markets are in Sub-Sahara Africa? Give me a break!

Nick | February 13, 2008, 11:44am | #

But how do economic policies get better when both parties don't have any idea what they are talking about? The each think their fixes are right and they're not.

joe | February 13, 2008, 11:44am | #

Nick,

Eat your keyboard. I'm a consultant to telecom companies.

Eric S. | February 13, 2008, 11:47am | #

Nick

What's your point? We don't have daycare in Chicago either.

Elemenope | February 13, 2008, 11:47am | #

It's not a potshot if it's relevant and he's right.

And he is. The kool-aid must have been fortified with some hallucinogens if people 'round here are deluded enough to think that Scandinavian and western European economies are on the verge of collapse or their people are suffering because of their socialist ways.

Europe is doing, by and large, fine. Their standard of living hovers around the US' evil-capitalists' standard of living. Socialized medicine, in particular, isn't causing them to drop like flies.

There are lots of good reasons to dislike the statist approach, but fervently pretending it doesn't "work" in the bread-and-butter sort of way isn't one of them. "Socialized" Europe isn't the USSR; it's a mixed economy, and one that seems to do fairly well.

Rimfax | February 13, 2008, 11:52am | #

Actually, despite being a sarcastic dick, joe's actually got a point. See List of countries by GDP.

Why aren't France and Germany (and UK) being left behind by their policies? They've been doing this stuff for decades now. By our arguments we should be seeing a negative trend for them by now. As much as the US has been doing some of the same stuff, the difference between US policy and French policy has been enormous for at least 30 years.

(This is for the pragmatic libertarians to answer. The philosophical libertarians, like me, see these policies as inherently unfree and immoral.)

Josh | February 13, 2008, 11:53am | #

"It's not a potshot if it's relevant and he's right."

His first post in the thread was about the UK, which was mentioned neither in the article nor in the H&R post this thread pertains to.

Sam Grove | February 13, 2008, 11:54am | #

Ah, but Europe does not have to support an empire like we do. Those 700+ bases in 130 countries...and the occupations of Iraq and Afghanistan are very expensive.

We would be so way ahead of Europe were it not for the expense of our empire.

Reformed Republican,

Yes, other than all of that.

I was thinking of medicare mostly, but we can also include federal mandates and state level participation.

The Democratic Republican | February 13, 2008, 11:54am | #

Anybody who would compare GDP growth in the USA to Spain is an idiot. That's like saying that some penny stock is better than Berkshire Hathway because the former shot up 4000% in a day and BH only increased .30%. Nevermind that that 4000% is accounted for by increasing from $.01 to $.40, while BH is at $140,000 per share.

Yes, socialism "works" in some places, but only because it tends to utilize market processes. The Scandinavians are closet supply-siders. So when they gripe about capitalism, they are griping about an ideology -- all the while ignoring that market processes are integral to their standard of living.

Neu Mejican | February 13, 2008, 11:54am | #

Nick,

Think of policies as products.
Voters as buyers.

The same invisible hand that leads to prices leads to policies.

The main question is how do you determine how successful the policy is?

GDP, HDI, popularity, life-span?

Objective metrics of something as slippery and subjective as "standard of living" are not easy to come by (like "value"). So, if you believe in the logic of distributed decision making that underpins markets, and you consider a democratic society a "policy market," then the policies that persist are the correct ones. The ones that go away are the wrong ones.

The same thinking says that Wal-Mart is doing things right because they are successful. Whatever is successful in the market is the right thing to do.

The same thing applies, in the policy market, there is just a longer time lag.

Speaking very loosely, of course.

Reformed Republican | February 13, 2008, 11:55am | #

Sure, maybe it seems to "work". However, the free market also works, and it does not require you to give up your rights.

The Democratic Republican | February 13, 2008, 11:56am | #

Rimfax: The devil is in the details. So, mixed economies tend to "work." You've already answered the question -- they are mixed. If they were purely socialist, they would have failed. Best case study: the reunification of Germany, and the disparities b/t Western and Eastern Germany.

As for these textbooks -- they are preaching philosophy, not economics. If they commit themselves to an economy that emphasizes quality of life over growth, so be it. But if they go too far, they are biting the hand that feeds.

Juan | February 13, 2008, 11:58am | #

I have only two words to say for those quoting growth numbers: Conditional convergence.

The Democratic Republican | February 13, 2008, 11:59am | #

One last thing: I find that list of countries by GDP to be ludicrous. Luxembourg? Iceland? Comparing the USA to those nations is apples and oranges. Compare Texas and France and then you will have a more apt comparison. Compare the USA, EU, Russia, and China -- that's a more fair comparison. Just because you call yourself a "nation" doesn't mean that you deserve to be ranked in the same lists as larger ones.

Sam Grove | February 13, 2008, 12:00pm | #

Reading the article Joe, I learn that a big part of the change is due to our government's inflation of the money and concurrent devaluation of the dollar. I also found this item in the article.

The Oxford analysts also point out that Americans benefit from lower prices than those in Britain. With an adjustment made for this “purchasing power parity”, the average American has more spending power than his UK counterpart and pays lower taxes. (In the run-up to Christmas many Britons travelled to New York and other American cities to take advantage of the strength of sterling against the dollar and those lower prices.)

The Democratic Republican | February 13, 2008, 12:02pm | #

That GDP per capita list DOES list the European Union -- a whopping $29,000~ per capita, against the USA's $45,000. Ya, I'm ready to take lessons from the Europeans....

Neu Mejican | February 13, 2008, 12:04pm | #

The DR,

If they commit themselves to an economy that emphasizes quality of life over growth, so be it. But if they go too far, they are biting the hand that feeds.

That is a much more concise version of my point.

FWIW, the best solutions seems to be a mixed economy with a fair amount of freedom. Both ends of the planned-economy to Free-Market spectrum under perform when compared to the mixed models...at least if we use the current world situation as evidence.

Sam Grove | February 13, 2008, 12:06pm | #

Neu Mejican,

The problem is feedback and unseen effects. Government policies focus on the seen, in fact, politicians and activist make a big show of it.
In the long term, negatives that make their appearance years down the road fail to make it into the public feedback equation.

It's like driving with video goggles fed by a delayed feedback loop. The longer the delay, the likelier a disaster.

tarran | February 13, 2008, 12:06pm | #

Sam Grove | February 13, 2008, 12:08pm | #

Both ends of the planned-economy to Free-Market spectrum under perform when compared to the mixed models

An example of the latter?
We reserve the right of verification.

Neu Mejican | February 13, 2008, 12:09pm | #

Sam Grove,

That works the same in other markets.
It is, in fact, an argument made against society in the US, which does not take into account the long-term consequences of purchases (see Global Warming arguments), does not save money, gets into expensive ill-advised wars, etc...

Neu Mejican | February 13, 2008, 12:11pm | #

An example of the latter?
We reserve the right of verification.

Well, recently Somalia counted (not any more really).

But to be fair, there are/never have been countries on either extreme of the spectrum.

Juan | February 13, 2008, 12:12pm | #

Global Warming is not a delayed-feedback problem, it is an externalities problem.

NM | February 13, 2008, 12:12pm | #

that's "are not/never have been"

Neu Mejican | February 13, 2008, 12:12pm | #

Juan,

Externalities are a form of feedback.

TrappedEastOfTheBigMuddy | February 13, 2008, 12:14pm | #

@Rimfax

Actually, despite being a sarcastic dick, joe's actually got a point. See List of countries by GDP.

Why aren't France and Germany (and UK) being left behind by their policies? They've been doing this stuff for decades now. By our arguments we should be seeing a negative trend for them by now. As much as the US has been doing some of the same stuff, the difference between US policy and French policy has been enormous for at least 30 years.

(This is for the pragmatic libertarians to answer. The philosophical libertarians, like me, see these policies as inherently unfree and immoral.)

Sam Grove may well have a point about supporting empire, but I suspect that there is also a high degree of robustness to the benefits of free(ish) economic policy.

Sufficiently modest government distortions pick some winners who might otherwise have been losers, but don't remove the incentives for the really movers and shakers to keep making life better for everyone my trying to make it better for themselves.

It may be that comparing Europe to the US serves as an experiment on the limits of this robustness.

Cesar | February 13, 2008, 12:15pm | #

The UK had a lot of free-market reforms under Thatcher and Blair, and thus are more capitalist than the economies of the European continent. So I'm not surprised they aren't doing too badly.

kinnath | February 13, 2008, 12:16pm | #

Let's see. I've been to Russia after the collapse of the Soviet Union. Mainland China as well. It should be obvious to any rational person that planned economies can't succeed long term.

I've also been to Ireland, England, Netherlands, France, Germany, Hong Kong, Singapore, and Australia.

The Europeans have nice cars, great food, beautiful scenery, and a pervasive sentiment that individual success is a bad thing if it comes at the expense of some other soul.

Unless, of course, that soul resides in the body of an immigrant from a third world country. Then he or she can be shoved off to a slum and left to rot.

I work in an industry where I could easily get a job and work in a foreign country as an ex pat. I've even considered it a few times, but I would never leave the US where we at least have a lingering ideal that individual rights trump collective rights.

Sam Grove | February 13, 2008, 12:24pm | #

That works the same in other markets.
It is, in fact, an argument made against society in the US, which does not take into account the long-term consequences of purchases (see Global Warming arguments), does not save money, gets into expensive ill-advised wars, etc...

You give fine examples where government plays a big role:

greenhouse gases - subsidies to build highways
judicial permission of pollution
(this without conceding that warming is, in fact, a market problem)

Savings - monetary policy

ill-advised wars - you're citing THIS as a market problem?

Well, recently Somalia counted (not any more really).

Would it be fair to suggest that an addict is better off with hizzer drug than without because of withdrawal symptoms?

But to be fair, there are/never have been countries on either extreme of the spectrum.

USSR, communist China?

P Brooks | February 13, 2008, 12:24pm | #

Neu Mejican-

I see your point about the "marketplace of policies" but I have my doubts as to the efficiency of that "market."

My superficial understanding of the recent boom in India is that growth has been driven largely by newly invented sectors of the economy. The socialist planners were unable to successfully strangle the high technology industry for example, only because they were behind the curve, and not because of any admiration for, or understanding of, the benefits of innovation and widely dispersed entrepreneurship.

JJ | February 13, 2008, 12:25pm | #

THERE WILL BE BLOOD!!!

Elemenope | February 13, 2008, 12:27pm | #

Yes, except their economies aren't burdened by a massive military/industrial complex.

If you removed U.S. military spending and allowed people to direct those resources into satisfying consumer needs, I bet you we'd all be much better off.

There was a president once who said something similar...though his point was more along the lines of noting that when you worship business (as we do), then those who are in the business of war shall strive to maximize profits, at the expense of everything else. Markets are an efficiency-maximizing machine; when your goal is selling bombs, then unsurprisingly market-logic bends resources towards providing bombs and securing a consumer market for them.

Europe got off light (comparatively...they paid for their largesse now with the devastation of WWII), and due to the accidents of history does not currently have to field a sizable military. However, I suspect even if they did, the difference would not be so large, as they don't have an absolute economic imperative to build machines of war the way we do.

I'm pretty sure it was Ron Paul who pointed out on the House floor that if we had spent the money on the Iraq War on education instead, we could have sent every high school grad to college for free. Doubly ironic, because he himself would never do such a thing.

BCN Guy | February 13, 2008, 12:28pm | #

I'm from Spain, and I really doubt that a standard textbook can be so rough on any topic. Textbooks here tend to be polite with everything (yes, sometimes can be boring, but it ain't that bad to be free to choose your own beliefs).

In fact, I agree with some of those statements.

About the european socialism, the main difference is that we pay more taxes, we get more protection from the government.

I really like to know that I have a free (tax financed) full health care insurance, I don't have to pay a dime, even if I need thousands of MRI's.

I also enjoy knowing that if I get fired from a job I can rely on a government pay of 60% of my salary during 1/3 of the time my last job lasted while they help me getting another job according to my curriculum vitae.

I'm glad knowing that if I get ill or injured and I won't be able to work again I'll get a monthly check forever so I can keep a mid-level lifestyle.

I'm happy to know that whenever I have children they will go to a good quality college for free.

And I could go on forever...

Socialism makes harder to be a millionaire, but it makes regular people's life easier, and as I know, 99% of the people aren't millionaires, so I'm OK with socialism :)

joe | February 13, 2008, 12:30pm | #

OK, I understand now.

We cannot compare GDP growth to other countries, if they are poorer and/or smaller than us.

'Kay.

Nick | February 13, 2008, 12:30pm | #

I determine how successful the policy is if the desired result can be done efficiently and effectively. Politicians rarely produce such a result. In Europe they have higher taxes. We have lower taxes but provide less services to our people. I don't think either is being as efficient as they could be. We spend a lot on the defense of other nations so they can spend a lot on the welfare of their people while we don't tend to take care of ourselves or each other. We are individualist until it comes to national pride and then WE need to bomb the fuckers!

I think a lot more people would be satisfied with Vietnam and Iraq if we had just kicked ass and won quickly and decisively, even though neither should have been fought by us. Most of our other wars are seen positively, regardless of the need for them.

Sam Grove | February 13, 2008, 12:35pm | #

I'm pretty sure it was Ron Paul who pointed out on the House floor that if we had spent the money on the Iraq War on education instead, we could have sent every high school grad to college for free. Doubly ironic, because he himself would never do such a thing.

Because he supposes that leaving the money in the hands of parents will allow them to send their kids to school.

++++++++++++++++++++++++

I've recently come to think that socialists, well, most people, have a mercantilist view of economics. That would explain why they have difficulty comprehending the market view. They also still hold to the labor theory of value.

Nick | February 13, 2008, 12:43pm | #

"I'm pretty sure it was Ron Paul who pointed out on the House floor that if we had spent the money on the Iraq War on education instead, we could have sent every high school grad to college for free. Doubly ironic, because he himself would never do such a thing.

Because he supposes that leaving the money in the hands of parents will allow them to send their kids to school."

Or he feels if the money is gonna be spent somewhere better on education than death.

kinnath | February 13, 2008, 12:43pm | #

Socialism makes harder to be a millionaire, but it makes regular people's life easier, and as I know, 99% of the people aren't millionaires, so I'm OK with socialism :)

So how did you post this message to the Internet? Wintel Platform or Apple?

The internet exists in it current form because the US government decided that it needed a robust network to transmit launch codes to its nuclear weapons.

Desktop computers (whether IBM or Apple derivatives) exist because they made people millionares, even billionares, here in the US.

Socialism can provide the basic needs of the population, but it will never, never, never provide the innovation that leads humanity forward.

Cesar | February 13, 2008, 12:45pm | #

Kinnath-

Theres also Linux, which people get for free.

joe | February 13, 2008, 12:50pm | #

Maybe he texted it from his Nokia phone, kinnath.

Socialism can provide the basic needs of the population, but it will never, never, never provide the innovation that leads humanity forward. This is true, which is why the most successful countries - like, all of the countries in Western Europe, the U.S., and Japn - have a fundamentally capitalist economic system on which socialist welfare state is overlaid, as opposed to a command-and-control, levelling economic system.

kinnath | February 13, 2008, 12:52pm | #

Theres also Linux, which people get for free.

Which runs on platforms designed and built by for-profit companies.

Let me know when you see an innovative new piece of hardware that results from open collaboration.

Ryan | February 13, 2008, 12:56pm | #

Sorry to burst the capitalist dogmatic bubble but the best way to build an economy is to use subsidies, tarrifs and state funding to specialize your country in emerging industries and build a backbone for future development. It's what the USA, Britian, France, Germany, Japan, South Korea, Chile, Canada and every other developed country did to build their nacent industry. Chind and India are trying to do the same thing today.

The successfully developing economies are using protection, tarrifs and subsidies; the unsuccessful ones are using the model proposed on this and other "libertarian" sites. Listen, contracts are great, protection for companies that don't need it is dumb and most of the time you should measure the value of businesses by their ability to compete without government help. But the idea that you can build a successful economy by eliminating tarrifs and financial transfer laws is ahistorical dogmatic crap. Read a damned history book, it never ever works to build an economy. Tarrifs and subsidies are always needed to build a successful economy. You don't need the same tarrifs once businesses are established. Chile certainly stopped protecting its produce industry along time ago. But it protected the hell out of it when it was getting started like any rational country would.

kinnath | February 13, 2008, 12:56pm | #

Maybe he texted it from his Nokia phone, kinnath

Last I knew, Nokia was a for-profit company that builds products that were "invented" some place else.

Sam Grove | February 13, 2008, 12:58pm | #

Theres also Linux, which people get for free.

Or, if they don't want to become linux hackers, they can buy a computer configured with a proprietary version.

It's nice of some people to provide a free OS, they are actually subsidizing its development by working someplace for pay, else they would starve while coding.

Warty | February 13, 2008, 1:01pm | #

I also enjoy knowing that if I get fired from a job I can rely on a government pay of 60% of my salary during 1/3 of the time my last job lasted while they help me getting another job according to my curriculum vitae.

What the fuck?

Elemenope | February 13, 2008, 1:03pm | #

They also still hold to the labor theory of value.

As opposed to...? Marginal utility? Marginal utility reduces to a LTV because labor is the means by which resources are made available to the consumer/laborer to procure use-value commodities. Marginal utility becomes marginal labor.

I agree with you, though, that people generally have a mercantilist view of economic volume (that it is static, and distribution of which is zero-sum). I myself was having a really hard time explaining to my (somewhat nativist) girlfriend how immigration is beneficial to everyone, not just immigrants. Kept running up against "they took 'r jobs!" and "they eat up our social services" arguments; it is nearly hopeless to argue immigration policy with someone who believes that every job taken by "someone else" is one less job globally.

Sam Grove | February 13, 2008, 1:07pm | #

It's what the USA...
The industrial revolution in the U.S. was not accompanied by protective tariffs, and 'industrial' policy. Not until various concerns had accumulated enough wealth to interest politicians. The attraction was usually mutual.

The railroads that benefited most from government largess were not the real successes, it was the railroads built without gov't largess that had greatest market success, because they built for the market and not to secure government funding.

Parasites always attach themselves to successful organisms, but nobody claims the organism was successful because of the parasites.

Protections, subsidies, and tariffs are what businesses, in the U.S. at least, apply for when they feel threatened by new competition. Thus these factors are pro stasis rather than pro-growth.

Elemenope | February 13, 2008, 1:08pm | #

The modern tech industry was/is the beneficiary of massive public investment, including absurdly cheap easements for running cables, etc., to R&D, to government contracts, to tax breaks (paid for by *other* tax payers, as all self-respecting tax breaks are).

Oh yeah, and socialized command economies produced the scientists (Nazi Germany) and the production capacity (USSR) to start the space race.

But nothing innovative or new or visionary has ever come from socialism. No, they are robots, devoid of emotion. (Though I have it on good authority that the Russians love their children, too.)

Cesar | February 13, 2008, 1:09pm | #

Those German scientists existed in Imperial Germany and the Weimar Republic, as well.

BCN Guy | February 13, 2008, 1:11pm | #

Kinnath, I was trying to explain how euro-socialism works (mainly based on my 22-year experience in Spain, 14 of them under socialist government). Europe, as north America is mainly capitalist, but the main difference is the social benefits that the governments provide.

I'm using firefox to see this page, but the Nokia example was fine. Of course Nokia looks for benefits, but it's based in a country where high-school teachers work 15 hours a week and get a pretty good salary, and that example can apply to many other working people there, so everyone can work, kids get the best teachers modern education can provide, a lot of public funds go to public research that benefits everybody...

Despite being the most boring countries in the world, they are the most devoloped in many aspects and they keep spinning the same wheel.

Sam Grove | February 13, 2008, 1:16pm | #

They also still hold to the labor theory of value.

Value, like beauty, is in the eye of the beholder/purchaser.
Labor is the cost of producing wealth.
I don't know if potatoes and turnips have equivalent labor inputs, but I definitely value potatoes far more than turnips. (I apparently possess the gene for tasting the chemical that makes turnips taste bitter to me)

Cesar | February 13, 2008, 1:17pm | #

Lets see:

USA Per Capita Income: $46,000
Unemployment: 5%

Spain Per Capita Income: $33,000
Unemployment: 7.6%

From CIA World Factbook.

In fact, the only European country I could find aside from the postage-stamp city states which have a Per Capita GDP comparable to the United States was Norway, a country floating on a shitload of North Sea oil.

Martin | February 13, 2008, 1:18pm | #

Smash capitalism!

Neu Mejican | February 13, 2008, 1:18pm | #

Sam Grove

USSR, communist China?

Attempts to have complete control over the economy do not equal success. Both had/have blackmarket activity as part of their economy.

Just as anarchy is unstable because it is vulnerable to parties willing to use force, planned economies are never completely planned because force has limited effectiveness.

PBROOKS,

It may not be the most efficient of markets, but I think the analogy holds up at a gross level.

The socialist planners in India do not have the "strangling" of an industry as their goal. Most regulatory intrusion into markets is motivated by a perceived short-coming/harm in/caused by an element in the economy. Regulations are always "behind the curve" in that sense. They react to consequences, for the most part.

Can you think of examples of industries that have been created by government policies that have an overall benefit to society?

Sam Grove | February 13, 2008, 1:19pm | #

Cost and value are different.

R C Dean | February 13, 2008, 1:19pm | #

Sarbanes-Oxley has done wonders to cripple the American financial markets and drive some very lucrative business overseas, primarily to London.

Although its probably pretty small in the American scheme of things, to the (smaller)British GDP it may actually have a perceptible impact.

The vast majority of the closing gap is due to the long-term decline of the dollar, which has lost, what, 30 - 50% of its purchasing power against the Euro in the last 5 years. That's not to dismiss it, but the shifts are almost entirely accounted for by exchange rates, and thus have more to do with monetary policy than with fundamental economic performance.

Jammer | February 13, 2008, 1:19pm | #

joe
We cannot compare GDP growth to other countries, if they are poorer and/or smaller than us.

Well, no, you can't. Not without caveats and context. To just chuck a number out and say "ta-dah" is dishonest. The USSR had some pretty good growth years post WW2, for example, and I think China did as well. I think we can agree that ultimately their systems did not work out for their people. These are of course extreme examples, but I think you see what I mean.

Anyway, I didn't RTFA, but (based on the quoted bits) it seems to me this thread is wandering away from its basic point: Some Europeans are not just being taught that the market must be tamed and restrained, they are being taught the market is actively bad. This strikes me as foolish and dangerous.

james | February 13, 2008, 1:20pm | #

"The Oxford analysts also point out that Americans benefit from lower prices than those in Britain. With an adjustment made for this “purchasing power parity”, the average American has more spending power than his UK counterpart and pays lower taxes."

Joe it would appear that the title of the article "UK Living Standards Outstrip US" is misleading. The above paragraph in that article shows that. How can the UK standard of living outstrip ours if the above is true.

Also the article mentions:

"However, the British typically have significantly longer holidays than Americans as well as access to “free” healthcare."

Healthcare in the UK is not free. Their free healthcare is paid by higher taxes and government subsidies ie not free.

Cesar | February 13, 2008, 1:21pm | #

As for Eurosocialism working better for the "Average person", I bet a Mexican immigrant does a lot better here than an Algerian in a French banlieue.

Sam Grove | February 13, 2008, 1:25pm | #

Attempts to have complete control over the economy do not equal success. Both had/have blackmarket activity as part of their economy.

You are explaining why attempts to reach this end fail. The market is not governable.

In fact, I use this to determine if a country has a free market. If it has a black market, it does not have a free market.

Neu Mejican | February 13, 2008, 1:25pm | #

Parasites always attach themselves to successful organisms, but nobody claims the organism was successful because of the parasites.

Symbiotic relationships are commonly quite successful in the world of biology.

There is no reason to assume all government/industry relationships are parasitic (and who is the host, who the parasite?)...

Neu Mejican | February 13, 2008, 1:26pm | #

Re: black markets.

Are you claiming that black markets are free markets?

Honest question.

Neu Mejican | February 13, 2008, 1:27pm | #

Sam Grove

You are explaining why attempts to reach this end fail.

Actually, I was trying to explain why neither end of the spectrum is stable in the real world.

BCN Guy | February 13, 2008, 1:31pm | #

Cesar, you should also take a look at the cost of living, but anyway the government takes care that 7.6% people in Spain, they can take those helping founds I talked about before, so their lives don'tchange much while their look for another job, meanwhile, those 5% American people are pretty fucked up

Cesar | February 13, 2008, 1:31pm | #

I'm I the only one who thinks the fact that they claim sub-sahara African countries are the "freest in the world?" Thats the biggest line of bull I've ever read.

Cesar | February 13, 2008, 1:33pm | #

USA:
Population below poverty line: 12% (2004 est.)

France:
Population below poverty line: 6.2% (2004)

Austria:
Population below poverty line: 5.9% (2004)

Lithuania:
Population below poverty line: 4% (2003)

Cesar | February 13, 2008, 1:34pm | #

That wasn't me who posted that, but every country has a different way of measuring poverty so comparing countries means nothing. Zip.

But yeah, poor people in Europe are really well taken care of. Ask the Algerians in Clichy-sous-Bois. /sarcasm

joe | February 13, 2008, 1:34pm | #

The industrial revolution in the U.S. was not accompanied by protective tariffs, and 'industrial' policy.

Nonsense. By the 1850s, tarrifs on manufactured goods were high enough to be a major issue of contention between the industrial north and the agricultural south.

Neu Mejican | February 13, 2008, 1:35pm | #

Same Grove,

The market is not governable.

I will agree with you if you include the qualifier "completely."

I would argue that regulatory elements that arise naturally out of market activity will tend to improve its performance... and that is why most successful economies in the world are mixed...

joe | February 13, 2008, 1:36pm | #

james,

As evidence that European socialism was surpassing the United States, the information about England, Sweden, Spain and Finland would indeed be misleading.

But as a rebuttal to the assertion that European "socialism" is strangling the continent's economy, it is perfectly valid.

P Brooks | February 13, 2008, 1:38pm | #

Neu Mejican-

The planners may not have strangulation as their goal, but it is undeniably an effect. My point is that much growth has been the result of an end run around the planned sectors of the economy.

Estonian and Irish tax policies are positive examples of the dispersion of policy initiatives, but they are rare.
The E U recognizes the competitive benefits of low and rational taxes, but has been trying to get low-tax countries to raise their taxes more in line with the greater Euro region, rather than pushing the French and Germans to lower theirs.

Sam Grove | February 13, 2008, 1:39pm | #

Some Europeans are not just being taught that the market must be tamed and restrained, they are being taught the market is actively bad. This strikes me as foolish and dangerous.

A big problem with socialism is that any problems that arise are blamed on something else (capitalism) by politicians and activists and they always call for more of the same. Hence a mixed economy is not static in its proportions, but tends to become more socialist, until conditions dictate scaling back the socialist portion.

Can we just move Venus into a terrestrial orbit and set up an experimental free market?

Cesar | February 13, 2008, 1:40pm | #

Theres one non-oil, non-postage stamp European country that has a GDP Per Capita and unemployment rate comparable to the United States.

Its Ireland. Its also probably the freest economy in Europe, with a very low tax burden.

alisa | February 13, 2008, 1:42pm | #

On the textbook thing: the excerpts are pretty darn scary. I'm sure a lot of people go through their whole lives in ignorance.

I was a lefty by instinct and temperament until I read my first economics book. I got hopping mad at the shameless (to my eyes) pro-business bias, and tried to refute all the arguments until I finally had to concede the free market wasn't so bad.

To my mind, it's not "education" if you don't force the student to challenge his own assumptions; and whoever's getting these textbooks is not being challenged.

Neu Mejican | February 13, 2008, 1:42pm | #

The planners may not have strangulation as their goal, but it is undeniably an effect.

I have a problem believing this as an absolute.

In specific cases it is certainly true, but not in all cases, surely.

Sam Grove | February 13, 2008, 1:44pm | #

The market is not governable.

I will agree with you if you include the qualifier "completely."

Only people are governable to any degree. The market has no center or feature that can be grabbed and threatened with punishment. So the way politicians endeavor to regulate the market is to affect how people participate in it. The people will tolerate a certain amount, and produce black markets in response to this regulation.

Is that an acceptable qualification?

Cesar | February 13, 2008, 1:45pm | #

http://en.wikipedia.org/wiki/Human_Poverty_Index

Neu Mejican | February 13, 2008, 1:46pm | #

Sam Grove,

So you are trying to deconflate "market" from "the people making transactions," correct?

Clearly a market is governable to the degree that you can regulate transactions.

Sam Grove | February 13, 2008, 1:47pm | #

Libertarians are not 'pro-business', in fact, a free market is not pro-business. That's why corporations (in addition to the left) oppose a free market.

james | February 13, 2008, 1:47pm | #

I'm not sure that those who are statist will ever be able to be convinced that governments are the biggest problems that face mankind. The US markets are not free it burns me up when I hear people talk as if the free market and capitalism cause problems people. In a true free market the transaction between A and B doesn't involve any outside agencies forcibly interjecting themselves into the transaction which is what you have when governments tax, subsidize and place tariffs on transactions. Tariffs are bad for those of us who want to purchase products from non-US producers because they add an additional cause that doesn't benefit me but benefits the US company that can't compete with the non-US company on price. What part does Uncle Sam play in a transaction between A and B where he should be able to get a piece of the action just by existing. If individuals attempted this they would be called thieves and rightfully so. So statist why isn't government a thief when it does the same exact thing?

alisa | February 13, 2008, 1:48pm | #

Cesar:
just out of curiosity, how is the "poverty line" defined? Is it proportional (like the bottom x% of income within a country) or is it in absolute terms? If it's the former, then America might have more "poor" people than Austria because there are more American millionaires. It seems to me that the important measure of poverty would be the proportion of the population that can't afford living necessities.

kinnath | February 13, 2008, 1:50pm | #

Kinnath, I was trying to explain how euro-socialism works (mainly based on my 22-year experience in Spain, 14 of them under socialist government). Europe, as north America is mainly capitalist, but the main difference is the social benefits that the governments provide.

I'm using firefox to see this page, but the Nokia example was fine. Of course Nokia looks for benefits,

Firefox and Nokia are fine products indeed. I use the full Mozilla suite at home and wish I was still using a Nokia. However, these are examples of what we call "value engineering" in my line of work. Netscape didn't invent the broswer (that was an academic exercise) and Nokia did not invent the cell phone (and they didn't bring us the iPod or the iPhone).

Your earlier statement can be paraphrased as socialism makes it hard to become a millionaire and that's OK, because it is more important for everyone to have something than for few to have an abundance.

This model is not sustainable in the long run because it stiffles innovation. It can only be sustained so long at there is a third-party that keeps the pipeline full of new stuff that can be value engineered.

Cesar | February 13, 2008, 1:51pm | #

Alisa-

I didn't make that post. Some Socialist chickenshit who has the illusion that poverty doesn't exist in Europe is.

And you're probably right about you're point.

Graphite | February 13, 2008, 1:54pm | #

Using joe's logic on this subject, since China had 10%+ GDP growth last year, the best socioeconomic system is clearly technocratic-fascist corporatism.

Sam Grove | February 13, 2008, 1:57pm | #

So you are trying to deconflate "market" from "the people making transactions," correct?

Well, I'm trying to indicate that it's difficult to precisely define what 'the market' is. It's a term of convenience for describing what goes on in the world, but people tend to thing of it as some thing separate from themselves that they can manage with government guns without direct impact upon themselves.

So in the sense I'm trying to get at, the 'market' is not directly governable. It's a problem with labels, people use labels without comprehension of what is labeled.

Perhaps if we discard the label people can get a better idea of what actually happens.

The same thing occurs with 'corporations'. There is no such THING as a corporation. But the label grants it some kind of detached existence as a big, evil thing that seeks to rule the world for profit, etc.

In fact, a corporation is an organization of people in productive endeavor; at least, in a free market, that's what a corporation should be.

IOW, what really exists are people and their behaviors.

alisa | February 13, 2008, 1:59pm | #

Thanks for the wiki.

Also, yes, I know there's a distinction between pro-market and pro-business. (E.g. most of the regulations of the Progressive Era were instigated by businesses looking for protection). I just meant that they look like similar points of view to someone who doesn't know much and is against both.

joe | February 13, 2008, 2:12pm | #

The US markets are not free it burns me up when I hear people talk as if the free market and capitalism cause problems people. In a true free market

Capitalism hasn't failed; it's just that there has never been True Capitalism.

You know, that sounds familiar from somewhere.

Cesar | February 13, 2008, 2:13pm | #

Joe-

Hong Kong pre-Chinese takeover was about as close as its gotten.

BCN Guy | February 13, 2008, 2:14pm | #

So Kinnath, you think that financial benefits are he only reason that can make people want to take a step ahead and develop whathever kind of devices?

Uh, I think the USSR proved that point wrong during the space race.

Every doctor chose that career just because they want to make big bucks? Don't think so, because Cuba is one of the leaders in doctors per habitant and that's in a really communist country...

joe | February 13, 2008, 2:15pm | #

joe | February 13, 2008, 1:36pm | #

james,

As evidence that European socialism was surpassing the United States, the information about England, Sweden, Spain and Finland would indeed be misleading.

But as a rebuttal to the assertion that European "socialism" is strangling the continent's economy, it is perfectly valid.

Graphite | February 13, 2008, 1:54pm | #

Using joe's logic on this subject, since China had 10%+ GDP growth last year, the best socioeconomic system is clearly technocratic-fascist corporatism.

Come on, Graphite, it was obvious that that wasn't my logic before I even wrote the comment that demonstrates how inaccurate that characteriztion is.

Smarter sniping, please.

Cesar | February 13, 2008, 2:17pm | #

So Kinnath, you think that financial benefits are he only reason that can make people want to take a step ahead and develop whathever kind of devices?

Yes, people do things for other reasons than financial gain. Such as public recognition and prestige. However, they are still acting in their own self-interest in the end. Self-interest isn't necessarily profit, though it can be.

In Cub the self-interest is probably staying alive and/or out of prison.

Sam Grove | February 13, 2008, 2:21pm | #

Capitalism hasn't failed; it's just that there has never been True Capitalism.

Kit | February 13, 2008, 2:22pm | #

Economic growth imposes a hectic form of life, producing overwork, stress, nervous depression, cardiovascular disease and, according to some, even the development of cancer

It probably does. And it probably produces the solutions to those problems. Cost:Benefit analysis, please.

Urkobold™ | February 13, 2008, 2:23pm | #

joe,

Time for a refresher?

Sam Grove | February 13, 2008, 2:24pm | #

Hey, what happened to my part?

Capitalism was a label coined by Marx.

How about we just drop it and espouse our support for maximal human freedom?

We don't really care about 'capitalism', since it means different things to different people.

rana | February 13, 2008, 2:25pm | #

"Every doctor chose that career just because they want to make big bucks? Don't think so, because Cuba is one of the leaders in doctors per habitant and that's in a really communist country..."

By "Cuban standards" I'm a doctor.

Most Cuban doctors do not compare to our idea of a medical doctor in the US or other developed countries.

kinnath | February 13, 2008, 2:25pm | #

So Kinnath, you think that financial benefits are he only reason that can make people want to take a step ahead and develop whathever kind of devices?

Necessity is the mother of invention. People that don't need stuff, don't invent stuff. People that can't get rich from an innovation rarely attempt to introduce the innovation to the market (talking about raw invention, not value engineering).

Uh, I think the USSR proved that point wrong during the space race.

The USSR invented jack shit during its 70 year run. They stole lots of ideas and mostly fucked them up as they tried to build them. If you go to Russia you'll see 20-year-old buildings that are falling apart. Their cars and airplanes aren't safe. Elevators are down right scary.

Every doctor chose that career just because they want to make big bucks? Don't think so, because Cuba is one of the leaders in doctors per habitant and that's in a really communist country...

Can't speak to Cuba, but people used to claim the Soviet Union was far ahead of the West in terms of treating women equally. They used the fact that most doctors were women as an example. In reality, medicine was not a particularly respected profession, so it was a dumping ground for women. Men ran hospitals and did surgeries. Women did the grunt work.

Elemenope | February 13, 2008, 2:25pm | #

Capitalism hasn't failed; it's just that there has never been True Capitalism.

You know, that sounds familiar from somewhere.

"It is not that the Christian ideal has been tried and found wanting. It has been found difficult and left untried." -- G. K. Chesterton

joe | February 13, 2008, 2:28pm | #

Good one, LMNOP, but I was thinking of the Trotskyites and whatnot after the fall of the Soviet Union.

Cesar | February 13, 2008, 2:28pm | #

Kinnath is right, the Soviet Union's record of inventions is pathetic. They might have been good at making tons of cheap steel and such, but they completely missed the boat in the 1970s when it came to the development of computers.

kinnath | February 13, 2008, 2:35pm | #

They might have been good at making tons of cheap steel and such, but they completely missed the boat in the 1970s when it came to the development of computers.

We had some of our sub-contract engineers from Moscow visiting out midwest facility in the dead of winter. We took them shopping and they were completely dumbfounded that our automobiles started instantly when you turned the key instead of taking 5 minutes of fucking around with the car to get it going.

Russia is the richest country in the world in respects to abundance of raw materials. Yet the communists drove them into third-world status. They've made some progress in the last ten years, but they seem to be heading backwards now.

Sam Grove | February 13, 2008, 2:42pm | #

Anecdote I read in readers digest:

An escapee/immigrant from the USSR recounts how they were shown the Grapes of Wrath to illustrate how the people in the U.S. were ravaged by 'capitalism'.

The viewers were astounded that these poor folk actually had a truck! with which they could escape the dust bowl.

Cesar | February 13, 2008, 2:49pm | #

kinnath | February 13, 2008, 2:50pm | #

In a similar vein, when Khruschev visited the states in the '50s, he went to a factory in Detroit and then proclaimed the factory was fake. It had a large parking lot and Khruschev thought no factory would have that many workers who owned their own cars.

Another story, one of our engineers visiting from Moscow took a photo of all the cars in the parking lot, because no one back home would believe it.

joe | February 13, 2008, 2:55pm | #

Russia is the richest country in the world in respects to abundance of raw materials. Yet the communists drove them into third-world status.

Um, you might want to take a look at Russia's history under the czars. Also rich in raw materials, also far behind the western powers.

joe | February 13, 2008, 2:57pm | #

My roomie in college - this was the early 90s - told me following story:

His sister worked in a company whose mainframe's operating system was based on some long-archaic language. Cobol or something. They had a devil of a time finding someone to hire to maintain it, because nobody had recent experience working on such a system.

Until a Russian immigrant applied, a woman who had worked on the cutting edge of the Soviet computer industry. They'd been doing all of their work in that language.

Cesar | February 13, 2008, 3:13pm | #

Until a Russian immigrant applied, a woman who had worked on the cutting edge of the Soviet computer industry. They'd been doing all of their work in that language.

Which is why the personal computer/consumer electronics boom began in the Soviet Union, not the United States and Japan, right?

dbcooper | February 13, 2008, 3:15pm | #

Oh yeah, and socialized command economies produced the scientists (Nazi Germany) and the production capacity (USSR) to start the space race.

Erm, are you actually arguing that Nazi regime was a positive for the development of German scientists!?

e | February 13, 2008, 3:33pm | #

Yessiree, the market has decided - the socialist Euroweenies have failed, defeated by American ingenuity again! I am happy to take any Euros off your hands since it is totally worthles by now.

http://finance.yahoo.com/currency/convert?from=USD&to=EUR&amt=1&t=5y

e | February 13, 2008, 3:34pm | #

link here:

http://finance.yahoo.com/currency/convert?from=USD&to=EUR&amt=1&t=5y

On second thought, looks like the dollar's fallen steadily over the past 4 years...hmm..what does the market know that libertarians don't?

Cesar | February 13, 2008, 3:39pm | #

E-

The market knows we are printing tons of dollars to fund a worthless empire. So do libertarians.

Neu Mejican | February 13, 2008, 3:41pm | #

So in the sense I'm trying to get at, the 'market' is not directly governable. It's a problem with labels, people use labels without comprehension of what is labeled....The same thing occurs with 'corporations'. There is no such THING as a corporation. But the label grants it some kind of detached existence as a big, evil thing that seeks to rule the world for profit, etc.

Umm...that's an odd view.

Labels help us to organize our thinking about the real world, which includes abstract concepts. Labels like "market" and "corporation" actually do a very precise job of delimiting actual concepts (THINGS) so that we can examine them and contrast them with other concepts (THINGS).

You want to say that the concept MARKET has no referent? Really? That the concept CORPORATION has no referent? Really? Then how can you contrast Free Market with Socialism?

There are various idiosyncratic uses of all terms, but the core shared concept that allows for a label to be use assures that there is some central THING being discussed. The label is flexible, depends on the context of use, and the common knowledge base of the communicators to be effective, but to claim this means the thing being labeled doesn't exists is just silly. Qualifiers are part of language and allow labels to become very precise, when needed.

IOW, what really exists are people and their behaviors.

When these behaviors include transactions, which collectively are referred to as the market. Qualifiers help us to compare and contrast different aspects of the market.

Neu Mejican | February 13, 2008, 3:43pm | #

Sorry for the above anacoluthon.

Neu Mejican | February 13, 2008, 3:46pm | #

Erm, are you actually arguing that Nazi regime was a positive for the development of German scientists!?

Look at the latest Nature:
http://www.nature.com/news/2008/080213/full/451755a.html

A quote:
"In fact, some very good science was funded by the Nazis — leaving Germany in good shape."

joe | February 13, 2008, 3:50pm | #

Cesar,

Um, what? You seem to be a bit confused, so here's a refresher:

"joe | February 13, 2008, 12:50pm | #

Socialism can provide the basic needs of the population, but it will never, never, never provide the innovation that leads humanity forward. This is true, which is why the most successful countries - like, all of the countries in Western Europe, the U.S., and Japn - have a fundamentally capitalist economic system on which socialist welfare state is overlaid, as opposed to a command-and-control, levelling economic system."

joe | February 13, 2008, 3:53pm | #

Oh yeah, and socialized command economies produced the scientists (Nazi Germany) and the production capacity (USSR) to start the space race.

And what did it do with them?

The difference isn't that our system creates more educated people, or better-educated people. The technical education at the Soviets' Polytechnical Institutes was top-notch. The difference is in how those people's talents are directed.

alisa | February 13, 2008, 3:54pm | #

E -- some European economic policies are actually quite liberal. A main advantage of the euro is that it allows easy trade and competition between countries, and now even common payments .
It's hard to make an overarching statement like "European economies are more socialist than the US's," when even Sweden has deregulated somewhat in recent years.

Jack | February 13, 2008, 4:28pm | #

Well, it's true.

Oh, wait. It can't be true, because the US is so wounderful, so prosperous for everybody and have such good health were a country like Sweden is awful. All you find in Sweden is free Healthcare, free dental care till you are 25 (and after that dental care will cost at most 700 dollars a year). In Sweden you get the worlds finest education for everybody, and it's totally fucking free.

I tell you, this wealth isn't built in the latest years, but enforced by laws created under a somewhat socialistic government about ten to twenty years ago. Now Sweden is getting more and more from the US, and for the people, everything is getting worse.

You're right. America is the best. Fuck the kind of socialsm that have created the nation with the highest standard of living ever.

Damn stupid fucks.

Thomas Paine's Goiter | February 13, 2008, 4:30pm | #

joe's trolls every day. Please filter him.

FYP.

Sam Grove | February 13, 2008, 4:35pm | #

but the core shared concept that allows for a label to be use assures that there is some central THING being discussed

As long as the meaning represented by the label is shared by those discussing it.

When a libertarian talks about corporations, it is much different from when a leftist discusses corporations. That's why that often talk past each other.

Yes, I know labels have a referent, but factions in disagreement often have constructed different referents for labels.

I don't think I need to illustrate.

Nick | February 13, 2008, 4:36pm | #

Sweden has benefitted from some of it's policies, for sure, like staying out of WWII and many other conflicts much like Switzerland. I'd say war is expensive and bad for most people. We should stop doing that. Whaddya say?

Nick | February 13, 2008, 4:37pm | #

Or we could just bomb the shit out of Sweden and we're #1 again! Woohoo!

kinnath | February 13, 2008, 4:38pm | #

Russia is the richest country in the world in respects to abundance of raw materials. Yet the communists drove them into third-world status.

Um, you might want to take a look at Russia's history under the czars. Also rich in raw materials, also far behind the western powers.

The Russians replaced a ruthless monarchy with communism and things stayed bad and probably got much worse.

Western Europe replaced or augmented their monarchies with parlamentary systems, and things got much better.

How does this contradict my statement that the communists drove Russia into third world status?

Sam Grove | February 13, 2008, 4:39pm | #

All you find in Sweden is free Healthcare, free dental care till you are 25 (and after that dental care will cost at most 700 dollars a year). In Sweden you get the worlds finest education for everybody, and it's totally fucking free.

Santa brings it all from the north pole every Christmas, enough to last all year long.

It's not free, it's paid for by the labors of the people.

Back atcha.

Sam Grove | February 13, 2008, 4:40pm | #
Um, you might want to take a look at Russia's history under the czars. Also rich in raw materials, also far behind the western powers.

Before the revolution, Russia wan exporter of wheat. After the revolution, the USSR became an importer of wheat.

Sam Grove | February 13, 2008, 4:40pm | #
close italics

Cesar | February 13, 2008, 4:42pm | #

Does anyone, even on the left, believe western Europe is a paradise unless they are still in high school?

Sam Grove | February 13, 2008, 4:44pm | #

Let's try the idea of 'minimum wage', a fairly common label and everyone knows what it means.

My neighbor at the time expressed support for a 'minimum wage'. I then asked him, if I agreed to work for him for $3 per hour, who else's business was it?

He got the point then.

A Finnish reasonoid | February 13, 2008, 5:03pm | #

Ah, you can't imagine what it is like to debate politics around here, with people who studied similar treatises, even if not quite as extreme as this. Even the most basic laws and examples from economics get shot down, 'cause, after all, economics is.. an ideology.

Still, those examples are fairly extreme, and on the whole, life ain't so bad. Economy is more heavily regulated and taxed than in the US, but I don't think it is as fundamentally different as some might think. Sure, after heavier taxation, we lose out, and it adds up over the years. But, say, opening a small business on either side of pond, you will still have to put up with ridiculous regulations on multiple levels of government.

I guess my point is that people here, and, yes, that includes France, accept the market as the vehicle for the delivery of goods, even if they misunderstand some of the finer details of it. There is a strange (to me anyway) national pride at stake from both parties, so if you want to get a Frenchman to admit he's for freedom, don't talk about GDPs and capitalisms, just tell him you'd like to open a small artisanal chocolate store, and how much he thinks you should have to pay the government for the privilege.

joe | February 13, 2008, 5:14pm | #

kinnath,

How does this contradict my statement that the communists drove Russia into third world status? Because it ignores the fact that Russia was already far behind the western powers economically, even when they all had monarchies. No, you are factually incorrect. Communism did not "drive Russia into third-world status." It was far behind before there were any communists.

joe | February 13, 2008, 5:16pm | #

Cesar | February 13, 2008, 4:42pm | #

Does anyone, even on the left, believe western Europe is a paradise unless they are still in high school?

No. On the other hand, it is very common to find allegedly educated people, well into their middle age, who believe that it is wracked with grinding poverty, experiencing broad economic decline, and mere months from being made party of the Caliphate.

dbcooper | February 13, 2008, 5:23pm | #

Neu Mejican, did you read this part:

We also saw that the expulsion of Jews and democrats from the universities — nearly a quarter of all professors — stymied the development of modern biology. After the war, molecular and cell biology took off in other countries, but Germany was left behind.

jomama | February 13, 2008, 5:24pm | #

Not to worry.

Soon the state will wither away along with
all the anti-free market rhetoric.

Marx will also wither away.

Back to the future.

Tommy | February 13, 2008, 5:29pm | #

"That GDP per capita list DOES list the European Union -- a whopping $29,000~ per capita, against the USA's $45,000. Ya, I'm ready to take lessons from the Europeans...."

That's ignores the fact that since 2004 twelve countries have joined the EU, most of them former communist countries.

alan | February 13, 2008, 5:30pm | #

E -- first libertarians are wrong for being gold bugs, and then libertarians are wrong because the dollar is depreciating against the euro? You are not paying any attention.

Also, what is the point of arguing from the vantage of economic nationalism (my country produces more jigamarigs than yours) when libertarianism is anti nativist at least in ecomic matters. Some people act as if comparing the GDPs of Europe with the United States will somehow show whether socialism or capitalism is the better system, that is silly.

Economics is not edict but the laws of nature as applied to scarcity and sentient beings reacting to material conditions. Whether American, European, Asian or African, these do
not change because someone writes a different set of rules at variance with them.

BTW, even though Robert Samuelson, the most read economic textbook writer in the US, is a Keynesian, I am partial to him as a writer because he writes with a great deal of sobriety. For one, he doesn't deny that socialist policies are largesse at the expense of latter generations.

Cesar | February 13, 2008, 5:36pm | #

No. On the other hand, it is very common to find allegedly educated people, well into their middle age, who believe that it is wracked with grinding poverty, experiencing broad economic decline, and mere months from being made party of the Caliphate.

Joe, that I definitely don't believe.

But there are a lot of people in Europe who believe the United States is a horrible, racist, militaristic country full of crime, poverty, and inequality where the poor and unemployed are thrown into the streets to be run over by obese people driving a Hummer whilst scarfing down McDonalds.

Both models have their advantages and disadvantages.

Even with the trade-offs I'd still rather have higher economic growth, lower unemployment, a higher level of overall wealth, and lower taxes over any of the benefits the Social Democratic model offers.

Cesar | February 13, 2008, 5:37pm | #

Tommy-

Even if you left out the 12 countries, I bet it'd still be lower given the only EU country that comes close individually of any decent size is Ireland.

Rimfax | February 13, 2008, 6:03pm | #

This thread is probably dying, but here goes....

So, yes, the GDP per capita does not reflect purchasing power accurately.

The most U.S.-flattering perspective is List of countries by personal income. While Germany is second, it is a distant second on disposable income.
Also, see:
* GNI/capita
* GDP(PPP)/captia
* GDP growth
* GDP(PPP)/capita by various measures

My question is not "who's winning". By all real measures, the US economy continues to dominate the world. My question is, if our ideas are so damn pragmatic, why isn't the US economy leaps and bounds ahead of France by now?

Some assertive explanations were provided here. Specifically, it was argued that even the anti-capitalists of France play the capitalist game just enough to continue to skate of the coattails of the world economy. They are presumably doing just good enough of a job of mechanism design that they don't get entirely left behind, even though they continue to lag, even occasionally having bursts of growth. This jives somewhat with what is happening in Venezuela where Chavez is not even trying and is quickly destroying his economy by all real measures.

A passive explanation is that the US is soiling it's own bed just enough to keep from benefiting from its "superior" policies. That's not hard to envision considering the past 7 years.

Some have argued that US government defense spending is so far beyond even what the entire rest of the world spends that it hides our superior position. That doesn't seem to hold water considering that it is comparable to any number of foreign government work/welfare programs. The charts above compare economic output and income. How the money gets blown by the government doesn't matter, just how much of it.

I am curious about the absence of a success-feedback-loop. If freer market policies yield better economic success, why aren't they self-encouraging? One answer is that they don't yield better success. Another is more along the lines of Cowen's irrational voter theories. A third would be that economic success comes with costs that overwhelm it.

I've already used too many words.

Tommy | February 13, 2008, 6:09pm | #

I don't doubt that it would be lower. Although I don't think the EU per capita figure is significant.

The UK, France and Germany have a GDP per cap of around 40,000 while most of the new member states are in the range of 10,000-15,000.

The figure of 29,000 per capita, however, doesn't really convey anything meaningful given the differences in economic development across the EU.

joe | February 13, 2008, 6:28pm | #

Ireland's social safety net is much stronger than that in the United States. As is their GDP growth.

Cesar, at least you recognize it is a matter of taste to prefer one over the other.

Kull | February 13, 2008, 6:32pm | #

Welcome to the real world, u.s. peones...if you make my shoes real shinee I'll let you have a whole Euro as a tip...

...whose economy is strongest today?

Exactly...

Tommy | February 13, 2008, 6:33pm | #

The French prefer hammocks to safety nets.

Sam Grove | February 13, 2008, 7:21pm | #

That doesn't seem to hold water considering that it is comparable to any number of foreign government work/welfare programs. The charts above compare economic output and income.

It might. Perhaps investing in bombs, foreign bases, and foreign aid gives little payback. At least domestic spending keeps the moola at home.

juris imprudent | February 13, 2008, 7:26pm | #

The figure of 29,000 per capita, however, doesn't really convey anything meaningful given the differences in economic development across the EU.

Sort of like the difference between Mississippi and California.

juris imprudent | February 13, 2008, 7:32pm | #

Ireland's social safety net is much stronger than that in the United States. As is their GDP growth.

It wasn't even 20 years ago that Ireland's number one export was [talented, motivated] people. Then they finally voted out the da Valera brand of pastoral socialism.

The economy started growing when regulations were liberalized and taxes reduced.

Tommy | February 13, 2008, 7:46pm | #

"Sort of like the difference between Mississippi and California."

The situation in the EU is far more extreme. The newest member states, Bulgaria and Romania have GDP/cap of approximately $5000 and $7000 respectively, compared to $45,000 in the UK.

California's figure is estimated to be $42,000, while Mississippi's is $24,000.

Neu Mejican | February 13, 2008, 8:16pm | #

Rimfax,

Well spoken.

Sam Grove,

factions in disagreement often have constructed different referents for labels.

True.
And they often make odd assumptions about what others mean by the term...

For instance, someone might assume that another person thinks of the market as

some thing separate from themselves that they can manage with government guns without direct impact upon themselves.

When, in fact, the person they are talking to recognizes the fact that those government guns have a direct impact upon themselves, but also recognize the benefits of a stable framework for transaction that they provide.

It is possible to agree on what a market is, and still disagree on the governability of that market.

Perhaps if we discard the label people can get a better idea of what actually happens.

Just getting someone to agree with your definition for the label doesn't always lead to them agreeing with you.

Let's try the idea of 'minimum wage', a fairly common label and everyone knows what it means.

My neighbor at the time expressed support for a 'minimum wage'. I then asked him, if I agreed to work for him for $3 per hour, who else's business was it?

He got the point then.

For instance, I don't think you were working with different definitions of "minimum wage" in this instance.

alisa | February 13, 2008, 8:58pm | #

Political disagreements are more interesting when both sides are bright enough to be discussing the same thing. I think the ideal is something like my friend who's a big-government progressive and knows it: he's smart as hell, and genuinely decent, and we both pretty much know that I want to stop at liberty and he goes on to fraternity. Debating definitions is kind of a drag.

Juan | February 13, 2008, 10:33pm | #

The situation in the EU is far more extreme. The newest member states, Bulgaria and Romania have GDP/cap of approximately $5000 and $7000 respectively, compared to $45,000 in the UK.

Even if you take the new members out, the figures for Greece and Portugal are in the low 20Ks, if I remember correctly.

Sam Grove | February 14, 2008, 12:16am | #

For instance, I don't think you were working with different definitions of "minimum wage" in this instance.

Before my example 'wage' to him meant something that was other people business. After I personalized it, 'wage' was not other peoples' business.

Sam Grove | February 14, 2008, 12:31am | #

Just getting someone to agree with your definition for the label doesn't always lead to them agreeing with you.

Yes, but we can at least then know what that actual disagreement is about, and are, in fact, in actual disagreement rather than arguing different things.

It is possible to agree on what a market is, and still disagree on the governability of that market.

To be able to effectively govern something, you have to:

1 comprehend it
2 know what result you want
3 know which factors are under your control and which are not
4 be aware of undesired consequences of your intervention
5 be able to recognize if your intervention isn't working as expected
6 in the case of the market, recognize that it is far more powerful than you
7 be willing to acknowledge when you do harm and stop doing it.

I think political management of the market fails on all counts.

Because:
1 politics is a subset of the market
2 actors are incentivized to manage the political management for selfish benefit
3 politicians are mainly concerned with reelection, not with the long term
4 In politics perception is everything
5 benefits are concentrated, costs are socialized
6 etc.

Sam Grove | February 14, 2008, 1:21am | #

A free market employs distributed management.

Sam | February 14, 2008, 7:44am | #

There is a lot of argument going on above where definitions are consumed. Socialism is not against the market, in fact free markets can exist under socialism. The difference in socialism is that the markets may be taxed higher in terms of transaction costs. You don't have to do this, instead you can tax individual transactions. Individual wealth did not create innovation, it's idiots who argue this. There is a specific course at MIT that is based on empirical evidence which essentially says that the majority of innovation comes from end-users trying to solve their problems. Yes companies produced the major IT innovation, but that's because they have access to capital, the same with rich people they have access to capital and innovators that's engineers, entrepreneurs, and so on need the capital. Dogmatic love of capitalism as understood by America, is neither necessary, reasonable or empirically supported in terms of its effects on society. Also the environment is on the verge of collapse because of capitalism. There's nothing wrong with that book, it's only countering the capitalism dogma perpetuated by the rich.

Sam Grove | February 14, 2008, 11:23am | #

I'm gald that's not me.

What is the "capitalism dogma perpetuated by the rich"?

You can have free markets under socialism?

I thought socialists fear/hate free markets and that's why they prefer socialism.

Your explanation here implies that socialism feeds on markets via taxation thus casting socialism as parasitical.

Neu Mejican | February 14, 2008, 5:29pm | #

hus casting socialism as parasitical

Or symbiotic, perhaps.

A free market employs distributed management

Which will tend to towards hierarchical schemes when that move reduces overall complexity for the system. The interplay between lower levels off-loading complexity onto higher levels, while higher levels off-load work on lower levels is how regulatory mechanism are created by the distributed action of the autonomous agents whose actions in aggregate define the market.

politics is a subset of the market

Your brain is a subset of your body...but seems to do a decent job of managing you...

benefits are concentrated, costs are socialized

Sometimes, perhaps.
Often the benefits are socialize while costs are concentrated (think the burden of progressive income tax being concentrated onto the wealthy, or the burden of a sales tax being concentrated on the poor).

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Market Fears, Loathing in Europe

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