Far left of the NDP

brockm wrote:

First of all, the United States did not have laissez-faire capitalism prior to the 1930s.  What both left and right advocates against laissez-faire constantly fail to address is the government's monopoly control of money and credit which benefits the rich elite, impoverishes the weak, etc.    Inflationary monetary policy did not begin under FDR.  

One American who lived during laissez-faire capitalism in the US said the average wage was a dollar a day, and farmers couldn't borrow the money from private banks to upgrade farm equipment. There were similarities to Lenin's NEP in the Soviet Union then. Tens of thousands rode the rails looking for work, and harvest gypsies packed up everything and left their farms for the banks to take possession of. They took all they could carry to California and other agricultural states. Some led miserable lives working for private growers paying them subsistence wages. And others were lucky enough to work on FDR's farm collectives where they were treated like human beings. The same US commentator said laissez-faire capitalism in his country was duller and greyer than Soviet communism. 

brockm wrote:

This myth that is perpetuated by the left that Herbert Hoover was a laissez-faire capitalist, and it was Roosevelt who was not, is actually quite reversed.  Hoover was incredibly suspicious of the capitalist system, passed numerous and debilitating bank regulations which precipitated the banking crisis through the limiting of the money supply, he single-handedly brought in the largest import tarriffs in American history, and so on and so forth.

There was no help for bankrupt farmers between 1929 and 1932. Hooverites actually did claim to be practicing Keynesian economics by raising taxes. What they did was lower taxes for those Americans most able to pay and raised them for everyone else. it worsened things overall during the depression.

We had our own practitioners of laissez-faire right here in Canada. The Liberals did nothing, and then RB Bennett did nothing. And the result was equivalent to nothing. The CCF prodded Mackenzie King's Liberals to nationalise the Bank of Canada, which they did by 1938. And between 1938 and 1974, federal government created about a quarter of the money supply, instituted bank reserve ratios for chartered banks, and Ottawa funded the war effort, infrastructure and social spending for 36 years. Money creation was nearly fully privatized in Canada by 1991, and reserve ratios for chartered banks were dropped in most all western countries on the advice of the Bank for International Settlements based in Basel, Switzerland. It was a form of a bailout even then for our increasingly deregulated private banking monopoly in Canada which were losing money big time by the late 1980's with gambling on international stock markets, Canary Wharf real estate fiascos, oil and gas etc. Linda McQuaig wrote that as much as 50% of Canada's debt payments on national debt were due to compounding interest owed to private sources. Federal borrowing from private banks and other sources was a gift to private enterprise and requiring no money down of their own to make these high interest loans to Canadian taxpayers.

Laissez-faire capitalism ended in 1929 after a 30 year-long run in the sun. Not even capitalists believe in it anymore except when pushing their flunky market ideology to governments they lobby. What we have today is upside-down socialism for rich people. Karl Polanyi wrote that laissez-faire was planned - planning was not.

"One American who lived during laissez-faire capitalism in the US said the average wage was a dollar a day"

In 1910's and 20's, One US Dollar was worth about $25 in today's currency.  And the cost of living was extremely low compared to today.  Statistics like this are highly deceptive and economically illiterate. 

If I made $1/day but a loaf a bread costs $0.05 and my rent is $30/month, I'm not living at subsistence wages. Surely, you must understand this.

"Tens of thousands rode the rails looking for work, and harvest gypsies packed up everything and left their farms for the banks to take possession of. They took all they could carry to California and other agricultural states"

You mean, they were looking to make a living in an unpopulated frontier? You seem to be constructing an argument from the assumption of a pre-existing civilization.  This patently makes no sense. 

"The same US commentator said laissez-faire capitalism in his country was duller and greyer than Soviet communism."

This is a very interesting anecdote.

"There was no help for bankrupt farmers between 1929 and 1932. Hooverites actually did claim to be practicing Keynesian economics by raising taxes. What they did was lower taxes for those Americans most able to pay and raised them for everyone else. it worsened things overall during the depression."

Explain to me how the act of lowing taxes, is principally responsible for worsening the depression.  This is an overly simplistic statement lacking in any economic justification.

"Laissez-faire capitalism ended in 1929 after a 30 year-long run in the sun. Not even capitalists believe in it anymore except when pushing their flunky market ideology to governments they lobby."

 As I've earlier said, is there's no basis to claim that there was true laissez-faire capitalism prior to 1929 given the fact government had a monopoly control of money and there was a highly regulated banking system and significant trade restrictions within this period.  You're using the term laissez-faire quite loosely to say the least.

There's plenty of capitalists who believe in true, laissez-faire capitalism.  They're called anarcho-capitalists and they're more plentiful in academic circles these days than you seem to be aware of.  I suggest you mosey on over the Mises Institude website (www.mises.org) to challenge your own assertion here.

"What we have today is upside-down socialism for rich people. Karl Polanyi wrote that laissez-faire was planned - planning was not."

On this point we can plainly agree. We do have upside-down socialism.  Both socialists and libertarians will have no problem coming to this conclusion -- and they both do.  The difference is, I have no desire to re-invert it.  I'd get rid of the Bank of Canada, severely limit fractional reserve banking, and allow private banks to issue commodity-backed currencies. 

Funding for the welfare state would then have to occur within the auspices of sound money, balanced budgets, and a stable underlying economic system that was not subject to political manipulation.

brockm wrote:

"I prefer Galbraith's explanation as to why laissez-faire was deemed intolerable by American voters. He said the problems were diverse in everything from the deregulated banking structure to unfair distribution of income in America."

Okay.  But you're not making economic arguments here.  You're arguing from, what I can deduce, are two premises which I do not share.  

The first is that the US has a laissez-faire economic system prior the Great Depression.  And the second is that the efficacy of an economic system is contingent on specific material equity.  

Laissez-faire is generally understood by leftwing economists as being a dogmatic belief among conservatives that non-intervention in the economy works best. And laissez-faire dogmatists since turn of the last century promote and lobby for anything but non-intervention. Post 1900 laissez-faire has come to mean implementing laws and a statist regime of regulations and non-regulation that heavily favours industrial capitalists and their usurpers today, financial capitalists and the tiny minority of elitists and wealthy people in general. And that's why I said that capitalists and neoconservatives of today don't really believe in laissez-faire anymore - not since the end of the 19th century or so. But the former laissez-faire of the McKinley-Theodore Roosevelt era  is politically unviable today. Political conservatism has no ideology of its own anymore except with lunatic rightwing fringe parties.

brockm wrote:

The economy was also significantly under-developed compared to today.  You really need to develop this argument further before you can attribute living standards purely to lack of central organization of the economy

I think they were practitioners of laissez-faire and the wealthy people they represented while in government for too many years were the ones guilty of under-development. Conservatives re-grouped in the 1930's and began hatching a new economic model based in liberal economic theory, "neoliberalism" which wasn't implemented in any country until Chile from 1973 to collapse by 1985. They wanted to create an economy based on banking and financial services, privatization of public services etc. They needed a genesis fable in order to push their whacky ideas on whacky politicians, like Margart Thatcher, Ronald Reagan, and Brian Mulroney whose feeble minds were fertile ground for their rightwing ideology in the Northern hemisphere by the 1980s.

brockm wrote:

Elements of our economy which are the least regulated have the lowest prices and highest amount of consumer access, for instance, demonstrating that markets do work.

Look at computers.  How cheap are computers today compared to 5 years, 10 years, 15 years ago.

Now look a highly regulated industry like medicine.  Prices rise over the same period.

But if we look at the origins of computer technology, the beginnings of the internet, satellites, lasers, important metalurgical advances, blockbuster pharmaceutical drugs etc, we can generally trace it back to US government intervention in the form of DARPA, a few hundred scientists and engineers on the US taxpayer payroll since Vanevar Bush or so post-WW II. That;s more Marx and Keynes than it is Smith or Hayek. Bush was catapulted into his new government job as an indirect result of Soviet intervention in things with the launch of Sputnik in 1957 or so. It caused us to change math and physics curriculums in universities here in the west from the theoretical to the more practical. The US met several challenges from Japan and Germany in the area of high tech products by investing heavily in public research and development and released a lot of the technology to oil companies in the 1960's, and high tech companies in the late 70's and 80's. The best selling cancer drug in history, for example, is Taxol - a taxpayer-funded discovery handed off to Merck on the promise that they would not renew the patent and allow competition, which they never did.

quote:

"The oil-rich nation is now experiencing energy shortages that it hasn't seen in decades, consumer price inflation in the country exceeds 20%, and now the government has taken to debasing the currency and trying to print it's way out of the disaster it's currently creating for itself. Hugo Chavez's economic bailout through monetary debasement is like Ben Bernake's times one-thousand."

Venezuela is also closing down stores that are profiteeing from the rush to buy goods that, it is feared, will soar in price. But then the Canadian government has freed up $60 billiion for CHMC to take over mortgage debts from the banks, giving them the liquidity to take on many, many more mortgages at very very low rates of interest. We all promote the threat of inflation, just from different demands for solution to singular problems. But it's a good thing we don't all fall back on the Chinese reasoning, realism.

But would really like to see your Libertarian solution for the contradiction between the need for growth in your economic universe, and the need to halt growth on the little blue and green planet Earth. Galbraith never answered that one.

"Deregulation didn't work in 1929, and it doesn't work today. Some point to the airline industry as a good example for deregulation, but there are valid criticisms. Airline industries still relying on massive taxpayer subsidies to survive."

Let the airlines fail then. I would. 

"Socialists are not arguing against the efficiency of markets to distribute goods and services most efficiently. What socialists are saying is that markets fail. And with scarcity of resources becoming more apparent, now is the time to accept central planning as an official federal policy instead of the faux centrally planned laissez-faire we have now and since the 1980's or so. "

But this exactly what central planning does such a horrible job at doing.  When resources become scarce, like say, food, socialists try to limit the prices and engage in rationing.  This sort of activity has always led to negative consequences.  

Markets do not fail.  When something becomes scarce, it's price goes up, to signal a need for capital investment in the production of that scarce good.  Your confidence that central planners can do a better job than the price mechanism just does not jive with any empirical fact.

By not allowing prices for food to rise in the event of a shortage, you are refusing to acknowledge the natural consequence of the shortage -- that more resources are required to provide food.  Socialists thing they can "manage away" this problem. 

A perfect example of how markets reduce scarcity is China.   Twenty years ago, experts were saying that China would not be able to meet the demands for food as it's population grew.  Same for India.  In fact, as deregulation and the free market was allowed to take over more and more of the production of the food supply, China has seen it's food production jump from an estimated 1600 calories a day per person, to a staggering 3700 calories a day, and has become a net exporter of foodstuffs.  You need to engage in some serious rationalization to deny what these examples show us.

I needn't remind you of the food shortages that have occurred in Soviet Union, Cuba, North Korea, and China before it liberalized it's food production markets.   

How do you honestly feel that the evidence is on your side here?  

"We need a better way."

Certainly we agree here.  We need to end the corporatist system.  

Clearly the market works.  If you want to talk about making sure everyone is provided for, then we should talk about a welfare system and progressive taxation system built on top of a real free market economy.   Not a corporatist one.

I probably would not agree with you on the levels of taxation and the extent of wealth redistribution -- but I'll tell you this: I'd much rather live in a unregulated free market society and pay 60-70% of my income in taxes to fund wealth-redistrubuting welfare programs -- in the form of direct-transfers -- than live in a country where the economy is centrally planned.   

I far more prepared to accept extremely high taxes than I am to accept a command economy and all of the dangers, corruption, shortages and retrograde progress that goes with it.  It certainly astounds me that any rational person today still believes that command economies are superior.

brockm wrote:

"Deregulation didn't work in 1929, and it doesn't work today. Some point to the airline industry as a good example for deregulation, but there are valid criticisms. Airline industries still relying on massive taxpayer subsidies to survive."

Let the airlines fail then. I would. 

Fidel wrote:

"Socialists are not arguing against the efficiency of markets to distribute goods and services most efficiently. What socialists are saying is that markets fail. And with scarcity of resources becoming more apparent, now is the time to accept central planning as an official federal policy instead of the faux centrally planned laissez-faire we have now and since the 1980's or so. "

But this exactly what central planning does such a horrible job at doing.  When resources become scarce, like say, food, socialists try to limit the prices and engage in rationing.  This sort of activity has always led to negative consequences.  

Since the 1930's though, richest nations around the world have subsidized argriculture to the tune of many billions of dollars every year. The Soviet NEP that encouraged private farmers to get rich didnt work. We nearly experienced a disaster in the same era of leave it to the market capitalism in North America in a land of arable and lush farmland from one side of the continent to the other and subsidized by what amounts to slave wage predatory capitalism in Latin America. And so central planning in agriculture has been the way ever since. No first world nation has been willing to chance food production to markets alone ever since. The IMF and WTO push market ideology in food production onto thirdworld capitalist countries a lot moreso, and today we have an estimated one billion chronically hungry people around the world and somewhere around 50 million sacrificed on the altar of an invisible hand deity every year on an almost religious basis. Our capitalist institutions, state-capitalist governments,  and subsidized agribusinesses used food and global monopolies as  weapons during the cold war and continuing today to further their own market interests.

brockm wrote:

Markets do not fail.  When something becomes scarce, it's price goes up, to signal a need for capital investment in the production of that scarce good.  Your confidence that central planners can do a better job than the price mechanism just does not jive with any empirical fact.

But markets are failing all around our ears today. Millions lost their jobs when a tech bubble burst at start of the 2000's. Then it was real estate bubble, and then a commodities bubble by 2008. Now there is talk of a derivatives bubble. Alan Greenspan, the godfather of neoliberal finance in the US, said to Carl Levin and a Congressional committee on the collapse that his view of the world was wrong - that his view of how the world works is deeply flawed.

brockm wrote:

I needn't remind you of the food shortages that have occurred in Soviet Union, Cuba, North Korea, and China before it liberalized it's food production markets.

Cuba and North Korea were actually thriving under the COMECON barter system. It was after disolution of the USSR that North Korea and Cuba lost their trade partner countries and consequently suffered vicious trade sanctions by a group of countries which were alleged to believe in free trade at the time. Vietnam and Cambodia suffered the wrath of US trade sanctions for many years after the war, and not one thin US dime ever went to reparations for massive loss of life and destruction in those countries. North Korea is a small country about the size of the state of Mississippi and mostly in a mountainous region of the peninsula. Most of the agriculture is in low lying land next to the sea and vulnerable to inclement weather, typhoons and such. Koreans want to unite the two Koreas, but the US Military is still there and still threatens millions of North Koreans with nuclear incineration. Genocidal trade sanctions, blocking humanitarian aid to Cuba and North Korea is illegal according to the UN, and yet it still occurs. The US is the only superpower left with nuclear weapons stationed on foreign soil and roaming the seven seas, and anywhere from 700 to 1000 military bases and military communications installations in dozens of countries around the world. There can be no legitimate purpose for nuclear weapons.

brockm wrote:

Fidel,

The "central planning" of our agriculture in the form of farm subsidies is to keep farmers employed due to the fact that industrial farming has priced independent farmers out of the market due to an over-supply of food.  The goal of the farm subsidies is to keep those famers employed, despite the fact that the market doesn't need them.  They're not needed because we have more than enough food, and prices are too low to sustain the number of farmers we have.

That's the neoliberal theory put into practice in agriculture since the 1980s or so. Neoliberal trade deals like NAFTA have forced small farmers out of business, and caused medium sized producers to either buy out small farms or yield the way for big agribusinesses to takeover. And their produce, which is subsidized by the government and cheap labour in Latin America and imported from Latin America to the US,  is dumped on developing countries and undermining their ability to earn their way out of poverty through developing their own domestic andexport markets. Asian tiger economic like CHina and Singapore, S. Korea, Japan etc were given MFN trade status after WW II in order to prevent them from going communist. And there were military interventions and crackdowns necessary along the way, like the massacre at Kwang Ju in 1980. But basically, those countries were allowed to develop small farm agriculture in order for them to earn a living and support the few children they did have. The next generations were better educated and accessed government health care and public education in those countries(more Marx and Keynes than Smith or Hayek again) Neoliberal ideology according to Washington consensus was not the way in those countries.

brockm wrote:

And are you honestly denying the horrible famines that have taken place in North Korea? They're plenty of documentary evidence of it.  Even video evidence.  Unless of course, you think it's been fabricated.

 Nope not me. Russia and surrounding countries endured famines long before Lenin and Stalin. A lot of Russia is located in permafrost and growing seasons short. Compare that with North America's vast wheat fields of Saskatchewan, lush farmlands of Southern B.C. and Southern Ontario, PEI, Kansas, Idaho, the sun belt states, and citrus imports subsidized by what amounts to slave wage capitalism in Uncle Sam's backyard. And yet the US has 30-35 million food insecure people today. People were hungry in the depression era in both countries even under the most ideal geographic conditions sabotaged by an unworkable economic system.

Solzhenitsyn said in recent times that interest in Ukrainian famine has only become popular in recent times for political reasons, and that it was not a deliberate genocide.

And according to Amartya Sen's figures, democratic capitalist India alone still manages to produce as many skeletons every eight years as what China did in all its years of shame, from 1958 to 61. 100 million corpses were produced prematurely in India between the years 1947 and 1979. By 1976, the year of Mao's death, China's infant mortality was better than the average for all thirdworld capitalist nations. Life expectancy in China was doubled in Mao's time.

brockm wrote:

Are you arguing against my position? Or are you arguing against the corporatist establishment position? Because I thought we established some time ago, that I'm not defending that position.

What I am saying is that all major world experiments in capitalism have failed around the world since 14th century Italy, twice in the last century, 1973-85 Chile,  and 1900-29 North America.

brockm wrote:

There are no capitalist third-world countries.  You are misusing the word capitalist like you misuse the word laissaize-faire, when you conflated it to mean corporatism.

Did you sleep through the cold war or something? Born after 1991? Much of the thirdworld has been influenced and-or under economic tutelage of the capitalist west from last century to this one. Bombay stock exchange is the oldest in Asia. Communists were chased out of democratic capitalist Africa and India at some point in the last century by neo-colonialism and paving the way for thirdworld capitalism. Capitalism today is actually a kind of globalizing neo-feudalism, and it's very undemocratic capitalist institutions have preached a much more capitalist version of economy and market fundamentalism to those countries than would be accepted here in the slightly more democratic firstworld capitalist countries. Markets in water have been rejected or failed or in a state of failing around the democratic capitalist thirdworld. And as we know, markets in food production and distribution have not worked well since at least 1847 Ireland and wherever else thirdworld capitalist countries export food to the market, which are about 85% of chronically hungry nations today.

brockm wrote:

Most third-world nations are stuck in poverty not because of any failing of a market-based system, but more often, because of government corruption, internal ethnic conflicts, excess government spending on military, foreign interventions, constant disregard for property rights by the government in the form of expropriations.

1990's Russia was the most significant example of Marxian primitive accumulation since enclosure era England. Yeltsin and Chubais and Russian oligarchs were the inside men on the job. American David Kotz and Canadian Fred Weir described it as a 'revolution from above' In 1986, there were about two million Russians living in poverty. By the end of the 1990's, it was closer to 60 million.

brockm wrote:

I suspect you would have called Angola a capitalist country from 1975-2002 while it's civil war was raging, and been quick to use it as an example of the failure of the capitalist model.

Angola's most successful domestic market has been the manufacture of artificial limbs. The US backed the very muderous Jonas Savimbi and UNITA, and intervened in Angola with political influence and money by 1975. And they've been siphoning off the oil to the west ever since. Angola does need socialism as do most countries -re-colonized by marauding capital in Africa. Fifth Avenue bondholders have a habit of buying debt in those countries that has nearly expired or could be forgiven by original lending nations if private enterprise jackals didn't insist on corrupting a few of the leaders and captains of industry and banking in those countries. Patrice Lumumba's vision for a united Africa was murdered at the start of the 1960's, and the west would go on to attempt to murder an idea in Vietnam. The US and China were funding many of the same proxies in Africa and SE Asia, including the Khmer Rouge.

Well perhaps I should try harder, brockm. But I think you, too, should try to concentrate on describing actual capitalism as per the historical record and avoid the utopian version for the sake of persuasive argument.

In the US, Libertarians on the right are a bunch of former conservatives disaffected with US conservatism. They tend to be lawyers and business types who like the idea of a national army and police to protect their private property, but they don't wanna pay any taxes to support civil society in general. And they want laws changing to enable them to crook the clients more easily. "LRWF"