Path to Socialism

[Guest 6.8 AR]

If you start out using the assumption that central planning drives or maintains economies better than what

actually is the economy, the producer and consumer, you can't get to any form of true capitalism. The

government has already won.

You also can't rely on assumptions made by what has already happened with total government intervention

being the baseline. It would almost certainly be a different outcome, and assuming "Billy Gates" stealing something from you can be said to be a bit disingenuous unless you saw him in a completely different light, that is having been born into this version of an economy and not the other. I don't see you as cynical, Lester, but I see apples to oranges comparisons since we already have one type of an economy and our experiences have conditioned us to accept certain premises without considering the differing starting point.

It would take a while to allow unbridled capitalism to show its value, but in a totally free and honest attempt without all the bells and whistles of altruistic or do-gooders sticking their noses in others faces, you would most likely see different outcomes than we are programmed to think of.

Our society has already become the socialist/communist nightmare not too many steps removed from Europe or China. They just have different faces on them.

The difference between people like Friedman and Keynes is that one assumes freedom to choose, based on reason and logic and the other one doesn't.

That old letter, whether true or not, between Davy Crockett and a constituent shows the example of how the government, in it's early stages, already established its own version of altruism and has continued down the same path to where we are today. It had no business doing what it did then, and has no business doing what it does now.

Edited August 18, 2012 by 6.8 AR

[Guest Lester Weevils]

Thanks 6.8. Cynical? Me? Surely you jest!

Speaking of human nature, something which may be fairly universal human nature-- Most people are eventually satisfied after achieving some level of material comforts. Most people don't have the sick compulsion to control other people. However we always have a small percentage of sick SOB's for whom no amount of wealth and power is enough. A small percentage of this small percentage of sick SOB's happen to be real smart and competent with lots of energy and motivation. Most people will slack off whenever they achieve "enough" but a few people don't ever let up. Incapable of resisting their own natural compulsion to dominate.

We have such people amongst us regardless of the form of gov or the customs of the society. They go for the power positions regardless of the power structure. In a "pure theocracy" the sickest sociopaths will compete to be pope or chief mullah. In a dictatorship the sickest most able sociopaths compete to be supreme fearless leader. In monarchies the occasional founders of dynasties tend to be cut from the same cloth, but then after a few generations the blood line inevitably returns toward the average and then some other smart SOB overthrows a weak idiot king and founds a new dynasty. In commie or "democratic socialist" setups they want to be high-placed gov officials. In laissiez-faire capitalist setups they all want to be high-corporate-muck-a-mucks.

The USA founders cynicism motivated them to set up a split-powers gov because they wanted to make it difficult for a smart psychopath to gain control of all the marbles. As long as the system operates as intended, the worst that can happen is that power gets shared between squabbling opposing factions of smart psychopaths. Therefore no single psychopath gains complete control. A little bit of freedom might remain "in the cracks" between the domains of local, state, and federal power hungry psychopaths. Some freedom might be found between the cracks of senate, house, presidential and judicial power hungry psychopaths.

"Pure" setups of any form tend toward the same end-game. Life for you and me would be about the same regardless whether all the marbles belong to the Pope, the Ayatollah, the King, Supreme Fearless Leader, or a loose alliance between General Bullmoose, Richie Rich and Scrooge McDuck. Life for you and me would be about the same under any of those guys. They are the same kind of people. Had the Ayatollah been raised under a different system he would have become Pope, Supreme Fearless Leader, General Bullmoose, President of the Senate or Director of the ATF.

Squabbling between the gov and corporations might open more possible small regions of freedom between the cracks. I can't guarantee that the end game of entirely unregulated capitalism would be of a few people owning and running the world, but am curious what would prevent that from happening? And I'm curious what would prevent those few people from becoming synonymous with the government? Money and media wins elections and there is always bribery in one form or t'other. A few fellas get rich enough and I garun-dam-tee-ya they will also run the gov. Laws will be written to benefit the fellas in charge so they will become ever more difficult to oppose or overthrow.

Maybe I'm all wrong but it seems that if the gov interferes too much in business then we live under one kind of totalitarian nightmare, but if the gov stays entirely out of business then we just get another flavor of totalitarian nightmare that is about the same for the average guy. So maybe it is a juggling act to balance gov vs biz and open up a little freedom in the cracks.

Just a couple of specific questions-- Anti-trust law continues to be weakened, but anti-trust law is definitely a case of gov interfering with a free market. If all anti-trust law is repealed, what free market forces would prevent the end game of a few big banks who control the entire enchilada and conspire to set rates, rather than thousands of banks who are too numerous to engage in price-setting conspiracies? What would prevent the end game of a few energy companies who control all energy and conspire to lock out competition and set rates in defiance of market forces? What would prevent a few Carnegie or Soros characters' holding companies owning banks, energy, transportation, communication, manufacturing, agriculture, retail, the whole shebang? A few fat cats controlling every aspect of the market wouldn't be a free market, would it? How could market forces ever operate? It would be exactly the same as a communist command and control economy, except the guy in charge would hold a job title of Chairman of the Board rather than a job title of Commissar?

Another gov interference with the free market are patents, copyright and trademarks. Those tend to benefit big biz more than small biz and the guys in charge would want to keep that gov interference. In theory a patent or copyright might "protect" the small guy but in general the deepest pockets and best lawyers win, and it is enforced with civil law. But anyway, in a completely free market we definitely need to do away with patents, copyright and trademarks.

In the current system it is a hazardous mine-field when the small fish does biz with a big corp. There are so many ways they can legally cheat you. If curious I can give specific examples, but it is easy to do and happens all the time. But after some point of excess the big fish are restrained because some actions would subject them to huge fines or jail. Get the gov out of the huge fine and jail biz, and katy bar the door if a big fish wants the property of a small fish. All legal.

Edited August 18, 2012 by Lester Weevils

[Guest 6.8 AR]

Which is better? Katy bar the door capitalism? Or Total central planning? I will always lean towards capitalism.

You brought Bill Gates and I'll throw in Steve Jobs and others like them in our lifetime that started out with nothing

an idea. you also brought up big companies that controlled huge shares of commerce, someone like IBM.

Bill and Steve had similar ideas around the same time. Of course Bill lit up like a rocket, but Steve did quite well

in the beginning. Now IBM had the mass market share in computing with the likes of DEC competing, but that was

mainly mainframe. Bill comes along and shakes these big companies up to the core, not overnight, but ends up

bigger than them. Steve does the same thing but takes off at a different pace, and ends up a huge powerhouse

in his own right and finally gets to reap the rewards of that capitalism. Would that have happened in a centrally

planned economy? It did in ours which is to an extent, a mixture of both, but still capitalistic enough to allow their

existence. Capitalism allowed the personal computer. I wonder if Soviet Russia could have done it. Or China. Both

those countries, mostly China, use only the parts of capitalism that allow them to make a buck, but with slave labor.

Soviet Russia is similar. I'm not saying they don't create anything, but it doesn't come about the same way. Countries

like those two make their wealth by stealing from several sources: labor and outright theft of ideas from foreign

countries.

We regulate our capitalism because people, when they get jealous of another man's wealth, tend to cry until the

government intervenes, or for other reasons like using the EPA as a blunt instrument to take down established

industries as what's happening in the energy industry today. It isn't exclusive to jealousy. There are political components

also, like communism, which has been in our country for far too many years than most realize. Those pols use tricks

to confuse good ole ordinary people like you and I until we adopt some very serious and dangerous regulations on

a lot of companies doing commerce all around us, thinking they are making us safer by those regulations. Instead,

they are only killing the businesses related to those big companies.

Regulations intended for one group usually don't stay put. They migrate into other places and end up on our doorstep

regulating us directly. So much for freedom for us little guys, eh?

We haven't been allowed to taste the fruits of capitalism like Friedman writes of, I guess because we have been

conditioned to worry too much about what everyone else does and don't do enough worrying about our own self

interest. It always pays us back in the end. That's also what makes us into a nation of sheep.

With more capitalism, we might need less guns, at least in the government, because the government is continually

holding a gun to our heads rewarding us to conform to that higher authority. The government is going to have to

keep up with bigger guns, also, and they have been doing that, because of the currency situation in our country.

We are letting capitalism slip away from us, rather than embracing the one thing that would help us.

[Guest Lester Weevils]

Thanks 6.8. Am not arguing against free markets but am curious what setups would keep markets free? Or the exact definition of the "most free market".

When new tech comes along there is an initial phase with lots of tiny businesses building automobiles or airplanes or radios or computers. As the market "matures" some fish drive the other fish out of biz or eat the smaller fish. So we start with a zillion small auto companies and end with a few creaking giants. We start with scads of radio companies and end with a handful. We start with lots of little airplane companies and end with a few giant airplane companies. Every "new thing" opens opportunity for new blood to get an equal chance at establishing brand new monopolies.

In the days of DEC and IBM it was a big-capital biz, where you needed sufficient resources to make all the little pieces. Not many companies had deep enough pockets to feed an army of engineers for many years in order to design a CPU out of thousands of discrete chips. So those few companies got a vertical lock on the computer biz. The vertical lock also tends to "make sense to the customer" in many regards. If company xyz's biz partners all use IBM 360 mainframes then it is smarter for xyz corp to pay thru the nose for an IBM 360 than to pay thru the nose for a Burroughs mainframe. After there are enough IBM 360's in service, then there is more software and expertise on IBM 360 and it is cheaper to pay thru the nose for an IBM 360 than pay thru the nose for some other brand that might be slightly better/cheaper but requires higher cost in "reinventing the wheel" to get the same capabilities as an IBM 360.

The opportunity for new empires to knock off old empires happened with the microprocessor, when suddenly you could get into the computer biz without hiring man-years of engineers to design a new CPU out of miles of wire and thousands of parts. An outlaw rebel living in the hills eventually becomes powerful enough to depose the king. After the outlaw rebel becomes king, the new king shoots outlaws just like the old king did. The king changed but the system stayed exactly the same. Regardless whether Elvis or The Beatles dominated the top 40, the institution of a top 40 remained unchanged.

In the old days, time and distance tended to limit the size of empires. With our faster communication and transportation, limits on empires still exist but empires can grow bigger.

Some businesses are very capital intensive and by nature need to be huge. Then some other businesses can prosper on smaller scales. The current computer industry is a few giants, then an assortment of smaller giants in sycophantic relationship with the big giants, and thousands or millions of smaller players. Computer biz has advantage compared with steel, rail, or auto manufacturing because it is relatively inexpensive to get yer feet wet. The average joe can eat ramen noodles living in a roach infested apartment and write a program that might make him some money. But the average joe can't establish a new steel foundry or build space launch systems in his back yard.

A monopolist in the steel industry would have different strategies than a monopolist in the computer industry, though some strategies would be shared. Each industry would have slightly different strategies.

I'm not speculating on how much gov regulation would be "ideal". Every individual law or gov action can be quibbled and nobody likes gov interference. But I'm pretty certain that without antitrust law there would be fewer small businesses and there would be fewer big businesses, and the remaining big businesses would be gigantic indeed. The peckerwoods in charge of the remaining giant conglomerates would get bored just collecting money and they would get into politics for the status and glory, and so they can try to make everybody live according to the way they think everybody should live. Just another form of totalitarianism.

I don't care how big a house that Gates, Soros, Bloomberg, Koch, Romney, Haslam or Corker lives in. But I don't like peckerwoods buying their way into politics then trying to run my life. I've always liked small time biz and was never tempted to work for a big corp, so from my value judgement lots of businesses = good and a handful of giants = bad. Market forces drive down price and drive up quality. Lots of competing companies cause the market to do its magic. Monopolies are just as immune to the market as was Soviet Russia.

Without antitrust law, IBM would still be the king of the hill. As soon as Gates or Jobs got big enough to be a threat, IBM would have bought em out or run em into the dirt. IBM could have done it easy but antitrust law would have put em in jail had they tried.

Without antitrust law, Apple would have become a Microsoft subsidiary during Apple's late 1990's hard times. MS might have kept Apple going, or maybe Gates would have hired the best engineers, raided the cash and pension funds and then discarded the bankrupt husk. When Apple stock was in the toilet, Gates could have done it easy. Gates didn't take over Apple or kill it dead because of antitrust law. Gates worked to keep Apple going because if Apple had failed it would have put Gates at even more risk of antitrust prosecution. Anybody who likes Apple products can thank antitrust law for Apple's continued existence.

Apple keeps consolidating vertical market control, as do the other big players. They don't have to buy out small fish-- Just set up the Apple Store and make it impossible to buy/sell Apple Platform software without Apple getting a commission. Its better than buying out the smallfry-- Apple makes money if the smallfry prosper and Apple has zero liability if the smallfry starve. It's a better biz plan than keeping slaves. You have to feed and house slaves.

Google store. MS store. All working on broadening the monopoly and attracting more free-labor serfs to work the plantation. Antitrust law is about the sole reason we haven't yet witnessed only one big dog computer platform still standing, and only one big dog software store still standing.

Edited August 19, 2012 by Lester Weevils

[Guest 6.8 AR]

Simple. Get the government back in control by shrinking it and kill about 90% of all existing regulations and laws on the books. Almost every time the government works on a law, it is targeted and marketed specifically to play into our greed or jealousy, or is targeted towards a class that would make us "feel" like we have a better chance to gain something from others, either by a welfare-like component, which taxation is currently used for, or to create a particular set of winners and losers.

"A monopolist in the steel industry would have different strategies than a monopolist in the computer industry, though some strategies would be shared. Each industry would have slightly different strategies." Strategies are strategies. Are you implying regulating strategies? It's got nothing to do with this, does it? Every company may have a different strategy. That's how they run their business. Business ain't the problem, government is.

In other words, like John Galt said, "Get the hell out of the way!", while he exposed the gun pointed at his side.

Maybe some are tired of my use of that book for examples, but it is being proven correct as the days march on.

You just haven't been given Directive 10-289, yet. It'll be here very soon.

Edited August 19, 2012 by 6.8 AR

[Guest 6.8 AR]

Actually, the Antitrust laws benefited Ma Bell. She took that deal and made a lot of millionaires and created more jobs than you can shake a stick at. I doubt Gates would have been allowed near Apple. Possible, but Jobs and his followers would have rather killed that company than deal with Microsoft. Not saying one is better than the other, and I am using a MS PC right now, but I think Jobs was a much more creative person and idea driven than Gates. That's just me, though.

You can't run someone like Jobs off for long.

The trouble with the likes of Soros, Koch(I really wish you hadn't mentioned that one with the others), Romney Haslam, and Corker, and don't forget Alexander, is that politics is the problem and money is required. We let a few of those clowns influence things in DC in ways we should have known better. Some of that is our fault. It still has to be fixed. It doesn't matter how big there house is, but how big their sphere of influence is, and people like Soros need to be run out of the country. You can dig his history up, politically and economically. I won't waste the time on him. The others you mentioned are essentially progressives who need to be run off or threatened with prison if they continue to betray the public. They have the potential of becoming Mr. Thompson's best friends. Maybe Romney will be okay until his replacement is found. Don't

really know.

If you have only small businesses, you have just created utopia just like a liberal has created it. Small businesses tend to grow up and get big. How many companies started out large? Damned few.

At this point in the game of survival in this country, we don't need to be arguing about the benefits of central planning vs capitalism. We may not get the choice, anyways. Central planning has killed more people than anything else on the planet. You know that as well as I do.

I remember someone saying something like this around here a while back, "take off all the warning labels".

How about doing that for a change? We won't have much choice before too long, anyway.

Edited August 19, 2012 by 6.8 AR

[Guest 6.8 AR]

That sure isn't where I'm coming from...I'm certainly not using the word to espouse a "moral code" or as a way of explaining why we are here; just a good 'ol dictionary definition such as "fbehavior that shows a desire to help other people and a lack of selfishness".

Whatever one may think of "why we are here" as your link ascribes to the word, acting unselfishly is, I believe, something worth striving to do and certainly not something incompatible with individual liberty and actually. It seems to me that it's only with liberty that we have the opportunity to act unselfishly.

The difference between her definition and one that Merriam Webster might use is that hers can stand the test of time, where

Merriam Webster changes the definition like people change underwear.

[RobertNashville]

The difference between her definition and one that Merriam Webster might use is that hers can stand the test of time, where

Merriam Webster changes the definition like people change underwear.

'Ole Merriam has been around a long time. I've got a MW dictionary that, at this point is about 70 years...his definition on that word is pretty stable. I'm not saying her opinion/use of the word "wrong"...Rand has her interpretation which which is fine for her purposes; bit her interpretation is not the only one and for the purposes of my post, is not how I used the word.

[Guest Lester Weevils]

Perhaps I misunderstand him but at 4:38 in that Gold standard video you posted he starts talking about the Fed having enough gold to back more dollars, but they did not do so. He then goes on to talk about how keynesian economics has caused inflation and how it was a godsend for politicians and condemns it extended use. Here is a video with the rest of what he was saying in the Gold Standard vid.

Thanks sigmtnman. I read some Friedman long ago and have read other writers discuss his ideas, and watched some of those videos but not all. It is a nice resource to have so many available nowadays. But you most likely have studied it more, and more recently, and know more detail. Was Friedman a "gold standard advocate"? Those short videos we've discussed, Friedman explains how the gold standard idea was mis-applied by the Fed, worsening the depression. Explaining how the gold standard could have been managed better. But he didn't out-and-out claim in those videos that a gold standard is desirable.

OK, I found this-- Friedman was a Monetarist, and this looks like a decent overview-- http://en.wikipedia....wiki/Monetarism According to the article Friedman was not a gold standard advocate.

Monetarism today is mainly associated with the work of Milton Friedman, who was among the generation of economists to accept Keynesian economics and then criticize it on its own terms. Friedman and Anna Schwartz wrote an influential book, A Monetary History of the United States, 1867-1960, and argued that "inflation is always and everywhere a monetary phenomenon." Though opposed to the existence of the Federal Reserve, but given that it does exist, Friedman advocated a central bank policy aimed at keeping the supply and demand for money at equilibrium, as measured by growth in productivity and demand.

[big snip]

Since 1990, the classical form of monetarism has been questioned because of events which many economists have interpreted as being inexplicable in monetarist terms, namely the unhinging of the money supply growth from inflation in the 1990s and the failure of pure monetary policy to stimulate the economy in the 2001-2003 period. Alan Greenspan, former chairman of the Federal Reserve, argued that the 1990s decoupling was explained by a virtuous cycle of productivity and investment on one hand, and a certain degree of "irrational exuberance" in the investment sector. Economist Robert Solow of MIT suggested that the 2001-2003 failure of the expected economic recovery should be attributed not to monetary policy failure but to the breakdown in productivity growth in crucial sectors of the economy, most particularly retail trade. He noted that five sectors produced all of the productivity gains of the 1990s, and that while the growth of retail and wholesale trade produced the smallest growth, they were by far the largest sectors of the economy experiencing net increase of productivity. "2% may be peanuts, but being the single largest sector of the economy, that's an awful lot of peanuts."

[snip]

Historian David Hackett Fischer, in his study The Great Wave, questioned the implicit basis of monetarism by examining long periods of secular inflation that stretched over decades. In doing so, he produced data which suggest that prior to a wave of monetary inflation, there is a wave of commodity inflation, which governments respond to, rather than lead. Whether this formulation undermines the monetary data which underpin the fundamental work of monetarism is still a matter of contention.[citation needed]

Monetarists of the Milton Friedman school of thought believed in the 1970s and 1980s that the growth of the money supply should be based on certain formulations related to economic growth. As such, they can be regarded as advocates of a monetary policy based on a "quantity of money" target. This can be contrasted with the monetary policy advocated by supply-side economics and the Austrian School which are based on a "value of money" target (albeit from different ends of the formula).[citation needed] Austrian economists criticise monetarism for not recognizing the citizens' subjective value of money and trying to create an objective value through supply and demand. These disagreements, along with the role of monetary policies in trade liberalization, international investment, and central bank policy, remain lively topics of investigation and arguments.

Most monetarists oppose the gold standard. Friedman, for example, viewed a pure gold standard as impractical.[14] For example, whereas one of the benefits of the gold standard is that the intrinsic limitations to the growth of the money supply by the use of gold or silver would prevent inflation, if the growth of population or increase in trade outpaces the money supply, there would be no way to counteract deflation and reduced liquidity (and any attendant recession) except for the mining of more gold or silver under a gold or silver standard.

Perhaps because of the great depression, deflation scares more economists than inflation, though both are usually associated with bad news. Deflation usually accompanies downturns and inflation usually accompanies upturns. OTOH computers keep getting cheaper per CPU cycle or per gigabyte, and we don't associate that with a downturn in computers.

Deflation is what got em so itchy in 2008 that they fired up the printing presses big-time. But you can have deflation in some sectors combined with inflation in others. Value of real estate was deflating like a tire on a spike-strip but the value of some commodities were simultaneously inflating. Deflation is good for buyers and bad for sellers, but deflation drastically slows economic activity because sellers hold waiting for the price to recover and buyers hold waiting for the price to bottom-out.

If we had a strict gold standard, given that the amount of gold doesn't grow as fast as the amount of "stuff", most commodities would get progressively cheaper over time. For instance, 32.1 grams per troy ounce, gold currently $1616 per troy ounce. A $10 burger and fries costs 192.5 milligrams of gold. But if the amount of gold stays the same and the number of burgers double, then the price of the burger meal would fall to 96.2 mg gold. On the other hand, the classic expectation is that things get better and cheaper in a rosy future, so more stuff = cheaper price would seem to fit that classic optimism.

But maybe it is too much a psychological hazard if you paid $200,000 for your house, and then they double the number of houses, and your house is now only worth $100,000. People don't like that. Freaks em out, maybe because we have lived our whole lives under inflation and we naturally expect the house to increase in value as the value of money constantly declines.

I'd feel better if a modest house always costs $100,000 and a burger meal always costs $10. Of if a modest house always costs $10,000 and a burger meal always costs a buck. Just pick a price point and keep it thataway. The older I get the harder it is to know what things are worth. I'm constantly pricing my labor at an "unrealistically low" point and constantly getting scandalized at the high cost of stuff that used to be cheap. Though actually the stuff costs about the same but the dollars ain't worth the paper they are printed on.

Thataway if stock prices double you would know that you actually became wealthier, rather than the stock actually staying the same value but dollars are only half as valuable as before.

If we wanted the price of a burger to always be $10, then when the burger supply rises we would have to print more dollars, and when the burger supply shrinks we would have to remove dollars from circulation. IOW, some huge gov entity would have to constantly muck with the money supply just to please me and make sure a burger always costs exactly the same.

Heinlein had a great quote from 1966, 46 years ago, showing how long its been going on, "But our currency has been going through a long steady inflation, and no nation in history has ever gone as far as we have along this route without reaching the explosive phase of inflation. Ten-dollar hamburgers? Brother, we are headed for the hundred-dollar hamburger — for the barter-only hamburger. But this is only an inconvenience rather than a disaster as long as there is plenty of hamburger."

[Mike.357]

if for no other reason I am posting to say I appreciate a video being posted and that post actually containing some discussion, rather than just some youtube vid that more than likely wastes my time.

Kudos Sig

[RobertNashville]

if for no other reason I am posting to say I appreciate a video being posted and that post actually containing some discussion, rather than just some youtube vid that more than likely wastes my time.

Kudos Sig

I agree...some videos are worth their weight in gold and really have something to contribute; some don't