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Alex: to a certain point, capitalism resulted in better conditions and wealth for all, but over the last 30 years, the policies of extreme deregulation, risky financial practices and so forth have driven up income inequality within countries and between countries to an alarming degree, and in this same period of time global poverty has dramatically increased. It would be very hard to argue that such a clear trend was produced by different factors. We have a lot of evidence that income inequality causes big problems for people. So I see where you're coming from, but don't think it applies to unregulated capitalism, which enables individuals and corporations to clock up crazy amounts of profit without feeding that back into economies. Organisations like the IMF have also forced dependent third world countries to play by their economic rules (total deregulation) which allowed MNCs a free-for-all in terms of setting up shop in their countries, exploiting cheap labour and resources, but sucking the profit out of those countries, rather than feeding it back in through tax, or even the requirement to employ management/higher tier staff from within that country.
The article I cited was just the first example I could easily find. At least it was an online article. The rest of the stuff informing my view are academic sources which are much harder to share on here with other posters - plus I was too lazy to fish around in second year notes.
BigFudamental

Sorry if I'm boring you with stuff that has been chewed over 10000s of times in the literature though...

100% of my familiarity on the topic comes from a 2hour seminar by someone in my department who was researching it two years ago. So I haven't actually read the literature on this myself or I might have more to say. It just influenced my opinions.
(edited 12 years ago)
Original post by Craghyrax
Alex: to a certain point, capitalism resulted in better conditions and wealth for all, but over the last 30 years, the policies of extreme deregulation, risky financial practices and so forth have driven up income inequality within countries and between countries to an alarming degree, and in this same period of time global poverty has dramatically increased. It would be very hard to argue that such a clear trend was produced by different factors. We have a lot of evidence that income inequality causes big problems for people. So I see where you're coming from, but don't think it applies to unregulated capitalism, which enables individuals and corporations to clock up crazy amounts of profit without feeding that back into economies. Organisations like the IMF have also forced dependent third world countries to play by their economic rules (total deregulation) which allowed MNCs a free-for-all in terms of setting up shop in their countries, exploiting cheap labour and resources, but sucking the profit out of those countries, rather than feeding it back in through tax, or even the requirement to employ management/higher tier staff from within that country.
The article I cited was just the first example I could easily find. At least it was an online article. The rest of the stuff informing my view are academic sources which are much harder to share on here with other posters - plus I was too lazy to fish around in second year notes.

To a certain extent I agree - what you call "unregulated capitalism" can lead to uncompetitive outcomes, and it falls to governments to encourage the required competition for a functional capitalist society. I'm still unconvinced of the "MNCs 'exploit' poor countries" argument though - provided that people in those countries can choose not to work for the MNCs then presumably them choosing to do so suggests its a better option for them than the alternatives. I can see a problem if governments are corrupt and give unlawful preferential treatment to MNCs, but that is the fault of the corrupt governments and not the MNCs per se.
Original post by alex_hk90
To a certain extent I agree - what you call "unregulated capitalism" can lead to uncompetitive outcomes, and it falls to governments to encourage the required competition for a functional capitalist society. I'm still unconvinced of the "MNCs 'exploit' poor countries" argument though - provided that people in those countries can choose not to work for the MNCs then presumably them choosing to do so suggests its a better option for them than the alternatives. I can see a problem if governments are corrupt and give unlawful preferential treatment to MNCs, but that is the fault of the corrupt governments and not the MNCs per se.
What kind of a choice is it if you're living in poverty and that's the only way to make an income? My main point wasn't that cheap labour was exploited, but that the profit MNCs make from using cheap labour doesn't go back into those countries.
And the reason for this is because many third world countries' financial aid from the World Bank was made conditional on implementing various economic policies prescribed by the IMF.

Have you read anything by Ha-Joon Chang? (He's a Cambridge Economist)
Original post by Craghyrax
What kind of a choice is it if you're living in poverty and that's the only way to make an income? My main point wasn't that cheap labour was exploited, but that the profit MNCs make from using cheap labour doesn't go back into those countries.
And the reason for this is because many third world countries' financial aid from the World Bank was made conditional on implementing various economic policies prescribed by the IMF.

My main point is that it would seem that those countries must think (rightly or wrongly) that they are better off with the MNCs, otherwise they could choose not to have them. Similarly about the financial aid, it is their choice to accept it and they must think they are better off with it (and the associated conditions) than if they chose not to accept it.

Original post by Craghyrax
Have you read anything by Ha-Joon Chang? (He's a Cambridge Economist)

I think I might have read a couple of articles by him a while back, but I haven't read any of his books, no. Is there any one in particular you would recommend?
Original post by alex_hk90
My main point is that it would seem that those countries must think (rightly or wrongly) that they are better off with the MNCs, otherwise they could choose not to have them. Similarly about the financial aid, it is their choice to accept it and they must think they are better off with it (and the associated conditions) than if they chose not to accept it.
Erm, no. They think 'Oh ****, we're not going to get any desperately needed financial aid unless we open up our economy to multinationals just like the IMF has insisted. :lolwut:
alex_hk90

I think I might have read a couple of articles by him a while back, but I haven't read any of his books, no. Is there any one in particular you would recommend?
If you PM me your email address I'll send you an article based on his book 'Kicking Away the Ladder' where he argues that OECD countries all nurtured their economy for a long time before they placed industries into the economy without any subsidy and protection. He argues that this allowed their industries to grow strong before they then competed on a global scale. By comparison, the IMF and World Bank have not allowed developing countries to use the same method, and to protect their industries before facing international competition. They are forced into competition on the global market that is unfavourable because they aren't allowed to set their own terms.
Some people argue that the Asian economic success challenges this rule, but he shows that they only became very successful by breaking the rules that the IMF had laid out for them on the sly in how they operated economically.

The IMF is constitutionally based around 70% control by Americans, and it is in their interest that it has dealt with the third world.
The other really good thing to read is his book 'Bad Samaritans'.
Reply 7725
Avatar for lp386
lp386
12
Original post by Craghyrax

If you PM me your email address I'll send you an article based on his book 'Kicking Away the Ladder' where he argues that OECD countries all nurtured their economy for a long time before they placed industries into the economy without any subsidy and protection. He argues that this allowed their industries to grow strong before they then competed on a global scale. By comparison, the IMF and World Bank have not allowed developing countries to use the same method, and to protect their industries before facing international competition. They are forced into competition on the global market that is unfavourable because they aren't allowed to set their own terms.
Some people argue that the Asian economic success challenges this rule, but he shows that they only became very successful by breaking the rules that the IMF had laid out for them on the sly in how they operated economically.

The IMF is constitutionally based around 70% control by Americans, and it is in their interest that it has dealt with the third world.
The other really good thing to read is his book 'Bad Samaritans'.


Incidentally, 23 Things They Don't Tell You About Capitalism kicks butt, is nowhere near as commie as the original cover suggests, and people should read it. I first lent it out over a year ago and I still haven't got it back...

EDIT: Also, I was behind him in the queue at the buttery once and got to watch his deep internal struggle as to whether he should get a panini or not. I've never seen someone (that isn't me) be quite so indecisive over ordering food.
(edited 12 years ago)
Reply 7726
Avatar for harr
harr
15
Original post by Craghyrax
Alex: to a certain point, capitalism resulted in better conditions and wealth for all, but over the last 30 years, the policies of extreme deregulation, risky financial practices and so forth have driven up income inequality within countries and between countries to an alarming degree

If you start off with everyone poor (say before the industrial revolution) and then some countries get rich, I wouldn’t call the increase in inequality between countries alarming. Obviously this change has been over the last few hundred years rather than the last 30, but I think it shows that increases in inter-country inequality aren’t necessarily bad.

and in this same period of time global poverty has dramatically increased.

The stuff I’ve seen has suggested that both global poverty and global inequality have fallen. http://www.voxeu.org/index.php?q=node/4508

Organisations like the IMF have also forced dependent third world countries to play by their economic rules (total deregulation) which allowed MNCs a free-for-all in terms of setting up shop in their countries, exploiting cheap labour and resources, but sucking the profit out of those countries, rather than feeding it back in through tax, or even the requirement to employ management/higher tier staff from within that country.

I agree that it’s exploitation, but I think the net effect is positive. Just look at the huge pay rises Foxconn are offering. I’d take a job there over being a farm labourer at constant risk of dying in a famine.
Original post by Craghyrax
Finally, when I said that happiness was the most important thing in life, I meant everybody's happiness, not just my own. It would diminish my happiness in life if I knew that my wealth and prosperity was bought by making a large number of other people miserable and destitute. Certain types of financial activity and venture very straightforwardly do just that. (One very obvious example: http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-how-goldman-gambled-on-starvation-2016088.html)
http://timworstall.com/2010/07/02/please-someone-teach-johann-hari-some-economics/

(I’m not saying that I agree with all of Tim Worstall’s post, but I think it raises some good points.)

Edit: Looks like I've got the wrong colour...

Edit2:
Original post by Craghyrax
He argues that this allowed their industries to grow strong before they then competed on a global scale. By comparison, the IMF and World Bank have not allowed developing countries to use the same method, and to protect their industries before facing international competition
That the countries need help in the first place suggests that their industries weren't doing a great job of growing strong. Importing companies that are relatively well run and uncorrupt and already have a market share in the countries where people are buying stuff is quite possibly a quicker route to making people better off.
(edited 12 years ago)
Original post by harr
If you start off with everyone poor (say before the industrial revolution) and then some countries get rich, I wouldn’t call the increase in inequality between countries alarming. Obviously this change has been over the last few hundred years rather than the last 30, but I think it shows that increases in inter-country inequality aren’t necessarily bad.
I wouldn't deny that the development of capitalism over centuries has had some very good effects. I was very specifically speaking about the harmful consequences of the neoliberal economic agenda pursued by OECD countries since Reagan and Thatcher. So that is very particular to that period of time.
harr

The stuff I’ve seen has suggested that both global poverty and global inequality have fallen. http://www.voxeu.org/index.php?q=node/4508
I'm very sceptical, but I'll have a look. There are lots and lots of debates about measurement, for instance. People love to take GDP in China and India to challenge that point, but many people have pointed out that this is flawed because of how GDP is measured and whether people look at household incomes, individual incomes, etc.

Edit: Looks like I've got the wrong colour...
I'll not ban you, just this once :dry:

:p:
Original post by lp386
Incidentally, 23 Things They Don't Tell You About Capitalism kicks butt, is nowhere near as commie as the original cover suggests, and people should read it. I first lent it out over a year ago and I still haven't got it back...

EDIT: Also, I was behind him in the queue at the buttery once and got to watch his deep internal struggle as to whether he should get a panini or not. I've never seen someone (that isn't me) be quite so indecisive over ordering food.


It sounds good. Thanks.
And things are usually nowhere near as commie as people assume :sigh:
Take Obama :wink:
Reply 7729
Avatar for harr
harr
15
Original post by Craghyrax
I wouldn't deny that the development of capitalism over centuries has had some very good effects. I was very specifically speaking about the harmful consequences of the neoliberal economic agenda pursued by OECD countries since Reagan and Thatcher. So that is very particular to that period of time.
My point is that we can't necessarily conclude from increasing inequality that these things were bad. It's suggestive, but we can see that it's also consistent with good things.
I'm very sceptical, but I'll have a look. There are lots and lots of debates about measurement, for instance. People love to take GDP in China and India to challenge that point, but many people have pointed out that this is flawed because of how GDP is measured and whether people look at household incomes, individual incomes, etc.
I can't claim to know that the figures I posted give a true picture, but I thought it was interesting that they disagree with your impression. It seems clear that living standards in China have improved since the Great Leap Forward finished, but there are obviously more factors in that than globalization.
I'll not ban you, just this once :dry:

:p:
Thank you. :smile:
Original post by harr
My point is that we can't necessarily conclude from increasing inequality that these things were bad. It's suggestive, but we can see that it's also consistent with good things.
The correlation is with the last 30 years, whereas the good things you mention are associated with the industrialisation and capitalism in general. They're not the same things, you can't use the general case to refute the particular. I'm not going to pull out my undergrad stuff because I'm in the UL trying to do my actual work, but the scholarship on the matter is obviously a lot more involved and detailed than the gist of it which I gave you from my memory of the second year of undergraduate (2008).
I would have also thought that the global recession would be enough of an uncontroversial pointer to the damage that specifically neoliberal, deregulated financial transactions can have.
harr
I can't claim to know that the figures I posted give a true picture, but I thought it was interesting that they disagree with your impression. It seems clear that living standards in China have improved since the Great Leap Forward finished, but there are obviously more factors in that than globalization.
Thank you. :smile:
Its a well known debate. But as I said in the last post there were empirical problems with the argument you mention. I don't mind looking for the sources on it later.
I'm trying to work out if its coincidence that that's on topic or not :hmmmm:
Anyone know roughly when exam timetables appear on camsis?
Original post by Topaz_eyes
Sure, it's good procrastination from work :tongue:


Sorry I thought it said line, not lime
Reply 7734
Avatar for harr
harr
15
Original post by Craghyrax
The correlation is with the last 30 years, whereas the good things you mention are associated with the industrialisation and capitalism in general. They're not the same things, you can't use the general case to refute the particular. I'm not going to pull out my undergrad stuff because I'm in the UL trying to do my actual work, but the scholarship on the matter is obviously a lot more involved and detailed than the gist of it which I gave you from my memory of the second year of undergraduate (2008).
I'm not trying to refute the idea that it's damaging. I'm just saying that it sounds to me as if you are saying the below, when you aren't actually arguing that because if you were then someone could replace the occurrences of "neoliberalism" with "the industrial revolution and the following couple of centuries of economic growth in the developed world".

(1) Neoliberalism has increased global inequality.
(2) Global inequality is bad.
(3) Therefore neoliberalism is bad.
I would have also thought that the global recession would be enough of an uncontroversial pointer to the damage that specifically neoliberal, deregulated financial transactions can have.
In the UK it has taken living standards back maybe five years, leaving them significantly higher than before neoliberalism. (Though obviously the averages will hide the damaging effects of things like unemployment that don't necessarily lead to the average person being poorer (because the incomes of others have risen) but are very damaging in happiness terms to those affected.) It might be that living standards would be even higher without neoliberalism, but the recession isn't sufficient to show that.

And while deregulation may have helped cause the recession, there have been recessions without neoliberalism, and the particular severity of this one is added to by things like the Eurozone crisis which could have been set off by any recession.
(edited 12 years ago)
Reply 7735
Avatar for Zoedotdot
Zoedotdot
OP
18
Original post by Craghyrax
I'm trying to work out if its coincidence that that's on topic or not :hmmmm:


Pretty sure he searched 'economics' and posted that in the threads that came up :p:
Original post by Craghyrax
Ebam, not everyone in life is constantly on the lookout to make money out of people, you know :p:


I don't know, I think trying to get as much cash off'f your landlord as possible sounds pretty lefty; down with the propertyocracy!
Original post by Mr Dactyl
I don't know, I think trying to get as much cash off'f your landlord as possible sounds pretty lefty; down with the propertyocracy!


It's quite funny, that getting money from the landlord who is essentially using your money to pay the his/her mortgage....


Just think of this as stopping (reversing) capatilism.....
Original post by The West Wing
Sorry I thought it said line, not lime


Yeah I figured that out :tongue: Sorry for my terrible, terrible drawing. I blame, um... actually, I think I have no-one to blame but myself :biggrin:
Original post by harr
I'm not trying to refute the idea that it's damaging. I'm just saying that it sounds to me as if you are saying the below, when you aren't actually arguing that because if you were then someone could replace the occurrences of "neoliberalism" with "the industrial revolution and the following couple of centuries of economic growth in the developed world".

I don't see how that is the case. Also while I was happy to agree with the fact that industrialisation has made some things better, that is a far cry from suggesting that it hasn't caused other terrible problems for humans. There's quite a lot of good anthropology looking at more agragrian, traditional communities becoming integrated into capitalism, and what the effects were and how they were brought to changing. I don't think that its in any way uncontroversial that we're better off with capitalism than without, and there are plenty of features of more traditional social structure that were superior.

And while deregulation may have helped cause the recession, there have been recessions without neoliberalism, and the particular severity of this one is added to by things like the Eurozone crisis which could have been set off by any recession.

http://www.youtube.com/watch?v=bqz3R1NpXzM Have you seen the impossible hamster? :p:
Increased living standards are good to a point, but personally I think things would be a lot better if they had levelled off before the point we'd reached. Not only is the current living standard unsustainable in terms of the environment, but inequality also produces a lot of harm.

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