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  1. #21
    Oberon
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    Quote Originally Posted by Pixelholic View Post
    What about a house built by a private contractor where the price is inflated to pay for some exec's pay and the lowest quality materials are used (like say, drywall from China that's contaminated with lead) because it makes the profit margin larger?
    At least in that event you have some legal recourse.

    As for government housing, I have two words for you: Cabrini-Green.

  2. #22
    Senior Member Pixelholic's Avatar
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    You have legal recourse against the government too, and a private corp. will try to stall the courts as much as possible.

    My point was brushing with broad strokes doesn't really address the truth in any real way.

    It was the government that decided you shouldn't be breathing asbestos after all.

  3. #23
    Oberon
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    Government has its place. Private industry has its place.

    I personally would prefer to buy my houses from private industry, thanks. You can express whatever preference you like and it won't bother me.

  4. #24
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by oberon View Post
    Government has its place. Private industry has its place.

    I personally would prefer to buy my houses from private industry, thanks. You can express whatever preference you like and it won't bother me.
    I agree but while there is a chorus that the state is treated by many as a new God and no one recognises its limits there is nothing like that said about the Market or if it is its instantly qualified with suggestions that the market failures either shoudnt be ameliorated or private individuals or churches or NGOs are sufficient to do so.

    What bugs me these days is that while I can read and find reasonable much of the criticism of Marxism, or other sorts of statism (it is statism whatever the theory may say), there is a deafening silence where there should be, not counter argument but, acknowledgement which does not necessarily validate the opposing polemic.

    I think that the political right wing, ie conservatism, is in the position which Utopian Marxism, fascism, socialism and liberalism, once where.

    It is a popular ideology, popular with intellectuals, key interest groups in the economy, establishment and public, with vague but value orientated, or emotive, means and ends which could turn out catastrophic in practice or motivate Weathermen style violence.

  5. #25
    Supreme Allied Commander Take Five's Avatar
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    Economics is one of the most important and most difficult things to understand. It's just so counterintuitive often. What we're talking about here is an issue that professional economists still aren't unanimous about. The fact is that economic matters with this gravity cannot be reduced to short, clean, and unqualified answers.

    IMO, economics is one of those things where most people are all but hopeless. It's just too complicated to be a matter left for voters to decide, and yet it is often the issue that influences the electorate most.
    Johari Nohari

    "If an injury has to be done to a man it should be so severe that his vengeance need not be feared. "--Niccolo Machiavelli

  6. #26
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Lark View Post
    That if you cut back the public sector that the private sector would expand? I dont believe so, then where will the jobs come from and what will small and medium business do without any consumers to spend money for them to make a profit?
    Many people believe this to be true, but it totally depends on what you're cutting. Building infrastructure is usually something that provides economic value, so it's debatable whether or not cutting this sort of spending would increase overall economic efficiency (it totally depends on the economic value of the project). But many things the government does provide much less economic value, and cutting that spending would increase the overall economic efficiency of the country.

    The private sector isn't always more efficient than government. The thing is, if a business isn't efficient enough, they go bankrupt (at least that's how it's supposed to work). This rarely happens with government. Failing programs (in an economic sense) sometimes get even more money to squander (see Social Security, Medicare, etc).

    And regarding everyone's comments about money eventually being circulated everywhere, that's true, except...money has a velocity at which it circulates. The more time that is spent using it inefficiently, the less time that it's being used to create economic value (grow crops, build automobiles, etc).
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  7. #27
    Senior Member eagleseven's Avatar
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    Quote Originally Posted by Lark View Post
    That if you cut back the public sector that the private sector would expand? I dont believe so, then where will the jobs come from and what will small and medium business do without any consumers to spend money for them to make a profit?
    If the government was the only consumer in your economy, then you would be correct.

    Such a single-payer system, however, only exists in Orwell's 1984.

    ---

    Otherwise, consumer spending would increase as tax money is returned to consumers. Poor consumers will spend their tax refunds on consumer goods (providing income for new business), while rich consumers will spend their tax refunds on investments (thus growing the private sector).

    Quote Originally Posted by Lark View Post
    What bugs me these days is that while I can read and find reasonable much of the criticism of Marxism, or other sorts of statism (it is statism whatever the theory may say), there is a deafening silence where there should be, not counter argument but, acknowledgement which does not necessarily validate the opposing polemic.
    The simple fact is that the pro-statism, pro-centralized-planning arguments were dealt a severe blow in 1991, when the world's largest planned economy completely collapsed.

    To make arguments without considering history is foolish.


  8. #28
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by eagleseven View Post
    If the government was the only consumer in your economy, then you would be correct.

    Such a single-payer system, however, only exists in Orwell's 1984.

    ---

    Otherwise, consumer spending would increase as tax money is returned to consumers. Poor consumers will spend their tax refunds on consumer goods (providing income for new business), while rich consumers will spend their tax refunds on investments (thus growing the private sector).



    The simple fact is that the pro-statism, pro-centralized-planning arguments were dealt a severe blow in 1991, when the world's largest planned economy completely collapsed.

    To make arguments without considering history is foolish.

    See this is why I despair.

    An attempt to discuss the private and public sector in any economy, the necessarily mixed nature of any successful, modern, mass consumer economy gets derailed into discussing Communism, really? I mean really and truly?

    And if I'm not wrong Communism ended in 1989 not 1991, at least its 1989 which is being remembered on the radio and TV broadcasts as the year that ended communism in the UK.

    Why and how could you possibly think that citation of a literary source such as 1984 was appropriate in an serious economic discussion? Its like citing Alice In Wonderland to support arguments about earthworks or underground transport.

    There is no suggestion that the government is a single consumer or should be, only that it is, and is a massive one, capable of spending which the private sector simply IS NOT, not even in aggregate can it behave that way nor is it likely to, how are you going to get that much agreement between competitors to shift that much money without one of them trying to turn it to their competitive advantage and the whole thing seizes up.

    Otherwise, consumer spending would increase as tax money is returned to consumers. Poor consumers will spend their tax refunds on consumer goods (providing income for new business), while rich consumers will spend their tax refunds on investments (thus growing the private sector).
    Why? Why does it logically follow? This is "Ought" not "Is" and I see absolutely no evidence to believe it would be the case at all, the poor are liable to spend on fast moving consumer goods or consumer durables but it wont matter to them whether its a tax rebate or a welfare cheque, the rich arent likely to spend it automatically on investment, especially not when the market doesnt or cant guarantee returns, ie when there is a recession or depression threatening, they are likely to save it and in doing so simply take the money out of the economy.

    Why? Why is my version not "ought" instead of "Is", well, its based upon the logical, utilitarian maximising rational decision maker paradigm of individual choice upon which the capitalist economic models are based in the first place.

    I reckon I should stop posting about this, the comfortable rhetoric and ideology which passes for economics with most people really pisses me off.

  9. #29
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by Lateralus View Post
    This rarely happens with government. Failing programs (in an economic sense) sometimes get even more money to squander (see Social Security, Medicare, etc).
    All those programmes provide people with disposable income, or greater disposable income, which in theory means they can and will spend, increasing demand and circulating cash to small businesses, which are then both consumer and supplier of other businesses, right up to the pinnacle of business enterprise.

    So by that measure they work perfectly, they do what they are meant to do.

  10. #30
    Senior Member eagleseven's Avatar
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    Quote Originally Posted by Lark View Post
    See this is why I despair.

    An attempt to discuss the private and public sector in any economy, the necessarily mixed nature of any successful, modern, mass consumer economy gets derailed into discussing Communism, really? I mean really and truly?
    The economy of the USSR was the quintessential planned economy. It is impossible to seriously discuss planned economies (the only real alternative to market economies) without bringing up this obvious example.

    Really and truly.

    Quote Originally Posted by Lark View Post
    Why and how could you possibly think that citation of a literary source such as 1984 was appropriate in an serious economic discussion? Its like citing Alice In Wonderland to support arguments about earthworks or underground transport.
    You made an "Alice in Wonderland" claim, principally that consumer spending is determined by your government.

    Such a claim is ridiculous, and thus my fantastic response.

    Quote Originally Posted by Lark View Post
    There is no suggestion that the government is a single consumer or should be, only that it is, and is a massive one, capable of spending which the private sector simply IS NOT, not even in aggregate can it behave that way nor is it likely to, how are you going to get that much agreement between competitors to shift that much money without one of them trying to turn it to their competitive advantage and the whole thing seizes up.
    Why do you trust a handful of so-called elite men with the livelihood of your entire population? Tis madness!

    Quote Originally Posted by Lark View Post
    Why? Why does it logically follow? This is "Ought" not "Is" and I see absolutely no evidence to believe it would be the case at all, the poor are liable to spend on fast moving consumer goods or consumer durables but it wont matter to them whether its a tax rebate or a welfare cheque, the rich arent likely to spend it automatically on investment, especially not when the market doesnt or cant guarantee returns, ie when there is a recession or depression threatening, they are likely to save it and in doing so simply take the money out of the economy.
    Why? Because of the Law of Diminishing Marginal Utility.

    In short, the more money you have, the less you personally value it, and therefore the more risks you are willing to take with it. A poor man will not invest his rent money into a promising tech start-up (way too risky), but Warren Buffet will in a heartbeat.

    Also, how exactly do these rich people "take money out of the economy?" Are they burying it in the back yard? Even if they are sitting on government bonds, they are effectively investing in the government.

    Quote Originally Posted by Lark View Post
    Why? Why is my version not "ought" instead of "Is", well, its based upon the logical, utilitarian maximising rational decision maker paradigm of individual choice upon which the capitalist economic models are based in the first place.
    Perhaps you should read up on behavioral economics?

    Quote Originally Posted by Lark View Post
    I reckon I should stop posting about this, the comfortable rhetoric and ideology which passes for economics with most people really pisses me off.
    Asserting that only tax-funded government entities can create jobs will induce arguments with every economics student within earshot.

    Quote Originally Posted by Lark View Post
    All those programmes provide people with disposable income, or greater disposable income, which in theory means they can and will spend, increasing demand and circulating cash to small businesses, which are then both consumer and supplier of other businesses, right up to the pinnacle of business enterprise.
    For an economy to reach peak growth, it must balance the increase in capacity (investments of the wealthy) with the increase in demand (purchases of the poor).

    Arbitrarily taking money from producers and giving it to consumers (via social programs) will only create a temporarily imbalance that will slow down the entire economy...both consumers and producers will be worse-off in the long run.

    ---

    Of course, for the politician starting the social program, nobody will witness the long-term effects until he is retired in the Caribbean.

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