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  1. #11

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    Well what you've described has happened globally, blaming the mixed economy or government has happened globally too, you could as easily have posted the same topic and said it was the UK or US and given examples of how property is unaffordable for the average citizen but available to the investor class.

    In the UK the city and old money have about as much power as kings and priests used to before the liberal revolutions.

  2. #12
    Alexander the Terrible yenom's Avatar
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    Quote Originally Posted by Antisocial one View Post
    You never lived in a socialistic country did you ?
    China is not a socialist country.

    A great example of market failure and misallocation of resources.
    The fear of poverty turns people into slaves of money.

    "In this Caesar there are many Mariuses"~Sulla

    Conquer your inner demons first before you conquer the world.

  3. #13
    The Eighth Colour Octarine's Avatar
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    Quote Originally Posted by Lark View Post
    Well what you've described has happened globally, blaming the mixed economy or government has happened globally too, you could as easily have posted the same topic and said it was the UK or US and given examples of how property is unaffordable for the average citizen but available to the investor class.
    Which large shopping malls in the UK/US have been completely empty for the last 5 years?

    The difference is one of scale. When investors make mistakes on a large scale (eg large corporations, the government), the consequences are larger.

    Quote Originally Posted by yenom View Post
    A great example of market failure and misallocation of resources.
    But it was the government who allocated these resources and did much of the planning!?!

  4. #14
    Alexander the Terrible yenom's Avatar
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    Quote Originally Posted by Catbert View Post


    But it was the government who allocated these resources and did much of the planning!?!
    It is as much a capitalist phenomenon as a socialist phenomenon.

    Obviously there is a high demand for housing, for the government to make such a move. But the government overestimated the demand, resulting construction of hundreds of ghost towns. Demand for investment is still demand.

    And there is the matter of whether the houses are sold or not. Lets say they are all sold, it still means there is demand for them, even though no one lives in them.

    It is a capitalist phenomenon because people use houses as investment vehicles, rather than as places to live, and property firms are responding to such artificial demands.
    The fear of poverty turns people into slaves of money.

    "In this Caesar there are many Mariuses"~Sulla

    Conquer your inner demons first before you conquer the world.

  5. #15
    The Eighth Colour Octarine's Avatar
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    Ok, I think the difference is that I no longer divide economic planning into dichotomous 'capitalist' or 'socialist' categories (since both are inherently entwined). For me the essential considerations are the scale, and the computational process involved (eg the selection and scope of informational gathering as well as how this information is processed).

    The part that most interests me about this phenomena is not necessarily the capitalist vs socialist aspect, but the aspect of scale.

  6. #16
    Alexander the Terrible yenom's Avatar
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    Well they didn't build it in closely (densely) populated areas where there is a very high demand for housing? I assume, thats one mistake.

    The housing are built for the rich as investment veichles rather than for people who can afford it. Thats another mistake

    There is not sufficient market research regarding where to build these houses, and what class of customers (poor rich, middle?) these houses are directed for, thats the third mistake.
    The fear of poverty turns people into slaves of money.

    "In this Caesar there are many Mariuses"~Sulla

    Conquer your inner demons first before you conquer the world.

  7. #17
    Alexander the Terrible yenom's Avatar
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    There is also the question of effective demand (demand measured by the amount of money chasing the product) and real demand (which is what people really need including the poor but can't afford). Real demand is often ignored in capitalist economies because serving real demand (demand of the poor) doesn't allign with the goal of profit maximization.

    So yes it is a market failure of capitalism.
    The fear of poverty turns people into slaves of money.

    "In this Caesar there are many Mariuses"~Sulla

    Conquer your inner demons first before you conquer the world.

  8. #18
    The Eighth Colour Octarine's Avatar
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    "market failure of capitalism" doesn't really capture the whole problem for me. Yes it is a market failure, but we have to ask questions about the actual decision making processes. We know for example, that there is an emerging capitalist class in China. Which, due to is magnitude has a substantial amount of wealth, but the government severely constrains the choices in which this capital can be invested in. In addition, the government has implemented a variety of policies favourable for property investment, from tax advantages, banking policies and so forth.

    In the long term, effective demand has to approach real demand. I agree that the reason why it doesn't in the short term is poor decision making on a societal scale (and obviously in a capitalist economy, this is dominated by a certain class).

    In terms of specific decisions, there is also a glut of high price housing in the big cities as well so it is not merely a function of location. I think in a more general sense, the real mistake is implementing a one size fits all approach to planning on a massive scale.

    The investors are now drying up and it is going to lead to serious problems.

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    Markets tend to warp, when someone is trying to force it do something

  10. #20

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    Quote Originally Posted by Catbert View Post
    Which large shopping malls in the UK/US have been completely empty for the last 5 years?

    The difference is one of scale. When investors make mistakes on a large scale (eg large corporations, the government), the consequences are larger.

    But it was the government who allocated these resources and did much of the planning!?!
    I dont know of any shopping malls but I do know of many ghost towns in the Republic of Ireland, I know that the government in the UK is considering massive cuts to housing benefits which will effectively result in populations being compelled to move en masse out of the south of england because of problems with the housing market similar those which have caused the over supply elsewhere.

    The reality is that it is a market failure, its not a government failure and what are you going to do? Seriously? Its all very well musing about this or that utopian capitalist vision about how all this wouldnt have happened in the days of the founding fathers but the Chinese model of capitalism, state capitalism, is probably going to be the future paradigm for the world, it is the most satisfactory to the neo-liberal corporations and investor class, which is ascendent globally, so its going to be the future.

    This is being spun as a problem with mixed economies, that's propaganda, its state capitalism which is practiced in China, any mixing which exists is pretty minor, its the inversion of the "mixed economy" of the UK and US, in which there is very little state services but enough to permit libertarians and neo-liberals to complain and scape goat them for the failings of the economy.

    In reality a mixed economy would require an acknowledgement that there are things the state does best, or at least better, than the market and there are other things which the market does best or at least better, that there are limits to private profits and private enterprise and likewise limits to state intervention and state delivery of services. There should be an adjustment of expectations of both state and market all around so that no one is deifying or demonising either and a sense of proportionality prevails. I seriously struggle to think of a country today in which that could be said to be the case, and I'm talking in a sense in terms of objective economics and practical pragmatism not ideological rigidity which most people prefer because its simpler.

    There are cultural consequences to villifying and valourising state or marketplace in such a black and white fashion which I think havent been properly evaluated at all, or are yet to seriously hit home, and not simply in terms of the possibility of disillusionment on the part of those who put the greatest store or hope in one or the other straight and simple economic model.

    In an ideologically free market centric country the public sector will experience a brain drain to the private sector, both sectors will probably conform to the worst expectations of government or know that in any case they can rely on it as a source to scapegoat. In an ideologically statist country, few of which really and truly exist any longer, a failure can be expected not simply because of inefficiency or internal contradictions but because of tyranny, no one is willing to tell the truth to their superiors. That much should be known from recent history or the history of the USSR and its sattellite regimes.

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