The Power of Capitalism

wotsthat

Graham_Devon wrote: »

Referring to the UK only, I think we have to take into consideration the welfare system.

Other countries have them too, but I can't say I know enough about them to comment.

The welfare system in the UK at least is making up for low wages in the form of tax credits. It's making up for high property prices through housing benefits.

Just taking those two benefits in isolation, the UK is funding around £55bn to people in order they they can live within the UK.

Without this, how would capitalism fare in the UK? Personally, I think it would take a huge hit if we were to remove these items overnight.

On a low wage? - the market's telling you something.

House prices too high? - the market's telling you something.

Fortunately, capitalism allows us the massive luxury of being able to redistribute wealth from the listening to the deaf.

michaels

Generali wrote: »

Specifically?

You've been rather busted for making unsubstantiated statements. The Industrial Revolution started in the UK (England then Scotland) and moved to the USA.

Specifically what did the state do in those places that:

1. It hadn't done before
2. On an ex ante basis was designed to produce a surge in per capita GDP growth from ~0% as had been the case for ~10,000 years to ~1% and upwards from there?

I would suggest (as an economist and economic historian) that the answer for the questions combined was, on an ex ante basis don't forget, precisely nothing.

I think universal education might be somethign that results in faster growth and is provided by the state more quickly than by the market?

Generali

michaels wrote: »

I think universal education might be somethign that results in faster growth and is provided by the state more quickly than by the market?

Yes it does. However I don't think that, ex ante, was the change in England in the period after 1750 that ushered in the Industrial Revolution.

Graham_Devon

wotsthat wrote: »

On a low wage? - the market's telling you something.

House prices too high? - the market's telling you something.

Fortunately, capitalism allows us the massive luxury of being able to redistribute wealth from the listening to the deaf.

Sorry, what's it telling you?

Presumably you are going to say "to train, get better paying jobs". I.e. it's the fault of the lower educated or those with children to look after, those who care for the elederly or disabled. They are the problem as they should be working more or training.

The consistent problem with this stance though is something called reality. For a fully functioning society we need bus drivers, cleaners, carers, shop assistants. We need an upbringing.

If that can only be achieved in a capitalist system in the UK which requires top ups from the state to all these key individuals, is capitalism really working?

To answer that question, remove in work benefits, housing benefit overnight. Hell, if capitalism is so great, remove QE with immediate effect. Ask for the bank bailouts back with immediate effect. Would our current financial capitalist systems still be standing within a month?

gadgetmind

michaels wrote: »

I think universal education might be somethign that results in faster growth and is provided by the state more quickly than by the market?

What's interesting are that many of those presented with universal education, free at the point of use, don't really make the best of it. Those who have to pay for it tend to value it more.

Don't get me wrong, I do think education should be free, but I also wish we don't have so many people in the UK who clearly paid zero attention at school, and therefore don't have the qualifications for anything other than unskilled work.

Generali

Graham_Devon wrote: »

Sorry, what's it telling you?

Presumably you are going to say "to train, get better paying jobs". I.e. it's the fault of the lower educated or those with children to look after, those who care for the elederly or disabled. They are the problem as they should be working more or training.

The consistent problem with this stance though is something called reality. For a fully functioning society we need bus drivers, cleaners, carers, shop assistants. We need an upbringing.

If that can only be achieved in a capitalist system in the UK which requires top ups from the state to all these key individuals, is capitalism really working?

To answer that question, remove in work benefits, housing benefit overnight. Hell, if capitalism is so great, remove QE with immediate effect. Ask for the bank bailouts back with immediate effect. Would our current financial capitalist systems still be standing within a month?

Thankfully everyone in the UK was taken out of extreme poverty (income of less than $1.90/day) a very long time ago. Even beggars make more than that.

There are a handful of exceptions I expect being people with very severe mental illnesses that refuse all help. I hope we can improve their lot eventually but this really is amazing news from the World Bank.

cells

Generali wrote: »

Specifically?

You've been rather busted for making unsubstantiated statements. The Industrial Revolution started in the UK (England then Scotland) and moved to the USA.

Specifically what did the state do in those places that:

1. It hadn't done before
2. On an ex ante basis was designed to produce a surge in per capita GDP growth from ~0% as had been the case for ~10,000 years to ~1% and upwards from there?

I would suggest (as an economist and economic historian) that the answer for the questions combined was, on an ex ante basis don't forget, precisely nothing.

What's lacking in those dollar a day nations where there is no state red tape and you can buy and sell anything?
Why hasn't the power of capatilism worked there?

I think the two biggest economic enablers were roads and national grids. I assume most of them were state commissioned are you saying they weren't?

Conrad

kabayiri wrote: »

We should also remember that the globalisation project is really an experiment which should be measured over a few generations.

It's pretty much undeniable that there were millions of Chinese peasants with a very poor life working the fields of China.


At what point do they realise they are getting the runt end of the deal? !

They already knew it years ago and some of them complained jobs were being outsourced to cheaper Vietnam.


Post war Japan went through this same process, it's the age old reality of industrialisation.


In time income disparity between nations will reduce.


I always look to my own bargain hunting instincts to understand why some people are paid less. I do not blame capitalism or nasty capitalists, that would be merely hiding my own role from myself.


If we truly believe in wanting workers to be paid well all of us would stop seeking best value and instead make consumption choices based around workers needs. MSE would be defunct.

Conrad

cells wrote: »

What's lacking in those dollar a day nations where there is no state red tape and you can buy and sell anything?
Why hasn't the power of capatilism worked there?

Some of these states have been slow to develop but this has nothing to do with capitalism, it's to do with lack security, insufficient rule of law, poor contract law, ownership insecurity, chaotic governance and corruption.


This is why aid is often a disaster as it allows ineffectual governance to persist (the aid cheques mask lack of proper governance and leadership).

Generali

cells wrote: »

What's lacking in those dollar a day nations where there is no state red tape and you can buy and sell anything?
Why hasn't the power of capatilism worked there?

I think the two biggest economic enablers were roads and national grids. I assume most of them were state commissioned are you saying they weren't?

The main things that are missing are:

- Rule of law
- Access to other markets making trade difficult (most dollar-a-day countries/regions are land locked)
- Education, especially of women
- Capital markets

Communications during the Industrial Revolution period were generally provided privately. The turnpike roads for example were private trusts that were enabled to exist by Act of Parliament (because in those days you couldn't simply set up a company). Later on the canals and railways were built privately by people seeking to make a profit.