I’d hesitate to enter this discussion, but…

Is it not the case that Stock markets are damn near ubiquitous? A global phenomenon even?

Are they not, near as dammit, a definition of capitalism?

Dunno about Cuba right enough.

As I nearly said, I am no economist….

Ya think?

“unfortunately, the redemption tax imposed on serfs from private estates in 1861 was far more than most could afford, consequently, they had to wait until the October 1917 revolution to be freed.”

Well no because they were cancelled in 1907. But it is also irrelevant. The Serfs were freed and the landowners compensated with Government loans. The Serfs then paid the State back. Theoretically. But they were still free. The debt was owed to the State.

“Libcom is a debating site where all posts are likely to be challenged, like most commentaters I utilize concrete facts and opinion and I always attempt to check the accuracy of the facts I use, all are easily checked on google.”

Given that I have repeatedly pointed out that your facts are ahistorical delusions this is not even funny.

“When have I made any such suggestions? – you need to get a grip”

In the post numbered 37. I quote:

““Capitalism is now very much a global phenomenon, and if you look around your immediate environment you will probably be aware of masses of objects which you really don’t need.”

No they weren’t. Anything further I would have to say on this subject would violate this site’s policies. I will simply point out that all of Russia’s serfs were freed quite a while before 1917. Not merely freed but in fact rapidly acquiring all of Russia’s land for their own as the aristocracy’s control on the countryside was declining in the face of free peasant competition.

“The Russian revolution is too complicated to describe in a post, but the main catylist for it was Tsar Nicholas deliberately blocking industrialisation in order to a. hold on to absolute monarchy (all modern industrial societies had rejected an absolute monarch)”

Except he didn’t. Russia’s economy was growing rapidly under the Tsar and industrialisation was taking off. Stalin’s economic achievements were based on the ground work laid down by the Tsars.

“b. To maintain an agrarian society in order to supply the rest of Europe with grain.”

Russia being the world’s biggest grain exporter – which was greatly enriching Russia’s economy and paying for that massive industrialisation under the Tsar. An achievement that the Soviets managed to reverse in no time with their re-serfment of the peasants, the collapse of the rural economy and hence famine (which only ended once the Soviets decided to export timber and gold instead of grain and so imported food from the West).

“In fact, Russia was so far behind with technological development that the train used to ship men and supplies to the front did not have brakes. Indeed, the once invincible country (based on population), fell quickly to the German’s superior technological weapons.”

This is not even worth commenting on. Russia’s railways were not particularly advanced but this is childish fantasy. Sorry but when was Russia invincible? You mean in WW1 or in WW2? Russia was always technologically backward but it was probably less so in 1914 than in 1939 and certainly less so than in 1812.

“Capitalism is now very much a global phenomenon, and if you look around your immediate environment you will probably be aware of masses of objects which you really don’t need.”

Who the [snip] are you to decide what I do or do not need? What you mean is that poverty for the plebs is ennobling and Capitalism sucks because it gives us what we want. That is an idiotic argument.

“Meanwhile, there are others,who are part of that global system (many forced into it) who can hardly survive.”

No one who lives in a capitalist economy can hardly survive. They have so much they hardly know what to do with it. As can be seen by the fact that in the West the biggest health problem for the poor is over eating.

“The Greeks did, in fact, have markets, but this was left to the slaves.”

Why do you persist on commenting on things you know nothing about?

“So SMFS, what has capitalism produced of intrinsic value that you feel other societies lacked?”

Freedom. And my new mobile phone. And pennicilin.

Compare this with food where (A) VAT is not charged & (B) population has gone up yet food prices have not risen like that. His unadmited & wrong assumption is that it is impossible to increase the number of houses in line with population as we do with food. I am quite certain that if the state massively prevented any increase in food production (as indeed suppression of GM food shows it starting to do) prices would go up & people would be willing to become indebted rather than go without.

The state is indeed 75% of our potential economy & the wealth producing part is only 25%.

No it didn’t. It developed from a moderately industrialised country to a moderately de-industrialising country in 60 years. It is simply not true that 95% of the Russian population were peasants and the Russian economy in 1914 was producing about as much steel as the UK. By the 1970s the Soviets were producing a lot of highly skilled engineers and scientists. Who then wasted their lives doing nothing very useful. The Soviets did well in theoretical science. They did reasonably well in adapting Western weapon technology for their much poorer industrial base, but they did not do much more. They did put a man into space. But they did nothing to develop the science or even the technology of this achievement. Tsarist Russians did much of the theory. The Germans provided them a lot of the technology.

“The Greeks and Egyptians did very well with regard to knowledge, innovation and invention without the motivation of markets and profit.”

The Greeks lived in a world of markets and profit. Still, the Egyptians had a few thousand years of world domination – and produced what?

“Newton was born well before the emergence of industrial capitalism. I could go on forever citing examples.”

Yes but you would have to understand them first. Sure, Newton lived in a capitalist society and did some good theoretical work. So what?

“I have noticed that some commentators on this site have some rather delusional ideas about the superiority of industrial capitalism compared to other economic systems.”

Yes. You may notice some commentators have similar views about gravity.

The Soviets had a lot of scientists because their system could ORDER people to be scientists. Not sure what this proves. And their model of catching up relied on other, genuinely innovative capitalist societies going ahead of them. They would not have being able to invent the items that stocked their 5-year plans – they had exemplars to copy, in Britain and the US.

the 60 years of development that the USSR ‘achieved’ were amongst the most miserable that any population has ever had to endure, and not just the war years. I would not set them up as an example of how other models are superior to industrial capitalism.

@27 Praguetory, no it proves nothing like that. For this to be true, we would need some metric of value-for-money to be ‘I’ll only pay the government a lot of money if it does loads and loads of things’. This is the last thing we want it to do. We pay over money to the government largely so that it can commission things and do some redistribution: more actual involvement would be dreadful.

Umm, yes, this is really rather the point I’ve been trying to make to you.

Knowledge and invention can occur under many different systems. It’s innovation, putting those new things to use across the economy which capitalism/markets are so good at.

Which is why those of us lucky enough to have been born into roughly capitalis/market economies are so much wealthier than those who were unlucky enough not to be.

Note to lefties: the latter “benefits” are not distributive; they are about paying back money that should never have been taken away.

That’s why I’m a supporter of the negative income tax. It completely cancels out the inefficient ‘money going both ways’ system we have. Case in point. ONS’s Effect of Taxes and Benefits 07/08 shows the poorest 20% of households receive ~£32.5bn in cash benefits and pay ~£6bn in direct taxes, meaning that around a fifth of the ‘spending’ on them is just a return of tax that needn’t have been taken in the first place (no doubt less an administrative cost). Now I know the aim is to create targetted benefits so that those in most need get the most help (a cynic might say those whose votes are most sought after get the most help), but the way we have it now just invites inefficiency.

Well, maybe, but you do need to look at the other side of the ledger as well. What does it all cost everyone?

Is that list of things people get worth the taxes that are taken off them over a lifetime? Don’t forget two further things.

1) There’s a deadweight cost to taxation. Usually rated at about 20-25% of the amount raised.

2) We don’t have a very progressive taxation system. So the rich don’t pay for everything.

Well no it couldn’t be said for any major industry. Unless you can name where and when Stephenson was funded by the State. Neither Shipping nor the Railways got much support from the State when they were starting up. The American Transcontinental railway did admittedly, but the main innovation in shipping (containers) came about despite the US Government, not because of it.

It is the free market that drives innovation even if the State chucks good ideas some cash every now and then. As can be seen by the fact that the US is a great deal better at innovating than Europe which in turn is vastly better at it than the Soviet block or the Third World.

The ‘net balance’ of tax and spending at the individual level is interesting.

In a static analysis, many will be net contributors at a point in time (e.g. childless
provided they do not become ill and have a job, plus higher income people who send their kids to private school/use private health
insurance), though I suspect most are net beneficiaries.

But is this the right metric?

In a dynamic analysis, I suspect the vast majority are net beneficiaries over their
lifetime.

Everyone has access to a free birth in an NHS hospital, free education from 4-18, heavily subsidised education 18-21, a variety of benefits, tax credits and other
welfare benefits when they have dependent kids and then a state pension worth significantly more than what they put in. And of course everyone received employment insurance, health insurance and sickness insurance too, which is worth a lot of money to them. And that’s without even thinking about the 6 million Government employees, those who gain from Government foreign and business
policies and anyone in the private sector who benefits from
Government procurement.

It would be interesting to look at studies of this if anyone
knows of any.

That’s an anecdote about how government imposed standards worked in the mobile phone market. Once. If the Japanese had picked CDMA, they would have become as isolated in the mobile phone market as they are in the desktop computer market.

25+ years ago, the UK government tried to impose a set of communications standards for computers and related devices commonly known as Coloured Books. Some of us even tried to implement it. Most people have never heard of it, but they payed for its failure in taxes.

Computer manufacturers continued to use proprietary standards (Novell IPX, DecNet, AppleTalk, IBM SNA), partly noting international standards (IEEE 802.x). When all of that settled out, everyone just used TCP/IP. At the time of popular adoption (late 1980s), TCP/IP was a much more fluid standard than Coloured Books. But system administrators and network engineers liked TCP/IP more than anything else.

TCP/IP works on almost any physical layer (copper, fibre, wireless, carrier pigeons). Nobody owns it. Its effectiveness as a standard results from its universality and flexibility, not from government policy.

This distinction can be illustrated with a thought experiment. Imagine an economy – PrivateLand – in which the government ‘does’ nothing – produces no goods or services – except remove about 50% of the income of some people, and give it out to other people. Education, health, even defence are all provided privately. How the tax was gathered would affect economic incentives, but every further economic transaction takes place in a competitive marketplace.

Now consider an economy – SovietLand – where 50% of every economic activity is done by the state, paid for by taxation. The state takes tax, and uses it to provide, free, loads of groceries, clothes, iPods, holidays, financial advice, music etc that it makes itself.

Both these economies would have a 50% government-spending to GDP ratio. But PrivateLand would clearly be the most efficient.

By certain measures of efficiency that make sense in economics textbooks alone, I guess this would be true. On the other hand, it would probably be a dire place to live where inequality was an inescapable fact of life and poor people were miserable. So, y’know, swings and roundabouts.

Most of that money is delivered to people who don’t earn much at all. Some of that money — tax benefits to (predominantly) couples, housing benefit to low paid workers — is effectively a refund of tax payed by the poor employed. Note to lefties: the latter “benefits” are not distributive; they are about paying back money that should never have been taken away.

If you take those “benefits” into account, state spending becomes a tiny bit smaller.

So recently, it wasn’t anything to do with consumer debt rising to £1.4 trillion after all? And in the longer term, it had absolutely nothing to do tax breaks for home ownership or the rising population density as Britain’s population grew from c. 40 million in 1940 to 61 million now?

C’mon.

I think this unlikely: Japan does not operate on GSM and never has done. They chose an entirely different Gen 2 technology and then very quickly moved to 3G.

I agree that GSM helped telecoms in Europe. But that very experience of Japan shows that there’s also something else going on. Japan is most would say more advanced yet isn’t GSM.

“Two: China has far greater state involvement in its industries.”

Arguable. The usual story about China’s incredible growth over the past couple of decades is that, yes, they did used to have a great deal of government involvement in business. They owned and ran 100% of it in fact. Then they decided that that State owned industry….more, in fact, the State run industry, 5 year plans and all…..would be maintained at about its then current size. They didn’t want to fire hundreds of millions for fear of the social unrest.

The rest of the economy would simply be left to develop in a laissez faire manner. That private sector economy is possibly more “laissez faire” than any other economy ever.

The State economy has indeed stayed roughly as it was and the “free market” economy has been growing near exponentially.

So the Chinese economy started at 100% State and is now much less than 100% State. But more because of growth of the non-State economy than shrinkage of the State. Wikipedia tells me that the labour force of State owned industries is now some 24 million people….which if true means that there’s less direct Govt role in production than there was in hte UK in 1979.

And don’t forget that half of the remainder is purchased by Government from the private sector (IT, office supplies, waste collection etc).

Government directly produces around 10-15% of GDP.