Interesting
"Russia is not capitolist, no matter what economists may say. "
... 1985 Perestroika? ...
I never said it worked, but the model is in place and hence a capital economy is in place - and it is working better than the inflation of the communist state (as inflation was considered a capitalist phenomenon the commies could not control it). The fact that Russians cannot procure loans is due to poor savings. Russia needs to increase revenues on Vodka (inelastic good) as cheap alcohol reduces productivity (Poland is another example). As for Czech rep. the quality export glass manufacturing helped restore its economy, not to mention the Swiss investment in the country. South Africa has experienced high inflation... It is expected that the monetary policy will slow growth before a recovery is witnessed.
"I don't understand this. Care to explain?"
Jeremy Benthams formula for total utility dictates that each individual maximises his or her individual utility for goods. This basically means that some goods must be provided by the state while others can be provided by the market.
The best example is a fire works demonstration... If Jack enjoys fireworks more than Jill then he will demand x1 for fire works while Jill, only x0. Despite the fact that Jill demand less fireworks per year than Jack, it does not mean she still won't see them. Now, if each person paid for fireworks in the economy, based on demand, then Jack would purchase at, hypothetically, at q3 while Jill at q1. However, everyone derives the same utility from fireworks as you can see them at 10m to about 2km!!! This means that Jack pays more per unit than does Jill!
So what is the outcome in a pure market economy? The answer is stagnation - As Jack will forgo fireworks just to equilibrate his schedule into line with Jills - the outcome is that nobody gets the fireworks display. However, if there is a tax funded body i.e. the state, it can work out the level of demand and provide the fireworks as a deficit of public finance. This also applies to roads, schools, parks, bridges! e.g. why would someone who doesn’t drive "personally" fund a road OR why would non university students fund education? The individual seeks to optimise their utility - So they purchase what they want, while the state delivers the products we need.
As an aside, in the USA, the railroad industry was deregulated in the 1800's - the result was many providers for railroad to New York (more profit) and NO railroads to country regions. This was absurd as many tracks actually ran along side one another - when ONE road would have sufficed, that is to say, why does a country need 5 tracks going to one place. One main track leading to all the regions would be tenfold more productive! Even if many places did not yield immediate returns. Australia observed market deregulation and decided that the government could provide railroads more efficiently than the market... Having said this, the rightly government in power here is shutting down many tracks due to "economic rationale".
"And as for the cease of production, I don't understand your point."
Ok, If I can have ALL of my basic good provided for me... My real income will increase due to the "substitution effect". What this means is that I can consume more of other goods. In theory this would increase production, but in reality as peoples wages increase they do less work! The labour function dictates: That an increase in wage, ceterius paribus, will increase the marginal propensity to consume. This means that people consume more leisure and work less. To draw close to home... If I gave you all you food and health care for free, would you have more money to spend "going out" and partying and drinking the very best wines...The answer would be yes.
"Yet, the main essence of communism is the lack of state. I seriously find no relationship between that and Stalin."
Stalin was not the only questionable man, Lenin was quoted "you have to break a few eggs to make an omelette" - These are hardly the inspired words.
"Unless of course, there is an alternative way of organization"
I do not think so... bees have a queen, Wolves have the pack leader and Humans today have the "Mercantilist politician/ egg blown regent" (in the west anyhow, but I think Nepal was the last true traditional monarchy so it may be world wide). If we step down to communism we won’t even have a leader. Lao Tsu wrote; Heaven follows the Tao, Nature follows Heaven but Man has ceased to follow nature... Clearly, we see a correlation between trends in politics and our movement from order toward chaos. Men like all other thing need hierarchy, and as Plato demonstrated the philosophic king is the best leader... the other ages of disorder follow. At present humans are in Plato's Bronze (merchant) age. Japan was in the silver until WW2, Nepal in the Gold until the massacre incident.
Das Kapital serves a criticism of capitalism more than a guide to establishing the communist state. Marx makes good argument against the exploitation seen particularly in the industrial period, but, as Simon Kuznets showed with the inverted U distribution that living stands rose above and beyond anything humans have witnessed prior to capitalism…But only after the welfare state was established. Living standard dropped in Britain in 1780’s as people left the farms and headed to the factories. Today, capitalism is quite “tame” and many unionists and neo-liberalists (neo-marxists) like the idea of a market that has good social provisions – as they concede that most jobs would disappear without the capital investment of the dreaded Bourgeoisies and the population would dramatically decrease due to starvation.
May I ask how much influence King Juan Carlos I, has in your country
Originally Posted by Besimudo
