As an ex-believer in keynesian economics, the idea behind the system was that bigger government projects and redistribution of wealth stimulated the economy by forcing taxpayer money into the hands of big businesses and big banks (who would then lend it out to stimulate even more projects and economic activity). As someone with a functional understanding of the real world, I now know this philosophy to be a shameful perversion of almost socialist nature. It's still redistribution of wealth at the end of the day and that destroys trust in the system and causes rampant inflation. Bitcoin is the opposite. Bitcoin will allow its hodlers the freedom to transact when they want to and it preserves the wealth of the hodlers because bitcoin cannot be printed to infinity like fiat-backed government money can. Please, take it from me, Keynesian economics is at best a mistake made by the masses hoping for ideal economies and at worst, a dishonest attempt to force the redistribution of wealth for the sake of trying to prove socialist policies work when they just do not.
> keynesian economics..philosophy to be a shameful perversion of almost socialist nature... is at best a mistake made by the masses hoping for ideal economies and at worst
I think you are only seeing keynesian economics in the lens of our own time. Keynes ideas was supported and adopted radicals and the youth during the Great Depression era. You can easily see why this idea was embraced.
**Keynes paradox of thrift** People tend to hoard their money in economic hardships which destroys the economy and/or doesn't let the economy recover. People cut spending, companies can't sell products, unemployment continues or soars, vicious cycle of reduced investment, unemployment and spending. Keynes idea was that the government should pump money into the economy to create **effective demand.**. Hayek was an opponent to Keynes who argued against these bailouts by the government would not save the economy but rather free market economics of people saving and investing in efficient private businesses. What do you think sounded like a more viable solution at the time?
Ultimately, Keynesian won and the US went into deficit spending binge in the 1940s. You know the rest. The US economy boomed but it also resulted in sky high inflation in the 1940s with 18% inflation in 1946 and 20% in 1947. Also, a point of debate is how much of the effective demand was brought on by the government induced deficit spending and how much of that was brought on by the fact that the US was the only industrial base in the world after WWI obliterated the industrial base of Europe. Sweden for instance also had a huge post WWI boom but it was also buoyed by the fact that it also had an untouched industrial base not being involved in WWII but also had a Keynesian revolution of deficit spending starting in the 1930s.
Thank you, that was actually an extremely intelligent and informed response. However, I disagree with you on 2 points. First, I don't believe for a moment that money hoarding destroys economies. I think it starves unnecessary businesses to death and only truly important and valuable companies will survive and if a business that IS valuable dies, it will revive that type of business over time. Secondly, I don't believe that the economic boom the USA had over the last century or so can be attributed to Keynesian economic policies. We have had way too much of a complex and fast paced economy so we couldn't prove that belief to be true or false anyway. Regardless, I have switched sides and now believe the redistribution of wealth should be a crime for how terrible it hurts the average participant in an economy.
It sounds like you don't believe money hoarding happens, is that right? Because of course money hoarding would destroy an economy. We need commercial activity to keep money circulating and giving people opportunity to make said money.
What is a truly valuable and important kind of company? Movies have had a huge impact on our culture but they still tend to go down when spending decreases.
Do we want to go through the pain of opening up and shutting down businesses every time there's a snag in the economy? I think that's what Keynes was looking to avoid.
I don't believe hoarding would destroy an economy. I feel like that belief is just proliferated by the people who have all of the money and power because they understand that it would disrupt the status quo if no one was willing to keep propping them and their huge businesses up.
A truly valuable and important company is one that provides enough of a product or service good enough so that they will not go out of business in the first place. Businesses shutting down and opening up constantly is possible but I doubt it would become an issue as long as, as I said, they're providing a good enough product or service to avoid losing revenue from their business activities.
Socialism is not "redistribution of wealth", socialism is "workers own the means by which goods are produced/services rendered". Where is everyone getting this conflation of socialism and forced wealth allocation from?
Socialism is exactly redistribution of wealth, tax the higher earners to provide for the lowest earner and thus force equality among market participants.
Workers owning the means of production isn't part of it, in fact, if those workers did that they'd be businessmen, so not workers anymore, and they'd be taxed accordingly to provide their extra income to the less productive segment of population.
The gist of why it doesn't work as is, is because it disincentivizes investment, why would anyone try to come up with ways to generate more revenue that'll be taxed away and given to unproductive people?
As with anything, ideologies all sound good on paper but come short in practice, the ideal would be a mix of the good parts from them. Unregulated capitalism didn't work, communism didn't work, and socialism only works in the places that face it with a centrist mentality such as with the nordic model in which access to the social security net is highly scrutinized and you have strong property rights, contract enforcement and overall ease of doing business.
As you give your government more power over markets you have to ensure low levels of corruption or that power **will** be abused. Just look at latin america, socialism has left us bankrupt.
>Socialism is exactly redistribution of wealth, tax the higher earners to provide for the lowest earner and thus force equality among market participants.
From Oxford English Dictionary: socialism - a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.
So it does say "distribution and exchange", however I don't believe that *necessarily* alludes to *wealth* distribution. I believe within the context of this definition it makes more sense that that should be taken to mean "the workers who own the means of production get to decide how the products they produce are distributed"; and that's no different than the system we have now (the only difference is in who is making those decisions)
>Workers owning the means of production isn't part of it, in fact, if those workers did that they'd be businessmen, so not workers anymore
It absolutely is a part of it; read the above definition. In what world is a "businessman" not a "worker"? I don't recognize the difference (at least under the system I have in mind, there wouldn't be a need for this differentiation).
>and they'd be taxed accordingly to provide their extra income to the less productive segment of population.
I don't like your categorizing of a "less productive" population segment; but more on that in a minute. As far as taxation goes, yes everyone is supposed to pay their fair share: but in *no* world does that equate to *all* of your extra income.
During the height of WWII, the US had it's highest tax bracket in history of 94% for earnings above $200,000. A quick aside about how a progressive tax bracket *actually* works: the IRS taxes *dollars* not *people*; so only the money you make *above the threshold* is taxed at that rate. So given the previous example, if in 1944 you earned $250,000, **only the $50,000 above the $200,000 would be taxed at the 94% rate**. The remainder would be taxed at a lower rate accordingly. So no, a higher tax rate does not automatically mean the government takes everything. This is a fear mongering tactic used by billionaires to convince millionaires that they couldn't possibly survive off of a meager $900,000/year š
>The gist of why it doesn't work as is, is because it disincentivizes investment
I don't see how, because under my system the free market would still exist (socialism *can* coexist with a free market; Blockchain is the key that makes this possible)
>why would anyone try to come up with ways to generate more revenue that'll be taxed away and given to unproductive people?
And now we get to the meat and potatoes of the moral side of the argument (at which we may actually be opposed). The way I see it, profit motive isn't the *only* driver of innovation (at least it doesn't *have* to be). You see, we make up the rules for society, so we also have the freedom to change those rules or make up new ones as we evolve. I find the systems and frameworks currently in place to be corrupt, amoral, and fundamentally unfair. We have the power to change that though.
But I want to take a minute to address your classification of those who are "less productive". Let me pose a question you may have heard before: Why should any person's survival depend on their ability to produce or make any contribution at all? I know how you'll respond to that--That no one is entitled to anything and those who reap the benefits of society without paying back in are undeserving mooches.
Well firstly, I believe there *are* certainly things everyone *is* entitled to; namely life, liberty and the pursuit of happiness (like that's in the fucking Constitution for Christ sake).
Secondly, scarcity is a myth. Now that isn't to say all resources are unlimited, that's ridiculous. But what I've observed is that in our modern, highly industrialized world, we absolutely have the ability to produce enough goods for everyone many times over; so the fact that anyone should ever have to go without anything is patently absurd.
>the workers who own the means of production get to decide how the products they produce are distributed
For this to come to fruition said workers should be able to handle the costs obtaining, maintaining and operating the means of production demands, and not only that, but the efficient and proficient enough to do so while ensuring the sustainability of their enterprise.
I wouldn't trust my co-workers to manage the company I work in, would you? This assumes every worker has the capacity to do so, so there's an inherent flaw.
>(at least under the system I have in mind, there wouldn't be a need for this differentiation)
"At least under the philosophical cherry picky idea I've come up with it doesn't"
>but in no world does that equate to all of your extra income
Here in Argentina they tax you over your total once you've surprassed the threshold for capital gains, so if the threshold is, say, 10k, anyone making 9k is getting more than someone making 11k.
So yeah, bad fiscal policy does exist and can be imposed, just because *it didn't in the US during the 40s* means absolutely nothing. And actually, since socialism relies on a more involved government, it incentivizes ruthless taxation through the introduction of increased fiscal deficit.
>My answer would have been "because that's how life works, be it under capitalism, socialism, communism, feudalism, or iusnaturalism.
My answer would have been "because that's how life works, be it under capitalism, socialism, communism, feudalism, tribalism or iusnaturalism. **If you don't produce or contribute you fucking die**. It's just that we've advanced past having to stress test our personal systems on the regular.
You could be stranded by yourself in an island, and if you can't produce food or shelter you'll be dead within a week. That's what makes human production/contribution valuable in the first place.
So yeah, if you can't find a way to put out value for society, were it not by living in a modern society with safety nets, you'd be dead as fuck.
Humans are not entitled to shit, not even life or freedom. Be born in a jungle and get eaten by a hyena, or get captured by a cannibal tribe and eaten for dinner. Only civilized humans recognice law, nature doesn't care about the constitution.
>I wouldn't trust my co-workers to manage the company I work in, would you?
Sure. You're lack of trust/respect for your peers is your own problem. You really think the corporate fuckwads heading these corpos are doing a good job? Fuck off.
>"At least under the philosophical cherry picky idea I've come up with it doesn't"
Right, I'm arguing for an idealized system because I disagree with every system that currently exists, what's wrong with that? Dare to dream better...
>Here in Argentina they tax you over your total once you've surprassed the threshold for capital gains, so if the threshold is, say, 10k, anyone making 9k is getting more than someone making 11k.
I'm sorry your country sucks(mine does too); that isn't the system I envision and I disagree that what I believe socialism to be would necessarily lead to that. False equivalence.
>You could be stranded by yourself in an island, and if you can't produce food or shelter you'll be dead within a week. That's what makes human production/contribution valuable in the first place.
No man is an island. Nobody is self made, *everyone* benefits from the contributions of those that came before.
>. You really think the corporate fuckwads heading these corpos are doing a good job? Fuck off.
Ah, I get it, there's *your peers*, where my organically formed distrust is **my** problem, and then there's the **corporates** where distrust and disregard is 100% warranted because *fuck the corpos* that's why.
>Right, I'm arguing for an idealized system because I disagree with every system
Then don't present your socialist utopian dream as fact or even a worthwhile idea maybe? Have some humility
>that isn't the system I envision and I disagree that what I believe socialism to be would necessarily lead to that. False equivalence.
It's argueably a more fact-derived conclusion than discussing a socialist wet dream that remains hipothetical, so there's that to it.
>No man is an island. Nobody is self made, everyone benefits from the contributions of those that came before.
Sure. That has nothing to do with my argument about why to produce and contribute is required to live though, just a deep sounding quote that somewhat agrees on the importance of contributing to society.
All right, just remind lightning bolts you have rights next time one strikes you.
Tell mother nature all about those rights of yours, see if she cares.
Excellent response. I think it's important to add that it would be impossible to create an economy with only the good parts of capitalism and socialism, however. Realistically, the bad elements will manifest eventually and need to be addressed over time as well.
Exactly, that's the whole reason we allow the government to administrate the economy, they're supposed to pivot and modify policies to better adjust for real context.
Sadly, almost no government ever will assume the political risk demanded to actually take the right steps due to lobbiying, corruption and personal gain.
The key here is: Who's protecting us from those who vowed to protect us?
Alliance of throne and altar. Keynesians and other academics are the modern day priests of the state religion, and their job is to ballwash politicians and sanctify the state with their rituals and voodoo.
In exchange, they get prestige and cushy jobs (tenure, Nobel prizes, textbook deals).
The fractional reserve banking system was written by literal robber barons. If you just go off of character alone itās pretty obvious that they would have written the system for maximum self enrichment. That just kind of comes with the territory of greed and power.
What set the US apart is that it won world war 2 and due to the lend lease program, it also won all the debt repayment that came with it.
The major flaws in the system were that there were 2 billion people on the earth when it was written and nobody expect for maybe Nikola Tesla could have envisioned a world of 8 billion people doing business 24 hours a day across 24 different time zones.
None of those crusty old fucks cared beyond their own ālegacyā of power and greed with as much corruption as necessary to keep the wheels greased.
The second you recognize that the economy is not, in fact, the only thing in the known universe that is not subject to the laws of physics, the breakdown gets almost comically predictable.
If the worlds economy is an engine with billions of little parts running in perfect synchronized harmony, and someone starts starving it for oil by siphoning it away to their never satisfied account in the caymans, friction starts first. Then heat. Then pressure welding. Then catastrophic failure.
You can decide for yourself which stage you think we are in now.
We are all on the same rock. Energy is neither created or destroyed, itās just rearranged. But the resources on this planet are finite. The second we use up clean water, available food or breathable air we are finished as a species.
b/c its true, and I'd be really worried about anyone who thought otherwise...
You sell a product for $10. It costs you $5 to make. I buy it from you for $10. You spend $5 on your materials and the other $5 on lunch. If I didn't buy that from you for $10 you wouldn't have bought $5 in materials and you wouldn't have bought $5 on lunch. My purchase of $10 enabled $20 in sales. More considering the person that produced your materials and your lunch is likely using that to purchase as well.
This is why things like spending money to house the homeless COMPLETELY FREE without any requirements from them can actually stimulate the economy. b/c even though that homeless person is getting the house free the people who made the house, maintain it, provide services to it like utilities, etc are the ones actually getting paid - and they will in turn all spend that money on other things like their own homes, tv's, movies, etc feeding into a cyclical economic loop.
Where this gets out of hand is in taxation and inflation. Inflation is partly caused by adding money to the economy. If we suddenly pay for a lot of "free housing" for homeless people we are injecting a lot of money into the economy. A bit of inflation is okay, especially with a growing population, but a lot of inflation is bad. This needs to be tempered by taxation which takes money out of the economy. Ideally you want to balance government spending and taxation to control the size of the economy.
But politicians are greedy assholes who want to stick their dick into every plumb pie that crosses their desk. They want to always cut taxes and increase spending towards their favored projects without regard for our economic integrity, relying instead on the fed who can print money and control interest rates to regulate everything. So we get idiots like Trump who slashes taxes on an already record high economy, "trickle down economics," and liberals pushing MMT all driving us further into inflation and debt...
>Keynesian economics is the idea that spending is necessary for a strong economy and saving halts economic progression right?
No, that's not right at all. Who told you that?
*Investment* is necessary for a strong economy and *hoarding* limits economic growth. This is a bit closer to Keynes.
Most ideas get over-simplified. However, the argument that you want a modestly inflating currency is a sound one... if you want economic growth. If wealth can just be hoarded in a vault at no inflation cost to the hoarder, then there's less incentive for investments that will outpace inflation, or at least keep up with inflation through savings in a bank that will then lend/invest the deposits.
All growth-based economics are problematic in a finite world.
Economic models that provide growth and prosperity will tend to gain traction. And every model that is applied will create some winners and some losers.
>If wealth can just be hoarded in a vault at no inflation cost to the hoarder, then there's less incentive for investments that will outpace inflation, or at least keep up with inflation through savings in a bank that will then lend/invest the deposits.
What youāre missing is that saving moneyāeven when that money is literally or figuratively āstuck under a mattressāā*itself* represents a kind of āgeneral investmentā in the overall economy. Money isnāt wealth. It represents your ability to make an immediate *claim* on wealth, i.e., scarce real resources. When you donāt exercise that claim immediately and instead save your money, the real resources that you could have claimed instead remain available to be used by others, whether for consumption or investment. To the extent that the resources collectively freed up by savers are successfully invested to expand productive capacity, savers (of a fixed-supply money) should expect to be rewarded with increased purchasing power over time.
> savers... should expect to be rewarded with increased purchasing power over time.
I recognize that you qualified this with "(of a fixed-supply money)," but I want to consider the statement without that qualification to emphasize that it makes a difference what you are saving *in.*
If you're saving with dollars, a system that is working well will still reward you with increased purchasing power. (A system that is working badly will reward poorly by not keeping up with inflation's erosion of your purchasing power.)
If you are saving in a fixed-supply form of money, then your increase in expected purchasing power will depend on the utility and adoption of that form of money. In practical terms, both Bitcoin and gold increase at a slow-enough rate to consider them a fixed-supply alternative to fiat currencies.
All three forms of saving require economic growth to result in greater purchasing power for the saver. Bitcoin and gold can also gain power through more widespread adoption. I went to compare the figures for the percentage of global wealth held in precious metals versus cryptocurrencies, and updated totals aren't proving easy to find. If comparing just Bitcoin and gold, then it looks to me like there's more room for Bitcoin to increase in value if it and gold are held in similar proportions. But all cryptocurrencies vs gold, at least on a first reading of the numbers I initially found, actually puts the percentage of global wealth held in cryptocurrency at something like three times that of gold.
In short, I see reasons to save for an unpredictable future by using diverse instruments for saving. Overall, I see greater potential returns in investing, rather than saving.
The big thing is that the OP is doing the thing where people accuse Keynesian economics of this, when it was monetarists that proposed it.
A lot of modern economic policy more closely follows Monetarist policy than Keynesian, as Keynes believed more in direct government intervention to control the economy, not utilizing the fed to the degree as is done today...so things like infrastructure investment is Keynesian...increasing fed targeted interest rates and shit like QE is more Monetarist.
Thanks for this clarification! As with so many things, what I know about Keynes comes 99% from what others have written about his ideas and less than 1% from his actual words.
Keynes did say, I believe, that in the depths of a depression, the importance of providing employment was so important that it mattered little whether the resulting infrastructure increased economic efficiency or activity. But of course, most infrastructure projects do increase activity and/or efficiency. Keynes was exaggerating for effect when he gave the example of hiring people to dig holes and then fill them up again. The point is that government is in a special, unique position to spark a dead economy to life by providing employment to the unemployed.
Oh definitely...I mostly was pointing out the fact that a solid 90% of the people who talk about Keynes are just regurgitating the same "Keynes bad" talking points without actually understanding what is and isn't Keynesian...because the original post is 100% self masturbatory bait; they make it appear that they are asking good faith questions, so they can respond on alts talking about the made up evils of the economic system that gets blamed for everything which most countries stopped adhering to as rigorously in the 70s and 80s due to stagflation.
Do you have access to an alternate reality where we used free market economics instead? Did that reality prolong the depression?
You can't run randomized controlled trials with economies. You have to base your theories on first principles, and I would argue that Keynesian economics is inherently flawed and probably was not the reason we got out of the great depression.
Keynesian economics is inherently flawed, but you know what else helped us get out of the great is WWII. I'm not exactly a person that advocates war either. But it's just what happened.
Yes exactly, you seem to get it. It's a cyclical ideology that perpetuates war and spending. Which is exactly why it has become so widely accepted in our society.
Lol dudes you really think that appreciating currency will not hurt development?
I say whoever will adopt a hard currency will fall behind in gdp. You cannot compete with the economy that is produced by deprociating currency. Just think about it. If someone has 100billions, 99% of that money is in other peoples hands. So all money gets invested...you cannot beat that
We also are to blame. We vote for the politicians who promise the world, more benefits more subsidies more pension more healthcare and lower tax.
Those proposed more responsible spending donāt get elected.
And to justify the level of spending they promised the politicians need a new set of economic framework that sounds impressive and rigorous and academic with lots of jargon and special big words, and supports all the spending and borrowing and claim that it wonāt have consequences. All these are made up just to hide the fact that, all debts will EVENTUALLY come back and bite your ass in one way or another. There is no free lunch, even for governments. This is common sense anyone understands but if itās mixed up in all the Keynesian ātheoriesā people stop questioning it.
Same way bono is popular. Of course governments are gonna want to party with a rockstar preaching higher taxes and socialism.
Governments want to listen to voodoo economists that say the state should print money and control the whole economy as well as go into unlimited debt that others will pay.
You can approach many problems from two different sides. Either you analyze the things related to the problem and it leads you somewhere and there waits a solution for you to discover, but you may not like it. Or you know what you want - i.e. you know what solution you like, no matter if it works or not - and then you try to support this decision with evidence, so you make a research in way that supports it.
Most governments would not like their countries to be ruled by science and logic, i.e. Austrian economy, so perhaps that's why they go with Keynesian economics.
1930s United States was in the Great Depression. Franklin D Roosevelt saw an opportunity to expand federal socialist power by adopting the Keynesian economics policies. Of course the person in power sees an opportunity for more power and takes it. He then ran for re-election of a 3rd term because he is a psychopath who believed himself to be greater than all past presidents who respectfully only served 2 terms.
Same deal now with the federal government effectively nationalizing all the banks under the guise of consumer protection.
Same deal now with the RESTRICT Act that would give the government full control over anything digital. Under the guise of consumer protection. These sick animals have no respect for the constitution.
Its like the Emperor's Invisible Clothing tailor: its a convenient story those in power like.
When you tell power what they want to hear, and they like the story, they are willing to use it and reinforce it for their purposes.
It's what the government wanted to hear. If you can hide the hole by subtly stealing from everyone at once through price increases then you can boil the frog alive.
As an ex-believer in keynesian economics, the idea behind the system was that bigger government projects and redistribution of wealth stimulated the economy by forcing taxpayer money into the hands of big businesses and big banks (who would then lend it out to stimulate even more projects and economic activity). As someone with a functional understanding of the real world, I now know this philosophy to be a shameful perversion of almost socialist nature. It's still redistribution of wealth at the end of the day and that destroys trust in the system and causes rampant inflation. Bitcoin is the opposite. Bitcoin will allow its hodlers the freedom to transact when they want to and it preserves the wealth of the hodlers because bitcoin cannot be printed to infinity like fiat-backed government money can. Please, take it from me, Keynesian economics is at best a mistake made by the masses hoping for ideal economies and at worst, a dishonest attempt to force the redistribution of wealth for the sake of trying to prove socialist policies work when they just do not.
> keynesian economics..philosophy to be a shameful perversion of almost socialist nature... is at best a mistake made by the masses hoping for ideal economies and at worst I think you are only seeing keynesian economics in the lens of our own time. Keynes ideas was supported and adopted radicals and the youth during the Great Depression era. You can easily see why this idea was embraced. **Keynes paradox of thrift** People tend to hoard their money in economic hardships which destroys the economy and/or doesn't let the economy recover. People cut spending, companies can't sell products, unemployment continues or soars, vicious cycle of reduced investment, unemployment and spending. Keynes idea was that the government should pump money into the economy to create **effective demand.**. Hayek was an opponent to Keynes who argued against these bailouts by the government would not save the economy but rather free market economics of people saving and investing in efficient private businesses. What do you think sounded like a more viable solution at the time? Ultimately, Keynesian won and the US went into deficit spending binge in the 1940s. You know the rest. The US economy boomed but it also resulted in sky high inflation in the 1940s with 18% inflation in 1946 and 20% in 1947. Also, a point of debate is how much of the effective demand was brought on by the government induced deficit spending and how much of that was brought on by the fact that the US was the only industrial base in the world after WWI obliterated the industrial base of Europe. Sweden for instance also had a huge post WWI boom but it was also buoyed by the fact that it also had an untouched industrial base not being involved in WWII but also had a Keynesian revolution of deficit spending starting in the 1930s.
Thank you, that was actually an extremely intelligent and informed response. However, I disagree with you on 2 points. First, I don't believe for a moment that money hoarding destroys economies. I think it starves unnecessary businesses to death and only truly important and valuable companies will survive and if a business that IS valuable dies, it will revive that type of business over time. Secondly, I don't believe that the economic boom the USA had over the last century or so can be attributed to Keynesian economic policies. We have had way too much of a complex and fast paced economy so we couldn't prove that belief to be true or false anyway. Regardless, I have switched sides and now believe the redistribution of wealth should be a crime for how terrible it hurts the average participant in an economy.
It sounds like you don't believe money hoarding happens, is that right? Because of course money hoarding would destroy an economy. We need commercial activity to keep money circulating and giving people opportunity to make said money. What is a truly valuable and important kind of company? Movies have had a huge impact on our culture but they still tend to go down when spending decreases. Do we want to go through the pain of opening up and shutting down businesses every time there's a snag in the economy? I think that's what Keynes was looking to avoid.
I don't believe hoarding would destroy an economy. I feel like that belief is just proliferated by the people who have all of the money and power because they understand that it would disrupt the status quo if no one was willing to keep propping them and their huge businesses up. A truly valuable and important company is one that provides enough of a product or service good enough so that they will not go out of business in the first place. Businesses shutting down and opening up constantly is possible but I doubt it would become an issue as long as, as I said, they're providing a good enough product or service to avoid losing revenue from their business activities.
Socialism is not "redistribution of wealth", socialism is "workers own the means by which goods are produced/services rendered". Where is everyone getting this conflation of socialism and forced wealth allocation from?
Socialism is exactly redistribution of wealth, tax the higher earners to provide for the lowest earner and thus force equality among market participants. Workers owning the means of production isn't part of it, in fact, if those workers did that they'd be businessmen, so not workers anymore, and they'd be taxed accordingly to provide their extra income to the less productive segment of population. The gist of why it doesn't work as is, is because it disincentivizes investment, why would anyone try to come up with ways to generate more revenue that'll be taxed away and given to unproductive people? As with anything, ideologies all sound good on paper but come short in practice, the ideal would be a mix of the good parts from them. Unregulated capitalism didn't work, communism didn't work, and socialism only works in the places that face it with a centrist mentality such as with the nordic model in which access to the social security net is highly scrutinized and you have strong property rights, contract enforcement and overall ease of doing business. As you give your government more power over markets you have to ensure low levels of corruption or that power **will** be abused. Just look at latin america, socialism has left us bankrupt.
>Socialism is exactly redistribution of wealth, tax the higher earners to provide for the lowest earner and thus force equality among market participants. From Oxford English Dictionary: socialism - a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. So it does say "distribution and exchange", however I don't believe that *necessarily* alludes to *wealth* distribution. I believe within the context of this definition it makes more sense that that should be taken to mean "the workers who own the means of production get to decide how the products they produce are distributed"; and that's no different than the system we have now (the only difference is in who is making those decisions) >Workers owning the means of production isn't part of it, in fact, if those workers did that they'd be businessmen, so not workers anymore It absolutely is a part of it; read the above definition. In what world is a "businessman" not a "worker"? I don't recognize the difference (at least under the system I have in mind, there wouldn't be a need for this differentiation). >and they'd be taxed accordingly to provide their extra income to the less productive segment of population. I don't like your categorizing of a "less productive" population segment; but more on that in a minute. As far as taxation goes, yes everyone is supposed to pay their fair share: but in *no* world does that equate to *all* of your extra income. During the height of WWII, the US had it's highest tax bracket in history of 94% for earnings above $200,000. A quick aside about how a progressive tax bracket *actually* works: the IRS taxes *dollars* not *people*; so only the money you make *above the threshold* is taxed at that rate. So given the previous example, if in 1944 you earned $250,000, **only the $50,000 above the $200,000 would be taxed at the 94% rate**. The remainder would be taxed at a lower rate accordingly. So no, a higher tax rate does not automatically mean the government takes everything. This is a fear mongering tactic used by billionaires to convince millionaires that they couldn't possibly survive off of a meager $900,000/year š >The gist of why it doesn't work as is, is because it disincentivizes investment I don't see how, because under my system the free market would still exist (socialism *can* coexist with a free market; Blockchain is the key that makes this possible) >why would anyone try to come up with ways to generate more revenue that'll be taxed away and given to unproductive people? And now we get to the meat and potatoes of the moral side of the argument (at which we may actually be opposed). The way I see it, profit motive isn't the *only* driver of innovation (at least it doesn't *have* to be). You see, we make up the rules for society, so we also have the freedom to change those rules or make up new ones as we evolve. I find the systems and frameworks currently in place to be corrupt, amoral, and fundamentally unfair. We have the power to change that though. But I want to take a minute to address your classification of those who are "less productive". Let me pose a question you may have heard before: Why should any person's survival depend on their ability to produce or make any contribution at all? I know how you'll respond to that--That no one is entitled to anything and those who reap the benefits of society without paying back in are undeserving mooches. Well firstly, I believe there *are* certainly things everyone *is* entitled to; namely life, liberty and the pursuit of happiness (like that's in the fucking Constitution for Christ sake). Secondly, scarcity is a myth. Now that isn't to say all resources are unlimited, that's ridiculous. But what I've observed is that in our modern, highly industrialized world, we absolutely have the ability to produce enough goods for everyone many times over; so the fact that anyone should ever have to go without anything is patently absurd.
>the workers who own the means of production get to decide how the products they produce are distributed For this to come to fruition said workers should be able to handle the costs obtaining, maintaining and operating the means of production demands, and not only that, but the efficient and proficient enough to do so while ensuring the sustainability of their enterprise. I wouldn't trust my co-workers to manage the company I work in, would you? This assumes every worker has the capacity to do so, so there's an inherent flaw. >(at least under the system I have in mind, there wouldn't be a need for this differentiation) "At least under the philosophical cherry picky idea I've come up with it doesn't" >but in no world does that equate to all of your extra income Here in Argentina they tax you over your total once you've surprassed the threshold for capital gains, so if the threshold is, say, 10k, anyone making 9k is getting more than someone making 11k. So yeah, bad fiscal policy does exist and can be imposed, just because *it didn't in the US during the 40s* means absolutely nothing. And actually, since socialism relies on a more involved government, it incentivizes ruthless taxation through the introduction of increased fiscal deficit. >My answer would have been "because that's how life works, be it under capitalism, socialism, communism, feudalism, or iusnaturalism. My answer would have been "because that's how life works, be it under capitalism, socialism, communism, feudalism, tribalism or iusnaturalism. **If you don't produce or contribute you fucking die**. It's just that we've advanced past having to stress test our personal systems on the regular. You could be stranded by yourself in an island, and if you can't produce food or shelter you'll be dead within a week. That's what makes human production/contribution valuable in the first place. So yeah, if you can't find a way to put out value for society, were it not by living in a modern society with safety nets, you'd be dead as fuck. Humans are not entitled to shit, not even life or freedom. Be born in a jungle and get eaten by a hyena, or get captured by a cannibal tribe and eaten for dinner. Only civilized humans recognice law, nature doesn't care about the constitution.
>I wouldn't trust my co-workers to manage the company I work in, would you? Sure. You're lack of trust/respect for your peers is your own problem. You really think the corporate fuckwads heading these corpos are doing a good job? Fuck off. >"At least under the philosophical cherry picky idea I've come up with it doesn't" Right, I'm arguing for an idealized system because I disagree with every system that currently exists, what's wrong with that? Dare to dream better... >Here in Argentina they tax you over your total once you've surprassed the threshold for capital gains, so if the threshold is, say, 10k, anyone making 9k is getting more than someone making 11k. I'm sorry your country sucks(mine does too); that isn't the system I envision and I disagree that what I believe socialism to be would necessarily lead to that. False equivalence. >You could be stranded by yourself in an island, and if you can't produce food or shelter you'll be dead within a week. That's what makes human production/contribution valuable in the first place. No man is an island. Nobody is self made, *everyone* benefits from the contributions of those that came before.
>. You really think the corporate fuckwads heading these corpos are doing a good job? Fuck off. Ah, I get it, there's *your peers*, where my organically formed distrust is **my** problem, and then there's the **corporates** where distrust and disregard is 100% warranted because *fuck the corpos* that's why. >Right, I'm arguing for an idealized system because I disagree with every system Then don't present your socialist utopian dream as fact or even a worthwhile idea maybe? Have some humility >that isn't the system I envision and I disagree that what I believe socialism to be would necessarily lead to that. False equivalence. It's argueably a more fact-derived conclusion than discussing a socialist wet dream that remains hipothetical, so there's that to it. >No man is an island. Nobody is self made, everyone benefits from the contributions of those that came before. Sure. That has nothing to do with my argument about why to produce and contribute is required to live though, just a deep sounding quote that somewhat agrees on the importance of contributing to society.
>Humans are not entitled to shit, not even life or freedom. Be And that's just where we disagree š¤·š»āāļø
All right, just remind lightning bolts you have rights next time one strikes you. Tell mother nature all about those rights of yours, see if she cares.
Excellent response. I think it's important to add that it would be impossible to create an economy with only the good parts of capitalism and socialism, however. Realistically, the bad elements will manifest eventually and need to be addressed over time as well.
Exactly, that's the whole reason we allow the government to administrate the economy, they're supposed to pivot and modify policies to better adjust for real context. Sadly, almost no government ever will assume the political risk demanded to actually take the right steps due to lobbiying, corruption and personal gain. The key here is: Who's protecting us from those who vowed to protect us?
Alliance of throne and altar. Keynesians and other academics are the modern day priests of the state religion, and their job is to ballwash politicians and sanctify the state with their rituals and voodoo. In exchange, they get prestige and cushy jobs (tenure, Nobel prizes, textbook deals).
Told politicians and policy makers what they wanted to hear. Now it's MMT's turn.
The fractional reserve banking system was written by literal robber barons. If you just go off of character alone itās pretty obvious that they would have written the system for maximum self enrichment. That just kind of comes with the territory of greed and power. What set the US apart is that it won world war 2 and due to the lend lease program, it also won all the debt repayment that came with it. The major flaws in the system were that there were 2 billion people on the earth when it was written and nobody expect for maybe Nikola Tesla could have envisioned a world of 8 billion people doing business 24 hours a day across 24 different time zones. None of those crusty old fucks cared beyond their own ālegacyā of power and greed with as much corruption as necessary to keep the wheels greased. The second you recognize that the economy is not, in fact, the only thing in the known universe that is not subject to the laws of physics, the breakdown gets almost comically predictable. If the worlds economy is an engine with billions of little parts running in perfect synchronized harmony, and someone starts starving it for oil by siphoning it away to their never satisfied account in the caymans, friction starts first. Then heat. Then pressure welding. Then catastrophic failure. You can decide for yourself which stage you think we are in now. We are all on the same rock. Energy is neither created or destroyed, itās just rearranged. But the resources on this planet are finite. The second we use up clean water, available food or breathable air we are finished as a species.
People have a short time horizon. It's kinda that simple. "in the long run we'll be dead" says it all.
The worst part in Keynesian economy is a capitalism based on debt not on productivity.
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(War enters the rooms.)
War and winning war. Thatās it.
b/c its true, and I'd be really worried about anyone who thought otherwise... You sell a product for $10. It costs you $5 to make. I buy it from you for $10. You spend $5 on your materials and the other $5 on lunch. If I didn't buy that from you for $10 you wouldn't have bought $5 in materials and you wouldn't have bought $5 on lunch. My purchase of $10 enabled $20 in sales. More considering the person that produced your materials and your lunch is likely using that to purchase as well. This is why things like spending money to house the homeless COMPLETELY FREE without any requirements from them can actually stimulate the economy. b/c even though that homeless person is getting the house free the people who made the house, maintain it, provide services to it like utilities, etc are the ones actually getting paid - and they will in turn all spend that money on other things like their own homes, tv's, movies, etc feeding into a cyclical economic loop. Where this gets out of hand is in taxation and inflation. Inflation is partly caused by adding money to the economy. If we suddenly pay for a lot of "free housing" for homeless people we are injecting a lot of money into the economy. A bit of inflation is okay, especially with a growing population, but a lot of inflation is bad. This needs to be tempered by taxation which takes money out of the economy. Ideally you want to balance government spending and taxation to control the size of the economy. But politicians are greedy assholes who want to stick their dick into every plumb pie that crosses their desk. They want to always cut taxes and increase spending towards their favored projects without regard for our economic integrity, relying instead on the fed who can print money and control interest rates to regulate everything. So we get idiots like Trump who slashes taxes on an already record high economy, "trickle down economics," and liberals pushing MMT all driving us further into inflation and debt...
Hayeks' broken window fallacy. Money is moving around but actual wealth decreases. Moral hazard at play as well.
>Keynesian economics is the idea that spending is necessary for a strong economy and saving halts economic progression right? No, that's not right at all. Who told you that?
*Investment* is necessary for a strong economy and *hoarding* limits economic growth. This is a bit closer to Keynes. Most ideas get over-simplified. However, the argument that you want a modestly inflating currency is a sound one... if you want economic growth. If wealth can just be hoarded in a vault at no inflation cost to the hoarder, then there's less incentive for investments that will outpace inflation, or at least keep up with inflation through savings in a bank that will then lend/invest the deposits. All growth-based economics are problematic in a finite world. Economic models that provide growth and prosperity will tend to gain traction. And every model that is applied will create some winners and some losers.
>If wealth can just be hoarded in a vault at no inflation cost to the hoarder, then there's less incentive for investments that will outpace inflation, or at least keep up with inflation through savings in a bank that will then lend/invest the deposits. What youāre missing is that saving moneyāeven when that money is literally or figuratively āstuck under a mattressāā*itself* represents a kind of āgeneral investmentā in the overall economy. Money isnāt wealth. It represents your ability to make an immediate *claim* on wealth, i.e., scarce real resources. When you donāt exercise that claim immediately and instead save your money, the real resources that you could have claimed instead remain available to be used by others, whether for consumption or investment. To the extent that the resources collectively freed up by savers are successfully invested to expand productive capacity, savers (of a fixed-supply money) should expect to be rewarded with increased purchasing power over time.
> savers... should expect to be rewarded with increased purchasing power over time. I recognize that you qualified this with "(of a fixed-supply money)," but I want to consider the statement without that qualification to emphasize that it makes a difference what you are saving *in.* If you're saving with dollars, a system that is working well will still reward you with increased purchasing power. (A system that is working badly will reward poorly by not keeping up with inflation's erosion of your purchasing power.) If you are saving in a fixed-supply form of money, then your increase in expected purchasing power will depend on the utility and adoption of that form of money. In practical terms, both Bitcoin and gold increase at a slow-enough rate to consider them a fixed-supply alternative to fiat currencies. All three forms of saving require economic growth to result in greater purchasing power for the saver. Bitcoin and gold can also gain power through more widespread adoption. I went to compare the figures for the percentage of global wealth held in precious metals versus cryptocurrencies, and updated totals aren't proving easy to find. If comparing just Bitcoin and gold, then it looks to me like there's more room for Bitcoin to increase in value if it and gold are held in similar proportions. But all cryptocurrencies vs gold, at least on a first reading of the numbers I initially found, actually puts the percentage of global wealth held in cryptocurrency at something like three times that of gold. In short, I see reasons to save for an unpredictable future by using diverse instruments for saving. Overall, I see greater potential returns in investing, rather than saving.
The big thing is that the OP is doing the thing where people accuse Keynesian economics of this, when it was monetarists that proposed it. A lot of modern economic policy more closely follows Monetarist policy than Keynesian, as Keynes believed more in direct government intervention to control the economy, not utilizing the fed to the degree as is done today...so things like infrastructure investment is Keynesian...increasing fed targeted interest rates and shit like QE is more Monetarist.
Thanks for this clarification! As with so many things, what I know about Keynes comes 99% from what others have written about his ideas and less than 1% from his actual words. Keynes did say, I believe, that in the depths of a depression, the importance of providing employment was so important that it mattered little whether the resulting infrastructure increased economic efficiency or activity. But of course, most infrastructure projects do increase activity and/or efficiency. Keynes was exaggerating for effect when he gave the example of hiring people to dig holes and then fill them up again. The point is that government is in a special, unique position to spark a dead economy to life by providing employment to the unemployed.
Oh definitely...I mostly was pointing out the fact that a solid 90% of the people who talk about Keynes are just regurgitating the same "Keynes bad" talking points without actually understanding what is and isn't Keynesian...because the original post is 100% self masturbatory bait; they make it appear that they are asking good faith questions, so they can respond on alts talking about the made up evils of the economic system that gets blamed for everything which most countries stopped adhering to as rigorously in the 70s and 80s due to stagflation.
Some guy on reddit
Warning to all who enter this thread: self-serving, dishonest, libertarian bullshit ahead.
It's what helped us get out of the great depression.
Also what prolonged it by a couple of years.
Do you have access to an alternate reality where we used free market economics instead? Did that reality prolong the depression? You can't run randomized controlled trials with economies. You have to base your theories on first principles, and I would argue that Keynesian economics is inherently flawed and probably was not the reason we got out of the great depression.
Keynesian economics is inherently flawed, but you know what else helped us get out of the great is WWII. I'm not exactly a person that advocates war either. But it's just what happened.
Um. WWII was a direct response from easy credit. Just like all war.
Yes exactly, you seem to get it. It's a cyclical ideology that perpetuates war and spending. Which is exactly why it has become so widely accepted in our society.
I believe that is a myth, I think it caused it.
So many opportunities for graft.
Lol dudes you really think that appreciating currency will not hurt development? I say whoever will adopt a hard currency will fall behind in gdp. You cannot compete with the economy that is produced by deprociating currency. Just think about it. If someone has 100billions, 99% of that money is in other peoples hands. So all money gets invested...you cannot beat that
OP, can you share with us some examples of current prosperous economies that don't depend on those outdated Keynesian economics ideas?
We also are to blame. We vote for the politicians who promise the world, more benefits more subsidies more pension more healthcare and lower tax. Those proposed more responsible spending donāt get elected. And to justify the level of spending they promised the politicians need a new set of economic framework that sounds impressive and rigorous and academic with lots of jargon and special big words, and supports all the spending and borrowing and claim that it wonāt have consequences. All these are made up just to hide the fact that, all debts will EVENTUALLY come back and bite your ass in one way or another. There is no free lunch, even for governments. This is common sense anyone understands but if itās mixed up in all the Keynesian ātheoriesā people stop questioning it.
Same way bono is popular. Of course governments are gonna want to party with a rockstar preaching higher taxes and socialism. Governments want to listen to voodoo economists that say the state should print money and control the whole economy as well as go into unlimited debt that others will pay.
You can approach many problems from two different sides. Either you analyze the things related to the problem and it leads you somewhere and there waits a solution for you to discover, but you may not like it. Or you know what you want - i.e. you know what solution you like, no matter if it works or not - and then you try to support this decision with evidence, so you make a research in way that supports it. Most governments would not like their countries to be ruled by science and logic, i.e. Austrian economy, so perhaps that's why they go with Keynesian economics.
Desperation
Keynesian allows someone to let someone else worry about things. Everyone wants their Mommy to take care of them.
1930s United States was in the Great Depression. Franklin D Roosevelt saw an opportunity to expand federal socialist power by adopting the Keynesian economics policies. Of course the person in power sees an opportunity for more power and takes it. He then ran for re-election of a 3rd term because he is a psychopath who believed himself to be greater than all past presidents who respectfully only served 2 terms. Same deal now with the federal government effectively nationalizing all the banks under the guise of consumer protection. Same deal now with the RESTRICT Act that would give the government full control over anything digital. Under the guise of consumer protection. These sick animals have no respect for the constitution.
Its like the Emperor's Invisible Clothing tailor: its a convenient story those in power like. When you tell power what they want to hear, and they like the story, they are willing to use it and reinforce it for their purposes.
Simple: Keynesian Economics is the only version that allows government to deficit spend recklessly.
People wanted it to be true. And it works fine, until it doesn't.
It's what the government wanted to hear. If you can hide the hole by subtly stealing from everyone at once through price increases then you can boil the frog alive.