Economic (Mis)Education in Europe

[russ_watters]

This is simply not true, as poor people in capitalistic socities live much better than poor people of socialistic societies. Socialism does not improve the lot of even the poor people.

Well, though I think the data needs to be taken with some caveats when comparing across countries, most countries in Europe are generally considered to have lower poverty than the US. It appears to me that the income distribution curves of socialist and capitalist countries cross somewhere. You don't, for example, tend to find many homeless in socialist countries, so if you go far enough down, you find a certain fraction at the bottom of other countries doing better than ours.

This is not a major point of contention between us, though. In general, I consdier capitalism to pull on the income distribution like a rubber-band. The inequality grows as the rubber band stretches, but everyone gets pulled up.

 

[russ_watters]

What, like, people in the rest of the world don't fear unemployment and protest things like that?

People in capitalist countries like the US do not. I've read that the average American has 8 jobs in their adult life. Such a thing would terrify the French.

I think the fact that you don't see to many political protests in the U.S. about economic political issues any more makes my point down below that capitalism can just as easily be an opiate.

Well, no. In France, they have problems so bad they are worthy of riots, but the riots are to keep the laws that are creating the problems in the first place. Riots are an impotent show of frustration by people who are trapped in socialism, not an actual mandate for change.

That's my point. They aren't trying to maximize economic growth at the cost of all else. They accept that the restraints they're putting on commerce to achieve other kinds of prosperity will have those kind of costs. It's intentional, they weren't expecting to have the best economy in the world.

That just doesn't make any sense. These "other kinds of prosperity" require a functional economy to fund them. If you don't have that, you don't have any kind of prosperity. Put another way, by limiting their prosperity, they limit their ability to help their populace improve their standard of living.

Well, they're trying to have some of the products of socialism be the source of happiness and contentment of the masses, yes. Opiate seems a bit pejorative - if socialism is the opiate of the French masses then capitalism is the opiate of the American masses.

No, you're missing my point. Socialism is an addiction. It weakens the economy while simultaneously causing people to defend it because of the perceived personal benefit to them. The point of comparing it to a drug is in that it is not a beneficial addiction.

(You realize that quote from Marx refers to religion, not economics, right? And refers to something given to the masses to quell their political activism? The various sorts of stuff given to the American populace by commerce certainly qualifies.)

Yes, I know the quote and I know what it was talking about. The way you put it is great. Socialism is "something given to the masses to quell their political activism." And again, you have to remember the point of the reference: it is harmful. Americans love capitalism and yes, you may even say they are addicted to it. But only in the same way that a runner gets addicted to running. They are addicted to doing something beneficial. The French are addicted to laws that cause high unemployment and poor economic growth -- because they fear the responsibility that goes with freedom.

I think perhaps you're misunderstanding the word "malaise". I wasn't saying that nothing bad happened in the USSR, I was saying that "malaise" doesn't describe their behavior very well. They even fended off the post-WWI Allied invasion that tried to prevent the country from even being created. You can bet that little action didn't stem from noble freedom-loving capitalist principles.

Google it. I'm not making the term up. Unfortunately, most references are to the post-USSR Russian malaise (try "soviet malaise"), but there are quite a few links that discuss the concept and its effect on the downfall of the USSR. Here's an article to get you started: http://books.google.com/books?id=a0...ts=RadUzXEWIb&sig=CSnO-4uLKasIsxtuDbIcXyykp58

And you are focusing on long-past achievments here when I already said they are besides the point. Socialism causes a long-slow decline. You can have great short-term success by raping your country's people. It wasn't until the '70s that the decline really caught up to them. And it was the openness of Gorby's Glastnost and Peristroika that caused the Russians to realize how much worse their lives were than ours. That's what ultimately caused the collapse.

If you don't consider the Communist Party's control over Russia to have been dictatorial, even in the 80's, I must respectfully assert that you don't know what you're talking about.

I'm not really sure what you are talking about - I said no such thing.

And Soviet Afghanistan "not a big deal"? You know it's referred to as the "Soviet Vietnam", don't you, that it lasted a decade, and that it was a proxy war of the Cold War period? And that it immediately preceded the collapse of the Soviet Union? Calling it "not a big deal" is either another case of limited information on your part, or is an intentional mischaracterization.

Russia's war in Afghanistan was nowhere near the scale of the Vietnam war. People call the Iraq war another Vietnam too.

Nothing to do with an arms race that bankrupted their entire economy, eh?

Sure - why did it bankrupt theirs and not ours?

The average Westerner in the 1980's was considerably better off than the average Soviet, for sure. But to compare 1910 Imperial Russia (which was already way behind the 1910 United States, by the way, it was basically the third world) to the 1980's USSR and say that the communist system failed to create substantial wealth - when it created much more than many capitalist nations of the world did during that period - is absurd.

It's like Economist said about France - they may have gotten a little better, but they should have gotten a lot better.

Casting the outcome of the Cold War as some kind of allegory about the superiority of American values is equally silly nationalism. Yeah, Stalinism and other political events over there were horrible wrongs. But the United States and the USSR were basically two sumo wrestlers slapping each other in the face for fifty years. The US just managed to slap hardest.

There is a reason one ideology spread across the world and the other didn't. It isn't because we slapped harder, it's because one works and the other doesn't. We're certainly not slapping China, for example - China's figuring it out on their own.

 

[Economist]

Well, though I think the data needs to be taken with some caveats when comparing across countries, most countries in Europe are generally considered to have lower poverty than the US. It appears to me that the income distribution curves of socialist and capitalist countries cross somewhere. You don't, for example, tend to find many homeless in socialist countries, so if you go far enough down, you find a certain fraction at the bottom of other countries doing better than ours.

Yeah, I've heard that too. But I've also heard people make convincing arguments to the contrary. I guess I'm not completely convinced either way.

The French are addicted to laws that cause high unemployment and poor economic growth -- because they fear the responsibility that goes with freedom.

A wise man once said, "With freedom comes great responsibility!"

 

[Anttech]

People in capitalist countries like the US do not. I've read that the average American has 8 jobs in their adult life. Such a thing would terrify the French.

Nice Arguement Russ, I love how you critical thinking and logic goes out of the window there.

 

[W3pcq]

We may have worse health and less free time, but at least we have our freedom frys!

 

[physarrista]

Russ,
as someone who grew up in a communist/ socialist country and has since lived in several european countries, including France and in the US, I have to tell you, your assesment of the 'socialist' aspect of the french economy seems just... weird.

France and the Soviet Union are as different as day and night. Equating the two and comparing them with the US is strange. What you have in France is Capitalism. Plain and Simple. The French chose to put a few more laws to protect the workforce into action, but this is nothing (!) like what happened in the Soviet Union.

Imagine some Chinese guy making the argument that the environmental protection laws in the US are hindering economical growth. After all, if companies just dump their toxic waste into my backyard instead of paying for proper recycling or whatever, they could maximize their profits and this might just benefit everyone, right?

 

[Anttech]

Well, no. In France, they have problems so bad they are worthy of riots, but the riots are to keep the laws that are creating the problems in the first place. Riots are an impotent show of frustration by people who are trapped in socialism, not an actual mandate for change.

More great logic, I suppose the LA Riots were also an important show of frustration by people who are trapped in socialism.

 

[Art]

I can't believe there are still people who subscribe to the 'greed is good' school of economics. I thought that nonsense died out at the end of the 80's after Thatcher turned the UK into an industrial wasteland riven by economic divisiveness and social unrest

 

[Economist]

I can't believe there are still people who subscribe to the 'greed is good' school of economics.

To boil down the economic argument I've been making to the "greed is good school of economics" is silly. First, of all, what it says is that people pursuing their own self-interest (profits, wages, etc) often benefits others greatly. Second, it says that people act in their self-interest, regardless of whether you have Capitalism, Socialism, or some other system. In other words, Politicians, beurocrats, etc, all act in their self-interest which has many negative political ramifications. Third, it also says that people usually need to have property rights and own the fruits of their labor, which is tied into my first point. Four, it says that people spend their own money much better than people spend other peoples money. There's probably many other points that can be made, but I will stop there.

 

[W3pcq]

Here is a thought experiment. Say we took all the socialist aspects of our nation and made them private. Police force, firemen, military, etc. I'll stop there and let you make your own conclusion.

 

[Yonoz]

I think it's safe to say by now that at the bottom line, the people (or policy makers) of France don't value economic growth as highly as Americans. My questions are: How much of an influence does an economic policy have on actual economic growth? What effect does a liberal economic policy have on growth? Is there a longer lasting effect? How do we tell whether it's a bubble or sustainable growth (without waiting for it to burst)?

 

[Art]

To boil down the economic argument I've been making to the "greed is good school of economics" is silly. First, of all, what it says is that people pursuing their own self-interest (profits, wages, etc) often benefits others greatly. Second, it says that people act in their self-interest, regardless of whether you have Capitalism, Socialism, or some other system. In other words, Politicians, beurocrats, etc, all act in their self-interest which has many negative political ramifications. Third, it also says that people usually need to have property rights and own the fruits of their labor, which is tied into my first point. Four, it says that people spend their own money much better than people spend other peoples money. There's probably many other points that can be made, but I will stop there.

If your argument doesn't represent the outdated Adam Smith 'greed is good' school of thought then what economic theory does it represent. It certainly walks like a duck and quacks like a duck and yet you claim it isn't a duck so what do you call it?

 

[Art]

I think it's safe to say by now that at the bottom line, the people (or policy makers) of France don't value economic growth as highly as Americans. My questions are: How much of an influence does an economic policy have on actual economic growth? What effect does a liberal economic policy have on growth? Is there a longer lasting effect? How do we tell whether it's a bubble or sustainable growth (without waiting for it to burst)?

That's if you concede socialist countries have lower growth rates than capitalist ones (France's being currently higher than the US) and that where they do have lower growth it is an inherent fault with socialism rather than other specific problems such as Europe's massive debt repayment after WW2 or the result of economic warfare by capitalist countries trying to undermine socialist gov'ts to gain access to publicly ran assets and in case their own citizens look for the same benefits.

 

[Economist]

If your argument doesn't represent the outdated Adam Smith 'greed is good' school of thought then what economic theory does it represent. It certainly walks like a duck and quacks like a duck and yet you claim it isn't a duck so what do you call it?

I'm just saying that it's usually more complicated than simply "greed is good." Don't get me wrong though, because individuals pursuing their self-interest actually does create a lot of the "good" you see in the world. That's more than I can say for anyone who simply states (more like implies) that they are acting in others self-interest out of their compassion and benevolence.

 

[W3pcq]

People generally are motivated by self interest, this is one of the first things you learn in econ. The point of a Democracy is to protect us against this trend of human nature.

 

[CaptainQuasar]

People in capitalist countries like the US do not.

People in capitalist countries do not fear unemployment? Or protest? Your eyes are dazzled, man. Those things sure as heck happen, even in the U.S.

That just doesn't make any sense. These "other kinds of prosperity" require a functional economy to fund them. If you don't have that, you don't have any kind of prosperity.

So France has a nonfunctional economy and no prosperity whatsoever? This is news to me.

Americans love capitalism and yes, you may even say they are addicted to it. But only in the same way that a runner gets addicted to running. They are addicted to doing something beneficial.

You have been very successfully opiated and anesthetized to not question whether it's all beneficial.

Socialism causes a long-slow decline. You can have great short-term success by raping your country's people.

But for long-term success you really need to get into raping the people of other countries, eh? Dude, don't you realize that by asserting that socialism makes people evil and capitalism makes people good you're simply parroting 1950's propaganda?

Russia's war in Afghanistan was nowhere near the scale of the Vietnam war.

And so not surprisingly, the analogy isn't based on casualties or bombs dropped. They were both grinding, ultimately futile, decade-long conflicts that sapped the strength and resources of the agressor nations.

Are you really going to stand by "not a big deal" on that one? If so I'm entirely entitled to use the label "vigor" in place of "malaise".

Sure - why did it bankrupt theirs and not ours?

Certainly because we had a stronger economy and greater wealth in general. But your interpretation of Cold War victory as a sign of righteousness and an anointment of all things American is silly - it's more often than not the more barbarous, less sophisticated, less virtuous nation that is the victor in war.

Again, I'm not saying that the Soviet Union was the superior here as far as barbarity, sophistication, and virtue go. In fact I think victory or defeat in war says nothing at all about superiority or inferiority of national values. I'm pointing out that through this blithe unalloyed aggrandizement of everything American in relation to the Soviets you're being the mouth-puppet of CIA spin doctors who have probably been dead for decades.

It's like Economist said about France - they may have gotten a little better, but they should have gotten a lot better.

Like, say, more capitalist Angola or Brazil did during the same period?

May I point out that in addition to the depredations of Stalin and the Communist Party's violent and brutal political machinations during its existence and an economy based upon a Victorian understanding of capitalism and economics the Soviet Union suffered somewhere around 25 million or 30 million dead in WWII, more than half the Allied total fatalities and probably twice the Axis total fatalities, part of which they incurred in fending off a substantial invasion by both Nazi Germany into their national territory? But they still rolled right into carrying out their own version of the Marshall Plan in Eastern Europe, not to mention reconstruction aid and military support of the Red Army in China?

Like I said, capitalism as implemented in the West definitely has many advantages and has lead to more prosperity than there was in the Soviet Union. But your dismissal of Soviet communism as some sort of total abject economic failure isn't the result of careful, impartial examination and reasoning. It's willing blindness. It simply shows that you have swallowed state propaganda hook, line, and sinker.

There is a reason one ideology spread across the world and the other didn't.

Let me introduce you to Scientology and a bunch of other ideologies that have spread across the world if that's how you pick your principles.

By the way - Marxism and other Soviet ideologies haven't spread across the world? What the heck are you talking about? Almost every country I'm familiar with has one or more functioning Marxist and communist political parties that participate in the political process - what's the corresponding American ideology party?

We're certainly not slapping China, for example - China's figuring it out on their own.

This is an example of exactly what I'm talking about. All that's happened in China is that the Communist Party there has decided they probably don't need to bother with communism to retain political control over the country. Your equation of capitalism in China with freedom just means that you're taking as much of their opium as you are of the American sort.

Believe me, the people controlling China want capitalism to be an opiate even more than U.S. interests want it to be. In fact their shift towards a capitalist economy is pretty much a recognition that capitalism will make a better opiate than communism did.

 

[opus]

Wow! I guess I didn't know how economically illiterate they are in Europe, until I read this article: http://www.foreignpolicy.com/story/cms.php?story_id=4095




I guess I can't blame them, when the public schools are teaching this unsubstantiated garbage.

I am convinced that you are troll, calling an entire country, often regarded as the birthplace of that classical liberalism you spew constantly, "illiterate".

So get off your high horse. Obviously you had to point that it is "public" schools teaching this "garbage" and of course not the private schools in France which would never do such a thing because of perfect market efficiency and processes that would result in a level of education far superior to the public system.

That was sarcasm, by the way, much like the smug tone of your post.

 

[Yonoz]

That's if you concede socialist countries have lower growth rates than capitalist ones (France's being currently higher than the US) and that where they do have lower growth it is an inherent fault with socialism rather than other specific problems such as Europe's massive debt repayment after WW2 or the result of economic warfare by capitalist countries trying to undermine socialist gov'ts to gain access to publicly ran assets and in case their own citizens look for the same benefits.

Not necessarily. I think it's obvious from the previous posts that Economist and Russ value economic growth more than you and other European posters.

 

[Anttech]

Not necessarily. I think it's obvious from the previous posts that Economist and Russ value economic growth more than you and other European posters.

parce que?

 

[Yonoz]

parce que?

Because of statements like these:

I can't believe there are still people who subscribe to the 'greed is good' school of economics. I thought that nonsense died out at the end of the 80's after Thatcher turned the UK into an industrial wasteland riven by economic divisiveness and social unrest

Would anyone say economic development has no cost, especially no human cost? Is it "some kind of free lunch," as they say in French?

I think the French textbook isn't wrong; although it may be selective. It could have added "despite these costs, lack of economic growth is even costlier."

It may not technically be wrong, but its purpose is: conditioning people to accept a life of mediocrity. French malaise will kill France as surely as Russian malaise killed the USSR.

The stress of a capitalistic lifestyle is better than the hunger, low life expantancy, etc, of the alternative lifestyle.

 

[Art]

Because of statements like these:

I strongly support economic growth so long as the increase is in the median where it actually does some good and I do not accept that running a fair and caring society through the implementation of socialist policies is a drag on economic growth. In fact investment in public health and education are essential growth enablers.

For example

Flexibility and Adaptability of workforce when faced with new challenges

Ireland 8.43
USA 7.43
Portugal 6.92
Netherlands 6.86
UK 6.60
Spain 6.21
Czech Republic 6.20
Germany 5.56
Japan 5.53
Hungary 4.87
France 3.85

Source - IMD World Competitiveness Yearbook 2007.

Irelands total investment in knowledge (including investment in public and private spending on higher education) increased by an average annual rate of over 10% over the past decade compared with averages of around 3% by the EU and the OECD.

Surveys show that foreign investors consider the quality and the 'can do' flexible attitude of Irish people to be two of the country's greatest advantages.

http://www.idaireland.com/home/index.aspx?id=33
btw note France makes #11 on the list (of 55 leading countries) which debunks the notion of them being overly resistant to change.

Further corroborating data from the same link

Labour Productivity (PPP) - GDP per person employed per hour. (US$)

Ireland 45.33
USA 43.99
UK 38.57
Netherlands 38.22
Germany 37.06
Spain 33.84
Japan 31.10
Hungary 24.72

Source - IMD World Competitiveness Yearbook 2007

Worker Motivation

Ireland 7.18
Netherlands 7.16
Japan 7.15
Germany 6.98
USA 6.75
UK 6.13
Czech Republic 6.00
Hungary 5.30
Portugal 5.02

Source - IMD World Competitiveness Yearbook 2007

Skilled Workforce

Science and Technology graduates per thousand in the 20-29 age group.

Ireland 23.2
France 19.6
UK 16.2
USA 10.2
Germany 8.2
Portugal 6.3
Netherlands 5.8Source - Eurostat 2003.

Also note Ireland's rankings in motivation and productivity which debunks the notion that socialism with it's safety nets breeds malaise.

The skilled workforce data is also interesting. The high tech industries which generate the highest earnings require high skilled workers and so are more likely to locate in areas with the required skill sets available. France scores highly in this category which bodes well for it's future.

 

[Anttech]

Because of statements like these:

If you leap any further Yonzo you will end up in Cyprus. :D

That is to say, it seems to be your statement is unfounded. Since it seems to me that Art for one is arguing that the Adam Smith ideology is counter Economic growth, when taken to the extreem

 

[Yonoz]

I strongly support economic growth so long as the increase is in the median where it actually does some good and I do not accept that running a fair and caring society through the implementation of socialist policies is a drag on economic growth. In fact investment in public health and education are growth enablers.

Having grown in a socialist community, I can testify to the capitalist notion that contentment breeds laziness. Competition drives progress. In a "fair" society, why would anyone choose to be a garbage collector? (BTW, how much does your municipality charge for garbage collection?)
It's therefor a matter of personal preference where to put the balance between "fair and caring" and economic growth. Your preferred balance leans towards the former, while Economist's and Russ' leans towards the latter. In any case, a successful society has to avoid being out-competed or self-divided.

 

[Yonoz]

If you leap any further Yonzo you will end up in Cyprus. :D

That is to say, it seems to be your statement is unfounded. Since it seems to me that Art for one is arguing that the Adam Smith ideology is counter Economic growth, when taken to the extreem

Meden agan, my Greek friend
We agree, then - Art is arguing Economist and Russ lean too much towards the capitalist extreme of a hypothetical capitalism-socialism spectrum.

 

[Art]

Having grown in a socialist community, I can testify to the capitalist notion that contentment breeds laziness. Competition drives progress. In a "fair" society, why would anyone choose to be a garbage collector? (BTW, how much does your municipality charge for garbage collection?)
It's therefor a matter of personal preference where to put the balance between "fair and caring" and economic growth. Your preferred balance leans towards the former, while Economist's and Russ' leans towards the latter. In any case, a successful society has to avoid being out-competed or self-divided.

And the best way to not be out-competed is to have a highly educated, healthy workforce.

See the tables I appended to my last post.

 

[Yonoz]

I see Art's added some data to his post, I'll try and address it before dinner.
I see you put the following in bold: "Surveys show that foreign investors consider the quality and the 'can do' flexible attitude of Irish people to be two of the country's greatest advantages." This returns us to my previous question - how much actual influence does an economic policy have on the economy? One can argue as to the causes for the Celtic Tiger, but it certainly had something to do with Ireland being one of the poorest countries in Europe at its start: low labor costs. Add to that: English speaking populace, a timezone between Europe and the US, the internet (and telecommunication) boom. Now the ROI have to worry about keeping their place at the top - transition from a booming economy to sustainability, at a time when everyone wants a piece of the action. I guess we can wait. I'd still like to hear how much it costs to have your garbage taken away please, Art.

 

[Yonoz]

And the best way to not be out-competed is to have a highly educated, healthy workforce.

I don't think anyone's found out "the best way to not be out-competed", yet.

 

[Art]

I'd still like to hear how much it costs to have your garbage taken away please, Art.

Why? Still if you are that curious we have a choice here in my local area (although this information is fairly meaningless as each local authority has it's own structure). You can opt to pay euro 200 for 6 months unlimited weight or euro 0.39 per kilo. Alternatively you can forgo collections and take your rubbish to the tip yourself at euro 20.00 per car load.

Recycling (tins paper glass and plastics) and electrical appliances are taken away free of charge (The EU introduced a WEEE charge http://www.consultnet.ie/weee.htm when you buy a new appliance to cover it's future collection and disposal.)

Average annual cost per household is Euro 280.

 

[Economist]

I am convinced that you are troll, calling an entire country, often regarded as the birthplace of that classical liberalism you spew constantly, "illiterate".

So get off your high horse. Obviously you had to point that it is "public" schools teaching this "garbage" and of course not the private schools in France which would never do such a thing because of perfect market efficiency and processes that would result in a level of education far superior to the public system.

That was sarcasm, by the way, much like the smug tone of your post.

Come on opus, you know me well enough to know I'm no troll.

Yeah, I did point out that public schools were the ones teaching this nonsense, but I never said that private schools wouldn't also teach this nonsense. As far as I am concerned, private schools would generally give parents what they want, and therefore, if private schools were implemented in France now, many of them would probably use the exact same textbook I was criticizing. In time, who knows? If it turns out that I am right, and that the French textbook garbage is wrong, then much less private schools will teach it, precisely because less parents will want it (notice I did not say, all schools would abandon it). If I turn out to be wrong, then the reverse would happen.

I never said that private schools would be in anyway perfect, but rather that they can't do any worse than the public schools. The competition that would be created in a more privatized system (such as vouchers, which is far from a completely privatized system) would definitely do a much better job at teaching students than public schools are currently doing (especially in the poorest areas). You should go to the Harvard Economics Department website and look up a faculty member named Caroline Hoxby, as she has done a lot of research on this topic and found that the people who benefit most from vouchers come from poor families and the poorest neighboorhoods.

 

[Art]

Come on opus, you know me well enough to know I'm no troll.

You just blandly ignore any facts or data which contradict your opinions and barrel on regardless repeating the same mantra. Not sure if that qualifies as trolling but it makes discussions pointless after a while.