Archive for the ‘economics’ Category

Sixty years ago, the city-state of Singapore faced a housing crisis. There was insufficient housing for all its citizens, and much of the housing that did exist was dilapidated and substandard and overcrowded, little more than one-room tar-paper shacks that entire extended families were crammed into.

Singapore’s response was to build massive government housing projects. I mean *MASSIVE* government housing projects, to the point where 80% of Singapore’s population lives in government-built housing. And these housing projects are, like the rest of Singapore, clean, safe, and pleasant places, if a bit bland.

Meanwhile, here in the United States, what government housing projects exist are decrepit, dilapidated, filled with rats and crime and trash, definitely *not* anything like the Singapore projects. So: Why are the Singapore government housing projects so different from the U.S. housing projects?

Well,three reasons:

1) Race. Most residents of Singapore housing projects are ethnic Chinese, just like most residents of Singapore itself, and the racial composition of each housing block is carefully managed to reflect the racial balance of Singapore itself. Meanwhile, most residents of U.S. housing projects are blacks, which are only 12% of the U.S. population and are a hated and discriminated-against minority. The white majority in the U.S. is loath to spend resources on what they view as a disgusting and filthy minority.

2) Income. The Singapore housing projects are open to all Singapore citizens, and the residents of the Singapore housing projects reflect the full range of socioeconomic classes from poor to well-off other than the ultra-rich. Meanwhile, American housing projects are reserved for the most hated and despised minority of all in a land whose real religion is the Almighty Dollar– the utterly impoverished. The not-impoverished majority in the U.S. is loath to spend resources on what they view as a disgusting and filthy minority.

3) Ownership. While technically the flats in a Singapore housing project remain the property of the government, the 99 year leases for those flats are considered property and can be bought and sold with some restrictions (e.g. only citizens can buy a resale flat, and you have to live in it for a certain number of years before you can sell it). Furthermore, the buildings themselves are run by a “town council” comprised of a selection of residents of the buildings comprising a “town”. The result is that people want to keep their properties well maintained and allocate the resources to do so. Thus the government housing projects in Singapore remain clean, safe, and pleasant places.

Now, some of this is unique to Singapore. But other parts of it are not. Any built-out area with a housing crisis could benefit from executing a Singapore-style plan. Not that it would ever happen in the United States, because ideology, not pragmatism, is what rules in the United States. You’d hear GOP shouting “socialism!” You’d see NIMBY’s who worship the Almighty Dollar above all gods shouting “it’ll decrease my property values!” You’d hear liberals saying “it’s a subsidy for the rich!” Ideology would crush it. It could happen in Singapore because Singapore is a Confucian dictatorship run by the members of one family and thus there’s nothing stopping them from taking pragmatic measures to improve their city-state. It would never happen in San Francisco. Ideology would kill it.

And thus we end up with working people living in cars and vans on the streets, and Singapore… doesn’t. It’s ideology versus pragmatism. For those who claim that Singapore being a dicatorship is why they could do it, there’s no end of dictatorships that have taken the same route as San Francisco, letting people live and die in misery and squalor despite having the resources to do something about it. The difference is that Singapore chose the path of pragmatism rather than clinging to an ideology. The city-state started out as a place of refuge for Malaysia’s Chinese minority and did not have the luxury of ideology at the beginning, when its very survival was iffy. Sticking with pragmatism as its primary guiding principle not only let it survive, but let it become an economic powerhouse in Southeast Asia despite its total lack of resources. As versus, say, Alabama, which sticks to ideology as its guiding principle… and is a total hellhole.

-Badtux the Pragmatic Penguin

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The Internet and all the hardware and servers on the Internet as well as the computer you’re using to read this were created by hundreds of thousands of ordinary middle class engineers and programmers and installers and technicians who wrote the code, designed the computers and routers, and built and installed the hardware all the way out to where you’re typing this. Yet virtually none of these people own any of their work. It almost all belongs to the super-wealthy, because of the divine rights of kings. Or something.

Generations from now, people will look back upon our current gilded age with the same revulsion that people today have when they look back upon the days when kings could behead people just on whim and lived lives of luxury while their people starved in rags.

— Badtux the Democratic Socialist Penguin

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A few days ago I mentioned that centrally planned economies can’t work, but neither can capitalist economies unless there are rules that redistribute the tokens to the consumers and workers who generate wealth rather than allowing them to accumulate unfettered in the hands of owners of capital. At which point someone says, “well, the only way to do that is tyranny!”

What, in the 1950’s the United States was a tyranny? For real?

Then there’s the argument, “the rules will always be hijacked by the rich and powerful. How are you going to prevent that?”

My answer is democracy. The large number of young people looking at democratic socialism as the answer, which is where democracy is used to re-write the rules to favor redistributing the tokens back to the masses rather than letting them accumulate in the hands of a rentier class, shows that democracy can be self-correcting over time. Democracy is not Orwell’s boot pressing the face of man into the ground forever, it has the capacity for change, albeit sometimes the change happens depressingly slow and takes forms at times that are equally depressing. Is democratic socialism “the” answer? Not in its purest form, certainly, but it is a natural reaction to rentier capitalism and is the direction we must go if we don’t want a Mexico North with a huge impoverished class and a tiny but stupidly wealthy upper class and nothing inbetween. Mexico is not a nice place to live for the majority of people there (and the fact that they’re no longer coming to El Norte should tell us something too about where our nation currently is). If democratic socialism takes us away from that, sign me up!

– Badtux the Somewhat-socialist Penguin

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Centrally planned economies in the information age don’t work for the same reason that we don’t write computer programs that detect bombs in luggage — the problem set is so huge that there is no set of heuristics that can cover all the permutations. Instead we set up a system that learns, and some rules to let it know when it’s working right, and then train it in the real world. In the industrial age the Soviets could compete, albeit with significant inefficiencies that I’ll discuss separately if you’re interested. Once we moved into the computer age, economies became too complex to centrally plan. Training them with tokens, a.k.a. money, really is the only way that works with modern economies.

Unfortunately the set of rules has been hijacked by rich jackasses who care only about themselves and not about the health of the economy as a whole. Or as Michael Roberts says, “a rentier economy is a dying economy”. But people continue to think that the set of rules that currently exist, “natural law” rules that are actually “survival of the richest” rules, are the only ones that can exist. Our nation grew its economy best back when the government imposed a set of rules that redistributed money back to the people who actually created wealth (i.e., the workers who actually built Buicks and Chevrolets) rather than allow it to concentrate in the hands of a few rich people, because that allowed the tokens to be used to train the economy to generate wealth that benefited the common folk. Obviously now that money has become magic talismans and “market economies” have congealed rule sets that have become religious in nature rather than practical, we end up with what we observe — an economy that benefits only the few, not the many.

Rich people continue to whine that changing the rules is “Communism”. No, it’s not. They are pushing a religion that contains a rule set designed to enrich the rich, rather than upon the concepts of money and markets as a whole. I am quite capitalist, capitalism is the only proven way of actually encouraging the creation of wealth. What I’m against are rules that benefit only owners of capital, not the workers who generate capital. We’ve had rules that benefited both owners and workers before, and it worked out well for this nation. Saying that this was “Communism” is saying that the entire USA of the 1950’s was Communist — which is patently absurd in every way possible.

– Badtux the Economics Penguin

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Right wingers point at Venezuela when whining about the perils of socialism. Bull. Try Denmark or Sweden if you want a socialist country. The chaos in Venezuela is about racism, not socialism — the Blancos (whites) owned the economy, got kicked out of office by the Indios (brown), and think destroying the economy will get them voted back in. It’s all about “the punishments will continue until you vote us whites back into power!” They would literally rather destroy the country than relinquish economic and political power to people they consider their racial inferiors. The most hilarious thing of all is that if you put the average Blanco and the average Indio side by side, the average white American wouldn’t be able to tell the difference between them!

I boarded with a Blanco when I was in college. He was a racist piece of shit. I’ve heard many of the exact same things out of the mouths of Blancos today that I heard back then from that jerk’s mouth. They are as bad as the old white elites of the American South who were willing to shut down all government services rather than allow blacks equal access to them. Which is where most anti-government sentiment in the United States stems from, BTW — it’s grounded in racism and in utter spite, a willingness to cut off services to themselves rather than share them with people they consider their racial inferiors.

But anyhow: the chaos in Venezuela is basically about a race war between the Blancos and Indios. Socialism is incidental to that, and more about the Indios trying to punish the Blancos for the Blancos torpedoing the economy as the Blancos try to punish the Indios for voting them out of power than about any real ideological convictions. The situation in Venezuela was caused by a civil war between races, not by socialism. Socialism has its own issues and inefficiencies, but it doesn’t cause race wars. That just isn’t a power of any system of economics.

– Badtux the Geopolitics Penguin

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Virtually all economically wealthy people (and I mean people who are millionaires) got there by underpaying their workers. The workers are the people who created their wealth, the workers are the people who created the products and manufactured the products and sold the products to customers and maintain the products, the millionaire owners have simply kept more of the output of the workers than is justified by what they put into the business. If they shared the wealth created by the workers with the workers in proportion to the amount of that wealth that was created by the workers, they wouldn’t be wealthy. Well off, but not buy-a-Lear-jet-to-fly-to-my-vacation-home-in-the-Bahamas wealthy.

So yes, Elon Musk is evil. When his dot-com got sold he got a huge sum of money even though he himself did not create that dot-com, all he did was invest some money in it. The employees who built that dot com should have gotten their fair share of that wealth that they built, they were the ones who built the web site and back end infrastructure and everything, but they didn’t, Elon took a disproportionate amount. That’s what I mean by evil. Elon gets paid in stock grants that workers who created the wealth of Tesla don’t get (while they are otherwise working long hours for low pay in unsafe conditions). The fact that he has a flair for PR and has done some not-evil things with wealth that should have belonged to the workers who created that wealth doesn’t change the fact that Elon Musk is evil. It merely means he’s trying to absolve the stain upon his soul.

As for the PR stunt of promising clean water for Flint, the devil is, of course, in the details. I doubt Musk is going to spend $1.5 billion to rip up all the streets in Flint to put new water mains under them and new non-leaded laterals to houses, which is what would be required to actually fix it. For one thing, he doesn’t actually have $1.5 billion, not without selling all of his stock in his various ventures. My guess is that he’s going to fund some water filters for people’s houses. Yay. Big fucking deal.

A capitalist system with a working banking system doesn’t require oligarchs in order to start businesses and provide a fair return to the owners of capital. That’s what banks are for. Too bad we don’t have a capitalist system with a working banking system…

— Badtux the semi-Communist Penguin

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If every single member of the Walton family died tomorrow, nobody would notice until the next Walmart board meeting. Even then, all that would happen would be that the outside directors would appoint new board members. You would go to Walmart and it’d be operating as usual

If every single shelf stocker and cashier walked out of Walmart tomorrow and nobody took their place, Walmart would be done. There would be no more company. Because it is the cashiers and shelf stockers who keep the shelves stocked and the money flowing. Without merchandise on the shelves, without cashiers taking money in exchange for that merchandise, there is no Walmart.

Who, then, creates the wealth? It isn’t the Waltons. It is the shelf stockers and cashiers and the purchasing officers and the truckers who bring the goods to the stores and all those other little people. The Waltons are not billionaires because of their hard work or genius. They are billionaires because of government saying that they own the wealth created by all those shelf stockers. Without government police to enforce their ownership of this wealth created by others, they would be as impoverished as a Central American peasant on a subsistence farm. More impoverished, actually. The Central American peasants at least know how to grow their own food. I doubt any Walton has ever gotten his or her hands dirty in the soil, nevermind growing food with them.

If it makes me a socialist to say that the Waltons should be taxed in order to provide health care and education for the people who actually created their wealth, so be it. They are leeches who have wealth only because government allows them to take it from the actual wealth creators, the workers who work in their stores, and if government wants to take some of that wealth back after providing the men with guns that allow them to steal it from the workers in the first place… well, I don’t see what the problem is.

If health care and education for all Americans is “socialism”, then I’m a proud socialist. Economies exist to benefit *all* the people, not just a handful of billionaires who’ve managed to grift their way to the top by rigging the system so they can loot wealth created by others via government guns.

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