Free-market "failures" and South American socialism

[Audacity17]

"if you go to one of these malls, you will find hundreds of clerks, and a handful of shoppers. no one can afford these goods...yet."

I'm so glad this point was brought up. Why do they have all this supply and no demand? Simple, they are rigging the system...just like Japan did til they had their meltdown in the late 1990s. I remember people in the early 1990s talking about how Japan had a new capitalism, and they were gonna take over, how they invested in things that were in the long term benefit of Japan, blah blah blah. The same is being said of China now.

A small group of elite old cronies will never be able to make the necessary reactions to regulate an economy over the long term.......the trillions of decisions made by billions of people all over the world.

I'm sure that candlemakers thought something was wrong with the free market when electricity came on the scene. Afterall, everybody used candles and nobody used light bulbs. Think of all the jobs that would be lost. But people made their choice. And its not up to some government agency, or blabbering fool on a forum board to say otherwise.

Between 1949 and 1992(If I remember right), Hong Kong grew at 9 percent per year, real growth. This without any trade restrictions, and a flat tax rate across the board.

China's gains are despite its meddling, not because.

 

[futures_shark]

Quote from dddooo:

While you're advocating a 100% free market approach I have never advocated command economy or socialism, as a matter of fact I repeatedly denounced them while maintaining that some government intervention in certain situations may be beneficial for the economy. So who is an "all or nothing" extremist?

So would you agree that a limited government is best?

Because what we have now, in most of the world(especially the US) are governments with unlimited power to do as they please. And it seems that what pleases them most is to grow the size of government even larger. It is hard to say this is a government by the people for the people when at election time your choices are between a bad candidate and a worse one.

 

[nononsense]

Quote from futures_shark:


I read this article and it struck me that socialism is very easy to sell.

F. Hayek:
THE ROAD TO SERFDOM
dedicated: "To the Socialists of All Parties"

Quote from futures_shark:


Too bad it doesn't work as good as it sounds.

Doesn't really matter. Even after the victims found out out about this, they will believe in it more than before. They will ask for an "improved form of socialism"

 

[futures_shark]

Quote from nononsense:
F. Hayek: THE ROAD TO SERFDOM

http://www.mises.org/TRTS.htm

 

[Warmagus]

One is offering freedom, the other shackles. I'll take freedom.

 

[SouthAmerica]

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Free-market "failures" and South American socialism

Bad news: The free market has been tried in South America -- and it doesn't work. After two decades of experimenting with capitalistic reforms, voters are fed up with the lack of positive results, and socialism is on the rise (again) in that region of the world, according to a February 8 article in USA Today.

In recent years, six Latin American countries have elected leaders who are either self-declared socialists or leftists. In Venezuela, President Hugo Chávez vows to implement "21st-century socialism." In Bolivia, President Evo Morales, a leader of the Movement towards Socialism (MAS), promises to "renationalize" the country's natural resources. In Paraguay, President Nicanor Duarte Frutos declares that "human beings are more than a market." In Brazil, Chile, and Argentina, voters also returned socialists or leftists to power.

What do those six countries have in common? Politicians in each have announced that the free market has failed. "Savage capitalism," they declare, has not ended poverty; the free market has not created enough new jobs; and privatizing government-owned businesses has not resulted in lower prices or greater prosperity. Liberty has been tried in South America, critics say. It has failed.

Or has it? The answer seems to depend on your definition of the "free market." USA Today paints a picture of "free-market" reforms that seem suspiciously like, well, more big government.

…Did South America really give the free market a chance? Here's one more piece of evidence. Every year, the Heritage Foundation and the Wall Street Journal publish an Index of Economic Freedom. The Index measures the economic freedom of nations around the globe, based on factors like trade policy, tax burdens, property rights, regulation, and so on. Countries are given a score from 1 to 5, with 1 being completely free and 5 being economically repressed.

The six Latin American countries that recently re-embraced socialism -- Venezuela, Bolivia, Paraguay, Brazil, Chile, and Argentina -- earned in 1995 an average score of 3.04 ("Mostly Unfree"). That's a year when these countries were allegedly in the midst of a free-market revolution. Now, in 2006, these six nations have an average score of 3.11. That's slightly worse than Qatar (3.04) and slightly better than Tanzania (3.20) -- two nations that rarely come to mind when discussing capitalistic success stories. The bottom line is that much of South America is still "Mostly Unfree" economically -- and moving further in the wrong direction.

The free market did not fail in South America. What did fail is what always fails -- government intervention in the economy in the form of widespread protectionism, politically motivated loans, and massive political corruption. The only difference is that in Latin America, this government intervention masqueraded as free-market "reforms." And voters, deluded by opportunistic politicians, decided that the solution to too much government was more government. Sadly, those South American voters will probably pay the price for that mistake for years to come.



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February 25, 2006


SouthAmerica: This article is completely off the mark.

I wonder what is the score of the United States on the economic freedom scale of the Heritage Foundation and The Wall Street Journal (Countries are given a score from 1 to 5, with 1 being completely free and 5 being economically repressed) – if I had to guess I would say the that United States score is = 10.

When you are borrowing about $ 2 billion dollars per day for your economy to stay afloat from the rest of the world then your economy it is hardly free – every two years and the United States adds another $ 1.0 trillion dollars of debt on top of the other trillion dollars that the US have already borrowed from their new masters.

I believe that whoever wrote that article was trying to imply that the US economy works on a much freer economic environment and government intervention.

Let’s compare the Brazilian economy with the US economy.

US economy: US government budget for 2006 – 2007 = US$ 3.0 trillion dollars

Brazilian economy: In Reals the local currency the Brazilian government budget has not gone up much in the last few years – but when you translate to US dollars then it looks like the Brazilian government had a major increase in their annual budget from year to year.

Basically, the increase on Brazilian government budget happened when you convert the local currency to US dollar since the US dollar lost a lot of its value against the Real in the last 2 years.

Two years ago the Brazilian government budget translated to around US$ 100 billion dollars for the year 2004.

The United States government annual budget has been running at over 26 times the size of the Brazilian government annual budget.

The US government annual budget is so large that it is at least 2 times as large than the entire Brazilian economy. The US defense budget alone is 5 times larger than the entire annual budget of the Brazilian government.

Talking about being inefficient and wasteful – just try to kill any Defense program in the US and you will see senators and governors lobbying to keep the program going on - even if what they are producing is obsolete or were designed to be used on another era. There is no other country in the world that waste more money that the United States government – and I am not going to touch the subject of corruption because I don’t want to waste my time. But you can bet that with an annual budget of US $ 3 trillion dollars – if we look closely enough we would find more corruption going on than in any other place on earth.

Basically, that article was a bunch of bullshit. For example: Argentina for a period of ten years followed everything the US masters told them to do economically – they privatized everything in sight in Argentina even the local Zoo in Buenos Aires – they embraced free-market capitalism like a bunch of religious fanatic – to make the story short Argentina ended up in the poor house, in chaos, and in
bankruptcy.


.

 

[SouthAmerica]

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February 25, 2006


SouthAmerica: By the way, which country is more “Socialist?”


United States:

Annual US government budget = $ 3 trillion dollars

US population: around 300 million people.



Brazil:

Annual Brazilian government budget = $ 100 Billion dollars

Brazilian population around 200 million people.


I wonder if the Brazilian government should increase its annual budget many times over to be as "Socialist" as the United States.


.

 

[futures_shark]

Quote from southamerica:

...I believe that whoever wrote that article was trying to imply that the US economy works on a much freer economic environment and government intervention...

The article did not imply that at all.

The article is attempting to explain why socialist politicians have been winning elections in South America. The socialists have been running on a platform based upon the failure of free-market reforms. However, the article contends that the reforms failed becaue they were not free market solutions in the first place.

 

[Hydroblunt]

Quote from futures_shark:

You're hard to discuss and argue with because you do not even understand your own stance. Free market is a theory that has not even been agreed on by its most advanced proponents. I know it shows a bit of ingenuity to use a search engine to find wikipedia.org (one of the best sites on the web, btw), but I suggest that you actually read the whole "free market" section and taking the time to understand it before acting like an expert.
http://en.wikipedia.org/wiki/Free_market. Read it, understand it, then state your point.

I tried to explain this to you before, free market theory really comes from lassez fair principles and this all from the imperialism & industrialization periods of Europe where the first instance of raw capitalism was observed. It has obvious problems and the worst of it have not even been stated, which is the high enviromental damage to the Earth. Yes, these are also from history, this is where enviromental laws come from.

Straight from the wikipedia.

"A free market does not require the existence of competition, however it does require the competition is not being prevented by coercion"

Prevented by whom? The government? So there is government involvement required and that means it can and probably will be corrupted and here come the monopoly/oligopoly state. So then your own ideal model fails because of "government".
Hong Kong is a tiny piece of land that is really just a city. It is not even a real autonomous country, it is a Special Administrative Region, where some key government duties, such as defense & foreign are run by China.

Certain, out of the ordinary areas will have policies and economic systems that simply do not work for most countries. I suggest you take a look at UAE, a better example than Hong Kong in my opinion.

China is a very interesting model, although their whole growth success story is full of holes, bad debts, unprofitable businesses and GDP made 50-75% of foreign investments.
It seems to be an evolution of the model Stalin used for USSR, which actually had astronomical growth, production & advancement in a short period of time.

 

[futures_shark]

Quotes from hydroblunt:You're hard to discuss and argue with because you do not even understand your own stance. Free market is a theory that has not even been agreed on by its most advanced proponents. ... but I suggest that you actually read the whole "free market" section and taking the time to understand it before acting like an expert.

I never claimed to be an expert. I choose to read information from multiple sources and make my own conclusions rather than regurgitating other peoples ideas.

http://en.wikipedia.org/wiki/Free_market. Read it, understand it, then state your point.

I tried to explain this to you before, free market theory really comes from laissez fair principles and this all from the imperialism & industrialization periods of Europe where the first instance of raw capitalism was observed. ...

From http://en.wikipedia.org/wiki/Free_market#Origins
Some theories assume that a free market is a natural form of social organization, and that a free market will arise in any society where it is not obstructed. The consensus among economic historians is that the free market economy is a specific historic phenomenon, and that it emerged in late mediaeval and early-modern Europe. Some economic historians see elements of the free market in the economic systems of Classical Antiquity, and in some non-western societies.

By the 19th century the market certainly had organized political support, in the form of laissez-faire liberalism. However, it is not clear if the support preceded the emergence of the market, or followed it. Some historians see it as the result of the success of early liberal ideology, combined with the specific interests of the entrepreneur. In Marxist theory, the ideology simply expresses the underlying long-term transition from feudalism to capitalism. Note that the views on this issue - emergence or implementation - do not necessarily correspond to pro-market and anti-market positions. Libertarians would dispute that the market was enforced through government policy, since that has a connotation of repression, and Marxists agree with them, for different reasons.
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In the above description of the origins of free-market theory I believe the first sentence(in bold) and apparently you believe the second. Maybe you need to read the ENTIRE free-market section before you start giving me a hard time.

Straight from the wikipedia.

"A free market does not require the existence of competition, however it does require the competition is not being prevented by coercion"

Prevented by whom? The government? So there is government involvement required and that means it can and probably will be corrupted and here come the monopoly/oligopoly state.So then your own ideal model fails because of "government".

You look at that quote and assume that it means a government must exist to "prevent" coercion. While I believe it means that governments rule by coercion so they must not exist, or must be minimized for the free market to operate properly.

... Certain, out of the ordinary areas will have policies and economic systems that simply do not work for most countries...

If you admit that free-markets and capitalism work in the UAE & Hong Kong, then I see no reason why it wouldn't work everywhere. But this is obviously a difference of opinion and not provable either way. You are correct in calling them out of the ordinary areas because most of the developed world is under the control of big government.