Back to the gold standard

Public Debt-HK

30.1% of GDP (2011 est.)

Public debt:UK

86.3% of GDP (2011 est.)

Life expetancy is also higher in Hong Kong.

Now are there some really crappy areas of Hong Kong, yes.Again lol im not saying this is some garden of eden.

It does however provide a living example of when free market forces act on their own vs in comparison intervening governments i.e welfare state.

For the record I did not say Britain was a Socialist state, it was part of a quote I used. I said we have followed the Socialist policy's and have at times depicted traits of a socialist state.

Raz
 
These don't say anything about what it's like to live there. You know where the largest portion of chinese community in the UK come from, Hong Kong. The numbers say we should be flocking to Hong Kong instead. Weird that all the people I know would never go back.



The thing that you and the republican party have failed and continue to fail to understand is that a good life isn't about a bank balance. In fact the focus on economics is driving civilization off a cliff. The planet simply cannot sustain the level of consumption. Once the eco-sphere collapses where does that leave capitalism?

The Bear.
 
I don't say capitalism ensures happiness and freedom I never said that.

But democratic freedom , finds capitalism an essential part of the system.
I know of no society classed as free and democratic with a good standard of human rights which has a state managed everything.

The reason the cantonese community came here is because of the handover to the People's Republic of China in 1997. Not because they were going broke.

They looked over the other side and seen what was coming, and were afraid, and I dont blame them.

I have friends in Shenzen, Hong Kong, Macau all those sorts of areas and its not hard to find someone who preferred Hong Kong under British rule.

So please, your comparing apples and pencils they didn't leave Hong Kong because of its poor economic policy or because of poor social mobility.


Raz
 
Ahh, this is the problem: Many people are trained to use Marxist thought when viewing capitalism and so some things aren't clear.

Example: You mention the eco-sphere. I would agree that it's of utmost importance. We've recently (last 50 years or so) realized that dumping waste into our air and water has a cost. The air and water isn't limitless. The pollution is an externality, one that people who were polluting weren't internalizing. Therefore they got to do their business at a lower cost and make more money than otherwise because of it. The market prices weren't factoring in the cost. This isn't a failure of capitalism, it's a failure of imagination, knowledge, and thought. China's basically a coofftopicnd economy and they're polluting the crap out the the world as well.

Even with any other system 50 year ago we just didn't know that all that smoke was going to screw up the atmosphere. Even a planned economy wouldn't have known that.

Also, capitalism isn't a system for producing 'things' like widgets, televisions, and cars. Capitalism is a way of organizing contracts by enforcing private property rights. Things which can't be held in your hand still have value.

I'm just going to cut and paste something here which was on a subject tangentially related that turned into an epic FB thread. It was about CEO pay, but the description of wealth that I make in furtherance of that point is apropos, and frankly, I've been up all night writing. So whatever I come up with now isn't likely to be any better (pardon me for quoting myself).:
 
The problem is that even now we know. Capitalism won't allow a solution to be found. Socialism isn't the answer either. Our only hope of survival is to transform into a resource based economy.

The Bear.
 
Care to flesh that out a bit? That can mean a lot of things and I don't know you well enough to know what you mean without more information.

To be more specific: Is there a way you're thinking about this which does not fall into the 'externality' framework. Because it sounds like you believe, which is a pretty reasonable belief, that we're using our natural resources 'poorly'.
 
So by Proxy George Soros is a hack?
As I said before these people correctly predicted the markets, which is why I listen to them.
Folks like Bernanke didn't , Gordon Brown the British Chancellor lost billions of pounds selling gold.
I look for the folks who get it right and I look at sleaze and corruption.What you have now with derivatives trading and re hypothocation is gambling it's not finance or good governance of money and the people who do it don't get punished look at Jon Corzine he raided segregated accounts when MF global failed and he wasn't punished. The only conclusion you can take from that is that you need investments with no counter party risk .
 
George Soro's well he made his money thats true, he also lost a hell of a lot too. Ever since he lost a load hes been negative on the markets.

Though his reflexivity book is very good.

Gordon Brown didn't lose money this is a fallacy.

Britain and America agreed to sell gold to try and bring the price down the problem was GB announced how much it was going to sell and when.

Raz
 
Just so its clear.

"Under free market capitalism, prices would be set freely and supply and demand allowed to reach their point of equilibrium without intervention by the government. Productive enterprises would be privately owned, and the role of the state limited to protecting the rights to life, liberty, and property."

This is what I subscribe to for a healthy economy.
 
Excuse me, I answered your point with as much depth and content as your offering.

You asked what i classed as a definition of capitalism I answered.

I did however miss your question about multi national's I can assure you it wasn;t deliberate.

I still class MNC's as private in some cases and non private in others. You would consider RBS an MNC, but I would not class it as private owned. As it clearly isn't.

What I have noticed is a lack of substance from any of your quips, you merely try to find an exception to my opinion , somewhat on the lines of the Socratic method if you like.

Its very easy to criticize its much harder to offer a solution, please go ahead.
I have mine and it has proven to work, for a healthy economy as the main aim that is.

Raz
 
I would argue as others have that FMC is a form of Capitalisim if anything I find that's an oxymoron.

Why what do you think?
 
State ownership is state capitalism but still capitalism, also many businesses are owned by the banks, some of whom are owned partly or wholly by states.

Also Laisse Faire has not been proven to work, or it would be worldwide and universal.

Quoting rabidly things you do not understand and referring to an economist and philosopher from the Scottish Enlightenment is not reasoned debate to be honest, yes my posts have been short but yours have been full of padding and very little content. You are not selling your ideas very well, and your previous brusqueness proves you are finding it stressful.

Perhaps as we are doing 18th century solutions to 21st century problems I should bring Hume into it?



Obviously proposing positive ends from state interference in trade there.
 
stress lol

I already provided an example of were Free Market economics worked when allowed to be free from state meddling.

Hong Kong.

As shown in the paper by Milton Friedman on the first page of this thread. You first have to find fault with the points raised there before you can progress much.

And one can not really talk about Hume in this sense without referring to his fondness for the status Quo,he found it very bad advice to go against the establishment. I only have the 1817 edition of his book but I believe it reads same in the original.

I mean by this its not surprising that a pro-establishment thinker agree's with state interference. Though I do agree with him on theology. As far as economics well I agree with his paper concerning human morals. I am still more a fan of Locke.

Raz
 
Well, it's true that counter-party risk, is, well, risk. And, I agree that Corzine should be locked up. But, I'm not sure what that has to do with this.

As for rehypothecation, it's a bit better in the States. The UK doesn't even have a notion of a client segregated accounts at all. At least what Corzine did was a crime in the US.

As for derivatives: I hear this sort of anti-derivatives talk a lot. I don't understand it. If you're saying that things should be pushed to central clearing so that people can't mark-to-myth and cook their complex structured products books until they blow up. I'm all in agreement. All that stuff should be centrally cleared, just as vanilla options are. But, to talk of 'derivates' in general doesn't make much sense. If you have a mortgage, that's a derivative. Derivatives are necessary for farmers, oil companies, and the rest of the economy to function.

As for the 'traders', here's my counterexample: There a many, many people who invest in the market in some way. There are also many people who play the lottery. It is common practice to ask people who win the EuroMillions what their system for picking numbers is? I mean, I think Buffet is an amazing guy with an amazing mind - but, we still can't completely discount the chance that his string of big wins was luck. One in a million things happen to 70,000 people every day.

As I alluded to, even if these guys are the 'real deal' (and they, for some reason, want to give away their strategies for TV appearance fees. Which, if they're great traders seems weird because there's a contradiction that they're trading the ability to make all this money for a pittance. Perhaps they're just generous, or like the publicity. Ok, we'll go with that.) The system that they need to predict. Say the universe of publicly traded 'large-enough' companies and other instruments such as FX, that's probably about 1000 symbols globally. The time frame they seem to operate on is something like a year, perhaps a bit less.

Now look at the system that Bernanke and Brown need to be able to predict in order to set monetary/ fiscal policy. You're talking about the entire economy of a country. The market capitalization of the S&P500 is about $10 Trillion and the FTSE 100 is about £1.5Trillion.

Now, I've just done some very quick napkin arithmetic and it looks like earnings for all $1 Trillion a year at the most. The US GDP is about 15 Trillion a year. So The US economy is at least 15 times harder as an absolute lower bound. I guarantee it's worse than that risk and things tend to get all exponential on you in these sorts of cases. Additionally, publicly traded S&P 500 companies are going to be more homogenous than taking the entire economy, public and private equity and debt, inflation, fx, all that stuff.

Also volatility (taking the usual assumptions) increases with time passed as well, so that's another multiplier.

Point is: it's a different game. I'm excellent at predicting where the market is going in the next few minutes. For personal investments, I buy and hold and never pick stocks. I understand that my knowledge on one time frame is swamped by the increased volatility and complexity of dealing with the economy on that time frame.
 
Go on...What, for example, might this look like in a hand-wavy sorta way?

If extranalities are fully internalized the framework we have will solve that. If we choose a different framework, that doesn't solve the problem. We still have to figure out the same questions, namely: what does 'sustainable' mean? What resources are in 'danger'? etc...
 
Quote

As for derivatives: I hear this sort of anti-derivatives talk a lot. I don't understand it. If you're saying that things should be pushed to central clearing so that people can't mark-to-myth and cook their complex structured products books until they blow up. I'm all in agreement. All that stuff should be centrally cleared, just as vanilla options are. But, to talk of 'derivates' in general doesn't make much sense. If you have a mortgage, that's a derivative. Derivatives are necessary for farmers, oil companies, and the rest of the economy to function.


I think that you know what I mean when I speak of derivatives, I am talking about going long or short on stocks /commodities the S+P etc. Which although it can seem very logical, even scientific using all those nice graphs of volume and moving averages, breakout points etc is really only speculation and gambling.

Using an option as insurance for crops or coffee is sensible, but the way they are used now it is like gambling on when a fly will move off a wall.
If you look at the gold spot price, or even the volume of Gold and silver traded it has absolutely no relationship to the actual Gold or Silver held. Quite ridiculously the spot price of gold is based on the amount of long and short contracts on "paper "Gold. In some weeks the amount of silver traded exceeds all the above ground silver.
If you are wondering why I have the take on this that I do, it is because I am a long time investor in precious metals and to me the whole market seems crazy, totally mad. I like real Gold because it is real money, it has no counter party risk, i don't like etf's etc...people are really only shuffling imaginary paper ious about, all backed by nothing which is why America nad the UK have the debts they have.
 
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