The money-power, the State-corporate apparatus, decides the value. — Dharmi

Wouldn't that be the role of the market?

Wouldn't that be the role of the market? — frank

Yeah, but the market is rigged by those who have the most power and money. So, it is the market, but the market is not this pie in the sky thing. It's controlled by material forces. The State and the corporate sector primarily. Though the bankers control the money supply, and hence the value of the currency in relation to the products, so they're more powerful than any of the others really.

So how would you explain the stagflation of the 1970s?

Well, I know there is a Post-Keyensian explanation for it. I think they'd say that if you'd had taxed the money out of the economy, then prices would fall.

But a huge aspect of that problem was the oil cartels messing with the price of oil.

I guess you'd have to be more specific.

Hmm.

But neoliberalism became a sort of social virus that reorganized America and to some extent the world to think of health only in terms of the health of Wall Street. The doctrine is to let Main Street disintegrate as long as Wall St. is ok. — frank

Free market works better than a command economy, yet for a free market to operate healthily needs a lot more is needed than the Ayn Randian libertarian just assumes to be. Simply put it: A society isn't based on competition, but on a community.

I think the basic reason is that the present elite doesn't feel that they have a responsibility towards the larger society and they have no understanding that they should take care that there exists social cohesion in the society.

Here it's important to understand what actually social cohesion is about. Here's a definition:

Social cohesion refers to the extent of connectedness and solidarity among groups in society. It identifies two main dimensions: the sense of belonging of a community and the relationships among members within the community itself. It stems from a democratic effort to establish social balance, economic dynamism, and national identity, with the goals of founding a system of equity, sustaining the impulses of uncontrolled economic growth, and avoiding social fractures.

Social cohesion is a social process which aims to consolidate plurality of citizenship by reducing inequality and socioeconomic disparities and fractures in the society.

Political polarization, social and economic inequality reduces social cohesion and in the end creates violence, distrust and fear throughout the society. And if the elite just stands by, then the train wreck happens. The elite can withdraw to it's guarded communities or simply move to safer places abroad and then bemoan how bad things have gotten in their country and how much nicer it was decades ago without ever understanding that their lack of action was very crucial in the collapse.

think the basic reason is that the present elite doesn't feel that they have a responsibility towards the larger society and they have no understanding that they should take care that there exists social cohesion in the society. — ssu

Exactly, and that's part of the neoliberal doctine. Civic responsibility and equality leads to stagnation. Raiding social assets and fostering concentration of wealth makes the economy burn hot.

I think they might be right about that. The twist is that Neoliberals rode into power exhalting freedom. As things progressed, they learned to exert military authority to open societies to neoliberal raiding.

Do you agree with that?

Partly yes.

In a way, governments have lost their power or simply pushed forward an agenda of the most wealthy and corporations. That has happened.

Basically money and investment, capital, was given freedom to cross borders and nobody thought what would happen to labor. I think that there's ample examples of that in the US. Add there that more and more production and even services are done by machines.

Let's take one example: the role of trade unions.

Strong labor unions and government control can indeed lead to a more stagnant economy, yet if trade unions are not powerful and basically unimportant, then what can emerge is totally reckless behavior from the employer side. This can create far larger problems than the negative aspects of a heavily unionized workforce can produce. Sweden has a labor union participation rate of 82% and Finland and Denmark of 76% while with the US this is at 13%. What is missing from this from the below map is Iceland, which has the highest level of the work force participating in labor unions:



Then lets look at the gini coefficient by country, which measures income inequality. Again in very close order the listing of the countries: the least inequal countries have the highest labor union participation rates.



And where do we find the countries when relative povetry is measured? Again far less relative povetry in countries with higher union participation.



Labor unions can also have harmful policies: they can promote trade barriers that make industries totally incapable of competing with other nations in the long run. Or simply be taken over by organized crime. And do note that this isn't a leftist issue: trade unions do not mean that these unions would be made of people on the political left.

Yet the basic simple fact is that workers get a better deal when haggling over salaries on a collective level than as individual workers. And this ought to be totally fine for liberals/libertarians too. But for some, it isn't so.

But where's the race war? Maybe I just don't understand what a race war is, if there's one underway. Do you see it? — frank

I think there always have been racial tensions, or at least for a long time in human history. What scares me is modern warfare. Including the dark web with its illegal weapon trade. I see race war in parts of Africa, where genocides are still happening frequently. It happened in the 90s in Eastern Europe in countries that are not far from the EU.

For the US I wish the criminalization of weapons. It will give some peace to the people. And if everyone feels safer there's more room for solutions.

For the US I wish the criminalization of weapons. It will give some peace to the people. And if everyone feels safer there's more room for solutions. — TaySan

Nothing brings one a sense of peace like not being able to defend oneself or at least die defending oneself on equal terms I suppose.

For you, the war is over.

I don't know. In the Netherlands weapons are criminalized. There are specific rules for them. You can for example have a katana in your house as decoration. But you cannot transport it in public. Police are only allowed to use violence under the most extreme of circumstances.
I would rather see all weapons being destroyed. But I do not have that power.

Strong labor unions and government control can indeed lead to a more stagnant economy, — ssu

I still don't totally understand why this is. I think it's because it leads to a state of equilibrium between wages and prices so that profit margins become small. Workers are then laid off to try to increase profitability and invite investment for R+D, new facilities and equipment, etc, but that only lowers demand. Now inventory becomes bloated. More workers are laid off. Is this right?

This is a system headed for a deep recession after lingering in stagnation for a decade.

I don't think it's totally clear what the solution to this is. In the 70s, a lot of people thought socialism was the answer.

Is it? And why does France have both low labor union participation and low wealth concentration?

For you, the war is over. — unenlightened

I wrote out this long post to 180Proof to explain that calling it a war is falsely dignifying what happened to my ancestors. They were never in a position to defend themselves. There were no weapons, no generals, no spies or strategies.

But then I realized that nobody wants to hear that poignant nihilistic shit. If it's just a matter of a shift in meaning, then yes, it's a war.

But let's not pretend we all know equally what that means. Ok?

But let's not pretend we all know equally what that means. Ok? — frank

Yes. It is silly to argue about the definition of war, or whether a genocide is a war or not, or whether the slave trade or the apartheid system was or is part of a war.

But to the extent that we want to call a conflict a race war, we all know who won and who lost, whether we are talking about the holocaust, the conflict in Myanmar, the Tutsis and Hutus, or blacks and whites.

But to the extent that we want to call a conflict a race war, we all know who won and who lost, whether we are talking about the holocaust, the conflict in Myanmar, the Tutsis and Hutus, or blacks and whites. — unenlightened

So I guess you're saying BLM should just shut up and go home because they already lost.

Well, I know there is a Post-Keyensian explanation for it. I think they'd say that if you'd had taxed the money out of the economy, then prices would fall.

But a huge aspect of that problem was the oil cartels messing with the price of oil.

I guess you'd have to be more specific. — Dharmi

By far, the most important event in the 70's was the final break with gold by Nixon in 1971. This adoption of FIAT currency allowed what we see today, particularly using the USD to balance trade internationally. This led to the exportation of the U.S.'s manufacturing base and an entire succession of events, including the running of enormous trade deficits, the counterfeiting of USDs and wholesale manipulation of interest rates leading to multiple commodity and asset bubbles.

Oil was a little blip on radar, but often used to cover up the adoption of Monopoly (the game) money and the corruption of the entire political and corporate system through bogus central banking.

Oil was a little blip on radar, but often used to cover up the adoption of Monopoly (the game) money and the corruption of the entire political and corporate system through bogus central banking. — synthesis

We now know the US was planning to blow up the Middle East to get oil flowing. The Saudis backed down and were forced to send all oil profits to NY banks. This led to massive investment in Latin American countries which were eventually forced to end all social welfare programs and open their societies to foreign exploitation rather than default on their loans.

So I guess you're saying BLM should just shut up and go home because they already lost. — frank

Er, no. Any more than I'm saying Jews should shut up and go home, or into exile or any other place. I'm saying when we stop arguing about silly things, we are left with a reality of systematic prejudice and marginalisation. And we all know who are the victims and who are the perpetrators as racial groups. I'm saying that white whiners are being plain dishonest in their complaints and fatuous arguments that using terms like 'race war' are unfair to them.

I see. I'm a brown person thinking of it against a backdrop of Malcolm X. I think Mr Morrison was smuggling that into his article and it's blatant bullshit. African Americans would have to learn to stop shooting each other before they could begin organizing violent resistance and I don't say that condescendingly. I say it as a person who's tired of taking care of them in the hospital setting.

As BitterCrank and 180Proof said, history got us here. The global economic system is blocking any way out, not American neo-nazis.

We now know the US was planning to blow up the Middle East to get oil flowing. The Saudis backed down and were forced to send all oil profits to NY banks. This led to massive investment in Latin American countries which were eventually forced to end all social welfare programs and open their societies to foreign exploitation rather than default on their loans. — frank

I get the oil thing, but in a historical context, the creation of FIAT money is a MUCH bigger deal. And the presiding empire is always going to do what it needs to to secure resources (especially when the entire West was dependent on relatively cheap energy).

Ok. If you were to go step by step through the 1970s, how would you describe how we got to fiat money?

Ok. If you were to go step by step through the 1970s, how would you describe how we got to fiat money? — frank

1971 was the final break with the gold standard but this process began decades previous. There are many volumes written on this but here are the brief highlights...

1916 The establishment of the third central bank in the U.S.
1933 FDR suspended the gold standard except in international trade
1971 Nixon's imposition of the USD legal for the balance of international trade

The establishment of FIAT currency is the greatest national fraud you can commit. It is essentially giving license to counterfeit the currency, a crime that would find an individual strung up by their toenails, but when carried out by politicians and bankers is holiday celebrated like none other.

As BitterCrank and 180Proof said, history got us here. The global economic system is blocking any way out, not American neo-nazis. — frank

Apart from the undeniable claims that the past led to the present and and the economy is responsible for inequality, this doesn't say very much to me. If you like history, there is a direct line of proud inheritance from the state sanctioned piracy and invention of white superiority of the Elizabethan age to the British royal family of today, accused of institutional racism. This is not nothing, even though it is global gossip. Let me put it this way, the American War of Independence was a revolution against that exact same institution founded on the notion of the God-given superiority of certain bloodlines. The US is still struggling to rid itself of the psychological legacy of the British Empire. Race was a British invention, and a natural extension of Royal prerogative.

I still don't totally understand why this is. I think it's because it leads to a state of equilibrium between wages and prices so that profit margins become small. Workers are then laid off to try to increase profitability and invite investment for R+D, new facilities and equipment, etc, but that only lowers demand. Now inventory becomes bloated. More workers are laid off. Is this right? — frank

It's not that simple even in a small economy.

It's obvious here and in for example Sweden.

What it comes down to is that the Nordic system leads to centralization where there are central trade union organizations and a central employer union that decide wage increases, which favors the larger companies and corporations and don't look at how bureaucratic and burdensome the whole system comes to be from a perspective of the small firm or entrepreneur. This kind of corporatism leads to an environment which favors large companies and makes it more difficult for smaller firms. It simply comes down to the ease of negotiation: it's easier to negotiate with the 10 largest corporations than 100 000 entrepreneurs, even if the entrepreneurs are far more important to the economy than the 10 largest companies. Also companies that are working in a booming industry where there is huge demand and little supply of trained specialists, the system prohibits luring people with huge salaries. Brain drain to other countries can happen. Also the system increases red tape and as there are many things in place to protect the employee, it also makes the whole issue far more difficult than in let's say the US. Or especially in China.

Hiring employees can become a huge obstacle: If the employee gets an 100 euro salary, the employer has to pay basically 140 euros in all. If you can buy the service for less than 140 euros, then you have a dilemma. After all, hiring an employee or buying the service from an outside company are the two options and just as you don't have any obligations towards your grocery market (other than to pay what you buy) neither has the company for a service bought. Also a welfare state really does make people think twice before going into a low salary job: if your net income goes only barely increases if you take a low paying job and you then you haven't much spare time anymore, it really is a question. Many do alienate from the society and never hold a job. This causes low self esteem and true apathy. Republican politicians can exaggerate this problem, yet the issue is real if not at all comparable to the problems what a non-existent welfare can produce.

You can easily observe that there are always pros and cons in these issues and people can abuse a system, any system there is. And this makes economics and sociology so complex that these issues cannot really be put into a simple math formula in their entirety. Nuances are important.

Apart from the undeniable claims that the past led to the present and and the economy is responsible for inequality, this doesn't say very much to me — unenlightened

It's a focus on who the participants in the war are and what their goals are.

The US is still struggling to rid itself of the psychological legacy of the British Empire. — unenlightened

The whole world was shaped by the British Empire. I guess the good parts and bad parts are fused, as Polanyi said.

And this makes economics and sociology so complex that these issues cannot really be put into a simple math formula in their entirety. Nuances are important — ssu

Reviewing the Nordic countries helped, thanks. I think I have a ways to go before it starts coming together for me.

:100: :clap: