Newson, Good points. The sad thing about Russia is that they believed communist propaganda that capitalism was nothing but the rule of criminals. I heard several Russians say that they disliked the crime and the control the mafia organizations had over every day life, but that was how the US got started so they would just have to put up with it. If Russia has rejected capitalism, it’s their own ignorant version of it they rejected.

newson– You start by saying “you conveniently omitted the rampant inflation during allende’s rule, and the economic depression his marxist policies created.”

Yeah, I guess I did… when I said “And it was a disaster. Inflation more than doubled during the first year– to 375% in 1974. The economy declined by 15 percent. Unemployment climbed from three percent under Allende to 20%. The manufacturing sector collapsed against cheap foreign imports. With price controls and subsidies gone, food became unaffordable. The quality of life plummeted drastically for every sector of society except a tiny number of speculators at the top– the “piranhas”– just as happened when Russia liberalised.”

I should have spelled it out more clearly than by merely saying inflation more than doubled– to 375% under Pinochet. In 1972, under Allende, it rose to 140%. So there’s our score– Pinochet, 375… Allende, 140.

We should note the reason why inflation took off when Allende came to power. There was a clear collaboration between the USG and American corporations to freeze Chile, denying them the funds they needed to operate industry. This has been very thoroughly documented, and inevitably led to the deterioration of the Chilean escudo.

Second, any supposed “veneration” of Allende is irrelevant. Chileans were very strongly behind the government they had elected.

But then you say something clearly very wrong: “pinochet only brought in “the chicago boys” after he realized the military was unable to run the economy. to his credit, this realization was shortly into his rule.”

In fact this aspect of the revolution was set up well in advance, and was as thoroughly thought out as was the military aspect. You would be familiar, I suppose, with the “Brick”?

On September 12, 1973– the morning following the coup– the Brick was published. This was the detailed economic plan for the direction the country was to take place. And it was modelled on the principles Chicago-trained Chilean economists took straight from Friedman’s Capitalism and Freedom– privatisation, deregulation and cuts to social spending. All planned in advance– although The Master himself did not visit the country until March, 1975, to try to save the place from going down the tubes.

Virtually everything else you say in this comment is equally misleading. But these two points will do for a start.

Michael: “But the mass of the Russian people only saw things get worse.”

Simply not true.

Michael: “Median real wages would be a much better measure to look at– if such a thing could be measured. And undeniably there was a sudden speculative frenzy fueled by direct foreign investment that boosted GDP.”

I’m sure the communsit party measured them, but why would you trust them? I don’t recall any boost in GDP in Russia for quite a while. Besides, how would you know if there was a boost or a collapse? All real data collection began after the collapse. I remember a passage from Hedrick Smith’s “The New Russians” in which he described how the head of a cotton growing region sold all of the cotton that his region produced on the world market and pocketed the money. To stay out of trouble with the party, he shared some of the proceeds with his bosses up the ladder. His bosses then entered fake production and delivery amounts in the books.

Michael: “But the reason the shelves were empty is that the State did not make the manufacture of consumer goods a priority. Therefore nothing was made that was worth buying. Most people had huge savings accounts of unspent income. The utility of that cash was that it could be spent in one’s old age on cheap rent, food and health care… a safety net that got severed under the new regime.”
So where did the few consumer goods, especially food, go that the state produced? In fact, what did the people eat to keep them alive, and wear to keep them warm? Store shelves were empty. They had to go to the black market with dollars or do barter. This all was happening decades before the collapse. And the people did not have huge savings. They had rubles in the bank, but they were totally worthless long before the collapse. That’s why no one in the black market would accept them. All the collapse did was prove to the Russian people that the rubles had never been worth anything.
Michael: “It would be hard to make the case from this that the New Russia was on a sounder footing than the USSR was.”
I think it would be impossible. But it wasn’t worse than it had been for decades under communism.
Michael: “My point was only that it was followed by an episode of total laissez faire capitalism– rule by bandits in a lawless realm free of controls– and that that approach also didn’t work.”
I agree that Russia was ruled by bandits, but that has nothing to do with laissez-faire capitalism. Capitalism has always included the rule of law and protection of private property. Russia exchanged one group of thieves for another with the collapse of the USSR. The nation is doing better today solely because of higher oil prices.

Your scholarly manner of argumentation simply blows me away. You wave your hand and say “simply not true”… and presto! The matter is resolved.

I’d rather proceed from the evidence. There are abundant metrics showing the increase in poverty under Yeltsin’s shock program. According to Russian Economic Trends, 1997, for example, the average Russian consumed forty percent less in 1992 than he did in 1991, and a third of the population existed below the poverty line.

Here’s an article well worth reading from the New Statesman:

http://www.newstatesman.com/200210280041

“Russia as we know it today is a product of two experiments in westernisation, one imposed by Lenin, and the second by the market Leninists who ruled the country during the ill-fated years of neoliberal “shock therapy”. Both were disastrous. In the wake of these failed attempts to achieve modernity by blindly following western models.”

And later “As could be foreseen from the beginning, the market Bolshevism that was imposed on Russia in the early 1990s by the Yeltsin government – strongly influenced by the IMF – was ruinous in its effects. Millions of people did not die of starvation as they had during the Stalinist experiment, but a large part of the population was entombed in hopeless poverty.”

The liberalisation program has been a total failure, and is now being rescinded. I note in passing that they tried massive infusions of foreign capital, to no good purpose. The only thing that can help them now is jobs.

The year was 1992 when Yeltsin came to power and the ruble was induced to collapse, wiping out everyone’s life savings and eliminating their pay checks– while at the same time, food prices were allowed to jump to world levels. The old Soviet ruble had worked fairly well on its own terms… but it could not survive the new terms suddenly being imposed on the country. The situation was exactly similar to 1920, when Lenin tried to remake the world all at once, with his own program of economic shock therapy… and also destroyed the ruble.

Neither experiment worked– and both should be enshrined in the history books as a sharp reminder against society ever allowing adventurous radicals to try to remake society.

You also make this erroneous statement: “So where did the few consumer goods, especially food, go that the state produced? In fact, what did the people eat to keep them alive, and wear to keep them warm? Store shelves were empty. They had to go to the black market with dollars or do barter. This all was happening decades before the collapse. And the people did not have huge savings. They had rubles in the bank, but they were totally worthless long before the collapse.”

I was there during Brezhnev’s rule– the nadir of the Soviet experience. And everyone was housed, fed and warmly clothed out of the ruble economy. The clothes were cheap and flimsy, but the coats were adequately warm. Housing was dilapidated and crowded– but it existed and was kept warm in the winter. No one was yet homeless except a handful of drunks. And there was never any shortage of cheap, boring food– although much of that was due to US wheat sales. Soviet agriculture was a complete mess but there was food on the table.

You’re thinking of luxury goods. If you wanted a bottle of Johnny Walker you had to hustle some dollars or marks. The people I knew didn’t have either… but they lived a secure life and did have a lot of money put away in the bank. Their lives were destroyed in the experiment. The access to Johnny Walker wasn’t worth it.

michael says:
“Allende was elected in 1970, and put his economic program into place immediately. Yet you admit inflation only became a serious problem in August, 1972. So what was it that suddenly altered the financial terrain in 1972?”
obviously you’re not aware of the austrian view of inflation (growth in money supply). there can be a considerable lag from when the money supply is boosted, and when its effect shows up via rising retail/producer/asset prices. massive money supply growth in germany during world war I didn’t correspond to hyperinflation until the early twenties.

militant trade unions, greedy businessmen, rising oil prices or even henry kissinger don’t cause inflation, which is always a monetary phenomenon. blame the central bank of chile (under allende’s control).

allende implemented price-control over all key sectors of the economy, so i think the accuracy of the cpi is likely to be especially dubious during this period; black market prices for goods and services (which naturally sprung up under allende) would have shown a much higher figure.

cpi is a flawed and problematic construct in the first place. pinochet left the country with much improved child mortality, and life expectancy figures, and these are harder to fudge (though i note that cuba registers births retrospectively, on infant’s first birthday. can’t be too careful with that marvelous healthcare reputation! sicko, indeed.)

chilean capital had already fled chile prior to allende’s electoral win, as the wealthy rightly anticipated the expropriation that would occur. the us trade embargo occurred after kennecott and anaconda were seized without recompense (allende’s mob figured that they’d already got enough profit in the previous years!).

castro uses the us trade embargo towards cuba as an excuse for the shocking standard of living of his fellow cubans (whose pockets are as full of “chavitas” as their government shops and bellies are empty).

our one possible point of agreement is the us should stay out of other countries’ business. it’s both morally wrong and counterproductive, allowing socialist propagandistas like yourself to yet again deny marxism’s time-worn legacy – hunger,death and state terror, all on a vast scale.

michael says:
“Allende was elected in 1970, and put his economic program into place immediately. Yet you admit inflation only became a serious problem in August, 1972. So what was it that suddenly altered the financial terrain in 1972?”
To which newson counters
“obviously you’re not aware of the austrian view of inflation (growth in money supply). there can be a considerable lag from when the money supply is boosted, and when its effect shows up via rising retail/producer/asset prices. massive money supply growth in germany during world war I didn’t correspond to hyperinflation until the early twenties. militant trade unions, greedy businessmen, rising oil prices or even henry kissinger don’t cause inflation, which is always a monetary phenomenon. blame the central bank of chile (under allende’s control).”

Admirably tautological answer. But I would disagree with the rigid definitions. It may be that that form of inflation caused by an increase in the money supply is always a monetary phenomenon. Because we found that answer in the textbook, so it must be right. But what happened when foreign investors pulled the rug out from under Chile was that the liquidity had been removed from the economy. And with it, the subsidies that helped people afford food on their low salaries (and in fact many of the salaries themselves) began to vanish. So prices went up, while incomes dropped.

We need a new word, to describe what happens when prices go up and incomes drop. The condition you are trying to relate it to– “inflation”– is a condition where there is a superabundance of money, and costs and income go up in tandem.

In Chile the money was being “disappeared”.

In your final comment, you try to equate any concern that economics should try to benefit the actual people who live in actual countries, with a fondness for Stalin’s terror. It’s a bogus argument. When state-owned eneterprises churn off a profit, the money can be used to fund social programs of great benefit to the public, like schools, healthcare and subsidies for expensive necessities (food, for example). There’s nothing wrong with that. It’s a legitimate use of money and it works to benefit society.

On the other hand, when state-owned enterprises are sold off to private investors the profit stream only goes into the pockets of a small number of people who don’t really need the additional money– they’re already rich. The state will have in essence, “sold the cow” upon whose milk its people had been subsisting.

And there’s nothing wrong with that either… assuming human life is of no value in one’s system. I think the distinction is quite clear without resorting to lurid imagery– “hunger, death and state terror”– and in fact would note that under Allende there was no actual state terror. While under Pinochet, there demonstrably was.

Michael: “I’d rather proceed from the evidence. There are abundant metrics showing the increase in poverty under Yeltsin’s shock program.”

You probably assume that I make this stuff up just to annoy you. But I proceed from the evidence, too. I just read different material than what you read. You kind find support for any position, no matter how stupid, if you search long enough. And as Mises was fond of saying, you can find historical evidence to support any position. To make sense of history, you have to approach it with a theory of how things work that is sound, otherwise you’ll be fooled by all kinds of charlatans.

I can guarantee you that I could post articles from experts that oppose yours on every point. Why don’t I? If you were someone that appeared to be searching for the truth and really wanted answers to your questions, I might put out the effort.

Just curious, but I wonder why you think Gorbachev went so far in his reforms if Russians were doing so well under communism? In interviews with him, he claimed that under Brezhnev he could see the economy falling apart and that people would eventually be starving if he didn’t make radical changes. But then, I guess you’ll be able to provide plenty of statistics that show Gorbachev didn’t know what he was talking about, even though he was in charge of agriculture.

As for what Hayek would have done about Russia after the collapse, no one can say. But I have read Jeffrey Sachs, and others, accounts of advising the Russians after the collapse. Sachs also advised Poland, where the transition went very well. He says that he didn’t want to advise Poland because the economy was such a mess, but one night he met a young mother crying because she could find no milk in the the city for her baby, so he decided to give it a shot.

Poland’s transition went relatively well. Then Yeltsin invited him to Russia. He gave the Russians essentially the same advice he had given the Polish, but Russia became a disaster. Years later, he said that he didn’t realize at the time that communism had completely destroyed all of the institutions in Russia that are needed for a free market to work. That hadn’t happened in Poland.

If I had to guess, I would say that Hayek would advise the Russians to establish the rule of law first and the institutions to support it as quickly as possible, before privatizing everything. But that takes time and Russians were starving.

The lack of law and institutions to support it is the reason the Chicago Boys, and the similar Washington Consensus had failed consistently in most countries where it has been tried. Douglass North has revived the interest in institutions which Austrians never lost. But it was too late for the transition from communism.

“You probably assume that I make this stuff up just to annoy you. But I proceed from the evidence, too. I just read different material than what you read. You kind find support for any position, no matter how stupid, if you search long enough. And as Mises was fond of saying, you can find historical evidence to support any position. To make sense of history, you have to approach it with a theory of how things work that is sound, otherwise you’ll be fooled by all kinds of charlatans.

“I can guarantee you that I could post articles from experts that oppose yours on every point. Why don’t I? If you were someone that appeared to be searching for the truth and really wanted answers to your questions, I might put out the effort.”

Better answer, fundy– but not best. I find I’m still going to the trouble to bring up supporting source material, while you aren’t. The reason I’m asking is that I have been looking. And all I’m finding are dry, theoretical tracts describing the rarefied world of money under a perfect bell jar. I have found next to nada describing an instance where the economy has been successfully liberalised– except those in which the evidence has been cooked, and important facts omitted. I would like more sound factual analysis. So please, provide it… if not for me, then for others on this board.

“Just curious, but I wonder why you think Gorbachev went so far in his reforms if Russians were doing so well under communism?”

There are many contributing reasons for the fall of Communism in the USSR. To me, the most significant would be the collapse of oil prices in, what, 1986? Oil formed the basis for the Union’s cash income. And with that profit center deteriorated, they could no longer continue to support both a listless consumer economy and a bloated military budget. So something had to give. Gorbachev understood this, and tried to move the country away from a command economy and into a more mixed developmental model.

Noted, that reforms were instituted well prior to the softening of oil prices. It was obvious to everyone that the economy under Brezhnev was a corpse still walking.

The one jarring note I’m finding in the arguments I read is the all-or-nothing outlook. To me it’s the hallmark of absolutism to believe totally in one theory, and think that by virtue of its correctness, all other theories must be totally wrong. And that kind of zero-sum thinking has been behind the failure of all the great isms of the 20th century.

In contrast, those economies that have offered the best blend of general prosperity and financial stability have been mixed approaches, cobbled together one program at a time. I would propose the USA from Roosevelt through Kennedy as one example– during which time we rose to a commanding position in the world– and nearly all of Latin America before it was subverted to ideological radicalism.

Latin America? Jobs, especially in the industrial sector, were expanding rapidly thanks to strong protectionism. Workers shared in the profits, due to a strong union movement. Government-owned businesses spun off profits that went into infrastructure, education and even subsidised groceries– all of which directly raised the average person’s standard of living. Note that under the privatisation model such profits disappear from the country, going instead into the pockets of investors.

The price? Some level of inflation had been unavoidable– and people had learned to cope with that.

Best of all, there was no coercion. Democracy was mostly fair and free, and a tightly controlled police state was unnecessary due to the popularity of the governments.

The problem was that these successful experiments were all cut short by the advent of military intervention, and the imposed shock of an instant transformation to pure capitalism. Poverty and oppression ballooned simultaneously. I think the historic record will bear me out here.

But if you can find sources with eyes not half shut, I would very much like to read of the positive side of these dark events. Something on the order of Daniel Yergin’s The Commanding Heights, or Joseph Stiglitz’s Globalisation and its Discontents. I am very aware that one cannot form an accurate opinion about anything in the economic and political spheres without looking closely into the arguments held by all sides in the debate. As yet, I’ve found the arguments put forth by the advocates of extreme capitalism to be nearly as weak as those propounded by the Marxists of yore.

I am willing to be persuaded by reason in the service of truth.

BTW I agree with you that the rule of law in the New Russia would have been crucial. However such a rule had never been a part of the Russian character. Under the Czars the law was seen to be subversive, in that it could conceivably go against the will of the sovereign. And under the Bolsheviks– well, what can I say. Interesting to note that at the fall of Communism, many of the same people who were prospering under the wing of the Party prospered under the Great Sell-off. The only thing that happened was that the deck got shuffled, and a fresh hand dealt.

I had a good friend who was studying on a Fulbright at the Supreme Court (DC), so he could bring a strong legal framework back to the Bulgarian Supreme Court (his employer) and help to establish the rule of law there. How sadly pathetic a task. He was Don Quijote, tilting at a windmill. The fix was already in. That was in 1993.

Michael: “I have found next to nada describing an instance where the economy has been successfully liberalised– except those in which the evidence has been cooked, and important facts omitted.”

Have you tried looking in S. Korea, Taiwan, Vietnam, Poland, The Czech Republic, Hungary, the Baltic countries, India, or China? All of those countries have liberalized their economies and experienced substantial increases in wealth.

Michael: “To me, the most significant would be the collapse of oil prices in, what, 1986?”

But the collapse in oil prices in 86 did nothing but return prices to what they had been before the surge in 1973. How did the USSR survive from 1912 to 1973 without those high prices? I realize that you refuse to read anything that contradicts your preconceived ideas, but you really ought to read something on Gorbachev. The US had to feed the Soviets during the 80′s, even though the USSR enjoyed farmland that is among the best in the world. What did the price of oil have to do with their inability to grow food? Communism collapsed because of the inherent contradictions in socialism. The rise in oil prices in the 70′s pushed the date of that collapse to a later time. Gorbachev understood that and desperately tried to save communism.

Michael: “In contrast, those economies that have offered the best blend of general prosperity and financial stability have been mixed approaches, cobbled together one program at a time.”

That’s a very superficial analysis. After WWII most of the world embraced socialism. Roosevelt tried to turn the US into a socialist nation but failed. I could just as well argue that the US attained its position because it implemented less socialism than did the rest of the world. Yes we have grown with a mixed economy, but the real question is whether or not the economy grew because of the mixture or in spite of it. Economics proves that we grew in spite of the mixture of socialism.

Michael: “Note that under the privatisation model such profits disappear from the country, going instead into the pockets of investors.”

That’s nonsense. If what you write about S America is true, then why did governfments try liberalizing their economies? Were they just stupid, or bought off by greedy US corporations? None of them wanted liberalization and they fought it desperately. But their protectionist policies had impoverished their countries. You can find proof of this simply by going to the library and picking any book on third world economic development at random. The text I had for my class in in was by Todaro, and it was pretty good.

Michael: “According to Russian Economic Trends, 1997, for example, the average Russian consumed forty percent less in 1992 than he did in 1991, and a third of the population existed below the poverty line.”

So you accept this uncritically? That would represent a greater drop than what the US experienced in the Great Depression. And it would be an average, so the drop in consumption of some would be greater than others, some 10%, orthers maybe 60%. But with the great amount of poverty already existing in Russia, don’t you think that mass starvation would have occurred with that great a decline in consumption? After all, most Russians were living hand-to-mouth before that drop. The only thing left for them to consume less of was food. But there were no reports of mass starvation.

And is that reported drop real, or was it a result of changes in reporting. We know for a fact that the state lied about all of its production for its entire existence. Was the change from 1991 to 1992 nothing more than greater honesty in reporting?

Newson, you fulfill my description of the kind of person who equates any advocate of a mixed economy with having been a henchman of Stalin:

“no matter how many dyed-in-the-wool socialists i talk to, i can never get a convincing answer as to why it is that nobody flees from florida to cuba. in a wheel-inner, sharks, currents and all.”

Apparently you haven’t talked with many “dyed in the wool” people like me. The people who fled from Cuba in 1960 were the ones who had been prospering under Batista. They fled a socialist Cuba from fear of losing their wealth and position to the unwashed masses.

“why is it that those who failed in their bid to hop the berlin wall all got the slug from the communist side? these are the nuts-and-bolts questions i’d like to hear answered.”

People then were fleeing from stagnation into opportunity. The economies and the politics of all the Warsaw Pact countries were an unmitigated disaster. These are not models to be followed… and there is no one on the scene today claiming that they are. The refugees you describe fled toward mixed economies– what you would call welfare states where capitalism was practised. They did not flee toward utopian free market nirvanas.

“here in australia, we’ve got a large vietnamese community who braved pirates, fins and ocean to arrive on our shores. what could have been so terrible about communism that entire families risked their lives aboard overcrowded junks?”

In Vietnam a portion of the public sided with the foreign invaders. Most were Catholic and pro-French, later pro-American. The Americans lost the war. The collaborators, seen by their compatriots as quislings, fled.

In Iraq, assuming that the same scenario ultimately replays itself (we can hardly afford to continue the way we’re going for another hundred years), we can anticipate at some point in the future a similar stream of refugees, fleeing toward our shores to escape retribution. In fact, come to think of it, a couple of million of them have fled the New World Order already. We just don’t let them into the country.

“these people embarrass and discomfort those who find that words speak louder than actions.”

Rhetoric meant to wound. But I applaud anyone becoming an economic or a political refugee in the attempt to better his family’s prospects. The Mexicans who fled NAFTA to find work in the US, for instance, or our own Hmong and Vietnamese. My applause is weaker for those who grow rich on extractive wealth under foreign sponsored regimes, who manage to smuggle it out of the country it came from.

michael,

You keep tossing around words like “privatisation,” “free market(s),” laissez-faire capitalism,” ect, but the way you use them suggests that you don’t have mean the same things many as the other people on this site. So, what exactly do you mean by these terms and phrases?

The reason I ask is you have labled as privatisation and free markets many thing and/or countries I am hard pressed to look at as nothing more than more government regulation that is sold to the public as “privatisation” and “free markets” when in fact is just another example of “state” or “crony” capitalism. I will address what I mean be these term and why I do not, for instance, view Pinochet’s dictatorship as being anywhere near a free market, if you answer my question first.

Thank you,

DavidM

michael says:
“The people who fled from Cuba in 1960 were the ones who had been prospering under Batista. “

you’re clutching at straws. the batista refugees didn’t hop into tyres and cross the straits, they flew or got a berth on a cruiser. you know who i’m talking about – the streams who braved the elements this decade, the nineties, the eighties, the seventies etc.

“The poor were poor under Communism, but had jobs and life savings. After, the poor only had their furniture and clothing.”

your earlier comments, such as above, are apologies for communism. as for refugees fleeing to “market utopias”, give me a break. they were fleeing misery, economic and psychological, trusting whatever they’d find on the other side would have to be better. people don’t risk their necks running to utopias, they do it to flee dystopias.

David M says “You keep tossing around words like “privatisation,” “free market(s),” laissez-faire capitalism,” ect, but the way you use them suggests that you don’t have mean the same things many as the other people on this site. So, what exactly do you mean by these terms and phrases?

“The reason I ask is you have labled as privatisation and free markets many thing and/or countries I am hard pressed to look at as nothing more than more government regulation that is sold to the public as “privatisation” and “free markets” when in fact is just another example of “state” or “crony” capitalism. I will address what I mean be these term and why I do not, for instance, view Pinochet’s dictatorship as being anywhere near a free market, if you answer my question first.”

I would be very interested in your explanation of “state and crony capitalism”, and especially any instance where government regulation has been “sold to the public” as privatisation. To that end, here’s my definition of privatisation:

The offering of publicly owned assets for sale to investors– whether foreign or domestic.

In amplification of that definition, these are normally assets the government holds or runs for the benefit of its people. State-owned assets retain ownership of depletable national treasures, such as mineral wealth, or manufacturing plant that provides both jobs and income, or service sectors vital to the common wealth, such as health, education, electricity or water.

So that normally, some chicanery is involved in forcing those governments to part with the assets that form the basis of their societal infrastructure. Since a government committed to the welfare of its public can not be persuaded to part, even reluctantly, with vital assets, this usually involves some engineered crisis, such as a military coup or an induced financial panic. But we have seen instances where the mere threat of financial pressure is sufficient to induce a government to capitulate, and to put state-run assets on the auction block. South Africa on independence would be my example.

Normally, these are distress sales. The only viable bidder will come to pick up the holdings at pennies on the dollar. And a complicit government, newly installed and ready to sanction the sale, will grant its approval. As was done in Chile, Russia and Indonesia.

This, to me, would be the definition of crony capitalism. It thrives on crises in left-center nations, swooping in to deliver the coup de grace to the old financial and governing structures and to inventory the spoils for immediate sale.

If I were to characterise the nature of these crises, I think I could offer as many instances of normal cyclic readjustments adversely engineered by outside elements as I could find instances of abysmal mismanagement. But we would have to discuss individual instances rather than form some blanket rule as to how left governments are induced to fail in an increasingly right world.

I like your quotation marks around “laissez faire” and “free market” capitalism, because these are the words normally used by such a regime to describe their activities. Laissez faire, “hands off”, would mean that no one had the ability to stop them from going through with their privatisation plans.

Pinochet, of course, retained state ownership of the copper mines. Without that income stream he would have had no source of funds with which to pay his security apparatus.

Michael: “Capitalism could not stand such a state of affairs being allowed to continue. So they demanded entry into the capital markets of these young economies, and urged Western investors to plunge into the exciting world of Asian stocks.”

That’s just stupid. Do you want to discuss economics or indulge your irrational socialist fantasies?

Michael: “Then, as soon as these markets began to soften and correct themselves, the “sell” order came. Investors all panicked and stampeded for the exits.”

Stock markets don’t “soften” for no reason at all, unless you’re a mainstream economist where “shocks” occur frequently. The markets fell because some big deals went south, and they went south because the investors found that corrupt government officials had stolen the money.

Michael: “The only remedy is government intervention, and in fact our US economy has just been bailed out by the deep pockets of Uncle Sam, who provided short terms loans and re-created a state of liquidity.”

There’s no such thing as a liquidity crisis. The money supply falls because businesses fail and can’t pay back their loans. What the popular media and mainstream econ calls a “liquidity” crisis is nothing more than the fact that loans are harder to come by and the interest is higher than some people would like. That’s not a crisis; it’s an opinion.

Michael:”. But the Asian panic didn’t. Why? Because the word went out to throw no lifelines to the struggling Asian banks.”

That’s the job of the IMF, and it poured billions of dollars of good money after bad.

Michael: “No interim funds were provided to retore stability to markets that were fundamentally sound.”

That’s nonsense. How could they be fundamentally sound? You’re resorting Deux ex machina for explanations of economic events. Economics is about cause and effect, not shocks or miracles or bad luck.

Michael: “And without short term funds to tide them over, every affected nation went under in a crisis that was very deliberately engineered.”

You won’t find me defending the IMF. We should have abolished it a long time ago. But to blame the IMF for deliberately engineering the Asian financial debacle is silly. What’s next, the aliens from outerspace defense?

Michael: “Then, once the Asian currencies collapsed in a heap, they stepped back in to dictate the terms of a bailout. Which amounted to a draconian takeover of those prostrate economies, a selloff of state-owned assets, the demise of social supports like pensions and schools, and especially the end of job security.”

You give your ideology away in lamenting the selling of state-owned assets. State-owned businesses have sold for a penny on the dollar because they weren’t businesses at all, but a method of wealth distribution. They were totally incompetent at what they did and never made enough money to support their bloated labor forces.

Michael: “It’s like burning down a man’s house, and then offering him a construction loan so he can put up another roof.”

The truth is that the Asian economies burned their own housed to the ground through vast corruption, then wanted a grant instead of a loan to rebuild from the IMF.

Michael: “Certainly you can’t have missed the part where Joseph Stiglitz, in his position as Chief Economist and Senior VP of the World Bank, noticed all this unfolding. Could he not see it through his office window?”

Sitglitz saw everything, but his socialist leanings persuaded him to lie about all of it.

Fundamentalist– You offer up a lot of points worth contending. It may require more than one post to do them all justice. But I’d like to begin by suggesting that it’s very naive to suggest that the USG, the EU, the World Bank and the IMF are not all run by the same people– and that those people are not at the very bedrock of the financial system. Look at Rumsfeld and Cheney, for example, who are career corporate players and Friedman disciples. Or James Baker.

From the time of Bretton Woods forward, international capitalism decided it would be necessary to put its affairs on a sound footing and hammer out points of agreement. They’re not the sort of people to ignore the lessons of history– and foremost among those lessons is that they should present a united front on the most basic structure of the international order… if it is not to collapse again in rancorous fighting between those who would be better off sharing up the collected spoils of the world. Hence their agreement on the world’s reserve currency, backed not by gold but by common agreement. As well as on the other rules of the game. They find they are most effective when they act in concert, and not at cross purposes.

There is also the strategic aspect to consider. If an economy one would like to take over is truly national, and independent, the first thing one has to do is to cultivate a dependency. And about the only way that process can be begun is to invest in it. The reasoning behind offering massive loans earmarked for “foreign aid” is not simply to waste the taxpayers’ money but to employ it toward the ends of effective domination of the host, or victim. The point is not to make money on the loan, in the form of interest paid, but to lead the victim to the point where they cannot pay. Then the victim’s assets may be legitimately forfeited and its control over its own economy lost.

This is the essential aspect of foreign aid you need to understand– the purpose toward which it is employed. Now let’s go to the issue of the concept “liquidity crisis”. Your belief is that there can be no such thing– a statement I find astounding.

Where to begin? It would be so much easier had you ever worked at some responsible level within a bank. Cash reserves are only a fraction of outstanding loans– in any bank. Therefore it is vulnerable to a run. If you want to provoke a run– or enjoy maneuverability in a natural downturn– you need to have substantial holdings on deposit, whether the bank in question is a large national bank or Mom and Pop’s Savings Company on the corner.

Have you ever wondered why China prefers to lodge substantial earnings in dollars in US Treasury investments, rather than use that money to further grow their own domestic economy? It’s insurance against this kind of manipulation. These people have been capitalists for many centuries, and don’t care to be vulnerable to any hostile takeovers… so they invest in us. Places like Thailand and South Korea in the 1990s were not only smaller, they were far more naive about the predatory nature of the game between nations.

Not that they didn’t make the usual mistakes every bourse makes in boom times. Here’s a good summary of the things South Korea could have done better:

http://www.jpri.org/publications/workingpapers/wp51.html

I don’t think you could say though that they were any shakier than the world’s largest investment houses, for instance, who are all suffering multi-billion dollar losses currently for having engaged in an irresistably sexy market in mortgage backed securities. The prospect of such vast wealth is beguiling. They should have done their homework first, before plunging in.

And I agree that whenever the US Treasury or the Fed or anyone else is required to step in and help save someone’s hide, they get to re-write the rules of the game. That only makes good sense. Look at the S&L crisis back in the 80s, for instance.

What I AM saying, however, is that the Tigers– the Thais, Koreans, Indonesians, Malaysians, etc– had help in being pushed over. They were artfully destabilized by demands that they open themselves up to foreign investment back in the mid-1990s. They retained local control over ownership of Asian-owned companies and state control of nationally owned companies, but they opened up their financial sector to outside investment. And in so doing, let a lot of money in the door that led directly to the over-valuation of investments and balloon creation.

Let us do some searching, and see how China avoided melting down in 1997. Well what do you know? They resisted opening up their financial markets, and retained strong capital controls. Otherwise they were doing much the same thing as every other Asian nation.

Then when the IMF rushed in to the rescue, the conditions being mandated for acceptance of the bailout loans (SK’s alone amounted to $58 billion) went well beyond what was necessary to correct the workings of the host country’s financial markets. The IMF had even concluded that the crisis had been unrelated to excessive government spending– yet they demanded heavy budget cuts, massive layoffs of employees in government-run industries, the lowering of tariffs and other trade barriers and a host of other mandates designed to bring the economies of those mations to heel.

Note that Malaysia, not quite so exposed as were the other Tigers to a hostile takeover, managed to swim out of the crisis just fine– even though in every other respect beside the degree to which they were open to foreign investment, they ran their economy in exactly the same way. Hence the demonization here of Mahathir Muhamad.

The rest is history. A bubble in the market, a momentary panic and every minister of finance in the affected nations is coming to 19th Street with their hat in their hand, begging for some tide-me-over money. The price that was paid was that they submit to globalization, and to let outside interests take control over their lives.

Did the USG direct the terms of the bailout? In the case of South Korea, negotiations were conducted jointly by the ROK finance ministry, the IMF and the US Treasury Undersecretary for International Affairs, David Lipton. You be the judge.

What an excellent discussion! Getting a little drawn out by now though. I just want to respond to some comments that came back at me way back around may 20.

newson: “if instead of seizing your car from the garage for the greater good, suppose i control where you drive, for what purpose, whom you carry, and impose on you reporting obligations. now, is the car really yours in any other sense but nominal? or is it really mine, except you get to wash it and fill the tank? i am the state.”

I appreciate that point, but it goes to an extreme. Suppose instead the state controls my speed limit, makes me stop at certain intersections, makes me wear a seatbelt. I’m ok with those controls because it makes driving safer and more orderly. Doesn’t necessarily mean I obey every law every time, but it’s a choice of risk vs. reward. Now, if the state wants to do what you’re proposing newson, I’ll be motivated to fight it, because it goes too far. It’s a constant struggle to maintain balance, it’s not static.

Josh m: “(IMO), the fundamental error that socialists (like Molly Ivins) make is the belief that the state can prevent injustice by ‘regulating’ (i.e., interfering with) voluntary cooperation.
They haven’t yet realized (at least) two things:
A) What exactly is ‘injustice’, and,
B) That the state’s only legitimate function (if it has one) is enforcement of property rights.”

I assume you, josh m, think anyone who doesn’t reject all government regulation is a socialist, so beyond that error in perception, why do you set the standard at an impossible level? Indeed, it’s the ideal that regulation would prevent injustice, but it’s not realistic. Is it not “good enough” that regulation reduces injustice, stops it when it’s happening and can potentially prevent it? It’s impossible that injustice be totally prevented, in any type of society. Regulation isn’t a forethought, it’s not a socialist agenda to control free markets, it’s a response to something that is broken. It is in fact the enforcement of the property rights of people, when voluntary cooperation has been violated. This is the application in reality, your comment only applies in theory. To reiterate, it’s extremist.

fundamentalist:”Capitalists decided long ago to let natural law decide the morality of some issues, such as theft, fraud, and murder. On issues like greed and envy, capitalists left the decision to individuals. Do you really think the state could do better?”
Absolutely not! I don’t really understand your point though. Greed and envy aren’t illegal, the state has no obligation to address bad emotions. The State is obligated to answer “what is best for people” in specific cases. Pollution regulation for example: corporations can make more money if allowed to pollute uncontrollably, but it’s in the best interest of people that they not be allowed to do that. As individuals we’re all obligated to make this judgment constantly, the government only needs to when the property rights of people are violated.

fundamentalist: “Capitalism had nothing to do with greed, waste or consumerism. If those exist in a society, it’s because the people are free to act that way, not because capitalism makes them that way.

EXCEPT, in the context of my post, which was to criticize Rockwell for promoting greed, waste and consumerism as “blessings” of capitalism. Let’s be real, would you not agree capitalism affords us more freedom than socialism to be greedy and wasteful? More freedom, now that’s a blessing.

fundamentalist: “Regardless, what gives you, or anyone, the right to determine what is greed, waste or consumerism? What you see as greed may be caused by envy on your part. Envy used to be considered as immoral as greed, but socialism has made envy respectable.”
Wow, are you a conservative or what, bringing out the “e” word on me. No fundamentalist, envy is not respectable, I frankly have no idea why you think it would be. We each individually determine what is greed, waste or consumerism. There are standard definitions, and some agreement on a range of a definition as it applies to specific circumstances, but there will always be disagreement of perception by some people. How strange to think one would be envious of greed! Simply because you have a lot of stuff/money does not mean that you are greedy. Try a dictionary if you’re not sure what it means.

fundamentalist: “And why is a buffet table waste? It saves the cost of labor. I assume you think it wastes food, but would you rather waste labor?”
Yes, to answer your question. Labor as a resource is far more abundant than food.

fundamentalist: “I don’t know what you mean by consumerism, but usually people use the term when they think other people buy too many things. Again, is that envy? You’re judging other people without an objective standard, using your personal preferences as the guide.”
People DO buy too many things. Is that so hard to recognize? How do you know my standard isn’t objective? You have no way to know my standard, that’s true, but really do you want to argue that people don’t buy too many things? Personal preference has nothing to do with it, objectively speaking, we are a consumeristic society. Our government just cut us checks to make sure of it. Advertising works, we’re bombarded with it everywhere we go, you bet we suffer severe consumerism. As I said: “Capitalism is good; greed, waste, consumerism are bad.”

Robpo: “EXCEPT, in the context of my post, which was to criticize Rockwell for promoting greed, waste and consumerism as “blessings” of capitalism. Let’s be real, would you not agree capitalism affords us more freedom than socialism to be greedy and wasteful?”

Rockwell did not promote greed, waste and consumerism. You chose to judge the activities of others as greed, waste and consumerism. It was your opinion, nothing else, and I disagree with your opinion. While capitalism provides more freedom, freedom has nothing to do with greed and waste, which are part of the nature of man. Poor people and socialists can be among the greediest people on earth.

But when it comes to waste, nothing tops the extreme wastefulness of socialism. As Mises pointed out in the 1920′s, socialism can never determine the efficient use of resources without a market. As a result, socialism wastes resources and impoverishes people; the USSR and China under pure communism, N. Korea, and Cuba are proof.

Robpo: “No fundamentalist, envy is not respectable.”

The source of socialism’s power is envy; socialism has made envy respectable.

Robpo: “How strange to think one would be envious of greed!”

No one is envious of greed. People envy the wealth of others and judge the motives of wealthy people as being greedy. Envy is the driving force behind hatred of capitalism and freedom.

Robpo: “Labor as a resource is far more abundant than food.”

But labor is still scarce, so why waste it? Besides, you haven’t established that food was being wasted; that’s just your opinion. In my opinion a buffet does not waste food.

Robpo: “People DO buy too many things. Is that so hard to recognize? …objectively speaking, we are a consumeristic society. ”

Only if you put yourself in the position of God do you have the authority to judge that people buy too many things. No, you don’t have an objective standard. An objective standard would be something like this: spending more than $40,000/yr on a family is four is spending too much. What’s your standard?

I’m sure that you, like many others, think you’re enlightening us hopelessly ignorant capitalists, but you should know that we’ve heard everything you have said many times before. I got it crammed down my throat in graduate school. It spews from the fount of Marxist socialism. You may not call yourself a socialist, most socialists don’t. But your ideas came from Karl Marx, whether you recognize it or not.

“I follow the teaching of Jesus where he said to cast the telephone pole out of your own eye before attempting to pick the speck of dust out of your neighbor’s”.

That’s an anachronism, surely?

Thanks, robpo, for bringing into the foreground a couple of core arguments I’ve seen repeated many times over.

First, the one on greed and envy. There is a certain brand of thinking that, whenever a class of people is accused of greed, responds with “Oh, they must be envious”. They sincerely can think of no other reason why someone might be offended by greed. I don’t think education is a workable approach here. We’re talking two different worlds.

Next, the one that says the only legitimate function of the state is the enforcement of property rights.

This is certainly a legitimate POV for someone who has built something and hopes to keep it from the grasp of others. But so often we see that its strongest proponents are those who have taken something, and don’t want to share it. I see advocates of strong property rights as often being like the Robber Barons of medieval Germany. They established the original Austrian proto-states to serve no other purpose than to raise and maintain personal armies, to protect the land they had taken. Those who lived on that land were to be their serfs. And, having no property, the serfs had no function other than to serve the ends of the barony, as defined by the Baron.

To me, it’s not only simplistic but outmoded. We no longer live in primitive times. Your comment on traffic enforcement is apt. And rules of the road are also necessary when it comes to directing the orderly flow of financial traffic. We can certainly see what happens when safeguards are not in place. Greed gets the better of people, and whole markets either collapse or require bailout.

To summarize, if you own a plantation and a lot of slaves, you strongly favor property rights. If you’re a slave, probably not. A fun conversation to have on this site would be to bring up the concept of human rights (ack!).

In other words, we’re just talking business as usual, no secret-password conspiracy.

Oh, it absolutely is a conspiracy. It’s just the most poorly concealed conspiracy in world history.

Michael: “To summarize, if you own a plantation and a lot of slaves, you strongly favor property rights. If you’re a slave, probably not. A fun conversation to have on this site would be to bring up the concept of human rights (ack!).”

The wealthy don’t need property rights. As the nobility of Europe demonstrated, they could take care of their property regardless of the state of law. The people who need the state to protect their property are the poor. Otherwised, the rich a free to steal what they want as the history of the world outside of capitalism proves.

Michael: “To me, it’s not only simplistic but outmoded. We no longer live in primitive times.”

This is a typical defense of intervention: modern life is far too complex to apply the principles of simpler times. It’s the same argument that the institutionalists and the German Historical school offered at the end of the 19th century: no principles of economics exist. Every period in history is unique and its unique problems require unique solutions. There are no general principles that can be derived from such experience.

Michael: “Your comment on traffic enforcement is apt. And rules of the road are also necessary when it comes to directing the orderly flow of financial traffic.”

That would be apt if financial markets operated like car traffic on a highway, but it doesn’t. There is nothing about financial markets that resemble highways. No exchange of property takes place on highways in the normal course of travel.

Michael: “We can certainly see what happens when safeguards are not in place. Greed gets the better of people, and whole markets either collapse or require bailout.”

So you’re more afraid of greedy people than you are of state intervention. But why would you trust a bitter, underpaid bureaucrat? Just because someone enters government service doesn’t mean that a fairy taps them on the head with a wand and infuses them with wisdom they never had before. Very few bureaucrats understand anything at all about business or economics, as they prove on a daily basis.

Or your might assume, like most socialists, that bureaucrats are motivated only by virtuous concern for the public good. But there is no fairy to infuse virtue into bureaucrats, either. They are no more virtuous, or less so, than their counterparts in business. If they are elected officials, they are generally on the payroll of some large campaign contributor whose bidding they submit to. If an appointed official to a state agency, they are appointed by the same elected officials and have been chosen because they will do the bidding of the elected officials campaign contributors. That’s why most state regulation serves no purpose but to limit competition in an industry and/or increase the income of people in that industry.

Capitalism is democratic economics in which the consumer is king and votes for the direction the economy will take with his dollars. State intervention steals that power to choose from the consumer and places it in the hands of bitter, underpaid bureaucrats in the service of campaign contributors.

Fundamentalist– There’s no way I can adequately address most of your latest arguments. To me your style of argument is narrow, doctrinaire and simplistic, and applies only to some abstract world of theory where some rules are always right, and others never right. You appear not to be able to comprehend nuance, or situational shades of grey. But this exchange is interesting:

Michael: “We can certainly see what happens when safeguards are not in place. Greed gets the better of people, and whole markets either collapse or require bailout.”

You: “So you’re more afraid of greedy people than you are of state intervention. But why would you trust a bitter, underpaid bureaucrat?”

In which universe are our lives molded by bitter, underpaid bureaucrats? The world is run, as it always has been, by rich, powerful and influential sorts who pay handsomely to have snow stuffed up our noses by the media. Thus they inform our intellects that they are only selfless public servants, saving us from oppression by shadowy Others– currently, Al Qaeda types.

The economic system they not only believe in but maintain in practise is one that maximises profit by socializing expenses and privatising gains. I’m not sure von Mises devotes a lot of time to this… but you should start from this premise, just as an exercise, and see whether you can validate it.

Take a look, for example, at the explosion of government contracts to companies that have direct links to the people authorizing the contracts. This is a simple switch-over from transferring public funds to people, in the form of social services, to transferring public funds to corporate entities. It is certainly neither socism nor capitalism, but something new.

And it is today’s dominant political form. Any attempt to analyze current events by recourse to a simple construct involving greedy capitalists, evil socialists and/or bitter bureaucrats (somehow having ascended to great power) certainly misses the main point to be understood. We the public are being preyed upon by those who parade before us as our leaders. And they follow a script that was not written by von Mises OR by Marx– two philosophers whose followers, I find, have many characteristics in common. They are running a grand con game to get our money– and they pull our strings through the twin means of inspiring in us fear and, alternately, confidence.

Does your philosophy have a good explanation for the ascendancy of the security industries to power?

Michael: “To me your style of argument is narrow, doctrinaire and simplistic, and applies only to some abstract world of theory where some rules are always right, and others never right.”

I can understand your frustration. The science of economics is over 300 years old and has discovered some very rigid rules about how economies and societies work. People who haven’t studied economics are very frustrated by those principles. Take the quantity theory of money in the broader sense. They can’t understand why the state can’t simply print enough money for all of us to be rich. But those principles remain just as true today as they were centuries ago. To rebel against those principles is tantamount to rebelling agaisnt the law of gravity. You can do so if you want, but it will hurt you a lot more than it will damage the law of gravity.
Michael: “The economic system they not only believe in but maintain in practise is one that maximises profit by socializing expenses and privatising gains. I’m not sure von Mises devotes a lot of time to this… but you should start from this premise, just as an exercise, and see whether you can validate it… Take a look, for example, at the explosion of government contracts to companies that have direct links to the people authorizing the contracts. This is a simple switch-over from transferring public funds to people, in the form of social services, to transferring public funds to corporate entities. It is certainly neither socism nor capitalism, but something new.”
It’s not new. For goodness sake how long have you been alive? The wealthy have used state intervention in the marketplace to enhance their power and wealth from the beginning of time. Besides war, the nobility in medieval Europe used the state to increase their wealth by having the state intervene in the market and give them monopolies on trade. As I wrote, Adam Smith warned against it over 200 eyars ago. Mises devotes a lot of space to intervention in the marketplace by the state, much of which is motivated by corporations using the state to further their interests. Mises writes that many interventionists/socialists complain about such arrangements, but fail to realize that the situation came about because of their interventionist policies. Instead, they blame capitalism. If you don’t like the wealthy or corporations using the state to their advantage, then join libertarians in ending state intervention in the market. Your approach of fighting the results of intervention with more intervention is self-defeating. The wealthy always come out on top because the wealthy buy legislators with campaign contributions, and the bureaucrats those legislators appoint come with the package.
Michael: “Does your philosophy have a good explanation for the ascendancy of the security industries to power?
Abolutely! Mises explained it in 1912. It’s very simple and works like this: the state artificially expands the money supply. Now mainstream econ will tell you that the new money spreads evenly over the whole economy immediately so that it causes prices to rise without changing the distribution of wealth. But Mises saw very clearly that is not the case. The new money created by the state enters the economy at specific points. Those who receive the new money first are able to buy assets (such as stocks) before prices rise, because a lag of about 18 exists between the issuance of new money and rising prices. Those who receive the money last, usually wage earners in retail, get it after prices have risen, so their standard of living falls. The securities industry is one of the first to get new money because they depend heavily on borrowed money to leverage their returns on investment. That’s why you have seen profits and wages in the securities industries rise so much faster than in any other industry. Monetary inflation, which leads to price inflation, is one of the most corrosive means of state intervention in the economy.

Sorry Fundamentalist, I’m with Michael that your style of argument is narrow, doctrinaire and simplistic. It most certainly represents an abstract view of absolutes. There are very few absolutes in this world, including in economic theory. Sure there are some fundamental principles that are bedrock, and you present them in solid fashion, but thats where they end. Rigid economic rules do not explain how societies work, humans have a knack to divert from expectations, good and bad. Reality is particularly hard on a person who tries to squeeze everything into rigid moulds, it is a world of unknowns we exist in.

Fundamentalist: “Rockwell did not promote greed, waste and consumerism. You chose to judge the activities of others as greed, waste and consumerism. It was your opinion, nothing else, and I disagree with your opinion. While capitalism provides more freedom, freedom has nothing to do with greed and waste, which are part of the nature of man. Poor people and socialists can be among the greediest people on earth.”

Agreed. Capitalism provides more freedom, greed and waste are a product of human nature. I’ll step back from my original comment on that too. Rockwell really only directly referred to waste, ie. the buffet table, as a blessing of captialism.

“The source of socialism’s power is envy; socialism has made envy respectable.”

I disagree. I can’t comprehend how you think envy is respectable. Socialism isn’t even respectable. People fall prey to ideals of socialist policies, but its an extreme minority of people who actually think socialist society is a good idea. Then again, honestly, most Americans probably don’t really understand the concept anyway.

“No one is envious of greed. People envy the wealth of others and judge the motives of wealthy people as being greedy. Envy is the driving force behind hatred of capitalism and freedom.”

Thats quite a rationalization. To be clear, I don’t judge someone to be greedy BECAUSE they are wealthy. Its a judgment based on behavior and character. As you said, “poor people and socialists” can be the most greedy people in the world. Anyone can be greedy. Do you mean to express that hatred of capitalism and freedom is widespread? Thats what I get from that comment.

“But labor is still scarce, so why waste it? Besides, you haven’t established that food was being wasted; that’s just your opinion. In my opinion a buffet does not waste food.”

Food is more scarce than labor, why waste food? I’d rather not waste either food nor labor.
What a silly statement that I haven’t established food was being wasted. How does one “establish” that exactly? Have you ever eaten at a buffet? I suggest next time you take a moment to look around at the tables after other patrons finish eating and notice how much food is left piled on the plates. Thats what I mean by waste.

“Only if you put yourself in the position of God do you have the authority to judge that people buy too many things. No, you don’t have an objective standard. An objective standard would be something like this: spending more than $40,000/yr on a family is four is spending too much. What’s your standard?”

I don’t have to be God to make a judgment like this. Its really a simple analysis of circumstances and observation. My standard is based on what we need to survive, even allowing for recreation and entertainment spending. For example, a woman (or man) doesn’t need 50 pairs of shoes. Is it fair to call that consumeristic? We don’t need all the little knick-knacks that commonly adorn our homes. The average household has way more clothes than is needed. Look at the booming industry of thrift stores and popularity of garage sales as evidence we buy too much stuff. Advertising works, we’re bombarded with it, and it shows in the amount of useless crap we accumulate. This is a generalization, its not an accusation against anyone specifically. I would suggest every person individually examine their own life and determine for themselves if they are consumeristic or greedy or wasteful. For the purpose of bettering themselves and overcoming these weak human traits. Sure, I can observe and make my own judgments of others, but it doesn’t mean a hill of beans if we each don’t examine ourselves and judge ourselves the same way. Frankly I suspect your resistance to this value is because you don’t want to examine yourself, you use capitalism as a shield against self-criticism.

“I’m sure that you, like many others, think you’re enlightening us hopelessly ignorant capitalists, but you should know that we’ve heard everything you have said many times before. I got it crammed down my throat in graduate school. It spews from the fount of Marxist socialism. You may not call yourself a socialist, most socialists don’t. But your ideas came from Karl Marx, whether you recognize it or not.”

I didn’t think you to be an ignorant capitalist until you confessed it in that comment Fundamentalist. Not even your name is enough to make such a judgment. But reactions like this to criticism and views different than your own are a pretty clear indication. My views are not even that different than yours, mine are just not as extreme. I’m not a socialist, I’m a dreaded “moderate”, and you are ignorant to paint me with extremist colors so I fill the opposite side your mirror and thus have a target of derision to focus your paranoia.

“Even if I thought that people consume too much, which I don’t, I would never presume to know how much is the proper amount for people to consume. God is the only person with the authority and the wisdom to judge such things.”

You’ve got all the defenses set up and activated. Sorry Fundamentalist, the world is not black and white. Propping yourself up on economic theory and religion don’t absolve you of your responsibility to use your brain. You’re no better than me for not presuming to know, I’m no better than you because I do. Its common sense, its not a textbook passage that applies universally.