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Saturday, April 18, 2009 - 7:41amSanction this postReply
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The problem is allowing "capitalism" (so-called) to be separated from "economics."

Imagine three societies.  One is heavily industrialized with nuclear-powered electrical systems, internal combustion vehicles, etc., computers, etc.  The second is green -- solar, wind, some computering.  The third is slave-powered.  The government has the one computer and it usually works. 

We might call them "Newtonian" and  "Fullerian" and "Hamurabian" but that would not eliminate the laws of physics that explain their energy uses. 

Even the Hamurabians could argue for the "benefits" and "promises" of their society -- but they could not argue away the realities of physics. 

In fact, the "Newtonians" could have all the cogent arguments and still not convince anyone of the benefits to the "Newtonian" lifestyle. 

As long as the Newtonians grant that the Greens and Slavers merely have "different theories of physics," the problem will be unresolvable.

As long as we argue that capitalism is a "better theory of economics," we beg the question and grant the stolen concept.
 
(As of this posting, you can see me wearing my spencerian script "Capitalism" t-shirt. My wife and I used to wear matching "Maxwell's Equations" t-shirts: I liked the derivative form, she the integral. Consider it vernacular.)

(Edited by Michael E. Marotta on 4/18, 7:46am)




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Saturday, April 18, 2009 - 9:19amSanction this postReply
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Excellent article.

jt



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Saturday, April 18, 2009 - 9:56amSanction this postReply
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True, there are only two way to survive - to take or to trade... only trading is an economic system and is called Capitalism - the other is called Theft, an inhibitor to trade... only trade is a human option - the other is reverting to animalism, holding to what is in common with all the other animals, and as such being subhuman... evil is as evil does, and it makes no difference under what name or excuse it is promoted - theft is not moral, for it is anti-human... 'mixing' the two does not gain 'another' economic system, but a poisoning of the system - the system of trading... to claim that trading is invalidated, then, is to claim that theft is good, that poison is food, and that the short term of plunder is preferable to long term of flourishing...
(Edited by robert malcom on 4/18, 9:58am)




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Saturday, April 18, 2009 - 3:28pmSanction this postReply
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Rock on, Robert. 

Trade goods are known perhaps to 250,000 YA.  We know that Catal Huyuk dates to about 7000 BCE.  In short, there is no place where you can point to the timeline and say "capitalism" (i.e. economics) started here.  The Assyrians had a trade mission among the Hittites.  I have pointed before to the works of Denise Schmandt-Besserat who found the origins of writing in little clay tokens that stood for farm produce.

I do understand and appreciate the point made by Peter Bernstein in Against the Gods, that modern capitalism depended on risk being made calculable by Fermat and Pascal.  And that's fine, but there were "always" traders.

Marx still dominates much of our thinking.  The idea that the "primary means of (social) production" was slave-based agriculture does not even square with the historical record. In many places and times -- I am thinking now of the Andes just before the European invasions -- there were cities that acted as centers to which fishers, farmers and hunters  from different regions brought their surplus.  One might as well argue that family-based fishing was the primary means of production, because it was... for those people...  But we still get this assumption, even among nominal "libertarians" that there was this development from slavery to feudalism to capitalism from agriculture to trade to industry and now we have a "post-industrial" or "information" or "service" economy.  It's all service if you want to look at it like that.  I mean even the paleolithic exchanges were simply the service of getting the shells and bringing them here to the person who performed the service of getting the copper and bringing it here and so on.  It's always the exchange of labor (intelligence) really, knowing where and how to get the stuff that the other person wants. 

If you stop and think about it, economics has always been the exchange of information. 




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Monday, April 20, 2009 - 12:47pmSanction this postReply
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Call it Mises' Law: People of the most widely divergent views nonetheless always converge in condemning "free market" capitalism for whatever they believe wrong. Particularly relevant is its derivation, Loberfeld's Law: In a mixed economy, it's the market element that takes the blame. (See BAILOUT.) Statism is eternally innocent.

And the corollary of Loberfeld's Law: In a mixed economy, it's always the statist element that gets the credit.

From "The Cause of All Mankind."



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Monday, April 20, 2009 - 1:21pmSanction this postReply
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Those claiming free market capitalism has been 'invalidated' (nobody around here) are very severely confused about what just transpired.

It was not 'under-regulation' of the mortgage marketplace which just occurred. It was precisely activist federal intervention, explicitly in court case after court case and even USSC case, that was used to brush aside 50 sets of more stringent state banking and lending regulations in order to dispose of '20% down and documented income.' Even if it was well meaning meddling, it was the blanket replacement of varied state regulation operating in parallel with a single point of failure federal model of regulation that enabled the OneSIzeFitsAll mess. I mean, the company called itself 'CountryWide', shouldn't that have been a massive hint?

Without the Golden imprimateur of FNMA/GNMA SEC EXEMPT/AGENCY RATED ... half is, half isn't GSE's, the 'securitization' at the root of the financial engineering nonsense could not have existed. Sure, sharks came running, but they were enabled by well meaning federal meddling in the marketplace.

In Sep 1998, when the LTCM fiasco unfolded, at the peak of our 'miracle 90's economy,' which could have well tolerated a little educational discipline, instead of administering that educational discipline to a system that had tolerated patent insanity, the fed cam running with its implied backup, if not actual bailout, of the 'fed consortium' that backed up LTCM in its over-leveraged nonsense. Back then, it was 'only' 3-4 billion in backup, but the message was clear: 'systemic risk' was the Magic Key to the OPM Kingdom, and 'moral hazard' was laid to rest, ignored as a factor. The message was clear; there was no financial nonsense too stupid that, should it crash and burn, the FED wasn't going to come running and bail out the cronies on Wall Street. The nation was sold down the tubes to a bunch of carny hucksters selling gibberish.

These jackasses lurched into a Math department and played Cargo Cult Scientists. It looked like Math; it smelled like Math. But when they came across terms too tough to calibrate in their own model, they simply ignored them as inconsequential(!) and the economies eventually smacked them up the side of their cargo cult science heads for that. These carny hucksters from CT bamboozled with a model based on 'the weather tomorrow in San Diego is going to be sunny and warm', and leveraged that 'certainty' out to incredible heights of hedgedom. Guaranteed. Sort of. And when the weather in San Diego grew uncharacteristically cold, the cargo cult science crap hit the fan, and a lot of greedy rich guys looking for ridiculous risk free returns got burned. What should have happened was, they should have eaten it. They, and any institutional buyers, and any system that tolerated total nonsense should have had its fingers burned, a giant, 'never pull that crap again.' Instead, the exact opposite occured, and this financial engineering nonsense was subsidized, coddled, and guaranteed for life--by others, taxpayers, not the principals. And the same carcass carving crony idiots who screwed the pooch in 1998 have been running the piggy bank carnival on Wall Street ever since, and THAT is what has been characterized as 'capitalism.'

Carcass carving capitalism has its place. So do eels, suckers, carp and all bottom feeders. But our tribe -- all of us, including capitalism's advocates -- let carcass carving capitalism come to dominate and define 'capitalism.'

Too many inbred Ivy Leagers sprinting to Wall Street to stare at the scoreboard and bet on the game, with no skin in it, using OPM and self made 'leverage rules' that guaranteed the health only of carcass carving and the manufacture of money from nothing but that carcass carving. Then, perhaps, a jaunt on the assembly line to K Street, to 'regulate' the cronies on the assembly line of cronyism, wink-wink. Wall Street and K-Street have become what all inbred clubs eventually become; corrupted by their own inbreeding. And, they've largely got away with it, clean.

In that world, which is to say, our world, the carcass carving capitalism world, beast building has become what what fools do. Who in their right mind is going to want to build beast in this graceless, clawing 'free-for-some?' I don't know what is going on on Wall Street these days, but there is still apparently carcass to carve in this graceless free-for-some the tribe is throwing. It's a sick carnival.

The sick thing we have now just has to break. Obama is not going to fix anything. Right, yet another Ivy Leager sprinting to DC, just what it needs, that is exactly what DC was running short of, Ivy Leagers.

Of course Obama came to bury capitalism. Has anyone been on an Ivy League campus for the past 40 years? What do you think is being endlessly preached at these playgrounds?

Relax. Crap don't float for long.





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