A couple of videos of Milton Friedman have been circulating in the Internet, in connection to the question posed in the headline of this post. In my opinion they are not directly relevant to Occupy Wall St., yet the contain very valuable points:
1. How family values curiously contribute to the welfare
2. How government creates poverty. In this one he touches upon the important misconception - whether it is governments responsibility to take care of the poor. Given that most protest movements are directed against the governments, it is worth reminding that in a democratic society the particular people in the governments are merely our elected representatives. It is our responsibility, via democratic channels, to improve our society.
Saturday, November 26, 2011
Friday, November 25, 2011
Evil capitalists destroy democracy! (Just kidding)
Here is an article which is a worthy addition to my "theatre of the absurd" collection. The author comes with a thesis that capitalism and democracy cannot co-exist. Here is his reasoning of how the advance of capitalism has eroded the democratic system:
"Over the past year, in fact, capitalism has fairly rolled over democracy.[1] Nowhere is this more apparent than in Europe, where financial institutions and large investors have gone to war under the banner of austerity,[2] and governments of nations with not-very-productive or overextended economies have found that they could not satisfy those demands and still cling to power.[3] The elected governments of Greece and Italy have been deposed; financial technocrats are now at the helm of both nations.[4,5] With interest rates on Spanish bonds rising sharply in recent weeks, Spain’s socialist government was unseated last weekend by a center-right party that has offered no solutions to that country’s growing crisis.[6] Now the Sarkozy government in France is threatened by rising interest rates on its bonds.[7] It’s as though the markets throughout Europe have had enough with this democratic sovereignty nonsense."
Let us consider these arguments one by one:
[1]. "Over the past year, in fact, capitalism has fairly rolled over democracy." - If the author implies that the measures undertaken in order to fight the recession and the debt crises in Europe are contradicting the democracy, then it is certainly not sufficient to go one year back: the present economic problems began in 2008, and the economic developments that led to these problems had spanned at least two previous decades.
[2]. " in Europe, where financial institutions and large investors have gone to war under the banner of austerity" Austerity is cutting government spending and deficit, and thus curbing the government control over the population and business. This can hardly be called anti-democratic.
[3] "and governments of nations with not-very-productive or overextended economies have found that they could not satisfy those demands and still cling to power" "Clinging to power" rather than taking care of teh concerns of the populations is certainly not what a democratic government should do.
[4] "The elected governments of Greece and Italy have been deposed; financial technocrats are now at the helm of both nations." Both Greek and Italian governments were replaced in a democratic manner - in both cases at the suggestion and acceptance by the democratically elected representatives (parliaments).
[5] The departure of Silvio Berlusconi is certainly a win of democracy over the interests of the big business, which Berlusconi represented. It is quite a rare occasion when a left-wing author seriously mourns the demise of the right-wing figure, such as Berlusconi... but just wait...
[6] "Spain’s socialist government was unseated last weekend by a center-right party that has offered no solutions to that country’s growing crisis" Obviously, the socialist Spanish government lost elections precisely because it could not offer solutions to the crisis. In addition, the weak government is now replaced by the one, that ahs a parliamentary majority and can actually deal with the economic problems. The emphasis on the badness of the rightist government is at odds with the affection for Berlusconi displayed just a sentence before... but just wait...
[7] "Now the Sarkozy government in France is threatened by rising interest rates on its bonds" - the author is again friend of the right, this time represented by Sarkozy...
"Over the past year, in fact, capitalism has fairly rolled over democracy.[1] Nowhere is this more apparent than in Europe, where financial institutions and large investors have gone to war under the banner of austerity,[2] and governments of nations with not-very-productive or overextended economies have found that they could not satisfy those demands and still cling to power.[3] The elected governments of Greece and Italy have been deposed; financial technocrats are now at the helm of both nations.[4,5] With interest rates on Spanish bonds rising sharply in recent weeks, Spain’s socialist government was unseated last weekend by a center-right party that has offered no solutions to that country’s growing crisis.[6] Now the Sarkozy government in France is threatened by rising interest rates on its bonds.[7] It’s as though the markets throughout Europe have had enough with this democratic sovereignty nonsense."
Let us consider these arguments one by one:
[1]. "Over the past year, in fact, capitalism has fairly rolled over democracy." - If the author implies that the measures undertaken in order to fight the recession and the debt crises in Europe are contradicting the democracy, then it is certainly not sufficient to go one year back: the present economic problems began in 2008, and the economic developments that led to these problems had spanned at least two previous decades.
[2]. " in Europe, where financial institutions and large investors have gone to war under the banner of austerity" Austerity is cutting government spending and deficit, and thus curbing the government control over the population and business. This can hardly be called anti-democratic.
[3] "and governments of nations with not-very-productive or overextended economies have found that they could not satisfy those demands and still cling to power" "Clinging to power" rather than taking care of teh concerns of the populations is certainly not what a democratic government should do.
[4] "The elected governments of Greece and Italy have been deposed; financial technocrats are now at the helm of both nations." Both Greek and Italian governments were replaced in a democratic manner - in both cases at the suggestion and acceptance by the democratically elected representatives (parliaments).
[5] The departure of Silvio Berlusconi is certainly a win of democracy over the interests of the big business, which Berlusconi represented. It is quite a rare occasion when a left-wing author seriously mourns the demise of the right-wing figure, such as Berlusconi... but just wait...
[6] "Spain’s socialist government was unseated last weekend by a center-right party that has offered no solutions to that country’s growing crisis" Obviously, the socialist Spanish government lost elections precisely because it could not offer solutions to the crisis. In addition, the weak government is now replaced by the one, that ahs a parliamentary majority and can actually deal with the economic problems. The emphasis on the badness of the rightist government is at odds with the affection for Berlusconi displayed just a sentence before... but just wait...
[7] "Now the Sarkozy government in France is threatened by rising interest rates on its bonds" - the author is again friend of the right, this time represented by Sarkozy...
Symbolism of social protests
1. Protesting for the sake of protesting - indeed the sign specifies what is opposed (fascism), but does not set any goals that should be achieved by the revolution. Apparently, the revolution, i.e. the process of destroying the existing social and economic order, is already sufficient to satisfy the authors of the graffity.
2. Inability to distinguish between democratic and totalitarian systems: indeed, more often than not, revolutions brought to power regimes no less opressive than fascism. To give just a few examples, one may recall the Communist revolutions in Russia, China, Vietnam, Cambodia, North Korea and Cuba, the Islamic revolution in Iran, the Arab revolutions of the 60s and 70s that brought to power Gaddafi and other Middle Eastern dictators.
3. Symbolism of Che Guevara, reflecting basic ignorance. Indeed, despite the heroic image in the popular culture, Che Guevara was an active participant of the repressions carried out by Castro regime. Unlike Castro, however, he was an active proponent in exporting revolution to other countries and participated in many bloodlettings beyond Cuba. Ignoring Che Guevara's crimes out of admiration for his "coolness" is similar to collecting "cool" Nazi memorabilia - a hobby which would make many people feel sick.
Is Eurozone break up inevitable?
In Paul Krugman's opinion Eurozone break-up is already decided... at least decided by the markets. While he might be right on this one, I would take his statements with a bit of scepticism - he has too often subjected his economic opinions to his political baises (at least when writing on his New York Times page.)
Tuesday, November 22, 2011
"Progressive" crown prince of Saudi Arabia
An informative article about Nayef bin Abdul-Aziz, the new crown prince of the Saudi Arabia. I am posting this as an example of a common journalistic trick - you read such an article and get a positive impression about its hero, who is "wise", "progressive" and a "good guy" in general. What the article omits, however, is that Saudi Arabia is a highly oppressive regime, which does not tolerate opposition, prohibits religious freedom, and, above all, denigrates women. And, all his positive sides notwithstanding, Nayef bin Abdul-Aziz will be just more of the same...
Addition:
A nice example of a similar, but more spectacular story is the Vogue's profile of Asma al-Assad and ger gentle husband (the dictator of Syria)... but the profile has been wisely removed by Vogue awhile ago.
Addition:
A nice example of a similar, but more spectacular story is the Vogue's profile of Asma al-Assad and ger gentle husband (the dictator of Syria)... but the profile has been wisely removed by Vogue awhile ago.
Monday, November 21, 2011
State-provided "Social justice" as the road to totalitarianism?
A transcript from Henry Hazlitt's essay "The Road to Totalitarianism" - still timely today, as many young people seem to naively believe that one can give the government more economical power, particularly in terms of collecting taxes and regulating prices, and yet not endanger the basic personal liberties:
"Now I should describe this failure to grant tolerance to other parties not as the essence of totalitarianism, but rather as one of its consequences or corollaries. The essence of totalitarianism is that the group in power must exercise total control. Its original purpose (as in communism) may be merely to exercise total control over "the economy." But "the state" (the imposing name for the clique in power) can exercise total control over the economy only if it exercises complete control over imports and exports, over prices and interest rates and wages, over production and consumption, over buying and selling, over the earning and spending of income, over jobs, over occupations, over workers — over what they do and what they get and where they go — and finally, over what they say and even what they think.
If total control over the economy must in the end mean total control over what people do, say, and think, then it is only spelling out details or pointing out corollaries to say that totalitarianism suppresses freedom of the press, freedom of religion, freedom of assembly, freedom of immigration and emigration, freedom to form or to keep any political party in opposition, and freedom to vote against the government. These suppressions are merely the end-products of totalitarianism."
"Now I should describe this failure to grant tolerance to other parties not as the essence of totalitarianism, but rather as one of its consequences or corollaries. The essence of totalitarianism is that the group in power must exercise total control. Its original purpose (as in communism) may be merely to exercise total control over "the economy." But "the state" (the imposing name for the clique in power) can exercise total control over the economy only if it exercises complete control over imports and exports, over prices and interest rates and wages, over production and consumption, over buying and selling, over the earning and spending of income, over jobs, over occupations, over workers — over what they do and what they get and where they go — and finally, over what they say and even what they think.
If total control over the economy must in the end mean total control over what people do, say, and think, then it is only spelling out details or pointing out corollaries to say that totalitarianism suppresses freedom of the press, freedom of religion, freedom of assembly, freedom of immigration and emigration, freedom to form or to keep any political party in opposition, and freedom to vote against the government. These suppressions are merely the end-products of totalitarianism."
Income inequality: an intelligent look from the left
Here is a relatively balanced article on the growing income inequality. The author is left-leaning (you will agree with me , if you look into his recommendations), but he provides a fair analysis. If you want an intelligent look from the left rather than the usual "beat the rich/tax the corporate jets" stuff, then I recommend reading it.
I quote only one paragraph (that should make an intelligent liberal to think):
"The market system distributes rewards increasingly inequitably. On one side, the debate is framed in zero-sum terms, and the disappointing lack of income growth for middle-class workers is blamed on the success of the wealthy. Those with this view should consider whether it would be better if the United States had more, or fewer, entrepreneurs like those who founded Apple, Google, Microsoft and Facebook. Each did contribute significantly to rising inequality. It is easy to resent the level and extent of the increase in CEO salaries, but firms that have a single owner, such as private equity firms, pay successful chief executives more than public companies do. And for all their problems, American global companies have done very well compared with those headquartered in more egalitarian societies over the past two decades. Where great fortunes are earned by providing great products or services that benefit large numbers of people, they should not be denigrated."
At least two points that the authors omits:
1. There is no discussion of how the economic growth, prompted by reducing taxes on the highest earners could reduce the income inequality.
2. More importantly, he frames discussion as if "the rich" are only the 1% of the higher earners, whereas for the tax purposes they still remain all those who earn more than $250,000 a year, i.e. small business.
He does however stress the that the reason for the growing inequality might be precisely too much government interference into the free market:
"First, government must not facilitate increases in inequality by rewarding the wealthy with special concessions. Where governments dispose of assets or allocate licenses, preference should be on the use of auctions to which all have access. Where government provides implicit or explicit insurance, premiums should be based on the market rather than in consultation with the affected industry. Government’s general posture should be standing up for capitalism rather than for well-connected capitalists."
I quote only one paragraph (that should make an intelligent liberal to think):
"The market system distributes rewards increasingly inequitably. On one side, the debate is framed in zero-sum terms, and the disappointing lack of income growth for middle-class workers is blamed on the success of the wealthy. Those with this view should consider whether it would be better if the United States had more, or fewer, entrepreneurs like those who founded Apple, Google, Microsoft and Facebook. Each did contribute significantly to rising inequality. It is easy to resent the level and extent of the increase in CEO salaries, but firms that have a single owner, such as private equity firms, pay successful chief executives more than public companies do. And for all their problems, American global companies have done very well compared with those headquartered in more egalitarian societies over the past two decades. Where great fortunes are earned by providing great products or services that benefit large numbers of people, they should not be denigrated."
At least two points that the authors omits:
1. There is no discussion of how the economic growth, prompted by reducing taxes on the highest earners could reduce the income inequality.
2. More importantly, he frames discussion as if "the rich" are only the 1% of the higher earners, whereas for the tax purposes they still remain all those who earn more than $250,000 a year, i.e. small business.
He does however stress the that the reason for the growing inequality might be precisely too much government interference into the free market:
"First, government must not facilitate increases in inequality by rewarding the wealthy with special concessions. Where governments dispose of assets or allocate licenses, preference should be on the use of auctions to which all have access. Where government provides implicit or explicit insurance, premiums should be based on the market rather than in consultation with the affected industry. Government’s general posture should be standing up for capitalism rather than for well-connected capitalists."
Sunday, November 20, 2011
While the US sleep... Pacific countries prepare for wars
It was a subject of my recent post, (also here, here and here) that the unreliability of the alliances with the United States under the Obama Administration, has prompted many Middle Eastern countries (particularly Saudi Arabia) to change their defense policy - purchasing more arms and building closer alliances with their neighbors.
Apparently a very similar thing is taking place in the Pacific region, where the traditional wariness of the Japanese influence has been replaced by the fear of China, which prompts formation of new alliances (between Japan and Singapore, India, Vietnam and Philippines):
"Following decades of near-isolation under the American security umbrella, Japan had in recent years been gradually expanding its ties with neighbors, including many—such as Vietnam and the Philippines—that it invaded and occupied during World War II.
Japan signed its first defense memorandum in Southeast Asia with Singapore in 2009. The moves appear to have accelerated after a September 2010 standoff with Beijing over the contested archipelago known as Senkaku in Japan and Diaoyu in China."
Apparently a very similar thing is taking place in the Pacific region, where the traditional wariness of the Japanese influence has been replaced by the fear of China, which prompts formation of new alliances (between Japan and Singapore, India, Vietnam and Philippines):
"Following decades of near-isolation under the American security umbrella, Japan had in recent years been gradually expanding its ties with neighbors, including many—such as Vietnam and the Philippines—that it invaded and occupied during World War II.
Japan signed its first defense memorandum in Southeast Asia with Singapore in 2009. The moves appear to have accelerated after a September 2010 standoff with Beijing over the contested archipelago known as Senkaku in Japan and Diaoyu in China."
Legacy of the Tahrir square
A quote:
"The [Occupy Wall St.] movement’s true origins, however, go back to the revolutions in Tunisia and Egypt. That was when the world witnessed how intransigent regimes can be toppled by leaderless democratic crowds, brought together by social media, that stand firm and courageously refuse to go home until their demands for change are met. Our shared epiphany was that America, too, needs its Tahrir Square moment and its own kind of regime change. Perhaps not the hard regime change of Tunisia and Egypt, but certainly a soft one."
The saying is that "people learn from mistakes... but smart people learn from the mistakes of others." Most people however do not learn at all, even from the mistakes of their own.
The "protests", from the Arab Spring to Occupy Wall St., unfortunately have shown the truth of this conjecture. One could understand why frustrated (and usually young) people went into the streets and demanded changes - whatever changes, coming from anywhere, and anyhow. But, as the quote above shows, most of these people are likely to miss the main lesson of the protest movements - the protests lacking leadership and clear goals change nothing. They merely allow the protesters to vent off their anger, no more than that.
- Revolution in Tunisia brought to power Islamists. Rather moderate ones, but quite intent on limiting the civil rights of women. You call this social justice?
- Much celebrated revolution in Egypt removed Mubarak, but hasn't changed anything else. The country is run by the same people, the protests continue, the people demand resignation of the head of the ruling army council. Moreover, the only clearly formulated demands turned out to be not for equality, democrayc or economic reforms - but for the abrogating the Egypt's peace treaty with Israel. Is potential war and cessation of economic ties with Egypt's neighbor the kind of social justice that everyone has in mind?
- Revolution in Libya is rarely mentioned as an example of successful protests - no wonder, it was a bloodbath. Yet, so far it was the example of the most organized resistance. It is not clear whether it will bring democracy and justice though.
- Protests in Bahrain were suppressed. Protests in Jordan dissolved after a few meaningless concessions by the King.
- "Tent city" in Israel faded away - its only legacy being the boost that it may (or may not) give in the next elections to the Labor party.
- Protests in Syria look like a massacre. The protests seem to realize that the only way out for them is to get organized - much to the displeasure of the US Secretary of the State.
- "Occupy Wall St.", after several incidents of rape and robberies, was dismantled from the US parks by police.
"The [Occupy Wall St.] movement’s true origins, however, go back to the revolutions in Tunisia and Egypt. That was when the world witnessed how intransigent regimes can be toppled by leaderless democratic crowds, brought together by social media, that stand firm and courageously refuse to go home until their demands for change are met. Our shared epiphany was that America, too, needs its Tahrir Square moment and its own kind of regime change. Perhaps not the hard regime change of Tunisia and Egypt, but certainly a soft one."
The saying is that "people learn from mistakes... but smart people learn from the mistakes of others." Most people however do not learn at all, even from the mistakes of their own.
The "protests", from the Arab Spring to Occupy Wall St., unfortunately have shown the truth of this conjecture. One could understand why frustrated (and usually young) people went into the streets and demanded changes - whatever changes, coming from anywhere, and anyhow. But, as the quote above shows, most of these people are likely to miss the main lesson of the protest movements - the protests lacking leadership and clear goals change nothing. They merely allow the protesters to vent off their anger, no more than that.
- Revolution in Tunisia brought to power Islamists. Rather moderate ones, but quite intent on limiting the civil rights of women. You call this social justice?
- Much celebrated revolution in Egypt removed Mubarak, but hasn't changed anything else. The country is run by the same people, the protests continue, the people demand resignation of the head of the ruling army council. Moreover, the only clearly formulated demands turned out to be not for equality, democrayc or economic reforms - but for the abrogating the Egypt's peace treaty with Israel. Is potential war and cessation of economic ties with Egypt's neighbor the kind of social justice that everyone has in mind?
- Revolution in Libya is rarely mentioned as an example of successful protests - no wonder, it was a bloodbath. Yet, so far it was the example of the most organized resistance. It is not clear whether it will bring democracy and justice though.
- Protests in Bahrain were suppressed. Protests in Jordan dissolved after a few meaningless concessions by the King.
- "Tent city" in Israel faded away - its only legacy being the boost that it may (or may not) give in the next elections to the Labor party.
- Protests in Syria look like a massacre. The protests seem to realize that the only way out for them is to get organized - much to the displeasure of the US Secretary of the State.
- "Occupy Wall St.", after several incidents of rape and robberies, was dismantled from the US parks by police.
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