We Need Factories for Making Products and Not for Making Jobs

Oh no? Spending. What is "demand"?

 

Ofcourse there has to be some degree of central planning in an economic system. I can see no reason why entire nations should be left to flounder in a purely competitve system.

[Interesting that during the GFC (as in the Great Depression) some of the 'invisible hand' crowd decried any government intervention. The results of non-intervention in th GFC would have been 'interesting' to say the least.]

Not the "police powers of the state", just enlightened (educated) self-interest of the community.

I will borrow Lafayette's tag line (Frederick Douglass quote)

Where justice is denied, where poverty is enforced, where ignorance prevails, and where any one class is made to feel that society is an organized conspiracy to oppress, rob and degrade them; then neither persons nor property will be safe.

 

What is Say's Law?

 

What is "demand"?

 

Actually we can see that neither 'demand side' or 'supply side' economics is succeeding for a sufficiently large number of people, which is why politics is in meltdown worldwide at present.

 

Where is "demand side" failing?

 

I'm actually only making the general point: supply-siders like Bluesguy claim theirs is the correct theory and blame all the ills on demand-side theory.

Ofcourse I would choose demand side policies, but I'd like to avoid the endless 'mine is better than yours' carry-on, which we observe among theorists at even the highest echelons of economics

Nevertheless, either (or both) theories are expected to succeed in an environment of free-market capitalism, which I believe is impossible, and which is why I want to reintroduce an element of central planning at the global level.

[No doubt Soviet theorists actually wanted to win the Cold War, and thereby institute their version of global central planning. But their version with its enforced collectivisation of agriculture and manufacturing violated human desire for ownership of private property and so did not gain general approval].

But there has to be another way....in which the public sector can raise (print) money independently of the private sector.

 

It is the desire for a product or service an individual might express once he has produced something of value.

It's simple. If you, as you seem to imply, spending money creates wealth, then all of us can simply print as much money as we want and, by exchanging that money for goods and services, create virtually unlimited wealth for everyone. Of course, you'll point out that printing money is illegal. But that is a simple matter of legislation, not economic law.

 

Don't make up chit. There are plenty of real ideas to discuss on this subject without posing what you know is ridiculous or by putting words in my mouth.

So demand is the desire for products or services. But I don't get "once he has produced something of value." Demand is the desire for goods and services and an interest in buying them.

There are many called "capitalists" who seek information and insight into what people desire and would buy so they can product to meet that demand and make a profit. If the demand is there, they will show up to exploit the demand for profit.

How do they meet the demand? In many cases they hire others to provide labor in exchange for wages. And these workers spend their wages. That creates more demand to be met in some way.

And you say what?

 

Yes, an argument in an economics forum can be absurd. An argument from an economics instructor can also be absurd.

And, hey, it only lasted until 1948! Some good that "mollification" did. There as even a depression with the depression in 1938.

It's like one giant broken window fallacy. It was the rewewed trade with America's allies and the freedom from Roosevelt's economic tyranny that finally got the US out of the Great Depression.

Do you know what an ad hoc fallacy is? You say point to a graph, which correlates growth with spending, but does not prove it.

Your implied ad hominem is noted. And, yes, this is an economics forum. Economics is a science, and like all sciences, is derived by reason. Reason includes logic. I shall hold you to it.

 

Then don't ask asinine questions as if you are going to engage me in some socratic thinking.

You can have an interest in buying a ham sandwich, but that doesn't mean someone is going to produce it and give it to you without something in return.

The people of Venezuela right now are demanding food. Many are starving. Why aren't the capitalists making enormous profit by showing up and exploiting that demand?

They can't hire others unless they have produced something, for which they are then paid, and with which they can then hire more employees. And they won't get paid until others produce things for which they are paid.

I say spending does not create wealth. Wealth is created through production.

 

Agreed, of course.
--------------------------------
On the UN and war - related to the war on poverty, as your reasonable complaint about the costs of world policing on the US budget imply - some say the UN has been more or less successful in avoiding 'large-scale' war since its inception, others (mostly right wing nationalists - surprise, surprise) say it's a failure because it does not prevent the regional and civil wars we have witnessed, and want to abolish it (in truth revealing the cultural imperialism if not racism at the heart of right- wing nationalism).

Great power rivalry forced the adoption of the UNSC veto, reducing the SC to talk-shop observer status; but given that nearly as many lives have been lost in war since 1945 as were lost in WW2 itself, (more or less as predicted by those who originally argued against adoption of the veto), the task remains to replace the SC veto with a majority vote, if we are to avoid the ongoing costs in blood and treasure, and diversion of spending - which should be directed to education and poverty alleviation - to the military.

So Syria is being sacrificed on the altar of 'national sovereignty', with all the gun-runners in the world, including Russia and the US, arming opposing sides in the so-called civil war, with the 'war on terrorism' tossed in for good measure, which itself is related to power politics, ignorance and poverty.

 

"What is demand?"
Would I be wrong to say that 'demand' is simply the needs/wants relative to the resources/products/services existing/created/provided?

For something to have value, a need and/or want must exist.
Everything is worth what its purchaser will pay for it. - Publilius Syrus ( 46~100 B.C. )

Money is nothing more than the medium by which we acquire/exchange property from one another, be it labour/goods/services/etc.
Simply holding unspent money is like keeping ice cubes at a temperature slightly above freezing, so any rational person would put it to work, earning interest or dividends, or some means by which it becomes replaced by something which will grow rather than diminish in value.


“From his neck down a man is worth a couple of dollars a day, from his neck up he is worth anything that his brain can produce.” - Thomas Edison

 

In other words, sink or swim as you are able, and don't expect any assistance from other members of the community of which you are a member.

Cool.....(missing the point that we all start out with nothing, though some with a silver spoon in their mouths...)


Ndividual's definition:

Relative to?

I presume you didn't simply mean to say:

access to (say) good food is subject to supply or availabilty.

Except in a famine or failed state, the issue is the ability to pay for the food.

 

Syria is a religious war between the two major sects of the Muslim religion - the Shiites and the Sunnis. The Shiites are in the minority, but their leader (Assad) has led a war of abject killing of populations cohabiting with Sunni populations. (Such as Aleppo).

The Russians support Assad because of their sole naval outlet to the Mediterranean Sea at Latakia, which just happens to be the home-town of Assad (and under Shiite control).

This is what that war is all about for the Syrians. Maintaining a Shiite leader in control of the "so-called" Syrian Government, which has no real legitimacy since the last peaceful election was a long, long time ago.

When Assad was in retreat from eastern Syria four years ago, he left the town of Raqqa and the oil-fields to the ISIS - which is how they financed their expansion by selling oil into Turkey. They occupied key Syrian towns in the northeast of the country, and launched a campaign that struck back at Iraq (from which their leader - al Baghdadi - came). Were it not for the Kurds, he could have possibly conquered Iraq. The Iraqi Army at the time was armed by the US, but the soldiers were young kids who broke and ran in the face of ISIS-forces.

With ISIS gone, things will return to "normal" - that is, settling the problem between the minority Shiites and majority Sunnites in Syria. If that takes separate parts of the same country being led by either religion - then so be it ...

 

SIMPLISTIC REASONING

Absurd nonsense in red above. The purpose of education is to educate. You need a definition of the word?

Apparently: Give intellectual, moral, and social instruction to (someone), typically at a school or university.

Anyone who thinks education is specifically for a given purpose is misled. Education is a "generalized" process of expanding the mind towards new horizons. How one employs that education depends upon their own judgmental processes.

I am one who refuses to think that Karl Marx had all the answers. But I do admit that he had some good questions. Like, "Why is all the wealth going to only a select few, whilst the rest die in miserable poverty?"

That's not happening still today? If you think it isn't, then you'd best think again.

For your memory, because I am sure you've seen this infographic previously:


And in case you do not know how to read it: The top 0.1% of American families are obtaining from the present system of unfair upper-income taxation as much as the bottom 90%.

I am left to presume you think that is "OK" - because of simplistic reasoning like "That's the way the cookie crumbles" ...

 

Syria is a religious war between the two major sects of the Muslim religion - the Shiites and the Sunnis. The Shiites are in the minority, but their leader (Assad) has led a war of abject killing of populations cohabiting with Sunni populations. (Such as Aleppo).

The Russians support Assad because of their sole naval outlet to the Mediterranean Sea at Latakia, which just happens to be the home-town of Assad (and under Shiite control).

This is what that war is all about for the Syrians. Maintaining a Shiite leader in control of the "so-called" Syrian Government, which has no real legitimacy since the last peaceful election was a long, long time ago.

When Assad was in retreat from eastern Syria four years ago, he left the town of Raqqa and the oil-fields to the ISIS - which is how they financed their expansion by selling oil into Turkey. They occupied key Syrian towns in the northeast of the country, and launched a campaign that struck back at Iraq (from which their leader - al Baghdadi - came). Were it not for the Kurds, he could have possibly conquered Iraq. The Iraqi Army at the time was armed by the US, but the soldiers were young kids who broke and ran in the face of ISIS-forces.

With ISIS gone, things will return to "normal" - that is, settling the problem between the minority Shiites and majority Sunnites in Syria. If that takes separate parts of the same country being led by either religion - then so be it ...

 

Thanks for this information; I would add a couple of considerations concerning this 'civil' war, in terms of my pointing to great power rivalry,
ignorance and poverty.

On the religious aspect: this boils down to ignorance that is endemic in the Islamic world (especially when considering such a powerful force as religion) because , as happened centuries ago in the West (and recognised by increasing numbers of well-educated Muslims) the necessary Islamic 'enlightenment' has yet to occur.

Obviously the self-interested adventurism of Britain and America in tne last couple of centuries has retarded, rather than advanced, the process. Now how do we deal with this ISIS monster? Trump blamed Obama today for not defending his notorious 'redline' in Syria, but of course the US public was thoroughly sick of the whole ME theatre.

On great power rivalry: why must the US always adopt the opposite postion to Russia in these matters - when the US has proved its preference for maintaining the most obnoxious dictators many times since WW2. That's not my defense of Assad, just a statement of fact.
All the great powers have the morality of drug pushers when it comes to armament sales, a situation that could have been eliminated in 1945 at the UN Charter conference.

On poverty: it seems environmentalists have pointed to an unusually long-term drought that led to food price increases throughout ther ME, before the commencement of the 'Arab Sprjng', destabilising governments (at least those that were not already being bombed by the US).

[In a global world economy, politics, economics and religion are all related across the globe, revealing the inadequacy of localised libertarianism with its mantra of freedom from government and fantasy of 'voluntary' cooperation].

 

The words I wrote are precisely what I meant to say.
I believe the question I was responding to in my post was "what is demand?"
Should not the producers/retailers who have paid the cost relative to making food available in the market place be entitled to recoup their costs?

 

I was referring to institutional education - not the act of improving oneself by learning. The actual degree is meaningless, outside a resume.

The 1% are not taking all of the wealth by being more educated than the rest. They aren't some kind of ubermensch, destined for greatness. They're protected by insanely corrupt lawmakers and a system designed to keep wealth concentrated.

 

Of course.

But whether food producers should be paid NOT to produce food, or whether in fact food producers should suffer lower prices because nature provided a particularly bountiful harvest, or be subsidised by government for reasons of national security, is another matter.

Such is the real world, revealing the inabilty of standard market economic theory to provide the optimum solutions.

 

First half of that sentence is demand the demand curve, the second half is supply curve

But you are right in that demand is meaningless without any means to fulfill it. Those means can be earned, but they can also be stolen, found, or received from your parents or your spouse.

We've had continuous trading for millenia now, so its very hard to say whether spending or supply drives economic growth. Its like asking whether the chicken or the egg was first. We don't know and its irrelevant.

 

That same legal system is fundamental to capitalism. Private property must be sacrosanct, for to accumulate wealth is the reason to participate in supply. What we have is the problem of generational wealth.

 

The corporation (for one) is an example of a modern institution that is most definitely NOT 'fundamental to capitalism'. You could add hundreds of bylaws and regulations that help to concentrate wealth, that have absolutely nothing to do with a free market, or economics.

I'm guessing you just wanted to respond as quickly as possible, and didn't think this through.

 

Ok. I see half of your problem. You have trouble writing clearly. Hence I didn't understand.

The people of Venezuela must take care of the problems in Venezuela. You and I are not experts on their problems and aren't even well informed on them. Deal with the U.S.

There's that half a problem again. The logical implication of your sentences is "They (employers) can't hire others (workers a,b,c) unless they (workers a,b,c) have produced something, for which they (workers a,b,c) are then paid, and with which they (employers) can then hire more employees (workers d,e,f). And they (workers d,e,f) won't get paid until others (workers unknown) produce things for which they (workers unknown) are paid."
Your idea that "they can't hire others unless they have produced something" puts the cart before the horse. Workers are not hired after they have produced something. Maybe you think they must prove themselves first before being hired.
And your statement that "they have produced something, for which they are then paid, and with which they can then hire more employees" says the money workers are paid is then used to hire more employees. That's nuts.
Finally, your statement that "...they can then hire more employees. And they won't get paid until others produce things for which they are paid" says workers d,e,f won't get paid until some other unidentified workers produce things and get paid for that production. And that is nuts. And that is the second half of your problem... if you cannot clearly grasp and comprehend (and communicate) a problem, you cannot fix it. You must first understand something before correcting it. And your understanding here is muddled. And that is why you say silly things like "I say spending does not create wealth. Wealth is created through production."