Waaaah! Neoliberalism wasn't Given a Chance!

[PeZook]

I think the idea is that there will be no national paper currency. The government would make payments in gold or gold certificates, and would be constitutionally prevented from issuing more certificates than it has gold, or lending gold that has had certificates issued against it.

Which, of course, wouldn't change a thing: it would just cause gold deflation instead of fiat currency inflation, since the supply of gold is limited. Therefore, if you force the government to only be able to deal in how much gold it has, as the economy expands, each individual piece will be worth more and more, untill we get ridiculous things like issuing certificates for micrograms of gold. Naturally, nobody would deal in actual gold, since that's horribly unwieldy.

The government would also collect taxes in the form of gold or its own gold certificates. Banks could try to issue their own paper money, but you couldn't pay your taxes with it.

This already happens. Banks issue bonds, stocks and other financial instruments which are money but not currency. What's so revolutionary here? The prevalence of convoluted, triple-removed financial instruments is part of the problem.

So you could put your gold in a bank that has a horrible reserve ratio, but unless they really trust that bank, no one would accept its notes.

That does not automatically follow. The bank with a horrible reserve ratio would be able to leverage its gold more, give out more credit and thus get awesome financial results, especially with some creative accounting. Throw in some slick marketing and it wouldn't have a problem getting more deposits or selling financial instruments. So what if it collapses later? Furthermore, do they really expect, say, a small shopkeeper to keep tabs on eighty different banks to figure out if he should accept a customer's promissory note or not?

Of course, you could issue counterfeit U.S. gold certificates, but I would assume law enforcement would work against that. If he's serious about law enforcement only preventing the use of force, then I suppose he wouldn't even bother with the certificates, and just have the government deal in gold. Of course, you can shave, debase, and otherwise pass off a nonstandard coin as a U.S. gold coin.

Dealing purely in gold is a horrible idea, even more retarded than "the gold standard will fix everything!" idiocy. Gold currency can be messed with like any other, it pulls gold away from important industrial applications to pointlessly serve as a mean of exchange and of course ties the money supply to a limited resource.

[K. A. Pital]

I think the idea is that there will be no national paper currency.

They could take stone tablets instead of gold and propagandize their extreme usefulness as the first means of exchange. It won't change the fundamental idiocy of assuming that a rare metal has some sort of innate right to be the universal means of exchange

[Big Orange]

In some cases. they expect the rest of society to pick up the tab, in playing for the Strain on housing, education, health-care costs, essantially Externalizing these costs to the rests of society while they pick up the profits.

Poland is picking up the tab by losing half of its workforce to Britain and having British corporations buying stuff up to the detriment of the locals. Not unlike Mexico.

And do you the ethos of Friedman has seeped into copyright laws in recent decades, where you have the current copyright laws, especially for music, that are little else but incredibly unbalanced, culture destroying, counter productive, and increasingly unworkable?

[CJvR]

It won't change the fundamental idiocy of assuming that a rare metal has some sort of innate right to be the universal means of exchange

IIRC some of the very first coins were iron rods. Iron was useful and thus valuable. However it was to useful to be tied down in currency where it is essentially of no use at all so they picked gold - which have been completly useless, except for decoration, until quite recently and used that for currency instead. Platinum, now costlier than gold was used as ballast on ships returning from the New world and Aluminium once as expensive as gold is a throwaway commodity today.

[The Yosemite Bear]

what is this libertarian obsession wwith gold? I swear they are like dragons at times.

---edit---

don't they realize how dense the shit is?, how easy it would be to counterfeit?

[Samuel]

It won't change the fundamental idiocy of assuming that a rare metal has some sort of innate right to be the universal means of exchange

IIRC some of the very first coins were iron rods. Iron was useful and thus valuable. However it was to useful to be tied down in currency where it is essentially of no use at all so they picked gold - which have been completly useless, except for decoration, until quite recently and used that for currency instead. Platinum, now costlier than gold was used as ballast on ships returning from the New world and Aluminium once as expensive as gold is a throwaway commodity today.

Off topic, but they do use steel as the medium of exchange in Kyrnn (D&D).

what is this libertarian obsession wwith gold? I swear they are like dragons at times.

---edit---

don't they realize how dense the shit is?, how easy it would be to counterfeit?

It is pretty simple actually. They are against paper currency because the government can manipulate the money supply and anything the government does is bad. Leads to inflation which they are against because it is an inefficency. So they want to take it out of the governments hands and dump it in... the free market.

They don't realize is that they simply make inflation and deflation of the currency controlled by other factors (in this case, gold discoveries and GDP growth).

[Big Orange]

^Gordon Brown, our current PM, got into trouble for selling part of Britain's gold reserve when it was still moderately cheap.

And what is with the obsession with outsourcing or offshoring administration jobs to India in more recent years? It has just gotten rid of jobs for no real reason, other than satisfying bean counters aggressively cutting corners, while making the interface between consumers and companies more maddening than it already is. This kind of short-term thinking typical of Neoliberalism has actually been very counterproductive (like in Dell Computer's case for example), with some companies moving these jobs back into being inhouse.

[Samuel]

^Gordon Brown, our current PM, got into trouble for selling part of Britain's gold reserve when it was still moderately cheap.

And what is with the obsession with outsourcing or offshoring administration jobs to India in more recent years? It has just gotten rid of jobs for no real reason, other than satisfying bean counters aggressively cutting corners, while making the interface between consumers and companies more maddening than it already is. This kind of short-term thinking typical of Neoliberalism has actually been very counterproductive (like in Dell Computer's case for example), with some companies moving these jobs back into being inhouse.

You said it yourself. It is cheaper. Which means they can either make their products cheaper and undercut their opponents OR they can raise their salaries. They can't lose! And looking out for number one is what neoliberalism is all about.

[ray245]

^Gordon Brown, our current PM, got into trouble for selling part of Britain's gold reserve when it was still moderately cheap.

And what is with the obsession with outsourcing or offshoring administration jobs to India in more recent years? It has just gotten rid of jobs for no real reason, other than satisfying bean counters aggressively cutting corners, while making the interface between consumers and companies more maddening than it already is. This kind of short-term thinking typical of Neoliberalism has actually been very counterproductive (like in Dell Computer's case for example), with some companies moving these jobs back into being inhouse.

However, the act of outsourcing does booast the economy of other developing nations, for example, China. If the liberals did not export some of their manufacturing jobs overseas, Singapore will still remain as a 3rd world Nation I suppose.

In some ways, to negate the harms caused by neoliberalism, the home nation needs to develop a very powerful R&D center, and constantly push for newer technology as part of its manufacturing industry. The momment you pause for a while, your nation will suffer through job losses.

Expecting to retain basic or low tier manufacturing in a first world nation is going to be hard. As long as one can manufacture products without advancd skills, that nation has a huge advantage over developed nation.

To ensure that your nation can retain jobs in the manufacturing industry, your R&D industry needs to be extremely powerful and your population needs to be very highly skilled and educated.

[Alan Bolte]

Which, of course, wouldn't change a thing: it would just cause gold deflation instead of fiat currency inflation, since the supply of gold is limited. Therefore, if you force the government to only be able to deal in how much gold it has, as the economy expands, each individual piece will be worth more and more, untill we get ridiculous things like issuing certificates for micrograms of gold. Naturally, nobody would deal in actual gold, since that's horribly unwieldy.

Agreed. Libertarians tend to claim that if gold were increasing in value relative to other goods, we'd just have more people switching from other jobs to the gold mining industry until the amount of gold being mined is equivalent in value to the other goods being produced. In practice, natural resources are limited, I really don't know how well it would work, and focusing the economy on digging a metal out of the ground so it can be stored in vaults does not sound like a desirable outcome. On the other hand, I'm not sure the latter would be worse than selling each other houses that no one will actually live in. I suppose we could end up doing both.

Anyway, I didn't really bother to think that argument all the way through, I was just trying (failing?) to reconstruct the various libertarian pro-gold arguments I've encountered. An important part I forgot: without the Federal Reserve's ability to simply print money and lend it out, the Fed's or Government's ability to act as lend of last resort for the banks would be seriously diminished, thus reducing the idea among the banks that the fed/government could give them unlimited amounts of money to prevent them from failing.

Please pardon me if this is gibberish, I shouldn't be typing this late.

[Big Orange]

You said it yourself. It is cheaper. Which means they can either make their products cheaper and undercut their opponents OR they can raise their salaries. They can't lose! And looking out for number one is what neoliberalism is all about.

It does entail the need to not restrictions of corporations, institutions that are known for being similar in conduct to sociopathic criminals, what with their chronic ethical impairment in addition to failng to plan ahead properly and repeatingly making mistakes that a moderately bright 14 year old would avoid (like the music industry with their paranoid, draconian copyright protectionism actually provoking more piracy and ruining culture, for example, or many companies ditching their pension schemes while getting fat off of jumping through tax loopholes).

However, the act of outsourcing does booast the economy of other developing nations, for example, China. If the liberals did not export some of their manufacturing jobs overseas, Singapore will still remain as a 3rd world Nation I suppose.

That is true to a certain extent and parts of China and India are becoming very developed off the backs of offshored industrial and adminstration infrastructure from the West, but didn't countries like Japan and South Korea become very wealthy through their own industrial growth they nurtured from the ground up through their own companies with relatively little outside help?

To ensure that your nation can retain jobs in the manufacturing industry, your R&D industry needs to be extremely powerful and your population needs to be very highly skilled and educated.

Yes, but even that kind of work is being inspidly shipped off abroad (like substandard computer software), while obviously not everyone is cut out to be an inventor, scientist, or engineer. And by shipping off most of the relatively basic jobs, you're getting rid of class mobility and workforce training.

[pieman3141]

Didn't laissez–faire exist, at least for a while, during the 1800s in Britain, and again during the Gilded Age in the States? Britain cracked down with various labour laws.

The same argument could be used for Marxism (note: not communism, exactly), since it was tested out too, and poorly-implemented for the most part.

[Count Chocula]

Big Orange, Japan entered the modern world in 1905 when Commodore Perry sailed into Tokyo Bay. He brought Marines and an "invitation" to join the developing industrialized world, which Japan did with a vengeance. Without US influence, Japan would not have HAD a native industrial infrastructure to develop.

WRT South Korea, the short form is that they benefitted tremendously from the Korean conflict, currently in a cease-fire. With American protection to bolster their own resistance to their Communist kinsmen, they have been able to develop very successful industrial concerns. Hell, my dad owns a Hyundai!

The key is that neither situation would have occurred, most likely, without the American presence.

[erik_t]

Big Orange, Japan entered the modern world in 1905 when Commodore Perry sailed into Tokyo Bay. He brought Marines and an "invitation" to join the developing industrialized world, which Japan did with a vengeance. Without US influence, Japan would not have HAD a native industrial infrastructure to develop.

Ehm, try 1858. Japan fought Tsarist Russia with battleships in 1905.

[Count Chocula]

Oops! Forgot about that whole Japan-Russian War thing.

[Samuel]

I believe Big Orange is refering to the current crop of Japanese and Korean companies. In the 1950s Japanese products were considered pieces of crap. However, the Japanese government carefully sheltered and protected the fragile young companies and they grew into what you see today- behemoths that are so big they star as villians for popular culture. Both Japan and Korea were very poor at the end of WW2 and the Korean War respectively, and they used the government control to liberally boost their economies. Not just subsidies, but in Korea's case controlling imports so there would be currency to buy the necesary heavy equipment they needed.

Source- Bad Samaritans by Ha-Joon Chang. Good book that attacks neoliberalism poining out that it has only worked in international trade... for countries that are at the top. All that comparitive advantage does for poor countries is keeps them poor.

[The Yosemite Bear]

why does this title make me think of Orks reading Ayn Rand?

[ray245]

However, the act of outsourcing does booast the economy of other developing nations, for example, China. If the liberals did not export some of their manufacturing jobs overseas, Singapore will still remain as a 3rd world Nation I suppose.

That is true to a certain extent and parts of China and India are becoming very developed off the backs of offshored industrial and adminstration infrastructure from the West, but didn't countries like Japan and South Korea become very wealthy through their own industrial growth they nurtured from the ground up through their own companies with relatively little outside help?

Err, South korea, Taiwan, Japan and Singapore did recieve a lot of help from the overseas and other developed nation before they managed to build up their own companies.

Without foreign investment in the first place, the developing nation will not have a chance to develop and have a better living standards.

Which means the only way to be morally right and helpful to others while helping yourself is to constantly push for newer and newer technological development.

Which means I can export the lower technology production overseas and boast the economy of other nation to some extend. However, the new technological developemnt and production must remain in my nation for a certain period of time. Basically it is the same idea as a patent, where you hold on to the advantage for a certain period of time.

[Guardsman Bass]

However, the act of outsourcing does booast the economy of other developing nations, for example, China. If the liberals did not export some of their manufacturing jobs overseas, Singapore will still remain as a 3rd world Nation I suppose.

That is true to a certain extent and parts of China and India are becoming very developed off the backs of offshored industrial and adminstration infrastructure from the West, but didn't countries like Japan and South Korea become very wealthy through their own industrial growth they nurtured from the ground up through their own companies with relatively little outside help?

Err, South korea, Taiwan, Japan and Singapore did recieve a lot of help from the overseas and other developed nation before they managed to build up their own companies.

That's certainly the case in some of them. Japan, for example, got a major boost from the Korean War making stuff for the US forces IIRC.

Without foreign investment in the first place, the developing nation will not have a chance to develop and have a better living standards.

You need some, but didn't Singapore, Korea, and Japan also derive a lot of their investment from insanely high personal savings rates? I know that helps Japanese banks build up a lot of capital.

Which means the only way to be morally right and helpful to others while helping yourself is to constantly push for newer and newer technological development.

You also need to distribute it. Technology transfer leading to economic development has pretty much been a constant factor in the Industrial and Post-Industrial Ages. The US industries, for example, got started by smuggling designs out of Great Britain, then building on them and making their own.

I suppose the ultimate goal would be to be an original developer of new technology - like the US is today.

Which means I can export the lower technology production overseas and boast the economy of other nation to some extend. However, the new technological developemnt and production must remain in my nation for a certain period of time. Basically it is the same idea as a patent, where you hold on to the advantage for a certain period of time.

That helps the developer, although you could make the case that "spreading the wealth around" with technology boosts everyone's standard of living eventually. It certainly helped in the case of the US back in the 19th century (and before).

[ray245]

Which is why, the best way to secure jobs, is not to ensure companies hire people from their own nations. One example is Ford for instance and why keeping the manufacturing of cars in the US in the long run, does not help Ford at all.

The best to way secure jobs in a manufacturing industry, is to ensure the goods you produced is better, and no one else is able to replicate your products nor can any other nation have the skills to produce those products and goods.

Technological advancement is the key to secure jobs. Protectism for the blue-collar jobs is hard if your technological products and skills required to make them can be replicated and easily learned by other nations.

[Ma Deuce]

Which is why, the best way to secure jobs, is not to ensure companies hire people from their own nations. One example is Ford for instance and why keeping the manufacturing of cars in the US in the long run, does not help Ford at all.

Maybe, maybe not. But it certainly does help American workers.

Which means the only way to be morally right and helpful to others while helping yourself is to constantly push for newer and newer technological development.

Morality is a non-factor in foreign relations, which is as it should be. National interests reign supreme, and as soon as it becomes OK for any nation to take actions based on what they believe is "morally right", that simply leads to even more war and bloodshed, and more meddling in the domestic affairs of other countries.

The best to way secure jobs in a manufacturing industry, is to ensure the goods you produced is better, and no one else is able to replicate your products nor can any other nation have the skills to produce those products and goods.

Jesus Christ, just how stupid are you? Do you understand how impossible it is for one industrialized country to produce products that are so absolutely superior that no other industrialized nation can copy it, especially if production of said items is outsourced? And what happens to the countries whose products aren't superior? Do they just let their vital strategic industries vanish or taken over by foreigners? No, some degree of protectionism is the ONLY way to ensure continued jobs for blue collar workers in wealthier nations, and give the lower classes the chance to improve their status. Protectionism doesn't means severing all trade, but it should at least ensure that your own industries survive and remain dominant in their home market.

[Ma Deuce]

Morality is a non-factor in foreign relations, which is as it should be. National interests reign supreme, and as soon as it becomes OK for any nation to take actions based on what they believe is "morally right", that simply leads to even more war and bloodshed, and more meddling in the domestic affairs of other countries.

Ghetto Edit: I should add that to some degree, this is precisely what is happening to the US and to a lesser extent the other western countries as well. The US and the West has developed something of a "messiah complex", and although interests are still the primary motivator, many Western actions are influenced by the notion that our way of life is the only "right" way, and thus try to influence others to adopt that model, which is why we get all this preaching to China about human rights, when instead, our relations with them should be based on "pure power concepts" as George Kennan put it. Unless another country is engaged in truly grievous business like outright genocide, it's not anyone's place to tell them how to run their domestic societies; Indeed, some societies are better served by dictatorship than democracy.

[Big Orange]

Britain's economy is failing, partially because there is a brain drain largely because Britain has been hollowed out of a properly invested economy in the last two to three decades, due to Neoliberalism cutting most things back (including R&D) and leaving no proper future, and you also get such madness as the NHS not hiring the suplus of native trained doctors (and they're part of the government!).

If Neoliberalism ever took it's full course in a country, I wouldn't be surprised that the said country's military and law enforcement, the last vestige of real government, would have little choice but to violently turn on the business elite for wrecking the country!

[Samuel]

It took over in Chile. Of course, the military was the one in charge of the looting... restructuring of the country.

It didn't go so well, but they had the guns and the atrocity record to keep it running.

[Big Orange]

Argentina had adopted Neoliberalism lock, stock and barrel, and of course the country collapsed not so long ago, reall a forshadowing to what is occurringing in America and Britain today. How will Obama clean up the mess of an abortive economic line of thinking that has been on the rampage worldwide in the last thirty years?