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Old May 5 2013, 06:30 PM   #13
Re: Greece's Underlying Policy Problem.

I wasn't talking about technological change but about capital allocation as you said that capital markets are bad. Technology and capital aren't the same thing. Capital is the computer you are currently sitting at, the house you are living in and so on. Technology is the "recipe" which describes how you can produce this stuff.
About your concrete suggestions, really-existing socialism failed and not because of wicked Western forces sabotaging it. Deal with it.
"Random support" means you throw dice. This is far inferior to a bank which monitors creditors. If I wanna finance a house and another dude wants to finance a house as well yet he doesn't have one penny and I have a steady income stream throwing a die and perhaps giving him a loan for a house is utter lunacy.

You want me to spell out things in detail? In short, back to the sixties. You could call it social democracy or moderated capitalism.
What does this mean CONCRETELY: Separate normal and investment banking, increase bank's equity requirements to perhaps 10-12%, crush shadow banking, crush rating agencies or socialize and regulate them. Make banking once again a business which doesn't pay more than being an engineer or doctor. Crush tax havens, significantly increase the taxes on the rich, conduct serious demand management, create democracy in the workplace, work on corporate governance problems such that shareholders gain more power over management.
About climate change, crush the political power of the energy industry, try to solve the worldwide cooperation problem (it is basically a prisoner's dilemma) and then create a worldwide CO2 tax system while reducing taxes on capital and labour at the same time.

Given that capitalist and socialist countries wrecked havoc on the climate I am not inclined to be a fan of either capitalism or socialism. I prefer empirics over ideology, I am a fan of things that work and 20th century history has shown that a mixed social democracy economy works best. Despite the slow unraveling of social democratic over there like in the rest of the world, Scandinavian countries are still among the best places to live.

See, I am totally with you when it comes to crushing reactionary forces, undoing the rise of income and wealth inequality worldwide and so on. But I totally cannot understand the radical left's ramblings about the evils of capitalism and free markets while failing to provide anything but a very vaguely sketched alternative.
The illegal we do immediately; the unconstitutional takes a little longer. - former US Secretary of State and unconvicted war criminal Henry Kissinger

Last edited by horatio83; May 5 2013 at 06:48 PM.
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