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jmedaille

jmedaille | 0 posts | Member since 10.10.08

Comments

RE: Thinking Catholic: European leaders blame crisis on “speculative capitalism”
Actually, we know very well how distributism would work on a large scale, because we have the example of the Mondragon Cooperative, which has 90,000 worker-owners, does $24Billion/year in sales, and has a 50-year track record. It works very well. We also have the example of Emilia-Romagna (Bologna), were 40% of the GDP is from worker coops. Bologna has one of the highest living standards in Europe. Distributism has a track record, not only in the dim past, but in the current moment. And it seems to function much better than the capitalist system. Indeed, the only thing surprising about the current moment is that anybody is surprised. This has always been the history of capitalism; despite its anti-gov't rhetoric, it always depends on gov't privileges, hand-outs, and bailouts. 3/4th of Adam Smith's The Wealth of Nations was devoted to documenting how gov't favored the mercantilists. Distributism goes from success to success; capitalism goes from bailout to bailout.


RE: The Church on the financial meltdown: Usury and speculation are to blame
Usury violates a primary moral principle, which is also a sound economic principle: it is wealth without work. See http://distributism.blogspot.com/2008/09/ususry-wealth-without-work-and-why-it.html


RE: The Right’s Hypocritical Crusade against Wall Street
"Real Capitalism" is not being practiced because it has never been practiced. Real Capitalism has no history and hence has no present. It has no history for the same reason Real Communism has no history: it can't be done. It's an abstract system with little relation to reality. All Attempts at Real Capitalism (or Real Communism) end in social chaos and economic ruin. We have been closer to real capitalism then we are today, but the closer you get, the worse it looks. For example, in the period between 1853-1953, the economy was in recession 40% of the time. Since then, we have been in recession only 15% of the time. And the pre-war recessions were generally much stronger and longer than anything since the war. Until now. Eight years of pure capitalist rhetoric may return us to 1929. Or worse. Read Dmitry Orlov's Reinventing Collapse: The Soviet Example and American Prospects. It's a chilling comparison.


RE: Thinking Catholic: European leaders blame crisis on “speculative capitalism”
Well, you say its corruption, and I say its inherent. But there need not be a contradiction here; each system rewards certain behaviors and punishes others. Capitalism rewards the corruption, so it is both. As for distributism, you can simply look at distributist systems and judge for yourself. The plain facts of history are these: Distributism goes from success to success; capitalism goes from bailout to bailout.


RE: Greed and ruthless pursuit of profits to blame for banking fiasco
there is one sense in which it is unfair to blame greed for the crises. The truth of the matter is that banks must lend money to stay in business. They would prefer to lend for productive enterprises. But for 30 years, the productive economy--the real economy of making things and services--has been on the decline. After all, we only produce half of what we consume. But the banks still have to lend. So they lend for consumption, at exorbitant rates, and for speculation, which is a zero-sum game. One merely hopes that one's own bank will come out on the right side of the game. What else can they do? Our banking system is based on usury; that's how we create money. If that is the system, it is a bit disingenuous to blame the banker for working with the rules he is given. They make a convenient target, but targeting them ignores the greater need to reform the system. Usury creates an unstable banking system, when that must borrow short to lend long. This is a recipe for failure, and the failures occur at regular interval. This is the third major failure during my lifetime, intermixed with a bunch of minor failures. This is the history of capitalism. Why is everybody so outraged each time it happens, as if each time was the first time, and not the continuation of the same old weary play?


RE: Thinking Catholic: European leaders blame crisis on “speculative capitalism”
No, capitalism MUST reward the corruption or collapse; that is what is happening today. We must bail them out because they are "too big to fail"; in other words, we are held hostage by their very size. You'll have to tell me about what corruption you've found in Spain. I am sure there are corrupt individuals, as everywhere. But Mondragon operates without gov't support; they run their own schools, their own social support systems, their own training institute, their own university, their own retirement systems, all with money they generate from their own work. That is a system that rewards work and is independent of the gov't. Its precisely the kind of system a person like yourself ought to support.


RE: Thinking Catholic: European leaders blame crisis on “speculative capitalism”
The problem with that explanation is that it ignores history. You are quite correct that the gov't is heavily involved in the economy. But there was a time when this was not so, a time when the gov't had very little involvement, by today's standards. What were the results? In the period from 1853 to 1953, the economy was in recession or depression 40% of the time. At other times, it suffered from severe deflation, which is a much worse problem than inflation. Since 1953, since, that is, the gov't took full charge of the economy, we have been in recession only 15% of the time, and most of these recessions have been mild, and mildly inflationary. Further, the pre-war recessions were twice as deep and twice as long as the post-war downturns. Indeed, our grandfathers would hardly have noticed what we call a recession as such; they really knew how to suffer. Gov'ts around the world, whether left-wing or right, whether conservative or liberal, took command of the economy because it was the only way to avoid social collapse. Libertarians do not like to look at history, because history is not kind to their ideology. The truth is that Austrianism and Social Chaos share a common border, and you cannot draw close to one without being near the other. Roosevelt gets the blame for "socializing" the economy, but in fact, he saved capitalism for the capitalists. Nations without a "Roosevelt" went Fascist or Socialist. Further, we see in this country the odd phenomenon that the more "conservative" a regime claims to be, the more keynesian its policies. Wall Street denouced Carter for running a $50 Billion dollar deficit, but didn't bat an eyelash when Reagan, year after year, ran deficits that averaged $210 billion. Indeed, the national debt was $700 billion when Reagan took office. At the end of the term of Bush I, it tripled to $2.1 Trillion. That's "Trillion" with "T". Then it doubled, and more, so that when Cheney took office, it was five trillion. Now it has more than doubled under Cheney-Bush, and continues to rise at an alarming rate, especially in the last few weeks. The plain historical fact is that capitalism has always been an unstable system, unable to manage itself without gov't rescues. And those who will not look at the history are doomed to re-live it. Welcome to 1929!


RE: Ironic Speculation: Investment banks seek protection against short-selling
Short selling allows involves either a theft or a fraud. In naked shorting, one sells what one doesn't own, which is fraud; in covered shorting, one sells shares that one "borrowed" without the owner's permission, with the intent of returning them at a lower value. This is theft. If someone wants to short his own shares, then let him do so, without restraint. But of course, no one does this. It can only be profitable if you steal someone else's shares.


RE: Greed and ruthless pursuit of profits to blame for banking fiasco
Profits are "ruthless" when they are "work-less," when they constitute wealth without work. That is what usury is. When the banks lend money for speculation, they pursue wealth without work, for speculation adds nothing to the economy; they collect a profit on a bet, and a bet only enriches one person at the expense of another. By all means, let men wager if they will, but only their own funds. They cannot wager so as to put everybody else in their debt, and particularly not $700B in their debt. By all means, let men profit as they will, if the profit is the result of real work which adds real goods and services to the economy. By all means, let the banks prosper from sharing in due proportion in the profits of that work. Anything above this is "ruthless."


RE: Thinking Catholic: European leaders blame crisis on “speculative capitalism”
Thank-you, Robert. Chesterton is a great read. Most of my work is devoted to bringing out the economic implications of his work.


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