Posts Tagged ‘Socialism’
Clash of civilisations

Clash_of_Civilizations_map

Osama bin Laden predicted the United States would break up. The measures and expense of the “security” state and the eternal war are certainly causing tension. Samuel Huntington’s The Clash of Civilizations and the Remaking of World Order seems to be on the mark. The Western, Turkish, Persian, Chinese, Russian and Hispanic civilizations are all generating friction with their neighbors.

“”Ramos took an unusual tack, pivoting from talk of diversity and togetherness into boasts of conquest. Mass immigration, particularly illegal immigration, was a fait accompli. There is nothing the U.S. can do about it, and they must accept that America is “not their” country and that illegal aliens, particularly Latinos, “are not going to leave,””

The US is traditionally a society of citizens living under the rule of law, as opposed to the rule of a king, despot or tyrant. It was not race or religion based, but incorporated a state of mind. The melting pot ensured continuity of their different perspective through time. The ending of assimilation and increased emphasizing of difference have weakened the glue which bound the society. Recent history will have encouraged views like these:

A 2013 poll found that 66 percent of Mexicans believe the U.S. government has no right to limit immigration, while 52 percent said Mexicans have a right to be in the United States. Another 88 percent said it is fine to enter the U.S. illegally if one needs money. Over half, 56 percent, said they had friends or family who tried to immigrate to the U.S. illegally.”

Attempts to remake the world order to remove the role of States with the right to enforce their boarders is not without popular appeal. As utopian visions go, it is probably no more far fetched than those of Marx, Hitler or even Charles Fourier. The split between the national and international socialists was heated and bloody. Both had state sponsors. The internationalists Russian state sponsor won the war against the national socialists. Socialists have defined themselves as having an internationalist perspective ever since. Global dominance is nothing, if not international in nature. States, be they socialist or otherwise, cannot be allowed to stand in the way of the inevitable glorious socialist future.

I’ve labeled their vision utopian. Like other central communist tenets it contradicts fundamental aspects of human nature. We evolved as tribal creatures. We will form tribes. They can be based on race, religion, ideology, geography, sport, hobby or basically anything which we have in common with some and not others. The internet has greatly expanded the range of possibilities. The current US unrest may prove to be the tip of the iceberg.

 
For the Greater Good

Oh, the progressive left and their charnel houses. They’re so sanctimonious with their cry “it’s for the greater good, only a foul heartless monster could oppose it”. After all, what’s an individual or group of individuals worth compared to the good of everyone forever? How can we let the Kulaks or capitalist class stand in the way of equality, of an end to the exploitation of man by man?

Jesse nails so much with this post. While it is not for the faint hearted, it should never be forgotten. But it also must be understood. We must see through the Orwellian newspeak of the chattering classes.

The left accuses others of its own sins. It calls black white and good evil. Not for nothing have they persuaded many that discrimination and judgement and wrong. Good riddens to good judgement and the ability to discriminate between right and wrong. Better by far if people just do as they are told, by their progressive left masters.

Hand in hand with the assaults on reason and the Western civilization way is the jihad against free speech. A willingness to speak out and say what you think is verboten. Doing so could undermine their politically correct nostrums. Better to make it illegal on the grounds it might offend someone or make them feel discriminated against.

The left are evil. They advocate ideologies which inevitably lead to mass murder and misery.

 
Who bears the cost of money printing?

This 5 minute video demonstrates how our mind can be tricked by the effect to miss the method:

Luigi Anzivino: Science of Magic

Do watch the portrayal of the experiment at the 2 minute mark.

Money printing has the obvious prominent effect of putting more money into some peoples hands.  Great, we are richer. Some will only see and act on that. It can lead to real world activity. Real world investment, real world education and job decisions. It can immediately affect how much some people are willing to pay for houses, and hence house prices for all. Later it will influence peoples assessment of prices and relative values. The new rates are the market rate and we either pay it or change our consumption bundle.

Naturally the poorest in society have the least options for changing their consumption bundles.You can’t swap from caviar and sirloin steak to chicken mince if you are already eating chicken mince. You may only be able to opt for dog food. If you are already eating dog-food then you may be reduced to fossicking in bins for your protein. You get the picture. Inflation is a personal thing. The poorer you are the more inflation tends to affect you.

The poorer you are the less you are able to adjust your consumption bundles to mitigate the effects of rising prices. The elite and well-off have a significantly reduced level of inflation compared to the middle class. The middle class in turn have more options and experience less inflation than the poor.

But the poorer people are doubly penalized. They also have much less disposable income they can re-direct to necessities. A 10% rise in the price of food can result in their not being able to eat and pay the rent. They may become homeless or starve. A 10%  rise in the price of food may be hard to even detect in the budget of the well off. Hell, I’ll simply eat one more meal a week at home rather than in a restaurant. Or perhaps skip desert or eat at a cheaper establishment. Maybe I’ll only go on one foreign holiday a year instead of two. Or not buy another designer dress or pair of shoes. Gee, tough choices. You get the picture.

There is nothing compassionate, kind or caring about printing money. It shafts the poor. It hurts the old, ill and otherwise disadvantaged most.  It is the height of hypocrisy for the left to claim they have a social conscience and that is why they are printing money. The effects mentioned above are well known. Ignorance is not an acceptable excuse, at least not amongst those supposedly trained in economics.

The economy is complex. It comprises of many products and services. They have different elasticities of demand. Some products people can readily do without. In response to price rises they purchase something different. Producers of these products will either lose lots of revenue or compress their margins in response to rises in their costs of production. Of course there is only so much margin to compress, before prices either rise or the company goes out of business. At an aggregate level the product becomes unavailable or more expensive.

The rate at which cost-push inflation flows through the economy will depend on the interaction of multiple different elasticities of demand. You have Buckley’s chance in of knowing the outcomes of this in advance. Contra Salerno Hayek was certainly correct in the centrality of the problem of knowledge. Clubs and families like corporations make poor decisions all the time. They are rarely fatal. They also are poor in all sorts of different ways, allowing for a wisdom of crowds effect. When a socialist state gets it wrong there is a universality to the error. There can also be fatal consequences for those pointing it out. Thus the errors can persist through time far longer than they will under other social systems:

If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

Although reality always intrudes, as it did with Goebbels and his national socialist comrades.

The beauty of capitalist markets is that multiple decision makers means there are multiple conflicting decisions being made about the future. Normally whatever happens, some prosper. In prospering they hire others and keep us prosperous. It is inherently resilient because of the conflicting often wrong choices being made. Sadly central banks are centralist. When they get it wrong the effects percolate throughout the whole economy. They are run by individuals with all our cognitive failings. One of which is a desire not to have been wrong.

The Bernanke put will go the way of Goebbels great lie. Let’s hope we do not as a consequence suffer as much as the German people did.

Graphic courtesy of Cherchez la Verite. It also contains this quote by German Finance Minister Wolfgang Schäuble:

 “I don’t think they are going to solve their problems that way,” Schäuble told German public broadcaster ZDF in a Thursday evening interview. “They have already pumped an endless amount of money into the economy via taking on extremely high public debt and through a Fed policy that has already pumped a lot of money into the economy. The results are horrendous.”

So far so right. It can’t work, it can but delay at the cost of making the adjustment worse. It may now have tipped to the point where the range of potential outcomes are getting worse. Despotism or anarchy, rather than liberal democracy.