$1 USD, that's like $1 CAD?

[That Guy]

^ That was sexy ^

I don't know Hwi, your description of Socialism, for the most part, just seems to be what capitalism would be described as.

Well, my fellow Americans, it

[chatfsh]

Not really. A great majority of Americans want universal health care, for example. And I bet a great majority of Americans would also like the kind of absolute job security, guaranteed retirement plan, and free education (including college) that socialism would provide.

A great majority?  I

[Dante]

A great majority?  I

[Anathema]

But in the Soviet case, the switch to a more market-oriented system caused the total failure.

China's economic reforms were partly inspired by the stagnation in the SU, where reform was out of the question because most of the power was in the hands of a very conservative generation of politicians wich didn't start dying out until the 80's. Perestroika was too little and too late, that said it may have speeded the collapse because it destabilised the paper framework of the economy - but it would have happened sooner or later anyway.

Yes, the agricultural sector did rather badly. But since agriculture is less and less of a concern for modern economies, that issue is getting less and less important every day. How many people still work in agriculture in the most industrialized countries? A few percent - and even that is usually only thanks to massive subsidies (*cough* EU common agricultural policy *cough*).

Agriculture in the EU is highly mechanised though, so it's no surprise that not too many people work there. I despise the CAP for a variety of reasons, but having enough cultivated farmland for domestic use is a strategic asset that shoulnd't be underestimated. The Soviet Union changed from a grain exporting country to an importer; I'm not sure where they got most of their food from but if they'd been 100% dependent on western countries for it you can imagine what a tight spot they'd have been in.

How long is "a while"? The Soviet economic system functioned extremely well for about 45 years in the Soviet Union and 25 years in several other countries, then functioned moderately well for a further 10 years.

Now, I completely agree that the Soviet economic system was broken - in the sense that it had a number of flaws which eventually contributed to its collapse. These flaws include:

(1) the lack of freedom of speech, which meant that bad management and government mistakes usually went unreported, and thus were never corrected;

(2) the fact that economic planners were unaccountable to the people, so they had no incentive to produce quality consumer goods;

(3) the fact that the country was ruled by an undemocratic elite, which could (and eventually did) figure out that it could re-introduce capitalism in order to make itself richer.

But my point is that the Soviet economy performed remarkably well in spite of these flaws, and - most importantly - that these flaws could easily be corrected while maintaining a planned economic system.

It could be argued that the Soviets managed to keep their population diligent with mass propaganda (of a socialist paradise just over the hills, and the evil Americans wich will destroy you if you don't work hard enough) but that this became ineffective once the people started realizing that after decades of working and building, they were hardly better off than before. For east Germans it was especially obvious that their western neighbours enjoyed much more welfare than they did, and East Germany was probably the most developed nation in the eastern bloc.

Yes, but not as well as they did for themselves after capitalism came along. They'll all great business tycoons now.

Most of the highly educated people were members of the communist party, and the truly ambitious ones among the nomenklatura would try to make the best of it for themselves in the new capitalist reality. So it's to be expected that just about everyone who got rich in that period is a former aparatchik. But I don't think that most of them faired as well as Putin's entourage.

You forgot two facts:

(a) Even with sluggish growth, they will still growing (a little bit) faster than most market economies. Given enough time, they would have caught up.

I don't know where you got that idea, but it doesn't seem likely. If that was the case, why switch over at all?

(b) Which market economies are we talking about, exactly? Compared to most of the market economies in the world (which are located in Asia, Africa and Latin America), the Soviet-style command economies provided their citizens with far more welfare. And in many cases they also provided their citizens with more welfare than the market economies which were later introduced in the same countries after 1990 (for example, most Russians were better off in the Soviet Union than they are today).

Russians are worse off, nowadays? Unemployment may have been nearly non-existant in the SU and fewer homeless people, but that's in itself not a reliable measure for welfare. People had a very poor selection of inferior consumer goods to buy from their wages and soviet style apartments aren't particulary cosy or spacious. Most people forgive Putin his autocratic tendencies because he has made Russia much more prosperous then it was before (and because of his posturing on the international stage, despite the fact that the Russian military is a paper tiger compared to the old Soviet military)

As for the rest of the world, Truman managed to get support for the Marshall plan because he argued successfully that socialist sentiments thrive on poverty. It would have taken western Europe much longer to reconstruct without American money- but Cuba wouldn't have been so developed today without Russian money, either.

Perestroika was the trigger event that led to the collapse of the Soviet Union. You seem to be arguing that the collapse would have happened anyway, even without that trigger. Maybe, but you can't prove it, and we'll never know.

It's a bit like the question: Would the First World War have happened anyway even if Gavrilo Princip hadn't assassinated Archduke Franz Ferdinand in Sarajevo?

Gorbachov didn't reform the economy because he wanted to do away with marxist principles, he did it because the economy was stagnating. It was pretty clear that the SU couldn't go on like it had been for the past decades otherwise resistance from the rest of the party would have been much more fierce than it was.

(and I think WW1 would have happened anyway if Franz Ferdinand had survived, though the war might have taken a different course)

On another note, if the USSR was suffering in the 80s mainly as a result of the arms race with the United States, then that's a point in favour of the Soviet economy: It means it would have done better if the Americans hadn't been causing trouble.

But the Americans spent just as many recources on the arms race as the Soviets, but in their case it was about 6% of the GDP at the height of their spending and for the SU nearly half. Maybe the Soviet Union would have existed today if they hadn't allowed themselves to be tempted into spending ridiculous amounts of recources on the military and spent it on domestic infrastructure instead, but that's hypothetical (and in any case the military industry was throughout the decades consistently more efficient than non-military sectors). As it was, the Soviet Union was powerful from a military perspective but otherwise it was an underdeveloped country.

The black market was huge in the 80s, that is true. But it was huge largely because of flaws #1 and #2 with the Soviet system (listed above), which could have been corrected. As a result of restricted freedom of speech, there was widespread misreporting of production - which meant that things could be skimmed off the top and sold on the black market. And as a result of the planners' neglect for consumer goods, many people had to resort to the black market to buy things.

It has obviously never been tried, but I'm very sceptical of the notion that any amount of planning can match consumer demand as well as a market economy.

Right. But if we're dealing with archetypes, perfect economic planning is even better than perfect competition.

But it has been empirically demonstrated that a high level of competition lowers prices and causes popular products to displace less popular ones. Economic planning hasn't been proven to work out very well.

[chatfsh]

Depends on what perspective you look at it from. For someone who prioritises the good of the people above material wealth, for example, there very much is something wrong with that. For anyone who believes in the superiority of the emotional, intellectual, spiritual or philosophical over the physical, there is something wrong with that.

I do value those things quite highly as well, certainly above mere bobbles and trinkets.  But I am also a pragmatist

[Dante]

Huh. Who'd have thought it, we do agree on something.

[Anathema]

It is true that the other factors should not be ignored. Though then one should consider that many of these African countries suffering from starvation are located in the, after all, located in the horn of Africa, an area once famous for it's food production (though there may be no relevance there... but anyway :D). These countries which were to forced to adopt free-market polices in order to receive the ''generosity'' of the G8 and world bank by IMF were severely screwed.

By ''Nominally'' do you mean to say that Zimbabwe is Marxist only in name or that it is Marxist to an insignificant degree. Either way that is no argument against socialism.

Actually, Zimbabwe is amongst the list of countries whose plummet into the $h!t hole was greatly contributed towards by this. Obviously a country that accepts privatization and adoption of free market economic policies (in this case to get a loan from the world bank) grows increasingly further from Marxism. Being a dictatorial state with power centered in one man doesn't help either and places it further apart from a Marxist country.

No country is forced to liberalize their economy. They just need to do so if they want to get money from the IMF. Do you think they'd be any less screwed without it?

As far as I know, Zimbabwe has never tried to borrow from the IMF and certainly has never tried to liberalize the economy. I called it "nominally" marxist because I didn't want to provoke another discussion about wether certain countries claiming to be socialist should actually be called socialist or not.

For the real causes, try Mugabe's fundamentally racist policy of displacing white farmers and have uneducated, unskilled black people replacing them. Zimbabwes current predicament is largely, if not entirely home made.

[Edric O]

How

[Edric O]

I do not believe that socialism is a horrible fate to be shunned at all costs.  In fact, I believe that it is a noble and just ideology, but sadly unrealistic and impractical.  The socialists assume that at heart, humans are good and selfless beings that want what is best for them and their fellow man.  But I am afraid that it is not the case.

What you are describing is known as utopian socialism, and it has been dead since the late 19th century. For over a hundred years, no socialist worth his salt assumed anything like a nice and benevolent human nature. Marxism in particular is probably the most cynical political ideology around. If I were to summarize Marxism in one paragraph, it would go something like this:

"People always follow their material interests, and all the religious, political or philosophical arguments they use to justify their preferred economic systems are just bullsh*t intended to fool other people (particularly the poor) into not following their own interests. We are the only political side that openly admits this truth; politics is a ruthless game of domination in which you either crush your enemies or let them enslave you. We openly proclaim that we are on the side of the working class, which is the majority of the population, and we want the workers to follow their interests and rise against their oppressors. Socialism (and later communism) are in the self-interest of the large majority of the population, and the only thing necessary for our triumph is for the large majority of the population to realize this fact."

If anything, Marxism is probably too cynical. It was precisely such extreme cynicism that originally sparked the conflict between Marxism and the Church (the problem was that many Marxists, including Marx himself, went further than saying that religious and philosophical justifications for the status quo are crap, and ended up taking a sort of nihilistic stance that considered all religion, philosophy and idealism to be nonsense, and naked self-interest to be the only truth; they never seem to have realized the contradiction between such a stance and their desire for a better world for all people).

Anyway, getting back on topic: Socialism doesn't require anyone to be altruistic. It only requires people to follow the law - the same as any other system - and socialist law happens to be designed in such a way as to achieve altruistic results. Right now for example, we don't expect people to refrain from robbing banks out of the goodness of their hearts. We expect them to refrain from robbing banks because we have a police force to stop them if they try. The same applies to profiteering under socialism.

No country is forced to liberalize their economy. They just need to do so if they want to get money from the IMF. Do you think they'd be any less screwed without it?

So let's see... a bunch of countries in the West get rich, mostly by conquering and screwing over the rest of the world. Then they decide to give the rest of the world its freedom. But whoops - the rest of the world is so screwed that it needs loans. And who are the only ones capable of providing those loans? The rich Western countries, of course. So they get to dictate terms to their now "free" former colonies.

Brilliant scheme. ::)

I called it "nominally" marxist because I didn't want to provoke another discussion about wether certain countries claiming to be socialist should actually be called socialist or not.

Yes, Zimbabwe is nominally Marxist. So is China - in fact China has a much better historical claim to a Marxist legacy than Zimbabwe. And yet it's one of the most capitalist countries in the world, and a crucial pillar of the global capitalist system.

I think we can all agree that being nominally Marxist means about as much as the fact that Elizabeth Windsor is nominally the head of state of a dozen countries, or the fact that Russia is nominally a liberal democracy.

For the real causes, try Mugabe's fundamentally racist policy of displacing white farmers and have uneducated, unskilled black people replacing them. Zimbabwes current predicament is largely, if not entirely home made.

To be fair, Zimbabwe used to be in a predicament largely caused by colonialism, but then Mugabe managed to create home-grown problems that were so much worse that the old ones are now obsolete.

[chatfsh]

Huh. Who'd have thought it, we do agree on something.

Suddenly I'm craving a cigarette

[Anathema]

So let's see... a bunch of countries in the West get rich, mostly by conquering and screwing over the rest of the world. Then they decide to give the rest of the world its freedom. But whoops - the rest of the world is so screwed that it needs loans. And who are the only ones capable of providing those loans? The rich Western countries, of course. So they get to dictate terms to their now "free" former colonies.

Let me start by saying I don't intend to glorify the colonial era. But I disagree with one sided condemnations as well.

While it was morally wrong to subjegate indigenous peoples, you should remember that that the indigenous rulers that were desposed were almost without exception autocrats or feuding tribal leaders. If we're to conclude that we disadvantaged these nations somehow, we can only do so by comparing the current situtation with the hypothetical one where they'd been left alone. While many former colonies are underdeveloped today, most if not all of them would have been in a more sorry state in an alternate history without colonial rule.

If western countries got inordinately rich from their colonies, that affluency has pretty much evaporated after two world wars.

Now I think that attempts in the 20th century (mostly following WW2) to forcibly keep these colonies from gaining independence was disgraceful. But that only happened in some colonies (like the Dutch Indies and Indochina) and had as much to do with nationalism as with profit drive.

In countries were the transition of power was more "peaceful" and orderly, some did very well (like India) and some did very badly (like Suriname)

IMF loans are a last resort for countries wich can't get money from any other source; i.e. countries wich already have enormous financial problems and often a string of domestic problems as well. To say that the IMF is causing developing countries to go down the gutter is a bit rich.

Yes, Zimbabwe is nominally Marxist. So is China - in fact China has a much better historical claim to a Marxist legacy than Zimbabwe. And yet it's one of the most capitalist countries in the world, and a crucial pillar of the global capitalist system.

I think we can all agree that being nominally Marxist means about as much as the fact that Elizabeth Windsor is nominally the head of state of a dozen countries, or the fact that Russia is nominally a liberal democracy.

Obviously Mugabe doesn't, and Mao Zedong didn't introduce marxism in the practical sense. But both were marxist revolutionaries in the beginning, and once in power they messed things up. It's interesting to note that Mugabe got where he is in part due to Chinese money.

---

It's immensely popular, actually. Even Margaret Thatcher didn't dare touch it. In Canada, Tommy Douglas (the man who led the effort to introduce universal health care) was recently voted the greatest Canadian of all time.

I'm not aware of any country that has universal health care where the proposal to abolish it would be anything less than political suicide. This is even true in the countries where the quality of care is very low (like, say, Romania). Even with bad universal health care, at least you only have to worry about paying for better or faster care; you don't have to worry that you might not get any care at all if you can't pay. It's a safety net. That is the source of its popularity. People don't like having to worry and stress about things. People prefer not to be told "get rich or die!" even if they can get rich.

The British NHS as it is has some very serious flaws though.

If there's an expensive drug on the market, approved but not offered by national healthcare and it's the only medicine that can save your life you'll take it of course. But if you do so, you'll have to pay for all of your subsequent healthcare out of your own pocket! In the UK there have been several cases of life-endangered patients who survived by using relatively new drugs not covered by the NHS, but who were afterwards condemned to poverty because the NHS refuses to pay for even routine checkups as soon as you've tasted the "forbidden fruit".

This ingeneous system (safety net?) was implemented by New Labour who reasoned that everyone who uses non-NHS medicine in any quantity is a rich bastard, who doesn't deserve tax payer coverage for the rest of their medical needs.

[Sneakgab]

''No country is forced to liberalize their economy. They just need to do so if they want to get money from the IMF. Do you think they'd be any less screwed without it?''

Well, so far I'm more convinced they would be less screwed than otherwise. In 1970 third world debt was relatively small at 75 billion dollars. The suggestion that it's increase from 18 billion dollars was due to the recession (which almost everyone agrees socialist countries would not suffer from) seems reasonable. Then by 1984, after a little IMF and World Bank ''help'', the debt had accumulated up to 900$ billion$. Of course, not all of that time span was after and during the Structural Adjustment Programmes. It seems difficult to get precise figures but none are flattering. Most seem to indicate a many fold increase of third world debt to such  an extent that had never even been remotely approached before the effects of the structural adjustment programmes (ie: before 1980s).

The obvious and huge change in debt which almost all would say was a result of the lending seems like it would easily outweigh any positive effects of the lending. It is a negative effect of such massive proportion, that really, it seems difficult to imagine that the ''no-lending'' scenario could possibly be worse.

''As far as I know, Zimbabwe has never tried to borrow from the IMF and certainly has never tried to liberalize the economy.''

Well, that would be incorrect (can't expect anyone to know everything). In 1990, Zimbabwe borrowed from the IMF and/or World Bank, and the Structural Adjustment Programme was put in place there. 7 years later, they were spending 7 times more on paying interest than on education and health. Of course, that could mean they were spending very little on education and health as opposed to spending a lot on debts... It seems likely that they are being run into the ground by debt though, spending most (or at least most) of their income paying it off (well, I seem to recall reading a figure saying as much).

Well, none of this is to say that Mugabe isn't an @$$. However, it is pretty obvious that lending from the IMF made things dramatically worse.

'' I called it "nominally" marxist because I didn't want to provoke another discussion about wether certain countries claiming to be socialist should actually be called socialist or not.''

Well, alternatively you could simply not have called it marxist at all. Considering their adoption of the policies forced by the Structural Adjustment Programme, calling the ''not at all'' marxist would seem a more accurate label than ''slightly'' marxist (well, if slightly was what you meant by nominally)

''For the real causes, try Mugabe's fundamentally racist policy of displacing white farmers and have uneducated, unskilled black people replacing them. Zimbabwes current predicament is largely, if not entirely home made.''

For the real causes, try looking at everything :P. Firstly this is an ex-colony we are speaking about. Not the greatest inheritance... So, the country was messed up by multiple different things (Mugabe's racist policy, the effects of the colonial reign, the IMF dealings,e.t.c).

Of course, you may say that actually the white colonial reign actually developed the region.

Trust me, in SA, bashing Mugabe for his displacement of white farmers is about as popular a thing to do as it gets, and it not necessarily incorrect bashing (?), but it is also important to see other possible causes.

''Let me start by saying I don't intend to glorify the colonial era. But I disagree with one sided condemnations as well.''

Well, jeez, they annexed the territories and enslaved many people (till enslavement became illegal, then they just made up laws condemning them to a similar fat). If ever there was a time to point at some people and say: They're the bad guys, this is it.

Sure they brought important contact with advanced nations and put an end to tribal conflict, but that doesn't mean that they had to set up colonies and enslave people. They could have instructed the population about democracy and taught them to sing happy peace songs after deposing the chiefs instead. Well, surely they could have done something less bad than enslaving them or leaving them as they were.

The Romans for example, after conquering barbarians (by their label) that were apparently far inferior in terms of technology, science, and were obviously typically not peaceful (well, as far as I know about barbarians), brought Roman civilization,  technology, infrastructure,e.t.c to them, as opposed to enslaving them. Now, that was probably in favor of their own agenda, but the point is that you don't have to ruin the conquered.

''most if not all of them would have been in a more sorry state in an alternate history without colonial rule.''

That is debatable. Not as much that they would be in the state you most likely have in mind (no tech and feuding), but that that state is really more sorry. When it comes to the war... well, Africa now has far larger wars with more destructive weapons. As for their state of ''civilization'', I would say that maybe it is better to live a tribal life than to live the life of somebody living in wretched conditions that are most decidedly unnatural. I am not sure about this, but it seems that their previous life of proud warriors and gatherers was better than their new lives of being lower than dogs living every day in misery.

However, I must stress that I am not sure of my thoughts on whether or not uncolonised Africa would be a happier place. I definitely must still think more on that matter.

''If western countries got inordinately rich from their colonies, that affluency has pretty much evaporated after two world wars.''

So, what exactly is you're point? Does no longer having the wealth due to wasting it somehow justify how the wealth was obtained?

Usually, only the impending threat of violent revolution and/or international intervention (not sure of the significance) lead to the ''voluntary'' leaving of the pre-existing governments.In other words, in most cases, the colonies were forcibly kept from gaining independence until they could not do so any longer.

Admittedly, many African countries were ''allowed'' their independence because not allowing it was becoming more of a headache than it was worth. This brings to question what we mean by ''willing''.

Yeah, the colonialists were ''willing'' to do it when the alternative was action against them (ie: when they were threatened).

''. To say that the IMF is causing developing countries to go down the gutter is a bit rich. ''

Yes, these countries tended to be in poor conditions. The point is that the IMF made things EVEN WORSE, that it is another ''negative'' factor. Considering that little positive came from the IMF loans, and that these countries are now doomed to a debt treadwheel, having to spend huge portions of their income on the interest, it seems completely reasonable to think that the IMF has greatly contributed to the poor state of these countries.

About countries being forced to accept IMF policies and loans. Well, sometimes they have a fair choice and sometimes they are co-erced into it by refusal of loans that would normally be granted. You say that the IMF loans were the last possible source for these countries, but in some cases that might have been because of IMF and World Bank pressure on otherwise willing loaners and investors.

Maybe they were usually willingly chosen... by the GOVERNMENT, and not by the people. Who in their right mind would accept the reduction of their public services in return for loans they will never be able to repay? (especially after seeing what happened to other IMF loan receivers). Even if these governments were democratically elected, we all know that does not mean they were performing the people's will.

That leads one to wonder why so many governments continued to sign up. Right now, I can't think of any possibilities other than that these governments were led by fools or puppets.

[Andrew]

About the "No country is forced to liberalize their economy"

I think that is very untrue. Taking economic history right now and learning about how Britain rammed open markets down mainland Europe during the 1700-1800s. So I don't see how the same thing can't happen now with modern markets.

If you don't play ball with major markets/economies, they will trample all over you.

[Dante]

This ingeneous system (safety net?) was implemented by New Labour who reasoned that everyone who uses non-NHS medicine in any quantity is a rich bastard, who doesn't deserve tax payer coverage for the rest of their medical needs.

Yes, but as we all know New Labour are retarded. It's largely thanks to them and the conservatives that the NHS is underperforming.

[Andrew]

The DOW right now is back at its bottom of 8000. Will be interesting to see if it breaks the bottom, or goes back up. I expect a lot of people to buy at 8000, since it has already done that 3 times in a couple months, then went back to 9000. 10% profit in a month is pretty good.

BofA may need billions for Merrill

So Bank of America wants to buy Merrill Lynch. But now they need a bailout in order to do it. Gotta love socialist America! If you can't pay for it, the government will!

Whats up with corporations during good economic times, save no money, take on debt, and then when things get bad, they are screwed.

It almost as if the top execs and shareholders take as much out as possible, before the bad times occur. They don't care about long term, it's all about make money now, screw the company later.

I do enjoy hearing about some companies that have no debt and lots of cash on hand. No debt = good. When bad times occur you can buy up stuff at firesale prices.

[Tatar Khan]

Whats up with corporations during good economic times, save no money, take on debt, and then when things get bad, they are screwed.

It almost as if the top execs and shareholders take as much out as possible, before the bad times occur. They don't care about long term, it's all about make money now, screw the company later.

I do enjoy hearing about some companies that have no debt and lots of cash on hand. No debt = good. When bad times occur you can buy up stuff at firesale prices.

The corporate finance works in such a way that the company always has debt. Any new project that is started by the company would be started with money both from equities and bonds. The problem that the corporate debt is always short term, there is rarely 30 year debt (like mortgages). So it is  designed to be rolled over every so many years, however when nobody will purchase the new bonds problems begin. The same thing happened to MGM Grand Casino's owner. His city centre project in Las Vegas needs new money because his debt was 5 year term. Nobody would provide funding so he is selling of Treasure Island Casino.

The reason for mix funding is the idea that actually won the Nobel Prize. The idea was shown by Franco Modigliani and Merton Miller. It rests on basic principle the more debt to borrow the more expensive it becomes to borrow new debt and cheaper to raise money through equity, the more equity you get the more expensive that becomes and cheaper it becomes to get debt. Therefore for a mix of two is needed to decrease cost of capital.

[Andrew]

Ha, on The National they say everyone is selling their assets so they can claim losses and get a rebate back from the Gov for previous capital gains taxes. The Gov is in trouble and this will cost them billions.

wtf USA gov wants another $800 billion bailout.

EDIT:

oh they are calling it a stimulas package.

House Dems offer $825B stimulus bill

Package includes $550 billion in spending and state aid plus $275 billion in tax cuts. Pelosi: 'We wanted to get the biggest bang for the buck.'

Seriously wtf? tax cuts? tax revenues for government are shrinking, and they think tax cuts will be a good thing? And they are increasing spending!?

So USA was 10 trillion in debt, this time next year will it be 15 trillion? Who will be accountable for this spending spree? How much of it will get lost like the billions in Iraq?

So the gov last summer gave back tax rebates, that did nothing. Now they want to give more tax breaks...

[Tatar Khan]

Ha, on The National they say everyone is selling their assets so they can claim losses and get a rebate back from the Gov for previous capital gains taxes. The Gov is in trouble and this will cost them billions.

Actually this is a standard practice in investment world to sell and buy back assets to cristilize capital gains or capital losses before end of tax year.

[Anathema]

Well, so far I'm more convinced they would be less screwed than otherwise. In 1970 third world debt was relatively small at 75 billion dollars. The suggestion that it's increase from 18 billion dollars was due to the recession (which almost everyone agrees socialist countries would not suffer from) seems reasonable. Then by 1984, after a little IMF and World Bank ''help'', the debt had accumulated up to 900$ billion$. Of course, not all of that time span was after and during the Structural Adjustment Programmes. It seems difficult to get precise figures but none are flattering. Most seem to indicate a many fold increase of third world debt to such  an extent that had never even been remotely approached before the effects of the structural adjustment programmes (ie: before 1980s).

The obvious and huge change in debt which almost all would say was a result of the lending seems like it would easily outweigh any positive effects of the lending. It is a negative effect of such massive proportion, that really, it seems difficult to imagine that the ''no-lending'' scenario could possibly be worse.

Well, it's obvious that as sson as organisations like the IMF start lending out billions of dollars, world debt will increase. Also while having a massive debt is by no means good, it shouldn't be made out to be worse than it is: look at the USA until recently. It becomes bad as soon as the money isn't spent wisely and the national currency plummets due to high debt and having not enough foreign investments to counter. I admit that I don't know enough about the IMF to comment on (let alone defend) their performance.

''As far as I know' date=' Zimbabwe has never tried to borrow from the IMF and certainly has never tried to liberalize the economy.''

Well, that would be incorrect (can't expect anyone to know everything). In 1990, Zimbabwe borrowed from the IMF and/or World Bank, and the Structural Adjustment Programme was put in place there. 7 years later, they were spending 7 times more on paying interest than on education and health. Of course, that could mean they were spending very little on education and health as opposed to spending a lot on debts... It seems likely that they are being run into the ground by debt though, spending most (or at least most) of their income paying it off (well, I seem to recall reading a figure saying as much).

Well, none of this is to say that Mugabe isn't an @$$. However, it is pretty obvious that lending from the IMF made things dramatically worse.[/quote']

Assuming that taking money from the IMF in exchange for implementing their desired changes is damaging, it's still in the first place the fault of the government in question, in this case Mugabe. In addition Mugabe did lots of things on his own accord that were far more disastrous.

Well' date=' alternatively you could simply not have called it marxist at all. Considering their adoption of the policies forced by the Structural Adjustment Programme, calling the ''not at all'' marxist would seem a more accurate label than ''slightly'' marxist (well, if slightly was what you meant by nominally)[/quote']

The problem is that by that logic, I can't call any nation socialist or marxist. We've been over this at least a dozen times on this forum and I agree that no nation has ever corresponded to Karl Marx' ideal of a workers state. But consider the distinction between:

A) socialism and communism, ie models of societies concieved by Marx and others

B) socialists/marxists, ie people who want to implement A

Obviously A has never existed in any real sense. There have been plenty of people who answer to catagory B however, and they have never succeeded. To say that none of them were real socialists to begin, and that the disasters they caused shouldn't be taken as a reflection on their espoused ideology is too easy.

For the real causes' date=' try looking at everything :P. Firstly this is an ex-colony we are speaking about. Not the greatest inheritance... So, the country was messed up by multiple different things (Mugabe's racist policy, the effects of the colonial reign, the IMF dealings,e.t.c).[/quote']

As I've pointed out there also are former colonial countries wich have done just fine, or at least far better than Zimbabwe. Being a former colony is not an excuse for all of your domestic problems for the rest of eternity.

Sure they brought important contact with advanced nations and put an end to tribal conflict' date=' but that doesn't mean that they had to set up colonies and enslave people. They could have instructed the population about democracy and taught them to sing happy peace songs after deposing the chiefs instead. Well, surely they could have done something less bad than enslaving them or leaving them as they were.[/quote']

The Europeans didn't do the actual enslaving, that was the Africans themselves. The descendants of the victims of slavery live in the Americas, and some in Liberia wich was originally a "colony" of American freedman. The rest of Africa is descendant from the people who traded their neighbours for shiny trinkets and guns.

The actual colonisation of Africa was much later, when slavery was dwindling as a market and soon to be abolished entirely.

The Romans for example' date=' after conquering barbarians (by their label) that were apparently far inferior in terms of technology, science, and were obviously typically not peaceful (well, as far as I know about barbarians), brought Roman civilization,  technology, infrastructure,e.t.c to them, as opposed to enslaving them. Now, that was probably in favor of their own agenda, but the point is that you don't have to ruin the conquered.[/quote']

The notion that the Romans were the one, truly civilised people at the time is a rather persistant myth. The Carthaginians, Greeks and the various Iranian civilisations weren't exactly primitive either. For that matter, the Gauls weren't the unwashed savages that they're usually made out to be either- they washed themselves with soap while the Romans just covered their odors with perfume.

''If western countries got inordinately rich from their colonies' date=' that affluency has pretty much evaporated after two world wars.''

So, what exactly is you're point? Does no longer having the wealth due to wasting it somehow justify how the wealth was obtained?[/quote']

No; it's meant as a reaction to the notion some have that the wealth Europeans enjoy today is due to theft from Africans. On that note I'll point out that during the heyday of colonialism while Africans were being exploited, the average European wasn't enjoying a laid back lifestyle either.

About countries being forced to accept IMF policies and loans. Well' date=' sometimes they have a fair choice and sometimes they are co-erced into it by refusal of loans that would normally be granted. You say that the IMF loans were the last possible source for these countries, but in some cases that might have been because of IMF and World Bank pressure on otherwise willing loaners and investors.

Maybe they were usually willingly chosen... by the GOVERNMENT, and not by the people. Who in their right mind would accept the reduction of their public services in return for loans they will never be able to repay? (especially after seeing what happened to other IMF loan receivers). Even if these governments were democratically elected, we all know that does not mean they were performing the people's will.

That leads one to wonder why so many governments continued to sign up. Right now, I can't think of any possibilities other than that these governments were led by fools or puppets.[/quote']

You don't receive money, even if lended, for nothing. Maybe the policies promoted by the IMF weren't wise (I understand they're mostly based on old Keynesian theories) but it's still up to the national governments to decide if it's worthwile to take the deal. Generally I feel that unless a particular government is actively kept in power by a foreign power, any mismanagement is the problem of the respective country regardless of how much say the people on the street had in the matter. Obviously former European powers are culpable if they left a colony in a sorry state before granting independence, but this is not an excuse that will apply to all misery that happens afterwards.

[chatfsh]

Apparently, Royal Bank of Scotland has taken another large step toward being completely controlled by the government.  The Edinburgh based bank will be one of the first guinea pigs for full nationalization.  To no surprise their stock priced plummeted 67% when the market got wind of this news. ???

[Edric O]

About time, too, seeing how RBS has been enjoying some of the privileges of a central bank for a long time.

[Sneakgab]

Forgive my usual application of WMT's (Weapons of Mass Text). Looking at this I think I could summarize it greatly and am feeling sufficiently less lazy than usual that I could do that within two or three days. So if you are bothered then I guess you can say so and wait for the better put edition.

[Sneakgab]

''Well, it's obvious that as sson as organisations like the IMF start lending out billions of dollars, world debt will increase''

The problem is that the conditions forced by the initial loan

[Andrew]

So I skimmed over America's Great Depression written by Murray Rothbard (same author as the other book I've talked about).

Lets go to the chapter Government Depression Policy: Laissez-Faire. Remember this book was written in 1963, and is mostly a critique of how the great depression occured.

Lets looks at the 6 listed items. Now what has the current government done out of these. Almost all of them.

1. prevent or delay liquidity - Yep they've done this many many times already. Prop up failing businesses (because they are too big to fail...)

2. inflate further - The government did this as well. Borrow large amounts of money and increase money supply by ridiculous amounts. Now have 0% interest rates for large banks.

3. keep wages up - hmm, they havn't forced wages to be a certain rate, but I'm sure they've done things to prevent them from falling. Propping up wages means that less people will be able to be employed. Better to have lower wages and more people employed to produce more stuff which would lead to lower prices (more efficient).

4. keep prices up - probably have done this by increase money supply so much that causes inflation which means that prices will not decrease. Oil/gas was propped up to very high levels to suck money out of the world before it crashed. Now it's back to where it was 8 years ago. With this large increase in fuel costs, and because of sticky prices, this means that prices increased a lot because of high fuel costs, but with lower fuel costs prices of goods will not go down.

5. stimulate consumption and discourage saving - The gov has done this at every opportunity. Remember the tax rebates the government gave out last summer which it borrowed from China so that people could consume more items, most of which are probably produced outside of USA? The government is retarded and people saying that saving is bad and everyone needs to spend and go into more debt to save the economy is wrong. If people can not afford to buy something they should not buy it.

6. subsidize unemployment - Already exists (employment insurance). I'm sure they will try to increase the amount of money or benefits that people get when out of a job, thus encouraging people to stay unemployed.

There is much more in this book critiquing neoclassical economics, and you can see many times how it applies to current problems, even though the book was written 40 years ago. We never learned from our mistakes.

[Edric O]

So I skimmed over America's Great Depression written by Murray Rothbard (same author as the other book I've talked about).

Murray Rothbard was neither a historian nor an economist. He was a philosopher, and an enthusiastic libertarian one at that. I never knew he wrote a book on economic history, but I would expect his interpretation of the events to be at the very least extremely biased - if not factually incorrect.

Lets go to the chapter Government Depression Policy: Laissez-Faire. Remember this book was written in 1963, and is mostly a critique of how the great depression occured.

Yes, libertarians have been writing such critiques - saying the same thing over and over - since the 1940s. For the most part they're only restating classical economic dogma that was refuted by Keynes long ago.

2. inflate further - The government did this as well. Borrow large amounts of money and increase money supply by ridiculous amounts. Now have 0% interest rates for large banks.

Erm, the usual danger in a recession is deflation, not inflation.

3. keep wages up - hmm, they havn't forced wages to be a certain rate, but I'm sure they've done things to prevent them from falling. Propping up wages means that less people will be able to be employed. Better to have lower wages and more people employed to produce more stuff which would lead to lower prices (more efficient).

Not if people can't afford to buy all that "more stuff" because their wages are too low. If you let wages fall, income goes down, so demand goes down, so companies won't be able to sell all they produce, so you'll have more factories that have to close and companies going bankrupt. Which will cause more unemployment and bring wages down further, feeding a vicious cycle.

Yes, you're right that production needs to be stimulated in a recession. But the way you stimulate production is by ensuring that buyers have more spending money, not less.

5. stimulate consumption and discourage saving - The gov has done this at every opportunity.

Right, because this is precisely the way to get OUT of a recession. As we can all see, consumption has fallen off a cliff - taking production down with it. Increasing the saving rate in a recession would be suicide. What are you going to do with the extra savings? Invest in producing things that people are no longer capable or willing to buy?

No, you need to stimulate consumption in order to end the vicious cycle I described above.

Remember the tax rebates the government gave out last summer which it borrowed from China so that people could consume more items, most of which are probably produced outside of USA? The government is retarded and people saying that saving is bad and everyone needs to spend and go into more debt to save the economy is wrong. If people can not afford to buy something they should not buy it.

Ok, let's have people buy less stuff. So that whoever was producing stuff will go out of business. Causing more unemployment, which means reducing people's income. Which means people will be able to afford even less. Which means more businesses closing.

Yeah, sounds like a great plan.

6. subsidize unemployment - Already exists (employment insurance). I'm sure they will try to increase the amount of money or benefits that people get when out of a job, thus encouraging people to stay unemployed.

See above. You need to make sure people have money to spend - whether they're employed or not - because otherwise consumption will plummet, businesses will close, and there will be even more unemployment.

There is much more in this book critiquing neoclassical economics, and you can see many times how it applies to current problems, even though the book was written 40 years ago. We never learned from our mistakes.

What mistakes? Does the book offer any actual proof that the policies you listed caused any problems, or does it rely on the simple logical fallacy of confusing correlation with causation? ("X policy was enacted before or during the Great Depression, therefore X policy caused the Great Depression")

I am not a fan of neoclassical economics, of course - I'm a Marxian economist and I reject many neoclassical assumptions - but the so-called "economics" of the Austrian School (which I presume is being promoted by Rothbard in his book, since you linked to it on an Austrian School website) is idiotic pseudoscience. The Austrian School openly says that empirical evidence is irrelevant, for God's sake...