six things tagged “economics”

On Privatizing Gain and Socializing Loss

Though capitalism has had a longer lease of life than some of us would’ve predicted or that many of our ancestors of the socialist movement did predict or allow, it still produces the fax machine and the microchip and still able to lower its costs and still able to flatten its distribution curve very well. It’s central contradiction remains the same; It produces publicly, it produces socially, it conscripts and it mobilizes and educates whole new work forces of people, it has an enormous transforming liberating effect in that respect but it appropriates privately. The resources and the natural abilities are held in common, the earth belongs to us all. You can’t buy your child a place at a school with better ozone. You can’t pretend that the world is other than what it is which is one and human and natural and in common. Though capitalism must do that because it must make us all work until the point when the social product is to be shared. When suddenly the appropriation is private and suddenly Donald Trump outvotes any congressman you can name and anyone with a vote because of the ownership of capital and its that effect, that annexation of what we all do and must do — the influence of labor and intelligence and creativity on nature; the same air, the same water that we must breathe and drink. That means that we may not have long in which to make this critique of the system sing again and relevant again and incisive again.

Christopher Hitchens, Is Socialism Obsolete? (Recorded in Washington DC on October 11, 1989)

Reaganomics: The Rest of You Shall Eat Shit

The economist John Kenneth Galbraith noted that “trickle-down economics” had been tried before in the United States in the 1890s under the name “horse-and-sparrow theory”, writing:

Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: ‘If you feed the horse enough oats, some will pass through to the road for the sparrows.’

Galbraith claimed that the horse-and-sparrow theory was partly to blame for the Panic of 1896. While running against Ronald Reagan for the Presidential nomination in 1980, George H. W. Bush had derided the trickle-down approach as “voodoo economics”. In the 1992 presidential election, independent candidate Ross Perot also referred to trickle-down economics “political voodoo”. In the same election during a presidential town hall debate, Bill Clinton said:

What I want you to understand is the national debt is not the only cause of [declining economic conditions in America]. It is because America has not invested in its people. It is because we have not grown. It is because we’ve had 12 years of trickle-down economics. We’ve gone from first to twelfth in the world in wages. We’ve had four years where we’ve produced no private-sector jobs. Most people are working harder for less money than they were making 10 years ago.

Wikipedia

It never made sense and simply doesn’t work.