"I once made the mistake of taking seriously an article which depicted Hugo Chavez President of Venezuela poorly"

Well I certainly would not want to live under Chavez or
Fidel! I can't see huge hordes of people getting on boats,
sailing to live in Cuba either.

As to the Economist, in terms of accuracy of its data,
it has no equal. Thats why anyone who matters in politics,
economics,or business globally is a subscriber. Their
website has some free articles, for those interested.

Daggett, which ever way you look at things, what takes
us forward is innovation. The computer you use, the
software, etc etc, all due to innovation and competition.
You benefit every day!

Thats why the best economic system will be one where anyone
is free to innovate, take risks and let consumers decide.

Thats why market based systems work so well, compared to
Govt planned economies. Stifle innovation and everyone loses.

Thats the reality.

Rhian,

I agree with much of what you have written, but not all.

Perhaps, if you arrived at my understanding of just how serious the situation is you might see the necessity for more government mandated solutions rather than largely free market solutions will be necessary.

I don't believe that we would have got through the Second World War merely by providing the right incentives to private companies, and as I believe that peak oil, global warming and all the other looming threats will combine to create a crisis vastly more serious than the Second World War, then Government mandated action, including against recalcitrant corporations may be all the more necessary.

I would hasten to add, that this need not preclude democracy and active participation of the populace. Indeed, I beleive it would work better in such and environment.

---

Yabby,

How could I not have anticipated those cheap shots against Hugo Chavez and Fidel Castro? I could have omitted to mention what the article was about, but I did not. Nevertheless, the point remains, from my experience, I don't consider The Economist to be a fair and objective journal.

Anyway, here's the start of the article:
http://www.economist.com/business/PrinterFriendly.cfm?story_id=7270301
... which is now behind a pay-wall.

It is essentially an attempt to discredit the concept of government-owned oil companies. In the case of Venezuela, it makes no mention of the broader context before Chavez came to power and how more and more of Velezuela's oil wealth was siphoned off into private hands whilst the poor went without before Chavez came to power.

And here is a previous online discussion about Hugo Chavez and Venezuela where the article was cited:
http://johnquiggin.com/index.php/archives/2006/11/27/monday-message-board-51/#comment-95075

Also, if you have anything new to say about Cuba which has not already been said, why not post your comments to: http://johnquiggin.com/index.php/archives/2006/12/12/castro-and-pinochet/#comment-103920
?

However, the hoary old argument that considerable numbers of Cubans have been lured away by the promise of first world affluence in the US has already been tried, so you may have to come up with something else.

Daggett, you are free to shoot the messenger, in this case
the Economist, but I happen to agree with their point of
view. I can't see why Govts should get involved in the
oil business, when they can leave that to experts and
simply tax production as a resource tax. Sounds
to me that Chavez stuffed what used to be a good oil
company.

At the end of the day, who is developing new technologies
etc for the oil business? Private enterprise of course,
as its where innovation can and does happen.

I read some of your quoted threads and you come across
very much as an apologist for Castro.

You are free to think that Castro and Chavez are great
politicians, personally I think that they are both
fanatics who are damaging their countries bigtime and
its the people who suffer in the end.

Trying to excuse the disaster of the Cuban economy, based
on the fact that the US boycotts trade with Cuba, forgets
the fact that Cuba has the rest of the world to trade with.
Fact is they don't have much to trade, as their economy
is a disaster. Govt planned economies don't work, as
creativity and innovation are stifled. So everyone loses.

It sounds to me as if you prefer an egalitarian society,
where everyone is poor, rather then some rich some poor.
What market economies can do is create wealth that would
not have existed in Govt planned economies. Thats the big
difference.

Wealth creation comes from innovation, creativity and
entrepreneurial types backing their own judgement and
taking risks. Some will fail and lose the house, others
will thrive, consumers will decide. If Bill Gates had
been born in Cuba and been forced to work on a sugar plantation
by Castro, everyone would have lost, including you the
consumer.

Yabby,

As I wrote, if you have anything new to say on the question of Castro and Chavez, feel free to add your comments to those threads I mentioned above, or else, start up another, perhaps on OLO. I think others will find that the 'arguments' you have put here have already been been put on http://johnquiggin.com/index.php/archives/2006/12/12/castro-and-pinochet/#comment-103920
... and have been answered, so I am not going to waste further time here.

---

Simply stating over and over again the unfounded neo-liberal doctrine that innovation is only possible where the profit motive exists (at least three times in your last two posts) is not proving your case.

In another thread, "Can Australia ever be self-reliant for national defence?" at http://forum.onlineopinion.com.au/thread.asp?discussion=860 I discussed how Australia became an advanced industrialised nation between the two world wars and succeeded (contrary to popular mythology) in deterring a Japanese invasion and subsequently playing a major role in the defeat of the Japanese. Much of that innovation which made that possible occurred in Government-owned laboratories and factories, which in turn, made their knowledge freely available to the private sector.

In fact, deference to the wishes of private corporations who were on occasions hostile to Government-led innovation actually hampered our industrial development. In the case of aircraft manufacturing, if the Government had just got on with the job, Australia would have been able to build a modern fighter at the outset of the Pacific war instead of the middle of 1942.

Also, Telstra was for decades a world leader in telecommunications technology as I have shown above. The groundwork for this was established prior to WW2 by those government research laboratories and by the Post Master General (as it was then known). For further information, see "Armed and Ready" 1995 by Andrew Ross.

In the case of Castro's Cuba, they magnificently adapted to the sudden loss of much of their oil from the former Soviet Union in the middle of the 1990's. If a few more Australians could caste aside their idological prejudices, I think we could learn a lot.

James Sinnamon (author)

Yabby, you say "Wealth creation comes from innovation, creativity and
entrepreneurial types backing their own judgement and
taking risks" - true, but many of the technologies that we enjoy today (including the internet) came about because of significant government funding and indeed non-private enterprise. So to deny that the government can have an important role in driving innovation and technological change is to completely ignore history. I fail to see private enterprise getting us to the moon, delivering us the ability to split the atom. On top of that, Linux and the rise of open source software (almost certainly powering the forums that we're on right on) has proven that significant innovation can happen without the motivation that private enterprise relies on (profit!).
Anyway you look at it, the idea that private enterprise is the only, or indeed even the most important driver of innovation and wealth creation turns a rather blind eye to reality.
And while I am no supporter of Castro or Chavez, and have no desire to live under such a regime, there are myriad complex reasons why such societies have not been economically successful (U.S. sanctions being an obvious one) - to assume it is entirely because socialism at its core necessarily suppresses the human ability to innovate and create wealth is to take a very simplistic view of reality. Capitalist and socialist ecomonies both have lessons to learn from each other - both in what each has done poorly and what has been done well. Cuba's ability to transform its food-production in the wake of its loss of oil imports cannot be dismissed out of hand - nor can its achievements in medical science and healthcare. But as long as Castro and Chavez see capitalism as inherently "evil", it is unlikely they will succeed in significantly reducing poverty in either nation.
(BTW, any votes on taking this conservation to different forum - without the absurd 2 posts in 24 hour limit?)

ColRouge,

You said, >>RobP "make our economic systems work for the benefit of people rather than the other way around.”

They do. The ownership of assets is ultimately, through shares or superannuation, owned by people. That those who err to prudence, rather than profligacy tend to benefit more is just a matter of individual perspective as you commented re – “there are as many perspectives to achieving this as there are people”. <<

It's true that ownership of assets is held by the people, but for any individual, that ownership is often only nominal or with strings attached. For example, how often do people who try to get access to their insurance money, get blocked by the fine print of the contract? And there are a myriad of other examples where it becomes obvious when delving into the detail that some people are much more equal than others when actually accessing their sequestered wealth.

However, I agree with the truth in the principle "you get out what you put in" which is implicit in your ideology. It's true that people who work harder, generally do better. But, it is precisely with this view in mind that welfare, which is just a big offset (ie a side payment that doesn't seek to compete with or crimp the wealth generators), was created. It is a recognition by the state that "we know you can't compete with, contribute to or participate in the economy for whatever reason, but this will help keep your head above water".

This is an example of civilising the otherwise damaging effect of capital markets on humans. Another example that we may well see in future is the flattening out of the market so that, overall, more people at all levels can participate economically and earn a decent crust - ie, a spreading out of opportunity for people.

Another is to continue building central social infrastructure that is cheaper built by Government but which helps all citizens - ie, the economic system is steered toward improving the common good.

BTW, I'm not a socialist, but can see its merits.