The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
The Forum - On Line Opinion's article discussion area


RSS 2.0

Main Articles General

Sign In      Register

The Forum > Article Comments > Capitalism at the tipping point > Comments

Capitalism at the tipping point : Comments

By James Cumes, published 11/12/2008

A wisely calculated return to sane global economic management will take time, as well as care, patience and understanding.

  1. Pages:
  2. Page 1
  3. All
An excellent article.
My only comment is that I would appreciate a further explanation of the adverse effects of the USA having too big a role in deciding the international financial rules. The author comments on this without much detail.
My view is that the Basle Agreements have allowed the USA financial authorities off their leash and allowed the banks in this country to expand the money supply by about 12% - 14% per annum compound and thereby facilitated the bubble in the housing and stock markets.
The previous federal government kept wage and cost inflation under reasonable control but inflation like a wild horse in a small paddock will burst out wherever it can and on this occasion it priced many average earners out of owning their own home or saddled them with unnecessarily high mortgages.
Posted by Foyle, Thursday, 11 December 2008 12:22:38 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard

In my young days, someone told me that history is no story. “It is” he said “to day as determined by yesterday”. In your writings such warning seems constant.

Many, old enough to observe the events of the last seventy or so years, have sensed what you so vividly and accurately describe.

Some have even staged the inane though symbolic protest of getting away from the share markets only to see the most significant banks engaging in immoderate gambling.

What to do? Gambling is an addiction only sated by the total loss of wealth and the sweet taste of absolute misery for the individual, but if those who are responsible for our wealth gamble it, the taste of misery is for the nation and the world, as we now see.

Democracy, if we had had it, could not have helped.

Every political system I have read of, with the exception of anarchy, conceals the motive of dominance.

Democracy in practice has proved to be a number-game with which the society’s most cunning and heartless and insane, trample the ones with vision and goodwill.

.The Australian aboriginal social systems I have heard of had no motive of dominance.

The council of elderly main function was to administer justice. Justice as extension of family costumes within the host ambient.

We, men of the third millennium dream of a judge and of a policing body not paid by politicians; we dream a single law and not of a criminal and civil one; we dream to have the wealth that is common to us administered by people with no credo and no fantasies of grandeur only to wake up to the reality of drugs, rioting and killing; the factual consequence of dictatorship
Posted by skeptic, Saturday, 13 December 2008 2:03:04 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
This article looks on seven decades of inflation of the money supply by the Federal Reserve and assumes that it has either:
1) no economic effect whatever, or
2) an effect that is only beneficial.

The first assumption can be rejected out of hand. How could it have no economic effect?

But when we think about the second assumption, how can that make sense? How could inflating the money supply have an effect that is only beneficial? Money being the medium of exchange, a party to a transaction is on either side of any given use of money. For every person benefitting, someone must be disadvantaged. Other things being equal, inflation takes from those who save, and gives to those who spend, takes from those who lend, and gives to those who borrow.

Also increasing the supply of something lowers the price. How could lowering the price of an essential supply have no effect or only a beneficial effect?

But if it were true that the net benefit of inflation is positive, then we have discovered magic pudding: we have discovered a machine that magically turns stones into bread. Don’t laugh, this is what Keynes actually thought.

Keynesian theory is wrong. It we can make real wealth simply by printing money, why do it only during recessions? Why do it only to address unemployment?

Why not make us all millionaires and have done with it? Indeed why not create such a paradise of wealth that all shortage of resources is abolished, and no further economic activity, or human action is necessary?

Keynesian theory is nonsense on stilts.

I guess my surprise in all these discussons of the travails of capitalism, is that everyone just seems to gloss over the elephant in the parlour. Their method is simple: condemn capitalism for anything you don’t like regardless whether the problem wouldn’t exist but for anti-capitalist government interventions.

Yet the arguments in favour of capitalism are precisely that the alternative is political power and privilege, economic disorder and high cronyism. Those blaming capitalism for the current crisis are actually confused supporters of capitalism.
Posted by Diocletian, Saturday, 13 December 2008 3:31:42 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
I cannot agree with Diocletian’s position or let it pass without comment.
In the article James Cunes pointed out that, “John Maynard Keynes saw his mission as rescuing a capitalism worth preserving: not capitalism’s demise. That rescue could be effected only if capitalism became more disciplined, better managed and more wisely regulated. Left to its irresponsible self, it would inevitably self-destruct.
Between 1945 and 1969, variations of Keynesian capitalism in a variety of countries yielded high and stable rates of growth and employment. That sort of stability did not encourage speculation. The cowboy capitalists were in retreat. A primary element in Keynes' rescue plan was thereby realised: speculation belonged at most at the margin; it must not inhabit the economic mainstream. We ignored that warning, especially from the early 1980s onwards”.
It is impossible, even ridiculous, to apply Adam Smith’s competition theory based on the corner butcher to situations where the only competition is between oligopolies of the market might of Coles and Woolworth’s for example or between Bunning’s and the one or two man local hardware store.
Certainly the people through their representatives have a right, maybe even an obligation, to get the engine of the economy moving again and Keynes had a recipe to do that. And a better recipe has not yet been found.
Keynes also recognized that regulation is necessary to keep the speculators and racketeers from taking the citizens to the cleaners in the good times, and the bad, and to minimize the risk of adverse events occurring such as we are now experiencing.
By having the USA currency virtually the only currency of international trade and then entering into the Basle Agreements we ignored Keynes and we are now suffering the consequences. The author makes much sense; some of the comments don’t.
Posted by Foyle, Sunday, 14 December 2008 11:13:51 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
  1. Pages:
  2. Page 1
  3. All

About Us :: Search :: Discuss :: Feedback :: Legals :: Privacy