Bollitics: VT General Election Poll #2

[snowychap]

I just think the State has the upmost importance in society, because without it society would cease to exist. Far more important than the individual. The State provides goods and services. It provides security and welfare etc. Yes, you can say individuals provide these services, but they do so because the State allows it and encourages it.

**** me backwards. It's too late but when I've got over my hangover, my shock, my disdain and my disgust, I might reply. :shock:

[Reality]

Shock?

[leviramsey]

the individual must bow to the force of servitude?

Selective quoting FTW - Levi is a good marxist!

p.s. I think I know what his reply will be. :winkold:

I actually think Marx got far more right than he got wrong. There aren't many better paeans to capitalism, IMO, than Das Kapital.

[leviramsey]

I just think the State has the upmost importance in society, because without it society would cease to exist. Far more important than the individual. The State provides goods and services. It provides security and welfare etc. Yes, you can say individuals provide these services, but they do so because the State allows it and encourages it.

So what else do individuals do because the State allows and encourages it?

Breathe?

What is the State but a collection of individuals?

You seriously believe that food would not be delivered from the countryside and further afield to London if not for the existence of the State?

I realize that being from Northern Ireland, where the State and State-controlled entities account for a rather large (even by European standards!) share of GDP, one can be forgiven for taking this view.

[snowychap]

...

p.s. I think I know what his reply will be. :winkold:

I actually think Marx got far more right than he got wrong. There aren't many better paeans to capitalism, IMO, than Das Kapital.

Chuckle. Yep. :winkold:

[snowychap]

So what else do individuals do because the State allows and encourages it?

Breathe?

What is the State but a collection of individuals?

You seriously believe that food would not be delivered from the countryside and further afield to London if not for the existence of the State?

I realize that being from Northern Ireland, where the State and State-controlled entities account for a rather large (even by European standards!) share of GDP, one can be forgiven for taking this view.

Though I agree with your questions about this bizarre pseudo-importance of the 'state' and the immediate practical effects of it, I think you ought to be rather wary of the comments about GDP. It is not an unusual economic perspective that government spending is going to become an increasingly important part of GDP (regardless of whether the libertarians agree - the corporatists overwhelm the libertarians in dollar power quite considerably).

What happens to GDP when public spending (if, say it is 50% of GDP) is cut by 5%?

[leviramsey]

...

p.s. I think I know what his reply will be. :winkold:

I actually think Marx got far more right than he got wrong. There aren't many better paeans to capitalism, IMO, than Das Kapital.

Chuckle. Yep. :winkold:

It has always interested me how people claim to be Marxists and then propose/support all manner of government interventions along the lines of the New Deal or the recent bailouts that have the effect of keeping the capitalist machine ticking along. Marx was fairly adamant (and I pretty much totally agree with him) that capitalism, left to its own devices, would eventually give the workers control of the means of production and cause the state to wither away.

Interestingly enough, I would say that Marx was also absolutely correct that the USA would be the first country to reach that point. The recent actions of the Democrats notwithstanding, the USA is still probably the closest to the Marxist utopia (which I do consider to be a libertarian utopia), which can be achieved by elevating the workers to bourgeoisie and capitalists.

The error that Leninists, Stalinists, and social democrats make is in thinking that the State can be an effective agent of the people/workers.

Smith, Ricardo, Marx, Hayek, and Schumpeter would agree on far more than they disagreed on, IMO.

[leviramsey]

What happens to GDP when public spending (if, say it is 50% of GDP) is cut by 5%?

That depends on whether taxation is reduced by 5%. If taxation is reduced, then there will probably be minimal effect on overall GDP, as the extra money left in the private sector will find its way into GDP.

[snowychap]

What happens to GDP when public spending (if, say it is 50% of GDP) is cut by 5%?

That depends on whether taxation is reduced by 5%. If taxation is reduced, then there will probably be minimal effect on overall GDP, as the extra money left in the private sector will find its way into GDP.

Really? I think you'd need to provide both equational and empirical evidence for that and also a good argument for why this will or might actually happen considering the current economic climate over the next couple of years.

I guess that you are talking about a reciprocal increase in private investment (I would say that this is not directly led by public spending and depends greatly upon other economic factors).

Also, I'm not quite sure that you've made any other judgement about savers and how those institutions dealing with savers might act than that which may have been normal a couple of years ago.

[leviramsey]

Regardless, taxation is unlikely to be reduced along with the spending cuts, so it's basically a moot point.

[snowychap]

Regardless, taxation is unlikely to be reduced along with the spending cuts, so it's basically a moot point.

Moot and wrong, I'd say.

[leviramsey]

Depending on where tax rates are on the Laffer (even though Keynes made the same observation) Curve (which is misinterpreted fairly regularly by conservatives to argue that tax cuts should always be the first option), decreasing taxes may increase aggregate income (which is of course correlated to GDP). Granted, in a situation where the private sector has been subservient to the state sector, you might well not see any growth in the private sector.

In the past century, there have been three major episodes where the US has cut federal taxation (though remarkably from WWII to the more-or-less present day, federal taxation has rarely deviated from 19.5% of GDP): Coolidge in the '20s, Kennedy in the '60s and Reagan in the '80s... each was followed by a substantial increase in aggregate income and GDP.

[snowychap]

Depending on where tax rates are on the Laffer (even though Keynes made the same observation) Curve (which is misinterpreted fairly regularly by conservatives to argue that tax cuts should always be the first option), decreasing taxes may increase aggregate income (which is of course correlated to GDP). Granted, in a situation where the private sector has been subservient to the state sector, you might well not see any growth in the private sector.

Also, where the 'government' sector has been and will continue to be in thrall to the 'corporate' sector maybe none of this fully encompasses the possibilities.

Decreasing taxes may on some base theoretical curve increase aggregate income (though as I may have alluded to that isn't necessarily for the benefit of the people/society) but that isn't necessarily the case.

I'm not sure that one can be so adherent to the exact process of any economic theory such that one says 'we must decrease taxes in order to do x'.

Social policy ought to drive and lead economic policy rather than the other way round. That is my real problem with the modern world. It ought to be how the first world (in old speaking terms) leads. If we don't lead, the rest of the world will follow the problems we had (which is happening already - most especially shown by modern slavery for example) and when everyone follows that (and with globalization these things cannot be isolated), we will really be up against it.

[leviramsey]

All I said was "probably". Thus far, I've given three empirical examples, without a counterexample being put forth by anyone.

In general, if you want growth in GDP that means increasing production (that's what the P in GDP effectively stands for...). Reducing/removing barriers to production (of which taxation is one) certainly makes it easier to increase production. However in an environment where the state sector has consistently accounted for the majority of GDP (which is true in quite a lot of the UK...), the people can be forgiven for taking the view that from the State all blessings flow and the private sector may not increase production.

What has been consistently empirically demonstrated is that, short of war (where I would argue that the cost is not worth the benefits), demand-side "solutions" do not have an effect on GDP that is equal-to-or-greater-than their cost. The massive spending of the New Deal did nothing to take the US out of the Great Depression, the current US stimulus spending is doing nothing.

[snowychap]

In general, if you want growth in GDP that means increasing production (that's what the P in GDP effectively stands for...). Reducing/removing barriers to production (of which taxation is one) certainly makes it easier to increase production.

Hold on, that doesn't take into account the current level and make up of GDP, does it? It also doesn't relate the cost of reducing/removing the 'barriers to production' to the supposed increase in production (it also has no thought for the associated costs/possible benefits which come with it).

I don't think we really want to spend time getting in to O level/A level economics equations regarding national income (otherwise we are in to the intricacies to which I alluded where a decrease in government expenditure - especially since it would have a knock on effect in the private sector - would require at least an equivalent increase in one of the other constituent parts of national income in order to level things out).

Yes, various graphs may show us that 'x' level of taxation is the premium in theory but graphs rarely show us anything true about the life we are living. Graphs are theory (even when regurgitating facts) as they only show us what has been and never what will be.

[peterms]

... Reagan in the '80s... each was followed by a substantial increase in aggregate income and GDP.

Worst recession for 50 years, 10+% inflation, 20% interest rates, massive increase in military spending but congressional inquiry into why so little result was evident for the money...

...and the way out of recession was reduced inflation via falling oil prices, and covering the combination of falling taxation and rising state spending by more than doubling national debt, turning the US into the world's biggest debtor...

What would be interesting is to consider the effect of tax cuts on economic growth without making up the gap by borrowing from abroad. That might be a better test of the theory.

[peterms]

Shock?

It's the misspelling of "utmost". It gets me that way, too.

[Awol]

Well, Geoff Hoon eh? Couldn't have happened to a nicer bloke.

[Gringo]

Well, Geoff Hoon eh? Couldn't have happened to a nicer bloke.

I think the labour party have acted quite correctly and quite quickly in this matter - which comes as somewhat of a shock.

[Awol]

Well, Geoff Hoon eh? Couldn't have happened to a nicer bloke.

I think the labour party have acted quite correctly and quite quickly in this matter - which comes as somewhat of a shock.

By preventing an investigation into these sleaze ridden fcukwits and the susbsequent allegations about Mandleson, Adonis and gawd know who else?

A firm hand shown for the public while simultaneously engaging in a cover up from the centre...not exactly my definition of acting 'quite correctly', M'lud.

BBC reckon another 22 have been taking holidays abroad paid for by foreign governments too. The political class seem to have taken leave of their collective senses. Forking lamb shankers, the bloody lot of em.

BIAD