Comment by cies | Hacker News Reader

Comment by cies | Hacker News Reader

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> Democracies are more stable and tend to contain healthier economies, in the long run [1].

Good for the economies. But some great economies happen in non-democratic places. It tells me nothing. I'm more concerned with fighting oppression than promoting the growth of "healthier economy" (what ever that may mean).

> It is meaningful, on the other hand, to consider how long a regime (and thus one's investments) will last

Investment of worker's means (like his house): sure.

Investment of a billionaires fortune: I do not give a shit, it's not in my interest to protect that kind of investment. For the record: I do not believe investment creates jobs, I believe increased consumption and protective economic policy create jobs.

> the odds of your employees being jailed for falling out of political favor

Now THAT'S oppression right there! I really hate that to happen, not because some company owner has to find a new employee, but because a person and their social environment is ripped to pieces.

> whether favorable rules (such as this one) could be re-written, again on someone's whim

Rules favourable to what? Billionaires? Or the common people?

Ask yourself: can you really define the word "economy" unambiguously? Or are you chasing a spook?

> I do not believe investment creates jobs, I believe increased consumption and protective economic policy create jobs.

You are entitled to your beliefs, but factually you are completely wrong. Without investment, you have no goods to consume. A bicycle consists of many parts. You can’t buy a bicycle without someone willing to mine the metals necessary to make those parts. You can’t mine metals without money to hire people and buy equipment to extract and process those ores. Since people don’t work on contingency, it requires an investment in order to pay people and buy stuff to extract the ores and then someone has to buy the resulting metal and create the tooling to create bicycle parts — which requires capital.

Let’s say government can do all of that — where does government get the money? Taxes. Where do taxes come from? They come from taking a share of people’s production. If people aren’t producing anything, they have nothing to tax.

I suppose investment doesn’t create jobs if you have a society of pure slavery.

Protective economic policy doesn’t create jobs — it stifles them. North Korea isn’t known for its booming economy (or full employment) because they don’t have much outside investment.

Investment absolutely creates jobs because there is one human truth that can’t be escaped — people need to eat and thus they need to be paid. Getting by paid comes from capital and capital comes from investment.

Almost the entirety of Silicon Valley was built on investment. And that creates millions of jobs around the world. Apple alone employs hundreds of thousands in China — jobs that would not exist without investment. Don’t believe me? Have a look at the Chinese poverty and unemployment rates in 1970 long before they began opening up to outside investment.

I get it that’s many people seem to dream of a socialist utopia — however that is a fantasy. It doesn’t exist and it never has because people are fundamentally driven by their need to eat.

I think you may be talking past each other.

It's true that investment creates jobs, but it's also true that there's no investment without consumption.

The current prevailing economic policy consensus is very much misguided in that it only focuses on increasing investment. But investments just won't happen when there's nobody (or rather: not enough demand) to buy the resulting products.

This is why we need more policies that aim at consumption.

As a final thought: the reason why our prevailing economic policy consensus is misguided in the way it is is probably mostly down to motivated reasoning. If your goal is aiming at consumption, you have to look at the lower end of the income and wealth scale (because that's where the marginal propensity to consume is high). If your real goal is to make life even easier for the wealthy, it's comparatively easier to hide corresponding policies under the mantle of helping investment. Hence the focus on investment.

> The current prevailing economic policy consensus is very much misguided in that it only focuses on increasing investment

This is a straw man [1]. Consumption is generally recognized as being the dominant component of market economies' GDPs. The IMF's position with regards to China has been, consistently and for years, that they are prioritizing investment over consumption to the detriment of stability.

[1] https://en.wikipedia.org/wiki/Straw_man

> > I do not believe investment creates jobs, I believe increased consumption and protective economic policy create jobs.

> You are entitled to your beliefs

Thank you :)

> but factually you are completely wrong. Without investment, you have no goods to consume.

I'm not saying investment in not needed at all. I'm saying that it does not create jobs. The demand for bicycles creates jobs. Not the investment in the production process.

The investment follows the (predicted) consumption.

> I suppose investment doesn’t create jobs if you have a society of pure slavery.

Seriously? Slavery has often been "invested" in. They merrily went hand in hand. Societies that did not have a capital system (like native americans or aborigines) sure were not all slaves. Your statement make no sense.

> Protective economic policy doesn’t create jobs — it stifles them. North Korea isn’t known for its booming economy (or full employment) because they don’t have much outside investment.

I have no idea, nor interest in NK, in this matter. Look at Taiwan, Singapore and HongKong. They were protective and managed to race out of poverty. Now look at the countries that signed every trade agreement the IMF made them sign: all fucked.

> Investment absolutely creates jobs because there is one human truth that can’t be escaped — people need to eat and thus they need to be paid. Getting by paid comes from capital and capital comes from investment.

Dead wrong again. Am economically-rational business owner would rather not pay anyone. The only reason he does is because he needs the worker in order to supply the demand. THE DEMAND comes first, consumption comes first. Thus investment does not create jobs: increased consumption does.

There's a chicken-egg problem there, a consumer needs money to consume, and that often comes from jobs. Investment can break that cycle, but it can just as easily fuck it up. And --as I mentioned-- investment follow (predicted) consumption.

> I get it that’s many people seem to dream of a socialist utopia — however that is a fantasy. It doesn’t exist and it never has because people are fundamentally driven by their need to eat.

If that need is frustrated, yes. But often we have enough food, and housing, and then it starts to get interesting. I'm not dreaming of a soc utopia, I'm being realistic in knowing that it is increased consumption and protective econ policy that creates jobs.

Investment follows.

> Look at Taiwan, Singapore and HongKong. They were protective

You literally picked three free trading economies [1], each highly reliant on foreign investment. Hong Kong was explicitly established as a free trading nexus for London and China. The IMF has for years been asking Hong Kong to increase regulation [2].

In contrast to Belarus, you also picked at least two countries which have defined themselves, in large part, around a respect for the rule of law.

[1] http://www.columbia.edu/~ap2231/ET/et27-june01.htm

[2] http://www.imf.org/en/News/Articles/2017/11/29/ms112917-chin...

> You literally picked three free trading economies

Yes! Protective econ policy does not mean to close borders. It means to open/close when it makes domestic sense. And I'm not talking about their policy today, I mean their policy over the years of working their way out of poverty.

But people do work on contingency, all the time.

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