-17 karma · joined August 21, 2018
Sorry if this is obvious but I have been doing a lot of reading on this and have come across this step a few times before...but am just missing some part of every explanation.
The only possible criticism of the UK govt is that they made this bed for themselves by aggressively narrowing the tax base.
Yeah, I went to Hooters...conferenced pretty hard, drank too much, conferenced all over the sidewalk...you can tell I am serious because I use the word conference a lot...conference.
It would be interesting to know what he actually thinks but I know because I have actually been in that situation (unf, more than once). It isn't fun, it is soul-destroying to pour your being into something you love with no reward. Even if you are "successful", that initial experience of feeling trapped taints it (indeed, the whole point is that you are immune to notions of success/failure and the experience changes your notion of success...if you come into thinking about success then you will get washed out in a few months).
And he was successful despite it. He would have done okay whatever he did. It is just a little unfortunate that he had go down that path, imo.
No the risks weren't independent. Again, if you understand what happened in the 1960s then you would realise they weren't. The whole point of the period is that they tried to make it independent, and it didn't work (this isn't wholly true, all central bankers knew it wouldn't work, France in particular, but they saw no other option).
This is not to say that it cannot work...China is a perfect example of it working, it worked during WW2...but the issue is that it causes your economy to malfunction because you remove competition entirely which results in high prices and high taxes (it also isn't that feasible today politically as it requires a significant amount of intervention in day-to-day life i.e. foreign currency rationing, banning certain financial assets like gold, etc.). Again though, the proof is that no-one who has actually lived in the system you are describing thinks it works. For example, China's policymakers would certainly prefer to have a market-based system of finance right now, and they clearly understand how important it was to open their trade account to competition (although they did continue do so in a somewhat limited fashion).
And no, your understanding of the financial crisis is not correct. Ireland socialised losses during the GFC, before the Euro crisis. But the reason for doing that is exactly in line with what you are saying. If you want to limit the damage of speculative finance, then you socialise losses. That is what happens in China, it is what happened during WW2, it is what happens when you have don't a freely floating currency (which is what you are suggesting), and it happened in the 60s (the only reason the speculative attacks in the 60s were fended off were huge loans from central banks to Britain to ensure they didn't devalue and trigger a speculative attack on the dollar).The only new issue that the GFC raised was the wisdom of mixing the payment system into banks.
If I had to boil down the mistakes you are making (aside from not reading about the actual events that occurred): the reason we came here is because there is no other choice. You cannot control speculative forces and have a productive economy, it is one or the other. But the other mistake you are making is assuming that the only way to limit the effect of capitalism is by doing weird dictatorial stuff they even knew was stupid six decades ago (like trade controls, which Trump is trying now). Again, Denmark is a perfect example: they have one of the most capitalistic societies anywhere (probably more so than the US) and just use social policy to limit the damage...without interfering in the market. It works fine. The issue is that most people believe (or are told) that it is a black or white choice (there is a correlation here with the political system, adversarial-style democracy isn't particularly effective).
First, the system was not safe...at all. There were pretty much constant financial crises through the 1960s.
Second, the reason why these crises occurred is because the US promised to buy central bank gold at X price. This wasn't sustainable, this caused crises as central banks tried to acquire gold and the UK/US tried to stop them doing so (gold pooling arrangements are an example). It was a fundamentally bad system.
Third, the reason why the system appeared "safe", in today's terms, was govt assumed all the financial risk. Trade and capital accounts were closed, even ones that were open had significant limitations. For the US, this didn't work out terribly because they could keep printing "gold" paper that actually had no value...for everyone else, it was terrible (particularly, the UK). This required some level of protection of domestic industry and resulted in poor competitiveness, high taxes, and high prices for consumers. The funniest thing about this re imagining of the 1960s is that if you actually read what policy makers thought, they believed it was terrible system that would fail (and they were correct).
It is impossible to distinguish between productive and speculative finance, and it is actually very important that you don't try to (this was a major concern in the 1960s and for the IMF, they believed they could control speculative capital movements distinct from productive capital movements...it didn't work). The 19th century saw several financial manias, they produced waste but also tremendous value (canals, railways, electricity, etc.). You can't have one without the other. Finance is risk, and you can't take risk without the possibility of failure.
One of the problems today, typically outside of the US, has been the inability to cope with failure (and so you get lots of idiots saying we just need to get rid of "speculation"). No, the aim of capitalism is to maximise productivity/competitiveness by maximising failure. The solution to this problem is social policy (i.e. Denmark) not trying to fiddle with capitalism. It should be no surprise that this viewpoint has coincided with an increase in concentration of wealth (rich people generally don't like competition/capitalism...another aspect of history that is forgotten).
The Industrial Revolution is not particularly simple but two things are accepted: it wasn't just about technology (besides anything else, if you say it was just technology then you still have to know why technology changed? This question is a central focus of current IR research i.e. McCloskey) and finance was very important (the invention of govt finance/taxation, particularly so).
It maybe isn't worth getting bogged down in the detail but an important part of the industrial revolution was a shift from assembly at home - "proto-industrialisation", which had existed for ~150 years before the IR - to factory-based production. Finance was essential to this process (and impossible without it).
I would be hesitant to frame it in terms of something that already exists however. In terms of function, the outcome should be skills that are applicable to business so vocational. But it needs to be more distinct. For example, more vocational education should have significantly greater links to business than already exists (not research but training).
Srs though, ppl aren't particularly interested in being told that stuff is okay or even learning from past experience. The present is always extremely unique and very dangerous.
For example, I am not from the US but follow US politics...as far as I can tell, every election over the past ten years has been "the most important election there has ever been". I remember 2012 specifically: it was hyped into oblivion but was totally inconsequential.
I am not sure what you mean about education (I don't know what "shared environment" or "randomness" means in this context). I am sure everyone here knows there are tons of issues...it comes down to: if you had to build the education system today, would it look like what we have now? No, quite clearly not. The situation in every country is obviously very different but that is what it comes down to: inertia. There is nothing intrinsically difficult though, we have got this far after all.
The only thing that doesn't appear to function well now is education, which appears to be stuck in the post-WW2 mentality of a job for life and which the author does identify as a problem. That doesn't seem like a particularly big deal however (at least half of the problem is convincing people that they need to keep learning).
The real concern for me is people constantly predicting the end of the world. Politicians are taking it seriously and they will inevitably fuck it up. Also, the world that journalists seem to live in has pretty much never existed. The only reason a "job for life" occurred after WW2 was because of the huge barriers on trade/capital that were put in place around this period. No competition, high prices...yes, the true glory days.
And the CEO of Regus is still a bit crazy about tech btw. They actually have an R&D arm that is trying to build self-driving office cars...or something. I never worked it out.