Another Neoclassical Lie: Neoliberal Economics is the Best Way To Help the Poor

Also, the poor are poor for a reason. If you follow your liberation theology and gather resources for the poor through redistribution you’re shrinking the area of the pie from which everyone draws resources. Capitalists lose, some of the poor who become powerful in the new redistribution (i.e. community organizers and feminists) gain power, the majority of the masses lose as well because they aren’t smart enough to create jobs for themselves or make their own way without someone providing a job and capital for them to work with.

You want egalitarianism, but that comes at the expense of quality of life. So that everyone is equal you are willing to accept that everyone is equally poor.

This becomes an epistemological battle in that we are pitting the idea of socialism or social democracy against a relatively free economic model. People can choose for themselves what they want, and it seems that they usually choose economic freedom over egalitarianism.

In many social democracies, people are certainly not equally poor, and most Communist countries wiped out poverty, even if they only were able to provide a relatively low standard of living and the model bogs down and collapses over a period of some decades.

Surveys the world over show that most people want some kind of socialism. There are few exceptions, though the US may be one of them. Socialist, populist, progressive or Left parties rule almost the entire globe. Rightwing parties are in the minority or out of power in most places. The few places where they have power (the US, Chile, Colombia, Philippines, Thailand, the Baltics) they are busy destroying the country, just like they always do.

That’s one of your neoclassical lies. I just showed earlier how 12 of the 13 richest countries on Earth are all social democracies. Also many wealthy countries have low to very low Gini coefficients. Go to a place like Sweden, and you will be amazed at how many small businesses there are. Literally one on every corner.

The masses don’t lose. When you redistribute wealth, as long as you do not do so too radically, the masses gain tremendously in wealth, power, resources, benefits and rights. All neoclassical economics ever does is shift wealth from the bottom 70-80% of the population to the top 20-30% of the population. We have had decades of neoliberalism in the 3rd World, and this has been the result. Total failure. Which is why it’s being abandoned lately in Latin America.

The economies that are really kicking ass now are heavily socialist economies like Russia and China (state capitalist, corporatist or mixed economies). The economies that weathered the latest Capitalist Depression best used stimulus spending to come out of it and had heavy state intervention in the banking system. The ones that got fucked worst of all had followed neoclassical economics in their banks to the greatest extent (Iceland) or following neoclassical economics, used austerity instead of stimulus to deal with the slump (Baltics and Ireland) got fucked worst of all.

Laissez faire is refuted. Neoclassical economics doesn’t work. It causes wild booms and busts and leads to regular economic recessions and depressions. It’s only good for rich people because the purpose of it is class war and wealth transfer.

22 Comments

Filed under Americas, Asia, Capitalism, Chile, China, Colombia, Conservatism, Economics, Eurasia, Europe, Ireland, Latin America, Left, Marxism, Neoliberalism, North America, Philippines, Political Science, Regional, Russia, SE Asia, Socialism, South America, Sweden, Thailand, USA

22 responses to “Another Neoclassical Lie: Neoliberal Economics is the Best Way To Help the Poor

  1. Uncle Milton

    To Rob:

    The economies that are really kicking ass now are heavily socialist economies like Russia and China.

    Calling the current Russian and Chinese socialist economies is a joke, especially in comparison to calling the US a right wing economy. Is there social security in China or Russia..? No. Free medical care…not really and if you think you can’t get free medical care in the US then you just don’t know the system.

    As for Thailand.. what are you calling Right wing..? What do you know of the country…? You do realize it’s the most prosperous country in the immediate region after Malaysia..? (Versus Vietnam, Burma, Laos, and Vietnam…)

    There are very valid critiques of Neoliberalism but your broad screeds are not well thought out.

    • Yeah, most prosperous. With 32% malnutrition. Take your “prosperity” and shove it up your ass, UM.

      Russia still has a very well functioning private sector, there is huge state spending, especially on infrastructure but also on social needs. For instance, municipalities build things like spas for their residents. Further, quite a bit of the economy is still in state hands. Most people think it’s a mixed economy.

      A very large % of the Chinese economy is publically owned or run by collectives. You can’t even own land. That state owns all the land. Most of the banking system is run by the state, that’s why they weathered the downturn so well. Most people think it’s a mixed economy.

      The Economist magazine calls both “state capitalist,” compares it to socialism and says both nations are a refutation of neoliberal capitalism.

      You’ve been shilling for laissez faire capitalism since the day you showed up here, UM. And then you always deny it. Just like for many months, you shilled for White racism, then got mad and denied it whenever anyone pointed it out. You’re not honest about what you do. You take positions, then when people point out your positions, you get mad and deny you are taking those positions. It’s slick propaganda.

      • Uncle Milton

        To Rob:
        You can’t even own land. That state owns all the land.

        Do a search on Chinese Real Estate speculation (a capitalist endeavor which I do not approve of.. maybe I’m a commie..believe or not I have been called that on another blog..) and see how many hits you get.

        http://en.wikipedia.org/wiki/Property_Law_of_the_People's_Republic_of_China

        “The Property Law of the People’s Republic of China (Chinese: 中华人民共和国物权法, Pinyin: Zhōnghuá Rénmín Gònghéguó Wùquán Fǎ) is a property law adopted by the National People’s Congress in 2007 that went into effect on October 1, 2007. The law covers the creation, transfer, and ownership of property in the mainland of the People’s Republic of China (PRC)[1] and is part of an ongoing effort by the PRC to gradually develop a civil code. In developing civil law in the PRC mainland, the PRC government has used the German Pandectist system of classification under which the property law corresponds to the law on real rights, which is the term used in Chinese for the official name of the law.”

        I actually think this action (below..) is a good idea.. albeit quite possibly will be used to punish ones enemies and reward a few friends:

        http://www.chinapost.com.tw/taiwan-business/2010/10/12/275816/Government-plans.htm

  2. Uncle Milton

    I’ve been to China, Vietnam, Laos, Burma, the Philippines, and Thailand… whatever they may state on paper is not followed in reality. It sucks to be poor in all of those countries but it sucks somewhat less in Thailand… because if nothing else you can rip off the many tourists with a smile and there actually are subsidized health clinics in Thailand and the Philippines. In addition there are quite a few charitable organizations within and without the catholic church. In theory you have free (sort of) care in Vietnam but you basically have to pay a bribe to be treated.

    Sorry to be so contentious but what you are saying just doesn’t reflect the reality of these countries.

  3. johnUK

    @Robert Lindsay

    Don’t read The Economist as reference and insight in China and especially Russia it is a Rothschild/City of London propaganda rag.

    China and Russia main asset and why they are successful is that they have developed at least in the case of China I wouldn’t really say Russia a mix between a regional private initiatives with strong central state backing and control of major sectors of the economy and industry were they have put millions of dollars and research into creating new industry.

    Truth is the same happens in western countries although it is a handful of companies and central bankers finance research institutes like the Rockafellers, Rothschilds, Schiffs, Bush and Saudi dynasty, etc and the major companies like Google and Microsoft support from the CIA and linked to CIA companies despite the fake appearance of democracy in a classical sense.

    Basically if you practice protectionism and will be labelled an authoritarian government where you have real sovereignty over your own government not the banks and major companies including the mass media in the hands of multi-national companies then your country is likely to succeed as long as the population is relatively smart and scientific institutes.

  4. AJ

    Dont bet on Russia, theyre a bunch of politically correct pansies. A new proposed law wants to ban media from mentioning the ethnicity of criminals…WTF!! to “curb extremism”. Its pathetic really, Russia used to be a proud country, but now theyre just a bunch of sissified, politically correct, self-hating, anti-russian, anti-freedom punks.

    • johnUK

      @AJ

      Yes there insane PC policy will lead to Russia’s demise.

      1917 all over again except this time it will be more worse.

      In regards to the whole terrorism issue they absolutely refuse to name the countries involved in supporting terrorism and organised crime in Russia including major terrorist attacks despite having all the evidence they have collected from captured or killed jihadists.

      They don’t even try to refute the easily debunked propaganda and there pro-Muslim bias on RT is insane going with the western narrative on the Balkans instead of covering the Karadzic trial which will expose western support for Islamic terrorism and Al-Qaeda.

      On the RT blog I posted a section from the 9/11 lawsuit and a link to the document where it quotes that the government of Qatar financed Khattab and Basayevs invasion of Dagestan in 99 and finance recruitment and military training camps in Azerbaijan and they removed it.

      Even US own terrorism court cases confirm individuals and states involved most prominent linked to British and US intelligence.

      Not that Russians give a shit anyway. They just don’t care about their own country. They could convert the whole country to Islam and they wouldn’t protest in the slightest.

      But you can blame asshole retarded Neo-Nazis for that who give western commentators and human rights groups cannon fodder to lambast Russia just like the assholes in the US who dress up in Nazi uniforms like George Lincoln Rockwell.

  5. Uncle Milton

    Neither Laos, Vietnam, (both claim to be “Socialist” but certainly VN has less socialism than the US)
    Thailand, or Burma. are prosperous ….but claiming 32% malnutrition rate for Thailand vis a’ vis 17% rate for Vietnam is simply not believable.

    The average Thai guy is noticeably more muscular than the average VN guy… same with the women.. how show I phrase it.. Thai women have curves.. VN women less so.. although the younger VN women are getting them because they finally have enough food after they ditched “Bac Ho”

    • It’s a fact. There is a lot of malnutrition in the rural areas of Thailand.

      • Uncle Milton

        To Rob:

        It’s a fact. There is a lot of malnutrition in the rural areas of Thailand.

        I’ve been to Thailand 12 times and spent about a total of a year there.. much of the time in rural areas.. I have been to Vietnam 5 times and also gone to rural areas.. I am not buying any statistic that says Thailand has twice as much malnutrition as Vietnam.

        Look at these stats:
        http://en.wikipedia.org/wiki/Demographics_of_Thailand#Infant_mortality_rate

        Infant mortality rate
        18.23 deaths/1,000 live births (2006 est.)
        total: 17.63 deaths/1,000 live births
        male: 18.9 deaths/1,000 live births
        female: 16.3 deaths/1,000 live births (2009 est.)
        [edit]Life expectancy at birth
        total population: 72.83 years
        male: 70.51 years
        female: 75.27 years (2008 est.)

        http://en.wikipedia.org/wiki/Demographics_of_Vietnam#Infant_mortality_rate

        Infant mortality rate
        total: 23.61 deaths/1,000 live births
        male: 24.01 deaths/1,000 live births
        female: 23.19 deaths/1,000 live births
        (2008 est.)
        [edit]Life expectancy at birth
        total population: 71.33 years
        male: 68.52 years
        female: 74.33 years
        (2008 est.)

        As it stands I even doubt these stats even though they basically support my position.

        As I said I do believe the Vietnamese will eventually shoot past the Thais… the Thais are just too kick back… which is fine since they have gotten their population under control. The Vietnamese people are incredibly driven but I attribute this to the Confucianism (similar to the South Koreans..) and not Communism. (Which has been shredded in everything but name…)

        Also as I said saying that Vietnam is (currently) Socialist.. versus Thailand (Neoliberal..) is an incredible misnomer.

  6. Uncle Milton

    To Rob:
    You’ve been shilling for laissez faire capitalism since the day you showed up here, UM.

    I have stated probably ten times now my issues with free flow of capital, labor, and outsourcing. I have also stated that I consider public health as a form of infrastructure. I certainly do take issue with your comments on places you’ve never been and make broad based analogies that I consider erroneous.

    Well why don’t you link the Economist article then..? By the way Singapore and Hong Kong banks didn’t blow up either… (and they have less regulation than US banks…) it doesn’t mean of course their lower regulation save them. Correlation is not causation.

    There are few rules and regulations (for those who are connected…) for Chinese companies.. Labor unions.. nada.. work safety… much less than the US… pollution controls.. egad. Of course every so often someone will screw up and the Chinese government opts to shot them as an example. The ones that get away buy property in Singapore and Vancouver B.C. Overall there are substantially fewer health, safety, and pollution regulations in China than the US. As for the banks… yeah the Chinese followed the Hong Kong model…. very big down payments on property… like 30%. But they do have some crap loans on their books which the Chinese government covers because we are handing them so much cash.

    • See, you’re doing it once again. You’re shilling for unregulated laissez faire capitalism once again, just like you always do. You’re doing it right here in this post.

      What you shill for is unregulated capitalism. That’s why you’re always quoting that shit Heritage Foundation “Economic Freedom Survey.” There are a lot of articles on the Net that say that that survey is a fraud. Garbage in, garbage out. Hong Kong has extensive tariffs for many years to build up their industry, especially, now that they are rich, they junked them and won’t let anyone else use the tariffs that they benefited from, as capitalists so often do. There are horrible slums all over Hong Kong that are basically shantytowns that lack even the most basic services.

      Face it, you have a hardon for capitalism, and you hate socialism. That’s why you refuse to blame neoliberalism for the financial blowup and instead blame some weird fog called “fraud,” as if that mass fraud would have taken place in a properly regulated system! You also do a Milton Friedman (your hero I guess) and blame monetarism for the financial blowup, the same way that Friedman lied and blamed monetarism for the Depression, when really it was his neoclassical model to blame.

      This endless invocation of Singapore and Hong Kong is tiresome. Is their wealth not due to their IQ? Makes about as much sense as anything else, as their model seems to have miserably failed everywhere else.

      BTW, Singapore is a social democracy.

      There’s no article to link. It’s in a recent issue at my brother’s place. He was forced to subscribe for a university course he was taking. They were bemoaning the death of capitalism and said that the new model was the state capitalism (socialism) or China and Russia.

      Yes, Chinese factories for export are unregulated. They have introduced a lot of wonderful capitalist elements into their system. If they start regulating those factories, they will pack and leave someplace else, no? Isn’t that lack of regulation wonderful, Mr. Capitalist? Isn’t it groovy? Isn’t it cool how 600,000 Chinese die from overwork every year, Mr. Capitalism. This is the capitalist mode who praise so much.

  7. Uncle Milton

    To Rob:

    See, you’re doing it once again. You’re shilling for unregulated laissez faire capitalism once again, just like you always do. You’re doing it right here in this post.

    Because I point the lack of pollution and safety laws in China.. ? Did I say I support that…? hell fucking no….? And it is one reason I am against outsourcing to countries that do not follow similar safety and pollution laws. (as I have pointed out before…)

    This endless invocation of Singapore and Hong Kong is tiresome.

    I brought up those two entities because those are roughly the models that China is following. Yeah I know they both had tariffs in their development (so did the US..) as I said I think countries have to adapt to their circumstances. Do you even read (or remember ..) what I write..? I’ve been to Hong Kong … I don’t particularly like it … but where are these shantytowns..? They had them up until the 60s I know but largely they have been torn down. Land is just too expensive to have a bunch of shanty towns like Brazil or Mexico. They do have these large apartment towers and cramped living… basically it’s a bunch of mainland Chinese wanting to make a buck or two. Crime however is very low.

    Yeah I’d say IQ and the incredible drive of the Chinese are what has propelled Singapore and Hong Kong to their current economic status. Perhaps add in a pinch of old style British governance.

  8. Uncle Milton

    To Rob:
    If they start regulating those factories, they will pack and leave someplace else, no?

    The factories are in place.. the equipment is in place..do you think the Chinese can’t replicate the factory.. my guess is they damn sure can. Also dollars to donuts the Chinese government has set things up so that a foreign company can not easily move equipment else where. China does have a long history of peasant rebellions which their leadership is well aware of I am sure.

    Oh yeah now I remember almost all of the factories are partially owned by Chinese partners.
    Not so easy to move stuff out of the country when it’s partially owned by a local.

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  12. André

    “We have had decades of neoliberalism in the 3rd World, and this has been the result. Total failure. Which is why it’s being abandoned lately in Latin America.”

    Is the author freaking serious? I’m Brazilian, I know a little from most South American politics/economics and I can say for sure… neoliberalism is the exception in these countries, it never was the rule.

    In most occasions, politicians use the state’s power (and money) to create social programs to the poor. So far, so good. The problem is when said programs cost a ton of money in taxes, and a substantial amount of the money goes straight to the pocket of the higher-ups. Not to mention that these social programs don’t take people out of poverty in a sustainable way, the poor keep dependent of the government help.

    Brazil (and many Latin America countries) have extremely high taxes (in Brazil, they are around 35% of GDP), and the government makes poor use of such money. Simply put, there is no way in hell this can be called a neoliberal country.

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