Tuesday, February 28, 2012

Is North Korea "stimulating" the world economy?

It seems that there is alarm over alleged counterfeiting by North Korea, which supposedly is creating a number of $100 fake bills that are hard to detect as counterfeits.

I would like to know why anyone in the USA would oppose such a thing, given that North Korea is doing what Paul Krugman in The Return of Depression Economics claimed creates a "free lunch": printing money. Why would it be OK for the Federal Reserve System to do what Krugman recommends -- directly purchasing short-term U.S. Treasury paper in order to fund U.S. Government spending -- but wrong if North Korea essentially does the same thing?

It seems to me that Krugman should be writing a blog post or column praising North Korea for its "stimulus" efforts.

76 comments:

macroman said...

is n Korea using this new money to purchase short term treasury paper? If not, does that make any difference? The closer analogy may be a new Source of gold under the gold standard, like Spain discovering south America. Or digging up bottles filled with money.

macroman said...

is n Korea using this new money to purchase short term treasury paper? If not, does that make any difference? The closer analogy may be a new Source of gold under the gold standard, like Spain discovering south America. Or digging up bottles filled with money.

Zachriel said...

A stimulus trades wealth for increased economic activity, but provides some direct return on the investment (e.g. a bridge). When North Korea counterfeits currency, it steals wealth with no return, and as there is no way to control the amount of counterfeiting, it can represent a continuing threat to that currency.

ekeyra said...

you guys are hilarious. keep it up

William L. Anderson said...

Macroman,

If the opportunity cost of using these "idle" resources is near-zero, then why don't the owners of these resources employ them at a near-zero price?

Jeff said...

It's like the "we owe it to ourselves" thing from a few weeks ago on debt...

but in this case "we print it for ourselves" - but bad if it's NK doing the printing

Woody said...

The housing bubble was no different than counterfeiting. You had a bunch of people driving construction for new homes that they purchased with paper that was worthless.

Major_Freedom said...

Zachriel:

A stimulus trades wealth for increased economic activity, but provides some direct return on the investment (e.g. a bridge). When North Korea counterfeits currency, it steals wealth with no return, and as there is no way to control the amount of counterfeiting, it can represent a continuing threat to that currency.

1. "Stimulus spending" is not an investment. It is consumption spending since the spending is not for the purposes of making subsequent sales. In a division of labor, monetary economy, only private business activity is self-sustaining activity.

2. The Federal Reserve System is doing the exact same thing. The only difference is that when they counterfeit, it's "legal."

macroman:

A closer analogy would be what Bernanke has been doing since 2008.

LK said...

"I would like to know why anyone in the USA would oppose such a thing, given that North Korea is doing what Paul Krugman in The Return of Depression Economics claimed creates a "free lunch": "

(1) Because the power of money creation is the rightful and legal function of the central bank, which, in a democratic country, should be subject to oversight and control by the democratically-elected, legitimate government - not by a fraudulent, unaccountable, hostile, authoritarian foreign government.

Your question is as idiotic as can be.

(2) Moreover, there is a good argument that exports are real burden - the use of these fraudulent $$ to buy US goods from overseas is a real cost.


William L. Anderson@February 28, 2012 8:21 PM

"If the opportunity cost of using these "idle" resources is near-zero, then why don't the owners of these resources employ them at a near-zero price?


Because there is no demand for the final goods and services which would be produced by means of these idle factor inputs.

Zachriel said...

Major_Freedom: "Stimulus spending" is not an investment. It is consumption spending since the spending is not for the purposes of making subsequent sales.

Semantics. If the governments raises bonds to build a bridge or road, then it can lead to increased economic activity or other public good.

William L. Anderson said...

LK: (1) Because the power of money creation is the rightful and legal function of the central bank, which, in a democratic country, should be subject to oversight and control by the democratically-elected, legitimate government - not by a fraudulent, unaccountable, hostile, authoritarian foreign government.

In other words, the means of exchange is solely a product of the State. Of course, what do you mean by "oversight," given that the State is comprised of self-interested politicians and bureaucrats? Do you think that there is some sort of magic that occurs when one goes into government employ?

(Kind of like Krugman claiming that the reason FEMA was ineffective during the Katrina crisis because the people at FEMA did not "believe in government.")

Obama and Bernanke are doing what they think is necessary to get Obama re-elected, period. They are going to try to help their political friends and punish their political enemies. Furthermore, by propping up the banks and other firms (and by throwing hundreds of billions of dollars into the rathole of "green energy"), Obama and Bernanke have kept the necessary economic adjustments from occurring.

That means that we can expect this current downturn to last a long, long time, as malinvestments continue to pile up and draw resources away from their highest-valued uses.

As for North Korea, once one gets away from the aura of a "democratic government," what it is doing is nothing different in principle than what Obama and Bernanke are doing. After all, North Korea is buying "idle resources," correct?

As for the zero opportunity cost, of the price of something reflects its opportunity cost, why are owners of resources charging when the real value of their resources is zero? No one has properly answered that question (although there was one mistaken answer).

Zachriel said...

William L. Anderson: After all, North Korea is buying "idle resources," correct?

You mean stealing idle resources.

When the government borrows and spends locally, it creates economic ripples. Not only do you have the value of the spending, bridges or roads or whatever, but the workers employed also spend money within the economy, the multiplier effect. When North Korea launders and spends U.S. counterfeit currency, it also creates a ripple effect, but the benefit is primarily outside the U.S.

More important, it is a security issue, because there are no controls on counterfeiting, and it will increase until it undermines the currency, or it is stopped.

William L. Anderson said...

How is this stealing? If one accepts the view that governments can print money at will -- which then creates wealth transfers -- then it seems to me that what North Korea is doing is no different than what the Fed is doing. Both are creating huge transfers.

The creation of new money for political purposes is not neutral when the U.S. Government does it, so why would anyone call what North Korea is doing as theft? If you accept one principle, then it seems to me that you have to accept the other one.

Now, I will agree that North Korea is engaging in theft, but I also hold that the government is stealing, too.

LK said...

"In other words, the means of exchange is solely a product of the State."

That isn't even true.

(1) The highest money - base money - in a real world, modern capitalist economy of course is the product of the central bank and Treasury. That is a fact. Period.

The legal and rightful institution to create cash, dollar bills or base money in America is the Treasury or Fed. Period. Any counterfeit money is ruled out by this criterion alone.

(2) Other forms of money in the money pyramid - bank money, bills of exchange, promissory notes - are the product of private US financial institutions and agents. But these are all legal, legitimate, domestic means of producing money too - and their creation is also subject to constraints under the law.

"As for North Korea, once one gets away from the aura of a "democratic government," what it is doing is nothing different in principle than what Obama and Bernanke are doing."

No, it isn't. Even if N. Korea counterfeited the money of an authoritarian nation like China, it would still be illegitimate and illegal. The only legal issuer of Chinese Renminbi is the People's Bank of China. Not N. Korea, not France, not Canada, not the US.

The legal and rightful institution to create physical US cash or dollar bills is the Treasury.

N. Korea is an unaccountable, hostile, authoritarian foreign government.

"How is this stealing? If one accepts the view that governments can print money at will -- which then creates wealth transfers -- then it seems to me that what North Korea is doing is no different than what the Fed is doing."

Rubbish.
(1) The US Treasury is legally empowered to print and mint all paper currency and coins. N. Korea is not. By this alone, N. Korea's action are illegal.

(2) N. Korean purchasing of US goods might increase demand for US goods abroad, yes, but exports are a real burden. The use of these fraudulent $$ to buy US goods from overseas is a real cost. If every nation did this, the US would be overburdened with the massive real costs of shipping real goods overseas on an unsustainable scale. What kind of idiot thinks the government should not act to stop this?

LK said...

And another thing is that you are conflating:

(1) the printing of physical notes by the treasury, with

(2) net creation of new base money by the Fed.
------

(1) is not necessarily the creation of new money at all, and often just involves replacing worn out notes by new ones, maintaining the stock of physical notes as US bills are siphoned off to be used in black markets and dollarised economies in Latin America and other nations, NEVER to return to the US.

Mike Cheel said...

@Zachriel

"More important, it is a security issue, because there are no controls on counterfeiting, and it will increase until it undermines the currency, or it is stopped"

Kinda like what we have now with the US state. The counterfeit and undermine the currency (and savings). Why would this apply to North Korea and not here? Stealing for one purpose and stealing for another is still stealing.

Zachriel said...

Mike Cheel: Kinda like what we have now with the US state.

The U.S. is a democratic society, meaning people, acting through their elected representatives, have the right to control their own currency, not a foreign and hostile power.

Major_Freedom said...

LK:

"I would like to know why anyone in the USA would oppose such a thing, given that North Korea is doing what Paul Krugman in The Return of Depression Economics claimed creates a "free lunch":"

(1) Because the power of money creation is the rightful and legal function of the central bank, which, in a democratic country, should be subject to oversight and control by the democratically-elected, legitimate government - not by a fraudulent, unaccountable, hostile, authoritarian foreign government.

That isn't answering the question. He wasn't talking about politics, he was talking about the economics. The North Koreans are doing exactly what the central bank is doing, illegal or not, and so the economic affects are the same.

If you are against the economics of what they are doing, then you contradict yourself.

(2) Moreover, there is a good argument that exports are real burden - the use of these fraudulent $$ to buy US goods from overseas is a real cost.

And what argument is that?

"If the opportunity cost of using these "idle" resources is near-zero, then why don't the owners of these resources employ them at a near-zero price?"

Because there is no demand for the final goods and services which would be produced by means of these idle factor inputs.

Then they should be liquidated and converted into other inputs that do have a demand for them, which only economic calculation can deliver.

Major_Freedom said...

Zachriel:

"Major_Freedom: "Stimulus spending" is not an investment. It is consumption spending since the spending is not for the purposes of making subsequent sales."

Semantics. If the governments raises bonds to build a bridge or road, then it can lead to increased economic activity or other public good.

It's not semantics. It's what is actually going on.

You are ignoring the opportunity costs of building the bridge. You can't suppose that a government bridge "increases economic activity" unless you place this bridge building in a context of economic calculation based on free exchange of private property. But because the state uses force to prevent people from spending and investing their money they way THEY see fit, according to their personal needs, values, and plans, it means the bridge is an ipso facto net loss, despite the fact that it is used afterwords, the same way that robbing someone of their money on the street is a net loss to them, even if the robber goes to the store and buys something he believes the victim would accept to cut his losses.

You'd focus on the good from the store that the victim gets, and say "Look! He is using that good, so his productivity is being boosted!"

STOP IGNORING OPPORTUNITY COSTS

Major_Freedom said...

Zachriel:

"William L. Anderson: After all, North Korea is buying "idle resources," correct?"

You mean stealing idle resources.

No, it's not stealing, because the North Koreans who had the counterfeit treasuries had the support of some friends of theirs. They voted who would go, and the majority voted that those who went, went.

When the government borrows and spends locally, it creates economic ripples.

So does counterfeit money from a central bank, or North Koreans.

Not only do you have the value of the spending, bridges or roads or whatever, but the workers employed also spend money within the economy, the multiplier effect.

You are ignoring opportunity costs once again. You are only focusing on what is seen, and ignoring what was made impossible.

When North Korea launders and spends U.S. counterfeit currency, it also creates a ripple effect, but the benefit is primarily outside the U.S.

Oh, so only Americans are allowed to exploit other Americans through creating dollars from nothing and spending it on themselves and their friends? Foreigners can't exploit Americans through creating dollars from nothing and spending it on themselves and their friends?

What if the Fed creates new money, and the money goes to Americans, but then they give the money to foreigners, who then use it in the US? Is that good exploitation or bad exploitation of the Americans who must pay higher prices?

What if the Fed prints money and the money immediately goes abroad (if the Fed buys treasuries owned by foreigners). Is that "bad" inflation because no American got the money first?

It's only "good" inflation if an American gets the new money first from the central bank counterfeiters, but after that, it doesn't matter who gets it, even if from a poor American's perspective, whose income is fixed, he is being exploited by paying higher prices regardless of whether the initial spender is American or a foreigner!

More important, it is a security issue, because there are no controls on counterfeiting, and it will increase until it undermines the currency, or it is stopped.

There are no controls on the Fed either.

Zachriel said...

Major_Freedom: It's not semantics. It's what is actually going on.

Of course it's an investment. The capital expenditure can provide long term economic growth. But no matter.

Major_Freedom: STOP IGNORING OPPORTUNITY COSTS

Yelling doesn't make your argument stronger. We are not ignoring opportunity costs. There is a cost involved. Assuming the money is spent directly from taxes, then that money could have been spent by consumers and businesses. However, as noted above, businesses are usually limited in the scope and time line of vast projects. There's an opportunity involved, as well as an opportunity cost.

Mike Cheel said...

@Zachriel

"The U.S. is a democratic society, meaning people, acting through their elected representatives, have the right to control their own currency, not a foreign and hostile power."

That is just unrealistic statist talk. This 'democracy' you speak of is a sham. The fed does whatever it wants and the people don't own anything.

You're killing me with this stuff.

Major_Freedom said...

LK:

"In other words, the means of exchange is solely a product of the State."

That isn't even true.

But you just said that "Because the power of money creation is the rightful and legal function of the central bank". The central bank is a state institution.

You just contradicted yourself, yet again, like it's a habit of yours.

(1) The highest money - base money - in a real world, modern capitalist economy of course is the product of the central bank and Treasury. That is a fact. Period.

Money isn't just base money.

The legal and rightful institution to create cash, dollar bills or base money in America is the Treasury or Fed. Period. Any counterfeit money is ruled out by this criterion alone.

So....the means of exchange is solely a product of the state!

(2) Other forms of money in the money pyramid - bank money, bills of exchange, promissory notes - are the product of private US financial institutions and agents. But these are all legal, legitimate, domestic means of producing money too - and their creation is also subject to constraints under the law.

So the state has granted some special interests in the country the privilege of creating new dollars and they will be enforced as legal tender by the state.

"As for North Korea, once one gets away from the aura of a "democratic government," what it is doing is nothing different in principle than what Obama and Bernanke are doing."

No, it isn't.

Yes, it is. Economically, they are identical. Economically, both are creating new US bills from nothing.

Even if N. Korea counterfeited the money of an authoritarian nation like China, it would still be illegitimate and illegal.

Irrelevant red herring. Anderson is comparing what the North Koreans are doing, economically, versus what Obama and Bernanke are doing, economically. They are equal. The only difference is that one is merely labelled legal and the other illegal.

Remove that fluff and the result is that the North Koreans are doing the same thing.

The only legal issuer of Chinese Renminbi is the People's Bank of China. Not N. Korea, not France, not Canada, not the US.

You're not empowered by repeating and parroting existing positive state law. You are not intimidating anyone, you are not convincing anyone, your risible, contemptible dogmatic worship of the state doesn't work here.

The legal and rightful institution to create physical US cash or dollar bills is the Treasury.

Rightful? You believe in natural state rights? LOL

N. Korea is an unaccountable, hostile, authoritarian foreign government.

From your point of view. From peaceful free market advocate's point of view, the US state is an unaccountable, hostile, authoritarian, foreign entity to a civilized private property rights society.

"How is this stealing? If one accepts the view that governments can print money at will -- which then creates wealth transfers -- then it seems to me that what North Korea is doing is no different than what the Fed is doing."

Major_Freedom said...

LK:


(1) The US Treasury is legally empowered to print and mint all paper currency and coins. N. Korea is not. By this alone, N. Korea's action are illegal.

You are not addressing the point Anderson is making. He knows what the North Koreans are doing is considered illegal by the US state. That is trivial. His point is that they are doing the same exact thing as those in the state. Calling one legal and the other illegal doesn't change this fact.

(2) N. Korean purchasing of US goods might increase demand for US goods abroad, yes, but exports are a real burden.

LOL, you stupid moron.

If foreign economic agents print money and buy goods to benefit themselves, such that no American benefits from those goods, then that is the same damn thing in principle as domestic economic agents printing money and buying goods to benefit themselves, such that no OTHER Americans benefit from those goods.

When the state prints and spends money to buy goods, it is impossible for all Americans to benefit from those same goods. I did not benefit from the goods the state purchased in order to "stimulate demand."

There is no difference from an exploited person's perspective whether a foreign economic agent printed money and bought US goods for themselves, or if a domestic US economic agent printed money and bought US goods for themselves.

Your worldview is so friggin ridiculous, that you will contradict yourself in the highest degree. You believe that if a domestic economic agent prints money and buys goods for himself, and this domestic agent is called a central bank, or the Treasury, then THEIR spending somehow "benefits" all other domestic economic agents because it "boosts aggregate demand." When the context is the domestic economy, then domestic counterfeiters, who are viewed as "legal", are allegedly benefiting other domestic economic agents by giving them more money to spend, to increase "traction."

On the one hand, you believe that people receiving domestically created domestic money are supposedly being benefited by virtue of receiving the money.

On the other hand, you believe that people receiving foreign created domestic money, are not being benefited.

What about a foreign agent who is physically situated in your domestic country, who then prints money and then buys domestic goods? Would that be a "benefit" to all other domestic economic agents? No? What if there are "idle resources"? Then would it be an ECONOMIC benefit?

Here is where LK's head explodes and inside all we see is a tiny shriveled up piece of poop that has the word "mercantilist nationalist fascist" written on it.

Major_Freedom said...

LK:

The use of these fraudulent $$ to buy US goods from overseas is a real cost.

Why? They are sending MORE US money into the country! US "demand" is being "stimulated." That means more employment and less idle resources in a depression, right?

You're ARBITRARILY setting the border where costs play a role, to be the US border. What about state to state borders? That incurs costs to ship goods from state to state. Why aren't "exports" from Texas that are sold to someone in New York who printed money, why isn't that a "burden" to the people of Texas? There are costs associated with exporting goods from Texas to New York.

Or what about someone printing US money in New York and buying goods and importing goods from Hawaii, versus someone from Mexico printing US money and buying goods and importing goods from California?

It's cheaper to send goods from Mexico to California, than it is to send goods from Hawaii to New York.

Hawaii is "within US territory." Is your head going to explode again and are you going to make the absurd claim that because goods exported from Hawaii to New York are "domestic" goods, that there is no "export burden of costs", but for the goods exported from California to Mexico are "non-domestic" goods, and hence there is a "export burden of costs"?

What does it matter to those in, say, Nevada, if they see printing of money in New York and goods going from Hawaii to New York, compared to if they see printing of money in Mexico and goods going from California to Mexico?

In both cases, there are fewer goods available to those in Nevada, and more money in the US, and thus Nevadans have a smaller purchasing power. It doesn't matter if the counterfeiters are in New York or in Mexico. Economically speaking, Nevadans are poorer, they have depreciated money, and their standard of living falls.

The same is true for EVERYONE else who not the counterfeiters and who have to work and produce in order to get money to buy goods.

Your "exports" excuse is the mother of all no true scotsman fallacies. It is pathetic, contemptible muddleheaded nonsense that truly exposes the downright evil of your worldview.

You are OK with people getting exploited by counterfeiters, as long as the counterfeiters are domestic citizens, and as long as their counterfeiting is "legal" in the eyes of the very people who own the counterfeiting press.

Major_Freedom said...

LK:

If every nation did this, the US would be overburdened with the massive real costs of shipping real goods overseas on an unsustainable scale.

What's this? REAL COSTS? You're a Keynesian, you don't accept real costs. You ignore them. You are contradicting yourself yet again.

You are ignoring idle resources and unemployment.

The foreign counterfeiters are sending back lots of cash. Those who receive the cash can then buy whatever idle factors and labor they need to sustain the exporting. Domestic exporters can purchase those factors at low prices, using the counterfeited money they are getting from the foreign counterfeiters.

Major_Freedom said...

LK:

What kind of idiot thinks the government should not act to stop this?

YOU, chump. YOU believe that not only should the government not stop this, you want the government to DO THE EXACT SAME THING THEMSELVES. You want the state to monopolize the counterfeiting so that domestic economic agents are exploited by the state. You want people to be sacrificed for the sake of the state.

Your pretention of clouding the issue with "democracy", doesn't change the economics of what is taking place.

There is absolutely no economic difference between a foreign agent printing money and buying goods for themselves, and a domestic agent printing money and buying goods for themselves.

The fact that there would be a clear problem of many foreigners printing money and buying domestic goods, is a result of the fact that the practise itself is destructive, and as such will eventually overcome the ability of people to withstand the destruction.

With the state printing money and buying goods, at a relatively slow pace, the exploitation is harder to detect, the costs are harder to discern. But with a lot of it, the exploitation and costs are much easier to discern.

It's the same thing with murder. With a relatively low rate of murder, the human population can withstand it and grow. But with enough murder, it will overcome. This is the same PRINCIPLE as what is happening with inflation from the state.

In your silly idiotic worldview, regular domestic economic agents are not being exploited as long as the counterfeiters are domestic "citizens", and as long as the counterfeiters are in the state.

You are in favor of citizens exploiting other citizens via counterfeiting, but you are not in favor of foreigners exploiting other foreigners via counterfeiting.

Your pathetic "costs of exports" red herring is easily seen as a desperate excuse to mask the inner contradictions of your beliefs.

Major_Freedom said...

Zachriel:

"Mike Cheel: Kinda like what we have now with the US state."

The U.S. is a democratic society, meaning people, acting through their elected representatives, have the right to control their own currency, not a foreign and hostile power.

Which people? Certainly not the minority. The majority has the right to exploit the minority in a monetary regime that the majority's hostile "representatives" control and enforce by law on the minority.

Instead of a foreign hostile power, it's a domestic hostile power.

For the victims, those in the minority, there is no difference, and for many in the majority who are misled, there is no difference to them either.

Major_Freedom said...

LK:

And another thing is that you are conflating

You haven't shown a first set of things that were being "conflated", how can you say "another" as if it exists?

(1) the printing of physical notes by the treasury, with

(2) net creation of new base money by the Fed.

Both are money. Both are creations of the state. Both are legal tender. Economically speaking in terms of money, they are the same.

(1) is not necessarily the creation of new money at all, and often just involves replacing worn out notes by new ones, maintaining the stock of physical notes as US bills are siphoned off to be used in black markets and dollarised economies in Latin America and other nations, NEVER to return to the US.

Nobody said it was "necessarily" a creation of new money. The fact is that new money IS actually being created in this way, and that is what is being addressed, not this silly red herring of note replacement.

Major_Freedom said...

Jeff:

It's like the "we owe it to ourselves" thing from a few weeks ago on debt...

but in this case "we print it for ourselves" - but bad if it's NK doing the printing

Exactly. You understand what's going on.

It's just mercantilist, nationalist exploitative nonsense masquerading as "just", "rightful", "economically beneficial" benevolence because the people doing it have a certain label of "citizen" and "legalized."

It's no different than ancient tribe leaders being "different" regarding human rights, by wearing feathers and colorful animal skins that nobody else can wear, and being called a name that nobody else can be called.

Apparently Keynesians and statists alike haven't mentally evolved much beyond believing in a might makes right, knuckle-dragging cult of personality.

Major_Freedom said...

Zachriel:

"Mike Cheel: Kinda like what we have now with the US state. The counterfeit and undermine the currency (and savings). Why would this apply to North Korea and not here? Stealing for one purpose and stealing for another is still stealing."

The U.S. is a democratic society, meaning people, acting through their elected representatives, have the right to control their own currency, not a foreign and hostile power.

In other words, Zachriel just admitted that he believes stealing from innocent people is OK, as long as the thieves receive the support from a majority of the people in the area affected.

In other words, Zachriel's core belief would make slavery authorized and justified, as long as the slave masters have the support of the majority of the people in the area affected.

There are no individual rights to be found in his warped, collectivist farce that he calls "society."

ekeyra said...

So basically the difference between counterfeiting and "stimulus" is geography?

Major_Freedom said...

Zachriel:

"Major_Freedom: It's not semantics. It's what is actually going on."

Of course it's an investment. The capital expenditure can provide long term economic growth. But no matter.

No, it's not an investment. An investment is an expenditure of money for the purposes of making subsequent sales. It is self-sustaining economic activity. When the purchase is made, there are means there to recoup lost expenditure.

With government spending, this is not present. The expenditures they make are not self-sustaining. They are not made for the purpose of making subsequent sales. Once the money is spent, that's it, it's gone forever. To replace or repair what was constructed, a whole new fresh set of external funds is needed. In the government's case, that means the taxpayers and the printing press.

The expenditures the state makes are also not "capital" expenditures. What they finance is not "capital." They are consumer goods. It doesn't matter how big they are or how complex. They are consumer goods because they are not self-sustaining expenditures.

You fallaciously claim that these projects "provide long term economic growth." You are again ignoring opportunity costs. Do you have any idea what that means? I am getting the impression that you believe they're just words, talking points. Opportunity costs means you cannot only focus on what's "there". The art of thinking like an economist is also to take into account the fact that what is there is made possible only by making those resources not go elsewhere.

In a context of choosing among which competing projects using the same resources is most valuable, in a division of labor, monetary society, the projects that actually progress the economy and increase net value and productivity, rather than wasting resources and reducing productivity from where it otherwise would have been, is by individual economic calculation based on a totally unhampered prices, constrained by profit and loss. This is the only way that one can know whether a project is contributing to long term growth, or wasting resources.

This is the case even if the wasteful resources are being used.

Major_Freedom said...

Zachriel:

"Major_Freedom: STOP IGNORING OPPORTUNITY COSTS"

Yelling doesn't make your argument stronger.

DENYING OPPORTUNITY COSTS DOESN'T MAKE YOUR CLAIMS ANYTHING BUT TOTALLY AND COMPLETELY FALLACIOUS.

We are not ignoring opportunity costs.

Yes, you are. You are ignoring them. You MUST ignore them in order to even make your silly claim that government projects contribute to long term growth.

There is a cost involved. Assuming the money is spent directly from taxes, then that money could have been spent by consumers and businesses. However, as noted above, businesses are usually limited in the scope and time line of vast projects.

Part of efficient uses of resources, part of not wasting resources, is to NOT invest in certain projects. You realize that don't you? Not all possible projects should be financed. Many potential projects will be a waste of resources.

I don't know a priori which voluntary projects based on individual property rights will be a waste and which will be productive. That is up to individual consumers and investors making their choices in a context of individual economic calculation and individual preferences.

But I do know a priori which projects qua projects will be a waste and which will be productive. A priori I know that resources are wasted if thieves finance it. A priori I don't know that resources are wasted if non-thieves finance it.

There's an opportunity involved, as well as an opportunity cost.

You don't know what those opportunity costs are unless you observe what individuals freely sacrifice in order to go along with their chosen projects and plans.

You can't say government projects provide long term growth. You can't say that any more than you can say a thief provides long term growth, despite the possible fact that he uses his money to finance the construction of things that a portion of the population end up wanting ex post because it's there anyway, despite the possible fact that he has the "support" of "others" regarding his theft.

Mike M said...

LK said: “The legal and rightful institution to create physical US cash or dollar bills is the Treasury.”

So what, if is it done without proper principle or discipline it is still counterfeiting. It’s a distinction without a difference.
Your argument (or feeble attempt) reminds me of Richard Nixon during the Frost interview. “If the President of the United States does it, it’s not illegal”

Seriously, one has to wonder if you ever read what you write.

Zachriel said...

Mike Cheel: This 'democracy' you speak of is a sham. The fed does whatever it wants and the people don't own anything.

Apparently, there will be an election in the U.S. this year, which will decide not only the chief executive of the government, but most of the legislature.

Yes, it's the worst of all systems ...

Major_Freedom: Certainly not the minority.

In the case of anarchists, a very tiny minority.

Major_Freedom: In other words, Zachriel's core belief would make slavery authorized and justified, as long as the slave masters have the support of the majority of the people in the area affected. There are no individual rights to be found in his warped, collectivist farce that he calls "society."

Do you really think people are impressed by your beating up straw men? We have answered this distortion a number of times. Remember: It has to do with the distribution of power at all levels of society, including corporations, an independent judiciary, local government, taxation with representation, political parties, clubs, individual liberties, right to property, markets, free and open elections, etc.

Major_Freedom: You fallaciously claim that these projects "provide long term economic growth."

Sure they can. For instance, a bridge may connect two urban centers and increase economic activity.

Major_Freedom: You are again ignoring opportunity costs.

No. We specifically discussed that above. You lose due to short term opportunity costs and gain by taking advantage of a long term opportunity.

Major_Freedom: Not all possible projects should be financed. Many potential projects will be a waste of resources.

Of course. And that's why in modern democracies, those decisions are made via a number of interfacing mechanisms, including political, economic and cultural. It's a form of distributed intelligence, just as are markets.

Zachriel said...

ekeyra: So basically the difference between counterfeiting and "stimulus" is geography?

That's like saying the basic difference between your TV in your house or in a thief's house is geography.

farm land investment said...

I wonder why Krugman doesn't just drop the keynsian crap and go all the way to MMT (Modern Monetary Thoery I think its called). Although I am not in finance, I find myself irresistibly drawn to the whole subject and have just recently found out that there is this developing movement of MMT believers. As I understand MMT, if a Government has its own currency and is a monopoly supplier of it, then they can never go bankrupt and can print as much of it as they want. It seems the next logical step is that the Treasury issues debt, the Fed buys it, and the whole process continues indefinitely. That seems like it would be a dream come true for Krugman! Would be interesting to see a really good piece explaining what the heck MMT is, and if its just bollocks or is a legitimate theory. To me it sounds quite mad, but it would be good to see an analysis of it from a non-MMT'er.

JG said...

Major Freedom -

"You can't say government projects provide long term growth."

You're right, the Eisenhower inter-states, the Erie Canal and the Internet haven't contributed to any growth at all. They were just a series of dead-ends. Better to have left that money in the taxpayers' pockets where it could have been invested in something productive...like gold!

macroman said...

A closer analogy [to the N Koreaan counterfeiting] would be what Bernanke has been doing since 2008.
Except that the money Bernanke created is mainly sitting idle in bank reserves, not being spent or invested. Are the North Koreans merely stockpiling these $100 dollar bills?

macroman said...

Last time I looked, the Fed held less than 7% of outstanding Treasury bonds. In other words the US Treasury is mainly borrowing from the market at close to zero interest rates. Most of the discussion here seems to assume the entire debt has been "monetarised" and that inflation is rampant. This is not 1975 - this, according to Krugman, is the "liquidity trap" which does make a difference.

macroman said...

Prof Anderson, My answer

Some of the owners of idle labor resources (i.e. workers) are getting nothing, because no one wants to employ them. They could produce something rather than nothing but it requires that someone have the courage to take a risk and employ these idle resources. Owners of cement and steel may have a similar problem; they usually wait for entrepreneurs to borrow and buy from them but that isn’t happening.
The owners of savings in the form of money are lending to the US Treasury at close to zero interest; there is little private competition for these funds. The US government can spend on public works. The forgone opportunity, when those idle workers now get what you probably call a “fake job”, is the things they could have produced if some private entrepreneur had employed them. But everyone is in the grip of a self-fulfilling panic and fear, so those other things don’t exist.
Therefore the government can put those otherwise idle resources to the best use possible (though maybe not the best possible use in some other place at some other part of the business cycle). There is, in the present circumstances, no “crowding out”, there is no great “lost opportunity” in using those resources. We can get better roads and bridges or beaches or school buildings or national parks; things that everyone can enjoy for a long time. And the government won’t have to build so much later, when the opportunity cost is higher (after the recovery).

ekeyra said...

Zach,

"That's like saying the basic difference between your TV in your house or in a thief's house is geography."

You still arent addressing what makes north korea the theif and the federal government the rightful owners of the dollars they choose to print? The only reason to believe you will receive a higher benefit with the dollars spent by the federal government is its geographical location to you relative to the north korean one? Isnt that what justifies the fed engaging in the same action domestically?

Or is the federal government magical whereas the north korean government is not?

You make my brain sad.

burkll13 said...

Zach:
"We are not ignoring opportunity costs."


MM:
"There is, in the present circumstances, no “crowding out”, there is no great “lost opportunity” in using those resources."

in consideration of Zach pluralizing his opinion, im going to consider this hypocrisy

Zachriel said...

burkll13: in consideration of Zach pluralizing his opinion,

Our use of nosism does not encompass other commenters on this forum.

burkll13: im going to consider this hypocrisy

What you mean is inconsistency. However, it is not inconsistent. The opportunity cost depends on other uses to which money can be put. When there is a sharp economic downturn, then there are idle resources, and opportunity costs are lower. Hence, it often makes more sense to make long term investments in public infrastructure when there is slack in the economy.

Zachriel said...

ekeyra: You still arent addressing what makes north korea the theif and the federal government the rightful owners of the dollars they choose to print?

Thought you were talking economics. Certainly, the U.S. has the right to issue currency in their name. Even North Korea knows that counterfeiting is illegal under international law. That's why they do it surreptitiously.

ekeyra: The only reason to believe you will receive a higher benefit with the dollars spent by the federal government is its geographical location to you relative to the north korean one?

Yes, building a bridge in the U.S. has a greater benefit to the U.S. than building a new palace for the leader of North Korea. In any case, the U.S. has the right to control the spigot that regulates their money supply.

ekeyra said...

"Yes, building a bridge in the U.S. has a greater benefit to the U.S. than building a new palace for the leader of North Korea."

But how can you know that?

Major_Freedom said...

Zachriel:

"Major_Freedom: Certainly not the minority."

In the case of anarchists, a very tiny minority.

Yes, individuals become fodder and without rights or freedoms when they are vastly outnumbered. Just like slaves in the 18th to 19th centuries. They were a tiny minority. Therefore they justly deserved it. After all, the vast majority of white people shouldn't have been held back by the whining and complaining of a tiny minority. The standard of value for you collectivist morons is the state, not the individual, so vastly outnumbered individuals that go against the state, are ipso facto wrong. They should shut up and take it.

Oh, and I was talking about the minority in a democracy. That's 49% in principle. Hardly a "tiny" minority, not that it even matters.

"Major_Freedom: In other words, Zachriel's core belief would make slavery authorized and justified, as long as the slave masters have the support of the majority of the people in the area affected. There are no individual rights to be found in his warped, collectivist farce that he calls "society."

Do you really think people are impressed by your beating up straw men?

It's your "logic", not mine. It's not a straw man. According to your core democratic beliefs, you would be for slavery if the majority voted for it.

I don't care if you contradict yourself and say that the majority should be overruled by the minority in cases YOU believe are justified. You are not being consistent.

We have answered this distortion a number of times.

You still haven't answered who else is there with you that would justify such butchering of the English language in saying "we".

And no, you never answered it. You made a fool of yourself trying to square the contradiction, but that doesn't mean your "answer" is in any way valid.

Major_Freedom said...

Zachriel:

Remember: It has to do with the distribution of power at all levels of society, including corporations, an independent judiciary, local government, taxation with representation, political parties, clubs, individual liberties, right to property, markets, free and open elections, etc.

What has to do with all this?

At any rate, you're conflating the ability to persuade with the ability to use force when you speak of "power" without distinguishing between the two.

"Major_Freedom: You fallaciously claim that these projects "provide long term economic growth."

Sure they can.

Merely repeating the fallacy won't make it true.

For instance, a bridge may connect two urban centers and increase economic activity.

You are again ignoring opportunity costs. Those resources were more highly needed elsewhere, where it would have boosted productivity that people actually wanted by way of their VOLUNTARY purchasing patterns, and as such, it would have boosted productivity by more in the absolute sense.

The fact that the state robbed the people and deprived them of their earnings and ability to spend, the bridge, despite appearing as assisting in productivity, represents a net loss, the same way it would be a net loss to you if I robbed you, then bought something for you that you value less than what you would have bought yourself.

Again, I will say this again over and over and over until it enters your dimwitted, bad memory mushy head:

STOP IGNORING THE LAW OF OPPORTUNITY COSTS

"Major_Freedom: You are again ignoring opportunity costs."

No.

YES. YES YOU ARE. You specifically pointed to the example of a bridge, you specifically asserted, without mentioning opportunity costs anywhere, that the bridge "increased productivity." No, it didn't, because if you took into account opportunity costs, you would be able to understand that the project is a net loss, despite it being used.

Major_Freedom said...

Zachriel:


Zachriel:

We specifically discussed that above.

You did not integrate it into your judgment of the bridge.

Merely conceding it exists, but then never integrating it into your actual claims, is the equivalent of ignoring it.

You completely ignored it again. Nowhere did you say "The opportunity costs of the bridge are less than the value of the bridge itself, and here are my reasons..."

You lose due to short term opportunity costs and gain by taking advantage of a long term opportunity.

Now you're ignoring the long term opportunity costs. Merely admitting that opportunity costs are present, but only in the short term, doesn't mean there are net gains in the long term. For you would be ignoring long term opportunity costs!

STOP IGNORING OPPORTUNITY COSTS, BOTH IN THE SHORT TERM, AND ANY OTHER TIME FRAME.

You are so dense.

All of us right now are deprived of what could have existed if capitalism were practised since 0 AD. All the force and violence from Kings, tribal warlords, despots, and roaming armies, since 0 AD, had long term opportunity costs that are still applicable today, and will be forever more.

States that destroy voluntary wealth formation and replace it with less valued crap are bringing about a state of affairs that will have repercussions forever into the future. The lost opportunities are gone forever.

Major_Freedom said...

Zachriel:


"Major_Freedom: Not all possible projects should be financed. Many potential projects will be a waste of resources."

Of course.

HOW DO YOU KNOW WHICH POTENTIAL PROJECTS SHOULD BE FINANCED RATHER THAN NOT FINANCED?

And that's why in modern democracies, those decisions are made via a number of interfacing mechanisms, including political, economic and cultural. It's a form of distributed intelligence, just as are markets

Oh please. Stop trying to legitimize violence as just another factor on moral par with free trade. You're making a total fool of yourself.

Distributed intelligence is not physical force. Physical force is literally the antithesis of intelligence. Physical force deprives people of the ability to put into effect actions based on intelligence.

Your crude attempt to sound deep and profound is amusing.

Major_Freedom said...

ekeyra:

"Yes, building a bridge in the U.S. has a greater benefit to the U.S. than building a new palace for the leader of North Korea."

But how can you know that?

Because the state hath decreed it through its use of the holy hand grenade of justified initiations of violence against innocent individuals, who are served up as sacrifice for the ends of "society", i.e. the state.

ekeyra said...

Heres one for you. What is the economic impact of say, the federal government handing over 1.6 billion a year in military aid to egypt?

I mean it seems like a no brainer, the federal government did it so it must be positive right? But they gave that money to a country half a world away so how could it benefit the people they took it from?

Would you recommend immediate suspension of all foreign aid?

Zachriel said...

Major_Freedom: I will never feel diminished even if a million people died.

Major_Freedom: Yes, individuals become fodder and without rights or freedoms when they are vastly outnumbered. Just like slaves in the 18th to 19th centuries. They were a tiny minority. Therefore they justly deserved it.

Why should anyone care about your perverse feelings of persecution?

Major_Freedom: Oh, and I was talking about the minority in a democracy. That's 49% in principle. Hardly a "tiny" minority, not that it even matters.

In modern democracies, the vast majority of people assent to abide by the results of elections.

Zachriel: Remember: It has to do with the distribution of power at all levels of society, including corporations, an independent judiciary, local government, taxation with representation, political parties, clubs, individual liberties, right to property, markets, free and open elections, etc.

Major_Freedom: What has to do with all this?

It's not enough to have a majority rule to form a modern democratic society. Rather, modern democracies include institutions working at all levels of society in a complex that is more than the sum of its parts. It's an imperfect distribution and dynamic balance of power.

And yes, it's the worst of all systems ...

ekeyra: What is the economic impact of say, the federal government handing over 1.6 billion a year in military aid to egypt?

As they are spending it on American made military hardware, there is obviously some economic return. The reason for the aid, though, is because it is thought to increase political stability in the region, and that is thought to have political benefits for the United States.

ekeyra said...

"The reason for the aid, though, is because it is thought to increase political stability in the region, and that is thought to have political benefits for the United States."

Why cant you say the same exact thing about north korea being able to print dollars and buy a new palace for dear leader?

Suppose thats keeps them from aggressive military action?

"As they are spending it on American made military hardware, there is obviously some economic return."

1 Read this:

http://mises.org/daily/5925/Military-Spending-and-Bastiats-Unseen

2 shut up.

Zachriel said...

ekeyra: Why cant you say the same exact thing about north korea being able to print dollars and buy a new palace for dear leader?

Because allowing them to counterfeit currency is not linked in any reasonable way to a political or economic advantage to the U.S.

ekeyra: http://mises.org/daily/5925/Military-Spending-and-Bastiats-Unseen

Yes, having a standing military is largely a net drain on the economy.

ekeyra said...

"Because allowing them to counterfeit currency is not linked in any reasonable way to a political or economic advantage to the U.S."

If military expenditures are a net drain on the economy then how can giving egypt billions in military aid somehow be a net gain because they are spending it on military hardware?

Major_Freedom said...

"Major_Freedom: I will never feel diminished even if a million people died."

"Major_Freedom: Yes, individuals become fodder and without rights or freedoms when they are vastly outnumbered. Just like slaves in the 18th to 19th centuries. They were a tiny minority. Therefore they justly deserved it."

Why should anyone care about your perverse feelings of persecution?

LOL, they aren't "perverse". They are the antithesis of perversity. The fact that you believe they are perverse is a result of your perverse morality clashing with it.

And they aren't even feelings. They are propositions that contain feelings.

"Major_Freedom: Oh, and I was talking about the minority in a democracy. That's 49% in principle. Hardly a "tiny" minority, not that it even matters."

In modern democracies, the vast majority of people assent to abide by the results of elections."

Because they are threatened with violence if they don't. Only a tiny minority have the courage to PHYSICALLY stand up to the aggressors. You fallaciously interpret lack of revolution as consent. That is false. You can only observe consent if the individual is totally unhampered and free from all aggression if they choose to stop dealing with certain people.

"Major_Freedom: What has to do with all this?"

It's not enough to have a majority rule to form a modern democratic society.

It's not even a justified minimum requirement that ought to be attained. Majority rule voting by non-property owners is ipso facto immoral.

The fact that majority rule alone doesn't work is just another way of saying democracy is not an ideal.

Rather, modern democracies include institutions working at all levels of society in a complex that is more than the sum of its parts. It's an imperfect distribution and dynamic balance of power.

False. Those who plunder, steal, and coerce, i.e. the state, are not "working." They are destroying. Yes, their limbs are moving, a tiny minority of them are even sweating, but that doesn't mean they're "working."

What you are trying to say is that democracy is immoral, and must be constrained by at least some inviolable individual rights, lest the true nature of democracy be revealed.

"And yes, it's the worst of all systems ..."

And yet there you are supporting it.

"ekeyra: What is the economic impact of say, the federal government handing over 1.6 billion a year in military aid to egypt?"

As they are spending it on American made military hardware, there is obviously some economic return.

Only to those making those weapons, the money/purchasing power of which is coercively extracted from taxpayers/savers.

It's not a net positive return. It's a net negative.

The reason for the aid, though, is because it is thought to increase political stability in the region, and that is thought to have political benefits for the United States.

Oil continuing to be sold in dollars as long as a "US friendly" dictator remains in power.

Major_Freedom said...

Zachriel:

"ekeyra: Why cant you say the same exact thing about north korea being able to print dollars and buy a new palace for dear leader? "

Because allowing them to counterfeit currency is not linked in any reasonable way to a political or economic advantage to the U.S.

Who in the US? Clearly those who receive the counterfeit money are benefiting, as long as they can get rid of it before the counterfeiting scheme collapses, the same way regular Americans who receive the new counterfeited money from the central banking system benefit, as long as they can get rid of it before the central bank counterfeiting scheme collapses.

It's the exact same process, economically speaking.

You're just completely brainwashed by nationalistic garbage, and believe that destructive action turns into positive beneficial action if the domestic state does it.

Zachriel said...

ekeyra: If military expenditures are a net drain on the economy then how can giving egypt billions in military aid somehow be a net gain because they are spending it on military hardware?

Because while it may be a net drain on the economy, it may provide other benefits. We mentioned this already.

Major_Freedom: They are propositions that contain feelings.

You didn't answer the question. If you never feel diminished even if a million people die, is there any reason why others should care one iota about your (perceived) persecution?

Major_Freedom: because they are threatened with violence if they don't.

When you argue against obvious points, it undermines your credibility. Everyone knows that the vast majority of people accept the results of fair democratic elections. They don't always like the results, but know there will be other elections. Here example from history: "Let there be no doubt, while I strongly disagree with the court's decision, I accept it. I accept the finality of this outcome which will be ratified next Monday in the Electoral College. And tonight, for the sake of our unity of the people and the strength of our democracy, I offer my concession."

Major_Freedom: The fact that majority rule alone doesn't work is just another way of saying democracy is not an ideal.

Heh. Not just "not an ideal", but the worst of all systems...

Major_Freedom: What you are trying to say is that democracy is immoral, and must be constrained by at least some inviolable individual rights, lest the true nature of democracy be revealed.

Heavens! Inviolable? Democracy is not near that fair or just. People have to continually fight for their rights. It really is the worst of all systems...

Major_Freedom: It's not a net positive return. It's a net negative.

Economically. It can be argued there are political benefits, which would depend on the particulars. Most historians would say the allied investment in WWII was necessary.

Major_Freedom: You're just completely brainwashed ...

Always with the hyperbole, even though it is clear you are on the extreme range of views concerning government. It doesn't mean you're wrong, but when you start with everyone is brainwashed but you and a select few, well, it doesn't add to your argument.

Major_Freedom: ...by nationalistic garbage, and believe that destructive action turns into positive beneficial action if the domestic state does it.

Monetary inflation can certainly be destructive, but that is a decision for each country to make. Counterfeiting is a fraud.

macroman said...

Another obvious difference between the N Koreans and the FED is that the FED uses some if not most of the new money to buy some part of US treasury debt, the interest on which goes back to the treasury. If n Korea buys US debt with the new money then N Korea will get the income stream from the US treasury. Quite a difference to the USA I would suggest.

ekeyra said...

"Because while it may be a net drain on the economy, it may provide other benefits. We mentioned this already."

First you said the economic benefit of giving egypt billions of dollars was that they were spending it on domestically produced military hardware.

You then conceded that military spending is a net loss. A negative economic impact.

"Yes, having a standing military is largely a net drain on the economy." - You

Your saying that giving egypt billions of dollars that american taxpayers were, according to you and macro, politely asked to hand over, to allow egypt to purchase weapons that taxpayers have already subsidized to the tune of billions of dollars, reaps benefits that are so apparent that you dont feel the need to even specify them such that the billions upon billions of dollars that taxpayers have already sunk into this endeavor, are outweighed by these self evident benefits.

And your worried about what north korea is doing with your money?

Zachriel said...

ekeyra: You then conceded that military spending is a net loss. A negative economic impact.

It's not a 'concession', merely an observation that military spending is often a net *economic* loss, but may provide other benefits, including political stability necessary for long term economic health.

ekeyra: Your saying that giving egypt billions of dollars ... are outweighed by these self evident benefits.

Um, that is not our stated position. We said it "may provide other benefits" and "it can be argued there are political benefits, which would depend on the particulars", and "is thought to have political benefits for the United States."

So, recapping, spending money on the military or foreign aid is often a net economic negative, but may provide other benefits, the value of which depends on the particulars.

ekeyra said...

Do you even understand what "net economic negative" means? Im starting to think you dont...

I can also assure you that the last thing US foreign policy is concerned with is "stability"

Zachriel said...

ekeyra: Do you even understand what "net economic negative" means? Im starting to think you dont...

Not an argument. Not even a useful complaint. You should provide the accepted definition, then show where our use varies from that.

An economic loss is the difference between the economic value of the output compared to the opportunity costs of the input. There is only secondary economic value for military expenditures, so it is typically a net economic loss. However, military spending can boost economic activity, and provide a stable environment for growth in the rest of the economy.

Major_Freedom said...

Zachriel:

"Major_Freedom: They are propositions that contain feelings."

You didn't answer the question.

Yes, I did. You didn't address my answer.

If you never feel diminished even if a million people die, is there any reason why others should care one iota about your (perceived) persecution?

First, it's not merely perceived, it's real. I am actually getting robbed of 40% of my earnings, and I am actually being intimidated by the coercive state, as are you.

Second, I am not concerned with what you think about what others might think about what I am saying. What I am saying affects them, not just me, so it's up to them to know.

"Major_Freedom: because they are threatened with violence if they don't."

When you argue against obvious points, it undermines your credibility.

When you refuse to address the response, and instead attack the "way" I say it, it just reinforces your lack of credibility.

Everyone knows that the vast majority of people accept the results of fair democratic elections.

The "vast majority" has no right to impose themselves on the "vast minority." You keep believing in the myth that as long as a "vast" majority - which by the way is greater than a simple majority, which is what our democracy is actually based on - are somehow "correct" in whatever they believe solely because they are the vast majority.

I am not talking about vast majorities, simple majorities, or any other group oriented abstract. I am talking about the individual and their rights.

Furthermore, the notion that "vast majority" accepts the outcomes, doesn't mean that those outcomes are justified vis a vis the "vast majority."

I would "accept" it if I was robbed against my will. But that doesn't mean the robbery was justified.

The only way anyone can know for sure what people want is by removing any and all threats of violence against them, and not threaten them with violence if they choose to not be a part of the democratic process and instead choose to be a part of some other process. Then you can come back and tell me what the "vast majority" really wants.

They don't always like the results, but know there will be other elections. Here example from history: "Let there be no doubt, while I strongly disagree with the court's decision, I accept it. I accept the finality of this outcome which will be ratified next Monday in the Electoral College. And tonight, for the sake of our unity of the people and the strength of our democracy, I offer my concession."

This person was born into the majority rule slave system, and their "accepting" it has no bearing on me.

"Major_Freedom: The fact that majority rule alone doesn't work is just another way of saying democracy is not an ideal."

Heh. Not just "not an ideal", but the worst of all systems...

If you believe it's the worst of all systems, why are you defending it against other systems?

Major_Freedom said...

Zachriel:


"Major_Freedom: What you are trying to say is that democracy is immoral, and must be constrained by at least some inviolable individual rights, lest the true nature of democracy be revealed."

Heavens! Inviolable? Democracy is not near that fair or just.

You're confused. I didn't say democracy has to recognize these inviolable rights before they are valid. They are valid DESPITE any democratic outcome.

What you are trying to say is that democracy is immoral, and must be constrained by at least some inviolable individual rights, lest the true nature of democracy be revealed.

People have to continually fight for their rights. It really is the worst of all systems...

You can't fight for rights if they don't exist. Fighting to protect one's rights means one already has them, whether one "wins" or not.

If it really is the worst of all systems, why do you defend it against other systems?

"Major_Freedom: It's not a net positive return. It's a net negative."

Economically. It can be argued there are political benefits, which would depend on the particulars.

Political benefits means some gain at the expense of others.

Economic benefits means people gain at no expense to others.

Most historians would say the allied investment in WWII was necessary.

Most historians are ignorant.

"Major_Freedom: You're just completely brainwashed ..."

Always with the hyperbole, even though it is clear you are on the extreme range of views concerning government.

Fallacy ad populum.

It doesn't mean you're wrong, but when you start with everyone is brainwashed but you and a select few, well, it doesn't add to your argument.

I didn't say "everyone" is brainwashed. I said YOU are brainwashed. You are not everyone. You are just you, your own, sad, brainwashed you.

"Major_Freedom: ...by nationalistic garbage, and believe that destructive action turns into positive beneficial action if the domestic state does it."

Monetary inflation can certainly be destructive, but that is a decision for each country to make.

Countries don't make decisions, only individuals do. And telling me how things are is something I already know.

And monetary inflation isn't something that "can" be destructive. It IS destructive. It would be like saying "theft and rape "can" be destructive."

Counterfeiting is a fraud.

Then so is central banking, because central banking is counterfeiting.

Major_Freedom said...

Zachriel:

If you never feel diminished even if a million people die, is there any reason why others should care one iota about your (perceived) persecution?

You see, you have the absolutely corrosive and depraved ideology that the only way you can think anyone would ever care about you, is if you project an image of being diminished at the thought of others dying. You want others to care about you, but because your own mind is so messed up, you project that being messed up on others, and then you pretend that if you can address their make believe feeling of being diminished if you die (which is what you need them to believe in order for you to sleep at night), that you must do the same thing, and feel diminished at the thought of them dying.

You are appealing to the crude and base instincts in others, rather than themselves as individual people with their own lives and their own values.

You fallaciously believe that people will care about you only if you prostrate yourself to "humanity". You aren't getting any of my respect when you do that.

The way to appeal to others and to get people to care about you is by being fiercely independent, to show them how it's done, so that you can awaken the power in them that they can only know exists by observing others exercising theirs. That is how you get people to care about you. By getting them to care about themselves first and foremost.

Your wallowing and pitifully weak tactic of claiming to be all diminished and sad and weak and all the rest, is how you attract diminished and sad and weak people. If that is who you want to care about you, then by all means, make a mess of things. But don't try to get me to join you in your rat infested sewer.

ekeyra said...

"An economic loss is the difference between the economic value of the output compared to the opportunity costs of the input."

You could have just said i was right that you have no idea what your even talking about.

Also what is "secondary economic value"? Either something is valued or it isnt. Are you just making shit up?

Zachriel said...

Zachriel: In modern democracies, the vast majority of people assent to abide by the results of elections.

Major_Freedom: The "vast majority" has no right to impose themselves on the "vast minority."

Yes, you've made your position on that clear. We just wanted to clarify that it's not 51% imposing on the 49% as you had suggested, but the vast majority of people agreeing to abide by majority rule, under a constitutional system of limited powers.

Major_Freedom: This person was born into the majority rule slave system, and their "accepting" it has no bearing on me.

It speaks to your 49% principle.

Zachriel: Not just "not an ideal", but the worst of all systems...

Major_Freedom: If you believe it's the worst of all systems, why are you defending it against other systems?

The worst of all systems...
except for all the rest.

Major_Freedom: You can't fight for rights if they don't exist. Fighting to protect one's rights means one already has them, whether one "wins" or not.

People are endowed with rights.

Major_Freedom: Economic benefits means people gain at no expense to others.

You can gain economically at the expense of others.

Zachriel: Most historians would say the allied investment in WWII was necessary.

Major_Freedom: Most historians are ignorant.

Everyone is ignorant about something, but historians tend to be knowledgeable about history.

Major_Freedom: You're just completely brainwashed ..."

Major_Freedom: Fallacy ad populum.

Heh.

Major_Freedom: I will never feel diminished even if a million people died.

Zachriel said...

ekeyra: You could have just said i was right that you have no idea what your even talking about.

It's the standard definition, and is distinguished from an accounting profit.
http://www.investopedia.com/terms/e/economicprofit.asp

ekeyra: Also what is "secondary economic value"? Either something is valued or it isnt.

A farm's primary economic value is in producing food, but it may have a secondary value in providing a scenic environment for tourists. The primary value of the military is self-defense, but it may have a secondary value in terms of local spending. An oil field has a primary economic value in oil, but secondary effects include new roads, and increases in business to serve the new workers.
http://www.google.com/search?q="secondary+economic"

ekeyra said...

zach,

Economic values are individual and subjective. Your entire perspective falls apart when viewed in this light.

Sure a farm could be valued as a producer of food, but if someone comes along and says, hey i want to shoot a movie here and ill pay you more than what you make producing food, suddenly the farms aesthetic value far outweighs its value as a food production center. It is no longer a "secondary" value, it is the primary value.

So no you dont know what your talking about and yes you are just making shit up.

Zachriel said...

ekeyra: So no you dont know what your talking about and yes you are just making {it} up.

Saying we're making it up (even after we provided a relevant citation) is simply false. It's a standard term in economics.

ekeyra: Economic values are individual and subjective.

While value has a subjective element, there is often a consistency over time. So, for instance, we can say with some confidence that a new car is worth more than a used stick of bubble gum.

ekeyra: Sure a farm could be valued as a producer of food, but if someone comes along and says, hey i want to shoot a movie here and ill pay you more than what you make producing food, suddenly the farms aesthetic value far outweighs its value as a food production center. It is no longer a "secondary" value, it is the primary value.

That's right. The primary value would change in that situation. Now you got it.

Major_Freedom said...

Zachriel:

"Major_Freedom: The "vast majority" has no right to impose themselves on the "vast minority."

Yes, you've made your position on that clear.

I will keep saying that every time you say "vast majority" as if people being in "vast" numbers automatically implies they can deprive an individual of his freedom.

We just wanted to clarify that it's not 51% imposing on the 49% as you had suggested, but the vast majority of people agreeing to abide by majority rule, under a constitutional system of limited powers.

No, that isn't even true. You cannot claim that the vast majority agree just because there isn't a revolution, or just because most people say "I accept the outcome."

Typically only 40% of the population votes, and out of that, 51% decide the "victor", when the elections aren't rigged, which they seem to be more and more these days. That means by people's actions, you can only infer that at most, 40% believe in democracy. And out of that 40%, many only vote in order to prevent who they consider to be a terrible candidate from winning, and not because they positively believe in who they are voting for. It is much like a potential rape victim choosing the least worst rapist if they are going to be raped anyway.

So empirically speaking, only a minority of people actually support democracy in the positive sense. It's not a "vast majority".

"Major_Freedom: This person was born into the majority rule slave system, and their "accepting" it has no bearing on me."

It speaks to your 49% principle.

No, it doesn't. It is a desperate hand waving devoid of any analysis whatsoever.

"Major_Freedom: If you believe it's the worst of all systems, why are you defending it against other systems?"

The worst of all systems...
except for all the rest.


That makes no grammatical sense. Your butchering of Churchill's quote is pathetic.

"Major_Freedom: You can't fight for rights if they don't exist. Fighting to protect one's rights means one already has them, whether one "wins" or not."

People are endowed with rights.

No, people have rights. People aren't endowed with rights, because being endowed implies the existence of those who endow. It is impossible for people to be endowed with rights if there is nobody external to the human race doing the endowing.

"Major_Freedom: Economic benefits means people gain at no expense to others."

You can gain economically at the expense of others.

That's not economy wide benefits, which is the ostensible purpose of the policy.

"Major_Freedom: Most historians are ignorant."

Everyone is ignorant about something, but historians tend to be knowledgeable about history.

Historical facts are one thing. Interpretations of history is also required, and that is where most historians err.

I am not doubting historian's ability to gather facts. It's interpreting them that is the problem. Events alone don't tell a story. One requires a theory to interpret historical data. Most historians are Marxoids, and so most history books are garbage.

If you want good history, it is paramount that the historian understand economics.

"Major_Freedom: You're just completely brainwashed ..."

"Major_Freedom: Fallacy ad populum."

Heh.

Heh what?

Did you mistake the ad populum as saying ad hominem instead? Heh.

"Major_Freedom: I will never feel diminished even if a million people died."

You keep retyping what I said as if you've found God and you keep chanting scripture. It's just my human philosophy.

Zachriel said...

Major_Freedom: I will keep saying that every time you say "vast majority" as if people being in "vast" numbers automatically implies they can deprive an individual of his freedom.

Of course, they can. Under democratic states, this requires the enactment of laws through an elected legislature, enforcement through an executive, due process through a court, and if convicted, punishment according to law.

Major_Freedom: You cannot claim that the vast majority agree just because there isn't a revolution ...

No, but that isn't the basis of the statement. Are you really saying that none of those on the losing side of a fair election willing accept the results? We even provided a recent example. Maybe you would feel better if you called them "sheep" or "born into the majority rule slave system" or something.

Major_Freedom: ... or just because most people say "I accept the outcome."

Normally, that would be a good indicator, but maybe it's just an automatic response to stimuli.

Major_Freedom: That means by people's actions, you can only infer that at most, 40% believe in democracy.

84% of people in 19 nations around the world support elections, but feel governments don't always address their concerns.
http://worldpublicopinion.org/pipa/articles/governance_bt/482.php

Major_Freedom: No, people have rights. People aren't endowed with rights, because being endowed implies the existence of those who endow.

A natural endowment is one endowed by nature.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed"

Major_Freedom: I will never feel diminished even if a million people died.

Major_Freedom: It's just my human philosophy.

Major_Freedom said...

Zachriel:

Major_Freedom: I will keep saying that every time you say "vast majority" as if people being in "vast" numbers automatically implies they can deprive an individual of his freedom.

Of course, they can. Under democratic states, this requires the enactment of laws through an elected legislature, enforcement through an executive, due process through a court, and if convicted, punishment according to law.

I wasn't referring to what is, I was referring to what ought to be. If you were a slave, then a slave master who used your logic would respond to your moral arguments with descriptive arguments on "how things are."

I was arguing that 99 people do not have any moral right or legitimacy in harming the 100th person, just because they "vastly outnumber" him.

Major_Freedom: You cannot claim that the vast majority agree just because there isn't a revolution ...

No, but that isn't the basis of the statement.

That is the only basis you communicated. "Vast majority" this, "vast majority" that.

Are you really saying that none of those on the losing side of a fair election willing accept the results?

I only need to show you one innocent person who disagrees, and yet is forced to obey and pay their money anyway to the state.

Of course, in reality there is far more than one person, but these are not required to make my argument sufficient, unlike yours which does rest on the mob mentality and might makes right.

We even provided a recent example. Maybe you would feel better if you called them "sheep" or "born into the majority rule slave system" or something.

Your example only reiterates your erroneous foundation.

Major_Freedom: ... or just because most people say "I accept the outcome."

Normally, that would be a good indicator, but maybe it's just an automatic response to stimuli.

"Normally" is proof it is baseless. And I've already demolished your claim about automatic responses.

Major_Freedom: That means by people's actions, you can only infer that at most, 40% believe in democracy.

84% of people in 19 nations around the world support elections, but feel governments don't always address their concerns.

I was talking about the people in the US, their actions, and what can be inferred from their actions.

Words are words. Asking people if they support elections does not conclusively answer if they actually support them.

Major_Freedom: No, people have rights. People aren't endowed with rights, because being endowed implies the existence of those who endow.

A natural endowment is one endowed by nature.

Nature doesn't endow either. Nature IS. If you want to refer to natural rights, and humans being endowed with natural rights, then you would be referring to the same thing as I am, which is innate capacities.

Major_Freedom: I will never feel diminished even if a million people died.

You keep quoting this passage as if the mere repeating of it somehow constitutes an argument for or against it.

Sorry if you have such low self-esteem that you can't handle the thought of someone else in the world not feeling negative or sad if you were no longer alive.