General Ecomomic Theory

[The Persnickety Platypus]

Should the government regulate the means of production? Or is private enterprise most productive? Would you rather live in a socialistic or capitalistic nation?

[The Persnickety Platypus]

Let's try to limit the scope a bit. Which system do you guys think would most benefit the third world?

Currently I am planning to embark on forign missionary work once done with school, and this particular question has been one of great personal interest for a time.

[ST88]

Let's try to limit the scope a bit. Which system do you guys think would most benefit the third world?

Currently I am planning to embark on forign missionary work once done with school, and this particular question has been one of great personal interest for a time.

Wow. One of the great questions of all time. In terms of a third-world society, you have to first assess which system would have which effects. Socialism requires a genuine sense of responsibility not only for the people who participate, but also for the people administering the system. It requires constant reminders of how useful every person is to the system as a whole, regardless of how useful they are. It is very easy for the leaders of a socialist system to become corrupt.

Capitalism requires a genuine work ethic for the betterment of one's own self and immediate family. But more than that, it requires the ability to understand and exploit the needs and desires of other people; and also be on your guard for others trying to exploit you. It is very easy for the leaders of a capitalist system to become corrupt.

The best answer I can give is that it is impossible to impose any given economic system in toto on a population, it has to grow organically.

[juliod]

Which system do you guys think would most benefit the third world?

Ooooh. Who can say? I don't think that up to today there have been any good general principles for helping the third world. It seems that every plan has negative consequences.

It's the old problem. You see people starving so you bring in food aid. But you thereby destroy the local farms and wipe out whatever local commerce existed. To stimulate farming you import western techniques. That makes everything worse. You offer financial aid and drive the country into crippling debt. You offer debt relief based on financial stringency. That wipes out the local government programs. And so on.

BTW, here's something I've been meaning to post in this thread. Things will be changing over the next several decades. It seems, particularly right now, that we are being ruled by an oil-garchy. This is going to end. Here's a web page presenting a very posative view of the future:

http://www.oilendgame.com/

I saw this guy recently give a presentation (the slides are on the site) at one one of the secretive DoD advisory group meetings (I was in the peanut gallery). Very convincing. Main point: The stone age did not end because the world ran out of stones.

DanZ

[The Persnickety Platypus]

Self sustainability is the ultimate goal, but I rarely see this accomplished without prior aid programs.

Juliod, that is rather pessimistic, not to mention entirely false. There have been some success stories. Take South Korea and Tiawan for example. Both are commonly used as the prime example of capitalist triumph. However, niether achieved their status without the help of massive aid programs. As I said, the United States (in one of our few charitible missions of all time) poured massive amounts of money into the development of these country's economies. Now both can successfully rip-off surrounding peoples, just like big brother America. Of course, I shudder to imagine their current wealth gap, but there is no denying that the quality of life has increased.

Presumably, applying this method to other struggling economies could yield good results as well. Many organizations will march into a country looking to establish a capitalist sector, yet soon find that there is no capital to facilitate. This phenomenom can be applied to many poor people's the world over, even citizens of our own country. It takes money to start a business, it takes money to attend college (or even finish high school)- something the poor obviously lack.

Charity and re-distrubution are essential to sustainability, a simple and conspicuous concept many capitalists fail to account for. Korea and Tiawan, despite surface appearance, are both examples of socialism at work.

[juliod]

Take South Korea and Tiawan for example.

But were these third-world countries? They were front-line states in the cold war, essential to our policies, and they had no history of western colonialism.

I was thnking more in terms of africa. Many people argue that our programs there have been essentially harmful in all cases.

DanZ

[Cephus]

I'm not entirely sold on that type of obligation. Would an ideal corporation offer outplacement services and assistance to its displaced workers? Sure. Would an ideal corporation behave like a good citizen by respecting both its rights and responsibilities to the public? No dispute there. Should GM and other corporations learn from the past? You bet. I think that employees should learn, too, and maybe take some personal initiative to better themselves. Employees should pay attention to the sales figures, keep an eye on the marketplace and accept some individual responsibility for their futures.

Individual responsibility is a bad word these days. No one is responsible for themselves and if something bad happens to you, it's not your fault, you can point fingers at everyone around you and usually sue them for it as well.

In a perfect world, the company should be as loyal to the employees as the employees are to the company. People used to work for one company for life and the company used to take care of their employees and reward loyalty. Those days are gone forever, it seems. Everyone is just looking out for themselves and screw anyone who gets in the way.

[The Persnickety Platypus]

But were these third-world countries? They were front-line states in the cold war, essential to our policies, and they had no history of western colonialism.

I don't know if they were third world or not, but they were certainly economically unstable. I don't think it matters a great deal, the solution still works in theory. The method behind their development could probably be duplicated in many other countries, or at least ones of similar economic status.

In my previous searches I could not find much information on Africa. However, I do know that Kenya's attempt at Capitalism failed miserably. The informal Capitalist sector, which accounts for 60-70% of the work force, produces 30-40% of the gross domestic product. 10% of the population takes in around 50% of of the country's earnings. I know my stats are a little off, so consider these ballpark figures.

Kerala, a region in India, is also a good example of Socialist triumph. Through work reforms and pensions, they have leaped up in the POLQ living quality ratings, as opposed to the rest of India, which I believe is primarily Capitalist.

I will need to do some more research, however.

[ST88]

I will need to do some more research, however.

Platy,
You might be interested in Hernando de Soto, who came up with the term "dead capital" to describe how the "poor" in a third-world country are only so because existing institutions do not recognize their capitalization potential.

This is an interesting article on de Soto's theories couched in a book review of another author:
Is It Bad Culture or Bad Laws That Keep Some Countries Poor?

[MagusYanam]

But were these [South Korea and Taiwan] third-world countries? They were front-line states in the cold war, essential to our policies, and they had no history of western colonialism.

I was thnking more in terms of africa. Many people argue that our programs there have been essentially harmful in all cases.

DanZ

The 'third world' refers to countries that were not members of either NATO or the Soviet Bloc in the Cold War, which would make both South Korea and Taiwan 'third world' countries (not that the term really means anything these days - it's usually used to refer to 'developing' nations, which is completely different).

But The Persnickety Platypus is right. South Korea has been through a war with North Korea and a great deal of internal turmoil besides since its independence from Japan. But now, like Japan, it is a thriving industrial power largely because of socialistic policies. Companies realise that they have to work with the public and in the public eye, which companies here, by and large, don't. In fact, I'd argue that's one of the reasons companies like Toyota, Nissan, Sony, Hyeondae, et cetera do so well financially.

Taiwan is strange, though. You have about 40 years of military dictatorship under the Jiang family and their party, the Guomindang. Now that they've finally liberalised their democracy, they're beginning to work their way up further financially. But the Guomindang seems to have a bad relationship with socialistic policies and a love-hate one with democracy, particularly under Jiang Jieshi, who ruled with an iron fist and was a dedicated anti-socialist. Now that the Minjindang (under Chen Shuibian) is in power, things have improved drastically for political rights and slightly for economic prosperity.