Democratic Socialism In Venezuela

You just got done posting - at great length, quoting from a link you found so enlightening you filled three posts with it (25, 26, 27) - that prior to the creation of a government-run central bank in the 1860s Sweden did not have a prosperous economy at all.

As you emphasized, with links and arguments and everything, Sweden's current prosperity dates to the time it set up a government run central bank. Before then, it was a poor country for a long time. If you read my links, you read about some of the reasons it was poor - chief among them the standard problems that all modern economies suffer from unregulated private banks with too much economic power, and no central banking authority accountable to the public or its governmental representation.

 

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Banks are not people. Neither are corporations. And both are capable of violence, all kinds of violence.

Personal liberty is not maximized by minimizing the State.

 

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You just said they're not people, which I agree, therefor 'corporations' (a legal fiction) and banks (now a scam industry / mafia as well as legal fiction) are not capable of violence. People who work for these legal fictions are though - and they'll go to jail. If Bill Gates walked up to you, shot you in the face for pirating his company's OS, he'd be put in jail. But, if the State passed a law that said pirating said OS was illegal, and you pirated it, and the Police State came to your house, and you resisted arrest, you could be legally shot in the face. As a matter of fact, this happens all the time for the crime of having a plant leaf in your pocket. At least it does if you're dark complexioned.

As a matter of fact, "Corporations" were defined into existence to protect the owners of said corporations from law suits. Therefor, you sue company A, they go bust, the owners walk away without loss. All thanks to the State.

Yes it is. The more so the better.

 

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RE: Free-Banking in Sweden.

One more time, PRIVATE banks precede Central Banks. If it were just a matter of creating a Central Bank, Zimbabwe would be rich.

 

The central bank "Deutsche Reichsbank" founded on 1, January 1876.

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To Centralize and consolidate power, a draft banking law was introduced in the Reichstag (the German parliament) and passed into law in 1875. Germany had 31 central banks however with the creation of the Central Bank, the Reichsbank, only four of the Notenbanken (other competing central banks) remained: Baden, Bavaria, Saxony and Württemberg and continued to exist until 1914.

Here's a wheelbarrow of money worth a loaf of bread in 1923.

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Here's the Central Bank our Government created in 1913. As you can see, we were one of the richest nations BEFORE its creation. And by the far the freest.

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Here's the Great Depression it caused.

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Here's the consequences of a Central Bank:

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and this:

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and see this:

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But don't you worry, we're going to get our Hugo Rafael Chávez Frías. It's baked in the cake. And we'll also get all that lovely "Democratic" Socialism. Or, put another way, Democratic Violence. Or still another way: a Democratically elected Dear Leader who will use the State's special legal ability to initiate violence against innocent Citizens "for the Good of Society".

Because we all know that initiating violence against morally innocent humans for the good of the abstraction so that the cognitive biases of the lowest common denominator can be met: now now now, today today today me me me meme meme (LOL) has never had any negative consequences at all: See the holocaust, human slavery, and etc....


Don't worry, Dear Leader is coming - just be patient

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You'll get your Uncle Bernie.
LOL

Another 15 years tops.


Just imagine living in a Democratic Socialist State iceaura. One where the State ensures who you can legally marry, what you can legally eat or drink, what color you can paint your house, what jobs you can perform, one that controls your currency, ensures your children are 'educated' in its wonderful Government Schools. All wrapped up in a Government Spy Apparatus ensuring your safe Police State is there to look out for you, the Citizen (LOL) - your best interests; know, because Uncle Bernie Loves You.


Incidentally, when not engaged in our Never Ending Wars, Dear Leader passed the most Regulations this year, 'governing' the State's Tax Chattel than in our history. Millions and millions and millions of lines of regulation.

How wonderful it is to live in the Land of the Fleeced. Home of the Slave.

 

This is Venezuela right now:

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See those people with the shields: THEY are your "Democratic" Socialism.

Right there.

This IS State Socialism. It's violence. All of the worse in humanity is brought and exemplified by State violence. Right now, in our election, we're voting for which Statist we want ruling over us. All of our communications are collected by the State - illegally. The State uses regulatory capture to enforce liscencing scams for rent-seekers - illegally. It runs the largest Prison Industrial Complex in human history and cages more non-violence humans than any other 'society' in human history - including the USSR and modern day China. It engages in illegal wars at the cost of trillions. Bails out the richest most crooked criminal bankers in history - many of whom instead of being jailed for their Liar Loans are now SlumLords living parasitically off single mothers working 3 jobs to get by.

These are historical facts. We live in the largest most powerful Authoritarian State in human history. But it's still not enough for you - you need more and more and more violence. There'll never be an end. Well, that is until there's total social collapse and the rise of a Dear Leader. Probably along with WWIII.

THIS, what you see around you, IS "Democratic" Socialism and "Democratic" Fascism.
Venezuela is the eventual outcome. Or, if you'd like something closer to home, go to Detroit. Visit any Government-run "Welfare" Ghetto. They're all great examples of Government "Democratic" Socialism. All of the decent moral Privately run Social Institutions have either given up or given in and are now a part of the State. Well, in the real world that means real people, caring people, quit. Why bother, the State will force them out of business if they did attempt to create a decent charity. Who wants to 'do the right thing' or face embarrassment and judgement for their bad choices in life when you can instead shit out 5 kids and live off the State generation after generation.

 

The State is not a person either. So it is not capable of violence, according to you.

We agree. Yes. For generations, in Sweden, of poverty and economic stagnation, they had private banks performing all banking functions. That was my point. That's what I posted, with links and everything. Do you understand that we agree completely in that matter, and always have?

Sweden's current prosperity began (and continued ever since, 150 years and counting) with its economic reforms of the 1860s. Remember you posted that? I agreed with you. The central and most significant reform was the removal of central banking functions from the private banks, and establishment of government ownership and control of them - a government central bank. Other reforms included government negotiation of free trade agreements with other countries, and so forth. This is historical fact.

You chose that example, of successful economic reform leading to long term prosperity.

As we can see? How are we supposed to "see" that? Because it's a big, ornate building that only rich people can build? I'll bet Zimbabwe has some bigger and more ornate buildings than that, and built by rich people too.

You pick the damnedest examples. It's a gift.

Here are a couple of real world examples of US governments of various kinds telling people whom they can and cannot marry, where they can live, where they can go to school, which toilets they can use, what they can do for a living, etc - notice the dates:
http://www.yale.edu/ynhti/curriculum/units/1979/2/79.02.04.x.html

https://en.wikipedia.org/wiki/Atlanta_race_riot
and so forth. How far back from 1913 do you need? I can trace that aspect of "freedom" and "prosperity" in the US to 1650, easily - and connect it to private capitalist financing, too.

I can also trace it forward, and connect it to this kind of ugly:

These guys do run in harness, don't they. Give them enough time, and they always get to the same place.

 

LOL

They had both public and private banks. Both types of banks had their problems. Public banks are run by idiotic morons (see our Fed) and Private banks are run by unscrupulous morons (see our Fed). Which is why we want ALL banks to be private, so that competing currencies drive the worse out of business and contract ensures their owners are sued when they break their contract. As it stands, we have a central bank / mafia that works hand in glove with psychopaths in government to bail out the very people who should be in jail. Which is why NONE of the Banking CEO's who sold Liar Loans, fraudulent 'financial products', etc... not a single one was prosecuted. Instead of going to jail, our Government and Central Bank bailed out these rich criminals making them even richer. "Hope and Change" Suckers... LOL Hell, many are now retired SlumLords milking single mothers on Government Welfare.

This is a fact. Another fact is our Government runs a near monopoly on K-12 pedagogy and after a little over a decade of Government Schooling, 1 in 5 graduates cannot read or write. Another fact is our Government made up phony WMD to start our never ending wars - 7 trillion and counting. Another fact is our Government imprisons the most non-violent humans in history. Another fact is our Government is the largest polluter in human history. AND wastes the most energy. Another fact is the US Government illegally spy's on it's Tax Chattel - which has now become 'normal'. Geee, wasn't that quick. But, what can you expect from a Government Schooled public that reads at a Grade 6 level.

But don't worry, we just need one more regulation, a few more rules, just a bit more spying. Then we'll have your "Democratic" Socialist Utopia. Oh, and to get that Utopia, we'll need our version of Hugo Rafael Chávez Frías. One day, the USA will look just like modern day "Democratic" Socialistic Paradise Venezuela. All in due time.

 

All the banks in Sweden were privately owned, capitalist, profit-making ventures until 1868. And yes, without a central bank accountable to the government, Sweden's economy had its "problems". Such as poverty, and economic crashes, and so forth. Sweden's current prosperity dates to the economic reforms of the 1860s, central to which was the establishment of a government owned and run and regulated Central Bank.

That has never worked. It never will, according to basic economic and game theory. One reason it cannot work is that bankers are not in general altruistic people willing to sacrifice their interests for the good of the community. Another reason it cannot work is that predators exist. A third reason is that currencies do not compete in the manner you seem to assume. A fourth is that the common victims of banking swindle and the people with good access to lawyers are different people. A fifth is that the information necessary for the rational market operations that are supposed to govern that zoo is expensive, concealable, and therefore sequestered among an elite. And so forth. You can get a reasonable introduction to what will happen to your utopian fantasy in practice in most introductory economics textbooks - the stuff about what is needed for a rational market, the problems of the Commons, etc.

 

LOL

Little State, Big God
Big State, Little God

No one 'knows' what's possible. You can model and you can predict - you cannot know. We may have a currency that allows me to see every and anything you buy. Everything. I may be able to see exactly what value you provide, how you make your income. I and everyone else. Who knows. Imagine shamming a person because they're a slumlord who is squeezing the life out of single mothers forced to rely on Government welfare. We'll see the slumlord and his or her family and we'll see the single molter's squeezed. You think lawyers are a problem - well, with AI this isn't going to be a problem.

The fact is, your world is ending. Slowly, but it is ending. Statist Authoritarianism runs counter to human nature at the individual level. And IMO we're going to get to that level. Your collectivist gulags will, one day, be a thing of the past. Whether you like it or not.

It may take a few generations, but that's fine

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....other postdoc cognitive biases.

In the 1700s people said the same about Slavery. Without Slaves we'd die of exposure, hunger, in a ditch of our own vomit. Women would suffer, children would be still born. The Gates of Hell would open up.

Slave Masters made their economic and empirically evidenced arguments, they appealed to history and authority, Aristotle, even God - all demonstrating the truth of their arguments.

Abolitionists made a moral argument.


Which side of history do you think you're on?



It should be noted, until Slaves/violence were no longer an option, we couldn't make much technological progress. State Authoritarianism held back our progress.

 

Meanwhile, the actually existing arguments and the current models and the predictions from everything we do know - including the entire economic and mathematical theory you are getting your free market claims from - all say the same thing. So does the historical record - the stuff that has in fact happened.

That's ordinary present reality. We have that now. It turns out that rich and powerful people often don't even care if poor and powerless people shame them. Imagine. Who could have guessed?

No, they didn't.

Slavemasters often made what they claimed was a moral and ethical argument, including among other points: voluntary free market capitalist exchange is morally superior to government regulation; private property rights and small government is morally better than authoritarian State violence; State violence against the innocent propertyholder is wrong; government meddling in free market exchange is tyranny; and so forth. They warned against cultural diversity - the degradation of community values that would follow foolish liberal policies of welcoming moral inferiors into the community.

Abolitionists argued for massive and violent (if necessary) government interference in the private management of capitalist enterprise, holding that there were higher moral values than the freedom of property owners to manage their property as they saw fit; the long term good of the community sometimes outweighed the short term private benefits of free market exchange; the penalty in community values was avoidable and in any case had to be borne for the higher goal; and so forth.

Sound familiar?

Your entire worldview depends on these bizarre fantasies, these daydreams of alternative histories that would - if they had ever happened - support your current descriptions of the present and predictions of the future. You don't even check them against each other - remember when you identified the time of greatest technological progress in America as the century before Central Banking?

And all of this -oddly enough, and probably by chance - bears directly on the current situation in Venezuela. Will the moral argument against colonial capitalist subjugation of the Venezuelan people attract the support of defenders of freedom everywhere, and act as a counterweight to the global moneylenders's reaction to the collapse of yet another doomed try at centrally managing a modern economy?

 

"magine shamming a person because they're a slumlord who is squeezing the life out of single mothers forced to rely on Government welfare. We'll see the slumlord and his or her family and we'll see the single molter's squeezed. -
I am a slumlandlord > Let your parasite government don't rise my real estate tax , and the welfare which they provide to the good single mother teach her how to cook for the children , instead feed them with pizza that might make a change in our society.

 

Slave Masters relied on Statist Authoritarians working in the Government to make their immoral ventures legal - which created Jerbs for the less palatable of humanity working as Police Agents who would initiate violence against run away Slaves. Often killing or imprisoning them. Slavery is the exact opposite of a free market in labor.

But yes, Statists claimed all sorts of things. Not much has changed in fact. Hell, even today people claim we need to initiate State violence against the morally innocent individual for the good of society. You know, like free K-14 and healthcare. Never mind the functional illiteracy rates and death by OD.

 

Act as a counterweight?!?!
HA!
The US Central Bank bailed out, and is in fact ONE of, said global moneylenders!

Anyway, 3 generations - nearing 2.75 we're getting there

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Ever since the 2008 financial crisis, it has been common to chastise economists for not having predicted the disaster, for having offered the wrong prescriptions to prevent it, or for having failed to fix it after it happened. The call for new economic thinking has been persistent – and justified. But all that is new may not be good, and that all that is good may not be new.

The 50th anniversary of China’s Cultural Revolution is a reminder of what can happen when all orthodoxy is tossed out the window. Venezuela’s current catastrophe is another: A country that should be rich is suffering the world’s deepest recession, highest inflation, and worst deterioration of social indicators. Its citizens, who live on top of the world’s largest oil reserves, are literally starving and dying for lack of food and medicine.

While this disaster was brewing, Venezuela won accolades from the United Nations Food and Agricultural Organization, the Economic Commission for Latin America, British Labour Party leader Jeremy Corbyn, former Brazilian President Luiz Inácio Lula da Silva and the US Center for Economic Policy Research, among others.

So what should the world learn from the country’s descent into misery? In short, Venezuela is the poster child of the perils of rejecting economic fundamentals.

One of those fundamentals is the idea that, to achieve social goals, it is better to use – rather than repress – the market. After all, the market is essentially just a form of self-organization whereby everyone tries to earn a living by doing things that others find valuable. In most countries, people buy food, soap, and toilet paper without incurring a national policy nightmare, as has happened in Venezuela.

But suppose you do not like the outcome the market generates. Standard economic theory suggests that you can affect it by taxing some transactions – such as, say, greenhouse-gas emissions – or giving money to certain groups of people, while letting the market do its thing.

An alternative tradition, going back to Saint Thomas Aquinas, held that prices should be “just.” Economics has shown that this is a really bad idea, because prices are the information system that creates incentives for suppliers and customers to decide what and how much to make or buy. Making prices “just” nullifies this function, leaving the economy in perpetual shortage.

In Venezuela, the Law of Just Costs and Prices is one reason why farmers do not plant. For that reason, agro-processing firms shut down. More generally, price controls create incentives to flip goods into the black market. As a result, the country with the world’s most extensive system of price controls also has the highest inflation – as well as an ever-expanding police effort that jails retail managers for holding inventories and evencloses the borders to prevent smuggling.

Fixing prices is a short dead-end street. A longer one is subsidizing goods so that their price remains below cost.

These so-called indirect subsidies can quickly cause an immense economic mess. In Venezuela, subsidies for gasoline and electricity are larger than the budget for education and health care combined; exchange-rate subsidies are in a class of their own. With one daily minimum wage in Venezuela, you can buy barely a half-pound (227 grams) of beef or 12 eggs, or 1,000 liters (264 gallons) of gasoline or 5,100 kWh of electricity – enough to power a small town. With the proceeds of selling a dollar at the black market rate, you can buy over $100 at the strongest official rate.

Under these conditions, you are unlikely to find goods or dollars at official prices. Moreover, since the government is unable to pay providers the necessary subsidy to keep prices low, output collapses, as has happened with Venezuela’s electricity and health sectors, among others.

Indirect subsidies are also regressive, because the rich consume more than the poor – and hence appropriate more of the subsidy. This is what underpins the old orthodox wisdom that if you want to change market outcomes, it is better to subsidize people directly with cash.

Another bit of conventional wisdom is that creating the right incentive structure and securing the necessary know-how to run state-owned enterprises is very difficult. So the state should have only a few firms in strategic sectors or in activities that are rife with market failures.

Venezuela disregarded that wisdom and went on an expropriation binge. In particular, after former President Hugo Chávez was reelected in 2006, he expropriated farms, supermarkets, banks, telecoms, power companies, oil production and service firms, and manufacturing companies producing steel, cement, coffee, yogurt, detergent, and evenglass bottles. Productivity collapsed in all of them.

Governments often struggle to balance their books, leading to over-indebtedness and financial trouble. Yet fiscal prudence is one of the most frequently attacked principles of economic orthodoxy. But Venezuela shows what happens when prudence is frowned upon and fiscal information is treated as a state secret.

Venezuela used the 2004-2013 oil boom to quintuple its external public debt, instead of saving up for a rainy day. By 2013, Venezuela’s extravagant borrowing led international capital markets to shut it out, leading the authorities to print money. This caused the currency to lose 98% of its value in the last three years. By the time oil prices fell in 2014, the country was in no position to take the hit, with collapsing domestic production and capacity to import, leading to the current disaster.

Orthodoxy reflects history’s painfully acquired lessons – the sum of what we regard to be true. But not all of it is true. Progress requires identifying errors, which in turn calls for heterodox thinking. But learning becomes difficult when there are long delays between action and consequences, as when we try to regulate the water temperature while in the shower. When reaction times are slow, exploring the heterodox is necessary, but should be done with care. When all orthodoxy is thrown out the window, you get the disaster that was the Chinese Cultural Revolution – and that is today’s Venezuela.


--Ricardo Hausmann
Former minister of planning of Venezuela and former Chief Economist of the Inter-American Development Bank, Professor of The Practice of Economic Development at Harvard University

 

No. Their immoral ventures were legal in the first place - the absence of relevant State law was all they needed.

They - the main body of enforcers - were private employees and contract workers - not police agents. They were paid by capitalist agribusiness owners, not the government.

No, it isn't. If you don't regulate a labor market, and establish a State to forbid such arrangements, and back up your prohibition by threatening State violence against slavers, what we see in the past and in other places, what we calculate in theory for the present here, is that you will get slavery as soon as it becomes profitable.

Yes. That was part of my point. You seem confused - do I need to simplify something?

Why yes - Venezuela is a fine example of what happens when economic fundamentals are ignored.

And it has been, for a very long time. Or were you going to confine your description of Venezuela's misery to the last few years of government mismanagement and government central control?

 

They were only legal in that the State defined dark complexioned humans as non human.

The Government was needed to make it profitable. As was evidenced in Brazil when the Government stopped enforcing the law and Slaves walked off their plantations with no fear of being hunted down by an agent of the State and returned. Slave owners were only able to keep and maintain Slaves with explicit policing by the State. This actually happened historically, we don't need to wonder what might have happened - it happened and Slavery ended without a War.

Yes, it is. Slavery / forced labor is the exact opposite of a free-market in labor / labor done voluntarily.

No, that does not happen without State enforcement of legalized Slavery because Slaves walk off their plantations and without the State to cover the coasts of hunting them down, Slavery becomes unprofitable. Further, German farms owned in the South of the USA proved paid labor was more profitable. Without the State, paid labor would have replaced Slave labor.

Then we agree, the Progressive Central Bank should be ended, making way for competing currencies. Along with it, we should end Income Taxation. Not only are such institutions immoral, but a free market will be able to provide the solutions needed - currently hampered by the Central Bank.

Welcome to Central Planning via "Democratic" Socialism.

Recall these conversations in a couple decades when Sweden is a dump. Try to remember in the beginning, what lay the foundation and set the train in motion, was Central Planning via Democratic Socialism.