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Greece is a Harbinger of Things to Come

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Greece’s bankruptcy proves one thing: welfare states are wasteful and unsustainable. Since the early 1970s when Greece transitioned from a military dictatorship to a republic, the country has had one socialist government after another. Years of government largess in the areas of education, health care, paid vacations, and early retirement has brought the nation to its knees and has made it the current number one beggar nation in the world.

Of course, it wasn’t just the wild spending that got the Greek people in trouble. It was the fraudulent financial records their government submitted to its benefactors to keep the gravy train rolling. It was also the lack of courage Greek politicians had in making sure that all those government goodies were paid for with tax increases. You see, Greek politicians for too long were like the parent who just couldn’t say no to their children – ever. Now, out of necessity, some of the toys bestowed on the Greek children by their government are being taken way, and they are throwing a tantrum in the streets of Athens.

Governments like Greece that ultimately do not control their own currency have about two options when the bills come due and the till is dry – default or grovel at the feet of big bankers to loan you more money with which to financially hang yourself. Greece, of course, has turned to groveling, but at a huge cost. In order to get bailed out, the Greek government had to enact measures that are foreign to the Greek people. It had to get its financial house in order by cutting benefits to the citizenry. Hence, all the stomping of feet, banging of heads, crying, and screaming in the streets.

But, enough about Greece, let’s discuss why this matter is important to the average American. It is because our gravy train is on the same track as Greece’s. The only difference is that we can inflate our currency wildly to pay the bills, but only to a point. Remember the opening line of this article: welfare states are wasteful and unsustainable. They are wasteful because they entail taking resources from productive members of society and giving them to unproductive members of society. Thomas Jefferson warned us about that when he said, “I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” In other words, government should not be in the business of diverting money away from enterprises (new factories, inventions, jobs) that make our economy grow and giving it to groups that contribute little to the well-being of society. Yes, these groups I speak of include the banking cartel, the military industrial complex, and individual welfare kings and queens.

Welfare states are also unsustainable because you have to fool all the people all of the time, but at the same time you cannot fool the laws of nature. It is easy to convince a large segment of society that welfare spending is compassionate and is the cost of building a civil society, especially since you aren’t raising their taxes to pay for it. It‘s a piece of cake to convince the underprivileged that they are entitled to public assistance because they somehow are the victims of a harsh economy. As for the banking cartel and military industrial complex, they will gladly accept low-interest loans, bailout funds, and big government contracts as a normal course of doing business. In this scenario everyone wins. The working man has low taxes, the underprivileged have income security, the corporate elites have implicit government guarantees against failure and, most importantly, the ruling elite collects campaign contributions and votes which install them in office usually for however long they want to “serve.”

For the last forty years in America this has been the routine, and our leaders kept telling us that this was not too good to be true. “We are the United States. We have the strongest economy in the world. Someone will always be there to buy our debt – the Europeans, Japanese, Middle East, and China. Besides, the deficits and national debt don’t matter.” Do you remember when Dick Cheney told us that one?

But, deficits do matter. And our national debt is a powder keg waiting to explode. The laws of nature will catch up with us just like they caught up with Greece. If and when the Federal Reserve raises interest rates to attempt to quell inflation, the new interest payment on our national debt will be crippling to the federal budget. If the Fed never raises rates again, our economy will be relegated to the same level as Zimbabwe’s. At that point, perhaps the Fed governors will attempt to print our way out of trouble. The only problem is that no one will be interested in buying our debt.

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About Kenn Jacobine

  • Les Slater

    Ken doesn’t seem to understand that the modern capitalist state needs a bloated government to prop up its operation. It is fundamentally the military that dictates the economic relationship between the different countries. It is the police in each country that are responsible for keeping the workers in check.

    Neither the military nor police contribute anything to the productivity of industry. This is also true for banking, insurance and a myriad of other parasitic endeavors. The working class, including in Greece, have to feed, clothe, house and entertain a staggering layer of leeches.

  • You’re back, Les. Good.

    Double check the thread on Dan Miller’s latest. You might find it interesting.


  • Les Slater

    Dan Miller’s latest? It does look like it might be interesting but already has 271 comments. I was waiting for someone to bring up Greece. So here I am.

  • Les Slater

    Geece is a test case. That government has been told to make the working class pay for a crisis brought on by the capitalists and their system. The nervousness we see as a result is that each capitalist sees a reflection of their own working class in the resistance of the Greek workers.

  • Check it out anyway when you can: interesting issues raised on the thread.

    You’re right about #4: Spain and Portugal may be next.

    But I’ll have to wait till tomorrow; too wasted today.

  • Anyway, Greece is brought up on that thread too.


  • Glenn Contrarian

    Ah. Another article on the evils of Big Government.

    Kenn, I don’t have time to reply right now – I will do so on Monday. See you then!

  • “Greece’s bankruptcy proves one thing: welfare states are wasteful and unsustainable”

    Wrong in that Greece’s dilemma doesn’t “prove” anything. Greece is in trouble owing to a myriad of mistakes from within, only part of which can be attributed to welfare waste, coupled with outside influences beyond their control.

    The article just boils down to another of Kenn’s diatribes against everything that does not meet his definition of pure unfettered capitalism.

    Kenn, Dave and others always make sure that they first blame all our ills on liberals and any government expenditures beyond the military and perhaps building intstate highways, characterizing pretty much anything beyond as the evil of the nanny state. It really goes back to the “Let them eat cake” attitude of the right.

    The private sector has proven over and over again that it cannot nor will not regulate itself, it neither can nor will provide for those in need who BTW are NOT primarily “welfare queens.”


  • I will have to look at this tomorrow.

  • STM

    It’s no harbinger of anything. Greece has taken it fair up the clacker as a result of the GFC. It’s got nothing to do with “welfare states”. Part of the problem with Greece, Portugal, Spain, Italy, is that they didn’t pump enough money into their economies to stimulate them when the GFC was at its height … unlike countries like the US, Australia, Britain, which in comparison are weathering the storm fairly well.

    For all the criticism of Bush and Obama and the Brits and Aussies pumping money into their economies, it’s actually worked.

    The US and Britain have held up a lot better than they would have (thibnk it’s been bad, imagine how bad it could have been had the governments of those two places not attempted to stimulate their economies, just the way it happened in the Great Depression).

    In Australia, it worked extremely well. Stimulus money + excellent prudential regulation aimed at stopping cowboy practices left its big four banks in the world’s top 10 – and among the world’s strongest through the crisis.

    It didn’t even go into recession. Now compare that to Greece and some of the other southern European nations.

    Anyone who thinks this is about welfare states rather than good crisis management is talking through their arse (which is a common malady on BC when it comes to this kind of stuff).

  • STM

    Australia, BTW, would be considered a welfare state under the same criteria that is being applied here to Greece.

    So how come it came out of the GFC with the developed world’s strongest and best-performing economy??

    Indeed, in a much better position than the United States and with low unemployment and a higher GDP than the US.

    Come on, answer … somone.

  • STM

    That’d be you, Kenn, I’d be asking. If this is about so-called “welfare states”, how come Australia came out on top in the GFC and remains there for now, also being the first of the developed western economies to be forced to INCREASE interest rates over the past 12 months to SLOW DOWN growth and cut inflation?

    This is where, as is often the case, a little knowledge can be a dangerous thing when people try to use this stuff to support an ideological argument.

    If anyone doubts the veracity of what I’ve written here, do your own research. It’s all there on the internet for anyone to see.

  • STM

    Plenty of articles on what I’ve written about Australia in the Wall Street Journal, Kenn, whose expert analysis I’d trust a bit more, with all due respect, than an expat teacher of American history living in the emirates.

  • Paul Krugman predicts that Greece will go off the Euro and go through a wrenching devaluation crisis similar to Argentina’s in 2001 and following.

    But comparing Greece to the US is just more libertarian propaganda, which is what all KJ’s articles are.

  • STM

    The problem is, Kenn tries to use this as propaganda when the social engineering, if you like, of Greece is very similar to that of Australia and as the Wall Street Journal explains here the Australian economy emerged from the GFC, and remains, in the best shape of any of the developed first-world ecomies, including that of the US.

    It is far more “socialistic” than the US, if we were to use Kenn’s libertarian/right-wing republican views as the yardstick.

    It has legislated high minimum wages, very high legislatively protected wages generally with unions strongly involved in the bargaining process, workplace conditions that favour workers with night, weekend and public-holiday penalty rates added to wages (in some cases three times the hourly rate), quite high taxes on large corporations and the wealthly, and universal free health care, a strong welfare and state-pension system, a very large and well-funded public education sector, and a lot of doubled up bureacracy as, like the US, it is a federation with three tiers of government: federal, state and local.

    The reason this kind of “social engineering” works is that all parties, businesses included, are in accord about the need to share profits. They understand that a happy and loyal workforce is a good workforce. The key to it all: neither party – employer or employee – gets screweed. And more importasntly, neither FEEL they are getting screwed.

    So we’ve established Australia is a “socialist, liberal-democratic state” with welfare systems and legislation in place to protect workers much the same as Greece.

    Yet, as the Wall Street Journal points out in the article above, it has weathered the GFC and has come out the strongest of all the western nations.

    Which means: Kenn’s article = bollocks, and the argument falls flat on its arse.

    Especially with Australians now enjoying a higher standard of living than Americans.

    Kenn. Please explain.

  • STM

    Perhaps I should write an entire article using this argument to refute Kenn’s absolutely ridiculous argument.

  • STM, You said it, Australia is weathering the storm better because it raised rates. There is no recovery in the U.S. You and Obama and all the other bleeding hearts who don’t care the least bit about the unemployed are saying we are in a recovery. What we are in is the time between 1929 and 1933. From all the spending and reinflating of the same bubbles we are headed for a bigger fall. The biggest one right now is the Dow. Did you notice it was down about 700 points this week while gold was way up?


    #8 – I named the military industrial complex as a welfare recipient.

  • Mark

    Productive members of society should have major say in which unproductive members are subsidized.

    Kenn, define ‘productive’.

  • STM

    Kenn: “You and Obama and all the other bleeding hearts who don’t care the least bit about the unemployed are saying we are in a recovery.”

    Stop lumping me in with namby-pamby latte-drinking American liberals.

    And nowhere in any of those posts did I say the US was in recovery and somehow you’ve managed to lump me in with Obama because you think I don’t care about the unemployed. Can’t work out how that extrapolation was arrived at.

    What I said was, if Bush and Obama hadn’t pumped so much money into the big banks, corporations and stimulated the economy generally, you’d be a lot worse off than you are.

    You’re making shit up again … as usual.

  • STM

    And you still haven’t answered the question: how one “socialist” state (Greece) goes down the gurgler while another (Australia) comes out of the GFC stronger than anyone else when both have similar kinds of social engineering in place – especially in terms of high wages, good holidays and excellent workplace conditions all legislated for rather than left to the whims of employers, who know don’t have a higher bottom line constantly in their sights, right, no matter who gets screwed in the process?

    There’s no wriggle room … tell us exactly how that can be, and why.

  • Baronius

    STM – Haven’t you said that the Australian banks weren’t heavily invested in real estate derivatives?

    Handy and Bar – You’ve noted that Kenn’s argument is libertarian, but you failed to note how his argument is wrong. Isn’t that just name-calling?

  • “. . .especially in terms of high wages, good holidays and excellent workplace conditions all legislated for rather than left to the whims of employers, who know don’t have a higher bottom line constantly in their sights, right, no matter who gets screwed in the process.”

    Hit the nail on the head, Stan, plus responsible, representative government. Both conditions have been badly missing in the US.

    You might want to look at the following video.

    Don’t be turned off by it being so-called “Marxist view.” It spot on in identifying the US problems as a by-product of stagnated wages and rising consumer debt.

  • STM

    They have been bound by quite strict prudential rules and regulations regarding the derivatives and other kinds of finacial investment packages. These were legislated by the previous, conservative government – a very good move, as it turned out.

    In other words, they’d worked out there were some dodgy things around that had been packaged up and sprinkled with triple-A rated golden fairy dust. But they did have some exposure – not huge compared to a lot of countries, although many local councils did their ratepayers’ dough – which they’ve all had to write off. The Australian Government guaranteed everyone’s savings, however.

    On the local front: The lending criteria in this country has been quite strict. If it was thought you mightn’t be able to repay the loan, especially with property p[rices ridiculously high in the major cities, you likely wouldn’t get it in the first place.

    We have been very lucky, though, IMO. Our export industries have carried us through the storm to a large extent, but the economy DID need to be stimulated with government (OUR) money, and although some of it’s been highly unpopular, everyone agrees that it seems to have worked for the time being.

  • STM

    Kenn, you have heard about the trading bungle … the sausage fingers theory, haven’t you, which was widely touted around late in the week?

    How a trader selling Procter and Gamble hit the “B” key instead of the “M” key … selling in billions instead of millions, which sent cyber trading into meltdown?

    The machines took over, and the humans couldn’t keep up … until someone realised that a plunge of that magnitude could only have been the result of an errant trade somewhere along the line.

  • May as well have the monkeys pushing the buttons.

  • STM

    Rog, I tried to look at that video but it buggered up my computer. However, I don’t see that Wolff’s views are all that radical. It might seem so in the US, but elsedwhere it’s not that unusual. Some of it’s a bit over the top from where I stand on the political spectrum, so I can understand why Americans on the libertarian right would be calling for his head.

  • Not radical at all, Stan – just that lots of people simply react to tags such a socialism, etc., so I just took an extra precaution.

  • STM – actually I was wrong. The market was 800 points down for the week without the so called “computer glitch” theory.

    I did answer your question – Australia’s central bank has raised rates which is what the Fed should have done here. They are doing somewhat better because their money costs closer to what it is worth. Plus, I believe for the most part that the difficulties they faced were on account of our issues. And they are not free and clear yet. When other dominos fall – Portugal, Spain, U.S. no one will be spared. that is the way things work today.

  • Mark,

    porductive is supplying the market with a good or service it requires.

  • Here’s a link to another video, Stan, far more extensive and it shouldn’t present any problems for your PC.

    BTW, it should be a required viewing for all the bleeding heart liberals (Handy and Glenn come to mind) as well as libertarians such as Dave Nalle or KJ.

    I’d be ready to answer all questions as regards Wolff’s historical account of the present crisis – not necessarily his solutions.

  • Baro – I think Stan has done quite well at repudiating Kenn’s thesis.


  • Doug Hunter

    I don’t believe providing one counterexample disproves anything. Our economies are very complicated, government plays a role but so does culture, natural resources, history, location and geography, etc., etc.

    Greek government as a percent of GDP is 50.7% while Australia’s is 43.6%. There’s also the issue that developed economies can afford more benefits than undeveloped one’s. Your economy supports your welfare state, the Greek economy is not nearly as developed as Australia’s. The problem is that when you focus too much on the welfare state you can kill the engine that grows your economy with the end result being everyone worse off.

    Giving people a handout and a safety net is nice, but so is giving them a job (not only do they get the money but they pass it on by producing a good or service themself) building businesses that can employ them, investing in future technology and moving the world forward, creating capital goods and socking away wealth for more serious emergencies.

  • Mark

    Kenn, for any particular good or service, how does one decide if it is *required* by the market?

  • John Wilson

    Greece has rather modest welfare , pension and minimum wage rates, so it’s hard to see those as the culprits. But Greece does have a notorious reputation for failure to collect taxes, especially from the rich and powerful. Couple that with all the corruption inflicted on the government by those same rich and powerful people and the picture looks quite different.

    Greece shouldn’t be in the Euro. It limits their flexibility, especially by limiting inflation, which is the one thing that busts money loose from the grip of those rich and powerful crooks.

  • “the Greek economy is not nearly as developed as Australia’s.”

    Buy surely ours is, as developed as can be. Do you really think that we won’t experience the kind of unrest here, sooner or later?

    I do think that watching the Wolff’s video (see link on another thread) would benefit you Doug in expanding your point of view. Give it a shot.

  • Well, Mark – that’s rather simple. Let’s demythologize the very idea of markets.

    In the primary sense, it comes down to something as simple as “need.”

  • Les Slater

    STM – 24

    The trading error is just the excuse. The situation is much more serious.


  • Shows the fragility of it all.

  • Mark

    Rog, it’s heartening to see that you’ve come to accept the notion that capitalism’s crisis is based on the antagonistic relationship between those who own/control the means of production and those who produce things with them — the very class analysis that you previously dismissed as no longer relevant language.

    I think I’ll wait on Kenn’s response re market requirements.

  • Well, Mark, the class division(s) were camouflaged by the relative prosperity of the working class while it lasted; and the bourgeois values were bought lock, stock and barrel by “the middle class.” Just like their masters, they, too, were aspiring.a

    It’s a wake-up time now.

  • This seems to be an exceptionally good and humane idea:

    [T]he party’s elections manifesto will include calls for the introduction in Sweden of a six-hour workday with no loss of salary.

    A comparable plan might limit some of the protests in Greece, but only until someone suggests a four hour work day.

    How could a wretched wage slave, working eight hours per day, possibly enjoy the benefits to which he is entitled in a civilized country? Even to think of a monstrous eight hour work day is barbaric. A six hour work day is also too much, and a four hour work day is little better. How about a two hour work day, and five days off per week?

    Yeah, Sweden!


  • Mark

    Save us from workers reducing the amount of surplus value they provide to the owners.

  • I’ll let the liberals, such as Handy and Glenn, respond to your modest proposal.

    It seems like you’re retrenching, Dan Miller. Not a heartening thing to see.

  • Les Slater


    I’m retired. I actually miss working. I wouldn’t mind a 30 hour week.


  • Les,

    I’m retired as well. Still, I spend at least thirty hours per week surfing the web for stuff to write about and then writing about it. But then, we don’t have U.S. television and I can’t fall back on that.

    Oh well, such is life; or, as our dogs would say, “life’s a cat.”


    I’m not retrenching. I’m not even advancing to the rear.


  • Dan forgets that in the good ole times, when it was still possible, the average work week (to include all members of the family) has increased by at least 20 percent to make up for the stagnation in wages, while precisely the opposite trend was experienced in Europe.

    Shortly, we shall see Dan’s editorials degenerate to the level of our Archie (Bunker). In times past, Dan’s been able to express his views under the cover of legal niceties. But it sure looks like it’s no longer possible.

    Raw emotion is coming out.

  • I think you are, Dan, in spite of your protestations.

    Not that I hold it against you – natural order of things – as I’m becoming more and more radical. One’s got to know one’s enemies.
    BTW, excuse the biting nature of the penultimate comment. Nothing personal, just the usual Roger rhetoric.

  • Roger,

    Not at all. With even very little money, one can do constructive and enjoyable things.


    Ps: Thanks once again for the lucid, perceptive and, best of all, free, psychoanalysis.

  • Again, Dan, you’re dismissing what is a simple observation by whatever you mean by “psychoanalysis.” How convenient!

    It’s but a simple observation. In the past, you were able to hide behind “legal analysis.” You’ve come to realize that it will no longer hold water. Hence your resort to the language of the commons, the hoi poloi.

    In my book, I call it retrenching.

  • What I have not realized before, Dan, is how rabidly conservative you really were. Again, the legal language in which you used to cast most of your arguments did provide you with a kind of cover for your true feelings and emotions. That’s why I was fooled, because I’ve always believed you to be, at bottom, a reasonable person.

    But your last, rather sarcastic remark about fixing the situation – just let the workers work more and longer, and for the same stagnated wages – had really put you, in so far as I am concerned, in true light.

    So yes, you are approaching the Archie Bunker mentality for all you education and acumen. And your abandoning the “legal argument” to make your case means what I’ve just said: you are retrenching. And the cat is out of the bag.

  • Les Slater

    Rabidly conservative? Ain’t that an oxymoron? I can’t blame conservatives for being suspicious of some ‘solutions’.

  • Les Slater

    From another thread:

    Doug: “Can you compete with an equivalent factory in the 3rd world where the workers are going on $10 a day? (is it ethical to artificially prop up your $50K/year job in the face of a starving third worlder in that circumstance in the first place)”

    Me: “Good questions.”

  • Mark

    The question is how can workers here cooperate with those elsewhere to take control of the production process.

  • Thus far, we’ve still got too many disturbing influences – e.g., the ease with which you can make in the US via crime. The opportunities abound.

    No Les. There are some reasonable versions of conservatism – e.g., of Burke. But Dan showed his true colors.

  • Les Slater

    We do need to cooperate. This exposes the reactionary position of looking at solutions from a nationalistic perspective. In the U.S. we have to stop whining about ‘American jobs’.

    Foreign workers face the same system we do, and sometimes the same bosses. We need to fight these bosses here and solidarize with workers in other countries. We must choose our allies, and enemies, by class, not where they live or where they were born.

  • I used to believe in that, trying to reason with my ideological enemies. It doesn’t work.

    We may have to undergo another Reign of Terror – do away with the enemy of the people.

    Viva la Robespierre!

  • Mark

    (file under idle speculation:

    Les, likely such cooperation will be the only way to prevent the coming war — capitalists’ usual Hail Mary pass to get out of holes like this one. Let’s hope it works this time unlike prior international efforts.)

  • Just indulging my fancy, guys. It’s nice to dream.

  • Les Slater

    The U.S. working class will have demonstrate that it is a reliable ally to the rest of the world’s workers and farmers.

  • STM

    Kenn: “I did answer your question – Australia’s central bank has raised rates which is what the Fed should have done here. They are doing somewhat better because their money costs closer to what it is worth.”

    Yeah, but you can’t just raise rates willy-nilly. You have to have a reason to raise ’em.

    The only reason Australia’s central bank, the RBA, raised rates is because the Australia economy GREW during the GFC and continues to do so at a faster rate than any others.

    We are now growing back faster than most people would have liked and the bank is having to take these kinds of measures to contain underlying inflation.

    The question I asked was: How come a “socialist” country like Australia comes out of the GFC in the strongest position of all the developed countries, while Greece, with similar “social engineering”, goes down the pan. You say it’s all the fault of Greece’s welfare state, but if that were the case, surely Oz would have gone down the gurgler too.

    Clearly, your argument doesn’t hold water.

  • STM

    “Greece does have a notorious reputation for failure to collect taxes, especially from the rich and powerful. Couple that with all the corruption inflicted on the government by those same rich and powerful people and the picture looks quite different”.

    Ah, so it’s the fault of the right, Greek believers in trickle down economics but who haven’t actually let anything trickle down.

    So Kenn’s painting it as the greed of workers and socialist largesse, but the greed is elsewhere.

    Should have known that 🙂

  • STM

    Of course, it’s nothing new for the wealthy to want to enjoy all that the state can give them in terms of infrastructure and services – given that the state itself is thing that has allowed them to grow their wealth in the first place – but not to want to pay the same taxes proportionally as “the little man”.

    That’s not only in Greece. It’s a human condition in which the acquisition of vast amounts of money somehow makes people believe that different rules apply to them, even when those rules are relaxed somewhat to allow them to keep growing their wealth.

    Not that the acquisition of wealth should be an issue. The hugely wealthy provide jobs – unless, of course, they are in the finance industry, where profits are only made from moving money about (mostly to make a buck for themselves, rather than their clients).

    And with all the inherent dangers that can bring, as we are now seeing and experiencing.

  • STM

    Kenn writes: “wasteful because they entail taking resources from productive members of society and giving them to unproductive members of society.”

    That’s what the Nazis thought too, which is why they instituted a policy of forced euthanasia for “unproductive” members of society who were eating up the resources of the state; resources that could better have been used to prop up the master race.

    I won’t put you on that level Kenn because I know you’re not there, but you don’t do yourself any favours with that kind of argument because it doesn’t sound too far removed from the kind of “us and them” thinking of Nazi Germany … even if, and know it to be the case, you are not advocating anything that tradical.

    However, what do you propose to do with those “unproductive” members of society who are getting all their goodies from “productive” members.

    Starve, go on work gangs, what …. ?

  • STM #63 – the Nazi’s judged people on the basis of their ethnicity not work habits. It is a well known fact that capitalism is a merit based system – generally speaking you work you succeed. The productive should always be rewarded more because they keep the standard of living going for the rest of us. Would you even consider that the reason the USSR fell was because socialism made drunks and bums out of the Russian people. There was no incentive to work – a lot like the porn bureaucrats at the SEC while our crisis was unfolding. I haven’t heard that they were fired?

    #33 Producers know what the market requires because they are supplying goods and services that people are buying.

    People criticize the business class as greedy but they are the ones putting their necks on the line with their savings and novel ideas to start businesses. Then when they get big enough to influence the politicians like Obama they are able to extort welfare out of the government. This is wrong.

    #34 John What about Greece’s retirement age of 58? I think the government pays for that. Isn’t that ridiculous?

  • Les Slater

    Kenn – 64

    “Then when they get big enough to influence the politicians like Obama they are able to extort welfare out of the government. This is wrong.”

    I’m glad you see that there is a problem with some capitalists. The problem is more general than that though. If the problem were limited to just a few bad eggs it might be easier to get things corrected. But that’s not the case. All indications point to this being more systemic. If you look at the fallout from the Greek situation you can see that.

    So what’s the problem with Greece? Its sovereign debt has been downgraded to junk. What does this mean? The debt already acquired had been expected to be paid back handsomely. Where does this payback come from? It really comes out of the hides of working people. The bondholders are demanding that workers accept less of a social wage.

    The problem with Greece and many other countries, including the United States, is due to a serious economic crisis brought on by the capitalists themselves, not the working class. Why should we pay for their problems?

    What we see in Greece is class warfare with the capitalists escalating it to save their own sorry hides. The rest of the world is not far behind. This is a threat to all of us.


  • You’re on a roll today, Stan.

  • “Les, likely such cooperation will be the only way to prevent the coming war — capitalists’ usual Hail Mary pass to get out of holes like this one. Let’s hope it works this time unlike prior international efforts.)”

    Great point, Mark – but how to achieve it? It’s got to go beyond showing support but have some tangible effects on the economy. Can something be done by way of changing our consumer patters? That’s the first thing that comes to mind.

    There are additional problems peculiar to America – e.g., one of building solidarity across different cultural and ethnic boundaries (blacks and whites, e.g.) as well as between those who are still employed and the growing underclass of the unemployed. This is complicated further by the welfare state which keeps most people barely above water, and thus sufficiently content to dissuade them from taking a vigorous kind of action.

    All economies (including the Chinese) are banking on a rebound – so that Americans keep on buying cheap Chinese products. Meanwhile, the Chinese keep on producing and their inventories stockpile to no end (it’s not a consumption society yet). (See extended Wolff’s lecture linked to earlier).

    Which suggests a possible strategy: a kind of moratorium on consumer spending to bring capitalism to its knees.

    Just some random thoughts.

  • Excuse rather biting remarks, DM. I should have known better – namely that you were being facetious; I should have responded in the same spirit;

    Anyways, as to your last link, 7K is still a lot of money for me. If I had it, it would have put it to better use and move back to California rather than being stuck in this God forsaken place.

  • Les,

    #65 the crisis was “brought on by the capitalists themselves, not the working class. Why should we pay for their problems?”

    We agree to the extent that we shouldn’t pay for the problems caused by the corporatist. But, first of all there is not a real capitalist system in the U.S. The hot shots that gambled with our money and lost are/were crony capitalists. Their cronies are the politicians and the Federal Reserve. Why?, because they are the ones through low interest rates, fractional reserve banking, stimulus and other spending schemes that gave them our money to lose in the first place. So while you leftists bemoan the evils of capitalism, we libertarians bemoan the evils of the state. I don’t think any statist is willing to say the government is at fault in the crisis because that would shatter your world view of the state’s omnipotence. You will say that the state deregulated and this was the cause. Of course this allows you to maintain that capitalism is evil and needs big brother to watch over it.

    The government is the prime culprit in this crisis because the central planers at the Fed kept rates artificially low for too long, Fannie and Freddie guaranteed all the bad debt and things unwound. Government’s answer was to do the same exact thing that got us into this mess – more easy credit and government spending. The stock market is the next bubble. Last week’s crash is nothing compared to what we are going to see. And you know what, the big bankers will make their fortune and get out just in time before the crash. Mark my words.

  • To extent the discussion of cooperation and building alliances between workers – as per #67 and the preceding comments as per Mark and Les – here’s a link to an interesting article by one of our own writers, Lynette Yetter.

    Also check our comment #6 by Lynette on the above thread for references to her earlier article on BC on Kropotkin’s work, Mutual Aid, available online in full – for both reading and download.

    The little I have read through this book today, though outdated in many ways, it still provides a great many examples of how people help one another in old village communities even today – perhaps best represented in Swiss types of village communities and/or communes. The last three chapters still make to a pertinent reading even after the passage of one hundred years.

  • “Of course this allows you to maintain that capitalism is evil and needs big brother to watch over it.”

    That’s neither Les’s nor Mark’s position. And speaking for myself, I’m also beginning to gravitate to their way of thinking.

    If you were a bit more mindful and read the very first comment that Les has posted on this very thread, you wouldn’t make that remark. So you either ignored or or simply think Les didn’t really mean what he said.

  • Les Slater

    Kenn, why would you think I favor big government?

  • Les, if I was presumptuous I apologize, but with your criticisms of captialism and use of the term “working class” you come across as Marxist and thus a proponent of big government.

  • Les Slater

    And why would you think a Marxist would favor a big government?

  • A Marxist favors a big government at least initially to confiscate the means of production from the capitalists. In Marxist theory, once that happens than the proletariat takes control and there is no need for government because everyone lives in harmony.

  • Les Slater


    A Marxist favors organizing the working class and its allies to take power and then to govern. Governing does not necessarily require an excessively large apparatus. Marxists would favor the most efficient (small) apparatus possible.


  • What I have not realized before, Dan, is how rabidly conservative you really were.

    See, Roger, there are very nice people among the rabidly conservative…er proponents of the capitalist machine. Dan held some advanced legal military position doing court-martials, I think. (I may be wrong about the exact position. No matter. It’s the impression I got that I am trying to get across.) He didn’t renounce his work or similar work by others as being based on possession by the devil. He thinkss that torture is something that needs to be legally defined to be either torture or wrong. [And btw Dan(Miller) you never did get around to addressing the legal argument I made about that. ;-)…and how is Spencer, anyway? What about H2G2?]

    A perfect example of how even people who believe in torture can be the nicest guys!

  • 70 Roger,

    I think you would appreciate this article: Kropotkin was no crackpot – Stephen Jay Gould

    Source:1997. Kropotkin was no crackpot. Natural History 106 (June): 12-21;
    Transcribed: for marxists.org in May, 2002.

  • Thanks, Cindy. Interesting. Gould is one of the leading paleontologists.

  • Cindy, the article you just cited is a gem. It should be required reading for all social theorists, including Marxists. In fact, it even connects nicely with a piece Les referred to lately in the Science Magazine.

    I’m going to cross-reference it to Lynette’s article, if you don’t mind.

  • John Wilson

    Kenn: “Would you even consider that the reason the USSR fell was because socialism made drunks and bums out of the Russian people

    As a casual student of Russian literature, I must note that Russians were famous drunks before the commies came, and they are drunks now with communism gone and wildly free markets in Russia.

  • STM

    Kenn: “Would you even consider that the reason the USSR fell was because socialism made drunks and bums out of the Russian people.”

    No, I wouldn’t. I was there in the early 80s working. There were some very clever people in the Soviet Union. It was because they lived under totalitarian rule that was
    so far from the kind of “socialism” you ascribe to Europe as to be almost unrecognisable in comparison.

    Stalinism and communism isn’t “socialism”.

    And no, the Nazis didn’t only get rid of people based on their ethnicity.

    They also got rid of unproductive members of society … the disabled, the chronically ill, those with differing political views etc.

    Glad you’re notr teaching history to my kids.

  • I have a feeling, Stan, that John Wilson’s suggestion to Kenn was a bait.

    It’s meant to equal the fictional character of Kenn’s own sober account.

  • John Wilson

    IIRC, alcoholism is the number one cause of death in the New Russia, operating under a form of neo-capitalism that libertarians can only envy.

  • I’m certain that Les and Mark will be glad to hear it. For it will give communism a new lease on life.

    Now, the only thing left to explain now is the Maoist China.

  • Franco

    We hard-hearted small-government guys are damned as selfish types who care nothing for the general welfare. A false assertion put forth by a loony left that fantisizes about utopia, with dose not exist.

    But, as the Greek protests make plain, nothing makes an individual more selfish than the socially equitable communitarianism of big government: Once on the dole and enjoying the fruits of government general welfare benefits, health care, government-paid vacation, government-funded early retirement, and all the rest, he couldn’t give a hoot about the general welfare and societal interest; he’s got his, and to hell with everyone else.

    People’s sense of entitlement endures long after it can be sustained even when it is robbing the general welfare of his future citizens. And, if it bankrupts the entire state a generation from now, who cares as long as they keep the checks coming until I croak?

    So much for the claim against the hard-hearted small-government guys. The liberal left is nothing but a cesspool of hypocrites lacking all accountability because their theories of entitlements have none becauee the are on loony concepts of utopia.

    There is no utopia, there is only sound and reasoned reality on monetary principles. Money is time made tangible — the time invested in the earning of it. Taxation is the confiscation of the earner’s time. Although some taxation is necessary, all taxation diminishes freedom because is takes away the time spent by the earner.

    There are only 4 ways in with to spend money.

    1. You can spend your own money on yourself.
    2. You can spend your own money on others.
    3. You can spend other people’s money on yourself
    4. You can spend other people’s money on other people.

    The problem with socialism is that eventually you run out of other people’s money.

    You liberal socialist types can twist it, bend it, spin it all you want. But the fact remains, Greece has run out of other peoples money.

  • Franco

    4 – Les Slater

    Greece is a test case. That government has been told to make the working class pay for a crisis brought on by the capitalists and their system.

    Absolute bull shit! Greece was choking itself to death long before the market went south and all the wile the free market economy was doing well. It was easy for Greece to hide this fact under such market conditions. Only when the market went south due to big government cronyism with special interest pushing high risks loads which the government knew were highly profitable and allowed to banks to repackage and sell on the worlds markets, that all finally blew up in all there faces. It was then that Greece was left with no more market cover to hide its ongoing terminal decease.

    And brother it’s got one.

  • Doug Hunter

    Franco, you have a wrongheaded understanding. Wanting to keep your own money is greed, wanting a handout of someone else’s money is… cough… altruism. There’s much talk of moral superiority on the left but look back through the threads, you’ll find many or most of them bitching about how much or little the government has personally redistributed their family’s way at one time or another. The truth slips out once in awhile.

  • Dan

    Franco, sound analysis.

    Also, the European union came together as a way to amp up economic power, and instead they get to share in the inevitable result of the Greecian socialist experiment.

    Just like States in the US will need to bail out California eventually. When that day comes, clueless leftists will insist that it is a crisis brought on by the capitalists and their system.

  • STM

    Wanting to keep your own money is perfectly reasonable and the reason why out-and-out socialism is an absolute crock … but not wanting to pay the proportionate amount of taxes compared to everyone else IS greed, no matter which way you look at it.

    Tax breaks should always be offered to the wealthy, especially if they’re providing jobs, goods and service for others, or buying investment property that is then rented out to provide decent accommodation for others.

    Beyond that, it’s just down to the level of tax-dodging and loophole-hunting and leaves the burden of tax payment on the “little man”.

    I’m putting my money where my mouth is here. Because I live in one of the world’s most expensive cities, I earn quite a lot of money in American terms; but like everywhere, plenty of others don’t. I’m not struggling paying a 40 per cent-plus tax rate, but I know people who are struggling week-to-week to pay tax at a rate of around 25-30 per cent or less. What’s left of my earnings at the end of the week buys me a heck of lot more than the paypacket of the person on $50,000 a year – or less- paying the lower tax rates.

    But I don’t want to live in a society where the gap between rich and poor, comfortable and struggling, polarises opinion to the point where it becomes: “I’m all right Jack, keep your hands off my stack”.

    That is the American disease. What everyone misses here is that it’s governments not small government to the point of near-anarchy that provide the means to grow (legal) wealth in the first place by providing stable, healthy, wealthy socities that facilitate that.

    Like I say, the wealthy tend to live in stable, comfortable, democratic societies that have allowed them to grow their wealth in the first place.

    They are happy to use the all the services and infrastructure provided by the state to keep growing their wealth, but don’t want to give back their fair share.

    That’s greed in anyone’s book.

    And there is no reason why governments should not protect the rights of workers with decent wages, holidays and working conditions when it’s been demonsrtated over and over, ad infinitum, that many employers simply can’t be trusted to to do the right thing.

    Failure to recognise that loyal, happy and well-paid workers are the key to greater productivity and better profits is a fault of far too many employers who see the bottom line as their only yardstick.

    And often, let’s say in the case of a big corporation that moves all its call centres offshore, the marginal profit difference is outweighed by the lack of goodwill and the inefficiencies.

  • Franco,

    You are like the cavalry coming to the rescue of the good guys (small government – non-confiscatory) in a sea of big government do-gooders bent on half-truths, misconceptions, and a philosophy that rivals the actions of Marx, and FDR. Your analysis is sound and timeless.

  • STM

    Kenn: “to the rescue of the good guys”.

    Lol. Well, that’s a matter of opinion. Is that moral-value judgment an objective one, or a subjective one, Kenn?

    It’s certainly not everyone’s opinion, especially when it comes to you and this warped, outside-the-mainstream, unworkable right-wing ideology that almost seeks a return to near anarchy, Kenn.

    Your main problem as I see it (and I’m sure I’m not alone): No real understanding of current affairs and history and their relation to politics beyond how it might support your doomed amd outdated arguments in favour of an ideology only marginally to the left of Attila the Hun and Genghis Khan, a failure to appreciate that what might have worked 200 years ago (when Americans’ preferred headgear was the coonskin cap and knee-pants were in vogue) no longer applies in the 21st century and is partly the reason for both America’s rise in the early-20th century and America’s current demise in the 21st century and the constant mistaking of “community” for the dreaded “socialism”.

    In the battle of subjective vs objective in this debate, subjective being your own opinion of your own fallacious arguments and objective being the ability to sort shit from clay, you lose.

    Nothing’s black and white, either. I notice you like to name-call and lump everyone whose views are to the left of yours (even if those views are centrist) as left-wing and “liberal”, when that is not always the case.

    But then I wouldn’t expect you to be able to tell the difference.

    Which is why I’ll re-iterate: I’m glad you’re not teaching history to my kids.

    Because when I see a headline about Greece that attempts to compare it to America’s situation in the wake of the GFC and applied to a political stance like that of the Democrats, which might even be to the right of the right anywhere else else in the developed world, or statements that liken Marx to FDR, I know you don’t really have a clue on this.

    Or at least on anything that would hold up to sensible analysis.

  • STM

    Having said that, of course, Kenn, I’m a great believer in people being allowed to have opinions that differ markedly from mine. Doesn’t mean I have to think they’re right, though …

  • Doug Hunter

    STM, you’ve got some fine points there and sound quite reasonable to me. I come from a position of having started and ran small businesses or been self employed most of my working life and I’ve never considered taxes to have been much of a barrier. You won’t find me arguing against them much on here, probably find me suggesting they be marginally raised and spending slashed simultaneously to avoid the looming government debt crisis.

    As for your #93, I agree. I also appreciate variations of opinion between countries. I don’t want to turn the US into Canada or Australia or Germany (although those are fine places). If I was enamored with another system so much I wouldn’t be afraid at all to move there. Alot of what our “progressives” here want is already enacted in Canada, yet year after year many more people vote with their feet to move from Canada to the US than the other way around. Apparently our system, as flawed as it is, has something that is attractive to people besides government benefits.

  • Mark

    In 2001 Greece led the EU in the rate of growth of labor productivity. Looked to be a sound investment. Now it lags behind. What happened, and how does this relate to their present situation? Is deflation ala Latvia and Ireland the only way to restore ‘international competitiveness’ and make the investors whole(ish)?

  • Mark

    Kenn, I’m a producer and doubt that you and I would agree on what the market requires to enable me to produce and market my wares.

    Doug #88, what a crock.

  • Mark

    Rog, if I may propose some focus for your reading of Kropotkin:

    Darwin and his followers are most interested in competition and its effect on species change. Kropotkin focused on cooperation and its impact on species preservation.


    Does K make the argument (or produce observations that support) that cooperation can generates species change?

    For any given species is there a way to clearly distinguish cooperation from competition?

    “Happily enough, competition is not the rule either in the animal world or in mankind. It is limited among animals to exceptional periods, and natural selection finds better fields for its activity.” Kropotkin Mutual Aid

    What ‘exceptional period’ are we humans in that so reinforces competition?

  • Doug Hunter

    #96 Care to elaborate? I didn’t see much to argue with. I’m not going to call out individuals if that’s where you’re going.

  • Les Slater

    Mark – 97

    “Does K make the argument (or produce observations that support) that cooperation can generate species change?”

    It’s been a bad week for me. I just found out that maybe 4 percent of my genes are that of a Neanderthal. I wonder to what extent, if any of those genes have been expressed. I’ve been called many things over the years, Neanderthal among them.

    Anyway, I recall reading elsewhere that at least one of the reasons that the ‘modern human’ displaced the Neanderthal was the characteristic of social cooperation.

  • Mark

    Doug, I’ve been reading BCers for a while and can’t come up with examples of the self-serving bitching that you claim. Perhaps some anonymous ‘poor me, the government doesn’t give me enough’ quotes would help.

  • Mark

    …Les, I, too, am told that I’m only a partial human.

  • Les Slater

    It was the last paragraph that was my response to your 97.

  • Mark

    I realize that, Les.

    I’m trying to determine how far down that road K went in his writing.

  • Mark

    (…Doug, re my #100, I just read some comments on the band-aid thread that force me to eat crow.


  • Mark

    I will not argue over what you read into my comment.

    I sympathize with your husband and fully expect to face similar choices myself.

  • Righto … Doug deserves the moniker for trying to put me, Les or Mark in the same category as the commenters on the Bandaid thread. And for that reason alone, he’s a prick galore. These characters give progressive thinking a bad name.

    There, I fixed that for you, Mark.

  • #99, Les

    It was the audio, Les, from the Science Magazine. I’ll post a transcript on the next thread.

  • I meant the next post, and here it is:

    “Science Magazine Podcast”.

    For the relevant part of the discussion, start with page 8. It features the idea of copying and learning in a social, cooperative envirnoment as the most likely hypothesis for the evolvement of the homo sapiens (as opposed to an earlier-discussed, “working memory” hypothesis.

  • Franco: There are only 4 ways in with to spend money.

    1. You can spend your own money on yourself.
    2. You can spend your own money on others.
    3. You can spend other people’s money on yourself
    4. You can spend other people’s money on other people.

    Ah. This is the fundamental error with the sort of argument Kenn and Franco espouse. The four options Franco lists are only valid if we assume that humanity operates as six billion completely individual and autonomous economies.

    In reality, it’s not an either/or choice. Tax revenue – which is the money we’re talking about here – is neither “your own” nor “other people’s” money. It’s both.

  • John Wilson

    Actually, it is the rightists who are Big Government supporters. Whether looked at empirically (Reagan and Bush both increased government size and spending tremendously) or theoretically (Capitalism requires huge armies to defend against external enemies seeking to loot it, or against internal organizations like unions).

    Capitalism is like Feudalism in requiring strongarms to take tax and tribute from citizens to build it’s armies and prisons.

    It’s a contradiction to be a capitalist and to favor small government.

  • While fielding your questions about K, let me take an indirect approach, as I’m re-reading Gould’s article on K.

    1) Gould points out the peculiarity (or parochalism) of Darwin’s “species surivival” metaphor, as more leaning towards competition than co-operation (in light, say, of Darwin’s limited experience, e.g., when you consider the density and the lack of resources in Great Britain. But K’s experience(s) were altogether different, if say Siberia is the territory under consideration – in that the struggle is more against the environment (thus, calling for co-operation) rather than vs. the competing members of the same species fighting for limited resources. Here, the species survivial, as a group or a community, takes precedence.

    In short, another particularistic/parochial view: and the lesson is, don’t universalize from limited experience.

    2) Gould makes a valid point about K’s misunderstanding of Darwinism, and I quote:

    “He [K] did commit a common conceptual error in failing to recognize that natural selection is an argument about the advantages to individual organisms, however they may struggle. The result of struggle for existence may be cooperation rather than competition, but mutual aid must benefit individual organisms in Darwin’s world of explanation. Kropotkin sometimes speaks of mutual aid as selected for the benefit of entire population of species – a concept foreign to classic Darwinian logic (where organisms work, albeit unconsciously, for their own benefit in terms of genes passed to future generations). But Kropotkin also (and often) recognized that selection for mutual aid directly benefits each individual in its own struggle for personal success. Thus, if Kropotkin did not grasp the full implication of Darwin’s basic argument, he did include the ortodox solution as his primary justification for mutual aid.”

    I believe the crux of your question is applicable to point #2. In the following, I’ll try to address it, as well as other implications of your remark(s).

  • “Happily enough, competition is not the rule either in the animal world or in mankind. It is limited among animals to exceptional periods, and natural selection finds better fields for its activity.” Kropotkin Mutual Aid

    What ‘exceptional period’ are we humans in that so reinforces competition?


    Two ways of looking at it. On the one hand, national interests and the alleged scarcity of natural resources (oil, in particular) are some of the features which argue for “an exceptional period.” Thus, the underlying competition for those resources between, say, the US and China (although co-operation on another level is also a prerequisite on other counts: e.g., China’s is an export economy and it depends on the American consumer to unload its goods; so yes, in some respect, the line of demarcation between sheer competition and sheer cooperation is exaggerated and blurred; or we might speak of respect in which we cooperate and respects in which we compete).

    But to move on to another scenario, one could take a global perspective in that the very scarcity of natural resources should be an incentive enough for all nations to come together and unite in a common cause of coming up with alternative energy sources. Just as we all do when we’re confronted with natural disasters.

    Again, one might argue that the technological advances of humankind had made it possible to turn away from the struggle with the environoment (because we conquered it) and towards competition. And yet, on the other hand, every day we’re being reminded that our technological knowhow may not suffice to ward off the caprices of nature – whether by way of hurricanes, tsunamis, earthquakes, and man’s own hubris (the recent oil spill, the collapsing of the mines, etcetera).

  • (1) Regarding above post, it looks like Robert Heillbroner’s classic, An Inquiry into the Human Prospect, is still a relevant text. (Heillbroner puts in question human ability to respond.)

    (2) “Does K make the argument (or produce observations that support) that cooperation can generates species change?”

    I’m not certain. I’d rather take Could’s view that “there are no shortcuts to moral insight. Nature is not intrinsically anything that can offer comfort or solace in human terms . . . . The answers to moral dilemmas are not lying out there, waiting to be discovered. They reside, like the kingdom of God, within us – the most difficult and inaccessible spot for any discovery or consensus.”

    It may sound like a cop-out but I don’t see it that way. I think it would be a greater cop-out to argue either one way or the other – i.e., using Darwinian theory in support of either position. For however enlightened the position one would care to argue for, the two opponents are committed to the same (IMO) faulty methodology when it comes to justification.

    I’m aware this position is not quite in accord with the principles of pragmatism (e.g., Dewey, Rorty) – in that the truths we espouse are in need of justification (and that they’re only as good as the justification we are capable to muster in support of our propositional claims/attitude. But I’m still not completely cured to the point of abandoning the idealist position – in that a relevant distinction can be made for morality as something (at times at least) quite diffent from mere prudence – and from arguing from morality’s standpoint.

    In short, I’m still more comfortable with a transcendental/aesthetic argument.

  • STM

    Doug, I hold the opposite view when it comes to govcernments legislating to protect the vulnerable (that is any worker or employee, really, no matter the size of their paypacket), because from the time I started work in the early 1970s, those protections have been in place in my workplace through legislation enacted in parliament.

    I believe it is why Australia is such a good place to live – it’s a workers’ paradise that recognises there can’t be one without the input of proivate industry and free-market economy. Governments, unions and employers have all worked out that everyone can share a little more of the profits, pay extra wages and trade things off for increases in productivity, and everyone wins.

    That is why the standard of living is so high in this country. The GDP is currently ahead of the US, as is the living stabdard overall. We’ve proved you can do it.

    Just for the record, it’s not a one-way street. It’s not unions and employees jumping up and down trying to stiff employers, or vice-versa. The trade offs on one side are matched by the trade offs on the other.

    My own example:

    I’ve always had seven weeks a year paid annual leave (with a 17 per cent leave bonus added, which is pretty standard here for shiftworkers) since I began working in the business I work in. That’s over 35 years ago now.

    Most employees in Australia get four-to-five weeks a year, which is still a lot in American terms and probably matches or betters what’s on offer in most of western Europe.

    The reason I get the extra two weeks: I work public holidays and weekends, so it’s in recognition that six-day weeks, long hours and giving up Christmas lunch with my family needs to be compensated.

    Now, someone like Kenn would likely just see: seven weeks a year paind annual leave – disgraceful, money-grubbing, stiffing the employer … etc.

    But there are two sides to every story. I believe Christmas Day this year falls on a Saturday, and I’ll be working a 14-hour day.

    Over both the Easter and Anzac Day weekends (a four-day holiday followed by a three-day holiday), I worked every day of those holiday breaks. Some weeks I will work 10 days straight without a break because that is how my rostering falls.

    I believe because of the hours I work I deserve penalty rates for nights and weekends built in to my pay, and the seven weeks a year leave (which in reality doesn’t really make up for the public holidays I miss. As you can see, I’ve missed a half dozen in the two examples above). The government also believes it because it has legislated for those protections in a commitment to workplace employer/employee abitration in special industrial courts going back over 100 years. Yes, 100 years – nothing like having the convict gene in your determination not to get stiffed!

    I’m sure my employers like it too: For what they pay me, I work my tits off for them – and I enjoy it because I also love what I do. They also get the benefit of a happy, loyal, experienced and hardworking employee whose expertise (gained through that employer over a long career, it must be said) benefits only them.

    Nothing’s black and white; and nothing should be looked at only through the cultural insularity of your own experience, because things that are different can work, and do.

    Just because it wasn’t invented in America doesn’t mean a) It won’t work, or b) It’s not better.

  • Cindy, Les and Mark:

    Here is another link to earlier discussion on co-operation, Buber’s classic, Paths in Utopia.

    There’s a special chapter on Kropotkin.

    I’m not certain if Miranda Joseph’s work considers Buber’s particular take – haven’t gotten that far – but just in case . . .

  • “Doug, I’ve been reading BCers for a while and can’t come up with examples of the self-serving bitching that you claim. Perhaps some anonymous ‘poor me, the government doesn’t give me enough’ quotes would help.”

    “…re my #100, I just read some comments on the band-aid thread that force me to eat crow.”

    I’m reading something into that? Your insensitivity is just my imagination?

    My husband is not interested in your hollow well wishes. His wish would be that people who actually cared about him would treat his stressed out wife who has to comfort him when he awakes at night terrified and gasping for breath–kindly.

    Please spare me the projection about what you expect. Your imagination doesn’t even come close to the reality of watching the person you love most die every day in front of your eyes.

    I know you don’t do emotions well so I’ll shut up and spare you the soap opera.

  • Oh, and just for the record…my husband paid in plenty for his ‘social security insurance’…no hand outs are expected. What is demanded is what is owed!

  • Cindy,

    Sent you an email.

  • “What is demanded is what is owed.”

    Not according to Franco. They have a name for that. They call it “entitlements.”

  • Mark

    Cindy, there’s nothing incongruous about those on the left arguing from points of self-interest, and, yes, BCers do often turn to complaints about the poor to damaging delivery of government support — as the bandaid thread shows. I was foolish to pick up on the emotionalism of Doug’s statement and challenge him in kind on this point in the first place (as he warned me).

    I can see how I should have been more thorough in my comment and why it offended you. Sorry.

  • Mark

    Rog, thanks for the your observations on Kropotkin; it’ll take me a bit to go through them.

  • Cindy is under impression that your remarks were directed specifically at her.

    I tried to persuade her otherwise, but I wasn’t successful.

  • Mark

    I didn’t transition to the comment at all — I can see why she feels that way.

  • I knew it wasn’t so. She made association because of the timing. Your comment referenced Glenn, if I read it right.

    So at least this one thing is settled, thank goodness.

  • Mark

    I was talking about all on that thread who refer to how government services are impacting them. The point is that my response to Doug ought to have been that of course individuals on the left, even the most altruistic, are motivated by personal interest as well.

  • I understand.

  • Franco


    You are doing a courageous thing. I have been there and what you are going through can be beyond words. You are doing a wonderful job just hanging in there. What you give of yourself now in this time of trial, will be what you remember most in the years ahead and for the rest of your life. You are a great wife. Stay the course because you can.

  • Les, Mark and Cindy,

    Interesting discussion today on BBC World Update betwee Ian Martin (Deputy, Wall Street Journal) and Clifford Longley, on the subject of Greece and EU with respect to the bailout. (It’s an audio, couldn’t get the transcript, and the relevant section runs from about 14 minutes into the podcast to 22:40.)

    It brings up an interesting set of terms and conflicting strategies, posed on one hand by the “moral hazard” theory and that of “the common good” on the other.

    It’s definitely a must-listen, and I shall elaborate in the following post(s).

  • First, the “moral hazard” concept, as per the following Wiki article.

    Next, a conservative rendition of the concept from Cato institute, “Moral Hazard and the Financial Crisis,” a pdf file.

    Next, a liberal version by Lawrence Summers, “Beware moral hazard fundamentalists,” a Financial Times article (2007).

    Last, check out the link to an article cited in #128.

    In the following post, I’ll do a brief sketch of the “moral hazard” concept.

  • Let’s start with a disclaimer, and I’m citing here from the last paragraph in Wiki (see the first mentioned link in the above post):

    History of the term

    According to research by Dembe and Boden,[14] the term dates back to the 1600s, and was widely used by English insurance companies by the late 1800s. Early usage of the term carried negative connotations, implying fraud or immoral behavior (usually on the part of an insured party). Dembe and Boden point out, however, that prominent mathematicians studying decision making in the 1700s used “moral” to mean “subjective”, which may cloud the true ethical significance in the term.[15]

    The concept of moral hazard was the subject of renewed study by economists in the 1960s, and at the time did not imply immoral behavior or fraud; rather, economists use the term to describe inefficiencies that can occur when risks are displaced, rather than on the ethics or morals of the involved parties.


    Disclaimer notwithstanding, I find it interesting that the economists and proponents of the laissez faire would characterize economic behavior as regards risk-taking and “information asymmetry” (see the second paragraph of the Wiki article), in terms of ethics. In some sense, it is of course justifiable, but I’m trying to get at a deeper meaning – one which equates responsible economic behavior with moral behavior. To wit, whereas the Bastiat’s schema of trying to equate sound economic behavior with God’s (or natural)laws no longer served as a viable argument, mainly due to the secularization of the society, what I see here is a similar kind of move, this time making the equation between sound economic practices and morals, and therefore an attempt to justify the existing economic structures and the resulting practices by appeal to some other, “higher” standard and higher authority. The parameters have changed by not the motivation or the nature of the appeal. Franco should be happy to know that the ghost of Bastiat has been reinstated and still haunts us to this very day.

    So to end this post, I submit that however appropriate the term “moral hazard” may seem in the technical sense of the word, to describe actions and policies which might lead to, and result in, “irresponsible” economic behavior, there are deeper philosophical undertones, and we should be aware of the language that is being employed.

    I’ll continue in the next post.

  • With misgivings, I offer the following exposition of the “common good” concept by Clifford Longley, an apologist for the Roman Catholic church and it’s supposedly “progressive” stand against capitalism, and the other participant in the BBC program. The only good thing about it, it’s a short pdf file.

    In the following, I’ll try to summarize. I can’t help to notice, though, that it’s unfortunate that the state of the dialogue of restricted to these, equally unpalatable positions.

  • STM

    I believe that a large number of global hedge funds stand to lose zillions after engaging in bets – cause that’s what they really are – over whether Greece would default on its debt obligations.

    The old “credit default swap”, a bet between two parties over whether a third party will fail to pay its debts. Another one of Wall Street’s bizarre “products”, and one of its least transparent – often a little game played by those in the know to make money for themselves. Wealth made from shuffling money around isn’t really wealth at all … it’s the fleeting appearance of wealth.

    Some folks on the street and their London mates over the pond doing the same stuff in The City now stand to do their dough.

    Couldn’t happen to a nicer bunch of people. Worse, though, I can’t believe after all the drama of the past few years that financiers are still farting about with things like credit default swaps and packaging these things up and sprinkling them with golden fairy dust then spruiking and selling them as investments.

    Anyone in that business worth their salt would have known how risky that bet was, given there was always a huge chance the EU would bail out Greece and extend support to Spain and Portugal should it become necessary. The EU wasn’t going to let its own stocks down by letting Greece fall. Not in a million years.

    Just more madness of the kind that took us down the gurgler in the place.

    When will the US and Britain legislate for prudential regulation to cut the chance of another GFC?

    Sooner rather than later would be a good idea, as this latest nonsense shows.

  • I believe that a large number of global hedge funds stand to lose zillions after engaging in bets – cause that’s what they really are

    LOL. Reminds me of that time a decade or two ago in the Old Dart when there was talk about liberalising the casino laws and the Church of England decided it was going to come down hard against gambling.

    Someone must have quietly reminded them that they were just about THE biggest player on the London stock market at that time, because they dropped the campaign pretty quickly.

  • Stan is right in #133.

    Re: the bailout of Greece, Martin Wolf says “it is overtly a rescue of Greece, but covertly a bail-out of banks.” (as per article linked to in #128)

  • Addendum to Buber’s Paths in Utopia:

    Communal Life: an international perspective, a compendium of essays.

  • Mark, Cindy,

    Fascinating lectures/essays in the above-linked collection.

  • Roger,

    The addendum to the essays by Buber proves that the kibbutzniks, as I asserted, did not know who they were. They thought to be world revolutionaries. What they were was the developer of the economy of Israel. The “revolutionary” goals were not the important issue. What would have been truly revolutionary would have been to spread the concept of collective ownership of private enterprises throughout the country.

  • Interesting point, Ruvy. Still, bear in mind the collection dates back to late ’80s. The issues of national security didn’t loom as large as they do today.

  • Roger, the point of syndicalist socialism was or is or will be to build a society that is equitable, but where firms compete in an open market – giving the spark for innovation needed to make a nation progress.

    National security and defense are susceptible to being improved to a degree by syndicalist socialism, but in and of themselves are not relevant to the concept at all.

  • My point simply was that the notion of spreading the kibutzim idea to a society at large could proceed only in a relatively peaceful national environment, not when the very existence of a nation-state was under constant threat.

  • blue monkey

    Greece and Spain won’t pay back. This was a calculated Risk, and a Lesson for the Banking System. What is happening in Greece, is a very well orchestrated show, to get granted €110bn aid, to avert meltdown. A new deception compared with the old Trojan Horse. The only thing Germans can do is:
    REPOSSESS 170 Leopard 2AEX Battle Tanks from Greece, and 190 Leopard 2A6E Battle Tanks from Spain.
    U.S.A must REPOSSESS 170 F-16 Jet Fighters from Greece, … the rest is gone with the wind …forever …
    Greece must stop paying lucrative pensions with borrowed money, reform the free health care system, and cut down, 4 times the military budged.
    Greece’s problem is too much debt. Greece has a budget deficit of 12.7% of GDP ” meaning that the country is spending 12.7% more than the value of one year’s economic output.
    Greece is no different to a serial credit card borrower who can’t pay back his loans. But just like a serial credit card borrower, as long as Greece keeps relying on borrowed money to fund itself, the problem won’t go away. It will just get worse.
    But don’t worry; the ECB, the Fed or both will print the money.
    And all of us will share the pain, with our hard-earned money.
    Bad is never good until worse happens.

  • blue monkey

    Greece and Spain won’t pay back. This was a calculated Risk, and a Lesson for the Banking System. What is happening in Greece, is a very well orchestrated show, to get granted €110bn aid, to avert meltdown. A new deception compared with the old Trojan Horse.
    Greece must stop paying lucrative pensions with borrowed money, reform the free health care system, and cut down, 4 times the military budged.
    Greece’s problem is too much debt. Greece has a budget deficit of 12.7% of GDP – meaning that the country is spending 12.7% more than the value of one year’s economic output. But just like a serial credit card borrower, as long as Greece keeps relying on borrowed money to fund itself, the problem won’t go away. It will just get worse.
    But don’t worry; the ECB, the Fed or both will print the money. And all of us will share the pain, with our hard-earned money.
    Bad is never good until worse happens.

  • STM

    I don’t think the Fed has anything to do with it. The Euro is still a stronger currency than the US dollar. They run their own finances, separate from those of the US … although global markets means everything is tied im

    The real risk is to the EU, not to the US … at leasr as much as Fredie Mae and Whosa what’s ee Mac impacted global financial markets.

    They didn’t … that was Wall St packaging up dodgy mortgages (from lots of different lenders) and sprinkling wthem with AAA rated golden fairy dust and flogging them off as sound investments, thus exposing governments and private investors and bamks all over the world to the most toxic levels of debt ever seen..

    This is something different. The EU is not broke, by a long shot.

    Greece won’t fail, nor will the Iberian nations and Italy.

    They might struggle for a whil;e, but there is nothing new about counytries running huge deficits.

    The US currently owes China many, many, many, thousands of trillions of dollars.

  • Les Slater

    Greece has spread to Portugal, Spain, all of Europe, Asia and to the U.S.

  • economical hitman

    I am tired from all this corruption in Greece in which totally all Greeks took part with many ways such as begging the politicians to hire their kids on a job without any kind of exams; by voting corrupted politicians; by not paying their tax (all Greeks steal the tax office); by going on strikes every day (usually people who were hired with political means for a period of time go on strike in order to blackmail the goverment to make their contract permamnent!) etc. Greece has been destroyed because of its 1.5 million (most of them lazy) public servants who (most of them) were hired with political means and also the doverment paid million of euros for their high wages and pensions! Most of these public servants have a permnent job! Also many of them are corrupted and in Greece you need many times to bribe the corrupted public servants with money in an envelope, the ”fakelaki”, in order to finish your job faster. Finally Greece has been destroyed by the labor union leaders that not only are paid for their job, but also all belong to certain political parties and fulfil political interests (many of them become politicians and ministers). My unkle says that Greece is the most wonderful country, but is inhabited by the worst people in the world (the neo- greeks in english: nova – greeks!).