We have several folks here that enjoy discussing economics, so I made this thread to compile a discussion. The point of the thread will be for discussion of theories, facts, and fallacies. This thread is also about learning for those interested, so if you have any questions, feel free to ask.

Topics to discuss;

1. Current economic events
2. Up to date statistics and data
3. Historical trends and data
4. Policies and their impact
5. Facts and fallacies
6. Theory
7. Specific economists
8. Specific markets
9. Court rulings pertaining to economics

Rules;

*This is not a political debate thread. The discussion of politics should be limited to how politics influences economics and specific policies. This is not a Trump vs Biden thread, but rather policy vs policy.

*Discussions should be nuanced. Generalizations will be prompted for details and elaboration.

*Marxist and socialist theories should be discussed with the thought in mind that they are not economics, but rather social theories. Any of these theories or their conclusions being presented as fact will be called out unless they can be proven with historical evidence, along with pertinent information about their consequences to different groups. Observations by, and about, the originators are fine.

*If you want to change someone’s mind, refrain from insults, instead, make your case with evidence and have a discussion about it. If there is no reconciliation, then move on.

First few comments will be reserved (hopefully) to outline some of my initial thoughts and also great books to read and social media resources, like podcasts, YouTube channels etc. If you have any to recommend, let me know and I can add them to the list.

Good books (shorter reads);

Economics in One Lesson- Henry Hazlit
Economic Facts and Fallacies- Thomas Sowell
Theory and History-Ludwig Von Mises and Murray Rothbard
Capitalism and Freedom-Milton Friedman
Free to Choose-Milton Friedman
Early Austrian Economics-Israel Kirzner
The Anointed-Thomas Sowell
The White Pill- Michael Malice
For a New Liberty-Rothbard
Anatomy of the State-Rothbard
Myth of the Robber Barons- Robert Folsom


Complete Works and Principles

Basic Economics- Thomas Sowell
Human Action-Ludwig Von Mises
Socialism-Ludwig Von Mises
Wealth of Nations-Adam Smith
Theory of Moral Sentiments-Adam Smith
Marxism-Thomas Sowell

Historical Documentations on Post Modernism;

Gulag Archipelago-Aleksandr Solzhenitsyn
Road to Serfdom-FA Hayek

Full history of Capitalism and Socialism. This comes straight from the creators of economic theory and the early republics. Greece, Rome, Mises, Hayek, Friedman, and Smith. If you haven’t read these authors, then this will seem foreign because of how molested economics has become.

Capitalism

Capitalism refers to a system that pertains to the private individual and his or her privately owned business, and is free from the public sector. Key words; Private Individual.

Socialism

A dialectical theory and philosophy of a society and its economy. In political and economic terms, socialism is public control and/or ownership over the means of production.

Socialism pertains to the public sector. The public sector includes collectives and the State. For example, Any business that contains a collective of owners is socialist. Any money going to a business, individual, or group, from the State, is socialism. Unions are a collective of laborers, therefore it is socialism. Key Words; Public, Group, collective, and State.

Fascism

A form of socialism that seeks to gain control over the means of production, with a greater emphasis on political advancement. Whereas Socialism is more vague and varying in the methods of reaching a designated end, Fascism has specific policies laid out by its creators. Examples include minimum wage laws, heavy taxation on profits, syndicalism, and absolute government control of industries. Managers appointed by the government run the businesses and act as agents for the government.


Austrian economics

Austrian economics is not a theory, but rather the study of economics in practice, using logic and reason to understand the actions of individuals in an economy; a priori reasoning and praxeology. Originally developed by Carl Menger, and later solidified and expanded upon by Ludwig Von Mises.

Syndicalism

Syndicalism is a movement that advocates direct action by the working class to abolish the capitalist order and establish a social order based on workers organized in production units.

Syndicalism is socialism, but it is fundamental to Fascism. This is part of what makes the cartel of Government and Unions dangerous and must be clearly separated.

Spending categories in monetary policy

Milton Friedman outlined categories of spending that helps us better observe how we spend money. Each category has been shown to influence groups and individuals differently and can gives us some insight in to self interest, and even corruption.

category 1: spending your own money on yourself.
Category 2: spending your own money on someone else.
Category 3: spending someone else’s money on yourself.
Category 4: spending someone else’s money on someone else

A good example of Cat 4 would be legislators voting to spend tax payer dollars. An example of cat 3 is how individuals spend money from the government, like stimulus and welfare checks.

A quick glance at GDP and why its a bad indicator of economic vitality.

The broken glass fallacy is one that tries to explain that if a boy throws a ball and breaks a store’s glass window, his actions have lead to economic growth, because now the glassier will be paid to replace the window. This fallacy disregards the fact that the store owner needed to buy a pair of shoes, and now he cannot because he has to repair the broken window. This didn’t cause economic growth, it merely cause a diversion in demand and needs.

GDP is effected by politics. Government spending can increase GDP, but it’s at the detriment of other economic needs and demands. Right now is a perfect example because of the wars being fought. So inflation is up, which means taxes are way up, and that money is being used for products of war. This creates a diversion in the economy from one product or service to another. An individual may have needed to buy a pair of shoes, but instead cannot because they wouldn’t have enough money to put food on the table. That extra money is now being diverted to the military industrial complex instead of things individuals need. So GDP is up, but it’s at the expense of real economic demand. This is why we feel poor, but GDP makes it look like we should be doing much better.


Jobs numbers.

It’s important to understand job numbers. Some jobs are part time, some are temporary, some individuals are working more than one job, and lastly, it helps us understand who is working. What are the demographics of individuals and groups working? If the number of youth working is going down, and the number of seniors working is going up, this is an indication of economic trouble.

We must also take into consideration, if the government created these temporary jobs, what jobs were potentially lost. The same workers could've potentially had other jobs that were more permanent, in markets that had demand, and not at the expense of the taxpayer, to build a bridge that wasn't even necessary or needed.

Lastly, government jobs do not build wealth, because they are paid for through taxation. Another words, economically speaking, even though it is shown as a job created, it is not wealth creation, and therefore is irrelevant to economic growth

The business cycle

Mises referred to this as the Boom-Bust cycle. Many economists and financial experts believe the business cycle is a naturally occurring phenomenon. Mises, however, discovered it was caused by government interference. Maynard Keynes originally proposed the idea of stimulating the economy for growth, but at the time, he was not aware that this artificial growth would result in a recession, or correction. The cycle looks like this Government interference —>Boom —> Bad investing based on artificial growth —>bust —> Liquidation. Individuals in the economy make investments believing that the boom is a natural phenomenon. Their over confidence on the artificial indicators tells them to invest in booming markets. Then the stimulus runs its course, the markets crash, and they lose all of their investments, forcing them to liquidate.

Hayek was good friends with Keynes and spoke with him regularly about these ideas. Unfortunately Keynes died before he saw the affects of his theory play out, preventing him from making adjustments or scrapping it altogether. Hayek believed that Keynes would have scrapped the idea once he saw the correction cycle of his theory. Today, many politicians still use Keynesian economics, as we have seen many times now with subsidies, stimulus packages, etc.

Can i borrow $20 please?

3. Declining profit share of labour

OP what do you think are the underlying drivers of the declining returns to labour and what should the workers do about it?

Automation falls under the category of technical augmentation, which improves labour productivity.

The question is not about absolute labour productivity anyway, it’s about the profit share

i suspect unchecked, unregulated capitalism is the bane of existence

not that other radical ideologies aren't, but.

discuss

So what should the workers do about it?

You’re asking a pretty in depth question, and I assume with motive, considering your previous posts on labor party type socialism.

in it’s simplest form, wages are calculated by the cost of production minus price. Prices are controlled by supply and demand, and what the consumer is willing to pay. If price goes too high, the consumer will simply go somewhere else.

From the worker’s perspective, all he or she sees is the cost of living rising, and wages not keeping up. To understand what is happening, we take a broader look at the economy. First, we have inflation. Inflation causes not only the cost of living to rise, but also the cost of production. Now consumers have less purchasing power, meaning, they could reach a breaking point of cutting costs and purchases of those products and services. This puts businesses in a tough position

When the cost of production goes up, there isn’t much, if any, wiggle room on wages because demand could go down, and cost of production went up, narrowing the cost/wage calculation. The only way to alot more in wages is to lay off, cut benefits, or become more efficient. In times of inflation, that might only be enough to cover the increase in the cost of production without pay raises. Efficiency can come from the labor (work harder or smarter), robots etc. The problem here is that businesses tend to stay as efficient as they can already, because efficiency means profits and competitive wages.

Then we have regulations, which increase the cost of production as well. The more regulations we have, the more the expenses. This also puts small businesses out of business because they can’t afford the regulations, as small businesses tend to lack the efficiency of larger, thus creating monopolies and less competition for everything, including wages. Second, over regulation causes the lobbyist, which is also a byproduct of monopoly.

Unfortunately, the biggest and most profound causes of wages not keeping up is government intervention through inflation, market manipulation, and regulations. Think about it; few regulations and little inflation means consumers (everyone) have more purchasing power, lower prices on everything, and lower cost of living, meaning, the wages will match the rest of the economy. So what do we do about it? Elect better politicians that will reduce their economic interference.

Ah. I see.

You don’t actually understand the concept of the profit share.

This is because you don’t have a basic understanding of economics, let alone labour market economics.

Carry on!

So that was the motive, to test me and if I didn’t answer like you wanted, I failed? Instead, you could have posted your thoughts instead of testing me. Feel free to actually contribute instead of using deception and entrapment.

BTW, that was a fast reply, indicating you didn’t read what I wrote.

Would it matter if they got 1% of the share if Americans are living better than they were in history? Nope.

please respond

Protectionism is an absolute failure. You must like higher priced items

Low IQ take. You must think 2008 was that.

how could it not be, banks giving out loans to people that they knew wouldn't be able to pay it back

and the pppl dumb enough to take it

the regulations that were put into place otherwise


i.e. sarbanes oxley act (not 2008 but former)

Economics is garbage. They will be producing their graphs and charts and hur dur GPD until everything falls apart again (which they won't see coming or understand) and then fck off to somewhere like ***** with a juicy bank balance whilst we are left eating slugs and pigeons and pooping in the streets.

He doesn’t understand the fact that I outlined why benefits get cut, and profit sharing are one of the benefits being cut over time as regulations and inflation increases. If costs are going up, there won’t be as much profit to share. The other option would be cutting another benefit, laying off, or cutting hourly wages, and giving bonuses instead.

I didn’t give him the exact answer he wanted, therefore I know nothing, but he failed to see the logic. This is why I put in my original post I didn’t want to get hung up on fascism, socialism, communism, or Marxism, just economics.

Why do people always say this?

There isn't a significant country on all of earth that has "unchecked, unregulated capitalism".

The US has tens of thousands of regulatory laws and rules around our capitalistic economic system. It's incredibly regulated.


Anytime someone repeats "unchecked capitalism" you can basically be assured they don't study economics and get their knowledge from forums.

I might have missed it somewhere, but is this comparing employees income to profit margin, or total overall profit?

Because those are two very different statements.

A companies profit in dollars can grow significantly over years, and their profit margin can shrink at the same time over those years. This is common, companies grow, they grow their customer base (higher frequency of sales) which means they'll often sell at smaller profit margins, so they may only make 5% profit margin on their product/service, but their overall profit in dollars increases as their volume increases.


If you were to measure employee income compared to overall profit, you'd see it go down, but if you compared it to profit margin it would paint a different story.

circa industrial revolution USA where child labor was the norm

sweat shops in china present day,

where did you get the idea i said today it is like that in the us or are you just imagining things

even within the last 20-30 years you have FTX, Enron, Worldcom, CEO of Binance pleading guilty to money laundering

Lol

The way you structure your sentences makes them difficult to read. Maybe read them outloud once or twice before posting. Genuine feedback, not trying to be rude there.


Also, I apologize, I thought you were suggesting that the world currently has "unchecked capitalism". It doesn't. If we agree there, we're all good.

i'm sleepy

Since you edited your post, I'll reply to your update.


People breaking the law doesn't not suggest that we have "unchecked, unregulated capitalism" either. In fact, ironically, it suggests the complete opposite.

They were breaking the economic laws we have, right? Doesn't that tell you that we have economic laws?


Think about it this way. Imagine if I said "this person was caught and arrested for speeding on the highway, we really need speed laws on that highway". That sentence doesn't make sense, right?


We have an absolute tons of checks, balances, and regulations on our economic structure in the US.

Concern would probably be that regulatory laws / standards may become more eased to be able to compete more effectively with emerging markets

Your reply isn't very clear.

Are you saying that you ARE concerned that regulations will ease? What is your concern?

Ability to compete globally, is that a good or bad thing to you?

Need a bit more context to actually reply.