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How To Bring Back Capitalism

Tyler Durden's picture


"Capitalists seem almost uninterested in Capitalism" is how Clayton Christensen describes the paradox of our recovery-less recovery. In an excellent NYTimes Op-ed, the father of the Innovator's Dilemma comments that "America today is in a macroeconomic paradox that we might call the capitalist’s dilemma."

Whatever happens on Election Day, Americans will keep asking the same question: When will this economy get better?


In many ways, the answer won’t depend on who wins on Tuesday. Anyone who says otherwise is overstating the power of the American president. But if the president doesn’t have the power to fix things, who does?


It’s not the Federal Reserve. The Fed has been injecting more and more capital into the economy because — at least in theory — capital fuels capitalism. And yet cash hoards in the billions are sitting unused on the pristine balance sheets of Fortune 500 corporations. Billions in capital is also sitting inert and uninvested at private equity funds.


Capitalists seem almost uninterested in capitalism, even as entrepreneurs eager to start companies find that they can’t get financing. Businesses and investors sound like the Ancient Mariner, who complained of “Water, water everywhere — nor any drop to drink.”

So businesses and investors are drowning in Fed-sponsored liquidity but are endowed with what he calls the Doctrine of New Finance - where short-termist profitability guides entrepreneurs away from investments that can create real economic growth.

... the Doctrine of New Finance is taught with increasingly religious zeal by economists, and at times even by business professors like me who have failed to challenge it...

His three forms of 'innovation' (empowering, sustaining, and efficiency)...

  • "empowering" innovations. These transform complicated and costly products available to a few into simpler, cheaper products available to the many.
  • "sustaining" innovations. These replace old products with new models.
  • "efficiency" innovations. These reduce the cost of making and distributing existing products and services.

Empowering innovations create jobs, because they require more and more people who can build, distribute, sell and service these products. Empowering investments also use capital — to expand capacity and to finance receivables and inventory.
Efficiency innovations also emancipate capital.

...typically operate in a recurring circle but in their current state, the dials of these three processes are forced incorrectly as "efficiency innovations are liberating capital, and... this capital is being reinvested into still more efficiency innovations" creating fewer empowering innovations.

Empowering innovations are essential for growth because they create new consumption. As long as empowering innovations create more jobs than efficiency innovations eliminate, and as long as the capital that efficiency innovations liberate is invested back into empowering innovations, we keep recessions at bay. The dials on these three innovations are sensitive.

Christensen perfectly analogizes our perspective when he notes:"It’s as if our leaders in Washington, all highly credentialed, are standing on a beach holding their fire hoses full open, pouring more capital into an ocean of capital."

We are trying to solve the wrong problem.

Our approach to higher education is exacerbating our problems.

Efficiency innovations often add workers with yesterday's skills to the ranks of the unemployed. Empowering innovations, in turn, often change the nature of jobs — creating jobs that can't be filled... our leaders are wasting education by shoveling out billions in Pell Grants and subsidized loans to students who graduate with skills and majors that employers cannot use.

There is a solution; it's complicated, but Christensen offers three ideas to seed the discussion:

CHANGE THE METRICS We can use capital with abandon now, because it’s abundant and cheap. But we can no longer waste education, subsidizing it in fields that offer few jobs. Optimizing return on capital will generate less growth than optimizing return on education.


CHANGE CAPITAL-GAINS TAX RATES Today, tax rates on personal income are progressive — they climb as we make more money. In contrast, there are only two tax rates on investment income. Income from investments that we hold for less than a year is taxed like personal income. But if we hold an investment for one day longer than 365, it is generally taxed at no more than 15 percent.


We should instead make capital gains regressive over time, based upon how long the capital is invested in a company. Taxes on short-term investments should continue to be taxed at personal income rates. But the rate should be reduced the longer the investment is held — so that, for example, tax rates on investments held for five years might be zero — and rates on investments held for eight years might be negative.


Federal tax receipts from capital gains comprise only a tiny percentage of all United States tax revenue. So the near-term impact on the budget will be minimal. But over the longer term, this policy change should have a positive impact on the federal deficit, from taxes paid by companies and their employees that make empowering innovations.


CHANGE THE POLITICS The major political parties are both wrong when it comes to taxing and distributing to the middle class the capital of the wealthiest 1 percent. It’s true that some of the richest Americans have been making money with money — investing in efficiency innovations rather than investing to create jobs. They are doing what their professors taught them to do, but times have changed.


If the I.R.S. taxes their wealth away and distributes it to everyone else, it still won’t help the economy. Without empowering products and services in our economy, most of this redistribution will be spent buying sustaining innovations — replacing consumption with consumption. We must give the wealthiest an incentive to invest for the long term. This can create growth. 


Must-Read The Full NY Times Story Here..


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Tue, 11/06/2012 - 12:29 | 2951985 NotApplicable
NotApplicable's picture

Capitalism entails risk. Rent seeking, however, is a fairly reliable income stream, once you're "in the club."

Tue, 11/06/2012 - 12:30 | 2951990 LawsofPhysics
LawsofPhysics's picture

Correct, in addition if you take the risk then you should suffer the consequences be them good or bad.  Leave the taxpayer and everyone else's wallet alone.

Tue, 11/06/2012 - 12:35 | 2952009 hedgeless_horseman
hedgeless_horseman's picture



It’s not the Federal Reserve. The Fed has been injecting more and more capital into the economy because — at least in theory — capital fuels capitalism.

Wrong.  The Fed has been injecting more Federal Reserve Notes [DEBT] and NOT more capital into the economy.

We need sound money, not monetization, for Capitalism to flourish.


Tue, 11/06/2012 - 12:37 | 2952011 Flakmeister
Flakmeister's picture

Cheap energy would make people forget that it is all bullshit anyway, gold standard or not....

Tue, 11/06/2012 - 12:39 | 2952018 Uncle Remus
Uncle Remus's picture

Oi. I saw that.

Tue, 11/06/2012 - 12:48 | 2952052 Comay Mierda
Comay Mierda's picture

<---- in a swing state, voted for Gary Johnson.  Because he will bring capitalism back. screw the repubs and their lip service to free markets.

Tue, 11/06/2012 - 12:53 | 2952076 JPM Hater001
JPM Hater001's picture

You mean like Thorium Reactors?  And it's plentiful stuff too.  I mined it all the time in Un'Goro Crater.  Just fly around the ridges the shits everywhere.

Tue, 11/06/2012 - 13:13 | 2952170 Flakmeister
Flakmeister's picture

Yep, gotta get my "Mr. Fission" adapter for the car...

You do realize that you are implying that EVs are the future?  

Tue, 11/06/2012 - 16:10 | 2952936 AldousHuxley
AldousHuxley's picture

capitalism is dead.


didnt' work. elites became corrupt. never implemented the pure ideals, but got hijacked by greedy middleman bankers who abused then blew up the system. Just like communism and how communist elites got rid of original academic ideas and just became thugs.


Today, we have thugs running the country. true capitalists  such as RON PAUL are silenced, eliminated, exploited just as a symbol.

Tue, 11/06/2012 - 16:53 | 2953079 silverserfer
silverserfer's picture

walmart as an example of corporate parasites will ensure that rural areas are alway economicly depressed. You can't have a healthy ecomony when money funnels out of an area.

you can argue that they are efficent capatalist entities but there is not balance or a healthy circulation of money within small communities once they are in. 

Tue, 11/06/2012 - 21:58 | 2953848 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

right.  because rural people enjoy paying twice the price you get--or not even having the choices you have.  


Wall-mart is merely a symptom of the cancer; not the cancer.

Wed, 11/07/2012 - 02:54 | 2954901 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

We are now the 'Native Americans.'

Trading Post w/ cheap goods makes natives stop hunting, trading, and providing for themselves and makes them dependent.

They even sell beads and booze.


Tue, 11/06/2012 - 13:24 | 2952219 LawsofPhysics
LawsofPhysics's picture

Remind me, how many cities are these reactors providing power for again?  Can't wait to drive my tractors on this power, in the meantime, 7+ billion people still want to eat and we still use diesel.

Tue, 11/06/2012 - 13:33 | 2952274 JPM Hater001
JPM Hater001's picture

In full disclosure the longest running holding I have is in a company called Hydrogenics when I bought it.  I've thought hydrogen was the next fuel for a very long time.

Tue, 11/06/2012 - 13:38 | 2952306 JPM Hater001
JPM Hater001's picture

Oh, and apparently one share in some on-line gambling company or something called Rounders.

My share isnt even worth a penny but it's up 10% today!

Wed, 11/07/2012 - 02:49 | 2954872 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

Penny stocks are just awesome.  Should do corporate takeover on this one.


Market Cap (M USD) 0.06

 "You can't beeeleiiive what fell,..all your dream...dashed. Hopes down the F@king drain. eeeye betit awll.." -Teddy KGB

dis sonofbitch....chek chek chek..all night..he trap me.

nyet...nyet..nyet.. did not archive Rounder Girls from their website.



Tue, 11/06/2012 - 14:06 | 2952410 LawsofPhysics
LawsofPhysics's picture

It takes energy in order to produce hydrogen gas.   Where does that energy come from?  Hydrogen will never be an energy source, however, on-site hydrogen production from the sun is coming and hydrogen gas (like coal or oil) certainly could be an energy currency some day.


Tue, 11/06/2012 - 16:15 | 2952955 AldousHuxley
AldousHuxley's picture

Plenty of energy sources available.

Not enough political will to overcome the status quo of Big OIL.


Tue, 11/06/2012 - 16:17 | 2952965 Flakmeister
Flakmeister's picture


Not nearly as simple as that....

Tue, 11/06/2012 - 18:03 | 2953304 LawsofPhysics
LawsofPhysics's picture

That's not the point.  Pay attention, if we have so many other energy sources then why the fuck would you use them to produce hydrogen?  Seems kind of stupid don't you think, just use the damn energy source as is.  The conversion to hydrogen will not be 100% efficient.

Wed, 11/07/2012 - 09:09 | 2955431 redd_green
redd_green's picture

It takes energy in order to produce oil.    Where does that energy come from...   


Heh, you blew your argument on the first sentence.

Tue, 11/06/2012 - 16:05 | 2952913 A Nanny Moose
A Nanny Moose's picture

lol @ Un'Goro crater.

Tue, 11/06/2012 - 12:40 | 2952024 lineskis
lineskis's picture

This can create growth.

"Growth" is actually a percentage growth rate, which is an exponential function, which unfortunately is unsustainable in our finite world:

Stop believing we need growth while it's the source of most of our problems... Think sustainability first and everyone will be better of... Please...

Tue, 11/06/2012 - 12:42 | 2952034 LawsofPhysics
LawsofPhysics's picture

Correct.  Have faith, history is very clear in one regard; that which cannot be sustained, won't be.

Tue, 11/06/2012 - 12:44 | 2952040 DaveyJones
DaveyJones's picture

how do we bring back the dead?

more dead?

Tue, 11/06/2012 - 12:49 | 2952056 LawsofPhysics
LawsofPhysics's picture

WTF?  You really believe those atoms aren't being recycled as we speak?  Try again.

Tue, 11/06/2012 - 12:52 | 2952067 DaveyJones
DaveyJones's picture

think you miss my point, we are on the same page

Tue, 11/06/2012 - 12:55 | 2952090 LawsofPhysics
LawsofPhysics's picture

perhaps, and yes, I guess more dead would indeed recycle more of these atoms faster.

Tue, 11/06/2012 - 13:02 | 2952127 DaveyJones
DaveyJones's picture

we should have had this chain on halloween

Tue, 11/06/2012 - 13:00 | 2952120 Spastica Rex
Spastica Rex's picture

Moving away from an exponential growth paradigm would entail a complete dismantling of the global stus quo. They will not go gentle into that good night.

Tue, 11/06/2012 - 13:12 | 2952164 Flakmeister
Flakmeister's picture

Really? Where is your sense of adventure?

Tue, 11/06/2012 - 13:16 | 2952178 Spastica Rex
Spastica Rex's picture

See my post below on warp drive.

Tue, 11/06/2012 - 13:53 | 2952364 pods
pods's picture

I see us going plaid before it is all over.


Tue, 11/06/2012 - 13:12 | 2952168 nofluer
nofluer's picture

Have you applied for a license from the UN to use the word "sustainability"? It belongs to them now, you know, and it doesn't mean what you might think it means.

Tue, 11/06/2012 - 13:32 | 2952259 sitenine
sitenine's picture

<-- Growth

<-- Sustainability

Which holds more promise for profit?  

See the problem?

Tue, 11/06/2012 - 14:09 | 2952318 Spastica Rex
Spastica Rex's picture

Is the devil really in the details? Really?

Please tell me it isn't so. I'm an American and nuance is lost on me.

Tue, 11/06/2012 - 14:36 | 2952526 Flakmeister
Flakmeister's picture

We saw that....

Tue, 11/06/2012 - 20:03 | 2953571 Radical Marijuana
Radical Marijuana's picture

Before commenting on the meaning of that buzz word, sustainability, some basics:

Capitalism was always an idealized "ism" that was another form of the biggest bullies' bullshit, to conceal what was happening. In the real world "capitalism" always had fraud and murder added to that idealistic "capitalism," to one degree or another. When fraud and murder are restrained, by more apparent rule of law, then those inside of that system, which are benefiting from being able to play their economic games, within that rule of law, tend to enjoy relatively more of the ideals of free market capitalism, which is then a relatively good system, for them.

However, there were always those who were more or less outside of that system, and therefore, were the victims of fraud and murder, and therefore, did not enjoy as much of the benefits of "free market capitalism."  E.g., the first immigrants to North America, who were here for more than 10,000 years before the European invasion of the last five Centuries, had almost everything taken from them by fraud and force. Similarly, those who were brought to North America as slaves started off inside of a context of fraudulent forces, and continued to largely still be in those social circumstances, even after the formalities of the changes in the laws were supposed to have freed them, or enabled them to become equal citizens, able to benefit from participating in the rule of law maintained "free market capitalism."

WHEN ONE ADDS MURDER AND FRAUD TO "CAPITALISM" THAT BECOMES FASCIST PLUTOCRACY. That is the real system, maintained by an overall Private Property Party, of which almost all other political parties are factions. There are deeper reasons for THAT, which were the history of militarism, since we live in a COMBINED money/murder system. Not addressing the REALITIES of murder and fraud within politics is always BULLSHIT, and that usually has an ulterior purpose. Almost all the discussions surrounding "freedom" and the "rule of law" deliberately ignore the paradoxes of enforcement in those contexts. They never answer Plato's question of "Who will guard the guardians?" ... because there are NO answers, other than the eventual back up systems of natural selection.

Anyway, with those basic social facts in mind, let me turn to the topic of "sustainability." I agree that endless exponential growth is absolutely impossible. The discovery of new sciences and technologies, and therefore, the ability to harness new inanimate energy sources, and utilize those, has enabled more exponential growth of the total human population, and all its activities. However, it continues to the theoretically IMPOSSIBLE for that to continue forever. Therefore, some human and industrial ecology MUST eventually evolve, even if that is mostly the hard way, through a dampening series of booms and busts, that finally develop mechanisms to maintain dynamic equilibria.

The central concepts of evolutionary ecology are that, after one has any life form, that can grow and reproduce, with a supply of natural resources from its environment, then the CENTRAL CONCEPT OF CONTROL IS THE DEATH CONTROL. ... Therefore, any discussion of "sustainability" is actually a discussion about the death controls. Those must be the central core of the evolving ecological system. The murder system is the keystone to any arch of alternatives, assembled into any integrated systems. The murder system is the lynch pin, that holds together everything else that operates in that system.

In the real world, that has ALREADY HAPPENED.  However, the history of militarism, or the Art of War, has been that success in war depended on deceits, and spies were the most important soldiers. Thus, the sublime paradox that the people who actually did the death controls were also the best at lying about that. Upon the historical foundation of the murder systems, as understood through militarism, evolved all the rest of civilization. Neolithic civilization emerged as the best at being dishonest, and backing that up with violence, and so, was able to spread out and conquer the whole world.  Upon the foundation of its murder system was made and maintained the money system. Thus, the debt controls depended upon the death controls. The history that made War King then made Fraud King. The current world is controlled by the Fraud Kings, who are the puppet masters, that control the puppet politicians, to operate the levers of state power, to use the abilities to rob and to kill to serve the interests of the fascist plutocracy. Any of the limited "free market capitalism" was always operating inside of that overall context.

Anyway, my point is that I agree that it is IMPOSSIBLE for there to continue to be endless exponential growth, and certainly NOT limitless exponential growth of indebtedness, which has been what the Fraud Kings have been doing for quite a while now ... which has driven the whole world deeper and deeper into debt, recently going beyond debt slavery, into debt insanity. Therefore, some new "sustainable" human and industrial ecologies must evolve, (although probably the hard ways.) The core to the concept of actual "sustainability" MUST be the murder system, doing the death controls, which then can sustain a money system, doing the debt controls, in ways that serve the dynamic equilibria of those new human and industrial ecologies (inside of their necessary context of some natural ecologies.) The PROBLEMS we face today are that the runaway triumphs of fraud and force, in the current money and murder systems, are based on the triumph of social deceits. Thus, all of the most important ideas are taboo topics.

I amuse myself thinking about the possible paradigm shifts in militarism, in the sense that warfare is the oldest and best developed social science, in order to try to understand how the paradigm shifting in other sciences could be reconciled into some "sustainable" system. However, for the foreseeable future, what I expect to actually happen is more overshooting, followed by more psychotic collapsing, which MIGHT eventually enable us to learn to develop better systems.

Tue, 11/06/2012 - 13:04 | 2952133 Herd Redirectio...
Herd Redirection Committee's picture

He forgot "Planned obsolescene innovations".  They reduce cost, reduce quality, and increase sales volume. 

Take socks and shoes for example.  How long does a pair of running shoes last these days?  About 3-6 months, tops!  So you're telling me in the 21st century we can't design and manufacture a longer lasting, higher quality shoe? Of course we can, but its not good for the bottom line!

Tue, 11/06/2012 - 13:55 | 2952369 pods
pods's picture

I curse planned obsolescence every time I pull apart a broken tool/machine and say to myself "Why'd they use this cheap ass plastic/pot metal gear when they know it would only last 6 months?"


Tue, 11/06/2012 - 14:20 | 2952468 Spastica Rex
Spastica Rex's picture

Why? So you can do your part for the economy and buy a new one!

Planned obsolescence is just a systematic way of breaking windows.

Tue, 11/06/2012 - 14:44 | 2952558 Flakmeister
Flakmeister's picture

And not nearly as much fun....

Tue, 11/06/2012 - 16:33 | 2953019 kaiserhoff
kaiserhoff's picture

I feel your pain.  My Dad didn't complain much, but he let loose a string of expletives when they started making sealed water pumps.  From years of repairing crap on the farms, he knew the thing would work just fine if you could open it up, and replace a five cent washer.

Tue, 11/06/2012 - 16:58 | 2953097 RockyRacoon
RockyRacoon's picture

It is amazing what stupid things they do with tools and equipment.  I had a Skil jigsaw for many years and one day it just up and quit -- in the middle of a project, of course.  Ran off and bought a new one.  The new one just didn't have the heft and quality of my old Skil.  Finished the project and had the time to take apart the old Skil.  Found that the lead from the switch was connected to the lead to the power cord with a wire nut!  A wire nut...   What genius figgered that all that vibration wouldn't cause the nut to just fall off?  It's a wonder I wasn't electrocuted since the case is all metal.  I soldered the leads and put some shrink tubing over the joint.  Perfect connection and the old Skil is back in service with new lube in the gears and other moving parts.   Idiots.  Now I have 2 jigsaws.  Betcha the old Skil will still outlast the new one.

Tue, 11/06/2012 - 18:56 | 2953426 DaveyJones
DaveyJones's picture

that's why I only buy high quality pot (and vote to legalize it)

Tue, 11/06/2012 - 22:45 | 2953466 TruthInSunshine
TruthInSunshine's picture

Planned obsolescence, bitchez, perfected by "Lightning Dock" Apple, Inc., and heartily approved by Paul "Make Them Replace Their Things More Often" Krugman, Ph.D, and all-around Douchebag.

Tue, 11/06/2012 - 13:07 | 2952142 Manthong
Manthong's picture

As important as anything else, it has to be understood that liberty implies capitalism, capitalism entails risk and risk occasion’s failure. Institutions and states that do not succeed because they forsake capitalism for some form of deception, despotism or collectivism must be allowed to fail so that the only system that assures personal freedom is preserved.

The government education system is structured and has evolved totally in opposition to this and subsequently so have the last several generations of Americans.  

The security of the system and the teachers displaces the education and awareness of the youth and with it their understanding of liberty and their disposition towards true freedom.

Sadly, it likely will not be until they lose everything and are indentured or otherwise in bondage that they understand what the country once had.

Tue, 11/06/2012 - 13:14 | 2952175 AnAnonymous
AnAnonymous's picture

What has to be understood is that this is an 'american' world and a US world order.

Tue, 11/06/2012 - 13:39 | 2952234 Manthong
Manthong's picture

Actually, it is a financialist elite world order using the American dollar until it every iota of implied value is wrung out of it and it is rejected in favor of the next proxy for the financial elite.

The significant issue is that liberty and free market capitalism are mere slogans now and that risk is virtually eliminated for the privileged few. 

Tue, 11/06/2012 - 14:45 | 2952567 MachoMan
MachoMan's picture

Why is it so difficult for people to acknowledge...  OUR PRESENT FORM OF CAPITALISM NECESSARILY ENTAILS DECEPTION, DESPOTISM, OR COLLECTIVISM.  If my profits are going to be eroded through competition, then I'm necessarily going to do whatever it takes to ensure competition doesn't happen including, but not limited to, imposing government barriers to entry.

It's a tightrope that humans cannot walk because it requires something more than fire and forget...  something more than apathy.  In fact, it requires constant vigilence.  Some level of government involvement is necessary to ensure that competition actually happens...  which plants the seed for the system's destruction.  Catch 22.

Tue, 11/06/2012 - 15:14 | 2952685 Spastica Rex
Spastica Rex's picture

There's that nuance again. Are you from France?

Tue, 11/06/2012 - 15:19 | 2952694 Helix6
Helix6's picture

OMG.  Someone actually gets it!  You obviously haven't been taking your kool-aid lately.

Tue, 11/06/2012 - 13:23 | 2952221 CH1
CH1's picture

Real capitalism is the ENEMY of systems; it shreds them. It will NEVER form (or be restored) inside a system.

Tue, 11/06/2012 - 16:35 | 2953026 kaiserhoff
kaiserhoff's picture

Creative destruction.  May it swallow the Lame Stream Media..., soon.

Tue, 11/06/2012 - 13:27 | 2952230 NewAmericaNow
NewAmericaNow's picture

Capitalism does not equal Free market in fact it's antithetical to it.

Tue, 11/06/2012 - 14:12 | 2952439 JOYFUL
JOYFUL's picture

Whoa....who let you in?  That's some kinda straight talking.....not what the punters are used to around here...but with that firm foundation of common sense, we can really go to town!

Not only is "Capitalism"(a two hundred year old myth that was invented on behalf of former tax-farming slavers and moneylenders trying to legitimize their illicit wealth) antithetical to 'free markets' 'free enterprise' and 'free people' livin free, but it embodies the antithesis of competition, innovation, creativity and productive use of resources too!

All "capitalists" dream of monopoly, all the time. On a long enough time line, they have come to enjoy monopolies of industry,by driving out competitors, political influence, through bribery, blackmail, or bullying, education, via buying enough academic stooges, and now of the media, through a combination of all of the above, and then using their monopoly to convince people of the absurb notion that the sequestering of idle capital in the hands of a rentier class of parasites is somehow the same thing as 'free enterprise.'

Just around the corner are waiting monopolies of food production and medicine, and then the vise will be truly closed, on free anything. That's capitalism...the authors' desire to 'bring it back' is like creating a 'mining company' designed to suppress metal prices or employing scientists to figure out how to bring back the plague\spanish flu...

wait, the've already done that!

Abajo al capitalismo! Vivan los mercados libres!

Tue, 11/06/2012 - 14:48 | 2952575 MachoMan
MachoMan's picture

True, but lack of government involvement leads to the same end.  What's the solution?

Tue, 11/06/2012 - 16:12 | 2952949 A Nanny Moose
A Nanny Moose's picture

You are essentially saying that lack of government leads to a government being established. There is no solution until we learn that force is universally wrong.

Tue, 11/06/2012 - 17:06 | 2953134 MachoMan
MachoMan's picture

Pretty much.  But, thus far in human history, force > logic...  Cycles within cycles...  nothing new under the sun. 

Tue, 11/06/2012 - 16:56 | 2953100 silverserfer
silverserfer's picture

Macho- skynet armies of robot religous police. like judge dread kind of police. but also kind like the police in saudi arabia. That would about fix it.

Tue, 11/06/2012 - 14:59 | 2952625 Manthong
Manthong's picture

Wait a minute… you’ve described the process by which free markets are destroyed and in which tyranny prevails.

That kind of financial despotism can only exist where free market forces are suppressed and innovation cannot create alternatives to destructive monopoly.

I don’t argue that we are headed there, but if we had conscientious stewards of the Constitution in charge for the last 100 years we would not be.

Tue, 11/06/2012 - 15:23 | 2952706 Helix6
Helix6's picture

Free market forces can be suppressed every bit as effectively by capitalists as  by government.

Tue, 11/06/2012 - 16:14 | 2952954 A Nanny Moose
A Nanny Moose's picture


Tue, 11/06/2012 - 17:13 | 2953161 MachoMan
MachoMan's picture

Cartels...  collusion...  price fixing...  murder...  blackmail...  intimidation...  et al.


Tue, 11/06/2012 - 21:44 | 2953787 Zero Govt
Zero Govt's picture

Joyful,  "All capitalists dream of monopoly, all the time."

How does a capitalist achieve a monopoly in a free market?

he can't, you cannot continually buy-off competitiors. You can only achieve a monopoly with outside funding and help, that institution is taxpayer funded Govt.

Look around you, you're swimming in fat cats chumping cigars in Big Oil, Big Healthcare, Big Pharma, Big Ulities, Big Auto Co's, Big Retail... shall i go on?

All financed by the protection racket and biggest monopolist in the economy, Govt, financed with taxpayers money, restricting planning/property, rules on exploration, safety, green garbage, etc etc and of course uts many extortiona rackets such as mandatory car and health insurance etc plus it's many public-private monopoly scams, education, road building, railways etc etc

Govt is the No.1 petre dish for growing cancerous monopoly cells that consumes the massive benefits of having a free competitive market

In a free market there are no rules. There are no Govt regulations to meet this or that stupid rule. Competitors have zero barriers to entry, zero costs foisted on them. They can jump into the market with new porductive or ultra efficient ideas anytime, any place anywhere

There are no fat cats in free markets because of that, they get fat they're toast. 

It is Jabba the Hut Govt and its regulations (strangulation of freedom, the freedom to compete freely) that leads to fat cat monopolists everywhere you look forcing garbage down our throats.

Please stop regurgitating garbage propaganda from your Monopolist Matrix Masters that's so easily taken apart and buried with a little thought of your own. You've been taught to believe and swallow, try thinking for yourself. Makes a hell of alot of difference in what you know  

Wed, 11/07/2012 - 00:51 | 2954436 JOYFUL
JOYFUL's picture

Zero, your well known antipathy to statism and statist apologists is creditable, and forces me to look beyond the arrogant swagger of your closing paragraph that would otherwise warrant the appropriate response.

If your fondness for the fantasy world of the 'free market' causes you to go apoplectic at any forensic analysis of it's fallacious foundation in the world of capitalism, perhaps you've simply become too attached to your favorite phrase, instead of staying loose n nimble by always pursuing fresh perspectives and free-style thinkin...

you seem a bit jaded and bitter...perhaps it's time to take the plunge and actually leave the system instead of just biting at other folks have no idea what I think, nor how I learned it or how I've employed it...

Look around you, you're swimming in fat cats chumping cigars in Big Oil, Big Healthcare, Big Pharma, Big Ulities, Big Auto Co's, Big Retail... shall i go on?

lol...when I look around me, I see anything but what you describe...cause I took the path of action and placed myself in a position to look into your matrix from the outside instead of from inside like your tired self....Obama's the bloodshed begins!

maybe it's time to take al little 'Joyride'\Richard Earnshaw(dub mix) - Viva Durruti, Makhno, y el Maestro Grandissimo - Cantillon! hasta la proxima amigo!

Tue, 11/06/2012 - 19:29 | 2953518 steelhead23
steelhead23's picture

I believe that the author is trying to incenivize innovative investing by structuring capital gains taxes in a manner that rewards such risky investment.  Hence, he is trying to create a tax structure that reduces membership in and the priveledges of "the club."

Tue, 11/06/2012 - 12:28 | 2951987 ZDRuX
ZDRuX's picture

How about we don't tax people at all and stop government stealing the money they've worked for? What a novel idea.

Tue, 11/06/2012 - 12:31 | 2951998 LawsofPhysics
LawsofPhysics's picture

How about we stop printing and stealing the value of people's labor? Any stable economy needs a stable unit of exchange.  History is pretty clear on what that is and what that means.

Novel concepts indeed.

Tue, 11/06/2012 - 12:42 | 2952030 Uncle Remus
Uncle Remus's picture

"[...] the value of people's labor"

Discussion of this topic almost never fails to bring out the "deer in the headlights" look.

Tue, 11/06/2012 - 12:51 | 2952049 LawsofPhysics
LawsofPhysics's picture

Every single system that has ignored the issue of value and stable mechanisms of exchange has been eventually destroyed as people lose faith and start dealing with on another directly.  Banks and politicians are middlemen and puppets of a corrupt few.  All these systems have been destroyed either from within or by another more efficient society.  Every single one, but I am sure that "this time is different" - FAIL.

It is what it is, all one can do is recognize the true evil and hedge accordingly.  Humanity has always been a ponzi and this has always been about the control of people and resources, period.

Tue, 11/06/2012 - 12:53 | 2952060 DaveyJones
DaveyJones's picture

hard to believe human beings would try to con other human beings

beyond all the math, the only thing that puts those oh, bad human qualities in check, is predictable, consistent, equivalent punishment. When the government won't do it, well, as you said, "history is pretty clear." 

Tue, 11/06/2012 - 17:55 | 2953287 UnpatrioticHoarder
UnpatrioticHoarder's picture

Correct, it is a mistake to confuse printed money with capital. Capital are savings, foregone consumption, that those who posses money may purchase. Printing money does not free up resources for use, it merely outbids those who were depending on them.

Tue, 11/06/2012 - 15:15 | 2952684 zerozulu
zerozulu's picture

Hang 200 or so capitalists to the street lamp. Capitalism will be back the next morning.

Tue, 11/06/2012 - 12:44 | 2951993 Precious
Precious's picture

The unfortunate problem with Christiansen is that he is an academic with little actual operational experience, but good at consulting and writing books that make everything seem easy, when it's not. In fact, he is way off, tossing around his theories of "innovation" like there is some secret sauce.  There is no secret sauce.  Innovation takes smart people.  It takes money.  It takes hard work. And it takes corporate leadership that actually cares about products and services. Steve Jobs was an example of an executive who cared about products and services.  Proof it works if the leadership actually has competence in the domain.  Most of the large US businesses that Christiansen discusses are MBA driven with little or no competence or experience in the relevant domain.  MBAs may have nice wallpaper, but 90% of their prefabricated ideas lead to America's failure in competiveness. You don't find new product breakthroughs by staring at financial spreadsheets or writing strategic plan powerpoints.

Consult Christiansen if you want to build an empire, publishing and consulting about business strategy and innovation.  He's a magician at that.

Tue, 11/06/2012 - 12:51 | 2952069 AnAnonymous
AnAnonymous's picture

Innovation takes smart people. It takes money. It takes hard work.


'Americans' lack nothing of those, so what?

Steve Jobs was an example of an executive who cared about products and services.

What kind of innovation?

Tue, 11/06/2012 - 13:24 | 2952224 nofluer
nofluer's picture

During my active accounting days I met and had to deal with lots of MBAs. Most of them thought they were smarter and more intelligent than folks like me with just BS degrees. I found nearly all of them to be dumber than cold dog shit when it came to the real world and how things really work.

I even knew a "professor" of business and economics who knew nothing about either. Maybe that's the problem with today's business world? The students are being taught by the ignorant?

Tue, 11/06/2012 - 13:41 | 2952314 ejmoosa
ejmoosa's picture

They are being taught by the very ones that seek to destroy the economic system in the US.

Tue, 11/06/2012 - 17:10 | 2953147 RockyRacoon
RockyRacoon's picture

I was in the remodeling business for many years.  When the client brought in their architect and designer I was gone.  The job was destined to go to pieces after the experts arrived.

Tue, 11/06/2012 - 12:31 | 2951997 Banjo
Banjo's picture

The basic problem is moving away from a winner takes all mentality.

Tue, 11/06/2012 - 13:44 | 2952323 sdmjake
sdmjake's picture

Well said...your ZH 'participation trophy' is in the mail!

Tue, 11/06/2012 - 12:32 | 2951999 PUD
PUD's picture

Only one thing has compound growth besides the lie that is economic "growth"...cancer cells. GDP is a compounding function...and a mathematical impossibility. The only rational word that should ever be used in an economic sense on a planet of 7 billion eating shitting souls is "sustainability"

Tue, 11/06/2012 - 12:38 | 2952021 Ratscam
Ratscam's picture

every child, student and grown up should have watched this 50 minute video.
Prof. Albert Bartlett on the exponential function.

Tue, 11/06/2012 - 13:52 | 2952338 nofluer
nofluer's picture

"Sustainability" has never been and is not now an issue. The ony reason it even is being considered applicable is the complete and near total lack of practical application of Jevon's Paradox. (If you STOP making things more efficient in the drive for growth, there would be no NEED for growth!)

ie continuous "growth" = Ouroboros. There is no other possible way to describe it.

Tue, 11/06/2012 - 14:27 | 2952493 adhoc99
adhoc99's picture

'Growth' just means improvement. I don't think we're anywhere the limits of what can be improved. And I'm presuming by 'sustainability' you mean someone deciding what's sustainable and limiting the activities of all based on that conclusion. True sustainability and identifying the limits of growth are achieved through pricing, allowing the phenomena of billions of individuals to express information through market prices to work. Using any other standard for sustainability means putting it in the hands of some authority. Never good. I don't understand where some of you guys are coming from, arguing for 'sustainability' and against 'growth'.

Tue, 11/06/2012 - 14:53 | 2952596 nofluer
nofluer's picture

Since we're on an economic forum, I presume "growth" means or at least implies escalating levels of income, producing escalating levels of wealth.

I do not consider "growth" to equal improvment. I've been "improving" lately - by losing 35 pounds. In this non-economic case, less weight = growth in terms of better health. So it would seem that when discussing the meanings of terms, context must be considered.


Tue, 11/06/2012 - 12:35 | 2952002 mvsjcl
mvsjcl's picture

Ummm...maybe they aren't Capitalists? I sure do see a lot of Monopolists roiling in from the financial horizon. Rough seas ahead if you are a Capitalist.

Tue, 11/06/2012 - 12:33 | 2952004 Shizzmoney
Shizzmoney's picture

"Serfdom" doesn't exist in true doesn't even exist in some forms of Socialism.

We clearly live in a NeoFeudal state.  But instead of serfs tending to mounds of farm land, they tend their mounds debt (cars/credit cards/mortgages).

Tue, 11/06/2012 - 12:38 | 2952017 mvsjcl
mvsjcl's picture

Yes. The "field" in which labor toils has changed, but the whip remains in the same hands.

Tue, 11/06/2012 - 12:34 | 2952006 Ricky Bobby
Ricky Bobby's picture

"The Fed has been injecting more and more capital into the economy " WTF  They have been injecting all right but it is not capital, morphine maybe but definitely not capital.

Tue, 11/06/2012 - 12:35 | 2952010 Flakmeister
Flakmeister's picture

Adam Smith noted that the rich, if given a windfall, will pursue a passive rentier path...

There in lies the answer, now connect the dots...

These guys did

Too bad a bunch of ideologically bankrupt guys dont....

Wed, 11/07/2012 - 01:31 | 2954669 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

Adam Smith was working under a totally different monetary system.

I think you might find this book really interesting.

It starts a little slow but give it a few pages.


Tue, 11/06/2012 - 12:41 | 2952012 Dr. Engali
Dr. Engali's picture

You want capitalism to return? My Three step program.



1)Allow failure to play it's much needed role in the system. Taking failure out of the equation allowes for wreckless risk and mis allocation of capital.

2) Prosecute corruption

3) Allow the markets to function freely so the investor can reap the rewards of their efforts. Don't let the government pick the winners and loser.


I'll throw in a bonus...Get rid of the fucking Fed.

Tue, 11/06/2012 - 12:43 | 2952038 cnmcdee
cnmcdee's picture

Bang on.

Tue, 11/06/2012 - 12:49 | 2952057 pragmatic hobo
pragmatic hobo's picture

... and what politician will allow failure to play-out on his/her watch? What politician will prosecute the hand that feed them? It certainly wasn't Obama and it definitely won't be Romney. And it does not look like any of the members of house/senate. There must be a fundamental change from the bottom up. Unfortunately the bottom is swimming in feces and does not even know it.

Tue, 11/06/2012 - 13:18 | 2952191 Herd Redirectio...
Herd Redirection Committee's picture

And a return to one set of laws, for EVERYONE.  Not the current system where any one who can afford a TEAM of lawyers is subject to different laws than the rest of us.

Tue, 11/06/2012 - 14:03 | 2952400 ejmoosa
ejmoosa's picture

And a return to one set of laws, for EVERYONE.


Worth repeating....

Tue, 11/06/2012 - 13:00 | 2952092 DaveyJones
DaveyJones's picture

well said, capitalism, real capitalism, is like most natural systems. Checks and balances, open competition, redundancy and resilency, flexibility, diversity...above all, no favorites. Problem, like everything else he does, man thinks he's the exception to the rule. Ironically, because he thinks he's the exception, he is the most vulnerable and self destructive.

Tue, 11/06/2012 - 13:43 | 2952322 ejmoosa
ejmoosa's picture

Limiting failure has lessened the value of success.



Tue, 11/06/2012 - 14:00 | 2952393 Dr. Engali
Dr. Engali's picture

I like that line. Mind if I borrow it? You might as well say no because I'm going to anyway :)

Tue, 11/06/2012 - 14:04 | 2952404 ejmoosa
ejmoosa's picture

No one owns the truth....

Tue, 11/06/2012 - 14:08 | 2952424 Dr. Engali
Dr. Engali's picture

I was thinking the same thing.

Tue, 11/06/2012 - 17:13 | 2953168 RockyRacoon
RockyRacoon's picture

It all started when dodge-ball was eliminated from the phys-ed classes at grade schools.  Remember that?  Those who were picked last were apparently irreparably damaged psychologically.  At least according to those who were the last-picked previously and became psychologists.

Tue, 11/06/2012 - 12:38 | 2952015 newworldorder
newworldorder's picture

Capitalism is difficult to implement for most. Competitive pressures being what they are its easier to go with a controlled or monopolistic model. Large global comporate entities and governments like this model better. They receive cheap tax/income streams, without having to go and ask the little people for money.

Tue, 11/06/2012 - 12:50 | 2952059 AnAnonymous
AnAnonymous's picture

The final goal of a competition is a monopoly.

'Americans' are so spoon fed with their professional sports staged scene that they hope to sell that the process of competiting can be sustained for ever, postponing for ever the election of the monopoly holder.

Alas, a competition process is tied to the resources consumed to support it. When the resource dry, so is competition and no matter what, competition is ended, providing its goal: an oligopoly or monopoly.

But with 'americans', the cure for any ailments is well known: it is always more 'americanism'

So yep...

Tue, 11/06/2012 - 12:40 | 2952027 SheepDog-One
SheepDog-One's picture

Who gives a shit about actually producing something when you can just sit back and get all the free money you want? Its OVER people, wake up!

Tue, 11/06/2012 - 12:47 | 2952051 insanelysane
insanelysane's picture

I agree!  The FED and ECB have broken the markets beyond repair.  If they stop it all collapses and if they continue it explodes.

Tue, 11/06/2012 - 12:42 | 2952031 cnmcdee
cnmcdee's picture

I do not agree with this ideological ideal and I will tell you why.

The three suggested methods do nothing to address redistribution of productivity to the masses.

Here is a better idea IMHO


If you are Wal-Mart controlling 60% of the retail market your income taxes are 60%.  If you are a mom and pop your income taxes are 0%.

Thus wealth creation is redistributed back to the individual where it should be, and there is no incentive for Walmart to adopt predatory practises squeezing and demolishing the little guy and this would hold true for all sectors of the economy.

Tue, 11/06/2012 - 13:09 | 2952155 CommunityStandard
CommunityStandard's picture

"address redistribution of productivity"

You used the R word.  Shame on you.

If Wal-Mart is successful because it can provide goods at the lowest the prices simply by being an effective business, then there's nothing wrong.  But if Wal-Mart is offering cheap goods because of depressed wages, then in true capitalism, people would not be able to afford to work there.  However, we have government programs subsidizing those incomes, keeping the failed model going.  In another example, if Wal-Mart is offering cheap and unhealthy food items, in true capitalism, people would grow obese and die off.  But with government subsidized healthcare, people can get expensive medical procedures to keep them alive and little electric chairs to help bring them back to buy more unhealthy food items.

Wal-Mart would not last in a true free-market environment.  The solution to the Wal-Mart problem is not more redistribution, but less.

Tue, 11/06/2012 - 13:30 | 2952253 AnAnonymous
AnAnonymous's picture

Ah, ah, that is a good one.

True as true.

JKC, 'americans' often rave about distortion in the market, forgetting to mention how warped their perception is by being pampered by the State and having stolen so much.

Tue, 11/06/2012 - 13:21 | 2952202 Matt
Matt's picture

An interesting concept; however, the amount of lawyers and beaurocrats that would be involved in constantly re-evaluating and redefining market share would rob the system until it collapsed, I think.

Tue, 11/06/2012 - 13:47 | 2952334 ejmoosa
ejmoosa's picture

You are responsible for your own production.  It's called labor, and does NOT need to be redistributed.

Quit demanding that someone else's production is confiscated for your benefit.

We have grown tired of that bs.


Tue, 11/06/2012 - 13:10 | 2952032 Zero Govt
Zero Govt's picture

Clayton Christensen is another economist re-arranging deckchairs on the Titanic while looking rearwards blind as a bat to the iceberg

he misses the simple, single biggest reason the economy is not recovering, that vast sucking sound in Washington called democratic Govt, better known to non-economists as The Parasite Club 

it's been sucking the life (wealth) out of productive peoples pockets for decades and strangling the life (with laws, regulations etc) out of free markets to enrich scumbag monopolists in every sector of the economy and 'tilt the game' entirely in favour of unproductive bwanking and fraud finance and away from productive enterpirse

How could he miss the BIGGEST ICEBERG in the economy????

another economist (village idiot)

Fuck Govt : economy sorted in 1 simple policy initiative

yes it is simple Christensen, you need to look-out for icebergs, not deckchairs ..Doh!

Tue, 11/06/2012 - 13:49 | 2952350 Precious
Precious's picture

Maybe Christiansen should start by fixing the New York Times.

Tue, 11/06/2012 - 19:05 | 2952697 Zero Govt
Zero Govt's picture

if he tried, and i doubt he'd succeed, he may grasp how little grasp he can have twiddling nobs in an office to change something as vast, complex and diverse as the economy

i think economists should show us how to run a hotdog stand before they meddle in anything else a bit bigger

Prof. Krugman, start frying some onions if you can even do that right you dipshit

Tue, 11/06/2012 - 12:55 | 2952035 Mercury
Mercury's picture

In many ways, the answer won’t depend on who wins on Tuesday. Anyone who says otherwise is overstating the power of the American president....

No, they're understating the intransigence of entrenched federal programs, cronyism, entitlements and authority.

Not to mention the fact that no amount of arm flapping by Wiley E. Presidente will keep the country aloft just over the cliff face.

Tue, 11/06/2012 - 12:57 | 2952101 SKY85hawk
SKY85hawk's picture

The stated problems are real, but  it's not just the President's fault!

Remember 1969 thru 1981?

Recall the politician's responses.

It was a time of Stagflation.

The 'Bob Hope" generation entered their 'spend less-save more' life stage.  YOUR Parents!

It should be clear that the baby-boom is now in the same life-stage.

Not one Politician will admit they are helpless to restart Economic Growth! 

They will wait this thing out, just like before.

We must demand cuts in wasteful/stupid Government spending, to match cuts in government revenue.

There are lots of things that America does right!  But, something has to change in the way politicians buy votes for 'favors'.

Tue, 11/06/2012 - 13:14 | 2952171 Mercury
Mercury's picture

I’m proud to say that I am too young and my parents too old to be baby boomers so I can disparage them with impunity!

Tue, 11/06/2012 - 14:13 | 2952441 nofluer
nofluer's picture

Cuts in Govt spending and taxes will not, DID not end stagflation. The sole instrument of restoring equilibrium was Volcker's hike of interest rates.

Why should I save ten, a hundred, a million dollars of my income? At present there is no incentive to do so. You hedge funders should be all over this!!!

Let the people with surplus SAVE it to provide CAPITAL for those who need it. Printing does NOT add capital to the system, or make capital available to those who would start/expand/improve businesses! Printing just chops available capital into smaller and smaller pieces while siphoning off some of it for government wastage.

Saving will not happen unless and until there is INCENTIVE for the saver to delay the consumption of the fruits of their labor. (aka INTEREST INCOME!)

If Obama/Romney wants a "RIGHTEOUS CYCLE" he needs to jack Berdumbkee up and hike interest rates, not drop them!!! In the present inflationary world, spending is the only rational use of excess income, NOT saving. To delay spending is to lose value.

Tue, 11/06/2012 - 17:18 | 2953180 RockyRacoon
RockyRacoon's picture

The sole instrument of restoring equilibrium was Volcker's hike of interest rates.

Don't confuse correlation with causation.  Interest rates should be determined by markets, not...  Well, you know.

Tue, 11/06/2012 - 13:13 | 2952109 Zero Govt
Zero Govt's picture

in 2,000+ years dating back to Greek economists these winbags have never added a stitch of productivity to the economy 

i'm still baffled even with the better economists like the Austrian School or Freidman et al that anyone rates their advise as worth a jot

There is no economy, it is a fantasy, like the average man statistic.

Let's dump the parasites of Govt and all their meddling arseholes and academic hangers-on and get back to minding our own businesses. The economy will fix itself faster than an economist can say truthfully, "I don't have a f'n clue what i'm waffling on about!"


Tue, 11/06/2012 - 13:18 | 2952194 Mercury
Mercury's picture

Well there is such a thing as incentives and incentives empirically do matter so, there is such a thing as economics at least to the extent that it is the study and/or sum of incentives and resulting behaviors.

Tue, 11/06/2012 - 13:31 | 2952217 Zero Govt
Zero Govt's picture

I disagree

if businesses are doing their job, wether it be a factory or a financier part-financing it, they're all pricing according to their own risks, the market (economy) takes care of itself with no incentives (someone else thinking they can direct your business better) are required

there is no need for anyone overseeing anything, just as nature has no oversight. And as is plain as day with all the meddling in interest rates and Forex etc etc it would be massively better if the meddlers fucked off out of it and left each market to adjust itself

the economy is pure fantasy, anyone thinking they can adjust or meddle with it, let alone understand its component parts, is a fantasist

even the best like Freidman and Adam Smith were hellucinating and should have minded their own business

Freedom is the only policy you need, all else is a bunch of tripe

Tue, 11/06/2012 - 13:46 | 2952315 Mercury
Mercury's picture

You are confusing too separate things. Incentive structures exist in systems where there is zero government, all-powerful government or any and every situation in between, just like gravity - which, by the way, you are incentivized to make accommodations for in any and all situations as well.

Tue, 11/06/2012 - 15:24 | 2952705 Zero Govt
Zero Govt's picture

oh my confusion, so explain an incentive structure in the market that we (well you) are talking about?

Tue, 11/06/2012 - 19:38 | 2953540 NidStyles
NidStyles's picture

Most Austrians are out working in the Free-Market advising businesses or writing books for aspiring new business owners to learn from. To say that they serve no function is to say that you can predict the future and know exactly what the economy needs. If there is no need for an economist, the markets will weed them out.


That good sir, is what an economist does, is tell you how things are. They get paid for understanding those things and advising people that have better things to do, like know how to make widgets of various sizes and uses. A good economist makes money teaching others outside of academia. A good example is Robert Murphy.

Tue, 11/06/2012 - 22:11 | 2953865 Zero Govt
Zero Govt's picture

nobody knows their business better than the owners/managers. Nobody knows their industry better than their suppliers. Most businesses are well aware of most things coming down the pipes at them before an economist would have a clue what hit him.

If I wanted to predict the Platinum price 2 years out i wouldn't ask an economist, i'd ask a hard nosed platinum trader. If i wanted my marketing skills sharpened i wouldn't use an economist I'd use an Ad agency or specialist firm in the field. All of whom would run rings around an economist and tie him in knots 3 times over

what does anybody need an economist (guru of a system so complex he can't even grasp it let alone predict it) for?

it's like asking what the average man (a statistical fantasy) wants to eat for breakfast next week

whatever Mr Murphy does good luck to him. There's plenty of market out there for quacks and faith healers. Banks and Govt seem to emply the most number of economists and management consultants and we can see what brilliance their advise reeps can't we? Broke and bankrupt, economic carnage everywhere and the 2 dumbest institutions on the planet by far

Proof is in the pudding, it's an old wives tale, but light years ahead of any advise an economist has ever come out with

Tue, 11/06/2012 - 22:34 | 2953916 NidStyles
NidStyles's picture

You are mistaking what an Economist actually does, with what you think an Economist actually does. If you have no use for one, then do not hire one. When you have a use for one, you will know it, and thusly seek one.

I'm not wasting my time getting dragged into a pissing contest with a guy that's been drinking vinegar.


You're on the wrong site if you do not think there is a need for Economists though.

Tue, 11/06/2012 - 13:48 | 2952343 ejmoosa
ejmoosa's picture

POTUS does have the power to destroy.  POTUS does not have the power to create.



Tue, 11/06/2012 - 19:09 | 2953257 Zero Govt
Zero Govt's picture

we've got a mini-outbreak of lefties and/or centralist meddlers and/or Statists on ZH today ejmoosa ....hopefully capitalisms Grim Reaper will take them out overnight in their sleep after he's finished killing them off in Greece



Tue, 11/06/2012 - 12:43 | 2952036 Mad Mohel
Mad Mohel's picture

If by Capitalism you mean getting raped by crooked gangsters and their bodyguard politicians, then I say let that shit rot in the abyss.

Tue, 11/06/2012 - 22:21 | 2953889 Zero Govt
Zero Govt's picture

there's a colossal difference between a businessman plying his trade in a free competitive market providing high value and/or high quality to consumers...

and a fat cat monopolist chumping a cigar shoving garbage down consumers throats who have no choice because Jabba the Hut Govt has regulated the competition (choice) out of the market

see monopolised Big Oil, Big Pharma, Big Banking, Big Car Co's, Big Retail, Big Telco's, BigUtility water, electricity and gas Co's  etc etc 

a free competitive market provides all scoieties basics needs, luxuries and comfort and provides the fastest change and progress

a monopolised market is a stagnant pool of sub-standard crap ripping off consumers who have no choice

see USSR car market (Trabant) versus Western European car market (200 models on infinitely better cars) over same period. That's your proxy for the difference between the two

Tue, 11/06/2012 - 12:45 | 2952037 ebworthen
ebworthen's picture

"The first thing we do, let's kill all the lawyers."

(Shakespeare, Henry the VIth , Part 2, Act 4, scene 2)


Tue, 11/06/2012 - 12:45 | 2952042 Turin Turambar
Turin Turambar's picture

Here's the answer:


Tue, 11/06/2012 - 12:49 | 2952050 Flakmeister
Flakmeister's picture

Yep.. it is all a matter of platitudes... that's the problem, not enough vacuous platitudes....

Tue, 11/06/2012 - 16:30 | 2953008 Cathartes Aura
Cathartes Aura's picture




sigh.  +1 Flak.

Tue, 11/06/2012 - 19:40 | 2953547 NidStyles
NidStyles's picture

It's not a platitude, the problem is that you're not educated well enough to know where that answer comes from, or how it was derived. Rothbard laid it all out already though.

Tue, 11/06/2012 - 21:14 | 2953737 Radical Marijuana
Radical Marijuana's picture

"Liberty" is only a word. Just more transcendental poetry. Where are the operational definitions? Therein is the rub! Libertarianism is just another nice little jewel philosophy, pleasant to contemplate in abstract, as an idealized set of extrapolated possibilities. However, it surely does not address the FACT that reality is based on fraud backed by force. "Liberty" and Libertarianisms just like to magically wish those away. Since that can never happen, the impossible ideals actually make the opposite happen in the real world!

The deeper problems is always that there is NOBODY that guards the guardians. Thus, there is ALWAYS the paradox of enforcement. I find the words "liberty" and "freedom" tend to have nothing to do with the energy laws, and systems theories, that best explain everything else. That is because those concepts are primarily transcendental poetry, which work inside of a coded language, i.e. the biggest bullies' bullshit social stories, which are designed to backfire badly, so that those nice sounding ideals then ACTUALLY make the opposite happen in the real world. The professional liars and immaculate hypocrites that talk bla, bla, blah about "freedom" tend to really DO the opposite of everything they say!

The basic reason is that there is no free lunch. There are NO ways that human beings can make something out of nothing, nor send something to nothing. Therefore, the fundamental concepts of "liberty" are actually an elaborate code, for concealing the realities of fraud and force. Organized systems of lies, operating organized systems of robbery, are things which actually exist. "Freedom" is an imaginary ideal, which does not exist, and could not exist, since there is no way that human biengs have a magical ability to make anything out of nothing, nor send anything to nothing. The better concepts are that there is a Whole Environment, from which we relatively subtract parts, and then arrange those subtracted parts into systems. Thus, there is always actually systems of organized lies, operating organized robberies. Those are the real foundations of all human understanding and behavior. Words like "liberty" are superstructure linguistic constructions, which have symbolic roles to operate the levers of power, without admitting that!  Most of what people call "freedoms" are just social habits to be able to continue the systems of social robbery that they are accustomed to. Most of what people call "freedoms" are rationalizations of their ability to rob other people, without admitting that.

Human societies normally run on egregious hypocrisy, and "liberty" and "libertarianism" are mostly varieties of that kind of deliberately silly and shallow set of ulterior motives, operating through an isolated little jewel of political perfection, as ideals that are cut and polished, out of the real context of the substructure that human beings always live as gangs of robbers in their environments. Realistic politics is always a dynamic equilibrium between different sytems of organized lies, operating organized robbery. After we start to talk about sublime "freedom," we have already spouted such sublime bullshit, which then enables the actual equilibria in the real world to runaway towards tremendous imbalances.

The more we talk about meaningless and impossible "liberty," the more we actually enable the opposite to happen in the real world, as the actual balancing of real forces is ignored, as they go further and further out of balance, because we do not address them, but rather return to transcendental poetry that has no operational definitions of what it actually means!

Tue, 11/06/2012 - 21:17 | 2953753 NidStyles
NidStyles's picture

Cute, you can write in Dialectics.


If you even knew what you were talking about, it would be amazing. I'm willing to bet most of your mind is nothing but emoitional bullshit and cute quips. If your thoughts are nothing but notions and temporary conditions why not bring them to the obvious conclusion that resides in the deepest darkest destinations of your drug fueled daze?

Tue, 11/06/2012 - 21:48 | 2953785 Radical Marijuana
Radical Marijuana's picture

You should not presume that I am in a drug fueled daze. My thoughts are based upon lots of research! I have a well rounded background in the general studies of most topics taught at universities, as well as lots of experience in working in different spheres of economic activity. What I am saying is consistent with energy laws and general systems theory, which are the basic ways that other sciences understand everything. I am simply attempting to apply those basic ideas to human sciences. That generates the paradoxical problems that human beings control each other by lying to each other, and backing those lies up with force. THAT is the foundation of human reality. We need food to eat, and we kill and consume other living things in order to live. We can reproduce more human beings that need even more food to keep living. We therefore end up with conflicts with each other, and some groups eventually kill other groups, in order to survive. Those ARE the basic realities, and fancy words like "freedom" are primarily designed to conceal that, and instead, be able to talk about what we are really doing using a coded language. That is WHY the USA always talks about "freedom and democracy" while it actually is the world's greatest manifestation of organized fraud and force!

I would suggest, Nidstyles, that you do not understand the degree to which political philosophy is the perfection of the biggest bullies' bullshit, and that therefore, we are operating through a Bizarro Mirror World. Therefore, everything you say about me is probably more true about yourself!

Tue, 11/06/2012 - 22:40 | 2953934 NidStyles
NidStyles's picture

^^^ That is 100% pure grade A bullshittery.

There is no such thing as a "General Systems Theory" of anything. That whole idea went out the window when General Relativity fell short. You can research all you wish, some of us are actually educated and know BS when we see it.


Some of us actually know what Dialectics are as well, and you are the perfect example of how malicious that concept was/is. You are certainly another one of those New Age progressive morons that have been populating ZH in ever greater frequency these days. Then again like most modern Leninists, you don't even know that you are a Leninist.

Wed, 11/07/2012 - 02:22 | 2954836 Radical Marijuana
Radical Marijuana's picture

Clearly, Nidstyles, all you do is throw labels around, despite that I never adopted those labels. I know what Leninism is. I am not one. In fact, I am not aware of any philosophical system anywhere, whose label I would adopt as a good description of my system of understanding. I simply try to apply my best understanding of other sciences to human sciences. In that context, I repeat, that warfare is the oldest and best developed of social sciences,and warfare is the most extremely paradoxical of all human activities!!!

Of course, I do dialectics. That is a basic way of thinking: Thesis, Antithesis, Synthesis seems pretty universal scientific method to me.  A proposition, counter-propositions, and an attempt to reconcile those.  I find it hard to imagine why you are so against basic dialectics.  As far as "general systems theory" I do not mean the general theory of relativity.  I am more talking about cybernetics in context of information theory, which is an elaboration of basic thermodynamics, to include vastly more non-linear functions. Those are the basic ideas in the design of electronic systems, and more and more of biological systems too. I am not talking about a general theory of everything. I agree that must necessarily fall short, since it could not be both consistent and complete at the same time. I am talking about how the flow of energy gets organized into systems, and the ways that entropy equations manifest, especially through feedback loops. However, you again jumped to conclusions. The basics of energy laws and general systems theory continue to be the most wide-spread methods to understand things, and dialectics continues to be a wide-spread philosophical method.

However, it is clearly a waste of time to continue our discussion. You seem only interested in asserting insults, based on labels, none of which apply to me, but only to your imagination of who I am.  Your response seems to be based on nothing but what I said about Libertarianism. As usual, your response does not address any of the substance, regarding the problems that people simply can be dishonest, and violent, and that those who do end up driving everyone else to have to deal with that. I am simply pointing out the obvious facts, that the real world runs on force and fraud, and that ideals that it should not are useless, since it does anyway. Therefore, the only practical things we can do is muddle through the madness of people being dishonest, and backing that up with violence, and thereby taking control of what happens. Your bla, bla, blah seems superficial and silly to me, if you believe in Libertianism. But, of course, your response would only be to sling insults and labels around, at whomever you imagine that I am, which is quickly going to become a waste of our time to continue to bother to do.

Wed, 11/07/2012 - 15:25 | 2957495 Turin Turambar
Turin Turambar's picture

The Ethics of Liberty by Murray Rothbard


you can lead a horse to water...

Wed, 11/07/2012 - 17:53 | 2957900 Radical Marijuana
Radical Marijuana's picture

Been there, done that, not worth drinking.

I still think "libertianism" is silly & shallow.

Pie-in-the-sky ideals about nonviolence, and so forth, are absurdly backwards and impossible to exist in the real world. Idealized political philosophies which find some bullshit way around that problem, by ignoring the depth of it, or simply saying that we should not do that are backwards, and always backfire. What tends to happen is that we pretend we are the "good guys" when we "defend" ourselves against others. However, the fundamental conditions and chronic political problems inherent in all life necessarily drive conflicts in the real world. Words like "freedom" and "liberty" and all the philosophies based on those foundations, are not good for anything but transcendental philosophical poetry. That kind of poetry is transcendentally "true" ... However, in the real world it always ends up being hypocritical bullshit, that is another aspect of rationalizing doing the opposite to what it says should be done. Since there will be real conflicts in the real world, we will always be forced to "defend" ourselves, and "nonviolence" is therefore automatically bullshit, which either hides the violence, or enables the violence to get worse.

The only way out of those predicaments is to remember that the relatively subtractions of the parts were never absolute, and therefore, every part of the Whole, in apparent conflict with other parts of the Whole, and still the Whole, together. That is the way that ALL of the transcendental poetry words like "liberty, truth and justice" actually work. Those words are approaches towards the Whole, but, they tend to become insultingly absurd and backwards whenever any relatively finite human being uses those words against another human being. The foundations of REALITY, built into the original definitions of perception, are SUBTRACTION and ROBBERY. Political philosophy and political science should begin with those foundations, because those ARE the actual basis of understanding any reality. Transcendental poetry words like "liberty" are approaches towards the infinite flow of all energy, through all structures, which attempts to do that by cutting that flow up, but then, saying it should not be, in order to propose ideals about what we should do about the ways we have cut the flow up in the first place. I agree that the flow is never actually fundamentally cut up, and therefore, the pure transcendental poetry of the FLOW is that there is no perception of that flow, since, without any subtractions, to arbitrarily cut up pieces of that FLOW, then there is no perception of that FLOW possible. Thus, pure "freedom" and "love" are transcendental poetry about the FLOW of the ONENESS. However, starting with those ideas is a completely backwards and utterly unscientific way to deal with the realities, which necessarily are based on original subtractions, and thereafter must manifest original robberies.

Libertarianism is another unscientific political religion, based on wanting to feel good, but which tends to actually do the opposite of everything that it says. The "liberty" of the FLOW of the Whole Energy is "absolute," but then absolutely meaningless. For sure, the word "liberty" is another approach to the conception of the conservation of energy in its FLOW. However, that kind of transcendental poetry is ALWAYS true. The conservation of energy does not need us to make it happen. Rather, it happening is what makes us. When human beings attempt to understand the FLOW of the Whole Energy, we do original subtractions, and from that follows relative robberies.

Libetarianism is just another goofy political religion, that attempts to have its cake and eat it too. If we have any finite definitions, then those are relative illusions, and those are necessarily lies. Everything we "know" must always be some system of organized lies, and those systems must always be engaged in some system of organized robbery. The transcendental poetry of the "truth" in the "freedom" of the perfect conservation of energy through all of its transformations is axiomatically "true" like all other transcendental poetry tends to be. However, its basic conceptions are backwards, and therefore, everything it proposes as solutions are backwards. The ONLY real reasons to advance those kinds of ideals about "liberty" are in order to exploit those as impossible ideals, to be hypocritical about, in order to actually make the opposite things happen in the real world, while being able to have a song and dance to justify or rationalize doing that.

Since there is nothing concerning "freedom" that actually makes any energy out of nothing, nor sends any energy to nothing, there is no such "freedom" for any part of the Whole. Only the Whole, as a Whole, has "freedom" to BE THE FLOW. ... BUT, THAT WAY OF TALKING IS ALWAYS ONLY MEANINGLESS TRANSCENDENTAL POETRY, WHICH IS AXIOMATICALLY TRUE, WITHOUT HAVING ANY USEFUL CONTENT, THAT CAN BE MEASURED IN THE REAL WORLD.


Wed, 11/07/2012 - 18:20 | 2958355 Turin Turambar
Turin Turambar's picture

Your logic, or lack thereof, is self-referentially incoherent.


Have a nice day.

Tue, 11/06/2012 - 12:49 | 2952053 Bicycle Repairman
Bicycle Repairman's picture

"We must give the wealthiest an incentive to invest for the long term. This can create growth."

Suppose the 'wealthiest' don't care about growth.  Do they really want a 9th vacation home?  Suppose they don't believe there is a 'long term'?  Suppose all they really desire is control?

Just what lies in the upper strata of the Maslowian triangle of the 'wealthiest'?

Weird scenes inside the gold mine.

Tue, 11/06/2012 - 12:54 | 2952061 Flakmeister
Flakmeister's picture


I actually agree with you, lock, stock, and barrel....

It must truly be The End....

Tue, 11/06/2012 - 12:57 | 2952093 Bicycle Repairman
Bicycle Repairman's picture

Just the beginning of the end.  Enjoy the ride.

Tue, 11/06/2012 - 13:18 | 2952183 Spastica Rex
Spastica Rex's picture

+1 for you.

Ride the snake.

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