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What Piketty Didn't Say - 13 Facts They Don't Tell You About Economics

Tyler Durden's picture


Yesterday, Ha-Joon Chang exposed the shortest economics textbook ever. Today the Cambridge University Economics professor uncovers everything you didn't know about economics (in 13 simple points)...

1. Economics was originally called 'political economy'

Economics is politics and it can never be a science. Yet the dominant neoclassical school of economics succeeded in changing the name of the discipline from the traditional 'political economy' to 'economics' at the turn of the 20th Century. The Neoclassical school wanted economics to become a pure science, shorn of political (and thus ethical) dimensions that involve subjective value judgments. This change was a political move in and of itself.

2. The Nobel Prize in Economics is not a real Nobel Prize

Unlike the original Nobel Prizes (Physics, Chemistry, Physiology, Medicine, Literature and Peace), established by the Swedish industrialist Alfred Nobel at the end of the nineteenth century, the economics prize was established by the Swedish central bank (Sveriges Riksbank) in 1968 and is thus officially called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Members of the Nobel family are known to have criticized the Swedish central bank for giving prizes to free-market economists of whom their ancestor would have disapproved.

3. There is no single economic theory that can explain Singapore's economy

This is what I call the 'Singapore problem'. If you read the standard account of Singapore's economic success in places like the Economist or the Wall Street Journal, you will only hear about Singapore's free trade and welcoming attitude towards foreign investment. You will never hear about how almost all the land in Singapore is owned by the government, while 85% of housing is supplied by the government's housing corporation. 22% of GDP is produced by state-owned enterprises (including Singapore Airlines), when the world average in that respect is only about 9%.

To put it bluntly, there isn't one economic theory that can single-handedly explain Singapore's success; its economy combines extreme features of capitalism and socialism. All theories are partial; reality is complex.

4. Britain and the US invented protectionism, not free trade

Britain had the most protected economy in the capitalist world in the late 18th and the early 19th century. Much of this protection was provided in order to promote British manufacturers against superior foreign competitors in Europe, the Low Countries (what are Belgium and the Netherlands today) in particular.

The US went even further. Taking inspiration from British protectionist policy, Alexander Hamilton, the first Treasury Secretary of the US (that's the guy on the ten-dollar bill) developed a theory called the 'infant industry argument' - the view that the government of an economically backward nation should protect and nurture its young industries until they 'grow up' and can compete in the world market. Hamilton died in 1804 in a pistol duel, but the US adopted protectionism in the 1820s and remained the most protected economy in the world for most of the next century.

5. Free trade first spread mostly through un-free means

Free trade spread around the world throughout the 19th century. But its spread mostly owed to something that you would not normally associate with the word 'free' -force, or at least the threat of using it. Colonisation was the obvious route to 'unfree free trade', as the colonial masters forced the subjugated countries to open up their trade completely. But even many non-colonized countries were forced to adopt free trade. Through 'gunboat diplomacy', they were forced to sign unequal treaties that deprived them of, among other things, tariff autonomy (the right to set its own tariffs). The most infamous unequal treaty is the Nanking Treaty that China was forced to sign in 1842, following its defeat in the Opium War, but all the Latin American countries, the Ottoman Empire (Turkey's predecessor), Persia (Iran today), and Siam (today's Thailand), and even Japan were subject to such treaties .

6. It was arch-conservative Otto von Bismarck who introduced the first welfare state in the world

Contrary to what many people believe, the welfare state was originally a 'rightwing' invention. It was the arch-conservative Otton von Bismarck who first introduced it. Bismarck hated socialism, but he wasn't an ideologue. He basically figured out that if you don't provide a minimum safety net to workers, they will be persuaded by the socialists. So he kept workers happy by creating the first welfare state in the world. This suggests that, contrary to their own self-image, those who want to destroy the welfare state may be the biggest enemies of capitalism.

7. Capitalism did best between the 1950s and the 1970s, an era of high regulation and high taxes

Despite what we hear these days about the detrimental economic effects of high taxes and strong government regulation, the advanced capitalist economies grew the fastest between the 1950s and the 1970s, when there were a lot of regulations and high taxes.Between 1950 and 1973, per capita income in Western Europe grew at an astonishing rate of 4.1% per year. Japan grew even faster at 8.1%, starting off the chain of 'economic miracles' in East Asia in the next half a century. Even the US, the slowest-growing economy in the rich world at the time, grew at an unprecedented rate of 2.5%. Per capita income for these economies collectively have since then managed to grow at only 1.8% per year between 1980 and 2010, when they cut taxes for the rich and deregulated their economies.

8. The internet was invented by the US government, not Silicon Valley

Many people think that the US is ahead in the frontier technology sectors as a result of private sector entrepreneurship. It's not. The US federal government created all these sectors.

The Pentagon financed the development of the computer in the early days and the Internet came out of a Pentagon research project. The semiconductor - the foundation of the information economy - was initially developed with the funding of the US Navy. The US aircraft industry would not have become what it is today had the US Air Force not massively subsidized it indirectly by paying huge prices for its military aircraft, the profit of which was channeled into developing civilian aircraft.

9. Before tax and welfare spending, Germany and Belgium are more unequal than the US

Before tax and transfers, quite a few European countries, like Germany and Belgium, are more unequal than the United States. Only after tax and transfers do they become a lot more equal. These examples show that it is possible to fundamentally re-shape a country's inequality through progressive taxes and the welfare state. Despite what many people say, inequality is not a natural phenomenon, like an earthquake or a hurricane, beyond human control.

10. Finland, one of the most equal countries in the world, has grown faster than the US

Not only is there a lot of evidence showing that that higher inequality produces more negative economic and social outcomes, there are quite a few examples of more egalitarian societies growing much faster than comparable but more unequal societies. Despite being one of the most equal societies in the world, more equal than even the former Soviet bloc countries in the days of socialism, Finland has grown much faster than the US, one of the most unequal societies in the rich world.

11. The 'lazy' Greeks are the hardest working people in the rich world after South Koreans

In the ongoing Eurozone crisis, the Greeks have been vilified as lazy 'spongers' living off hard-working Northerners. But they have longer working hours than every country in the rich world apart from South Korea. The Greeks actually work 1.4 and 1.5 times longer than the supposedly workaholic Germans and Dutch. Italians also defy the myth of 'lazy Mediterranean types' by working as long as Americans and 1.25 times longer than their German neighbours. These numbers show that the problem of the Mediterranean countries in the Eurozone is one of productivity, not work ethic.

12. Switzerland and Singapore are not living off banking and tourism alone

Many people argue that we have entered a post-industrial world, in which 'making things' is not very important, as service industries have become the engine of economic growth. They cite Switzerland and Singapore as examples of service-based success stories. Haven't these two countries shown that you can become rich - very rich - through services, like finance, tourism, and trading?

Actually these two countries show the exact opposite. According to the UNIDO data, in 2002, Switzerland had the highest per capita manufacturing value added (MVA) in the world - 24% more than that of Japan. In 2010, Singapore ranked the first, producing 48% more MVA per capita than the US. Switzerland ranked the third.

13. Most poor people don't live in poor countries

Currently, around 1.4billion people - or about one in five people in the world - live with less than $1.25 per day, which is the international poverty line (below which survival itself becomes a challenge).

But most poor people do not live in poor countries. Over 70% of people in absolute poverty actually live in middle-income countries. As of the mid-2000's, over 170 million people in China (around 13% of its population) and 450 million people in India (around 42% of its population) lived with incomes below the international poverty line. These show the enormity of challenges that the two most populous countries face.

Source: Ha-Joon Chang's latest book, Economics: The User's Guide, which is available in stores now


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Fri, 06/20/2014 - 19:59 | 4879547 zorba THE GREEK
zorba THE GREEK's picture

Fact #14....the public is being baffled with BS by the uber wealthy owed media.

Fri, 06/20/2014 - 20:12 | 4879565 Stackers
Stackers's picture

#7: Well when your entire country is a giant smoking bomb crater, 20 years of "growth" spent rebuilding everything from scratch is a bit relative. How much MORE growth could there have been in the 1950's and 70's without all the energy and labor wasted on regulations and taxes ?


#9 and when adjusted for taxes Germany and Belgum's equality through State mandate drops away. They are very "equal". They also pay 100% tax on cars. 150% tax on gasoline. 50% is the starting income tax bracket, not the top bracket. Sales tax range from 15-25%, not like the the U.S. 5-10%. and on and on and on.

Fri, 06/20/2014 - 20:14 | 4879577 old naughty
old naughty's picture

so can we say: The Nobel Prize in Peace is not a real prize then?

Fri, 06/20/2014 - 20:28 | 4879603 Raymond K Hessel
Raymond K Hessel's picture

Wow.  It's amazing how the comments went into full anger mode so quickly.

Challenging ourselves and the things we take for granted only make us better analysts.

Unless you're Cass Sunstein.  in that case, there's only one way to do things.  The wrong way.

Fri, 06/20/2014 - 20:49 | 4879639 i_call_you_my_base
i_call_you_my_base's picture

Exactly. Without Grammys there would be no good music.

Fri, 06/20/2014 - 21:00 | 4879654 economics9698
economics9698's picture

In the 1950’s federal, state, and local government only consumed 26% of the GDP and we had much sounder monetary policies.  Today it is 43% and the rich print trillions for themselves.

Europeans make about $35,000 purchasing power parity compared to $48,000 for the US.  The USA has millions of 93 and 85 IQ low income workers Sweden, Finland, and Europe does not have.

Fri, 06/20/2014 - 21:01 | 4879658 FredFlintstone
FredFlintstone's picture

Did any or many cities or states even have personal income taxes then?

Sat, 06/21/2014 - 12:29 | 4880602 Urban Redneck
Urban Redneck's picture

The 2nd edition of the CFR was published in 1949, and was 19,335 pages, in 2005 it was 134,261 pages in 2014 it is about a QUARTER MILLION pages

a 2% drag on economic growth over half a century yields economic output at 1/4 what it would otherwise be.

exponential math is a bitch, when it isn't working for you.

Fri, 06/20/2014 - 20:28 | 4879604 kaiserhoff
kaiserhoff's picture

Anyone else remember when Friday nights were fun,

  and the posts wouldn't bore a buzzard to death?

Sat, 06/21/2014 - 02:58 | 4880117 zhandax
zhandax's picture

Have you noticed that humor, in general, has been in short supply lately?  In 2008, I might have 20 amusing emails each day.  Now it is perhaps one every other day.  "The only way out is complete collapse" was funny until it became obvious that it was reality.

Fri, 06/20/2014 - 20:43 | 4879619 stoneworker
stoneworker's picture

I think you hit the nail on the head with this one. When a country is not yet "developed" growth is easy and may even happen faster under an authoritarian government(think Stalin's I am not defending his methods, but the industrialization happened very quickly compared to neighboring Poland which did not have any industry when Hitler invaded even though both countries came out of the Russian empire).  My personal opinion that high taxes are not the problem if they are actually spent by the government investing them into something useful, and not on supporting the welfare state. When a country has become developed however an authoritarian government becomes less effective since it is usually not good at allocating funds into necessary fields. High levels of regulation are always a problem since they only work in favor of big businesses which can afford to keep up with them(just think of all the  legal advisors, tax experts....). Starting a business nowadays is way too complicated. The only exception I can think of is banking regulation...that should only be increased. 

Fri, 06/20/2014 - 21:06 | 4879672 economics9698
economics9698's picture

It is not the tax rate but government spending that kills a economy.  Give me a 90% top ax rate and a government that spends 15% of the GDP any day over a 25% tax rate and spending 30% of the GDP. 


People can work around a fucked up tax code but if you steal their stuff it is hard to overcome the loss of real income and lost production.

Sun, 06/22/2014 - 18:48 | 4879923 stoneworker
stoneworker's picture

There is good government spending and bad government spending. The point I was trying to make is that people should not have to work around anything. If a person that has a high school education cannot understand it then it must be simplified. 

Sat, 06/21/2014 - 11:35 | 4880501 cpnscarlet
cpnscarlet's picture

Industrialization is always fast and easy when you kill off about 20 million people and send a whole bunch to slave labor camps to do the mining.

Yes sir, Stalin was a great one for "growth".

Sat, 06/21/2014 - 13:41 | 4880753 stoneworker
stoneworker's picture

What you may or may not know is that a lot of those people died due to collectivizaiton...they basically took all the grain they could find and sold it to the west in exchange for machinery. Was this necessary? I don't know, but you have to realize that Stalin knew that war was coming and time was not a resource he could waste. The facts of growth are already in history...think t 34 tank and all the other Soviet made weapons at the time. Poland still relied on calvary.

Sat, 06/21/2014 - 13:36 | 4880717 magnetosphere
magnetosphere's picture

more like, industrialization in undeveloped countries with reasonably smart people  can happen IF AND ONLY IF there is easily accessable coal. 

england, belgium (wallonia), germany (ruhr, saar, silesia), russia (donets) YES

netherlands, france, poland, southern italy NO

japan, taiwan, manchuria YES

china (coal near mongolia) NO

great lakes region of usa YES

Sat, 06/21/2014 - 10:32 | 4880392 Whootie_who
Whootie_who's picture

Fact #7b: when excess labour is killed off higher employment and wages follow

Fri, 06/20/2014 - 20:04 | 4879555 Reaper
Reaper's picture

Economics is the modern version of the science of alchemy.

Fri, 06/20/2014 - 20:06 | 4879561 Skateboarder
Skateboarder's picture

A really strange version of alchemy where you're trying to convert everything into debt.

Fri, 06/20/2014 - 21:06 | 4879674 Reaper
Reaper's picture

Instead of gold from lead, they promise gold or other value from base printed currencies and/or printed debt agreements.

Fri, 06/20/2014 - 21:15 | 4879689 lotsoffun
lotsoffun's picture

like those bitcoins?  buy those bitcoins.  the fact that bitcoins are pitched as 'new 'money'' or 'new gold' says it all.

like my stepford wife and artificial ...... whatevers.  nothing like the real thing, especially if you keep referring to it.


Fri, 06/20/2014 - 23:13 | 4879917 prains
prains's picture

nothing like 1's and 0's to be easily converted into slavery...when the time is right, yes bonestar might have a few shiny babbles in his sock he jerks off in too, but when the time is right all the bitconers will get absolutely ass fucked to a bloody mess and bleed out to their death. If there's ANYTHING an 8 + IQ can understand by now....all the 1's and 0's can and will be controlled by those who want to controll them. all the rest of you are sheep to the slaughter....eventually

Sat, 06/21/2014 - 00:38 | 4880008 NickVegas
NickVegas's picture

I think his new nom de guerre is goatleader or goatherder or gaotfuck, something along thoses lines. Touche on the post. I totally agree. Full spectrum dominance is planet wide slavery.

Fri, 06/20/2014 - 21:55 | 4879757 LuciusGermanicus
LuciusGermanicus's picture

So the Federal Reserve is the Philosopher's stone?

Fri, 06/20/2014 - 22:26 | 4879823 Reaper
Reaper's picture

Only if you believe?

Fri, 06/20/2014 - 20:07 | 4879563 i_call_you_my_base
i_call_you_my_base's picture

Economics is a field for Machiavellian assholes.

Sat, 06/21/2014 - 00:05 | 4879895 Radical Marijuana
Radical Marijuana's picture

For sure, i_call_you_my_base, which is why (political) economy is presented in such paradoxical ways, where those who take that at face value then conclude that kind of "economics" is not a science. However, I do not agree that economics is not a science. My view is that economics is a science the way that warfare is a science. Success in warfare was based on deceits, and financial success became based on fraud, with "Machiavellian assholes" advancing the agenda of those enforced frauds.

In my view it is dead WRONG to assert that economics is not a science, which view similarly applies to sociology and politics. All of those domains can enable one to observe social facts, and patterns in those social facts. They can be scientific, however, in order to be more genuinely scientific, it is necessary to appreciate the degree to which those fields ARE dominated by Machiavellian assholes!

Merely because success in warfare was based on deceits, and the foundation of (political) economics became enforced frauds, whereby the banksters were able to capture control over the political processes in order to achieve that paradoxical result of the governments becoming the biggest form of organized crime, dominated by the best organized gangs of criminals, the biggest gangsters, the banksters, does NOT mean that "economics" is not a science.

There are still flows of energy, which can be measured and studied. The ways that there are level after level of lies and hypocrisy, and complications due to economics being "a field for Machiavellian assholes" does NOT stop human sciences from still being possible, only they are far more complicated.

The basics of human realities are organized lies, operating robberies. The basics of human civilizations are that they operate according to the methods and principles of organized crime, within which context, those who are the biggest organized crime gang in an area get to call themselves the "government," while the best organized gang of criminals that currently dominate the government are the "bankers."

It is primarily because the most successful Machiavellian assholes end up dominating the (political) economy, and pay for economists who will promote those Machiavellian assholes as somehow being the "good guys" that (political) economy appears to be not a science. It is because the mainstream economists are intellectual mercenaries that it often appears that they are incompetent. However, they are competent in the ways that people waging wars win by backing up deceits with destruction.

None of those levels of triumphant lies stop the theory of social sciences from still being possible. It only makes them way more hyper-complicated.

I quote this:

Silent Weapons for Quiet Wars

"Energy is recognized as the key to all activity on earth. Natural science is the study of the sources and control of natural energy, and social science, theoretically expressed as economics, is the study of the sources and control of social energy. Both are bookkeeping systems: mathematics. Therefore, mathematics is the primary energy science. And the bookkeeper can be king if the public can be kept ignorant of the methodology of the bookkeeping.

... In this structure, credit, presented as a pure element called "currency," has the appearance of capital, but is in effect negative capital. Hence, it has the appearance of service, but is in fact, indebtedness or debt. ... if balanced in no other way, will be balanced by the negation of population (war, genocide)... They must eventually resort to war to balance the account, because war ultimately is merely the act of destroying the creditor ... War is therefore the balancing of the system by killing the true creditors (the public ...)"

That the current (political) economy is based on the legalized counterfeiting of the public "money" supply out of nothing as debts, which fraud the government forces everyone else to accept, is simply COOKING THE BOOKS ON AN ASTRONOMICALLY AMPLIFIED SCALE. In that context, mainstream economists are surely Machiavellian assholes whose work is to present a false front, based upon deliberately ignoring the most important social fact, which is the SOURCE of the "money," (which is NOT money, BUT, "has the appearance of capital, but is in effect negative capital.")

The mainstream economists are deliberately Machiavellian assholes who follow the money, but almost never to its SOURCE. They provide intellectual puzzle solving, through overwhelmingly astonishing and absurd LIES BY OMISSION. Mainstream economists, and most of the other established alternative schools of economics, DELIBERATELY IGNORE the most important social facts, which are the death controls operating the murder systems that back up the monetary systems, and therefore, all the rest of (political) economy. Economists who do that, which is practically all of them, are intellectual mercenaries, and Machiavellian assholes.  However, if they did not do work that was approved up by the bigger organized gangsters, the banksters, that dominate the government, then those people would not be employed as economists. They ARE employed BECAUSE they ARE Machiavellian assholes!

Energy is not created out of nothing, nor destroyed to nothing, when it flows through individual human beings, nor when it flows through groups of human beings. Therefore, it continues to be theoretically possible to have human sciences, which are mathematically intelligible. However, that can not be done without going through the profound paradigm shifts to recognize the degree to which lies backed by violence dominate human behaviors, with the history successful warfare creating the systems which segued into the political economy based on enforced frauds.

IT IS PROFOUNDLY WRONG TO ASSERT THAT "ECONOMICS IS NOT A SCIENCE." However, it is correct to observe the degree to which economics is a field dominated Machiavellian assholes, who are apologists, providing rationalizations and justifications for the best organized gangs of criminals, who actually control the civilization, through systems of legalized lies, backed by legalized violence, i.e., banksters and governments.

Those dangerous difficulties and dilemmas do NOT stop economics from being a science, embedded in all of the other sciences about general energy systems. But nevertheless, the social facts that economics is mainly built upon the foundation of organized crime makes it problematic to promote more radical truths about the realities of economics, especially since all of the mainstream economists, who are most "successful" are so because they are Machiavellian assholes, working for others who are much worse Machiavellian assholes.

In my view, we should go through more profound intellectual scientific revolutions, in order to understand human sciences better, such as warfare and economics. However, such genuine progress in those sciences is extremely difficult, because they are based on the social success of enforced frauds. That they are fundamentally organized lies, operating robberies, is actually the universal basis that should be adopted when approaching all human realities.

The philosophy of science itself has been a victim of the biggest bullies' bullshit world view in many ways, with one of the most important being that the meaning of entropy was reversed by inserting an arbitrary minus sign into the entropy equations of thermodynamics and information theory. It is almost impossible to overstate the degree to which the biggest bullies' bullshit world view dominates our civilization, throughout all of its most basic concepts regarding time and space, so that almost everything is understood backwards!

Some "interesting" questions are to what degree can human beings survive developing better sciences and technologies about other domains and fields, while they continue to NOT be able to do so in the area of political economy, because the primary obstacles to doing so is that those areas are currently dominated by the biggest bullies' bullshit social stories, who benefit from their triumphant systems of lies, backed by violence. Indeed, most of science itself would have to be liberated, before science could be a more liberating force.

A more thorough and profound science of economics should be reconciled with all of the other sciences about general energy systems. It theoretically could be, however, the major obstacle in the way is recognizing the degree to which the currently established economic systems are built on a foundation of enforced frauds, because human civilizations actually operate according to the methods and principles of organized crime. It takes profoundly radical intellectual scientific revolutions in the basic philosophy of science, to correct the errors made there, due to the biggest bullies' bullshit world view having dominated the history of the scientific enterprise, as a social activity, in order that it may then become more possible for more radical truth about political economy to emerge, as a genuinely more scientific activity.

A genuinely scientific "economics" has to be based on the view that political economy operates as energy systems which can best be understood as the manifestation of organized crime, with the current systems of bankster dominated governments demonstrating those facts. A genuinely scientific "economics" has to understand how and why it ended up "a field for Machiavellian assholes" who were really working for much more powerful and wealthy "Machiavellian assholes."

Of course, I recognize that one could laugh, and say "good luck with that." Today, so much of the scientific enterprise is dominated more by its search for funding, than for its search for truth. But nevertheless, profound revolutions in the philosophy of science are what it would take to understand that economics is a science, like warfare is a science. In general, doing that requires that we stop believing in the biggest bullies' bullshit social stories, which tend to promote false fundamental dichotomies, and related impossible ideals. In the case of bankster dominated governments, clearly what actually exists are the expression of the operation of the principles and methods of organized crime, with the government being the biggest form of organized crime, controlled by the best organized gang of criminals, the biggest gangsters, the banksters.

Those are the real social facts, which are what would be necessary to appreciate in order to have a more genuinely scientific study of economics. I.e., that is the way that one recombines the Political with the Economics. Of course, it was deliberate bullshit to separate the two, and to pretend that somehow economics was separate from politics. (One of the most extreme farces in that respect are the assertions that the Federal Reserve Board is "independent" of politics.)

The basic problem is that the biggest bullies have beaten everyone else into submission, to accept their bullshit. Therefore, the triumphant systems of enforced frauds, which are the currently established foundation of the whole economic system, constantly provide sticks or carrots to those who disagree with the bullshit, or agree with the bullshit. Successful mainstream economists are "Machiavellian assholes" paid to agree with and promote the bullshit approved by even greater "Machiavellian assholes," the banksters.

Although I enjoyed reading about the detailed complexities reviewed in this article, it was totally WRONG to deny that economics is a science. In my view, that article does that because it does not take a sufficiently scientific attitude towards understanding how and why those who assert that they are "economists" are mostly "Machiavellian assholes," who are paid to be professional liars and immaculate hypocrites, whose intellectual work is similar to how military mercenaries are paid to kill people and break things.

Fri, 06/20/2014 - 20:11 | 4879570 nmewn
nmewn's picture

Socio-economics IN ONE EASY LESSON:

Everything you thought was yours, actually belongs to the state and its cronies. Unless you're willing to fight for it.

Fri, 06/20/2014 - 20:11 | 4879572 brown_hornet
brown_hornet's picture

The claim that there was more regulation in the 50's is probably true. But that regulation was on the big corps and not on the little guy like it is today. Stifling the little guy is what makes the economy so moribund.

Fri, 06/20/2014 - 20:27 | 4879600 NotApplicable
NotApplicable's picture

There's a lot of half-baked claims in this article. 

That it comes from Cambridge is of no surprise.

Sat, 06/21/2014 - 14:40 | 4880871 drstrangelove73
drstrangelove73's picture

I'm calling bs on 'ol won hung Lo ,or whatever his name is.
This is the most pathetic itemized list of Marxist revisionist historicity I've seen in one helping in quite awhile.
I wish I had back the five minutes of my life wasted on this garbage

Fri, 06/20/2014 - 20:38 | 4879610 i_call_you_my_base
i_call_you_my_base's picture

The 50s were an anomaly because of WWII. It's not worth drawing any conclusions from that era. Which illustrates why economics as a field of study is horseshit. There are too many factors. Models don't make sense.

Sat, 06/21/2014 - 09:07 | 4880299 Umh
Umh's picture

Very true since almost everybody elses factories were destroyed.

Fri, 06/20/2014 - 22:22 | 4879802 Frilton Miedman
Frilton Miedman's picture




brown-hornet, that's a HUGE distinction, tax & regulatory process is now controlled by big corporations at the expense of the smaller companies whom represent the only hope for job growth as corporations increasingly resort to cheaper foreign labor.

Meanwhile, D.C. corporate sock puppets and the MSM pummels us with horror stories of "socialism", "assault on free markets" and "government takeovers" when any mention of regulating the big boys is presented.

H/T to the article's mention of Hamilton's infant industry argument.



Sat, 06/21/2014 - 10:20 | 4880381 plane jain
plane jain's picture

No coincidence there.  The big guys buy the legislators to write laws to hinder any competition against them.  

Fri, 06/20/2014 - 20:38 | 4879615 StuntPope
Fri, 06/20/2014 - 20:42 | 4879616 Urban Redneck
Urban Redneck's picture

#7 is fallacious.

Taxes may go up or down, but regulations ONLY increase. The notion that the US regulatory burden was higher in the 1950s-1970s then today is PURE BULLSHIT.

The online editions only go back to when Al Gore invented the internet in the 1990s, but the trend is not freedom's friend.

Fri, 06/20/2014 - 20:47 | 4879634 Wait What
Wait What's picture

probably because people were so damn ignorant back then.

pregnant and want to smoke? sure, go for it.

asbestos insulation? why not, it works.

drink and drive? fuck a seatbelt, hand me a beer, son.

nuclear fallout does what to local populations? oh, well, whatever.

the less people know about consequences, the easier it is to let them roam like feral cats.

note that regulation is always ex post facto; no one thinks about it til someone gets hurt.

Fri, 06/20/2014 - 21:03 | 4879665 Matt
Matt's picture

It may be better to say regulations were stronger and simpler. Now, regulations and tax codes are thousands of pages long, but can be easily skirted by large corporations (but not individuals or small companies).

Fri, 06/20/2014 - 21:11 | 4879681 stoneworker
stoneworker's picture

Just fyi there is a town in Kazakhstan called asbestos. As you can probably imagine there is a huge asbestos cloud over the entire town. The interesting thing is that the cancer rate is not above average. I am not saying all regulation is useless, but the current level is absolutely ridiculous which leads me to question the reason for this. 

Fri, 06/20/2014 - 23:58 | 4879964 bonin006
bonin006's picture

I read somewhere that only something like 10-20% of asbestos causes cancer. Something about it needing to have fibers ofa certain size, I think, yet all of it is treated like radioactive waste in the US.

Sat, 06/21/2014 - 11:00 | 4880379 deflator
deflator's picture

 They used to put asbestos in everything back in the day because it was abundant and fire resistant. Insulation, plaster, floor tiles, paint you name it. I think asbestos pipe insulation is the worst. Was demoing an old brick and mortar, plaster and lathe chase wall at a hospital a couple years ago and found some unused sticks of asbestos pipe insulation. You can hold it up to a bright light and barely touch the end of it with your fingers and POOF! a million little fibers are floating around. You can get ordinary debris in your lungs and hack it up after awhile, asbestos wants to stay in there. 

 After all the regulations, and lawsuits, probably less than 10-20% of the harmful easily airborn asbestos found in remodels gets abated--it gets covered up. 

Just last summer was doing a remodel at a College building that was built in 1960 and the last major remodel was done in 1986. The electrician called me over and pointed up in the ceiling and asked, "what is that". Apparently, for some reason a 6'x 6' patch of asbestos ceiling texture from the 60's was still on the slab above ceiling. The electrician was scraping it away so he could mount a junction box to the slab above ceiling. He was pissed when I told him to keep quiet until I get a chance to talk to the owner. The bottom line is keep quiet or you are fired. The owners rep said it wasn't a big deal, the access ceiling would encapsulate it lol. Bullshit, the access ceiling was a plenum for the airhandling. Seen it time and time again, asbestos almost never gets abated when found on the back end in the course of a remodel. Asbestos abatement usually only happens when owners and architects are aware and have budgeted for it on the front end.

Sat, 06/21/2014 - 16:19 | 4881084 stoneworker
stoneworker's picture

There was a movie I don't remember which one, but in it the bad guy gets hit with a slab of asbestos and you can see him squirm and die. Great propaganda film. I have actually worked with asbestos for RD purposes. When I was researching I found a study in which asbestos was used to transport DNA oncoviruses into monkey cells. Basically asbestos has the ability to pass through the cell membrane which does make it dangerous if it is mixed with viral DNA, or something else that should remain outside of the cells. They did not find cancer appearing in any of the cells where the asbestos was not mixed with the virus.  On that note I personally would not inhale asbetos on a regular bases, but I know that it is definitely not as dangerous as people make it seem.The moral of the story is don't believe everything they tell you.

Sat, 06/21/2014 - 00:36 | 4880007 goldsansstandard
goldsansstandard's picture

McDonald et al performed a very large epidemioligical study of three mining communities. He compared the rates of Asbestosis, cancer and mesopthilioma. The town of thetford mines in Quebec mined Chrysotile Asbestos, derived from a very common rock called Serpentine. He found that the rates of all three diseases were not elevated over the general population. There was a slight increase in the worker rate of cancer, attributable to the fact that other types of Asbestos were imported and mixed.

In South Africa they mined a type of asbestos called Amosite which comes amphibole, or glass like .. The miners and town had elevated levels of all three diseases.

In Australia they mine crocidolite. An amazing substance that shreds into very long fibers as small as a few molecules thick. Nobody got out alive after the age of 50. Deadly.

Before OSHA standards for workplace exposure were set by a volunteer organization of government and academic industrial hygienists.

Jimmy Carter appointed a committed leftist to OSHA and the agency ended the distinction between fiber types.

Thus billions have been wasted removing crysotile from buildings.

not to mention all the damage to american industry by lawsuits, even when the company did not use the bad stuff.

But worst of all, 911 proved that fireproofing without chrysotile asbestos fails, as predicted when the towers were built, by the inventer of the stuff.

Sat, 06/21/2014 - 05:28 | 4880176 Winston Churchill
Winston Churchill's picture

You can't fix stupid.

Thats what natural selection was for.

Humans are now devolving as a species.

Sat, 06/21/2014 - 08:05 | 4880248 shovelhead
shovelhead's picture

Had an MRI done lately?

Sat, 06/21/2014 - 08:44 | 4880280 Winston Churchill
Winston Churchill's picture

Savant autistic much ?

Sat, 06/21/2014 - 16:20 | 4881088 Wait What
Wait What's picture

agree, but when stupid comes barreling across your path, despite your every precaution, it's no longer 'natural' selection, more like 'man-made' selection.

a year ago i read about a female with 182 IQ cycling around Menlo Park who was killed by a driver who 'didnt' see her' and then there's this:

more ironically, Darwin doing his worst:

Fri, 06/20/2014 - 21:16 | 4879690 zanez
zanez's picture

"Per capita income for these economies collectively have since then managed to grow at only 1.8% per year between 1980 and 2010, when they cut taxes for the rich and deregulated their economies."

US code covers all laws, "deregulated their economies" likely refers to things like S&L regulation, Glass-Stegal, etc.


Fri, 06/20/2014 - 22:51 | 4879884 mijev
mijev's picture

There were less regulations but back then at least the ones that were in place were enforced. Today's regulations are like the no smoking signs in chinese elevators and hotel rooms.

Fri, 06/20/2014 - 20:39 | 4879617 alentia
alentia's picture

Putin's propaganda with perversion of facts.

Fri, 06/20/2014 - 20:39 | 4879618 Wait What
Wait What's picture

you can actually get a PhD for knowing this common sense blather?

a 10 yr old could get to these conclusions with a little goading. that it takes a guy with a PhD to point it out only shows how fucked the world really is.

Fri, 06/20/2014 - 20:48 | 4879636 ToNYC
ToNYC's picture

One hand washes the other, so economic itis.

Fri, 06/20/2014 - 21:12 | 4879684 buyingsterling
buyingsterling's picture

RE #4, shouldn't protectionism have precluded all of the incredible growth from 1820-1913? I guess the new rules didn't apply then.

Fri, 06/20/2014 - 21:22 | 4879698 Stuck on Zero
Stuck on Zero's picture

During the Reagan era hundreds of the most prominent economists in the country signed a letter to the President stating that it was impossible to grow a large economy faster then 2% per year.  And then along came China ...

Fri, 06/20/2014 - 23:02 | 4879902 newworldorder
newworldorder's picture

Two points for you to consider.

1. Do we really know what is going on in China?

2. China is the land of government negotiated labor, little to no environmental laws, -by design if not by secret treaty,- a huge buyer of our debt, as well as a beneficiary of the stability the US military provides to the whole world.

is it not possible that Busch #1 and slick Willie got a copy of that letter as well? "And then along came China."

Fri, 06/20/2014 - 21:29 | 4879703 MagicMoney
MagicMoney's picture

Laughable article. Half baked statements that attempt to pass off as gospel fact. Wreaks of socialist central planning. There is no social benefit to economic equality, the very nature of goods and services dictate inequality.


I hear so much about people paying 90% taxes it's beyond hilarious. Nobody paid 90% tax rates. People avoided taxes back then just as much they do today if not more by tax loop holes. There is not even statistical historical argument to suggest that higher paid taxes actually happened and indeed there was people who did qualify for the that specific tax bracket. I don't recall Henry Ford, or any other rich person paying 90% or 70% tax rate. Mental midgets... Taxes paid have been roughly within the same range for the past 60 years. Less taxes were paid back then than today & historical statistics prove it. Yes 1950's/60's.

Fri, 06/20/2014 - 22:03 | 4879775 epobirs
epobirs's picture

You nailed it. This all reads like stuff to be talking points for those who don't like going into the pesky details but just hope to drop a bomb in a conversation, declare victory and split.


The whole inequality to-do is a distraction.

Fri, 06/20/2014 - 22:38 | 4879849 mijev
mijev's picture

Everything he said about singapore is true. How would you explain that?

Sat, 06/21/2014 - 01:23 | 4880058 stacking12321
stacking12321's picture

don't misunderstand or mischarachterize what the discussion of very high levels of income/wealth inequality is about.

there will be inequality in every society, that's inevitable, and normal.

however when the level of inequality goes to extremely high levels, that's indicative of high levels of corruption and cronyism, as well as being a recipe for disaster / revolution / social unrest.

the problem isn't inequality per se, but rather how extreme levels of inequality come into being - in the case of current day usa, it is government interference in the free markets, and central banksters printing money and giving free loans to their friends in large banks, it is politicians who give no-bid contracts to their freinds, family, and campaign donors.

trillons of $ are being funneled from normal everyday americans to wealthy banksters through counterfeiting (fed money printing/QE), bailouts of failed financial institutions, etc.

if someone rises to great level of wealth through ingenuity, hard work, or whatever, great! but that's not what the discussion of high levels of wealth inequality society-wide is about.


Sat, 06/21/2014 - 02:29 | 4880109 Victor999
Victor999's picture

You misunderstand the dynamics of high taxes.  They actually encourage investment in new business and employee benefits,w hich are traditionally tax-free.  To avoid paying 90% tax the corporation invested heavily in its business and provided significant benefits for its employees.  Without question this worked as the economies of the 50s through to the 70s clearly demonstrated.  Lowering these taxes then produced the opposite effects - lower business investment and a severe reduction in employee benefits, thus shifting wealth in a society away from producer woprkers and concentrating it in the hands of the few.  Result? - well....look around.


Free markets without tight regulation and high taxes can only have one result - wealth concentration and a feudal system of government - a modern version of the Dark Ages.  Only this time, if it is allowed to run to fruitioin, with the technology capabilitess available to the holders of wealth, there will not likely be a new Enlightenment.

Sat, 06/21/2014 - 10:35 | 4880401 Matt
Matt's picture

So, it was noit simply the high taxes, but the loopholes and incentives to avoid taxation. Likely unintended consequences. Hard to design for unintended behavior modification.

Sat, 06/21/2014 - 18:43 | 4881325 trader1
trader1's picture

are not the game rules designed to induce certain behaviors?

Fri, 06/20/2014 - 21:58 | 4879767 limacon
limacon's picture

Almeria produces 50% of Europe's veg . Ostrum principles .

Fri, 06/20/2014 - 21:58 | 4879771 limacon
limacon's picture

Competition has failed.

Fri, 06/20/2014 - 21:59 | 4879772 limacon
limacon's picture

Co-operate or else .

Sat, 06/21/2014 - 04:38 | 4880154 Obamanism
Obamanism's picture

The sackings will continue until moral improves

Fri, 06/20/2014 - 22:42 | 4879866 mijev
mijev's picture

I love how all of the whiny, cry babies (read: republicans) got their noses out of joint about this one.

Sat, 06/21/2014 - 09:50 | 4880346 Weisshaupt
Weisshaupt's picture

There is nothing to get out of joint about. Its a bunch of random facts thrown out without context and without analysis  that the author hopes will suggest that big govt is a good or acceptable idea. Look at the Great Pyramids in Egypt - they are proof that big govt "works" 

Of course he fails to point out that any re distributive system is a form of violence - a form of slavery -  in which a tribe of people who produce less than average value to others ( and therefore receive less than average payment)  extort funds from the more productive through the use of a government as a weapon against their fellow man. They are little different than a barbarian horde at the walls of a city demanding tribute. Their only message is "Give us what we want - that which we did not work for or earn - or we will harm you" 

This system, founded upon violence and the principle that might makes right,  violates the individual's rights to property, their right of conscience, and  their right to associate and do business with whom they wish.  Big Govt proponents, Statists, Progressives, Socialists, Marxists, etc  simply don't care about freedom or inalienable  rights because they see all people as being owned by the collective and therefor available to be used, abused, sacrificed or killed in the name of the common good of the tribe. .  They are throwbacks- animals that apply hunter-gather ethics to the modern world and then call it progress.  Almost every primitive tribe in the world captured and kept slaves.  They all felt it was hoarding if one tribe member gathered an unfair share of nature's bounty.  Always wanting the security found in the safety of numbers these primates reject the very idea of individuality and personal responsibility. The very ideas that an individual should pay their own way in life, or that being a burden on others ( at gun point) is immoral  is completely foreign to them and beyond their limited caveman's comprehension. 

Anywhere socialism or Big government "work" -  they work upon the backs of unwilling participants - who are robbed and indentured under threat of fine, imprisonment or death to work and serve an agenda that they never agreed to, and which no man has any legitimate right to force upon them. Something most socialists won't acknowledge or respond to, because their egos require them to think of themselves as good people who "want to help"  - if you don't care about the people you victimize to help others,  you aren't a good person. You are just a bully. 

Fri, 06/20/2014 - 23:12 | 4879915 Catullus
Catullus's picture

The first two points are the only correct ones.

BUT, and I have a political economy degree. Just because economics was known as political economy in British universities throughout the 19th century, doesn't mean that all economics is political. Economics is it's own discipline distinct from political economy and that thing called political science.

The valueless economics was something put forth by the Austrians as well in their debate the German historical school. But those were decidely un-British and therefore not considered by the Cambridge economics department as ever happening.

The Austrians demonstrated through axiomatic deduction that economic analysis could be done without consideration of the state. The discipline does not need to consider politics when analyzing cause and effect. Marginal utility was not birthed from political analysis.

Sat, 06/21/2014 - 00:44 | 4880009 Frilton Miedman
Frilton Miedman's picture



While I agree that politics and economics are separate sciences, the problem is that most economists are employed or influenced by politicians or political interests, either private or public.

I know of no other science where money influences the interpretation & parsing of data, it's no coincidence that economic think tanks funded by the wealthy coincide with lower taxes and/or deregulation to the benefit of the financers of said group.

Economic science in a Democratic free market is in it's infancy, it's no coincidence that some economists are treated just as Copernicus once was when he challenged the status quo that threatened those in power.

As for Austrian economics being impartial, the relationship between Hayek and Koch leaves that questionable.


Sat, 06/21/2014 - 03:55 | 4880141 Catullus
Catullus's picture

The dirtiest secret of them all is that if this were a true free market economy, where the government had no influence or even attempted to control the economy, you would have no need to hire an economist. In any industry. It's a 3rd Estate job.

Most of the people who call themselves economists have no motivation to say to the government that there should be no economic policy. That they should just let well enough be. Instead they say the economy needs to be managed lest it become "unbridled" or "unfettered". But the analysis has been the same since not just Copernicus, but Alexander the Great -- the state is a band of thieves writ large that can only leach off society. Economist who work for the government or work for businesses that are lobbying the government are all on the take.

But the analysis itself is value-free at the most basic level. Mainly microeconomics. I'd argue that people employed as economists are drawn to power like so many others. But then again, if you pay enough... You'll find someone to do what you're looking for.

Sat, 06/21/2014 - 13:45 | 4880763 Frilton Miedman
Frilton Miedman's picture



I completely agree with your premise about the bias of economists and the way monied interests cherry-pick for economists & data that suits their agenda.

One thing I disagree with, economics is a necessary science, the study of supply, velocity and dispersion of money is unavoidable once a population exceeds the size of a city.

I'm of the belief that Marriner Eccles was correct in his post Great Depression memoir, "poker chip" reference.

I'm not saying disparity is bad, it's necessary, but once it reaches excess it becomes neo-feudalist, smaller entrants into the business arena are suppressed by corporate monopolies, in turn, tech breakthroughs, more efficient models are also suppressed, prices stagnate with less competition & disparity continues to widen.




Sat, 06/21/2014 - 07:50 | 4880232 Bazza McKenzie
Bazza McKenzie's picture

"I know of no other science where money influences the interpretation & parsing of data"

Try "climate science".  Thought the reasons are the same, ie a tool to justify more big statism and more taxes.

Sat, 06/21/2014 - 13:50 | 4880770 Frilton Miedman
Frilton Miedman's picture



Climate change came to mind as I typed it, as the oil & coal industry have fought tooth and nail to suppress alternatives.

Whether or not you believe climate change, I think we can all agree that wind & solar power are cheaper, displacing fossil demand with them then drives fossil prices down. 


Sat, 06/21/2014 - 00:23 | 4879989 jez
jez's picture

7. Capitalism did best between the 1950s and the 1970s, an era of high regulation and high taxes


There's the answer, then. Crank up every single damn tax to 100 per cent and have corporations and individuals groaning under the weight of thousands of new regulations every single fucking day.


Pretty soon we'll all be rich!


(Doesn't seem to have occurred to him that productive human beings may have found ways to remain productive despite interfering politicians and bureaucrats.)

Sat, 06/21/2014 - 01:27 | 4880066 stacking12321
stacking12321's picture

blatant mis-use of the term "capitalism", which happens far too often.

if you have high regulation and high taxes, then it's not capitalism!

Sat, 06/21/2014 - 18:44 | 4881329 trader1
trader1's picture

it's called a social market economy within the capitalist framewok.

see Germany.



Sat, 06/21/2014 - 02:57 | 4880121 Peter Pan
Peter Pan's picture

If the Greeks are the second mst hardworking people in the world, I would like to see the definition of work.

Sat, 06/21/2014 - 03:44 | 4880123 honestann
honestann's picture

Partly true and insightful, partly patent nonsense!


Example: he says capitalism did best in the 1950s to 1970s.  That's blatant nonsense, because capitalism was already completely warped in those years and because much of the rest of the world was bombed to pieces by world war, and this was the time developments for WW2 were turned towards other applications.  The 1800s were definitely more impressive... and a lot closer to capitalism.

Elsewhere in his list he is careful to point out gross oversimplifications... yet he is not above promoting the exact same kind of lies and misrepresentations to push his agenda that he smacks down when others do so.

Another academic rationalization expert.

Sat, 06/21/2014 - 04:05 | 4880147 schatzi
schatzi's picture

In the ongoing Eurozone crisis, the Greeks have been vilified as lazy 'spongers' living off hard-working Northerners. But they have longer working hours than every country in the rich world apart from South Korea. The Greeks actually work 1.4 and 1.5 times longer than the supposedly workaholic Germans and Dutch. Italians also defy the myth of 'lazy Mediterranean types' by working as long as Americans and 1.25 times longer than their German neighbours. These numbers show that the problem of the Mediterranean countries in the Eurozone is one of productivity, not work ethic.


Nah, it's about declared working hours compared to actual working hours. In any event, a central component of productivity is work ethic. Just showing up for work does not make you hard working. The other point not mentioned, is that an economy with a strong tourism sector will invariably have longer working hours than a more manufacturing oriented economy. There's more at play here than just equating declared working hours to work ethic.


Other than that, only a bigoted idiot would claim all Greeks as lazy.

Sat, 06/21/2014 - 04:46 | 4880161 Obamanism
Obamanism's picture

13. Most poor people don't live in poor countries

If only having 3 mobile phones and one tablet is the definition of poor then the figures may be true. My definition of poor is missing 3 main meals a week and sharing a small flat with 5 or more people. 

The International poverty line is always mentioned but it should be by country basis. Over 100 million people in the US rely on the SNAP program for food. They should be considered poor. In the UK the Use of food banks have increased by 600% in 2 years, these people should be considered poor.

Sat, 06/21/2014 - 05:15 | 4880170 smacker
smacker's picture

A lot of points listed are over simplistic with highly dubious lefty conclusions in my view.

One example: "Despite what many people say, inequality is not a natural phenomenon...". I disagree with this. Inequality IS a natural phenomena. Inequality is what results when everybody maximises their abilities and skills. Why? Because we are not all born equal. That's a fact of life. Some are more intelligent and work harder than others. It is inevitable that these people will enjoy more success than those who are dumb and lazy etc.

The important aim of individuals is to recognise one's skills and maximise their use and to accept who and what we are, not to waste one's life trying to steal from others who are more successful, this being the left-wing approach.

The important aim of society is to ensure that success is based upon merit, not on who a person is or who he knows or on corruption.

Sat, 06/21/2014 - 11:11 | 4880462 kellycriterion
kellycriterion's picture

Entropy and negative entropy, aka complex systems are both natural phenomenon. Complex systems are quite hierchical. Counter trend strategies by social animals, even insects aren't reversals. Viewing egalitarianism as more than a means as opposed to a goal for the human species is a perverse joke.

Sat, 06/21/2014 - 11:53 | 4880532 mijev
mijev's picture

Yes, inequality is a natural part of life. But that doesn't mean I should shit on you just because you are inferior.

Sat, 06/21/2014 - 12:09 | 4880565 smacker
smacker's picture

"...that doesn't mean I should shit on you just because you are inferior."

That goes almost without saying if you dig into the gist of my comments.

Sat, 06/21/2014 - 15:56 | 4881026 falak pema
falak pema's picture

nations were not just created to maximise personal freedoms; cos that was what nations replaced : the feudal order and might was right.

Nations were based on ideals such as justice for all and a decent life for weak and rich. Social soldarity is the essence of all ideological (religious or secular and logic based) constructs. 

The social contract says it all. Personal freedom and merit rise is therefore constrained by the rights of others.

No more "divine rights" and "natural orders" of might is right. 

Sat, 06/21/2014 - 18:58 | 4881356 smacker
smacker's picture

I have little problem with those who are unable to support themselves to a reasonable standard being supported by the rest of society. But that has to be carefully managed (else it becomes massively abused) and rolled back from the socialist view of mass wealth redistribution to create some sort of utopian collective where those who break their backs working long hours get nothing more out of it than those who laze around all day doing little or nothing. There has to be a reward for personal effort and hard work, else nobody will bother.

Sat, 06/21/2014 - 17:14 | 4881188 kellycriterion
kellycriterion's picture

In the DNA information you will find the cooperative, the complementary, the ruthlessly competitive.

Sat, 06/21/2014 - 06:12 | 4880186 ignl
ignl's picture

Such a bullshit article.

#1 So what?
#2 Again so what? Who fucking cares about some stupid socialists that opposes prize just because someone has views different then theirs. And big deal its not "real" nobel prize - what matters is people and economist community perceptions anyway.
#3 Sure thats very true. There are so many variables that its impossible to have theory which calculates everything. Thats why free markets is most universal and  most stable solution. Of course that doesn't mean goverment can not do better just probablities are it will do worse.
#4 You can't invent something that is known for thousands of years. Special interests?
#5 Oh you just find out that world is not fair? This happened thousands of years before and will happen well into the future. Thats just the way it is. Better have strong economy which can support strong army if you don't want to be on the other side of the deal.
#6 Again so what. See #3 there are so many variables all the time and they differ fromcountry to country from time to time, from leader to leader, from environment to environment etc. Maybe it was correct thing to do for Bismarck maybe it wasn't that doesn't mean anything. Conclusion that you shouldn't review welfare policies because Bismarck was conservative is ridicilious at very least.
#7 Again see #3. This is plainly stupid. Focus on growth after most devastating war human kind ever saw and then have conclusion from this single variable is some heavy retard thinking. High taxes = growth. Yeah, no. You must be blind to think like this and do such heavy mental gymnastics and cherry picking the data like that...
#8 Again so fucking what. I dont use internet. I use end products that are based on internet. So happened it was invented by US military. Good. It would have been invented soon anyway. And who invented computer?
#9 Source with numbers? Because I can say exact opposite. Also define equal? Equality of opportunity? Equality of purchasing power?
#10 "One of most". Again source with numbers? Define equality? I think Gabon or Zimbabve is more equal, they all have nothing.
#11 Yeah right. Again cherry picking. Its not only how long you work. How hard and how smart you work matters much more. How creative you are. Productivity correlates with that.
#12 So? You need to produce something to have something. Really?
#13 Don't know what to say. India and China has a lot of poor people. Really? And how much poor people there were 40 years ago?

"Media lies to us" conspiracy theorists, "Deflation is good" pseudo economists, "Buy only gold" investors, "I would like to suck Putin balls" political scientists, "Jews control the world" racist lunatics, "Muh debt and dollar will be worthless" monetary policy experts... Now zerohedge adds "I'm edgy self appointed figher for equality because I read it in the book every idiot talks about" clueless retards...

Sat, 06/21/2014 - 07:27 | 4880211 Pickle Jar Bob
Pickle Jar Bob's picture

Government workers invented the internet technologies in the 60s and sat on them like government workers do for 30 years.


We could've had the Internet as we know it today in the 1980s.


This is such a piece of shit article.  

Sat, 06/21/2014 - 10:09 | 4880254 falak pema
falak pema's picture

Hahaha ha... So blame the "what you don't know" meme on Piketty and Keynes.

Well, at least POINT # 7 hits it BULL's EYE. Yes the legacy of FDR's Gl-St world coupled with regulation and high marginal tax rates was better than the so called "free self regulating markets" of Reaganomics/Thatcherista fame.

'Cos these "free" markets produced just the opposite : financial despotism and return to neo feudalism.

Know thy enemy and don't listen to what they say but to what they DO ! (Aristotle taught us that). 

cAMBRIDGE Economists have their heads screwed on they produced Joan Robinson. 

All said and done this a good witch's brew that ZH should eat every day instead of spouting Mises's obsolete dogmatic sauerkrout.

Sat, 06/21/2014 - 12:28 | 4880600 Anusocracy
Anusocracy's picture

""free self regulating markets" of Reaganomics/Thatcherista fame.'

So, there were no governments and no regulations under Reagan and Thatcher? Hardly.

What is it with your ilk that you can't let others be free from the garbage between your ears.

Sat, 06/21/2014 - 15:02 | 4880912 falak pema
falak pema's picture

what is with your ilk that can't see the forest from the trees ?

Deregulation to boost Supply side WS asset pumping  was the essence of Reaganomics. I'll grant you the Plaza accord of 1987 regulating the Yen to USD hike to kill Japanese exports was Reagan's BIG STICK regulation called "protectionism".

America has always been very protectionist; that why they created the petrodollar.

And tax rises was for star wars and defense ramp up, all good for MIC friends of Repugs. 

You really live up to your avatar! 

Sun, 06/22/2014 - 20:12 | 4884090 Anusocracy
Anusocracy's picture

Instead of your usual load of bullshit, why don't you say why you can't let others be free from the garbage between your ears.

What makes you little psychopathic pieces of shit think that you are gods when you are the lowest form of human life on earth?

Sat, 06/21/2014 - 08:45 | 4880281 shovelhead
shovelhead's picture

So what do you think, Tyler?

Chang seems to have gored everyone's ox someway or another.

Does his expansion on these premises hold up under strong light?

Sat, 06/21/2014 - 09:31 | 4880314 Weisshaupt
Weisshaupt's picture

Singapore is easy to explain.  Its a autonomous City, not a country.  It makes a huge difference for lots of reasons. 



Sat, 06/21/2014 - 09:46 | 4880335 Inspector Bird
Inspector Bird's picture

A good article, but full of, at best, half-truths.

While it's nice to discuss things like the 'success' of Singapore's economy while juxtaposing it against the government owned enterprises, this fact (which it is, indeed) ignores many other issues which ECONOMICS would address.  It is important to rely on things such as Bastiat's rule regarding what is seen and what is unseen.

Singapore has a culture which is cowed.  There are not high levels of freedom there, or you wouldn't be punished for spitting gum on the streets.  Now while spitting gum in the streets is nasty and imposes costs, it's hardly 'crime' against anyone.  Singapore is ranked 133 out of 175 in terms of general freedoms, and the government can crack down as it sees fit, at any time.  If growth were the be all to end all, and that's all you cared about, then by all means go live there.  I suspect most people would eventually long to return to some semblance of reality rather than living in the automatonic world which is Singapore.  There is always a trade-off between liberty and equality of economic output.  You can live in a cage and be 'equal' to the other caged person.  Not sure that's how you want to live, but I'd prefer not to be caged at all.  Even a little.

The US and Britain didn't create protectionism - they only expanded on the existing (and still oddly existing) mercantilist mindset.  Protectionism is simply mercantilism, which itself is an offshoot of a French concept.  Either way, while the US and Britain turned it into political art, these nations ALSO were very big proponents of free trade in a far larger way than most other nations.

Economics was, actually, NOT called "political economy".  It was called moral philosophy.  Adam Smith may be the grandfather of economics, but he wasn't seeking to explain a science, rather an explanation of behaviors and justifications for those behaviors.  There are scientific axioms which can be applied to economics.  It is very hard to find anyone who said the law of supply and demand is not applicable when examples of it abound.  Austrian economist Friedrich Hayek spend a good deal of time developing his 'praxeology', which is also a form of scientific hypothesis and is provable.  The 'problem' of economics, if there is one, is the inability to consistently replicate results.  But this  is not a problem of the science, it is a problem of reality in a world of multi-varied inputs.  We see the same thing in other 'sciences', such as meteorology and climatology.  Yet,  ODDLY, I'm sure there are a large number of people on this thread who would swear AGW is very real based on the nonsensical meanderings of non-scientists in the climatology field.  Nobody questions the fact that their predictions have proven worthless up to this point.  I suppose that day will come.  
All that said, while economics is NOT a science (this I agree on, since I studied it), it is a great philosophical underpinning for describing and explaining behaviors which are economic in nature.  Behavioral economics has made great strides in explaining why things have happened or why they occur in a particular fashion.  And that, in the end, is what a 'science' is - explaining why things happen.  The predictability of results is a happy result in what some call 'hard science'.  There are many sciences in which the results are sometimes predictable and replicable, but still fall short.  My father, a surgeon, is fond of recounting stories of operations which should have gone one way, but due to the unknowable nature of a certain person's physical response, required changes in how the operation proceeded. 

I could go on, but my point is that it's very hard to take this list, or any listicle like this, seriously.  I know they are all the rage.  10 reasons why your nose runs, 20 reasons why your roses won't grow, 15 reasons why that gorgeous girl doesn't care about you.....

No list can adequately address big issues like this.  Ultimately, we're all prisoners of our biases.  I could spend hours (and last night I did, with my son as he worked on some homework in Economics) explaining why a certain outcome is more likely than another based on pure logic.  But if your bias is to assume something otherwise, the logic will be meaningless to you.  Even if, in the end, I'm proven right, your bias will lead you to yet another conclusion which says "he is still wrong", despite plenty of empirical evidence supporting my point.  This is why economic predictions will fail.  People can make odd decisions, at times and these decisions can affect the market.  Yet, stunningly, economists know this and talk about it constantly.  People feel explaining why a hedge exists in so many economic models makes it so useless.  I find it elegant.  When I prepare my business models for the company I work for, there are usually 3 different versions in order to help them prepare for what is unknowable at this stage.
Even so - given there are thousands of unknowable things - my models tend to help prepare and the company can perform better than expected despite some things I didn't prepare for occurring.  Because having some level of knowledge and preparation is better than having none, and simply saying "you can't tell".  No, you can't.  But you can prepare.  You can always prepare. 

Sat, 06/21/2014 - 11:50 | 4880530 mijev
mijev's picture

You made some great points. Thanks for sharing. In fairness, although I have no clue who the author is, at least he is making some (probably deliberately simplistic) observations that are different from the typical bs we get from most economists. I'd certainly be more inclined to buy his book than Picketty's. I did live in Singapore, and the US and many other countries. If I had to choose any one to live in, it would probably be China, despite all of the annoyances. Probably singapore's success is due to the fact that their government, while corrupt, isn't overly corrupt. That and a small population are critical for any country to succeed.

Sat, 06/21/2014 - 10:49 | 4880428 kellycriterion
kellycriterion's picture

3. Singapore is a homogeneous society with a well understood strongly supported social compact. Voluntary compliance and accountability are high. It's a small country. This also aids accountability. There's the factors of competition and economic niches. What works in Singapore or Finland won't necessarily(probably)work in societies with very different cultures and contexts.

"Theories are partial, reality is complex"? You don't say. He doesn't to understand though. Another example?

7. POST WWII. Again context matters. The economic and political incentives were quite unique and quite impossible to sustain. The "high tax" environment in the US(see effective tax rates)was in reality a goofy industrial policy that was breaking down by the end of the 50s(see Kennedy tax cuts). The US was able to get away with such nonsense because of its post WWII position.

10,11,12 Context and dubious statistical measurement. He says theories are partial and economics isn't a science?

Yet he seems to have no problem with statistical measurements of things that are unlike when it suits his purpose. And when you add inherent bias and gaming, well yes, the "science" of economics has some rather intractable measurement problems.

Sat, 06/21/2014 - 12:23 | 4880590 deflator
deflator's picture

 I agree with the authors assertion that for all intents and purpose all of the various economic schools are political rather than scientific. For example, I tend to pidgeon hole myself ideologically into the Austrian school but I don't bullshit myself into believing that there can be free markets or deregulation in the absence of sound money. 

 It pisses me off every time I hear "free markets" and "deregulation" getting so much airtime in the mainstream because you cant have free markets without sound money. 

 Every time I hear free markets I imagine "Libertarians" nodding, "yep, you right" when in the absence of sound money they might as well be hearing and nodding yes to, "your mamma is a gutter whore".

Sat, 06/21/2014 - 12:43 | 4880639 Anusocracy
Anusocracy's picture

In sound money, are you implying competing currencies?

Sat, 06/21/2014 - 13:49 | 4880678 deflator
deflator's picture

Maybe, but "strictly fiat" implies centralization of power rather than competition.




demanding that rules concerning behavior are obeyed and observed. 

"my father was very strict" 

  1. fi·at mon·ey noun noun: fiat money
    1. inconvertible paper money made legal tender by a government decree.



Sat, 06/21/2014 - 12:27 | 4880597 Vendetta
Vendetta's picture

I remember when trade was about exchanging goods and services that a nation does not have the resources or know how to do themselves with another nation that does.  The US apparently does not have the resources or know how to make their own underwear or tennis shoes anymore.  How long will it take for the current trade ponzi scheme to collapse and the skid marks appear on the foreign made underwear?

Sat, 06/21/2014 - 18:33 | 4881311 trader1
trader1's picture

Fact # 7 could also be complemented by the fact that economies grew considerably because of the cold war tech race, space race, nuke race, ...

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