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

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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.

http://www4.ncsu.edu/~jjseater/regulationandgrowth.pdf

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 industrialization..no 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:

http://www.conspiracyarchive.com/NWO/silent_weapons_quiet_wars.htm

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.

http://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR

http://www.gpo.gov/fdsys/browse/collectionUScode.action?collectionCode=U...

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:

http://www.10news.com/news/sentencing-in-hit-run-that-killed-marine-biol...

more ironically, Darwin doing his worst:

http://www.fox8live.com/story/25770017/man-arrested-in-cyclists-death-ha...

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.

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