![]() | #271 | |
BHPian Join Date: Aug 2009 Location: Bangalore
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| Re: Understanding Economics Quote:
When Euro was formed, it was basically the German Mark that renamed itself as Euro and all the other countries pegged itself to it. It did not benefit many countries, while it benefited some. With the common currency, a scenario like this can happen. German car bought in Italy.* The Profit stays in Germany, lets say in some bank.* If this goes on like that Germany has a surplus of cash.* Euro.* So, they will lend out to other places.* After Global Financial Crisis, when everywhere in the world Govts were injecting money into the system, the same thing happened all over Europe.* German car sold in Greece.* Money comes to Germany.* Greece has not much productivity, which means Germans rarely buy anything from Greeks.* | Germany has a surplus of cash.* | Germany can lend out to itself or other countries with similar credit rating. The issue there -- low interest.* | Greece has smaller credit rating because of existing debts and low output. * | The German private banks are interested in lending out to Greece and other broken economies for more interest.* The cycle of debt ridden broken low productivity countries would continue, with bailouts from the Govt bonds and banks recapitalisation. In the absence of a single currency, the Central bank in each state would have adjusted the monetary policy to play with the value of the currency to absorb the debt shocks. But with single currency, it is not possible. The world over cannot have a single currency. Not until we all vote for a sovereign earth. | |
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![]() | #272 | |
BHPian Join Date: Sep 2015 Location: Gurgaon/Saigon
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| Re: Understanding Economics Quote:
I know it is absurd and impossible. But this is globalization in real sense. With restrictions on movement of people, import/export restrictions, tariffs and what not - Globalization is flawed. And hence it is increasing income disparity. Last edited by ampere : 15th January 2018 at 09:15. Reason: Trimmed quoted post | |
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![]() | #273 | |
BHPian Join Date: Aug 2009 Location: Bangalore
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| Re: Understanding Economics Quote:
I must also add, this explanation above is my understanding of the Greek crisis as explained by Yanis Varoufakis, their ex Finance minister. In your example above, you have explained a case where Germans and Greeks are not separated by borders, pretty much like a single country. We could put Indian states and it would make sense. People from Orissa coming to Bangalore to work on IT. Cars made in Tamilnadu being driven in Kerala etc. No restrictions, everybody allowed to own capital thru out the region. But it has to be a sovereign country as a whole with a lot of unity to make that happen. Thats why I said, not unless we all vote for a sovereign earth. I completely agree, it is near impossible. Last edited by ashokrajagopal : 12th January 2018 at 18:10. | |
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BHPian Join Date: Sep 2010 Location: Bengaluru
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| Re: Understanding Economics Quote:
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Garments have also greatly benefited by exports to the US (in the case of Bangladesh also). Pharma is one more sector. | ||||||||||||
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BHPian Join Date: Aug 2009 Location: Bangalore
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| Re: Understanding Economics Quote:
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Pharma - the research is completely backed by Governments around the world. If there is one sector which should never run on a market, it is pharma. Last edited by ampere : 13th January 2018 at 23:29. Reason: Fixed in quote responses | |||||||||||
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![]() | #276 | |
BHPian Join Date: Sep 2010 Location: Bengaluru
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| Re: Understanding Economics
Since you brought in HDI, lets see a few data and trends. Source: http://hdr.undp.org/en/composite/trends 2015 ranking is given in brackets. Period refers to 1990-2015. 1. United States (10) - For all the rants against capitalism and how it does not consider HDI or degrades humans, US seems to be doing very well on the HDI front. In fact, it was 7th in 2010 (see the "Change in HDI rank" column). 2. Cuba (68) - Poster-boy of the left. 68 is not bad but the way the Left portrays Cuba as the utopia against Globalization and Imperialism, I was under the impression it would be up in the single digit rank. Another poster-boy of the left, Venezuela closely follows Cuba at 71. 3. India (131) - Admittedly bad and still a long way to go. But see the trend from 1990 - a period that coincides with reforms and globalization - HDI has gone up by 45%!! So the claim from leftists that Globalization leads to lower HDI is junk logic. 4. China (90) - Similar to India; In fact, China HDI has gone up very well in this period 47%. Considering that China and India constitute around 40% of world population, we can reasonably conclude that a lot, really a lot of people in have seen their lives becoming better in this period. 5. Other observation - The top 20 countries are all what can be called capitalism-oriented centrist countries (except the US which may be more right than the others); None of them were earlier Eastern bloc (Soviet aligned) countries. This shows utter failure of socialist/planned economies. Quote:
That is why Western European countries with Eastern European countries (care to guess who has the better HDI ?); Or North and South Korea is compared. Or Israel with other West Asian countries. <off-topic> That similarly India is not compared to Pakistan in matters of economy shows how much of an utter failure Pakistan is. | |
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![]() | #277 | |
Team-BHP Support ![]() ![]() | Re: Understanding Economics Quote:
![]() Let's look at the top 10 socialist countries in the world. Of them, 9 are in the VERY HIGH HUMAN DEVELOPMENT list you provided. In fact, 5 of them are in the top 10, 7 in the top 15, and 9 of them in the top 25. The only top socialist country country that misses the list is China, because it is a communist country. | |
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![]() | #278 | |
BHPian Join Date: Sep 2010 Location: Bengaluru
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| Re: Understanding Economics Quote:
Western European countries do have free markets, private enterprise, ease of doing business, but the govt spends a lot on welfare, health care, and other social benefits to their citizens. Kudos to them and that's how it should be ![]() | |
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![]() | #279 | ||
Team-BHP Support ![]() ![]() | Re: Understanding Economics Quote:
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![]() If you just make up a new terminology, and call command economy as socialism, obviously you will confuse all of us here. | ||
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![]() | #280 |
Distinguished - BHPian ![]() | I don't think so, plenty of European countries with quite right and or centre right wing governments over the last couple of dcadesThey are still spending money on social welfare, education and public health care. E.g. prime minister May of the UK and Rutte of the Netherlands are staunch right wing conservatives, but are still spending public money on these topics. I don't think anybody would call them or their governments socialists. Jeroen |
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![]() | #281 | |
Team-BHP Support ![]() ![]() | Re: Understanding Economics Quote:
These countries may refuse the socialist label, but Forbes or Bloomberg don't have any doubts about it. In this thread, I often see people confuse socialism with communism, they are not the same. As the preceding link says "A socialist government could control all of the means of production — or it could, for example, use taxes to redistribute resources among the population." The latter is what most democratic countries do. There are no pure capitalist or pure socialist economies. They are always a combination of capitalism and socialism. Countries that tax high and spend it on social welfare are socialist leaning country, they usually provide free health care, free education, welfare for jobless, etc. But capitalist leaning countries tax less, provide no free health care, make education expensive, etc. I had discussed this in detail a year before. Last edited by Samurai : 14th January 2018 at 00:18. | |
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![]() | #282 | ||
Distinguished - BHPian ![]() | Re: Understanding Economics Quote:
If you had asked our American friends when we lived in the USA what political affiliations I have, they would have told you: What him? The looney lefty from Europe. If you would ask my friends in Europe, they would say: Him, he thinks he is a liberal, but he is just pretty right wing without being extreme. So whilst their might be economic definitions, it doesn’t mean everybody agrees or has the same understanding. In that respect I don’t think socialism/capitalism are the correct label to capture what is really at stake. It’s down to what individuals feel what role they play in a society. Is it only about me and I need/want to take care of everything myself or do I believe I have a responsibility for society at a large and believe certain aspects of society needs to organised by the state/governement. I always felt this was the biggest difference between Americans and Europeans. Take healthcare; Americans be it democrats or republicans have a fundamental different view on health care than Europeans. Just came across this very interesting article on the BBC. It’s conclusion: Quote:
I think Forbes and Bloomberg are very conservative on how they view economic models. Bit stuck in old dogma’s. Jeroen Last edited by Jeroen : 14th January 2018 at 08:43. | ||
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![]() | #283 | ||
Team-BHP Support ![]() ![]() | Re: Understanding Economics Quote:
Obama is considered black and Trump is considered white. But in reality they are light brown and orange respectively. Even these are not absolute definitions. However, when a western government behaves like a socialist government, they refuse to call it socialism. It looks like a duck, quacks like a duck, but refuses to be called a duck. That is because of dog-whistle politics. Bernie Sanders, who lost the democratic primary election in 2016, remained the most popular politician in America even after a year after losing to Hillary. But he claims to be a socialist. That is a dog whistle to people who grew up in the cold war era. That makes them not vote for him, despite they liking all his proposals. Ask an american senior citizen who lived the cold war era, who is now on social security and medicare, about socialism. He will reject it, not realizing he is living on socialistic programs. Such is the power of labels. Quote:
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![]() | #284 |
Senior - BHPian | Re: Understanding Economics Human Development Index is often criticised for not accounting for a country's internal inequalities or for sustainability, apart from a few other factors. Hence, this may not be a good metric to substantiate claims or opinions. |
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![]() | #285 |
Senior - BHPian ![]() Join Date: Apr 2007 Location: LandOfNoWinters
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| Re: Understanding Economics Is capitalism long sighted? What kind of economic value is placed important and taken into account by the participants in a "market economy" while taking decisions? |
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