3 ms·

What's your preferred economic system, and what are its advantages and disadvantages compared to (neo)liberalism?

mrkeen 3y ago
There are certain things we want - collectively and as individuals - that aren't profitable in the free market. You need some other entity which can operate at a loss (by design) to provide these services. And that means taxes are needed.
- moooo99 3y ago
  It is not even that those entities have to operate at a loss by design. Take something like rail infrastructure as an example. A private for profit organizatin would traditionally try to keep costs down, operate services only on attractive routes (population center to population center) and try to turn a profit by charging for the tickets and potentially some travel amenities. Every overall benefit the rail company creates, whether that be employment, reduced car travel, increases in property prices in well-connected areas, don't benefit the company. The government on the other hand can consider profit differently. The governments goals may be increasing increasing employment, reducing safety risks, and developing a given structurally weak region. Since the "profit" the operating government expects differs from that one of a private entity, the rail lines a government can operate while still "profiting" (in terms of developing towards their goals) are vastly different. But it doesn't have to be a loss strictly speaking
moooo99 3y ago
It's not like I'm fundamentally opposed to market based economies. I'm just really not a fan of the way neoliberal schools of thought shape them, primarily by cutting the state to a dysfunctional minimum. How bad stuff can really get becomes really apparent when you take a look at Germany as an example, specifically the huge drama that was the federal budget for 2024 (I'm sorry, I don't have any good English sources to recap everything). This debate was entirely shaped by neoliberal schools of thought, not only by the officially neoliberal party (FDP), but also by essentially all other ruling parties (the Greens as well as the SPD), as well as the leading opposition party (CDU/CSU). I firmly believe that a well ran and reasonably strong government, government market participation (i.e. in terms of providing infrastructure) and market intervention (i.e. antitrust legislation and intervention) leads to a net benefit for the vast majority of people in a given economy. Also, especially in terms of something as fundamental fiscal & monetary policy many neoliberal discussions, for example those focussing around government debt, are demonstrably false. For economies that enjoy a large degree of autonomy, schools of thought like the modern monetary theory serve as much better frameworks to explain macroeconomics and are substantially more suitable to build a progressive economy.
- zozbot234 3y ago
  To the extent that "Modern money theory" makes any logical sense at all, it amounts to essentially a confused retelling of the fiscal theory of the price level (FTPL) - which explains precisely why it is important to keep the national debt under control.
  - moooo99 3y ago
    > which explains precisely why it is important to keep the national debt under control. Nobody, including MMT, claims you shouldn't keep the national debt levels under control. But the reasons why you do it, to which extent you do it, and by which means you achieve that are vastly different. Take taxation as an example. Simplified, Neoliberal = taxes bad. MMT considers taxation to be an instrument to control demand and inflation (by proxy).
    - zozbot234 3y ago
      > But the reasons why you do it, to which extent you do it, and by which means you achieve that are vastly different. Not so: the two points of view boil down to the exact same thing logically, even though MMT proponents sometimes fail to highlight this. Again, see FTPL which precisely explains the logical consequences of what you referenced above ("taxation [as] an instrument to control demand and inflation") without abandoning the neo-liberal framework. Simplified, the fiscal stance (taxation + government spending) is indeed one factor in demand and inflation but the central bank "moves last" in that game, so we are free to let other considerations determine the best mix of taxation and spending. It's only when monetary intervention is ineffective that less conventional policies may be needed, for some reason or other. (Deep deflation, or hyperinflation would be examples of this.)
    - junofan 3y ago
      > Take taxation as an example. Simplified, Neoliberal = taxes bad. MMT considers taxation to be an instrument to control demand and inflation (by proxy). I mean oversimplifying is something we can do confidently after a set of ideas has lived up to the standards we expect from a macroeconomic framework. One big problem with MMT is that it’s been basically whatever Stephanie Kelton et al. says it is each time they hop on a podcast and argue for some policy positions. For a while it was hey spending more won’t cause inflation. It sounds like you’re saying now it’s hey taxation is how we control inflation? So with MMT it’s historically been difficult to make definite statements about anything and seems more a tool to argue for policy.
kjkjadksj 3y ago
For me it is the system the US had during the New Deal era and WWII. Central economic planning focused on need rather than profit. Jobs programs run by government organizations themselves over private contractors seeking profit margins. Massive investments in STEM education. Massive investments in public works, amenities, and institutions. Stipends for artists, musicians, and other creatives. Seems we Americans got much more for our tax dollar in this era versus perhaps any other.
- zozbot234 3y ago
  > For me it is the system the US had during the New Deal era and WWII. Central economic planning focused on need rather than profit. You do know that FDR's preferred economic system was overtly inspired by European fascism, right? You're literally saying that a fascist, authoritarian state and a wartime economy are the best we could possibly do. Excuse me but I'm a bit skeptical.
  - kjkjadksj 3y ago
    As far as I am aware there were free elections during this time, kind of the exact opposite definition of what an autocracy is.

There are certain things we want - collectively and as individuals - that aren't profitable in the free market. You need some other entity which can operate at a loss (by design) to provide these services. And that means taxes are needed.

moooo99 3y ago
It is not even that those entities have to operate at a loss by design. Take something like rail infrastructure as an example. A private for profit organizatin would traditionally try to keep costs down, operate services only on attractive routes (population center to population center) and try to turn a profit by charging for the tickets and potentially some travel amenities. Every overall benefit the rail company creates, whether that be employment, reduced car travel, increases in property prices in well-connected areas, don't benefit the company. The government on the other hand can consider profit differently. The governments goals may be increasing increasing employment, reducing safety risks, and developing a given structurally weak region. Since the "profit" the operating government expects differs from that one of a private entity, the rail lines a government can operate while still "profiting" (in terms of developing towards their goals) are vastly different. But it doesn't have to be a loss strictly speaking

moooo99 3y ago

It's not like I'm fundamentally opposed to market based economies. I'm just really not a fan of the way neoliberal schools of thought shape them, primarily by cutting the state to a dysfunctional minimum. How bad stuff can really get becomes really apparent when you take a look at Germany as an example, specifically the huge drama that was the federal budget for 2024 (I'm sorry, I don't have any good English sources to recap everything). This debate was entirely shaped by neoliberal schools of thought, not only by the officially neoliberal party (FDP), but also by essentially all other ruling parties (the Greens as well as the SPD), as well as the leading opposition party (CDU/CSU). I firmly believe that a well ran and reasonably strong government, government market participation (i.e. in terms of providing infrastructure) and market intervention (i.e. antitrust legislation and intervention) leads to a net benefit for the vast majority of people in a given economy. Also, especially in terms of something as fundamental fiscal & monetary policy many neoliberal discussions, for example those focussing around government debt, are demonstrably false. For economies that enjoy a large degree of autonomy, schools of thought like the modern monetary theory serve as much better frameworks to explain macroeconomics and are substantially more suitable to build a progressive economy.

zozbot234 3y ago
To the extent that "Modern money theory" makes any logical sense at all, it amounts to essentially a confused retelling of the fiscal theory of the price level (FTPL) - which explains precisely why it is important to keep the national debt under control.
- moooo99 3y ago
  > which explains precisely why it is important to keep the national debt under control. Nobody, including MMT, claims you shouldn't keep the national debt levels under control. But the reasons why you do it, to which extent you do it, and by which means you achieve that are vastly different. Take taxation as an example. Simplified, Neoliberal = taxes bad. MMT considers taxation to be an instrument to control demand and inflation (by proxy).
  - zozbot234 3y ago
    > But the reasons why you do it, to which extent you do it, and by which means you achieve that are vastly different. Not so: the two points of view boil down to the exact same thing logically, even though MMT proponents sometimes fail to highlight this. Again, see FTPL which precisely explains the logical consequences of what you referenced above ("taxation [as] an instrument to control demand and inflation") without abandoning the neo-liberal framework. Simplified, the fiscal stance (taxation + government spending) is indeed one factor in demand and inflation but the central bank "moves last" in that game, so we are free to let other considerations determine the best mix of taxation and spending. It's only when monetary intervention is ineffective that less conventional policies may be needed, for some reason or other. (Deep deflation, or hyperinflation would be examples of this.)
  - junofan 3y ago
    > Take taxation as an example. Simplified, Neoliberal = taxes bad. MMT considers taxation to be an instrument to control demand and inflation (by proxy). I mean oversimplifying is something we can do confidently after a set of ideas has lived up to the standards we expect from a macroeconomic framework. One big problem with MMT is that it’s been basically whatever Stephanie Kelton et al. says it is each time they hop on a podcast and argue for some policy positions. For a while it was hey spending more won’t cause inflation. It sounds like you’re saying now it’s hey taxation is how we control inflation? So with MMT it’s historically been difficult to make definite statements about anything and seems more a tool to argue for policy.

kjkjadksj 3y ago

For me it is the system the US had during the New Deal era and WWII. Central economic planning focused on need rather than profit. Jobs programs run by government organizations themselves over private contractors seeking profit margins. Massive investments in STEM education. Massive investments in public works, amenities, and institutions. Stipends for artists, musicians, and other creatives. Seems we Americans got much more for our tax dollar in this era versus perhaps any other.

zozbot234 3y ago
> For me it is the system the US had during the New Deal era and WWII. Central economic planning focused on need rather than profit. You do know that FDR's preferred economic system was overtly inspired by European fascism, right? You're literally saying that a fascist, authoritarian state and a wartime economy are the best we could possibly do. Excuse me but I'm a bit skeptical.
- kjkjadksj 3y ago
  As far as I am aware there were free elections during this time, kind of the exact opposite definition of what an autocracy is.