Russia in the 1980s..

[Lord Zentei]

Snipping points of agreement.

Though the problem arises if taxes and govermnent owned production can no longer pay for it.

Indeed. However, many of the world capitalist states - even the powerful ones - have been fiscally irresponsible too.

To be sure. Though the more the captialism has "matured" there, the more resilience against shocks brought about by such things they seem to posess. I doubt that any system can really eliminate human foolishness, though it might be able to migitate its effects.

In various parts of Europe, where the capitalistic system had matured over a long period, Communists, though a force to be reconed with politically, were never able to overturn the system, except where the Red Army aided them in so doing.

Europe, which has accumulated huge masses of capital in the initial accumulation (not last thanks to colonial robbery), was rather hard to assail - though things like the German revolution and Great Depression gave a quite good chance. And in Latin America and elsewhere, popular socialist movements not only have arisen without immediate Red Army help, but also continued into the future after the USSR itself collapsed.

Colonial "robbery" -- a mite harsh, though not entirely inaccurate.

Anyway: the point on Latin America is valid -- however, here too we were dealing with a situation with a sort of pseudo-capitalist/aristocratic mix: the capitalism, such as it was, was hardly mature.

In any case, the idea that a crisis in socialism should be solved by reverting to capitalism overnight seems utterly wrong. That's like treating a sick child with poison instead of finding and feeding him medicines.

"Overnight", certainly. Long-term is another matter.

Not a given, since energy efficiency is not a constant. Take a look at Chinese industries for instance (though they are energy importers, the point stands).

China is not a resource appendage - it's role is that of a "world factory". And their industries feed on energy of others. For example, Russia - whose own internal consumption has drastically fallen.

That does not eliminate the point: that investment in energy efficiency is a way around the problem you referenced.

You still would have been stuck with a huge infrastructure that would need upgrading

Correct. The problem here lies in the ability to introduce innovations into the industry. The idea that increasing raw production with the same level of technology means stagnation. But there were currents which lobbied the introduction of computerized automatization in the industry, for example, and other innovations.
Why was it important to upgrade on your own? Because if your country uses the "runner-up" mode of development, you would hardly ever become a leader in technological progress. You need to have your own top technologies for that. This gives your economy the potential to become an innovation economy.

However, using the "catch up" method is a lot quicker, and why waste time providing a technology that does something someone else already does better? You wouldn't be able to export it. While I am suspicious of quick fixes, utilizing existing knowledge resources is only reasonable. As the gap closes, new development can begin by degrees.

There is nothing inherently superior about how a megacorporation functions per se -- the cheif advantages of the capitalist system are negative feedback from the consumer and redundancy of providers. If everything is run by a single megacorporation, that disappears.

Negative feedback from the consumers is very important, but I don't see why such a system could not have been introduced in, say, an SFRY-type socialism. The idea that all should be state-owned creates a planned economy which is arguably too massive to handle. But I think making the light industry and services - the most important consumer good producers - owned in a cooperative style, with workers controlling the property and a fair competition of such cooperatives in the market could've reduced the deficiencies of the system.

I would see that as an interim step, at best. You would need more effective safety nets too -- under capitalism, if a company fails, a worker loses his job. However, under a collective, if a company fails, the worker loses his job and his investment-savings.

Another way for the negative feedback in a centralized owner economy can work, is if there are multiple production units inside it which compete with each other, and get ousted if they don't satisfy the public. The problem would be creating this many branches to compete - it would also greatly increase the requirements for feedback systems in the economy. And this needs introduction of a solid legal framework.

And it needs sound integrity from the beureaucrats -- moreso than is required under captialism. This, alas, is not guaranteed.

Consider: if a corporation owns several subsidiaries, one tends to be suspicious of claims made by the owner that the subsidiaries are playing fair by the competition laws and not making backroom deals. Though the socialist system is constructed with other objectives than profit (unless you count welfare as such), the people running it are no less human, and special interests will still arise.

[FSTargetDrone]

...and I think this concludes the bread tangent

Some pictures to augment the thread. Not from Russia, but Poland - 70s and 80s. Translation of the writing above each picture:

Well said. Now, let us break bread and speak of it no more.

Great pictures, incidentally. And the captions are most helpful! My favorite is the moonshine one. Hehe.

[K. A. Pital]

Snip.

Anyway: the point on Latin America is valid -- however, here too we were dealing with a situation with a sort of pseudo-capitalist/aristocratic mix: the capitalism, such as it was, was hardly mature.

Concentrating capitals requires lots of pre-conditions. And the problem of LA capitalism, just as of all periphery capitalism, especially as world movement of capitals has grown easier, is that it doesn't really need to mature. Capitalists can always store their property, even if it's criminally aquired, in foreign secure holdings, banks, etc. while acting in predatory fashion at home, where laws aren't protecting the economy from such actions. And do they have an incentive to improve the laws? NO. They don't have any common interest with the simple citizen of the land - they have all in common with capitalists elsewhere. No wonder they all just wait until they amass the needed capital and then flee off with their capital somewhere else.

Long-term is another matter.

If you use a long-term and wise transition methods, in the end you would have a far better result, obviously.

But needless to say, integrating into the world capitalist system is hard today. You will most likely be joined to the "periphery", which has the task of providing cheap labour, cheap raw material and cheap maintenance resources to the already historically formed centers of force. Sure, you can hope for a supervicious inflation cycle or debt-related default in America which would put them down but lift your yet-young economy to become the new "center"... but how much truth do such hopes hold?

That does not eliminate the point: that investment in energy efficiency is a way around the problem you referenced

Only up to a certain point. And does the West really _want_ to reduce it's own demands? You realize of course that making energy usage more efficient requires a lot of funds. The West has these funds, but resource appendage states? Oil and banana republics? Not really. They don't even have the level of technology to introduce such effective industry that it can operate on a minor fraction of their oil. On the contrary, the first developing industries are always very resource-consuming, wasteful, etc... so they would be invariably taking away from what is provided for the imports.

And with raw resources, it's an upper limit, a cap of how many you can produce - for both foreign demand and domestic one. So it's either A or B, but not both I fear. You should have very good control of your raw resource industry to be able to shift natural resources like that.

However, using the "catch up" method is a lot quicker, and why waste time providing a technology that does something someone else already does better? You wouldn't be able to export it.

That's the key problem here. You're not exporting this new technology - you're importing it. Someone else gets the dividends for that - not you. And you're not getting to become a technological leader, since what the FW is giving out to you is outdated tech, while the First World already enters a new technological cycle. Thus, you're bound to lag behind unless you create your own innovations in your own industries.

Also, importing someone's tech requires funds. Where do you get them? Your technologies, you don't sell. Thus, it's either natural resources or cheap labour... a rather grim payment way.

As the gap closes, new development can begin by degrees.

The problem is, the gap doesn't close. This has been illustrated quite well by China's example. It houses a lot of foreign technology, but it's own industries are somwhere on the 1960 Soviet Union technological level - metal production, energy refining, etc.

Exporting higher technology to lower-developed countries is greatly superior than importing it from higher-developed countries.

And the USSR had the ability to export it's outdated tech base to the Third World and China. The bad blood during Sino-Soviet split worsened this situation, and the West was able to "get there first". If instead China massively imported older Soviet tech, the revenue would have been quite big and it would've re-invigorated the economy.

You would need more effective safety nets too -- under capitalism, if a company fails, a worker loses his job. However, under a collective, if a company fails, the worker loses his job and his investment-savings.

You mean, if a cooperative fails? But that's one of the back sides of worker ownership. If you own it, you risk it. I think it's quite fair.

Though the socialist system is constructed with other objectives than profit (unless you count welfare as such), the people running it are no less human, and special interests will still arise.

Correct. Basically the idea of socialist system is to have people control the profits on capital and the capital itself collectively, then re-distribute 100% of profit for the good of the whole collective. If corruption does not hijack that, it's supposed to work. Efficient anti-bureaucratic methods are allowed by democratic mechanisms. However they were hijacked during the early years of Soviet Union as you know, and after that were not working (the Soviets I mean), when in fact they should've been the power supreme that installed and controlled the Government, one of the checks of Soviet power. Contemporary socialist theoretics also had proposed "consumer councils" as a counterforce, which would have the ability to exert some control over the legislatureand the government.

P.S. As a side note, what do you think about the socialist Kerala state in India?
http://en.wikipedia.org/wiki/Kerala_model

Kerala's per capita GDP—11,819 INR[40]—is significantly higher than the all-India average,[36] although it still lies far below the world average. Additionally, Kerala's Human Development Index and standard of living statistics are the nation's best.[41] This apparent paradox—high human development and low economic development—is often dubbed the "Kerala phenomenon" or the "Kerala model" of development,[42][43] and arises mainly from Kerala's strong service sector.

It's remarkable that it has been working inside a capitalist India and yet achieved very good results and built a strong service sector while at the same time implementing socialist policies.

[Lord Zentei]

Anyway: the point on Latin America is valid -- however, here too we were dealing with a situation with a sort of pseudo-capitalist/aristocratic mix: the capitalism, such as it was, was hardly mature.

Concentrating capitals requires lots of pre-conditions. And the problem of LA capitalism, just as of all periphery capitalism, especially as world movement of capitals has grown easier, is that it doesn't really need to mature. Capitalists can always store their property, even if it's criminally aquired, in foreign secure holdings, banks, etc. while acting in predatory fashion at home, where laws aren't protecting the economy from such actions. And do they have an incentive to improve the laws? NO. They don't have any common interest with the simple citizen of the land - they have all in common with capitalists elsewhere. No wonder they all just wait until they amass the needed capital and then flee off with their capital somewhere else.

Certainly easing of trade restrictions need to come hand in hand with international law and cooperation with enforcement.

But needless to say, integrating into the world capitalist system is hard today. You will most likely be joined to the "periphery", which has the task of providing cheap labour, cheap raw material and cheap maintenance resources to the already historically formed centers of force. Sure, you can hope for a supervicious inflation cycle or debt-related default in America which would put them down but lift your yet-young economy to become the new "center"... but how much truth do such hopes hold?

I daresay that hyperinflation and debt default is not the only hope for recourse periphery countries have! Providing cheap labour at least causes capital to enter the country, which in turn can provide growth and better long term prospects. See: India. In any case, the G-8 have recently dropped the debts of the world's poorest countries, that being one of the few things Bush can legitimately brag about.

That does not eliminate the point: that investment in energy efficiency is a way around the problem you referenced

Only up to a certain point. And does the West really _want_ to reduce it's own demands? You realize of course that making energy usage more efficient requires a lot of funds. The West has these funds, but resource appendage states? Oil and banana republics? Not really. They don't even have the level of technology to introduce such effective industry that it can operate on a minor fraction of their oil. On the contrary, the first developing industries are always very resource-consuming, wasteful, etc... so they would be invariably taking away from what is provided for the imports.

And with raw resources, it's an upper limit, a cap of how many you can produce - for both foreign demand and domestic one. So it's either A or B, but not both I fear. You should have very good control of your raw resource industry to be able to shift natural resources like that.

Then you have part of your project statement.

Anyway: the third world is nowhere near their limit on natural resource production (except in oil, alas, though other forms of energy exist).

However, using the "catch up" method is a lot quicker, and why waste time providing a technology that does something someone else already does better? You wouldn't be able to export it.

That's the key problem here. You're not exporting this new technology - you're importing it. Someone else gets the dividends for that - not you. And you're not getting to become a technological leader, since what the FW is giving out to you is outdated tech, while the First World already enters a new technological cycle. Thus, you're bound to lag behind unless you create your own innovations in your own industries.

Also, importing someone's tech requires funds. Where do you get them? Your technologies, you don't sell. Thus, it's either natural resources or cheap labour... a rather grim payment way.

Someone else getting dividends is not a catastrophic issue, frankly, as long as you are upgrading your tech base. It is a means to an end, not a permanent condition. Moreover, you may encourage the high-tech country to invest in your own as this provides employment and influx of foreign capital if you play your cards right.

As the gap closes, new development can begin by degrees.

The problem is, the gap doesn't close. This has been illustrated quite well by China's example. It houses a lot of foreign technology, but it's own industries are somwhere on the 1960 Soviet Union technological level - metal production, energy refining, etc.

Not so: though much of the tech base is outdated, the Chinese economy is advancing more rapidly in that regard than more isolationistic countries.

Exporting higher technology to lower-developed countries is greatly superior than importing it from higher-developed countries.

If only for bang for the buck, perhaps, Otherwise I'd disagree here.

You would need more effective safety nets too -- under capitalism, if a company fails, a worker loses his job. However, under a collective, if a company fails, the worker loses his job and his investment-savings.

You mean, if a cooperative fails? But that's one of the back sides of worker ownership. If you own it, you risk it. I think it's quite fair.

For the capitalist who could still support himself after losing much of his hodlings and who can still have another job concurrently with being a capitalist, I'd agree. But for the worker who has little other recource -- that's a bit harsh, when it is possible for him to place his savings in another company. I.e. it is wise not to put all your eggs in one basket.

Though the socialist system is constructed with other objectives than profit (unless you count welfare as such), the people running it are no less human, and special interests will still arise.

Correct. Basically the idea of socialist system is to have people control the profits on capital and the capital itself collectively, then re-distribute 100% of profit for the good of the whole collective. If corruption does not hijack that, it's supposed to work. Efficient anti-bureaucratic methods are allowed by democratic mechanisms. However they were hijacked during the early years of Soviet Union as you know, and after that were not working (the Soviets I mean), when in fact they should've been the power supreme that installed and controlled the Government, one of the checks of Soviet power. Contemporary socialist theoretics also had proposed "consumer councils" as a counterforce, which would have the ability to exert some control over the legislatureand the government.

So, the propensity of corruption among councils is to be countered by more councils? I find that a bit suspect. In any case, much of the problem was inertia of the complex system of interconnected comittees.

[K. A. Pital]

Certainly easing of trade restrictions need to come hand in hand with international law and cooperation with enforcement.

Putting capitalists in power in such countries often makes the people's plight worse precisely because they aren't interested in strengthening the laws, improving the investment terms and all that. Easing trade restrictions creates more trade - but it doesn't correlate with production, as some people sadly, have found out.

Providing cheap labour at least causes capital to enter the country, which in turn can provide growth and better long term prospects. See: India.

Sure, attracting capital is better than losing it. That's why China and India enjoy a measure of success in their policies. But I didn't bring up the Kerala state for nothing. Despite India's growth, the best living standards are in a poorer, but socialist state - and quite for a long time.

In any case, the G-8 have recently dropped the debts of the world's poorest countries, that being one of the few things Bush can legitimately brag about.

That's a good step, in the right direction, I agree. However much I dislike Bush.

Anyway: the third world is nowhere near their limit on natural resource production (except in oil, alas, though other forms of energy exist).

Aren't oil, coal and gas all roughly on the same line? And since the demand from abroad grows, not falls, isn't this sort of "eating away" from the possible internal growth? Why all "banana republics" have had decades to diversify their industries, etc. but still they are very poor and their economy hinges on raw material exports? Surely there's an explanation for such unwillingness to invest in own economy anywhere beyond the raw resource extraction industry?

It is a means to an end, not a permanent condition. Moreover, you may encourage the high-tech country to invest in your own as this provides employment and influx of foreign capital if you play your cards right.

Sure. I merely said that simply importing technologies without trying to create your own higher technologies (via joint ventures, imports, whatnot) isn't going to lift you out of the bog, since you'll be always behind. And your own tech level (that is the technology you can create and maintain yourself) would always be below. How many Chinese specialists use Western machinery? Lots. How many of them can reverse engineer and manufacture similar machinery? Not many.

Not so: though much of the tech base is outdated, the Chinese economy is advancing more rapidly in that regard than more isolationistic countries.

Well, clearly it is - the Chinese have also made efforts to create their own high tech industry and reverse-engineer foreign technology. Still, this hasn't yet given them the First World tech level, while the First World IMHO is already entering a new technological cycle.

If only for bang for the buck, perhaps, Otherwise I'd disagree here.

Becoming a technology and innovation leader is the key to prosperity. For example, Finland has become what it is now through creating a strong innovation&high-tech sector - before that, it used to be a resource economy. Innovations have created a staggering difference and lifted the economy up. If you're on the forward brink, the rest of the world would be forced to take technology from you. If you're backwards, no one needs your technology and you're forced to take someone's superior tech in exchange for something else.

But for the worker who has little other recource -- that's a bit harsh, when it is possible for him to place his savings in another company. I.e. it is wise not to put all your eggs in one basket.

Well, the worker can have savings accounts for such cases, can he not?

So, the propensity of corruption among councils is to be countered by more councils? I find that a bit suspect.

Hmm. I don't think the corruption among councils was the issue. The problem was the dictate of the Politbureau which essentially made the councils a rubberstamp for it's decisions. In principle, the council system (electing deputees from lower councils to higher) isn't that complicated, I think. It just needs to have the ability to act more independently and control the Government, not the other way around.

In any case, much of the problem was inertia of the complex system of interconnected comittees.

Indeed. Some of the leaders realized this as well. In the 1980 Andropov proposed to cut down and re-structure the government and comittees because it was becoming bloated and could not adequately exchange information between it's divisions.

[Lord Zentei]

Certainly easing of trade restrictions need to come hand in hand with international law and cooperation with enforcement.

Putting capitalists in power in such countries often makes the people's plight worse precisely because they aren't interested in strengthening the laws, improving the investment terms and all that. Easing trade restrictions creates more trade - but it doesn't correlate with production, as some people sadly, have found out.

Trade creates the means, not the end. Of course, social progress must go hand in hand with any such measures that are taken -- otherwise it can very easily become counterproductive. However, the utility of trade remains.

Providing cheap labour at least causes capital to enter the country, which in turn can provide growth and better long term prospects. See: India.

Sure, attracting capital is better than losing it. That's why China and India enjoy a measure of success in their policies. But I didn't bring up the Kerala state for nothing. Despite India's growth, the best living standards are in a poorer, but socialist state - and quite for a long time.

India's growth has been slower to start up than China, to be sure. However, the two countries are also dissimilar in many ways, India possessing a far more polyglot culture and that abonimable Caste system, for instance. Neither did the religious tensions there help much. Moreover, China had some attempts at creating a modern society before the '49 revolution, whereas India was a resource appendage until its independance in '45. So they are really pretty different.

Anyway: the third world is nowhere near their limit on natural resource production (except in oil, alas, though other forms of energy exist).

Aren't oil, coal and gas all roughly on the same line? And since the demand from abroad grows, not falls, isn't this sort of "eating away" from the possible internal growth? Why all "banana republics" have had decades to diversify their industries, etc. but still they are very poor and their economy hinges on raw material exports? Surely there's an explanation for such unwillingness to invest in own economy anywhere beyond the raw resource extraction industry?

Oil and gas are more or less on the same line, though coal is less so. Of course, that is is a temporary fix.

However, I was thinking about three things: first, locally viable renewables and nuclear. The latter requires an advanced tech base, of course, but the former less so. Second, the fuel efficiency of plants using fossil fuels in third world countries is deplorable in many cases -- improvement here would create some leeway. Third, it is possible to invest in sectors that have lower energy requirements.

As for unwillingness in investing in one's own economy in the third world; I guess making a quick buck selling raw materials is easier, quicker and more seductive, given short term profit interests.

It is a means to an end, not a permanent condition. Moreover, you may encourage the high-tech country to invest in your own as this provides employment and influx of foreign capital if you play your cards right.

Sure. I merely said that simply importing technologies without trying to create your own higher technologies (via joint ventures, imports, whatnot) isn't going to lift you out of the bog, since you'll be always behind. And your own tech level (that is the technology you can create and maintain yourself) would always be below. How many Chinese specialists use Western machinery? Lots. How many of them can reverse engineer and manufacture similar machinery? Not many.

I think we had this same discussion some time ago.

Of course innovation is crucial to progress. Successful economies need more than just capital and labour. It's just that you need to focus your innovation in key areas, and to make it work, you need a capital resource base. To acheive that you can use the catch up effect.

Not so: though much of the tech base is outdated, the Chinese economy is advancing more rapidly in that regard than more isolationistic countries.

Well, clearly it is - the Chinese have also made efforts to create their own high tech industry and reverse-engineer foreign technology. Still, this hasn't yet given them the First World tech level, while the First World IMHO is already entering a new technological cycle.

Not yet, of course. And obviously the first world will continue to advance as much as it can... as long as the gap continues to be diminished that's all right, though.

If only for bang for the buck, perhaps, Otherwise I'd disagree here.

Becoming a technology and innovation leader is the key to prosperity. For example, Finland has become what it is now through creating a strong innovation&high-tech sector - before that, it used to be a resource economy. Innovations have created a staggering difference and lifted the economy up. If you're on the forward brink, the rest of the world would be forced to take technology from you. If you're backwards, no one needs your technology and you're forced to take someone's superior tech in exchange for something else.

Indeed, it seems we're a bit out of phase in our conversation. For my response, see two posts up.

But for the worker who has little other recource -- that's a bit harsh, when it is possible for him to place his savings in another company. I.e. it is wise not to put all your eggs in one basket.

Well, the worker can have savings accounts for such cases, can he not?

Well yes, but ownership of the company one is working in would still account for a large portion of one's savings if it were to be a meaningful fraction of the shares.

So, the propensity of corruption among councils is to be countered by more councils? I find that a bit suspect.

Hmm. I don't think the corruption among councils was the issue. The problem was the dictate of the Politbureau which essentially made the councils a rubberstamp for it's decisions. In principle, the council system (electing deputees from lower councils to higher) isn't that complicated, I think. It just needs to have the ability to act more independently and control the Government, not the other way around.

Well, fair enough, wrong allegation.

Inefficiency and inflexibility I should have said; the same response holds, though.

And inefficiency and inflexibility breeds corruption which exasperates the problem -- that is true regardless of which system you're using. Negative feedback and transparency diminishes it to be sure, though efficiency and flexibility as well are better.

In any case, much of the problem was inertia of the complex system of interconnected comittees.

Indeed. Some of the leaders realized this as well. In the 1980 Andropov proposed to cut down and re-structure the government and comittees because it was becoming bloated and could not adequately exchange information between it's divisions.

Unfortunately, too little, too late.

[K. A. Pital]

However, the utility of trade remains.

Quite so. Trade should be developing along with production.

India's growth has been slower to start up than China, to be sure. However, the two countries are also dissimilar in many ways, India possessing a far more polyglot culture and that abonimable Caste system, for instance. Neither did the religious tensions there help much. Moreover, China had some attempts at creating a modern society before the '49 revolution, whereas India was a resource appendage until its independance in '45. So they are really pretty different.

But they have one thing in common, that is, attracting capitals through cheap labour.

However, I was thinking about three things: first, locally viable renewables and nuclear. The latter requires an advanced tech base, of course, but the former less so. Second, the fuel efficiency of plants using fossil fuels in third world countries is deplorable in many cases -- improvement here would create some leeway. Third, it is possible to invest in sectors that have lower energy requirements.

Nukes are off-table for lowly countries (look at exploding centrifuges in Iran), and require lots of investment. The local renewables? You mean hydroelectric power? I'm just interested, how intensively the Third World uses hydroelectricity? Because hydroelectric power was a big thing in the USSR, and other socialist countries - in fact, the whole massive hydroelectric infrastructure we have today is the legacy of the Union. I also know Brazil has been building some huge dams, but I don't know how advanced their use of hydro power is by now.

And the third option is dangerous. Developed economies had a high energy consumption for their massive industries, which they later lowered through conservation technologies. Denying development to energy-intensive sectors from start means butchering your industry with your own hands (fair enough, that's what happens in some places). For an agrarian country, for example, this approach is unacceptable - it will stay agrarian and backwards forever, if it doesn't build the energy-intensive industry, urbanize, etc.

As for unwillingness in investing in one's own economy in the third world; I guess making a quick buck selling raw materials is easier, quicker and more seductive, given short term profit interests.

A capitalist, even behaving rationally, would be leaning towards this option by default. Dependency would arise unless the government invests into the diversification of the economy in such a scenario.

It's just that you need to focus your innovation in key areas, and to make it work, you need a capital resource base. To acheive that you can use the catch up effect.

I agree here, of course. The problem I was speaking about is that the country that has a lower tech level loses incentive to develop own industry and starts living on foreign imports without any own innovations. This is not uncommon in less developed countries.

Well yes, but ownership of the company one is working in would still account for a large portion of one's savings if it were to be a meaningful fraction of the shares.

Yes, true. The alternative is to make companies themselves nationalized, but the profit controlled by the cooperatives. I don't know how well that would work, but I think there are a few working examples of such approach.

Inefficiency and inflexibility I should have said

A more reasonable claim. But why are the council systems inflexible?

Unfortunately, too little, too late.

Yeah, late - and he also died rather soon. With Gorbachov, the fate was almost sealed - he lost control over the processes he launched.

[Lord Zentei]

India's growth has been slower to start up than China, to be sure. However, the two countries are also dissimilar in many ways, India possessing a far more polyglot culture and that abonimable Caste system, for instance. Neither did the religious tensions there help much. Moreover, China had some attempts at creating a modern society before the '49 revolution, whereas India was a resource appendage until its independance in '45. So they are really pretty different.

But they have one thing in common, that is, attracting capitals through cheap labour.

That's true. India had to jump through more hoops to get its development going, however.

Nukes are off-table for lowly countries (look at exploding centrifuges in Iran), and require lots of investment. The local renewables? You mean hydroelectric power? I'm just interested, how intensively the Third World uses hydroelectricity? Because hydroelectric power was a big thing in the USSR, and other socialist countries - in fact, the whole massive hydroelectric infrastructure we have today is the legacy of the Union. I also know Brazil has been building some huge dams, but I don't know how advanced their use of hydro power is by now.

Well, there are locally relevant methods such as Brazil's biofuel approach; that might be viable in parts of Africa, for instance. As for nukes, I did take those off the table myself, though I understand that Russia is planning on mobile seaborne reactors?

In any case, no one source is going to dominate.

And the third option is dangerous. Developed economies had a high energy consumption for their massive industries, which they later lowered through conservation technologies. Denying development to energy-intensive sectors from start means butchering your industry with your own hands (fair enough, that's what happens in some places). For an agrarian country, for example, this approach is unacceptable - it will stay agrarian and backwards forever, if it doesn't build the energy-intensive industry, urbanize, etc.

It will find it harder to do that with energy shortages given existing consumption. As you said yourself, the first world is not going to reduce its consumption.

As for unwillingness in investing in one's own economy in the third world; I guess making a quick buck selling raw materials is easier, quicker and more seductive, given short term profit interests.

A capitalist, even behaving rationally, would be leaning towards this option by default. Dependency would arise unless the government invests into the diversification of the economy in such a scenario.

By default, perhaps, unless there are prospects for local investment and innovation -- legal as well as social conditions. India and east Asia managed to do this, thus it is not an impossibility. I would surmise that smaller investors would also be less likely to invest abroad than large and powerful ones, thus initially life should be made easier for small business, allowing growth from there.

Inefficiency and inflexibility I should have said

A more reasonable claim. But why are the council systems inflexible?

Need you ask? How much harder is it for an idea to pass muster through a network of official commitees rather than by individual enterprise?

[K. A. Pital]

Well, there are locally relevant methods such as Brazil's biofuel approach; that might be viable in parts of Africa, for instance. As for nukes, I did take those off the table myself, though I understand that Russia is planning on mobile seaborne reactors?

Russia has nuclear technology from Soviet times which is still operates and can build (several reactors were launched in post-Soviet times). Many other countries don't have this luxury. Besides, nuclear energy is an official priority of the Russian government.

In any case, no one source is going to dominate.

Aren't fossil fuels (oil and gas) really dominating the current consumption in the US? I know that even heavily relying on hydro, USSR and China managed barely to make 4-5% of energy consumption of it - most was still fossil fuels, just like in the larger Western countries.

It will find it harder to do that with energy shortages given existing consumption.

Of course. But it can, well... territorially move those shortages to someone elses' territory. The ire of the First World at someone cutting the export quotas in favour of own industries would be great, but...

India and east Asia managed to do this, thus it is not an impossibility.

They're net importers of capital, helped by incredibly cheap labour. Once this levels out, they would face a real crisis in innovations and sustainability of growth.

I would surmise that smaller investors would also be less likely to invest abroad than large and powerful ones, thus initially life should be made easier for small business, allowing growth from there.

Well, correct, but... still, even owners of small shops manage to get out of Russia (with capitals) after using the business for 2-3 years. That's not normal. They clearly have enough profits and capitals to move out, but they're unwilling to run businesses here.

How much harder is it for an idea to pass muster through a network of official commitees rather than by individual enterprise?

Don't know. But I haven't seen innovation economy to spring without either the government or supercorporations heavily devoting to innovations, so the efficiency of "individual enterprise" here is questionable. It often doesn't have the funds to do it in the first place. Most of the West's successes, even in the private sector, were crafted by clever government policies and point investment.

[Lord Zentei]

Well, there are locally relevant methods such as Brazil's biofuel approach; that might be viable in parts of Africa, for instance. As for nukes, I did take those off the table myself, though I understand that Russia is planning on mobile seaborne reactors?

Russia has nuclear technology from Soviet times which is still operates and can build (several reactors were launched in post-Soviet times). Many other countries don't have this luxury. Besides, nuclear energy is an official priority of the Russian government.

Yes, indeed. I was thinking about the mobile reactors that were referenced in a recent thread, and whether those could be leased. But naturally, nuklear is going to be a limited club for the forseeable future.

In any case, no one source is going to dominate.

Aren't fossil fuels (oil and gas) really dominating the current consumption in the US? I know that even heavily relying on hydro, USSR and China managed barely to make 4-5% of energy consumption of it - most was still fossil fuels, just like in the larger Western countries.

It is, alas, due to the nuke-phobia there. I meant that no one source would dominate in 3W countries.

India and east Asia managed to do this, thus it is not an impossibility.

They're net importers of capital, helped by incredibly cheap labour. Once this levels out, they would face a real crisis in innovations and sustainability of growth.

Hopefully, by then they will have made their economy flexible enough and their workforce educated enough to be able to sustain their progress. Even highly skilled professionals there are dirt cheap; see the numbers of engineers India is churning out. And if 1W countries place barriers on immigration and recognition of their diplomas, they'll only force these experts to be employed abroad.

I would surmise that smaller investors would also be less likely to invest abroad than large and powerful ones, thus initially life should be made easier for small business, allowing growth from there.

Well, correct, but... still, even owners of small shops manage to get out of Russia (with capitals) after using the business for 2-3 years. That's not normal. They clearly have enough profits and capitals to move out, but they're unwilling to run businesses here.

Ugh. Well the situation was pretty disastrous as a result of the "miracle cure" formulae that were attempted. And once that has started, pessimism can be a self-fulfilling prophecy.

How much harder is it for an idea to pass muster through a network of official commitees rather than by individual enterprise?

Don't know. But I haven't seen innovation economy to spring without either the government or supercorporations heavily devoting to innovations, so the efficiency of "individual enterprise" here is questionable. It often doesn't have the funds to do it in the first place. Most of the West's successes, even in the private sector, were crafted by clever government policies and point investment.

No doubt government policies and point investments are needed. But that's not to say that for the economy overall to be organized into a committee system and collectivism is the right conclusion -- even given consumer commeitees to check them.

[K. A. Pital]

I was thinking about the mobile reactors that were referenced in a recent thread, and whether those could be leased.

Leased? Quite possibly. But will this help the tech level of the other country? Who knows.

I meant that no one source would dominate in 3W countries.

They're industrializing rather slowly because of this.

Even highly skilled professionals there are dirt cheap; see the numbers of engineers India is churning out. And if 1W countries place barriers on immigration and recognition of their diplomas, they'll only force these experts to be employed abroad.

Well, probably. Though I don't think those people would really bear being dirt-cheap for their whole lifes - not even speaking of the new generation. They would question the pay. India suffers from a severe brain drain, actually, doesn't it?

And once that has started, pessimism can be a self-fulfilling prophecy.

Vicious cycles, eh? Usually they are broken through government internvetion. But hte current government is sort of inept on that. It keeps speaking about the need to invest into the home economy, but itself does little for that.. Keeping all the money in foreign funds. This just raises much suspicion from the population - aren't they going to wait for a next default and then run abroad with the money, like the first ones did?

But that's not to say that for the economy overall to be organized into a committee system and collectivism is the right conclusion -- even given consumer commeitees to check them.

Collectivism and individualism both have their successes. The key idea is to find a proper balance. You don't need the whole economy running as a state sector. Nontheless, many European economies have had very high shares of state sector during their peak years - like the FRG, for example, or Scandinavia. On the other hand, several socialist countries created a market sector in addition to the state sector (SFRY) to cover it's deficiencies. The solution is not simply "privatize" or "nationalize".

[Lord Zentei]

I meant that no one source would dominate in 3W countries.

They're industrializing rather slowly because of this.

That they are, unfortunately. However, competing with the 1W for fossil fuels is going make it neccesary, I fear.

Even highly skilled professionals there are dirt cheap; see the numbers of engineers India is churning out. And if 1W countries place barriers on immigration and recognition of their diplomas, they'll only force these experts to be employed abroad.

Well, probably. Though I don't think those people would really bear being dirt-cheap for their whole lifes - not even speaking of the new generation. They would question the pay. India suffers from a severe brain drain, actually, doesn't it?

Well, of course, they souldn't be dirt cheap indefinately! Though for the short term, it will promote additional investments. Though India suffers a brain drain, are they not producing more experts than they are losing, or is that a misaprehension?

And once that has started, pessimism can be a self-fulfilling prophecy.

Vicious cycles, eh? Usually they are broken through government internvetion. But hte current government is sort of inept on that. It keeps speaking about the need to invest into the home economy, but itself does little for that.. Keeping all the money in foreign funds. This just raises much suspicion from the population - aren't they going to wait for a next default and then run abroad with the money, like the first ones did?

Ah, well, I cannot predict what they will do. At present it seems Putin wants to consolidate state control over certain businesses, though whether he'll run them any better is another issue.

More work on the business climate and a more sound banking system would be helpful, though. You'll need those if you want to people to become enterpreteurs. If you want people to invest locally, then creating conditions favourable to this is the first order of business for a government.

But that's not to say that for the economy overall to be organized into a committee system and collectivism is the right conclusion -- even given consumer commeitees to check them.

Collectivism and individualism both have their successes. The key idea is to find a proper balance. You don't need the whole economy running as a state sector. Nontheless, many European economies have had very high shares of state sector during their peak years - like the FRG, for example, or Scandinavia. On the other hand, several socialist countries created a market sector in addition to the state sector (SFRY) to cover it's deficiencies. The solution is not simply "privatize" or "nationalize".

Indeed, a mixed approach seems to be the correct path.

[K. A. Pital]

That they are, unfortunately. However, competing with the 1W for fossil fuels is going make it neccesary, I fear.

Well, you can always risk confronting the First World about it. The maximum that you will have to fear is a coup. Sadly, this is the way many "unperson" leaders were deposed of.

Well, of course, they souldn't be dirt cheap indefinately!

Of course. But then they will become "uncompetitive".

Though India suffers a brain drain, are they not producing more experts than they are losing, or is that a misaprehension?

Depends on what sector we take. India's brain drain is a minor figure from all graduates in India (a minor percent, ~4% IIRC), but without any doubt these are the most skilled specialists. Several innovation specialist sectors would be totally emptied via this mechanism (over 80% of those who are gone via brain drain from China or India never come back).

But India indeed has it better than, say, some Latin American countries which have 60-80% of their graduates leave in the brain drain. The impact of such enormous drain must be terifficaly damaging to both human potential and innovations.

If you want people to invest locally, then creating conditions favourable to this is the first order of business for a government.

This would require much less corruption in the first place, and devotion of significant funds in the first place to make industries at least somewhat attractive for domestic investors - and a lot of additional effort, given Russia's unfavourable geo-climatic conditions (extreme temperatures both in summer and winter, far-spread cities and super-expensive intercity infrastructure) - even if asserting theoretically equal productivity of labour, a country that has greater share of spending on intercity infrastructure, will be poorer - and Russia's intercity communication is an extremely heavy burden, which is born in the worst possible climate...

But today's capitalist elites of Russia do not want to get rid of corruption, they have absolutely no incentive to do it because due to corruption, they can completely control the power via monetary capitals.

[Lord Zentei]

That they are, unfortunately. However, competing with the 1W for fossil fuels is going make it neccesary, I fear.

Well, you can always risk confronting the First World about it. The maximum that you will have to fear is a coup. Sadly, this is the way many "unperson" leaders were deposed of.

With the G-8 action, one can have some hope that such behaviour is on the wane (ha). The necessity is to create better cooperation through the international trading forums.

Well, of course, they souldn't be dirt cheap indefinately!

Of course. But then they will become "uncompetitive".

Ah, the Russian pessimism. India can increase their labour costs as their manufacturing infrastructure gradually improves. This will of course not happen overnight, however.

Let's see: India has a GDP/Capita of $3300, with an annual growth of 7%, the EU has $28000 (factor of 9.3) with an annual growth of 2% or so (5% less); with that, India can hope to close the gap in... uh, about 45 years. They will, of course, experience a slowdown in the interim (as they catch up), so It may be longer than that, of course. They'll reach the level of where Turkey is now in less than a generation, though.

Though India suffers a brain drain, are they not producing more experts than they are losing, or is that a misaprehension?

Depends on what sector we take. India's brain drain is a minor figure from all graduates in India (a minor percent, ~4% IIRC), but without any doubt these are the most skilled specialists. Several innovation specialist sectors would be totally emptied via this mechanism (over 80% of those who are gone via brain drain from China or India never come back).

Regardless of whether these 4% are the most skilled (3.2% if you include these 20% that return), I daresay that such a low percentage indicates that India is on the right track.

But India indeed has it better than, say, some Latin American countries which have 60-80% of their graduates leave in the brain drain. The impact of such enormous drain must be terifficaly damaging to both human potential and innovations.

Ugh. And we see clearly the crucial importance of creating a favourable environment for innovation and applications of skills. But if India can do it, logically Latin America shouldn't find it impossible. The difference is politics.

If you want people to invest locally, then creating conditions favourable to this is the first order of business for a government.

This would require much less corruption in the first place, and devotion of significant funds in the first place to make industries at least somewhat attractive for domestic investors - and a lot of additional effort, given Russia's unfavourable geo-climatic conditions (extreme temperatures both in summer and winter, far-spread cities and super-expensive intercity infrastructure) - even if asserting theoretically equal productivity of labour, a country that has greater share of spending on intercity infrastructure, will be poorer - and Russia's intercity communication is an extremely heavy burden, which is born in the worst possible climate...

But today's capitalist elites of Russia do not want to get rid of corruption, they have absolutely no incentive to do it because due to corruption, they can completely control the power via monetary capitals.

Well, as to that, I imagine that a socialist government needn't be much better, judging by history and as it can be likened to a corporation -- a legally monopolistic one, at that.

I guess the best I can say is "best of luck", and warn that "pessimissm is a self fulfilling prophecy".

[K. A. Pital]

The necessity is to create better cooperation through the international trading forums.

WTO and GATT are extremely one-sided. That is, First World-sided.

They'll reach the level of where Turkey is now in less than a generation, though.

Large GDP per capita due to superprofit of several businesses but dirt poor people isn't uncommon. Aiming for the Wests' GDP per capital levels but failing to improve living standards can result in nasty things. Social collapse, supermonopolic oligarchies, defaults... Russia has a GDP per capita of $12,100, but an over-tenfold difference in average wages...
Let's compare Indian wages to EU wages. The wage gap would be 80 USD versus several thousand USD.

And you claim that GDP growth wof 7% annual ill fix that in 45 years? This is already a very long term - but you're correct, effectively as people will demand greater wages, all this growth (which isn't that impressive either, it isn't a double-digit superboom or anything, just 3 times greater than the average Western growth)... will slow down.

So when will India's people have wages and life level comparable to the West? I'm afraid several generations would die before that happens... if it happens at all.

I daresay that such a low percentage indicates that India is on the right track.

It's just that the demand for indian specialists is sector-specific, as well as their successes. Also, the population numbers...

But if India can do it, logically Latin America shouldn't find it impossible. The difference is politics.

India tries to install a decent wide education system which leaves a significan amount of graduates. On the other hand, several Latin American countries either lack them, had destroyed them, or haven't even built them. I don't know which idiot thought that privatizing education in developing countries is a good idea, but the practice of such acts has been hideous.

Note also that demand of brain drain is also capped. They take millions from India, millions from Latin America. But there's a difference between taking millions from a 700 million country and a 20-30 million one. In one case, you take a measly fraction of it's educated people and from a single sector. In the other case, you take _all_ of it's educated people.

Well, as to that, I imagine that a socialist government needn't be much better, judging by history and as it can be likened to a corporation -- a legally monopolistic one, at that.

Levels of corruption in Soviet government, even Brezhnew era, never achieved such enormous scale as today.
And in several places socialists are running the territories entrusted to them far superior and less corrupt than the surrounding capitalists, like the aforementioned Kerala.

[Lord Zentei]

The necessity is to create better cooperation through the international trading forums.

WTO and GATT are extremely one-sided. That is, First World-sided.

Currently? Yes, I know.

They'll reach the level of where Turkey is now in less than a generation, though.

Large GDP per capita due to superprofit of several businesses but dirt poor people isn't uncommon. Aiming for the Wests' GDP per capital levels but failing to improve living standards can result in nasty things. Social collapse, supermonopolic oligarchies, defaults... Russia has a GDP per capita of $12,100, but an over-tenfold difference in average wages...
Let's compare Indian wages to EU wages. The wage gap would be 80 USD versus several thousand USD.

Obviously rapid growth can lead to greater concentration of wealth. I daresay I haven't denied that.

And you claim that GDP growth wof 7% annual ill fix that in 45 years? This is already a very long term - but you're correct, effectively as people will demand greater wages, all this growth (which isn't that impressive either, it isn't a double-digit superboom or anything, just 3 times greater than the average Western growth)... will slow down.

So when will India's people have wages and life level comparable to the West? I'm afraid several generations would die before that happens... if it happens at all.

You find two generations to be an implausible figure? I had actually mentioned the inevitable slowdown... if the growth gap is proportional to the difference in GDP, it will be more on the order of 3-4 generations. By that token, two generations will bring to where Bulgaria is now.

I daresay that such a low percentage indicates that India is on the right track.

It's just that the demand for indian specialists is sector-specific, as well as their successes. Also, the population numbers...

Obviously they are sector specific; that is inevitable. It does not detract from the value of the success.

Note also that demand of brain drain is also capped. They take millions from India, millions from Latin America. But there's a difference between taking millions from a 700 million country and a 20-30 million one. In one case, you take a measly fraction of it's educated people and from a single sector. In the other case, you take _all_ of it's educated people.

Latin America overall has a population of some 500 million, though.

[K. A. Pital]

Obviously rapid growth can lead to greater concentration of wealth.

Which would make the workers, um, to question the benefits of this growth for them. The fact that a poorer, GDP/Capita wise, but socialist state in India is doing better than the rest of the country is indicating a need for re-distribution IMHO.

if the growth gap is proportional to the difference in GDP, it will be more on the order of 3-4 generations.

You mean wage gap? And 3-4 generations, that's an entire century. By that time, the Western technologies will be on a totally new level. I don't know if the "gap" will be "closed" at all, that is, decisively achieving the same level in "developing" countries as it is in "developed" ones.

Latin America overall has a population of some 500 million, though.

Yes. And countries with a bigger population and wider education systems in Latin America are somewhat better off - they have a large population to start with and from this they have large number of educated people coming, so that the rate of brain drain constitutes a small percentage of their educated people. Countries with smaller populations however are more threatened - they're the ones experiencing the 60-80% drain.

Actually, I think Latin America would've benefitted from some sort of Pan-LA intergration a-la EU. (all hail the ULASSR )

[Lord Zentei]

Obviously rapid growth can lead to greater concentration of wealth.

Which would make the workers, um, to question the benefits of this growth for them. The fact that a poorer, GDP/Capita wise, but socialist state in India is doing better than the rest of the country is indicating a need for re-distribution IMHO.

Well, there we have the omniprescent balance between growth and distribution. South Korea managed rapid growth and is now in the OECD, though their methods were pretty damned draconian for a couple of generations.

if the growth gap is proportional to the difference in GDP, it will be more on the order of 3-4 generations.

You mean wage gap? And 3-4 generations, that's an entire century. By that time, the Western technologies will be on a totally new level. I don't know if the "gap" will be "closed" at all, that is, decisively achieving the same level in "developing" countries as it is in "developed" ones.

Naw, I was going by GDP/capita (though it is not a hard measure of wage of course, unless you also work on local wealth disparity). And, I took into account growth in the west also: given country A grows at X%, and a poorer country B grows at a higher rate Y%, B catches up at a rate of (Y-X)%

Oh, and agreed on the benefits for an EU style intergration of Latin America.

[K. A. Pital]

South Korea managed rapid growth and is now in the OECD

Heh. SK's "draconian" methods were Five-Year economic plans with point investment into key industries that have been selected by the Economic Planning Board (which had very wide powers over the businesses in SK). SK's government had a very strong hand over banking, industrial construction. I guess it's not exactly a result of the markets behaving on their own being left to control from foreign powers (SK controlled own markets, driving them for first industrial exports and then high tech exports).

The government essentially introduced measures which were taking SK down the success road, first betting on industrialization, then creating the high tech industry - all rather risky, with very high foreign debts and a dependency on foreign investment.

The project could've suffered a collapse at several points (thankfully, all worked out for SK).

Following the Korean War, foreign aid became the most important source of funds for the reconstruction and rehabilitation of the economy. What was left of the Japanese built industrial plant, most of which by the 1950s either was obsolete or had been destroyed by warfare), generally was turned over to private owners, who were chosen more often for their political loyalty than for their economic acumen. Moreover, Rhee favored certain businessmen and companies with government contracts in exchange for financial support of his political endeavors. It was during this period that a group of entrepreneurs began companies that later became the chaebol, or business conglomerates. The chaebol were groups of specialized companies with interrelated management. These groupings of affiliated companies dominated South Korea's economy in the late 1980s and often included businesses involved in heavy and consumer industries and electric and electronic goods, as well as trading companies and real estate and insurance concerns.

The chaebol were responsible for the successful expansion of South Korea's export capacity. According to Steinberg, in 1987 the revenues of the four largest chaebol were US$80.7 billion, a figure equivalent to two thirds of Seoul's total GNP. In that year, the Samsung Group had revenues of US$24 billion; Hyundai, US$22.7 billion; Daewoo, US$16 billion; and Lucky-Goldstar, US$18 billion. The revenues of the next largest chaebol, Sunkyong, totaled US$7.3 billion in 1987. The top ten chaebol represented 40 percent of all bank credit in South Korea, 30 percent of value added in manufacturing, and approximately 66 percent of the value of all South Korean exports in 1987.

Looks like it's a success of mega-conglomerates which have been handpicked for political loyalty and the willingness to execute government policy. As opposed to "purely rational capitalists" whose most rational action would be to liquidate the remains of SK's industry and emigrate to the West.

[Lord Zentei]

Heh. SK's "draconian" methods were Five-Year economic plans with point investment into key industries that have been selected by the Economic Planning Board (which had very wide powers over the businesses in SK). SK's government had a very strong hand over banking, industrial construction. I guess it's not exactly a result of the markets behaving on their own being left to control from foreign powers (SK controlled own markets, driving them for first industrial exports and then high tech exports).

Not entirely, no. However, there was still private ownership; moreover SK was open to trade, though on its own terms. And internally, they did have a capitalistic system for investments.

When I said that their methods were "draconian" I was thinking about rapid growth versus immediate welfare of the population, not that SK was a fully liberalized economy.

The government essentially introduced measures which were taking SK down the success road, first betting on industrialization, then creating the high tech industry - all rather risky, with very high foreign debts and a dependency on foreign investment.

The project could've suffered a collapse at several points (thankfully, all worked out for SK).

That it could -- though risk tends to be a factor in rapid growth.

Looks like it's a success of mega-conglomerates which have been handpicked for political loyalty and the willingness to execute government policy. As opposed to "purely rational capitalists" whose most rational action would be to liquidate the remains of SK's industry and emigrate to the West.

A market with affiliated management deals and government contacts is not a wholly free market, naturally; but it is still not state a controlled economy. Of course, that article also states that these businessmen were chosen for loyalty to Rhee over economic acumen, so SK was pretty fortunate it worked out. Obviously a lack of corruption is better.

[K. A. Pital]

When I said that their methods were "draconian" I was thinking about rapid growth versus immediate welfare of the population, not that SK was a fully liberalized economy.

Oh, that... And how many socialist governments have immediately created welfare of the population? Worker ownership doesn't equate welfare; I'm pretty sure you're aware that the methods for the 900% industrialization growth in the Soviet Union were also quite draconian.

Does this mean though that high growth can only be achieved through draconian methods? I don't know, but most post-crisis governments in history haven't been too keen of increasing the welfare of their citizens until the economy developed to the extent that it allowed for such (or some external revenue source made it possible to lift up this level, like, say, colonialism).

[Lord Zentei]

When I said that their methods were "draconian" I was thinking about rapid growth versus immediate welfare of the population, not that SK was a fully liberalized economy.

Oh, that... And how many socialist governments have immediately created welfare of the population? Worker ownership doesn't equate welfare; I'm pretty sure you're aware that the methods for the 900% industrialization growth in the Soviet Union were also quite draconian.

In order: frankly I'm not sure how many, and yes, they were.

Does this mean though that high growth can only be achieved through draconian methods? I don't know, but most post-crisis governments in history haven't been too keen of increasing the welfare of their citizens until the economy developed to the extent that it allowed for such (or some external revenue source made it possible to lift up this level, like, say, colonialism).

Well, since GDP is the sum of consumption and savings/investment for both public and private sectors, I suspect that there is a negative correlation between growth and welfare. I concede that this may be a bit of a simplification, though, but I'd say that it's a reasonable one.

[K. A. Pital]

Well, since GDP is the sum of consumption and savings/investment for both public and private sectors, I suspect that there is a negative correlation between growth and welfare.

Indeed. If you want to develop your productive capitals, you would have to invest more but consume less. A problem arises when some people are the sole beneficiaries from growth, and are at the same time overconsuming.

[Lord Zentei]

Well, since GDP is the sum of consumption and savings/investment for both public and private sectors, I suspect that there is a negative correlation between growth and welfare.

Indeed. If you want to develop your productive capitals, you would have to invest more but consume less. A problem arises when some people are the sole beneficiaries from growth, and are at the same time overconsuming.

Another problem is when the managers of growth have less vested interest in sustainability.

(Though with the possibility of capital flight, that can certainly occour in capitalism as well as socialism. And for that matter, a corrupt socialist state can also show the symptoms you describe).

[slebetman]

I noticed in some of the pictures a very strange looking abacus. Different from the Chinese/Japanese abacus I'm used to. I assume it's a simple base 10 system given the 10 beads in each row. But unlike simple kindergarten abacus the fourth row only has 4 beads. Anyone here know how they work?