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SiLL said:
Or to summarize: Why does a strong export not stimulate an equally strong import?

Japan is a good example of a strong export-led economy with a poor domestic consumption sector. In making the choices to become a export-led economy Japan sacrificed its capacity for internal consumption. To help maintain its edge, in the long term, it sacrificed worker entitlements, wages and job security. It skimped on a safety net. It also devalued its currency to make its exports more attractive while making imports relatively more expensive. In order to soak up the export earnings it deficit spends to create debt which its risk aversive population buys up. Japan would have to completely reorientate its whole economy: something it can't and won't do. China has just resorted to devaluing its currency and lends copious sums of money on its own state owned enterprises. This has triggered a phenomenon where those companies then use the money in building up there capacities to such an extent that kill there own margins and slide into insolvency. They then tap the state for constant injections to keep afloat. China isn't as deep as Japan is yet but it has the potential to be much worse. It doesn't even have a safety net. It can't really stimulate its workers to spend more correspondingly and there is that alluring siren of a cultural rationale for reduced spending to deal with as well. Its also so much bigger relative to the world economy than Japan and has a far more significant role by far to boot.
 
Hey, I read it. I just have nothing further to say on the subject. You seemed to echo what I'd previously heard on the subject in a lot of places, with significantly more info, and provide entirely new information in other areas. I just didn't see that there was any reason to post, except maybe to thank you for the info, but by the time I red it the thread had already degenerated into yet another argument. Why derail the fun?

:lol:

In what universe do you live in, where mid-powers being invaded by great powers is forgotten a short time after the war is over?

It was an expression. The point was that Soviet operations in the area had long since ceased, by the time the Poles decided to invade Ukraine and Belarus, so pretending that they're some part of a counteroffensive against the evil Reds is a joke.


You could arguably say the same thing about the Ukraine.

Which became a constituent republic of the USSR two years later. You're right, that should have been the fate of Poland as well.

I blame the Treaty of Versailles more than some hilarious Polish ultranationalism that you need in order to justify Soviet aggression in the first half of the 20th century;

Poland was ultranationalist. They were at war with Lithuania, Belarus, and Ukraine for territory from essentially the moment they were created, with some kind of delusional idea about a Polish-led great Eastern European federation, but obviously to the territorial expense of its neighbors.

which, by the way, happened to unite most of Eastern Europe during the first wave of Soviet invasions.

:rotfl: "Most of Eastern Europe" here means...whom? Latvia, Lithuania, and Hungary were socialist. Only Estonia and Finland stood independent, and they did separate from any sort of delusional Polish anti-communist alliance.

As for the case of Lithuania, it was a bit of a power vacuum. Poland attempted to spread its influence to Lithuania in order to support a pro-Western government before the Soviets could. (And if you think that this is a dirty trick or immoral in some manner, I remind you that in the other thread, you explicitly stated that you're against giving people the freedom to choose their own government.)

I said that when they prove capable of resorting to something incredibly stupid as nationalism, and pretending that the ruling class and working class have the same goals and are somehow united. I'll remind you that the Lithuanians originally declared for the Soviet during the Triumphal March of Soviet Power. There was no pre-emption on the part of the Allies (least of all Poland, who was engaged in Imperialist War for its own gain), Soviet power was already there. They supplied guns and ammunition to a small band of the wealthy who then overthrew the rather popular soviets and ran around killing every socialist they could get their hands on.

And yes, I do think it is a dirty thing to do, The People already having chosen a path against capitalist oppression.

Poland made a few errors in judgment, which is a far cry against what the Soviets were doing. Even before Stalin.

Cute way of dodging the point.

If Poland was at war with its neighbors for territory, then who are they to complain about an invasion, even if they didn't start hostilities themselves?

So what does this really mean? That a majority did not ask for payment?

No, it means that a majority that worked did not labor involuntarily. The issue of payment has never even been brought up, but yes, since you ask, they were paid.

Since you seem to be approaching this subject with a rather dense head, let me spell out that I'm not talking about labor camps, either. The original subject was the workers who build the Soviet economy during the Five Year Plans.
 
So what does this really mean? That a majority did not ask for payment?

No, I'd guess that it means that the majority did not ask for payment above that necessary for survival. There's the "slavery" way of doing that, forcing people to work and merely pay them the bare minimum to survive (the 19th century treatment reserved to industrial proles, too), and then there's the "motivation" way, paying them that necessary minimum and then offering an extra for satisfaction in some intangible form: partial ownership on what's being built, decision power, religious motivation, whatever people are willing to take.
High wages, material rewards, are just one possible motivation among many, even today, even in capitalist economies. And even the people who demand them may be doing so more because they use high wages as a way to keep tabs on how well they're succeeding than because they're actually going to spend it all.

So I don't think that Hitler and Stalin being military imbeciles necessarily suggests that other powers were lead by those, too (if I understood you correctly).

Ok, granted. And France's high command did make some big mistakes, too.

I never really got that to be honest.
If a country has a strong export surplus, it is more concerned with producing goods for other markets than for the own one, this is perfectly sound. But what happens to the money earned by doing that?

Where's the money? That's a very good question, and one which, I am sure, people should be asking more often! :D It depends on the circumstances.

If a strong export also pours a lot of money into the country, which is received by the people through wages / payments, shouldn't they be able to consume just as much as if the companies earned the money by producing for the domestic market?
Now obviously, if this were the case, you wouldn't have an export surplus anymore, because then the purchasing power of the domestic market would have to be satisfied by more imports which would eventually balance the export-import-relation again.
So I ask again: what happens to the money? How can such a imbalance form in the first place and why only in countries with high exports?

Or to summarize: Why does a strong export not stimulate an equally strong import?

It depends on who receives the money, on how the profits from exports are distributed inside the exporting country. Does it get distributed among the mass of workers, as wages, or are most of those gains distributed by the companies as profits or retained for reinvestment?
If distributed as wages then people will either save or consume. Because people will not save indefinitely, what you assumed above makes sense, imports will tend to balance exports.
If distributed as profits then it seems likely that the most wealthy will benefit disproportionally, as they'll have bigger ownership stakes on the companies than your average worker (if he has any at all). And because there's only so much that an individual can consume, most of those profits captured by the wealthy will end up reinvested (or, during economic crisis, stashed away in idle bank accounts or other forms of idle wealth), not spent on consumer goods. A strong indicator that this is happening is a positive trade balance for the country, with the profits from exports showing up in the balance of payments as a capital balance (loans to and investment in foreign countries and institutions). But it may also mean an unusual tendency by workers to save instead of spend, with banks exporting those savings in the capital balance.
If reinvested, then the average trade balance will more likely be null. Gains from exports will be used for buying capital goods from abroad, instead of consumer goods. Part of the investment will create internal demand, from suppliers inside the country, and that will filter down to either wages or profits, one or the other of the above scenarios.

Take the USSR quick industrialization as an example: it had to import industrial equipment and technical expertise. It had to pay for it, because no one was going to borrow them money. So it had to export whatever it could: production efforts had to be directed towards export goods, not consumer goods, and those goods actually exported in order to pay for the material necessary for industrial development. I won't say that this justifies the recklessness of Stalin's economic plans, but it explains why the needs of the population were regarded as a secondary concern by the planners. Because the economy, those state companies, was "public", it is believable that some
of the workers would voluntarily accept those conditions: in capitalist economies doesn't the small businessman tend do sacrifice his own consumption in order to put aside money for investment? Workers, as owners of state companies, were being asked to do the same... though they didn't seem have been given any choice!

Or take what seems to be the current China approach to industrialization: it combines exports and low wages, with the wages kept low simply through the use of a huge pool of manpower - competition among workers for the sale of their labor. Certainly a more capitalistic approach! And other countries have been known to keep wages low deliberately, by attacking attempts at unionization (for example, I still recall the frequent news about clashes in South Korea, though those seen to have mostly ended, and wages risen), by giving all possible state support to large monopolistic companies within the internal market. These countries seem to have a plan of channeling the profits from exports not to workers, for consumer spending, but to the companies, as capital to be reinvested. It's the same process as the USSR's to drive industrialization quickly, except that the companies are privately owned instead of state-owned. It may make it a little more difficult to persuade workers that they too are benefiting from the economic development...
 
It was an expression. The point was that Soviet operations in the area had long since ceased, by the time the Poles decided to invade Ukraine and Belarus, so pretending that they're some part of a counteroffensive against the evil Reds is a joke.

You're desperately trying to point to a short time lapse between military operations as proof that they're separate wars.

Which became a constituent republic of the USSR two years later. You're right, that should have been the fate of Poland as well.

So millions of their people could be intentionally starved out by Stalin and human, civil and political rights could be replaced by gulags and totalitarianism? No thanks. The thirty years of freedom are generally cherished by Poles. Not so much 1945 to 1989.

Poland was ultranationalist. They were at war with Lithuania, Belarus, and Ukraine for territory from essentially the moment they were created, with some kind of delusional idea about a Polish-led great Eastern European federation, but obviously to the territorial expense of its neighbors.

The Western Allies' reorganization of Eastern Europe is what caused the state of war between Poland, the Ukraine and others, not some greedy Poles out to build an empire. I remind you that the Ukrainians joined the Poles in the Polish-Soviet War, even after losing the Polish–Ukrainian War. Obviously resisting the Soviets was a much higher objective for these peoples than whatever petty squabbles they had with each other.

:rotfl: "Most of Eastern Europe" here means...whom? Latvia, Lithuania, and Hungary were socialist. Only Estonia and Finland stood independent, and they did separate from any sort of delusional Polish anti-communist alliance.

Belarus, Estonia, Latvia, Lithuania, Poland, and the Ukraine all resisted the Soviet offensives of 1918.

I said that when they prove capable of resorting to something incredibly stupid as nationalism, and pretending that the ruling class and working class have the same goals and are somehow united.

Alright. When the Lithuanians prove capable of resorting to something incredibly stupid as communism, and pretending that the Soviet Union has any interest in her except to annex her for her manpower and resources, it's alright to suppress public opinion in favor of something else.

And yes, I do think it is a dirty thing to do, The People already having chosen a path against capitalist oppression.

So when people choose nationalism or liberal democracy, they're children that need to governed without consent because they're brainwashed dolts, but when The People choose to fight against Capitalist Oppression, that's when you care about their opinion?

Well gee, why weren't there elections in the Soviet Union then?

Cute way of dodging the point.

If Poland was at war with its neighbors for territory, then who are they to complain about an invasion, even if they didn't start hostilities themselves?

Border disputes =/= being invaded for complete annexation. The only country that Poland arguably wanted to unite with was Lithuania for historical reasons, but they gave up that path because the Lithuanians themselves wanted no part in that.
 
The Western Allies' reorganization of Eastern Europe is what caused the state of war between Poland, the Ukraine and others, not some greedy Poles out to build an empire. I remind you that the Ukrainians joined the Poles in the Polish-Soviet War, even after losing the Polish–Ukrainian War. Obviously resisting the Soviets was a much higher objective for these peoples than whatever petty squabbles they had with each other.

"the Ukranians"? Which ukranians? All the inhabitants of Ukraine? Or was it split among many factions, as Russia itself at the time? And which geographical Ukraine, the former lands of the polish crown? The former lands of the crimean khanate? The one which coincides with today's borders?
You're making sweeping claims without evidence.

Belarus, Estonia, Latvia, Lithuania, Poland, and the Ukraine all resisted the Soviet offensives of 1918.

Belarus, Estonia, Latvia, Lithuania, and the Ukraine did not exist prior to 1917, and then existed only as set up during german military occupation which shortly after ended. Talking of those territories as if they were already well established countries with a population holding well defined attitude towards other countries is absurd. As former provinces of the Russian Empire its independence after the collapse of the new occupying power of Germany and the wars which happened afterward can legitimately all be viewed as part of a general russian civil war. The final outcome was independence, but the wars extending into the 1920s were all connected.

So when people choose nationalism or liberal democracy, they're children that need to governed without consent because they're brainwashed dolts, but when The People choose to fight against Capitalist Oppression, that's when you care about their opinion?

The people don't write constitutions, anywhere. At best they get to vote on whether to approve or reject one... and that pretense of democratic legitimacy for a political regime is not even being used in the contemporary EU, so you can see just how important the founders of a new regime - any new regime - think that the "will of the people" is.

But I did get the impression that Cheezy made a claim that the new government of Lithuania gained power by using foreign-supplied weapons against their own people, until they got that consent. I don't see how your tirade above is any answer to that.
 
Oh? And what do you call the Soviet westward offensive of 1918–1919? It only looks as if the Poles are the aggressors if you conveniently move the start date of the war to their first offensive.

You mean, the offensive which suddenly met Polish forces in Belorussia? I wonder, what they did there?
It was part of Russian civil war. Major military operations in Polish-Soviet war started only with big Polish offensive towards Kiev, before that there were relatively small skirmishes, which BTW started also not with Soviet offensive, which you mentioned, but rather with Polish-Ukrainian conflict in 1918.

You're simply covering Polish opportunistic landgrab of 1920-1921 with euphemisms like "a few errors in judgement" or "power vacuum". I'm not even going to claim that any side of that conflict had moral highground - all of them were acting from pure pragmatical reasons, but you seem to justify Polish actions just because that they were anti-communistic.
 
innonimatu said:
Or take what seems to be the current China approach to industrialization: it combines exports and low wages, with the wages kept low simply through the use of a huge pool of manpower - competition among workers for the sale of their labor.

Partially true. The wages are actually in PPP terms quite strong, its the weakness of the currency that distorts it. Chinese domestic consumption goods are really cheap even by Asian standards. This is partially explained by the razor thin margins that Chinese firms live with: steel margins are, for instance, like US$0.03 cents a tonne which is so low it helps explain why the steel industry there never makes money. These cheap domestic prices are then partially offset by a Chinese propensity to save and invest in tangibles primarily housing. It actually requires something like a 30% down-payment before people can access loans and it seems like most don't anyway and just prefer to pay cash. For the record, Chinese housing is fairly expensive by international standards. Its also helpful to note that most of China's workforce is safely ensconced in SMEs which are out of reach of government wage fixing. Wage breakouts and subsequent wage-price inflation are a given in most places: it just happens. The other off-set to domestic consumption is the complete lack of a safety net which further spurs saving. Wages are not the major issue and even allowing for currency appreciation they're really not all that depressed.
 
No, it means that a majority that worked did not labor involuntarily. The issue of payment has never even been brought up, but yes, since you ask, they were paid.

Since you seem to be approaching this subject with a rather dense head, let me spell out that I'm not talking about labor camps, either. The original subject was the workers who build the Soviet economy during the Five Year Plans.
Eh.. yea.. it were kind of unusual to pay people in labor camps I imagine... :huh:
You need to pull yourself together. Continuously flaming at someone because he dares to question the role of ideology in the industrialization of the SU is a good way to show how your reasoning is getting screwed by said ideology.

It never came to my mind that the majority of Soviet workers were forced by th authorities to work. It speaks volumes if you feel the need to emphasize something fundamental like that and even think to highlight the greatness of the Soviet society by doing so (don't even pretend it hadn't been on your agenda).

So if "volunteering" simple means "working to get paid" you are - as I suspected in the first place - talking about nothing more than enthusiasm at the work place. I have no doubt that this was a real-existing phenomena. Yet this remains a fluffy factor and it is impossible to say how important this enthusiasm really was.


@Masada
Thanks for the thorough reply. So if I get it right, Japan needs workers who don't have the means to consume much (through relative bad work conditions) to prevail on the world market, to put it very simple.
But why needs the government to "soak up" the earnings? What were otherwise the consequences? And how exactly buys the population the debts of the government?
No, I'd guess that it means that the majority did not ask for payment above that necessary for survival.
While your paragraph on this was a good read, I don't think that this interpretation really carries from an objective point of view.
Did the workers actually ask for less payment for the sake of the Communist Revolution? I don't think so (correct me if I am wrong). So any low payment received would been that low with or without them working "voluntary", wouldn't? Just as in capitalist countries you got to work to eat, right?
So as I already explained to Cheezy also in this line of argumentation it boils down to the fuzzy factory of enthusiasm at the workplace.

On the second part of your post: Thanks that was very helpful. All phenomenas you described can be found in the German economy. Thinking about it it seems quit bizarre how proud people are on the German export surplus. :crazyeye:
 
SiLL said:
Thanks for the thorough reply. So if I get it right, Japan needs workers who don't have the means to consume much (through relative bad work conditions) to prevail on the world market, to put it very simple.

Yes, it needed to cut conditions in order to remain competitive as an export country. That's basically it. Although, it does alleviate that to some extent by allowing vertical sales structures to predominate which tend to drive down profit margins. So, while Japanese wages are still relatively poor that's offset by relatively low domestic consumption costs. Which has kind of stuck Japan in a spot which it can't wiggle out of. In order to raise wages it would need to ruin its own international competitiveness and put its own domestic consumption sector out of business. It can't do either so its stuck with business model that's been failing since the 80s.

SiLL said:
But why needs the government to "soak up" the earnings? What were otherwise the consequences? And how exactly buys the population the debts of the government?

Where do states store money if they don't spend it? Usually, in investment vehicles like sovereign wealth funds or alternatively they just maintain it as foreign currency reserves. The former is usually for domestic reasons invested internally or at least strategically with an eye to helping the core. Japan's JOGMEC is a good example of this, it invests money outside of the country but with an eye to ensuring a continual supply of minerals and energy to the core. Having vast amounts of foreign capital tends to degrade the competitive edge by driving up the exchange rate. So, governments tend to deficit spend to eliminate this imbalance. Deficit spending also has the nice effect of sucking up domestic capital which also helps keep the exchange rate depressed. The usual explanation for why the Japanese buy so much government debt is that its strongly culturally ingrained to do so thanks to Japan post (which is also one of the worlds biggest savings banks), that they also tend to be older and more risk averse and that everything else tends to give negative real rates of return.
 
Not to mention the lack of a safety net. If you have nothing to protect you from unplanned expenses, you tend to save more.
 
I've already mentioned that. But some of the literature now tends to throw around the notion that while Japan lacks a strong formal (i.e. state) safety net it actually has a fairly strong informal one primarily the result of close interpersonal relations between members of say an extended family or village, as well as the disproportionate influence of companies, and the seeming culture compulsion towards risk aversive investing. The latter only partially accounts for it, so that while Japanese savings are relatively high viz. a viz. other industrialised economies its comparatively low when compared to the explicit costs of providing a welfare state through taxation. The slack seems to be made up by the complex interplay between the state and the companies in large part since it seems like the companies provide added insurance in exchange for employee loyalty. Personally, I sometimes wonder if the incipient bias against the Japanese welfare system has more to do with the presence of other systems which a priori seem more desirable. Its also difficult to quantify when compared to other systems. But yeah, I guess you could mention that even if I'm not wholly sold on its significance.
 
Not to mention the lack of a safety net. If you have nothing to protect you from unplanned expenses, you tend to save more.
Didn't the Japanese tendency to save (or hoard) money help worsen the hit it took in the 1997 Asian Financial Crisis? I remember the news saying something along those lines at the time, but I was about 8 years old then.
 
Japan saved to much and was already built up enough that returns on loans dived. But there was the other side of the equation that says: if you save to much it needs to go somewhere. Predictably all this loan money went into the domestic housing system which began to offer attractive returns to the banks who in turn offered more loans to people desperate to get a piece of the swiftly appreciating equity cake.
 
You mean, the offensive which suddenly met Polish forces in Belorussia? I wonder, what they did there?
Well, Belarus used to be part of Lithuania and subsequently Rzeczpospolita until Partitions of Poland and since...1300-s, apparently. Which also when they first became a part of any kind of "state", I believe.
Spoiler :
Lithuanian_state_in_13-15th_centuries.png

File:Partitions_of_Poland.png


Not that this would mean much. I don't have much of an idea which side (if either) majority of the locals really supported at the time...
You're simply covering Polish opportunistic landgrab of 1920-1921 with euphemisms like "a few errors in judgement" or "power vacuum". I'm not even going to claim that any side of that conflict had moral highground - all of them were acting from pure pragmatical reasons, but you seem to justify Polish actions just because that they were anti-communistic.
While "opportunistic landgrab" is pretty apt description, we can say there was a subtle difference. In the best case of Soviet victory, Polish state would have ceased to be. In the best case of Polish victory, there still would have been Russia.
 
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