So socialism

[El_Machinae]

Well in the Norwegian case the oil itself fuels economic activity, that growth and maintenance is purchased, the profit has to go somewhere, it goes into asset ownership. In a long sense they are trading oil in exchange for ownership of what uses oil.

I don’t think it’s to weaken their currency so much as they have been paid more than they can use the money to stimulate jobs and therefore more production. What’s left is basically a debt to them for their oil that transfers into a higher rate of aggregate ownership. They don’t have that much wealth at home, no bidding will go to inflate domestic company value before they would chose ownership of foreign assets.

Dunno what the Swiss are doing.

To your first paragraph, yes. They're loosing oil into the globe and trading it for claims on future productivity (or rents).

But they definitely have to spend the profits into international markets in order to prevent their currency from rising and rising. Norway has been pretty good at avoiding Dutch Disease, by not letting oil exports capture too much of their economy. But this mostly means that they save enough of the revenue therefrom and then spend that revenue back into the international markets (through asset purchases). They then have a nifty mandate where they spend some of their capital wealth annually.

The Swiss have to devalue their currency by literally printing francs and trading them for international assets. So, just like Norway's Sovereign Wealth fund goes up and up, so does the Swiss Central Bank's asset sheet. But, unlike Norway, the Swiss very much do not spend some of the assets annually (or, er, very much at all) but will use the assets to prop up their currency as required.

They're giant pools of wealth, held under different accounting systems. But Norway got theirs by selling oil to people who'd foist the externalities onto the global poor, in exchange for foreign capital assets. Feel free to find a better source, but if someone doesn't believe in carbon offsets or in capital ownership, Norway isn't a good example of (afaict) 'real' Socialism.

This is part of why captial 'S' Socialism needs a success story. Now, I've never done in-depth looks at Sweden, but a lot of their turnaround happened after they dismantled some of their left(ish) systems that had gone too far. Or, it's what I've heard.

 

[Birdjaguar]

I think, like @EvaDK said, the finding of balance between collective capitalistic efforts and State controlled efforts is the pathway for improved prosperity of the majority of a nation's citizens. Nation size (physical and population wise) along with cultural diversity are key elements that need to be considered. Human nature will force a successful plan to include both elements. Human nature will also create a dynamic struggle between the extremes.

 

[Angst]

This is part of why captial 'S' Socialism needs a success story. Now, I've never done in-depth looks at Sweden, but a lot of their turnaround happened after they dismantled some of their left(ish) systems that had gone too far. Or, it's what I've heard.

not knowing much about sweden's situation, i believe that's not the case, no. all of nordics mostly followed the same paths cumulatively, while complexedly not universally the same, the same tendency was there. which is why oil simply can't be all of the explanation for scandinavian success.

that said i think sweden's position, as with rest of scandinavia, is pretty hard to define simply by virtue of being market economies in the dominant world bloc, regardless of our particular "left" policies and such, we were ingrained in post ww2 economic boom for the west. again, incidental or causal. that said, if the nordics could do their social democratic model succesfully in the western bloc, sometimes outperforming the states in some areas... i'd argue the particular liberal model is workable.

even if the market environment could explain away the success of the nordics tho, that perspective relies on the idea of the nordics being small economies. which they are, but together they actually account for some pretty reasonable pop and gdp

 

[innonimatu]

At least under Stalin, USSR was criminal, killed, mass-deported to Siberia and generally made life hell for many in its domain. It's no wonder that when he died he was renounced by the ruling party.
That said, it's not like Lenin was a humanist either, more of a petty mob ruler, while Trotsky showed just how clueless he was when he unilaterally retreated from the front expecting Germany to also stop fighting and spontaneously become communist=> a stroke of imbecility.

Oh for... Stalin was the petty mob-ruler, read the biographies. Nevertheless he was a competent politician - he won the power struggle, and putting down Bukharin was necessary if the USSR was to be preserved. Though he could have put him down nicely, no need to start shooting people (there Stalin's background showed). Stalin's greatest failing as a ruler and greatest death toll that he should have avoided, was wanting to believe Hitler would act rational. He was not a competent statesman.

As for Trotsky, ceasing the war then was a necessity. There was no support to continue it and the new government had to disengage lest it lose power entirely. The alternative would have been to do what the german Kaiser did less than a year later: give up on power and attempt to saddle others with the ignominy of defeat. Look how well that went for the Hohenzollern: the never managed to do the comeback they planned, the new Weimar republic survived and only lost to the Nazis, not the monarchists.
Trotsky was pragmatic. He just happened to get outmaneuvered by Stalin. Thanks to Bukharin's idiocy, by the way.

These are minor historical quibble by now, no point in going into details. The point is, don't underestimate people just because they're supposed to be unlikable. Look into detail at the history of what happened. And make sure to read from multiple and extensive sources.

On the whole "communism" versus "capitalism" polemics, most are silly, shallow discussions that inform no one, only serve to sell things to one's "supporters". Governments that used either system can be pinned with abominable massacres, hungers, mass deaths, by any enterprising polemicist looking to profit from some book sales or word count payments, taking advantage of the many real problems that countries went through and the competing interests playing also within countries. They say nothing about the economic systems in themselves, only about what happened in some very specific circumstances due to power conflicts over material means. At most they show the ever-present danger of people being ruthless against others during conflicts. If anything should be learned. it is: avoid getting into situations where such conflicts become inevitable.

As a french dude said, it's not who starts the wars, it's who makes the wars inevitable... wars and civil wars.

 

[innonimatu]

One of capitalism's strengths is that people have an instinctive understanding of property, which means that enough people just tacitly accept that someone owns something. Of course, getting it into people's minds that you own something legitimately is a task. But sometimes it's easier than others.

I very much disagree. People' understanding of property is socially created. For almost the whole history of mankind the understanding of society had nothing to do with what is commonly understood today. People lived in systems where favors rather than money were traded and multiple social bonds rather than individual property were what mattered.

Currency started some 2500 years ago, a minute in mankind's day of life. The liberals started creating the socially detached homo economics some 200 years ago, a blink of an eye.

Funny thing, one common liberal trope is that communists are bad because they're teleological. But what is liberalism if not teleological? It came about at a very late stage in human social evolution, a very recent stage. Socialism and communism were reactions to it. All necessitate a belief "progress" and stages of evolution towards something.
The thing with capitalist/liberal ideology is that it holds that this present world is the best possible world. The TINA defense. Communists didn't ever claim that even in Stalin's "socialism in one country" days.

 

[FriendlyFire]

Stalin's greatest failing as a ruler and greatest death toll that he should have avoided, was wanting to believe Hitler would act rational. He was not a competent statesman.

No one could have forseen allying with your sworn arch-enemy and then getting backstabbed
Also it was the west fault.

 

[innonimatu]

But does it make it also more socialist? Those funds are ear marked for its citizens.

No. Control over the means of production is what makes a system capitalist or socialist. Not supposedly having some notional money amount in some fund managed by others. Even if they are elected representatives.

The agency problem. Norway's "public" fund invests in private corporations. It very much supports a capitalist system, with a capitalist logic of rent extraction form workers. In fact pension funds, the origins state or para-state managed funds, were the original enablers, starting in the 1970s, of teh worst exceszes of capitalism we're living under, short-tern rent seeking and damn investment or workers.
Vulture capitalists, the eru-dollar, all that crap can be traced to these funds and their wuest for extracting capitalist rents for their investors. While representng "workers" (as future pensioners), they empowered managers and oter "investors" against workers, to squeeze workers, outrource and dismantle industries, end capital controls...

 

[Birdjaguar]

No. Control over the means of production is what makes a system capitalist or socialist. Not supposedly having some notional money amount in some fund managed by others. Even if they are elected representatives.

The agency problem. Norway's "public" fund invests in private corporations. It very much supports a capitalist system, with a capitalist logic of rent extraction form workers. In fact pension funds, the origins state or para-state managed funds, were the original enablers, starting in the 1970s, of teh worst exceszes of capitalism we're living under, short-tern rent seeking and damn investment or workers.
Vulture capitalists, the eru-dollar, all that crap can be traced to these funds and their wuest for extracting capitalist rents for their investors. While representng "workers" (as future pensioners), they empowered managers and oter "investors" against workers, to squeeze workers, outrource and dismantle industries, end capital controls...

What then should Norway have done with the money it had earmarked for the future benefit of its citizens?

 

[innonimatu]

What then should Norway have done with the money it had earmarked for the future benefit of its citizens?

Norway should use the proceeds of its oil and gas wealth to better living standards of its citizens. If there is no improvement it can conceive of, don't extract more of it.
Subsidising the US treasury or buying shares in some foreign corporation is not improving the lives of its citizens. These "sovereign funds" are all shams.

 

[Birdjaguar]

Norway should use the proceeds of its oil and gas wealth to better living standards of its citizens. If there is no improvement it can conceive of, don't extract more of it.
Subsidising the US treasury or buying shares in some foreign corporation is not improving the lives of its citizens. These "sovereign funds" are all shams.

So just spend it all now (as it comes in) or give it to people? And stop producing until more is needed? If they give it to citizens, what if they want to save it for retirement? How do they do that?

Edit: Turning oil wells on and off is not simple.

Shutting Down Oil Wells, a Risky and Expensive Option

The temporary shutting in of wells is the one thing that oil companies are trying to avoid at all costs. That's because restarting production is expensive

www.resilience.org

 

[Lexicus]

The thing with capitalist/liberal ideology is that it holds that this present world is the best possible world. The TINA defense.

Liberalism used to be the same way, which comes out quite clearly in the words of liberal philosophers like John Stuart Mill or the American founding fathers. They had a clear sense that society would continue to improve beyond what they could presently imagine.

It is only in the latter 20th century, one of the hallmarks of neoliberalism (to the extent that it is distinguishable) that this idea that no significant improvements can be made on the current state of society emerges (within the liberal mainstream - obviously conservatives have always believed that either no improvement is possible or in fact that society is in a continuous state of decline from a near-perfect ancestral Eden).

 

[innonimatu]

So just spend it all now (as it comes in) or give it to people? And stop producing until more is needed? If they give it to citizens, what if they want to save it for retirement? How do they do that?

Retirement? The proper way to handle retirement, as a society, is to do it according to what happens in reality: workers support dependents at any given time. That is a pay-as-you-go social security mechanism.

"Funds" are not resources. People do not eat electronic representations of money, do not live within representations of money, inhabit them. They eat food that someone has had to produce in the present time, inhabit houses that exist now. Use services rendered by workers now.

The idea of "saving for retirement" in some "fund" is a capitalist deception. Meant to serve the interest of fund managers, who skim off it. Everything built on it is deceptive. Retirees consume real resources now, not in the future. They are supported by labourers working now, not some conceptual future labourers.

In engaging the "wall street model of the economy", the social democrats in decades past abandoned socialism entirely, and produced the present screwed up economic systems that fail even at reinvesting to keep up productive capacity! Systems built by rentiers, parasites, who want to extract rents ("fees") from other people without doing anything socially useful. In two words, "modern finance".

 

[Birdjaguar]

Retirement? The proper way to handle retirement, as a society, is to do it according to what happens in reality: workers support dependents at any given time. That is a pay-as-you-go social security mechanism.

Demographics will make this increasingly difficult.

You seem to think that people need to spend all their income and not save any. People are not like that. Many, like my wife, are ardent savers. Why are you opposed to people saving for the future?

 

[innonimatu]

Demographics will make this increasingly difficult.

You seem to think that people need to spend all their income and not save any. People are not like that. Many, like my wife, are ardent savers. Why are you opposed to people saving for the future?

Individually, you may save. But collectively it does not work like that.

Society as a whole, the set of the retirees and the set of the working population, must always share what is produced in the present. What you as a retiree consume is part of what is produced when you are consuming it, not something you produced and save in the past.
If there is not enough active population to support your desired level of consumption, it does not matter who much retiree as a whole "saved" in financial terms in the past", they're having to spend those savings in the present from the available pool of goods produced now. Saving more or less in the past does not change the availability of goods now, that is set by the working population and productivity in the present.

The real system, the physical system, is a pay-as-you-go system, with workers now supporting retiree now.

You can selfishly say: "I will save more so that I can spend on and consume a greater share of the goods in the future than other retirees". Personally that might work. Collectively it does not change a thing. If everyone "saved more" now there would still be the same pool of goods available in the future.

Collectively the smart thing to do is for society to invest wisely in reproducing its productive capacity for the future. Increasing it. But "wall street", and vulture funds" do the opposite. They pillage and bankrupt businesses. Divert income for profits so they can take a share for themselves as "fees" and spend on their own inflated consumption of veblen goods. And this the net effect of the "capitalization" system of retirement tends to be negative. It depresses the future pool of available resources for retirees!

 

[Birdjaguar]

@innonimatu Collectivism seems to ignore the variety of human needs, especially at later stages of life. State mandated "production" (of services and products) is not able to meet the variety of demand humans desire. Your system will always curtail peoples' wants to those planned by the State. Person A will want to retire to a quiet life in the country after 40 years in the city; Person B will want to take 2 $10,000 vacations a year in distant places. Person C will want to move to be with grandchildren. Now multiply that by a few million other options. The state has a record of being able to meet collective needs (keep the trains running on time) but but fails miserably at meeting individual needs. It is those individual needs that increase the happiness of people and families.

Personal savings are similar to corporate investments but just happen on a different scale. by not consuming now I hope to put off that consumption until later when I can better enjoy it or will need it. Should delaying such consumption earn a saver any reward? (interest) Is there a risk to the saver's delay? (inflation) Is there a cost to the saver? (penalty) Does your system allow private companies? If so, can they save for some future need? Scaled up from personal savers. Where do such savings sit? Do I keep the $10 not spent under my mattress? Does the state just not give it to me? Where does a company keep its money not spent?

Maybe your system does away with money altogether. I don't know. You talk a lot at the macro level, but people don't live at the macro level. They live at the micro level where each transaction is important to them. Can you describe how your collectivism works at the individual level? I work in some factory or service run by the state. How do I plan and pay for the 300 person wedding in Cancun for my daughter? How many different kinds of cars will be available for me to buy? Do I get a benefit from consuming less than average? I could go on. Your socialism is like a big puzzle that you have put all the pieces together, but when that is done, there is no picture. It's blank. The pieces all fit but....

 

[aelf]

Growing up in Yugoslavia for 14 years, and now reaching the age of 45, after long and frequent deliberations on the question whether socialism, communism or capitalism are better, all I can say is the following:

Every human being looks at you, in your current situation, and asks him/herself the question "how can this benefit me, or my personal universe". From Einzatzgruppen looking at rotting Sondercommandos, to innocent children
looking at puppies that need saving in a shelter, this is fundamentally true. Even this post I'm writing is definitely fueled by my motivation of being heard, as much as it is an honest attempt at informing you of my thoughts (and possibly helping you grow your own).

On the other hand, we, as a species, are social creatures, as well as being self-aware, so there's inherent affinity for others. This is personal, though. Are you really a member of the tribe because you like the tribe as a unit, or are you merely pretending, aware that you can't kill a mammoth on your own? Both can and are usually true.

I'm deliberately stripping down our façade of humanity with these statements, because there are two types of "skins" we can wear over it. One is personal, one is ideological. And both are fueled by danger. In it's essence, civilization is barely more than a very complex communal danger management. Swapping a disease killing us at the age of three, for a ponzi schemer stripping us of our pension. Most, if not all dangers we face as both individuals and groups, can be only dealt with in a group. You can't really develop cancer therapy by being a hunter-gatherer. Groups require to control, change or replace some of our individualism for something else. But... Like with the color of your bathtub, there's nothing inherently good or bad about any particular color, ideology, religion or any other switch/level in ways of building a civilization, because ultimately every ideology wants to do the same things: generate rich people that live a prosperous and long life, have poor people that the first group feeds upon, and the rest being in the middle, trying to get into the first group and avoid being sent to the latter one.

The only thing "communism" and "capitalism" really did, and both did exactly the same, but in different ways – was to shuffle the cards.

All this is why ideologies in general are extremely dangerous. Because they ask you to replace your own morality and desires with that of an incel philosopher that "figured it all out" in some random mom's basement, and is then picked up by a power hungry primate that wants to become the next president, tycoon, bishop or warlord. The most "potentially lucrative" ideologies are those that usually do the most social damage. Kill all the <insert social group name> is way more damaging than "lets make basic education and healthcare free". And yes, both are damaging or profitable. To someone.

Ultimately, what I think constitutes a good civilization and a good social structure, regardless of what you call it, is one that respects and allows for personal power and personal needs, and provides the means (including education and training) to excercise both. In return – you pay – one way or another, a social tax, one that can be acquired in some shape or form by all members of the community, without going too much into personal detail (why I think money is still the best of the worst options out there for this).

Are you Gen X or Gen Edge?

 

[Lexicus]

People are not like that. Many, like my wife, are ardent savers. Why are you opposed to people saving for the future?

Individual saving is basically a rational response to conditions of scarcity that are imposed on us politically, and have nothing to do with any actually-existing limits on production or human potential.

But it is correct that saving on an individual level is quite different from the discussion of savings, macroeconomically. The traditional view has been that the money market serves as the nexus between savers and investors, meaning that the level of investment in society is ultimately dependent on the level of saving, but this has no actual relation to how investment and production actually take place. Investment is better seen as a type of spending than as some separate thing only enabled by saving.

Inno is correct that what is in the interests of everyone, ultimately including the rich people who run everything now, would be to grow the productive capacity of the economy and the best way to do this is to have the government spend more money, not less (generally speaking, not unconditionally). This has little to do with whether it is a good idea for households to save, which may or may not be the case depending on macroeconomic conditions. In my view, we want public policy to create conditions where people largely do not feel the need to have a large hedge against uncertainty in the form of a hoard of government tokens.

Where I would disagree with inno is that I don't think pension funds themselves are the problem, putting pensions into Wall Street may have been the problem but that is a whole other discussion.

I think it would be better to expand social security enough that you wouldn't need a private pension or retirement account.

 

[El_Machinae]

But also keep in mind, entities can save within a capitalist system. So Norway definitely generated savings, because savings were available to be generated. Canada was literally willing to sign over some property rights to Norway in exchange for temporary oil, and then legally guaranteed access to some of the profits from those properties which at the very least can be turned into Canadian Goods they can purchase.

An advantage of encouraging savings is that it generates savings. And savings can lead to investment. Having many small voices when it comes to savings creates new ideas and efficiencies. Maybe some of these ideas are invisible to us now, but if you know not to eat the seed corn, it's because it's come from some initial Insight someone had.

I disagree that we don't have a strong Instinct for property, I think people are too much conflating other concepts into this instinct. This instinct is so strong our dogs, dogs!, can be trained to respect our property. That's how deep it goes back in our history. Watch two kids fight over a toy that one of them was given, and then tell me whether a sense of property is instinctive and sharing is learned.

Now, I'd said "some people". And I stand by that, if you don't feel a strong Instinct for property, that doesn't mean that others don't. If you can imagine societies without a strong Instinct for property, that doesn't mean those people disappear. So if you have an economic system that at least harnesses this in a beneficial way, you'll outperform compared to if you ignore it or fight it.

If you think that capitalist property goes against instinct, and that socialist economic forces are superior, you need a success story.

 

[Lexicus]

An advantage of encouraging savings is that it generates savings.

This is circular, and in fact macroeconomic policy that encourages saving is going to be badly counterproductive if the goal is growth.

And savings can lead to investment.

Again, investment is spending. It has only an incidental relationship with saving.

This instinct is so strong our dogs, dogs!, can be trained to respect our property.

This argument is terrible; animals can be trained to do all sorts of things. This has absolutely nothing to do with what is instinctive in humans.

This idea that property is instinctive is no different in social function to the idea that kingly rule is divinely ordained. It is an attempt to ascribe to "nature" a set of social relations created by people. If anything is "instinctive", it is this tendency to claim that the (often quite ephemeral, relatively speaking) arrangements of one's own society are as old as the hills.

 

[Lexicus]

Dogs can be trained to run under tanks with mines strapped to their backs. This clearly proves that destroying armored fighting vehicles is instinctive in humans.