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Post by Deleted on May 3, 2014 0:54:48 GMT -5
Please tell us how the following are not Libertarian Reforms: 1) De-Collectivizing agriculture 2) Divided collectivized farm land into private plots. 3) State owned industries allowed to sell production above plan quotas on the market. 4) Private businesses allowed to operate for the first time since the communist takeover.5) Privatizations accelerated after 1992 and the private sector surpassed the state sector during the 1990's Now all of these look like Libertarian reforms to me. But perhaps I am missing something. Could you please explain how these are NOT Libertarian Reforms? Why don't you start explaining how these are libertarian reforms in the first place? And why don't you consider the right to private property, or the protection from fraud important or necessary?
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Post by rmarks1 on May 3, 2014 8:39:36 GMT -5
Please tell us how the following are not Libertarian Reforms: 1) De-Collectivizing agriculture 2) Divided collectivized farm land into private plots. 3) State owned industries allowed to sell production above plan quotas on the market. 4) Private businesses allowed to operate for the first time since the communist takeover.5) Privatizations accelerated after 1992 and the private sector surpassed the state sector during the 1990's Now all of these look like Libertarian reforms to me. But perhaps I am missing something. Could you please explain how these are NOT Libertarian Reforms? Why don't you start explaining how these are libertarian reforms in the first place? And why don't you consider the right to private property, or the protection from fraud important or necessary? Why don't you answer questions instead of avoiding them? I assume that you are claiming that the above are NOT libertarian reforms? I asked you a straight question. Please give a straight answer instead of an evasion. BTW, your second question is a Complex Question Fallacy. Yes, the right to private property and fraud protection are important. However, bringing that up is a Red Herring since my claim has to do with reforms that were made, not reforms that weren't. I answered your question. Please answer mine. Bob
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Post by Deleted on May 3, 2014 8:47:45 GMT -5
Why don't you start explaining how these are libertarian reforms in the first place? And why don't you consider the right to private property, or the protection from fraud important or necessary? Why don't you answer questions instead of avoiding them? I assume that you are claiming that the above are NOT libertarian reforms? I asked you a straight question. Please give a straight answer instead of an evasion. BTW, your second question is a Complex Question Fallacy. Yes, the right to private property and fraud protection are important. However, bringing that up is a Red Herring since my claim has to do with reforms that were made, not reforms that weren't. I answered your question. Please answer mine. Bob How can I answer your question when you keep changing your definitions of what you consider "libertarian" and "free market policies"? On one hand you've claimed that a libertarian government ought to protect people from force and fraud. But on the other hand you seem to argue that deregulation is always a positive thing, no matter what regulations are torn down. And then again you seem to equate libertarianism with establishing favorable conditions for foreign investors. On one hand you claim that the sole legitimate function of government is to secure the right to private property, but then you turn around and dismiss that as irrelevant. And when I press the issue, you just avoid the question and post meaningless Wikipedia links.
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Post by rmarks1 on May 3, 2014 8:59:21 GMT -5
Why don't you answer questions instead of avoiding them? I assume that you are claiming that the above are NOT libertarian reforms? I asked you a straight question. Please give a straight answer instead of an evasion. BTW, your second question is a Complex Question Fallacy. Yes, the right to private property and fraud protection are important. However, bringing that up is a Red Herring since my claim has to do with reforms that were made, not reforms that weren't. I answered your question. Please answer mine. Bob How can I answer your question when you keep changing your definitions of what you consider "libertarian" and "free market policies"? On one hand you've claimed that a libertarian government ought to protect people from force and fraud. Yes. Wrong. I never said that deregulation is a positive thing no matter what regulations are torn down. And establishing favorable conditions for foreign investors is a libertarian move that opens the economy. You have never presented any evidence to contradict this. Wrong again. Those links present facts that you apparently are not able to refute. Calling them "meaningless" is not an argument. It is a confession that you have no argument. And I don't avoid questions. That is your specialty. Now please give reasons why those Chinese reforms are not libertarian or admit that you have none. Bob
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Post by Deleted on May 4, 2014 14:42:21 GMT -5
How can I answer your question when you keep changing your definitions of what you consider "libertarian" and "free market policies"? On one hand you've claimed that a libertarian government ought to protect people from force and fraud. Yes. Wrong. I never said that deregulation is a positive thing no matter what regulations are torn down. And establishing favorable conditions for foreign investors is a libertarian move that opens the economy. So keeping a planned economy for the native population, but establishing a deregulated market for foreigners is a libertarian policy? That's because you have never supplied a definition of what you consider a "libertarian" economic policy to begin with. And you still haven't. What are you talking about? I asked you to define what a libertarian policy is, and what you consider "free market reforms". In response, you posted Wikipedia links about Xiaoping's economic reforms without comment. And you are still evading any attempt on my part to clarify what it is about China's economic reforms that you consider "libertarian". Is it the establishment of favorable conditions for foreign investors? Is it the removal of barriers to import and export? Is it privatization of state property? The introduction of taxes as primary revenue source, in place of sales from government-owned businesses? The massacre of protesters at Tiananmen? As soon as you tell me which reform you consider libertarian in nature, and why.
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Post by rmarks1 on May 4, 2014 16:54:09 GMT -5
Yes. Wrong. I never said that deregulation is a positive thing no matter what regulations are torn down. And establishing favorable conditions for foreign investors is a libertarian move that opens the economy. So keeping a planned economy for the native population, but establishing a deregulated market for foreigners is a libertarian policy? Establishing any deregulation in a socialist economy is a move in a Libertarian direction, isn't it? What you are implying is that only a total shift to a Libertarian Free Economy counts as being Libertarian. that would be wrong. My initial claim is that any movement towards a freer economy would increase economic growth. And that is what happened in China and India. Does that mean I support Chinese politics? Not at all. And I don't. Not so. I have said several times in this thread and others that almost any step which frees an economy from government regulation, management, and control is a Libertarian Economic Policy. If you don't think that definition is valid, say so and give your reasons. But to claim that a definition has never been given is wrong. Wrong. I posted excerpts from the article, not just links. It should have been clear from the highlighted portions which policies I considered Libertarian Policies. No. It is you who seem to be evading giving an answer as to whether or not the specific policies I posted were Libertarian or not. What is the problem? Yes, yes, and yes. Is that definition enough for you? That depends. If the taxes are too high and used to support a bloated government bureaucracy, then no. Obviously not. Massacre of peaceful demonstrators has no place in a civilized society. But this has nothing to do with economic reforms. Except in one sense. I believe it was the economic reforms that led to the protest at Tienanmen Square in the first place. Free markets produce free minds. AS the markets become freer, so do the minds. I just did, in answer to your previous question. Bob
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Post by Deleted on May 6, 2014 17:56:20 GMT -5
So keeping a planned economy for the native population, but establishing a deregulated market for foreigners is a libertarian policy? Establishing any deregulation in a socialist economy is a move in a Libertarian direction, isn't it? Is it? You claimed that Russia didn't enact libertarian reforms after the fall of communism, didn't you? Not so. I have said several times in this thread and others that almost any step which frees an economy from government regulation, management, and control is a Libertarian Economic Policy. If you don't think that definition is valid, say so and give your reasons. But to claim that a definition has never been given is wrong. By that definition, abolishing a law preventing fraud is a libertarian economic policy. Correct?
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Post by rmarks1 on May 7, 2014 9:45:28 GMT -5
Establishing any deregulation in a socialist economy is a move in a Libertarian direction, isn't it? Is it? You claimed that Russia didn't enact libertarian reforms after the fall of communism, didn't you? Russia never liberalized their economy. All that happened was a transfer of government facilities to Communist Party Cronies. Not so. I have said several times in this thread and others that almost any step which frees an economy from government regulation, management, and control is a Libertarian Economic Policy. If you don't think that definition is valid, say so and give your reasons. But to claim that a definition has never been given is wrong. By that definition, abolishing a law preventing fraud is a libertarian economic policy. Correct?[/quote]No. Fraud prevention is one of the legitimate duties of a government. This supports the free market. By contrast, government ownership of companies is not a Libertarian economic policy. China went from 100% government control to a point where the majority of production is in private hands. Hence the prosperity of China and the stagnation of Russia. Bob
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Post by Deleted on May 7, 2014 9:58:13 GMT -5
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Post by rmarks1 on May 7, 2014 16:45:56 GMT -5
Russia never liberalized their economy. All that happened was a transfer of government facilities to Communist Party Cronies. Not true. "All that happened" was that they transitioned from a centrally planned economy to a market based economy with limited government involvement. en.wikipedia.org/wiki/Boris_Yeltsin#Radical_reformsDid you happen to notice the following in the link you posted? "At the same time, Yeltsin followed a policy of 'macroeconomic stabilization,' a harsh austerity regime designed to control inflation. Under Yeltsin's stabilization program,"interest rates were raised to extremely high levels" to tighten money and restrict credit. To bring state spending and revenues into balance, Yeltsin "raised new taxes heavily", cut back sharply on government subsidies to industry and construction, and made steep cuts to state welfare spending." Raising of interest rates and taxes is continued government interference, not a libertarian reform. Yes, he did subsidies and welfare spending, but his other two steps destroyed any possible benefits. What he should have done is LOWER taxes while reducing government spending. And by your own words, Russia was SUPPOSED TO FOLLOW these policies. But according to your previous link, Russia didn't. "Under Yeltsin's stabilization program, interest rates were raised to extremely high levels to tighten money and restrict credit. To bring state spending and revenues into balance, Yeltsin raised new taxes heavily..." Can you explain why you classify government interference such as raising interest rates and raising new taxes heavily as "libertarian?" Bob
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Post by Deleted on May 8, 2014 17:29:17 GMT -5
Can you explain why you classify government interference such as raising interest rates and raising new taxes heavily as "libertarian?" Bob I'll quote your own words right back at you Bob: However, bringing that up is a Red Herring since my claim has to do with reforms that were made, not reforms that weren't. Either the privatization of state property and the introduction of market based economy is a libertarian policy, or it is not.
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Post by rmarks1 on May 8, 2014 22:01:45 GMT -5
Can you explain why you classify government interference such as raising interest rates and raising new taxes heavily as "libertarian?" Bob I'll quote your own words right back at you Bob: However, bringing that up is a Red Herring since my claim has to do with reforms that were made, not reforms that weren't. Either the privatization of state property and the introduction of market based economy is a libertarian policy, or it is not. You still haven't demonstrated why raising interest rates and raising new taxes are "libertarian." These two moves quite obviously completely undid any benefits from starting a market based economy. China and India didn't do that which is why they prospered and Russia didn't. Also, why are you classifying the distribution of state property to well-connected Party members as "privatization?" Bob
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Post by Deleted on May 8, 2014 23:36:01 GMT -5
I'll quote your own words right back at you Bob: Either the privatization of state property and the introduction of market based economy is a libertarian policy, or it is not. You still haven't demonstrated why raising interest rates and raising new taxes are "libertarian." Again, as you already stated yourself in response to me, "my claim has to do with reforms that were made, not reforms that weren't." Do you deny that Russia under Yeltsin liberalized its markets and privatized some of its state owned businesses? China introduced an entirely new tax code in the 1990s because they needed revenues to shore up their budgets. They are as "libertarian" in their tax policy as Russia, if not less so. The difference between China and Russia is that before its free market reforms, Russia had a developed industrial economy, while China had a third world agricultural economy that was trying to industrialize. An economy that's in the midst of industrialization will always grow much faster than an already industrialized one, no matter the supposed libertarian pedigree of its economic policies.
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Post by Deleted on May 8, 2014 23:50:47 GMT -5
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Post by rmarks1 on May 9, 2014 10:06:38 GMT -5
You still haven't demonstrated why raising interest rates and raising new taxes are "libertarian." Again, as you already stated yourself in response to me, "my claim has to do with reforms that were made, not reforms that weren't." Do you deny that Russia under Yeltsin liberalized its markets and privatized some of its state owned businesses? I already said I didn't. I also said that according to the link you posted, Yestsin also raised taxes and interest rates (more government interference) which canceled out any good effects of the liberalization. As for "privatization", letting high ranking members of the Communist Party take over government enterprises is not real privatization. The Chinese reforms started in 1978. The taxes weren't raised until over 20 years later when the economy could support them. Russia raised taxes almost immediately when the economy couldn't take it. The reason China had a third world industrial economy was due to the disastrous socialist policies they followed before 1978. No. Not always. There are plenty of third world economies that did not grow between 1978 and now because they did not follow free market policies. You are also ignoring the fact that China now has the world's second largest economy and yet it still has a high growth rate. High growth rate because it was a third world economy? Well it isn't a third world economy now and it's growth rate is the highest in the industrial world. Name one other advanced economy with that growth rate even half as high. Bob
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Post by rmarks1 on May 9, 2014 10:21:08 GMT -5
I did take a look at that article. Did you notice this part? In other words, this link of your neglected to look at the first 20 years of China's economic reform! As for the rest of those "interesting bits", what is it that you think they demonstrate? The price index decreased so consumers benefited. That's a point in favor of my case. Bob
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Post by Deleted on May 9, 2014 21:39:49 GMT -5
Again, as you already stated yourself in response to me, "my claim has to do with reforms that were made, not reforms that weren't." Do you deny that Russia under Yeltsin liberalized its markets and privatized some of its state owned businesses? I already said I didn't. I also said that according to the link you posted, Yestsin also raised taxes and interest rates (more government interference) which canceled out any good effects of the liberalization. They raised taxes to balance the budget. How is that "more government interference"? How did the Yeltsin regime interfere in ways that the old USSR did not? The state owned industries were handed over to private individuals, and they are in full control of the property. I agree with you that it had a terrible effect on the Russian economy, but that's not what we're debating here is it? The question is whether Russian state owned businesses were handed over to private individuals, and that is what happened. In what way was that not a privatization? And do you honestly believe that the Chinese did not hand over government enterprises to friends and cronies of the government? The taxes weren't raised because until the 1990s, the Chinese made enough money from the revenue of its state owned businesses. By the late 1990s, many of these businesses were turned into for-profit businesses and the government was to no longer benefit directly from their revenues. That's why they raised taxes - because they needed more revenue. Also, the Chinese government could wait because they didn't follow the shock therapy strategy where all state owned businesses would be privatized at once. They followed a policy where the majority of the economy remained a communist planned economy. Only a select number of businesses were slated for privatization, and only a select portion of the country was allowed to engage in a free market economy. Correct. They were following the "shock therapy" recipe devised by neoliberal economists. That "shock therapy" failed spectacularly and plunged them only deeper into debt and recession. So you are now claiming that before the communist regime, China had an advanced industrialized economy? What happened to all that Chinese industry? Did it spontaneously evaporate the minute Mao took power? Bob, China had become an economic basket case long before the communists took over. They haven't been a relevant economic power since the early 19th century. Most of these economies suffered from civil war, social unrest, or incapable government. Those that were politically stable enough to industrialize experienced large economic growth. Just take a look at East Asia: South Korea, Taiwan, Malaysia, Indonesia have all grown considerably once they were politically stable enough to industrialize. In fact, most of the recent investments into China's economy did not come from the West, but from neighbouring Asian countries and its autonomous territories in Hong Kong and Macao. en.wikipedia.org/wiki/Economy_of_the_People%27s_Republic_of_China#Foreign_investmentChina has the world's second largest economy because it happens to have the world's largest population. Per capita, China's GDP is lower than Greece's, one of the poorest members of the European Union. en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capitaen.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capitaBy the way Bob, did you know that the government of China is still issueing Five Year Plans? en.wikipedia.org/wiki/Twelfth_Five-Year_Plan_%28People%27s_Republic_of_China%29
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Post by rmarks1 on May 9, 2014 22:22:05 GMT -5
I already said I didn't. I also said that according to the link you posted, Yestsin also raised taxes and interest rates (more government interference) which canceled out any good effects of the liberalization. They raised taxes to balance the budget. How is that "more government interference"? Yes, of course it is. They should have balanced the budget by reducing expenses and the number of things the government interferes in. When government takes money out of the economy, less capital is left for private companies to borrow. Wrong question. The question should be "How much did the Yeltsin regime continue to interfere in the economy?" It was still looting, wasn't it? The positive effects of any privatization were canceled out by the continued state intervention in the economy, specifically the raising of taxes and interest rates. How are these newly private businesses supposed to expand if the state increases the amount of money it takes in? Capitalism, after all, does require capital. But they didn't raise taxes and interest rates, did they? Irrelevant. The point is that they did not raise taxes at the beginning when these new businesses were at their most vulnerable. They permitted them to grow. Taxes were not raised until 20 years later. Yes. This enabled China to keep introducing free market reforms. Remember my original point: It is the continued increase of free market reforms that enables an economy to grow rapidly. And that is exactly what happened. I'm glad you said "neoliberal" and not free market economists. It was those same economists who advised Yeltsin to increase interest rates and taxes. Those are not free market reforms by any means. Much of it was destroyed during the Japanese invasion and WWII. Yes. And Mao made it worse with his "Great Leap Forward." Take a look at what happened in just three short years. Those three short years were very long ones for the Chinese people. That "Great Leap Forward" is a great example of what happens to an economy when anti-free market policies are introduced. Thank you for that McAnswer. You listed the countries that prospered by pursuing free market policies! Really? Then why didn't China always have the world's second largest economy? None of which refutes the facts that China had remarkable growth since 1978 and is still having remarkable growth, and that millions were raised out of poverty in three decades. So? How is that relevant here? Does that mean they didn't institute free market reforms which enabled their economy to have spectacular growth over the last 30 years? Bob
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Post by Deleted on May 9, 2014 22:56:39 GMT -5
But they didn't raise taxes and interest rates, did they? They did raise taxes. And why does it matter whether they raised interest rates or not? In both cases the government interferes with the economy, in the first by action, in the second by inaction. And yet, they increased government interference by raising taxes. Your original point was that free market reforms increase economic growth, regardless of the actual level of government interference, yes. In China, yes. In Russia, not so much. Even before WW2 China had no industry on the scale of Europe or even Japan. Indeed he did. I was never disputing that. Because they didn't have an Industrial Revolution.
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Post by rmarks1 on May 9, 2014 23:22:38 GMT -5
But they didn't raise taxes and interest rates, did they? They did raise taxes. Not until over 20 years later. That's according to your own post. LOL! Would you also say that killing someone and not killing them are identical acts? Inaction is not the same as interference, is it? Yes, while continuing their free market reforms to make the economy stronger. Like all governments, the Chinese couldn't resist a little bit of parasitism. By that time though, their economy was strong enough to handle it. Contrast the results the Chinese got with program Yelstin got from the World Bank where taxes and interest rates were raised immediately and the Russian economy went into crisis. Not quite. My point was that it is the direction the economy is moving in that counts. Free market reforms will succeed even in a command economy IF the level of government interference doesn't increase and is, in fact, on its way to being reduced. This is what happened in China. This is not what happened in Russia where government interference (in the form of higher taxes and increased interest rates) was increased along with the free market reforms. Yes. I agree. This was because China didn't undercut the reforms by increasing taxes and interest rates right away. Russia did, and that negated the benefits of its privatization. Yes. And it didn't have a free market either. China was a feudal country until the Republic was established. And then it had a series of civil wars followed by the Japanese invasion. We agree on that. That makes China's economic rise after 1978 even more remarkable. They did after 1978 though, didn't they? Bob
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Post by Deleted on May 10, 2014 12:37:30 GMT -5
Not until over 20 years later. That's according to your own post. But still, they increased government intervention. And yet, China's GDP soared during the 1990s. By your own predictions, the the tax hikes should have slowed down growth noticeably, but that did not happen as far as I know. Interest rates interfere with markets regardless of whether they change or stay the same. In this case, both action and inaction constitute government interference. Yes, while continuing their free market reforms to make the economy stronger. If a government raises taxes while making free market reforms, is that an increase or a decrease of government interference? You have to keep in mind however that China's reforms happened very slowly and gradually over a 40 years stretch. Russia enacted the same reforms that China did in 30 years, within 3 years, and most of Russia's industry was privatized right away. China's privatization of state owned industries on the other hand was often incomplete, and even today the Chinese government retains large shares in many private businesses, so the Chinese government profitted directly from privatization of its industry, while the Russian government did not. They did indeed. Which is my point exactly - any third world country that manages to industrialize will experience incredible growth rates. Just take a look at Britain's economy before and during the Industrial Revolution. Or, heck, America.
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Post by rmarks1 on May 10, 2014 14:26:35 GMT -5
Not until over 20 years later. That's according to your own post. But still, they increased government intervention. And yet, China's GDP soared during the 1990s. No they didn't. They decreased it in 1978 and continued decreasing it for the next 20 years. When they finally raised taxes, they also continued with increasing free market reforms. More firms were privatized. This increase in free market activity was more than enough to cancel out the negative effect of increased taxes. Growth did not slow for two reasons: 1) Free market reforms, including privatization, were still being increased, and 2) The amount of the tax increase was very small. "Chinese income tax revenues, as a share of GDP, increased from less than 0.1 percent in 1986 to about over 1.5 percent in 2005 and 2.5 percent in 2008..." piketty.pse.ens.fr/fichiers/public/PikettyQian2009_AEJPP.pdfIn short, the increase was gradual and the increases were individually small. Therefore their effect was minimal. However, if China continues to increase taxes, a negative effect will manifest. You totally miss the point here. Interest rate increases slow down the economy. Whoever advised Yeltsin to increase interest rates at a critical transition point was an idiot. A free market economist, by contrast, would have advised Yeltsin to get the government out of the business of setting interest rates altogether. The free market will do that just fine. Apparently not enough. That depends on how many reforms are being introduced vs. how high the taxes are going up. In Russia's case, the tax increases plus interest rate hikes were obviously too much for the economy to bear. In China's case, the tax increases were very small and incremental, so the Chinese economy kept booming as more and more privatization occurred. RIGHT!!! Now you understand. The gradual reforms meant that the Chinese economy was constantly moving towards a free market. The point I've been trying to make all along is that movement in the direction of the free market results in a rising economy. The Chinese economy kept moving constantly and consistently in that direction, so it kept growing. Movement towards greater government interference tends to result in a slowing or shrinking economy. Russia, by contrast, not only made the move right away. They also started with large tax increases and a big rise in interest rates. That's like chopping off a slave's legs and then telling them that they are free to walk away. As for the Chinese government owning shares of companies, so what? How is the government any different from any private shareholder who is collecting dividends? The companies are still privately run. Funny that China didn't have those growth rates when the government ran everything. In fact the Chinese economic output decreased then. The growth only happened when free market reforms were introduced. China is now highly industrialized. But their growth rate is still over 7%, which is greater than that of any other industrial country. Why is that? Here are the growth rates for 2011. China is number 5. India is number 7. Germany is at number 50. The USA is number 54. www.photius.com/rankings/economy/gdp_real_growth_rate_2011_0.htmlHere is the data for 2013. China grew by over 7 1/2%. India by 4.7%. Germany by 1.3 %. The USA by 2.3%. China's economy is larger than that of Germany, yet it is growing faster. www.tradingeconomics.com/country-list/gdp-annual-growth-rateThat is the power of free market reforms. Bob
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Post by Deleted on May 11, 2014 5:27:17 GMT -5
But still, they increased government intervention. And yet, China's GDP soared during the 1990s. No they didn't. They decreased it in 1978 and continued decreasing it for the next 20 years. www.google.at/search?q=china+gdp&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:de:official&client=firefox-a&gfe_rd=cr&ei=o1BvU72dGuSg8weVmYDQDw#q=china+gdp+growth&rls=org.mozilla:de:officialAs you can see, China's GDP growth was most steady in the 1990s and after, when they had enacted their tax reforms. In other words, after China increased government interference, they grew longer and steadier than before. By your own argument, any tax increase at all is a movement towards government interference. Therefore, China moved towards government interference. No, you are missing the point here. Whether interest rates are increase, decrease, or stay the same does not matter with regards to government interference. It's always the same level of government interference, therefore we must disregard it. But by your own argument it doesn't matter to economic growth whether a market is free or not. It only matters whether a government increases or decreases interference. A change of interest rates constitutes neither an increase nor a decrease of interference, it's always the same level of interference. Therefore we must disregard this policy as irrelevant for our discussion. But by your own claim the only thing that really matters is whether a government decreases or increases interference. Do you claim that the Russian government after the collapse of the USSR increased its interference compared to the USSR? So the privatization of the majority of the Soviet economy was not enough to increase growth in Russia. But the sporadic, gradual, and incomplete privatization of a few regions in China were enough to increase growth in China? Regardless of whether the economy is free or not, yes. In other words, free markets don't actually matter to economic growth. Correct? Even though that movement was slower and more gradual than in Russia. In other words, institution libertarian policies is only successful if it happens extremely slowly. Therefore, introducing all libertarian policies in one fell swoop to make your society entirely free would in fact be detrimental to an economy because it can no longer move towards greater libertarian freedom! I always thought you were opposed to governments owning large portions of a country's economy? Now it's suddenly no problem to have government owned factories, so long as these factories are not officially run by an actual government? What about Western government owned businesses? Most of these are not directly owned by the government, either. For example, all state-owned businesses in Austria are part of a government-owned holding company. en.wikipedia.org/wiki/%C3%96IAG Why is that "funny"? The government that "ran everything" in China was led by Mao Zedong, one of the worst communist leaders in history. And unlike many other third world economies with terrible economic policies, Mao's China didn't have valuable natural resources like oil that could paper over their disastrous economic policies. Free market reforms, but not an actual free market. Don't you find that funny? Because China is still a relatively poor country with a developing economy, and therefore plenty of room to grow. Once income levels rise to Western levels you'll see manufacturing businesses moving elsewhere, just like what has happened in Japan and South Korea, and once that happens, they will slow down to the levels of mature economies such as Japan. China's economy appears "larger" than that of Germany because China has more than ten times the population of Germany. They are still poorer than many states in the former Eastern Bloc, even. They are nowhere near the level of development as countries like South Korea, let alone the US or Japan.
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Post by rmarks1 on May 11, 2014 12:02:28 GMT -5
Did you bother to read what I wrote earlier? Apparently not. If you had, you would have seen that I already answered this. 1) Taxes were raised in small increments over time. Therefore the interference was minimized. 2) Free market reforms were continued over this same period. These reforms were more than enough to counter any negative effect of the small tax hikes. And free market reforms also continued. These were strong enough to counter the negative effects of tax increases. LOL! So if the government raises the interest rates by 5% or 1%, it is the same? That is like saying if someone owes you $5 and they pay you back with $1 they have paid back the whole debt because 1 is the same as 5. How well did you do in math in school? Yes. And Yelstin increased interference on one end while decreasing it on the other. The effect of the increases outweighed the effect of the decreases. Oh I get it. You are joking here. It has to be a joke because what you just said defies common sense. It is like saying that if a boxer hits you or doesn't hit you, it's always the same level of damage because you are still in a boxing ring. Raising and lowering of interest rates has a major effect on an economy. The effect increases with the size of the change in rates. This is elementary economics. Take a look for yourself: Yes. I claim that the interference Yelstin did do (raising interest rates and taxes) was responsible for the downturn in the Russian economy. Raising of interest rates and taxes simultaneously causes an economy to contract. This is a well known economic fact. Do you deny this. Yes, because Yeltsin undercut any positive effect by raising taxes and increasing the interest rate. Gradual? Yes. Sporadic? No. The free market reforms that started in China in 1978 were continuous and steady. That is why the growth of the Chinese economy was continuous and steady. More later. It's lunch time. Bob
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Post by rmarks1 on May 11, 2014 14:24:56 GMT -5
Regardless of whether the economy is free or not, yes. YES! Especially in an unfree economy! They are the ones that need it the most. Non Sequetur. From the fact that making markets more free leads to economic growth, it does not follow that free markets don't matter to economic growth. In fact, quite the opposite. Wrong again. As I pointed out several times already, Yelstin's government raised interest rates and taxes by a large amount. This interference counteracted the positive effects of privatization. Where did this word "extremely" come from? You have provided no evidence at all to show that the Chinese economy changed "extremely" slowly. In fact, transforming an economy from third-world status to the second largest economy in the world in just three decades is considered extremely fast in economics. In fact, this rise happened so fast that it has been referred to as the Chinese Economic Miracle. www.bbc.com/news/world-asia-china-20069627See also: " CONTINUING THE CHINESE ECONOMIC MIRACLE" www.econ.ucla.edu/Lal/others/china.pdfwww.telegraph.co.uk/finance/comment/tom-stevenson/9400114/Chinese-economic-miracle-slowed-yes-but-still-humming.htmlApparently McAnswer, you are the only one who thinks the massive economic change in China happened "extremely slowly." That's like arguing that we shouldn't make sick people healthier because once they are 100% healthy, they won't be able to get healthier and this would be detrimental to their health. Yelstin could have still pulled it off had he not made large increases in taxes and the interest rate at the same time as privatization was taking place. That's like giving a sick person medicine and poison at the same time and then blaming the medicine if they don't get better. Shareholders are only in nominal "control" of companies. The vast majority of shareholders have no say in the management of the company. All they care about are the dividends and the growth of the stock price. Yes. No problem. As long as the government is not actually running the company, it is no different than a private shareholder. And most private shareholders only care about dividends and share price. If the government owns a majority of the shares, it still runs the company and that is socialism. China kept divesting itself of shares in private companies and increasing privatization. That's one reason its economy kept growing. LOL! One of the worst communist leaders in history? Does that mean you are giving Mao the blame for the economic disasters and not government control? Oh gee, if only China had had a "good" leader back then! Their economy would have really prospered! Give me a break. Government control has been deadly for the economy in every country in which it has been tried. It failed in Russia, Poland Hungary, Czechoslovakia, Rumania, Bulgaria, Albania, China, North Korea, Cuba, Vietnam, Cambodia. Let's see, did I leave anybody out? Oh yes, the UK. Why? The freer the economy became, the more it grew. What you say here is like claiming it's funny that some severely sick people get healthier gradually but are not actually in complete health yet. Oh that's already happening. Businesses are already moving to Vietnam and other third world countries. But China's economy is still growing faster than all other industrialized countries. Once the economy is relatively free, capital and entrepreneurs shift to other industries that are growing faster. But China was even poorer before the free market reforms. Yet their economy didn't start its sharp upward rise until after the free market reforms. Why do you suppose that is? Yes, millions of Chinese are still poor. But over 200 million of them are no longer poor. How did that happen? As for South Korea, the entire country was devastated by the end of the Korean War in 1953. On top of that, most of the industry was in the North. Yet South Korea is a major industrialized country today. They have the 15th largest economy in the World. North Korea chose a path of government control. They are number 119 on the list. What you seem to be saying here is that economic policies don't matter. But they obviously do. Bob
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Post by Deleted on May 11, 2014 14:46:14 GMT -5
Non Sequetur. From the fact that making markets more free leads to economic growth, it does not follow that free markets don't matter to economic growth. In fact, quite the opposite. And yet, Western economies are not growing as fast as China's, despite being freer in all areas.
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Post by Deleted on May 11, 2014 14:56:01 GMT -5
I was referring to the implementation of libertarian policies, not economic growth. Nobody who talks about the "Chinese Economic Miracle" is talking about the miraculously fast implementation of libertarian policies.
Russia transitioned from Soviet style planned economy to a Western style capitalist economy within less than 10 years.
China on the other hand is still in a state where the government directly or indirectly controls large portions of the economy, after 40 years of limited reforms.
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Post by rmarks1 on May 11, 2014 15:29:50 GMT -5
Non Sequetur. From the fact that making markets more free leads to economic growth, it does not follow that free markets don't matter to economic growth. In fact, quite the opposite. And yet, Western economies are not growing as fast as China's, despite being freer in all areas. :DAre you joking? Western economies are subject to all sorts of government interferences, and the amount of the interference grows each year. Bob
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Post by rmarks1 on May 11, 2014 15:39:47 GMT -5
I was referring to the implementation of libertarian policies, not economic growth. Nobody who talks about the "Chinese Economic Miracle" is talking about the miraculously fast implementation of libertarian policies. No, but when they mention the actual policies that caused the growth, they all turn out to be libertarian policies. Yes, and they made a mess of the transition, didn't they? That's what they get for greatly increasing taxes and interest rates together during a critical transition period. LOL! "Limited reform?" In the 1990's, the Chinese economy had already passed a critical transition point. That's when the private sector passed the 50% mark. That's when the private sector produced more than 50% of all goods and services in the Chinese economy. That was almost 20 years ago, and privatization had been progressing ever since. The reforms in China were massive and merely calling them "limited" doesn't change that fact. Can you find even one reliable source that agrees with you that the Chinese reforms were "limited?" If you do, please post it. Bob
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