Economics Discussion Thread

[Taihei Tengoku]

"I'm a dialectical materialist, nothing exists beyond the scientifically provable and the USSR was good"
"uh actually you can't measure quality of life by material metrics that stuff is ~unquantifiable~ by ~numbers~"
"I'm still a dialectical materialist btw"

[Orostan]

The GDP isn't a measure of quality of life, It's called the "Gross Domestic Product" for a reason.

Nice things cost money--the cuddly Scandinavian social democracies "pay" for their woke welfare states and generous worker's rights by heavily taxing the most productive populations in the world.

You're missing the point. My point that GDP being "inflated" by tanks completly ignores the nature of industrial production. The fact that the USSR's GDP was part tank only means that the Soviet Government was using industrial capacity it could've used elsewhere. And I don't think you understand the differences between the USSR and Scandinavia. The Soviet Union was not taxing its citizens in the way Scandinavia does. They were getting their money from taxes on products made by state industry. In addition the USSR and Scandinavia had completly different economic systems.

"I'm a dialectical materialist, nothing exists beyond the scientifically provable and the USSR was good"
"uh actually you can't measure quality of life by material metrics that stuff is ~unquantifiable~ by ~numbers~"
"I'm still a dialectical materialist btw"

1- I never said I liked dialectical materialism, even though I do. The least you could've done is ask me or something.
2- That's a huge straw man. Dialectic materialism is just a way of looking at history with Hegelian dialectics and historical materialism. All historical means is looking at the productive forces and material conditions of a certain time and basing an understanding of history on it. A Hegelian or a Marxist doesn't say that anything that cannot be measured does not exist. Someone who's read Stirner says that.
3- GDP isn't a measure of quality of life. By that logic the USA should not have 15% of its population in poverty.

[Taihei Tengoku]

By US metrics 100% of the USSR's population lived below the poverty line

[Orostan]

By US metrics 100% of the USSR's population lived below the poverty line (Image)

>what is location
>what is subsidized housing
>what is subsidized services and projects

>what is making an argument

[Taihei Tengoku]

What are they, really? In the end the GDPPC (a good proxy for average "wage" since the USSR had a low Gini) is still a quarter of that of an American's--i.e. poverty.

[Orostan]

What are they, really? In the end the GDPPC (a good proxy for average "wage" since the USSR had a low Gini) is still a quarter of that of an American's--i.e. poverty.

Uh, they're a lot. That subsidized housing and services meant that nearly all of this income was disposable. The average wage in the USSR does not reflect how people actually lived, and disposable income is a far better indicator in the case of the USSR.

[Trumptonium]

Personally it's a bit monetarist/new-keynesian with a slight protectionist slant and heavier government involvement in (nurturing) strategic sectors, regulatory oversight of the financial health of TBTF's and infrastructure/R&D investment. All in all, while not a school, I identify closest to the concept of French dirigisme.

I'm not dogmatic either and I prefer something that simply works best, rather than what should work best according to the theory of x 30-300 years ago.

You and I may actually agree very much on this topic.

*gasp*

Yes, pragmatism is more important than principles, as I mentioned in another thread. Too many world leaders unfortunately get stuck in a circle trying to implement policies they know won't work (*cough* theresa may) because it is in their or their party's ideological principles to do so ... sometimes facts change, and your opinion should change with it. I think over the last two or so decades but especially since the crash, politics has become so polarised that people are too stubborn to admit mistakes, or, worse, implement those mistakes after everyone knows they won't work just to stick it to the other side. I shudder to think how this would work if this was 1974 and we were still under Bretton Woods fiscal/monetary/regulatory conventions .. would we ever leave a recession?

Bush was a moron, Trump and Obama are hard to judge due to exogeneous factors, but I think Clinton played a great role.

The newer Keynesian models are fine, but not without flaws. Pragmatism is obviously key.

Tbh my only/main skepticism (non-data) in NE is whether acceleration is still a valid theory in the modern economy. Post-2008 record corporate profits & reinvestment sort of make this mainstream theory rather redundant, but I neither have the knowledge nor the time to pursue it further.

Not sure where you learnt economics.

Universities clearly discernate between monetarist and keynesian thought, and coming across counterarguments from the Austrian and classical school is inevitable at some minor point, so is learning about mercantilist thought when you inevitably take economic history modules.

I suppose if you take a degree in the US, coming across the National/American school is inevitable too.

Namedropping economists is not at all like teaching economics schools.

Macroeconomics teaches ideas about monetary policy that came from the likes of Milton Friedman alongside fiscal ideas from Keynes but here's the point... both are taught together as a package within "what economics knows".

no

By US metrics 100% of the USSR's population lived below the poverty line (Image)

By USSR metrics, most of the American population is in relative poverty.

The quality of life of somebody on a wage of $12 500 and housing costs of $2 000 will quite obviously be radically higher than the quality of life of someone on a wage of $45 000 and rent costs of $30 000 in NY/SFB/Seattle.

Other regions such as Mississippi and Alabama are, to use Trump's metrics, shitholes. In comparison to most of post-communist Eastern Europe.

Inequality-adjusted HDI puts the US on par with Slovakia. The US' enlarged wealthy section of the population overly inflate American position in any wellbeing ranking. Whether you're a middle class person in NYC or an average person anywhere in Southeast US, the Rust Belt or West Virginia, your life will be worse in comparison to anyone in urban Eastern Europe today or even in the USSR in 1990. Although places like NYC and SFB are exaggerated simply because of housing costs, where in communist states they were subsidised to 85-100%.

American attitude to quality of life is one of pulling wool over your eyes and refusing to leave the 1950s to acknowledge that >99% of Australasia, >75% of Europe and >33% of Asia is better off than you by every metric that excludes the top 5%.

To be frank, I'd rather earn 5% less and have 30 days paid holiday than get that extra 5% and work every day of the year except a few chosen public holidays and the Christmas-NYE period. In fact, less than 2% of 125 039 000 private sector workers in the United States get the statutory minimum annual paid holidays of 24 days a year (or higher) in the European Union. Number of hours worked is another significant point of contention, with Americans working the longest hours of developed economies in the world to get those sixth highest wages that they earn, an average of 47 hours a week for full-time workers. In France that's 35, and in the USSR that was 38. The US is also on the higher end of the commuting time scale, so basically the average full-time employed American spends half of their day trying to earn money to cover the other half.

It's other metrics like these that, among others, mean quality of life in the US doesn't cut it anymore.

[Taihei Tengoku]

What are they, really? In the end the GDPPC (a good proxy for average "wage" since the USSR had a low Gini) is still a quarter of that of an American's--i.e. poverty.

Uh, they're a lot. That subsidized housing and services meant that nearly all of this income was disposable. The average wage in the USSR does not reflect how people actually lived, and disposable income is a far better indicator in the case of the USSR.

Real productivity is still taken out of the poverty-level GDPPC of the Soviet citizenry (it is they who make the subsidized housing, after all). The services are still paid for by someone--and in the case of state services it is everyone.

and about those work hours

[Orostan]

Uh, they're a lot. That subsidized housing and services meant that nearly all of this income was disposable. The average wage in the USSR does not reflect how people actually lived, and disposable income is a far better indicator in the case of the USSR.

Real productivity is still taken out of the poverty-level GDPPC of the Soviet citizenry (it is they who make the subsidized housing, after all). The services are still paid for by someone--and in the case of state services it is everyone.

and about those work hours

According to this the USSR had higher levels of absenteeism. The USSR also had to match the USA in the cold war, with a smaller population, industrial capacity, and higher levels of absenteeism. Of course the average soviet citizen had to work hard. This was in an era where the USSR and USA were both absolutely terrified of each other, and the USSR was at a disadvantage.

And also, I think it's important to inform you that the bulk of the USSR's tax revenue came from mark ups on consumer goods - not income tax.

[Trumptonium]

and about those work hours

they confirm what i said. at the time of dissolution, soviet workers had working hours similar to Europeans today, with, according to your link, full-time workers averaging 40.7 hours and people in healthcare lowest at 38 hours a week, with 15 days of guaranteed paid holiday at 100%, dramatic improvement from post-war reconstruction in 1955 where there were no paid holidays and a 47 hour working week

american full-time employees today work an average of 47 hours a week. that's a developed nation where the average person works as many hours a week as a person under an authoritarian planned economy trying to reconstruct itself after a war that halved industrial output and destroyed one third of housing stock. and only 20% of americans today receive the same amount of paid holidays a year as all soviets were entitled to in 1989

i think that says more about the US than about the USSR actually

[Taihei Tengoku]

with a smaller population

? the soviet union had 300 million people in 1991.

And also, I think it's important to inform you that the bulk of the USSR's tax revenue came from mark ups on consumer goods - not income tax.

It's totally unimportant--the incidence is exactly the same for any given revenue.

[Taihei Tengoku]

and about those work hours

they confirm what i said. at the time of dissolution, soviet workers had working hours similar to Europeans today, with, according to your link, full-time workers averaging 40.7 hours and people in healthcare lowest at 38 hours a week, with 15 days of guaranteed paid holiday at 100%, dramatic improvement from post-war reconstruction in 1955 where there were no paid holidays and a 47 hour working week

american full-time employees today work an average of 47 hours a week. that's a developed nation where the average person works as many hours a week as a person under an authoritarian planned economy trying to reconstruct itself after a war that halved industrial output and destroyed one third of housing stock. and only 20% of americans today receive the same amount of paid holidays a year as all soviets were entitled to in 1989

i think that says more about the US than about the USSR actually

The chart says nothing about "all workers." What is the distribution of all workers who work N years at a single firm? Without this information you cannot create a weighted average.

The USA today has been in a slow-growth rut basically since the dot-com bust--as with most slow-growth periods the way to earn more is just to work harder, which is why the long workweek is almost the exclusive domain of the top half of the income distribution

[Orostan]

with a smaller population

? the soviet union had 300 million people in 1991.

And also, I think it's important to inform you that the bulk of the USSR's tax revenue came from mark ups on consumer goods - not income tax.

It's totally unimportant--the incidence is exactly the same for any given revenue.

Sorry - I was thinking of modern Russia when I mentioned the population bit. They still had a smaller working population though, and were still catching up with the USA.

And regarding Soviet taxes, a while ago you implied that it was only the productive workers footing the bill for subsidized services. Everyone is paying the bills.

they confirm what i said. at the time of dissolution, soviet workers had working hours similar to Europeans today, with, according to your link, full-time workers averaging 40.7 hours and people in healthcare lowest at 38 hours a week, with 15 days of guaranteed paid holiday at 100%, dramatic improvement from post-war reconstruction in 1955 where there were no paid holidays and a 47 hour working week

american full-time employees today work an average of 47 hours a week. that's a developed nation where the average person works as many hours a week as a person under an authoritarian planned economy trying to reconstruct itself after a war that halved industrial output and destroyed one third of housing stock. and only 20% of americans today receive the same amount of paid holidays a year as all soviets were entitled to in 1989

i think that says more about the US than about the USSR actually

The chart says nothing about "all workers." What is the distribution of all workers who work N years at a single firm? Without this information you cannot create a weighted average.

The USA today has been in a slow-growth rut basically since the dot-com bust--as with most slow-growth periods the way to earn more is just to work harder, which is why the long workweek is almost the exclusive domain of the top half of the income distribution

We don't want a weighed average. We just want an average. The tables in that USSR doucument you posted just had regular averages.

Also, working harder does not mean more income. In fact Anericans are working harder for not much more money. And we already went over that the EPI's measurements were accurate in their productivity study, as they do count total compensation.

http://www.epi.org/publication/ib348-tr ... 1979-2007/

[Taihei Tengoku]

The Americans that make more money work more. Within a time period it is the low earners that work less--their lack of work hours is a contributor to their low earnings.

Non-productive workers paying taxes are merely just swapping rubles--the real production that pays for the non-workers buying the taxed goods comes ultimately from the productive population. It is a bit like the taxes the government collects on the paycheck the government pays me. I am not a net taxpayer--my tax incidence is simply a reduction of the tax burden paid by the private sector.

[Orostan]

The Americans that make more money work more. Within a time period it is the low earners that work less--their lack of work hours is a contributor to their low earnings.

I just posted an EPI article disproving that. Please read it.

Non-productive workers paying taxes are merely just swapping rubles--the real production that pays for the non-workers buying the taxed goods comes ultimately from the productive population.

So? It's still not income tax.

[Forsher]

Namedropping economists is not at all like teaching economics schools.

Macroeconomics teaches ideas about monetary policy that came from the likes of Milton Friedman alongside fiscal ideas from Keynes but here's the point... both are taught together as a package within "what economics knows".

no

Quality argument.

[HMS Barham]

"I'm a dialectical materialist, nothing exists beyond the scientifically provable and the USSR was good"
"uh actually you can't measure quality of life by material metrics that stuff is ~unquantifiable~ by ~numbers~"
"I'm still a dialectical materialist btw"

I am actually coming to agree with them on this (without the inconsistency since I'm not a dialectical materialist): GDP is a tractor production stat. It's a bit more honest, but then our communism is that in general. A bit less communist.

[HMS Barham]

Real productivity is still taken out of the poverty-level GDPPC of the Soviet citizenry (it is they who make the subsidized housing, after all). The services are still paid for by someone--and in the case of state services it is everyone.

and about those work hours

According to this the USSR had higher levels of absenteeism. The USSR also had to match the USA in the cold war, with a smaller population, industrial capacity, and higher levels of absenteeism. Of course the average soviet citizen had to work hard. This was in an era where the USSR and USA were both absolutely terrified of each other, and the USSR was at a disadvantage.

And also, I think it's important to inform you that the bulk of the USSR's tax revenue came from mark ups on consumer goods - not income tax.

It is not really meaningful to say that the USSR collected taxes.

The USSR collected taxes by building a chain of factories producing something ultimately consumed by the state, and you were paid to work in it. The tax you paid was in everything you wanted to buy being more scarce as an indirect effect of the state directing national resources to other things.

My friends who lived in the USSR report that more or less every job paid very well against the official prices, but you could not actually get hold of anything desirable unless you had connections in the state who could somehow make you having a Volga a matter of important national concern.

Like how the US supposedly does not have universal healthcare, yet hospitals won't turn you away even if you are stony broke, and obviously stony broke, or even obviously an illegal immigrant, they will just present you with a large bill afterwards. Since the only punishment for someone without assets openly refusing to pay this bill is that it's harder for you to buy things other than healthcare on credit in the future, people who don't have mortgages do not have to pay for healthcare, and the vast bulk of working people with assets and mortgages who think they are buying extremely expensive health insurance for themselves are mostly just paying tax that is spent on others.

[Trumptonium]

no

Quality argument.

you didn't make an argument you just pulled anecdotes out of the air and applied them across the whole world's thousand and ten universities

[Orostan]

According to this the USSR had higher levels of absenteeism. The USSR also had to match the USA in the cold war, with a smaller population, industrial capacity, and higher levels of absenteeism. Of course the average soviet citizen had to work hard. This was in an era where the USSR and USA were both absolutely terrified of each other, and the USSR was at a disadvantage.

And also, I think it's important to inform you that the bulk of the USSR's tax revenue came from mark ups on consumer goods - not income tax.

It is not really meaningful to say that the USSR collected taxes.

The USSR collected taxes by building a chain of factories producing something ultimately consumed by the state, and you were paid to work in it. The tax you paid was in everything you wanted to buy being more scarce as an indirect effect of the state directing national resources to other things.

My friends who lived in the USSR report that more or less every job paid very well against the official prices, but you could not actually get hold of anything desirable unless you had connections in the state who could somehow make you having a Volga a matter of important national concern.

Like how the US supposedly does not have universal healthcare, yet hospitals won't turn you away even if you are stony broke, and obviously stony broke, or even obviously an illegal immigrant, they will just present you with a large bill afterwards. Since the only punishment for someone without assets openly refusing to pay this bill is that it's harder for you to buy things other than healthcare on credit in the future, people who don't have mortgages do not have to pay for healthcare, and the vast bulk of working people with assets and mortgages who think they are buying extremely expensive health insurance for themselves are mostly just paying tax that is spent on others.

Thank you, i did not know this.

[Taihei Tengoku]

The Americans that make more money work more. Within a time period it is the low earners that work less--their lack of work hours is a contributor to their low earnings.

I just posted an EPI article disproving that. Please read it.

Non-productive workers paying taxes are merely just swapping rubles--the real production that pays for the non-workers buying the taxed goods comes ultimately from the productive population.

So? It's still not income tax.

1) the EPI article agrees with me--the low earners are the low workers. The bottom fifth work 1,500 hours a year on average; that's a 30-hour workweek, not 47.
2) you really don't know what incidence is

"I'm a dialectical materialist, nothing exists beyond the scientifically provable and the USSR was good"
"uh actually you can't measure quality of life by material metrics that stuff is ~unquantifiable~ by ~numbers~"
"I'm still a dialectical materialist btw"

I am actually coming to agree with them on this (without the inconsistency since I'm not a dialectical materialist): GDP is a tractor production stat. It's a bit more honest, but then our communism is that in general. A bit less communist.

It is imperfect--bad countries with bad policy can have higher GDP than they "ought" to. That being said good countries with good policy have high GDP or will have high GDP in the near future.

[HMS Barham]

I am actually coming to agree with them on this (without the inconsistency since I'm not a dialectical materialist): GDP is a tractor production stat. It's a bit more honest, but then our communism is that in general. A bit less communist.

It is imperfect--bad countries with bad policy can have higher GDP than they "ought" to. That being said good countries with good policy have high GDP or will have high GDP in the near future.

Yes but they also produce a greater tonnage of tractors.

[Forsher]

Quality argument.

you didn't make an argument you just pulled anecdotes out of the air and applied them across the whole world's thousand and ten universities

Actually, no. What I did was characterise economics as a discipline. Your suggestion that the subject is riven into various different "schools" which have wildly divergent ideas about, e.g. fiscal and monetary policy, ought to attract a considerable amount of anxiety. The reason it doesn't is because economics as a discipline takes such subjects and treats them as part of the package: what economics knows.

You, my friend, are suggesting that there is a Bayesian versus Frequentist analogue within the economics discipline when you know for a fact there isn't. Your "pragmatism" isn't the least bit divergent but rather the inevitable product of the subject itself.

I'm not denying that macroeconomic thought hasn't advanced out of collections of GroupThinkers... I am saying that the iterative process of GroupThink is not at all relevant to understanding what economics thinks now.

[The Parkus Empire]

Economics as a discipine is a bit tricky in that it presumes desire is not problematic and that fulfillment of it is a good which should be generally sought. Economics will sometimes look to how to increase desire, but decreasing or abolishing desire is not even a consideration. Liberal economics are also very suspect in that they posit value as subjective, but use an apperently absolute, if inflating, value of money to hold their magic trick together.

[Taihei Tengoku]

Actually if you value self-righteousness you will rationally move to maximize it as an economic actor, as you are doing now