With the expansion of the financial sector, greater proportions of this ad money are being used to encourage us to borrow money and get into debt! Evidence shows that this is linked to the current epidemic in childhood obesity. In short, the sales effort is a deeply dubious enterprise which inflicts great damage on our societies. When it comes to food, never before has so much been controlled by so few. Ten companies control two-thirds of global seed sales. Monsanto is the biggest of the big.
Capitalism is also poisoning our food. In the s, Monsanto came up with the controversial idea of injecting cows with growth hormones to increase milk yields. This became a scandal when tests showed that this milk could cause cancer in humans. Despite being banned in Europe, this milk continues to be sold in other countries, including the U. As rice stocks hit their lowest levels in 30 years, the corporation raised prices. Far from being efficient, capitalism creates waste, destruction and shortages that are completely unnecessary. Industries that effect us all, such as the banks, transport, land, utilities, construction, healthcare and food, would be planned to provide us with what is needed, but to do that we need to collectively own and control them.
That means expropriating the capitalists. Paradoxically, the monopolisation of the capitalist system creates more favourable circumstances for the building of a planned economy. The commanding heights rest in fewer hands. Back in the s, you would have had to take over thousands of companies in order to plan the economy. That would have been impossible. Today, the top companies would probably suffice to plan the economy. There has been huge monopolisation of the financial sector. In , the ten largest U.
Case For Socialism, The (updated Edition) : Alan Maass :
The largest five U. The latter includes the funds supplied by entrepreneurs and the funds they have borrowed. The spread between expected benefits and total costs incentivizes the rate of entrepreneurial activities, and, consequently the rate of economic growth. For decades, the market determined this spread.
And it worked. Millions of entrepreneurs, through successes and failures, created the American miracle. If and when democratic socialists gain power, punitive taxes and government programs would reduce the spread between benefits and costs of entrepreneurial activities, and disincentivize entrepreneurship.
Disincentivizing entrepreneurship reduces economic progress. Through this process, democratic socialism would move the market-controlled benefits-costs spread of entrepreneurial activities in competitive markets to bureaucratic control in political markets.
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George Stigler anticipated this critical change back in With its power to prohibit or compel, to take or give money, the state can and does selectively help or hurt a vast number of industries. Millions of dollars that people pay for football tickets is the best evidence that they get more satisfaction watching professional football players than from any other bundle of goods the same millions of dollars could buy. Those not drafted bear the entire loss of the choice they made. Those who are drafted might earn millions of dollars in the NFL, where the average playing career is about six to eight years.
Confiscatory income taxes would incentivize some talented young people to choose careers other than football; that is, government distributional policies would make this group worse off. Whether football stadiums are full or not depends on the quality of the game, which determines the demand for tickets.
In the s, a relatively large group of people emigrated to the United States after fleeing Vietnam by boat and ship. They were also seen as competitors by many Americans, especially in the fisheries. They worked long hours, saved money, and became entrepreneurs. Within one generation, they created economic wealth with their bare hands. Two major components of private property rights that set it apart from other types of property rights are exclusivity of use and transferability of ownership. The first creates incentives for individuals to move their resources to the highest-valued uses these individuals are capable of discovering.
The second provides incentives for resources to move from lower- to higher-productivity owners. In the Anglo-American legal tradition, private property rights serve the subjective preferences of property owners. In , the city of Birmingham, England built a large sewer that polluted the Thames River. He asked a court to issue an injunction. The city admitted that the sewer was polluting the river. However, it invoked the public good argument. That is, instead of seeking governmental interference, the parties should negotiate a contractual agreement.
An efficiency-friendly consequence of free contracts is that they minimize resort to the state. Why not? Because private ownership, supported by the rule of law, creates a conflict between the incentive effects of private property rights and the redistributional policies of democratic socialism. Hence it must attenuate private property rights.
How, and at what cost? The process is as follows: The value of any good to a person depends on the bundle of rights to do things with that good. The value of a car to me is less if I have no right to resell it. I will pay more for a worker I can fire at no cost. The attenuation of private property rights reduces that bundle of rights. For example, rent control has the same effect as confiscating a part of a privately-owned building.
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That is, this interference with the price of goods and services impedes the flow of resources from lower- to higher-valued uses. Kim and Julia Howe of the Heritage Foundation did last year. A fully socialized economy would be just as unfeasible as a fully privatized one. Socialism, as the term has evolved in mainstream usage, does not mean a total absence of markets, just as capitalism does not imply a total absence of public ownership and regulations.
Democratic socialism simply means a democracy leaning toward the leftward bound of the private-public ownership spectrum. The government functions as an intermediary, managing state corporations on behalf of the people. The Norwegian government in particular controls the levers of the economy through ownership of major industries and financial institutions. It did not achieve this control through forced nationalization but through stock acquisitions on the open market. These investments, predominantly in hydropower and energy-intensive industries, were heavily financed by German war reparations, and to a lesser degree by the U.
Marshall Plan. A second round of acquisitions began with the discovery of petroleum on the Norwegian continental shelf.
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A final round of acquisitions arose from the Norwegian banking crisis of to As trust in the banking system recovered, public ownership was steadily scaled down until the current arrangement of roughly one-third public, two-thirds private ownership was established. While the U.
The public benefits of partially socialized industrial and financial sectors extend beyond dividends and veto power. The same can be said of financial institutions, whose gambling resulted in the Great Recession. When boards of directors hire CEOs, they instruct them to maximize shareholder value. For private shareholders, value mostly boils down to short-term return on their investments. Privately owned banks are thus encouraged to take on major long-term risk for the sake of maximizing short-term profits.
And such over-leveraging is the reason that the U. For public shareholders, value is a multivariate function that includes long-term, macroeconomic concerns. In the first half of the last decade, Norwegian banks went against the crowd by shunning both subprime-based bonds and Icelandic bank bonds—which the Norwegian government deemed too risky, despite their excellent rates of return. In a article for Rethinking Economics, former head of the Financial Supervisory Authority of Norway Bjorn Skogstad Aamo ascribes the development of this cautionary attitude to the to banking crisis and the subsequent public ownership of banks.
As a result of such caution, Norway cruised through the Great Recession mostly unscathed. More significantly, there were no domestic bailouts. Unemployment barely budged. Had the boards of Goldman Sachs and Lehman Brothers been chaired by government representatives, they, along with the U.