I have been a carpenter and an apps programmer for my entire adult life and know nothing of formal "economics".
But I wonder why it inflames such passion and "religious fervor" in some people. Does it bother anybody besides me that we allow wars to be fought over this arcane notion?
I guess we have to look to an end point of what we WANT the world to be like when all is said and done. My goal or vision would be to ("goals"😉; have all people with clean water, shelter over their head, ample food, good health care, good education without "indoctrination" to religions, and freedom from fear of government(s).
As an amateur (and not too bright economist) -- I see that this requires WEALTH. You take the richest people on earth and say they are "greedy". Ok. Ho hum. Now what? So where is their money and what is it doing while they are being greedy? It can't just disappear. It's working. Doing something -- because money that does nothing doesn't grow. Wealth is used by the masses as a general rule. The more wealth that accumulates, the more there seems to be for the "poorest of the poor". I have seen this with my own eyes from the early 1950's when I was a lad. So in my life-time, I think -- without being able to prove it -- that the poorest of the poor are maybe a single percentage point "richer" as a function of the aforementioned "goals" of life than when I came into this world. Maybe.
So it seems to me that progress is slow but inevitable. Given enough time, I think that we can reach a state of generalized "wealth of the masses" on our mud-ball planet. Technology is the key. Electricity seems to be the absolute minimum factor of "wealth" as far as the poorest of us all.
This thread was inspired by the french student riots that are going on as I write this. I think how marvelous it would be to have Albert Einstein set in a classroom and as an amateur economist tell them what he told me in books about his life. (I paraphrase here.) "Globalization is the key to fixing poverty. Only when we buy from and sell to the poorer nations can they gain wealth. The secret to having a more uniform wealth distribution on our planet among nations is to distribute the jobs to the poor nations of earth and let the richer nations suffer a tiny bit as they develop new economies to fit the times."
Originally posted by StarValleyWyHi StarValleyWy,
I have been a carpenter and an apps programmer for my entire adult life and know nothing of formal "economics".
But I wonder why it inflames such passion and "religious fervor" in some people. Does it bother anybody besides me that we allow wars to be fought over this arcane notion?
I guess we have to look to an end point of what we WANT the world ...[text shortened]... ons suffer a tiny bit as they develop new economies to fit the times."
I normally do not post on these forums but must applaud some of the arguments and debates made on this site.
Interesting post - If I may be so bold as to share my thoughts on this, I am not an expert in this field either but I believe what you just touched upon is called Trickle Down Theory or Supply-Side Economics or Reaganomics
http://www.investorwords.com/5075/trickle_down_theory.html
http://en.wikipedia.org/wiki/Reaganomics
I believe it is true that when companies and ultra-rich individuals are improving their lot, they will also improve the lot of those at the bottom end of the totem pole. However, this brings four things into question -
1. Are the gains by the poor keeping ahead of inflation? I think sometimes it does not but I do not have numbers to back this.
2. Are the gains by the rich so much higher than the poor where the inequality of wealth is worsened - I suspect this is true because the rich do save. By extending this logic, that money will not come down the chain. Since, it is human nature to compare oneself to the masses or the people "higher up", this may trigger passions to flare.
3. Sometimes I feel that reaching your goal (which I hope for as well) is a race against time - can we get to these people in enough time to ward off radicalism or just simply, the poor folk run out of patience for progress to reach them? I believe this is one of the reasons we have seen revolutions in the world or finding of new countries. Along the way, this desperation or longing for better times may "turn" people. I suspect this causes the passion and "religious fervor" in some people that you speak of (I would also like to add that I think a lot of people do not fully understand how this happens).
4. Outsourcing - I suspect the people in the richer nations who will be losing the jobs (justifiably) do not care for this all that much!
I realize that I sound of two minds on this but it is a tug of war but there is no mistaking that globalization and the pros and cons it brings are happening and will continue to happen.
After saying all of this, I believe that business is the best solution that we have to attain this "goal" unless someone comes up with a better idea. Speaking of better ideas (although, it is still embedded in the world of finance and economics), here is one that I believe is working well -
http://www.microcreditsummit.org/
http://en.wikipedia.org/wiki/Microcredit
An economist named Muhammad Yunus is cited a lot for being one of the pioneers in this field where very small loans are made to very poor people. The results have been impressive.
Hope this adds value to this debate and I would be very interested to find out what others think.
GuardianBU
Originally posted by StarValleyWyInteresting thread and points SWV. In practice the MDCs have reluctantly given up anything to benefit the 3W countries. They have jealously held on to their advantage in prod of secondary products .. vehicles, etc until Japan and other far east countries forced their way into the market and more recently China and India. Even in primary production they dont care to let go. The demise of sugar cane in the Caribbean in the 90s (a major contributor to income and forex in these poor islands) is the direct result of Europe and US insisting that they produce their own sugar and not buy from the WI. I remember in the 1970s, Guyana could no longer buy apples and grapes from Canada because of forex shortage and Canada retaliated by stopping the importation of all of Guyanese rice, sugar and pineapples.
"Globalization is the key to fixing poverty. Only when we buy from and sell to the poorer nations can they gain wealth. The secret to having a more uniform wealth distribution on our planet among nations is to distribute the jobs to the poor nations of earth and let the richer nations suffer a tiny bit as they develop new economies to fit the times."
There is far too much selfishness in the world for globalisation (and the 'one world' ideas) to succeed just yet ... we are far too immature a race and we may (as you have said) need a couple hundred years to grow up.
The only way out for the 3W right now, is to compete by whatever means necessary .. including copyright infringement, stealing technology etc. This is the reason why China and India is now about take the market away from the West in several high tech areas. While I dont necessarily agree with some of the methods, I can understand and I have first hand experience in what poverty and desperation can do to a people. What has made their plight harder to swallow, is the fact the internet and cabe technology, has made the flow of info so easy and many can now sit in their humble mud huts with their hungry kids and watch the dogs and cats of the West live the good life!
Thanks GuardianBU and Rajk999 for excellent and positive posts.
A GRAND EXPERIMENT IN WEALTH DISTRIBUTION
What if we -- as the first world -- were to gift to the second and third world ALL THE ELECTICAL POWER THEY COULD POSSIBLY WANT? And what if we could do this today by using the same funds now wasted on "international economic justice" and/or "war"?
Here for your serious discussion is a proposal for debate that we should do exactly that. First read these primers or others that support your views more directly. I chose these because of their educational value and lack of propaganda content.
http://en.wikipedia.org/wiki/Nuclear_reactor
http://www.futurepundit.com/archives/001584.html
http://web.mit.edu/canes/publications/abstracts/nes/mit-nes-003.html
http://www.phyast.pitt.edu/~blc/book/chapter9.html
It doesn't matter in which order you read these.
These ideas jump out at me.
1 - There seems no reason we can't build large electical plants for about 3 Billion dollars each. Three hundred such plants (1 trillion dollars capital investment say) would put the african continent into the same "electricity wealth" category as the UK ...for example. A trillion is a lot right? Until you realize that it is only 1/12th of the US GDP. I would gladly tithe for a decade to do this.
2 - This is just a pipe dream as long as dictators control "governments and nations". With viable democracies in place of despots, then it seems doable.
3 - Enormous investment in infrastructure would drive a growth economy for decades. Building the transmission, switching and local distribution of electricity would support large masses of people in itself, each aware of what their "product", ie, electricity can do and how to use it. These people would fan out from their base line and develop industry and business based on the SAME THING THAT DRIVES modern economies... ELECTRICITY. We know this is how it works because we have ten or more models that show exactly WHAT DID happen in the Americas, Europe and Japan... to name a few.
It just seems to me that as long as people are limited to muscle power and small spot source electricity, they are forever doomed to 19th century wealth levels. I could be wrong. I just can't wee any examples of 21st century wealth existing in muscle driven economies.
So in summary, we need to eliminate dictatorships and establish democracies. We need to solve the problems inherent in nuclear power. We need to fund the second and third world electicity deficit. We need to grow up a bit and realize that it CAN be done, but not as long as we continue to be brainwashed into thinking that "Government is God". It ain't. It can be changed almost at a whim if people get mad and get serious.
Rant rant.
There. That felt good.
Mike
Originally posted by StarValleyWyBut wouldn't the investment you propose be done with public funds?
We need to grow up a bit and realize that it CAN be done, but not as long as we continue to be brainwashed into thinking that "Government is God".
No company would invest by themselves so massively, since it is not economically profitable so you'll need public investment projects.
The greatest challenge in third world countries is establishing stable democracies, with governments elected and held responsible towards the people.
If you don't have these conditions, exploitation of such massive public investments would certainly lead to corruption and this corruption could very well fund warlords, or create too many incentives for such corruptibles to gain power.
Your second point is the key, in my opinion. And it's not an easy one by any means.
Originally posted by StarValleyWySWV, lets assume that its possible and all your requirements (1/12 GNP, democracy, rant rant, etc ..) fall into place for successful implementation of the electricity project, the question then becomes 'how long after the project will your initial stated initial goals be realised?'.
Thanks GuardianBU and Rajk999 for excellent and positive posts.
A GRAND EXPERIMENT IN WEALTH DISTRIBUTION
What if we -- as the first world -- were to gift to the second and third world ALL THE ELECTICAL POWER THEY COULD POSSIBLY WANT? And what if we could do this today by using the same funds now wasted on "international economic justice" and/or " people get mad and get serious.
Rant rant.
There. That felt good.
Mike
If I were to draw on my personal experience in Trinidad (again .. sorry) and use energy as an example . . In the 70s TT was floating in oil and natural gas and there was an OPEC embargo in 1972 that skyrocketed the price of oil to $34 a barrel. There was no shortage of funds and energy for industrial projects, and electricity was cheap and widely available. The main hindrance to development was a dire shortage of skilled labour. Because of that shortage, the infrastructure which industry relies on and often taken for granted in develeped countries .. roads, telephones, water, waste disposal, public services etc. were poorly developed and unreliable. Electricity and energy alone are necessary but not sufficient for proper development.
I suspect that African countries will have a much harder time developing notwithstanding the availability of cheap electricity from your 'project'. One major problem comes to mind and that is that many multinational corporations are hesitant to invest heavily in countries with political turmoil. Several African govts have expelled foreign firms and seized their assets .. I think Tanzania and Uganda had done that in the late 70s and they lived to regret it. Others did similarily stupid things in the 80s & 90s to scare away foreign investment.
I can think of a few solutions to the problem of poverty in Africa but they are somewhat controversial.
Originally posted by Rajk999Great points everyone and one of the key things that jumps out at me is what Rajk999 said - unfortunately, electricity is not the only thing an underdeveloped country needs.
SWV, lets assume that its possible and all your requirements (1/12 GNP, democracy, rant rant, etc ..) fall into place for successful implementation of the electricity project, the question then becomes 'how long after the project will your initial stated initial goals be realised?'.
If I were to draw on my personal experience in Trinidad (again .. sorry) ...[text shortened]... of a few solutions to the problem of poverty in Africa but they are somewhat controversial.
If I could broaden it a little bit, the public government or sector has a spotty record at best about ALLOCATION OF RESOURCES. They are not very efficient at it. An extreme example would be a centrally planned or command economy (as practiced by the former Soviet Union, China before the shift to free markets, also North Korea and Cuba) where with 5 year plans, resources were allocated and the results have not been very good. An interesting thing to note here, countries that practiced socialism (less extreme form of command economy) like France, Italy etc. have also shifted towards a more free market enterprise. True there are advantages and good theoretical ideas which in practicality are not very successful due to other dynamic variables like human nature etc.
Therefore, I believe that investment is good but channeled through market forces allowing entrepreneurs or managers at the business unit level or "level of uncertainty" to make the decisions on what they need which is why microcredit or microfinance comes to the forefront. Another important point I think is the change that the world desires from third world countries needs to be organic - done internally by its own people - sure industrialized nations can help but for practical/logistical purposes, we can not solve everything - one, because we should not need to and second, we might not have the best knowledge on how to change things which are best left to local experts. Because "local experts" could be corrupt etc, microcredit goes straight to the recipient - makes sense to me. I do not know as much about it as I would like to but from what I hear and know, makes tremendous sense.
Also, other things that I feel all of you all have touched on and I wanted to add some more points are:
1. a functioning, transparent democracy - unfortunately easier said than done - i also have a controversial take on this, not all societies or peoples are ready for this because of reasons i mention below. there are some countries who have customs and traditions that are centuries old who think that system works best for them. Therefore, they and only they can figure out what works for them - a hybrid between democracy/local traditions - whatever it may be, they need to get to it themselves to create an environment where everyone can benefit.
2. education - you need a sophisticated consituent who can make rational decisions so that others can not pull wool over their eyes.
3. basic necessities - like food, clean water and shelter - only then can anyone be expected to make rational sound decisions. Because if those things are not given, it is to be expected people will behave irrationally.
I hope I have not rambled too much here and some of my thoughts may be a little mixed up. I hope it makes sense - it does in my head =)!
Originally posted by Rajk999Addressing economic underdevelopment in Africa without reference to European colonialism and imperialism is comparable to accounting for Ronald Reagan's or George W. Bush's budget deficits without reference to military spending. You ask the impossible.
I know you would. Can you add anything of substance to the discussion .. eg practical and workable solutions to poverty in Africa without placing blame on the rest of the world and historical imperialist exploitation?
Originally posted by WulebgrRe-read my post. I said 'without placing blame' .. BLAME ! Understand ? You must understand and address historical matters in any problem solving exercise . Many of these threads degenerate into a 'who is to blame discussion' .. the British or the French or the Dutch or the US, without dealing the core problems.
Addressing economic underdevelopment in Africa without reference to European colonialism and imperialism is comparable to accounting for Ronald Reagan's or George W. Bush's budget deficits without reference to military spending. You ask the impossible.
Originally posted by Rajk999If I say the cause of the economic problems stem from colonial underdevelopment, and that such underdevelopment is ongoing--not merely a historical pattern, will you accuse me of "placing blame"?
Re-read my post. I said 'without placing blame' .. BLAME ! Understand ? You must understand and address historical matters in any problem solving exercise . Many of these threads degenerate into a 'who is to blame discussion' .. the British or the French or the Dutch or the US, without dealing the core problems.
Originally posted by WulebgrNo .. in that case I will strongly disagree with you, that the cause TODAY is anything but internal problems and stupidity.
If I say the cause of the economic problems stem from colonial underdevelopment, and that such underdevelopment is ongoing--not merely a historical pattern, will you accuse me of "placing blame"?
Originally posted by Rajk999Seeing how you are only an accountant, you would do well (i.e. make less an ass of yourself) if you walked with a bigger dose of humility in these matters. Palynka, like myself, is probably just too bored/disgusted with your level of discussion to devote any effort. By the way, if you actually have some reasonable solutions to developing Sub-Saharan Africa, I too would love to hear them.
I know you would. Can you add anything of substance to the discussion .. eg practical and workable solutions to poverty in Africa without placing blame on the rest of the world and historical imperialist exploitation?
Originally posted by Rajk999Internal problems are inseparable from external, especially when the outside has worked so hard for so long to assure internal chaos. That's almost the definition of colonialism, so your hypothetical disagreement disproves itself.
No .. in that case I will strongly disagree with you, that the cause TODAY is anything but internal problems and stupidity.
America prospers with stupid leadership, surely African nations can do the same.