capital controls

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capital controls

Post by richard in norway on Tue Oct 25, 2011 8:51 pm

One of the big problems that any govt has following the demands of its people is that money can vote with its feet(and you said money wasn't a person) sometimes it appears to be organized to take down otherwise popular govts but that's just my suspicious nature. But the threat of money flooding out of the country is often used when arguing against policies which might benefit the 99, so I would say that the freedom of money to move is a direct threat to democracy. The other thing that happens with free roaming money is that it all piles into one country blows up Huge asset bubbles suckers the locals into borrowing to get on the ride up and then it(the free roaming money) sells up and leaves just before the bubble bursts leaving the victim country to clear up the mess. We might be seeing this in Brazil, although they have been doing all they can to limit the amount of hot money coming in. But now the rumour is that Brazil is yesterday's bubble and its time to find a new target. I'm not suggesting that it is done deliberately. Shit just happens

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Milton Friedman and Capitalism

Post by RayArrowood on Tue Oct 25, 2011 10:32 pm

Info from Wikipedia

Friedman was an economic advisor to conservative President Ronald Reagan. Over time, many governments practiced his restatement of a political philosophy that extolled the virtues of a free market economic system with little intervention by government. As a leader of the Chicago school of economics, based at the University of Chicago, he had great influence in determining the research agenda of the entire profession.

Friedman also argued for the cessation of government intervention in currency markets, thereby spawning an enormous literature on the subject, as well as promoting the practice of freely floating exchange rates.

Friedman believed that if the money supply was to be centrally controlled (as by the Federal Reserve) that the preferable way to do it would be with a mechanical system that would keep the quantity of money increasing at a steady rate. However, instead of government involvement at all, he was open to a "real," non-government, gold standard where money is produced by the private market: "A real gold standard is thoroughly consistent with [classical] liberal principles and I, for one, am entirely in favor of measures promoting its development." He did however add this caveat, "Let me emphasize that this note is not a plea for a return to a gold standard.... I regard a return to a gold standard as neither desirable nor feasible—with the one exception that it might become feasible if the doomsday predictions of hyperinflation under our present system should prove correct."[36]

Friedman was supportive of the state provision of some public goods that private businesses are not considered as being able to provide. However, he argued that many of the services performed by government could be performed better by the private sector.

Friedman argued for stronger basic legal (constitutional) protection of economic rights and freedoms in order to further promote industrial-commercial growth and prosperity and buttress democracy and freedom and the rule of law generally in society.[47]

During the financial crisis of 2007–2010, several Keynesian economists such as James Galbraith and Joseph Stiglitz blamed the free market philosophy of Friedman and the Chicago school for the economic turmoil.[62] In response to these criticisms, University of Chicago Magazine noted that Chicago's Rajan, Thaler, and Vishney warned the US government that regulations are needed and, “The Chicago School never said we wanted blind deregulation...

After Friedman's death in 2007, Keynesian Nobel laureate Paul Krugman, praised Friedman as a "great economist and a great man," but criticized him by writing that "he slipped all too easily into claiming both that markets always work and that only markets work. It's extremely hard to find cases in which Friedman acknowledged the possibility that markets could go wrong, or that government intervention could serve a useful purpose."[64]

In her book The Shock Doctrine: The Rise of Disaster Capitalism, journalist and author Naomi Klein critiqued Friedman's ideology and the principles that guided the economic restructuring that followed the military coups in countries such as Chile and Indonesia, drawing analogies between the way that Friedman proposed using the social "shock" of the coups to create an economic "blank slate" with Ewen Cameron's controversial medical experiments that used electroshock therapy to create a mental "blank slate" in patients with mental disorders.[68] Based on the extent to which the application of neoliberal policies has contributed to income disparities and inequality,[69] both Klein and Noam Chomsky have suggested that the primary role of neoliberalism was as an ideological cover for capital accumulation by multinational corporations.[70] Chilean economist Orlando Letelier asserted that Pinochet's dictatorship resorted to repression because of popular opposition to Chicago School policies in Chile.[71]

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Re: capital controls

Post by richard in norway on Wed Oct 26, 2011 6:47 am

Ray I know most of that, I have read "the shock doctrine" its a good book. But what do you think about capital controls?
flower

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Capital controls and natural resources

Post by RayArrowood on Wed Oct 26, 2011 12:58 pm

Well, I think capital controls are where we need to start Richard, but I believe we can eventually get rid of money altogether.

The earth and it's resources belong to everyone, so it's really a matter of equitable distribution of resources rather than money. We have made money a resource rather than a tool to value resources.

To solve this problem, we really have to consider what the appropriate role of government should be to achieve equitable and sustainable resource use.

I have very few specific suggestions on capital controls, beyond putting money back on the gold standard. I am a generalist and try to look at the bigger picture rather than get bogged down in the details. I trust that the details of change will be worked out by group consensus some time in the future, after everyone understands the problem.

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