Sunday, 6 May 2012

Viva La Socialism

It wasn't much of a surprise that the French Presidency has changed hands and it now Francois Hollande cartwheeling around The Elysee Palace in place of Sarkozy who conceded defeat just 20 minutes after the polling closed.
Bye bye Sarkozy, don't let the doorknob hit the back of your head on your way out.
Hollande has said all along that austerity is not the only way to get France out of the Economic mess which has not gone down well in Germany with Angela Merkal and won't sit very well with our own Conservative Government who have long argued that austerity is the only way.
"I'm sure in a lot of European countries there is relief, hope that at last austerity is no longer inevitable" said Hollande at his victory speech which must be a boost for left wing parties everywhere.
Hopefully, we will now see a wave of right wing Governments removed and a sea of Socialist Parties being elected into power.
This could be the start of a momentous time where right wing policies and unregulated Capitalism have their chips cashed in and fairness, equality and a more equal redistribution of wealth is ushered in.
The trickle down theory has failed, there are far more poor people than rich ones in every developed country so anyone advocating policies that are in the clear self-interest of this majority, raising wages, reducing prices, create jobs, will be voted into office.
Voters are coming to the conclusion that since most people in the world are either poor or live below the average income in their countries, it is in their own interests to vote for politicians promising to redistribute wealth from the top of the economy down to them.
South American countries such as Venezuela, Bolivia, Uruguay, Chile and Ecuador reached this conclusion a while ago and turned to the left and now one of the great powers in Europe has gone the same way.
Maybe, just possibly, the penny has dropped and we will see modern Socialism replace the tired and corrupt ways of the right.
A lot will depend on how Hollande's policies fare but Karl would be proud tonight.


Nog said...

-Elections now are all about who gets "caught holding the bag" of the recession. "The Right" lost in France just like "The Left" lost in Britain a few years ago. Now that there's still a recession, the Conservatives are the one with the bag in Britain.

-The South American countries that you list are mostly watered down petro-autocracies. And petro-states are never stable and successful in the long run. I've always thought socialists whose very existence depends on the American political system to be a bit peculiar.


Lucy said...

Socialism is all about using the Capital raised (or the American system as you call it) to spread around the wealth Nog so nothing peculiar about it, it is what it is and has always been. Maybe you are confusing Socialism with Communism.
I do agree that oil money is behind the South American Socialism and that will eventually run dry but by then there will be tens of millions lifted out of poverty, able to read and write and even still alive so even if it ended today, it will have been a good thing.

Nog said...

"by then there will be tens of millions lifted out of poverty"

There's no lifting out of poverty with petrodollars, there's more like heaving into the air. What goes up must come down. Once the oil industry goes away, there will be nothing but poverty. Replacement industries will not magically appear.

Petrostates are doubly annoying to us. On the one hand, the windfall of natural resources creates the illusion that incompetent despots like Putin and Chavez are actually bettering the condition of their respective peoples and that their nations have strength. Then, when they inevitably run out, they'll blame their ruin and the loss of their illusory wealth and influence on America.

If I could write a letter to folks in Venezuela or Russia in 2060, it would read something like: "it's not my fault you're so dang poor now, you spent the past half-century ignoring the fact that you have no economy."

If I were the leader of a petrostate, I would strongly consider banning the development of oil & gas simply because no petrostate has successfully broken its dependency on oil and gas for government spending. As Charles I and Louis XVI might have attested, taxation is not a custom to which peoples become easily acclimated.


Anonymous said...


Poverty is relative, so maybe millions will be better off, maybe not. Consider the USA:

The USA taxed and redistributed TRILLIONS of dollars since 1967. I've read $5 TRILLION up to $11 TRILLION (some don’t want to count medicare and social security - even though social security stopped being a pension in 1968).

To create some context for how much money the USA has redistributed: Australia just reached a trillion dollar economy in 2008, Canada in 2005, the UK in 1990.

Yet, today we have more complaints than ever from the left. It wasn’t enough. They even say things are worse! Yes, Lucy, you say it daily.

If transferring $11 TRILLION did not help at all – zero improvement per the left – then why would $22 trillion help?

Obviously transferring wealth is not the solution. Call it whatever you want socialism, communism, whatever.


Cheezy said...

Q - is that argument for real?

Anonymous said...


11 trillion hasn't helped anything. we had 25% in poverty in 1967, and 24% today.

you tell me how much it helped.


Cheezy said...

So people paying tax been the only thing happening with the US economy in the past 45 years, Q?

No energy crisis? globalisation? No supply-side economics? No jobs disappearing overseas? No huge arms race? No wars? No subsidies for protected industries? No computer revolution? No housing bubble?

You've taken just one aspect of a phenomenon (out of a choice of thousands) and applied it to a result that you (rightly) say is imperfect, and then concluded that the phenomenon in question 'hasn't helped'. That's why I asked if your argument was for real.

Also, is that $11 trillion a large number in 45 years?

Is it a larger figure (adjusted for GDPs) than other countries, possibly countries with much lower poverty levels, have taken in tax over the past 45 years?

You need to address questions like this before you make assertions like '11 trillion hasn't helped anything'.

You also need to make an informed hypothesis about the sort of nirvana you would have anticipated to have descended upon the USA if that number was... I dunno... $10 trillion? 5? Nothing?

Cheezy said...

Lucy: As for Hollande, I reckon that if he follows a dogmatic, unblinking economic policy because of a blind faith that he may have in an ideology (whether it's an ideology of the left or the right), then he'll probably fail and posterity won't view him kindly.

That's what the governments of Sarkozy/Merkel/Cameron are currently doing... all of their monetary policies seem heavily influenced by Herbert Hoover's response to the Great Depression (rather than by looking around them and seeing what's happening)...

Whereas if he follows Iceland's lead in some of what they've done since their own bubble burst - i.e. pragmatically trying to solve their problems, including making the idiots who were responsible for the financial mess actually accountable for it - then he might make a reasonable fist of it.

Anonymous said...


first, why do i have to use a valid hypothesis? does lucy? i know the 4 elements of a valid hypothesis statement and i'm leading an effort to coordinate the experimentation at my employer - a fortune 200 company.

second, i don't NEED to make a hypothesis because the left in america made the hypothesis for the last 40 years (like lucy does regularly now) that redistributing wealth would reduce poverty and welfare. yet poverty has not reduced as a percentage and it takes a greater percentage of our tax income to care for people in poverty.

i'll stand by my rather vague earlier comments.

if you or lucy get more specific i will respond in kind.

$11 trillion is more than australia's total GDP for the last 10 years.


Cheezy said...

"i know the 4 elements of a valid hypothesis statement and i'm leading an effort to coordinate the experimentation at my employer - a fortune 200 company."

That's excellent, so you can see how far from any kind of 'control' your '$11 trillion' comment was then.

"the left in america made the hypothesis for the last 40 years (like lucy does regularly now) that redistributing wealth would reduce poverty and welfare"

Did 'the left' say that poverty would reduce in absolute terms over time? Or did they suggest that tax rises would reduce the amount of poverty in comparison to that which would result without said tax rises?.

If the former, then they would have made a same mistake as you, neglecting the millions of inputs & outputs & other complicating factors (internal and external) in an economy.

If they said the latter, then they at least have a debateable case (which I wouldn't necessarily agree with by the way, but I recognise the validity of the proposition.

"$11 trillion is more than australia's total GDP for the last 10 years."

Pick a real country and you might impress me! (right Dave?) ;)

Again, there's no context here.

Cheezy said...

By the way, I'm speaking as someone who is generally in favour of having tax rates (especially business tax rates) as low as is possible without destroying the capacity of government to pay for the necessaries. Obviously there'll be disagreement among different people about what these 'necessaries' are, and that's natural, but my own instinct is keep them as low as we can. A government that runs a year-on-year-on-year surplus is a nasty beast.

Anonymous said...

I’m not accustomed to this type of experimentation, the wording is crucial and this is too macro, but what the heck...

my hypothesis:
- statement: redistributing wealth thru gov programs will not reduce the % of people needing government assistance to rise out of poverty conditions
- independent variable: $11 trillion spent through numerous gov agencies to educate, house, feed, heal, transport, and employ
- dependent variable: % of americans earning less than poverty line income

test group 1 = people with drug dependency as reason for aid request will not decline as % of population
test group 2 = people with debilitating health issue as reason for aid request will not decline as % of population
test group 3 = people with inadequate skills as reason for aid request will not decline as % of population

A better hypothesis might be directed at identifying the % of people that actually get out of poverty due to gov aide, but that requires a lot of data gathering (for data that may not exist)

PS – I’m coming at this as someone willing to pay taxes to support people that really need assistance, and for people that really want to better their lives by “enabling themselves”


Cheezy said...

There's no actual data there so I'm not sure that actually shows anything.

And in terms of 'independent variables', my point is that a national economy will have a countless number of these - it's not just the money that gets spent, it's everything else you can think of that affects the economy.

Out of interest, seeing we're looking at the two indicators of tax revenue and the poverty level, it might be instructive to look at some data elsewhere, to see what that might tell us.

As of this year, the highest % of tax revenue as compared to GDP is Kiribati at 69%, and the lowest is the UAE at 1.4%... The USA has a reasonably low figure of 26.9%. Look at the list and you won't see too many first world countries below the US, And a lot of the ones above them in the list, who take a larger percentage in tax, don't have the poverty problems that the US currently does.

Does this mean that the US should automatically up their tax take, in order to tackle their poverty problems? Not necessarily, cos it's nowhere near as simple as that (which is my main point).

But it does show that taking a larger % of tax from the citizenry than the US does is not necessarily incompatible with having low poverty rates.

Anonymous said...


who says 26% is reasonable?


Cheezy said...

I didn't say 'reasonable'. I said 'reasonably low'. In comparison to other first world countries.

Anonymous said...


i don't see a difference?


Cheezy said...

There's a very clear difference.

In this context the word 'reasonable' would have indicated a subjective opinion about the correct level that a nation's tax-revenue (as a % of GDP) should be. I wasn't venturing an opinion about that.

What I was doing was observing that, notwithstanding anyone's opinion about this % number being 'too high' or 'too low' or whatever, it is 'reasonably low' in comparison to most other first world countries, many of whom do not have poverty levels as high as the USA's... (the relationship between tax revenue and poverty being the subject under discussion).

Perhaps I should have said 'relatively low' instead. OK then, it's relatively low.