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Thread: This is what the Brexiteers feared. People losing faith in leaving Europe

  1. #91
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    Quote Originally Posted by grumzed View Post
    Don't remember anything about Rimmels etc. They were getting big in the hotel and insurance businesses. I worked for ITT Semiconductors (formerly STC) which was locally run and OK as long as it was in profit. ITT were allegedly involved with Pinochet's coup in Chile. They had financial interests in telecoms there and had no scruples about interfering in the politics. There are other examples too.
    Happy days. As I recall the ITT also picked up a few dancing schools as well. Harry Geneen had the reputation of being a master of the financial dark arts, but he always struck me as the sort of bloke who did not know when to stop. That, plus an end to cheap money and an unpronounceable name, more or less put the kibosh on ITT.

    I dare say that ITT greased a few palms, but Pinochet had the support of the Chilean army, airforce and navy and didn't need the help of a home counties accountant with fantasies beyond his SA100.

    Patman is right. Any nation be it ever so poor, backward and badly run, can nationalise or steal the assets of any international company, regardless of how big or slickly run it is.

    This idea that the world will one day be run by three or four giant cartels is all good stuff if you are engaged in scribbling basic, albeit nigh on unreadable, financial primers for the brothers and sisters, but it does not really answer in the real world.

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    Personally, I don't like conglomerate companies. They are often run by accountants who know the price of everything but the value of nothing. It suits the current financial world where people buy shares in a company based on some trite forecast of profitability without knowing anything about what the company does. This disconnect between the "owners" (shareholders) and the company's business leads to many problems both for those shareholders (who can be easily misled) and the company (who often have their capitalisation dependent on people who are only vaguely aware of what the aims or problems are within that company). It works fine when a company is persistently growing but is a disaster in waiting when things are not well. Problems which occur are not easily overcome when there is a downturn and shareholders flee removing company capitalisation when it is most needed. The whole setup leads to trite company reporting and very overpaid executives who also do not know how to run the company when things go wrong, which is usually some "bubble" based on over optimistic forecasting. I will add that these issues are not restricted to conglomerates and also that not all such diverse-interest companies are so badly run, but it is not a good trend.

  3. #93
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    Quote Originally Posted by grumzed View Post
    Personally, I don't like conglomerate companies. They are often run by accountants who know the price of everything but the value of nothing. It suits the current financial world where people buy shares in a company based on some trite forecast of profitability without knowing anything about what the company does. This disconnect between the "owners" (shareholders) and the company's business leads to many problems both for those shareholders (who can be easily misled) and the company (who often have their capitalisation dependent on people who are only vaguely aware of what the aims or problems are within that company). It works fine when a company is persistently growing but is a disaster in waiting when things are not well. Problems which occur are not easily overcome when there is a downturn and shareholders flee removing company capitalisation when it is most needed. The whole setup leads to trite company reporting and very overpaid executives who also do not know how to run the company when things go wrong, which is usually some "bubble" based on over optimistic forecasting. I will add that these issues are not restricted to conglomerates and also that not all such diverse-interest companies are so badly run, but it is not a good trend.
    Ah, a fellow investor in Dixon Carphones I see.

    As the great Robert Heinlein said, it may be a crooked game, but if you don't play you can't win. Of course, some games are more crooked than others....

  4. #94
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    Quote Originally Posted by grumzed View Post
    Your points are well founded, Expounder. However, I would change your quote at the bottom as it implies that Advocates of Capitalism believe this to be true. I expect some do, but it would be more truthful to mention that it is a quote from Bertrand Russell who was defininitely not a capitalist but thought that they should be shown in this light.

    Marx was right that uncontrtolled capitalism will lead to greater wealth imbalances between the haves and the have nots. That this is a situation that needs government control there is no doubt. The rise in organised labour is one consequence of this and it could be said this is also a development of a free market. In my opinion it is getting this balance right that is the hardest thing to achieve but the most essential. The Marxist inspired revolutionaries' aims were over the top and probably, ultimately, doomed to failure because of the dismal lack of incentives and the suppression of free will within the populaces. I spent some time in the USSR in the early 70's and it was a bit dismal and technologically backward (the people, like people in most places, were very nice though). The state that has now resulted is, sadly, now a corrupt one.

    On the other hand Marx would agree that what is needed is a "super-abundance of goods" then all systems converge .

    The abundance of goods would come about as result of workers being unable to buy them because of the unfair distribution of wealth ending in the downward spiral.
    .

    "Sismondi’s chief work, New Principles of Political Economy, was published in 1819. In this book he maintained that general crises were due to excess capacity, which in turn was due to the separation of the exchange values of commodities from the needs and wants of society. According to Sismondi overproduction of commodities did not arise from the general over-fulfillment of human needs but from the mal-distribution of income and the poverty of the masses, resulting in insufficient demand in the society. In short, the working class did not receive enough in wages to buy back the goods that they produced, which is always the case "under capitalism.


    -consumptionist” explanation of crisis, which, in broad terms, associates the difficulties of capitalism, especially in crisis conditions, with a lack of demand in the economy. According to this theory, capitalism has an inbuilt tendency to produce far more than can be absorbed by consumption. Modern “under-consumption” theory is closely identified with John Maynard Keynes, who believed that the problem of the lack of “effective” demand could be resolved by the intervention of the state through deficit financing.

    http://www.marxist.com/underconsumption-and-marxist-theory-of-crisis.htm


    In general, Marx rejected any idea that the working class (or the unions) ‘cause’ the crisis by ‘excessive wage demands’. He would recognise that under conditions of overheating and ‘full employment’, real wages generally increase, but the rate of surplus-value can simultaneously increase too. It can, however, not increase in the same proportion as the organic composition of capital. Hence the decline of the average rate of profit. Hence the crisis.
    But if real wages do not increase in times of boom, and as they unavoidably decrease in times of depression, the average level of wages during the cycle in its totality would be such as to cause even larger overproduction of wage goods, which would induce an even stronger collapse of investment at the height of the cycle, and in no way help to avoid the crisis.

    http://www.ernestmandel.org/en/works...karlmarx/9.htm



    Last edited by Expounder; 20-11-2017 at 02:40 PM.
    Advocates of capitalism believe : "The fortunate must not be restrained in the exercise of tyranny over the unfortunate"

  5. #95
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    Quote Originally Posted by Expounder View Post
    The abundance of goods would come about as result of workers being unable to buy then because of the unfair distribution of wealth.

    "Sismondi’s chief work, New Principles of Political Economy, was published in 1819. In this book he maintained that general crises were due to excess capacity, which in turn was due to the separation of the exchange values of commodities from the needs and wants of society. According to Sismondi overproduction of commodities did not arise from the general over-fulfillment of human needs but from the mal-distribution of income and the poverty of the masses, resulting in insufficient demand in the society. In short, the working class did not receive enough in wages to buy back the goods that they produced, which is always the case "under capitalism.


    -consumptionist” explanation of crisis, which, in broad terms, associates the difficulties of capitalism, especially in crisis conditions, with a lack of demand in the economy. According to this theory, capitalism has an inbuilt tendency to produce far more than can be absorbed by consumption. Modern “under-consumption” theory is closely identified with John Maynard Keynes, who believed that the problem of the lack of “effective” demand could be resolved by the intervention of the state through deficit financing.

    http://www.marxist.com/underconsumpt...-of-crisis.htm
    If over capacity makes us poor then the only solution is to go back to hunting and gathering where starvation is the norm and there will be no excess of anything to feed the old, sick and non productive.

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    Quote Originally Posted by Borchester View Post
    If over capacity makes us poor then the only solution is to go back to hunting and gathering where starvation is the norm and there will be no excess of anything to feed the old, sick and non productive.
    You are a laugh Borch.'... there's nothing for the world population to hunt. Only you could come up with an unintelligent impossible solution even if it were possible to happen.
    Advocates of capitalism believe : "The fortunate must not be restrained in the exercise of tyranny over the unfortunate"

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    Quote Originally Posted by Borchester View Post
    Happy days. As I recall the ITT also picked up a few dancing schools as well. Harry Geneen had the reputation of being a master of the financial dark arts, but he always struck me as the sort of bloke who did not know when to stop. That, plus an end to cheap money and an unpronounceable name, more or less put the kibosh on ITT.

    I dare say that ITT greased a few palms, but Pinochet had the support of the Chilean army, airforce and navy and didn't need the help of a home counties accountant with fantasies beyond his SA100
    Pinochet ably assisted by the CIA in an coup and murdered and tortured thousands, whose bodies never recovered overseen and supported by US capital who arranged the overthrow and murder of a democratically elected president Allende, seen as a threat to their interests............He had only just been elected....... I judge a person with whom he/she associates and you seem to pick the vilest.
    Advocates of capitalism believe : "The fortunate must not be restrained in the exercise of tyranny over the unfortunate"

  8. #98
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    Quote Originally Posted by Expounder View Post
    The abundance of goods would come about as result of workers being unable to buy them because of the unfair distribution of wealth ending in the downward cycle.
    .

    "Sismondi’s chief work, New Principles of Political Economy, was published in 1819. In this book he maintained that general crises were due to excess capacity, which in turn was due to the separation of the exchange values of commodities from the needs and wants of society. According to Sismondi overproduction of commodities did not arise from the general over-fulfillment of human needs but from the mal-distribution of income and the poverty of the masses, resulting in insufficient demand in the society. In short, the working class did not receive enough in wages to buy back the goods that they produced, which is always the case "under capitalism.


    -consumptionist” explanation of crisis, which, in broad terms, associates the difficulties of capitalism, especially in crisis conditions, with a lack of demand in the economy. According to this theory, capitalism has an inbuilt tendency to produce far more than can be absorbed by consumption. Modern “under-consumption” theory is closely identified with John Maynard Keynes, who believed that the problem of the lack of “effective” demand could be resolved by the intervention of the state through deficit financing.

    http://www.marxist.com/underconsumption-and-marxist-theory-of-crisis.htm


    In general, Marx rejected any idea that the working class (or the unions) ‘cause’ the crisis by ‘excessive wage demands’. He would recognise that under conditions of overheating and ‘full employment’, real wages generally increase, but the rate of surplus-value can simultaneously increase too. It can, however, not increase in the same proportion as the organic composition of capital. Hence the decline of the average rate of profit. Hence the crisis.
    But if real wages do not increase in times of boom, and as they unavoidably decrease in times of depression, the average level of wages during the cycle in its totality would be such as to cause even larger overproduction of wage goods, which would induce an even stronger collapse of investment at the height of the cycle, and in no way help to avoid the crisis.

    http://www.ernestmandel.org/en/works...karlmarx/9.htm



    You make many points based on extrapolations of Marx's work. My statement about super-abundance of goods is a comment of Marx/Engels principles that capitalism and marxism would converge if there were a "super-abundance" of goods on the basis that they would be available to all at no cost. It goes along with ideas of common ownership. For Sci-fi fans this is similar to the "Star Trek" view of a future earth. It is probably not a realistic one as there will always be something that can be produced at a higher cost than anything that had gone before, whatever the technology available.

    I have never read any work by Sismondi (a contemporary of Marx) though can see the association of some of the ideas with those of Keynes. Personally, I disagree with Keynes approach except in dire circumstance as it needs mass support from the general populace (in terms of putting in more support and effort without initial rewards) to be effective. I don't think that position has been reached yet though it may occur. Keysian ideas of simply borrowing is not a sufficient solution and can make matters worse.

    Where I agree is that the systems in place do not mitigate against the increasing differences between the rich and poor where half the world's wealth is owned by 1% of the population and the inequity is growing. My personal view is that there needs to be more international efforts as I don't think artificial controls of markets can work without such measures. Isolationism is not an acceptable solution either for many other reasons. Japan seems bent on following a Keynsian course and it will be interesting to see the ultimate results - they have a much more disciplined society that almost anywhere else in the world.

    This is a big subject and rather too much to debate on a forum. Marx did not really foresee the changes in society or the effects of technology and communications. Organised labour has resulted in some rebalancing the powers of sections of society but times are not the same now as they were in his day. There is more of a meritocracy now than in Marx's time - at least in some of the world - but, as we have seen, wealth can be aquired by making use of the lack of international cooperation in controlling this. There needs to be a balance between meritocratic rewards and incentives and general fairness, which is frequently missing. Getting this right is clearly not easy.

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    Expounder (21-11-2017)

  10. #99
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    I agree, the number of home factors and international involved when trying to come to a decision of the way the present situation should handled is not simple. However the present government has had 7 years to improve the situation and it seems that Britain 's debt has gone deeper into a never ending downward spiral with the continued policy of austerity which has failed. I believe a choice in change of direction must be made. As you say there comes a time when the Keynesian method could be implemented I believe this is the time to do so. However, it's the way the money injected is used that will decide it's success. Direct investment into the the economy, wage increases would kick start much of industry, also major funding of and investment in our public services would create jobs, plus investment in needed large projects would make the difference.

    This my opinion, in the face of the utter failure of this government's austerity policies and is the way to go. The unknown factor is brexit, and the confusion in the the government its self of how to handle it. A lot depends on the hard or soft brexit, a hard brexit would be a walk into the unknown based on unfounded or unexplained expectations of successful international trading with phantom partners.


    PS: apologies meant to attach this to Gs post.
    Advocates of capitalism believe : "The fortunate must not be restrained in the exercise of tyranny over the unfortunate"

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    grumzed (21-11-2017)

  12. #100
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    I do not disagree with your overall logic, Expounder, but think you are being too hasty and I also do not trust a Corbyn - Mcdonnell led government to implement Keynsian economics to simply "fix" the economy. They have what they see as "higher" goals that I do not agree with. I do not see that the Tories have driven the UK into a downward spiral of increasing debt; the debt rose sharply from 2007 to 2010 under Gordon Brown (admittedly not all his fault) and has then substantially levelled off under a Tory government. We have not recovered from the banking crisis. I agree there has to be spending now but definitely not at the levels proposed by Labour. There clearly needs to be spending on health and housing and that this needs to be funded by borrowing is not in doubt. Brexit and its likely cost is a huge problem that is not soluble in any short time.

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