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The Connection between Economy and Ecology

Updated on June 17, 2011

Grand Prairie

Photo Credit: Wikipedia
Photo Credit: Wikipedia

Many people believe that government bailouts of ailing businesses are necessary, because these businesses employ most people, and without the bailouts all would be jobless, homeless and might even go hungry. They suggest that the bailouts are a necessary evil in order to provide for the greater good.

Many of the same people who support the bailouts for economic reasons are concerned about ecological issues. They see that our forests are being denuded, that wildlife is dying out, that entire species are going extinct. They call for government intervention for the sake of ecology.

When I tell people that bailouts in the economic sector are fueling the ecological disasters we are experiencing, they accuse me of being intellectually dishonest. Many assume that all I want is lower taxes and higher interest rates, and I don't really care about the environment. It's not true. Economy and ecology are intertwined. I care about both.

How does the economy affect ecological issues? The higher the level of industrialization, the more quickly natural resources are depleted. The fewer natural resources you have per capita, the more likely it is that a country will turn to socialism. I also think that during the twentieth century much of America's industrialization was subsidized by the government.

I'm going to give you my own historical economic background, so that you'll have some idea where I'm coming from. Then we'll talk about the big picture.

My parents and I emigrated to the United States in 1970, and my father spent a year at the University of Michigan in Ann Arbor getting a degree in aerospace engineering. He already had a Ph.D. in physics and had been a tenured physics professor at the Weizmann Institute in Israel for a number of years.

There were many reasons for this move, some of them directly to do with the political situation in Israel. But the change from physicist to engineer was an exercise in "downward mobility." My father gave up a higher position for a lower, for ideological reasons. He wanted to do something useful.

In 1971, my father accepted employment at LTV in Grand Prairie, Texas. LTV was founded by James Ling. The letters stood for Ling Temco Vought. Vought was the aerospace division. The company had seen better years, but now it was being mismanaged, and in time it would be dismantled and entirely destroyed. It was not a good time and place to be joining the aerospace engineering profession, but my father did not know it.

When we moved to the area, people told my father that though the plant was in Grand Prairie, he should choose a different place to live. Grand Prairie was where the shop workers lived. Engineers lived in Arlington or North Dallas.

My father was amused by this "snobbishness", as it seemed to him, and he did not accept the advice. For nearly  twenty years, from 1971 to 1991, my parents lived in Grand Prairie, Texas.

We lived in a rented house for a year, and then my parents bought a four bedroom, two bath home with a large corner lot just south of Highway 303 and west of Corn Valley Road. The neighborhood was fairly new, but we bought the house on an assumption, and it had been lived in before. The land in that area had been used for cotton fields until quite recently.

It was a working class neighborhood, we gathered, but it was a very nice place to live, and we had never lived anyplace better. This was the first home my parents ever owned. Before, they had either rented or lived in university housing. The house was valued at about $30,000, and today on Zillow they have it down as worth $108,000. I assume that most of the difference is accounted for by inflation.

All our neighbors were very nice people. They were friendly and helpful and always took very good care of their houses, their lawns and their cars. We realized that these people must have an income much lower than my father's, and yet they obviously spent a great deal more than we did.

They watered their lawns and fertilized them so as to keep them in peak condition. Sometimes they used so much fertilizer that they killed the small trees that were growing in their front yards. They washed and waxed and babied their cars, and then every few years they would trade in their old car for a new one. They would change the wall-to-wall carpeting in their houses and paint the walls and redecorate and buy new furniture. They went out to dinner frequently, and as I grew older, I got to babysit for some of them as they went off to dinner and a show.

Meanwhile, we watered the lawn a great deal less.We never fertilized. We watched over the little stick-like trees in our yard, and eventually they grew big enough to give shade. During the twenty years that my parents lived there, they never once changed the carpets or remodeled. My father painted the exterior every five years or so, keeping costs down to a minimum. We kept our old cars for years. We had a 1970 Ford Maverick that my parents bought new , in cash, back in Ann Arbor, that was still around twenty years later. Our neighbors were buying new cars every few years -- on credit!

During most of those years, we lived on a single income. My brother was born soon after we moved to the new house. My mother clipped coupons and prepared meals and found ways to make the dollar stretch without ever compromising the excellent meals she prepared. She used only the best ingredients, but she never bought them unless they were on sale. We did not eat out much. My parents hardly ever went out.

I don't want to give the impression that we didn't have fun. That's not the point at all. We had fun on a budget. We went swimming at the lake. We even went sailing.

Kool cigarettes ran a promotion in which they sold a small sailboat for a very reduced price. Even though neither of my parents smoked, my father got an empty carton from friends at work and he got that boat. The bottom was made of something very much like styrofoam and it seated only two people and a dog, but it was a real sailboat and we got a lot of mileage out of it.

My father enjoyed owning firearms and using them for target practice. In the U.S,, this could be done legally, whereas in Israel it would have been illegal. He loved to fly planes. In Israel, private airplanes were very expensive, due to regulation. In Grand Prairie, my father at one time even owned three airplanes. He bought them used. They were very old, but not quite old enough to be antiques. He defrayed the expenses of keeping them by renting them out to others and by giving flying lessons in his spare time.

LTV went through a series of hard times, and eventually my father was laid off, like many other people working at the plant. The difference between my father and all the other laid off workers was that while many of them had to scramble around and look for a new job right away, my father could afford to wait. He had what he called "breathing space." His breathing space was the savings my parents had accumulated over years of exercising thrift.

The issue is not one of shop worker versus engineers. All the other engineers were living in much more expensive neighborhoods than ours in more "socially upscale" municipalities. No matter what their education, walk of life or level of income, most of the Americans we knew were spending nearly all they earned on their day to day living. Because of this, they were tremendously dependent on their jobs.

What does any of this have to do with ecology, you might be asking yourself at this point. Well, just imagine that everyone in Grand Prairie and in Texas and in the United States as a whole exercised the same degree of thrift as my parents. No matter what their level of income, let's say everybody saved a big percentage of it. What would this have done to the economy?

We were living in a working class neighborhood on a fraction of our income. But no matter where they lived, most of the people at the time were living on most of their income, spending rather than saving.

If everyone lived as we did, then about half as many cars would be manufactured. A lot fewer and less elaborate houses would be built. Restaurants would close. Whole lines of clothing and makeup would go completely bankrupt. Entire industries would have to either close down or reduce their work force.

As a result, many would be unemployed, especially those in industrial manufacturing and the construction industry. They would all have to go back to the countryside to the family farms that they abandoned a generation earlier.

With all of these changes in effect, thanks to everyone following our thrifty example, there would be a lot fewer trees cut down, less fossil fuel burned, less ecological damage. Oh, and also, I think the population would be reduced, too, since part of my parents' thrifty way of life was not having more children than they could afford to feed.

But what makes me think that our neighbors would ever have followed our example? Well, to some extent, if not for government intervention they would have had to. They bought all major big ticket items on credit. They would get a new car before they ever finished paying for the old. The government encouraged these habits by the following interventions:

  • keeping interest unnaturally low.
  • administering special programs to allow everyone who had an income easy access to home ownership loans
  • encouraging spending by printing more money and inflating the currency.

If not for these government interventions, all of us would have had less money to spend, because the economy would have been more sluggish. There would have been fewer jobs. Those jobs would have paid less. We would all have had less money to play with. Even my family would have had to live in a more modest house, because the assumption that we took on was of a government sponsored home owner's loan.

"But you're just buying all of Keynes's arguments," a friend said to me recently, when I suggested that without government bailouts there would be less industry and hence less ecological damage.

"Am I?"

"Yes, you are, because Keynes said that without stimulus the economy would collapse, but really it's the stimulus that makes it collapse!"

The truth is that I've never read Keynes, and while I generally find myself on the opposite side of the political compass, I have a very foggy notion of what he actually said. "And you think Keynes was wrong about this?"

"Yes, he was wrong. Without government intervention, the economy would achieve a natural equilibrium between supply and demand. The situation would bring about optimal productivity."

Well, that sounds good. But what is "optimal productivity"? Is it the most productivity? Or is it the most sustainable productivity?

My friend said that the most sustainable productivity is also the most productivity -- in the long run. But how long is the long run? And why should any particular market participant care about maintaining productivity? Are we supposed to just assume that productivity is something we all want -- and the more, the better? What if "the long run" turns out to be more than a single human lifespan? What is to keep people who think productivity is the goal from considering only sustainability during their own lifespan and to hell with the rest?

According to the wikipedia article on Keynes: "In the 1930s, Keynes spearheaded a revolution in economic thinking, overturning the older ideas of neoclassical economics that held that free markets would automatically provide full employment as long as workers were flexible in their wage demands. Following the outbreak of World War II Keynes's ideas concerning economic policy were adopted by leading Western economies. During the 1950s and 1960s, the success of Keynesian economics was so resounding that almost all capitalist governments adopted its policy recommendations."

I can't help but be confused by this statement of what neoclassical economists held: that the free market would provide full employment? What is full employment, and why should providing it be a measure of whether an economic system is successful? And for that matter, what is the relationship between employment and productivity? Is there a conflict between those whose goal is "optimal productivity" and those whose goal is "full employment"?

Isn't the whole point of a free economy that each person gets to decide how to spend his time, money and resources without any pressure from the government? Isn't a natural economy characterized by periods of growth followed by periods of rest, when nothing much happens? Isn't it also natural for there to be times when more businesses close than are opened, and when people spend more time at home than outside the home?

Sometimes we cut down trees to clear land for agriculture and to build homes and even cities. Sometimes the process reverses itself, and houses that are abandoned fall into disrepair, and nature re-establishes itself, when man leaves the area. As long as every period of growth is followed by a similar period of rest, then we will never run out of land, and our way of life is sustainable.

But how will we feed our burgeoning population? Aren't we dependent on industrialization to feed ourselves? Well, everybody comes from someplace. Why assume they can't go back to that other place and that other way of life, if the need arises?

Also, from a historical perspective,  aren't periods of population growth naturally followed by reduction in population? Whether the reduction happens as a result of migration, lower birth rate, or a combination of those elements, isn't fluctuation in population size always tied to the amount of production that is going on in the marketplace? Isn't the birth rate really an integral part of the economy?

Lately, I have heard lamentations both from left wing and right wing Hubbers about the loss of productivity. The left winger said that we are still feeling the impact today of the regrettable loss of productivity that America suffered during the great depression. The right winger said that we are feeling the loss of the millions of unborn citizens who were never conceived because their mothers were on the pill. In both cases, I was quite shocked.

Do we have the right to expect any particular level of productivity or of reproduction from past or future generations? Isn't the whole point of the free market that we can do business with others -- but only if they want to do business with us?

In fascist or communist nations, it is considered the patriotic duty of women to produce future citizens and of workers to maintain maximal productivity. In a free country, there is no such duty. Children are born to people who want children. People work when they choose to and spend their money and their time as they see fit.

The whole point of a free economy is that whatever the economy is doing is okay, because that represents what each market participant chooses for himself!

I do believe that without government intervention the economy would be more stable than it currently is. However, in order for the economy to be free, stability can't be the goal. Productivity can't be the goal. Employment cannot be the goal. In a free economy, the only goal is freedom of choice!


(c) 2009 Aya Katz

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    • Aya Katz profile image
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      Aya Katz 3 years ago from The Ozarks

      Thanks, Nathalia27. I think we need to get the government out of the economy to have a free one, and that at the moment might require disciplining the government.

    • nathalia27 profile image

      Nancy 3 years ago

      I understand your point, Aya. However, we can only achieved free economy if people have strong discipline to ourselves.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Sufidreamer, Spartan women were strong, but they didn't put off child bearing until the middle aged years! Being strong doesn't mean you have to postpone motherhood. Ancient Judean women were strong, too! Read about Deborah and Ya'el.

      It isn't the middle eastern culture that requires women to be submissive. It's the Judeo-Christian-Muslim ethic as developed there that does that.

      I think in early America, women could be strong, too, and at the same time play the role of a mother. Laura Ingalls Wilder was a frontier shool teacher at fifteen and a mother at nineteen. She was a strong figure of a woman, with her own opinions and her own career.

      See my hub on misconceptions about teenaged mothers.

      https://hubpages.com/family/Misconceptions-About-T...

      I think the idea that we can go to the big city and have an exciting career is misleading. Most of the people, both men and women, who work in the city have jobs -- not careers. They play a very small part in a very large commercial machine. If they had stayed on the farm, they would have had the opportunity to make a lot more executive decisions.

    • Sufidreamer profile image

      Sufidreamer 8 years ago from Sparti, Greece

      My big sister would have loved to swap places - she had unplanned children when she was very young and it set back her teaching career many years. Still, my two nephews are now fine young men, so it worked out well!

      On your last point, most of them; Greece is slightly unique - although technically part of Europe, it is more Middle Eastern in many ways. Even 25 - 30 years ago, women were supposed to stay indoors, cook, have babies and be a good wife. Many other Middle Eastern countries are experiencing the same trend towards equality.

      This has changed - Spartan women are very strong! - and they are relishing their independence. There is a big generational battle going on in Greece, but it makes for interesting times!

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Sufidreamer, nice to know we agree on some things, though we may never agree on others. I always enjoy reading your comments in which I find that you make important points.

      Of course, I realize that not everyone wants children. I have friends who have chosen not to have children, too. I applaud the choice.

      I, myself, have always wanted children, though, and it took me years to make that dream come true. I still think most people do want children, and when their means allow, many people enjoy having large families.

      I kind of envy my friends, women my own age, who started having kids in their teen years. That wasn't the course I took, but there was social pressure on me to follow a career. I wonder how many of your rural neighbors really want a career in the big city!

    • Sufidreamer profile image

      Sufidreamer 8 years ago from Sparti, Greece

      Hi Aya - an interesting Hub, as always. Whilst we are aloways going to disagree on many things, it is nice to find areas where we do agree. Living within our means is one of them - it really is a win/win situation.

      I would like to pick up on your last comment:

      "But you do realize that socialism has something to do with it, don't you? They can't afford to have more than two children per couple. I think that if they could afford them, they would have them."

      Very wide of the mark - we don't live in abject poverty over here, you know. I have many friends and family with three or four children. I have none, and that decision is nothing to do with financial constraints, just personal choice. That is the danger of looking at averages - they hide many trends and sub-trends.

      The reason is that a generation of bright young women are making careers for themselves and starting families later in life. This trend is also happening in Turkey and the Gulf States, for example, as women carve out more freedom for themselves.

      In this rural area, the majority of women leave for Athens and work their way up the career ladder or become entrepreneurs, rather than leaving school and wandering straight into marriage. Not sure how you manage to work socialism into that - making sweeping generalisations about countries that you know little about does not help your otherwise interesting argument.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefenstech, yes, we shall see if the population is falling or rising. On EmpressFelicity's hubpage on Ecoskepticism, you mentioned that in "advanced" countries of Europe, the population is falling. But you do realize that socialism has something to do with it, don't you? They can't afford to have more than two children per couple. I think that if they could afford them, they would have them.

      And, no, I don't think people have children just to have someone support them in old age. It would take a lot of planning and foresight to have such a long range plan. I think for most people, having children is just a natural impulse with no premeditated motive.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      Well if we both live long enough, we'll see if the population is rising or falling. You might be interested to note that areas of the Great Plains are reverting to wilderness because of demographic changes.

      Also look at the restricted zone in the Ukraine. Rather than being a lifeless wasteland, it's one of the largest nature preserves with some of the most abundant flora and fauna in the world. So I don't believe that a habitat is every really destroyed.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Opinion Duck, I don't think we can ever expect to rely on the government to solve our problems. You are correct in your assessment that the government has made things worse by its actions. Therefore, it follows that inaction on the part of the government would have been better.

      I don't like your national aqueduct idea at all. You write: "This would share water from overly abundant areas of the country to those living in drought." I don't believe there is such a thing as "an overly abundant area", any more than I believe that a person could be too rich or too happy or too smart.

      I own my ten acres and my own well, with my own pump that draws the water into my pipes in my house. I would be very upset if a national aqueduct stole even one drop of my water. In this part of the country, water rights are still considered important property rights.

      The population problem, I think, is something we can agree on. To allow things to continue as they have will cause everyone to lose all their rights... and in the end, we may not even survive.

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      opinion duck 8 years ago

      It is not the bailout per se that is the problem. It is the ineptness and lack of direction by the government that makes a bad problem even worse.

      On the bailout, the government unloaded billions of shotguns. It didn't work and it won't work. Now the government is trying to spend trillions more on the health arena.

      The government is also the biggest offender in the ecology area. They use and misuse vital resources and then they blame the private sector for the damage.

      The government had over 4 decades to work on and solve the energy and water problem in the US. They chose to not only do anything to solve the problem, they implemented a course of inaction to make the energy and water problem worse. In the amount of time the population increased from 200 million people to over 340 million people. Their plan was conservation and that just doesn't work with an ever increasing population.

      They could have made the transition from coal and oil to a cleaner fuel, but they worked on the cheap with oil. Now decades later we have to wait for decades to fix a problem that shouldn't exist.

      For the water problem, especially on the south west coast, a national aqueduct, similar to the national highway system could have been built and completed. This would share water from overly abundant areas of the country to those living in drought.

      If they really believed in global warming and a rising ocean, they could have built enormous desalinization plants on the coasts.

      Unless you can limit the population, ecology has to be used for the benefit of man to live and survive.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, I don't think we always have the choice of opting out. Once a habitat for primitive man (or chimps) is destroyed, we don't have the option of going back.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      Living becomes more complex, I think is what you mean. If it became more expensive, it wouldn't be done. Look even if we use desalination plants to create fresh drinking water, it's still done at little cost to the person who buys the water. It is very much more complex to do that than to scoop water out of a stream, but when you're talking about supplying water to large numbers of people, you can't afford to do anything that is too human labor intensive.

      Even after some sort of a natural disaster of some kind that wipes out a large portion of the population, after a period of adjustment after the disaster, you will find people trying to do more with less labor. In fact, much like after the Black Death, I'd expect technological advances to increase to offset the productivity cut of the disaster.

      I also think what you're trying to say is that as our technology advances we become more and more dependent on it and each other. That is neither good nor bad. It just is. You can always choose to opt out of that scenario and live somewhere where you can do things yourself, but materially speaking it will not approach the lifestyle of someone who is part of an advanced economy.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, of course, in economic terms it's the demand for something that makes it expensive. But forget for a minute about markets and money. The more sophisticated our method of getting necessities, the more expensive it is in real terms, too. In man-hours. In what it would take one person working alone to accomplish it.

      When I talk about de-salting the ocean, it's not just the demand for water that makes it expensive. It's the process. It's labor intensive. It's something that even if we had a small population (say, after a disaster of some kind) would still make people have to work too hard for their water.

      Everybody can scoop some water out of a running stream. Not everybody can dig a well. Certainly, not everyone can take something that isn't drinking water and turn it into drinking water. Can it be done? Yes, but the expense is huge.

      Everybody can build a fire. Not everybody can build an internal combustion engine or a power generator. Getting oil out of the ground is more labor intensive than chopping a tree down. As our technology becomes more sophisticated all of us depend on things that none of us can do alone. In that sense, living becomes more and more labor intensive and more and more expensive.

      Do you see what I mean about losing our independence?

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      Nobody knows which other form of energy will be used, except to say that it will give you the most energy for the price you pay. That's why we use oil. No other substance we use now can give us the amount of energy burning oil can.

      What you don't understand is that price will determine when a particular power source is abandoned. That will spur people to find better and cheaper ways to produce energy. By allowing this to happen we can avoid the waste and corruption of something like subsidizing ethanol plants, not to mention the unintended consequence of making things like food more expensive.

      There's a guy who is currently working on a fusion power plant that comes in at under 10 million to build. Nobody is quite sure if it will work, but the underlying science is sound. http://www.popsci.com/scitech/article/2009-06/more...

      Will this be the thing to unseat oil as our power producer. Nobody knows until it happens. Or it could be we'll have to go back to coal. Heck we still use coal to meet half of our power needs in the US. Or will it be nuclear power?

      Few people know that you can build a nuclear power plant that the byproducts cannot be used to build a nuclear weapon. The only reason we built ones that did was because we were building nuclear weapons. http://www.hyperionpowergeneration.com/

      The interesting thing about Hyperion's batteries is that several of them have been used by the government to provide power for out of the way research or observation stations.

      It's not the harvesting of water that makes it expensive, it's the demand for water. In sparsely populated areas, the "cost" of water is negligible. The more population you get, the more clever you have to get in providing it. Streams to drilling to desalination, etc.

      Even so it's the demand for clean water that makes it costly. Consider the fact that we have 300 million people here in the States and we have access to clean water. Very few other places can make that claim. The only reason we're able to do so is because we're finding better and cheaper ways to provide clean water. You're letting the fact that it's our technology that allows us to do that blind you to the fact that we do provide clean, cheap drinking water to the masses of our people.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, yes, I understand that when one source of energy reaches a point of diminishing returns, another one will be used. But which other one? The one that didn't seem like such a good deal until you ran out of the easier source. And when the second easiest source is depleted, you will go to a third one. But each time it will get harder, and it will really be harder to sqeeze energy out of the next layer. In the end, we will have used it all up or gotten to the point where we are all poorer for having to harvest from such bad sources.

      It's the same situation with water. When there are few people in an area, they can drink from the stream. When there are more people, they have to drill wells. When there are even more people, then the ocean's water can be de-salted. Don't you see that eventually water costs a lot more because the process of harvesting it is more expensive?

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      You see maximization as utilization of all resources, Aya. That's not the case. At some point the use of one more unit of raw materials becomes unprofitable. Look up marginal utility for an explanation. Marginal utility can cover both supply and demand. Garret Garret wrote a book about wheat farming, "Satan's Bushel" in which marginal utility of growing wheat makes an appearance.

      That's what Steve means when he talks about resources that become more and more scarce rising in price. Sooner or later it will be unprofitable to use that particular raw material, so either production will stop or an alternative will be found. Unlike him, I believe that holds for oil too. Look at how people shifted their driving habits when gas prices went to almost $5 a gallon. That's the law of diminishing marginal utility. At some point people will value the gas more than the activity they plan that will use gas.

      That's what makes subsidization of price so bad. It causes demand to spike which can easily swamp existing infrastructure. That's why universal healthcare has runaway costs associated with it. Or subsidization could send "build" signals to the market, which then causes an overproduction of goods and the collapse of that market. That's what happened with housing. We still haven't cleared the glut of overproduced homes. The people who are talking about a recovery are dreaming.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Steve, I agree.

    • Steve R McDowell profile image

      Steve R McDowell 8 years ago from Atlanta

      I feel that balance can't be an explicit goal because it's impossible for people to know what balance really is in the grand scheme of things, at least economically. But I believe that it's still the goal of the economy. I do think it will only be reached if it's allowed to organically, as opposed to trying to manipulate it into "balancing", as governments like to try to do sometimes, though.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Steve, I think we're getting a little closer here to a common goal. The problem with the term efficiency is that it always begs the question, efficiency at what. When the answer turns out to be "maximizing productivity", then the question that pops up after that is: for how long?

      Balance is a little closer to what most people really want, if they stop to think about it. But as I said in my hub, in order for the market to be free, balance can't be an explicit goal either. It's just better if the natural operation of the market is allowed to balance and create a more or less stable state.

    • Steve R McDowell profile image

      Steve R McDowell 8 years ago from Atlanta

      Perhaps it's not quite "efficiency" that's the goal... perhaps it's "balance". A lot of economic principles center around the idea of maintaining some kind of balance, including but not limited to the laws of supply and demand.

      I personally see the two terms as very similar in the context of the economy, but perhaps they're a little further apart than I imagine them as.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Steve R. McDowell, I like a debate, too, which is why I welcome your comment!

      I agree that we don't have to have a population explosion. In my hub about Homo Sapiens, I discussed many alternatives to a population explosion. All of them were based on people making their own decisions and not being forced by others. I want to avoid government coercion.

      It isn't a question of supporting people or supporting the environment. People are dependent on the environment. It's a question of finding the right natural balance. Which is why I stick to my original contention that efficiency can't be the goal of the economy.

    • Steve R McDowell profile image

      Steve R McDowell 8 years ago from Atlanta

      I don't want to argue, but I do enjoy a good debate. With that in mind, let me respond to that.

      I don't think it would result in a population explosion, at least not on its own. Just because people are capable of having more kids doesn't mean that they will. Culture plays a bigger role in that. Furthermore, the alternative is to fail to support people, either condemning people who are already alive to death (less likely) or forcing people who want kids to not have them (more likely). So, which is better? Supporting people or supporting the environment? Because it seems almost like it's impossible to do both sometimes.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Steve R. McDowell, efficiency is a worthy goal for some people to pursue. As a personal goal, I'm not knocking it! However, that can't be the goal of the economy as a whole, because if pursued unrelentingly, using the least number of resources to support the most number of people would create a population explosion and deplete all resources to the point where any further effort would give diminishing returns. As a society, I don't think we want to go there!

    • Steve R McDowell profile image

      Steve R McDowell 8 years ago from Atlanta

      For my previous statement about efficiency, the efficiency I'm referring to is using the least number of resources to allow the most number of people to get what they want and are willing to pay for as possible. This would rarely lead to a complete depletion of natural resources simply because as the resource becomes rare, the price goes up, making it inefficient, then it would be abandoned. The only times it would not be abandoned (theoretically) is if we are too dependent on that specific resource... the main example of that right now is oil.

      So, I still think efficiency is the goal, but I do agree that free enterprise gives people more freedom, which is always a plus! ^_^

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, okay. Then we are agreed!

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      ledefensetech 8 years ago from Cape Girardeau, MO

      Now we see eye to eye, I think. All matters concerning bankruptcy should be addressed in a contract whenever a loan, credit or investment money is extended. That way people know what to expect and can walk away from the deal if they don't believe it to be in their best interest.

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      Aya Katz 8 years ago from The Ozarks

      Steve R. McDowell, thanks for your comment!

      I agree that no business should be bailed out. The reason: nobody should pay for somebody else's economic prosperity, unless they are willing to pay. They should not be forced to.

      I disagree that the goal should be efficiency. Efficiency at doing what? Exploiting natural resources until they are all gone?

      I like free enterprise because people have a choice what to do with their lives, and nobody can force anybody else to do something that that person does not wish to do.

      Free enterprise means exactly that! Freedom.

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      Steve R McDowell 8 years ago from Atlanta

      You said so many points, some of which I agree with and some of which I don't, and I would have to write an entire new hub to cover all of it, so I'll just say a couple of main points here ^_^

      I disagree with government intervention. It seems that you do to, but I disagree for a different reason. If a company, no matter how large, is suddenly no longer able to compete in a free market, why do they deserve a special boost from the government to keep going? Isn't that encouraging inefficiencies? Aren't inefficiencies bad because they are a waste of resources? I think so.

      As for productivity being the goal of a good economy, I disagree. I think the goal of a good economy should be efficiency. To use all of the available resources in such a way that we don't use too much and we don't use too little. That applies to human labor and trees in the forest. And I think a free market tends to lead to optimizing efficiencies. Government interventions encourage inefficiencies, and while that might provide more jobs, it isn't using those jobs in an efficient manner. Losing those jobs and getting new ones from a new competitor in the market, or even in a different market, is much more efficient.

      I'm sorry if I'm babbling, but I suppose that's the main point of my comment. The goal of a free market is optimal efficiency, at least that's what I believe.

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      Aya Katz 8 years ago from The Ozarks

      Kimberly Bunch, thanks for your comment. I'll take a look at your drought hub.

    • Kimberly Bunch profile image

      Kimberly Bunch 8 years ago from EAST WENATCHEE

      Interesting Hub! Here's one I wrote: https://hubpages.com/politics/drought

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      Aya Katz 8 years ago from The Ozarks

      Nets, okay! Good.

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      nhkatz 8 years ago from Bloomington, Indiana

      No I was agreeing wholeheartedly.

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      Aya Katz 8 years ago from The Ozarks

      Nets, cute! The old "giant capacitor" trick. How easily we fall for it!

      But seriously, are you saying you disagree with me?

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      nhkatz 8 years ago from Bloomington, Indiana

      Aya,

      I could not agree with you more. Here's a video clip about what can happen when schemes for power storage become too convoluted,

      http://www.youtube.com/watch?v=q9YVppQKgnc

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      Aya Katz 8 years ago from The Ozarks

      Someonewhoknows, I think I understand what you are trying to say. There is conservation of energy and matter, and matter and energy can be converted into each other. But the problem is that the conversion costs us. It's like the problem of converting from one currency to another. We can keep our money in whatever form we like, but converting it to another form is going to cost us. Liquidity is an issue.

      People also make this same argument in nutritional circles. A calorie is a calorie is a calorie, they say. This is true. But have you considered the amount of energy that it takes to convert a calorie in the form of fat into a calorie in the form of carbohydrates? This is why it does make a difference what form of calorie you consume.

      We can very laboriously create better storage systems for energy, but it's going to cost us, and the more complicated the system is, the more the government is going to get in on the action.

    • someonewhoknows profile image

      someonewhoknows 8 years ago from south and west of canada,north of ohio

      Aya while industrial technology requires ecological intervention in order to manufacture almost anything,it can be minimised and even reversed given the will to do so.I believe as we grow technologically we may well be able to create the natural resources we need by creating them from the very source of all creation.Energy itself! Everything is madeup of energy that has been coverted into solid objects.If we ever learn to dematerialize solid matter then we should be able to reconstruct it also.Then this is speculation on my part.

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      Aya Katz 8 years ago from The Ozarks

      Vizey, thanks! Not only is economic progress at the cost of ecology not a good idea, I don't think it's even possible. True wealth comes from natural resources in conjunction with human labor and ingenuity. Take away the resources, and the whole thing collapses.

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      Vizey 8 years ago

      Thanks Aya for writing informative and useful article on ecology and economy. Both Economy and Ecology are closely interrelated. Economical progress at the cost of Ecology is not a good idea. What do you think Aya?

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, let's shelve the tort issue for now.

      Are we then agreed that there is no need for bankruptcy, and that contract law alone can determine obligations between and among willing market participants?

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      ledefensetech 8 years ago from Cape Girardeau, MO

      I didn't say repeal all tort liability, just that it's a very subjective area of law and one needs to exercise special care when dealing with that sort of thing.

      As for your second question, well doing things that way would eliminate bankruptcy courts then wouldn't it?

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, if you repeal all tort liability, then you encourage recklessness... But let's not spend all our time on this, because it's a subject for another hub.

      If you've already determined everyone's rights and obligations under contract law, why do you need a bankruptcy court?

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      I'm not a big fan of the idea of tort liability. Accidents are just that, accidents. You open up a whole new can of worms when you start assigning liability due to accidents. Not that I necessarily have a fix for those problems, but there must be a better way to deal with those issues.

      As far as bankruptcy goes, well that's simple. Remove bankruptcies from tort law and only consider them under contract law. The more concrete we can keep these things, the better I think. Tort law is too abstract to make for consistent decision making concerning damages and liability.

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, I don't disagree with you that debt should be subject to contract law. I said so before. You can agree to whatever terms you like with someone in a contract. But there is no way to contract around tort liability. That's why bankruptcy should not be allowed.

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      Aya Katz 8 years ago from The Ozarks

      Someonewhoknows, then we are in agreement!

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      ledefensetech 8 years ago from Cape Girardeau, MO

      Big business uses the power of government to erect barriers to entry and restrict competition. This has the effect of guaranteeing corporate profits at the cost of raising prices for everyone else. A free market is always driving prices down and weak firms are always going out of business. Incidentally that's one reason I'm so lenient on bankruptcy for business owners.

      I think that's why we disagree on that particular issue, Aya. All debt should be subject to contract and thus contract law. That is pretty much the only way that both sides can come to an understanding of the risks involved in extending credit, loans, investment money, what have you.

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      someonewhoknows 8 years ago from south and west of canada,north of ohio

      my point as well

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      Aya Katz 8 years ago from The Ozarks

      Someonewhoknows, if you're simply observing that the situation with big businesses is quite different nowadays from what I described above, I totally agree.

      But should the situation be different? What, in theory, is the difference between Big Business and any other business? Is this a distinction we want to maintain? Whose interests does this distinction serve?

    • someonewhoknows profile image

      someonewhoknows 8 years ago from south and west of canada,north of ohio

      If,your talking about small business I'm sure your right.Big business is a different story it thses days it seems.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, no, I am saying that bankruptcy is bad because innocent bystanders have no recourse against the bankrupt. By all means, make contracts with anyone you want to that if you spend all the money they give you they have no recourse against you. But just see how many will willingly agree! On the other hand, absent such an explicit agreement with someone, there should be no way to worm your way out of a debt. Especially a debt to someone who never had any choice in the matter, such as the victim of a hit and run.

      That's not unreasonable, is it?

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      I'm saying that your "innocent bystanders" are not so innocent. You've stated that those innocent include creditors of the business for items used by that firm to conduct business. I've countered with the idea that granting credit means that you assume the risk that you might not have your claim paid off.

      Again it's a matter of choice and self interest. I can choose to grant credit to my customers without any control over their choice to repay me. Overall I can expect that many people will repay their debt to me, but there will always be exceptions. Thus it behooves me as a businessowner to take steps to minimize my risk. I can't tell my customers how to run their business, but there are other methods to shield myself from risk. But the risk is always there.

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech,

      You write: "In the end I suppose I should say that I, personally, would not accept a loan or credit or investors without the ability to declare bankruptcy. I'm taking the risk of starting a business anyone who invests with me should be willing to run the same risks."

      It sounds to me as if you are not looking for business associates. You are looking for partners. Partners share equally in the risk. Partners have a say in how a business is run, and as such, they also get to share equally in the profits and the losses.

      Suppliers don't have to offer credit in order to be burned. A delivery might be made exactly when the business is going under. The supplier has every right to expect to recover the full amount owed and to hound the bad businessman all his life until the debt is paid. An honorable person would work all his life to remove this stain from his honor.

      A person killed in an accident caused by the operation of a business has the right to have his family paid in full.

      No businessman should expect innocent bystanders to share in the risks while having no power to control the business or share in the profits.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      Those people who get hurt other than banks and investors by the very act of granting credit, invest in the operations of a firm. That's the nature of credit. If you don't want to take the loss, don't grant credit to your suppliers. People do grant credit, because by granting credit, you increase sales. Again, it's a matter of managing risk.

      I don't advocate granting businesses special privileges, I advocate giving people the ability to take risks and not bet the rest of their lives on the outcome. That's why I default back to writing that sort of thing in the contract. That way there is a meeting of the minds and people know what each party is risking and the duties of each party. The same should hold for granting credit as well.

      In the end I suppose I should say that I, personally, would not accept a loan or credit or investors without the ability to declare bankruptcy. I'm taking the risk of starting a business anyone who invests with me should be willing to run the same risks.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, we seem to be having a problem communicating with regard to fractional reserve banking. All I said was that if the risk to the depositor is unreasonable, the depositor will not make a deposit. Absent government intervention in favor of investments, these banks will have very little money to play with.

      If you allow a business owner off the hook in bankruptcy this will affect all sorts of creditors, many of whom never intended to be investors. This will affect people damaged by negligence of the business owner or his employees. This will affect suppliers who were never paid. This will affect employees who never received their salaries.

      If businesses are viable, they don't need any special privileges. If they need special privileges, they are not viable.

      I agree that contract law should govern. And the law should be completely unbiased as to what kind of contract it is. All people should have the same rights under contract law. There should not be one law for the entrepreneur and another for somebody else.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      Because all banks are fractional reserve. Instead of us paying them, they pay you a nominal sum to use your money, they get to use your money to originate loans that they lend out at much higher rates than they give you in compensation for using your money. The problem is you can't opt out of the system, not with a fractional reserve bank. It's interesting to me that you can be so against investors being forced to take a loss on their money and not see the banking system for what it is.

      As for letting the businessowner off the hook, that's simple. When loans or investment agreements are written up, there should be clauses inserted to cover eventualities like bankruptcy. That's only prudent. I don't think you'll find many people who are willing to take investment money without some sort of clause that concerns the folding of the enterprise.

      My position has always been that investors know they risk their money when they invest in a venture. Much like a businessowner, an investor takes risks. If you're not willing to risk your money, don't invest. Likewise, if you invest money understand that you may not get it back.

      That's why investments and loans need to be covered under contract law. The contract will determine who is and who is not a businessowner and will also spell out the terms of repayment, bankruptcy, etc. That way it's all out there on the table, no misunderstandings and no going back after the fact like we do now. In that case free market principles are upheld because both parties are able to walk away from the deal if they wish.

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, think about what you just wrote about bankruptcy: "My concern has always been for letting the business owner off the hook, not allowing people to rack up debt, then get it written off."

      Why do you want to let a business owner off the hook? Exactly how do you define "business owner" as opposed to every other human being who is not a "business owner"?

      I believe a free market has no bias for or against any particular way of making a living. You seem to want there to be a bias in favor of the accumulation of capital in the hands of a few.

      Am I mischaracterizing your position?

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      Aya Katz 8 years ago from The Ozarks

      Ledfenesetech, really? The reason people put their money in the bank is fear of thieves? Then why don't people pay the bank for guarding their money? Why doesn't the bank charge us interest, instead of paying us interest?

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      Aya Katz 8 years ago from The Ozarks

      Someonewhoknows, there are many Amish in this area. So if that's a prescription for me, I'm already doing it.

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      Aya Katz 8 years ago from The Ozarks

      Misha, thanks! I do think that we can be happy at any technological level, if left in peace to develop our lives to the fullest. I am not either for or against technology or technological advancement. I think a free economy has no bias in either direction. If advancement happens, great. If it doesn't happen, that's great, too. Each man should do that which is right in his own eyes. (That comes from the book of Judges -- a sweet period of anarchy when Israel had no king.)

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      ledefensetech 8 years ago from Cape Girardeau, MO

      Aya, the whole point to banks was to have a safe place to put your money so it would be guarded. Otherwise you'd have to have a vault in your home, complete with guards. It's much more economical to pay someone to keep your money in a vault because the banker can then use the fees to hire guards and security systems. You might be content to have a virtual Fort Knox in your home, but most people will opt for the convenience of a bank.

      Sure you can live rural, but the standard of living almost always lags behind those in the cities. Are you sure you're not stating your preference in your choice of where to live?

      As for your money, well that's your money. If you want to insert in a clause that your claim in bankruptcy proceedings will take precedence, you are more than welcome to insert that into a contract as it is for you to insist that leaving that clause out is a deal breaker. Of course the types of investments you're likely to invest in will show lower returns than would otherwise be the case. Again that's your choice and I respect that.

      I'm comfortable with a bit more risk. I might have an increased risk of losing money, but I'd also have a better chance to invest in the next Bill Gates or Andrew Carnegie or Henry Ford. I'm even willing to forgo repayment if I'm convinced that the individual in bankruptcy is using the law to get a fresh start and not simply a mechanism for getting out of debt.

      That, I think, is your major beef with bankruptcy laws and I can sympathize with that view. My concern has always been for letting the business owner off the hook, not allowing people to rack up debt, then get it written off. There is quite a bit of work required to reform the ways bankruptcies are done here, I never meant to imply that the system was perfect.

      @Misha, Oh sure, take her side. :D Actually I enjoy having intelligent people to talk to, it enables me to explore and refine the implications of economics and free market systems. Plus it allows me to hone my arguments and make them better. Sometimes I know what I want to say, but I'm not so good at doing it. Discussions like this make me better at that.

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      someonewhoknows 8 years ago from south and west of canada,north of ohio

      Like the Amish

    • someonewhoknows profile image

      someonewhoknows 8 years ago from south and west of canada,north of ohio

      We need to live closer to people we identify with

    • Misha profile image

      Misha 8 years ago from DC Area

      Wow, the comments thread is excellent, too! Thank you both Aya and LDT for this very educational and thought provoking conversation. There is something for me to ponder about for a while.

      I have to say that more often I found myself agreeing to Aya's side of the story, her position seems to be more coherent. :)

      Also, looks like the major source of disagreement is in LDT assuming that technological progress is a necessary component of any conscious living, while Aya allows for a happy life without technological improvements. :)

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, if the currency is really stable, there's no need to keep our money in the bank, because it will preserve its buying power even if we stash it in a mattress. I didn't say I was against allowing fractional reserve banking to occur privately. I'm just saying that most retired people wouldn't put their savings there, if not for inflation. Only people who wanted to invest would, knowing there was a risk involved.

      Cities may have always been where the jobs were, but people used to do fine without jobs. The US population was mostly rural until recently.

      If somebody borrows money from me, I expect it to be paid back, no matter what they say they plan to do with it. I don't want it to bankroll jobs created for others, and then never be paid back to me. No, I don't think people who borrow to start businesses should be given special privileges not to return the money. What message would that be sending? People who borrow money in order to be bosses get to go off the hook, but workers have to pay back every penny? Isn't that the sort of discrimination based on class that we don't want to have?

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      If you limit bankruptcy proceedings to those who have failed in business, then you create a no fault system that encourages risk taking and will encourage economic growth. One of the risks investors take when they invest money is that they might not get it back. Knowing which investments to take and which to pass on marks you as a good investor or a poor investor.

      I'm not sure you understand the consequences of fractional reserve banking. With a fractional reserve bank, the banks only keep enough capital on hand to cover daily transactions, perhaps a little more, in case people's confidence in the bank wavers. The rest of the money is used to originate loans, some of which will not be paid back. If a bank has more good loans than bad, they will make money and the whole system keeps chugging along. In this type of a system, you are not given the choice as to how much money you risk when the bank originates loans. Fractional reserve banking violates people's property by allowing banks to use your property for their own purposes without your consent.

      Bank runs occur when people become fearful that a bank has lost so much money, that people's deposits are in danger of disappearing. Every bank crisis prior to 1913 featured bank runs as the mechanism which caused a recession. Even in post 1913 crisis, we've had bank runs.

      Aya, cities have always been sources of jobs. That's why people have moved there. The post-WW II landscape was strange in many ways. People left the cities because of transportation improvements like interstate highways, the automobile and cheap power. Those things are beginning to change, I think. Cities have one thing going for them. Transportation costs are much less than commuting, in most cases. Like I said the post-WW II world was a bit strange.

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, I don't think people will be scurrying back to the cities if there are no jobs in the cities.

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, I wasn't talking about fractional reserve banking. I was talking about the very strong stand that you just took in favor of letting people off the hook for their debts in a bankruptcy proceeding. You explained that if not for bankruptcy laws, fewer people would take the risks necessary to start businesses, and that risk-taking was necessary for the sort of economy you want to have flourishing. As I see it, that's not really different in theory from what Keynes wanted to do to encourage investment. Think about it. In both cases, people who were never asked ended up funding a business that employed people until it went under... Good way to keep people employed at the expense of people who never agreed to invest.

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      ledefensetech 8 years ago from Cape Girardeau, MO

      The only reason people moved to the suburbs was because cheap energy allowed them to leave the city and have a "country home". Well that and the fact that welfare was starting to eat out the hearts of our cities and making it so that everyone who could move out of the city would move out of the city. You don't see that sort of thing in developing nations, everyone there is desperately trying to get into the cities, that's where all of the jobs are after all.

      It will be interesting to see if current changes will send people scurrying back into the cities. Should present trends continue, I think we'll see a reemergence of rural and wilderness areas in what was once suburbia.

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      Aya Katz 8 years ago from The Ozarks

      Someonewhoknows, maybe. Even if these machines work, though, how will they deal with the government's encouraging people to build new houses instead of fix up the old? As long as the cost of living in the city keeps going up, more people will leave the city and build suburbs where its is cheaper. But by doing so, they will bring up property values in non-urban areas. As property values rise, local taxes will rise, forcing rural people to go out looking for work, in order to pay for the right to live where they live.

      I can even imagine every household creating its own energy from solar panels or windmills. But as long as we have to pay taxes for the right to hold on to our property, we'll still be forced to work for others in order to pay the taxes. And the taxes will keep going up.

      Our problem isn't really a lack of cheap and pollution free energy. The problem is that no matter what we have, we're not allowed to keep it, but are forced to go out and earn it over and over again.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      Aya, I am talking about, of course, people choosing to invest their money, rather than being forced to. Why do you think I'm so opposed to fractional-reserve banking? In a fully reserve bank you can choose how much of your money you want to risk originating loans, but the bulk of your wealth can be held inviolate in your personal accounts.

      Keynesianism in many ways is an attempt, much like central banking, to "fix" the unfixable. It is impossible to protect banks from runs because you're gambling with people's money. If you screw up, entire lifetimes savings are lost and that makes people worried. That what all of this bailout boondoggle is about. By convincing people that things are getting back to "normal" the entire system can keep going. All it will do in the end is further destroy wealth.

      In order to have a sustainable economy we need sound money and fully reserve banks. That maximizes people's freedoms and allows them to weigh the risks themselves and decide for themselves what to do with the fruits of their labor.

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      someonewhoknows 8 years ago from south and west of canada,north of ohio

      Maybe one of these energy inventors will come to the rescue and save our economy and ecology.

      http://www.free-energy-info.com/

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, what my father risked was his savings. He did not play with money from other people.

      Judging the risks in the market is like betting on the state of mind of other people and what they will want later. It's a game of politics.

      While I am not opposed to speculation, I am opposed to forcing people to speculate. If you can't see that the Keynsian system forces everyone to speculate, while a free market doesn't, then you don't really distinguish between a free market and one that is manipulated by the government.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      Investment is a risk, what your father risked was his personal investment money. That's why, unlike with personal savings, other people's money charges interest in order to mitigate risk. Riskier ventures charge more interest, less risky ventures charge less. That's the true evil of Keynesian economics, you start to lose the ability to judge between safer risks and dangerous risks. That is when all you are left with is gambling with money.

      A person who is able to judge the risks in a free market has much more control over his money, than someone who cannot judge risk in a controlled economy.

      As for not taking bankruptcy cases, you probably passed up all kinds of people who were being screwed by our current economic system. Medical bills come to mind. Our system is set up so that prices continue to skyrocket despite our ability of our wages to keep pace. So in this type of an economy people need bankruptcy proceedings more than they would in a free market.

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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, every human endeavor is fraught with risk, but there's a huge difference between taking a risk on yourself and risking other people's money.

      To give an example, my father started his own business in the 1980s. At first he made some money, and then the business stopped making money. In the end, my father closed the business, having lost some money, but still with plenty of savings. He owed no money to others. Whatever risk he took was with his own money. This kind of gambling is moral. The other kind is not.

      I am morally opposed to letting people off the hook in bankruptcy proceedings. When I practiced law, that was the only kind of case I wouldn't take.

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      Aya Katz 8 years ago from The Ozarks

      MikeNV, thanks for your comment! You make a lot of very good points. I, too, deplore the wasteful dumping of plastic in the ocean and don't see why everyone needs a new ipod. I think that a free economy without government bailouts or incentives for investment and spending would leave us with a cleaner environment and happier lives.

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      ledefensetech 8 years ago from Cape Girardeau, MO

      Aya, any human endeavor is fraught with risk. For every Bill Gates, there are thousands or millions who didn't make the right choices. How many times have you seen people say "wish I'd thought of that"? The difference between those who succeed and those who don't is simple. Those who succeed take risks. In essence that's what economics is, weighing risks.

      Gong bankrupt is due usually to people making mistakes. That's why our bankruptcy laws have been so liberal in the past. It encourages people to risk and some of those who take risks will succeed, to the benefit of us all. For those who don't succeed, they can fail and not pay the price for the remainder of their lives. Those who fail have also learned what does not work and thus are more likely to succeed in the future.

      Now there are people who will use those laws to their benefit. They use those laws to get out of contracts they signed in not so good faith. But that's the sort of behavior you can expect in a country which no longer places vale on keeping your word and dealing with the consequences of your actions. If everyone is "exploited" by everyone else, well then we live in a constant state of civil war. I don't buy that argument.

    • MikeNV profile image

      MikeNV 8 years ago from Henderson, NV

      Did you know there are 1,022 cars in the United States for every 1,000 people? Do we really need more cars? No one addressed the "cost" of destroying cars that still run but supposedly are a burden to the environment. Will these cars be recycled or buried? And what about the toxic chemicals in the electronics? And what about the energy used to build more cars? Just one example of the "bailout" being an ecological disaster. I heard a woman complaining on some Forum that she was the only one in the family that didn't have an iPod! Does everyone need an iPod? Does anyone share anymore? I read an article on the rare earth metals needed to manufacturer Hybrid Engines and Batteries. Is there a "cost" to the mining activity used to get these metals? Humans are far too materialistic and the whole "Consumption" driven economy is bound to fail. Better sooner than later. Time to rethink the "life" experience and purpose. And you know what is really sick? Pollution. I read an article on the plastic wastes floating in the center of the Ocean. I watch Survivor man and Bear Grylls Born Survivor, and no matter where they go or how remote they always encounter human pollution.

      The entire USA Economy is based on paper and numbers and the false promise that the acquisition of material items will bring wealth, success and happiness.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Thanks, Misha, glad you dropped by!

    • Misha profile image

      Misha 8 years ago from DC Area

      Good questions Aya, damn good questions! Now I am off to reading comments :)

    • Misha profile image

      Misha 8 years ago from DC Area

      Good questions Aya, damn good questions! Now I am off to reading comments :)

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, farmers should not have to gamble. Nobody should be forced into a situation where he has to predict the market. If you see the value of stability, you will see that it has to be possible to grow enough to keep yourself and sell any surplus you may happen to have in any particular year, keeping enough in reserve to plant next year's crop and to provide for the next few years in case it isn't a very good decade.

      This goes back to why I think Keynsian economics is bad. It forces everyone to gamble. Deep down, I think that growing up under a Keynsian economy, you may have accepted that ethic.

      Going bankrupt is a terrible sign of moral depravity, in a place where a person has the choice not to gamble. It is immoral to promise to pay someone later and to fail to do so. But if gambling is unavoidable, then it is also unavoidable that some will go bankrupt each year. This is how the socialists build their case against "capitalism". This is how people working for "robber barons" feel victimized. Please don't accept this ethic. It's got to be possible to live debt free in a free market.

      The dust bowl didn't hit California because it wasn't overpopulated at the time. It is now.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      Yes, but the most productive farmland still produced food. The dust bowl hit places like western Kansas, the panhandle of Texas, eastern Colorado, southern Nebraska and northeastern New Mexico initially. Those are very hard areas to farm. They're in an intermontane climate and those are very hard to farm in. That's why places like Wyoming are good for herding and that's about it. Later North Dakota, South Dakota, Minnesota, Iowa and Wyoming were affected.

      One point that is very interesting is that these were some of the last of the frontier territories to be settled. Why? It's much easier to farm in places like Oregon and California, than those intermontane states. Soil has to be worked in those areas and due to the sparse topsoil, the area is very susceptible to soil depletion. The dust bowl times were also a time of drought. This was the "tipping point" event, along with other factors, yes including soil depleting activities of farmers that made the situation worse. Made the situation worse, not caused the situation.

      Farmers always have debts. They gamble their futures on the fact that they've correctly forecast the supply and demand of farming output. Those that succeed, continue to be farmers, those that don't go bankrupt. They weren't very good farmers, or at the very least they were not very good at keeping their risks down to a manageable level. Whatever the reason, they obviously aren't fit to provide food to others.

      You'll note I hope that the dust bowl didn't hit places like California, Georgia, Appalachia, even the Northeast was safe from dust storms. The dust bowl occurred exactly where it did due to the unsuitability of that area to farming. So long as you do not have drought conditions, the land can support farming, but you're on the margin in those areas. Once things change, just a little, you're probably not going to be farmers anymore.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, about the dust bowl: it wasn't subsistence farming that did it. It was farming for re-sale. The price of food dropped due to depression and deflation. The farmers had debts, so they were in bad position to enjoy the benefits of deflation. (If they had had savings, it would be the other way around.) So they kept growing more and more food to make up in volume for their loss of earnings in dollars. The more they grew, the less they made, until they had completely exhausted the soil.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      You need to shed your misconceptions. If you want to look at this like an economist you have to look at it backwards from the way you have been looking at it. You're asking why don't the farmers farm elsewhere. What you don't realize is that the farmers of the Central Valley are not only able to farm in that place, but they do it well enough to produce 57% of California's agriculture output. It's not really that hard to farm there.

      Even when you add in the costs associated with trucking in water, farmers are still able to make a profit on growing food. That's how good they are. The problem is that the government isn't allowing water to be brought in because of "environmental issues". That is what's going to cause expensive food, food shortages or in the extreme, famine. In a free market water would flow or farmers would go out of business or relocate. Either way the problem would be solved and food would still be abundant.

      You mentioned the dust bowl, which was due in part to subsistence farming methods. Also if you look at the areas hardest hit, they were places that were marginal for farming. Consider this, even with the dust bowl, food prices continued to fall so FDR actually paid farmers to not farm. This was at a time when other farmers were no longer able to farm, and fled to places like California. Food prices were also increasing during the [i]Great Depression[/i] which contributed to the soup lines. You only get that kind of craziness when you let politicians take control of the economy.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, I took a look at that Glenn Beck clip you posted, although I wasn't able to watch all the way through. My internet service isn't that great, and it kept stopping.

      From what I did see, although, of course, I don't support the EPA getting in on the action there, California farmers are in serious trouble that is not all government created. The drought is real. Don't you think it's weird that farmers are having water shipped in? How can that possibly be economical? Wouldn't it be better to relocate to a place where it actually rains?

      This reminds me of the dust bowl. These things -- economic depressions and ecological damage -- are not completely unrelated, it seems.

      BTW, it's raining right here, even as I write. Tons of rain. Isn't Missouri a better place to grow things?

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      Of course they had choice. Preindustrial worlds don't have a proletariat, they would have died from starvation or malnutrition or froze to death or some other horrible way to go that was commonplace before industrialization gave us a cornucopia of material wealth. Not even the Romans or the Chinese at the height of their various empires ever had as many people live as well as we did starting in the 19th century and continuing into today.

      It goes back to my point about people having different values and making decisions according to those values. For someone who works in a coal mine, they know that black lung is a hazard. That's why coal miners are paid so much more than say, a farmer, in Appalachia. I've actually thought that company stores could have been a very good idea. The problem is that they were paid in scrip, which ended up not being worth the paper it was printed on. Again, any type of paper exchange loses its value over time.

      If they'd been smart, the companies would have paid in cash money, and used their ability to buy in bulk as a way to bring in supplies to the company town at competitive prices. If they could do this at a profit, they could offset some of the cost of paying wages, while increasing the standard of living for their workers. That, in the end, is what we're talking about. The standard of living of the people and which system allows for those standards to rise sustainably.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, apparently these regular people had "no choice", or at least that's how I read the text. It's the question of choice that gets me in trouble in these discussions -- I've been told not to "blame the victims". I think ultimately, everyone does have a choice, but sometimes it takes courage and foresight to exercise it.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      You might find the following pretty interesting: http://www.foxnews.com/video2/video08.html?maven_r...//www.foxnews.com/glennbeck/index.html

      You think we would have learned by now to leave farming to the farmers. Under our mostly lassiez-faire system, we've been able to grow more food with less and less labor for well over a century now. I suppose the social engineers can't just leave well enough alone and let something work.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      It's funny how regular people are stupid enough to work for these "robber barons" against what should be their own self interest. I get so tired of the Marxist rhetoric. I think I'm finally beginning to understand why some people in the North and South were so ready for the Civil War. I had hoped that we'd moved beyond the trial by combat phase of resolving differences, but there is a certain allure to it when things reach this kind of an impasse. The great danger being, of course, the unintended consequences of violent action. Our founders were very wise to attempt to protect our property and liberty. It's our great failure that we failed to insist on inheriting our birthright.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Nets, how bizarre! I'll check it out. Of course, I learned long ago not to leave comments.

    • nhkatz profile image

      nhkatz 8 years ago from Bloomington, Indiana

      Aya,

      I'm sorry if this is off-topic here, but you really should check out pgrundy's latest post at dropoutnation, a reflection on the nature of work:

      http://dropoutnation.blogspot.com/

      She seems to be deeply influenced by you. She is on the cusp of advocating for a ban on agriculture. Also, she has

      a radical reinterpretation of Marx. It seems that his whole

      doctrine is a consequence of his dictum that he will not

      live for any other man, nor ask any other man to live for him.

      Just don't leave any comments.

      Nets

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      zyfwm, thanks for your comment!

    • zyfwm profile image

      zyfwm 8 years ago

      Interesting article.

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Nets, thanks for the link. Jerilee Wei in her hubs has also been covering the exodus from Florida to some extent.

      The question is, after enough people leave, will the oppressive measures stop?

    • nhkatz profile image

      nhkatz 8 years ago from Bloomington, Indiana

      Aya,

      Here's a good way of slowing growth:

      http://news.yahoo.com/s/time/20090903/us_time/0859...

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Nets, you and I both know that Ralph Deeds does not support a pure Keynsian economy. I'm not sure that Ralph Deeds knows this, though. He told me that Marx was outdated, and he didn't support Marxist redistribution. He told me told me to read Keynes. So I have!

      As to whether the originator of an ingenious scheme is a genius, I would say yes. But, of course, some people might accuse me of the "etymological fallacy."

    • nhkatz profile image

      nhkatz 8 years ago from Bloomington, Indiana

      Aya,

      If a scheme is ingenious, does that make the inventor a genius, or was he merely displaying a bit of ingenuity?

    • nhkatz profile image

      nhkatz 8 years ago from Bloomington, Indiana

      Aya,

      Ralph Deeds does not support a pure Keynesian economy. He supports redistribution.

      Nets

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Ledefensetech, okay. Is that a point in favor of a Keynsian economy as opposed to a Marxist one? Because, really, we haven't had a free economy in close to a century, and I'm not sure either of us could predict exactly what a free economy would do.

      We both support a free economy. But you like growth, so you predict that a free economy would bring growth. I like stability, so I predict stability.

      It would be nice to find a more objective way to predict what the true outcome of a free economy would be.

    • ledefensetech profile image

      ledefensetech 8 years ago from Cape Girardeau, MO

      At least we don't black out parts of our nuclear power plant operator's manual because of "state security".

    • Aya Katz profile image
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      Aya Katz 8 years ago from The Ozarks

      Someonewhoknows, Ledefensetech, FDR did try to redesign the economy according to Keynsian blueprints. But it hasn't quite collapsed yet. Obama may be redesigning it according to more traditional Marxist lines, and that may bring about the collapse that saves the ecology. Or not.

      Just remember Chernobyl was under the Soviets.