Escaping from the Inescapable Casino of “Free” Market Capitalism

Jim Klag

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@Jim Klag , I care about your knowledge of economics. All the items I have pointed out on this thread are fueling white grievance in our country. The white a grieved people are trying to find answers why they are not as well off as their parents. It is shown in this thread... The policies from the 80's to today's have brought us to this point were white a grieved people become a mob...
Again, don't bother.
 

Leftyhunter

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The physics professor has proven or shown that all markets devolve into oligarchy and market force pushes wealth upwards to the 1% class...

Here is the original article from Scientific America...

https://www.scientificamerican.com/article/is-inequality-inevitable/

Here is a summary of the original article a brief read...

https://countercurrents.org/2019/11/escaping-from-the-inescapable-casino-of-free-market-capitalism/

snip...

An excellent article “The Inescapable Casino”, written by a professor of mathematics is definitely worth reading. https://www.scientificamerican.com/article/is-inequality-inevitable/ The article shows how-physics and mathematics can describe the distribution of wealth in modern economies with unprecedented accuracy. Oxfam estimates that today some 26 individuals possess as much household wealth as the lower half of the world’s population combined—over 3.5 billion people! Statistics indicate that the rich are increasingly concentrating more wealth. Between 1989 and 2016, the US has become more unequal and now has the highest inequality in the “developed” world. Presently 14 European countries also fall into an oligarchy state (power in the hands of the top 1%).

“The free market is essentially a casino that you can never leave.” The longer you stay in the casino the more likely you are to lose, and inequality inevitably grows due to the well documented multitude of systemic biases favoring the wealthy. If the economy is unequal to begin with the wealth of the poorer will decrease and be transferred to the wealthier. Mathematical models demonstrate that the natural inclination of wealth is to flow upward in a “free” market capitalist economy. Once there is some variance in wealth, NO MATTER HOW SMALL, wealth will move from poorer to richer. Inequality INEVITABLY grows more pronounced. There is a systematic inherent unfairness as the top 1% takes a greater and greater share of social wealth, and only redistribution sets the limits on inequality.

The professor of mathematics at Tufts University writes that conflating the concept of the free market with the notion of Freedom is a mistake. The “free” market gives rise to economies that are anything but free and fair. In fact, the inequality in free market economies INEVITABLY grows more pronounced.

The Physics of Inequality:


Water has a dual state, either water or water vapor, depending on temperature. At the boiling point water turns into steam (water vapor) this sudden and dramatic change is called a “phase transition”. Such jumping from one state to another is also known as quantum phase transitions which play a role in other areas of physics.

“Free” market capitalist economic systems exhibit quantum phase transition. If the wealth of society is substituted for the water, then wealth can quantum phase from a steam state—democracy, to a water state–oligarchy (Power in the hands of a small dominant class, the 1%). Mathematics demonstrates that this quantum phase occurs when the ratio of the wealth bias over the wealth redistribution (WB/WR) is greater than one. In other words, when the forces of wealth attained advantages (bias), exceeds the forces of democratic wealth redistribution. Wealth attained advantages are: privatization, deregulation, lower taxes for corporations and the rich, tax loopholes, corporate subsidies, inheritance, etc. Forces of redistribution are: Public services, debt forgiveness, government programs, subsidies, progressive taxation, regulations, higher wages and benefits etc.

At a particular cooling of political temperature, when the inevitable forces of inequality sufficiently weaken the forces of democratic redistribution there will be a sudden condensation of wealth to the top 1%–a phase transition to a state of oligarchy. For example in 1991 Russia suffered the politics of shock therapy economics with sudden privatization and deregulation. Russia became an oligarchy almost overnight, plunging the working class into poverty. The author states that it is “only redistribution that sets limits on inequality”. The question is: Can we escape the limits of inequality?

Continuous heat can boil away all the water resulting in a complete state of steam. The same holds true for economies of class inequality. Sustained political heat from the working classes has the potential to push not only for greater wealth redistribution, but also to reduce the wealth bias to zero and abolish any wealth advantage. This would be a quantum leap to a qualitatively new economic system of social, economic and political equality.—an Egalitarian Society.

Mathematics and Physics point the way to the possibility of —the greatest escape of all, the escape from inequality.

The problem is how do we have wealth redistribution and not become Cuba or Venezuela?
Vietnam and China are communist in name only and are much better of economically they they were say thirty years ago. Yes social democracy worked in the Nordic countries but the US is much larger in population and much less educated on a per capita basis. Also it's a matter of when not if most menial jobs will disappear. In a state like California fast food restaurants will be complely automated and we'll on their way to do do so.
Also many young people like where I work in mass transit just want to sit on their ass and take drugs. Not sure if they deserve taxpayer subsidies.
Leftyhunter
 

5fish

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There is so much in this thread but I doing to add this "Why Nations Fail: The Origins of Power, Prosperity, and Poverty " by American economists Daron Acemoglu and James Robinson. There are many historical examples in the book but I going to show this aspect... Our nation is drifting from inclusive institutions to extractive institution and it can be seem throughout this thread. The consolidation of markets into oligarchy, the rising Gini coefficient, and the rising productivity leaving workers behind. As we drift into an extraction society like Russia.... @Jim Klag , @rittmeister , @O' Be Joyful , @Wehrkraftzersetzer... I want to point out the Byzantine's were inclusive agriculture but over time it consolidating into plantations... we are a similar path...


snip... Institutions...

The decisive role for the development of countries, according to the authors, is played by institutions — a set of formal and informal rules and mechanisms for coercing individuals to comply with these rules that exist in society.[30] Acemoglu and Robinson divide institutions into two large groups: political [ru] and economic. The first regulate the distribution of powers between the various authorities in the country and the procedure for the formation of these bodies, and the second regulate the property relations of citizens. The concept of Acemoglu and Robinson consists in opposing two archetypes: the so-called. “extractive” (“extracting”, “squeezing”[31]) and “inclusive” (“including”, “uniting”[32]) economic and political institutions, which in both cases reinforce and support each other.[27][33][34][35]

Inclusive economic institutions protect the property rights of wide sections of society (not just the elite), they do not allow unjustified alienation of property, and they allow all citizens to participate in economic relations in order to make a profit. Under the conditions of such institutions, workers are interested in increasing labour productivity. The first examples of such institutions are, for example, the commenda in the Venetian Republic and patents for inventions. The long-term existence of such economic institutions, according to the authors, is impossible without inclusive political institutions that allow wide sections of society to participate in governing the country and make decisions that are beneficial to the majority.[35] These institutions that are the foundation of all modern liberal democracies. In the absence of such institutions, when political power is usurped by a small stratum of society, sooner or later it will use this power to gain economic power to attack the property rights of others, and, therefore, to destroy inclusive economic institutions.[27][33][34]


Extractive economic institutions exclude large segments of the population from the distribution of income from their own activities. They prevent everyone except the elite from benefiting from participation in economic relations, who, on the contrary, are allowed to even alienate the property of those who do not belong to the elite.[36] Examples include slavery, serfdom, and encomienda. In the context of such institutions, workers have no incentive to increase labour productivity, since all or almost all of the additional income will be withdrawn by the elite.[35] Such economic institutions are accompanied by extractive political institutions that exclude large sections of the population from governing the country and concentrate all political power in the hands of a narrow stratum of society (for example, the nobility). Examples are absolute monarchies and various types of dictatorial and totalitarian regimes, as well as authoritarian regimes with external elements of democracy (constitution and elections), which are so widespread in the modern world, where power is supported by power structures: the army, the police, and dependent courts. The very fact that there are elections in a country does not mean that its institutions cannot be classified as extractive: competition can be dishonest, candidates' opportunities and their access to the media are unequal, and voting is conducted with numerous violations, and in this case the elections are just a spectacle, the ending of which is known in advance.[8][33][34]
 

nicholls

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I don't understand why all countries in the world simply don't issue their currencies interest free? It is the best solution. The US before the American Revolution issued Colonial Script and during during the Civil War they issued the interest free Greenback. A country can finance its infrastructure and other needs without borrowing from the IMF, World Bank or even China. The colonial US, Lincoln's America and Nazi Germany are good examples of this.

To see the effect of debt-free currency, We can use examples in history to illustrate the point.



1. * The Saracen Empire forbade interest on money 1,000 years ago, and its wealth outshone Saxon Europe.

2. * Mandarin China issued its own money, interest and debt-free. Historians and collectors of art today consider those centuries to China's greatest time of wealth, culture and peace.

3. * The American Colonies issued Colonial Script, and Ben Franklin explained to the English that this was the key to the prosperity Colonies.

4. * Abraham Lincoln did it in 1863 to finance and win the Civil War.

5. * Germany issued debt-free and interest-free money from 1935 and on, accounting for its startling rise from the depression to a World power in 5 years.

Germany financed its entire government and war operation from 1935 to 1945 without gold and without debt, and it took nearly the whole Capitalist and Communist world to destroy the German power
over Europe.

Was this the real cause of World War II?

Did the International Bankers have to destroy the
Government of Germany because it issued debt and interest free money just like Lincoln did?

https://wiki.p2pfoundation.net/Colonial_Script

https://www.ukcolumn.org/article/case-greenback-pound

https://theamericanchronicle.blogspot.com/2013/09/the-real-cause-for-american-revolution.html

https://mordant-truth.weebly.com/hilter-monetary-system-real-cause-of-ww2.html
 

rittmeister

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5fish

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i don't say i endorse it but i'd like to offer sth to read
The first paraph should outrage us all.... @Jim Klag

snip...

Comparisons are odious, but some are sensational. According to Oxfam, the wealth of the world’s 10 richest individuals has risen by £400bn since the start of the pandemic. That sum could apparently vaccinate every adult on Earth, as well as restore the income lost in 2020 to the world’s poorest people.

snip...

But it is hard to quarrel with the report’s conclusion that current economic policies have enabled “a super-rich elite to amass wealth in the middle of the worst recession since the Great Depression, while billions of people are struggling to make ends meet.

snip... hopelessness

Vague Oxfam exhortations that we need to “shape more equal societies” are unlikely to get anywhere. Whatever Davos may pretend, the world does not have one government or one tax regime, let alone one ideology. Emotional rhetoric is rarely a good agency of reform – answers can lie only in details. Governments are piling massive debts on to future generations. Even if some means are found, as they surely must be, to write off the debts of the past exceptional year, more buoyant sources of national revenue will be required. The sources must lie in taxation.
 

Jim Klag

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The first paraph should outrage us all
Explain how you would change it. Rich people have always been able to take advantage of crises. People got rich during the Great Depression and both world wars.
 

rittmeister

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offroadx

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Actually I would suggest our current debt spending for socialist programs increases inequality.
 

offroadx

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The worse shakier our economy has become, drives physical assets increasingly higher as they remain one of few safe investments, my net worth has tripled since we went over 20 trillion, and continues to go up as within next 4 yrs would predict we will exceed 30 trillion. (27 now)

Hard physical assets like real estate is a gold mine, with our debt spending.
 
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Wehrkraftzersetzer

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The worse shakier our economy has become, drives physical assets increasingly higher as they remain one of few safe investments, my net worth has tripled since we went over 20 trillion, and continues to go up as within next 4 yrs would predict we will exceed 30 trillion.

Hard physical assets like real estate is a gold mine, with our debt spending
as a real person You should give any amount of money (not needed) back to Your country

I know I'm a faschitic Communist
 

offroadx

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I agree, tax cuts for the rich, big business, farm subsides etc. etc...
Agree, Covid could not come at a worse time for economy, decreased revenue from suppressed Covid economy and increased spending in relief efforts put us well past the point of any return....though most my life I had always heard 20 trillion was point of no return.
 

offroadx

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as a real person You should give any amount of money (not needed) back to Your country

I know I'm a faschitic Communist
Hmm that's not how our economy works....in a rising market you sell off bits at record prices, saving and husbanding the proceeds.....so when it collapses and prices drop from those who didn't going bankrupt, you can buy far more then what you sold cheaply.
 
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