Thinking About the Economy: The Introduction

I’m currently trying to figure out how the American economy works and elaborate my own position on the economic issues. Right now, I don’t have a definitive point of view because I simply don’t possess enough information to arrive at it. In the nearest future, I will be writing a series of posts that will record my attempts to create my personal approach to the issues of economy.  This series will be titled “Thinking About the Economy.”

For the most part, I’m not content with how the Liberal sources I access deal with the economic issues. Back in the Soviet Union, we were all really unhappy with the kind of economy we had. For us, everything that wasn’t similar to the only system we knew and abhorred had to be perfect. The logic behind this was that if the system we are familiar with sucks, then its exact opposite should be great. So we all worshiped capitalism as some kind of a paradise where everybody is rich, has cars, yachts and houses and is happy beyond belief.

In 1991, we were dragged by history through a rapid transition to capitalism. For many people, their first encounter with capitalism was deeply traumatic. We discovered that capitalism brought about very visible income inequalities (they always existed in the USSR, of course, but were often concealed from view), the need to offer yourself on the job market, compete and suffer rejection, the necessity to work really hard with no promise of success, the possibility of indigence that was hard to tolerate when you could see your neighbor getting rich and buying diamonds as a matter of course.

Many of us discovered they couldn’t deal with the new reality. Instead of offering us instant riches, capitalism brought many harsh demands that many people were not equipped to meet. The rewards seemed distant and the need to disinter the skills of entrepreneurship and hard work that had been beaten out of us over the decades of Communism was painful.

The reason why I’m telling you all this is that I see a very similar tendency currently at work in the US. People are only familiar with a single economic system, capitalism. They see its defects and believe that what’s needed is the exact opposite. I find this approach to the economy to be naive. Nothing annoys me more than arm-chair Marxists who believe they are militate on behalf of some vaguely defined proletariat they rarely even see.

When I say that collective ownership of the means of production results in an almost instant impoverishment of the population on a scale that Americans cannot even begin to imagine today, I speak from experience. I know that my experience of a person who grew up in the Soviet Union is not fashionable in the intellectual Liberal circles. Nobody wants to hear anything that contradicts their pipe-dream of Communism and socialism.

In the Soviet Union, whenever we heard that there was racism or poverty in the US, we always concluded that it was all just Cold War propaganda. Liberal Americans still believe that everything negative they heard about the USSR was propaganda that doesn’t contain a grain of truth. They seem to need this belief in order to continue engaging in their sad little Marxist fantasies.

I, however, am not prepared to relinquish my own memories for the sake of spoilt rich American kids of pseudo-Liberal persuasion. I want to look for my own understanding of the economy and I don’t care how offended people are that my search subverts their cherished pieties.

23 thoughts on “Thinking About the Economy: The Introduction”

  1. Does anyone believe in a Soviet style centrally-planned economy any more? That really sounds like a bit of a straw man to me… for goodness sake, not even the Chinese Communist Party believes in that any more!

    There’s a lot of debate around about how to manage capitalism at the moment, since we’ve been having big problems dealing with some of it’s flaws recently, but it’s the same as with democracy: it’s the least worst option available to us, so there will always be a debate about how to modify so that it functions better.

    (btw – in the real world “liberal economics” or “economic liberalism” is what you find in The Economist magazine.)

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    1. “Does anyone believe in a Soviet style centrally-planned economy any more”

      -The government of the United States seems to. The 2008 bailouts were as Soviet-style as anything I’ve ever seen. The “too big to fail” philosophy was borrowed straight from the USSR.

      I’m not talking about the centrally-planned economy here, however. I’m talking more about the difference between individually owned and collectively owned means of production.

      “There’s a lot of debate around about how to manage capitalism at the moment, since we’ve been having big problems dealing with some of it’s flaws recently, but it’s the same as with democracy: it’s the least worst option available to us, so there will always be a debate about how to modify so that it functions better.”

      -This is a position I share fully. What I don’t share is the dogmatic fixation on Marxism that is very much present in the US academia.

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      1. “I’m not talking about the centrally-planned economy here, however. I’m talking more about the difference between individually owned and collectively owned means of production.”

        there are very few means of production that are individually owned, almost all of them are collectively owned by some kind of public or private corporation.

        Fortunately for you there is (almost) no Marxism in Economics departments.

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        1. From what I remember, over half of the US private GDP comes from small business.

          Family owned businesses are over 80% of all businesses in the US. And, if I’m not mistaken, they also create the absolute majority of new jobs in this country.

          Does anybody have competing information?

          I believe that the individual entrepreneurship and small family businesses are absolutely the backbone of every healthy economy. In my next post, I will address the issues that face small business owners and individual entrepreneurs in Canada.

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          1. as far as I understand the US terminology any kind of private company which isn’t a partnership or a sole ownership is counted as a “corporation”. It depends you define a “family business” – they can be corporations too. I have nothing against corporations or whatever other kind of limited liability companies exist in any particular jurisdiction.
            I’m just pointing out it’s more complicated than individual vs collective ownership – and even if you are a sole-proprietor you probably need to use investment capital that belongs to lots of other people via a bank.

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  2. I think (from my lowly point of view at the bottom of the middle class) the power of credit scores in our economy is underestimated, especially by people who didn’t grow up in this system. When I discuss my financial life with my European friends, we end up talking in circles because they don’t understand how much my credit score rules my life – my ability to get credit for school, emergencies, or even eventually someday a house. So the solutions they have to difficult financial situations are things that wouldn’t work here at all.

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    1. Oh yes. Yes, yes, yes. Credit scores and all the attendant insanity. One of the posts in this new series will definitely be about them. I also had no clue about how that whole thing worked before I emigrated. I’m still finding out new and shocking things about the credit system.

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  3. A piece on credit scores would be wonderful.

    In the meanwhile, Clarissa, as two people who grew up in ideologically similar but culturally different Communist regimes (our Communist government topped only three months back — it is still a bit unreal for me, not seeing the comrades in charge of absolutely everything), I find it fascinating how differently we approach the economic ideologies of the US. I think our differences are tempered by the fact that Bengal Communism, with competing Marxist and Maoist ideologies, was forced to function within the democratic socialism of a deeply centralised Indian state. So, for example, our Communist government couldn’t transfer anyone but direct state employees as they pleased, or make working at set wages mandatory for everyone, or even make voting compulsory and enforceable.

    Unlike the ‘pseudo-liberals’ you appear to have encountered in the US, I am entirely pro-capitalism, since there is absolutely no conceivable way in which we could rid ourselves of it and still have a viable alternative model of production and exchange. However, I find the current model of corporate capitalism completely out of tune with my idea of what a healthy capitalist environment should be.

    On a lighter note, have you ever read my piece on Communism shaping life in Bengal? This piece was written this time last year, and even then the toppling of the regime seemed an unrealistic dream. More power to a electoral democracy 🙂

    http://priyankanandy.com/2009/08/10/coming-to-the-party/

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    1. “Unlike the ‘pseudo-liberals’ you appear to have encountered in the US, I am entirely pro-capitalism, since there is absolutely no conceivable way in which we could rid ourselves of it and still have a viable alternative model of production and exchange. However, I find the current model of corporate capitalism completely out of tune with my idea of what a healthy capitalist environment should be.”

      -I couldn’t agree more.

      After reading the post you linked to I now want to travel to India.

      Have you considered writing fiction?

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      1. Thank you. I have, but I haven’t the patience 🙂 Having a blog with a few readers is good enough for me. I keep hoping some of your lovely readers will hop over.

        Have you ever considered fiction (apart from translating the family-novel)?

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        1. The problem for me is that I’m autistic and we can’t lie. So I can’t invent anything. A plot, characters – I just can’t come up with a story. I can faithfully narrate what I see, which makes blogging my medium.

          Besides, I don’t have a language of my own. So that complicates everything.

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          1. One of these days I will walk into a pyschiatrists office and demand he run me through all kinds of aspie spectrum tests. The more you speak about autistic attributes, the more “Whoa!” I go.

            I can’t make stuff up either.BUT, if someone gives me a structure, I can tear it down and recreate it and it will be all new and almost unrecognisable… but I can’t do this from scratch. No imagination.

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          2. If by language of your own, you mean the unique “voice” that authors are supposed to have…..ohh yeah you totally do. I feel like I could recognize something you write a mile away 🙂

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            1. Elizabeth :

              If by language of your own, you mean the unique “voice” that authors are supposed to have…..ohh yeah you totally do. I feel like I could recognize something you write a mile away :)

              Oh, thank you!!! That’s the best thing you could have said to me. Oh. Oh. I feel very happy right now. I feel like a just grew a couple of inches. 🙂

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    1. This is a really good point, because, from over here in libertarian think tank land, there is a lot of major conflating of any kind of regulation with Marxism. Come to think of it, taxes to most of these people are a Marxist conspiracy, too. But this is a gross misrepresentation of how progressives see regulation and taxation — point being that most progressives are pro capitalist but also pro regulation and taxation. It is important to remember that regulations on purely “free” markets are what gave us labor unions, 8-hour work days, a minimum wage, anti-discrimination policies, environmental protections, workplace safety standards, and many other good things And taxation … that’s a whole other post. But, to talk about regulation and taxation is NOT the same as talking about collectivizing the economy. Which is important to emphasize because the way the Right does regularly (and sometimes, I suspect, deliberately) conflate regulation and taxation with Marxism is an effective rhetorical strategy for getting a great many “red state” voters — including many small business owners and owners of small family farms — to vote against their own economic best interests for politicians and policies that favor corporate capitalism.

      Great subject for discussion! I’m looking forward to the upcoming posts in this series.

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        1. Oh yes, I know that, of course 🙂

          Listening to the rhetoric over here all day, though, I feel compelled to point out the crosscurrents. Very few people in my office think Obama is a Marxist, either, but they’re more than happy to exploit that rhetoric to achieve their own ends

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