The Lack of Major Wars May Be Hurting Economic Growth [NY Times]

Discussion in 'Markets & Economies' started by SpacePete, Jun 15, 2014.

  1. hawkeye

    hawkeye New Member Silver Stacker

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    This is just a semantical trick to make us believe that we are in charge. Why would these people go to the lengths that they do and be so eager to be servants? Why would someone like Tony Abbott be so eager to be a servant?

    It's 1984 style doublespeak. Designed to hide the truth.

    It all comes down to the monetary and banking system to me. The huge imbalances that we see on a national basis are not the only imbalances. It goes right down to the individual level as well. What was created at the Bretton Woods conference after WW2 was never meant to be a level playing field. That's what needs to be urgently addressed. And the thing is, I don't think the politicians can address it. I don't think there is a solution on the political level.

    What happens in our domestic political systems, I would say most of the actions of our governments, are in a desperate attempt to right these imbalances. But the house was built on shifting sands. The cracks in the walls are only getting wider and the actions of governments, even when they are trying to do the right thing, are ultimately futile in the face of it. In fact, more often than not, they create further problems when trying to solve something which when they attempt to fix the new problems creates even further problems. All the while government necessarily grows as a result.

    The foundations have to be solid and that's the end of the story really.
     
  2. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    That's cordial of you, contrast that with Hoppe's view of politicians:

    Hans-Hermann Hoppe, "The economics of Ethics and Private Property" 2nd Ed, p396.
     
  3. hawkeye

    hawkeye New Member Silver Stacker

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    :lol:

    I was trying to get a certain idea across, but you are right in that it probably looks like I am letting politicians off the hook.

    I don't believe they are to a man bad, many will go into the situation with misguided ideals because they have only ever heard all the propaganda about government. Once they are there though, it is either join in the corruption or get chewed up by the machine.

    Maybe a better way of putting it would be that the population demands that government rights the imbalances even though they can't. And then the government tries to at least sometimes do what the population wants. That it is the general population who are mostly misguided about the government and what it's capabilities are. The experienced members of government realise that the population can't be pleased and just do it for themselves and their cronies.

    I feel like we've talked about these things somewhere else...
     
  4. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Okey dokey, I've got some PPP data from a few countries, just trying to find any correlation. I've chosen 2 victors in the 2 major wars (WW1 and WW2) and one of the losers, and I've chosen a country that would be difficult to describe as either a winner or loser (it would depend which side you were on I guess, I don't really know) from a modern war, Bosnia-Herzegovina.

    My rationale for choosing Australia should be obvious, I chose the States because it is the wealthiest country, I could have chosen Japan instead of Germany I suppose and instead of Bosnia I was going to choose Sth Korea or Vietnam but the graph for both countries was unremarkable - I could have chosen Iraq I suppose or Afghanistan but I didn't. The data for these countries are available at http://www.gapminder.org/ just do a search for PPP and have a play. Make sure you choose LIN instead of LOG otherwise the image can be a bit misleading.

    Basically I was looking for any evidence that supports the claim that war assists economic growth. I'll mention Germany because it is obvious that war had a devastating impact upon the prosperity of the nation, yet, during the war years for both WW1 and WW2 there wasn't a great deal of difference between the level of prosperity at the start of the war and at the end, most damage occurred (to incomes) once the wars were over, but it was only short lived and incomes began to rise steadily and within a decade they were back approximately at pre-war levels.

    If we look at WW2 for both the US and Australia we see a period of rapid growth for the first few years, and then a period of decline in incomes before the war ends. In the post war years incomes continue to decline very slightly (but not to below pre-war levels) and it takes about a decade before they begin to rise quickly.

    The effect of the war in Bosnia was a decline in income levels (below pre-war levels), but then a surge immediately post-war in the decade that followed.

    What conclusions can be drawn?

    1. War can retard economic growth (Bosnia, Germany, WW1 Australia, last years of WW2 for both the US and Australia.)
    2. Any surge in economic growth as a result of war, is nearly matched by a corresponding decline in economic progression in the years immediately following a war (WW1 and WW2 for the US and WW2 for Australia).
    3. Peace times provide the best opportunity for economic advancement.

    Does the data support the hypothesis that a lack of major wars may be hurting economic growth? No.

    Does the data suggest that wars assist economic growth? For a short period in some cases yes (ie US and Aus, so I must concede some ground to BeHereNow - but not much ;) ), but the data suggests that as a war draws near to an end, the economic conditions in such countries begins to decline.

    Is the increase in prosperity and economic growth attributed to war sustainable? No.

    It's probably easiest to to download each image , then you can open them up and compare them at once.

    I acknowledge that all the above is just an amateur attempt at trying to piece together some info.* :lol:

    [imgz=http://forums.silverstackers.com/uploads/753_australia.png][​IMG][/imgz]

    [imgz=http://forums.silverstackers.com/uploads/753_usa.png][​IMG][/imgz]

    [imgz=http://forums.silverstackers.com/uploads/753_germany.png][​IMG][/imgz]

    [imgz=http://forums.silverstackers.com/uploads/753_bosnia.png][​IMG][/imgz]

    *Edit to add, and my wife is going WTF???????
     
  5. BeHereNow

    BeHereNow New Member

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    I stand corrected.
    After doing some research I amend my statement to:

    "When 5% of the populations own over 60% of the net wealth, it seems to me it is just about impossible to improve the economic standing of society, without the top 5% getting the major portion." (The top 20% own over 80%)
    That should be something you would not disagree with.

    One source says the top 5% own 88% of the NET wealth.
    http://stateofworkingamerica.org/files/book/Chapter6-Wealth.pdf

    I believe the numbers I remember were based on gross wealth.
    That would have been before the existence of google, no way to check.

    The ones who control wealth are the ones who have title, not the creditors.
    There are good reasons to consider only net, and good reason to consider who controls.
    In todays world, we consider net wealth, and so will I.
     
  6. BeHereNow

    BeHereNow New Member

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    There it is.

    Yet we do seem to disagree, possibly on this point:
    With the USA, capitalism wants new markets, and Business happily supports war efforts to expand the role of our government in other lands.
    A double benefit of profit outfitting the war machine at home, and 'conquest' of new lands, opening new markets.
    An attitude of 'Government is bad, but we think we can see a way to make a profit from it, so we'll take the bad with the good.'
    Capitalism may be the best economic system, but it is not perfect.

    Capitalism, as a pure discipline, is amoral. Profit is the goal, the means is incidental. Thankfully most capitalists have morals, that they get from somewhere else, and this guides their economic activity.
    For many, these morals do little to discourage war, in the guise of freedom and liberty.
    Traditionally in the US, the hawks are 'capitalist leaning', and the doves are 'socialist leaning'.

    What I see is the US happily supporting a 'free people', permitted to determine their own destiny by the power of the vote, until they do not like the majority view.

    Some groups of people, the majority in some countries, want to decide not only their own laws and religions, but that of the rest of the world as well.
    I would like to see them corralled onto one piece of ground, until they wore out their welcome on planet earth, and the problem were eliminated, quickly, by a unified effort.
    I think this would bring new prosperity to many, but JMHO.
     
  7. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    I have absolutely no idea what you are trying to say. None at all.
     
  8. BeHereNow

    BeHereNow New Member

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    I have no idea why you are confused. None at all.
     
  9. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    Because you seem to be moralising after whining about others moralising rather than focussing on the economics. If so then it's quite incoherent.
     
  10. BeHereNow

    BeHereNow New Member

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    Ah, that explains it.
    Yes, based on that perspective, quite incoherent.
    I was not continuing the discussion/argument. Just commenting on some things, my apologies.

    Where we were, is where we are, no surprise.

    My personal life is becoming very busy, all good, but very busy.

    Cheers
     
  11. l***g

    l***g Active Member Silver Stacker

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    Kinky sex makes the world go round
     
  12. renovator

    renovator Well-Known Member

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    huh ? That post is a bit strange . Kinda like asking someone wats the price of eggs & they answer "conductivity "
     
  13. l***g

    l***g Active Member Silver Stacker

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    Maybe try google? or this link

    http://youtu.be/c9hYAQQFsoc
     
  14. renovator

    renovator Well-Known Member

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    youtu.be ? not likely
     
  15. Lovey80

    Lovey80 Well-Known Member

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    When you think about it more closely there is only negatives in that graph. When the war began it firstly wouldn't have been round fiscal years so lots would over lap. But remembering that a 50% loss in your stock portfolio in a given year requires a 100% gain in the following year just to break even. So that large spike in GDP would have been coming off of a very low base and even added on top of each other most certainly would not equal to the base line GDP figures of the year before the war started. Add to that significant amounts of money coming from the American and private companies that flew in to support the ongoing war effort would drive those figures up in a un-transparent way.

    Even when I was there from the start of 2008, Iraq had huge power problems. Huge areas were lucky to get two hours of power in a single day. In Ramadi - AL-Anbar province (that just happens to be currently controlled by ISIS) one of the major factories in the area was a glass factory. When the bombs started dropping everyone fled. Imagine a full operating liquid glass factory abandoned mid shift. Of course the factory was stuffed and was going to require huge amounts of time and dollars to get operating again. Im still not sure it is operating even today.

    But back to the original point. If Australia's economy halved tomorrow from say 1.3trillion this year to say 650m next year and the following year we had a 30% jump to say 850m.......No one who was alive in the 1.trillion year would be celebrating the 850m figure and single digit growth after that.
     

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