We're doing alright, but not as well as last year

Discussion in 'Markets & Economies' started by Jislizard, Nov 11, 2014.

  1. Jislizard

    Jislizard Well-Known Member Silver Stacker

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    [youtube]http://www.youtube.com/watch?v=BP_Y0OmlI4I#t=205[/youtube]

    Just got this email from the Australian Taxpayers Alliance, always an interesting vlog.

    This one is about the world rankings of economic freedom. Australia is in the top 10 countries for economic freedom, at number 10.

    This ranking is based on the size of the government, the amount of regulations, the monetary policies, the trade regulations, property rights.

    Last year Australia was rated at number 5.

    I have no idea how they make the rankings or how valid they are, if they are consistent from year to year then it might be significant.

    Anyway, something to watch
     
  2. Phransisku

    Phransisku Member

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    The size of government does not necessarily remove economic freedom (it might even enhance it). Interesting that it comes right in first.

    Regulations can indeed remove economic freedom but not as they put it ("the amount of regulations") as you don't measure, let's say, justice by the amount of punishments. The derivatives market, for example, is low on "the amount of regulations" but I wouldn't dare to put my money in there. I can't say it's because there's too much freedom but rather that some freedoms nullify others and therefore that specific market has become lame on the true freedom.
     
  3. C.H.

    C.H. Member Silver Stacker

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    I'd love to hear how it enhances it.

    How are some freedoms nullify the others? I sense a veiled socialist/statist approach here.
    You and everyone else has a freedom not to participate in derivative markets. Simple. No need to ban anything.

    Banks should use the true money that they don't create out of thin air while betting on derivative markets - yes. Then you'll see how fast the whole thing collapse.

    Technically they can bet with whatever money they want on it, but that money shouldn't be forced by mandate on the people.
    That's the root cause. Free the money and real money will free everyone else.
     
  4. lgf

    lgf New Member

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    Freedom is a complex subject. Different freedoms come into conflict with each other.
    Countries with poor public education, like African countries, will not force individuals to contribute to public education (or will charge a small amount), but that will keep their people ignorant and therefore, less free.

    I don't know exactly what he meant by freedoms nullifying other freedoms, but it may be related to my comment above (that different freedoms come into conflict).
    Nevertheless, I don't see a point in calling him socialist in a pejorative way. Is it a crime being socialist?
    In that specific case, I agree with you. People have the freedom not to participate in derivative markets. The only question is whether they know what they are doing. If for some reason the information available is not enough and is misguiding people, then they are not completely free. Remember, perfect competition requires perfect information.

    Regarding the video and the ranking, I wonder how they determined that. Finland's taxes can go up to 61.96% on individuals and apparently that makes them one of the most free countries. The tax revenue in Sweden (as % of GDP) is even higher and they are also wealthier.
    I think he failed completely in the point he was trying to make.
     
  5. petey

    petey Active Member Silver Stacker

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    I haven't looked at the data yet but I often wonder the same.

    Take countries that tax 0%, they never seem to end up in these reports. Is it that they are exempt, for whatever reason or just ignored?
     
  6. Phransisku

    Phransisku Member

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    You'd love to hear how it might enhance it, as it's not always the case.

    Take for example the case of Finland, which is surprisingly on the top 10 but it seems to have very big government...so big that all the education (even University) is for free. That gives the wonderful freedom for any young man to persue his own destiny no matter what it takes. In my country (Portugal), I don't have that kind of freedom. If mom and dad aren't wealthy and the University is in another region, there's no way I can spend 3-5 years studing, paying tuition and house expenses...unless I give up of my scarce free time to work on a part time job (supposing I can find one). In Finland, tuition is free and house expenses are subsidized, so everyone from 18 years old has all the conditions to leave home and start an independent life. In Portugal, the emancipating average must be around 35 years old. I wouldn't say Portugal is more free.

    If I'm a company, in Finland I will be able to recruit from thousands of talented graduates that got there because they're the best in what they do. In Portugal, I will have to content myself with people whose parents could afford the huge University costs and that got there in many cases because the same wealthy parents could also afford private lessons and private schools to do all the guidance a lazy brain could use in order to do well in the national exams (once the school grades are already granted by the school itself, since it's private and it's a business). I would consider Finland to be more free than Portugal in this case too.

    Finland's big government goes even further, granting huge discounts for students on things like transportation and 0% interest on a first house loan (for young people to more rapidly be established in life). In my opinion, this enhances freedom too.

    Yet, Finland appears on that top 10. I wonder how (after knowing the criteria)...


    I'm not socialist. I want to see free markets, free competition and people working to do a living. But that doesn't happen (in full) in neither Communism nor Capitalism. Both stand for principles that lead to some living at the expense of others, restricted competition and vicious markets. But that's a topic for another day.

    How do some freedoms nullify others? Very simple. Your right (or freedom) to be alive stands against my freedom of killing you. Your freedom to pursue your own destiny as a child that goes to school and consumes resources stands against my freedom of not paying the taxes that make it happen. Your freedom to drink clean water from a well in your terrain goes against my freedom of installing a huge factory in the neighbourhood that would pollute all the water. Your freedom of using sound money as a good and stable investment goes against my freedom of manipulating it by selling huge quantities fast and buying them back slowly.


    I wasn't referring to that. I was talking about the market itself. It's a great example of a "total freedom" environment, but I can't even find a decent opportunity to put my money in there. I feel I have zero freedom there.


    How fast? Please tell me for how many years has it lasted?


    I agree with you on that one. But that's far from enough to reach real freedom.
     
  7. col0016

    col0016 Active Member

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    The Portugese definition of freedom: The freedom to get other peoples shit for free.
     
  8. lgf

    lgf New Member

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    The Australian definition of Education (via col0016): Other people's shit.
    The opportunities should not be given to everyone. That "shit" is just for some people.
     
  9. col0016

    col0016 Active Member

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    Literally every example of freedom you gave required taking other peoples stuff and restricting their freedom.

    There is a difference between me having the freedom to act as I like, as long as I don't harm others, and me having the "freedom" to legislatively force you to pay for my stuff.
     
  10. lgf

    lgf New Member

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    I've just given one example: Public Education. Of course that requires everyone to contribute with part of their wealth and therefore slightly restrict their freedom. But that's used to provide equal opportunities for everybody. That's not only a matter of fairness; it's also a matter of freedom. If my parents aren't wealthy and can't pay my Education, I'm less free to pursue a good career.
    If you don't contribute to Public Education, you're not just acting as you like. You're harming others' freedom.
     
  11. col0016

    col0016 Active Member

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    So you're saying that people who earn below the tax threshold are harming my freedom?
    Also, it's fairly well known, in Australia at least, that public education is hardly equal. Which suburb you live in largely dictates the quality of your education.
    Since schools get paid anyway they hardly need to raise their standards because there is no real competition.
     
  12. lgf

    lgf New Member

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    A person who barely has money to eat and other basic needs not contributing to public education is harming the freedom of people who have a stable economic life? Never said that.
    Yes, public education is far from perfect in most countries. But that's not a reason to throw in the towel imo. Equal opportunities is too important to give up.
    I don't know if the solution is improving public education or subsidising private education. I guess it depends on how we build the system.
    Public education doesn't mean we can't introduce competition. You can assess schools by how well they perform on national exams and then increase the budget of good (more efficient) schools and decrease for worse (less efficient) schools.
    I have to tell you, in developed European countries public education works pretty well. At the university level, it works way better than private schools (and that's true even for less developed countries).
     
  13. col0016

    col0016 Active Member

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    So you would decrease the funding of lower performing schools, which are probably made up of poorer students while increasing the funding of more elite public schools which are probably full of students who could afford tutors...

    Without saying "social contract" can you explain to me why I'm entitled to your money?
     
  14. errol43

    errol43 New Member Silver Stacker

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    I agree 100% on derivatives...$700 quadrillion in Derivatives. :) When this comes crashing down, no amount of QE will save the banking system.

    As Paul Keating's saying goes, if this happens and it will, "GOD HELP US, GOD HELP US"

    Regards Errol 43
     
  15. lgf

    lgf New Member

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    I think you're confusing some things:
    1) I didn't talk about elite schools. I talked about more and less efficient schools. Elite schools suggests the opposite of efficient schools, indeed. Those schools which spend lots of money in a new gym are elite, but not efficient.
    We should give more money to schools which use it better (more efficiently). But I didn't say there should be a perfect correlation between performance and funding. Indeed, we should avoid a vicious cycle of better schools -> getting more funding -> getting better. So, some compensation mechanisms should also be introduced.
    2) Students should not be selected to better schools based on how wealthy their parents are, but on how much they endeavour and how well they perform.
    3) The way of measuring schools' performance may not be by simply looking at the results of the students in that year, but also looking at how they have improved with respect to the previous year. So, we would be funding schools with poorer students (in the sense of performance, not in wealth) if they were able to improve those students.
    4) With this system, schools should reach a level where having tutors would not make such a difference as it does now.

    Sure I can. All the money I (and you and everyone else) do is because I'm in a society which provided me with education, health, security and the whole structure that allowed me to work, be productive and profit. If I want to be part of this society, sell my work and profit, I should contribute to it, providing others with the same (or even better) opportunities I had. If I think that others "aren't entitled to my money", I have a simple solution: I don't integrate this society and I walk into the mountains. Or, I convince others that we should not contribute to each other's education, health, security and so on, and we all vote for that system. It's called democracy.
     
  16. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    I am ceaselessly amazed at how long this house of cards keeps standing.
     
  17. Phransisku

    Phransisku Member

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    I believe I haven't given any definition of freedom so far. I just compared 2 scennarios (Finland and Portugal) and I as an individual or I as a company feel to have more freedom in the Finland's case. For me it's obvious, but if you think it's the other way around and thus Portugal has more freedom on that case, feel free to say so and tell us why. I would love to know your arguments.
     
  18. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    +1.

    Freedom is both a good and an abused word in discussions such as this. As you have highlighted "Freedom from ..." is different to "Freedom to ...". Hence, I prefer to use rights as the basis. Everybody can hold the negative rights of life, liberty and property without conflict. In contrast, positive rights, such as the right to education, right to health care, etc cannot be held equally be all people as they automatically imply infringing on the life, liberty or property of others to supply these services.

    Economic Freedom is really about the negative rights to liberty and property - ie the right (or freedom) to use your person and property in whatever way you see fit so long as you are not infringing on other people's rights to do the same. It is a bounded "freedom to <...>" rather than an unlimited "freedom to <...>" with the bounds being that others should have the "freedom from <infringement on their rights from you exercising yours>".
     
  19. bordsilver

    bordsilver Well-Known Member Silver Stacker

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    BTW According to the list that I usually look at (by the Heritage Foundation) Finland is regarded as "mostly free" and is ranked 19th (it is 9th out of 43 in terms of the European region).

    It has high scores in terms of business freedom, property rights, and freedom from corruption. It has open markets in relation to trade and investment. The sound regulatory environment encourages entrepreneurial activity and innovation. Commercial operations are handled with transparency and speed, and corruption is perceived as almost nonexistent.

    It ranks poorly in terms of government spending, fiscal freedom and labour freedom.

    In contrast, Portugal is ranked 32 in Europe and 69 globally and classed as "moderately free".

    The top ten regions globally in 2014 are:
    Free:
    1. Hong Kong
    2. Singapore
    3. Australia
    4. Switzerland
    5. New Zealand
    6. Canada
    Mostly free:
    7. Chile
    8. Mauritius
    9. Ireland
    10. Denmark

    See http://www.heritage.org/index/ranking
     
  20. lgf

    lgf New Member

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    The right to education, health care, etc. do infringe on the life, liberty and property of all people in a society to supply these services, but they can be held equally by all people. In many European countries education is completely free of tuition fees from basic school to university. That positive right is held equally by all people.

    That's wrong again. Some people argue economic freedom is just about negative rights, but that's not consensual.
    People who ignore positive rights are just looking at part of the equation. It's like a company looking only at explicit costs (such as sunk costs) and completely ignoring implicit costs (opportunity costs). I don't think positive rights, just because they infringe on one another, should be completely ignored. There's a trade-off to be made.
    So tell me, if a 6 years old child can't pay his studies (and neither his parents), do you think he should work to pay them? Are you in favour of child labour?
    Also, do you think a 6 years old child is mature enough to understand how important education is and how that will make him freer?
    If we don't do any trade-off as you are suggesting and we take it to the extreme, then we wouldn't have neither Education/Heath, nor Military/Police/Courts. I don't wish that living hell to anybody.
    I wonder how you can't realize how ludicrous that is. Having "more money at your pocket" may sound good to a lot of people, but the consequences of that can be dramatic.
     

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