Economics in Revolt!

Richard Wilkinson discusses the societal harms caused by income...

Sun, 29 Jan 2012 13:26:56 -0500

Richard Wilkinson discusses the societal harms caused by income disparity. What is incredibly interesting though — is the implication of the data he presents. Societal problems, specifically mental illness and childhood wellbeing, is directly correlated to relative inequality. Wilkinson suggests that GDP per capita is actually less important than the magnitude of inequality within each country.

Countries like the UK, Portugal, Singapore and … the United States have almost 2x the relative income inequality as other developed nations, leading to higher rates of mental illness, obesity, and crime.

Prosperity and Violence by Robert Bates

Thu, 08 Sep 2011 13:13:59 -0400

The ability to survive politically depends upon the capacity of others to produce economically.

Robert H. Bates

The formation of societies is a tricky business. On one hand, the power granted allows the ruling class the ability to impart policies that support economic growth and prosperity.

On the other, political directives ensure stability and security necessary for continued investment in the economic landscape.

Robert Bates’ thesis stems from a historical perspective of the economic and political development of societies. Since the beginning of human history, basic societies have formed rules and structure around the idea that in order to grow, groups must invest in new ventures and delay gratification of gains. However to justify such investments, the community must be willing to protect such investments by whatever means necessary.

It’s the application of practical portfolio theory. In order to invest, the investor(s) must be compensated for their risk of capital. In olden times, communities sought to mitigate their risk through the threat of force, in the same way that today’s governments enforce retribution through renumeration and incarceration.

The development of societies, both economically and politically, is fascinating. When hearing Bates’ description of William of Orange’s clever assumption of the English throne, one cannot help but be impressed with his ability (and sacrifice of power/ego) to restructure the government into a parliamentary system that could both finance and check his war campaigns, thereby provided assurances to merchants and the capital holders (Bates, Prosperity and Violence, p. 80).

Considering the imbalance of developed and developing economies today, it is even more interesting to consider the incendiary nature of political change. Bates specifically focuses on the post-Cold War era as a gauge of how unfavorable economic conditions provide an unstable foundation for political leadership. As one example, Bates turns to Kathryn Firmin-Sellers’ story of Nana Offori Atta, a cheiftan of the Akyem Abuakwa tribe, who implemented a system of checks on his power to assure capital investors of his limitations and ability to usurp their resources, leading to development and prosperity from the cocoa farms of his tribe.

However, Bates points to Ghana’s first President after independence who in his own efforts to grow the development of Ghana’s industries, instituted a state-run monopoly on the cocoa business and heavily taxed farmers to finance growth in other industries. President Nkrumah’s detrimental economic policies spawned violent opposition from many tribes including the Akyem Abuakwa and led to the “withdrawal of capital from farming, to a decline in the production of cash crops, and to the impoverishment of Ghana.”

Bates’ deep examples of economic and political development stress the importance of policy incentives for the international and domestic community to put capital to work. His primary focus on the political insurrections that followed the end of the Cold War point to the need for capital as the incendiary event that started the predisposition of emerging countries towards democracy and the political orientation of the western nations. Bates argues that these countries needed international capital that the U.S. and other democracies could supply, so by reorienting their governments to mirror those industries they were able to institute policies that supported economic liberty for those in the country who could create wealth, protect the assets of those who had accumulated wealth, and even in some cases promote the power of the military as a driver to promote and protect new industries.

Prosperity and Violence points to examples of violence and political insurrection as a necessary tool to promote fair and encouraging economic policies. Coersion, as Bates states, is the mechanism by which societies are able to defend and secure capital investments. What economic preconditions lead to political revolt? As Bates and many economists point to – protectionist policies that do not promote putting capital in to the hands of the most productive entities and violent dictators that threaten the likelihood of future gains are at risk to be overthrown or met with an equal or greater force.

"Distributed wealth reduces the pressure for redistribution of wealth, which stares us in the face as..."

Mon, 21 Mar 2011 00:31:21 -0400

“Distributed wealth reduces the pressure for redistribution of wealth, which stares us in the face as automation accelerates and education stagnates.”

- From a post on greentechmedia.com, the author was describing the need for energy independence and arguing for homeowners and businesses owning their own generation assets (renewables and even potentially nuclear). The quote sparked my interest though, because if everyone owns their own method for generating (energy or wealth) then the chances of war (for oil or land) and general political instability are greatly reduced.

In an economy where everyone is able to produce for themselves and sustain a relatively comfortable lifestyle, then everyone has something to lose.

"Upper classes are a nation’s past; the middle class is its future."

Wed, 02 Jun 2010 18:11:09 -0400

“Upper classes are a nation’s past; the middle class is its future.”

- Ayn Rand

So many economic insolvencies have occurred in the past few...

Thu, 13 May 2010 23:25:00 -0400

So many economic insolvencies have occurred in the past few years, could America have a revolution on its hands?

In a time of significant change, what are our nation's brightest minds to do?

Tue, 23 Mar 2010 13:14:58 -0400

I am a huge fan of Atlas Shrugged. Last night, my friend and I were talking about Dagny Taggart’s plight. How do you save your nation as it crumbles down upon you? When is it time to leave and join John Galt and the other industrialists?

I’m looking for real-life examples of people who have stayed and tried to fight for/against a political change in times of economic turmoil. Or, if there are great success stories of when people abandon, I’d love to hear your insights.

Timeline of Historic Inventions

Tue, 16 Mar 2010 14:09:00 -0400

Timeline of Historic Inventions:

Here’s a cool wiki showing the inventions over time… and yes since the dawn of time. It’s interesting seeing what inventions sprung up during unstable periods of history — virtually no innovation occurs in an area during a state of panic or war. Understandable, it’s really hard to focus on inventing the horse collar when the Visigoths are molesting your sister.

"I insisted that our Cause could not expect me to become a nun and that the movement would not be..."

Mon, 08 Mar 2010 23:17:00 -0500

“I insisted that our Cause could not expect me to become a nun and that the movement would not be turned into a cloister. If it meant that, I did not want it… If I can’t dance, I don’t want to be part in your revolution.”

- Emma Goldman

I’ve been reading a lot about “Red Emma” and a number of other radical females. I’m particularly intrigued by the aggressiveness exhibited by Emma and how quickly she was able to change her situation (from factory girl to dissident journalist). Perhaps it is her legacy that is most shocking though, for as a result her championing the Anarchy movement, it still remains a taboo revolutionary alternative in the United States… merely mentioning Anarchy conjures images of violent, young people eager to destroy civilization as we know it. The Queen of the Anarchists sure new how to make a splash.

For further reading, check out Streitmatter’s book.

The Pop Culture Answer to the Problem

Mon, 08 Mar 2010 23:15:21 -0500

The Pop Culture Answer to the Problem

Which revolution was most impactful on its nation's economy?

Mon, 08 Mar 2010 22:57:00 -0500

Pick one of the following or recommend your own!

Iranian Revolution (1979)

French Revolution (late 18th Century)

Bolshevik Revolution (1917)

American Revolution (1775)

Haitian Revolution (1791)

Cuban Revolution (1953)

The Chinese Revolution (1911/1949)

The Fall of Rome (476/1453)

Update:: currently looking more into the Brazilian economic situation in the 1970s/1980s… thoughts?

Pre-Cuban Revolution Economics

Sun, 07 Mar 2010 15:51:12 -0500

Paul Walcutt: I would like to know what the economic situation was in Cuba from before the revolution of Fidel Castro. And can you give me some sites where this is also described?

Eric Williams (author of From Columbus to Castro: The History of the Caribbean 1492-1969, Vintage Books, New York, 1984): The economy was directly tied to the international price of sugar. US business interests owned 75% of the arable land on the island before 1959 and controlled 40% of the country's sugar production. Thsi more or less made Cuba a economic colony of the US with Bautista as the puppet leader. This relationship led to the widespread popular support amongst Cubans who gravitated towards Castro's movement.

http://www.historyofcuba.com/cuba.htm

If I was going to write a book, it seems someone has beat me to the punch.

Sun, 07 Mar 2010 15:44:00 -0500

If I was going to write a book, it seems someone has beat me to the punch.:

A book by the title of Revolutionary Economics… I’ll have to notify Amazon.

Look at that handsome mug. Ya boy, Karl Marx.

Sun, 07 Mar 2010 15:41:34 -0500

Look at that handsome mug. Ya boy, Karl Marx.

Mises Economics Blog Talks American Revolution

Sun, 07 Mar 2010 15:19:18 -0500

Mises Economics Blog Talks American Revolution

Photo

Sun, 07 Mar 2010 15:16:59 -0500

What are the preconditions for maintaining a capitalist society?

Wed, 03 Mar 2010 18:47:46 -0500

After major economic crisis, many societies morph into a socialist or communist community. What is it that has kept the U.S. from easily slipping down the same path?

"Our inequality materializes our upper class, vulgarizes our middle class, brutalizes our lower..."

Wed, 03 Mar 2010 18:40:53 -0500

““Our inequality materializes our upper class, vulgarizes our middle class, brutalizes our lower class.””

- Matthew Arnold (1822-1888)

"An imbalance between rich and poor is the oldest and most fatal ailment of all republics."

Wed, 03 Mar 2010 18:38:40 -0500

““An imbalance between rich and poor is the oldest and most fatal ailment of all republics.””

- Plutarch

Caption reads, “Interesting. The gap between rich and...

Wed, 03 Mar 2010 18:32:02 -0500

Caption reads, “Interesting. The gap between rich and poor is not as great as we thought.