Arkadi

do Germany and France live under socialism today?

38 posts in this topic

The US is also a Social Democratic/Mixed Economy country. There's a substantial degree of Economic Fascism in the US too. 

The US is not a free market paradise. It is MORE free market than Continental Europe but not anywhere near laissez-faire.

What metrics are you using to establish Germany as "doing better" than the US? GDP per capita? Median income adjusted for Purchasing Power Parity? Growth rates? Job creation rates?

In addition, Economic Fascism CAN result in very fast economic growth; the Asian Tiger model for instance (also Japan). No one would argue that nations CANNOT develop without full laissez-faire (I don't think any nation historically did) and no one would argue that anything short of complete laissez-faire makes development impossible. Social Democracies don't have the economic calculation problem like full-on socialist economies do. 

What makes one country grow faster than another? There are a huge number of complex policy variables which all ultimately impact growth rates and some are more impactful than others. But from what I know, Germany and Western Europe in general is extremely anemic in terms of economic growth and job creation. I'd say labor market rigidities and regulations are more damaging (in growth terms) interventions than interventions in at least some other areas. 

The short answer is that you can't just "put economies on a spectrum" of "more free to less free" (economic freedom is multidimensional/multivariate) and then presume that every economy with a similar "level" (in net terms) of economic freedom will have exactly the same growth rate. 

0

Share this post


Link to post
Share on other sites

Applying economic fascism to Germany does some oversimplifying. Indeed, thinking there is only a one-dimensional spectrum with totally free markets at one end and heavy government controls at the other does some oversimplifying. It's a useful spectrum but not the only perspective. Another dimension is cultural and common practices. 

I'm reading a book that classifies Germany as a coordinated market economy and the USA as a liberal market economy. Briefly, in a coordinated market economy activities are decided more by collaboration and less by competitive markets. Briefly, in a liberal market economy outcomes are decided more by market transactions even when cooperating. Of course, coordination can be imposed by government, but it also arises between individuals and firms and non-government institutions. 

Some differences between Germany and the USA are: 

1. Germany: Wages are set through industry-level bargains between trade unions and employer associations. Workers don't switch jobs as much and employers don't try to poach hires from their competitors as much. Finance is more institutional with closer relationships between investors/lenders and the companies they invest in/lend to. Investors/lenders have longer outlooks with less focus on short-run financial results.

2. USA: Wages are affected by a more active labor market in which employers more often poach hires from their competitors, workers are more mobile, and employers are more free to cut costs in a downturn by shedding employees. Finance is more dispersed with more decisions made by individual investors/lenders. Investors/lenders have a shorter outlook with greater focus on short-run financial results. 

0

Share this post


Link to post
Share on other sites

Gee. Bathtub economics. Just what Objectivism is all about. And America.

--Brant

Yuck

0

Share this post


Link to post
Share on other sites

It's the practical relative evaluation of two sub-optimal economies, the United States and Germany with no acknowledgement they are basically sub-optimal or why. Neither, as described, comes with a moral metric but if that were to be uncovered It's USA! USA!

--Brant

yuckedy yuck yuck

0

Share this post


Link to post
Share on other sites
1 hour ago, merjet said:

Applying economic fascism to Germany does some oversimplifying. Indeed, thinking there is only a one-dimensional spectrum with totally free markets at one end and heavy government controls at the other does some oversimplifying. It's a useful spectrum but not the only perspective. Another dimension is cultural and common practices. 

I'm reading a book that classifies Germany as a coordinated market economy and the USA as a liberal market economy. Briefly, in a coordinated market economy activities are decided more by collaboration and less by competitive markets. Briefly, in a liberal market economy outcomes are decided more by market transactions even when cooperating. Of course, coordination can be imposed by government, but it also arises between individuals and firms and non-government institutions. 

Some differences between Germany and the USA are: 

1. Germany: Wages are set through industry-level bargains between trade unions and employer associations. Workers don't switch jobs as much and employers don't try to poach hires from their competitors as much. Finance is more institutional with closer relationships between investors/lenders and the companies they invest in/lend to. Investors/lenders have longer outlooks with less focus on short-run financial results.

2. USA: Wages are affected by a more active labor market in which employers more often poach hires from their competitors, workers are more mobile, and employers are more free to cut costs in a downturn by shedding employees. Finance is more dispersed with more decisions made by individual investors/lenders. Investors/lenders have a shorter outlook with greater focus on short-run financial results. 

This sounds to me very much like Germany is more economically fascist than the USA. More "coordination" between big industry groups and unions... That is VERY corporatist. More decisions are made by large, centralized institutions. All you need to do in order to turn this "coordination" into textbook economic fascism is to have the government "encourage" (ahem) this coordination. 

A more institutionalized, more consolidated economy is a more corporatistic one. 

0

Share this post


Link to post
Share on other sites

There is a seminal difference between mere economic fascism and overt political, ideologically driven fascism which was Italy's case in the 20s, 30s and 40s.

Fascism is the implicit ideology that underlies all political fascism including Nazism and communism and, frankly, socialism. It's the rule of force. There are cultural limits country to country. Italy in the 1930s wasn't nearly as totalitarian as Nazi Germany. Nazi Germany was a more intelligent fascism than communist totalitarianism, but that's because of a higher cultural base than Russia and China. You can only do so much fucking people over so Hitler focused on the mostly hapless Jews he could get his hands on. Hitler's Germany was much more dangerous than Stalin's Russia unless he attacked Russia. That was when Germany lost WWII. The only thing that Germany could have done then was get the atom bomb. Fat chance of that it turned out.

--Brant

if it's not freedom it's fascism and how much fascism is the next question

0

Share this post


Link to post
Share on other sites

Germany, France, Britain, Canada and U.S. function under a mixed system.  Partially market based,  partially regulated by government.  Private property still exists in these States as well as private ownership of some of the means of production.  But private ownership is constrained to some degree by regulations and redistributive taxation.

0

Share this post


Link to post
Share on other sites

BaalChatzaf: "Germany, France, Britain, Canada and U.S. function under a mixed system."--yet there are striking differences as regards medical and higher education coverage.

0

Share this post


Link to post
Share on other sites
Just now, Arkadi said:

BaalChatzaf: "Germany, France, Britain, Canada and U.S. function under a mixed system."--yet there are striking differences as regards medical and higher education coverage.

the proportions of the mix differ from nation to nation.  But mixed it is.  Pure Capitalism  lives and has lived only in myth.

0

Share this post


Link to post
Share on other sites
10 hours ago, studiodekadent said:

This sounds to me very much like Germany is more economically fascist than the USA. More "coordination" between big industry groups and unions... That is VERY corporatist. More decisions are made by large, centralized institutions. All you need to do in order to turn this "coordination" into textbook economic fascism is to have the government "encourage" (ahem) this coordination. 

A more institutionalized, more consolidated economy is a more corporatistic one. 

I agree with your first sentence. Coordination in my prior post didn't refer to coordination merely by government or large institutions. Economists talk about coordination in various ways. For example: "That markets provide important institutions of coordination is widely accepted in economics. Hayek (1945, 1946, 1978) contributed to a significant extent to an understanding of how coordination is achieved through a price system, and in addition, to an explanation of how the institutions of the market evolve spontaneously (Hayek 1967).“ (Link.) This link is to a long article, but scanning it will support my claim. 

0

Share this post


Link to post
Share on other sites
21 hours ago, Arkadi said:

BaalChatzaf: this is trivially true.

Which implies that it is true.

The important thing is that rootin', tootin' Simon pure capitalism is nowhere to be found on this planet. 

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now