Your analysis on why the third world lags behind is shitty


If there is anything that annoys me intellectually the most, is when people give  the apparent well-greased functioning of the Global North as evidence that the Global South should follow the steps of the former.   It sometimes comes in the form of immigrants and exiles  from the periphery or the former socialist bloc, who are often quite ignorant of the source of the dysfunctionalities of their former homes, and simply think these problems are related to very abstract and  cosmetic differences between let’s say, Venezuela and Canada.   For example, I recently saw a blog post claiming how Hayek showed that the pauperization of Venezuela is related to the socialist calculation problem!  To this person, it seems that Venezuela tanked due to not satisfying some extremely abstract and formal philosophical requirements, such as letting price signals decide the allocation of goods. Yet, Venezuela “on paper” is very similar to european, social democratic states like the scandinavian countries, the latter which are  much more livable and successful. Therefore its problems are not really related to liberal or libertarian canards, but very concrete issues embedded in the venezuelan social fiber that probably pre-date capitalism or “socialism”, which make Venezuela much more miserable than Scandinavia, even if both’s policies seem very similar abstractly, “on paper”.

Popular and pundit analyses about the deficiencies of the periphery, especially on countries that have  leftist administrations, often contain very little about the concrete microphysics of these states.  For example, they almost never speak about the existence in the periphery of pre-capitalist social formations that impede the rise of rule of law and transparent institutions. Some of these social formations are: (i) Patron-client relations, where loyalties between different factions and groups are mediated through the exchange of services and goods, at the expense of loyalty to the state, law and public  institutions. (ii) Cultural issues, such as different approaches to work, time, nature and communalism, that impedes the formation of an “efficient” proletariat.  (iii) Lack of capital intensive technologies in the periphery that make one hour of labor time much less efficient than the same hour in the core.  (iv) Finally, the  asymmetric position of the periphery in the global economic order is probably the most important source of immiseration, where peripheral countries cannot run deficits as large as Canada or the United States to fund social programs, and instead are at mercy of the boom and busts of whatever raw materials they use to finance their social spending.

The sumtotal of the the above  outlined conditions will lead to to a large gap between the periphery and the core, and these conditions are not only a matter of policy, but slow moving, historical averages that are frozen into the social fiber of these countries and that cannot be uprooted easily without some sort of incredible violence.  Much of the economic advantage seen in, for example Canada, is a function of an extreme bloodletting  that lead to the destruction of First Nation social consciousness, in order to supplant it with anglo-saxon approaches on law, private property, and work, turning Canada essentially into the fevered labor camp imagined by the spiritless  automatas of Protestantism.  In the case of Latin America, such as  in southern Mexico, many indigenous nations have not forgotten who they are,  their pre-capitalist memories, although transformed by the centuries long existence  of private property, presidents and Kings, still form an impediment for the smooth functioning of the capitalist economy. For better or worse, this existence of ancient modes of life hamper the efficient realization of the capitalist clockwork we see in the core economies.

Curiously, this abstract disease of western liberals that make them unable to fathom the concrete causes of the periphery’s misery, is shared by western leftists as well.    For example, many leftists believe the common anti-communist canard that the Soviet Union collapsed due to the abstract constraints of a “planned economy”, In other words, that the conditions of the USSR’s lag were related to formal failures in the idea of a planned economy  – i.e. Hayek’s argument that planners will never be as efficient at allocating goods  as price signals.  However the collapse of the USSR was probably related to concrete, social microphysics that were a combination of Russian social forms that pre-dated socialism as well to dysfunctionalities that emerged due to the USSR’s need to defend themselves militarily from a hostile and more economically powerful west.  In fact, some left historians and sociologists (e.g. Fitzer, Ticktin ) have pointed out that these unique conditions created degenerative laws, such as various factions of the bureaucracy scamming, lying, and conning each other which lead to the manufacturing of shoddy, unusable goods,  artificially  tight labor markets, incredible waste, terror and authoritarianism, opacity of information, “planless” planning, and ultimately, collapse.  These conditions outlined are not simply the product of “formal” arguments about economic calculations, but a function of the concrete historical trajectory that predated the creation of the USSR.

Another example of a leftist version of the disease of abstraction lies in the Keynesian/post-Keynesian hegemony in leftist economic thinking. Much of Keynesoid arguments, such as  running large deficits, printing extra money, and the state patching unemployment through the generation of public sector jobs, assume that states have monetary, material, and food sovereignty – that the supply of money and accrual of debt is not constrained by the productive bottle-necks in the agricultural  and manufacturing sectors. These idealized conditions essentially assume the generalization  of labor camp-like relations and homo economicus in all relevant countries. Yet these idealized conditions essentially exist only in a handful of imperialist countries (e.g. United States, and Canada) and not in countries that actually have or had real leftist administrations (Venezuela, Brazil).

Curiously, the partisans of these neurotic abstractions claim the mantle of realism and pragmatism, given that they assume that the triumph of the core economies stand as empirical evidence of their arguments.  It’s a methodology that fits quite well with the anglo-saxon theory-less barbarism of correlation coefficients and tables.  This disease has led to to many Leftists pursue weak-kneed programs such as market socialism, big tentism, and slow gradualism. However the concrete issues of the periphery, such as the lack of material and monetary sovereignty, should raise questions against this cowardly and short-sighted programs. If anything, we must look beyond the nation-state and the market, and find scientific ways of administering and planning the planetary economy in order to destroy imperialism, avoid ecological collapse, and create a world where african, european, and latino workers take reign of their destiny collectively and in an internationalist way.  We must present an alternative to the present, the latter which is  rendered under the stochastic whims of the  capitalist, headless automata.



4 thoughts on “Your analysis on why the third world lags behind is shitty

  1. This was a very inspiring speech. But, what you are asking is difficult. The reason that it is difficult is that we can not see where it will lead. I believe that I have the courage to take small risks and make small sacrifices. But I doubt that I have the courage to volunteer to take large risks or or make large sacrifices. If there are people who could actually act on our behalf we can not say to them, Ok when political economic decisions are being made correctly taking everything in to account, including sustainability,
    the people of the perhipery will be collectively 15% better off and the people of the core will be collectively 35% worse off. There is no guarantee that the numbers will be this good. If we continue as we are now there is an X% chance that those in the perhipery will be 75% worse off and and X% chance that they will all die trying to escape their circumstances. While there is an X% that those in the core will collectively be only 10 to 15% worse off and an X% chance that they will all die as well, and there might even be some tiny chance that they will be better off in the future if we do nothing. We are asking and praying that someone be willing to take a huge risk and make a huge sacrifice.
    Therefore anyone who could be capable of acting on our behalf would certianly be tempted to do nothing as they will be held responsible for a future in which we and they are damned if they do and damned if they don’t. The only hope that we have is that some of come to the conclusion, I do not give a fuck anymore whether or not I am cursed like Judas or Pontius Pilot for all future generations. Because even though I do not have much hope that I and we can navigate mankind safely through the problems ahead, that small amount of confidence that I have in myself is a huge amount larger than the confidence that I have in those that have been running things up to now.


  2. Your comments leave us with the implication that restraint is an important principle. Why should Americans who are at the top of thier economic pymarid always have the best? I would like to apply the idea of restraint to the health care system.
    If the USA has a single payer system the contribution is going to have to be high. Doctors salaries are going to have to be low. Doctors are going to have to decide if they want to be doctors because they want to help people or they want to have be able to drive a Mercedes to a Golf course after work. Even with low doctor salaries a lot of medical equipment is used in modern medicine and a lot of proceedures are carried out to prevnt the spread of containments among patients. Good average medical care is not cheap. Therefore to partially (mostly) cover everyones medical costs the payrole deduction will have to be around 14% of a persons before tax salary. Is it neccessary for me to break it down for you or the readers or do you think that they can do the math themselves? Now we could try to hide that by making emploYERS pay half but then that means that employeers whether they be privately owned companies or nationalized companies will have less money to pay out in salaries.
    Now of course it does not neccissarily have to be a flat rate deduction. Flat rate is cetianly better than a regressive rate which the USA has now as deductions are not tied to earnings at all making it much easier for high income families to pay the monthly fees. Germany uses a flat rate deduction, until a high level of income is reached. But I have not even gotten to the main point yet.
    The main point is that there should be significant co pays. No, there should of course not be high copays for children. There should be no copay for children until they turn 12. Then there should be a 10% copay through the age of 21. The copay should go up to 20% for 22 through 62. I am undecided if there should be copays above the age of 62. Of course certain things such as flu shots, periodic check ups and birth control should be exempt from copays.
    If anyone dares to oppose free birth control it should be a constitutional requirement that they be tied down of a freeway and driven over by motorcycles until all the bones in thier body are broken. Then they shall be crucified. If they survive three days of hanging on the cross then they have to pay 100% of their medical bills for the rest of thier lives.
    The point of copays is to encourage people to live a healthy life style and not to run to the doctor and ask for anti biotics every time that they have a runny nose. I also think that it is totally reasonable to tack on extra fees for people who engage in high risk behavior. For example if you want to smoke cigarrettes you have to have show a smoker licence to the seller of the cigarettes (or marijuanna). You can only get the licence if you pay an annual fee.


  3. Ok I wanted to bring this up on the website NewEconomicPrespectivesdotsomethingororother. Unfortunately something is messed up their at the moment. Waren Mossler admits that running a trade deficit makes the country running it wealthier. Of course that would be true in the short run. In the longer run I guess a person could ask the question, if a nation has been getting wealtheir by taking more from other countries than it has been giving back what happens when those other countries who have been giving more than they have been taking in goods……….wait a second………I had to step away from the computer for a few moments and druing that break I remembered something important that had been pointed out to me earlier. That is that naitonal statistics about about trade surpluses and deficits HIDE just exactly who it is that debits and credits are being accumulated by.
    When the USA runs a 100 billion dollar trade deficit with China much of that money is going to firms in which Americans or Europeans own a significant share. Furthermore the Chinese getting rich from this trade do not even need to use those dollars to buy something back from the USA. They can use the money to buy something from Germany or Russia. If they do use that money to buy something from the USA it does not have to be a manufactured item. It can be real estate, or stocks or bonds in American companies that are investing in Mexico, or Thailand, or Kenya, or union free Mississippi or Alabama.
    What I condude from this is that wages in the USA to some extent get driven down as in some or many cases it pays for American companies to manufacture somewhere else. 100% of what gets manufactured somewhere else does not have to be sold in the USA. So in the short run these companies do not have to worry about a lack of purchasing power in the USA to buy up their inventory. Also to some extent some Americans even in the working class would see losses in pay and benifits made up for in increases in the prices of their stocks and in dividends.
    I recently looked up the percent of Americans that are either directly or indirectly invested in the stock market and it is about 50%. Ten years ago this figure had been even higher. I also saw some information about why people are not invested in the stock market. The most common reason was that they did not have enough money to invest in stocks. I will come to that in a moment. The second most common reason was that people thought that the stock market was to risky. Third was that the respondents did not think that they understood the stock market. Now as for those who do not have enough money, no doubt some of them are still quite young, under 30 years old for example, and as they get older they might then have enough money to invest in stocks.
    The reason that I took this little detour was to understand who is getting what with the current set up.
    We all know that the top 1% are making huge gains. But what about the rest? Well based on the number of huge motor homes that I see driving down the interstates, based on the number of fast boats that I see on the waterways, based on the number of people who show up at antique car shows with cars that they have put tens of thousands of dollars in to to restore so that they can drive it once a week I would say that the number of people who are doing quite well economically at this MOMENT is way more than 1%
    On the other hand if I consider the number of old rusted out broken down cars that I see on the road and
    the number of people living in crummy housing in rural and in urban areas and the number of people involved in the drug scene above that of marijuanna it is also clear that large numbers of people are living with bad economic conditions.
    If there is no world wide environmental collapse in the next 5 years some of those Americans who are currently living good will have fallen off their perch. Some of those who have it tough at the moment will be doing better in 5 years. Who can say what the collective net outcome will be? Reasonbly intelegent people in America and world wide know that things need to change. But those who are not sufffering in
    the USA are not going to be keen to support the steps neccessary that will make them less well off and lead God only knows where. Those in the United States who are suffering have in many cases not even come close to understanding the grand scheme of things. Without such knowledge they can not even take steps in the correct direction to fix things. If they did have such knowledge I doubt that they would have the means to change things anyways. Is this paragraph the bottom line of why Americans collectivley speaking do not change and continue to do nothing more than occasionally change their vote from Republican to Democratic and vice versa? It seems reasonable to me.
    Yet I began with why the rest of the world for the most part continues to accept things as they are, for the most part. OK the Russians did not accept the Ukrainian take over of Crimea. But in the big picture that is small potatos. No I can understand that for the rest of the world those in the top 1/3 of ecomomic prospects in almost all of the countries of the world would think that they are to tied in to the way things are now to want to take risks making changes whose immediate costs they can not determine in order to prevent dangers whose arrival can not be accurately predicted either.
    The only flaw that I can see in the short term in the current system for those who are have’s rather than have nots is that not only the USA is capable of creating money. Of course in the longer term environmental damage could kill us all and by the time we are certain of that it could be to late to do anything to prevent it. Of course that does not take in to consideration the Marxist view point that as the rich get ever richer seeking to stay ahead of the compition so that they and or their firms do not get swallowed up by even bigger firms the vast majority of humanity will end up as paupers in this process.


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