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What do you think about this, liberals, neo-cons and other gents?
The new face of Swedish socialism
Interestingly, this Swedish stuff is based on D. North conception.
After goOoOgling I have found a link.
DOUGLAS C. NORTH
Structure and Change in Economic History

Chapter 1: The Issues

Economic history explains the structure and performance of economies through time, where structure refers to the characteristics of a society which we believe to be the basic determinants of performance, and performance means total output, output per capita, and the distribution of income.

The neoclassical model alone is an insufficient model because of the weaknesses of its main assumptions, namely:
private and social returns are equated (zero transaction costs)
no diminishing returns to the acquisition and application of new knowledge
there is always a positive return to savings
the private and social costs of having children are equated
people's choices coincide with the desired results

The NC model need to be supplemented with a theory of demographic change, a theory of the growth in the stock of knowledge, and a theory of institutions. North is concerned only in developing a theory of institutions based on:
a theory of property rights that describes the individual and group incentives in the system
a theory of the state, since it specifies and enforces property rights
a theory of ideology that explains how different perceptions of reality affect the reaction of individuals to the changing ''objective situation''

In studying the problem of change in history, it is essential to specify the structure of an economic system in order to explain the dynamics of performance. In addition, one must recognize that social change does occur at the margin as NC theory implies (i.e., with changes in individual costs and benefits resulting in automatic changes in behavior), but other changes do not (such as the problem of the free rider). The NC model cannot account for behavior in which calculated self-interest is not the motivating factor. In addition, it is deficient in explaining stability and it lacks a theory of ideology.

Chapter 11: Structure and Change in Early Modern Europe

The period between 1450 and 1650 was one of many changes. Exploration, exploitation, trade, and settlement were expanded and there were changes in political-economic units. The European expansion was due to an alteration of relative prices, though there was always an ideological cast to these materialistic endeavors. There were two main consequences of this expansion: 1.) the institutions and property rights carried over from mother country shaped the subsequent development of the colonial areas, and 2.) the pattern of trade and flow of productive factors helped shape the pattern of development.

The 17th century, however, was a time of crises, including wars, falling wages, widespread social upheaval, and religious strife. Marxists explain this as a structural crisis over control of the state that led to the emergence of a set of property rights encouraging modern economic growth. However, the Marxian emphasis on technology is incorrect because the technological change associated with the Industrial Revolution required the prior development of a set of property rights, which raised the private rate of return on invention and innovation.

Countries responded differently to this crisis due to the nature of property rights. One must look at the interplay between the government and subjects regarding the expansion of the state's right to tax. In countries that were economically successful (e.g., Netherlands, England), property rights provided incentives to use factors of production more efficiently and directed resources onto inventive and innovating activity. Less successful countries (e.g., France and Spain) faced a Malthusian crisis.

France: The crown brought an end to the social and political chaos of the time in exchange for the right to tax without the consent of the governed. The crown traded monopoly rights in local areas for an assured source of revenue. This required a large bureaucracy which discouraged economic growth and led to the crisis.

Spain: In the 13th century tax revenue was traded for property privileges. This thwarted the development of efficient property rights in land for centuries. In the 1500's, guilds were granted exclusive monopolies for tax revenue. This led to bankruptcy, high rates of taxation, confiscation of property, and a slowing of trade and commerce.

Netherlands: The Dutch overcame their lack of resources by developing an efficient economic organization relative to their larger rivals and by taking advantage of the expanding world trade. The rulers discouraged restrictive practices and encouraged competition and the growth of trade and commerce. This improved the efficiency of Dutch markets.

England: The Tudors consolidated the power of the kind and increased crown revenues. Though the crown received the revenues from taxes, parliament won the right to set the level of tax, and the merchants achieved a monopoly of the trade. In 1689 the crown's initial control over property rights passed to a representative assembly which halted restrictive practices and increased competition. This allowed England to avoid a Malthusian crisis.

Chapter 12: The Industrial Revolution Reconsidered

Europe experiences significant changes between 1750 and 1830, including population growth, an increased standard of living, an increased life span, the replacement of agriculture with industry and service, a growing urban society which was accompanied by specialization, the division of labor, and interdependence, and continuous technological change.

The Industrial Revolution (IR) played an important role in these changes. However, it was not a radical break from the past, but rather an evolutionary culmination of a series of prior events. What was new about the IR was the magnitude of the changes, not their revolutionary character. The technological events of the IR were independent of developments in basic science. The technological events of the recent past, however, required major breakthroughs in science. The combination of science and technology produced the Second Economic Revolution.

Technological change is based on the reciprocal relationship between economic organization and technical change. Technical improvement depends of the developing of human skills. In addition, incentives for developing new techniques include the development of the patent system and an increasing rate of private return. An increasing rated of technological progress will result from either an increase in the size of the market or an increase in the inventor's ability to capture a larger share of the benefits crated by his/her invention.

The IR was initiated by the growing size of markets, which resulted in pressures to replace medieval and crown restriction circumscribing entrepreneurs with better specified common laws (Chapter 11). The growing size of the market also induced changes in organization, away from vertical integration to specialization. With specialization came the increasing transaction costs of measuring the inputs and outputs. The resultant increased supervision and central monitoring of inputs to improve quality radically lowered the cost of devising new techniques.

Chapter 13: The Second Economic Revolution

The First Economic Revolution created agriculture and ''civilization.'' The Second Economic Revolution (SER) created and elastic supply curve of new knowledge which built economic growth into the system. The SER is the result of two changes in the economic system: 1.) a change in the productive potential of the society as a consequence of a basic change in the stock of knowledge, and 2.) a change in organization to realize that potential. The development of the SER was the result of the development of scientific disciplines, and increased investment in human capital, and the evolution of property rights which raised the private rate of return closer to the social rate.

Technological breakthroughs that have characterized the SER include:
the development of automated machinery, which is the result of greater specialization
the creation of new sources of energy
the fundamental transformation of matter

The SER was accompanied by a Managerial Revolution, as Chandler explains. However, this led to the development of new rules to reduce transaction costs, which Chandler glosses over. The managerial revolution had to address many problems including: problems of quality control, labor discipline, bureaucracy, measuring inputs and outputs so that one could ascertain the contribution of individual factors and measure the output, and the formation of exchange relationship and contractual agreements extending over long periods of time. These problems increased resource costs of measuring the quality of output, increased the cost and occurrence of shirking, increased bureaucracy, and led to external effects such as environmental problems and the growth of government intervention.

Though the SER ushered in an era of unequaled prosperity in the Western world, it also induces a massive reaction against market economies and market forms of resources allocation. the control of the state was, for a brief period of time, in the hands of groups whose self-interest promoted the growth of market forms of resources allocation. However, control of the state passed into the hands of groups that favored the elimination or at least the modification of market forms of resource allocation. There are two hypotheses to account for the transformation:
1.) Market competition induces massive alimentation: Karl Polanyi argued, for example, that commoditization of land, labor, and money destroyed the social fabric of society. Occupational specialization and the division of labor led to the breakdown of communication and personal ties that had formed the fabric of a consensus ideology.,
2.) Market competition induced interest groups to shield themselves from its consequences by using the state to alter property rights and hence reduce competitive pressures.

Conclusion:
The pluralist control of the state has produced the disintegration of the earlier structure of property rights and replaced it with a struggle in the political arena to redistribute income and wealth at the expense of the efficiency potential of the SER. Moreover, this resultant struggle has not led to a new ideological social fabric that resolves the organizational tensions. Manipulation of the money supply by contending interest groups is a major destabilizing force in the modern world.
Fascism in slow motion and it works rather fine.
This article caused me to think back to my high school days in the 1970s, and in particular my social studies teacher. My teacher was a very interesting man who had travelled extensively around the world. I think Antartica was about the only place he never visited. He had been to Sweden and the USSR.

I can remember his enthusiasm for Sweden, and the "third way" approach, as he called it, to a national government/economy. He told us that eventually communism as practiced in the USSR would go away, and the US would become a socialist state modelled after Sweden. Sweden's way was the way of the future he told us. Being a young student with a skull full of mush, I basically accepted his prediction.

Now, 30 years later, I can see that my teacher was mostly wrong. True, communism in the USSR is gone (but even my teacher didn't dare to think that the USSR itself would be gone!). But, from reading that article, it seems that Sweden has done more to change towards a free market economy, while the US has only slightly moved towards Swedish-style socialism. So, while my teacher thought the US would undergo a lot of changes, of the 3 countries he mentioned, the US has seemingly changed the least.

With all that as a perspective, I'm doubtful that this "third way" is viable. I think Sweden will continue some movement towards less socialism, becoming more as the USA, while the US may make some very small socialism steps.

From the first article:

Quote:Encouraging entrepreneurs while maintaining a socialist facade is not an easy trick to pull off. But investors seem to believe that the Swedes can do it, and Pagrotsky is certain it can be done. "Forget all the doctrinal disputes," he urges. "I argue that capitalism can thrive in a social-democratic environment. If that's heresy, you can burn me at the stake."

I think he may evenually be burned at the stake.

-S
I think the true 'third way' will combine a free market economy with liberal social policies(that is to say, abortion laws, marriage laws, etc.)
The "third way" will combine whatever economy with few times as much bureaucracy as we have now. :twisted:
For two reasons (and I do not know which one is more important): 1. to give otherwise unemployable something to do with high self-importance (pardon me, self-esteem) as a perk for the job, and 2. snarl the rest.
Anon,

That happened about 40 years ago dude.
Wha..? When was that, and under what administration(s)?

Actually ag, the more I think about it, the way things are going, the 'third way' is simply going to be liberal politics S1

The government is getting huge, despite conservatives controlling all three branches of government. And people are becoming more and more permissive towards homosexuality, abortion, sex in the media, and all those other things Republicans hate(well, maybe not sex in the media, at least the men don't hate it).
Quote:I think the true 'third way' will combine a free market economy with liberal social policies(that is to say, abortion laws, marriage laws, etc.)
1) Abortion: I'm not sure how to make abortion more freely and easily available than it already is.

2) Marriage: Are you thinking about polygamy, incest, or pre-pubescent minors?

-S
Hm, Sweden has low coruption index all along.
How could you explain that?
Quote:Hm, Sweden has low coruption index all along.
How could you explain that?

Perhaps people are too poor to bribe officials.

More likely, Swedish society has a low tolerance for corruption, and they quickly arrest and remove corrupt officials.

I'm not saying that a free-market economy alone guarantees a good standard of living. I think most African countries are essentially free-market economies (they certainly aren't socialist states), but they rank among the lowest standards of living in the world because of corruption. So I think your point about lack of corruption being a big factor for a nations productivity is well taken. Clearly socialist states (France, Sweden, Germany) can outproduce free-market but corrupt states (most of Africa, Central and South America).

-S
So, being left or right isn't responsible for corruption, right?
What might be the cause then?
Laws ? Strong independent institutions ? Mentality?
The term Third Way is something coined by Mussolini, and it is short for,...........you guessed it, Fascism. It is STILL the most misunderstood of all the Isms, even after all this time. Probably as a result of the Collectivist left's desire to "change the subject", so to speak.

Read The Mystery of Fascism, and find out all you ever wanted to know about the man and his concept, and why the 20th century was the Fascist Century, and if we are not careful, so will the 21st.

Russia is now Fascist, so is Sweden, France, Germany, etc, etc, etc. It is just that most of these States have placed a "smiley face" on it, and it does not look all that dangerous. But Collectivism's stripes cannot be changed, no matter what. Eventually, that tirge is still the 500 pound pu$$y that will eat YOU.
John L Wrote:The term Third Way is something coined by Mussolini, and it is short for,...........you guessed it, Fascism.

WOW, what a horrible word you said. I am scared out of my wits. Shock
Mommy will be angry with me if I say words like this. Anyway , what Mussolini has to do with Sweden? This country didn't ever participate in both World Wars and tell me when she was agressive? Unlike America, who "cared about" any conflict in the world!

Quote:It is STILL the most misunderstood of all the Isms, even after all this time. Probably as a result of the Collectivist left's desire to "change the subject", so to speak.
No doubt, Johnny. Collectivists are the enemies. Strange people with obsolete instincts of mutual support, who implanted this principle into their state system.

Quote:Russia is now Fascist, so is Sweden, France, Germany, etc, etc, etc. It is just that most of these States have placed a "smiley face" on it, and it does not look all that dangerous. But Collectivism's stripes cannot be changed, no matter what. Eventually, that tirge is still the 500 pound pu$$y that will eat YOU.
They have some elements of the system used by Hitler and Mussolini, and they work for prosperity of their nations and peoples doing NO HARM to others nations!!!
Quote:Russia is now Fascist, so is Sweden, France, Germany, etc, etc, etc

I don't seem to be able to follow this.

If "Fascist" here means that the State interferes with the economy, then is there a state that is not "Fascist"?

I can think of only one: Vatican (no economy!)
Interestingly, Sweden has the highest rank in the world as to number of corporations per capita.
Green Wrote:Interestingly, Sweden has the highest rank in the world as to number of corporations per capita.

That is unusual. Usually Fascists like to keep the number of corporations down to a minimum, as too many of them are harder to control through their collectivist means.

That is why Fascists are so easily misunderstood. This Corporatism, or "third way" is really nothing more than a "code" word for control, and Fascists love to control. They also love the word "partnership", as long as the senior partner is "you know who".
I am afraid that any economy without observation and regulation from the state is falling into corporatism/monopolism. Free-Market Economy is utopia. Freedom without reins is anarchy.
Green Wrote:I am afraid that any economy without observation and regulation from the state is falling into corporatism/monopolism. Free-Market Economy is utopia. Freedom without reins is anarchy.

Why is it that when I talk about Heavy, or over-regulation, the first thing out of people's mouths is that without regulation(or basic rules), anarchy would reign?

I NEVER talked about the absence of basic rules or regulations. One of the four basic tenents of Classic Liberalism is the "Rule of Law".

Green, you are doing a magnificant job of picking my point to death. There is a huge difference between basic rules, in which Free Enterprise works best, and over-control, where the State determines what and how thing business should be performed.

Come on!
Green, you are doing a magnificant job of picking my point to death. There is a huge difference between basic rules, in which Free Enterprise works best, and over-control, where the State determines what and how thing business should be performed.

Fair enough. But you labeled Sweden as a fascist state. When most people think of fascism, they think of Mussolini, and all the excesses that went along with him, not simply heavy-handed regulation of commerce. It seems to me your definition of fascism is very limited and does not fall within the most normal and widespread meaning.

-S



http://dictionary.reference.com/search?r=2&q=Fascism

Quote:Fascism

1) A system of government marked by centralization of authority under a dictator, stringent socioeconomic controls, suppression of the opposition through terror and censorship, and typically a policy of belligerent nationalism and racism.

2) A political philosophy or movement based on or advocating such a system of government.
Oppressive, dictatorial control.

Word History: It is fitting that the name of an authoritarian political movement like Fascism, founded in 1919 by Benito Mussolini, should come from the name of a symbol of authority. The Italian name of the movement, fascismo, is derived from fascio, “bundle, (political) group,” but also refers to the movement's emblem, the fasces, a bundle of rods bound around a projecting axe-head that was carried before an ancient Roman magistrate by an attendant as a symbol of authority and power. The name of Mussolini's group of revolutionaries was soon used for similar nationalistic movements in other countries that sought to gain power through violence and ruthlessness, such as National Socialism.
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