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But the alternative of having a state-planned economy isn't an attractive solution either.

That is not the only alternative - one could also attempt to have judicious state intervention in the economy.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Carrie (migeru at eurotrib dot com) on Wed Sep 30th, 2009 at 03:35:59 PM EST
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attempt to have judicious state intervention in the economy

Opposed to the just shovel money into our campaign donor's money pit approach we currently have, at least in the U.S.?

There seems to have been a lot of "state intervention in the economy" in the past 12-18 months. I think this intervention largely has not been for the overall good, just for the good of the world's wealthiest people and corporations at the expense of everyone else.

by Magnifico on Wed Sep 30th, 2009 at 03:41:49 PM EST
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There has never ceased to be cooperation between the state and big business - the description given by the elder Galbraith in The New Industrial State is still current, with the necessary adaptations. In Europe this accommodation includes the unions (which is why Goldfarb says Merkel is not about to dismantle the German unions). But the state has abdicated the common good. First by inaction, and then when business broke its toys, by shoveling money into their maws.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Carrie (migeru at eurotrib dot com) on Wed Sep 30th, 2009 at 03:47:49 PM EST
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Migeru:

one could also attempt to have judicious state intervention in the economy.

This strategy doesn't help. I guess most polititians would agree to a certain degree. Over the years I talked once in a while to MdBs (Mitglied des Bundestags = MP) of nearly all German parties. All in all they are not bad people. They think what they do is right. But they don't agree what a "judicious intervention" would be.

Cheers, harnoes

Make it as simple as possible but not simpler (Albert Einstein)

by harnoes on Wed Sep 30th, 2009 at 05:12:09 PM EST
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Welcome to politics. There is no objectively correct or ideologically neutral way to intervene in the economy. (But there are manifestly incorrect ways to do it - see, e.g. the bank bailouts.)

The question is not "whether planning?" - it is "planning to what end?"

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Sep 30th, 2009 at 05:18:23 PM EST
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There is no objectively correct or ideologically neutral way to intervene in the economy.

This includes non-intervention.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Carrie (migeru at eurotrib dot com) on Wed Sep 30th, 2009 at 05:40:59 PM EST
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Hence they fall back on a policy of state non-intervention and deregulation, which is a policy choice and does have consequences as it sets the (dis)incentives within which market actors operate.

On this blog Jerome a Paris and others have written eloquently on the effect that the regulatory environment has on the development of energy and transport infrastructures, and in particular how a deregulated market in which sovereign debt is not allowed to be used for funding infrastructure development is incompatible with the stated policy goals in the area of energy and transport. Specifically, short-term profit pressures and private funding incentivate fuel-burning power plants over renewable energy installations.

So, conscious state non-intervention in the economy is a deletereous policy choice.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Carrie (migeru at eurotrib dot com) on Wed Sep 30th, 2009 at 05:40:14 PM EST
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Neither interest-bearing credit created by credit intermediaries, nor profit to unproductive rentier shareholder owners of trading intermediaries are necessary in a world which is increasingly connected "peer to peer"

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Thu Oct 1st, 2009 at 02:10:15 PM EST
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