[PEN-L:1256] Re: Re: Re: South Korea as model?

[boddhisatva <kbevans@xxxxxxxxx>]

		C. Proyect,


	Capitalist cronyism deforms this economy as well.  Cronyism is simply
a word for putting too much economic power into too few hands.  Go to the
Nihon Kezai Shimbun website if you want to see an immense display of what
cronyism has wrought.  Nikkei down 450 point today.


	The South Korean economy is bigger even now than the Russian
economy ever was.  That didn't happen because capitalism is good.  It
happened because Russia was obviously under a state of siege and because
the statist model is inadequate for getting capital into the markets.
Nicaragua might as well be an example of my argument as yours.  South
America has never been anything but cronyist - Red or otherwise.


	Your post clearly shows what has kept socialist economic thinking
behind the times.  It is the very compassionate and quite
reasonable-seeming emphasis on commodity goods.  It's a low growth market.
We are in an industrial economy.  The populations of the tiger economies
were desperate for basic needs as well, but considered Japan - no natural
resources or commodity production capacity to speak of, certainly a paltry
commodity base in relation to the population and they are still the second
largest economy in the world.  The reason is simply that they produced for
the global industrial economy instead of chasing an unattainable dream of
autarky.  Autarky is, in essence, counter-socialist.


	Production for demand is no different from production for use or
need.  The idea of production for need assumes that the needy will not be
able to join the industrial economy.  It assumes the welfare state into
existence.  It think that is a wrong assumption.  I think people are poor
because they are prevented from producing for their neighbors and the
world by capitalists who strangle the economy through a monopoly on
capital.  The problem is not that capitalism halts production when there
is over-capacity.  That's a decision that socialists have to make too.
More on that later.  The problem is that capitalist development in one
area is not as fungible as it should be.  It does not spill over as fast
as it should.  Therefore development does not beget development. Why? you
know why, because the capitalists always start with "entrepreneurship" and
quickly degenerate into speculation and accumulation.


	The problem with Hyundai is not just Korean over-investment.  The
problem with Hyundai is in Thailand, Malaysia, the Phillipines, Indonesia
and Russia.  Those are the economies (among others of course) that should
be absorbing that car production.  They can't because trillions of won got
pissed away instead of invested in industrial development for which there
is active demand.  That being said, there is a very serious question as to
who should bear the risk that an economic venture will fail.  If Hyundai
was a collective in a socialist Korea that had made a bad decision, who
should bear the brunt of that bad decision.  Risk is something the statist
model is totally unprepared for.  There is, in that model, no way to
express risk (like interest rates on loans) and no way to do anything but
socialize risk that is often created by a very small minority.  Under
statism, all investment is effectively at zero interest.  There is no way
to compare potential ventures in terms of risk.  That's why statists
always emphasize basic goods.  There seems to be no risk.  That's fine,
but how do we decide to produce disk drives or analog chips?  How do we
know whether to go into deep ultra-violet laser lithography or spend the
extra dough on x-ray lithography?  It's a risky decision to the tune of
billions.  The productivity gains and economic stimulus of higher
technology are what end up buying roof tiles and plywood for workers'
homes, not the other way around.  For every economic decision there is a
risk/reward profile. Commodity production has both low risk and low
reward.  It's time socialists started thinking about risk.



	peace