Is there a correlation between economic freedom and inequality?

[Zukunftsmusik]

Ok, this sounds like a complete noob-question, but whatever: Is there a necessary correlation between economic freedom and inequality? If a country for example reforms its economy in a neo-liberal direction, does this automatically enlarge the gap between rich and poor (or, if you like, bourgeoisie and workers).

Concrete examples and sources would be very helpful. Speaking of examples: I've read that when Pinochet came to power he reformed the economy, keeping only the largest coal company nationalised. From this point the inequality rose. Anyone who can confirm this? Any other examples?

[Zealot]

From China to New Zealand and pretty much every other country that has made capitalist reforms.

[Rafiq]

Economic freedom is a useless and theoretically bankrupt term.

[danyboy27]

Ok, this sounds like a complete noob-question, but whatever: Is there a necessary correlation between economic freedom and inequality? If a country for example reforms its economy in a neo-liberal direction, does this automatically enlarge the gap between rich and poor (or, if you like, bourgeoisie and workers).

Concrete examples and sources would be very helpful. Speaking of examples: I've read that when Pinochet came to power he reformed the economy, keeping only the largest coal company nationalised. From this point the inequality rose. Anyone who can confirm this? Any other examples?

Well, it all depend of how freedom is defined in your exemple.

If by economic freedom you mean social mobility, indeed when peoples have better chances to get either a good education and a highly paid job regardless of the social class you are in, equality will rise. In the early 1960s for exemple it was easier for someone poor to get an education and the manifacturing sector was paying their people well. There was of course rich and poor peoples, but that capitalism after all.

If by economic freedom you mean the freedom to own private property has much has you want and to be free from regulations, then yes more freedom mean more social inequality beccause it give to the powerful even more strenght to extract labor from worker at their expenses.

Dictatorship and other oppressive regimes can also limit what an individual or a group might or might not do, but that does not mean the inequality gap will necessary get wider, you can live under an extremely repressive regime and still have a lot of social mobility, its all about what kind of economic policy this regime is adopting.

[Zukunftsmusik]

Economic freedom is a useless and theoretically bankrupt term.

I understand. What I meant was more market freedom, less state intervention in markets etc.

[Revolutionair]

The terms that are being used here should be well defined.

If you consider social-democracy to be anti-economic freedom, then there is a causation. Social-democratic nations like Norway and Sweden have little inequality I believe. But this does not mean that every form of anti-economic freedom causes equality. For instance, the fact that there is little economic freedom in China seems to be accepted by the majority of people (((true or not, I don't know))) and it is also one of the most unequal societies.

So what is economic freedom?

What is inequality? Is it merely the amount of money you make, or is it also based on your power in decision making? Should the amount of money you make be measured in gross income or net income?

My conclusion is that the terms are ill-defined and therefore too broad to come to a real conclusion.

[Revolutionair]

I understand. What I meant was more market freedom, less state intervention in markets etc.

Every nation has HUGE state intervention in its markets*. Where do you draw the line between economic free and economic unfree?

* All those that can afford it I mean. Some countries can't afford to spend money to intervene in markets because they have no money. This should be more of a sign that economic freedom is a void term than anything else.

[Zukunftsmusik]

If by economic freedom you mean social mobility, indeed when peoples have better chances to get either a good education and a highly paid job regardless of the social class you are in, equality will rise. In the early 1960s for exemple it was easier for someone poor to get an education and the manifacturing sector was paying their people well. There was of course rich and poor peoples, but that capitalism after all.

definitly not this...



If by economic freedom you mean the freedom to own private property has much has you want and to be free from regulations, then yes more freedom mean more social inequality beccause it give to the powerful even more strenght to extract labor from worker at their expenses.

...but this. That the bourgeoisie gets more with lower taxes, less market intervention etc. is quite obvious. Some statistics or examples showing this would be very helpful.



Dictatorship and other oppressive regimes can also limit what an individual or a group might or might not do, but that does not mean the inequality gap will necessary get wider, you can live under an extremely repressive regime and still have a lot of social mobility, its all about what kind of economic policy this regime is adopting.

As in Chile for example. Or, say, Qatar.

[danyboy27]

...but this. That the bourgeoisie gets more with lower taxes, less market intervention etc. is quite obvious. Some statistics or examples showing this would be very helpful.

http://static8.businessinsider.com/image/4e9460a669bedd444100002f-590/ceo-pay-has-skyrocketed-300-since-1990-corporate-profits-have-doubled-average-production-worker-pay-has-increased-4-the-minimum-wage-has-dropped-all-numbers-adjusted-for-inflation.jpg

In a nutshell, giving more money to rich folks dont do squat.
Economic freedom in that case is an oxymoron.

[Revolutionair]

Economic freedom in that case is an oxymoron.

You mean the definition of the term economic and the definition of the term freedom contradict each other?

What exactly is your definition of economy?

[Zukunftsmusik]

Every nation has HUGE state intervention in its markets*. Where do you draw the line between economic free and economic unfree?

I see. My knowledge with economy and economical terms are... limited.



What is inequality? Is it merely the amount of money you make, or is it also based on your power in decision making? Should the amount of money you make be measured in gross income or net income?


Well, what about inequality as defined by the Gini coefficient? http://en.wikipedia.org/wiki/Gini_coefficient

When it comes to economic freedom, I'm not sure how to define it, really. The Heritag Fund (american think-tank) has one definition: http://www.heritage.org/index/
They conclude out of several factors, such as "Business freedom", "trade freedom", "Investment freedom", "Labor freedom" etc. Judging from a quick overlook, the definitions of the different factors seem to be from a bourgeois perspective (in "labor freedom", they calculate out from "Hindrance to hiring additional workers" and "Difficulty of firing redundant employees" a.o.)

[danyboy27]

You mean the definition of the term economic and the definition of the term freedom contradict each other?

What exactly is your definition of economy?

I was refering to the OP definition of economic freedom, a term employed by many right-winger.

[ColonelCossack]

Economic "freedom" in the laissez-faire sense means that private industry and corporations can do whatever they like. This means that they can produce their commodities to the cheapest (which is also very often the lowest) standard possible- this means that life in general when it comes to things (food as well as appliances, TVs, etc) are generally really, really shit, so people feel like their standard of living is shit. Also, it means that capitalists can treat their workers in whatever way they like- after all, there's always the reserve army of unemployed labour who are ready and willing to take any job (better than being unemployed)- which means they have the lowest wages and the worst hours, so even with the really cheap (and shit) products, they can still only afford very little. However, there isn't less money, it's just concentrated in the hands of the capitalists, because they take most of the profits from any commodities sold. So you have a handful of hyper-rich capitalists, and lots and lots and lots of impoverished proles.

However, as has been said, "economic freedom" doesn't really make sense in this way, because it leads to the vast majority of people having their freedom stripped away. i suppose it's freedom to oppress and exploit; in this situation, the workers really are wage-slaves.

[Firebrand]

You could try watching "the shock doctrine" on channel 4 OD. Its all about how neoliberal economic policies have caused misery and inequality and gives lots of examples. Although thinking about it you might only be able to access it in the UK

[Rafiq]

The original excuse was that lowering taxes on the Upper and Middle crust of the Bourgeoisie, as well as the "High bourgeoisie" (Which pretty much tax themselves) would make them invest more money into their buisnesses, thus creating a more productive and technologically advanced society, as well as higher wages, as "More money would exist to add to the wages of the working class".

However history has proven the exact opposite. I have said this before in another thread.

The only massive difference we saw, from the orgins of Neo Liberalism thirty years ago now, was the immense change in the pay checks that the capitalists gave themselves. As a matter of fact, the wages of the proletariat have decreased tremendously. Yes, living standards did improve in the first world for the proletariat to a certain extent. But why? The creation of the credit card, which was distributed to the masses as compensation for the low wages, (Low wages meant no one would be able to afford the very things they were producing, or the things produced over seas).

But this was fake currency, i.e. The proletariat bought much more than their wages could ever make up for, and here, today, this debt crisis is the result of the lowering of the worker's wages and the introduction of the credit cards, the transition to "Super Finance Capitalism".

And I warn all, my friends, all of the comfortable lifestyles, if any, experienced by the working people, will soon be drowned and disinigrated in the midst of the economic crisis. All of the great architectural projects that made our cities look so beautiful will be demolished at the sight of the storm that is ahead.

I have recently been looking things up on the nature of the crisis itself. And I will say: Things are not looking good.

[Rafiq]

You could try watching "the shock doctrine" on channel 4 OD. Its all about how neoliberal economic policies have caused misery and inequality and gives lots of examples. Although thinking about it you might only be able to access it in the UK

Neo-Liberalism was a desperate act by the Bourgeoisie to get itself out of a mess (The 70's recession). You notice how they just temporarily solved the problem, as if they moved the very core of the crisis forward in time, "To deal with it later". But Neo Liberalism is collapsing on itself, and no Keynsian policies, not even a large scale military conflict (Which would result in a Nuclear holocaust) is going to get the ruling classes out of this mess.

What is even worse is that there is no organic proletariat organizing itself at this point. Class consciousness is unpopular, as the masses believe their beloved Social Democratic Liberalism (Which has failed them before) is going to fix this mess, thus siding with "Other 'opressed' groups, like the First world Petite Bourgeoisie, even the upper crust of it!).

And as an even shittier situation, we have Bourgeois-backed clowns like Ron Paul, who they put there not as a real canadate in which they would like to see in office, but as a way to ideologically steer the "revolutionary" currents toward the Right i.e. They put him there to weaken the Left Wing characteristics of the Occupy movement, the message of the bourgeoisie is not clear, but to us as radicals, it is clear: They have not only chosen who dominates the mode of production, they have also chosen the man who is going to represent their own Antagonism (going to fight against the "Status quo" and the "evil corporations") i.e. Ron Paul.

Why? Because should Ron Paul end up as the "revolutionary hero" he will simply maintain the old Liberalist ideological veil that blinds the masses, and will retain the capitalist mode of production (It is sort of like how Israel started to support Islamists against the secular organizations in Palestine, for at least the Islamists will keep the masses in check and obliterate the very movement which unites the Palestinian and Israeli workers).

[Firebrand]

Neo-Liberalism was a desperate act by the Bourgeoisie to get itself out of a mess (The 70's recession). You notice how they just temporarily solved the problem, as if they moved the very core of the crisis forward in time, "To deal with it later". But Neo Liberalism is collapsing on itself, and no Keynsian policies, not even a large scale military conflict (Which would result in a Nuclear holocaust) is going to get the ruling classes out of this mess.).
Yep all true, but it was also at least in part ideological, they were hoping that by implementing neoliberal policies they would be able to crush working class dissent and reinforce the position of the ruling classes (i.e. themselves)


What is even worse is that there is no organic proletariat organizing itself at this point. Class consciousness is unpopular, as the masses believe their beloved Social Democratic Liberalism (Which has failed them before) is going to fix this mess, thus siding with "Other 'opressed' groups, like the First world Petite Bourgeoisie, even the upper crust of it!). ).
There's no need to be so pessimistic, you say there's no proletariat organising itself at the moment, and yet here in Britain we've seen the biggest strikes in decades, in Greece and Spain people have been out on the streets in protest, in the Middle east they have actually had revolutions (they may have simply put the bourgeois in power but its definately a start). And fr the first time I can remember we are hearing about worker struggles in the US on mainstream UK television. The left is on the rise again.



And as an even shittier situation, we have Bourgeois-backed clowns like Ron Paul, who they put there not as a real canadate in which they would like to see in office, but as a way to ideologically steer the "revolutionary" currents toward the Right i.e. They put him there to weaken the Left Wing characteristics of the Occupy movement, the message of the bourgeoisie is not clear, but to us as radicals, it is clear: They have not only chosen who dominates the mode of production, they have also chosen the man who is going to represent their own Antagonism (going to fight against the "Status quo" and the "evil corporations") i.e. Ron Paul.

Why? Because should Ron Paul end up as the "revolutionary hero" he will simply maintain the old Liberalist ideological veil that blinds the masses, and will retain the capitalist mode of production

Well you aren't going to let them get away with that are you. Talk to people, tell them about the left wing alternatives to capitalism, because I bet right now they're in the mood to listen. No-one actually takes people like Ron Paul seriously do they. I mean I know we elected Boris Johnson, but that doesn't mean we actually take him seriously.

[Rafiq]

Oh, and Leftsolidarity, thank you so much for the Neg rep. I wish my posts could be as intellectually golden as yours. I'll try my best next time, master.

[Rafiq]

Yep all true, but it was also at least in part ideological, they were hoping that by implementing neoliberal policies they would be able to crush working class dissent and reinforce the position of the ruling classes (i.e. themselves)

It was not so much ideological as the Bourgeoisie knows well the only way to crush the movement and strands caused by the power of the proletariat (Feminism, Anti Racism, etc.) was to crush them with de regulation and low wages, so they will be focused on getting by, rather than focusing on social struggles. This eventually caused a cultural change in the U.S., people got dumber, and this is where ideology comes in. But the economic manifestations always precede ideology, remember that. But to a certain extent you are right, the bourgeoisie became desperate because of the vast power of the proletariat.



There's no need to be so pessimistic, you say there's no proletariat organising itself at the moment, and yet here in Britain we've seen the biggest strikes in decades, in Greece and Spain people have been out on the streets in protest, in the Middle east they have actually had revolutions (they may have simply put the bourgeois in power but its definately a start). And fr the first time I can remember we are hearing about worker struggles in the US on mainstream UK television. The left is on the rise again.


Perhaps I'm being Amerocentric here, so I will give you the upper hand in regards to the situation in Europe and the middle east.


Well you aren't going to let them get away with that are you. Talk to people, tell them about the left wing alternatives to capitalism, because I bet right now they're in the mood to listen. No-one actually takes people like Ron Paul seriously do they. I mean I know we elected Boris Johnson, but that doesn't mean we actually take him seriously.


This is yet again one of the major faults of the Left. Let me make this as clear as possible: It is not our job as leftists to "Convert" people, or "spread the message" It does not happen that way. All of the attempts at trying to gain people over to the supposed "Left" side have been politically opportunistic moves by movements and parties that do not represent the proletariat.

A class conscious occurs organically within a proletarian movement, not from an external "enlightened" force that brings them over to the "right path". You see, this is a misinterperation of the concept of a vangaurd party.

Ideas and Ideology does not really spread through actual other Ideas (As hegel believed) rather Ideas, Ideology, are mere reflections of an already existing material and social force, i.e. A movement, a genuine Union, etc. Communism became popular in the 19th century, not because missionaries "converted" people by talking to them and changing their opinions, but by conditions already existing.

As Leftists, there is not much we can do to spread class consciousness. We can sit and theorize, analyse (Which is nothing to be ashamed of, it does help) and we can attend occupy protests and the likes. For those of us who are actual workers we can engage in class struggle, and join our fellow proletarians in solidarity and let our angers be exemplified. An organic movement in which represents the proletariat will come eventually, but by the looks of it, not very soon.


As for Ron Paul, did you know that he, out of every U.S. president, has had the most donations? Not the most amount of money gained, but largest quantity of people donating. That sais a lot. Like I mentioned, I doubt he will win, though ideologically a new Petite Bourgeois populist movement is emerging.

[Firebrand]

It was not so much ideological as the Bourgeoisie knows well the only way to crush the movement and strands caused by the power of the proletariat (Feminism, Anti Racism, etc.) was to crush them with de regulation and low wages, so they will be focused on getting by, rather than focusing on social struggles. This eventually caused a cultural change in the U.S., people got dumber, and this is where ideology comes in. But the economic manifestations always precede ideology, remember that. But to a certain extent you are right, the bourgeoisie became desperate because of the vast power of the proletariat..

I would add to this the active union bashing that Thatcher in particular carried out in order to give more power to bosses and break the power the unions held




Perhaps I'm being Amerocentric here, so I will give you the upper hand in regards to the situation in Europe and the middle east..

Remember, for a long time now America has been one of the most right wing nations on earth naturally things would take a bit longer to stir up there, that doesn't mean it won't happen and isn't happening.




This is yet again one of the major faults of the Left. Let me make this as clear as possible: It is not our job as leftists to "Convert" people, or "spread the message" It does not happen that way. All of the attempts at trying to gain people over to the supposed "Left" side have been politically opportunistic moves by movements and parties that do not represent the proletariat.

A class conscious occurs organically within a proletarian movement, not from an external "enlightened" force that brings them over to the "right path". You see, this is a misinterperation of the concept of a vangaurd party.

Ideas and Ideology does not really spread through actual other Ideas (As hegel believed) rather Ideas, Ideology, are mere reflections of an already existing material and social force, i.e. A movement, a genuine Union, etc. Communism became popular in the 19th century, not because missionaries "converted" people by talking to them and changing their opinions, but by conditions already existing.

As Leftists, there is not much we can do to spread class consciousness. We can sit and theorize, analyse (Which is nothing to be ashamed of, it does help) and we can attend occupy protests and the likes. For those of us who are actual workers we can engage in class struggle, and join our fellow proletarians in solidarity and let our angers be exemplified. An organic movement in which represents the proletariat will come eventually, but by the looks of it, not very soon. ..

Thats where you're wrong, true we can't create class conciousness, but where a dialogue within a movement is taking place we should be a part of it and argue for left wing solutions. If there is no dialogue taking place something is very wrong. And if we don't participate in the dialogue then what exactly are we for. How is it in any way productive to sit on the sideline and say nothing while the future is being discussed. You talk as though we are outsiders who shouldn't presume to intruct the working classes. The whole point is that we are as much a part of it as anyone else and as such we can and should make our voices heard to say what we believe should be done. And once everyone has given their view there will be a vote but if no-one puts an idea out there how can anyone vote for it. In any case even if you do favour some kind of star trek prime directive where the revolutionaries can't speak to the masses surely you can make an exception in the case of blatent misinformation. Just in the interests of setting the facts straight tell people that Ron Paul will not change society in any meaningful way and doesn't count as a revolutionary candidate.


As for Ron Paul, did you know that he, out of every U.S. president, has had the most donations? Not the most amount of money gained, but largest quantity of people donating. That sais a lot. Like I mentioned, I doubt he will win, though ideologically a new Petite Bourgeois populist movement is emerging.
I'm not moving to America anytime soon. England might be shitty but clearly America is worse

[Ostrinski]

We have no use for the term "Economic freedom." It iss both subjective and relative and can be interpreted in many different ways, therefore is unscientific and has no analogue in any conversation between materialists.

[Zukunftsmusik]

However history has proven the exact opposite. I have said this before in another thread.


Could you link me this thread?