Strengthening Constitutional Self-Government

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Communist Monopoly

John Moser, I think you'll love this one. From Der Spiegel, Poland's Institute of National Remembrance has created a game called Kolejka (Polish for "queue"), a communist edition of monopoly where the challenge is acquiring food rather than real estate. A description: "The players' task appears to be simple: they have to send their family members out to various stores on the game board to buy all the items on their shopping list. The problem is, however, that the shelves in the five neighborhood stores are empty. The players line up their pawns in front of the shops without knowing which shop will have a delivery. Tension mounts as the product delivery cards are uncovered and it turns out that there will only be enough product cards for the lucky few standing closest to the door of a store." My favorite card: the "colleague in the government," the game's equivalent of the "get out of jail free" card.
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Meanwhile, in Norway (and yes, that's a link to the "mindlessly partisan" left-wing lamestream media outlet, "Inc." magazine)...

http://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html

Brace yourself:

"Norway is also an exceedingly pleasant place to make a home. It ranked third in Gallup's latest global happiness survey. The unemployment rate, just 3.5 percent, is the lowest in Europe and one of the lowest in the world. Thanks to a generous social welfare system, poverty is almost nonexistent.

Norway is also full of entrepreneurs like Wiggo Dalmo. Rates of start-up creation here are among the highest in the developed world, and Norway has more entrepreneurs per capita than the United States, according to the latest report by the Global Entrepreneurship Monitor, a Boston-based research consortium. A 2010 study released by the U.S. Small Business Administration reported a similar result: Although America remains near the top of the world in terms of entrepreneurial aspirations -- that is, the percentage of people who want to start new things—in terms of actual start-up activity, our country has fallen behind not just Norway but also Canada, Denmark, and Switzerland.

(...)

But there is precious little evidence to suggest that our low taxes have done much for entrepreneurs—or even for the economy as a whole. "It's actually quite hard to say how tax policy affects the economy," says Joel Slemrod, a University of Michigan professor who served on the Council of Economic Advisers under Ronald Reagan. Slemrod says there is no statistical evidence to prove that low taxes result in economic prosperity. Some of the most prosperous countries—for instance, Denmark, Sweden, Belgium, and, yes, Norway—also have some of the highest taxes. Norway, which in 2009 had the world's highest per-capita income, avoided the brunt of the financial crisis: From 2006 to 2009, its economy grew nearly 3 percent."

and back in Poland:

http://www.thenews.pl/national/artykul135527.html

"The number of Poles living under the poverty line is steadily increasing due to unemployment, inadequate education and too many dependents....

[Fun quote for Justin P. here:]

'If we are saying that the Polish economy is doing well yet the number of people living in poverty is rising, there is clearly a problem in our country’s social politics and the state is starting to cut costs on social spending,' comments Father Marian Subocz, director of the Catholic charity organization Caritas Polska."

They've got a rather low employment level within the EU (note how they're trounced on this by the Stalinistic (or whatever name you're calling them these days) countries of Scandinavia):
h t t p - epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=tsiem010&tableSelection=1&footnotes=yes&labeling=labels&plugin=1

and they've got an in-work poverty (i.e., they're working poor) rate of around 12%, plus...

thenews dot pl/international/artykul124022_thirty-two-percent-live-in-poverty-in-poland.html

"One-in-three live in absolute poverty in Poland. One-in-five can’t afford to adequately heat their homes..." But the stores have Coke, Lay's chips, and Snickers bars.

Yes, obviously it's great that the stores now sell everything, not just vinegar. But that alone doesn't make a society livable, and most people are living their lives in the present, not just bitterly picking at their scabs from the Communist-era.

And guess what nationality is the largest immigrant group to (gulp!) Norway? (The answer starts with a P)

Perhaps the Institute of National Remembrance's will need to start thinking of a board game to symbolize that reality?

Could we say it is much harder to cope with a socialist legacy than with a capitalist one? The capitalist one leaves a prosperity that socialism can feed on. Socialism cannot afford itself.

I would be happy to buy you a one-way ticked to either Poland nor Norway on the condition you don't come back. Let me know.

Norway is actually a rentier state at the moment. Just wait for North Sea oil to drip dry and see how fast Norway becomes less than a paradise. Like any apparently successful socialist regime, they simply have productive milk cows at the moment (cf. California, also a paradise once upon a time). It can't last -- someone has to do the work, and over time, such people generally grow weary of being treated as milk cows (i.e., slaves).

THERE IS NO FREE LUNCH. Parasitism exists, but it has limits, limits which socialist/communist regimes haven't had the discipline to live by.

"a one-way ticked to either Poland nor Norway"

either / nor ?? That's a new one; is that's what taught in the peerless Texas school system?

I won't get into the details, cow, but that was one of your most amusing comments yet - perhaps second only to the angry-mom-throwing-crap-in-the-canal comment.

(that what's)

When you can't argue the facts, pick on the spelling.

You are amusing most of the time pumpkin. Your inability to intelligently argue much of anything without bringing a dump truck full of links from some one's posting or thoughts is thoroughly entertaining. Ever think that I might misspell or use incorrect grammar just to get you going. It works everytime. Of course when you have Sarah Palin living rent free in your head most of the time, I guess it is hard to concentrate on anything else.

The one-way ticket to Poland or Norway still stands. However, you can't come back.

When you are you to address the trash on my street problem. Come on Mr. Environmentalist - this is your opportunity to show all of us that you mean what you say.

Waiting pumpkin.....

I was curious about this, so I looked up both countries on the latest report of Economic Freedom of the World (http://www.freetheworld.com). It turns out that Norway has a surprising amount of economic freedom--in fact, in 2008 it was the 31st freest country in the world, from a market perspective. True, the government is very large, but the legal structure is predictable, property rights are secure, and the currency is sound. And if you look at the trend over the past 30 years, the Norwegian government has shrunk considerably.

Poland, on the other hand, ranks 59th. The government is about the same size as Norway's in terms of percentage of GDP, but the legal system is far less predictable and property is considerably less secure. True, there's more economic freedom there today than there was twenty years ago, but then twenty years ago the communist regime had only just fallen.

So, given all this, I guess I'm not terribly surprised that Norway's doing better than Poland.

And if anyone's curious, the United States comes in sixth in terms of economic freedom in the world. In 2000 it was third.

Another interesting fact I just learned--Norway, like other Nordic countries, taxes consumption heavily but taxes capital only lightly. They correctly understand that the real problem isn't inequality of income, but inequality of consumption.

"It turns out that Norway has a surprising amount of economic freedom--in fact, in 2008 it was the 31st freest country in the world, from a market perspective."

By "market perspective" I presume they really mean that of supply side economics (what with Fraser's Hayek-ian origins), so I'm curious as to what their criterion are for evaluating this sort of freedom. Knowing what Fraser's about, I'm guessing that, by their standards, freedom involves allowing (trusting) corporations to do whatever they want with little to no oversight or (shudder) regulation. It probably also involves minimizing or eliminating the impact of labor unions by various means. This kind of freedom revolves around the rights of business owners and is indifferent, at best, to workers' rights (to the extent that such a thing is even acknowledged).

But, obviously, the way it plays out in practice - with nearly every country somewhere in the gray area between perfect (supply-side) freedom and pure, absolute control - can allow a country like Norway to provide adequate freedom for entrepreneurs and can-do business leaders while also giving very reasonable rights and protections to workers and consumers (even if tea partiers would describe such policies as pure Stalinism). Which is why probably the most meaningful positions on their freedom index are the top 3 or 4 and the bottom 3 or 4, with everything in the middle being a decidedly mushy, mixed bag, from any ideological perspective.

Which leads me to notice one country that the Fraser Institute doesn't have on their list - Somalia.

Here's a good article on Somalia (it's old, but I think very little has changed in the last decade) and its government-less state of "freedom" (they actually drowned their government in the bathtub!):

Somali Businesses Stunted by Too-Free Enterprise
(Mogadishu Journal)
http://globalpolicy.org/component/content/article/172/30366.html

Shouldn't, by all rights, Somalia be at the very top of the list? It's a land devoid of meddling government and cumbersome business regulations.

"Norway, like other Nordic countries, taxes consumption heavily but taxes capital only lightly."

Is there a specific tax that you're referring to? (Also, what's your source for the general fact that you cited?)

According to Wiki, the capital gains taxes are as follows:

USA: "The tax rate on long-term gains was reduced in 2003 to 15%, or to 5% for individuals in the lowest two income tax brackets. Short-term capital gains are taxed at a higher rate: the ordinary income tax rate."

Norway: 28%
Finland: 28%
Sweden: 30%
Iceland: 18% (raised to this level in 2010, from 15%)
Denmark: looks considerably more complicated, but these numbers pop up - 28%, 43%, 45%, Interest income taxed at 59%, companies taxed at 25%

Comparing just that one particular tax, it looks to me as though only Iceland is comparable to the US. And, assuming that the Tea Party conservative position would be that capital/capitalists are "Taxed Enough Already" - then I'm wondering how taxes that are double (or even more) amount to being "light."

You would've scored major points with the Somalia example, were I an anarchist. But I am not. Outside of a handful of anarchocapitalists, no economist imagines that a society without an effective government is going to have a decent economy. Internal peace is the most basic prerequisite for wealth creation, and it's hard to imagine this without government.

Why didn't Gwartney and Lawson consider Somalia? I know for a fact (because Bob Lawson is a good friend) that they wanted to, but reliable data was simply not available. If it had been I'm fairly certain that Somalia would've scored very low, because the size of government is only one factor that is taken into consideration. If there is no functioning legal system, and property is insecure (both of which I clearly mentioned in my discussion of Norway vs. Poland) there is no real economic freedom no matter how "big" or "small" the government may be, and consequently no economic activity.

As for the capital vs. consumption taxes, my source of information is this site, from the Economist:

http://www.economist.com/economics/by-invitation/guest-contributions/focus_consumption_rather_income_disparities

Maybe it's wrong; I don't know. Or maybe Wikipedia is.

This biz-oriented site - which links to the relevant governmental authorities - seems to back up the Wiki numbers I listed before (at least for Norway, Sweden, and Finland - others not listed there).
http://www.solutionmatrix.com/capital-gain.html

The Economist article doesn't cite any numbers, the author merely says "I don’t know of any country that relies entirely on a progressive consumption tax [i.e., payroll tax], but the Nordic model works somewhat along those lines - with relatively heavy taxes on consumption and lighter taxes on capital."

I think the operative word there would be "relatively" - and there, only within each country, not compared to the USA. If anyone in the Obama administration proposed tax rates like those in the Nordic countries (but, of course, this won't happen), I think some tea partiers would be setting fire to their "We Come Unarmed (This Time)" signs.

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