Economics

Supply and Demand.

If there is no supply of good public infrastructure, inclusive institutions, good governance, etc. people will go elsewhere.

And also, lol.

TLDW

China uses its trade surplus with the US and EU to build infrastructure risk-free by lending the surplus in Euro and USD to BRICS countries instead of buying US Treasury bonds. The loans are used to build infrastructure, such as railroads, which benefits Chinese supply chains. China can afford to ignore whether the loans are performing because the stability of their supply chain is more important.

https://inequality.org/facts/global-inequality/

https://www.oxfam.org/en/press-releases/billionaire-wealth-surges-2-trillion-2024-three-times-faster-year-while-number

https://archive.ph/WsaRI

Trump has promoted a number of plans to make America strong – at other countries’ expense. Given his “we win; you lose” motto, some of his plans would produce the opposite effect of what he imagines.

That would not be much of a change in U.S. policy. But I suggest that Hudson’s Law may be peaking under Trump: Every U.S. action attacking other countries tends to backfire and end up costing American policy at least twice as much.

Income taxes can be made progressive. Sales taxes are almost always regressive. Businesses need to do a lot more paperwork to document these taxes.

Why don't leftist parties campaign to abolish sales taxes and replace the lost revenue with an increase in a progressive income tax?

Am I missing some critical functionality of sales taxes that income taxes cannot replicate?

Edit: Here's an important feature of sales taxes that a few commentators helped me realize. It's better if we think of a sales tax as a "revenue tax" instead. Let's say we are in a country with multiple provinces. A business sells stuff in province A. However, the business and its owners are both located in province B. If sales tax didn't exist, then all money earned by the business would go to province B's government. Province A cannot enact tariffs and stuff like that. Thus, it puts up a "revenue tax" that is taxed to business for all revenue earned, i.e., a sales tax.

For those wondering, no, a corporate tax is not a revenue tax. It's a tax on profit. Non profits for example, do not pay any corporate tax, but they do pay sales tax (which is basically, revenue tax).

TLDW

Resource-based economies control the essential raw materials needed for manufacturing and high-tech industries. This gives them leverage over nations that rely on these resources. China's dominance in gallium production is a great example as it's essential for making advanced semiconductors.

Real power resides at the top of supply chains, where raw materials originate. Controlling these resources allows countries to dictate terms and disrupt industries further down the chain.

Sanctions enacted by higher-level supply chain economies often fail because resource-based economies can retaliate by restricting access to essential raw materials. This renders sanctions ineffective and can even harm the sanctioning nation's economy.

BRICS economies, who control many of the essential resources, will continue to develop domestic industries to process and utilize their own resources. Doing so reduces reliance on imports and creates new economic opportunities.

Access to critical raw materials provides a significant advantage in developing and manufacturing key technologies like semiconductors, telecom equipment, and renewable energy systems. This ultimately leads to technological leadership and economic dominance in those sectors as we're seeing happening with China.

Economies higher up the supply chain become vulnerable to disruptions and price fluctuations caused by resource-based economies. This dependence weakens their negotiating power and hinder their economic growth in the long run.

Rohan Grey, who taught us to understand money as a creature of law, is back for his tenth appearance on Macro N Cheese.

Steve and Rohan dissect the humor and horror of the political landscape. They make a realistic assessment of the Biden administration and look at figures like Elon Musk and Ramaswamy as part of a new wave of governance setting out to undermine the fabric of federal institutions.

The inherent assumption in “big computer” socialism is that the problems in the Soviet system of planning were not insurmountable, and other alternative planning systems, like the brief Cybersyn experiment in Chile show a way forward. Indeed, there was a glimmer of this possibility in the USSR. Faced with a stagnating economy in the 60s, it was clear to many that the Soviet planning system needed reforms. The road taken was that of the Kosygin-Lieberman 1965 reforms which introduced some market mechanisms, such as using profitability and sales as the two key indicators of enterprise success. These substituted the old Stalinist principle of “business bookkeeping”, where enterprises had to meet planners’ expectations within a system of fixed prices for inputs/outputs, causing perverse incentives such as making badly-made surpluses or increases in product weight as a net positive for the enterprise.

However, there was another option to the introduction of some market mechanisms in the economy: the road of using the available computing technology to help the planners plan and eliminate the perverse incentives. This was the main idea of Victor Glushkov, and his OGAS system. OGAS was not just “the Soviet internet” as it has sometimes been referred to; in its original form, it was supposed to be a system for radically modifying the planning systems of the economy. The original idea of OGAS was never implemented. Instead, it was downgraded and gutted to the point it became a ghost of itself, failing to provide a line of flight for the creation of a new economy. However, the principles behind it still hold, and can guide us in thinking about what shape the future can take. It is in this context that we present a short biography of Victor Gluskhov and the Soviet attempt at having a “big computer” plan its economy.