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Participatory democracy

Cermank
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12/14/2013 12:43:22 PM
Posted: 2 years ago
yay or nay?

I am on the fence on this one- on one hand I feel people have the right to decide where to spend their money, on the other hand- I feel there are issues that people cannot decide on because they are too close to the issue- FDI, for instance.
FREEDO
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12/14/2013 5:12:54 PM
Posted: 2 years ago
When democracy is decentralized, it broadens the political discourse and increases the quality of debate, while countering the influence of private agendas in decision making. It's also more efficient when localized.
GRAND POOBAH OF DDO

fnord
ADreamOfLiberty
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12/14/2013 5:13:05 PM
Posted: 2 years ago
At 12/14/2013 12:43:22 PM, Cermank wrote:
yay or nay?

I am on the fence on this one- on one hand I feel people have the right to decide where to spend their money, on the other hand- I feel there are issues that people cannot decide on because they are too close to the issue- FDI, for instance.

Yay, and the best way to let them decide where to spend their money is to literally let them decide where they spend their money.
LOL, yeah, it's pretty amazing how they think they can "reason" with you. - Sidewalker, speaking of advocates for sexual deviancy.

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Eitan_Zohar
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12/14/2013 5:53:47 PM
Posted: 2 years ago
At 12/14/2013 5:12:54 PM, FREEDO wrote:
When democracy is decentralized, it broadens the political discourse and increases the quality of debate, while countering the influence of private agendas in decision making. It's also more efficient when localized.

What if people simply don't care about localized elections? My understanding and experience is that Americans don't give a rat's @ss who their senator is, much less the governor of their city.

Although I agree that it is very damaging, socially and politically.
"It is my ambition to say in ten sentences what others say in a whole book."
wrichcirw
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12/15/2013 8:53:24 AM
Posted: 2 years ago
At 12/14/2013 12:43:22 PM, Cermank wrote:
yay or nay?

I am on the fence on this one- on one hand I feel people have the right to decide where to spend their money, on the other hand- I feel there are issues that people cannot decide on because they are too close to the issue- FDI, for instance.

How are people "too close to the issue" of FDI?
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Cermank
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12/15/2013 10:19:53 AM
Posted: 2 years ago
At 12/15/2013 8:53:24 AM, wrichcirw wrote:
At 12/14/2013 12:43:22 PM, Cermank wrote:
yay or nay?

I am on the fence on this one- on one hand I feel people have the right to decide where to spend their money, on the other hand- I feel there are issues that people cannot decide on because they are too close to the issue- FDI, for instance.

How are people "too close to the issue" of FDI?

Whether or not to allow FDI in a country depends on fiscal condition and the prudency measures in place in the market. China, for example, when allowed FDI- it added to the benefits of the consumers AND producers since the government had already been focussing on small and big businesses. Thus the businesses had their own niche and when McD's and Apple etc came in- it didn't displace the existing businesses.

However, when the same FDI was allowed in India, we really didn't have prudential measures in place, and the only reason was because the businesses were outdated and our groeth rate was flagging. So, most of the FDI *replaced* the existing businesses, (around 40% of the FDI that came in was for mergers and acquisition) and this didn't really add to Indian growth/ GDP growth.

In a participatory democracy, I don't really think these considerations would play a role. What I envision is their being discussion between say, business owners and consumers- not really taking into account whether the state or district on the whole is ready for FDI.
Of course Democracy doesn't really guarantee that we DO consider the strength of our economy before allowing FDI (as was seen in the Indian example), but I guess that is the *fault* in a democracy. In a participatory democracy, I really don't see a mechanism to even address this problem. Like if our economy is growing and businesses are enjoying profits, the prudent thing to *keep* the economy on that path would be to allow FDI. I don't think businesses would. And in case the growth flags, there is absolutely no way they are going to allow more FDI. They'll focus on their personal profits more than the profitable thing for the district, on the whole.
Cermank
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12/15/2013 10:40:22 AM
Posted: 2 years ago
I sometimes feel pretty bad I can't use more accessible examples, but Asian economies are the only ones I'm intricately familiar with :-( Blame the education system.
wrichcirw
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12/15/2013 10:58:26 AM
Posted: 2 years ago
At 12/15/2013 10:19:53 AM, Cermank wrote:
At 12/15/2013 8:53:24 AM, wrichcirw wrote:
At 12/14/2013 12:43:22 PM, Cermank wrote:
yay or nay?

I am on the fence on this one- on one hand I feel people have the right to decide where to spend their money, on the other hand- I feel there are issues that people cannot decide on because they are too close to the issue- FDI, for instance.

How are people "too close to the issue" of FDI?

Whether or not to allow FDI in a country depends on fiscal condition and the prudency measures in place in the market. China, for example, when allowed FDI- it added to the benefits of the consumers AND producers since the government had already been focussing on small and big businesses. Thus the businesses had their own niche and when McD's and Apple etc came in- it didn't displace the existing businesses.

However, when the same FDI was allowed in India, we really didn't have prudential measures in place, and the only reason was because the businesses were outdated and our groeth rate was flagging. So, most of the FDI *replaced* the existing businesses, (around 40% of the FDI that came in was for mergers and acquisition) and this didn't really add to Indian growth/ GDP growth.

In a participatory democracy, I don't really think these considerations would play a role. What I envision is their being discussion between say, business owners and consumers- not really taking into account whether the state or district on the whole is ready for FDI.
Of course Democracy doesn't really guarantee that we DO consider the strength of our economy before allowing FDI (as was seen in the Indian example), but I guess that is the *fault* in a democracy. In a participatory democracy, I really don't see a mechanism to even address this problem. Like if our economy is growing and businesses are enjoying profits, the prudent thing to *keep* the economy on that path would be to allow FDI. I don't think businesses would. And in case the growth flags, there is absolutely no way they are going to allow more FDI. They'll focus on their personal profits more than the profitable thing for the district, on the whole.

Hmm...this is a bit of a complex argument. I don't quite follow it and I'll explain why:

1) Let's say you're correct and that underlying growth and infrastructure in India was flagging before FDI was introduced. What would happen if the FDI was subsequently pulled back? I would think that conditions in India would be even worse.

So, yes I agree with you that India would not be able to capitalize on FDI as China did for the reasons you cite, but I think the problem is less one of participatory democracy and much more one of the capitalists engaging in FDI making prudent decisions via local Indian partnerships. If the FDI goes bad, that's the fault of the capitalist, who should have known better.

2) Perhaps what you are saying is that a participatory democracy caused these problems with growth and infrastructure to begin with. This is something I'd probably agree with...I still remember reading years ago about squatters in (I believe) the airport in Mumbai...because these squatters could vote, they passed resolutions affirming the legitimacy of their squatting, and so the airport had to close down (or something along those lines). That's an instance of participatory democracy impeding capitalism.

---

"Like if our economy is growing and businesses are enjoying profits, the prudent thing to *keep* the economy on that path would be to allow FDI."

Why do you believe this? If a business is growing profitably, most of the shareholders in that business would NOT want additional shareholders with whom to share the profits. They may want debt financing I suppose, and maybe that's the FDI you are talking about.

IMHO this is not relevant to participatory democracy.

---

"They'll focus on their personal profits more than the profitable thing for the district, on the whole."

A corporation will focus on personal profits regardless of whether or not there is a democracy. A corporation is not responsible for the "greater good" - that's government's job.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Cermank
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12/15/2013 11:52:17 AM
Posted: 2 years ago
At 12/15/2013 10:58:26 AM, wrichcirw wrote:
At 12/15/2013 10:19:53 AM, Cermank wrote:
At 12/15/2013 8:53:24 AM, wrichcirw wrote:
At 12/14/2013 12:43:22 PM, Cermank wrote:
yay or nay.

.

Hmm...this is a bit of a complex argument. I don't quite follow it and I'll explain why:

Just a clarification I feel I should make, presently India is a parliamentary democracy. It isn't participatory democracy as of now (except maybe in rural areas). However, there were elections last Sunday and the party who won relies VERY heavily on participatory democracy. Not sure if it would form the government, but nevertheless- hence the interest.

1) Let's say you're correct and that underlying growth and infrastructure in India was flagging before FDI was introduced. What would happen if the FDI was subsequently pulled back? I would think that conditions in India would be even worse.

So, yes I agree with you that India would not be able to capitalize on FDI as China did for the reasons you cite, but I think the problem is less one of participatory democracy and much more one of the capitalists engaging in FDI making prudent decisions via local Indian partnerships. If the FDI goes bad, that's the fault of the capitalist, who should have known better.

I see FDI as a one window policy. It has a potential to be great, but if the opportunity isn't capitalized, it can't really be rolled back without considerable damage, both due to international perception and actual damage to the industries. The problem with India was that it was too open too soon. To an extent, Id agree that it was the fault of the capitalists (both domestic and foreign), but that's exactly what the point is. It was more profitable for them to sell their companies rather than just importing the technologies and developing themselves. The alternate is harder in the short run for the people (as opposed to the immediate benefit gained by selling). We need someone impartial to decide these decisions, Id say.

2) Perhaps what you are saying is that a participatory democracy caused these problems with growth and infrastructure to begin with. This is something I'd probably agree with...I still remember reading years ago about squatters in (I believe) the in Mumbai...because these squatters could vote, they passed resolutions affirming the legitimacy of their squatting, and so the airport had to close down (or something along those lines). That's an instance of participatory democracy impeding capitalism.

Haven't really heard of this, but there you go.
---

"Like if our economy is growing and businesses are enjoying profits, the prudent thing to *keep* the economy on that path would be to allow FDI."

Why do you believe this? If a business is growing profitably, most of the shareholders in that business would NOT want additional shareholders with whom to share the profits. They may want debt financing I suppose, and maybe that's the FDI you are talking about.

IMHO this is not relevant to participatory democracy.

Okay, I'm going to take an Indian example again to explain.( I swear I'm going to study American economy :-/) Back in 1970s, our growth rate was pretty good. Around 5%, which was an up from the initial 1% in 1950s. The reason for the high growth, however, was excessive expenditure on capital building and extreme protection of our industries. It was good, lead to improving of the potential of the industries. Around 1970s, it is general consensus now that we should have opened up. We didn't and almost suffered bankruptcy in 1991.

I don't see participatory democracy taking the prudential decision.

---

"They'll focus on their personal profits more than the profitable thing for the district, on the whole."

A corporation will focus on personal profits regardless of whether or not there is a democracy. A corporation is not responsible for the "greater good" - that's government's job.

Exactly. And that would be a problem if corporations and consumers were to take decisions reserved for the government, like in a participatory democracy.
wrichcirw
Posts: 11,196
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12/15/2013 6:04:34 PM
Posted: 2 years ago
At 12/15/2013 11:52:17 AM, Cermank wrote:
At 12/15/2013 10:58:26 AM, wrichcirw wrote:
At 12/15/2013 10:19:53 AM, Cermank wrote:
At 12/15/2013 8:53:24 AM, wrichcirw wrote:
At 12/14/2013 12:43:22 PM, Cermank wrote:
yay or nay.

.

Hmm...this is a bit of a complex argument. I don't quite follow it and I'll explain why:

Just a clarification I feel I should make, presently India is a parliamentary democracy. It isn't participatory democracy as of now (except maybe in rural areas). However, there were elections last Sunday and the party who won relies VERY heavily on participatory democracy. Not sure if it would form the government, but nevertheless- hence the interest.

1) Let's say you're correct and that underlying growth and infrastructure in India was flagging before FDI was introduced. What would happen if the FDI was subsequently pulled back? I would think that conditions in India would be even worse.

So, yes I agree with you that India would not be able to capitalize on FDI as China did for the reasons you cite, but I think the problem is less one of participatory democracy and much more one of the capitalists engaging in FDI making prudent decisions via local Indian partnerships. If the FDI goes bad, that's the fault of the capitalist, who should have known better.

I see FDI as a one window policy. It has a potential to be great, but if the opportunity isn't capitalized, it can't really be rolled back without considerable damage, both due to international perception and actual damage to the industries. The problem with India was that it was too open too soon. To an extent, Id agree that it was the fault of the capitalists (both domestic and foreign), but that's exactly what the point is. It was more profitable for them to sell their companies rather than just importing the technologies and developing themselves. The alternate is harder in the short run for the people (as opposed to the immediate benefit gained by selling). We need someone impartial to decide these decisions, Id say.

I don't exactly understand the dynamics of the bolded, so I won't address them. On everything else, it sounds like what you're saying is that foreign capital was squandered in India for whatever reason and did not result in profitable growth. Again, I'm not sure what any of this has to do with participatory democracy. It seems to be much more about foreign capitalists overestimating the potential of the Indian investment situation.

2) Perhaps what you are saying is that a participatory democracy caused these problems with growth and infrastructure to begin with. This is something I'd probably agree with...I still remember reading years ago about squatters in (I believe) the in Mumbai...because these squatters could vote, they passed resolutions affirming the legitimacy of their squatting, and so the airport had to close down (or something along those lines). That's an instance of participatory democracy impeding capitalism.

Haven't really heard of this, but there you go.

Right, but none of this point deals with FDI specifically...

"Like if our economy is growing and businesses are enjoying profits, the prudent thing to *keep* the economy on that path would be to allow FDI."

Why do you believe this? If a business is growing profitably, most of the shareholders in that business would NOT want additional shareholders with whom to share the profits. They may want debt financing I suppose, and maybe that's the FDI you are talking about.

IMHO this is not relevant to participatory democracy.

Okay, I'm going to take an Indian example again to explain.( I swear I'm going to study American economy :-/) Back in 1970s, our growth rate was pretty good. Around 5%, which was an up from the initial 1% in 1950s. The reason for the high growth, however, was excessive expenditure on capital building and extreme protection of our industries. It was good, lead to improving of the potential of the industries. Around 1970s, it is general consensus now that we should have opened up. We didn't and almost suffered bankruptcy in 1991.

I don't see participatory democracy taking the prudential decision.


How is the bolded linked? I don't see how these statements tie into each other.

Regarding your bankruptcy scenario, this sounds very similar to what China experienced post-2008, i.e. excessive capital investment snowballing into more dangerous projects until a bubble forms, and when that bubble bursts, crash. This is also what caused South Korea's IMF crisis during the Asian financial crisis in 1997. In fact, it sounds like just about any bubble/burst scenario, i.e. over-investment in dot-coms in America around 2000, over-investment in housing in 2005, etc. I don't see how any of this is relevant to a participatory democracy...this sounds like the business cycle more than anything else.

BTW, I like the fact that you're talking about the Indian economy. Gives me perspective. =)

Feel free to ask about the American economy if you like.

"They'll focus on their personal profits more than the profitable thing for the district, on the whole."

A corporation will focus on personal profits regardless of whether or not there is a democracy. A corporation is not responsible for the "greater good" - that's government's job.

Exactly. And that would be a problem if corporations and consumers were to take decisions reserved for the government, like in a participatory democracy.

Well, that's going to happen in any democracy, really...I don't think it's much of a problem. The idea is that if everyone is looking for their own interests, then everyone will be better for it, lol. The government taxes of course and looks out for the public good, but it is private enterprise that creates efficient growth, because the alternative would be SOEs (state run enterprises), which create monopolistic situations that stifle growth.

Corporations and consumers will be very active in a democracy, because corporations and consumers form the entirety of the governed (producers and consumers). If the government is not serving the people, then who is the government serving?
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Cermank
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12/16/2013 8:55:31 PM
Posted: 2 years ago
At 12/15/2013 8:53:24 AM, wrichcirw wrote:

I have this on my mind. I just need to be on a PC to answer this, I'll reply as soon as I can. I rush through on my phone, this requires a little time.
Cermank
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12/17/2013 5:55:07 AM
Posted: 2 years ago
At 12/15/2013 6:04:34 PM, wrichcirw wrote:
I don't exactly understand the dynamics of the bolded, so I won't address them. On everything else, it sounds like what you're saying is that foreign capital was squandered in India for whatever reason and did not result in profitable growth. Again, I'm not sure what any of this has to do with participatory democracy. It seems to be much more about foreign capitalists overestimating the potential of the Indian investment situation.

We're talking about the decisions taken by people, and whether they can be effective in addressing issues like opening up a country to FDI. I'm pointing out why the dynamics of taking a decision of allowing FDI rests on issues other than what people want.

2) Perhaps what you are saying is that a participatory democracy caused these problems with growth and infrastructure to begin with. This is something I'd probably agree with...I still remember reading years ago about squatters in (I believe) the in Mumbai...because these squatters could vote, they passed resolutions affirming the legitimacy of their squatting, and so the airport had to close down (or something along those lines). That's an instance of participatory democracy impeding capitalism.

Haven't really heard of this, but there you go.

Right, but none of this point deals with FDI specifically...

I am focussing more on the decisions taken by the people, and how they have a tendency to be myopic and disastrous for the country.

Okay, I'm going to take an Indian example again to explain.( I swear I'm going to study American economy :-/) Back in 1970s, our growth rate was pretty good. Around 5%, which was an up from the initial 1% in 1950s. The reason for the high growth, however, was excessive expenditure on capital building and extreme protection of our industries. It was good, lead to improving of the potential of the industries. Around 1970s, it is general consensus now that we should have opened up. We didn't and almost suffered bankruptcy in 1991.

I don't see participatory democracy taking the prudential decision.


How is the bolded linked? I don't see how these statements tie into each other.

Lol this is the reason I shouldn't answer from my phone, I usually jump the gun.

Now we know we should opened up a lot earlier. But at that point of time, people were very against opening up to industrialised countries and their products at a time our businesses were already down. Even a while back, when the petrol prices were rising faster than they had in ages (and the food prices too), reducing subsidies, which was imperative to stabilise teh situation. was met with significant retaliation.

Even not going into the specifics, generally, whenever we try to 'liberalise' a little more, we are always opposed by people- normal people who don't really get economics. Farmers, even corporates sometimes and whatnot. Giving them th epower to make decision, I think it would lead to a lot more misallocation of resources because of the very *nature* and biasese of people.

Regarding your bankruptcy scenario, this sounds very similar to what China experienced post-2008, i.e. excessive capital investment snowballing into more dangerous projects until a bubble forms, and when that bubble bursts, crash. This is also what caused South Korea's IMF crisis during the Asian financial crisis in 1997. In fact, it sounds like just about any bubble/burst scenario, i.e. over-investment in dot-coms in America around 2000, over-investment in housing in 2005, etc. I don't see how any of this is relevant to a participatory democracy...this sounds like the business cycle more than anything else.

Ah well, not exactly. We weren't investing as much we were giving out freebies. Small businessmen were protected to a fault, India was socialist at its conception. It was all excessive expenditure on things that curtailed productivity. Export import duties, nationalised banking and insurance and the likes. It was more of a collapse of socialist economy.

BTW, I like the fact that you're talking about the Indian economy. Gives me perspective. =)

Feel free to ask about the American economy if you like.

I might just take you up on this offer sometime in future.

Exactly. And that would be a problem if corporations and consumers were to take decisions reserved for the government, like in a participatory democracy.

Well, that's going to happen in any democracy, really...I don't think it's much of a problem. The idea is that if everyone is looking for their own interests, then everyone will be better for it, lol. The government taxes of course and looks out for the public good, but it is private enterprise that creates efficient growth, because the alternative would be SOEs (state run enterprises), which create monopolistic situations that stifle growth.

Corporations and consumers will be very active in a democracy, because corporations and consumers form the entirety of the governed (producers and consumers). If the government is not serving the people, then who is the government serving?

The bolded is the point of contention. Will it? Aren't band-aid solutions sometimes more preferable than actual long term solutions? Even though I'd agree that ANY form of democracy has the tendency of sometimes giving in to the populist demands, but I see this as the basic characterstic of a participatory democracy. Do you think people would govern the society better than people who's job it is to govern, whose job it is to spend time and effort to understand the dynamics of the action they are taking and their impact on the economy? I know this might be a bit of a stretch in teh current scenerio, but comparing, I still see one side specialising and the other not.
ClassicRobert
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12/17/2013 6:05:27 AM
Posted: 2 years ago
I'm not fond of participatory democracy. Add that many more people to the decision-making process, and it will become even more time-inefficient. Also, as it gets closer to mob rule, I see individual rights minimized for the sake of the "betterment" of the collective (or at least the escalation of the majority's views into reality), and I do not see that as particularly desirable.
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wrichcirw
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12/17/2013 6:47:07 AM
Posted: 2 years ago
At 12/17/2013 5:55:07 AM, Cermank wrote:
At 12/15/2013 6:04:34 PM, wrichcirw wrote:

We're talking about the decisions taken by people, and whether they can be effective in addressing issues like opening up a country to FDI. I'm pointing out why the dynamics of taking a decision of allowing FDI rests on issues other than what people want.

I don't see how FDI dynamics would operate against the people's interests. The populace has vested interests in seeing FDI pan out well. If investment in India proves to be productive, it will attract more investment into India. This will raise living standards across the board.

IMHO the real question is why FDI has NOT panned out well, which seems to be the main point of your linking FDI to participatory democracy. There may be problems there due to participatory democracy impeding infrastructure development as I pointed out below...IMHO there are also geopolitical problems as well. I'm a big cynic if you don't know already...I think the West is fully cognizant that the best counter to an ascending China is an ascending India, and they want to ensure that India is in their camp by whatever means are possible. IMHO this explains India's relatively slow progress...it keeps them more reliant upon Western aid. I don't know what the means are to this end, but I do know the end is a valid consideration in geopolitics and easily fits a realist framework.

2) Perhaps what you are saying is that a participatory democracy caused these problems with growth and infrastructure to begin with. This is something I'd probably agree with...I still remember reading years ago about squatters in (I believe) the in Mumbai...because these squatters could vote, they passed resolutions affirming the legitimacy of their squatting, and so the airport had to close down (or something along those lines). That's an instance of participatory democracy impeding capitalism.

Haven't really heard of this, but there you go.

Right, but none of this point deals with FDI specifically...

I am focussing more on the decisions taken by the people, and how they have a tendency to be myopic and disastrous for the country.

I agree this is a problem with any form of democracy, but I don't see how this is relevant to FDI specifically.

Okay, I'm going to take an Indian example again to explain.( I swear I'm going to study American economy :-/) Back in 1970s, our growth rate was pretty good. Around 5%, which was an up from the initial 1% in 1950s. The reason for the high growth, however, was excessive expenditure on capital building and extreme protection of our industries. It was good, lead to improving of the potential of the industries. Around 1970s, it is general consensus now that we should have opened up. We didn't and almost suffered bankruptcy in 1991.

I don't see participatory democracy taking the prudential decision.


How is the bolded linked? I don't see how these statements tie into each other.

Lol this is the reason I shouldn't answer from my phone, I usually jump the gun.

Now we know we should opened up a lot earlier.

I'm going to stop you here. Why do you believe this? China was accepted into the WTO only in 2000.

Even not going into the specifics, generally, whenever we try to 'liberalise' a little more, we are always opposed by people- normal people who don't really get economics. Farmers, even corporates sometimes and whatnot. Giving them th epower to make decision, I think it would lead to a lot more misallocation of resources because of the very *nature* and biasese of people.

Yes, this is the consensus as to what is holding back Indian development vis a vis China, which has no qualms whatsoever about displacing millions of people against their will to achieve economic goals.

Ah well, not exactly. We weren't investing as much we were giving out freebies. Small businessmen were protected to a fault, India was socialist at its conception. It was all excessive expenditure on things that curtailed productivity. Export import duties, nationalised banking and insurance and the likes. It was more of a collapse of socialist economy.

Ok, now this happened in China as well. WTO entry for China forced it to emphasize private enterprise over socialistic SOEs, both for "fair trade" considerations and for China to become more competitive. In China the SOEs ran into massive non-performing loan problems which were shelved by the CCP into "asset management companies" (AMCs) (http://en.wikipedia.org...) that were reminiscent as to how America dealt with its savings and loans crisis via the Resolution Trust Corporation. (http://en.wikipedia.org...) I suppose this is where your point about participatory democracy comes in. In China they just forced people out of the SOEs regardless of public sentiment.

The picture in China is extremely complicated...I don't fully understand it myself and it was my major in college...there is a local dynamic that effectively pushes against the CCP (communist party apparatus)...this is reminiscent of China's local gentry working with the imperial throne. It was neither top-down or bottom-up...it was symbiotic. None of this gets Western press...all you hear about is the overbearing CCP ruining people's lives. That is only half the story and is grossly inaccurate. There are reasons why over 90% of Chinese think their lives are getting better economically that run against "official" Western commentary on China.

The WSJ used to do daily "page one" spreads on China which broke this mold, but that has since ceased after the Fox buyout.

---

The rest is exceptionally complicated and I'll address it in another comment.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
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12/17/2013 7:54:20 AM
Posted: 2 years ago
At 12/17/2013 5:55:07 AM, Cermank wrote:
At 12/15/2013 6:04:34 PM, wrichcirw wrote:

Exactly. And that would be a problem if corporations and consumers were to take decisions reserved for the government, like in a participatory democracy.

Well, that's going to happen in any democracy, really...I don't think it's much of a problem. The idea is that if everyone is looking for their own interests, then everyone will be better for it, lol. The government taxes of course and looks out for the public good, but it is private enterprise that creates efficient growth, because the alternative would be SOEs (state run enterprises), which create monopolistic situations that stifle growth.

Corporations and consumers will be very active in a democracy, because corporations and consumers form the entirety of the governed (producers and consumers). If the government is not serving the people, then who is the government serving?

The bolded is the point of contention. Will it? Aren't band-aid solutions sometimes more preferable than actual long term solutions? Even though I'd agree that ANY form of democracy has the tendency of sometimes giving in to the populist demands, but I see this as the basic characterstic of a participatory democracy. Do you think people would govern the society better than people who's job it is to govern, whose job it is to spend time and effort to understand the dynamics of the action they are taking and their impact on the economy? I know this might be a bit of a stretch in teh current scenerio, but comparing, I still see one side specialising and the other not.

Ok, there are two separate dynamics operating here that need to be separated from each other.

There is the "free market vs centralized economy".

There is the "democracy vs some form of autocracy" dynamic.

In America, we have a mixed economy and something that leans more towards democracy than autocracy.

In China, they have vestiges of a centralized economy but in reality are heading in a "free market" direction whereas in America we are headed in the opposite direction. However, China doesn't have a democracy and has a one-party rule.

In India, my understanding from what you've said is that they also have vestiges of a centralized economy although I don't know what India's economy can currently be characterized as, and they have something that is far more democratic than even what we have in America.

---

So, to parse the bolded statement:

1) Politically, opposition in China is silenced, so you simply cannot say "everyone" is better off, and
2) because China experienced a gigantic expansion of their Gini coefficient post-WTO, there is absolutely no reason to think economically that "everyone" truly is better off...merely that due to poverty alleviation China has achieve a good measure of Pareto efficiency, and even that is questionable given the lack of independent studies to verify the statistics...every mouthpiece there is state-run.

I took a vacation in China, and during a train ride, the people voiced in hushed whispers criticism of Jiang Zemin (former head of state) - they noted that such criticism was a criminal act.

Yes, people are very optimistic there, but migrant worker life is a miserable life, even if it pays better than rural life.

Then there is the issue of exactly what happened to all of the people who got evicted from their homes as China pursued infrastructure development. The CCP owns the press, so it's difficult to ascertain their fates. This is more evidence that "everyone" is not better off in China.

Now, in India, I believe the Gini coefficient is not as bad than it is in China. This may be due to lack of economic development that would cause Marxist inequality (marginalization of labor), counterbalanced by India's traditional caste system structure which exacerbates inequality. Correct me if I'm wrong on this account. Regardless, is everyone better off in India? Yes, I think you can say so, and this would be because of the democratic institutions in India. In India they listen to everyone, lol. The main problem is that this does not lead to optimal growth, just an assurance of Pareto-optimal growth.

In America, democracy allows for labor to have a say in the political system to no small degree. In China, labor only has a say if they threaten rebellion. Why? Because in a capitalistic society like China is fast becoming, labor gets marginalized.

[possible tl;dr segment]

I looked this up a bit to see if I could corroborate the bolded stance. Apparently there are nationalized trade unions in China...this aspect of labor dynamics was not covered in any of the courses I took in Cal. In Cal, there was only one course on Chinese economics, labeled, of course, "Chinese economics", lol. It dealt mainly with economic history, the macroeconomic picture, and international trade relations.

I took another course on Chinese geography, which was apparently different from Chinese geology in that geography apparently is a social science, lol. We dealt with some issues of labor dynamics, mainly migrant workers and the aforementioned CCP vs localities dynamics, but not of organized labor. The picture the lecturer painted was essentially that life is tough in China - we had a guest lecturer that lectured about "garbage in China", how "recycling" in China dealt with masses of people coming through garbage "imported" from the developed world, i.e. junked computers and what not...the point apparently being that labor was being marginalized in China and that there are massive issues dealing with inequality in the country. Keep in mind that Cal Berkeley is probably the world's premiere socialist intellectual institution, so it's extremely difficult to get a pro-libertarian perspective while in attendance.

[end tl;dr]

Hopefully this adds a bit of clarity. Again, it's an extremely complex, multidisciplinary subject that would probably take a small army of PhDs to adequately ascertain.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
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12/17/2013 8:09:44 AM
Posted: 2 years ago
BTW, in case any of this is unclear, the SOEs in China actually provided a safety net, they were truly socialist. As those get dismantled, more and more of the Chinese labor force finds itself with absolutely zero safety net...China does not have a comprehensive welfare system - in fact that's been a key aspect of its development, dismantling the welfare system that was in place.

Not sure if you will find parallels in India re this point, just to emphasize why I am talking so much about SOEs. This makes dismantling state-run institutions against the interests of the populace...sigh, this is complicated, lol.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
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12/17/2013 8:12:50 AM
Posted: 2 years ago
At 12/17/2013 6:05:27 AM, ClassicRobert wrote:
I'm not fond of participatory democracy. Add that many more people to the decision-making process, and it will become even more time-inefficient. Also, as it gets closer to mob rule, I see individual rights minimized for the sake of the "betterment" of the collective (or at least the escalation of the majority's views into reality), and I do not see that as particularly desirable.

This doesn't make any sense. Why isn't the interests of everyone particularly desirable?
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
Cermank
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12/17/2013 10:09:56 AM
Posted: 2 years ago
At 12/17/2013 6:47:07 AM, wrichcirw wrote:
At 12/17/2013 5:55:07 AM, Cermank wrote:
At 12/15/2013 6:04:34 PM, wrichcirw wrote:

I don't see how FDI dynamics would operate against the people's interests. The populace has vested interests in seeing FDI pan out well. If investment in India proves to be productive, it will attract more investment into India. This will raise living standards across the board.

Would you, a producer, want more competition when you have the power to restrict it? And enjoy being comparatively good? Would you want more competition?

Of course it's more prudent to have FDI when we can afford to, and the rationale is exactly what you explained. But normal people don't realize it, that is exactly what I mean when I say people are 'too close' to an issue to understand when something might pay off in the longer run.

Basically, there are two interconnected arguments here-
1. People would not be willing to forego short term benefits to avail long term growth. Eg. FDI. When producers would have to develop better technologies to compete with foreign companies, and put in costs to upgrade themselves- even though it is benefitial for the country in the long run.

2. People do not know the dynamics of what is required to ensure that a decision is successful. Most of the decisions aren't one-off decisions, i.e., it's isn't just a yes (or no) to FDI and everything being alright. There are intricacies involved in the decision (Say, defining the forms of FDI, the sectors in which FDI is allowed and the likes), and much of the success of the policy depends on whether those conditions are fulfilled. Considering in a participatory democracy, we have people who are not specialised in the intricacies, and more of power group lobbies with assymmetric power (i.e. say, corporates would be more organized than consumers. Their interests more pronounced than consumers), the decisions wouldn't really be balanced and geared towards the betterment of the society as a whole. There would be much more chance of a failure.

IMHO the real question is why FDI has NOT panned out well, which seems to be the main point of your linking FDI to participatory democracy. There may be problems there due to participatory democracy impeding infrastructure development as I pointed out below...IMHO there are also geopolitical problems as well.... I don't know what the means are to this end, but I do know the end is a valid consideration in geopolitics and easily fits a realist framework.

India isn't really a participatory democracy right now, at least to the degree I'm contending in this answer. It's more of a representative democracy, we chose our representatives and they make the decisions. (The party who won the state elections is looking for referendum level of participatory democracy- we are actually supposed to sms them over whether or not they should form the government in Delhi.)

I'd say I agree with your geopolitical wala point, but is it really that potent now? I seem to recall that India has started declining a lot of aid, if that's correct. I'll have to google, but I think we were moving towards more self reliance. Plus, that's so ironic with the whole Devyani Khobragade thing going on lol.

I agree this is a problem with any form of democracy, but I don't see how this is relevant to FDI specifically.

That was an example. There are issues that people are too close to, and they need to be handled by 'specialists' who are neutral. Rather than interest groups voicing their emotions and opinions without understanding the dynamics of a decision.

Now we know we should opened up a lot earlier.

I'm going to stop you here. Why do you believe this? China was accepted into the WTO only in 2000.

India was bound by it in 95, I think. But regardless, that doesn't really prove anything. We should have opened up aroung 80s, according to the general consensus, since that was when the utility of our licensing Raj started becoming negative and small scale industries began relying on the licences keeping out competition, rather than boosting themselves to prepare for the incoming competition. I can look for papers regarding this, if you're interested.

Yes, this is the consensus as to what is holding back Indian development vis a vis China, which has no qualms whatsoever about displacing millions of people against their will to achieve economic goals.

Exactly.

Ah well, not exactly. We weren't investing as much we were giving out freebies. Small businessmen were protected to a fault, India was socialist at its conception. It was all excessive expenditure on things that curtailed productivity. Export import duties, nationalised banking and insurance and the likes. It was more of a collapse of socialist economy.

Ok, now this happened in China as well. WTO entry for China forced it to emphasize private enterprise over socialistic SOEs, both for "fair trade" considerations and for China to become more competitive. In China the SOEs ran into massive non-performing loan problems which were shelved by the CCP into "asset management companies" (AMCs) (http://en.wikipedia.org...) that were reminiscent as to how America dealt with its savings and loans crisis via the Resolution Trust Corporation. (http://en.wikipedia.org...) I suppose this is where your point about participatory democracy comes in. In China they just forced people out of the SOEs regardless of public sentiment.

The picture in China is extremely complicated...I don't fully understand it myself and it was my major in college...there is a local dynamic that effectively pushes against the CCP (communist party apparatus)...this is reminiscent of China's local gentry working with the imperial throne. It was neither top-down or bottom-up...it was symbiotic. None of this gets Western press...all you hear about is the overbearing CCP ruining people's lives. That is only half the story and is grossly inaccurate. There are reasons why over 90% of Chinese think their lives are getting better economically that run against "official" Western commentary on China.

The WSJ used to do daily "page one" spreads on China which broke this mold, but that has since ceased after the Fox buyout.

This is extremely interesting. We did study about SOE's and their progressive incentive structure this semester, but the general consensus was that it couldn't really sustain in India, because of the socio economic differences. China is interesting, and I'd say I agree that the West (and India, too, to some extent) doesn't really give justice to China. We can learn a lot from their models. Especially political experiments. I'll answer more in your next post.
Cermank
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12/17/2013 10:36:19 AM
Posted: 2 years ago
At 12/17/2013 7:54:20 AM, wrichcirw wrote:

Ok, there are two separate dynamics operating here that need to be separated from each other.

There is the "free market vs centralized economy".

There is the "democracy vs some form of autocracy" dynamic.

In America, we have a mixed economy and something that leans more towards democracy than autocracy.

In China, they have vestiges of a centralized economy but in reality are heading in a "free market" direction whereas in America we are headed in the opposite direction. However, China doesn't have a democracy and has a one-party rule.

In India, my understanding from what you've said is that they also have vestiges of a centralized economy although I don't know what India's economy can currently be characterized as, and they have something that is far more democratic than even what we have in America.

Parliamentary democracy, kind of like the European system. Although we *might* adopt the referendum type democracy in 2014. But presently, we chose our representatives. They discuss in the Parliament and come out with laws. (This is the Lok Sabha). These people elect the people of a even higher (Rajya) Sabha, and the laws made by Lok Sabha are passed through Rajya Sabha and finally signed by the President (who is more of a nominal head). I don't know where it stands on the democracy scale.
---

So, to parse the bolded statement:

1) Politically, opposition in China is silenced, so you simply cannot say "everyone" is better off, and
2) because China experienced a gigantic expansion of their Gini coefficient post-WTO, there is absolutely no reason to think economically that "everyone" truly is better off...merely that due to poverty alleviation China has achieve a good measure of Pareto efficiency, and even that is questionable given the lack of independent studies to verify the statistics...every mouthpiece there is state-run.

I took a vacation in China, and during a train ride, the people voiced in hushed whispers criticism of Jiang Zemin (former head of state) - they noted that such criticism was a criminal act.

Yes, people are very optimistic there, but migrant worker life is a miserable life, even if it pays better than rural life.

Then there is the issue of exactly what happened to all of the people who got evicted from their homes as China pursued infrastructure development. The CCP owns the press, so it's difficult to ascertain their fates. This is more evidence that "everyone" is not better off in China.

Now, in India, I believe the Gini coefficient is not as bad than it is in China. This may be due to lack of economic development that would cause Marxist inequality (marginalization of labor), counterbalanced by India's traditional caste system structure which exacerbates inequality. Correct me if I'm wrong on this account. Regardless, is everyone better off in India? Yes, I think you can say so, and this would be because of the democratic institutions in India. In India they listen to everyone, lol. The main problem is that this does not lead to optimal growth, just an assurance of Pareto-optimal growth.

In America, democracy allows for labor to have a say in the political system to no small degree. In China, labor only has a say if they threaten rebellion. Why? Because in a capitalistic society like China is fast becoming, labor gets marginalized.

[possible tl;dr segment]

I looked this up a bit to see if I could corroborate the bolded stance. Apparently there are nationalized trade unions in China...this aspect of labor dynamics was not covered in any of the courses I took in Cal. In Cal, there was only one course on Chinese economics, labeled, of course, "Chinese economics", lol. It dealt mainly with economic history, the macroeconomic picture, and international trade relations.

I took another course on Chinese geography, which was apparently different from Chinese geology in that geography apparently is a social science, lol. We dealt with some issues of labor dynamics, mainly migrant workers and the aforementioned CCP vs localities dynamics, but not of organized labor. The picture the lecturer painted was essentially that life is tough in China - we had a guest lecturer that lectured about "garbage in China", how "recycling" in China dealt with masses of people coming through garbage "imported" from the developed world, i.e. junked computers and what not...the point apparently being that labor was being marginalized in China and that there are massive issues dealing with inequality in the country. Keep in mind that Cal Berkeley is probably the world's premiere socialist intellectual institution, so it's extremely difficult to get a pro-libertarian perspective while in attendance.

[end tl;dr]

Hopefully this adds a bit of clarity. Again, it's an extremely complex, multidisciplinary subject that would probably take a small army of PhDs to adequately ascertain.

I want to go to China.

Anyway, that is interesting. Obviously we can't adequately ascertain anything in Economics, but I guess what we can take out from this is the dynamics of a one party non democratic system. As far as what we read this semester on China, it IS much better than India in almost all the growth parameters. Precisely because they can make faster decisions and the incentive structure of the officials is very progressive, as oppposed to the Indian structure. The exact phrase was something like, "the performance at the state level is interlinked with their promotion structure on the Central level", as in, they can be promoted to the centre if they do good. Which is obviously good. Whereas in India, it's much more Centralised, and the incentive structure is much more fudged.

The point being, it's all very messed up. I think there are a lot of amalgams (can't find a proper word here) of political structures- like, in China for example, combining what I know with what you just told me- it's a centralised one party economy, with independent states, with the elected officers given proper incentives to develop even when there is a stick on their heads (of the centre).

I guess what we CAN do is differentiate the participatory democracy feature from this and understand where THAT stands. There is no participatory democracy in China. In India, (which is again an amalgam), there is participatory democracy in villages. And Chinese growth is much better than that of Indian growth.

I wish we had an example, pure example of participatory democracy. I could ascertain my hypothesis then. I imagine it would be an extremely socialist economy with little liberalization. I can'tt see how people would overcome their biases and vote for policies that'd hurt their short term growth. Why would anyone vote for fuel price deregulation, for example?
wrichcirw
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12/17/2013 12:47:34 PM
Posted: 2 years ago
At 12/17/2013 10:09:56 AM, Cermank wrote:
At 12/17/2013 6:47:07 AM, wrichcirw wrote:


I don't see how FDI dynamics would operate against the people's interests. The populace has vested interests in seeing FDI pan out well. If investment in India proves to be productive, it will attract more investment into India. This will raise living standards across the board.

Would you, a producer, want more competition when you have the power to restrict it? And enjoy being comparatively good? Would you want more competition?

Well, the idea is that more FDI could simply go to the same business. I don't see competition as a necessary aspect of FDI...

Of course it's more prudent to have FDI when we can afford to, and the rationale is exactly what you explained. But normal people don't realize it, that is exactly what I mean when I say people are 'too close' to an issue to understand when something might pay off in the longer run.

lol, it sounds like the opposite is true, that people are so "far away" from the issue that they do not recognize the impact of FDI. This is the perennial problem of democracy, the electorate has to be educated, but you can't restrict voting by education.

Basically, there are two interconnected arguments here-
1. People would not be willing to forego short term benefits to avail long term growth. Eg. FDI. When producers would have to develop better technologies to compete with foreign companies, and put in costs to upgrade themselves- even though it is benefitial for the country in the long run.

I don't understand the relevance of the underlined. This will happen in any publicly traded corporation due to pressure on the quarterlies from shareholders - most shareholders (retail and institutional) are not particularly interested in long term corporate strategy, unfortunately. It's not relevant to governance.

2. People do not know the dynamics of what is required to ensure that a decision is successful. Most of the decisions aren't one-off decisions, i.e., it's isn't just a yes (or no) to FDI and everything being alright. There are intricacies involved in the decision (Say, defining the forms of FDI, the sectors in which FDI is allowed and the likes), and much of the success of the policy depends on whether those conditions are fulfilled. Considering in a participatory democracy, we have people who are not specialised in the intricacies, and more of power group lobbies with assymmetric power (i.e. say, corporates would be more organized than consumers. Their interests more pronounced than consumers), the decisions wouldn't really be balanced and geared towards the betterment of the society as a whole. There would be much more chance of a failure.

The idea is that it's not necessarily "yes or no" as much as "proposal #1 vs proposal #2", the idea being that either proposal would be successful, it's just a matter of how successful and who would succeed. A democracy can figure that out better and more fairly than other forms of governance.

If it was a matter of "failure", that would essentially be "life or death" decisions at the government level, since you're now talking about government failure and possible dissolution. This becomes much more of a military matter, IMHO. This is why the Asian model (from which China is learning) is almost synonymous with martial law in its formative stages, and why China does not care very much about human rights right now.

India isn't really a participatory democracy right now, at least to the degree I'm contending in this answer. It's more of a representative democracy, we chose our representatives and they make the decisions. (The party who won the state elections is looking for referendum level of participatory democracy- we are actually supposed to sms them over whether or not they should form the government in Delhi.)

I'd say I agree with your geopolitical wala point, but is it really that potent now? I seem to recall that India has started declining a lot of aid, if that's correct. I'll have to google, but I think we were moving towards more self reliance. Plus, that's so ironic with the whole Devyani Khobragade thing going on lol.

lol, I don't know what "wala" means. Regardless, it's always relevant IMHO. Politics always trumps economics. As China grows, it will only become more relevant and more pressing for the West. I just did a team debate about it actually, whether or not the US should militarily occupy southeast Asia to contain China:
http://www.debate.org...

That's interesting about the Indian situation. I wouldn't mind learning more about that if you can point me in the right direction.

India was bound by it in 95, I think. But regardless, that doesn't really prove anything. We should have opened up aroung 80s, according to the general consensus, since that was when the utility of our licensing Raj started becoming negative and small scale industries began relying on the licences keeping out competition, rather than boosting themselves to prepare for the incoming competition. I can look for papers regarding this, if you're interested.

Sure. Something with an executive summary would be preferable. (key word, summary) =)

This is extremely interesting. We did study about SOE's and their progressive incentive structure this semester, but the general consensus was that it couldn't really sustain in India, because of the socio economic differences...

I don't know if you did a comparative, but my point was that SOEs are getting phased out in China due to WTO entry. Their socialistic model did not accommodate for competitive profit-making, so they were creating massive losses for the CCP. Ironically the ones that survived proved to be some of the best investments in the world in the 2000s decade, although IMHO this is courtesy of the negligence of Bush II.

I want to go to China.

lol, I'd recommend it only for business. I went to the "West Lake" which is supposedly famous for its serene views and what not, but it was so damned smoggy you could barely see 100 meters in front of you.

It's absolutely unbridled capitalism though. A bit frightening actually.

...I guess what we can take out from this is the dynamics of a one party non democratic system. As far as what we read this semester on China, it IS much better than India in almost all the growth parameters. Precisely because they can make faster decisions and the incentive structure of the officials is very progressive, as oppposed to the Indian structure.

Yes.

...the performance at the state level is interlinked with their promotion structure on the Central level", as in, they can be promoted to the centre if they do good. Which is obviously good. Whereas in India, it's much more Centralised, and the incentive structure is much more fudged.

I don't quite get what you mean. Success in China is a lot about access to the CCP. It's quite centralized there too. I think this characteristic is core to the Asian model, except that in Japan/SK/Taiwan, it's less about access to the government than access to the mega-conglomerates that control the government, i.e. Toyota, Samsung, etc...lots of apartment buildings and construction projects in SK have Samsung's name on them, for example. Most people would be surprised by that fact.

I wish we had an example, pure example of participatory democracy... I can'tt see how people would overcome their biases and vote for policies that'd hurt their short term growth.

This is a problem in any form of democracy. It's a big reason why the US is floundering right now, IMHO. Still, democracy was how the US got to where it is in the first place, so it can't be all that bad. =)
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
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12/17/2013 12:50:55 PM
Posted: 2 years ago
At 12/17/2013 8:12:50 AM, wrichcirw wrote:
At 12/17/2013 6:05:27 AM, ClassicRobert wrote:
I'm not fond of participatory democracy. Add that many more people to the decision-making process, and it will become even more time-inefficient. Also, as it gets closer to mob rule, I see individual rights minimized for the sake of the "betterment" of the collective (or at least the escalation of the majority's views into reality), and I do not see that as particularly desirable.

This doesn't make any sense. Why isn't the interests of everyone particularly desirable?

Just to clarify, if the interests of everyone are not preferable compared to the interests of "individuals", then what gives these "individuals" the right to exclude gigantic swaths of the population, i.e. "everyone"?

This is contradictory...you are excluding huge numbers of "individuals" for the sake of "individual rights".

The idea is that yes, there is massive dilution of opinion in a democracy, but it's better that everyone's voice get heard regardless. The only real merit to "limiting" democracy comes in your argument about efficiency.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
CarefulNow
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12/17/2013 7:53:26 PM
Posted: 2 years ago
The optimal balance between participation and centralization is achieved when the size of the nested council, to the power of itself, is equal to the population, which is achieved in a population of 7 billion at approximately ten persons.
unitedandy
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12/18/2013 4:19:52 PM
Posted: 2 years ago
I've never understood why anyone would be against it, except for pragmatic reasons (which can be greatly reduced given the internet and so on). At the very least, most major issues should be decided in such a way (particularly with regards to taxes and spending).