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Monday , August 24 , 2009

Global C risis represents failure of US capitalism

Posted by Thanong , Reader : 1109 , 15:04:24

Global Crisis represents failure of US capitalism Nobel laureate Joseph Stiglitz last week advocated the creation of a new global reserve system that would provide a viable venue for countries to invest surplus funds. Speaking at an international seminar in Bangkok hosted by the Nation Multimedia Group, he said Asian economies would recover if they were successful in decoupling their dependence on export-led growth to Western economies. "Developing education and closing the knowledge and IT gaps will allow Asian economies to sustain future high growth rates," Stiglitz said. Prime Minister Abhisit Vejjajiva, presided over the opening ceremony of the seminar, entitled "Asia: Road to a New Economy", said economic decoupling would be a big challenge for Asia. On the US dollar, Stiglitz said the currency's role as a good store of value was now "questionable". "The current system of using the US dollar as a reserve is in the process of fraying," said the Nobel laureate. A new global reserve system should result in more stable, stronger and equitable global growth. Speaking before a packed house in the Plaza Ath้n้e Hotel, Stiglitz also said the present global economic crisis represented a colossal failure of the unregulated US free-market system. "The current crisis, which is the worst since the Great Depression, represents a failure of American-style capitalism," he said, adding that no one in the West really learned from the 1997 Asian economic crisis, because it did not spread to the developed countries. He said that most people mistakenly believed that free-market policies advanced by the Western economies were a success despite the terrible effects they had on countries in the region. "It reinforced the overall view that the overall system was working," Stiglitz said. He said in reality, the largely unregulated free-market financial system was working only because of repeated government bail-outs. The financial markets were repeatedly saved from their failure to allocate capital and manage risk properly. The present global financial crisis and failure of US-style market capitalism, Stiglitz said, highlights the critical need to rebalance market, state and other stakeholders' roles in society. "It points out that the basic self-regulation Basel II framework was an oxymoron," he said. Self-regulation simply cannot work because often-uncontrollable "externalities" were pervasive. "The financial markets have shown they have enormous external effects on the rest of the economy," he said. The inordinate risks undertaken by a few US banks and insurance companies did not affect only their shareholders. "Their bad behaviour has devastated our home-owners and taxpayers, costing billions of dollars," he said. Moreover, their actions have caused often-lethal external effects. Globalisation has led to closer integration, which requires more collective action at the global level. "However, we don't have the institutions or mindsets to address these problems. We have been building a global economy without constructing an appropriate legal and institutional framework," Stiglitz said. He said no organisations had misallocated capital resources as much as the US private sector in the past decade. "Although innovations are largely good for an economy, the US financial-sector innovations in the past decade did not enhance the economy," he said. Instruments like credit-default swaps that were supposed to mitigate risk instead became "financial weapons of mass destruction". As a result, the US now has economic and social problems. "Almost 2 million Americans have lost their homes," he said. The financial crisis has highlighted the growing inequality in many nations and the reduction in aggregate demand. To address the crisis, Stiglitz said national policies must be reformulated. "We can't say that this has been a once-in-a-100-year storm, because this has been a man-made crisis caused by flawed economic policies," he said. Governments must begin understanding that materialistic societies based on maximising consumption are not viable. "Wasting resources to increase consumption is not a sustainable economic model," he said. Stiglitz praised Thai and Bhutanese initiatives to develop new ways of measuring economic progress. "GDP may not be good for measuring economic well-being from a broader societal view," he said. @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ Time has come for Asia to forget the US market, look to its home potential Published on August 24, 2009 Believe all the optimistic economic recovery forecasts if you will, but, according to Nobel laureate Joseph Stiglitz, the thrill ride has just begun. Excerpts from his interview with The Nation editor-in-chief Suthichai Yoon, the first in a two-part series: You're quite pessimistic about recovery of the American economy. Why so? Well, I'm optimistic that the worst is over. We had this complete credit contraction but that part is over. Question is whether we will be quickly on a robust road. I'm pessimistic about that. Even if banks keep recapitalised, they will have learned their lessons, so they won't be lending so recklessly. And so the debt-based US growth model is over, at least for a while. And that means that we will have a shortfall. More savings are only good for the long run. But then we have to ask what's going to make up for the reduction in consumption. And investment won't do it because investment won't come in if consumption is weak. Export can't do it if the global economy if weak. Government is filling the gap for a while but we had too big a deficit, and many people say we can't continue on the basis of deficit spending like that. So, when you look at all categories, there's no basis for a robust recovery until the rest of the world gets going and until we can do some restructuring at home. Do you think the Asian and American economies can be decoupled? Growth in the past in Asia was heavily dependent on exports to the US. But it's more decoupled now. Asia can rely on itself for increase in demand. You can't rely on the American market. You have no choice. You have huge domestic potential, large population base, people saving very heavily, and large demand for investment. You have all the ingredients for a strong aggregate demand. You have a reservoir of savings that can help finance that demand. So, yes, it's very clear that you now have a diversified production base, not just producing textiles. So why not? Every reason for Asian growth to feed on itself. Do we need to do anything more to be really independent? All the economies in East Asia were export-oriented, even China's, or especially China's. You are export-oriented to America. If you become more oriented to regional growth, that will take some changes of structure. The goods you produce may not be the same goods as the ones for the American market. With necessary changes, it can happen relatively quickly. China and India - are they competitors, rivals, or are they friends? I think that right now they have a high degree of complementarity. China has been into more manufacturing, while India outsourcing and hi-tech. So, right now they are going on two different bases. But in the future there will be more overlaps. India does want to begin doing more manufacturing and China wants to do more of the outsourcing. But I think it is quite similar (between Europe and America). They have developed in the same areas with different competencies. Take automobiles. Europe has developed hi-tech automobiles - Mercedes or BMW- while America's gone for more big cars. That's an example of what we call product differentiation and the large market in Asia can provide that kind of differentiation. So in my mind I see that as an increasing richness of the economies. Asean, China, India - can they form a triangle that could really make Asia less dependent on America and Europe? Yes. Very much so. Now they have been developing the knowledge-base that will be able to provide some innovations and dynamic properties that will enable them to close the gap. How about Thailand and its chances of recovery? Well, I have been coming to Thailand now for 40-42 years and I've seen marvellous changes. The bouncing back from the previous crisis was very impressive. I think that it will probably recover robustly. Obviously, part of this will depend on (what happens globally). Is it still a V-shaped situation? Nobody is talking about V. Most people think it will be some version of a W, which means whenever we recover, it will get worse again. That's most likely and the debate right now is whether the next down-leg occurs in 2010 or 2011. Very few people are seeing a robust recovery by America. The news is overall not good but it isn't a surprise. You see, they say the stock market does well. Well, yes, but that's used for gambling. You've got a real indicator and that is consumers' spending, which is just as previously predicted- weak. And even the positive news is negative. For instance, profits are up, but why are profits up? Because companies are doing a better job at cost-cutting. What does that mean? They're firing workers. So, profits are up because they fire workers. And the enthusiasm that the increase in the number of unemployed is only a quarter million ... in normal time that would have been a disaster. Things are so bad that when people are losing a quarter million jobs, we think things are good. So when we look at it things are better than they were, the worst, but unless growth is 3 per cent, unemployment will jump. All the standard forecasts are seeing unemployment increasing to well-over 10 per cent. Now it's 9.3 per cent. But those numbers may not be good measures. Sometimes unemployment rates go down because people get so discouraged they don't even look for jobs. We have good measures that include those who get discouraged from working or working part-time because they can't find a job. That brings it to over 15 per cent. So one in six people can't get a job, or full-time work. So, how can we see a recovery when employment goes up? Exactly, the administration is saying recession is over and what they mean is the growth has become positive. For most citizens, they don't feel it, because what they mean is: can I get a job and am I getting paid well? And if the employment is going up, wages are going to be stagnant and insecurity is going to be high. Here in America if you lose your jobs you lose your health insurance. So, if you lose your job, you lose your home and you lose your health insurance, that's a disaster. Most Americans live in this state of precariousness of not knowing whether tomorrow they will get a pink slip meaning they are fired. And with that everything's over. How much confidence do you have in President Obama? Stiglitz: Well, I have confidence in his heart. He's been subjected to enormous political forces. Unfortunately, the financial market, which brought on this crisis, has played a disproportionate role in designing the strategy for dealing with this crisis. The special interests are dominating financial policy and are now dominating the healthcare insurance. Are his advisers to blame? Decision was made early on that we needed to get somebody with the confidence of the financial market. But the problem was the financial market had done so badly it didn't [have] the confidence of the rest of America. So [when] you've got somebody who's got the confidence of the financial market, you almost by nature [have] lost public confidence. What did they do with the bail-out money? They used it to pay bonuses. They used it to pay out dividends. They didn't use it to lend. So why didn't Obama take the appropriate action when he knew in his heart that he was spending his taxpayers' money to bail out the rich, the Wall Street people? Just speculating here. I think that at the time, he thought if he could get the financial market fixed, the economy will be fixed and if the economy is fixed, all will be forgiven even if it was unfair. If you fix the financial market, you will fix the economy and you will get away with murder. To me it is very clear that the financial market is only part of the problem. So even fixing it still leaves underlying problems. Illness in the financial market runs deeper than much of the financial market cares to admit. To me, throwing money at the financial market will lead not to lending but to the exact kind of behaviour that we had seen. What would you have advised the president if you could? I would have said simply "Play by the rules of capitalism". The rules say if a bank owes more money than it can pay, go to bankruptcy. The more you have the shareholders pay, the less you have to make the taxpayers pay. If you let the shareholders off the hook then you have more problems than you can answer. Ten years ago you [Thai people] know best about this. This is what the IMF and US treasury told you to do. And Thailand and Indonesia did that. So this is double standard? Very clearly double standard.

Global Crisis represents failure of US capitalism

Nobel laureate Joseph Stiglitz last week advocated the creation of a new global reserve system that would provide a viable venue for countries to invest surplus funds.

Speaking at an international seminar in Bangkok hosted by the Nation Multimedia Group, he said Asian economies would recover if they were successful in decoupling their dependence on export-led growth to Western economies.

"Developing education and closing the knowledge and IT gaps will allow Asian economies to sustain future high growth rates," Stiglitz said.

Prime Minister Abhisit Vejjajiva, presided over the opening ceremony of the seminar, entitled "Asia: Road to a New Economy", said economic decoupling would be a big challenge for Asia.

On the US dollar, Stiglitz said the currency's role as a good store of value was now "questionable".

"The current system of using the US dollar as a reserve is in the process of fraying," said the Nobel laureate.

A new global reserve system should result in more stable, stronger and equitable global growth.

Speaking before a packed house in the Plaza Ath้n้e Hotel, Stiglitz also said the present global economic crisis represented a colossal failure of the unregulated US free-market system.

"The current crisis, which is the worst since the Great Depression, represents a failure of American-style capitalism," he said, adding that no one in the West really learned from the 1997 Asian economic crisis, because it did not spread to the developed countries.

He said that most people mistakenly believed that free-market policies advanced by the Western economies were a success despite the terrible effects they had on countries in the region.

"It reinforced the overall view that the overall system was working," Stiglitz said.

He said in reality, the largely unregulated free-market financial system was working only because of repeated government bail-outs.

The financial markets were repeatedly saved from their failure to allocate capital and manage risk properly.

The present global financial crisis and failure of US-style market capitalism, Stiglitz said, highlights the critical need to rebalance market, state and other stakeholders' roles in society.

"It points out that the basic self-regulation Basel II framework was an oxymoron," he said.

Self-regulation simply cannot work because often-uncontrollable "externalities" were pervasive.

"The financial markets have shown they have enormous external effects on the rest of the economy," he said.

The inordinate risks undertaken by a few US banks and insurance companies did not affect only their shareholders.

"Their bad behaviour has devastated our home-owners and taxpayers, costing billions of dollars," he said.

Moreover, their actions have caused often-lethal external effects. Globalisation has led to closer integration, which requires more collective action at the global level.

"However, we don't have the institutions or mindsets to address these problems. We have been building a global economy without constructing an appropriate legal and institutional framework," Stiglitz said.

He said no organisations had misallocated capital resources as much as the US private sector in the past decade.

"Although innovations are largely good for an economy, the US financial-sector innovations in the past decade did not enhance the economy," he said.

Instruments like credit-default swaps that were supposed to mitigate risk instead became "financial weapons of mass destruction". As a result, the US now has economic and social problems.

"Almost 2 million Americans have lost their homes," he said.

The financial crisis has highlighted the growing inequality in many nations and the reduction in aggregate demand.

To address the crisis, Stiglitz said national policies must be reformulated.

"We can't say that this has been a once-in-a-100-year storm, because this has been a man-made crisis caused by flawed economic policies," he said.

Governments must begin understanding that materialistic societies based on maximising consumption are not viable.

"Wasting resources to increase consumption is not a sustainable economic model," he said.

Stiglitz praised Thai and Bhutanese initiatives to develop new ways of measuring economic progress.

"GDP may not be good for measuring economic well-being from a broader societal view," he said.

@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@

Time has come for Asia to forget the US market, look to its home potential

Published on August 24, 2009

Believe all the optimistic economic recovery forecasts if you will, but, according to Nobel laureate Joseph Stiglitz, the thrill ride has just begun. Excerpts from his interview with The Nation editor-in-chief Suthichai Yoon, the first in a two-part series:

You're quite pessimistic about recovery of the American economy. Why so?

Well, I'm optimistic that the worst is over. We had this complete credit contraction but that part is over. Question is whether we will be quickly on a robust road. I'm pessimistic about that. Even if banks keep recapitalised, they will have learned their lessons, so they won't be lending so recklessly. And so the debt-based US growth model is over, at least for a while. And that means that we will have a shortfall.

More savings are only good for the long run. But then we have to ask what's going to make up for the reduction in consumption. And investment won't do it because investment won't come in if consumption is weak. Export can't do it if the global economy if weak. Government is filling the gap for a while but we had too big a deficit, and many people say we can't continue on the basis of deficit spending like that.

So, when you look at all categories, there's no basis for a robust recovery until the rest of the world gets going and until we can do some restructuring at home.

Do you think the Asian and American economies can be decoupled?

Growth in the past in Asia was heavily dependent on exports to the US. But it's more decoupled now. Asia can rely on itself for increase in demand. You can't rely on the American market. You have no choice. You have huge domestic potential, large population base, people saving very heavily, and large demand for investment. You have all the ingredients for a strong aggregate demand. You have a reservoir of savings that can help finance that demand. So, yes, it's very clear that you now have a diversified production base, not just producing textiles. So why not? Every reason for Asian growth to feed on itself.

Do we need to do anything more to be really independent?

All the economies in East Asia were export-oriented, even China's, or especially China's. You are export-oriented to America. If you become more oriented to regional growth, that will take some changes of structure.

The goods you produce may not be the same goods as the ones for the American market. With necessary changes, it can happen relatively quickly.

China and India - are they competitors, rivals, or are they friends? I think that right now they have a high degree of complementarity. China has been into more manufacturing, while India outsourcing and hi-tech. So, right now they are going on two different bases. But in the future there will be more overlaps. India does want to begin doing more manufacturing and China wants to do more of the outsourcing. But I think it is quite similar (between Europe and America). They have developed in the same areas with different competencies. Take automobiles. Europe has developed hi-tech automobiles - Mercedes or BMW- while America's gone for more big cars.

That's an example of what we call product differentiation and the large market in Asia can provide that kind of differentiation. So in my mind I see that as an increasing richness of the economies.

Asean, China, India - can they form a triangle that could really make Asia less dependent on America and Europe?

Yes. Very much so. Now they have been developing the knowledge-base that will be able to provide some innovations and dynamic properties that will enable them to close the gap.

How about Thailand and its chances of recovery?

Well, I have been coming to Thailand now for 40-42 years and I've seen marvellous changes. The bouncing back from the previous crisis was very impressive. I think that it will probably recover robustly. Obviously, part of this will depend on (what happens globally).

Is it still a V-shaped situation?

Nobody is talking about V. Most people think it will be some version of a W, which means whenever we recover, it will get worse again. That's most likely and the debate right now is whether the next down-leg occurs in 2010 or 2011. Very few people are seeing a robust recovery by America.

The news is overall not good but it isn't a surprise. You see, they say the stock market does well. Well, yes, but that's used for gambling. You've got a real indicator and that is consumers' spending, which is just as previously predicted- weak. And even the positive news is negative. For instance, profits are up, but why are profits up? Because companies are doing a better job at cost-cutting. What does that mean? They're firing workers. So, profits are up because they fire workers.

And the enthusiasm that the increase in the number of unemployed is only a quarter million ... in normal time that would have been a disaster. Things are so bad that when people are losing a quarter million jobs, we think things are good.

So when we look at it things are better than they were, the worst, but unless growth is 3 per cent, unemployment will jump. All the standard forecasts are seeing unemployment increasing to well-over 10 per cent.

Now it's 9.3 per cent. But those numbers may not be good measures. Sometimes unemployment rates go down because people get so discouraged they don't even look for jobs. We have good measures that include those who get discouraged from working or working part-time because they can't find a job. That brings it to over 15 per cent. So one in six people can't get a job, or full-time work.

So, how can we see a recovery when employment goes up?

Exactly, the administration is saying recession is over and what they mean is the growth has become positive. For most citizens, they don't feel it, because what they mean is: can I get a job and am I getting paid well?

And if the employment is going up, wages are going to be stagnant and insecurity is going to be high. Here in America if you lose your jobs you lose your health insurance. So, if you lose your job, you lose your home and you lose your health insurance, that's a disaster.

Most Americans live in this state of precariousness of not knowing whether tomorrow they will get a pink slip meaning they are fired. And with that everything's over.

How much confidence do you have in President Obama?

Stiglitz: Well, I have confidence in his heart. He's been subjected to enormous political forces. Unfortunately, the financial market, which brought on this crisis, has played a disproportionate role in designing the strategy for dealing with this crisis. The special interests are dominating financial policy and are now dominating the healthcare insurance.

Are his advisers to blame?

Decision was made early on that we needed to get somebody with the confidence of the financial market. But the problem was the financial market had done so badly it didn't [have] the confidence of the rest of America. So [when] you've got somebody who's got the confidence of the financial market, you almost by nature [have] lost public confidence.

What did they do with the bail-out money? They used it to pay bonuses. They used it to pay out dividends. They didn't use it to lend.

So why didn't Obama take the appropriate action when he knew in his heart that he was spending his taxpayers' money to bail out the rich, the Wall Street people?

Just speculating here. I think that at the time, he thought if he could get the financial market fixed, the economy will be fixed and if the economy is fixed, all will be forgiven even if it was unfair. If you fix the financial market, you will fix the economy and you will get away with murder.

To me it is very clear that the financial market is only part of the problem. So even fixing it still leaves underlying problems. Illness in the financial market runs deeper than much of the financial market cares to admit. To me, throwing money at the financial market will lead not to lending but to the exact kind of behaviour that we had seen.

What would you have advised the president if you could?

I would have said simply "Play by the rules of capitalism". The rules say if a bank owes more money than it can pay, go to bankruptcy. The more you have the shareholders pay, the less you have to make the taxpayers pay. If you let the shareholders off the hook then you have more problems than you can answer.

Ten years ago you [Thai people] know best about this. This is what the IMF and US treasury told you to do. And Thailand and Indonesia did that.

So this is double standard?

Very clearly double standard.

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comment 73
Thanong date : 28/08/2009 time : 15.23
http://blog.nationmultimedia.com/thanong

Felix;
Your world view will collapse next year.

Please read this blog from http://theburningplatform.com/economy/the-federal-reserve-must-die-1
.
Was the 2008 Financial Collapse An Inside Job?

Maybe it’s the smoke from Mt. Vesuvius that keeps Arianna Huffington and the financial community from seeing that the economic collapse has nothing to do with the Fed "missing" the warning signs leading up to the October meltdown.

“Things do not happen. Things are made to happen.” John F. Kennedy

The Fed didn’t miss anything; the October meltdown was an inside job.

Capitalism never made sense

Professor Ebeling, the Ludwig von Mises professor of Economics at Hillsdale College, understood something was wrong when he wrote: "the perverse development and evolution of historical capitalism, the institutions necessary for a truly free-market economy have been either undermined or prevented from emerging."

But when he claimed, "it is the principles and the meaning of a free-market economy that must be rediscovered" in order to overcome the burden of historical capitalism and save liberty, he should have written that principles must be rediscovered in order to prevent the planet from attempted murder (ecocide).

American "capitalism" and our consumer economy never made economic, environmental or common sense—unless the goal was ecocide.

Capitalism and a not-so-free market economy based on consumer products, that is, products we are manipulated to want, not need, was never sustainable. Consumers consume…the resources of the planet.

Who is responsible?

Arianna said it’s time to "recognize the natural order of things: that is, the very people responsible for the economic collapse not only are still in power, but are still lining their pockets with outrageous windfalls -- courtesy of the American taxpayer.”

The people responsible for the October collapse, our Federal Reserve, also get credit for the windfalls of “Monopoly Money”, created out of thin air, which financed our consumer society.

They are the private credit monopoly of rich and predatory moneylenders that “prey upon the people of the United States for the benefit of themselves.” [1]

For the Benefit of the “middle class” is a more accurate statement.

Those predatory moneylenders gave the middle class the highest standard of living in the world.

Recall when the American economy appeared headed into a recession at the end of the dot-com bubble, the Federal Reserve began slashing short- term interest rates until they reached a historically low one percent. The move re-inflated the economy by allowing homeowners to extract $750 billion in equity from their homes—up from $106 billion in 1996—and apply the dollars toward a multitude of consumer items and other credit card debt.

As interest rates plummeted and alleged home equity artificially soared, buyers were able to afford first and second homes, and they did it by taking out risky mortgages with "teaser rates" similar to those offered by the credit card industry. Even as interest rates adjusted upward, the sponsoring banks used complicated financial derivatives to resell the risky mortgages as "asset-backed paper."

As housing prices edged downward and mortgage rates inched upward, the recession was put on hold with the help of an astonishing 10 to 12 credit card offers per month being delivered to some consumer mailboxes. The credit card companies issued 1.5 billion cards to 158 million cardholders and promised an improbable zero percent interest—some deals for up to 18 months. (Similar to mortgage debt, the credit card debt is put into pools also known as derivatives that are then resold to investment houses, other banks and institutional investors.)

Thank those rich and predatory moneylenders for the short-term interest rates and the liquidity that allowed the debt to be pooled, sold and resold.

But blame them because our hyper-shopping has wreaked havoc on the planet.

read the rest at http://www.marketoracle.co.uk/Article12874.html

Written 3 days ago

comment 72
FelixQui date : 28/08/2009 time : 14.05
http://blog.nationmultimedia.com/FelixQui

Another reality that some don't want to admit is that Buddhism is on the way out. As frequent complaints from the cultural watch dogs remind us, increasing numbers of Thai people, especially teh young, are Buddhist in name only.
Whether we think this is good, bad or neither, such personal choices on the part of many Thai people is the reality; it is very dubious to base any argument on the premiss that Thai people are practising Buddhists.

comment 71
FelixQui date : 28/08/2009 time : 13.37
http://blog.nationmultimedia.com/FelixQui

Thanong, re c.67 & 68,
I think that Janus' suggestions better fit our notion of what an elite is and what the Thai elite is. The people you listed are not elites, although some might also be members of the elite, they are simply exploiters of the farmers. They allied with the elite to keep the farmers tied to them. Part of that was restricting the farmers' right to buy and sell their own land. There is no good reason why Thai farm land should not be sold to non-Thai people who might wish to develop it. It does not cease to be Thai land because not Thai owned. The only reason for not allowing non-Thai ownership of farmland is unreasoning nationalism, and that is a far cry from patriotism, which wants what is genuienely best for a nation. In the worst case scenario you have painted, the farmers would at least have gotten a lot more if they did choose to sell their land at a fair price because competition was permitted, and that would seem to me to entail that they would be better off than losing their land for pittance, as is in fact the case.
Not being allowed to sell to a buyer of your choice is restriction on your freedom and a violation of your rights in your own property. And I repeat that I have no desire whatever to buy any farmland in Thailand - I have no vested interest in thailand's land laws. Indeed, keeping the people poor and dependent is personally in my interest, but I still hate it: I would much prefer to see the majority well off and living as they see best for themselves and their nation.

SInce it has been there all along, perhaps we must at least consider that Buddhism, so far from being the answer, has indeed been part of the problem? Because capitalism and the freedom that does with it has NEVER been tried, we know capitalism was not part of the problem, but Buddhism has been tried for centuries, and if the the current mess is seen, as you rightly see it, as grossly wrong, then the reasons for that MUST be something that has obtained over the decades in question, and that means that Buddhism is at least on the table as a possible cause, in a way that capitalism simply cannot be.

I think you are blinded to reality by your fantasy of an agrarian society: the Thai people have made their wishes very clear. They do NOT want to be farmers, tied to a little plot of land. They do NOT want their children to be farmers. They very reasonably and sensibly want what they see as a better life for their children and if possible for themselves, just as you do NOT want to be a farmer, and as I'm sure you do NOT want your daughter to be a farmer. That is the reality. Wishing it were otherwise is fine, but the only way you could return to the agrarian past would be to use force, of the Pol Pot, Stalin, Mao variety, and with the same ugly results.

Terrorists and the like do not come to Thailand because it's free, they come because corruption is rife and it's easy to buy freedom from justice. That said, I do think that Thailand is better than some countries in the freedom stakes, but certainly not number 1 or any where near it.

comment 70
Thanong date : 28/08/2009 time : 10.48
http://blog.nationmultimedia.com/thanong

Ian, I stand by my writing that Thailand is the freest country because we're Buddhists. But the poor can't fully realise that freedom because of the problems I have cited in my comment in #68.

comment 69
Ian date : 28/08/2009 time : 00.28
http://blog.nationmultimedia.com/anterian36

Thanong, I cannot accept this statement, "Thailand is the freest country in the whole world. The Thai people are very free."
However, if you mean freedom to starve, freedom to be unemployes, freedom to be ignorant and brainwashed, freedom to give money and food which they can ill afford to fatcat monks I would agree. I think many Thais would be willing to lose this freedom.
You are a very intelligent person but you seem to have these rose tinted spectacles permanently attached to your face, take a day off and visit my village, see this freedom you talk about.

comment 68
Thanong date : 27/08/2009 time : 22.29
http://blog.nationmultimedia.com/thanong

Felix:

The elites who exploit the farmers are the chemical fertilizer traders, the agri traders, the middlemen, the millers, the loan shark operators, the exporters, the provincial government officials, the farm policy makers, the agricultural bank officials.

This has nothing to do with freedom of choices or passing law to allow the farmers to sell land freely.

Now do you get it?\

comment 67
Thanong date : 27/08/2009 time : 22.21
http://blog.nationmultimedia.com/thanong

Ian, I agree. Felix does not understand agricultural land, which is protected. Foreigners now own a big chunk of Phuket and Samui and Pattaya already. I don't understand what Felix's argument is up to.

Felix is confused because he cherishes human rights, freedom and democracy so much that he is blinded by the reality. I have no more strength to explain it to him. He would like the government to change regulations so that farmers can sell their land freely to foreigners, which he said would result in the farmers' improvements in standard of living because they have freer choices. I don't understand his logic.

If the farmers lose their land, they lose their means of production. All Thai farmers should keep their land. The govenrment must instead do everything to return the land to them, help them to reduce their debt, and help them to improve yields.

Thailand is the freest country in the whole world. The Thai people are very free. I never have any complaint with my freedom. Can't Felix see that many of the terrorists, arms dealers and robbers are taking refuge in Thailand?

comment 66
Ian date : 27/08/2009 time : 19.53
http://blog.nationmultimedia.com/anterian36

This issue has become emotive because of patriotic confusion. In most countries land comes in three categories, each with seperate rules and regulations. They are agricultural land, residential land and industrial land.
The current issue is about agricultural land, but the implications reflect back upon the ordinary foreigner who simply wishes to buy a residential home and plot for himself and his Thai family.
If Thailand were to introduce land zoning laws it would clarify the situation.

comment 65
FelixQui date : 27/08/2009 time : 18.50
http://blog.nationmultimedia.com/FelixQui

Thaonng wrote: "Selling land is a one-time affair. After you get the money, you'll spend it all." This is the ugly old prejudice that Thai farmers are so stupid that they can't be trusted to make decisions for themselves.
It is as insulting to the majority of Thai people as it is false. Were Thai law to allow farmers the freedom to be responsible for themselves and duly protect them from whatever elites have screwed them for decades they just might do very well and make sound decisions as to what to do with the money that received from banks, preferably competitive and competent foreign banks, using their fairly valued land as collateral.
Other then repeating the offensive slight that they cannot competently make such decision, you have no basis for saying they will not do well because they have never been allowed such freedom or offered such protection.
I see no reason to believe that Thai farmers are any less intelligent or sensible than farmers in Australia or the US were they given half chance.

comment 64
FelixQui date : 27/08/2009 time : 18.43
http://blog.nationmultimedia.com/FelixQui

Thanong wrote: "But you must be able to identify the elite, who take advantage of the poor farmers. I don't think you and Ian know the correct answer."

So please tell us!
Or is it something that must be kept secret?

No. I have no interest in buying land in Thailand other than a condo, which Thai law now allows me to do. You are wrong to suggest that I have any vested interest in being concerned for the welfare of Thai farmers. The last thing I would want is a rice field or land in the middle of nowhere.

But please, please tell us who the elites are that have screwed the farmers.

comment 63
Thanong date : 27/08/2009 time : 15.05
http://blog.nationmultimedia.com/thanong

Felix:

Selling land is a one-time affair. After you get the money, you'll spend it all. If we sell all of our land, we won't get richer. Land is the means of production of the Thais -- not factories. The Thais must own land and improve yields. After they live within the sufficient level, they will have the surplus. The savings will come from the surplus. Most of the Thais are saddled with debt. Their land is pledged with the local loan-shark merchants or agricultural bank.

Now agriculture has been ignored to the point that it accounts for only 10 per cent of GDP output. The government must set a target to raise agricultural output to 20-30 per cent of GDP over the medium term. We might get nominal income less from agricultural products, but we'll have a cleaner country, free from industrial waste, and more stable economic system. Factories are closing down by the way from overseas competition and collapse of global demand. Thailand is an agricultural country, but we have pretended to be a NIC or a financial centre. So all the wealth goes to the small 10 per cent of the population, without any trickle down effect.

We would want the farmers or the majority Thais to earn Bt15,000 to bt20,000 every month from more effective farm production rather than selling off their land to other Thais or foreigners for Bt5 million or Bt10 million. Soon, the money will disappear. You are speaking from your vested interest because you dont' find that you can buy land freely in this country. That should be the case. The farmers and the poor have been bullied enough.

But you must be able to identify the elite, who take advantage of the poor farmers. I don't think you and Ian know the correct answer.

comment 62
Plaadip date : 27/08/2009 time : 13.27

WCH, thank you. So the social basis for the "new economy" may have not existed already.

comment 61
wch date : 27/08/2009 time : 12.39

One of the biggest land hoarder of Thailand is Soon Hwa Seng group (AA copy paper producer, cassava chip exporter, woodchip exporter). They amassed at least 200,000 rais.
This Hakkan descents closely linked to PRC government and Chinese capital.

comment 60
wch date : 27/08/2009 time : 12.29

70 % tenancy is the figure published by ministry of agriculture. Local media dealt in who's who in the most land hoarderers. Once of them is the owner of Beer Chang. Their target was 20,000 rais.
Now media is talking about Foreigner's hoarding rice paddies. This is not really true.

Most of Thai agro-related companies, big groups has their own paper companies registered in Singapore, Cayman Islands, Burmuda Isalands or even in Hongkong and PRC.
They hoard the land under name of those paper companies who are legally " FOREIGNERS".

Siamese kingdom is virtually a serfdom, left existent until modernday.

comment 59
Plaadip date : 27/08/2009 time : 09.38

WCH, is there a report on the decling ownership rate that you can recommend? I know the trend, but did not think the situation went so worse.

comment 58
wch date : 27/08/2009 time : 08.54

So called, Golden Rice Bowl of Middle Chaopraya river basin, rice peddies are being cultivated by 70% tenants, 500baht per a rai per year is formal rent fee.

Isan region is little better. Of my 100 household village, the biggest land owner owns 100 rais, the least is none. This village was built 50 years ago, under rehabiliation program and about 30 households were given equally 10 rais each.

Demo's land initiative - a community to own communal land in joint ownership is ideal to common Isan villages however,

The Golden Rice Bowl must be dealt in REVOLUTIONARY MODE.

Democrats has pursued the land reform initiative, the political achilles and that is why the elite immortalium dislike the democrat.

The south, expecially Sonkla, Satun, Trang, Ranong, Panga, Phuket, Surat Thani Pattalung, Nakorn Si Tharmarat provinces, the land was fully grabbed by the Bangkok elite people and politicians and the force was spreading down to 3 muslim provinces. Now they resist.

comment 57
FelixQui date : 27/08/2009 time : 07.34
http://blog.nationmultimedia.com/FelixQui

Thanong, re c.54,
No, that is not my logic, and I'm surprised you came to such a misunderstanding given teh evidence below. I explained my reasoning in my earlier comments: read them again. Allowing a free market for land would increase its value for farmers, whose land could not then be snapped up for a pittance by greedy Thai elites who have manipulated the anti-foreign ownership to allow them to cheaply buy it up. And the other benefits I've outlined below for Thailand's economic and social development.

Now: you said you would tell us about the elites. Who are they in your opinion?
And what is your promised explanation for the current inrquitable distribution of wealth and land in Thailand?

As already stated, I believe that one of the underlying causes is that capitalist free market principles have NEVER been permitted in Thailand, but that economic control systems more similar to communism or fascism have been the norm to the benefit of a tine elite. What do you think went wrong?

ANd I'm still in perplexity about the causal connection you have posited between industrial waste and human psychology. How on earth is reducing industrial waste going to result in a reduction in human greed to make possible the rise of your new economic system?

And the final question, as others have also asked: what are you going to do aboutthe fact that the overwhelming majority ot Thai people clearly want no part of sufficiency economics, Buddhist economics, or whatever you want to call it? (OK, I've overlooked the connection between industrial waste and human desire, so perhaps that will provide the answer here as well.)

comment 56
Plaadip date : 27/08/2009 time : 00.35

Felix, I've got shocked to find an article (credabiliy is questionable) that in Thaland the rate of tenant farming had increaded to 70 percent in 2006 from 20 percent for last 20 years. If this report is true, it's possible that 10 percent own most of the land. (But it can be 51 percent anyway.)

But I still can't believe this article, because if the figure was true it was almost as bad as the situation in the philippines in 1980s before the agrarian reform.

And if the figure is true, the government should start with the compulsory re-distribution of land to realize Thanong's idea. I guess.

comment 55
lurker date : 27/08/2009 time : 00.20
http://blog.nationmultimedia.com/lurker

Felix-

When you say foreigners, you must mean western foreigners, because Chinese and Indian foreign immigrants already own most of the prime real estate in Thailand. In Bangkok, for example, who owns the prime real estate?

The Crown Property Bureau
Aristocratic families who inherited the land from serving the king, like the Bunnag family.
Sikh-Indians
And property development companies owned by the Chinese.

Upcountry, most ethnic Thais settled and developed the land for rice and agricultural products, but they went into hock, mostly to Chinese middlemen, and now they own the farmland also.

So Thailand tried semi-liberalization and it failed. Now most of the land is in the hands of the CPB, the aristocracy, and the Chinese and Indians.

They don't want to change the system because they like the system the way it is.

Notice that foreigners can't own land in China and India either, but the Chinese and Indians gobble up land all over the world. Of course they are hypocrites but nobody cares that they are hypocrites.

Historically in Thailand, all land belonged to the king. He basically said you can go and live on whatever land you want as long as you develop it. However, nobody actually owned the land. The king always reserved title.

During the European imperial era, Thailand liberalized its land laws and the whole notion of "owning the land" came into effect. There was a time when Europeans had a right to own land and business in Thailand outright.

But that changed with the 1932 Revolution and the anti-foreigner(western) laws were passed that basically did away with those rights. Foreigners could own their own business in Thailand outright also before the 1973(?) foreign business act. Actually, the foreign business act came into being against Japanese domination of the economy.

Guess who were behind those laws? The Chinese.

Felix, look at how the Chinese operate in business. They are smart. It is all about monopoly and control.

They did it in Indonesia, the Philippines, Vietnam, Malaysia and now in Burma, Cambodia and Laos. Westerners can't own land in any of those countries.

They manipulate the system where they have the power and control and systematically keep the westerners out.

I hate to break it to you Felix, but the Chinese don't subscribe to classical liberal ideals.

They will use racist sentiment against westerners to keep power for themselves and everybody else excluded. They are doing that in Africa as we speak. And they will use the race card against Americans when Americans wake to the fact that they are enslaved to Chinese capital. Guess the reason why all those American banks and AIG were bailed out in the US? The Chinese have large stakes in those companies and the Chinese lobbied the US government to bail them out.

By the way, Felix, the fact is that if Thailand did liberalize its land laws, Thais would have little to fear of the West, which is always the excuse; but, imagine if Chinese, Indian and Arab nationals had full access to land ownership, the outcome will not be pretty.

comment 54
Thanong date : 26/08/2009 time : 22.21
http://blog.nationmultimedia.com/thanong

Felix: do you understand basic economics? Let me ask you a simple question: Will you sell me your house in Australia in exchange for paper notes that I print in my garage?

If selling the land in Thailand to foreigners is a way to solve poverty in Thailand, then let us put Phuket, pattaya, samui on the auction block. Let us sell Krabi to Singapore, Phang-na to Hong Kong and Hua Hin to Sweden.

After that we distribute the money from selling the land to the foreigners to all the local people. Then we can get rid of all the poverty forever. Is that your logic?

comment 53
Plaadip date : 26/08/2009 time : 21.02

Thanong, you are talking about the percentage on value basie not area basis, right? Then it may be possible.

comment 52
FelixQui date : 26/08/2009 time : 20.37
http://blog.nationmultimedia.com/FelixQui

Sorry - 10% own most (not 90%) of the land.
Do you know what % the 10% own?

comment 51
FelixQui date : 26/08/2009 time : 20.34
http://blog.nationmultimedia.com/FelixQui

Thanong, re c. 50,
I think the tiny elite are the law makers and those who buy them who have consistently refused to allow Thai people the freedom to own, buy and sell land as they might wish. The most egregious example is the persistent failure to allow people to sell land to foreigners. This played directly into the hands of your 10% who now own 90% of the land and who continue to buy it up cheaply, which you rightly point out is a great evil in Thai society. I have argued that had Thailand followed healthy capitalist practices, and perhaps added some legal prohibition on excessive concentration of land ownership, that this situation would not have arisen, would not now be worsening, and that Thailand would now be more developed than it is and the Thai people better off on average as a direct result of the direct investment of capital, skills and technology that would thereby have been accelerated over past decades.
Now, who was that 10% you wish to roundly chastise for using the law to create such unjust inequality?
Who do you think has not permitted Thai people to truly own their land, and sell it as they see fit?
Who do you think has enabled the current inequality?
Is your tiny elite the same as or different to mine?

I am most interested to hear your explanation for the current situation with regard to land ownership; however, since it has never been permitted in Thailand, the answer CANNOT be US style capitalism, which would have allowed the poor farmers to sell their land at a fair price to whoever was interested in buying it.

And are you going to answer my questions in c. 47, about which I truly am perplexed.

comment 50
Thanong date : 26/08/2009 time : 19.24
http://blog.nationmultimedia.com/thanong

Felix: Tell me first as to who exploit the poor farmers. Who is the tiny elite that you are talking about? Then I'll explain to you your misunderstanding of the Thai situation.

comment 49
Plaadip date : 26/08/2009 time : 18.43

Felix, I think you may misunderstand SPK is only land title the farmers pocessed.

Thanong, "10 per cent Thais own most of the land in this country" Is this figure correct? I saw this figure in some reports, but I can't believe it.

comment 48
FelixQui date : 26/08/2009 time : 18.26
http://blog.nationmultimedia.com/FelixQui

Thanong, re c.46,
In what way do I not "understand the thai economy" and "the system".
I explained what I think has gone wrong, and how the Thai system has NEVER been capitalist, free market or free in any worthwhile way, and then sketched in why I htink that is the explanation for the facts you insisted on.

Simply claiming that I don't understand is pretty weak. Tell me where my understanding is wrong and I can either agree with you or defend my c.42.

comment 47
FelixQui date : 26/08/2009 time : 18.25
http://blog.nationmultimedia.com/FelixQui

Thanong, re c. 45,
Could you explain how "regulating industrial waste by that amount" will have nay effect whatsoever on human desire?
I honestly cannot see any connection, nor am I aware of any study or other reason to believe that there is any such causal connection.

I think your wishful thinking is leading you into dangerous delusions. But I will be happy to admit my misunderstanding if you explain the connection between industrial waste and human psychology that you have posited.

comment 46
Thanong date : 26/08/2009 time : 18.17
http://blog.nationmultimedia.com/thanong

felix: Referring to your #42, you don't understand the thai economy. You don't understand the system.

comment 45
Thanong date : 26/08/2009 time : 18.14
http://blog.nationmultimedia.com/thanong

Felix: we reduce human desire by 25 per cent. that can be done by regulating industrial waste by that amount for the first step. We can do that.

comment 44
FelixQui date : 26/08/2009 time : 17.08
http://blog.nationmultimedia.com/FelixQui

Thanong wrote: "we reduce the human desire by, say, 25 per cent" (c. 41).

How do "we reduce the human desire by, say, 25 per cent"?
Who is the "we" that is doing teh reducing?

comment 43
Plaadip date : 26/08/2009 time : 17.07

Thanong, so how do you figure "the ideal state of Thailand" to yourself? Is that a state similar to Butan? If that is the case, Thai people won't agree to your idea, I guess.

And what Thai government shold do to realize your idea in its first stage? The revision of foreign investment law? More strict zoning regulation for agricultural area? Drastic increase in the budget for renewable energy? For example, what?

comment 42
FelixQui date : 26/08/2009 time : 17.04
http://blog.nationmultimedia.com/FelixQui

Thanong wrote:
"10 per cent Thais own most of the wealth in this country.
10 per cent Thais own most of the land in this country." (c. 40)

Thanong,
I am well aware of the above facts. They stem largely from teh fact that tiny elites have manipulated the system to benefit themselves whilst screwing the majority of the Thai people.
Let's look at land: the land laws are not capitalist. THai peasants are NOT permitted to sell their land freely because that would mean the elite could not rip them off and buy it up for a pittance. Were Thai people able to buy and sell land freely, without unjust state interference, the rice farmer's land would be worth far more, and the poorer owners would have a chance to get the real value. By not allowing foreign ownership, successive generations of elites have taken unfair advantage of the poor majority by refusing to allow fair market competition for land. The result is, as you have repeated several times, that "10 per cent Thais own most of the land in this country." The real cost to Thailand is even higher in lost development opportunities, employment and the like. The solution is capitalism, not the previous system that has so grievously harmed the great majority of the Thai people.

Ditto for poor and indebted: it's because anti-capitalist, anti-freedom, anti-competitive elites have used the state to control labour and business laws to their own selfish advantage along the lines of communist or fascist control economies, and that is why THailand has failed to develop economically as it might have and why there is such an ugly gap between the tiny elite and majority of the THai people.

The solution is liberal democracy and capitalim, not the previous paternalistic, control centred puyai systems which have more in common with hardline communism or fascism, and which have, as you clearly show, miserably failed the great majority of the Thai people over the past decades.

comment 41
Thanong date : 26/08/2009 time : 15.56
http://blog.nationmultimedia.com/thanong

Felix:
Western economics and your ideas are based on "human desire". That's why they are flawed theories and assumptions. Human desire knows no boundary, and in time it will create crisis because the desire that is not reined in developed into unsustainable greeds. In sufficiency model, we reduce the human desire by, say, 25 per cent. Yes, we are still having desire. But we control that desire to a more sustainable level so that we achieved a more balanced economic system, with very little or no debt, but preferring surplus.

US economy is debt driven; so do many companies.

comment 40
Thanong date : 26/08/2009 time : 15.28
http://blog.nationmultimedia.com/thanong

Felix: You love to preach freedom and majority choices. But you don't realise that the majority are poor and indebted. Please get the fact correct first. The majority Thais, 30-40 million farmers, are saddled with almost Bt500 billion in debt. Their land has been pledged with the banks. the majority Thais don't get basic education good enough. The majority live below the sufficient level.

10 per cent Thais own most of the wealth in this country.
10 per cent Thais own most of the land in this country.

If we can raise the standard of living of the majority Thais to sufficient level as I have pointed out -- debt free -- then we can discuss democracy or freedom.

You and Ian are expressing your views in support of the wealthy minority. You don't need to worry about them.

comment 39
FelixQui date : 26/08/2009 time : 13.28
http://blog.nationmultimedia.com/FelixQui

The real problem with Thanong's ideas is that Thai people overwhelmingly do NOT want any part of them.
Thai people's choices are clear:
Thai people want western goods,
Thai people want western lifestyles
Thai people want western concepts of human worth,
Thai people want their lives, their families's lives and the Thai nation to develop as western nations have, and that is a sensible choice. It is also their choice to make, not the state's to enforce against their wishes.

The question is not whether or not to develop and westernise (the only way to turn back the clock is to again use military force against the majority of Thai citizens), but how to do that in the most sustainable, smooth and just way. That is the progress that the government should be focussing on.

Buddhist economics and the rest are pipe dreams for day dreamers, dangerous pipe dreams were they ever to be enforced. Thai people no longer have any great interest in even pretending to follow those old ways that have failed them. There is nothing wrong with much in Buddhism, and for those who freely choose it, it might well offer more happiness than the mad rush of modern life, but it is obviously NOT what the majority today choose with their eyes wide enough open, and for good reason. The only way to force the majority back to their roots is to use a lot of brute force and constant intimidation - and that does not sound very Buddhist to me, although it may have become the Thai norm, which is perhaps another reason turning young people off giving much respect to such things. If a show of respect and compliance is dictated by the state, at the behest of well meaning monks or other vested interest groups, is it any wonder that genuine, freely given respect is dying out?

comment 38
wch date : 26/08/2009 time : 11.56

* Then he gradually builds up his resort from 3 earth cottages to 20 or 25. Then he stops the expansion. He tries to maintain the service excellence and the family atmosphere of his resort *
This is the virtue of supply side. People come more because the resort cottage is good and they are ready to pay more if service is better.

Good foods call and gather people, not generous Aunt who is ready to mound up in empty plate.

Thai people need better mobile phone that comply to wireless data transmission. Today ordinary set will be 64mb or 128 mb but soon they need a giga mb with download speed of 1 giga per sec (3G or 4G) in wireless connection, to enjoy TV and paid movie.
This is all the idea of producers who think such equipment is the next step and consumers are responsive welcomingly.

Pickup truck, LED tv, fully auto laundry machine including steam ironing,,,,,
Producers are floating the future products and consumers can not wait too long.

People will not want to remain in green village and building adobe cottage.
Human need FUN, satifaction, happiness, sometime gambling, the taste of profit from own capital investment, the bitterness of loss,,,,

Humans live in humane environment and leave this world.
If someone want to be decorated economist, take into account of this human factor.
State must input huge capital to meet this (inf

comment 37
lurker date : 26/08/2009 time : 11.51
http://blog.nationmultimedia.com/lurker

I remember the doom and gloom after the 1997 crisis. Everybody thought it was the end of the world. But Thailand actually recovered fairly quickly. Just think where Thailand would be today if there was no 1997 crisis. The country would be finished. However, Thailand is in much better shape than before because of that crisis. What is the saying, "America sneezes, the rest of the world catches a cold." That is what happened. Thailand will survive and probably thrive for the next 20 years because of pent up demand in Asia that has just started to be tapped. If India, China and ASEAN ever opened up as the US had opened up to Thailand in the past, the market is huge and Thailand will reap the benefits. The India, China, Arab and ASEAN markets all tripled during the last decade for Thai exports.

There are a few areas Thailand needs to invest in and will even be more successful: education, energy, logistics and the environment.

If Abhisit actually does what he says he will do and all the state investments don't go to corruption, Thailand is on its way. But that is a big if.

This won't be the first financial crisis and it won't be the last.

There were dozens of financial crises in Europe and America before this one where everybody cried that the sky was falling. Brazil, Argentina, Mexico and Russia had crises worse than this one and they all survived.

People wrote of the UK in 1979 when it had to be bailed out by the IMF. It recovered.

Japan and Italy have public debt worse that the US and those countries have continued to exist and retain their wealth.

As China and India develop and the world becomes more intertwined, when those countries will have financial crises, everybody will be affected also.

It is the nature of the beast.

But it doesn't mean capitalism is dead. It is just getting started.

comment 36
lonewolf date : 26/08/2009 time : 11.17

Thanong, something about your comments reminded me about my early school days. Several teachers, through many grade levels, repeated the mantra that nothing happens in an economy until somebody buys something. That something could be a product or a service....and where I was raised the product was likely agricultural. Most of my family were farmers so we rarely had to buy the basics of food. Yet, I was never satisfied with that simplistic description of an economy, but that standard has certainly influenced the world.

I also think that the WTO has outlived its usefullness and it is one of the few issues in the US where progressives and conservatives are in general agreement.

With respect to your candidacy for the Nobel Prize in Economics based upon Sufficiency Economics. Hmmmm.... Sweden is a great place to visit especially on an all expenses paid trip. The only caveat is that to earn the prize you must have at least a decade of writing and championing a new economic concept. Have you put in enough time yet?

comment 35
Thanong date : 26/08/2009 time : 10.44
http://blog.nationmultimedia.com/thanong

I predict the global downturn will last at least 10 years. During which time, I see empty buildings every where in major cities. Be prepared for the worst to come.

comment 34
Thanong date : 26/08/2009 time : 10.36
http://blog.nationmultimedia.com/thanong

I shall comply my writings and your input to write a article on Toward the New Economy. Stiglizt has urged countries to find a new economic model in post-capitalism. We do not need his advice. Stiglizt can have his Nobel prize for himself.

We already have the sufficiency model, which fits our geography, our customs, our cultures and our people.

comment 33
Thanong date : 26/08/2009 time : 10.33
http://blog.nationmultimedia.com/thanong

In sufficiency theory, we don't use GDP. For once we have reached a level of sufficiency, we can maintain that level of wealth and enjoy. For instance, Phi Phi island should impose a quota of tourists. Now it takes an unlimited amount of tourists. The people there make quick money, but they soon won't be able to make any money from Phi Phi because of the environmental degradation. If we apply a quota of say, I just make it up, 200-300 tourists a day, and spend time to look after the environment there, we can save Phi Phi forever. This sufficiency concept can be applied at the national level. Thailand does not need to catch up with other countries with GDP growth. We have enough to eat. We have the best environemnt, the best food. If we can produce renewable energy and food surplus, with tourism, excellent healthcare service, best environment in the world, we'll stand out as a shiny example of a new economic model. But we have to control our population at this level or below to maintain the standard of living. We can't afford to feed the overpopulated country.

All of a sudden the price of land or properties will fall because the credit in the capitalist system is not applied here. Prices in Thailand will become stable because we produce most of what we consume. The rest, just a little bit, go for exports.

Yes, we do still imports -- but only quality goods and not the junks.

By then we do not neet the WTO, or IMF...Sorry about that.

comment 32
Thanong date : 26/08/2009 time : 10.22
http://blog.nationmultimedia.com/thanong

Lonewolf:
Do you think that I shall win a Nobel prize in economics with this applied sufficiency theory?

You quote George A. Akerlof as writing:

“…the bounty of capitalism has at least one downside. It does not automatically produce what people really need; it produces what they think they need, and are willing to pay for. If they are willing to pay for real medicine, it will produce real medicine. But if they are also willing to pay for snake oil, it will produce snake oil.”

I can see that the flaws of most economists, including Akerlof. For they focus their theories on the consumers. In capitalism, consumer confidence is King. Producers always try with all kinds of tricks to come up with products or services to lure the consumers. They end up producing junks more than the consumers can take because they all vie for excesses.

But in my sufficiency mode of thinking, I focus on the producer. Take the case of the resort operator that I have mentioned above. He does not crave for quick rich. He goes about his pace. He does not borrow. He starts his business with what he has. Then he gradually builds up his resort from 3 earth cottages to 20 or 25. Then he stops the expansion. He tries to maintain the service excellence and the family atmosphere of his resort. He will never under any pressure of fixed cost and three month cycle of credit service under the current banking system.

The Consumers or Customers benefit from the resort owner rather than the resort owner trying to cater to the unlimited desire of the consumers or customers. The consumers will appreciate the resort or the resort owner for what it is or what he is.

In sufficiency economy, the producers are king. The consumers are secondary.

In capitalism, the consumers are king, the producers are secondary.

I think the resort owner whom I have described to you now is now living very happily. And how about Khunying of a famous Thai hotel group on Rama IV, now burdended with extraordiarily high fixed cost and a downturn in tourism?

Who are happier between the earth cottage owner and Khunying?

comment 31
Thanong date : 26/08/2009 time : 10.02
http://blog.nationmultimedia.com/thanong

Now visit this site of earth home or baan din. You may google บ้านดิน

http://www.google.co.th/imgres?imgurl=http://www2.deksiam.com/files/Baandin.jpg&imgrefurl=http://www2.deksiam.com/node/47&h=336&w=448&sz=30&tbnid=3TWttXWoZjJiGM:&tbnh=95&tbnw=127&prev=/images%3Fq%3D%25E0%25B8%259A%25E0%25B9%2589%25E0%25B8%25B2%25E0%25B8%2599%25E0%25B8%2594%25E0%25B8%25B4%25E0%25B8%2599&hl=en&usg=__OE7l_bokT883GIq1LEPHd0JAItM=&ei=IaOUSrXHNNWOkQXWnOSMBQ&sa=X&oi=image_result&resnum=4&ct=image

You'll get to see pictures of earth home. It cost only 20,000 to 30,000 to build.

in the sufficiency mode, you don't have to compete with time. You take your time. You build an earth cottage, which cost you only 30,000 baht. When you have more, you add the earth cottages to three or five in your resorts. Altogether, they cost you less than 200,000 baht including decoration.

You can run your earth cottage resort with an investment of 200,000 baht without having to seek a loan from the bank and coming under pressure to service the loan every month. You don't have fixed cost because 200,000 baht is a very small amount of investment.

You and your wife start to get customers, whom you treat like Gods with the best cooking service and family-like atmosphere. The customers are impressed because they pay only 500 baht a night, including very good breakfast from your cooking. Soon you have more customers by the words of mouth. All the time, you don't have any presure because you tend the gardens yourself or you may have one or two assistants the most. You don't have fixed cost. You have your wife have to work hard. Eventually it pays off. You have more customers. Then you start to accumulate capital. Then you expand your earth cottages to 20 or 25 units. You hire some more cooks and assistants.

Then you stop at that. Your fixed cost is very low. If the economy is good, you make money. If the economy is not good, you don't lose money because you don't have high fixed cost. The beauty of it is that you're never go bankrupt because you never pledge your land with the bank.

In sufficiency, you have to work hard, own your resources, adopt ethics in service standard, never borrow any credit, never crave for quick rich, be patient. Then it turns out to be fine.

comment 30
Thanong date : 26/08/2009 time : 09.47
http://blog.nationmultimedia.com/thanong

Let me explain to you a difference between sufficiency practice and capitalist practice. In sufficiency economy, you'll enjoy stable income and you'll never go bankrupt. If you have a plot of 20 rai of land in Hua Hin and you want to run a resort, what would you normally do?

In capitalist mode, you are at loss because you don't have the capital or the money. Capital is always the problem if you think capitalism. And you'll never have the money because only the banks hoard the money. So you pledge your land at a bank for 50 million baht. The bank is happy because it values your land at 200 million baht, a comfortable cover over your debt.

With 50 million, you build a 20-25 room resort facility, which you aim to attract the middle-income tourists. You're happy the first day that your resort comes into being. But then you immediately start to worry: How can I get enough 200,000 baht a month to pay to the bank. You constantly under pressure because your fixed cost is very high. You have to stock some food for the restaurant. you have to pay the electricity and phone bills. You have to pay for the maids and the security guards.

In healthy economic times, you're doing alright. All the time the banker gives you three month. If you miss payment in three month, the banker will call you an NPL.

comment 29
Thanong date : 26/08/2009 time : 09.21
http://blog.nationmultimedia.com/thanong

Lonewolf and Lurker:

I do not call for Thailand to go back to the tribal age. I am trying to find a Middle Path way. If we can reduce the excess of capitalism by 50 per cent and increase our adoption of the Thai roots (buddhist ethics, cooperatives (long khaek), caring for the environment, sufficiency practices, be happy with what we have, no risk taking) by another 50 per cent, I think we'll have the most stable economic system on earth.

Now more than 80 per cent of the wealth in Thailand is controlled by less than 10 per cent of the population. More than 80 per cent of the land is owned by less than 10 per cent of the population.

If we continue the capitalist path, before long 95 per cent of the wealth and land will be in the hands of less than 5 per cent of the population. The business elite will take it all.

I think my idea will appeal to most Thais, contrary to Lurker's fears that we'll revert to Burmese or North Korean style of authoritarianism. Let me ask you: What do they have to lose? They don't have anything. And why do we have to worry about the business elite when they already are very rich. They still survive and do well. But the sufficiency concepts will raise the standard of living for most Thais.

comment 28
wch date : 26/08/2009 time : 07.40

read again ;
--- and it must NOT be expanded as the ideology to structure a state economy system.

comment 27
wch date : 26/08/2009 time : 07.37

Therefore,
Rather than figuring out new structure of economy system for a state, the management system must be improved.
Modern polity is to provide and expand more opportunity to the people rather than monetary (capital) support to the underpriviliaged strata (populism). Here it is clear what the education must do. Sufficiency economy principle must be taught to citizens as a morality to run healthy household economy only and it must be expanded as the ideology to structure a state economy system.

comment 26
wch date : 26/08/2009 time : 03.52

Lonewolf's in his C 25,
*The best book on the subject, published this year is called Animal Spirits, How Human Psychology Drives the Economy, And Why It Matters For Global Capitalism *

is commone sense to view the economy as I mentioned in my C,
*
Capitalist did not name themselves as capitalist but did the communist, to distinguish themselves.

Capitalism does not exsit but what human being created, so called, the economy - the circulation of production, consumption and trade is the natural desire of and consequent action in humanity.

Financing, a technique to expedite such circulation, does not represent capitalism.

Capitalism gets its tangible shape when the state tries to control free market by weapon of big capital.

The importance is the skill of using the weapon.
American problem is simply the management failure.
----------------------------

comment 25
lurker date : 26/08/2009 time : 02.18
http://blog.nationmultimedia.com/lurker

I have to admit, there is something attractive about this Marxist utopia that Thanong is preaching about. It sounds good on paper, but reality is different than theory.

Unfortunately, it has been a proven failure in Burma, Laos, Cambodia, North Korea, the Soviet Union, India, Cuba and elsewhere that it is has been tried.

I serious doubt that Thais would choose to embrace this Buddhist socialist paradise by choice. It would have to be imposed by force.

The logical conclusion of Thanong's socialist paradise would be civil war and millions of Thais fleeing to more capitalistic pastures in order to be free. I doubt the US, Canada, Australia, New Zealand can take in any more migrants fleeing Marxist-socialist sufficiency paradises. On the other hand, the Burmese, Cambodians, North Koreans will no longer emigrate to Thailand, because what would be the point. They can get their sufficiency paradises at home.

Who would want to be a slave to an elite, who, like in Burma, Cuba, the Soviet Union, North Korea, enforces universal poverty by a loaded gun while the generals and party elite live the high life from selling the surplus product of slaves to foreigners in exchange for a hi-so lifestyle.

I'm sorry, there is no way in hell that 60 million Thais are going to go back this idyllic past where the elite ruled by an iron fist while the poor through corvee labor were tattooed and forced by their masters to produce excess products so the elite could live high on the hog.

By the way, who is going to tell all the Thai captains of industry that they can no longer sell their products, that they have to give up their mansions, their mia nois, their servants, their luxury watches and mobiles, their trips to the mall, their foreign excursions, and their Benzes in the name of sufficiency? The fact is nobody will tell them and they will never choose that lifestyle by choice. They will take their capital and flee.

It would be good for tourism though, because left-wing hippies from the West would flock to these Ghandi like sufficiency ashrams to make their own clothes, grow their own food and meditate all day. They and Thanong will be able to pontificate all day like Karl Marx did about how this is the way it should be, and how the evil Western capitalists should be funding their lifestyle through foreign aid.

comment 24
lonewolf date : 26/08/2009 time : 01.08

Thanong, “going back to the roots” is a noble ambition for nations but it is often a point of necessity for individuals. In its proper context “going back to the roots” can be an effective option for a person to manage his/her personal space in an environment that has become increasingly complex and fragile. The early years of farming in the American Midwest was a model for the concept of living within ones means and yet forming a common purpose within the community. That is how cooperative dairies and feed mills developed and became successful. These farming cooperatives still exist in isolated areas of the Midwest even today, but the vast majority have been forced out of business due to the monopolistic practices of corporate agribusiness. Your point is well taken, but I see little chance that corporations will soon reduce their control over production/markets and willingly allow competition from any source to dramatically reduce their power and influence.

“Going back to the roots” with respect to the nations of the world is a greater fear for me as it brings in another one of humanities least attractive qualities---tribalism. Globalism may not have had a universal economic benefit but from a social perspective it has helped to narrow some of our differences. Or at least it has allowed people from one country to understand and appreciate the culture(s) of another country. I would not want to lose that aspect of globalism. Nor do I want the world to divide up into mini-states based upon ancient tribal grouping. If Thailand were to withdraw back to its tribal roots how many different mini-states based upon language and culture would spring up?

During the past few months I have been reading several articles and books on the de-evolution of macroeconomics and the ascent of Behavioral Economics. The best book on the subject, published this year is called Animal Spirits, How Human Psychology Drives the Economy, And Why It Matters For Global Capitalism. One of the authors, George A. Akerlof, won the Nobel Prize for Economics in 2001. I will just provide a few quotes that have been relevant to some of our past discussions and perhaps future discussions.

“We will never really understand important economic events unless we confront the fact that their causes are largely mental in nature. It is unfortunate that most economists and business writers apparently do not seem to appreciate this and thus often fall back on the most tortured and artificial interpretations of economic events.”

“Considerations of fairness are a major motivator in many economic decisions and are related to our sense of confidence and our ability to work effectively together. Current economics has an ambiguous view of fairness.”

“…the bounty of capitalism has at least one downside. It does not automatically produce what people really need; it produces what they think they need, and are willing to pay for. If they are willing to pay for real medicine, it will produce real medicine. But if they are also willing to pay for snake oil, it will produce snake oil.”
“The confidence of a nation, or of any large group, tends to revolve around stories. Of particular relevance are new era stories, those that purport to describe historic changes that will propel the economy into a brand new era.”

comment 23
Ian date : 25/08/2009 time : 16.53
http://blog.nationmultimedia.com/anterian36

Thanong's ideas appeal to me, turn Thailand back into a quaint, idyllic, preindustrial, agrarian society. A retirement haven for westerners and with a few 5* hotels for curious tourists. I assume the Thai people will stop using cars, motorbikes, mobile phones, TVs etc, what peaceful bliss. Naturally no modern medicines or hospitals, so the population will soon return to a lower acceptable level. I assume traditional dress will also return along with traditional customs.

comment 22
Pomjuk date : 25/08/2009 time : 16.14
http://blog.nationmultimedia.com/pomjuk

How do you increase domestic demands when you have a government that carries supply-sided policies, shifting tax burden from producers to consumers?

Decoupling from the west is not possible; no one is capable of doing that. There are many other countries in the world; that are capable of producing something cheaper than producing it yourself. And it is unwise not to take advantage of that; and allow the domestic consumers to consume cheaper products than you can produce it yourself.

In order to rely less on the foreign consumers to growing and an economy, one must create one’s own domestic demands, and somehow increase the purchasing power domestically. May be start with the tax policies that allow consumers to keep more money in their pockets and strategically stimulate certain leading industries.

How can someone do that with a government that prefers export oriented policies? The recent government’s reintroducing of the energy tax and the finance ministry’s statements on his intention of reducing the corporate income tax rate, show the intension of this government to shift the tax burden from producers to consumers and preference of exporting its’ way out of out of recession.

comment 21
FelixQui date : 25/08/2009 time : 15.47
http://blog.nationmultimedia.com/FelixQui

Thanong wrote: "If we get rid of all the industrial factories and restore our land, Thailand will become an angelic country on earth" (c.19).
More likely, it will become a very backward, undeveloped country, where the masses are only happy provided they are kept in total ignorance of what is possible and what obtains elsewhere.

This utopian fantasy is so truly similar to that of Pol Pot and North Korea that is really is a bit terrifying.

Does Thanong think this paradise should come about because it's what people freely choose or must it be imposed on them by their benevolent superiors, just like Pol Pot did for the Cambodians and the Kims have benevolently done for North Korea?

Thailand's benevolent superiors have already held back the Thai people as much as they could for their own selfish ends, which conspicuously do NOT include a simple lifestyle. Perhaps it would be nice to allow the Thai people to decide for themselves what matters to them and how their lives should be lived?
I'm not sure that Thailand can survive much more of Thanong's brand of benevolence.

comment 20
Thanong date : 25/08/2009 time : 09.59
http://blog.nationmultimedia.com/thanong

Lonewolf:
I shall write about the New Economy in my next column. Please give me some further fresh ideas. So that you may have an input in my writing. I appreciate your experience and knowledge.

As for the financial analyst of the first order, BangkokRay, I am giving you an opportunity to write something more constructive to contibute to the betterment of our society. Stop nagging.

comment 19
Thanong date : 25/08/2009 time : 09.54
http://blog.nationmultimedia.com/thanong

For Thailand, we have a way out. But we, too, need to go back to our roots. We have walked away from our past to embrace the ugly modern world. Farang in the 1960s led us to mount onto industrial development. We took the bait.

Now we produce 10, but we consume only 2 or 3. The rest goes to exports. Investors worldwide are using as as their industrial production and dumping site for industrial wastes (look at all the factories at the Eastern Seaboard. Ask ourselves a serious question: Do we really need those junk factories? We have the best rice in the world. We have the best vegetable in the world. We have the best fruit in the world. We have the most beautiful country in the world. Then, why do we need to have industrial waste in our backyards?

Overall, the exports earnings from industrial exports are not worthwhile. It might seem to benefit some of us in society, but it does not benefit Thai society as a whole. in the long run, it will be terrible.

China, Japan, Asean have plunged into this export or die mode. They end up producing industrial garbage more than the Americans can consume. Out of 10, The Americans produce only 1 or 2 but import the rest.

Technology is so advanced that factories can turn out industrial garbage en masse with efficiency. The result is that we have industrial products, which somehow have to be disposed off. Our planet cannot cope with the excess production from industrial development. Like Krugman has said, we need consumers from Mars to purchase the manufactured goods from these export-led countries.

So out of 10 in our totally green production, Thailand needs to consume 8 or 9 and the rest goes for exports. If we get rid of all the industrial factories and restore our land, Thailand will become an angelic country on earth. We only need two or three star hotels, targeting to the mass tourists.

We'll stop importing oil. But we'll focus on renewable energy as Lonewolf has described. Then we can save almost Bt1 trillion in oil and energy imports.

We'll bring back Buddhist ethics to our soceity, so that we have compassion and loving-kindess to all.

We do not need GDP growth. Even if GDP is constant, we can survive because this country will be a good surplus producer and self-dependent energy producer.

This is the way out. And we need a much, much strong leader to do it over the next coming years.

comment 18
Thanong date : 25/08/2009 time : 09.35
http://blog.nationmultimedia.com/thanong

Lonewolf:
The paradigm change will need to be accompanied by a need to go back to the old roots. What is the purpose of life? What is an ideal society?

Now most people believe in one life, in the pursuit of happiness, in material gain. Over the past hundred years or so, money has increasingly become the measurement of all things. Industrial capitalism and financial capitalism have combined forces to shape our world. They are backed by four popular trends: 1. globalisation; 2. liberalisation, 3. technological advancement, and 4. liberal democracy. All nations on this planet have to follow these trends, including editorial writers. If we do not support these trends, we are branded as oldfashioned nuts.
Now you can see that the more we globalise, the more we get hurt by globalisation (the flu, the financial and economic contagion). The more we liberalise our markets, the more we get hurt from the industrialists and financiers because their greeds know no bound. When they are in trouble, the governments have to bail them out with tax money (GM, AIA, and all the banks). When they make profits, they store away their wealth. The more technology we apply, the more industrial wastes we produce on this planet. I have visited a plant in Japan. It takes quite an effort to recycle the used mobile phones, refrigerators, TV, air-conditioners. Industrial production means industrial waste that would hurt our children for the centuries to come. Finally, liberal democracy is nothing more than a system in which the investors, the industrialists, the financiers and the businessme use the politicians as their nominees to manage the system to their best interest. Who is behind American democracy? The answer is clearly the Wall Street.

comment 17
Thanong date : 25/08/2009 time : 09.20
http://blog.nationmultimedia.com/thanong

BangkokRay:
Please raise your standard of intellectual writing to the level of Lonewolf then I shall give you my respect.

comment 16
stalingrad date : 25/08/2009 time : 08.07
http://blog.nationmultimedia.com/stalingrad

K. Thanong: This is a topic that I have long thought about but have been diverted by other matters. I have over the years planned bit by bit for an economic armageddon, both in my personal lifestyle and other ways. Now I can say if we face an economic collapse of some kind, I and the family could survive. How ? using the accumulated wisdom that we have right in front of us, but which is hard psychologically for people living in the straitjacket of global capitalism to accept and practice. Green lifestyles, the sufficiency economy paradigm, Schumacher, Buddhist teachings, Chomsky, Nader, Andrew Weil, Scandinavian practices etc. All are there for free to use and adapt to each individual’s circumstances, yet people instead go wild over “The Secret” which is an advanced form of Rasputinism, Ann Ryan, or Zig Ziglar (what kind of name is that? smacks of Hollywood), all which promise misery and family breakups for followers, and riches for the writers and marketers of the concepts.

If everyone on the planet follows the wisdoms mentioned above, capitalism would survive and make people prosper, not in terms of everyone achieving the obscene wealth of the US, but in terms of everyone achieving reasonable material standard of living as befit the resources that the world has and the technology that mankind has achieved (like wind power, penicillin etc.)

But alas, look around you, especially the youth and the elite, and we don’t have to write volumes to see that we can expect more economic crises despite the desperate regulatory designs crafted by the hot shot economists. Greed, mindless consumption, senses and morals numbed by advertising and the media, the global glorification of models displaying totally nothing, for example,… ( too disgusting to state here, but you get the point, I believe) What we need is not reform but a total renaissance, like putting oneself including the brain into a washing machine and running it for 30 minutes.

The Thai elite are totally to blame for any upcoming crisis that will sink the nation. The responsibility is theirs 100% , in a vertical oriented society such as ours, where what we call “the demonstration effect” is especially strong. How has the elite failed in its social responsibility? By providing wrong models and giving the wrong signals to the poor and middle classes, both who are striving materially to move a notch or up in material terms. But we have limited resources, and so... (read economics 101). The elite are oblivious to this fundamental truth-- and to the sample of wisdom I mentioned above. They are walking and leading Thais-- with the assurance of a sleepwalker-- to another crisis.

It’s a pity that the Democrats don’t have in the party enough brainpower and guts to take an alternative radical economic and social position, which is necessary and urgent in these crisis times. And the people are left rudderless, left to fend for themselves. But what do you expect? The Democrats as a collective body arose out of the traditional paradigm—except for Apisit.

As a metaphor, we are all being manipulated as in the movie the Matrix, which is a brilliant statement capturing the essence of our situation.

But all is not lost yet. I’ve come to the provisional conclusion that well meaning Thais have got to take the future into their own hands through well-crafted civic action fused with a political party which can provide the hands. The new political party set up by the PAD could be this channel at this point in time, although I’m not happy with some of the leader’s way of thinking. But perfectionism leads to inaction, as the saying goes.

Also, Apisit should leave the Democrats and join this party, as advisor. It would be more in tune with his philosophical orientation and put some sense of calculated realism and moderation (in terms of style) to the party.

comment 15
lonewolf date : 25/08/2009 time : 00.37

Thanong, I believe that most of the modern day Keynesian economists (of whom Dr. Krugman would be the poster child) would agree with the premise of strong government regulation of the economy—With one purpose being the encouragement of broad-based entrepreneurship through free competition. (The proverbial level playing field.)

The future economic order that you envision is an idealized place that many of us would support. An economic engine which encourages environmental standards and produces ample amounts of low cost renewable energy is an admirable goal that I also support. Some countries such as Denmark are moving quickly to this new standard. Stiglitz and similar economists, can clearly see the paradigm is changing. Stiglitz has made the case for some level of sufficiency economics when he alludes to the fact that Thailand and other countries in Asia need to look elsewhere for export markets. The US is surely if reluctantly giving up its appetite for cheaply produced low quality unnecessary products from China, et.al.

The challenge with adopting an economy built solely on the concept of sufficiency is building in support for the risk takers in society. Those individuals who have a revolutionary idea who need a vibrant economic environment with a profit incentive (with producers and consumers) to enable their genius to come to fruition. These will be the creators of the renewable energy platforms, innovators in communications media, and mass producers of environmentally friendly food products. Innovation cannot happen in a vacuum and any country which will limit free and open competition, that fails to produce an educated populace or neglects to provide capital for investment will be unable to get to the economic order you envision.

And Thanong with respect to your earlier question for me…. “I wonder whether you can identify farang greeds in this country”, I will answer accordingly. First, when you mentioned that individual greed was not on a comparison with corporate greed I believed that statement should have been qualified. I could be classified for cultural identification purposes as well as for select Thai marketers as a white male of European descent. When I visit your country (TAT would classify me as a “quality” tourist), I am viewed as an easy target by select greedy opportunists who have no moral objection to cheat me for their own economic gain. (This is something Thai nationals could never understand or experience about their own country. Perhaps if they experienced this in another country in the East or West they could have some simpatico.) But as an individual the loss of faith, the feeling of being victimized, the negative association with the act and the environment are no different whether you are cheated by an individual or by a corporation. And I suspect only a real Thai could adequately answer your question about farang greed because of their personal experience on the issue. Plus I am just not certain what a farang is…is that an person from India, China, Malaysia, Japan, Burma, Cambodia, or Nigeria?

comment 14
BangkokRay date : 24/08/2009 time : 22.55

Yes Thanong, Thailand will have clean air, but it won't feed, house and educate 60,000,000 people. Perhaps you propose a major cleansing prior to implementation?
You are loonier than I thought.

comment 13
Thanong date : 24/08/2009 time : 21.48
http://blog.nationmultimedia.com/thanong

Lonewolf: Both krugman and Stiglitz can't see that the real paradigm is changing. We can't afford to follow unfetterec capitalism any longer before the world is full of garbage of industrial waste and is inflicted by global warming. They all hope a stimulus might somehow revive growth in spite of the painful adjustment. But what we really need is a clean planet for our children. Industrial capitalism is not the way to save our planet. We have to embrace renewable energy and environmentally friendly goods. The New Economy must based on agriculture, reneable energy and environmentally friendly products. Small is beautiful. Mass production is bad. Then we live within the sufficent level. We then can use happiness index instead of GDP. Only then can we save this planet.

comment 12
Thanong date : 24/08/2009 time : 21.43
http://blog.nationmultimedia.com/thanong

Lonewolf: I agree that some taxi drivers are greedy and they cheat on farang passengers. I wonder whether you can identify farang greeds in this country.

comment 11
wch date : 24/08/2009 time : 21.41

Real crisis of Thailand is its own social degradation or degeneration that is less related to outer change.
Ripping of taxi driver is by far benign culture that is seen in many tourist gathering places.
Thai taxi drivers now start robbing, raping and killing. Such crimes are seen in every walk of people.

comment 10
lonewolf date : 24/08/2009 time : 20.45

I generally respect much of what Prof. Stiglitz has stated about American capitalism, but ironically he does not digress very far from the perspective that Prof. Krugman espouses (whom Thanong tried to mock in a previous posting).

Felix accurately indicated that Prof. Stiglitz did not fully detail why American capitalism has become so ineffective in recent years. From my perspective the single greatest omission in American capitalism is competition.

Teddy Roosevelt (a conservative Republican) saw the dangers of overcharged capitalism that created monolithic corporations which could and did monopolize the production and marketing of essential products. Franklin Roosevelt in the late 1930’s again warned the country how these large corporations posed the greatest threat to capitalism. The US does have a law on the books, Taft-Hartley, which seeks to control the development of monopolies and monolithic corporations, who do not practice capitalism. But the last big use of this law was under Pres. Carter when he broke up AT&T.

The US used to have millions of private farmers who produced an abundance of quality foods. Now we have a handful of corporations producing a majority of food products which lack in quality and safety. Each year the corporate farmers take a bigger share of the market and the family farmers are reduced. The health insurance companies have anti-trust protection which assures their monopolistic business practices. Other industries such as Oil, big pharma, and even Microsoft prevent or eliminate the advancement of true capitalism.

And as for greed….from my experience a greedy taxi driver is like a plague. Such greed is easily transmitted from one driver to another driver because it is so easy to take advantage of a “kwai” foreigner. Pretty soon the entire industry of taxi service is infected with what would be understood by them as acceptable greed (for example, all foreigners are rich and Thais are poor so it is ok to cheat foreigners)…such greed can and does lead to a decline in tourism which can negatively impact the economy of a country. There is no acceptable standard for greed.

comment 9
Thanong date : 24/08/2009 time : 18.28
http://blog.nationmultimedia.com/thanong

Hermano: Yes, indeed we're stepping back into the time machine of the 1930s, or even worse.

comment 8
Hermano_Lobo date : 24/08/2009 time : 17.46
http://blog.nationmultimedia.com/yurivelasquez

Have I just stepped out of a Time Machine into the 1930's ?

comment 7
Thanong date : 24/08/2009 time : 16.58
http://blog.nationmultimedia.com/thanong

Felix: I don't know what happened after that incident when the Americans bore arms very near to the US president. I guess, the security people just kept them under watch. But this is terrible.

comment 6
Thanong date : 24/08/2009 time : 16.57
http://blog.nationmultimedia.com/thanong

Felix: You can't equate the farmers with the Wall Street financiers. Similarly, not all the world's leaders have the same capacity to destroy this planet because a handful of them have nuclear weapons whereas the majority don't.

comment 5
wch date : 24/08/2009 time : 16.49

Capitalist did not name themselves as capitalist but did the communist, to distinguish themselves.

Capitalism does not exsit but what human being created so called the economy circulation of production and consumption and trade is natural desire and consequent action.
Financing, a technique to expedite such circulation, does not represent capitalism. Capitalism gets its tangible shape when the state tries to control free market by weapon of big capital.

The importance is the skill of using the weapon.
American problem is simply the management failure. Before subprime consumer credit was crunched, outsiders predicted often "American Bubbles, when to burst".

They didn't listen as pointed by this economist.
American financing industry has problem though, the net wealth didnt go anywhere but is still there in form of house, land and factory. They are capital too and if they use them productively, it will generate new wealth.

They and all must look at production side, now forgetting the overheated consumption and financing industry.

New products sell themselves and trade will flow.
In other hand, they must transformate own system of production and consumption into 60% self-sustaining economy. If 40% can not export, it is still okay. and more importantly developing economy must be managed by central planner by way of capital - tax money to distribute wealth to develope low society.

SDR must be trade currency and indicators of measuring a state economy in global scale. It would rather help US by kicking off the habit of dependance on other's reserved money (by interest-free borrowing or compelling reservers to buy own bond).
The original SDR intention of the world bank was the global currency but US objected to it.

comment 4
FelixQui date : 24/08/2009 time : 16.44
http://blog.nationmultimedia.com/FelixQui

"Greeds of a farmer or a tuk-tuk driver cannot be compared to greeds of the Wall Street financiers or the industrialists."
I think the greed of both can be compared, and that it is the same; however, the latter have far greater scope to cause harm to others because of the power they wield as they act on their greed. And I don't think that this distinction is trivial: it acknowledges that both the farmer and the financier are equally human, whilst recognising that their different situations make a big difference in the impact they can have on the world and others.
Preventing causing direct harm to others is part of teh proper role of the state, and the CEO of an investment bank cannot be permitted to do that any more than a rice farmer. Neither are allowed to commit murder, neither may steal, and neither may tell lies or breach contracts. I have no problem with suitable laws being created to prevent the bankers from committing crimes that are truly beyond the scope of the rice farmers, and there are probably laws that apply to rice farmers that are most unlikely to ever apply to your typical Wall St. banker.

comment 3
FelixQui date : 24/08/2009 time : 16.35
http://blog.nationmultimedia.com/FelixQui

Thanong,
What happened when "some Americans bore arms nearby the area where Obama was speaking"?
Were they arrested? Told to leave? Or what?
Being told to leave sounds like the right initial response to me, followed by arrest if they refused. But depending on the circumstances, immediate arrest would also be reasonable and just.
So, what did actually happen?

I ask because I'm not sure that I've made my views about human right clear: you might think I think something that I don't. I also agree with you that "This human rights concept has been exploited to the extreme." I often disagree strongly with what is done in the under the false excuse of human rights.

comment 2
Thanong date : 24/08/2009 time : 16.01
http://blog.nationmultimedia.com/thanong

Felix: You wrote: "The confusion arises because people have an unfortunate habit of equating capitalism with greed. This is wrong: greed is a human characteristic, not one of any particular economic system. I would be mightily surprised were greed not operating as much in Bhutan as it is in New York City, and as it was under Mao. The underlying makeup of human beings just doesn't differ taht much."

I think that you're confused. Greeds of a farmer or a tuk-tuk driver cannot be compared to greeds of the Wall Street financiers or the industrialists. Yes, they are human beings with a varying degree of greeds. But the farmers or the tuk-tuk drivers can't destroy the world, in the scale of a handful people in Wall Streets and in the industrial world. That's why we need to rein in control of both industrialisation and unfettered financial capitalism. In the end, we don't need both. Most Thais have also plunged head-long into the kind of capitalism that is failing now. We need sufficient economy that looks after our food, produces our own alternative energy, takes care of the environment and is guided by the Buddhist principle of the Middle Path.

I don't believe in human rights as you have prescribed in your earlier blog, including liberal democracy and capitalism. The other day, some Americans bore arms nearby the area where Obama was speaking. They said they were exercising their rights to bear arms. This human rights concept has been exploited to the extreme.

No, as an individual in society, we do not have that kind of human rights. We are part of the collective mass. Our duty is to let go our individual self. We should serve and give to others. If we all think in this manner, we'll survive as a society. That's the principle of Buddhism that we have forgotten.

comment 1
FelixQui date : 24/08/2009 time : 15.29
http://blog.nationmultimedia.com/FelixQui

Stiglitz shows good sense in NOT saying that capitalism has failed, even whilst pointing out some real failures in the US system. His strongest comment regarding capitalism is not that capitalism has failed, but that there has been "a failure of American-style capitalism": not at all the same thing.

It is not clear exactly why either of the "Thai and Bhutanese initiatives to develop new ways of measuring economic progress" deserve praise.
What are they actually measuring, and why is it preferable to more traditional measures of economic development?
But that is the easy question. The more important one is, even if it's a better measure, what are the implications and, most important, what changes in law and government policy would that new measure mandate as morally required or permissible?

So little is known about Bhutan and its owners that it is very risky to use it as an example of anything, with one or two unpleasant exceptions. Thankfully, a little more is known about THailand.

Getting back to American-style capitalism, I agree that there is much wrong, and I sort of agree that Stiglitz is right to draw attention to the repeated government bail outs. They really are a problem, but they are not a necessary part of capitalism, rather, they are the opposite. Were such uncapitalist governemnt cancers rooted out so that financial organizations and investors knew that they would be held fully accountable for any losses and that they would suffer the consequences of bad decisions, they might have been a little less reckless. The problem, in fact, is that American-style capitalism is not capitalist enough: it was the non-capitalist elements that contributed most to the collapse.

The point about sustainability is, I think, separate: irrespective of the economic system in place, sustainability should be taken into account, and capitalist systems can do that as well as any other system. The confusion arises because people have an unfortunate habit of equating capitalism with greed. This is wrong: greed is a human characteristic, not one of any particular economic system. I would be mightily surprised were greed not operating as much in Bhutan as it is in New York City, and as it was under Mao. The underlying makeup of human beings just doesn't differ taht much.

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