Re: Nations as Corporations
In a message dated 8/14/02 8:21:54 PM, [EMAIL PROTECTED] writes: However, the two statements are compatible. In society there are minorities with little power and other minorities with much power. For example, a country could have a ruling elite with much wealth and power, and also despised minorities with little power. Fred Foldvary Well minorities can't generally be both overpowered and overly-powerful as you first claimed in self-contradiction. Either they as a general rule run things or as a general rule get overrun (or neither), but not both. To say that currently some small groups get a good deal of what they want and that other small groups don't probably describes the current situation, and probably predicts the outcome of Professor Hanson's set-up, but not in a way that clarifies anything about either. David Levenstam
Re: Nations as Corporations
On Thu, 15 Aug 2002, Misha Gambarian wrote: On the other side, if we allow people to buy more than one share (as it happens in real corporations) - then I think we can expect that rich people will buy many shares (as they do in existing real corporations) to get political influence more directly than now and USA will become oligopoly with poor people having less power than they have now. Ok. Assume 280 million shares (approx. current population). Current GDP is approx. 10 trillion. I have no idea what the current valuation of the stock of wealth in the US is, so let's just assume a lower bound share price as being 1/n of the PDV of income flows (GDP). The present value of an infinite income flow of 10 trillion dollars at 5% interest is about 200 trillion dollars. Dividing that by the number of shares, we get about $700,000 share value. The share price can't go much lower than that because, in the limit, somebody could buy all the shares, enslave everyone, and get output that would be some fraction of current output (lower since it would be expensive to keep everyone as slaves). But, to get the majority necessary to do that would require an investment of at least half the market valuation -- $100 trillion. While I think capital markets are fairly efficient, I find it quite implausible that anyone could raise that kind of money to run a hostile takeover. And, absent that, just buying another $700K share to get one more vote would be ridiculous. Even if all the rich folks in the country liquidated all of their resources to buy shares, they still wouldn't have any significant increase in their control rights. Bill Gates has what, about $62 billion? If he sold everything, he could buy about 89,000 shares. Out of 280 million. That's still less than a tenth of a percent of the shares. Fears (or hopes!) of oligopoly are greatly overstated.
Re: Nations as Corporations
Eric Crampton wrote: [EMAIL PROTECTED]"> On Thu, 15 Aug 2002, Misha Gambarian wrote: On the other side, if we allow people to buy more than one share (as ithappens in real corporations) - then I think we can expect that richpeople will buy many shares (as they do in existing real corporations)to get political influence more directly than nowand USA will become oligopoly with poor people having less power thanthey have now. Ok. Assume 280 million shares (approx. current population). Current GDPis approx. 10 trillion. I have no idea what the current valuation of thestock of wealth in the US is, so let's just assume a lower bound shareprice as being 1/n of the PDV of income flows (GDP). Here you assume that all GDP income is distributed as dividents - doesn't look probable. If people assume that their normal income is dividents this still doesn't work, because of income inequality. [EMAIL PROTECTED]"> The present value ofan infinite income flow of 10 trillion dollars at 5% interest is about 200trillion dollars. Dividing that by the number of shares, we get about$700,000 share value. If we assume 5% interest on deposits, then $700,000 represents income of $35,000/year - pretty good for not very rich USA citizen. I think with this share price we will have huge emigration from USA to, for example, Bahamas. I think share price will absolutely never be so high - I think we can speak about 50-100,000 as top estimation. If price is 5, then . Of course, You have a point - if USA 'Costs' 10 trillion, then 1/280million part of USA should cost $700,000. But I doubt that it will work this way. We probably have no dividents, market isn't very liquid and so on. For example, in Russian Voucher program it was expected that Voucher (for which was sold very substantial part of Russian industrial property would cost about $10,000 - but actually they cost about $10. There is two more questions. First, what happens with people who sell their shares. a) They can be effectively expelled from USA. It will probbaly lead to USA without underclass, with much less crime and slightly higher cost of living. Doesn't look very probable, through. (INS and border quard look uncapable to achieve this). b) They will be expelled, but unefficiently (more or less like mexican illegal immigrants now). It will lead to larger underclass than now without rights, probably more crime. c) They can just lose their voting rights, but still have right to work and live in USA. In this case I expect price of share to be very small, probably less than $10,000 - and in this case Gates can buy 6,000,000 votes and more or less make USA presidents (No president will be able to ignore him). I this case we will come to oligarchy pretty quickly. Second question, what will happen if somebody sells his share and then dies? Or just dies ? does his share dissapear? It doesn't look just if somebody bought share, come to live in USA, and then was suddenly expelled when previous owner died. On the other side, if shares stay, there becomes constant supply of shares from old persons, and we cannot expect shares price to be high. (people will spend retirement in Mexico instead of Florida, in cheaper coutry and having substantially more money.) [EMAIL PROTECTED]"> The share price can't go much lower than thatbecause, in the limit, somebody could buy all the shares, enslaveeveryone, and get output that would be some fraction of current output(lower since it would be expensive to keep everyone as slaves). But, toget the majority necessary to do that would require an investment of atleast half the market valuation -- $100 trillion. While I think capitalmarkets are fairly efficient, I find it quite implausible that anyonecould raise that kind of money to run a hostile takeover. And, absentthat, just buying another $700K share to get one more vote would beridiculous. Even if all the rich folks in the country liquidated all oftheir resources to buy shares, they still wouldn't have any significantincrease in their control rights. Bill Gates has what, about $62billion? If he sold everything, he could buy about 89,000 shares. Out of280 million. That's still less t han a tenth of a percent of theshares. Fears (or hopes!) of oligopoly are greatly overstated. As I tried to argue above, we can expect share price to be much lower than $700,000 (at the least at the start), and possibility of oligopoly can be much higher that you think. Mikhail Gambarian Major of Economics, Erasmus University
Re: Nations as Corporations
On Thu, 15 Aug 2002, Misha Gambarian wrote: Here you assume that all GDP income is distributed as dividents - doesn't look probable. If people assume that their normal income is dividents this still doesn't work, because of income inequality. Not assuming that at all. Just trying to get a handle on the break-up value of the country for purposes of assigning some minimum valuation. The break-up value shouldn't be less than the value of the assets in the country, and the value of the assets in the country should be reflected in the current earnings stream (GDP) generated thereby. Bahamas. I think share price will absolutely never be so high - I think we can speak about 50-100,000 as top estimation. If price is 5, then . The valuation I used assumed that any single owner could appropriate the entire earnings flow of the country. If the corporate charter of the United States prevents the enslaving of people in the country who aren't shareholders, then my numbers would be a rather high upper-bound and the actual price would be lower. How restrictive do we expect the corporate charter to be? And who will enforce it? The Constitution was supposed to have been some kind of binding document, but the Constitution now seems to just increase the costs for government to engage in certain types of activities rather than preventing them altogether. H. For example, in Russian Voucher program it was expected that Voucher (for which was sold very substantial part of Russian industrial property would cost about $10,000 - but actually they cost about $10. Well, the official estimates of the value of industrial property was rather too high in that case, no? First, what happens with people who sell their shares. a) They can be effectively expelled from USA. It will probbaly lead to USA without underclass, with much less crime and slightly higher cost of living. Doesn't look very probable, through. (INS and border quard look uncapable to achieve this). b) They will be expelled, but unefficiently (more or less like mexican illegal immigrants now). It will lead to larger underclass than now without rights, probably more crime. c) They can just lose their voting rights, but still have right to work and live in USA. In this case I expect price of share to be very small, probably less than $10,000 - and in this case Gates can buy 6,000,000 votes and more or less make USA presidents (No president will be able to ignore him). I this case we will come to oligarchy pretty quickly. If there are 240 million shares, Gates would need an order of magnitude higher number of shares to be able to get a controlling interest. Six million out of 240 million is still pretty small potatoes. Second question, what will happen if somebody sells his share and then dies? Or just dies ? does his share dissapear? It doesn't look just if somebody bought share, come to live in USA, and then was suddenly expelled when previous owner died. On the other side, if shares stay, there becomes constant supply of shares from old persons, and we cannot expect shares price to be high. (people will spend retirement in Mexico instead of Florida, in cheaper coutry and having substantially more money.) Presumably the estate would hold the share, and then sell it to the highest bidder. If the only source of new shares is from the sale of current shares (either through emigration or death), the price of shares would be quite high. The sum of people wanting to move to the United States plus people being born in the United States is much higher than the current mortality numbers. As I tried to argue above, we can expect share price to be much lower than $700,000 (at the least at the start), and possibility of oligopoly can be much higher that you think. Valuation will depend on the nature of the corporate charter and, critically, on whether that charter can be made self-enforcing. If a majority shareholder is not bound by the corporate charter, then we can quickly become his slaves and he can appropriate all revenue, unless the total amount of extraction from a slave state is lower than the maximal taxation from a free state. In either case, the total valuation has to reflect the PDV of the maximum amount that can be appropriated by a single majority owner. Mikhail Gambarian Major of Economics, Erasmus University
Re: Nations as Corporations
On Thu, 15 Aug 2002, john hull wrote: to pay. Do you think a firm would take the risk of plunking down that kind of money for a multi-generation debt? It would likely depend a lot on how property rights over shares work out and how liens on shares would be treated. If the market price did settle around $700K, then it would be unlikely that an indentured servant would pay off his share in his lifetime. However, he could pay off some fraction of his share and his estate would inheret a fractional share. So long as the company bringing in the indentured servant could maintain its property right over the part of it that isn't paid off, the system should work. I am curious why you used GDP as the basis for share calcualtion. I'm not attacking it, I just don't it's appropriate. Seemed like a decent starting point for getting a total market valuation. I'd more than welcome alternatives. In the limit, the market valuation of the country is the market price of the assets in the country (the break-up value). I have no way of guessing at the valuation of the current stock of wealth in the country, but the stock of wealth should be reflected in the current price of outputs. The stock of capital should be equal in valuation to the present discounted value of the stream of revenues flowing therefrom. Of course, I'm also treating the population as part of the capital stock in doing this. Eric Best wishes, -jsh __ Do You Yahoo!? HotJobs - Search Thousands of New Jobs http://www.hotjobs.com
Re: North on ideology
And free market anarchists like Tucker, who also identified themselves as libertarian socialists, saw the state as the central, defining characteristic of capitalist exploitation (and all other forms of exploitation). Exploitation, defined as the use of force to enable one person to live off another's labor, was the central function of the state, and was impossible without it. For Tucker, free market capitalism was an oxymoron. It's interesting you refer to Leninism, Social Democracy, and Fabianism as allied phenomena--because in fact, they all reflect the rise of the New Class of professionals and planners, who began to take over the labor and socialist movement in the late nineteenth century. In fact, Nazism itself was prefigured in many ways (including extreme antisemitism, eugenics, etc.) in Fabian thought. Socialism in the U.S. persisted, though, as a largely self-organized, working class movement until WWI. It was at that point that the progressives and Crolyites in the Wilson administration, under the pretext of war hysteria and the Red Scare, liquidated most of the genuine working class left. Before WWI, the main electoral support for the Socialist Party was among Oklahoma oil workers, Montana miners, Milwaukee brewery workers, etc. After WWI, socialism's main demographic base was either academia or yuppie hog heavens like Burlington, Vt. From: [EMAIL PROTECTED] I suspect that Von Mises' insight refer more to the brands of socialism popular in his era, such as communism, social democracy (Austria, France, Germany), Labour Party socialism (Britain), and of course Nazism, rather than to all socialisms throughout modern history. As Elizabeth Tamedly points out in _Socialism and International Trade_, most forms of socialism historically have not advocated an abolition of private property. Most have advocated some mixture of private property and government control. If you want to argue that the more the government control, the less the substance of private property ownership, I'd certainly agree, noting that there's something of a spectrum of government control, with communism on one extreme. Not all government control is created equal (thankfully). David Levenstam _ Chat with friends online, try MSN Messenger: http://messenger.msn.com
