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7/3/2017, 20:00

European Dissidents ALARM

 

Zeppelin: Beyond Gravity

 

Foreign intervention in Greece?

 

Η ανελεύθερη Ελλάδα

 

Η Ελλάδα καταγώγιο;

 

Αν.Επ. Π. Παυλόπουλο

  

Intangible prisons

 

Plausible deniability

 

Images of German w & s

 

Crimes against Humanity

 

"Chimera" - "Bellerophon"

 

pr. Donald Trump

 

  

Legal Notice 87

 

Βδέλλες, αποικιοκρατικές

 

Being a German

 

Legal Notice 84

 

Dirty colonial methods

 

Georgi Markov, BG - KGB

 

Samples of Barbarity

 

Ελλάδα - αποκόλληση

 

Έλληνες, στο έλεος...

 

Harvester's log 16/3/17

 

 

Legal Notice 66

 

Execrable

 

Legal Notice 62

 

  

My story

 

  

Aggression?

 

  

Η Εστία μου

 

  

Why so untidy?

 

  

Αποικιοκρατία

 

  

Εξόντωση Ελλήνων αντιφρονούντων;

 

  

Ζήτημα εμπιστοσύνης

 

  

Μεθοδικότητα

 

  

Ανοικτή Επιστολή πρέσβη ΗΠΑ

Αφορμή, U2RIT vs Ελλάδα;

Βιοηθική

A request to U2RIT

Colonial aggression - 2

Open Letter to UN S.G.

Open Letter to p.C. & p. O.

Δήλωση πρόθεσης επαναπατρισμού

 

Ο "εφιάλτης" της Νυρεμβέργης

Συλλογή Φωτογραφιών

Αίτημα προστασίας, προς Ιταλία

Chroma key, background removal

Science and Ethics

Να συμβάλει και η U2RIT

Θα ξαναφτιάξουν πολλές φορές Άουσβιτς και Zyclon B

 

Split-Screen effect

Η Ζωή είναι Ωραία.

Βόρεια Κορέα

Λευτεριά στους Έλληνες, εξανα- γκαστικά "Εξαφανισμένους"

 

Μυστικές δίκες;

Trustworthiness

Πολιτισμό, ή, απληστία;

Ακραία Στυγνότητα

Η Τέχνη της Επιβίωσης

Political Asylum 3

Επιστροφή στις ρίζες

The Human Cost of Torture

An urgent appeal for solidarity

More obvious than the Sun

Western "culture"

Political Asylum

Έννομη Προστασία

Μια μήνυση που εγείρει ερωτηματικά

 

 

 

Honor your father...

Noise

Creative Greeks

A pair of Dictatorships

External economies and external diseconomies PDF Εκτύπωση E-mail
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Συντάχθηκε απο τον/την Χρήστος Μπούμπουλης (Christos Boumpoulis)   
Τετάρτη, 24 Μάιος 2017 23:21

External economies and external diseconomies

 

External economies

The concepts of external economies and diseconomies (“externalities”) treat the subject of how the costs and benefits that constrain and motivate a decision maker in a particular activity may deviate from the costs or benefits that activity creates for a larger organization. Most of the economic literature on externalities has focused on the operation of an entire economic system, with particular reference to the effectiveness of prices, markets, competition, and profit motivation as regulators of production and consumption.

Economic theory suggests that a system characterized by private ownership of resources and sufficient competition will maximize total income and economic welfare. The system will establish an equilibrium in which product prices equal their costs on their respective margins of production. Costs include an opportunity rate of return on invested capital, which is an element of business accounting profit, and the rewards, or “rent,” that especially endowed resources may command. Production costs also reflect technological constraints, and producers employ the least costly method of producing any given output. A further characteristic of the equilibrium is that similar resources, including capital, obtain equal earnings or returns in all activities. If earnings were unequal, resources would enter more profitable activities and leave less lucrative ones until earnings equality comes about. The resulting allocation of resources is also consistent with consumers’ preferences. Finally, consumers’ demands, through their influence on market prices and hence profits, determine the allocation of resources.

The system works in such a way that the wide diffusion of decision making which is necessary if complex systems are to operate at all is permitted. Each decision maker only needs to have knowledge about the things he consumes, or produces, or his occupation. That individuals can so narrow their focus permits a division of labor and, in turn, the resulting gains of specialization. The vital mechanism (and social institution) that facilitates such specialization is the price system, or market organization. The price system is an “information system” that provides producers and consumers with the signals that guide their behavior. Hence, the economic system is highly interdependent: the combined behavior of individual decision makers spontaneously determines relative prices and quantities of items produced and consumed, while relative prices are the signals, constraints, and opportunities to which individual decision makers respond and adapt.

Such a general equilibrium system has two specific qualities: (1) Production costs of each item, on its respective margin of production, when viewed in a social cost sense, equal the price of each item. (2) The price of each end product accurately reflects the incremental satisfaction that consumers attach to it. These two qualities constitute a “social optimum” in that national income and economic welfare are maximized [see, however, WELFARE ECONOMICS]. Note that it is only optimal if the marginal social costs of each activity equal the social benefits they create. If the social cost of an activity exceeds the costs relevant to the decision makers in the activity, there is an external diseconomy. If the benefits of an activity exceed its marginal cost, there is an external economy.

Due to the extreme interdependence within an economy, the behavior of a given industry can increase the cost of other industries in ways which need not be socially undesirable. Some of these phenomena, too, have been associated with the subject of external economies and diseconomies. One of the difficulties in the evaluation of externalities is the problem of determining which are socially desirable or undesirable and should be promoted or counteracted by public policy measures and which do not warrant government interference with the private sector.

The subject of external economies and diseconomies thus treats possible mechanical shortcomings of an economy that cause individual decision makers to operate in a fashion that thwarts the full attainment of broad social objectives. To some students the possible wide extent of externalities is sufficient basis to justify extensive government intervention in the private sector of the economy. To other students this point is debatable. The resolution of these differences has been, and remains, a major unsettled issue in economics.

 

External diseconomies

Technical external diseconomies. Technical external diseconomies, sometimes called “nuisance effects,” were extensively discussed by A. C. Pigou ([1920] 1960, part 2, chapter 9). They arise from undesirable by-products of a production process. An example used by Pigou is the case of steam locomotives emitting sparks that cause fires. A farmer’s livestock that eats his neighbor’s crops is another example. Extensive lists of unwanted byproducts may be drawn up in modern societies– from air and water pollution to traffic congestion associated with the automobile.

Such unwanted by-products are a natural consequence of many production processes. They impose a cost upon society similar to the cost of productive resources necessary to produce the desired product. They create a social problem insofar as their cost may not be properly allocated between different segments of the economy.

Let us consider further Pigou’s example of spark-emitting steam locomotives. Assume that the marginal cost of employing resources to produce a ton-mile of railroad freight service may be 3 cents. The railroad system, however, “causes” 0.5 cents worth of damage per ton-mile because of fires inflicted on farmers’ crops adjoining the right-of-way. Whether such behavior creates an unwarranted social cost, and what the appropriate social policy should be to deal with it, pose some subtle and complex issues.

The main force of Pigou’s treatment of the subject is that the “social cost” of producing a ton-mile of freight is 3.5 cents (3 cents for the railroad’s own costs, plus 0.5 cents for the destroyed crops). The policy prescription is that the railroad should be made to pay farmers for their destroyed crops or that railroads should be taxed or restrained in other ways that will prevent damage.

Coase (1960) has demonstrated, however, that this traditional approach to “nuisance effects” is wrong. The relationship is reciprocal. Crop damage is “caused” just as much by the farmer’s growing crops along the railroad’s right-of-way as by locomotives emitting sparks (indeed, the doctrine of “causation” is spurious). Moreover, to restrain railroads in arbitrary ways may impose a greater social loss (due to higher-cost railroad services) than the loss of some crops. The proper solution is to design a system that maximizes the economy’s total product.

Such a solution might be found by recognizing that in producing the crops associated with the 0.5 cents per ton-mile of damage, farmers must purchase resources worth, say, 0.4 cents. Under these conditions, the railroad could pay farmers 0.1 cent not to grow crops along its right-of-way. Farmers would be just as well off as if there were no railroad; freight costs would be 3.1 cents per ton-mile, instead of 3.5 cents if farmers were arbitrarily awarded “full” damages; and 0.4 cents worth of resources would be freed to produce other products. Indeed, this kind of solution is often worked out spontaneously by bargaining between the concerned parties or is brought about through legal adjudication.

The social problems associated with external “nuisance effects” arise when certain scarce resources are treated as if they were “free goods”- because of faulty specification of property rights, or because it is difficult to identify in some quantitative way who causes the nuisance or who suffers from it (or both), or because the administrative costs of “solving” the problem may be more costly than the nuisance itself. Many students suggest that activities imposing unregistered social costs upon society be subjected to special excise taxes; however, the precise design of excise taxes that would not themselves distort resource allocation is difficult. Other students urge extensive state regulation. However, a distressing number of nuisance effects are due to activities that are already either regulated or managed by the state, for example, highway systems and government-owned public utilities, suggesting that effective solutions may not be easily attained from that quarter.

Sweeping solutions to the nuisance effect problem do not appear readily available. Thus far in virtually all social systems they have been coped with on an ad hoc basis. Perhaps one of the best ways to achieve better social guidelines for treatment of these problems is for economists to give more attention to the precise content of property rights, in terms of their economic effects, and for lawyers to employ economic analysis to evaluate the social utility of legal principles applied to torts.

[www.encyclopedia.com/social-sciences/applied-and-social-sciences-magazines/external-economies-and-diseconomies]

 

 

Warsaw Pact Invasion of Czechoslovakia (1968) - YouTube

https://www.youtube.com/watch?v=fPqjYYDV_PU

 

Warsaw Pact invasion of Czechoslovakia

The Warsaw Pact invasion of Czechoslovakia, officially known as Operation Danube, was a joint invasion of Czechoslovakia by four Warsaw Pact nations – the Soviet Union, Bulgaria, Hungary and Poland – on the night of 20–21 August 1968.[15] Approximately 250,000[4] Warsaw pact troops attacked Czechoslovakia that night, with Romania and Albania refusing to participate. Although East German forces were prepared to participate in the invasion as well, they were ordered from Moscow not to cross the Czechoslovak border just hours before the invasion.[1] 108 Czechoslovakian civilians were killed and around 500 wounded in the invasion.

The invasion successfully stopped Alexander Dubček's Prague Spring liberalisation reforms and strengthened the authority of the authoritarian wing within the Communist Party of Czechoslovakia (KSČ). The foreign policy of the Soviet Union during this era was known as the Brezhnev Doctrine (When forces that are hostile to socialism try to turn the development of some socialist country towards capitalism, it becomes not only a problem of the country concerned, but a common problem and concern of all socialist countries.).

 

The Prague Spring (Czech: Pražské jaro, Slovak: Pražská jar) was a period of political liberalization in Czechoslovakia during the era of its domination by the Soviet Union after World War II. It began on 5 January 1968, when reformist Alexander Dubček was elected First Secretary of the Communist Party of Czechoslovakia (KSČ), and continued until 21 August when the Soviet Union and other members of the Warsaw Pact invaded the country to halt the reforms.

The Prague Spring

The Prague Spring reforms were a strong attempt by Dubček to grant additional rights to the citizens of Czechoslovakia in an act of partial decentralization of the economy and democratization. The freedoms granted included a loosening of restrictions on the media, speech and travel. After national discussion of dividing the country into a federation of three republics, Bohemia, Moravia-Silesia and Slovakia, Dubček oversaw the decision to split into two, the Czech Republic and Slovak Republic.[20] This was the only formal change that survived the end of Prague Spring, though the relative success of the nonviolent resistance undoubtedly prefigured and facilitated the peaceful transition to liberal democracy with the collapse of Soviet hegemony in 1989.

The reforms, especially the decentralization of administrative authority, were not received well by the Soviets, who, after failed negotiations, sent half a million Warsaw Pact troops and tanks to occupy the country. A large wave of emigration swept the nation. A spirited non-violent resistance was mounted throughout the country, involving attempted fraternization, painting over and turning street signs (on one occasion an entire invasion force from Poland was routed back out of the country after a day's wandering, another force went around in a circle), defiance of various curfews, etc. While the Soviet military had predicted that it would take four days to subdue the country the resistance held out for eight months, and was only circumvented by diplomatic stratagems. There were sporadic acts of violence and several suicides by self-immolation (such as that of Jan Palach), but there was no military resistance. Czechoslovakia remained controlled until 1989, when the velvet revolution ended pro-Soviet rule peacefully, undoubtedly drawing upon the successes of the non-violent resistance twenty years earlier. The resistance also became an iconic example of civilian-based defense, which, along with unarmed civilian peacekeeping constitute the two ways that nonviolence can be and occasionally has been applied directly to military or paramilitary threats.

After the invasion, Czechoslovakia entered a period of normalization: subsequent leaders attempted to restore the political and economic values that had prevailed before Dubček gained control of the KSČ. Gustáv Husák, who replaced Dubček and also became president, reversed almost all of Dubček's reforms. The Prague Spring inspired music and literature such as the work of Václav Havel, Karel Husa, Karel Kryl, and Milan Kundera's novel The Unbearable Lightness of Being.

[https://en.wikipedia.org/wiki/Warsaw_Pact_invasion_of_Czechoslovakia]

 

The bombardment of La Moneda Palace - Salvador Allende - YouTube

https://www.youtube.com/watch?v=aeO_lsYldU4

 

United States intervention in Chile

Chile is a country in the southern South America. It borders the countries of Peru and Argentina, and is bordered by the Pacific Ocean. Chile became an independent state in 1810.[1] United States intervention in Chilean politics started during the War of Chilean Independence. The influence of the United States of America in both the economic and the political arenas of Chile has gradually increased over the two centuries since, and continues to be significant.

Salvador Allende ran again in the 1970 presidential election, winning a narrow plurality (near 37%). U.S. president Richard Nixon stated his fear that Chile could become "another Cuba", and the U.S. cut off most of its foreign aid to Chile and supported Allende's opponents in Chile during his presidency, intending to encourage Allende's resignation, his overthrow, or his defeat in the impending election of 1976.[12] To this end, the Nixon administration clandestinely funded independent and non-state media and labor unions. The US feared Allende as president because they believed that Allende would seek to create a socialist state in Chile and that he would eliminate US's significance on Chile. Most importantly, the US feared that under Allende's rule Chile would create a close relation with other Socialist countries like Cuba and USSR. Another fear is that all investments made by the US in Chile would be lost. Having Chile under Allende's rule may also mean that Chile could become a platform for other countries to join the Socialist party (especially in the same hemisphere) [13] On September 15, 1970; prior to Allende taking office, Richard Nixon gave the order to overthrow Allende. This was the first time that a US president ordered the ousting of democratically elected president.[12] On November 5, 1970, Henry Kissinger advised President Nixon against peaceful coexistence with the Allende administration and instead advocated one of two positions.[13] The U.S. government had two approaches to fighting Marxism as represented by Allende. "Track I" was a State Department initiative designed to thwart Allende by subverting Chilean elected officials within the bounds of the Chilean constitution and excluded the CIA. Track I expanded to encompass a number of policies whose ultimate goal was to create the conditions that would encourage a coup.[14] "Track II" was a CIA operation overseen by Henry Kissinger and CIA’s director of covert operations, Thomas Karamessine. "Track II" excluded the State Department and Department of Defense.[14] The goal of Track II was to find and support Chilean military officers that would support a coup.

Immediately after the Allende government came into office, the U.S. sought to place pressure [15] on the Allende government to prevent its consolidation and limit its ability to implement policies contrary to U.S. and hemispheric interests, such as Allende's total nationalization of several U.S. corporations and the copper industry. Nixon directed that no new bilateral economic aid commitments be undertaken with the government of Chile.

The U.S. provided material support to the military regime after the coup, although criticizing it in public. A document released by the U.S. Central Intelligence Agency (CIA) in 2000, titled "CIA Activities in Chile", revealed that the CIA actively supported the military junta after the overthrow of Allende and that it made many of Pinochet's officers into paid contacts of the CIA or U.S. military, even though some were known to be involved in human rights abuses.[45]

CIA documents show that the CIA had close contact with members of the Chilean secret police, DINA, and its chief Manuel Contreras (paid asset from 1975 to 1977 according to the CIA in 2000). Some have alleged that the CIA's one-time payment to Contreras is proof that the U.S. approved of Operation Condor and military repression within Chile. The CIA's official documents state that at one time, some members of the intelligence community recommended making Contreras into a paid contact because of his closeness to Pinochet; the plan was rejected based on Contreras' poor human rights track record, but the single payment was made due to miscommunication.[3] In the description of the CIA's activities in Chile, it is acknowledged that one of their high-level contacts was more predisposed to committing abuse: "although the CIA had information indicating that a high-level contact was a hard-liner and therefore more likely to commit abuses, contact with him was allowed to continue in absence of concrete information about human rights abuses."[46]

[https://en.wikipedia.org/wiki/United_States_intervention_in_Chile]

 

Any Nation, which follows rules, is, probably, going to suffer from expensive colonial, external economies, no matter whether, that Nation, shall, either, socialize, or, liberalize, its economy.

Instead, the Nations of that kind, may focus, less, on the structure of their own economies and more, on the structure and the dynamics, of the other Nations with which, rule following Nations, establish and develop (or refuse), bilateral relationships.

In other words, the problem of, establishing and retaining a viable National economy, tends to remain undecidable, when it is analyzed within the context of the Nation's own, structure and dynamics, while, instead, and in terms of transactional analysis, the “antithesis” to this undecidability may be, keeping, at the collective level, exclusively, “good company”, by whatever this means.

 

Christos Boumpoulis

economist

 

Τελευταία Ενημέρωση στις Τετάρτη, 24 Μάιος 2017 23:52