“It is much too early to tell where we are all going with this.”

Exactly. As I said: Let’s wait and see.

In the long term, of course, high commodity prices are the driver needed for third world countries to develop their agriculture beyond the subsistence stage: at the moment it makes more economic sense for a dictator to feed his urban poor with subsidised Western foodstuffs and let the countryside stagnate.

It is much too early to tell where we are all going with this. China’s economy has a long, long, long way to fall still. Then the future of the world will be in the hands of the newly impoverished Chinese middle class.

This assertion is also very dubious. The poor in underdeveloped countries are quite disconnected from the general economy except for the essential commodities they need, often paid for by aid. Thus the financial turmoil, by reducing demand for energy and food commodities. Thus things like increased unemployment (unemployment is high anyway, many are subsistence farmers) doesn’t affect the poorest like the commodities boom did. The evidence, such that it is, is that very few of the newly unemployed and struggling are destitute in poor countries where they were doing okay before the financial collapse.

I agree that some cyclic ups and downs are good, but it is all a question of scale.

There are winners and losers with cyclical ups and downs regardless of scale. It is just in the large scale, the scale of losses and gains is much more. In 1929 (actually later in the 30’s), the US eventually reacted by raising tariffs (essentially blaming foreigners) which exacerbated the spiralling downward of world trade. This time round the omens are also not good in that regard. Trade and migration is already faltering, and even so, countries are wanting to insulate themselves even further from contagion. Ill effects on the poor from reduced trade should be blamed on the governments that put up, or fail to take down trade barriers, not on causes of the initial financial crash. Not everyone loses in a cyclical downturn, no matter how large. If trade crashes, almost everyone loses.

I object to the continuing reference in the media about the effects of the financial crisis being disastrous. If pre July 08 someone could have thought of a way to dramatically reduce fossil fuel demand at the same time as reducing its cost for dependent users (ie. the poor) without war or killing anyone, they would have been thought a genius! This is exactly what has happened. Very few have lost so much that they are facing life-threatening destitution. The overall amount of money hasn’t changed a great deal but so much more of it is squirreled away in Government treasuries instead of being actively financing commercial enterprise. It is just a sudden retreat from the excesses, including greed, that you have mentioned that have built up over several years.

So greed is good, if one thinks that greed caused this financial crash, and that reduction of greenhouse gases without taxing the poor is good.

Bring on the continuing cycle of deflation!

Yes, of course it is, but as far as the mutual agreements are concerned, one side hardly had another choice.

““personal ownership of the means of production… should be restricted”, on the other hand, implies that a great number of profitable, job-creating enterprises should be compulsorily acquired or dismantled whether the owners agree or not, and presumably these owners will be fined or imprisoned if they do not comply. To me that is an unacceptable level of government interference. I think history also shows that where it has been tried the economic consequences have been unpleasant.”

I certainly would find this unacceptable, and I don’t think Schumacher had in mind getting people fined or imprisoned. As far as history is concerned, I assume you mean the Soviet Union and other eastern European states. These experiences certainly have been unpleasant, but I am not sure that one should generalize too much. After all, with accumulating experience and different historical backgrounds, perhaps other outcomes are possible. But ?????????? And Schumacher’s model, for example, allows for privately run enterprises, as far as they are not too big. Moderate socialists, like for instance Bertrand Russell, wanted key industries only nationalized. And he certainly was no communist who wanted owners fined or imprisoned.

However- and correct me if I am wrong, for I have been trying not to pay attention to the outside world for some time- is not this partial nationalisation currently underway a mutually-acceptable agreement to preserve jobs and liquidity by rescuing a relatively small number of enterprises that would otherwise collapse in a heap?

“personal ownership of the means of production… should be restricted”, on the other hand, implies that a great number of profitable, job-creating enterprises should be compulsorily acquired or dismantled whether the owners agree or not, and presumably these owners will be fined or imprisoned if they do not comply. To me that is an unacceptable level of government interference. I think history also shows that where it has been tried the economic consequences have been unpleasant.

“In 1955 Schumacher traveled to Burma as an economic consultant. While there, he developed the principles of what he called “Buddhist economics”, based on the belief that good work was essential for proper human development and that “production from local resources for local needs is the most rational way of economic life.” ”

I don’t know whether Schumacher wrote his book before or after conversion to catholicism.

“The distributist dream is all very well, but in practice such a decree could only be enforced by a totalitarian state. I would rather live under the invisible hand of the market, with all the turbulence and occasional pain we know is associated with it, then as a class enemy under the iron hand of the Central Committee. But that is just me…”

What about the partial and possible complete nationalization of banks in some arch-capitalist countries right now? And what about the massive cash injection into the car industries in even more countries? Is this the first step to a de facto state run economy? If so, one does not need a central committee.