You can’t spend way beyond your means and then try to claim by government decree that your currency is still worth the same as the US dollar. Not clear to me how doing that would have gone any better if socialists had been in power.
2 Likes
No disagreement from me that those would be policies on course for failure regardless of who implemented them.
A larger issue would be systemic. Assuming Lebanon pays ~5% interest on their sovereign debt, and their debt is 100%+ of GDP, they are effectively under the thumb of, for lack a better term, debt peonage. Lebanon has most likely paid more in interest alone over the past 2 decades than their current account balance.
Capitalism sucks for Lebanon, just like it sucks for people who get caught in a Payday loan death spiral. Same system, similar consequences.
1 Like
Unemployment in Lebanon last year was under 7%. Now it’s 33%. This doesn’t count the 20% of their population that’s not allowed to work. Their covid rates are going up pretty dramatically and I doubt they are testing very widely. Far less work is being done. Far less value is being created. Seems like currency value going to hell is the obvious thing to happen. Money is not the problem. How do they produce more? What do they have to offer in exchange for stuff like food?
Their case is going to be in the spotlight and exacerbated by this explosion, but these problems are going to happen all over the world.
/J.M.Keynes
1 Like
Venezuela and Lebanon collapsed because not enough capitalism to save it from all the stupid.
Kind of scratching my head how an extremely indebted country undergoing a massive currency devaluation, that also imports like what 80% of its food, is supposed to provide free food to its population, but that’s just me jaqing off I guess.
3 Likes
3D Print more food.
I don’t think your jaq’n it. Allow me to jaq it too tho.
How many billions $ would it take to feed Lebanon for a year?
How many billions $ has Lebanon paid just in interest on loans just this past year, let alone the past two decades?
Is there really no money for food, or has the money already gone towards what capitalist governments are made to do: enforce wealth inequality & ensure profits for the banking system?
The plight of the Lebanese did not begin yesterday, and like all capitalist nations with extreme wealth inequality the majority of the population has very little control of the factors that brought them to this point.
It is highly likely at this time that our fellow humans in Lebanon will need mutual aid, solidarity, and charity in order to avoid food shortages and unnecessary suffering and death. Praying to our lord and saviour capitalism and his son the free market, hallowed be their names; will not save them.
1 Like
Let me just say I think capitalism is definitely at play here - but I think placing the sole blame on capitalism is really oversimplifying an extremely complex situation in an extremely complex region.
It’s not like they could just up and implement a socialist system right now. Socialism requires resources. It requires a little bit of wealth. Unless the whole rest of the world decides to treat Lebanon as a charity case, it’s just never going to happen. So I find the discussion of it kind of silly, tbh.
Even if they were somehow able to pivot to a socialist system that was able to provide for its citizens, corruption runs deep and definitely exists in socialist systems. It’s not just a feature of only capitalism, although it is frequently comorbid.
Socialism can succeed or fail based on how good the government is at it, but it has a chance at distributing limited resources so that everyone eats. Capitalism doesn’t really allow for that unless there’s way way more wealth than required and still some people will eat out of garbage cans. See Cuba. You can look at famine in the USSR of course, but my point is that Capitalism necessarily had people hungry in Cuba. It was/is a poor country. Socialism, reasonably well executed, had less inequality with the same amount of wealth.
Does Capitalism or Socialism generate more useful goods and services? Capitalism has an advantage in that markets unthinkingly react to needs. Planned economies can do better (at least at some things) or worse. (generally worse I think - but segments of society can be socialized without eliminating Capitalism)
1 Like
I am not placing sole blame on capitalism. Agree that there are multiple factors in play. Corruption being one of them. But you see when a politician embezzles money from the public coffers while leaving the population short of resources, that is rightly called corruption regardless of the form of govt. However, when a govt operating within our currently existing international capitalist hegemony shovels money to banksters while their population suffers, well we don’t call that corruption. Why? Because our when our lord and saviour capitalism and his son the free market take from the poor and give to the rich then it’s the moral and just thing to do.
You asked where the money to feed the people of Lebanon would come from. Identifying that it’s already been handed over to the banksters multiple times over answers your question. Maybe it’s silly to point that out? It seemed like you asked genuinely, so I assumed you genuinely didn’t know.
In the future when US politicians try to convince you that there’s no money for your SS & Medicare after they’ve shoveled trillions to the wealthy and the banks, you’ll see right through that lie.
1 Like
In the future?
2 Likes
I am largely ignorant of the situation over there and am genuinely just asking questions. I know a little from reading this past week but for instance I didn’t know they were net importers of food or that they were the third most indebted country.
The situation you describe is true - we don’t call that corruption. It’s another topic, but I believe well-regulated capitalism doesn’t necessarily have to be inherently corrupt. However, that well-regulated system probably ends up looking more like socialism than capitalism.
The shared problem of a lot of these economic systems is the gradual entrenchment and power-enrichment of bad actors. Well-regulated capitalism and socialism are both almost certainly viable when run in good faith, but it’s unbelievably hard to keep sociopaths from gradually gaining a foothold as a society progresses between multiple generations and democratic transitions.
In addition to better and more resilient regulations, I think the ideal economic system is one that more explicitly and effectively incentivizes prosocial corporate behavior (e.g., cleaning the air rather than polluting it, planting trees, etc.). Let’s teach people to associate profits with community development rather than exploitation, and then maintain the governmental/social/cultural checks in place to ensure that the remaining a-holes don’t carve out a progressively-wider avenues toward profitable sociopathy.
There are some parallels here to the Icelandic financial crisis of 2009ish. Iceland got their banking sector up to 7x GDP though.
“The Lebanese banking sector represented financialization on steroids. Its size was more than four times that of the total economy in 2019.”
Why do these capitalist banking systems keep turning into ponzi schemes?
it’sallaponzischeme.alwayshasbeen.jpg
Ok goddamit this led me to break my self-quarantine. Why are we assuming Lebanon is in dire poverty? From my understanding at has one of the largest young secular communities in the Arab world, and other than having to deal with Hamas and a ton of Syrian refugees, it’s hanging in there pretty well.
Note: most of my understanding is based on Tony Bourdain’s shows. But still, they’re usually pretty accurate.
Hyperinflation, the disappearance of the middle class, and over half the country below the poverty line, due to the war in Syria and a corrupt government. That’s why.
It wasn’t great, but it got a lot worse last year and the 2020 piled on with COVID and, now, the port explosion.
Ok well Tony Bourdain died in 2018 so that’s where my knowledge stopped.
We should be doing everything to prop up Lebanon imo. Of course Trump, so
Yeah like I’m far from a Middle East expert, but I know that instability creates uncertainty. It increases the risk of terror organizations gaining resources and influence, and on Israel’s doorstep no less. The current government in Lebanon seems pretty bad, but massive instability could be disastrous. Send help to the people, keep the nation afloat, and try to promote transparency and better governance.
I’m more worried about the young secular forward-looking crowd that Tony Bourdain spotlighted in his shows there. He made Beirut look like a pretty fun place to hang out. We have to encourage that as much as possible in the Muslim world imo if we want to see progress in our lifetimes.
1 Like
I agree, we do that by providing massive amounts of food, water and medical supplies in the short term, and interest free loans for infrastructure and rebuilding after that. Ideally some aid in that realm too, not just loans.
Of course we can loan it now with no interest and forgive it later.
1 Like