volco Posted October 8, 2008 Report Share Posted October 8, 2008 I've seen people extremely focussed on the "crisis" today, and with good reason, the media and politicians hve forced you to (and you might have been personally affected), but the world's economy is expanding and unavoidably Asia is the perfect example. I'll begin posting this article by Tom Dyson. This Is What a True Free Market Looks Like By Tom Dyson September 19, 2008 The smell was so pungent, my stomach lurched and I immediately started sweating. I clutched my nose with my shirtsleeve and started searching for a place to throw up... But I was six stories up... on a catwalk above a pulp mill. There was nowhere to go. The smell was coming from a vat of chemicals to my right. A machine was heating these chemicals, bubbling them in the open air and then piping them to a floor below. A sign on the side said "Danger – Black Liquor." I'm writing to you from India. Two days ago, I went to visit a paper manufacturing plant in the state of Tamil Nadu. First I climbed to the top of the pulp mill. Here, they mix woodchips with powerful chemicals and bleaches until they turn into a thick, white liquid. This is wood pulp. The company bought this pulp mill from a Canadian firm. They took it apart in Quebec, shipped it over, and rebuilt it in the jungle of South India. Later, I wandered through the papermaking plant, where they turn the pulp into paper. This plant makes office paper... the sort you'd use in a copy machine. Dozens of industrial rollers – rotating 50 times a second – stretched the pulp into sheets and wrapped them onto 10-foot spindles. This plant produces 125,000 tons of paper each year... and about $11 million a year in profits. To build this plant from scratch, you'd have to spend at least $225 million. But right now, you can buy this company on the Indian stock market for just $35 million. The story gets even better. This plant is expanding its capacity. In two years, it'll produce 225,000 tons of paper per year, almost twice as much. The expansion could not come at a better time. The Indian paper industry is short of capacity, and paper prices are soaring. An Indian hedge fund – Atyant Capital – asked the DailyWealth team to come visit. They wanted to show me, Steve Sjuggerud, and editor in chief Brian Hunt what fantastic investments you can find in India if you look beyond the high-profile stocks that trade on international exchanges. Here's another example: Yesterday, Atyant introduced us to an Indian power-generating company. India has chronic power shortages. This company owns a power plant that's worth $150 million. Yet the company trades in the stock market with a market cap of $21 million. "They could sell this asset for $150 million tomorrow if they wanted," says Rahul, the fund manager. "There are bidders. It's a liquid asset." Last week, I was in Shanghai, China. Shanghai is a glorious city of glass skyscrapers, modern roads, and expensive train stations. The government planned it. So a lot of this infrastructure will turn out to be wasted money. Take the Maglev train in Shanghai... The Maglev train travels at 270 miles per hour. It takes you from the city center to Shanghai Pudong Airport in seven minutes. The Maglev cost $50 billion. But no one uses it. It's cheaper to take a bus... and more convenient to take a taxi. There were only 20 passengers on my train. Related Articles India is the opposite of Shanghai. It's in shambles... It's dirty and noisy. People sleep in the streets. We're in the country's fourth-largest city, and there are no skyscrapers. It takes an hour to drive 15 miles to the airport. You share the road with cows pulling carts. People dump their trash in the street gutters. This is what a true free market looks like. It's chaos. As an investor, I'm more impressed with India than I am with China. They respect property rights in India. They have honest accounting and one of the most advanced stock markets in the world. And as we've seen this week, India is loaded with wonderful stock market opportunities... Good investing, Tom A Free Market doesn't look good, but it's always better than the maked up alternative. I think of cleanest Pyongyang as an excellent example. The problem is that the make up itself is indeed a value initself. I'll give you a personal example. I live in Recoleta, Buenos Aires. The neighborhood is mainly residential but it's right next to downtown; and both are separated from the waterfront by a "Villa Miseria" (fabela). Villa 31 is a particularly prosperous shantytown with 3 -4 sory buildings. The 30.000+ people that inhabitate this public land enjoy free infrastructure, electricity, clean water, sewage, and they steal telephone linbes and thus adsl all they want. There's a Direct Tv parabolic anthena in every house. I don't own a TV. The land belongs to the Federal Gov not the City of B.A. and thus the executive has authority (a populist). The mayor of B.A. who claimed has read A.R., Mauricio Macri, leader of a Soros semi-Orange semi-Revolution, want to incorporate the area to the city and then deal with it as usual. The question is "what to do" with this villa placed in the most valued real esatate in Buenos Aires. Regardless of the specifics, the alternatives are to either consider the villeros as homesteader on unsused public land, and grant them property rights to their "buildings" and obligate them to pay for their upkeep and infrastructure - or outright expropiation, or reclaiming by te government, then demolition and privatizatin. The latter alternative would look a lot better. It's the make up way. It would serve a "practical" purpose on the short run, a new riverside neighborhood would be built among the richest areas of B.A. But these thieves of utilities are also the ones who turned unsused federal land into a "neighborhood" where a crappy house sells at 25.000 USD! Homesteaders and thieves at the sames time, they were forced to that situation by government populism and now they exert an unavoidable evil force on the rest of downtown. However as ugly as it would be, I'm afraid, I wouldn't superficially like it, that to grant them property rights, then buy them off and slowly gentrify the hood. ç This is an alternative that isn't even considered here, since it's eithe tear it down now! or let them be looters, they deserve it for claiming to being poor. As I've said before the illusion of cleanliness is a value, and perhaps one that many people chose over reality: a true free market entails ugliness. On the other hand there's free land where free people can settle. We are trying to change the culture, but do we have to chose between changing the existing societ and forming a new one? Which alternative, if therer is one, is less platonic? Quote Link to comment Share on other sites More sharing options...
Juxtys Posted October 9, 2008 Report Share Posted October 9, 2008 On the other hand there's free land where free people can settle. We are trying to change the culture, but do we have to chose between changing the existing societ and forming a new one? Which alternative, if therer is one, is less platonic? Free land? Where? In Antarctica? All other land is already claimed for some government in a one way or another. Of course, who could stop us from buying a huge space of land, establishing a settlement and letting it rise and expand, and then it our infrastructure is good and big enough, repeat what was done on July 4, 1776? If USA government continues to do worse, they wouldn't use aggresion against organised and well established Objectivist movement. Althought it is much easier to try to change the society we live, unless most of the people become death to our ideas. Quote Link to comment Share on other sites More sharing options...
Zip Posted October 9, 2008 Report Share Posted October 9, 2008 unless most of the people become death to our ideas. too late. Quote Link to comment Share on other sites More sharing options...
Devils_Advocate Posted October 10, 2008 Report Share Posted October 10, 2008 India is far from a free market. According to the World Heritage report, it's freedom percentage was 54.2, placing it at 115/157. It's not as bad as it could be, but it certainly isn't a true free market. And either way, the argument is about morality, not efficiency (although, we could probably win that argument too, if you're an Economist). Quote Link to comment Share on other sites More sharing options...
Juxtys Posted October 10, 2008 Report Share Posted October 10, 2008 *I meant 'deaf' in my post above. Quote Link to comment Share on other sites More sharing options...
Steve D'Ippolito Posted October 10, 2008 Report Share Posted October 10, 2008 *I meant 'deaf' in my post above. Well, that does change the complexion of your post, but it's still too late. Most people are deaf to our ideas. Quote Link to comment Share on other sites More sharing options...
volco Posted October 10, 2008 Author Report Share Posted October 10, 2008 (edited) Free land? Where? In Antarctica? No, the U.N. has already claimed that... of course I meant "spare" land but had writen the post fast and obviously without checking it. btw there's actually SOME free land in some parts of the world ready to be homesteaded, but that's not the norm, and it gets regulated in few years, but it does happen India is far from a free market Indeed, and so is China. I found interesting this comparisson between both countries because it remarks how freedom, (like freedom from censorship) unveils a lot of "ugliness". My whole point -which I'm still trying to formulate- is that there's got to be a reason for not adopting Capitalism. By reason, I mean, there's got to be a value we're not taking into the equation. Disregard the irrationality, and the special interests that prevent a free market for arising, nevermind the culture, there is the sense of security, order and cleanliness that offers itself as a value that many buy at an unknown price. The other question, is whether it's a lost cause to change existing economies, and the only way would be to create a new, free society. like a gulch. But that seems awfully platonic. I mean, haven't you ever seen the similarities between Galt's Gulch and the Topos Uranos? Edited October 10, 2008 by volco Quote Link to comment Share on other sites More sharing options...
Devils_Advocate Posted October 11, 2008 Report Share Posted October 11, 2008 (edited) My whole point -which I'm still trying to formulate- is that there's got to be a reason for not adopting Capitalism. By reason, I mean, there's got to be a value we're not taking into the equation. Disregard the irrationality, and the special interests that prevent a free market for arising, nevermind the culture, there is the sense of security, order and cleanliness that offers itself as a value that many buy at an unknown price. "It's because they're STUPID! That's why anyone does anything!! Because they're STUPID!!!" -Homer Simpson Edited October 11, 2008 by Devils_Advocate Quote Link to comment Share on other sites More sharing options...
Juxtys Posted October 11, 2008 Report Share Posted October 11, 2008 Well, that does change the complexion of your post, but it's still too late. Most people are deaf to our ideas. It might be that there aren't many 'Give me liberty or give me death' people in the US, but if your government continues to plan your economy, they will begin to here them, I think. Us, Lithuanians, lived pretty good under the planned economy, because it is within our blood to work like horses and eat like monkeys. But not many people in the world are like that. That's why Hitler wanted to make Lithuanians Germans' slaves. But it's not going to work out in USA, as I see. Quote Link to comment Share on other sites More sharing options...
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