Economic Systems

[-martin- 10]

What keeps the prices this high? Foreign trade? Government intervention?

The wages are low, and energy prices are high (thanks to privatisation), and therefore prices keep going up. This can be explained in the following way:

1) Companies such as Tesco, Kaufland, Baumax, OBI, Globus, Interspar and Hypernova have built giant shopping malls in the Czech Republic, and when I mean giant I mean giant. There is a Tesco in my city with a 4 deck car park + outside car park, about 1 km from that Tesco there is a huge Interspar and Baumax and now beside those they are building one more shopping mall with a OBI, Kaufland and some other stores. About 3km from that is another Kaufland shopping mall and a half an hour walk from that there is a new giant complex called "The Plazza" which again has Kaufland, Tesco and various other supermarkets.

Overall there are about 25 supermalls in my city which has a population of 200 000 and more keep getting built.

Companies build malls there because the land is cheap for them and they keep the malls there to prevent concurrence from getting a foot hold in the country because they think that one day the Czech Republic will be like the West. I was in a village with a population of about 200 and there was a Lidl, Kaufland and Tesco supermarket there beside each other. Absolutely ridicules.

But some companies have already pulled out of the country such as the French Carefour, (they still have a few stores in Prague if I’m not mistaken, I remember seeing one there) because the country isn’t making progress and they are loosing too much money, their prices were insane tough, highest in the country, they took us for jokes and thought that we will pay them $5 for a Coke can.

2) Because there are low minimum wages people only buy the cheapest food and they rarely buy clothes and electronics, as Vilas said. Because there are such vast supermarket complexes which are almost empty with people making very little purchases (The Tesco supermarkets in my city have 25 cash tills and ironically only 1 – 2 are open) the supermarkets lose money and keep raising their prices.

3) This brings me on the next step, since there are such vast supermarket complexes little corner shops that have been prospering for decades are forced to close contributing to unemployment and rising prices or they have to raise prices too.

4) This brings me on to the next step. Because fuel and spear parts are so expansive it’s no longer worth it for frames to grow food in the Czech Republic and sell it to supermarkets for such a low price like they can buy it from countries like Moldova or Romania, so corner shops don't even have where to buy food from since the farmers in the Czech Republic are so expencive. However the products from such countries are of such a low quality that they sometimes even pose a health risk.

5) Because of the rising food prices and economic collapse land becomes even cheaper and cheaper and companies build even more supermarkets, then this cycle repeats from step 1 to 5 again. It reminds me of the ghost cities in China that the West has been criticizing.

Government intervention?

There is no government, just a bunch of thieves that will do anything when companies bribe them. For example spend billions on outdated Swedish jet fighters that were meant to go on the scrap yard.

I’m so ashamed that my people believed the West’s propaganda, we have some of the most fertile soil in Europe, mines full of sugar and we import this stuff from Holland. The West just wanted to open up our market so they could prosper from us. It’s like the story of Adams apple happened 3000 years later in Eastern Europe again... When will people finally stop being so stupid :bored:

the fact that a job that five people used to do is now done by one shows rather conclusively that things used to be running very inefficiently.

On the contrary, before it was efficient because there was enough people to do the job, people were happy in work and they produced product of high quality, to give you a few example:

I have a Russian shaver that my dad bought in the 1960’s in the Soviet Union for about 25 Rubels, it still works now and cuts better than anything you can get on the market today. I bought a new Philips shaver for £200 about 4 years ago, used it for 5 months and it broke :bored:

Today private companies employ one person and expect him to do the work of 5 people, they want an electrician to fix electricity, fix the water, clean up and what not, soon they will want him to cook as well I bet.

Today people don’t want to go to work, they don’t say hello to their co-workers and they hate their boss, in socialist times people were happy to go to work, you could have a laugh with your boss, people were more like people, now they have turned in to selfish animals.

Although socialism wasn’t good for everything and I won’t defend it for a lot of things, for working it was heaven and there will never be anything better than working in socialism. People were also properly paid, my grandfather worked in a steel factory in Ukraine and made 2000 Rubels every month, one of the highest wages, adequate for that type of job, today people like him don’t have money for food while some prick sits in a office doing nothing and drives a BMW...

Overall going from socialism to capitalism for 99% of the population is like having a Koenigsegg with broken windows and changing it for a Peugeot 206 with fixed windows. What would you rather have? Of course the Koenigsegg.

Edited June 15, 2011 by -Martin-

[vilas 474]

what makes our prices such as US or bigger ?

- taxes (big taxes not mean big social, it can mean big thieves, big frauds, huge money for small group for example "zamówienia publiczne" (public orders, where state orders goods/service from private company, so politician can spend public money to "wife's company")

the same money from budget of state could be spent other way, but i know how it looks from inside as i am public worker too, so i see how "some things are bought" or "how big money one director gets" or "how many wages per month has one ex-officer who drink with someone" etc. (maybe you don't know in America, cause here some people can have 3 wages for one and the same job - retired officer takes pension plus earn wage plus.... "zlecone" contract - all for one and the same work in the same place in the same hours, this one some bastards get dozen thousands PLN + sometimes "rada nadzorcza" in company), politicians have wage 10-20 times bigger than usual man although they only spoil country and economy,

- cost of transport (cost of oil, now in Poland benzine is 5.2 PLN, USD is ca. 3 PLN, so it would give 1.6 USD for liter, not galon)

- oligopolization, cause some few companies have silent agreement on prices and they destroyed competition (bribes, wrong privatisation etc.) and people have to take product from selected seller, cause other sellers are not present (unless someone will fly here with Canon camera in pocket but than warranty is not valid)

- products like electronic cannot cost less than in other countries, cause prices are worldwide

so prices are from those things

Edited June 15, 2011 by vilas

[st_dux 26]

Because there are such vast supermarket complexes which are almost empty with people making very little purchases (The Tesco supermarkets in my city have 25 cash tills and ironically only 1 – 2 are open) the supermarkets lose money and keep raising their prices.

This brings me on the next step, since there are such vast supermarket complexes little corner shops that have been prospering for decades are forced to close contributing to unemployment and rising prices or they have to raise prices too.

This is the part that doesn't make any sense to me. If the supermarkets are nearly empty, then price should be going down, not up. Furthermore, if the supermarkets are charging too much, this should open up a big opportunity for the other shops to undercut them. It is completely counter-intuitive for the small shops to raise prices in order to keep up with supermarkets raising prices; it would make far more economic sense for the small shops to lower prices in this situation, thereby taking back much of the market share.

There must be some other reason why these stores are being forced to raise prices even though no one is shopping at them. My only guess at this point would be that the price is based on a global market value (or at least EU market value) rather than a local value, but it's still very odd that a store would be able to maintain high prices when they have very little shopping traffic. That can't possibly be profitable.

[vilas 474]

heheh here economy works other way:

let me explain this which sounds nonsense for you:

1) supermarket by bribe get best position in town and public transport is located to get people directly there,

2) supermarket is free from taxes (also bribe, they call it "teasing west capital") local shop owner must pay tax, he gets bigger payment for ground hire (i don't know how it is in English, price you pay to town for land under shop), he has bigger prices, he bankrupt,

3 ) supermarket has no competition so he raise price cause people MUST eat, wear clothes and buy tires for cars

4) supermarket do not respect employee rights so people work for penny for 12 hours instead of 8

reason is simply - unfair "tax free" for west capital by our governments while our businesman must pay taxes , he is not free from tax for few years :/ it is crime against economy, releasing other country companies from taxes while our own must pay every cent cause they call it "actions to bring here west capital" i f*** such actions that someone do not have to pay tax oposite to me

Edited June 16, 2011 by vilas

[st_dux 26]

reason is simply - unfair "tax free" for west capital by our governments while our businesman must pay taxes , he is not free from tax for few years :/ it is crime against economy, releasing other country companies from taxes while our own must pay every cent cause they call it "actions to bring here west capital" i f*** such actions that someone do not have to pay tax oposite to me

This is not only unfair, it is patently anti-capitalist, and it is no doubt hurting the economy. This is government corruption on a huge scale.

If the supermarkets really pay no taxes, then it's no wonder that they can make a profit in an environment like that. This sort of destruction of truly free enterprise is completely counter-productive. If the small shops were given the same rights as the supermarkets -- which would be the case in real capitalism -- there is no way that the supermarkets could get away with this. Competition would naturally force the prices to be lower everywhere.

I think you are completely right to be upset with your government for "trying to import western capital." This is bullshit. Western capital doesn't need help expanding; if there is a market, they will come. Artificially enticing them does not promote real growth at all. It just allows for abuses of the system and hurts consumers by creating artificially inflated prices. This is why the government should stay out of economic affairs as much as possible.

Edited June 16, 2011 by ST_Dux

[vilas 474]

there were also some other west companies, not only markets, some time ago as i remember even one car-factory and some other west-coming companies (oposite to our own)

but is it anti-capitalistic ? capitalism is private own of company , is it not? it is anti free-market i agree, we have no free market

Edited June 16, 2011 by vilas

[-martin- 10]

heheh here economy works other way:

let me explain this which sounds nonsense for you:

1) supermarket by bribe get best position in town and public transport is located to get people directly there,

2) supermarket is free from taxes (also bribe, they call it "teasing west capital") local shop owner must pay tax, he gets bigger payment for ground hire (i don't know how it is in English, price you pay to town for land under shop), he has bigger prices, he bankrupt,

3 ) supermarket has no competition so he raise price cause people MUST eat, wear clothes and buy tires for cars

4) supermarket do not respect employee rights so people work for penny for 12 hours instead of 8

reason is simply - unfair "tax free" for west capital by our governments while our businesman must pay taxes , he is not free from tax for few years :/ it is crime against economy, releasing other country companies from taxes while our own must pay every cent cause they call it "actions to bring here west capital" i f*** such actions that someone do not have to pay tax oposite to me

100% true, I would also like to add to that:

Supermarkets buy huge quantities of low quality products from poor countries such as Romania, Moldova, and India etc... They buy the products for such low prices that Czech farms simply can’t sell them for because of the prices of fuel, machine parts, food etc... It’s not even feasible to import from neighbouring countries such as Poland or Slovakia. So a little corner shop has no were to buy goods from that he would be able to sell and get a profit from, therefore corners shops are forced to close.

Because in Eastern Europe there aren’t so many super cities like in America people from surrounding villages also travel to bigger towns to do shopping, and since as Vilas said Western companies bribe those lame government jackasses they get the best spots with all the transport links, so naturally people form villages will go shopping there were its most accessible, who will look for a corner shop somewhere God knows where when they have a giant shopping mall in front of them.

So as small close without the possibility of re-opening again because of the high taxes and prices big companies can raise prices how they like because people have to get food somehow, do you think that Western companies think about the customers? Hell no, all they think about is profit, profit, profit.

Also, you might find it interesting but high supermarket prices keep little shops form opening because people simply don’t have enough money to open them even if they wanted to. So this is a closed circle.

supermarket do not respect employee rights so people work for penny for 12 hours instead of 8

That’s also true, not many people want to work in these companies in my country, and if they do they run away after a few weeks. So companies bribe the government and bring in workers from Asia, Romania, and Moldova etc... These workers don’t pass any medical examination obviously so they bring in illnesses that were nonexistent during Socialist times.

So what has really changed in capitalism since the 18th century? Two things, it is now called “democracy†and the second, chains were replaced by money and mortgages.

The only reason why the West has low food prices is because it parasites on Eastern Europe and other countries while being able to get cheap goods from China.

Without China the situation in the West would be very different today, this is also the reason why there still is “communism†in China today, without China the West would collapse.

[vilas 474]

even Americans in topic about their politics say that their middle class has problems with competition from slave-work countries

we have the same problems, tomatoes from China, potatoes from China

my girl is from farmer family, they get EU limits for production (they cannot produce more than limit from EU says)! although they could

funny Poles were traveling to Germany to buy 1 kg of sugar!!! cause in Germany it was twice cheaper , can you imagine traveling to Germany to buy sugar, cause your country has LIMITS from EU on how much sugar you can produce, how many fish you can fish and how much milk your cow ?

about treatment of workers in Jeronimo Martins we had so much TV programs ... people were not payed and forced to work by shouting etc.

Edited June 16, 2011 by vilas

[-martin- 10]

funny Poles were traveling to Germany to buy 1 kg of sugar!!! cause in Germany it was twice cheaper , can you imagine traveling to Germany to buy sugar, cause your country has LIMITS from EU on how much sugar you can produce, how many fish you can fish and how much milk your cow ?

The EU imposed the same limit in the Czech Republic about the sugar etc... that we can produce. Czechoslovakia used to be one of the biggest producers of sugar, we exported thousands of tones to the Soviet Union, Poland, Yugoslavia and even to the West.

I have a cousin who has a little kid, he’s about 3 years old now and they actually drive to Germany to buy various food and kids stuff too like the Poles do as Vilas said, because its cheaper in Germany! I mean WTF, not that long ago Germans came to Cz to buy food and now it turned in the opposite direction.

EU sucks, the only thing good about it is the Shengen plan, that you can travel without your passport, everything else about it is bull crap.

[Innomadic 10]

I think the issue with the Euro and Germany is more about the fact that everyones incomes halved when moving from the Mark, yet prices stayed the same, doubling the cost of living overnight.

[st_dux 26]

but is it anti-capitalistic ? capitalism is private own of company , is it not? it is anti free-market i agree, we have no free market

Capitalism and the free market go hand-in-hand. Capitalism without a free market might as well be called feudalism.

This sort of thing -- the government using its power and monopoly on violence to provide help to particular private business interests -- happens in the United States, too, and whenever it happens, the economy (and thus, the people) suffers for it. However, the corruption isn't typically seen on the scale of something like total tax exemption.

The only reason why the West has low food prices is because it parasites on Eastern Europe and other countries while being able to get cheap goods from China.

While we do outsource a lot of basic manufacturing to China (because labor is so expensive over here), the United States grows pretty much all of its own food. We export a lot of food, too.

Without China the situation in the West would be very different today, this is also the reason why there still is “communism†in China today, without China the West would collapse.

This is especially true for my country, as the Chinese government has funded a large portion of our national debt. This is a really big problem, and I honestly have no idea how to solve it.

my girl is from farmer family, they get EU limits for production (they cannot produce more than limit from EU says)! although they could

funny Poles were traveling to Germany to buy 1 kg of sugar!!! cause in Germany it was twice cheaper , can you imagine traveling to Germany to buy sugar, cause your country has LIMITS from EU on how much sugar you can produce, how many fish you can fish and how much milk your cow ?

Ridiculous. This is more anti-capitalist nonsense. As you can see, government interference like this messes with prices and creates economic problems that wouldn't otherwise exist. It's no wonder the EU is having so many economic difficulties lately.

Edited June 16, 2011 by ST_Dux

[vilas 474]

Capitalism and the free market go hand-in-hand. Capitalism without a free market might as well be called feudalism.

than maybe we live in feudalism like XIX century, but instead of Nobles we have "west businesmen"