Chile to Nationalize Lithium Industry(reuters.com)
reuters.com
Chile to Nationalize Lithium Industry
https://www.reuters.com/markets/commodities/chiles-boric-announces-plan-nationalize-lithium-industry-2023-04-21/
253 comments
The point of this move is to move the country higher up in the processing and profit chain because right now they are not the ones processing the lithium or making the batteries. They are in a unique position and this absolutely is the best move for them. The biggest loser for this is China. Chile is aiming to eat their (EV) lunch.
I doubt that’s the move at all - I think they’re just trying to capture more of a share of the extraction revenues.
If you look at the history of the hydrocarbon industry during the 20th century, you saw the exact same trend over and over in countries without a history of private ownership of mineral resources. Exploration contracts were granted to foreign operators on favorable terms, and as the concessions were proved up (and petroleum gained geopolitical significance), those terms were slowly made less favorable to the operators, or the foreign operators were forced into local joint ventures, or their holdings were simply expropriated (or some combination of the above).
It looks to me like Chile thinks they have leverage and are beginning to turn the screws. If their reserves are sufficiently vast and economic, this might not appreciably affect the overall trajectory of the Chilean lithium industry for decades, if ever.
If you look at the history of the hydrocarbon industry during the 20th century, you saw the exact same trend over and over in countries without a history of private ownership of mineral resources. Exploration contracts were granted to foreign operators on favorable terms, and as the concessions were proved up (and petroleum gained geopolitical significance), those terms were slowly made less favorable to the operators, or the foreign operators were forced into local joint ventures, or their holdings were simply expropriated (or some combination of the above).
It looks to me like Chile thinks they have leverage and are beginning to turn the screws. If their reserves are sufficiently vast and economic, this might not appreciably affect the overall trajectory of the Chilean lithium industry for decades, if ever.
Honest question: What, if anything, does a country gain from nationalizing mining over just taxing it - besides scoring political points that is?
In other words, would an economist be able to point out any benefits?
In other words, would an economist be able to point out any benefits?
The gain is not having to share profits with a private company.
Another gain is more control over the investments the company makes. The profits can be reinvested in the country instead of in the neighboring country that just slashed their corporate tax.
Another gain is reduced foreign influence over a critical portion of the nations economy.
Of course there are also drawbacks. Reduced access to international knowhow and capital etc. It's a trade off.
Another gain is more control over the investments the company makes. The profits can be reinvested in the country instead of in the neighboring country that just slashed their corporate tax.
Another gain is reduced foreign influence over a critical portion of the nations economy.
Of course there are also drawbacks. Reduced access to international knowhow and capital etc. It's a trade off.
Your idea assumes the state will run it as efficiently as private businesses would. That sounds nice in theory but in the vast majority of cases isn't the reality of it.
I'm always intrigued/entertained/confused by this line of reasoning. What companies have you worked for that were highly efficient and made rational long-term strategic decisions?
I'm not saying a state entity would be inherently better (though a case could be made for the benefits of long-term thinking that are more built-in) but I'd like to see the evidence that corporate businesses are inherently better themselves.
I'm not saying a state entity would be inherently better (though a case could be made for the benefits of long-term thinking that are more built-in) but I'd like to see the evidence that corporate businesses are inherently better themselves.
Individual corporate entities have their own flaws but the competition between them is a structure that eventually forced inefficient entities out. So Intel eventually finds themselves overtaken by a TSMC. But with govt entities, no such structure exists.
I understand the argument, but it seems large companies are seldom, or never, overtaken by others. They entrench themselves by regulatory capture, advantages of economy os scale, and survive virtually indefinitely even in shrinking markets
If we don't count "missing the boat" (as happened regarding search/mobile/social media), which arguably happens because of disruption from the newcomers and not mismanagement/underperformance at the oldtimers, what large companies have failed in the last 20 years?
Core to this point is that mega companies are only at threat from disruption, and it doesn't matter whether they're private or state owned for that
(I am of course ignoring companies that go under from criminal, as in corruption, mismanagement. I guess those are much more prevalent between the state-owned, for obvious reasons)
If we don't count "missing the boat" (as happened regarding search/mobile/social media), which arguably happens because of disruption from the newcomers and not mismanagement/underperformance at the oldtimers, what large companies have failed in the last 20 years?
Core to this point is that mega companies are only at threat from disruption, and it doesn't matter whether they're private or state owned for that
(I am of course ignoring companies that go under from criminal, as in corruption, mismanagement. I guess those are much more prevalent between the state-owned, for obvious reasons)
The state can own the capital/resource and make multiple corporate entities compete (efficiently) as workers.
There's a shortage of key mineral reserves, but an abundance of corporate entities.
There's a shortage of key mineral reserves, but an abundance of corporate entities.
In capitalism, competition is on a higher level of abstraction than the employee’s (even the CEO)’s performance.
The entire company will go up or down according to output, even if due to external circumstances. Capital gets reallocated to better performing companies.
Examples: IBM, HP, Dell went from dominating to the doghouse; Microsoft made excellent strategic choices and remained relevant; Apple went from the doghouse to dominating, and so on.
This filters down to the employees. There is much more turnover and harder work (and higher pay) in private companies than at the government.
The entire company will go up or down according to output, even if due to external circumstances. Capital gets reallocated to better performing companies.
Examples: IBM, HP, Dell went from dominating to the doghouse; Microsoft made excellent strategic choices and remained relevant; Apple went from the doghouse to dominating, and so on.
This filters down to the employees. There is much more turnover and harder work (and higher pay) in private companies than at the government.
There’s a mixed track record. Saudi Aramco for instance became the largest oil operator generating lots of profit for its home country. Norway’s Statoil is another.
Wasn't Saudi Aramco a 50/50 arrangement with the private American company for most of it's history when it was developing the main oil fields? I believe the companies agreed to this because the Saudi's threatened to nationalize it completely.
The Norwegian one was a gov corporation from the beginning though and was there from the beginning of exploration/development.
There can also be a long-term benefit that post-nationalized orgs from their past state as private structures, living off the fat as they say. The existing talent/prior knowledge/industry relationships are still there, just with a new owner and more capital. Similar to NASA absorbing a well established and already highly productive private industry / university researcher pool, and merging them under one umbrella and then having a golden era of productivity before sliding back into a more normal public agency.
That sort of productivity naturally fades over time as the gov bureaucracy increasingly takes over and the natural constraints of politicized funding.
It helps if your business is a slow changing monopoly industry like oil/gas though.
The Norwegian one was a gov corporation from the beginning though and was there from the beginning of exploration/development.
There can also be a long-term benefit that post-nationalized orgs from their past state as private structures, living off the fat as they say. The existing talent/prior knowledge/industry relationships are still there, just with a new owner and more capital. Similar to NASA absorbing a well established and already highly productive private industry / university researcher pool, and merging them under one umbrella and then having a golden era of productivity before sliding back into a more normal public agency.
That sort of productivity naturally fades over time as the gov bureaucracy increasingly takes over and the natural constraints of politicized funding.
It helps if your business is a slow changing monopoly industry like oil/gas though.
And economic ideology is less important to that mixed track record than is generally believed, regardless of which camp people subscribe.
It doesn't have to be as efficient ... a hyper-efficient private business that shift most of it's profits to a tax haven (as they all do) provides less benefit to the country than a moderately efficient state enterprise that invests all the gains back into the country.
The point is for the country to take the role of "business owner", and to relegate the private businesses to the role of an "employee" (with a commensurately smaller slice of the upside) ... and if they don't like it, someone else will take their place ... after all the country has a guaranteed monopoly (they own the entire resource).
The point is for the country to take the role of "business owner", and to relegate the private businesses to the role of an "employee" (with a commensurately smaller slice of the upside) ... and if they don't like it, someone else will take their place ... after all the country has a guaranteed monopoly (they own the entire resource).
>in the vast majority of cases isn't the reality of it.
Extraordinarily claims require extraordinary evidence, of which none is provided. Public actors do not have, among many other negative characteristics, enshittification incentives. Greed is a malignant cancer that ruins human lives if left untreated.
Extraordinarily claims require extraordinary evidence, of which none is provided. Public actors do not have, among many other negative characteristics, enshittification incentives. Greed is a malignant cancer that ruins human lives if left untreated.
Capitalists are greedy for profits.
But bureaucrats are greedy for power.
But bureaucrats are greedy for power.
Biggest drawback is the government's complete inability to exploit said resources. Didn’t anybody learn Venezuela's lesson?!
Or Norway's? ... wait a minute.
I never seen Norway model successfully replicated anywhere else. Maybe it requires something else as well, like… Norwegians?!
Are you saying only Superior Nordic White People could possibly do things the right way? All those PoC are inherently corrupt or incapable of building functioning systems?
That sounds... racist.
That sounds... racist.
Some people have suggested that it was in fact an Iraqi that set them on the right path, after seeing it go wrong in his own country:
https://psmag.com/.amp/environment/iraqi-vikings-farouk-al-k...
> Norway’s anti–resource curse is often attributed to exceptionalism: Viking genes or the like. But one secret of its success—maybe the secret—is not Norwegian at all, but a twinkly 77-year-old Iraqi-born oil geologist named Farouk al Kasim.
https://psmag.com/.amp/environment/iraqi-vikings-farouk-al-k...
> Norway’s anti–resource curse is often attributed to exceptionalism: Viking genes or the like. But one secret of its success—maybe the secret—is not Norwegian at all, but a twinkly 77-year-old Iraqi-born oil geologist named Farouk al Kasim.
Did the “Norwegian” model work in Iraq first then? If not, why not?
It’s not race but it may be culture. Not what color Norwegians are, but what they do. Things like corruption, education, religion, ethics, customs and life/work habits all influence productivity. Also here in Europe at least there seems to be a correlation between latitude and country performance which could imply some climate influence as well.
Norway owns significant shares in Statoil but it is not nationalized. It's a public company listed on stock exchanges.
The government owns 67%, a controlling interest.
https://www.equinor.com/investors/our-shareholders
https://www.equinor.com/investors/our-shareholders
[deleted]
> The gain is not having to share profits with a private company
I'm asking about the Chile situation, not a 100% nationalized situation.
I'm asking about the Chile situation, not a 100% nationalized situation.
> The gain is not having to share profits with a private company.
Typically, it means the local warlord and his family get to pocket it.
Typically, it means the local warlord and his family get to pocket it.
Can you name one Chilean warlord, or are you uncritically regurgitating a meme about developing countries?
You get board seats for your political buddies. If company is privately owned you cannot simply appoint someone to a board to get nice salary.
So no socioeconomic benefits. And likely drawbacks in terms of reduced revenue. So I assume that the next government will dispense with this nonsense.
Too late. What investor will want Chile now? You make one peep about nationalization, and we all go stampeding the other direction. The whole place just went radioactive from capital’s perspective.
Chile also has a leftist president now with a strong desire to protect the environment and lithium mining can be very harmful to the environment. Obviously a big reason Lithium is valuable is for EV batteries. Managing these resources to prioritize the the health of the planet will probably look very different than prioritizing profits, so it makes a lot of sense for the government to step in.
As long as the most important health of the plant factor isn't maximizing extraction, which given the climate crisis it _could_ be. Kind of an interesting juxtaposition in general -- normally we think of them going hand in hand.
The Chilean government is under the delusion that mining firms will supply expertise and most of the capital in exchange for a minority stake under a government that’s already demonstrated its interest in nationalization. This is a terrible move for them, which is why Australian lithium miners saw their shares jump on the announcement.
Raising the royalties on the reserves, on the other hand, is something that could have actually worked.
Raising the royalties on the reserves, on the other hand, is something that could have actually worked.
Expertise and foreign capital? For pulling lithium out of the ground?
Sure, don’t nationalize your semi-conductor industry, but we’re talking about primitive mineral extraction for a very abundant and very in-demand commodity, and without the need for much exploration.
You know mining is like printing money but just darker and dustier, right? And I very much mean printing money. See: Dutch disease. A lack of a regulated economy and a free-for—all of resource extraction can lead to massive hangovers.
This is more in the ballpark of the machinations of the Federal Reserve than anything else.
The problems with Venezuela are not the problems with Norway. Norwegians are rich and can afford the time and energy to work within the practicalities of a mixed economy. Venezuelans are poor and seem more swayed by hope on big bets. It takes ample patience to throw out ideology and tease things apart for what they actually are. I don’t fault people in substandard conditions for being swayed by ideology, but for the rest of us can we be a bit more pragmatic?
Sure, don’t nationalize your semi-conductor industry, but we’re talking about primitive mineral extraction for a very abundant and very in-demand commodity, and without the need for much exploration.
You know mining is like printing money but just darker and dustier, right? And I very much mean printing money. See: Dutch disease. A lack of a regulated economy and a free-for—all of resource extraction can lead to massive hangovers.
This is more in the ballpark of the machinations of the Federal Reserve than anything else.
The problems with Venezuela are not the problems with Norway. Norwegians are rich and can afford the time and energy to work within the practicalities of a mixed economy. Venezuelans are poor and seem more swayed by hope on big bets. It takes ample patience to throw out ideology and tease things apart for what they actually are. I don’t fault people in substandard conditions for being swayed by ideology, but for the rest of us can we be a bit more pragmatic?
Sounds like what Indonesia is also doing: https://twitter.com/70sBachchan/status/1587125692294201347.
Here’s another guy talking about the same:
https://youtu.be/BHFpGIwwh7M
But they don't have the resources to build the infrastructure to extract it in a profitable way.
So likely what will happen is that China will do it and pay below market rate for the lithium.
I would not be surprised if the entire Boric fiasco is just Chinese infiltration.
So likely what will happen is that China will do it and pay below market rate for the lithium.
I would not be surprised if the entire Boric fiasco is just Chinese infiltration.
That's one outcome, but they may find lots of companies and governments are willing to invest at more favorable conditions; the US is a logical candidate as well.
Why would more companies/states be interested investing in Chile if Chile nationalizes and takes a bigger chunk of the profits than before?
They're probably hoping to emulate Norway + Statoil, which has made the Norwegian state extremely rich[1]. It didn't stop oil exploration in Norwegian waters, quite the opposite.
[1] https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feab...
[1] https://www.ft.com/content/99680a04-92a0-11de-b63b-00144feab...
Norway learned from other Iraq and avoided both the resource curse and Dutch disease:
https://psmag.com/environment/iraqi-vikings-farouk-al-kasim-...
Of course Norway has strong democratic institutions Iraq didn’t, but so did the Netherlands.
https://psmag.com/environment/iraqi-vikings-farouk-al-kasim-...
Of course Norway has strong democratic institutions Iraq didn’t, but so did the Netherlands.
They might end up emulating a petrodictatorship instead, because it's an open question whether they have the state capacity, institutions, and most importantly a populism-proof electorate to achieve what Norway has, instead of the default "resource curse" option most other oil-rich countries fell into.
Chile is actually a pretty well run country with a First World GDP. Yes, their economy is heavily based on natural resources but so is Australia or Canada.
Saudi Arabia on the other hand is fabulously corrupt but they were still able to take over their oil industry (Aramco) without problems and even go upmarket in petrochemicals with SABIC.
Saudi Arabia on the other hand is fabulously corrupt but they were still able to take over their oil industry (Aramco) without problems and even go upmarket in petrochemicals with SABIC.
It used to. Now it is another leftist enabled Supermarket Sweep season.
Its always a dictatorship when a global south country refuses to play extraction-ball that will need to be "liberated".
I'm rooting for them to remain democratic, just saying the resource curse[0] is not a concept made up by evil dastardly westerners to keep "global south" countries down. It seems to be the default path, sadly.
[0] https://en.wikipedia.org/wiki/Resource_curse
[0] https://en.wikipedia.org/wiki/Resource_curse
Why would you put a company in charge of a system controlled by nepotism and corruption?
For the same reason oil and gas companies still explore and agree to contracts with landowners for access to the underground minerals; it's still profitable after paying the owner of the mineral their cut.
Because it is still profitable. Chile is one of the most stable Latinamerican countries.
Was stable. Now it is the Monty Python Argument Clinic, constitutional version.
So was Venezuela.
In a world where Santa Claus exists, sure.
But in the real world, once you nationalize a company, it's a matter of time before it becomes a magnet for corrupt politicians.
The only world in which I would be OK with nationalization is where politician had shock collars connected to a nepotism/corruption detection AI. And where even false positives of such AI were OK.
But in the real world, once you nationalize a company, it's a matter of time before it becomes a magnet for corrupt politicians.
The only world in which I would be OK with nationalization is where politician had shock collars connected to a nepotism/corruption detection AI. And where even false positives of such AI were OK.
Stability and political counterweights.
Having a stable Chile as a source of resources to stack against other sources of resources may be worth the markup.
Having a stable Chile as a source of resources to stack against other sources of resources may be worth the markup.
> I would not be surprised if the entire Boric fiasco is just Chinese infiltration.
Large claims require citation. Got any?
Large claims require citation. Got any?
Installing state officials in South America is historically a US tactic, not a Chinese tactic.
It has been a Russian tactic as well before the fall of the Berlin wall. The presence of Russians in Brazil during the military regime (mid 1900s) is well documented in history.
How does "presence" translate to "installing state officials"?
Presence uses bribery to corrupt state officials.
It's a "wealthier nation" tactic going back to Spanish/Portuguese first contact. Fuck, it's called "Latin America" and I'm pretty sure Latin isn't native language.
Rich people love pillaging and raping resource laden countries in the global south, assuming history is any indicator.
Edited for spelling
Rich people love pillaging and raping resource laden countries in the global south, assuming history is any indicator.
Edited for spelling
"I'm pretty sure Latin isn't native language."
Latin isn't native language anywhere except Latium. English isn't native language anywhere except England (even excluding places like Cornwall that used to speak Celtic languages until the modern era). Arabic isn't native language anywhere except the Arabian peninsula. Heck, Quechua isn't native language anywhere but a very small region around Cuzco and was deliberately introduced by the Incas to make management of their huge, multiethnic empire easier.
I don't think that ancient imperial language policies in itself are particularly shameful. Possibly the opposite. You can pillage and rape people without even talking to them, but if you want to trade and develop deeper relations, mutual understanding is a must.
Latin isn't native language anywhere except Latium. English isn't native language anywhere except England (even excluding places like Cornwall that used to speak Celtic languages until the modern era). Arabic isn't native language anywhere except the Arabian peninsula. Heck, Quechua isn't native language anywhere but a very small region around Cuzco and was deliberately introduced by the Incas to make management of their huge, multiethnic empire easier.
I don't think that ancient imperial language policies in itself are particularly shameful. Possibly the opposite. You can pillage and rape people without even talking to them, but if you want to trade and develop deeper relations, mutual understanding is a must.
> English isn't native language anywhere except England (even excluding places like Cornwall that used to speak Celtic languages until the modern era)
I mean, if you really want to play the game, the Angles (along with the Saxons) aren't native to England (i.e. Angle-land); they were a germanic tribe.
Of course, old english is a pretty far cry from the modern incarnation of the language.
I mean, if you really want to play the game, the Angles (along with the Saxons) aren't native to England (i.e. Angle-land); they were a germanic tribe.
Of course, old english is a pretty far cry from the modern incarnation of the language.
China only installs clandestine police stations, infiltrates companies, telecommunications and creates social media apps that push dangerous challenges that leave people with disabilities.
What's the cutoff for the whataboutism? That's like 50+ years ago. Chinese have done the same thing and would do it even more if given the chance.
amrocha(6)
History seems to suggest otherwise:
2005: The leaders of La Concertacion, Chile’s center-left ruling government coalition, want to eliminate the private profits of the private bus system [1]. They sell the new system as a way to make public safer and cleaner [2].
2007: A consensus builds, and Santiago (Chile's capital) nationalizes urban transport network. It is a customer service disaster. Commuters wait at stops for 2 hours[2] as they see multiple buses drive by [1]. The 3000 bus companies get cut to 10, one of which (the public company) becomes the target of the largest class-action lawsuit in Chile, with thousands of commuters suing the new entity [2]. It is also a financial bomb, as the system goes from $60M in profits, to > $600M in losses[1], overnight, with 290M bailout after only 9 months [2]
2019: The "Estallido Social" (Social explosion) riots start, centered in santiago. The reason * Rise in public transport fares in Santiago * [3]
2021: A student leader and prominent figure in the 2019 riots [4], with a coalition of leftist groups and the communist youth of chile [4], is elected president. A new left government is now in power
[1] https://scholars.duke.edu/display/pub1127207
[2] https://www.npr.org/2007/10/08/15100976/in-chile-commuters-s...
[3] https://en.wikipedia.org/wiki/2019%E2%80%932021_Chilean_prot...
[4] https://en.wikipedia.org/wiki/Gabriel_Boric#Role_in_the_Esta...
2005: The leaders of La Concertacion, Chile’s center-left ruling government coalition, want to eliminate the private profits of the private bus system [1]. They sell the new system as a way to make public safer and cleaner [2].
2007: A consensus builds, and Santiago (Chile's capital) nationalizes urban transport network. It is a customer service disaster. Commuters wait at stops for 2 hours[2] as they see multiple buses drive by [1]. The 3000 bus companies get cut to 10, one of which (the public company) becomes the target of the largest class-action lawsuit in Chile, with thousands of commuters suing the new entity [2]. It is also a financial bomb, as the system goes from $60M in profits, to > $600M in losses[1], overnight, with 290M bailout after only 9 months [2]
2019: The "Estallido Social" (Social explosion) riots start, centered in santiago. The reason * Rise in public transport fares in Santiago * [3]
2021: A student leader and prominent figure in the 2019 riots [4], with a coalition of leftist groups and the communist youth of chile [4], is elected president. A new left government is now in power
[1] https://scholars.duke.edu/display/pub1127207
[2] https://www.npr.org/2007/10/08/15100976/in-chile-commuters-s...
[3] https://en.wikipedia.org/wiki/2019%E2%80%932021_Chilean_prot...
[4] https://en.wikipedia.org/wiki/Gabriel_Boric#Role_in_the_Esta...
Hopefully they’ve learned a lesson or two.
disingenuous and right wing biased sources. transportation and construction are the two major source of corruption in south America.
the govt tried to please the existing company owners and they of course undermined everything and came out better than before. (the "private" transportation business on south America runs 100% on subsidies, even though it's expensive for the users)
this is not an example against state ownership of a service cost center. but simply data that it can't be done by a centrist govt.
the govt tried to please the existing company owners and they of course undermined everything and came out better than before. (the "private" transportation business on south America runs 100% on subsidies, even though it's expensive for the users)
this is not an example against state ownership of a service cost center. but simply data that it can't be done by a centrist govt.
when (leftist)(authoritarian) governements suck to do business or non governmental activities (political interests clash with economic ones at least) some version of "kulaki" saboteurs are blame in politically convenient conspiracies. Horseshoe irony
> disingenuous and right wing biased sources.
NPR, duke.edu, and Wikipedia!? Those are left, lefter than left, and center-left.
NPR, duke.edu, and Wikipedia!? Those are left, lefter than left, and center-left.
If you scratch the surface of the article you will realise that the biggest loser is Chile. This draconian law, if anything, will make investing in lithium production unattractive, regardless where in the value chain one invests.
Until and unless we get better battery chemistries that are not reliant on LI, you're going to find someone who will work with Chile's requirements.
It's a suppliers market and Chile has decided to "eminent domain" their resources and remove private ownership from the game, as is their right.
Yesterday would have been the best time to do this, and now is the next best time. At some point battery chemistries will shift to Na or solid state will take the crown, but until then...
It's a suppliers market and Chile has decided to "eminent domain" their resources and remove private ownership from the game, as is their right.
Yesterday would have been the best time to do this, and now is the next best time. At some point battery chemistries will shift to Na or solid state will take the crown, but until then...
Chile is small producer
Biggest one in that region is Argentina, and the US has been sanctioning them a lot lately, to the point where their country reached 3 digit increased inflation, 3 digits!
So I suspect this is all done on purpose to further lower the price of lithium (corroborated with the lithium price in the global market, fishy fishy) so the US can have their green transition at lower cost, it's a sad era for South Americas yet again..
This nationalization is a step in the right direction, but that doesn't matter if it ends up in the hands of foreign countries for cheap...
They should keep the lithium for themselves, manufacture batteries themselves and sell them with very high margins, if they don't do that, then something is fishy in the Chile/Argentina government..
Biggest one in that region is Argentina, and the US has been sanctioning them a lot lately, to the point where their country reached 3 digit increased inflation, 3 digits!
So I suspect this is all done on purpose to further lower the price of lithium (corroborated with the lithium price in the global market, fishy fishy) so the US can have their green transition at lower cost, it's a sad era for South Americas yet again..
This nationalization is a step in the right direction, but that doesn't matter if it ends up in the hands of foreign countries for cheap...
They should keep the lithium for themselves, manufacture batteries themselves and sell them with very high margins, if they don't do that, then something is fishy in the Chile/Argentina government..
> Chile is small producer
Huh? Second largest producer with by far the largest reserves.
https://www.volkswagenag.com/en/news/stories/2020/03/lithium...
Huh? Second largest producer with by far the largest reserves.
https://www.volkswagenag.com/en/news/stories/2020/03/lithium...
That chart seems to significantly understate USA reserves. What I heard is that just two sites, Salton Sea and Thacker Pass, amount to more than 50 million tonnes of reserves, plus significant deposits elsewhere.
Thanks for correcting me, my memory failed me
What sanctions does the US have on Argentina?? Please don't tell me you don't know the difference between Argentina and Venezuela.
Yeah, I did a quick search and the only relevant results I could find are a sanction against a drug trafficking firm, sanctions related to the falklands war from the 1980s (that have long since lapsed) and a proposed bill (which probably won’t make it out of committee) requesting sanctions on just the president and her immediate family.
I'm from Argentina, I don't think the 3 digit inflation is due to any US sanctions :)
Here on HN, everthing is the fault of the USA.
Well, the US has a record history of doing shady things in South America, then you have things like this: https://www.csis.org/analysis/south-americas-lithium-triangl...
"opportunities"
"opportunities"
[deleted]
Obviously don't have the technology to manufacture the whole chain themselves or they would do that, right? That's why they need to partially auction stuff off to outsiders.
> Future lithium contracts would only be issued as public-private partnerships with state control, he said.
> The government would not terminate current contracts, but hoped companies would be open to state participation before they expire, he said, without naming Albemarle and SQM, the world's No.1 and No.2 lithium producers respectively.
This is very different from what I was expecting with the word "nationalize". Unless they're seizing property that isn't mentioned in the article.
> The government would not terminate current contracts, but hoped companies would be open to state participation before they expire, he said, without naming Albemarle and SQM, the world's No.1 and No.2 lithium producers respectively.
This is very different from what I was expecting with the word "nationalize". Unless they're seizing property that isn't mentioned in the article.
Nationalisation doesn’t necessarily involve expropriation; it can, but it’s not the only or even most common form it takes.
From what I have read the state will own 51% of new mines and levy special taxes on the profits. They won't be offering any capital to build the mines or refineries though. It will be interesting to see if there are any takers.
The mineral reserves are already public property as prescribed by the Chilean Constitution:
> The State has absolute, exclusive, inalienable and imprescriptible domain over all mines, including guano deposits, metalliferous sands, salt mines, coal and hydrocarbon deposits and the other fossil substances, with the exception of superficial clays, despite the ownership held by individuals or body corporates over the land in which the above should be contained. The superficial landed property shall be subject to the obligations and limitations prescribed for by law to facilitate exploration, exploitation and development of said mines.
What changes is that new mining concession will no longer be granted without accepting a majority stake from the state in exchange for the right to mine those deposits. The profit split might be different though, allowing firms to recover the capital.
> The State has absolute, exclusive, inalienable and imprescriptible domain over all mines, including guano deposits, metalliferous sands, salt mines, coal and hydrocarbon deposits and the other fossil substances, with the exception of superficial clays, despite the ownership held by individuals or body corporates over the land in which the above should be contained. The superficial landed property shall be subject to the obligations and limitations prescribed for by law to facilitate exploration, exploitation and development of said mines.
What changes is that new mining concession will no longer be granted without accepting a majority stake from the state in exchange for the right to mine those deposits. The profit split might be different though, allowing firms to recover the capital.
"SQM's contract is set to expire in 2030 and Albemarle's in 2043."
Worth noting!
badtake/This looks like the national electricity model in Quebec, where the public absorbs risk and the private part of the private-public partnership absorbs profits. Just the best!/badtake
Edit: looks like this is an outdated take - please diregard
Worth noting!
badtake/This looks like the national electricity model in Quebec, where the public absorbs risk and the private part of the private-public partnership absorbs profits. Just the best!/badtake
Edit: looks like this is an outdated take - please diregard
> This looks like the national electricity model in Quebec, where the public absorbs risk and the private part of the private-public partnership absorbs profits. Just the best!
I'm not super sure what you're referring to, Hydro Quebec's (often significant) profits are returned as dividends to the government. This year was $3.4 billion[0], and while I'm sure they have private contractors, but I can't imagine they're raking in anywhere near that.
0. https://globalnews.ca/news/9503363/hydro-quebec-record-finan...
I'm not super sure what you're referring to, Hydro Quebec's (often significant) profits are returned as dividends to the government. This year was $3.4 billion[0], and while I'm sure they have private contractors, but I can't imagine they're raking in anywhere near that.
0. https://globalnews.ca/news/9503363/hydro-quebec-record-finan...
I'll have to look into it - it seems a little odd that we keep raising electricity costs if we are racking in more profits than ever.
This is an old opinion that I haven't revisited in a couple years, thanks for the link
This is an old opinion that I haven't revisited in a couple years, thanks for the link
HQ sells it, basically, at-cost locally. The cost does go up, inflation and all that. The remainder that is exported above-cost is just profit for HQ, which is turned into further expansion and returns to the provincial budget. There are good economic reasons to not go further and start outright subsidizing the cost of electricity. it would just turn those export profits - which could be spent on anything - into things that use electricity locally, which is less general and exchangeable.
Thanks - just read a couple articles, and price increases at this time are because we are overproducing electricity until some contracts take effect with the US - I'm seeing that all the comments about it being a private-public partnership had to do with gas exploitation rights being sold to extranational companies.
The company is publicly owned - I was totally wrong and am very proud of HQ now!
Especially their work in battery research!
The company is publicly owned - I was totally wrong and am very proud of HQ now!
Especially their work in battery research!
[deleted]
To be fair to HQ most of the electricity is hydro so they are dependent on the hydrological cycle. Outsourcing those profits into a high quality economy (advanced manufacturing etc) with good jobs subsidized by cheap electricity actually has some merit to it.
However exporting those profits to neighboring states might not be as valuable unless they are looking for currency hedge + contracted power arrangements.
However exporting those profits to neighboring states might not be as valuable unless they are looking for currency hedge + contracted power arrangements.
Sure, but under that logic why supply power locally at all? They can just export all the electricity and use that money on anything. If the citizens need heat, they can just burn wood.
[deleted]
Well, since these will mostly be foreign companies partnering with the government, I imagine that it'll be a little closer to the Chinese model, but maybe with a bit less IP theft.
What's the private part of the Quebec model?
Hydro quebec is the national energy "company", which is nationalised, but they give contracts to other companies to run parts of their operations - this happenes through multiple deals by one of our past prime minister. At this point, Hydro-Quebec is only directly responsible for a portion of the hydro we create, while it has let natural gas, wind turbines and possibly more to private companies.
Edit: refer to my other comments, this is a bad take, hydro is not privately owned
It's hard to research even for a french speaker though - I think I might reasearch and write something on it just to clarify my own opinions
Edit: refer to my other comments, this is a bad take, hydro is not privately owned
It's hard to research even for a french speaker though - I think I might reasearch and write something on it just to clarify my own opinions
Hydro quebec pays a yearly dividend to its sole shareholder, the government of Quebec. For 2022 :
"In light of these results, Hydro-Québec will
be able to pay a dividend of $3,418 million to
the Québec government, its sole
shareholder—the largest in its history."
Source : https://www.hydroquebec.com/data/documents-donnees/pdf/annua...
Source : https://www.hydroquebec.com/data/documents-donnees/pdf/annua...
Future investors will be wary of the country - long run damage being done.
The thing about lithium is that it still isn't as big or valuable of a market as some headlines might make you believe. Chile exports, per the graph, about $900M worth of lithium per annum. For comparison, they also export about $33B worth of copper. And about $2B of wine. Pretty decent wine, I might add.
So it's not such a surprise that Chile is taking a very slow approach with this "nationalization". Mining doesn't usually grow at the speed of software. Plus, competition will arise. The quantity of known lithium resources globally doubled from 2014–21:
https://bibliotekanauki.pl/articles/2090756.pdf
To some extent, nationalizing lithium is as much a publicity stunt as it is an economic policy.
So it's not such a surprise that Chile is taking a very slow approach with this "nationalization". Mining doesn't usually grow at the speed of software. Plus, competition will arise. The quantity of known lithium resources globally doubled from 2014–21:
https://bibliotekanauki.pl/articles/2090756.pdf
To some extent, nationalizing lithium is as much a publicity stunt as it is an economic policy.
And don't forget that those $900M are based on a very high lithium price. It has dropped since and very likely will drop more.
What if they move up the value chain though, rather than simply exporting the lithium?
They are trying: https://www.reuters.com/business/autos-transportation/china-...
You’re talking about the lithium itself. Chile specifically is taking steps to go upstream to capture more of the value as well so that 0.9B number would be severely undercounting.
Chile would certainly benefit from having more battery manufacturing in its economy. They've recently joined the short list of countries where solar power is more than 10% of consumption — growing fast — and they still generate and consume much less total electricity than a typical developed country. This implies that they're going to end up with a very large solar fraction, and a need for stabilization.
But you can't just make a battery out of lithium. You also need graphite and either nickel or iron phosphate. And you need some fine chemicals (the electrolyte). The good news is that Chile does produce some iron and phosphorus. But I don't think they currently produce much in the way of graphite or organic chemicals. I'm not sure, either, if they can process their iron and phosphorus ore into battery-grade iron phosphate. So it's not just "refining lithium". Lithium carbonate of commerce is already pretty pure. This isn't petroleum we're talking about.
The danger is trying too hard to achieve autarky. The CPTPP (of which Chile is a member) at least in theory does have existing sources for those other components. But it seems like the Boric administration is skeptical of cooperation. Environmentalists are another potential barrier, since anything involving chemical engineering tends to get them riled up, justified or otherwise.
By the way, I think you mean "downstream" when you say "upstream". Mines are generally the proverbial headwaters.
But you can't just make a battery out of lithium. You also need graphite and either nickel or iron phosphate. And you need some fine chemicals (the electrolyte). The good news is that Chile does produce some iron and phosphorus. But I don't think they currently produce much in the way of graphite or organic chemicals. I'm not sure, either, if they can process their iron and phosphorus ore into battery-grade iron phosphate. So it's not just "refining lithium". Lithium carbonate of commerce is already pretty pure. This isn't petroleum we're talking about.
The danger is trying too hard to achieve autarky. The CPTPP (of which Chile is a member) at least in theory does have existing sources for those other components. But it seems like the Boric administration is skeptical of cooperation. Environmentalists are another potential barrier, since anything involving chemical engineering tends to get them riled up, justified or otherwise.
By the way, I think you mean "downstream" when you say "upstream". Mines are generally the proverbial headwaters.
The one time I visited Chile, the city air was thick with smoke from wood-burning fireplaces. At least at that point in the past, the total amount of electricity consumed would not accurately have reflected the total amount of energy consumed or its environmental impact.
Ah, I see you've been to the South
It's way too cost efective for the majority of people to consider anything else
It's way too cost efective for the majority of people to consider anything else
That's an interesting observation. I think it reinforces the point that the prevalence of solar on a near future Chilean grid could demand a lot of storage.
I was told it's because there's no way for the smog to escape the valley and get over the Andes. Very similar to Los Angeles.
This public-private partnership approach is likely weak enough to not significantly impact the profits of the multinational mining companies. Or Gabriel Boric is overconfidently playing his hand because a similar move in the past would get you dropped from a CIA helicopter over the ocean.
They haven't tried pushing Maduro out of a chopper. Although they put a bounty on his head and that didn't work.
They did try to oust him with a failed coup [1]
[1] https://en.wikipedia.org/wiki/Operation_Gideon_(2020)
[1] https://en.wikipedia.org/wiki/Operation_Gideon_(2020)
More details and background:
https://seekingalpha.com/article/4595845-chilean-lithium-nat...
https://seekingalpha.com/article/4595845-chilean-lithium-nat...
Good to see countries realize that if they just export raw materials and don't do any industrial processing locally, then they are mere colonies of a foreign power.
Even if the bigger part of the profits travels abroad, if the industrial knowledge stays in the country and also has a network effect on other industries and businesses, then it's a win on it's own.
Specially in this case where I doubt Chile even has the know-how and funds to explore the lithium on their own without foreign help.
Even if the bigger part of the profits travels abroad, if the industrial knowledge stays in the country and also has a network effect on other industries and businesses, then it's a win on it's own.
Specially in this case where I doubt Chile even has the know-how and funds to explore the lithium on their own without foreign help.
setting up a whole industrial value chain from mine to manufacturing & servicing is not guaranteed to succeed in any shape or form, "forcing it" has historically only been pet projects for the hegemons of the time, and a lot still failed, like Soviet computing industry and now (probably) the PRC chip manufacturing (sudsidized with at least like 120 billion$)
1. Good on them.
2. Too bad they let foreign companies exploit their natural riches so far. But of course - that was how world powers set up their colonies everywhere, and it's been mostly the same with neo-colonies (which are supposedly sovereign, but foreign companies and governments call most of the shots).
3. I just wish the export profits are distributed more fairly, effectively and reasonably (which, right now, I somewhat doubt).
4. Lithium alternatives for batteries are being actively worked on and there's a lot of potential in some of these. Here is a survey of 5 examples:
https://www.youtube.com/watch?v=n1TBAWlbXKI
2. Too bad they let foreign companies exploit their natural riches so far. But of course - that was how world powers set up their colonies everywhere, and it's been mostly the same with neo-colonies (which are supposedly sovereign, but foreign companies and governments call most of the shots).
3. I just wish the export profits are distributed more fairly, effectively and reasonably (which, right now, I somewhat doubt).
4. Lithium alternatives for batteries are being actively worked on and there's a lot of potential in some of these. Here is a survey of 5 examples:
https://www.youtube.com/watch?v=n1TBAWlbXKI
RIP Chile's lithium industry...
More like RIP Chilean democracy, as the US stages yet another coup, and installs yet another brutal far-right dictatorship that tortures, murders and disappears its citizens.
Chile still hasn't yet replaced the constitution drafted by the last US installed brutal far-right murderous dictatorship after the last time a US backed coup overthrew Chile's democracy. Many of the bodies of the disappeared have not yet been recovered. The mothers of the disappeared still gather to mourn their still missing children in neighboring Argentina where the US also overthrew their democracy and installed a brutal far-right murderous regime. The US hand in Central America was even more brutal-- even engaging in genocide.
And, RIP the many who will lose their lives fighting the US oligarchy installed coup government.
Sadly, realistically, the best case will be a repeat of what happened in Bolivia, where the US (Trump administration) staged a coup, against the most popular president in Bolivian history, and installed a brutal far-right government in an attempt to steal Bolivia's lithium. The US installed coup government fired live ammunition into protesters trying to regain their democracy and freedom. The Bolivians won their freedom back in only a few months, but there were many losses.
Chile still hasn't yet replaced the constitution drafted by the last US installed brutal far-right murderous dictatorship after the last time a US backed coup overthrew Chile's democracy. Many of the bodies of the disappeared have not yet been recovered. The mothers of the disappeared still gather to mourn their still missing children in neighboring Argentina where the US also overthrew their democracy and installed a brutal far-right murderous regime. The US hand in Central America was even more brutal-- even engaging in genocide.
And, RIP the many who will lose their lives fighting the US oligarchy installed coup government.
Sadly, realistically, the best case will be a repeat of what happened in Bolivia, where the US (Trump administration) staged a coup, against the most popular president in Bolivian history, and installed a brutal far-right government in an attempt to steal Bolivia's lithium. The US installed coup government fired live ammunition into protesters trying to regain their democracy and freedom. The Bolivians won their freedom back in only a few months, but there were many losses.
Anyone who doubts this should checkout what the Chicago Boys did during the military dictatorship that Chile went through last century.
Someone is gonna get coup'd
The US is too busy dealing about Ukraine/Russia and worrying about Taiwan/China to do a damn thing about it. China (#2 world power) has no foreign bases and prefers to economically control the countries through loans (economic coup - WMF/WorldBank style) - nationalized could still work for them but not as good terms.
Saying "coup" is like those extremist YouTubers who threaten defamation lawsuits when you leak their dirty deeds - all hat, no cattle.
The Monroe Doctrine is defunct now.
Saying "coup" is like those extremist YouTubers who threaten defamation lawsuits when you leak their dirty deeds - all hat, no cattle.
The Monroe Doctrine is defunct now.
This was news back at the end of April.
Why is it emerging only now on here is a bit of a mystery.
Probably related to the constitutional referendum over the weekend, which the Left lost spectacularly[1]. I do find it funny that AP calls President Boric "centre left".
---
[1] https://apnews.com/article/chile-constitution-kast-boric-ple...
---
[1] https://apnews.com/article/chile-constitution-kast-boric-ple...
At least the Left in Chile are trying to operate within the law this time around, very much unlike Allende.
Apparently there are lots of people who don't know there were two coups in Chile: first Allende's and then the counter "coup" (because Allende had already been legally deposed but refused to leave his post).
>"It poses a fresh challenge to electric vehicle (EV) manufacturers "
Why does it pose a challenge?
Why does it pose a challenge?
Excellent. Let's hope the US can't do what we did to Salvadore Allende.
If Chile aligns with us that would be great. You do know that if the CCP take defacto control there, they would control the system much more than you think the big bad Americans do. Look at the surveillance apparatus they help deploy in their "aligned" countries. It's never level stuff.
The US isn't perfect but its the best option towards a "rules based" order of the world.
The US isn't perfect but its the best option towards a "rules based" order of the world.
> The US isn't perfect but its the best option towards a "rules based" order of the world.
The world heartily disagrees.
The US has been seen as not just "not the best", but the biggest threat to global peace, stability, and democracy. For about 20 years now.
This isn't the place for ideological flame wars, so please take the above as an invitation to learn how America is actually viewed by the rest of the planet.
The world heartily disagrees.
The US has been seen as not just "not the best", but the biggest threat to global peace, stability, and democracy. For about 20 years now.
This isn't the place for ideological flame wars, so please take the above as an invitation to learn how America is actually viewed by the rest of the planet.
Amazing how you can speak for 8 billion people!
I know it's edgy to sit in a relatively safe country in the world and espouse about how bad the US is... but if you were to actually look at the facts of the past 70 years of general US hegemony (nearly 30 of true hegemony) -- most of the indicators are showing the longest periods of peace, economic growth, and lifespans in most of the world.
Look at the other 2 candidates -- Russia and China
Russia: invaded and annexed part of their neighbor. Brutal destruction of Chechnya. Support of NK with technology.
China: autocratic communist cabal. Essentially took Hong Kong by force. Threatening to invade and annex Taiwan by force.
The argument is clear, and it's also clear that your edgy "US bad!" stance is sophomoric at best.
I know it's edgy to sit in a relatively safe country in the world and espouse about how bad the US is... but if you were to actually look at the facts of the past 70 years of general US hegemony (nearly 30 of true hegemony) -- most of the indicators are showing the longest periods of peace, economic growth, and lifespans in most of the world.
Look at the other 2 candidates -- Russia and China
Russia: invaded and annexed part of their neighbor. Brutal destruction of Chechnya. Support of NK with technology.
China: autocratic communist cabal. Essentially took Hong Kong by force. Threatening to invade and annex Taiwan by force.
The argument is clear, and it's also clear that your edgy "US bad!" stance is sophomoric at best.
I'm talking about two decades of global polls, not my own opinion.
Well I don't think "global polls" really give much nuance to the discussion like I just tried to do
Well (1) I'm a socialist so I just disagree. (2) Why do people forget the Snowden leaks? We have the most sophisticated and globally pervasive system of hacking and surveillance ever devised.
(3) The world is asking for a "UN Based Order." A "rules based order" as described in US foreign policy journals just means "our rules, and we don't have to follow them."
(3) The world is asking for a "UN Based Order." A "rules based order" as described in US foreign policy journals just means "our rules, and we don't have to follow them."
Where are the in-depth leaks from China and Russia?
Are you naive enough to think that the CCP doesn't have a massive and complex surveillance apparatus? Do you expect the US to tie its hands behind its back when competing against the CCP?
All this kind of talk is from a position of not understanding or not accepting the reality of what's at stake. These countries are autocratic and they want control of the world.
The US with all its faults is the better path forward.
Are you naive enough to think that the CCP doesn't have a massive and complex surveillance apparatus? Do you expect the US to tie its hands behind its back when competing against the CCP?
All this kind of talk is from a position of not understanding or not accepting the reality of what's at stake. These countries are autocratic and they want control of the world.
The US with all its faults is the better path forward.
It's widely known that we're leagues ahead in cyber capability, just like the rest of (most of) our military technology. To pretend otherwise is sophomoric.
I'm sorry, I just don't agree with what you are saying. This discounts the economic and imperial interventions the US has made around the world. By contrast, China has not done any of that and Russia didn't until very recently, but even the Ukraine situation is more defensible in a sense than running halfway around the world to fuck with Iraq for lulz.
I'm sorry, I just don't agree with what you are saying. This discounts the economic and imperial interventions the US has made around the world. By contrast, China has not done any of that and Russia didn't until very recently, but even the Ukraine situation is more defensible in a sense than running halfway around the world to fuck with Iraq for lulz.
It's not "widely known" since that's not even true. China and Russia are very advanced these days. Even ahead in many regards, according to public information.
Russia (aka the Soviet Union) has done plenty of interventions since the start of the Cold War.
Thinking that Ukraine compares to Iraq is simply incorrect. I didn't support the Iraq War, but as you can see today -- the US's end state there was not control over the country, gov, or people. That's verifyable.
Russia has verifiably ANNEXED land and people, and its public goal is to destroy the democratically elected gov of Ukraine. Even in that regard, Saddam was a dictator.
It's actually pathetic to compare Russia in Ukraine to Iraq. I don't think even 1 Ukranian would agree with you.
Russia (aka the Soviet Union) has done plenty of interventions since the start of the Cold War.
Thinking that Ukraine compares to Iraq is simply incorrect. I didn't support the Iraq War, but as you can see today -- the US's end state there was not control over the country, gov, or people. That's verifyable.
Russia has verifiably ANNEXED land and people, and its public goal is to destroy the democratically elected gov of Ukraine. Even in that regard, Saddam was a dictator.
It's actually pathetic to compare Russia in Ukraine to Iraq. I don't think even 1 Ukranian would agree with you.
I think the people of Fallujah (still poisoned with depleted uranium) and the torture victims of Abu Garib would beg to differ with you.
When did I say the US has taken 100% perfect actions? Also Abu Ghraib wasn't anything close to a high level decision.
The fact that if you ask probably >85% of voting Americans if the Iraq War was a good decision -- they would say no. And they vote with that moving forward.
It's an imperfect system that is still the best available.
Yet you bring forth these US atrocities in war, while Saddam himself killed 10's of thousands of innocents with gas etc. Directed from the top.
That's the kind of stuff that would happen in a power vacuum where your autocrats take control.
The fact that if you ask probably >85% of voting Americans if the Iraq War was a good decision -- they would say no. And they vote with that moving forward.
It's an imperfect system that is still the best available.
Yet you bring forth these US atrocities in war, while Saddam himself killed 10's of thousands of innocents with gas etc. Directed from the top.
That's the kind of stuff that would happen in a power vacuum where your autocrats take control.
With this and Porsche's e-fuel plant they seem to be going places
To the Austrians out there: you can theorize and even model scenarios where this is not only a bad but a terrible idea but I would like to point out some empirically successful government institutions of managed resources in free parts of the world:
Fannie and Freddie, TVA, Statoil, just to name a few. These effectively manage limited resources, are profitable, and the windfall does not end up in private hands.
Yea, the commies accidentally created famines, but the root cause was their refusal to engage with anything other than their theories and model… which, should sound like the former issue raised with their economic counterparts…
Fannie and Freddie, TVA, Statoil, just to name a few. These effectively manage limited resources, are profitable, and the windfall does not end up in private hands.
Yea, the commies accidentally created famines, but the root cause was their refusal to engage with anything other than their theories and model… which, should sound like the former issue raised with their economic counterparts…
Moreover, it seems to me that with the amount of oversight needed to prevent the mines from laying waste to their surroundings and abusing their workers, and the anticipated bail-out when it goes bankrupt, the government might as well just run it.
I wouldn't hold up Fannie and Freddie as a model for anything.
A model for regulatory capture?
https://www.seattletimes.com/business/franklin-raines-to-pay...
https://www.seattletimes.com/business/franklin-raines-to-pay...
Why not? They’ve created an insane amount of private wealth in the US and are profitable. FHA loans have caused more good than harm.
For someone outside the US those names are only associated with the financial crisis. I don't even know what they are and honestly thought they were another Lehman brothers that didn't exist anymore, so your comment read like a joke.
Fannie Mae (FNMA) and Freddie Mac (FHLMC) are companies that the US federal government set up and sponsors in order to support the mortgage industry and provide liquidity to banks and other financial institutions that provide mortgages to Americans.
So if a bank offers a mortgage to a customer and the loan conforms with Fannie and Freddie's underwriting policies, Fannie and Freddie will buy it from them them. They then package some of those loans into a loan portfolio and sell it to fixed income investors.
About 70% of US mortgages are supported by Fannie and Freddie.
So if a bank offers a mortgage to a customer and the loan conforms with Fannie and Freddie's underwriting policies, Fannie and Freddie will buy it from them them. They then package some of those loans into a loan portfolio and sell it to fixed income investors.
About 70% of US mortgages are supported by Fannie and Freddie.
Unfortunately reality isn’t the point of these online exchanges.
If it makes you feel better, most American home owners have a loan that originated with one of them and still don’t know any more about them than you do.
> Yea, the commies accidentally created famines
I'd actually argue the stalinists created famines not by accident but at least partially by intent. Their economic modelling and planning were terrible, yes -- in part because of ideological blindness you mention. But the existence of the NEP for a short period of time in the 20s shows that at least some of the Bolsheviks were able to demonstrate more flexible thinking.
But they were also legitimately terrible, damaged, malevolent people who were the products of a nasty civil war. Starving their perceived enemies and brutalizing whole populations to do so was part of their MO.
I'd actually argue the stalinists created famines not by accident but at least partially by intent. Their economic modelling and planning were terrible, yes -- in part because of ideological blindness you mention. But the existence of the NEP for a short period of time in the 20s shows that at least some of the Bolsheviks were able to demonstrate more flexible thinking.
But they were also legitimately terrible, damaged, malevolent people who were the products of a nasty civil war. Starving their perceived enemies and brutalizing whole populations to do so was part of their MO.
I would say they were also a cause, not just a product of a nasty civil war.
Not the Tsarist monsters who sent waves of young men to be butchered in WWI?
Every country in WWI did that, no?
Anf while didn't say they were the only cause, they certainly didn't try to minimise casualties.
Anf while didn't say they were the only cause, they certainly didn't try to minimise casualties.
My point is that the first act the Bolsheviks did was to end Russian involvement in WWI and end that slaughter. (At the cost of massive loss of territory and reprisal from western powers.)
It ain't black and white.
It ain't black and white.
That's a good point. I thought the Russian civil war was already happening at that time, so it enabled everyone in Russia to focus on that one alone. Is that incorrect?
Civil war happened a bit later, but I guess it's blurry because it was also mixed up with the foreign invasion / punishments that came out of the Soviet withdrawal from the war and Brest-Litovsk. The allies were enraged by the withdrawal from the war, but of course also extremely interested in destroying the new Bolshevik regime. So right away after 1918 they were thrown into a conflict setting.
I'd have to defer to an actual historian here for the full details, but my understanding of the history is that the "whites" that the Bolsheviks fought in the civil war were funded and aided by foreign powers (Britain, etc.), and that that funding and intervention began the moment Brest-Litovsk was signed, but then later transitioned into the full civil war scenario.
Of course it all depends on how you draw definitional lines around civil war vs revolution, etc.
I'd have to defer to an actual historian here for the full details, but my understanding of the history is that the "whites" that the Bolsheviks fought in the civil war were funded and aided by foreign powers (Britain, etc.), and that that funding and intervention began the moment Brest-Litovsk was signed, but then later transitioned into the full civil war scenario.
Of course it all depends on how you draw definitional lines around civil war vs revolution, etc.
Good points all around! The same general problem of recovering from a brutal civil war seems core to Maoists as well!
Ideology and gunpowder make for a terrible brew.
Ideology and gunpowder make for a terrible brew.
The first half of the 20th century was a cruel time and engineered cruel people, of all ideological stripes. 50 years of living with the consequences of WWI.
Stalinists were trying to create economies of scale by centralizing agriculture to large conglomerates but weren't smart enough to avoid supply disruption that together with dry years, optimistic communication/lies and foreign export led to massive famines throughout the whole USSR.
One can see the same pattern in large corps where the front falls suddenly off.
One can see the same pattern in large corps where the front falls suddenly off.
But it was also bound up with ideological and ethnic campaigns against e.g. Ukrainian nationalists and the Ukrainian peasantry generally. Stalin was a big fan of collective punishment, repopulation, depopulation, etc. Sociopath. Resistance of aspects of the peasantry to collectivization, etc. became an excuse for brutal policies, independent of any theoretical "socialist" policy.
Remember Marx (and even Lenin) wrote nothing about e.g. agricultural policy or even what socialization of industry would look like in practice. So these people (Stalin and his apparatus) were making it up as they went along, and they were awful people.
e.g. Stalin came to power against Trotsky and the Left Opposition by insisting on maintaining the NEP and taking a more gradual and pragmatic approach and then turned around, exterminated his opponents, and did the precisely the opposite and forced mass collectivization (leading to mass starvation.)
Remember Marx (and even Lenin) wrote nothing about e.g. agricultural policy or even what socialization of industry would look like in practice. So these people (Stalin and his apparatus) were making it up as they went along, and they were awful people.
e.g. Stalin came to power against Trotsky and the Left Opposition by insisting on maintaining the NEP and taking a more gradual and pragmatic approach and then turned around, exterminated his opponents, and did the precisely the opposite and forced mass collectivization (leading to mass starvation.)
It's about macroeconomics, it doesn't mean that you can not have the state run anything at all. Austrian economists are not anarchists. For example I can point to successful schemes in Saudi or China and still see that on the grand scheme of things private markets are a lot more efficient. You're pointing to the exception as a criticism of the rule.
If they do it right this step makes a lot of sense for Chile. It doesn't negate the fact that socialist policies have economically ruined South America at large. Venezuela is the best example, it used to be the richest of them all not very long ago.
If they do it right this step makes a lot of sense for Chile. It doesn't negate the fact that socialist policies have economically ruined South America at large. Venezuela is the best example, it used to be the richest of them all not very long ago.
Not "socialist policies"
Populist dictators have ruined everything.
The problem is that the State exists to abuse the rights of the people
I don't understand how or why profits ending up on private hands is bad, you are a private hand and the State robs you all the time
I don't understand how or why profits ending up on private hands is bad, you are a private hand and the State robs you all the time
> The problem is that the State exists to abuse the rights of the people
The state exists for a multiplicity of reasons - some of which are harmful and some of which are beneficial.
And if the state doesn't exist then other actors will step in to and will also do a mixture of harm and good.
Any attempt to handwave away the nuance just sounds silly.
The state exists for a multiplicity of reasons - some of which are harmful and some of which are beneficial.
And if the state doesn't exist then other actors will step in to and will also do a mixture of harm and good.
Any attempt to handwave away the nuance just sounds silly.
The existance of the State is an infringement on your rights, any good that comes out of it isn't really an argument. It's akin as saying that killing all poor people would eradicate poverty, so it is harmful in some ways but it has some benefits
Other actors would also be States, we the people should fight against all States, not just the current one
Other actors would also be States, we the people should fight against all States, not just the current one
> The existance of the State is an infringement on your rights,
Which rights are these and by what authority are they bestowed? Let's assume I'm an athiest for the sake of argument.
You're positing the existence of natural rights without specifying how they came into being and how they are enforced.
Generally "rights" in the normal sense of the word are created by... well... states.
I'm not naive and I'm aware of the history of anarchist thought. But I'm not sure which flavour you're espousing.
Which rights are these and by what authority are they bestowed? Let's assume I'm an athiest for the sake of argument.
You're positing the existence of natural rights without specifying how they came into being and how they are enforced.
Generally "rights" in the normal sense of the word are created by... well... states.
I'm not naive and I'm aware of the history of anarchist thought. But I'm not sure which flavour you're espousing.
A right is not given to you by an authority. You are free to live your life, as long as you don't control/damage other people.
The State takes away your right to live your life and use your property, and empowers Corporations to make them richer at your cost. In the meantime, the State murders a lot of people.
Your rights must be enforced by yourself until free-market alternatives to the State are created
The State takes away your right to live your life and use your property, and empowers Corporations to make them richer at your cost. In the meantime, the State murders a lot of people.
Your rights must be enforced by yourself until free-market alternatives to the State are created
A "right" is entirely theoretical unless there is a way to ensure it is reflected in reality.
That, sadly, is why any analysis of "rights" is vacuous unless it is accompanied by an analysis of "power".
I wonder if you might be confusing "ought" for "is"?
That, sadly, is why any analysis of "rights" is vacuous unless it is accompanied by an analysis of "power".
I wonder if you might be confusing "ought" for "is"?
Because human rights are so well-protected in Afghanistan, Somalia or other such failed states. The alternative to a functioning state is not some techno-anarchist utopia, its warlordism and feudalism. Even the Taliban were seen as preferable to that (they got their initial political capital by rescuing boys kidnapped by warlords to be used as catamites).
The techno-anarchist utopia is neo-feudalism.
They just hope to be on top this time.
They just hope to be on top this time.
You should not convince people that your fantasies are mine
Please build your own roads then...
Just fyi, this is one of the biggest running jokes as a low effort, lazy rebuttal. I'm not saying that's you, just in general It's been refuted ad nauseam and there are mountains of answers to this just a duck duck go search away. Most ancaps/Austrians have spent significant time researching and learning, so the tolerance for low effort over confident retorts on forums is minimal. That's likely why you weren't given a serious answer.
Before people reply to this comment arguing with me about roads, it's worth stating that I'm not an ancap myself and do not believe everything including roads are better privatized.
Before people reply to this comment arguing with me about roads, it's worth stating that I'm not an ancap myself and do not believe everything including roads are better privatized.
Well this is obviously not a serious answer since the initial statement was:
"The problem is that the State exists to abuse the rights of the people"
Which, sure, that's like your opinion man (or you are talking about some North Korea'esque regime). But what can even be argued here?
Which, sure, that's like your opinion man (or you are talking about some North Korea'esque regime). But what can even be argued here?
Everything the State does robs you of your freedom and gives power to corporations, not in North Korea, in all countries
Please don't call market extremists Austrian. We, the people of Austria, want nothing to do with them and their philosophy is seen as crazy fringe theories here.
Point taken, although it's an extremely common/well known term here because it was Austrian economics (such as Mises) that formed the basis of it.
Can you suggest a better term? How would you feel about "Austrian Economics"? I once tried "Mises economics" but that caused a lot of confusion.
Can you suggest a better term? How would you feel about "Austrian Economics"? I once tried "Mises economics" but that caused a lot of confusion.
Economics in Austria are still strongly influenced by the legacy of Austromarxism [0] (the city of Vienna is the largest landlord in Europe) and, more recently, the Socialists under Bruno Kreisky [1], who built the modern welfare state.
Given this reality of economics in Austria, the term "Austrian Economics" also seems like a misnomer.
Maybe something like "Austrian Marginalism" would be clearer?
[0] https://en.wikipedia.org/wiki/Austromarxism [1] https://en.wikipedia.org/wiki/Bruno_Kreisky
Given this reality of economics in Austria, the term "Austrian Economics" also seems like a misnomer.
Maybe something like "Austrian Marginalism" would be clearer?
[0] https://en.wikipedia.org/wiki/Austromarxism [1] https://en.wikipedia.org/wiki/Bruno_Kreisky
Oh no, what a nightmare, if you want something done you have to pay for it
There is a lot of material to read on the denationalization of roads, it's not impossible by any means
There is a lot of material to read on the denationalization of roads, it's not impossible by any means
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If only those authors had channeled their fantasies into an art form other than economics, perhaps the world would be a more beautiful place.
At least the combination of ideology and internet connection is mainly psychologically destructive. It’s a step up from ideology and gunpowder’s uncanny ability to provide close-up views of friends bleeding to death.
Pragmatism might be defined as anti-ideological or it might be rooted in empiricism or actually it is quite the opposite of pragmatic to even wonder about such things.
We can talk, we can agree, we can use our physical and common senses, and we can do things together that are meaningful and make sense. We don’t really need the modernist requirement of axioms and their extrapolations.
Sure, rocketry benefits from models and empirical results and for a very simple reason: reproducing the results and proving to yourself that your ideas work through direct experience, the foundation of science itself.
The liberal arts are by necessity of a different epistemological foundation for a simple reason: we cannot currently model the entirety of our world in ways that are conducive to falsification. We get hints and generalizations. History is the foundation of these disciplines and trial-and-error across decades of lived experience the laboratory.
This necessarily adds a political dimension as everyone needs to be convinced to be willing participants in near planet-sized experiments.
For the most part people are satisfied with public roads and conservative with their approach to locomotion.
If it ain’t broke, don’t fix it. There we go, a workable definition of pragmatism pops out at the end.
At least the combination of ideology and internet connection is mainly psychologically destructive. It’s a step up from ideology and gunpowder’s uncanny ability to provide close-up views of friends bleeding to death.
Pragmatism might be defined as anti-ideological or it might be rooted in empiricism or actually it is quite the opposite of pragmatic to even wonder about such things.
We can talk, we can agree, we can use our physical and common senses, and we can do things together that are meaningful and make sense. We don’t really need the modernist requirement of axioms and their extrapolations.
Sure, rocketry benefits from models and empirical results and for a very simple reason: reproducing the results and proving to yourself that your ideas work through direct experience, the foundation of science itself.
The liberal arts are by necessity of a different epistemological foundation for a simple reason: we cannot currently model the entirety of our world in ways that are conducive to falsification. We get hints and generalizations. History is the foundation of these disciplines and trial-and-error across decades of lived experience the laboratory.
This necessarily adds a political dimension as everyone needs to be convinced to be willing participants in near planet-sized experiments.
For the most part people are satisfied with public roads and conservative with their approach to locomotion.
If it ain’t broke, don’t fix it. There we go, a workable definition of pragmatism pops out at the end.
You actually wrote a huge wall of text without addressing anything in my comments, and even managed to insult the intelligence of me and every anarchist in existence in the process, cool
I actually have NEVER heard of someone being satisfied with the roads or strees in their city/county/
The problem is that the State doesn't work, it continually murders tons of people every year, it continually suppresses peoples rights every day, and it continually robs everyone of us of a better world.
The fact that you are currently privileged enough to not feel the oppression, or not understand as oppression and just accept it as a fact of life, is good for you, but it is incredibly abhorrent to just dismiss what I say by saying absolutely nothing
I actually have NEVER heard of someone being satisfied with the roads or strees in their city/county/
The problem is that the State doesn't work, it continually murders tons of people every year, it continually suppresses peoples rights every day, and it continually robs everyone of us of a better world.
The fact that you are currently privileged enough to not feel the oppression, or not understand as oppression and just accept it as a fact of life, is good for you, but it is incredibly abhorrent to just dismiss what I say by saying absolutely nothing
I like my public roads and public transportation. Now you have heard of someone.
Actually (and ironically), Chile has a really interesting experiment in private toll roads. So it can be done.
Is there an in-depth article on the topic? I’m interesting in learning about this, but I haven’t had much luck with English language articles on Google.
I'm not an anti-government person or anarcho-capitalist, but in my third-world country (Nigeria), private roads are better built and maintained than government-funded roads. Private companies build their roads to standard because they actually want to please customers, while government-funded roads are given to substandard contractors at a low price and the rest of the funds are stolen...the government maintains a monopoly, so there's no other choice than to drive on the horrible roads they build.
But in this case, this is more a problem of corruption and incompetence than the existence of a government...just saying that "build your own roads" is not the absolute rebuttal you think it is.
But in this case, this is more a problem of corruption and incompetence than the existence of a government...just saying that "build your own roads" is not the absolute rebuttal you think it is.
Yes, this was not a serious answer to this.
I replied a stupid statement with an equally stupid statement.
Sure, you were being stupid only because you though my argument was stupid
Kind of...
I was being stupid, because there is no argument but a statement without any reasoning behind it.
I could say that the state that I live in provides free education, which is not something that necessarily robs my freedom and gives power to corporations.
So at least, it's not "everything" the state does, right?
Yes, the education system is hand made to make the students into good employees for the corporations
Not sure if you are trolling...
Do you have any references or something. Again, this is just a statement without any arguments or am I missing something?
https://en.wikipedia.org/wiki/Criticism_of_schooling has several sources if you want to read, specifically the first argument, of the school system as government control
But I didn't think I'd need sources, it's almost a meme how everyone thinks school is where your curiosity dies.
Everyone says we need schools, just not the ones we have, or the ones we had, or the ones we will have.
The school system is the monopoly of the government to say what is important for children to learn, mostly to obey authority
But I didn't think I'd need sources, it's almost a meme how everyone thinks school is where your curiosity dies.
Everyone says we need schools, just not the ones we have, or the ones we had, or the ones we will have.
The school system is the monopoly of the government to say what is important for children to learn, mostly to obey authority
Chile is the region they intend to scrape lithium from Mars... to rain down upon the Earth.
This is very good and every country should to the same with all their natural resources!
lithium is the new oil, so it's unsurprising to see the same nationalization trend that we saw with oil (which was a good thing)
Monopolies are bad unless the government is forcing one onto you.
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