The Free Markets vs. Government Regulation Ultimate Showdown Thread

[HmjG]

I find social issues to be of secondary importance, because ultimately people will do what they will, if they have the means, but without legal support and sanction. The economy is of primary importance because it provides you the means to your own survival and happiness...money. (It's true, money can't buy happiness, but it sure can buy you the opportunity to find it.) Economists on average agree that economies best thrive and expand when there is little government regulation. For the sake of my own survival and its dependence on money, I tend to vote for leaders and policies that are least interested in trying to stifle or control the economy, and most interested in allowing me the freedom to spend my own income (as I best see fit, not the government).

By my calculations,

More money = more freedom = more opportunities to find happiness = increased chance of finding happiness.

[Cimejes]

I don't agree at all. We've already seen what happens when there is little to no gov't regulation. It always ends with a few people prospering while the majority of people suffer.

And by the way. Money can buy you happiness.

[HmjG]

It's impossible for the government to regulate morality. People, if they have the guts, will be who they are, regardless of government sanction or social acceptability. I applaud those organizations that seek to expand personal freedom. Unfortunately, many of those same organizations that preach personal freedom have ulterior motives. They aren't just trying to expand their individual rights, they are seeking social acceptance. Social acceptance is not a right, it is a privilege. It can't be forced by government interference. Government was instituted to provide individuals the protection they need to enjoy their personal freedom, not force public acceptance. The government's job is to keep you from getting your ass kicked lynch mob style because you choose to be yourself.

[jesse]

Interesting that you think the economy is of secondary, or rather tertiary, importance. I find social issues to be of secondary importance, because ultimately people will do what they will, if they have the means, but without legal support and sanction.

When the logic of a market economy is put into action, this preludes the concept of efficiency and ease of change. Politics nearly universally requires people to run for office, office has to be created, then you have to promise everything between heaven and hell (read lie) to get the minimum number of votes to claim the post. On top of this, you'll eventually find yourself stuck in a number of bureaucratic committees where everything has to be systematically added into an agenda. Call me crazy but this takes time, resources, creates waste because you'll likely only have access to a limited pool of resources. If and when something gets decided, when a concensus is reached and you're ready to implement, you might be so out of touch with everything and have a plan which no longer reflects the current state of affairs.

Laws generally do not stop behaviors which are deemed inappropriate or undesirable in a society. It will only make a number of actions and even opinions against the law. Law enforcement is the big question here because they cannot control everything and everyone although they do try, let's not kid ourselves. Narcotics and the alcohol prohibition of the 1930s would be appropriate examples of this: narcotics are illegal (apart from those the pharmaceuticals pump out) yet the black market exists because there is a demand for them. Banning alcohol didn't go very well either did it? Sure you couldn't legally sell or produce, yet we still had speakeasies and organized crime reaping the benefits of the black market.

In short, where there is a will there is a way.

The economy is of primary importance because it provides you the means to your own survival and happiness...money. (It's true, money can't buy happiness, but it sure can buy you the opportunity to find it.) Economists on average agree that economies best thrive and expand when there is little government regulation. For the sake of my own survival and its dependence on money, I tend to vote for leaders and policies that are least interested in trying to stifle or control the economy, and most interested in allowing me the freedom to spend my own income (as I best see fit, not the government).

By my calculations,

More money = more freedom = more opportunities to find happiness = increased chance of finding happiness.

Little regulation and interference by government allow a market to create an equilibrium between supply and demand much quicker. Of course this means you have to have true competition for similar and niche items as this will create a cycle and alternatives for consumers. True competition also means business has to keep reinventing and innovating since they are dependent on the consumer and the markets to continue existing. Assuming there were minimal government regulation, badly managed companies would corrupt and bankrupt themselves and collapse under their own inertia. Minimal government means companies will not be bailed out when they screw up.

Economies like life itself are not static monoliths, they are dynamic and ever-changing even if the changes are subtle and not immediately obvious.

It is my view that when you pursue your own interests by actively participating in a market, either by consuming or supplying demand your actions will likely also benefit others. Image you had a business which starts out as a one-man operation and then grows rapidly. Unless you get employees to help you out, you'll be staring at the remains of a former enterprise fairly quickly, especially if you've got competition around. The salary you pay your employees gives them money to spend as they see fit, well after they've acquired food and other necessities from the income your business pays.

Especially after the great depression we seem adamant on having the self-defeating illusion of security and stability, hence we demand regulation and bureaucracy to make us "feel" better. These regulations which exist for stability probably will not be good on the long run.

[HmjG]

Cimejes,

People aren't entitled to prosperity. They have to earn it through creativity or hard work. It's not the government's job to provide everyone with prosperity. It's their job it to provide them with protection from those individual's that wish to deny them the opportunity to try for it.

And by the way. Money can buy me happiness as well, but I don't believe that's true for everyone. This is evidenced by the fact that not all impoverished individuals are miserable, and not all wealthy individuals are happy.

[lurk]

I don't agree at all. We've already seen what happens when there is little to no gov't regulation. It always ends with a few people prospering while the majority of people suffer.
As I look at history and the world around me through my particular set of blinders, I'm led to the conjecture that the majority of the wealth winds up in the hands a minority regardless of the form of government/economy.

[PunkinA]

No regulation leads to market failure. Either monopolies occur or contracts default or property rights get violated or all of the above. Free markets require some regulation or they collapse under natural forces.

Laws do not stop behavior deemed undesirable, but they do reduce the behavior. Legislation and law enforcement have effectively reduced the threat of privately owned tanks, cannon, and rocket launchers. If I really really really wanted a howitzer, I'm sure I could find a way to acquire one, but legislation has effectively raised the total price of getting one. Examples of alcohol and narcotics do not apply to all regulated goods. Drugs of any kind have addictive qualities which ensure at some level demand is not very responsive to price.

Also lurk is correct, wealth always pools into the hands of a minority.

My above statements explain how things are, not how they should be. They are factual claims and not opinions.

Claims about what people are entitled to, and what kind of economy is best are opinions. I cannot logically refute your claims in this area. I can't logically agree either. These claims reflect human feelings or articles of faith. I don't aim to cut off discussion about what values to pursue in a government-economy relationship. However, I do think it is important that we work from the same set of facts before we begin normative analysis.

[Causa Mortis]

Economists on average agree that economies best thrive and expand when there is little government regulation.

Simply not true. There are several key theories of growth and income, most of them neutral on the role of government, a handful would lead to generally anti-government conclusions, and a handful will lead to generally pro-interventionist conclusions.

(as I best see fit, not the government).

What is it about conservatives on this forum where they always have to capitalize ME or bold I whenever they're trying to make a point?

[pip]

What is it about conservatives on this forum where they always have to capitalize ME or bold I whenever they're trying to make a point?

They fear collective action.
They belive it will subsume them into its dark and unpleasant maw, and they will cease to exist individually.

Collective governance does not preclude individualism, nor is it incapable of offering the rewards which many people hold so dear.
It is just such a different perspective than we are used to as a society that we struggle to comprehend it entirely - or sometimes at all.

It also doesn't help at all that all previous attempts at creating such systems have been doomed from the outset by awful decisions made by awful people (who would have just as much of a mess under any other type of goverment I'd wager...) - thus the current 'bad image' such a way of thinking currently has.
Personally, I'd have thought such a subjective thing as image would not sway our denizens from rational analysis.
Apparently I am very, very wrong...

[jesse]

Simply not true. There are several key theories of growth and income, most of them neutral on the role of government, a handful would lead to generally anti-government conclusions, and a handful will lead to generally pro-interventionist conclusions.

So you're saying 10% want total governmental domination and central command on all matters pertaining to the economy, another 10% want no governmental control what-so-ever on the economy? Then supposedly the remainder is after neutral governance? Could you elaborate further on what you meant by that statement?

What is it about conservatives on this forum where they always have to capitalize ME or bold I whenever they're trying to make a point?

In an earlier post HmjG supported and even said to be an objectivist. It's very hard not to twitch when trying to couple this up with being a "conservative" notion.

[alrightgame]

In short, where there is a will there is a way.


Due to regulations on current societies, this has changed.
It is now "where there is a will and an opportunity, there is a way".

[Stickman]

Economists on average agree that economies best thrive and expand when there is little government regulation.

Austrian economists, yeah. Other economists, no.

Also the "average opinion of economists" have no meaning. It's like saying on average Americans have 1 testicle.

Capitalism will never be able to deal with ecological problems due to well analyzed situations referred to as the prisoner's dilemma and the tragedy of the commons.

[Causa Mortis]

Austrian economists, yeah. Other economists, no.

There are some very credible Austrians, and I personally hold a largely schumpetarian view of microeconomic competition and as a source of general macroeconomic growth, but the Austrian school also houses all the crazies in the discipline, and most of their macroeconomists push towards the gold standard (an idea that should have died with Friedman and Schwartz) or free banking (which is...fucking nuts).

...never be able to deal with ecological problems due to well analyzed situations referred to as the prisoner's dilemma and the tragedy of the commons.

I had a professor who insisted that the solution to pollution was to eliminate public property and make all property private. Then there would be no more tragedy of the commons and no more pollution. :rollseyes:





Causa Mortis added to this post, 2 minutes and 6 seconds later...


In an earlier post HmjG supported and even said to be an objectivist. It's very hard not to twitch when trying to couple this up with being a "conservative" notion.

I'm only familiar with a rough outline of Rand, and what I know doesn't inspire a great deal of interest.

Can you provide a brief explanation of why its necessary to emphasize ME or I in any discussion pertaining to economics under an objectivist framework? This ME argument just carries no weight because its just asserting blind egoism in the face of complex social issues where most people integrate egoism with a half a dozen other concerns. What am I missing?

[hubcap]

Can you provide a brief explanation of why its necessary to emphasize ME or I in any discussion pertaining to economics under an objectivist framework? This ME argument just carries no weight because its just asserting blind egoism in the face of complex social issues where most people integrate egoism with a half a dozen other concerns. What am I missing?

I think you're missing the part about people with a rational self-interest working in cooperation with other people doing the same is a good thing................as opposed to forcing someone to work on someone else's behalf not being a good thing.

[Ray9]

Can you provide a brief explanation of why its necessary to emphasize ME or I in any discussion pertaining to economics under an objectivist framework? This ME argument just carries no weight because its just asserting blind egoism in the face of complex social issues where most people integrate egoism with a half a dozen other concerns. What am I missing?

It's possible the the bold lettering of I was just for emphasis. Perhaps to signify independence of thought as opposed to the sheep-like, lockstep adherence to government expansion that characterizes so many here.

[Aronnax]

This statement:

It's impossible for the government to regulate morality.

Is contradicted by this one:

The government's job is to keep you from getting your ass kicked lynch mob style because you choose to be yourself.


Obviously I'm assuming lynch mobs are immoral.

[yoginimama]

I think you're missing the part about people with a rational self-interest working in cooperation with other people doing the same is a good thing................as opposed to forcing someone to work on someone else's behalf not being a good thing.

Yes, that is a lovely idea. PTAs work nicely that way, and condo associations.

Nations, however, are more complex.

Try to govern a country with a skeleton crew--a force sufficient to "to keep you from getting your ass kicked lynch mob style," as HmjG put it, and with no other mandate.

In five minutes, you will be swamped with chaos and de facto civil war. For one very simple reason: competing interests.

Let's take an example from American history. On the largely-lawless, extremely-minimally-governed western frontier, various groups quickly sprang up who had COMPETING INTERESTS.

See, some people were ranchers, who needed near-unlimited grazing room for their cattle and free-flowing streams for the cattle to drink from. And some people were homesteaders/farmers, who needed fences every-damn-where and water to irrigate their crops. What was good for the ranchers was bad for the farmers, and what was good for the farmers was bad for the ranchers.

And then there were the Native Americans, standing around going "Excuse me, but who the hell invited YOU people in here?" The ranchers *and* the farmers were *both* bad for the Native Americans.

And the Native Americans, with their entirely correct perspective that all these uninvited guests amounted to hostile invaders, were bad for both the ranchers and farmers, as they set about trying to drive the hostile invaders off their damn land.

So what do we do here? How can the ranchers cooperate to build Rancher Paradise when they keep finding their cattle twisted up in the fences of farmers, where they died trying to get to all the water the farmers were diverting? And how can the farmers cooperate to build Farmer Paradise when the ranchers keep cutting their fences and wrecking their irrigation set-ups, and cows keep trampling and eating their crops? How can the Native Americans keep following their life-ways with all these yahoos diverting rivers and letting cattle loose everywhere, and how can the ranchers and farmers get through the day with all those arrows being shot at them from cover? How can everyone's Objectivist fantasies be fulfilled when no one can even get started on anything because everyone's fighting over the same limited resources?

Hello, government.

One of the jobs of government is to FIND A BALANCE BETWEEN GROUPS WITH COMPETING INTERESTS. Labor versus management. Rancher versus farmer. Oil company versus solar start-up. Minority versus majority. Fundamentalist versus atheist. Governments are there to help these groups find ways to share the resources which they would otherwise fight over. Sometimes this is done in a more-or-less ideal manner, such as enforcing fairness. Sometimes, as in totalitarianism, it's done unequally and by force.

But one way or another, it gets done. The idea that we can just step back and let Individual Cooperation In Small Groups and The Invisible Hand of the Market create national nirvana is about up there with "the dictatorship of the proletariat" as far as realism is concerned.

Plus, as I've said before: We have pockets in American society where life is actually pretty Objectivist. Only these pockets look oddly different from Ayn Rand's glorious utopia. They're called ghettos. The strong--invariably young men--rise to the top by force, while everyone else hopes not to be exploited in too horrible a way (and also not to get hit by a stray bullet). As for the young men themselves, they generally die violently while still young (competition's a real bitch when the stakes are high), or go to prison for a long time.

#

Oh--and lest someone say "Private property can fix it, the ranchers can do what they want in the bounds of their property and the farmers can do what they want in the bounds of THEIR property and bada-bing, no more problem!"--I hope it would be obvious that the problem is that SOMETIMES WHAT PEOPLE DO ON THEIR PROPERTY HAS RAMIFICATIONS BEYOND THE PROPERTY ITSELF. Hence the need for a larger entity which represents EVERYONE concerned.

If such an entity is non-existent or ineffective, vigilante groups, gangs and mafias will spring up to fill the void, enforcing THEIR rules THEIR way for THEIR benefit whether anyone likes it or not.

[hubcap]

Hello, government.

I don't recall anyone suggesting the absence of government was a good thing.

[Stickman]

I had a professor who insisted that the solution to pollution was to eliminate public property and make all property private. Then there would be no more tragedy of the commons and no more pollution. :rollseyes:

In theory, I'd agree with him but try privatizing the ocean, or the atmosphere or even the rivers (anything you do upstream will effect those downstream). It would never work (well, based on your rolleyes you already know that).

The free market would ruin the environment. There's no doubt about it.

[phej]

So, the OP, I think was a question of the amount of regulation, yes?

Regulation is usually run by a regulatory body, like the FCC, FDA, USDA, etc. The typical story of these regulatory bodies is that they were formed because some "reformers" yell loudly enough about some market. In the case of the FDA, if I remember my U.S. history correctly, there was outrage from Upton Sinclair's The Jungle. Now, considering that the regulated businessmen have a strong desire for profit, eventually they will penetrate the regulatory body and add regulation to protect their business interests. Of course, as each new regulation is added, the regulators will be claiming that they are protecting Joe and Jane Consumer. Fundamentally, I really don't give a damn how much government there is, but it is special interest groups (e.g. environmental, labor, high-tech industries, steel, car, finance, etc.) that muck with things.

The modern day equivalent of regulation that is in debate is net neutrality. (found an interesting paper from Cato: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)

[Stickman]

SOMETIMES WHAT PEOPLE DO ON THEIR PROPERTY HAS RAMIFICATIONS BEYOND THE PROPERTY ITSELF.

Yeah, this is pretty much correct. This is why there are home-owner's associations and gated communities. In the absence of government a "government" will form representing the common interest of home-owners in this case.

In theory, there are mechanisms like pigouvian taxes that would correct market externalities but that counts as a government regulation. It is (in my opinion) the best way to regulate.

[yoginimama]

me: "Hello, government."

hc: "I don't recall anyone suggesting the absence of government was a good thing."

My bad. I wasn't clear. I should have said, "Hello, government *regulation.*"

[hubcap]

me: "Hello, government."

hc: "I don't recall anyone suggesting the absence of government was a good thing."

My bad. I wasn't clear. I should have said, "Hello, government *regulation.*"

What you did say was this:

One of the jobs of government is to FIND A BALANCE BETWEEN GROUPS WITH COMPETING INTERESTS. Labor versus management. Rancher versus farmer. Oil company versus solar start-up. Minority versus majority. Fundamentalist versus atheist. Governments are there to help these groups find ways to share the resources which they would otherwise fight over. Sometimes this is done in a more-or-less ideal manner, such as enforcing fairness. Sometimes, as in totalitarianism, it's done unequally and by force.

I fundamentally disagree with your opinion that this is the job of the government. The government of the United States was instituted to protect individual rights. A proper government's only legitimate responsibility is to protect the rights of the individual, by banning the initiation of force, thus making all relations between men peaceful, i.e., free from the threat of violence and fraud.

At least that's what the Founding Fathers believed.

I believe it too.

[Stickman]

I fundamentally disagree with your opinion that this is the job of the government. The government of the United States was instituted to protect individual rights. A proper government's only responsibility is to protect the rights of the individual, by banning the initiation of force, thus making all relations between men peaceful, i.e., free from the threat of violence and fraud.

At least that's what the Founding Fathers believed.

I believe it too.

What mechanism is there to protect public resources? If I owned property that has a stream flowing through it and upstream someone builds a polluting factory ruining my water and my crops, there's no law saying factories can't pollute (well, maybe there is, but that would fall into the category of environmental regulation). For this reason the stream can't be claimed in pieces. You either own all of it or none of it. If you owned part of it then you're susceptible to the actions of other owners of the stream. Because of the all-or-none nature of this stream it usually ends up under ownership of a single entity which is a monopoly on water which is an undesirable market failure.

Unless of course it was managed by the community but that's socialism.

[Krazy P]

Regarding happiness, there is quite a body of evidence to strongly suggest that money does not result in happiness.

The best correlation to self-reported happiness is satisfaction with one's occupation.

As far as individual freedom vs state control, I think the evidence is also clear. While there are costs to freedom, the costs of state control are far greater and end up in a lower standard of living for all concerned.

Follow the feet and follow the money. Where do people migrate to and how do people spend (invest) their money?

[jesse]

I had a professor who insisted that the solution to pollution was to eliminate public property and make all property private. Then there would be no more tragedy of the commons and no more pollution. :rollseyes:

Unless the proprietor of the land had a strong vision of what is ethical use of the resource, then it might be able to not be depleted in record time. Imagine a land owner who's land was mostly woodlands. The smart land owner will not log everything at once because then he or she will very quickly notice they've messed things up big time and cannot provide a resource they longer have on their lands.

Causa Mortis added to this post, 2 minutes and 6 seconds later...

I'm only familiar with a rough outline of Rand, and what I know doesn't inspire a great deal of interest.

Can you provide a brief explanation of why its necessary to emphasize ME or I in any discussion pertaining to economics under an objectivist framework? This ME argument just carries no weight because its just asserting blind egoism in the face of complex social issues where most people integrate egoism with a half a dozen other concerns. What am I missing?

You should be asking those who are self-proclaimed Objectivists. I cannot answer this on their behalf because I am not an Objectivist nor sufficiently well versed on its philosophies therefore it would be best to have an Objectivist pick up the tab.

The type of liberty I represent is based on Friedman, Hayek and Rothbard which seem to be well representative of libertarianism. You do not have the right to initate force or coerce someone into giving you what you want; self-owernship is the fundamental aspect along with voluntary exchanges and trade when both or more parties involved know they are benefitting from the exchange. You neither have the right to limit others in their self-ownership.

Essentially when you pursue your self-interest it is likely you'll need help from others in getting there which can indeed help them as well when they voluntarily cooperate with you, say in a employer-employee or alternative type of arrangement.

What I fail to see is the constant assumption that someone who is all for a very free market is always seen to be an unethical and horrendously selfish human being who will only abuse and rape and pillage everything.

[hubcap]

What mechanism is there to protect public resources? If I owned property that has a stream flowing through it and upstream someone builds a polluting factory ruining my water and my crops, there's no law saying factories can't pollute (well, maybe there is, but that would fall into the category of environmental regulation). For this reason the stream can't be claimed in pieces. You either own all of it or none of it. If you owned part of it then you're susceptible to the actions of other owners of the stream. Because of the all-or-none nature of this stream it usually ends up under ownership of a single entity which is a monopoly on water which is an undesirable market failure.

Unless of course it was managed by the community but that's socialism.
This is a legitimate question and I think there can be reasonable solutions to these issues without trampling on the personal property rights of individuals or coercing individuals to give up part of their wealth to the government so the government can give it to other individuals.

I have never suggested that we should have the absence of government.

[Stickman]

Unless the proprietor of the land had a strong vision of what is ethical use of the resource, then it might be able to not be depleted in record time. Imagine a land owner who's land was mostly woodlands. The smart land owner will not log everything at once because then he or she will very quickly notice they've messed things up big time and cannot provide a resource they longer have on their lands.


Corporations who own resources don't follow this behavior because the agents who make decisions are rewarded for short-term gains and chasing temporary gains in their stock value. Shareholders are also not really interested in preserving the long-term interests of the company or its resources because they're rewarded more by volatility rather than maintaining long-term value.

This is a free-market failure IMHO.

I have never suggested that we should have the absence of government.

Fair enough.

If you can come up with a solution that doesn't require a pigouvian tax or some law or regulation then let me know.

[hubcap]

Corporations who own resources don't follow this behavior because the agents who make decisions are rewarded for short-term gains and chasing temporary gains in their stock value. Shareholders are also not really interested in preserving the long-term interests of the company or its resources because they're rewarded more by volatility rather than maintaining long-term value.
Have you considered the paper and wood products corporations? They own vast tracts of timber land. What would happen if they went in clear cut all their land with no regard to the future? They would be out of business in a few years. Rather than do this they are good stewards of their resources. They manage the land well and re-plant new more efficient varieties of trees.

Fair enough.

If you can come up with a solution that doesn't require a pigouvian tax or some law or regulation then let me know.
Some issues in this arena are very clear cut. For instance - The XYZ Company has a manufacturing plant beside the river. They are outputting heavy metals and PCB's into the water. This is obviously not acceptable at any level and regulation should prevent this behavior.

Other issues are much less clear and require a more subtle approach. The unfortunate reality of these issues is that you have special interest groups, politicians, and businesses all attempting to gain the most advantage without any real regard for the truth. The entire Man-made Global Warming issue is a perfect example.

My opinion is that governmental restraint would be the best course of action in cases such as this.

[PunkinA]

Regarding happiness, there is quite a body of evidence to strongly suggest that money does not result in happiness.

The best correlation to self-reported happiness is satisfaction with one's occupation.

Actually a better correlation to self-reported happiness is a heartbeat. There are many things that have a heartbeat that do not self-report happiness but there are NO things without heartbeats report happiness. Perhaps more telling criteria is neural activity. The same one way arrow indicates the necessity of neural activity. I know I am being pedantic but I do have a point.

The domain of people with money, income, or fitting occupations implies that individuals have access to these things. This domain rests in a domain of animals with access to life essentials. If we believe Thomas Jefferson when he explains every human is entitled to the pursuit of happiness, and we also believe that it is governments role to provide this entitlement, then Government needs first provide access to essentials of life. (I know this is redundant because Jefferson also states that Life is the primary entitlement. I just like to emphasize that it gets double coverage.)

I don't mean to imply that government should provide food and shelter, or that government is responsible for providing happiness. Instead government need only provide 'access' and 'pursuit'. The unfortunate circumstance of a pure capitalist system is that the invisible hand eventually builds barriers that block access and pursuit for some.

Strict adherence to property rights in a Randian objectivism sense allows for (and actually guarantees at a large scale) the compromise of pursuit of happiness, not just happiness itself. Without adding chimeric language (such as the shifting meaning of opportunity and liberty) or subjectively declaring one value more important than the other, an unresolvable conflict of values will occur. This is where government comes in. Somehow a situation will arise to determine the outcome of this conflict. This is not the purpose of government, it is its origin. Government does not need a purpose, it just happens.

What I am saying is that government is inevitable. The effects of government are that someone is going to get compromised.

I find myself distrustful of anyone who ignores the nature of this compromise in their rhetoric.

[jesse]

Corporations who own resources don't follow this behavior because the agents who make decisions are rewarded for short-term gains and chasing temporary gains in their stock value. Shareholders are also not really interested in preserving the long-term interests of the company or its resources because they're rewarded more by volatility rather than maintaining long-term value.

This is a free-market failure IMHO.

Corporations are made up of people after all. If and when the decision is made that they possess the material which a market has a demand for and they blindly go through and chop everything down, they will be punished in the market by making themselves obsolete and bankrupt because they will be unable to provide if everything is mercilessly torn down without any thought.

It depends on how the company is organized. It will be a very different scenario when the owner(s) actually work the land themselves versus having a company which is owned by thousands of shareholders and which is listed on a stock market. Mindless depletion is fucking stupid in any case.

Yet again there is an assupmtion that every.single.shareholder belongs to the one-size-fits all model.

[Stickman]

Have you considered the paper and wood products corporations? They own vast tracts of timber land. What would happen if they went in clear cut all their land with no regard to the future? They would be out of business in a few years. Rather than do this they are good stewards of their resources. They manage the land well and re-plant new more efficient varieties of trees.

Well, there are 2 sides of the argument and I'll try to give a fair treatment for both.

Corporate executives are beholden to their shareholders who care only about the stock price which in turn is based on reported profits. Corporations have every incentive to "slash n' burn" in order to boost short term profits so shareholders can ride the wave of the market. If the CEO doesn't do this he gets sued for not maximizing profit. The only reason this doesn't happen is due to the EPA and several government forestry bills that undeniably exist.

On the other side of the argument, shareholders price the stock not only on profit but on the "natural capital" of a company. Burning this capital may increase profits today but would reduce its expected income tomorrow which would effect dividends and the stock price. In this scenario executive's and shareholder's incentives are properly aligned with that of nature.

Both arguments are valid but whether one is true or not depends on what level of sophistication you believe the majority of investors today operate at. Ultimately it comes down to opinion.

Other issues are much less clear and require a more subtle approach. The unfortunate reality of these issues is that you have special interest groups, politicians, and businesses all attempting to gain the most advantage without any real regard for the truth. The entire Man-made Global Warming issue is a perfect example.

Well, I think both the left and the right can agree that there are cases where government regulation is appropriate and other cases where it's not. You're completely correct that businesses and special interest lobbyist will muddy the conversation with propaganda, although we may disagree on which groups are genuine and which are lying.

I think Obama's ideas on removing ties between politicians and lobbyist were good but unfortunately it wasn't the first thing he decided to do when he stepped into office. Had he decided to 'root out corruption' before tackling health care and Guantanomo then the national discourse would have been far less poisonous then it is today.

[themuzicman]

The whole problem with the "evil government vs. evil business" is that they are run by the same flawed human beings desiring essentially the same kind of power, but trying to achieve it by different means. Ultimately, when their desires are achieved by corrupt means, the corrupt use them and win.

This is why both socialism and libertarianism fail: They give power entirely to one or the other.

Just as there is a balance of power between the branches of government, so there is a balance of power between government, business, and the people. This balance has been reasonably struck in the regulated free market/representative republican government balance the US has struck.

The issues in the US now lie in corruption between business and the government and the apathy of the people of the United States to really do anything about it.

[yoginimama]

The unfortunate circumstance of a pure capitalist system is that the invisible hand eventually builds barriers that block access and pursuit for some.

Strict adherence to property rights in a Randian objectivism sense allows for (and actually guarantees at a large scale) the compromise of pursuit of happiness...an unresolvable conflict of values will occur. This is where government comes in. Somehow a situation will arise to determine the outcome of this conflict. This is not the purpose of government, it is its origin. Government does not need a purpose, it just happens.

Yes. Exactly.

Furthermore, history has shown an overall pattern of ever-increasing centralization of power in ever-more-sophisticated and complex societies.

Societies which didn't develop as fast in this regard were crushed by the ones which did.

That alone ought to give pause to anyone who wants government to do nothing more than keep people from killing and defrauding each other. The most advanced nations on earth have had the most advanced, and involved, governments.

Mixed economies, with strong private *and* public sectors, seem to produce the best outcomes for their citizens--a high degree of freedom and security (which don't always have to be in conflict with each other).

[Causa Mortis]

I think you're missing the part about people with a rational self-interest working in cooperation with other people doing the same is a good thing................as opposed to forcing someone to work on someone else's behalf not being a good thing.

Sure its a good thing. Its also distributed in that manner because its the most efficient way to run a macroeconomy, not because you, wait YOU are entitled to all the gains from participating in a modern, highly complex economy.





Causa Mortis added to this post, 12 minutes and 5 seconds later...

Unless the proprietor of the land had a strong vision of what is ethical use of the resource, then it might be able to not be depleted in record time. Imagine a land owner who's land was mostly woodlands. The smart land owner will not log everything at once because then he or she will very quickly notice they've messed things up big time and cannot provide a resource they longer have on their lands.

I don't deny there's a touch of truth to his assertion, just that its totally impractical. Obviously if you retain ownership of a piece of property you retain an incentive to maintain it and ensure its used properly.


What I fail to see is the constant assumption that someone who is all for a very free market is always seen to be an unethical and horrendously selfish human being who will only abuse and rape and pillage everything.

I don't make that assumption, and appreciate the libertarian perspective provided it does not come from a position of blind egoism.

[hubcap]

Sure its a good thing. Its also distributed in that manner because its the most efficient way to run a macroeconomy, not because you, wait YOU are entitled to all the gains from participating in a modern, highly complex economy.

EVERYONE who lives in a modern, highly complex economy has these things available to them. What they do with that availability is up to them as individuals. Some choose to be doctors, some engineers, some drive school buses, some work in factories, and some choose to sell crack cocaine.

Everyone who participates in the modern, highly complex economy should be entitled to reap their individual benefits based on their choices. No person should feel entitled to reap the benefits of other people's personal wealth.

Individuals working together assume risk and bring products and services to the marketplace for consumption by others. The consumers of those products should expect to pay for the products with the fruits of their own labor.

[Causa Mortis]

EVERYONE who lives in a modern, highly complex economy has these things available to them. What they do with that availability is up to them as individuals. Some choose to be doctors, some engineers, some drive school buses, some work in factories, and some choose to sell crack cocaine.

Everyone who participates in the modern, highly complex economy should be entitled to reap their individual benefits based on their choices. No person should feel entitled to reap the benefits of other people's personal wealth.

Individuals working together assume risk and bring products and services to the marketplace for consumption by others. The consumers of those products should expect to pay for the products with the fruits of their own labor.

All your arguments come back to the topic of ego entitlement. This is tiresome, given that a) they're completely subjective b) we could go round-an-round for millenia.

[zibber]

More money = more freedom = more opportunities to find happiness = increased chance of finding happiness.

More people wanting to sell you stuff regardless of its use to you = marketeers that create markets, in other words figure out ways to sell people things they wouldn't buy on their own merit = people becoming accustomed and even addicted to consumption = people becoming accustomed to the notion of money as happiness = people striving to earn as much money as they can, money being the key to happiness = everyone retracting into their own little bubble of work and consumption = the commercialization/commodification of everything = NOW.

Also, social conventions and bla bla bla. I don't give all the credit to those pesky marketeers (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.).


This is why both socialism and libertarianism fail: They give power entirely to one or the other.

The idea of socialism is not that one or the other is given power entirely, and I'm embarrassed even to have to explain that. If I solely looked at history to define capitalism, disregarding all of its tenets, I'd figure that it was mostly about creating societies of people whose greatest concern in life is their appearance and who go around messing relatively normal people's countries up to turn a profit. You don't want people to do that, right?

[hubcap]

All your arguments come back to the topic of ego entitlement. This is tiresome, given that a) they're completely subjective b) we could go round-an-round for millenia.

I'm sorry you feel this way. I suppose the fact that there is no objective right or wrong in these matters necessarily means that it is a subjective issue.

I don't recall argueing FOR any entitlement other than to be left alone. I haven't laid claim to the fruits of anyone else's labor, nor asked anyone to provide me with things which I don't currently have.

These discussions are not unique to you and I. These same discussions were held by the Founding Fathers:

To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

There is no objective answer because it's all a matter of one's point of view. Do you favor bigger or smaller government?

[PunkinA]

I don't recall argueing FOR any entitlement other than to be left alone. I haven't laid claim to the fruits of anyone else's labor, nor asked anyone to provide me with things which I don't currently have.

This points to the heart of the difficulty. This is where most liberal minds and hearts begin to feel squeamish about your brand of ideals. Also your language disguises a contradiction. Desiring property rights and desiring to be left alone are two different things. Claiming things that you already have assumes that you already have established property rights under your terms.

The mere fact of your existence indicates that you are not alone. You are ultimately related to everything around you. Acknowledging your existence and acknowledging any claim you make comes at an opportunity cost to me. If I grant you a parcel of land, I cannot use that land. If I respect your claims that labor entitles you to the fruits of that land, I again sacrifice that land. Being left alone, and claiming entitlement to property by any means of merit are fundamentally separate entitlements.

I enjoy property don't get me wrong. I own a business and mine it for profit. I am eager to have the people around me respect my right to own the business and its fruits. I also recognize that individuals will only recognize and honor my claimed rights as long as they find benefit in the results of maintaining a property based system. My right is not inherent but created by the mutual will of all my fellow citizens.

For every physical piece of property you own, an externality is created that limits the opportunity for the rest of us. Using your labor to acquire and maintain what you consider your rightful property as earnings affects the 'leave-me-alone' right of every other Individual on the planet. What you do cannot help but affect all the other Me's.

Rhetorical language moves quickly to cover up this disparity. In fact it represents an embedded contradiction and no truthful argument can be made using these sentiments as premises.

[yoginimama]

EVERYONE who lives in a modern, highly complex economy has these things available to them. What they do with that availability is up to them as individuals. Some choose to be doctors, some engineers, some drive school buses, some work in factories, and some choose to sell crack cocaine.

Everyone who participates in the modern, highly complex economy should be entitled to reap their individual benefits based on their choices. No person should feel entitled to reap the benefits of other people's personal wealth.

Individuals working together assume risk and bring products and services to the marketplace for consumption by others. The consumers of those products should expect to pay for the products with the fruits of their own labor.

A modern, highly complex economy cannot function without a modern, highly complex government to go with it.

As for your second two grafs, I'm confused by what you're arguing.

People already do reap individual benefits based on their choices--*and* on circumstances beyond their control as well, such as the wealth of their family of origin, whether or not they have chronic diseases or a disability, etc.

People already do work together to assume risk and bring products and services to the marketplace. The consumers of those products already do expect to pay for the products with the fruits of their own labor.

So where's the problem?

So, in short, I'm confused. It sounds like you're saying you want to live in a modern society, but don't want to pay for it. Well, fine, but in that case, you can't have a modern society.

Or maybe you do want to pay for it, *except* welfare and health benefits. Is that what you mean? If so, then you're in favor of government regulation (at least of industry and finance), because you recognize the role it plays in maintaining a modern economy.

[hubcap]

This points to the heart of the difficulty. This is where most liberal minds and hearts begin to feel squeamish about your brand of ideals. Also your language disguises a contradiction. Desiring property rights and desiring to be left alone are two different things. Claiming things that you already have assumes that you already have established property rights under your terms.

In the system we live in the "right" to private property is already established. There is no need to debate some hypothetical situation wherein you are giving up something if I own property. No other individual or "society" has a legitimate claim to property that belongs to another person. So, if I have my private property and wish to be left alone there is no contradiction.

A modern, highly complex economy cannot function without a modern, highly complex government to go with it.
That is debateable.

So where's the problem?
The problem, as usual, lies in the different philosophies concerning government involvement in these matters.

So, in short, I'm confused. It sounds like you're saying you want to live in a modern society, but don't want to pay for it. Well, fine, but in that case, you can't have a modern society.
I am perfectly happy living in a modern society. It is a matter of degree and mechanism that determines whether I want to pay for it or not. I don't believe the folks in New Jersey should have to help pay for the modern society in Florida. I believe that local and state issues should be dealt at the local and state level. The federal government's role should be non-existent in those circumstances.

Or maybe you do want to pay for it, *except* welfare and health benefits. Is that what you mean? If so, then you're in favor of government regulation (at least of industry and finance), because you recognize the role it plays in maintaining a modern economy.
There is a long list of things I don't want to pay for. I have already acknowledged that some government regulation is necessary to address externalities.

The real question is how to practically apply the philosophical principles that one holds regarding government and society. I acknowledge some government is necessary. Our differences are based on "how much" government is desireable.

[Stickman]

For every physical piece of property you own, an externality is created that limits the opportunity for the rest of us. Using your labor to acquire and maintain what you consider your rightful property as earnings affects the 'leave-me-alone' right of every other Individual on the planet. What you do cannot help but affect all the other Me's.

I think you're abusing the definitions of externality and opportunity cost. You can't say that me sitting in my chair is impinging a negative externality on the rest of the world because no one else can sit on my chair while I'm on it.

[yoginimama]

That is debateable.

Is it? What makes you believe that a boutique federal government could run a Microsoft economy? What seems logical to you about that scenario?


I am perfectly happy living in a modern society. It is a matter of degree and mechanism that determines whether I want to pay for it or not. I don't believe the folks in New Jersey should have to help pay for the modern society in Florida. I believe that local and state issues should be dealt at the local and state level. The federal government's role should be non-existent in those circumstances.


There is a long list of things I don't want to pay for. I have already acknowledged that some government regulation is necessary to address externalities.

The real question is how to practically apply the philosophical principles that one holds regarding government and society. I acknowledge some government is necessary. Our differences are based on "how much" government is desireable.

If the federal government gives up a bunch of its functions, then to maintain "modern society," somebody is going to have to pick up the slack. That would mean state/local gov't and/or private industry.

To me, this would mean:

(a) a loss of efficiency as each separate entity has to start running pieces of what used to be a united system (national power grid, for example);

(b) a rise in state/local taxes greater than what the fed taxes used to be, as economies of scale are lost;

(c) a rise in consumer prices as privatized formerly-federal systems switch to a profit model;

(d) less disposable income for individuals; and thus

(e) less liberty and autonomy for individuals (according to your yardstick).

In other words...putting "limited government" into practice is almost certain to produce exactly the *opposite* of what the free market people seem to want, which is to keep more of their paycheck.

It would also result in the opposite of what the regulation people want, which is efficiency and more services.

A loss all around.

[HmjG]

Not a contradiction. Here's why. It is impossible for the government to regulate/control the ideals and morals of that mob, but they can attempt to regulate/control their behavior and actions. Behavior and actions are the results of ideals and morals. They are not the same thing.





HmjG added to this post, 120 minutes and 23 seconds later...

If I solely looked at history to define capitalism, disregarding all of its tenets, I'd figure that it was mostly about creating societies of people whose greatest concern in life is their appearance and who go around messing relatively normal people's countries up to turn a profit. You don't want people to do that, right?


There are so many amazing things that were created as a result of the free enterprise...cell phones, cars, computers, toilet paper (to name a few). Yet you want to focus on makeup, plastic surgery, and other appearance associated inventions. Obsession with appearance existed long before capitalism did. Creating a correlation between the two is ridiculous.

I wouldn't call helping to eliminate large scale poverty... "messing relatively normal people's countries up to turn a profit". The hostility towards capitalism and free enterprise in this thread is amazing, considering it encouraged the competition that helped to create that nifty computer on which you're typing.





HmjG added to this post, 256 minutes and 18 seconds later...

In theory, I'd agree with him but try privatizing the ocean, or the atmosphere or even the rivers (anything you do upstream will effect those downstream). It would never work (well, based on your rolleyes you already know that).

The free market would ruin the environment. There's no doubt about it.

Gosh, I guess public ownership is the perfect solution. This is surely evidenced by the fact no one ever drops trash in public parks or along public highways or on public beaches. If there was public ownership surely people would start caring about how their actions affect their fellow man.

Oh, don't forget, people are so inconsiderate of the appearance of their private residences. They never mow the lawn, or pick up the trash, or plant a tree. They never take care of it. Why would they? It's not like they're concerned with resale value or personal health considerations. (Do they have an emoticon that rolls its eyes?)

[phej]

If the federal government gives up a bunch of its functions, then to maintain "modern society," somebody is going to have to pick up the slack. That would mean state/local gov't and/or private industry.

To me, this would mean:

(a) a loss of efficiency as each separate entity has to start running pieces of what used to be a united system (national power grid, for example);

The power grid in the U.S. is not on a national scale. There are three grids (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) in the U.S: the east, the west, and Texas. Power generation and distribution is usually regulated on a per state basis. So, from this angle, I don't see any economies of national scale at risk. One could argue that the state of power distribution is bad, but I would tend to blame the some state governments for that: the rolling blackouts that California had/has is an example of mandatory price fixing that prevents suppliers from building new power generation.

(b) a rise in state/local taxes greater than what the fed taxes used to be, as economies of scale are lost;

Such as? in particular, which economies of scale?

(c) a rise in consumer prices as privatized formerly-federal systems switch to a profit model;

What's wrong with profit? Competition for profit drove down the price of textiles in the Industrial revolution. It's also driving down the price of semiconductors and cars which means that computers and cars get cheaper and cheaper. (Ok, that's a half-lie. The price of cars is relatively stable, it's just that a car that cost 20k today would cost more than a 20k car from a decade ago because of all the new features. Although, the Tata Nano (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) may be a good example of price deflation in cars.) The consumer wins.

In defense and NASA expenditures, the federal government will pay at cost or cost-plus (which doesn't encourage bureaucrats and defense contractors to drive down costs). The tax payers lose.

(d) less disposable income for individuals; and thus

Proof? Federal income tax rates have seesawed for over a century now. In the last year, the federal deficit has increased (from expenditures in the Bush and Obama administrations). That money will eventually need to be paid back. If the deficits get larger and larger, then more of federal revenues will be needed to service the debt or the government will inflate its way out of debt. Both of which reduce disposable income in the form of more taxation.

(e) less liberty and autonomy for individuals (according to your yardstick).

In other words...putting "limited government" into practice is almost certain to produce exactly the *opposite* of what the free market people seem to want, which is to keep more of their paycheck.

That's a fairly large leap to make.

It would also result in the opposite of what the regulation people want, which is efficiency and more services.

A loss all around.

Have you ever heard of the ICC (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)? It was a regulatory agency that regulated railroads and trucks. In reality, it was a government run cartel (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) that increased the price of transporting goods.

[hubcap]

Is it? What makes you believe that a boutique federal government could run a Microsoft economy? What seems logical to you about that scenario?
The federal government does not currently run the economy, so I'm not sure what your point is.

If the federal government gives up a bunch of its functions, then to maintain "modern society," somebody is going to have to pick up the slack. That would mean state/local gov't and/or private industry.
You are assuming that all the functions the federal government is currently performing are necessary.

I can see no basis in fact of the rest of your assertions which relegates it to the status of "hand waving".

[Stickman]

Gosh, I guess public ownership is the perfect solution. This is surely evidenced by the fact no one ever drops trash in public parks or along public highways or on public beaches. If there was public ownership surely people would start caring about how their actions affect their fellow man.

Oh, don't forget, people are so inconsiderate of the appearance of their private residences. They never mow the lawn, or pick up the trash, or plant a tree. They never take care of it. Why would they? It's not like they're concerned with resale value or personal health considerations. (Do they have an emoticon that rolls its eyes?)

Yeah, I said public property was good for some situations but not all. Thanks for strawmanning me; I really appreciate it.





Stickman added to this post, 8 minutes and 42 seconds later...

To be clear I was talking about instances where property can't be privatized like in the case of the atmosphere and the ocean. If privatization were feasible (like in the case of beaches and houses) then sure. Go hog wild.

[PunkinA]

I think you're abusing the definitions of externality and opportunity cost. You can't say that me sitting in my chair is impinging a negative externality on the rest of the world because no one else can sit on my chair while I'm on it.

Actually I have not abused the terms. I actually can say that about negative exernalities. Both opportunity cost and externality are subjective terms, left to be determined by the individual. The scope and scale of what is considered a good or a bad or even an opportunity falls under the perspective of the individual. What qualifies to me as an externality may run totally different to what you desire. Perhaps I like the smell of coal smoke in my neighborhood, and perhaps I don't care about cancer. Each of us consider what constitutes a good based upon our senses.

If you have taken property rights for granted, then you may also choose to ignore someone else's claim that they are prevented access to that property. Your assumptions have shaped your values. This is a mixed sense of values between individuals. Markets cannot resolve all value conflicts between individuals.

In any case, you seem willing to accept the idea of externalities. Even if we don't agree completely on what qualifies, how do you propose we define externalities, measure them objectively, and ensure that price actually reflects the amount of a 'good' supplied by a market? Currently the means for accomplishing this is through government and regulation.

In the system we live in the "right" to private property is already established.
Legally yes, there are laws that define property rights. The fact that laws are in place does not put finality to the debate. In the system we live in, the responsibility to redistribute income is already established. We challenge our laws because we find them unjust. You are choosing to challenge portions you disagree with, and that is great, but you also have to allow discussion for things that you find correct.


There is no need to debate some hypothetical situation wherein you are giving up something if I own property. No other individual or "society" has a legitimate claim to property that belongs to another person. So, if I have my private property and wish to be left alone there is no contradiction.

Legitimate means legal. That which is legitimate now gains its status through force and coercion. The fact that I control property now relies solely on the fact that I am aligned with the superior force that protects my property rights.

"No other individual has legitimate claim..." translates to "No other body has more force to uphold it's sense of property rights." The principles that define property rights are in no way superior philosophically or logically. Property rights base themselves upon assumed premises. The fact that property rights occur at all is but a testament of one group's will to apply (coerce) their assumptions upon everybody else, whether they agree or not.

Hubcap, I hear you complaining that taxing income enslaves the individual, but you ignore that property rights themselves only come into play by maintained force upon each other. Here's a secret, "All Government is illegitimate." Each government comes into place without laws. Government is the genesis of legitimacy. It is also true that any government will take away from humans the 'freedoms' wolves and antelopes and ants, but the laws that govern the natural kingdom are not typically considered legitimate.

So, if you wish to have private property (as protected by a government) and wish to be left alone (like a tiger in the wild) you are not arguing for the same thing, and in fact are asking for benefits that exclude each other.

[jesse]

More people wanting to sell you stuff regardless of its use to you = marketeers that create markets, in other words figure out ways to sell people things they wouldn't buy on their own merit = people becoming accustomed and even addicted to consumption = people becoming accustomed to the notion of money as happiness = people striving to earn as much money as they can, money being the key to happiness = everyone retracting into their own little bubble of work and consumption = the commercialization/commodification of everything = NOW.

Also, social conventions and bla bla bla. I don't give all the credit to those pesky marketeers (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.).

Addiction means a person is unable to draw the line and to determine when enough is enough on their own. How would this be any different under a socialist system? When those who seem themselves as poor see someone who they consider as rich have something they want, they'll go directly to the government to demand it for nothing or with hefty subsidies because that would be equality and fairness. They want it NOW and they want it for FREE.

The idea of socialism is not that one or the other is given power entirely, and I'm embarrassed even to have to explain that. If I solely looked at history to define capitalism, disregarding all of its tenets, I'd figure that it was mostly about creating societies of people whose greatest concern in life is their appearance and who go around messing relatively normal people's countries up to turn a profit. You don't want people to do that, right?

Quite a utopian expectation of socialism.
There have always been and there will always be people obsessed with vanity and their appearance, this is not some brand spakin' new phenomenon directly inspired by capitalism and market economies.

The examples you highlight are imperialism and they completely depend upon forced coercion and they only masquerade as representing capitalism.

[Stickman]

Actually I have not abused the terms. I actually can say that about negative exernalities. Both opportunity cost and externality are subjective terms, left to be determined by the individual. The scope and scale of what is considered a good or a bad or even an opportunity falls under the perspective of the individual. What qualifies to me as an externality may run totally different to what you desire. Perhaps I like the smell of coal smoke in my neighborhood, and perhaps I don't care about cancer. Each of us consider what constitutes a good based upon our senses.

If you have taken property rights for granted, then you may also choose to ignore someone else's claim that they are prevented access to that property. Your assumptions have shaped your values. This is a mixed sense of values between individuals. Markets cannot resolve all value conflicts between individuals.

In any case, you seem willing to accept the idea of externalities. Even if we don't agree completely on what qualifies, how do you propose we define externalities, measure them objectively, and ensure that price actually reflects the amount of a 'good' supplied by a market? Currently the means for accomplishing this is through government and regulation.


I agree that it's subjective but it's no less abusive. You're basically saying that the very act of ownership causes suffering which for some neurotic people might be true but it's not true universally.

I agree externalities (negative and positive) exist, and reparations should be made through a pigouvian tax or regulation (I do have an economics degree) but I can't say that private property rights has negative externalities for everyone.

In order for something to be classified as a negative externality then everyone has to agree that it's a bad thing. Polluted air and water is universally bad so pollution is a negative externality. If someone disagrees (and someone might to abuse the definition of externalities like you have) then we can feed them dirty air and water and see how sincere they are.

[phej]

To be clear I was talking about instances where property can't be privatized like in the case of the atmosphere and the ocean. If privatization were feasible (like in the case of beaches and houses) then sure. Go hog wild.

What about individual fishing quotas (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)?

[PunkinA]

I agree that it's subjective but it's no less abusive. You're basically saying that the very act of ownership causes suffering which for some neurotic people might be true but it's not true universally.

If we would like to speak of 'true universally' then terms like abusive, suffering, and neurotic must be left aside. These each reflect your own value judgments. Claims about suffering are not true, universally, but then also claims about the desirablility of property rights are not universal. Prioritizing your stance and then labeling others neurotic does not reflect an appeal to truth. That's just name calling. Should I return with "I am rubber and you are glue..."


I agree externalities (negative and positive) exist, and reparations should be made through a pigouvian tax or regulation (I do have an economics degree) but I can't say that private property rights has negative externalities for everyone.

I see you have italicized everyone. Perhaps you have a valid argument on scope. Much like auto emissions affect everyone, so do property rights, but currently the majority of Americans gain a whole lot more from access to cars than suffer from emissions. In a utilitarian sense, property rights and access to cars produce more happiness than they take away. The truth of the matter is that both benefits incur some suffering on the perspective of the individual. It is untruthful to deny suffering.

Economists developed a terminology to best describe their study. When I use the word externality, I use it in a way not expected by economists, but still fitting to the definition. It's an unintended consequence of the terms as defined, not an abuse.


In order for something to be classified as a negative externality then everyone has to agree that it's a bad thing. Polluted air and water is universally bad so pollution is a negative externality. If someone disagrees (and someone might to abuse the definition of externalities like you have) then we can feed them dirty air and water and see how sincere they are.

In order for something to be classified as a negative externality, only the classifying body must have consensus that it is a bad thing. When a government declares an externality, not everybody has to agree. There also may exist actual externalities that aren't legislated, thus governments are not the only deciding factor. As far as requiring everyone to agree, given any population large enough, 100% consensus is impossible. That being the case, no actual externalities would exist. The only way to guarantee complete agreement on an externality (positive or negative) the classifying body would need to de-select dissenters.

You offer two ways of mainting your selective majority. First you re-label any disagreeing minority as neurotic, then you propose forcing poison on others. Don't those approaches conflict with the standard assumptions of property rights?

[Stickman]

What about individual fishing quotas (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.)?

Yep, this both privatizes fish and imposes government regulation. Assuming that the total quota imposed is at an appropriate level then I'd be fine with this.

I suppose there's a false dichotomy between 'privitization' and 'regulation'. Indeed, in this case privatization would not exist without government regulation stepping in. I'll admit that it wasn't entirely clear to me until you pointed this out.

You offer two ways of mainting your selective majority. First you re-label any disagreeing minority as neurotic, then you propose forcing poison on others. Don't those approaches conflict with the standard assumptions of property rights?

If the term 'neurotic' offends you then I apologize and I regret using it because it's detracting from the argument. You can pretend I didn't use it, and the argument would stand without it. My point is that the very act of ownership doesn't make anyone else suffer unless that person is literally jealous by my wealth. That's the definition of jealousy and I can't really think of a nicer word for it, sorry. If you can think of a nicer word that doesn't offend you then pretend I used that.

I'm not proposing that we force poison on those who don't agree with me, I'm just demonstrating (through a hypothetical situation) why pollution is a negative externality and private property is not. Everyone suffers to some extent from pollution but not everyone will admit it. If I had to deal with 100% of the pollution I create then I surly wouldn't pollute as much so why should others have to suffer from the pollution I create? You can't say the same thing about private property.

In a utilitarian sense, property rights and access to cars produce more happiness than they take away.

After you prove that a negative externality exists, economists wouldn't propose that we ban that activity. It's better to tax it to provide a disincentive for hurting others and use that revenue as reparations (in the case of car pollution you could impose a gas tax and use it to subsidize asthma treatment or lung disease).

[yoginimama]

What's wrong with profit?

When we're talking about essential services like water, a lot is wrong with it. Latin America has been a testing ground for the privatization of water, with generally negative results:

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Sixth paragraph:

"After years of structural adjustment imposed by the World Bank and International Monetary Fund, as a region, Latin America has the most inequitable income distribution in the world. Mirroring this is a pattern of tremendously unequal access to water. More than 130 million people have no safe drinking water in their homes..."

Enter the private water companies, eager to do (for a profit) what the governments have not done or no longer wish to do. How has it turned out? Well....here's paragraph fourteen:

"Arguably, the best-known reaction to water privatization occurred in Cochabamba, Bolivia when the engineering giant Bechtel set up its subsidiary, Aguas del Tunari, in early 2000 and immediately raised the price of water beyond the reach of the vast majority of the population. Its contract even gave the company the right to charge people for the water they took from their own wells and to send collection agents to homes to charge for rainwater collected in cisterns on roofs. Consumers were hit with up to 200% rate increases as the company planned for annual profits of $58 million.8 Public protests forced the government to reverse this privatization effort, but Bechtel is now suing Bolivia for $25 million in lost profits."

I don't think anyone would argue that a 200% rate hike for any commodity is in the consumer's best interest.

This is how it's worked out in Latin America--privatization of water has not saved consumers money, but cost them. I know that, in theory, there should have been fifty private water companies in there bidding lower and lower and lower, thereby creating a consumer paradise. But that's not how it worked out in practice. That makes me wary of "free markets" and privatization and deregulation.

[PunkinA]

Stickman, I see partly what you mean by property not creating an externality.

As far as the jealousy issue goes, I mean more than that. I point out that your claim to property, and any physical enforcement of that claim, creates a limit to my action and opportunity. I make no moral judgment here, but recognizing your claim limits my access to your property. That is a real limit, not just a limit that I feel. An opportunity has been forgone by me, regardless of my choice. You may argue that once you legitimately claim property, it no longer exists as a real opportunity, and I am deceiving myself by thinking of it as a forgone opportunity. Definitions of jealousy even presume this attitude of property as defined. I would argue that without presuming my acceptance of property rights, the opportunity is no less real. We begin cycling around a chicken and egg conundrum.

Here is where I begin to agree with you, in that property ownership does not create an externality for everyone. Instead the owner of an article does not experience the lack of opportunity felt by everyone else. In that way it may be exempt from the technical term 'externality'. This just shifts semantics though. An action that causes everyone else a negative but the user still presents a market failure.

I also agree that banning property rights, or abolishing the notion, would be the best suggestion. I enjoy owning property. I only present the argument to show that governments that enforce property rights may act consistently by taxing property rights, not only for the cost of enforcement, but as well as for the effect they have on all citizens.

I also think the U.S. does that right now, so my argument only goes to maintain things as they are as opposed to creating new taxes.

[Aronnax]

One could argue that the state of power distribution is bad, but I would tend to blame the some state governments for that: the rolling blackouts that California had/has is an example of mandatory price fixing that prevents suppliers from building new power generation.


That's incorrect.

The huge chain of blackout California experienced a few years back was a result of deregulation and induced artificially, primarily by Enron and Reliant Energy. Legislation was passed that forced public utility providers (regulated entities) to sell a portion of their electrical capacity to unregulated companies. The idea was these unregulated companies would compete and everyone would reap the benefits.

Instead the companies that bought these assets would buy regulated power from the public utilities and sell it out of state inducing artificial scarcity. The price per kw/hr would go up and the unregulated providers (the same guys who bought the power in the first place) would then sell electricity back to California at an inflated rate. The rolling blackouts occurred when Enron et al started gaming the system aggressively during a heatwave and the artificial scarcity they were inducing created actual shortages across the state. California does need more electrical capacity but the rolling blackouts had almost nothing to do with a lack of capacity and everything to do with certain companies tilting the table.

In general utilities are one of the entities that create problems when deregulated and put on the "free" market. The necessity of water and power to function in a modern economy creates a captive customer. The scale necessary for production/distribution and the limitations of resources like water create barriers that lock new competition out of the market.

[phej]

When we're talking about essential services like water, a lot is wrong with it. Latin America has been a testing ground for the privatization of water, with generally negative results:

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Sixth paragraph:

"After years of structural adjustment imposed by the World Bank and International Monetary Fund, as a region, Latin America has the most inequitable income distribution in the world. Mirroring this is a pattern of tremendously unequal access to water. More than 130 million people have no safe drinking water in their homes..."

What does this have to do with profit? The article doesn't cite how that happened. As far as I can tell, it sounds like these countries haven't invested for increased urbanization. A few paragraphs before this one, there is mention of waste in leaky pipes (50-90% of the water is lost).

Enter the private water companies, eager to do (for a profit) what the governments have not done or no longer wish to do. How has it turned out? Well....here's paragraph fourteen:

"Arguably, the best-known reaction to water privatization occurred in Cochabamba, Bolivia when the engineering giant Bechtel set up its subsidiary, Aguas del Tunari, in early 2000 and immediately raised the price of water beyond the reach of the vast majority of the population. Its contract even gave the company the right to charge people for the water they took from their own wells and to send collection agents to homes to charge for rainwater collected in cisterns on roofs. Consumers were hit with up to 200% rate increases as the company planned for annual profits of $58 million.8 Public protests forced the government to reverse this privatization effort, but Bechtel is now suing Bolivia for $25 million in lost profits."

So Bechtel and Bolivia made a contract. If the contract stipulates the obnoxious constraints such as collection agents charging for collected rainwater, the fault lies in the government for acquiescing to this. My guess is that Bechtel wanted the 200% rate increase to cover their costs. The footnote, 8, doesn't work, so I don't even know if they were even profitable before the rate increase proposal.

I don't think anyone would argue that a 200% rate hike for any commodity is in the consumer's best interest.

This is how it's worked out in Latin America--privatization of water has not saved consumers money, but cost them. I know that, in theory, there should have been fifty private water companies in there bidding lower and lower and lower, thereby creating a consumer paradise. But that's not how it worked out in practice. That makes me wary of "free markets" and privatization and deregulation.

Sure it is, the article talks about the crappy water distribution problems in Latin America probably because of historical underinvestment in their plumbing and sewage systems (which happened before attempts at privatization.) If the rate hike can cover the water suppliers costs, leading to profit, and can guarantee access, then that is an improvement.





phej added to this post, 12 minutes and 7 seconds later...

That's incorrect.

The huge chain of blackout California experienced a few years back was a result of deregulation and induced artificially...

I'd love to blame Enron on this one but it was a partial deregulation that caused the blackouts. Enron, just took advantage of the situation.

From: To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.

THE PROBLEMS: Wholesale prices, often set by the highest bidders on this type of commodities market, surged. Prohibited from passing those rising costs on to customers because of the rate freeze, the utilities were forced to bear the financial burden.
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LOW SUPPLIES
POWER PLANTS: In the last decade, no new facilities have been built. Also, many have been shut down for maintenance.
SPIKED DEMAND: A cold winter, plus CA's booming economy increased appetite for energy. In 2000, consumption grew 10 percent.
OUT-OF-STATE-GENERATORS: CA draws about 25 percent of its juice from outside sources. An unusually dry summer and cold weather reduced generating capacity at hydroelectric dams and electricity generators in Oregon and Washington. Also, suppliers simply refuse to sell to the state, opting to sell power to more credit-worthy bidders in the Pacific Northwest
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[Aronnax]

phej added to this post, 12 minutes and 7 seconds later...



I'd love to blame Enron on this one but it was a partial deregulation that caused the blackouts. Enron, just took advantage of the situation.

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Enron was only one of the players, they just happen to be the big name here. Over scheduling the grid then charging "congestion fees" and coinciding "plant maintenance" with peak demand were the big levers that were used. There were other ploys that manipulated prices by buying and selling megawatts between production companies to simulate demand but that was small potatoes compared to the blatant artificial scarcity several of these companies created.

The blackout persisted into the winter months, where generation capacity is several times demand (no need for AC). It was raw market manipulation that caused those blackouts. Do you think it's merely a coincidence that massive statewide blackouts vanished when the deregulation laws were rolled back? There was no significant increase in generation capacity nor an increase in grid capacity after the "energy crisis". There is a real need for upgrades to California's capacity and distribution systems but they had almost nothing to do with the blackouts California saw several years ago.

[Paul Siraisi]

What is it about conservatives on this forum where they always have to capitalize ME or bold I whenever they're trying to make a point?

It's a reminder that your good will toward others is a personal decision, which is a manifestation of individual freedom, which is destroyed when you start requiring others to have the same good will you have.





Paul Siraisi added to this post, 5 minutes and 39 seconds later...

This statement:

It's impossible for the government to regulate morality.

Is contradicted by this one:

The government's job is to keep you from getting your ass kicked lynch mob style because you choose to be yourself.

Obviously I'm assuming lynch mobs are immoral.

Yes, government is based on morality. The trick would be to find that lowest common denominator of morality that is true for all the governed. And that appears to be in slight tension with what I said about good will just now.

Is there a universal human morality? I say yes there is.

[phej]

I found a paper (To view links or images in this forum your post count must be 2 or greater. You currently have 0 posts.) going over the chronology of things by the Federal Energy Regulatory Commission:

The State of California passed legislation in 1996 (California Assembly Bill 1890), and the California Public Utilities Commission issued orders in the same general time frame introducing competition into California’s electricity market. Key features of the Bill included establishing the California Independent System Operator (CAISO) to operate the transmission facilities of California investor- owned utilities (IOUs), encouraging IOUs to sell off their generation assets, requiring them to buy all of their power in a newly created ‘spot’ market run by the California Power Exchange (CalPX), and forbidding IOUs from entering into long term, “bi-lateral” contracts. The legislation also capped retail rates that these utilities could charge customers below the then-current cost of electricity. From April 1998 when the California market commenced until late May of 2000, the plan worked relatively well. But in May, 2000, spot prices began to rise notably.

A number of factors contributed to the Western Energy Crisis of 2000 and 2001. These included: a low rate of generation having been built in California in the preceding years making California dependent on imports of electricity; northwestern drought conditions resulting in lower than expected water runoff for hydropower generation; a rupture and subsequent capacity constraints on a major pipeline supplier of natural gas to California markets (California was heavily dependent on gas-fired generation due to state air standards); strong economic growth and thus increased electricity demand throughout the west; and unusually high temperatures coupled with an increase in unplanned plant outages of older plants that were being run to meet increased demand in California. Further, transmission line constraints within California, both for imports and exports of electricity, exacerbated an already marginal situation during this time period. Finally, some energy companies attempted to manipulate wholesale electric and gas markets.

As prices continued to rise, California utilities had to purchase higher priced power but, because of the state rate freeze, were unable to pass along these price increases to customers, thus becoming financially unsound. In the summer of 2000, the CAISO also called ‘stage 3’ emergencies as reserves dropped below 1.5 per cent, interruptible power loads were curtailed, and rolling blackouts occurred in northern California. The Department of Energy issued emergency orders to require suppliers to continue to sell into the California market, and Governor Davis signed new legislation in early 2001 authorizing the California Department of Water Resources (CDWR) to buy and sell power. The CDWR subsequently attempted to break those same contracts. Throughout this entire time, the Federal Energy Regulatory Commission was involved due to the dual scheme of regulation under the Federal Power Act, and the following abstract details the major Commission actions during and following the Western energy crisis and Enron’s collapse.

[Stickman]

As far as the jealousy issue goes, I mean more than that. I point out that your claim to property, and any physical enforcement of that claim, creates a limit to my action and opportunity.

Well, let's put it this way. If my chair was public property then no matter who owns it, no one can sit on it while other people are. Regardless of whether it's owned by the public or not, this 'opportunity cost' will always exist.


I also agree that banning property rights, or abolishing the notion, would be the best suggestion

Are you sure this is what you meant to say? I don't remember suggesting that at all.

[themuzicman]

The idea of socialism is not that one or the other is given power entirely, and I'm embarrassed even to have to explain that. If I solely looked at history to define capitalism, disregarding all of its tenets, I'd figure that it was mostly about creating societies of people whose greatest concern in life is their appearance and who go around messing relatively normal people's countries up to turn a profit. You don't want people to do that, right?

LOL... I guess there are "normal people" and then those "evil capitalists"?

What are "evil capitalists" some kind of mutated breed or something?

[PunkinA]

I also agree that banning property rights, or abolishing the notion, would be the best suggestion. Oh my, I really meant "would not be the best suggestion." Thank you Stickman for catching that. :embarassed: I hate making mistakes like that.

Well, let's put it this way. If my chair was public property then no matter who owns it, no one can sit on it while other people are. Regardless of whether it's owned by the public or not, this 'opportunity cost' will always exist.

I agree that the opportunity cost is inherent to scarce resources. The suite of rights protected as property rights in the western system extend beyond basic use or possession, but that is only a measure of scope not presence. Even uncivilized animals experience this kind of trade-off. I guess where I am aiming with my roundabout explanation is that as a government extends the suite of property rights (to include buying, selling, pawning, leasing, destroying ...) that government imposes its vision on each individual by expecting them to abide by and respect additional forgone opportunities. My main point of entry into this argument was to say that we cannot just expect to be left completely alone, and expect privileges gained by imposing one suite of ideals on everyone else, without holding everyone else to a different standard. Basically I can't mutually leave you alone, and then force you to value my ideals.

That said, I still support property rights. However, I don't see them as some ideal and perfect solution in shining armor. Instead they represent a gritty compromise of how willing I am to make you act toward my ideals. I also admit that some individuals will have rational motivations for opting out of the deal.

[Stickman]

I agree that the opportunity cost is inherent to scarce resources. The suite of rights protected as property rights in the western system extend beyond basic use or possession, but that is only a measure of scope not presence. Even uncivilized animals experience this kind of trade-off. I guess where I am aiming with my roundabout explanation is that as a government extends the suite of property rights (to include buying, selling, pawning, leasing, destroying ...) that government imposes its vision on each individual by expecting them to abide by and respect additional forgone opportunities. My main point of entry into this argument was to say that we cannot just expect to be left completely alone, and expect privileges gained by imposing one suite of ideals on everyone else, without holding everyone else to a different standard. Basically I can't mutually leave you alone, and then force you to value my ideals.

That said, I still support property rights. However, I don't see them as some ideal and perfect solution in shining armor. Instead they represent a gritty compromise of how willing I am to make you act toward my ideals. I also admit that some individuals will have rational motivations for opting out of the deal.

Well, most people come about their ownership of property by exchange. So in theory I've acquired my house from a guy named "society" by selling a bunch of chairs over my lifetime to the same guy. No one can tell me what to do with my house and likewise I have no say in how those chairs are used.

If all those chairs and house(s) were publicly owned than my "control" over how they are used will still need to be shared with "society" probably through some kind of governance or democratic process. Overall, the level of "rights" or "ownership" or "opportunity" is the same. What I've lost in the capitalist system (that is, the rights to the chairs I've made) I've gained through unanimous control over my house.

[Cimejes]

Cimejes,

People aren't entitled to prosperity. They have to earn it through creativity or hard work. It's not the government's job to provide everyone with prosperity. It's their job it to provide them with protection from those individual's that wish to deny them the opportunity to try for it.

And by the way. Money can buy me happiness as well, but I don't believe that's true for everyone. This is evidenced by the fact that not all impoverished individuals are miserable, and not all wealthy individuals are happy.

Have I said that the government's responsibility is to provide for everyone. NO. Your being disingenuous by making an assumption like that. I am not naive enough to a socialist. But I and the majority of Americans believe that there should be a fair amount of regulation in the markets for greater good of the people.

[mmw]

Have I said that the government's responsibility is to provide for everyone. NO. Your being disingenuous by making an assumption like that. I am not naive enough to a socialist. But I and the majority of Americans believe that there should be a fair amount of regulation in the markets for greater good of the people.
Do free markets not serve the greater good of the people? In free markets with fair competition there is an abundance of upward mobility for the average citizen be it through entrepreneurship or merely employment by others engaged in entrepreneurship.

The problem (speaking primarily from a U.S. standpoint) is that we do not typically end up with truly free or truly regulated markets because of the nature of our political system. Any legislation regarding regulation/deregulation of a market/industry is so heavily influenced by lobbyists and politicians financial backers that it really only serves the interests of a few key players in the market/industry. For example the recent FDA regulation of tobacco was actually supported by Phillip Morris, primarily in order so that they could tailor regulation to fit their products and exclude those of competitors.
This is just one example of the pattern that leads to companies that are "too big to fail", in a truly free market failing companies are quickly replaced by more able competitors.

[Cimejes]

Do free markets not serve the greater good of the people? In free markets with fair competition there is an abundance of upward mobility for the average citizen be it through entrepreneurship or merely employment by others engaged in entrepreneurship.


I think you are misunderstanding my point of view. How do you define the free market and is there any place for any form of regulation. You should note that I do not hold a monochromatic view on this subject.

[mmw]

I think you are misunderstanding my point of view. How do you define the free market and is there any place for any form of regulation. You should note that I do not hold a monochromatic view on this subject.
Yes the government's role is to prevent fraud and coercion. Hypothetically it should also prevent collusion and monopolies, but these things shouldn't occur anyway in a truly free market.

[Cimejes]

Yes the government's role is to prevent fraud and coercion. Hypothetically it should also prevent collusion and monopolies, but these things shouldn't occur anyway in a truly free market.

What about environmental regulation. Should the federal, state, or local governments be able to regulate how much and where waste produced goes. Or should companies be able to do as they wish. It seems to me that you are speaking of a theoretical concept of the market rather than something practical.

[mmw]

What about environmental regulation. Should the federal, state, or local governments be able to regulate how much and where waste produced goes. Or should companies be able to do as they wish. It seems to me that you are speaking of a theoretical concept of the market rather than something practical.
You are correct to say that I am speaking in a highly theoretical context. I would agree that some degree of environmental regulation is appropriate because it is an area where one individual's negligence can effect another individual's happiness and well-being. However, I was referring to regulation in a financial/market sense more than anything.

[HmjG]

Have I said that the government's responsibility is to provide for everyone. NO. Your being disingenuous by making an assumption like that. I am not naive enough to a socialist. But I and the majority of Americans believe that there should be a fair amount of regulation in the markets for greater good of the people.

You DO know the definition of disingenuous, right?

Define what you mean by "fair amount of regulation". That is a very vague. Then take that definition and find direct evidence it's applicable to the majority of Americans.

Have you ever heard of "argumentum ad populum"? In Latin, it means appeal to the people. It alleges "If many believe it to be so, it is so." It contributes to a lot of negative social phenomena, like the bandwagon effect and communal reinforcement. You might want to rethink using the "majority of people believe argument".

The only time such an argument is rational is when "the majority" consists of subject matter experts.

[mmw]

You DO know the definition of disingenuous, right?

Define what you mean by "fair amount of regulation". That is a very vague. Then take that definition and find direct evidence it's applicable to the majority of Americans.

Have you ever heard of "argumentum ad populum"? In Latin, it means appeal to the people. It alleges "If many believe it to be so, it is so." It contributes to a lot of negative social phenomena, like the bandwagon effect and communal reinforcement. You might want to rethink using the "majority of people believe argument".

The only time such an argument is rational is when "the majority" consists of subject matter experts.
Agreed, "the majority" lack the information, education or insight to even hold valid opinions on such matters.