Aces High Bulletin Board
General Forums => The O' Club => Topic started by: Munkii on December 14, 2003, 10:25:34 PM
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Okay, I'm taking a Philosophy class right now, and we are focusing on politcal philosophy as that is what my professor has more knowledge in. He has presented the "usual suspects" Locke, Hobbes, Marx, Mills, and Rawls. Doing all this reading has gotten me thinking about some of the practices in our country today and how they are interpreted. I would like to start a civil discussion regarding some idea's on what is taking place today in society and how it fits in with the philosophy's.
I'd really like to get Miko involved, as he usually presents well thought out arguements, whether you agree with him or not. Another person I would be interested in hearing from is Martlet, he generally ask's for sources, but since this is all based upon your interpretation of the other sources, none are needed. Since there is no right or wrong answer, I do expect a flame war to eventually erupt, but I hope to pick the brains of a few of you before that happens.
Now lets look at society today. We supposedly live in a democracy, in reality is more a Federalistic Republic, but we all know how the US is supposed to work. (Most of my discussion will be laced with youthful ignorance, which is the reason for writing this.) If we look at society today though, we have more of a federalist government, that has semi-socialistic tendencies, especially in the economic section. I propose this because I think that, similar to Marx, all free trade/capitalism leads to communisum or socialism. I differ in my opinion, because I don't necesarrily believe that all socialism is good, nor do I believe it is all bad.
Socialism in America leads to better wages, more competition between companies, and better worker safety. Most of these things come from the organization of workers, and government intervention. (Anti-Trust laws, OSHA) These things, do not necesarrily mean true socialism, because there is the basis of capitalism at work (private owned companies instead of state controlled, and skilled laborers having to find work instead of being pushed into it through the state) and this makes free trade even more profitable to most involved.
The economics of the situation is astounding, but I do feel that most benefit at least a little bit from this intervention by the government in the free trade of America. The working class (through unions and other organizations for skilled laborers) has given itself better wages and better working conditions, and has also increased the profits for other companies, because a lot of them own stock in the very company they work for. Therefore they make themselves worth more the harder they work.
I think this is a good enough start for a discussion, but I have a lot more I would like to debate.
:eek:
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Hi, Munkii.
I see you want to do a serious studying here, so I would not do the subject justice if I try to educate you here.
The purpose of my posts here was not so much as to provide good and complete answers but to address readers who did not know there are questions and set them on the way of independent discovery.
If you are already interested, your time would be much better spent reading a couple of introductory books by authors with much better command of the language. You can read a book by a great author in five hours or spend them arguing one simple issue with me here - and I cannot guarantee good participation with second baby and other stuff going on in my life.
For the very beginners, "Economics in one Lesson" by Harry Hazlitt is a classic. A bit more thorough introduction is "Economics for real People" by Gene Callahan. Those are not large books.
Hayek's "The Road to Serfdom" and "The Fatal conceit - The Errors of Socialism" are great on the political implications of faulty economics.
If you really want to get floored, read "Democracy, th egod that Failed" by Hoppe.
Check the book catalog of http://www.mises.org if you have trouble finding them elsewhere.
The perceptions and even language of modern political discourse is based on so many levels of misconceptions and patent absourdities that it is basically impossibe to pose a meaningfull question, let alone provide a meaningfull answer.
So I will address the issues briefly without explanations.
We supposedly live in a democracy
Democracy is just the way how the curent caretaker of the government is selected.
Government is a territorial monopolist on use of violence and ultimate decision making (jusridiction) in a territory.
The membership in such state is usually non-voluntary - certainly in US after 1861.
As with any monopoly, the quality and quantity of services (justice and protection of rights and property) tends to decline and costs to rise.
In case of democracy, the tendency or state to become a tyrany is strongest and hardest to overcome, compared to any other form of government.
I think that, similar to Marx, all free trade/capitalism leads to communisum or socialism
Not really. Marx's statements on that effect are completely bogus and self-contradictory. In fact, he developed the bogus theories of August Compte and Hegel about some kind of historic spirit that drives the development of society.
Besides supernatural and mystic perception of history, the rest of Marx's theory is based on false labor theory of value. Without those all his writings are just so much nonsense - and yes, I've read Capital twice and many other of his works.
Socialism in America leads to better wages, more competition between companies, and better worker safety. Most of these things come from the organization of workers, and government intervention.
On all your examples it is the opposite that is true. Whatever progress happened, happened due to the accumulation of capital and comparition, despite socialist tendencies.
As you can see my views are so radically different that I would have to either write a book on each point or say nothing at all. As I've said, the time you spend with those few books would be much better investment of time for us both.
I would be happy to answer any specific questions or discuss more general things you encounter reading them.
Good luck with your studies. You may wish not to let your teachers know you are reading that stuff, at least if you are concerned about grades.
miko
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Actually, I think are views are a lot similar than you perceive, its just I have a problem forming the way I like things to go, plus it is blatant ignorance on my part in some area's. I'll go through and address your statements one by one, and check out those books. A 5 week debate on here wouldn't bother me in the least, because I enjoy the interactive learning.
Democracy is just the way how the curent caretaker of the government is selected.
With this are you saying that it is the way the U.S. was selected or all governments in general? By that standard is the "Democratic" governments setup in Afghanistan, and the one being setup in Iraq democratic? I would concider them more of a colonial democracy at best, one just going through the motions until the people actually get used to it, and find that it is to the benefit most of the time.
Marx's theory is based on false labor theory of value.
Would you say that even though his idea's have been debunked, (I agree with that statement) that some of the idea's of labor unions that came about show a little into his theories? I think that the labor unions alone turned most of the industrial section around. Now that we are a more commercialistic country, they don't have as much of an impact, and are generally concidered nuisances by the public. I think that generally comes from employers trying to get their profit margins back up by dissolving the unions again.
Whatever progress happened, happened due to the accumulation of capital and comparition, despite socialist tendencies.
How would you address the issue of worker safety? Would you leave it up to the employee's and employers to weed out the issue of workplace safety and health? If there were no government intervention, are you suggesting the dissolving of patents and anti-trust? From the looks of things without either of those, they would either counter-balance each other, by means of competition on every level, or they would throw everything askew because of industry espionage.
As you can see my opinion is still being formed, and I have never studied this in great detail but have the desire to learn. If anyone else as anything to add, please feel free.
BTW congrats on the 2nd Miko :aok
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How soon they forget me :(
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Originally posted by -sudz-
How soon they forget me :(
Who the hell are you?;)
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Munkii: With this are you saying that it is the way the U.S. was selected or all governments in general?
As far as governments come, it can be completely privately owned - hereditary monarchy, completely publicly owned - direct democracy, or anywhere in between - oligarchy, limited-franchise, republic, etc.
As with any privately owned institution. the owner owns the capital that he can pass to his heirs, so he is interested in increasing the capital value at the cost of reducing the private consumption. His time horison is expansive.
With publicly owned instituition, you have a tragedy of the commons. The current caretaker does not own capital value but only the current income stream - so there is always a tamptation to increase it at the expense of capital decumulation. That is what's hapening with most democracies - taxes and debt raise.
that some of the idea's of labor unions that came about show a little into his theories?
He was radically against labor unions. He believed that capitalism should eb allowed to rung theough it's development fastest and social-democrats just prolong it by any intervention. Of course it was in his 1863 program, not in the 1848 program.
Labor unions are nothing but monopolies on labor. As any monopoly they benefit some workers at the expense of consumers and other workers, not capitalists.
How would you address the issue of worker safety?
There is no issue. People commonly select riskier jobs for greater rewards based on their personal preferences. In a free market capitalism there is a competition for resources - including labor. mistreat your workers and they would leave.
are you suggesting the dissolving of patents and anti-trust
They are not effective. The only viable monopolies are those enabled by the state.
BTW congrats on the 2nd Miko
Thanks. :)
Oh, almost forget - go to http://www.mises.org - there is a wealth of information there, you can get education and access to many books on-line. If you read the daily article archives, you will know ecomonics better than your professors - though it's probably hard to know it worse, considering the mainstream doctrine is completely bogus.
miko
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No Mach?
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No Mach?
Actually no, my professor deliberatly excludes concepts he either didn't like, or didn't fully understand. He totally sidestepped the issue's that most of the class wanted to discuss in the religious sections of the text. (PSR and its role in the Cosmological Argument) I've done a little research on Mach on my own, but not enough to discuss anything he has theorized.
I'll reply to your post later Miko, I have some more questions for you, but I must study for my finals.. :(
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You'd be better served taking a course in Accounting. Trust me...
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Some validity to Otto's post.
I majored in Political Science because I enjoyed it but I ended up working in the financial field - go figure.
Great at cocktail parties and when you find someone who understands the world beyond "No war for oil" but unless you have teaching aspirations (Master's minimum) or wish to work on a campaign, as an aide, or for a lobbiest group look elsewhere.
Still - I might go back for a Doctorate and teach at a small university when Im close to retirement - plenty of years to plan that approach.
Either way - good luck. If you ever get any Mach, Sun Tzu, or Clausewitz in one of your classes look me up - wrote my thesis on them. :cool:
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We supposedly live in a democracy ??????
wow! This just keeps coming up! NO NO NO NO NO
IMHO We do not live in a democracy, furthermore it was never intended that we live in a democracy....
Someone i'm sure is gonna say so what's the big deal?
Words mean something. When I was young the dictionaries available showed the words Murder and Kill were basically of the same meaning ... in that it meant taking the life of an innocent person. Where as Slay meant to take the life of another in mortal combat.
The difference?
An innocent individual had done no harm to you or any other, had offered no punishable offense to the same, and was defenseless or unready to defend themselves or unaware anyone intended to harm them our use violence upon them.
In mortal combat BOTH are aware of their purpose. BOTH are there for the same purpose. And enter into combat either willingly or unwillingly as it may be but ALL parties concerned KNOW what is happening.
Ya ya I know the explanation is incomplete but the purpose is to specify that words have meanings.
I'm trying to avoid the... if you repeat a lie often enough it becomes the truth.... thing yet it seems with the college people promoting the lie's all of us are going to loose in a very big way.
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DEMOCRACY
EXPLAINED
_____________________________ _______________________
"Democracy is three wolves and a sheep voting on what to have for lunch."
Democracy - more honestly called "mobocracy" - is a political system based upon the concept that the majority always rules...
...because they outnumber the minority, and can beat them up.
Never doubt this: "Democracy" is rooted in pure brute force:
Every "fundamentalist" blue law imposed on a minority with differing beliefs assumes that the unbelievers will be forced to obey.
Every majority election of a politician forces unwelcome "representation" upon someone whose views that politician diametrically opposes.
Democracy assumes that three illiterate morons are somehow wiser than one Einstein-level genius... Simply because there are more of them; they outnumber him, and can force their wills upon him.
Democracy says it is acceptable to take money or property from a nonconsenting individual because he is outnumbered, a minority.
Democracy in its purest form is best illustrated by the robbery of a helpless, little, old lady by a gang of thugs. It must be okay: The gang "majority" out-voted the woman.
by TANSTAAFL Publications
Simon Jester Strikes Again!
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The individuals that framed our system were very very much against democracy! Read the Federalist papers, as well as the anti-federalist papers, and as well as the letters written by them contained in the Congressional Records. The information is out there!
They created a Representative Republic with the intention that it would be protected by the Rule of Law!
They further did all they could to avoid the Rule of Man.
However this thread recently came to my attention and I find it's content somewhat troubling re: the judicial system input further down the thread. If the content is worthy of trust then we may very well now have an UH OH on the way.
http://www.sierratimes.com/cgi-bin/ikonboard//topic.cgi?forum=3&topic=194
and this
http://www.keepandbeararms.com/Mancus/silveira.asp
Yo miko2d.... do you have a libertarian slant?
Yo Saurdaukar ... I find Sun Tzu fascinating.
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Actually no, my professor deliberatly excludes concepts he either didn't like, or didn't fully understand. He totally sidestepped the issue's that most of the class wanted to discuss in the religious sections of the text. (PSR and its role in the Cosmological Argument) I've done a little research on Mach on my own, but not enough to discuss anything he has theorized.
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Maybe you need a new professor?
Maybe this individual should not be called a "professor"?
Maybe you need to point out the meaning of the word "professor" to this individual?
Oops sorry I got a little carried away If anything I would guess i'm politically a Constitutionalist as originally written and/or intended.
This was not intended as a thread hijack and you are welcome to request I delete it or edit it. I will act upon you request.
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Originally posted by Munkii
If we look at society today though, we have more of a federalist government, that has semi-socialistic tendencies, especially in the economic section. I propose this because I think that, similar to Marx, all free trade/capitalism leads to communisum or socialism. I differ in my opinion, because I don't necesarrily believe that all socialism is good, nor do I believe it is all bad.
Think of government powers over business and personal wealth as a manifestation of J.S. Mill's liberalism, not as Marxism.
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Originally posted by wrag
We supposedly live in a democracy ??????
You're fooling yourself. We're living in a dictatorship. A self-perpetuating autocracy in which the working classes--
Oh! Come and see the violence inherent in the system!
HELP! HELP! I'm being repressed!
Did you see him repressing me, you saw it didn't you?
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wrag: We supposedly live in a democracy ?
We are living in a democracy, my friend and what we are seing around us and in other countries are the natural outcomes of a democratic form of government in a state with unlimited powers.
Of course the unlimited government is the major culprit but it is the democracy that makes it so bad - after with other forms of unlimited government people often did not lose fredoms and even gained them. You see, besides the low time preference of the private forms of government, the population is much less likely to resist infringment on the personal liberties and property when an entry into government is theoretically open to everyone.
Yo miko2d.... do you have a libertarian slant?
I am probably as libertarian (with a small 'l') as they come.
miko
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Wow.. so much to respond too. Finally some attention in my little thread. Let's get right to it then :D
You'd be better served taking a course in Accounting. Trust me...
Okay this doesn't have much to do with the topic, but I'll respond anyways. I'm majoring in Accounting/Finance, so I have plenty of classes in that area. Philosophy and Politics are favorite subjects, and I enjoy the debates (notice I said debates, not flamewars) that can come about from discussing them.
This was not intended as a thread hijack and you are welcome to request I delete it or edit it. I will act upon you request.
This is exactly the kind of responses I was looking for. Keep the input coming!
Think of government powers over business and personal wealth as a manifestation of J.S. Mill's liberalism, not as Marxism.
Upon further review, I would agree. I should mention here, this is an intro class and we do not have alot of time to discuss each in depth. My professor went over Marx the most, and I was able to pull a lot of parallels from them, real or percieved.
I was going to reply to your post Miko, but I realized that most of what you were saying made sense to me. I do have some scenarios I would like to plan out further before I post them. I had some other questions I would like to ask you, but I don't want to make a new thread. If you don't mind answering them, could you email me at Munkii@cox.net ?
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Originally posted by Munkii
My professor went over Marx the most
Professor's will do that if you let them :)
-Sik
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Originally posted by Sikboy
Professor's will do that if you let them :)
Yeah well, this was his first class ever, and he didn't allow a lot of discussion. He did go over the material fairly well all things concidered. But at my school, athletics are more important than academics it seems.
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Originally posted by Munkii
Yeah well, this was his first class ever, and he didn't allow a lot of discussion. He did go over the material fairly well all things concidered. But at my school, athletics are more important than academics it seems.
I didn't run into nearly as much Marx as I expected as a poli-sci student in Kalifornia, SSR. But this thread reminded me of a quote from Eat the Rich by PJ O'Rourke:
MIT economist Paul Samuelson: "Marx was wrong about many things...but that does not diminish his stature as an important economist."
PJ O'Rourke: ""Well, what would? If Marx was wrong about many things and screwed the baby-sitter?"
It's neither here nor there but I need a break from studying, and found it amuzing
-Sik
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"I'm majoring in Accounting/Finance"
Good for you.;) Now don't take your eyes 'off the ball"
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Originally posted by Otto
Good for you.;) Now don't take your eyes 'off the ball"
I decided on Accounting/Finance because I have way too many interests and could not decide. I took the ASVAB for the military to see if there was a clear area I was better at. I scored a 98% and it was fairly evenly distributed. So then I just figured, I major in Finance/Accounting, work for someone else and plan my own retirement and possibly retire early if everything goes right. This then gives me the time to do what I want to for fun, not money.
Look at me, I'm hijacking my own thread.
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Originally posted by Sikboy
MIT economist Paul Samuelson: "Marx was wrong about many things...but that does not diminish his stature as an important economist."
PJ O'Rourke: ""Well, what would? If Marx was wrong about many things and screwed the baby-sitter?"
Nah, that wouldn't do it either. Keynes one-upped even that, and he's still historically pretty important. :)
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Before I forget, this is mostly directed at miko, but I welcome everyone else's opinion.
What are your theories on child labor in the work force?
It's generally accepted that child labor would not be a problem without the laws, but being younger than many of you, and not coming from a very well off family. I would say that child labor laws are the only thing that kept me in high school. I have a fairly high IQ, I think I tested around 135-142, but I had to get a job as soon as I turned 16, so I could afford to have decent clothes and enough food to eat. I have worked hard for everything I have, my computer, my car, and my own apartment now. In highschool I could only maintain at 2.7 GPA, because I worked from 4:30 until 10:30 leaving me very little time for homework.
If it hadn't been for laws stating that I had to be off work by 10:30, many companies would have worked me further. My family might have intervened, but my working was a huge lift off of their financial shoulders, and they were finally able to start working on most of the debt they had incurred in raising me.
Now I am going to college on your money, because I have recieved 2000 a semester in grants from the government, and I was accepted to a major university all because of Standardized Testing. (Which in itself is another highly debated topic).
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Good call on the degree.
You will need all this political science mumbo jumbo later on to discuss all sorts of issues at cocktail parties and on this BBS. That's about all it is useful for.
Curval, BA (Political Science), CA, CPA :)
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Munkii: Before I forget, this is mostly directed at miko, but I welcome everyone else's opinion.
What are your theories on child labor in the work force?
There is no special theory on child labor. The very general theory applies - coercion is bad. Preventing two willing parties to engage in contract because it offends someone's sencibilities is bad.
If a family choses to send a child to work in a free market, that means it is the best option that family has. Disalowing such family to send child to work will just force them in whatever desperate situation they were before - through no fault of the employer.
In fact, an employer would suffer much less that a family would from such a restriction.
In pre-capitalist societies the families existen on subsistence income, on a verge of starvation. Once the capitalism started developing, the capital begin accumulating thus raising productivity of labor and wages of laborers.
As long as there was an inflow of people from outside capitalist system of division of labor willing to work for subsistence wages, the level of unqualified wages could not rise above subsistance level. But once all the population was invlved in capitalist production, labor became scarce. With increase of the amount of capital, the marginal utility of labor was increasing and since all factors of production (labor, capital, land) always earn their marginal utility, so the real wages started raising.
With increase in wealth, the marginal utility of child labor decreased and the supply of the child labor disappeared. Instead of being invested in satisfaction of urgent cuurrent needs (staving off starvation), the child labor was invested into the futire increase of productivity - through schooling.
All the child labor laws did was increase wages of some workers at the expense of the desperate families and delayed the process of capital accumulation, which caused a lot of unnecessary suffering.
Charity giving money to the family so that it does not need to send a child to work is a good non-coercive way to eliminate child labor.
BTW, if an employer was willing to pay higher salary, it would do no good, becasue for that higher salary he would be able to higher a better worker who would not be as desperate as to accept a child's wages, so the most desperate workers/families would be shut off from the labor market bu such "charitable" artificial increase in wage above the marhinal utility of child labor.
Such an employer would receive less profit which would cause him to accumulate capital slower which would lead to less than optimal growth in productivity and thus labor wages.
Free market is the optimal, fastest way to increase welfare, any "feel-good" intervention is just making improvement slower or impossible.
miko
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Charity giving money to the family so that it does not need to send a child to work is a good non-coercive way to eliminate child labor.
I was thinking of somthing similar, but that would be an unlikely situation. How would said charity determing whom recieved help, and who didn't? What would stop this charity from being abused like the welfare system we have today? If a company had a type of charity setup for its workers, and did extensive situational checks, I think the idea has merit. As it is now, I'm still on the fence about how the no child labor laws would play out. I'm fairly certain suburban America would be uneffected, but inner urban area's would see a sharp drop in graduating students, and a sharp rise in child labor. The only percieved benefit would be the accumulation of capital for the family so they could escape the inner city, but that would sacrifice at least one generations educational opportunities.
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Originally posted by Munkii
I'm fairly certain suburban America would be uneffected, but inner urban area's would see a sharp drop in graduating students, and a sharp rise in child labor. The only percieved benefit would be the accumulation of capital for the family so they could escape the inner city, but that would sacrifice at least one generations educational opportunities.
It appears that Miko is suggesting that it is not a bad thing.
Miko...comment for you: It appears that the child in your senario of the economic unit known as the family is a slave. Note that a slave may not enter into an economic contract of their own volition. Rather, another actor forces them into a contract, usually with no say from the slave as to the terms of the contract.
Now if we truly open up a "free market" concept to all individuals, including children, then are we running the risk of having adults routinely take advantage of the ignorance of children, sometimes in ways that have extremely detrimental and long lasting effects on the child. If they are considered free and rational actors able to enter into contracts, then statutory rape laws should be thrown out...leaving any pervert who wishes to have sex with a 5 year old free to do so if the child "agrees" to perform the sex act.
If children are not considered rational actors free to enter contracts on their own and are forced into work, then they are slaves.
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Munkii: I was thinking of somthing similar, but that would be an unlikely situation.
Oh, boy. You (we) are so brainwahsed it's scary. But there is hope for you since you are actually trying to learn on your own beside the standard fare that is served to you by the "educators".
And I am not talking about politics here but the use of language. There is an essay on the (mis)use of langiage by George Orwell - Politics and the English Language, and his book "1984" that is a brilliant illustration how the language is distorted to change the way people think.
You should stop thinking in artificual completely bogus concepts like "government", "society", "charity" etc. Those words have their place to denote certain valid concepts but taking them out of their proper area of use, pretending that those "things" actually exist as some kinds of acting entities - rather than denote certain systems of relations between acting individuals - is a fallacy that prevents many from thinking straight. (Assigning independent existence to an artificial concept is called "reification, IIRC)
People act. People make decisions. People make mistakes and learn form them.
Whan I say "charity", I mean individual people making decisions to help other people they deem worthy of their help - nothing more, nothing less.
Same as government is a group of people in certain relations towards other people and each other.
How would said charity determing whom recieved help, and who didn't?
It would be irrelevant what I said because being voluntary, any charity would set its own standards.
Of course if a charity was asking me for an advice on how to administer their money, I would say find the cases where there would be the most bang for the buck and attach a lot of strings.
Find the most capable children who's talents would be most wasted and help them advance - so they become productive members of the society and benefit others.
Cut the help if the family does not do its utmost to utilise it. If they let a child skips school, if they have another child even though they could not afford the first two, if they pay for cable TV or jewelry - I'd take my money away from them and offer it to another family.
Of course everyone has his own priorities and the charities reflect that. Some address the most desperate cases instead of the most promising ones, as I would. That's free choice.
What would stop this charity from being abused like the welfare system we have today?
Why would anyone care if a charity is abused besides a person who voluntarily paid money for it? I am not concerned how wisely you spend your food money, why would I question your charity spending?
Or rather I am very much concerned about how you spend your money - food, charity, education, etc. - make no mistake about it. I am just not going to endorse coercion as a way to influence your choices. Libertarians are not uncaring - just opposed to coercion.
I'm fairly certain suburban America would be uneffected, but inner urban area's would see a sharp drop in graduating students, and a sharp rise in child labor.
How much are those "educations" really worth? Those people may benefit much more from aquired work habits than a bogus diploma.
Education is an investment. As with any investment, it only makes sense if it brings fruit in excess of the cost. Education pays if it makes a person more productive so that the cost would be covered. If that is the case, it would be easy to secure a loan or some other kind of financing as it would be for any other venture.
We would see much more of such financing if the government did not make it illegal and did not divert enourmous amounts of resources from private economy, driving the real interest rates up.
The only percieved benefit would be the accumulation of capital for the family so they could escape the inner city, but that would sacrifice at least one generations educational opportunities.
What's the other option? A family does not send a child to work instead of sending him to a private boarding school. A family sends a child to work at a factory so that the child does not have to work in the field, beg or starve.
If that family had educational opportunities, why would it choose to end a child to work? Of course, there is an illusion that by confiscating wealth from a capitalist you can benefit that family - and you can. But this would deter capitalists from investing and creating capital in the future, so the increase of wealth and real wages will be slower and many other families would be worse off than they could have been.
The road to common welfare is increasing productivity and production through accumulation of capital per person, not redistrisributing the existing wealth. Any such redistribution just slows down or reverses the progress.
Munkii, would you read the thread mentioned at the bottom of this post - it will give you an understanding for the philisophical underpinning of my positions.
I used some Hayekian wordings there but I am sure he was not the first one to come up with them.
crowMAW: It appears that the child in your senario of the economic unit known as the family is a slave.
Now if we truly open up a "free market" concept to all individuals, including children
There is a distinction between children and their parents. It's a bit too complex issue to address righ now - the origin of people's rights in a free society.
In short, a parent is entitled to make decisions on behalf of a child. A perent can certainly send a child to work on the family farm or factory rather than let him or his siblings starve.
I would not call a child a slave of his parents because that word has a pretty specific meaning. There are all kinds of relations where one person is entitled to make decisions for another one.
Children cannot be considered rational actors because it is known that human brains does not develop it's cognitive abilities untill certain age, so they are not capable of acting rationally.
Here is a post on the nature of rigths I wrote in February. it covers the nature and origin of rights and touches the parent-child rights as well:
Rights, liberty and the Rule of Law. (http://www.hitechcreations.com/forums/showthread.php?s=&threadid=79556&highlight=rights+children)
Here is a quote but read the whole post to understand the concepts of domain and rights that I use.
A child originates within a person’s body, so a child belongs to that person – part of his/her domain. A child does not have claim to any rights other than those voluntarily claimed on its behalf by its parents (see Rights above) – since nobody has incurred any obligation to such child/fetus. Parent has rights in a society by supporting its operation and can claim such rights for a child.
Nobody is allowed to offer anything – candy, ride, pornography, a book, let alone drugs or alcohol to an underage child because it would violate the parent’s domain - unless the parents agree, of course. Nobody can claim rights for someone else’s child because enforcing them would mean violating the parents’ domain.
When a child grows old enough to support the operation of the society, he claims the same rights as others. The exact moment when that occurs is a tricky question. Probably when a child steps outside and says “I am my own responsibility” and the parent says “OK, I am not responsible for him/her anymore and whatever is done to him/her is not a violation of my domain“. Probably the prevailing tradition will have a say on the age.
miko
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You have a very interesting philosophy Miko, and a lot of points I agree with, but some I have a hard time making the connection. the Child Labor thing probably hits home a little bit closer to myself, but I'm sure you can relate at least on some level.
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Miko:
I appreciate your intellect and education, but I think that many of your abstract, theoretical notions, while perhaps plausible in thought experiments, would break down badly in practice.
It's much as if an engineer designed the fly-by-wire system for the F-22 using a linear model of the plane, because the real non-linear model is too unwieldly to work with. It might look good on paper, because the simplified model allows the engineer to design all sorts of slick control systems. The engineer's simulated, linear plane would perform beautifully, but when his controller was applied to the real plane, it would never fly.
Even though the engineer's linear model is too coarse to yield a controller that would work on a real plane, it is still of use. Indeed, the engineer extracts many general principles from the simple model. Thus, it, like your ideas, is important, although ultimately impractical without considerable modification.
Just my $0.02,
JNOV
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LoneStarBuckeye: I appreciate your intellect and education, but I think that many of your abstract, theoretical notions, while perhaps plausible in thought experiments, would break down badly in practice.
Would? Free-market capitalism developed spontaneously and caused enourmous increase in wealth for all classes of people in two centuries before 1900 - when practically none of the socialist institutons and labor laws were in effect.
I bet that you are being paid much more than a legal minimum wage - despite no obligation on your emplopyer's part to do so and apparent disbelief of most people that the employers would only pay subsistance wages if the law did not mandate otherwise.
Free market, like many other complex systems that work perfectly - languages, genotypes, ecological systems, social institutions, customs and many other types - were not designed by human reason but developed spontaneously.
One may screw up the function of a human body by poking it with sharp objects and pouring chamicals into orifices but it would be an obvious fallacy to claim that "a human body would break down badly in practice" unless it is tinkered with by democratically elected socialist committee.
A wishfull thinking, a democratic vote or a decree would not make a diet or gene modification work as desired unless it fits with the natural principles of chemistry and biology. Same with society.
The functioning of the free market or a market in general is based on individuals acting in their own interests, not out of altruism or any other idealistic feelings.
I could say that market-based society is not an idealistic utopia because its design is not based on the people's willingness to follow some rules - but that would be totally meaningless because the market is not designed by anyone and could not possibly be.
What's more - market and market relations always exist and have always existed as long as humans had mind in its modern form.
The nature of the market relationships is different in various societies. Different kinds of "property" are "traded" in different ways and different currency is used but it is always true.
In the most oppressive communist country or the most weird hunter-gatherer society without concept of ownershio of physical objects there has always been a market with favors, influence, sex and access used as currency and control in place of capital.
My point is that out of all kinds of market the relationships based on strict private property ownership and self-ownership of one's body will lead to the fastest increase in wealth for all people because it is conducive to the development of division of labor, most efficient utilisation of available resources towards satisfaction of the most urgently felt needs of the people. And none of that relies on anyone's good will.
It is based on the inherent properties of the human mind and it is a fallacy to think that people can design something or change something in market relationships - any more than we can design a different operation of gravity in the universe. We can use the knowlege of principles of nature to our advantage or ignore such knowlege and suffer the unevitable consequences.
Economics is not a political science. It does not tell what ought to be. Ot can only predict within pretty well understood limits of its powers of prediction what kind of effects and consequences a certain action would or woudl not bring and whether they would be desirable.
For instance, preventing poor people from accepting work will make poor people's situation worse than it would have been.
One of the main reasons for the current problems of civilisation is the failure to understand the fundamental epistemological differences between social sciences like economics and natural sciences or theoretical sciences like math and trying to apply the methods of the latter to understanding the former. Such misunderstanding encourages tinkering which cannot be but counter-productive.
miko
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I'll give you a quarter for "epistomological." That's a mouthful. I don't understand your final paragraph, however, unless you meant to use "former" where you used "latter," and vice-versa. If you mean what I think you meant, I agree entirely.
I think I understand now (as I did when I replied originally) that your fundamental axiom is that the world is comprised of persons who all act independently and in what they perceive to be their own best interest. From that starting point, you attempt to draw all sorts of conclusions about everything from governments to free markets to private property rights to child labor.
You have obviously thought about this much more than have I. My only point in response is that the system that you posit (i.e., a chaotic, distributed system with 6 billion independent actors) is unbelievably complex and that no one can draw any reasonable conclusions about its behavior (at either a macro or micro scale) without making grossly simplifying assumptions. This is what happens in any field of study when one wishes to analyze a complex system. For example, this happens in economics all the time. The question is whether, in simplifying the system under study, you render your results meaningless. In engineering, one can often calculate a bound on the error introduced by simplifying assumptions. In fields like economics, I don't think that is generally possible.
Here's an example of what I mean. Your statement:
"My point is that out of all kinds of market the relationships based on strict private property ownership and self-ownership of one's body will lead to the fastest increase in wealth for all people because it is conducive to the development of division of labor, most efficient utilisation of available resources towards satisfaction of the most urgently felt needs of the people."
does not follow directly from your thesis and, I'm sure, depends on simplifying assumptions. So, the real question is what are those assumptions, does the conclusion follow given the assumptions, and how do the assumptions affect the legitimacy of the conclusion?
- JNOV
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Yo Miko some thoughts here......
Might be worth it to cover the means of / or method where by wrong doing and wrong doers would / could be dealt with :)
As to your expression of child parent relationship, I have to say that such a relationship, or something very like it, was in effect when I was a child. The parent/parents brought the child/children into the world and had to expend resources to care for the child. This is an extremely simplified explanation. One must add in many emotional parts as well as practical things to get the correct picture of the parent child relationship.
I also have to say that a child had very few rights! As so few children truly understood those rights. The rights came to the child, as they were earned / understood. The parent usually extended these rights to the child in the afore said manner.
A simplistic example would be the house key. A child did not receive a key to the family dwelling unless the child understood the importance of protecting / not losing that key, and how to use that key. It helped teach responsibility to the child. It helped the child learn to think through things and to retain information. It further gave the child a sense of self worth and self respect to achieve a higher level of responsibility. On the flip side there were added incentives in that failure could bring punishment. That punishment was seldom anything close to severe. Except perhaps in the child's eyes. Perhaps something like No TV or some such a thing. And the I thought I could trust you thing. And the well you're gonna have to work at this some more until you can show your capable of handling the responsibility thing.
Oh Well just some thoughts. Much of what I put forward here is probably kinda old school and not politically correct now.
Dang LOL to much thinking before the proper infusion of caffeine
:lol
I'm not exactly a libertarian due to a struggle with some of the concepts. Yet I find myself in agreement with and even applauding many of the concepts.
Guess I was brought up with the basic concepts expressed in the following......
"Liberty means responsibility. That is why most men dread it."
George Bernard Shaw (1856-1950)
Anglo-Irish playwright, critic
"The ultimate result of shielding men from the effects of
folly, is to fill the world with fools."
Herbert Spencer (1820-1903)
English philosopher
"The generality of men are naturally apt to be swayed by fear
rather than reverence, and to refrain from evil rather because
of the punishment that it brings than because of its own
foulness."
Aristotle (384-322 bc)
Greek philosopher
"Necessity is the plea for every infringement of human
freedom. It is the argument of tyrants; it is the creed of
slaves." William Pitt English politician, prime minister.
"It will be found an unjust and unwise jealousy, to deprive a
man of his natural liberty upon a supposition that he may
abuse it."
Oliver Cromwell (1599-1658)
lord protector of England
OOPS got kinda long winded here sorry .....
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Originally posted by miko2d
In short, a parent is entitled to make decisions on behalf of a child. A perent can certainly send a child to work on the family farm or factory rather than let him or his siblings starve.
I agree with that statement up to the point where it is understood that the parent is making rational decisions in the best interest of the child. I admit that begs the question: what defines the best interest of the child.
Certainly starving is not in the best interest of the child. However, is forced labor the only method to achieve that goal? What are some other alternatives? Not creating a fetus or allowing the fetus to come to term if you cannot afford to feed it may be alternatives. Giving the child up for adoption may be another.
Originally posted by miko2d
I would not call a child a slave of his parents because that word has a pretty specific meaning.
Nor would I...except in the case where the parents purpose in creating the child is to create a source of free labor. Unfortunately, this does happen where there is no disincentive in place to prevent it...ie child labor laws.
I think that the line from laborer as a participant in the family commune to slave is very thin. As soon as the child's wages are used to subsidized the parent's consumption of goods that have no benefit to the family unit--ie cigarettes, liquor, etc--then they are clearly a slave. If the parent earns a profit from the child's labors, then they have become a slave. I defend that last comment by reminding you that we are considering the family as a communal economic unit and as such all profits should be shared. Also recall that the adults can choose not to enter into a situation where they must care for children, where as children have no choice but to depend upon adults for survival for a period of time.
Originally posted by miko2d
Rights, liberty and the Rule of Law. (http://www.hitechcreations.com/forums/showthread.php?s=&threadid=79556&highlight=rights+children)
Here is a quote but read the whole post to understand the concepts of domain and rights that I use.
I agree with your assessment of the nature of rights...where applied to adults. I think I would agree with the bulk of your quoted passage if the word "child" were supplanted with the word "fetus"...which I think was where you were going since the next paragraph speaks of abortion.
Where we would diverge is with the concept that if the parent agrees to allow others to claim a right, then it is OK. Again, I would argue that the agreement must be in the child's best interest. Simply because a parent agrees to sell a child into prostitution does not make that an optimal decision. It may be optimal for the parent, as they receive the compensation. But it is far from optimal for the child. A worse scenario would be a parent who would sell a child for slaughter...again there are sickos out there who would enter into such a contract if it were not illegal to do so. If laws were constructed where a child only has those rights given by the parent and the parent can give those rights to another person, then that type of behavior is not only possible, but likely.
I am a minarchist. I believe that by being a member of a society that I am better able to defend my rights by using the collective power of the society...and in order to codify the rights and organize the collective power of society I recognize that a government is an efficient method of performing that function. As such, I do believe that some rights are automatically given to all members of a society simply by being born into it...and in return the society is perpetuated by the addition of new generations. The question is...what rights are automatic? Certainly, we as a society have decided that life after birth is a right. Protection from sexual exploitation prior to an age where informed consent can be realized is another. And, in our society of the USA, not being forced into slavery is another right...which includes using children as labor for the family unit.
I think even anarchists who support a purely "free market" society would agree that they have a right to live, have informed control over decisions they make, and have the right not to be bound into slavery.
BTW, do you ever hang out on FreeMarket.net?
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LoneStarBuckeye: I'll give you a quarter for "epistomological." That's a mouthful.
Epistemology is the science on the nature of knowlege. How do we know things, what kind of knowlege is valid, what can be known, etc. Metodology may sometimes serve as a synonym.
Combined with ontology - the science on what categories have independent existence (does "virtue" exist or an abstract triangle), those come handy in discussing any philosophical and sociological matters.
I commute over 3 hours a day, so I once bought a set of philosophy lectures at http://www.teach12.com just to get an idea what are they (philosophers) are talking about.
I don't understand your final paragraph, however, unless you meant to use "former" where you used "latter," and vice-versa.
Yes, thank you, I've edited that.
You have obviously thought about this much more than have I.
:) Not as much me as several dozens of genius-level scholars starting with late scholastics through scotis philisophers trough Adam Smith and culminating in Ludwig von Mises and his followers.
I am just a student and popularizer.
My only point in response is that the system that you posit (i.e., a chaotic, distributed system with 6 billion independent actors) is unbelievably complex and that no one can draw any reasonable conclusions about its behavior (at either a macro or micro scale) without making grossly simplifying assumptions.
That is exactly the statement that the scholars starting with Adam Smith through Austrian School have set to dispell.
Along with the more dangerous view that the economic system can be grasped and thus planned by a human reason - which is the underlying foundation of all socialist policies.
There are very few basic axioms on the operation of the human mind that are known a-priori. How do we know those axions? Simple - each one of us has a mind that he/she can intimately examine.
From those a set of theorems was developed that produced very specific and reasonable conclusions about how an unbelievably complex system (which cannot even theoretically be grasped by a human mind) operates. Though the system is not chaotic in the least but operating under a very few very basic principles.
Which correspond to reality because the operation of society is also based on the properties of the human mind.
The conclusions that can be achieved are not the same kind as those the natural sciences are used to. You cannot get an exact prediction how a certain individual will act. If it could be done, that would contradict to the basic claim that humans have an ability to make choices - free will.
But a whole range of conclusions and assertions on what would happen - and even greater range of assertions on what cannot possibly happen - can be produced.
Quite enough to predict and expain the effects and failures of the interventions into the free market.
Like that increase in supply will cause market price to drop. Or that artificially fixing the price below the market-clearing price will cause a reduced suppy and shortage - which is probably the opposite to what the price-fixers tried to achieve.
Your statement: ... does not follow directly from your thesis and, I'm sure, depends on simplifying assumptions.
There are no simplifying assumpions except the usual "other things being equal". We are talking about a purely theoretical science - like math, not a natural one based on measurements and approximations, experiments and observations.
The statement I gave about optimality of the free market based on private property is the conclusion. I did not present a proof here.
wrag: Might be worth it to cover the means of / or method where by wrong doing and wrong doers would / could be dealt with
You mean in a non-coercive state or a stateless society? People would do private provisions for defence based on their knowlege of local conditions, personal estimation of perceived risks and cost, etc. They would buy locks and bars, dogs and alarms, form patrols, contract private security companies and purchase private insurance services - which insurers would probably become the largest providers/contractors of security services. Pretty much all the things that people are doing now despite the existence of the government law-enforement. One could even say to the large degree because of the government law-enforcement and other policies. If not for War on Drugs, faulty urban planning and social engeneering, there would be much safer environment and less need for protection.
Anyway, the number of personnel and the amount of money involved in private security greatly exceeds that of the government law-enforcement.
There are serious books on that topic but I have not read them yet.
I have some views on parent/children that some may find interesting outside political/economic content which I will probably discuss some other time.
miko
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Hmmmm forced labor?
You don't work you don't eat? Does that seems like forced labor?
Has anyone posting lived as a street person? Or been in a situation where they had to live like a street person? No job and little of a, or very bleary, future? Always hungry and wanting something to eat?
From my experience far too many seem to think they can imagine terrible situations. YOU CAN NOT! You may believe this as untrue. I guarantee you when and if the time actually comes you will realize the imagining you did comes NO WHERE NEAR the reality. The emotions you actually feel can not be felt imagining. The thoughts that run through your mind are colored by those emotions and affected by those emotions and again can not be truly imagined.
IMHO there are some BOTTOM line things being avoided or not even discussed here.
Nicey nice, goody good is ok as far as it goes.............
However there have been times in history when things were far different and there could be times in the future when things become far different.
Also in some countries or area's of our world people are just barely getting by.
Should things become very very bad for many people what we are discussing becomes much less important then the survival of the individual and then the family unit. Who would you want at your side? A family member intent on the survival of YOUR family or ....
As too the parent child relationship IMHO the one currently being presented (the PC one) has very little to do with family. And from my perception is angled more toward the STATE becoming the ultimate parent. This to me is very chilling! Some individual is going to decide a child's fate without the intimate knowledge a parent would have. Without the attachment that a parent would have.
We saw some of this type of thing with Hitlers' Third Reich.
As to socialism ... the NAZI's were socialist. One of the differences between the NAZI's and the communist was ownership. The communist required the state own everything and the NAZI's didn't care who owned what as long as they had full control over it.
IMHO too many people fail to understand what is truly important due to their own lack of experience.
IMHO this colors much of what they try to do for our society. Sadly it seems they begin from a unrealistic viewpoint and proceed.
There are many good people in the world. There are many bad people in the world. Each of us must choose which we shall be. To ourselves and our fellow humans.
OK nuff said .... gettin windy again .......
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Originally posted by miko2d
Education is an investment. As with any investment, it only makes sense if it brings fruit in excess of the cost. Education pays if it makes a person more productive so that the cost would be covered. If that is the case, it would be easy to secure a loan or some other kind of financing as it would be for any other venture.
We would see much more of such financing if the government did not make it illegal and did not divert enourmous amounts of resources from private economy, driving the real interest rates up.
Aside from potential increased productivity, I think there is one other logical reason for government to provide education or require children to attend school.
I believe that one of the legitimate roles for government is to reduce transaction costs. While Ronald Coase was not around to lecture the Founding Fathers, it is apparent that they did have an idea of the concept of transaction costs and their effect on trade. They gave the US government power to set a standard of weights & measures, the power to create a postal system and the power to build roads. Why?
In a pure "free market" I could say that I am selling a pound of butter...of course I am using my own weight system and in that system my pound of butter only weighs 15oz. Without the government setting a standard of 16oz = 1lb, the buyer of my butter would have no legal remedy to show that I cheated him out of 1oz of butter. It would have been caveat emptor. That would cause buyers to purchase and bring their own scales to learn if my definition of pound meets their own...thereby increasing the cost of the transaction. Transaction costs are losses to the economic system...they add no value at all.
There are three categories of transaction costs...one of which is search and information costs. Education reduces search and information costs. If I cannot read, then I must find someone who I trust to read for me so that I can collect the information necessary for me to decide to enter into a transaction. If I cannot read then I cannot learn of a seller's availability by reading an advertisement.
Both the consumer and the seller are damaged by increased transaction costs. As such, aggregate transaction costs are an externality that is born by all in society and as such their reduction is a public good.
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wrag: Hmmmm forced labor?
You don't work you don't eat? Does that seems like forced labor?
I'd say not. If someone's parents chose to have a child they cannot feed, it's not anyone elses fault or responcibility.
But we were mostly discussing the opposite here - forced exclusion from labor by wage laws, licensure and trade restrictions.
crowMAW: I believe that one of the legitimate roles for government is to reduce transaction costs...
First, the free market can and did provide a solution more efficiently than the government - including in the area of standartisation and even conflict resolution.
Second, the government does not only provide those solutions less efficiently, it often drives the transaction costs up.
Examples:
Replacement of the gold standard with free-floating fiat currencies. That makes it much more difficult and risky to conduct international trade and investment, which reduces the division of labor and thus productivity.
The cost of airfare and telephone communications fell drastically and usage exploded after the government partially deregulated airlines and telecoms and let competition take its course.
Both the consumer and the seller are damaged by increased transaction costs. As such, aggregate transaction costs are an externality that is born by all in society and as such their reduction is a public good.
The very concept of externality is considered bogus by Austrian school and really represents the imperfectly defined property rights and government intervention.
But even in the conventional economics I doubt that increased - or rather not reduced - transaction costs would count as an externality.
It costs to standardise. Once the benefits outweight costs, people standardise. Otherwise standardisation is counter-productive.
What about the metric system? How many americans know how many grains are in an ounce or pounds per ton? How many know how many feet are per mile - whichever one of the few we use? What about quarts per barrel?
Doesn't seem to cause that much trouble.
They gave the US government power to set a standard of weights & measures, the power to create a postal system
Imperial power grab. They forcefully shut down much less expensive private mail delivery systems like the one created by Lysander Spooner.
Then they used the monopoly on mail to introduce censorship, by making it a crime to send certain things through the mail they did not like.
People went to jail for sending medical information related to contraception/birth control through the mail. Newspaper editors were prosecuted for printing articles about birth control since the newspapers were delivered through the mail.
and the power to build roads. Why?
Private turnpikes, private railroads were built in US and over the world. The answer is the same - power grab by the government, providing contracts and land for supporters.
If I cannot read, then I must find someone who I trust to read for me...
Which may be your cheapest alternative. You only need to pay when/if you need something read or translated from a foreign langauge.
If you do it too often, you may save money in the long run by investing into education.
If I cannot read then I cannot learn of a seller's availability by reading an advertisement.
If advertiser targeted you, he would come up with a format you would be able to perceive, right?
miko
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Originally posted by Munkii
Okay this doesn't have much to do with the topic, but I'll respond anyways. I'm majoring in Accounting/Finance, so I have plenty of classes in that area. Philosophy and Politics are favorite subjects, and I enjoy the debates (notice I said debates, not flamewars) that can come about from discussing them.
Liberal arts is an important part of a university education, otherwise you might as well go to a trade school.
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Originally posted by crowMAW
Both the consumer and the seller are damaged by increased transaction costs. As such, aggregate transaction costs are an externality that is born by all in society and as such their reduction is a public good.
In Miko-world, things like public goods, externalities, and market failure do not exist.
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Originally posted by Montezuma
Liberal arts...
what is Liberal arts?
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Originally posted by miko2d
Examples:
Replacement of the gold standard with free-floating fiat currencies. That makes it much more difficult and risky to conduct international trade and investment, which reduces the division of labor and thus productivity.
The cost of airfare and telephone communications fell drastically and usage exploded after the government partially deregulated airlines and telecoms and let competition take its course.
I'm not seeing as how those three examples are transaction cost related. Note I did not include Constitutional power of the Federal government to mint coin. It was not an exclusive right back then. Many states minted and the standard was gold.
There are some pro's and con's to the gold standard. But that is a different conversation.
Airline and telecommunication regulation also did not have a basis in reducing transaction costs.
Both the consumer and the seller are damaged by increased transaction costs. As such, aggregate transaction costs are an externality that is born by all in society and as such their reduction is a public good.
Originally posted by miko2d
The very concept of externality is considered bogus by Austrian school and really represents the imperfectly defined property rights and government intervention.
Well, it is not like the Austrians were perfect...even FA Hayek admitted he made a mistake in some of his Socialist Debate arguments. Plus, the Austrians tended to poopoo Keynesian Theory, which is still the cornerstone of macro theory today. Keynes was not perfect either, but it does not mean that his theories are complete crap. [See my next post...I don't think the Austrian school excludes the concept of externalities]
Externalities exist. They may exist because of imperfectly defined property rights, but that does not remove their existences.
Unfortunately, without government interference, there is not an efficient way of mitigating negative externalities. Government can attempt to more clearly define property rights and allow individuals to claim remuneration from individual producers of negative externalities. Or it can attempt to mitigate negative externalities in the aggregate.
For example, I do not value cigarette smoke at all. To me the negative value each time I am forced to breathe cigarette smoke is $50...for prolonged exposure (more than a minute) it is $1000. Now, in a pure anarchist "free market" society, I would have to attempt to extract the negative value each time with each individual smoker that happens along my path. What happens if the smoker does not have the money available to compensate me for having to bear the cost of his smoke? I would have to litigate each time. That is not very efficient at all.
Government instead collects a tax as aggregate mitigation and creates regulations so as to give me places where I can be assured that I will not have to bear the cost of someone elses cigarette smoke production. In turn smokers are allowed some areas where they may produce cigarette smoke without fear that I will hit them up for money to compensate me for having to breathe their smoke.
Originally posted by miko2d
But even in the conventional economics I doubt that increased - or rather not reduced - transaction costs would count as an externality.
Sure they are...ever hear of network externalities? They are directly related to transactions.
Originally posted by miko2d
It costs to standardise. Once the benefits outweight costs, people standardise. Otherwise standardisation is counter-productive.
What about the metric system? How many americans know how many grains are in an ounce or pounds per ton? How many know how many feet are per mile - whichever one of the few we use? What about quarts per barrel?
Doesn't seem to cause that much trouble.
Ah...you are missing the point of why a government sets a standard. Anyone can set a standard. I can set one. You can set one. The Europeans can set one. The US can set one.
Look at my example again. I say I'm selling a pound of butter...I've set my standard to be 15oz=1lb. The buyer believes that 16oz=1lb. If the government has set a standard of 16oz=1lb, then I am guilty of committing fraud and the buyer has legal recourse. If there is no government set standard, the only way that the buyer is protected is by measuring the weight of the butter against a scale that the buyer understands. The latter is an increased transaction cost.
What is the cost of setting a weight standard? Whatever the cost of the legislative or executive body selecting and publishing the standard.
What is the cost of not setting a weight standard? The aggregate cost of weighing time of all consumers buying items sold by weight + the aggregate cost of all consumers buying/storing/transporting scales + the aggregate lost potential sales from consumers not having scales when desired.
If you try to only look at individual benefits exceeding individual costs, aggregate optimality will not be achieved and there will be a net loss to the economic system. Basically, it is like drag keeping a system from reaching the frontier of the production possibility curve.
Originally posted by miko2d
They gave the US government power to set a standard of weights & measures, the power to create a postal system
Imperial power grab. They forcefully shut down much less expensive private mail delivery systems like the one created by Lysander Spooner.
Then they used the monopoly on mail to introduce censorship, by making it a crime to send certain things through the mail they did not like.
People went to jail for sending medical information related to contraception/birth control through the mail. Newspaper editors were prosecuted for printing articles about birth control since the newspapers were delivered through the mail. [/B]
Well, those actions were constitutionally challenged and eventually they were shown to be unconstitutional. The Constitution does not give monopoly rights to the USPS...and as such we do have private competitors, ie UPS, FedEx, DHL, etc.
BTW, the only private postal services up until Spooner had very limited routes and were not real competition for the USPS. Before Spooner, all real postal service in the American Colonies and US were state sponsored...either British, Colony, State, or Federal sponsored. Spooner's postal service did not show up until 50 years after the US Constitution was completed...so it is not like Ben Franklin as the first Postmaster General of the confederated colonies in 1775 supplanted Spooner...it did supplant the British sponsored service though.
Originally posted by miko2d
and the power to build roads. Why?
Private turnpikes, private railroads were built in US and over the world. The answer is the same - power grab by the government, providing contracts and land for supporters.[/B]
Again, the Constitution does not give the US government monopoly over roads. My subdivision has private roads. I drive on a private road every few months called Roebling Road Raceway. If you wish to make a turnpike...go ahead...buy the land, pave it, and charge folks to drive on it. I'd only suggest you build it in a place where there is not a cheaper alternative to your road.
The reason government offers public alternatives to private postal service and private turnpikes is to assure access. If I own a private road then I can deny access to whom ever I please. Worst case scenario would be a private road that two competing companies use to carry goods to buyers. One company buys the road and then denies access to vehicles carrying the goods of the other company. The second company now must build a road or take alternate and longer routes. The net effect is higher aggregate transaction costs. And if the 2nd company goes out of business because it cannot compete given its higher transport costs, then the first company would be able to capture monopoly profits. Both the higher transaction costs and the monopoly situation are non optimal.
It is the same deal for postal services...USPS provides guaranteed access.
Originally posted by miko2d
If I cannot read, then I must find someone who I trust to read for me...
Which may be your cheapest alternative. You only need to pay when/if you need something read or translated from a foreign langauge.
If you do it too often, you may save money in the long run by investing into education.
If I cannot read then I cannot learn of a seller's availability by reading an advertisement.
If advertiser targeted you, he would come up with a format you would be able to perceive, right?
[/B]
Again...you are only looking at the cost-benefit from an individual perspective and not in the aggregate. You have to total up all those individual costs plus the lost opportunity costs for sellers in the case where buyers forgo a purchase because they are not enabled to make the transaction. Plus when considering information transfer, you must consider the leveraging advantage as the number of individuals with a common communication path increases. IE, consider a telephone...if I have the only one then it is pretty useless. If there are two then the utility goes up...the more telephones available for me to call the higher the utility. If you optimize individual benefits only, you miss the maximum aggregate utility possible.
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Originally posted by mietla
what is Liberal arts?
www.dictionary.com (http://dictionary.reference.com/search?q=liberal%20arts)
liberal arts
pl.n.
1. Academic disciplines, such as languages, literature, history, philosophy, mathematics, and science, that provide information of general cultural concern: “The term ‘liberal arts’ connotes a certain elevation above utilitarian concerns. Yet liberal education is intensely useful” (George F. Will).
2. The disciplines comprising the trivium and quadrivium.
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Originally posted by miko2d
The very concept of externality is considered bogus by Austrian school and really represents the imperfectly defined property rights and government intervention.
After some sleep and pulling out some of my old econ books (one of Rothbard's on pollution), I had one other comment on this...
I don't think the Austrian school considers the concept of externalities as bogus at all. Rothbard clearly indicates they exist. The Austrians only limit the application of externalities to property invasion and provable personal casualty.
The bugger for externalities always has been pollution. When you have multiple sources and multiple victims the transaction costs of clearing each externality individually becomes very high. To depend soley on torts to eliminate free riders in the pollution example is extremely inefficient.
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Montezuma: In Miko-world, things like public goods, externalities, and market failure do not exist.
True - those are just terms to fool people.
In my word any number of people can band together to own and manage common property on any principles they choose - democratic one-man-one-vote, shareholding, or entrust it to a leader.
In our world "public property" is something extorted from me for management of which I can cast a futile vote.
As I've mentioned, there is a huge body of work explaining how externalities are just poorly defined property rights.
It is government that allows pollution of the public rivers or private land. In my world it would be illegal to invade someone else's property. So you can pollute all you want in your parcel of land or river but once you spill over into another property, you violate law and no government can give you permission to continue "for common good".
As for market failure, under free market there will always be failures bacause loss is just the other side of the profit - an informational process that transfers ownership to entrepreneurs who correctly predict public needs.
What politicians call "market failure" is when their desired do not correspond to the public desires reflected by market.
crowMAW: I'm not seeing as how those three examples are transaction cost related.
1. You have to protect yourself against the currency fluctuation risk - buy insurance, hedge, etc. - something you would not do with gold standard.
That increases transaction costs for international trade and so inhibits division of labor.
2. If you pay more for a plane ticket of a phone conversation, it is more expensive to do business - discover opportunities, make contracts, etc. It would seem to me the best example of a transaction cost, so now I wonder wjhat do you mean by "tansaction cost".
Plus, the Austrians tended to poopoo Keynesian Theory, which is still the cornerstone of macro theory today. Keynes was not perfect either, but it does not mean that his theories are complete crap.
They are. I've read The general Theory twice and the guy did not understand the simplest things. Like how someone saving money in his mattress rather than spending or investing it causes increase in investment. There is nothing new in his theories that mercantilists did not say two centuries earlier. He got popular because he told the government that what they were doing anyway - inflating and borrowing - was scientifically sound.
The foundation of his theory was that inflation and unemplyment was inversely related. So the stagflaion of the 70s wa a theoretical impossibility.
I could write a dozen pages explaining the most basic, most obvious errors in his "theories". He would contradict himself in one sentense, not just one paragraph. He would be talking about profits ending up being too low (below 2%) to attract investment - and next about the need to nationalise because the capitalists would be making excessive profits.
He thought that increase in investment would bring down profits, for god's sake.
I studied Keynes the first time before I discovered the Austrian school - because I was impressed by his foresight in "The Consequences of Peace" - which I did not read yet but trusted someone's summary.
I found the theory so jumbled that it was impossible to follow and one had to contsantly assume to trust the author - much like with Marx's theory. What a waste that has been.
Later I've read "The consequences of peace" and discovered all his logic was totally bogus, only his prediction of war "luckily" turned true.
I believed like a fool that germany was destroyed by reparations based on common knowlege - while reparations were just a small percentage of Germany's GDP and the crisis was a textbook Austrian monetary mismanagement, not fiscal problem at all.
With austrian school, there has not been a single instance where I had to make a leap of faith - so far, at least.
Keynes had no idea about epistemology of economics. There is no explanation for the foundation of his assertions.
Sure they are...ever hear of network externalities? They are directly related to transactions.
If someone benefits from what you are doing without your intent, that does not give you any right to coerce him to pay you. That's pretty much all about the positive externalities. You may call such benefit "externality" but it does not mean anything should be done about it.
The negative externalities are state-approved violations of property.
If there is no government set standard, the only way that the buyer is protected is by measuring the weight of the butter against a scale that the buyer understands. The latter is an increased transaction cost.
Sure. That's why people can create an organisation to manage standards - a government for standards and nothing else. But you are talking about creating a government that would manage standards, which also has the power to confiscate your house or draft your children for slaughter. That's quite a transaction cost too.
the only private postal services up until Spooner had very limited routes
The routes would have expended if he was allowed to. They wuld not be as extensive as government's but then, if someone choses to live in a faraway location - for some benefit, no doubt, shouldn't he pay his own increased postage fees?
The reason government offers public alternatives to private postal service and private turnpikes is to assure access. If I own a private road then I can deny access to whom ever I please. Worst case scenario would be a private road that two competing companies use to carry goods to buyers. One company buys the road and then denies access to vehicles carrying the goods of the other company.
I can thinik of a free-market scenario that would not allow that to happen. Who would buy a property next to a road unless the continuity of access to it was contractually guaranteed?
A developer creating a new town would have drafted teh sale contracts ensuring the perpetual access - or he woudl not sell a single plot.
If there are two then the utility goes up...the more telephones available for me to call the higher the utility. If you optimize individual benefits only, you miss the maximum aggregate utility possible.
All true. But what does all that have to do with a government? Free market can ensure all that better.
crowMAW: I don't think the Austrian school considers the concept of externalities as bogus at all. Rothbard clearly indicates they exist.
true, he uses the term "externality" to describe several types phenomena - becasue it is a common term. About some of them nothing should be done economically. The others may be explained without that term and he uses it to facilitate understanding. I am not sure itw as worth in all cases. Mises is more strict with his terminology. It takes getting used to but then avoids confusions.
miko
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Originally posted by miko2d
crowMAW: I'm not seeing as how those three examples are transaction cost related.
1. You have to protect yourself against the currency fluctuation risk - buy insurance, hedge, etc. - something you would not do with gold standard.
That increases transaction costs for international trade and so inhibits division of labor.
2. If you pay more for a plane ticket of a phone conversation, it is more expensive to do business - discover opportunities, make contracts, etc. It would seem to me the best example of a transaction cost, so now I wonder wjhat do you mean by "tansaction cost".[/B]
I see, you are using those as examples of where government has increased transaction costs. I am arguing that a legitimate role for government is to reduce transaction costs. You've given examples where government has exceeded that legitimate role. And I agree. Our current government frequently acts beyond the legitimate role it should play.
Originally posted by miko2d
crowMAW:Sure they are...ever hear of network externalities? They are directly related to transactions.
If someone benefits from what you are doing without your intent, that does not give you any right to coerce him to pay you.[/B]
You said that transaction costs should not be considered externalities. I gave you a clear example of where they can be. I'm not making any case as to how the externality should be treated.
Originally posted by miko2d
crowMAW:If there is no government set standard, the only way that the buyer is protected is by measuring the weight of the butter against a scale that the buyer understands.[/b]
Sure. That's why people can create an organisation to manage standards - a government for standards and nothing else.[/B]
Congratulations for realizing that there is at least one legitimate role for government. The hard question now Miko is for you to define a complete list of the legitimate roles that government should play. We'll make a minarchist of you yet.
I'd actually like to start another thread on this particular topic as it took me much thought and discussion to develop my list.
Originally posted by miko2d
But you are talking about creating a government that would manage standards, which also has the power to confiscate your house or draft your children for slaughter. That's quite a transaction cost too.
I think you are making a pretty big leap by thinking that my arguments for a government that can legitimately act as an enabler of reduced transaction costs is also an argument for a government that has a draft!
Originally posted by miko2d
crowMAW:the only private postal services up until Spooner had very limited routes
The routes would have expended if he was allowed to. They wuld not be as extensive as government's but then, if someone choses to live in a faraway location - for some benefit, no doubt, shouldn't he pay his own increased postage fees?[/B]
Absolutely! I'm not arguing that the current USPS is perfectly administrated. I am arguing that the concept of a government sponsored postal service to ensure equal access helps reduce transaction costs and is therefore a legitimate function of government.
BTW, note that the USPS is moving towards graduated rates based on distance. It used to be that all parcels were charged the same rate just like letters. That is no longer true. Eventually, I would expect that graduated rates will be applied to letters as well.
Originally posted by miko2d
crowMAW:The reason government offers public alternatives to private postal service and private turnpikes is to assure access. If I own a private road then I can deny access to whom ever I please.
I can thinik of a free-market scenario that would not allow that to happen. Who would buy a property next to a road unless the continuity of access to it was contractually guaranteed?
A developer creating a new town would have drafted teh sale contracts ensuring the perpetual access - or he woudl not sell a single plot. [/B]
That is a pretty big assumption. Would you ever consider buying a house where you don't actually own the land under it...you own the structure, but not the land. It happens all the time in areas where land is scarce...Hawaii for example. When purchasing a scarce resource people will accept very odd conditions.
But to your example...are you suggesting that in a pure "free market" that a land purchaser would have to negotiate a perpetual access contract with every road owner to which that property's driveway connects it to any destination within the road network? What if I am a road owner in Florida and your property is in California, but you want to use my road a couple times a year? What incentive do I have to make a contract with you to provide perpetual access? What happens if I sell the road after I make that contract with you...would you have to renegotiate the contract with the new owner.
You see the complexity of this grows. And as such creates huge transaction costs.
Now lets really make it complex...
Right now I can get on I-95 and drive straight to Miami non-stop (the entire length of Florida's peninsula). Now consider if the road was privately owned and different stretches of the road belonged to different owners. Each transition would require a toll to be paid to the owner. Suddenly what was a 5-6 hour trip is now increased dependent on the number of toll booths the individual owners decide to build.
Again...transaction costs are increased.
Originally posted by miko2d
crowMAW:If there are two then the utility goes up...the more telephones available for me to call the higher the utility. If you optimize individual benefits only, you miss the maximum aggregate utility possible.
All true. But what does all that have to do with a government? Free market can ensure all that better.[/B]
You were making the classic mistake that anarchists make by commenting about my example on the benefits of government sponsored education to reduce illiteracy. Anarchists consider that the by creating individual optimality, then system optimality is achieved. This is not true.
In the above example of the telephone and communication...lets make that directly comparable to reading. If I am the only person that can read, then the utility for anything requiring reading is nearly nill. The more people that can read, the greater the overall utility to the system and the production curve is pushed out closer to the PPC frontier.
Originally posted by miko2d
crowMAW: I don't think the Austrian school considers the concept of externalities as bogus at all. Rothbard clearly indicates they exist.
true, he uses the term "externality" to describe several types phenomena - becasue it is a common term. About some of them nothing should be done economically. The others may be explained without that term and he uses it to facilitate understanding. I am not sure itw as worth in all cases. Mises is more strict with his terminology. It takes getting used to but then avoids confusions.
[/B]
He doesn't just use the term...he describes the concept specifically as it relates to air pollution. Air pollution specifically, and pollution or enviornmental impacts to development in general have always been one of the most pernicious problems for anarchists to resolve. See my smoking example from the previous post.
But here is another example: I own 100 acres of land and in the middle surrounded by trees is a 10 acre plot where I have a little factory. I produce waste that I release into the air and into the ground water. The waste is colorless and odorless but is a carcinogen. Several of my neighbors have gotten cancer due to my pollution production costing them hundreds of thousands of dollars to treat. Some want to inspect my property to see if I am the source of the carcinogen. I refuse because it is in my best interest for me to act optimally for me, which is to hide the fact that I have shoved a cost of my production off onto someone else. What in an anarchist society would resolve this situation? It is my property...I can allow whom ever I choose to set foot upon it. Would the neighbors be allowed to ban together with guns and coerce me to allow them on my property? How would von Mises solve this?
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Originally posted by miko2d
In my word any number of people can band together to own and manage common property on any principles they choose - democratic one-man-one-vote, shareholding, or entrust it to a leader.
One comment on this...
I think that is what exists in any country where freedom to exit the country is guranteed.
In the US, we as a people have banded together to manage common property based on our own principles (the US Constitution).
Just for argument sake, consider this Miko...the government is not extorting anything from you. You freely choose to join the society called the USA (a group of 300 million people banded together to manage common property based on our principles). By freely joining, you have made a value judgement that the benefits of living in the USA outweigh the costs of conforming to the management decisions of the group.
I personally hate that argument...primarily because I know that it is true. I can choose to leave and hope to find a society that more closely conforms to my own desires. So far the location of Galt's Gulch eludes me. However, I've made the choice to forgo leaving because of the benefits that I do enjoy in the US.
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Originally posted by miko2d
As for market failure, under free market there will always be failures bacause loss is just the other side of the profit - an informational process that transfers ownership to entrepreneurs who correctly predict public needs.
Do you think the invisible hand is working in markets controlled by monopolies or cartels?
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Wow, I enjoy a few nights of fun after finals, come back and this thing has gotten complicated. I'm really enjoying the lesson in economics here, but I have one question, is human nature being figured into all of this? I see all these theroies and things, but don't see much in the way of the effects of greed, jealousy, and laziness worked in? Laziness would take care of itself I'm assuming, but what about greed and jealousy? What would greed and jealousy do to the free market? Couldn't it in theory, cause people to be bought off, and eventually turn into the corrupt society most of the world enjoys now?
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"Greed -- for lack of a better word -- is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all of its forms -- greed for life, for money, for love, knowledge -- has marked the upward surge of mankind. And Greed -- you mark my words -- will not only save Teldar Paper but that other malfunctioning corporation called the USA."
--Gordon Gecko
:aok
Munkii...economics is nothing more than the study of the behavior and psychology of buying and selling. Economics is the study of human nature.
Laziness, or the problem of the free rider, is a potential major issue with any anarchistic society. It is unlikely to "work out". Each individual being allowed to behave in their best interest only leads to an opportunity for some costs to not be borne by their producer. Many anarchists believe that everyone will play nice and not cheat in a pure "free market" out of some altruistic value system...unfortunately, this is not the case. One of the biggest proponents of a pure "free market" was Ayn Rand (you should pick up one of her books...many like The Fountinehead best, but I prefer Atlas Shrugged). She wrote many books and essays on the "virtue of selfishness". In a pure "free market" society, altruism is for those who are willing to lose assets.
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first, I have to applogise for long periods of silence which will probably get worse for a while. My second baby is 4 weeks old and the concept of day and night ceased to be meaningless to me.
That's probably a worst time to get into complex discussion. I'd love to write a serious essay on nutrition as well as on the errors of J M Keynes and a few more fundamental issues - and some day I probably will.
crowMAW: I am arguing that a legitimate role for government is to reduce transaction costs. You've given examples where government has exceeded that legitimate role.
There is a legitimate disctinction. But lowering transaction costs has costs as well - costs that have to be coercively confiscated from private projects. The government cannot make an economic calculation to check whether the benefits exceed costs - or even if the benefits exceed drawbacks.
There may be plenty people who would not want that lighthouse if it was free.
The nice rural retreat estate may lose it's value when a port city pops up next ot once-treacherous waters, followed by uncouth sailors, prostitutes, longshoremen unions and finally black death imported along with exotic goods...
You said that transaction costs should not be considered externalities. I gave you a clear example of where they can be.
Either I do not entirely understand you or I am out of my depth on the issue of externalities, so let's table this question.
Congratulations for realizing that there is at least one legitimate role for government.
Well, I was using the terms loosely - I ment "the accreditation/sertification institution". One could call it a "government" or a "governing body", but without power of coercion it would hardly be considered a Government. The Underwriting Laboratories, Orthodox Union or Consumer Union would be surprised if anyone called them "government".
The hard question now Miko is for you to define a complete list of the legitimate roles that government should play. We'll make a minarchist of you yet.
:) Protection of private property and persons from aggression and enforcement of contracts of course.
I do provisionally classify myself as a minarchist - there seem to be no consensus whether a minarchist government is possible without it growing into totalitarian state or devolving into anarcho-capitalist society.
I think you are making a pretty big leap by thinking that my arguments for a government that can legitimately act as an enabler of reduced transaction costs is also an argument for a government that has a draft!
Once you give the monopoly on violence to someone and a loosely defined mandate, you may not be able to control where it ends up.
The curent woes of this country are apparently based on misreading of the "welfare" and "interstate commerce". "Reducing transaction costs" is an even fuzzier goal. A ruler could justify putting all the Earth under his rule and instituting a severe eugenics program as such.
I am arguing that the concept of a government sponsored postal service to ensure equal access helps reduce transaction costs and is therefore a legitimate function of government.
I am arguing the opposite. The government provision of roads, communications and natural disaster relief to some people at the cost of other people induces people to settle where they would not settle under the free market. everybody's transaction costs are rising.
Ever watched the documentary on the history of New York City? the government destroyed neighbourhoods, built roads and subcidised mortgages for suburban houses at the expense of taxpayers. So obviously more people settled in suburbs than would otherwise - while living in the cities was the natural cost-reducing trend.
That is a pretty big assumption. Would you ever consider buying a house where you don't actually own the land under it...you own the structure, but not the land.
As I've said - I can envision a scenario but it was too complex to describe here. I can imagine a combination of contract terms and price that would make sense or a buyer.
But to your example...are you suggesting that in a pure "free market" that a land purchaser would have to negotiate a perpetual access contract with every road owner to which that property's driveway connects it to any destination within the road network?
No, only to his local road, with understanding that it has such a contract with a higher-level road, etc. Kind of like internet.
Each transition would require a toll to be paid to the owner. Suddenly what was a 5-6 hour trip is now increased dependent on the number of toll booths the individual owners decide to build.
What a coincidence, here is a yesterday's article that can spare me some typing Abolishing Government Improves the Roads (http://www.lewrockwell.com/edmonds/edmonds164.html)
If I am the only person that can read, then the utility for anything requiring reading is nearly nill.
Err... Many societies had high degrees of literacy without goverment programs. As well the telephone and other comminications arose on a free market and then got hijacket by governments.
Imagine, you are living your life prety happy and content, then someone comes up with a marketable invention - that improves lifes and makes stuff cheaper and better without coercion. All of a sudden a thug shows up on your door saying that you must fork over some money becasue the life has improved. Kind of silly, isn't it? If the invention was so good for you, you would have no problem borrowing money to aquire it. It would be a wise move for you and the investor and woudl not require coersion.
He doesn't just use the term...he describes the concept specifically as it relates to air pollution. Air pollution specifically, and pollution or enviornmental impacts to development in general have always been one of the most pernicious problems for anarchists to resolve.
I guess on obviously negative emissions where individual action was unfeasable, some common definition of acceptable pollution levels could have been adopted by society and enforced at the source. I do not see how it would conflict with a minarchist state's protection of property mandate.
What in an anarchist society would resolve this situation?
They could prove the pollution comes from your ground water, but I see your point.
Many situations can arise that do not require actual harm but just the risk of such - fire hazard, nuclear accident, etc., so some kind of inspection and compliance with some kind of standard would be worked out.
I imagine anarchists would want no government but knowing that a major disaster would change people's minds enough to bring in a big government, everybody would be interested in a reasonable compromise.
crowMAW: In the US, we as a people have banded together to manage common property based on our own principles (the US Constitution).
The Constitition was opposed by many of the signers of the Declaration of Independence, did not represent all the people and those whom it represented are all dead. Some founding fathers suggested re-adopting a constitution at least once per generation, I do not remember which.
consider this Miko...the government is not extorting anything from you. You freely choose to join the society called the USA. By freely joining, you have made a value judgement that the benefits of living in the USA outweigh the costs of conforming to the management decisions of the group.
I am aware of that - and I believe I made a good choice at the time. But it hardly matters to a theoretical discussion. People are known to prefer one master to another, but that does not make them free.
Anyway, if the USA is the country with most liberty, for all its flaws, that's all the more reasons to preserve it that way or even reverse the downfall.
Montezuma: Do you think the invisible hand is working in markets controlled by monopolies or cartels?
Yes. Natural monopolies and cartels are unstable and short-lived. The "monopolies and cartels" that we hear about that were all created and maintained through the power of government - including local utilities.
Same as the business cycle that was blamed on the market but is really the product of state-sanctioned fractional reserve system.
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Munkii: but I have one question, is human nature being figured into all of this? I see all these theroies and things, but don't see much in the way of the effects of greed, jealousy, and laziness worked in?
Absolutely. The premise is that people make choices and act to change their sircumstances for those they perceive as more desirable. So all people are presumed to act selfishly.
“It is not from the be-nevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard totheir own interest.”– Adam Smith[/i]
Obviously some people may engage in violence and theft but that would still be as illegal.
The only way to aquire wealth/power is by providing people with goods/services that they value more than what they give in return. We can be sure that for every dollar Bill Gates got, the customer received something that he valued more than that dollar.
That would be the only way - economic, non-coercive way.
There would not be a political way where a person could aquire political power and coerce other people in surrendering their property or lives.
crowMAW: Munkii...economics is nothing more than the study of the behavior and psychology of buying and selling. Economics is the study of human nature.
Not even close. The right economics is a study about means, not the ends.
Economics assumes that people have ends and makes propositions on the best ways to achieve those ends.
Why the ends are selected and how is left to other sciences, as well as the moral and ethical implications. Economics is a science that tells what is, not what aught to be or what we should want or why do we want something.
For instance Mises distinguishes Praxeology - the science of human action, which applies in general, even to single people on uninhabited islands and Catallactics - the science concentrating on market exchange.
Of course what the modern college courses call "economics" may be different - in may be an ungodly jumble of psychology, ethics and other stuff.
miko
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Originally posted by miko2d
Of course what the modern college courses call "economics" may be different - in may be an ungodly jumble of psychology, ethics and other stuff.
I'll let you know in a few weeks. I have Macro-Economics next semester, with a follow up summer course of Micro-Economics. Infact my whole degree plan is at http://www.ou.edu/biz if anyone has any suggestions on electives go ahead and post 'em :D
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Originally posted by miko2d
I'd love to write a serious essay on nutrition
Nutrition?? :confused: You will have me on that one for sure. LOL
Originally posted by miko2d
crowMAW: I am arguing that a legitimate role for government is to reduce transaction costs. You've given examples where government has exceeded that legitimate role.
There is a legitimate disctinction. But lowering transaction costs has costs as well - costs that have to be coercively confiscated from private projects. The government cannot make an economic calculation to check whether the benefits exceed costs - or even if the benefits exceed drawbacks.
There may be plenty people who would not want that lighthouse if it was free. The nice rural retreat estate may lose it's value when a port city pops up next ot once-treacherous waters,
I was wondering how long it would take you to bring Bastiat into this.
A government that moves without consideration and counsel on the cost-benefit of an expenditure is operating outside its legitimate role.
In the above example, I cannot think of a project (public or private) of the magnitude of a port that would not have included several opportunities for adjacent land owners to provide input on the impact they feel they would endure.
BUT, in a pure "free market" society, why would the adjacent land owners have the right to object to the development of a port anyway? So long as there is no direct trespass on the landowners property, what the port brings should be of no consequence. Plus, our good friend Coase would say...bring on the port! The total cost to compensate the landowner's loss of property value and the building of the lighthouse would be negligible compared to the added utility of the port.
There are certainly examples where politicians have successfully brought home the bacon and had expenditures budgeted who's cost outweighed their benefit...and thank goodness for John Stossel, CNN, 20/20, Dateline and TaxWatch to help us constituents identify these expenditures. But for the most part, governments in the US create rather conservative criteria for the identification of projects ripe for expenditure. Stop signs are placed where traffic warrants the expenditure...and stop signs are upgraded to traffic lights similarly. If lighthouses were built without criteria for need, then you would see government sponsored lighthouses in Wyoming.
I am not arguing that roads should be built willy-nilly...there should not be roads that go nowhere with the thought of "if we build it they will come." Roads connect communities.
Originally posted by miko2d
Well, I was using the terms loosely - I ment "the
accreditation/sertification institution". One could call it a "government" or a "governing body", but without power of coercion it would hardly be considered a Government. The Underwriting Laboratories, Orthodox Union or Consumer Union would be surprised if anyone called them "government".
Unfortunately, without a coercive element of some kind, the enforcement of any standard is moot. Whether that coercion is threat of pulling the UL label off of a product if it does not conform to the standards that UL sets...or if it is the threat of civil suits and possible jail for fraud if a US seller indicates his product weighs 1lb, but really only weighs 15oz.
Originally posted by miko2d
Protection of private property and persons from aggression and enforcement of contracts of course.
To me "aggression" denotes intent...what is your definition. To enforce contracts, would a government sponsored judicial system be used?
Originally posted by miko2d Once you give the monopoly on violence to someone and a loosely defined mandate, you may not be able to control where it ends up.
I definitely agree with that. There is always the opportunity and incentive for any group to cheat others...including government. I think that most people hope that the more participation that individuals have in government the more that threat is reduced.
That may be a pipe dream, but at least there is the opportunity for individuals to control where it ends up.
The alternative is the wild west...which is great for individualists but hard on longevity.
Originally posted by miko2d
The government provision of roads, communications and natural disaster relief to some people at the cost of other people induces people to settle where they would not settle under the free market. everybody's transaction costs are rising.
Well, I agree as far as disaster relief. Disaster relief is another example of individuals who refuse to internalize the costs of their decisions...in this case their decision to live in a risk area and not carry adequate insurance.
As far as communication is concerned...one type of transaction cost is search & information costs. It is appropriate for government to foster an environment that reduces those costs. However, there may be several alternatives as to how that is achieved. In the case of the internet, there was direct investment from governmental agents (public universities and defense agencies). In the absence of a comprehensive postal service separate from the British Crown, the colonies who would form the USA created a postal service.
Originally posted by miko2d
Ever watched the documentary on the history of New York City?
If there was not a need for the roads, ie connecting two existing communities, then the goal was not to reduce transaction costs and was not a legitimate action.
Originally posted by miko2d
But to your example...are you suggesting that in a pure "free market" that a land purchaser would have to negotiate a perpetual access contract with every road owner to which that property's driveway connects it to any destination within the road network?
No, only to his local road, with understanding that it has such a contract with a higher-level road, etc. Kind of like internet.
That does not prohibit a non-local road owner from denying access. Go back to my example regarding the two competing companies. Each may have local access node to the road network, but that does not mean that a critical path along the network from one node to another cannot be denied. Without guaranteed access to the critical path along the network, costs increase for moving from one node to another.
Originally posted by miko2d
Each transition would require a toll to be paid to the owner.
What a coincidence, here is a yesterday's article that can spare me some typing
Interesting article. Here is the mistake:
"remember that market firms, who must please customers to stay in business, provide everything better and less expensively than government"
This is incorrect as an absolute...and I can give you examples where government has provided a service more efficiently than a private contractor. BUT, for this example of privatizing roadways...here are the problems that are glossed over in the article:
1. Costs for travelers on private roads would increase dramatically as they have to pay for the new electronic payment devices to be installed in the roads and in their cars. Just as a guess, what do you think the cost per mile would be for the type of system he is suggesting? Even if road owners used an EZ Pass style toll booth...you have substantial added costs by having to build and maintain those booths. Under public management, the those unnecessary expenditures can be used to maintain the road.
2. He says that road owners would be held responsible in civil torts for the pollution emissions of vehicles using its road. HA! Road owners would simply argue that they were not the ones responsible for the pollution...rather it is the car owners who should be sued. Further, he mentions inspection stickers...administrated by who and to what standard? Some states don't have inspections, so they cannot be piggy backed on that without increasing the cost to road users in those areas. As the complexity increases, the costs increase.
3. He assumes that all costs for the road should be borne by the users. A road network however provides benefits to those who may not directly use it. In reality, the fuel tax makes up a large portion of the funds used to build and maintain roads, but not all. And those non-fuel tax generated general revenue funds used to build and maintain roads ensures that there are as few free riders as possible.
4. Lastly, this assumes that private roads cannot be built. If it were truly a profitable enterprise then there would be a lot more private toll roads since there is nothing stopping them from being built.
Originally posted by miko2d
Err... Many societies had high degrees of literacy without goverment programs.
I'd like to hear about them.
Originally posted by miko2d
I guess on obviously negative emissions where individual action was unfeasable, some common definition of acceptable pollution levels could have been adopted by society and enforced at the source. I do not see how it would conflict with a minarchist state's protection of property mandate.
I doesn't conflict with a minarchist state. It does conflict with an anarchist state. But this is my point...everything you have stated in your posts on the virtues of a pure "free market" society leads me to believe that you lean towards an anarchist society. There is a need for government, and in its nature it must have some coercive power in order fund itself and to enforce the laws/regulations that the constituents who empower the government see fit to have legislated.
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Originally posted by miko2d
crowMAW: Munkii...economics is nothing more than the study of the behavior and psychology of buying and selling. Economics is the study of human nature.
Not even close. The right economics is a study about means, not the ends. Economics assumes that people have ends and makes propositions on the best ways to achieve those ends. Why the ends are selected and how is left to other sciences, as well as the moral and ethical implications. Economics is a science that tells what is, not what aught to be or what we should want or why do we want something.
For instance Mises distinguishes Praxeology - the science of human action, which applies in general, even to single people on uninhabited islands and Catallactics - the science concentrating on market exchange.
Of course what the modern college courses call "economics" may be different - in may be an ungodly jumble of psychology, ethics and other stuff.
I'm not sure what they teach now...I last taught college economics back in 1992. The classic definition of economics is the study of resource allocation given scarcity...I always added to that text book definition by saying that it is the study of human behavior in an environment of resource scarcity. Myself and many current economists believe that an understanding of why we behave the way we do in an environment of resource scarcity is as important as understanding the outcomes of those behaviors.
But, your comment is not consistent with the Austrian school and is more closely related to the Chicago Gang. Not that I disagree with Uncle Miltie's ideas...econometrics is an excellent tool to help economists test correlative theories.
Human emotions play a part in "what is"...sometimes the economic decisions humans make do not seem rational (a common assumption for econometric modeling), however I think that it is more the case that an appropriate value was not attributed to an emotion that played a role in the seemingly irrational decision and/or that there was imperfect information used in the decision making process. Menger, the father of the Austrian school, realized that there was more to economics than the numbers when he re-discovered praxology (which means the study of human conduct) and began to apply it to economics. Von Mises, Hayak, and Rothbard all used praxology in application to economics...they wanted to show that economic outcomes can be logically deduced based on human behavioral axioms. They were trying to show that economics is not a science per se, in that it cannot be adequately mathematically modeled.
Some of the more recent work in the area has been done by Daniel Kahnenman and Amos Tversky...Kahnenman won the Nobel Prize for Economics last year for his work in behavioral finance.
Personally, I think that there needs to be a melding of the Austrian School's praxology and the Chicago Gang's econometrics in order to build a complete understanding of economics. Sort of like having an understanding of both micro and macro...they are complementary not mutually exclusive. Oddly, it seems that proponents of the two schools like to argue that one is exclusively better than the other.
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crowMAW: I was wondering how long it would take you to bring Bastiat into this.
A government that moves without consideration and counsel on the cost-benefit of an expenditure is operating outside its legitimate role.
The government consisting of saints would not be able to do the cost-benefit analysis. That is why socialism is impossible, not because the rulers were corrupt or stupid. Any decision of such government would have been arbitrary in economic sense.
Only the market system of prices and profit and loss allows to perform economic calculation.
BUT, in a pure "free market" society, why would the adjacent land owners have the right to object to the development of a port anyway?
In a free market society whatever problems they suffered would have been the result of the natural competition, without coercion. Someone would have outbid them for the land and resources because it woudl ahve been profitable. We would know that in total, the wealth of society woudl have increased.
In your scenario, the owners would have their wealth confiscated as taxes in order to pay for something that would have hurt them and possibly not generated any net profit for society.
Unfortunately, without a coercive element of some kind, the enforcement of any standard is moot. Whether that coercion is threat of pulling the UL label off of a product if it does not conform to the standards that UL sets...or if it is the threat of civil suits and possible jail for fraud
Competition. A new company's products would naturally be weighted, tested and avoided by some - unless they were certified by an established accreditation institution.
An established company's repuration would so reduce it's transaction costs that it would be unprofitable to risk that reputation.
It is no accident that the family-run businesses based on reputation are less prominent in our times. The misplaced trust in government oversight made reputation less of a competitive advantage.
Pulling a label for non-compliance is not coersion.
Civil suit is using the coersion of the state, but even in a stateless society fraud would not be widespread. People would just be more carefull around unknown vendors and there will be discounts untill the reputation is established.
Plenty of products that are functional today are not as good as other products. It's up to the customer to decide the price/risk/quality tradeoff, not an arbitrary vote by some comittee.
Check this article You Do the Math (http://www.lewrockwell.com/edmonds/edmonds122.html) . Here some excrepts:
If someone markets a $1,000 VCR that provides crappy picture and sound quality, and has no convenience features, nobody buys it, and the manufacturer stops making it. If someone were to advertise falsely about a given VCR’s quality and features, the market would notice it right away, and it would disappear. Stores like Circuit City, where you can operate products before buying them, already assure that manufacturers who make fraudulent claims don’t survive. Indeed, merely knowing that testing was possible would prevent most hard-core fraud perpetrators from even trying: Who would invest millions on a project he knows won’t succeed? Truth-in-advertising legislation is meant to combat fraudulent behavior, but such legislation and its enforcement are always a step behind the market. The market self-regulates just fine, more perfectly as it becomes freer. Heck, child-labor legislation didn’t come about until families were able to survive economically without using their children as employees, until the populace decided on its own that children should be occupied with tasks other than labor for profit. Legislation stayed a step behind the market, as always.
Who built roads in our earliest American settlements? Who provided electricity when we first became able to harness it? Who developed a medium of exchange that served also as a store of value (money)? The market, that’s who.
"The market" is you and me, buying and selling what we want. The market developed the original instances of everything: Communal defense, crime prevention, insurance, infrastructure – everything. The market works without supervision because every participant monitors every other participant. If you were to make a purchase in the Wild West in 1840, you would have inspected your goods carefully before tendering payment. When you tendered payment, the seller would inspect your money carefully. You would likely have paid in coin, and if it were gold, the merchant would actually bite it, just as in the old western movies, to make sure it was malleable and therefore genuine. While the seller was selling you the bag of flour, you were selling him your money. Whether you are acting as a buyer or seller (all of us not on welfare act as both), your actions are being inspected by the other party every time. When markets are free enough for us to do that – that is, we don’t have government-printed fiat money, we don’t have government inspection of beef – we are free to provide the ultimate enforcement of the requirement of trust, every time we act. The ultimate enforcement is non-participation – not buying the product. The merchant who sells inferior goods will starve.[/i]
While a corporate executive must please customers or lose his job, the government bureaucrat can get away with bilking customers for generations, and be rewarded with increased power and money. When a corporate project fails, people lose jobs because less money comes into the corporation. When a government program fails, the executives in charge simply tax you and me more.
Consider: If a government program were to succeed, often this would mean the extinction of jobs for government employees. If we actually won the War on Drugs, every agent in the DEA would be out of work. Thousands of government jobs would be lost if we won the War on Poverty. I’ll give you three guesses as to whether, in any of our lifetimes, the government will announce that we have won either of these wars, or the War on Terrorism. Hundreds of thousands of government employees – the ones waging the wars – cannot allow us to win: They have families to support.
Self-interest is creative when operating in a market competition environment, destructive otherwise.
CONTINUED...
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To me "aggression" denotes intent...what is your definition. To enforce contracts, would a government sponsored judicial system be used?
Someone violates/damages your property without your permission and is unwilling to compensate you for the damage - that's an agression, whether the original act was intentional or accidental. The government would help you collect restitution.
Same with a contract violation.
In case of intentional agression, the person would became an outlaw because any rights a person would have in such society would be granted in return for recognition of other's symmetric rights. His property and life (if he commited an agresssion against a person) would not be protected. Anyone, not just the government-designated enforcers, would be able to hunt him down.
The alternative is the wild west...which is great for individualists but hard on longevity.
That's just propaganda. I saw the stats of the Wild West in comparison with modern crime stats.
Outside the formal duels or duel-like engagements - where gunmen risked their lives voluntarily in confrontation with minimal danger to civilians - there was incredibly low rates of violent and other crime. Women would walk at night unmolested, murder and theft was practically unheard of.
That does not prohibit a non-local road owner from denying access. Go back to my example regarding the two competing companies.
There are plenty of areas that are less accessible, that can lose access seasonally, etc. That is not the reason to build tunnels and bridges to them - only the reason for people not to settle there unless their provate benefit exceeds the cost of inconvenience and risk. The property values would reflect such accesibility and risk conditions.
It does not matter of the owner can close the road or God can close the faucet so that no rain would fall for a few years. It's the same category of risk. A guaranteed access is a valuable economic good. An owner would enter into contractual obligation mandatory to the future owners for the market price of such obligation.
We have such contracts right now - easments, title restrictions, etc.
and I can give you examples where government has provided a service more efficiently than a private contractor.
I bet you can't - becasue there is no way for you or anyone short of God to econimically calculate all the side-effects and tradeoffs.
they have to pay for the new electronic payment devices to be installed in the roads and in their cars.
But the roads would only be built where they make economic sense and not waste society's resources. Metered access would make the road utilisation more efficient, so more resources would be saved - and invested elsewhere. The human settlement patterns would not become less effective due to subcidised access. Huge savings right there.
You would pay for a device on your car but you would not pay for a 70-miles long driveway for some rich man's estate on a picturesque remote corner of Long Island. Let him pay for it.
He says that road owners would be held responsible in civil torts for the pollution emissions of vehicles using its road. HA! Road owners would simply argue that they were not the ones responsible for the pollution...rather it is the car owners who should be sued.
No. People that you have invited onto your property are your responcibility. If they shoot at the neighbours, the neighbours cannot possibly get to them without entering your domain, for which they would need your permission.
He assumes that all costs for the road should be borne by the users. A road network however provides benefits to those who may not directly use it.
So they will pay for indirect use indirectly. If you benefit because of your location, your property value will raise accordingly, true.
And since the location becomes more desirable and people richer, the price for the road may be raised and the cost of their goods delivered over the road will increase. So you will pay for the road as a part of your groseries. Or by charging less from your business customers to compansate for the toll price they pay to get to you.
Lastly, this assumes that private roads cannot be built. If it were truly a profitable enterprise then there would be a lot more private toll roads since there is nothing stopping them from being built.
??? They can and they are. Every new development contains a private - community owned - road. I bet an owner could build a shortcut through his property from the inside of such development to the highway if it were profitable.
Since the taxpayers have to pay for a government road anyway, they have less insentive to use private roads, that's why it's hard to compete.
Why would a contractor build a private road if he can persuade a local legislature to hire him to build it at taxpayers' expense? He would incure no risk that it would not be profitable.
Remember, most government interventions only make sence in light of the previous intervention - like providing welfare for those unemloyed due to labor law preventing them from work. Gov't would build roads bacause private companies would not do that - because of government actiona. So replacing just one element of the socialist system with a free market would surely bring absurd results. But in a free market the situation would not arise at all.
Like there would not be a need to discuss the need for inflation to curb unemployment because under free market capitalism there cannot be (persistent) unempleyment.
I'd like to hear about them.
US, Ancient Greece, anything in betweem where a lot of people were literate without a government program. Literacy spread when it become profitable to be able to read, not the other way around.
Menger, the father of the Austrian school, realized that there was more to economics than the numbers when he re-discovered praxology
Actually, he (and Mises) discovered that there were no numbers at all to economics. The human valuation is ordinal, not cardinal. We rank our preferences but cannot estimate them numerically.
They were trying to show that economics is not a science per se, in that it cannot be adequately mathematically modeled.
No, they claim that economics/praxeology is a valid theortical science in which mathematical methods are not applicable.
It's the Compte's and Ecole Politechnique gang's fallacy that only that is science that uses mathematics.
There are no constants in human behavior, hence no formulas are possible, only logical statements.
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On roads, consider this example - the development of railroads. England was covered by privately-built profitable railroads in no time, so was the Europe.
The few resulting huge English railway-building companies faced bancrupcy for lack of projects and protectionist foreign governments did not let them in in favor of local politically-connected businesses.
So the english companies pushed the Queens government to build railways in India - at the expense of India's treasury that was separate from England. The politicians were easily sold on such a grand scheme, not realising that England built the railroads because it was rich, ratehr than got rich because it built the railroads.
The roads were built not where business considerations required but where bureaucrats and andministrators believed they should be built. The cost overruns were humongous.
Not only the Indian economyw as not ready to make profitable use of the ralroads, the taxes that indian peasants had to pay to recoup the costs and operating expenses delayed the capital accumulation in India for decades and caused all sorts of political implications that are felt even now.
If Robinson Crusoe started building a trawler instead of a small boat for fishing, he would have died from hunger. If he was forced to pay for the constriction of trawler from his limited resources, his progress towards wealth would have been much slower than otherwise. Market allocates resources towards the most urgent uses, not the government.
miko
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crowMAW: they are complementary not mutually exclusive... Oddly, it seems that proponents of the two schools like to argue that one is exclusively better than the other.
Chicago school believes that government must confiscate a portion of people's property every year by the way of monetary inflation of fiat currency.
Austrians believe that free market should decide what acts as money - with commodity standard most likely developing as monetary system.
Austrians believe that fall in prices is the natural result of the free market development and should not be tinkered with. CS demands artificial inflation - with all ensuing ill-effects on temporal structure of capital, causing the business cycle phenomena, etc.
What could be more contradictory than that?
miko
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Originally posted by miko2d
The government consisting of saints would not be able to do the cost-benefit analysis.
You are right...we do not know what we do not know (I feel like Donald Rumsfeld...unknown unknowns). And that is why there should be limits to government expenditures. Those expenditures should be limited to those which support the legitimate role that government should play. And even for those expenditures a cost-benefit analysis should be done based on the known costs.
Originally posted by miko2d
Unfortunately, without a coercive element of some kind, the enforcement of any standard is moot. Whether that coercion is threat of pulling the UL label off of a product if it does not conform to the standards that UL sets...or if it is the threat of civil suits and possible jail for fraud
Competition. A new company's products would naturally be weighted, tested and avoided by some - unless they were certified by an established accreditation institution.
An established company's repuration would so reduce it's transaction costs that it would be unprofitable to risk that reputation.
Pulling a label for non-compliance is not coersion.
The mechanism by which the coersion takes place is different but the effect is the same...coersion. UL sets standards...the established institution must meet those standards or UL takes away its label, which leads to a loss of customers and loss of revenue. That IS coersion.
Originally posted by miko2d
It is no accident that the family-run businesses based on reputation are less prominent in our times. The misplaced trust in government oversight made reputation less of a competitive advantage.
Why do you think that government regulation and oversight agencies exist? Every company would not have to submit to an accreditation organization in order to sell a product. If there is only one accreditation organization for a market of producers, then the "free market" can work since customers will just avoid those products without the accreditation sticker. BUT, there is nothing to keep many accreditation organizations from springing up. So lets say there 50 accreditation organizations for gasoline all with different standards. I certainly don't have the expertise in chemistry to know which standards meet my needs/wants. If I were to spend time to properly educate myself on that subject to the required level I would consider that a cost. If I had to do that for every product I buy, the total costs would be huge. Plus, companies would be free to "create" their own accreditation organization...how independent would their tests to standards be for their parent companies?
I would have to choose between "HIGH" grade gasoline from Texico and "BEST" grade from Chevron and "A+" grade from BP. I know my car needs 92+ octane...would I need to buy an octane tester to carry in my car? Again...complexity increases...costs increase.
Instead we have a governmental agents who have the technical knowledge that I lack to test gasoline for a standard set grade and punish those who commit fraud.
Another way to look at regulatory agencies is to consider that they employ the effeciencies of specialization in order to collect information on products. That way everyone does not need to become experts in determining if the gasoline is good, and their beef is safe, and that their water is clean, and that their insurance company or bank is solvent...etc.
Originally posted by miko2d
but even in a stateless society fraud would not be widespread.
ROTFLOL :rofl
Time to take off the rose colored glasses Miko. You are sounding like a communist who says that everyone will work as hard as they are able. People WILL cheat if they think they won't be caught or if the consequences are insignificant. The human race is not as altruistic as you and Mr. Marx think it should be.
Originally posted by miko2d
Check this article
Again...both of you are missing the point of standards and legislation like truth-in-advertising. They give buyers who have made a purchase decision based on information that was made perposely imperfect by the seller the legal standing to recover damages. Without them...it is purely caveat emptor. I say that pure caveat emptor is suboptimal for maximizing an economic system since it fosters high transaction costs.
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Originally posted by miko2d
whether the original act was intentional or accidental. The government would help you collect restitution.
I agree with that definition.
Originally posted by miko2d
Anyone, not just the government-designated enforcers, would be able to hunt him down.
We can do that now...it is called citizens arrest. The only problem with a citizens arrest is that the citizen had better be correct when detaining a suspected criminal otherwise the citizen has commited the crime of false imprisonment or kidnapping.
Originally posted by miko2d
The alternative is the wild west...which is great for individualists but hard on longevity.
That's just propaganda. I saw the stats of the Wild West in comparison with modern crime stats.
You are taking the phrase too literally...the "wild west" is an allegory.
Originally posted by miko2d
That does not prohibit a non-local road owner from denying access. Go back to my example regarding the two competing companies.
There are plenty of areas that are less accessible, that can lose access seasonally, etc.
[/B]
We are not talking about seasonal outages. The example goes to the point that one of two competing companies could aquire a necessary road in order to deny a competitor access to market.
Originally posted by miko2d
A guaranteed access is a valuable economic good. An owner would enter into contractual obligation mandatory to the future owners for the market price of such obligation.
The cost of entering into a contract for guaranteed access for every road on the network would be prohibitively high. You cannot simply obtain guaranteed access of one node to one branch on the network and expect access to all branches in a privatized road network.
Originally posted by miko2d
and I can give you examples where government has provided a service more efficiently than a private contractor.
I bet you can't
See my next post...
Originally posted by miko2d
they have to pay for the new electronic payment devices to be installed in the roads and in their cars.
But the roads would only be built where they make economic sense and not waste society's resources.
But the construction costs would be higher by having to have the electronic payment devices meaning that the economic threshold for building the road would be artificially higher.
Originally posted by miko2d
Metered access would make the road utilisation more efficient
Why?
Originally posted by miko2d
You would pay for a device on your car but you would not pay for a 70-miles long driveway for some rich man's estate on a picturesque remote corner of Long Island. Let him pay for it.
Government shoudl not be paying for that anyway.
Originally posted by miko2d
No. People that you have invited onto your property are your responcibility. If they shoot at the neighbours, the neighbours cannot possibly get to them without entering your domain, for which they would need your permission.
But you are saying that the person who is shooting the neighbors is not responsible? Do you realize how stupid that sounds. One of the tenents of libertarianism is personal responsibilty for one's actions. If I shoot at someone from my yard or as an invited guest in someone elses yard, I should be responsible for my actions. In the road owner example, if I drive a high polluting car, then those hurt by my actions should have recourse against me. I am not even sure that making the road owner's liability joint & several with the polluter is appropriate.
Originally posted by miko2d
Every new development contains a private - community owned - road.
Are these toll roads? We are talking toll roads here. Why don't these road owners charge a toll to non-residents to use their road?
Originally posted by miko2d
Since the taxpayers have to pay for a government road anyway, they have less insentive to use private roads, that's why it's hard to compete.
But if it was such a good thing they should be able to compete with public roads by keeping them better maintained or more beautiful or safer than public roads.
Originally posted by miko2d
Why would a contractor build a private road if he can persuade a local legislature to hire him to build it at taxpayers' expense? He would incure no risk that it would not be profitable.
There are certainly examples where that has happened. But if the road was not being constructed where there was a quantifiable need for it, then the legislature acted outside of its legitimate role.
Originally posted by miko2d
US, Ancient Greece, anything in betweem where a lot of people were literate without a government program.
But you said there were examples of societies where there were high literacy rates without government intervention. What was the literacy rate in Ancient Greece?
Since there really hasn't been a time where the US did not have some form of public schools operating, I am not sure how you can make the claim that the US is an example.
Originally posted by miko2d
They were trying to show that economics is not a science per se, in that it cannot be adequately mathematically modeled.
No, they claim that economics/praxeology is a valid theortical science in which mathematical methods are not applicable.
Umm...isn't that what I said?
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crowMAW: The mechanism by which the coersion takes place is different but the effect is the same...coersion. UL sets standards...the established institution must meet those standards or UL takes away its label, which leads to a loss of customers and loss of revenue. That IS coersion.
It is not a valid argument technique to redefine the opponent's terms and then pretend that everything he said used the new meaning.
If you are so set on calling any exertion of influence "coercion" - fine. I can't force you to do otherwise. But I can exert and influence on you - coerce you in your terms - by threatening to withdraw from an argument to either stop using a term "coersion" for "exerting influence" or at least tell me what word I should use for exerting influence that does not involve application or threat of violence.
There is a big difference between "I will not cooperate with you and you will lose the benefits of my help" and "I will kill you and take away your property". That is a difference between liberty and slavery - not a minor nuance.
If UL decides not to coopeate with a company, it can go to UL's competitor or sell its products without UL label.
Why do you think that government regulation and oversight agencies exist?
Power grab by the politicians.
Every company would not have to submit to an accreditation organization in order to sell a product.
And the competiton - and the accrediation organisation itself - would quickly make that fact known.
If there is only one accreditation organization for a market of producers, then the "free market" can work since customers will just avoid those products without the accreditation sticker. BUT, there is nothing to keep many accreditation organizations from springing up.
There must be more - otherwise there would be no competition. Every department store is an accreditation company for all the goods it sells, every butique store as well.
I buy Brooks Brothers stuff for more money because I know they sell good stuff that I do not need to spend time researching. I go to other stores to buy crap cheap.
So lets say there 50 accreditation organizations for gasoline all with different standards.
That would be like what we have today with 50 state standards that make single market for gasoline impossible and so increase transaction costs.
I certainly don't have the expertise in chemistry to know which standards meet my needs/wants. If I were to spend time to properly educate myself on that subject to the required level I would consider that a cost.
So you would stay with a horse buggy rather than switch to a car? You would still have to know what kind of grass to feed your horse - some of it is poisonous.
If I had to do that for every product I buy, the total costs would be huge.
In many cases it does not pay to do research at all - the TV set that costs 5 hours of your labor is not worth investigating other than a qhuck search. For a car you read Consumer Reports. For a house you hire an inspection engineer for few hundred dollars - not relying on the government's occupancy permit.
Again...complexity increases...costs increase.
That is not what heppens in a free market - costs always decrease.
The cost increases and quality decreases only with a monopoly - like any government.
Instead we have a governmental agents who have the technical knowledge that I lack to test gasoline for a standard set grade and punish those who commit fraud.
Same considerations apply. How do you know if they are competent, up to date, not biased? They are not working for you like a private provider does - they tax you whether you like their service or not.
Another way to look at regulatory agencies is to consider that they employ the effeciencies of specialization in order to collect information on products.
No problem with that. Private competing ones do it even better than monopolies do.
That way everyone does not need to become experts in determining if the gasoline is good, and their beef is safe, and that their water is clean, and that their insurance company or bank is solvent...etc.
Or whether the otehr county poses a threat and your children have to be sacrificed.
Time to take off the rose colored glasses Miko. You are sounding like a communist who says that everyone will work as hard as they are able.
Sorry, but it is you who are sounding like an idealistic communist - saying the government employees will work as hard as they are able in some kind of utopia.
I am saying quite the opposite - people will work well under free market competition or they will starve or at least lose their business. Government subcidises failure - under free market failures are liquidated in favor of successfull businesses that best satisfy coustomers needs.
People WILL cheat if they think they won't be caught or if the consequences are insignificant. The human race is not as altruistic as you and Mr. Marx think it should be.
That's why we cannot rely on monopoly of government services where cheaters are bound to accumulate and operate unchecked. The competition is the best defence for cheaters - and prospect of starvation, of course.
Again...both of you are missing the point of standards and legislation like truth-in-advertising. They give buyers who have made a purchase decision based on information that was made perposely imperfect by the seller the legal standing to recover damages. Without them...it is purely caveat emptor.
Free market either had or could have had better solutions than all of those.
There is plenty of cheating going on despite of and using the powers of government - more than it ever would be possible under the free market.
The government standards cost tens of thousands of unnecessary deaths every year - cost that nobody in the government takes into account and that dying people are not allowed to take into account.
Government expenses and regulations bear no resemblance to the reality, only to the hype by special interests groups and monopolies that use government power to ward off the competition.
miko
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Originally posted by miko2d
and I can give you examples where government has provided a service more efficiently than a private contractor.
I bet you can't
Currently I am a VP in a large multinational corporation. But I did a stint in government where I worked as an industial engineer/operations research analyst trying to make government more effecient.
Here is an old news article of which I have direct knowledge:
http://www.polkonline.com/stories/123098/sta_collect.shtml (http://www.polkonline.com/stories/123098/sta_collect.shtml)
I was the evaluator for the success of this contract. I personally wrote the performance metrics and developed the cost model that was used. I based the metrics and cost model on the current performance of the State run child support collection process. All the numbers in that news story came from me.
The two private vendors had a two year contract to work these cases. They both gave up because they could not do the work as well as the State as cheaply as the State. They failed...miserably.
I have learned that it does not matter if the organization is government or private. There are certain attributes of an efficiently run organization...they can be found in the Baldrige Award and Sterling Award criteria. The Florida Department of Revenue, who administers the child support program, was a Sterling Award winner...the first government agency to be so honored.
Now, before you go running off about services not needed or some such hoo-ie...I think we both agree that individuals should take responsibility for their actions. This includes having a baby. And as such, both parents must take responsibility financially for the care of the child or give it up to someone who is willing to do so.
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Originally posted by miko2d
crowMAW: they are complementary not mutually exclusive... Oddly, it seems that proponents of the two schools like to argue that one is exclusively better than the other.
Chicago school believes that government must confiscate a portion of people's property every year by the way of monetary inflation of fiat currency.
Austrians believe that free market should decide what acts as money - with commodity standard most likely developing as monetary system.
Austrians believe that fall in prices is the natural result of the free market development and should not be tinkered with. CS demands artificial inflation - with all ensuing ill-effects on temporal structure of capital, causing the business cycle phenomena, etc.
What could be more contradictory than that?
miko
So which are you Miko? Make comments like you are a Chicago School proponent and now you say you are for the Austrian School.
See what I mean that there should be a melding of the two. Even you can't keep them straight.
Yes, there are some differences. And as I said earlier there are some advantages and disadvantages to a commodity standard.
But schools both advocate a more "free market" society.
BTW, where did Hayek go to teach after leaving the Austrian School to avoid WWII?
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crowMAW: So which are you Miko? Make comments like you are a Chicago School proponent and now you say you are for the Austrian School.
I'd say Austrian School - a student, not an adept by any means. l am all for Friedman's free-market rhetorics, but when it comes to actual economics, his is fallacious.
Yes, there are some differences. And as I said earlier there are some advantages and disadvantages to a commodity standard.
Slavery, socialism and collapse into barbarism rather than freedom and prosperity - I'd say there are some differences. :)
But schools both advocate a more "free market" society.
Republicans "advocate" small government. So what?
BTW, where did Hayek go to teach after leaving the Austrian School to avoid WWII?
London School of Economics?
Hayek had differences with Mises on some issues. I encountered them but I am not so well versed as to discuss those yet.
Regards,
miko