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Discussing with a Keynesian -broken window fallacy..need some help!

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Heather posted on Thu, Oct 20 2011 1:14 PM

I just fresh signed up with this site and happen to currently be in a discussion with a guy at work who i will call "Mark". I sent him an email containing Lew Rockwell's article on where he talks about the broken window fallacy. http://www.lewrockwell.com/rockwell/broken-window.html

The following is Mark's response to the article.

OK so I have read the article on the Broken Window Fallacy and here is my critique. I will agree that government spending after disasters does not act as an economic stimulus (via the money multiplier) to those that have suffered a true loss (like a flooded house.) However,  there is a whole segment of companies that do find a way to profit from a natural disaster without suffering an economic loss. Think Home Depot and the extra plywood sales they make. That is true economic stimulus via the money multiplier.  In other works the Broken Window Fallacy only explains one side of the economic equation. Those that suffered a loss.   

 Economic activity is just too complicated to be explained by simple theories and laws.

 Economic activity is so complicated that even the best minds in economics get it wrong all the time.

 Economics attempts to explain or predict human behavior and no one will  ever come up with a formula or theory that correctly predicts human behavior. Impossible! We are irrational creatures.   

If all economists were laid end to end, they would not reach a conclusion.

 

Like i mentioned earlier, i'm pretty new to all of this, but i really want to help enlighten this guy. How do i go about this one?

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z1235 replied on Sat, Mar 3 2012 12:50 PM

Fool on the Hill:
I believe people have the capacity to reason, to cooperate, and to make plans.

Agreed. That's why/how they "invented" the concept of property, in the first place. 

I do not buy into behaviorism and its insistence that the best way to achieve a goal is to reward desired behavior (e.g. abstinence).

Whose goals are you talking about being achieved? I know that without postponement of my own consumption (i.e. without my own saving) it would be almost impossible to achieve my goals. You worry about achieving yours. It is the concept of property (minding your own f-ing business, really) that allows each of us to implement whatever means we find would best achieve each of our own goals -- with minimal conflict. Pretty neat invention, if you ask me. 

 

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They're spending everything on subsistence, that means if they spent something on luxury, they would die and not have a future. Whereas someone's luxury expenses do not increase their ability to produce in the future.
argument by assertion. You claim that the impoverished necessarily spend more on consumption than production, when I ask you to support this you assert it again.
What is a "native" axiom?
an axiom that is native to the human condition, such as the concept of ownership. A human is born knowing that he owns his own body. People are born embracing the identity axiom.
I can simply say that I do not consent to a given policy of my employer. Suppose my employer creates a new policy and I refuse to follow it. If they fire me, that would be equivalent to the government throwing me in jail for violating one of their new laws.
yes, this is the equivocation you continually attempt to trick us into accepting. Please demonstrate how your employer's decision to cease purchase of your labor products equates to assault and abduction.
Indeed, whatever specific reason my employer has for firing me isn't something that would be found in my contract with them.
are you under the impression that this might be relevant? It is not. Your voluntary association with anyone is subject to their continued consent. They dont need to establish all possible conditions under which they might withdraw that consent when you first formalize the association, or ever, in fact. And neither do you. What would you call it if you could only quit your job under specific circumstances, outlined explicitly in your employment contract? "oh no, you cant quit yet. Its november." a form of slavery, right? Involuntary servitude. So how come you think you should be the slavemaster and the employer should be the slave?
Keep the faith, Strannix. -Casey Ryback, Under Siege (Steven Seagal)
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argument by assertion. You claim that the impoverished necessarily spend more on consumption than production, when I ask you to support this you assert it again.

I never claimed that (unless consumption somehow means "capital expenditures" now). I should clarify that my claim is based on the definition of subsistence and not what we actually call the poor. So of course I can only support it by restating it. To put it in empirical terms, I would not say that someone who makes $15,000 a year necessarily spends more on "future goods" than someone who makes $100,000.

an axiom that is native to the human condition, such as the concept of ownership. A human is born knowing that he owns his own body. People are born embracing the identity axiom.

I must not be a human then, since I still don't know that I own my body.

yes, this is the equivocation you continually attempt to trick us into accepting. Please demonstrate how your employer's decision to cease purchase of your labor products equates to assault and abduction.

Its not so much the ceasing of payment that I'm referring to, but their resort to force in removing me from the premises. On a purely physical basis, that seems pretty similar to assault and abduction.

are you under the impression that this might be relevant? It is not. Your voluntary association with anyone is subject to their continued consent. They dont need to establish all possible conditions under which they might withdraw that consent when you first formalize the association, or ever, in fact. And neither do you. What would you call it if you could only quit your job under specific circumstances, outlined explicitly in your employment contract? "oh no, you cant quit yet. Its november." a form of slavery, right? Involuntary servitude. So how come you think you should be the slavemaster and the employer should be the slave?

This illustrates my point pretty well. The reason you think my employer has the right to fire me (i.e. forcibly remove me from the premises) is not ultimately justified based on a voluntary agreement but on the fact that it is their property.

"The limits of my language mean the limits of my world." ~ Ludwig Wittgenstein
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I probably wouldn't want you to stay there forever, and I may try to force you to leave. But I'm not sure I'd say I have a right to kick you out anymore than you have a right to be there. I don't really like thinking in terms of rights--not in this sense, anyway.

I should probably clarify this. I lost track of the discussion this came out of. I don't think it is inconsistent to say that I have a right to kick someone out of my home that I "own" but not a workplace that I "own." In the former, I can appeal to other rights other than ownership, such as the right to privacy. On the other hand, we could present a scenario of a person who enters my apartment with the consent of my landlord and refuses to leave. I might argue that I have a right to expel such a person whereas you wouldn't.

"The limits of my language mean the limits of my world." ~ Ludwig Wittgenstein
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I never claimed that (unless consumption somehow means "capital expenditures" now). I should clarify that my claim is based on the definition of subsistence and not what we actually call the poor. So of course I can only support it by restating it. To put it in empirical terms, I would not say that someone who makes $15,000 a year necessarily spends more on "future goods" than someone who makes $100,000.
I am not backtracking over 8 pages of thread to try and pin down a world class equivocator such as yourself. You just changed your statement from a positive to a negative so I suspect you are employing a false dichotomy in there as well.
I must not be a human then, since I still don't know that I own my body.
you were born knowing it, at some point you rejected it and since its an axiom, it is so fundamental to rational thought that you contradict yourself without realizing it. Scientitists have empirically demonstrated that the concept of ownership is fundamental to the human condition. You can stop lying to yourself now, even the positivists have to give it up.
Its not so much the ceasing of payment that I'm referring to, but their resort to force in removing me from the premises. On a purely physical basis, that seems pretty similar to assault and abduction.
yes, because being forced inside of one box for minding your own business is pretty similar to being forced outside of a different box (which you gained provisional admittance to by accepting the owner of said box's terms). Do you have any basis for this equivocation, or do you reject concepts such as "locality" and "proximity" as well?
This illustrates my point pretty well. The reason you think my employer has the right to fire me (i.e. forcibly remove me from the premises) is not ultimately justified based on a voluntary agreement but on the fact that it is their property.
they have a right to fire you (meaning terminate your mutually agreed upon terms of employment) because all humans have freedom of association. Meaning you cannot force them to associate with you morally. Having you removed from their property is a second act, that apparently only is necessary because you insist on hanging around the business after you no longer have a job there. So what is your justification for that, given that you only gained admittance because of your acceptance of the owners terms of employment?
Keep the faith, Strannix. -Casey Ryback, Under Siege (Steven Seagal)
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How come my right to privacy doesnt extend to the business sphere?
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I am not backtracking over 8 pages of thread to try and pin down a world class equivocator such as yourself. You just changed your statement from a positive to a negative so I suspect you are employing a false dichotomy in there as well.

I am not changing my statement. I am simply telling you what I am not saying in order to give you a better idea of what I am saying. I am making an analytic judgment, not a synthetic one (at least when I started using the words "subsistence" and "necessarily").

you were born knowing it, at some point you rejected it and since its an axiom, it is so fundamental to rational thought that you contradict yourself without realizing it. Scientitists have empirically demonstrated that the concept of ownership is fundamental to the human condition. You can stop lying to yourself now, even the positivists have to give it up.

You must be using a concept of ownership that has no bearing on the economic usage. There's no way I could understand such a concept as a baby. Do you have a source for this scientific evidence?

yes, because being forced inside of one box for minding your own business is pretty similar to being forced outside of a different box (which you gained provisional admittance to by accepting the owner of said box's terms). Do you have any basis for this equivocation, or do you reject concepts such as "locality" and "proximity" as well?

I'm pretty sure I could end up in jail for trespassing on my former employer's property. So yes, it is the same thing.

they have a right to fire you (meaning terminate your mutually agreed upon terms of employment) because all humans have freedom of association. Meaning you cannot force them to associate with you morally. Having you removed from their property is a second act, that apparently only is necessary because you insist on hanging around the business after you no longer have a job there. So what is your justification for that, given that you only gained admittance because of your acceptance of the owners terms of employment?

The employer had no justification for forbidding me admittance in the first place.

"The limits of my language mean the limits of my world." ~ Ludwig Wittgenstein
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How come my right to privacy doesnt extend to the business sphere?

Who says it doesn't? If my employer hires a really annoying person that bothers all of the employees all day, then I might say that the employees have a right to kick that person out. However, to say that my employer who lives on the other side of the world can fire me due to a right of privacy is really stretching the term. That's a right of property, not privacy.

"The limits of my language mean the limits of my world." ~ Ludwig Wittgenstein
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I am not changing my statement. I am simply telling you what I am not saying in order to give you a better idea of what I am saying.
that would only be helpful if there was a dichotomy present, the fact that you define poor people to be such and such and then claim such and such necessarily means whoseaboutit because you dont claim that whoseaboutit necessarily means not such and such is exactly thenkind of rabbit hole I have no time for. Please state your claims in rigorous terms and stick to the same terms.
You must be using a concept of ownership that has no bearing on the economic usage. There's no way I could understand such a concept as a baby. Do you have a source for this scientific evidence?
there is no way you could have survived to adulthood without such a concept

http://www.sciencenews.org/view/generic/id/74983/title/Kids_own_up_to_ownership

I'm pretty sure I could end up in jail for trespassing on my former employer's property. So yes, it is the same thing.
you could end up in jail for trespassing on anyone's property, that doesnt make being inside a cage equivalent to being outside a cage. So its not the same thing.
The employer had no justification for forbidding me admittance in the first place.
then why did you feel it was necessary to gain his permission through the employment arrangement? Are you suggesting that one day you simply showed up and homesteaded an (already extant) office and pc?
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Property is private. Duh.

edited to add:

However, to say that my employer who lives on the other side of the world can fire me due to a right of privacy is really stretching the term. That's a right of property, not privacy.
so proximity and locality matter when its convenient for you, but not when it isnt. I am beginning to see how this game works.

when you define "privacy" we might be able to get somewhere

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But you can't use that example to make the categorical claim that all immediate satisfaction diminishes later satisfaction.

Well since my example didn't make that claim, much less attempt to substantiate it, this statement is confusing at a bare minimum.
 

Well, maybe its beside your point, but its not beside my point.


Actually it was your point, but moving on to your new point...

My point is that food's ability to satisfy your appetite has nothing to do with its ability to increase or decrease your ability to satisfy future wants. It has that ability because of the physical effect it has on your body.


Wait, didn't you just say this a few moments ago (in forum time)?

...satisfying my want of food presently increases my ability to satisfy my wants next week.

Well first of all, in your scenario, people will gain satisfaction from the things in front of them regardless of these property rights. So I don't understand the point about the relationship between property and the level of satisfaction gained.

Nothing you said here makes any sense with respect to what was discussed previously.  You originally intended to make the point that "...everyone will gain satisfaction from the things in front them," and that doesn't sound so bad to you.  The only way it cannot sound bad is if you presuppose a scenario where all affected peoples have some form of equal access to the things "in front of them" from which they can gain satisfaction.  The problem is, such a scenario is not likely to exist in reality.

 

Second, I don't see how government imposition of price controls amounts to a lack of property.

If you think of property in the abstract, as merely a good, you wouldn't see it.  But people don't acquire property for its own sake, they acquire property because of its value to them.  The very concept of property is inseparable from the value assigned to items by those who either have or wish to acquire them as property.  If/When the government removes your ability to assign value to your property they are in effect depriving you of your property.

If you are unwilling to part with a certain piece of property at a value lower than what you deem it to be worth, and the government forces you to part with that property at that lower value, in my opinion that is the moral equivalent of the government allowing that property to be stolen from you.  The case of a price floor is a little different, but not much.  If someone wishes to part with a certain piece of property at a value they deem appropriate, but the government prevents someone from acquiring it from you because they deem that value "too low," they have essentially stolen the value of your property (expressed in the trade equivalent you were willing to accept) from you.

 

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