I was reading a debate on another forum, and I saw that this guy was criticzing the free market and the actions of the wealthy people (or generally people who have money in the economy). I was going to respond to him, but what are your views on what he is saying right now?
This kind of childish faith in the wisdom and circumstances of the wealthy (while overlooking the reality of the situation passed by in such phrases as "as oil becomes more and more scarce") is a modern form of Utopianism. Some of the obvious glitches: 1) Externalized costs. The "commons" problem. The smartest minds that want the most profit will outcompete the altruists at this game, and the winner will be not necessarily the "best" tech but the one with the lowest cost and highest profit to them. It will be partly a competition for most efficient tech, and partly a competition to externalize the greatest proportion of costs. Example: strip mining. Example: child labor Example: the proposal to create deepwater harbors in Alaska using A-bombs, and employ them in construction generally. Example: industrial agriculture. Example: the modern gasoline dependency. 2) Suboptimal equilibria. The "typewriter" problem. It is possible for an entire economy and every business in it to get stuck in a situation where any minor change, such as a new tech, is incrementally unprofitable, but major systemic change could lever the system into a new and better equilibrium. No individual investor in the current system profits by changing anything, but all would profit by changing everything. Examples: child labor again. Colonialism generally. Slavery. The land ownership arrangements in Spain's former empire. The typewriter keyboard in English. Microsoft's operating systems. Truck transport of heavy goods in the US. 3) Uncertain beneficiary. The "cui bono" problem. What's good for the wealthy in control of the innovation, individually or as a class, is not necessarily good for everyone else, and vice versa. Examples: unregulated banking, intellectual property arrangements, globalization of capital investment, copycat drugs, company towns, recreational vehicles, nuclear power, corporate ownership of news media. __________________
Why do they repeat objections that have been torn to shreds? Also, is he stuck in some kind of class warfare mentality? For example, we're not pro-IP and child labour/slavery were gradually being eliminated by the market.
Let's address some of this:
1) Externalized costs.
Do not exist under free markets. All property is private.
The "commons" problem.
What is this silly objection? The government is a commons.
The smartest minds that want the most profit will outcompete the altruists at this game,
To gain a profit one must provide a service beneficial to their consumers, absent fraud. So who cares?
and the winner will be not necessarily the "best" tech but the one with the lowest cost and highest profit to them.
I.e. the ones consumers like best. Where is the problem?
It will be partly a competition for most efficient tech, and partly a competition to externalize the greatest proportion of costs.
"Externalizing" costs would be illegal. If he means searching for the lowest cost, where is the problem, provided it's legal? Employing children only goes so far, BTW. Their productivity is very low.
2) Suboptimal equilibria. The "typewriter" problem. It is possible for an entire economy and every business in it to get stuck in a situation where any minor change, such as a new tech, is incrementally unprofitable, but major systemic change could lever the system into a new and better equilibrium. No individual investor in the current system profits by changing anything, but all would profit by changing everything. Examples: child labor again. Colonialism generally. Slavery. The land ownership arrangements in Spain's former empire. The typewriter keyboard in English. Microsoft's operating systems. Truck transport of heavy goods in the US.
Again, more nonsense. Substitute "I don't like what the market chose therefore I'm going to call it suboptimal!" for what he actually said. Callahan addresses this puerile whining in his Economics for Real People, in the chapter Stuck on You. It's baseless. MS's OS does not qualify, at any rate. And as for the transportation of heavy goods in the US and Spain's landownership arrangements, only the governments involved are to be blamed for these...
3) Uncertain beneficiary. The "cui bono" problem. What's good for the wealthy in control of the innovation, individually or as a class, is not necessarily good for everyone else, and vice versa. Examples: unregulated banking, intellectual property arrangements, globalization of capital investment, copycat drugs, company towns, recreational vehicles, nuclear power, corporate
We have "unregulated" banking now (properly regulated banking would be a free market in banking.) We have IP now, and it's wrong. What is wrong with "copycat drugs" (is this guy contradicting himself?), company towns, recreational vehicles and nuclear power (one of government's biggest fuck-ups in history)? Do they offend his delicate sensibilities?
Freedom of markets is positively correlated with the degree of evolution in any society...
I do not understand socialists, one of my teachers drew a diagram to explain why socialism works, and i asked him why he thought an over complex drawing was the answer. He had no answer but just kept rambling on drawing lines and arrows every which way. He plays the card that if you are free market then you are against the poor, playing emotions really gets me angry.
Thanks alot. Call me stupid, but what do you mean when you refer to IP?
Oh. Intellectual Property. BTW I really recommend you read that chapter from Callahan's book (it's online), as it has a lot of material on path dependence.
BlackNumero:Example: strip mining. Example: child labor Example: the proposal to create deepwater harbors in Alaska using A-bombs, and employ them in construction generally. Example: industrial agriculture. Example: the modern gasoline dependency.
BlackNumero: I was reading a debate on another forum, and I saw that this guy was criticzing the free market and the actions of the wealthy people (or generally people who have money in the economy). I was going to respond to him, but what are your views on what he is saying right now? This kind of childish faith in the wisdom and circumstances of the wealthy (while overlooking the reality of the situation passed by in such phrases as "as oil becomes more and more scarce") is a modern form of Utopianism. Some of the obvious glitches: 1) Externalized costs.
This kind of childish faith in the wisdom and circumstances of the wealthy (while overlooking the reality of the situation passed by in such phrases as "as oil becomes more and more scarce") is a modern form of Utopianism. Some of the obvious glitches: 1) Externalized costs.
BlackNumero:The "commons" problem.
BlackNumero:The smartest minds that want the most profit will outcompete the altruists at this game, and the winner will be not necessarily the "best" tech but the one with the lowest cost and highest profit to them.
BlackNumero:It will be partly a competition for most efficient tech, and partly a competition to externalize the greatest proportion of costs.
BlackNumero:Example: strip mining.
BlackNumero:Example: child labor
BlackNumero:Example: the proposal to create deepwater harbors in Alaska using A-bombs, and employ them in construction generally.
BlackNumero:Example: industrial agriculture. Example: the modern gasoline dependency.
BlackNumero:2) Suboptimal equilibria.
BlackNumero:3) Uncertain beneficiary.
Isn't using A-bombs a bad idea in the first place? As a capitalist, I don't think radiation fallout is going to be particularly good for business.
Gasoline dependency? What does he means by that?
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He does have some points, especially about the externalization of costs. His error is that he conflates a free market with the current situation, which is a very unfree market.
Market anarchist, Linux geek, aspiring Perl hacker, and student of the neo-Aristotelians, the classical individualist anarchists, and the Austrian school.
I was reading up on externalized costs a little bit...so our defense is that all property is private in a free market and when someone harms that, we can sue for liabilites? Wouldn't that make things like cars or any other CO2 polluting machine/industry obsolete, since then we could just sue them because they caused a little harm in our lungs? Wouldn't it just open an entire plethora of lawsuits with everyone trying to sue everyone for little things?
Nope. At best you can sue for substantial increases in pollution over and above a certain level commonly deemed as acceptable (and definitely above whatever levels were already prevalent when you moved in to wherever you live.) Basically, one can homestead "pollution" easements and courts may exercise a level of discretion in dealing with these matters. Harm to the individual will have to be directly proven.