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Phil Donahue almost teaches Milton Friedman a lesson in the economic calculation problem

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DD5 Posted: Tue, Oct 27 2009 11:56 PM

I find this amazing.  I've always thought that Milton Friedman lacks in-depth understanding of market theory and the calculation problem.  

 At about 4:18 , Friedman starts to give his statist proposal for how to regulate emissions.

At 4:44 -  Donahue surprisingly makes a comment that almost sounds like how an Austrian might have criticized it.

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Sukrit replied on Wed, Oct 28 2009 8:54 AM

If you listen closely to Friedman's appearances on Donahue, you can also hear the great "free-market" economist defend the warfare state. However Friedman did describe himself as an "anti-interventionist" and opposed the Iraq war, so I suppose that makes him pretty good.

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Jason replied on Sun, Nov 1 2009 4:21 PM

I'm still new to to an-cap philosophy, and I've actually be researching how the free market would deal with this after seeing a Milton Friedman interview on youtube about his version Libertarianism. I understand how free market handles pollution with land and such, but how would it handle air pollution from utilities and the like?

Also, I think Friedman focused too much on Nader. I have no problem with Nader saying the things he says. The problem is when gov't takes what he says and makes regulation. Nader in my opinion is no different than consumer reports, and that serves a good purpose in the free market. Surely, after his book was released and the safety concerns were high lighted, people chose whether they wanted a safer car or if they wanted to take a risk. They didn't need the gov't intervening.

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ProudProfiteer:
I understand how free market handles pollution with land and such, but how would it handle air pollution from utilities and the like?

http://www.walterblock.com/wp-content/uploads/publications/pollution_trading_permits.pdf

enjoy!

Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid

Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring

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Jason replied on Sun, Nov 1 2009 5:56 PM

nirgrahamUK:

ProudProfiteer:
I understand how free market handles pollution with land and such, but how would it handle air pollution from utilities and the like?

http://www.walterblock.com/wp-content/uploads/publications/pollution_trading_permits.pdf

Thanks. I read practically all of it, and I agree that it can be handled in the way described. The problem from the way I'm reading it is they keep talking about courts, precedent, etc. With no state, as in an-cap, you would not have a state, so you would not have these laws. If that is the case, and I can be looking at this wrong, I still don't see how an-cap addresses this.

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ancap has a polycentric legal order instead of a monolithic monopolistic legal order. but that's a whole lot of other reading for you to do...

welcome welcome

Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid

Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring

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Jason replied on Sun, Nov 1 2009 7:29 PM

nirgrahamUK:

ancap has a polycentric legal order instead of a monolithic monopolistic legal order. but that's a whole lot of other reading for you to do...

welcome welcome

Tell me about it. You don't know how much time I've spent at the computer since picking up on ancap. The one thing that bothers me is even if everything can be explained theoretically, I don't see how you can ever have ancap implemented. In order to move to it, you need to persuade a majority. Unfortunately, as I'm proof of, it is very hard to explain and believe. It's hard for me, and I'm very anti-gov and pro free market and like economics. I guess the first step would be to get back to at least where we started with a very small limited government, and then keep pushing from there. Then again, the way things are going, I don't see that happening either. I'm must be reading too much economics because "on the other hand" once our currency crashes and we are bankrupt with our debt, we'll need to come up with new solutions. Hopefully, it's more towards ancap and not towards tyranny.

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Sieben replied on Sun, Nov 1 2009 8:44 PM

nirgrahamUK:
Block makes a good case until he gets to slight violations of property rights. At this point he just kind of throws up his hands and says property rights aren't *that* important. Imo this is a slippery slope.

 

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ProudProfiteer:

Tell me about it. You don't know how much time I've spent at the computer since picking up on ancap. The one thing that bothers me is even if everything can be explained theoretically, I don't see how you can ever have ancap implemented. In order to move to it, you need to persuade a majority. Unfortunately, as I'm proof of, it is very hard to explain and believe.

 

Okay this is a very important point - I can't stress it enough.

- If the achievement of a voluntary society required every single person, or a majority of the people to agree on the specific forms of human interaction and voluntary institutions critical to the maintenance and functioning of said society, such a voluntary society would likely never be achieved, but for select cases in which certain dedicated people agree beforehand on very specific, esoteric features of the society and move to a specific area.

- It is not necessary for such agreement!  Now, this is not to say that the removal of the coercive state will automatically turn into ancap utopia.  Anarchy, as it's often said, is a necessary, but insufficient step toward achieving a free society.  It is necessary that the vast majority of the people are liberty-friendly, are dedicated to property rights, and generally have an interest at the outset of acting voluntarily.  However, and this is the key part, the specific form of voluntary institutions and interactions that make up the legal/security/property framework will emerge naturally out of the voluntary interactions.  This is to say that there isn't necessarily a master plan before such a leap into ancap world, but in such a world, there exists an allowance for a voluntary framework to emerge out of the free choices of individuals.

So people don't need to necessarily agree on the specific institutional forms that provide the framework for a voluntary society ahead of time. They will emerge as people act toward the ends they choose.

Rothbard: "How would courts be financed in a free society? There are many possibilities. Possibly, each individual would subscribe to a court service, paying a monthly premium, and then calling upon the court if he is in need. Or, since courts will probably be needed much less frequently than policemen, he may pay a fee whenever he chooses to use the court, with the criminal or contract-breaker eventually recompensing the victim or plaintiff. Or, in still a third possibility, the courts may be hired by the police agencies to settle disputes, or there may even be "vertically integrated" firms supplying both police and judicial service: the Prudential Judicial Company might have a police and a judicial division. Only the market will be able to decide which of these methods will be most appropriate." 

Spontaneous order is a relevant term here.

And in different geographical places, different forms and integrations of voluntary institutions will emerge.  This is to say the competitive arena will differ based on geography. The market will look different in different places. Even within a jurisdiction, various providers/institutions of legal systems may compete or overlap.This is what we call polycentric order.

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Sieben replied on Mon, Nov 2 2009 6:39 AM

Friedman says "should" too much.

Other than that, he's not my personal savior but it would be nice if guys like him were still in the mainstream. In his works he's usually such a utilitarian about the market; I was surprised to hear him invoke self ownership in defense of people's right to not use airbags.

I wish the fed would stop pretending like they were buddies with Friedman. He's said numerous times its all messed up and should be dismantled...

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Snowflake:
nirgrahamUK:
Block makes a good case until he gets to slight violations of property rights. At this point he just kind of throws up his hands and says property rights aren't *that* important. Imo this is a slippery slope.

I must have missed that bit...... 

 There is, however, a true market solution that depends on the price system without violating property rights. The first step is to establish a system of clearly defined and enforceable property rights. Once clearly defined, market forces will take over and determine the optimal level of pollution

Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid

Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring

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Sieben replied on Mon, Nov 2 2009 8:51 AM

nirgrahamUK:
 There is, however, a true market solution that depends on the price system without violating property rights. The first step is to establish a system of clearly defined and enforceable property rights. Once clearly defined, market forces will take over and determine the optimal level of pollution
I think this issue can be resolved if we abandon a priori theories property rights like homesteading and first-use. On the market, claims to property will only be made if it is cheaper to own something that not own something. This will be a function of the thing's utility and ease of defense. Block seems to realize this but appears reluctant to forfeit absolute property rights.

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Snowflake makes a good case until he gets to slight violations of property rights. At this point he just kind of throws up his hands and says property rights aren't *that* important. Imo this is a slippery slope.

lol, i'm confused.

Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid

Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring

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Jason replied on Mon, Nov 2 2009 9:20 AM

nirgrahamUK:
lol, i'm confused.

 

Me too. I was hoping someone would eventually pull back the curtain for me.

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If snowflake could quote or point to where he feels Block starts to 'compromise' then I could form an opinion on that... 

regardless; there is a wealth of good literature available, and easily searchable on this site. if there is a particular topic you 
have a question on feel free to ask 

Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid

Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring

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Saan replied on Mon, Nov 2 2009 10:14 AM

Snowflake:
On the market, claims to property will only be made if it is cheaper to own something that not own something. This will be a function of the thing's utility and ease of defense. Block seems to realize this but appears reluctant to forfeit absolute property rights.

Okay, so why does this preclude absolute property rights then? I don't see the connection.

 Criminals, there ought to be a law.

Criminals there ought to be a whole lot more.   Bon Scott.

 

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Sieben replied on Mon, Nov 2 2009 2:45 PM

Blawc Sez on p61:
"Obviously there should be some de minimis exception. Victims should not be able to sue for a slight invasion of their property, as when a single particle [gets on their lawn]. This is a well established legal principle in both England and the United States.

In the first sentence, block gives up on absolute property rights. The second sentence is just kind of... a recommendation... and the third is an argumentum ad populum.

Saan:
Okay, so why does this preclude absolute property rights then? I don't see the connection.
My view is at odds with homesteading and first use principles typically employed by libertarians. Those say that the person who fulfills certain criteria owns property X. I'm saying that in anarchy, one's claim to property X does not rely on these metaphysical conditions, but rather whether you can actually defend and enforce your claim. This is preferable for many reasons... most of them utilitarian im forced to admit.

 

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Saan replied on Mon, Nov 2 2009 3:09 PM

Snowflake:
Those say that the person who fulfills certain criteria owns property X. I'm saying that in anarchy, one's claim to property X does not rely on these metaphysical conditions, but rather whether you can actually defend and enforce your claim.

I agree in part. In the sense that if a robber kills you, you lose. 

I think the most effective defense of ones property is voluntary cooperation within ones social contact circle i.e. anarchy.  Even with the existence of the state this method mitigates some of the damages the state causes.  I speak for myself, but I gain far more from voluntary cooperation with my colleagues and neighbors than if I call the cops on them, because I'm afraid they may be drug dealers, women abusers, child molestors, name your demon.  Most people fit the definition of another mans demon. 

NAP and absolute property rights provide the most effective non-contradictory means for a man to satisfy his wants.  If the basis of property is solely ones ability to defend it, then we get democracy or rather tyranny of the majority. (I don't want to go off topic so maybe another thread on the fallacy of governmental theories.)  I don't see how liberty can be realized with the premise property resides solely on ones ability to defend it. 

This is what I understand from that premise.

 Criminals, there ought to be a law.

Criminals there ought to be a whole lot more.   Bon Scott.

 

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Saan replied on Mon, Nov 2 2009 3:17 PM

I forgot how to edit. I am saying I don't apply fairness dogma to my relationships with other people. Don't strawman me please

 Criminals, there ought to be a law.

Criminals there ought to be a whole lot more.   Bon Scott.

 

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Sieben replied on Mon, Nov 2 2009 3:41 PM

Saan:
NAP and absolute property rights provide the most effective non-contradictory means for a man to satisfy his wants.
Not if its really expensive to do so. Obviously if you wanted me to stop my particles from crossing your property lines it would be expensive to detect and expensive for me to stop. Perhaps impossible.

Saan:
If the basis of property is solely ones ability to defend it, then we get democracy or rather tyranny of the majority.
Not really... no one thinks that PDAs and MDAs are forms of democracy.

Saan:
I don't see how liberty can be realized with the premise property resides solely on ones ability to defend it.
It may be that liberty in its truest and purest sense is unrealizable, or impractical to attain. If I'm on mars, my gravitational field is still influencing everything you do even if you don't know it. Obviously its not worth it to try to resolve this matter... Live and let live. This is what block is saying; to ignore the small stuff. He doesn't give a criterion for what "small" stuff is. I'm claiming that the market determines what small is.

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and why would anybody give a sh-t about small stuff like your "particles" or your gravitational field on mars.  the latter is not deliberate no matter what one thinks about gravity and naturally unavoidable.  the former is - who the h-ll knows what those are.

in other words - eh?

"Do not put out the fire of the spirit." 1The 5:19
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Juan replied on Mon, Nov 2 2009 4:36 PM
Not if its really expensive to do so. Obviously if you wanted me to stop my particles from crossing your property lines it would be expensive to detect and expensive for me to stop. Perhaps impossible.
Huh ? You are not making any sense.

February 17 - 1600 - Giordano Bruno is burnt alive by the catholic church.
Aquinas : "much more reason is there for heretics, as soon as they are convicted of heresy, to be not only excommunicated but even put to death."

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Sieben replied on Mon, Nov 2 2009 5:04 PM

It costs money to have property. Some property is very expensive to have. If this property cannot pay itself off, no one will claim it.

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Saan replied on Tue, Nov 3 2009 12:07 PM

Snowflake:
Saan:
NAP and absolute property rights provide the most effective non-contradictory means for a man to satisfy his wants.
Not if its really expensive to do so. Obviously if you wanted me to stop my particles from crossing your property lines it would be expensive to detect and expensive for me to stop. Perhaps impossible.

Eh?

Snowflake:
Saan:
If the basis of property is solely ones ability to defend it, then we get democracy or rather tyranny of the majority.
Not really... no one thinks that PDAs and MDAs are forms of democracy.

Sure it does. Property based only upon ones ability to defend it is might makes right. Democracy is the same thing.  Force in numbers.  Tyranny of the majority.  A demagogue need only persuade a majority to plunder a minority, we have plenty of historical examples of this.

Snowflake:
It may be that liberty in its truest and purest sense is unrealizable, or impractical to attain. If I'm on mars, my gravitational field is still influencing everything you do even if you don't know it. Obviously its not worth it to try to resolve this matter... Live and let live. This is what block is saying; to ignore the small stuff. He doesn't give a criterion for what "small" stuff is. I'm claiming that the market determines what small is.

Influence and coercive force are two different things.  I have influence around me as well.  Influence is what you have when people cooperate with you voluntarily.  Power is what you have when you force people to cooperate with you.

I'm really not following you here.

 Criminals, there ought to be a law.

Criminals there ought to be a whole lot more.   Bon Scott.

 

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Sieben replied on Tue, Nov 3 2009 4:12 PM

Saan:
Eh?
Yeah. Assertion of absolute ownership is expensive.

Saan:
Sure it does. Property based only upon ones ability to defend it is might makes right.
Well the free market in general is based on the more money you have the more you can do....

Saan:
A demagogue need only persuade a majority to plunder a minority, we have plenty of historical examples of this.
So is this the argument that anarchy tends towards statism? Many other threads for that topic.

Saan:
Influence and coercive force are two different things.  I have influence around me as well.  Influence is what you have when people cooperate with you voluntarily.  Power is what you have when you force people to cooperate with you.
Prescription of Anarchy: It would be nice if everyone got along and respected property rights. Description of Anarchy: Some people will probably violate your property rights. It is up to you to assert these rights.

Are you like a minarchist or something? It is one thing to say libertarianism entails absolute property rights but the reality is that there is no way to do so. Statism robs people to protect their rights (at best). Anarchy leaves provision of rights to the market which determines the optimal level of assertion of property rights...

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