Political Theory

Re: Question about beliefs!!!

AdrianHealey — Mon, 31 Jan 2011 03:23:31 GMT

Brian Anderson:

3. Usually: privatization means = granting a government privilege to a private owner ('corporatism')

That is never what privatization means. That's just government contracting.

I usually don't argue for privatizations by using the argument 'it will get cheaper!!!' You need qualifications to that kind of statements.

What qualifications do you think you'll need? If you privatize something on which government has a currenty monopoly, the worst case scenario is that one company will decide to start selling the product. Now there's the same amount of sellers as before: 1. What would happen, though, is that, in a free market, the company wouldn't be annual subsidized with tax money. If people didn't like the prices, they'd go down. If the prices went up, someone would see an opportuity to compete. It's a pretty common sense 'qualification'.

You assume that everytime the word 'privatize' is used, people actually mean 'creating a free market'. It doesn't. Privatize means: putting it into private hands. Nothing more, nothing less. It doesn't mean 'freeing up the market', 'deregulation' or whatever.

If you privatize a government monopoly, the worst that could happen is a higher price and poorer quality. That might happen and there are good reasons that this might happen. A private privileged monopoly might be better or worse than a government privileged subsidized monopoly; there is no way of comparing that a priori.

The crux is 'in a free market'. Privatization doesn't mean 'creating a free market'. Maybe in some fairy land, but in the real world, with the politicians we have; a government privatizing something rarely means 'creating a free market'. It usually means: 'creating a private run monopoly' - with any luck: no subsidies. Definitely regulation. Usually a monopoly.

I know of no privatization that actually created a free, deregulated, desubsidized and de-monopolized market. Do you?

So the qualifications you need? Well; prices will reflect market valuations if we privatize and deregulate the market: these could be (much) higher, equal or much lower than they are today. That's about the only thing you could say - depending on the amount that is going into subsidizing it and the real market demand for it. There is no a priori way of telling that. The only thing you can say is that in a free market; prices will tend to be what the 'market equilibrium' (between quotations marks) will be, i.e. guided by consumer demand and entrepreneurs responding to it.

Saying a private (privileged) monopoly couldn't charge higher prices because 'there is just one seller, just like before', seems like a fallacy. As you said; probably subsidies will be lower, so prices might actually be higher. If there is still government regulation in place - as there always is - it could still mean that the higher price could be the market price, given these regulations. So saying: it will get cheaper when we privatize it, is just something you can't know a priori.

When you see 'there is an oppurtunity to compete', you assume a free market. And that assumption is not implied by the notion 'privatization'. So that's another qualifier you'd have to add.

Re: Question about beliefs!!!

Stranger — Mon, 31 Jan 2011 02:55:39 GMT

Usually utility prices from socialized utilities are highly subsidized, so in the case of Quebec Hydro it is almost certain that in a free market prices would be higher. This of course does not take into account the capital value of the Hydro, which would increase significantly if the company could sell electricity for its true value. This capital value would of course go back to the people. (Ha ha ha!)

Re: Question about beliefs!!!

Drew — Mon, 31 Jan 2011 01:23:46 GMT

For example, if I questioned you about the things you are told in your church, would you respond rationally?

I've abandonded faith and all, that long time ago.

What do you mean most people got it? Communists are still popular with the elderly. The current government is comprised of people identifying with Breznev's neo-Stalinist group (as opposed to Kruzhev's anti-Stalinist group). Putin recently called Stalin an "adequate manager."

The youth are highly anti-capitalistic and instead nationalistic, identifying solutions to all economic problems as province of government. Then there are the bastards pulling out Hitler salutes in the duma, screaming death to America, asking the gangs of thugs to "teach those western foreigners and Jews." And best of all, since 1990's, over half of all assets in Russia still belong to the government like the Canadian forests belong to the Canadian government. And police use old laws to force money out of businessmen, creating a very high cost of doing business if you buy equipment from outside Russian Federation. And on top of it all, only the oil and gas busines is booming, which is in the hands of government--every other industry has producitivity below what it was in USSR, with exception of shops that via Cantillon effects sell to people who have wages originating in government or oil or selling to the aforementioned.

There is still not much support for Austrian economics in Russia itself. Most Russians who like AE are in US or Israel. The true businessmen in Russia are risking their lives and they know it, which is why they usually own property in many other countries as soon as they are able. The mayors of cities in Russia earn billions of dollars each year through connections, on the other hand.

From my own experience, concerning east europeans and other ex-communist countries, it's completely normal for them to love communism.

They worked for the state, someone gave them everything, jobs always existed.

When the revolution struck in my country of origin, no one knew what to do or how to invest. My romanian aunt had tons of money hidden under her mattress, fortunately all that cash lost it's value since she didn't know what to do with it.People who lived the communist lifestyle have no idea what capitalism and personal responsability is.

From my experience with Romanians, they're mentality rhimes something like this: "I want to have money not make it", most of the ones I know are incredibly cheap and enjoy saving money from everything even if it means living a crappy lifestyle. They expect the governement to create jobs, most of them want to be able to have the welfare state of Sweeden. If you ever go to a church and talk to some of them, they'll tell you how amazing life is in Sweeden, how they're governement gives them alot of money and dinner at a restaurant when your birthday comes. LOL

Free markets are wonderfull, but free markets cannot work in a society where most individuals expect God, the governement or some other fictious being to solve they're problems. There's nothing a free market can do for indifferent individuals who just want a job where they can work as less as possible, get free stuff, complain and pray to God for more free stuff.

How is the free market going to work in those situations?

Re: Question about beliefs!!!

Nielsio — Mon, 31 Jan 2011 00:51:28 GMT

Drew Brando:

I went to church today, [..]

[..]

My question is, Why do they continue to believe this non sense, what on earth motivates them? How do you explain anything to them they just won't listen?

They believe nonsense because they went to church for decades (public school, government regulated TV, etc).

For example, if I questioned you about the things you are told in your church, would you respond rationally?

Re: Question about beliefs!!!

Smiling Dave — Sun, 30 Jan 2011 22:25:28 GMT

I guess they forgot. Does not bode well for us.

Re: Question about beliefs!!!

thelion — Sun, 30 Jan 2011 20:25:22 GMT

Smiling Dave:

Pessimistic answer: Yeah, some things have to be learned the hard way. And by the hard way I mean the mass starvations and forced labor camps that they had for 70 years in Russia.

After that, most people got it.

Re: Question about beliefs!!!

Joe — Sun, 30 Jan 2011 11:48:01 GMT

also prices mean something very different when it comes to the government. Sure it could lower the price to practically zero and then also put people on some sort of usage cap and operate at a huge loss and then just have the government tax the general population and get the money needed to keep the thing running. But the prices would be low!!!! I feel like your friend is not taking into account the true cost of the service if he is simply looking at the price the gov't is charging.

Re: Question about beliefs!!!

Drew — Sun, 30 Jan 2011 09:52:38 GMT

3. Usually: privatization means = granting a government privilege to a private owner ('corporatism')

There's no doubt about it. If the government grants control of Hydro Quebec to a private company on these terms, prices will most likely skyrocket.

Prices of electricity are already high here, they've been increased last year.

If I'm not mistaken even the price of milk is regulated where I live. I'm not sure exactly where I've read that, I know most milk companies are subsidized.

In fact you can't compete here, Electricity is in the governments' hands.

Re: Question about beliefs!!!

BrianAnderson — Sun, 30 Jan 2011 08:09:46 GMT

3. Usually: privatization means = granting a government privilege to a private owner ('corporatism')

That is never what privatization means. That's just government contracting.

I usually don't argue for privatizations by using the argument 'it will get cheaper!!!' You need qualifications to that kind of statements.

What qualifications do you think you'll need? If you privatize something on which government has a currenty monopoly, the worst case scenario is that one company will decide to start selling the product. Now there's the same amount of sellers as before: 1. What would happen, though, is that, in a free market, the company wouldn't be annual subsidized with tax money. If people didn't like the prices, they'd go down. If the prices went up, someone would see an opportuity to compete. It's a pretty common sense 'qualification'.

Re: Question about beliefs!!!

AdrianHealey — Sun, 30 Jan 2011 07:57:42 GMT

There is nothing weird in saying that privatizing a government monopoly would cause the price that you have to pay to raise (drastically). (I'm not saying this will always happen, but chances are high.)

1. If it's a monopoly, chances are prices are kept downward/subsidized.

2. The bigger the 'thing' and the harder to compete with it, the (1) the longer it takes to compete with it and that is (2) assuming there is no red tape holding the competition back.

3. Usually: privatization means = granting a government privilege to a private owner ('corporatism')

I usually don't argue for privatizations by using the argument 'it will get cheaper!!!' You need qualifications to that kind of statements.

Re: Question about beliefs!!!

BrianAnderson — Sun, 30 Jan 2011 07:53:05 GMT

Some places in the Bible say collecting interest from the poor is evil but I don't think Jesus ever said that.

They're talking about Deuteronomy 23:19-20. But the Bible also says not to demand anything back from someone who takes it from you.

Re: Question about beliefs!!!

resist272727 — Sun, 30 Jan 2011 07:49:25 GMT

I really don't think people realize how slim profit margins are. However, by his logic, General Motors is the ultimate good.

And I don't believe Jesus ever said giving loans was evil. Some places in the Bible say collecting interest from the poor is evil but I don't think Jesus ever said that. Regardless, I think Mises handled most of the major concerns pretty well in "The Anti-Capitalistic Mentality."

Re: Question about beliefs!!!

BrianAnderson — Sun, 30 Jan 2011 03:36:14 GMT

Well apparently, according to him, the government is not out for making "profit", so the government is loosing money with electricity, that's why they higher taxes. The government is loosing money(sacrificing profit) just for us, so that we the people can pay "low" electricity.

We're still paying on tax day. For some reason he doesn't see that taxes are us paying for the electricity on a different day.

The discussion usually goes along the same line: "profit is evil", "why should people that own capital make more money then the workers"," at some point in your life your money makes money for you, and that's evil and immoral because you are not working" blablabla

Typical socialist speech. They claim to want to eliminate the class structure, but they automatically put workers as people who own no capital. He doesn't believe in savings from the sound of his sentence, or else everyone would own capital long-term.

My question is, Why do they continue to believe this non sense, what on earth motivates them? How do you explain anything to them they just won't listen?

And if you do deal with them, how do you not become crazy?

A lot of those people simply try to find facts to justify their ideologies as opposed to the other way around. You don't deal with them as much as possible. Show them videos of Milton Friedman to start off with (especially the one regarding a car company who didn't implement an extra safety measure on the car - I forget which video exactly), and answer their comments. And, by the way, it doesn't matter "what Jesus wanted". Marx wanted communism, Hitler wanted national socialism, etc. If we went by which famous people wanted X instead of which X, Y, or Z matches up with reality, we'd all be competing to say which famous person is better than the other based on their individual short-comings or successes.

EDIT: *Here is the Milton Friedman video.

Re: Question about beliefs!!!

freeradicals — Sun, 30 Jan 2011 03:27:20 GMT

Drew Brando:

Well apparently, according to him, the government is not out for making "profit", so the government is loosing money with electricity, that's why they higher taxes. The government is loosing money(sacrificing profit) just for us, so that we the people can pay "low" electricity.

This is the first point you should have tried to dismantle and focus on it until your idea settles in. Pull the bottom brick out and the rest of the wall comes down, once you dismantle his main argument you should take it up a notch and hit the overarching problem: government as force and coercion. If you can win that one then all the millions of details you could potentially argue over will not be necessary anymore. When dealing with people like that they will only argue for a little bit and run out of things to say then try and change the subject or get emotional on you. If you can't control the conversation and make progress with your main idea then it's not worth it. Otherwise you'll end up in a quagmire of many arguments about tiny details.

Re: Question about beliefs!!!

Smiling Dave — Sun, 30 Jan 2011 03:13:00 GMT

Pessimistic answer: Yeah, some things have to be learned the hard way. And by the hard way I mean the mass starvations and forced labor camps that they had for 70 years in Russia.

After that, most people got it.

Optimistic [and slighty snobbish] answer: No need to influence the masses. Like sheep, they will go along with what their superiors tell them. So you just have to convince people with intellect and creativity. They set the tone. And we are making progress with them. Look at all the visitors to this site. Look at how Krugman feels forced to acknowledge the existence of AE.