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I don't know what you mean, please elaborate.
I print money. I print more money than can be redeemed. My investments go under. People run the bank. Most people are left without any money.
The public goods theory is one of the most flawed, perpetuated economic concepts.
The article rests itself basically rests itself on the idea that altruism will make people cease to be free riders. This is, for free-market anarchists and libertarians, a very dangerous. For one thing, the "communism has no incentives" argument (or "taxes lower incentives"), you can throw way since I can just claim, "well everybody is going to be altruistic so nobody will shirk. It's a lose-lose for you. In addition, it's pretty hung-up on the specifics of national defense. Try crime, then. Sure, you won't catch the thief if they steal from my house - but you will pay to catch thieves in the neighborhood.
Private companies.
Suppose I hold the lifeblood of a city. What stops me from gouging said city?
Hrm?
An organization has to be set up to allocate the airwaves. Otherwise you get intereference and general failure.
If people don't like a company that pollutes, then they can take their business elsewhere.
Free-rider problem. Also, suppose a set of consumers isn't impacted.
Ideally through charitable organizations.
There's that whole altruism thing again. You should look into communism.
Arbitraters.
What forces an organization to respect said arbitrators? Suppose I don't like the verdict and I ignore it. Now what?
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[QUOTEThere's a reason governments have checks and balances. And how often has an army turned on its people?[/quote]
That's what I'm saying. The idea of one firm growing huge then dominating then turning on civilians is as likely as the army doing it. People just aren't that evil.
Take a look at the mafia - that's the kind of people you would have running security in absence of a government.
Mafias can only exist BECAUSE of government. Mafias exist where police are NOT doing a good job of protecting people. In a free society, if one firm wasn't doing a good job, then people could turn to another firm. In government states, people have no other option so they have to deal with the mafia, and they still have to pay for the police.
Take a look at drugs - theoretically nonviolence should be cheaper, but that's simply not the case. It's misleading to blame it on the government for making drugs illegal - the drug business is not violent because of the inherent illegal nature of drugs, it is violent because the government does not enforce property rights for said producers/distributors.
Not quite sure what you mean, but most of the violence surrounding the drug market would go away in an instant if drugs were legalized.
Hardly arbitrary.
It is arbitrary, they can't know what the real market price is going to be without letting the real market work. So they set a price, which is going to be either a ceiling under market clearing price or a floor above market clearing price, and you have market failure.
You can come up with systems where nobody will starve, such as anarcho-capitalism + the guarantee of food. As people can theoretically starve under anarcho-capitalism, this is not true.
There is no feasible system where no one starves, but if you want to advocate for one, start your own blog :p
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On March 08 2008 12:43 CaptainMurphy wrote:Show nested quote +All real-world "communist states" are failed communist states. Marx's "dictatorship of the proletariat" has never existed in any form in any country. "From each according to his ability, to each according to his need," has never been implemented.
It's sort of funny because anarcho-capitalism would meet the same fate. Either the anarchy, or the free market (or both) would end pretty quickly if it were to be attempted in the real world. Nope, there is a big difference between the two. Communism can't work because it tries to change human nature. Communism assumes that people will work without incentive. Anarchism can work because it works with human nature. Companies are working for profit, and to profit they need to create the best product at the cheapest price. Free market anarchy makes greed and efficiency coincide.
You keep on telling yourself that.
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Something I've always wanted to ask a firm believer in the free market, but have never had a chance:
Please explain how it should be possible for a private corporation (which must necessarily have a profit motive, if there is no public sector and everyone must make their own living) to provide a service needed by everyone (i.e. health care, education) as affordably as a government agency with no profit motive.
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That's what I'm saying. The idea of one firm growing huge then dominating then turning on civilians is as likely as the army doing it. People just aren't that evil.
You don't need everyone to be evil. You only need a few people. In absence of a big state, little states emerge. In the absence of control, people conquer their neighbors. Its just a fact. You would think that nobody would ever join up with Ghengis Khan and go conquering your neighbors, but they do.
Mafias can only exist BECAUSE of government. Mafias exist where police are NOT doing a good job of protecting people. In a free society, if one firm wasn't doing a good job, then people could turn to another firm. In government states, people have no other option so they have to deal with the mafia, and they still have to pay for the police.
The mafias, here, are the protection agencies. I guess if you don't like the local mafia you could get a second mafia to help you out.
Not quite sure what you mean, but most of the violence surrounding the drug market would go away in an instant if drugs were legalized.
Yes, because once legalized, the government would be able to protect the property rights of drug dealers.
It is arbitrary, they can't know what the real market price is going to be without letting the real market work. So they set a price, which is going to be either a ceiling under market clearing price or a floor above market clearing price, and you have market failure.
I assume we're talking about state capitalism here. Market failure means the equilibrium point is not being reached, which can lead to shortages or surpluses. In addition, the amount of food the nation requires isn't especially hard to predict. It's not like you would eat ten times as much food if it were twice as cheap. Here's a question - how does Microsoft keep itself running? Then ask yourself why a monopolistic food provider couldn't do the same thing.
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just to think of a few things the government does well
roads
regulating natural monopolies. the ones with super huge start up costs but make lots of money when they do. like power companies and stuff.
education/schools/subsidized college things with positive externalities.
museums
preventing unfair market practices like dumping, where a company temporarily lower prices to beat competition and then raises them again after they're gone
provide funding for things with very high costs like boeing vs airbus or something like that.
satellites
defense/security
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maybe not well but are needed?
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On March 08 2008 12:06 zdd wrote:
The best-case scenario you could hope for is the "power triangle", where you have 3 companies, and each one fears attacking the others because losing soldiers will put the company that is not fighting ahead of the 2 that are fighting. But then you just get 3 totalitarian regimes.
You're talking about a balance of power. Only once that I know of has there been a similar system in history, and that was in Europe. But even that was artificially constructed at the Congress of Vienna. Further, its collapse led to the first world war.
No, government does not have to exist nor does currency require a governing body. It would be in the interest of banks to agree upon a common currency for the sake of efficient business, and they will do what is in their economic interest.
If a bank fails and it's in enormous debt, what's to keep it from inflating the currency to help pay off its debts? The only thing that would keep this from happening is some kind of regulatory agency that decides how much currency gets put into the system. Which is exactly what the government does.
I expect your response to this would be that we'd be using the gold standard. But you'd still HAVE to have paper money, unless you expect people to trade by lugging around giant nuggets of gold. With the internet and electronic banking, representative currency is indispensable. It would be extremely inefficient to run the economy without it.
What about poor people ? Let them starve ?
Poor people don't contribute to anybody else's good. The only reason to help them under such a system is if their presence was hurting the public good somehow. Which is a good point, and I'd like to see CaptainMurphy address this. Under this system, people with low-income and unlikely to purchase a lot of goods would be severely neglected.
War is expensive. There is no reason companies would actively seek conflict, and no they wouldn't be totalitarian.
With all due respect, this is extremely naive. Gaining control of an especially wealthy and industrious piece of territory means more profits for you in the long run. Read my analysis from my other post. That said, give us some warrants. this is a HUGE issue with your argument and you don't even support it. Why wouldn't they be totalitarian? It's in their absolute interest. You can't just say "people are good". If you want to make that argument, give us examples. Don't just claim that people aren't evil. Likewise, you can just look to just about every non-western country in the world as an example of just how likely governments are to resort to corruption and abuse to maintain power.
My point was that communism creates starvation because it arbitrarily sets the price and amount of food to be produced, which is guaranteed to bring about market failure. Anarcho-capitalism is the opposite, and it would lead to less starvation than any type of government.
The term market failure refers to when unregulated markets fail to provide the optimal social good. This can be for a variety of reasons. Besides monopoly, corporations sometimes can't see what's in their best interest. They make bad decisions. The music companies are a good example -- they were so scared of the internet that they didn't see its potential as a medium for promotion and distribution. Another cause of market failure is when moral value and monetary value do not equate. I would argue that the life of a poor person has considerable moral value. But because they're not likely to spend a lot of money, there's no reason for corporations to cater to them.
Communism is a perfect system. It has never existed and probably will never exist due to humanity's greedy nature. Ideally there should be no problems of mismanagement in a true commiunist system.
Communism is a fucked up system that doesn't work. If we met your criteria for a perfect system, I could argue that an absolute dictatorship is a perfect system... we've just never found the right dictator. Ideally, dictators wouldn't be human beings. They'd be angels from heaven.
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In most capitalist economies, there are ways for one corporation to become so powerful it can kill off all competition. We call this a monopoly. In a society under "free-market anarchism", what would keep one or more companies from becoming so powerful they're able to manipulate all the other companies -- protection/insurance companies included -- into doing what that company wants, and not what's best for the market? When there is no competition, the market will never operate at peak efficiency.
Well, the worst case scenario is that you would end up with a government again. As for monopolies, they are not necessarily bad. If they arise because they produce the best product at the lowest price, then they are a good thing. If they arise because use coercive measures to force competitors out of business, then they are bad. This is exactly what government does. In a free market, people could simply decide to take their business elsewhere. Under government, we have no such choice.
The protection agency idea is flawed on so many levels. Money is a form of power, yes, but force is an even stronger source of power. Why would a protection agency protect when it could extort?
This is exactly what government does. If a company did start doing this, people would turn to other companies, unlike now where we don't have the choice to.
If you have the military means to protect a region, you also have the power to rule it. This would be a much more profitable for the protection agency. You wouldn't have protection agencies, you'd have warlords. From there, each protection agency will want to further expand its power by gaining control over other regions. Eventually, it will be contesting territory held by another agency. War is a terrific stimulus to help get an economy industrialized, but it is a terrible waste of resources. Instead of going back into society to help the economy grow, everything will be used for the war. The standard of living for people living under these protectorates will diminish considerably.
You're assuming that everyone is evil here. Even if everyone was evil enough that this was a realistic option, you'd be no worse off then the perpetual warfare of current governments.
That seemed to me like the biggest problem. The second issue has to do with public works. Who would invest in infrastructure like roads or dams? The cost of such investments and the free-rider problem make them infeasible and unprofitable for private companies. The good they do for society however, is considerable. Say by building a system of freeways across this continent you can increase productivity by 15% continent-wide. Yet the cost is beyond what any one company can afford. A bunch of companies come together and say "we need a these roads." Company A, which imports fish and currently distributes them using trains, stands to gain the most. Company B, however, competes with company A in areas trains don't reach. Company B refuses to contribute to the road. Company A can't afford it himself. The road does not get built. Everyone suffers.
If roads get bad, people will complain to the company that owns them. Kind of like how people complain to their local government now when roads get bad. Currently, the gov can put it off since they still collect taxes either way. But if a private firm ignored the complaints of its customers, then they could shop elsewhere so the private firm has much more incentive to fix its roads. As for the free-rider issue, it again relates to the deeply flawed 'public goods' theory.
Good article:
http://mises.org/journals/rae/pdf/RAE4_1_4.pdf
Finally, and this isn't a critical problem like the above two, but it is substantial. Free markets can actually be less efficient than a government-run organization. A good example is private health care. It's estimated about 30% of the cost of health care in the US is due to the staggering size of the health care bureaucracy. The more private agencies you have, the more redundancy develops. Instead of one, centralized database, there are hundreds. Ten people are doing the same job, ten times over, that under a consolidated organization, one person could do. Etc. etc.
There is no reason to think that healthcare would be better off in government hands, unless you think that every industry should be better off in government hands. If you want to discuss the merits of communism, please start your own blog on that.
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Mafias can only exist BECAUSE of government. Mafias exist where police are NOT doing a good job of protecting people. In a free society, if one firm wasn't doing a good job, then people could turn to another firm. In government states, people have no other option so they have to deal with the mafia, and they still have to pay for the police.
Why would any firm be interested in doing a better job if it can make more money by letting the mafia bribe it?
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One last thing about roads -
A monopoly on roads is more efficient than competition. How do you propose two organizations compete to build a highway from Washington to Alaska? Build two massive highways? I somehow doubt that private companies will be able to compete to the point where its cheaper to construct two separately competing highways than one noncompetitive highway.
If you would drop the whole anarchist thing and become an eminently more reasonable minarchist or libertarian, we could talk about a lot of other, less ridiculous things. Anarcho-capitalism is just full of ridiculous problems.
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As for the free-rider issue, it again relates to the deeply flawed 'public goods' theory.
I've addressed this issue at the top of the page; you might have missed it since our posts have lag time.
Well, the worst case scenario is that you would end up with a government again.
Yes, but a government which the people have no control over.
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Well, the worst case scenario is that you would end up with a government again. As for monopolies, they are not necessarily bad. If they arise because they produce the best product at the lowest price, then they are a good thing. If they arise because use coercive measures to force competitors out of business, then they are bad. This is exactly what government does. In a free market, people could simply decide to take their business elsewhere. Under government, we have no such choice.
Ideally, monopolies are formed because they produce the best product at the lowest prices. When they become monopolies there's no reason for them to keep producing the best product. Without competition, companies will charge a price that is most cost-effective for them, which is normally way above the market price. There's also no incentive for them to improve their product. Microsoft and the browser wars is a good example. IE sucked for along time. It wasn't standards compliant, it lacked basic features like tabbed browsing, etc. Then Firefox started eating at their share. Now, IE8 is standards compliant and has all kinds of useful features. It took competition for microsoft to start improving their product.
You're assuming that everyone is evil here. Even if everyone was evil enough that this was a realistic option, you'd be no worse off then the perpetual warfare of current governments.
Democratic governments at least are self regulating. I'm not assuming everyone is evil. I'm assuming people will behave the way they've continued to behave for the last ten millenia.
This is exactly what government does. If a company did start doing this, people would turn to other companies, unlike now where we don't have the choice to.
When somebody has military control over your city, you don't HAVE any choices. You're under their control.
If roads get bad, people will complain to the company that owns them. Kind of like how people complain to their local government now when roads get bad. Currently, the gov can put it off since they still collect taxes either way. But if a private firm ignored the complaints of its customers, then they could shop elsewhere so the private firm has much more incentive to fix its roads. As for the free-rider issue, it again relates to the deeply flawed 'public goods' theory.
That's not what I was talking about. I was referring to goods that no one company could afford to build, but that would benefit everybody. Without a government, these goods never get built.
You're too idealistic. There is only one road. I do not have a choice of roads. I have to go to work. I have to pick up my kid from soccer practice. I can complain to the road making company all day, but as I don't have any choice except to use their roads, why would they listen?
There is no reason to think that healthcare would be better off in government hands, unless you think that every industry should be better off in government hands. If you want to discuss the merits of communism, please start your own blog on that.
Why? I mean, give us some reasons at least. You're not convincing anyone just by making unsubstantiated claims.
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On March 08 2008 12:50 EmeraldSparks wrote:
I print money. I print more money than can be redeemed. My investments go under. People run the bank. Most people are left without any money.
That would be possible, just like it is possible now. Anarchy isn't flawless, but imo it is better than any other system.
The article rests itself basically rests itself on the idea that altruism will make people cease to be free riders.
No, people will pay for goods if they have a reason to. There is no empircal evidence (that I'm aware of) to support the idea that in a 'free riders' situation, nothing would get done. People commonly will cite the use of lighthouses, but private firms built lighthouses and ran them more efficiently then government.
Here is a good article on that that gets into specific examples:
http://mises.org/journals/scholar/Sechrest7.pdf
This is, for free-market anarchists and libertarians, a very dangerous. For one thing, the "communism has no incentives" argument (or "taxes lower incentives"), you can throw way since I can just claim, "well everybody is going to be altruistic so nobody will shirk. It's a lose-lose for you.
Anarchy does not rely on altruism, communism does. You might as well say every gov relies on altruism if you want to paint it that way (which has some truth to it, depends on how altruistic you mean).
In addition, it's pretty hung-up on the specifics of national defense. Try crime, then. Sure, you won't catch the thief if they steal from my house - but you will pay to catch thieves in the neighborhood.
It covers national defense alot because that is probably the most common argument against anarchism. Not sure what you mean about the crime thing.
Suppose I hold the lifeblood of a city. What stops me from gouging said city?
Competing firms, but its just as realistic to assume a government would do that.. they don't even have to deal with competition.
An organization has to be set up to allocate the airwaves. Otherwise you get intereference and general failure.
Radio companies would most likely come to an agreement on this.
Free-rider problem. Also, suppose a set of consumers isn't impacted.
Ignoring the free rider 'problem', why should you force a set of consumers that doesn't care about pollution to care about pollution? That sounds unethical to me.
There's that whole altruism thing again. You should look into communism.
Again, not saying its perfect, just that it would work better than any other system. And plenty of people are charitable.
What forces an organization to respect said arbitrators? Suppose I don't like the verdict and I ignore it. Now what?
K this part gets complicated. Check this link:
http://www.mises.org/rothbard/newlibertywhole.asp#p215
Scroll down to Chapter 12: The Public Sector, III: Police, Law, and the Courts.
And read the part about the courts, if you still take issue after that I will try to argue the anarchists perspective as best I can.
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On March 08 2008 12:50 CaptainMurphy wrote:
[QUOTEThere's a reason governments have checks and balances. And how often has an army turned on its people?
That's what I'm saying. The idea of one firm growing huge then dominating then turning on civilians is as likely as the army doing it. People just aren't that evil.
Take a look at the mafia - that's the kind of people you would have running security in absence of a government.
Mafias can only exist BECAUSE of government. Mafias exist where police are NOT doing a good job of protecting people. In a free society, if one firm wasn't doing a good job, then people could turn to another firm. In government states, people have no other option so they have to deal with the mafia, and they still have to pay for the police (which are really just a legalized mafia.)
Take a look at drugs - theoretically nonviolence should be cheaper, but that's simply not the case. It's misleading to blame it on the government for making drugs illegal - the drug business is not violent because of the inherent illegal nature of drugs, it is violent because the government does not enforce property rights for said producers/distributors.
Not quite sure what you mean, but most of the violence surrounding the drug market would go away in an instant if drugs were legalized.
Hardly arbitrary.
It is arbitrary, they can't know what the real market price is going to be without letting the real market work. So they set a price, which is going to be either a ceiling under market clearing price or a floor above market clearing price, and you have market failure.
You can come up with systems where nobody will starve, such as anarcho-capitalism + the guarantee of food. As people can theoretically starve under anarcho-capitalism, this is not true.
There is no feasible system where no one starves, but if you want to advocate for one, start your own blog :p
[/QUOTE]
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On March 08 2008 12:59 Macavenger wrote:
Something I've always wanted to ask a firm believer in the free market, but have never had a chance:
Please explain how it should be possible for a private corporation (which must necessarily have a profit motive, if there is no public sector and everyone must make their own living) to provide a service needed by everyone (i.e. health care, education) as affordably as a government agency with no profit motive.
If a private corporation is not providing adequate service, then a competing corporation has the economic incentive to offer better service at a lower price. The government doesn't have the incentive to do this because it collects taxes either way. It's profit isn't tied to consumer satisfaction.
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Hi. I'm a researcher. I depend on massive grants from the government and nearly none of my work pays for itself, but eventually a nugget of incredibly knowledge will be discovered from one of me and my ilk and billions in profit will be had. I also depend on other companies, which depend on the same type of person that I am.
Oh wait, I'm not welcome in your world? : (.
Guess we can forget about going into space too.
War is expensive. There is no reason companies would actively seek conflict, and no they wouldn't be totalitarian. War is profitable. Why do you think it keeps happening? On a personal level: I buy a gun. I shoot you in the head. Now i rape your wife, sell your kids into slavery, and liquidate all your assets. Pretty goddam huge payoff. Scale that up a bit, and that's war.
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How would legally binding contracts hold any value then if the government stays completely out of the economic picture? Business deals would mean nothing, they would be based solely off peoples words and reputations. Which never really means much :/
Think about this, what about your idea about the free market, it worked well for a while in american history, around 150 years, and the economy always got back on its own 2 feet, up until the great depression, where President Hoover let the economy stay the way it was and figured it would solve it's own problems, which never happened it took a new president in FDR to bring the economy more so under the governments watch, to make sure it didn't happen again. Becuase it couldn't stand by itself again.
If you were to suggest that we are strong enough of a country economically right now to not need governemnt, that would be wrong, since the bush era our economy has been slipping and we are falling more and more into dept. Your idea of a free market would lead to a depression on an even worse scale, due to the fact of the many threats we are under now, as comapired to the late 1930's and early 1940's. Now we must deal with other countries of similiar power to us, who aren't in an economic depression (Many countries were still recovering from WW1, especially the main powers, IE any potential threats to the U.S.) Right now and for the future, China is just getting stronger, so is japan. Then we have psychotic countries like North Korea, and Nutjobs like the leader of Iran whose name escapes me who for any sign of weakness would gladly nuke the hell out of us.
Then my question is now, would you really want to risk the potential hazards that come with a free market, a depression and then horrible wars? Which is entirely possible if we were to continue in the directin we are heading without any help. Admitadly bush is a retard, and that didn't help much.
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On March 08 2008 13:21 CaptainMurphy wrote:Show nested quote +On March 08 2008 12:59 Macavenger wrote:
Something I've always wanted to ask a firm believer in the free market, but have never had a chance:
Please explain how it should be possible for a private corporation (which must necessarily have a profit motive, if there is no public sector and everyone must make their own living) to provide a service needed by everyone (i.e. health care, education) as affordably as a government agency with no profit motive. If a private corporation is not providing adequate service, then a competing corporation has the economic incentive to offer better service at a lower price. The government doesn't have the incentive to do this because it collects taxes either way. It's profit isn't tied to consumer satisfaction.
Yes, but once a corporation has become powerful it can make it difficult/impossible for another firm to encroach on their territory. You can't just cherry pick which parts of economics you support based on what you want to be true. The powerful use their power to keep themselves powerful, period.
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That would be possible, just like it is possible now. Anarchy isn't flawless, but imo it is better than any other system.
Um. FDIC? Bank regulation? None of this rings a bell?
http://mises.org/journals/scholar/Sechrest7.pdf
As for lighthouses, there isn't too much information for me to look at. I would hazard that there are few enough shippers that free-riding is less of a problem, but again there isn't very much information. As for privateers, it's very easy to not protect a number of ships. It's harder not to protect Kanasas when you're protecting all the states around it.
Anarchy does not rely on altruism, communism does. You might as well say every gov relies on altruism if you want to paint it that way (which has some truth to it, depends on how altruistic you mean).
In the article you cite, at the bottom where the author points asks, "so why does classical public-goods analysis fail," he says that the answer is altruism. Your economist, not mine.
It covers national defense alot because that is probably the most common argument against anarchism. Not sure what you mean about the crime thing.
I benefit when you pay for protection. Easy.
Competing firms, but its just as realistic to assume a government would do that.. they don't even have to deal with competition.
No, because governments are accountable to the people. If a government needs to do something it needs to pass a law to do something. If a legislature were to try to pass said legislation and reap the profits, everyone supporting it would be impeached (and they wouldn't see any of the profits anyway). Nothing like this exists for private companies.
Ignoring the free rider 'problem', why should you force a set of consumers that doesn't care about pollution to care about pollution? That sounds unethical to me.
Suppose I'm polluting in New England and selling in England.
K this part gets complicated. Check this link:
I'll have a look at that.
[[EDIT]] I'm assuming you mean a somewhat democratic country. If we're considernig a totalitarian government, I might have to concede that anarcho-capitalism might be slightly better.
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