Comment by javert | Hacker News Reader

Comment by javert | Hacker News Reader

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Thank you for posting a detailed comment.

> The data is clear - single payer systems achieve lower prices thanks to having MONOPSONY POWER over the market

The data is clear that a free market for healthcare would do even better than a single payer system. I seriously believe that. But this is the problem with "the data is clear"-based arguments. I won't convince you by saying that "the data is clear" because it's much more complicated, and that's why you also won't convince me by saying that.

Now I get that in a narrow sense your data is clearer than mine: we have the U.S. system and we have single-payer systems, and we can see that the latter are better. But we don't have a comparison point for a free market in healthcare. Although I think there is enough data to conclude that it would be far superior, by the criterion you are using---simply comparing the systems we have in the world today directly to one another---there is a gap missing; we don't have data on a free market in health care. So technically, you don't know that single payer is better than a free market in healthcare.

If you have a free market for MOOCs, coding schools, etc., people will exercise their economic judgement such that good schools win and bad schools die out. If you have the government pay for it, it will be an inherently vicious process that will reward the schools that are best able to solicit funding and it will end up in the same place the 4-year colleges did.

Greece probably didn't do better on the Drachma, it probably just hadn't had the pendulum swing back the other way again (i.e. come down from the sugar high). I mean, that's my guess, based on my economic views. This goes back to the "the data is clear" issue... causation is really complicated to understand.

I'm sorry but I don't believe in local currencies. If there is an honest and sound money, people will always prefer it. I think that is what we should work towards. But props to you for making something. I think people should be free to choose any currency they like, including a local currency.

In a free market both sides compete. In a single payer system only providers compete. Basic macroeconomic models predict that prices would be lower, and in fact the data shows this. Now you can say that a free market doesn’t exist, but then what is the use of your theories? You don’t adjust them by encountering any data. If I am wrong, tell me what data you have ever encountered to make you change your theories about the free market and government?

BTW I believe free markets do exist, and have always existed - at the highest levels of human organization. Today this is international markets. There is no monopoly of force. And I would like to see data that these markets are more efficient and less susceptible to, say, cornering (eg the Bank of England by George Soros, or international prices of bread/metals/etc. by Goldman Sachs) than managed markets like the US Public Stock Markets.

“If there is an honest and sound money, people will always prefer it”.

Actually Gresham’s law says the opposite. If the exchange rate is set by law them BAD MONEY will drive out the good. That’s because money is a means of exchange, more than it is a store of value. The means of exchange is always the thing you want to get rid of and others will take. The store of value is what you want to hoard. Even Aristophanes realized this thousands of years ago:

https://mises.org/library/aristophanes-inflation

I'm saying a free market doesn't exist in healthcare. It exists in lots of other areas. We can see that free markets always perform better, and non-free markets are always dysfunctional directly in proportion to the degree of government intervention. There is an overwhelming amount of "data" supporting this. The data is all around us and goes back through history clearly to the Industrial Revolution. But the data also goes even further back; it explains why the Industrial Revolution happened only in certain places and why certain countries are are extremely far ahead of others. But understanding all this requires looking carefully at causation. It's not something you can capture in a study. That's why I put "data" in quotes the first time.

> I believe free markets do exist, and have always existed - at the highest levels of human organization.

A free market exists when force is barred. The U.S. came close to a free market at the time of its founding and has become progressively more unfree since. Western European countries (particularly England and France, sometimes Germany) have a similar but less pronounced trajectory over the same span of time. International politics is not a free market; it's a collection of armed "gangs" (effectively) that all can use force against one another. Tariffs are also a serious use of force and violation of a free market.

A free market literally just means "no force is allowed." If you don't like the term "free market" being used that way, just replace every instance in my comment with "no force is allowed." I'm not interested in arguing about the names of concepts and principles; only about concepts and principles.

Gresham's Law is designed to account for a legal tender situation where there are forms of money with the same nominal value under the law but different real value. I will quote a section from Wikipedia which I agree with:

"Those examples show that in the absence of effective legal tender laws, Gresham's Law works in reverse. If given the choice of what money to accept, people will transact with money they believe to be of highest long-term value. However, if not given the choice and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their possession and to pass on the bad money to someone else." [1]

I mean, we don't need to trust Wikipedia to see this. People prefer to use the most liquid token of exchange for all transactions, though it also needs to be durable, fungible, etc. The most liquid "token" (and it could even be a commodity) then becomes the best store of value because it is used in transactions. There will never be a place where one money doesn't drive out the other (good drives out the less-good) because one will be more liquid than the other. The whole point of money is just to be something you can trade for anything because everyone will trade it for anything. It solves the "coincidence of wants" problem in a barter economy---the fact that if you are a fisherman and I am an apple grower, I can't buy fish unless you want apples and vice versa. Pardon me for being pedantic; at this point I've gotten into territory that you've very likely encountered before.

People would prefer a sound and honest money if there were one. Bitcoin was designed to meet these criteria if it were to become liquid enough; maybe some day it will be, or maybe not. Gold was a sound and honest money, but world governments got us to slowly get off gold, one step at a time. So now it doesn't have enough liquidity and is anyway on shaky ground legally.

[1]: https://en.wikipedia.org/wiki/Gresham%27s_law

"A free market exists when force is barred. The U.S. came close to a free market at the time of its founding and has become progressively more unfree since"

A large part of the population was forced to enage in hard labor for nothing under a terroristic regime - creating an enormous amount of value (by 1860, the "mortgage" value of US slaves was greater than the value of the entire industrial plant). Women had no property rights. There was an ongoing genocide of native americans and wholesale siezure of their property.

That's a valid disclaimer, but you have completely failed to interact with what I'm saying.

It's like you've found a typo in a mathematical treatise that doesn't really effect the correctness of the treatise, and gleefully declared the entire thing to be incorrect.

365,000 Americans on the Union side died to end slavery in America, and that conflict was inexorably set in motion by our founding documents that stated that all men are created equal---a revolutionary idea at the time. Today's American government is the same government that eradicated slavery (i.e., the Union).

Regarding Native Americans: The U.S. was the first country in history to declare outright butchery of other ethnic groups barbaric, yet gets the most blame for doing it. The Europeans were still doing it long after the U.S. (e.g. Germany, Russia). You are just trying to find ways to rhetorically "bring down" what was historically the country that actually set the precedent for not brutalizing people. What the U.S. did, and then immediately declared barbaric, the rest of the world had been doing for all of time (and much of it continued, and now continues in China).

edit: Also, the Native Americans didn't have property. They just all used the land around them. Property is something you get when you have organized property rights. If the Native Americans had had that, they would have been set up like a European nation. And if the colonists had slaughtered and taken over something like that (an organized nation), nobody would complain, because that's what European nations had always done, were doing, and continued to do afterwards. It was always survival of the fittest in Europe. It's only when people want to America-bash that Americans are held to a higher standard than everyone else.

Also, American women had property rights; don't know what that's about. I imagine there are nuances we could argue about but let's not.

The whole thing is incorrect. You claim "The U.S. came close to a free market at the time of its founding and has become progressively more unfree since" even though "at the time of its founding" the US economy significantly depended on slave labor and wholesale theft of land from Native American tribes. What kind of free market operating without force do you have when millions of human beings are under the lash? As for your excuse for the theft of Native American land, the inability of the native Americans to defend their property or to organize property law as Europeans did in no way makes the violent theft of their land some operation of free markets without coercion. As for women, look up "coverture" (https://ap.gilderlehrman.org/essay/legal-status-women-1776%C... ) Your whole story is a fantasy.

> What kind of free market operating without force do you have when millions of human beings are under the lash?

Ironically, a far freer market than we have today, as long as you were white.

I don't think the economy of the North depended much or at all on the South. The South was in the business of exporting cotton to Europe. Also, the South was basically an economic backwater that was falling increasingly far behind. In terms of population, the North had 18.5 million and the South had 5.5 million free people and 3.5 million slaves.

> in no way makes the violent theft of their land some operation of free markets without coercion

I didn't understand before that your point about Native Americans was supposed to be a counterexample to free markets. I don't see it that way. A free market is about what happens within the borders of a country. Conquering more land is about expanding the borders of a country.

> As for women, look up "coverture"

I think you are making too much of this. According to your source, non-married women seem to have had the same rights as men. Families acted as a unit with the husband nominally in charge. I think that was reasonable for the level of development at the time and not as different from today as people think. Joint control of a family between husband and wife, as we have now, is only practicable when there is the release valve of divorce. Divorce would not have been very realistic in the 18th century because once a man has children with a woman you couldn't just take back your responsibility to her. There are a lot of factors that play into this like the lack of birth control, the need to produce many children to work on the farm, the need for there to be someone to raise children, etc. Modern technology is what has enabled women to be raised to the equal of men in practice, not just a change in the culture's view of women. Anyway, I don't think this issue is very relevant to the question of whether or not there was a free market.

>a far freer market than we have today, as long as you were white

Except for the iceberg, the Titanic sailed safely. You don't know anything about the economics of US slavery - which was enormously big business and affected the entire development of the US economy.

Your theory about stealing native american land is ridiculous. There is no free market if your economy depends on piracy. You're trying to use some legalistic card trick to pretend that something is not what it is.

Married women had no property rights: therefore they could not be participants in a free market.

You have a narrative totally at variance with actual history, but it fits some ideological point you want to make. You would be better off trying to understand why your ideology is so incompatible with empirical reality. The end.

Look, the point I made that started this conversation is that there is a lot of evidence in U.S. history that free markets work extremely well. You are not dealing with that at all. There are two issues with your arguments.

a) Most of your arguments are about freedom as such, not the economics of a free market. Slavery, women's rights, and native american land appropriation fall under this.

b) It's not a black and white issue. If it's 80% a free market, finding examples in the 20% does not invalidate my point.

> You don't know anything about the economics of US slavery

I know a lot about the economics of US slavery. It's fine to disagree with something in particular, but what you have said here is not a valid part of an honest discussion.

Plus, if you are so hung up on slavery, we could have just shifted the conversation to post-1865 and I would make the same point: free markets work well and that is borne out by history.

> Your theory about stealing native american land is ridiculous. There is no free market if your economy depends on piracy. You're trying to use some legalistic card trick to pretend that something is not what it is.

I don't have a "theory." The colonizers took the land. I don't think that affects my thesis. As to the rest of what you say here, see point (b).

> Married women had no property rights: therefore they could not be participants in a free market.

That does not follow at all. When a married woman goes to the market to buy produce, she's participating in the free market.

> You have a narrative totally at variance with actual history, but it fits some ideological point you want to make. You would be better off trying to understand why your ideology is so incompatible with empirical reality. The end.

This is not a valid thing to say in an honest discussion. I believe that you honestly think I'm being dishonest, but I'm not. Nothing else can be said.

We have let this discussion get the best of us---we should have stopped it several comments back. I know this is not appropriate for HN. I'm not going to respond further. I would go back and delete the whole conversation if I could but I think that would be even worse.

> Most of your arguments are about freedom as such, not the economics of a free market. Slavery, women's rights, and native american land appropriation fall under this.

There is no free market in labor under the rule of "do this work or I will whip you to death or worse." There is no free market in real-estate under the "we are going to murder your entire community and take the land". You have a misleading story about economics/government which only works if you discount the brutal grotesque treatment of captive labor as if the human beings caught up in the machinery of slavery don't matter. That's not just bad history, it is morally repellent.

I have heard your arguments many times from people and understand them (after 10 years of discussion). At some point I espoused them myself.

I have the following points to make (consider them questions you can answer in detail if you want).

1. Who enforces “no force allowed”? For example in the international markets for labor, currency, and other goods, there is no world police or monopoly on force through a one world government. Sure, countries can have armies. And the same on the individual level - how do you prevent marauders from using force unless you join into an entity with even larger defensive force? That entity will enforce “no force allowed” with force of its own. So even on its own terms, your “free market” system requirement requires a monopoly of force.

2. What if the “sound money” tends to be very expensive to move? Then banks tend to issue representative money or debt denominated in the “sound money” and that is what’s traded every day. It also has the advantage of being reversible so you don’t, for example, have people kidnapped for Bitcoin ransoms. Our current monetary system is largely “seller beware”, instead of “buyer beware”. Presumably, sellers of consumer goods are far larger organizations than buyers, and engage in far more transactions in a given product, and thus can better absorb the cost and quality control to minimize chargebacks and disputes etc.

3. If something is going up in price over time, people want to hoard it not spend it. On the other hand if something is gradually decreasing in price, people want to spend it. These are two sides of the same coin (pun intended). A deflationary currency would NOT be the one that’s actually being spent day to day, but only to occasionally settle debts from everyday transactions. So it depends what you mean by “used” but in terms of frequency, the more “sound” the money is, the LESS FREQUENTLY it is used. For each person who is willing to accept it, there is a person who doesn’t want to give it. Because in practice, the buyer will choose from among all possible payment options the seller offers, and choose the “worst money” to get rid of first. And sellers will compete in a race for who will accept the widest forms of payment (credit cards, venmo, whatsapp or whatever) to get more business.

In Capitalism, sellers are always in a race to the bottom unless there is a monopoly. It’s great for consumers but they are also the ones who get to choose among payment options and thus the WORST MONEY will be more frequently in consumer transactions (for goods and services).

1. A free market requires that the government exercise a monopoly on force, using force. Only the government should be allowed to use force and it should be minimized. International politics will always be a state of nature but treaties and free trade agreements can be good.

2. If the sound money is very expensive to move, people will issue bank notes. I think you are right about that. However, if there are two equally good monies, except that one can be used directly instead of using an intermediary layer (like bank notes), the one that can be used directly will win out in the market and the other one will disappear from use. Because it's less risky when there is no intermediary layer. Then again, there may be use cases when you want reversibility, and then people would use an intermediary (like PayPal). Going through an intermediary some of the time doesn't really create a different currency. For instance, Tethers (which are nominally worth 1 US dollar each) aren't really a different currency (although that's not an ideal example since Tether is so shady; perhaps Gemini Dollars is better).

3. Imagine you have Greatcoin and Shitcoin and those are the two currencies. Merchants take Shitcoin but they immediately convert it to Greatcoin (which holds its value better, or perhaps is deflationary). Consumers don't want Shitcoin, so they also immediately convert it to Greatcoin. Everybody wants Greatcoin in their bank account/digital wallet; nobody wants Shitcoin. I think you can see where this is going. Next time I go to the merchant and try to pay with Shitcoin he's going to say "Come on man, I don't want that shit. Just keep all your money in Greatcoin, which you want to do anyway, and don't convert to Shitcoin before you pay me, and I won't have to convert your Shitcoin to Greatcoin." Then Shitcoin goes away.

1. OK so in your definition, a free market requires a monopoly on force, using force. In mine, a free market has NO monopoly on force, so international markets are an example. And I compare them with markets that have government intervening, like public stock markets. How are they better?

2 and 3. Well what if the seller says "Come on man, I don't want that shit" and the buyer says "Well your competitor will take my shitcoin, so I'm going to buy from them?"

You're only looking at possible trends in one direction, namely sellers "winning" the argument with buyers and phasing out acceptance of shitcoin. But why did they accept shitcoin in the first place? Why accept Visa, WeChat or a check when you have to trust a third party bank, rather than just cash? Because it's more convenient for the buyer. If sellers provide various options, the buyers will choose the ones they want to use. Do you think sellers LIKE to deal with VISA chargebacks disputes and other crap, when they can just take your cash and say kthanxbai? In Capitalism, the pressure is on the sellers to accomodate buyers, so what about the other way ... buyers want to get rid of shitcoins?

Not to mention that the government will want to do UBI or single payer programs like SNAP food stamps or medical insurance and guess what, most doctors will prefer to take that instead of ONLY accepting direct payments. And even when they accept direct payments they are OK with VISA and paying 3% transaction fee. Why? Because many buyers have trouble paying cash at the moment, but the government or a bank has supplied them with shitcoin money. And that's my point ... a lot of economic activity can get done that way, and both sellers and buyers prefer it. And sellers accommodate buyers because often the buyers don't have any other type of payment. They've paid into their insurance. Do you think doctors LIKE to negotiate with insurance companies? But they would rather get that, than lose a customer.

1. I'm not really sure what you are asking. If this helps, what I want (and what I call a free market) is a situation where people are free to make their own decisions because the use of non-preventative force is barred. The government uses preventative force to prevent other people from using force. This is a "domestic" issue. It doesn't really have anything to do with international relations.

2 and 3. If you go back to my example, customers don't want Shitcoin in the first place, so realistically, they would never seek to obtain it. So it isn't really the case that customers are trying to get merchants to take their Shitcoin. There just isn't any point in using it at all. The reason "bad money drives out the good" in Gresham's law is because the government puts the bad money into the economy. Absent something like that, bad money just isn't wanted and nobody keeps it. If they get it they immediately convert it to a good currency, so if it pops into existence somehow, it immediately goes out of existence. Visa and Paypal and whatnot are not different currencies. They are different payment mechanisms. I agree with you that customers and merchants would likely want to use multiple of these, and that merchants would be driven to accept all the common payment mechanisms.

This has been a worthwhile discussion and I'm sure we could keep going, but I really have to take a break from hacker news for a while. So let's call it a day. If you want to read about free markets, check out the book Capitalism: The Unknown Ideal by Ayn Rand if you haven't already.

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