Eliezer Yudkowsky: Is That Your True Rejection?
cato-unbound.org
cato-unbound.org
Representative democracies are kind of a hack to this law. You try to pick somebody to represent you and make decisions, you split up powers among various competing branches of government, etc. What is happening in the west, though, is the idea of a "restart" is mostly gone. It's just the same guys wearing different hats that take turns ruling.
But to me these are properties of how systems of people operate. The word "government" has little to do with it. The reason to fight as hard as possible for individual freedom has nothing to do with selfishness: the more freedom the individual retains, the less the stakes are, and the slower the process of system corruption becomes. My ultimate rejection would be a demonstration of a stable, creative, dynamic, adaptive, and productively chaotic society of non-trivial size that had been in existence for more than a century or so. Hate to set the bar that high. Need to think about that some more to see if I could make my position more logically approachable.
That said, you've made two claims in your post:
1. All groups will get worse over time
2. Therefore, we should keep government as small as possible
The refutation to the argument is that many other modern democracies have (proportionally) bigger governments than the US. These countries certainly get advantages from big governments (like social welfare, decent education systems, state sponsored medical attention, etc) but don't seem to pay much of a cost for it.
As an Australian citizen, I will get paid a dole if I can't find work, all my important medical expenses are covered or heavily subsidised, our schools are decent everywhere, and so on. My taxes are a bit higher than yours, but not unreasonably so.
I suspect the important difference might just be scale - Australia has just 20M people. Most European countries have similar sizes. Maybe if the US were lots of small countries instead it would work better? Its hard to tell...
From the systems standpoint, Google is great. People continue to think that if we just got the right people -- smart, college-educated, libertarians, whatever -- that systems wouldn't ossify. But until you've seen a group of brilliant people self-create themselves a living hell, and realize that each person was acting in a reasonable, intelligent fashion, it's tough to really grok that. We naturally want to assign blame. It prevents us from doing the meta thinking necessary. One of the reasons democracies work so well is that we can easily assign personal blame to a politician, then peacefully get rid of him and bring somebody else in. There's a tremendously useful social mechanism at work.
I think there's a separate discussion about what you want government to do for you. I've gotten to the point where after listening to so many idealists on both the left and right I just gave up: whatever your social goals, that's fine. I just want an acknowledgement that you are aware of he trade-offs you are creating. I prefer lots of little, agile, self-optimizing systems. I think over time people could probably reach many of the social goals they have. But to do so you need to have the right tools. You'll never get from point A to point B trying to use a screwdriver as a hammer.
As an example a lot of us can relate to, there are a lot of technology teams with a huge amount of personal freedom that have all sorts of benefits and create vast amounts of value. We got that way by millions of little failures from which we harvest some generic best practices that then we pick up, try, and adapt one bit at a time for that particular situation. But there are even more folks, hundreds of thousands of people, living a death march because they tried to create huge systems with lots of little rules and processes. These huge systems never spring forth fully-formed from the head of Zeus. When you really start looking at them, it's a story of incrementalism and tough trade-offs. Everybody has a little architecture astronaut inside of them. Maybe not a lot, but enough to cumulatively screw things up given enough scale and time. If anything, smart people are the worst at this. They can even understand my points and try as hard as they can not to do it -- and still do it. Hominids are funny creatures.
I'd just like to point out that we don't have a proper social welfare system here in the US, so it doesn't make sense to say that it might work better if we were a smaller country. The US has to actually enact a European-style social welfare system before anyone can empirically claim that social welfare doesn't work in the US.
Most countries with systems more extensive than those of the US tend to be poorer than the US.
http://super-economy.blogspot.com/2010/03/super-economy-in-o...
http://super-economy.blogspot.com/2010/03/income-distributio...
http://super-economy.blogspot.com/2010/01/dynamic-america-po...
Also, we have social welfare, stated sponsored medical attention, and decent education systems in the US. Where did you get the idea we lack these things?
As an Australian who has spent a fair amount of time in the states I would argue with those points. Sure, you have those things, (not sure about 'decent' education system) but they certainly don't function as efficiently as ours do, as far as I can tell..
http://super-economy.blogspot.com/2010/12/amazing-truth-abou...
The USA is used as a strawman in Australian politics. "We don't want to go down the American path" is an actual phrase in wide circulation.
And if you can only find minimum wage work, you'll still be better off than most Americans or Britons.
It seems to me that these are not monotonically true. If I have a handful of competent allies in the wilderness or in hostile territory, I'm better off. Language is a complex system and an infrastructure; more complex language has costs vs. an exceedingly simple language, but increased complexity is very frequently a big net positive.
You might argue that size, age, and complexity of systems are correlated with poor results, but you can not use that to exclude the possibility that maximum results can be obtained by some large, complex (undiscovered) system.
It's reasonable to argue that the direction some country should move in today is towards libertarianism; maybe that is the direction to a useful local maximum. But you're arguing for a very strong and simple heuristic that would allow you to dismiss without evaluation any large, complex system; that seems to me to be a critical error.
Notoriously lacking a central authority. Small l, or Big L?
Internet?
Randomness creates self enforcing systems, like the "I break it in half, then you pick" method of splitting a candy bar.
First, there is no "the Greeks" here. You seem to be talking about ancient Athens. (Sorry if that's overly pedantic, but ancient Greece was not at all monolithic.)
Second, parts of Athenian democracy involved lots, but by no means all of it. In particular, the ten annual generals were elected precisely because they were supposed to be experts.
Third, there wasn't really any competency criterion for the positions held by lot. (This is one reason Plato disliked democracy so much - that theoretically unqualified people could speak in the assembly and hold office.)
Fourth, the jobs of the people who were chosen by lot were mostly bureaucratic. As Wikipedia puts it "The powers of officials were precisely defined and their capacity for initiative limited. They administered rather than governed."[1]
Finally, politics and petty personal infighting was a huge problem in ancient Athens (ostracism?[2]). The whole "You did your job right because it was your responsibility, and you'd hate to see the job done improperly." is nostalgia for a world that never was.
[1] http://en.wikipedia.org/wiki/Athenian_democracy#Selection_by...
Entrenched power in a group of >2 people works the same way. In the case of the US Government, most Americans don't seriously consider any other country of residence, so our leaders get away with all sorts of disgraceful acts.
Without competition there will always be corruption.
Due to a fluke of the geography and history of the US, it has been difficult for the central government to get all that strong. In the past it had to do things like build out cities over marsh land (New Orleans) or provide useful services (like the post office, railways). But now that it has a hold on power, our entitlement system is broken and most of the tax dollars flow to special interests (the military, oil industry, healthcare, finance).
So I think your observation is true, but due to a more general principle... which is the innate brutality of all humans when granted power over others.
Also, I am not sure what you are trying to say about sex in marriage. It sounds like you are trying to say that men are held back from mistreating spouses only because they can't get away with it. Is that true? I have witnessed first hand that that can happen, but it was in a very poor society. Do you think that is common in marriages in prosperous countries?
http://people.virginia.edu/~ent3c/papers2/Articles%20for%20O...
http://people.virginia.edu/~ent3c/papers2/Articles%20for%20O...
I post these links to HN from time to time, because they are from top-notch authors on heritability research and join issue directly with a very common misconception about what heritability figures show about human behavioral traits. Simply put, whatever the numerical figure is for heritability of this or that human behavioral trait says NOTHING about how malleable (changeable or controllable by environment) the trait is. Let me be clear: all human behavioral characteristics are heritable, with heritabilities above the theoretical minimum of 0 and always strictly less than the theoretical maximum of 1. But no matter what the calculated heritability is of a specific trait, we know NOTHING about how subject that trait is to change under the influence of carefully planned environmental interventions. That is a separate line of investigation, not logically or factually related at all to the heritability calculated by the usual methodologies in studies of correlations of traits among closely related and less closely related individuals. The references provide more details.
From the article: "When I ask myself this question, I think my actual political views would change primarily with my beliefs about how likely government interventions are in practice to do more harm than good. I think my libertarianism rests chiefly on the empirical proposition—a factual belief which is either false or true, depending on how the universe actually works—that 90% of the time you have a bright idea like 'offer government mortgage guarantees so that more people can own houses,' someone will somehow manage to screw it up, or there’ll be side effects you didn’t think about, and most of the time you’ll end up doing more harm than good, and the next time won’t be much different from the last time." Similarly, my views on politics and economics are heavily influenced by real-world experience, particularly the real-world experience of living in Taiwan, and visiting Hong Kong and China, in the early 1980s when those three culturally similar areas lived under very different government policies. Government policies make a difference. Actuality trumps theory in political science and economics.
Who else would you suggest? One of the links I put in my first reply here is co-authored by Bouchard, Gottesman, and Johnson (all of whom I know personally, as they are based at the university where I join their discussions of human behavioral genetics research), and if they are not part of the mainstream, who is?
What is the citation for the statement you attribute to Turkheimer and put in quotation marks in your comment? Where could an interested reader look up its context?
I invite readers to take a look at Turkheimer's list of publications
http://people.virginia.edu/~ent3c/vita1_turkheimer.htm
and see for themselves how his writings fit into current literature on human behavioral genetics.
After edit: I just remembered that another reason I especially like recommending Turkheimer's writings, besides the fact that he is an eminent authority on the facts he writes about, is that he is a researcher who changes his opinion on the basis of evidence. I thought that Turkheimer is an especially interesting example for Eliezer in that regard, as Eliezer writes a lot about human beings examining their unspoken biases and fitting their thinking to evidence.
Here is a link a bibliography to several scholarly, recent sources about genetic study of human populations, including how uninformative the socially determined category of "race" is in genetic investigations:
http://en.wikipedia.org/wiki/User:WeijiBaikeBianji/Anthropol...
Most bloggers don't look up scholarly sources like this, but my respect for my fellow HN participants prompts me to make use of my alma mater's university library and other libraries in my town to look up the most reliable sources and share them here.
IQ is just plain subjective. You would likely get similar results by sitting the designers of the IQ test one on one in a room with someone, and then having them rate the people they talked to by how much they were interested in the conversation.
I don't think that Turkheimer is saying that you can't look at race and IQ in a scientific context. What he's saying is that the concepts of race and IQ are more grounded in opinion than fact, and when we see them in scientific studies we should be wary if they are not mentioned in the same breath as other subjective classifications like religion or political affiliation.
Genetic Structure, Self-Identified Race/Ethnicity, and Confounding in Case-Control Association Studies
We have analyzed genetic data for 326 microsatellite markers that were typed uniformly in a large multiethnic population-based sample of individuals as part of a study of the genetics of hypertension (Family Blood Pressure Program). Subjects identified themselves as belonging to one of four major racial/ethnic groups (white, African American, East Asian, and Hispanic) and were recruited from 15 different geographic locales within the United States and Taiwan. Genetic cluster analysis of the microsatellite markers produced four major clusters, which showed near-perfect correspondence with the four self-reported race/ethnicity categories.
I don't think the comment you're replying to purported to argue that in the first place. He was just trying to refute the notion that race is merely a matter of social labels; the fact is those labels refer to something real in terms of a person's ancestry that can be detected by genetic tests.
Like you say, it has never been demonstrated that racial groups differ in their genetic propensity for intelligence, but it has also never been demonstrated that they don't. Given the observed IQ differences between racial groups and the fact that these groups differ genetically, a genetic basis for these differences seems like a reasonable thing to hypothesize about, and apply scientific methods of inquiry into. This is why I have a problem with a statement like "race and IQ is not a legitimate matter for scientific inquiry."
But both are social-political constructs. They are labels. What do you gain by correlating some feature of human behavior under examination with them? (I provide one answer in another comment: the effective distribution of useful information through existing social channels.)
Yes, racial labels refer to something real. But it's like correlating geological data with the state of California. California refers to something real. But as a scientist why would I want to correlate seismic activity with the state borders of California as opposed to, say, some fault-line that runs out into the Pacific or up into Oregon?
True, but I can't recall seeing anyone arguing the opposite. And the fact that two distributions overlap doesn't mean that knowing which distribution an individual belongs to contains no information. Men really are on average taller than women.
Or is this specific to the populations you studied in the United States?
Re: Sub Saharan Africans you can get a decent idea if someone has such ancestry from one allele.
As one example, the Duffy Null allele (FY0) has a frequency of almost 100% of Sub-Saharan Africans, but occurs very infrequently in populations outside of this region. A person having this gene is thus more likely to have Sub-Saharan African ancestors.*
http://en.wikipedia.org/wiki/Ancestry-informative_marker
Obviously the more such alleles you test for the better you'll be able to distinguish the populations.
This page gives links to ~300 AIMs which allow you to distinguish ancestry pretty well within Europe.
http://www.snpedia.com/index.php/Ancestry_Informative_Marker
Given that that's possible distinguishing continental ancestry seems to be a problem of application not theory.
Your overall position sounds to me like you want crisp, 1-bit, binary, black-or-white definitions or measures for everything, which is a pretty absurd demand. The real-world is n-bit. If you're looking for mathematically rigorous tools, fuzzy logic and probability theory help a lot in this area.
The race problem isn't that hard qualitatively, either: part of the reason we say Obama is a black man is because he says he is himself, another reason is because his skin is more on the darker side of the human skin scale, without prior tanning, than others. You can come up with other reasons I'm sure. You can also go down to the genetic context if you wish, but I'm sure you know the public has been beaten over the head enough times for the past however many decades that race in a genetic context isn't quite as visible as in a visual or cultural context. (Depending on your samples, anyway.)
Are you saying this isn't the case? I'm very curious, as I've heard before that certain diseases have a higher chance of occurring among different races (e.g. blacks are considered more at risk for gout, I think). Is that incorrect?
If I took thousands of people who self-identified as white, and thousands who self-identified as black and I looked at the occurrence of gout in those populations: what would I see?
My understanding is I'd see more gout in the black population. If so, wouldn't that somehow counter your statement that "in a genetic context, most African-Americans are just as much white as black"? Or perhaps, while most African-Americans are like that, some are in fact genetically more "black" in some sense, and they are the ones at a higher risk of gout? I don't really understand.
There is something to be gained, from a social or political angle. A public health advocate in government might say, "Hey, if we see this is a more common problem among a particular social community, maybe we can use the pre-existing channels of information distribution within that community to help them out."
But if your study were not approaching it from this public health angle, then what's the point of correlating gout with this other quasi-scientific socio-political factor? There may be other more suitable categorizations where this particular African-American/Caucasian distinction breaks down.
You gain many things.
If the True outcome is more common in group A than group B, you get a prior (in the Bayesian sense) which can be measured at low cost.
If you are attempting to identify the aforementioned genetic marker, you get to rule out genetic markers which are equally prevalent in both groups A and B. This narrows the search space considerably.
Throwing information (even imperfect information) away is stupid.
A falsifier to this proposition using the original question:
If I took thousands of people who self-identified as wearing white sneakers, and thousands who self-identified as wearing black sneakers and I looked at the occurrence of gout in those populations: what would I see?
Obviously one expects a stronger correlation with race based on the fact that members of a racial group are assumed to breed among themselves more frequently and concentrate relevant genetic factors -- if that's what we're looking for. But I suppose that's the point I'm trying to make: let's be clear what we're looking for.
Similarly for cultural factors like diet. But then again, why not cut straight to the dietary data?
In this case, you only get to rule out the genetic markers that are prevalent in both groups once you've established that they are indeed prevalent in both groups. And even then you're running a risk of false correlations for specific individuals because you started with a categorization freighted with a lot of non-scientific baggage.
It is unlikely that you would observe a difference between gout incidence between the two groups, and the prior will give no information.
Similarly for cultural factors like diet. But then again, why not cut straight to the dietary data?
Cost. It's very easy for a doctor to ask about race and diet. Genetic markers require moderately expensive lab tests and repeat doctor visits.
Similarly, if you can use simple mechanical prodding to diagnose an injury with a reasonable degree of certainty, it might be worthwhile to skip the expensive MRI.
Further, the dietary or genetic marker associated with a particular diagnosis may be unknown and racial information may be the best available predictor.
This is about real raw data.
Define "race" in a way that is scientifically rigorous and whose members can be classified in an objective, non-arbitrary way.
To save you the trouble, after mucking around with measuring skull shapes etc. you'd eventually find the only objective classifications were based on the genes themselves and gene expression anyway, and none of the resulting classifications of people looked like your original notion of "race" anyway.
It's probably possible to study "race" scientifically, but you probably don't learn much by doing so.
As well, that study looked at the US population which is clumped by historical factors in ways that may not apply worldwide.
Here's another study on distinguishing ancestry by continent
An ancestry informative marker set for determining continental origin: validation and extension using human genome diversity panels:
http://www.biomedcentral.com/1471-2156/10/39
It only uses 93 SNPs and is also reliable, except for distinguishing South Asians from West Eurasians.
In a community where everyone is genetically diverse but their living and work situations are exactly identical (a very hard scenario to imagine), all variance is attributable to genetic factors. (The heritability is potentially 1, but since the definition of heritability is that it pertains to additive genetic factors, it may not be 1 in this case.)
A few things flow from this.
The first is that population-level estimates of heritability may change over time, even if only because environments change, sometimes wildly, over time.
The second is that estimates of heritability for one population may not tell you about another population, and the population-level estimate itself is a blend of the community-level constituent values. (Even when you derive your estimates from twin studies, you can imagine how this is true.)
The third is that even if you drive heritability to 1 because you have made everyone's environment uniformly awesome, this does not mean that you cannot make everyone's environment even more awesome and thereby increase productivity/output/whatever. Say that Trait X is one's "widget production ability." If Trait X's variability is now 100% genetic, it does not at all follow that Trait X's mean cannot be increased by changing the environment. (It merely follows that Trait X's variance, not its mean, is currently completely explained by genetic differences.)
The fourth is that with substantial state intervention, you can probably manipulate the heritability of any human behavioral trait to whatever value you want it to be, given enough dedication of resources and willingness to flout norms.
I won't hesitate to acknowledge the (seemingly inherent) problems with government. However, laissez-faire capitalism has it's own inherent failings: every non-libertarian has their own list but they tend to include externalities (environment, public health, ...), ideas of "fairness" (large income inequality, valuing lives in terms of income, opportunity, ...), commons (turning things that are naturally shared---public spaces, roads, ideas, water---into private monopolies). There are well-worn libertarian responses to all of these concerns, but each issue is complex and I've not generally been satisfied with purely laissez-faire approaches (so far).
I like the idea of government serving as an (imperfect) check-and-balance on corporations, just as voters and separate branches are imperfect checks on government. As broken as government tools like regulation can be, I suspect the threat of their use is government's most effective tool.
Europe does have liberal parties that look like the discussed libertarians with a small "l", especially in Northern Europe, but they usually take third place behind the socialist and christian democrats.
On the whole, though, I do agree that humans are basically the same.
Libertarians are very happy to see philanthropists devoting their own money to helpful causes. They are also happy for voluntary private associations to work for their mutual benefit. They can point to many examples of people doing just that in history.
http://www.amazon.com/Market-Education-History-Studies-Philo...
Indeed, historically, most hospitals that treat poor children and most schools that educate poor children were founded without government support, all over the world.
You can't get around the fact that the basic tenets of libertarianism rank the right for the rich to live in luxury above the right of poor people to obtain basic needs.
Regarding your choice of phrase: "the rich" versus "poor people" makes the former impersonal and the latter "people". Similarly, "live in luxury" versus "basic needs" misses the entire point.
So... they want to remove barriers to market entry and the overwhelming power of corporations?
Edit: Why am I being downvoted? Am I wrong?
> High and Ellig sum up the experience of the 18th and 19th centuries by noting that "the available evidence strongly indicates that Americans of the period took an active interest in education. ... The private supply was extensive, not only in the number of children served but in the spectrum of social classes involved."
"Still, the opportunity to attend schools was limited. Formal schooling was largely restricted to those who could afford to pay. Even "free" schools often required payment of tuition, and primary schools required entering students to be literate, barring children who had not been taught to read by their parents."
Here's a link with period testimonials from actual early 19th century private school instructors.
http://www.digitalhistory.uh.edu/database/article_display.cf...
Also, characterizing the libertarian answer as "shut it all down" is a strawman in its own right. I daresay one of the major ideas that prevents people from understanding libertarianism is understanding that "let the market deal with it" is not anything remotely resembling "shut it all down". The market provides very sharp constraints on what actions one may profitably take, and one of the advantages of the market system is that said constraints are much more closely connected with reality than any other commonly proposed system is. As an also-little-l libertarian I don't deny that some further regulation may be necessary, but defying the market is less like defying people and more like defying physics. You will pay the price. (In fact, we are, right now.) In particular I strongly believe in the need for regulations that ensures that the market stays free, so I'm very in favor of regulations to prevent monopolies from forming, and very hostile to government-granted market monopolies.
If you understand the market as "it's all, like, greed man, and greedy people abusing other greedy people, and, like, evil, man", you really ought to spend some time understanding the theory of the market as an actual existing entity, rather than a politically-oriented strawman designed cognitively innoculate you against ideas that may actually change your mind if you were to truly learn about them. Perhaps it won't change your mind, but I'll say that most people online's efforts to pry me away from my libertarianism fails on the grounds that almost nobody actually understands it in the first place, which puts them at a bit of a disadvantage.
(Remember, almost nobody is raised libertarian. Few libertarians hold their beliefs unexamined, the way that those who were simply raised liberal or conservative can, though of course not all do.)
The market isn't always right. Imbalances can and do occur. The effects can be devastating to nonparticipants. Cartels, monopoly rents, etc. are some other types of bad effects that markets can devolve into.
While the mortgage crisis would not have happened without market forces (+ human greed) and government involvement. The question becomes which of those factors we can alter or remove to make such an occurrence impossible in the future, rather than which factor to blame. From a pragmatic perspective, since we can't remove human greed, the other option is to not implement government programs that make it easier for millions of people who can't afford a house to get a mortgage.
So, more government might have prevented the problem, perhaps in the form of education programs for home buyers who only qualified because of the government programs. But, less government could have prevented the problem, as well, since the vast majority of those loans would have never happened without government programs to encourage them.
My instincts tell me to go the less expensive route, and let the market decide who can afford a house or not. If a bank knows the government isn't going to bail them out (as would be the case if these loans weren't government-backed), they're going to be more careful about who gets those loans.
I'm going to copy-and-paste something I said before on this topic (which was actually a reply to jerf):
I slogged through much of the Financial Crisis Inquiry Report (http://fcic.law.stanford.edu/). One of the conclusions was that while mandating loans didn't help, they weren't numerous enough to be a major cause. Because of the mortgage-backed securities industry, there was incentive for banks to make sub-prime loans and offload the loans (and the risk) elsewhere. Once the MBS engine got churning, there was an enormous demand for more loans to feed it. In other words, the government's requirements did not lead to the glut of sub-prime loans.
Education for the home-buyers would probably not work. I can't remember which author it was who made this point, but on reading about the crisis, someone pointed out that people will take what you give them. That's not really fixable. The fixable problem was that banks were willing to make such loans. And they were willing to make such loans not because they knew the government would bail the loans out, but because the banks would not keep the loans. They'd turn around and sell the loans to investment banks that packaged the loans up into MBSs. The banks making the sub-prime loans weren't the same banks that were on-the-hook for them.
From my point of view, this is a classic example of where government regulation not only makes sense, but keeps market participates from creating abnormal risk.
From what I've read about libertarianism (the economic principles of libertarianism) it is highly impractical. It seem like a set of principles that work at the local level provided there is plenty of competition. Libertarian principles don't scale at a macro level. Especially in the presence of cartels or monopolies. Or in an environment when risk is being transferred to parties who don't understand the risk that is being transfered to them and when this risk transfer is being done on a truly massive scale.
I assumed you were describing a recent real-world scenario where exactly this occurred. What did you have in mind, if not the recent US mortgage crisis? It seems, to me, that real examples are more useful than imagined ones. If we are using imaginary problems, we can come up with all sorts of interesting solutions, but they don't necessarily carry over to real world problems.
Thought experiments can be useful tools, but when the results conflict with reality, you have to be willing to adjust and accommodate new data.
"Especially in the presence of cartels or monopolies."
Which cartels and monopolies do you have in mind? The biggest monopolies and cartels I can think of in the US are those that have government support to protect their monopoly. Phone, cable, power, water, are the most firmly held monopolies (occasionally duopolies) in the US, for instance, and all are protected by government. Toll roads in the northeast are another good example of government-endorsed monopolies (I'm not saying the toll roads are necessarily a bad thing, just that they are solidly a monopoly; you can't really drive from NYC to anywhere without travelling on those toll roads, and they are, by far, the most expensive toll roads I've ever driven on, and I travel full-time in a motorhome, so I've seen a lot of toll roads).
Microsoft was frequently called a monopoly for several years, but the market eventually removed those monopolistic powers. Anti-trust actions barely put a dent in their power, and targeted quite small, quite unimportant elements. The market is where the real change came from. Heck, many of the remaining strongholds for Microsoft are in governments, which are unable to move as fast as private organizations. And, a not insignificant amount of Microsoft's power came from having a stranglehold on government schools, offices, etc.
I can't think of many other good monopoly examples that aren't government-backed, though I'm sure there are some examples. I'm willing to believe that anti-trust legislation has a place; but I'm also very suspicious of the argument that all government is good government because monopolies and cartels are dangerous, which seems to be the root of your bias against libertarianism or reduced government.
The exceptions that are sanctioned are examples in economic theory of "natural monopolies", typically utilities, where competition would be highly impractical. For example, it would be impractical to have many different competing networks of privately owned telephone poles, sewer lines, water lines, etc. serving the same municipality. So a natural monopoly is allowed to exist but is heavily regulated and may face price controls.
I remember anti-trust law being used against smaller companies because lawyers find it easier to persecute than fighting against bigger companies. Even anti-trust regulations can be used to decrease competition.
Sometime it's better to opt for the least worst option rather than opting for a solution that kill the patient.
Antitrust claims get tacked on to a lot of lawsuits by overzealous attorneys, but they're usually dismissed out of hand. Serious antitrust litigation is rare, and by definition targets companies that are large in their particular industries.
When the market was allowed to make decisions about who should get loans, the standards were a lot higher. But it wasn't "right" for people to have to put 20% down and have a very solid credit rating, because it discriminated against poor people (and Democratic voters), so the government fiddled until it produced the result it (thought it) wanted, forcing banks to lower mortgage standards until we eventually worked our way down to no-money down ARMs.
(BTW, the claim the government had nothing to do with it is to claim that all the regulation like the CRA and Fannie Mae and anti-discrimination all had absolutely no effect at all, in which one must answer the question, if regulations like that are so ineffectual that you can't lay any responsibility for the current crisis at their feet, then why do you think government regulations are the answer to anything? Either they are effective or they are not, but you can't flip back and forth depending on whether you like the effect or not.)
The problem is that people think of "the market" as a fundamental property, but in fact it is a derived property. The reason why the market tended to correctly allocate mortgages prior to the government's heavy-handed decades-long intervention is the incentive structure. Always look at the incentive structure. If my bank is going to issue me a mortgage, and the government leaves them alone, they are going to take a lot of steps to protect themselves, such as setting the requirements for your credit strength very high, and requiring large downpayments, and generally ensuring they aren't going to be left holding the bag when the mortgage falls through. Alternatively, if they're going to sell that risk, the receiving party is going to want the same due diligence. The government interventions basically systematically tore than incentive structure apart, by allowing them to just dump the mortgage off on Fannie Mae/Freddie Mac, by requiring them to make loans that they basically knew would fail but the government held guns to their head to do it, etc. If I had to pick one thing that really enabled the housing crisis, it was the ability to dump mortgages off on the FMs for what were in actuality above-market rates, then for the seller to be free-and-clear of the responsibilities. Other things may have accelerated it, but that structure guaranteed disaster on its own.
No, the market isn't "always right", but that's not really the question. Nothing is "always right". The question, which is more likely to be right, the market system or the government system? One of the big reasons I tend libertarian is that I empirically observe that the government almost inevitably creates incredibly broken incentive structures where the market tends to create ones that are much more connected to reality. In this particular case, the "reality" that the market is much more connected to is the question of "will X be able to pay their mortgage back?" I have to use the broad term "reality" when discussing it in general, but it actually comes back down to specifics like this.
One much also distinguish between "the market" being broken, and reality being "broken". Yes, mortgage requirements were quite high; that's because in reality it's a huge risk. It turns out the market wasn't broken here, and the efforts to "fix" it were the true brokenness.
Right, which is why it only happened in America, not in other places like England, and Ireland, and Spain, which had neither CRA nor Fannie nor Freddie. Oh wait...
For a different, and for my money, substantially more accurate diagnosis of the crisis, go listen to William K. Black [1]. He was one of the regulators who prosecuted many of the corrupt bankers who perpetrated the savings and loan crisis.
[1].http://dailybail.com/home/dr-william-k-black-the-great-ameri...
Also, saying that this regulation had minimal effect does not imply that all regulation will have minimal effect.
I don't think it's exactly a stretch to assume that such a (putatively) topical example was related to current events.
Besides, in the process of describing why the crisis wasn't caused by markets, I answered your objection anyhow. When the free market was making the decisions about mortgages, they did in fact make it in a sustainable way. Once the lenders were detached from the consequences of their decisions by the government, that broke. There's no better way to ensure that we don't have a housing crisis than to use those market mechanisms.
Note carefully I didn't say "if we use those mechanisms, we'll never have a housing crisis". I said there's no better way. It's basically impossible to completely prevent periodic crises.
Lenders weren't detached from the consequences of their decisions by the government. They were detached from the consequences of their decisions by selling securities based on the loans they made to dupes. That it was done at a massive scale without the dupes properly pricing in the risk caused a meltdown.
One of the core factors that drove the credit crisis was ignoring market forces. "Too big to fail" led directly and obviously to recklessness. Bankers knew that they had nothing to lose and everything to gain. In a system where a government explicitly or implicitly guarantees banks, there is little incentive for anyone involved to guard against cataclysmic failures. As we so often do, we privatised gains and nationalised losses.
The desire to fix "market imbalances" is only that, a desire. The evidence is that most attempts to fix the market only make things worse. If we merely want to be seen to be doing "the right thing", then it's reasonable to legislate and hope for the best. If we actually want to improve the world, we must recognise that the market is tantamount to a force of nature.
Decades of trying to control wildfires led only to fiercer, more devastating fires. It was only when we realised that fires are a natural part of a forest ecosystem that we began to reduce the damage caused. Attempting to prevent any negative outcomes of a free market is similarly futile.
We can't control markets. Khruschev and Breshnev couldn't, nor Greenspan or Bernanke. All we can do is nudge it a little, build a firebreak here, drop a bucket there. Until we recognise that, we're doomed to the cycle of boom and bust that has dominated post-industrial economies.
People do stuff. You can attempt to change their incentives, but they'll still do whatever makes sense to them. That's the core of libertarian thought. Accept that lack of control, accept that the drug war can't be won, accept abortion and gambling and credit default swaps, then try and work out how best to mitigate the externalities of those things. Legislate based on what is not on what we think ought to be.
And libertarians routinely forget that the unwashed masses actually want social programs and regulations, and they hate seeing people get rich off of "the market" by doing things that seem abusive. They want public services like police, fire, ambulances and schools. They want to have some assurance that when BigCo tries to get anti-competitive and monopolistic someone will step in, and they want to know that if the CEO shorts his own stock in anticipation of bad news that nobody else knows about he will be punished for it rather than profit. Libertarians may not want any of this because of their philosophical and economic leanings, but most other people do...
Why is it that the free market is such an immense force that we should uncritically accept that it is unchangeable, yet the desire of millions of people to control it, regulate it, or otherwise make it work for everyone instead of only the richest of the direct participants is somehow negotiable?
I understand that you're saying that nothing we can do will change the markets, all I'm saying is that it's just as possible that nothing we can do will make people happy about the way they function uninhibited, so maybe there's a good reason we've ended up somewhere in the middle.
That there wasn't a total collapse of the banking system in 2008 was precisely because of government intervention. Everyone would have withdrawn their funds from banks had it not been for FDIC. Imbalances can't be prevented. What can be prevented is a total collapse and the effects of imbalances can be mitigated. This is one of the main reasons for the modern interventionist view of governments with regard to market regulation.
The goal is to prevent millions of small bad decisions ending up adversely affecting the whole country. This is my problem with libertarianism. There is no mechanism for dealing with the scaling issue. Negative externalities are not dealt with.
As for the rest... Well, I've never had a problem with the idea that a properly competitive market would be far superior to where we are now, but libertarianism, at least as portrayed by professed libertarians, doesn't restrict itself to that. It seeks to completely tear down social safety nets in favor of that market and ditch environmental and safety regulations. My own experiences and those of my family are all that is necessary to convince me of the disaster that would result by going that far.
I'm the last person who's going to defend the ridiculous things cited (marijuana/tobacco, corn ethanol, patents) and many others, but if you're being intellectually honest, you also have to look at the bad things that have resulted from unbounded market forces (serious pollution/poisoning, worker deaths, building collapses, ...) until government stepped in and imposed regulations on the "free market". There are tradeoffs here.
If you don't think these things are part of libertarianism, you need a new name for your beliefs, because the existing one is too corrupted by people who either don't actually share your beliefs, or don't understand that they've done a horribly negligent job of explaining them.
There's a large subset (possibly the majority?) of libertarians who expect that monopolies are a byproduct of state intervention, and not a natural product of the free market, which is precisely why one shouldn't interfere in ways that lead to monopolies (among other ways).
Are there examples of monopolies which didn't have state support?
What about Microsoft and Facebook? Of course, it depends on your definition of monopoly - if you define it to be 100% market dominance, then almost by definition this is only possible using government intervention - but in the case of Microsoft, few people would seriously doubt that they have (or at least had) monopoly status. I don't see the state support that allowed them to get there.
More generally, a free market greatly favors monopolies whenever there are network effects involved.
Moreover, it is not only monopolies that are bad. Many markets "naturally" end up in the hands of only a few large corporations. This can sometimes (but not always) be as bad as a monopoly, e.g. electricity providers here in Germany. It is not clear to me what it is that makes some oligopolies problematic, while others (e.g. processor manufacturers) appear to be more benign.
Can a business get to 100% of a market, or nearly so, without state help? I think they often can. Can they hold that position in the face of better and/or cheaper startup competition, without state help? I think that's an open question, and I lean toward thinking that they can't.
The other major question is so-called "natural monopolies", such as infrastructural service provision (phone, power, cable, etc). The fact that there are communities which have multiple competing firms in some of these seems to show that they aren't natural in the sense that they will arise unless prevented. While most communities in the US have a legislated monopoly on, for example, cable service, those that do not often have competing cable services, which is exactly what we are told won't happen. (My father lives in a place with three overlapping cable companies, as it happens, and he's tried all of them at one time or another). I've seen people in some of those communities who are arguing for a city-granted franchise switch seamlessly from arguing that regulation is needed to keep monopolies in check to arguing that such regulation is needed to prevent the wasteful laying of lines that duplicate existing lines. I guess that's neither here nor there, just a pet peeve. :)
Anyway, searching on Rothbard and monopoly will turn up more rigorous arguments against the idea of free market monopolies than I've given here.
Edit: Maybe Somalia is an example, I remember a few years ago people touting the proliferation of Somalian cell phone companies. But the instability there doesn't seem like something we should try to emulate.
In my experience, this is quite a mischaracterization. The position isn't that monopolies are 'natural' and 'not a problem'. On the contrary, monopolies are seen as being extremely harmful, but also as products of government intervention and barriers to entry, not the market.
Which makes me particularly skeptical of "the market just works" type analysis, which claims that this particular complex dynamical system does not have all those pathologies, and in fact can be analyzed with fairly high-level, aggregate laws like the classical economics analysis of supply/demand adjustment. Heck, even fluid dynamics (another complex system) doesn't work that way--- all our general laws about how pressure/flow/velocity/etc. relate only apply to specific flow regimes, and can have different or even opposite-of-normal relationships in different flow regimes (especially anything turbulent).
One argument for why there should be some intervention would be: the classical-economics analysis of how economies should work is an appealing one, but is not in fact how they always work, so the government's job should be to dampen out the pathologies and turbulence that would take us out of the "normal" regime where the classical laws do apply. That's sort of the line taken by ordoliberalism. The question would be whether it can, on the whole, do more good than harm. But I wouldn't start from the assumption that what you get without government intervention operates "well" or "ideally".
These concerns are of the utmost priority in most fields that involve complex systems, especially processes that we have a hand in influencing, except for economics and politics, where everyone's pet arguments are balls to the wall, and tend to either imply that we should be living with full blown communism or complete unregulated anarchy (okay, I suppose contract law and the military are typically carved out as the exceptions). It's one of the few areas I've ever seen where none of the popular arguments seem to have any sort of balance - and I'm not talking "balance" as in fairness, I'm talking about "balance" as in trivial idea that if both extremes suck (which they usually do, whatever particular idea or disagreement you're arguing over), and something in between is better, then there exists some optimum between the extremes. Step one involves admitting that either extreme has a problem, but instead everyone seems to keep arguing that the whole problem is just that we're not actually at that extreme, 100%.
I am always so frustrated by the notion of "the market is always right". As if a system with billions of complex actors could somehow be described like a first order linear system, that will always find a stable equilibrium.
I'll profess historical ignorance here, though from my knowledge I believe that most instances of government change to a better government (and there have of course been changes to a worse government) have come through sudden revolutions that upset much of the previously existing power hierarchy. Additionally, to me it seems like government is naturally against any change at all, which precludes it from being improved easily. Eliezer has written numerous times elsewhere: "Not every change is an improvement, but every improvement is necessarily a change." So I don't think a "scrap the current system" is necessarily a bad idea, though I don't want bloody revolution.
So, any harmful incremental change would be eventually selected out of the gene pool (or at least won't spread). Neutral changes are unlikely to become universal. Therefore, only improvements can be universal enough to be build upon.
I'm not sure that the programming metaphor here fits, considering languages like Haskell et al. that do box you in have had tremendous success. There are also programs that have been 'running things' just fine for 10+ years unchanged. I'm not aware of any government that could claim that, though with the former I think one of the motivators for having a constitutional government in the first place is to box-in the government. The merits of that vs. having a "Lispy" government that does what it pleases can be argued some other time. (Separately, there is an argument of "premature boxing in" that I have used to argue against full-fledged unit tests early on, but that's getting even further off-topic.)
Constitutions can (usually) be amended. The US Constitution in particular has essentially no restrictions on what can be done by amendment (and it's pretty obvious that the one operative restriction can be dealt with if necessary). This is done out of knowledge of our own ignorance -- we cannot possibly conceive of every situation society will face, nor how our governance models will interact with those situations.
This is why libertarianism irritates me. It comes across as such an absolute. Few things are absolutes, and when you're talking about something that will affect millions of people, you can't realistically expect to arrive at an absolutely right solution that will work for everybody every time.