I'm sad that free markets are viewed as an "extreme" position.
Communal ownership is not free market, hence the tragedy of the commons is not a failure of the free market.
> ability of a large participant to drop prices to eliminate competition then raise prices,
Has never happened successfully.
> inability of market forces to handle extreme tail risk like major natural disasters.
The free market does very well at rushing supplies into disaster areas. At least until the government put a stop to that with anti-gouging laws. So now, disaster victims have to wait around until the government gets its act together, which takes a lot longer.
Ah yes so in this free-market utopia shall we purchase bottled air from Nestle for our breathing needs?
Shall all aerospace companies pay a toll to the estate of Yuri Gagarin whenever they launch a rocket? He was the first in space so must have the most logical claim to the ownership rights. His estate could then help us avoid Kessler syndrome.
As for space, the orbits are full of dangerous space junk. A classic tragedy of the commons.
I'd be much more concerned with issues like groundwater contamination, seeping gasses, and toxic waste dumping.
Are all not allowed in a free market. A free market does not condone damaging other people or their property.
BTW, US military bases are on some of the most polluted ground because they polluted it.
Can factories actually exist without 'damaging' the air or water runoff to other people's property?
Socialism fails because it relies on altruistic behavior, which is in short supply in humans.
So when accusations of price gouging arise (say in the aftermath of a disaster), you're saying that it's the government interfering while the people in the disaster area area are eager to pay top dollar for suddenly-rare commodities like water or hand sanitizer? If I see regular-seeming people complaining about prices, should I assume they're covert government agents?
Do the higher prices mean some people won't get any water? Yes! But if you artificially suppress prices, there will also be some people who don't get water, because other people will hoard it.
> But if you artificially suppress prices, there will also be some people who don't get water, because other people will hoard it.
Rationing the volume available for purchase by individual customers is the obvious solution, and seems to have worked out just fine in practice during things like the great toilet paper panic of 2020.
I'm asking Walter how he explains the fact of people complaining about high prices in such a context, given his claim that it's government spoiling the price theory party. Why are the opinions of people who are priced out discounted?
If hoarding fetches higher prices, that creates tremendous incentive to increase the supply (and/or find alternatives).
If hoarding is illegal, and gouging is illegal, the result is shortages. Every time, since there is zero incentive to produce more.
Rationing has other problems. It is based on the idea that everyone has the exact same need for the product. Of course, this is absurd. The result is misallocation, as some get more than they need, others get less. If reselling is made illegal (as it usually is in rationing setups), then the person with extra just throws it away, and the person who doesn't get enough has to do without.
How is that better?
Again, I'm still wondering why you cite government as the opponents of free market pricing, when the objections often originate with people who are mad about the idea of paying $75 for a bottle of hand sanitizer: https://www.today.com/news/brothers-who-hoarded-17-700-bottl...
> government as the opponents of free market pricing, when the objections often originate with people who are mad
The government does what the people demand. The people demand the government outlaw gouging, the government outlaws it.
In the long run, high profits during a shortage also mean that suppliers in general will be incentivized to keep a larger stockpile of goods that have a good shelf-life since they know they will be able to make good money the next time there is a shortage (more than the storage costs). (Or the potential for high profits will incentivize spending money to be more flexible in production in case demand increases for a short time.)
If you are going to literally make it illegal to try this, then you better have a government be willing to spend its tax dollars on creating a stockpile - when the pandemic started we saw that all the talk of the national stockpile the federal government supposedly had was greatly exaggerated.
Some Americans*, and far fewer than those that have some of the lowest standards of living in the world. And the US has greater wealth disparity than many other countries with living standards many would argue are at least equal.
Altruism isnt necessary, education is. Education teaches people that the best way to prevent the most harmful acts in society is to make sure peoples needs are met, which capitalism and the free market routinely fails at. This is why US has worse crime than other developed nations even accounting for population, you fail to meet your citizens needs within the system so they do it themselves outside of it.
Communists tried so hard to educate us into the "New Man". For the betterment of all mankind, of course.
Of course, ignoring human nature tuned the whole "experiment" into a huge, predictable failure.
Americans have the highest standard of living in the world. That's why the poor from everywhere are trying to get into the US. Do you watch the news about all those migrants pouring over the border?
Every single point you make completely lacks consistency, truth, and reality. You just regurgitate shit you don't understand.
Mr Bright said:
"Americans have the highest standard of living in the world. That's why the poor from everywhere are trying to get into the US. Do you watch the news about all those migrants pouring over the border"
and you said:
"it just makes Walter's well thought, rational arguments even stronger. reply"
His reply is neither well thought[out], rational or strong whatsoever. His reiteration of Americans having the highest global standard of living does NOTHING to address any of the issues I raised with this statement in my previous comment, he literally just repeat his assertion.
Which is also untrue, SOME Americans have the highest living standards, many many many times more do NOT.
You will see neither my comment never mentions crime whatsoever. Mr Bright inserts the topic of crime, drug addiction, criminal enforcement and theft as though criminals and addicts are the only Americans who live in poverty and the only metric for establishing living standards is crime. This is clearly illogical and irrational.
Many of the people suffering at the hands of US capitalism simply got cancer, were in a car accident, were born with disability, got hurt at work, too old to work but no retirement fund, etc.
Frankly, I dont care about "helping my position" or if the language I use upsets you! Anyone with the faintest whiff of logical integrity can clearly see that Walther Not-So Bright is espousing bullshit that he believes, not that has any rational basis.
You're right next to him at the bottom of the intellectual barrel.
Thank you! I feel quite honored to be considered next to Walter Bright.
Likely because you know you're wrong and dumb.
> Has never happened successfully.
I thought ISPs were notorious for temporarily dropping prices whenever a competitor tries to build out? Or at least I keep hearing anecdotes from people who think they've watched it happen.
But this assumes that there are good choices, and that there are bad choices. Reality, unfortunately, is often not so kind, and instead leaves us to choose only between bad choices and horrible ones. And so emphasizing the flaws of one choice, says very little about the desirability of an alternative.
In some ways I think game theory is most appropriate for chaotic systems. The goal is not to pick the system that works the best, under some ideal set of criteria, but the one that works the least-worst under the most hostile set of criteria.
Allowing market participants to discharge toxins into the local water supply is not in society's interests but is quite possible in a purely free-market system.
There's now a good amount of evidence that a hybrid system: mostly free-market, with some regulation, and some kind of social safety net is the least-bad choice.
A pure free market system would not allow people to pollute other peoples' property.
Edit: moreover how is "the free market" going to defend the property rights of others in these cases? I assume via civil litigation. But what if my victims can't afford prolonged litigation or I decide that the potential cost of a settlement is less than the cost of disposing of pollutants properly?
You're polluting other peoples' property.
> how is "the free market" going to defend the property rights of others in these cases?
That's the proper role of government.
> But what if my victims can't afford prolonged litigation or I decide that the potential cost of a settlement is less than the cost of disposing of pollutants properly?
Such issues are true of any economic system I can think of.
That has to do with diffusion of responsibility for communal property. What does that have to do with markets.
> ability of a large participant to drop prices to eliminate competition then raise prices
I think the market has ways to adapt to such behavior. Regulatory capture in a non-free market seems like a much more likely, and more persistent, risk.
> inability of market forces to handle extreme tail risk like major natural disasters.
I just don't think that's supported by the evidence.
You can start any business you like. People do it all the time.
There is a massive list of things one cannot start a business doing in the US. Why would you say such nonsense?
The moment people talk and think about money, they consider the mere concept of a negative return as some kind of monstrosity going against nature itself, despite the fact that money is a claim on labor and labor spoils just like an apple. The saver expects a reward for idleness, while the laborer without a job is getting punished by his enforced idleness. Money without negative return obligates men to become golden statues that never age, a world view that is obviously in dissonance with nature and reality.
Whenever the economy isn't growing, people will prefer an asset that bears a 0% return at no risk over any real investment.
In other words, there is no such thing as a free market without a monetary reform that allows negative interest rates or simply allows money to expire, the same way people age.
Here is another problem, eternal private landownership has the same problem. Let's assume you have a perpetuity that returns you $1 per year. At a zero interest rate its value is infinite and no, that isn't a problem with the concept of zero interest, the obvious problem is that a perpetuity cannot exist, even the planet itself has a finite lifespan, meaning the value of a single plot of land will only amount to billions of dollars. What's worth more? Money that works according to supply or demand or land that doesn't? Of course people are going to pick land. If landownership was eternal, then owning all of the land on the planet is equivalent to turning everyone else into illegal aliens that merely have been granted permission to exist on the planet and whose permission can be withdrawn at any time.
In the face of these two forces there cannot be something like a free market. It would always be a coercive market in one form or another.
If you don't eat it, yes.
>then it is only natural that the return on a spoiling apple is negative.
my return on the regular apple is 95 kcal. If I sell it, my return is what I sold it for. Why would I compare it to a golden apple that never spoils?
>The moment people talk and think about money, they consider the mere concept of a negative return as some kind of monstrosity going against nature itself
Can you point to some economists who hold this poition?
>despite the fact that money is a claim on labor and labor spoils just like an apple
Money can be a claim on labor. It can also be a claim on something else, but aside from that, it seems like you are comparing the negative return from the apple comapred to the golden apple to labor which gives an absolute negative return.
>The saver expects a reward for idleness
(I assume by "saver" you mean investor) Do you mean "expect" from a moral or economic perspective? either way it isn't true. An investor does not nessesarily expect a return on his investment. Either way what the saver expects does not matter.
>while the laborer without a job is getting punished by his enforced idleness.
If the saver instead was in some way obligated to reward the laborer despite providing a negative return then it would reduce the efficency of the total output. The number of laborers rewarded for providing a negative return would increase until there would be a total negative return. whether or not the laborer has no job depends on the ability of the laborer to provide a function that he is paid for. His idleness is forced by not returning any value. Even if he was rewarded for providing a negative return he would still be idle in an economic sense.
>Money without negative return obligates men to become golden statues that never age, a world view that is obviously in dissonance with nature and reality.
Fortunatly money itself can bring a negative return, both by faulty investment and by the devaluation of the money itself comlared to other assets (including other money)
>Whenever the economy isn't growing, people will prefer an asset that bears a 0% return at no risk over any real investment.
False, even when the economy isn't geowing, there is still money to be made by investment at an idividual level
>In other words, there is no such thing as a free market without a monetary reform that allows negative interest rates or simply allows money to expire, the same way people age
This conclusion does not follow your statements above. But money can already expire only not idividual notes but the entire value shrinks such that some of it has expired. For example, if the economy has 1,000 eggs and 1,000 jars of milk, and 1,000,000 dollars and 10 eggs spoil then the value of the 1,000,000 dollars has shrunk by 10 eggs worth.
>Here is another problem, eternal private landownership has the same problem
can you site any examples of land that has been held privatley from the time it was first held until now?
>At a zero interest rate its value is infinite
it isn't infinite because that land takes an infinite amount of time to return an infinite value which is not possible. (compared to investing many other ventures it produces a negative return. Like the apple case except it does not expire).
>What's worth more? Money that works according to supply or demand or land that doesn't? Of course people are going to pick land
Real estate acounts for a large percentage of GDP in the US. But money is a liquid asset, land is not. Banks do not to forclose on houses from the first moment they can because then they have to sell them. But if they wait until the borrower gives them money they don't need to sell anything.
>If landownership was eternal, then owning all of the land on the planet is equivalent to turning everyone else into illegal aliens that merely have been granted permission to exist on the planet and whose permission can be withdrawn at any time.
Can you expound on this point?
>In the face of these two forces there cannot be something like a free market. It would always be a coercive market in one form or another.
There can never be a completly free market but there can be something like a free market.
>It would always be a coercive market in one form or another.
coercive in the sense that people will do things they don't want to such as working.
The second seems to think that all value derives from land (never mind that the value of FAANG companies has nothing to do with land value). But hey let's run with that for a minute. Suppose one person owned all the land. In order to get any value from it, he's going to have to rent it out to people who do use it productively.
Hmm, where do we have such a system. I know! The government owns all the land, and rents it out (property taxes) to people who use it. The free market hasn't collapsed because of this.
99.9% of the time regulation is unnecessary. Over-regulation is a huge problem and one that only an actual theoretical free market could address. I see people on HN complaining about last mile politics often. Yet people seem hard pressed to look to the free market for a solution. I'd rather deal with a corrupt CEO whose power will end when their life does, rather than a politician whose power will continue for centuries until someone with a few more brain folds steps in and stops it.
This is an example of the article - libertarianism requires people to replace how things actually work with brief inaccurate summaries of how it works they fit in their heads, and the smarter you are the more incorrect information you can fit in your head and the more wrong you are.
And yet nearly all electronics standards arose through voluntary cooperation. Ever notice the USB socket on your computer? The audio jack? The HDMI port? etc. Did you know that Edison standardized the Edison lightbulb socket, not the government?
> uncontrolled RF emissions,
Again, the free market does not allow one to interfere with other peoples' property.
> and want to pay you in private bank currencies you can’t spend.
Banks solved that problem long ago. The free banking system worked. BTW, we still mostly use PRIVATE BANK CURRENCIES all the time! Amazing, but true. They're called credit cards, bank checks, paypal, venmo, wire transfers, money orders, cashier's checks, etc. Even store coupons are private currency.
> libertarianism requires people to replace how things actually work with brief inaccurate summaries of how it works they fit in their heads, and the smarter you are the more incorrect information you can fit in your head and the more wrong you are.
Have fun debating with me. Good luck!
To reiterate this point the current US dollar is a private dollar issued by a private bank and funded (essentially) by congress and the treasury. The last time the US had a public dollar was prior to the American revolution.
A lot of people make the mistake of conflating The Fed with the government but it is federal in name only. It is owned by private shareholders no different than any other corporation.
LOL. The Federal Reserve System is a sham "private" bank used to get around the Constitution that does not empower the government to print money.
You should check to see who appoints the people that run the Fed.
How do you know the USB shaped sockets on your chargers are actually implementing USB, and not something that either doesn't work or burns your house down? It's partly private enforcement and partly customs blocking imports of things found to be dangerous, but you didn't ask customs to do that.
> Again, the free market does not allow one to interfere with other peoples' property.
This seems like a posthoc principle but isn't proven to be one you could actually build a working government on. ie you're saying "private standards are fine" and "this principle can replace FCC radio regulation", but a government only implementing the NAP is just as capable of banning your "private standards" by declaring them harmful. USB is a kind of cartel after all, it's just one we happen to like.
> BTW, we still mostly use PRIVATE BANK CURRENCIES all the time! Amazing, but true. They're called credit cards, bank checks, paypal, venmo, wire transfers, money orders, cashier's checks, etc. Even store coupons are private currency.
Yes, and why isn't that a problem? Because all those private dollars magically have 1:1 exchange rates to other kinds of dollars. That doesn't happen on its own.
(There are other currencies in the world, and currently a bunch of private ones like stablecoins, and you can read in Matt Levine about how they're constantly blowing up and losing investors' life savings and the inventors are on the run from Interpol.)
Preventing fraud is a proper function of a free market government.
> Because all those private dollars magically have 1:1 exchange rates to other kinds of dollars
No, they don't. Credit cards have a 3% fee tacked on. Paypal does, too. Money orders do. Travelers' checks do. Wired money does. All of them do.
> losing investors' life savings
The government's job in a free market is to protect people from fraud. I've said this a dozen times in this thread. You can stop now bringing up more cases of fraud, as it won't help your case.
My wire transfers costs $0.85 for any domestic transfer. Credit card is a %, but more importantly it doesn't /change/ like foreign transactions do.
> The government's job in a free market is to protect people from fraud. I've said this a dozen times in this thread. You can stop now bringing up more cases of fraud, as it won't help your case.
But can you base a government on that legal principle without the government then inventing all that other stuff you don't like? Libertarians don't really like consumer protection agencies like CFPB I don't think.
Of course the highest office held by a libertarian in California is a Redondo Beach city council member NIMBY who's trying to prevent people from using their property rights (https://mobile.twitter.com/mnolangray/status/156626436981758...). So who knows what that party believes.
This isn't true at all. You basically backed this entire point up with "company store money is bad" which is true. But The Fed issues "Company Store" money that just so happens to be accepted widely. We don't have a public currency. Without a private corporation (The Fed) we would have no money because congress relinquished it's power several hundred years ago, and in 191x they sealed the deal with the Aldrich Bill. If you want to have a truly regulated socialist utopia you're going to need to go back about 200 years to stop the banksters.
"No regulations" does not mean "no standards". The difference is the onus is on the agreement between the company and user. In a theoretical free market (just like your theoretical land where regulation works) companies would cooperate for base goods like sockets, because by standardizing along sockets, other companies would be able to sell more products. Then they can sell more sockets, and the cycle continues. In fact regulation doesn't guide standardization except in the most surface-level sense.
Uncontrolled RF emissions is another strawman. The free market doesn't mean that BigCo. can drop a 5G tower in my backyard. Again, killing people is STILL bad in the libertarian world and exposing people to danger is similarly bad. As a counter-example, EPA regulations have done very little to stop chemical spills. EPA is an "after-the-fact" regulatory agency and companies have incentive to either buy them out (DuPont) or only fix exactly what they say (BP). There's no indication regulation fixed anything. In fact all regulatory agencies can only act after-the-fact. This makes them fundamentally useless towards protecting people before danger strikes. Do you know what spurs regulatory agencies into action? Wide, large scale, protests. These would also work in a free market. If BigCo's towers are microwaving birds the people have a responsibility to stop them. In the current over-regulated environment BigCo simply defers to the agency, which then drags it's feet for 10 years, and then comes up with a half-baked solution that the company finds another end-around for.
You are conflating "regulation" with "standardization" in order to make a point about how libertarians are smooth brained pseudointellectuals but you ended up hurting yourself in the process.