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I have this feeling folks learn about the invisible hand from Adam Smith, take nothing else from that text, and then have this magical thinking that benefits will accrue to everyone, when in fact we little people have to prevent that invisible hand from stabbing innocent people by creating the FDA, EPA, OSHA, FCC, FTC, SEC, NLRB, etc., and we have to have labor movements to get some of benefits of industrialization.
Right now, our approach to life is to motivate everyone by profit, reducing fully-fleshed people to homo economicus, devoid of any other emotion and motivation other than money, and hope that somehow, magically, that will create the best civilization.
And after industrialization, over the course of the 20th century, the most free market economies again saw the greatest gains per capita income and quality of life.
>>The peons had to get gunned down by the Pinkertons so we could get sane working hours, conditions, and fair pay. Thank god for the weekend? No, thank unions.
The unions murdered workers that crossed the picket line, or "scabs" as the socialists called them. Pinkertons were sent in to remove these violent illegal blockaders.
Once the unions succeeded in their cause, with exactly the kind of false narratives you're putting forth here, industrial expansion slowed, and eventually we entered into the current era of stagnation.
Case in point: Detroit. Detroit was the wealthiest city in the US in 1950, with the highest per capita GDP in the country. Over the course of the 1950s, 60s and 70s, the UAW union took over, with membership eventually peaking in 1978.
What followed was industrial collapse, and eventually, Detroit becoming a ghost town.
Unions are not good for labor at large, just the labor that is on the winning side of the zero sum rent extraction scheme.
I'd also question a 'century' of 'proving it is great' since 100 years is 1923, so any proof at that point was just leading into Depression.
And, YES, in the modern American dialog, 'Free Market' is definitely an ideology. People believe in it without any knowledge about what it means, similarly to the bible.
Of course, they were massively out-propagandized by special interests who benefit from government restrictions on voluntary interactions, and so the free market is extremely unpopular, with all trends — e.g. the rising degree of regulatory of centralization as measured by per capita regulatory compliance costs, the rapid rise in social welfare spending as a percentage of GDP since 1950, etc — demonstrating that.
>>since 100 years is 1923, so any proof at that point was just leading into Depression.
The Federal Reserve, i.e. the central bank, created the Crash of 1929, and it was Hoover and FDR's government "cures" that turned what would have been a short downturn and quick recovery into a Depression.
Hoover's role:
https://www.eurekalert.org/news-releases/842709
FDR's:
https://www.google.com/amp/s/www.ff.org/fdrs-policies-prolon...
At one point, the FDR administration was paying farmers a sum equal to $500 million today, to kill and bury five million baby pigs:
https://footnote.wordpress.ncsu.edu/2020/08/14/plowing-under...
This while people were going hungry.
The FDR administration, economically illiterate ideologues as they were, believed that the problem was low prices, and that by reducing the supply of agricultural products, they could push up the price, and end the depression.
In reality, the money supply had contracted due to cascading loan defaults, and what needed to happen is for prices to adjust downward to come in line with wages.
The FDR administration instituted a number of measures to try to control prices, to horrible effect on millions.
I've never understood paying farmers to not produce. But, it still happens today. Through decades of Republican and Democratic administrations, we still pay farmers to not produce. And we pay oil companies welfare, not sure why we pay them anything. The government is always trying to balance the economy and subsidize some industries more than others (again, the gray area on which is the right thing to subsidize).
Not sure we are dissagreeing. You don't seem to be against regulations on a market in general, just not these regulations. Markets are artificial to begin with, there is no such thing as a 'free market' without some organizing effort that people call 'regulations'. How free does it have to be, in 1900's there were private armies, do we go back to that much freedom.
I tend to think the Gov should step in on in-elastic markets. Sure, 'free markets' are great when there is competition for something like a TV. But not great when there is a monopoly on insulin.
That is why health care free markets don't work. When you are having a heart attach you aren't shopping around for a bargain price.
Anyway, I think we diverged a lot from original post. I don't necessarily disagree with 'classical' economics. But those are a long way from modern right wing propaganda on 'free markets' which I thought the thread had gone to. So when someone suddenly starts talking about real 'markets', have to re-calibrate.
Yes, markets are artificial, in the same way that a peaceful society where murder is prohibited is artificial. Doesn't mean they are not beneficial.
>>That is why health care free markets don't work. When you are having a heart attach you aren't shopping around for a bargain price.
Emergency care is a small subset of healthcare spending, that should be government provided. The rest is far better provided by a free market. The example of the cosmetic procedures industry, and how it vastly outperforms the healthcare industry with the advantage of being more market based than the latter, shows how beneficial market freedom is:
https://www.ncpathinktank.org/commentaries/the-market-for-me...
The industries at the top are the most government run/subsidized, and the ones at the bottom the most consumer/market driven:
https://www.aei.org/carpe-diem/chart-of-the-day-or-century-3...
Healthcare is not exception to the rule that more freedom in the market generates more efficiency and innovation.
I think you are missing the part where there are very few interactions between individuals. Since the corporation was granted person hood, and the bulk of all interactions are really between consenting corporations, actual real humans are left out. If me a human individual consents to interact with a corporation that is also a consenting person, it isn't really equal, or free. The corporation can do a number of things, like swamping the human with legal costs, non-stop lawsuits. Or on grander schemes, maybe the corporation can buy up all the food or land in an area, and force a population to capitulate and come to terms with whatever advantageous agreement the corporation desires.
Your view of the individual, while romantically desirable. I can't argue against it, it sounds nice. It doesn't actually work in practice, because the free market is NOT made up of 'consenting adults'. It is made up giant constructs, and humans under duress, forced to make due to survive. And when it gets bad enough, the humans take their 'freedom' and rise up to protest, and society either collapses or maybe some half measure like unions is the outcome.
You can't use mental gymnastics to justify regulations. Corporations are just legal arrangements between individuals. There is a chain of voluntary interactions linking the shareholders to any action the corporation takes. To restrict corporate behavior is to restrict the right of people to coordinate their actions through legal arrangements like corporations.
>The corporation can do a number of things, like swamping the human with legal costs, non-stop lawsuits.
If powerful entities, whether people acting collectively as corporations, or just wealthy individuals, are able to do this, then that is a problem with the legal system, and the solution should be targeted at fixing that problem.
These problems should not be used as an excuse to create laws that violate the right to freely contract. In practice, these laws and the principles behind them end up being used by the same corporations that you've turned into your bogeyman, to massively exploit the population.
What actually happens in practice, humans are not rational, they have to eat, and all decisions are compromised. Corporations are a group of individuals, but I've seen plenty of middle managers, that have to hit their numbers, are feeling the pressure, and they will definitely break laws, dump waste, take advantage of underlings. And, the underlings, they have bills, have to eat, they go along with it. It is pressure all the way down through the organization, nobody is free to make 'contracts' between individuals. There are no free decisions.
Guess overall, think you are missing the the power dynamic and how that plays out in groups. LOL - Groups of monkeys.
https://www.businessinsider.com/venture-capital-big-tech-ant...
Unionized journalists not disclosing that they're unionized —and thus that they have a financial conflict of interest when doing economics/politics stories— is a major problem as virtually the entire mainstream media has a unionized workforce, and most people —I presume until I informed you of this, you included— are oblivious to it.
The researchers formerly worked for the government, and have expertise relevant to jobs in the regulatory sector of the government. They stand to directly benefit from any expansion in public funds allocated for regulatory agencies.
Moving on, even assuming this article's claims are correct, classical economics already recognizes that there are edge cases where a free market without government intervention is not absolutely optimal, so this doesn't invalidate it.
And even in these cases, the inefficiencies created by natural monopolies can be addressed without suppressing the free market, via government subsidizing the development of decentralized open-source protocols that are capable of entirely replacing centralized parties in many markets. The state, being publicly funded, is the only entity capable of cost-effectively funding non-profit initiatives like this that produce public goods.
Finally, the common characterization of a free market "anarchy" is nothing more than propaganda to vilify a free society. Laws, enforced by the state, that respect and protect the right of consenting adults to engage in mutually voluntary interactions is the opposite of anarchy. It is a peaceful well-ordered society. The government, when misused, becomes an instrument of predation, as Frédéric Bastiat explained some over 170 years ago:
https://oll.libertyfund.org/page/bastiat-and-the-state
"Man rejects Pain and Suffering. And yet he is condemned by nature to the Suffering privation brings if he does not embark upon the Pain of Work. All he has, therefore, is a choice between these two evils. How can he avoid both? Up to now, he has only found and will only ever find one means, that is, to enjoy the work of others, to act in such a way that Pain and Satisfaction do not accrue to each person in accordance with natural proportions, but that all pain accrues to some and all satisfaction to the others. From this we get slavery or even spoliation, in whatever form it takes: wars, imposture, violence, restrictions, fraud, etc., all monstrous forms of abuse but in line with the thought that has given rise to them. We should hate and combat oppressors but we cannot say that they are absurd.
Slavery is receding, thank Heaven, and on the other hand, our aptitude for defending our property means that direct and crude Spoliation is not easy to do. However, one thing has remained. It is this unfortunate primitive tendency within all men to divide into two our complex human lot, shifting Pain onto others and keeping Satisfaction for themselves. It remains to be seen in what new form this sorry tendency will manifest itself.
Oppressors no longer act directly on the oppressed using their own forces. No, our conscience has become too scrupulous for that. There are still tyrants and victims certainly, but between them has placed itself the intermediary that is the State, that is to say, the law itself. What is more calculated to silence our scruples and, perhaps more appealing, to overcome our resistance? For this reason, we all make calls upon the State on one ground or pretext or another. We tell it “I do not consider that there is a satisfactory relation between the goods I enjoy and my work. I would like to take a little from the property of others to establish the balance I desire. But this is dangerous. Can you not make my task easier? Could you not provide me with a good position? Or else hinder the production of my competitors? Or else make me an interest free loan of the capital you have taken from its owners? Or raise my children at public expense? Or award me subsidies by way of subornation? Or ensure my well-being when I reach the age of fifty? By these means I will achieve my aim with a perfectly clear conscience, since the law itself will have acted on my behalf and I will achieve all the advantages of spoliation without ever having incurred either its risks or opprobrium!"
Sounds like you understand and agree that markets need some regulation ('edge case' being the debated gray area).
And you are ok with Governments stepping in to prop up competition to Monopolies. Guess that is a different way of doing it. Instead of breaking up monopolies to foster competition, seems you are arguing that it is better to allow monopolies to exist (to be free to do what they want), but to help keep a free market the government can step in and support their competitors until they can compete? Not sure how well that would work in practice. I think when the US had had the stomach to break up monopolies it has worked out better for the free market, because it keeps competition. I don't think AT&T and Standard Oil would have been taken down by more efficient rivals. That is the entire problem with monopolies, they don't have to be efficient.
Also, whatever your opinion about modern Unions. The Free Market created Unions. If workers could actually compete for fair wages, their wouldn't be the need for unions. Workers were living in squalor in factory towns as slaves. Unions arose to fight for safer conditions, less child labor, and pay. When a few humans come together and form a company it is ok? But humans come together to form a union it is bad? What if a group of people came together to call themselves a 'consulting firm', and hired out their labor? Would that be more appetizing? So have labor firms, that are companies, that could negotiate working rates and supply labor? Would that side step calling it a 'union' even if it could do all the same things.
I really don't get the backlash to unions. Almost all of the 'freedom's people take for granted today were from unions fighting for them. Weekends? 40 hour weeks? Vacation? Do you think the free market would have provided those? The free market treats humans as cattle.
Yes, I want the government to prop up competition to monopolistic entities, and I want that competition to become the new monopolist. The difference would be that that government-propped-up competition would be an open standard or a decentralized protocol —think TCP/IP, or a public blockchain— that doesn't require active management by the state. Once it has become the market standard, it is self-sustaining, and more efficient than any private company would be in that role, since it doesn't have a proprietor that would abuse its monopolistic position to extract economic rent.
>>The Free Market created Unions. If workers could actually compete for fair wages, their wouldn't be the need for unions.
Absolute nonsense. The "free market" doesn't create laws that make it illegal for an employer to refuse to employ unionized or striking workers. Greedy humans, who have no respect for the free market, do. And yes, people can convince themselves that they're being treated unfairly, and that they are entitled to use the state's apparatus of violence to restrict their fellow man's freedom to contract, for reasons of greed. Just because they're workers, doesn't mean their grievances are automatically legitimate.
>>Almost all of the 'freedom's people take for granted today were from unions fighting for them. Weekends? 40 hour weeks? Vacation? Do you think the free market would have provided those? The free market treats humans as cattle.
Unions destroyed or severely handicapped nearly every industry they took control of. The mandated benefits they encouraged to be imposed are immoral, in restricting the freedom of contract. As for improving work conditions and wages, that was already happening —and at an even faster pace— before industry was captured by unions.
Detroit had the highest capita GDP in the US in 1950, and that prosperity emerged over the course over several decades where unions were a non-factor in the auto industry. 50 years after the UAW took over the US auto industry, and Detroit was a ghost town.
Anecdotal, yes, but entirely typical.
I meant the free market created unions, by forcing humans to group together for self preservation. Remember, at that time corporations hired private armies (Pinkertons), to kill anyone that protested low wages or working conditions. The Government did not step in and create unions, people were being killed and the Government stepped in to protect them.
I'm not arguing for socialism, I'm assuming you would call unions socialist, and there is a wide field of study that unfettered free markets lead to socialism. Mostly because the population becomes so poor the government has to step in to prop up the workers so they can eat, which is really supporting the corporations since the corporation then does not have to cover all the wage. Welfare programs are in essence, providing the 'difference', that the corporations should be paying. If 'Free Markets' worked, then corporations should actually be paying higher wages. (https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-... (https://newpolity.com/blog/capitalism-produces-socialism)
But, it is complicated and has changed over time. Unions also grew, became bureaucratic, and corrupt. Generally they also became calcified and hindered progress. So there are examples of this I agree with, mostly when technology changes, and then union laws didn't keep up. ( I think Train Unions were biggest example I think, as train technology advanced, the rules about staffing didn't keep up and did cause huge inefficient overhead).
Anecdotally, I have worked in Union plants, and Non-Union. I've seen union plant employees being very engaged and driving efficiency, and I've seen non-union (hence supposedly free and more incentivized by pay) beat down, insolent and checked out. My overall impression was that when humans are living in fear and can be fired for looking at the boss wrong, then they are not the most productive. This mentality only works for the most manual labor industries where humans are just muscle.
Your views on monopolies are different. I can't imagine there are 'free market' activist that would agree that propping up competitors to monopolies is better than splitting up monopolies. That sounds like something, that if tried, would be called 'government interference'. But, it is interesting idea.
Not sure this standards approach would work with all industries, especially those that require large capital investment.
I guess you would be ok with something like the Government making a law to force MS Xbox and Sony PlayStation to have open protocols so games could be played across platforms? I think that sounds interesting, but also think all the 'free market' activists would come up with some reason why that is government interference.
I am sympathetic with this idea. High Definition TV's were successful in large part because of government enforced standards, so that all companies equipment could interoperate. I also remember it was the 'free market' side that opposed those standards because they would 'be too expensive and bankrupt small business'.
Just seems like these free market arguments just move around depending on what the current entrenched companies need to survive.
Both are greedy, and people in both sectors will happily convince the population to institute anti-free-market laws that give themselves a monopoly if we let them. That's what we let the unions do, when we passed laws making it illegal for employers refuse to employ unionized workers, or to negotiate with anyone outside of one once one emerges in their workforce and demands collective bargaining.
>I meant the free market created unions, by forcing humans to group together for self preservation.
Wages were rising at a rapid rate in the late 1800s, before unionization rates became significant, so no, the evidence clearly debunks your claim that the free market was harming workers. Unions were formed out of greed.
>Anecdotally, I have worked in Union plants, and Non-Union. I've seen union plant employees being very engaged and driving efficiency, and I've seen non-union (hence supposedly free and more incentivized by pay) beat down, insolent and checked out.
Anecdotally, I always hear the exact opposite from people who've experienced working in both environments.
>I guess you would be ok with something like the Government making a law to force MS Xbox and Sony PlayStation to have open protocols so games could be played across platforms?
Government does not have a right to use the threat of violence to compel people who are not defrauding or assaulting anyone to act a certain way, so no I would absolutely not be okay with it.
As I keep saying, I totally oppose regulations that violate the right of consenting adults to engage in mutually voluntary interactions. Offering a game system using a particular protocol is a mutually voluntary interaction and there can be no justification for prohibiting it.
I would support the government funding an open game system standard that various manufacturers would then choose to voluntarily adopt because of the technical superiority of that standard, or even purchases by the government from manufacturers adhering to it.
Still think it is a tall order to have wide adoptions of standards without a little bit of a 'stick'. High Definitions TV's wouldn't exist if the government hadn't mandated the change to that standard. A lot of companies resisted it.
Except for a few utopian cases like TCP/IP, I'd be hard pressed to think of any 'standard' that grew on its own without some enforcement.
Government can subsidize adoption of open standards until they've become the market standard. Even this clunky solution is better than the government assuming a right to interfere with how people use their own private property in mutually voluntary interactions.
Also, china isn't liberal, that's why it does so well. They also don't have intellectual property.
The point is, China's economic development massively accelerated once it massively moved toward the direction of market economies. They still have significant centralization, which is why they will likely reach a ceiling on their productivity, after which growth will be much more tepid, but the point stands.
Which got them where they are, you mean.
But you seem to want to promote liberal ideology regardless of merits.
The facts all undeniably point to the truth, which is that anti-free-market left-wing ideologues were responsible for the Great Depression.
You say it like it's a bad thing?
How quaint.