Without morality, the market economy will destroy itself
theguardian.com
theguardian.com
There is also the matter of subsidy and when the government bails a company out. Old business models get kept running when the invisible hand of the market would have swept them to one side, maybe to allow new business models to take hold.
Then there is outright corruption - backhanders to win government contracts. This is not 'letting the market decide'.
Even worse there is the likes of Lockheed Martin able to own the government, listen in through NSA on rival contractors bids and win favourable contracts for themselves and the companies they do business with.
Then there is the small matter of law. Larger businesses can get away with polluting the environment and running unfair business practices that mean their rivals are not playing on a level playing field.
Also, there are costs to business that are not paid for by those businesses. If the taxpayer is expected to pay for the road to an industrial estate on a greenfield site just to get some lousy business to setup in that area then again this is not 'market economy'.
Also there are those government services that are sold on the private marketplace. For instance, the market in weather information, e.g. for television news, should be a profitable one, however, if the government's private arm of their weather service - e.g. the UK Met Office - competes in that space then again things are not fair.
However you look at it we have not got a 'market economy', we have something corrupt, with cronies and their backhanders rigging the marketplace. It is not free and fair trade. We can forget about 'morality', let's just do things by the book.
Or the original poster could be trying to impose his story on reality, in which case I'd have to ask why he thinks that's such a great story in the first place[1]!
We've never seen how a free market economy actually works because we don't let free market economies form without first destroying them via regulation.
We have models which persuasively suggest that a free market economy would be the most efficient possible form of trade, or at least way more efficient than our overrregulated fustercluck.
So the poster seems to be saying "jeeze, why don't we try an actual free market economy"!
Which seems eminently reasonable to me, and not at all "imposing his story on reality".
Yes it has. If you are going to claim that your desired system has never existed on the face of Earth, then your desired system is a utopian ideal that most likely cannot exist in the real world, or worse, would behave like a standard revolutionary utopia by destroying actually existing societies when you attempt to create it.
Oh, wait, that's exactly how neoliberalism behaves.
The word you want is communism, not socialism. And the criticism is valid: the USSR was far from a communist state. It was more like a mixed economy leaning communist. Nobody is going to deny that there were elements of socialism in the USSR, just as there are elements of socialism in the USA now. Socialism != communism.
And I'll repeat: we're talking about a specific thing, not all capitalism. This thread is re: whether or not pure free markets work, not whether or not capitalism works. Hence your link misses the point; as, I suspect, do you.
You are also making the mistake of framing all of these issues as part of a grand 'government vs. market' battle. There is no reason why a government cannot provide good public services from a reasonable tax rate, and also avoid corporatism and regulatory capture. In fact, I would say there's almost no connection between the former and latter. The US has a far more pro-market attitude than most of the rest of the Western world, but also has stronger links between private contractors (particularly military contractors) and government than would be acceptable in most of those other countries, and certainly its fair share of regulatory capture, particularly at local and state levels. Within Europe, there are low-tax economies, and there are high-tax economies, and no apparent connection between levels of taxation on the one hand, and on the other hand, economic success, levels of corruption, or poor regulation. These issues are actually a lot more granular, and a lot more complicated, than can be captured by the hope for the righteous and complete victory of one ideological force against another.
Yes, there is: governments are run by people, subject to the same incentives as people in any other part of society, including the perverse and misaligned incentives that cause "market failures" in other parts of society.
The US has a far more pro-market attitude than most of the rest of the Western world
Attitude is not the same as reality. If the US really were more pro-market, instead of just talking like it, we would not have given a massive bailout to the same investment banks that tanked the economy in 2008. (Nor would we have allowed the various regulatory schemes that enabled the crash to happen in the first place.)
Then explain the proven successes of state regulatory mechanisms. And no, that doesn't allow explaining them away by trying to pretend they've never happened.
Easy: they are simply less efficient than market solutions to the same problems.
Examples, please?
I rode an elevator today without worrying about falling to my death.
No one is spraying dioxin as a sealant on the streets in my area because it was the cheap option.
There are, quite literally, a million examples like this that may be hard to think of because, when regulation works, you don't have to think about it.
I don't have to worry about my next door neighbor starting a pig farm.
Do you live in a covenant community? I do, which means it isn't government regulations that are stopping my next door neighbor from starting a pig farm, but the voluntarily adopted by-laws of the community, funded by the dues paid by homeowners. Do you have any evidence that homeowners in such communities pay more for the same benefits, on average, than homeowners in towns and cities where the local government's zoning laws are the applicable regulations?
I rode an elevator today without worrying about falling to my death.
How much did you pay in taxes for that assurance? How much would you have paid in a free market where private insurance companies enforced safety regulations--i.e., the inspection certificate inside the elevator was issued by an inspector hired by the insurance company that had liability for any injuries caused by a defect in the elevator, rather than an inspector hired by the government? Do you have any evidence that the latter cost would be higher than the former for the same benefit?
No one is spraying dioxin as a sealant on the streets in my area because it was the cheap option.
I didn't know dioxin was even an option for street sealing, but let's assume you meant "some harmful substance". Once again, you're paying taxes for this benefit; do you have any evidence that you're getting the benefit more cheaply than you would in a free market system where roads were privately owned, and the owners were liable for damages to neighboring property owners, just as I would be liable if I dumped toxic waste on your lawn?
when regulation works, you don't have to think about it.
Yep, right up until it stops working catastrophically. Ask the residents of Gulf coast communities how well government regulation prevented them from suffering serious damage as a result of the Deepwater Horizon spill. In a free market, BP could not have just gone and started drilling with a nudge-nudge wink-wink from Federal regulators who had no real stake in the outcome and who made no serious effort to sanity check what they were doing; they would have had to convince the Gulf residents themselves, directly, that the risks of drilling were worth the benefits.
That depends, what are your fees and what are the powers of your HOA? Seems a bit onerous to have to do a deep dive into a contract that covers everything that zoning laws and the like would have to cover just to see if that area is suitable to my needs.
>How much would you have paid in a free market where the inspection certificate inside the elevator was issued by an inspector hired by the insurance company that had liability for any injuries caused by a defect in the elevator...
And how do I check if that insurance company is legitimate every time I decide to use an elevator? In the case that they are legitimate how do I know they are not making actuarial judgement on the relative value of the human lives when it comes to inspection resources? IOW if I am visiting a building in a lower class neighborhoods, do I assume that fewer resources have been spent making sure the equipment in the area is safe?
>I didn't know dioxin was even an option for street sealing...
Neither did the residents of Times Beach, Missouri. http://en.wikipedia.org/wiki/Times_Beach,_Missouri#Dioxin_co...
Do you think Russell Bliss, the waste hauler that was hired to seal the town's streets, had enough money or enough liability coverage to reimburse the entire town which had to be abandoned? Or should we just trust in market forces to keep such a short sighted massively destructive incident from occurring again...I mean, who is going to hire that guy for another sealant job? Problem solved, right?
The fact is that Libertarian dogma ignores reality on several fronts. One, it assumes near perfect information...a goal made even more impossible to reach than it is already considering the Cambrian explosion of agreements and jurisdictions that must be considered in every possible interaction between humans or between humans and anything constructed by humans where laws and regulations are thrown out of the window in favor of market interatcions. The second unrealistic assumption is that everyone has the capacity to cause only enough harm for themselves and their insurance to pay for. The third fantasy is that all harm that is caused by humans can be attributable to a bad actor after the fact so that the market can punish them appropriately...
The reality is that is is far easier and cheaper to allow the wisdom of those who came before stop problems before they start in the form of laws and regulations that supersede and outlast any ephemeral market dynamic or the memory of the negative consequences of some of those interactions.
Will there be failures? Sure. Previous failures is how we ended up with the laws and regulations we have now. It is our job to constructively add to that body of wisdom. Will some outlast their usefulness? Absolutely. We must be vigilant and change laws and regulations as necessary. But for the vast majority we can leave well enough alone.
You would have to do the same with the zoning laws to know whether they are really meeting your needs, not to mention whether they are effectively enforced. For example, there is an industrial building within earshot of our house that likes to switch out trash dumpsters at 5 in the morning, when my wife and I would greatly prefer to be asleep. We complained to the HOA, but since the industrial building is not on land owned by the community, they can't do anything directly; all they can do is appeal to the county government to enforce its zoning ordinance, which supposedly prohibits such activities within a certain distance of residences. Did the county actually do anything about it? Hollow laugh.
how do I check if that insurance company is legitimate every time I decide to use an elevator?
How do you know the government inspector is legitimate?
Neither did the residents of Times Beach, Missouri.
And who hired the waste hauler there? The city government.
it is far easier and cheaper to allow the wisdom of those who came before stop problems before they start in the form of laws and regulations
I'm sympathetic to this argument. However, I don't see governments actually doing this. I see the "wisdom of those who came before" embodied, not in governments, but in social structures and organizations that people create and join voluntarily. For example, whatever your opinion might be about religion as a belief system, churches typically do far more to help the needy than governments do.
I see it in both. Though I would be willing to entertain the idea that people, at the age of majority or at certain milestone ages throughout their life, sign a 'declaration of civil life' or some such that basically says "Yes, I am aware of the laws and mores that cover my area and I agree to be a good citizen and, in return, I expect to have a voice in that governance."
Those that don't sign can move to a zone with laws they do agree with or a Christiania type 'freezone' where people can live free of social agreements that they would have otherwise inherited by accident of birth.
I support this because there has not really been a government free zone in any stable sense since before the written word. I'd be curious how it actually plays out.
The same incentives exist in any system. In fact, in what you might call 'pro-market' sytems, you often find business people closely involved with regulation, and also a lot of government services sub-contracted out to private companies, which makes the incentives shift the other way. So, for instance, the incentives inherent in for-profit prisons led to the judge-kickback scandal:
http://en.wikipedia.org/wiki/Kids_for_cash_scandal
You're also going up against the lack of evidence for your position. As I say, in Europe, the countries with the highest levels of taxation and regulation often have the best anti-corruption reputations, the most well-functioning regulatory systems, and the most buoyant economies.
Yes; I never said otherwise.
in what you might call 'pro-market' sytems, you often find business people closely involved with regulation
I don't call these "pro-market" systems, precisely because business people being closely involved with regulation is not, IMO, "pro-market". It may be "pro-business", depending on the business, but businesses that succeed this way are not "pro-market".
a lot of government services sub-contracted out to private companies
That's not "pro-market" either; the companies may be private, but the demand they are satisfying is not, it's generated by the government.
In Europe, the countries with the highest levels of taxation and regulation often have the best anti-corruption reputations, the most well-functioning regulatory systems, and the most buoyant economies
References, please?
That is simultaneously true and irrelevant. The price of good government is vigilance on the part of the population. People want to vote themselves a New Deal and a strong federal government without the trouble of amending the constitution to add the appropriate checks against the new powers the federal government claims by reinterpretation, here we are.
Governments are terrible blunt instruments that can be simultaneously corrupt and incompetent, but somebody has got to build the roads and stop corporations from dumping toxic waste in the water supply.
I do not see any proclamations of what capitalism can and cannot tolerate. Just a statement that we've never seen an actual free market, since we regulate the hell out of everything.
I did not see anything about an "Austrian New Man", or even the characteristics necessary for market participants. Just a statement that we've never seen an actual free market, since we regulate the hell out of everything.
The point is if you're looking at The Real World, there's no evidence -- pro or con -- for or against a free market system. We've never experienced one. Regulated markets aren't in any sense comparable to an actual free market.
Even the smallest regulation in a free market system makes it an entirely different beast. For example if you decide to impose a tariff on a single industry in an economy, that alone will result in massive inefficiency -- and as a result, wealth disparity -- such that the system can't meaningfully be called a 'free market'. At all. It's just a regulated market economy, like we currently have.
Hence you can't take mixed economies with varying degrees of 'free-marketness' and infer from those how actual free markets will work.
There's the question of whether implementing free markets is even possible. It would certainly take a lot of barricading of human behavior from the market -- is that achievable? I don't know.
But the point is we've never tried it, so why not try it before we shoot it down?
>contrary to experience
The only experience we have is of regulated markets. There's no "contrary to experience" to ascribe to free markets, because we've never experienced free markets.
We've theorized free markets. Again, models we've built say free markets would likely be extremely efficient and beneficial for all of us.
But we've never seen, empirically, free market anything. As stated above, a mixed economy -- even one that's, like, 99% 'free' or whatever -- isn't at all comparable to a true free market. The smallest of tamperings with a true free market turns it into a completely different beast, when we're looking at things whole-economy scale.
>So the OP's argument seems to be, if we just deregulate even more, then - contrary to experience - we get a better system
In sum, OP's argument isn't that we should 'deregulate even more'. It's that we've never seen a free market, but should try one. Trying a true free market isn't a matter of 'deregulating more', it's a matter of deregulating entirely. Blank slate, start again.
Bullshit. Purest bullshit. No theoretical ideal can ever exist 100% pure in the real world. If you claim that it must, then you're building castles on clouds.
>In sum, OP's argument isn't that we should 'deregulate even more'. It's that we've never seen a free market, but should try one. Trying a true free market isn't a matter of 'deregulating more', it's a matter of deregulating entirely. Blank slate, start again.
This is a bullshit argument which relies on a known poison becoming a not merely effective but transhumanly miraculous cure-all pill when taken in 100% purity. You might as well become a homeopath.
Antarctica may also be officially government-less, but my guess is that it would be considered an artificial economy, due to the transient nature of the inhabitants and the mounds of government capital required to run the various camps.
There are some great aspects of the free market and some terrible ones.
People have been dealing with these issues for thousands of years. See those Sumerian? scripts proscribing punishment to a carpenter if a house he/she builds collapses.
I don't like the tone of that article at all. When you start demanding that morality, for all its subjectivity and relativity, be involved with economics, you invite troubles. The next step is for morality to be mandated through regulations. Such regulations rarely do more than benefit specific players, those who know how to bend the rules or those with higher up connections.
While I was expecting the author to call for such regulation, he surprisingly didn't.
In my view, the correct way of fighting monopolies would be using the great social tools at our disposal to make consumers more informed about the distant implications of their buying decisions. This will create an informed Capitalism, one where in the consumers are the ultimate regulators.
Can't upvote this enough.
Other than that, the middle-upper class is becoming more aware, informed and caring, and that more than makes up for the lack of involvement of the lower classes.
That logic is the problem -- particularly on the part of the people who actually want to implement it. Legislating morality is a disease that encourages people to believe they only need to act morally when the law forces them to.
The thing about markets is that they don't want anything in particular. It isn't "markets" that want poor people to remain poor, it's a collection of specific instances of non-poor people who choose to value something else over improving the lot of the poor. A market is just a collection of people doing whatever it is they think is best. It doesn't have a conscience outside of the individuals that make it up, but its results do reflect the collective choices of the participants.
But that was a very myopic, "developed" nation view. I hadn't considered the use of cheap global labor and the rise of the middle and upper classes in developing nations that would provide the necessary demand for goods and services, making the "workers" in developed nations mere surplus to be discarded/ignored. (I'm watching "A Christmas Carol" right now.)
Seems to be a lot of expressions like that in left wing journalism. "Colonised our souls." Like all of a sudden you're reading a Yeats poem.
For those who don't know, the Archbishop of Canterbury is the leader of the Church of England, and the current incumbent, Justin Welby, used to a finance executive in the oil industry, and tends to be engaged with these sorts of issues.
This only illustrates the fact that "capitalism" and "free markets" are not synonymous. In a free market, producers who overproduce go out of business.
Mark Twain wrote a remarkable little book called "A Connecticut Yankee in King Arthur's Court", which to me is the quintessentially American book on capitalism as it is fetishized by Ayn Rand etc. The man travels back in time, and proceeds to use his technical knowledge to enrich himself, and civilize the medieval society. One of the steps he takes is to introduce advertising to the knights shields. This is presented un-ironically.
Of course Twain grew up in a very different time where the ratio of city to country was far different, and cities themselves were much humbler affairs. It was easy (and indeed the default) to be "in nature". So the product of "American ingenuity" no matter how crass represented lovely "civilization", and one could turn away from it if one didn't like it, and venture back into the forest. But now, with our mega-cities there are few forests left, and they are far away, and if we turn away from one advertisement we are just confronted with another and another and then another.
They can try, yes; but if they don't succeed, they go out of business. In systems that are referred to by the term "capitalism", OTOH, they can often get the government to force increases in demand--for example, railroad owners in the late 1800's who had failed in open competition went to the government to get laws passed that gave them exclusive rights to certain routes.
Also, a free market means that if people choose to buy something, then that something gets made, whether or not it's something that you think "ought" to be made.
with our mega-cities there are few forests left
Do you have any actual numbers to back up this claim? AFAIK there is still a lot of land occupied by forests and other "natural" environments. I live near a major city but there is plenty of forest an hour's drive away. Maybe you need to get out more?
if we turn away from one advertisement we are just confronted with another and another and then another
I think that depends on how you choose to spend your time. Yes, if you spend a lot of time watching TV you can't avoid seeing a lot of ads. I solve that problem by not watching much TV. Similar remarks apply to other kinds of advertising.
Btw, I'm not trying to say I'm in favor of advertising; I'm not. I think most of it is a great waste of effort. But ads aren't aimed at someone like me anyway; they're aimed at people who are actually influenced by them. So if you really want to get rid of ads, you need to find a way to convince people that they shouldn't be influenced by them. Which, btw, is what a true free market requires anyway: it means the responsibility for making sure that your buying decisions reflect your actual values lies with you.
No it doesn't. Capitalism still works just fine if people decide to work less and spend less.
I think you can intentionally inspire people, since we all have experienced people who do it to us over and over again. So all that must be done is treat that as an abstract principle rather than intangibility, define it, and apply it more broadly.
It makes no more sense to shame poor people who are desperate for welfare than it does to shame wall street bankers. Both are products of the same system, and both groups can be given the space to change themselves through modifying the way things work rather than who is working in them.
If instead you ask them how to change the system, allowing them to be better, they can be your ally. I do not think approaching them with a pre-formulated answer will as effectively draft them into the cause as genuinely asking them how they would do it.
Also really, while I'm sympathetic to the idea that people's behavior is a largely a product of circumstance, if I ask a poor person who had resorted to crime to survive how to change the system, I expect familiar answers about making the system more fair.
If I ask a Wall Street Banker, who is happily extracting maximum profits from the poor, regardless of cost, I expect familiar answers about how they shouldn't make poor economic decisions.
I have actually spoken to people at all levels of society, and I haven't heard a lot of great solutions about how to change the system.
Since you have either had different results from your conversations, or have ideas of your own, I invite you to share some here.
http://atljmi.tumblr.com/post/69789805435/a-girl-who-cant-di...
It is possible. It's asking people to abstract themselves from their material circumstances and consider the underlying principles of their world and,given those principles, think about how they can be shifted toward something better. I did not need to moralize first against the school system's injustices in order to reach that little girl in that moment; that is a displacement from the actual thing I wanted to do. I had to think about how to reach her in that moment itself within the boundaries as they are. Directly addressing the moment itself rather than ways to make the future version of this moment more palatable.
And, to use your framing from earlier, I'm curious about what change in the system would make you able to be better?
I do not however have any desire to by a martyr. I want to do a good job and show that outcomes can improved via new modeling that was otherwise cost-prohibitive to attempt, it can subsequently be expanded out and will not require others to accept the same sorts of pay cuts that I anticipate. Admittedly this is in the planning phase, but I was a visual artist for a long time before this and so the prospect of not having much money is not frightening. I proved long ago that I could live on a relatively minor amount of resources. It is, in a way, an investment of my own earning capacity into the development of new ideas.
Determine the end goal, figure out how it is possible given everything that I have the power to modify, figure out how to compensate for the things I cannot modify myself, and then use that to show that it is a meaningful thing to do systemically. Sounds lovely. I'll let you know how it goes in real life and how I adjust as I proceed.
I think it's not too hard to come up with ways to change things, it requires some rigor in the approach: how did they come to be, how have I been granted any role in that, and how can I change it.
While the article was not unreasonable, I had the feeling he was trying to reinterpret these millennia of moralizing into something that made economic sense, and all he could come up with was "monopolies are bad". Which is true in most cases, but I don't think he made a convincing connection with personal ethical behavior.
http://de.wikipedia.org/wiki/Greed
Also see: selfishness, double standards, externalizing risks and costs while the reaping profits. Such things (can) stem from greed, and they can add up to catastrophic effects. These effects linger, while the "gains" from greed end when the greedy person dies.
>a convincing connection with personal ethical behavior
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}I couldn't understand what your code was supposed to prove, probably because it was full of premature optimization and mutable state.
No, but I mentioned those things because they can result from greed, which is why greed is bad. If greed didn't result in destructive action, or if the negative effects were borne by those causing them, it wouldn't matter. And those things, multiplied by millions or even billions of people in an endless loop, can lead to vast destruction, too.
> this is not what has been preached for millennia
Whoever oppresses the poor to increase his own wealth, or gives to the rich, will only come to poverty -- Proverb 22:16
Greed (englisch für Gier) ist:
der Originaltitel des Films Gier (1924)
der Name einer deutschen Band, siehe Greed (Band)
der Name des Albums der Swans, siehe Greed
You still have failed to define greed (or show that it causes these bad things you refer to). And your quote is very vague, I have no idea what it is saying a person should avoid doing.
http://en.wikipedia.org/wiki/Greed
> the inordinate desire to possess wealth, goods, or objects of abstract value with the intention to keep it for one's self, far beyond the dictates of basic survival and comfort.
or, in German: http://de.wikipedia.org/wiki/Habgier ^^
Markets are a great optimization mechanism. It is up to societies to decide what they should optimize.
But of course, that takes all the delicious magic out of them, so people are going to have to yell something about freedom now.
My further extrapolation is to turn the full might of the market to advertise and sell poverty relief without treating it like charity but instead treating it like a product. None of the moralizing, just focus on what the purchaser will get out of the exchange, like any other product.
1) Thou shalt not steal, cheat, murder, etc... 2) Notions of karma -- i.e. everything you do unto others will come back to you.
> "No social system (and no human institution or activity of any kind) can survive without a moral base. On the basis of the altruist morality, capitalism had to be—and was—damned from the start." -Ayn Rand, Capitalism: The Unknown Ideal, 30
Is it in the enlightened self-interest of a person that after they died, there is still life in the Universe? Is it in my enlightened self-interest that those who starve and have no water have a better life?
What, exactly, is the difference between self-interest and selfishness? Is one not just a euphemism for the other?
-- Thomas Sowell
Because capitalism predates feudalism as the economic model and slavery predates feudalism.
Unfortunately, you have leftist statists that want market economies to fail so they can impose their statist, opressive regimes on people under the guise of "helping the people"
You really believe this is the case with people like Emanuel and the Obama admin in general? Because, I wonder: what do you think their endgame is? What is their true motivation for wanting to establish a statist, oppresive regime?
It seems to me that we currently have a corporatist regime. If I am to choose between rule by corporations (where the motive is profit) and rule by the state (where I presumably have a voice), I'd choose the latter.
Problem is, however, we currently have the worst of both worlds: rule by a corporatist state.
Saying "X is wrong" and "Y knows X is wrong" mean two very different things depending on your analysis. "Notions of morality" is about the first statement and about the second. Does Y know X is wrong in virtue of the moral fact that X is wrong? If grass is green, there's something I'm learning when I read "Grass is green" — or is it upon seeing grass that I know grass is green?
The point here is the features of facts: one does not see the wrongness of an act in the way that one sees grass is green, irrespective to the question of language. Now, of course, morality is primarily codified into symbols — do facts exist here, behind the veil of language? Perhaps. But the main question here is the structure of a fact: Is it a picture? If I know the constant of gravity, I know something about the shape of galaxies through relativity. I can see regularity across the heavens. I can test it and measure its components, but only in virtue of axiomitization, which is linguistic. Well, how does one test morality? Does one collect report on opinion, or does one look into the world to discover their structure? Certainly reports on moral opinion will be picture-like, but do they disclose the structure we would find if morality could be discovered in the world without reports on it? Is direct evidence possible without the existence of indirect evidence?
(By the way the "social" I'm referencing here are things like class conflict, racism, etc. - not "social" as in communication tools.)