Liberal in the Land of Conservative

Well, I've found that it's not the economic arguments that libertarians struggle against. Libertarians can kick liberals'/progressives'/socialists' butts from here to the moon in economic debate.

The solutions to our economic problems are readily available in the mechanics of the free market. The real problems are political. Among them:

1. Control freaks. We all know them. For whatever reason, they have a bee up their bonnet about people being free to make their own decisions, governing their own lives as they see fit. Some people out there (prominent in politics) just can't stand to live without telling everyone else how they have to live their lives. Control freaks think they know how to manage everyone else's lives better than everyone else can manage their own respective lives. These people use lawmaking as a means to interefere with the free market in order to enhance their control over others. That's one reason why truly free markets generally don't exist on a large scale.

2. Cartelization of industry that allows bigger firms to charge higher than market prices. Big firms (ironically) often favor government regulation because it raises the cost of doing business. While they do pay some cost in enduring the regulation, they can afford this regulation. Smaller competitors, on the other hand, can't afford the regulation and are thus forced out of business altogether. Now that that competition is gone, the bigger businesses can charge higher than free market prices because smaller businesses aren't there to keep prices honest. Big business uses its financial pull to establish a government enforced cartel. I've read more than once that voluntary cartels don't hold up very well for very long, and gov't force apparently does a better job of keeping the cartel together.

2, cont. Protest of regulation by large companies is simply a ruse to dupe people into thinking that the big companies stand to lose by the regulation and oppose it. On the contrary...they like it very much. Look at banking interests and the Federal Reserve Act in the early 20th century, or more recently, medical industry players and the healthcare bill just passed through the house.

In order to help pass regulations, big business likes to get in bed with government and court Congressional favor. That's the "special interests" at work out there.

3. Piggy-backing on point #2, a lot of politicians are woefully ignorant of economics (a lot of them are schooled in law instead), and are easily duped by economic fallacy and special interests who stand to gain from duping elected officials with said economic fallacies.

Please allow my intro/part 1 to be shown.

Oh, and that's just the politics of it. If you want me to get into the economic meat and potatoes of it, just let me know.

So what you are saying is that there should be no rules. The only scorecard is profit. In a way, the worlds best example of this is the drug cartels. While I thought the video was funny you actually agree that that is a better form of economics than what we have here.

Should we regulate polution? Should there be taxes? Should there be an FDA? USDA? How about regulation concerning transportation?

Greg, your way has been tried. We now call that the Dark ages.

Tom, what is "my way"? I was just pointing out political reasons for why we don't have truly free markets. I might understand your response, but I'm not really 100% sure I do. Please expound on what you've said.

"So what you are saying is..." - Who is the "you" in your first sentence?

Also, libertarian is not necessarily synonymous with anarchist, which is what the video very strongly implies.

Plus, while people might have a theoretical ideal of no government, theoretical ideals are not fully achievable in the real world. So, ***limited*** government is instituted to maximize freedom. I think this is what Rousseau talks about in the beginning of the Social Contract. We thus come as close to libertarianism as possible by pursuing minimal government, and try to let the free market operate with as little gov't interference as possible.

So, Greg - you have no problem when porn shops open up next door to elementary schools and churches? How about strip bars? Or, an asphalt plant opens up next door (and upwind, to boot) to your home? How about a huge hog-feedlot upwind from your house - you know, with the big "lagoon" where they store the hog crap?

The basic premise of "free marketeers" is that people exist to serve corporations. I reject that antiquated expirament - as Tom pointed out, above, in The Dark Ages

So, Guest - you think the premise of "free marketeers" is that people exist to serve corporations...just where did you get that from?

The premise of free marketeers is that the market should be regulated by consumers voting with their dollars (or whatever the prevailing monetary unit is). That means the people decide what is to be produced as well as the quantity of each good.

The premise of socialists (and Liberals and progressives, to an increasing extent) is that government should control how those dollars are spent. In other words, that the economy exists to serve the government's wishes, not the people's. Under collectivism, the economy produces what government officials think is important, not what the people think is important.

Problem is, government officials care about getting re-elected. They distribute money for political reasons, not economic ones. Producers and consumers make their choices by and large for economic reasons. Their choices thus are much better for guiding the economy to make stuff people actually want - to raise the peoples' standard of living.

A quick note on this "Dark Ages" business...

Government run command and control economy was tried in the Soviet Union. They wound up not doing too well. They were only a superpower for their military might, and otherwise were pretty much a 3rd world country. The West (primarily the US) had to subsidize communism through the IMF in order to keep it afloat. How's that for "Dark Ages"?

Capitalism gave rise to the industrial revolution, which helped to dramatically reduce famine and poverty. Look at how America flourished under near capitalism for so long. Dark Ages?

I'm now an hour late to reading time, so I plan to work on Guest's first paragraph tomorrow night.

Oh yea! The economic model of 18th and 19th century American capitalism is something we really need to go back to, Chinese slave labor building the rail road’s from free government land stolen from the native population which was being exterminated for mineral rights. Southern agricultural communities thriving on the sweat of 400 years of slave labor. The complete absence of a middle class. Sign me up.

Greg, Our society has thankfully advanced beyond the capabilities that a purely market driven libertarian government can or will provide. If it’s one thing that we should have learned last year that greed will always undermine the market. Even Greenspan figured that out.

The markets and Banks didn’t collapse because of too much government interference but because there was not enough government oversight.

My grandparents and their parents lived through the beginnings of the industrial revolution and the picture they paint doesn’t sound anything like what you describe. A little less Gatsby and more Steinbeck .

Uh...Tom, the beginning of the industrial revolution was in the late 18th century. Probably a bit far back for your grand/greatgrandparents. And what exactly is the picture you think I'm describing? I'm certainly not suggesting that those days were utopian, but they got us from bare subsistence to where we are now.

Based on my readings of US monetary history over the summer, banks collapsed because they were allowed to engage in fractional reserve banking (precedent set in the government sanctioned suspension of specie payments after the War of 1812). If fractional reserve banking were treated as the form of fraud that it is, we might actually still have sound money today. So, the collapses happened because of government sanction of irresponsibility (which we see in Fannie and Freddie today).

I have to go out in about 15 minutes, so I'm going to respond to Guest, then Tom's 1st two paragraphs later.

As far as Guest's first paragraph goes, if your neighbor is making your property that unuseable, you can dispute that he is violating your private property rights. If the lagoon prevents you from functioning and making use of your property, that might be a legitimate complaint (as opposed to complaining about a few dog piles in the neighbor's yard). Really, I think stuff like that has to be sorted out on a case by case basis. What prompts you to ask about something like that simply because I point out the political obstacles to a free market economy?

I'll leave this page up and add some more comments this afternoon.

And to elaborate on Guest's first paragraph, libertarianism assumes a society of all adults. I, for one, am amenable to making some exceptions on the case of kids.

Back to Tom's 1st two paragraphs, I won't claim to be well versed in the Chinese laborer situation, but I'm not saying that that was okay. Same for the natives and southern slave labor. Forcing people to do things against their will is not libertarian.

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Greg, Our society has thankfully advanced beyond the capabilities that a purely market driven libertarian government can or will provide.
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Market driven government? Government isn't driven by markets, it's driven by taxation. That's why government often doesn't feel the pain of recession - they take their revenue by force, whether business has had a good year or not; it does not make revenue by consumers deciding that their product is good.

Take for example, the liberal desire to raise taxes to make up budget shortfalls instead of making government get by on what it has now...you know, like everyone else in America is forced to do (minus entities that politicians are friends with - they get bailout money instead).

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If it’s one thing that we should have learned last year that greed will always undermine the market. Even Greenspan figured that out.
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Again, if we had a sound money system that didn't permit fractional reserve banking, that situation would have been a non-issue. The fact that we allow artificial expansion of the money and credit supply is what causes these bubbles through mal-investment. The said expansion makes a lot of ventures look profitable when they normally wouldn't. So, people invest in them thinking they can make a profit...until credit expansion stops and the bubble bursts. Then when trying to build six houses, investors realize they only have enough to build five, and have to liquidate a bunch of assets to make up for their miscalculation.

Now, when the bubble did burst last year, the government should have just let the companies fail instead of being duped into the fallacy that the sky would fall if those companies went bankrupt (remember how I originally described politicians being duped by economic fallacy).

Instead, we embraced the socialist solution of bailing out bad companies. Morally egregious because we take money from honest taxpayers and give it to people who didn't take care of their own finances. Economically egregious because we took capital from hands that would have managed it more efficiently (in the eyes of consumers), and placed it in hands that use capital less efficiently. The result: goods and services are not produced as efficiently as they would in a truly free market, meaning there is less to go around, meaning that the people are poorer than they otherwise would be. The bailouts and similar behavior by our politicians have needlessly compromised America's (probably the whole world's) standard of living. But to recap, if we had sound, commodity based currency this wouldn't be such a problem.

And if we continue with our current fiat money policy and federal spending that continues to abuse the crap out of our dollar, we won't have a middle class anymore after a while (Tom seemed concerned about the absence of middle classes in society earlier).

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"So what you are saying is that there should be no rules. The only scorecard is profit. In a way, the worlds best example of this is the drug cartels. While I thought the video was funny you actually agree that that is a better form of economics than what we have here."
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I think I'd like to go back and address previous posts more thoroughly.

First sentence of repeated sample (between ***) was covered in my second post after Tom's 1st (***limited*** gov't one).

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"The only scorecard is profit."
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For the second sentence, profit is the only ***economic*** scorecard. The political corollary of this is the profit motive of "votes" instead of "dollars".

When politicians control the economy, they shamelessly vie for their own form of profits, votes. Unfortunately for the people they govern, this means that profit decisions are not made with economic sustainability in mind.

BTW, I can explain how profits are vital to helping consumers get what they want/need from the economy if anyone wants me to explain.

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"In a way, the worlds best example of this is the drug cartels."
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For the 3rd sentence, correct me if I'm wrong, but I believe drug cartels protect their marketshare by force. In a libertarian society, any one individual is barred from forcing his will on others. He cannot force others to buy his products, or aggress against his competitors. Huge, huge difference between the two, Tom.

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"While I thought the video was funny you actually agree that that is a better form of economics than what we have here."
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Addressed by my 2nd post after Tom's 1st.

Oh, and there's this great libertarian move that could be used to wipe out the drug cartels' power in America...

End the drug war. Legalize drugs.

Taking away a dealer's risk premium will cut down on his profits, so fewer resources will go into production of the drugs. Ties back into the function of prices and profits in a market economy in general. Again, I'd be happy to elaborate for anyone who doesn't know what I'm talking about.