4 ms·

Who then defines what is fraud? If I can't stop transaction of two other people based on what I think is fraud, who can ever? And if you are telling me that I c

Who then defines what is fraud? If I can't stop transaction of two other people based on what I think is fraud, who can ever? And if you are telling me that I can't ever stop any transaction of two people, that actually poses extra risk for me, from serial fraudsters gaining too much power. Basically, you cannot model society as two-person interactions. That doesn't capture the power dynamic.

ArkyBeagle 11y ago
But is there really a power dynamic? At least with respect to markets, it's much harder to say that there is. The stories about monopolies of market power from the morgue of the Hearst newspapers ( and at varying times, all newspapers emulated the Hearst newspapers ) are mostly just-so stories. And then there are true stories, like Edison using patent law and legbreakers to dominate the film industry.
- asgard1024 11y ago
  Well, if you only consider interactions of two people, you have already decided to ignore power dynamic in your model. Just consider the simplest case of how it can happen that someone has power over someone else despite having same real strength. Person A comes to person B and says: "If you don't do what I say, I will have me and person C to beat you up." Since B doesn't know C, he would better comply. Then person A comes to person C and says: "If you don't do what I say, I will have me and person B to beat you up." C doesn't know B either, so he has to comply. Now A has (some small amount of) power over B and C. This power could be easily broken if B and C would meet and talked about A's bluff (this is actually the price A pays in higher risk of B and C finding out). Now you may observe in the example that neither interaction was about just two parties; every interaction was about all three parties. So to be able to discuss power, you need to have interactions that involve at least three parties, and also some information hiding. (In fact, as an aside, I believe that for any n there exist n-person games that cannot be accurately modeled via any series of (n-1)-person games, and the above is just example for n=3.) > The stories about monopolies of market power from the morgue of the Hearst newspapers Not sure what you refer to here, but I will say this: I consider the idea of free market to be some set of rules of how people conduct business. These rules then can lead to (moral) failures, such as accumulation of wealth and power. This can be seen not only in the real world, but also by putting those rules into a computer and running a simulation. Many people apparently don't agree with this approach. If I point to a market failure, such as monopoly, they will say "but this is not really a free market". Well, with such a definition of free market, you deliberately didn't allow for failure. But unfortunately, this approach doesn't give you rules that you can just apply and get whatever you call the free market.
  - ArkyBeagle 11y ago
    Beating people up isn't market activity - it's at least borderline criminal. Every 14 year old Libertarian will bleat "but that's force" and they'd be right :) I agree wholeheartedly - you can't get two, much less three people to agree on market failures. My bias is that they simply don't happen or only happen very rarely , that wealth and power are almost completely illusory and conflate status and money to an embarrassing degree. I think that some people like stories about oppression ( I used to be one of those people ) and that this explains much of how it is that people disagree about this. A good way to challenge this belief is to read "Chief", a bio of Hearst by David Nasaw. This is why I refer to the Hearst morgue as feedstock for history - it's a lot bunk in that role, but every single person who reads history in what americans call high school gets it full in the face, and it takes some doing to get past it.
    - asgard1024 11y ago
      > Beating people up isn't market activity - it's at least borderline criminal. The beauty of the example is that you don't have to beat people up. What is only needed is A to risk more than B and C. The point was though you cannot prevent this kind of activity taking place on the market (it can actually be reformulated through money and investment, existence of which also requires 3 parties). So by using 2-party model only, you are missing a good chunk of reality here. > My bias is that they simply don't happen or only happen very rarely , that wealth and power are almost completely illusory I guess we can agree we live in a different reality, then :-)
  - mariodiana 11y ago
    When you bring up the idea of monopoly, you're failing to distinguish between coercive monopolies and market monopolies. A coercive monopoly is when government protects the monopolist by giving it favored legal status. That's not a market failure, but a political one. A market monopoly is when, absent any government intrusion, one producer manages to do a job so efficiently that it doesn't pay anyone else to compete. That's not a market failure either. Competition still exists even without actual competitors, since the potential for competitors to enter the market is ever present, should the monopolist abuse the consumer.
mariodiana 11y ago
When people engage in a commercial transaction, there is a contract, either explicit or implied. The concept of fraud stems from the idea of broken contracts. Anything other than that is caveat emptor. You're not the person who replied to me about "health" and "happiness," but I'm guessing that even though you'll cry "Who then defines what is fraud?" you have no trouble deciding that "Society" should define health and happiness—yes? Better that we stick to more concrete and prosaic ideas like contract.

ArkyBeagle 11y ago

But is there really a power dynamic? At least with respect to markets, it's much harder to say that there is. The stories about monopolies of market power from the morgue of the Hearst newspapers ( and at varying times, all newspapers emulated the Hearst newspapers ) are mostly just-so stories. And then there are true stories, like Edison using patent law and legbreakers to dominate the film industry.

asgard1024 11y ago
Well, if you only consider interactions of two people, you have already decided to ignore power dynamic in your model. Just consider the simplest case of how it can happen that someone has power over someone else despite having same real strength. Person A comes to person B and says: "If you don't do what I say, I will have me and person C to beat you up." Since B doesn't know C, he would better comply. Then person A comes to person C and says: "If you don't do what I say, I will have me and person B to beat you up." C doesn't know B either, so he has to comply. Now A has (some small amount of) power over B and C. This power could be easily broken if B and C would meet and talked about A's bluff (this is actually the price A pays in higher risk of B and C finding out). Now you may observe in the example that neither interaction was about just two parties; every interaction was about all three parties. So to be able to discuss power, you need to have interactions that involve at least three parties, and also some information hiding. (In fact, as an aside, I believe that for any n there exist n-person games that cannot be accurately modeled via any series of (n-1)-person games, and the above is just example for n=3.) > The stories about monopolies of market power from the morgue of the Hearst newspapers Not sure what you refer to here, but I will say this: I consider the idea of free market to be some set of rules of how people conduct business. These rules then can lead to (moral) failures, such as accumulation of wealth and power. This can be seen not only in the real world, but also by putting those rules into a computer and running a simulation. Many people apparently don't agree with this approach. If I point to a market failure, such as monopoly, they will say "but this is not really a free market". Well, with such a definition of free market, you deliberately didn't allow for failure. But unfortunately, this approach doesn't give you rules that you can just apply and get whatever you call the free market.
- ArkyBeagle 11y ago
  Beating people up isn't market activity - it's at least borderline criminal. Every 14 year old Libertarian will bleat "but that's force" and they'd be right :) I agree wholeheartedly - you can't get two, much less three people to agree on market failures. My bias is that they simply don't happen or only happen very rarely , that wealth and power are almost completely illusory and conflate status and money to an embarrassing degree. I think that some people like stories about oppression ( I used to be one of those people ) and that this explains much of how it is that people disagree about this. A good way to challenge this belief is to read "Chief", a bio of Hearst by David Nasaw. This is why I refer to the Hearst morgue as feedstock for history - it's a lot bunk in that role, but every single person who reads history in what americans call high school gets it full in the face, and it takes some doing to get past it.
  - asgard1024 11y ago
    > Beating people up isn't market activity - it's at least borderline criminal. The beauty of the example is that you don't have to beat people up. What is only needed is A to risk more than B and C. The point was though you cannot prevent this kind of activity taking place on the market (it can actually be reformulated through money and investment, existence of which also requires 3 parties). So by using 2-party model only, you are missing a good chunk of reality here. > My bias is that they simply don't happen or only happen very rarely , that wealth and power are almost completely illusory I guess we can agree we live in a different reality, then :-)
- mariodiana 11y ago
  When you bring up the idea of monopoly, you're failing to distinguish between coercive monopolies and market monopolies. A coercive monopoly is when government protects the monopolist by giving it favored legal status. That's not a market failure, but a political one. A market monopoly is when, absent any government intrusion, one producer manages to do a job so efficiently that it doesn't pay anyone else to compete. That's not a market failure either. Competition still exists even without actual competitors, since the potential for competitors to enter the market is ever present, should the monopolist abuse the consumer.

mariodiana 11y ago

When people engage in a commercial transaction, there is a contract, either explicit or implied. The concept of fraud stems from the idea of broken contracts. Anything other than that is caveat emptor. You're not the person who replied to me about "health" and "happiness," but I'm guessing that even though you'll cry "Who then defines what is fraud?" you have no trouble deciding that "Society" should define health and happiness—yes? Better that we stick to more concrete and prosaic ideas like contract.