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> I think that the information derived from what people say with money is more accurate than what they say verbally. OK. But I still don't understand the point

> I think that the information derived from what people say with money is more accurate than what they say verbally. OK. But I still don't understand the point you're trying to make. But even if markets were more honest, it is still not good enough argument to have them. War may also make people more honest but it's not a reason to have it either. > People who try to lie in markets don't do well. I wish it would be true. You probably come from the U.S., which has an extremely strong culture of fairness (although it slowly weakens), expressed in its justice system. But in other nations, this culture is not strong. The problem is that markets cannot really punish anybody; once you successfully cheated, you get more money. If you have been found out, you at most lose a little bit of investment (and a mark, but those are dime a dozen). You can generally start another company with different name and continue with dishonesty. In other words, I don't consider losing a good job or opportunity to be a punishment; it's just a bad luck. > How many Bernie Madoff stories are there? Not many. In Czechoslovakia, shortly after the Velvet Revolution, there were many. The justice system didn't understand the new economic system and wasn't capable to deal with cheaters. Our prime minister, Vaclav Klaus, had the opinion - free markets are of primary importance and the justice system is secondary. What happened during the era (before we passed enough laws to be compatible with EU) was just huge "gold rush" of embezzlement.

ArkyBeagle 11y ago
The basic point is that the vast majority of our brains are automatic and that our conscious part is a slim sliver up front. Mostly, the frontbrain makes up stories to rationalize what really happened, and this is error-prone. “To see what is in front of one’s nose needs a constant struggle.” George Orwell Your last paragraph is interesting. But did that persist, or was it just "switching cost"? Yes, I am from the US and everybody wants to be like us don't they :) It may be that transparency and "fairness" are public goods with low costs of defecting in the prisoner's dilemma of them.
- asgard1024 11y ago
  > But did that persist, or was it just "switching cost"? Opinion differs, but I think thanks to EU we were forced to accept a reasonable legal prevention to most egregious acts of economic crime. If that didn't happen, we would look.. probably kinda like Russia. In a sense it persisted because the people who got rich during the "gold rush" (usually through botched "privatization" of former state enterprises, but also through various scams) of course didn't lost their wealth. Anyway, the point is, free market left to its own devices is not very pretty; I have seen that as a teenager. Arguably, Americans should remember that lesson from late 19th century.
eli_gottlieb 11y ago
>In Czechoslovakia, shortly after the Velvet Revolution, there were many. The justice system didn't understand the new economic system and wasn't capable to deal with cheaters. Our prime minister, Vaclav Klaus, had the opinion - free markets are of primary importance and the justice system is secondary. What happened during the era (before we passed enough laws to be compatible with EU) was just huge "gold rush" of embezzlement. That's quite interesting, considering the economics literature says that the strength and consistency of the law is a crucial component of making a market economy successful, often more so than the mere number of firms in the marketplace!
- asgard1024 11y ago
  > considering the economics literature says that the strength and consistency of the law is a crucial component of making a market economy successful Unfortunately, in large parts of Eastern Europe, this advice was ignored. In reality, the main right wing (or pro-market) parties fought tooth and nail against any sort of regulation (to be fair there were couple individuals who were exceptions). And to this day, pro-market supporters vote for some of these, so it's not like they are too unhappy about it. It's much like the difference between communist rhetoric and practice.

ArkyBeagle 11y ago

The basic point is that the vast majority of our brains are automatic and that our conscious part is a slim sliver up front. Mostly, the frontbrain makes up stories to rationalize what really happened, and this is error-prone. “To see what is in front of one’s nose needs a constant struggle.” George Orwell Your last paragraph is interesting. But did that persist, or was it just "switching cost"? Yes, I am from the US and everybody wants to be like us don't they :) It may be that transparency and "fairness" are public goods with low costs of defecting in the prisoner's dilemma of them.

asgard1024 11y ago
> But did that persist, or was it just "switching cost"? Opinion differs, but I think thanks to EU we were forced to accept a reasonable legal prevention to most egregious acts of economic crime. If that didn't happen, we would look.. probably kinda like Russia. In a sense it persisted because the people who got rich during the "gold rush" (usually through botched "privatization" of former state enterprises, but also through various scams) of course didn't lost their wealth. Anyway, the point is, free market left to its own devices is not very pretty; I have seen that as a teenager. Arguably, Americans should remember that lesson from late 19th century.

eli_gottlieb 11y ago

>In Czechoslovakia, shortly after the Velvet Revolution, there were many. The justice system didn't understand the new economic system and wasn't capable to deal with cheaters. Our prime minister, Vaclav Klaus, had the opinion - free markets are of primary importance and the justice system is secondary. What happened during the era (before we passed enough laws to be compatible with EU) was just huge "gold rush" of embezzlement. That's quite interesting, considering the economics literature says that the strength and consistency of the law is a crucial component of making a market economy successful, often more so than the mere number of firms in the marketplace!

asgard1024 11y ago
> considering the economics literature says that the strength and consistency of the law is a crucial component of making a market economy successful Unfortunately, in large parts of Eastern Europe, this advice was ignored. In reality, the main right wing (or pro-market) parties fought tooth and nail against any sort of regulation (to be fair there were couple individuals who were exceptions). And to this day, pro-market supporters vote for some of these, so it's not like they are too unhappy about it. It's much like the difference between communist rhetoric and practice.