7 ms·

What do the libertarians say about this theft? While I understand the idea of the free market, I don't see how that would have protected the consumer in this c

by adekok 10y ago

What do the libertarians say about this theft? While I understand the idea of the free market, I don't see how that would have protected the consumer in this case. The CEO has millions of times the power of the average consumer, and can harness thousands of people to his agenda. The consumer is left to either (a) pay the "idiot" tax of being stupid enough to sign up for a thieving bank, or (b) rely on the government to protect his best interests. While I have severe misgivings about the efficiency and corruption of large government, I find it hard to argue that a perfect "free market" would be better for the consumer.

muninn_ 10y ago
If you live in the West you live in a free market right now. Asking the "libertarians" what they would do about this incident in the "free market" is a deceptive thing to say. Not only does it ignore the fact that we live in a free market, it unjustly pins the failings of the system we live in on a philosophy which has a wide array of different nuances and subgroups. Libertarians range from anarcho-capitalists, to socialist libertarians, to anarcho-communists. Additionally, a "perfect free market" does not exist and never could. Nor could a "perfect government". If you want to be angry, look at how the government is failing you now. If you want to say that the "non-free market" you're living in is better, well, what happened here? The CEO just gets to retire and they have to pay a measly fine. Oh and before anybody says "we don't live in a true free market", until we live under absolutely no system of government, nobody civilization has really ever lived under what is technically a free market. If you pay taxes or tribute or respect some sort of authority you live in a government and it is acting upon the market. I find that to be a useless definition.
- hobs 10y ago
  >If you live in the West you live in a free market right now. > nobody (in) civilization has really ever lived under what is technically a free market. So, we do or we don't?
  - muninn_ 10y ago
    You do live in a free market. You don't live in a free market by a definition including no interference from government. But that's a dumb and useless definition so it's tossed out here.
    - BirdieNZ 10y ago
      "A free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority." Most, if not all Western countries are not free markets. They are often partially free, but definitely not completely free. And there are very few countries in the world right now, if any, which have a free market. So no, he doesn't live in a free market.
      - muninn_ 10y ago
        The definition is too stringent to be useful, and I made note of the Wikipedia definition (because I knew people would google search "what is a free market" to look up the definition since they don't know it) and already gave at least a partial explanation as to why I disregard that aspect of the definition. It's a useless definition, it's like having a philosophical discussion with a solipist.
- jernfrost 10y ago
  The problem is that libertarians will use the ideal about free markets to oppose any sort of sane regulation or discussion about the limits of the market. I would say markets in the US are rigged in many obvious ways, due to the outsized influence of business in American elections and the political system. So much of business regulations in the US is written by people from the very same business and people who oversee the markets are often from the same industry they are supposed to regulate and go to fat jobs in the industry after they have done the bidding of the industry in the public sector. Whether it is Tesla, broadband, telecoms or utilities you see the established players effectively block new entrants with all their political connections. Just look at the ridiculous situation with patents, trademarks and copyrights. All of them have long outgrown their original intention and has been so amplified and extended that they can be used to very effectively kill all smaller competition and milk consumers dry. The argument that government is horrible has been used effectively again and again to make government horrible. Is has been stripped of cash to work effectively and become completely dependent on largess from the private enterprise to function. That attracts the most rotten people as politicians, thus ensuring that government never looks good. The last thing these people want is a well functioning government.
  - muninn_ 10y ago
    Pragmatically I'm not a libertarian, though I believe anarchism to be the most moral political philosophy. In practice I lean far left of most people. What I wanted to stop was this demonization of "the free market" and its wholesale "what would libertarians say nonsense" because it ignorantly ignores the nuances of the political philosophy and unfairly demonizes an economic system that is responsible for a lot of good things. The issue with patents, well, that's an example of the government failing. Not the market.
  - breatheoften 10y ago
    It's so true. I have been places where governments were more effective and efficient than in the us ... Worshipping the idea that "governments can never do anything right" seems to be a self-fulfilling proposition in a democracy ...
many_bells_down 10y ago
Businesses compete for consumers. Consumers prefer honest businesses. Businesses optimize for consumer preferences. Edit: The business considers this complex, multi-variable equation and tries to extract as much profit as possible. In many cases, the consumer is apathetic. Personally, I signed up for a Wells Fargo account last week despite being completely aware of this news. As a joke, I almost asked the guy if I _already_ had an account!
haser_au 10y ago
In a "perfect free market", customers have access to all of the information required to make the decision, and can make an informed choice on the products and services they buy and sell based on their circumstances. That wasn't the case in this situation. Customers didn't have all of the information, and as a result, were taken advantage of. In regards to the specific fraud component (signing up customers to services they didn't ask for), I think you've just seen the consequences of what happens. Share price tanks, CEO is forced to leave. Again, this comes down to access to information; when it became clear Wells Fargo were committing fraud, the market moved against it due to a reduction in good will/image/reputation. As a result of this information becoming public, fewer customers are likely to sign up to Wells Fargo, meaning the expected profits from this company are likely to be lower than expected previously. The government has a role to keep information available, so society can make a decision about what it deems acceptable corporate practice.
- venantius 10y ago
  Of course, basically all economic theory is predicated on the assumption that information is basically free and widely available. In reality, this is simply not the case - information is either not free, or it is time-consuming to acquire (and therefore not free in another sense). As soon as one understands this a lot of free market ideology stops making sense and things like Consumer Production Bureaus start to sound like an intelligent way of managing risk insurance for the general population.
  - conanbatt 10y ago
    Economic theory is not predicated on such a thing. Information asymmetry is a modeled and studied effect in economics. The efficient market hypothesis is a model that lets you explain certain phenomena that happen even if information is perfect, and though real life is not perfect, it has resemblances to such scenarios.
    - Clubber 10y ago
      It's based on assumptions as he described: "Economics has been subject to criticism that it relies on unrealistic, unverifiable, or highly simplified assumptions, in some cases because these assumptions simplify the proofs of desired conclusions. Examples of such assumptions include perfect information, profit maximization and rational choices." https://en.wikipedia.org/wiki/Economics https://en.wikipedia.org/wiki/Economics
DigitalJack 10y ago
I have libertarian tendencies, but I don't think the free market is the answer to all our woes. Free markets are for efficiency, laws are safety.
- ThrustVectoring 10y ago
  Yeah, you don't really want free markets - you want well-designed markets. It just happens that some of the easiest ways to wind up with a poorly designed or implemented market is by doing the things that the free-market folks rail against. For example, making the regulations for interacting with a market so onerous that participants can't engage in the amount of market behavior that they need to fill their needs. On the other hand, a lack of enforcement against fraud and deception can also ruin a market. For a good example of this, American consumers do not have to check for counterfeit rice, while Chinese consumers do.
Meekro 10y ago
I can't speak for all libertarians, but I consider myself a libertarian and I can make some observations about this whole situation.. 1. Those customers who were stolen from will get to participate in the mother of all class-action lawsuits. The settlement will be outlandish. Juries hate huge corporations that screw the little guy, and the lawyers on both sides know it. If you don't trust the class action to provide you with an equitable settlement, you can opt out and sue them individually. No doubt many lawyers are already lining up for the easy money here. I've never known a libertarian who opposes the existence of a legal system. 2. So far, no one has produced evidence that the CEO knew about this or allowed it to happen. Putting him in prison would therefore be unjust. The article claimed that his sales quotas were excessive, but the only source for that is the same employees who knowingly defrauded their employer. Relying on their honesty seems like a bad idea. What we know for sure is that he had sales targets for his salesmen, which is not unethical or unusual. We also know that the vast majority of Wells Fargo salesmen did not resort to fraud to hit those targets. Even if the sales targets were high, the employees should either step up to the challenge, request a transfer out of sales, or resign. There are no excuses for defrauding your employer, and claiming "my job was too hard, so I lied!" is cause for termination.
- pktgen 10y ago
  > 1. Those customers who were stolen from will get to participate in the mother of all class-action lawsuits. The settlement will be outlandish. Juries hate huge corporations that screw the little guy, and the lawyers on both sides know it. Nope, since they have a mandatory binding arbitration clause. See http://www.nytimes.com/2016/11/24/business/wells-fargo-asks-court-to-force-customers-to-arbitration-in-fake-accounts-cases.html?_r=0 http://www.nytimes.com/2016/11/24/business/wells-fargo-asks-....
  - shawnee_ 10y ago
    "mandatory binding arbitration clause" Wells Fargo hay have put an arbitration clause somewhere buried in their fine print; however, "binding" is what would be questioned by the courts. Probably pretty easy to refute its bind-ability, given that WF has negated and demonstrated incompetence on its side of the contract duty: safeguarding the consumer's info. (Binding contracts require competent parties on both sides). http://www.nytimes.com/2015/11/01/business/dealbook/arbitration-everywhere-stacking-the-deck-of-justice.html http://www.nytimes.com/2015/11/01/business/dealbook/arbitrat...
rz2k 10y ago
It's common for purist libertarians to believe that contracts are very important, and their enforcement to be one of the main duties of the state. I don't think that adequately handles situations where the CEO creates an environment where the emergent behavior of low level employees is to create fake accounts, but it would possibly address the liability of the financial of the victims.
apeace 10y ago
Most libertarians agree that fraud should be illegal, and that customers should be able to press criminal and civil charges if fraud is perpetrated against them. In this case, the bank charged customers for services they never requested. That is fraud. It has nothing to do with "free markets" as defined by libertarians. If you find some libertarian scholarship, you will also notice that libertarians see contract enforcement as a vital role of government. This would also be a breach of contract. Libertarian != Anarchist :)
- holograham 10y ago
  +1 for this. Libertarians are not against laws. In fact contract enforcement is arguably the most important law.
- jessaustin 10y ago
  Libertarian != Anarchist This "faith in the law" is libertarianism's biggest weakness, and the reason why the older I've gotten, the more appealing anarchism has become. The ways we see the law working in this case, are just the ways that law actually works. Screw the little guy and protect the big man? A feature, not a bug! The reasonable way to oppose unfairness is to actually oppose unfairness, not to imagine that some contingent and evolved phenomenon called "law" is going to magically give us what we want. If utopia comes and police are devoted only to the enforcement of contract, those entrusted with interpreting contracts will be our rulers. Those in power, will exercise power. This recursion can't be defined out of existence.
  - apeace 10y ago
    Agreed, and I appreciate the comment. I've developed the same appreciation for anarchism. But the original comment I responded to seemed to imply that the libertarian theory would allow this "free market" behavior, which is not the way libertarians see it.
hatmatrix 10y ago
It isn't a truly free market if there is information asymmetry between consumer and corporation. Therefore, government intervention should be considered acceptable to even things out.
- dnautics 10y ago
  there are is never not information asymmetry, so this philosophy would become an excuse to make government intervention in all cases. The next conundrum is how to define 'evening things out', and if you can't imagine that power being misused, you have either a poor imagination or very little knowledge of history.

by adekok 10y ago

muninn_ 10y ago

If you live in the West you live in a free market right now. Asking the "libertarians" what they would do about this incident in the "free market" is a deceptive thing to say. Not only does it ignore the fact that we live in a free market, it unjustly pins the failings of the system we live in on a philosophy which has a wide array of different nuances and subgroups. Libertarians range from anarcho-capitalists, to socialist libertarians, to anarcho-communists. Additionally, a "perfect free market" does not exist and never could. Nor could a "perfect government". If you want to be angry, look at how the government is failing you now. If you want to say that the "non-free market" you're living in is better, well, what happened here? The CEO just gets to retire and they have to pay a measly fine. Oh and before anybody says "we don't live in a true free market", until we live under absolutely no system of government, nobody civilization has really ever lived under what is technically a free market. If you pay taxes or tribute or respect some sort of authority you live in a government and it is acting upon the market. I find that to be a useless definition.

hobs 10y ago
>If you live in the West you live in a free market right now. > nobody (in) civilization has really ever lived under what is technically a free market. So, we do or we don't?
- muninn_ 10y ago
  You do live in a free market. You don't live in a free market by a definition including no interference from government. But that's a dumb and useless definition so it's tossed out here.
  - BirdieNZ 10y ago
    "A free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority." Most, if not all Western countries are not free markets. They are often partially free, but definitely not completely free. And there are very few countries in the world right now, if any, which have a free market. So no, he doesn't live in a free market.
    - muninn_ 10y ago
      The definition is too stringent to be useful, and I made note of the Wikipedia definition (because I knew people would google search "what is a free market" to look up the definition since they don't know it) and already gave at least a partial explanation as to why I disregard that aspect of the definition. It's a useless definition, it's like having a philosophical discussion with a solipist.
jernfrost 10y ago
The problem is that libertarians will use the ideal about free markets to oppose any sort of sane regulation or discussion about the limits of the market. I would say markets in the US are rigged in many obvious ways, due to the outsized influence of business in American elections and the political system. So much of business regulations in the US is written by people from the very same business and people who oversee the markets are often from the same industry they are supposed to regulate and go to fat jobs in the industry after they have done the bidding of the industry in the public sector. Whether it is Tesla, broadband, telecoms or utilities you see the established players effectively block new entrants with all their political connections. Just look at the ridiculous situation with patents, trademarks and copyrights. All of them have long outgrown their original intention and has been so amplified and extended that they can be used to very effectively kill all smaller competition and milk consumers dry. The argument that government is horrible has been used effectively again and again to make government horrible. Is has been stripped of cash to work effectively and become completely dependent on largess from the private enterprise to function. That attracts the most rotten people as politicians, thus ensuring that government never looks good. The last thing these people want is a well functioning government.
- muninn_ 10y ago
  Pragmatically I'm not a libertarian, though I believe anarchism to be the most moral political philosophy. In practice I lean far left of most people. What I wanted to stop was this demonization of "the free market" and its wholesale "what would libertarians say nonsense" because it ignorantly ignores the nuances of the political philosophy and unfairly demonizes an economic system that is responsible for a lot of good things. The issue with patents, well, that's an example of the government failing. Not the market.
- breatheoften 10y ago
  It's so true. I have been places where governments were more effective and efficient than in the us ... Worshipping the idea that "governments can never do anything right" seems to be a self-fulfilling proposition in a democracy ...

many_bells_down 10y ago

Businesses compete for consumers. Consumers prefer honest businesses. Businesses optimize for consumer preferences. Edit: The business considers this complex, multi-variable equation and tries to extract as much profit as possible. In many cases, the consumer is apathetic. Personally, I signed up for a Wells Fargo account last week despite being completely aware of this news. As a joke, I almost asked the guy if I _already_ had an account!

haser_au 10y ago

In a "perfect free market", customers have access to all of the information required to make the decision, and can make an informed choice on the products and services they buy and sell based on their circumstances. That wasn't the case in this situation. Customers didn't have all of the information, and as a result, were taken advantage of. In regards to the specific fraud component (signing up customers to services they didn't ask for), I think you've just seen the consequences of what happens. Share price tanks, CEO is forced to leave. Again, this comes down to access to information; when it became clear Wells Fargo were committing fraud, the market moved against it due to a reduction in good will/image/reputation. As a result of this information becoming public, fewer customers are likely to sign up to Wells Fargo, meaning the expected profits from this company are likely to be lower than expected previously. The government has a role to keep information available, so society can make a decision about what it deems acceptable corporate practice.

venantius 10y ago
Of course, basically all economic theory is predicated on the assumption that information is basically free and widely available. In reality, this is simply not the case - information is either not free, or it is time-consuming to acquire (and therefore not free in another sense). As soon as one understands this a lot of free market ideology stops making sense and things like Consumer Production Bureaus start to sound like an intelligent way of managing risk insurance for the general population.
- conanbatt 10y ago
  Economic theory is not predicated on such a thing. Information asymmetry is a modeled and studied effect in economics. The efficient market hypothesis is a model that lets you explain certain phenomena that happen even if information is perfect, and though real life is not perfect, it has resemblances to such scenarios.
  - Clubber 10y ago
    It's based on assumptions as he described: "Economics has been subject to criticism that it relies on unrealistic, unverifiable, or highly simplified assumptions, in some cases because these assumptions simplify the proofs of desired conclusions. Examples of such assumptions include perfect information, profit maximization and rational choices." https://en.wikipedia.org/wiki/Economics https://en.wikipedia.org/wiki/Economics

DigitalJack 10y ago

I have libertarian tendencies, but I don't think the free market is the answer to all our woes. Free markets are for efficiency, laws are safety.

ThrustVectoring 10y ago
Yeah, you don't really want free markets - you want well-designed markets. It just happens that some of the easiest ways to wind up with a poorly designed or implemented market is by doing the things that the free-market folks rail against. For example, making the regulations for interacting with a market so onerous that participants can't engage in the amount of market behavior that they need to fill their needs. On the other hand, a lack of enforcement against fraud and deception can also ruin a market. For a good example of this, American consumers do not have to check for counterfeit rice, while Chinese consumers do.

Meekro 10y ago

I can't speak for all libertarians, but I consider myself a libertarian and I can make some observations about this whole situation.. 1. Those customers who were stolen from will get to participate in the mother of all class-action lawsuits. The settlement will be outlandish. Juries hate huge corporations that screw the little guy, and the lawyers on both sides know it. If you don't trust the class action to provide you with an equitable settlement, you can opt out and sue them individually. No doubt many lawyers are already lining up for the easy money here. I've never known a libertarian who opposes the existence of a legal system. 2. So far, no one has produced evidence that the CEO knew about this or allowed it to happen. Putting him in prison would therefore be unjust. The article claimed that his sales quotas were excessive, but the only source for that is the same employees who knowingly defrauded their employer. Relying on their honesty seems like a bad idea. What we know for sure is that he had sales targets for his salesmen, which is not unethical or unusual. We also know that the vast majority of Wells Fargo salesmen did not resort to fraud to hit those targets. Even if the sales targets were high, the employees should either step up to the challenge, request a transfer out of sales, or resign. There are no excuses for defrauding your employer, and claiming "my job was too hard, so I lied!" is cause for termination.

pktgen 10y ago
> 1. Those customers who were stolen from will get to participate in the mother of all class-action lawsuits. The settlement will be outlandish. Juries hate huge corporations that screw the little guy, and the lawyers on both sides know it. Nope, since they have a mandatory binding arbitration clause. See http://www.nytimes.com/2016/11/24/business/wells-fargo-asks-court-to-force-customers-to-arbitration-in-fake-accounts-cases.html?_r=0 http://www.nytimes.com/2016/11/24/business/wells-fargo-asks-....
- shawnee_ 10y ago
  "mandatory binding arbitration clause" Wells Fargo hay have put an arbitration clause somewhere buried in their fine print; however, "binding" is what would be questioned by the courts. Probably pretty easy to refute its bind-ability, given that WF has negated and demonstrated incompetence on its side of the contract duty: safeguarding the consumer's info. (Binding contracts require competent parties on both sides). http://www.nytimes.com/2015/11/01/business/dealbook/arbitration-everywhere-stacking-the-deck-of-justice.html http://www.nytimes.com/2015/11/01/business/dealbook/arbitrat...

rz2k 10y ago

It's common for purist libertarians to believe that contracts are very important, and their enforcement to be one of the main duties of the state. I don't think that adequately handles situations where the CEO creates an environment where the emergent behavior of low level employees is to create fake accounts, but it would possibly address the liability of the financial of the victims.

apeace 10y ago

Most libertarians agree that fraud should be illegal, and that customers should be able to press criminal and civil charges if fraud is perpetrated against them. In this case, the bank charged customers for services they never requested. That is fraud. It has nothing to do with "free markets" as defined by libertarians. If you find some libertarian scholarship, you will also notice that libertarians see contract enforcement as a vital role of government. This would also be a breach of contract. Libertarian != Anarchist :)

holograham 10y ago
+1 for this. Libertarians are not against laws. In fact contract enforcement is arguably the most important law.
jessaustin 10y ago
Libertarian != Anarchist This "faith in the law" is libertarianism's biggest weakness, and the reason why the older I've gotten, the more appealing anarchism has become. The ways we see the law working in this case, are just the ways that law actually works. Screw the little guy and protect the big man? A feature, not a bug! The reasonable way to oppose unfairness is to actually oppose unfairness, not to imagine that some contingent and evolved phenomenon called "law" is going to magically give us what we want. If utopia comes and police are devoted only to the enforcement of contract, those entrusted with interpreting contracts will be our rulers. Those in power, will exercise power. This recursion can't be defined out of existence.
- apeace 10y ago
  Agreed, and I appreciate the comment. I've developed the same appreciation for anarchism. But the original comment I responded to seemed to imply that the libertarian theory would allow this "free market" behavior, which is not the way libertarians see it.

hatmatrix 10y ago

It isn't a truly free market if there is information asymmetry between consumer and corporation. Therefore, government intervention should be considered acceptable to even things out.

dnautics 10y ago
there are is never not information asymmetry, so this philosophy would become an excuse to make government intervention in all cases. The next conundrum is how to define 'evening things out', and if you can't imagine that power being misused, you have either a poor imagination or very little knowledge of history.