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The beauty about free market economics is, it doesn't depend on people's niceness to maximize productivity, capital utilization and consequently the aggregate s

The beauty about free market economics is, it doesn't depend on people's niceness to maximize productivity, capital utilization and consequently the aggregate standard of living of a country. Supply and demand, and pursueing self interest will achieve all of this in the aggregate despite any localized exceptions.

charlesism 9y ago
> The beauty about free market economics is, [etc] So Economics is a science after all!
sgift 9y ago
That's the believe. The proof in the real world is quite lacking.
- wallace_f 9y ago
  There is a lot of proof markets do work very well when you get close to perfect (and I'd add, fair) competition. Outside of that, things begin to break down quickly.
  - sgift 9y ago
    Hence the part about "real world" - yes, mathematically you can proof all this and it all looks nice and tidy, but all experience tells us that it doesn't work that way outside the lab. "The system is perfect, the people are the problem."
    - wallace_f 9y ago
      But there are a lot of markets where it does get close enough that the assumptions are useful in modelling the world. Agricultural products, food and beverage industry, market for unskilled labourers, etc. And in cases where there isn't perfect competition, many times good regulation can remedy the problems very effectively. I am very critical of many of the kinds of groupthink that exists in economics, but the idea that markets can work well is really not such a bad idea, especially when you compare it to the alternatives.
      - sgift 9y ago
        > And in cases where there isn't perfect competition, many times good regulation can remedy the problems very effectively. Then we agree, but that is the big point I see in this discussions "regulations are always bad, regulations destroy markets" and so on. Regulated markets are a useful tool. And like all tools they can be misused or overused.
mvc 9y ago
All those good things like maximizing productivity, capital utilization etc are theory based on markets with perfect competition. How many "free markets" satisfy all the assumptions made about perfect competition? https://en.wikipedia.org/wiki/Perfect_competition https://en.wikipedia.org/wiki/Perfect_competition
- wallace_f 9y ago
  Yea, exactly. But with effective regulation, we can get closer to perfect competition, or at least remedy the market failures that are inevitable. To go on a bit of a rant--ufortunately it appears the trend is going the other way with Big Gov allied with Big Business, out of control banking empires and MIC, made possible by never-ending low interest rates and easy money policies from the Fed that mask it all. Don't belive me? Real cost of living has increased to where 2 incomes are required for many to just keep their heads above water to afford what their parents had, despite more education and working longer hours. We have never ending wars, 26,000 bombs dropped last year, and the longest war in history and it was never even approved by congress. Our most popular media outlets tell us we need this so we have jobs[1]. 1-https://theintercept.com/2016/09/09/wolf-blitzer-is-worried-defense-contractors-will-lose-jobs-if-u-s-stops-arming-saudi-arabia/ https://theintercept.com/2016/09/09/wolf-blitzer-is-worried-...
bluetomcat 9y ago
The inconvenient truth is, gaining capital means gaining power. That power is exercised by taking specific decisions from the relatively small management board of a company and these decisions can have far-reaching effects not only on the company itself, but on society as a whole. We believe voting is essential to run a democracy, yet the management of companies is far from being democratic.
dvfjsdhgfv 9y ago
Unless you're powerful enough to make choices against the will of others. There is an interesting series of wikileaks from European embassies showing American pressure on wide acceptance of GMO. It seems a lot of money and effort went into this. See for example this one: https://wikileaks.org/plusd/cables/06WARSAW107_a.html https://wikileaks.org/plusd/cables/06WARSAW107_a.html > 8. (U) Spirnak's second lecture took place at the American Studies Center at Warsaw University. Approximately 20 students and faculty attended the lecture. Again, the students did not openly object to the idea of consuming GMO's but did reflect the typical European mistrust surrounding the issue. They asked about the purpose of altering the genetic structure of food, in what is essentially a "if it's not broken don't fix it" argument that is commonly made in Poland. In other words, people are relatively happy with the crops and want to keep it that way. Then Americans come and are pushing the technology they're controlling down people's throats, reporting the results of their campaigns via diplomatic channels. People refuse, saying they're happy with what they have. Efforts continue - this time on EU level rather than lobbying individual countries.
pg314 9y ago
That's a simplistic view ignoring information asymmetries, externalities and natural monopolies.

charlesism 9y ago

> The beauty about free market economics is, [etc] So Economics is a science after all!

sgift 9y ago

That's the believe. The proof in the real world is quite lacking.

wallace_f 9y ago
There is a lot of proof markets do work very well when you get close to perfect (and I'd add, fair) competition. Outside of that, things begin to break down quickly.
- sgift 9y ago
  Hence the part about "real world" - yes, mathematically you can proof all this and it all looks nice and tidy, but all experience tells us that it doesn't work that way outside the lab. "The system is perfect, the people are the problem."
  - wallace_f 9y ago
    But there are a lot of markets where it does get close enough that the assumptions are useful in modelling the world. Agricultural products, food and beverage industry, market for unskilled labourers, etc. And in cases where there isn't perfect competition, many times good regulation can remedy the problems very effectively. I am very critical of many of the kinds of groupthink that exists in economics, but the idea that markets can work well is really not such a bad idea, especially when you compare it to the alternatives.
    - sgift 9y ago
      > And in cases where there isn't perfect competition, many times good regulation can remedy the problems very effectively. Then we agree, but that is the big point I see in this discussions "regulations are always bad, regulations destroy markets" and so on. Regulated markets are a useful tool. And like all tools they can be misused or overused.

mvc 9y ago

All those good things like maximizing productivity, capital utilization etc are theory based on markets with perfect competition. How many "free markets" satisfy all the assumptions made about perfect competition? https://en.wikipedia.org/wiki/Perfect_competition https://en.wikipedia.org/wiki/Perfect_competition

wallace_f 9y ago
Yea, exactly. But with effective regulation, we can get closer to perfect competition, or at least remedy the market failures that are inevitable. To go on a bit of a rant--ufortunately it appears the trend is going the other way with Big Gov allied with Big Business, out of control banking empires and MIC, made possible by never-ending low interest rates and easy money policies from the Fed that mask it all. Don't belive me? Real cost of living has increased to where 2 incomes are required for many to just keep their heads above water to afford what their parents had, despite more education and working longer hours. We have never ending wars, 26,000 bombs dropped last year, and the longest war in history and it was never even approved by congress. Our most popular media outlets tell us we need this so we have jobs[1]. 1-https://theintercept.com/2016/09/09/wolf-blitzer-is-worried-defense-contractors-will-lose-jobs-if-u-s-stops-arming-saudi-arabia/ https://theintercept.com/2016/09/09/wolf-blitzer-is-worried-...

bluetomcat 9y ago

The inconvenient truth is, gaining capital means gaining power. That power is exercised by taking specific decisions from the relatively small management board of a company and these decisions can have far-reaching effects not only on the company itself, but on society as a whole. We believe voting is essential to run a democracy, yet the management of companies is far from being democratic.

dvfjsdhgfv 9y ago

Unless you're powerful enough to make choices against the will of others. There is an interesting series of wikileaks from European embassies showing American pressure on wide acceptance of GMO. It seems a lot of money and effort went into this. See for example this one: https://wikileaks.org/plusd/cables/06WARSAW107_a.html https://wikileaks.org/plusd/cables/06WARSAW107_a.html > 8. (U) Spirnak's second lecture took place at the American Studies Center at Warsaw University. Approximately 20 students and faculty attended the lecture. Again, the students did not openly object to the idea of consuming GMO's but did reflect the typical European mistrust surrounding the issue. They asked about the purpose of altering the genetic structure of food, in what is essentially a "if it's not broken don't fix it" argument that is commonly made in Poland. In other words, people are relatively happy with the crops and want to keep it that way. Then Americans come and are pushing the technology they're controlling down people's throats, reporting the results of their campaigns via diplomatic channels. People refuse, saying they're happy with what they have. Efforts continue - this time on EU level rather than lobbying individual countries.

pg314 9y ago

That's a simplistic view ignoring information asymmetries, externalities and natural monopolies.