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> "That might not come as a shock to most people, but to economists of the libertarian, free-market bent, it’s tantamount to heresy. Tricksters and con men, the

> "That might not come as a shock to most people, but to economists of the libertarian, free-market bent, it’s tantamount to heresy. Tricksters and con men, they say, will be weeded out of the market by their bad reputations. That’s a pretty big assumption, and might rightfully strike most non-economists as wishful thinking. But if you look at economic models, you’ll find that few of them include successful fraud and deception as a possibility. Modern econ relies so heavily on the assumption of rationality that there’s just not much room for tricks and scams. Obviously these models are far removed from most people’s experience of real markets, in which deception is common." this is the achille's heal of libertarianism. it simply leans too heavily on the rationality assumption, while also ignoring many things of value in our lives like love, empathy, conversations, the future (unknowable) value of natural resources, homemaking activities, etc. it's political use (in the mano a mano sense, not in the government sense) is as a rationalization to be a jerk to your neighbor. complex financial instruments are simply a manifestation of that mindset.

WalterBright 9y ago
> leans too heavily on the rationality assumption, while also ignoring many things of value in our lives like love, empathy, conversations, the future (unknowable) value of natural resources, homemaking activities, etc. I don't see any justification for that assessment. How does libertarianism overlook empathy, for example? > it's political use (in the mano a mano sense, not in the government sense) is as a rationalization to be a jerk to your neighbor. That's not remotely true.
- bittercynic 9y ago
  > That's not remotely true. I've witnessed self-described libertarians doing exactly that. It usually goes along with a lack of understanding of the power they have over someone far less economically fortunate.
  - __blockcipher__ 9y ago
    It seems quite silly to argue against a viewpoint by citing that you've met some douchebags who follow that philosophy. I'm met plenty of republicans who lack understanding of the power they have over the less fortunate. I've also met many liberals who can't comprehend why someone would want to own a gun, or who constantly look for any excuse to peg someone as racist/sexist/classist/etc. (Obviously these are all United States-centric examples since I've spent most of my life here) To me it seems far more productive to examine the "best form" of each philosophy rather than the worst
    - bittercynic 9y ago
      I don't think any reasonable person could disagree with either of your first two paragraphs. On the third, though, I think it is worthwhile to examine the good, bad, and ugly of each viewpoint. I only meant to point out an example of ugliness that sometimes falls out of libertarianism.
  - WalterBright 9y ago
    There are plenty of jerks of every political persuasion who use those philosophies to justify being jerks. Now, if there is something in the philosophy of libertarianism that endorses being a jerk, please point it out.
    - bittercynic 9y ago
      Though it may not be a core tenet of libertarianism, much of it seems to rely on an assumption that people are rational actors with access to good information who compete on a level playing field and seek to maximize their own utility in each individual transaction. This can boil down to something like the big boy principal, which does seem to advocate acting like a jerk, or acting in bad faith and then blaming your victim with a "He should have known better, so it's his fault I took advantage of him."
      - WalterBright 9y ago
        The core tenet of libertarianism is you cannot force others to do your will, nor can you hurt them. Tricking people, conning them, defrauding them, rooking them into bad contracts, etc., is all proscribed.
        bittercynic 9y ago
        Please don't take this as an attack on libertarianism, as it seems as valid as any of the competing philosophies to me. That said, the part about not forcing others to do your will is sometimes used to argue against levying taxes to be used for social programs (or almost anything else), and I think that is a mistake. I don't think I'm straw-manning here, as I have come across that argument fairly regularly, but I understand this does not represent the perspective of every person who identifies as libertarian.
        WalterBright 9y ago
        I'm just responding to the "jerks" issue.
- anigbrowl 9y ago
  According to the rather fundamental libertarian theorist Murray Rothbard, people shouldn't be burdened with the obligation to feed their own children. https://mises.org/library/children-and-rights https://mises.org/library/children-and-rights
  - WalterBright 9y ago
    According to him. Nobody else I've ever heard of.
    - anigbrowl 9y ago
      Don't pretend like he's not influential or that a 'fuck you, I've got mine' attitude doesn't pervade libertarianism.
cryoshon 9y ago
and this is where economics becomes one with social theory, too. one of these days i'll be banned for making insightful yet political comments like this, but: the socioeconomic theorists like marx saw that the profit motive led to perverse incentives and exploitation as a fundamental property of capitalism. modern economists fail to connect the... hand waving that they do regarding deception with the inability to predict economic events or the widespread social destruction that occurs when their (hand waved) mathematical theories are allowed to govern social outcomes "because otherwise, why would people work?" let's face it, free market ideology isn't even a valid or self consistent and complete theory. it's a cover story for feudalism that layers on as many extra mathematical abstractions as it can manage purely to increase the cognitive cost of unraveling it... just as the OP suggests in a much smaller context within the same realm.
- bittercynic 9y ago
  I think you've misjudged the reason for the downvotes. (I'm not one of them) Incompleteness and wrongness are properties of every social and economic theory, and you seem to be attacking some pretty well established theory on the grounds that it is incomplete and/or wrong. No theory involving humans can be simultaneously complete, consistent, and interesting. The more important question is how bad are the consequences of letting a given theory guide policy, and while the status quo may be far from ideal, it is far from the worst humans have done. Also, it's pretty bold to label your own comment insightful.
  - notduncansmith 9y ago
    Honest question: should economics be interesting? It seems like that should be one of the simplest, most mundane aspects of society. Enjoyment from successfully navigating complex constraint sets is natural, but turning the mechanisms by which human beings get fed and clothed into a game like that feels less productive than many alternatives.
    - bittercynic 9y ago
      Interesting was a poor word choice on my part. Should have said something more like useful/meaningful.
conanbatt 9y ago
> this is the achille's heal of libertarianism. it simply leans too heavily on the rationality assumption, while also ignoring many things of value in our lives like love, empathy, conversations, the future (unknowable) value of natural resources, homemaking activities, etc. it's political use (in the mano a mano sense, not in the government sense) is as a rationalization to be a jerk to your neighbor. Not only I disagree completely with the notion that it is a weakness of the libertarian-economic model, but contrary to it, it offers the strongest protection against the misuse of paternalistic ideas. As Milton Friedman put it, "every man should have the ability to be stupid with his own money". Behavioral economics are fun and interesting, but they are not the kind of ideas that will have an effect on policy the way that it disproves or makes the neo-liberal economic framework inapplicable. The reality is that even presented with some predictably irrational behavior, we still prefer it. Even if you know the crossed-off price tag is economically irrelevant to the decision to buy or not, we react to it, we change our decision. And although there are circumstances worth exploring, trying to nuke out those solutions tend to have really worse results.
- notduncansmith 9y ago
  I believe protection against abuse of top-down policy is what the 2nd amendment is for, no need to pollute the globally-efficient distribution of goods and services with redundant efforts. If you would describe most of the populace as imperfectly rational (I would, and I acknowledge my own contribution to that) then it seems irrational to support policy that depends on a perfectly rational populace; like a policy that depends on a nationwide constant temperature of 72 degrees.
  - conanbatt 9y ago
    > I believe protection against abuse of top-down policy is what the 2nd amendment is for, no need to pollute the globally-efficient distribution of goods and services with redundant efforts. I wonder how many unfair taxes have been repealed by the capacity to bear arms in response to them in the US. Examples of taxes that would be deemed extremely unfair by the recipients include soda, alcohol and tobacco taxes. > If you would describe most of the populace as imperfectly rational (I would, and I acknowledge my own contribution to that) then it seems irrational to support policy that depends on a perfectly rational populace; like a policy that depends on a nationwide constant temperature of 72 degrees. I'd like some more concrete examples of what you are pointing at. Classic economic models accept entirely that people are not perfectly rational, its just they tend to be for the majority of circumstances in aggregate. This is no secret, not even to Adam Smith, and that was centuries ago. So what policies are you talking about? The state deciding what your diet should be, how your savings should be, how your work time should be, etc?

WalterBright 9y ago

> leans too heavily on the rationality assumption, while also ignoring many things of value in our lives like love, empathy, conversations, the future (unknowable) value of natural resources, homemaking activities, etc. I don't see any justification for that assessment. How does libertarianism overlook empathy, for example? > it's political use (in the mano a mano sense, not in the government sense) is as a rationalization to be a jerk to your neighbor. That's not remotely true.

bittercynic 9y ago
> That's not remotely true. I've witnessed self-described libertarians doing exactly that. It usually goes along with a lack of understanding of the power they have over someone far less economically fortunate.
- __blockcipher__ 9y ago
  It seems quite silly to argue against a viewpoint by citing that you've met some douchebags who follow that philosophy. I'm met plenty of republicans who lack understanding of the power they have over the less fortunate. I've also met many liberals who can't comprehend why someone would want to own a gun, or who constantly look for any excuse to peg someone as racist/sexist/classist/etc. (Obviously these are all United States-centric examples since I've spent most of my life here) To me it seems far more productive to examine the "best form" of each philosophy rather than the worst
  - bittercynic 9y ago
    I don't think any reasonable person could disagree with either of your first two paragraphs. On the third, though, I think it is worthwhile to examine the good, bad, and ugly of each viewpoint. I only meant to point out an example of ugliness that sometimes falls out of libertarianism.
- WalterBright 9y ago
  There are plenty of jerks of every political persuasion who use those philosophies to justify being jerks. Now, if there is something in the philosophy of libertarianism that endorses being a jerk, please point it out.
  - bittercynic 9y ago
    Though it may not be a core tenet of libertarianism, much of it seems to rely on an assumption that people are rational actors with access to good information who compete on a level playing field and seek to maximize their own utility in each individual transaction. This can boil down to something like the big boy principal, which does seem to advocate acting like a jerk, or acting in bad faith and then blaming your victim with a "He should have known better, so it's his fault I took advantage of him."
    - WalterBright 9y ago
      The core tenet of libertarianism is you cannot force others to do your will, nor can you hurt them. Tricking people, conning them, defrauding them, rooking them into bad contracts, etc., is all proscribed.
      - bittercynic 9y ago
        Please don't take this as an attack on libertarianism, as it seems as valid as any of the competing philosophies to me. That said, the part about not forcing others to do your will is sometimes used to argue against levying taxes to be used for social programs (or almost anything else), and I think that is a mistake. I don't think I'm straw-manning here, as I have come across that argument fairly regularly, but I understand this does not represent the perspective of every person who identifies as libertarian.
        WalterBright 9y ago
        I'm just responding to the "jerks" issue.
anigbrowl 9y ago
According to the rather fundamental libertarian theorist Murray Rothbard, people shouldn't be burdened with the obligation to feed their own children. https://mises.org/library/children-and-rights https://mises.org/library/children-and-rights
- WalterBright 9y ago
  According to him. Nobody else I've ever heard of.
  - anigbrowl 9y ago
    Don't pretend like he's not influential or that a 'fuck you, I've got mine' attitude doesn't pervade libertarianism.

cryoshon 9y ago

and this is where economics becomes one with social theory, too. one of these days i'll be banned for making insightful yet political comments like this, but: the socioeconomic theorists like marx saw that the profit motive led to perverse incentives and exploitation as a fundamental property of capitalism. modern economists fail to connect the... hand waving that they do regarding deception with the inability to predict economic events or the widespread social destruction that occurs when their (hand waved) mathematical theories are allowed to govern social outcomes "because otherwise, why would people work?" let's face it, free market ideology isn't even a valid or self consistent and complete theory. it's a cover story for feudalism that layers on as many extra mathematical abstractions as it can manage purely to increase the cognitive cost of unraveling it... just as the OP suggests in a much smaller context within the same realm.

bittercynic 9y ago
I think you've misjudged the reason for the downvotes. (I'm not one of them) Incompleteness and wrongness are properties of every social and economic theory, and you seem to be attacking some pretty well established theory on the grounds that it is incomplete and/or wrong. No theory involving humans can be simultaneously complete, consistent, and interesting. The more important question is how bad are the consequences of letting a given theory guide policy, and while the status quo may be far from ideal, it is far from the worst humans have done. Also, it's pretty bold to label your own comment insightful.
- notduncansmith 9y ago
  Honest question: should economics be interesting? It seems like that should be one of the simplest, most mundane aspects of society. Enjoyment from successfully navigating complex constraint sets is natural, but turning the mechanisms by which human beings get fed and clothed into a game like that feels less productive than many alternatives.
  - bittercynic 9y ago
    Interesting was a poor word choice on my part. Should have said something more like useful/meaningful.

conanbatt 9y ago

> this is the achille's heal of libertarianism. it simply leans too heavily on the rationality assumption, while also ignoring many things of value in our lives like love, empathy, conversations, the future (unknowable) value of natural resources, homemaking activities, etc. it's political use (in the mano a mano sense, not in the government sense) is as a rationalization to be a jerk to your neighbor. Not only I disagree completely with the notion that it is a weakness of the libertarian-economic model, but contrary to it, it offers the strongest protection against the misuse of paternalistic ideas. As Milton Friedman put it, "every man should have the ability to be stupid with his own money". Behavioral economics are fun and interesting, but they are not the kind of ideas that will have an effect on policy the way that it disproves or makes the neo-liberal economic framework inapplicable. The reality is that even presented with some predictably irrational behavior, we still prefer it. Even if you know the crossed-off price tag is economically irrelevant to the decision to buy or not, we react to it, we change our decision. And although there are circumstances worth exploring, trying to nuke out those solutions tend to have really worse results.

notduncansmith 9y ago
I believe protection against abuse of top-down policy is what the 2nd amendment is for, no need to pollute the globally-efficient distribution of goods and services with redundant efforts. If you would describe most of the populace as imperfectly rational (I would, and I acknowledge my own contribution to that) then it seems irrational to support policy that depends on a perfectly rational populace; like a policy that depends on a nationwide constant temperature of 72 degrees.
- conanbatt 9y ago
  > I believe protection against abuse of top-down policy is what the 2nd amendment is for, no need to pollute the globally-efficient distribution of goods and services with redundant efforts. I wonder how many unfair taxes have been repealed by the capacity to bear arms in response to them in the US. Examples of taxes that would be deemed extremely unfair by the recipients include soda, alcohol and tobacco taxes. > If you would describe most of the populace as imperfectly rational (I would, and I acknowledge my own contribution to that) then it seems irrational to support policy that depends on a perfectly rational populace; like a policy that depends on a nationwide constant temperature of 72 degrees. I'd like some more concrete examples of what you are pointing at. Classic economic models accept entirely that people are not perfectly rational, its just they tend to be for the majority of circumstances in aggregate. This is no secret, not even to Adam Smith, and that was centuries ago. So what policies are you talking about? The state deciding what your diet should be, how your savings should be, how your work time should be, etc?