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"In any voluntary transaction, both parties will improve their situation -- else they would not have entered into the transaction voluntarily." Ah, the idealis

"In any voluntary transaction, both parties will improve their situation -- else they would not have entered into the transaction voluntarily." Ah, the idealist argument. "Fred is doing it, so it must be good for Fred." I proses that instead: In any voluntary transaction, both parties BELIEVE they will improve their situation -- else they would not have entered into the transaction voluntarily. In the case where the parties to a transaction are organizations of individuals, the circumstances are murkier still: In any voluntary transaction conducted by individuals on behalf of a group, both individuals believe they will improve their personal situation -- else they would not have entered their group into the transaction voluntarily. This is why you have HP's CEO voluntarily defrauding HP. I doubt you'd argue that HP entered into a transaction with his mistress because both HP and the mistress improved their situation?

CWuestefeld 16y ago
This is why you have HP's CEO voluntarily defrauding HP. Your example is fatally flawed. The transactions I assume you're referring to -- the misrepresented dining expenses -- are transactions between HP and the restaurant, with Hurd acting as HP's agent. Since Hurd acted fraudulently, it was -- by definition -- not a voluntary transaction. Fraud is the commission of force, and thus cannot be voluntary. both parties BELIEVE they will improve their situation Of course. And that's the best that we can do. I'd urge you to read Human Action, by Mises, where this problem is addressed quite completely. The thing is, only the participants themselves can truly know what their goals are, so there is no one in a position to gainsay. Indeed, sometimes the real motivation isn't even known to the individual himself. The best that we can do is to assume that each person is acting in his own self interest. The only alternative is to have some sort of Big Brother vetting every transaction, but there's no reason to believe that BB would do any better, and there's every reason to believe that it would be far worse.
- raganwald 16y ago
  The thing is, only the participants themselves can truly know what their goals are, so there is no one in a position to gainsay In that case, your entire argument is tautological. Two parties entering into a transaction both benefit. How do we know? Because they entered into it, so it must be good for them. How do we test this supposition? We can't, because there is no way to accumulate a list of voluntary transactions and see whether the parties benefitted or not. By the same token, we can argue that anyone taking a decision benefits. How do we know? because they took a decision. Junkies benefit from heroin. Consumers benefit from sub-prime debt. Lending institutions benefitted from investing in junk bonds. I benefit from spending time at work arguing this point with you. I am going to go my way and leave you to go yours. If you believe that anything two nations do voluntarily is automatically good for both of them, who am I to undermine your faith?

CWuestefeld 16y ago

This is why you have HP's CEO voluntarily defrauding HP. Your example is fatally flawed. The transactions I assume you're referring to -- the misrepresented dining expenses -- are transactions between HP and the restaurant, with Hurd acting as HP's agent. Since Hurd acted fraudulently, it was -- by definition -- not a voluntary transaction. Fraud is the commission of force, and thus cannot be voluntary. both parties BELIEVE they will improve their situation Of course. And that's the best that we can do. I'd urge you to read Human Action, by Mises, where this problem is addressed quite completely. The thing is, only the participants themselves can truly know what their goals are, so there is no one in a position to gainsay. Indeed, sometimes the real motivation isn't even known to the individual himself. The best that we can do is to assume that each person is acting in his own self interest. The only alternative is to have some sort of Big Brother vetting every transaction, but there's no reason to believe that BB would do any better, and there's every reason to believe that it would be far worse.

raganwald 16y ago
The thing is, only the participants themselves can truly know what their goals are, so there is no one in a position to gainsay In that case, your entire argument is tautological. Two parties entering into a transaction both benefit. How do we know? Because they entered into it, so it must be good for them. How do we test this supposition? We can't, because there is no way to accumulate a list of voluntary transactions and see whether the parties benefitted or not. By the same token, we can argue that anyone taking a decision benefits. How do we know? because they took a decision. Junkies benefit from heroin. Consumers benefit from sub-prime debt. Lending institutions benefitted from investing in junk bonds. I benefit from spending time at work arguing this point with you. I am going to go my way and leave you to go yours. If you believe that anything two nations do voluntarily is automatically good for both of them, who am I to undermine your faith?