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Hmm, difficult to agree with that as a blanket statement. Generally that kind of absolutist thinking is as flawed as the same in the other direction. The optimu

Hmm, difficult to agree with that as a blanket statement. Generally that kind of absolutist thinking is as flawed as the same in the other direction. The optimum is likely somewhere in the middle. For example, failure to price in externalities in a 'free' market is one of the biggest flaws, and exactly why we find ourselves in a situation of having way too much CO2 in the atmosphere.

CryptoPunk 5y ago
I don't think any serious free market advocate thinks the government doesn't have a place in restricting and producing negative and positive externalities, respectively. A free market generally means one where one's control over their person and private property is not restricted as long as that control is not being exercised to violate other's equal right to their person and private property, and to the commons. But other than definitions, I agree with you.
- roenxi 5y ago
  Maybe technically, in the sense that there has to be some sort of overarching enforcement and regulation to have a market. But the major advantage that the free market has is that it is much better than the government at assessing the relative size of positive and negative externalities. The government consistently underestimates the positive externalities of free market activity. Much like in this case - the people advocating that the government subsidise solar power and commit early have all been shown to have badly misjudged the situation. The free market is much better at getting clean power to people than they thought.
  - imtringued 5y ago
    >Maybe technically, in the sense that there has to be some sort of overarching enforcement and regulation to have a market. Actually, you got it exactly backwards, having a free market in the first place is a political choice the government makes. All of this is merely a fiction in our head, without that fiction we are back to the "Law of the jungle". Everything you can take and protect is yours, which is completely at odds with the idea of a free market. >But the major advantage that the free market has is that it is much better than the government at assessing the relative size of positive and negative externalities. The free market is the ultimate henchman of the government, it will optimize for the legislated outcome down to every single letter and squeeze every ounce of efficiency available. If the political context allows it, it will happen. If negative externalities are not balanced out via fees, this is equivalent to the government telling every entity in the economy to abuse the externality. >The government consistently underestimates the positive externalities of free market activity. No, it underestimates how reliable its henchman is and for some reason it doesn't know how to talk to the henchman even though it's the most natural thing in the world. >Much like in this case - the people advocating that the government subsidise solar power and commit early have all been shown to have badly misjudged the situation. Subsidizing solar power is wrong, for obvious reasons. The goal isn't solar power, the goal is the reduction of CO2 emissions and if possible, the reduction of the CO2 concentration in the atmosphere. This requires a stronger cap and trade system or a CO2 price, in theory these are equivalent, in practice the former is prone to too much meddling. >The free market is much better at getting clean power to people than they thought. What we need is less government "intervention" and more government activity in the market as the ultimate investor, let the henchman do the actual work.
- imtringued 5y ago
  Distilled down to its essence a free market grants you protection from involuntary transactions and access to voluntary transactions. Externalities are involuntary transactions, from a free market perspective they aren't any different from robbery or the dreaded... taxes. However, taxes are collected by the government that our population has voted in (in democratic nations). This is also why we prefer government monopolies over private monopolies, because we have a degree of control, we get to choose. The only dilemma is that the choice of government is on a societal level, individuals may not get what they voted for. However, there is no good solution to this problem and the search for a solution will only stop after the end of humanity.
  - CryptoPunk 5y ago
    Yes, that is a good distillation. There are also taxes that do not violate free market principles, like a tax on usage of land, or any other natural resource. The incredible thing is that these free-market-respecting taxes are found by economists to have zero negative effects on economic efficiency: https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax They are also very easy to administer and impossible to evade - thus extremely fair - and do not require creating a surveillance state to monitor private economic interactions, as a sales or income tax do.

CryptoPunk 5y ago

I don't think any serious free market advocate thinks the government doesn't have a place in restricting and producing negative and positive externalities, respectively. A free market generally means one where one's control over their person and private property is not restricted as long as that control is not being exercised to violate other's equal right to their person and private property, and to the commons. But other than definitions, I agree with you.

roenxi 5y ago
Maybe technically, in the sense that there has to be some sort of overarching enforcement and regulation to have a market. But the major advantage that the free market has is that it is much better than the government at assessing the relative size of positive and negative externalities. The government consistently underestimates the positive externalities of free market activity. Much like in this case - the people advocating that the government subsidise solar power and commit early have all been shown to have badly misjudged the situation. The free market is much better at getting clean power to people than they thought.
- imtringued 5y ago
  >Maybe technically, in the sense that there has to be some sort of overarching enforcement and regulation to have a market. Actually, you got it exactly backwards, having a free market in the first place is a political choice the government makes. All of this is merely a fiction in our head, without that fiction we are back to the "Law of the jungle". Everything you can take and protect is yours, which is completely at odds with the idea of a free market. >But the major advantage that the free market has is that it is much better than the government at assessing the relative size of positive and negative externalities. The free market is the ultimate henchman of the government, it will optimize for the legislated outcome down to every single letter and squeeze every ounce of efficiency available. If the political context allows it, it will happen. If negative externalities are not balanced out via fees, this is equivalent to the government telling every entity in the economy to abuse the externality. >The government consistently underestimates the positive externalities of free market activity. No, it underestimates how reliable its henchman is and for some reason it doesn't know how to talk to the henchman even though it's the most natural thing in the world. >Much like in this case - the people advocating that the government subsidise solar power and commit early have all been shown to have badly misjudged the situation. Subsidizing solar power is wrong, for obvious reasons. The goal isn't solar power, the goal is the reduction of CO2 emissions and if possible, the reduction of the CO2 concentration in the atmosphere. This requires a stronger cap and trade system or a CO2 price, in theory these are equivalent, in practice the former is prone to too much meddling. >The free market is much better at getting clean power to people than they thought. What we need is less government "intervention" and more government activity in the market as the ultimate investor, let the henchman do the actual work.
imtringued 5y ago
Distilled down to its essence a free market grants you protection from involuntary transactions and access to voluntary transactions. Externalities are involuntary transactions, from a free market perspective they aren't any different from robbery or the dreaded... taxes. However, taxes are collected by the government that our population has voted in (in democratic nations). This is also why we prefer government monopolies over private monopolies, because we have a degree of control, we get to choose. The only dilemma is that the choice of government is on a societal level, individuals may not get what they voted for. However, there is no good solution to this problem and the search for a solution will only stop after the end of humanity.
- CryptoPunk 5y ago
  Yes, that is a good distillation. There are also taxes that do not violate free market principles, like a tax on usage of land, or any other natural resource. The incredible thing is that these free-market-respecting taxes are found by economists to have zero negative effects on economic efficiency: https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax They are also very easy to administer and impossible to evade - thus extremely fair - and do not require creating a surveillance state to monitor private economic interactions, as a sales or income tax do.