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Just stop meddling with the economy and it'll work perfectly. Soviet Union had the world's smartest economists trying to control their economy, and probably wro

by Geee 5y ago

Just stop meddling with the economy and it'll work perfectly. Soviet Union had the world's smartest economists trying to control their economy, and probably wrote smart scientific articles with all kinds of complex mathematics trying to prove each other wrong. To me it seems obvious that laissez-faire economy would just stabilize itself in the most optimal way. I don't know if the economists actually know this, but can't do it because of politics or their own benefit.

maxerickson 5y ago
"work perfectly" and "optimal" aren't objective states, they are opinions.
throwawaygh 5y ago
Exactly. Carbon is optimally priced. Obviously.
dddw 5y ago
"Stop medling with the economy" probably stems from before abolition...
incompatible 5y ago
The economy, back when it was on a gold standard so that the money supply was more constant, tended to show a strong boom-bust cycle. The bust would lead to bankruptcies and unemployment. I'm not sure if this counts as "working perfectly" or not. These days, central banks flood the economy with money if there's the slightest hint of anything going wrong, so that interest rates have persistently tended to zero and even below. A capitalist economy is based on government intervention, in any case. They provide all the enforcement of contracts and property rights, and do some wealth redistribution, especially helping people who can't survive from what the market provides. Without the latter, it seems inevitable that the system devolves into a few winners and many losers, and such a system will eventually be overthrown by the losers.
noahtallen 5y ago
It really depends what “most optimal” means. For example, our regulatory system today is the result of companies crossing a line that society is unhappy with: - Massive pollution. Think of the burning Cuyahoga River or the terribly smoggy Pittsburgh. - Horrible working conditions. Where plenty of employees (including children) were forced to work more hours than healthy, and in environments which kill them. A similar modern example is hospitals price gouging super basic medical supplies. Those are the natural results of companies operating in a purely profit-driven manner. A laissez-faire economy has no concept of morality or rights, just of profit. Given that most people are completely unwilling to live under those sorts of conditions, our society has interjected itself into the economy to protect our rights. That happens via government regulation. If we remove regulations and “stop meddling with the economy,” companies will take the cheapest route to profit, because they basically have to. With no regulations, that means many companies won’t build expensive filtering systems to reduce pollution or wool quickly disregard expensive or time consuming safety rules. I’m also not convinced that laissez-faire actually works at all when the primary goal of the sector in question ought to be different from profit. A great example is health care, where the primary goal should be human well-being and health, but being profit focused would be completely at odds. If you’re profit-focused, there’s nothing stopping you from fixing prices very high because the person getting emergency services doesn’t have a chance to shop around or look at competition. In fact, any place that competition can’t or doesn’t exist is very bad for society and consumers. Any sort of monopoly means prices are very high and quality is very low. And monopolies always form over time in a laissez-fairs economy because it’s the best way to increase profit. And yet this is completely to the detriment of society and consumers —- e.g. to the detriment of everyone who exists. (I would posit that even a Walmart exec would have parts of their life that would be better if Walmart wasn’t monopolizing small markets.) How do these problems get solved without “meddling” in the economy?
- Geee 5y ago
  Well, the idea is that the economy should be able to self-regulate. People don't want to work in bad conditions and they don't want to support polluting companies, which makes these companies unable to compete. In this way, laissez-faire economy has morality, because people can directly vote with their wallet and their feet. In order to maximize profits, companies will have to seek the favor of people. Even today, companies compete on being clean and treating their workers well, even further than any regulations would require them. The historical difference is that back then people weren't asking for higher standards, i.e. there was lack of knowledge and lack of alternatives. Also, I don't believe that horrible working conditions have ever been a standard practice, but rather an extreme example of some anomaly that has resulted from coercion or even state regulation of some sort. There would be less price gouging and less monopolies, because these both are caused by lack of competition. There are lots of regulatory moats than decrease competition and increase costs.

by Geee 5y ago

maxerickson 5y ago

"work perfectly" and "optimal" aren't objective states, they are opinions.

throwawaygh 5y ago

Exactly. Carbon is optimally priced. Obviously.

dddw 5y ago

"Stop medling with the economy" probably stems from before abolition...

incompatible 5y ago

The economy, back when it was on a gold standard so that the money supply was more constant, tended to show a strong boom-bust cycle. The bust would lead to bankruptcies and unemployment. I'm not sure if this counts as "working perfectly" or not. These days, central banks flood the economy with money if there's the slightest hint of anything going wrong, so that interest rates have persistently tended to zero and even below. A capitalist economy is based on government intervention, in any case. They provide all the enforcement of contracts and property rights, and do some wealth redistribution, especially helping people who can't survive from what the market provides. Without the latter, it seems inevitable that the system devolves into a few winners and many losers, and such a system will eventually be overthrown by the losers.

noahtallen 5y ago

It really depends what “most optimal” means. For example, our regulatory system today is the result of companies crossing a line that society is unhappy with: - Massive pollution. Think of the burning Cuyahoga River or the terribly smoggy Pittsburgh. - Horrible working conditions. Where plenty of employees (including children) were forced to work more hours than healthy, and in environments which kill them. A similar modern example is hospitals price gouging super basic medical supplies. Those are the natural results of companies operating in a purely profit-driven manner. A laissez-faire economy has no concept of morality or rights, just of profit. Given that most people are completely unwilling to live under those sorts of conditions, our society has interjected itself into the economy to protect our rights. That happens via government regulation. If we remove regulations and “stop meddling with the economy,” companies will take the cheapest route to profit, because they basically have to. With no regulations, that means many companies won’t build expensive filtering systems to reduce pollution or wool quickly disregard expensive or time consuming safety rules. I’m also not convinced that laissez-faire actually works at all when the primary goal of the sector in question ought to be different from profit. A great example is health care, where the primary goal should be human well-being and health, but being profit focused would be completely at odds. If you’re profit-focused, there’s nothing stopping you from fixing prices very high because the person getting emergency services doesn’t have a chance to shop around or look at competition. In fact, any place that competition can’t or doesn’t exist is very bad for society and consumers. Any sort of monopoly means prices are very high and quality is very low. And monopolies always form over time in a laissez-fairs economy because it’s the best way to increase profit. And yet this is completely to the detriment of society and consumers —- e.g. to the detriment of everyone who exists. (I would posit that even a Walmart exec would have parts of their life that would be better if Walmart wasn’t monopolizing small markets.) How do these problems get solved without “meddling” in the economy?

Geee 5y ago
Well, the idea is that the economy should be able to self-regulate. People don't want to work in bad conditions and they don't want to support polluting companies, which makes these companies unable to compete. In this way, laissez-faire economy has morality, because people can directly vote with their wallet and their feet. In order to maximize profits, companies will have to seek the favor of people. Even today, companies compete on being clean and treating their workers well, even further than any regulations would require them. The historical difference is that back then people weren't asking for higher standards, i.e. there was lack of knowledge and lack of alternatives. Also, I don't believe that horrible working conditions have ever been a standard practice, but rather an extreme example of some anomaly that has resulted from coercion or even state regulation of some sort. There would be less price gouging and less monopolies, because these both are caused by lack of competition. There are lots of regulatory moats than decrease competition and increase costs.