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I was only providing an example of how libertarian principles don't always scale. I said nothing about the housing market in the U.S. and I don't know why you

I was only providing an example of how libertarian principles don't always scale. I said nothing about the housing market in the U.S. and I don't know why you bring up the U.S. housing market. From what I've read about libertarianism (the economic principles of libertarianism) it is highly impractical. It seem like a set of principles that work at the local level provided there is plenty of competition. Libertarian principles don't scale at a macro level. Especially in the presence of cartels or monopolies. Or in an environment when risk is being transferred to parties who don't understand the risk that is being transfered to them and when this risk transfer is being done on a truly massive scale.

SwellJoe 15y ago
"One person who buys a house they can't really afford is not a big deal. Let such a person make that bad decision if this is their inclination is a libertarian attitude. But millions of people make a similarly bad decision affects us all." I assumed you were describing a recent real-world scenario where exactly this occurred. What did you have in mind, if not the recent US mortgage crisis? It seems, to me, that real examples are more useful than imagined ones. If we are using imaginary problems, we can come up with all sorts of interesting solutions, but they don't necessarily carry over to real world problems. Thought experiments can be useful tools, but when the results conflict with reality, you have to be willing to adjust and accommodate new data. "Especially in the presence of cartels or monopolies." Which cartels and monopolies do you have in mind? The biggest monopolies and cartels I can think of in the US are those that have government support to protect their monopoly. Phone, cable, power, water, are the most firmly held monopolies (occasionally duopolies) in the US, for instance, and all are protected by government. Toll roads in the northeast are another good example of government-endorsed monopolies (I'm not saying the toll roads are necessarily a bad thing, just that they are solidly a monopoly; you can't really drive from NYC to anywhere without travelling on those toll roads, and they are, by far, the most expensive toll roads I've ever driven on, and I travel full-time in a motorhome, so I've seen a lot of toll roads). Microsoft was frequently called a monopoly for several years, but the market eventually removed those monopolistic powers. Anti-trust actions barely put a dent in their power, and targeted quite small, quite unimportant elements. The market is where the real change came from. Heck, many of the remaining strongholds for Microsoft are in governments, which are unable to move as fast as private organizations. And, a not insignificant amount of Microsoft's power came from having a stranglehold on government schools, offices, etc. I can't think of many other good monopoly examples that aren't government-backed, though I'm sure there are some examples. I'm willing to believe that anti-trust legislation has a place; but I'm also very suspicious of the argument that all government is good government because monopolies and cartels are dangerous, which seems to be the root of your bias against libertarianism or reduced government.
- nerfhammer 15y ago
  Perhaps the reason you have trouble thinking of monopolies that aren't government sanctioned is because anti-trust law already prohibits monopolies from forming unless government sanctioned. The exceptions that are sanctioned are examples in economic theory of "natural monopolies", typically utilities, where competition would be highly impractical. For example, it would be impractical to have many different competing networks of privately owned telephone poles, sewer lines, water lines, etc. serving the same municipality. So a natural monopoly is allowed to exist but is heavily regulated and may face price controls. see http://en.wikipedia.org/wiki/Natural_monopoly http://en.wikipedia.org/wiki/Natural_monopoly
  - kiba 15y ago
    Perhaps the reason you have trouble thinking of monopolies that aren't government sanctioned is because anti-trust law already prohibits monopolies from forming unless government sanctioned. I remember anti-trust law being used against smaller companies because lawyers find it easier to persecute than fighting against bigger companies. Even anti-trust regulations can be used to decrease competition. Sometime it's better to opt for the least worst option rather than opting for a solution that kill the patient.
    - nknight 15y ago
      Microsoft aside, Standard Oil, Kodak, AT&T, and, well, AT&T-2, off the top of my head. These are/were "smaller companies"? Antitrust claims get tacked on to a lot of lawsuits by overzealous attorneys, but they're usually dismissed out of hand. Serious antitrust litigation is rare, and by definition targets companies that are large in their particular industries.

SwellJoe 15y ago

"One person who buys a house they can't really afford is not a big deal. Let such a person make that bad decision if this is their inclination is a libertarian attitude. But millions of people make a similarly bad decision affects us all." I assumed you were describing a recent real-world scenario where exactly this occurred. What did you have in mind, if not the recent US mortgage crisis? It seems, to me, that real examples are more useful than imagined ones. If we are using imaginary problems, we can come up with all sorts of interesting solutions, but they don't necessarily carry over to real world problems. Thought experiments can be useful tools, but when the results conflict with reality, you have to be willing to adjust and accommodate new data. "Especially in the presence of cartels or monopolies." Which cartels and monopolies do you have in mind? The biggest monopolies and cartels I can think of in the US are those that have government support to protect their monopoly. Phone, cable, power, water, are the most firmly held monopolies (occasionally duopolies) in the US, for instance, and all are protected by government. Toll roads in the northeast are another good example of government-endorsed monopolies (I'm not saying the toll roads are necessarily a bad thing, just that they are solidly a monopoly; you can't really drive from NYC to anywhere without travelling on those toll roads, and they are, by far, the most expensive toll roads I've ever driven on, and I travel full-time in a motorhome, so I've seen a lot of toll roads). Microsoft was frequently called a monopoly for several years, but the market eventually removed those monopolistic powers. Anti-trust actions barely put a dent in their power, and targeted quite small, quite unimportant elements. The market is where the real change came from. Heck, many of the remaining strongholds for Microsoft are in governments, which are unable to move as fast as private organizations. And, a not insignificant amount of Microsoft's power came from having a stranglehold on government schools, offices, etc. I can't think of many other good monopoly examples that aren't government-backed, though I'm sure there are some examples. I'm willing to believe that anti-trust legislation has a place; but I'm also very suspicious of the argument that all government is good government because monopolies and cartels are dangerous, which seems to be the root of your bias against libertarianism or reduced government.

nerfhammer 15y ago
Perhaps the reason you have trouble thinking of monopolies that aren't government sanctioned is because anti-trust law already prohibits monopolies from forming unless government sanctioned. The exceptions that are sanctioned are examples in economic theory of "natural monopolies", typically utilities, where competition would be highly impractical. For example, it would be impractical to have many different competing networks of privately owned telephone poles, sewer lines, water lines, etc. serving the same municipality. So a natural monopoly is allowed to exist but is heavily regulated and may face price controls. see http://en.wikipedia.org/wiki/Natural_monopoly http://en.wikipedia.org/wiki/Natural_monopoly
- kiba 15y ago
  Perhaps the reason you have trouble thinking of monopolies that aren't government sanctioned is because anti-trust law already prohibits monopolies from forming unless government sanctioned. I remember anti-trust law being used against smaller companies because lawyers find it easier to persecute than fighting against bigger companies. Even anti-trust regulations can be used to decrease competition. Sometime it's better to opt for the least worst option rather than opting for a solution that kill the patient.
  - nknight 15y ago
    Microsoft aside, Standard Oil, Kodak, AT&T, and, well, AT&T-2, off the top of my head. These are/were "smaller companies"? Antitrust claims get tacked on to a lot of lawsuits by overzealous attorneys, but they're usually dismissed out of hand. Serious antitrust litigation is rare, and by definition targets companies that are large in their particular industries.