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>> That's a very naive perspective. It's still the correct solution. The correct solution is to let corrupt and reckless institutions fail. Just because the

>> That's a very naive perspective. It's still the correct solution. The correct solution is to let corrupt and reckless institutions fail. Just because the deck is stacked against the actual implementation of the correct solution because of 'big money families' and so on doesn't nullify the correctness of the solution.

fleitz 15y ago
Exactly, which is why any non-free market solution will eventually accrue capital (or other benefits) to those in power, rather than to those who produce. See regulatory capture and moral hazard for why our system is screwed.
- JabavuAdams 15y ago
  Ok, but who has the power to enforce this mythical free market against the powerful people who benefit from the current system? Power means never having to say you're sorry. If you're not part of the elite, your only realistic options are to become part of the elite, or to change the game (i.e. create a new elite including you and those you care about) in some way not easily anticipated / countered by the current elite.
- barrkel 15y ago
  Well, free markets don't accrue capital to "those who produce" either; there's a lot of problems in completely free markets. Efficiency can't be achieved without complete information; since nobody is omniscient (never mind everybody), there will be plenty of inefficient allocation of capital not in proportion to production. Moreover, free markets have no moral content. Quite apart from unrestricted transactions creating injustice, free markets reward scarce resources in high demand. But something being in high demand does not make it virtuous - fashions change with the wind - and nor is there necessarily virtue in rewarding the owners of those scarce resources, which may be sheer luck. As a collective, we only want markets that are free to the degree that they are not also unjust; and that's a much harder problem.
- inthewoods 15y ago
  Doesn't that assume that a free market solution won't eventually accrue capital to those in power? I fail see the connection - what stops someone, via the free market, from making a lot of money and then using it to promote what they want via the influence that money can buy?
rayiner 15y ago
> It's still the correct solution. And wouldn't it be great to design airplanes in a world without gravity? It would make things so much easier!
- fleitz 15y ago
  Your point actually illustrates the argument against free markets quite well. When you don't consider the whole of what gravity actually does it sounds like it would be a lot simpler to build an airplane. The unfortunate reality of the situation is that the fantasy land doesn't actually work because of the many unintended consequences of eliminating gravity. Like the many unintended consequences that happen when you let people lend risk free. For your example just considering the airplane, the air would have no reason to stay near the earth, nor would there be any reason for the matter in the earth to coalesce. The sun would also almost immediately explode because of the immense pressures required to produce nuclear fusion.
  - barrkel 15y ago
    Please study a little public choice theory. You're arguing from a perspective of incomplete information, as I see it. You can't have free markets in the way you advocate in the presence of democracy as we know it. To argue for what you want, you need to describe how we would change our governmental structure to make it work. Perhaps an authoritarian rule by a benevolent AI?
JabavuAdams 15y ago
The fundamental problem with this argument is that it's an adversarial problem space. I.e. we could say "let corrupt institutions fail", but there's another powerful team that doesn't want them to fail, and can thwart our efforts. If we don't take that into account when designing the solution, we're doomed to fail. > It's still the correct solution. Well, no, that's what we're debating.
barrkel 15y ago
Here's an idea for a country: everybody does legal things, so we don't need police. Crime problem solved! Does that sound naive to you? Because that, to my ears, is exactly what you are advocating. You're completely ignoring institutional mechanics with a mere handwave of "correctness".
jcampbell1 15y ago
> It's still the correct solution. No, it is the dumbest solution picked out of a menu of solutions. If we accept there are "too big to fail" institutions, one way to get rid of them is to wait for them to fail. Much like if we have 8 unsafe airplanes, one solution is to wait for them to crash. The other solution is to enact policies that make these institutions smaller (like I originally proposed).
- nickik 15y ago
  Capitalism works like this if you fail you fail that means you lose. It works very well in almost any sector in the econemy but not for banks and banks are allready very regulated. Look up Free Banking on Wikipedia for Example.

fleitz 15y ago

Exactly, which is why any non-free market solution will eventually accrue capital (or other benefits) to those in power, rather than to those who produce. See regulatory capture and moral hazard for why our system is screwed.

JabavuAdams 15y ago
Ok, but who has the power to enforce this mythical free market against the powerful people who benefit from the current system? Power means never having to say you're sorry. If you're not part of the elite, your only realistic options are to become part of the elite, or to change the game (i.e. create a new elite including you and those you care about) in some way not easily anticipated / countered by the current elite.
barrkel 15y ago
Well, free markets don't accrue capital to "those who produce" either; there's a lot of problems in completely free markets. Efficiency can't be achieved without complete information; since nobody is omniscient (never mind everybody), there will be plenty of inefficient allocation of capital not in proportion to production. Moreover, free markets have no moral content. Quite apart from unrestricted transactions creating injustice, free markets reward scarce resources in high demand. But something being in high demand does not make it virtuous - fashions change with the wind - and nor is there necessarily virtue in rewarding the owners of those scarce resources, which may be sheer luck. As a collective, we only want markets that are free to the degree that they are not also unjust; and that's a much harder problem.
inthewoods 15y ago
Doesn't that assume that a free market solution won't eventually accrue capital to those in power? I fail see the connection - what stops someone, via the free market, from making a lot of money and then using it to promote what they want via the influence that money can buy?

rayiner 15y ago

> It's still the correct solution. And wouldn't it be great to design airplanes in a world without gravity? It would make things so much easier!

fleitz 15y ago
Your point actually illustrates the argument against free markets quite well. When you don't consider the whole of what gravity actually does it sounds like it would be a lot simpler to build an airplane. The unfortunate reality of the situation is that the fantasy land doesn't actually work because of the many unintended consequences of eliminating gravity. Like the many unintended consequences that happen when you let people lend risk free. For your example just considering the airplane, the air would have no reason to stay near the earth, nor would there be any reason for the matter in the earth to coalesce. The sun would also almost immediately explode because of the immense pressures required to produce nuclear fusion.
- barrkel 15y ago
  Please study a little public choice theory. You're arguing from a perspective of incomplete information, as I see it. You can't have free markets in the way you advocate in the presence of democracy as we know it. To argue for what you want, you need to describe how we would change our governmental structure to make it work. Perhaps an authoritarian rule by a benevolent AI?

JabavuAdams 15y ago

The fundamental problem with this argument is that it's an adversarial problem space. I.e. we could say "let corrupt institutions fail", but there's another powerful team that doesn't want them to fail, and can thwart our efforts. If we don't take that into account when designing the solution, we're doomed to fail. > It's still the correct solution. Well, no, that's what we're debating.

barrkel 15y ago

Here's an idea for a country: everybody does legal things, so we don't need police. Crime problem solved! Does that sound naive to you? Because that, to my ears, is exactly what you are advocating. You're completely ignoring institutional mechanics with a mere handwave of "correctness".

jcampbell1 15y ago

> It's still the correct solution. No, it is the dumbest solution picked out of a menu of solutions. If we accept there are "too big to fail" institutions, one way to get rid of them is to wait for them to fail. Much like if we have 8 unsafe airplanes, one solution is to wait for them to crash. The other solution is to enact policies that make these institutions smaller (like I originally proposed).

nickik 15y ago
Capitalism works like this if you fail you fail that means you lose. It works very well in almost any sector in the econemy but not for banks and banks are allready very regulated. Look up Free Banking on Wikipedia for Example.