4 ms·

How well do free markets resolve basic problems of resource distribution? Like, say, the tragedy of the commons?

by vkou 2mo ago

WalterBright 2mo ago
Free markets do not resolve the tragedy of the commons. The fix is to not have commons. For example, we are running out of fish in the ocean from overfishing. But there's no shortage of cows and chickens, despite massive consumption of them. The former is the commons, the latter is private property.
- deleted 2mo ago
  [deleted]
- nrr 2mo ago
  I fear that this conflates open and closed access with exclusive property rights. It isn't untrue that asserting exclusive property rights on something makes it closed access[0], but there are other mechanisms for achieving closed access of a resource, like enforced regulation. Slightly more formally, an assertion of exclusive property rights is a sufficient condition for something to be closed access, but it isn't necessary. Though, admittedly, that does depend on what one's definition of a free market is. Is it unfettered commerce, consumer protections and suchlike be damned? Is it a system of commerce that ensures equitable access? I'm personally of the mind that, as long as I trade with certificates that bear Caesar's face (or trade with proxies for such certificates, like a MasterCard), he gets to make the rules in exchange for my being able to lean on his legal system to protect my interests, so I find that the equitable access angle is nice. (Likewise, trading with Bitcoin or Ethereum or whatever the in-vogue cryptocurrency is today means that the code makes the rules, and I get to pay for the privilege of having my transactions indelibly entered into the distributed ledger and for the code governing those transactions to be buggy and exploitable. I'm still scratching my head at it.) At the risk of building a strawman here, I'll caution that it's logically inconsistent to expect the state to enforce exclusive rights while also urging that strict regulation of a shared commons is an illegitimate market intervention. -- 0: That is, unless the title holder grants license, but that's a whole other conversation.
  - roenxi 2mo ago
    > I'm personally of the mind that, as long as I trade with certificates that bear Caesar's face (or trade with proxies for such certificates, like a MasterCard), he gets to make the rules in exchange for my being able to lean on his legal system to protect my interests, so I find that the equitable access angle is nice. It is a minor point I suppose, but this is the other way round. Because Caesar makes the rules you trade certificates that bear his face. It takes vigour and energy on the part of law enforcement to stop people from moving to private currencies.
    - nrr 2mo ago
      I'm unsure that I agree. History has borne out a lot of evidence that people will jump to other means of paying for things in the face of the local currency collapsing, even in the face of amped up (but nonetheless impotent) enforcement.
  - WalterBright 2mo ago
    > that does depend on what one's definition of a free market is Sigh. No need to make up one's own definition. Googling "free market": "A free market is an economic system where prices, wages, and the flow of goods are determined by supply and demand. There is no government control or central planning telling people what to buy, sell, or make. Instead, private choices and voluntary trades drive the economy."
    - nrr 2mo ago
      As it turns out, I'm not making up my own definitions here. The view of a free market being a market with equitable access is attributable to Adam Smith from his Wealth of Nations. He bases his understanding of this freedom on the absence of private rent-seeking and absence of monopoly privilege (though in 1700's vernacular). Henry George in his Progress and Poverty makes similar gestures toward defining a free market this way. Part of the reason why it's important to consider other definitions (and other economic models) is that there is an important result in economics from the 1970's that, more or less, establishes the lack of a guarantee that the demand curve in an aggregate demand model (a macroeconomic model) will slope downward. This makes the aggregate demand model less than useful for a priori arguments about supply and demand in the macro context; they must instead be approached a posteriori. It's also the big reason why I'm uninterested in a colloquial definition that is heavily filtered through von Mises and Friedman.
- inigyou 2mo ago
  Are you saying I should have to bid for oxygen rights?
  - roenxi 2mo ago
    You pay market price for oxygen. It just happens to be 0 right now. There isn't any reason in principle that price can't change (eg, if you want to go underwater getting the oxygen will most certainly cost you something, if you want your air at a certain temperature or humidity that costs you too). If we set up a moonbase or something then it might well be that oxygen would cost something. Much like how there isn't any reason you have to pay for food in principle. It could become so cheap and easy to produce, say, bread or cheese that it is available everywhere at no nominal cost. So yes, you should. You already do, realistically.
    - inigyou 2mo ago
      If it's zero I'll just buy the entire planets worth of oxygen, please and thank you. That'll be $0.00.
      - roenxi 2mo ago
        I'm sure you're just being silly, but ok. Take what you can. That is pretty much literally how it works. I'm not stopping you.
        inigyou 2mo ago
        Where can I buy oxygen rights?
        roenxi 2mo ago
        I recommend Amazon. You can buy a tanks of the stuff to call your own if you feel like paying someone something. There'd be specialist companies that do bulk oxygen supplies too, a quick search found things like https://www.dswgascylinder.com/product/liquid-oxygen-trailer/ https://www.dswgascylinder.com/product/liquid-oxygen-trailer.... Not a market I'm familiar with. I suppose I'll just add in postscript; your not going to get much out of the conversation if you don't take it seriously. There are people who make great money selling oxygen. It isn't automatically priced at $0. In some hypothetical world where quality oxygen wasn't just floating around in the atmosphere, people would pay for it in the same way they pay for other essentials like food or water. Paying for water is about as crazy as paying for oxygen, they both basically just turn up out of the atmosphere. And there is precedent for a commons essential good becoming more expensive, food used to be something people just picked up off the ground for free. Or hunted down on unclaimed land.
- flammafex 2mo ago
  [dead]

How well do free markets resolve basic problems of resource distribution? Like, say, the tragedy of the commons?

by vkou 2mo ago

How well do free markets resolve basic problems of resource distribution? Like, say, the tragedy of the commons?

Free markets do not resolve the tragedy of the commons. The fix is to not have commons. For example, we are running out of fish in the ocean from overfishing. But there's no shortage of cows and chickens, despite massive consumption of them. The former is the commons, the latter is private property.

deleted 2mo ago
[deleted]
nrr 2mo ago
I fear that this conflates open and closed access with exclusive property rights. It isn't untrue that asserting exclusive property rights on something makes it closed access[0], but there are other mechanisms for achieving closed access of a resource, like enforced regulation. Slightly more formally, an assertion of exclusive property rights is a sufficient condition for something to be closed access, but it isn't necessary. Though, admittedly, that does depend on what one's definition of a free market is. Is it unfettered commerce, consumer protections and suchlike be damned? Is it a system of commerce that ensures equitable access? I'm personally of the mind that, as long as I trade with certificates that bear Caesar's face (or trade with proxies for such certificates, like a MasterCard), he gets to make the rules in exchange for my being able to lean on his legal system to protect my interests, so I find that the equitable access angle is nice. (Likewise, trading with Bitcoin or Ethereum or whatever the in-vogue cryptocurrency is today means that the code makes the rules, and I get to pay for the privilege of having my transactions indelibly entered into the distributed ledger and for the code governing those transactions to be buggy and exploitable. I'm still scratching my head at it.) At the risk of building a strawman here, I'll caution that it's logically inconsistent to expect the state to enforce exclusive rights while also urging that strict regulation of a shared commons is an illegitimate market intervention. -- 0: That is, unless the title holder grants license, but that's a whole other conversation.
- roenxi 2mo ago
  > I'm personally of the mind that, as long as I trade with certificates that bear Caesar's face (or trade with proxies for such certificates, like a MasterCard), he gets to make the rules in exchange for my being able to lean on his legal system to protect my interests, so I find that the equitable access angle is nice. It is a minor point I suppose, but this is the other way round. Because Caesar makes the rules you trade certificates that bear his face. It takes vigour and energy on the part of law enforcement to stop people from moving to private currencies.
  - nrr 2mo ago
    I'm unsure that I agree. History has borne out a lot of evidence that people will jump to other means of paying for things in the face of the local currency collapsing, even in the face of amped up (but nonetheless impotent) enforcement.
- WalterBright 2mo ago
  > that does depend on what one's definition of a free market is Sigh. No need to make up one's own definition. Googling "free market": "A free market is an economic system where prices, wages, and the flow of goods are determined by supply and demand. There is no government control or central planning telling people what to buy, sell, or make. Instead, private choices and voluntary trades drive the economy."
  - nrr 2mo ago
    As it turns out, I'm not making up my own definitions here. The view of a free market being a market with equitable access is attributable to Adam Smith from his Wealth of Nations. He bases his understanding of this freedom on the absence of private rent-seeking and absence of monopoly privilege (though in 1700's vernacular). Henry George in his Progress and Poverty makes similar gestures toward defining a free market this way. Part of the reason why it's important to consider other definitions (and other economic models) is that there is an important result in economics from the 1970's that, more or less, establishes the lack of a guarantee that the demand curve in an aggregate demand model (a macroeconomic model) will slope downward. This makes the aggregate demand model less than useful for a priori arguments about supply and demand in the macro context; they must instead be approached a posteriori. It's also the big reason why I'm uninterested in a colloquial definition that is heavily filtered through von Mises and Friedman.
inigyou 2mo ago
Are you saying I should have to bid for oxygen rights?
- roenxi 2mo ago
  You pay market price for oxygen. It just happens to be 0 right now. There isn't any reason in principle that price can't change (eg, if you want to go underwater getting the oxygen will most certainly cost you something, if you want your air at a certain temperature or humidity that costs you too). If we set up a moonbase or something then it might well be that oxygen would cost something. Much like how there isn't any reason you have to pay for food in principle. It could become so cheap and easy to produce, say, bread or cheese that it is available everywhere at no nominal cost. So yes, you should. You already do, realistically.
  - inigyou 2mo ago
    If it's zero I'll just buy the entire planets worth of oxygen, please and thank you. That'll be $0.00.
    - roenxi 2mo ago
      I'm sure you're just being silly, but ok. Take what you can. That is pretty much literally how it works. I'm not stopping you.
      - inigyou 2mo ago
        Where can I buy oxygen rights?
        roenxi 2mo ago
        I recommend Amazon. You can buy a tanks of the stuff to call your own if you feel like paying someone something. There'd be specialist companies that do bulk oxygen supplies too, a quick search found things like https://www.dswgascylinder.com/product/liquid-oxygen-trailer/ https://www.dswgascylinder.com/product/liquid-oxygen-trailer.... Not a market I'm familiar with. I suppose I'll just add in postscript; your not going to get much out of the conversation if you don't take it seriously. There are people who make great money selling oxygen. It isn't automatically priced at $0. In some hypothetical world where quality oxygen wasn't just floating around in the atmosphere, people would pay for it in the same way they pay for other essentials like food or water. Paying for water is about as crazy as paying for oxygen, they both basically just turn up out of the atmosphere. And there is precedent for a commons essential good becoming more expensive, food used to be something people just picked up off the ground for free. Or hunted down on unclaimed land.
flammafex 2mo ago
[dead]