4 ms·

Just a couple points: Involuntary exchanges also have externalities, both negative and positive. It turns out people prefer voluntary, so the vast majority of e

by webXL 13y ago

Just a couple points: Involuntary exchanges also have externalities, both negative and positive. It turns out people prefer voluntary, so the vast majority of externalities occur under capitalism. Are "slavery, coercion, blackmail, forced options" economic activity? Not if the game is structured to explicitly benefit one side or the other. That's not a voluntary exchange, now is it?

dredmorbius 13y ago
Some involuntary exchanges (taxes, fees, fines, etc.) are structured specifically to address economic externalities. Note that I'm not saying "all", but "some". There are ways of modifying transactions to increase the total social gain. And you'll note that Adam Smith's title was On the Wealth of Nations. Not, say, On the Ever Increasing Wealth of High Net Worth Individuals. His awareness of social issues and concerns in economic activity was much higher than many modern writers who claim to follow him give credit for (though those who've actually read him know better). Are "slavery, coercion, blackmail, forced options" economic activity? How would you construe slave trade, coerced financial transactions, and strong-handed bargaining if not "economic activity"? That's not a voluntary exchange, now is it? anoncowherd had stated "voluntary exchanges are the basis of all economic activity ever." (Emphasis in original). So, you're either tautologically defining "economic activity" as only being purely voluntary transactions, which begs the question of what all this non-economic commerce that's going on should be called, or anoncowherd's statemens was, as I said, flatly false. If you're going to base your defense of free-market capitalism on the presumption of purely voluntary exchanges, you've got some 'splainin' to do. Suggest you read John Perkins, Confessions of an Economic Hit Man while you're at it.
- webXL 13y ago
  Perhaps I should have tried to establish what was meant by "economic activity" before posing my critique. There are many definitions, but I took it to mean the production of wealth. Governments and other coercive institutions do not typically produce wealth. They help create the conditions under which individuals can take risks and occasionally profit. Coercive institutions can take money (or labor) from one person and give that money (or the product) to another in exchange for something (e.g. taxes for roads and a peaceful, secure society and harvested crops for money in the case of slavery), and some would consider that economic activity, but I don't think OP was lumping that in, nor was I.

by webXL 13y ago

dredmorbius 13y ago

Some involuntary exchanges (taxes, fees, fines, etc.) are structured specifically to address economic externalities. Note that I'm not saying "all", but "some". There are ways of modifying transactions to increase the total social gain. And you'll note that Adam Smith's title was On the Wealth of Nations. Not, say, On the Ever Increasing Wealth of High Net Worth Individuals. His awareness of social issues and concerns in economic activity was much higher than many modern writers who claim to follow him give credit for (though those who've actually read him know better). Are "slavery, coercion, blackmail, forced options" economic activity? How would you construe slave trade, coerced financial transactions, and strong-handed bargaining if not "economic activity"? That's not a voluntary exchange, now is it? anoncowherd had stated "voluntary exchanges are the basis of all economic activity ever." (Emphasis in original). So, you're either tautologically defining "economic activity" as only being purely voluntary transactions, which begs the question of what all this non-economic commerce that's going on should be called, or anoncowherd's statemens was, as I said, flatly false. If you're going to base your defense of free-market capitalism on the presumption of purely voluntary exchanges, you've got some 'splainin' to do. Suggest you read John Perkins, Confessions of an Economic Hit Man while you're at it.

webXL 13y ago
Perhaps I should have tried to establish what was meant by "economic activity" before posing my critique. There are many definitions, but I took it to mean the production of wealth. Governments and other coercive institutions do not typically produce wealth. They help create the conditions under which individuals can take risks and occasionally profit. Coercive institutions can take money (or labor) from one person and give that money (or the product) to another in exchange for something (e.g. taxes for roads and a peaceful, secure society and harvested crops for money in the case of slavery), and some would consider that economic activity, but I don't think OP was lumping that in, nor was I.