4 ms·

> Markets also, it's become very increasingly apparent, have very substantial externalities, both positive and negative, which lead to increasing distortions of

> Markets also, it's become very increasingly apparent, have very substantial externalities, both positive and negative, which lead to increasing distortions of underallocation to behaviors in which positive externalities are prevalent (e.g., free software, public education, universal healthcare) In other words: "Because there are externalities, the negative ones will outweigh the positives"? Why would that be? You say public education and public healthcare would be good things, but won't you please think of the "externalities"!?!? Here's a simple question with profound implications: How prudently do people use other people's money? Here's another: If people can't be fired, will they strive to do a good job anyway? Why does education need to be public? Is there something you couldn't be taught by a private school? > A problem of capitalism is that the same self-interested motives which can be harnessed for productive activity can equally be harnessed for activities which provide private benefit but social costs (see negative externalities above). So they can, but that won't change. No matter how much Coercion you throw around, there will always be some people who don't give a fuck about other people, or nature, or whatever. On the other hand, self-interest can also guide people towards minimizing externalities. For example, Apple knows its customers don't want nature to get raped, so they go through a lot of trouble to produce computers in a "greener" way. > Written by someone who's either never heard of, or is unable to admit, slavery, coercion, blackmail, forced options, and other circumstances in which decisions are made under duress or lack of any feasible alternative. Well, I didn't say that voluntary exchanges constitute all economic activity ever. On top of that basis, there's room for non-voluntary exchanges too. The point was that an economy is a massive "network" of voluntary exchanges. But I don't think coercion is relevant here. For example, it's safe to assume that slavery or blackmail have nothing to do with any of the exchanges you've made in your life. > Not if the game is structured to explicitly benefit one side or the other. E.g., "contracts of adhesion", monopoly provision of communications or broadband services, toll authorities, agribusiness conglomerates structuring "intellectual property" laws to forbid saving and planting of seed grain, eternal copyright extension, etc., etc. What do you think the source of these particular problems might be? Hint: It's not Capitalism. What might it be that "structures" "the game"? > Identified problems in one area of a practice doesn't mean a freedom from problems and conflicts elsewhere. So your conclusion is largely moot and void. I can't tell what you mean by that. But here's a mysterious statement right back at you: Humanity involves intractable problems.

dredmorbius 13y ago
In other words: "Because there are externalities, the negative ones will outweigh the positives"? In a rational market, the skew will be toward increasing negative externalities and away from positive externalities. That is: the market exacerbates the problem. How prudently do people use other people's money? That generalizes to "how well do people make decisions affecting others". Free-market capitalism optimizes for the "spending your own money" part of this, but as we've already discussed, not the "taking into consideration others' costs". Money is simply a subset of this. Traditionally, in cultures with a stable economic base (that is, not radically growing or shrinking, and with a relatively stable technological level), much of this is determined by custom, taboo, and institution, where the overall goal is stability. Much of the response of Smith, Ricardo, and the Age Enlightenment generally, was to a world in which the underlying resource base had substantially expanded (first from coal, then with the addition of oil and natural gas), with resulting massive shifts in technology, the economy, customs, and institutions. Free market capitalism was, in many ways, a response to be able to make more effective (and rapid) use of this resource base. Countries which resisted were "backwards" (though stable). Japan would be a case in point, characterized as indolent and lazy at the beginning of the 20th century (already over 40 years after the end of Sakoku). Ultimately, however, most countries found they had to accept the game, at least in part, merely to stay even and/or sovereign. For more on management through bottom-up or top-down methods for long-term survival, see Jared Diamond's _Collapse_, in particular chapter 9. Effectively they address your question, optimized for social survival, not individual wealth. No matter how much Coercion you throw around, there will always be some people who don't give a fuck about other people, or nature, or whatever. You can avoid giving them legal sanction, which is a damned good first step. Well, I didn't say that voluntary exchanges constitute all economic activity ever. ORLY? "voluntary exchanges are the basis of all economic activity ever". I mean, you're more than welcome to admit you were wrong. I prefer to make a practice of not insisting on being wrong myself, but that's just me. For example, it's safe to assume that slavery or blackmail have nothing to do with any of the exchanges you've made in your life. You'd be wrong. Slavery indirectly, blackmail directly. Regarding the former, one of many citations: http://www.washingtonpost.com/wp-srv/inatl/longterm/china/stories/prison060397.htm http://www.washingtonpost.com/wp-srv/inatl/longterm/china/st... What do you think the source of these particular problems might be? (Referring to "the game is structured to explicitly benefit one side or the other."). My point is that these effects are endemic to the modern capitalist system, and are often championed by it. I'll note that Adam Smith himself argued for significant involvement on the one hand by governments to prevent such abuses, as well as a propensity for governments to be engaged by commercial interests in exacerbating them. Later pretenders to capitalism and in particular laissez-faire principles (which Smith never discusses and didn't endorse) make the problem rather markedly worse. I'd chalk the problem up generally to the tendency of power to accumulate and consolidate, regardless of whether you're discussing political, corporate, military, communications, or social power. It's that old Iron Law of Oligarchy. The problem as exemplified in the present market-capitalist-financial system is that it fails to acknowledge or address the problem. It's less a specific fault of capitalism than a general fault which it doesn't resolve. And it's a fault which can well destroy it (as Marx noted -- his diagnoses were insightful, I disagree with his prescriptions, however). I can't tell what you mean by that. Noting that one fault of capitalism (crony capitalism) doesn't mean it's fatally flawed, doesn't mean it isn't fatally flawed. Humanity involves intractable problems. Oh, they're tractable. You just may not care for the tracks. Or as GE CEO Jeffrey Immelt said: "We know what the solution is. We don't like it."

dredmorbius 13y ago

In other words: "Because there are externalities, the negative ones will outweigh the positives"? In a rational market, the skew will be toward increasing negative externalities and away from positive externalities. That is: the market exacerbates the problem. How prudently do people use other people's money? That generalizes to "how well do people make decisions affecting others". Free-market capitalism optimizes for the "spending your own money" part of this, but as we've already discussed, not the "taking into consideration others' costs". Money is simply a subset of this. Traditionally, in cultures with a stable economic base (that is, not radically growing or shrinking, and with a relatively stable technological level), much of this is determined by custom, taboo, and institution, where the overall goal is stability. Much of the response of Smith, Ricardo, and the Age Enlightenment generally, was to a world in which the underlying resource base had substantially expanded (first from coal, then with the addition of oil and natural gas), with resulting massive shifts in technology, the economy, customs, and institutions. Free market capitalism was, in many ways, a response to be able to make more effective (and rapid) use of this resource base. Countries which resisted were "backwards" (though stable). Japan would be a case in point, characterized as indolent and lazy at the beginning of the 20th century (already over 40 years after the end of Sakoku). Ultimately, however, most countries found they had to accept the game, at least in part, merely to stay even and/or sovereign. For more on management through bottom-up or top-down methods for long-term survival, see Jared Diamond's _Collapse_, in particular chapter 9. Effectively they address your question, optimized for social survival, not individual wealth. No matter how much Coercion you throw around, there will always be some people who don't give a fuck about other people, or nature, or whatever. You can avoid giving them legal sanction, which is a damned good first step. Well, I didn't say that voluntary exchanges constitute all economic activity ever. ORLY? "voluntary exchanges are the basis of all economic activity ever". I mean, you're more than welcome to admit you were wrong. I prefer to make a practice of not insisting on being wrong myself, but that's just me. For example, it's safe to assume that slavery or blackmail have nothing to do with any of the exchanges you've made in your life. You'd be wrong. Slavery indirectly, blackmail directly. Regarding the former, one of many citations: http://www.washingtonpost.com/wp-srv/inatl/longterm/china/stories/prison060397.htm http://www.washingtonpost.com/wp-srv/inatl/longterm/china/st... What do you think the source of these particular problems might be? (Referring to "the game is structured to explicitly benefit one side or the other."). My point is that these effects are endemic to the modern capitalist system, and are often championed by it. I'll note that Adam Smith himself argued for significant involvement on the one hand by governments to prevent such abuses, as well as a propensity for governments to be engaged by commercial interests in exacerbating them. Later pretenders to capitalism and in particular laissez-faire principles (which Smith never discusses and didn't endorse) make the problem rather markedly worse. I'd chalk the problem up generally to the tendency of power to accumulate and consolidate, regardless of whether you're discussing political, corporate, military, communications, or social power. It's that old Iron Law of Oligarchy. The problem as exemplified in the present market-capitalist-financial system is that it fails to acknowledge or address the problem. It's less a specific fault of capitalism than a general fault which it doesn't resolve. And it's a fault which can well destroy it (as Marx noted -- his diagnoses were insightful, I disagree with his prescriptions, however). I can't tell what you mean by that. Noting that one fault of capitalism (crony capitalism) doesn't mean it's fatally flawed, doesn't mean it isn't fatally flawed. Humanity involves intractable problems. Oh, they're tractable. You just may not care for the tracks. Or as GE CEO Jeffrey Immelt said: "We know what the solution is. We don't like it."