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We haven't actually given a genuine 'market economy' a chance to prove itself. One critical aspect of this is taxation. We all know that the big multinational c

We haven't actually given a genuine 'market economy' a chance to prove itself. One critical aspect of this is taxation. We all know that the big multinational companies can put their profits somewhere else, where they will not get taxed. In most cases this is fully legal even if it is morally wrong. There is also the matter of subsidy and when the government bails a company out. Old business models get kept running when the invisible hand of the market would have swept them to one side, maybe to allow new business models to take hold. Then there is outright corruption - backhanders to win government contracts. This is not 'letting the market decide'. Even worse there is the likes of Lockheed Martin able to own the government, listen in through NSA on rival contractors bids and win favourable contracts for themselves and the companies they do business with. Then there is the small matter of law. Larger businesses can get away with polluting the environment and running unfair business practices that mean their rivals are not playing on a level playing field. Also, there are costs to business that are not paid for by those businesses. If the taxpayer is expected to pay for the road to an industrial estate on a greenfield site just to get some lousy business to setup in that area then again this is not 'market economy'. Also there are those government services that are sold on the private marketplace. For instance, the market in weather information, e.g. for television news, should be a profitable one, however, if the government's private arm of their weather service - e.g. the UK Met Office - competes in that space then again things are not fair. However you look at it we have not got a 'market economy', we have something corrupt, with cronies and their backhanders rigging the marketplace. It is not free and fair trade. We can forget about 'morality', let's just do things by the book.

eli_gottlieb 13y ago
Real capitalism has never worked "by the book". "The definition of insanity is doing the same thing over and expecting a different result."
- baddox 13y ago
  And how about government? Are we insane to keep trying that as well?
- ekianjo 13y ago
  Have you read his comment ? Or you just wanted to make a blanket statement devoid of sense?
  - eli_gottlieb 13y ago
    Of course I've read it. However, demanding that capitalism work according to how Milton Friedman or anyone else described it is about as effective as demanding that it rain tomorrow, simply because it was forecasted to do so. You're standing there shaking your fist because reality doesn't want to conform to the stories you've told yourself. Or the original poster could be trying to impose his story on reality, in which case I'd have to ask why he thinks that's such a great story in the first place[1]! [1] http://jacobinmag.com/2013/09/dont-mention-the-war/ http://jacobinmag.com/2013/09/dont-mention-the-war/
    - obstacle1 13y ago
      The poster isn't painting capitalism with a broad brush, we're specifically talking about a free market economy. We've never seen how a free market economy actually works because we don't let free market economies form without first destroying them via regulation. We have models which persuasively suggest that a free market economy would be the most efficient possible form of trade, or at least way more efficient than our overrregulated fustercluck. So the poster seems to be saying "jeeze, why don't we try an actual free market economy"! Which seems eminently reasonable to me, and not at all "imposing his story on reality".
      - eli_gottlieb 13y ago
        This is equivalent to saying that criticisms of the Soviet Union have nothing to do with socialism because, "Workers controlling the means of production has never been tried!" Yes it has. If you are going to claim that your desired system has never existed on the face of Earth, then your desired system is a utopian ideal that most likely cannot exist in the real world, or worse, would behave like a standard revolutionary utopia by destroying actually existing societies when you attempt to create it. Oh, wait, that's exactly how neoliberalism behaves. http://en.wikipedia.org/wiki/Actually_existing_capitalism http://en.wikipedia.org/wiki/Actually_existing_capitalism
deleted 13y ago
[deleted]
Brakenshire 13y ago
This is in logical structure very similar to the argument which anti-drug people use to justify further crack-downs. They say 'the punishments are still not severe enough, we must make them stricter, to provide a real disincentive'. There is no end to that argument, they can carry on invoking it until people are being given life sentences for trivial drugs offenses (and beyond). You are also making the mistake of framing all of these issues as part of a grand 'government vs. market' battle. There is no reason why a government cannot provide good public services from a reasonable tax rate, and also avoid corporatism and regulatory capture. In fact, I would say there's almost no connection between the former and latter. The US has a far more pro-market attitude than most of the rest of the Western world, but also has stronger links between private contractors (particularly military contractors) and government than would be acceptable in most of those other countries, and certainly its fair share of regulatory capture, particularly at local and state levels. Within Europe, there are low-tax economies, and there are high-tax economies, and no apparent connection between levels of taxation on the one hand, and on the other hand, economic success, levels of corruption, or poor regulation. These issues are actually a lot more granular, and a lot more complicated, than can be captured by the hope for the righteous and complete victory of one ideological force against another.
- pdonis 13y ago
  There is no reason why a government cannot provide good public services from a reasonable tax rate, and also avoid corporatism and regulatory capture. Yes, there is: governments are run by people, subject to the same incentives as people in any other part of society, including the perverse and misaligned incentives that cause "market failures" in other parts of society. The US has a far more pro-market attitude than most of the rest of the Western world Attitude is not the same as reality. If the US really were more pro-market, instead of just talking like it, we would not have given a massive bailout to the same investment banks that tanked the economy in 2008. (Nor would we have allowed the various regulatory schemes that enabled the crash to happen in the first place.)
  - eli_gottlieb 13y ago
    >Yes, there is: governments are run by people, subject to the same incentives as people in any other part of society, including the perverse and misaligned incentives that cause "market failures" in other parts of society. Then explain the proven successes of state regulatory mechanisms. And no, that doesn't allow explaining them away by trying to pretend they've never happened.
yk 13y ago
So basically you are saying, that capitalism can not tolerate people who cheat out of their self interest, but if only we had the "Austrian New Man" to build a society on, it would work wonderful?
- obstacle1 13y ago
  Unsure of how you inferred all that from the words OP actually wrote. I do not see any proclamations of what capitalism can and cannot tolerate. Just a statement that we've never seen an actual free market, since we regulate the hell out of everything. I did not see anything about an "Austrian New Man", or even the characteristics necessary for market participants. Just a statement that we've never seen an actual free market, since we regulate the hell out of everything.
  - yk 13y ago
    We have seen a lot of deregulation in the past decades, and I do not think that the experience suggests that more capitalism is the way to go. So the OP's argument seems to be, if we just deregulate even more, then - contrary to experience - we get a better system. Which sounds quite similar to the argument Leninists use to defend the Soviet Union. Hence the quip about the "Austrian New Man".
    - obstacle1 13y ago
      > I do not think that the experience suggests that more capitalism is the way to go The point is if you're looking at The Real World, there's no evidence -- pro or con -- for or against a free market system. We've never experienced one. Regulated markets aren't in any sense comparable to an actual free market. Even the smallest regulation in a free market system makes it an entirely different beast. For example if you decide to impose a tariff on a single industry in an economy, that alone will result in massive inefficiency -- and as a result, wealth disparity -- such that the system can't meaningfully be called a 'free market'. At all. It's just a regulated market economy, like we currently have. Hence you can't take mixed economies with varying degrees of 'free-marketness' and infer from those how actual free markets will work. There's the question of whether implementing free markets is even possible. It would certainly take a lot of barricading of human behavior from the market -- is that achievable? I don't know. But the point is we've never tried it, so why not try it before we shoot it down? >contrary to experience The only experience we have is of regulated markets. There's no "contrary to experience" to ascribe to free markets, because we've never experienced free markets. We've theorized free markets. Again, models we've built say free markets would likely be extremely efficient and beneficial for all of us. But we've never seen, empirically, free market anything. As stated above, a mixed economy -- even one that's, like, 99% 'free' or whatever -- isn't at all comparable to a true free market. The smallest of tamperings with a true free market turns it into a completely different beast, when we're looking at things whole-economy scale. >So the OP's argument seems to be, if we just deregulate even more, then - contrary to experience - we get a better system In sum, OP's argument isn't that we should 'deregulate even more'. It's that we've never seen a free market, but should try one. Trying a true free market isn't a matter of 'deregulating more', it's a matter of deregulating entirely. Blank slate, start again.
babesh 13y ago
What about producing products that kill people (the infant formula in China with plastic in it) in the name of higher profit? Free market often causes irreparable harm. What about farming all the fish out of the sea? Another example of the free market. There are some great aspects of the free market and some terrible ones. People have been dealing with these issues for thousands of years. See those Sumerian? scripts proscribing punishment to a carpenter if a house he/she builds collapses.
- babesh 13y ago
  This reminds me of the separate California, floating island ideas. I think the real qualm is what principles those places will work against. Given the actors, they believe in free market all the way. That scares the crap out of me.

eli_gottlieb 13y ago

Real capitalism has never worked "by the book". "The definition of insanity is doing the same thing over and expecting a different result."

baddox 13y ago
And how about government? Are we insane to keep trying that as well?
ekianjo 13y ago
Have you read his comment ? Or you just wanted to make a blanket statement devoid of sense?
- eli_gottlieb 13y ago
  Of course I've read it. However, demanding that capitalism work according to how Milton Friedman or anyone else described it is about as effective as demanding that it rain tomorrow, simply because it was forecasted to do so. You're standing there shaking your fist because reality doesn't want to conform to the stories you've told yourself. Or the original poster could be trying to impose his story on reality, in which case I'd have to ask why he thinks that's such a great story in the first place[1]! [1] http://jacobinmag.com/2013/09/dont-mention-the-war/ http://jacobinmag.com/2013/09/dont-mention-the-war/
  - obstacle1 13y ago
    The poster isn't painting capitalism with a broad brush, we're specifically talking about a free market economy. We've never seen how a free market economy actually works because we don't let free market economies form without first destroying them via regulation. We have models which persuasively suggest that a free market economy would be the most efficient possible form of trade, or at least way more efficient than our overrregulated fustercluck. So the poster seems to be saying "jeeze, why don't we try an actual free market economy"! Which seems eminently reasonable to me, and not at all "imposing his story on reality".
    - eli_gottlieb 13y ago
      This is equivalent to saying that criticisms of the Soviet Union have nothing to do with socialism because, "Workers controlling the means of production has never been tried!" Yes it has. If you are going to claim that your desired system has never existed on the face of Earth, then your desired system is a utopian ideal that most likely cannot exist in the real world, or worse, would behave like a standard revolutionary utopia by destroying actually existing societies when you attempt to create it. Oh, wait, that's exactly how neoliberalism behaves. http://en.wikipedia.org/wiki/Actually_existing_capitalism http://en.wikipedia.org/wiki/Actually_existing_capitalism

deleted 13y ago

[deleted]

Brakenshire 13y ago

This is in logical structure very similar to the argument which anti-drug people use to justify further crack-downs. They say 'the punishments are still not severe enough, we must make them stricter, to provide a real disincentive'. There is no end to that argument, they can carry on invoking it until people are being given life sentences for trivial drugs offenses (and beyond). You are also making the mistake of framing all of these issues as part of a grand 'government vs. market' battle. There is no reason why a government cannot provide good public services from a reasonable tax rate, and also avoid corporatism and regulatory capture. In fact, I would say there's almost no connection between the former and latter. The US has a far more pro-market attitude than most of the rest of the Western world, but also has stronger links between private contractors (particularly military contractors) and government than would be acceptable in most of those other countries, and certainly its fair share of regulatory capture, particularly at local and state levels. Within Europe, there are low-tax economies, and there are high-tax economies, and no apparent connection between levels of taxation on the one hand, and on the other hand, economic success, levels of corruption, or poor regulation. These issues are actually a lot more granular, and a lot more complicated, than can be captured by the hope for the righteous and complete victory of one ideological force against another.

pdonis 13y ago
There is no reason why a government cannot provide good public services from a reasonable tax rate, and also avoid corporatism and regulatory capture. Yes, there is: governments are run by people, subject to the same incentives as people in any other part of society, including the perverse and misaligned incentives that cause "market failures" in other parts of society. The US has a far more pro-market attitude than most of the rest of the Western world Attitude is not the same as reality. If the US really were more pro-market, instead of just talking like it, we would not have given a massive bailout to the same investment banks that tanked the economy in 2008. (Nor would we have allowed the various regulatory schemes that enabled the crash to happen in the first place.)
- eli_gottlieb 13y ago
  >Yes, there is: governments are run by people, subject to the same incentives as people in any other part of society, including the perverse and misaligned incentives that cause "market failures" in other parts of society. Then explain the proven successes of state regulatory mechanisms. And no, that doesn't allow explaining them away by trying to pretend they've never happened.

yk 13y ago

So basically you are saying, that capitalism can not tolerate people who cheat out of their self interest, but if only we had the "Austrian New Man" to build a society on, it would work wonderful?

obstacle1 13y ago
Unsure of how you inferred all that from the words OP actually wrote. I do not see any proclamations of what capitalism can and cannot tolerate. Just a statement that we've never seen an actual free market, since we regulate the hell out of everything. I did not see anything about an "Austrian New Man", or even the characteristics necessary for market participants. Just a statement that we've never seen an actual free market, since we regulate the hell out of everything.
- yk 13y ago
  We have seen a lot of deregulation in the past decades, and I do not think that the experience suggests that more capitalism is the way to go. So the OP's argument seems to be, if we just deregulate even more, then - contrary to experience - we get a better system. Which sounds quite similar to the argument Leninists use to defend the Soviet Union. Hence the quip about the "Austrian New Man".
  - obstacle1 13y ago
    > I do not think that the experience suggests that more capitalism is the way to go The point is if you're looking at The Real World, there's no evidence -- pro or con -- for or against a free market system. We've never experienced one. Regulated markets aren't in any sense comparable to an actual free market. Even the smallest regulation in a free market system makes it an entirely different beast. For example if you decide to impose a tariff on a single industry in an economy, that alone will result in massive inefficiency -- and as a result, wealth disparity -- such that the system can't meaningfully be called a 'free market'. At all. It's just a regulated market economy, like we currently have. Hence you can't take mixed economies with varying degrees of 'free-marketness' and infer from those how actual free markets will work. There's the question of whether implementing free markets is even possible. It would certainly take a lot of barricading of human behavior from the market -- is that achievable? I don't know. But the point is we've never tried it, so why not try it before we shoot it down? >contrary to experience The only experience we have is of regulated markets. There's no "contrary to experience" to ascribe to free markets, because we've never experienced free markets. We've theorized free markets. Again, models we've built say free markets would likely be extremely efficient and beneficial for all of us. But we've never seen, empirically, free market anything. As stated above, a mixed economy -- even one that's, like, 99% 'free' or whatever -- isn't at all comparable to a true free market. The smallest of tamperings with a true free market turns it into a completely different beast, when we're looking at things whole-economy scale. >So the OP's argument seems to be, if we just deregulate even more, then - contrary to experience - we get a better system In sum, OP's argument isn't that we should 'deregulate even more'. It's that we've never seen a free market, but should try one. Trying a true free market isn't a matter of 'deregulating more', it's a matter of deregulating entirely. Blank slate, start again.

babesh 13y ago

What about producing products that kill people (the infant formula in China with plastic in it) in the name of higher profit? Free market often causes irreparable harm. What about farming all the fish out of the sea? Another example of the free market. There are some great aspects of the free market and some terrible ones. People have been dealing with these issues for thousands of years. See those Sumerian? scripts proscribing punishment to a carpenter if a house he/she builds collapses.

babesh 13y ago
This reminds me of the separate California, floating island ideas. I think the real qualm is what principles those places will work against. Given the actors, they believe in free market all the way. That scares the crap out of me.