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How free are

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How free are

Fried Egg
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Posted 04/16/08 - 03:13 AM: Subject: How free are free markets?	#1
There is clearly disagreement with regards to the nature of freedom within a market driven economy. Some (like myself) regard economic freedom as an essential pre-requisite for liberty but others regard it as either illusionary or a trade of with social freedoms. So how free is a "free" market? And in what ways is it free? It is helpful to start with a clear definition of what I mean by a free market. I will use that as proposed by Mises, in that it assumes the following: (1) The private ownership (control) of the means of production (2) The division of labor and the consequent voluntary market exchanges of goods and services (3) No institutional interferences with the operation of the market processes which generate prices, wage rates and interest rates which reflect the actual conditions of supply and demand for all goods and services (4) A government, the social apparatus of coercion and compulsion, which is intent on preserving market processes while protecting peaceful market participants from the encroachments of those who would resort to the threat or use of force or fraud. I realise that this is the ideal and only partially reflected (at best) in markets we see in the world at the moment. But I am interested here in exploring how free markets are in principle, without regards to practical problems that their running might encounter. In considering the merits of a free market, it would be useful to compare it to possible alternative states of social organisation. One can imagine a social system ommitting any one (or more) of the above components. If we ommit the first component, we must by implication also ommit the third component because there will be no prices to meddle with. Such a system would require some form of centralised control over the use of resources and the allocation of the factors of production. Call this a centrally planned or socialist economy. If we ommit the second component, we revert to some form of autarkic system of social organisation in which there is no exchange of goods and ideas. Each person/familly or community lives in economic isolation from each other. Ommitting the third component and we have what the form of social organisation that we see in prevelence in the world today. Institutional interference takes place to greater or lesser extents. Call it interventionism. If we ommit the fourth component, we essentially have some form of anarchy. The extent to which from the markets themselves might arise institutions that fulfil the same or similar function is a matter for debate. I'm inclined to believe that it wouldn't and therefore we would no longer have a properly operating market. So, in what way is a "free" market free? People have often lammented the fact that economic pressure often forces people to accept jobs that they would prefer not to do. If your natural abilities or skills were lacking, or the scarcity of employment opportunities was high, the kind of job you might be oblidged to accept (to avoid starvation) might be extremely unpleasant. There undoubtledly exists such pressures in a free market and no one can argue that a free market would in anyway alleviate these pressures. But in what way are the other systems of social organisation any better? A free market system, the emergent price structure reflecting the relative scarcity of goods, exerts a pressure on market participants to align their productive activities accordingly. If the price of one good rises, it reflects it's increased scarcity which exerts a pressure on the market to economise it's use. It also exerts a pressure on the structure of production to adjust accordingly (by producing more of this good, less of something else). Market participants do not have to bow to this pressure. They can allow their activities to diverge from the market's most urgent ends if they can bear the financial penalty incurred. A highly paid structural engineer, for instance, might be able to afford to give up his career so he can become an artist. If he is willing to bear the fall in income attached to adopting a less urgent role in the economy, there is nothing else stopping him. Most people find that there are an array of possible roles in which they could afford to earn a living. Some they enjoy more than others and not necessarilly those that pay more. Within this limited scope there is a freedom of a sorts. It may not seem like much, but what are the alternatives? In a centrally planned or socialist economy, there are no prices that guide the allocation of the factors of production. These factors must be organised by some form of planner or planning committee. They must allocate the roles by which everyone must perform. There is no room for negotiation, no freedom in determining one's place in the division of labour. It must be decided for you, after appraising your abilities and the needs of the economy, by the planners. I'm not even going to touch upon the problem of calculation without market prices. In an autarkic society, things are even worse. Subsitence living would require each individual (or social unit) to carry out all the roles required for their survival. Without the massive increases in productivity that division of labour brings about, the rewards for such work would be minimal and the hours long. Little or no opportunity for ever doing anything through choice. Little or no time for leisure. In an interventionist system, it might be tempting to believe that the pressures exerted by the price structure in a free market system can be somewhat mittigated. But is it reasonable to assume that these pressures can be alleviated for some without likewise increasing them for others? It must also be borne in mind that interfering with the price structure of markets must innevitably disrupt the very mechanism by which the market allocates the factors of production. As for an anarchic society, I am going to ignore this option for now. Mainly because I don't want to get drawn into a minarchist/anarchist debate. Suffice to say that if the mechanism for coercively protecting market institutions and property rights were not in place, such a society would be a fearful place to live in. Anything you had or earned you would be in constant fear of it being taken from you by someone with the might to do so. In conclusion I would say that whilst the free market system is not perfectly free by any stretch of the imagination, it compares favourably with the altnernatives on offer. Also, we must always bear in mind that any measures that free the individual from tyranny or pressures of social organisation must therefore hinder the effectiveness of that social organisation and the benefits reaped by the individuals therein. A free market strikes a balance between individual freedom and effective social organisation. It provides a mechanism that serves to align the factors of production without authoritarian control.

Glypt
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Posted 04/16/08 - 05:15 AM: Subject: Recent events	#2
Before we get carried away with economic theory it is worth noting certain failures of the so-called free market. I've come across and pasted below a short article in the Guardian which helps to contextualise certain facts of the matter, which I suspect affects us all. "This free-market farce proves the state is crucial" By Ulrich Beck (Ulrich Beck is professor of sociology at Munich’s Ludwig-Maximilian University and the London School of Economics, and author of Power in the Global Age.) Economies in crisis (Guardian Headline) : The massive global risk of an unfettered financial system is now being felt, thanks to its dogmatists' blinkered irresponsibility The Play. Act one: Chernobyl. Act two: the threat of climate change. Act three: 9/11. Now the curtain is rising on Act four: Global Financial Crises. For a backdrop, see yesterday's headlines: IMF slashes world growth forecast; Credit crisis could cost $1 trillion. Dramatis personae are the Hardcore Neoliberals, who in the face of the danger have overnight converted from the market faith to the state faith. Now they're praying, begging, pleading for the mercy of the state interventions and multi-billion pound handouts of tax payers' money - the sort of thing they condemned for as long as the profits were pouring in. What a priceless convert's comedy is being performed on the world stage. If only it weren't tinged with the bitter taste of reality. Here's John Lipsky, a senior official and economist of the International Monetary Fund and longstanding market fundamentalist, who in a dramatic appeal is suddenly urging the governments of the fund's member states to sign up to the antithesis of everything he has previously preached: prevent a world economic crash with massive rescue spending. When even John Lipsky is urging politicians to "think the unthinkable", the gravity of the crisis is plain. The spectre of the "unthinkable", which is now being raised everywhere, is of course supposed to awaken memories of the world economic crises of the last century - and save the banks from disaster. Next Joseph Ackermann of Deutsche Bank appears and admits that he, too, no longer believes in the self-healing powers of the markets. Before you know it, there he is retracting his retraction and insisting that he has no doubts about the stability of the financial system. That sounds reassuring. Or does it? If the respected banker were being frank then he would have to concede two things. First, that the history of the present crisis is a history of market failure, and second, that perplexity, or indeed sheer ignorance, dominates on all sides. The market has failed, because the incalculable risks of mortgages and other loans were deliberately concealed in the expectation that the distribution and concealment of the risks would minimise them. Now, however, it is -evident that this minimisation strategy has turned into its opposite: a maximisation and dissemination strategy of incalculable risks. Suddenly the risk virus is everywhere, at least in anticipation. It's clear that things can't go on without the state's guiding hand. At the same time, it is unclear whether things will be any better with the injection of billions of pounds, euros or dollars of taxpayers' money. Of course, economic risks and crises are as old as the markets themselves. And as the Great Crash of 1929 testifies, financial collapse can bring down political systems - for example the Weimar Republic in Germany. It is all the more surprising then, that since the 1970s the financial institutions of the Bretton-Woods system, established after the second world war, which were intended as global-political responses to global economic risks, have been systematically dismantled and replaced by a succession of ad hoc solutions. Thus we face a kind of paradox: while markets have never been more liberalised and global, the global institutions that monitor their activities have been forced to accept drastic reductions in power. This new, unlimited nature of markets means we cannot exclude the possibility of a world financial crisis on the scale of 1929. Unlike environmental and technological risks, whose physical consequences initially become socially relevant "from outside", financial risks also directly affect a social structure. Hence financial risks can be more easily "individualised" and "nationalised", giving rise to major differences in perceptions of risks. In other words, even when there are catastrophic breakdowns, it is individuals, usually the weakest, who suffer, in their millions. Accordingly global financial risks - not least when it comes to the perception of causes - are attributed as national risks to individual countries or regions. As the "Asian crisis", the "Russian crisis", the "Argentinean crisis" - and now the first signs of the "American crisis" - demonstrate, it is the middle classes who are worst hit. Waves of bankruptcies and job losses shake the respective regions. Yet almost invariably, western investors and commentators view the crises exclusively from the perspective of the threat posed to financial markets. Global financial risks, like global ecological crises, cannot be confined to the economic subsystem. They mutate into social upheavals triggering political threats and breakdowns. In the case of the Asian crisis, such a chain reaction destabilised states and simultaneously led to outbreaks of violence against minorities, who were cast as scapegoats. What would have seemed inconceivable only a few years ago is now emerging as a real possibility; even advocates of a global free market now detect that, after the collapse of communism, only one opponent of the free market remains, namely the unbridled free market itself. The market has shrugged off any responsibility for democracy and society in the exclusive pursuit of short-term profit maximisation. There are surprising parallels between the Chernobyl reactor disaster, the Asian financial crisis and the threat of the collapse of the international financial system today. The traditional methods of management and control are proving unreliable and ineffective in the face of global risks. The millions of unemployed and poor cannot be financially compensated; it makes no sense to insure against the consequences of global recession. At the same time the social and political explosive force of global market risks is becoming palpable. Governments are overthrown, civil wars become a threat. As the public begins to recognise the risks, the question of responsibility is increasingly raised. This dynamic leads to a reversal of neoliberal policy - not the economisation of politics, but the politicisation of the economy. Not even the most liberal national economy functions without macroeconomic coordinates. It's with a certain degree of bewilderment that one asks oneself: how could anyone in his right mind assume that the world economy is any different?

Fried Egg
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Posted 04/16/08 - 06:17 AM:	#3
Glypt Well, the above is certainly an interpretation of recent events. However there is at least one critical factual mistake that the above article makes. It claims that markets have never been more liberalised and that we have an "unbridled free market". If you cast your eye once more over the four conditions of a free market, it should be clear to almost anyone that point three is most definitely absent. We have a degree of interventionism in the economy at probably unprecedented levels. What has declined over recent years is government ownership/control over the means of production. However even this condition isn't entirely met. It is perfectly reasonable to ask the question, is it free markets or interventionism that is to blame? In order to determine which it is, one would need to explain how such a crisis could be caused by a strictly free market or how particular interventions may be the cause. The sad fact is, because so many people mistakenly assume that we live in an age of unbridled capitalism and unrestricted markets, that it is free market capitalism itself that must be at fault. Consequently, a leap to the left may well ensue. The same thing happened after the great crash in '29 where popular consensus was that the markets had failed. The recent credit crisis should certainly give us all food for thought. But we must be careful that we correctly analysise the problem and don't make any rash or false assumptions.

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Posted 04/16/08 - 06:29 AM:	#4
Fried Egg, If you read the first lines if my previous message you will see that it is in fact you that should pay attention to what you read before you make assumptions as to meaning. As to it being an interpretation I should stress that this interpretation is by a well respected professor of two world class universities, and it is clear that he identifies the source of the intervention in the current freedom of the market as coming from privatised players in the market place itself. "...even advocates of a global free market now detect that, after the collapse of communism, only one opponent of the free market remains, namely the unbridled free market itself. The market has shrugged off any responsibility for democracy and society in the exclusive pursuit of short-term profit maximisation." (Beck) Now you are going to tell me that maximising profit constitutes outside intervention are you? Or would one be right to suppose that it is the reason d'etre of the freemarket economies? You can't have both ways either the market is left to its own devices in which case it generates an autopoeitic culture based upon greed or it regulated in some way or other that allows for social responsibility. Edited by Glypt on 04/16/08 - 07:03 AM

Fried Egg
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Posted 04/16/08 - 06:41 AM:	#5
Glypt My criticism was aimed only at the article, not at you for posting it. I'm sorry if I caused offense.

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Posted 04/16/08 - 07:17 AM:	#6
Fried Egg wrote: Glypt My criticism was aimed only at the article, not at you for posting it. I'm sorry if I caused offense. I'm not offended, but I appreciate your concern, thank you.

Fried Egg
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Posted 04/16/08 - 08:18 AM:	#7
Glypt As to it being an interpretation I should stress that this interpretation is by a well respected professor of two world class universities, and it is clear that he identifies the source of the intervention in the current freedom of the market as coming from privatised players in the market place itself. Which is why I'm suprised that a "well respected professor of two world class universities" would make such an obvious factual mistake as to claim that we have an "unfettered financial system" or that we live in an "unbridled free market". Since he believes there is (or was) no institutional interference in the market, it is hardly suprising that he he identifies the current problems as having arisen from within the market itself. Now you are going to tell me that maximising profit constitutes outside intervention are you? Or would one be right to suppose that it is the reason d'etre of the freemarket economies? You can't have both ways either the market is left to its own devices in which case it generates an autopoeitic culture based upon greed or it regulated in some way or other that allows for social responsibility. There is nothing wrong with profit maximisation as such. If one refers back to my brief description of how the price structure serves to direct the factors of production to the market's most urgent uses, it should be clear that in such a situation (an ideally functioning market), a tendency to maximise profit will lead individuals to better align their productive activities and to economise those goods that become more scarce. In this scenario, profit maximisation is perfectly aligned with the interests of the market. Perhaps this was not the case in our current crisis. In the case of the global credit crisis, the risk attached to large volumes of credit was mis-appraised. Either this is a case of a cluster of entrepeneurial fraud or error. If it was fraud, then condition four of a free market was not fully present and functioning as it should be. If it was error, then we need to look to business cycle theories in order to explain why judgements erred across the market in such a coincidal fashion. Austrian Business Cycle Theory offers the most effective explanation that I know of and lays the cause of squarely with institutional interference in one area of the market which have not been liberalised for as long as government's have had the ability to control it; namely the money supply. You may not share my confidence in explanatory power of ABCT but it is worthy of note that a number of regarded mainstream economists are laying the blame for this crisis with the central bank's mismanagement of monetary policy: http://www.marginalrevolution.com/marginalrevolut... I also have set out in this thread how I believe that the expansionary monetary policy of central banks is essentially working against the activities of the financial regulators. The success of one will thwart the efforts of the other.

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Posted 04/16/08 - 08:34 AM:	#8
Fried Egg wrote: I will use that as proposed by Mises, in that it assumes the following: (1) The private ownership (control) of the means of production You would acknowledge that such ownership, must be validated and protected. Fried Egg wrote: (2) The division of labor and the consequent voluntary market exchanges of goods and services You would acknowledge that such division is largely driven by prior capital ownership or privilege, if not what mechanism determines how labour is divided in order to serve the market? Fried Egg wrote: (3) No institutional interferences with the operation of the market processes which generate prices, wage rates and interest rates which reflect the actual conditions of supply and demand for all goods and services Such a theory does not make enough contingent space for events and agencies outside economic theory, such as environmental issues, unethical practices that jeapardise the market, or bring trust in the market into question...(game theory...prisoners dilemma etc) Fried Egg wrote: (4) A government, the social apparatus of coercion and compulsion, which is intent on preserving market processes while protecting peaceful market participants from the encroachments of those who would resort to the threat or use of force or fraud. Either you are positing that the government is depicted as part of this market, in which case such regimes themselves are ripe for corruption or the government is an outside regulator in which case it could not be said to be a free market in the sense I've assumed you to mean.

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Posted 04/16/08 - 08:51 AM:	#9
Glypt You would acknowledge that such ownership, must be validated and protected. ... Either you are positing that the government is depicted as part of this market, in which case such regimes themselves are ripe for corruption or the government is an outside regulator in which case it could not be said to be a free market in the sense I've assumed you to mean. It would appear then, that your assumption as to what I regard as a free market was not correct. You would acknowledge that such division is largely driven by prior capital ownership or privilege, if not what mechanism determines how labour is divided in order to serve the market? First it is important to look at what drives capital ownership. In a properly functioning market, the consumer directs use of capital and the holders/owners of capital are subject to the same pressures that the price structure exerts on everyone else; in that they are financially penalised/rewarded when they allow their capital to be used to serve the market's most urgent ends. The exetent to which the consumer can be influenced/pursuaded to buy what the producers produce is a matter for debate, but suffice to say that if the consumer is not happy with what the capital owners have produced, they will be penalised and their capital holdings will diminish. Conversely, the capital owners who the consumers are happy with will be rewarded and may increase their capital holdings. With this in mind, it does not appear quite so bad that the holders of capital direct the division of labour because they themselves are subservient to the wishes of the consumer. Such a theory does not make enough contingent space for events and agencies outside economic theory, such as environmental issues, unethical practices that jeapardise the market, or bring trust in the market into question...(game theory...prisoners dilemma etc) Well, perhaps not. And this is probably the most contentious point with regards to markets today. Exactly how and to what extent should the process of the market be interfered with?

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Posted 04/16/08 - 08:59 AM:	#10
Fried Egg wrote: Glypt Which is why I'm suprised that a "well respected professor of two world class universities" would make such an obvious factual mistake as to claim that we have an "unfettered financial system" or that we live in an "unbridled free market". Since he believes there is (or was) no institutional interference in the market, it is hardly suprising that he he identifies the current problems as having arisen from within the market itself. No you miss the point. He makes no mistake here. If you read it again I'm sure will see. He doesn't have to argue with you, you see. Events themselves prove the case , it is empirically demonstrated, we have all witnessed it, we all will pay for it, that whether fettered or unfettered the markets have "...shrugged off any responsibility", and publicly financed institutions such as the Bank of England had to step in after the event to sustain the so-called free market.. Edited by Glypt on 04/16/08 - 09:21 AM

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Posted 04/16/08 - 09:18 AM:	#11
Glypt He is saying that too, I agree. I was just point out the factual mistakes that he also made. But anyway, if fraud was taking place (as Beck alledges), the people resonsible should be prosecuted. More crucially, if the "social apparatus of coercion and compulsion" were doing it's job properly, they would have been prosecuted well before calamity took it's course. Anyway, whether or not they were being deceitful or merely misguided, we should not ignore the implications of the expansionist monetary policy of the central banks. It was their deliberate policy to flood the markets with cheap credit, cheaper than real economic conditions allowed for. It is hardly suprising that some people would end up borrowing when they really couldn't afford it.

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Posted 04/16/08 - 11:34 AM:	#12
Fried egg, requirement 4. seems to demand an ideological commitment that the freedom of the market has already discounted. Also, how is a government to avoid intervening in the market to set the price of, for example a policeman or soldier? The government has the monopoly on coercion, it seems, but such superhuman restraint that it does not ever intervene in the operation of the market. Where do we recruit these paragons of political virtue - and of course, how much must we pay them?
_____________________ The observer is the observed. J Krishnamurti "Philosophy, to the Philistine, is an evolutionary process, watched over by some sort of brisk dynamic Providence, and culminating in the supreme insight of modern thought." John Cowper Powys

keda
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Posted 04/16/08 - 12:22 PM:	#13
Fried Egg wrote: Which is why I'm suprised that a "well respected professor of two world class universities" would make such an obvious factual mistake as to claim that we have an "unfettered financial system" or that we live in an "unbridled free market". Since he believes there is (or was) no institutional interference in the market, it is hardly suprising that he he identifies the current problems as having arisen from within the market itself. There should be no surprise given that monopolies tend not to come alone, including monopoly of truth. Haven't you noticed the increase of factual errors in the media since, in reverse proportion to the intelligence quotient, that is dropping, and in reverse proportion to the number of media corporations, which has dropped drastically to only a few. Haven't you heard of the CFR? The market is free like a cow is free, and when one wonders why it produces no milk, then the answer is, it does, but the cow is being milked. In an unfree market, you are a slave. Your labour cost less to the aggressor, who would otherwise have to pay more, because your choice to sell it is relatively more preferable to the alternatives, which due to the agreessor's coersive actions were diminished, thereby increasing its supply, and lowering its market value. When one wonders why jobs no longer pay for the food, it is, because all the alternatives, except the least preferable jobs were destroyed through coersion, in the same manner a cow is being confined only to produce milk. Like in the dystopia of brave new world, we have consented to the worst of conditions, and we call it free market, because the cows cannot see the green fields where they would rather be. Unlike the cows we who feel the distress, but like the cows cannot even understand how the cause is suppose to connect with the effect, blame the free market, because everyone has been led to believe, that is what we have, and are now begging for more slavery, to save us from the horrors of responsibility, the horrors of freedom, that they have been taught to hate. Bertrand Russel's and HG Wells' prophecy of the split of our species in two is about to come true, where a revolt has been made as impossible like one of sheeps against the practice of eating mutton. For once the remnants of the middle class is finally destroyed world wide, the gap between the rich and the poor will grow permanent and the means of revolt no longer exist. Wealth is never destroyed, merely transfered, into the hands of a few central bankers who already own more than half of the planet. My participation in this forum has been a painful experience of the fact that, people are not longer able to think for themselves. The only form of argument they know is that of citing authorities. To anyone without this ability, it is a hall of mirrors. For them, there is no objective reality except the one you choose to side with, and after that there is only us-against-them form of mentality that drives them. It all comes down to this question by Fried Egg: Fried Egg wrote: It is perfectly reasonable to ask the question, is it free markets or interventionism that is to blame? In order to determine which it is, one would need to explain how such a crisis could be caused by a strictly free market or how particular interventions may be the cause. And the answer soon to be almost unanomously held by the authorities is to scapegoat the free market again, and the people will believe, whatever the authorities tell them to believe. Without a trial of reason, there is no assurance that anything said has a basis in reality, but like might make right, it thus also makes truth. Fried Egg presents a question that can only be answered by a rational argument, thereby outruling the testimony of authorities, unless you explicitely want to admit your inability to think for yourself.
_____________________ Free Europe Now The man who trades freedom for security does not deserve nor will he ever receive either. -Benjamin Franklin If my sons did not want wars, there would be none - Gutle Rothschild It's not the people who vote that count, it's the people who count the votes - Josef Stalin Sometimes Satan comes as a man of peace - Bob Dylan A prolonged peace favours the predominance of a mere commercial spirit, and with it a debasing self-interest, cowardice, and effeminacy, and tends to degrade the character of the nation. - Immanuel Kant

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Posted 04/17/08 - 12:27 AM:	#14
keda wrote: Fried Egg presents a question that can only be answered by a rational argument, . It can also be answered by the facts of the matter. The model Fried Egg presents isn't without its problems, as rationally explain above and confirmed by empirically verifiable, real life and recent events. keda wrote: unless you explicitely want to admit your inability to think for yourself. Well I think the notion that any of us think for ourselves is absurd given that the tools of our thinking, the procedures of our thinking, the object of our thinking and the inspirations of our thinking. Perhaps you would like to contribute and properly explain in what sense of the word, the markets have not been sustained by emergency interventions and in what sense you are thinking for yourself while the rest of humanity thinks by an association of ideas expressed in some form of sociologically derived language? Alternatively, if you still insist on stating that you 'think for yourself', perhaps you could explain how such a solipisistic and egoistic methodology can cope with the task of being objective when the task in front of you necessitates taking such a stance. Edited by Glypt on 04/17/08 - 12:46 AM

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Posted 04/17/08 - 01:22 AM:	#15
Glypt wrote: keda wrote: Fried Egg presents a question that can only be answered by a rational argument, . It can also be answered by the facts of the matter. The model Fried Egg presents isn't without its problems, as rationally explain above and confirmed by empirically verifiable, real life and recent events. As has been pointed out already by Fried Egg, the article makes a factual mistake. That mistake is crucial to for there to be any possible empirical support for the conclusion of the argument. Well I think the notion that any of us think for ourselves is absurd given that the tools of our thinking, the procedures of our thinking, the object of our thinking and the inspirations of our thinking. Your sentence appears to be incomplete. Perhaps you would like to contribute and properly explain in what sense of the word, the markets have not been sustained by emergency interventions and in what sense you are thinking for yourself while the rest of humanity thinks by an association of ideas expressed in some form of sociologically derived language? Alternatively, if you still insist on stating that you 'think for yourself', perhaps you could explain how such a solipisistic and egoistic methodology can cope with the task of being objective when the task in front of you necessitates taking such a stance. Part of thinking for yourself is questioning all authorities. If someone says something, don't take his word for it, but try to figure out how it could possibly be true what he is saying. Take any proposition and forget what anyone has said on the matter but judge for yourself; with practice you will be able to think like a normal human being, and no, thinking for yourself does not have to involve egoism or solipsism.
_____________________ Free Europe Now The man who trades freedom for security does not deserve nor will he ever receive either. -Benjamin Franklin If my sons did not want wars, there would be none - Gutle Rothschild It's not the people who vote that count, it's the people who count the votes - Josef Stalin Sometimes Satan comes as a man of peace - Bob Dylan A prolonged peace favours the predominance of a mere commercial spirit, and with it a debasing self-interest, cowardice, and effeminacy, and tends to degrade the character of the nation. - Immanuel Kant

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Posted 04/17/08 - 03:15 AM:	#16
keda wrote: As has been pointed out already by Fried Egg, the article makes a factual mistake. That mistake is crucial to for there to be any possible empirical support for the conclusion of the argument. You miss the point entirely, you should read the previous messages again only this time I would respectfully ask you to put to one side your dubious notion that a philosophically sustainable rationale is the same as 'thinking for oneself' which is not the same as attempting to think objectively. I repeat artificially limited subjectivity, solipsistic or egoistic vantagepoints do not allow one to engage meaningful. Let me help you with my earlier observations. In the first place 'the article' is not the empirical verification to which I refer. It couldn't be given what empirical verification actually means. I had hoped that would be obvious. It clearly isn't so I'll spell it out yet again. There have been real life and recent events. That these consitute failures in the market is self evident given the financial system has had to be rescued by, for example the Bank of England. That such taxpayers money, to the tune of £100,000,000,000, and rising, had to fill the failures of market players who were acting irresponsibly or at least imprudently in order to maximise profit is beyond any argument. Both Fried Egg and I have respected each other's interpretation as to the implications one might draw from this. But one thing we are agreed upon are the details of that empiricism. We have to be in agreement because it clearly took place and the effects on my stockholdings and I'm sure yours too will bear further witness. keda wrote: Your sentence appears to be incomplete. The sentence is complete but sadly your comprehension is not. We are all subject to such lapses so I'll deconstruct it for you. The implicature is self evident. I'll give you a hint ...what syntactical structures might we use in order to think? Where, or from what does the objects of our thought derive, is it inside or outside of our perception? Where do we get the inspirations that makes thought necessary? You'll forgive the gentle irony of me helping you to think and you helping me to think, which is a sort of proof that neither of us actually think for ourselves. keda wrote: ...thinking for yourself does not have to involve egoism or solipsism. Mmm...Actually 'thinking for yourself', now I come to think of it, is an oxymoron...at least in the way you depict it. Given that thinking entails input and output of information across a variety of cognitive networks some of which are public and some of which are private. However, even those that are private have extremely limited capacity without ouside contributions. Therefore thinking from just ones own self perceived authority with regard to a perspective stance upon facts about the world is a solipsistic notion, and in the context that we are regarding it, it is irrelevant. Such limited agent-relevance, as 'thinking for oneself' denies objectivity and is has clearly egoistic implications. Of course Nagel makes this even more complex in his book "A view from nowhere" Thanks for your message

litkey
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Posted 04/17/08 - 05:25 AM:	#17
FriedEgg, Fried Egg wrote: (3) No institutional interferences with the operation of the market processes which generate prices, wage rates and interest rates which reflect the actual conditions of supply and demand for all goods and services (4) A government, the social apparatus of coercion and compulsion, which is intent on preserving market processes while protecting peaceful market participants from the encroachments of those who would resort to the threat or use of force or fraud.[/i] Who are these mystery people? I AM LOST! Who are the people that are going to do the "encroaching" and who is using the threat of force? Could we have some examples here please??? - it would come in handy. As far as I can tell from you theory, the people that would be doing the "encroaching" would be those that did not have the means of production, it would be those Individuals that did not have status, wealth, or power -right? No? But, you might retort, the law will be in place to deter and hinder corruption and "fraud", to bring down monopolies that are controlling prices, or forcing people into labour camps with no pay whatsoever...who knows? - there is vagueness written large over point 4. The law currently serves who? In a free market, where there is only "property rights", wouldn't it be a reasonable assessment to say that those with wealth will be protected by the law? Reasonable? Ok, then who are the one's with the wealth? Where are these people? Surely we must place a gold ribbon around business and government...right? Or does your theory envisage a gulf between the two? If so, this needs explaining. It needs explaining because you are not clear (at all) where government ends and where business starts. As it is, if the government is seperate (from business) then you will necessarily need to explain their power- where does it derive? and who does it serve? Why would it serve business ...if it was seperate from it?
_____________________ Develop an interest in life as you see it; the people, things, literature, music - the world is so rich, simply throbbing with rich treasures, beautiful souls and interesting people. Forget yourself. - The aim of life is to live, and to live means to be aware, joyously, drunkenly, serenely, divinely aware. -Henry Miller

keda
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Posted 04/17/08 - 05:42 AM:	#18
Glypt wrote: You miss the point entirely, you should read the previous messages again only this time I would respectfully ask you to put to one side your dubious notion that a philosophically sustainable rationale is the same as 'thinking for oneself' which is not the same as attempting to think objectively. I repeat artificially limited subjectivity, solipsistic or egoistic vantagepoints do not allow one to engage meaningful. Another incomplete sentence. Did you mean to say "engage in a meaningful debate?" In any case, your allusion to egoism and solipsism is a misunderstanding, and I would prefer it that you do not put words in my mouth. The sentence is complete but sadly your comprehension is not. I suggest you read your sentence again: Well I think the notion that any of us think for ourselves is absurd given that the tools of our thinking, the procedures of our thinking, the object of our thinking and the inspirations of our thinking. After "that" you'd expect a predicate, that never comes. You'll forgive the gentle irony of me helping you to think and you helping me to think, which is a sort of proof that neither of us actually think for ourselves. Thanks for the offer, but I prefer to think myself. Mmm...Actually 'thinking for yourself', now I come to think of it, is an oxymoron...at least in the way you depict it. Given that thinking entails input and output of information across a variety of cognitive networks some of which are public and some of which are private. However, even those that are private have extremely limited capacity without ouside contributions. Therefore thinking from just ones own self perceived authority with regard to a perspective stance upon facts about the world is a solipsistic notion, and in the context that we are regarding it, it is irrelevant. Such limited agent-relevance, as 'thinking for oneself' denies objectivity and is has clearly egoistic implications. Again, you are not very charitable in your interpreation. I'm not giving such a depiction; you are.
_____________________ Free Europe Now The man who trades freedom for security does not deserve nor will he ever receive either. -Benjamin Franklin If my sons did not want wars, there would be none - Gutle Rothschild It's not the people who vote that count, it's the people who count the votes - Josef Stalin Sometimes Satan comes as a man of peace - Bob Dylan A prolonged peace favours the predominance of a mere commercial spirit, and with it a debasing self-interest, cowardice, and effeminacy, and tends to degrade the character of the nation. - Immanuel Kant

keda
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Posted 04/17/08 - 06:13 AM:	#19
Glypt wrote: Either you are positing that the government is depicted as part of this market, in which case such regimes themselves are ripe for corruption or the government is an outside regulator in which case it could not be said to be a free market in the sense I've assumed you to mean. This is really a false dichotomy. The purpose of the government is not to regulate the market, but to protect your property rights. If there is coersion or fraud involved, then your property rights are violated, and the criminals must be brought to justice, or else the market is not free, but is intervened by oversight.
_____________________ Free Europe Now The man who trades freedom for security does not deserve nor will he ever receive either. -Benjamin Franklin If my sons did not want wars, there would be none - Gutle Rothschild It's not the people who vote that count, it's the people who count the votes - Josef Stalin Sometimes Satan comes as a man of peace - Bob Dylan A prolonged peace favours the predominance of a mere commercial spirit, and with it a debasing self-interest, cowardice, and effeminacy, and tends to degrade the character of the nation. - Immanuel Kant

Glypt
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Posted 04/17/08 - 06:28 AM:	#20
keda wrote: This is really a false dichotomy. The purpose of the government is not to regulate the market, but to protect your property rights. If there is coersion or fraud involved, then your property rights are violated, and the criminals must be brought to justice, or else the market is not free, but is intervened by oversight. Again your comprehension is at fault. You really must learn to read things in context. I'm not talking about The Government.

keda
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Posted 04/17/08 - 06:38 AM:	#21
Glypt wrote: keda wrote: This is really a false dichotomy. The purpose of the government is not to regulate the market, but to protect your property rights. If there is coersion or fraud involved, then your property rights are violated, and the criminals must be brought to justice, or else the market is not free, but is intervened by oversight. Again your comprehension is at fault. You really must learn to read things in context. I'm not talking about The Government. But you are talking about the government right here: Glypt wrote: Either you are positing that the government is depicted as part of this market, in which case such regimes themselves are ripe for corruption or the government is an outside regulator in which case it could not be said to be a free market in the sense I've assumed you to mean.
_____________________ Free Europe Now The man who trades freedom for security does not deserve nor will he ever receive either. -Benjamin Franklin If my sons did not want wars, there would be none - Gutle Rothschild It's not the people who vote that count, it's the people who count the votes - Josef Stalin Sometimes Satan comes as a man of peace - Bob Dylan A prolonged peace favours the predominance of a mere commercial spirit, and with it a debasing self-interest, cowardice, and effeminacy, and tends to degrade the character of the nation. - Immanuel Kant

Benkei
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Posted 04/17/08 - 06:49 AM:	#22
Protection of property is regulation of the market because it requires a market that is consistent with a) the recognition of personal property and b) the recognition of "lawful" transfer of properties and, conversely, unlawful transfer. And for a) and b) to be meaningful you will need c) enforcement of those two rules. What the free market fails to take into account is the historical development of the division of property which had rather little to do with the free market. With the development of the corporation we have a similar problem of differences in buying and selling power (I've tried negotiating with DOW Chemical once for a Fortune-500 company and it was hell; simply because of the selling power of DOW). This is worse between consumer and the corporation as the consumer requires many diversified products and limited time to orient himself, greatly limiting possible transparancy for him. A company specialised in chemical products will know the market necessarily better. Free market capitalism with corporations is impossible. The market is also obviously biased in favour of those people who have as opposed to have-nots, as it is infinitely easier for me to make more money with a lot of money than with little money, from the simple fact that 5% of 100.000 is a lot more than 5% from 10.000, which can be considered reasonable returns on investments. Equally, buying primary goods is relatively more expensive (as a percentage of total income) for poor people than for rich people. The free market will inherently lead to greater disparaty in inequality. So at the very least, some primary goods should be exempt from "free market" forces. Things I would consider are infrastructures (gas and oil pipelines, electricity networks but not the gas, oil and electricity itself), health care insurance (but not health care itself), pensions etc. and food stuffs and housing under certain conditions might warrant subsidising. The market cannot be seen as a thing unto itself, separated from society and its necessities. And those necessities are sometimes economical but often of an entire different nature.
_____________________ We all warm ourselves on fires we did not kindle. We all drink from wells we did not dig. - ancient Celtic saying

Glypt
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Posted 04/17/08 - 07:09 AM:	#23
keda wrote: ... your allusion to egoism and solipsism is a misunderstanding, . I'll try and simplify my point, which was in response to your previous messages and, as such was my response...obviously. So, unless you are deliberately being obtuse, there is no reason for you to make accusations that I am attempting to speak for you. The point is that I'm revealing the necessary truth about individual thoughts. That they are contingent and by definition, require the juxtaposition of information in order to lead to their conclusions about the world. Thought cannot take place without the world and the language that it brings into being through human inter-action. Therefore to say that one can 'think for oneself' is by no means philosophically sensible. You cannot think in isolation, in a solipsistic state. keda wrote: I would prefer it that you do not put words in my mouth. See above My sentence is complete but it is obvious you do not understand its implicature. keda wrote: After "that" you'd expect a predicate, that never comes.. You might but it is not essential in such an implicature. keda wrote: Thanks for the offer, but I prefer to think myself... Good luck! keda wrote: Again, you are not very charitable in your interpreation. I'm not giving such a depiction; you are. Its charitable enough given the sparse premises you offer. If my deduction does not suit your opinion thats fine. But if you would like to offer more than an opinion, then perhaps you can now explain how it might be possible for you 'to think for yourself' given that in order to think you must engage with the thoughts of others, require language developed through the interaction with others, and be inspired to think by the speech and text acts of others?

Glypt
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Posted 04/17/08 - 07:24 AM:	#24
keda wrote: But you are talking about the government right here: The word I use is all in lower case. Which by usual conventions indicates that the word is used in its generic sense ... as an indefinite. Government in that sense reverts to its authentic range of meaning that refer to general ideas of control or regulatory body. From personal ethics, to business ethics, to a host of formal or informal business standards, to an autopoeitic systemic control, etc etc. (Is English your first language? You don't have to answer of course. But if it isn't, then may be I owe you an apology.) Edited by Glypt on 04/17/08 - 07:30 AM

Fried Egg
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Posted 04/17/08 - 09:38 AM:	#25
Glypt There have been real life and recent events. That these consitute failures in the market is self evident given the financial system has had to be rescued by, for example the Bank of England. Indeed, but these emperical facts do not help us to answer the question to which Keda refered. Namely, is the cause of the market failure the fact that the markets were interfered with or that they were not interfered with enough? In order to answer this question, we must consider the implications of a markets system with the previously stated conditions present (including the implications of their absense), as well as the implications of the various interventions into the market that the government makes. litkey Who are these mystery people? I AM LOST! Who are the people that are going to do the "encroaching" and who is using the threat of force? Could we have some examples here please??? - it would come in handy. Thieves, murderes, fraudsters, gangsters, etc. People who are violating property rights. As far as I can tell from you theory, the people that would be doing the "encroaching" would be those that did not have the means of production, it would be those Individuals that did not have status, wealth, or power -right? No? No, not necessarilly. It could be anybody. It's not only the poor that commit crimes you know. The law currently serves who? In a free market, where there is only "property rights", wouldn't it be a reasonable assessment to say that those with wealth will be protected by the law? Reasonable? No, most definitely not. I've already explained this to you elsewhere and I don't intend to go into that again herer. Sorry. Benkei Protection of property is regulation of the market because it requires a market that is consistent with a) the recognition of personal property and b) the recognition of "lawful" transfer of properties and, conversely, unlawful transfer. And for a) and b) to be meaningful you will need c) enforcement of those two rules. I don't see why. It does not require rules in place for the government not to own the means of production. It does not require laws that force the division of labour. These happen quite naturally so long as condition four is met. What the free market fails to take into account is the historical development of the division of property which had rather little to do with the free market. It does indeed not deal with the past. But it does deal with the current and future accumulation/and dispersal of wealth. With the development of the corporation we have a similar problem of differences in buying and selling power... I do not see what significance this has to my arguments. The market is also obviously biased in favour of those people who have as opposed to have-nots, as it is infinitely easier for me to make more money with a lot of money than with little money, from the simple fact that 5% of 100.000 is a lot more than 5% from 10.000, which can be considered reasonable returns on investments. Actually, it's biased (as I have already explained) in favour of those who serve the market better. With more money to invest, more money can be made, but also more can be lost. Proportionately, the risk/benefits are the same. Equally, buying primary goods is relatively more expensive (as a percentage of total income) for poor people than for rich people. The free market will inherently lead to greater disparaty in inequality. I do not have a problem with this. So at the very least, some primary goods should be exempt from "free market" forces. Things I would consider are infrastructures (gas and oil pipelines, electricity networks but not the gas, oil and electricity itself), health care insurance (but not health care itself), pensions etc. and food stuffs and housing under certain conditions might warrant subsidising. I can understand (although not agree) why you might want to exempt things like utilities and health care from free market forces but not food, which seems to be working quite well (where it is allowed to operate). unenlightened how is a government to avoid intervening in the market to set the price of, for example a policeman or soldier? The government has the monopoly on coercion, it seems, but such superhuman restraint that it does not ever intervene in the operation of the market. Where do we recruit these paragons of political virtue - and of course, how much must we pay them? The government does not set the price it pays for soldiers or policemen. It must compete on the market (like any other employer) for people to fill those roles.

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