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Yes, I was serious. Have a read of Human Action and Liberalism to find out why.

Yes, I was serious. Have a read of Human Action and Liberalism to find out why.

I read your post, and I'm not convinced in the natural monopoly excuse. I say excuse because it reads as an apology for state intervention when none such action necessarily needs to take place. For more on what I am talking about, you might want to take a look at this: http://www.mises.org/journals/rae/pdf/RAE9_2_3.pdf

In my opinion, that article pretty much demolishes any reason for any company to be given monopoly privileges by the state. I would even go so far as to say that monopolies are always created by the government, as was the case in the 19th century when utility monopolies first started to come about. Furthermore, since the deregulation we now have Verizon FIOS and AT&T television services all beginning to compete against each other, even after all this time of supposed natural monopolies that were put in place by the government. I say let competition reign!

Actually, I'm not. Just because they say they own something doesn't mean that it is in fact their property.

Against intellectual property: http://www.mises.org/journals/jls/15_2/15_2_1.pdf

You can't say that a failed state is anarchy because people haven't had time to adjust to the new situation. It is very silly to apply the confusion and chaos that come from people's reliance on monopolistic force that is suddenly taken away from them. It is an inherent example of why statism is less stable than anarchy. Every state fails at some point and causes confusion and chaos.

In regards to the not so wild west:
http://www.mises.org/journals/jls/3_1/3_1_2.pdf

How exactly are German robber barons an example of anarchy? At any rate, here's a bit about the American robber barons you might find interesting:
http://www.mises.org/story/2317

And the mob example is actually a very good example of how violence is caused by arbitrary state restriction of goods, which causes black markets to appear, along with gangs to protect those markets. I agree there that for anarchy to work there will obviously have to be a change in the way people think. People used to tolerate divine kings as their rulers. They began to get tired of that, so they instituted democracy (elected rulers). I can't see any reason why people won't eventually get tired of elected rulers, and begin to resist any attempts to rule whatsoever.

You can't say that a failed state is anarchy because people haven't had time to adjust to the new situation. It is very silly to apply the confusion and chaos that come from people's reliance on monopolistic force that is suddenly taken away from them. It is an inherent example of why statism is less stable than anarchy. Every state fails at some point and causes confusion and chaos.

In regards to the not so wild west:
http://www.mises.org/journals/jls/3_1/3_1_2.pdf

How exactly are German robber barons an example of anarchy? At any rate, here's a bit about the American robber barons you might find interesting:
http://www.mises.org/story/2317

And the mob example is actually a very good example of how violence is caused by arbitrary state restriction of goods, which causes black markets to appear, along with gangs to protect those markets. I agree there that for anarchy to work there will obviously have to be a change in the way people think. People used to tolerate divine kings as their rulers. They began to get tired of that, so they instituted democracy (elected rulers). I can't see any reason why people won't eventually get tired of elected rulers, and begin to resist any attempts to rule whatsoever.

And once those leaders have followers, what's stopping them from using those followers to enforce their will on others ?

What happens at the absence of central government is that some people accumulate enough power to become local warlords and begin fighting for power amongst themselves. The end result of that is civil war, followed by military dictatorship. It has happened every last time central authority has collapsed.

And the point of democracy is not majority rule, but making the rulers easily replaceable. This, in turn, makes them accountable for their actions to those they rule, or so the theory goes anyway. Of course it doesn't always work, and almost never really well, but we have no better method of rulership right now.

In an earlier post you linked to Wikipedia, giving the impression that you advocate anarcho-capitalism. Surely you realize that in such a system results in all power being concentrated in the hands of those who own lots of property, since doing away with the state does away with the only entity capable of putting any limits on their actions;

what's stopping them from crowning themselves God-Kings and killing anyone who doesn't obey their every last whim?

Aquinas did provide an answer to your question though, the justness of law and ethics in general can be inquired by the use of reason. Thomists you are briefly talked about here http://www.mises.org/rothbard/ethics/one.asp . The argument you put forth seems more Hobbesian to me.

according to modern Keynesian economics

Keynesian economics haven't been "modern" for a while now. If you look at current policies it becomes clear that the whole "waste makes wealth" thing didn't work out, and they're working on some alternate theories -- ones that don't promote consumption at the expense of saving and investment.

The policies you propose -- bailing out failing businesses, extending easy credit, and generally wasting valuable resources in a futile attempt to put off the inevitable market correction to the malinvestments of the boom period -- are exactly how we ended up with the Great Depression. There's a complete analysis of the Depression available if you need further details.

Well, perhaps, but it might also mean that the US manufacturer is forced to sell much cheaper than he would otherwise have preferred to - even to the extent of selling at a loss just to keep stocks moving.

And how long can he do sell at a loss? If he sells at a lower profit, he will not be able to invest and his product quality will suffer. This surely punishes the manufacturer and his country, but the consumer still pays the same price for an inferior product. Of course, this is a simplistic view, but so is your original point. Reality will include bribes, lobbyists, etc.

It's not a perfect tool by any means, but taking realpolitik into account it's really the only way to punish another nation for violating their trade agreements with you. You're taking a small hit yourself, but the manufacturers in the target nation probably feel the pain more than you do.

The hit to the manufacturer depends on how big of a market you are; the hit to your people depends on how expensive the alternatives are.
Either way, it is a bit like cutting your nose to spite your face.

Chapter 7 in this PDF explains it much more clearly than I can.

Regulating prices may seem like a good idea at first glance - but forcing the telcos to let competitors share access reduces investment in upgrading facilities that need modernization.

This op-ed in the Washington Times today does a great job explaining why regulating special access would be a bad idea. http://washingtontimes.com/article/20071011/COMMENTARY/110110009/1012

The Progress & Freedom Foundation recently published an empirical examination finding a positive correlation between flexible pricing and incumbent investment. The report reaffirms what economics tells us: lower profit potential in a market segment means less investment. Somebody has to be willing to throw down some serious cash to increase the bandwidth of central office. But incumbents tend to divert resources to more lucrative ventures if CLECs can reap the benefits without taking any of the risk. Sure, CLECs have to pay wholesale prices plus rate of return, but there's no risk in that proposition-except for the incumbent. Phone companies allocate the most resources to areas where the FCC does not regulate prices.

There is real competition in the market for high-speed internet access. Business cable, DSL, satellite internet, 3G, fixed wireless, and now 4G/Wi-Max all compete with T1 lines for workplace connectivity. These aren't perfect substitutes yet, but they keep getting better as DOCSIS 3.0 starts to be implemented and wireless broadband gets faster and cheaper. The upcoming 700mhz auction will mean even more growth in this area.

The FCC is making the same mistake the FTC made with the XM-Sirius merger, or the Staples-Office Depot merger. Just because the market for a specific product may have 1 supplier doesn't mean its a monopoly-as long as substitutes exist, there will be price competition.

Phone service isn't a natural monopoly anymore. The duplicative cost of having multiple carriers is tiny nowadays compared to the massive welfare gains from competition. And if phone service really is a natural monopoly, why does the FCC need to insulate telcos from competition? Shouldn't the market gravitate towards 1 supplier without government intervention? In 1934, under political pressure from AT&T, the FCC began its disastrous policy of enforcing monopolies on telephone service. Ma Bell successfully lobbied Congress to entrench its monopoly status because upstarts were doing such a good job competing, so profit margins weren't as large as AT&T had become used to. Imagine a world where people had real choice for TV, phone, and internet. Franchising and universal service would have to be eliminated; but in this day and age if people want to live in rural areas, why should the rest of us have to suffer?

Whose economic theory posits that patents don't "promote the progress of science and useful arts?" And if you don't promote the progress of software via patents, how do you do it?

If one does not know whether a system "as a whole" (in contrast to certain features of it) is good or bad, the safest "policy conclusion" is to "muddle through" - either with it, if one has long lived with it, or without it, if one has lived without it... If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, on the basis of our present knowledge, to recommend abolishing it. This last statement refers to a country such as the United States of America - not to a small country and not a predominantly nonindustrial country, where a different weight of argument might well suggest another conclusion...

There is a wide gulf between the statements "software patents are an inherently bad idea, because they don't serve the purpose they are intended to serve," and "all patents are bad."

Why do these economic theories argue against patent systems? Is their argument actually economic or is it an argument against restricting freedoms?

The Mystery of Banking, another by Rothbard. And an audio version of What Has Government Done to Our Money?

The Mystery of Banking, another by Rothbard. And an audio version of What Has Government Done to Our Money?

That's a blatant falsehood. Finance tends to deal with individual markets and microeconomics, whereas economics tends to deal with macroeconomics. Try being a finance major, there's a reason why you have to take a number of courses in economics. If you had a Venn diagram, you'd see a huge amount of overlap. They both deal with the economy, only with a slightly different attitude, and a nudge in scope.

"Fiat currencies allow non-market entities to regulate market economies. Without an "artifical" currency (not that gold is any less artificial, it's just a finite shared delusion) there is no (or very little) room for long-term actors to intervene in short-term crises"

You mean it allows governments to control the money supply, which has led to depressions, recessions, the boom and bust business cycles, and the inflation tax. Of course, depressions and recessions existed prior to the founding of the Fed, but they were far less serious and far more short term. Do you really think central planning works? If not, why are you making a special exception in this case?

With a gold standard, one rich person can control an improbably large percentage of the (finite) money supply. Or a million individuals can simply hoarde their money, reducing the supply in circulation, and the government has no easy way of resolving it, short of revaluing the currency which makes a gold standard into a slower fiat currency.

Gold cannot be a fiat currency, unless you have gained the ability to print gold. I'm sorry, but you don't even know what fiat currency is, and yet you're propounding upon it as if you understand its complexities, to say nothing of your self-awarded mastery of monetary policy.

I'm truly astounded this thoroughly discredited canard is still being circulated. You could read Professor Rothbard's "What Has the Government Done to Our Money?," but as the audience appears to be little trained or educated in basic economics, here is the relevant except, "II: Money in a Free Society, "The Problem of 'Hoarding' (http://www.mises.org/money.asp/):

The critic of monetary freedom is not so easily silenced, however. There is, in particular, the ancient bugbear of "hoarding." The image is conjured up of the selfish old miser who, perhaps irrationally, perhaps from evil motives, hoards up gold unused in his cellar or treasure trove--thereby stopping the flow of circulation and trade, causing depressions and other problems. Is hoarding really a menace? In the first place, what has simply happened is an increased demand for money on the part of the miser. As a result, prices of goods fall, and the purchasing power of the gold-ounce rises. There has been no loss to society, which simply carries on with a lower active supply of more "powerful" gold ounces. Even in the worst possible view of the matter, then, nothing has gone wrong, and monetary freedom creates no difficulties. But there is more to the problem than that. For it is by no means irrational for people to desire more or less money in their cash balances. Let us, at this point, study cash balances further. Why do people keep any cash balances at all? Suppose that all of us were able to foretell the future with absolute certainty. In that case, no one would have to keep cash balances on hand. [35] Everyone would know exactly how much he will spend, and how much income he will receive, at all future dates. He need not keep any money at hand, but will lend out his gold so as to receive his payments in the needed amounts on the very days he makes his expenditures. But, of course, we necessarily live in a world of uncertainty. People do not precisely know what will happen to them, or what their future incomes or costs will be. The more uncertain and fearful they are, the more cash balances they will want to hold; the more secure, the less cash they will wish to keep on hand. Another r

False. Excess demand for money cripples the economy -- see the financial crisis of 1873. Haven't we been through this before?

We have, and your lies about the Panic of 1873 have been destroyed before. The reason for the Panic was DIRECTLY due to government's mishandling of the money supply, exactly the problem that I speak of. Grant decided to contract the money supply when the investors wanted to put as much as they could into railway building. It was Grant, not the investors, that created the Panic.

In fact, the more you read about the Panic, the more you see that it was the final end result to what Lincoln started with his inflationary money system that attempted to pay for the War between States. See Mises for info on how the Panic ended this game by the government.

Hoarding of currency cause deflation, which causes additional hoarding, which cause additional deflation, etc... this results in a rapidly shrinking economy where there is little to no investment or cash outlay -- leading to massive unemployment and reduced demand for consumer goods, which feeds the fire further.

Hoarding of money is the DEFINITION of deflation: removing money from the economy. It is like saying "Untying your shoelaces creates untying of shoelaces." Duh. Deflation causes the demand for money to rise, which is symbolized by merchants dropping prices. Not everyone will hold out forever as merchants drop prices, and not all merchants will drop prices because they have products that people actually do need, or do want, rather than "oooh, cool, iphone, must have must have visa visa visa." This is good for the market. Massive unemployment isn't a side effect of deflating a currency supply -- yes, wages can go down, but prices are generally going down anyway, so the net result may not be unemployment or poverty. Saving is good, spending is good, but only if it is needy or truly wanted.

Sustained slow deflation might not be a terribly bad thing, but it is nearly impossible to sustain a slow rate of deflation when hoarding without money supply adjustments is a self-catalyzing suppressant of economic activity.

But hoarding doesn't just come from sticking it under the mattress. You could "hoard" by putting it into an interest-bearing demand deposit account with 90 day turn-over (say, a CD), and have that money loaned out to the market (unusable by you for those 90 days). In fact, the entire bond market should work this way -- people asking for a loan by issuing a bond, and bondholders keeping the bond or selling it to others when they're ready to move markets.

Fiat currency always harms the poor and enriches the powerful. It has always worked this way, even before the time of Christ. Fixed currencies give the poor hope for the future, with a savings that is actually worth something. People who take in money and are comfortable in their futures tend to spend some of it, especially if prices are right.

...and a free e-book download is What has Government done to our money? by the esteemed Murray N. Rothbard.

I've read dozens of books (over 30, for sure) on central banking theory, and none of them have given a completely clear and transparent picture of what the Fed really is, what is does, and what it is supposed to do. In the end, all central banks have one customer: member banks (the banks you and I go to), and the central banks have one policy: save their buddies in the member banks against any malinvestment or market change.

The Fed isn't here to protect the value of OUR money (in fact, since the Fed's creation in 1913, the US dollar is about 95-96% devalued), and it isn't here to protect our investments or savings.

I am not eager to force anyone to do anything. That is exactly why I oppose the public funding of all services. Socialists, on the other hand, are eager to force their morals on everyone possible. It is well known that economic freedom is the single most important factor in reducing poverty. When governments stick to protecting life, liberty, and property, there is more prosperity than there would otherwise be; poor included. The best way to reduce poverty is through allowing this individual choice.

http://www.fee.org/in_brief/default.asp?id=1568
http://www.mises.org/efandi.asp

There is no solution to this problem that does not involve society as a whole somehow coercing the individual -- in other words, regulation.

There is no solution to this problem that does not involve society as a whole somehow coercing the individual -- in other words, regulation.

Regarding inflation: http://goldprice.org/bob/uploaded_images/dollar_US D_Purchasing_Power-753629.gif
Fed was created in 1913. I'm not sure if ANYBODY should be grateful for fed for destroying 95% value of the dollar. If you want to know, why majority of internet is libertarian, you should read, what many people did read: http://www.mises.org/money.asp .
As for me: I have read a lot of books about economics and I am damn sure that we would be better of without 95% of the governement. (I'm quite confident our grandchildren would be better of without 100% of government, but the transition period of the last 5% would be probably very long and painful). I would prefer ALL PRIVATE schools for my children, ALL PRIVATE health care for me, private roads. As most libertarians would. They accept, that if you want to have something, you have to pay for it. And that it is immoral to force other people to pay it for you.

Alright, I will respond to your 911 service message.

So let's say the fixed costs for providing the 911 service is $1000 (costs for infrastructure, monitoring, etc). Let's say that the marginal cost for providing the 911 service to a given subscriber is $10.

"The" 911 service? On the free market, there can be competing emergency numbers. For example, take the following paragraph from For a New Liberty:

"In the first place, there is a common fallacy, held even by most advocates of laissez-faire, that the government must supply "police protection," as if police protection were a single, absolute entity, a fixed quantity of something which the government supplies to all. But in actual fact there is no absolute commodity called "police protection" any more than there is an absolute single commodity called "food" or "shelter." It is true that everyone pays taxes for a seemingly fixed quantity of protection, but this is a myth. In actual fact, there are almost infinite degrees of all sorts of protection. For any given person or business, the police can provide everything from a policeman on the beat who patrols once a night, to two policemen patrolling constantly on each block, to cruising patrol cars, to one or even several round-the-clock personal bodyguards. Furthermore, there are many other decisions the police must make, the complexity of which becomes evident as soon as we look beneath the veil of the myth of absolute 'protection.'"

Couldn't the same be said about "911 service"? How many 911 operators will there be to take your call? What sort of equipment will they be using? How friendly and trained will the 911 operators be? If there is a queue for anything at all, can I pay more to get to the front of the queue?

We want to supply all 100 people with the service, so to do that, we have to charge a max of $11 for the service.

I don't agree with your assumptions, so it follows that I won't agree with your conclusion, either. It's like saying, "Well, the poorest person will only pay $1.50 for a McDonald's cheeseburger, and we have to provide a cheesebruger to everyone in the area, so that means we'll lose $1000 every day..." You assume that there is only one good that can be provided in one way, and your entire scenario follows from that fallacy. I won't respond with hard numbers, because the problem is not your math.

Let me leave you with this quote from Rothbard:

"Free supply not only subsidizes the users at the expense of nonusing taxpayers; it also misallocates resources by failing to supply the service where it is most needed. The same is true, to a lesser extent, wherever the price is under the free-market price. On the free market, consumers can dictate the pricing and thereby assure the best allocation of productive resources to supply their wants. In a government enterprise, this cannot be done. Let us take again the case of the free service. Since there is no pricing, and therefore no exclusion of submarginal uses, there is no way that the government, even if it wanted to, could allocate its services to their most important uses and to the most eager buyers. All buyers, all uses, are artificially kept on the same plane. As a result, the most important uses will be slighted. The government is faced with insuperable allocation problems, which it cannot solve even to its own satisfaction. Thus, the government will be confronted with the problem: Should we build a road in place A or place B? There is no rational way whatever by which it can make this decision. It cannot aid the private consumers of the road in the best way. It can decide only according to the whim of the ruling government official, i.e., only if the government officials do the consuming, and not the public. If the government wishes to do what is best for the public, it is faced with an impossible task."

Alright, I will respond to your 911 service message.

So let's say the fixed costs for providing the 911 service is $1000 (costs for infrastructure, monitoring, etc). Let's say that the marginal cost for providing the 911 service to a given subscriber is $10.

"The" 911 service? On the free market, there can be competing emergency numbers. For example, take the following paragraph from For a New Liberty:

"In the first place, there is a common fallacy, held even by most advocates of laissez-faire, that the government must supply "police protection," as if police protection were a single, absolute entity, a fixed quantity of something which the government supplies to all. But in actual fact there is no absolute commodity called "police protection" any more than there is an absolute single commodity called "food" or "shelter." It is true that everyone pays taxes for a seemingly fixed quantity of protection, but this is a myth. In actual fact, there are almost infinite degrees of all sorts of protection. For any given person or business, the police can provide everything from a policeman on the beat who patrols once a night, to two policemen patrolling constantly on each block, to cruising patrol cars, to one or even several round-the-clock personal bodyguards. Furthermore, there are many other decisions the police must make, the complexity of which becomes evident as soon as we look beneath the veil of the myth of absolute 'protection.'"

Couldn't the same be said about "911 service"? How many 911 operators will there be to take your call? What sort of equipment will they be using? How friendly and trained will the 911 operators be? If there is a queue for anything at all, can I pay more to get to the front of the queue?

We want to supply all 100 people with the service, so to do that, we have to charge a max of $11 for the service.

I don't agree with your assumptions, so it follows that I won't agree with your conclusion, either. It's like saying, "Well, the poorest person will only pay $1.50 for a McDonald's cheeseburger, and we have to provide a cheesebruger to everyone in the area, so that means we'll lose $1000 every day..." You assume that there is only one good that can be provided in one way, and your entire scenario follows from that fallacy. I won't respond with hard numbers, because the problem is not your math.

Let me leave you with this quote from Rothbard:

"Free supply not only subsidizes the users at the expense of nonusing taxpayers; it also misallocates resources by failing to supply the service where it is most needed. The same is true, to a lesser extent, wherever the price is under the free-market price. On the free market, consumers can dictate the pricing and thereby assure the best allocation of productive resources to supply their wants. In a government enterprise, this cannot be done. Let us take again the case of the free service. Since there is no pricing, and therefore no exclusion of submarginal uses, there is no way that the government, even if it wanted to, could allocate its services to their most important uses and to the most eager buyers. All buyers, all uses, are artificially kept on the same plane. As a result, the most important uses will be slighted. The government is faced with insuperable allocation problems, which it cannot solve even to its own satisfaction. Thus, the government will be confronted with the problem: Should we build a road in place A or place B? There is no rational way whatever by which it can make this decision. It cannot aid the private consumers of the road in the best way. It can decide only according to the whim of the ruling government official, i.e., only if the government officials do the consuming, and not the public. If the government wishes to do what is best for the public, it is faced with an impossible task."

Since the Wikipedia link directs to Norway:

Norway has indeed come a long way since 1905.
Norway has its say somewhat socialist sides, but the socialist sides has often been
a restriction to development.
At times it was not unlike what you would find in Great Britain after WWII.
A welfare state certainly makes for better sleep if you truly cannot fend for yourself.
But the regulations on say telephone services experienced up until deregulation
were unneeded and costly to society and were a burden on economic development.
Norway has had and has a large merchant fleet and a very long coast.
Like England, Belgium and Netherlands the connection to the sea has been and is a blessing.
It facilitated trade and other interactions with other nations at an early time.
(Really early on not all these actions were seen as wholly blessed :-)
I would like to see Norway as having a social market economy of sorts.
http://en.wikipedia.org/wiki/Mixed_economy
Not unlike many other nations.

For those who would like to study closely the practical sides of economy I would recommend
to have a look at Germany after WWII.

In the eastern part:
http://en.wikipedia.org/wiki/Economy_of_the_German _Democratic_Republic
http://en.wikipedia.org/wiki/Planned_economy

http://en.wikipedia.org/wiki/Economic_history_of_G ermany

In the western part of Germany they had the fortune of brilliant economic leadership.
http://en.wikipedia.org/wiki/Wirtschaftswunder
http://en.wikipedia.org/wiki/Ludwig_Erhard
Most notable was Ludwig Erhard.
"On June 20, 1948, the Deutsche Mark was introduced. Erhard abolished the price-fixing and production controls that had been enacted by the military administration. This exceeded his authority, but he succeeded with this courageous step."
The price controls remained for a while in the sectors controlled by France :-)
Ludwig Erhard was a Libertarian in a conservative party led by Konrad Adenauer.
He understood the limitations at hand in a war ravaged Europe.
It was not an easy task for an economist who was not a politician to fight for the free market.
When Erhard left office in 1965 unemployment was less than 1%.
I think that speaks for itself.
http://www.pbs.org/wgbh/commandingheights/lo/count ries/de/de_economic.html

http://www.ludwig-erhard-stiftung.de/
has a book in PDF format for those who understand German
http://www.ludwig-erhard-stiftung.de/ (Down on the page)
The title is: Prosperity through Competition (Wohlstand für alle)

Too bad that IRAQ has no such genius:
http://www.fff.org/comment/com0312d.asp
If you do not deregulate the poor will suffer the most.
Like it or not.

Planned Economy is a Prussian invention intended to be used at times of war only.
Communists, Fascist and Socialists like planned economy because it gives THEM more control.

Communism and fascism will always go bankrupt.
Socialism will have low growth and always balance on the edge of going bankrupt.
2 Democratic nations will never start war against each other.

And not to forget: www.mises.org.
Ludwig Erhard studied under one of the students of Ludwig von Mises.
Further read:
http://www.mises.org/TRTS/

It's just too easy to create infringing code. I don't much like FDR's administration (there's a decent argument that he actually prolonged the Great Depression by his attempt to ram a centralized economy down the country's throat), but one of the good things he did do was to radically cut back the number and scope of patents on the theory that handing out monopolies was a bad idea.

My country buys 10 billion [currency] worth of widgets from your country
Your country buys 5 billion [currency] worth of widgets from mine
My country has a trade deficit of 5 billion [currency] in the widget sector.

It's imports vs exports.
When imports do not = exports, you have an imbalance.

For your nonsensical post to be correct, we would have to be buying and selling widgets in equal quantities. Hint: we aren't.

I really can't understand how anyone moderated you up.
This stuff isn't that hard.

Then what's your excuse for flunking it?

For one thing, your "widget" example relies on the unstated assumption that it's the same widgets being traded. It isn't.

Second, we are only able to buy more things from overseas because we have the currency to do so -- in other words, a "trade deficit" is the mirror image of a capital surplus. It's a reflection of the fact that nations are different, and does not represent a problem any more than the same "imbalances" between US states or US cities, or even between you and the local grocery, are "problems". It's a function of where the lines (borders) are drawn , no more.

Unless you're a screwball leftist who equates trade with theft, it ought to be clear that all trades involve *different* things moving in opposite directions.

Destination USA
American's Record Capital Surplus
Isn't the Capital Surplus a Good Thing?

-A study at West Virginia University concluded that "the process of creative destruction unleashed by Wal-Mart has had no statistically significant long-run impact on the overall size and profitability of the small business sector in the United States"

-The Ludwig von Misis Institute concluded that Wal-Mart significantly contributes to the wealth of a community

-Mississippi State University concluded that there are "both positive and negative impacts" on the local stores when a Wal-Mart is built

-MIT concluded that Wal-Mart benefits the poorest segments of the population the most

-The University of Missouri concluded that a Wal-Mart does far more economic damage to neighboring towns that it didn't build in compared to the towns where they build a new store

From my recent experience driving through Hays Kansas, I tend to believe these reports more than those who claim that Wal-Mart destroys the community.

Actually you are confused. What you are seeing is not free-market capitalism but a form of mercantilism and in some cases facism.

Capitalism requires an exchange of goods for services. It is completely voluntary. Socialism (and its cousin facism) uses the government to force particular things on people which results in no choice and horrible inefficiency. In essence, corporations are using the government to promote or subsidize their business. In a completely free market, the government's role would be to prevent companies from using force or questionable methods to maintain their monopoly through anything other than the goods and services they provide. What we have is the opposite, and all manner of "crises" and problems.

Capitalism goes with human nature, it uses greed to the advantage of society instead of trying to reshape human nature itself (which is necessary for socialism to work). I suggest you read Mises' work "Human Action" instead of depending on your government education which is only interested in perpetuating itself. Here is a good start: http://www.mises.org/story/2670

I saw the mises.org link in your post, and wanted to mention that Ron Paul endorses von Mises and the Austrian school and has even written a small book on the subject.

I find that hard to believe. Who likes to go to the doctor to get shots, blood drown, and a finger shoved up their arse? I don't know anyone that perverse. If these people are so common, how come we don't hear about them going to the doctor 50 times per year now? I mean, what's stopping them? A $10 copay?

Wikipedia talks about copays. It says copays are to prevent an economic problem known as a "moral hazard". Feel free to read more about it. I am, but don't feel like c/p'ing the Web for you.

You'll have a hard time convincing me of that without a citation. The whole health care system is structured around disease management, not disease prevention. Why do you think that is? Why don't they pay me to get a physical if it helps their bottom line so much?

They don't pay you because you're already asking them to take on your own financial risk. It doesn't shower them with money for you to go to the doctor. A pay-out is a pay-out. Notwithstanding, basic care is far cheaper than a hospital visit. Insurance wants to allow sufficient preventive care to reduce the number of emergency room visits (which reduces their costs because the hospital is a zillion times more expensive) while not going overboard and paying for too many unnecessary tests and whatnot (c.f., copays).

Why is the damn emergency room so damn expensive, driving up my damn rates? It is illegal to deny emergency treatment to patients simply because they cannot afford treatment. Translation: The uninsured are the source of these hidden costs. http://gov.ca.gov/index.php?/fact-sheet/5937/ Even the damn Mises Institute, a bunch of anti-government religious zealots, agrees with this assessment (though they disagree with the solution -- duh).

Think about how much money the US government would have to borrow in order to pay for such a program. When the government borrows money, that crowds out other borrowing. Say "hello" to high interest rates and high loan rejection rates.

Nah, you'd just pay the same premiums to the government instead of the insurance company. It's a wash except more people will be covered and, as inefficiencies are reduced, costs will go down.

I'll let you have the last word in this thread. Cheers and nice discussion.
-l

Second Life's economy could reasonably be compared to that of a small foreign country dependent on tourism. Consumers are inhabitants of the real world who take what are essentially pleasure trips to Second Life. However, it appears very likely that Second Life will experience at least some form of economic recession.

Not surprising that Krugman, being a Keynesian, would hold the position that gold is a barberous relic. For a more sound understanding of how fiat money causes the business cycle:

The Case for the 100 Percent Gold Dollar

FFS this guy is about 100 years behind the curve.

http://www.mises.org/

patents, copyrights, and trademarks are founded upon a hypothesis (usually confused for fact) of the free rider problem; this "problem" is a myth, however.

http://jorge.cortell.net/
http://www.dklevine.com/general/intellectual/again st.htm
http://www.stephankinsella.com/ip/
http://www.mises.org/fullstory.aspx?Id=1763

There's No Such Thing As a Free Patent
By Stephan Kinsella
Posted on 3/7/2005

The conventional defense of the patent system is that it is essential in order to stimulate creativity.[1] For example, in "Don't Believe the Hype" (Feb. 2005, IP Law & Business), patent attorneys John Benassi & Noel Gillespie conclude that our patent laws continue to "foster innovation." This is so even though many observers believe our patent system is "out of control and that overworked patent examiners are issuing overly broad patents."

Costs Must Be Considered

But the benefits that flow from the patent system are only half the story, since the system also comes with costs. Even if we are going to adopt a wealth-maximization criterion (which is, admittedly, problematic),[2] we must compare the costs to the benefits to know whether the system is worth having at all.
If costs are not taken into account, there are no limits to what could be done to encourage innovation. Some, for example, suggest replacing the patent system with a federal commission that gives taxpayer-funded rewards to inventors deemed worthy. "Under a reward system, innovators are paid for innovations directly by the government (possibly on the basis of sales), and innovations pass immediately into the public domain. Thus, reward systems engender incentives to innovate without creating the monopoly power of intellectual property rights."[3] ...

If the patent system is to be a net benefit to society, the gains it provides (the extra wealth and innovations the system stimulates) should be greater than its costs, according to standard law and economics "wealth-maximization" reasoning. As Landes and Posner--deans of the law and economics approach--point out, innovators themselves engage in a similar calculus: "For a new work to be created the expected return . . . must exceed the expected costs."[6]
In other words, the theory is that the innovator will engage in innovating activity only when he believes he can reap a profit. And the very point of a patent system is to make it easier for inventors to earn a profit, so that more of them will invest time and resources trying to innovate.
Likewise, the entire patent system's "gains"--the extra wealth or innovation it stimulates--needs to be clearly greater than the costs of the system if the patent system is to be a net benefit to society. How we are to go about measuring such costs against the benefits, and include the opportunity costs of time, is a crucially important issue. But if one is going to advocate a system on the grounds that it is beneficial, one must attempt to account for costs as well.

What Costs Are There?

And there are clearly costs to the system. Indeed, some of the purported "benefits" cited by Benassi and Gillespie may really be costs. They note, for example, that venture capitalists insist on a strong patent portfolio when evaluating whether to invest in a company. But this is because, in part, patent portfolios are necessary to defend against other companies' portfolios. If there were no patent system, one would not need to defensively spend money building up a mountain of patents to use in counterclaims or cross-licensing negotiations.
The authors also acknowledge that, "Unfortunately, there are companies that make no products and whose only business is to acquire patents in order to enforc

Each succeeding bubble has been worse than its predecessor. Thus nobody is actually able to spot the cycle, since it just looks like a continuum.

The causes of the business cycle have been known for quite a while. It's just that we keep deluding ourselves that the next bust won't happen. Inflating the monetary supply encourages investment in productivity, but hurts consumption. Eventually the two get too far out of whack and we get a correction. http://www.mises.org/story/606

Getting out of this cycle means taking your hands of controls of the monetary supply. Milton Friedman suggested indexing the rate of monetary growth. More radical economists suggest getting rid of the Federal Reserve entirely and going to a hard commodity or other value system. The latter has some merit, but is politically unrealistic.

Don't say that until you can read these two books and refute them:

• http://www.mises.org/money.asp
• http://www.mises.org/rothbard/agd.pdf

You are correct, though, that gold is just a metal. No pseudoscience about it. Just real economics.

Don't say that until you can read these two books and refute them:

• http://www.mises.org/money.asp
• http://www.mises.org/rothbard/agd.pdf

You are correct, though, that gold is just a metal. No pseudoscience about it. Just real economics.

Basically, small inflation is devastating, because it means that the "real" risk free rate is negative. If expected inflation is 3%, and people expect a 2% rate of return for 0-risk, then the nominal interest rate for treasury bills is 5%. If inflation rises to 4%, then the interest rate foes to 6%, with no major change. If instead we get 3% deflation, then the "interest rate" SHOULD become -1% (-3% deflation + 2% required rate of return = -1%)... Now, who would buy a bond for -1%? Instead the money sits in the mattress. As a result, you might see an interest rate of 1% or 2%, but that means that the real interest rate is 4%.

What you are describing is Keynesian Economics. To my knowledge (IANAEconomist), the Keynesian theory has no explanation for the Panamanian economy.

Panama has had long periods of very low inflation, and even some deflationary periods. Yet, the Panamanian economy kept ticking right along. Panama has the highest GDP per capita of any Central American country, and yet their inflation rate has been consistently lower than in the U.S.

http://www.mises.org/story/2533

Their currency is completely market driven, has no Central Bank, and the government cannot print fiat currency. Their currency must be backed by "hard" goods or services, purchased at prices tied to the USD. This has led to an extremely stable economy, which hasn't suffered a major financial collapse since their independence in 1904.

Perhaps someone with a better understanding of economics can explain the Panamanian phenomenon, from a Keynesian perspective.

Soon we will have a large class of people who's only choice in life will be to do exactly what their landlord tells them.

The situation you provided has been covered quite a lot by economists. What has been found is somewhat the polar opposite to what you believe. First of all, these exact circumstances exist today, you need only look at welfare housing, such as the "projects" in America and the housing trust in Australia and Great Britain.

People often believe that people with money are able to control other people through arbitrarily setting prices. However, this is completely false. Firms do not set prices, firms react to the market to charge the most economic price for their products and services. Firms which arbitrarily set prices, or attempt to use prices to control people, any firm which did engage in these practices would not survive unless somebody was able and willing to pay these prices. In a free market it is almost impossible to maintain a monopoly, even on natural resources, such as land and oil, as there will always be substitutes (Have a look at how people live in Tokyo). This is a poorly written and brief example of the invisible hand of the market

This isn't without going into economic mobility in a free market system versus our current systems, or even the inherent inefficiencies in large business which are only able to prosper due to regulation which is meant to "protect" people from large businesses (Being a small business man, I know this only too well).

There are so many reasons why these problems can either, not exist or temporarily exist (such that in the grand scheme of things, it's not worth ruining your freedom over), that it's just not funny.

You sound more like an English literature/communications major than an economist. Your thinking is too linear. Instead of stating this is what will happen, describe the transactions that will take place, and think about why they take place. If you ever describe a transaction where a person is forced to make a decision which is harmful to themselves, think about what you would do in that situation, and that is what other people will do.

Now, everything you have brought up in this one message, is covered really really well in "Capitalism and Freedom: Fortieth Anniversary Edition" by Milton Friedman, it's not a very expensive book, it isn't very thick and it's written really well. It explains everything I have touched on and more.

If you want to discuss topics like this, you have to read this book or "Free to Choose: A Personal Statement" by Milton Friedman, or if you don't want to read free to choose you can download the tv series produced in the 80s just search on mininova or torrentspy for "free to choose".

Or if you're really into this topic, you need to read "Man, Economy, and State with Power and Market" by Murray Rothbard, hell it's even free!

Even if you think all of these are just libertarian propaganda, these books/tv series only deal with logic and discuss both sides of the argument, more so, these are the quint

well, puffery in advertising is perfectly legal

If you freely chooose to do something that costs you, that is your choice. You're not magically entitled to recoup your costs, you could have just freely chosen not to incur them. You certainly don't deserve a right to censor other people to recoup your costs after the fact. And in the case of information, you still have your work, too, even if someone else has a copy, so you STILL HAVE THE RESULTS OF YOUR LABOUR.
(and if it were about (unfairly) allowing you to recoup fixed costs, then the logical thing would be for you to be required to register your costs with the relevant office, and your copyright or patent monopoly would expire when they have been met).

And again, things just aren't worth the costs that go into making them anyway - that's the marxist fallacy.

Go read http://www.mises.org/journals/jls/15_2/15_2_1.pdf "Against Intellectual Property" by Stephan Kinsella. When or if you have read and understood it, come back to slashdot.