Well the US 1929 is about as non-interventionist as you can get and see what it did.
Wait; let's back up a few years back before we start talking about Hoover's response. The entire business cycle is caused by fractional reserve banking; that includes the 'boom' and the 'bust'. It is not as though the boom that occurred during the 1920's (and inevitably led to a bust in 1929) was the work of the free market. Even if you want to claim that fractional reserve banks are part of the 'free market', there is no question that the government, through institutions such as the Federal Reserve, has exponentially amplified the effects of fractional reserve banks. During the 19th century, when government intervened less, we had smaller booms and busts.
Now, when the recession began in 1929, Hoover's response was the most interventionist the country had ever seen, at the time. If Hoover had really been non-interventionist, and the recession had turned into the Great Depression anyway, then we would have to throw the Austrian theory of the business cycle in the trash, just as we should have thrown Keynesian theory in the trash during the 70's. Keynesian theory predicted that we couldn't have unemployment and inflation at the same time...so what did the Keynesians do when their theory was proven wrong? They just came up with a new term (stagflation) and proceeded as normal. But Austrian economics is a religion? Riiiiiight.
What's funny is that you say the Austrian theory is a religion, but you bring up a fact that could falsify it (the alleged fact being that the Great Depression occurred even though there was almost zero intervention). The problem is, your fact is false: There was a lot of intervention, starting with Hoover. So, you've demonstrated that Austrian theory is falsifiable, but it has not been falsified. Not bad, given how long the theory has been around. Especially when you compare it to mainstream economics, where they kept saying a year ago, 'Maybe it's different this time! Maybe the greatest housing boom ever will end with a soft landing!' Austrians had to slap their foreheads and say, 'No, it's not different this time. Our theory is just as correct as it ever was.' No one ever listens, do they?
In simpler words: information is extremely costly to produce; the process can go wrong very easily even with high expenditures; and because of this, the market will often make do with what turns out to be misinformation (deliberate or well-intentioned).
Let's assume that what you're saying is all true. Well, government is merely a third party, so all of the criticisms you mentioned apply to the government as well. Therefore, I could replace the phrase "the market" with "humans" in your sentence, and doing so would make me wonder what alternative you are proposing.
This, however, doesn't mean that the claim that there isn't enough information for the consumer to make the correct choice is "the value judgment of one consumer (i.e. you), and that has nothing to do with economic theory"--it has everything to do with economic theory.
Is stating the fact that we don't live in a world of certainty part of economic theory? Sure.
But my point is that once you accept the fact that we don't live a world of certainty, you have to put up with some level of uncertainty. Deciding what level of uncertainty you are willing to tolerate is a value judgment, to the extent that you can do something to reduce that uncertainty. Choosing a level of uncertainty to stop at is the same as choosing between vanilla or chocolate ice cream -- there is no right answer, and there is no right level of uncertainty to stop at (because complete certainty is unreachable).
That's my point anyway, and I assumed that my point was the one you were responding to.
Misinformation can provide just as much certainty as information. A seller, therefore, is just as much incentivated to misinform when they can get away with it.
If a seller misinforms the public about his products, then he runs the risk of damaging his reputation and being sued for fraud. Buyers can try to make it harder for the seller to lie by reading consumer reviews, demanding that a third party be allowed to audit the seller's inventory, and so-forth. If the buyer feels that the seller is not being open enough, or if the seller feels the buyer is too demanding, then either party may choose to cancel the transaction.
If each consumer's utility function is a fact, then what constitutes "enough information" to choose correctly between a set of alternatives is also a fact.
If we lived in a world of certainty, then everyone could make perfect decisions (i.e. in Austrian speak, the perfect decision for someone is the one that will maximize their psychic income).
However, we don't live in a world of certainty. Maybe you would have been happier if you bought that book at the bookstore, watched that television show, or started a conversation with that cute girl. You can only perform one action at a time, so what was the perfect action at that particular moment? Well, we don't have perfect information, so we'll have to settle for "enough" information. How much is enough? That's subjective.
For example, what information do you think a company should put in their quarterly statement? Well, you might have one opinion, but what does a random man on the street named Joe think? Maybe he agrees with everything you said, but he also wants to know the name of the CEO's goldfish. Joe wants more information than you...does that mean we should do things his way? Or is his opinion worse because his question is irrelevant? Well then, what information is relevant and what information is not? It's all subjective. Also, some information will take more time and resources to gather. Are you, as a shareholder, willing to pay for the resources to gather and organize that information?
Whatever your answers, I think you should be able to spend your money and time according to those answers. I don't think you should be forced to pay into one particular scheme (e.g. SEC).
Social psychology has shown repeated instances where rationality is seriously impaired... When a million idiots do something stupid, you're very likely to think it's a very good idea, too. And the longer you've been doing something stupid without negative consequences, the less likely you are to stop.
What does "more rational" mean? Classical economic theory assumes that someone is rational in that it will buy something at a lesser price if it can, and will attempt to sell the least of something it's got (good, service, labor...) for as much money as it can. That's it. How can you be less rational?
I agree with your second paragraph. In fact, I think your second paragraph explains the problem with your first paragraph: You're never going to find a million people breaking the "rational" assumption. You might find a million people who are being incredibly short-sighted, but that doesn't make them "irrational" in the classical economic sense, as you yourself explained to homer_s.
Liberal economics -- not liberal politics, quite the opposite most of the time -- explicitly derives its conclusions from three assumptions: that individuals make rational decisions, that they have access to information, and that they are free to buy/sell.
Access to information is not an assumption, for the same reason that access to food or water is not an assumption. Information is scarce (as demonstrated by the fact that people lack it), so it can be traded like any other good. If any classical economist has actually claimed that access to information is an assumption, then I guess that's yet another error that has been corrected by the Austrian school of economics. Sellers have an incentive to provide information, because buyers don't like uncertainty. You might not think that sellers in a free market provide enough information, but that is the value judgment of one consumer (i.e. you), and that has nothing to do with economic theory.
As long as there's not perfect information, there's no perfect market, and a "free" market needs watching from time to time.
A free market needs watching by what? A government with perfect information?
Anyway, information takes time and resources to gather, to sort, to analyze, etc. So, the fact that someone lacks information is not a 'market failure', for the same reason that their lack of clothes or food is not a 'market failure'.
For example, let's say you are shopping for a used car. You could give the salesman a list of questions. But some questions will involve more research and time than others. Is it worth his time to answer all of your questions? If he has a lower quality car, is it in his interest to tell you everything he knows? You could pay a unbiased third party to answer your questions, but are you willing to pay for their time? Or would you rather just take a risk, because you believe the risk is small?
What if you pay a third party, but the sales person refuses to cooperate with them? Well, you can always find a dealership that will work with you, so long as you are prepared to pay a high enough price.
Consumers and producers must make decisions every day, and the market that forms will be based on the choices they make. The fact that someone makes a decision based on a lack of information says nothing about the market. It is the participants who are at fault.
Maybe we could call it the 'government' or something.
And if I don't wish to join your 'government'?
Will you let me live peacefully, so long as I do not aggress against anyone?
Or will you tell me to 'join the community or leave', without offering a third choice (e.g. living peacefully on my own property)? If I do not pay into your fund for maintaining roads, because I never walk or drive in your neighborhood, will you throw me in jail? If someone attacks your property, and I do not contribute to your defense (in funding or labor), will you throw me in jail and brand me a traitor?
If so, then I'm against your government as well. Why can't we just have voluntary associations?
Is there a specific person representing this "Austrian school" who is quoted in a reliable source as saying that no action was a valid alternative?
Peter Schiff adheres to the principles of the Austrian School of Economics...here is a recent interview in the Financial Post where he basically says that the government shouldn't be doing anything:
http://www.financialpost.com/story.html?id=911549
You can find older interviews on youtube.com where people laughed at Mr. Schiff's predictions. They're not laughing anymore.
But, hey: Why should we listen to the people who predicted this crisis? That's just crazy.
The sane thing to do here is to put the economic fate of our country in the hands of the people who were caught completely off-guard by the magnitude of this crisis. As long as we do that, I'm sure everything will turn out just fine.
We're no where near the bottom. The pundits who are saying that we are near the bottom are the same ones who thought, a few years ago, that we would have a 'housing slow-down'. On the other hand, the pundits who have been predicting this crisis for years are (in general) believers in the Austrian school of economics, and they say that the more the government tries to stop this correction, the longer it will last. So, you pretty much have two choices: Go with the people who have been consistently wrong in their predictions, or go with the people who have been consistently right.
If you want to follow the smart money, check out some articles by Peter Schiff and Doug Casey. For more in-depth information about the Austrian school of economics, google 'Mises' or 'Rothbard'.
If someone pushes the right buttons enough times, they can generally be driven to kill, hide the victim's body, and lie to the children they claim to love, regardless of whether their lives are threatened.
I agree with what you're saying in general, but let's not forget that in this particular case, we're talking about someone who snapped, and then remained in a 'snapped' state until he was convicted.
Therefore, if you would like to have nuke power, power lines, roads, high speed rail, whatever, you will *need* to force somebody to fucking move for the greater good.
I understand your point, but here is an alternative to Eminent Domain: First, figure out multiple ways to build your large scale project. For example, if you're building a road, maybe you can run it through points A, B, or C. For each possibility, there will probably be a number of properties in the way. Offer all of these property owners a contract, which says something along the lines of this: "I will offer you X dollars right now, in exchange for the right of Eminent Domain over your property for the next 3 years. If you agree and I choose to exercise my right, you will still be justly compensated, and you will also get to keep the advance I am paying you now. However, this deal only applies to the first 3 people who agree. After that, my offers will become lower and lower as more people sign up."
Since no one really knows if they will be part of the last mile or not, they all have a strong incentive to strike a fair deal with you. If you still can't get anyone to sign your offer, than everyone in the area has demonstrated that keeping their property is more important than a very large sum of money. In that case, I would argue that the people have spoken. But, if you do get enough offers, then you can go ahead and build your large-scale project.
Had the Republicans taken a stronger stand on civil liberties while advocating a well regulated economy with noninflationary fiscal policies, and consistently low-interest monetary policies, they would not be in the situation they are in right now.
What sort of monetary policy would be non-inflationary and consistently low-interest? The federal reserve drives interest rates lower by printing money, and printing money results in higher prices (i.e. inflation). I know the Fed has a number of 'tools', but all of these tools boil down to printing money. For example, a lower discount rate means that banks can increase their reserves...which simply means banks can print more money.
By the way, low interest rates are what got us into this housing mess. Most economists act like our decision to keep interest rates low is a trade-off, but it's more like abusing drugs: you get a high from destroying yourself. The reason that printing money lowers interest rates is because the increasing money supply fools the market into thinking we have more savings than we really do. New companies spring up, trying to take advantage of all this new capital that doesn't really exist. The recession is what happens when the market finally sobers up, and realizes that we've used up far too much of our savings. Trying to stop a recession is similar to a drug addict saying, "I'll just keep using, so that my high never wears off!" Eventually, reality will creep up on you, no matter how hard you try to ignore it.
What we should have done, and what we should do in the future, is simple: Leave the money supply alone. You can't create wealth by manipulating the money supply. No, the 'boom' is not worth the inevitable 'bust'. Rather, the 'bust' is the pain we must go through in order to fix the incorrect investments made during the 'boom'. Without the artificial boom, we can have real economic growth without a correction.
One idea would be a MMO that constantly generates random NPCs, and gives each one a random set of goals and relationships. Perhaps an NPC is created who has a goal of making money, and he decides to accomplish this by becoming a shopkeeper. Also, the NPC has a brother and a sister, and if either one is killed, the NPC will attempt to avenge his sibling. How the NPC attempts to avenge the sibling depends on his personality: Perhaps he tries to recruit an army. Perhaps he tries to hire a player to assassinate the murderer. Perhaps, if the murderer has surrounded himself with guards, the NPC will pretend to be a guard and wait for the right moment to strike.
If the developers can create a large enough set of interesting goals and personalities, and if enough of the NPCs are related to each other, a 'never-ending' story could develop. Of course, not every player would be a hero, but is that really a problem? If every player runs into interesting NPCs, then I think every player will have fun.
How many more years are we going to rob Native Americans of livelihood?
"We"? I did not rob Native Americans of anything. It's unfortunate that there is so much suffering in this world, but I certainly don't feel guilty for the actions of my ancestors or my government. If YOU have destroyed someone's civilization, why don't YOU pay some reparations? Fuck writing your congressman. If you live near a reservation, call them and ask how you can help.
So, if you owned a printing shop and I asked you to print promotional material that bashes gays and lesbians, would you do it? Or would you deny me access to your shop due to your own personal opinion?
ALL money based on an arbitrary valuation is inflationary.
What are you talking about? The value of money, like all goods, is based on supply and demand. There is nothing "arbitrary" about supply and demand. Second, money is not inherently inflationary. During most of the 1800's, prices generally fell, just as we would expect with a relatively fixed money supply and an ever-increasing supply of goods.
In fact, banks were collapsing left and right throughout the 1800's when we were solidly on a gold standard.
Fractional reserve banks will often collapse under a "gold standard", because fractional reserve banks, by definition, issue claims that are not backed by any metal. Sadly, people have always blamed a fixed money supply for their economic woes, instead of accepting that money, like all goods, is scarce. Thus, bank runs were "fixed" in the 1900's, not by abolishing fractional reserve banking, but by preventing people from reclaiming their own property. But, just because bank runs are gone, that does not mean we have finally obtained that mythical "free lunch". In modern times, prices always increase, because the money supply constantly increases, and every "boom" created by the federal reserve is always followed by a "bust".
I can't explain everything in this one post, however. If you want to know more, click here.
No, early termination fees are vital. Take away the early termination fee, and the contracts become worthless. The contracts are a way for the phone companies to reduce risk, similar to the way a wheat farmer eliminates price risk by selling his crop forward. Take away the tools of risk management, and you'll make the market less efficient.
I can understand an earlier time when the costs of building the cellular network were to be thought of
Price is determined by supply and demand, not by costs. The cost of the cellular networks is irrelevant. Think about it: When you decide to sell a house, do you determine the asking price by adding up the cost of the original building materials? No, you ask for the highest price you think you can get, regardless of the costs. And that's a good thing! When prices are below the level determined by supply and demand, you get shortages. When prices are above the level determined by supply and demand, you get surpluses. So, by ignoring your costs and setting your price as high as possible, you're helping the market determine the proper price level. Just keep up the good work, and hopefully cellular phone companies will do the same.
"It is true that a patent and a copyright are both exclusive property rights and it is also true that they are both property rights in innovations. But there is crucial difference in their legal enforcement. If an author or a composer believes his copyright is being infringed, and he takes legal action, he must prove that the defendant had 'access' to the work allegedly infringed. If the defendant produces something identical with the plaintiff's work by mere chance, there is no infringement."
"Copyrights, in other words, have their basis in the prosecution of implicit theft. The plaintiff must prove that the defendant stole the former's creation by reproducing it and selling it himself in violation of his or someone else's contract with the original seller. But if the defendant independently arrives at the same creation, the plaintiff has no copyright privilege that could prevent the defendant from using and selling his product."
"The patent is incompatible with the free market precisely to the extent that it goes beyond the copyright. The man who has not bought a machine and who arrives at the same invention independently, will, on the free market, be perfectly able to use and sell his invention. Patents prevents a man from using his invention even though all the property is his and he has not stolen the invention, either explicitly or implicitly, from the first inventor. Patents, therefore, are grants of exclusive monopoly privilege by the state and are invasive of property rights on the market."
"The crucial distinction between patents and copyrights, then, is not that one is mechanical and the other literary. The fact that they have been applied that way is an historical accident and does not reveal the critical difference between them. The critical difference is that copyright is a logical attribute of property right on the free market, while patent is a monopoly invasion of that right."
Instead of paying just labor costs and capital costs, you now have add the expenses for the profit that will be taken as well,
Private does not mean profit-driven; private means 'without force'. For example, Wikipedia is a private organization. Also, profit is not an expense; profit is revenue minus expenses.
The beauty of the profit-driven model is that, over time, scarce resources will tend to be allocated to their most-demanded uses as efficiently as possible. If a company earns large profits by selling highly valued products, then it will attract competition. The increased competition will drive prices lower, which benefits the consumer. Conversely, inefficient companies will lose money until they go out of business. Of course, the point of all this is not to benefit the consumer; rather, investors, entrepreneurs, and workers are striving to make a profit. It just so happens that in their quest to earn a profit, everyone benefits. This makes sense when you realize that by trying to earn a profit, you are, by definition, trying to please someone else.
Now, if you're not interested in profit, then so be it. No one says you have to be profit-driven. But it is pointless to argue that the profit-driven mechanism is inefficient because it does not achieve your desired ends (e.g. building a better space shuttle). The beauty of the market is that it allocates resources to consumer preferences, and those preferences may be different from your preferences.
this quote is of course pure unadulterated bullshit
No, economic sanctions are pure, unadulterated bullshit. When you trade with an innocent consumer in another country, you are doing nothing wrong. Trying to stop two innocent parties from trading, on the other hand, is pure evil.
A Western company that trades with an African company is certainly not "a party to the state-sponsored racism", unless that trade directly aids state-sponsored racism (e.g. selling guns and ammo to the oppressors).
It doesn't matter if sanctions help bring down bad governments or not, any more than it matters if holding a terrorist's family hostage helps brings down the terrorist. The ends do not justify the means.
What is obviously not reasonable is a cheap styrofoam cup that gets soft when it is exposed to that level of heat...
I think the disagreement between those who feel the case is frivolous and those who feel it is not stems from whether you believe there should be different standards for companies and individuals.
For example, suppose that you and I are friends, and you ask me to make you a cup of coffee for the road. I brew some coffee at 200F and serve it to you in a cheap styrofoam cup at 190F. "Be careful, this coffee is hot," I say. "No shit, Sherlock," you reply. As you're sitting in the car, you hold the cup firmly between your knees and remove the top, so you can add sugar and cream. But then you accidentally spill some coffee on yourself. "God dammit, that was 20% my fault," you say through clenched teeth.
You run back to me and scream, "Why did you make the coffee so damn hot? Why did you give me this coffee in a cheap-ass styrofoam cup?" I feel bad for you, but I point out the temperature was reasonable and you saw the styrofoam cup just as clearly as I did. I might be a cheap friend, but it's hard to say that I was at fault.
If you look at the case this way, then you will probably see it as frivolous. However, if you believe the relationship between a company and a consumer should be similar to a parent-child relationship, where the parent looks out for the child, then you will probably see the case as a legitimate one.
Because in every other Western industrialized nation, some sort of socialized medicine has been the reality for decades, and, not coincidentally, they all provide a better standard of care to their citizens for less money than we do here in the USA. (Yes, even with the waiting lists.)
You're talking about the average care provided to citizens. Of course, socialism wins that one. But where do you go when you want the absolute best care as quickly as possible? Capitalism usually wins that one. So when you say a 'better standard', you just mean better for some people, worse for others.
It's true that, under capitalism, there will be multiple standards of health care service, just as we have multiple standards for food, cars, and clothes. As much as we might want everyone to have the best of everything, the reality is that resources are scarce. The only way to have one standard is to ask the people with the best service to make a sacrifice. If they voluntarily do so, then fine. But each man has the right to control the wealth he has created. We have no right to force him to make a sacrifice.
Once you accept that different standards of health care are moral, you must also accept that capitalism is the best way to allocate scarce resources. Under capitalism, hospitals can either make profits or losses. The hospitals with profits will continue to grow, while the ones with losses will eventually go out of business. If health care businesses earn high profits in general, they will attract competition, which lowers prices and increases the quality of service for all consumers (provided that the government does not distort this process, as it does in the USA). Under socialism, there are no profits or losses, so this process does not happen. Bureaucrats merely decide how much funding is "enough", and they do not get the same feedback from consumers. This leads to shortages (i.e. waiting lists) in some areas, and waste in others. Of course, you also see this in capitalist systems with socialist elements (e.g. licensing of doctors causes a shortage of doctors, rather than the free-market preference for an abundance of doctors with varying skill levels).
While it may occasionally inspire violence, taxation is not, in and of itself, violence.
A man walks up to you on the sidewalk. He aims a gun at your head and politely asks for your wallet. Is that violence? Because that's taxation. Violence is what happens when you refuse to pay.
If you think stealing and violence (as in, initiating violence, not responding to violence) are necessary to maintain a civilized society, then say so. There's no need to use a euphemism like "taxation".
so, the good bookshops close and the only winners are the investment banks who own shares in the megastores.
As long as megastores only sell high volume books (e.g. Harry Potter), bookshops can always compete by selling low volume books. If that is not profitable enough, then the bookshops must raise their prices. If consumers won't pay high enough prices to keep the bookstores in business, then clearly bookstores are not as important to society as you assume they are. The market will drive investment towards the goods that consumers are willing to spend their hard-earned cash on, which is exactly what should happen.
Your argument boils down to "listen to my words, not my actions." Your words say bookstores are important to you, but your actions (i.e. what you spend money on) say bookstores are not.
So yes, clever people should get rewards for their clever contributions to society, but these contributions are never so great as to warrant great fortunes.
This doesn't make sense to me. Suppose I create a machine that makes a million widgets, and I sell each one for $1. How can people say that my work was not worth $1 million? If any person did not believe my widget was worth $1, he should not have given me $1. By placing money in my hand, you are stamping your seal of approval on the fact that I am now $1 richer, so a million seals of approval must result in a fortune you approve as well.
By the way, this example does not depend on patents; I'm just assuming each consumer would rather pay $1 than spend the time and labor to research, design, and develop their own machine.
We are forced by circumstances to struggle for living.
Indeed. We are forced by nature to consume. But our fellow man has not forced us to do anything, so he owes us nothing. Most of us choose to work for someone else; the fact that it would be absurd to do anything else shows how much we benefit from our relationship with our employer. Nature may not be fair; it can be very cruel. But that does not entitle you to take another man's work.
No one is irreplacable.
If you start your own company, you can hire a CEO and pay him a working-man's salary, tell him every day he is extremely replacable, and that you think nothing of his so-called "talents". But please remember, the owners of other companies (i.e. stockholders) are also free to pay their CEO a very large sum of money, because they see it as only a fraction of the money he is making them. Is he really worth that much? Who cares? It has nothing to do with you, unless you are a stockholder, in which case you are the one who chose to buy the stock. I see nothing immoral here.
Slashdot Mirror
Well the US 1929 is about as non-interventionist as you can get and see what it did.
Wait; let's back up a few years back before we start talking about Hoover's response. The entire business cycle is caused by fractional reserve banking; that includes the 'boom' and the 'bust'. It is not as though the boom that occurred during the 1920's (and inevitably led to a bust in 1929) was the work of the free market. Even if you want to claim that fractional reserve banks are part of the 'free market', there is no question that the government, through institutions such as the Federal Reserve, has exponentially amplified the effects of fractional reserve banks. During the 19th century, when government intervened less, we had smaller booms and busts.
Now, when the recession began in 1929, Hoover's response was the most interventionist the country had ever seen, at the time. If Hoover had really been non-interventionist, and the recession had turned into the Great Depression anyway, then we would have to throw the Austrian theory of the business cycle in the trash, just as we should have thrown Keynesian theory in the trash during the 70's. Keynesian theory predicted that we couldn't have unemployment and inflation at the same time...so what did the Keynesians do when their theory was proven wrong? They just came up with a new term (stagflation) and proceeded as normal. But Austrian economics is a religion? Riiiiiight.
What's funny is that you say the Austrian theory is a religion, but you bring up a fact that could falsify it (the alleged fact being that the Great Depression occurred even though there was almost zero intervention). The problem is, your fact is false: There was a lot of intervention, starting with Hoover. So, you've demonstrated that Austrian theory is falsifiable, but it has not been falsified. Not bad, given how long the theory has been around. Especially when you compare it to mainstream economics, where they kept saying a year ago, 'Maybe it's different this time! Maybe the greatest housing boom ever will end with a soft landing!' Austrians had to slap their foreheads and say, 'No, it's not different this time. Our theory is just as correct as it ever was.' No one ever listens, do they?
In simpler words: information is extremely costly to produce; the process can go wrong very easily even with high expenditures; and because of this, the market will often make do with what turns out to be misinformation (deliberate or well-intentioned).
Let's assume that what you're saying is all true. Well, government is merely a third party, so all of the criticisms you mentioned apply to the government as well. Therefore, I could replace the phrase "the market" with "humans" in your sentence, and doing so would make me wonder what alternative you are proposing.
This, however, doesn't mean that the claim that there isn't enough information for the consumer to make the correct choice is "the value judgment of one consumer (i.e. you), and that has nothing to do with economic theory"--it has everything to do with economic theory.
Is stating the fact that we don't live in a world of certainty part of economic theory? Sure.
But my point is that once you accept the fact that we don't live a world of certainty, you have to put up with some level of uncertainty. Deciding what level of uncertainty you are willing to tolerate is a value judgment, to the extent that you can do something to reduce that uncertainty. Choosing a level of uncertainty to stop at is the same as choosing between vanilla or chocolate ice cream -- there is no right answer, and there is no right level of uncertainty to stop at (because complete certainty is unreachable).
That's my point anyway, and I assumed that my point was the one you were responding to.
Misinformation can provide just as much certainty as information. A seller, therefore, is just as much incentivated to misinform when they can get away with it.
If a seller misinforms the public about his products, then he runs the risk of damaging his reputation and being sued for fraud. Buyers can try to make it harder for the seller to lie by reading consumer reviews, demanding that a third party be allowed to audit the seller's inventory, and so-forth. If the buyer feels that the seller is not being open enough, or if the seller feels the buyer is too demanding, then either party may choose to cancel the transaction.
If each consumer's utility function is a fact, then what constitutes "enough information" to choose correctly between a set of alternatives is also a fact.
If we lived in a world of certainty, then everyone could make perfect decisions (i.e. in Austrian speak, the perfect decision for someone is the one that will maximize their psychic income).
However, we don't live in a world of certainty. Maybe you would have been happier if you bought that book at the bookstore, watched that television show, or started a conversation with that cute girl. You can only perform one action at a time, so what was the perfect action at that particular moment? Well, we don't have perfect information, so we'll have to settle for "enough" information. How much is enough? That's subjective.
For example, what information do you think a company should put in their quarterly statement? Well, you might have one opinion, but what does a random man on the street named Joe think? Maybe he agrees with everything you said, but he also wants to know the name of the CEO's goldfish. Joe wants more information than you...does that mean we should do things his way? Or is his opinion worse because his question is irrelevant? Well then, what information is relevant and what information is not? It's all subjective. Also, some information will take more time and resources to gather. Are you, as a shareholder, willing to pay for the resources to gather and organize that information?
Whatever your answers, I think you should be able to spend your money and time according to those answers. I don't think you should be forced to pay into one particular scheme (e.g. SEC).
Social psychology has shown repeated instances where rationality is seriously impaired... When a million idiots do something stupid, you're very likely to think it's a very good idea, too. And the longer you've been doing something stupid without negative consequences, the less likely you are to stop.
...) for as much money as it can. That's it. How can you be less rational?
What does "more rational" mean? Classical economic theory assumes that someone is rational in that it will buy something at a lesser price if it can, and will attempt to sell the least of something it's got (good, service, labor
I agree with your second paragraph. In fact, I think your second paragraph explains the problem with your first paragraph: You're never going to find a million people breaking the "rational" assumption. You might find a million people who are being incredibly short-sighted, but that doesn't make them "irrational" in the classical economic sense, as you yourself explained to homer_s.
Liberal economics -- not liberal politics, quite the opposite most of the time -- explicitly derives its conclusions from three assumptions: that individuals make rational decisions, that they have access to information, and that they are free to buy/sell.
Access to information is not an assumption, for the same reason that access to food or water is not an assumption. Information is scarce (as demonstrated by the fact that people lack it), so it can be traded like any other good. If any classical economist has actually claimed that access to information is an assumption, then I guess that's yet another error that has been corrected by the Austrian school of economics. Sellers have an incentive to provide information, because buyers don't like uncertainty. You might not think that sellers in a free market provide enough information, but that is the value judgment of one consumer (i.e. you), and that has nothing to do with economic theory.
As long as there's not perfect information, there's no perfect market, and a "free" market needs watching from time to time.
A free market needs watching by what? A government with perfect information?
Anyway, information takes time and resources to gather, to sort, to analyze, etc. So, the fact that someone lacks information is not a 'market failure', for the same reason that their lack of clothes or food is not a 'market failure'.
For example, let's say you are shopping for a used car. You could give the salesman a list of questions. But some questions will involve more research and time than others. Is it worth his time to answer all of your questions? If he has a lower quality car, is it in his interest to tell you everything he knows? You could pay a unbiased third party to answer your questions, but are you willing to pay for their time? Or would you rather just take a risk, because you believe the risk is small?
What if you pay a third party, but the sales person refuses to cooperate with them? Well, you can always find a dealership that will work with you, so long as you are prepared to pay a high enough price.
Consumers and producers must make decisions every day, and the market that forms will be based on the choices they make. The fact that someone makes a decision based on a lack of information says nothing about the market. It is the participants who are at fault.
Maybe we could call it the 'government' or something.
And if I don't wish to join your 'government'?
Will you let me live peacefully, so long as I do not aggress against anyone?
Or will you tell me to 'join the community or leave', without offering a third choice (e.g. living peacefully on my own property)? If I do not pay into your fund for maintaining roads, because I never walk or drive in your neighborhood, will you throw me in jail? If someone attacks your property, and I do not contribute to your defense (in funding or labor), will you throw me in jail and brand me a traitor?
If so, then I'm against your government as well. Why can't we just have voluntary associations?
Is there a specific person representing this "Austrian school" who is quoted in a reliable source as saying that no action was a valid alternative?
Peter Schiff adheres to the principles of the Austrian School of Economics...here is a recent interview in the Financial Post where he basically says that the government shouldn't be doing anything:
http://www.financialpost.com/story.html?id=911549
You can find older interviews on youtube.com where people laughed at Mr. Schiff's predictions. They're not laughing anymore.
But, hey: Why should we listen to the people who predicted this crisis? That's just crazy.
The sane thing to do here is to put the economic fate of our country in the hands of the people who were caught completely off-guard by the magnitude of this crisis. As long as we do that, I'm sure everything will turn out just fine.
We're no where near the bottom. The pundits who are saying that we are near the bottom are the same ones who thought, a few years ago, that we would have a 'housing slow-down'. On the other hand, the pundits who have been predicting this crisis for years are (in general) believers in the Austrian school of economics, and they say that the more the government tries to stop this correction, the longer it will last. So, you pretty much have two choices: Go with the people who have been consistently wrong in their predictions, or go with the people who have been consistently right.
If you want to follow the smart money, check out some articles by Peter Schiff and Doug Casey. For more in-depth information about the Austrian school of economics, google 'Mises' or 'Rothbard'.
If someone pushes the right buttons enough times, they can generally be driven to kill, hide the victim's body, and lie to the children they claim to love, regardless of whether their lives are threatened.
I agree with what you're saying in general, but let's not forget that in this particular case, we're talking about someone who snapped, and then remained in a 'snapped' state until he was convicted.
Therefore, if you would like to have nuke power, power lines, roads, high speed rail, whatever, you will *need* to force somebody to fucking move for the greater good.
I understand your point, but here is an alternative to Eminent Domain: First, figure out multiple ways to build your large scale project. For example, if you're building a road, maybe you can run it through points A, B, or C. For each possibility, there will probably be a number of properties in the way. Offer all of these property owners a contract, which says something along the lines of this: "I will offer you X dollars right now, in exchange for the right of Eminent Domain over your property for the next 3 years. If you agree and I choose to exercise my right, you will still be justly compensated, and you will also get to keep the advance I am paying you now. However, this deal only applies to the first 3 people who agree. After that, my offers will become lower and lower as more people sign up."
Since no one really knows if they will be part of the last mile or not, they all have a strong incentive to strike a fair deal with you. If you still can't get anyone to sign your offer, than everyone in the area has demonstrated that keeping their property is more important than a very large sum of money. In that case, I would argue that the people have spoken. But, if you do get enough offers, then you can go ahead and build your large-scale project.
Had the Republicans taken a stronger stand on civil liberties while advocating a well regulated economy with noninflationary fiscal policies, and consistently low-interest monetary policies, they would not be in the situation they are in right now.
What sort of monetary policy would be non-inflationary and consistently low-interest? The federal reserve drives interest rates lower by printing money, and printing money results in higher prices (i.e. inflation). I know the Fed has a number of 'tools', but all of these tools boil down to printing money. For example, a lower discount rate means that banks can increase their reserves...which simply means banks can print more money.
By the way, low interest rates are what got us into this housing mess. Most economists act like our decision to keep interest rates low is a trade-off, but it's more like abusing drugs: you get a high from destroying yourself. The reason that printing money lowers interest rates is because the increasing money supply fools the market into thinking we have more savings than we really do. New companies spring up, trying to take advantage of all this new capital that doesn't really exist. The recession is what happens when the market finally sobers up, and realizes that we've used up far too much of our savings. Trying to stop a recession is similar to a drug addict saying, "I'll just keep using, so that my high never wears off!" Eventually, reality will creep up on you, no matter how hard you try to ignore it.
What we should have done, and what we should do in the future, is simple: Leave the money supply alone. You can't create wealth by manipulating the money supply. No, the 'boom' is not worth the inevitable 'bust'. Rather, the 'bust' is the pain we must go through in order to fix the incorrect investments made during the 'boom'. Without the artificial boom, we can have real economic growth without a correction.
One idea would be a MMO that constantly generates random NPCs, and gives each one a random set of goals and relationships. Perhaps an NPC is created who has a goal of making money, and he decides to accomplish this by becoming a shopkeeper. Also, the NPC has a brother and a sister, and if either one is killed, the NPC will attempt to avenge his sibling. How the NPC attempts to avenge the sibling depends on his personality: Perhaps he tries to recruit an army. Perhaps he tries to hire a player to assassinate the murderer. Perhaps, if the murderer has surrounded himself with guards, the NPC will pretend to be a guard and wait for the right moment to strike.
If the developers can create a large enough set of interesting goals and personalities, and if enough of the NPCs are related to each other, a 'never-ending' story could develop. Of course, not every player would be a hero, but is that really a problem? If every player runs into interesting NPCs, then I think every player will have fun.
How many more years are we going to rob Native Americans of livelihood?
"We"? I did not rob Native Americans of anything. It's unfortunate that there is so much suffering in this world, but I certainly don't feel guilty for the actions of my ancestors or my government. If YOU have destroyed someone's civilization, why don't YOU pay some reparations? Fuck writing your congressman. If you live near a reservation, call them and ask how you can help.
So, if you owned a printing shop and I asked you to print promotional material that bashes gays and lesbians, would you do it? Or would you deny me access to your shop due to your own personal opinion?
ALL money based on an arbitrary valuation is inflationary.
What are you talking about? The value of money, like all goods, is based on supply and demand. There is nothing "arbitrary" about supply and demand. Second, money is not inherently inflationary. During most of the 1800's, prices generally fell, just as we would expect with a relatively fixed money supply and an ever-increasing supply of goods.
In fact, banks were collapsing left and right throughout the 1800's when we were solidly on a gold standard.
Fractional reserve banks will often collapse under a "gold standard", because fractional reserve banks, by definition, issue claims that are not backed by any metal. Sadly, people have always blamed a fixed money supply for their economic woes, instead of accepting that money, like all goods, is scarce. Thus, bank runs were "fixed" in the 1900's, not by abolishing fractional reserve banking, but by preventing people from reclaiming their own property. But, just because bank runs are gone, that does not mean we have finally obtained that mythical "free lunch". In modern times, prices always increase, because the money supply constantly increases, and every "boom" created by the federal reserve is always followed by a "bust".
I can't explain everything in this one post, however. If you want to know more, click here.
Early termination fee's are ridiculous
No, early termination fees are vital. Take away the early termination fee, and the contracts become worthless. The contracts are a way for the phone companies to reduce risk, similar to the way a wheat farmer eliminates price risk by selling his crop forward. Take away the tools of risk management, and you'll make the market less efficient.
I can understand an earlier time when the costs of building the cellular network were to be thought of
Price is determined by supply and demand, not by costs. The cost of the cellular networks is irrelevant. Think about it: When you decide to sell a house, do you determine the asking price by adding up the cost of the original building materials? No, you ask for the highest price you think you can get, regardless of the costs. And that's a good thing! When prices are below the level determined by supply and demand, you get shortages. When prices are above the level determined by supply and demand, you get surpluses. So, by ignoring your costs and setting your price as high as possible, you're helping the market determine the proper price level. Just keep up the good work, and hopefully cellular phone companies will do the same.
As a fellow anarcho-capitalist, I'd encourage you to read what Murray Rothbard has to say about this topic:
http://www.ccsindia.org/ccsindia/lacs/7patents_copyrights.pdf
"It is true that a patent and a copyright are both exclusive property rights and it is also true that they are both property rights in innovations. But there is crucial difference in their legal enforcement. If an author or a composer believes his copyright is being infringed, and he takes legal action, he must prove that the defendant had 'access' to the work allegedly infringed. If the defendant produces something identical with the plaintiff's work by mere chance, there is no infringement."
"Copyrights, in other words, have their basis in the prosecution of implicit theft. The plaintiff must prove that the defendant stole the former's creation by reproducing it and selling it himself in violation of his or someone else's contract with the original seller. But if the defendant independently arrives at the same creation, the plaintiff has no copyright privilege that could prevent the defendant from using and selling his product."
"The patent is incompatible with the free market precisely to the extent that it goes beyond the copyright. The man who has not bought a machine and who arrives at the same invention independently, will, on the free market, be perfectly able to use and sell his invention. Patents prevents a man from using his invention even though all the property is his and he has not stolen the invention, either explicitly or implicitly, from the first inventor. Patents, therefore, are grants of exclusive monopoly privilege by the state and are invasive of property rights on the market."
"The crucial distinction between patents and copyrights, then, is not that one is mechanical and the other literary. The fact that they have been applied that way is an historical accident and does not reveal the critical difference between them. The critical difference is that copyright is a logical attribute of property right on the free market, while patent is a monopoly invasion of that right."
Instead of paying just labor costs and capital costs, you now have add the expenses for the profit that will be taken as well,
Private does not mean profit-driven; private means 'without force'. For example, Wikipedia is a private organization. Also, profit is not an expense; profit is revenue minus expenses.
The beauty of the profit-driven model is that, over time, scarce resources will tend to be allocated to their most-demanded uses as efficiently as possible. If a company earns large profits by selling highly valued products, then it will attract competition. The increased competition will drive prices lower, which benefits the consumer. Conversely, inefficient companies will lose money until they go out of business. Of course, the point of all this is not to benefit the consumer; rather, investors, entrepreneurs, and workers are striving to make a profit. It just so happens that in their quest to earn a profit, everyone benefits. This makes sense when you realize that by trying to earn a profit, you are, by definition, trying to please someone else.
Now, if you're not interested in profit, then so be it. No one says you have to be profit-driven. But it is pointless to argue that the profit-driven mechanism is inefficient because it does not achieve your desired ends (e.g. building a better space shuttle). The beauty of the market is that it allocates resources to consumer preferences, and those preferences may be different from your preferences.
this quote is of course pure unadulterated bullshit
No, economic sanctions are pure, unadulterated bullshit. When you trade with an innocent consumer in another country, you are doing nothing wrong. Trying to stop two innocent parties from trading, on the other hand, is pure evil.
A Western company that trades with an African company is certainly not "a party to the state-sponsored racism", unless that trade directly aids state-sponsored racism (e.g. selling guns and ammo to the oppressors).
It doesn't matter if sanctions help bring down bad governments or not, any more than it matters if holding a terrorist's family hostage helps brings down the terrorist. The ends do not justify the means.
What is obviously not reasonable is a cheap styrofoam cup that gets soft when it is exposed to that level of heat...
I think the disagreement between those who feel the case is frivolous and those who feel it is not stems from whether you believe there should be different standards for companies and individuals.
For example, suppose that you and I are friends, and you ask me to make you a cup of coffee for the road. I brew some coffee at 200F and serve it to you in a cheap styrofoam cup at 190F. "Be careful, this coffee is hot," I say. "No shit, Sherlock," you reply. As you're sitting in the car, you hold the cup firmly between your knees and remove the top, so you can add sugar and cream. But then you accidentally spill some coffee on yourself. "God dammit, that was 20% my fault," you say through clenched teeth.
You run back to me and scream, "Why did you make the coffee so damn hot? Why did you give me this coffee in a cheap-ass styrofoam cup?" I feel bad for you, but I point out the temperature was reasonable and you saw the styrofoam cup just as clearly as I did. I might be a cheap friend, but it's hard to say that I was at fault.
If you look at the case this way, then you will probably see it as frivolous. However, if you believe the relationship between a company and a consumer should be similar to a parent-child relationship, where the parent looks out for the child, then you will probably see the case as a legitimate one.
Because in every other Western industrialized nation, some sort of socialized medicine has been the reality for decades, and, not coincidentally, they all provide a better standard of care to their citizens for less money than we do here in the USA. (Yes, even with the waiting lists.)
You're talking about the average care provided to citizens. Of course, socialism wins that one. But where do you go when you want the absolute best care as quickly as possible? Capitalism usually wins that one. So when you say a 'better standard', you just mean better for some people, worse for others.
It's true that, under capitalism, there will be multiple standards of health care service, just as we have multiple standards for food, cars, and clothes. As much as we might want everyone to have the best of everything, the reality is that resources are scarce. The only way to have one standard is to ask the people with the best service to make a sacrifice. If they voluntarily do so, then fine. But each man has the right to control the wealth he has created. We have no right to force him to make a sacrifice.
Once you accept that different standards of health care are moral, you must also accept that capitalism is the best way to allocate scarce resources. Under capitalism, hospitals can either make profits or losses. The hospitals with profits will continue to grow, while the ones with losses will eventually go out of business. If health care businesses earn high profits in general, they will attract competition, which lowers prices and increases the quality of service for all consumers (provided that the government does not distort this process, as it does in the USA). Under socialism, there are no profits or losses, so this process does not happen. Bureaucrats merely decide how much funding is "enough", and they do not get the same feedback from consumers. This leads to shortages (i.e. waiting lists) in some areas, and waste in others. Of course, you also see this in capitalist systems with socialist elements (e.g. licensing of doctors causes a shortage of doctors, rather than the free-market preference for an abundance of doctors with varying skill levels).
While it may occasionally inspire violence, taxation is not, in and of itself, violence.
A man walks up to you on the sidewalk. He aims a gun at your head and politely asks for your wallet. Is that violence? Because that's taxation. Violence is what happens when you refuse to pay.
If you think stealing and violence (as in, initiating violence, not responding to violence) are necessary to maintain a civilized society, then say so. There's no need to use a euphemism like "taxation".
so, the good bookshops close and the only winners are the investment banks who own shares in the megastores.
As long as megastores only sell high volume books (e.g. Harry Potter), bookshops can always compete by selling low volume books. If that is not profitable enough, then the bookshops must raise their prices. If consumers won't pay high enough prices to keep the bookstores in business, then clearly bookstores are not as important to society as you assume they are. The market will drive investment towards the goods that consumers are willing to spend their hard-earned cash on, which is exactly what should happen.
Your argument boils down to "listen to my words, not my actions." Your words say bookstores are important to you, but your actions (i.e. what you spend money on) say bookstores are not.
So yes, clever people should get rewards for their clever contributions to society, but these contributions are never so great as to warrant great fortunes.
This doesn't make sense to me. Suppose I create a machine that makes a million widgets, and I sell each one for $1. How can people say that my work was not worth $1 million? If any person did not believe my widget was worth $1, he should not have given me $1. By placing money in my hand, you are stamping your seal of approval on the fact that I am now $1 richer, so a million seals of approval must result in a fortune you approve as well.
By the way, this example does not depend on patents; I'm just assuming each consumer would rather pay $1 than spend the time and labor to research, design, and develop their own machine.
We are forced by circumstances to struggle for living.
Indeed. We are forced by nature to consume. But our fellow man has not forced us to do anything, so he owes us nothing. Most of us choose to work for someone else; the fact that it would be absurd to do anything else shows how much we benefit from our relationship with our employer. Nature may not be fair; it can be very cruel. But that does not entitle you to take another man's work.
No one is irreplacable.
If you start your own company, you can hire a CEO and pay him a working-man's salary, tell him every day he is extremely replacable, and that you think nothing of his so-called "talents". But please remember, the owners of other companies (i.e. stockholders) are also free to pay their CEO a very large sum of money, because they see it as only a fraction of the money he is making them. Is he really worth that much? Who cares? It has nothing to do with you, unless you are a stockholder, in which case you are the one who chose to buy the stock. I see nothing immoral here.
I believe it's a reference to this: http://www.youtube.com/watch?v=Jx3m5nFpRcQ&search=putin%20kisses%20boy