Originally posted by no1marauderYou wrote "In fact, laissez faire policies ignore significant externalities which are borne by society."
In fact, laissez faire policies ignore significant externalities which are borne by society. Any society necessarily "forces" individuals to act in ways besides their own interests, but that is a necessary outcome of the Social Contract. Besides people are often willing to act besides their own interests anyway, so why should what is adjudged collectivel ...[text shortened]... in the legitimate purview of society to organize its economic system as the majority deem fit.
Of course anarchy quickly leads to some sort of totalitarianism, usually by the most powerful factions. Some form of government is required, the question being how much? Then the question of whether Society is the priority or the interests of the individuals within it. The choice of the former almost always leads to larger, more complex government and less individual liberty. Conversely greater individual liberty almost always leads to societal gains.
Now you go on to plead, "Besides people are often willing to act besides their own interests anyway, so why should what is adjudged collectively good be sacrificed to a platitude?"
If people are willing to cooperate voluntarily for the common good, then there is no necessity to force such cooperation via government. Even in large, complex societies such as the US, the majority of decisions to buy, sell, or contract are done between willing individuals. In most cases, both parties act in their own best interests, and both parties are happy with the transaction, or it doesn't happen.
You correctly assert, "corporations are completely artificial entities which society allows to be created merely because society has collectively judged that they fulfill a useful purpose."
Sure they are created by government and may be abolished. It ought to be recognized what that "useful purpose" is and was.
It is twofold:
1. Accumulation of capital, to enhance productivity.
2. Limitation of liability to those of the business.
The injustice in whimsically changing laws is that the society that depends on the government to maintain order as well as stability, tends to see it as a populist strong arm, which giveth and taketh away as it sees fit. Such governmental systems usually fail quickly as no one in their right mind invests where there is a lack of stability.
Originally posted by WulebgrFor a recent historical example try Zimbabwe.
Wow! That's a lot to chew on, especially as none of it can be found in any reasonable histories.
Contemporary liberalism (collectivism) sees good goals and intentions, and pragmatically seeks to reach those goals. Pragmatism is "the end justifies the means".
Good achieved for one group at the expense of the rights of others can't be truly good, and usually it doesn't work as planned anyway.
Compare for example the workers paradise that is Cuba, to the conditions of the exiles who had their private property confiscated by Castro. In the end good intentions and promises of equality are lies, and those who believe are suckers.
Originally posted by normbenignI was referring to the economic concept of externalities which: are defined as third party (or spill-over) effects arising from the production and/or consumption of goods and services for which no appropriate compensation is paid.
You wrote "In fact, laissez faire policies ignore significant externalities which are borne by society."
Of course anarchy quickly leads to some sort of totalitarianism, usually by the most powerful factions. Some form of government is required, the question being how much? Then the question of whether Society is the priority or the interests of th ...[text shortened]... fail quickly as no one in their right mind invests where there is a lack of stability.
Externalities can cause market failure if the price mechanism does not take into account the full social costs and social benefits of production and consumption.
http://tutor2u.net/economics/content/topics/externalities/what_are_externalities.htm
Quite simply, market based system have no way of dealing with externalities short of coercive government measures. If it saves money for chemical company to dump its poisonous waste products into the local town's water supply, then them's the breaks in extreme laissez faire.
So you don't think governments should enforce contracts since most people abide by them voluntarily? I suppose you don't like stop lights at intersections either as they restrict "individual liberty".
The collective will of the people can take into account the general desirability of stable policies, but if past policies are not functioning to the satisfaction of the majority, then they are probably going to be changed. It makes little sense to praise the virtues of democracy if what is meant is that democracy can only act on items that are trivial.
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There is no simple, cut and dried definition of the problem, nor such a solution.
However, one may say with a great deal of confidence that the move to deregulate was unwise.
When the US gov imposes liability on parties that have now or ever had owner/operator/generator involvement with toxic waste that must be cleaned up using public funds, the US gov seeks compensation from whatever pocket is deep enough to cover the public's money. Then the parties in the chain of liability may fight it out among themselves as to the fairness of the allocation and seek contribution from one another based on equitable principles.
I'd like to see the financial sector subject to the same kind of model. That is, one of the key causes of the Great Collapse, still unfolding, was the failure of the US Gov (or, indeed, any government) to regulate or prohibit financial institutions from transferring in commerce debt instruments and incomprehensibly complex securitized packages of debt instruments WITHOUT ANY RESIDUAL LEGAL LIABILITY remaining with those who sold such debt instruments. There being no legal liability, then fraud and abuse were inevitable. There being no enforcement even of existing regulations designed to prevent this lack of accountability, these fictitious sorts of non-underwritten debts, there was no incentive to comply, no deterrence against unacceptable, basically fraudulent behavior.
The remedy could be as extreme as piercing the corporate veil that protects corporate executives against individual liability. Or the remedy could be simply to require compensation from those who unjustly profited personally from unacceptable practices.
It is either that or put people like Mr. Thain up against the wall and shoot them. It may yet come to that if the system cannot reform itself in time.
What has happened should give the lie, finally, to a lot of misconceptions about how well the market self-regulates, or self-corrects as well as how well the least amount of government really works.
As a regulatory attorney who has spent too many years being held back and prevented from doing the kind of enforcement I've thought required by law, I look forward to this new Administration's attempt to reform the system and make government regulation in the financial sector work effectively.
And if we cannot get the money back from these fat assed execs who defrauded us all and brought this disaster on us, there is always that wall out there. As a former member of a military rifle team, I'm glad to volunteer my services, if all else fails.
Originally posted by no1marauder"I was referring to the economic concept of externalities"
I was referring to the economic concept of externalities which: are defined as third party (or spill-over) effects arising from the production and/or consumption of goods and services for which no appropriate compensation is paid.
Externalities can cause market failure if the price mechanism does not take into account the full social costs and socia ...[text shortened]... es of democracy if what is meant is that democracy can only act on items that are trivial.
Certainly some economic decisions may effect others besides those contracting. Simply, it is government's duty to prevent the abuse of individual rights, so actions which do so, such as poisoning a water supply would be rightfully illegal and criminally punishable.
It is questionable if a complex maze of local, state, and federal laws restricting liberty, and serving various political constituencies is better than some very basic laws against the exploitation of individual rights.
I have no problem with limited government, as anarchy is much worse.
I said contracts should be enforced. Some practical restrictions such as traffic lights are not objectionable. However these are obeyed by the majority of people on a voluntary basis, and most of the enforcement of traffic rules has little or nothing to do with safety, but are methods of extracting additional money from individuals.
The "collective will of the people" is a dangerous thing, basically mob rule. That will is volatile, thoughtless and emotional. Democracy is the same, a dangerous and short lived form of government, unless it is seriously limited by Constitutional law as it is in the US.
Originally posted by ScriabinThe problem is that most of the complexity which aids and abets is the creation of government in the first place.
There is no simple, cut and dried definition of the problem, nor such a solution.
However, one may say with a great deal of confidence that the move to deregulate was unwise.
When the US gov imposes liability on parties that have now or ever had owner/operator/generator involvement with toxic waste that must be cleaned up using public funds, the US go ...[text shortened]... rmer member of a military rifle team, I'm glad to volunteer my services, if all else fails.
Ayn Rand pointed out in an essay on capitalism that under US law a seller of goods could run afoul of the law by three pricing practices:
1. Setting prices higher than competitors
2. Setting prices the same as competitors
3. Setting prices lower than competitors
The only way to be certain of legality is not to sell anything.
Law and implementing regulations are needlessly complex. They are written by mostly lawyers who if they leave legislative bodies will either lobby the new legislators, or litigate. Complexity and lack of clarity are a lawyer's wet dream.
To say that the financial meltdown is the result of deregulation is to ignore the Community Revitalization Act (Carter Administration), and the Combining of Fannie and Freddie into a semi government conglomerate (Clinton Administration). These are not free market, deregulating moves, but putting coyotes in charge of guarding the hen house. What was the thrust of CVA, and Freddie and Fannie? To make loans to people with no credit, no documented income. This is something that a private banker wouldn't do except regulations forced them to do it.
If you live in or near a large US city, you can see the results of this stuff long before the banking meltdown a few months ago. The staggeringly common thing is you'll find huge tracts of land and burned out houses. One group benefiting from no documented income loans were drug dealers. Instead of buying a house for cash out of which to do business, no down payment and a thirty year mortgage saved a lot of cash for the dealer, and if the law got too close, you burned it down and collected the insurance money. Even poor homeowners got into the arson for profits business, which was made possible by the CVA.
As Ronald Wilson Reagan once said, "Government is not the solution, government is the problem."
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Originally posted by normbenignI think you have your head so far up your rear end you should get a plate glass window installed in your navel to be able to see where you are going.
The problem is that most of the complexity which aids and abets is the creation of government in the first place.
Ayn Rand pointed out in an essay on capitalism that under US law a seller of goods could run afoul of the law by three pricing practices:
1. Setting prices higher than competitors
2. Setting prices the same as competitors
3. Setting pric onald Wilson Reagan once said, "Government is not the solution, government is the problem."
My wife is a mortgage banking expert of more than 35 years in the private sector and the last two in the Office of Thrift Supervision as an advisor to the Director of that agency.
Banks like countrywide, indymac, and all the others now in such dire straits are responsible for enthusiastically making subprime loans and passing on the worthless securities. Wall street insiders fashioned the debt instruments.
You are quite deluded to believe the nonsense you are parroting from some right wing fruitcake commentator.
Of course fannie and freddie acted reprehensibly -- Clinton and his people functioned as would moderate Republicans. That's what made Republicans hate him so much -- he stole the middle out from under them, leaving only the nutcake right.
So Raines and Mudd at fannie were told by their professional risk managers not to buy up all these bad subprime loans or sell them off to investors -- and they ignored the advice in order to boost the bottom line and thereby line their own pockets with obscene bonuses and compensation packages.
Government did not create this crisis. The private sector did and then sabotaged the proper function of government that could have stopped it but for the lack of regulatory enforcement.
Ayn Rand? indeed -- what rot.
I've been a regulatory enforcement attorney for 20 years -- most of them I've not been allowed to take the actions or promote the concept of vigorous and aggressive law enforcement.
When I was allowed to do the right thing, noncompliance was deterred, compliance with the law rose and the playing field between those who spent what they had to to stay in compliance versus those who would not was made level.
It isn't a liberal vs conservative issue. It is a question of respect for law or respect only for self interested greed.
This collapse was caused by unrestrained, over the top capitalistic greed and irresponsibility.
Yes, the law and legal issues related to just about anything become increasingly complex. Deal with it -- it is what it is.
Originally posted by normbenignThis is an interesting statement, and the core of libertarianism (or classical liberalism, if you wish), I feel. However, I more and more wonder how people can seriously argue this. Imagine a country run the way you propose, and image someone born in a poor family. No access to education, because that's been privatized. No access to health care, because that's been privatized. How "free" are these people? All they can do is get some lousy job. Now imagine the same person in a society which is based on social liberalism (tip: look in Europe). This person will have access to education and health care and will be able to make something of his life if he works for it. Now imagine a rich person in the same social liberalist society. He will have to pay more taxes, so he might have to buy a BMW 5 series instead of a BMW 7 series. Where is the amazing cost in liberty that warrants the exploitation of the poor?
Of course anarchy quickly leads to some sort of totalitarianism, usually by the most powerful factions. Some form of government is required, the question being how much? Then the question of whether Society is the priority or the interests of the individuals within it. The choice of the former almost always leads to larger, more complex government an ...[text shortened]... ndividual liberty. Conversely greater individual liberty almost always leads to societal gains.
Originally posted by KazetNagorraIn a free society all those like yourself that believe in free health care are free to join the free health care club, you just wouldn't be able to force your values on others.
This is an interesting statement, and the core of libertarianism (or classical liberalism, if you wish), I feel. However, I more and more wonder how people can seriously argue this. Imagine a country run the way you propose, and image someone born in a poor family. No access to education, because that's been privatized. No access to health care, because ...[text shortened]... W 7 series. Where is the amazing cost in liberty that warrants the exploitation of the poor?
Originally posted by WajomaFree health care clubs already exist, they're called insurance companies and they still leave the poor with no health care.
In a free society all those like yourself that believe in free health care are free to join the free health care club, you just wouldn't be able to force your values on others.
Originally posted by WajomaI showed it alright, it's just that you responded similarly to how a fundie responds to evolution theory; eyes closed and LA LA LA while the foundations of the fairy castle of libertarianism come crumbling down.
There's nothing to be answered you failed to show it's relevance to anything except itself, and there was some mention that it might be useful to play with in psychology.