Thursday, January 08, 2009

Objectivism & Economics, Part 15

Schumpeter’s challenge. The economist Joseph Schumpeter created quite a stir in the forties when he warned that “the capitalist order tends to destroy itself.” Schumpeter issued this warning despite his belief in what he described as “the impressive economic and the still more impressive cultural achievement of the capitalist order and at the immense promise held out by both.” Capitalism would destroy itself because it would undermine its own “protecting strata” and “institutional framework.” One of the reasons he gave for this pessimistic assessment seems rather prescient in relation to the current economic crisis:
Capitalist activity, being essentially “rational,” tends to spread rational habits of mind and to destroy those loyalties and those habits of super- and subordination that are nevertheless essential for the efficient working of the institutionalized leadership of the producing plant: no social system can work which is based exclusively upon a network of free contracts between (legally) equal contracting parties and in which everyone is supposed to be guided by nothing except his own (short-run) utilitarian ends.


In one sentence Schumpeter has put his finger on the greatest flaw of capitalist order. Contrary to what Rand and her followers believe, “rational” self-interest is not an entirely benign psychological force. Rand’s faith in self-interest (and it is only a faith) is not warranted by the facts. In the first place, it is absurd to regard human desires and sentiments as rational. A desire or sentiment can only be criticized in reference to an opposing desire or sentiment. As Spinoza famously put it: “an emotion cannot be destroyed nor controlled except by a contrary and stronger emotion.” Consequently, rationality, as an ideal, can only apply to the means by which desires and sentiments are satisfied. Yet this is not all. Even if there were (per impossible) such a thing as a “rational end,” it is very doubtful that very many human beings would be interested in pursuing it. If we make history and experience our guide in such matters—and whatever guide could possibly lead us to the truth besides history and experience?—then we are forced to conclude that the majority of human beings are largely non-rational in their conduct and are probably not even capable of being rational about any issue in the least complex (as rational methods of analysis tend to break down when applied to complex situations). When Schumpeter talks about “rational” habits of mind, he is not writing in the Randian sense of the word. He means something more along the lines of rationalism—i.e., the belief that no doctrine is true unless it can be proved “verbally,” through clever patter and other exercises of blatant sophistry. As a consequence of this sort of perfervid rationalism, individuals no longer believe in “higher” values or “lofty” moral ideas. Short-term self-interest and “immediate gratification” become the main desideratum, with sophistry being brought in to give the whole thing a window dressing of moral justification.

We see this played out in the financial sector. The birth of complex financial instruments based on computer generated formulas has allowed finance capitalism to mask what ultimately amounts to a vast ponzi scheme which yields huge profits in the short-run but ends in bankruptcy and dishonor. This sort of finance capitalism fits into what is known as the “Minsky cycle”:
Firms participating in the early stages of the cycle typically are not leveraged; Minsky called them hedged firms because their cash receipts cover their cash outlays. The success of the first movers draws in additional players. Speculative firms then engage in leverage to the point where they must borrow to meet some of their interest payments—usually borrowing in short-term markets to finance higher-yielding long-term positions. None of this is irrational behavior; market players are chasing short-term gains, and some of them are getting very rich.

The final stages of the Minsky cycle arrive with a proliferation of Ponzi firms, which must borrow to meet all their interest payments, so their debt burden continuously increases. At some point, a disruptive event occurs, … and markets abruptly reprice—the further along in the cycle, the more violent the repricing. [Charles Morris, The Trillion Dollar Meltdown, p. 133-4]

In other words, what we find in the world of high finance is a system which, by giving individuals the hope of huge rewards in the short-run, encourages them to behave in a ways that are destructive in the long-run. It takes strength of character to resist such huge short-run gains. Unfortunately, the very success of capitalism tends to create a prosperous society that weakens the moral fibre of individuals. Add to this situation the tendency of individuals—particularly intelligent individuals—to cloak their real motives under a thick shroud of ingenious rationalizations (e.g., “portfolio theory,” the “efficient market hypothesis,” “laissez-faire” ideology, etc.), and we have all the elements required to create market failure leading to widespread and socially harmful externalities, as can be readily corroborated by examining the 2008-2009 financial crisis.

120 comments:

Red Grant said...

___________________________________

Add to this situation the tendency of individuals—particularly intelligent individuals—to cloak their real motives under a thick shroud of ingenious rationalizations (e.g.,

“portfolio theory,”... - Greg
___________________________________




Are you here talking about MPT, Modern Portfolio Theory?


I knew MPT was partially based on flawed assumption right off the bat, when it was the "required" reading for many serious MBA students and how the "rational investor" should stand by the tenet of MPT.

Markowitz got Nobel prize.

___________________________________

...the “efficient market hypothesis,” ... - Greg
___________________________________




One of the leading proponents of that BS was Prof. Burton Malkiel from Yale.

Sometime in early to mid 90's Malkiel disowned his own "Random Walk Down the Street", claiming only thing constant was the change in an interview.

I've tried to find the link, but couldn't.

Now, I see he's still paddling the very same book he himself disowned more than a decade ago.


Didn't someone say for the right price, everyone's a whore?

JayCross said...

"I would rather be exposed to the inconveniences attending too much liberty than to those attending too small a degree of it."
- Jefferson

You have a point here: capitalism is always at risk of becoming victimized by its own success. However, I see no better way of organizing a society yet devised. As Milton Friedman was always quick to point out, no system or philosophy can eliminate greed, short-term gratification chasing, etc. Any system must take these things as a given.

Damien said...

JayCross,

I agree. What else is there that is humane, what else is their that doesn't violate individual rights, and what else is there that works?

Damien said...

Greg,

Is there anything that you think can be done to keep the market from collapsing completely?

gregnyquist said...

"Is there anything that you think can be done to keep the market from collapsing completely?"

First we have to determine whether the market will collapse "completely." Initially, I was worried that that might happen, but recently I have come across some information that suggests that it isn't so. Most of the banks affected by the crisis are Wall Street banks. Many Main Street banks are doing just fine, having sold most of their toxic paper to Wall Street. So it doesn't look like our entire banking system will collapse. The Wall Street system of high finance capitalism is in serious danger, but whether that will jeopardize the system as a whole, I don't think anyone can say. The fact of the matter is that much of the Capitalist High Finance is rotten to the core, and rather than resuscitating it through bailouts, the government should be helping the system conduct an orderly liquidation of many of these firms and seriously reforming the legal framework that governs high finance. We need more government oversight to limit all the fraudulent financial practices that have been allowed to flourish, the over-leveraging, the conflicts of interest that arise between speculation and banking, and all the graft that arises from the so-called agency problem. Instead, what the federal government wants to do is try keep the current system going. That seems to be the point of all these bailouts and stimulus packages—which, incidentally, are incredibly dangerous and risky and probably a precursor to government bankruptcy and hyperinflation (and the end of the United States as a free country). Wall Street and the public sector have become addicted to credit inflation. They've expanded credit to the breaking point: the nation is being crushed by mounting debts, much of it "toxic" in nature. We need to start liquidating these bad debts and improving our credit position: only then can we bring about a full-fledged economic recovery.

Damien said...

greg,

Sounds like it might work.

Red Grant said...

___________________________________

What else is there that is

humane,... - Damien
___________________________________





Was robbing and killing the Natives for their land humane?







___________________________________

... what else is their that doesn't violate

individual rights

,...? - Damien
___________________________________





First of all, what are individual rights?



and who decides what are individual rights?

Red Grant said...

___________________________________

JayCross,

I agree. What else is there that is humane, what else is their that doesn't violate individual rights, and

what else is there that


works? - Damien

1/10/2009 09:15:00 AM
-----------------------------------
Greg,

Is there anything that you think can be done to keep the market from collapsing completely? - Damien

1/10/2009 09:22:00 AM
___________________________________

Damien said...

Red Grant

you said,
--------------------------------------------------------
Was robbing and killing the Natives for their land humane?
--------------------------------------------------------
no but that wasn't capitalism.

Red Grant said...

___________________________________

Red Grant

you said,
--------------------------------------------------------
Was robbing and killing the Natives for their land humane?
--------------------------------------------------------
no but that wasn't capitalism. - Damien
___________________________________




Then who were they?

Who took the possession of the land after the killing and the robbery?





___________________________________

... what else is their that doesn't violate

individual rights

,...? - Damien
___________________________________





First of all, what are individual rights?



and who decides what are individual rights?





___________________________________

JayCross,

I agree. What else is there that is humane, what else is their that doesn't violate individual rights, and

what else is there that


works? - Damien

1/10/2009 09:15:00 AM
-----------------------------------
Greg,

Is there anything that you think can be done to keep the market from collapsing completely? - Damien

1/10/2009 09:22:00 AM
___________________________________

Damien said...

Red Grant,

The killing of native Americans, was not because of capitalism, and neither was slavery. Both slavery and killing people to take stuff from them, happens in non capitalist societies as well. America today is a capitalist society, yet today, we do not approve of slavery or slaughtering people to take their land.

Red Grant said...

___________________________________

Red Grant,

The killing of native Americans, was not because of capitalism,... - Damien
___________________________________





Then, because of what?

Why did the killing take place?

Who ended up taking over their land?

Who benefited from it directly?


___________________________________


...and neither was slavery. - Damien
___________________________________




So slavery played little role in the accumulation of captial and private indivdual wealth of the South?


...not to mention providing the majority of federal tax?




___________________________________

America today is a capitalist society,.... - Damien
___________________________________





Since when U.S. has been a capitalist society?

___________________________________

....yet today, we do not approve of slavery or slaughtering people to take their land. - Damien
___________________________________




So what kind of economic system did U.S. practice when U.S. had slavery and slaughtered peoples to take their land?




___________________________________

... what else is their that doesn't violate

individual rights

,...? - Damien
___________________________________





First of all, what are individual rights?



and who decides what are individual rights?





___________________________________

JayCross,

I agree. What else is there that is humane, what else is their that doesn't violate individual rights, and

what else is there that


works? - Damien

1/10/2009 09:15:00 AM
-----------------------------------
Greg,

Is there anything that you think can be done to keep the market from collapsing completely? - Damien

1/10/2009 09:22:00 AM
-----------------------------------
America today is a capitalist society,.... - Damien
___________________________________

Damien said...

Red Grant,

The US was a capitalist society when it practiced slavery and slaughtered native Americans, but that doesn't prove that capitalism caused either of those things.

Red Grant said...

___________________________________

Red Grant,

The US was a capitalist society when it practiced slavery and slaughtered native Americans, but that doesn't prove that capitalism caused either of those things.

1/10/2009 09:48:00 PM
___________________________________




Then what caused the slavery

and robbery and killing the Natives for their land?


A hint, Damien.


Whoever did those, did they do it for free?

or

for profit?






___________________________________

JayCross,

I agree. What else is there that is humane, what else is their that doesn't violate individual rights, and

what else is there that


works? - Damien

1/10/2009 09:15:00 AM
-----------------------------------
Greg,

Is there anything that you think can be done to keep the market from collapsing completely? - Damien

1/10/2009 09:22:00 AM
-----------------------------------
America today is a capitalist society,.... - Damien
___________________________________

Damien said...

Red Grant,

profit, yes was part of the motive for slavery and taking Indian land in America when it was going on. But that still doesn't prove that capitalism caused those things. For one thing, why isn't there still race based slavery in America today? Why doesn't America go around and take other peoples land today? America is still a capitalist society. Couldn't racism have at least as much to do with it? Both blacks and Indians were regarded by whites as inherently inferior races. Plus both the conflict with native Americans and black slavery started before America was an independent society. When those things started America was part of Briton, and Briton was not a capitalist society at the time. It was mercantilist.
There are similarities between mercantilism and capitalism as economic systems, but they are not the same thing.

Red Grant said...

___________________________________
profit, yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
-----------------------------------
Couldn't racism have at least as much to do with it? - Damien
___________________________________





U.S. around 1920's was still an institutional racist society.

Still, there was neither slavery nor government sponsored killing and the robbery of the Natives for their land.


If racism had as much as to blame as the profit,

then

how come there was neither slavery nor the robbery and the killings of the Natives for their land when the racism was still running rampant in 1920's?





___________________________________

For one thing, why isn't there still race based slavery in America today? - Damien
___________________________________




Do you think slavery today as it was practiced then would be profitable today?





___________________________________

Why doesn't America go around and take other peoples land today? - Damien
___________________________________





Do you think that would be profitable today?



___________________________________

Plus both the conflict with native Americans and black slavery started before America was an independent society.

When those things started America was part of Briton, and Briton was not a capitalist society at the time. - Damien
___________________________________




Hadn't the British abolished the slavery before U.S. declared independence?





___________________________________

It was mercantilist.
There are similarities between mercantilism and capitalism as economic systems, but they are not the same thing. - Damien
___________________________________




Another word, mercantalist British abolished the slavery,

but capitalist U.S. defended slavery?


Didn't the South believe in free trade?

Wasn't economic foundation of the South based on slavery-based plantation system?




___________________________________

profit, yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
___________________________________





So do you think U.S. should give the land back to the Natives?


So do you think U.S. should make reparations to the Black descendents of U.S.?




___________________________________

profit, yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
___________________________________





Isn't capitalism ultimately based on profit incentive?

Red Grant said...

___________________________________

Plus both the conflict with native Americans and black slavery started before America was an independent society.

When those things started America was part of Briton, and Briton was not a capitalist society at the time. - Damien
___________________________________




Hadn't the British abolished the slavery before U.S. declared independence? - Red Grant
___________________________________



Sorry, British abolished the slavery later.

But still that was way before U.S. the "capitlist" state.

Red Grant said...

___________________________________

When those things started America was part of Briton, and Briton was not a capitalist society at the time. - Damien
___________________________________





So since when British became a capitalist nation from being a mercantalist nation?






___________________________________

... what else is their that doesn't violate

individual rights

,...? - Damien
___________________________________





First of all, what are individual rights?



and who decides what are individual rights?






___________________________________


...and neither was slavery. - Damien
___________________________________




So slavery played little role in the accumulation of captial and private indivdual wealth of the South?


...not to mention providing the majority of federal tax?






___________________________________

JayCross,

I agree. What else is there that is humane, what else is their that doesn't violate individual rights, and

what else is there that


works? - Damien

1/10/2009 09:15:00 AM
-----------------------------------
Greg,

Is there anything that you think can be done to keep the market from collapsing completely? - Damien

1/10/2009 09:22:00 AM
-----------------------------------
America today is a capitalist society,.... - Damien
___________________________________

JayCross said...

Red,

Profits are only half of the story in capitalist economies. Losses play an equally important role by signaling where not to invest (or where to invest more carefully) in the future.

JayCross said...

Greg,

What do you think of various attempts at circulating alternative currencies (such as Liberty Dollars)that are backed by gold and silver? The Liberty Dollar people tout their coins as "inflation-proof" currency because it's backed by real gold and silver in an independent warehouse.

If that currency somehow overtook federal reserve notes as the most popular currency, would that really end inflation as we know it?

Red Grant said...

___________________________________

profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
-----------------------------------
Red Grant,

The killing of native Americans, was not because of capitalism, -and neither was slavery. - Damien
-----------------------------------
Red Grant

you said,
--------------------------------------------------------
Was robbing and killing the Natives for their land humane?
--------------------------------------------------------
no but that wasn't capitalism. - Damien
-----------------------------------
Red Grant,

The US was a capitalist society when it practiced slavery and slaughtered native Americans, but that doesn't prove that capitalism caused either of those things. - Damien
___________________________________














Damien, please contrast your statements above with your statements from previous threads.




___________________________________

In fact instead of Altruism, you could just as convincingly argue that human selfishness causes the famine, because communism eliminates the largest "selfish" motive of all,

the profit motive.


Its primarily

the lack of the profit motive

that creates the mass shortages in countries that have implemented communist economics. - Damien on 7/27/2008 11:32:00 PM

Objectivism & History, Part 1
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
___________________________________




You have clearly stated what distingusihes communism from capitalism was

profit motive.


You also clearly stated, profit motive was a factor in slavery and the killing/robbery of the Natives for their land.








But wait, there's more.


___________________________________

Slavery was always immoral,

regardless of what society may have thought. - Damien on 12/06/2008 08:57:00 PM

"Slow read with commentary:"The Ethics of Emergencies" (3)"
-----------------------------------

You have a point here: capitalism is always at risk of becoming victimized by its own success. However, I see no better way of organizing a society yet devised. - Jay
-----------------------------------


JayCross,

I agree. What else is there that is

humane,

what else is their that doesn't violate

individual rights,... - Damien
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
-----------------------------------

Its primarily

the lack of the profit motive

that creates the mass shortages in countries that have implemented communist economics. - Damien on 7/27/2008 11:32:00 PM
___________________________________





Another word, you acknowledge (more or less unwittingly)

capitalism was at least partially responisble for slavery, which you regard as immoral.

Yet, you still claim capitalism is humane

and

doesn't violate individual rights.

Red Grant said...

___________________________________

Red,

Profits are only half of the story in capitalist economies. Losses play an equally important role by signaling where not to invest (or where to invest more carefully) in the future. - Jay
___________________________________




Do people invest to make a profit

or

do people invest to avoid a loss?


Which one comes first?







When people invest in stocks, currencies, or homes,


are their primary consideration based on how much profit they could make?

or

based on how much loss they could avoid?



All these so-called "investors" who bet on subprime loans,

were they thinking about how they could avoid loss

or

how much profit they could make?




All those people who lost their money with Madoff,


were they thinking of avoiding a loss?

or

were they thinking of those steady 1% a month return?

Damien said...

Red Grant,

you asked
---------------------------------------------------
Hadn't the British abolished the slavery before U.S. declared independence?
---------------------------------------------------

I don't think so. If they had and we were still part of Briton, why did we still have slavery?

You said,
---------------------------------------------------
You have clearly stated what distinguishes communism from capitalism was

profit motive.


You also clearly stated, profit motive was a factor in slavery and the killing/robbery of the Natives for their land.
---------------------------------------------------

Yes the profit motive is one of the things that distinguishes the capitalist from the communist economic system, and under communism, not allowing people to profit from their labor led to shortages.

But what capitalist society today, still practices slavery. Not to mention I never said that the profit motive always leads to moral behavior. For example the professional hit man, maybe in it for the money and my kill innocent people for profit with no questions asked.

I define capitalism as a state where at majority of the economy is free from government and people can profit from their labor, and improve their circumstances through hard work. Slavery is anti theatrical to the ideals of a free market society. A slave doesn't profit from his labor, (unless you count being fed by his master) and he often isn't allowed to better himself at all.

Plus, plenty of socialist societies practice slavery including North Korea. According to a wikipidia article on North Korea,
---------------------------------------------------------
Multiple international human rights organizations, including Amnesty International and Human Rights Watch, accuse North Korea of having one of the worst human rights records of any nation.[18] North Koreans have been referred to as "some of the world's most brutalized people", due to the severe restrictions placed on their political and economic freedoms.[19] North Korean defectors have testified to the existence of prison and detention camps with an estimated 150,000 to 200,000 inmates (about 0.85% of the population), and have reported torture, starvation, rape, murder, medical experimentation, forced labour, and forced abortions.
---------------------------------------------------------
Source.

Now isn't forced labor, slavery?

gregnyquist said...

"What do you think of various attempts at circulating alternative currencies (such as Liberty Dollars)that are backed by gold and silver?"

While gold and silver are an excellent way to store value, I don't a currency "backed" by gold or silver replacing the dollar. "Backed" by whom? If the dollar completely collapsed and the U.S. government went bankrupt, this would be tantamount to a break down of political authority. There would be no way to enforce any kind of contractual obligations to exchange gold for these alternate currencies. Moreover, you have the problem of counterfeiting and money printing. Governments aren't the only entities capable of debasing the money stock for short-term advantage.

Red Grant said...

___________________________________

I don't think so. If they had and we were still part of Briton, why did we still have slavery? - Damien
___________________________________




Indeed, why did the capitalist U.S. still have slavery when merchantalist British abolished slavery?

especially when it was no longer part of that mercantalist British?




___________________________________

But what capitalist society today, still practices slavery. - Damien
___________________________________




Would it be profitable for capitalist nations to practice slavery today?


If not, then obviously capitalist nations would not practice slavery.


Of course, back then in U.S. it was profitable to practice slavery and commit the robbery and killing of the Natives.

You admitted this already.


___________________________________

profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
___________________________________



The issue is whether a capitalism will allow slavery and mass murder and robbery

if doing so would be profitable.


Not whether capitalist nations today practice slavery.



___________________________________

Not to mention I never said that the profit motive always leads to moral behavior. - Damien
-----------------------------------
Yes the profit motive is one of the things that distinguishes the capitalist from the communist economic system, - Damien
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
___________________________________






Please contrast your own replies to Jay below.




___________________________________

You have a point here: capitalism is always at risk of becoming victimized by its own success. However, I see no better way of organizing a society yet devised. - Jay
-----------------------------------


JayCross,

I agree. What else is there that is

humane,

what else is their that doesn't violate

individual rights,... - Damien
___________________________________





You clearly stated capitalism is humane and doesn't violate individual rights.

Yet you also unwittingly admit it was the profit motive which distinguishes capitalism from communism that was at partially responsible for robbery and the killing of the Natives and the slavery, which you regard as immoral.


So how can humane economic system that doesn't violate individual rights was at leat partially responsible for behavior that you regard as immoral?





___________________________________

Plus, plenty of socialist societies practice slavery including North Korea. According to a wikipidia article on North Korea, ... - Damien
___________________________________




Please show me the quotes where and when I ever said or even implied that socialist nations do not practice slavery?

Red Grant said...

___________________________________

Greg,

What do you think of various attempts at circulating alternative currencies (such as Liberty Dollars)that are backed by gold and silver? The Liberty Dollar people tout their coins as "inflation-proof" currency because it's backed by real gold and silver in an independent warehouse.

If that currency somehow overtook federal reserve notes as the most popular currency, would that really end inflation as we know it?
- jay
___________________________________




Adoption of gold/silver bullions didn't do much to tame the inflation in Spain.





http://www.straightdope.com/columns/read/611/what-happened-to-all-the-
gold-spain-got-from-the-new-world





___________________________________

There would be no way to enforce any kind of contractual obligations to exchange gold for these alternate currencies. Moreover, you have the problem of counterfeiting and money printing. Governments aren't the only entities capable of debasing the money stock for short-term advantage. - Greg
___________________________________




Indeed. That is the reason why I no longer support the return of gold standard, which I did at one time.

Red Grant said...

___________________________________

Red Grant,

The US was a capitalist society when it practiced slavery and slaughtered native Americans,... - Damien
-----------------------------------
Slavery is anti theatrical to the ideals of a free market society. - Damien
___________________________________



Now, Damien, you're clearly contradicting yourself here.

Unless you believe free market society

is not a capitalist society.


and/or


capitalist society could practice against the ideals of free market society.




___________________________________

Not to mention I never said that the profit motive always leads to moral behavior.

For example the professional hit man, maybe in it for the money and my kill innocent people for profit with no questions asked. - Damien
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
-----------------------------------

JayCross,

I agree. What else

[besides capitalism]

is there that is humane, what else

[besides capitalism]

is their that doesn't violate individual rights, ... - Damien
-----------------------------------
Red Grant,

The US was a

capitalist society

when it practiced slavery and slaughtered native Americans,... -

Damien
-----------------------------------
Slavery is anti theatrical to the ideals of a free market society. - Damien
___________________________________





Now, here, Damien, you're contradicting yourself, again. you claim capitalism is humane and doesn't violate individual rights,

yet, you also claim capitalist society, independent from merchantalist society, following its capitalist logic, the profit motive, maintained slavery, which you regard as immoral, and carried out killing and robbery of the Natives for their land.

Damien said...

Red Grant,

I'm not contradicting myself and no society that has ever existed fully lived up to its ideals, what ever they were.

Red Grant said...

___________________________________

Red Grant,

The US was a capitalist society when it practiced slavery and slaughtered native Americans,... - Damien
-----------------------------------
Slavery is anti theatrical to the ideals of a free market society. - Damien
___________________________________



Now, Damien, you're clearly contradicting yourself here.

Unless you believe free market society

is not a capitalist society.


and/or


capitalist society could practice against the ideals of free market society.




___________________________________

Not to mention I never said that the profit motive always leads to moral behavior.

For example the professional hit man, maybe in it for the money and my kill innocent people for profit with no questions asked. - Damien
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
-----------------------------------

JayCross,

I agree. What else

[besides capitalism]

is there that is humane, what else

[besides capitalism]

is their that doesn't violate individual rights, ... - Damien
-----------------------------------
Red Grant,

The US was a

capitalist society

when it practiced slavery and slaughtered native Americans,... -

Damien
-----------------------------------
Slavery is anti theatrical to the ideals of a free market society. - Damien
___________________________________





Now, here, Damien, you're contradicting yourself, again. you claim capitalism is humane and doesn't violate individual rights,

yet, you also claim capitalist society, independent from merchantalist society, following its capitalist logic, the profit motive, maintained slavery, which you regard as immoral, and carried out killing and robbery of the Natives for their land.

Red Grant said...

___________________________________

Red Grant,

I'm not contradicting myself... - Damien
-----------------------------------

Red Grant,

The US was a

capitalist society

when it practiced slavery and slaughtered native Americans,... - Damien
-----------------------------------
Slavery is anti theatrical to the ideals of a free market society. - Damien
-----------------------------------

Red Grant,

I'm not contradicting myself... - Damien
___________________________________










___________________________________

Red Grant,

I'm not contradicting myself... - Damien
-----------------------------------
Not to mention I never said that the profit motive always leads to moral behavior. - Damien
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
-----------------------------------
Yes the

profit motive

is one of the things that distinguishes the

capitalist

from the communist economic system, - Damien
-----------------------------------
JayCross,

I agree. What else

[besides capitalism]

is there that is humane, what else

[besides capitalism]

is their that doesn't violate individual rights, ... - Damien
-----------------------------------
Red Grant,

The US was a

capitalist society

when it practiced slavery and slaughtered native Americans,... - Damien
-----------------------------------
Red Grant,

I'm not contradicting myself... - Damien
___________________________________








___________________________________

...and no society that has ever existed fully lived up to its[capitalism's?] ideals,

what ever they were. - Damien
___________________________________




Okay, so what were/are the ideals of capitalism?

JayCross said...

Red,

You seem to be arguing not against capitalism as conceived by Ayn Rand (which would have in no way permitted slavery) but against the nascent government that existed early in America's history.

Therefore your agrgument doesn't damage the case for Randian capitalism. It only damages the case for inconsistent capitalism, which is what we had then and still have now.

JayCross said...

Red,

To answer your questions from earlier: virtually everyone who invests in bonds does so to avoid losses. They are seen as "safe" investments that wont gain much but wont lose anything since they are guaranteed by the issuer.

Virtually everyone who puts money in a savings account does so to avoid losses. (Then again, we have a pretty low savings rate so that might not be a very good example.)

Virtually everyone who invests according to the "diversification" theory does so to avoid losses. The rationale is that their portfolio will remain intact unless the entire market tanks.

Michael Prescott said...

Greg Nyquist wrote, "... all these bailouts and stimulus packages—which, incidentally, are incredibly dangerous and risky and probably a precursor to government bankruptcy and hyperinflation (and the end of the United States as a free country)."

I think the word "probably" is overkill, don't you?

Red Grant said...

___________________________________

Red,

You seem to be arguing not against capitalism as conceived by Ayn Rand (which would have in no way permitted slavery)... - jay
___________________________________





Ayn Rand also put Aristotle at the highest pedestal.

Aristotle defended the institution of slavery based on "logic" and "reason".

Where and when did Ayn Rand disown Aristotle with regards to slavery?


Perhaps do you think Ayn Rand was either too ignorant of her favorite philosopher's view on slavery

or

perhaps she was in denial?



___________________________________

Therefore your agrgument doesn't damage the case for Randian capitalism. - jay
___________________________________




Yes, it damages "Randian Capitalism" from its very own "philosophical" foundation.

Since "Randian Capitalism" owes its very existence to the "philosophy" of Ayn Rand, which in turn, owes to Aristotle, who defended

the institution of slavery based on "reason" and "logic",

which Ayn Rand failed to disown without explicitly denouncing Aristotle on that score,


"Randian Capitalism" that doesn't allow slavery amounts to a fraud.





___________________________________

It only damages the case for inconsistent capitalism, which is what we had then and still have now. - Jay
___________________________________



Actually, that would be one thing I might agree with Ayn Rand and you, too.


Based on my experience both online, and in real life, both personally, and through reading,


most people who claim to believe in "free market" economy and the virute of capitalism are nothing more than

frauds, whether they be self-deluded, or self-aware.




One example would be Mark Cuban.


He claims to be an admirer of Ayn Rand, yet, he had no problem asking the public to subsidize the facility for his Dallas Maveriks


to the tune of $125 million.


Atlas begs, well, more likely

Atlas cons, or extorts.





___________________________________

Red,

To answer your questions from earlier: virtually everyone who invests in bonds does so to avoid losses. - Jay
___________________________________




You gotta be kidding, right?


Haven't you even heard of Junk Bonds?


Would one rather be safer in the common stock shares of a solidly profitably company with little or no debt selling at P/E ratio that that would allow earnings yield rate higher or equal to bond yield?


or

would one be safer in betting on discount bonds of a bankrupt company, or company on the way to bankruptcy?


For example,

you could buy the bonds of GM,

or

you could buy the common stocks of Birkshire Hathaway?


Which one would be safter as far as the avoidance of loss is concerned?



___________________________________

They are seen as "safe" investments that wont gain much but wont lose anything since they are guaranteed by the issuer. - jay
___________________________________




Wow, aren't you being naive here?


If one buys the steeply discounted bonds of a company about to go bankrupt, and if somehow the company survives.

One could make a killing, could be as high as 1000%!

or

if the bankrupt company has enough assets to pay for its bond obligation,

again, one buying the discounted bonds could still make a killing.



Of course, if the company goes bankrupt, and there weren't enough assest to take care of the bond holders, and the bond holders's discounted price isn't enough to offset and there are other prior obligations before the bond holders, then yes,

the bond holders could lose everything, especially after the lawyer's fees get involved.



___________________________________

Virtually everyone who puts money in a savings account does so to avoid losses. - jay
___________________________________




No, it's for the convenience of maintaining liquidity and perhaps collecting some measley interest, the proverbial "peanuts".




If one puts the avoidance of loss as the first mandate, then

one would buy some precious metal, bullions, and keep some of it in the safe deposit box.

and some other in some very private place.





___________________________________

(Then again, we have a pretty low savings rate so that might not be a very good example.) - jay
___________________________________




Indeed, it's poorly chosen example.




___________________________________

Virtually everyone who invests according to the "diversification" theory does so to avoid losses. - jay
___________________________________




Not true.


They subscribe to the "diversification theory" to gain maximum potential profit at a given potential risk. (Well, at least, that's the theory anyway.)


If they really want to minimize the chance of loss of the original principal, then they better buy

precious metals and keep it at safe desposit box

and other locations known only to them.




___________________________________

The rationale is that their portfolio will remain intact unless the entire market tanks. - Jay
___________________________________





The entire market could tank, especially in case of political collapse.


That is no way to minimize the chance of the loss of the original principal.

Better way would be buying precious metals and either keep it at safe deposit box in case of non-political collapse.

or

keep it at an unknown location in case of political collapse.

Wells said...

On the Killing of the Native Americans for their land and the Transatlantic (Or Trans Sahara for that matter) Slave Trade, and the relation of these events to the economic doctrine of Capitalism.

One of these things can be blamed on capitalism, the other cannot.
The one that cannot is the Killing of the Indians. Imperialists from every age, and followers of every economist have done similar atrocities within their spheres of influence. There is nothing essentially different between what the United States did to its native population, and what the Romans tried to do to the Germans, way back in the day. You don't need capitalism to settle land and kill people that get in your way, Even an Assyrian can do it.

The Transatlantic Slave Trade however is a product of capitalism. There were investors for the slave ships, insurance contracts written for said ships, markets where slaves could be bought and sold. A great deal of high finance is needed to keep something like that in operation. Also, what, to a Twenty-First-Century person will sound weird, is that for the slave trade, economic actors were following the rules of their societies, and probably didn't feel anything morally wrong in anything they did. They paid what they negotiated, they honored their contracts, etc, etc. The Machinery of capitalism was used to facilitate the slave trade.

In the previous case (Atrocities against the Indians) the guiding factor was people, maybe under cover of law, maybe not, going somewhere and killing people to get their way. In the latter case (The slave trade), most of the beneficiaries benefited without kidnapping anyone, and lots of times without even owning a slave. They benefited as investors in some minute part of the affair.

gregnyquist said...

Greg Nyquist wrote, "... probably a precursor to government bankruptcy ..."

Michael: "I think the word 'probably' is overkill, don't you?"

Well, perhaps—although, I would be relunctant to say it's a certainty. At least in the short-run, I am not a 100% sure that they couldn't buy some more time with what they're doing, perhaps even significant time (i.e., more than a few years). After all, they've made it this far, which in itself is rather amazing, given the extreme level of dysfunctional choices being made throughout the economy (particularly in the realm of debt leveraging.) Of course, in the long run the chickens must come home to roost. But if that long run is five to ten years from now, there doesn't seem to me much merit in predicting it.

Michael Prescott said...

"Well, perhaps—although, I would be relunctant to say it's a certainty. "

I guess I didn't make myself clear. What I meant was that it's an overstatement to say that current policies are probably the precursor to hyperinflation and social collapse. I would say that while such a dire outcome is possible, it's most unlikely. The likeliest outcome is that this crisis, like so many others, will take care of itself and we'll continue to muddle through.

If I thought it was probable that the combined eforts of the industrial world to stave off collapse would fail, then I'd convert all my investmenets into canned food and ammunition. But I'm not doing that.

Red Grant said...

___________________________________

One of these things can be blamed on capitalism, the other cannot.
The one that cannot is the Killing of the Indians. Imperialists from every age, and followers of every economist have done similar atrocities within their spheres of influence. There is nothing essentially different between what the United States did to its native population, and what the Romans tried to do to the Germans, way back in the day. - Wells
___________________________________






Wells, my point in making capitalism responsible for the killing and robbery of the Natives are on these:


1. Damien claimed that captalism is humane and doesn't violate individual rights, which are

clearly false.

2. Damien claimed the profit motive is one of the factors that distingushe capitalism from communism.

3. The motive behind the killing and the robbery of the Natives was clearly profit-driven.

It wasn't just grand imperial ambition that drove U.S. to Manfest Destiny.

U.S. would not have killed and robbed the Natives for their land, if those land would have had no productive economic needs,

and

individual settlers and other private enterprises would have had no profit-incentives in doing so.


After all, no settler or businessmen were forced to go west to settle the land taken from the Natives.


They did so voluntarily, and their motive?

Profit for themselves.

Not for the sake of some grand imperial ambition.


They didn't do it for free.

They did it for their own individual economic interests per capitalist logic.




___________________________________

In the previous case (Atrocities against the Indians) the guiding factor was people, maybe under cover of law, maybe not, going somewhere and killing people to

get their way. - Wells
___________________________________





Did getting their way include profit for themselves?

or


did they do it for free?







___________________________________

In the latter case (The slave trade), most of the beneficiaries benefited without kidnapping anyone, and lots of times without even owning a slave. They benefited as investors in some minute part of the affair. - Wells
___________________________________






Indeed.


You can apply the same logic with regard to the Natives.



All those settlers getting the land, growing crops, building towns, paying tax out of the income produced from the land taken from the Natives,

Government subsidizing the railroad with tax, some of which were from the tax payed by the settlers out of the income produced from the land taken from the Natives,

Railroad employing workers other than settlers, paying them salaries partially out of the subsidies from the government,


Railroad employees paying for their needs and wants out of the salaries payed by the Railroad,

Saloon keepers, shopkeepers relying on both settlers and railroad employees and other businesses for their profit,


All these had economic rationale based capitalist profit incentives.

Damien said...

Red Grant,

If Capitalism really does violate individual rights, by enslaving people and killing them for their land, where is there a capitalist society that does that stuff today, and where its people do it for a profit? And how is it violating people's rights, if its people can't legally practicing either of those things?

Damien said...
This comment has been removed by the author.
Damien said...

Red Grant,

Also even if you can find one, how come, both slavery and murdering people for their land and is illegal in America, Canada, and throughout western Europe today?

Red Grant said...

___________________________________

Red Grant,

If Capitalism really does violate individual rights, by enslaving people and killing them for their land, where is there a capitalist society that does that stuff today, and where its people do it for a profit? And how is it violating people's rights, if its people can't legally practicing either of those things? - Damien
___________________________________




Damien, I've already given you the answers to your questions, which you already have asked earlier.


I'll just recap below.

___________________________________

For one thing, why isn't there still race based slavery in America today? - Damien
-----------------------------------


Do you think slavery today as it was practiced then would be profitable today? - Red Grant on1/11/2009 08:40:00 AM
___________________________________




___________________________________

Why doesn't America go around and take other peoples land today? - Damien
-----------------------------------


Do you think that would be profitable today? - Red Grant on 1/11/2009 08:40:00 AM
___________________________________





___________________________________

But what capitalist society today, still practices slavery. - Damien
___________________________________




Would it be profitable for capitalist nations to practice slavery today?


If not, then obviously capitalist nations would not practice slavery.


Of course, back then in U.S. it was profitable to practice slavery and commit the robbery and killing of the Natives.

You admitted this already.


___________________________________

profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
___________________________________



The issue is whether a capitalism will allow slavery and mass murder and robbery

if doing so would be profitable.


Not whether capitalist nations today practice slavery.



___________________________________

Not to mention I never said that the profit motive always leads to moral behavior. - Damien
-----------------------------------
Yes the profit motive is one of the things that distinguishes the capitalist from the communist economic system, - Damien
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
___________________________________






Please contrast your own replies to Jay below.




___________________________________

You have a point here: capitalism is always at risk of becoming victimized by its own success. However, I see no better way of organizing a society yet devised. - Jay
-----------------------------------


JayCross,

I agree. What else is there that is

humane,

what else is their that doesn't violate

individual rights,... - Damien
___________________________________





You clearly stated capitalism is humane and doesn't violate individual rights.

Yet you also unwittingly admit it was the profit motive which distinguishes capitalism from communism that was at partially responsible for robbery and the killing of the Natives and the slavery, which you regard as immoral.


So how can humane economic system that doesn't violate individual rights was at leat partially responsible for behavior that you regard as immoral? - Red Grant on 1/11/2009 02:29:00 PM





___________________________________

Red Grant,

Also even if you can find one, how come, both slavery and murdering people for their land and is illegal in America, Canada, and throughout western Europe today? - Damien
___________________________________





Again, I've already given you the answer before.



Would it be profitable to engage in such behavior....

today?

Red Grant said...

___________________________________

Red Grant,

The US was a capitalist society when it practiced slavery and slaughtered native Americans,... - Damien
-----------------------------------
Slavery is anti theatrical to the ideals of a free market society. - Damien
___________________________________



Now, Damien, you're clearly contradicting yourself here.

Unless you believe free market society

is not a capitalist society.


and/or


capitalist society could practice against the ideals of free market society.




___________________________________

Not to mention I never said that the profit motive always leads to moral behavior.

For example the professional hit man, maybe in it for the money and my kill innocent people for profit with no questions asked. - Damien
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
-----------------------------------

JayCross,

I agree. What else

[besides capitalism]

is there that is humane, what else

[besides capitalism]

is their that doesn't violate individual rights, ... - Damien
-----------------------------------
Red Grant,

The US was a

capitalist society

when it practiced slavery and slaughtered native Americans,... -

Damien
-----------------------------------
Slavery is anti theatrical to the ideals of a free market society. - Damien
___________________________________





Now, here, Damien, you're contradicting yourself, again. you claim capitalism is humane and doesn't violate individual rights,

yet, you also claim capitalist society, independent from merchantalist society, following its capitalist logic, the profit motive, maintained slavery, which you regard as immoral, and carried out killing and robbery of the Natives for their land.

Red Grant said...

___________________________________

Red Grant,

I'm not contradicting myself... - Damien
-----------------------------------
Slavery is anti theatrical to the ideals of a free market society. - Damien
-----------------------------------
Slavery was always immoral, regardless of what society may have thought. - Damien on 12/06/2008 08:57:00 PM

"Slow read with commentary:"The Ethics of Emergencies" (3)
-----------------------------------
Red Grant,

The US was a

capitalist society

when it practiced slavery and slaughtered native Americans,... - Damien
-----------------------------------
Red Grant,

I'm not contradicting myself... - Damien
___________________________________










___________________________________

Red Grant,

I'm not contradicting myself... - Damien
-----------------------------------
Not to mention I never said that the profit motive always leads to moral behavior. - Damien
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
-----------------------------------
Slavery was always immoral, regardless of what society may have thought. - Damien on 12/06/2008 08:57:00 PM

"Slow read with commentary:"The Ethics of Emergencies" (3)
-----------------------------------
Yes the

profit motive

is one of the things that distinguishes the

capitalist

from the communist economic system, - Damien
-----------------------------------
JayCross,

I agree. What else

[besides capitalism]

is there that is humane, what else

[besides capitalism]

is their that doesn't violate individual rights, ... - Damien
-----------------------------------
Red Grant,

The US was a

capitalist society

when it practiced slavery and slaughtered native Americans,... - Damien
-----------------------------------
Red Grant,

I'm not contradicting myself... - Damien
___________________________________

Damien said...

Red Grant,

you asked,
--------------------------------------------
Would it be profitable to engage in such behavior....

today?
--------------------------------------------

So what?

Some People back then still opposed slavery, and taking Native American land, and many of those same people supported a free market economy. Plus there is still slavery, and stealing other people's land, under every other economic system.

Beyond that, why was it profitable back then and not now? If everyone back then, saw slavery and killing Native Americans for their land, as immoral, like they do now, would it have still been profitable back than? Did outlawing slavery, when it was still profitable, and ending the warfare with the native Americans, in anyway make us less of a free market society? Is outlawing slavery, and not killing the indigenous people for their land, in anyway, incomparable with free market capitalism? Does having a free market inevitably lead to slavery and taking land by force? Do either of those things make a market less free? For one thing, Slavery makes an economy inherently less free, even if it is motivated, at least in part, by profit.

Plus what country can you think of that doesn't, have a free market, or a mostly free market economy that doesn't practice slavery in one way or another? If you can't think of one, that exists now, can you think of one that existed in the past?

Damien said...
This comment has been removed by the author.
Damien said...

Note, that while there maybe some good arguments against having an absolute, pure free market, capitalist society, slavery, or theft of the natives' land isn't one of them.

Red Grant said...

___________________________________

Red Grant,

you asked,
--------------------------------------------
Would it be profitable to engage in such behavior....

today?
--------------------------------------------

So what? - Damien
___________________________________






Are you saying if it were in the interest of capitalist nations to engage in slave trade and killing and robbery of the Natives...


today...


they wouldn't engage in such behavior?



If so, then


why not?




___________________________________

Some People back then still opposed slavery, and taking Native American land, and many of those same people supported a free market economy. - Damien
___________________________________



Does this mean then you believe

profit motive

wasn't the factor in slavery and the killing and the robbery of the Natives?




___________________________________

Plus there is still slavery, and stealing other people's land, under every other economic system. - Damien
___________________________________





Did I ever say or even imply that was not the case?


Damien, the original reason that led to these discussion was due to your reply to Jay in early part of this thread:

___________________________________

JayCross,

I agree.

What else[besides capitalism]

is there that is humane,

what else[besides capitalism]

is their that doesn't violate

individual rights,...? - Damien on

1/10/2009 09:15:00 AM
___________________________________




Do you believe humane economic system that doesn't violate individual rights will allow/encourage/abet

slavery and the killing and the robbery of the Natives for their land?


Besides, you have never answered my question, a question that I have asked repeatedly that was itself brought upon by your statements.



___________________________________

... what else [besides capitalism]is their that doesn't violate

individual rights

,...? - Damien
-----------------------------------

First of all, what are individual rights?



and who decides what are individual rights? - Red Grant for the first time in this thread on

1/10/2009 07:45:00 PM
___________________________________





You have never answered this question even though asked repeatedly.


Does this mean then you do not know what individual rights are?

or

you know them but you don't want to share?

and if so, then why?


and if so, this because you're hiding something....something that you don't want others to know about?




___________________________________

Beyond that, why was it profitable back then and not now? - Damien
___________________________________




Indeed. Why do you think so?




___________________________________

If everyone back then, saw slavery and killing Native Americans for their land, as

immoral,... - Damien
___________________________________




Indeed, this is another of those I have asked many time in previous threads.


What is moral and immoral?

and

who decide(s) as such,

and using what criteria?



___________________________________

...,like they do now, would it have still been profitable back than? - Damien
___________________________________





You have already answered the question yourself beforehand.


Let me remind of your own answer to the question above.

___________________________________

Red Grant,

profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien on 1/11/2009 07:22:00 AM
-----------------------------------
Yes the

profit motive

is one of the things that distinguishes the

capitalist

from the communist economic system, - Damien
___________________________________




But this leads me back to the question that I have asked you before.




Does this mean you believe we should give the land back to the Natives

and

pay reparations to the descendants of the slaves

since this nation was the beneficiary of what you regard as immoral means carried out as enabled by one distinguishing feature of capitalism as you yourself have defined?




___________________________________

Did outlawing slavery, when it was still profitable,... - Damein
___________________________________




Profitable? for whom? The Confederates?

Was slavery profitable for the North when it was finally outlawed?




___________________________________

...and ending the warfare with the native Americans,... - Damien
___________________________________





But hadn't all the land already been taken by then?

If so, then why keep a war going when there are no more profits to be squeezed?



___________________________________

Is outlawing slavery, and not killing the indigenous people for their land, in anyway, incomparable with free market capitalism? - Damien
___________________________________





If the government forbade any economic activity that is profitable to anyone, simply because the government find such activity "immoral", then:



would such a government qualify as free market capitalist one?




___________________________________

Does having a free market inevitably lead to slavery and taking land by force? - Damien
___________________________________





If doing so are profitable to those who engage in it relative to other business activities, then

wouldn't it according to profit-motive factor of the free market capitalism as you have so succintley put


___________________________________

Yes the

profit motive

is one of the things that distinguishes the

capitalist

from the communist economic system, - Damien
-----------------------------------
Not to mention I never said that the profit motive always leads to moral behavior. - Damien
-----------------------------------
profit,

yes was part of the motive for slavery and taking Indian land in America when it was going on. - Damien
___________________________________
?



There you are, Damien, your own words.





___________________________________

Do either of those things make a market less free? For one thing, Slavery makes an economy inherently less free, even if it is motivated, at least in part, by profit. - Damien
___________________________________





Can you apply the similar logic regarding

drug use

prostitution

pedophilia

gay marriage?


Even better do you think business people should be allowed to sell their products/services to whoever so long as the prospective customers can come up with the price?




___________________________________

Plus what country can you think of that doesn't,... - Damien
___________________________________




Doesn't what?




___________________________________

... have a free market, or a mostly free market economy that doesn't practice slavery in one way or another? - Damien
___________________________________





How is your question relevant to whether capitalism was responsible for slavery and killing and the robbery of the Natives for their land?




___________________________________

If you can't think of one, that exists now, can you think of one that existed in the past? - Damien
___________________________________



Can you be more explicit?

What attributes are you talking about?




___________________________________

Note, that while there maybe some good arguments against having an absolute, pure free market, capitalist society, slavery, or theft of the natives' land isn't one of them. - Damien
___________________________________





Please show me the quotes

where and when

did I ever

say that we shouldn't adopt pure free market capitalism due to slavery and the theft of the land belonging to the Natives.

Damien said...

Red Grant,

you wrote,
-------------------------------------------------------------------
___________________________________

Do either of those things make a market less free? For one thing, Slavery makes an economy inherently less free, even if it is motivated, at least in part, by profit. - Damien
___________________________________





Can you apply the similar logic regarding

drug use

prostitution

pedophilia

gay marriage?


Even better do you think business people should be allowed to sell their products/services to whoever so long as the prospective customers can come up with the price?
-------------------------------------------------------------------

No, I don't think that people should be allowed to buy or sell any service. One example I came up with earlier is my example of the professional hit man. As for say pedophilia, things like child porn should most certainly be illegal. Anyone who practices pedophilia and has sex with children is committing child rape.

you wrote,
-------------------------------------------------------------------
___________________________________

Note, that while there maybe some good arguments against having an absolute, pure free market, capitalist society, slavery, or theft of the natives' land isn't one of them. - Damien
___________________________________





Please show me the quotes

where and when

did I ever

say that we shouldn't adopt pure free market capitalism due to slavery and the theft of the land belonging to the Natives.
-------------------------------------------------------------------

I wasn't really addressing you here. For some reason, I felt concerned about what other people might think here, I wasn't addressing you personally in that instance. Maybe I should have made that clear.

Fine. I'll admit that maybe you have a point. I'll modify the statement about the nature of capitalism I made earlier.

"What else is there that is can be humane, what else is there in the real world, that doesn't inevitably violate individual rights, and what else is there that works?"

Happy?

Red Grant said...

___________________________________

No, I don't think that people should be allowed to buy or sell any service. - Damien
___________________________________




Then what should be the criteria in deciding what services people are

allowed to buy or sell

and

who decide(s) that criteria

and

how should that criteria be selected?




in a free market capitalism?




___________________________________

As for say pedophilia, things like child porn should most certainly be illegal. - Damien
___________________________________




Based on what criteria?

and

who decides that criteria?

and

how that criteria should be selected?



___________________________________

Anyone who practices pedophilia and has sex with children is committing child rape. - Damien
___________________________________





Do you disapprove of it because you regard it as immoral?




___________________________________

"What else is there that is can be humane, what else is there in the real world, that doesn't inevitably violate individual rights,... - Damien
___________________________________




Finally, but....




___________________________________


and what else is there that works?"
- Damien
___________________________________





While I don't necessarily disagree with that statement yet,

I'm still reading economic literatures from diverse spectrum.


I'm looking for a way to improve upon free market capitalism (as practiced by the West more or less recently).


One example I'm looking at is South Korea from mid 60's through 70's.


Another I'm looking at Chile under Pinochet.

Btw. I've read that Putin was interested in both cases.




A hint of what I'm pondering about:


From the profit motive of capitalim,

Which one should be the most relevant factor whether a factory should keep running or shut down?

1. Who owns the factory?

2. Is the factory profitable enough to the extent it is viable without continous outside funding?


Another one I'm pondering:


Should the debts of the parents/grandparents, or direct blood ancestors be inherited by the children/direct blood descendants?

Andrew76 said...

My goodness what a bunch of equivocating, hair splitting nonsense. A long hard dose of Aristotle would do you some good. Remember, he refuted Socrates and not the othey way around.
Begin at the beginning. Study up on the ideas of "signification." A = A and A can never be both B and A at the same time.

You are not allowed to say things like, "Well, who decides what A and B are? By What criteria?.." and still be taken seriously.

If words have no meaning and concepts/ideas are not real then what the hell are you even talking about? You're simultaneously speaking and negating the validity of everything you say.

Second, you wrote:
"A hint of what I'm pondering about: [sic] (I think you meant "wondering about" or perhaps just "pondering.")
From the profit motive of capitalim,
Which one should be the most relevant factor whether a factory should keep running or shut down?

1. Who owns the factory?
2. Is the factory profitable enough to the extent it is viable without continous outside funding?

Another one I'm pondering:
Should the debts of the parents/grandparents, or direct blood ancestors be inherited by the children/direct blood descendants?"

Really? Is this is as deep as it gets around here? C'mon man.

As to your factory analogy... Whether a factory "should" keep running or be shut down, is perhaps a poor choice of words.
You could ask, "why will this factory shut down," or, "why will this factory stay open."

In a capitalist system a factory that manufactures say, widgets, will stay open if it is profitable, ie: they make more money than they consume in materials, payroll, taxes and other various overhead costs.

Or perhaps they stay open despite remaining un-profitable because someone's rich Uncle is foolishly footing the bill at a loss.

Or perhaps they remain open because the factory is taxpayer subsidized in which case it is no longer a capitalist operation and is now of the socialist/fascist/command economy variety.

On the other hand, why would they close? This factory might close because they are unprofitable. No one wants to buy widgets anymore for any number of reasons. Maybe widgets contain poisonous lead paint, in which case, under a true capitalist system, the factory owners may be sued for any number of damages. Or perhaps the widgets do not perform the advertised function touted by the manufacturer, in which case, under a true capitalist system, the owners may be sued for fraud.
If the owners don't get sued for negligence or fraud under these conditions, then this is evidence of corrupted capitalism, not capitalism.

Capitalism is a system where fraud and destruction of private property goes punished. If these things go unpunished, it's because the system isn't capitalist, but likely a crony-capitalist system, like the one we have now.

Distasteful to you or not, the word "Capitalism," has a direct and concrete meaning. There are things that are Capitalism and there are things that masquerade as Capitalism yet are not Capitalism.

Why else might the factory close? The owners want to do something else with their time and money. Widgets bore them. It's their factory, they can do what they want.

Maybe they go out of business because they undergo a socialist style pay-structure reform where all the employees from the owners to the floor sweepers accept the creedo of "from each according to his ability, to each according to his need."
No one with ability wants to work without getting proper compensation, and no one wants to let on that they are men and women of extraordinary ability and they either quit or pretend to be dumber than they really are to avoid being asked to do more than they will be paid for while lesser abled employees get paid the same as they do for less work.

Maybe they close because environmental restrictions have made it more profitable to move productions overseas, where people actually need the jobs and are willing to accept the negligible trade off. Hmm, I can be a Vietnamese prostitute for rich, unscrupulous westerners who treat me like shit for 10 dollars, or I can work the farm with my hands under the hot sun, for even less money, an average life span of about 40/50 years old and one skill for the rest of my life. Or, I can maybe check out a job in this new textile factory where the working conditions are better than being a farmer or a prostitute, I can learn a couple of skills, and sure it might only pay 10 dollars a week, but here that's a lot of money, it will extend my average life span to about 70 years old, and I would rather have this job than my other options.

Your other question as to debts being inherited... The answer is no, in a way. It depends on the nature of the debt. If there's a debt, then there's a loan and if there's a loan then there's a voluntary contract. Voluntary, at least, in a capitalist system... which is admittedly sort of redundent.

Say the widget factory closes because the owner, John Smith Sr. dies. He dies owing Phillips Petroleum one million dollars. Phillips Petrol could likely seize any bank accounts and/or assets including the factory and all it's parts - basically anything owned *directly* by John Smith Sr. If that isn't enough to pay off the debt, then that's tough luck.

No one forced Phillips Petrol to make a contract with John Smith Widget Co. They chose to of their own free will. Risks are always involved. I'm sure there's legal precedents for such an event already on the books, and to my knowledge the husband or wife of the deceased *might* be held liable for any remaining debts, but I do not believe blood relatives can be held liable, unless they're company owners in some respect.
To claim otherwise is ridiculous. Imagine if your father took off before you were born, went deep into debt and then died. You, being now 45 years old having never met your father in your life would now be saddled with his debts? An absurd notion. This is not how capitalism works.

Further, Capitalism is an economic system that requires the rule of law. Capitalism does not, nor has it ever meant, "Do whatever the hell you want so long as you can make money at it, even if it means killing people." Again, to claim otherwise is to prove your own ignorance of the subject. Capitalism is not anarchy. It requires the protection of life, liberty, property and the right to *pursue* happiness in as much as it does not infringe on other individuals' life, liberty, property and right to pursue happiness. Who does this protecting? Government, which has a legal monopoloy on the use of force.
True Capitalism also requires the seperation of economics and state (something we do not yet have) just like we have a seperation of church and state. Otherwise, each corrupt the other and for the same reasons. History shows this over and over again.
Anyway... I'm likely wasting my time here. Rest assured it's the last time I'll pay a visit. Good luck.

Andrew76 said...

My goodness what a bunch of equivocating, hair splitting nonsense. A long hard dose of Aristotle would do you some good. Remember, he refuted Socrates and not the othey way around.
Begin at the beginning. Study up on the ideas of "signification." A = A and A can never be both B and A at the same time.

You are not allowed to say things like, "Well, who decides what A and B are? By What criteria?.." and still be taken seriously.

If words have no meaning and concepts/ideas are not real then what the hell are you even talking about? You're simultaneously speaking and negating the validity of everything you say.

Second, you wrote:
"A hint of what I'm pondering about: [sic] (I think you meant "wondering about" or perhaps just "pondering.")
From the profit motive of capitalim,
Which one should be the most relevant factor whether a factory should keep running or shut down?

1. Who owns the factory?
2. Is the factory profitable enough to the extent it is viable without continous outside funding?

Another one I'm pondering:
Should the debts of the parents/grandparents, or direct blood ancestors be inherited by the children/direct blood descendants?"

Really? Is this is as deep as it gets around here? C'mon man.

As to your factory analogy... Whether a factory "should" keep running or be shut down, is perhaps a poor choice of words.
You could ask, "why will this factory shut down," or, "why will this factory stay open."

In a capitalist system a factory that manufactures say, widgets, will stay open if it is profitable, ie: they make more money than they consume in materials, payroll, taxes and other various overhead costs.

Or perhaps they stay open despite remaining un-profitable because someone's rich Uncle is foolishly footing the bill at a loss.

Or perhaps they remain open because the factory is taxpayer subsidized in which case it is no longer a capitalist operation and is now of the socialist/fascist/command economy variety.

On the other hand, why would they close? This factory might close because they are unprofitable. No one wants to buy widgets anymore for any number of reasons. Maybe widgets contain poisonous lead paint, in which case, under a true capitalist system, the factory owners may be sued for any number of damages. Or perhaps the widgets do not perform the advertised function touted by the manufacturer, in which case, under a true capitalist system, the owners may be sued for fraud.
If the owners don't get sued for negligence or fraud under these conditions, then this is evidence of corrupted capitalism, not capitalism.

Capitalism is a system where fraud and destruction of private property goes punished. If these things go unpunished, it's because the system isn't capitalist, but likely a crony-capitalist system, like the one we have now.

Distasteful to you or not, the word "Capitalism," has a direct and concrete meaning. There are things that are Capitalism and there are things that masquerade as Capitalism yet are not Capitalism.

Why else might the factory close? The owners want to do something else with their time and money. Widgets bore them. It's their factory, they can do what they want.

Maybe they go out of business because they undergo a socialist style pay-structure reform where all the employees from the owners to the floor sweepers accept the creedo of "from each according to his ability, to each according to his need."
No one with ability wants to work without getting proper compensation, and no one wants to let on that they are men and women of extraordinary ability and they either quit or pretend to be dumber than they really are to avoid being asked to do more than they will be paid for while lesser abled employees get paid the same as they do for less work.

Maybe they close because environmental restrictions have made it more profitable to move productions overseas, where people actually need the jobs and are willing to accept the negligible trade off. Hmm, I can be a Vietnamese prostitute for rich, unscrupulous westerners who treat me like shit for 10 dollars, or I can work the farm with my hands under the hot sun, for even less money, an average life span of about 40/50 years old and one skill for the rest of my life. Or, I can maybe check out a job in this new textile factory where the working conditions are better than being a farmer or a prostitute, I can learn a couple of skills, and sure it might only pay 10 dollars a week, but here that's a lot of money, it will extend my average life span to about 70 years old, and I would rather have this job than my other options.

Your other question as to debts being inherited... The answer is no, in a way. It depends on the nature of the debt. If there's a debt, then there's a loan and if there's a loan then there's a voluntary contract. Voluntary, at least, in a capitalist system... which is admittedly sort of redundent.

Say the widget factory closes because the owner, John Smith Sr. dies. He dies owing Phillips Petroleum one million dollars. Phillips Petrol could likely seize any bank accounts and/or assets including the factory and all it's parts - basically anything owned *directly* by John Smith Sr. If that isn't enough to pay off the debt, then that's tough luck.

No one forced Phillips Petrol to make a contract with John Smith Widget Co. They chose to of their own free will. Risks are always involved. I'm sure there's legal precedents for such an event already on the books, and to my knowledge the husband or wife of the deceased *might* be held liable for any remaining debts, but I do not believe blood relatives can be held liable, unless they're company owners in some respect.
To claim otherwise is ridiculous. Imagine if your father took off before you were born, went deep into debt and then died. You, being now 45 years old having never met your father in your life would now be saddled with his debts? An absurd notion. This is not how capitalism works.

Further, Capitalism is an economic system that requires the rule of law. Capitalism does not, nor has it ever meant, "Do whatever the hell you want so long as you can make money at it, even if it means killing people." Again, to claim otherwise is to prove your own ignorance of the subject. Capitalism is not anarchy. It requires the protection of life, liberty, property and the right to *pursue* happiness in as much as it does not infringe on other individuals' life, liberty, property and right to pursue happiness. Who does this protecting? Government, which has a legal monopoloy on the use of force.
True Capitalism also requires the seperation of economics and state (something we do not yet have) just like we have a seperation of church and state. Otherwise, each corrupt the other and for the same reasons. History shows this over and over again.
Anyway... I'm likely wasting my time here. Rest assured it's the last time I'll pay a visit. Good luck.

gregnyquist said...

Michael: "What I meant was that it's an overstatement to say that current policies are probably the precursor to hyperinflation and social collapse. I would say that while such a dire outcome is possible, it's most unlikely."

Well, I certainly hope you are right and I am wrong about this—but I can't evade the facts, which seem extraordinarily dismal. We have a consumption economy based on constant increases in credit. Finally we reach the point where we can't go on any more so what we do? We try to keep the whole thing going by having the government prop the whole thing up with deficit spending. Now I know we are a very wealthy country which happens to control the primary reserve currency in the world. But even so, we certainly can't go on like this indefinitely. Given the enormous mountain of debt under which the economy groans, where is the Federal government going to get the money to pay for all the stimulus and the bailouts? Tax receipts are falling dramatically. The Federal government is already $10 trillion in debt. It has increasing social security and medicare obligations to pay. China is already hinting that it won't buy any more treasury bonds. Where is the money going to come from to pay all these obligations? Where I live in California the State already is on the verge of bankruptcy. They are paying tax credits with I-owe-you's and forcing state employees to take two days of unpaid leave off per month. Even then, it's not likely the state will be able to meet its obligations without either more tax increases or further cuts—or assistance from the Federal government. Yet there are many other states and municipalities in financial difficulties, so where is it all going to end?

If it was only these economic problems that were facing us, perhaps we could "muddle through." But I have serious concerns about the political, social, and international ramifications of a serious economic crisis. Very few people appreciate how fragile civilization can be, particularly a civilization based on free institutions. Freedom for all classes and types of people is an exception, rather than the norm, in history.

Daniel Barnes said...

>Andrew76 said...
My goodness what a bunch of equivocating, hair splitting nonsense. A long hard dose of Aristotle would do you some good. Remember, he refuted Socrates and not the othey way around.
Begin at the beginning. Study up on the ideas of "signification." A = A and A can never be both B and A at the same time...If words have no meaning and concepts/ideas are not real then what the hell are you even talking about? You're simultaneously speaking and negating the validity of everything you say.

What I think is most amusing is the way we get so many Objectivists like Andrew76 who don't realise that Aristotle is in fact the Godfather of hairsplitting equivocators, and that due to the Godfather's influence on Rand, Objectivism itself is little more than a set of hairsplitting equivocations with little or no basis in either logic or science; and who write lengthy posts of rote-learned Randian bromides accusing us of the very faults Objectivism most distinctively possesses.

I think it's called projection....;-) But it's fun when they do hang around, because they can't help but reveal in practice almost immediately the alarming degree of hairsplittery and equivocation on which their most treasured arguments depend.

Michael Prescott said...

Greg Nyquist wrote, "But even so, we certainly can't go on like this indefinitely."

No, we can't, and Obama's announcement that he intends to run a deficit of $1.2 trillion (or more!) is certainly grounds for concern. McCain, for all his faults, would not have countenanced such a policy.

But in my 48 years I've found two things to be true: 1) When a truly monumentally stupid policy is about to be enacted by the federal government, usually the public will rebel and prevent it, or at least tone it down. I'm not talking about run-of-the-mill stupidity, but rather about huge-scale stupidities like the Clinton health care plan. I have some confidence that the prospect of trillion-dollar deficits as far as the eye can see will create a public backlash and undercut Obama's spending plans.

2) I've also found that people who have been intellectually influenced by conservative and libertarian thinkers have a bit of a trigger finger when it comes to predicting doom. During the Carter administration and even the early years of the Reagan administration there was no shortage of popular finance writers, influenced by Rand and/or libertarianism, who urged people to convert their cash to canned food and prepare for hyperinflation and the end of the world. Before that, the same sorts of people were predicting that Third World debt would sink the West. In fact, I've been hearing apocalyptic predictions from these folks all my life.

Maybe this time the prophecies of doom will be borne out, but I'm skeptical. The situation is no doubt serious, but people tend to underestimate the resilience of the world economy.

Red Grant said...

___________________________________

Or perhaps they remain open because the factory is

taxpayer subsidized

in which case it is no longer a capitalist operation and is now of the socialist/fascist/command economy variety. - Andy
-----------------------------------
In a capitalist system a factory that manufactures say, widgets, will stay open if it is profitable, ie: they make more money than they consume in materials, payroll, taxes and other various overhead costs.

Or perhaps they stay open despite remaining un-profitable because someone's rich Uncle is foolishly footing the bill at a loss. - Andy
___________________________________





My dear Andy, So according to your logic,

Mark Cuban's Dallas Maverick is a part of socialist/command economy.



Cuban is an admirer of individualism, claiming early inspiration from author/philosopher Ayn Rand's The Fountainhead.[69] About Rand's novel The Fountainhead, he said: "[It] was incredibly motivating to me. It encouraged me to think as an individual, take risks to reach my goals, and responsibility for my successes and failures. I loved it."[





The big four commercial sports make operating profits of $1.6 billion, Forbes has calculated-but their taxpayer subsidies exceed $2 billion a year (and
that's before the estimated $864 million Mayor Bloomberg and U.S. just handed to the New York Yankees), according to Neil deMause, coauthor of book on sports
subsidies. In other words, taxpayers literally provide all the profits of MLB, the NFL, NBA, and NHL combined.


Mark Cuban managed to "extort" $125 million in taxpayer subsidies.


I guess that makes him either a bum or a fraud.





___________________________________

Further, Capitalism is an economic system that requires the rule of law. - Andy
___________________________________




Ah! but here's a problem, Andy.


Who gets to decide what should be the laws of the land?

and

using what criteria?

and

why?




You?

Aristotle?

Ayn Rand?

for the rest of us?

or


some other means?


This is a question I ask (along with "Moral" question, and "Indivdiusal Rights" question)

and I never get a conclusive answer out of them.




___________________________________

It requires the protection of life, liberty, property and the right to *pursue* happiness in as much as it does not infringe on other individuals' life, liberty, property and right to pursue happiness. - Andy
-----------------------------------
A long hard dose of Aristotle would do you some good. - Andy
-----------------------------------


Some aspects of Aristotle's theory of slavery

Slavery -- natural or conventional?

Aristole's theory of slavery is found in Book I, Chapters iii through vii of the Politics. and in Book VII of the Nicomachean Ethics

Aristotle raises the question of whether slavery is natural or conventional. He asserts that the former is the case.

So, Aristotle's theory of slavery holds that some people are naturally slaves and others are naturally masters. Thus he says:

But is there any one thus intended by nature to be a slave, and for whom such a condition is expedient and right, or rather is not all slavery a violation of nature?

There is no difficulty in answering this question, on grounds both of

reason and of fact.

For that some should rule and others be ruled is a thing not only necessary, but expedient; from the hour of their birth, some are marked out for subjection, others for rule.


From

http://oregonstate.edu/instruct/phl302/distance_arc/las_casas/Aristotle-slavery.html
-----------------------------------
You're simultaneously speaking and negating the validity of everything you say. - Andy
-----------------------------------
My goodness what a bunch of equivocating, hair splitting nonsense. - Andy
___________________________________





Indeed. Perhaps you need to brush up on Aristotle yourself, eh?



Anytime any of you gets to debate with "objectivists",

just use Aristotle's view on slavery.

It should shut them up.

I use it and works everytime.




___________________________________

They chose to of their own free will. Risks are always involved. I'm sure there's

legal precedents

for such an event already on the books,... - Andy
___________________________________



Legal precedents?


So why slavery was abolished?

Hadn't there been legal precedents for slavery?


___________________________________

To claim otherwise is ridiculous. Imagine if your father took off before you were born, went deep into debt and then died. You, being now 45 years old having never met your father in your life would now be saddled with his debts? - Andy
___________________________________




Indeed, so following your logic,

if my father made a fortune, I don't deserve to inherit that fortune, either?


if parents made the fortuen, the children don't deserve to inherit that fortune, either.

Another word, inheritance tax should be 100%?



___________________________________

Say the widget factory closes because the owner, John Smith Sr. dies. He dies owing Phillips Petroleum one million dollars. Phillips Petrol could likely seize any bank accounts and/or assets including the factory and all it's parts - basically anything owned

*directly* by John Smith Sr.

If that isn't enough to pay off the debt, then that's tough luck. - Andy
___________________________________




So following your logic, the owner could transfer the money he got from the loan to his children.

That money from loan should not be recovered for those who loand?


Doesn't this amount to a fraud?


___________________________________

Who does this protecting? Government, which has a

legal monopoloy

on the use of force. - Andy
__________________________________




And how are you going to ensure that Government will not abuse its legal monopoly on the use of force?





Btw. I'll have to return the favor.

___________________________________

"A hint of what I'm pondering about: [sic] (I think you meant "wondering about" or perhaps just "pondering."). - Andy
-----------------------------------
Government, which has a legal

monopoloy[http://www.cartoonstock.com/vintage/directory/m/monopoloy.asp]

on the use of force. - Andy
___________________________________



Andy, I think you meant monopoly.

Monopoloy refers to cartoon and caricature pages.




___________________________________

I think it's called projection....;-) But it's fun when they do hang around, because they can't help but reveal in practice almost immediately the alarming degree of hairsplittery and equivocation on which their most treasured arguments depend. - Daniel
___________________________________




Indeed. Wonder whatever happened to John and Herb.



Maybe I embarrassed them too much?

Red Grant said...

___________________________________

1) When a truly monumentally stupid policy is about to be enacted by the federal government, usually the public will rebel and prevent it, or at least tone it down. I'm not talking about run-of-the-mill stupidity, but rather about huge-scale stupidities like the Clinton health care plan. - Michael
___________________________________





But were we facing economic problem like we have today around that time?

Don't you think when situation is desperate or perceived as desperate,

public might have different views?



___________________________________

2) I've also found that people who have been intellectually influenced by conservative and libertarian thinkers have a bit of a trigger finger when it comes to predicting doom. During the Carter administration and even the early years of the Reagan administration there was no shortage of popular finance writers, influenced by Rand and/or libertarianism, who urged people to convert their cash to canned food and prepare for hyperinflation and the end of the world. Before that, the same sorts of people were predicting that Third World debt would sink the West. In fact, I've been hearing apocalyptic predictions from these folks all my life. - Michael
___________________________________




So have I.

JayCross said...

Red,

You said

---
most people who claim to believe in "free market" economy and the virute of capitalism are nothing more than

frauds, whether they be self-deluded, or self-aware.
---

Do you believe socialists to be more honest and virtuous as a group? I think that would be a tough case to make.

JayCross said...

Red,

I should have clarified that I was talking about savings bonds and highly-rated bonds, not junk bonds ala Michael Milken.


If one puts the avoidance of loss as the first mandate, then

one would buy some precious metal, bullions, and keep some of it in the safe deposit box.


I did not say savings accounts were the best vehicle for avoiding losses. Just that they were used by many people for that purpose.

Red Grant said...

___________________________________

Red,

You said

---
most people who claim to believe in "free market" economy and the virute of capitalism are nothing more than

frauds, whether they be self-deluded, or self-aware.
---

Do you believe socialists to be more honest and virtuous as a group? I think that would be a tough case to make. - Jay
___________________________________




Please show me where and when

did I ever say that was the case.


___________________________________

Red,

I should have clarified that I was talking about savings bonds and

highly-rated bonds,

not junk bonds ala Michael Milken.
___________________________________




Here's a problem.

How would you know if the bond issued is really "investment" grade?

and

how would you know even if they were investment grade at the time you purchase,

they would remain in investment grade for the investment duration you're willing to hold?


What if the bond rating spirals downward after you purchased it when it was investment grade?


After all, GM bonds were an investment grade both for the long term and short term as well.




Moody's has cut GM's rating four times since 1998, when it was rated A2[well into investment grade], five levels above junk.


http://74.125.95.132/search?q=cache:Rw-A9nTHIVsJ:www.bloomberg.com/apps/news%3Fpid%3D10000006%26sid%3Damnvbkl0FpKA+gm+bond+rating+in+1998&hl=en&ct=clnk&cd=16&gl=us


And what about Enron?



Credit rating agencies do not downgrade companies promptly enough.

For example, Enron's rating remained at investment grade

four days before the company went bankrupt,

despite the fact that credit rating agencies had been aware of the company's problems for months



http://en.wikipedia.org/wiki/Credit_rating_agency#Criticism



It's not just "Junk Bonds" today.


Today's prime grade could easily become tomorrow's junk.


I could recommend a book, "Money Masters" by John Train, who lucidly explains, contrary to conventional wisdom, bond is rarely a safe investment, especially for average Joes.


It has almost all the risks of common stocks, but virtually none of the profit potential especially when bought at investment grade.




http://en.wikipedia.org/wiki/John_Train

___________________________________

Virtually everyone who

puts money in a savings account does so to avoid

losses. - Jay on 1/11/2009 07:55:00 PM
-----------------------------------
I did not say savings accounts were the best vehicle for avoiding losses.

Just that they were used by many people for that purpose. - jay on

1/13/2009 09:35:00 PM
___________________________________




You explicitly stated

virtually everyone put their money into savings account


to avoid losses.



If avoidng losses is the purpose for putting money into savings account, then

why not simply buy precious metals, and put into safe deposit box

or

bury it in some place known only to them?



So why do you think virtually everyone (or many people for that matter)

put their money into savings account

instead of

buying precious metals and putting it into safe deposit box

or burying them someplace known only to them?

if avoidng the losses is the purpose?



Perhaps do you think maintaining convenience of liquidty

and

collecting the proverbial "peanuts" is the real motive
for putting their money into savings account?


After all, don't you think government could change the law, or even act against the law,
to prevent the depositors from withdrawing their funds to avoid "Run at the Bank" to prevent
an economic/financial melt-down?


or

they could let the depositors to withdraw their funds in order to not to break the law,

and "run the press" to create liquidity

or

the appearance of liquidity...

which, of course, could mean hyper-inflation, significantly destroying the purchasing power of the funds the depositors will have withdrawn.


In either cases, losses will have incurred either in form of access to liquidity

or

loss of the purchasing power.


So your argument for people putting money into savings account for the purpose of avoiding loss is really a moot point.


http://en.wikipedia.org/wiki/Bank_run



The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services. This results in an imbalance between the supply and demand for the money (including currency and bank deposits), accompanied by a complete loss of confidence in the money, similar to a bank run.


http://mar2929.wordpress.com/2008/12/02/what-is-hyperinflation/


Just go to some used book stores to browse financial books published in 70's and early 80's, some of them best sellers.


You wouldn't see very little of them recommending average joes to put their money into savings account to avoid losses, especially in times of crisis, such as depression or hyper-inflation.

Red Grant said...

You wouldn't see very little of them


recommending average joes to put their money into savings account to avoid losses, especially in times of crisis, such as depression or hyper-inflation.

1/14/2009 12:06:00 AM



Edit: I meant you would see very little of them.

Red Grant said...

In either cases, losses will have incurred either in form of access to liquidity...

Edit: I meant in the form of lack or denial of access to liquidity.

JayCross said...

Red,

You're right. My arguments were poorly thought-out and executed.

JayCross said...
This comment has been removed by the author.
JayCross said...

Red,

I didn't say you said socialists were more honest. I asked if you thought they were.

Note that I phrased it in the form of a question! ;)

Red Grant said...

___________________________________

Red,

I didn't say you said socialists were more honest. I asked if you thought they were.

Note that I phrased it in the form of a question! ;) - Jay
___________________________________





No, you didn't.

and I didn't say you did, either.

Wells said...

A nit to pick about the so called "Separation of Economics and State"

A Government that attempts to have a monopoly on the use of force (ie. all governments in existence today) Will have, pretty much by definition, a large effect on the economy of the nation it governs.
Such a government would be a monospony buyer, or near monospony buyer of several types of goods and services. The vast majority of weapons are bought by the government, with the government buying the sum total of some weapons systems like fighter jets. If I was to guess, I would guess that half of all lawyers work for the government. With similarly lopsided numbers for the number of soldiers and security persons, and bureaucrats employed in a given country. A Government, in order to do its job, directly or indirectly employs millions of people, and some entire towns have no one who doesn't work for the government.

As such even the most minimal government will have vast amounts of economic power. It would be the employer of a significant percentage of everyone working, and would have total control over the profits of a few industries. That's without even talking about the power to tax or make regulations concerning the conduct of economic activity.

Red Grant said...

Wells, good points.



I often ask these "free market advocates",

if privatization, unfettered free market is so "moral", so "efficient"

so corruption free,


then


why not apply them to tax collection?

police,


military,


court,

and

appointment of goverment officials?


instead of elections?

JayCross said...

Red,

Who said that free markets are corruption free?

Free markets need a reliable framework of laws to function. If two people sign a contract, each party needs to know that some third party like the courts will uphold its validity. Without such assurances market economies fall apart.

(There are anarchists who would argue that a free market could perform all the functions of the government, but I am not yet convinced.)

Red Grant said...

___________________________________

Red,

Who said that free markets are corruption free? - Jay
___________________________________







http://www.aynrand.org/site/News2?page=NewsArticle&id=7664&news_iv_ctrl=1221




___________________________________

Free markets need a reliable framework of

laws


to function. - jay
___________________________________





Who decides what are the laws

and

who decides them as such

and

using what criteria?






Jay, that is a question I keep asking these "free market" advocates, including Damien.


Yet, I get no answer out of them.


Are you going to be any different?

or


just one of those?




___________________________________

If two people sign a contract, each party needs to know that some third party like the courts will uphold its validity. Without such assurances market economies fall apart. - jay
___________________________________




So does this mean

you would approve of

pedophilia

so long as those conditions are met?

JayCross said...

Red,

Yes, I am going to be different, and I'm going to start by asking whether you actually disagree with what I said.

Asking who decides the law and the criteria used by the decider are good questions, but I don't see how they apply when I am merely asserting that markets function poorly without law of some kind.

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital" is a detailed, factual study of how third-world economies are held down by a lack of clearly defined laws and property rights.

JayCross said...

Red,

No, I would not approve of pedophilia because children are not mentally or emotionally mature enough to enter into contracts.

I predict you will now ask me "who decides what is mentally or emotionally mature enough to enter into contracts?"

If that is your question, I will again ask "do you disagree that children are not mentally or emotionally mature enough to enter into contracts?"

JayCross said...

Red,

The ARI release was a little weak by your normally excellent standards of evidence. I think it's clear Locke meant a constitutionally limited government would substantially reduce corruption, not entirely wipe it out of existence.

Do you agree that this is probably what he meant? Furthermore, do you disagree that it is true?

Red Grant said...

___________________________________

Asking who decides the law and the criteria used by the decider are good questions, but I don't see how they apply when I am merely asserting that markets function poorly without

law of some kind. - jay
___________________________________





What kind of law are you talking about?

or

are you talking about any laws so long as they're laws?



___________________________________

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital".... - Jay
___________________________________






Full title of that book was:


Hernando De Soto: The Mystery of Capital: Why

Capitalism Triumphs in the West

and Fails Everywhere Else






Is that why we have financial bailouts?

because the capitalism triumphed in the West?




Don't you think at least some of the assertions of the author from that book

is badly out of date, considering the current turmoil?









___________________________________

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital" is a detailed, factual study of how third-world economies are held down by a lack of clearly defined laws and

property rights. - jay
___________________________________




What are property rights?

and

who decides as such?

and


using what criteria?




___________________________________

If that is your question, I will again ask "do you disagree that children are not mentally or emotionally mature enough to enter into contracts?" - jay
___________________________________




First of all, who should be defined as children?

and

using what criteria?

and

by whom?




___________________________________

Red,

No, I would not approve of pedophilia because children are not mentally or emotionally mature enough to enter into contracts. - jay
___________________________________



So mentally retarded people should not be able to have sex on their own free will exactly for that reason for the rest of their life?


Does this mean children should not have sex with one another?


and if they do,


should they be punished?

should they be locked up?




What if the laws said pedophilia is okay as long as it is consensual?










___________________________________

Red,

The ARI release was a little weak by your normally excellent standards of evidence. I think it's clear

Locke meant a constitutionally limited government would substantially reduce corruption, not entirely wipe it out of existence. - jay
___________________________________






The Solution to Campaign-Finance Corruption
Thursday, February 14, 2002
By: Edwin Locke


MARINA DEL REY, CA--The only solution to campaign-finance corruption is to have a government that can't sell "public interest" favors--
-----------------------------------

Red,

Who said that free markets are corruption free?

Free markets need a reliable framework of laws to function.

If two people sign a contract, each party needs to know that some third party like the courts will uphold its validity. Without such assurances market economies fall apart. - Jay
----------------------------------


...and returns to its only proper function: protecting individual rights, said Dr. Edwin Locke, senior fellow at the Ayn Rand Institute.
___________________________________





Locke is clearly saying the only solution to campagin finance corruption is,


the government that can't sell "public interests" favors.

that

limit itself only to protecting indvidual rights.



Is that not consistent with free market principles?


or

are you saying government under free market economy can sell "public interests"?




___________________________________

Do you agree that this is probably what he meant? - jay
___________________________________




Does this mean you believe he believes that government under free market economy

can sell "public interests" favors?


Do you believe that is the official position of Ayn Rand Institute

that

government under free market economy can sell "public interests" favors?



___________________________________

Furthermore, do you disagree that

it is true? - Jay
___________________________________





Can you elaborate what that

it is true?

JayCross said...

Red,

I don't think the author's points are outdated. Yes, we are in a recession. Yes, companies are being bailed out. But that doesn't mean capitalism hasn't triumphed in the west. We're still able to spend our free time arguing on a website about capitalism while people in the countries De Soto writes about are taking their pigs to market and selling them one at a time.

I cannot think of anyone who said that capitalism is perfect or that nothing bad would ever happen under it.

(I would also point out, as I've done before, that we are living in a mixed/inconsistently capitalist economy not a completely capitalist economy.)

Red Grant said...

___________________________________

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital".... - Jay
-----------------------------------

Full title of that book was:


Hernando De Soto: The Mystery of Capital: Why

Capitalism Triumphs in the West

and Fails Everywhere Else

Is that why we have financial bailouts?

because the capitalism triumphed in the West?

Don't you think at least some of the assertions of the author from that book

is badly out of date, considering the current turmoil? - Red Grant
-----------------------------------

Red,

I don't think the author's points are outdated. Yes, we are in a recession. - Jay
___________________________________





Jay, That's so unlike your sometimes brilliant analysis.

It's so patently sophmoric.


Are you implying I think capitalim did not triumph in the West because we have a recession?




My question was:

___________________________________

Is that why we have financial bailouts?

because the capitalism triumphed in the West? - Red Grant
___________________________________





It was not about recession.

It was about bailouts at taxpayers' expense.








___________________________________

We're still able to spend our free time arguing on a website about capitalism while people in the countries De Soto writes about are taking their pigs to market and selling them one at a time. - Jay
___________________________________



Does this mean you believe just mere fact that some people in a society can spend free time arguing on a website about capitalism

make that society

a capitalist society?



Are you implying in Peru,

there are no some people who can do we're doing it here?

If there are some people in Peru who can do what we're doing here,

does that make Peru a capitalist society?




___________________________________

I often ask these "free market advocates",

if privatization, unfettered free market is so "moral", so "efficient"

so corruption free,... - Red Grant
-----------------------------------

Red,

Who said that free markets are corruption free? - Jay
-----------------------------------
I cannot think of anyone who said that capitalism is perfect or that nothing bad would ever happen under it. - Jay
___________________________________





Jay, now you're performing a switchroo.


My question that prompted your response was about whether there would be corruption under capitalism.


It was not about whether capitalism is perfect or nothing bad would happen.





___________________________________

(I would also point out, as I've done before, that we are living in a mixed/inconsistently capitalist economy not a completely capitalist economy.) - Jay on
1/16/2009 08:16:00 AM
-----------------------------------
But that doesn't mean capitalism hasn't triumphed in the west. - Jay on 1/16/2009 08:16:00 AM
-----------------------------------
Red,

I don't think the author's points are outdated. - Jay on 1/16/2009 08:16:00 AM
-----------------------------------

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital".... - Jay on 1/15/2009 06:17:00 PM
-----------------------------------

Full title of that book was:


Hernando De Soto: The Mystery of Capital: Why

Capitalism Triumphs in the West

and Fails Everywhere Else - Red Grant on 1/15/2009 08:17:00 PM
___________________________________





Now, Jay, you're contradicting yourself.


You claim the assertion of the author that the capitalism triumphed in the West has not been invalidated.

Yet, you're arguing we have mixed/inconsistent capitalism.

Is that what ends up with?

When capitalism

triumphs,

there is mixed/inconsistently capitalist economy?




___________________________________

Red,

No, I would not approve of pedophilia because children are not mentally or emotionally mature enough to enter into contracts. - jay
-----------------------------------

So mentally retarded people should not be able to have sex on their own free will exactly for that reason for the rest of their life?

Does this mean children should not have sex with one another?

and if they do,

should they be punished?

should they be locked up?

What if the laws said pedophilia is okay as long as it is consensual? - Red Grant
___________________________________









___________________________________

Red,

The ARI release was a little weak by your normally excellent standards of evidence. I think it's clear

Locke meant a constitutionally limited government would substantially reduce corruption, not entirely wipe it out of existence. - jay
-----------------------------------

The Solution to Campaign-Finance Corruption
Thursday, February 14, 2002
By: Edwin Locke


MARINA DEL REY, CA--The only solution to campaign-finance corruption is to have a government that can't sell "public interest" favors-- - as quoted by Red Grant
-----------------------------------

Red,

Who said that free markets are corruption free?

Free markets need a reliable framework of laws to function.

If two people sign a contract, each party needs to know that some third party like the courts will uphold its validity. Without such assurances market economies fall apart. - Jay
----------------------------------

...and returns to its only proper function: protecting individual rights, said Dr. Edwin Locke, senior fellow at the Ayn Rand Institute. - Red Grant
-----------------------------------

Locke is clearly saying the only solution to campagin finance corruption is,

the government that can't sell "public interests" favors.

that

limit itself only to protecting indvidual rights.

Is that not consistent with free market principles?

or

are you saying government under free market economy can sell "public interests"? - Red Grant
___________________________________




___________________________________

Do you agree that this is probably what he meant? - jay
-----------------------------------

Does this mean you believe he believes that government under free market economy

can sell "public interests" favors?

Do you believe that is the official position of Ayn Rand Institute

that

government under free market economy can sell "public interests" favors? - Red Grant
___________________________________






Jay, you told me my quote of Locke was a weak evidence.

So why are you not contering my argument?

Wells said...

I might just be talking smack now, but having not read the book, with no plans of reading it. But The Mystery of Capital: Why Capitalism Triumphs in the West and fails everywhere else Seems like it would have been outdated when Japan, South Korea, Brazil, China, Southeast Asia, India, and Botswana started to come up in the world, and South Africa started to manufacture their own cars. So late 19th century to present day it was obsolete? But like I said, I may be talking smack.

Wells said...

While I'm trolling this thread, I'll answer Red Giant's Question. Just for fun.

Red Giant said
why not apply (Free Market Principals) to tax collection police, military, court, and appointment of goverment officials?

Well, maybe not a complete answer, but towards an acceptable answer; I would say that nobody wants to be hustled while on the phone to 911*. If you don't mind that though, La Cosa Nostra could always sell you their 'services' for competative rates.

*I'm imagining a 911 operator trying to sell you like premium service or something, so a cop will patrol your block more often or you can be in the front of the line for an ambulance.

Red Grant said...

___________________________________

But The Mystery of Capital: Why Capitalism Triumphs in the West and fails everywhere else Seems like it would have been outdated when Japan, South Korea, Brazil, China, Southeast Asia, India, and Botswana started to come up in the world, and South Africa started to manufacture their own cars. - Wells
___________________________________





Indeed.

Personally, I feel that the author made the title the way it is,

to increase the book sales.





___________________________________

*I'm imagining a 911 operator trying to sell you like premium service or something, so a cop will patrol your block more often or you can be in the front of the line for an ambulance. - Wells
___________________________________





I actually use that kind of line, a lot when I'm dealing with these "free market" advocates.


Works every time.

JayCross said...

Red,

You said:

Does this mean you believe he believes that government under free market economy

can sell "public interests" favors?


No, I believe he believes a government that keeps its hands out of the economy will not be in a position to grant public interest favors. However, I think he is realistic enough to concede that a few would still slip through the cracks.

Rather, I believe he was saying that most government corruption would be eliminated.

This is what I was referring to when I ask "do you agree that this is true?" That is, do you agree that such a government would be less corrupt than today's? And if not, why not?

JayCross said...

Red,

You seem to take great pleasure in putting "free market advocates" in their place. May I ask what it is that you dislike so much about free markets? Do you have a superior alternative in mind?

JayCross said...

Red,

You said:


Jay, now you're performing a switchroo.


My question that prompted your response was about whether there would be corruption under capitalism.


It was not about whether capitalism is perfect or nothing bad would happen.


I so much assumed that corruption was subsumed under "bad things that might happen", but okay, I'll focus on what you specifically said: corruption.

You had said:

if privatization, unfettered free market is so "moral", so "efficient"

so corruption free,


Ayn Rand said they were moral. Adam Smith and countless economists since have demonstrated that they were efficient. But my original question to you remains: who said they were corruption-free?

Nobody that I know of has said it. What I have heard said is that free markets are significantly less corrupt than other governments. This seems undeniable.

Thoughts?

Damien said...
This comment has been removed by the author.
Damien said...

Red Grant,

I don't agree with everything JayCross has said in the past, but he has a point here. What's the point of you spending all your time criticizing something, if you don't have a better alternative or at the very least can't think of a way to improve the current system, getting rid of those problems while leaving it largely intact?

Red Grant said...

___________________________________

I think it's clear Locke meant a constitutionally limited government would

substantially reduce corruption, not entirely wipe it out of existence. - Jay
___________________________________




Where did Locke actually say

constitutionally limited government would substantially reduce corruption not entirely wipe it out of existence?

and/or


how did you logically deduce it from what Locke had said?






___________________________________

Does this mean you believe he believes that government under free market economy

can sell "public interests" favors?

- Red Grant

-----------------------------------

No,... - Jay
___________________________________






You gave the answer, No, meaning:


This means you do not believe he believes that government under free market economy

can sell "public interests" favors.


Straight logical deduction from that means

government under free market economy cannot sell "public interests" favors per Locke.





___________________________________

However, I think he is realistic enough to concede that

a few would still slip through the cracks.

Rather, I believe

he was saying that most government corruption would be eliminated. - Jay
___________________________________







Where did he actually say those?

and/or

how did you logically deduce it from what he had said?





___________________________________

Rather, I believe he was saying that

most government corruption would be eliminated.

This is what I was referring to when I ask "do you agree that this is true?" - Jay
___________________________________




Where did he actually say

most government corruption would be eliminated?





___________________________________

I believe he believes a government that keeps its hands out of the economy will not be in a position to grant public interest favors.

However, I think he is realistic enough to concede that

a few would still slip through the cracks. - Jay
___________________________________




If the government is not in a position to grant public interest favors,

then


how could there still be government corruption?





___________________________________

That is, do you agree that

such a government

would be less corrupt than today's? - Jay
___________________________________




Here's a problem. You still have not defined the attributes that you claim are necessary for the functioning of

such a government.


I'll recap below your own statements regarding the attributes deemed necessary by you for

such a government

and my questions and statements regarding them.


___________________________________

Free markets need a reliable framework of

laws


to function. - jay
___________________________________





Who decides what are the laws

and

who decides them as such

and

using what criteria?






Jay, that is a question I keep asking these "free market" advocates, including Damien.


Yet, I get no answer out of them.


Are you going to be any different?

or


just one of those?




___________________________________

If two people sign a contract, each party needs to know that some third party like the courts will uphold its validity. Without such assurances market economies fall apart. - jay
___________________________________




So does this mean

you would approve of

pedophilia

so long as those conditions are met?

1/15/2009 04:43:00 PM






___________________________________

Asking who decides the law and the criteria used by the decider are good questions, but I don't see how they apply when I am merely asserting that markets function poorly without

law of some kind. - jay
___________________________________





What kind of law are you talking about?

or

are you talking about any laws so long as they're laws?



___________________________________

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital".... - Jay
___________________________________






Full title of that book was:


Hernando De Soto: The Mystery of Capital: Why

Capitalism Triumphs in the West

and Fails Everywhere Else






Is that why we have financial bailouts?

because the capitalism triumphed in the West?




Don't you think at least some of the assertions of the author from that book

is badly out of date, considering the current turmoil?









___________________________________

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital" is a detailed, factual study of how third-world economies are held down by a lack of clearly defined laws and

property rights. - jay
___________________________________




What are property rights?

and

who decides as such?

and


using what criteria?




___________________________________

If that is your question, I will again ask "do you disagree that children are not mentally or emotionally mature enough to enter into contracts?" - jay
___________________________________




First of all, who should be defined as children?

and

using what criteria?

and

by whom?




___________________________________

Red,

No, I would not approve of pedophilia because children are not mentally or emotionally mature enough to enter into contracts. - jay
___________________________________



So mentally retarded people should not be able to have sex on their own free will exactly for that reason for the rest of their life?


Does this mean children should not have sex with one another?


and if they do,


should they be punished?

should they be locked up?




What if the laws said pedophilia is okay as long as it is consensual? - Red Grant on 1/15/2009 08:17:00 PM






___________________________________

Red,

You seem to take great pleasure in putting

"free market advocates"

in their place. - Jay
___________________________________







You mean people like Ayn Rand, Yaron Brooks, Mark Kuban, John Allison?

John from Pasedina, or Herb?






___________________________________

May I ask what it is that you dislike so much about free markets? - Jay
___________________________________





Where did I say I dislike free markets?




___________________________________

Do you have a superior alternative in mind? - Jay
___________________________________






Yes, I'm working on it. That's why I'm reading economic literatures from diverse spectrum.

instead of mere intellectually lazy cheerleading.




___________________________________

I so much assumed that corruption was subsumed under

"bad things that might happen",... - Jay
___________________________________





"bad things" could mean different things to different people.





___________________________________

You had said:

if privatization, unfettered free market is so "moral", so "efficient"

so corruption free,

Ayn Rand said they were moral. - Jay
___________________________________




So moral economic system can still have corruption?





___________________________________

Adam Smith and countless economists since have demonstrated that they were efficient. - Jay
___________________________________





How have Adam Smith and countless economists since demonstrated that unfettered free market is efficient?


Please provide real-life, concrete examples of unfettered free market society.





___________________________________

But my original question to you remains: who said they were corruption-free? - Jay
___________________________________




Following are the definition of corruption per wiki, and merriam dictionary.



1 a: impairment of integrity, virtue, or moral principle : depravity b: decay , decomposition c: inducement to wrong by improper or unlawful means (as bribery) d: a departure from the original or from what is pure or correct


http://www.merriam-webster.com/dictionary/corruption



Corruption is essentially termed as an "impairment of integrity, virtue or moral principle; depravity, decay, and/or an inducement to wrong by improper or unlawful means, a departure from the original or from what is pure or correct, and/or an agency or influence that corrupts."[1]

Corruption, when applied as a technical term, is a general concept describing any organized, interdependent system in which part of the system is either not performing duties it was originally intended to, or performing them in an improper way, to the detriment of the system's original purpose.



http://en.wikipedia.org/wiki/Corruption




___________________________________

Ayn Rand said they [unfettered free market] were

moral. - Jay
___________________________________




So moral economic system can have corruptions?


Isn't that a contradiction?



___________________________________

Does this mean you believe he[Locke from Ayn Rand Institute] believes that government under free market economy

can sell "public interests" favors?

- Red Grant

-----------------------------------

No,... - Jay
___________________________________



When Locke from Ayn Rand Institute believed free market economy government was the only solution to campaign finance corruption,

did he mean no corruption?

or

did he mean fewer corruption?


If he meant fewer corruption,

then,

that would still mean some corruption.

But then that would contradict what Ayn Rand said according to you.

Your own statement below in that regard.



___________________________________

Ayn Rand said they [unfettered free market] were

moral. - Jay
___________________________________




So that only leaves the other conclusion.


Locke meant no corruption, not fewer corruption.


or

you believe moral economic system can have corruption?


By the very definition of the word, corruption, that would no longer be "moral".

or

is there such thing as corrupt "moral" economic system?

Talk about an oxymoron!


So through logical deduction based on

what Ayn Rand said,

the answer you gave to my question regarding one of the attribute of the free market economy,

Locke's statement from ARI,

and the definition of the word, corruption.


Both Ayn Rand and Locke meant free market economy are corruption-free.





___________________________________

What I have heard said is that

free markets

are significantly less corrupt than other governments. This seems undeniable.

Thoughts? - Jay
___________________________________







Please show me the examples of unfettered free market economy.



Besides you still have not answered relevant question (per your logic no less) regarding

"free market" economy.



___________________________________

Free markets need a reliable framework of

laws


to function. - jay
___________________________________





Who decides what are the laws

and

who decides them as such

and

using what criteria?






Jay, that is a question I keep asking these "free market" advocates, including Damien.


Yet, I get no answer out of them.


Are you going to be any different?

or


just one of those?





___________________________________

Asking who decides the law and the criteria used by the decider are good questions, but I don't see how they apply when I am merely asserting that markets function poorly without

law of some kind. - jay
___________________________________





What kind of law are you talking about?

or

are you talking about any laws so long as they're laws?





___________________________________

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital" is a detailed, factual study of how third-world economies are held down by a lack of clearly defined laws and

property rights. - jay
___________________________________




What are property rights?

and

who decides as such?

and


using what criteria?



___________________________________

Red,

I don't think the author[de Soto]'s points are outdated. - Jay
-----------------------------------
There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital" is a detailed, factual study of how third-world economies are held down by a lack of clearly defined


laws and property rights. - Jay
___________________________________





That still begs my original questions you are still dodging.


Who does the defining for the law and property rights?

using what criteria?


and why?




Besides below is an excerpt of the review of de Soto's book.




For example, de Soto writes that when people are extremely dissatisfied,

"the Marxist tool kit is better geared to explain class conflict than capitalist thinking,


which has no comparable analy­sis or even a serious strategy for reaching the poor in the extralegal sector" (p. 213). From "Mystery of Capital" by de Soto.




What do you think, Jay?

Do you agree with the author?

or

better yet,

did you even read the book?

Red Grant said...

Following is just an appreciation for reading my rather lengthy posts.


Enjoy!



http://www.youtube.com/watch?v=8MS2vZLW9Xk&feature=PlayList&p=BB941FBB97C689DB&index=22

Damien said...

Red Grant,

So you're a marxist?

Red Grant said...

___________________________________

What's the point of you spending all your time criticizing something,

if you don't have a better alternative or at the very least can't think of a way to improve the current system, getting rid of those problems while leaving it largely intact? - Damien
___________________________________





Did you even read some of my posts regarding those points in this thread?



___________________________________

Asking who decides the law and the criteria used by the decider are good questions, but I don't see how they apply when I am merely asserting that markets function poorly without

law of some kind. - jay
-----------------------------------

What kind of law are you talking about?

or

are you talking about any laws so long as they're laws? - Red Grant
___________________________________








___________________________________

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital" is a detailed, factual study of how third-world economies are held down by a lack of clearly defined laws and

property rights. - jay
-----------------------------------

What are property rights?

and

who decides as such?

and


using what criteria?
___________________________________





___________________________________

Free markets need a reliable framework of

laws


to function. - jay
-----------------------------------

Who decides what are the laws

and

who decides them as such

and

using what criteria?
___________________________________






___________________________________

Who does this protecting? Government, which has a

legal monopoloy

on the use of force. - Andy
-----------------------------------

And how are you going to ensure that Government will not abuse its legal monopoly on the use of force?
___________________________________






___________________________________

Further, Capitalism is an economic system that requires the rule of law. - Andy
-----------------------------------

Ah! but here's a problem, Andy.


Who gets to decide what should be the laws of the land?

and

using what criteria?

and

why?




You?

Aristotle?

Ayn Rand?

for the rest of us?

or


some other means?


This is a question I ask (along with "Moral" question, and "Indivdiusal Rights" question)

and I never get a conclusive answer out of them.
___________________________________






___________________________________

No, I don't think that people should be allowed to buy or sell any service. - Damien
-----------------------------------

Then what should be the criteria in deciding what services people are

allowed to buy or sell

and

who decide(s) that criteria

and

how should that criteria be selected?
___________________________________









There you are.


According to you,

law

Property rights

are relevant to free market economy.


Yet, when I ask you to define

how the law and the property rights

should be defined by whom

and by what criteria,


you don't want to answer.



Damien, you told me people should not be allowed to buy or sell any services,

I ask you

then what should be the criteria in deciding what services people are

allowed to buy or sell

and

who decide(s) that criteria

and

how should that criteria be selected?



and you don't want to answer.


why?
___________________________________







___________________________________

Red Grant,

So you're a marxist? - Damien
___________________________________




No, but I'm trying to find if there is anything worth salvaging.

JayCross said...

Red,



Who decides what are the laws

and

who decides them as such

and

using what criteria?


No answer I give to these questions is going to satisfy you. If I answer "Congress" to "Who makes the laws?", you will ask "Who decided that Congress should make the laws?"

If I answer "the courts" to the question "Who decides what property rights are?", you will ask "Who decided that the Courts should decide that?"

This type of questioning can continue ad infinitum without us coming any closer to an agreement or even advancing the debate.

I also don't think capitalism is suffering over concerns of who decides whether kids have the right to sleep with adults.

Here is, I believe, a better question: which system (capitalism or socialism) allows people more freedom to make their own decisions, using criteria acceptable to them?

Historically, the more socialist a country has been, the more regulations, restrictions, etc. Those countries provide much more of an opportunity to ask questions about who decides the law, who decides the criteria used, etc.

The freer a nation, the more often those questions are decided by individuals, not people whose motives and qualifications we have to question.

JayCross said...

Furthermore, I'm somewhat insulted by you questioning whether I actually read the Mystery of Capital. Yes, I am trying to support my pro-free-markets position, but that does not mean I am intellectually dishonest or that I will support my position with books I haven't read.

JayCross said...

Red,

You said:

So moral economic system can have corruptions?

Isn't that a contradiction?


There is a difference between saying "an unfettered free market would, in principle, be a completely moral system" and saying "this practical, real-world attempt at implementing that system is completely moral."

The former view (advocated by Rand and others) essentially says: society will be structured in such a way that individuals will make all or most of the choices concerning their own lives, so long as others rights to do the same are respected. Governments sole purpose will be protecting those rights. This rules out such obvious crimes as murder, rape, theft and (I would argue) letting undeveloped, immature minds enter into sexual contracts with pedophiles.

It would also (in principle) outlaw government officials from doling out favors to special interests.

The second view says: in practice, even a government built on those ideals is run by fallible human beings, and that being the case, some corruption will still probably occur.

Nevertheless, my overall point is that the freer we are and the smaller our government, the less corruption there will be.

Red Grant said...

___________________________________

Red,



Who decides what are the laws

and

who decides them as such

and

using what criteria?


No answer I give to these questions is going to satisfy you. If I answer "Congress" to "Who makes the laws?", you will ask "Who decided that Congress should make the laws?"

If I answer "the courts" to the question "Who decides what property rights are?", you will ask "Who decided that the Courts should decide that?"

This type of questioning can continue ad infinitum without us coming any closer to an agreement or even advancing the debate. - Jay
___________________________________





Problem with that argument is, Jay,

it was you yourself who brought it first.



Here's an excerpt of how my questions above came to be.


___________________________________

Free markets need a reliable framework of

laws to function. - jay on 1/15/2009 04:10:00 PM
___________________________________




Clearly, it was you brought upon the importance of the law for the free market.


It's relevant to ask ultimately

who

makes the laws,

how

the laws should be made,

and

why the laws should be made the way they should be made above

in order for the free market to function.




Without knowing what kind of laws,

and how those laws should be made,

and who should make the laws,

and why the laws should be made the way they should be made,


how can you even define a free market economy?


when you yourself had said:

___________________________________

Free markets need a reliable framework of

laws to function. - jay on 1/15/2009 04:10:00 PM
-----------------------------------
when I am merely asserting that markets function poorly without law of some kind.

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital" is a detailed, factual study of how third-world economies are held down by a

lack of clearly defined laws and property rights. - Jay on 1/15/2009 06:17:00 PM
___________________________________





Jay, I'm merely asking you to respect your own logic.

You yourself claimed the harmful effect due to lack of clearly defined laws and property rights.


So why you refuse to define a clearly defined laws and property rights?


Hiding something?




___________________________________

I also don't think capitalism is suffering over concerns of who decides whether kids have the right to sleep with adults. - jay
___________________________________





You are performing another switchroo.

Where did I say capitalism is suffering over concerns of who decides whether kids have the right to sleep with adults?


My question dealing with pedophilia was a rhetorical question due to your statement regarding free market capitalism:


___________________________________

If two people sign a contract, each party needs to know that some third party like the courts will uphold its validity.

Without such assurances

market economies fall apart. - jay on 1/15/2009 04:10:00 PM
-----------------------------------

So does this mean

you would approve of

pedophilia

so long as those conditions are met? - Red Grant on 1/15/2009 04:43:00 PM
-----------------------------------

Red,

No, I would not approve of pedophilia because children are not mentally or emotionally mature enough to enter into contracts. -jay on 1/15/2009 06:21:00 PM
___________________________________


Yet, you dont' want to state who decides who is mentally or emotionally mature enough to enter into contracts and using what criteria.

If the contract in question was not of sexual nature, such as inheritance or business,

should they be able to enter into a contract?



___________________________________

Here is, I believe, a better question: which system (capitalism or socialism) allows people more freedom to make their own decisions, using criteria acceptable to them? - jay
___________________________________






Another switchroo from Jay.


This discussion with you on the latter part of this thread began with your post:


___________________________________

Red,

Who said that free markets are corruption free?

Free markets need a reliable framework of laws to function. If two people sign a contract, each party needs to know that some third party like the courts will uphold its validity. Without such assurances market economies fall apart.

(There are anarchists who would argue that a free market could perform all the functions of the government, but I am not yet convinced.) - jay on 1/15/2009 04:10:00 PM
___________________________________





It was not about whether socialism is better than free market or vice versa.


On a more profound philosophical sense, it was primarily about the nature of free market economy regarding the role of legal frame work.





___________________________________

Furthermore, I'm somewhat insulted by you questioning whether I actually read the Mystery of Capital. Yes, I am trying to support my pro-free-markets position, but that does not mean I am

intellectually dishonest.... - Jay on 1/22/2009 09:32:00 PM
___________________________________






Is that why you have performed switchroo twice as posted in this post?

Because you're intellectually honest?




___________________________________

Furthermore, I'm somewhat insulted by you questioning whether I actually read the Mystery of Capital. - Jay
___________________________________





Did you?







___________________________________

Red,

You said:

So moral economic system can have corruptions?

Isn't that a contradiction?





There is a difference between saying

"an unfettered free market would, in principle, be a completely moral system"

and saying "this practical, real-world attempt at implementing that system is completely moral." - Jay
___________________________________





But, Jay, my questions you quoted above:

___________________________________

So moral economic system can have corruptions?

Isn't that a contradiction? - Red Grant
___________________________________


was not about


a difference between saying

"an unfettered free market would, in principle, be a completely moral system"

and saying "this practical, real-world attempt at implementing that system is completely moral."








It was about whether anyone had meant

unfettered free market economies

are corruption free.

___________________________________

Ayn Rand said they [unfettered free market] were

moral. - Jay
-----------------------------------

So moral economic system can have corruptions?


Isn't that a contradiction? - Red Grant
___________________________________








Please look below, your own words...
___________________________________

The former view [that "an unfettered free market would, in principle, be a completely moral system"]

(advocated by Rand and others).... - Jay on 1/22/2009 10:25:00 PM
-----------------------------------
But my original question to you remains: who said they

[privatization, unfettered free market] were corruption-free?

Nobody that I know of has said it.-Jay on 1/21/2009 10:08:00 PM
-----------------------------------
Ayn Rand said they [unfettered free market] were

moral. - Jay on 1/21/2009 10:08:00 PM
___________________________________









Why are you contradicting yourself?


or


completely moral system are not corruption free?



___________________________________

Another interesting question is who should be in charge of recog­nizing ownership, since this is the way that de Soto plans to solve the whole problem. For the author, the answer is clear:

the State, through its group of managers (the government),

is the ideal agent to remedy the chaos created through its previous policies. In fact, de Soto's vi­sion of government is not one that passively allows people to arrange their own lives; rather, he desires a government that actively moves people in the right direction (possibly through the government's contracting with a private company that will search for the needed information). - an excerpt from the review of de Soto's "Mystery of Capital"
-----------------------------------
Nevertheless, my overall point is that the freer we are and the smaller our government, the less corruption there will be. - Jay
-----------------------------------
Red,

You said:

Does this mean you believe he believes that government under free market economy

can sell "public interests" favors?





No, I believe he believes a government that keeps its hands out of the economy will not be in a position to grant public interest favors. - jay
-----------------------------------
Red,

I don't think the author[de Soto]'s points are outdated. - jay
-----------------------------------
Thus, de Soto reasons that: "[c]itizens inside and outside the bell jar need government to make a strong case that a redesigned, integrated prop­erty system is less costly, more efficient, and better for the nation than existing anarchical arrangements (p. 159). - an excerpt from the review of de Soto's "Mystery of Capital"
___________________________________




___________________________________


Here is, I believe, a better question: which system (capitalism or socialism) allows people more freedom to make their own decisions, using criteria acceptable to them?

Historically, the more socialist a country has been, the more regulations, restrictions, etc. Those countries provide much more of an opportunity to ask questions about who decides the law, who decides the criteria used, etc.

The freer a nation, the more often those questions are decided by individuals, not people whose motives and qualifications we have to question. - Jay
-----------------------------------
Red,

I don't think the author[de Soto]'s points are outdated. - jay
-----------------------------------
For example, de Soto writes that when people are extremely dissatisfied,

"the Marxist tool kit is better geared to explain class conflict than capitalist thinking,

which has no comparable analy­sis or even a serious strategy for reaching the poor in the extralegal sector" (p. 213). - an excerpt from the review of de Soto's "Mystery of Capital"
___________________________________










http://mises.org/article.aspx?Id=1512

JayCross said...

Red,

Yes, I did read the book and I own it. It contains many examples of developing & former communist countries in which much property is owned extralegally. A specific example is Brazil where, at time of writing, some 90% of real estate was owned without official title. De Soto argues, convincingly, that this lack of clearly defined property rights prevents those people from using the assets to their full economic potential.

He also traces the evolution of property rights in the US. For example, early on, squatters would mark their territory using what were known as "Tomahawk Rights" - that is, sticking tomahawks in trees to delineate where their land began and ended. Eventually, we developed much clearer ways of recognizing property rights, all the way up to the present.

So yes, I did read the book. And I must say, one remark about Marxism does not negate the premise of the book which is property rights are extremely important.

JayCross said...

Red,

You quoted the following exerpt:

Thus, de Soto reasons that: "[c]itizens inside and outside the bell jar need government to make a strong case that a redesigned, integrated prop­erty system is less costly, more efficient, and better for the nation than existing anarchical arrangements (p. 159). - an excerpt from the review of de Soto's "Mystery of Capital"

The "existing anarchical arrangements" are the result of government cronyism, corruption, and dysfunction, not too much capitalism. Indeed, many of the countries being discussed in that book are former communist nations. The author did not intend that passage as a slight against capitalism.

Red Grant said...

___________________________________

De Soto argues, convincingly, that this

lack of clearly defined property rights

prevents those people from using the assets to their full economic potential. - Jay
-----------------------------------
Eventually, we developed much

clearer ways of recognizing property rights,

all the way up to the present. - Jay
-----------------------------------

Free markets need a reliable framework of

laws to function. - jay on 1/15/2009 04:10:00 PM
-----------------------------------
when I am merely asserting that markets function poorly without law of some kind.

There is ample evidence for that assertion. Hernando de Soto's book "The Mystery of Capital" is a detailed, factual study of how third-world economies are held down by a

lack of clearly defined laws and property rights. - Jay on 1/15/2009 06:17:00 PM
___________________________________





So following your logic of importance of

clearly defined laws and property rights

for the functioning of free market capitalism,



please define

how the law and property rights

should be made

and

by whom

and

why the way they should be made?



If you can't or won't,


then

how can you even define free market capitalism?



and if you don't even know or can't define what a free market capitalism is, based on your own logic,


then,

why not?






___________________________________

So yes, I did read the book. And I must say, one remark about

Marxism does not negate the premise of the book which is property rights are extremely important. - Jay on1/23/2009 01:08:00 PM
-----------------------------------
Red,

I don't think the author[de Soto]'s points are outdated. - jay
-----------------------------------
For example, de Soto writes that when people are extremely dissatisfied,

"the Marxist tool kit is better geared to explain class conflict than capitalist thinking,

which has no comparable analy­sis or even a serious strategy for reaching the poor in the extralegal sector" (p. 213). - an excerpt from the review of de Soto's "Mystery of Capital"
___________________________________




So do you agree with the author on the point that

marxist tool kit is better suited to explaining class conflict than capitalism?



So how does the author believe the property rights should be defined

and

by whom

and

using what criteria?






___________________________________

Red,

You quoted the following exerpt:

Thus, de Soto reasons that:

"[c]itizens inside and outside the bell jar need

government


to make a strong case that a redesigned, integrated prop­erty system is less costly, more efficient,

and better for the nation than

existing anarchical arrangements (p. 159). - an excerpt from the review of de Soto's "Mystery of Capital"






The "existing anarchical arrangements" are the result of

government cronyism, corruption, and dysfunction, not too much capitalism. - Jay
___________________________________




So how does the author believe the existing anarchial arrangement should be changed?



By whom?


and why they should be changed the the way they should be changed?

Red Grant said...

___________________________________

Adam Smith and countless economists since have demonstrated that they[privatization, unfettered free markets] were efficient. - Jay
___________________________________





How have Adam Smith and countless economists since demonstrated that unfettered free market is efficient?


Please provide real-life, concrete examples of unfettered free market society.

JayCross said...

Red,

You asked:


So how does the author believe the property rights should be defined

and

by whom

and

using what criteria?


It depends on the property being discussed. In the case of real estate, he would define property rights as clear, marketable title to the property that can be ascertained from a straightforward record-keeping system. Same with car ownership.

For businesses, he would define property rights as the ability to start a business without bribing officials and the ability to operate it free from government harassment.

As for what criteria, his general recommendation is that these countries mimic the property rights recognition system of developed countries. Such as the US and Western European nations.

As for what criteria those nations used, I'm not sure I can give you an answer. As best I can tell (and as De Soto writes), our property system emerged little by little through trial and error. What was effective was put into law (sometimes after much government resistance), and what was ineffective was eventually weeded out.

Red Grant said...

___________________________________

Red,

You asked:


So how does the author believe the property rights should be defined... - Jay
-----------------------------------

In the case of real estate, he would define property rights as clear, marketable title to the property that can be ascertained from a straightforward record-keeping system. - Jay
___________________________________




Isn't that just bookeeping?


Doesn't "By property rights" mean,

what can the owner of the property do with his/her property as a matter of rights?


and

who is going to define those property rights for the owner?

and

who is going to enforce the laws regarding the property rights for the owner?

and

who is going to punish the owner if the owner uses his/her property outside the legal boundary of the property rights?



___________________________________

In the case of real estate, he would define property rights as clear, marketable title to the property that can be ascertained from a straightforward record-keeping system. - Jay
-----------------------------------
Same with car ownership. - Jay
___________________________________




Isn't that pretty lame?

So the rights of car ownership merely means the owner of the car holds a title to the car the owner owns?





___________________________________

For businesses, he would define property rights as the ability to start a business without bribing officials and the ability to operate it free from

government harassment. - Jay
___________________________________



So businesses can offer services/products as long as prospective customers are willing to pay for them?

Government cannot interfer with what products/services are offered by the businesses?



___________________________________

As for what criteria, his general recommendation is that these countries mimic the property rights recognition system of developed countries. Such as the US and Western European nations. - Jay
___________________________________





Eminent domain (United States), compulsory purchase (United Kingdom, New Zealand, Ireland), resumption/compulsory acquisition (Australia) or expropriation (South Africa and Canada) in common law legal systems is the inherent power of the state to seize a citizen's private property, expropriate property, or seize a citizen's rights in property with due monetary compensation, but without the owner's consent. The property is taken either for government use or by delegation to third parties who will devote it to public or civic use or, in some cases, economic development. The most common uses of property taken by eminent domain are for public utilities, highways, and railroads.[citation needed] Some jurisdictions require that the government body offer to purchase the property before resorting to the use of eminent domain.



United States

The power of governments to take private real or personal property has always existed in the United States, being a part of the common law inherited from England.



http://en.wikipedia.org/wiki/Eminent_domain



___________________________________

As best I can tell (and as De Soto writes), our property system emerged little by little through trial and error.


What was effective was put into law (sometimes after much government resistance), and what was ineffective was eventually weeded out. - Jay
___________________________________





What about the land taken from the Natives?


What about eminent domain?






___________________________________

So yes, I did read the book. And I must say, one remark about

Marxism does not negate the premise of the book which is property rights are extremely important. - Jay on1/23/2009 01:08:00 PM
-----------------------------------
Red,

I don't think the author[de Soto]'s points are outdated. - jay
-----------------------------------
For example, de Soto writes that when people are extremely dissatisfied,

"the Marxist tool kit is better geared to explain class conflict than capitalist thinking,

which has no comparable analy­sis or even a serious strategy for reaching the poor in the extralegal sector" (p. 213). - an excerpt from the review of de Soto's "Mystery of Capital"
___________________________________




So do you agree with the author on the point that

marxist tool kit is better suited to explaining class conflict than capitalism?






___________________________________

Adam Smith and countless economists since have demonstrated that they[privatization, unfettered free markets] were efficient. - Jay
___________________________________





How have Adam Smith and countless economists since demonstrated that unfettered free market is efficient?


Please provide real-life, concrete examples of unfettered free market society.

JayCross said...

Red,

You asked:


So do you agree with the author on the point that

marxist tool kit is better suited to explaining class conflict than capitalism?


No, I don't agree, because that passage does not accurately depict what he is trying to say.

He was remarking that to distressed and economically ignorant people, Marxist theory provides a more satisfying explanation of class conflict than capitalist thinking does (although he does not really define "capitalist" thinking.)

I quote:

"We must not underestimate the latent power of Marxist integrated theory at a time when masses of little hope are looking for a cohesive worldview to improve their desperate economic circumstances."

He then goes on to describe how anti-capitalists (globalization protestors, etc.) have latched on Marxist theory as a means of slowing down global capitalism.

The author then writes:


"Much of Marx's thought is outdated because the situation today is not the same as in Marx's Europe. Potential capital is no longer the privilege of the few. After Marx's death, the west finally managed to set up a legal framework that gave most people access to property and the tools of production. Marx would probably be surprised to find how in developing countries, much of the teeming mass does not consist of oppressed legal proletarians but of oppressed illegal entrepreneurs with a sizable amount of assets.


So no, I don't agree that the Marxist intellectual tool kit is better suited to explaining class conflict, and as you can now see, neither does the author. He was speaking only of Marxism's appeal to frantic and desperate people who don't know any better.

Red Grant said...

___________________________________

He was remarking that to distressed and economically ignorant people,

Marxist theory provides a more satisfying explanation of class conflict than

capitalist thinking

does (although he does not really define

"capitalist" thinking.) - Jay
___________________________________




Why does he not really define "capitalist" thinking?


What is capitalist thinking?




___________________________________

"Much of Marx's thought is outdated

because the situation today is not the same as in Marx's Europe. - de Soto as quoted by Jay
__________________________________





Does this mean then you believe Marx's theory was valid in Europe during Marx's times?




___________________________________

Marx divides social classes
according to ownership of the means of production, and

de Soto adapts this theory

to his main claim, i.e., that classes exist because some people have access to for­mal property, while others do not; the latter, then, are condemned to poverty (p. 213). - from the review of de Soto's "Mystery of Capital"
-----------------------------------
You asked:


So do you agree with the author on the point that

marxist tool kit is better suited to explaining class conflict than capitalism?




No, I don't agree, because that passage does not accurately depict what he is trying to say.

He[de Soto] was remarking that to

distressed and economically ignorant people,

Marxist theory provides a more satisfying explanation of class conflict than capitalist thinking does... - Jay
-----------------------------------
So no, I don't agree that the Marxist intellectual tool kit is better suited to explaining class conflict, and as you can now see, neither does the author. He was speaking only of Marxism's appeal to frantic and desperate people who don't know any better. - jay
-----------------------------------

Marx divides social classes
according to ownership of the means of production, and

de Soto adapts this theory

to his main claim, i.e., that classes exist because some people have access to for­mal property, while others do not; the latter, then, are condemned to poverty (p. 213). - from the review of de Soto's "Mystery of Capital" from the review of de Soto's "Mystery of Capital"
___________________________________







Does this mean de Soto is one of those desperate and economically ignorant people?





___________________________________

The author then writes:


"Much of Marx's thought is outdated because the situation today is not the same as in Marx's Europe. - Jay
___________________________________




He didn't say all, did he?


If not, then


does this mean de Soto believes at least some of Marx's theory is still relevant today?







___________________________________

Red,

You asked:


So how does the author believe the property rights should be defined... - Jay
-----------------------------------

In the case of real estate, he would define property rights as clear, marketable title to the property that can be ascertained from a straightforward record-keeping system. - Jay
___________________________________




Isn't that just bookeeping?


Doesn't "By property rights" mean,

what can the owner of the property do with his/her property as a matter of rights?


and

who is going to define those property rights for the owner?

and

who is going to enforce the laws regarding the property rights for the owner?

and

who is going to punish the owner if the owner uses his/her property outside the legal boundary of the property rights?



___________________________________

In the case of real estate, he would define property rights as clear, marketable title to the property that can be ascertained from a straightforward record-keeping system. - Jay
-----------------------------------
Same with car ownership. - Jay
___________________________________




Isn't that pretty lame?

So the rights of car ownership merely means the owner of the car holds a title to the car the owner owns?





___________________________________

For businesses, he would define property rights as the ability to start a business without bribing officials and the ability to operate it free from

government harassment. - Jay
___________________________________



So businesses can offer services/products as long as prospective customers are willing to pay for them?

Government cannot interfer with what products/services are offered by the businesses?



___________________________________

As for what criteria, his general recommendation is that these countries mimic the property rights recognition system of developed countries. Such as the US and Western European nations. - Jay
___________________________________





Eminent domain (United States), compulsory purchase (United Kingdom, New Zealand, Ireland), resumption/compulsory acquisition (Australia) or expropriation (South Africa and Canada) in common law legal systems is the inherent power of the state to seize a citizen's private property, expropriate property, or seize a citizen's rights in property with due monetary compensation, but without the owner's consent. The property is taken either for government use or by delegation to third parties who will devote it to public or civic use or, in some cases, economic development. The most common uses of property taken by eminent domain are for public utilities, highways, and railroads.[citation needed] Some jurisdictions require that the government body offer to purchase the property before resorting to the use of eminent domain.



United States

The power of governments to take private real or personal property has always existed in the United States, being a part of the common law inherited from England.



http://en.wikipedia.org/wiki/Eminent_domain



___________________________________

As best I can tell (and as De Soto writes), our property system emerged little by little through trial and error.


What was effective was put into law (sometimes after much government resistance), and what was ineffective was eventually weeded out. - Jay
___________________________________





What about the land taken from the Natives?


What about eminent domain?





___________________________________

Adam Smith and countless economists since have demonstrated that they[privatization, unfettered free markets] were efficient. - Jay
___________________________________





How have Adam Smith and countless economists since demonstrated that unfettered free market is efficient?


Please provide real-life, concrete examples of unfettered free market society.

JayCross said...

Red,

I apologize for leaving some of your questions unanswered. I've been getting settled back into school (spring semester just started) and by the time I get to the computer at night I'm pretty wiped out!

However, either tonight or tomorrow I intend on sitting down and answering all the questions you've repeatedly asked.

Thanks for the patience and for continuing to ask them!

Red Grant said...

Please take your time.

Remember there is a viking proverb.

A man is a prisoner of his own words.


p.s. Getting good grades is important for your resume, but

Stalin also said,

"Paper will tolerate anything written on it."


There might be a lot of garbages written in text books and memo you took on that professor's lecture.


Don't be impressed merely by credentials.


Learn to judge arguments on their own merit, not

based on the credentials of someone who said it.


If someone said,

"I'm this, and you're that, therefore I'm right and you're wrong.".

Then you know who they are.

JayCross said...

Well, my philosophy professor (required course) was going on and on about how there is never any such thing as an absolute statement.

So I wanted for him to stop and asked:

"Isn't the statement 'there are no absolute statements' itself an absolute statement?"

He didn't know what to say and it got a good laugh out of the class.

He also asserted that "they" are finding out that "environment really has little to do with how you turn out."

Should be an interesting semester.

Damien said...
This comment has been removed by the author.
Damien said...

JayCross,

What your philosophy professor might have been trying to say was that "you should try to avoid making absolute statements in general," not that there are no absolute statements. After all, all you have to do to prove an absolute statement is false is to come up with one instance when its not true. For example the statement "all people have brown hair" is false. On the other hand if you change it to "some people have brown hair," its true, and it isn't proven false when you find one person who doesn't have brown hair. As a rule absolute statements are usually false, and general statements are usually true, but not always. Are you sure that wasn't what your teacher was saying?

JayCross said...

Damien,

It very well may have been. It was just a light-hearted remark on my part,

A) Because I'm a smart ass by nature, and
B) After saying we can't be certain of anything he went on to make about a dozen very bold statements without offering a shred of evidence (like the "environment plays little or no role" assertion.)

Just thought it was worth a chuckle. :)

gregnyquist said...

Damien: "What your philosophy professor might have been trying to say was that 'you should try to avoid making absolute statements in general,' not that there are no absolute statements."

I rather doubt that this is what happening. The viewpoint that there are no absolutes is quite common in 20th century philosophy. It arises from a mixture of the subjectivist orientation of Descartes with the skepticism of modern science. It is well known (and has been known since at least Aristotle) that claims about objective truths (i.e., absolutes) concerning matters of fact cannot be proved. Hence, it is concluded, that certainty is not possible. But the pragmatists and other subjectivists don't stop here. They confuse the problems related to ascertaining claims about truth with the truth itself, as if knowledge-claims and truth were somehow identical. What I suspect this philosophy professor fails to understand is that, while truth is absolute, are knowledge of truth is relative and tainted with the fallibility of human cognition.

Wells said...

I didn't know that real, dues paying college professors still held to the 'truth is really just a matter of opinion' line anymore. I thought metaphysical subjectivism was a refuge for psuedointellectuals who like to look smart and BS at length about not much.

JayCross said...

Greg,

I actually found myself defending empiricism in philosophy today. The professor kept saying "rationalism is probably a better method of reaching the truth than empiricism since we can't trust what our senses tell us."

So I asked him "well, if we can't trust our perceptions, and we can only think and reason based on what we have perceived, then why would thinking/rationalism be any more helpful in reaching the truth?"

He had no answer!

gregnyquist said...

Jay,

Your response to your professor was well done and I'm not surprised he couldn't find anything to say to it. Defending rationalism on the basis of the unreliability of the sense is such a cliche. In any case, rationalism is even more vulnerable to such types of argumentation. Rationalism presupposes the validity of memory: yet we all know that memory is far less reliable than the senses. But the real objection to his view is that he doesn't really believe it: his slanders against the senses are just a pose. If a bus came barrelling down the road heading straight for him he would not stop to ponder whether his senses were valid. On the contrary, he would get out of the way. So what good is his schoolroom philosophy when, outside of the schoolroom, he refuses to act on it?

JayCross said...

Greg,

I was wondering the same thing. When questioned, he says things like "Well...there's a difference between doubt and philosophical doubt, y'know...if someone's holding a gun to your head, don't question that the gun is there, this is just philosophical questioning here in class."

To which I immediately thought "well what good is it then?"

gregnyquist said...

Jay,

Your professor's doubt is not philosophical, it is the doubt of the sophist. As Santanaya put it, since "a complete suspense of judgment is physically impossible in a living animal, every sceptic ... has to accept some opinion or other. Which opinion he accepts, will depend on his personal character or his casual associations. His philosophy therefore deserts him on the threshold of life, just when it might cease to be a verbal accomplishment; in other words, he is at intervals a sophist, but at no time a philosopher."

Red Grant said...

___________________________________

Red,

I apologize for leaving some of your questions unanswered. I've been getting settled back into school (spring semester just started) and by the time I get to the computer at night I'm pretty wiped out!

However, either tonight or tomorrow I intend on sitting down and answering all the questions you've repeatedly asked.

Thanks for the patience and for continuing to ask them! - Jay on 1/27/2009 08:00:00 AM
___________________________________








Are you ready now?







___________________________________

He was remarking that to distressed and economically ignorant people,

Marxist theory provides a more satisfying explanation of class conflict than

capitalist thinking

does (although he does not really define

"capitalist" thinking.) - Jay
===================================

Why does he not really define "capitalist" thinking?


What is capitalist thinking? - Red Grant
___________________________________







__________________________________

"Much of Marx's thought is outdated

because the situation today is not the same as in Marx's Europe. - de Soto as quoted by Jay
===================================

Does this mean then you believe Marx's theory was valid in Europe during Marx's times? - Red Grant
___________________________________






___________________________________

Marx divides social classes
according to ownership of the means of production, and

de Soto adapts this theory

to his main claim, i.e., that classes exist because some people have access to for­mal property, while others do not; the latter, then, are condemned to poverty (p. 213). - from the review of de Soto's "Mystery of Capital"
-----------------------------------

You asked:


So do you agree with the author on the point that

marxist tool kit is better suited to explaining class conflict than capitalism?




No, I don't agree, because that passage does not accurately depict what he is trying to say.

He[de Soto] was remarking that to

distressed and economically ignorant people,

Marxist theory provides a more satisfying explanation of class conflict than capitalist thinking does... - Jay
-----------------------------------
So no, I don't agree that the Marxist intellectual tool kit is better suited to explaining class conflict, and as you can now see, neither does the author. He was speaking only of Marxism's appeal to frantic and desperate people who don't know any better. - jay
-----------------------------------

Marx divides social classes
according to ownership of the means of production, and

de Soto adapts this theory

to his main claim, i.e., that classes exist because some people have access to for­mal property, while others do not; the latter, then, are condemned to poverty (p. 213). - from the review of de Soto's "Mystery of Capital" from the review of de Soto's "Mystery of Capital"
===================================

Does this mean de Soto is one of those desperate and economically ignorant people? - Red Grant
___________________________________








___________________________________

The author then writes:


"Much of Marx's thought is outdated because the situation today is not the same as in Marx's Europe. - Jay
===================================

He didn't say all, did he?


If not, then


does this mean de Soto believes at least some of Marx's theory is still relevant today? - Red Grant
___________________________________







___________________________________

Red,

You asked:


So how does the author believe the property rights should be defined... - Jay
-----------------------------------

In the case of real estate, he would define property rights as clear, marketable title to the property that can be ascertained from a straightforward record-keeping system. - Jay
===================================

Isn't that just bookeeping?


Doesn't "By property rights" mean,

what can the owner of the property do with his/her property as a matter of rights?


and

who is going to define those property rights for the owner?

and

who is going to enforce the laws regarding the property rights for the owner?

and

who is going to punish the owner if the owner uses his/her property outside the legal boundary of the property rights? - Red Grant
___________________________________





___________________________________

In the case of real estate, he would define property rights as clear, marketable title to the property that can be ascertained from a straightforward record-keeping system. - Jay
-----------------------------------
Same with car ownership. - Jay
===================================

Isn't that pretty lame?

So the rights of car ownership merely means the owner of the car holds a title to the car the owner owns? - Red Grant
___________________________________




___________________________________

For businesses, he would define property rights as the ability to start a business without bribing officials and the ability to operate it free from

government harassment. - Jay
===================================

So businesses can offer services/products as long as prospective customers are willing to pay for them?

Government cannot interfer with what products/services are offered by the businesses? - Red Grant
___________________________________






___________________________________

As for what criteria, his general recommendation is that these countries mimic the property rights recognition system of developed countries. Such as the US and Western European nations. - Jay
-----------------------------------

Eminent domain (United States), compulsory purchase (United Kingdom, New Zealand, Ireland), resumption/compulsory acquisition (Australia) or expropriation (South Africa and Canada) in


common law legal systems is the inherent power of the state to seize a citizen's private property, expropriate property, or seize a citizen's rights in property with due monetary compensation,

but without the owner's consent.

The property is taken either for government use or by delegation to third parties who will devote it to public or civic use or, in some cases, economic development.

The most common uses of property taken by eminent domain are for public utilities, highways, and railroads.[citation needed] Some jurisdictions require that the government body offer to purchase the property before resorting to the use of eminent domain.



United States

The power of governments to take private real or personal property has always existed in the United States, being a part of the common law inherited from England.



http://en.wikipedia.org/wiki/Eminent_domain
===================================





So Jay, do you agree with eminent domain laws

or

are you going to recant?











___________________________________

As best I can tell (and as De Soto writes), our property system emerged little by little through trial and error.


What was effective was put into law (sometimes after much government resistance), and what was ineffective was eventually weeded out. - Jay
===================================


What about the land taken from the Natives?


What about eminent domain? - Red Grant
___________________________________





___________________________________

Adam Smith and countless economists since have demonstrated that they[privatization,

unfettered free markets] were efficient. - Jay
___________________________________





How have Adam Smith and countless economists since demonstrated that

unfettered free market

is efficient?


Please provide real-life, concrete examples of unfettered free market society. - Red Grant on 1/24/2009 09:21:00 PM
___________________________________

Red Grant said...

Jay, I'm going to bump this one, just in case you are ready.

Red Grant said...

___________________________________

Adam Smith and countless economists since have demonstrated that they[privatization,

unfettered free markets] were efficient. - Jay
___________________________________





How have Adam Smith and countless economists since demonstrated that

unfettered free market

were efficient?

Red Grant said...

___________________________________

Adam Smith and countless economists since have demonstrated that they[privatization,

unfettered free markets] were efficient. - Jay
___________________________________





How have Adam Smith and countless economists since demonstrated that

unfettered free market

were efficient?

Jay said...

Here's one major way.

http://en.wikipedia.org/wiki/Invisible_hand

Red Grant said...

___________________________________

In economics, the invisible hand is the term economists use to describe the self-regulating nature of the marketplace.[1] The invisible hand is a metaphor coined by the economist Adam Smith.


From http://en.wikipedia.org/wiki/Invisible_hand

as provided by Jay in support of his argument:
___________________________________




___________________________________

Adam Smith and countless economists since have demonstrated that they[privatization,

unfettered free markets] were efficient. - Jay
===================================

How have Adam Smith and countless economists since demonstrated that

unfettered free market

were efficient? - Red Grant on3/11/2009 01:45:00 PM
===================================

Here's one major way.

http://en.wikipedia.org/wiki/Invisible_hand - jay on 3/11/2009 09:41:00 PM
___________________________________





By preferring the support of domestic to that of foreign industry,

he[every individual] intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an


invisible hand to promote an end which was no part of his intention.




(IV.ii.6-9, page 456 of the 1776 Glasgow Edition of Smith’s works; vol. IV, ch. 2, p. 477 of 1776 U. of Chicago Edition.) (Book IV, Ch. II, page 484-485 Modern Library Edition, New York)

From http://en.wikipedia.org/wiki/Invisible_hand

as provided by Jay
___________________________________






___________________________________

he[every individual] intends only his own security; - Adam Smith
___________________________________






How did Adam Smith know that every individual intends only his own security?



___________________________________

... and by directing that industry in such a manner as its produce may be of the greatest value,


he intends only his own gain,... - Adam Smith
___________________________________







Indeed, is that why the Peanut Corporation of America tried to "sweep the samonella under the carpet"

for quest for profit, public health be dammned?


___________________________________

....and he is in this, as in many other cases, led by an


invisible hand

to promote an end which was no part of his intention.[Public interests?] - Adam Smith
___________________________________





Was that why PCA sold salmonella tained peanuts?

Was he guided by 'invisible hand'?






___________________________________

Parnell started in the peanut business with his father and two younger brothers in 1977.

They took a struggling, $50,000-a-year peanut roasting operation and turned it into a $30 million business before selling in 1995. Parnell continued working as a consultant to the business after the family sold it, and in 2000 he left to buy his own peanut plant again in Texas.[79] In 2001, he bought the Blakely, Georgia operation,[77] when its operations consisted only of roasting and blanching peanuts.[80]

Parnell tripled revenue at the Blakely plant by 2004,

turning its first profit in 15 years,[2] with production regularly surpassing 2.5 million pounds of peanuts per month.[81] However, the FDA did not know that the plant manufactured peanut butter until the current outbreak.[80]



Brooks said the Parnells ran PCA on a very tight budget, buying the cheapest peanuts they could find. The company operated a bare-bones front office from a converted garage behind Parnell's home outside Lynchburg, and relied almost exclusively on minimum-wage labor.[3]

Despite more than 12 tests between 2007 and 2008 that showed salmonella contamination in his company’s products, Parnell wrote an e-mail to company employees on Jan 12, 2009 that stated,


"we have never found any salmonella at all. No salmonella has been found anywhere in our products or in our plants."[47][49]


Parnell ordered products identified with salmonella to be shipped and complained that

tests discovering the contaminated food were "costing us huge $$$$$."

In a June 2008 e-mail exchange, Parnell complained to a worker after being notified that salmonella had been found in more products. "I go thru this about once a week," he wrote. "I will hold my breath ... again."[49]

After the company was identified as the source of the outbreak, Parnell pressed federal regulators to allow him to continue using peanuts from the tainted plant.

He wrote that company executives

"desperately at least need to turn the raw peanuts on our floor into money."[47





http://en.wikipedia.org/wiki/Peanut_Corporation_of_America
___________________________________





What do you say? Was PCA guided by 'invisible hand'?






___________________________________

In economics, the invisible hand is the term economists use to describe the self-regulating nature of the marketplace.[1] The invisible hand is a metaphor coined by the economist Adam Smith.

From http://en.wikipedia.org/wiki/Invisible_hand

as provided by Jay
___________________________________





Was the peanut market self-regulating?

or

was the government intervention necessary?

JayCross said...

No, I think it's clear the invisible hand did not prevent PCA from selling tainted peanuts.

From the same link I posetd:

Contrary to common misconceptions, Smith did not assert that all self-interested labour necessarily benefits society, or that all public goods are produced through self-interested labour. His proposal is merely that in a free market, people usually tend to produce goods desired by their neighbours. [emphasis added]

Red Grant said...

___________________________________

he[every individual] intends only his own security; - Adam Smith
___________________________________






How did Adam Smith know that every individual intends only his own security?



___________________________________

From the same link I posetd:

Contrary to common misconceptions, Smith did not

assert that all self-interested labour necessarily benefits society, or that all public goods are produced through self-interested labour.

His proposal is merely

that in a free market, people usually tend to produce goods desired by their neighbours. [emphasis added] - Jay on 3/12/2009 09:45:00 AM
-----------------------------------
Adam Smith and countless economists since have

demonstrated that they[privatization,

unfettered free markets] were efficient. - Jay
___________________________________







Is your quote of Adam Smith above a demonstration of efficiency of unfettered free market?

or

merely a conjecture?







___________________________________

he[every individual] intends only his own security; - Adam Smith
___________________________________






How did Adam Smith know that every individual intends only his own security?








___________________________________

... and by directing that industry in such a manner as its produce may be of the greatest value,


he intends only his own gain,... - Adam Smith
___________________________________






How did Adam Smith know every individual

intends one's only own gain

when one directs that industry in such a manner as its produce may be of the greatest value?






___________________________________

....and he is in this, as in many other cases, led by an


invisible hand

to promote an end which was no part of his intention.[Public interests?] - Adam Smith
___________________________________





and how did Adam Smith know that one is in this, as in many other cases, led by an


invisible hand

to promote an end which was no part of his intention.[Public interests?]?




and how did Adam Smith know that one was promoting an end which was

no part of his intention[Public interests?]

when one was in this, as in many other cases, led by an


invisible hand?