NationStates Jolt Archive

I've been reading selections of Milton Freidnman's Capitalism and Democracy, and I came across something that disturbed me.

Friedman, one of the most respected capitalist thinkers, has gotten a bunch of things wrong.

In the selection I am reading, he is relating freedom of politics to freedom of the market. That much makes sense to me. I support a free market as a necessary criterion of democracy, maybe my idea isn't as "free" as his is, but there is still a free market.

Then I get to where Friedman starts to talk about freedom within a socialist society. He describes how economic interactions and economic/political freedoms would work. It was here that I found out something: Friedman has no idea what socialism is. The society he describes (of absolute uniformity and where only governmental workers have high payrolls) is what the world has experienced as communist societies. Friedman, in effect, has no idea what socialism is. He missed the mark completely in his description of the so called 'socialist' society. How could someone who is so smart be so wrong about a major tennant of his argument?

The other issue I had was Friedman relating freedom of self to freedom of movement. What he states is that a check on the coersive power of government is the ability to move from town to town, state to state or company to company. What he acknowledges, but doesn't consider an argument though is that while the ability to move still exists, it may an unreachable ability for many people, still bringing in the coercion he is trying to fight.

His idea of freedom isn't applicable to all, only those with enough money to move around. His response to those that can't move out?

Get a better job.

Does he not realize that this is not possible for people because of their current economic situations. When you live from one paycheck to another, when you can't afford to go further away for work, or when you can't afford to move altogether, or don't have the skills for a better job, or any of the other millions of "ifs", his situation of freedom is impossible.

How did someone who considered this intelligent hit so far off the mark?

In the selection I am reading, he is relating freedom of politics to freedom of the market. That much makes sense to me. I support a free market as a necessary criterion of democracy, maybe my idea isn't as "free" as his is, but there is still a free market.I don't agree with either of your assertions, but we can agree to disagree.

Then I get to where Friedman starts to talk about freedom within a socialist society. He describes how economic interactions and economic/political freedoms would work. It was here that I found out something: Friedman has no idea what socialism is. The society he describes (of absolute uniformity and where only governmental workers have high payrolls) is what the world has experienced as communist societies. Friedman, in effect, has no idea what socialism is. He missed the mark completely in his description of the so called 'socialist' society. How could someone who is so smart be so wrong about a major tennant of his argument? I don't know of any major supporter of capitalism that actually understands what communism or socialism is; they argue from ignorance.

The other issue I had was Friedman relating freedom of self to freedom of movement. What he states is that a check on the coersive power of government is the ability to move from town to town, state to state or company to company. What he acknowledges, but doesn't consider an argument though is that while the ability to move still exists, it may an unreachable ability for many people, still bringing in the coercion he is trying to fight.

His idea of freedom isn't applicable to all, only those with enough money to move around. His response to those that can't move out?

Get a better job.

Does he not realize that this is not possible for people because of their current economic situations. When you live from one paycheck to another, when you can't afford to go further away for work, or when you can't afford to move altogether, or don't have the skills for a better job, or any of the other millions of "ifs", his situation of freedom is impossible. Well, it's nice to see something so obvious to me is also obvious to others, others being yourself.

How did someone who considered this intelligent hit so far off the mark?I suppose he can't be blamed, capitalism is a fundamentally inconsistent dogma.

How did someone who considered this intelligent hit so far off the mark?

Intelligence doesn't guarantee getting things right. Everyone has biases of some sort.

The people who follow his theories, who put them into practice, like the effects they produce--they may not be the effects that Friedman predicted, or even hoped for (I'm no mindreader--I have no idea if Friedman was being honest or not), but for the people who benefit most from Friedman-esque policies, they're beautiful. They result in the stratification of the classes and the widening divide between rich and poor.

Yah, but this isnt just bias, his assertations are really far off the mark of the basic freedom he is trying to argue.

and Jello - I think that the free market is a necessary criterion of democracy because in an entirely state planned economy, the person is not free to start up a venture or to make any independent economic decisions. The government runs a complete monopoly on all economic decisions as well, removing the potential for a free economic development. I also tend to relate the idea of personal freedom into the idea of econmic freedom, the idea that in order to have one, you will need to other to fully realize a democratic system.


It is kind of like the idea of control of the agenda that is argued by Dahl in his five criterion for democracy.

The people who follow his theories, who put them into practice, like the effects they produce--they may not be the effects that Friedman predicted, or even hoped for (I'm no mindreader--I have no idea if Friedman was being honest or not), but for the people who benefit most from Friedman-esque policies, they're beautiful. They result in the stratification of the classes and the widening divide between rich and poor.

That's usually why Friedman's policies are rarely implemented fully; they are usually integrated in to the existing Keynesian economic model as was the case during the late 1970's/early 80's, when Paul Volcker used Monetarist policies in the Fed's rate decisions to tame the inflation of the late 70's.

and Jello - I think that the free market is a necessary criterion of democracy because in an entirely state planned economy, the person is not free to start up a venture or to make any independent economic decisions. Why does democracy require that a person is free to make independent economic decisions?

The government runs a complete monopoly on all economic decisions as well, removing the potential for a free economic development. I also tend to relate the idea of personal freedom into the idea of econmic freedom, the idea that in order to have one, you will need to other to fully realize a democratic system.

It is kind of like the idea of control of the agenda that is argued by Dahl in his five criterion for democracy.What about a direct democracy, where any economic decisions involve the input of everyone in the community, including the individual in question?

Why does democracy require that a person is free to make independent economic decisions?
Because if a person cannot make an economic decision on their own, then how free can they actually claim to be. The economic decision can be anything from what car to buy, what cereial to eat, or to start up a business. Past real world examples of societies that allow individuals to make free economic choices show that those societies are also the most politically free. Societies that do not allow their citizens to make independent economic choices have been shown to be politically less free.

What about a direct democracy, where any economic decisions involve the input of everyone in the community, including the individual in question?
Direct democracies don't work on large scales, people just don't involved themselves enough to make it work. But, for the sake of argument, lets say that there was a large scale direct democracy. Everyone votes in government actions. The problem you face here is tryanny of the majority. If someone wants to start a business selling leather sex products (bdsm) but the majority of people don't want it, should he be denied his free ability to open that shop?

Because if a person cannot make an economic decision on their own, then how free can they actually claim to be. The economic decision can be anything from what car to buy, what cereial to eat, or to start up a business. Past real world examples of societies that allow individuals to make free economic choices show that those societies are also the most politically free. Societies that do not allow their citizens to make independent economic choices have been shown to be politically less free. True, but this isn't correlation, it could simply be coincidence.
Does this mean that those individuals who have the means andability to buy a car are more free than individuals who don't have the means and ability to buy a car?

Direct democracies don't work on large scales, people just don't involved themselves enough to make it work. But, for the sake of argument, lets say that there was a large scale direct democracy. Everyone votes in government actions. The problem you face here is tryanny of the majority. If someone wants to start a business selling leather sex products (bdsm) but the majority of people don't want it, should he be denied his free ability to open that shop?I would imagine that a direct democracy would have safeguards against tyranny of the majority...I can't say whether or not those safeguards would be heeded or not, but the only thing that keeps societies from upholding their Constitutions is their willingness to do so.
I do agree that people not involving themselves in the process is a problem.

Read Rothbard, Mises, or Smith instead. They're better.

Read Rothbard, Mises, or Smith instead. They're better.
Especially Mises. Hans-Hermann Hoppe is quite good too. As are Hayek and Ayn Rand.

True, but this isn't correlation, it could simply be coincidence.
Does this mean that those individuals who have the means andability to buy a car are more free than individuals who don't have the means and ability to buy a car?
The ability to make free decisions in everyday life naturally leads up to the ability to make free decisions on government and such, decision making is a skill, and it must be regularly practiced.

I would imagine that a direct democracy would have safeguards against tyranny of the majority...I can't say whether or not those safeguards would be heeded or not, but the only thing that keeps societies from upholding their Constitutions is their willingness to do so.
I do agree that people not involving themselves in the process is a problem.
Part of the problem with direct democracy is that it's impossible to institute a check or balance, because the executive is beholden to the law whether it thinks it's decent or not, and there cannot be any courts, because the basic concept of judges is actually undemocratic (but pro-liberty). Hell, look at how many times the courts have been used to overturn bad, but popular, decisions.

The ability to make free decisions in everyday life naturally leads up to the ability to make free decisions on government and such, decision making is a skill, and it must be regularly practiced.I don't agree that the free market leads to the ability to make free decisions in everyday life; it only does so for some people.

Part of the problem with direct democracy is that it's impossible to institute a check or balance, because the executive is beholden to the law whether it thinks it's decent or not, and there cannot be any courts, because the basic concept of judges is actually undemocratic (but pro-liberty). Hell, look at how many times the courts have been used to overturn bad, but popular, decisions.Checks and balances are only as effective as the people who uphold them want to be. Therefore it is possible for direct democracy to check and balance itself if the voters wish there to be; conversely even if there are institutions of checks and balances it doesn't mean that these institutions will be used in a correct manner or that they will fulfill their functions.

I don't agree that the free market leads to the ability to make free decisions in everyday life; it only does so for some people.
This is a point of contention for psychologists to work out, I'm certain. Unfortunately, I'm not a pschrink, and my brain has been turned to mush by seven hours of work and six cups of coffee.

Checks and balances are only as effective as the people who uphold them want to be. Therefore it is possible for direct democracy to check and balance itself if the voters wish there to be; conversely even if there are institutions of checks and balances it doesn't mean that these institutions will be used in a correct manner or that they will fulfill their functions.
All the same, institutions, espescially established institutions with strong traditions tend to enforce checks and balances far better than the masses, espescially when the masses get some absurd idea into their head about how to govern (i.e. Black people are not as good as white people. ).

True, but this isn't correlation, it could simply be coincidence.
Does this mean that those individuals who have the means andability to buy a car are more free than individuals who don't have the means and ability to buy a car?
I would say yes, because they have the economic means to make more decisions that thise that can't afford the car. However, instead of being Friendman and saying that is the end of the argument, I would prefer that the government have other programs that bring viable options to those that aren't 'free' enough to buy that car.

I would imagine that a direct democracy would have safeguards against tyranny of the majority...I can't say whether or not those safeguards would be heeded or not, but the only thing that keeps societies from upholding their Constitutions is their willingness to do so.
I do agree that people not involving themselves in the process is a problem.
a direct democracy has no safeguards against a tyranny by majority because that just what it is, a tyranny by majority. With every citizen voting on everything, the only people that get their way is the majority, a republic can safeguard against tyranny of the majority, the US does this fairly well.


Edit: I'm reading a work by McPhearson right now who's running a critique of Friedman that is pretty good so far.

This is a point of contention for psychologists to work out, I'm certain. Unfortunately, I'm not a pschrink, and my brain has been turned to mush by seven hours of work and six cups of coffee.Okey dokey then.

All the same, institutions, espescially established institutions with strong traditions tend to enforce checks and balances far better than the masses, espescially when the masses get some absurd idea into their head about how to govern (i.e. Black people are not as good as white people. ).The problem with this statement is that in a democracy, institutions are subject to the whims of the people. If an institution makes the correct decision, if it is unpopular enough, the institution will be voted out of office and a new batch of people more in tune with what the people desire will be voted in.
It is worth noting that while many individuals in the South felt that black people were not as good as white people (during the Civil Rights era) it is also true tha legislatures in the South also felt that way. It took an institution specifically designed to uphold the Constitution to do so, and the fact remains that such institutions are only as good as the people within them. Therefore, if a direct democratic community was determined to uphold its Constitution, it would be able to do so whether or not such an action was unpopular with the majority at the present time.

I would say yes, because they have the economic means to make more decisions that thise that can't afford the car. However, instead of being Friendman and saying that is the end of the argument, I would prefer that the government have other programs that bring viable options to those that aren't 'free' enough to buy that car. What would those viable options be other than redistribution of income?

a direct democracy has no safeguards against a tyranny by majority because that just what it is, a tyranny by majority. With every citizen voting on everything, the only people that get their way is the majority, a republic can safeguard against tyranny of the majority, the US does this fairly well.I disagree. If a direct democracy has a Constitution which states that voting rights can't be taken away from anybody for any reason (for example), then it is perfectly possible for a direct democracy to uphold its Constitution and still be democratic.

Edit: I'm reading a work by McPhearson right now who's running a critique of Friedman that is pretty good so far.Let us know how it turns out.

The problem with this statement is that in a democracy, institutions are subject to the whims of the people. If an institution makes the correct decision, if it is unpopular enough, the institution will be voted out of office and a new batch of people more in tune with what the people desire will be voted in.
It is worth noting that while many individuals in the South felt that black people were not as good as white people (during the Civil Rights era) it is also true tha legislatures in the South also felt that way. It took an institution specifically designed to uphold the Constitution to do so, and the fact remains that such institutions are only as good as the people within them. Therefore, if a direct democratic community was determined to uphold its Constitution, it would be able to do so whether or not such an action was unpopular with the majority at the present time.
Yes, but institutions in which a limited number of people, who are unanswerable to public whim and steeped in the traditions of a Constitution are easier to create and maintain.

Okey dokey then.

The problem with this statement is that in a democracy, institutions are subject to the whims of the people. If an institution makes the correct decision, if it is unpopular enough, the institution will be voted out of office and a new batch of people more in tune with what the people desire will be voted in.
It is worth noting that while many individuals in the South felt that black people were not as good as white people (during the Civil Rights era) it is also true tha legislatures in the South also felt that way. It took an institution specifically designed to uphold the Constitution to do so, and the fact remains that such institutions are only as good as the people within them. Therefore, if a direct democratic community was determined to uphold its Constitution, it would be able to do so whether or not such an action was unpopular with the majority at the present time.

The people have the ability to uphold the constitution, but do they necessarily have the will to do so. With your example of the blacks in the south, the people that mattered (i.e. voting populations) in the south thought they were upholding the constitution, therefore, they saw no need to change what the legislaters were doing.

That is the main problem with a directly democratic system. Whatever the majority believes to be good will stay that way. The majority can vote a particular insitution into office and they will be inclined to have that institution stay in the office. The majority will rarely change its mind on an issue, and if it does change its mind, that process will likely take decades. Slavery took about a hundred years to fully change, and that was after a war over it. Slavery as an institution has been around for millenia, proving that the majority are unlikely to change their views on something, even if it is a bad decision.

Yes, but institutions in which a limited number of people, who are unanswerable to public whim and steeped in the traditions of a Constitution are easier to create and maintain.Easier, perhaps, but it isn't impossible that a direct democracy could uphold its Constitution. In addition, I view that it's best for everyone living under a Constitution to be steeped in its traditions.

The people have the ability to uphold the constitution, but do they necessarily have the will to do so. With your example of the blacks in the south, the people that mattered (i.e. voting populations) in the south thought they were upholding the constitution, therefore, they saw no need to change what the legislaters were doing. I have no way of knowing whether or not the voting southerners believed they were upholding the Constitution.

That is the main problem with a directly democratic system. Whatever the majority believes to be good will stay that way. The majority can vote a particular insitution into office and they will be inclined to have that institution stay in the office. The majority will rarely change its mind on an issue, and if it does change its mind, that process will likely take decades. Slavery took about a hundred years to fully change, and that was after a war over it. Slavery as an institution has been around for millenia, proving that the majority are unlikely to change their views on something, even if it is a bad decision.Which is why it is necessary to have a Constitution in the first place.

What would those viable options be other than redistribution of income?[quote]
yes. Welfare, subsidized housing, free helathcare, food stamps - those are all options the government has tried to help people become more economically free.
[quote]
I disagree. If a direct democracy has a Constitution which states that voting rights can't be taken away from anybody for any reason (for example), then it is perfectly possible for a direct democracy to uphold its Constitution and still be democratic.


voting rights cannot be taken away, but that does nothing to alleivate the situation of tyranny by majority. Tyranny by majority rules through voting rights. The people vote, the majority gets what it wants, constitution is still upheld. Hell, in a direct democracy, the majority of people can even change the constitution to make it say what they want it to say.

Easier, perhaps, but it isn't impossible that a direct democracy could uphold its Constitution. In addition, I view that it's best for everyone living under a Constitution to be steeped in its traditions.
Naturally I agree with you that everybody should be steeped in the traditions of a nations constitution, it's just...


...so many people are so stupid, and it's never wise to underestimate the power of stupid people in large groups, and how they're notorious for bulldozing straight through on that. Yes, I've had my faith in humanity shattered repeatedly.

yes. Welfare, subsidized housing, free helathcare, food stamps - those are all options the government has tried to help people become more economically free. But unless the government equalizes income, some people will be more economically free than others, which seems to be to be the antithesis of democracy.

voting rights cannot be taken away, but that does nothing to alleivate the situation of tyranny by majority. Tyranny by majority rules through voting rights. The people vote, the majority gets what it wants, constitution is still upheld. Hell, in a direct democracy, the majority of people can even change the constitution to make it say what they want it to say.A Constitution can be changed at any time, but usually it requires a supermajority to do so. This isn't unheard of in direct democracy; some direct democracies require a vote by consensus. It's entirely possible the democracy could require a vote of 75% (for example) to make certain decisions and still be democratic.

Naturally I agree with you that everybody should be steeped in the traditions of a nations constitution, it's just...


...so many people are so stupid, and it's never wise to underestimate the power of stupid people in large groups, and how they're notorious for bulldozing straight through on that. Yes, I've had my faith in humanity shattered repeatedly.The problem with this theory is that if people are stupid, then democracy must fail, because if people are stupid then they will either make stupid decisions, or stupidly elect people to make decisions for them.
Furthermore, the democratic process itself is educating. Would you say that you become more knowledgeable through debating on NS, even if that knowledge is to reinforce the opinions you already had?

But unless the government equalizes income, some people will be more economically free than others, which seems to be to be the antithesis of democracy.
The basic concept tends to be that there's a minimal level of freedom that is acceptable, and that you are basically allowed to take your freedom as far as is possible in a legal framework.

(i.e. in the case of the US certain materials, behaviors and goods comprise this framework, things like drugs, nuclear weapons, cuban cigars, child prostitutes, slavery, etc.)

The problem with this theory is that if people are stupid, then democracy must fail, because if people are stupid then they will either make stupid decisions, or stupidly elect people to make decisions for them.
Emotional spontaneity is probably a better term to describe my concerns. I'm afraid of a vast bulk of afraid people doing something horrible rather quickly, before they can logically think the situation through.


Furthermore, the democratic process itself is educating. Would you say that you become more knowledgeable through debating on NS, even if that knowledge is to reinforce the opinions you already had?
Naturally.

But unless the government equalizes income, some people will be more economically free than others, which seems to be to be the antithesis of democracy.
In any sort of system that is free, there will always be people who are more economically free than others. I think government should do its best to minimize that gap, but it will always be there.

And by minimize the gap, I do not mean government should wander in, rape someone's bank account, and then redistribute it. I think government should have programs such as the ones I mentioned above.

A Constitution can be changed at any time, but usually it requires a supermajority to do so. This isn't unheard of in direct democracy; some direct democracies require a vote by consensus. It's entirely possible the democracy could require a vote of 75% (for example) to make certain decisions and still be democratic.
Yes, every tyranny by majority is a democratice system. Its just a democratic system that doesn't do anything for any of the minority votes.

The basic concept tends to be that there's a minimal level of freedom that is acceptable, and that you are basically allowed to take your freedom as far as is possible in a legal framework.

(i.e. in the case of the US certain materials, behaviors and goods comprise this framework, things like drugs, nuclear weapons, cuban cigars, child prostitutes, slavery, etc.)How is this minimal level of freedom determined? How do we make sure that everyone has it?

Emotional spontaneity is probably a better term to describe my concerns. I'm afraid of a vast bulk of afraid people doing something horrible rather quickly, before they can logically think the situation through.Perhaps the Constitution can mandate a minimum waiting period before any action is carried out?

Naturally.So as you can see, direct democracy would serve to make the people within less stupid, which can only be a good thing.

In any sort of system that is free, there will always be people who are more economically free than others. I think government should do its best to minimize that gap, but it will always be there. I disagree. To maximize equality is to maximize freedom.

And by minimize the gap, I do not mean government should wander in, rape someone's bank account, and then redistribute it. I think government should have programs such as the ones I mentioned above.Many people view the idea of taxation as having their bank accounts raped by the government, so I don't see how your ideas would be possible in this context.

Yes, every tyranny by majority is a democratice system. Its just a democratic system that doesn't do anything for any of the minority votes.I don't agree that a direct democracy can do nothing for the minority votes, but at the same time I would view a tyranny by majority, (even if this is the end result of direct democracy), to be better than tyranny by minority.

Welfare, subsidized housing, free helathcare, food stamps - those are all options the government has tried to help people become more economically free.

Whoa, whoa, whoa. These aren't measures that make people more economically free. These are measures that make people more economically safe.

But unless the government equalizes income, some people will be more economically free than others, which seems to be to be the antithesis of democracy.

1. A government leveling of wealth eliminates economic freedom.

2. Democracy does not equal or even guarantee freedom, it is only another bogus excuse to justify the removal of freedoms.

Whoa, whoa, whoa. These aren't measures that make people more economically free. These are measures that make people more economically safe.
What I am getting at here is that when people are economically safe with the basics taken care of, they have more discretionary income, hence, they become more economically free because of the discretion of spending power they possess.



1. A government leveling of wealth eliminates economic freedom.

2. Democracy does not equal or even guarantee freedom, it is only another bogus excuse to justify the removal of freedoms.

I argued that earlier.

A free market isn't a necessary tenet of a democracy - that term only applies to a political system and the applicability of political freedoms - but a free market is a necessary tenet of a general free society. A democracy is a society that is free in the political aspect; a free market is a society that is free in the economic aspect. All aspects of the same thing - fundamental liberty - but democracy is a bad term, per se, when you're talking about varying economic models.

That said, I do absolutely agree that capitalism is a required tenet of any actually free society, as is democracy.

Give me liberty, or give me death! - Patrick Henry

He would give up essential liberty for a little security deserves neither liberty nor security. - Thomas Jefferson

1. A government leveling of wealth eliminates economic freedom.I wouldn't agree that it eliminates economic freedom. It increases the economic freedom of those who benefit from the leveling of wealth.
I would argue that if the government did this, it would be a trade off of about zero freedom gained or lost across society. However, if people within the society/community voluntarily agreed to level their wealth, then to do so would be an act of freedom.

2. Democracy does not equal or even guarantee freedom, it is only another bogus excuse to justify the removal of freedoms.Democracy does not equal or guarantee freedom for a particular individual, or for all individuals, but when done properly it does guarantee freedom for the most individuals. Any other system, implemented properly or not, will guarantee freedom for fewer individuals than democracy does.

Why does democracy require that a person is free to make independent economic decisions?

What about a direct democracy, where any economic decisions involve the input of everyone in the community, including the individual in question?

Disaster. Do you think he general population knows anything about anything. Direct democracy would end up with isolated, mob ruled, protectionist tribes.

*snip*

Democracy does not equal or guarantee freedom for a particular individual, or for all individuals, but when done properly it does guarantee freedom for the most individuals. Any other system, implemented properly or not, will guarantee freedom for fewer individuals than democracy does.
Not true. An impartial 'enlightened' dictatorship could guarantee freedom (economic, social, intellectual, and limited political) for everyone, majority and minorities alike.

Not true. An impartial 'enlightened' dictatorship could guarantee freedom (economic, social, intellectual, and limited political) for everyone, majority and minorities alike.
Oh for goodness sake....ok, sigh, you know I've got a lot on at the moment, but if you insist, I'll just have to make the time.
Very well then, I accept your nomination. My first act as benign impartial enlightened dictator is to demand that in future you do not put quotation marks around the word enlightened when you describe me....otherwise I might think you are taking the Micky.:p

Vive le Capitalisme! :)

I suppose he can't be blamed, capitalism is a fundamentally inconsistent dogma.

And communism is a fucking disaster. Good day.

And communism is a fucking disaster. Good day.
:D Now that is an intelligent statement. :)

Oh for goodness sake....ok, sigh, you know I've got a lot on at the moment, but if you insist, I'll just have to make the time.
Very well then, I accept your nomination. My first act as benign impartial enlightened dictator is to demand that in future you do not put quotation marks around the word enlightened when you describe me....otherwise I might think you are taking the Micky.:p

:p Don't get me wrong, I don't think freedom is too great in large doses. Just pointing out theat alternatives to democracy can hold a much higher potential for freedom. Perhaps anarchy would have been a better example. Anyways, freedom is pretty much a neccesary evil to be balanced and maintained carefully. People do stupid things if they are free to do so.

That is why, you highness, I suggest we secretly monitor the populace to ensure they are using the freedom you so gracefully provide with wisdom.

:p Don't get me wrong, I don't think freedom is too great in large doses. Just pointing out theat alternatives to democracy can hold a much higher potential for freedom. Perhaps anarchy would have been a better example. Anyways, freedom is pretty much a neccesary evil to be balanced and maintained carefully. People do stupid things if they are free to do so.

That is why, you highness, I suggest we secretly monitor the populace to ensure they are using the freedom you so gracefully provide with wisdom.
I wasnt getting you wrong, and although I'm busy I have overcome my reluctance and now I'm used to the idea, I'm quite looking forward to ruling the world with my iron fist of freedom. I'm not nearly so fond of the anarchy idea, if we have anarchy anyone could quotation mark the word enlightenend when describing me, and that cannot be tolerated! So proclaim I, 1st benign, impartial and enlightened dictator of the somewhat free (but not too free) world!

As for your graceful suggestion, sounds like a plan. After all if they've got nothing to hide, they have nothing to fear. Trust me, I know what I'm doing...

:cool: compulsory dictator dark sunglasses:cool:
See ^, I've got my fashion accessories sorted, clearly I'm already getting the hang of this dictator gig!:D

Disaster. Do you think he general population knows anything about anything. Direct democracy would end up with isolated, mob ruled, protectionist tribes.It really doesn't matter if the general population knows anything about anything or not, as there is no way of ensuring that an individual ruler would know anything about anything.

Not true. An impartial 'enlightened' dictatorship could guarantee freedom (economic, social, intellectual, and limited political) for everyone, majority and minorities alike.We can't guarantee that a dictatorship will be impartial or enlightened, therefore we cannot guarantee that it will guarantee freedom.

And communism is a fucking disaster. Good day.I suppose to bolster this idea you would pick out some nation and talk about how horrid it is conveniently neglecting the fact that no nation has ever been communist? Or do you have some better reason for stating this?

Whoa, whoa, whoa. These aren't measures that make people more economically free. These are measures that make people more economically safe.



1. A government leveling of wealth eliminates economic freedom.

2. Democracy does not equal or even guarantee freedom, it is only another bogus excuse to justify the removal of freedoms.

exactly

economic freedom: the ability to keep what is rightfully yours and spend it (more or less) as you see fit. EG, monies earned at work, through investments, or money given to you.

if we had total economic freedom, there would be no redistribution of wealth.

The second you include redistribution of wealth, economic freedom dscreases.

increasing economic EQUALITY (which i think some are getting confused with economic freedom) decreases economic freedom, in a free market setting.

because

some people will always be better suited to acquiring money than others, and if you allow people to make and keep money, there will be both winners and losers.

increasing economic EQUALITY (which i think some are getting confused with economic freedom) decreases economic freedom, in a free market setting.

because

some people will always be better suited to acquiring money than others, and if you allow people to make and keep money, there will be both winners and losers.Economic freedom isn't limited to making money, it also includes spending money and acquiring the things that spending said money will get. If you increase the amount of money a person has to spend, you will likely be increasing their economic freedom.

exactly

economic freedom: the ability to keep what is rightfully yours and spend it (more or less) as you see fit. EG, monies earned at work, through investments, or money given to you.

if we had total economic freedom, there would be no redistribution of wealth.

The second you include redistribution of wealth, economic freedom dscreases.

seems to me that the 'rightfully' part is important, and therefore 'economic freedom' doesn't necessarily exclude redistribution.

Perhaps what many of the totalitarians on the board fail to understand is that socialism and communism are essentially the same thing - just a difference in degree. In reality, there is no communism (it has always led to totalitarianism when attempted). In fact there is no true freedom. There are only degrees of totalitarianism.

For what it's worth - Freidman's ideas economic theories have created far more wealth, and far more benefits to the weakest among us, than have attempts at complete totalitarianism (or communism).

Now go drink your herbal tea.

Economic freedom isn't limited to making money, it also includes spending money and acquiring the things that spending said money will get. If you increase the amount of money a person has to spend, you will likely be increasing their economic freedom.

At the same time, you are reducing the freedom of those whose money is taken for the redistribution; ceterus paribus, the system would result in zero net change in freedom, but the system is not expressible in a ceterus paribus form.

However, because redistribution of income ultimately penalizes the more productive and wealth-creating members of society and gives it to people who are less productive and create less wealth, the ripple effect from the loss of that wealth generation results in a net decline in economic freedom, and the more productive and wealth generating society as a whole was, the far greater the loss will be after it is taken away.

Perhaps what many of the totalitarians on the board fail to understand is that socialism and communism are essentially the same thing - just a difference in degree. In reality, there is no communism (it has always led to totalitarianism when attempted).Even if this were true, it would represent a problem with giving certain individuals too much power, and not a problem with communism itself. Therefore, the imbalance of power is bad.

In fact there is no true freedom. There are only degrees of totalitarianism.Debatable.

For what it's worth - Freidman's ideas economic theories have created far more wealth, and far more benefits to the weakest among us, Again, debatable.

than have attempts at complete totalitarianism (or communism).Communism isn't (necessarily) totalitarian. Nice try, though.

seems to me that the 'rightfully' part is important, and therefore 'economic freedom' doesn't necessarily exclude redistribution.

shopuld people be forced to give their hard-earned (or otherwise gotten) money to needy people, or should they be given the option to do so while doing their taxes?

Seriously, a lot of people give to charity and hate taxes because they're forced to pay them.. and some of those taxes go to programs that people view negatively.

So you see this question on your tax sheet:

Would you like to give some of your income to the General Welfare Fund (or whatever it'd be called)?

Yes -- 1%
Yes -- 2%
Yes -- 3%
... or other options by which you can choose how much of your money you want to be redistributed to needy people.

and then:

No.


the fledgling theory is that if people aren't forced to do it, many will choose to give anyway... and some, maybe, will give MORE than they currently give... because they have the power of chopice in the matter.

This way, economic freedom is upheld. And depending on how the donations went, perhaps financial equality would be increased too. That's about the only way I can figure to increase both financial freedom and financial equality. If it's forced, you're giving up financial freedom. If there is no redistribution, you lose financial equality.

At the same time, you are reducing the freedom of those whose money is taken for the redistribution; ceterus paribus, the system would result in zero net change in freedom, but the system is not expressible in a ceterus paribus form. If it were the government doing the redistribution, I would agree.

However, because redistribution of income ultimately penalizes the more productive and wealth-creating members of society and gives it to people who are less productive and create less wealth, the ripple effect from the loss of that wealth generation results in a net decline in economic freedom, and the more productive and wealth generating society as a whole was, the far greater the loss will be after it is taken away.This may be true if redistribution were done against a person's will, however if redistribution were done in the form of a utility fee (i.e. a person pays a fee to utilize a particular society or country) then the redistribution is done entirely with the person's knowledge and consent if the person continues to live in the society or country that has initiated the fee.

If it were the government doing the redistribution, I would agree.

But without government, how do you ensure that wealth is being redistributed fairly?

This may be true if redistribution were done against a person's will, however if redistribution were done in the form of a utility fee (i.e. a person pays a fee to utilize a particular society or country) then the redistribution is done entirely with the person's knowledge and consent if the person continues to live in the society or country that has initiated the fee.

Government would have to levy that fee in almost all cases, and would have to enforce it to keep people from circumventing the system in order to avoid the fee, with the result that people unable to circumvent it would be less free economically than they were prior to its implementation.

shopuld people be forced to give their hard-earned (or otherwise gotten) money to needy people, or should they be given the option to do so while doing their taxes?

should theives be forced to give their hard-earned (or otherwise gotten) loot to it's rightful owners, or should they be given the option to do so out of the goodness of their hearts?

But without government, how do you ensure that wealth is being redistributed fairly? The easiest way is to abolish money and then distribute wealth in a directly democratic manner. This isn't the only way, though, but it's the one I prefer.

Government would have to levy that fee in almost all cases, and would have to enforce it to keep people from circumventing the system in order to avoid the fee, with the result that people unable to circumvent it would be less free economically than they were prior to its implementation.I don't see how they could be less free if the reason that they are paying it results from their choice (even if it isn't their choice to pay the fee it is still their choice).

The easiest way is to abolish money and then distribute wealth in a directly democratic manner. This isn't the only way, though, but it's the one I prefer.

But then how do you determine wealth, especially of intellectual property and nonphysical assets? That removes another incentive to pursue these fields for commercial purposes, since it makes it impossible to value them.

I don't see how they could be less free if the reason that they are paying it results from their choice (even if it isn't their choice to pay the fee it is still their choice).

But if enough people and businesses don't pay it, it becomes impossible to redistribute wealth permanently. The system requires everyone to participate , or else those that don't will gain a massive and institutional advantage over those that do, with the result being the creation of permanent barriers to social mobility and greatly reduced economic freedom.

Businesses wouldn't want to pay the fee, because it would diminish the amount they have to invest in new production facilities and hiring. Also, the redistribution of wealth would remove incentives to increase productivity and would eliminate price flexibility in the marketplace, further dampening economic freedom.

But then how do you determine wealth, especially of intellectual property and nonphysical assets? That removes another incentive to pursue these fields for commercial purposes, since it makes it impossible to value them.Many theories about intellectual property conclude that there is no such thing as intellectual property rights, so the fact that we value them now is because they were thrown into the system for convenience and not because there is any such thing. As such, they could be eliminated. I'm not sure what other nonphysical assets would be that don't fall under the realm of intellectual property, so I can't answer about them specifically.

But if enough people and businesses don't pay it, it becomes impossible to redistribute wealth permanently. Naturally the fee would be mandatory, with no loopholes.

The system requires everyone to participate , or else those that don't will gain a massive and institutional advantage over those that do, with the result being the creation of permanent barriers to social mobility and greatly reduced economic freedom.So you see the problems that inequities of wealth lead to.

Businesses wouldn't want to pay the fee, because it would diminish the amount they have to invest in new production facilities and hiring. Of course, this would only be an issue if businesses are still legal.

Also, the redistribution of wealth would remove incentives to increase productivity and would eliminate price flexibility in the marketplace, further dampening economic freedom.It seems to me that society as a whole would be interested in increased productivity (at the very least from technology) so society would be vested in increasing productivity. It needn't come from businesses.

Many theories about intellectual property conclude that there is no such thing as intellectual property rights, so the fact that we value them now is because they were thrown into the system for convenience and not because there is any such thing. As such, they could be eliminated. I'm not sure what other nonphysical assets would be that don't fall under the realm of intellectual property, so I can't answer about them specifically.

The lack of protection for intellectual property would cause serious harm to the degree of intellectual freedom as well as remove yet another incentive to invent or develop new products or concepts be they scientific, technological, literary, cultural, or economic.

Protecting intellectual property maximizes intellectual freedom.

Naturally the fee would be mandatory, with no loopholes.

So, you really have no choice, which means economic freedom has been infringed. This also requires a government to monitor people and ensure they paid the fee, further reducing freedom. That in turn leads to the creation of an illegal gray sector that causes crime and increases socioeconomic inequality.

So you see the problems that inequities of wealth lead to.

Yes, which is why I do not support Friedman's policies in their entirety, or even a majority of them. Economic inequality needs to be addressed by giving more people the opportunity to compete freely in the marketplace, be it through government aid and public education or private charity and vouchers. Removing economic freedom may initially reduce inequality, but in the long run vastly increases it.

It seems to me that society as a whole would be interested in increased productivity (at the very least from technology) so society would be vested in increasing productivity. It needn't come from businesses.

Removing the profit motive and the income gap reduces the desire to increase productivity, because the motivator behind productivity is to reduce costs per unit output, not necessarily to increase it. Socially driven productivity gains come only as a result of extraordinary circumstances.

The best example is of the USSR; they had massive gains in productivity and industrial production in the 1930's-1950's, but gains stagnated and eventually turned negative due to the lack of a motivation to pursue further gains following the end of the war and their achievement of relative parity with the West militarily. Those patriotism-motivated improvements are not a standard occurence and will level off over time.

The lack of protection for intellectual property would cause serious harm to the degree of intellectual freedom as well as remove yet another incentive to invent or develop new products or concepts be they scientific, technological, literary, cultural, or economic.

Protecting intellectual property maximizes intellectual freedom.I fail to see how the elimination of a certain particular incentive to be intellectually free undermines intellectual freedom itself.

So, you really have no choice, which means economic freedom has been infringed. This also requires a government to monitor people and ensure they paid the fee, further reducing freedom. That in turn leads to the creation of an illegal gray sector that causes crime and increases socioeconomic inequality.The choice that you would have would be to continue to live in the country or society that has imposed the fee or move to a place that doesn't have the fee.

Yes, which is why I do not support Friedman's policies in their entirety, or even a majority of them. Economic inequality needs to be addressed by giving more people the opportunity to compete freely in the marketplace, be it through government aid and public education or private charity and vouchers. Removing economic freedom may initially reduce inequality, but in the long run vastly increases it.How would the government provide aid and public education without taxation, which would be a form of removing a certain amount of economic freedom in your view?

Removing the profit motive and the income gap reduces the desire to increase productivity, because the motivator behind productivity is to reduce costs per unit output, not necessarily to increase it. Socially driven productivity gains come only as a result of extraordinary circumstances.

The best example is of the USSR; they had massive gains in productivity and industrial production in the 1930's-1950's, but gains stagnated and eventually turned negative due to the lack of a motivation to pursue further gains following the end of the war and their achievement of relative parity with the West militarily. Those patriotism-motivated improvements are not a standard occurence and will level off over time.I don't agree that the increase in productivity came as a result of the majority of Russians wanting it, but rather because the government wanted it. This would be similar to a gain in productivity coming because a business owner wants it, and not because the employees do.

I fail to see how the elimination of a certain particular incentive to be intellectually free undermines intellectual freedom itself.

If your ideas are not protected from fraudulent claims, it removes some of the incentive to make them public. Also, protections on intellectual property give researchers and qualified personnel the opportunity to know what is and what isn't a vetted source of information and reduce the spread of disinformation among other things.

The choice that you would have would be to continue to live in the country or society that has imposed the fee or move to a place that doesn't have the fee.

So it's a Hobson's choice: Conform to our way or leave, which means people don't really have any freedom to pursue their own goals with the result being that there is actually no economic freedom. And, if it is a democratic system, what happens if there is enough support for the elimination of the tax?

How would the government provide aid and public education without taxation, which would be a form of removing a certain amount of economic freedom in your view?

Marginal analysis; the economic freedom gained by the institution of taxation to provide certain programs exceeds its cost due to the higher taxes needed to support it. In both the short and long runs, the benefits exceed the costs. The same is not true of redistribution.

I don't agree that the increase in productivity came as a result of the majority of Russians wanting it, but rather because the government wanted it. This would be similar to a gain in productivity coming because a business owner wants it, and not because the employees do.

Within a system like the one you are describing, since there are no longer any incentives to increase productivity due to the removal of the profit motive, private competition and the free labor market, the only sources of a drive to do so are either the government or the individual. However, because there is little real incentive to increase productivity on the individual's part, the only source of significant gains is the government.

If your ideas are not protected from fraudulent claims, it removes some of the incentive to make them public. Arguably, yes, but this doesn't mean that nobody will make anything public. If someone invents something that makes their own life easier, then it seems reasonable to assume that they will implement it, at least within their own lives.

Also, protections on intellectual property give researchers and qualified personnel the opportunity to know what is and what isn't a vetted source of information and reduce the spread of disinformation among other things.Couldn't something exist which states who an authoritative source of information is without protecting intellectual property?

So it's a Hobson's choice: Conform to our way or leave, which means people don't really have any freedom to pursue their own goals with the result being that there is actually no economic freedom. I see this as being the natural extension of the idea that employers don't need to enact provisions protecting their employees or do much of anything for them; after all, the employee can always leave.

And, if it is a democratic system, what happens if there is enough support for the elimination of the tax?Then naturally it would be eliminated.

Marginal analysis; the economic freedom gained by the institution of taxation to provide certain programs exceeds its cost due to the higher taxes needed to support it. In both the short and long runs, the benefits exceed the costs. The same is not true of redistribution.The benefits to society as a whole would exceed the costs, but the benefits to the individuals taxed would not do so.

Within a system like the one you are describing, since there are no longer any incentives to increase productivity due to the removal of the profit motive, private competition and the free labor market, the only sources of a drive to do so are either the government or the individual. However, because there is little real incentive to increase productivity on the individual's part, the only source of significant gains is the government.Groups of individuals could choose to increase productivity. If the widget machine makes 12 widgets an hour, and they realize they could have 14 widgets an hour if they adjust the machine slightly, it makes sense that they would do so. Also, it makes sense that if they believe they can further increase the number of widgets by inventing way to do so and then implementing it, it makes sense that they would try to convince one of the people within the group to do so. I don't see why they would be content with less productivity if they could easily change it.

Arguably, yes, but this doesn't mean that nobody will make anything public. If someone invents something that makes their own life easier, then it seems reasonable to assume that they will implement it, at least within their own lives.

Yes, but the incentive they have to use it on a large scale is limited and they have no guarantee of any compensation for it since the idea can simply be stolen and reverse engineered if the government so desires.

't something exist which states who an authoritative source of information is without protecting intellectual property?

It would be extremely difficult, since there would be so much (un)intentional plagarism going on; dissertations would be a particular mess which doesn't bode well for academia.

I see this as being the natural extension of the idea that employers don't need to enact provisions protecting their employees or do much of anything for them; after all, the employee can always leave.

Not the same thing. Employees enter their place of employment willingly and with the full freedom of being able to choose between multiple employers in the same system; this system does not provide the same degree of freedom, nor is it really consensual between government and people.

Employees have the significant ability, stemming from economic freedom to negotiate with their employers that would not exist in the relationship between citizen and government.

Then naturally it would be eliminated.

Then it would be impossible to implement without coercion.

The benefits to society as a whole would exceed the costs, but the benefits to the individuals taxed would not do so.

No, because the people who would benefit the most would contribute the least in return, with the result being a net loss because those who would be harmed the most tend to generate the most output and drive the most employment and wage growth.

Groups of individuals could choose to increase productivity. If the widget machine makes 12 widgets an hour, and they realize they could have 14 widgets an hour if they adjust the machine slightly, it makes sense that they would do so. Also, it makes sense that if they believe they can further increase the number of widgets by inventing way to do so and then implementing it, it makes sense that they would try to convince one of the people within the group to do so. I don't see why they would be content with less productivity if they could easily change it.

Productive gains almost always have an effect on employment in lower skill, lower productivity jobs. And most of the time, that effect is negative with employment gains being created higher up.

However, since these same threatened workers would have control over the manufacturing process, they have the choice of either implementing the productivity gains and reducing employment or intentionally resisting it to maximize employment; the short term decision to sacrifice productivity would have serious economic consequences in the long run, but decisions made democratically tend to focus on the short term impact.

Yes, but the incentive they have to use it on a large scale is limited and they have no guarantee of any compensation for it since the idea can simply be stolen and reverse engineered if the government so desires.Once the person has come up with the idea and used it in their own life, it could be copied by their neighbors, etc., eventually being implemented on a large scale.

It would be extremely difficult, since there would be so much (un)intentional plagarism going on; dissertations would be a particular mess which doesn't bode well for academia.Plagiarism is only an issue with the existence of intellectual property laws; people copying each other without those laws would not be plagiarism, it would simply be people copying each other.
However, it would be a bad idea for academia to accept unsourced information as being authoritative.

Not the same thing. Employees enter their place of employment willingly and with the full freedom of being able to choose between multiple employers in the same system; this system does not provide the same degree of freedom, nor is it really consensual between government and people. People enter countries willingly, with the full freedom of being able to choose between multiple countries to live in.

Employees have the significant ability, stemming from economic freedom to negotiate with their employers that would not exist in the relationship between citizen and government.People have the ability to negotiate with their government via their votes: they can say "I won't vote for you if you do this".

Then it would be impossible to implement without coercion.I don't see why; it's entirely possible for the majority of people to want such a tax.

No, because the people who would benefit the most would contribute the least in return, with the result being a net loss because those who would be harmed the most tend to generate the most output and drive the most employment and wage growth. So then who benefits from taxation used to provide education, and who loses from such taxation?

Productive gains almost always have an effect on employment in lower skill, lower productivity jobs. And most of the time, that effect is negative with employment gains being created higher up.

However, since these same threatened workers would have control over the manufacturing process, they have the choice of either implementing the productivity gains and reducing employment or intentionally resisting it to maximize employment; the short term decision to sacrifice productivity would have serious economic consequences in the long run, but decisions made democratically tend to focus on the short term impact.I don't see why the workers would wish to sacrifice productivity if those same workers are using the product that they create.

I've been reading selections of Milton Freidnman's Capitalism and Democracy, and I came across something that disturbed me.

Friedman, one of the most respected capitalist thinkers, has gotten a bunch of things wrong.

In the selection I am reading, he is relating freedom of politics to freedom of the market. That much makes sense to me. I support a free market as a necessary criterion of democracy, maybe my idea isn't as "free" as his is, but there is still a free market.

Then I get to where Friedman starts to talk about freedom within a socialist society. He describes how economic interactions and economic/political freedoms would work. It was here that I found out something: Friedman has no idea what socialism is. The society he describes (of absolute uniformity and where only governmental workers have high payrolls) is what the world has experienced as communist societies. Friedman, in effect, has no idea what socialism is. He missed the mark completely in his description of the so called 'socialist' society. How could someone who is so smart be so wrong about a major tennant of his argument?

The other issue I had was Friedman relating freedom of self to freedom of movement. What he states is that a check on the coersive power of government is the ability to move from town to town, state to state or company to company. What he acknowledges, but doesn't consider an argument though is that while the ability to move still exists, it may an unreachable ability for many people, still bringing in the coercion he is trying to fight.

His idea of freedom isn't applicable to all, only those with enough money to move around. His response to those that can't move out?

Get a better job.

Does he not realize that this is not possible for people because of their current economic situations. When you live from one paycheck to another, when you can't afford to go further away for work, or when you can't afford to move altogether, or don't have the skills for a better job, or any of the other millions of "ifs", his situation of freedom is impossible.

How did someone who considered this intelligent hit so far off the mark?

This is called a straw man - you provide assumptions of Friedman's argument without citeing any specifc examples or illustratoins of his premise ore the context therein. You then couple that with your own incomplete examples to give a general arguiment about nothing.

One easy flaw is your incorrect assumption;
"the ability to move still exists, it may an unreachable ability for many people, "
Apparently you don't watch much TV or you would notice that there are PLENTY of people at the bottom of the sociao-economic scale relocating every day - they are called illegal alients.

Sorry to sink your argument so swiftly - but your most telling error was this;

"Friedman has no idea what socialism is." wich is what is called an unqualified statement. Regardless - there is no more point in understanding how socialism works than there is in knowing how the Start Treck warp core works - both have their goundations firmly set in fantasy - as France is currently discovering.

The mistake most folks who argue for capitalism make is to presume that government has no role in it - the role of government is to create and run the framework whereby it is possible to run; enforce contracts, set standards of measure, currency, patents, etc. Without government capitalism would soon fail - and governments around the world are discovering that without capitalism - governments fail.

Economic freedom isn't limited to making money, it also includes spending money and acquiring the things that spending said money will get. If you increase the amount of money a person has to spend, you will likely be increasing their economic freedom.

...spending ONE'S OWN money...

freedom -- no redistribution of wealth

equality -- redistribution of wealth

This is called a straw man - you provide assumptions of Friedman's argument without citeing any specifc examples or illustratoins of his premise ore the context therein. You then couple that with your own incomplete examples to give a general arguiment about nothing.

If you want them that badly, I can go and find them again. At the moment, they are between pages 146 and 153 of the book Democracy edited by Phillip Green, Humanity Books, Amherst/New York c. 1993

One easy flaw is your incorrect assumption;
"the ability to move still exists, it may an unreachable ability for many people, "
Apparently you don't watch much TV or you would notice that there are PLENTY of people at the bottom of the sociao-economic scale relocating every day - they are called illegal alients.
Or, perhaps, American citizenss don't have the ability. Or they cannot rise to a better status because of lack of education. I don't know about you, but I live in Arizona and I really don't see very many mexicans in fields other than low-level labor. They risked everything they had to move here for a menial job. Now, they really can't go very many other places because they don't have the financial means to move about in the US.

Not a flaw and not an assumption. If you want to read a more full account of failed attempts at breaking the cycle of poverty (even with a head start) read Nickel and Dimed by Barbara Ehrenreich.

Sorry to sink your argument so swiftly - but your most telling error was this;

"Friedman has no idea what socialism is." wich is what is called an unqualified statement. Regardless - there is no more point in understanding how socialism works than there is in knowing how the Start Treck warp core works - both have their goundations firmly set in fantasy - as France is currently discovering.

1. You failed to sink the argument.
2. After reading the section I read, you will realize that it is not an unqualified statement. Friedman makes no room for market socialism when he talks about socialism, he does not acknowledge a working market. Instead, his version of socialism is the Russian totalitarian communist model. That is why I can say that he does not know what socialism is, he got the model he based his argument off of wrong. And as for socialism in the world, GBR has a model of it, so does Germany, France, Sweden, Switzerland, Austria, Finland, Norway, Denmark, Canada, and a few other countries. They seem to be doing alright.

The mistake most folks who argue for capitalism make is to presume that government has no role in it - the role of government is to create and run the framework whereby it is possible to run; enforce contracts, set standards of measure, currency, patents, etc. Without government capitalism would soon fail - and governments around the world are discovering that without capitalism - governments fail.

I will agree with you mostly there. I do think that a free market is necessary for a thriving nation, but I also think that the market needs to have controls placed upon it so it doesn't turn into Lindblom's "market as a prision" system.

Economic freedom isn't limited to making money, it also includes spending money and acquiring the things that spending said money will get. If you increase the amount of money a person has to spend, you will likely be increasing their economic freedom.

Spending your money. Freedom is the ability to earn value and use it as you desire. It doesn't cover stealing it from your neighbors. No one has the "right" to spend what they don't earn, or what someone else earned. By definition, you only have right to what is yours. It's only yours if you somehow created it or freely traded equivalent value for it.

People are agents of activity and action, not gravity wells. You have a right to gain value any way possible, so long as you don't infringe upon someone else's rights. You don't have the right to consume as much value as can be functionally stolen from or given by others, like a black hole sucking in matter.

...spending ONE'S OWN money...

freedom -- no redistribution of wealth

does not follow

Once the person has come up with the idea and used it in their own life, it could be copied by their neighbors, etc., eventually being implemented on a large scale.

But they would recieve nothing for it, and there would be no incentive to make that invention large scale because of the lack of profit or protection for their investments.

Plagiarism is only an issue with the existence of intellectual property laws; people copying each other without those laws would not be plagiarism, it would simply be people copying each other.
However, it would be a bad idea for academia to accept unsourced information as being authoritative.

Yes, but unfairly taking credit for others work inhibits educational facilities from truly judging your performance; if everyone plagarized the most competent or most intelligent researchers, getting PhDs would be a matter of simply copying their dissertations. Removal of IP laws would be the greatest destabilization of intellectual integrity short of closing the universities and schools.

People enter countries willingly, with the full freedom of being able to choose between multiple countries to live in.

If they have free rights to enter and leave the country, they also have to have the freedom to spend their money in other countries and to have those countries invest in them; otherwise they are not free.

people have the ability to negotiate with their government via their votes: they can say "I won't vote for you if you do this".[

Not as much as the employee has; he or she can approach their employer at any time and leave at any time, while the government changes much more slowly and requires far more dramatic change because of the slowness and size of government.

I don't see why; it's entirely possible for the majority of people to want such a tax.

But highly unlikely; it's as equally plausible as any political change, but it's not likely to happen.

So then who benefits from taxation used to provide education, and who loses from such taxation?

Everyone but the very poor lose money to taxes, but everyone who wants it can benefit from public education. Unlike redistribution of wealth, education increases the aggregate wealth creation of a society along with employment and productivity.

I don't see why the workers would wish to sacrifice productivity if those same workers are using the product that they create.

They do; the UAW in particular has opposed productivity increases to prevent their workers from being laid off.

Spending your money. Freedom is the ability to earn value and use it as you desire. It doesn't cover stealing it from your neighbors. No one has the "right" to spend what they don't earn, or what someone else earned. By definition, you only have right to what is yours. It's only yours if you somehow created it or freely traded equivalent value for it.

People are agents of activity and action, not gravity wells. You have a right to gain value any way possible, so long as you don't infringe upon someone else's rights. You don't have the right to consume as much value as can be functionally stolen from or given by others, like a black hole sucking in matter.

On the contrary, out of the sense of rights I come to the precise opposite conclusion that you do. The right to property is a consequence, and coordinates closely with, the right to life. Simply put, it is irrational to assume that because I will inherently struggle to preserve my life I will not also struggle to preserve my access to food to eat. Instead, if I have no food, and someone else has enough for two and won't give me any on terms I can provide, it is rational to assume that I will fight, even unto death, to get sufficient food to survive.

Nevertheless, this is precisely the setup you propose as being man's "natural right". Capitalism often does deprive us of the means to maintain our own subsistence, and it can and sometimes does require us to sell our labor at below the cost of survival. That being the case, it is perfectly rational for me to cease being capitalistic and take up the pitchfork and torch strategy, and it is equally rational for me to destroy the government that allows my starvation, because life in the state of nature is preferable to life under such a government.

-snip-

Well said.

[bump] C'mon people, an intelligent discussion. How often does the happen on NS. Seriously?

...spending ONE'S OWN money...

freedom -- no redistribution of wealth

equality -- redistribution of wealthI disagree. If to live in a country requires that you pay a fee to live there, you would be spending your own money to do so. If that wealth is the redistributed among the poorer citizens of the country, equality is increased. In this instance it is entirely possible to maximize equality and maximize freedom at the same time.

/snipI'm not ignoring your argument, but Xenophobialand answered it well, and I have nothing to add to his(?) statement.

But they would recieve nothing for it, and there would be no incentive to make that invention large scale because of the lack of profit or protection for their investments.It isn't necessary for the inventor of the invention to make the invention large scale; other people who wish to use the invention can do so, or each person who wishes to use the invention can simply copy it once for their own use.

Yes, but unfairly taking credit for others work inhibits educational facilities from truly judging your performance; if everyone plagarized the most competent or most intelligent researchers, getting PhDs would be a matter of simply copying their dissertations. Removal of IP laws would be the greatest destabilization of intellectual integrity short of closing the universities and schools.You can remove the concept of patenting intellectual property (which is the problem with such laws, the patent) without removing the concept of crediting others for their work. (I didn't realize that this specifically was what you were talking about, I agree that people should be credited for their work, but this does not mean they should be paid for it, or have their permission required to use it.)

If they have free rights to enter and leave the country, they also have to have the freedom to spend their money in other countries and to have those countries invest in them; otherwise they are not free.I don't see how the latter part follows from the first part; it's entirely possible that a country would allow inflow and outflow of citizens but not capital. If an individual willingly enters into a country that does not allow outflows of capital, and he knows this, he is still free. If an individual willingly enters into a country that doesn't allow money, and he knows this, he is still free. As long as he can emigrate at any time he wants, he is free.

Not as much as the employee has; he or she can approach their employer at any time and leave at any time, while the government changes much more slowly and requires far more dramatic change because of the slowness and size of government.I think that the employee's ability to negotiate is significantly limited by the fact that capital is highly mobile, but labor isn't. It is also limited compared to democracy by the fact that a politician or a referendum item needs the votes of more than half of the population to pass, but an employer may only need the labor of .001% of the population in order to run his business.

But highly unlikely; it's as equally plausible as any political change, but it's not likely to happen.If the founders of the country are all people who wish to implement such a fee, then it would be highly likely.

Everyone but the very poor lose money to taxes, but everyone who wants it can benefit from public education. Unlike redistribution of wealth, education increases the aggregate wealth creation of a society along with employment and productivityTrue, but to fund public education via taxation would decrease the wealth of the particular individual who was taxed. That individual would then argue that it's their money and the government has no right to take it from them, or some similar argument. How would you explain to them that the government does have the right to tax them?

They do; the UAW in particular has opposed productivity increases to prevent their workers from being laid off.Ah, I see what you mean. A separate employer would lay off workers if he doesn't need them, so in that instance I would agree with you. In the instance I propose, however, the workers are also the employers, so it doesn't make sense that they would vote to lay themselves off.

Instead, if I have no food, and someone else has enough for two and won't give me any on terms I can provide, it is rational to assume that I will fight, even unto death, to get sufficient food to survive.

Don't kid yourself. If you are starving and another only has enough for ONE you will still fight, even unto death to get sufficient food to survive. Don't pretend like people will starve to death on moral grounds.

Why is it important to point that out? Scarcity. There are finite resources within the world and there must be a system that can deal with the distribution of these finite resources. Like you said it is irrational to think people won't fight over finite resources, so positive legal property rights were created to provide for the peaceful defense of property ownership.

The great thing about a good capitalism, though, is that the amount of work it takes to provide yourself with a meal is less than the work it takes violently take it from someone else. Unless of course the person was a child or a cripple. But you just probably want to beat up cripples and children, don't you. You dirty communist.

(Ignore the last few sentences)

seems to me that the 'rightfully' part is important, and therefore 'economic freedom' doesn't necessarily exclude redistribution.

If you use his definition of rightfully, then yes redistribution is necessarily excluded.

I wouldn't agree that it eliminates economic freedom. It increases the economic freedom of those who benefit from the leveling of wealth.
I would argue that if the government did this, it would be a trade off of about zero freedom gained or lost across society. However, if people within the society/community voluntarily agreed to level their wealth, then to do so would be an act of freedom.

The economic leveling of wealth would require the complete elimination of property rights, no personal or real property, no trade, no disposal.

Any property right inherently will cause differences in wealth through economic forces.

Democracy does not equal or guarantee freedom for a particular individual, or for all individuals, but when done properly it does guarantee freedom for the most individuals. Any other system, implemented properly or not, will guarantee freedom for fewer individuals than democracy does.

Even the majority can vote away its freedom. However, I think "guaranteeing freedom for the most individuals" is still greatly insufficient, and any system dedicated to democracy's provision of freedom will also be insufficient.

The economic leveling of wealth would require the complete elimination of property rights, no personal or real property, no trade, no disposal.

Any property right inherently will cause differences in wealth through economic forces.I don't see why this should be. Perhaps you are thinking of the concept of trade, but I don't see why trade is required for property rights. I would also say that it is impossible if property rights are based upon use; if you are trading it you are no longer using it and therefore wouldn't have the right to it anymore.

Even the majority can vote away its freedom. However, I think "guaranteeing freedom for the most individuals" is still greatly insufficient, and any system dedicated to democracy's provision of freedom will also be insufficient.Even if it is insufficient, I've got to go with Churchill here..."democracy is the worst system, except for all of the others," or something like that.

I don't see why this should be. Perhaps you are thinking of the concept of trade, but I don't see why trade is required for property rights. I would also say that it is impossible if property rights are based upon use; if you are trading it you are no longer using it and therefore wouldn't have the right to it anymore.

Any time a system of claims is placed upon a scarce item or resource, the claim will have an inherent value in itself. Since this claim is tied to the resource, it can be included in the value of a item or resource. These claims will then vary in value according to demand, so that those that have claims to more scarce resources and items will have more wealth.

The only solution to inequal wealth is to make sure everybody has the same thing, or make sure everybody has nothing. But even labor makes that impossible.

Even if it is insufficient, I've got to go with Churchill here..."democracy is the worst system, except for all of the others," or something like that.

I certainly agree that democracy should be used rather than any other form of government. However, democracy should not be used to justify an increase in government power or size.

Don't kid yourself. If you are starving and another only has enough for ONE you will still fight, even unto death to get sufficient food to survive. Don't pretend like people will starve to death on moral grounds.

Why is it important to point that out? Scarcity. There are finite resources within the world and there must be a system that can deal with the distribution of these finite resources. Like you said it is irrational to think people won't fight over finite resources, so positive legal property rights were created to provide for the peaceful defense of property ownership.

The great thing about a good capitalism, though, is that the amount of work it takes to provide yourself with a meal is less than the work it takes violently take it from someone else. Unless of course the person was a child or a cripple. But you just probably want to beat up cripples and children, don't you. You dirty communist.

(Ignore the last few sentences)

I would argue, as would Locke, that resources are far less scarce than most people realize, and what really matters is the manner of distribution. But that's neither here nor there.

The real meat of the argument is that, so far as you go, you are correct that this is precisely why positive property rights are extended in the social contract. The problem, however, is that you neglect to mention that no right in the social contract is absolutely inviolable and non-negotiable: we can be asked to fight for our country even unto death, we can be asked to pay taxes which infringe on our unrestricted right to property, and we can be asked to suspend some of our liberty under certain circumstances. How much each liberty is abridged depends on the social contract and the person's place within society. What is crucial to remember, however, is that any society which asks more of its citizens liberties than the inconveniences of the state of nature would are necessarily tyrannical and will be destroyed given enough time. Further, the absolute unrestricted right to property that libertarians espouse usually fits this criterion for tyranny, because it can put people in the position of either starving or revolting.

I
It isn't necessary for the inventor of the invention to make the invention large scale; other people who wish to use the invention can do so, or each person who wishes to use the invention can simply copy it once for their own use.

But that means there is no incentive to invent improvements of existing products other than altruism, which obviously limits development of new products due to the removal of the profit motive as incentive to invent.

You can remove the concept of patenting intellectual property (which is the problem with such laws, the patent) without removing the concept of crediting others for their work. (I didn't realize that this specifically was what you were talking about, I agree that people should be credited for their work, but this does not mean they should be paid for it, or have their permission required to use it.)

But if there is no law against it, there is no reason why a person would credit others for work when they could save time and effort by simply copying it; there would be nothing that the original creator of the work could do about it, and there would be no standard way to ensure works are properly vetted and attributed.

The ability to recieve payment for the work goes hand in hand with protecting it; if a person could not recieve additional income and/or credit and attribution for their work, there would be far less incentive to do so except for in fields motivated by altruistic other than economic desires. However, the fields most associated with economic desires tend to be those that maximize productivity and increase the quality of other products, and if they recieve no additional benefit for their work there is little desire to pursue such work.

I don't see how the latter part follows from the first part; it's entirely possible that a country would allow inflow and outflow of citizens but not capital. If an individual willingly enters into a country that does not allow outflows of capital, and he knows this, he is still free. If an individual willingly enters into a country that doesn't allow money, and he knows this, he is still free. As long as he can emigrate at any time he wants, he is free.

But that doesn't stop it from occuring illegally; by restricting the flow of capital while allowing the free flow of people, there would be a massive criminal sector dedicated to the illegal importation of currency, and since currency is far more fluid than any other illegal product this sector would become a serious problem.

It's the equivalent of prohibition, except without the added difficulty of exchanging money for an illegal product; the money is the illegal product. Also, this would cause a serious problem in the valuation of the capital and the exchange rates for it provided such exchanges were limited.

It is impossible to allow freedom of mobility without freedom of trade; illegally or legally, money will flow across borders.

I think that the employee's ability to negotiate is significantly limited by the fact that capital is highly mobile, but labor isn't. It is also limited compared to democracy by the fact that a politician or a referendum item needs the votes of more than half of the population to pass, but an employer may only need the labor of .001% of the population in order to run his business.

But in a free enterprise system, there are many thousands of small, medium, and large employers all competing for the same factors of production. At the corporate level, competition for labor is further increased by the increased demand for specialization and larger quantities of production and there is even more competition from foreign investors. Also, there is the option of entrepreneurship; redistribution of wealth would destroy this option and greatly reduce the competition for capital.

The caveat is that the employee's negotiating ability is significantly increased or decreased according to demand for these skills; however, they still have the power to negotiate individually. In a direct democracy system, the ability of the individual to negotiate individually would be virtually impossible, trapping them in a tyranny of the majority regardless of skills.

If the founders of the country are all people who wish to implement such a fee, then it would be highly likely.

But that is a very huge if; any ideology could theoretically work if everyone who founded it supported the idea.

True, but to fund public education via taxation would decrease the wealth of the particular individual who was taxed. That individual would then argue that it's their money and the government has no right to take it from them, or some similar argument. How would you explain to them that the government does have the right to tax them?

The people elected politicians in to office who imposed that tax and that system; it's a democratic system and therefore the decisions made have to stand. If they want to change them, they have to elect people who agree with that particular change. Again, coming back to the idea that any ideology is possible if enough people support it...that doesn't mean by any stretch it is definitely a good thing or is logical, but it is the will of the people.

Ah, I see what you mean. A separate employer would lay off workers if he doesn't need them, so in that instance I would agree with you. In the instance I propose, however, the workers are also the employers, so it doesn't make sense that they would vote to lay themselves off.

So the incentive to implement productivity is even lower, since the same people who make the decision will be affected by it. This leads to redundancy and inefficency, and eventually becomes unsustainable.

I would argue, as would Locke, that resources are far less scarce than most people realize, and what really matters is the manner of distribution. But that's neither here nor there.

The real meat of the argument is that, so far as you go, you are correct that this is precisely why positive property rights are extended in the social contract. The problem, however, is that you neglect to mention that no right in the social contract is absolutely inviolable and non-negotiable: we can be asked to fight for our country even unto death, we can be asked to pay taxes which infringe on our unrestricted right to property, and we can be asked to suspend some of our liberty under certain circumstances. How much each liberty is abridged depends on the social contract and the person's place within society. What is crucial to remember, however, is that any society which asks more of its citizens liberties than the inconveniences of the state of nature would are necessarily tyrannical and will be destroyed given enough time. Further, the absolute unrestricted right to property that libertarians espouse usually fits this criterion for tyranny, because it can put people in the position of either starving or revolting.

The trouble is that we have reached a level of technology that causes wealth and capital access to be quite pervasive. The people starving are going to be limited to a very, very limited minority, who will be fighting a majority who has all the wealth.

That is why I don't see capitalism going anywhere. If anything the continued leveling of distribution chains will cease the stockpiling of wealth and the free market will eventually begin to resemble a socialist system.

Freedom is not a guarantee of practical ability, but a guarantee of the absence of coercive restraint.

To guarantee practical ability is to limit freedom.

I've been reading selections of Milton Freidnman's Capitalism and Democracy, and I came across something that disturbed me.

How did someone who considered this intelligent hit so far off the mark?

Give the guy a break it must be hard writing books and and starring in such big hits as the Shawshank Redemption and Million Dollar Baby.

Any time a system of claims is placed upon a scarce item or resource, the claim will have an inherent value in itself. Since this claim is tied to the resource, it can be included in the value of a item or resource. These claims will then vary in value according to demand, so that those that have claims to more scarce resources and items will have more wealth.But it isn't the claim that would be accepted, it's the use itself. It wouldn't be acceptable to claim something but not use it.

The only solution to inequal wealth is to make sure everybody has the same thing, or make sure everybody has nothing. But even labor makes that impossible.I don't know that it's necessary to make sure that everybody has the same thing. If everything is valued the same, it would simply be necessary to make sure everybody has the same number of things.

I certainly agree that democracy should be used rather than any other form of government. However, democracy should not be used to justify an increase in government power or size.Democracy itself shouldn't be, no, but usually in order to get people to vote for an increase you will need to provide them with information on why it would be a good idea. That information might contains perfectly good reasons for increasing government power or size.

But that means there is no incentive to invent improvements of existing products other than altruism, which obviously limits development of new products due to the removal of the profit motive as incentive to invent.The incentive to improve an existing product would be to improve it for your own use. If somebody has a good idea on how to fix something and it would make their own life easier, then they would do so, if they have the ability to. I don't see why somebody wouldn't make things easier for themselves if they could.

But if there is no law against it, there is no reason why a person would credit others for work when they could save time and effort by simply copying it; there would be nothing that the original creator of the work could do about it, and there would be no standard way to ensure works are properly vetted and attributed.You gave an example of academia being unsure of whether or not something was credited. In that example, the academic institutions themselves could refuse to give out degrees or grades on papers that aren't properly sourced.

The ability to recieve payment for the work goes hand in hand with protecting it; if a person could not recieve additional income and/or credit and attribution for their work, there would be far less incentive to do so except for in fields motivated by altruistic other than economic desires. However, the fields most associated with economic desires tend to be those that maximize productivity and increase the quality of other products, and if they recieve no additional benefit for their work there is little desire to pursue such work.I don't see why someone should receive added income for their work or idea; they still have it, nobody has taken it from them.

But that doesn't stop it from occuring illegally; by restricting the flow of capital while allowing the free flow of people, there would be a massive criminal sector dedicated to the illegal importation of currency, and since currency is far more fluid than any other illegal product this sector would become a serious problem. The incentive to import currency would be reduced because they are unlikely to trade it within the country, (except on the black market).

It's the equivalent of prohibition, except without the added difficulty of exchanging money for an illegal product; the money is the illegal product. Also, this would cause a serious problem in the valuation of the capital and the exchange rates for it provided such exchanges were limited. This is another reason people would be foolish to take money into a country that doesn't allow it.

It is impossible to allow freedom of mobility without freedom of trade; illegally or legally, money will flow across borders.If people want to bring valueless money into a country (as far as that country is concerned) then they're welcome to, but it would be silly.

But in a free enterprise system, there are many thousands of small, medium, and large employers all competing for the same factors of production. At the corporate level, competition for labor is further increased by the increased demand for specialization and larger quantities of production and there is even more competition from foreign investors. Also, there is the option of entrepreneurship; redistribution of wealth would destroy this option and greatly reduce the competition for capital.In a free enterprise system, most people would be required to work in order to live. Their ability to negotiate would be hampered by their necessity to fulfill their biological needs.

The caveat is that the employee's negotiating ability is significantly increased or decreased according to demand for these skills; however, they still have the power to negotiate individually. In a direct democracy system, the ability of the individual to negotiate individually would be virtually impossible, trapping them in a tyranny of the majority regardless of skills.I don't see why somebody's skill should make their vote in and of itself matter more, though their skills might be reason for people to vote the way they want them to. (I don't necessarily mean skills in charisma, either.)

But that is a very huge if; any ideology could theoretically work if everyone who founded it supported the idea.I agree, which is one reason why I believe in the right to secession.

The people elected politicians in to office who imposed that tax and that system; it's a democratic system and therefore the decisions made have to stand. If they want to change them, they have to elect people who agree with that particular change. Again, coming back to the idea that any ideology is possible if enough people support it...that doesn't mean by any stretch it is definitely a good thing or is logical, but it is the will of the people.So then, even if you think it's a bad idea to equalize wealth, people would have the right to do so if it's in a democratic manner. Good, now what's left is to make the case that doing so would be a good idea.

So the incentive to implement productivity is even lower, since the same people who make the decision will be affected by it. This leads to redundancy and inefficency, and eventually becomes unsustainable.Why would the incentive to increase productivity be lower? Increasing productivity would increase both the amount of product and the amount of profit made. As long as there's a market for the product (not that I agree with markets) the workers will have an incentive to increase productivity, and because they run the business, they can do so in a way that's most comfortable for them.

But it isn't the claim that would be accepted, it's the use itself. It wouldn't be acceptable to claim something but not use it.

But nevertheless, a use claim would still be a claim and would still have value. Furthermore, a system of use claims and not necessity claims would drive trade, as people would give up a usable commodity if they received one that they deemed more usable. Right there you have a market set up with a market derived value for claims.

I don't know that it's necessary to make sure that everybody has the same thing. If everything is valued the same, it would simply be necessary to make sure everybody has the same number of things.

How can everything be valued the same?

I just think you need to concentrate on the pooling of wealth and misuse of property rights and just hope that works to even out the wealth. If you show that there is exploitation and manage to fix the problem, you have fixed capitalism

Democracy itself shouldn't be, no, but usually in order to get people to vote for an increase you will need to provide them with information on why it would be a good idea. That information might contains perfectly good reasons for increasing government power or size.

Not exactly what I meant.

I meant that one should not want to increase government size on the expectation that democracy will maintain the liberty of the people through the increase. In other words, you shouldn't say that we should have a government assigned distribution of resources under the assumption that democracy will keep it free.

The incentive to improve an existing product would be to improve it for your own use. If somebody has a good idea on how to fix something and it would make their own life easier, then they would do so, if they have the ability to. I don't see why somebody wouldn't make things easier for themselves if they could.

But that prevents widespread adaptation of the product, which hinders productivity growth. Also, the democratic means of decision making would further prevent the implementation of improvements to the productive process.

You gave an example of academia being unsure of whether or not something was credited. In that example, the academic institutions themselves could refuse to give out degrees or grades on papers that aren't properly sourced.

But if there is no legal means of doing so, they would be unable to seriously enforce such restrictions; even if it were possible to do so, it would greatly slow the ability of researchers to develop new work and would reduce the graduation of new, certified doctors and other advanced personnel.

I don't see why someone should receive added income for their work or idea; they still have it, nobody has taken it from them.

Many technologies provide little or no benefit to their inventor, but rather to some process that they are not directly involved in; an inventor would have little direct use for an improved method of producing gasoline, or a new means of manufacturing machinery. Those inventions are pursued because of the economic opportunities that come from patenting and selling them, not forthe sake of invention. Industrial innovation would stagnate if the profit motive were removed.

The incentive to import currency would be reduced because they are unlikely to trade it within the country, (except on the black market).

This is another reason people would be foolish to take money into a country that doesn't allow it.If people want to bring valueless money into a country (as far as that country is concerned) then they're welcome to, but it would be silly.

If there is no money, there is no way to value goods and services which means something else will arise as a means of valuation and that will become the focus of illegal trade. Furthermore, since autarky is virtually impossible to achieve some means of evaluating the value of foreign goods would be required and some means of paying for the goods would also be required. Without money, there would also need to be an exchange system for foreign currency and that would also lead to crime.

No matter what, there would be a serious organized crime problem if the flow of money and goods were restricted.

In a free enterprise system, most people would be required to work in order to live. Their ability to negotiate would be hampered by their necessity to fulfill their biological needs.

There is a need to work, but not for one employer. The demand for labor is high enough that an employee can find multiple offers for their employment that offer better wage/salary due to the competition for that labor. Unless they are in a structurally vulnerable position, the employee can always use the demand for their labor to negotiate for benefits from their current employer or can take a new job with a company that offers more.

I don't see why somebody's skill should make their vote in and of itself matter more, though their skills might be reason for people to vote the way they want them to. (I don't necessarily mean skills in charisma, either.)

Skilled labor produces more value, is more productive and is more specialized, increasing demand and therefore increasing the money recieved for that particular service. Unskilled labor does not produce as much value and is much more plentiful, driving down its price and making it less capable of negotiation.

There is nothing wrong with this; it encourages economic specialization and increases the overall income of the economy as well as making it more productive and with better labor utilization. A diversified, well educated economy is better insulated against economic difficulties and achieves higher employment and economic growth, with superior wages and benefits.

I agree, which is one reason why I believe in the right to secession.

Of course, you run in to the difficulties of doing so which makes it much more complicated.

So then, even if you think it's a bad idea to equalize wealth, people would have the right to do so if it's in a democratic manner. Good, now what's left is to make the case that doing so would be a good idea.

Regardless of whether it is a good or bad idea, if the people want it they should be allowed to do it. I don't think it is a good idea and would likely end in disaster, but if the people want it they should be free to do so but they must be ready to deal with the consequences of their decisions.

Why would the incentive to increase productivity be lower? Increasing productivity would increase both the amount of product and the amount of profit made. As long as there's a market for the product (not that I agree with markets) the workers will have an incentive to increase productivity, and because they run the business, they can do so in a way that's most comfortable for them.

Unskilled labor is reduced by productivity upgrades, and since all types of labor have the same influence on the decisionmaking process it is likely that the unskilled laborers would resist implementing upgrades because they would become structurally unemployed. In manufacturing, where unskilled labor is used more often than in many service industries, there would be the strongest resistance to productivity upgrades, with the result being that it would not be implemented.

Furthermore, since there is no profit motive, no management system and greatly reduced labor market competition the unskilled labor might decide to raise prices and wages rather than increase productivity, resulting in increasingly severe inflation.

Give the guy a break it must be hard writing books and and starring in such big hits as the Shawshank Redemption and Million Dollar Baby.

what?

what?

He's referring to Morgan Freeman. I really hope it was a joke.

He's referring to Morgan Freeman. I really hope it was a joke.


Me too. Otherwise I am going to be very scared about the intellectual future of someone's country.

But nevertheless, a use claim would still be a claim and would still have value. Furthermore, a system of use claims and not necessity claims would drive trade, as people would give up a usable commodity if they received one that they deemed more usable. Right there you have a market set up with a market derived value for claims. No, because there would be a gap in time between when somebody stops using whatever it was they were using and the time that they would trade it, and so at that point that they stop using it they no longer have the claim to it.

I suppose I were to explain what I mean using a capitalist metaphor, once somebody puts a "For Sale" sign in their front yard, their house has entered the market. What I'm saying is that once something enters the market, the claim on it would no longer be valid.

How can everything be valued the same?Because value is subjective, The subjective valuer doesn't have to take into account the item's scarcity, or it's demand, or how difficult it was to make if they don't want to. Since it isn't necessary to do so, everyone within a society could easily decide that everything that enters the society is worth the same. They don't have to have a good reason for setting a value on something if they don't want to, that's the beauty of subjectivity.

I just think you need to concentrate on the pooling of wealth and misuse of property rights and just hope that works to even out the wealth. If you show that there is exploitation and manage to fix the problem, you have fixed capitalismYes, but for how long? Any system with different valuations on something is going to cause some people to make more money than others. Less scrupulous people will use their money to start pooling wealth and creating laws allowing for the misuse of property rights.

Not exactly what I meant.

I meant that one should not want to increase government size on the expectation that democracy will maintain the liberty of the people through the increase. In other words, you shouldn't say that we should have a government assigned distribution of resources under the assumption that democracy will keep it free.Ah, sorry, I misunderstood. I don't see any other way of keeping it free. Exchanges between individuals almost always ends up with one individual getting the better end of the deal. Even if they both feel as though they made out on the deal, one of them will almost always make more from it than the other will. As businesses get bigger and bigger, they will be able to buy in bulk and undercut their competition, further increasing the likelihood of this happening.

But that prevents widespread adaptation of the product, which hinders productivity growth. Also, the democratic means of decision making would further prevent the implementation of improvements to the productive process.It seems to me that capitalism is good at filling demands, this I can give it credit for, but it is even better at creating them. If the people don't demand something on their own, chances are they don't need it. In the system I propose, it will be difficult to create demands for something. Therefore, just about all technological effort will be spent on filling the demands that people already have and less effort will be spent on useless items that people don't really need. In other words, simply because there aren't as many inventions out there doesn't mean it's a bad thing.

But if there is no legal means of doing so, they would be unable to seriously enforce such restrictions; even if it were possible to do so, it would greatly slow the ability of researchers to develop new work and would reduce the graduation of new, certified doctors and other advanced personnel.If they refuse to give out any degrees, they can enforce the decisions. They would have all of the power. As long as they were consistent about doing this, it is unlikely someone would try to get around it, so I don't see the likelihood of this slowing down the graduation process.

Many technologies provide little or no benefit to their inventor, but rather to some process that they are not directly involved in; an inventor would have little direct use for an improved method of producing gasoline, or a new means of manufacturing machinery. Those inventions are pursued because of the economic opportunities that come from patenting and selling them, not forthe sake of invention. Industrial innovation would stagnate if the profit motive were removed.Then perhaps that inventor could join a coop and talk to the group of people there about his idea for manufacturing machinery if they make him a member, or he could join a society where all governmental and most economic decisions are done in a directly democratic manner and convince the people there that a new method of producing gasoline would be in their best interest.

In case you're going to ask why someone would bother becoming an inventor if they aren't going to get filthy rich from it, I'll just point out that some people like doing scientific research and don't do it for the money.

If there is no money, there is no way to value goods and services which means something else will arise as a means of valuation and that will become the focus of illegal trade. I don't see why there must be one set standard currency for doing so, people could value goods against each other (a barter system), or set up a system of free distribution, or some other method.

Furthermore, since autarky is virtually impossible to achieve some means of evaluating the value of foreign goods would be required and some means of paying for the goods would also be required.Without money, there would also need to be an exchange system for foreign currency and that would also lead to crime.

No matter what, there would be a serious organized crime problem if the flow of money and goods were restricted.An international bartering system would be one way of doing so.

There is a need to work, but not for one employer. The demand for labor is high enough that an employee can find multiple offers for their employment that offer better wage/salary due to the competition for that labor. Unless they are in a structurally vulnerable position, the employee can always use the demand for their labor to negotiate for benefits from their current employer or can take a new job with a company that offers more.True, but there is also a high demand for employers. The employer doesn't have to take the first employee or even the first qualified employee who walks in the door. An employee has to work, but an employer doesn't have to open up new positions if they don't feel those new positions will be profitable enough.

Skilled labor produces more value, is more productive and is more specialized, increasing demand and therefore increasing the money recieved for that particular service. Unskilled labor does not produce as much value and is much more plentiful, driving down its price and making it less capable of negotiation.

There is nothing wrong with this; it encourages economic specialization and increases the overall income of the economy as well as making it more productive and with better labor utilization. A diversified, well educated economy is better insulated against economic difficulties and achieves higher employment and economic growth, with superior wages and benefits.Yes, but you seemed to imply that skilled laborers should have their democratic vote be more valuable than unskilled laborers. Guess I misinterpreted.

Of course, you run in to the difficulties of doing so which makes it much more complicated.Yes, nation states are horrible at practicing democracy when it is inconvenient for them to do so, this is unfortunate.

Regardless of whether it is a good or bad idea, if the people want it they should be allowed to do it. I don't think it is a good idea and would likely end in disaster, but if the people want it they should be free to do so but they must be ready to deal with the consequences of their decisions.I agree.

Unskilled labor is reduced by productivity upgrades, and since all types of labor have the same influence on the decisionmaking process it is likely that the unskilled laborers would resist implementing upgrades because they would become structurally unemployed. In manufacturing, where unskilled labor is used more often than in many service industries, there would be the strongest resistance to productivity upgrades, with the result being that it would not be implemented.Unskilled labor would only be reduced by productivity upgrades if the demand for the product doesn't increase, though in most cases the demand doesn't increase, so I see your point. However, it seems to me that most of the unskilled laborers don't really enjoy that type of work and would much rather do something else; this would encourage them to get an education to do so.

In capitalism, something like this would happen, and the conservatives would say that the unemployed can always get an education and a new job in a higher demand field, but they always leave out the significant point of what are the unemployed people going to do in the meantime? I believe my system would solve this issue.

Furthermore, since there is no profit motive, no management system and greatly reduced labor market competition the unskilled labor might decide to raise prices and wages rather than increase productivity, resulting in increasingly severe inflation.Ah, but there's no money, remember?

It seems to me that capitalism is good at filling demands, this I can give it credit for, but it is even better at creating them. If the people don't demand something on their own, chances are they don't need it. In the system I propose, it will be difficult to create demands for something. Therefore, just about all technological effort will be spent on filling the demands that people already have and less effort will be spent on useless items that people don't really need. In other words, simply because there aren't as many inventions out there doesn't mean it's a bad thing.

People invent because they want to have more and better things, and to increase their ability to meet their economic wants.
Since the purpose of an economic system is to maximize the efficency of the distribution of resources to meet those wants, by suppressing invention and innovation due to a lack of that incentive would lead to technological and productive stagnation to the point where the system would no longer be able to meet economic wants and would cause shortages/inflation with the result being the emergence of a new class system far more segregated than what had happened in the past due to the democratic control over the production process which would result in the goods going to the people who control them first and then to everyone else according to societal rank.

If they refuse to give out any degrees, they can enforce the decisions. They would have all of the power. As long as they were consistent about doing this, it is unlikely someone would try to get around it, so I don't see the likelihood of this slowing down the graduation process.

Even so, it would be incredibly easy to start a diploma mill and give out certifications using plagarized work, and there would be little these institutions could do about it because there would not be a legal code to shut them down since the crime of IP theft does not exist.

Then perhaps that inventor could join a coop and talk to the group of people there about his idea for manufacturing machinery if they make him a member, or he could join a society where all governmental and most economic decisions are done in a directly democratic manner and convince the people there that a new method of producing gasoline would be in their best interest.

In case you're going to ask why someone would bother becoming an inventor if they aren't going to get filthy rich from it, I'll just point out that some people like doing scientific research and don't do it for the money.

The research they do tends to have firstly societal rather than economic value, for example new antibiotics or means of solving mathematical problems. Other things, like the engineering sciences, would not have the same advancements because there is no incentive to invent new manufacturing processes or new chemicals for goods production other than the economic benefits, and the bulk of people in these fields work in private industry.


I don't see why there must be one set standard currency for doing so, people could value goods against each other (a barter system), or set up a system of free distribution, or some other method.

Some goods are too valuable or too complicated to be paid for through barter, and it is impossible to have that system on a large scale. Furthermore, a standardized barter system would require the production of additional goods for the purpose of barter, which would be far more economically inefficent and resource consuming than paper money. It would be impossible to trade as well, and there would be no system of banking which would even further restrict economic growth leading to shortages, inflation, and unemployment.

Free distribution would inevitably lead to shortages because demand approaches infinity as the price of a good approaches zero, and supply approaches zero as well. In this system, it would be even worse because supply is inflexible and would require a massive, concerted effort to meet demand rather than market forces.

An international bartering system would be one way of doing so.

Again, you have the problem of valuation as well as creating a standard system of exchange between nations. Furthermore, the system would be unworkable because with barter is almost impossible to assign quality pricing to goods in a standard method, with the result being that the system would become more inefficent because of the subjective nature of the valuation process.

True, but there is also a high demand for employers. The employer doesn't have to take the first employee or even the first qualified employee who walks in the door. An employee has to work, but an employer doesn't have to open up new positions if they don't feel those new positions will be profitable enough.

They won't hire the first applicant necessarily, but they also know that there are multiple employers who are competing for that labor and are making offers. If an applicant recieves multiple offers for their employment, they have considerable power over the employers in terms of securing salary and benefits.

The profitability of hiring is why unemployment rises during recessions and falls during expansions, but if you remove profit from the business cycle it reduces the overall demand for labor and creates permanent, cyclical unemployment. Furthermore, the equalization of wealth would further dampen the ability of companies to hire because there would be no large-scale purchases from wealthier customers.

The other source of reduced employment would be the reduction in capital expenditures by businesses. The level of investment is directly related to the rate of return on the investment; if there is no rate of return they will only make investments enough to meet their demands for replacement of equipment and perhaps only marginal increases in production. This inevitably leads to shortages and inflation and a breakdown in the production process as well as higher unemployment due to the elimination of the capital-goods producing sector of the economy.

Yes, but you seemed to imply that skilled laborers should have their democratic vote be more valuable than unskilled laborers. Guess I misinterpreted.

I don't support democratic management of business, but if it were to happen the employees would have to have equal votes to prevent the emergence of a new class system and inequality.

Yes, nation states are horrible at practicing democracy when it is inconvenient for them to do so, this is unfortunate.

Can't argue with that.

Unskilled labor would only be reduced by productivity upgrades if the demand for the product doesn't increase, though in most cases the demand doesn't increase, so I see your point. However, it seems to me that most of the unskilled laborers don't really enjoy that type of work and would much rather do something else; this would encourage them to get an education to do so.

Yes, but if income is equalized there is little incentive to do so; they can get the same pay and benefits working on the production line as they could getting a degree in economics and running the company, with less cost and effort along the way. There would have to be an incentive to pursue higher education, since the democratic system of management would inevitably lead to suppression of these productivity upgrades because there are usually many more production workers than there are managers and salaried employees in a manufacturing company.

In the capitalist system, the market forces, income gap, and existence of structural unemployment provide this incentive without the need for an altruistic motive to put in the extra effort and get the education/specialization.

In capitalism, something like this would happen, and the conservatives would say that the unemployed can always get an education and a new job in a higher demand field, but they always leave out the significant point of what are the unemployed people going to do in the meantime? I believe my system would solve this issue.

The government should provide assistance to structurally unemployed workers to get the education that they desire for a new job and should provide some unemployment assistance to ease the financial situation during the retraining period.

Ah, but there's no money, remember?

Inflation would occur, but in a different way. Due to the complexity of barter and the inefficency of the distribution system, there would be shortages of goods in certain areas; those that possess those goods would charge purchasers more for them to ensure that the supply would meet the demand, and that would force the purchaser to eventually ask for more compensation to maintain their real income, forcing their employer to raise prices on their goods, forcing the purchasers of their goods to ask for raises, and so on.

It's called the "Wage/Price spiral" and is virtually impossible to counteract through market forces, particularly in the absence of monetary policy; in a barter system it would be even worse because the goods used for exchange would themselves produce inflation due to the higher demand for them just to exchange them for other goods. This problem is one of the reasons why barter was replaced by currency, since a standard of value does not have the same problem since its supply can be controlled and can be chained to a particular good.

And if all goods are free, there would be no inflation, just perpetual shortages and massive economic instability.

Furthermore, since there is no profit motive, no management system and greatly reduced labor market competition the unskilled labor might decide to raise prices and wages rather than increase productivity, resulting in increasingly severe inflation.

You would never allow the producers of a given commodity to exclusively set prices, at least not as long as the current basic economic framework is maintained.

Not only would it cause obvious economic problems, but it would violate anarchist (or whatever you want to call it) principle; you would be putting decisions affecting an entire community in the hands of a portion of that community, which then has become an elite.

The government should provide assistance to structurally unemployed workers to get the education that they desire for a new job and should provide some unemployment assistance to ease the financial situation during the retraining period.

Right, and we can expect that in a democratic economy this would be a regular consequence of productivity increases. The idea would be to increase productivity with minimal harm to labor, unlike the current system where increases in productivity necessitate more training and reduce demand for labor, resulting in considerable suffering.

Unskilled labor is reduced by productivity upgrades, and since all types of labor have the same influence on the decisionmaking process it is likely that the unskilled laborers would resist implementing upgrades because they would become structurally unemployed. In manufacturing, where unskilled labor is used more often than in many service industries, there would be the strongest resistance to productivity upgrades, with the result being that it would not be implemented.

In the context I just reviewed, there are two possibilities:

1. The workers approve the productivity increase, knowing that their economic livelihoods are protected, which is I think the most likely result;
2. The workers do not approve the productivity increase, a choice that, since it is their own and the consequences of it affect only them, no one else should be capable of annulling.

Right, and we can expect that in a democratic economy this would be a regular consequence of productivity increases. The idea would be to increase productivity with minimal harm to labor, unlike the current system where increases in productivity necessitate more training and reduce demand for labor, resulting in considerable suffering.

You usually can't do that; productivity upgrades will eventually render whatever they are designed to replace structurally obsolete. It's best to allow companies to implement any and all productivity upgrades they possibly can and provide insurance and retraining for the displaced workers. That way, the productive opportunities are maximized, reducing inflation and raising living standards while the displaced workers can find new jobs in other, better fields than their previous ones due to the free retraining.



In the context I just reviewed, there are two possibilities:

1. The workers approve the productivity increase, knowing that their economic livelihoods are protected, which is I think the most likely result;
2. The workers do not approve the productivity increase, a choice that, since it is their own and the consequences of it affect only them, no one else should be capable of annulling.

The problem is, productivity affects everyone in the economy. If they don't increase productivity, companies have to raise prices to cover the increased labor and production costs, causing inflation and reducing the real wages of their employees. Those employees in turn ask for more money to restore their prior wage, causing the company to raise prices further to cover the cost. This branches out across the economy in to the "wage-price" spiral.

Productivity needs to increase at its maximized rate and almost always maintains or increases total unemployment; in the US, unemployment reached its lowest levels at the times of highest productivity growth. Right now, unemployment is lower than it was during most of the 1950-2006 period and productivity is at its highest rate of growth.

No, because there would be a gap in time between when somebody stops using whatever it was they were using and the time that they would trade it, and so at that point that they stop using it they no longer have the claim to it.

And as soon as their use claim expires then another's use claim begins on it.

Take an example of a car. An individual with a car has a family and decides he needs more space. Another person who has a minivan wants a car. These two drive to the same location, swap cars, and drive home. There was a moment of nonuse, but I doubt your system requires perpetual use.

Because value is subjective, The subjective valuer doesn't have to take into account the item's scarcity, or it's demand, or how difficult it was to make if they don't want to. Since it isn't necessary to do so, everyone within a society could easily decide that everything that enters the society is worth the same. They don't have to have a good reason for setting a value on something if they don't want to, that's the beauty of subjectivity.

That doesn't make sense. Value judgements are natural and cannot just be turned off.

Individual valuation is made determining marginal utility, and regardless of what socialism does away with, there will be marginal utility. Only the aggregate market values products using demand and scarcity.

Yes, but for how long? Any system with different valuations on something is going to cause some people to make more money than others. Less scrupulous people will use their money to start pooling wealth and creating laws allowing for the misuse of property rights.

Different valuations occur in EVERY SYSTEM. Government cannot do away with subjective evaluations of utility. End of discussion.

What government can do is completely ignore those valuations, and control what you own and use. That is the only way that wealth can be equalized.

So you must either accept the complete elimination of economic freedom, or accept that there will be variations in wealth, and make safeguards to protect government.

Ah, sorry, I misunderstood. I don't see any other way of keeping it free.

There is no way. Government is NOT free, no matter how you cook it.

Exchanges between individuals almost always ends up with one individual getting the better end of the deal. Even if they both feel as though they made out on the deal, one of them will almost always make more from it than the other will. As businesses get bigger and bigger, they will be able to buy in bulk and undercut their competition, further increasing the likelihood of this happening.

Then economies of scale will lower prices. And remember, if you find a way to eliminate exploition, the workers will receive their fair wages.

That means that big business will lead to a better standard of living for the workers.

You usually can't do that; productivity upgrades will eventually render whatever they are designed to replace structurally obsolete. It's best to allow companies to implement any and all productivity upgrades they possibly can and provide insurance and retraining for the displaced workers. That way, the productive opportunities are maximized, reducing inflation and raising living standards while the displaced workers can find new jobs in other, better fields than their previous ones due to the free retraining.

I was suggesting exactly that, actually, only companies wouldn't be doing it, rather worker's councils.

The problem is, productivity affects everyone in the economy. If they don't increase productivity, companies have to raise prices to cover the increased labor and production costs, causing inflation and reducing the real wages of their employees. Those employees in turn ask for more money to restore their prior wage, causing the company to raise prices further to cover the cost. This branches out across the economy in to the "wage-price" spiral.

This would never happen in a democratic economy, because prices would not be exclusively determined by the seller. If decisions on productivity were to be made individually in each factory, which may or may not be the case depending on the model adopted, then it would make perfect sense for those workers not increasing productivity to experience a decline in their relative share in the proceeds of labor.

Anyway, even if the consequences of stagnation in productivity growth are severe, the choice should still ultimately lie with the workers, according to basic democratic principle. Furthermore, such consequences would likely lead to a revision of the earlier decision.

I was suggesting exactly that, actually, only companies wouldn't be doing it, rather worker's councils.

That means it is even less likely that the productivity upgrades would be implemented. GM and Ford were disasterously unproductive until the UAW started to lose its influence during the 1970's in the face of competition, and that was in a top-down controlled company. Similar parallels could be drawn with the Communist bloc during the later years of the Cold War, where workers sat around and did nothing.

The only way a system like that could even possibly work is if employment is at-will, and that destroys its effectiveness.


This would never happen in a democratic economy, because prices would not be exclusively determined by the seller. If decisions on productivity were to be made individually in each factory, which may or may not be the case depending on the model adopted, then it would make perfect sense for those workers not increasing productivity to experience a decline in their relative share in the proceeds of labor.

Theoretically, yes. However, because the factories independently determine their production and there is no market to determine the equilibrium price, it becomes impossible to accurately respond to market demand in a cohesive fashion and an ersatz pricing system would evolve outside of the established price in response to the uneven distribution system.

Determination of prices by the buyer occurs in a market system to a degree because almost all products are substitutable, and the buyer has the ability to choose between multiple products. In this system, the demand side has total control, creating an extreme version of a price control that leads to severe shortages and a black market economy. The supply of goods cannot possibly be sufficent without the seller having control of price determination based upon demand.

Inflation would no longer be a measurable occurence, but rather a shadow form that would be impossible to control without the institution of a market system. Since the

Anyway, even if the consequences of stagnation in productivity growth are severe, the choice should still ultimately lie with the workers, according to basic democratic principle. Furthermore, such consequences would likely lead to a revision of the earlier decision.

Companies are not democratic institutions by their nature; the people put in management positions are the ones who make the decisions and the process moves top-down because that is the most efficent means of coordinating the goals of the company.

Why does democracy require that a person is free to make independent economic decisions?

Thats the exact question Don McKinnon of the Commonwealth asked; look at Singapore, for example, its an economic powerhouse, but hardly a place I would called freemarket let alone democratic.

What about a direct democracy, where any economic decisions involve the input of everyone in the community, including the individual in question?

You do that already with you wallets; supply and demand; when you demand something, the market will supply - so you are impliciting voting by your purchasing patterns.

Hence the reason I disagree with protectionism; it assumes that people must be forced into purchasing over priced, inferior locally produced goods rather than allowing the individuals make the decision on what they wish to purchase, and the local producers selling their higher priced good, but with a justification of that higher price - aka, 'superior good'.

That means it is even less likely that the productivity upgrades would be implemented. GM and Ford were disasterously unproductive until the UAW started to lose its influence during the 1970's in the face of competition, and that was in a top-down controlled company. Similar parallels could be drawn with the Communist bloc during the later years of the Cold War, where workers sat around and did nothing.

The only way a system like that could even possibly work is if employment is at-will, and that destroys its effectiveness.

Unionism isn't equivalent to worker's control.

In a capitalist economy the union has an obvious motive to prevent productivity increases. Increases in productivity reduce demand for labor, allowing the owners to lay off workers or reduce wages. If anyone benefits, it tends to be the owners, who can then (as they are right now) make large profits. In the long term, increases in productivity probably do help the worker, but that's a general increase in productivity, not a specific instance, and because unions are by their nature shop-focused, they don't coordinate with one another well enough to allow for that sort of thing.

In a socialist economy under direct worker control, increases in productivity would directly and immediately benefit the worker, because the distinction between labor and ownership would be erased.

As for the rest of your post, my guess is that market mechanisms and a degree of competition would be implemented on a trial-and-error basis. What I meant in my earlier post was merely that in this particular case, a factory refusing to increase productivity would not be allowed to sell the commodity to consumers at any given price, and because of monopolistic control get its way.

Under a purely market system, a general increase in productivity ignored by a single factory would result in that factory going out of business. If it proves necessary to centralize this decision somewhat, as markets ultimately do, then that would be done.

The people who follow his theories, who put them into practice, like the effects they produce--they may not be the effects that Friedman predicted, or even hoped for (I'm no mindreader--I have no idea if Friedman was being honest or not), but for the people who benefit most from Friedman-esque policies, they're beautiful. They result in the stratification of the classes and the widening divide between rich and poor.

How so? if these people choose not to get educated, choose to start pumping out children at a young age, thus fucking up their career prospects and over spend in terms of maintaining a lifestyle beyond their means, why should I feel sorry for such people?

What happens in your life is a direct consequence to choices you make in your life - hardly rocket science, and yet we have people like YOU who think that we should feel sorry for these people. Sorry, I don't. They chose to be the 'popular jock' than get an education. They chose to get laid and have children whilst unqualified. They chose to go to university to obtain a vanilla degree that has no job prospects at the end of it.

Where you are now, and where you will end up in the future, are a direct consequence of choices YOU make.

Unionism isn't equivalent to worker's control.

True, but it does show that giving the workers rather than the employers and managers control over aspects of the productive process produces negative productivity and labor cost issues.

In a capitalist economy the union has an obvious motive to prevent productivity increases. Increases in productivity reduce demand for labor, allowing the owners to lay off workers or reduce wages. If anyone benefits, it tends to be the owners, who can then (as they are right now) make large profits. In the long term, increases in productivity probably do help the worker, but that's a general increase in productivity, not a specific instance, and because unions are by their nature shop-focused, they don't coordinate with one another well enough to allow for that sort of thing.

Yes, but what's to say that people wouldn't do the same thing in a democratically controlled system? In fact, it's likely going to be a bigger problem because the unions can still act without the consent of the members the represent on major decisions. Democratic processes would also slow decisionmaking to the point of stagnation, leaving industry hopelessly behind the market demand.

In a socialist economy under direct worker control, increases in productivity would directly and immediately benefit the worker, because the distinction between labor and ownership would be erased.

They would put unskilled workers out of jobs because they wouldn't be needed anymore, and the economy would lack the growth rate necessary to provide for these displaced workers. Therefore, the state or the factory in question would have to provide for them negating the possible gains in productivity.

As for the rest of your post, my guess is that market mechanisms and a degree of competition would be implemented on a trial-and-error basis. What I meant in my earlier post was merely that in this particular case, a factory refusing to increase productivity would not be allowed to sell the commodity to consumers at any given price, and because of monopolistic control get its way.

Factories increase productivity so they can charge less than their competitors and then gain market share, increasing their profits which they can then reinvest to increase the productive capacity of their company. It makes little sense to increase productivity and then charge higher prices, because the increase in supply would drive down the price of the good in question and consumers would either decrease their demand or substitute another, resulting in considerable lost profit.

Under a purely market system, a general increase in productivity ignored by a single factory would result in that factory going out of business. If it proves necessary to centralize this decision somewhat, as markets ultimately do, then that would be done.

It's simplest to just let the market function and have the government provide the basic framework of protections and regulations, and to have those decisions made by elected representatives who are truly accountable to the people. That maximizes the efficencies and minimizes the market failiures while still allowing companies the freedom to make productive decisions in a competitive marketplace.

How so? if these people choose not to get educated, choose to start pumping out children at a young age, thus fucking up their career prospects and over spend in terms of maintaining a lifestyle beyond their means, why should I feel sorry for such people?

What happens in your life is a direct consequence to choices you make in your life - hardly rocket science, and yet we have people like YOU who think that we should feel sorry for these people. Sorry, I don't. They chose to be the 'popular jock' than get an education. They chose to get laid and have children whilst unqualified. They chose to go to university to obtain a vanilla degree that has no job prospects at the end of it.

Where you are now, and where you will end up in the future, are a direct consequence of choices YOU make.Indeed, and if you choose to create a society where the popular jock cannot support his family, then by your reasoning, it becomes your fault when he mugs you in the back alley one day in order to get enough cash to put food on the table for his three kids.

Indeed, and if you choose to create a society where the popular jock cannot support his family, then by your reasoning, it becomes your fault when he mugs you in the back alley one day in order to get enough cash to put food on the table for his three kids.
So to keep him from taking our money by force, we make the government . . . take our money . . . by force . . .
Something in that logic seems a bit odd, does it not?
Ignoring, of course, the fact that it was his choice to be an idiot, his choice to create a life of poverty for himself, and his choice to do the mugging.

Exactly.

Taxation allows us to apply this force in a method controlled and regulated by the electorate, designed to apply relatively equally to all members of society, thus ensuring no individual member has to take on a disproportionate burden when compared to others like him/her.

Crime, on the other hand, applies disproportionate burdens on specific individuals almost at random, and if these burdens are not met, the force applied is neither controlled nor regulated to ensure that it is the minimum required.

Whether he's an idiot or not has no bearing when it's you that has to face that choice between cracked skull or helping to feed his idiot family, and often it seems, crime will wind up making you take both anyway.

True, but it does show that giving the workers rather than the employers and managers control over aspects of the productive process produces negative productivity and labor cost issues.

Yes, but what's to say that people wouldn't do the same thing in a democratically controlled system?

It isn't simply a question of degree. It's also a question of form. The workers in a capitalist economy don't need to care about the fate of the company, as long as their wages are high and their jobs secure. Thus, if they can reduce productivity increases, a reduction which benefits them, they have every motive to do so. When they are the ones who directly reap the benefits of productivity increases, however, there is no reason to oppose productivity increases unless their job security is threatened, an issue which could be addressed through re-training programs.

In fact, it's likely going to be a bigger problem because the unions can still act without the consent of the members the represent on major decisions. Democratic processes would also slow decisionmaking to the point of stagnation, leaving industry hopelessly behind the market demand.

Depends on how decentralized the democratic processes are. Not all decisions would be put forward for direct majority vote, just the really significant ones. Most likely there would be an elected committee responsible, directly accountable to and recallable by the workers.

They would put unskilled workers out of jobs because they wouldn't be needed anymore, and the economy would lack the growth rate necessary to provide for these displaced workers.

Why do you think so?

It's simplest to just let the market function and have the government provide the basic framework of protections and regulations, and to have those decisions made by elected representatives who are truly accountable to the people. That maximizes the efficencies and minimizes the market failiures while still allowing companies the freedom to make productive decisions in a competitive marketplace.

Even if we could magically solve all the economic deprivations caused by the capitalist mode of production, the illegitimate hierarchies, with the typical results, it imposes upon the vast majority would still make it unacceptable.

On the contrary, out of the sense of rights I come to the precise opposite conclusion that you do. The right to property is a consequence, and coordinates closely with, the right to life. Simply put, it is irrational to assume that because I will inherently struggle to preserve my life I will not also struggle to preserve my access to food to eat. Instead, if I have no food, and someone else has enough for two and won't give me any on terms I can provide, it is rational to assume that I will fight, even unto death, to get sufficient food to survive.

Sure. At that point you become a looter, a thief, a criminal: you have violated someone else's rights. Of course that isn't rational; it's an inherent contradiction in terms. Violating another peron's rights devalues your own. By the very definition of a right, it applies equally to everyone - there's no rational justification for valuing your own over someone else's, which is an inherent requirement of violating another individual's rights. Rights cannot infringe on one another, and neither can individuals rationally exercising them; it's innate to the nature of a right. The only moral system is one in which all are free to exercise their rights to the extent to which they are violating no one else's. Anything else is irrational and unjust.

Nevertheless, this is precisely the setup you propose as being man's "natural right". Capitalism often does deprive us of the means to maintain our own subsistence, and it can and sometimes does require us to sell our labor at below the cost of survival. That being the case, it is perfectly rational for me to cease being capitalistic and take up the pitchfork and torch strategy, and it is equally rational for me to destroy the government that allows my starvation, because life in the state of nature is preferable to life under such a government.

LOL. Capitalism is a state of nature, or as close to it as the existence of a social contract will permit. If you can't survive in a capitalist system, you sure as hell can't do it in a state of nature. If you lack the ability, skill, willingness to work, etc. to survive and prosper in the free market, there's no way you can do it in an environment with even less of a social crutch to offset your lack of strength.

LOL. Capitalism is a state of nature, or as close to it as the existence of a social contract will permit.

Not in the slightest.

Let us remember that capitalism is the government protection of private property rights. State of Nature -> No government -> No protection of property rights -> No Capitalism.

It isn't simply a question of degree. It's also a question of form. The workers in a capitalist economy don't need to care about the fate of the company, as long as their wages are high and their jobs secure. Thus, if they can reduce productivity increases, a reduction which benefits them, they have every motive to do so. When they are the ones who directly reap the benefits of productivity increases, however, there is no reason to oppose productivity increases unless their job security is threatened, an issue which could be addressed through re-training programs.

They don't need to care, but if they don't it is likely they will be fired. The top-down management system is able to so effectively enforce productivity upgrades because of the at-will nature of employment. By giving managers the freedom to dismiss troublesome employees, the workers are encouraged to pursue beneficial and productive policies to keep their jobs. It's tremendously effective.

Retraining addresses structural employment in the labor market, and is a good idea in any system in order to keep the labor force as balanced as possible.

Depends on how decentralized the democratic processes are. Not all decisions would be put forward for direct majority vote, just the really significant ones. Most likely there would be an elected committee responsible, directly accountable to and recallable by the workers.

Significant decisions are probably the same ones that have the biggest effect on the company's functioning, so it doesn't matter whether the decisionmaking process is partially democratic since the decisions most vulnerable to economic losses are the ones being decided on democratically.

A direct democracy could not function on a scale larger than a few similar factories in a local region, and would be unable to make comprehensive decisions affecting the entire system due to the diversified nature of large companies.

Why do you think so?

There is a direct casual relationship between productivity and economic growth; when GDP expands more slowly than productivity, net employment falls, and when GDP equals or exceeds productivity net employment tends to rise. In this system, where economic growth would be far slower than in a free market economy due to the nature of the system, any but the most incremental upgrades would reduce employment. And those upgrades would not be sufficent to keep up with demand, causing inflation and shortages along with reduced employment due to higher costs.

Those higher costs would in turn prevent the expansion that would alleiviate unemployment.

Even if we could magically solve all the economic deprivations caused by the capitalist mode of production, the illegitimate hierarchies, with the typical results, it imposes upon the vast majority would still make it unacceptable.

The capitalist system is the most efficent in existence for the distribution of economic resources and the satisfaction of wants. It is legitimate in that its methods work, and that the system protects individual ownership of property which is the most efficent and beneficial system of satisfying economic wants. Capitalism is simply the most efficent and therefore best system.

People invent because they want to have more and better things, and to increase their ability to meet their economic wants.
Since the purpose of an economic system is to maximize the efficency of the distribution of resources to meet those wants, by suppressing invention and innovation due to a lack of that incentive would lead to technological and productive stagnation to the point where the system would no longer be able to meet economic wants and would cause shortages/inflation with the result being the emergence of a new class system far more segregated than what had happened in the past due to the democratic control over the production process which would result in the goods going to the people who control them first and then to everyone else according to societal rank.But what I'm suggesting is democratic control over the production process and the elimination of standard societal rank.

Even so, it would be incredibly easy to start a diploma mill and give out certifications using plagarized work, and there would be little these institutions could do about it because there would not be a legal code to shut them down since the crime of IP theft does not exist.In a capitalist system, yes. In a socialist or communist system, the diploma mills could be shut down.

The research they do tends to have firstly societal rather than economic value, for example new antibiotics or means of solving mathematical problems. Other things, like the engineering sciences, would not have the same advancements because there is no incentive to invent new manufacturing processes or new chemicals for goods production other than the economic benefits, and the bulk of people in these fields work in private industry.It seems to me as though improvements the engineering sciences would lead to new possibilities, and people are intrigued by the idea of new things. I don't see why societies would be any different.

Some goods are too valuable or too complicated to be paid for through barter, and it is impossible to have that system on a large scale. Furthermore, a standardized barter system would require the production of additional goods for the purpose of barter, which would be far more economically inefficent and resource consuming than paper money. It would be impossible to trade as well, and there would be no system of banking which would even further restrict economic growth leading to shortages, inflation, and unemployment.The barter system wouldn't have to be standardized. Not that I see a need for trade between individuals, but if there was to be trade between individuals, each individual would place his own value on the product.

I don't see the need for a system of banking, governments should give out interest-free loans, and this would be true in a capitalist system, too.

Free distribution would inevitably lead to shortages because demand approaches infinity as the price of a good approaches zero, and supply approaches zero as well. In this system, it would be even worse because supply is inflexible and would require a massive, concerted effort to meet demand rather than market forces.Free distribution combined with property rights being based upon use would cause people to merely demand what they can use, and people can't use an infinite amount of anything.

Again, you have the problem of valuation as well as creating a standard system of exchange between nations. Furthermore, the system would be unworkable because with barter is almost impossible to assign quality pricing to goods in a standard method, with the result being that the system would become more inefficent because of the subjective nature of the valuation process.I still don't see the need for a standard system of exchange. Each nation would set its own valuations depending on what it wants at that point in time. There wouldn't be constant international trade, except for certain natural resources, most nations are perfectly capable of being self-sufficient, and so international trade would only be necessary to obtain certain natural resources.

They won't hire the first applicant necessarily, but they also know that there are multiple employers who are competing for that labor and are making offers. If an applicant recieves multiple offers for their employment, they have considerable power over the employers in terms of securing salary and benefits. This is only in those rare cases where the supply of a particular type of labor is lower than the demand, such as the internet bubble that burst in the late '90s.

The profitability of hiring is why unemployment rises during recessions and falls during expansions, but if you remove profit from the business cycle it reduces the overall demand for labor and creates permanent, cyclical unemployment. Capitalism requires permanent cyclical unemployment, I don't see why you would be in favor of capitalism and yet arguing against permanent cyclical employment.

Furthermore, the equalization of wealth would further dampen the ability of companies to hire because there would be no large-scale purchases from wealthier customers.But there would be more small-scale purchases from people who didn't have the resources to purchase goods from a company before the equalization of wealth.

The other source of reduced employment would be the reduction in capital expenditures by businesses. The level of investment is directly related to the rate of return on the investment; if there is no rate of return they will only make investments enough to meet their demands for replacement of equipment and perhaps only marginal increases in production. This inevitably leads to shortages and inflation and a breakdown in the production process as well as higher unemployment due to the elimination of the capital-goods producing sector of the economy.If there are interest-free loans given out, then this would be offset by more people entering the business cycle due to its being easier to start a business.

I don't support democratic management of business, but if it were to happen the employees would have to have equal votes to prevent the emergence of a new class system and inequality.Why would you support democracy in government but not in business?

Yes, but if income is equalized there is little incentive to do so; they can get the same pay and benefits working on the production line as they could getting a degree in economics and running the company, with less cost and effort along the way. There would have to be an incentive to pursue higher education, since the democratic system of management would inevitably lead to suppression of these productivity upgrades because there are usually many more production workers than there are managers and salaried employees in a manufacturing company.The incentive to pursue higher education would be that the particular path of education interests the person who is being educated.

In the capitalist system, the market forces, income gap, and existence of structural unemployment provide this incentive without the need for an altruistic motive to put in the extra effort and get the education/specialization.Altruism would help, but isn't necessary as long as people are able and willing to follow their own interests.

The government should provide assistance to structurally unemployed workers to get the education that they desire for a new job and should provide some unemployment assistance to ease the financial situation during the retraining period.The problem with this is that in capitalist system, when someone is put out of work and looking for an education to get a new job, they can either do one of two things - they can either pursue an education that's in demand at the time of the start of their education, or they can guess what field might be in demand in 2-4 years and pursue that. The former will lead to a surplus of workers in a particular field which would start the cycle over again, the latter would probably lead to the education not helping as it's difficult to guess which fields will be in demand in the future.

Inflation would occur, but in a different way. Due to the complexity of barter and the inefficency of the distribution system, there would be shortages of goods in certain areas; those that possess those goods would charge purchasers more for them to ensure that the supply would meet the demand, and that would force the purchaser to eventually ask for more compensation to maintain their real income, forcing their employer to raise prices on their goods, forcing the purchasers of their goods to ask for raises, and so on. The capitalist argument against this would be that the rising prices would cause a new competitor to enter the market producing high demand goods at a lower price, increasing competition. Or are you suggesting collusion?

It's called the "Wage/Price spiral" and is virtually impossible to counteract through market forces, particularly in the absence of monetary policy; in a barter system it would be even worse because the goods used for exchange would themselves produce inflation due to the higher demand for them just to exchange them for other goods. This problem is one of the reasons why barter was replaced by currency, since a standard of value does not have the same problem since its supply can be controlled and can be chained to a particular good.All the more reason to do away with or completely restructure market forces.

And as soon as their use claim expires then another's use claim begins on it.

Take an example of a car. An individual with a car has a family and decides he needs more space. Another person who has a minivan wants a car. These two drive to the same location, swap cars, and drive home. There was a moment of nonuse, but I doubt your system requires perpetual use.The system I propose would not require perpetual use, after all a person wouldn't have to run their car 24/7, but any gap in the use of a particular item would require that the person eventually begin to use the item again.

That doesn't make sense. Value judgements are natural and cannot just be turned off.

Individual valuation is made determining marginal utility, and regardless of what socialism does away with, there will be marginal utility. Only the aggregate market values products using demand and scarcity.That's true, but there is a difference between the way an individual values something and the way any type of market would handle such a value. For instance, if something is being sold for 70 cents, the individual would pay for it if they felt that it was worth 90 cents. Any type of standardized market would have this discrepancy, so it's possible that as far as the market (or lack thereof) is concerned for individuals to decide that it's in their best interests to have everything be valued the same as everything else in the system itself, but not in the individual's mind. It really wouldn't matter what the person likes more or not because the system itself wouldn't take this into account.

Edit: Ick, that was garbled. What I am trying to say here is that even though people will value things differently, the system they live in doesn't have to.

Different valuations occur in EVERY SYSTEM. Government cannot do away with subjective evaluations of utility. End of discussion.

What government can do is completely ignore those valuations, and control what you own and use. That is the only way that wealth can be equalized.

So you must either accept the complete elimination of economic freedom, or accept that there will be variations in wealth, and make safeguards to protect government.I don't see why there would need to be complete control over ownership and use. Limited control, certainly, but not complete control.

There is no way. Government is NOT free, no matter how you cook it.No, I suppose in the technical sense, the hermit is the most free, but most of us are unwilling to be hermits. So what I should have said is that I don't see any other way of maximizing freedom within the context of people having to give up a certain amount of freedom in order to live in a society together.

Then economies of scale will lower prices. And remember, if you find a way to eliminate exploition, the workers will receive their fair wages.

That means that big business will lead to a better standard of living for the workers.This seems to me to be leading to your argument of total employment in a capitalist system. If I am right, how would you maintain total employment? The economy would have to be neither growing nor shrinking to do so, how would you keep this from happening?

But what I'm suggesting is democratic control over the production process and the elimination of standard societal rank.

It's too inefficent to have democratic control, and societal rank will still exist albeit in a different form.

In a capitalist system, yes. In a socialist or communist system, the diploma mills could be shut down.

You can't shut it down without the laws necessary to bring a case against them for violations.

It seems to me as though improvements the engineering sciences would lead to new possibilities, and people are intrigued by the idea of new things. I don't see why societies would be any different.

Yes and no. In most cases, basic discoveries are made by universities and other institutions but it is the private sector that improves on them and makes them cost efficent for widespread use. Without that private sector, there would be a much slower, much less developed technological infrastructure than would exist with the resources of the private sector behind it.

The barter system wouldn't have to be standardized. Not that I see a need for trade between individuals, but if there was to be trade between individuals, each individual would place his own value on the product.

It's impossible to value many things using barter, and self sufficency is not realistically possible without a massive regression of technological and economic development and a smaller population. Trade is a vital part of any distribution system, and is only nonexistent in the least developed economic systems.

I don't see the need for a system of banking, governments should give out interest-free loans, and this would be true in a capitalist system, too.

Interest free loans remove the incentive to loan money on large scales as well as removing a means of controlling accrual of debt. Without charging interest, people have no way of increasing the amount they can loan out and the system will stagnate and become inefficent.

Furthermore, the lack of a commercial system of finance prevents the government from controlling the money supply in any orderly fashion; the most efficent tool government has is the manipulation of interest rates through purchases and sales of bonds as well as lending to banks.

Free distribution combined with property rights being based upon use would cause people to merely demand what they can use, and people can't use an infinite amount of anything.

Individuals can't, but society as a whole can. The only way the demands of society are limited is if the economy, population growth, weather, infrastructure and many other variables are entirely stable and in equilibrium. Otherwise, demand will continuously increase in the long run.

I still don't see the need for a standard system of exchange. Each nation would set its own valuations depending on what it wants at that point in time. There wouldn't be constant international trade, except for certain natural resources, most nations are perfectly capable of being self-sufficient, and so international trade would only be necessary to obtain certain natural resources.

Self sufficent at very low levels of technological and economic development; high tech industry and capital goods production would be severely limited by the relative valuation system as well as the inability to efficently distribute resources according to comparative advantage. Subjective valuation would cause even more problems because it would foster corruption/crime and would be subject to political and social whims rather than market forces.

This is only in those rare cases where the supply of a particular type of labor is lower than the demand, such as the internet bubble that burst in the late '90s.

No, it's the case in most industries that are growing faster than the growth rate of the labor pool; in the United States, almost all skilled employment has at least some labor shortages that are driving up employment costs and wages. The dot-com bubble was an extreme version of the normal situation in most fields of employment; the law of scarcity applies here as it does to any other production factor.

Capitalism requires permanent cyclical unemployment, I don't see why you would be in favor of capitalism and yet arguing against permanent cyclical employment.

Capitalism does not require any kind of unemployment besides the frictional; the definition of "full employment" which is the goal of economic policy is the removal of structural and cyclical unemployment and represents full and most efficent allocation of labor.

Cyclical unemployment is a product of the business cycle; ideally it is not a normal state of affairs because it represents inefficent allocation of labor resources.

But there would be more small-scale purchases from people who didn't have the resources to purchase goods from a company before the equalization of wealth.

They would not be able to make as many purchases of high value goods, and they wouldn't be able to buy as much of them at any given time to sustain companies during lulls in smaller-scale spending. Corporations would be forced to limit their investment spending, with the result being that the economy would become extremely cyclical and unstable.

If there are interest-free loans given out, then this would be offset by more people entering the business cycle due to its being easier to start a business.

The increased risks to lenders and the inability of the government to manipulate the money supply would restrict the supply of credit to such a small amount that it would be much harder to start a business on lended capital.

Why would you support democracy in government but not in business?

Publically held corporations are representative democracies; the CEO is appointed usually by the Board of Directors who in turn are elected by the shareholders. Those elected and appointed officials then create the structure of the company and direct policy downward; it's much like the government, where departamental heads are appointed by an elected legislature or executive and then structure the company downward but are still accountable indirectly.

Privately-held corporations are private property, in which the owner makes the decisions and has control over the property in the same respects as any property owner would; a homeowner can hire people to perform services for them just like a company owner can hire people to perform services for them.

The incentive to pursue higher education would be that the particular path of education interests the person who is being educated. Altruism would help, but isn't necessary as long as people are able and willing to follow their own interests.

That would leave some necessary occupations unable to find skilled workers and would result in those services unable to be performed with serious economic consequences.



The problem with this is that in capitalist system, when someone is put out of work and looking for an education to get a new job, they can either do one of two things - they can either pursue an education that's in demand at the time of the start of their education, or they can guess what field might be in demand in 2-4 years and pursue that. The former will lead to a surplus of workers in a particular field which would start the cycle over again, the latter would probably lead to the education not helping as it's difficult to guess which fields will be in demand in the future.

That doesn't occur very often in skilled labor unless the occupation itself becomes outdated; the demand for employment in most fields remains strong because those skills are always needed and so the problems primarily occur in fields that are specialized to a particular, technologically or socially sensitive field that is vulnerable to obsolesence.


The capitalist argument against this would be that the rising prices would cause a new competitor to enter the market producing high demand goods at a lower price, increasing competition. Or are you suggesting collusion?

In the free market with a standard system of currency it is much easier for a new competitor to enter a field that it is in a system without these forces. Due to the scale of complications facing entrepreneurs it is likely that there would be an inability to meet demands all the time efficently, which would lead to collusion amongst producers that would be impossible in a transparent capitalist system.

All the more reason to do away with or completely restructure market forces.

Market forces work; outside of uncontrollable, artificial shocks to aggregate supply, the market is always able to meet demand with supply and is able to determine the value of a good. Economies with little or no market forces are unable to meet demand under normal conditions and would lead to permanent shortage economies with all of their accompanying problems.

Inflation will always exist regardless of market forces as long as resources are scarce and there is a demand for them; it is impossible to get rid of prices and labor costs without the complete elimination of a system of valuation, but as long as resources are scarce there will be a need for valuation and therefore inflation.

Not in the slightest.

Let us remember that capitalism is the government protection of private property rights. State of Nature -> No government -> No protection of property rights -> No Capitalism.

No, it isn't. Capitalism exists even without governmental protection; it's the absence of social intervention in economy and economic activities. Capitalism==free market. Private property rights are just that - rights. Like all rights, the government exists to protect them.

Also, a state of nature as defined by Locke is one where, by default and lacking violent criminal action, rights are interrecognized between people even without a government. So, basically the same thing. You do your thing and no one meddles so long as you don't infringe on anyone else, and you apply the same practice to others.

They don't need to care, but if they don't it is likely they will be fired. The top-down management system is able to so effectively enforce productivity upgrades because of the at-will nature of employment. By giving managers the freedom to dismiss troublesome employees, the workers are encouraged to pursue beneficial and productive policies to keep their jobs. It's tremendously effective.

And also applies to other things that increase profit, like reducing wages and benefits. But anyway, we were discussing labor unions; I was assuming their capability to actually influence decisionmaking, because in the examples you presented they did.

Significant decisions are probably the same ones that have the biggest effect on the company's functioning, so it doesn't matter whether the decisionmaking process is partially democratic since the decisions most vulnerable to economic losses are the ones being decided on democratically.

That is to say, putting significant decisions under democratic control would mean that there would actually be a democracy. Right, that's the idea.

A direct democracy could not function on a scale larger than a few similar factories in a local region, and would be unable to make comprehensive decisions affecting the entire system due to the diversified nature of large companies.

Again, you would have representatives elected by and highly accountable to the workers to eliminate some of the inefficiencies involved. For sectors of the economy where centralized coordination is necessary, similar structures could be made.

There is a direct casual relationship between productivity and economic growth; when GDP expands more slowly than productivity, net employment falls, and when GDP equals or exceeds productivity net employment tends to rise. In this system, where economic growth would be far slower than in a free market economy due to the nature of the system, any but the most incremental upgrades would reduce employment. And those upgrades would not be sufficent to keep up with demand, causing inflation and shortages along with reduced employment due to higher costs.

Those higher costs would in turn prevent the expansion that would alleiviate unemployment.

For that to be true we would have to accept your premise that "economic growth would be far slower than in a free market economy," which, since good empirical data is lacking, is highly questionable.

The capitalist system is the most efficent in existence for the distribution of economic resources and the satisfaction of wants.

Commodity wants, for those who can afford them.

It is legitimate in that its methods work,

At satisfying certain wants for certain people. I do not believe practicality trumps basic democratic principle, either; people have the right to make their own decisions, because usually people are the best judge of what they themselves want.

and that the system protects individual ownership of property which is the most efficent and beneficial system of satisfying economic wants. Capitalism is simply the most efficent and therefore best system.

What if my primary aim in life is not the satisfaction of "economic wants"? What if the community as a whole decides that it would rather satisfy certain non-economic wants than dedicate itself to the satisfaction of economic wants, to the exclusion of all else? What if it chose to sacrifice cell phones and cars for an effective health care system and decentralized democratic control of the economy?

I suppose he can't be blamed, capitalism is a fundamentally inconsistent dogma.

Loathe as I am to defend anything resembling right-wing politics, I feel I have to pipe up here.

Capitalism is not fundamentally inconsistent. People often argue that a position is inconsistent or contradictory just because it calls for a balance of extremes. e.g. It is not contratictory to believe that abstinence has a place in a sex-ed program in schools just because it includes elements of the abstinence only programs, and elements of the non-existent free-love education programs that tell you to screw whoever you want but wear a rubber.

I'm guessing, however that you're pointing out that far-right economics are contradictory because when there is no limit to the power of money, money will limit the power of people, i.e. freedom of money kills freedom of people.

Capitalism however, isn't the free-market system that right-wing economists espouse these days. Adam Smith's laissez faire system was one in which businessmen were made to no longer be the direct agents of the crown. That was the freedom to which they were entitled. Whenever the merchants became so powerful that they had a negative impact on society, such as limiting competition, the government's job was to step in and break them up, like Teddy Roosevelt did to Standard Oil.

That's a completly consistent system. "Rich people like to make money, and they're good at it. If they start to abuse their power, the government has to reduce it on them, but not take it away completly, because they still have their uses in making money."

Milton Friedman is an idiot.

No, it isn't. Capitalism exists even without governmental protection; it's the absence of social intervention in economy and economic activities. Capitalism==free market. Private property rights are just that - rights. Like all rights, the government exists to protect them.

That's not what governments exist for. Governments exist to organize society because no one can be totally self-sufficient. It's nice when a government respects your rights, but it exists only to make sure that everything that needs to get done, gets done by someone.

The vast majority of governments in the history of the world have had no respect for people's rights. Where people have had the most rights are places where there is no formal government. Like the stateless societies of Africa before the arrival of Islam. It is only in the post-modern age that inherent rights are an idea that is recognized around the world. The best you could hope for before now was for a government that recognized that it had responsibilities as well as the people. But that ususally meant "there's a rebellion that threatens the people's peace? I suppose I'd better kill everyone."

That's not what governments exist for. Governments exist to organize society because no one can be totally self-sufficient. It's nice when a government respects your rights, but it exists only to make sure that everything that needs to get done, gets done by someone.

Secondary purposes. The first duty of an ideal government is to safeguard the rights of citizens in exchange for their voluntary partial surrender of certain rights by building and managing a consensual social structure.

Yes, things like transportation infrastructure and other important, large-scale public services are useful side functions of said consensual social structure, should the stakeholders - the citizens - agree and desire it, but that's not the primary purpose.

The vast majority of governments in the history of the world have had no respect for people's rights.Where people have had the most rights are places where there is no formal government. Like the stateless societies of Africa before the arrival of Islam. It is only in the post-modern age that inherent rights are an idea that is recognized around the world. The best you could hope for before now was for a government that recognized that it had responsibilities as well as the people. But that ususally meant "there's a rebellion that threatens the people's peace? I suppose I'd better kill everyone."

Those were bad governments. They were organizational structures built to maximize the power of the apex member(s) by subjugating the inferior tiers. Feudalism was a huge political pyramid scheme.

It's too inefficent to have democratic control, and societal rank will still exist albeit in a different form.Does this mean that we should eliminate democratic control in government for being too inefficient, too?

You can't shut it down without the laws necessary to bring a case against them for violations.As I said, it could be illegal to not quote someone for their research but still not have to pay them for using it.

Yes and no. In most cases, basic discoveries are made by universities and other institutions but it is the private sector that improves on them and makes them cost efficent for widespread use. Without that private sector, there would be a much slower, much less developed technological infrastructure than would exist with the resources of the private sector behind it.I don't agree. Many discoveries are made by the government. The internet and velcro are two examples. While the private sector did take these ideas and expand on them, this doesn't mean that the government couldn't have done so, the government simply chose not to.

It's impossible to value many things using barter, and self sufficency is not realistically possible without a massive regression of technological and economic development and a smaller population. Trade is a vital part of any distribution system, and is only nonexistent in the least developed economic systems.What things can't be valued using a barter system?
The only reason that technological development would regress is due to a lack of natural resources, I don't see why a country couldn't manufacture its own technology.
There are distribution systems which don't involve trade between individuals, free distribution is just one of them.

Interest free loans remove the incentive to loan money on large scales as well as removing a means of controlling accrual of debt. Without charging interest, people have no way of increasing the amount they can loan out and the system will stagnate and become inefficent. If the government gives out loans to businessmen and then taxes the business, or loans to house buyers and taxes the house, that would be a way of increasing its capacity to give out loans.

Furthermore, the lack of a commercial system of finance prevents the government from controlling the money supply in any orderly fashion; the most efficent tool government has is the manipulation of interest rates through purchases and sales of bonds as well as lending to banks.If the government needs to control the money supply it could simply stop lending money out, or lend less of it out, it would be even more direct than manipulating interest rates.

Individuals can't, but society as a whole can. The only way the demands of society are limited is if the economy, population growth, weather, infrastructure and many other variables are entirely stable and in equilibrium. Otherwise, demand will continuously increase in the long run.Yes, but I am talking about a system of free distribution only within each society itself. There may be free distribution between societies, but only when each society takes care of its own needs first. So there would likely be some kind of trade between societies.

Self sufficent at very low levels of technological and economic development; high tech industry and capital goods production would be severely limited by the relative valuation system as well as the inability to efficently distribute resources according to comparative advantage. Subjective valuation would cause even more problems because it would foster corruption/crime and would be subject to political and social whims rather than market forces.If you said that industries would be manufacturing extra goods to barter with, how could their output then be limited?
In addition, all valuations are subjective, they just use an objective method of valuing things against.

No, it's the case in most industries that are growing faster than the growth rate of the labor pool; in the United States, almost all skilled employment has at least some labor shortages that are driving up employment costs and wages. The dot-com bubble was an extreme version of the normal situation in most fields of employment; the law of scarcity applies here as it does to any other production factor.Yes, but now all of those people who worked for the dot-coms are in lower paying jobs than they were then. In addition, it isn't just manufacturing jobs that are being shipped overseas, IT jobs are also being shipped overseas, so it isn't just the jobs which don't require an education.

Capitalism does not require any kind of unemployment besides the frictional; the definition of "full employment" which is the goal of economic policy is the removal of structural and cyclical unemployment and represents full and most efficent allocation of labor.If capitalism has full employment, then the workers would be able to effectively unionize and drive up wages, for if their boss fires them all, they could easily find jobs elsewhere.

Cyclical unemployment is a product of the business cycle; ideally it is not a normal state of affairs because it represents inefficent allocation of labor resources.How could the business cycle not happen? How can the economy be neither growing nor shrinking?

They would not be able to make as many purchases of high value goods, and they wouldn't be able to buy as much of them at any given time to sustain companies during lulls in smaller-scale spending. Corporations would be forced to limit their investment spending, with the result being that the economy would become extremely cyclical and unstable.I don't see why they wouldn't be able to make as many purchases of high value goods unless those goods were too pricey even for the person making a median amount of money. If this is the case, while pricey goods would not be popular, there would be increased demand for low-to mid priced goods.

The increased risks to lenders and the inability of the government to manipulate the money supply would restrict the supply of credit to such a small amount that it would be much harder to start a business on lended capital.I don't see why the government would be able to manipulate the money supply because they would be pretty much in complete control of it.

Publically held corporations are representative democracies; the CEO is appointed usually by the Board of Directors who in turn are elected by the shareholders. Those elected and appointed officials then create the structure of the company and direct policy downward; it's much like the government, where departamental heads are appointed by an elected legislature or executive and then structure the company downward but are still accountable indirectly.But each corporation's shares aren't owned equally by the employees, and non-employees can also own shares. The latter is the equivalent of Mexicans voting in American elections.

Privately-held corporations are private property, in which the owner makes the decisions and has control over the property in the same respects as any property owner would; a homeowner can hire people to perform services for them just like a company owner can hire people to perform services for them.Yes, I know, but I fail to see why a business owner should be able to fire people on a whim, but governments are unable to deport people on a whim (and they shouldn't be able to).

That would leave some necessary occupations unable to find skilled workers and would result in those services unable to be performed with serious economic consequences.If those occupations are unable to find skilled workers then they must not be very necessary, because if they were, people would be motivated to do them.

That doesn't occur very often in skilled labor unless the occupation itself becomes outdated; the demand for employment in most fields remains strong because those skills are always needed and so the problems primarily occur in fields that are specialized to a particular, technologically or socially sensitive field that is vulnerable to obsolesence.Skilled labor is being increasingly outsourced, it doesn't have to become outdated.

In the free market with a standard system of currency it is much easier for a new competitor to enter a field that it is in a system without these forces. Due to the scale of complications facing entrepreneurs it is likely that there would be an inability to meet demands all the time efficently, which would lead to collusion amongst producers that would be impossible in a transparent capitalist system.Would the collusion in a transparent system be impossible because of the transparency? If so, I don't see why any system couldn't be transparent.

Market forces work; outside of uncontrollable, artificial shocks to aggregate supply, the market is always able to meet demand with supply and is able to determine the value of a good. Economies with little or no market forces are unable to meet demand under normal conditions and would lead to permanent shortage economies with all of their accompanying problems.I agree that those economies with little or no market forces were unable to meet demand under normal conditions, but this was due to reasons other than that they had little or no market forces. For instance, some of those economies had tyrannical governments, with the natural result that people resented their authority and did whatever they could to not work. In a system without a tyrannical government, the people might be proud of the system and want to make it work, and this would motivate them to do so.

Inflation will always exist regardless of market forces as long as resources are scarce and there is a demand for them; it is impossible to get rid of prices and labor costs without the complete elimination of a system of valuation, but as long as resources are scarce there will be a need for valuation and therefore inflation.There are ways of dealing with the scarcity of resources without requiring a market system of valuation.

Loathe as I am to defend anything resembling right-wing politics, I feel I have to pipe up here.

Capitalism is not fundamentally inconsistent. People often argue that a position is inconsistent or contradictory just because it calls for a balance of extremes. e.g. It is not contratictory to believe that abstinence has a place in a sex-ed program in schools just because it includes elements of the abstinence only programs, and elements of the non-existent free-love education programs that tell you to screw whoever you want but wear a rubber.

I'm guessing, however that you're pointing out that far-right economics are contradictory because when there is no limit to the power of money, money will limit the power of people, i.e. freedom of money kills freedom of people.

Capitalism however, isn't the free-market system that right-wing economists espouse these days. Adam Smith's laissez faire system was one in which businessmen were made to no longer be the direct agents of the crown. That was the freedom to which they were entitled. Whenever the merchants became so powerful that they had a negative impact on society, such as limiting competition, the government's job was to step in and break them up, like Teddy Roosevelt did to Standard Oil.

That's a completly consistent system. "Rich people like to make money, and they're good at it. If they start to abuse their power, the government has to reduce it on them, but not take it away completly, because they still have their uses in making money."Well, it is true that not all supporters of capitalism want a pure capitalist system, but many do. All of the pure capitalists and some of the ones who aren't pure capitalists believe that societies should not grant positive rights. The contradiction is that land ownership, a tenet that is usually fundamental to capitalism, is a positive right of society.

Granted, there are capitalists who are fine with the idea of positive rights, but those capitalists favor a mixed economy, which can be as much of a socialist system as it is a capitalist system.

The system I propose would not require perpetual use, after all a person wouldn't have to run their car 24/7, but any gap in the use of a particular item would require that the person eventually begin to use the item again.

1. How can you enforce that?

2. How can does distribution of goods take place?

What I am trying to say here is that even though people will value things differently, the system they live in doesn't have to.

But the people are the ones who control wealth valuations. The free market uses the demands of the people set by marginal utility and against the production of the people set by marginal cost. Goods are ultimately valued by their place on the margins.

Any government cannot simply say that a good is worth so much, without also controlling that goods marginal values. In order to control its marginal values they must control its use, substitutability, disposal, aggregate production, labor hour cost, resource cost. Get what I am saying? In order to control wealth, you must control what people own, how goods are produced, and how people are compensated for their production. Not only do I consider it an immoral practice, but I also consider it practically impossible.

I don't see why there would need to be complete control over ownership and use. Limited control, certainly, but not complete control.

Because of the valuation of claim and utility. See above.

No, I suppose in the technical sense, the hermit is the most free, but most of us are unwilling to be hermits. So what I should have said is that I don't see any other way of maximizing freedom within the context of people having to give up a certain amount of freedom in order to live in a society together.

Yes, that is what you said before, only with different words.

All I am saying is that communists and socialists have a nasty way of taking away liberties and then saying that it will remain free because of a democratic process. It doesn't work that way.

This seems to me to be leading to your argument of total employment in a capitalist system. If I am right, how would you maintain total employment? The economy would have to be neither growing nor shrinking to do so, how would you keep this from happening?

No, I wasn't going to make that argument. I suppose there could be a theoretical full employment if wages=production, but the stickiness of the market in reacting to inventories would inevitably lead to underproduction, ie unemployment.

Capitalism==free market.

Capitalism is the protection of private property rights, the free market is an economic model that helps describe the phenomena that occur when private property rights are protected.

As Xenophobialand pointed out, theft is legitimized in the state of nature on the grounds of survival. Under capitalism, theft is the one action that cannot be legitimized.

lacking violent criminal action, rights are interrecognized between people even without a government. So, basically the same thing. You do your thing and no one meddles so long as you don't infringe on anyone else, and you apply the same practice to others.

Nice assumption there. Not only are you assuming that violence will not occur without a state, you throw a term (criminal) out there that is completely dependant on the existence of a state.

Also, how do you define violent? Would it be violent for me to break into someone's summer home and live there over the winter months?

Secondary purposes. The first duty of an ideal government is to safeguard the rights of citizens in exchange for their voluntary partial surrender of certain rights by building and managing a consensual social structure.


That's a lovely thought, but it's bullshit. Rights exist just fine in the absence of government. Governments exist primarily to organize the people. Thousands of governments have existed the world over that get overthrown when they fail in their responsibilities, but thrive when they show absolutly no respect for people's rights. It's like saying that marriage exists to create children. Children will come with or without marriage, so it must be for something else, children are just a part of it, if even that. It's the same with governments and rights. If there's respect for them at all, it's only incedental.

Yes, things like transportation infrastructure and other important, large-scale public services are useful side functions of said consensual social structure, should the stakeholders - the citizens - agree and desire it, but that's not the primary purpose.

Yes it is. The government, like everything else in the world, exists for its own sake. If it respects the people's rights then that's just a strategy for keeping the people placid and productive. So is transportation infrastructure, law enforcement, medical care, and anything else the government does.


Those were bad governments. They were organizational structures built to maximize the power of the apex member(s) by subjugating the inferior tiers. Feudalism was a huge political pyramid scheme.

The governments of Imperial China existed for hundreds of years each and had no respect for the people's rights. They had strong respect for mutual responsibilities, and it was in that regard that they fell to the ire of the people not when the people thought they were being oppressive.

In the end, as nice as it is to think that government is some noble altruistic institution, it exists to create a society that will make it fat with taxes. As long as it does it well then everyone from top to bottom might be happy. That's why the privilege of the government of every failed society is to die last.

That's a lovely thought, but it's bullshit. Rights exist just fine in the absence of government. Governments exist primarily to organize the people. Thousands of governments have existed the world over that get overthrown when they fail in their responsibilities, but thrive when they show absolutly no respect for people's rights. It's like saying that marriage exists to create children. Children will come with or without marriage, so it must be for something else, children are just a part of it, if even that. It's the same with governments and rights. If there's respect for them at all, it's only incedental.

What do you think the point of police, military, and statutes against crime are? A crime is a violation of someone else's rights. In an anarchy, anyone with some muscle or base cunning can steal your stuff, beat you up, violently shut you up, murder you, defraud you, abduct your children, etc. etc. Those things are violations of rights, and the government exists to protect you from them. You sacrifice the right to exercise vigilante violence in retribution for violation of your rights, among other things, in exchange for a law enforcement agency that protects you from rights violation by other people.

Yes it is. The government, like everything else in the world, exists for its own sake. If it respects the people's rights then that's just a strategy for keeping the people placid and productive. So is transportation infrastructure, law enforcement, medical care, and anything else the government does.

What you're talking about is a bad government. In fact, I would almost hesitate to call it a government; that term implies the entity exists to organize and protect its constituent members. What you're talking about is a political pyramid scheme that exists to exercise tyranny over its constituents.

In the end, as nice as it is to think that government is some noble altruistic institution, it exists to create a society that will make it fat with taxes. As long as it does it well then everyone from top to bottom might be happy. That's why the privilege of the government of every failed society is to die last.

It isn't altruistic - it isn't anything. It's a neutral framework supported by the consent of the voluntarily governed. It's a social contract between the people who make it up.

Sure. At that point you become a looter, a thief, a criminal: you have violated someone else's rights. Of course that isn't rational; it's an inherent contradiction in terms. Violating another peron's rights devalues your own. By the very definition of a right, it applies equally to everyone - there's no rational justification for valuing your own over someone else's, which is an inherent requirement of violating another individual's rights. Rights cannot infringe on one another, and neither can individuals rationally exercising them; it's innate to the nature of a right. The only moral system is one in which all are free to exercise their rights to the extent to which they are violating no one else's. Anything else is irrational and unjust.

Umm, no.

You see, in the state of nature, you have the right to life, and you have the right to liberty and property requisite to sustain that life. Note how I bolded that last phrase, because it's the key part of the sentence. In short, you do not have the right to any more liberty or property than you would require to sustain your existence. You do not have the right to any more food than you can eat, you do not have the right to any more property than you can farm, you do not have the right to do anything, in effect, that could deprive me of my right to existence in a world where resources are scarce and need to be divided among a plurality of interests. If you have an apple tree in the state of nature with more apples than you can eat and I'm starving, I'm not going to politely turn away if you refuse my chance to eat apples, and it would be irrational to suppose I would. Instead, I'm going to beat the snot out of you and take what apples I need to survive, and it would be rational to assume I would.

Now, it may be that in a social contract we arrange, you do have the right to more property than you need to sustain yourself, or more land than you need to sustain yourself, or the legal right to limit my liberty in some way. But such a social contract can only exist within certain limits: if the social contract becomes so tyrannical that I am able to survive only by revolting, then it is both reasonable and unsurprising that I will.

You are either reading far too much Kant into the Social Contract, or you've not read enough Locke. Is slashing and burning to get what you need to survive moral? Of course not, because it's not a universalizable maxim. And on that basis, some people really will starve rather than violate the law. But to expect the mass of men to die so that you can maintain a system that, at least in theory could keep them alive if scarce goods were better distributed, then you are being far more irrational than I am.


LOL. Capitalism is a state of nature, or as close to it as the existence of a social contract will permit. If you can't survive in a capitalist system, you sure as hell can't do it in a state of nature. If you lack the ability, skill, willingness to work, etc. to survive and prosper in the free market, there's no way you can do it in an environment with even less of a social crutch to offset your lack of strength.

I believe in technical parlance we call this a load of hooey. Capitalism is not the state of nature. Capitalism, in fact, relies on the honoring of contracts and agreements that can only be enforced by the modern nation-state, so it's about as far from the state of nature as you can possibly be. Seriously, think about it: if this was the state of nature, why in the name of God would I enter into a contract whereby I agree to give up all the product of my labor in exchange for a sum of money worth less than the value of my labor? Moreover, why would I honor such an agreement once struck without a government to throw me in jail? Instead, in the state of nature I'm simply going to make my own goods, and if you try to hold me to your contract, I'm just going to hit you with a big stick.

Does this mean that we should eliminate democratic control in government for being too inefficient, too?

No, government and economics are not the same thing primarily because of the difference between public and private goods.

As I said, it could be illegal to not quote someone for their research but still not have to pay them for using it.

You usually don't pay someone to use their research; the money is paid to those who produce creative works when they sell them to producers, record labels, art shows, etc. Research is free to use as long as it is cited properly.
Getting rid of compensation would allow people to use art for their own benefit without paying the creator.

I don't agree. Many discoveries are made by the government. The internet and velcro are two examples. While the private sector did take these ideas and expand on them, this doesn't mean that the government couldn't have done so, the government simply chose not to.

It would have happened very slowly; ARPANET was deployed in the 1960's but it took until the 1990's for HTML to be invented. That's 30 years before a feasible technology to be developed for large-scale use. It took the private sector only a few years to do many hundreds of times the amount of progress made by the public sector.

The public sector is good for basic research, but the dissemination and perfection of technologies is best left to the private sector.

What things can't be valued using a barter system?

Aside from intellectual property?

Things that are extremely valuable or large like airplanes, industrial equipment, construction projects/equipment, infrastructure, etc. Those things are so costly and so large that any but the most miniscule orders would require a unfathomable amount of additional infrastructure to store and record the goods to be exchanged.

The only reason that technological development would regress is due to a lack of natural resources, I don't see why a country couldn't manufacture its own technology.

It would be difficult enough to value most technology due to the inefficencies of the barter system, and the restriction of the private sector would greatly slow the rate at which technology is implemented and improved. Also, technology would be regressed by the lower rate of productivity growth and the inefficencies in the distribution system.
There are distribution systems which don't involve trade between individuals, free distribution is just one of them.

If the government gives out loans to businessmen and then taxes the business, or loans to house buyers and taxes the house, that would be a way of increasing its capacity to give out loans.

No, because taxes work opposite to the effects of loans. When you tax, the money comes from savings as well as consumption spending, reducing the overall money supply and counteracting the loans. Unlike a fractional reserve system, the system would have to have the same amount of money on hand as it would loan out since there is no system of interest rates or reserve requirements to control the money supply.

If the government needs to control the money supply it could simply stop lending money out, or lend less of it out, it would be even more direct than manipulating interest rates.

You have to have a fractional reserve system for that to work; a tax supported, interest-rateless system would not be able to support fractional reserve banking and the lack of interest rates would reduce the amount banks can or would borrow from the central bank as well as make it harder to affect the money supply through open-market operations.

Yes, but I am talking about a system of free distribution only within each society itself. There may be free distribution between societies, but only when each society takes care of its own needs first. So there would likely be some kind of trade between societies.

Trade is the system of meeting needs that the local resources cannot supply as efficently as another area can; the system you propose is no other than the one that currently exists. The free distribution system would greatly accelerate the rate of resource consumption of society as a whole, making th e system unsustainable on all but the smallest levels.

If you said that industries would be manufacturing extra goods to barter with, how could their output then be limited?In addition, all valuations are subjective, they just use an objective method of valuing things against.[/QUOYE]

It's the production possibilities curve; there is only so much an economy can produce at any given time, and since the economy must differentiate between goods produced solely for barter and goods produced for other purposes the total amount of resources available for a particular good is reduced, which means the output of individual products is limited.

Valuation is the only way we have of balancing the supply and demand for products; if there were no system of valuation there could be serious misallocations of production due to the inability to judge aggregate demand.

[QUOTE]Yes, but now all of those people who worked for the dot-coms are in lower paying jobs than they were then. In addition, it isn't just manufacturing jobs that are being shipped overseas, IT jobs are also being shipped overseas, so it isn't just the jobs which don't require an education.

That's unfortunate, but many people who have useful skills can find employment. However, in IT it is very likely that your skills will become rapidly obsolete without constant new education, so that explains some of the unemployment.

Not many IT jobs relative to the amount being created are being offshored; in the past year some 80,000 have been created in IT and 20,000 in high-tech manufacturing. Although this is lower than the bubble years, the growth is far more sustainable than it was in the past; in fact, Microsoft and other companies have made and are planning major US hires in 2005 and 2006.

The manufacturing and IT being offshored is going to slow because the labor market in India and other countries is getting serious demand-pull labor cost inflation that is making the situation uncompetitive. The market is gradually returning

If capitalism has full employment, then the workers would be able to effectively unionize and drive up wages, for if their boss fires them all, they could easily find jobs elsewhere.

Full employment actually reduces rates of unionization because the ease of getting jobs mitigates the need to protect against predatory bosses; also the competition for their labor increases the rate at which people switch jobs making unionization an unnecessary encumberance that they do not need.

The highest rates of unionozation are in the lower skill, more easily replaceable jobs and those fields that workers are more likely to have one or two employers in for life.

How could the business cycle not happen? How can the economy be neither growing nor shrinking?

It does happen, but the goal is to mitigate the effects of recession and maxmimze the efficency of the economy during expansions. The goal of monetary policy is to make the economic climate and therefore the value of the currency as stable as possible.

I don't see why they wouldn't be able to make as many purchases of high value goods unless those goods were too pricey even for the person making a median amount of money. If this is the case, while pricey goods would not be popular, there would be increased demand for low-to mid priced goods.

But high-value goods tend to have higher levels of employment and larger gains in productivity and growth than mid and low value goods. A case in point is the tax on luxury goods in the 1980's; using the argument that such goods are not popular and are not consumed enough to have a serious economic effect if purchases fell, they put in the tax and employment in almost all industries remotely related to luxury goods began to rise considerably.

It takes more people, more supplies, and more suppliers to make a jet than it does a table and therefore any declines in their production have a more serious effect.

I don't see why the government would be able to manipulate the money supply because they would be pretty much in complete control of it.

Most of the money supply is created through the actions of commercial banks and the purchase/sale of bonds by the central bank and the effect that has on the interest rates. Also, adjustments in the reserve ratio of banks is a way to adjust the money supply in a major fashion.

But each corporation's shares aren't owned equally by the employees, and non-employees can also own shares. The latter is the equivalent of Mexicans voting in American elections.

Not really; buying a share is the equivalent of suffrage in the BoD elections; shares represent granting a share of ownership in the company in exchange for money (when a company sells shares, they do so to raise money) with the expectation that profits will rise enabling the shareholder to either recieve a dividend or sell it at a higher price.

So, anyone who owns a share is at least a partial owner in the company with rights detailed in the intial sale of the stock. If employees buy shares or are granted options, they may also recieve voting rights in the company

Yes, I know, but I fail to see why a business owner should be able to fire people on a whim, but governments are unable to deport people on a whim (and they shouldn't be able to).

Governments are not private property but rather public institutions and therefore the laws are different, much like law for corporations is different from laws from small businesses or individuals.

If those occupations are unable to find skilled workers then they must not be very necessary, because if they were, people would be motivated to do them.

Skilled labor is being increasingly outsourced, it doesn't have to become outdated.

Not really; the number of jobs outsourced is both smaller than the total employment and the rate of growth.

Would the collusion in a transparent system be impossible because of the transparency? If so, I don't see why any system couldn't be transparent.

Transparency makes it harder to act anticompetitively because actions are both easier to review and measure and it is easier to enter the market. In a system where it is difficult to record all transactions, maintain an efficent distribution system as well as enter the market, it is going to be hard to keep it transparent.

I agree that those economies with little or no market forces were unable to meet demand under normal conditions, but this was due to reasons other than that they had little or no market forces. For instance, some of those economies had tyrannical governments, with the natural result that people resented their authority and did whatever they could to not work. In a system without a tyrannical government, the people might be proud of the system and want to make it work, and this would motivate them to do so.

Well, actually, the nations like the USSR had a better supply situation under totalitarian government due to the innate need for stron control in a command economy. It wasn't until the system became decentralized in the 1980s that the shortages became severe; this was due to the lack of a market mechanism that could maintain local and aggregate demand/supply as well as the depression of prices due to controls (which is exactly the same effect that free distribution would have).

There are ways of dealing with the scarcity of resources without requiring a market system of valuation.

Without valuation, you can't measure supply and demand for goods accurately enough to keep the system functioning and it becomes unsustainable.

No, government and economics are not the same thing primarily because of the difference between public and private goods.
I'm going to address just this because I'm too lazy to read the rest of the post.


It can, and often is argued that the economy and government are one in the same, depending on what framework you want to use.

If you come from the realist perspective, then yes, the two are different from each other.

I tend more to the liberalist view though, that the two are inextricably intertwined. The market depends on the government to function. If the government cannot enforce contracts or provide a safe work environment, then a competative, developed market will not arise. Look at Africa vs The US for example.

Africa is a civil war hotspot, has very little governmental control over wide regions, and does not have a seriously competative market in the world. On the other hand, the US has a stable government with the ability to foster a market world wide. As a result, one of the strongest markets out there is the US one. The EU and China also have very strong markets, and correlating, very strong, stable governments.


The last one is the Neo-marxist view. That is that there is no politics/government, everything is the market in one form or another.

1. How can you enforce that?

2. How can does distribution of goods take place?Well, one way that I was thinking about is the system that my local library uses for the people who want to use the computers there. When there isn't a lot of people who want to use the computers, a person using the computer can use it for however long they want. However, when there are a lot of people, there is a time limit of 30 minutes for using the computers. (There is a clock provided on the screen that counts down for you.) There is a separate computer for people to put their names and library card numbers in, and when a computer is ready, it says "reserved for [the name of the next person on the list]. The only thing that matters is the order that the people arrive in.
If you applied this across the board, you could have a rota system for just about everything that is scarce. Things that aren't scarce would have free distribution.
The way of enforcing most things could be, at the very least, having it shut off a few minutes after your time limit is up.

But the people are the ones who control wealth valuations. The free market uses the demands of the people set by marginal utility and against the production of the people set by marginal cost. Goods are ultimately valued by their place on the margins.Oh, that's true, and in the rota system a person could decide that they would rather use the community bowling alley than the community computer lab, but it wouldn't matter if the people walking in and putting their name on the waiting list really really really want to use it or are just bored and have nothing better to do.

Any government cannot simply say that a good is worth so much, without also controlling that goods marginal values. In order to control its marginal values they must control its use, substitutability, disposal, aggregate production, labor hour cost, resource cost. Get what I am saying? In order to control wealth, you must control what people own, how goods are produced, and how people are compensated for their production. Not only do I consider it an immoral practice, but I also consider it practically impossible.Ah, I see what you're saying. Yes, I suppose that is what would have to happen. After all, I just said that use would be controlled, and as I believe in equality of income compensation for production would also be controlled. How goods would be produced would also likely need to be controlled. I don't find this to be immoral, though, I find the idea of some people having exclusive ownership and others not to be immoral.

(There are other ways of deciding who gets to use what, but that one was easiest to explain.)

Yes, that is what you said before, only with different words.As I recall, in a past discussion you agreed, though you used the term "compromise", and I agreed, that people have to compromise to live together. Do you still agree?

All I am saying is that communists and socialists have a nasty way of taking away liberties and then saying that it will remain free because of a democratic process. It doesn't work that way.Ah. Well, it wouldn't remain free, I have to agree, but given a properly functioning democratic process it would be the most free of all possible ways for people to live in a society together.

No, I wasn't going to make that argument. I suppose there could be a theoretical full employment if wages=production, but the stickiness of the market in reacting to inventories would inevitably lead to underproduction, ie unemployment.Oh, good. So then we agree that capitalism requires unemployment. (With that sentence itself I'm not implying that it's worse than some other system, but I will probably do so later.)

No, government and economics are not the same thing primarily because of the difference between public and private goods.Yes, but why does there have to be a difference between public and private goods?

You usually don't pay someone to use their research; the money is paid to those who produce creative works when they sell them to producers, record labels, art shows, etc. Research is free to use as long as it is cited properly.So then that law wouldn't have to change, good.

Getting rid of compensation would allow people to use art for their own benefit without paying the creator.So?

It would have happened very slowly; ARPANET was deployed in the 1960's but it took until the 1990's for HTML to be invented. That's 30 years before a feasible technology to be developed for large-scale use. It took the private sector only a few years to do many hundreds of times the amount of progress made by the public sector.

The public sector is good for basic research, but the dissemination and perfection of technologies is best left to the private sector.I agree that the private sector moved internet technology more quickly, but that's because ARPANET was sufficient for the government's needs and so they didn't need to improve it. The private sector had different needs, and so they improved it the way they did. However, a democratic process for the disposal of all new technology (yes, this is slightly different than the theory I posited before) would potentially have all of the people in the society giving ideas for how the new technology could be used, perhaps increasing its utility even better than the private sector could.

Aside from intellectual property? Intellectual property could easily be valued with a barter system. Why couldn't someone say "Here, write me a book, I'll give you 10 bushels of wheat, and if I really like it I'll give you 20?"

Things that are extremely valuable or large like airplanes, industrial equipment, construction projects/equipment, infrastructure, etc. Those things are so costly and so large that any but the most miniscule orders would require a unfathomable amount of additional infrastructure to store and record the goods to be exchanged.Well, I suppose either someone could order one airplane, or a society could order those things and the people making those things could be employed by the society itself.

It would be difficult enough to value most technology due to the inefficencies of the barter system, and the restriction of the private sector would greatly slow the rate at which technology is implemented and improved. Also, technology would be regressed by the lower rate of productivity growth and the inefficencies in the distribution system.Yes, but this is after the technology has been discovered and it's been determined that there's a need for it, why couldn't a country manufacture its own technology, or its own everything other than due to a shortage of raw goods?

No, because taxes work opposite to the effects of loans. When you tax, the money comes from savings as well as consumption spending, reducing the overall money supply and counteracting the loans. Unlike a fractional reserve system, the system would have to have the same amount of money on hand as it would loan out since there is no system of interest rates or reserve requirements to control the money supply.Yes, but the same people who are supplying money are also giving it out, and yes, they can't give out more money than they have. I don't see a problem with this.

You have to have a fractional reserve system for that to work; a tax supported, interest-rateless system would not be able to support fractional reserve banking and the lack of interest rates would reduce the amount banks can or would borrow from the central bank as well as make it harder to affect the money supply through open-market operations.I don't have a problem with the idea of eliminating the fractional reserve system and having a total reserve system.

Trade is the system of meeting needs that the local resources cannot supply as efficently as another area can; the system you propose is no other than the one that currently exists. The free distribution system would greatly accelerate the rate of resource consumption of society as a whole, making the system unsustainable on all but the smallest levels. It would likely be necessary to have a dual system; a free distribution system for the really plentiful goods, and another system for the more scarce goods.
I do agree with your definition of trade, though "efficiency" wouldn't be an issue here.

It's the production possibilities curve; there is only so much an economy can produce at any given time, and since the economy must differentiate between goods produced solely for barter and goods produced for other purposes the total amount of resources available for a particular good is reduced, which means the output of individual products is limited.Yes, but if there aren't enough goods produced for use, then some of those goods for barter would be converted to goods for use.
(Incidentally, I don't support a barter system except for trade between countries, but it's good to hear another viewpoint of it.)

Valuation is the only way we have of balancing the supply and demand for products; if there were no system of valuation there could be serious misallocations of production due to the inability to judge aggregate demand.You could judge demand by asking people what they want. Naturally, you wouldn't ask them everything they want, but you could ask them what they would want most, and then get them what they want most.

That's unfortunate, but many people who have useful skills can find employment. However, in IT it is very likely that your skills will become rapidly obsolete without constant new education, so that explains some of the unemployment.Well, as the system you propose to solve this problem is different than the one we currently have, I don't have a problem with the concept of retraining people and supporting them while they retrain. Actually, it's similar to what I would propose, so we would agree here.

Not many IT jobs relative to the amount being created are being offshored; in the past year some 80,000 have been created in IT and 20,000 in high-tech manufacturing. Although this is lower than the bubble years, the growth is far more sustainable than it was in the past; in fact, Microsoft and other companies have made and are planning major US hires in 2005 and 2006.The problem with using employment statistics is how they're calculated. If someone works for an, they're considered to be employed, but can anyone live on an hour's worth of work?
In addition, it's easy to increase employment. Simply fire the person you had working 40 hours a week and replace that person with four people each working 10 hours a week. A fourfold increase in employment, but is it worth it to have the four people working if the other person is significantly worse off?

The manufacturing and IT being offshored is going to slow because the labor market in India and other countries is getting serious demand-pull labor cost inflation that is making the situation uncompetitive. The market is gradually returningI can see the employment returning here only if there aren't enough educated people in the third world. Once every country has people capable of doing IT work, it will simply float around to find the lowest bidder - the race to the bottom we are already seeing with the apparel industry.

Full employment actually reduces rates of unionization because the ease of getting jobs mitigates the need to protect against predatory bosses; also the competition for their labor increases the rate at which people switch jobs making unionization an unnecessary encumberance that they do not need.

The highest rates of unionozation are in the lower skill, more easily replaceable jobs and those fields that workers are more likely to have one or two employers in for life.I can't agree or disagree with this, but either way wages would rise in full employment to the point that every business is a worker owned co-op.

It does happen, but the goal is to mitigate the effects of recession and maxmimze the efficency of the economy during expansions. The goal of monetary policy is to make the economic climate and therefore the value of the currency as stable as possible.But in full employment, it would have to not happen in order to remain at full employment.

But high-value goods tend to have higher levels of employment and larger gains in productivity and growth than mid and low value goods. A case in point is the tax on luxury goods in the 1980's; using the argument that such goods are not popular and are not consumed enough to have a serious economic effect if purchases fell, they put in the tax and employment in almost all industries remotely related to luxury goods began to rise considerably.

It takes more people, more supplies, and more suppliers to make a jet than it does a table and therefore any declines in their production have a more serious effect.Right, so in the system I'm proposing, there would be an increase in demand for tables, and so there could be various table specialists who put gold on the legs, which would employ both carpenters and goldsmiths. In addition, the price of luxury goods would go down.

Most of the money supply is created through the actions of commercial banks and the purchase/sale of bonds by the central bank and the effect that has on the interest rates. Also, adjustments in the reserve ratio of banks is a way to adjust the money supply in a major fashion.So instead of having banks adjust their reserve ratios, the government as a moneylender could raise or lower its own reserve ratio. If the reserve ratio is equal to the amount it lends out and it wants to lower its reserve ratio, it could simply lend out less money.

Not really; buying a share is the equivalent of suffrage in the BoD elections; shares represent granting a share of ownership in the company in exchange for money (when a company sells shares, they do so to raise money) with the expectation that profits will rise enabling the shareholder to either recieve a dividend or sell it at a higher price.

So, anyone who owns a share is at least a partial owner in the company with rights detailed in the intial sale of the stock. If employees buy shares or are granted options, they may also recieve voting rights in the companyOh, I'm aware that this is how stocks work, but to say that a publicly held company is a representative democracy is akin to saying the U.S. is a representative democracy and Mexicans can also vote in U.S. elections. The company may be a representative democracy, but it isn't representative of the workers, and they're who matters, IMHO.

Transparency makes it harder to act anticompetitively because actions are both easier to review and measure and it is easier to enter the market. In a system where it is difficult to record all transactions, maintain an efficent distribution system as well as enter the market, it is going to be hard to keep it transparent. I know your argument for the last two happening, but why would it become more difficult to record transactions?

Well, actually, the nations like the USSR had a better supply situation under totalitarian government due to the innate need for stron control in a command economy. It wasn't until the system became decentralized in the 1980s that the shortages became severe; this was due to the lack of a market mechanism that could maintain local and aggregate demand/supply as well as the depression of prices due to controls (which is exactly the same effect that free distribution would have).It's true that the shortages were more severe in the 1980s, but the system was still repressive but not lethally so, and so people rebelled against it. In addition, there were still shortages, famines, etc. when the government was lethally repressive.

Without valuation, you can't measure supply and demand for goods accurately enough to keep the system functioning and it becomes unsustainable.But the system of valuation doesn't have to be a market system.

Disaster. Do you think he general population knows anything about anything. Direct democracy would end up with isolated, mob ruled, protectionist tribes.
I do take offense on this. I live in a country which has direct democracy, a constitution and all checks and balances that go with it.
As far as I can see, there's no tribes, no mob, and our minorities are rather better than yours...

Swiss and proud to be.

Well, one way that I was thinking about is the system that my local library uses for the people who want to use the computers there. When there isn't a lot of people who want to use the computers, a person using the computer can use it for however long they want. However, when there are a lot of people, there is a time limit of 30 minutes for using the computers. (There is a clock provided on the screen that counts down for you.) There is a separate computer for people to put their names and library card numbers in, and when a computer is ready, it says "reserved for [the name of the next person on the list]. The only thing that matters is the order that the people arrive in.
If you applied this across the board, you could have a rota system for just about everything that is scarce. Things that aren't scarce would have free distribution.
The way of enforcing most things could be, at the very least, having it shut off a few minutes after your time limit is up.

I could see this system used for most capital. The government owns all of capital and lends it out on a usage basis. This could not, however, be used for personal property. Would you really want a family to lose usage rights to their home after their allotted time wore off? Are people going to have to go sign in at the local kitchen to use one of the community ovens?

Ah, I see what you're saying. Yes, I suppose that is what would have to happen. After all, I just said that use would be controlled, and as I believe in equality of income compensation for production would also be controlled. How goods would be produced would also likely need to be controlled. I don't find this to be immoral, though, I find the idea of some people having exclusive ownership and others not to be immoral.

It seems that you are forming a government that has instructions on how to actually live, just so that all can live equally. It seems more like a big prison than anything.

As I recall, in a past discussion you agreed, though you used the term "compromise", and I agreed, that people have to compromise to live together. Do you still agree?

Oh, I certainly agree with the trade off of liberties.

Oh, good. So then we agree that capitalism requires unemployment. (With that sentence itself I'm not implying that it's worse than some other system, but I will probably do so later.)

Note, there would be constant unemployment while the market is perpetually righting itself. However, that does not mean constant unemployment for a particular person or group.

Also, socialism may cause full employment, but the near complete stagnation it causes would make the labor hours nearly worthless.

I could see this system used for most capital. The government owns all of capital and lends it out on a usage basis. This could not, however, be used for personal property. Would you really want a family to lose usage rights to their home after their allotted time wore off? Are people going to have to go sign in at the local kitchen to use one of the community ovens?Well, I don't think everything would need to be on a rota basis. It seems to me that everyone will need a home constantly, and if a system can't fulfill the needs of its people, it would fail, and deservedly so. As far as ovens go, while they're not needs in the technical sense, it seems that they have become so widespread that people believe they need them, as well as things like refrigerators and washing machines.

The rotational use is just one way of doing things. Another way would be to (initially) randomly generate a list of all the people in the community, and at the community meetings when it comes to distributing luxuries, whoever wanted a particular luxury could raise their hand. If there are enough of a particular type of luxury for the people who want them, they could get them and then be moved to the bottom of the list. Variations on this could be used, also, and this system could be used in conjunction with the rota system, depending on how the people in the community want it.

It seems that you are forming a government that has instructions on how to actually live, just so that all can live equally. It seems more like a big prison than anything.Hm. Well, I can't say I agree with the prison sentiment, but I can understand how it might seem that way to somebody. After all, I view the concept of a gated community to be like a prison, and there are others who would disagree.

Oh, I certainly agree with the trade off of liberties.Well, on that we are agreed, anyway.

Note, there would be constant unemployment while the market is perpetually righting itself. However, that does not mean constant unemployment for a particular person or group.I don't know, it seems to me that a large portion of the population will never become unemployed unless it is by their own choosing, and there will be another portion of the population who are constantly in and out of jobs. While that second part of the population might make enough to live on, it certainly doesn't offer them any stability.

Also, socialism may cause full employment, but the near complete stagnation it causes would make the labor hours nearly worthless.I don't believe that it would cause stagnation, but I'm sure you knew that already.