Discussion in 'Economics, Business, and Taxes' started by Woolleybugger, Jul 23, 2012.
Interesting. So you believe that the USA was stable prior to 1900 because it had just the right amount of regulation. In what way? Was it stable economically? No. We had crashes and recessions galore. Was it stable environmentally? Hardly, the previous century saw massive pollution on a scale that dwarfs the China of today. Was it stable politically? The 1860s prove that wrong. Was it stable politically? Nope. Was it stable geographically? No. Culturally? No. In fact, the USA in the 1800s was very, very unstable by any modern measure. The only stable element was that the continent was becoming empty due to the conquest and annihilation of its native inhabitants and filled in by hordes of immigrants. It was as stable as a rocket ship moving into space in that regard. That is no longer possible for us today. We are bound by our geography, our population and the laws and rules that govern us in a complex society. You cannot dismiss this simple fact by casually comparing an empty continent from the 1800s to one that has 300 million people. To do so would be to ignore reality which is really what so many libertarians do these days.
I am going to step in here with a couple of observations. It seems to me that though you are "pragmatic" enough to recognize the value of the "rule of law" and the maintenance of "social order," a lot of your concern is really a "moral/philosophical" concern with individual property rights and the liberty to exercise those property rights than it does with the actual operation of the market system. (BTW, I would also argue that Karl Marx himself - and probably many Marxists - had a "moral/philosophical" concern with income inequality and equal opportunity. So I am not claiming that "moral/philosophical" are exclusive to "free marketeers" or "Marxists." You seem a little less concerned with the actual operation of the economy. (Economics is supposed to be a "positive science" and "Welfare economics" is supposed to separate out the "moral issues" but I am skeptical that they do a very good job of this.)
In my opinion, degsme (like Keynes and Steve Keen IMO) is more concerned with the actual operation of the economy and with the limitations of conventional economic theory. In particular, to my mind, he is much more concerned with instances of "market failure" - circumstances in which purely unregulated markets have negative consequences for individuals or the system as a whole. Imperfect information is one example. Anti-competitive practices is another example. Negative network externalities are a third example. (degsme may add to this or correct me.) That said, I am not sure that degsme really responds to your "moral/philosophical" concerns. (In some ways, your position reminds me of James Buchanan - the economist, not the President - http://en.wikipedia.org/wiki/James_M._Buchanan). Now, I do not think that degsme is opposed to private property nor does he think that state ownership of all the means of production or that civil law are bad things. I suspect that he would consider civil law - and the regulation that it provides - is the bedrock of market institutions (and one thing that separates the U.S. from Somolia.) In this sense, degsme is FAR from being a Marxist. Nevertheless, I suspect that degsme (and I am with him generally on these questions) takes issues like anticompetitive practices, imperfect information, and negative network externalities very seriously and would argue that there is a role for government regulation and public policy in dealing with these "side effects" of the pure unregulated market. This is a pragmatic/theoretical issue and is only secondarily a moral and philosophical issue.
One last thing is worth mentioning. I do think that there is a social/political dimension of economic growth and wealth distribution and it is this. If people are working and earning, they want to feel that the "system" is treating them fairly. Gross income inequality is a sign that the system is rigged to benefit a minority (the oligarchy, the powerful, the priveledged) at the expense of the majority. This inevitably (in my opinion) creates social unrest (which undermines social order). This is where we begin to get into "class warfare" arguments. In these circumstances, perhaps Somalia - with a total breakdown of social order - is not the best example. Traditional societies (like Guatamala) with gross inequality and a small middle class might be a better example. The nature of regulation in Guatamala and the United States is quite different as well.
People who have ideologies will never admit that the foundations of that ideology can be wrong. Before Trap even utters a thought about the economy, he already has a set of ideas in his mind that are untouchable concepts. They are big ideas not specific ideas. Notice how none of these free marketers who rail against regulations or the law actually have a ready list of the egregious laws they claim are so constrictive. If I knew that my house was built wrong, I would be telling my contractor exactly why and show them the errors. A civil engineer reviewing a design for a dam does not just say "The dam will not stand. Fix it." The engineer says something specific using real data and analysis that points exactly to the fault in the design. Trap will never give us this list of things that he feels so strongly about because he has no clue what they are, he just knows they exist in a vague way. The right wing says to abolish the EPA. And replace it with what exactly? Abolish Dodd Frank with what exactly? This is where their ideology betrays them as inadequate to running a complex system. They simply cannot give ground in order to move forward. What they do is dig in even deeper when challenged. Romney is a great example of this type of thinking. He has provided no detail on any of his positions yet is steadfast about his convictions. It is like staring at a movie for 3 hours and then saying it sucked. OK, what sucked? It just sucked. Great but don't ask me to hire you as a movie critic.
The inability to articulate a clear position is - IMO - often coupled with ....
..... the sort of thinking that on display in this video clip:
Don't put words in my mouth. In almost any discussion of regulation, de-regulation, Degsme recommends people in favor of fewer regulations head to Somalia.
If I said people in favor of more regulations should head to North Korea, where everything is regulated, I'd be making a similar argument.
America was not as stable as England in the 1880s. It was more stable than Zululand. For that matter, it was more stable than Somalia today.
No - whenever someone starts saying that we don't have a free market today because of regulations I say that. Precisely because without regulations you get somalia.
you claimed the USA was stable prior to 1900. and yet we were more violent, had our highest casualty rate war, and had a higher rate of per-capita litigation who's outcome were far less predictable. And we had slavery.
No you would not. Because
Im not saying that the only market is one that is fully regulated. Whereas YOU (and others) ARE saying that a 'free market' is one that is NOT regulated.
[quoteAmerica was not as stable as England in the 1880s. It was more stable than Zululand. For that matter, it was more stable than Somalia today.[/QUOTE]
No it was not more stable than Somalia today. You keep leaving out all the things I listed. Somalia's civil war has not had nearly as many casualties as a percentage of its population as the US Civil war had.
and the history of regulation has been the exact OPPOSITE. Furthermore if you are referring to a progressive tax system, your description simply does not fit with most of what we see except in terms of the ability of the wealthy to use tax loopholes that essentially are unaffordable to you.
If there is any "class warfare" it is by the wealthy, it was started in Johnson's time and came to full fruition with Reagan and his accolyte GWB. and the rich basically won that round of battles.
Given that the Government employs millions your dismissal of it as a driving force is simply one that ignores the real world. Consider the notion of private property. What it is, how it is acquired, retained and ownership verified is purely a function of government. Thus without government regulation you have no economy. That's the brilliant insight that Franklin understood.
There is nothing to address here. You've not actually demonstrated any such problems, much less their visibility at any meaningful level.
And again you've not demonstrated that this is happening even in the EU much less in the USA
And it is not clear that deregulation actually is the force behind the cheaper air travel. Nor is air travel cheaper in many places after deregulation. Flying into Fargo ND is now much much much more expensive since you basically are flying a charter.
And that's precisely what you don't seem to understand is that THE EXERCISE of liberty is the true measure. Not the theoretical right to it. And things like the EPA, FDA, CPSC etc. all INCREASE your and my access to this exercise.
Wrong.. right now they benefit the wealthy. For example you yourself voted for a man who reduced your lifetime earnings by about $1 million. and he did that by rigging the system against you and more in favor of the children of wealthy parents who already had a leg up on you
Right. and an "unregulated market" is one that HAS NO REGULATIONS... IE HAS NO LAW. IF - OTOH you are willing to admit that regulation of the market is necessary for it to be an efficient market, then we are now in the realm of looking at what regulations result in more optimal and less optimal markets. And in that realm, there is no evidence that your approach leads to a more efficient market. In fact all the evidence IS TO THE CONTRARY.
Precisely because it was a very unstable time. England wasn't very stable- the whole flux of industrialization without concomittant regulatory offset caused massive instability around the world
and what do you think is an "unregulated market" other than one that has an absence of regulations? I'm not the one advocating that. You are, Lukey is, AoD is, sgt Staples is,
No it does not. Somalia's civil war was far less violent, unstable and disruptive than the USA's.
The Casino metaphor
For the most part, I will let degsme continue the argument. However, I did want to say a couple of things about your casino metaphor. Loosely speaking, a casino is a reasonable metaphor for a rigged system. The one place that I would argue with you is your assertion that the "government is the house" and the game is rigged to benefit the government. Now, I agree that this is a possibility in some economic systems. In particular, it is likely to be the case in a centrally-planned economy such as what existed in the USSR or pre-Deng Xiao-Ping China (and to some extent today). But that is not always or even an inevitable result. Regulation is not necessarily a slippery slope to central planning.
In the United States, you could also make the case that "the big business oligarchy" (de facto if not de jure) controls the government and institutes rules that allow them to control the house. The government serves to enable the big business oligarchy. In the era that you seem to admire - the Gilded Age - this WAS largely the situation. Now, you admire the Gilded Age and so domination by a big business oligarchy may seem appealing to you.
This all really just gets us back to the old "tyranny of the mob" versus "tyranny of the oligarchy" argument that we have had many times. The mob versus the oligarchs argument really involves determining who the government works for. What you are concerned with is whether the mob controls the house or the oligarchy controls the house.
There are two fundamental differences between being controlled by the government and a corporation. The government is mine, I can change it, I can vote it out, I can control it. I have no control over a corporation nor does that corporation have any desire to do anything but serve itself.
Yes, we were much more stable than a tribal nation in what was soon to be a colony of Europe in deepest darkest Africa 130 years ago. Wonderful. The North Korea angle is great too, very appropriate. Trap, I like you too much to let you wallow like this, you are getting your ass kicked here. Just admit it and we can all just admit that this little Goldilocks debate about porridge has never been about specifics, only your ideology.
The only reason the government exists really is to allow us to operate freely within a set of rules. Without those rules, there is no chance of freedom. The government is the single most important factor in any nation's success. That is a fact going back to before the Pharoahs. This romantic notion of the individual rising above himself in a vacuum is fairy tale stuff.
Have I called for an "unregulated" market? I have not. I think the level of regulation we have now is basically fine, although there may be some fat in the regulations that could be cut out. You think the market should be regulated so tightly that it appears to me that individual traders would have no choices -- they'd be forced into a model so risk averse that no growth could occur. This would lead to a stable market that didn't grow.
Well, there you have it. No country was stable. Perhaps stability isn't what is needed since the century in question brought us every invention from the steam turbine to alternating current
Utter nonsense, Degs. Even in the Western Theater of the American Civil War there was little or no famine, and almost no warfare practiced against noncombatants. On a percentage basis, our Civil War was much less lethal than Somalia's -- and Somalia is so broken it can't be said to have an ongoing Civil War. You have internecine fighting among multiple factions. The country would have to be more stable to engage in a Civil War.
You've argued that we need a "free market". Which means an unregulated one.
Want some oats with all that straw? Show me where I've advocated anything lkke that
This btw is a valid point, the ultimate in stability means no growth. BTW you do notice that with the cut in regulations and tax rates OUR GROWTH RATE FELL.
Yes and precisely because a better understanding of economics started emerging as information collection and analytic tools emerged in the latter part of the century, we have been able to not only stabilize nations but increase growth rates by doing so
Oh please, what do you thing "Sherman's March" did. And I guess ALL of Atlanta was a military base. Sorry. Famine by itself is not a measure of the violence of the war. In Somalia Famine was being used as a tool of war, just as it was used in Andersonville and as with Somalia, hundreds of thousands starved in the political aftermath of the war http://www.guardian.co.uk/world/2012/jun/16/slavery-starvation-civil-war
Yes Somalia AT THIS POINT is "so broken".... precisely because it is "unregulated".
. On a percentage basis, our Civil War was much less lethal than Somalia's -- and Somalia is so broken it can't be said to have an ongoing Civil War. You have internecine fighting among multiple factions. The country would have to be more stable to engage in a Civil War.[/QUOTE]
and to achieve anarchy like in Somalia you need a significant level of deregulation. Even places like Russia are problematic so we should cast a wary eye on each step in the direction of deregulation....
IOW we should think governance through and look at what works and what does not... hardly a stunning comment.
Not accurate. You have SPECIFICALLY singled out the Gilded Age regulatory regime as the one you think is ideal.
[/quote]For all the criticisms of that era, ... the nation grew in both population and GDP,[/quote]
And it grew SLOWER than the historic average from 1933-1999.
Meaningless statement since it cannot be really measured. But in terms of "patents" and other innovations this is not at all true. Remember the steam engine, the weaving machine, the RR ALL were invented elsewhere. And also remember that in essence the USA was achieving this growth with the presence of de facto slavery in the form of Jim Crow
With MASSIVE GOVERNMENT FUNDING
On a per capita basis we were POORER than all of old europe despite dramatically more raw resources and people
Simply not true. We can and did force them to work in them to pay off their debts. Debts acquired essentially through fraud.
IT WAS NOT STELLAR GROWTH RATE. the economic data simply show that to be false. Furthermore much of it was done on the backs of the majority of the population being completely disenfranchised, and the final massive genocide of the Amerinds was practiced
You simply ignore these inconvenient facts.
Then you need to read more history. Tammany Hall is but the quintessence of that. The RRs are another. If you think Kelo was wrongly decided, then you sure cannot like the Gilded Age Becaues the use of political power to use Eminent Domain to take property was far worse then. As for corruption, go back and read why the 17th Amendment was even proposed.
We cannot have a society that treats people differently based on things they cannot control - like Race. And if that requires regulations to ameliorate that by RECOGNIZING that society is doing so, then we have to have such laws. And yet such laws inherently are going to REQUIRE discrimination of A from B.
As for income - the only laws that treat the wealthy differently are ones that allow them to do things like write off their hobbies as "business expenses" while 99% of Americans cannot.
You see what you believe. not what is there. And that comes from your belief in the difference of society and government. You seem to ignore the part of the Constitution that says
WE THE PEOPLE
Separate names with a comma.