Lets talk Economics

What the free market really is:

The Free market is a summary term for an array of exchanges that take place in society. Each exchange is undertaken as a voluntary agreement between two people or between groups of people represented by agents. These two individuals (or agents) exchange two economic goods, either tangible commodities or nontangible services. Thus, when I buy a newspaper from a news dealer for fifty cents, the news dealer and I exchange two commodities: I give up fifty cents, and the news dealer gives up the newspaper. Or if I work for a corporation, I exchange my labor services, in a mutually agreed way, for a monetary salary; here the corporation is represented by a manager (an agent) with the authority to hire.

Both parties undertake the exchange because each expects to gain from it. Also, each will repeat the exchange next time (or refuse to) because his expectation has proved correct (or incorrect) in the recent past. Trade, or exchange, is engaged in precisely because both parties benefit; if they did not expect to gain, they would not agree to the exchange.

This simple reasoning refutes the argument against free trade typical of the “mercantilist” period of sixteenth- to eighteenth-century Europe, and classically expounded by the famed sixteenth-century French essayist Montaigne. The mercantilists argued that in any trade, one party can benefit only at the expense of the other, that in every transaction there is a winner and a loser, an “exploiter” and an “exploited.” We can immediately see the fallacy in this still-popular viewpoint: the willingness and even eagerness to trade means that both parties benefit. In modern game-theory jargon, trade is a win-win situation, a “positive-sum” rather than a “zero-sum” or “negative-sum” game….

The market, then, is not simply an array, but a highly complex, interacting latticework of exchanges. In primitive societies, exchanges are all barter or direct exchange. Two people trade two directly useful goods, such as horses for cows or Mickey Mantles for Babe Ruths. But as a society develops, a step-by-step process of mutual benefit creates a situation in which one or two broadly useful and valuable commodities are chosen on the market as a medium of indirect exchange. This money-commodity, generally but not always gold or silver, is then demanded not only for its own sake, but even more to facilitate a re-exchange for another desired commodity. It is much easier to pay steelworkers not in steel bars, but in money, with which the workers can then buy whatever they desire. They are willing to accept money because they know from experience and insight that everyone else in the society will also accept that money in payment.

The modern, almost infinite latticework of exchanges, the market, is made possible by the use of money. Each person engages in specialization, or a division of labor, producing what he or she is best at….

But exchanges are not necessarily free. Many are coerced. If a robber threatens you with “Your money or your life,” your payment to him is coerced and not voluntary, and he benefits at your expense. It is robbery, not free markets, that actually follows the mercantilist model: the robber benefits at the expense of the coerced. Exploitation occurs not in the free market, but where the coercer exploits his victim. In the long run, coercion is a negative-sum game that leads to reduced production, saving, and investment, a depleted stock of capital, and reduced productivity and living standards for all, perhaps even for the coercers themselves.

Government, in every society, is the only lawful system of coercion. Taxation is a coerced exchange, and the heavier the burden of taxation on production, the more likely it is that economic growth will falter and decline. Other forms of government coercion (e.g., price controls or restrictions that prevent new competitors from entering a market) hamper and cripple market exchanges, while others (prohibitions on deceptive practices, enforcement of contracts) can facilitate voluntary exchanges.

The ultimate in government coercion is socialism. Under socialist central planning the socialist planning board lacks a price system for land or capital goods. As even socialists like Robert Heilbroner now admit, the socialist planning board therefore has no way to calculate prices or costs or to invest capital so that the latticework of production meshes and clears. The current Soviet experience, where a bumper wheat harvest somehow cannot find its way to retail stores, is an instructive example of the impossibility of operating a complex, modern economy in the absence of a free market….

Some critics of the free-market argue that property rights are in conflict with “human” rights. But the critics fail to realize that in a free-market system, every person has a property right over his own person and his own labor, and that he can make free contracts for those services….

A common charge against the free-market society is that it institutes “the law of the jungle,” of “dog eat dog,” that it spurns human cooperation for competition, and that it exalts material success as opposed to spiritual values, philosophy, or leisure activities. On the contrary, the jungle is precisely a society of coercion, theft, and parasitism, a society that demolishes lives and living standards. The peaceful market competition of producers and suppliers is a profoundly cooperative process in which everyone benefits, and where everyone’s living standard flourishes (compared to what it would be in an unfree society). And the undoubted material success of free societies provides the general affluence that permits us to enjoy an enormous amount of leisure as compared to other societies, and to pursue matters of the spirit. It is the coercive countries with little or no market activity, notably under communism, where the grind of daily existence not only impoverishes people materially, but deadens their spirit.

http://mises.org/daily/1973

Stephen,

Could you provide a source on your milk regulation?

Either way the principles hold true, people have their self interest in mind, if milk were killing babies why not do a public announcement on it and let people decide for themselves?

If economic inequality keeps going the way it’s going, pretty soon the only people left who will be able to afford to pay taxes will be the rich. We’re already at a point where we’ve decided that if you don’t make a certain minimum amount of income, you don’t have to pay taxes. 50% of us are already there. Not taxing the rich? It’s what we’re already doing.

Last Lemming. Part of the hideous expense of the last year/six months of life is the expense that is associated with end stage diabetic/renal failure deaths.

I was actually understating the savings that would occur and the expense. People who are not deconditioned, who get the exercise noted and who are not non-compliant diabetics, for the most part have dramatically reduced medical care costs.

Consider my dad who died from end stage Parkinsons. Total expense was less than one frequent flier’s visit to the ICU.

I’m not attributing all of the problems to non-compliant diabetics, just pointing out their contribution to the expense.

Can we finally get a single payer universal health care system set up here in America? I don’t get why we’re so stupid on this issue.

Let’s say you want to start up an health insurance business. And you have a really good charitable heart, so you want to insure those over 55 who are really going to need it. Why would you insure anyone over 55 with preexisting conditions? Their needs are going to be far more than what they could possibly pay. Where would you, as a private insurer, get the money to pay for all the services someone over 55 with preexisting conditions will need? Will you not raise your prices on healthy people under 55 to cover your expenses for sick people over 55? What is the difference between a private company increasing its costs on healthy people to cover sick people and a government program that taxes all to pay for sick people?

Jon,

we don’t give a damn on what mises says. you anarchists are truly stupid. Freedom? There’s no better freedom than not having to worry about whether or not a stupid kidney stone will cause you to file for bankruptcy.

http://www.salon.com/technology/how_the_world_works/2009/06/05/medical_bankruptcy

2/3rds of all personal bankruptcies were caused by health care costs. That’s Mises freedom for ya.

Stephan,

I like the idea of simple lessons on Economics. When I took Econ in college the prof spend 4 weeks of a 10 week class on Robinson Crusoe’s need for food, clothing and shelter and the requisite tradeoffs associated with those three items.

Then you can get into the minutiae of regulation, manipulation, and the like’s effect on our economy.

Please keep it up. I like what I reading except for the comments which are jumping the shark.

@James,

The insults started from them, I just returned them. I know I shouldn’t but sometimes it is frustrating that people attack the person rather than confront the ideas and have a logical debate on the ideas. MH doesn’t usually confront the ideas, he just attacks the institution or people, but doesn’t have the wherewithal to actually talk economics, even when he does he refuses to see what even his side says on the matter. Dan also attacks the individual but will at least talk about the actual issues, unlike MH.

Keynes isn’t exactly working out. It’s just leading to higher and higher debt until default, or one world currency which will rule us as a tyrant. The last hundred years has led us closer and closer to a despotic government, if that is what you like, well, I don’t know what to say to you. Personally, I am for freedom and for the rights of the individual, what good is it if we have no agency? Is that not what the war in heaven was about?

I never said, neither the Mises Institute, that order and groups aren’t needed. The premise is that it is not OK to use violence as a means to an end.

Read this if you are truly interested in understanding voluntaryism and what it entails, otherwise don’t there is no debate.

http://www.lewrockwell.com/orig6/molyneux1.html

OK, let me defend my quotes now because apparently I can’t do anything quite right.

The long quotes are because the OP makes many fallacious arguments. Economics is a pretty complex topic. In order to thoroughly refute the fallacies offered in the OP I need much space to do so. I could write my own words, but I know there are better writers out there that can explain how the world works much better than I can. So why read their stuff and regurgitate it in my own words when they say it so much better and it would take me twice the space to say it?

Forgive me if you don’t have any intellectual curiosity for things that don’t jive with your world view. If you don’t then don’t bother reading. I read the OP, even though it doesn’t jive with my world view, and offered up a logical and pertinent argument to the contrary. If there was no reason for debate on the topic then why open comments?

It’s obvious from most comments on this post that most people have no desire to look outside their boxes but would rather belittle those with different views. Sorry, if I’m not a socialist and never will be. Sorry, that I’m not a conservative and never will be. Sorry, that I believe in freedom of the individual and believe that liberty is important.

Jon, I wasn’t thinking of you, though I will, perhaps, in the future.

When I took the GRE advanced test on Econ, I had finished one upper division class. I was sick, so I had to leave early. I got an 800 (out of 220 to 880). I was an applied econ major, graduated with the departmental honor.

Greek government invented coinage and currency.

I’ll have to go into trust, economics, utopias and the delivery of milk (with citations even) next time.

Maybe explain comparative advantage.

Anyone have a specific topic?

At least Jon does recognize that capture occurs and is a problem.

Dan caught that sometimes people consider a monopoly better than life without one (e.g. single payor health systems) though I thought he would rise more to “sometimes unions are good/necessary” … ah well, no predicting sometimes.

As for anarchist paradises, there are a number of places that have decended into Anarchy. I’d be interested in hearing of any of them that became paradises.

@James,

I say read the articles first because of comments like these:

The act of social punishment (prison, fines, physical violence, etc) are not rooted in the individual, but in the group. A person has no “right” by your very logic to punish another because s/he would be removing the other’s rights.

Of course, I don’t believe that. So I ask that you read then the discussion can be productive rather than throwing accusations at one another.

I do get a bit defensive because of comments made in the past by MH, Jeff Spector, and Dan. There don’t seem to be many that take my side on the issues then with people throwing unwarranted accusations, make fun of the person, and not taking the time to try and understand the issues I’m talking about but rather ridiculing them for small and petty reasons. So I hope that helps you understand why I get defensive and why I become even more adamant about my point of view.

As you illustrated in your post, my words come out differently than what I would like them to, that is why I write the quotes, they are well thought out and are coherent. So read the quotes and we can discuss them and add your own quotes and thoughts. But I won’t pretend that I am good at writing and portraying ideas.

@Stephen M (Ethesis),

For anarchy you also have to remember that when you look at it, compare the states next to it and its externalities. So when you look at Somalia, take those into account.

Stephen,
Are you saying that Type II diabetes, or at least most of the expenses associated with it, is preventable or easily manageable? Few doctors seem to publicize this. Are they and other medical associations captured by some lobby or part of the capture themselves?

I guess the death panels would be sharpening the knives for the elderly Type II patients if we went to single payer. Of course anarchy would get them quickly too.

I think mises.org has a lot of interesting articles. Some of them aren’t too great and stretch credulity, but most are pretty good I think. I also think it’s important to have multiple viewpoints to consider. I sincerely do appreciate the Keynesian viewpoint, especially reasoned comments such as those from James. So Jon, Justin, James, please continue to comment even if it appears unwelcome. I certainly welcome it.

Re Stephen
I’m not sure I’m convinced that without gov’t regulation of milk that babies would still be dying from drinking it. I do, however, think that occasionally gov’t regulation spurs innovation and causes industries to “re-evaluate” what’s they’re doing. The downside is that it inevitably ends up increasing cost, but most importantly regulations are rarely, if ever, rescinded, even long after they’ve outgrown their usefulness. This often leaves industries in a bind to the point of breaking. Additionally, the law of unintended consequences ALWAYS rears its ugly head. Hopefully regulation causes less damage than good, but that isn’t always the case.

Re James
I’m no economist, so I’m unprepared to debate the details, but my take on Keynesian economics is that much of modern economics would be a stretch even for Keynes. Nevertheless, in general, I actually think modern economics has gotten a number of things just plain wrong. It appears to be built upon the notion that the economy can be controlled by twiddling a few knobs, usually related to the price of credit and otherwise controlling the fiat money supply. And the concept of going into debt to spur an economy seems reasonable initially (I was taught this in my Econ class), but inevitably the debt is never repaid. Hayek and Von Mises in contrast emphasize the importance of building wealth on savings. This makes a lot more intuitive sense to me. What’s your take on the Keynes vs. Hayek debate?

jmb,

And the concept of going into debt to spur an economy seems reasonable initially (I was taught this in my Econ class), but inevitably the debt is never repaid. Hayek and Von Mises in contrast emphasize the importance of building wealth on savings.

actually the debt IS repaid. The United States paid most of its Great Depression and WWII debt in the following thirty or so years. This was due to several factors. 1) high taxes on everyone, but particularly on the ultra wealthy. 2) amazing economic growth over those thirty years. By the time Ronald Reagan came to power, America’s debt was $900 billion, a small amount as it would turn out. These next thirty years, since Reagan, we’ve lived under a ridiculous idea that lowering the tax on the ultra wealthy somehow trickles down the wealth to everyone else. Instead, the wealth continues to get amassed in the top 1% (who currently hold 40% of America’s wealth). And then we’re surprised that we’re running massive deficits and thinking they cannot be paid off. Well, duh. If we listen to conservatives, then we’re in deep crap. We didn’t have to go through 30 years (and counting) of this silly ideology to see what we could have seen plainly on paper. If the rich are not taxed progressively at higher rates, then the country faces a wealth imbalance which will eventually topple over. But don’t blame it on the poor.

I’m confused with with the post itself. I don’t come here for a lesson in economics. Did I miss something?

Jon,

I reject your whole framework here. Taxation is not a matter of theft. Taxation is not a matter of coveting. Taxation is a matter of a social contract that ensures all programs desired by the citizens of said nation are paid for. It is one thing to argue that a private system works better than a public system. It is wholly another to claim that a social contract is theft. You say you want a more balanced acceptance of alternate views, but your views are highly radical, extreme, and if actually put into practice will create a hellish world. You’ve already noted that your paradise is Somalia. No one ought to take you seriously.

And in terms of coveting, I think it is utterly laughable that that is thrown at the poor of the world when it is the rich who covet the wealth of the poor. You want to throw that commandment at the right people? Come to New York, walk down to Wall Street, step right up to the first banker, and whisper that in their ear. They are the masters of covetousness. There is no individual who covets wealth (particularly the wealth of others) more than a Wall Street banker. They are your enemy, Jon. They are the enemy of righteousness.

As for tithing, I don’t care how someone making $10,000,000 a year handles paying tithing on a $1,000,000 income after tax.

@Mike S,

Yes, your not left much of a choice if your taxed at 90%, like they used to be.

Jon,

The Constitution gives wide latitude to Congress on the issue of taxation. Congress can conceivably tax its citizens 100% if it so feels like it. But the “upper limit” depends on political will. The reason why taxes were so high on practically everyone from the 1940s to the 1970s is because the people accepted that, being in a deep financial hole, they had to make a sacrifice in order to pay down their debts. Amazingly, they were able to do this while also getting social services that increased their life spans. Who would’ve thunk it…Suddenly, today, we can’t even get politicians to expire highly costly tax cuts passed by Bush that did NOT stimulate the economy well.

Big expensive arenas have nothing to do with player salaries and owner profiteering. That citizens are dumb enough to fork over hundreds of millions of dollars for stadiums AND pay such high priced tickets is one strong indication of how corrupted our system has become.

I also doubt they all made the same amount of money.

I don’t want people to be paid the same amount of money (though, technically, if we go literally by the bible, Jesus paid all his workers the same, whether they worked one hour or twelve hours…just fyi…), as clearly some labor is more valuable than others. 330% difference between the top and the middle is extreme and unsustainable.

Oh, and stop linking to other people. I’m not going to read or watch someone else. Use your own words, or I may think you’re simply an automaton who is incapable of being his own free thinking individual and who has to rely, as a crutch, upon others to do his thinking for him.

Jon,

I suppose you wouldn’t want to do that since you already know everything.

Pretty much.

And no you did not catch me in some error. The government does not own all a person’s wealth, and there is a limit to what the government can take. The Constitution allows Congress to tax fairly liberally, but the limit a government has (even a dictatorship) is directly related to how much its people are willing to have taken away. The people could conceivably allow Congress to tax them at 100%. But that is a near impossibility.

Think for yourself, Jon. Don’t be an acolyte with no free mind of his own.

Dan, why do you treat people so poorly on this blog?

Even if you are right, I just don’t understand why you choose to be so harsh. I’m sure you have reasons for the way talk to various people you disagree with, but that doesn’t mean you are right to be mean-spirited. I wish you would be more civil so your solid thinking and argumentation could come to the surface more clearly. You have great ideas, but your delivery could be improved.

I always like to point out that life expectancy in Western Europe is significantly higher than in the U.S. (for men the worst in Western Europe is Portugal which has same life expectancy as the U.S.) These kinds of posts always degenerate into arguments about wealth allocation and never really focus on health and preserving life on average within a nation.

it is certain that access to health care explains a significant part of this difference. Overall, the net result of our various systems in the U.S. is that we trade life for money.

Here is a link to a recent journal article that shows Stephen’s good government argument has huge effects on human life and summarizes life expectancy vs. time for various countries.

http://ije.oxfordjournals.org/content/early/2011/03/16/ije.dyr061.full.pdf+html

James,

As Paul2 noted, we’re all essentially continuing the same argument in the comments. Here’s what I’ll do from now on. I will completely ignore Jon, because he is a one track record with nothing worthy of my response.

Rule of law dictates that there is equality before the law.

Mike S. #36
I do not think that many individual doctors are captured and not trying to improve the health of their patients. I have seen and heard plenty of no smoking and MADD ads, but very few, if any anti-obesity or anti-diabetes ads. Having lived in West Virginia, I know many of the plagues of the elderly in this country.
Maybe it is because I am not overweight and do not go to the doctor frequently that I do not hear much of the messages that you and Stephan seem to be preaching vigorously here.

Stephen, Where do you classify wealth that comes from passive investments? Is that in the social lubricant category, or is it another?

That is wealth, not income. An entire new kettle of fish is inheritance (including inheriting the results of your own work) vs. production.

You’ve hit one of my long time buttons

You would be a big fan of taxing economic rents. That is a huge area of discussion, usually difficult to apply, though you have found a nice way to do it.

As Stan has elucidated, parts of our government health system are captured by the powerful health care providers. Of course, many of the reasons for a patient to be contemplating dialysis tend to be correlated to not getting the doctor to give you the preferred care. They did not live a minimally healthy lifestyle and were non-compliant with other orders. It is not a stretch for the good doctor to insist on more regimented institutional care, since they are not very good at taking care of themselves. Peritoneal dialysis involves the patient changing their own transfer fluid and requires a little more care of the tubes on the abdomen instead of your arm.

Hmm. I always seem to get into these discussions too late. I would be curious, Jon, to hear your solution to the problem of people whose health is so poor that that they cannot “make free contracts for those services [meaning their potential to labor].” (Asking in genuine curiosity, as I have never really gotten a clear response from libertarians I have asked about this issue.)

It is one thing to be independent when one has good health, a strong back, and the ability to work hard. It is another thing entirely when one has medical conditions that necessitate dependence.

@Stan Beale,

Sorry to hear about your situation. Let me tell you though, we do not currently live under a free market in the medical industry, far from it actually. The article I put down outlines the reasons health care is so incredibly expensive right now. I can touch some points for you.

First, insurance is when you pay into a policy that covers catastrophic accidents. Insurance currently doesn’t do that (unless you have a high deductible plan, which you cannot even buy very high, ours, I believe is 10k, we wanted higher but that was as high as it gets). The current system is socialized health insurance with a ton of regulations. That is why the cost is so high.

Imagine you and your friends want to go out for lunch every Monday. Let’s say some of them you don’t know very well. Now, in order to go to lunch everyone has to pay in the same amount, you cannot opt out of this group or you don’t get to eat lunch. Now, at first, some in the group restrain how much they get for lunch because they don’t want to burden the others. But then some of them get a bunch because they figure their cost is spread out amongst the group. Well, now everyone wants to get more since they don’t want to pay for the “freeloaders” so everyone’s cost goes up. Now, let’s say that when you order your lunch, you don’t even know how much it costs since the true cost isn’t printed on the menu, only part of the cost is printed, and now you have to pay in for lunch ahead of time, if the group goes over then your rate goes up. But the restaurant likes what is going on with your group and gives discounts on their most expensive items so the price is even more masked, because, also, the waiter won’t tell you the cost but just gives you the coupon (the waiter himself doesn’t even know the true cost), and the restaurant starts charging higher and higher prices for “higher quality” food. This is the current system that we live under, it is called socialism, mixed with mercantilism. This is NOT the free market.

In a free market system the prices would go down (normally) and the quality of service will go up. You know you are not in a free market system when prices start to sky rocket, you know something else is going on, like the cost of college tuition.

I encourage you to read the article, it’s long but really gets into the meat of what is going on. In a free market even the poor would be able to afford care.

http://mises.org/daily/3613/The-Real-Right-to-Medical-Care-versus-Socialized-Medicine

@Mike S,

I have friend who is a pharmacist who always complains about those very same points that you mentioned. Of course, he doesn’t have a choice of whether to work with them or not (well, I suppose he could quit his job).

My wife and I were lucky, we got transplants, mine 16 years ago after a nine month wait and my wife”s 4 years ago after an 8 year wait. We are ardent campaigners for Peritoneal Dialysis. What we find is the HMO’s are beginning to go more into it, The Blue Cross types v ery little. The latter tends to contract out to Nephrology groups that have ties to Hemo Dialysis Centers.

My second job after teaching was as a financial analyst and bargainer for the teacher’s union. Contrary to myth, we wanted quality care at the lowest price possible. Lower medical costs could result in higher salaries. The thing that I discovered early on was that almost everyone tries to job the system, what ever it was.

Fee for service plans are haunted by too much medicine. For example one medical plan we turned down had 3X the normal rate for hysterectomies and tonsilectomies. People were over tested (doctors often times had ownership in the labs that ran the tests.

For profit HMO’s often use the gatekeeper system, that is have the GP not send people on to specialists, often by giving them a bonus for not doing it. The result was that people who needed help did not get it.

Redlining. Many insurance programs will not touch certain areas or groups. Too many people in that area or group do not fit their profit model, so do not offer it.

Recision. In some states it is still legal to drop someone from a plan because they now fit into a category that might be too expensive.

Genetic Testing. Currently genetic testing to determine eligibility for inurance is illegal (GINA). However some “free market” groups are against such a ban and would like to see that changed.

The point is that “free market” proposals are generally not beneficial to a large number of people, especially those who are denied insurance or can’t afford it.

We, as a society have to answer the question are we going to have a system that benefits insurance companies or one that benefits all individuals?

One commentator on Fox News game his answer. Handicapped people are costing us too much. Let them go out and “get eaten on the Serengeti plain of life”. That will happen if we choose a truly “free market” approach to medicine.

@Stan Beale,

It’s obvious that you are for socialized medicine and want to use violence to make it so everyone pays for the poor. It is true that the free market truly requires a free market to work, otherwise it wouldn’t be the free market. It is true that the free market would help the greatest amount of people, whereas government forced monopoly will help the least amount of people and cost the most.

Read the article that I gave you otherwise there is not much common ground that we will be able to find. I guess the common ground we do have is that we both wish to help the poor and needy. It is true that there are heartless people out there that don’t wish well on others, like those that wish the poor to die, or those that wish to steal from others for their own benefit.

I gave the example of why the current system of socialized/mercantilist system does not work. Can you refute it? Remember this what the government created (not the free market, this current system would never exist in a free market).

We need true fact based policies based on current science but not force everyone into the same system. Take Head Start for example. Studies show it does not work. Yet the government is putting billions more dollars into it. Obama promised science based policies. Instead he has chosen the route of the elite and given the people more bread and circuses so they can continue their wars of plunder and dominance over the people, just like Bush’s regime.

Thanks for the reply Jon. I am not sure that I agree with all your assumptions, but I find your basic faith in humanity to be refreshing. 🙂

Independent organizations certifying doctors – I could live with that, I think. I am not entirely sold on deregulation lowering prices, though. My experience has been the opposite – everything the government pulled out of became much more expensive immediately. Blame it on price fixing and cartels, if you like (I do), but the price increases were real.

As far as people caring for the poor I would say this – it is one thing to do a fund raiser for an operation. It is another to provide continual support that lasts for decades, especially when one’s illness is invisible (mental illness, fibromyalgia, among others). The stigmas surrounding mental illness, in particular, are powerful and deeply ingrained, and I think that before effective support could be given, that problem would need to be addressed.

As far as the coercive nature of taxation, I have to disagree. I pay my taxes voluntarily because I see it as everyone chipping in so that all of us are taken care of. One can see inefficiencies and flaws in using government as a delivery system, but its uniformity and ubiquity has some advantages as well.

In any case, I do see where you are coming from.

This is why I attack Jon so strongly:

It’s obvious that you are for socialized medicine and want to use violence to make it so everyone pays for the poor.

Com’on guys, you want to continue being insulted like this? This is why you have to hit back so hard against someone like this.

prometheus,

It’s not the issue of whether or not the state has the monopoly on violence to ensure enforcement of social contracts. It’s the “i’m better than you because you obviously are a violent socialist” that comes across in his comments. Disagreeing without being disagreeable is something nice, but methinks you need to direct that at him as well.

prometheus,

guys like the ones over at mises use words like “thieves” and “socialist” and “violence” and “statist” not to be agreeable with those they disagree with. They use those words because they actually believe anyone who supports taxation, particularly a progressive tax, as a thief who uses the violence of the state against otherwise “good” rich people. How could someone reply agreeably to comments like that? Should I be looking for some middle ground? Hmmm, what’s the middle ground between being called a thief and not being a thief? A part time thief? My replies calling them stupid is mild when comparing the implication of their comments calling someone like me a thief. In the grand scheme of things, which is worse? A thief or a stupid person?

@prometheus & Dan,

I think on the blogs the extremist part comes out more in most people, since in real life, if you even get people to talk politics, it usually stops short of a full conversation since people will just walk out or lose their cool shortly into the conversation.

I was talking once on how WWII was a bad war and how we should be peaceful people. Well, there happened to be a WWII person there (I didn’t know) and boy did he get upset. The setting was a group that was going over the constitution (Skousen’s program – I know, liberals don’t like him – but you have to admit his war stance is awesome – I don’t agree with a lot of his ideals but the war one just can’t be ignored) and we decided not to “talk politics”, I don’t know how you don’t talk politics when the subject matter is a highly political document.

People like going where others already agree with them. When they don’t hear that agreement they start attacking the individual rather than discussing the ideas. I have to admit that I have been and will continue to be guilty of this (it would be nice if I were better at containing myself – something to work on).

As for calling people thieves, I don’t know if I actually call people thieves, I just call the system violent and grounded in theft, covetousness, etc. Which, I suppose does imply the person is a thief also, well the scriptures do say we shouldn’t steal, even for food. So, it is a valid point that we need to consider if our actions lead to theft against other people and, if they do, stop that action. The Lord said we should not be respecters of persons and when we put a pedestal up for certain people and say they can do actions that an individual cannot I think that is treaty actions differently than what is done for the individual. Why is it OK for government to steal but not the mob? Do they both not say that their actions lead to peace and safety for the business/individual? I believe they do and that both act in the same manner and both are immoral.

djinn,

don’t forget Thomas Paine:

It is a position not to be controverted that the earth, in its natural, cultivated state was, and ever would have continued to be, the common property of the human race. In that state every man would have been born to property. He would have been a joint life proprietor with rest in the property of the soil, and in all its natural productions, vegetable and animal.

and

[C]reate a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property. And also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age.

djinn,

by the way, the other quote from Thomas Jefferson in your link is also highly instructive:

“The rich alone use imported articles, and on these alone the whole taxes of the general government are levied,” Jefferson wrote in 1811. “The poor man, who uses nothing but what is made in his own farm or family, will pay nothing. (With) our revenues applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.”

That darn tootin’ Marxist!

Taking from the “haves” and giving to the “have nots” or what Jon is calling “covet[ing] and steal[ing] is required by God. The Bible itself, God himself, speaking in Deuteronomy 15:1 says: “At the end of every seventh year you must cancel the debts of everyone who owes you money.” (New Living Translation.” The KJV says:
1 At the end of every seven years thou shalt make a release.

2 And this is the manner of the release: Every creditor that lendeth ought unto his neighbour shall release it; he shall not exact it of his neighbour, or of his brother; because it is called the LORD’s release.”

@djinn,

Not quite:
http://kad.biblecommenter.com/deuteronomy/15.htm

@Joshua,

That is hilarious. It is the government’s fault that their is such an unprecedented gap between the rich and the poor? Only in that the rich have loophole after loophole for being utterly greedy.

Isn’t this what I said? The government favors the rich. In a free market, the market favors those who produce useful things. Stop producing and the market will go to that which is better. Thanks for proving my point Joshua.

Look the free market is based on love. Socialism is based on hate and envy.

the whole irony here is that the Founding Fathers taxed solely the wealthy to fund the country. There was no tax on the poor. Only over time did we go toward the whole “everyone should be taxed” and thus now everyone in America is taxed in one way or another. Gas tax hits the poor more than the rich. Cigarette tax hits the poor more than the rich. But we think it’s okay. Frankly, if we’re going to hearken to the days of the Founding Fathers, we ought then to also consider their position on not ever taxing the poor, but placing the sole burden of the funding of the government of the United States on the backs of the rich, as they wanted, and as they did.

Jon,

“Socialism is based on hate and envy.’

Really, Jon? The 10 happiest countries in the world;

1. Norway
2. Denmark
3. Finland
4. Australia
5. New Zealand
6. Sweden
7. Canada
8. Switzerland
9. Netherlands
10. United States

http://www.forbes.com/2011/01/19/norway-denmark-finland-business-washington-world-happiest-countries.html

It appears that the countries where the people are the happiest have socialist governments and universal healthcare.

Oops, so much for hate and envy……

“the whole irony here is that the Founding Fathers taxed solely the wealthy to fund the country”

I’m for that as long as the other significant part of that is included: ‘only those that own land can vote’. It was put in place to stop people from voting themselves entitlements from the government. If this is what you are saying Dan, I’m with you.

Will,

I’m for that as long as the other significant part of that is included: ‘only those that own land can vote’. It was put in place to stop people from voting themselves entitlements from the government. If this is what you are saying Dan, I’m with you.

Let’s continue with what Thomas Jefferson said:

But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land.

http://press-pubs.uchicago.edu/founders/documents/v1ch15s32.html

Sounds like a great idea to me. Get almost everyone to own a piece of land, and let all the landowners vote? No problem.

Jon, capitalism only exists with all of the trappings you wish to rid it of. Please name a working state with the rules you espouse. And the guy who wrote that Deuteronomy passage explication gave an astonishingly uncharitable reading–his point was “those words don’t mean what they clearly mean.” Not convinced.

A little more Deuteronomy 15, NIV:

7 If anyone is poor among your fellow Israelites in any of the towns of the land the LORD your God is giving you, do not be hardhearted or tightfisted toward them. 8 Rather, be openhanded and freely lend them whatever they need. 9

djinn,

If anyone is poor among your fellow Israelites in any of the towns of the land the LORD your God is giving you, do not be hardhearted or tightfisted toward them. Rather, be openhanded and freely lend them whatever they need.

I’m all on board with that. You keep coming back with stuff that we both agree with. I’m glad your an anarcho-capitalist too.

When you have replicable results, correlation is a big red arrow pointing to causation. Plus, you seem to have misread the physical size of a country– “a small country” –to mean the size of their federal governments; the “size” of a governmental entity has nothing to do with that country’s square footage.

Plus, you are veering off in a frightening direction: you’re not down with the UNITED states? You want to repeal the 14th amendment? Do tell.

djinn,

I took small country meaning “few” people.

14th amendment should be abolished. It has changed the meaning of the other amendments. What part of the government making no law regarding speech do people not understand, that was supposed to be left to the individual states to decide. Now the federal government is making laws about these things since the states are now hamstrung and cannot make their own laws about it. You see, if a state overstepped it’s bounds you were supposed to be able to vote with your feet (I like to call it opting out), but when the federal government gets into everything there is no place to go unless you leave the country, which isn’t an real or desirable option for most (especially for the wealthy since they’ll lose half their wealth, talk about building an invisible wall).

Of course, you know that I would be all for anarcho-capitalism, of course, I don’t think the people are ready for that, I would go for changing slowly to get their. Would probably have to wait for a lot of the gray hairs to die off first. Maybe my grandkids will get to see a day when there are no more slaves.

djinn,

There has to be rules understood by all the people. Most of the people need to live by those rules for society to function. The rules are called natural rights, which includes property rights, etc.

From what I understand Somalia was better off without it’s previous rulers even in a chaotic situation. It may not be nice to liver their still, but if it’s better for the people then good for them. You must remember also that violence in Somalia and the like is propped up by external countries supplying them with guns, training, etc. So would it look much better without those external pressures?

What just happened to Iceland? I don’t know if we are thinking of the same thing. I know they’ve been voting down the nationalizing of the banks debt and other countries have been putting on a lot of pressure on their leaders to subject the people to the rule of the banks.

Look, it’s not incumbent for me to fear what a world without the state would look like. All I know is the principle is the same, people need to be given freedom and liberty. Maybe I wouldn’t have known if the slaves would have died because they were set free or I wouldn’t know if people would die of starvation since the slaves wouldn’t be producing food anymore, etc. I don’t know all the answers, I do know that people were not meant to be enslaved by one another.

They went libertarian with a huge fiat central bank? Yeah, don’t believe that one. Libertarian and fiat currencies is an oxymoron.

Oh, here’s something on that. Just like I thought:

The economic crisis led to a political crisis, with resignations galore. The whining and wailing about the disaster continues to this day, with most commentators blaming deregulation and the free market.

In Deep Freeze, economists Philipp Bagus and David Howden demonstrate that the real cause of the calamity was bad central bank policy. Rates were way too low, banks were too big to fail, housing was implicitly guaranteed, and banks were borrowing short term from abroad to finance long term bonds.

The authors discuss the implications of this maturity mismatching and zero in on the central bank policies that encouraged unsound practices. They demonstrate the cause and effect without a shadow of a doubt, using vast amounts of data and a detailed sector-by-sector look at the economy of Iceland.

What they find is another instance of the Austrian Theory of the Business Cycle, working itself out in a way that is customized for a time and place.

Toby Baxendale writes the introducton to this story that reads like a great novel. It serves as a reminder that central banking policies aren’t just about monetary arcana. They affect our lives in profound and sometimes catastrophic ways.

The Iceland Freeze is one of the great historical cases that makes Mises’s point. Let it always serve as a reminder of what happens when the laws of the market are papered over by politicians and central bankers.

An incredibly selective reading of the Bible that leaves out all the bits you don’t like?

Likewise. I don’t claim to have a complete understanding. Do you? Why do you selectively disregard theft? Why do you associate the need to care for the poor with the state yet all mandates were given to the individual?

Will,

Those that leech of the government in any way (Medicare, Medicade, Social Security, welfare) should lose that right.

We may agree on the land ownership and voting (as long as land ownership is provided to as many people as possible), but stop infusing selfish Randian Objectivism into what the Founding Fathers taught and believed. They would have spit on Rand’s idiotic crap. Read that letter that Jefferson wrote that I linked to earlier

http://press-pubs.uchicago.edu/founders/documents/v1ch15s32.html

Read it carefully. It is not anything close to Rand’s idiocy. Her ideas are poisoning the meaning of America. She is evil. Her ideas are evil. And they should have no place among a Christian society.

Hmm. Two comments to add briefly here. Firstly, Will, I find your use of the term leeching to be offensive. It is dehumanizing and insulting to a large number of people in desperate straits. Are there abusers of the system? Of course. Painting every user as an abuser, however, is not cool.

Secondly, Jon, I disagree that property rights are natural rights, particularly when it comes to land ownership. It is a social convention that many societies have done without.

Thirdly, I am curious as to what percentage you would accept as a majority vote (in favor of taxes, government, etc). 51% is ambiguous, I agree, but what about 80%? Should your desire for a certain form of independence outweigh a clear majority’s desire for a different form of independence?

Interesting discussion. 🙂

@djinn,

Everyone’s ideas of “Natural Law” is different, as attested both by that Wikipedia article and this thread.

That is right. Natural law should be uniform and be derived through sound logic. Many people don’t understand logic though.

Thirdly, I am curious as to what percentage you would accept as a majority vote (in favor of taxes, government, etc). 51% is ambiguous, I agree, but what about 80%? Should your desire for a certain form of independence outweigh a clear majority’s desire for a different form of independence?

There is not amount of people that can take your rights from you. You are the only person that can sell your rights (even into slavery). Now, people can use peacefully means to “change” your mind. I like to call this the shaming principle I derived from what happened between Cain and Abel.

Behold, thou hast driven me out this day from the face of the earth; and from thy face shall I be hid; and I shall be a fugitive and a vagabond in the earth; and it shall come to pass, that every one that findeth me shall slay me. And the Lord said unto him, Therefore whosoever slayeth Cain, vengeance shall be taken on him sevenfold. And the Lord set a mark upon Cain, lest any finding him should kill him.

In other words, it was the people that “shamed” him to leave their people because of his wickedness.

Once you vote away the rights of the individual there is no individuality any more. See:
http://mises.org/daily/4723/No-Treason-no-1

Also, if a majority want to live a certain way they can, they just can force others to do the same. What they can do is purchase land and create contracts that say this is what rules need to abide by in order to live in the area, break the rules you are out or punished. They can also allow people into the society that don’t abide by the rules (see panarchy).

So you could have your utopia and I could have mine. But property rights are very important for this to work. Also, the land needs to be cultivated or used in order for someone to lay claim on it. Otherwise it is not rightfully that persons.

Mike,

So, at the end of the day, however much you hate Rand, any viable solution MUST include a fair amount of her ideals – even to pay for the social programs she was against.

What exactly does she offer that someone else has not? The only thing that is overridingly her own idea is selfishness, which goes contrary to the Gospel of Jesus Christ, and to the intent and creation of the United States of America by our Founding Fathers. There is nothing else found in Rand that you cannot find elsewhere, Mike. She is a poison that will destroy our country.

Mike,

Do we support the candidate that wants to “tax the rich” and “expand/protect entitlements”?

I’m gonna go with Thomas Jefferson:

“The rich alone use imported articles, and on these alone the whole taxes of the general government are levied,” Jefferson wrote in 1811. “The poor man, who uses nothing but what is made in his own farm or family, will pay nothing. (With) our revenues applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.”

Jon, bring it. Natural Laws. Using logic.

prometheus

“Firstly, Will, I find your use of the term leeching to be offensive”

Good, that was the intent.

I am offended by the 14 trillion dollars in general obligation debt stemming from these social programs; and, the 40 trillion in unfunded obligations from these short sighted programs. They have bankrupted our country and will (or already have) cause us to lose our status in the world and lower our standard of living – Especially, for those dependant on these programs.

Mike S,
#134.. Excellent analysis.

Dan,

See Mike S #134, which is and honest and intelligent analysis. The only way we are going to solve our economic problems is to understand what Mike has represented in his commentary. Your continued fight on this issue makes me conclude you are either not intelligent or honest enough to understand this issue.

This is why Will should be derided:

“Firstly, Will, I find your use of the term leeching to be offensive”

Good, that was the intent.

Thanks for the reply, Jon. The thing that really jumped out at me was this: “Also, the land needs to be cultivated or used in order for someone to lay claim on it.”

I see that as a false assumption. That was the excuse the Europeans used to displace the Native Americans. First, because one’s definition of “use” may vary – a hunter/gatherer society doesn’t “use” the land the way an agrarian society does. Secondly, land does is not used just by humans. We live on a planet with billions of other creatures, who all desire survival and continuation of species. (I am not suggesting an extremist stance here, simply pointing out that we are not alone, and our treatment of other life forms reflects our moral development.)

I will agree that ownership of one’s body is as close to natural law as it gets. I also agree that access to the means of survival is a natural right. I see the accumulation of property and resources (beyond a (fuzzy) point) as a direct attack on that right of access. Landed nobility versus small family farms. (I think that we both perhaps share an innate distrust of monopolistic practice in general, although we may differ on exactly what exceptions may be made.)

Anyway, not as clear as I wanted that, but moving on … 😀

Agreed, djinn. I think there are some services that simply require governmental administration and regulation.

If you guys want to live in a world with utilities (gas, water, electricity, sewer) then I suspect you want governmental utilities that charge at something closer to cost than that which the market will bear–i.e., monopolies controlled by the people. Phone would be nice too. Which is why the US has the highest phone rates in the Western world–not priced as a utililty.

The reason prices are higher than they should be is because of regulations. electric companies are highly regulated. Phone companies are highly regulated. Sewer is owned by the government. So is water (except where we live, we have a well – not government medicated water for me!).

But really. I pay ~$40/month for DSL. I get any TV/movies I want off of it for free. I get conferences for work off of it. I get news/weather. I get to research from it. Socialize and talk to people about politics, even though all of us will come out still believing what we already believe (I do learn a lot from the discussions though). I get to learn classes from it from MIT et. al. for free. I get my phone for free (google voice – I did pay $44 for the OBI100 device). I have a prepaid cell phone that I use when I’m out of the house, T-Mobile, $0.10/minute – don’t go through very many of the minutes though. Really, I think I’m getting a pretty good deal. I wonder what wonderful kind of deal I would get in a truly free market!

@Dan,

Good job boy. You are correct, free market doesn’t mean they are free. Free market means that products will go higher in quality (if that is what the people want) and prices will go down, for most things. It’s all basic economics, more supply and low demand, means low prices and visa versa.

wow man, you are so condescending. it’s amazing how much you think you are right and everyone else is wrong.

I figured out today why there are so many statists out there.

I tried burning my burn pile today. In order to do so I have to get official permission to do so. I filled out the form. Then I have to call right before I start the fire. I called. They said no fire today, even though the wind is calmer now than it has been for over a week (really no wind at all).

What would a statist do? Well, right across from me in a the field they have a huge fire going on right now. My neighbor behind me (a city councilman), who usually supports the big government republican people (as opposed to the republicans that are for smaller government) had a fire going on when it was super windy, I thought he was going to burn down his garage.

My aunt, who is a true liberal through and through (Obama can-do-nothing-wrong type) has said the same thing as these actions show, that she will not obey a law that she doesn’t like.

So that is probably why there are statists, because they don’t believe in following and obeying the law when it applies to them. Whereas those that do believe in obeying the law when it applies to them don’t want more laws and regulations, because they will actually try and live by those laws! I know it’s not that simple but man, it sure feels like it some times.

@Stan Beale,

You assume there will be no rules in the free market, in a true free market there are rules because property rights need to be respected in order for a free market to exist.

Your list list things that are problems created by regulations not the free market. All or most of them have been refuted before. If you are interested in a free market perspective of the issues you listed I’ll find you articles/studies that refute your list. If you’re not interested then I won’t waste my time.

I guess it is just a matter of what you believe. Is everyone equal before the law or not? If everyone is then there is no need for regulations. Even if you accept the need for government by force there is still no need for regulations if laws are equal for everyone. Like, respect of contracts. Respect of property. No lying.

@Dan,

“There have always been slaves, why pine for a world without slaves.” Well, Dan, because I believe that there could be a more loving world where everything is done in the name of peace. A world where the golden rule is truly applied and everyone adheres to it. Sorry if I pine for a world without war and lyings, etc. But I believe in humanity and that one day we can achieve it, as long as people are willing to know the principles and seek after them.

If you are interested I could post an article on sweat shops, it is more complicated than “the government did it” or the “free market did it”.

I know correlation doesn’t imply causation but:

A new study, published in Human and Experimental Toxicology (http://het.sagepub.com/content/earl…), a peer-reviewed journal indexed by the National Library of Medicine, found that nations with higher (worse) infant mortality rates tend to give their infants more vaccine doses.
—–
The mean infant mortality rates of all nations within each group were then calculated. Analysis showed “a high statistically significant correlation between increasing number of vaccine doses and increasing infant mortality rates.”
—–
Nations with higher (worse) infant mortality rates give their infants, on average, more vaccine doses. This positive correlation, derived from the data, elicits an important inquiry: Are some infant deaths associated with over-vaccination? Is it possible that some nations are requiring too many vaccines for their infants and the additional vaccines are a toxic burden on their health?

Don’t know if that means anything, but you understand why I question vaccines, or at least the overuse of them.

http://www.naturalnews.com/032306_vaccines_infant_mortality.html