Rebirth of Reason

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Saturday, January 24, 2015 - 8:58amSanction this postReply

Excellent article, Joe.

...people often treat free markets as some kind of magical process, guaranteeing efficient results no matter the circumstances.



Joe's article details how the a market's efficiency is effected where people's choices are limited by government interference.


The efficiency is also reduced from some theoretical level of perfection by mental/emotional factors that shape the specific choices made by individuals. This is just another aspect of the context within which efficiency can be judged. For example, the current crop of novels published will reflect not the best that could possibly be available under any circumstance (assuming zero government interference just for the purpose of looking at this), but rather will represent the best that could be available given the specific demands of the customers (said demands being driven by mental/emotional factors).


Just saying that we (the society, the culture) get the products and services that we deserve (to the degree the government doesn't interfer) - similar to that saying that a people get the government they deserve.


This isn't necessarily an important point, and it is certainly an obvious one.  I only mention it, because it fits Joe's theme that a free market isn't a magical process - it is tethered in the reality of choice (both the freedom to choose, and the mental/emotional quality of the choices that get made)


One of the benevolent aspects of free market activity is that it is more likely to lead, over time, to objectively superior mental/emotional factors at work in the choices made just as it leads to better products and services to choose from.  People and products evolve when the government isn't interfering.

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Saturday, January 24, 2015 - 10:55amSanction this postReply

Irrational people make irrational choices.  It really is not the hovernment's  role to hover over us and nanny people into making "better choices".

I received a funny email that may or may not be true but sums it up aptly.

"Back in the 90's the government seized the Mustang ranch in Nevada for tax evasion.  As required by law the government was required to run it.  It failed and they closed it.  

Now we are trusting the economy of our country, the banking system, the car industry and healthcare system to the same nit-wits that couldn't make money running a whore house and selling whiskey?  What the hell were we thinking!?


(Edited by Jules Troy on 1/24, 10:56am)


(Edited by Jules Troy on 1/24, 10:58am)

Post 2

Saturday, January 24, 2015 - 1:36pmSanction this postReply



I agree.  When I was pointing out that the average level of intelligence/knowledge/rationality effects the choices made and therefore keeps a free market from providing "perfect" products or services (whatever "perfect" means in this context), I was NOT advocating or excusing government interference.  

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Saturday, January 24, 2015 - 5:01pmSanction this postReply

I know man.  You are pretty clear on your points always.

Post 4

Monday, January 26, 2015 - 5:43pmSanction this postReply

Thanks, again, Joseph.  I agree 100% with your point about utopianism. 

One rebuttal often made is that we don't have a genuinely free market. There is plenty of government intervention of various types. So when something bad happens, you can blame it on the government intervention. This is true, but with a description of the details, it sounds a lot like supporters of communism who say it would work if practiced consistently, but that's never been tried. 


Instead of calling it "the free market" just call it the market.  As you argued, as individuals people always will seek to maximize their gains and minimize their losses. They will react to government controls.  How they react is also individualized.  


You pointed out that they will flock to depressed prices and avoid the prevention of profits.  You did not address rent-seeking in its many forms.  Some will have the resources to do more than react: they will create the problem. (Goldman Sachs comes to mind).  Others will react in large ways with hefty leverages. (Elon Musk is an example of that.)


Still others will find their own personal advantages in the regulations. In 2013, I took a tax preparation class from Jackson Hewitt, which was founded by former seniors from H & R Block. They found profit in government regulation.  Accounting today is largely that: from taxes, to Sarbanes-Oxley and HIIPA, etc., etc.  Some years back at a mall in Lansing, a young woman just graduated from law school and not yet on the bar, opened a paralegal shop, helping people fill out forms. A committed and consistent libertarian or Objectivist could sell those kinds of services.  Private companies that contract to run public schools are another example.  We all could suggest many others.


The analysis must always come back to individual morality.  True, we never had "perfect" capitalism, or communism, or even perfect feudalism, or Athenian democracy, or whatever. The salient question is how the individual chooses their own standards and values.  When very many people choose well, we have good times, albeit, not "perfect".  


Do we want people creating, inventing, making, and producing, or do we want people filling out forms, going to war in large and small ways, and otherwise squandering human potential.


(Edited by Michael E. Marotta on 1/26, 5:47pm)

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