Theory of Capitalism collapses

[_Kevin Graham]

More references to Droopy's only source in the universe, I see. "Mises.org", of course, the home of well-refuted, well-outdated and fringe economic theory. I've dealt with Droopy's ignorance on this subject in the numerous threads linked above and elsewhere. No need to rehash it all for his benefit, since that would presume he were interested in learning. Can't teach an old dog new tricks. I learned this the hard way with my step father. Old farts generally want the "answers" to everything to found in the prevailing wisdom of their day, hence, Droopy's hard-nosed infatuation with Mises, Rand, Skousen, etc.

[_Kevin Graham]

More references to Droopy's only source in the universe, I see. "Mises.org", of course, the home of well-refuted, well-outdated and fringe economic theory. I've dealt with Droopy's ignorance on this subject in the numerous threads linked above and elsewhere. No need to rehash it all for his benefit, since that would presume he were interested in learning. Can't teach an old dog new tricks. I learned this the hard way with my step father. Old farts generally want the "answers" to everything to found in the prevailing wisdom of their day, hence, Droopy's hard-nosed infatuation with Hayek, von Mises, Rand, Skousen, etc.

You should know something is intellectually amiss when your "think tank" is based in Auburn Alabama. I was born less than twenty minutes from there, and can assure you that aside from a couple of Waffle Houses, a veterinarian school and a skating rink, there are few signs of life. But intelligent life is even more scarce.

[Guest]

As for the rest of your post, Droopy, I'll just say that your radical individualism leads you to miss the role one's community plays in structuring one's opportunities and incentives.

I am not a "radical individualist," but a determined opponent of such. I am a libertarian/conservative, a constitutionalist, and a believer in limited, rule of law grounded government. For some reason, you have confused my views with those of libertarian anarchism, to which I am in significant opposition.

I don't quite understand what you mean by the statement "you to miss the role one's community plays in structuring one's opportunities and incentives." In describing the "structuring" of opportunities and incentives, you have only thus far mentioned government, not "communities."

In your mind, is government and human community identified in some manner, or is a community (in and of itself or through the state) an entity with will and purpose capable of "structuring" (otherwise known normatively as "social engineering) "opportunities" and "incentives" in a social order comprising numerous individuals manifesting a plethora of skills, aptitudes, predispositions, talents, and desires. How can "the community" comprehend, classify, assess, categorize, and reduce to the kind of simply, standardized norms required in public policy, the vast (and polymorphous, in many cases) cornucopia of human attributes that determine our vocation or profession in life?

I'm still not at all sure I understand, from your arguments thus far, why it is necessary for the state to be involved in this kind of social architecture at all when human beings, in a socially and economically free environment, with no artificial restrictions to entry into a field of choice, can make these decisions for themselves.

It would be folly for government to ignore the legitimate roles it can play in this regard. A good example is universal education. Universal education is strongly correlated to economic equality.

"Economic equality" is only a primary value from a specific ideological perspective. I see no reason whatsoever to pursue it as an overarching value. Much more important is the freedom to prosper and blossom at whatever level, and in whatever field within which one can qualify oneself, without artificial barriers to entry and without the plundering of much of one's earned income by the state for purposes, many of which one may be deeply opposed, philosophically and morally.

The important thing, it would seem to me, is a society in which the opportunity for prosperity (however one defines it) is always expanding and present for all, relative to aptitude, talent, and inherent capacity, and the provision of welfare services (based upon gospel principles) for those who "fall between the cracks."

"Equality" in any literal economic sense represents the imposition of a body of metaphysical/philosophical assumptions upon the subject who's assumptions have to be swallowed and assimilated first, before such a concept can be accepted as a legitimate concern.

If it is "statist" to think a government should ensure the education of all its citizens, then I proudly claim the label.

The government cannot possibly "ensure" the education of all its citizens, let alone one of them, as becoming educated is a purely personal, individual phenomena.

Libertarian laissez-faireism makes for wonderfully elegant theory, but things are a little more complicated than all that in practice.

Calling something "complicated" is a nice way of avoiding actually making an argument and dismissing alternative views without logical argument or the adducing of evidence. Nothing can be called oversimplified unless it has, in point of fact, been shown to be wrong, and you are far from showing conservative/libertarian economic ideas to be wrong. The irony here is that the systemic rationality of markets, and of a complex society generally, is incalculably beyond the grasp of any academic models, whether sociological or economic, and the failure to grasp this clear and unambiguous fact has been the cause of much of the untold human calamity and smothering of human potential over the last two centuries.

[_CaliforniaKid]

Which only means that the choice itself, while "rational" in some sense known perhaps only to the chooser, is only rational in that sense.

It is true that only the chooser knows his perceptions and preferences unless he communicates them to other people (as most of us do). The basic rational processes at work, however, are known and generalizable.

For example, analysts at the National Defense University often consult experts for information on the preferences and perceptions of major players in a negotiation scenario. With that information, they then construct a computer model to predict the outcome of the negotiations. Their predictions are highly specific, and turn out to be accurate about 80-90% of time. The reason they can predict outcomes so accurately is that all the players "process" their preferences and perceptions in basically the same way.

Here's an article that might interest you, about how the Pentagon is applying these sorts of computer models on a much larger scale with very impressive results.

[_CaliforniaKid]

Droopy,

Government is a social institution-- an institution of the national community. Like other social institutions (such as churches, clubs, schools, gangs, and families), government structures norms and opportunities for community members. Even laissez-faire liberalism is a normative structure-- one based on pluralism, local control, private property, and purportedly "natural" capitalistic processes. I find much to admire in this structure, but I'm critical of the assumption that capitalism is natural and perfectly self-regulating, and I also believe a few other structural norms should be added to the list, such as public health and equal opportunity.

Peace,

-Chris

[_CaliforniaKid]

Aggregates don't make economic or any other kinds of choices. It is the systemic dynamics and properties of the free market as the manifestation of countless, varied, changing, calculated individual economic or other kinds of decisions that actually matter, not the abstraction of the aggregate - one of the central fallacies of Keynsian economics.

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

[_Droopy]

1) Corporate waste and abuse are at least as prevalent as government waste and abuse, especially when corporations are unregulated and unaccountable.

This claim calls for a great deal of compelling empirical evidence to back it up.

2) Since it takes money to make money, economic opportunity under free market capitalism is decidedly unequal. The rich get richer, and the poor stay poor.

This is pure nonsense, and easily dispelled by readily available data. Any of Dr. Thomas Sowell's books, written any time within the last twenty years on economic subjects will do, but for a brief but definitive empirical refutation, you may repair to The Vision of the Anointed, in which he explodes this myth with measured ease.

The entire claim is one of the few remaining leftist superstitions left over from another era that western intellectual elites cling to like Linus to his security blanket, even in the face of clear and easily obtainable empirical evidence to the contrary. The real problem here is that, in a fairly free, capitalist economic order such as that in the U.S. (and especially the U.S.), The poor become relatively richer over time as the economy grows, as inflation is reduced, as taxes stay low, and as competitive markets make the plethora of inventions and technological innovations that, in the beginning, are only available to the middle and upper classes, available to the lower classes, including to many of those considered "poor."

http://washingtonexaminer.com/node/69901

An average of about 50% of a rich person's economic advantage is perpetuated to his or her heirs. This means, in effect, that free market capitalism leads to growing economic inequality and concentration of wealth in the hands of a few.

Which heirs (assuming this claim is empirically supportable) will probably, unless they go into politics, perpetuate the creation of jobs, opportunities, and ecomomic expansion for others as well as in a net sense for the nation as a whole.

3) The free market does correct itself, but when these corrections are left unregulated they can come in the form of major "shocks" that are very difficult to recover from and may even result in a breakdown of law, order, and basic services.

Major shocks to the economy as a whole, such as the Great Depression, the economic collapse of the mid seventies to early eighties, and the present massive recession, are not created by free markets, but by government intervention in them, the most important being the manipulation of money and credit under the auspices of Keynesian theory, high progressive taxation, Protectionism, and uncontrolled, oppressive business regulation.

The last major, society-wide breakdowns in law and order, beginning in the late sixties and lasting into the early eighties (including the the large scale civil unrest, rioting, and general civil disorder attentent to the cultural revolution of the roughly 1968 to 1973 period) occurred in times of unprecedented prosperity and rising economic conditions for all, including the poorest of the American poor.

The massive race riots of 1966 and 1967 occurred after the Civil Rights Act of 1964 and the inauguration of the Great Society and its vast social welfare spending.

[_Droopy]

Granted, it was the conservative Theodore Roosevelt who pushed the anti-trust regulations through Congress, but the Republican Party exacted its revenge and kicked him out, and TR went on to become a leader of the progressive movement. So I am claiming him for liberalism, too, because he eventually saw the light. :-)

TR was not a conservative, but an early Progressive, as was Wilson (to a much greater degree) and FDR (again, to a significantly greater degree, at least given the three terms he had to make his political preferences clear).

You are equivocating in your use of terms here by using the term "conservative" within centennial time frames within which it, like "liberal," have been radically altered in their meanings.

[Guest]

Chris, with all respect you are not in the business world are you?. I am a project manager for a corporation that deals with public agencies on a daily basis and waste and mismanagement is at a level that is unexplainable, it is staggering at government waste and incompetence, again I deal with it daily. When waste exceeds the ability to survive in the corporate world, we simple fail and go under ( unless bailed out by tax payer $), if waste is abundant in government, raise taxes.

Precisely and exactly. When waste occurs in the private sector, the systemic forces of the market discipline that business entity until it changes its ways or disappears. The incentives within the corporate, or small business world, are to conserve resources and allocate them wisely and resourcefully as dictated by the preferences of the market. Within government, the opposite is many times the case; waste, fraud and abuse are incentivized by the very nature of government bureaucracy and the political motives that drive them.

I have failed to work with a government employee yet that has to worry about a profit report, if they run out of money in their budget for a project due to mismanagement and 'under-sight', they simply don't pay and pass the buck, and they keep their job and retire at 55 with 90% of their pay, buy a motor home and live a pretty secure life. The average government employee I deal with care about two things...3:30 (when they go home), and 55, when they retire.


If this might sound like sour grapes...it is. LoL

The faith of people like Chris in the halo shrouded Anointed in government agencies and bureaucracies, ever watching over us in their ever increasing, scientifically modeled benevolence, all the while "structuring" our incentives and opportunities for us, is...dusturbing.

It has a long pedigree of failure, but this does not ever seem to make an impression on new generations of "The Anointed."

[_Droopy]

What I believe in is a legitimate role for government in regulating public health and the economy, and making sure that basic services and basic economic opportunity are available to everyone.

Except for the last part about "opportunity," none of the above are ultimately compatible with a free society with a limited government of few and enumerated powers, as the Constitution provides. This is the primary reason the Constitution provides no means for the government to regulate the economy at all, save for the collection of minimal taxes (through indirect means, without income or payroll taxes of the modern kind), regulation of foreign trade, and a few other points.

I have yet to see a compelling logical argument or a shred of historical or empirical evidence that government has anything approaching the competence or knowledge necessary to manipulate, control, or regulate even a fraction of a complex, modern economy, let alone the entire systemic matrix.

The very conservatism that makes democratic governments wasteful and slow

This slowness is an inherent aspect and feature of the Constitution as written and one of the major protections of our unalienable rights and individual liberties. That you wish to dispense with it is telling, no?

Democratic governments are likely wasteful not because of their conservative elements, but because they are governments per se, with all this implies as to human nature and the incentives and motives that animate it.

Unlike profiteering corporations with no accountability to the public,

This is, at all events, a retreat from serious intellectual discourse on the subject of economics, and requires an essay length response, which I do not at this time desire to launch into, given the hour.

democratic governments cut fewer corners and are more careful to avoid abusing and exploiting people. A successful economy needs both the dynamism of the free market and the restraint of regulatory agencies to channel that dynamism in a constructive direction.

Always in time, the mask of benign, well intentioned government guidance comes off and the mailed fist appears - as it always must - as we find that the Ruling Class and the apparatus of coercive force that is the state seeks to "channel" our personal choices, desires, and interests for us, in a direction they (and Chris Smith) deem "constructive."

This is why I love political philosophy. It is, indeed, a window into the soul, perhaps more so even than theology itself.

Its