Re: Will the free market solve everything?

Michael Lorrey (retroman@tpk.net)
Tue, 25 Feb 1997 20:35:45 -0500


bill@iglobal.net wrote:
>
> > From: Michael Lorrey <retroman@tpk.net>
> > J. de Lyser wrote:
> > >
> > > At 01:37 23-02-97 +0000, william kitchen wrote:
> > > >The standard Libertarian (and Republican) belief is that free
> > > >market economies inherently favor the smartest, hardest working
> > > >entrepreneurs and best products. This is true. But they also
> > > >hold a belief that this principle causes free market economies to
> > > >be inherently stable and fair. This is not true. There are
> > > >other

I would also differentiate between Libertarians and Republicans.
Republicans are statists and mercantilists, the opposite of
libertarians. They also let a heavy amount of religious dogma to hold
sway over principles.
> >
> > It is not true that they hold this beleif. Libertarians beleive in
> > equality of opportunity, NOT equality of result. Libertarians
> > beleive in economic forces unleashed to allow natural selection to
> > proceed unimpeded to improve the human condition.
>
> An equally irrational belief. It is doubtful that you can show a
> case in which a pure free market economy has actually improved the
> human condition for more than few decades before producing a
> condition in which the wealth becomes so severely imbalanced that
> those who are not already amongst the wealthy elite have little
> opportunity for advancement regardless of their ability or
> willingness to work. A situation that does not produce equality of
> opportunity, and that does not improve the human condition.

considering that true free markets have yet to accrue ANY history, your
assertion is true, but only due to a lack of history. Here we must rely
on simulations unless we actually jump in with both hands. I would say
however that any imbalance is not a matter of free markets, but
government/mercantilist collusion to bias the market in favor of those
in power.

What you see as the human condition is the every day living conditions
of the average man, while I look at it as a more long term trend toward
allowing the market to maintain evolution's pace on humanity, rather
than using a controlled market to dumb down the genetic pool by coddling
the lower end of the bell curve. I see progress as an effect of
evolution on improving the average quality of the stock, rather than
cultivating the genes of the lowest quality strains, as the current
welfare state does.
>
> An op-amp circuit with strong positive feedback will tend not
> towards balance, but to lockup in either an extreme positive or
> extreme negative state. Ungoverned free market economies also have
> strong positive feedback, and share this same characteristic.
> Imagine each individual as an op-amp. Those who are wealthy
> (positive) beyond a certain admittedly fuzzy threshold will tend to
> become more wealthy (extraordinary stupidity can change that, but
> I'm talking about a tendency, not an outcome that is certain in
> every case), while those below that threshold will tend to lose
> ground. The further you are from either side of that threshold, the
> less likely it is that you can cross it by your intelligence and
> effort alone (or lack thereof, in the case of crossing the threshold
> in the negative direction).

This is true, any mechanism operating on positive feedback will
occillate out of control, however, only when the feedback mechanism is
opposed by an asymptotic function, like the employment utility curve.
Mechanisms operating on positive feedback do occillate out of control
when operating in a closed environment. Given unlimited resources,
positive feedback does not cause such behavior, so once space travel and
nanotech becomes practical, we wont be constrained by such limitations.
>
> > THis is why
> > libertarians tend to be highly intelligent, educated, and average
> > high incomes, as they practice what they preach. THis unfortunately
> > limits the growth of the party, as the principles of libertarianism
> > tend to disfavor those with deficiencies which inhibit economic
> > excellence.
>
> Your superiority complex is unimpressive. I will be happy to discuss
> and debate issues with you since you are intelligent enough to have
> ideas worth thinking about, and to present an intellectual challenge
> for those matters on which we disagree. But I have no interest in
> watching you stroke your ego.

No ego ruffling there, simply stating facts reported by surveys of
libertarians. Notice I didn't say they were attractive.
>
> > I personally tend to think that children should be raised in equal
> > social circumstances, to allow as close to an equal level of
> > opportunity as possible, but once they reach whatever is considered
> > "adulthood", they live by TANSTAAFL.
>
> Hmm... That is an interesting idea. I'm not sure whether I can
> agree with it or not. It seems like something that would be a good
> thing if it could be made to happen, but might be extremely difficult
> to realize. Perhaps you have thought of some way to bring this
> about? Would this be an area where the traditional a-c opposition to
> welfare might be relaxed?
>
> This gets back to that issue of equality of opportunity vs. equality
> of result. I think we are in at least partial agreement on the
> concept, just not on how to achieve it.
>
> Society does not owe anyone a living, but it does owe everyone an
> opportunity to be productive and to be fairly rewarded for that
> productivity. Proposing the idea that society "owes" anyone
> anything will probably ruffle some feathers, but consider: There is
> little purpose in constructing a society of any kind if not for the
> benefit of the members of that society. I construct machines to be
> my slaves, not to be enslaved by them. The same should be true of
> anything we construct.
>
> > As libertarian as I tend to be, I still have had enough personal
> > experience with people I call "trust fund babies" to consider huge
> > inheritances as a net evolutionary disadvantage.
>
> Then perhaps we are not as much in disagreement as it might appear
> on the surface. I simply propose that such problems are too often
> glossed over, and that avoiding such issues cannot come to any
> productive end.
>

Am totally against confiscation of assets one earns. Confiscation of
unearned income or assets is not a problem with me, since such assets
are unearned, they never belonged to the taxee to begin with.

The massive accrual of wealth that you describe, Bill Gates
notwithstanding, is typically a function of continuous inheritance,
generation after generation, than individuals monopolizing a marketplace
or asset base. Such market/asset consolidation usually takes two to four
generations.
> >
> > This is a decent idea so long as you don't propose taking wealth
> > away from people.
>
> My point was only that free markets produce beneficial results when
> they start with a reasonably flat distribution of wealth. I do not
> propose that it would be beneficial to force them into that
> condition.
>
> However, I cannot say that taking wealth away is unacceptable in
> every possible case. If an economy becomes so imbalanced that one
> man owns everything, do the rest of us simply starve to death? Such
> a situation would most likely be corrected by a violent revolution.
> Probably well before it became that extreme. So when should the
> killing start? 20% with 80% of the wealth? 10% with 90%? 1% with
> 99%? One guy with everything?
>
> Economic polarization cannot go indefinately without some kind of
> corrective measure. If not by application of law, then by collapse
> into depression or by violence. But by some means it will end. Just
> like the op-amp with positive feedback, extreme polarization is the
> natural tendency of a pure free market economy. Then it destroys
> itself and everything must start all over. An endless oscillation
> that starts by building up from nothing, a period of prosperity with
> a large middle class, a period of increasing polarization and
> increasing unrest, then collapse into depression (or bloody
> revolution) and it all begins again.
>
> This is my model of what would happen with an economy that has zero
> governmental regulation. I am not accusing the rich of being evil.
> The victors don't have to be monsters (though there is no reason
> they can't be). It does not require any criminal wrong doing. No
> one has to be forced or deceived into making a spending decision.
> Just successful business practices carried to their ultimate
> conclusion. The inevitable outcome of any successful implementation
> of the anarcho-capitalistic ideal. Maybe I'm wrong. I'm sure many
> will disagree with my model. I doubt that there is any historical
> precedent that can confirm or disprove since such a system will
> likely not complete a single cycle of the oscillation without being
> altered in some way during the period of unrest (i.e. government
> regulation and/or introduction of some element of socialism) making
> it impossible to fully isolate the cause even if it does follow
> through to a revolution or a collapse into a depression. Many would
> blame the increasing governmental regulation for the collapse. I
> tend more to blame the impending collapse for the increasing
> government regulation. Last resort measures in an attempt to save a
> sinking ship. I'd be happy to hear any alternative models you might
> want to offer. And any reasons that you think my model is wrong or
> that some other one is more accurate.
>
> > Making everyone start at zero once they reach
> > adulthood is what I would call equality of opportunity, but
> > redistributing the wealth isn't, its penalizing success.
>
> This reminds me of an interesting idea that was proposed as a thought
> experiment by a man I used to work with. Put aside your distaste for
> taxation for a moment and contemplate the outcome of this: A 100%
> post-mortem tax, but no other. It all goes to the state when you
> die. Attempts to cheat the system by giving substantial gifts will

Of course there could and should probably be minimal levels of gifts,
like the present $10,000/yr gift allowance, which is useful for
educational and entrepreneurial seed money, but not to accrue vast
transfer of assests.

> result in having the tax applied early, effectively pressing the
> reset button on your life. You are entitled to keep and enjoy
> whatever you rightfully earn (outright theft and fraud would still be
> illegal) within your own life, but are entitled to nothing that was
> earned by anyone else regardless of relation, except perhaps that the
> revenue from the post-mortem tax might be used to provide education
> prior to going out on your own, and perhaps a few other public
> services that would have to stay entirely within budget.
>
> I realize that the possibility of extended lifespans screws up this
> scenario, but it is interesting to think about none the less.
>
Extended lifespans only stretch out the time to confiscation, allowing
greater capital appreciation. As an example, Bill Gates has publicly
stated that he plans on giving all of his wealth away by the time he
dies.

here's another idea derived from my Uncle Marty's concept of how life
should be. He thinks that people should be retired until they are 45,
then they should work until they die. He figures most of the stuff
people wait until they are retired to do, is too strenuous to do by the
time they get there, so best do it in youth. Based on this idea, and our
present economy that is increasingly putting a premium on skill,
knowledge, intelligence, etc., that people should start working when
they finally start becoming skilled enough to make significant
contributions. Prior to that, education, exploration, etc. should be the
norm.

-- 
TANSTAAFL!!!

Michael Lorrey ------------------------------------------------------------ President retroman@tpk.net Northstar Technologies Agent Lorrey@ThePentagon.com Inventor of the Lorrey Drive Silo_1013@ThePentagon.com

Website: http://www.tpk.net/~retroman/ Now Featuring: Mikey's Animatronic Factory http://www.tpk.net/~retroman/animations.htm My Own Nuclear Espionage Agency (MONEA) MIKEYMAS(tm): The New Internet Holiday Transhumans of New Hampshire (>HNH) ------------------------------------------------------------ Transhumanist, Inventor, Webmaster, Ski Guide, Entrepreneur, Artist, Outdoorsman, Libertarian, Arms Exporter-see below. ------------------------------------------------------------ #!/usr/local/bin/perl-0777---export-a-crypto-system-sig-RC4-3-lines-PERL @k=unpack('C*',pack('H*',shift));for(@t=@s=0..255){$y=($k[$_%@k]+$s[$x=$_ ]+$y)%256;&S}$x=$y=0;for(unpack('C*',<>)){$x++;$y=($s[$x%=256]+$y)%256; &S;print pack(C,$_^=$s[($s[$x]+$s[$y])%256])}sub S{@s[$x,$y]=@s[$y,$x]}