Re: Gov't loves Gov't

Warrl kyree Tale'sedrin (
Fri, 23 Jan 1998 10:48:35 +0000

> From: "Craig Presson" <>

> On 23 Jan 98 at 6:10, Charlie wrote:
> [...]

> > I dunno. The free market _may_ be the optimal mediational method,
> > for all I know; but what I see here isn't people trying to _prove_
> > it, or, alternatively, trying to invent something better: what I see
> > is people taking it as a forgone conclusion.
> >
> > This is a blind spot. You have been notified.
> Oh, now the members of the list are tasked with advancing the state
> of the art in economics. Do we even have an economist on the list
> anymore? Or anyone who can speak for the field? I was under the
> impression that there were "proofs," to the extent economics supports
> such, of optimality of free markets.
> You're suffering from a dislocated onus here. The evidence of failure
> of non-free-market solutions is abundant. Yes, there *may* be a method
> of computing something more optimal, under some set of assumptions, in
> some cases. There could even be a general method that allocates costs
> incrementally better than a free market (I suspect you'd have to
> start with some definitions of optimality that assume what you're
> trying to prove, though). There's not even a candidate idea, after all
> the statist schemes that have been tried. Without at least the germ of
> a workable idea, you're asking us to look for a chimera.

It isn't at all hard to come up with a system that works better in
theory than free market capitalism works in reality.

The problem is in implementing the theory. Every such system I have
seen works great if the average joe on the street is omniscient and
omnibenevolent (omnipotent is not required), or if a sufficient
number of such people exist along with a 100% reliable method of
selecting them for management positions.

(I want to mention that in such an environment, free-market
capitalism also works really well.)

Unfortunately, we don't operate in such an environment.

Free-market capitalism survives mistakes better than any other system
yet tried to the same degree of purity. This is largely because it
inherently contains rigorous, constant, automatic (but not
necessarily fast -- oh well) correction mechanisms that are firmly
rooted in human nature. (There are other reasons, but that's the
biggest and most essential one.)

Therefore, in evaluating the
applicability of any new proposal for the arrangement of an economic
system, we can begin by looking for equivalent correction mechanisms;
if we don't find them, we can (assuming strictly logical
debate) discard that proposal without further consideration.

Socialism fails and should be discarded. Unfortunately the debate is
*not* strictly logical, so we must continue.

Next we look at the source of growth, and we find that it lies
overwhelmingly in individuals acting for their own profit -- however
those individuals may define profit. So if a proposed economic
system is intended to provide growth -- a wonderful idea unless you
intend the population to remain stable or shrink and further have
protection against natural disasters so you never have to rebuild
anything -- we look for ways that individuals can act for their own
profit. If these are nonexistent or insignificant, then the proposal

Socialism fails and should be discarded.

And third we look at how it happens that people do what the system
says they should do. Free-market capitalism says people should
decide for themselves what to do. Even if one slavishly follows some
economic or spiritual guru, one has chosen for oneself to do so. No
problem. All other systems require that people be persuaded or
coerced, and the cost of this persuasion or coercion -- combined with
the fact that neither the persuasion nor the coercion nor any
combination of the two will be 100% successful -- is a drag on the

Socialism has the problem that those who don't do as the system
commands, come to possess more resources per capita than those who
do. This means that persuasion will be of decreasing value, and
coercion will require an increasing fraction of the
resources possessed by those who behave as socialism demands. So
again socialism as a system fails and not only should, but inevitably
will, be discarded.

Note: this does *not* address a *voluntary* socialist enclave in a
free-market capitalist system. Such enclaves can be reasonably
stable and reasonably successful.
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