RE: Paying for Schools (was: SOCIETY: Re: The privatization ofpub lic security)

From: Miriam English (
Date: Fri Aug 24 2001 - 12:24:10 MDT

[sigh] I should be working (or sleeping -- eeek! 4am!), shouldn't be
answering this... but here goes...

At 11:22 AM 24/08/2001 -0400, Dickey, Michael F wrote:
>Indeed, I entirely agree, companies do need to be regulated. But the do not
>need to be regulated by the government. No free market economist will tell
>you that a 'free for all' is what we are looking for. Unions and private
>watch dog groups would be much more influential and usefull in a free market

Again, I mention that this might work if we were motivated by economics
alone, but it isn't so. People develop allegiances and cartels and
anticompetitive practices like price fixing. They use marketing tactics to
push shoddy merchandise. They propagate false information using advertising
and misleading labels. Companies don't work very well to regulate each
other... that is why we have government-funded investigations into illegal
operating practices of some companies.

I sorely doubt that trade unions would have much power in a free market...
but that is just my opinion.

As I have stressed time and time again. I am not against competitive
capitalism. I am just wary of removing the most powerful control on
corporate excess: government. I have no particular love of government
either, being very conscious of how that power has been misused in the past
too. All I am saying is that we must use the practical tools we have to
limit the dangers of extreme power.

>Already companies rate
>other products, like Consumer Reports, other companies like United
>Labratoris test and rate products. Companies and services like this would
>have much larger and powerfull roles.

These sorts of things have shown up in some small way in the recent past
and that is encouraging, but so far the bulk seem to be non-profit,
generally government-supported.

> >To remove feedback leads rapidly to things spiralling out of control, as we
>have seen so many times
> >in the past.
>Which supports my suspicion that you mis-understand what exactly a free
>market entails. It is not free reign for companies to do whatever they
>want. They will be regulated by how much a consumer is willing to pay and
>what that consumer wants in a product. These are the best forms of
>feedback, instead of a government 'committee' trying to figure out what it
>thinks the best thing for everyone else is, instead of letting the people
>decide for themselves.

Have you heard of the terms "negative feedback" and "positive feedback"? I
mean in the engineering sense. Negative feedback is a stabilising system
that corrects a change by using some of the output as a retarding input.
Positive feedback is like the howlround when a microphone squeals.

I can't see consumers being too much of a corrective force on companies
when we have the proven power of positive feedback in the form of marketing
and related strategies. Yes, there is some corrective power in the hands of
the consumer, but nothing like the forces that cause corporations to merge
into more and more powerful monolithic corporations. If we throw away
government, our only really effective tool in breaking up dangerously large
monopolies, then we are just on the path to feudalism -- that will not be
the way to the free market that you want.

You see the paradox here? We need a government to ensure that you get your
free market. Left to themselves corporations divide up the field among
themselves and eliminate competition.

> >Capitalism works very well if you are rich. If you are not then you need
> >other means. The biggest mistake rich classes make is in supposing that
> >they don't benefit from the poor improving their lot.
>Sounds like you have some more misconceptions about free marketers...

Actually, it seems that I understand it a bit better than you do. You are
oversimplifying what is a complex web of motivations. People are motivated
by much more than money. Worse, it can easily become a way of ensuring that
class barriers remain. The tricky task is to use the better parts of
capitalism while suppressing the worst.

In most of your reply you made the same mistake that many people make when
I express anything less than unqualified enthusiasm for capitalism. There
are more positions than totally for capitalism and totally against
capitalism. It reminds me of religion.

It is easy to see the gains of capitalism; they are self evident and don't
need to be labored. But likewise it is easy to see the drawbacks. The
complex task before us is to get the good bits while using what we can to
fight the bad bits. Like it or not, government can be a quite effective
tool against some of the bad aspects of capitalism... even if it has become
fashionable for many of them lately to relinquish that capability.


         - Miriam

Q. What is the similarity between an elephant and a grape?
A. They are both purple... except for the elephant.
Virtual Reality Association

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