The market chat thread

[Scheavo]

Seeing as how half the discussions on this board turn into a "free-market" vs. "government" debate, seems like there should just be a chat thread about the market place. I'm tired of having the same argument in every other thread.

To start it off, there's something I think which has been lacking in the debate. I know I've brought it up before, but the debate always get's put in black and white terms, and I'm not blaming either side for that, it's probably more due to the nature of debate itself.

Anyways, I think the meta-issue that never get's talked about is how great the market is. It is our best, most reliable tool for creating quality, through competition, and consumer choice. I don't know of anyone who has ever really thought over wise. That said, best is not perfect, so while the market does great for more things than I care to think of, that means there are situations which will arise where the government can do something. This is no one is all or nothing, not every tool is right for every job. Sometimes, you need a special tool to do something, and that's were collective action / government comes in - which also does not mean abandonment of the market. A sledgehammer has very limited uses, but that doesn't mean you should never use it. To say this does not mean government is centralized and monocentric - democratic government is decentralized and power is as spread out as it could possibly be. It depends entirely upon the situation.

The "government" does also not mean that competition is stifled; good governmental programs use the market to produce quality, it just comes with some rules. If the government is giving someone preferential treatment, it is corrupt. All government corrupt, but so do all businesses. The market rectifies the situation for the latter, and elections / revolutions solve it for government. People will always try to concentrate power, and there will always by psychopaths, demagogues, assholes and greed. Power, no matter if it's private or public, eventually becomes centralized, and the effects on society are the same.

For anyone familiar, it's the same fundamentals are the Greek kyklos. It is a fact of life, it is how humans behave and work together. We are not bonobos.

[Riceball]

I second the above

Markets are the best way to solve problems of scarcity in the current economic system; although there is still a place for intervention where there is a market failure. My issue, being in public policy, is that the term "market failure" is generally determined politically rather than objectively, which is where we get all kinds of warped, ideologically based outcomes to things that, really, have simple solutions.

All hail Adam Smith

[rumborak]

My stance is really straightforward: Employ the free market wherever its imperfections are socially acceptable. Whatever is socially acceptable and what not is determined by politics.

rumborak

[Scheavo]

My issue, being in public policy, is that the term "market failure" is generally determined politically rather than objectively, which is where we get all kinds of warped, ideologically based outcomes to things that, really, have simple solutions.

Care to give some examples? I'd be curious. Could be fruitful in this discussion as well.

[Riceball]

I'll have a think over the next 24 hours or so, nothing really springs to mind right now.

Although, this is more likely because I'm writing about horizontal fiscal equalisation and not because there aren't readily available examples.

Edit-before-I-clicked-post: I can think of one in the Australian context, google "live cattle ban Australia" and read about that.

[William Wallace]

What constitutes a market failure? It seems like a more difficult question than it initially appears to be. I doubt you could get the diverse persuasions of economists to agree, let alone the various dispensers of political wisdom.

Secondly,

I second the above

 the term "market failure" is generally determined politically rather than objectively, which is where we get all kinds of warped, ideologically based outcomes to things that, really, have simple solutions.

   
How, then, do you address market failure without resorting to the political process? Technocracy?

[rumborak]

What constitutes a market failure? It seems like a more difficult question than it initially appears to be. I doubt you could get the diverse persuasions of economists to agree, let alone the various dispensers of political wisdom.

I don't agree with Riceball's notion of an objectively measurable market failure.
To me, "market failure" (which seems a rather harsh term, I'd rather call it market inadequacy) is simply measured against the expectations the public puts into it.
Take as an example airlines. You could make the argument that there should be no safety regulations at all. Just let the market choose the safest airline!
The problem is that the way both we and the airline find out they've sacrificed too much maintenance for ticket price when the first flight crashes and people die.
That price is too high, and thus regulation is needed.

The thing about market is, yes they self-regulate towards the best option (and that is their enormous value), but they do so by making the consumer the guinea pig for finding the bad apples. And in some market segments, the bad apple doesn't just mean the loss of money, it means the loss of  life or other unacceptable damage.
Another example: The FDA. It was put into existence because people were selling "tinctures" to the public, sometimes with plain poisonous substances in it. And even when people died, the market didn't do its job well because the guy just went to the next town.

rumborak

[lordxizor]

Consumer safety is definitely the one major area that I will never trust the free market. Government oversight is definitely necessary in this area (though not necessarily the way it's done in the US today).

[PraXis]

Some oversight is needed (common sense, obviously), but do you think companies are out to harm consumers?... they wouldn't have consumers then.. and they'd get sued left and right.

[XJDenton]

SO long as the percentage of people being harmed is less than the number of consumers they gain through marketing I'm sure that companies would be alright with it. Its how the tobacco industry functions.

[lordxizor]

Some oversight is needed (common sense, obviously), but do you think companies are out to harm consumers?... they wouldn't have consumers then.. and they'd get sued left and right.

I think there are lots of companies out there that toe the edge very closely. I recall a company a while back that let out some sort of meat product or something contaminated with e coli and killed a couple people when the plant manager knew it was contaminated. This kind of stuff happens with government oversight. I can only imagine what some companies would try and do if there was none. Greed can be very powerful.

Most companies would do the right thing, but some wouldn't. You wouldn't know which were the bad ones until it was too late and people were dead. Suing a company wouldn't mean much to me if my son was dead due to their neglegence. I agree though that it's basically common sense stuff and there should be less beaurocracy than there is now.

[PraXis]

SO long as the percentage of people being harmed is less than the number of consumers they gain through marketing I'm sure that companies would be alright with it. Its how the tobacco industry functions.

The only reason tobacco is still legal is because of the tax revenue it generates. The gov't couldn't care less about your health.

[Adami]

SO long as the percentage of people being harmed is less than the number of consumers they gain through marketing I'm sure that companies would be alright with it. Its how the tobacco industry functions.

The only reason tobacco is still legal is because of the tax revenue it generates. The gov't couldn't care less about your health.

Nor could the all of the companies involved in giving you tabacco, alcohol, perscription drugs etc.

[PraXis]

SO long as the percentage of people being harmed is less than the number of consumers they gain through marketing I'm sure that companies would be alright with it. Its how the tobacco industry functions.

The only reason tobacco is still legal is because of the tax revenue it generates. The gov't couldn't care less about your health.

Nor could the all of the companies involved in giving you tabacco, alcohol, perscription drugs etc.

True, but we also can choose to use or not use any of these products. Personal responsibility is something our country needs to rediscover.

[William Wallace]

What constitutes a market failure? It seems like a more difficult question than it initially appears to be. I doubt you could get the diverse persuasions of economists to agree, let alone the various dispensers of political wisdom.

I don't agree with Riceball's notion of an objectively measurable market failure.
To me, "market failure" (which seems a rather harsh term, I'd rather call it market inadequacy) is simply measured against the expectations the public puts into it.
Take as an example airlines. You could make the argument that there should be no safety regulations at all. Just let the market choose the safest airline!
The problem is that the way both we and the airline find out they've sacrificed too much maintenance for ticket price when the first flight crashes and people die.
That price is too high, and thus regulation is needed.

The thing about market is, yes they self-regulate towards the best option (and that is their enormous value), but they do so by making the consumer the guinea pig for finding the bad apples. And in some market segments, the bad apple doesn't just mean the loss of money, it means the loss of  life or other unacceptable damage.
Another example: The FDA. It was put into existence because people were selling "tinctures" to the public, sometimes with plain poisonous substances in it. And even when people died, the market didn't do its job well because the guy just went to the next town.

rumborak

This is a fair objection, though I think everybody that makes it underestimates the ability of industries to self-regulate. Not only that, but industries that do become subject to federal regulation often find ways to befriend their regulators. Two recent examples include the BP Oil spill and the ongoing relationships between drug manufacturers and the FDA. I think anybody familiar with the latter will tell you that the regulators and companies have become far too friendly. 

[jsem]

Also, consumers can start their own associations of which they pay voluntary fees to to keep in business - and let these do health controls and safety regulations instead. If an airline or a restaurant or whatever doesn't want to be part of it, the consumers don't have to travel with them, or eat their food or whatever.

There are many ways of getting around it without government involvement.

[Scheavo]

This is a fair objection, though I think everybody that makes it underestimates the ability of industries to self-regulate. Not only that, but industries that do become subject to federal regulation often find ways to befriend their regulators. Two recent examples include the BP Oil spill and the ongoing relationships between drug manufacturers and the FDA. I think anybody familiar with the latter will tell you that the regulators and companies have become far too friendly. 

Our government is corrupt, and it's our own fault. The marketplace of democratic government got neglected, and now our government is a corrupt piece of shit. It's time, through market action (elections / protests / revolutions ) to take back our government, and actually have sane and fair regulations.

Also, why do regulators get corrupted if they aren't a problem? It highlights the intent of corporations and companies, to do shady things, to be unsafe. If regulators are pointless, then they'd face no resistance because it would be done anyways.

There are tons of examples of companies knowingly pushing for something that is unhealthy for workers / consumers. This is not always the case, but the consequences of these kind of acts are worse than the negative economic consequences of democratic governmental oversight / involvemnet.

Also, consumers can start their own associations of which they pay voluntary fees to to keep in business - and let these do health controls and safety regulations instead. If an airline or a restaurant or whatever doesn't want to be part of it, the consumers don't have to travel with them, or eat their food or whatever.

There are many ways of getting around it without government involvement.

If government can be bribed, why can't private inspectors?

And all of this assume the consumer knows the information to make such a decision. Wouldn't be hard to set up puppet companies to "regulate" themselves.

Not to be impolite here, but I don't think you get my point.

The consumers are in charge of the inspection, and the consumers fund the inspection agency. Well, basically this is all in the new "free market" thread anyway.

Sorry just saw this in the other thread.

You mean like how consumers / citizens fund the inspection agencies now?  I don't see how consumers are any more in charge of said corporations than a democratic government. In both situations, consumers can become lazy, complacent and neglect said agencies, which then go bad*. In a free-market this can happen, in a democratic government it can happen. If citizens are paying attention, then there is still a demand for quality, meaning corrupt inspectors get voted out of office.

By the way, when people have talked about regulators being corrupt, are we talking local food inspectors? I'm willing to bet that local / state inspectors are much better than their federal counterparts.

[Riceball]

So, I suppose what I was getting at with the market failure thing is that the political class in charge at the time tend to be the ones who determine it for micro issues; but for macro issues its more about the ideology of the economy which has evolved over time.

Take medical care for example:

The US: mostly market based
Australia: probably 50/50 market/government
Some of Europe: 100% government

The American ideology tends to see medical care as a problem the market can fix, Australia sees it as something the market can do to a point but then needs government assistance to go the whole way, while some of Europe see it as a total market failure.

I guess what annoys me the most is that governments tend to be pro-market when it suits them, but cry "MARKET FAILURE" when it suits them also, even when, in a logical sense, there is no failure.

[PraXis]

A good chunk of American health care is funded by gov't... and these are the areas with the most fraud and waste. I can solve our health care issues easily... let the 1000+ companies compete across state lines (just like the FEHB gets their great private plans priced for federal employees), loser-pays tort reform (mainly to reduce defensive medicine), and getting rid of all the insurance mandates... my plan shouldn't cover IVF, child development services, or mammograms... I'd rather choose my own level of coverage.

[Scheavo]

A good chunk of American health care is funded by gov't... and these are the areas with the most fraud and waste. I can solve our health care issues easily... let the 1000+ companies compete across state lines (just like the FEHB gets their great private plans priced for federal employees), loser-pays tort reform (mainly to reduce defensive medicine), and getting rid of all the insurance mandates... my plan shouldn't cover IVF, child development services, or mammograms... I'd rather choose my own level of coverage.

The chunk are the poor, unhealthy and old. They wouldn't be able to get health insurance without some sort of governmental help. It's not profitable to insure seniors, not for the prices seniors can afford. Also, Medicare is rising at a lower level of inflation than the general market, and is highly loved by people on it - and it's cost to the US government has pretty much stayed the same in comparison to GDP and inflation.

Many of the health insurance companies in each state are part of a larger national parent company. They'd merge upon elimination of state lines (which is still a good idea). I see no reason why you being able to pick a more personal plan is contrary to "socialized" medicine; our current system sucks, for a variety of reasons.

[Fiery Winds]

Some oversight is needed (common sense, obviously), but do you think companies are out to harm consumers?... they wouldn't have consumers then.. and they'd get sued left and right.

Not directly, but when Ford determined it would be cheaper to settle with people killed/injured in exploding cars rather than pay to fix the cause of them exploding in the first place, there's something wrong. 

[rumborak]

Companies routinely go to places they wouldn't like to, due to market pressure. I don't think any airline *wants* their customers to die, but if it makes the difference between selling your tickets or not, the companies are forced to operate in a spot where they just hope nothing goes wrong.
And it's one of those places where government regulations is actually the *best* way of going about. Because, it applies to all players in the market and thus creates a level playing field. Market self-regulation still works, all it does is to shift ticket prices up for everyone (and there still is competition between airlines on who can implement the regulations the cheapest).

Also, consumers can start their own associations of which they pay voluntary fees to to keep in business - and let these do health controls and safety regulations instead. If an airline or a restaurant or whatever doesn't want to be part of it, the consumers don't have to travel with them, or eat their food or whatever.

Those things are a pipe dream, they just don't work. It's been tried numerous times. Those organizations don't have the bite it takes to make sure the companies are playing along ("Sure, why don't you come in 2 weeks and we'll show you our visitor plant! What? No, we can't show you the real thing,  you know, intellectual property and such.")

rumborak

[Riceball]

Putting my rationalist hat on for a moment: does the government have an (implicit or explicit) responsibility to ensure its people are healthy, educated and motivated to contribute to society? To put it another way, should tto achieve he government treat its pool of workers, in essence, as a factor of production for the free marlet to allocate efficiently?

That might not make sense at all, I'm on the way home. Seems to satisfy both sides of the market v intervention camp...but I'm prone to grand, rambling ideas on days full of meetings lol so call me on that if you want.

[XJDenton]

A good chunk of American health care is funded by gov't... and these are the areas with the most fraud and waste.

Some oversight is needed (common sense, obviously), but do you think companies are out to harm consumers?... they wouldn't have consumers then.. and they'd get sued left and right.

Not directly, but when Ford determined it would be cheaper to settle with people killed/injured in exploding cars rather than pay to fix the cause of them exploding in the first place, there's something wrong. 

"My job was to apply the formula. It's simple arithmetic. It's a story problem. A new car built by my company leaves Boston traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now: Do we initiate a recall? You take the number of vehicles in the field (A) and multiply it by the probable rate of failure (B), multiply the result by the average out-of-court settlement (C). A times B times C equals X. If X is less than the cost of a recall, we don't do one."

[Orthogonal]

A good chunk of American health care is funded by gov't... and these are the areas with the most fraud and waste.

Some oversight is needed (common sense, obviously), but do you think companies are out to harm consumers?... they wouldn't have consumers then.. and they'd get sued left and right.

Not directly, but when Ford determined it would be cheaper to settle with people killed/injured in exploding cars rather than pay to fix the cause of them exploding in the first place, there's something wrong. 

"My job was to apply the formula. It's simple arithmetic. It's a story problem. A new car built by my company leaves Boston traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now: Do we initiate a recall? You take the number of vehicles in the field (A) and multiply it by the probable rate of failure (B), multiply the result by the average out-of-court settlement (C). A times B times C equals X. If X is less than the cost of a recall, we don't do one."

That's when a class action lawsuit is filed since the potential impact is to 100% of the purchasers even though the gross failure rate is tiny.

In the end, everyone gets a recall or compensated for loss.

[Scheavo]

Saying that there is a solution to the problem doesn't mean that the problem doesn't occur, especially when the government is especially good at dealing with the kind of law suits you have in mind. You didn't really address the counter-example, that corporations can/do harm customers and workers if it's in their profitability to do so. Do all, in all cases? No.

[Orthogonal]

I hope no one is insinuating that companies are doing these things intentionally. People make mistakes, and so it is with the products on the market. It has nothing to do with the fact that they are a for-profit company or a "lack of regulation", but just something that comes with engineering. There are numerous design reviews and QA testing periods products go through, but problems are not always caught. It just so happens that with a product like a car, a design flaw has a greater potential for bodily harm than something like a smart phone or rocking chair. Adding additional regulators is no guarantee any of these problems will be caught, but it does guarantee higher costs and more bureaucracy. The problem with regulation is made even worse when the majority of the time the regulator has no technical background in the industry they oversee, but it is certain, 100% of the time, they have a political agenda. It also doesn't help that regulators can be lobbied or be in the back pocket of the companies they are supposedly regulating.

This doesn't really get to the root of the problem, however, of why a corporation can get away with harming customers/workers when it is profitable to do so. Whenever we read the news that corporation X did this or that, we often gloss over the fact that the corporation did no such thing, there is a person behind every decision and action. You first need to separate in your mind the difference between a business and a corporation. A business is a collection of individuals and capital goods working in concert for certain economic ends.  A Corporation is a Business that has been granted Personhood and is recognized by the State as a legal entity. What this means is that, the CEO or whoever in charge of a corporation makes decisions that have real consequences, it is the Corporation that faces legal troubles and rarely the person who made them (occasionally there is a scape goat). In this way, a corporation becomes a legal meat shield for the actions of those in charge. This is a moral hazard and causes people to make decisions they otherwise wouldn't if they had more skin in the game so to speak. This is also why the executives of BP won't face any real consequences for what happened in the gulf, nor will manufacturer's suffer because someone gets hurt working for them. In a true free market, individuals are held accountable for their actions, not fictitious entities.

The real problem is the creation of Corporations to protect the elite. You can thank the State for fostering an environment that breeds the egregious actions of major corporations.

[Scheavo]

I hope no one is insinuating that companies are doing these things intentionally. People make mistakes, and so it is with the products on the market. It has nothing to do with the fact that they are a for-profit company or a "lack of regulation", but just something that comes with engineering. There are numerous design reviews and QA testing periods products go through, but problems are not always caught. It just so happens that with a product like a car, a design flaw has a greater potential for bodily harm than something like a smart phone or rocking chair. Adding additional regulators is no guarantee any of these problems will be caught, but it does guarantee higher costs and more bureaucracy. The problem with regulation is made even worse when the majority of the time the regulator has no technical background in the industry they oversee, but it is certain, 100% of the time, they have a political agenda. It also doesn't help that regulators can be lobbied or be in the back pocket of the companies they are supposedly regulating.

This is just fallacious (as in misleading), and ignores the argument made. The argument is that the incentive for profits make corporations do unethical, dirty things. It may not be a direct decision made, but decisions are made to cut some corners, to cut back on this or that in order to save money, and get more money. A peanut company two years ago knowingly sent up salmonella contaminated peanuts because it wasn't in their profit-interest to do so. Ford decided it was easier to deal with the damages causes then institute a recall. Those are intentional decisions, and they have consequences for people's health, safety, etc, and there's no way for someone to make a rational decision to avoid such risks.

This is a direct contradiction to many of the arguments you make, and unless you can and will actually answer them, you have a serious flaw in your logic.

Not all regulators are corrupt, not all government is corrupt. If you think government is evil, bad, inept, chances are it's going to be evil, bad, and inept.

This doesn't really get to the root of the problem, however, of why a corporation can get away with harming customers/workers when it is profitable to do so. Whenever we read the news that corporation X did this or that, we often gloss over the fact that the corporation did no such thing, there is a person behind every decision and action. You first need to separate in your mind the difference between a business and a corporation. A business is a collection of individuals and capital goods working in concert for certain economic ends.  A Corporation is a Business that has been granted Personhood and is recognized by the State as a legal entity. What this means is that, the CEO or whoever in charge of a corporation makes decisions that have real consequences, it is the Corporation that faces legal troubles and rarely the person who made them (occasionally there is a scape goat). In this way, a corporation becomes a legal meat shield for the actions of those in charge. This is a moral hazard and causes people to make decisions they otherwise wouldn't if they had more skin in the game so to speak. This is also why the executives of BP won't face any real consequences for what happened in the gulf, nor will manufacturer's suffer because someone gets hurt working for them. In a true free market, individuals are held accountable for their actions, not fictitious entities.

The real problem is the creation of Corporations to protect the elite. You can thank the State for fostering an environment that breeds the egregious actions of major corporations.

This is just ridiculous. You blame the state for letting Corporations do what they want. Without the state, there wouldn't be anything preventing big business from performing the kind of business practices that corporations perform. The problem is greed, and the state does not create greed.

Protecting investors from their decisions can also be a very good, important tool for a capital society. It allows for more risks to be taken, as a lot of people wouldn't take a lot of business risks if if meant they couldn't have food on the table. Many LLC's are small, and they help our economy grow. Even so, in your world, there is nothing that prevents people from acknowledging a separation of someones money.

[Orthogonal]

This is just fallacious (as in misleading), and ignores the argument made. The argument is that the incentive for profits make corporations do unethical, dirty things. It may not be a direct decision made, but decisions are made to cut some corners, to cut back on this or that in order to save money, and get more money. A peanut company two years ago knowingly sent up salmonella contaminated peanuts because it wasn't in their profit-interest to do so. Ford decided it was easier to deal with the damages causes then institute a recall. Those are intentional decisions, and they have consequences for people's health, safety, etc, and there's no way for someone to make a rational decision to avoid such risks.

This is a direct contradiction to many of the arguments you make, and unless you can and will actually answer them, you have a serious flaw in your logic.

Not all regulators are corrupt, not all government is corrupt. If you think government is evil, bad, inept, chances are it's going to be evil, bad, and inept.

There is nothing wrong with a company deciding to compromise on a design decision to cut cost, but it is critical that the product is not advertised as something it is not. If they deliberately mislead consumer's on the quality or safety of the product, that is fraud. If the company executive didn't have corporate legal protection, they might think twice about doing this.

Also, regulations add numerous fixed costs which is regressive since larger companies can absorb the cost better than small companies. It is in a large companies best interest to have lots of regulations on their own industry to keep competitors out.

I don't deny that regulators may be well intentioned, good honest people, but that is missing the point, the regulation itself is a problem. It was with the best of intentions that the Federal Reserve lowered interest rates and the Government Sponsored Entities (GSE) Freddie/Fannie were given special lending priveledges so everyone could buy a home, and look where that got us.

This is just ridiculous. You blame the state for letting Corporations do what they want. Without the state, there wouldn't be anything preventing big business from performing the kind of business practices that corporations perform. The problem is greed, and the state does not create greed.

Protecting investors from their decisions can also be a very good, important tool for a capital society. It allows for more risks to be taken, as a lot of people wouldn't take a lot of business risks if if meant they couldn't have food on the table. Many LLC's are small, and they help our economy grow. Even so, in your world, there is nothing that prevents people from acknowledging a separation of someones money.

So you are going to deny that the Corporation is a State sponsored entity? https://en.wikipedia.org/wiki/Corporation Since Corporations are created by the State, they will obviously be very much in league with each other. Since a regulator has a lot of power, they will always be pursued by those who seek to use it for their personal agenda. Like, former US Treasury Secretary Henry Paulson used to be CEO for Goldman Sach's, or how former Monsanto lawyer Michael Taylor ended up working for the USDA and now the FDA? Yeah, that's not a conflict of interest.

You seem very confused, business risk taking is very different from deceptive business practices and you know it. A business risk is determining where to spend R&D, what products to make, what locations to expand into or other entrepreneureal actions etc. Deceptive business practices are criminal and can be prosecuted through tort, but typically only the corporation faces troubles while the CEO gets his golden parachute. If you control more Capital goods, your responsibility should scale with it.

One last note "The problem is greed, and the state does not create greed. "

LOL! The State IS greed. They can do anything they want.

[Scheavo]

There is nothing wrong with a company deciding to compromise on a design decision to cut cost, but it is critical that the product is not advertised as something it is not. If they deliberately mislead consumer's on the quality or safety of the product, that is fraud. If the company executive didn't have corporate legal protection, they might think twice about doing this.

Fraud, according to a legal system that you don't accept. Again, the point isn't whether or not fraud will exist, but that companies commit fraud, and it's not some rare event. Laws against murder make sense, but no one thinks most people are going to kill people. Laws are almost for the exceptions.

I don't deny that regulators may be well intentioned, good honest people, but that is missing the point, the regulation itself is a problem. It was with the best of intentions that the Federal Reserve lowered interest rates and the Government Sponsored Entities (GSE) Freddie/Fannie were given special lending priveledges so everyone could buy a home, and look where that got us.

Some regulations are of the type of you describe, and those need to go. But regulating a company from using a cancerous chemical is not of the sort you describe, it is there for the consumer, not the CEO's, and it benefits the consumers, not the CEO's. It's not all or nothing.

You seem very confused, business risk taking is very different from deceptive business practices and you know it. A business risk is determining where to spend R&D, what products to make, what locations to expand into or other entrepreneureal actions etc. Deceptive business practices are criminal and can be prosecuted through tort, but typically only the corporation faces troubles while the CEO gets his golden parachute. If you control more Capital goods, your responsibility should scale with it.

I never denied they were state sponsored, what I'm denying is the reason why corporations are bad is because they are state sponsored, or that what corporations do is ONLY because they are state sponsored. Quit picking up straw men arguments. That's why I said the state does not create greed.

*edit*

Your argument: greed is channeled into good ends under a free-market. It must make a profit, profit is good for the customer, etc. Profit filters out bad behavior, and equals good behavior

Counter argument: Profit can drive shady, unethical, murderous behavior.

Your response: Then they get sued

Your response doesn't defend your original argument, it acknowledges the counter-argument is true.

LOL! The State IS greed. They can do anything they want.

Is our government corrupt, and taken over by greedy influences? Ya. But a democratic government is for the greater good, it's about putting aside one's greed to come to a mutually beneficial agreement. The state cannot do anything it wants, far from it. It's rather limited, in historical standards. It's getting very bad lately, but that's a different argument. You so grossly misrepresent the state, that it's like trying to argue that the sky is blue. "The state" isn't even one group, the power isn't centralized.

Even if the state is greed, that doesn't mean that the state is the cause of greed. State would be the symptom of greed, and since you're not getting rid of greed in your world, we'd still see the symptoms of it.

[Riceball]

I like how this has already devolved into the same thing it was trying to avoid; obviously, the marlet works in this case

Still, an interesting twist this time around.

[Scheavo]

Well, I knew perfectly well where this was going; but it sure as hell beats having it in 5 different threads at the same time.

Here's a different question though:

Ayn Randians like to make a big deal about millionaires leaving the country (which also goes against the argument that being here is forced upon them), about how taxation means the "creative," Atlas type people leave society, stop working, etc, which causes the economy to collapse, or some such nonsense. But doesn't that go against the idea that there is competition? Those millionaires places will just be filled, and people rising up the ladder won't complain about higher taxes, becuase they're still making more money than they were. Are these things contradictory, in essence?

[emindead]

The way Scheavo sees it is the same as those people who say "if Bach wouldn't have written that music someone else would have." That's as false as you can get. Every individual is unique. Saying someone else would take the place is just focusing on what it's seen and not on what is unseen.

[Scheavo]

The way Scheavo sees it is the same as those people who say "if Bach wouldn't have written that music someone else would have." That's as false as you can get. Every individual is unique. Saying someone else would take the place is just focusing on what it's seen and not on what is unseen.

You didn't get at the point of the question, that's just a strawman; so I may have explained it badly. You agree there's competition, meaning there are people not in power right now capable/more capable than those in power right now; taxing the rich is going to annoy the current rich, those who are yet to be reach still see upward mobility/progress, and so they'll still want to rise up the ladder. So if some millionaires decide to leave the country, or if all of them do (which is a farce, because there's a lot who think they should pay more in taxes, so they surely wouldn't leave), then what we're out of is the people most motivated by profit, and not intrinsic value of what they're doing. I'd garner that those people don't do as good of a job anyways, due to the nature of human incentive. If you're only in it for the money, you just aren't as good as other people, unless what you're talking about is consolidating power and being greedy, in which case you're far better at it. People like Bach generally aren't too money-driven. Philosophers are notorious for being apathetic to money, great musicians often live in poverty, a math genius turned down millions of dollars becuase he didn't want the fame/etc. Ayn Rand herself never really stepped into the spotlight. Artists are generally modest people, who don't aspire to great wealth. In many ways, the most creative people in society don't give a fuck about taxes, or money.

I'm sorry, but I can live without the Koch brothers. You don't think there's someone else, some other method, of filling their gap? Gates will stay. Buffet would stay. Lots of others would stay, whom all show the characteristics you extol so much.



Just to be clear, I do think that taxation can become oppressive, but I don't support anything close to oppressive.

[Orthogonal]

There is nothing wrong with a company deciding to compromise on a design decision to cut cost, but it is critical that the product is not advertised as something it is not. If they deliberately mislead consumer's on the quality or safety of the product, that is fraud. If the company executive didn't have corporate legal protection, they might think twice about doing this.

Fraud, according to a legal system that you don't accept. Again, the point isn't whether or not fraud will exist, but that companies commit fraud, and it's not some rare event. Laws against murder make sense, but no one thinks most people are going to kill people. Laws are almost for the exceptions.

Huh? It's fraud because it meets the definition of fraud, and it would be illegal in just about any legal system.

I never denied they were state sponsored, what I'm denying is the reason why corporations are bad is because they are state sponsored, or that what corporations do is ONLY because they are state sponsored. Quit picking up straw men arguments. That's why I said the state does not create greed.

So you concede they are State sponsored, but sweep under the rug the ramifications of actions that are a direct result of State intervention. They are playing in the sandbox the State created for them and in many cases they helped create that sandbox hand-in-hand.

*edit*

Your argument: greed is channeled into good ends under a free-market. It must make a profit, profit is good for the customer, etc. Profit filters out bad behavior, and equals good behavior

Counter argument: Profit can drive shady, unethical, murderous behavior.

Your response: Then they get sued

Your response doesn't defend your original argument, it acknowledges the counter-argument is true.

Good observation, I guess I should add some context to help this make more sense. I need to define the terms better for clarification. I'll also expound a bit so others can understand my comments on "greed" since we had that discussion by PM.

When I'm referring to greed in market activities, I'm referring to voluntary trade between two parties. A profit is not just "making money". When a company creates and sales a product, a profit is calculated when the revenue exceeds the expenses and resources that went into producing it. This is obviously not news to you, but it is important to see what is really going on from a macro perspective. When a company makes a profit in this way, it means they created something that is worth more than the resources that went into creating it. This is called Wealth creation. When wealth is created, the producer is rewarded for its creation and we call that a profit. Conversely, when there is a loss, wealth was destroyed because the final product is worth less than the resources that went into creating it. The producer is punished for destroying wealth and we call this a loss.

Sometimes profits can be ill-gotten when there is State intervention. This is why Libertarians oppose regulations and intervention in the economy since certain parties will be granted priviledged status or receive additional business that otherwise would not have occured had the intervention not been in place. Even though the consumer and company make voluntary trades, this breeds malinvestment since intervention caused transactions to occur with bad market information. The causes bubbles/recessions and the business cycle. This is the context I was referring to when I stated lassaiz-faire will channel greed to increased productivity in a free market.

Now, you bring up fraud, intimidation and deceptive business practices being driven by greed. This may certainly be the case, but the greed is not for profits because these are non-market activities. These types of actions are non-market activities because they are violent or coercive. There are numerous names we can call them, but they all fall under the umbrella of theft. A profit/loss cannot be calculated since coercion was used because the true exchange price would be different had all information been known and both parties traded voluntarily. Instead, we can say that this was a transfer of wealth. Greed can drive wealth transfer.

So you are right in saying that greed may influence wealth accumulation through violent means. However, these types of actions exist independent of what type of political system is being used. Determining what is the best method to mitigate violent actions for wealth transfer is a topic for further discussion, but probably beyond the scope of this thread.

Even if the state is greed, that doesn't mean that the state is the cause of greed. State would be the symptom of greed, and since you're not getting rid of greed in your world, we'd still see the symptoms of it.

Ok, the State isn't greed, it is the people who represent it that are.