Economics Am One Lesson

Art Caden presents nine principles of bizarro economics.

Comments

[MP]

I don't get it.

[Tman]

Me. Neither.

Was that supposed to be what economics "should" be now, or what it "is" now or a distorted view of what people "believe" it is now?

Not entirely clear on the concept. I see why Jesse liked it though since it had the open borders argument.

[Slap the Enlightened!]

Was that supposed to be what economics "should" be now, or what it "is" now or a distorted view of what people "believe" it is now?

Considering that I doubt anyone here can name a single benefit ever provided to world by the science of economics, does it really make any difference?

[Jordan Elliot]

You here go. Me am not helping.

[Tman]

Yeah, I get the bizarro thing, but it's not like everything he says is the "opposite" of what should be reality. The whole thing just doesn't make sense.

[Irresponsible Hater]

You mean, like, Bizarro Superman says "bad bye". And is black. And lives underwater.

[The Libertarian Guy]

Raaacist!

[hmm]

I took it as the retarded economic reasons put forth for anti-trade and immigration legislation.

Or just generally retarded sentiments you hear when discussing anything political and economic.

[hmm]

Either way you hear shit like that or along those lines way too often.

[Jesse Walker]

hmm's interpretation is correct.

[Tman]

So the whole thing is a massive straw man argument about why the left AND the right are wrong about economics.

What the fuck is it with people who want to paint everything in monotones?

Because I believe in Wider Gates, Taller Fences, that means that I think that all people trying to immigrate to the US are coming so that they can sell us drugs, commit crimes, and collect welfare payments?

Jesse, meet Chad. Chad, Jesse. Have fun together guyz!

[hmm]

It's from Von Mises, which indicates that this is about economics and not about what you believe politically. It's about using piss poor and ill-informed economic reasoning, or a lack of economic reasoning, to support arguments.

[hmm]

See Chads arguments below.

[hmm]

or Chad's

[Ken Shultz]

"The laws of supply and demand are optional."

DEMAN KURV!

It's so obviously making fun prevailing opinion from the loudmouths on both ends of the spectrum, its isn't even funny.

Whether the anti-immigrant morons on the right or the Obama-lama-ding-dongs...

People's ideas about how various economic principles work have the sun orbiting the earth again.

Really, if it wasn't for all the misery, it'd really be funny.

[Jason]

7. The laws of supply and demand are optional.

Where did I hear something like that before?

[Old Mexican]

Re: Jason,

Where did I hear something like that before?

From Tony, who asserted in a previous post that the economy [not economics] was too complicated to be ruled by such "simple" rules - like supply and demand.

[Tony]

Even assuming the big fat can opener known as a world of rational creatures, why should the spontaneous natural allocation of resources dictate how human beings should live? What you call freedom is actually slavery to the market--good at making iphones, not good at securing peace and justice for all.

[Ken Shultz]

"What you call freedom is actually slavery to the market--good at making iphones, not good at securing peace and justice for all."

Tony, if you don't learn anything else for the rest of your life, try to remember this...

Market forces are people making choices.

Every single market force without exception in all situations always. It's not like physics where you can separate gravity from the people it acts on--market forces are people making choices...

You can't separate them. You cannot restrict markets and not effect people's freedom to choose...and not effect people.

So, the next time you hear about the price of something going up or the price of something going down, just remember--market forces are people making choices...

There's definition more basic than that. You cannot separate market forces from people! They're the same thing.

Like H20 and water. Market forces=people making choices.

There's no point in talking about why we shouldn't separate a) market forces from b) the people who make them--one cannot be a slave to other because they're the same thing.

Claro?

[Nitori Kawashiro]

"good at making i[P]hones, not good at securing peace and justice for all."

Well if you want peace and justice you can always move to North Korea. Yep capitalist countries are always at war with one another and free trade has never ever shmever fostered peace has it?

[Old Mexican]

Re: Tony,

What you call freedom is actually slavery to the market--good at making iphones, not good at securing peace and justice for all.

How sweet - you want the return of Paradise. No scarcity, no toil or moil.

[.]

... who asserted in a previous post that the economy [not economics] was too complicated to be ruled by such "simple" rules - like supply and demand.

But not too complicated to be ruled by the simple thieves and Marxists in Washington, DC. apparently.

[.]

Oops! Sorry about that. In any sentence using both words, "thief" and "Marxist," one of them is redundant and superfluous.

[JW]

Bizzaro--noun; The concept of "Bizarro" has been ingrained in popular culture where it has come to mean a weirdly mutilated version of anything, not confined to characters in DC Comics publications and as such, so has the concept of Bizarro World.

[JW]

I suppose it could be an adjective as well.

[Hugh Akston]

I'm waiting until someone verbs it.

[Chad]

Their wealth will cause our poverty. They can only get richer if we get poorer

I'll just pick on this one, though I could pick on any of them. It really does boil down and concentrate some libertarian misconceptions.

The first is your common mistake of concluding that since you have one extreme position, everyone who disagrees with you must have the exact opposite opinion. The reality is usually that you guys are partially right, but not completely. And in this particular example, this is precisely the case.

Non-libertarians do not believe that the rich "only" get rich by making the poor poorer. However, by-and-large, libertarians DO believe the reverse: that the rich practically never make the poor poorer. What is the truth of the matter? It is that the world is full of BOTH positive-sum and negative-sum interactions. Your failure to even admit the existence of the latter (in a fantasy libertarian world, at least) is why you always will be wrong.

[hmm]

I've never seen anyone argue that any sum game (positive, negative, zero) exists? Now arguing that government doesn't help alleviate a negative impact is a different story.

Do you sit on your crapper with a crown and scepter when you post? You certain post like a person who would occupy an ivory tower, at least in their own mind.

[hmm]

exist = doesn't exist

Oh god too many grammars.

[JW]

Not a scepter, a Bottom Buddy.

[whappan?]

You've finally found an occasion to link to this.

[Chad]

Actually, I was arguing with a bunch of hit-and-run regulars about this just the other day.

And the idea that the government cannot and does not solve or mitigate many real-world negative-sum interactions is just outright silly. An obvious example would be the break-up of monopolies, for example. Pretty much any existing environmental regulation would fit the bill as well.

[Ron L]

Chad|7.21.10 @ 8:29PM|#
"And the idea that the government cannot and does not solve or mitigate many real-world negative-sum interactions is just outright silly. An obvious example would be the break-up of monopolies, for example."

Cite, please.

[Chad]

Yes, because Ma Bell and Standard Oil were so wonderful, as would a world were the guy that owned the road in front of your home could charge you $5 per trip.

[hmm]

You realize Ma Bell basically exists again, right?

Are you vying for the title of "Most Non Sequitury" against MNG? What in the fuck do private roads have to do with anything. And if you live in an HOA you are basically paying for a private fucking road.

Dear god my forehead. Where's my oven mitt.

[Ron L]

Chad|7.21.10 @ 9:51PM|#
"Yes, because Ma Bell and Standard Oil were so wonderful, as would a world were the guy that owned the road in front of your home could charge you $5 per trip."

Uh, I asked for a cite for your claim that the government breakup of a supposed monopoly was beneficial.
You reply with 'Ma Bell' (without any explanation) which was a government supported monopoly, the breakup of which was the denial of that government support, *not* a breakup of a commercial monopoly.
Then you mention Standard Oil, without offering any suggestion that breaking that monopoly (which it wasn't) had any positive effect.
So, are you simply an ignoramus? Or are you a complex ignoramus? Or are you just brain-dead?

[KPres]

"Yes, because Ma Bell and Standard Oil were so wonderful, as would a world were the guy that owned the road in front of your home could charge you $5 per trip."

Actually, the private owner of a road wouldn't be able to overcharge, because if he did, it would reduce value of the land that the roads provide access to, and if nobody owned the land the road provides access to, the road's owner couldn't turn a profit. So eventually a stable equilibrium price would arise that would represent the true market-value of the road.

[.]

Exactly right. The private owner of a road does not live in a vacuum. If he overcharges for use of his road, in a free country others will overcharge him for the products he wishes to buy.

[Chad]

You are only pointing out that there is a limit to how much monopoly rent the road-monopolist can extract (he can't run the value of your land below zero). You aren't addressing at all the concern that he can and will extract some level of monopoly rent.

[Joe M]

Who says there can only be one road to a location? And if we're talking about local neighborhoods, there are always other neighborhoods to choose if the roads in one are overpriced.

Also, neat dodge on the Ma Bell and Standard Oil issue. You raised them, and yet you aren't responding to Ron's comments.

[.]

If there is a limit to how much "rent" can be extracted, then it isn't really a coersive monopoly at all.

[mr simple]

You do realize that monopolies won't exist without collusion and government coercion, right?

[hmm]

I'm sure government does mitigate negative externalities and possible even up arrangements, but at what cost? I'm guessing you do what most Keynesians do and discount any cost that isn't dollar related or minimize any additional negative externalities or consequences of government involvement.

I love the monopoly break up reasoning. Do you know how alcohol is distributed in the most states? How about those baby Bells, how's that working out today? How about the monopoly that managed to actually run a railroad for, wait for it, a profit? How about the EPA locking someone up for owning and selling sodium, legally? How about the EPA blocking foreign help with exxon Valdez due to not getting 100% of the oil? You want to regulate the negative social externalities of pollution, and think there is no impact on economic growth? (Here's a great example of how retarded cap and trade is, companies like Cemex have managed to keep a company afloat by selling cap and trade carbon certificates that they get for free from the governments. How fucked up is that and how is it helping?)

What the hell is this negative-sum interaction. You think that only government can stop such things? The reality is that crony policies are what generate most negative-sum interactions. Once you create a hurdle to lobbying for regulation like money larger companies will gain an advantage.

Seriously. Your argument is about as well thought out as my last morning shit.

[Chad]

I'm sure government does mitigate negative externalities and possible even up arrangements, but at what cost?

Minimal ones, relative to benefits. Take the SO2 cap-and-trade system, for example. It has passed every serious cost-benefit-analysis by an order of magnitude, like most environmental regulations. Indeed, the EPA won't even implement a rule unless it passes CBA by a wide margin.

I'm guessing you do what most Keynesians do and discount any cost that isn't dollar related

wtf are you talking about? I seriously have no idea. Indeed, it is usually conservatives who ignore anything fuzzy (say, the value of a species) and only look at cold hard cash.

or minimize any additional negative externalities or consequences of government involvement.

Wrong again. They are typically trivial, though. See above.

I love the monopoly break up reasoning. Do you know how alcohol is distributed in the most states?

I used to *WORK* for a beer distributor. In many most cases, you would have a natural monopoly anyway. It doesn't make sense to have two trucks running over-lapping routes.

How about those baby Bells, how's that working out today?

Innovation shot through the roof after Ma Bell was killed. The babies were generally eaten or killed off themselves, but who cares about individual companies?

How about the monopoly that managed to actually run a railroad for, wait for it, a profit?

Yeah, just like the roads that make profits...errr....wait

Btw, a number of Japanese rail companies, as well as the main German company, turn profits.

How about the EPA locking someone up for owning and selling sodium, legally? How about the EPA blocking foreign help with exxon Valdez due to not getting 100% of the oil?

I have no idea what you are talking about. Sounds crackpotty to me.

You want to regulate the negative social externalities of pollution, and think there is no impact on economic growth?

Not "no". More like "minimal, and perhaps actually positive".

(Here's a great example of how retarded cap and trade is, companies like Cemex have managed to keep a company afloat by selling cap and trade carbon certificates that they get for free from the governments. How fucked up is that and how is it helping?)

Permits should be auctioned. Anything else is a subsidy, and both of us are against that. However, if the government wants to subsidize someone, they will do it with or without C&T.

What the hell is this negative-sum interaction. You think that only government can stop such things?

They are stopped in a multitude of ways, many of which involve government, many of which do not. Many actually have multiple layers of defenses enacted against them. For example, social pressure, private security measures, and the police all work to prevent theft, and all three systems working together work better than any alone.

[Ron L]

Chad|7.21.10 @ 10:06PM|#
"Take the SO2 cap-and-trade system, for example. It has passed every serious cost-benefit-analysis by an order of magnitude, like most environmental regulations. Indeed, the EPA won't even implement a rule unless it passes CBA by a wide margin."

Cite please.

[SIV]

It doesn't make sense to have two trucks running over-lapping routes.

Dear God make it stop.

[KPres]

"For example, social pressure, private security measures, and the police all work to prevent theft, and all three systems working together work better than any alone."

The role of government is to protect property rights and establish contract law. Once secured, the best outcomes will arise out of the free interaction of self-interested actors.
The only time the government should ever become involved in these interactions is when securing personal property is not technologically feasible.

Social pressure is a chaotic side-effect that generally arises when the government fails in its primary responsibility, but one that rarely leads to desirable outcomes. That's why sane people hate self-righteous moralist pricks like Liberals and Christians.

[.]

Permits should be auctioned. Anything else is a subsidy, and both of us are against that.

Permits to "pollute" will never stop pollution, any more than a healthcare tax for permission to live will stop anyone from breathing. It's all just a means to steal people's money and wealth.

[Torontonian]

"And the idea that the government cannot and does not solve or mitigate many real-world negative-sum interactions is just outright silly."

Back up there Captain Externality...

The existence of externalities (either positive or negative... or both) doesn't necessarily justify interfering with voluntary transactions.

The fundamental nature of a voluntary exchange is that both parties believe they are receiving greater value than they are giving up. And they can both be right... or they can be wrong. But to the relevant parties, the transaction is by its nature positive-sum (otherwise at least one party would have declined).

A government intervention, on the other hand, compels at least one party to act in a way they would not were they free to choose. This is a negative right out of the gate. Since most (though not all) interventions are merely redistributions, with transaction costs attached, they end up decidedly in the negative-sum bucket. Government provision of legitimate public goods (non-excludable and non-rival) could be positive sum, if done efficiently. So, depending on how much value it creates, the government intervention can be positive, zero or negative sum, whereas a voluntary transaction is always positive sum.

When you go invoking externalities as cause for government intervention to regulate voluntary transactions, the burden of proof is yours to shoulder.

So, you should be expected to convincingly answer the following questions:

1. Is the alleged externality directly attributable?
2. Is it quantifiable?
3. Is it possible to assign the cost of the externality to the action?
4. How much will it cost to correct (Measurement costs, transaction costs, administrative costs, enforcement cost, etc.), and will the benefits of correcting the externality outweigh the costs?

Once you've convincingly demonstrated all of the above, I'll happily consider your regulatory solution.

[Chad]

The fundamental nature of a voluntary exchange is that both parties believe they are receiving greater value than they are giving up. And they can both be right... or they can be wrong. But to the relevant parties, the transaction is by its nature positive-sum (otherwise at least one party would have declined).

And here in reality:

1: One or both of the parties not only can be wrong, but can be predictably wrong.

2: Third parties are almost certainly affected, either positively, negatively, or both.

So, you should be expected to convincingly answer the following questions:

1. Is the alleged externality directly attributable?
2. Is it quantifiable?
3. Is it possible to assign the cost of the externality to the action?
4. How much will it cost to correct (Measurement costs, transaction costs, administrative costs, enforcement cost, etc.), and will the benefits of correcting the externality outweigh the costs?

Let's pick carbon as example. Is it attributable? Yep. Virtually all relevant scientists agree on that point. I disagree with your second point. It's always quantifiable, it is a matter of uncertainty in that quantification. For the case of carbon, the estimates for the proper price are centered around $30/ton. The costs of actually running the system itself are trivial, as they are for the SOx system. A carbon tax or C&T passes virtually every cost-benefit analysis anyone has done (even Lomborg's under most assumptions). It is only a question of by how much. Typically benefits exceed costs by 2-10 times.

[Ron L]

Chad|7.21.10 @ 10:13PM|#
"And here in reality:
1: One or both of the parties not only can be wrong, but can be predictably wrong."

Please define "wrong".

[KPres]

It doesn't matter how you define it. If they can be "predictably" wrong, then they can be aware of their own tendency beforehand and make adjustments. Those that fail to do so will lose their economic power, as it should be.

Chad wants you to think that if something is predictable, it's only predictable to the government.

[Chad]

One is wrong when one makes a decision that is not in one's long-term interest. We make all sorts of wrong decisions every day. It is our nature.

[Jordan]

No, that's not "wrong." That's "Chad doesn't like it." Lots of people enjoy smoking, but it certainly isn't in their long term interest. So the fuck what? It's their body.

[BC]

Who the fuck are you to decide what somebody else's long-term interests are?

[wylie]

Ron L|7.21.10 @ 11:11PM|#

Chad|7.21.10 @ 10:13PM|#
"And here in reality:
1: One or both of the parties not only can be wrong, but can be predictably wrong."

Please define "wrong".

"He knows better than you," how's that work for a definition?

[Lazarus Long]

I disagree with your second point. It's always quantifiable, it is a matter of uncertainty in that quantification.

So, Mr. Science here is familiar with nothing more complicated than linear equations if even that? ROTFLMAO!!

[Chad]

Please give me an example of any real-world example of what you are talking about.

Being non-linear does not imply something cannot be quantified. It just changes how you quantify it and what the results look like (ie, statistical distributions).

[Chad]

Uh....externalities! Negative sum transactions!

Damn, I don't remember any other fancy words from my Econ textbook.

[because I can said so]

Chad = moron

[Old Mexican]

Re: Chad,

Uh....externalities!

The fall-back noun for the economics-illiterate. It ends up being "Anything I don't happen to like that I believe people are too stupid to see but me."

[Eric]

Which is sad, because externalities in economics are generally specific damages that occur as the result of a transaction. Leftists have transformed it into whatever the fuck they don't like and want so badly to go away (i.e, trans-fats, liquor, etc). Then, of course, they forget about Coase.

[hmm]

There are positive externalities as well?

I used the term because it is what I assumed he means means by negative-sum since most agreements in the US require all parties consent.

[Tony]

OM the problem is that you don't believe in externalities because they would force you to abandon your dogma. There's not a question about whether they exist, as anyone with a neighbor with an trashy lawn knows.

[KPres]

Externalities are a result of government failure.

[Old Mexican]

Re: Tony,

OM the problem is that you don't believe in externalities because they would force you to abandon your dogma.

No, I don't believe in externalities because nobody has been able to come up with a concept that describes them. It ALWAYS ends up being "whatever I happen not to like and that people are too stupid (but not me!) to see or take into account."

That's not a concept.

[Chad]

I don't need to remember any more, because these two are enough to slap your ideology silly just by themselves. You still have no way to handle them, and therefore pretend they don't exist (or wouldn't exist in Libertopia).

[Eric]

"Pretty much any existing environmental regulation would fit the bill as well."

I'm pretty sure the code on my libertarian decoder ring expired when I stopped believing in Austrian economics, and I'm not the purest guy ideologically around these parts, but, the fuck? ALL existing environmental regulation solves negative sum problems? NONE of it is co-opted by business, or otherwise flawed? Jesus, but you're addled.

[The Libertarian Guy]

Chad won't understand this:

If you want more pizza, you make more pizza. Chad, however, believes there is only a finite amount of pizza, and it has to be microscopically sliced into atoms so everyone gets some... and the box it came in has to be divided up as equally, lest some Rich White Motherfucker get an extra morsel.

Yes, he hates wealth that much. Don't believe anything else he says.

[Tony]

Do you believe there is an infinite amount of pizza? wtf?

[wylie]

Pizza is a renewable resource.

[The Libertarian Guy]

Did I *say* that, Tony?

Oh, I get it... finite/infinite. Because there are only two options.

You zero-summers are a laugh riot.

[.]

Yes, he hates wealth that much. Don't believe anything else he says.

Nah. What he (and Tony) actually hate is others having wealth.

[The Libertarian Guy]

Good point. Most liberals are fine and dandy with having lots of wealth, as long as they're the only ones who have it.

Kinda like the old ruling class in the Soviet Union, only without the death squads.

[Tman]

And Chad comes in like clockwork and knocks over his perfectly erected strawman like the champ that he is.

[Chad]

So are you admitting that the real world is chock full of negative-sum interactions? And as a libertarian, do you believe in ignoring them?

[Tman]

Chad, make an argument. Don't ask me when I stopped beating my wife. If you think something is wrong, then say so and show your reasons why. And stop assuming everyone here applies to your retarded version of what makes up a libertarian.

[Chad]

You are not a libertarian if you do not agree with them in lockstep in all but a handful of issues. One of the wonders of libertarianism is that its logic is internally consistent. That's why it appeals so much to 18 year old geeks.

Then they finally hit puberty and get a gf.

[Lazarus Long]

That's why it appeals so much to 18 year old geeks.

Then they finally hit puberty and get a gf.

How does it feel to not be able to come up with your own arguments? To have to borrow your every phrase from fifteen million assholes that came before you? To lack any sort of expressive creativity? Does it feel like despair? Or is it more bovine in its neural sensation? Can you only keep it up through self deception, or are you not in a position to know or understand the difference?

[Ron L]

Chad|7.21.10 @ 10:15PM|#
"You are not a libertarian..."
Cite, please.

[Eric]

Wait, so you *dislike* internal logical consistency? Is this Chad self-destructing?

[Chad]

It's not the internal consistency I dislike, it is your assumptions from which you build that logical construct that are simply flawed in the real world.

[.]

...it is your assumptions from which you build that logical construct that are simply flawed in the real world.

You have yet to demonstrate that. Exactly what are these "flawed assumptions" to which you refer - or rather, what do you think they are?

[Kant feel Pietszsche]

It takes a world-champion relativist to find fault with logical consistency.

[.]

One of the wonders of libertarianism is that its logic is internally consistent.

Uh, can logic that is not internally consistent even be considered to be logic or logical? Of course, you may not like a philosophy that is logical, but it's kind of difficult to live in this world with an illogical one - except at the expense of others. But then liars, beggars, thieves, and slavers are not especially bothered by living at the expense of others, are they?

[wylie]

Uh, can logic that is not internally consistent even be considered to be logic or logical?

I think so, because of computers, where you can use logical constructs together in a way that the overall structure is no longer internally consistent, but still composed of logical pieces.

I'm just playing with semantics though, your point stands.

[Sam Grove]

It is that the world is full of BOTH positive-sum and negative-sum interactions. Your failure to even admit the existence of the latter (in a fantasy libertarian world, at least) is why you always will be wrong.

No, you missed it. Libertarian argue that in FREE market exchange (where neither party is coerced into participating) there are bilateral positive results. We argue this because we know the world is full of zero or negative sum exchanges because many exchanges are affected in some way by coercion.

It is your failure to see the root cause of negative sum exchanges that puts us in contention, not that they don't exist.

[BakedPenguin]

Your failure to even admit the existence of the [negative-sum interactions] (in a fantasy libertarian world, at least) is why you always will be wrong.

We talk about zero-sum transactions all the time. Ninety percent of everything governments do is zero-sum, or negative-sum. About 95% of private transactions are positive sum.

[DRATER]

"However, by-and-large, libertarians DO believe the reverse: that the rich practically never make the poor poorer." I assume that you disagree with the position that you claim libertarians hold. So then would it be reasonable to assume that you believe that the rich sometimes (or often) make the poor poorer? I can't imagine any situation where the poor voluntarliy allow the rich to take their wealth for nothing in return.

However, I can imagine a number of examples where the relatively poor (Susette Kelo, Daniel Goldstein) are forcefully deprived of their property by rich (Pfizer, Bruce Ratner), often with the help of the state (New London, CT; New York, NY). You've been around here long enough to know that libertarians differentiate between Corporatist(bad) and Capitalist(good).

[alan]

You've been around here long enough to know that libertarians differentiate between Corporatist(bad) and Capitalist(good).

Just to be more precise, or a nit picker, that would be better described as libertarians differentiate between Corporatist(immoral) and Capitalist(amoral). That isn't just a difference of degree but an entire world of good is created through this difference in kind.

[Old Mexican]

Re: Chad,

Non-libertarians [Authoritarians, Chad?] do not believe that the rich "only" get rich by making the poor poorer. However, by-and-large, libertarians DO believe the reverse: that the rich practically never make the poor poorer.

Chad, you're making the exact same faulty argument that you accuse others of making. A rich person CAN make a poor person poorer, simply by becoming a politician. THAT happens a lot, and we libertarians DO believe that.

It is that the world is full of BOTH positive-sum and negative-sum interactions.

Yes, the first is the productive means and the second the political means of adquisition. You could not have put it better.

And so, what are you if a non-libertarian [i.e. against liberty]? An authoritarian? I have said that you were, many times. You are an authoritarian.

[Old Mexican]

Re: Chad,

And the idea that the government cannot and does not solve or mitigate many real-world negative-sum interactions is just outright silly. An obvious example would be the break-up of monopolies, for example.

You mean like the government-run monopolies? Or the union-run monopolies? Or those "monopolies" that the less-than-successful competition accuse their main competition of being? WHICH monopolies would those be, Chad?

Maybe Art pictured you when thinking about Bizarro World...

[KPres]

" It is that the world is full of BOTH positive-sum and negative-sum interactions. Your failure to even admit the existence of the latter (in a fantasy libertarian world, at least) is why you always will be wrong."

Even negative sum interactions create positive outcomes, in that they remove economic power from people who've shown that they're less capable of allocating it efficiently.

[Mike Laursen]

These conversations would go so much better if you just told us what you believe. Then each of us could tell you what we believe.

[Kant feel Pietszsche]

He doesn't BELIEVE anything. Which is why he can ONLY attack the belief's of others.

[KPres]

"that the rich practically never make the poor poorer."

No, the rich rarely make the poor UNDESERVEDLY poorer. They also rarely make other rich people or middle class people that they interact undeservedly poorer.

If a crackhead spends all his money on crack, and the crack-dealer blows all his money on sports cars, then the money ends up in the hands of those invested in the auto manufacturer, who are more likely to allocate in productive and beneficial capital ventures than either the crackhead or the crack dealer.

Never let a sucker keep his money, it's socially disadvantageous. Wealth should be in the hands of those who've shown they're capable and driven to spend it on profitable enterprises. It should be removed from those who've proven otherwise.

The problem with government in a democracy is that the crackhead, the crack dealer, and the responsible investor all have the same political power, meaning society's LIMITED resources will always be misallocated in favor of it's cruder elements.

[Chad]

We have mass unemployment, mass underemployment, and almost 40% of Americans who are working are now working in low-end service jobs with little possibility for improvement or advancement.

Terrorists must have put something in the water, turning a hundred million people into slackers. Either that, or perhaps most of these people don't DESERVE this fate.

[Torontonian]

"Terrorists must have put something in the water, turning a hundred million people into slackers."

I assume you're calling FDR and LBJ terrorists.

The New Deal and Great Society (collectively the Entitlement State) turned generations of Americans into slackers.

Why work harder if nearly half your gains are just going to be taxed away?

Why work at all if the government will pay you to not work?

[Old Mexican]

Re: Chad,

We have mass unemployment, mass underemployment, and almost 40% of Americans who are working are now working in low-end service jobs with little possibility for improvement or advancement.

And the rich are guilty of this because . . .?

TerroristsGovernment-enabled banksters must have put something in the water money supply, turning a hundred million people into slackers. Either that, or perhaps most of these people don't DESERVE this fate.

There. MORE accurate. Don't mention it, Chad, it was my pleasure.

[AlmightyJB]

yawn

[hmm]

scratch.

[JW]

burp.

[GILMORE]

Fart?

[Episiarch]

Turtlehead?

[MWG]

Shart.

[hmm]

Run?

[.]

ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ

[GILMORE]

I think the zero-sum economics argument,

e.g. #6

"6. Their wealth will cause our poverty. They can only get richer if we get poorer."

...is easily the most prevalent.

In college I encountered this, and even for many years afterward. Even among businesspeople. The idea that 'wealth' or resources are finite, and that economics is simply a matter of dividing/allocating money and resources amongst a population, seems to be pretty common.

I remember once trying to explain a "lemons to lemonade" argument to a zero-sum type.. wherein the value of a product exceeded the sum of the cost of the resources and labor input...but they were pretty disinterested in the idea. Anything exceeding the cost of inputs and labor was apparently extortionate capitalist exploitation of some sort or the other. The same person believed strongly in the idea of price controls and rationing of resources. It was a pretty boring hour, but at least they paid for the beer. There was some irony there, but I lack the ability to articulate it properly. Something about how free beer potentially created value in excess of the cost of the product...

[xenia onatopp]

I hear this shit all the time from various liberals and progressives of my acquaintance, claiming they are giving voice to the voiceless masses or some such asininity. Most of these folks are well enough off financially that the irony kind of drips off of their words, but like most of their ilk they are terminally humor-and-irony impaired (I mean, really, they think Al Franken is funny comedically rather than politically).

The people I almost never hear this from are actual poor people. Having been a hood-dwelling poor white girl for a fair portion of my adult life, it has been my observation that poor people see opportunity as opportunity, and understand the concept that it takes money to make money. Without necessarily articulating it in so many words, there is an understanding that those same greedy rich bastards so demonized by upper-middle-class Volvo driving meddlers are their natural allies, the creators of jobs that are a real source of potential financial independence. Poor people get that business=jobs=the chance to start your own small business in your own neighborhood with employed neighbors to support it. They aren't the ones arguing, for example, that WalMart should be kept out of their town for the good of the local economy. Nobody is onto the lies and misconceptions of the poverty industry more than the poor themselves.

[PapayaSF]

Well said, xenia.

[Mike Laursen]

What you said. I grew up in a fairly poor family myself, and what you say is true from my experience.

[Ron L]

GILMORE|7.21.10 @ 8:42PM|#
"I think the zero-sum economics argument,
e.g. #6
"6. Their wealth will cause our poverty. They can only get richer if we get poorer."
...is easily the most prevalent.
...The idea that 'wealth' or resources are finite, and that economics is simply a matter of dividing/allocating money and resources amongst a population, seems to be pretty common...."

And one with the most obvious falsification:
At some one time, the human population of the earth was 10 people. They scratched, dug, grappled and grabbed for food each day while living under what shelter they could find. And died at, oh, 15 years of age.
We now have a population of some 7Bn people, every one of which (except those living in a Worker's Paradise) would scream bloody murder to live like those 10.
Now, those who presume a zero-sum economy should have to explain how we went from 10 people living in what we'd call abject poverty to some 7Bn mostly living in what we'd call prosperity by 'dividing the pie'.
Those skinny slices must somehow get thick after slicing.

[European Union]

The country with the biggest GDP wins.

Fuck, yeah!

[Greece]

Uhm, I have something to tell you Germany, England and France. You wont like this. You may wont to sit down. I gave you herpes. Treatment is going to exact a wallop on that GDP inflated by euro evaluation.

[hmm]

C
o
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n
t
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y

[Tman]

I just read this description of the journolist kerfulle over at Justsayanything and had to post it cause I made me lol.

"the Juicebox Mafia"

Did iowahawk come up with that? Classic.

[dbcooper]

Yawn. Open borders fantasy. Yawn.

[Heroic Mulatto]

If anything is a "fantasy", it's thinking that a flag is anything other than a piece of cloth.

[.]

Dude, the "fantasy" consists in ignoring the fact that a flag means more to many people than just another piece of cloth would - which is partly what makes it a flag in the first place.

[Heroic Mulatto]

If anything is a "fantasy", it's thinking that a flag is anything other than a piece of cloth.

[Heroic Mulatto]

How the hell did that turn into a double post? Goddammit, reason!

[?]

C
o
u
n
t
r
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"Reich" means that, too.

[Jason]

I'd use "Land", not "Reich".

"Reich" is more like "realm", "kingdom", or "empire" (although for the latter two are more precisely K?nigreich or Kaiserreich).

In pre-Nazi Germany, "Reich" would have been used kind of like when Americans use "Federal".

[prolefeed]

It is that the world is full of BOTH positive-sum and negative-sum interactions. Your failure to even admit the existence of the latter (in a fantasy libertarian world, at least) is why you always will be wrong.

I'm curious, Chad, how many times you voluntarily entered into a negative-sum transaction where you were on the losing end of it.

I'm guessing hardly ever, unless you're a complete idiot incapable of judging your own self-interest.

Yes, sometimes a private enterprise rips someone off, or the other person makes a poorly calculated guess about the value of something, and regrets the purchase later. But, this generally only happens once, with no possibility of repeat business.

Whereas, this is the norm for many people's interaction with government.

[hmm]

I think he's arguing negative externalities and not necessarily a game where everyone loses. I'm guessing his understanding of game theory and decision theory isn't all that strong.

[Chad]

The rabble is completely incapable of acting in its own best interest, except when it votes. The individual is only qualified to determine a course of action when it is not his own.

[KPres]

"The rabble is completely incapable of acting in its own best interest, except when it votes."

Yeah, OK.

Please see Expressive Interests, Voter Irrationality, Moral Hazard, Rent Seeking, Voters Paradox, etc, etc, etc.

[Jason]

I think this Chad is a spoof.

[Kant feel Pietszsche]

Practical example: If you purchase a cheap plastic toy for $50 (assuming you weren't forced into the transaction), you have no one but yourself to blame...

[.]

You mean like an I-phone? Oh wait - those cost more than $50. Sorry. 🙂

[twv]

The author of the Mises Blog post is Art Carden, with an "r" in the last name, not "Caden." I didn't see a correction in all the commentary following, though I skimmed much of it.

[PapayaSF]

Believe it or not, I'm going to partially defend Chad. He goes off the rails as usual, but there's a core of truth early on. There is a sort of blindness among ideologues of all stripes who think they have 100% of the truth, and that applying their principles at full strength everywhere will solve all problems. Libertarians are not immune to this failing. I say that as a self-described moderate libertarian, one who has strong leanings but thinks it's safe to assume that any human ideology is an imperfect construct against the complexities of the real world.

Open borders is a good example. Many arguments amount to "immigration is a Good Thing, thus more is better." In theory, the benefits always outweigh the costs, and that settles it. Unfortunately a basic principle of real life is that it's always (or almost always) possible to have Too Much of a Good Thing. Can anyone convincingly argue that it would be Good for 500 million people move to the US this year? Of course not, it would be a giant refugee crisis. Even a tenth of that would be a crisis, a social and political and economic mess. (In the short term, at least, but we all live in the short term.) Once you concede that, you're in the tall walls/wide gates camp and we're just discussing details. (And no wussing out by saying it wouldn't happen in the real world: all I need is a concession that it's possible to have Too Much.)

But look where that leaves us: arguing that government can sometimes (but not always) do something right. Libertarians aren't anarchists, and so what's the harm in conceding that? Government can be a benefit... sometimes. Rejoice, libertarians! We now face our opponents in the middle of the field, for they have just conceded there are (or should be) practical limits to government, that of course government intervention cannot be assumed to be a good thing.

So how can we tell when it's justified? Obviously we need objective data about specific cases. Let's look at history. Let's apply cost/benefit analysis to all government functions. For every law or government program, let's exempt some areas as "controls," the better to analyze the results of the law or program. Of course all agencies need regular, thorough audits and full public transparency, to end waste and fraud. I'm sure others can think of more ways to study the real effects of government. I'm not afraid of experiments and objective data... but I'll bet Chad and Tony and Shrike are. If they aren't, they sure should be.

So I say to libertarian purists, for the price of a small concession you are out of the political fringes of the debate and smack in the middle. Your opponents are squirming, forced to use cost/benefit analyses, real-world tests, audits, and transparency to prove that the vast bulk of government programs are worthwhile. What libertarian wouldn't be happy to bet on the results?

Once our present leviathan of a government is a shrunken remnant of its former self, I welcome purist arguments against remaining, lonely bits. But we won't get to that point using purist arguments from the start.

[Eric]

One reason is that libertarianism isn't strictly a complaint against the profitability of government. Centralized control is typically unprofitable and wasteful, but more importantly, is the taking of what is rightfully your control of self. I'm also a moderate libertarian, and believe that government has a place in correcting some externalities, but one problem with cost-benefit analyses is that what is often the greatest cost in the analyses, freedom, isn't accounted for at all. Incrementalism is fine as far as strategy goes, but the endgame should be to have areas of life where people don't violate each other's rights as free from government interference as possible.

[PapayaSF]

Of course, freedom should be included in the analyses, but even without it, most analyses will come down on the libertarian side in a purely economic contest.

[alan]

On what basis would you determine that policy is a more rational determinant for immigration patterns than the market? From the real world?!? Take a look around. Policy gets implemented every day, there are departments devoted to it, and it is nothing more than what it will always be -- a cluster fuck of disingenuous and conflicting design. You wont even get two people of the same rank in those organizations to agree to what should be done, or what their role in the system should be. Why not? Because it is policy implemented by people of whom it is not a matter of life or death. In fact, to put food on the table the best thing they can do is keep their heads down, mouths shut and perform with a high degree of mediocrity. The few people I know in that field, like inspectors of cargo ships, I would not trust to guard a twinkie, and in one case bragged to me that he could be bought with a case of Mexican beer to look the other way. His type reigns supreme in the ranks of the government from what I have seen with my own eyes and yet I'm suppose to believe that the Washington paper chase is a more significant factor in the equation than the actions of those charged with implementing policy?

I don't even advocate changing the law, 'comprehensive' or bit by bit, piece by piece. It doesn't matter what you do on that front anymore than it matters if you escalate or end the War on Drugs matters as a factor in their availability of drugs. It is seriously unserious to take the law seriously in either the case of immigration or drug distribution. In both cases, the market ultimately wins out for the fact the actors involved really do have a life or death purpose to do A to accomplish B that doesn't exist in the bureaucracies.

[The Angry Optimist]

(And no wussing out by saying it wouldn't happen in the real world: all I need is a concession that it's possible to have Too Much.)

No sense injecting reality, I have a Sophistic point to make!

[kilroy]

any human ideology

Is there another kind?

[T]

Research has proven cats are natural fascists.

[Old Mexican]

Re: Papaya SF,

Can anyone convincingly argue that it would be Good for 500 million people move to the US this year?

Depends on what you mean. Do you mean uprooting them and placing them in the middle of Montana to wander off, or do you mean people coming from other places renting apartments or buying houses or land, setting shop or businesses, engaging in trade and exchange of private property?

Look, most people still harbor several Merchantilist fallacies in their head, with images of immigrants getting of boats in Ellis Island being counted and deloused. That's not how people migrate, much less these days - they buy a plane ticket and travel to the US, find an apartment, buy furniture, find work, go to work, pay their extorsion money to the criminal gang that runs the government, etc. Some of them cross the border in a clandestine way but, again, they find lodging through people willing to VOLUNTARILY trade with them, find work, pay their extorsion money to the Local Boss (which we call with a sick sense of humor "government"), etc.

Several of you think that these people come here to "take our jobs". NOBODY can "own" a job, that is ridiculous. A person must be willing to OFFER one a job, you cannot simply make that person offer you one just because you happened to be born in North Dakota instead of India - that employer is NOT your slave, an you do NOT own his money.

The other fallacy is that immigrants come to the US for the free services. If that is the problem, then why not simply NOT offer free services? They're not free to begin with, and they are paid through looting productive people (called THIEVERY), so they should be discontinued.

[PapayaSF]

I think you're wussing out by focusing on details. It doesn't matter how the 500 million or 50 million get here, my point is that it would be an economic catastrophe. More is not always better, and it's not "merchantilist" to understand that.

Sure, I'd like to end free services for illegals, but as I've argued elsewhere, that's just impractical politically. Saying that's how to solve illegal immigration is to say: don't solve hard problem X, solve problem Y... which is 10x or 20x harder.

Also, you are ignoring the cultural issues involved.

[Chad]

Thanks Papaya. You said it well.

And yes, we can go data on data anytime. Indeed, that's precisely why I am NOT one of you anymore.

[Contemplationist]

Sorry for the threadjacking but THIS is far, far too scary NOT to be on the REASON frontpage. Dude, an ACTUAL Commie conspiracy. Reason, whats not to like?

[turtleface]

i'm helping!

[Mr Whipple]

Innovation shot through the roof after Ma Bell was killed. The babies were generally eaten or killed off themselves, but who cares about individual companies?

Really? What about Verizon?

[Old Mexican]

Re: Tony,

Re: Tony,

What you call freedom is actually slavery to the market--good at making iphones, not good at securing peace and justice for all.
How sweet - you want the return of Paradise. No scarcity, no toil or moil.
What you call freedom is actually slavery to the market--good at making iphones, not good at securing peace and justice for all.

How sweet - you want the return of Paradise. No scarcity, no toil or moil.