What does a Free Market mean to you?

[JoelKatz]

I dont know if you noticed but world gravitates towards socialism , it is your driver that choses this direction yet it is you who is screaming

Then how do you explain the Magna Carta? The United States? The collapse of Communism? I'm not screaming, I'm thrilled.

If you're concerned about species extinction, you want technology to advance as quickly as possible. An asteroid or other cosmic event is just a matter of when, not if. We had better be able to leave this planet when it happens or it's all over.

There is no profit in leaving the planet. At least it wont be until it is totally devastated or we run out of resources.

Fortunately, that's not true. There's lots of profit in satellites, space tourism, asteroid mining, and so on. The longer we wait to do it, the better we'll be able to do it. Too soon is just as bad as too late. In any event, command economies face the same problem of balancing long term and short term progress. There's no magic solution.

[hugolp]

Competition is a form of cooperation. Personal freedoms don't interfere with cooperation. If you're not free not to cooperate, it's not cooperation, it's predation. (Of course, there do have to be enforced rules. Your freedom stops at me.)

Well said. Its funny to me how a lot of people that get their mouth full talking of cooperation in reality dont want cooperation. According to this way of thinking slaves are not being forced to work, they are cooperating...

The unemployment we have now was caused by an atypical crisis. (And yes, even a perfect libertarian utopia could have such crises. Free markets don't make everything magically perfect.)

I disagree with you here. This crisis has not been atipical, in the sense that it was spected and we have seen similar crisis in history. Also, in a free market we would not see crisis like this. Some time of corrections and some periods of readjustment with somehow higher unemployment than usual could be, but it would never get to the level of discordination that has produced this huge crisis.

[JoelKatz]

I disagree with you here. This crisis has not been atipical, in the sense that it was spected and we have seen similar crisis in history. Also, in a free market we would not see crisis like this. Some time of corrections and some periods of readjustment with somehow higher unemployment than usual could be, but it would never get to the level of discordination that has produced this huge crisis.

To some extent, the crisis was caused by government-imposed rules on mortgage backers that pressured them to extend loans to people with progressively less and less ability to pay them should the housing market drop. And also, to some extent, the crisis was caused by government borrowing.

However, another big factor was a bizarre one-off event -- the specific risks of securitizing mortgages. It wasn't generally understood that if a mortgage issuer is going to play hot potato and sell the mortgage as soon as possible, all the normal incentives to ensure the long-term stability of the mortgage go away. This was an unforeseen consequence of innovation of mortgage securitization. I see no reason it could not have happened precisely the same way under any other economic system. It was simply a lack of omniscience.

I do agree that some of the other factors could not have occurred in a completely free market. But other similar factors could have occurred instead. So while, of course, the crises couldn't have happened precisely the same way under any other system, I don't see any particular reason you couldn't also have had a perfect storm of unexpected crises in a perfect Libertarian utopia.

Again, though, the solution is basically prosperity. That's what helps you cushion and weather a crisis. That what changes the concept of a crisis from "bodies are piled up in the streets" to "we had to downgrade to basic cable".

[jtimon]

When I talk to my friends about private law and the like they just think I'm kidding.
So I would be happy if the state just monopolizes violence and protects private property (of course, excluding so called intellectual property).
Anarchy is impossible in the "near" term (say 10 years), but there's many many things that governments are doing and should not.
A flagrant example is giving commercial banks the privilege to issue money (regulated fractional reserve) and when they fail in their cartel business, tax their citizens (or get debt in their name) to cover their losses. Private central banks like the fed are just like a bad taste joke.
But public central banks like the ECB (please correct me if the ECB is private) aren't much better.

The unemployment we have now was caused by an atypical crisis. (And yes, even a perfect libertarian utopia could have such crises. Free markets don't make everything magically perfect.)

I disagree with you here. This crisis has not been atipical, in the sense that it was spected and we have seen similar crisis in history. Also, in a free market we would not see crisis like this. Some time of corrections and some periods of readjustment with somehow higher unemployment than usual could be, but it would never get to the level of discordination that has produced this huge crisis.

Although probably with sound money and without fractional reserve you cannot have crises as bad as the current one (the worse is still to come), I think the root cause of so called business cycles is basic interest, which I don't think is needed in a free market.

EDIT: JoelKatz made a good analysis of the current crises. I agree, there can always be crises within a free market that are caused by wrong decisions.
I still disagree with his view of the effects of deflation in the financial and real capital markets.

[hugolp]

To some extent, the crisis was caused by government-imposed rules on mortgage backers that pressured them to extend loans to people with progressively less and less ability to pay them should the housing market drop. And also, to some extent, the crisis was caused by government borrowing.

However, another big factor was a bizarre one-off event -- the specific risks of securitizing mortgages. It wasn't generally understood that if a mortgage issuer is going to play hot potato and sell the mortgage as soon as possible, all the normal incentives to ensure the long-term stability of the mortgage go away. This was an unforeseen consequence of innovation of mortgage securitization. I see no reason it could not have happened precisely the same way under any other economic system. It was simply a lack of omniscience.

I do agree that some of the other factors could not have occurred in a completely free market. But other similar factors could have occurred instead. So while, of course, the crises couldn't have happened precisely the same way under any other system, I don't see any particular reason you couldn't also have had a perfect storm of unexpected crises in a perfect Libertarian utopia.

Again, though, the solution is basically prosperity. That's what helps you cushion and weather a crisis. That what changes the concept of a crisis from "bodies are piled up in the streets" to "we had to downgrade to basic cable".

We are entering the terrain of speculation here, but the case where all this financial "innovations" would not have occurred in the way they did in a free market is easily defensable. In fact, proving that it would have happened in a free market is hardly defensable.

The banking system earns money by charging a fee from transfering savings into investment, the fee being the difference between what they get from the investment and what they pay to the depositor. So the banks are always looking for new investments, prioritazing the more profitable ones, and going down until they dont have more money to lend. But when they have access to cheap money (because of the monetary system imposed by the government) they start to look for more and more investments, lowering their standards. They are not restrained by the amount of savings. You can see this all through history. When inflationary policies are pursue, there is an explotion of speculation and new financial vehicles appear. Obviously we have now computers and we have been able to produce a financiarization not posible until now. But the process is not new or unexpected.

Also, the titularization has been posible because of the trust in the rating agencies. Without them giving AAA's left and right it would not have happened. And the rating agencies are an oligopoly created by the USA government and later endorsed by the EU countries and others around the globe. With competition they would not have been able to rate in the way they did and the process would not have happened or would not have gotten so big.

As I said, small corrections and short term crisis are posible in a free market. People make mistakes, its unavoidable. But this crisis has the government written all over, including in the titularization process.

[Murwa]

Yet you ignored the most crucial part of my augments again.
Free market mechanism you describe is not a cause of somehow drop in produced pollution as we see it today.

Then how do you explain the Magna Carta? The United States? The collapse of Communism? I'm not screaming, I'm thrilled.

MC - would you like to have a king above you ? Me no.
USA - USA is owned by big corporations . Capitalists became so big and powerful they destroyed free market and any competition and took over a country.
The collapse of Communism - you mean the collapse of state capitalism dictatorship , no wonder it has collapsed.

Fortunately, that's not true. There's lots of profit in satellites, space tourism, asteroid mining, and so on. The longer we wait to do it, the better we'll be able to do it. Too soon is just as bad as too late. In any event, command economies face the same problem of balancing long term and short term progress. There's no magic solution.

Space satellites is hardly leaving the planet.
Space tourism is hardly leaving the planet too for more than a trip.
Asteroid mining - yeah it will be profitable when we strip our planet from resources and this course of action is obviously retarded ( strip resources with hope we can mine more from space )

We have been to the moon how long ago ? Where is progress is a space exploration ? There IS NO PROFIT thus it aint happening.
Yeah we should definitely implement full free market and disband NASA and European Space Agency.

[tsvekric]

Hypothetically, imagine an economy that requires about 1/10th of the amount of labor we have require currently.  We get a point where working for a sustaining life is not feasible.  Most people who are alive cannot work - so where do they money?

I honestly can't see how that could happen. If we have all these people whose needs are unsatisfied, how can there also be nothing to do?

Their needs are unsatisfied because they have no income.  How can there be jobs created to fulfill these needs if there is no money in it?

The current unemployment is not caused by technology providing everything everyone could ever want without anyone needing to exercise any effort. If we ever had that 'problem' the solution would be simple -- you could live like a king on charity.

The unemployment we have now was caused by an atypical crisis. (And yes, even a perfect libertarian utopia could have such crises. Free markets don't make everything magically perfect.)

But with 20%+ of people jobless - and many of those willing to work, just unable to find work - where do they get money?  I've seen no evidence that removing the minimum wage and moving towards other free market measures would even make up for this amount.  There is also an increasing sector in the US that is financed by government spending - jobs that would otherwise not be created because the positions are not economically viable for private firms. 
In the state of our society we can no longer support everyone by means of working for wages.  What now?  Our current solution is a welfare system and government checks, programs, employment, etc.  I think it is an unsatisfactory solution that is unsustainable in the future - but what else?  Is there a solution that does not involve government intervention?  Because I really cannot see anything else reliably working.  I'm becoming a free market socialist.

[Rassah]

But with 20%+ of people jobless - and many of those willing to work, just unable to find work - where do they get money?  I've seen no evidence that removing the minimum wage and moving towards other free market measures would even make up for this amount.

Unemployment rate is about 4.5% for those with a college education. That suggests that the people who can't get jobs should maybe focus on getting higher education, or at least going to a school specializing in some profession.

[kjj]

But with 20%+ of people jobless - and many of those willing to work, just unable to find work - where do they get money?  I've seen no evidence that removing the minimum wage and moving towards other free market measures would even make up for this amount.

Unemployment rate is about 4.5% for those with a college education. That suggests that the people who can't get jobs should maybe focus on getting higher education, or at least going to a school specializing in some profession.

Ugh.  Education is a whole new can of worms in a thread that already had enough problems.

Consider this theory:  Having a college education does not cause employment.  Employment and college are both effects of being the sort of person that normally goes to college.

[hugolp]

Their needs are unsatisfied because they have no income.  How can there be jobs created to fulfill these needs if there is no money in it?

The current unemployment is not caused by technology providing everything everyone could ever want without anyone needing to exercise any effort. If we ever had that 'problem' the solution would be simple -- you could live like a king on charity.

The unemployment we have now was caused by an atypical crisis. (And yes, even a perfect libertarian utopia could have such crises. Free markets don't make everything magically perfect.)

But with 20%+ of people jobless - and many of those willing to work, just unable to find work - where do they get money?  I've seen no evidence that removing the minimum wage and moving towards other free market measures would even make up for this amount.  There is also an increasing sector in the US that is financed by government spending - jobs that would otherwise not be created because the positions are not economically viable for private firms.  
In the state of our society we can no longer support everyone by means of working for wages.  What now?

Why do you thing the economy can no longer support everyone by means of working for wages?

Do you think the present unemployment situation is due to technology or is due to the discordination that produced the crisis?

Our current solution is a welfare system and government checks, programs, employment, etc.  I think it is an unsatisfactory solution that is unsustainable in the future - but what else?  Is there a solution that does not involve government intervention?  Because I really cannot see anything else reliably working.

The malfare state is not a "current solution", its a sheme to keep control over the system.

I'm becoming a free market socialist.

This is the best website in the Internet on free market socialism: http://c4ss.org/ (highly recommended for everybody, and they have been supporting of Bitcoin). Also, this blog is one of the oldest left-llibertians blogs that exist: http://aaeblog.com/

[Rassah]

But with 20%+ of people jobless - and many of those willing to work, just unable to find work - where do they get money?  I've seen no evidence that removing the minimum wage and moving towards other free market measures would even make up for this amount.

Unemployment rate is about 4.5% for those with a college education. That suggests that the people who can't get jobs should maybe focus on getting higher education, or at least going to a school specializing in some profession.

Ugh.  Education is a whole new can of worms in a thread that already had enough problems.

Consider this theory:  Having a college education does not cause employment.  Employment and college are both effects of being the sort of person that normally goes to college.

huh, good point. I never thought of this beyond thinking about low v.s high skilled workers in a supply-demand system, where high skilled are always in lower supply than needed.

[jgraham]

On one level you appear to be saying that pollution levels are independent of the presence or absence of a "free market".   Is that correct?

No. And that wouldn't necessarily be a good thing anyway since it's possible that the pollution level is below the ideal level. In fact, for people polluting their own property in ways that don't harm others, I suspect our society has pushed the pollution level well below the optimum level.

Optimum level for what?

I'm not sure I understand completely what you're asking

Well primarily I'm saying that "Optimum" in English usually takes on one of two senses.  One in which it is self-referential meaning "the most possible".  In that case the "optimum level for pollution" would be "The most pollution possible" the second sense requires a reference to external criteria to judge how close the value is to it's goal.  I.e. "Optimum level for pollution to maintain our current standard of living".  Since you don't seem to be talking about the former and you haven't given any clues to what quality the later sense is being measured by.   It seemed natural to pose the question.

First, I hope we agree that the optimum level of pollution isn't none at all. No pollution would mean we couldn't even breathe, lest the carbon dioxide we exhale worsen global warming. We couldn't even use fire to cook our food. And of course, the optimum level of pollution isn't as much as we can possibly create. There are all sorts of things we could do that, but for the pollution they'd produce, might be great ideas but when you factor in the pollution, are clear losers.

It appears here that you are defining the term "pollution" in a sense where any level of some element is pollution.  That's neither how I would use the term nor how Wikipedia and Mirriam-Webster appear to use the term (assuming a modern sense of 'contaminate') .  So no, I'd not call any amount of carbon dioxide "pollution".   So even if I agree the "optimum level" of carbon dioxide in the atmosphere (or produced by humans) is not zero.  I don't think we will get much further without you answering the question: "Optimum for what?"

Now, it doesn't immediately follow that there is some perfect mathematically optimum level of pollution.

Why?  Given what assumptions?

Presumably, for any precisely defined X, there's a level that maximizes X, but we get a circularity when we try to figure out what the X should be.

What is X? A function?  A value?

So, by optimum level of pollution, I mean the level of pollution that maximizes X, for the optimum value of X.

How is the maximal value of X different than the optimum value of X?

I don't know precisely what X is,

No kidding.

but I do know approximately. Health is good. Wealth is good. Disease is bad.

That's oversimplified to the point of being nonsensical.  You don't create "health".  You create medicine.  While you could state one of the goals of medicine as "homeostasis".  Every medicine that has an effect and has a degree of risk both in the pollutants created by the manufacturer but also in the auxiliary effects of the medicine.  This can't be what you call "health" because it doesn't take into account fitness of purpose or peoples personal goals. i.e. Should someone take an NSAID?  Should they take one if they don't have an headache?  Some people take NSAIDs others refuse.  Which one is right? Based on these statements can you say that the creation of NSAIDs was "good"?

Similarly "wealth" isn't just more money in my pocket - it would be a question of what I would have to do to get the wealth.  Most people I know are in the position to scale their income by say 10%-20% however they don't because it's not worth it.  

Is disease intrinsically bad?  What kind of disease?  With what kind of prognosis?  Was the disease the result of something we did?

One of the reasons we need a free market is because without one, we don't have any ability to compare things. If there were no exchanges, how many dollars is one bitcoin worth? Nobody could ever even have any clue. I mean optimum in the mix of everyone's weighted rational preferences.

Now this sounds like equivocation again.  Seemingly I can compare things.  Does that mean we have a "free market"?  However it would seem you're not advocating things staying the way they are.  So what you appear to want is a "more free market".  However arguing that it allows me to compare things - something I appear to be already capable of - hardly makes your point.

Yes, that's not precise. Sorry, that's just the way it is.

I would have settled for cogent.

[jgraham]

For everyone else, I'll let you in on a little secret.  If someone starts pretending that they needed more precise definitions for common words that everyone understands and uses every day, sit up and pay attention, because a sohpist is probably about to snare you up in his tar pit.  The same goes if they start to feign bafflement at a language construction that wouldn't confuse a three year old child.

Wow, classical use of both "sophist" and "ad hominem" in the same post.  A sprinkling of "appeal to popularity" and perhaps some "prejudicial language".

I don't know if there's an award for "logical flaw density in a single post" but should you decide to go pro.  You've got my vote.

[kjj]

For everyone else, I'll let you in on a little secret.  If someone starts pretending that they needed more precise definitions for common words that everyone understands and uses every day, sit up and pay attention, because a sohpist is probably about to snare you up in his tar pit.  The same goes if they start to feign bafflement at a language construction that wouldn't confuse a three year old child.

Wow, classical use of both "sophist" and "ad hominem" in the same post.  A sprinkling of "appeal to popularity" and perhaps some "prejudicial language".

I don't know if there's an award for "logical flaw density in a single post" but should you decide to go pro.  You've got my vote.

Logical flaws only exist when there is a logical debate.  Sophistry is the art of avoiding logical debate while looking like you are participating.  Since you aren't participating, I don't feel that it is flawed to point that out.

We could, I suppose, debate whether or not you are actually avoiding the other debate, but I think I already know how it will end up.

[JoelKatz]

If you don't know what 'optimum' could mean, you can't possibly believe that a free market could make pollution worse. Worse would have to mean further from optimum. So we already agree on the only point I was trying to make.

[jgraham]

For everyone else, I'll let you in on a little secret.  If someone starts pretending that they needed more precise definitions for common words that everyone understands and uses every day, sit up and pay attention, because a sohpist is probably about to snare you up in his tar pit.  The same goes if they start to feign bafflement at a language construction that wouldn't confuse a three year old child.

Wow, classical use of both "sophist" and "ad hominem" in the same post.  A sprinkling of "appeal to popularity" and perhaps some "prejudicial language".

I don't know if there's an award for "logical flaw density in a single post" but should you decide to go pro.  You've got my vote.

Logical flaws only exist when there is a logical debate.

Depends on what you mean.  A "debate" might imply a discourse of two sides on some topic.  A logical flaw however can exist in any argument.  An argument being a series of statements which attempt to force (to various degrees of strength) a conclusion.  i.e. kjj is a sophist as evidenced by...

Perhaps you mean that you are not arguing that I am a sophist and are just stating it?

Sophistry is the art of avoiding logical debate while looking like you are participating.

That may be your definition but classically (perhaps you didn't mean it that way after all - that's a point in favor of obtaining definitions) sophists considered persuasion as subordinate to reason.  So for example calling someone a sophist without actually supporting your statement with argument and evidence could be an example of classical sophistry.  Plato commented on this very thing in the Gorgias dialogue when he said that Gorgias favored opinions over the truth.  The idea of asking "What is <something>?" is actually Plato's primary method of argumentation not Gorgias.  Gorgias would avoid providing definitions.  Likewise appealing that "everyone knows" something might also be an example of sophistry in the classical sense.  The modern sense is more about a deceptive argument.  I don't really see what's deceptive about my arguments.

Since you aren't participating,

Participating in what?  Apparently, I am participating in something - my dialog with JoelKatz - for example.   I'm engaging in the non-sophist ideal of getting people to define terms.  I have shown some logical consequences of particular lines of reasoning.  Why would you call me a sophist?

[jgraham]

If you don't know what 'optimum' could mean,  you can't possibly believe that a free market could make pollution worse.

Did you somehow miss that this whole foray into "optimal" is to interpret your words...did you not get that?  Really?

So what possible good would the cases that I might like to optimize our pollution levels for (given that by "pollution" you seem to mean something silly and I seem to be using a more standard definition) be in interpreting the following phrases "I suspect our society has pushed the pollution level well below the optimum level." or "Technology tends to reduce the optimum level of pollution".

As ever the point is that "optimal" in English requires external criteria.  If you want to have an intelligent discussion on the subject of pollution (not sure if this assumption is justified) then don't we need to know what your external criteria is? That is, what case you are optimizing for?  If I don't know that.  How are we even sure we are talking about the same thing?

So please answer the question: "Optimal for what case?" Otherwise it's just a recipe for what I would call: "Talking past each other".

Worse would have to mean further from optimum. So we already agree on the only point I was trying to make.

Equivocation.  Only true if we both have identical criteria we are trying to optimize pollution for.

Is this really so hard? For example without knowing what Intel architecture I'm going to run a piece of assembly code on.   Can't the code be speed optimal for one architecture and sub-optimal for another?

[JoelKatz]

If you do not have the affirmative belief that a free market will make pollution worse, then I have no quarrel with you. All I'm saying is that such a belief is unjustified. It seems to me that you do not have that belief and, better, have found another way to make my argument -- the notion of "worse" pollution is incoherent or too confusing to use. Great, I'll accept that as another way to make my point.

[kjj]

We could, I suppose, debate whether or not you are actually avoiding the other debate, but I think I already know how it will end up.

Depends on what you mean.  A "debate" might imply a discourse of two sides on some topic.  A logical flaw however can exist in any argument.  An argument being a series of statements which attempt to force (to various degrees of strength) a conclusion.  i.e. kjj is a sophist as evidenced by...

Perhaps you mean that you are not arguing that I am a sophist and are just stating it?

Sophistry is the art of avoiding logical debate while looking like you are participating.

That may be your definition but classically (perhaps you didn't mean it that way after all - that's a point in favor of obtaining definitions) sophists considered persuasion as subordinate to reason.  So for example calling someone a sophist without actually supporting your statement with argument and evidence could be an example of classical sophistry.  Plato commented on this very thing in the Gorgias dialogue when he said that Gorgias favored opinions over the truth.  The idea of asking "What is <something>?" is actually Plato's primary method of argumentation not Gorgias.  Gorgias would avoid providing definitions.  Likewise appealing that "everyone knows" something might also be an example of sophistry in the classical sense.  The modern sense is more about a deceptive argument.  I don't really see what's deceptive about my arguments.

Ever faster than I had expected.

[jgraham]

If you do not have the affirmative belief that a free market will make pollution worse, then I have no quarrel with you.

That would depend...don't we need to have similar ideas of the term "pollution" and "worse" before I can agree or disagree to that statement? or at least don't I need to understand your usages of those terms?  Right now I'd guess that either you are deliberately attempting to keep your definitions hidden or you simply do not know what you mean.

All I'm saying is that such a belief is unjustified. It seems to me that you do not have that belief

...and yet it seems you are not in a position to make that determination.   Unless you also believe that it would have made little difference if you had made your posts using Putonghua.

Let me see if I can help you a bit here.  Sure, at first it sounded like you were using terms that were similar in definition to mine (or more accurately I assumed a degree of colloquialism).  Later as your usage got farther and farther away from useful reference points (even - in some cases - the dictionary) yes I found it harder to determine if I in fact disagree or agree with you.  So, the reasonable thing to do is to get you to define what you are talking about.  That doesn't mean I don't disagree with you just that at this point it's difficult to tell.

and, better, have found another way to make my argument -- the notion of "worse" pollution is incoherent or too confusing to use. Great, I'll accept that as another way to make my point.

Which would be equivocation again.  Yay you!  Your point would only and ever be that given an incoherent definition of "worse" you can not make the determination if something is worse or not.  However when you apply that to someone elses' argument they may well have a reasonably well defined definition of the term.   They have real ideas about what concrete societal indicators they wish to optimize for.  In other words they might have a real argument - as opposed to a sophist's (shoutout to kjj for getting me to read Plato again) defense of empty words.  Ummm..touche?

Not to mention that it's even questionable if you can truly label the statement "a free market will make pollution worse" as "unjustified" given that you have chosen an incoherent definition of various terms.

Ever faster than I had expected.

You caught me at a good time.  Otherwise you would have had to wait until the morning to get your ass handed to you.