Guiding Markets

[Hunterbunter]

Man up and grow a pair. Move to Afghanistan and set up your business there. I promise that you won't be bothered by the big bad government.

Bad choice of country. I'm sure the US empire will happily bomb my business along with a couple hundred innocent civilians and just write it off as collateral damage.

Afghanistan was far better off without the US government, that's for sure.

Hey, let the market handle it. I'm sure you can find someone to employ to run security for you. I hear the Mujahedin are fairly well trained and equipped.
Or do you perhaps prefer the security that a somewhat functional state has to offer? That comes at a cost you know.

I rather choose from various forces than can actually dissolve from failure to provide competitive services rather than choose from only one poor monopoly.

Yes, the market would serve my needs greatly.

I'm getting the impression that you'd rather stand on a soapbox in a socialist state than be in a truly free market with no leadership, and no coherent state...is this true?

Variety comes at it's own cost - the time and resources lost by people wasting time being the force that failed, because it is never decided in a day. I believe private business is just as macro-economically inefficient as monopolies (state or otherwise), but for different reasons.

[FirstAscent]

Variety comes at it's own cost - the time and resources lost by people wasting time being the force that failed, because it is never decided in a day. I believe private business is just as macro-economically inefficient as monopolies (state or otherwise), but for different reasons.

Competition is good, but it needs guidance. In the absence of guidance, businesses evolve and survive to become very effective at exploiting opportunities where they present themselves, whether it be exploitation of the environment, exploitation of loopholes, exploitation of government officials, and naturally, exploitation of the consumer. The key is to guide businesses in competition to become efficient at offering efficient solutions to the consumer.

There is a big difference in a company which makes money because it is efficient at exploiting, and a business which makes money because it efficiently consumes resources to make a product that is efficient.

[Hunterbunter]

Variety comes at it's own cost - the time and resources lost by people wasting time being the force that failed, because it is never decided in a day. I believe private business is just as macro-economically inefficient as monopolies (state or otherwise), but for different reasons.

Competition is good, but it needs guidance. In the absence of guidance, businesses evolve and survive to become very effective at exploiting opportunities where they present themselves, whether it be exploitation of the environment, exploitation of loopholes, exploitation of government officials, and naturally, exploitation of the consumer. The key is to guide businesses in competition to become efficient at offering efficient solutions to the consumer.

There is a big difference in a company which makes money because it is efficient at exploiting, and a business which makes money because it efficiently consumes resources to make a product that is efficient.

Agreed, although how much competition is good? Are there tell-tale signs of the line?

Also, is what's efficient standardized? I mean, do we all agree on what the criteria for efficient are? I suppose if that can be agreed (long term environmental sustainability vs least waste vs lowest ultimate labour cost), then it can serve as the benchmark.

I'm not sure I follow what you mean by the last paragraph.

[FirstAscent]

I'm not sure I follow what you mean by the last paragraph.

Just a summary of the first paragraph. Auto manufacturers are an example. I'll copy and paste a post I made from another thread, inspired by the Volkswagen XL1. This is what I wrote in the other thread:

Regarding taxes, acknowledging that they aren't fun, and government spending can be wasteful, consider:

Tax what we want less of. Apply a zero tax, or even a negative tax to what is better. Think creatively. What do we want less of? Pollution, destruction of the environment, excessive consumerism of wasteful products, hunger. What do we want more of? Efficient solutions, not efficient exploitation. That's the problem with capitalism today - it encourages efficient exploitation, not necessarily efficient solutions for the consumer.

Tax pollution. Tax resource exploitation. Tax wasteful products. As for hunger, that's where thinking creatively helps.

I made a long post about automobile design and production. I mentioned the Volkswagen XL1 as an example. The key is to get businesses to compete effectively in a constructive way. Right now, automakers compete by determining the most efficient way to sell expensive automobiles. We want to get them to compete at building the most efficient automobiles. Big difference.

I've been thinking of one way to do it, and I'm not entirely sure of the mathematics behind it, but follow along.

Take the full lineup of new automobiles available today. Split them into ten tiers, numbered one through ten, where the least efficient autos are in tier one, and the most efficient are in tier ten. Tier one gets the highest tax. Tier five gets the lowest positive tax. Tier ten gets the largest negative tax. Now the automakers will compete like crazy to get their auto lineup into the top tier.

If most everyone buys only automobiles in tier ten, then it becomes even more difficult to get your auto placed into tier ten, because the negative tax has to be paid by the positive taxes below it.

Wealthy people can afford whatever auto they want, regardless of tax. People who aren't wealthy will embrace the negative tax on the most efficient autos, and benefit from their efficiency.

Efficiency should increase drastically, much more aggressively than today, as automakers compete to always have autos in the top tiers. New auto startups will obviously strive to only have autos in the top tiers, and by doing so, they'll be able to compete because of the negative tax. This will increase competition for efficiency even further.

Notice that this system does not mandate a specific MPG requirement. For example, the government currently might be mandating 30+ MPG for future automobiles. The problem is, that might be too difficult or too easy for automakers to meet. But what I'm proposing drives the market to competitively up the MPG continuously with no upper limit, and the end result should approach the MPG of the Volkswagen XL1, which happens to be 260 MPG.

Taken from here: https://bitcointalk.org/index.php?topic=25626.msg526491#msg526491

[Hunterbunter]

I'm not sure I follow what you mean by the last paragraph.

I've been thinking of one way to do it, and I'm not entirely sure of the mathematics behind it, but follow along.

Take the full lineup of new automobiles available today. Split them into ten tiers, numbered one through ten, where the least efficient autos are in tier one, and the most efficient are in tier ten. Tier one gets the highest tax. Tier five gets the lowest positive tax. Tier ten gets the largest negative tax. Now the automakers will compete like crazy to get their auto lineup into the top tier.

Ok I see what you're getting at, thanks for explaining. Yeah that would certainly create the situation where you can guide manufacturers to produce what a regulatory body sees as "fit". What you describe is exactly the process of natural selection - an environmental change (containing the criteria for success) forces the inhabitants of the environment to adapt.

It's a bold move that will have a lot of opposition (from lobby groups / manufacturers, because people have to suddenly do a lot of work), but a solid principle to base it on. The regulation of government supposedly does this job already, but if we actually want anything to change, it has to be greater than what they currently do.

What do you mean by positive and negative tax? is this a new tax for regulation specific things like the automobile, for example? If you mean what I think you do, is it basically a more complex version of a luxury car tax? To be known as say, commodity efficiency tax?

If most everyone buys only automobiles in tier ten, then it becomes even more difficult to get your auto placed into tier ten, because the negative tax has to be paid by the positive taxes below it.

This would be slightly difficult to achieve, because changing tax rates by comparison (yearly, for example) messes with demand due to pricing...the govt might need to step in and buffer the system while demand is decided by the market...and the proportionate taxes would have to be pseudo-predicted in advance by expected demand (the difficult part).

it might be a lot simpler to just tax t10 at $0, and increase the tax in each tier as they become more inefficient...and should have the same desired result, plus some extra tax to plant some trees or something

This is all assuming the "market" can handle (rich people allow) more govt intervention, of course.

[FirstAscent]

I'm not sure I follow what you mean by the last paragraph.

I've been thinking of one way to do it, and I'm not entirely sure of the mathematics behind it, but follow along.

Take the full lineup of new automobiles available today. Split them into ten tiers, numbered one through ten, where the least efficient autos are in tier one, and the most efficient are in tier ten. Tier one gets the highest tax. Tier five gets the lowest positive tax. Tier ten gets the largest negative tax. Now the automakers will compete like crazy to get their auto lineup into the top tier.

Ok I see what you're getting at, thanks for explaining. Yeah that would certainly create the situation where you can guide manufacturers to produce what a regulatory body sees as "fit". What you describe is exactly the process of natural selection - an environmental change (containing the criteria for success) forces the inhabitants of the environment to adapt.

It's a bold move that will have a lot of opposition (from lobby groups / manufacturers, because people have to suddenly do a lot of work), but a solid principle to base it on. The regulation of government supposedly does this job already, but if we actually want anything to change, it has to be greater than what they currently do.

What do you mean by positive and negative tax? is this a new tax for regulation specific things like the automobile, for example? If you mean what I think you do, is it basically a more complex version of a luxury car tax? To be known as say, commodity efficiency tax?

I just mean that a positive tax is greater than zero percent, and negative tax is less than zero percent: luxury taxes and subsidies.

If most everyone buys only automobiles in tier ten, then it becomes even more difficult to get your auto placed into tier ten, because the negative tax has to be paid by the positive taxes below it.

This would be slightly difficult to achieve, because changing tax rates by comparison (yearly, for example) messes with demand due to pricing...the govt might need to step in and buffer the system while demand is decided by the market...and the proportionate taxes would have to be pseudo-predicted in advance by expected demand (the difficult part).

I totally understand what you're saying. It's the most difficult part of implementation, I believe.

it might be a lot simpler to just tax t10 at $0, and increase the tax in each tier as they become more inefficient...and

No, I really think it's better to go with the negative tax/subsidy. It is in fact paid for by the positive tax, and has the appeal of the government not really taking the money. The positive tax is supposed to exactly balance the negative tax.

The beauty of it, though, is it constantly ups the bar on efficiency through pure competition, as opposed to specific MPG targets mandated by the government.

[Hunterbunter]

I totally understand what you're saying. It's the most difficult part of implementation, I believe.

Ah cool k, I suppose given time and experience, the tax setters would get better at predicting.

it might be a lot simpler to just tax t10 at $0, and increase the tax in each tier as they become more inefficient...and

No, I really think it's better to go with the negative tax/subsidy. It is in fact paid for by the positive tax, and has the appeal of the government not really taking the money. The positive tax is supposed to exactly balance the negative tax.

The beauty of it, though, is it constantly ups the bar on efficiency through pure competition, as opposed to specific MPG targets mandated by the government.

I see, yeah I hadn't considered that appeal...certainly makes it sellable if the govt doesn't get a cut. Need to find an actuary or something to do the maths in that case.

[FirstAscent]

I totally understand what you're saying. It's the most difficult part of implementation, I believe.

Ah cool k, I suppose given time and experience, the tax setters would get better at predicting.

If you have any ideas on how this could be smoothed out, then share.

it might be a lot simpler to just tax t10 at $0, and increase the tax in each tier as they become more inefficient...and

No, I really think it's better to go with the negative tax/subsidy. It is in fact paid for by the positive tax, and has the appeal of the government not really taking the money. The positive tax is supposed to exactly balance the negative tax.

The beauty of it, though, is it constantly ups the bar on efficiency through pure competition, as opposed to specific MPG targets mandated by the government.

I see, yeah I hadn't considered that appeal...certainly makes it sellable if the govt doesn't get a cut. Need to find an actuary or something to do the maths in that case.

I actually don't think the mathematics are complex. Actually, one of the big obstacles I see are the auto manufacturers' objections to it, where they would claim that a competitor slipped in a couple autos that made the top tier, thus knocking the auto maker's models further down, and giving them a very stressful year. The key is to smooth out the process for everyone.

Perhaps newly released models get slipped into the middle tiers regardless of specs, and are given a six to ten months or so to migrate to their respective slot, giving the auto makers some time to adjust to the constantly changing market. If the model is inefficient, at least the auto maker has an opportunity to compete before it gets knocked down. And if it's seriously efficient, at least the other auto makers get a chance to sell their models at a slight advantage for a short period of time.

I know it can work, one way or another, and I know it's necessary too. Auto makers just aren't being forced to compete effectively - it's analogous to an oligopoly, in a sense: "Don't rock the boat too much, fellows - keep our customers believing that heavy and not so efficient is the best we can do - sell them fashion and glamor - don't make the efficient cars too comfortable - we need to get everyone to want to buy into the heavier and bigger!"

I'm glad Volkswagen is daring to be different, and as a result, showing what is really possible.

[NghtRppr]

I actually don't think the mathematics are complex. Actually, one of the big obstacles I see are the auto manufacturers' objections to it, where they would claim that a competitor slipped in a couple autos that made the top tier, thus knocking the auto maker's models further down, and giving them a very stressful year. The key is to smooth out the process for everyone.

Perhaps newly released models get slipped into the middle tiers regardless of specs, and are given a six to ten months or so to migrate to their respective slot, giving the auto makers some time to adjust to the constantly changing market. If the model is inefficient, at least the auto maker has an opportunity to compete before it gets knocked down. And if it's seriously efficient, at least the other auto makers get a chance to sell their models at a slight advantage for a short period of time.

I know it can work, one way or another, and I know it's necessary too. Auto makers just aren't being forced to compete effectively - it's analogous to an oligopoly, in a sense: "Don't rock the boat too much, fellows - keep our customers believing that heavy and not so efficient is the best we can do - sell them fashion and glamor - don't make the efficient cars too comfortable - we need to get everyone to want to buy into the heavier and bigger!"

I'm glad Volkswagen is daring to be different, and as a result, showing what is really possible.

It makes me want to puke when I see you talking about how you'd like to run other people's businesses and control their lives.

[FirstAscent]

I actually don't think the mathematics are complex. Actually, one of the big obstacles I see are the auto manufacturers' objections to it, where they would claim that a competitor slipped in a couple autos that made the top tier, thus knocking the auto maker's models further down, and giving them a very stressful year. The key is to smooth out the process for everyone.

Perhaps newly released models get slipped into the middle tiers regardless of specs, and are given a six to ten months or so to migrate to their respective slot, giving the auto makers some time to adjust to the constantly changing market. If the model is inefficient, at least the auto maker has an opportunity to compete before it gets knocked down. And if it's seriously efficient, at least the other auto makers get a chance to sell their models at a slight advantage for a short period of time.

I know it can work, one way or another, and I know it's necessary too. Auto makers just aren't being forced to compete effectively - it's analogous to an oligopoly, in a sense: "Don't rock the boat too much, fellows - keep our customers believing that heavy and not so efficient is the best we can do - sell them fashion and glamor - don't make the efficient cars too comfortable - we need to get everyone to want to buy into the heavier and bigger!"

I'm glad Volkswagen is daring to be different, and as a result, showing what is really possible.

It makes me want to puke when I see you talking about how you'd like to run other people's businesses and control their lives.

Horrible, isn't it? Getting the auto makers to actually compete and deliver what is technologically possible. Perhaps we can regulate them to add a dispenser in the door which provides barf bags.

[FirstAscent]

Notice how the method I'm recommending does none of the following:

• Mandate any specific target for MPG
• Collect a tax to pay for a program
• State that an auto maker must do any particular thing to the automobiles they make (although I'm not claiming that other programs shouldn't make certain safety requirements necessary)
• Punish or reward any auto maker for making more or less earnings than another auto maker
• Give a tax incentive to anyone based on their social status
• Encourage those who need efficient automobiles the most to be forced to buy the cheapest and most technologically inefficient

However, it should result in the following:

• Radically accelerate the technology and manufacture of super efficient automobiles
• Get auto makers to concentrate on technology, rather than marketing
• Reduce fuel consumption, thus reducing tensions in the Middle East
• Reduce fuel consumption, thus reducing the need to drill in our own backyard and cause environmental damage
• Reduce fuel consumption, and thus reduce carbon emissions
• By virtue of reducing a reliance on the Middle East, it likely also reduces a need for defense spending in the Middle East
• Allows the lower and middle class to spend more discretionary dollars on local economies due to saving money on fuel
• Forces oil companies to compete harder in the development of alternative energy sources
• Allow new startups to enter the market with a selective and competitive model line
  

[hugolp]

FirstAscent stop the crap. You just want to get to power because you are a sociopath that want to mandate the lives of other people and profit from it. All the goody goody language does not fool anyone.

[onesalt]

FirstAscent stop the crap. You just want to get to power because you are a sociopath that want to mandate the lives of other people and profit from it. All the goody goody language does not fool anyone.

Oh I'm sorry I thought this forum was covered by free speech laws

[FirstAscent]

FirstAscent stop the crap. You just want to get to power because you are a sociopath that want to mandate the lives of other people and profit from it. All the goody goody language does not fool anyone.

Oh I'm sorry I thought this forum was covered by free speech laws

If it was covered by free speech laws, hugolp could certainly make such a post, and we could all write it off to one disruntled guy. But it's a private server, and subject to the whims of a few. Funny thing is, that makes his comment even stranger and more sinister, when you think about it. I mean, look at the posts I've made in this thread.

[FredericBastiat]

If it was covered by free speech laws, hugolp could certainly make such a post, and we could all write it off to one disruntled guy. But it's a private server, and subject to the whims of a few. Funny thing is, that makes his comment even stranger and more sinister, when you think about it. I mean, look at the posts I've made in this thread.

sociopathic personality - a personality disorder characterized by amorality and lack of affect; capable of violent acts without guilt feelings.

Pretty accurate description considering what you've been advocating lately. I wouldn't tell you to stop. Speak your mind. At least it's easier to tell what type of person you are by what you say (and would do), rather than to try to interpret your true colors some other way. At least you show your hand. I hate getting blindsided and ripped off. If I'm going to get taken, I'd rather see it coming.

The most dangerous and deceptive kinds of sociopaths -the ones that say one thing and do another- are the ones to look out for. I guess you're not a politician just yet.

[Elwar]

The market needs to be guided at the point of a gun.

This is the moral way of doing things.

 

[FirstAscent]

The market needs to be guided at the point of a gun.

The market needs to be guided because unguided markets exploit until the end, even ramping up exploitation efforts near the end, trying to outrace their competitors. Ignorance and greed are not the best factors to guide markets, but they are the default ones.

[FredericBastiat]

The market needs to be guided at the point of a gun.

The market needs to be guided because unguided markets exploit until the end, even ramping up exploitation efforts near the end, trying to outrace their competitors. Ignorance and greed are not the best factors to guide markets, but they are the default ones.

So you want to combine exploitation and force? Ouch! Nobody wins then. You can't stop competitiveness and you can't regulate it out of human nature. You'll breed worse things. Using lethal force or threats thereto are not proportional punishments for selfishness.

Guide huh? Nice soft wording for lethal action. I'll just threaten a little bit, it won't hurt... Unless you resist... or else.

[FirstAscent]

So you want to combine exploitation and force? Ouch! Nobody wins then. You can't stop competitiveness and you can't regulate it out of human nature. You'll breed worse things. Using lethal force or threats thereto are not proportional punishments for selfishness.

Exploitation? Sorry, but I want less of that. Read the post to better understand how free markets work. Force? I guess. Have you ever heard the term 'market forces'? They're a natural consequence of markets.

By the way, do you have any suggestions on how automobiles might become more efficient, or is your contribution limited to accusing others of being sociopaths?

[FredericBastiat]

Exploitation? Sorry, but I want less of that. Read the post to better understand how free markets work. Force? I guess. Have you ever heard the term 'market forces'? They're a natural consequence of markets.

By the way, do you have any suggestions on how automobiles might become more efficient, or is your contribution limited to accusing others of being sociopaths?

Depends on the type of exploitation. Define 'market forces'. It's more like 'market influences/suggestions'. Big difference. Everything anybody does at every moment in their lives imparts some force to something else and vice versa. The magnitude and direction of those forces is what matters (consent being a variable). The effect can vary from the negligible, to the extremely lethal, at least in human terms.

I do have ways of making automobiles more efficient. They may be good ideas. Notwithstanding the greatness or worthlessness thereof, I won't force other to implement them. That would be inappropriate.

I kind of like hybrid hydraulic drive combined with supercapacitor storage in a series format, designed for transmission and regenerative braking. As for the ICE portion, I like the floating (free) piston designs with homogeneous charge compression ignition (HCCI) fuel delivery systems. Interesting stuff.