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Index » Radio Paradise/General » General Discussion » Capitalism and Consumerism... now what? Page: Previous  1, 2, 3, ... 9, 10, 11  Next
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black321

black321 Avatar

Location: An earth without maps
Gender: Male


Posted: Jul 28, 2021 - 8:39am

A major problem with our current market ownership form of capitalism is it ultimately leads to excessive accumulation of capital, creating both monetary and political inequality (ring any bells with our current cultural wars?). 
Instead, I think a form of cooperative capitalism is a better system. Cooperative cap where equity ownership is "spread out" among all the major stakeholders. 
Lazy8

Lazy8 Avatar

Location: The Gallatin Valley of Montana
Gender: Male


Posted: Jul 28, 2021 - 7:39am

 kcar wrote:
1. Do truly free markets ever exist? Your opinion seems to implicitly hold that free markets never allow an agent to have market power over others. In most markets we deem free these days, there are degrees of voluntary participation. Many economists today believe that many industries in the US show signs of monopsony power when it comes to employment levels, movement of employees from one employer to the next and wages.

2. Existing free markets today rely on governments to provide a regulatory structure that controls the exchange of goods and services. That includes control over most resolutions of disputes and enforcement of those resolution solutions. That includes the use of legalized force or violence if necessary.

Wait, what existing free markets? They're free or they're not, right?

There are degrees of freedom. A swap meet is a freer market than, say, the New York Stock Exchange, which is freer than a Cuban agricultural collective.

And yes, many economists are political hacks.
3. Libertarians apparently want their claim of property rights to lie above the rights of a government to control ownership of property and re-distribution of wealth in the forms of taxation and/or confiscation. Yet the libertarians, along with the rest of us, rely on the government to define ownership of property, provide regulated markets for exchange of property, provide dispute resolution about property, prevent theft of property, etc. Libertarians apparently want to be free riders.

Property rights are human rights. There are degrees that we tolerate the violation of those rights, just as there is some property we hold dearer than others. Your kidneys, for instance.

And thank you for the keen insights into what we want! Without them we would have to form our own principles and opinions, and even write whole books about them! What a time saver.

3a. I don’t see how you can claim to own property (which I hold is not the same as having basic human rights) without the existence and support of a government’s framework surrounding property issues.

Show me the deed to your kidneys.

One of those pesky principles we had to go and formulate (without your help, you slacker) is that the only legitimate function of government is to protect the rights of the governed.

Clever users of the English language will note that "the only legitimate" part means that there is, in fact, a legitimate function of government.
3b. You wrote: “If you don't own yourself (if you don't have exclusive control of yourself) who does? Can you come up with a moral justification for it being anyone else? If so, who owns you, and why am I arguing with you instead of them?” Ownership of self has limits when that self is a citizen of a country. The boundaries of rights that a citizen self can claim inviolable by a government have mostly expanded over the centuries, but no citizen self can claim to be fully above the laws of the state in which he lives. Not even Trump.

So...non-citizens can own themselves in their entirety? Does that apply to green card holders, those with tourist visas, or the undocumented? I guess stateless persons get to keep their kidneys.

I mean I'm almost certain you just tried to make a point there because you said "Trump."

And again: ownership of property does not automatically have the same rights as ownership of self. We are not losing our rights or freedoms when we are legitimately taxed or when the government we elected decides to give some of that tax revenues to others to help them along.

4. Government taxes are necessary to sustain the framework of laws, courts, police, etc. that define property and property rights as well as protect them.

How we fund government is a separate question from what governments legitimately do.

Bailing out General Motors or building a stadium for a football team is not magically legitimate because it was done by an elected government.

5. Redistribution of wealth beyond the minimum needed to sustain the framework protecting property rights typically comes in the form of taxes and government assistance programs. Property owners and others in democratic countries voluntarily agree to pay taxes to fund those assistance programs. Taxes and redistribution programs are not instances of oppression or violation of property rights. They are a sign that property owners have agreed to limit their property rights and pay into a system that defines, limits and protects their property rights. Redistribution programs are a sign that property owners are willing to help other projects that they and the democratically elected government support.

6. IIRC you believe that the state, i.e. a national government, arrogates power and punishes those who oppose it. Yet in most democratic countries, the people directly or indirectly elect government officials and so control the state.

You have a very flexible definition of the word "voluntary".

In 2008 the eligible voters of California approved an amendment to the state Constitution to define marriage as between one man and one woman. Totally legit, right? They took a vote!

Popular approval is not moral legitimacy. The internment of citizens of Japanese descent was done by an elected government and had widespread popular approval.

The limits in place on the power of governments via constitutions are an explicit restraint on the powers of majorities, there to guard the rights of minorities against them.

And yes, governments are about power. They will claim all they can get, and use it in ways that suit those in power. When it's done by a faction you support it's harder to make yourself acknowledge it, but after the last four years can you really claim it doesn't happen, that it isn't a constant threat?


kcar

kcar Avatar



Posted: Jul 27, 2021 - 9:27am

 Lazy8 wrote:

Taking these in reverse order until I run out of evening. Sorry, been a long, frustrating day and arguing on the internet is not my highest priority, but I'll take it as far as I have stamina for.

....


“Free markets are morally superior to redistribution because free markets involve only voluntary exchanges, while redistribution requires some sort of confiscation, backed by an implicit threat of violence.” 

1. Do truly free markets ever exist? Your opinion seems to implicitly hold that free markets never allow an agent to have market power over others. In most markets we deem free these days, there are degrees of voluntary participation. Many economists today believe that many industries in the US show signs of monopsony power when it comes to employment levels, movement of employees from one employer to the next and wages. 

2. Existing free markets today rely on governments to provide a regulatory structure that controls the exchange of goods and services. That includes control over most resolutions of disputes and enforcement of those resolution solutions. That includes the use of legalized force or violence if necessary. 

3. Libertarians apparently want their claim of property rights to lie above the rights of a government to control ownership of property and re-distribution of wealth in the forms of taxation and/or confiscation. Yet the libertarians, along with the rest of us, rely on the government to define ownership of property, provide regulated markets for exchange of property, provide dispute resolution about property, prevent theft of property, etc. Libertarians apparently want to be free riders. 

3a. I don’t see how you can claim to own property (which I hold is not the same as having basic human rights) without the existence and support of a government’s framework surrounding property issues. 

3b. You wrote: “If you don't own yourself (if you don't have exclusive control of yourself) who does? Can you come up with a moral justification for it being anyone else? If so, who owns you, and why am I arguing with you instead of them?” Ownership of self has limits when that self is a citizen of a country. The boundaries of rights that a citizen self can claim inviolable by a government have mostly expanded over the centuries, but no citizen self can claim to be fully above the laws of the state in which he lives. Not even Trump. 


And again: ownership of property does not automatically have the same rights as ownership of self. We are not losing our rights or freedoms when we are legitimately taxed or when the government we elected decides to give some of that tax revenues to others to help them along. 

4. Government taxes are necessary to sustain the framework of laws, courts, police, etc. that define property and property rights as well as protect them. 

5. Redistribution of wealth beyond the minimum needed to sustain the framework protecting property rights typically comes in the form of taxes and government assistance programs. Property owners and others in democratic countries voluntarily agree to pay taxes to fund those assistance programs. Taxes and redistribution programs are not instances of oppression or violation of property rights. They are a sign that property owners have agreed to limit their property rights and pay into a system that defines, limits and protects their property rights. Redistribution programs are a sign that property owners are willing to help other projects that they and the democratically elected government support. 

6. IIRC you believe that the state, i.e. a national government, arrogates power and punishes those who oppose it. Yet in most democratic countries, the people directly or indirectly elect government officials and so control the state.
NoEnzLefttoSplit

NoEnzLefttoSplit Avatar

Gender: Male


Posted: Jul 27, 2021 - 1:48am

 Lazy8 wrote:

Taking these in reverse order until I run out of evening. Sorry, been a long, frustrating day and arguing on the internet is not my highest priority, but I'll take it as far as I have stamina for.

Free markets are morally superior to redistribution because free markets involve only voluntary exchanges, while redistribution requires some sort of confiscation, backed by an implicit threat of violence.


My moral frame of reference is that violence is bad, and actions compelled by threats of violence are justified only as a response to same.

Nozick made several arguments for property rights as human rights (and yes he took the existence of rights and individual autonomy as axiomatic) but his moral argument stems from the concept of self-ownership. You own yourself, and by extension you own the product of your labor. News flash: I'm not Nozick. I do agree with this basis, however and I think the concept of rights is a corollary rather than an axiom, but let's see if I have enough functioning brain cells to express this.

Note that this does require acknowledging the concept of ownership, exclusive control of something, and I can hear you spooling up to say that's circular and ownership means property and the whole edifice collapses in a heap. Not so fast.

Ownership does not have a moral basis, it's a simple acknowledgement of a state. If you don't own yourself (if you don't have exclusive control of yourself) who does? Can you come up with a moral justification for it being anyone else? If so, who owns you, and why am I arguing with you instead of them?

Failing to acknowledge self-ownership (and the ownership of the products of your own labor) means accepting the violation of individual autonomy. Kant expressed this better than I can: everyone is a means to their own ends, not the means to someone else's ends.

And as I never tire of reminding you, if we don't have moral philosophy as a tool to guiding human interaction then the only thing left is power. Violence and the threat of violence.

Which is bad.

Well, strangely enough, I have very little to object to about any of this, apart from founding property rights based on (someone's) labor (Locke's idea IRIC) which is extremely problematic.

But I do note that the simple acknowledgement of a state of control (starting from the first principle of ownership of oneself) as the prima facies argument for individual autonomy is not comparable to more fundamental attributes of a living being (even without having to do the full Cartesian thing), for unlike physical attributes that pertain to the individual even in isolation, "ownership" only has meaning in a social context. (and while we are on that, it just occurred to me that the cogito, i.e. being cognisant of the fact that one thinks also predicates societal tools of language, otherwise you wouldn't think that thought— just an interesting aside for the moment). 

Ownership, in the sense you are using it, is not a state that can be so easily defined. Certainly, someone in a coma, or a child, or a brother blind drunk in the gutter should still have ownership of self, whereas quite patently, they have lost (or not yet attained) exclusive control of self. There is something fundamentally true in the missive "I am my brother's keeper" for this very reason. Again, a social imperative is necessary to the very concept you are trying to use to establish individual autonomy from society. Cart before horse.

This striving for individual autonomy and the necessary condition of having a social framework for it to even exist are the horns of the moral dilemma. It is where all moral philosophy bites on granite. Some (Rousseau, or Sam Harris, for example) try to resolve it by reason, some try to do it by faith, some by law, some by class consciousness. But all of it is construed. (Which is also why you and I will never conclude this discussion.) 

Sorry if you think I am an enemy of moral philosophy. Not in the slightest. But I am also very much aware of its constraints. When it comes down to it, all I have to offer (as we have discussed before) is for us to hammer this out in a public forum and arrive at some kind of consensus. The natural rights you wish to erect your social edifice on are not clear cut, internally consistent or even etched in stone, but necessarily social features. 

On a last note, I totally agree: violence and the threat of it are bad, but sometimes impossible to avoid. Take the stance of anti-vaxxers, who, based on individual autonomy, are fully within their rights. I even respect them a bit for standing up for that. BUT, their stance will necessarily result (and arguably already has) in otherwise avoidable deaths (does that fit your definition of violence? Fits mine). Likewise giving individual property rights supremacy over fundamental human needs (I won't call them rights) to nutrition, shelter, and the like is also for me an act of violence, if not to the individuals concerned (although I would argue it is) then at least to the social fabric.



Lazy8

Lazy8 Avatar

Location: The Gallatin Valley of Montana
Gender: Male


Posted: Jul 26, 2021 - 11:11pm

 NoEnzLefttoSplit wrote:
So tell me again, how do you make the jump from a value-neutral market to the moral judgement, that a free market is better than say a modern tax-based economy with a modicum of redistribution and functioning public sector. Better in what way? Better for whom? Or is your fundamental argument solely the inalienability of individual property rights?

Taking these in reverse order until I run out of evening. Sorry, been a long, frustrating day and arguing on the internet is not my highest priority, but I'll take it as far as I have stamina for.

Free markets are morally superior to redistribution because free markets involve only voluntary exchanges, while redistribution requires some sort of confiscation, backed by an implicit threat of violence.

But how can you even make that judgement without stipulating your frame of reference? The only moral framework I have ever heard from you in this regard is the inalienability of individual property rights, which most people (even Nozick, one of its most erudite proponents) find wanting, and ultimately are also constructs of law and social convention (something, you steadfastly refuse to acknowledge, believing instead in a woohoo quasi-religious prima facie existence of rights).

I'm quite willing to share my frame of reference, one I seem to share with the majority of the world's democracies, that it is a good thing to foster a functioning society, which in turn necessitates some consideration of fairness, as messy and hard to define as that may be. And yes, I fully acknowledge that this moral frame of reference is a product of my place in history, my upbringing and other specifica that are not necessarily universal. But it is all I have, so I add my voice to the forum and we sit down and hammer these things out. That is btw how things actually work in practice. It is, in fact, the same thing you are doing here, which kind of bears out my point, don't you think?

My moral frame of reference is that violence is bad, and actions compelled by threats of violence are justified only as a response to same.

Nozick made several arguments for property rights as human rights (and yes he took the existence of rights and individual autonomy as axiomatic) but his moral argument stems from the concept of self-ownership. You own yourself, and by extension you own the product of your labor. News flash: I'm not Nozick. I do agree with this basis, however and I think the concept of rights is a corollary rather than an axiom, but let's see if I have enough functioning brain cells to express this.

Note that this does require acknowledging the concept of ownership, exclusive control of something, and I can hear you spooling up to say that's circular and ownership means property and the whole edifice collapses in a heap. Not so fast.

Ownership does not have a moral basis, it's a simple acknowledgement of a state. If you don't own yourself (if you don't have exclusive control of yourself) who does? Can you come up with a moral justification for it being anyone else? If so, who owns you, and why am I arguing with you instead of them?

Failing to acknowledge self-ownership (and the ownership of the products of your own labor) means accepting the violation of individual autonomy. Kant expressed this better than I can: everyone is a means to their own ends, not the means to someone else's ends.

And as I never tire of reminding you, if we don't have moral philosophy as a tool to guiding human interaction then the only thing left is power. Violence and the threat of violence.

Which is bad.
NoEnzLefttoSplit

NoEnzLefttoSplit Avatar

Gender: Male


Posted: Jul 24, 2021 - 3:53am

 Lazy8 wrote:
 NoEnzLefttoSplit wrote:
But let's look for a moment at what is not said. Precisely because markets have those wonderful attributes, individual preferences are never all weighted equally are they? In fact, they never can be. Rather they reflect the preferences of those with the deepest pockets, the better information and the better resources at playing the market.
None of these factors (capital, information, skills) are distributed evenly. There is no given law that we share these things evenly. Nor are markets any good at distributing them evenly. Markets, by your own admission, don't care.

Why should success in any system reflect anything but fitness for that system? Should Olympic athletes be judged by their ability to create Powerpoint slides? That fitness is not distributed evenly in any system. Why should it be? Should we create a crash program to resurrect the eohippus? Its extinction was so unfair. If all it took to succeed in business was a head start no new companies would ever emerge and no established business would ever fail.
And more importantly, because it seems to have still not properly registered with you, individual preferences are always locked into some kind of frame of reference, call it culture, for want of a better term. You yourself nailed it with the image of selling a Pollock in Sudan. Yet somehow you fail to make the connection that cultural values are necessarily prior to market transactions. Culture decides what we place value on, values that we can then quantify in market transactions. But without these cultural values, markets die still born, like the Pollock destined to the dust bin of Sudanese waste management. The myth of the free market is that we share information, resources and this frame of reference. But we don't. 
We don't even share a common understanding of property rights, which is pretty intrinsic to your world view.
But sometimes we share other values and their collective weight can impact the market. You call it intervention. I call it the power of the commons. Sometimes the majority (call it a collective bargaining group if that is easier for you to digest) place value on certain social outcomes. Like the right to education, or the right to healthcare or protection from poverty in old age. If markets have no inherent value base, then why the (values-based) outrage about such collective bargaining securing these outcomes? Because they skew the market more than it already is skewed by the unequal allocation of information, resources and various frames of reference?

I have no idea where the myth of a free market sharing information, resources, and information comes from—certainly not from a capitalist. Sounds like a strawman to me; criticizing markets for not having a characteristic that no one claims they have is misdirection.  Are you sure you're ready to move beyond Econ 101? You seem to have missed the section on arbitrage. If I find a Pollock in a Sudanese souk, pay top pound for it, and sell it in London I have met the needs of three people: 1. The seller—she got more than it was worth to anyone else she knows for it; if my offer wasn't higher than what she valued it at she wouldn't have taken it.
2. The buyer in London—she wanted it more than she wanted the money it took to buy it, or she wouldn't have paid it.
3. Me—I turned a profit on the deal by using information unavailable in a Sudanese souk. Everyone in this three-way deal is better off than before the transaction, and people who aren't even part of it are better off: the Pollock will be seen by people who appreciate it. An under-utilized resource was re-purposed and the net utility of the world went up. Why is any of this bad? I'll leave the conflation of collective bargaining and coercive intervention and the other tangential interjections for another day. It's late and I have a mix disc to burn.
Why are you so upset about such "intervention" yet not about the unequal playing field in place before the market even kicks in? What upsets you so much? Is it because it distorts your engineer's sense of interfering with a perfect system? Is it moral? If so, what morals? 
It can't be the argument that the market would then not perfectly allocate resources, for that would be circular reasoning - a perfect allocation necessitates a prior values-based system to even determine what perfect means. And while we are on that topic, why don't we start looking at moral outcomes and assessing free markets that way? What about the free exploitation of nature's bounty on which no rent is paid (oil and gas, fishing, etc.), yet the cost is passed on to future generations? What about the disenfranchised or disadvantaged, who don't get to play in the market on the same terms?  What about animal rights? (you seem so keen on human rights, what about the whales? or the snails?) Can you explain to me the concept of National Parks in your world view? Does it even fit?

Can you explain how a National Park is incompatible with a market? The owner (the state) put the land to the use it preferred. If the state wants someone else's land to turn into a park it has to buy it*. Why should I be upset that everything isn't equal everywhere, always? That is an impossible state, and if you ever achieved it—sawed the tall people off at the knees, broke the fingers of the best knitters, turned all the smart people into egalitarians—the world would almost immediately become unequal again. Then what? Sounds exhausting. And pointless. We don't all share a moral framework, as you keep pointing out. How can we agree on one to rearrange the world to? You're outraged that somebody, somewhere is getting rich and I'm outraged that anyone would try and stop them.  *Talking the US National Park system here, you may mean something else. And yes, the state can seize the land, but it still has to pay for it—again, US reference.
 
Again, you are totally misrepresenting my argument. No. I am not outraged that people are getting rich.
No, I did not miss the section on arbitrage.
No, I am not against hawkers stalking Sudanese souks for forgotten Jackson Pollocks.
No, there is absolutely nothing wrong in principle with you turning a buck by reselling it for a profit to an art dealer in London, though I do find your active decision not to share the information about the true worth with the seller somewhat reprehensible. But hey ho, her ignorance is her own fault, right?
And finally, no, I am most definitely not trying to force blanket equality of net wealth within society by sawing tall people off at the knees. I don't like spilling blood all that much, just for starters.

And while we are on the issue of conflating things, the elephant in the room here is your conflation of a free market with the value judgement that a free market is better, morally better than some other form, such as a tax-funded redistribution of wealth supplanted on top of a market economy. 

But how can you even make that judgement without stipulating your frame of reference? The only moral framework I have ever heard from you in this regard is the inalienability of individual property rights, which most people (even Nozick, one of its most erudite proponents) find wanting, and ultimately are also constructs of law and social convention (something, you steadfastly refuse to acknowledge, believing instead in a woohoo quasi-religious prima facie existence of rights).

I'm quite willing to share my frame of reference, one I seem to share with the majority of the world's democracies, that it is a good thing to foster a functioning society, which in turn necessitates some consideration of fairness, as messy and hard to define as that may be. And yes, I fully acknowledge that this moral frame of reference is a product of my place in history, my upbringing and other specifica that are not necessarily universal. But it is all I have, so I add my voice to the forum and we sit down and hammer these things out. That is btw how things actually work in practice. It is, in fact, the same thing you are doing here, which kind of bears out my point, don't you think?

Now before you scream out that a progressive tax system is very much an act of sawing tall people off at the knees, an argument that ultimately is founded on your absolutist notion of rights (and again here, you share much more with the religious fanatics than you are willing to admit), can we perhaps temper the metaphor and compare it more to appropriating a fraction of the surpluses of the tall people to give the poor comfortable shoes for them to walk in? This involves much less blood for one thing. And given that inequality is universally increasing even in progressive tax regimes, it is quite apparent that the tall people haven't lost any stature in the process. 

So tell me again, how do you make the jump from a value-neutral market to the moral judgement, that a free market is better than say a modern tax-based economy with a modicum of redistribution and functioning public sector. Better in what way? Better for whom? Or is your fundamental argument solely the inalienability of individual property rights? 
Lazy8

Lazy8 Avatar

Location: The Gallatin Valley of Montana
Gender: Male


Posted: Jul 23, 2021 - 10:52pm

 NoEnzLefttoSplit wrote:
But let's look for a moment at what is not said. Precisely because markets have those wonderful attributes, individual preferences are never all weighted equally are they? In fact, they never can be. Rather they reflect the preferences of those with the deepest pockets, the better information and the better resources at playing the market.
None of these factors (capital, information, skills) are distributed evenly. There is no given law that we share these things evenly. Nor are markets any good at distributing them evenly. Markets, by your own admission, don't care.

Why should success in any system reflect anything but fitness for that system? Should Olympic athletes be judged by their ability to create Powerpoint slides?

That fitness is not distributed evenly in any system. Why should it be? Should we create a crash program to resurrect the eohippus? Its extinction was so unfair.

If all it took to succeed in business was a head start no new companies would ever emerge and no established business would ever fail.
And more importantly, because it seems to have still not properly registered with you, individual preferences are always locked into some kind of frame of reference, call it culture, for want of a better term. You yourself nailed it with the image of selling a Pollock in Sudan. Yet somehow you fail to make the connection that cultural values are necessarily prior to market transactions. Culture decides what we place value on, values that we can then quantify in market transactions. But without these cultural values, markets die still born, like the Pollock destined to the dust bin of Sudanese waste management.

The myth of the free market is that we share information, resources and this frame of reference. But we don't. 
We don't even share a common understanding of property rights, which is pretty intrinsic to your world view.
But sometimes we share other values and their collective weight can impact the market. You call it intervention. I call it the power of the commons. Sometimes the majority (call it a collective bargaining group if that is easier for you to digest) place value on certain social outcomes. Like the right to education, or the right to healthcare or protection from poverty in old age. If markets have no inherent value base, then why the (values-based) outrage about such collective bargaining securing these outcomes? Because they skew the market more than it already is skewed by the unequal allocation of information, resources and various frames of reference?

I have no idea where the myth of a free market sharing information, resources, and information comes from—certainly not from a capitalist. Sounds like a strawman to me; criticizing markets for not having a characteristic that no one claims they have is misdirection.  Are you sure you're ready to move beyond Econ 101? You seem to have missed the section on arbitrage.

If I find a Pollock in a Sudanese souk, pay top pound for it, and sell it in London I have met the needs of three people:

1. The seller—she got more than it was worth to anyone else she knows for it; if my offer wasn't higher than what she valued it at she wouldn't have taken it.
2. The buyer in London—she wanted it more than she wanted the money it took to buy it, or she wouldn't have paid it.
3. Me—I turned a profit on the deal by using information unavailable in a Sudanese souk.

Everyone in this three-way deal is better off than before the transaction, and people who aren't even part of it are better off: the Pollock will be seen by people who appreciate it. An under-utilized resource was re-purposed and the net utility of the world went up.

Why is any of this bad?

I'll leave the conflation of collective bargaining and coercive intervention and the other tangential interjections for another day. It's late and I have a mix disc to burn.

Why are you so upset about such "intervention" yet not about the unequal playing field in place before the market even kicks in? What upsets you so much? Is it because it distorts your engineer's sense of interfering with a perfect system? Is it moral? If so, what morals? 
It can't be the argument that the market would then not perfectly allocate resources, for that would be circular reasoning - a perfect allocation necessitates a prior values-based system to even determine what perfect means.

And while we are on that topic, why don't we start looking at moral outcomes and assessing free markets that way? What about the free exploitation of nature's bounty on which no rent is paid (oil and gas, fishing, etc.), yet the cost is passed on to future generations? What about the disenfranchised or disadvantaged, who don't get to play in the market on the same terms?  What about animal rights? (you seem so keen on human rights, what about the whales? or the snails?)

Can you explain to me the concept of National Parks in your world view? Does it even fit?

Can you explain how a National Park is incompatible with a market? The owner (the state) put the land to the use it preferred. If the state wants someone else's land to turn into a park it has to buy it*.

Why should I be upset that everything isn't equal everywhere, always? That is an impossible state, and if you ever achieved it—sawed the tall people off at the knees, broke the fingers of the best knitters, turned all the smart people into egalitarians—the world would almost immediately become unequal again. Then what? Sounds exhausting. And pointless.

We don't all share a moral framework, as you keep pointing out. How can we agree on one to rearrange the world to? You're outraged that somebody, somewhere is getting rich and I'm outraged that anyone would try and stop them. 

*Talking the US National Park system here, you may mean something else. And yes, the state can seize the land, but it still has to pay for it—again, US reference.

NoEnzLefttoSplit

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Gender: Male


Posted: Jul 23, 2021 - 2:43pm

uff. can we move away from Economics 101 now and move on to how things actually work in reality?

Markets are where we all operate. Well, doh.
Markets are inherently neutral. Well, doh.
Markets are amazingly efficient at allocating resources. Well, doh.

Yes, I understand all that. I understand the charts. I understand the price mechanism. 

But let's look for a moment at what is not said. Precisely because markets have those wonderful attributes, individual preferences are never all weighted equally are they? In fact, they never can be. Rather they reflect the preferences of those with the deepest pockets, the better information and the better resources at playing the market.

None of these factors (capital, information, skills) are distributed evenly. There is no given law that we share these things evenly. Nor are markets any good at distributing them evenly. Markets, by your own admission, don't care.

And more importantly, because it seems to have still not properly registered with you, individual preferences are always locked into some kind of frame of reference, call it culture, for want of a better term. You yourself nailed it with the image of selling a Pollock in Sudan. Yet somehow you fail to make the connection that cultural values are necessarily prior to market transactions. Culture decides what we place value on, values that we can then quantify in market transactions. But without these cultural values, markets die still born, like the Pollock destined to the dust bin of Sudanese waste management.

The myth of the free market is that we share information, resources and this frame of reference. But we don't. 
We don't even share a common understanding of property rights, which is pretty intrinsic to your world view.
But sometimes we share other values and their collective weight can impact the market. You call it intervention. I call it the power of the commons. Sometimes the majority (call it a collective bargaining group if that is easier for you to digest) place value on certain social outcomes. Like the right to education, or the right to healthcare or protection from poverty in old age. If markets have no inherent value base, then why the (values-based) outrage about such collective bargaining securing these outcomes? Because they skew the market more than it already is skewed by the unequal allocation of information, resources and various frames of reference? 

Why are you so upset about such "intervention" yet not about the unequal playing field in place before the market even kicks in? What upsets you so much? Is it because it distorts your engineer's sense of interfering with a perfect system? Is it moral? If so, what morals? 
It can't be the argument that the market would then not perfectly allocate resources, for that would be circular reasoning - a perfect allocation necessitates a prior values-based system to even determine what perfect means.

And while we are on that topic, why don't we start looking at moral outcomes and assessing free markets that way? What about the free exploitation of nature's bounty on which no rent is paid (oil and gas, fishing, etc.), yet the cost is passed on to future generations? What about the disenfranchised or disadvantaged, who don't get to play in the market on the same terms?  What about animal rights? (you seem so keen on human rights, what about the whales? or the snails?)

Can you explain to me the concept of National Parks in your world view? Does it even fit?

Lazy8

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Location: The Gallatin Valley of Montana
Gender: Male


Posted: Jul 23, 2021 - 1:40pm

 islander wrote:
So if I buy all the housing in my town and get the city counsel to put a moratorium on new building, am I just using my position in the market to my advantage? The moratorium is just another factor in the price, like the cost of the commute to good jobs, or the price and availability of water, or if pink was really the right color for the trim or asphalt the rich choice for the lawn.  It's just another factor in the decision tree on value right?  What the market will support?  If the price gets high enough someone else will just get the counsel to remove the moratorium and the race will start anew. 

In that sense, a market is either always 'free' or never really free, depending on where you set the boundary.  My question is how much are we willing to let people have inordinate control of the market influences (and who/how does inordinate get defined).  

You're using your political pull to exclude competitors. That happens in the context of a market (as everything does) but without that pull you're just another overextended investor who paid too much for his assets.

Political intervention affects price, but in what sense is this an indictment of markets? It's intended to thwart the normal response of a market.

There are degrees of freedom just as there are degrees of interventions. Require all houses to have rain gutters (or meet a fire code, or have a 30' setback from a road) and you've intervened in a market. That will push prices higher than otherwise but it's not, say, a building moratorium or a ten year permitting process. I have no problem with someone succeeding by dint of ability to compete at a task (building houses more efficiently, say) but the more you intervene in a market politically the more you favor players who are adept at gaming the system—the Donald Trumps of the world.
islander

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Location: Seattle
Gender: Male


Posted: Jul 23, 2021 - 10:22am

 Lazy8 wrote:

Oh goody, it's all about me now!

If your understanding of what happened to your mates on the street is as above they won't be any better informed. The mechanism that priced them out of homes was the result of an attempt to restrain market forces, which backfired spectacularly—just as it has everywhere that's been tried. I don't know the specifics of Auckland's policies but I do know that if people can make money building housing they will. They haven't, at least not fast enough to meet the demand. This isn't some fatal flaw in the free exchange of goods and services (what we simple folk call a market), this is the result of an intervention in that market. Go fix that problem. Let people build housing and they will.

This is not the market solving problems, this is people solving their own problems. The market is just where they do it. I don't know how to get this point across any better: markets are not some evil system imposed on humans, markets are how humans interact in the economic sphere. To wit:


Other than an evergreen catch-all perjorative I don't even know what neo-liberalism means, so I'm not going to defend it, let alone champion it.

That culture impacts how markets act is undeniable*, but that markets act—always and everywhere—is, well...deniable I guess, because you seem to be denying it. That makes you (sorry for the technical jargon here) wrong.

Gravity keeps you from floating off the earth, but birds fly. That is not because gravity doesn't affect birds, it's because birds use other forces to counteract it. When they stop they fall just like we do.

Water flows downhill not because someone built a pipe, but because gravity pulls it down. The pipe just allows it to take a particular route.

You're looking at market interventions as if they were some novel idea, a different way of living. They aren't. They don't abolish the incentives that drive human action, they try to restrain them. They often fail utterly (I dare you to find a society that declares something contraband that doesn't have a black market in it, for instance) but they sometimes just redirect those forces, like damming a river. The water builds up behind the dam but it doesn't abolish the forces that cause water to move. A dam creates more pressure to topple it the higher it's built, and that water seeks a path. It will find one.

*What a culture values, for instance, has an impact on how things are priced. Try to sell a Jackson Pollack painting in a souk in Sudan and you might get scrap value for the frame, but the mechanism of exchanging things of value is the same there as at a Sotheby's auction.


So if I buy all the housing in my town and get the city counsel to put a moratorium on new building, am I just using my position in the market to my advantage? The moratorium is just another factor in the price, like the cost of the commute to good jobs, or the price and availability of water, or if pink was really the right color for the trim or asphalt the rich choice for the lawn.  It's just another factor in the decision tree on value right?  What the market will support?  If the price gets high enough someone else will just get the counsel to remove the moratorium and the race will start anew. 

In that sense, a market is either always 'free' or never really free, depending on where you set the boundary.  My question is how much are we willing to let people have inordinate control of the market influences (and who/how does inordinate get defined).  
Lazy8

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Location: The Gallatin Valley of Montana
Gender: Male


Posted: Jul 23, 2021 - 8:51am

 NoEnzLefttoSplit wrote:
{#Lol}, right I'll go and tell that to my mates on the street, I'm sure they'll be full of understanding.

If you only knew how much your political orientation is also based on a belief system, we might have a chance of finding some point in the middle. I still find it amazing that a man of your intelligence and critical powers remains stubbornly blind to how much your preferred system and values are part of an almost irrational belief system, one for which you are quite willing to cherry pick the data so as to shore up your beliefs in the face of criticism.

For example, you have confidence "based on the whole of human history" that markets seek equilibrium, ignoring the glaring fact that there hasn't been one example of an unfettered market surviving in equilibrium for very long.* Likewise, there is not one nation in the world that fosters a truly free market as you depict it. Not One Single One. All of them are some kind of a hybrid between free markets and rules-based systems. And no, in the vast majority of these rules-based systems the rules are not there to enrich the ruling elite, but to make the markets run more smoothly. Do you seriously maintain we today would be in a better position if the governments of the world had not bailed out the financial system after the 2008 financial crash or the corona crisis? Myopic much?

(Side note: those countries where the rules are used to enrich the few are the ones we call corrupt and conspicuous for their woeful performance. But this disparity only reinforces the role of culture behind all economic systems - from free markets right through to rules-based systems).

Oh goody, it's all about me now!

If your understanding of what happened to your mates on the street is as above they won't be any better informed. The mechanism that priced them out of homes was the result of an attempt to restrain market forces, which backfired spectacularly—just as it has everywhere that's been tried. I don't know the specifics of Auckland's policies but I do know that if people can make money building housing they will. They haven't, at least not fast enough to meet the demand. This isn't some fatal flaw in the free exchange of goods and services (what we simple folk call a market), this is the result of an intervention in that market. Go fix that problem. Let people build housing and they will.

This is not the market solving problems, this is people solving their own problems. The market is just where they do it. I don't know how to get this point across any better: markets are not some evil system imposed on humans, markets are how humans interact in the economic sphere. To wit:

Most of all it is this cultural factor that I find wanting in your social criticisms. You appear to think that neo-liberalism is a one-size fits all system that is going to automatically endow us with riches, resolve all social and ecological crises facing us and bring peace and harmony on Earth. Please excuse my skepticism. None of these problems are going to go away until we get a workable consensus to resolve them. And that will be a cultural thing.

My position is that all economic systems are inseparable from cultural values and it is these that make them perform better or worse. The key factors are not just the mechanics of market workings and government legislation. Rather, all systems, from command economies right through to free markets perform better when the people buy in to them. When general consensus reduces the frictional losses inherent to any social undertaking. Markets are undeniably extremely efficient at allocating resources, I am not saying they are not. But nor are they the panacea you make them out to be.

In this regard, your championing of neo-liberalism is no different to classical Marxism. Neo-liberals and Marxists both assume that people will naturally buy into the system. You call it natural rights (assuming there will be some magical consensus on respect for property rights despite the glaring inequalities brought about by free market trading) and the Marxists call it class consciousness. Both of which are totally irrational and not borne out by human history - the whole of it.

* Note: I am NOT saying that the markets "failed" in this case - just that markets are immensely complex systems prey to a myriad of factors that can make their patterns erratic.

Other than an evergreen catch-all perjorative I don't even know what neo-liberalism means, so I'm not going to defend it, let alone champion it.

That culture impacts how markets act is undeniable*, but that markets act—always and everywhere—is, well...deniable I guess, because you seem to be denying it. That makes you (sorry for the technical jargon here) wrong.

Gravity keeps you from floating off the earth, but birds fly. That is not because gravity doesn't affect birds, it's because birds use other forces to counteract it. When they stop they fall just like we do.

Water flows downhill not because someone built a pipe, but because gravity pulls it down. The pipe just allows it to take a particular route.

You're looking at market interventions as if they were some novel idea, a different way of living. They aren't. They don't abolish the incentives that drive human action, they try to restrain them. They often fail utterly (I dare you to find a society that declares something contraband that doesn't have a black market in it, for instance) but they sometimes just redirect those forces, like damming a river. The water builds up behind the dam but it doesn't abolish the forces that cause water to move. A dam creates more pressure to topple it the higher it's built, and that water seeks a path. It will find one.

*What a culture values, for instance, has an impact on how things are priced. Try to sell a Jackson Pollack painting in a souk in Sudan and you might get scrap value for the frame, but the mechanism of exchanging things of value is the same there as at a Sotheby's auction.
NoEnzLefttoSplit

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Gender: Male


Posted: Jul 23, 2021 - 5:10am

 Lazy8 wrote:
 NoEnzLefttoSplit wrote:
I gotta admire your naive faith in free markets to right themselves. And all the while these bubbles are inflating and popping, there is a lot of very real collateral damage. And no, your twisting my argument to say the reluctance to foreign ownership of real estate is ultimately xenophobic doesn't wash. NZ is a wonderfully cosmopolitan place with growing diversity. It's not the foreigners that's the problem here. It is not even the faceless foreign capital entering the country (which is neither good nor bad, they are just pumping their capital to where the yields are more promising). No it is the collision of corporations and individuals with vast amounts of wealth entering a market that was protected from them before. It's like releasing a cage of orcs among hobbits.

I don't have faith, I have confidence—based on the whole of human history—that markets will seek equilibrium. They won't provide any particular outcome (a pony, free...anything, full employment) but they will find a balance between competing forces. Your complaint is kinda like standing in a forest, waiting for a cheeseburger to appear to feed you, and proclaiming that the ecosystem failed. It didn't fail, it doesn't owe you a cheeseburger, and the market will not solve your problems. It will, however, be a place where you can solve your own problems. The protection from market forces you're nostalgic for was due to isolation, and isolation is no longer a thing. It was bound to end sooner or later. You can try and create artificial isolation by punishing people who refuse to stay isolated, but that's like digging a hole on the beach and expecting it to stay dry.
And the irony to top it all off, is that by screwing the social cohesion, which is undeniably happening, you are creating greater inequality in society, which leads to the very corruption in society that the foreign capital was fleeing from in the first place.

The inequality was already there, you were just able to pretend it wasn't. That illusion can no longer be maintained, and the longer it was the harder the transition.
 
{#Lol}, right I'll go and tell that to my mates on the street, I'm sure they'll be full of understanding.

If you only knew how much your political orientation is also based on a belief system, we might have a chance of finding some point in the middle. I still find it amazing that a man of your intelligence and critical powers remains stubbornly blind to how much your preferred system and values are part of an almost irrational belief system, one for which you are quite willing to cherry pick the data so as to shore up your beliefs in the face of criticism.  

For example, you have confidence "based on the whole of human history" that markets seek equilibrium, ignoring the glaring fact that there hasn't been one example of an unfettered market surviving in equilibrium for very long. Likewise, there is not one nation in the world that fosters a truly free market as you depict it. Not One Single One. All of them are some kind of a hybrid between free markets and rules-based systems. And no, in the vast majority of these rules-based systems the rules are not there to enrich the ruling elite, but to make the markets run more smoothly. Do you seriously maintain we today would be in a better position if the governments of the world had not bailed out the financial system after the 2008 financial crash or the corona crisis? Myopic much?

(Side note: those countries where the rules are used to enrich the few are the ones we call corrupt and conspicuous for their woeful performance. But this disparity only reinforces the role of culture behind all economic systems - from free markets right through to rules-based systems).

Most of all it is this cultural factor that I find wanting in your social criticisms. You appear to think that neo-liberalism is a one-size fits all system that is going to automatically endow us with riches, resolve all social and ecological crises facing us and bring peace and harmony on Earth. Please excuse my skepticism. None of these problems are going to go away until we get a workable consensus to resolve them. And that will be a cultural thing. 

My position is that all economic systems are inseparable from cultural values and it is these that make them perform better or worse. The key factors are not just the mechanics of market workings and government legislation. Rather, all systems, from command economies right through to free markets perform better when the people buy in to them. When general consensus reduces the frictional losses inherent to any social undertaking. Markets are undeniably extremely efficient at allocating resources, I am not saying they are not. But nor are they the panacea you make them out to be. 

In this regard, your championing of neo-liberalism is no different to classical Marxism. Neo-liberals and Marxists both assume that people will naturally buy into the system. You call it natural rights (assuming there will be some magical consensus on respect for property rights despite the glaring inequalities brought about by free market trading) and the Marxists call it class consciousness. Both of which are totally irrational and not borne out by human history - the whole of it.
Lazy8

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Location: The Gallatin Valley of Montana
Gender: Male


Posted: Jul 22, 2021 - 8:42pm

 NoEnzLefttoSplit wrote:
I gotta admire your naive faith in free markets to right themselves. And all the while these bubbles are inflating and popping, there is a lot of very real collateral damage. And no, your twisting my argument to say the reluctance to foreign ownership of real estate is ultimately xenophobic doesn't wash. NZ is a wonderfully cosmopolitan place with growing diversity. It's not the foreigners that's the problem here. It is not even the faceless foreign capital entering the country (which is neither good nor bad, they are just pumping their capital to where the yields are more promising). No it is the collision of corporations and individuals with vast amounts of wealth entering a market that was protected from them before. It's like releasing a cage of orcs among hobbits.

I don't have faith, I have confidence—based on the whole of human history—that markets will seek equilibrium. They won't provide any particular outcome (a pony, free...anything, full employment) but they will find a balance between competing forces.

Your complaint is kinda like standing in a forest, waiting for a cheeseburger to appear to feed you, and proclaiming that the ecosystem failed. It didn't fail, it doesn't owe you a cheeseburger, and the market will not solve your problems. It will, however, be a place where you can solve your own problems.

The protection from market forces you're nostalgic for was due to isolation, and isolation is no longer a thing. It was bound to end sooner or later. You can try and create artificial isolation by punishing people who refuse to stay isolated, but that's like digging a hole on the beach and expecting it to stay dry.

And the irony to top it all off, is that by screwing the social cohesion, which is undeniably happening, you are creating greater inequality in society, which leads to the very corruption in society that the foreign capital was fleeing from in the first place.

The inequality was already there, you were just able to pretend it wasn't. That illusion can no longer be maintained, and the longer it was the harder the transition.

Red_Dragon

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Posted: Jul 22, 2021 - 4:52pm

 oldviolin wrote:

Define the growth of flailing ideologies in terms choking and purple...
 
oldviolin

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Location: esse quam videri
Gender: Male


Posted: Jul 22, 2021 - 4:16pm

 (former member) wrote:


My biggest concern with capitalism is not the class war going on now between the rich and the middle class...  in fact, my biggest concern makes the class war trivial...

my biggest concern is the environment...

capitalism requires constant economic growth...  with that as the ideological priority, the environment suffers...

we are consuming the planet the way a virus grows and consumes something until the carrier dies...

last year, we saw The Deepwater Horizon oil spill, and this year we have seen the nuclear disaster in Japan... there is land in Japan that will be radioactive for the next 10,000 generations of humans...

what's next?

I do not want capitalism to fall into the dustbin of history as another failed ideology...  I like it...  but we need to find a way to regulate growth and protect the environment, or we are doomed...


 
 
Define the growth of flailing ideologies in terms choking and purple...
Red_Dragon

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Posted: Jul 22, 2021 - 3:39pm

Capitalism failed when it failed these people - before they needed a social safety net, which capitalism abhors because there's no profit in it. It failed them because it is concerned only with profit. It is fundamentally selfish and cruel; it worships only growth, profit and greed. No doubt you'll articulately explain just how wrong I am, Lazy. Par for the course.
NoEnzLefttoSplit

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Gender: Male


Posted: Jul 22, 2021 - 12:30pm

 Lazy8 wrote:
 NoEnzLefttoSplit wrote:
Well, I'm not familiar with California, but I know a bit about Auckland, New Zealand. Basically, there is no such thing as a truly free market, distortions abound and they are not all to do with inefficient public sector planning preventing the market from finding its "natural" balance. And is that "natural" balance even desirable?

Well, a great many people have done their level best to ensure that there isn't a free market. That doesn't change the fundamental forces in play: when something becomes scarce but stays in demand, the price rises. When You restrain price you drive scarcity. When you restrain supply you drive scarcity. All these forces will find a way to express themselves. All economies are similar, they all behave this way. There are not different kinds of economies, there are just economies with more or less intervention restraining supply, demand, or price.
Auckland's real estate market got totally out-of-whack when direct foreign investment was allowed and a lot of foreign money invested heavily in the NZ property market for various reasons (safe country, stable outlook, lack of corruption, etc, great place to live, attractive to Hong Kong Chinese fearing a Chinese takeover, etc. etc.). This was great for all the foreign people with money. Great for all the local people with property who at least on paper, found their wealth doubling, and local property developers, etc. But it has proven to be absolute crap for all the middle to low income people who grew up and worked in the city. Rents skyrocketed. Owning your own place has been put out of reach for a huge chunk of the population, etc. Hundreds now live in temporary shelters, caravans, garages, etc. NZ slipped even further away from being a homogenous society to a two or even three-tier society with even greater social problems. Desirable outcome? Nope. Not even for the locals with property, because who wants to live in a country like that?

Yeah, who wants to live in a safe country without corruption and free from tyrannical government? Um...the people who keep moving there? Just a guess.  A further guess: they're coming there because the places they're fleeing are worse. But sure, blame it all on the bloody foreigners. And capitalism. Because capitalism allows people to see a need (housing, say) and fill it, making themselves better off in the process. Outrageous! Why, look at them all, building housing like that. Except they aren't—because someone is preventing them from doing it. Otherwise they would be. They are greedy capitalists, right? There's money to be made building housing. They want to make it. They will if you let them. Someone is stopping them.
By contrast, the Maori, who were granted riparian rights to the entire NZ coastline, granted public access to it in perpetuity. (hang on, I grossly misrepresented that, turns out it is more complicated, with these rights basically being stolen from Maori and vested in the government, same old colonial pattern of theft). ........Whatever, you get the gist. Think of the US national parks. Outcome: we have no private beaches. Everyone can sit on any beach they want to. Not all wealth can be quantified in terms of (private) money. In fact I would put living in a civilised society founded on trust, respect and fair opportunity much higher on my list of personal priorities than my own private wealth. Not saying your fair market ideal can't create that kind of society, but you've failed to convince me of how it would achieve this apart from the vain hope that everyone (even the disaffected) would/should buy into the logic of natural rights. But why would they, when you work your butt off to end up living in a caravan?

All systems seek equilibrium. You can try to restrain the forces that correct imbalances, but you just drive the system to a more-strained state. Eventually that will make the system less attractive and demand will drop, like what's happening in California. As for all those bloody foreigners buying up all the everything...we've seen this movie before. In the 1980s Japanese firms, flush with cash, began buying up US companies and real estate. They bid the prices up to absurd levels, but eventually you need to turn those investments into revenue. You need to sell access to them (rent, say), make them generate revenue on their own (like a company turning a profit), or sell them to someone else for more than you paid. The high price does not justify itself, at least not once you've found the last fool willing to buy it. The bubble pops and the buyers look stupid. Those investments—from Columbia Pictures to Rockefeller Center—look ridiculous now, but they had US nativists all up in arms. It doesn't help to tell someone in a tent that it's only temporary, when temporary could be ten years. But the underlying problem is fixable: let people build housing, and they will.
 
I gotta admire your naive faith in free markets to right themselves. And all the while these bubbles are inflating and popping, there is a lot of very real collateral damage. And no, your twisting my argument to say the reluctance to foreign ownership of real estate is ultimately xenophobic doesn't wash. NZ is a wonderfully cosmopolitan place with growing diversity. It's not the foreigners that's the problem here. It is not even the faceless foreign capital entering the country (which is neither good nor bad, they are just pumping their capital to where the yields are more promising). No it is the collision of corporations and individuals with vast amounts of wealth entering a market that was protected from them before. It's like releasing a cage of orcs among hobbits. 

Ok, you might say, higher real estate prices merely reflect the premium investors are willing to pay for all those beneficial features NZ offers in an international comparison, so in terms of information, the market should perform better (more information means better decisions right?).
Yeah, the only problem with that is the frame of reference for the investment decisions of foreign investors is light-years removed from the average domestic worker who just wants to have some security and a garden for his greens. 
You simply can't compare the two. The domestic worker doesn't give a toss about international comparisons when making this investment decision. But by allowing foreign ownership of land, you are effectively forcing the local lad to compete on the world stage against players with vastly more resources.
I am not saying this is morally right or wrong. I am just asking, is this a desirable social outcome?

And the irony to top it all off, is that by screwing the social cohesion, which is undeniably happening, you are creating greater inequality in society, which leads to the very corruption in society that the foreign capital was fleeing from in the first place. 

westslope

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Location: BC sage brush steppe


Posted: Jul 22, 2021 - 11:51am

 Red_Dragon wrote:

Nope.  Social welfare state fail.
Lazy8

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Location: The Gallatin Valley of Montana
Gender: Male


Posted: Jul 22, 2021 - 9:59am

 NoEnzLefttoSplit wrote:
Well, I'm not familiar with California, but I know a bit about Auckland, New Zealand.

Basically, there is no such thing as a truly free market, distortions abound and they are not all to do with inefficient public sector planning preventing the market from finding its "natural" balance. And is that "natural" balance even desirable?

Well, a great many people have done their level best to ensure that there isn't a free market. That doesn't change the fundamental forces in play: when something becomes scarce but stays in demand, the price rises. When You restrain price you drive scarcity. When you restrain supply you drive scarcity. All these forces will find a way to express themselves.

All economies are similar, they all behave this way. There are not different kinds of economies, there are just economies with more or less intervention restraining supply, demand, or price.

Auckland's real estate market got totally out-of-whack when direct foreign investment was allowed and a lot of foreign money invested heavily in the NZ property market for various reasons (safe country, stable outlook, lack of corruption, etc, great place to live, attractive to Hong Kong Chinese fearing a Chinese takeover, etc. etc.).

This was great for all the foreign people with money. Great for all the local people with property who at least on paper, found their wealth doubling, and local property developers, etc. But it has proven to be absolute crap for all the middle to low income people who grew up and worked in the city. Rents skyrocketed. Owning your own place has been put out of reach for a huge chunk of the population, etc. Hundreds now live in temporary shelters, caravans, garages, etc.

NZ slipped even further away from being a homogenous society to a two or even three-tier society with even greater social problems.

Desirable outcome? Nope. Not even for the locals with property, because who wants to live in a country like that?

Yeah, who wants to live in a safe country without corruption and free from tyrannical government? Um...the people who keep moving there? Just a guess.  A further guess: they're coming there because the places they're fleeing are worse.

But sure, blame it all on the bloody foreigners. And capitalism.

Because capitalism allows people to see a need (housing, say) and fill it, making themselves better off in the process. Outrageous! Why, look at them all, building housing like that.

Except they aren't—because someone is preventing them from doing it.

Otherwise they would be. They are greedy capitalists, right? There's money to be made building housing. They want to make it. They will if you let them. Someone is stopping them.
By contrast, the Maori, who were granted riparian rights to the entire NZ coastline, granted public access to it in perpetuity. (hang on, I grossly misrepresented that, turns out it is more complicated, with these rights basically being stolen from Maori and vested in the government, same old colonial pattern of theft). ........Whatever, you get the gist. Think of the US national parks. Outcome: we have no private beaches. Everyone can sit on any beach they want to.

Not all wealth can be quantified in terms of (private) money. In fact I would put living in a civilised society founded on trust, respect and fair opportunity much higher on my list of personal priorities than my own private wealth.

Not saying your fair market ideal can't create that kind of society, but you've failed to convince me of how it would achieve this apart from the vain hope that everyone (even the disaffected) would/should buy into the logic of natural rights.

But why would they, when you work your butt off to end up living in a caravan?

All systems seek equilibrium. You can try to restrain the forces that correct imbalances, but you just drive the system to a more-strained state. Eventually that will make the system less attractive and demand will drop, like what's happening in California.

As for all those bloody foreigners buying up all the everything...we've seen this movie before. In the 1980s Japanese firms, flush with cash, began buying up US companies and real estate. They bid the prices up to absurd levels, but eventually you need to turn those investments into revenue. You need to sell access to them (rent, say), make them generate revenue on their own (like a company turning a profit), or sell them to someone else for more than you paid. The high price does not justify itself, at least not once you've found the last fool willing to buy it. The bubble pops and the buyers look stupid.

Those investments—from Columbia Pictures to Rockefeller Center—look ridiculous now, but they had US nativists all up in arms.

It doesn't help to tell someone in a tent that it's only temporary, when temporary could be ten years. But the underlying problem is fixable: let people build housing, and they will.

sirdroseph

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Location: Yes
Gender: Male


Posted: Jul 22, 2021 - 9:22am

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