The Economists’ Hour

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GuideToACrazyWorld
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The Economists’ Hour

Post by GuideToACrazyWorld » Wed Oct 02, 2019 2:02 pm

Last night I ran across a news article in The New Republic. Filtering out their obvious bias was tough. They literally were criticizing a book that appears to be highly critical of Neo-liberalism for not being critical enough.
Stripping it back and reading a couple of other sources on the book I think it’s a book worth reading. I might just pick it up.

One interesting point that I pulled out of these articles is that those of us who believe in the economics of freedom tend to blame the New Deal for ruining the economy, while those who believe in the economics of equality tend to blame the neo-liberal movement of the late 70’s and 80’s. This book actually points to both as being critical to giving economists such a foothold in government policy. So, as with most things, we can scream at each other until we are blue in the face and never change a thing. Both are right and I think it’s about time we start recognizing that.

The point that it seems the conversation is missing is that Neo-liberalism, while using the language of the free market, was never really implemented as a free-market approach. It has consistently been implemented as a pro-business, anti-individual approach. This isn’t just true in income distribution, but it’s true in the way economics have effected social policy. Cost-analysis in policy has led to a situation in which policies that save lives while making business more expensive often are not passed but policies that are relatively cheap to implement, save lives, but remove individual freedoms are implemented.

Over time these personal violations have compounded to a great cost to our economy. The war on drugs is a great example. As is the FDA and drug testing. Watch the Dallas Buyers club and think about the loss to both lives and economics while we let people die in the 80’s because some bureaucrats weren’t sure if the right drugs were good enough.

We talk a lot about economic freedom vs economic equality. As hard as we try to have these conversations in an honest way, even we miss the point. Sometimes we are so interested in finding compromises in this country that we take the worse ideas from each side of the argument. Then when it goes wrong we point to the other side as the cause. Often we are all right.
Below are a couple of articles for more information.

https://newrepublic.com/article/155205/ ... ket-newtab



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Re: The Economists’ Hour

Post by Ike » Wed Oct 02, 2019 6:14 pm

One of the biggest misconceptions associated with economic libertarianism such as myself revolves around this idea that we are pro-big-business. We are not. We are pro-competition.

Under a free market system, monopolies cannot exist for any meaningful length of time without government protection. To the extent the government steps in to break up companies, we can usually draw a line directly linking the existence of the mega corporation to government intrusion, not the markets.

In the end, big business loves big government.

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Re: The Economists’ Hour

Post by GuideToACrazyWorld » Wed Oct 02, 2019 6:20 pm

Ike wrote:
Wed Oct 02, 2019 6:14 pm
One of the biggest misconceptions associated with economic libertarianism such as myself revolves around this idea that we are pro-big-business. We are not. We are pro-competition.
I agree and you and I are on the same page. My point was that in practice Neo-liberal ideas as implemented in the US have not been pro-competition as much as they have been pro-business. This isn't at all what economic libertarian's want or believe, but since the Neo-liberals widely used our arguments people are confused.
Ike wrote:
Wed Oct 02, 2019 6:14 pm
Under a free market system, monopolies cannot exist for any meaningful length of time without government protection.
I hear this argument a lot. I'm not entirely convinced it is accurate. Regional monopolies developed in the old West and that was about as laissez faire as an economy has ever been.
Ike wrote:
Wed Oct 02, 2019 6:14 pm
To the extent the government steps in to break up companies, we can usually draw a line directly linking the existence of the mega corporation to government intrusion, not the markets.
That might be true simply because we haven't really ever had a market without intrusion. In order to become a monopoly in such a market you must take advantage of that intrusions. Their relationship might be symbiotic more then causal.
Ike wrote:
Wed Oct 02, 2019 6:14 pm
In the end, big business loves big government.
No argument here.

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Re: The Economists’ Hour

Post by Ike » Wed Oct 02, 2019 7:23 pm

GuideToACrazyWorld wrote:
Wed Oct 02, 2019 6:20 pm
That might be true simply because we haven't really ever had a market without intrusion.
We can look at the existence of mega corporations, and parse through how they got to be so very massive. More often than not, we will find that they got there with lots of big help from the government.

To be clear, I still hesitate to call myself a full on libertarian, or even just an economic libertarian, on account of acknowledging the logical extension that goes all the way into anarchism, which is contrary to human nature. Literally any existence of government would necessitate some intrusion into the markets.

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Re: The Economists’ Hour

Post by GuideToACrazyWorld » Wed Oct 02, 2019 8:43 pm

Ike wrote:
Wed Oct 02, 2019 7:23 pm
We can look at the existence of mega corporations, and parse through how they got to be so very massive. More often than not, we will find that they got there with lots of big help from the government.
I'm not denying this, but in a system where the government is providing help those who receive that help will get a monopoly. That's not the same as knowing there could be no monopoly without that assistance. To put it another way it could very well be that government intervention can help determine a monopoly but isn't the only way to create one.
Ike wrote:
Wed Oct 02, 2019 7:23 pm
To be clear, I still hesitate to call myself a full on libertarian, or even just an economic libertarian, on account of acknowledging the logical extension that goes all the way into anarchism, which is contrary to human nature. Literally any existence of government would necessitate some intrusion into the markets.
I assume you are saying this for the sake of other's who are reading. Because I think you know we are very close on this one.

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Re: The Economists’ Hour

Post by LivingRock » Thu Oct 03, 2019 12:58 pm

Ike wrote:
Wed Oct 02, 2019 6:14 pm
One of the biggest misconceptions associated with economic libertarianism such as myself revolves around this idea that we are pro-big-business. We are not. We are pro-competition.
What, specifically, from an economic policy standpoint are “pro big business” and “pro competition”?

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Re: The Economists’ Hour

Post by GuideToACrazyWorld » Thu Oct 03, 2019 1:08 pm

LivingRock wrote:
Thu Oct 03, 2019 12:58 pm
What, specifically, from an economic policy standpoint are “pro big business” and “pro competition”?
Pro-competition are policies that open the market and allow businesses to enter it at will. For instance, removing burdensome regulation is pro-competition.

Pro-business are policies that subsidies or otherwise reword specific businesses. Tax breaks targeting an industry or company are the most prominent example.

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Re: The Economists’ Hour

Post by LivingRock » Fri Oct 04, 2019 7:13 pm

As is explained in the story, policy focus on efficiency and growth beginning in the late '70s and into the '80s (what I think some are calling "Neoliberalism" here) was a reaction to stagflation and, well, inefficiency and bloat that by the early seventies was quite apparent and detrimental. These, I think, were/are due to structural changes in the economy like globalization and a an economy in transition away from a more industrial economy. So imho, it seems short-sighted to pin inequality now on that reaction to the structural change in the economy that caused the inefficient and stagnant conditions. It's the structural change that remains the issue, and neoliberalism or some focus on income inequality are band aids at best, not solution nor causes.

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Re: The Economists’ Hour

Post by GuideToACrazyWorld » Fri Oct 04, 2019 7:20 pm

LivingRock wrote:
Fri Oct 04, 2019 7:13 pm
So imho, it seems short-sighted to pin inequality now on that reaction to the structural change in the economy that caused the inefficient and stagnant conditions. It's the structural change that remains the issue, and neoliberalism or some focus on income inequality are band aids at best, not solution nor causes.
That is a really interesting perceptive I need to think about and likely research that some more. Great post!

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Re: The Economists’ Hour

Post by Mike » Sat Oct 05, 2019 1:22 am

Ike wrote:
Wed Oct 02, 2019 6:14 pm
One of the biggest misconceptions associated with economic libertarianism such as myself revolves around this idea that we are pro-big-business. We are not. We are pro-competition.

Under a free market system, monopolies cannot exist for any meaningful length of time without government protection. To the extent the government steps in to break up companies, we can usually draw a line directly linking the existence of the mega corporation to government intrusion, not the markets.

In the end, big business loves big government.
Your last sentence could not be more correct. It is, so very often, business that cries out for regulation. Likewise, most business cannot exist at all without the prior investment in infrastructure that can only come from public spending (= taxation), and those investors (the taxed public) are entitled to set conditions on those businesses.

That said, human existence is not entirely competition. Humans would never have built the Coliseum of Rome or the Acropolis or the Freedom Tower without enormous levels of cooperation. The rice paddies of Asia are dependent upon each other; they cannot afford to compete against each other else they’d all be dead. So competition cannot be the sole principle of business or of living. So if your entire premise is endless competition, your premise is hopelessly flawed.

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