What constitutes a "market failure" in your mind?

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My reading of economics has lead me to believe that he was the greatest economist in the past one hundred years.

I would be not be likely to read Von Mises' treatises any more than I would be likely to read the writings of a creationist. He was not a great economist in any sense. His claim to fame, from what I have read, was his wonderful observation that human behaviors are just so damned unpredictable hard to understand that Economics cannot be subjected to empirical scientific scrutiny. It arose from an observation of exactly what he espoused in his religion. That is, the late 19th and early 20th century was characterized by huge boom-bust cycles caused by those famous "business cycles" that he so trusted. These trends persisted through the period before there was a central bank and after. Hard to blame them on the central bank.

As far as being a worthy competitor to Keynesian economics, Keynes' views got no traction until 1930. Hardly good timing for a coherent comparison. Keynes had a tough time convincing FDR that deficit spending was the remedy for the Great Depression, and like Obama, Roosevelt waited until WWII forced him into substantial deficit spending. Keynes' views got plenty of vindication thereafter. Mises' religion has never been vindicated in any country or any economy in the history of the world.



Art's picture
Art
Joined:
Jul. 31, 2007 4:01 pm
Quote chilidog:

The ultimate market failure occurs when people, for whatever reason, start destroying the property that is the marketplace. Say, the riots of 1966, the L.A. riots of 1992, revolutions. These are undesirable outcomes and should be prevented.

Now you're talkin'. Ain't the dirtied up parks by the stinky hippies a market failure?

Laborisgood's picture
Laborisgood
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Jul. 31, 2007 4:01 pm
Quote jrodefeld:Your argument here is particularly flawed. The Tragedy of the Commons is indeed a real economic concept and dilemma but you are putting forth the claim that it is a coherent argument against the free market. This couldn't be more wrong. Von Mises wrote extensively about the Tragedy of the Commons and he agreed that it was a problem:

"If land is not owned by anybody, although legal formalism may call it public property, it is utilized without any regard to the disadvantages resulting. Those who are in a position to appropriate to themselves the returns — lumber and game of the forests, fish of the water areas, and mineral deposits of the subsoil — do not bother about the later effects of their mode of exploitation. For them the erosion of the soil, the depletion of the exhaustible resources and other impairments of the future utilization are external costs not entering into their calculation of input and output. They cut down the trees without any regard for fresh shoots or reforestation. In hunting and fishing they do not shrink from methods preventing the repopulation of the hunting and fishing grounds."

However, I will copy an argument made by a friend of mine, so I don't do the disservice of paraphrasing what he said:

"Imagine a commons, owned by none, and surrounded by privately owned plots of land. On each privately owned plot resides a herdsman with his herd. Each herdsman has a choice of letting his herd graze on his own piece of land or on the commons. When the herd grazes, it depletes the land and thus cannot be allowed to overgraze lest the land be ruined. Since each herdsman owns his own piece of land, he has the incentive to maintain and cultivate it, and thus wishes to prevent his herd from overgrazing and ruining it. But what of the commons? If he allows his herd to graze and deplete the commons, his own piece of land is left pristine. Thus, he accrues the benefits of grazing his herd, with none of the costs. Further, each herdsman knows that every other herdsman has the same incentive, to graze their herd on the commons over their own land, and therein lies the tragedy according to Hardin, for in that rational yet self interested analysis of each herdsmen ensues a mad dash to use up the commons before anyone else can, thereby ruining it.

This simple yet powerfully illustrative example of the tendency for commons to be abused, depleted, and/or ruined is an extremely important concept in understanding pollution, environmental degradation, resource depletion, and similar problems today. But first, a closer examination of the fundamental problem is required. Many readers mistake the tragedy of the commons as an argument against the free market and in favor of the state. Perhaps Hardin himself is partially to blame for this since he concludes that "the tragedy of the commons... must be prevented... by coercive laws or taxing devices," and that "the only kind of coercion I recommend is mutual coercion, mutually agreed upon by the majority of the people affected." To paraphrase: the state must be the arbiter of the commons to prevent its misuse. Unfortunately, the thinking here, in true statist fashion, is completely reversed. Recall the decision each herdsman faced. Since he owned his own piece of land, he had the incentive to maintain and cultivate it. The problem arose because of the existence of the commons, which he and every other herdsman had the incentive to use and deplete before others could. Thus, it was a tragedy of thecommons, and not a tragedy of the privately owned plots of land. This is the all-important observation. The fundamental problem is not with the free market or the rationally self interested actions of the herdsman, but rather with the existence of the commons! If the commons had been auctioned off to the highest bidder, or broken up and sold off in smaller pieces, there would be no tragedy. Private property solves the tragedy that is endemic to the existence of public property."

Austrain economists, libertarians and our founding fathers believed strongly that property should be owned by individuals, not by the State. Historical analysis has proven that land owned by private individuals, with the State enforcing property rights, has been far better maintained and taken care of than "the Commons", or land owned by the government "for everyone". Though the concept seems nice, land owned by everyone is really owned by no one and people are quick to pollute the water, misuse the land or exploit it. No one suffers directly. No one can challenge that violation in court as can occur when property rights are violated.

This was a nice try at attempting to disprove the merits of the market but, as I've just illustrated, your argument is really against the existence of the "commons" and an argument in favor of private property, a bedrock concept in libertarian ideology.

Actually, your friend doesn't understand what the tragedy of the commons really is because he takes Hardin's example too literally. The example of the common field is merely a tangible illustration of the concept and not a material reality. He utilizes it as a type of parable to teach people the concept of the tragedy of the commons. If you actually read my whole post I sort of address this but I will try to be more clear. A common good is one that is RIVALROUS but NON-EXCLUDABLE. The issue with the pasture example, while it provides a good illustration of the concept, is that a pasture is not truly a common good. And this is perhaps why libertarians get confused. Land is inherently excludable. I can prohibit someone from coming on a particular patch of land (or their cows) by placing a fence around it.

So, to be very clear - the pasture example was to illustrate the concept but is not itself a common good according to the strict economic definition. This is why Hardin moves on to air pollution because this IS an example of a common good. This is where he addresses real world application.

You can not buy a plot of air. You cannot put a fence around air. Short of placing a factory inside a hermetically sealed bubble, you cannot contain air pollution in the way you can contain access to a field. Air and air cleanliness represents a common good in the strictest sense because you cannot exclude the use of air by any readily available means AND it is a finite resource in that putting pollution into the air does increase the PPM of particular chemicals within a particular geographical area. This is a common good.

EVERY solution just proposed by your friend is COMPLETELY INSUFFICIENT in dealing with this phenomenon. When you have a good that is inherently NON-EXCLUDABLE it becomes IMPOSSIBLE to divide it up according to property rights as your friend suggests.

You cannot divide up water molecules. You cannot divide up air. You cannot divide up weather patterns. You cannot divide up the water table (as it also has currents that make it transient), You cannot divide up global warming and climate change. You cannot divide up the ozone into plots.

COMMON GOODS NOT THE COMMONS. GET IT THROUGH YOUR HEAD.

ah2
Joined:
Dec. 13, 2010 10:00 pm
Quote jrodefeld:
Quote ah2:
Quote jrodefeld:
Quote ah2:
Quote jrodefeld:
Quote Laborisgood:
Quote mdhess:

I'm encouraged by the fact that at least you recognize that capitalism in its current form is perverted but, like Dr. Paul, you have come to the wrong diagnosis. Its an understandable mistake since powerful interests spend lots of money in order to ensure that lots of people do make that mistake. The solution to correcting a marketplace that's out of control because some players are so dominant that they squeeze out opportunity for all others (by whatever means it takes) is not to take the reins off of that beast but to yank hard on the reins. I agree that a lot of regulations get written as political favors for crony capitalist benefactors but the solution to ridding the economy of this corruption is not to eliminate the only mechanism that can possibly contain it but rather to block the pathways that allow the corruptors to capture and control the mechanism. The most abused pathway that needs blocking is the flow of cash; that and the revolving door between business and government that occurs because of that cash flow. The voice of the public has been completely drowned out by the flood of slush-fund cash that buys our political outcomes and it is because five right wing ideologues on the Court have perversely decreed that money is speech.

If that don't hit the nail on the head, I don't what does. This summation needs to be repeated over and over and over. The spreading of this gospel is all too easy. It's a story we've been a part of for decades. It never hurts to throw the Democratic Party under the bus for their all-to-prevalent part in this mess (to show fairness). There are a whole lot of people who have been sipping the supply-side, free-trade, free-market Kool-Aid for so long they don't even question the fundamentally flawed premises which have been proven to be detrimental to the average American over the course of this decades long story.

The true beauty of the 99% movement is that it has yet to actually capture the lion's share of the populace. There are piles of disgruntled and disoriented people out there who know there's a problem and are trying so hard to fit their solution to the problem into a nice little Libertarian package, but it just doesn't fit.

You are both only partially right. I think what you are forgetting is the most important view that Ron Paul and Austrians espouse that there can be no free market with a central bank that creates money out of thin air. THIS is the source of the corruption. If we had sound money based on gold or silver and no inflation, money could not corrupt politics. The banks would not be able to buy government favors and the ability to destroy the economy would not exist without easy money.

So, if you want to get the corrupting effect of money out of politics, END THE FEDERAL RESERVE SYSTEM.

They are the source of the growing gap between rich and poor. They are the cause of recessions and depressions. They are at the heart of corporate control of our government. The ability to control money is the ability to control people.

Do you agree with this or not? If we got rid of the Federal Reserve, 90% of the problem would be solved. Then we could have a discussion on what, if any, government regulations might be necessary under those conditions. But if you think that we can simply add more regulations without touching the Fed or fundamentally reforming our banking and monetary system, you will get nowhere.

I disagree adamently. This opinion is completely bereft of any historical perspective. In the 1920s we had a gold standard, no central bank, virtually no labor laws, and some of the most unregulated markets in history save the ones we have now in the financial industry and it brought us the greatest economic collapse in our history as a nation. Removing the Fed, in my opinion is not really a solution. The Fed can be utilized in ways that do soften economic booms and busts. The largest problem with the Fed is its complete lack of democratic accountability, not market accountability. If I were to wave my magic wand tomorrow what I would do is make the lead of the Fed and all of the boards members of the Fed democratically elected positions just like the Presidency and Congress. The Fed would still be subject to Congressional oversight but they would also be subject to open records laws (which I don't believe they currently are). They would all have 4 year rotating terms with a 3 term limit.

There are other reforms here I would like to see regarding that but they are more general to our entire electoral process rather than specific to the Fed so I won't really go into it right now.

You have been taught revisionist history regarding the period. The "roaring twenties" was a decade fueled by the Federal Reserve money machine. We DID have a central bank. The Federal Reserve was created in 1913. We DID have a gold standard, but the Fed was steadily undermining that standard, until it broke down in the 1930s and Roosevelt stole the peoples gold.

Here is what you need to know about that period. Ludwig von Mises, the greatest economist of the 20th century, was one of the only people to correctly predict that Fed action during the 20s lead to an artificial boom that caused the Great Depression. Everyone else, including John Maynord Keynes, predicted a new era of prosperity and saw no problems coming.

You were probably taught that the Great Depression was caused by free markets and the gold standard. That is completely false. The Great Depression was caused by the Federal Reserve and government tinkering with interest rates, distorting the market and causing malinvestment. Hoover and Roosevelt's policies made things dramatically worse.

We have been stuck with a fraudulent economic paradigm based on Keynesian fallacies ever since. Those policies didn't work then and they won't work now.

Read this article on von MIses and explain how he (or I) am wrong:

http://online.wsj.com/article/SB10001424052748704471504574443600711779692.html

Ah you are one of those. EVeryone realize Ayn RAnd was full of shit and now the Libertarians have started another cult of personality with Mises.

"One of those"? Ayn Rand was never a libertarian and she openly despised libertarians. That is why she called her ideology "objectivism". She was never an economist nor a serious thinker regarding libertarian ideology. Progressives like to anoint her as some kind of spokesperson for libertarianism because they think she can be easily criticized for her "cold" demeanor. She has made some valid points in her novels, but don't ever think that she is an economist or speaks for libertarians, that is simply false.

As for Ludwig von Mises, I would wager you have read precisely nothing that he wrote in his lifetime. I don't have a cult of personality about him. My reading of economics has lead me to believe that he was the greatest economist in the past one hundred years. This is due to his precient predictions and correct ideas about the failure of the "new economics". His ideas regarding the business cycle and the failure of fiat money are playing out in front of our eyes. He new Keynes was full of shit and his ideas would usher in rampant inflation, a breakdown of the monetary system and a deindustrialization of our manufacturing base as business fled overseas following our export of dollars.

He correctly predicted the Great Depression when no one else did. His legacy and ideas speak for themselves. I don't have to defend them.

You might want to actually read some of his books before you criticize him.

I noticed that you conveniently ignored the two or three posts in this thread where I provide you with text book examples of market failures that have been documented over and over and over. No offense to everyone else here, but it is really difficult for you to spout your dogma when someone actually answers your loaded question rather directly with established economic fact. Best of luck to you. Don't forget to pull your head out of the sand to eat.

I have responded to your post on "the tragedy of the commons", which you seem to misunderstand. You cannot expect me to answer every single question instantly. I do have a life outside of this forum.

I would recommend you cease with the snarky tone and engage a little more deeply in the ideology of Austrian economics versus the current "mainstream" Keynesian model. I have read a lot of Keynesian economics and have compared it extensively with Austrian theories. I have poured through Bastiat, Mises, Hazlitt, Menger and many others. Of course I have even read Krugman, and many other cotemporary economists that I think are so wrong. I am certainly not bereft of perspective on this subject.

However, generally when there is a major crisis, I think we should look to those who understand what caused the crisis rather than those who were oblivious even a week before the crash. Might sound crazy to you, but to everyone else, this is only common sense.

The track record of accurate predictions from the Austrian school is unrivaled.

Talking about the Fed manipulating interest rates does not act as a blanket principle for all governmental intervention.

I never said it did. But you should come up with something better than the "tragedy of the commons" if you want to prove the failure of the market economy.

For fucks sake, learn how to use the quote commands. I don't really care what you opinion of Ayn Rand is. The fact of the matter is that libertarians in this country have been using her writings as the backdrop for viritually all of their discussions up until about a year and half ago when even Alan Greenspan said that the ideas he took from her were wrong. I have talked about her bullcrap at length elsewhere here so I am not even going to go into it. The fact of the matter is, Libertarians on this board and elsewhere only started bringing up Mises name about a year or two ago and they always preface it with some bullshit, self-created title like "the greatest economist of the 20th century." That is a cult of personality.

And, yes, I have read some of Mises works. I have not been particularly convinced by any of them. In fact, the thread that I could not find was a direct response to a paper one of you people posted on here from The Mises Institute. So, I am familiar with the ideology.

And I did bring up more than the tragedy of the commons - which you still don't understand - but you, again, neglected to read and respond to it. You have responded to about 10 other posts after that one so you did indeed have the time to do so. I am gathering that your neglect of it is because I actually asked you to look something up and I know how seeking knowledge goes with you folks. You are "objective" until you are confronted with evidence that conflicts with your ideology and then you resort to repeating empty statements like, "Of course the market will produce better outcomes because there is competition!!!!" and then provide no proof that this is actually the case.

You have wrongly labeled me as a Keynesian, sir. You assume too much. Read some Proudhon, Noam Chomsky, Benjamin Tucker, Kropotkin, and some neo-Marxist literature and get back to me. Then we'll have a real conversation.

ah2
Joined:
Dec. 13, 2010 10:00 pm
Quote ah2:

For fucks sake, learn how to use the quote commands. I don't really care what you opinion of Ayn Rand is. The fact of the matter is that libertarians in this country have been using her writings as the backdrop for viritually all of their discussions up until about a year and half ago when even Alan Greenspan said that the ideas he took from her were wrong. I have talked about her bullcrap at length elsewhere here so I am not even going to go into it. The fact of the matter is, Libertarians on this board and elsewhere only started bringing up Mises name about a year or two ago and they always preface it with some bullshit, self-created title like "the greatest economist of the 20th century." That is a cult of personality.

And, yes, I have read some of Mises works. I have not been particularly convinced by any of them. In fact, the thread that I could not find was a direct response to a paper one of you people posted on here from The Mises Institute. So, I am familiar with the ideology.

And I did bring up more than the tragedy of the commons - which you still don't understand - but you, again, neglected to read and respond to it. You have responded to about 10 other posts after that one so you did indeed have the time to do so. I am gathering that your neglect of it is because I actually asked you to look something up and I know how seeking knowledge goes with you folks. You are "objective" until you are confronted with evidence that conflicts with your ideology and then you resort to repeating empty statements like, "Of course the market will produce better outcomes because there is competition!!!!" and then provide no proof that this is actually the case.

You have wrongly labeled me as a Keynesian, sir. You assume too much. Read some Proudhon, Noam Chomsky, Benjamin Tucker, Kropotkin, and some neo-Marxist literature and get back to me. Then we'll have a real conversation.

Tells us what you really think AH2.

Laborisgood's picture
Laborisgood
Joined:
Jul. 31, 2007 4:01 pm

Subtle just doesn't seem to be working...

ah2
Joined:
Dec. 13, 2010 10:00 pm

http://www.j-bradford-delong.net/politics/whynotthegoldstandard.html

mdhess's picture
mdhess
Joined:
Apr. 9, 2010 11:43 pm
Quote Art:
My reading of economics has lead me to believe that he was the greatest economist in the past one hundred years.

I would be not be likely to read Von Mises' treatises any more than I would be likely to read the writings of a creationist. He was not a great economist in any sense. His claim to fame, from what I have read, was his wonderful observation that human behaviors are just so damned unpredictable hard to understand that Economics cannot be subjected to empirical scientific scrutiny. It arose from an observation of exactly what he espoused in his religion. That is, the late 19th and early 20th century was characterized by huge boom-bust cycles caused by those famous "business cycles" that he so trusted. These trends persisted through the period before there was a central bank and after. Hard to blame them on the central bank.

As far as being a worthy competitor to Keynesian economics, Keynes' views got no traction until 1930. Hardly good timing for a coherent comparison. Keynes had a tough time convincing FDR that deficit spending was the remedy for the Great Depression, and like Obama, Roosevelt waited until WWII forced him into substantial deficit spending. Keynes' views got plenty of vindication thereafter. Mises' religion has never been vindicated in any country or any economy in the history of the world.

The ignorance on display here is staggering. You basically admit you have NEVER read anything that Mises wrote, yet you compare him to a "creationist" who argues with established scientific fact. Most people have the diginity to at least learn about something before they run their mouth about its merits. There are so many historical fallacies in your arguments that it is amazing. I can see you were well fed on government propaganda growing up.

First, watch this youtube video: http://www.youtube.com/watch?v=91OIBnrjzLU

Central banks are not the only institutions that cause the business cycle. Any expansion of credit will cause a bust eventually.

We were not operating under Austrian, market oriented policies for parts of the 19th century. We printed money to fight the civil war, we established the first central bank, and later got rid of it. These events caused a panic. What you fail to understand is that a recession is not something to be fear if it is correcting malinvestment and misdirected capital that proceeded it. That point is absolutely essential for you to understand. If it is true (and it isn't) that we had more "corrections" before the Fed, that doesn't mean that the economy has been healthier under the control of a central bank.

What should be done when there is a housing bubble or a tech bubble or any boom phase that is created artificially due to malinvestment and misdirected capital? This economy is not secure nor is it sustainable in any rational sense. During a boom phase we might appear wealthier but it is illusory. What is necessary is the correction to occur, with some pain. But that allows the economy to return to health. What the Fed has done so many times is manipulate interest rates and prevent the recession or depression from coming. The market is desperately trying to correct the problem, yet Fed chairmen are keeping the bubble going, making it worse and worse. When the inevitable correction finally occurs, it is much deeper and more severe than it would otherwise have been.

There are many things that cause malinvestment. A central bank is not the only thing. The main contention of the Austrian's is that knowing that a boom is an artificial, unhealthy economy based on speculation and misdirected capital, the most important thing is to allow the correction to occur as quickly as possible. The sooner it happens, the more painless and easy it becomes. Then the economy is cleansed and returned to health. Then, and only then, can the economy have sustained growth.

A lot of what we have been taught about the length and severity of 19th century banking panics have been grossly exagerated. Its not like they are going to sell the concept of the Federal Reserve on the truth, being that the institution was designed as a banking cartel to protect the very wealthy and extract interest payments when they print money for the government. No, they have to exaggerate the "panics" of the 19th century so there is some pretext of the central bank being in the general interest of the public when the truth is the exact opposite.

On another point, World War II and deficit spending did NOT get us out of the Great Depression. The Depression finally ended in 1946 or 1947 after the war ended. Our government slashed spending by two thirds and cut taxes by one third. It was the largest spending cuts ever taken in Washington. Keynesian economists warned of catastrophe and a worsening economy. This went against everything that the "new" Keynesian economists advised.

And, yet, we had a robust recovery. As a result of this action in the late forties, America thrived in the fifties and sixties. This exact thing happened during the Depression of 1920-21. Government did NOT intervene, cut spending and allowed the market to correct. That one year was worse than most years of the great depression. However, the recovery happened so quickly that we don't even read about this event in history books. This validated the Austrian School prescription for dealing with an economic crisis. It worked then, and finally after interventionist policies turned the stock market crash of 29 into a seventeen year nightmare, the same policies of cutting back government spending and allowing the needed correction to occur ended the Great Depression.

Read up about this. Visit Mises.org. I suggest you read "America's Great Depression" by Murray Rothbard. Also, study about the Depression of 1920:

http://en.wikipedia.org/wiki/Depression_of_1920%E2%80%9321

If you care to comment again, actually read some of this material before you open your mouth to compare me to a "creationist" or a "flat-earther" or whatever condescending insult you might think to use to cover a lack of depth in your arguments.

jrodefeld's picture
jrodefeld
Joined:
Oct. 15, 2011 2:24 am
Quote ah2:
Quote jrodefeld:Your argument here is particularly flawed. The Tragedy of the Commons is indeed a real economic concept and dilemma but you are putting forth the claim that it is a coherent argument against the free market. This couldn't be more wrong. Von Mises wrote extensively about the Tragedy of the Commons and he agreed that it was a problem:

"If land is not owned by anybody, although legal formalism may call it public property, it is utilized without any regard to the disadvantages resulting. Those who are in a position to appropriate to themselves the returns — lumber and game of the forests, fish of the water areas, and mineral deposits of the subsoil — do not bother about the later effects of their mode of exploitation. For them the erosion of the soil, the depletion of the exhaustible resources and other impairments of the future utilization are external costs not entering into their calculation of input and output. They cut down the trees without any regard for fresh shoots or reforestation. In hunting and fishing they do not shrink from methods preventing the repopulation of the hunting and fishing grounds."

However, I will copy an argument made by a friend of mine, so I don't do the disservice of paraphrasing what he said:

"Imagine a commons, owned by none, and surrounded by privately owned plots of land. On each privately owned plot resides a herdsman with his herd. Each herdsman has a choice of letting his herd graze on his own piece of land or on the commons. When the herd grazes, it depletes the land and thus cannot be allowed to overgraze lest the land be ruined. Since each herdsman owns his own piece of land, he has the incentive to maintain and cultivate it, and thus wishes to prevent his herd from overgrazing and ruining it. But what of the commons? If he allows his herd to graze and deplete the commons, his own piece of land is left pristine. Thus, he accrues the benefits of grazing his herd, with none of the costs. Further, each herdsman knows that every other herdsman has the same incentive, to graze their herd on the commons over their own land, and therein lies the tragedy according to Hardin, for in that rational yet self interested analysis of each herdsmen ensues a mad dash to use up the commons before anyone else can, thereby ruining it.

This simple yet powerfully illustrative example of the tendency for commons to be abused, depleted, and/or ruined is an extremely important concept in understanding pollution, environmental degradation, resource depletion, and similar problems today. But first, a closer examination of the fundamental problem is required. Many readers mistake the tragedy of the commons as an argument against the free market and in favor of the state. Perhaps Hardin himself is partially to blame for this since he concludes that "the tragedy of the commons... must be prevented... by coercive laws or taxing devices," and that "the only kind of coercion I recommend is mutual coercion, mutually agreed upon by the majority of the people affected." To paraphrase: the state must be the arbiter of the commons to prevent its misuse. Unfortunately, the thinking here, in true statist fashion, is completely reversed. Recall the decision each herdsman faced. Since he owned his own piece of land, he had the incentive to maintain and cultivate it. The problem arose because of the existence of the commons, which he and every other herdsman had the incentive to use and deplete before others could. Thus, it was a tragedy of thecommons, and not a tragedy of the privately owned plots of land. This is the all-important observation. The fundamental problem is not with the free market or the rationally self interested actions of the herdsman, but rather with the existence of the commons! If the commons had been auctioned off to the highest bidder, or broken up and sold off in smaller pieces, there would be no tragedy. Private property solves the tragedy that is endemic to the existence of public property."

Austrain economists, libertarians and our founding fathers believed strongly that property should be owned by individuals, not by the State. Historical analysis has proven that land owned by private individuals, with the State enforcing property rights, has been far better maintained and taken care of than "the Commons", or land owned by the government "for everyone". Though the concept seems nice, land owned by everyone is really owned by no one and people are quick to pollute the water, misuse the land or exploit it. No one suffers directly. No one can challenge that violation in court as can occur when property rights are violated.

This was a nice try at attempting to disprove the merits of the market but, as I've just illustrated, your argument is really against the existence of the "commons" and an argument in favor of private property, a bedrock concept in libertarian ideology.

Actually, your friend doesn't understand what the tragedy of the commons really is because he takes Hardin's example too literally. The example of the common field is merely a tangible illustration of the concept and not a material reality. He utilizes it as a type of parable to teach people the concept of the tragedy of the commons. If you actually read my whole post I sort of address this but I will try to be more clear. A common good is one that is RIVALROUS but NON-EXCLUDABLE. The issue with the pasture example, while it provides a good illustration of the concept, is that a pasture is not truly a common good. And this is perhaps why libertarians get confused. Land is inherently excludable. I can prohibit someone from coming on a particular patch of land (or their cows) by placing a fence around it.

So, to be very clear - the pasture example was to illustrate the concept but is not itself a common good according to the strict economic definition. This is why Hardin moves on to air pollution because this IS an example of a common good. This is where he addresses real world application.

You can not buy a plot of air. You cannot put a fence around air. Short of placing a factory inside a hermetically sealed bubble, you cannot contain air pollution in the way you can contain access to a field. Air and air cleanliness represents a common good in the strictest sense because you cannot exclude the use of air by any readily available means AND it is a finite resource in that putting pollution into the air does increase the PPM of particular chemicals within a particular geographical area. This is a common good.

EVERY solution just proposed by your friend is COMPLETELY INSUFFICIENT in dealing with this phenomenon. When you have a good that is inherently NON-EXCLUDABLE it becomes IMPOSSIBLE to divide it up according to property rights as your friend suggests.

You cannot divide up water molecules. You cannot divide up air. You cannot divide up weather patterns. You cannot divide up the water table (as it also has currents that make it transient), You cannot divide up global warming and climate change. You cannot divide up the ozone into plots.

COMMON GOODS NOT THE COMMONS. GET IT THROUGH YOUR HEAD.

Okay, let's talk about air pollution. I think this is a very important topic. And let me say that under a market economy and a limited federal government, I would not oppose the idea for the government to set certain standards for air quality and emissions. If there is truly no way to address the problem with property rights. The problem is that any time government gets involved with prior restrain types of regulations, they become corrupt and certain industries get exemptions. We want to prevent this. The best way to deal with pollution or fraud or any type of corporate or personal crime or misconduct is to be able to identify a victim and the perpetrator.

I don't think you are correct that you cannot determine who caused the pollution that might be polluting your air or affecting you personally. Murray Rothbard wrote extensively about how a libertarian society can and should deal with pollution:

http://mises.org/daily/2120#11

The important part of this is that it is inherently a violation of liberty for government to commit aggression or force against another if they have not been proven to have negatively affected another directly through their actions, in this case polluting their air.

It shouldn't be hard to see that with only a couple high profile cases won by individuals against a firm thought to be polluting and putting citizens health at risk, that business would be forced to change their behavior. In contrast, a federal bureaucracy imposing on every business indiscriminantly whether they have harmed another or not. I prefer that we try to minimize the use of aggression or force in society. Disputes and settlements should be established through the courts, proving harm done that warrants compensation and a change in behavior.

The problem with this debate is that I am arguing for moving towards a more peaceful society based on persuasion and not coersion. I would like to scale back government and follow the Constitution. You, in this particular debate are tasked with railing off any number of things until you find one that might be determined to be a "market failure", or something that the market cannot effectively delivery. Let's say you are right about air pollution and we can only rely on federal agencies to protect us.

Take a step back and examine my overall premise. The main thing I mentioned was health care because that is a very big part of our economy. And many progressives have come to the conclusion that the market cannot delivery medical care adequately. I cannot figure out what they base that assertion on. Your putting forth the concept of the "Tragedy of the Commons" I think is only obscuring the point of this discussion.

jrodefeld's picture
jrodefeld
Joined:
Oct. 15, 2011 2:24 am
Quote ah2:

For fucks sake, learn how to use the quote commands. I don't really care what you opinion of Ayn Rand is. The fact of the matter is that libertarians in this country have been using her writings as the backdrop for viritually all of their discussions up until about a year and half ago when even Alan Greenspan said that the ideas he took from her were wrong. I have talked about her bullcrap at length elsewhere here so I am not even going to go into it. The fact of the matter is, Libertarians on this board and elsewhere only started bringing up Mises name about a year or two ago and they always preface it with some bullshit, self-created title like "the greatest economist of the 20th century." That is a cult of personality.

I know a lot of libertarians and some of us have read Ayn Rand and enjoyed some of her novels. However, no one that I know of has held her up as some kind of idol or spokesperson. In fact, I have a number of very serious criticisms with her. Mises is a giant intellectually compared to Ayn Rand. I think Rothbard, Hayek, Hazlitt, Bastiat and a number of other thinkers are far more accomplished than Ayn Rand.

I, and many others, think of Mises as the best economist in the last century. That is our opinion based on his contributions to economic thought and libertarian ideology. Even if you don't agree with him, it would be hard to argue against his influence and integrity. Human Action is a classic and an astounding work that stands as a towering intellectual achievement. He pioneered the only rational explanation for the creation of financial bubbles with his Theory of the Business Cycle. He understood human nature and the study of human action better than any other thinker that I know of. I think he was completely right that economics is not about charts and graphs, rather it was about the study of human action and humans are incredibly complex and not conducive to economic models and bureaucrats trying to "plan" their economic lives for them.

I have a theory as to why progressives like yourself want Ayn Rand to be the posterchild for libertarianism. She was know to say things that were controversial and she came across as cold and uncaring. You think that you can tarnish the ideas of liberty by associating them with her. It is far harder for you to dispute the merits of the theories of true intellectual gianst like von Mises, Rothbard and Bastiat.

Quote ah2:And, yes, I have read some of Mises works. I have not been particularly convinced by any of them. In fact, the thread that I could not find was a direct response to a paper one of you people posted on here from The Mises Institute. So, I am familiar with the ideology.

Well, then why don't you tell me what you find so wrong about the arguments put forth for sound money, against a federal reserve and in favor of market pricing in an economy?

Quote ah2:And I did bring up more than the tragedy of the commons - which you still don't understand - but you, again, neglected to read and respond to it. You have responded to about 10 other posts after that one so you did indeed have the time to do so. I am gathering that your neglect of it is because I actually asked you to look something up and I know how seeking knowledge goes with you folks. You are "objective" until you are confronted with evidence that conflicts with your ideology and then you resort to repeating empty statements like, "Of course the market will produce better outcomes because there is competition!!!!" and then provide no proof that this is actually the case.

You have wrongly labeled me as a Keynesian, sir. You assume too much. Read some Proudhon, Noam Chomsky, Benjamin Tucker, Kropotkin, and some neo-Marxist literature and get back to me. Then we'll have a real conversation.

I have read Chomsky. He makes some salient points on some issues. He is certainly worthy of some amount of respect for his intellect. He also agrees with Ron Paul on foreign policy almost entirely.

Here is a clip I particularly like: http://www.youtube.com/watch?v=01e8-zSLkg0

But neo-Marxism? Really? You'll have to explain why, exactly, such a discredited ideology appeals to you. I would be interested in hearing your answer.

jrodefeld's picture
jrodefeld
Joined:
Oct. 15, 2011 2:24 am
Quote jrodefeld:
Quote ah2:

For fucks sake, learn how to use the quote commands. I don't really care what you opinion of Ayn Rand is. The fact of the matter is that libertarians in this country have been using her writings as the backdrop for viritually all of their discussions up until about a year and half ago when even Alan Greenspan said that the ideas he took from her were wrong. I have talked about her bullcrap at length elsewhere here so I am not even going to go into it. The fact of the matter is, Libertarians on this board and elsewhere only started bringing up Mises name about a year or two ago and they always preface it with some bullshit, self-created title like "the greatest economist of the 20th century." That is a cult of personality.

I know a lot of libertarians and some of us have read Ayn Rand and enjoyed some of her novels. However, no one that I know of has held her up as some kind of idol or spokesperson. In fact, I have a number of very serious criticisms with her. Mises is a giant intellectually compared to Ayn Rand. I think Rothbard, Hayek, Hazlitt, Bastiat and a number of other thinkers are far more accomplished than Ayn Rand........................

.........I have a theory as to why progressives like yourself want Ayn Rand to be the posterchild for libertarianism. She was know to say things that were controversial and she came across as cold and uncaring. You think that you can tarnish the ideas of liberty by associating them with her. It is far harder for you to dispute the merits of the theories of true intellectual gianst like von Mises, Rothbard and Bastiat.

In all seriousness, Jrodefeld, use the quote function available on this site. It's a big blue rectangle that says quote. It might help make your point(s). If you can't master the archaic technology Thom provides here, then it's that much harder for anyone to buy into your Libertarian sales pitch.

Perhaps you and your friends are an advanced and select breed of Libertarian who have long seen the shortcomings of Rand, but the rest of the Libertarians out there haven't got the memo. Hell, your saviour, Ron Paul named his kid after her. Unfortunately for your team, the recent epidemic of Tea Party congressional members love to reference Rand as well. This will ultimately hasten the demise of the Libertarian fad.

I'm no expert on political ideologies, but I would say from the empirical evidence I've gathered in recent years, Ayn Rand is the perfect example of the sociopathic behavior that has permeated our world (courtesy of the GOP). If you feel someone else is a better representative of the true ideals of Libertarianism, you better get the word out, because Rand is toxic.

Laborisgood's picture
Laborisgood
Joined:
Jul. 31, 2007 4:01 pm
Quote jrodefeld:
Quote ah2:
Quote jrodefeld:Your argument here is particularly flawed. The Tragedy of the Commons is indeed a real economic concept and dilemma but you are putting forth the claim that it is a coherent argument against the free market. This couldn't be more wrong. Von Mises wrote extensively about the Tragedy of the Commons and he agreed that it was a problem:

"If land is not owned by anybody, although legal formalism may call it public property, it is utilized without any regard to the disadvantages resulting. Those who are in a position to appropriate to themselves the returns — lumber and game of the forests, fish of the water areas, and mineral deposits of the subsoil — do not bother about the later effects of their mode of exploitation. For them the erosion of the soil, the depletion of the exhaustible resources and other impairments of the future utilization are external costs not entering into their calculation of input and output. They cut down the trees without any regard for fresh shoots or reforestation. In hunting and fishing they do not shrink from methods preventing the repopulation of the hunting and fishing grounds."

However, I will copy an argument made by a friend of mine, so I don't do the disservice of paraphrasing what he said:

"Imagine a commons, owned by none, and surrounded by privately owned plots of land. On each privately owned plot resides a herdsman with his herd. Each herdsman has a choice of letting his herd graze on his own piece of land or on the commons. When the herd grazes, it depletes the land and thus cannot be allowed to overgraze lest the land be ruined. Since each herdsman owns his own piece of land, he has the incentive to maintain and cultivate it, and thus wishes to prevent his herd from overgrazing and ruining it. But what of the commons? If he allows his herd to graze and deplete the commons, his own piece of land is left pristine. Thus, he accrues the benefits of grazing his herd, with none of the costs. Further, each herdsman knows that every other herdsman has the same incentive, to graze their herd on the commons over their own land, and therein lies the tragedy according to Hardin, for in that rational yet self interested analysis of each herdsmen ensues a mad dash to use up the commons before anyone else can, thereby ruining it.

This simple yet powerfully illustrative example of the tendency for commons to be abused, depleted, and/or ruined is an extremely important concept in understanding pollution, environmental degradation, resource depletion, and similar problems today. But first, a closer examination of the fundamental problem is required. Many readers mistake the tragedy of the commons as an argument against the free market and in favor of the state. Perhaps Hardin himself is partially to blame for this since he concludes that "the tragedy of the commons... must be prevented... by coercive laws or taxing devices," and that "the only kind of coercion I recommend is mutual coercion, mutually agreed upon by the majority of the people affected." To paraphrase: the state must be the arbiter of the commons to prevent its misuse. Unfortunately, the thinking here, in true statist fashion, is completely reversed. Recall the decision each herdsman faced. Since he owned his own piece of land, he had the incentive to maintain and cultivate it. The problem arose because of the existence of the commons, which he and every other herdsman had the incentive to use and deplete before others could. Thus, it was a tragedy of thecommons, and not a tragedy of the privately owned plots of land. This is the all-important observation. The fundamental problem is not with the free market or the rationally self interested actions of the herdsman, but rather with the existence of the commons! If the commons had been auctioned off to the highest bidder, or broken up and sold off in smaller pieces, there would be no tragedy. Private property solves the tragedy that is endemic to the existence of public property."

Austrain economists, libertarians and our founding fathers believed strongly that property should be owned by individuals, not by the State. Historical analysis has proven that land owned by private individuals, with the State enforcing property rights, has been far better maintained and taken care of than "the Commons", or land owned by the government "for everyone". Though the concept seems nice, land owned by everyone is really owned by no one and people are quick to pollute the water, misuse the land or exploit it. No one suffers directly. No one can challenge that violation in court as can occur when property rights are violated.

This was a nice try at attempting to disprove the merits of the market but, as I've just illustrated, your argument is really against the existence of the "commons" and an argument in favor of private property, a bedrock concept in libertarian ideology.

Actually, your friend doesn't understand what the tragedy of the commons really is because he takes Hardin's example too literally. The example of the common field is merely a tangible illustration of the concept and not a material reality. He utilizes it as a type of parable to teach people the concept of the tragedy of the commons. If you actually read my whole post I sort of address this but I will try to be more clear. A common good is one that is RIVALROUS but NON-EXCLUDABLE. The issue with the pasture example, while it provides a good illustration of the concept, is that a pasture is not truly a common good. And this is perhaps why libertarians get confused. Land is inherently excludable. I can prohibit someone from coming on a particular patch of land (or their cows) by placing a fence around it.

So, to be very clear - the pasture example was to illustrate the concept but is not itself a common good according to the strict economic definition. This is why Hardin moves on to air pollution because this IS an example of a common good. This is where he addresses real world application.

You can not buy a plot of air. You cannot put a fence around air. Short of placing a factory inside a hermetically sealed bubble, you cannot contain air pollution in the way you can contain access to a field. Air and air cleanliness represents a common good in the strictest sense because you cannot exclude the use of air by any readily available means AND it is a finite resource in that putting pollution into the air does increase the PPM of particular chemicals within a particular geographical area. This is a common good.

EVERY solution just proposed by your friend is COMPLETELY INSUFFICIENT in dealing with this phenomenon. When you have a good that is inherently NON-EXCLUDABLE it becomes IMPOSSIBLE to divide it up according to property rights as your friend suggests.

You cannot divide up water molecules. You cannot divide up air. You cannot divide up weather patterns. You cannot divide up the water table (as it also has currents that make it transient), You cannot divide up global warming and climate change. You cannot divide up the ozone into plots.

COMMON GOODS NOT THE COMMONS. GET IT THROUGH YOUR HEAD.

Okay, let's talk about air pollution. I think this is a very important topic. And let me say that under a market economy and a limited federal government, I would not oppose the idea for the government to set certain standards for air quality and emissions. If there is truly no way to address the problem with property rights. The problem is that any time government gets involved with prior restrain types of regulations, they become corrupt and certain industries get exemptions. We want to prevent this. The best way to deal with pollution or fraud or any type of corporate or personal crime or misconduct is to be able to identify a victim and the perpetrator.

I don't think you are correct that you cannot determine who caused the pollution that might be polluting your air or affecting you personally. Murray Rothbard wrote extensively about how a libertarian society can and should deal with pollution:

http://mises.org/daily/2120#11

The important part of this is that it is inherently a violation of liberty for government to commit aggression or force against another if they have not been proven to have negatively affected another directly through their actions, in this case polluting their air.

It shouldn't be hard to see that with only a couple high profile cases won by individuals against a firm thought to be polluting and putting citizens health at risk, that business would be forced to change their behavior. In contrast, a federal bureaucracy imposing on every business indiscriminantly whether they have harmed another or not. I prefer that we try to minimize the use of aggression or force in society. Disputes and settlements should be established through the courts, proving harm done that warrants compensation and a change in behavior.

The problem with this debate is that I am arguing for moving towards a more peaceful society based on persuasion and not coersion. I would like to scale back government and follow the Constitution. You, in this particular debate are tasked with railing off any number of things until you find one that might be determined to be a "market failure", or something that the market cannot effectively delivery. Let's say you are right about air pollution and we can only rely on federal agencies to protect us.

Take a step back and examine my overall premise. The main thing I mentioned was health care because that is a very big part of our economy. And many progressives have come to the conclusion that the market cannot delivery medical care adequately. I cannot figure out what they base that assertion on. Your putting forth the concept of the "Tragedy of the Commons" I think is only obscuring the point of this discussion.

It's not obscuring the discussion at all. The title of your thread is "what is a 'market failure'"? I am providing you with text book examples of market failures that are discussed and heavily documented in every single economics textbook you can lay your hands on. Tragedy of the commons is a market failure. Free rider problems are a market failure. Congestion can also constitute or create market failures. The list is not me grabbing at straws. It is me answering your damn question.

In regards to the article you linked, I actually agree with the first portion of it. This is a good summary of his opening arguments:

As we shall see, tort or criminal law is a set of prohibitions against the invasion of, or aggression against, private property rights; that is, spheres of freedom of action by each individual. But if that is the case, then the implication of the command, "Thou shall not interfere with A's property right," is that A's property right is just and therefore should not be invaded. Legal prohibitions, therefore, far from being in some sense value-free, actually imply a set of theories about justice, in particular the just allocation of property rights and property titles. "Justice" is nothing if not a normative concept.

That however is where our agreement ends. The very next paragraph, is false:

In recent years, however, jurists and "Chicago school" economists have attempted to develop theories of value-free property rights, rights defined and protected not on the basis of ethical norms such as justice but of some form of "social efficiency."

So, in working out the first half of the article that justice and law is a set of socially determined norms, he then turns around and invalidates the Chicago school by saying that they are not concerned with some form of normative justice but with a postivist notion of "social efficiency." Utter bullshit. The Chicago is essentially concerned with justice issues, they simply define it differently then the Austrian school. It is this kind of strawman tactics and dishonestly the invalidates the opinions of the writers at Mises before they actually even get into their formal argument. He has already lied to you.

I don't disagree with his criticism of Coase. Again, I am not a supporter of the Chicago school per se and I really don't like Coase's theorem. Ironically, I have had libertarians throw his theorem in face before to show how the market will naturally take care of externalities. It is ironic to me that this person is criticizing his work.

The next section is actually pretty standard fair for libertarians - the only job of the government is to enforce laws that have to do with personal rights or property violations. However, this is part of Coase's point, you know. While he remains "neutral" on how property rights are defined, part of his point is that how property rights are defined determine what harms are considered legitimate and who ends up paying who. But then he goes on to outline one of the glaring limitations of most libertarian thought - "The vague concept of "harm" is substituted for the precise one of physical violence." He views this as a strength but this is exactly where libertarians fall short. And this is also part of the first issue he discusses - the socially contigent nature of defining a normative theory of justice. I DON NOT believe that government should be limited to intervening only in instances of physical harm. His subsequent criticism - "Once a nonphysical-invasion sense of harm is adopted, almost any outlaw act might be justified." - is also utter bullshit because he is then trying to make the argument that the only criteria we might use to define the limitations of government intervention is whether something is a physical or non-physical harm. As if there is no criteria we might use, for example, to separate intense and prolonged psychological abuse (like bullying) as opposed to Bob courting someone's girlfriend. This is the ole "If we let gays marry then people will start having sex with goats" argument. UTTER BULLSHIT. THIS IS LIE NUMBER TWO. There are countless other criteria that we cound define nonphsyical harms that are eligible for government intervention and not eligble for government intervention. This again, is him undercutting his own point at the beginning of the essay - that issues of justice are up for deliberation.

I found his discussion of the "reasonable man" and "bystander" problems interesting and compelling. For my part, this is why democratic governance and jury of peers is important. I have no illusions that our legal system is flawless. However, I am still not seeing how this pertains to the pollution issue. Would Rothbard then support my right to personally demolition a factory near my home because the pollution constitutes an immediate risk to me and my family? Perhaps that allows for too much collateral damage. If ExxonMobile decides to Frack in my town near my home which has been proved to cause cancer and kill people in the area, am I allowed to kill the CEO of ExxonMobile? The Board? All the shareholders? in interest of self-defense right? Is fracking or severe air pollution any less dangerous than someone pulling out a gun and aiming it at my head? Certainly it is slower but the end result is the same.

I don't have time to finish this response now. I don't want to lose any of this type so I will post it and finish reading the article later.

ah2
Joined:
Dec. 13, 2010 10:00 pm
The main contention of the Austrian's is that knowing that a boom is an artificial, unhealthy economy based on speculation and misdirected capital, the most important thing is to allow the correction to occur as quickly as possible.

Yes. this is what I read. too. It's not a very brilliant observation. Everybody knows that Government de-regilation and cronyism caused the housing bubble by allowing "misdirected capital". The activities of the Fed by simply printing numbers didn't ws never even used by America until 2008. We were already into the depression by then. If you want to demonstrate a cause and effect relationship, most people expect the "cause" to occur before the "effect".

There seems to be a timing disconnect here.

World War II and deficit spending did NOT get us out of the Great Depression. The Depression finally ended in 1946 or 1947 after the war ended. Our government slashed spending by two thirds and cut taxes by one third. It was the largest spending cuts ever taken in Washington. Keynesian economists warned of catastrophe and a worsening economy. This went against everything that the "new" Keynesian economists advised.

Cause: Massive deficit spending and and taxation to finance the war.

Effect: The depression ends along with the war.

Aftermath: Marginal tax rates are maintained at high levels in order to pay for the GI bill and the Marshall Plan. The economy booms for another 20 years until tax rates dwindle to Reagan era levels. Then we resume having those beloved havoc-producing "business cycles".

Cause and effect. Big deficit spending->stronger economy. The effect follows the cause.

Your account of the history of tax rates is somewhat different from the tables I have. Tax rates stayed in the 90% range into the 60s.

Art's picture
Art
Joined:
Jul. 31, 2007 4:01 pm

I love the part where Ron Paul is asked where Austrian Economics has ever been established. Nowhere. It is an intellectual vision, but not a real world example of human economic behavior, so it exists in religious dogma and moralism, not in nature.

Criticizing the present pathology is easy from every other perspective than Corporate. Criticizing government for being raped and then consenting to it has a place, but only if one is not giving the rapist a pass and a free range, oh, "market." What I keep hearing from the Libertarians keeps missing the whole point of democracy. While I would accept a more "anarchist" version of democracy if governing ourselves were the point, I do not hear much more than radically autonomous individualism being proposed. As a version of freedom, it is hopelessly blind and naive. That "for all" part is critical.

The idea that we are on our own, that there is no social solidarity or mutuality in which our individuality is grounded and that we are neither our brother's keeper nor to accept help when we are in need without shame is without soul.

Adam Smith was trying to apply Enlightenment Rationalism to the economic world to liberate the relationships of a rational economy. Its ultimately interdependent frame of the "invisible hand" was little more than the moral assumptions of Liberalism. What was new and exciting was the idea of being liberated from feudal debt and obligation to interact as economic freedmen in a fundamentally equitable exchange of value. As a romantic vision, or even as an intellectual construct which makes sense in context, the "free market" could even be a valuable idea revealing some important truths. But it does not exist in nature or history.

I think this matters. When the Austrians get doctrinal about money, they do not understand what money has been in human history and the economies of pre-Enlightenment societies. What they miss most of all is the fact that money represents serious disruptions in the human social web and is more about unpayable debts than commercial exchange. We see this today where corporations exploit the lives and resources of the people to extract "profits" from the business. We do not see honest exchanges of value where the people who live where oil is get to realize profits and live well. Instead, they suffer and die in horrendous and genocidal proportions. And the oil company profits are greater than ever.

Sorry. We cannot pretend that the economy is more important than people or nature. The debts are immoral and need to be canceled, not bought and resold to vulture capitalists. However, even were the accountants precise and the terms of the contract followed to the letter, the same bottom line would apply. Economies are never more important than humanity or our stewardship of the Earth. Even in Austria.

DRC's picture
DRC
Joined:
Jul. 31, 2007 4:01 pm
Quote Laborisgood:
Quote jrodefeld:

[quote=ah2]

For fucks sake, learn how to use the quote commands. I don't really care what you opinion of Ayn Rand is. The fact of the matter is that libertarians in this country have been using her writings as the backdrop for viritually all of their discussions up until about a year and half ago when even Alan Greenspan said that the ideas he took from her were wrong. I have talked about her bullcrap at length elsewhere here so I am not even going to go into it. The fact of the matter is, Libertarians on this board and elsewhere only started bringing up Mises name about a year or two ago and they always preface it with some bullshit, self-created title like "the greatest economist of the 20th century." That is a cult of personality.

I know a lot of libertarians and some of us have read Ayn Rand and enjoyed some of her novels. However, no one that I know of has held her up as some kind of idol or spokesperson. In fact, I have a number of very serious criticisms with her. Mises is a giant intellectually compared to Ayn Rand. I think Rothbard, Hayek, Hazlitt, Bastiat and a number of other thinkers are far more accomplished than Ayn Rand........................

.........I have a theory as to why progressives like yourself want Ayn Rand to be the posterchild for libertarianism. She was know to say things that were controversial and she came across as cold and uncaring. You think that you can tarnish the ideas of liberty by associating them with her. It is far harder for you to dispute the merits of the theories of true intellectual gianst like von Mises, Rothbard and Bastiat.

Quote Laborisgood:In all seriousness, Jrodefeld, use the quote function available on this site. It's a big blue rectangle that says quote. It might help make your point(s). If you can't master the archaic technology Thom provides here, then it's that much harder for anyone to buy into your Libertarian sales pitch.

Perhaps you and your friends are an advanced and select breed of Libertarian who have long seen the shortcomings of Rand, but the rest of the Libertarians out there haven't got the memo. Hell, your saviour, Ron Paul named his kid after her. Unfortunately for your team, the recent epidemic of Tea Party congressional members love to reference Rand as well. This will ultimately hasten the demise of the Libertarian fad.

Look, you cannot expect anyone to take you seriously if you insist on pulling facts out of your ass. And point taken about using quotes and formatting properly in this forum but that is truly not the relevent point is it? Nothing I have posted has been hard to descipher or follow. So lets leave that point.

But you want to criticize me, yet you repeat the easily disproven myth that Rand Paul was named after Ayn Rand. This has been disproven a thousand times. The truth as I see it here is that you don't really know too much about liberty or the free market. I have heard people on this very thread claim that Greenspan was an Austrian economist and a libertarian. Others repeatedly claim that our economic problems are solely due to "deregulation", which is also easily disproven.

And also, the liberal tradition of a belief in individual liberty and the market economy is not a "fad". When something absolutely works to enrich humanity and create prosperity, peace and human flourishing, it tends to persist. The liberal tradition dates back to at least the 17th century. And before that, the great Greek philosophers were writting about an ideal form of government known as a Republic, respecting individual rights and autonomy. This is not new.

Not to mention the ideas of sound money, that have been justified based on even a cursory examination of the history of man and government. Countries that allow their governments or bankers to dilute the money supply lose their liberties and eventually their empires and their societies crumble under the weight of inflation and fiat currencies. "Honest weights and measures" was stressed in the bible and endorsed by Jesus Christ. I am not a Christian but the value of honest money and the dangers of the "money changers" has been so well documented that it would take an utter imbecile to refute this much established history.

Perhaps you think this latest "fad" of Keynesian, interventionist central economic planning and paper money fueled inflation is somehow more sophisticated than similar efforts in the past. These fallacies are being exposed as we speak.

I don't know exactly what you are suggesting in place of a market economy and sound money. Are you a communist? Do you endorse Marxism? Or do you really think that by writting a few more regulations we can solve all our economic problems?

I think the reality of this situation is that history is firmly on my side of this debate.

Quote ah2: I'm no expert on political ideologies, but I would say from the empirical evidence I've gathered in recent years, Ayn Rand is the perfect example of the sociopathic behavior that has permeated our world (courtesy of the GOP). If you feel someone else is a better representative of the true ideals of Libertarianism, you better get the word out, because Rand is toxic.

You desperately need to put things into proper perspective. Ayn Rand was merely an author. She was not a trained economist. She was NEVER a spokesperson for the libertarians. She had nothing to do with Austrian economics. There is a reason she called her ideology "objectivism" and not libertarianism. Her ideas are her own.

I think there ARE some value to her novels but I understand why she remains controversial. Ron Paul and myself endorse and support community organizing, charity work, love for our fellow man and giving to the poor. These are tenets of the libertarian and austrian traditions to which I belong.

For Dr Paul, a devout Christian who believes in Christ's teachings about charity and peace and love for your fellow man, a smaller government is based on the strong conviction that governments do a terrible job at "charity" and engender dependancy and hopelessness on those they profess to help. With a society based on liberty, our argument is that we should all do our part to help the less fortunate, but it should be done on a voluntary basis through cooperation and not coercion or violence.

What our government is doing now is not charity. The policy of wealth redistribution and welfarism at the national level does not help the poor. The culture benefits those that are the strongest and can control the government and the Federal Reserve. The poor get the crumbs and it cannot begin to compensate for lost standard of living through inflation and lost upward mobility due to policies that have destroyed the economy.

I believe strongly, as Dr Paul does, that a proper market economy with honest money is the only humanitarian system known to man. It is only under the principles of liberty that famine and hunger can be eliminated entirely. And, a true market economy under Austrian principles, happens to be more egalitarian. Not due to force or redistribution, but do to the natural distribution of wealth that occurs when people are allowed to voluntarily engage in economic behavior that is mutually beneficial. The gap between rich and poor is less when there is no inflation and true wealth can only be attained by increasing production and innovation, which in turn benefits society as a whole.

I urge you not to write off libertarianism and certainly not Ron Paul or the Austrian economists who maintain the liberal tradition due to your opinion of Ayn Rand. And plenty of libertarians are not huge fans of hers.

jrodefeld's picture
jrodefeld
Joined:
Oct. 15, 2011 2:24 am
Quote ah2:
Quote jrodefeld:
Quote ah2:
Quote jrodefeld:Your argument here is particularly flawed. The Tragedy of the Commons is indeed a real economic concept and dilemma but you are putting forth the claim that it is a coherent argument against the free market. This couldn't be more wrong. Von Mises wrote extensively about the Tragedy of the Commons and he agreed that it was a problem:

"If land is not owned by anybody, although legal formalism may call it public property, it is utilized without any regard to the disadvantages resulting. Those who are in a position to appropriate to themselves the returns — lumber and game of the forests, fish of the water areas, and mineral deposits of the subsoil — do not bother about the later effects of their mode of exploitation. For them the erosion of the soil, the depletion of the exhaustible resources and other impairments of the future utilization are external costs not entering into their calculation of input and output. They cut down the trees without any regard for fresh shoots or reforestation. In hunting and fishing they do not shrink from methods preventing the repopulation of the hunting and fishing grounds."

However, I will copy an argument made by a friend of mine, so I don't do the disservice of paraphrasing what he said:

"Imagine a commons, owned by none, and surrounded by privately owned plots of land. On each privately owned plot resides a herdsman with his herd. Each herdsman has a choice of letting his herd graze on his own piece of land or on the commons. When the herd grazes, it depletes the land and thus cannot be allowed to overgraze lest the land be ruined. Since each herdsman owns his own piece of land, he has the incentive to maintain and cultivate it, and thus wishes to prevent his herd from overgrazing and ruining it. But what of the commons? If he allows his herd to graze and deplete the commons, his own piece of land is left pristine. Thus, he accrues the benefits of grazing his herd, with none of the costs. Further, each herdsman knows that every other herdsman has the same incentive, to graze their herd on the commons over their own land, and therein lies the tragedy according to Hardin, for in that rational yet self interested analysis of each herdsmen ensues a mad dash to use up the commons before anyone else can, thereby ruining it.

This simple yet powerfully illustrative example of the tendency for commons to be abused, depleted, and/or ruined is an extremely important concept in understanding pollution, environmental degradation, resource depletion, and similar problems today. But first, a closer examination of the fundamental problem is required. Many readers mistake the tragedy of the commons as an argument against the free market and in favor of the state. Perhaps Hardin himself is partially to blame for this since he concludes that "the tragedy of the commons... must be prevented... by coercive laws or taxing devices," and that "the only kind of coercion I recommend is mutual coercion, mutually agreed upon by the majority of the people affected." To paraphrase: the state must be the arbiter of the commons to prevent its misuse. Unfortunately, the thinking here, in true statist fashion, is completely reversed. Recall the decision each herdsman faced. Since he owned his own piece of land, he had the incentive to maintain and cultivate it. The problem arose because of the existence of the commons, which he and every other herdsman had the incentive to use and deplete before others could. Thus, it was a tragedy of thecommons, and not a tragedy of the privately owned plots of land. This is the all-important observation. The fundamental problem is not with the free market or the rationally self interested actions of the herdsman, but rather with the existence of the commons! If the commons had been auctioned off to the highest bidder, or broken up and sold off in smaller pieces, there would be no tragedy. Private property solves the tragedy that is endemic to the existence of public property."

Austrain economists, libertarians and our founding fathers believed strongly that property should be owned by individuals, not by the State. Historical analysis has proven that land owned by private individuals, with the State enforcing property rights, has been far better maintained and taken care of than "the Commons", or land owned by the government "for everyone". Though the concept seems nice, land owned by everyone is really owned by no one and people are quick to pollute the water, misuse the land or exploit it. No one suffers directly. No one can challenge that violation in court as can occur when property rights are violated.

This was a nice try at attempting to disprove the merits of the market but, as I've just illustrated, your argument is really against the existence of the "commons" and an argument in favor of private property, a bedrock concept in libertarian ideology.

Actually, your friend doesn't understand what the tragedy of the commons really is because he takes Hardin's example too literally. The example of the common field is merely a tangible illustration of the concept and not a material reality. He utilizes it as a type of parable to teach people the concept of the tragedy of the commons. If you actually read my whole post I sort of address this but I will try to be more clear. A common good is one that is RIVALROUS but NON-EXCLUDABLE. The issue with the pasture example, while it provides a good illustration of the concept, is that a pasture is not truly a common good. And this is perhaps why libertarians get confused. Land is inherently excludable. I can prohibit someone from coming on a particular patch of land (or their cows) by placing a fence around it.

So, to be very clear - the pasture example was to illustrate the concept but is not itself a common good according to the strict economic definition. This is why Hardin moves on to air pollution because this IS an example of a common good. This is where he addresses real world application.

You can not buy a plot of air. You cannot put a fence around air. Short of placing a factory inside a hermetically sealed bubble, you cannot contain air pollution in the way you can contain access to a field. Air and air cleanliness represents a common good in the strictest sense because you cannot exclude the use of air by any readily available means AND it is a finite resource in that putting pollution into the air does increase the PPM of particular chemicals within a particular geographical area. This is a common good.

EVERY solution just proposed by your friend is COMPLETELY INSUFFICIENT in dealing with this phenomenon. When you have a good that is inherently NON-EXCLUDABLE it becomes IMPOSSIBLE to divide it up according to property rights as your friend suggests.

You cannot divide up water molecules. You cannot divide up air. You cannot divide up weather patterns. You cannot divide up the water table (as it also has currents that make it transient), You cannot divide up global warming and climate change. You cannot divide up the ozone into plots.

COMMON GOODS NOT THE COMMONS. GET IT THROUGH YOUR HEAD.

Okay, let's talk about air pollution. I think this is a very important topic. And let me say that under a market economy and a limited federal government, I would not oppose the idea for the government to set certain standards for air quality and emissions. If there is truly no way to address the problem with property rights. The problem is that any time government gets involved with prior restrain types of regulations, they become corrupt and certain industries get exemptions. We want to prevent this. The best way to deal with pollution or fraud or any type of corporate or personal crime or misconduct is to be able to identify a victim and the perpetrator.

I don't think you are correct that you cannot determine who caused the pollution that might be polluting your air or affecting you personally. Murray Rothbard wrote extensively about how a libertarian society can and should deal with pollution:

http://mises.org/daily/2120#11

The important part of this is that it is inherently a violation of liberty for government to commit aggression or force against another if they have not been proven to have negatively affected another directly through their actions, in this case polluting their air.

It shouldn't be hard to see that with only a couple high profile cases won by individuals against a firm thought to be polluting and putting citizens health at risk, that business would be forced to change their behavior. In contrast, a federal bureaucracy imposing on every business indiscriminantly whether they have harmed another or not. I prefer that we try to minimize the use of aggression or force in society. Disputes and settlements should be established through the courts, proving harm done that warrants compensation and a change in behavior.

The problem with this debate is that I am arguing for moving towards a more peaceful society based on persuasion and not coersion. I would like to scale back government and follow the Constitution. You, in this particular debate are tasked with railing off any number of things until you find one that might be determined to be a "market failure", or something that the market cannot effectively delivery. Let's say you are right about air pollution and we can only rely on federal agencies to protect us.

Take a step back and examine my overall premise. The main thing I mentioned was health care because that is a very big part of our economy. And many progressives have come to the conclusion that the market cannot delivery medical care adequately. I cannot figure out what they base that assertion on. Your putting forth the concept of the "Tragedy of the Commons" I think is only obscuring the point of this discussion.

It's not obscuring the discussion at all. The title of your thread is "what is a 'market failure'"? I am providing you with text book examples of market failures that are discussed and heavily documented in every single economics textbook you can lay your hands on. Tragedy of the commons is a market failure. Free rider problems are a market failure. Congestion can also constitute or create market failures. The list is not me grabbing at straws. It is me answering your damn question.

In regards to the article you linked, I actually agree with the first portion of it. This is a good summary of his opening arguments:

As we shall see, tort or criminal law is a set of prohibitions against the invasion of, or aggression against, private property rights; that is, spheres of freedom of action by each individual. But if that is the case, then the implication of the command, "Thou shall not interfere with A's property right," is that A's property right is just and therefore should not be invaded. Legal prohibitions, therefore, far from being in some sense value-free, actually imply a set of theories about justice, in particular the just allocation of property rights and property titles. "Justice" is nothing if not a normative concept.

That however is where our agreement ends. The very next paragraph, is false:

In recent years, however, jurists and "Chicago school" economists have attempted to develop theories of value-free property rights, rights defined and protected not on the basis of ethical norms such as justice but of some form of "social efficiency."

So, in working out the first half of the article that justice and law is a set of socially determined norms, he then turns around and invalidates the Chicago school by saying that they are not concerned with some form of normative justice but with a postivist notion of "social efficiency." Utter bullshit. The Chicago is essentially concerned with justice issues, they simply define it differently then the Austrian school. It is this kind of strawman tactics and dishonestly the invalidates the opinions of the writers at Mises before they actually even get into their formal argument. He has already lied to you.

I don't disagree with his criticism of Coase. Again, I am not a supporter of the Chicago school per se and I really don't like Coase's theorem. Ironically, I have had libertarians throw his theorem in face before to show how the market will naturally take care of externalities. It is ironic to me that this person is criticizing his work.

The next section is actually pretty standard fair for libertarians - the only job of the government is to enforce laws that have to do with personal rights or property violations. However, this is part of Coase's point, you know. While he remains "neutral" on how property rights are defined, part of his point is that how property rights are defined determine what harms are considered legitimate and who ends up paying who. But then he goes on to outline one of the glaring limitations of most libertarian thought - "The vague concept of "harm" is substituted for the precise one of physical violence." He views this as a strength but this is exactly where libertarians fall short. And this is also part of the first issue he discusses - the socially contigent nature of defining a normative theory of justice. I DON NOT believe that government should be limited to intervening only in instances of physical harm. His subsequent criticism - "Once a nonphysical-invasion sense of harm is adopted, almost any outlaw act might be justified." - is also utter bullshit because he is then trying to make the argument that the only criteria we might use to define the limitations of government intervention is whether something is a physical or non-physical harm. As if there is no criteria we might use, for example, to separate intense and prolonged psychological abuse (like bullying) as opposed to Bob courting someone's girlfriend. This is the ole "If we let gays marry then people will start having sex with goats" argument. UTTER BULLSHIT. THIS IS LIE NUMBER TWO. There are countless other criteria that we cound define nonphsyical harms that are eligible for government intervention and not eligble for government intervention. This again, is him undercutting his own point at the beginning of the essay - that issues of justice are up for deliberation.

I found his discussion of the "reasonable man" and "bystander" problems interesting and compelling. For my part, this is why democratic governance and jury of peers is important. I have no illusions that our legal system is flawless. However, I am still not seeing how this pertains to the pollution issue. Would Rothbard then support my right to personally demolition a factory near my home because the pollution constitutes an immediate risk to me and my family? Perhaps that allows for too much collateral damage. If ExxonMobile decides to Frack in my town near my home which has been proved to cause cancer and kill people in the area, am I allowed to kill the CEO of ExxonMobile? The Board? All the shareholders? in interest of self-defense right? Is fracking or severe air pollution any less dangerous than someone pulling out a gun and aiming it at my head? Certainly it is slower but the end result is the same.

I don't have time to finish this response now. I don't want to lose any of this type so I will post it and finish reading the article later.

Well, I certainly appreciate that you actually read the link that I posted. You are certainly entitled to your opinions but I strongly advise you to refrain from making blanket statements like "this is utter bullshit" or "this is lie number one". We are talking about different ideologies and complex matters pertaining to property rights and whether or not complicated issues like pollution can be solved in the market economy or with strict property rights. Nothing in this discussion is a "lie", it is an argument between the Austrian perspective and the Chicago perspective and others.

Your previous post inferred that policing pollution was a market failure and couldn't be handled from a libertarian or austrian perspective. The assumption being that we have to have the EPA and invasive federal regulations in place to deal with problems related to air pollution and emissions. Rothbard argues a different case.

Your point about how we define property rights has merit. Assuming we want to deal with pollution from a property rights perspective, we have to define property rights in a manner that the court can determine if you have been aggressed against through air quality or physically dumping garbage on your land or whatever. But the crux of the matter is that if you agree that by a certain definition of property rights, you could police pollution effectively you have basically conceded the point and the issue of air pollution is NOT an example of a market failure.

The libertarian argument for the protection of the environment is this. Nearly all property should be privately owned. Most violations of property are easy to identify. However, if a coal plant is polluting a town's water supply, or air, a suit can and should be filed against that plant by one or more individuals in that community who can demonstrate harm done. You consider the definition of "harm" to be too vague but I disagree. For example, medical standards have been able to demonstrate that a certain amount of toxins in the air is harmful to health. If a person can demonstrate that the air where they live contains what doctors argue is an amount of toxins that could pose a serious risk to health, then they have justification for prosecuting the culprit on property rights grounds. Then the government has the role of making the polluter both reduce their emissions to levels that don't pose a risk to the accuser and justly compensating the accuser for the harm done (if any).

What argument is there that this wouldn't be a successful policy? I think that if a victim of pollution or poor air quality is identified, then a fair trial is necessary to indict the perpetrator of the pollution. If, however, the federal government comes in and imposes all manner of harsh regulations, standards and expensive restrictions on ALL businesses, the vast majority of those that have never been found to be polluting excessively or harming others through their actions, then THIS is a miscarriage of justice and the government is aggressing against business owners and potentially putting people out of business for not being able to afford the cost of added regulations and impositions on business decisions. Not only that, but when prior restraint type federal regulatory agencies start being used instead of individual cases, then the victims of pollution fail to get heard or compensated.

Another problem is that federal regulators are easily bought off. Legislation becomes corrupted through loopholes and exemptions. Permits become available for well connected industries to be able to pollute with immunity. Smaller companies cannot apply for any exemptions so it protects the biggest polluters and hurts small business. It is not a very just system.

Protecting the environment through an understanding and appreciation of property rights and equal justice under the law would do a better job and be more ethical. It wouldn't hurt businessmen who are harming no one. But it WILL compenstate the victims of pollution and shine a light on those that pollute the most. Currently, those that do the most pollution are exempt from most of these regulations and the victims of pollution have no recourse.

I think we both recognize that no system is going to be perfect. But my argument is that a greater emphasis on property rights (a bedrock of the Austrian/Libertarian tradition) would move us much closer to a system that truly protects the environment by placing the power with those that actually suffer from the pollution and preventing the rampant abuses of the peoples rights that are made legal through these Federal bureaucracies. We don't need big government and loss of liberty to protect the environment.

Nor do we need to sacrifice economic health for the environment. This is a fallacy that is perpetuated by those interested in regressive economic policies. Whether or not you agree with this sentiment or not, it is in fact true. A large portion of the "professional" environmentalist movement in the last few decades is motivated by people who espouse discredited economic ideas like Socialism and Central Economic Planning. I believe that many have reinvented themselves once Communism fell and they now couch their discredited ideas under the guise of protecting the environment. In fact, when it is pointed out that many of their economic policies are in fact damaging to prosperity and the wellbeing on many in this country and in developing countries, the excuse is that we are saving the planet and certainly no narrow minded focus on "money and economic growth" could be more important than mother earth, right? Well, the reality is that we DO have very serious environmental concerns but they arise not due to the market economy and too much prosperity, but due to a rejection of property rights and fair courts that will protect the people against the corporations, not to mention the military, that aggresses against the people through polluting their air or water.

That is another danger to nationalizing institutions like the EPA and programs like Cap and Trade. They become convenient excuses for further accumulation of power and can be easily used to pursue other agendas and curtail human liberty.

Not only is it rather suspect morally, it is not very effective either. I believe that the environment can be protected through private ownership of land and a renewed understanding of property rights, fair and just courts and a government that will prosecute those that violate the rights of American citizens that have become the victims of pollution by big industries.

jrodefeld's picture
jrodefeld
Joined:
Oct. 15, 2011 2:24 am

OK, there is a polluting plant owned by some out of towners. We get together and "sue them." We win, and then we get to enforce our victory by what? This is government you are using, and the courts do not just spring up magically because we want some laws without having legislators, etc.

Property rights and human rights all require courts and laws to have meaning in Libertarian world. Once you start back down that course, economics has to become a subset of social theory and not its determinant. To create a world of "economic rationality" may seem to be a wonderful idea, but it so reduces the soul/humanity of the thinking that it becomes a metaphysical fantasy of escape from the real world. Don't be insulted, it is what we fail to appreciate about Adam Smith and his Free Market.

It is an idealized world of the Age of Reason, not how human life works in all its complexity and beyond the rationalist reductionism. For the moral theologian dealing with human freedom and escape from the bonds of feudalism, the "free market" was akin to the "marketplace of ideas and conscience" where individuals were equal. A world where "trade" found the symbiosis of mutual interests idealized into a sustainable and balanced model of moral social 'rationality' fit well with the Calvinist notion of "this world aesceticism" and work as service to God.

Neither he nor David Ricardo would accept the crap that is sold in their name today by the Chamber of Commerce and Club for Growth. This stuff is pure labor arbitrage and resource exploitation for the profit of the few. But the point of the thread is that 'market failure' begins with the idea that markets will sort out all the moral and social issues by magic.

DRC's picture
DRC
Joined:
Jul. 31, 2007 4:01 pm

In regards to post 21. Please do not attribute text to me that I did not write. The block quote in the middle of your text was not me. Again, please learn how to use the quote commands. And no, not everything you have typed has been easy to decifer. When you use bold to offset your text one of two things happen - you either remove the bold from the post your are replying to and thus removing the emphasis and, thus, partial meaning from what they wrote OR you enfold your bold text into theirs and it is really difficult at times to figure out when things begin and end. Addtionally, I don't appreciate having to read an entire page of bolded type.

ah2
Joined:
Dec. 13, 2010 10:00 pm

jrodefeld wrote: And many progressives have come to the conclusion that the market cannot delivery medical care adequately

poly replies: Perhaps 50 million Americans without access to medical care has something to do with it...along with the 45,000 who die untreated every year.

As to "free markets" : “Economic history shows the genesis of national markets was not the consequence of the slow and spontaneous emancipation of the economic realm from state controls. Rather the market was the result of a conscious and often violent intervention by the government in society for non-economic reasons.” (p.331).

"According to Polanyi, markets already existed in antiquity. But with capitalism, society was an appendage of the market and the market was no longer part of society."

To establish a free labor market, the state in the middle of the 18th century had to remove the “right to livelihood” that the poor had through common law (p.120).

http://www.indybay.org/newsitems/2009/08/19/18616612.php

Capitalism, as we apply it, isn't a natural economic development. It was violently engineered with a lot of nonsensical rhetoric under the cloak of science to justifiy it. Most economists, as the economist Batra notes, are prostitutes.

The nonsensical rhetoric doesn't seem to be stopping its current implosion. Financial capitalism now has monetary claims on the entire productive output of the globe in exchange for producing what? Nothing.

Even national austerities to the point of starvation can't pay those claims.

The party of capitalism as currently applied is over. It's time for people to begin sobbering up.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm
Quote ah2:

In regards to post 21. Please do not attribute text to me that I did not write. The block quote in the middle of your text was not me. Again, please learn how to use the quote commands. And no, not everything you have typed has been easy to decifer. When you use bold to offset your text one of two things happen - you either remove the bold from the post your are replying to and thus removing the emphasis and, thus, partial meaning from what they wrote OR you enfold your bold text into theirs and it is really difficult at times to figure out when things begin and end. Addtionally, I don't appreciate having to read an entire page of bolded type.

jrodefeld:

You somehow attributed my quote to AH2. Please be more careful with giving credit for my shallow commentary to someone who has a far deeper grasp of the subject at hand. However, your ability to misquote does show progress with using the quote function and we may be getting closer to an actual dialogue.

I've never heard the Rand Paul is not named after Ayn Rand argument before ..... I've always assumed it to be so. If I am wrong, I stand corrected. Regardless of whatever debunking there is out there, I'd find it hard to swallow that Senator Paul was not named after Ayn (even subconsciously).

Laborisgood's picture
Laborisgood
Joined:
Jul. 31, 2007 4:01 pm
Quote jrodefeld:Well, I certainly appreciate that you actually read the link that I posted. You are certainly entitled to your opinions but I strongly advise you to refrain from making blanket statements like "this is utter bullshit" or "this is lie number one". We are talking about different ideologies and complex matters pertaining to property rights and whether or not complicated issues like pollution can be solved in the market economy or with strict property rights. Nothing in this discussion is a "lie", it is an argument between the Austrian perspective and the Chicago perspective and others.

Of course, I read the link. That is part of having an intelligent discussion. A courtesy rarely extended to me when I engage in conversations with those who hold your perspectives. Have you looked at any Proudhon, mutualism, etc.? Or any of the writers I posted above? No. Probably not.

So let me translate for you my "utter bullshit" comments. These are not the result of simply different perspectives and not differences between Austrian School and Chicago School. These are isntances where the author committed a logical fallacy and broke the rules of formal logic in his argument.

Example: Saying that the only criteria we may use to define "harm" is physical damage or threat is simply not true. He committed a logical fallacy. That isn't a difference of opinion. When he laid out the idea that there are multiple interpretations of justice and then said (and I am paraphrasing) "our version counts but the Chicago school is not a version of justice." That is not a difference of opinion but an internal contradiction within his argument.

If he had submitted this paper as an assignment in a class on logical argument, he would have failed. There is difference between having differring opinions and making false or illogical statements.

Your previous post inferred that policing pollution was a market failure and couldn't be handled from a libertarian or austrian perspective. The assumption being that we have to have the EPA and invasive federal regulations in place to deal with problems related to air pollution and emissions. Rothbard argues a different case.

Sure he has a different perspective but it is based on at least two logical fallacies. Unless he can resolve these and still make his argument convincing, his theory is invalid.

Your point about how we define property rights has merit. Assuming we want to deal with pollution from a property rights perspective, we have to define property rights in a manner that the court can determine if you have been aggressed against through air quality or physically dumping garbage on your land or whatever. But the crux of the matter is that if you agree that by a certain definition of property rights, you could police pollution effectively you have basically conceded the point and the issue of air pollution is NOT an example of a market failure.

No. I do not agree. You are missing the point. I will explain further in a moment.

The libertarian argument for the protection of the environment is this. Nearly all property should be privately owned. Most violations of property are easy to identify. However, if a coal plant is polluting a town's water supply, or air, a suit can and should be filed against that plant by one or more individuals in that community who can demonstrate harm done. You consider the definition of "harm" to be too vague but I disagree. For example, medical standards have been able to demonstrate that a certain amount of toxins in the air is harmful to health. If a person can demonstrate that the air where they live contains what doctors argue is an amount of toxins that could pose a serious risk to health, then they have justification for prosecuting the culprit on property rights grounds. Then the government has the role of making the polluter both reduce their emissions to levels that don't pose a risk to the accuser and justly compensating the accuser for the harm done (if any).

You cannot own an air particle or a water molecule. It is transient. You can mark out a portion of a river that you "own" but the water within that river is not "yours" because it is flowing down stream. The same with air. The same with water in a water table. You CANNOT assign property rights to things that have these particular physical properties.

What argument is there that this wouldn't be a successful policy? I think that if a victim of pollution or poor air quality is identified, then a fair trial is necessary to indict the perpetrator of the pollution. If, however, the federal government comes in and imposes all manner of harsh regulations, standards and expensive restrictions on ALL businesses, the vast majority of those that have never been found to be polluting excessively or harming others through their actions, then THIS is a miscarriage of justice and the government is aggressing against business owners and potentially putting people out of business for not being able to afford the cost of added regulations and impositions on business decisions. Not only that, but when prior restraint type federal regulatory agencies start being used instead of individual cases, then the victims of pollution fail to get heard or compensated.

I am not finished reading his argument yet but the primary issue can be found within his "strict causality" standard. He writes:

"What the plaintiff must prove, then, beyond a reasonable doubt is a strict causal connection between the defendant and his aggression against the plaintiff. He must prove, in short, that A actually "caused" an invasion of the person or property of B."

He actually points out the problem in this section in his quote of Milton Katz:

"Suppose the plaintiff should claim serious damage: for emphysema, perhaps, or for lung cancer, bronchitis or some other comparably serious injury to his lungs. He would face a problem of proof of causation…. Medical diagnoses appear to have established that sulphur dioxide and other air pollutants often play a significant role in the etiology of emphysema and other forms of lung damage. But they are by no means the only possible causative factors. Emphysema and lung cancer are complex illnesses which may originate in a variety of causes, for example, cigarette smoking, to name one familiar example. If and when the plaintiff should succeed in establishing that the defendants' conduct polluted the air of his home, it would not follow that the pollution caused his illness. The plaintiff would still have to meet the separate burden of proving the etiology of his lung damage."

So, this came up when the 9-11 first responders were seeking some form of health coverage from the government since their work plans were not covering it. The US government responded that they would cover everything EXCEPT cancer even though that was the primary thing most of the responders needed help with. Why? The government claimed that there are various contributing factors to cancer and it was impossible to prove that each individuals cancer came from the exposure to elements at 9-11 and not from somewhere else in their environment.

Another problem is that federal regulators are easily bought off. Legislation becomes corrupted through loopholes and exemptions. Permits become available for well connected industries to be able to pollute with immunity. Smaller companies cannot apply for any exemptions so it protects the biggest polluters and hurts small business. It is not a very just system.

The problem here is the corruption and the way we formulate our government in relation to money not the policy mechanism. If our election laws were better organized and enforced, this would not be an issue. You are also commiting the same logical fallacy as the writer - "all or nothing." It is possible to put in stipulations within the regulations that dictate that they only apply to businesses of a certain type or size. If this is done with the public interest in mind rather than exemptions being used to play favorites, then there is no problem. It is also not just to let all companies do whatever they want even though it harms millions of people simply because you don't want to chance stifling small business. Sorry. That argument does not hold water.

Protecting the environment through an understanding and appreciation of property rights and equal justice under the law would do a better job and be more ethical. It wouldn't hurt businessmen who are harming no one. But it WILL compenstate the victims of pollution and shine a light on those that pollute the most. Currently, those that do the most pollution are exempt from most of these regulations and the victims of pollution have no recourse.

This is the part that you get in all arguments constructed by libertarians where they start using big words like "equal justice under the law" after they have loaded these terms with very specific meanings that leverage their own political interests. And this is after they have committed several logical transgressions in their arguments in defining those words. "Equal justice" has a very specific Constitutional meaning and it is not the one you are imbuing it with here. I also think that your claim that those who do the most pollution are exampt from the regulations is not supported by any evidence. Certainly, you did not supply any. I do agree, however, that the regulations do not go far enough and that our laws regarding "limited liability" are too lenient. The fact that BP was limited to what was it? $100,000 or something of damage for the gulf oil spill was simply ridiculous. In my opinion, the laws should be written so that the companies assume all financial burden for their actions and that the money doesn't just go into a black bag in the government fee structure but are used to provide restitution.

I think we both recognize that no system is going to be perfect. But my argument is that a greater emphasis on property rights (a bedrock of the Austrian/Libertarian tradition) would move us much closer to a system that truly protects the environment by placing the power with those that actually suffer from the pollution and preventing the rampant abuses of the peoples rights that are made legal through these Federal bureaucracies. We don't need big government and loss of liberty to protect the environment.

Again, you cannot assign property rights to an air particle.

Nor do we need to sacrifice economic health for the environment. This is a fallacy that is perpetuated by those interested in regressive economic policies. Whether or not you agree with this sentiment or not, it is in fact true. A large portion of the "professional" environmentalist movement in the last few decades is motivated by people who espouse discredited economic ideas like Socialism and Central Economic Planning. I believe that many have reinvented themselves once Communism fell and they now couch their discredited ideas under the guise of protecting the environment. In fact, when it is pointed out that many of their economic policies are in fact damaging to prosperity and the wellbeing on many in this country and in developing countries, the excuse is that we are saving the planet and certainly no narrow minded focus on "money and economic growth" could be more important than mother earth, right? Well, the reality is that we DO have very serious environmental concerns but they arise not due to the market economy and too much prosperity, but due to a rejection of property rights and fair courts that will protect the people against the corporations, not to mention the military, that aggresses against the people through polluting their air or water.

That is another danger to nationalizing institutions like the EPA and programs like Cap and Trade. They become convenient excuses for further accumulation of power and can be easily used to pursue other agendas and curtail human liberty.

Not only is it rather suspect morally, it is not very effective either. I believe that the environment can be protected through private ownership of land and a renewed understanding of property rights, fair and just courts and a government that will prosecute those that violate the rights of American citizens that have become the victims of pollution by big industries.

blah blah blah blah. yeah they are all hippie socialists. hungry for power and if you let them the EPA is going to tell you where and how much you can poop. Please.... grow up.

I will address the rest of the article in a different post so as to not confuse it with my comments toward you. And I have run out of time and will have to do that this evening or maybe over the long weekend.

ah2
Joined:
Dec. 13, 2010 10:00 pm

RE-QUOTED from above: "But my argument is that a greater emphasis on property rights (a bedrock of the Austrian/Libertarian tradition) would move us much closer to a system that truly protects the environment "

poly replies: Well, historically, the greatest protections of the environment were when the land and its resources were held in common...and private property was limited to what was in one's dwelling or adjacent to it.

Probably an examination of the history of the American Continent is in order if you're really concerned about avoiding an environmental collapse that seems to be rushing upon us..

The Austrian/libertarian tradition includes the "freedom" (guaranteed by a deed) to destroy, plunder and move on to repeat the performance elsewhere. We see the consequences of that sort of thing all the time, don't we? Killing off of the Everglades is nearly a done deal.

The last remaining Prairie Dog town in the Denver area is becoming an auto dealership. Bellview and Wadsworth. We definately need more auto dealers and fewer near-extinct prairie dogs and fewer co-habitants of their eco-system.

. Destruction of the environment one block at a time is still destruction, isn't it...under the Austrian/libertarian tradition..

Retired Monk - "Ideology is a disease".

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Currently Chatting

Why the Web of Life is Dying...

Could you survive with just half of your organs? Think about it. What if you had just half your brain, one kidney, half of your heart, one lung, half a liver and only half of your skin? It would be pretty hard to survive right? Sure, you could survive losing just one kidney or half of your liver, but at some point, losing pieces from all of your organs would be too much and you would die.

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