Buffett: Raise Taxes on ‘Coddled’ Billionaires

[Surlethe]

First point: obviously people economize when faced by high prices. I don't see why that's a particular weakness of the market system.

Stas seems to be making the same point I made earlier about consumer surplus.

Really? It seems like a very odd way of making that argument, especially since the implication seems to be that economizing resources is somehow a problem in and of itself and that it is somehow limited to markets.

I'm just skimming, but reading the examples he's using (people being "priced out" of a market and starving, e.g.) and the claim that markets sometimes misallocate resources, whereas a monopolistic or oligopolistic market might allocate more efficiently, it sounds like at least part of his argument is a rephrase of mine.

[K. A. Pital]

Stas, you ignored the point I raised again. Again: if you maximize production for any given level of input resources, that affects the amount of resources that are available to distribution. Thus the systems are not morally equivalent even if you equate shortages with people who don't buy a product. There is a way of distinguishing their relative merits.

Why? Production is not maximized for a "given level of input resources", production is optimized whereas profit is maximized. Maximization of production is the realm of general efficiency, which has nothing do with what I'm talking about. An inefficient production or inefficient distribution might be more profitable for certain economic agent(s). And I only explicitly equate shortages with people unable to buy a product, but willing, not with all people who "don't buy". You wouldn't argue that someone who can't afford food would nonetheless desire to have it very strongly and in fact, need to have it?

Because it is bullshit. Whether economies of scale favour oligopoly or competitive markets is dependent on the microeconomic nature of the production in question. It is simply false to say that oligopolies are always more effective or that competitive markets inevitably evolve into them.

As a matter of theory, sure. As a matter of practice, oligopolies seem to arise when the market is sufficiently developed. Which is once again my point - no matter how much you want something not to be, if in reality it happens ever so often, it might not be "inevitable", but strongly probable. Which is the next best thing we have. Please explain to me how "microeconomic nature of the production" can impact the concentration of capital and make economies of scale irrelevant so as to create a situation where the market agents remain small, perfectly competitive and thus void of oligopolistic power.

We really need a facepalm smiley for this forum. Didn't I just point out the difference between regulations that foster competition and ones that foster corruption? And then you say something like this?

I said that imperfect markets dominate reality, whereas perfect markets do not exist. And since perfect markets are counter to the interest of oligopolistic agents, I see no reason why or how anyone could bring about a perfect market.

Please quit using the term "economic efficiency" that way, that's not the correct usage of the term. And you again ignore the point: even if you assert that there is moral equivalence between shortages and non-buyers, then you are left with other means of evaluating the relative merit of economic systems - such as level of production for a given level of input resources. Though I find it interesting that you choose to select the NHS as an example after I explicitly said earlier that I am pro-welfare.

I carelessly used "efficiency" when talking about profitability of transactions, shouldn't have done so. I am not talking about the productive efficiency or general economic efficiency. I am talking only about maximizing someone's profit with maximally profitable transactions, self-interest and profitability for the company itself.

I chose the NHS as an example because we were talking about healthcare in this thread. I constructed a really simple single-good model where a putative NHS has shortage of treatments (and thus "waiting lines" and untreated people) and a private healthcare market having the same number of people going untreated - this is more closely related to the point raised. So both the NHS and the private market offer equal number of treatments, but in one case the price regulates how many people don't get it, in the other case simple deficit. There is no moral difference. You might argue that equal access in the NHS system means that people who "can pay" are not rewarded with greater access to healthcare than those who wouldn't be able to pay in the alternative market version of the same, but that's another point alltogether. It is the question of whether those who can pay and have effective demand are inherently more worthy to get that good over other agents who can't pay - in a moral sense. It does not even touch upon productive efficiency.

That is why we demand a competitive market. And incidentally, this so-called "economic coercion" as you call it is not comparable to coercion by force. Obviously all economic systems exist to encourage people to work.

Economic coercion can use different mechanisms, but it can be as potent as coercion by force. I see no difference if the end result is the same. Demanding a competitive market is demanding larger agents like megacorporations and governments to act against their own interest, which you call "special interest" - corporations, at the very least, are not even obliged to act in the interest of society and not in their "special" interest. You're pretty much banging against the wall, if you ask me.

There is a difference between government and agents in the economy. This point you raise is meaningless. BTW, I didn't raise labour camps except as a comparative example of absurd statement.

In this case I think there'll be no problem if we refrain from absurd statements. The difference that you make between the government and other agents in the economy is well taken; however, I still see no reason to ignore the fact that companies and governments will not go against their special interests if said interests provide good benefits - greater profits for companies and for governments, perhaps, a chance of sustaining the power structure and a chance of reelection. Your system requires economic agents - the most powerful ones, I might add - to act against their self-interest and not corrupt the government or wilfully subdue to government regulations that are counterbeneficial to them. That's crazy from the point of view of the company, which only cares for personal profit and not general economic efficiency or even maximization of social welfare.

[Simon_Jester]

As a matter of theory, sure. As a matter of practice, oligopolies seem to arise when the market is sufficiently developed. Which is once again my point - no matter how much you want something not to be, if in reality it happens ever so often, it might not be "inevitable", but strongly probable. Which is the next best thing we have. Please explain to me how "microeconomic nature of the production" can impact the concentration of capital and make economies of scale irrelevant so as to create a situation where the market agents remain small, perfectly competitive and thus void of oligopolistic power.

It all depends on how important economies of scale are. In some industries they're everything- telecommunications comes to mind, because a networked communication service is vastly more useful if the network is large; oligopolies and local monopolies are practically the only way to make it work at all, so far as I know.

In others they're relatively less important and you do see small businesses surviving and thriving- restaurants come to mind, because there are many niches, not all of them can easily be displaced by a franchise corporation, and the minimum atomistic "unit" of productive capital is a relatively small facility compared to something like a steel mill or a national communication network.

But the effects are finite- true monopoly is very difficult to achieve in most industries, because at a certain point the economies of scale give diminishing returns, or it becomes impractical to chase competitors out of their niches. While true perfect-competition is even more difficult to achieve, because it can only happen where economies of scale are negligible, which is so rarely true.

[K. A. Pital]

In others they're relatively less important and you do see small businesses surviving and thriving- restaurants come to mind

Break them down by price instead of lumping together, and you'll see that the fast food market is utterly dominated by scant few companies. More pricey restaurants are a luxury consumption thing anyway. Aren't McDonalds and Burger King having respective fast food market share at like McD having 50% of the market and Burger King at 20+ percent, which is just two companies having effectively 70% of the market covered, perhaps even leading to the description of the FF market as a simple duopoly? Add KFC and I think you'll have 80-90% of the market between the three.

Microeconomic production processes at McDonalds or Burger are identical to other, smaller fast food chains - cheap restaurants are small units of production. However, they are owned in a centralized fashion. Just like a kiosk might be a small trade outlet, but you might run into the fact that most kiosks are owned by large companies. Ownership does not impact the scale of the individual production unit itself.

More individual restaurants which specialize in a certain cuisine do thrive, but even there a process of rapid oligopolization occurs. A few years ago Chinese restaurants were individual ventures in Russia. Today there are huge networks like FastWok and Wokker, which make Chinese cuisine and quite probably hold over 50% of the Chinese cuisine market. Oligopolization happens when a market gets sufficiently developed.

Of course, luxury consumption that is out of the reach of the ordinary worker will always remain "specialized" and may even thrive, like luxury restaurants do.

[Lord Zentei]

Stas, you ignored the point I raised again. Again: if you maximize production for any given level of input resources, that affects the amount of resources that are available to distribution. Thus the systems are not morally equivalent even if you equate shortages with people who don't buy a product. There is a way of distinguishing their relative merits.

Why? Production is not maximized for a "given level of input resources", production is optimized whereas profit is maximized. Maximization of production is the realm of general efficiency, which has nothing do with what I'm talking about. An inefficient production or inefficient distribution might be more profitable for certain economic agent(s). And I only explicitly equate shortages with people unable to buy a product, but willing, not with all people who "don't buy". You wouldn't argue that someone who can't afford food would nonetheless desire to have it very strongly and in fact, need to have it?

When it comes to buying something, willingness is a function of price, just as ability is. For instance, you might not be "willing" to buy a 6000 square foot home, but might change your mind if it only cost a dollar. Moreover, market economies maximize the production of a given good for a given level of input as a consequence of competing agents seeking to maximize their respective profit. That's the emergent property of market economies that makes them so powerful. I thought this was well known.

Because it is bullshit. Whether economies of scale favour oligopoly or competitive markets is dependent on the microeconomic nature of the production in question. It is simply false to say that oligopolies are always more effective or that competitive markets inevitably evolve into them.

As a matter of theory, sure. As a matter of practice, oligopolies seem to arise when the market is sufficiently developed. Which is once again my point - no matter how much you want something not to be, if in reality it happens ever so often, it might not be "inevitable", but strongly probable. Which is the next best thing we have. Please explain to me how "microeconomic nature of the production" can impact the concentration of capital and make economies of scale irrelevant so as to create a situation where the market agents remain small, perfectly competitive and thus void of oligopolistic power.

Appealing to reality and saying that I only want to believe something? Come on.

The microeconomic nature of the production involves the Average Total Cost of producing a given product, and if the ATC curve does not rise to high values at the lower end of the Supply-Demand graph, then oligopoly is NOT favoured. If it does, then oligopoly IS favoured.

We really need a facepalm smiley for this forum. Didn't I just point out the difference between regulations that foster competition and ones that foster corruption? And then you say something like this?

I said that imperfect markets dominate reality, whereas perfect markets do not exist. And since perfect markets are counter to the interest of oligopolistic agents, I see no reason why or how anyone could bring about a perfect market.

No one is demanding a "perfect" market. It's enough to have a minimum of favouritism in regulations, even if you have an oligopoly. As for how - if regulations favour a given sector of the economy, they prosper, but the losses of the others exceed the gains of the winners, by basic economic theory.

Incidentally, I'd love to see how you mean to avoid these kinds of things in a command economy, if you think concentration of power is the problem!

Please quit using the term "economic efficiency" that way, that's not the correct usage of the term. And you again ignore the point: even if you assert that there is moral equivalence between shortages and non-buyers, then you are left with other means of evaluating the relative merit of economic systems - such as level of production for a given level of input resources. Though I find it interesting that you choose to select the NHS as an example after I explicitly said earlier that I am pro-welfare.

I carelessly used "efficiency" when talking about profitability of transactions, shouldn't have done so. I am not talking about the productive efficiency or general economic efficiency. I am talking only about maximizing someone's profit with maximally profitable transactions, self-interest and profitability for the company itself.

I chose the NHS as an example because we were talking about healthcare in this thread. I constructed a really simple single-good model where a putative NHS has shortage of treatments (and thus "waiting lines" and untreated people) and a private healthcare market having the same number of people going untreated - this is more closely related to the point raised. So both the NHS and the private market offer equal number of treatments, but in one case the price regulates how many people don't get it, in the other case simple deficit. There is no moral difference. You might argue that equal access in the NHS system means that people who "can pay" are not rewarded with greater access to healthcare than those who wouldn't be able to pay in the alternative market version of the same, but that's another point alltogether. It is the question of whether those who can pay and have effective demand are inherently more worthy to get that good over other agents who can't pay - in a moral sense. It does not even touch upon productive efficiency.

In a moral sense, you seem to be assuming that all patients are equivalent. But in the market system, there are marginal actors who technically can pay but choose not to if they believe that the price is too high, and because the treatment is less essential to them than other products they might acquire for the same money. This condition arises even if they are selfish. In contrast, the command economy has arbitrary conditions for selecting patients. To be sure, in a command economy, the NHS can be required to choose patients based on some medical criteria, but that needs to be enforced - and if you acknowledge that such enforcement is possible, then you can enforce the same criteria on a market economy. If the NHS is selfish, it doesn't care whose money it receives.

My point with the maximization was that even if we allow for the fact that you're right, then as far as shortages vs discouraged customers are concerned, the two systems are equal, and we need to point out other moral justifications for preferring one system over the other. Hence, see previous points I raised on the topic.

That is why we demand a competitive market. And incidentally, this so-called "economic coercion" as you call it is not comparable to coercion by force. Obviously all economic systems exist to encourage people to work.

Economic coercion can use different mechanisms, but it can be as potent as coercion by force. I see no difference if the end result is the same. Demanding a competitive market is demanding larger agents like megacorporations and governments to act against their own interest, which you call "special interest" - corporations, at the very least, are not even obliged to act in the interest of society and not in their "special" interest. You're pretty much banging against the wall, if you ask me.

Economic "coercion" does not include the need for work. If a person chooses autarchy, then he is not being coerced, but he still needs to work (presumably on his farm) in order to survive. It's a natural reality that people need to work, that has nothing to do with "coercion". On the second point, it may be in the interest of a corporation to not permit competition, but it is also in the interest of rival industries to break up its power.

There is a difference between government and agents in the economy. This point you raise is meaningless. BTW, I didn't raise labour camps except as a comparative example of absurd statement.

In this case I think there'll be no problem if we refrain from absurd statements. The difference that you make between the government and other agents in the economy is well taken; however, I still see no reason to ignore the fact that companies and governments will not go against their special interests if said interests provide good benefits - greater profits for companies and for governments, perhaps, a chance of sustaining the power structure and a chance of reelection. Your system requires economic agents - the most powerful ones, I might add - to act against their self-interest and not corrupt the government or wilfully subdue to government regulations that are counterbeneficial to them. That's crazy from the point of view of the company, which only cares for personal profit and not general economic efficiency or even maximization of social welfare.

If governments seek to gain profit too, then command economies will work no better than a monopolistic corporation. But governments are not supposed to work for profit, and if you allow for that, then you can accept that they can mediate between for-profit actors in any case. These for profit actors can then maximize production, as is their function. But for government to be both mediator AND producer invites conflict of interest - which can arise in market economies, given corruption, but which INEVITABLY arises in a command economy, since the same agency is responsible for both mediation and production.

[K. A. Pital]

When it comes to buying something, willingness is a function of price, just as ability is. For instance, you might not be "willing" to buy a 6000 square foot home, but might change your mind if it only cost a dollar. Moreover, market economies maximize the production of a given good for a given level of input as a consequence of competing agents seeking to maximize their respective profit. That's the emergent property of market economies that makes them so powerful. I thought this was well known

Yeah, I understand this. However, food f.e. is a biological need. You need ca. 1800 calories per day (also of a varied composition, to boot) not to experience malnourishment. It is absolutely independent of price. You wouldn't "change your mind" about eating even if eating costed more than you could pay. This is why I said classical economics is faulty - it treats everything, even bare biological necessities, as ordinary tradeable goods subject to all and any peculiarities of trade (e.g. outpricing and hoarding, negative feedback loops at their worst).

Appealing to reality and saying that I only want to believe something? Come on. The microeconomic nature of the production involves the Average Total Cost of producing a given product, and if the ATC curve does not rise to high values at the lower end of the Supply-Demand graph, then oligopoly is NOT favoured. If it does, then oligopoly IS favoured.

You're not opening eyes here. I am saying that as a practical matter the position on the LRAC curve is usually constrained by the size of the production unit, but ownership is rarely constrained by the rising portion of the LRAC where diseconomies of scale occur. Most real-world markets and LRAC curves favor oligopoly which is observed in practice, that is what I put forward as a thesis. You want to challenge it? Do so, why not. Show me that there are markets where the LRAC curve prevents consolidation of ownership and thus formation of the oligopoly. As for "why LRAC" - pretty obvious. Only the long term matters. If a static state of near-perfect competition follows to an oligopoly in the long run, the example of a shapshot current state of the market would not be acceptable.

No one is demanding a "perfect" market. It's enough to have a minimum of favouritism in regulations, even if you have an oligopoly. As for how - if regulations favour a given sector of the economy, they prosper, but the losses of the others exceed the gains of the winners, by basic economic theory. Incidentally, I'd love to see how you mean to avoid these kinds of things in a command economy, if you think concentration of power is the problem!

Now you're understanding the roots of my hate. The iron law of oligarchy quickly corrupts any centralized system, command economies are corrupted in an extremely short order just like large corporations (i rememeber Starglider actually agreed with me on that, heh). That is a huge obstacle which you have to overcome using methods that probably require years of scientific development. That is a bit more than just voting for the resident left/right party at the new elections, however comfortable that might be as a thought.

In a moral sense, you seem to be assuming that all patients are equivalent.

Humanism.

But in the market system, there are marginal actors who technically can pay but choose not to if they believe that the price is too high, and because the treatment is less essential to them than other products they might acquire for the same money. This condition arises even if they are selfish. In contrast, the command economy has arbitrary conditions for selecting patients. To be sure, in a command economy, the NHS can be required to choose patients based on some medical criteria, but that needs to be enforced - and if you acknowledge that such enforcement is possible, then you can enforce the same criteria on a market economy. If the NHS is selfish, it doesn't care whose money it receives. My point with the maximization was that even if we allow for the fact that you're right, then as far as shortages vs discouraged customers are concerned, the two systems are equal, and we need to point out other moral justifications for preferring one system over the other. Hence, see previous points I raised on the topic.

Eh, I see. You pointed to increased waste in the sector that can arise as a result. However, I pointed out that increased waste is the price for a humanistic approach instead of a non-humanistic one where people get as much as they can pay for.

Economic "coercion" does not include the need for work. If a person chooses autarchy, then he is not being coerced, but he still needs to work (presumably on his farm) in order to survive. It's a natural reality that people need to work, that has nothing to do with "coercion". On the second point, it may be in the interest of a corporation to not permit competition, but it is also in the interest of rival industries to break up its power.

Coercion is actually pretty much the order of the day. Arable land is scarce and privatized (and thus costs money) in many nations. If a person has nothing but his own body and skill to sell, he has virtually zero damage absorption capacity compared to the company. For him, being fired can mean starvation. For the company, it means some loss, but certainly not the starvation of any of the decision makers who fired or never hired that person.

The need for work is actually coercion - hence why unemployment benefits are a big issue in First World nations. Considering the small damage absorption capacity of the worker, he can be forced by his employer to work more or work harder under threat of being fired. The company's losses are much less critical than the workers. This is called unequal leverage, and deals concluded with unequal leverage are bullshit deals.

To make the example of economic coercion even more clear, we can consider Philip Morris and a small tobacco plant in Bumfuck. Morris wants to buy the Bumfuck plant, which produces cigarettes at the same price. Morris sets a price for the company, which doesn't really feel well with the Bumfuck shareholders. They would want to say "no", but they realize that Morris can start dumping the prices due to a greater damage absorption capacity. Morris can actually give them a slight hint that it can do so and then the Bumfuck plant will simply go bankrupt, after which its price would fall greatly and Morris will get what it wants. Economic coercion does not require any administrative or non-economic action to occur.

If governments seek to gain profit too, then command economies will work no better than a monopolistic corporation. But governments are not supposed to work for profit, and if you allow for that, then you can accept that they can mediate between for-profit actors in any case. These for profit actors can then maximize production, as is their function. But for government to be both mediator AND producer invites conflict of interest - which can arise in market economies, given corruption, but which INEVITABLY arises in a command economy, since the same agency is responsible for both mediation and production.

Corruption inevitably arises in any centralized economy due to iron law of oligarchy. Even very small systems are subject to this law, where the leaders seek to get free from the control of their underlings - be it represented in the prices, in the "voting" or in something else. I never said that I'm supporting a conversion to a command economy, only that with equivalent results by number of people treated, the NHS "command economy" will be more obviously displaying the deficit, whereas the market economy will not stuff people who can't afford healthcare in front of people once they go to hospitals. So you never see the uninsured, you don't understand that if they had a greater buying power, a deficit could quickly arise in the system and you would no longer be able to get these services ahead of the people you never even see.

Free dental service, USA:

Dental service for a price:

The second one looks nicer, ain't it.

[Lord Zentei]

When it comes to buying something, willingness is a function of price, just as ability is. For instance, you might not be "willing" to buy a 6000 square foot home, but might change your mind if it only cost a dollar. Moreover, market economies maximize the production of a given good for a given level of input as a consequence of competing agents seeking to maximize their respective profit. That's the emergent property of market economies that makes them so powerful. I thought this was well known

Yeah, I understand this. However, food f.e. is a biological need. You need ca. 1800 calories per day (also of a varied composition, to boot) not to experience malnourishment. It is absolutely independent of price. You wouldn't "change your mind" about eating even if eating costed more than you could pay. This is why I said classical economics is faulty - it treats everything, even bare biological necessities, as ordinary tradeable goods subject to all and any peculiarities of trade (e.g. outpricing and hoarding, negative feedback loops at their worst).

That is only a relevant issue when dealing with communities which have absolutely hit rock bottom. Moreover, even then it's not a given that a command economy would be more effective than a market. Regardless, I believe I've already pointed out that I'm pro-welfare, so citing a desperate situation like that as a counterpoint to my position seems somewhat strange to me.

Appealing to reality and saying that I only want to believe something? Come on. The microeconomic nature of the production involves the Average Total Cost of producing a given product, and if the ATC curve does not rise to high values at the lower end of the Supply-Demand graph, then oligopoly is NOT favoured. If it does, then oligopoly IS favoured.

You're not opening eyes here. I am saying that as a practical matter the position on the LRAC curve is usually constrained by the size of the production unit, but ownership is rarely constrained by the rising portion of the LRAC where diseconomies of scale occur. Most real-world markets and LRAC curves favor oligopoly which is observed in practice, that is what I put forward as a thesis. You want to challenge it? Do so, why not. Show me that there are markets where the LRAC curve prevents consolidation of ownership and thus formation of the oligopoly. As for "why LRAC" - pretty obvious. Only the long term matters. If a static state of near-perfect competition follows to an oligopoly in the long run, the example of a shapshot current state of the market would not be acceptable.

If the real world favors oligopolies, then they ARE constrained by diseconomies of scale due to the LRAC. Unconstrained markets of that type would lead to natural monopoly, not oligarchy. And you get around to diminishing that effect with internationalism through trade, enlarging the market and increasing it beyond point where the LRAC rises.

No one is demanding a "perfect" market. It's enough to have a minimum of favouritism in regulations, even if you have an oligopoly. As for how - if regulations favour a given sector of the economy, they prosper, but the losses of the others exceed the gains of the winners, by basic economic theory. Incidentally, I'd love to see how you mean to avoid these kinds of things in a command economy, if you think concentration of power is the problem!

Now you're understanding the roots of my hate. The iron law of oligarchy quickly corrupts any centralized system, command economies are corrupted in an extremely short order just like large corporations (i rememeber Starglider actually agreed with me on that, heh). That is a huge obstacle which you have to overcome using methods that probably require years of scientific development. That is a bit more than just voting for the resident left/right party at the new elections, however comfortable that might be as a thought.

Wait, what? Weren't you advocating a command economy earlier? I was arguing on the assumption that that would be your preferred system.

In a moral sense, you seem to be assuming that all patients are equivalent.

Humanism.

Only relevant in absence of more information about individuals involved. Given such a situation, one system cannot be preferred over another given the criteria you present. But markets don't care who pays, and if humanism doesn't care which patients receive limited services, then what are you arguing for? If you cannot formulate a humanistic criterion that says that "these 30 patients out of the 50 who want service are the ones who should receive service, since we have limited resources", then how can you criticize the market for "outpricing" anyone with the same result?

But in the market system, there are marginal actors who technically can pay but choose not to if they believe that the price is too high, and because the treatment is less essential to them than other products they might acquire for the same money. This condition arises even if they are selfish. In contrast, the command economy has arbitrary conditions for selecting patients. To be sure, in a command economy, the NHS can be required to choose patients based on some medical criteria, but that needs to be enforced - and if you acknowledge that such enforcement is possible, then you can enforce the same criteria on a market economy. If the NHS is selfish, it doesn't care whose money it receives. My point with the maximization was that even if we allow for the fact that you're right, then as far as shortages vs discouraged customers are concerned, the two systems are equal, and we need to point out other moral justifications for preferring one system over the other. Hence, see previous points I raised on the topic.

Eh, I see. You pointed to increased waste in the sector that can arise as a result. However, I pointed out that increased waste is the price for a humanistic approach instead of a non-humanistic one where people get as much as they can pay for.

You get that anyway, given shortages and waiting lines. And ignoring waste in other sectors of the economy that arises as a result of a more humanistic disribution (if such a thing can be implemented) is not terribly moral.

Economic "coercion" does not include the need for work. If a person chooses autarchy, then he is not being coerced, but he still needs to work (presumably on his farm) in order to survive. It's a natural reality that people need to work, that has nothing to do with "coercion". On the second point, it may be in the interest of a corporation to not permit competition, but it is also in the interest of rival industries to break up its power.

Coercion is actually pretty much the order of the day. Arable land is scarce and privatized (and thus costs money) in many nations. If a person has nothing but his own body and skill to sell, he has virtually zero damage absorption capacity compared to the company. For him, being fired can mean starvation. For the company, it means some loss, but certainly not the starvation of any of the decision makers who fired or never hired that person.

The need for work is actually coercion - hence why unemployment benefits are a big issue in First World nations. Considering the small damage absorption capacity of the worker, he can be forced by his employer to work more or work harder under threat of being fired. The company's losses are much less critical than the workers. This is called unequal leverage, and deals concluded with unequal leverage are bullshit deals.

I was speaking in theoretical terms. You cannot say that an autarchic person who lives on a plot of land is being "coerced" by anyone, just because he has to work. If you cannot justify the idea that all need for work is "coercion", then you don't have an argument on this point. Having to work is the nature of reality. It's not "coercion" at all - especially if you're free to choose the nature of your work (which doesn't happen in command economies, but which can happen in market economies). Being fired sucks, but a worker is also free to quit.

To make the example of economic coercion even more clear, we can consider Philip Morris and a small tobacco plant in Bumfuck. Morris wants to buy the Bumfuck plant, which produces cigarettes at the same price. Morris sets a price for the company, which doesn't really feel well with the Bumfuck shareholders. They would want to say "no", but they realize that Morris can start dumping the prices due to a greater damage absorption capacity. Morris can actually give them a slight hint that it can do so and then the Bumfuck plant will simply go bankrupt, after which its price would fall greatly and Morris will get what it wants. Economic coercion does not require any administrative or non-economic action to occur.

Dumping the prices also hurts the one doing so, at least short term. And what you describe is competition, not "coercion". It seems to me that you're broadening the use of the term "coercion" to become almost meaningless and thus to allow comparison between a command economy and a free society. Not cool, man.

But now you said earlier that command economies become corrupt in very short order, so what system exactly are you favoring here?

If governments seek to gain profit too, then command economies will work no better than a monopolistic corporation. But governments are not supposed to work for profit, and if you allow for that, then you can accept that they can mediate between for-profit actors in any case. These for profit actors can then maximize production, as is their function. But for government to be both mediator AND producer invites conflict of interest - which can arise in market economies, given corruption, but which INEVITABLY arises in a command economy, since the same agency is responsible for both mediation and production.

Corruption inevitably arises in any centralized economy due to iron law of oligarchy. Even very small systems are subject to this law, where the leaders seek to get free from the control of their underlings - be it represented in the prices, in the "voting" or in something else. I never said that I'm supporting a conversion to a command economy, only that with equivalent results by number of people treated, the NHS "command economy" will be more obviously displaying the deficit, whereas the market economy will not stuff people who can't afford healthcare in front of people once they go to hospitals. So you never see the uninsured, you don't understand that if they had a greater buying power, a deficit could quickly arise in the system and you would no longer be able to get these services ahead of the people you never even see.

Free dental service, USA:
http://www.ajc.com/multimedia/dynamic/0 ... 71541c.jpg
Dental service for a price:
http://www.sandiegonorthendodontics.com ... t-view.jpg
The second one looks nicer, ain't it.

So more people want free stuff than stuff they have to pay for? And when there are suddenly more consumers than the system can handle, there are waiting lines (especially when they have reason to believe that the free service is short term only)? Not much of a revelation!

But if you claim that the "iron law of the oligarchy" somehow always causes corruption, then why do you question my assertion that there is a need for greater competition?

[K. A. Pital]

But if you claim that the "iron law of the oligarchy" somehow always causes corruption, then why do you question my assertion that there is a need for greater competition?

Because humanism does not apriori distinguish between individuals. Each human life is worth the same. Which is why the outcome where everyone has equal access to a service is preferrable to a non-equal access situation, if the service in question is not a luxury. That is my position and it was and remains always consistent. It is better to give everyone access to education and make them fail or win based on their brains alone than based on their money. Same with healthcare, except the criteria will have to be strictly medical. Not financial.

And what you describe is competition, not "coercion". It seems to me that you're broadening the use of the term "coercion" to become almost meaningless and thus to allow comparison between a command economy and a free society. Not cool, man.

So when I go to the Bumfuck factory and tell them to sell it to me for 30 grand or else I'll run them into the fucking ground, bankrupt their business and then scoop up the remains, I'm not coercing them to sell? I'm not using administrative leverage, sure, mere economic leverage. But to say that I'm not coercing them to sell would be preposterous. If they had equal damage absorption capacity as my Philip Morris, they might not cave in and insist that their plant(s) is worth much more than I'm desiring to pay them. Which means that competition is permanent coercion of the weaker by the stronger, and on conditions unfavorable for the weaker.

I'm not broadening the term. Non-economic coercion (administrative barriers and government leverage) is one type of coercion. Forcing people to do your bidding by purely economic pressure is another type of coercion which requires none of the above, at all, and still remains coercive at heart.

And ignoring waste in other sectors of the economy that arises as a result of a more humanistic disribution (if such a thing can be implemented) is not terribly moral.

It is, because health and food are more important than waste accruing in other sectors of the economy in a humanistic approach. In a non-humanistic approach, they are no more critical than other sectors of economy and cannot be developed at the expense of other sectors.

[Simon_Jester]

Microeconomic production processes at McDonalds or Burger are identical to other, smaller fast food chains - cheap restaurants are small units of production. However, they are owned in a centralized fashion. Just like a kiosk might be a small trade outlet, but you might run into the fact that most kiosks are owned by large companies. Ownership does not impact the scale of the individual production unit itself.

A point, although small production units at least make widespread ownership possible. Another example would be certain skilled trades- the plumber who owns his own tools, truck, and is in general his own man.

With respect to restaurants, I was thinking of places a step in price above McDonalds, though not necessarily a large step- they're maybe out of reach of workers in that a worker isn't wise to eat there every day, but not ludicrously expensive. Plotting out the fast food industry doesn't capture the full picture, especially in urban areas, because fast food is practically defined by mass-produced, mass-standardized chains. If it sells hamburgers and it isn't a McDonald's, a Burger King, or one of a few other similar (smaller) chains... it isn't considered a fast food hamburger place at all, by and large.

That said, I don't really disagree with the fundamental thesis- I'm just observing that there are conditions which promote oligopoly relatively more, and which promote it relatively less.

That is only a relevant issue when dealing with communities which have absolutely hit rock bottom. Moreover, even then it's not a given that a command economy would be more effective than a market. Regardless, I believe I've already pointed out that I'm pro-welfare, so citing a desperate situation like that as a counterpoint to my position seems somewhat strange to me.

I think the problem is that Stas perceives an inconsistency between "the market will provide" thinking applied to tax rates on billionaires, or on health care, and "feed the hungry" thinking applied to the question of welfare for people who can't afford food.

There has to be some consistent standard by which we judge which commodities are or are not allowed to float in a free-market environment. It may be acceptable for people to be priced out of the market for computers or automobiles, but not for food, medicine, shelter, and education for their children.

Where, in the general case, do you draw the line?

If the real world favors oligopolies, then they ARE constrained by diseconomies of scale due to the LRAC. Unconstrained markets of that type would lead to natural monopoly, not oligarchy. And you get around to diminishing that effect with internationalism through trade, enlarging the market and increasing it beyond point where the LRAC rises.

If diseconomies of scale don't kick in until the average economic unit is a megacorporation with thousands of employees and billions of dollars of assets... does it really matter that they do eventually? You still get a situation where the corporation is in a strong position to work out its own interests, apply leverage to politicians and ordinary citizens, and get a favorable deal for itself.

Wait, what? Weren't you advocating a command economy earlier? I was arguing on the assumption that that would be your preferred system.

Stas is a post-1990 commie. He might be happy enough with a command economy for all I know, but he wouldn't be happy with the Soviet command economy. You'd need a way to organize a command economy that simply has not yet been developed, before you could put one together that would satisfy him, I think.

Of course, the same can be said of a market economy- except perhaps for brief periods in certain countries, no one has ever really managed a market economy well enough to keep it from sprouting weeds, any more than they have with a command economy.

Only relevant in absence of more information about individuals involved. Given such a situation, one system cannot be preferred over another given the criteria you present. But markets don't care who pays, and if humanism doesn't care which patients receive limited services, then what are you arguing for? If you cannot formulate a humanistic criterion that says that "these 30 patients out of the 50 who want service are the ones who should receive service, since we have limited resources", then how can you criticize the market for "outpricing" anyone with the same result?

The humanistic criterion, I'd think, would be "those most in need should get it." This is common sense- if you can feed the fat man or the starving man, feed the starving man. Give clothing to the naked before giving it to the fully clothed, and so on.

Someone who urgently needs dental care if they are to be able to chew without pain should be a higher priority for dental care than someone who wants their teeth whitened, or a bit of cosmetic straightening.

When you think about it, though... which is a better measure of how desperate you are? Your ability to pony up cash, or your willingness to wait in line? A rich man can pony up a hundred dollars for a dental appointment without thinking twice, a poor man cannot, even if the state of their teeth is identical. But a rich man and a poor man alike would be about as likely to put up with a long waiting list and a lot of paperwork for something they're equally sure they need.

That doesn't mean long lines are good, but they're at least more democratic than charging for your services with a price tag that's a week's wages for the average person but a day's wages for a wealthy executive.

I was speaking in theoretical terms. You cannot say that an autarchic person who lives on a plot of land is being "coerced" by anyone, just because he has to work. If you cannot justify the idea that all need for work is "coercion", then you don't have an argument on this point. Having to work is the nature of reality. It's not "coercion" at all - especially if you're free to choose the nature of your work (which doesn't happen in command economies, but which can happen in market economies). Being fired sucks, but a worker is also free to quit.

The problem, Zentei, is that the freedom to choose how to work is itself in doubt in a world where I need to find a job to eat while corporations don't need to hire me to eat. I don't have the luxury of shopping around to the same extent that they do, and they can pick the best of two dozen applicants more easily than I can pick the best of two dozen jobs.

Whenever labor supply exceeds demand, we see this happening; right now it's happening all over the developed world. The labor market is nearly always a buyer's market, outside of specialist niches where people with specific skills or credentials can set their own price.

Dumping the prices also hurts the one doing so, at least short term. And what you describe is competition, not "coercion". It seems to me that you're broadening the use of the term "coercion" to become almost meaningless and thus to allow comparison between a command economy and a free society. Not cool, man.

But now you said earlier that command economies become corrupt in very short order, so what system exactly are you favoring here?

I suspect he's favoring a system of "recognizing that the system has bugs." And not trying to paper over these bugs by saying "it's just competition in action!" without actually sitting down to analyze the consequences.

The basic problem with economic libertarianism, the one that has caused so many troubles when applied in actual politics, is that it exports responsibility for what in a normal state would be policy choices onto the market. Questions that a government would normally think about quite seriously even in a normal market economy, a libertarian will say "let the market sort it out." Thus, any harm that is done to society is effectively ignored, and a strong economic agent gains great freedom of action, at the expense of everyone else in the system.

If industries migrate overseas, if economies become so overspecialized that they can no longer provide jobs for the national population because they're too oriented towards the export market, if great numbers of people are sick or homeless or starving, if college students are graduating with a crushing burden of debt and negligible job prospects to pay it off with... you can always find a libertarian waiting in the wings to say "it's the market at work, and the market will sort it out, all will be for the best in the most economically self-optimized of all possible worlds."

Note that the libertarian in question may not be you, but you can always find him if you look around.

If there's a crop failure, we don't say "let ecology sort it out!" If there's a riot, we don't say "let human tribal instincts sort it out!" Sure, these processes are natural, and some problems will solve themselves because of natural feedback loops... but a lot of other problems won't. And a political philosophy that makes a large point out of trumpeting the virtues of natural feedback loops becomes suspect when it takes a serious problem in society, one that harms large numbers of people, and says "let the feedback loops sort it out, just get out of the way!"

You cannot steer a ship simply by letting wind, wave, and tide take their course. Or rather, you can, but you will run aground or sink sooner or later.


You, personally, may not be tarred with this brush. I'm not saying you are, because I don't know. But it's a huge part of the modern political discourse of the Western world- every nation has its laissez-faire fundamentalists, its advocates of deregulation and globalization and government austerity.

And I think that just as any communist in this day and age should be required to present their views on gulags and the Great Leap Forward, just to make sure they're facing the problems with their own ideology squarely... any advocate of libertarian laissez-faire market economics should be required to explain their views on this problem. To take this problem of state policy decisions that have huge consequences for the citizenry, and seeing them thrown into the uncaring hands of Fate (which is what the market amounts to), and confront the problem squarely.

Which is why I'm pestering you about it. I'm trying to get a sense for how far are you willing to go in taking the responsibility for what would normally be state policy decisions, and exporting that responsibility onto a market which is inherently not accountable for its actions.

So more people want free stuff than stuff they have to pay for? And when there are suddenly more consumers than the system can handle, there are waiting lines (especially when they have reason to believe that the free service is short term only)? Not much of a revelation!

Thing is, every person in that line believes they need dental care. Many of them, if they had any money to begin with, would happily pay exorbitant sums to get it. But they don't have the money, they can't pay, and as a result they just sit there and let their teeth ache... even while other dentists are busy doing cosmetic work on patients who are in no danger of a toothache at all.

This is the question that must be faced squarely: is the system still functional when poor people must submit to a painful toothache while rich people can afford to get their teeth straightened to cosmetic perfection?

But if you claim that the "iron law of the oligarchy" somehow always causes corruption, then why do you question my assertion that there is a need for greater competition?

I see him questioning the idea that the assertion is practical, much as you might think it impractical if Stas said that communism should be run by incorruptible men who didn't allow a national Party to become the new upper class. Sure, in principle, that would be better than the alternative in his worldview, but can it really be done?

Trying to increase competition by 'freeing up' markets does not necessarily work in the long run- it can even strengthen the oligarchy by removing social elements that might resist its decisions.

Remember that the system of social checks and balances in historical societies extends outside the market: there are groups with forms of power that cannot easily be expressed in terms of dollar signs. If I were you and I wanted to live in a healthy society, I would not lightly cast away those checks and balances.

Think about it. When all social power belongs to those who are good at war, you don't get a 'democracy of violence' in which every person is free to do whatever they please because they can defend themselves with force. No, you get a tyranny of those who are most skilled at the use of force, or at organizing others to use force- rule by warlords, with feudal aristocracies being about the best form of government you can hope for. To restrain this, you need other forms of power in society than the appeal to naked force, and rules to keep the state from being taken over by the warlords.

When all social power belongs to those who are pious, you don't get a 'democracy of faith' in which all people are equal because all people are bound by the same religious strictures. No, you get a tyranny of those who are in the best position to interpret the religious rules and issue binding religious decrees that the masses will obey- a theocracy. To restrain this, you need power blocs independent of the church, and rules to keep the state from being taken over by the church.

Why would it be any different when we talk about a society where all social power belongs to those who have money and are best at manipulating money? Wouldn't we expect a tyranny of the money-handling and money-manipulating class? Wouldn't we want to avoid this? Wouldn't we need to diversify power in society, handing it out to many different groups so that no one clique can set themselves up as tyrants?


To wrap this up: I acknowledge libertarianism as a legitimate descendant of 19th century liberalism, which is itself a legitimate descendant of the 18th century Enlightenment. But libertarianism has gone down a troubling path in recent years, and is in danger of becoming one of the black sheep of the family, as communism became one in the 20th century. This is because (like actual implemented forms of 20th century communism) many libertarians have forgotten one of the great Enlightenment lessons: the need to decentralize power in society, to avoid tyranny.

[K. A. Pital]

I favor non-command non-monetary economics, actually. Just for the record. They are pathetically undeveloped as of yet, regardless of the enormous progress made in the recent years - but I am certain that they hold the keys to building a possible decentralized and yet powerful economic system. Command economies are an interesting subject that I fancy, and I did a lot of study in that area recently, but it does not mean I support replacing current economies with them. I might feel sympathetic because they are an experiment of alternate economic structure than capitalism, and I might also consider trying to create an advanced XXI century First World command economy (so that we'll have an example far more advanced than the historical XX century ones) a worthwhile experiment - but that does not mean I personally favor them or consider them incorruptible. I might choose a corrupt command system if I consider the alternative as corrupt, and the replacement of it with a corrupt command economy a net utilitarian benefit. However, it requires a lot of thinking and planning. Not to mention I'm not in the position to actually create such an economy.

I'll start completely favoring pure command economies when a workable example of that actually starts demonstrating higher productivity of labour and utterly annihilates any competing productive structures, beating capitalism at it's own game - just like feudalism was beaten earlier. Till then, I think non-command alternative economic models are equally important or even more worthwhile as a field of study and intellectual development.

However, in that particular issue (re: healthcare) the replacement of the market with a NHS is clearly a utilitarian benefit. People are served on the basis of need, not on the basis of whether they can pay. Even if there is a deficit, replacing the NHS with a private system will only outprice the people who could formerly apply with their needs and achieve absolutely nothing positive; it will not make any of the people who woudn't be able to pay healthy. It will just remove them from the hospitals.

If diseconomies of scale don't kick in until the average economic unit is a megacorporation with thousands of employees and billions of dollars of assets... does it really matter that they do eventually? You still get a situation where the corporation is in a strong position to work out its own interests, apply leverage to politicians and ordinary citizens, and get a favorable deal for itself.

My point exactly. Zentei said that if LRAC is shaped so that diseconomies kick early, oligopolies don't arise. I said that IRL the curve is usually allowing for oligopolization of most, if not almost all sectors of the economy and thus the LRAC curve that would favor a more competitive environment is actually a theoretical construct rarely realized in practice. I did not say that the markets evolve towards a single-producer monopoly - oligopoly seems to be optimal. It is a more stable system, just like oligarchy is more stable than God-Emperor of Dear Korea autocracy.

Stas is a post-1990 commie.

Post- or neo-Marxist, really, in the vein of Theborn, Zizek, Kagarlitsky, Tarasov, and many other Gramsci-leaning post/neomarxists. "Neo" is a very layman description, but "postmarxism" as a term is unknown to most people.

[Starglider]

I favor non-command non-monetary economics, actually.

Money is such an immensely useful concept that it will spontaneously emerge in any economy larger than a small tribe. You cannot avoid this without an immensely oppresive centralised state; probably not even then, as even North Korea has rampant black markets. A non-monetary economy is a fundamentally ridiculous notion. Much more sensible is breaking the state monopoly on the definition of money; it is highly arguable that the concept of 'legal tender' has done more harm than good. Of course socialists are very unlikely to support this as virtually all of them are wholly reliant on the crutch of central state coercion to enforce their crazed notions of social justice.

[K. A. Pital]

Money is such an immensely useful concept that it will spontaneously emerge in any economy larger than a small tribe.

There are millions of torrent users and yet there's no money. Money is useful for a primitive infrastructure with high fixed costs of physical manufacturing. Which is what humanity has today.

[Lord Zentei]

But if you claim that the "iron law of the oligarchy" somehow always causes corruption, then why do you question my assertion that there is a need for greater competition?

Because humanism does not apriori distinguish between individuals. Each human life is worth the same. Which is why the outcome where everyone has equal access to a service is preferrable to a non-equal access situation, if the service in question is not a luxury. That is my position and it was and remains always consistent. It is better to give everyone access to education and make them fail or win based on their brains alone than based on their money. Same with healthcare, except the criteria will have to be strictly medical. Not financial.

Except that's not the reality if you have a situation where there are more prospective customers than resources. Your ideal is irrelevant to reality.

And what you describe is competition, not "coercion". It seems to me that you're broadening the use of the term "coercion" to become almost meaningless and thus to allow comparison between a command economy and a free society. Not cool, man.

So when I go to the Bumfuck factory and tell them to sell it to me for 30 grand or else I'll run them into the fucking ground, bankrupt their business and then scoop up the remains, I'm not coercing them to sell? I'm not using administrative leverage, sure, mere economic leverage. But to say that I'm not coercing them to sell would be preposterous. If they had equal damage absorption capacity as my Philip Morris, they might not cave in and insist that their plant(s) is worth much more than I'm desiring to pay them. Which means that competition is permanent coercion of the weaker by the stronger, and on conditions unfavorable for the weaker.

Going by this line of reasoning, all human competition is coercion. Nonetheless, even we grant your example that is still not the same as saying that it is "coercion" to require that people work for their pay. You might just as easily say that the worker is "coercing" the employer into giving him money, or else he'll walk away, causing him economic damage. It's just asinine.

And ignoring waste in other sectors of the economy that arises as a result of a more humanistic disribution (if such a thing can be implemented) is not terribly moral.

It is, because health and food are more important than waste accruing in other sectors of the economy in a humanistic approach. In a non-humanistic approach, they are no more critical than other sectors of economy and cannot be developed at the expense of other sectors.

And who decides what is important? Besides, you are mistaken: non-luxury goods have low elasticity of demand - it's simply wrong to claim that market economics doesn't distinguish these things.

Money is such an immensely useful concept that it will spontaneously emerge in any economy larger than a small tribe.

There are millions of torrent users and yet there's no money. Money is useful for a primitive infrastructure with high fixed costs of physical manufacturing. Which is what humanity has today.

Complete bullshit. Torrent users PAY MONEY for premium service, otherwise they take non-premium service with ADVERTISEMENTS which are paid for WITH MONEY.

[Surlethe]

Money is such an immensely useful concept that it will spontaneously emerge in any economy larger than a small tribe.

There are millions of torrent users and yet there's no money. Money is useful for a primitive infrastructure with high fixed costs of physical manufacturing. Which is what humanity has today.

Money becomes useful when the search cost of matching goods to be traded becomes prohibitively high. Torrenting is not a good example because no trading of different goods and services is involved.

When people start bidding goods instead of prices on eBay and start asking for goods or services instead of cash on Craigslist, I'll believe that money has outlived its usefulness.

EDIT: I am in the process of editing this post to include a better response to Stas' longer post earlier.

[Surlethe]

Goddammit, I hit the time limit.

I'll start completely favoring pure command economies when a workable example of that actually starts demonstrating higher productivity of labour and utterly annihilates any competing productive structures, beating capitalism at it's own game - just like feudalism was beaten earlier. Till then, I think non-command alternative economic models are equally important or even more worthwhile as a field of study and intellectual development.

In addition to corruption issues, a real command economy is frankly impossible because the computation of efficient long-run distribution of goods and services in a modern economy is simply impossible. Hell, the cost of gathering and formulating all of the information necessary for the computation is by itself overwhelming. Add to that the fact that nobody has any idea what sort of innovations might happen, and you have a recipe for an immensely slow economic disaster unfolding over many decades. As economies become bigger and more complex, with more interactions and more goods and services, these computational issues become worse, not better --- one can potentially successfully run a simple command economy, as the industrializing USSR in the 1920s or the US producing only military goods during WWII, but in a fully fledged XXI-century technological society, the a priori calculation of a posterior Pareto-optimal full distribution is not possible.

However, in that particular issue (re: healthcare) the replacement of the market with a NHS is clearly a utilitarian benefit. People are served on the basis of need, not on the basis of whether they can pay. Even if there is a deficit, replacing the NHS with a private system will only outprice the people who could formerly apply with their needs and achieve absolutely nothing positive; it will not make any of the people who woudn't be able to pay healthy. It will just remove them from the hospitals.

I'd actually argue that a system of social insurance, a la Canadian Medicare, is superior to a NHS. Instead of needing to coordinate not only the rationing mechanism but also the infrastructure and the workers, which introduces many opportunities for inefficiency and corruption, the government can distribute that computation by simply setting a price and a few rules for the rationing mechanism (triage the patients, instead of first-come, first-serve, under-the-table deals will be prosecuted, etc.). The market will take care of the infrastructure calculations and as long as the government is setting the price high enough, there will be enough producers to adequately cover the population.

[Lord Zentei]

For FUCK'S sake, could you conceivably have made a more massive wall-of-text in your response? I mean, seriously. Annoyance encountered in this post are in large part consequences of such.

That is only a relevant issue when dealing with communities which have absolutely hit rock bottom. Moreover, even then it's not a given that a command economy would be more effective than a market. Regardless, I believe I've already pointed out that I'm pro-welfare, so citing a desperate situation like that as a counterpoint to my position seems somewhat strange to me.

I think the problem is that Stas perceives an inconsistency between "the market will provide" thinking applied to tax rates on billionaires, or on health care, and "feed the hungry" thinking applied to the question of welfare for people who can't afford food.

There has to be some consistent standard by which we judge which commodities are or are not allowed to float in a free-market environment. It may be acceptable for people to be priced out of the market for computers or automobiles, but not for food, medicine, shelter, and education for their children.

Where, in the general case, do you draw the line?

I don't draw a line, to say that one arbitrarily decided point is the one and only point that is acceptable is nonsense. I do recognize the power of markets to achieve things that they're designed to do, and would prefer to see society make use of them as far as possible where resource maximization is a key criterion, since a better system for resource maximization has not been achieved yet. Therefore I support the idea of negative tax rates and similar schemes which empower people to make their own choices. I support the role of the state in ensuring competition in such an environment, in managing externalities and additionally, I support the presence of paid-for emergency services where market systems would be hard pressed to function. There are also such things as market failure, and that's where welfare becomes doubly important.

If the real world favors oligopolies, then they ARE constrained by diseconomies of scale due to the LRAC. Unconstrained markets of that type would lead to natural monopoly, not oligarchy. And you get around to diminishing that effect with internationalism through trade, enlarging the market and increasing it beyond point where the LRAC rises.

If diseconomies of scale don't kick in until the average economic unit is a megacorporation with thousands of employees and billions of dollars of assets... does it really matter that they do eventually? You still get a situation where the corporation is in a strong position to work out its own interests, apply leverage to politicians and ordinary citizens, and get a favorable deal for itself.

Who is demanding perfection? It seems that you are insisting that if the market is not perfectly competitive, then it's wrong to state that increasing competition will improve the situation - all the while providing very little in realistic alternatives, I might add.

Wait, what? Weren't you advocating a command economy earlier? I was arguing on the assumption that that would be your preferred system.

Stas is a post-1990 commie. He might be happy enough with a command economy for all I know, but he wouldn't be happy with the Soviet command economy. You'd need a way to organize a command economy that simply has not yet been developed, before you could put one together that would satisfy him, I think.

Of course, the same can be said of a market economy- except perhaps for brief periods in certain countries, no one has ever really managed a market economy well enough to keep it from sprouting weeds, any more than they have with a command economy.

This is the most ridiculous example of a tu-quoque + black/white fallacy I have seen in this thread. It merits no further response than this observation.

Only relevant in absence of more information about individuals involved. Given such a situation, one system cannot be preferred over another given the criteria you present. But markets don't care who pays, and if humanism doesn't care which patients receive limited services, then what are you arguing for? If you cannot formulate a humanistic criterion that says that "these 30 patients out of the 50 who want service are the ones who should receive service, since we have limited resources", then how can you criticize the market for "outpricing" anyone with the same result?

The humanistic criterion, I'd think, would be "those most in need should get it." This is common sense- if you can feed the fat man or the starving man, feed the starving man. Give clothing to the naked before giving it to the fully clothed, and so on.

Someone who urgently needs dental care if they are to be able to chew without pain should be a higher priority for dental care than someone who wants their teeth whitened, or a bit of cosmetic straightening.

This point was raised earlier. In fact I raised it, in response to a claim by Stas that there was no moral difference between a command economy that serves 30 out of 50 applicants and a market one that serves the 30 out of the 50 who pay.

When you think about it, though... which is a better measure of how desperate you are? Your ability to pony up cash, or your willingness to wait in line? A rich man can pony up a hundred dollars for a dental appointment without thinking twice, a poor man cannot, even if the state of their teeth is identical. But a rich man and a poor man alike would be about as likely to put up with a long waiting list and a lot of paperwork for something they're equally sure they need.

That doesn't mean long lines are good, but they're at least more democratic than charging for your services with a price tag that's a week's wages for the average person but a day's wages for a wealthy executive.

Since you sacrifice very little when you wait in line, then that's hardly much of a measure of how desperate you are. Waiting lines are a downright poor measure of anything other than the inability of the provider to provide as much as people are asking for under the given conditions. Not saying that willingness to pay is perfect either, but at least then you have to think about it.

I was speaking in theoretical terms. You cannot say that an autarchic person who lives on a plot of land is being "coerced" by anyone, just because he has to work. If you cannot justify the idea that all need for work is "coercion", then you don't have an argument on this point. Having to work is the nature of reality. It's not "coercion" at all - especially if you're free to choose the nature of your work (which doesn't happen in command economies, but which can happen in market economies). Being fired sucks, but a worker is also free to quit.

The problem, Zentei, is that the freedom to choose how to work is itself in doubt in a world where I need to find a job to eat while corporations don't need to hire me to eat. I don't have the luxury of shopping around to the same extent that they do, and they can pick the best of two dozen applicants more easily than I can pick the best of two dozen jobs.

Whenever labor supply exceeds demand, we see this happening; right now it's happening all over the developed world. The labor market is nearly always a buyer's market, outside of specialist niches where people with specific skills or credentials can set their own price.

Nonsense. Corporations need to hire people in order to function. They don't need to hire you personally, but then you don't have to work for McDonalds specifically.

Dumping the prices also hurts the one doing so, at least short term. And what you describe is competition, not "coercion". It seems to me that you're broadening the use of the term "coercion" to become almost meaningless and thus to allow comparison between a command economy and a free society. Not cool, man.

But now you said earlier that command economies become corrupt in very short order, so what system exactly are you favoring here?

I suspect he's favoring a system of "recognizing that the system has bugs." And not trying to paper over these bugs by saying "it's just competition in action!" without actually sitting down to analyze the consequences.

All systems have bugs. I doubt that anyone disagrees with that statement. Why do you think I'm pro-welfare?

The basic problem with economic libertarianism, the one that has caused so many troubles when applied in actual politics, is that it exports responsibility for what in a normal state would be policy choices onto the market. Questions that a government would normally think about quite seriously even in a normal market economy, a libertarian will say "let the market sort it out." Thus, any harm that is done to society is effectively ignored, and a strong economic agent gains great freedom of action, at the expense of everyone else in the system.

If industries migrate overseas, if economies become so overspecialized that they can no longer provide jobs for the national population because they're too oriented towards the export market, if great numbers of people are sick or homeless or starving, if college students are graduating with a crushing burden of debt and negligible job prospects to pay it off with... you can always find a libertarian waiting in the wings to say "it's the market at work, and the market will sort it out, all will be for the best in the most economically self-optimized of all possible worlds."

Note that the libertarian in question may not be you, but you can always find him if you look around.

If there's a crop failure, we don't say "let ecology sort it out!" If there's a riot, we don't say "let human tribal instincts sort it out!" Sure, these processes are natural, and some problems will solve themselves because of natural feedback loops... but a lot of other problems won't. And a political philosophy that makes a large point out of trumpeting the virtues of natural feedback loops becomes suspect when it takes a serious problem in society, one that harms large numbers of people, and says "let the feedback loops sort it out, just get out of the way!"

You cannot steer a ship simply by letting wind, wave, and tide take their course. Or rather, you can, but you will run aground or sink sooner or later.

Interesting how you say "in a normal society". Corporatism is pretty far removed from libertarianism in any case.

But if you're talking about a stateless or near-stateless society and/or always deferring to market forces, then I don't see why you're bringing that up in this thread, since no one here has advocated such. Nonetheless, market forces are very effective at doing what they do, which is clearing the market, the maximization of production per unit input resources and maximization of the total sum of profit and consumer benefit. That may not always be what we want to do, but that's another issue entirely.

You, personally, may not be tarred with this brush. I'm not saying you are, because I don't know. But it's a huge part of the modern political discourse of the Western world- every nation has its laissez-faire fundamentalists, its advocates of deregulation and globalization and government austerity.

Black-white fallacies and loaded statements again? Market liberalization and globalization = laissez-faire "fundamentalism"? WTF?

And I think that just as any communist in this day and age should be required to present their views on gulags and the Great Leap Forward, just to make sure they're facing the problems with their own ideology squarely... any advocate of libertarian laissez-faire market economics should be required to explain their views on this problem. To take this problem of state policy decisions that have huge consequences for the citizenry, and seeing them thrown into the uncaring hands of Fate (which is what the market amounts to), and confront the problem squarely.

Which is why I'm pestering you about it. I'm trying to get a sense for how far are you willing to go in taking the responsibility for what would normally be state policy decisions, and exporting that responsibility onto a market which is inherently not accountable for its actions.

I have already explained - multiple times - that I'm pro-welfare. If you want apologism for "pure" libertarianism, then perhaps you should ask a dyed-in-the-wool libertarian instead of me. And appeal to normalcy again - loaded question. Not cool.

As for market economics in general, I daresay that any system has its strengths and weaknesses, and you therefore choose the system (or permutation of systems) where the strengths exceed the weaknesses (as chosen by some sensible criteria). At least the market economists have an entirely unambiguous quantitative measure of the costs and losses of their system - i.e. consumer benefit, economic efficiency and profit. These are also measured using the same yardstick, i.e. money. This is not the only measure that should be used, but it's a very important one, since it defines the resources which we have at our disposal.

So more people want free stuff than stuff they have to pay for? And when there are suddenly more consumers than the system can handle, there are waiting lines (especially when they have reason to believe that the free service is short term only)? Not much of a revelation!

Thing is, every person in that line believes they need dental care. Many of them, if they had any money to begin with, would happily pay exorbitant sums to get it. But they don't have the money, they can't pay, and as a result they just sit there and let their teeth ache... even while other dentists are busy doing cosmetic work on patients who are in no danger of a toothache at all.

This is the question that must be faced squarely: is the system still functional when poor people must submit to a painful toothache while rich people can afford to get their teeth straightened to cosmetic perfection?

Sure it is. But it's arguably not achieving what you consider to be a moral solution.

But if you claim that the "iron law of the oligarchy" somehow always causes corruption, then why do you question my assertion that there is a need for greater competition?

I see him questioning the idea that the assertion is practical, much as you might think it impractical if Stas said that communism should be run by incorruptible men who didn't allow a national Party to become the new upper class. Sure, in principle, that would be better than the alternative in his worldview, but can it really be done?

That's an absurd comparison. It's a given - and seems to be the consensus among us - that centralization of power leads to corruption. Yet, I'm being told that it is "impractical" to increase competition, while some kind of ephemeral, undefined form of command economy is to be preferred, because the powers that be would resist increasing competition - as if they wouldn't resist a massive revamp of the entire socio-economic order! What nonsense.

Trying to increase competition by 'freeing up' markets does not necessarily work in the long run- it can even strengthen the oligarchy by removing social elements that might resist its decisions.

Remember that the system of social checks and balances in historical societies extends outside the market: there are groups with forms of power that cannot easily be expressed in terms of dollar signs. If I were you and I wanted to live in a healthy society, I would not lightly cast away those checks and balances.

Are you ascribing to me a position that I do not hold? It certainly seems that way from where I'm sitting.

Think about it. When all social power belongs to those who are good at war, you don't get a 'democracy of violence' in which every person is free to do whatever they please because they can defend themselves with force. No, you get a tyranny of those who are most skilled at the use of force, or at organizing others to use force- rule by warlords, with feudal aristocracies being about the best form of government you can hope for. To restrain this, you need other forms of power in society than the appeal to naked force, and rules to keep the state from being taken over by the warlords.

When all social power belongs to those who are pious, you don't get a 'democracy of faith' in which all people are equal because all people are bound by the same religious strictures. No, you get a tyranny of those who are in the best position to interpret the religious rules and issue binding religious decrees that the masses will obey- a theocracy. To restrain this, you need power blocs independent of the church, and rules to keep the state from being taken over by the church.

Why would it be any different when we talk about a society where all social power belongs to those who have money and are best at manipulating money? Wouldn't we expect a tyranny of the money-handling and money-manipulating class? Wouldn't we want to avoid this? Wouldn't we need to diversify power in society, handing it out to many different groups so that no one clique can set themselves up as tyrants?

That depends on the structure of the market and of the political society in the general sense. Making sweeping comparisons doesn't exactly convince anyone.

To wrap this up: I acknowledge libertarianism as a legitimate descendant of 19th century liberalism, which is itself a legitimate descendant of the 18th century Enlightenment. But libertarianism has gone down a troubling path in recent years, and is in danger of becoming one of the black sheep of the family, as communism became one in the 20th century. This is because (like actual implemented forms of 20th century communism) many libertarians have forgotten one of the great Enlightenment lessons: the need to decentralize power in society, to avoid tyranny.

Libertarians have forgotten no such thing. I don't know were you're getting your assessment of their views from, but it's certainly not libertarians themselves. But I acknowledge that you recognize that decentralization is needed in a healthy society. And to that end, increased competition is a key means.

[K. A. Pital]

Except that's not the reality if you have a situation where there are more prospective customers than resources. Your ideal is irrelevant to reality.

I never said that humanistic approach fixes scarcity. It simply acknowledges it.

Going by this line of reasoning, all human competition is coercion. Nonetheless, even we grant your example that is still not the same as saying that it is "coercion" to require that people work for their pay. You might just as easily say that the worker is "coercing" the employer into giving him money, or else he'll walk away, causing him economic damage. It's just asinine.

It is not asinine - in case the workers have greater leverage (e.g. via unions), they actually can coerce the capitalist into giving them benefits or greater pay he doesn't want to give them, else they will run his business into the fucking ground. To deny that these are coercive actions is to deny reality. Most of the times, however, the individual worker has a much lower tolerance for economic damage. Economic damage to a large enterprise is neglible when they don't hire an indian worker. For the indian worker, this non-hiring can mean malnourishment. To say that all are "equally free and uncoerced" is to obfuscate the truth. Yes, the company suffers an equal volume of economic loss if it chooses to refuse or hire a worker - it loses all of his potential productivity, just as he loses the wage. However, the company is much larger and more stress-tolerant than the worker. The point about unequal leverage permeating all of economy and almost always influencing economic transactions (since rarely do two equal leverage agents meet) is not some sort of dastardly accusation but a statement of fact.

And no, not all of competition is coercion. However, a competition where one competitor can dictate something to the other, where the consequence of competition is a greater influence of the winner against the loser, is inherently coercive. When runners run a 100 meter line, the winner of the run cannot force any other sportsman to do his bidding. If a runner could dictate other runners his conditions under some threat that would make other runners follow his orders, then running would also constitute coercion.

And in a sense, you are right. Competition instead of cooperation is an idea coercive at heart. It is a social-darwinist idea. Extrapolating our "runner" example, we enter the primeval world, where the fittest surive. The strongest male will dictate others what to do in a tribe, because he "won" (or has to win multiple times - like a repeating test) a competition of strength. Physical fitness competition thus becomes the source of a power structure and a system of coercion.

And who decides what is important? Besides, you are mistaken: non-luxury goods have low elasticity of demand - it's simply wrong to claim that market economics doesn't distinguish these things.

So what? You said that low elasticity is not a problem. The distinction is purely academic unless you're actually going the last step and saying "Because of so-and-so, we have to give this a greater priority". As to who decides - I think most humans agree staving off malnourishment is more important than overfeeding an already fat human.

Complete bullshit. Torrent users PAY MONEY for premium service, otherwise they take non-premium service with ADVERTISEMENTS which are paid for WITH MONEY.

Uh... You got to be crazy if you think torrent users pay for some sort of "premium service" without ads. You must be confusing that with HTTP download and FTP download file-exchange services like Rapidshare. Those have nothing to do with torrents. People also don't pay any money for a great many open source projects. Information - that is, the very thing that constitutes value in the sector - is exchanged freely between all participants.

Pareto-optimal full distribution is not possible

Pareto-optimality is a desireable state (full utilization of productive capacity is always desireable), but not necessary. Pareto is a non-humanistic and non-moral criterion. What is better, a high life level for some with mass malnourishment for others in a Pareto-optimal situation, or a non-Pareto optimal situation with a modest life standard for all? The second is superior from a humanistic point of view, even if a Pareto-optimal solution more fully utilizes the productive capacities of the system. To make an example, a Pareto-efficient distribution where say, the production of grain is at the curve of productive capabilities, but with starvation due to exports, and a Pareto-inefficient distribution where the production of grain is not at the curve, but distribution disallows starvation despite the inefficiency, is preferrable.

As economies become bigger and more complex, with more interactions and more goods and services, these computational issues become worse, not better

I think some followers of Stafford Beer in Russia did a computation which shows that the level of computational power of computers is growing a lot faster than the complexity of economic systems. I.e. supercomputers are becoming advanced enough to actually be able to pull it off. I can't necessarily say if it is so or not, but to say that economic systems are becoming "more complex" while treating computational means as static is preposterous. Computational means have increased their power in at a rate hitherto unseen. In the USSR, a lot of people calculated with the god damn abacus, you know. We went from the abacus to the Blue Gene in just several decades. The current economy took hundreds of years to become as complex.

[Starglider]

There are millions of torrent users and yet there's no money.

Internet access is a fixed cost for most users. There is no (significant) incremental cost to redistributing chunks to other users. Furthermore the torrent enforcement mechanism of throttling down bandwidth to users who don't upload has no direct equivalent in the world of real finite goods, and any loose equivalent of barter tracking would in fact just be electronic money. Finally, sad to say but the vast majority of bittorrent use is for copyright infringement and is hence inherently parasitical on an industry paid for by people who actually purchase media. The situation is less serious for digital goods due to near-zero marginal cost of production, but for tangible goods this would just be theft (in fact this is why industry lobbyists can so easily equate copyright infringement with theft).

Money is useful for a primitive infrastructure with high fixed costs of physical manufacturing. Which is what humanity has today.

Even post-scarcity economics is fairly pointless to debate, much less post-Singularity economics. Economics is dismal at predicting the behaviour of the real socities we're actually living in. Mix a significant amount of futurism there and the knock-on effects of technologies like nano-assemblers become impossible to predict. All we can say with certainty is that the world would be radically different from the way it is now, and concepts for post-scarcity society do not have much bearing on the tangible political and economic challenges of today.

[Simon_Jester]

Money is such an immensely useful concept that it will spontaneously emerge in any economy larger than a small tribe.

There are millions of torrent users and yet there's no money. Money is useful for a primitive infrastructure with high fixed costs of physical manufacturing. Which is what humanity has today.

Barring post-scarcity scenarios*, I think you still need some kind of value exchange tokens. Even when fixed costs are low, if there is still a need for trade** there will be a need for some kind of token which can be traded in lieu of goods.

You can avoid that in specialized environments (like the torrent community), but when you're talking about physical objects or complicated services that can only be provided by professional specialists, I really do not see how to avoid it.

*Which we can't plan for intelligently, any more than a Stone Age tribe could plan a moon landing...
**In the broadest possible sense of "trade," with no specific connotations except that goods are going from one set of hands to another...

---

For FUCK'S sake, could you conceivably have made a more massive wall-of-text in your response? I mean, seriously. Annoyance encountered in this post are in large part consequences of such.

Zentei, I'm sorry if I irritate you. Part of the problem is that I've only been seeing you around these past few months, and I don't have a clear picture of what you really think about some of these issues. Since they're big issues that bother me a lot, I wind up talking a lot and asking this kind of question to try and figure out what's going on.

By and large, I say is not meant as some kind of attack on you. It's me expressing my own doubts about the system, the same way I do to Stas sometimes when he talks about benevolent autocracy, or note that his idea of a moneyless society seems impossible to me.

Feel free to ignore much of this, or even all of this- I'm not going to flip out and start demanding that you respond to my points or "concede" some ridiculous proposition.

Going by this line of reasoning, all human competition is coercion. Nonetheless, even we grant your example that is still not the same as saying that it is "coercion" to require that people work for their pay. You might just as easily say that the worker is "coercing" the employer into giving him money, or else he'll walk away, causing him economic damage. It's just asinine.

Coercion implies a one-sided relationship: you have power, you convey some kind of threat: "Do this or else." The 'or else' does not have to be violence; all that matters is that the person with less power is doing something they would not normally be willing to do, and that they're motivated directly by the fear of "or else." This happens a lot; it's not a rare thing in our lives to be coerced. Coercion is part of the human condition, especially when dealing with strangers, because we don't have the right instincts to make us do favors for people we don't know and aren't part of our tribe.

And homo economicus, the human being viewed as a producing/consuming unit in a market economy, is not all that sentimental- homo economicus has a very small tribe in a very large world, and most of the people that he actually trades with aren't part of the tribe.

So I would say yes, many employers are coerced into paying their workers- if they could get people to work for free they would, but doing so would be more trouble than it's worth. In the US, there are literally laws against not paying your workers, and that's one of the linchpins of our labor law. And we see plenty of examples of workers being cheated by their employers on the black market, where employers have more power and there's no enforcement of labor law.

I don't draw a line, to say that one arbitrarily decided point is the one and only point that is acceptable is nonsense. I do recognize the power of markets to achieve things that they're designed to do, and would prefer to see society make use of them as far as possible where resource maximization is a key criterion, since a better system for resource maximization has not been achieved yet. Therefore I support the idea of negative tax rates and similar schemes which empower people to make their own choices. I support the role of the state in ensuring competition in such an environment, in managing externalities and additionally, I support the presence of paid-for emergency services where market systems would be hard pressed to function. There are also such things as market failure, and that's where welfare becomes doubly important.

OK. I have no problem with the idea that the "line" is wide and fuzzy, with large gray areas. The fact that you clearly know there is one is good enough for me. Thank you.

If diseconomies of scale don't kick in until the average economic unit is a megacorporation with thousands of employees and billions of dollars of assets... does it really matter that they do eventually? You still get a situation where the corporation is in a strong position to work out its own interests, apply leverage to politicians and ordinary citizens, and get a favorable deal for itself.

Who is demanding perfection? It seems that you are insisting that if the market is not perfectly competitive, then it's wrong to state that increasing competition will improve the situation - all the while providing very little in realistic alternatives, I might add.

The problem I see is that the power of markets comes from... call it a chess game between competitors. There are certain moves that work for the good of the system: adjusting prices to reflect realities of supply and demand, innovating as a way to increase profits, and so on. As long as both competitors play chess, everyone is well off.

But real economic agents don't always limit themselves to fair play, not if they can get away with it. They'd prefer to write their own rules for the game, to distract the other player and rearrange his pieces, possibly even to tip over the board and start a whole new game when it looks like they're about to lose.

This is a huge persistent problem with markets, and you cannot make it go away by trying to increase competition. Increasing the number of competitors does not make the competitors more honest, does not deter them from trying to play outside the rules if it gives them an advantage.

My argument is that it's very hard to increase competition in a permanent way- the trend towards very large economic units is continuous, and while you can break up one of the big units you can't keep the pieces from flowing back together indefinitely. Not without an extensive network of regulations, plus meta-regulations to 'watch the watchmen' in case of regulatory capture, plus constitutional provisions to stop legislative capture from destroying the regulations.

When you do this, a lot of tactics by which real market entities compete are taken off the table. Competition is not necessarily increased, and removing regulations to make competition easier won't necessarily create prosperity or efficiency. It may just make the players feel that they've now got a license to cheat, and get everyone doing things that enrich themselves but don't serve the interest the game is meant to serve.

Stas is a post-1990 commie. He might be happy enough with a command economy for all I know, but he wouldn't be happy with the Soviet command economy. You'd need a way to organize a command economy that simply has not yet been developed, before you could put one together that would satisfy him, I think.

Of course, the same can be said of a market economy- except perhaps for brief periods in certain countries, no one has ever really managed a market economy well enough to keep it from sprouting weeds, any more than they have with a command economy.

This is the most ridiculous example of a tu-quoque + black/white fallacy I have seen in this thread. It merits no further response than this observation.

Forgive me, but I have a lot of deep cynicism about laissez-faire capitalism. I don't trust it, I don't think it performs as advertised, and so many of its defenders refuse to do anything about the problems that crop up when it's applied.

So I honestly wonder whether "market economies" in some abstract sense are really better than "command economies" in some abstract sense. The theory makes them sound better, but when the theorists' arguments conclude in things like "therefore, we should not worry about the lack of dental care for the American poor," I get the feeling that there must be a hole in the argument somewhere.

The longer I've thought about this, the more convinced I've become that all economic systems "sprout weeds," to use my earlier image. And that anyone who tries to derive from first principles a strong set of rules about how economics should work is making a mistake. Economies are tools for producing and distributing goods, and trying to set up an economy from first principles is like trying to design a tool from first principles.

What happens when you design a tool without checking things like the conditions under which it will be used? Or the practical aspects of manufacturing it? Or whether the tool can be maintained in the field the way you want it to?

Why should we expect better results than that from doing the same thing in economics, as so many twentieth-century political schools have tried to do?

Since you sacrifice very little when you wait in line, then that's hardly much of a measure of how desperate you are. Waiting lines are a downright poor measure of anything other than the inability of the provider to provide as much as people are asking for under the given conditions. Not saying that willingness to pay is perfect either, but at least then you have to think about it.

I agree to a point.

But all men's toothaches are created equal, and not all men can answer "can I afford to get rid of my toothache" the same way. On a moral level, it's hard to justify "the rich man's toothache is taken care of, the poor man's toothache is not," unless we can say that it is morally superior to be rich.

At least, it seems so to me. Do you not perceive this as a problem?

The problem, Zentei, is that the freedom to choose how to work is itself in doubt in a world where I need to find a job to eat while corporations don't need to hire me to eat. I don't have the luxury of shopping around to the same extent that they do, and they can pick the best of two dozen applicants more easily than I can pick the best of two dozen jobs.

Whenever labor supply exceeds demand, we see this happening; right now it's happening all over the developed world. The labor market is nearly always a buyer's market, outside of specialist niches where people with specific skills or credentials can set their own price.

Nonsense. Corporations need to hire people in order to function. They don't need to hire you personally, but then you don't have to work for McDonalds specifically.

There's still an asymmetry- I need to work every day more than a corporation needs a specific position to be full every day.

Suppose there are 100 jobs and 100 job seekers. Some of the seekers can do more than others, while some of the jobs pay more than others. In an ideal situation, we might suppose that each job winds up assigned to someone who can work in proportion to the salary of the job: the people who can do the most work gravitate to the positions that pay the most.

But what happens if the average worker can only fill out 10 job applications before facing financial disaster, while the average employer can process 100 applications in parallel?

Everyone will want to apply to the places that pay the most, but those applications are unlikely to be accepted, because everyone's got the same incentive. If I can only spin out my job search long enough to seek ten positions, there's an opportunity cost for each application I fill out. Unless I have some reason to know I can get one of the best jobs, I have to assume my chances of getting one of the best jobs is 1%- that everyone else will see that same sweet deal and try to get it.

I can't really afford to put 10% of my job search effort into a job I have only a 1% chance of getting.

So instead, I look for positions I'm fairly sure to get. But what kind of position is that going to be? One where the employer is more confident of getting a good deal out of me- places that are, say, 20% or 30% likely to hire me, so that the odds of having ten applications in a row turned down are slim.

How do I push the chances of getting a job up to 20 or 30%? I have no influence over the size of the applicant pool. I can't outwait all the other applicants; I need that job now. So I have to improve the odds by making my employer desire my work as much as I desire a job... which means lowering my asking price, or accepting a low offer, so that the employer feels more willing to close the deal quickly.

At the end of the day, everyone still gets a job. But there's less pressure on employers to offer high salaries, because workers can't afford to be as picky. The asymmetry creates a downward pressure on wages, because there's less incentive for employers to outbid other employers, knowing that people will eventually get desperate and that applicants will show up willing to take what they can get.

All systems have bugs. I doubt that anyone disagrees with that statement. Why do you think I'm pro-welfare?

Because you are reasonable.

Whenever I meet a new libertarian, I try to gauge how reasonable they are. It's difficult, and I've been disappointed enough times that it hurts my ability to treat reasonable libertarians as they deserve.

Interesting how you say "in a normal society". Corporatism is pretty far removed from libertarianism in any case.

But if you're talking about a stateless or near-stateless society and/or always deferring to market forces, then I don't see why you're bringing that up in this thread, since no one here has advocated such. Nonetheless, market forces are very effective at doing what they do, which is clearing the market, the maximization of production per unit input resources and maximization of the total sum of profit and consumer benefit. That may not always be what we want to do, but that's another issue entirely.

I use 'normal' in historical terms. Most historical societies didn't, and don't, have truly free markets. Politics intervenes, and questions that the market could settle (like the de facto minimum wage, the interest rates offered by banks, or the average gas mileage of automobiles) become public policy decisions.

Removing the mechanisms by which politics interferes in the market frees up the market. But it cuts down on our options when the market's results diverge from the public interest.

You, personally, may not be tarred with this brush. I'm not saying you are, because I don't know. But it's a huge part of the modern political discourse of the Western world- every nation has its laissez-faire fundamentalists, its advocates of deregulation and globalization and government austerity.

Black-white fallacies and loaded statements again? Market liberalization and globalization = laissez-faire "fundamentalism"? WTF?

It's a matter of degree.

Some people will push austere government and deregulation regardless of consequences; it is seen as a good to be sought almost for its own sake. Or they will push it because they have absolute confidence that the consequences will be good, and don't really stop to do the math: they just assume that if you cut taxes and state spending it will always create a better economy, for instance. That, I call laissez-faire fundamentalism: the idea that the "invisible hand" is something so benevolent that it can be depended on to provide for its true-believers, if they make the right sacrifices.

You are not a laissez-faire fundamentalist. I know this. I'm trying to get a sense for the difference between you and one of them, and I'm having trouble doing it gracefully. Sorry.

And I think that just as any communist in this day and age should be required to present their views on gulags and the Great Leap Forward, just to make sure they're facing the problems with their own ideology squarely... any advocate of libertarian laissez-faire market economics should be required to explain their views on this problem. To take this problem of state policy decisions that have huge consequences for the citizenry, and seeing them thrown into the uncaring hands of Fate (which is what the market amounts to), and confront the problem squarely.

Which is why I'm pestering you about it. I'm trying to get a sense for how far are you willing to go in taking the responsibility for what would normally be state policy decisions, and exporting that responsibility onto a market which is inherently not accountable for its actions.

I have already explained - multiple times - that I'm pro-welfare. If you want apologism for "pure" libertarianism, then perhaps you should ask a dyed-in-the-wool libertarian instead of me. And appeal to normalcy again - loaded question. Not cool.

I'm sorry, I should have said "otherwise" instead of "normally." I didn't think carefully about my choice of words.

You've said you are "pro-welfare" many times. And I'm trying to get a sense for what "pro-welfare" means to you, and what your view is on other spheres of economic policy than government handouts to private citizens: like trust-busting, regulation of externalities, artificial restraints on the financial sector, and so on.

But if you claim that the "iron law of the oligarchy" somehow always causes corruption, then why do you question my assertion that there is a need for greater competition?

I see him questioning the idea that the assertion is practical, much as you might think it impractical if Stas said that communism should be run by incorruptible men who didn't allow a national Party to become the new upper class. Sure, in principle, that would be better than the alternative in his worldview, but can it really be done?

That's an absurd comparison. It's a given - and seems to be the consensus among us - that centralization of power leads to corruption. Yet, I'm being told that it is "impractical" to increase competition, while some kind of ephemeral, undefined form of command economy is to be preferred, because the powers that be would resist increasing competition - as if they wouldn't resist a massive revamp of the entire socio-economic order! What nonsense.

I don't think a command economy would work well at all. They never have. I can't imagine one that would. But I don't think you can fix the bugs in capitalist market economies by "increasing competition" any more than you can fix the bugs in command economies by picking better dictators.

A more competitive market is better than a less competitive market, all else being equal. But how do you make a market permanently competitive? How do you prevent polyopolies from melting together into oligopolies and monopolies?

As far as I can see, you need a large, complicated network of regulation... and many of the pieces of that network can be attacked as "bad for competition." Some of the things you need to prevent are competition, they're just toxic competition: one player trying to get the better of another by tipping over the game board, or rewriting the rules. Real economic entities compete with each other this way all the time, vying to see who can bribe officials the most effectively, or who can leverage their existing market share the best, or things like that.

The things it takes to prevent that can't be summed up as "increasing competition," even if the net effect is a huge increase in healthy competition.

Or do you consider increases in 'healthy' competition to be pro-competitive, even when they bar other forms of competition which are otherwise legal and theoretically non-coercive? I wouldn't be surprised if you do, at this point.

Trying to increase competition by 'freeing up' markets does not necessarily work in the long run- it can even strengthen the oligarchy by removing social elements that might resist its decisions.

Remember that the system of social checks and balances in historical societies extends outside the market: there are groups with forms of power that cannot easily be expressed in terms of dollar signs. If I were you and I wanted to live in a healthy society, I would not lightly cast away those checks and balances.

Are you ascribing to me a position that I do not hold? It certainly seems that way from where I'm sitting.

I'm sorry. I keep confusing you with all the other people I've known who said many of the same things. It's sloppy and stupid on my part.

What bugs me is that I so rarely meet a self-identifying economic libertarian who is aware of and opposed to the existence of economic tyranny. Many of them prefer to deny that the problem can exist at all. So you wind up as sort of a black swan in my mental universe.

Hence the sloppiness and stupidity.

To wrap this up: I acknowledge libertarianism as a legitimate descendant of 19th century liberalism, which is itself a legitimate descendant of the 18th century Enlightenment. But libertarianism has gone down a troubling path in recent years, and is in danger of becoming one of the black sheep of the family, as communism became one in the 20th century. This is because (like actual implemented forms of 20th century communism) many libertarians have forgotten one of the great Enlightenment lessons: the need to decentralize power in society, to avoid tyranny.

Libertarians have forgotten no such thing. I don't know were you're getting your assessment of their views from, but it's certainly not libertarians themselves. But I acknowledge that you recognize that decentralization is needed in a healthy society. And to that end, increased competition is a key means.

Please try to remember I have to deal with American politics a lot. A lot of the self-identified libertarians I deal with are complete idiots when it comes to this kind of abstract political thought. The idea that economic tyranny can be a problem like religious or military tyranny simply does not occur to them. When it's suggested, they hotly deny it, often in the same terms you use to criticize use of the phrase "economic coercion."

This has warped by thought process when libertarianism comes up.

[K. A. Pital]

Internet access is a fixed cost for most users. There is no (significant) incremental cost to redistributing chunks to other users.

Exactly.

Furthermore the torrent enforcement mechanism of throttling down bandwidth to users who don't upload has no direct equivalent in the world of real finite goods

Torrents have a throttling down mechanism, but say, open source projects have none. Yes, you'd have to invent something like that, but if the path from designing something to material manufacture of something is shortened to almost zero, that task would be a bit easier because the field of control will most likely lie in the digital transfer area, just like it does with torrents and open source. No material barriers, only informational ones. Information will become almost equivalent to material goods, since it would be the only thing required for their immediate production.

The situation is less serious for digital goods due to near-zero marginal cost of production, but for tangible goods this would just be theft (in fact this is why industry lobbyists can so easily equate copyright infringement with theft).

Primitivity of material production is the only thing which differentiates "design" and "digital goods" from "tangible goods". I actually agree with you here, hence why I said the only thing why any of this matters is because Earth's productive system is ridiculously primitive and fixed costs in material production play an enormous role.

Even post-scarcity economics is fairly pointless to debate, much less post-Singularity economics. Economics is dismal at predicting the behaviour of the real socities we're actually living in. Mix a significant amount of futurism there and the knock-on effects of technologies like nano-assemblers become impossible to predict. All we can say with certainty is that the world would be radically different from the way it is now, and concepts for post-scarcity society do not have much bearing on the tangible political and economic challenges of today.

Once upon a time, I'm inclined to agree. Except for one thing - without trying to create a motivation for the future world to be better, how would it be better? Why is it pointless to debate a possible future economic order - call it "post-Singularity", if you like? By virtue of lack of knowledge about it? Shouldn't we then perhaps concentrate on gaining that knowledge? I don't subscribe to the idea that the event horizon of a technological revolution - even a very large one - is an absolute lack of knowledge of consequences.

[Lord Zentei]

Except that's not the reality if you have a situation where there are more prospective customers than resources. Your ideal is irrelevant to reality.

I never said that humanistic approach fixes scarcity. It simply acknowledges it.

It doesn't strive to minimize it either. Regardless, my point stands: if you believe that centralization is bad, then obviously you want to decentralize the decision making process, and you achieve that with more competition, not less. And if you acknowledge the inevitability of scarcity, then you're not really solving anything on that particular front which the market also fails to solve.

Going by this line of reasoning, all human competition is coercion. Nonetheless, even we grant your example that is still not the same as saying that it is "coercion" to require that people work for their pay. You might just as easily say that the worker is "coercing" the employer into giving him money, or else he'll walk away, causing him economic damage. It's just asinine.

It is not asinine - in case the workers have greater leverage (e.g. via unions), they actually can coerce the capitalist into giving them benefits or greater pay he doesn't want to give them, else they will run his business into the fucking ground. To deny that these are coercive actions is to deny reality. Most of the times, however, the individual worker has a much lower tolerance for economic damage. Economic damage to a large enterprise is neglible when they don't hire an indian worker. For the indian worker, this non-hiring can mean malnourishment. To say that all are "equally free and uncoerced" is to obfuscate the truth. Yes, the company suffers an equal volume of economic loss if it chooses to refuse or hire a worker - it loses all of his potential productivity, just as he loses the wage. However, the company is much larger and more stress-tolerant than the worker. The point about unequal leverage permeating all of economy and almost always influencing economic transactions (since rarely do two equal leverage agents meet) is not some sort of dastardly accusation but a statement of fact.

If the labour union seeks to become a monopolist in selling labour, it obviously becomes more powerful than any single seller. That's not kosher, since then it becomes no different from the monopolistic company: i.e. repressive. But if you're arguing in favour of collective bargaining in the general sense, I can't say that I ever opposed that.

And no, not all of competition is coercion. However, a competition where one competitor can dictate something to the other, where the consequence of competition is a greater influence of the winner against the loser, is inherently coercive. When runners run a 100 meter line, the winner of the run cannot force any other sportsman to do his bidding. If a runner could dictate other runners his conditions under some threat that would make other runners follow his orders, then running would also constitute coercion.

All collaboration with mutual benefit implies that each must be able to dictate to the other. That's the essence of compromise: we can't all get what we want. There is no system of humanism which negates this fact.

And in a sense, you are right. Competition instead of cooperation is an idea coercive at heart. It is a social-darwinist idea. Extrapolating our "runner" example, we enter the primeval world, where the fittest surive. The strongest male will dictate others what to do in a tribe, because he "won" (or has to win multiple times - like a repeating test) a competition of strength. Physical fitness competition thus becomes the source of a power structure and a system of coercion.

Um, my point was that competition is NOT coercive. Moreover, social-darwinism is an example of the stolen concept fallacy at its heart: social-darwinists lifted the idea from evolutionary biology which in turn was itself inspired by Malthus and other economists. It's not coercive to go with the producer who is best at producing. In fact, it would be coercive to require that we NOT go with the best producer, because obviously the rational decision would be to do so.

And who decides what is important? Besides, you are mistaken: non-luxury goods have low elasticity of demand - it's simply wrong to claim that market economics doesn't distinguish these things.

So what? You said that low elasticity is not a problem. The distinction is purely academic unless you're actually going the last step and saying "Because of so-and-so, we have to give this a greater priority". As to who decides - I think most humans agree staving off malnourishment is more important than overfeeding an already fat human.

Elasticity already influences the decision making process. As for your point, obviously most people would agree that it is better to feed a starving person than an already fat one (other things being equal). But that observation alone doesn't provide us with a consistent, emergent process.

Complete bullshit. Torrent users PAY MONEY for premium service, otherwise they take non-premium service with ADVERTISEMENTS which are paid for WITH MONEY.

Uh... You got to be crazy if you think torrent users pay for some sort of "premium service" without ads. You must be confusing that with HTTP download and FTP download file-exchange services like Rapidshare. Those have nothing to do with torrents. People also don't pay any money for a great many open source projects. Information - that is, the very thing that constitutes value in the sector - is exchanged freely between all participants.

Someone pays for it, even if the users do not. If you use advertisements, the someone who is paying money is the one providing said ads. Who expects people to work for free? Also, you still need infrastructure and energy for the internet to function.

Incidentally, I'd love to see people download food, medicine, clothing and housing across the internet.

[K. A. Pital]

It doesn't strive to minimize it either. Regardless, my point stands: if you believe that centralization is bad, then obviously you want to decentralize the decision making process, and you achieve that with more competition, not less. And if you acknowledge the inevitability of scarcity, then you're not really solving anything on that particular front which the market also fails to solve.

I never said I am "solving" something. I am merely treating humans like humans, not like some sort of cashbots whose worth depends entirely on how much money he has. Every human deserves to get a shot at medical treatment. Just like every human deserves not to starve. These are not economic axioms; these are moral postulates. Economics is a tool used to achieve social welfare and nothing more. It is not a system which justifies itself.

If the labour union seeks to become a monopolist in selling labour, it obviously becomes more powerful than any single seller. That's not kosher, since then it becomes no different from the monopolistic company: i.e. repressive. But if you're arguing in favour of collective bargaining in the general sense, I can't say that I ever opposed that.

I am not arguing pro or contra collective bargaining. I am explaining how an individual in a non-collective bargain is coerced by economic conditions. Just like a union, if it becomes more powerful than the capitalist company it deals with, can actually coerce this company. You said that this is "ridiculous" to imply coercion. I see coercion in both cases.

All collaboration with mutual benefit implies that each must be able to dictate to the other. That's the essence of compromise: we can't all get what we want. There is no system of humanism which negates this fact.

Competition as above ("sell your workforce/your factory/your property for X or we bankrupt you because we can") is coercive at heart. It simply not humanistic and has nothing to do with humanism at all.

Um, my point was that competition is NOT coercive. Moreover, social-darwinism is an example of the stolen concept fallacy at its heart: social-darwinists lifted the idea from evolutionary biology which in turn was itself inspired by Malthus and other economists. It's not coercive to go with the producer who is best at producing. In fact, it would be coercive to require that we NOT go with the best producer, because obviously the rational decision would be to do so.

The question then begs, what if the size of the producer and the economy of scale he achieved allows him to bankrupt those who are smaller? That of course ends up with individuals, too. Is he merely acting in an efficient fashion that deserves no moral examination? Are the efficiencies gained from him acting so worth the negative consequences of such acts? And please, size can be a factor of its own. The producer may not be the best, but he might be already big, and so a slight hint at a price war can ruin his smaller competitor, who might have achieved better quality, but simply failed to win in a price war and died. Your system treats anything as done purely by economic means as the rational result. It is simply a self-justifying statement then.

Elasticity already influences the decision making process. As for your point, obviously most people would agree that it is better to feed a starving person than an already fat one (other things being equal). But that observation alone doesn't provide us with a consistent, emergent process.

Human biology is more or less consistent. It is not emergent (it has already emerged) and the long term of evolutionary changes is pretty much making sure that you can't do with more than 1800 calories (am I right?) unless you want to injure the human. That observation is more "consistent" than any market situation, any fluctuation and any other criterion you might find, it won't change overnight and it won't suddenly disappear. You can always determine calorie requirements to avoid starvation. The wage level and price levels are determined entirely by the market conditions.

Someone pays for it, even if the users do not. If you use advertisements, the someone who is paying money is the one providing said ads. Who expects people to work for free? Also, you still need infrastructure and energy for the internet to function. Incidentally, I'd love to see people download food, medicine, clothing and housing across the internet.

*laughs* I'd love to see the day when you could download an open-source food, medicne, clothing and housing from the internet with very little fixed cost, much like you can do with fluoride-cleaned tap water across the First and Second World nations. That would be a truly bright day for humanity. As for "someone pays" - I already said that if we take the sector and consider the value that is exchanged - information - it is exchanged freely. Starkly so with open source. Now, of course, it is a very limited application model. Fixed costs of material production, et cetera. I already agreed with all that in response to Starglider. I still think it is a worthwhile field of study. It actually allows to see how people can freely exchange value - not something value-less, but actual value - without any monetary system arising with the limited scope of the exchange.

And finally - some open source programs do not have imbued ads. The process of creation is a fundamentally non-monetary one. The labourers are not paid with money for this exact bit of labour they did. The users are not required to pay money for receiving the information (which is the value created by the labourer). The user and the labourer are in fact often one and the same, and they receive compensation in a non-monetary fashion, by having access to the pool of information created by other users-producers. It is a non-monetary reward.

Yes, this sector (and the internet, and torrents, and god knows what) are being commercialized, and people are inveting of ways to make money there. That does not mean the fundamental principle is "monetary", it means people can make money in any additional small niche when the free service has not been good enough. In fact, fluoride-sanitized tap water is excellent and perfectly drinkable in First World nations. And yet, bottled water a 100 times more expensive is sold and it is a huge market. What the fuck, might you ask? That's the fuck. Sometimes the market makes useless shit where none is really required.

[Starglider]

Torrents have a throttling down mechanism, but say, open source projects have none.

Open source projects are equivalent to public art; programmers do it for the satisfaction of the craft, to say 'look at the awesome stuff I can make' and to bask in the glow of positive feedback from users. This is possible because of the zero marginal production costs. Furthermore the material cost of the majority of open source equipment is almost zero; the contributors already have the equipment and internet access. The set of people prepared to make and give away free physical things, that they had to invest time in each unit products and pay for the materials cost of, is extremely small. Also this only works for things that people enjoy producing so much that they will do it for free; the majority of things a society needs are not so fun to produce.

Yes, you'd have to invent something like that, but if the path from designing something to material manufacture of something is shortened to almost zero, that task would be a bit easier because the field of control will most likely lie in the digital transfer area, just like it does with torrents and open source. No material barriers, only informational ones. Information will become almost equivalent to material goods, since it would be the only thing required for their immediate production.

No, it would not. I find this highly amusing actually, because you sound exactly like the blue-sky dreamers from the late Extropians community - except that they're most anarcho-libertarians. Energy and raw materials are very real input costs which have to be solved independently of manufacturing. Real labour would still be required for construction, scarcity of land (and in many regions, water) will still be a problem and of course all of the services required by modern society still require compensated labour. I am a techno-optimist in that I believe that a sufficient amount of technological progress will solve literally every problem, but 3D printing on its own is nowhere near 'a sufficient amount' to enable a post-scarcity society.

the only thing why any of this matters is because Earth's productive system is ridiculously primitive

Compared to what? Compared to the last ten thousand years since the invention of civilisation, it's quite stunningly advanced.

Why is it pointless to debate a possible future economic order - call it "post-Singularity", if you like? By virtue of lack of knowledge about it?

A technical distinction;

* Post-scarcity economics requires technology sufficient to remove the need for human labour in the vast majority of activities including manual production and extractive industries, plus renewable energy sources and recycling technology sufficient to make resource constraints unimportant for most human activity. This involves things like nano-assemblers, advanced biotechnology ('gasoline fruit' etc) and robots that can cost-effectively replace most manual labor down (down to the minimum wage level).

* Regardless of the massive amount of bullshit spewed about 'The Singularity' in recent years, the original definition (by Vernor Vinge) is the only really meaningful one; the development of significantly transhuman intelligence (with open-ended improvement from there). It is a predictive event horizon because we literally cannot predict either the motivations or the solutions to problems that non-human intelligences will come up with. Sapient, self-enhancing artificial intelligence is by far the most likely way we will cross this threshold.

Shouldn't we then perhaps concentrate on gaining that knowledge? I don't subscribe to the idea that the event horizon of a technological revolution - even a very large one - is an absolute lack of knowledge of consequences.

As I said, the general failure of economics to produce useful predictive frameworks for our contemporary socities, despite decades of work and reams of data to work from, is not encouraging. Predicting the future is vastly harder. In the post-scarcity case, you can speculate with some hope of success, but only in the most general terms. Take the case of trying to predict what the impact of the Internet would be back in 1960, when we had prototypes of the relevant technology but of low sophistication and vast cost. Only a handful of futurists could begin to see the consequences of computerised information networks, and even they were groping in the dark. Maybe we're a little better at futurism now, but the ultimate impact of nanotechnology is even greater than that of microprocessors. The skeptic brigade (as represented here by Broomstick et al ) will be all up your ass for merely stating the possible technologies, for economics you are concerned with second, third and n-th order effects. It is wildly optimistic to think that you can reliably characterise those.

As for a genuinely post-Singularity scenario, i.e. the total obsolence of humans in the face of transhuman AI, economics is way, way down the list of things you should be worried about.

[K. A. Pital]

This is possible because of the zero marginal production costs. Furthermore the material cost of the majority of open source equipment is almost zero; the contributors already have the equipment and internet access. The set of people prepared to make and give away free physical things, that they had to invest time in each unit products and pay for the materials cost of, is extremely small. Also this only works for things that people enjoy producing so much that they will do it for free; the majority of things a society needs are not so fun to produce.

I agree. And you have to drive marginal production costs to almost zero to get something like that running with material goods. I wouldn't even add anything to the above, because I fully agree. What it shows is that when marginal production costs are close to zero, creativity alone is a potent enough mechanism for people to go and create value and then freely give it away. As for some shit not being fun - you know, some people find crazy fun in things I'd never think about. Of course, routine labour is probably going to die out, but stuff like being a dentist - I met a person who genuinely loved drilling the teeth of other people. Not because of any monetary reward.

No, it would not. I find this highly amusing actually, because you sound exactly like the blue-sky dreamers from the late Extropians community - except that they're most anarcho-libertarians. Energy and raw materials are very real input costs which have to be solved independently of manufacturing. Real labour would still be required for construction, scarcity of land (and in many regions, water) will still be a problem and of course all of the services required by modern society still require compensated labour. I am a techno-optimist in that I believe that a sufficient amount of technological progress will solve literally every problem, but 3D printing on its own is nowhere near 'a sufficient amount' to enable a post-scarcity society.

Energy and raw materials are real input costs for a primitive system that makes so "much" energy that it's short of a Kardashev I, and is about the same level of "progressive" in producing artificial materials. Primitivity is the issue. The energy output of today is enormous compared to the past. I am not speaking about 3D printing, that's obviously not enough and it is yet another technology too primitive to seriously consider a revolution. I'm not a blue sky dreamer, I think that this is not going to happen in my day and age and maybe take much more than that.

Compared to what? Compared to the last ten thousand years since the invention of civilisation, it's quite stunningly advanced.

Compared to what it can be.

A technical distinction;
* Post-scarcity economics requires technology sufficient to remove the need for human labour in the vast majority of activities including manual production and extractive industries, plus renewable energy sources and recycling technology sufficient to make resource constraints unimportant for most human activity. This involves things like nano-assemblers, advanced biotechnology ('gasoline fruit' etc) and robots that can cost-effectively replace most manual labor down (down to the minimum wage level).
* Regardless of the massive amount of bullshit spewed about 'The Singularity' in recent years, the original definition (by Vernor Vinge) is the only really meaningful one; the development of significantly transhuman intelligence (with open-ended improvement from there). It is a predictive event horizon because we literally cannot predict either the motivations or the solutions to problems that non-human intelligences will come up with. Sapient, self-enhancing artificial intelligence is by far the most likely way we will cross this threshold.

Oh, I see. You think that predicting the patterns of advanced AI behavior is impossible, ergo, useless. I disagree. Humans will build the inhuman intelligence, why shouldn't they try to get some clues on its possible development? On the rest, I agree, duh.

As I said, the general failure of economics to produce useful predictive frameworks for our contemporary socities, despite decades of work and reams of data to work from, is not encouraging.

I understand. But that means there's a place to work in, not that you just have to stop learning and trying to model stuff. I mean, first rockets had crappy rates of failure, really crappy ones

Take the case of trying to predict what the impact of the Internet would be back in 1960, when we had prototypes of the relevant technology but of low sophistication and vast cost. Only a handful of futurists could begin to see the consequences of computerised information networks, and even they were groping in the dark.

And yet, there were people who wrote about internet analogues in fiction. Often they didn't even have special education to understand the system. This means human heuristic shit is not that fucking bad.

Maybe we're a little better at futurism now, but the ultimate impact of nanotechnology is even greater than that of microprocessors.

I agree that nano is a huge frontier. I think that it is just one step among many, though, and if we really want it to have a positive impact that we so envision, we should also work with other parts of the technobiosphere, e.g. power generation methods, etc. Otherwise the introduction of one revolutionary technology will be constrained by lack of progress in other areas, which can cause an unwanted result - the technology will transform society in a different fashion that it would, if say, energy was abundant.

[Starglider]

Compared to what? Compared to the last ten thousand years since the invention of civilisation, it's quite stunningly advanced.

Compared to what it can be.

Convince Broomstick and get back to me. You are reinforcing the point though that techno-utopianism doesn't have much bearing on the political and economic problems of today, other than maybe 'spend more on research'.

Humans will build the inhuman intelligence, why shouldn't they try to get some clues on its possible development?

Various researchers are trying to do so, an effort I have personally and financially supported as much as I can, but this work is mostly logic, computer science, psychology, maths and perhaps a little philosophy. Economics as such is not really relevant (unless you really want to put decision theory under microeconomics).

Oh, I see. You think that predicting the patterns of advanced AI behavior is impossible, ergo, useless. I disagree.

I have devoted my life to this problem (commercial excursions are solely to generate necessary funding) and I am frankly vastly better qualified to do so than you. And yes, I am in full agreement with the SIAI on this point, which is that predicting the exact actions of transhuman intelligences is futile, and that predicting motivations is only easy for the 'trivial cases' i.e. destruction of humanity as a threat / competitor. The only way to 'predict' AGI behavior is in fact to constrain it by positive engineering effort, and unfortunately this is also extremely difficult due to the numerous open-ended failure modes self-modification implies. While I am in general happy to discuss these issues I will not do so further in this thread, as it would be a complete hijack from the subject of contemporary economics.

As I said, the general failure of economics to produce useful predictive frameworks for our contemporary socities, despite decades of work and reams of data to work from, is not encouraging.

I understand. But that means there's a place to work in, not that you just have to stop learning and trying to model stuff. I mean, first rockets had crappy rates of failure, really crappy ones

Fine, I will clarify. I am not qualified to criticise economic theories on technical grounds - so this is a layman's opinion - but I think the majority of the field is trapped in pointless ideological camps and are actively resisting the use of real empirical tools that are now available. In that regard they seem quite like the parts of psychology that cling to pseudoscientific holistic theories, rather than accepting the march of neuroscience and evolutionary psychology (a group fortunately now being hunted to extinction). I have a lot of respect for economists such as Steven Keen who are committed to producing detailed computer models that treat the economies as a complex system and do actual real experiments. Obviously calibrating these models to match reality is a mammoth task, but it is something that can be reduced to detail and chipped away at. By contrast traditional economic theory consisting of a set of principles pulled out of someone's ass, sprinkled with a few simple equations, fitted to some hand-picked massaged statistics, and then tossed into the political arena to be used as a justification for the policy of the week.

And yet, there were people who wrote about internet analogues in fiction. Often they didn't even have special education to understand the system. This means human heuristic shit is not that fucking bad.

Your notion of 'not bad' is pathetic, not to mention schizophrenic considering that you just trashed all of human industrial advancement as 'hopelessly primitive'. A tiny minority managed to get a few very broad facts somewhat correct, but frankly they were just lucky. This is not nearly enough predictive power to do anything useful (something perhaps you would have more appreciation of if you attended any futurist conferences ). Efforts like this, while still primitive, are at least a start towards something much more useful.

I agree that nano is a huge frontier. I think that it is just one step among many, though, and if we really want it to have a positive impact that we so envision,

Fine, but if you think the best way to create communist utopia (tm) is technological progress, then you should be focusing on supporting that. Is this where you are allocating your effort? If you are, then to some extent I'm surprised you even bother with contemporary political-economic debate. I know when I visit N&P on SDN, it's just for amusement and occasionally a compulsion to prick the bubbles of the more annoying nanny-state fanatics.