oh come on, it's an honest question. not sure why you have to be obtuse about the fact that china's economy is leading the world. i was simply inquiring what the austrian school of thought has to say about that.


and yes, including all of the shit you mention, how does china maintain such a robust economy while subjugating the majority of its people AND completely manipulating not only its own economy but every other economy on the planet.

well, it's all cool and dandy... in la-la-land. In real world, one guy makes, wine, one makes beer, one makes cheese, and there are one or more guys who will wait until they produce all those delicious things and come with a big stick, steal all the production, rape their daughters and enslave everybody to continue producing. It's called story of the world since Lucy (the Australopithecus afarensis not Lucille Ball!) until now (and the millenniums to come). In order to avoid that, you need some kind of protection, whether it's from some kind of government or private. In La-la-land, private could be an option because they're oh so good and heartfelt no problem would arise, but in real world the guy who produces wine will try to destroy the guy who produces beer so they will eat only cheese and wine. It's called capitalism 101, but it really came from ancient times with different names and political systems.

On top of that, not a single DECENT economist would defend an absolute free trade market. And besides reality, there's a technical explanation: absolute free trade is only possible when the products are scarce and mensurable (like you said). However, when you add the variable of services, there's a loss of balance since... how do you value work time in terms of cheese, beer and wine? There's a solution to this, though: as long as the services demand doesn't surpass what the whole market produces and the market stays on a limited size, the system will be stable. In general, that should work, specially when you have adjust mechanisms based on sustainability and future production.

But... then we get the intangibles. Let's say that in your system there were 5 producers of each product, so each producer decides to "add value" with a nice packaging, branding, advertising, etc. The product is EXACTLY the same, only that now it costs 3 or 4 times more. So... where is that 75% of "ghost" value?

Let me explain it with another easy to understand example: The value of the Internet business amounts to trillions of dollars. Now, let's say someone pulls the plug of the Internet tomorrow and Internet is shut down. There would be entire countries collapsing and the biggest crisis ever seen in history, right? The funny thing is that, in reality, if you look around, you didn't lose anything. The cows are there, the grapes are there, teh barley is there. In real value terms, you are not richer or poorer. Yet you're facing a crisis that may end your society, the world as you knew it and even your life.

The point is that there wasn't a single time or place in history where absolutely free market existed other than isolated villages in ancient times. At most, there were some RELATIVELY FREE markets. Nowadays it is BEYOND an utopia. For a single reason: who do you think will protect you, regulate laws, build infrastructure, look out for development, etc. The guy that makes beer? Will he build roads? will he build a dam? will he look for the cheese guy not taking out the winery? Unrealistic, huh? And so... how do you think all this "superior entity" is maintained? With good wishes? The cheese, wine and beer guys will abandon their production to build a dam which they don't have a fucking idea how to build?

Seriously, I know these ideas may sound like original or cool but they aren't new at all, if you know a little of Malatesta, Gramsci, Bakunin or even Saint Simon you would have seen them in one shape or another. Plus, I've noticed how you did concentrate on the New Deal I mentioned (twisting it) but you avoided everything else. And it's for a simple reason: what you're saying, as good, bad, wrong or right as it might be, is an absolute impossible in real world and in this times (or any time to come). In fact, more or less what you're proposing is called Anarcho-Primitivism: not by theory itself, but for the only possible results to this model: A "Waldenesque" lifestyle :2 cents:

An entire economy as a free market, not only hasn't ever existed, it never will.... not in America, not anywhere in the world. Now you can have a free market, within a market... that can be found all over the place.

But... they are not bigger, better, or more productive than those without regulations/control/intervention.

The economy CAN be tinkered with, and HAS been tinkered with for hundreds of years, and it has worked and it has solved problems.

Gov intervention isn't here to solve problems... it's here to help, and it has helped, many times over, many ways.




Aye, it's a bit longer than 50 years.. that's the biggest cover up in history then. Hahaha, dot com bubble was 100% corporate greed...




You need to study your Internet history... Gov created it, built it, funded it, expanded it, forced it to expand, forced it into high speed.... so the corps could make firefox, etc, etc, etc... without the Gov, none of that would be in use.

Without all this intervention, funding, pushing... you wouldn't be doing what you are today. You hate, what they provided to you... and you think a free market would have built it, when it wasn't... funny.


The free market is fake, bullshit, not real, never has been, never will be... a hand ALWAYS plays the market, if not the gov, then super corps.

We wouldn't need regs/intervention IF people did respect others, didn't commit fraud, didn't scam, didn't create new ways to screw people over for money, etc...

If greed wasn't a factor, the world would be heaven, and most crashes wouldn't have happened.


Could you list, 1 time in history, where the Gov regulated/intervened, on something, out of the blue-thin air, for no reason? IE: It's what they do, so they just do it..... Most if not all of what we have, is a result of corporate greed.... you're hating the wrong group of people. The Gov will ALWAYS regulate where it sees problems, that is it's actual job, to protect us, not only from others, but from ourselves as well - that IS the job of the Gov.....

I agree that it hasn't. There have been periods in history that came close. There was the Icelandic Free State. There was a period in Irish history that came close to Anarcho-capitalism. During the bronze age there were cities in the Indus valley that were extremely advanced for their time and had drainage systems, multistory brick buildings etc and operated without what we would now call a government or taxes.

I am however curious about how you are so certain that "it never will". If you look at things from a purely utilitarian point then a pure free market system is the most efficient way to run things. The work of for example David Friedman is very interesting to read in that regard.
If you look at things from an ethical point of view than it is the only fair way to run things. For more info: Hans-Hermann Hoppe (argumentation ethics), Walter Block, Murray Rothbard (natural rights based theory), Frank Van Dun (argumentation ethics), Stephan Kinsella (estoppel),...

Like sperbonzo already pointed out; you always have unintended consequences. You may fix one problem, but you end up creating tons of new ones.

Intentions don't matter. Intervening in the economy, e ven with good intentions, will still cause unforeseeable problems.

Mises himself in 'Socialism' about central planned economies:
The impracticability of Socialism is the result of intellectual, not moral, incapacity. . . . Even angels, if they were endowed only with human reason, could not form a socialistic community.

There's no conspiracy-theory-type 'coverup'. Let me illustrate what I was saying with another example:

2 years ago, the people living in the EU were told they had to show some solidarity with Ireland. A couple of months ago they were told to show solidarity with Greece or Greece would default.

The Greek state has been borrowing money for a very long time (just like all modern states do). Greece borrowed money to cover its expenses. Greece than borrowed more money to pay back its previous loans (including interest). As their accumulated debt is over 170% of their GDP, it's impossible for them to pay back that money with tax euros.

Who gave out loans to the Greek state? Banks, all kinds of different funds etc. They even kept giving Greece loans when it was obvious to them that Greece would be unable to repay those loans. Eventually the situation became that bad that no one wanted to give Greece anymore loans.

At that point politicians and bankers screamed: "The market failed! No one wants to buy Greek bonds! no one wants to give Greece any new loans!".

Did the market fail? Of course not. The market reacted the way it should. If no one is willing to pay to buy Greek bonds, that is the market giving you information that those bonds are worthless. If no one is willing to give out new loans to Greece, that is the market giving you information that Greece is unlikely to pay back its loans.

What happened? The EU decide to set up a special emergency fund. All other EU countries now borrow money (at an interest rate based on their own rating) from the same banks that gave out loans to Greece when it was already obvious that Greece would not be able to pay them back. Those countries then lend that money to Greece (at a different interest rate). Greece then uses that money to pay off the banks. All those EU countries now have to use taxpayer money to pay back its loans to those banks (+ interest).

So in essence what happened is that a couple of banks acted irresponsibly and gave out loans that it would not have been able to give out in a free market (because that would have meant the end of those banks). When the borrower was unable to pay back its loans, the EU then essentially made every member country borrow money from those same banks so Greece could pay back tot he same banks.

The EU emergency fund didn't put "new money into the markets". It took money out of the financial system and then put it back into the same financial system, but with the promise to pay back a little extra. Where will that little extra come from? Taxation.

And now that it has become obvious that 2 other member states (Spain and Italy) will not be able to repay their debts, they are doing basically the same thing all over, but this time its the ECB that will be giving out the new loans. The ECB announced that it will start printing extra euros to buy Italian and Spanish bonds (effectively inflating the money supply).


We don't have the technology we have today thanks to the gov, but despite of the gov.


Ah, the invisible hand. Yes, that would be that 'price mechanism' I described.

If you define 'greed' as wanting more than you have now than every human being is driven by greed.

People have bread to eat because the baker is driven by 'greed'. The baker doesn't get up early in the morning to bake bread out of the goodness of his heart. No, he bakes bread, so he can sell it and use that money to buy goods and services he desires.

And yes, crimes exist and will always exist. Where there a need for security services, the market will provide it.

Yes, there are people and groups of people who want to steal, loot, pillage. Yes, there are corporation that want to wipe out there competition. Yes, there are scammers etc...

But who does the gov call when they want to regulate the banking business? Bankers. Who does the gov call on when they want to regulate industry x? Experts from that industry.

I urge you to take a look at the work of for example Butler Shaffer. In his "In Restraint of Trade: The Business Campaign Against Competition" (I'll see if I can dig up a pdf) he does a great job of exposing tons of government regulations that were lobbied for by existing member of certain industries with the aim of restricting access to the market and wiping out new competitors.

- Most of that stellar growth has already proven to be false. Most economists estimate that the GDB statistics provided by the Chinese gov are off by 50%. The World Bank published a report saying that the Chinese numbers were exaggerated by at least 40%.
- If your per capita GDB is very low than any small increase will look like a huge increase in GDB percentage wise.
- There have been modest reforms in China and those would account for the real growth.

If the case of China tells us anything, then it's that its reforms did not go far enough.

Of course crime exists. Protection is a service like any others so the market would provide it. Check "Enterprise of Law" by Bruce Benson, "the Boundaries Of Order" by Buttler Shafer, "The Private Production of Defense" by Hans Hoppe or David Friedman's articles on "the machinery Of Freedom" for an example of competing protection agencies in the icelandic Freestate.

ad hominem argument :)

1. As Say's Law shows there can never be a systematic overproduction in the economy.
2. Labor is a scarce resource just like any other and the Law of supply and demand therefor applies to it.

Value is subjective. It's the buyer that decides what value a product has. If a product is priced at $50 and a potential customer decides not to buy that product then that customer valued his $50 more than that product.

If a customer can chose between a normal toothbrush and a pink toothbrush that is more expensive and the customer picks the pink one than the customer obviously valued the pink toothbrush higher than the normal one even though they both can be used to perform the exact same function.

Value is subjective not objective so there's no such thing a "Ghost value".

The fact that certain things are digital or stored digitally doesn't make them less real. When someone pays money to watch a video over the internet, he is paying for a real service.

When people pay money to take part in a webinar, then they are paying for a real service.

When people use the internet to communicate, they actually communicate with other people in the real world.

When 2 people in "the real world (where cows live and grapes grow)" use the internet to do business, then they affect each other in the real world.

If you'd "pull the plug" you wouldn't shut of some virtual world that isn't part of the real world. You'd be destroying a tool that people in "the real world" use... jsut like telephones, smoke signals, handwritten letters etc.

How do you think that "superior entity" called that state is maintained? How do you think that "superior entity" called that state is run?

I've read some of those, but not all. The problem is that most of their ideas are based on flawaed economic theory.

I focussed on the New Deal because that was a good example to show how gov intervention causes problems. I also picked it because these days a lot of people still believe that the New Deal somehow ended the great Depression, even though most of them are unable to explain what exactly the New Deal was (other than 'it was something FDR did'). and because these days some people are calling for a new New Deal.

Absolutely not. Of all the economists and philosophers I've mentioned in this thread, none can be classified within that school of thought.

If you want to find out where my personal preferences lie... start within the Rothbardian tradition :)

Greed will make it keep from happening... as long as greed is part of humanity, it will never happen. And if we had no greed, most of the systems, rules, regs, govs, etc we have in place wouldn't be needed.


And as I pointed out, history has proven many times over that not tinkering, regulating, etc that greed will continue to control things and screw everyone much worse.



I don't see how this relates to our economic growth after the depression, ie: intervention.

Sometimes when they yell the sky is falling, they act... other times they don't, in both cases sometimes it's good and other times is bad, ignoring things though - has never solved problems, it only grows them.


Or you could say, we wouldn't have the technology today if we didn't have the gov.


And not always done by governments...


Then why try to redefine the word greed to something it isn't?

Greed is when 1/3 of your Countries wealth is stolen, because of pure corp greed, backed by a lack of intervention.


Well, I would hope they turn to industry experts and ask questions... doing it blindly, as if they should know the workings of every industry, is pure silly.


I think we've drifted off here.... I don't disagree that intervention causes problems, however I equally don't ignore the fact that sometimes it does work, very well at that - and I also understand that ignoring problems, creates more of them, which has proof all over.

It is not an absolute, thinking or even attempting to prove that it is, is why Austrian Economics is flawed.

i hear ya, and agree. it's common knowledge that the west does not have hard #s on china and china does cook the books.

nevertheless. :winkwink: your comment reinforces my curiousity, i wonder what most austrian economists have to say about china

while there's no denying china is an economic powerhouse and it is verified they have 3 trillion cash reserves, i happen to think it is all teetering on the brink of either an uprising (which are currently sweeping the globe) and/or a huge economic dump due to all the manhandling of their economy in a communist society. china can't be the only economy on the planet that is not unhealthy.

triple negative sentence at the end there, ftw

enjoy it!

just snoopin abit, came across this-----------------


"I discovered Austrian economics and LvMI in 1989. Here my impressions of the forecasting record of the Austro-Misesian camp since:

"Late 1980s ? Japan?s property and equity bubbles were classic ABCT, yet Austrians were notably silent. Some of this can be attributed to the small number of Austrians at the time. Joe Salerno gave a speech about the Japan bubble at a LvMI conference in Toronto in 1999 (see here). Unfortunately this was well after the fact.

"Late 1990s, early 2000s ? Austrians were mostly quiet about the tech/dot-com bubble. There were exceptions among academics (Christopher Mayer, George Reisman, Guido Hulsmann, Sean Corrigan) as well as practitioners (Jim Grant, Tony Deden). I remember discussions with David Tice during the early 2000s about how Austrians were missing a golden opportunity to stick their necks out on the forecasting block regarding the tech bubble.

"2002?2007 ? Austrians hit a monster home run with regard to the Greenspan response to the tech bust, the GSEs, housing bubble, credit bubble, and gold. This is when LRC took off, amplifying any credibility by getting it right. Btw, the Fed-lite GMU/Koch/Cato camp largely missed these bubbles, a major forecasting black eye.

"Today ? We have more "Austrian" forecasters than ever. Is China a bubble? The supposedly Austrian-leaning Jim Rogers, Peter Schiff, Jim Puplava, and Adrian Day say "no." Left-leaning Jim Chanos says "yes." I tend to agree with Chanos. So what happens to the credibility of Austrian economics if the China bubble bursts? Will the fault lie in the theory or those applying it?
http://www.campaignforliberty.com/article.php?view=1257

50 Austrian Wizards! :thumbsup

This is interesting.

Human are what they are. You can't change that.

And as I've tried to point out several times: Gov is made up out of humans, not all knowing angels. Governments are made up out of humans who make mistakes just alike any other human. Governments are made up out of humans who are greedy just like any other human.

The difference between gov intervention and the free market is that, in the case of gov intervention, the mistakes made by the people who make up the gov affect the whole population.

Here we've arrived at an essential difference between the Austrian school and 'mainstream' economics. Most interventionists base their theories on empiric research. They consider economics to be an empirical science.

According to an empiricist it is impossible to know something. (Even though they pretend they do). An empiricist formulates hypotheses and then goes on to test and retest those hypotheses. At the end of his research the empiricist concludes that his hypothesis was confirmed in for example 9 out of 10 tests or 10 out of 10 tests etc.

So in essence what an empirical economist does is to formulate hypotheses and then try and measure as much about the economy as possible to test if this data confirms or denies his hypotheses.

He then goes on to construct nice models he can use to predict how his 'tinkering' with the economy would turn out.

The Austrian school totally rejects this method. Why?
- It is possible to know something. If I state that all objects that are completely blue can't at the same time be completely yellow then you know this to be true. It's simple logic.
- When dealing with the economy, you are dealing with human individuals who are all different.

The empirical scientific method is useful when applied to the natural sciences like physics or chemistry. It is perfectly possible to isolate a chemical element and then for example heat up a certain amount of that element and measure at what temperature it burns or melts or vaporizes... You can conduct controlled experiments because you can conduct your test on a certain amount of that element and then compare your results to another amount of that same element.

You can't do this with the economy. You can't just put a 1000 people in a box and tell them "go play free market" and then put the same 1000 people in another box and say "go play central planned economy" and then compare the results. You are dealing here with individuals who are all different, who all respond to their environment differently. The mere act of observing them will already alter their behavior.

(btw: Funny thing is that events in history that could be considered as coming even close to a controlled experiment (for example: North vs South Korea. Similar genetic background, similar geography, different amounts of gov intervention.) never favor central planning)

According to the Austrian School you can't use historical events to prove your theories or hypotheses are correct. You can merely analyze events and use them to illustrate certain principles.

Then how does the Austrian School approach economics?

The Austrian school uses an axiomatic-deductive method. This means that you start with an axiom, something that you know to be true and you use a known method (logic) to deduct things from that axiom.

If your starting point is true and you didn't make any logical errors deducting then what you deducted from that axiom is also true.

Mises used the axiom of human action as his starting point.

All humans act. (To act as defined as "to act with a purpose". Getting up in the morning would be acting. Opening a bottle of beer would be acting. etc).
It is impossible to disprove that people act because by trying to do so you would be acting therefor disproving what you set out to do.

Let's take an example with 2 individuals: A and B. A and B both have all kinds of goals.
A wants to own a ball.
B wants to own a ball.

A wants to own a yellow ball.
B wants to own a red ball.

A owns a red ball.
B owns a yellow ball.

They both have 2 goals. 1 of their goals (owning a ball) has already been accomplished.

Logic dictates that they both can achieve a more satisfying state by trading their balls. If A gives his red ball to B in exchange for B's yellow ball then both of them will have accomplished 2 of their goals instead of 1 of their goals.

If you prevent a and B from trading than you prevent them from achieving a more satisfying state of affairs.

etc etc

Using pure logic the Austrian economists are able to deduct and prove pricing theories, the law of supply and demand, the law of comparative advantage etc. and the fact that a pure free market is the most optimal system.


It is an example of how gov intervention prevents a problem from occurring (a couple of irresponsible banks going bankrupt) by doing something that causes bigger problems down the road. They keep repeating that same process and thus increase the severity of the problem.

That is essentially what the gov has been doing. Ignoring the fact that some corporations, banks etc actually did things that undermined their stability. In a free market the irresponsible go bankrupt. Thanks to gov intervention the irresponsible get bailed out at the expense of those who acted responsibly.

[QUOTE]Or you could say, we wouldn't have the technology today if we didn't have the gov.[QUOTE]
see empirical vs axiomatic-deductive.


Smith used his invisible hand' as a metaphor. He said that if no one intervenes you get the best possible outcome, as if some all knowing entity intervened.

Why have those corps been able to do what they do? Because of gov intervention. Big corporation hate the free market. John D Rockefeller considered "competition a sin". that's why he liked gov intervention because that way they were able to block small competitors that produced better products at lower prices.

So do you really expect those greedy experts who a couple of minutes ago still used to work for a big corp and who will most likely be going back to working for big corps in the same industry to do a good job at protecting the public against the greed of those big corps?


The difference between an Austrian and a monetarist/Keynesian/neoliberal/interventionist is that the Austrian accepts that it is impossible to know everything about the economy. You can know certain things, you can deduct certain laws. Those laws can help you understand things, but you'll never be able to understand the whole economy. The economy is organic. It constantly grows, changes, moves,... The interventionist thinks he can "master economics in college". The interventionists thinks he can create neat models and predict the outcome of his actions.

Well, even though we don't have accurate data on the Chinese situation and the data the Chinese gov gave has been shown to be exaggerated, we can still see a lot of growth there and a lot of potential for growth. Which is not surprising given where they came from.

The myth about China is that it's "recent" (1978 and on) growth is somehow thanks to central planning. The reason for this myth is a simple mixup between correlation and causation. Yes, China has a lot of gov intervention and yes china's economy is growing, but one does not cause the other. If it rains in LA, than that does not mean the mayor of LA made it rain :)

If you look at it from an empirical point of view than the link between the deregulations and the growth are much more likely. If I'm not mistaken the Chinese gov had Milton Friedman (not Austrian, but pseudo-free-market Chicago School) over for tea back in the 70s and 80s and they implemented some of his advice.

If you look at it from an Austrian/praxeological point of view than yes of course: less restriction will lead to higher growth.

Personally I have not closely studied the situation in China (and all of its specifics) and I'm not ware of any Austrian publication about the current situation in China so I can't give you a more in depth analysis of their situation.

All I can say is that (like Robert Murphy recently wrote) understanding Austrian economics does not give you the ability to predict the future. It does not give you the ability to predict how much the price of x will fall and how many people in sector Y will be fired and on what date market Z will collapse.

It does however tell you what the effects of certain measures will be. If the ECB announces that it will start printing new euros to buy Spanish and Italian bonds then we know that increasing or inflating the money supply will diminish the value of the euros that are already in circulation. It's the Law of supply and demand. Logic and maths then tells us that the people who will be hurt most by that measure are the poor. The Cantillon-effect (Cantillon, proto-Austrian) tells us there will be a shift in wealth towards the point were the money was injected (gov, banks and the major corporations).

Hey there u-bob.... will you hit me up via email or skype please? I have some things to talk with you about.



.:-)

Exactly... which is why we will always have various types of intervention.

That works the same way when entire industries push the market how they want. Intervention happens, no matter what. A fact Austrian Economists can't seem to grasp.


They reject proven theories because they aren't able to prove their own theories, and when you ignore greed, you ignore logic, because greed will make that object yellow, every time.



Economics uses math... every economic system is setup on our math systems, the same exact rules, it is impossible to make up your own rules, or will fail... every system is connected together, trying to separate them, is not logical.



As I've said, some intervention is bad... such as N. Korea, but it's not like S. Korea has had zero intervention, actually they had shit tons..

I didn't say use history to prove a theory. But ignoring history is a bad when it can be looked at and seen that when no regulation/intervention happened, the problems did not go away, they grew.



The entire system itself, the system that manages it all... is also responsible for intervention, from functions conflicting to human error, another factor they ignore.

And this is why they aren't accepted.... a free market is NOT POSSIBLE without STRONG regulations, fraud protection, and intervention to keep it clean of greed & fraud. It is impossible to have a free market, unless all greed is gone, and as you said, that wont happen, so it is impossible to have a true free market, thus the Austrian theory is flawed.



And 100's did go bankrupt... and on that, intervention is what made it safe for them to go bankrupt, meaning peoples money was safe, investments safe, etc... because of gov regulations.

What they did was stop from having to cover every deposit the major banks had.... which would have cost us all a shit ton more than the bailout did. While I still don't agree with the bailouts... BoA failing alone would have cost us more in tax dollars than the bailout for them did, they had like 10x the amount to cover, let alone the other big boys.

Logic is not always the correct path...


Someone, a gov, a corp, etc... always, 100% always, intervenes.


That's a corporation, ie: greed, doing the intervention, not the Gov. Gov was the weapon, the person pulling the trigger is the guilty party.


Nope... but that's exactly why I think ignoring them and waiting for it to work out, totally fails... and has, many times over.


I don't think I've ever seen anyone or anything, ever claim they can or it can, know everything about the economy.

Just like your body, if you totally ignore it, it will fail - but before then the ride will be hell - it will be crazy for decades without any regulation. But if you maintain it, you intervene, you may make some mistakes along the way, but overall you'll improve yourself by maintaining yourself, thus you may still screw up and even fail, but the ride along the way wont be as bad , as it could have been.

If the economy is organic then it falls under the same rules as every organic thing on this planet... which means, no single path is the correct answer and it must be maintained or it will fail.

Fail here doesn't mean go out of business... it means the entire system fails, everything.

appreciated! :thumbsup

I'll email you in a bit.

(I'm traveling so I don't have icq etc on this laptop)

No, that's why "security" will always be an issue. And security is a service just like any other. Companies competing in a free market will deliver a better service than a monopoly holder.


That's the great thing about the free market: no monopolies.

To preempt a reply: A company that has a legit 100% market share does not have a monopoly.
Why not? Because other companies are still free to enter the market and compete.

When does a company have a monopoly? When it violates other people's property rights to exclude them from the market. That the original meaning of the word monopoly. Kings and governments used to sell monopoly rights to raise money. They sold special licenses (letters patent) that protected the holder from prosecution by the courts in their territory for certain crimes. (letters of marque sold or given to pirates are another example)

[QUOTE]They reject proven theories because they aren't able to prove their own theories, and when you ignore greed, you ignore logic, [QUOTE]
No, they show that the methods used by those interventionists are flawed.
The Austrian method is based on logic and the funny thing here is that most interventionists refuse to deal with Austrians based on that fact: the Austrians use of logic.

A couple of months ago when an Austrian, Thomas Dilorenzo, testified before some congressional committee, they even compared "using logic to derive economic laws" to religion. like, wtf?

ok, logical error? :)



The fact that someone uses maths does not guarantee that what he is saying is correct.
What interventionists claim to be able to do is predict the future using their models.


I never said S Korea didn't have any intervention, but if you compare it to N Korea then yes, it had less intervention. So you could see it as a comparison between more and less regulation.

I believe you already posted that there never was a free market. Then how can history show us that a free market didn't work?


What do you do when sponsor X stops paying? You stop sending them traffic.

What do you do when a new sponsor comes along? Immediately send them all of your traffic or do some research, evaluate their sites,...?

What do you do when your servers at hosting company Y are down all the time? Stick with them ore move to another host?

Which designer do you hire? The one you've heard only good things about or the one that has 25 drama threads on gfy?

If your friends got sick from eating at a new Chinese restaurant, do you go and try the food there yourself or do you pick another restaurant to have lunch?

If a girl cheats on you and you give her a second chance and she cheats on you again, do you blame the lack of gov regulation or kick her out?

The market is selfregulating.


Now that is the great thing about the Austrian method, about praxeology. It's completely value free. It holds up no matter what people's intentions are.


In a free market irresponsible behavior gets punished. Keeping your savings in the hands of a shady company or a company you know little about: risky. Depending on how much you know about the company one could even call it very risky. Keeping your savings in a very risky place: irresponsible.

Some of us learned that hard way when epass went under.


Entrepreneurship (see higer for definition) is what drives the economy. The price mechanism is the system gives constantly gives feedback.
Like I said, the economy consists out of individuals who constantly all make different decisions. There is no "conscious entity" directing everything.

Why does the baker bake bread? Because the gov told him to? Or because he wants to make money?

How does the baker know how many breads to bake? Because the gov told him to or because he bases his decision on experience (the amount of breads he sold the previous days or weeks), his understanding of his customers preferences, the fact that one of his competitors is one vacation etc?


Funny how easy it is for those corporations to use gov isn't it?


So putting them in a position of power is better?

If you want to end the corruption, you need to end what makes the corruption possible.


Exactly. And that is what gov intervention is: forcing a 'single path' onto all.

Gov intervention: plans by the few.
Free Market: plans by the many.

I'll throw in the Keynes/Hayek video again :):

Sent you an email reply. Give me a call or send me your number when you are settled.




.:)

Monopolies happen in free markets even more so without regulations.


The old term does not relate to today... a monopoly can form in a free market and it can squeeze out competition. The illegal drug economy is about as free of a market as you can get, and it has monopolies not granted by any gov.


As I've already pointed out and shown..... it's easy to analyze the wrong and even easier to ignore the benefits.


Exactly... they do not account for logical errors. Two functions crashing together would be a great example of this. It happens, it's not logical, it changes the rules when it happens.


I didn't say it did, but it is without question math is the entire system... I've seen all sides, even Austrians, make guesses at the future based on current events, I don't think I've ever seen anyone be correct, every time.

N. Korea is a very bad example of intervention... it doesn't compare at any level, in any aspect, in any way, it's not even part of our economies. I can't see the comparison between the two, at all.

I can see it between S. Korea and the rest of the world, were they have a stable, growing and overall doing well economy, filled with regulations and intervention.



Correct, we've never had an overall free market economy. That doesn't mean various markets within an economy aren't free. When phone companies started it was a free market, free of regulation. As they grew more corrupt, greed took over, regulation and intervention followed.



The what if game is stupid... like you knew which banks, insurance companies, were screwing everything up, it's not like they told you. The market does not self regulate or it wouldn't have been regulated.


Other than it ignores the actions people actually take.

Yeah, because people that had been with banks for 30 years had a clue they were doing shady business... It must be the persons fault they didn't read the internal emails and minutes of the board, etc to understand every aspect of a bank, while already doing trustworthy business with them for years.

So it's logical they should have lost everything, the market would have fixed it eh? Again, you expose a massive flaw in this way of thinking....




Those questions aren't relevant to what I said.



It's only one example of how a corporation can manipulate various markets for greed... they can do it without the Gov as well.



Money?




Gov intervention ONLY happens AFTER a single path has been laid out by a corporation. This free market you put your faith into, does not push out the greedy, it only empowers them to screw everyone over until the Fed steps in to stop it.

Where is the act, law, rule, etc that regulated something before a corporation did something?

Wow, a million people made predictions and one of them was right???

Amazing.

Image if there had been a "million + one" possible out comes, then everyone would
have been wrong.

In a free market a company can't get a monopoly by calling on the power of the state. (original meaning of the word)

In a free market a company can get a 100% market share if it provides the best product at the best price. Nothing wrong with that. In a free market however, other companies are still free to try and compete if they want. So if another company comes up with a better product or a cheaper way to produce that product then it is free to do so.

Pure monopolies (that exclude others by force) are a problem because if there's no competition, there's no incentive to produce better products at a lower cost.

Competition is an essential aspect of the free market. Therefor the problems associated with monopolies can't occur under free market conditions.


Try opening a "cocaine-shop" in your local street and see how fast the gov will shut you down. By making drugs illegal the gov per definition restricts the market. There is no free market in drugs.


Actually you didn't, but we'll agree to disagree on that because otherwise we'll keeping going back and forward.


Actually they do. And my reply pointed out your logical error.

Hans Hoppe has a couple of good introductions to praxeology. It's good reading on a hot summer evening :)


https://gfy.com/showpost.php?p=18344371&postcount=54

The comparison here: 2 similar people. 2 similar countries. similar natural resources. 2 different amount sof gov intervention. The one with the highest amount of intervention has the worst economy.


This is one of ways interventionists go wrong. Because they realize it's impossible to measure everything about the economy, they look at certain sectors and try to extrapolate things onto the economy as a whole.



It's all about risk management. In a free market you try to reduce risk.

There's no causal link between the 2.

Praxeology is value free. If a person burns down your house then you no longer have a house. It's not necessary or relevant to know the motives behind the arson to draw that conclusion.

In a free market the banks would have not been able to do what they did and get away with it. The banks were able to cover up what they were doing thanks to gov intervention. Under free market conditions banks wouldn't even been able to try what they did (and do) without going bankrupt.




[QUOTE]
Those questions aren't relevant to what I said.[QUOTE]
It's an example of how the market selfregulates.



[QUOTE]It's only one example of how a corporation can manipulate various markets for greed... they can do it without the Gov as well.[QUOTE]

So in your opinion the corps can manipulate both the market and the gov and your solution is more gov for them to manipulate?


Money is purely an intermediary medium of exchange allowing for an efficient devision of labor.

If you want to end the corruptions, you need to get rid of gov intervention.



Take a look at my examples of how corps made money by buying up farmland...

By definition, no state or fed has to claim you're a monopoly, at that, nobody claims you are until AFTER you are.

It already happens within pockets of free markets...


The market itself is free based, not restricted by regulations, safety standards, etc, etc, etc... it's as free of a market, free floating of regulations, as you can get in this country, and it still has pockets of power that fully control the market/price, etc... a monopoly, without any gov doing anything.


I can admit that you ignore the benefits, can you?



I didn't make a logical error, I showed you another example of where Austrians can't accept the facts of what actually happens in the markets. It's not all logical, functions to conflict, it creates illogical events... it can turn blue to yellow.


You even comparing the two is pure laughable... trying to make it sound like N.K. is an example of market intervention is pure silly and does not help your argument, if anything it's hurting it.



No... not at all. What they do is after corps for years or decades keep screwing people over and the free market doesn't fix it, they step in to fix it... waiting 10, 20 or 50 years for the free market to unscrew itself, is purely stupid. That's what normally happens, decades and decades of abuse, THEN regulation happens, after the free market failed to clean up the mess, before it was regulated!



In any market, every market, EVERYONE tries to reduce risk... which has zero to do with a person knowing if a company is screwing everyone over or not...


True... they are more the same thing rather than two different things.


That has nothing to do with market greed and the action taken by them that without question does change markets.


Hahaha... free markets in banks, what a joke. Know what free market banks get you? IOU's....... if you actually think an unregulated bank is a good idea then you have zero clue about history, what so ever, that proves this wrong a 1000x over.


The ability to manipulate happened before the first regulation ever came in.

This would be another factor Austrians ignore in their quest for a fake free market.




Corruption happens where no gov can be found.... the little pipe dream Austrians have is funny.


Not relevant, it was not regulation before an issue came up... regulation does not happen first.






No matter what, I will always think the Austrian economic theory is filled with flaws, like many other people. All you've done is prove to me is how much more flawed it is than I actually thought. Not that other economic theories are perfect either, but that's the point... they think they've got it all figured out, when in reality, we can find contradictions and flaws to their theories all day long. You just choose to ignore them, much like other economists ignore the flaws in the systems they use.

Are you seriously saying that selling illegal drugs is an example of the free market at work? Seriously?

North Korea's economy is totally centrally planned by the government. You are saying this is NOT an example of market intervention? Again, seriously?

Yes, WITHIN ITSELF it is, it 100% is... stop being so shortsighted.


Correct... thats social intervention by force, they have no market to regulate, they never had a free market start up, then get regulated, they did not setup rules that squash issues/problems related to corps/gov intervention, etc or create them within a market that the world economy actually operates on or even for themselves.

So, yeah.... seriously, not related.

The state maintains the conditions for capitalism.

Keeps wages low, fights Trade Unions, imports labor, promotes racism etc...

The State also does the things the market allows fails to do House, feed and health service, plus infrastructure roads etc...


Also state supplies massive welfare to big business in the form of military spending.


If any government was foolish enough to have a "free market" there would be a revolution at the first economic crisis....

It Keynes economics is a political act not an economic one....

The State protects Capitalism from the Capitalists - Those greedy motherfuckers would destroy everything for an extra busk

Economists are more corrupt than the mafia taking massive payoff from the financial sector and making government policy.

In a microcosm there are similarities, in that drug dealing is a business. But it's illegal and that changes everything.

...except making it illegal. If the production and distribution of "illegal" drugs were legal in the US these monopolies would not exist.

They are controlling the entire market! This is market intervention at it's most extreme.

You must read the Communist Manifesto to correct your definition of a Marxist.

Illegal drug markets is a form of anarchy, where murder, violence, and extortion rule. Free markets are not about anarchy, where the guy with the most guns win. The illegal drug trade is not a free market. In effect, it has it's own regulation, and governments, in the form of armed gangs that use violence to enforce their will.


I thought you said that there is no such thing as a free market, and there never has been. I agree with you on that, so this argument is erroneous.





Actually, in the case of the banking market, the federal government removed risk in the form of Fanny and Freddie, thus allowing banks to ignore risk.... Didn't that turn out well?



Actually, in history, banks, along with other businesses, have never had a "free market". Banks even less so. Even in the very first lending banks, there were regulations as to who could run them, and where. The governments always had a lot of regulation on banks., so there is no example of a free market bank.








.

No... it is still an example of a free market within itself, free of any regs... nobody says a drug must have X within it, meet X safety standards, sell for X amount, nobody is speculating on future supply, the entire system is free from what we have defined throughout this thread as various regs, manipulation and intervention of the actual market.


Other than they were here before it was illegal as well. Regs do not come before the monopoly, they come after the monopoly has happened and abuse has started.



Sure... if you want to believe it's market intervention, then have at it... of course they have no market to regulate, no part of what they've done is anything like any market intervention in the world or that is being discussed, but whatever.

Armed gangs do not force the costs, they do not speculate on the price, they do not cut supply so badly the market is fucked, they are no different the an evil corp willing to do cut anyones throat for a profit.... corps force the hand, no different than armed drug lords leading the drug race.



That's already been cleared up... I said we have markets within our economy that are free, even gave examples, one being when phone companies started it was a free market first, that then monopolized, then was regulated.

A free market economy, we do not have... like where nothing is regulated, touched, no rules, no greed that would mean we need those rules, etc.. where no regs ever happen, it's a pipe dream... an impossible dream.

Which is probably the #1 reason why Austrian economics fails. They fail to accept the truth, what they want we do not have, and never will, thus it's a failed theory from the start.



They never had any risk, it's all one bank acting as several banks.




When banks first started they were setup and ran by people with money, if you had the money to back the deal, you did the business. Even after gov's stepped in, areas of the world were still being backed by a single persons money, running as a bank, without regulation, for centuries. In the end, greed ended this and regulations/rules/laws had to be put in for the safety of the people. It was abused, first..... then regulated!

You sure about that?

This is from "The Myth of Natural Monopoly" by Thomas J. DiLorenzo

Source: http://mises.org/journals/rae/pdf/RAE9_2_3.pdf

And here is a bit more about monopolies from the Austrian School...

http://mises.org/daily/5274/100-Year...t-Standard-Oil

http://mises.org/daily/2694

AT&T would be a bit late, but let's go with it.

I don't see how this proves a myth of AT&T not being a monopoly... the fact that AT&T even happened is proof of a monopoly forming. It was the result of multiple corps evolving and combining and buying up others. Even before the patent expired, it had influence over the market, it had already restricted the market in many areas, it was the single provider for long distance, it was a monopoly simply by it's formation it grained the power to have this influence.


That was a great pdf, I really did enjoy it. Now, I do like how it jumps around, takes out little cuts for bits of history, to make it's points true. I also enjoyed the theories in it as well, like how they define market dominance as temporary assuming a gov doesn't grant a monopoly, however it fails to factor in a corporation already had enough power to lobby the state and local gov's so it could restrict the market, more. It wasn't like it wasn't trying in areas succeeding before hand in other ways, it just went up the scale as it grew, it didn't like competition, it had the power to stop it, so they did.

It started with greed first, and went up the chain to make it worse. All the gov did was make it worse in this case, which I never argued... I've said it works both ways, sometimes it's good and others it's bad. It's not a one way door, it's not "always bad" - market regs/restrictions, etc are sometimes needed.

That's why I say the Austrian mind set is flawed... they wont accept anything outside of what they define as to be true, which is exactly what they bitch about in other economic theories, yet do themselves, just in different ways.

You are talking about the company that INVENTED THE FUCKING TELEPHONE :1orglaugh

Of course they had the market cornered. Because IT DID NOT EXIST before they created it. Once their patent expired hundreds of companies started competing with them. Our government put the competitors out of business and basically made AT&T the monopoly everyone talks about...

AT&T was running 15 years before the patent expired. Before the patent expired they already had deals with cities/states directly. Once it expired and all the competition opened up, they simply started buying them up, expanding its power - which is exactly what happened. The were already able to control the market, prices, influence it, etc.. before the Gov came in. Once the gov stepped up with anti-trust action after at&t's abuse first, they both agreed to some stupid deal setup by at&t, over royalties/rights or some crap. The monopoly power was already formed.. your normal phone company didn't have that power, they did.

:1orglaugh:1orglaugh:1orglaugh:1orglaugh

Those statements right there, show that absolutely opposing world views that we have. You think that Governments are good things, meant to help. I believe that governments grow first out of the powerful dominating the weak through use of force, (Kings), and then morph in various ways, but always are being run by people that seek power, and have the now legal means to use force in order to make people comply. If their power is not limited initially, and then kept in check constantly, they will grow forever into you are back in King/Dictator mode again. ANY system that seeks to grow government power is, in my view, anti freedom.



.:2 cents:

This isn't my world view to oppose, this is the purpose of our government, it's real job. I'm not saying our Gov hasn't went way the hell overboard, because it has. So I agree with you, the Gov must be kept in check, it must be kept in balance - but so should corps abusing power that they clearly have.

Thinking the eco, business, corps, or a market, will simply work its issues out if everyone just let's it naturally happen is absurd for many reasons, before greed being the killing factor. I don't think any system is perfect, a balance between them all is needed.

And as you said... people need to keep the gov in check better as well, so that balance is kept. Hell, that's a great example of what happens when you ignore things and think they'll naturally fix themselves.