Libertarian Thread #2: We Shall Never Die!

For those posters here that never grasped the difference between capitalism and our current system or who want to paint our current system as capitalism in order to confuse the first group:

Agreed, most people don't realize that we actually have corporatism in the States not capitalism. 

manofmystery wrote: For those posters here that never grasped the difference between capitalism and our current system or who want to paint our current system as capitalism in order to confuse the first group:

 

-Starts with an opinion backed by no facts. Not that it can't be defended, but starting with a bold statement and backing it with no facts whatsoever does not an effective proposition make.
-Point 1: Well, duh. Everyone who has taken high-school economics should know that. Then again, we have an entire political system based on screwing that up, but that is neither here nor there.
-Point 2: That's only correct following Chicago economics. It's wrong because people are not rational. In theory, David Koch (has a chemical engineering degree from MIT) should produce 100,000 times as much as me. Somehow, I doubt he could replace the four engineers in our department (when I worked for him). We see CEOs earn tens of millions of dollars despite being ineffectual because they are shielded from the market, which should not be possible in a rationalist economic model.
-Point 3: My head may implode. He first suggests that the market wasn't totally free, so capitalism wasn't to blame. This is equivalent to saying that the dam didn't break because of the water because some of the water went over the dam. Typical response from a rationalist economist, and completely silly. He's absolutely right that government policy really screwed the pooch (I still don't understand how people defend subsidizing mortgages with a longer life than the asset). However, rational people would never have taken the risks which occurred even in the presence of government intervention. His laying of blame is moot: the economic model on which he bases his response suggests that the crisis could not have happened at all, which makes it pretty useless for analyzing the cause of the crisis.

*Sigh*. Ideologues.

Gamemako wrote: manofmystery wrote: For those posters here that never grasped the difference between capitalism and our current system or who want to paint our current system as capitalism in order to confuse the first group:   -Starts with an opinion backed by no facts. Not that it can't be defended, but starting with a bold statement and backing it with no facts whatsoever does not an effective proposition make. -Point 1: Well, duh. Everyone who has taken high-school economics should know that. Then again, we have an entire political system based on screwing that up, but that is neither here nor there. -Point 2: That's only correct following Chicago economics. It's wrong because people are not rational. In theory, David Koch (has a chemical engineering degree from MIT) should produce 100,000 times as much as me. Somehow, I doubt he could replace the four engineers in our department (when I worked for him). We see CEOs earn tens of millions of dollars despite being ineffectual because they are shielded from the market, which should not be possible in a rationalist economic model. -Point 3: My head may implode. He first suggests that the market wasn't totally free, so capitalism wasn't to blame. This is equivalent to saying that the dam didn't break because of the water because some of the water went over the dam. Typical response from a rationalist economist, and completely silly. He's absolutely right that government policy really screwed the pooch (I still don't understand how people defend subsidizing mortgages with a longer life than the asset). However, rational people would never have taken the risks which occurred even in the presence of government intervention. His laying of blame is moot: the economic model on which he bases his response suggests that the crisis could not have happened at all, which makes it pretty useless for analyzing the cause of the crisis. *Sigh*. Ideologues.

It's a 3:30 video. He's not submitting this to the American Economic Review. Know the audience when you make a video.

-Point 1: Yeah  I can't disagree with you there.

-Point 2: I hear a lot of people throw that around, but I've never really seen much showing people to be irrational that doesn't suffer from a critical error in recognizing subjective evaluations. I don't necessarily disagree about your point though, but I think it points to government interference itself rather than a failure of a rather fundamental assumption of most modern economic / game theoretic thought.

-Point 3: To me it's like saying that Nuclear Power fails because a nuclear plant built without cooling rods leads to disaster. It's hard to indite capitalism when capitalism didn't even exist to cause the problem. Entrepreneurs making large systematic errors and companies falling into moral hazards have been quite common place and are well explained in the boom part of the business cycle. I know nothing about this guy so I'm not defending his model of the situation of course.

Equality 7-2521 wrote: It's a 3:30 video. He's not submitting this to the American Economic Review. Know the audience when you make a video.

Still, you'd hope he'd at least drop some kind of fact to help his cause.

Equality 7-2521 wrote: -Point 2: I hear a lot of people throw that around, but I've never really seen much showing people to be irrational that doesn't suffer from a critical error in recognizing subjective evaluations. I don't necessarily disagree about your point though, but I think it points to government interference itself rather than a failure of a rather fundamental assumption of most modern economic / game theoretic thought.

Classic example is that Americans (but not Chinese) would rather take nothing than take an unfair amount. That is clearly irrational, as the game is fixed so that you get nothing or something, and people will take nothing. There's also this funny experiment where people were convinced to value $20 at $40, where bidding should have stopped at a number lower than $20 due to an associated risk. Neither of these involve subjective valuation at all: a dollar is a dollar. They are purely errors in rational economic thought. There are quite a few gaping holes in the assumption of rationality, most notably the notion that the resources exist to make rational decisions. People use heuristics rather than calculations and are subject to horrendous emotional biases (some behavioral economists have found that economic decisions involve almost no directed processing but rather are almost exclusively emotional).

Equality 7-2521 wrote: -Point 3: To me it's like saying that Nuclear Power fails because a nuclear plant built without cooling rods leads to disaster. It's hard to indite capitalism when capitalism didn't even exist to cause the problem. Entrepreneurs making large systematic errors and companies falling into moral hazards have been quite common place and are well explained in the boom part of the business cycle. I know nothing about this guy so I'm not defending his model of the situation of course.

Again, government intervention certainly didn't help, but someone at JPMorgan thought repackaging these just-plain-stupid loans in this manner was a good idea. No matter how you slice it, someone (or rather, a lot of someones) made a critical economic decision that was so mind-bogglingly stupid that it makes my head spin. People believed, out of some abundance of insanity, that the housing bubble would continue to expand, like the tulip bubble would never burst. Rational markets should correct this, perfectly determining the risk and proper market exposure to the risks, but they do not. Instead, it's some manager's "gut feeling" turning the gears. It's always funny to see the stock market go up and down in huge swings, as though the net value of all companies was increasing or decreasing by 5% per day.


Edited by Gamemako - January 21 2012 at 10:37

stonebeard wrote: http://www.reddit.com/r/occupywallstreet/comments/nbtp6/the_budget_explained_in_simple_english/c37vt0m Counter-arguments to this kind of thing, guys? Seems to me like a lot of the sentiments here make some sense. For example, it would seem to follow that austerity measures benefit the upper class and put the burden on lower and middle class. Maybe just read through and off some libertarian/Austrian economist rebuttals if you wish. If this Keynesian, Federal Reserve setup we have now is not a proper way toward economic prosperity, then what would the radical libertarian, even anarchist, suppose be the best way to have a robust economy with technological and cultural progress?

I'm not even really sure what the argument the poster is trying to make. He seems to just be mocking the idea that inflation exists and/or thinking that accounting sheets can somehow solve fundamental problems of scarcity. I didn't read through all that many posts. Am I missing the poster you're referencing? I agree that a household budget analogy ignores certain key factors, but it's ultimately not useless. The responders seem to be missing the point that most austerity measures are actually insignificant.

I support the idea. I don't see a way of justifying an inherently fraudulent practice. 

'The Second Myth is that Capitalism generates an unfair distribution of mnmnmn I assume he says wealth' Myth nay I say and thrice nay.  Course it does. 

akamaisondufromage wrote: 'The Second Myth is that Capitalism generates an unfair distribution of mnmnmn I assume he says wealth' Myth nay I say and thrice nay.  Course it does.

Can you name a system that doesn't or present a cogent definition of "unfair"?

Equality 7-2521 wrote: akamaisondufromage wrote: 'The Second Myth is that Capitalism generates an unfair distribution of mnmnmn I assume he says wealth' Myth nay I say and thrice nay.  Course it does.  Can you name a system that doesn't or present a cogent definition of "unfair"?