These people are our future

[Lyric]

My answer is above in bold. If the top 5% richest people, who own roughly 90% of the wealth, donated 50% of their wealth to charity, there would be no hunger, preventable diseases or suffering.

So you're telling me that money can buy food, health etc, and that creates happiness. Does money buy happiness or not?!

But they don't do it do they, so I feel it's pointless to posit what the system "can" theoretically do. It's a "free" market, so it doesn't do anything its individuals won't, and if they don't give a toss about their brethren born into poor families, nothing will happen. There is nothing stopping charity now, why would there be any more of it? There are known mechanism that work towards wealth condensation at the top, and studies that show the richest are the stingiest donors, maybe that's why they are the richest in the first place.

If one man gives away one metric ton of salt but has creates ten tons, and another gives away a gram when he only has two grams, the charity of the man who gave away a ton of salt is more beneficial to society. Period, percentage numbers are not relevant!

I don't think it requires much imagination to figure out that more is more. Could you give some mathematics or theory to back up your claim of 3500% greater profits under a free market economy? I was already being rather generous allowing for a gross 15% raise, which I think is still far too great a number.

We start with an island where everyone pulls 10 grams of salt from the ocean per year. A smart man invents a harvesting method that pulls 2,000 grams per year. He trades salt at one fish per ten grams of salt. Suddenly everyone who has a fish has 20 grams of salt per year, and the smart man has 1,000 grams left in his hut. Stop thinking of wealth as if no new wealth can be created. If you still think new wealth cannot enter the world, let's talk about that before the more complex issues.

You introduced the fishing as means for the other islanders not smart enough for salt gathering to trade for it.

Primitive people catch fish without nets. Some literally catch fish in their teeth, others use a sharp stick to spear them, others put poisons in shallow pools to stun the fish. Catfish are still caught with bare hands in the American south.

Better perhaps, but is it optimal? I can easily think of far better outcomes for the island, we're not arguing whether a free market economy is better than no economy at all, right?

Treating human beings like machines doesn't work. A system that tries to optimize production and distribution, as if humans are parts in a car, has always failed in the past because parts in a car do not have minds and emotions. A system that allows each part in the car to make their own decisions maximizes each part's enjoyment of life. Miraculously, as each part of the car works to better his own life (with restrictions against hurting other machine parts), the entire machine becomes faster and stronger (more salt is pulled from the ocean when everyone is free to keep their harvest).

When one person (or group of people) tries to tell all the other people what to do and direct (force) the people's actions the end result is that people feel controlled and unhappy.

One individual wielding the economic power of 1000 units against the 20 of the others, calling that guy king is not an overstatement. We've had governments since we came up with agriculture, and they've always been led by a small ruling elite. The way the wealthy or anyone else is prohibited from taking anything by force is commonly called laws and their enforcers, without those physical strength becomes the factor that determines prices.

Yes, free societies are not common. The United States two hundred years ago was a rare exception. The founders of the US tried to create a system that explicitly stopped the wealthy from forming a government that uses its power to make the wealthy richer at the common man's expense. The plan failed as each generation forgot what life was like in England and gradually were tricked into allowing regulations (determined by gov't/the wealthy) to degrade the quality of life and funnel money to the top. See my previous post on how regulations funnel money to the top.

A rich man is not a king if he cannot force anyone to do anything. He is only king when he is given the power of government force.

Personally I would add a whole number of other things on your list, including a right for healthcare and basic education, many of the rest I support can loosely be categorized under harming others. I do not consider maximizing the collective output of the system to be important itself, if means for a baseline standard of living are not guaranteed.

There is no way to guarantee anything for all the people unless it is literally free and limitless. Sunlight is not the same as health care or salt. If three men are on an island and and one stops working to get salt, who of them will "guarantee" that the lazy man gets salt? If one man wants to "guarantee" salt for the lazy or the crippled, who does he take it from? If we have laws against stealing no one is allowed to take salt from the man with 1,000 tons of salt or the man with one gram of salt. If we are only allowed to steal from the rich there is less incentive to become rich! If we are all allowed to steal from each other less salt is harvested and more weapons are manufactured instead and we have an arms race instead of a harvesting race. Harvesting races are much better for society.

Health care has to be provided by human work. It isn't infinite or free. We intuitively feel that we should all be happy and healthy, but making drugs and training doctors takes money; it is exactly like salt. Someone has to harvest it. If you let everyone keep their salt and trade it you get more salt and the poor have more salt too. Same for health care. If you let free men train themselves and develop drugs free from regulation and taxes, they create more and more doctors and drugs until they are virtually free.

Out of curiosity, what are your thoughts on the US constitution and the Bill of Rights, are those unnecessary?

They had the right idea -- to create a government that explicitly bans harming others or allowing the wealthy to gain control of the country and use government to make themselves richer with government force (regulations that favor their business).

[Lyric]

I just want to add just as Max said, we are currently in a mixed economy, not a free market. As far as I know this has been this way for the past 200 years, and the amount of government regulation over that time has steadily increased. I believe the US started as a free market, but other than that I am not sure there has been any other country in the modern world that has tried this. I'd love to see statistics on how the US did in its first years of existence but I'm betting this isn't the case.
"You're assuming that people who work for an "evil person" always have a choice. Working to support yourself and your family are not optional, and the job opportunities are not limitless, especially if you were born on the wrong end of the wealth spectrum."

You can work and support yourself and your family without working for someone else, or you can work for someone you support. I don't think this really needs to be explained. That's a choice they have. I don't believe you should work, sell or buy anything from someone you believe to be evil unless you are threatened with violence or imprisonment.

If three guys are on an island and one of them pulls a mountain of salt from the ocean, the other two men can either begin fishing and trade for salt or they can continue pulling their own salt from the ocean. They can also go and work in the mountain-of-salt man's one man factory, but working for the "evil" mountain-of-salt man is not forced on any of the three men.

You're confusing the situation with modern political rhetoric, and assuming that people are forced to go work for evil men. Free people only do what they choose to do, force is what we want to avoid in my Utopia. No one is forced to work for the salt factory.

[!Luck]

Lyric
"If they end up killing fish they would be harming other people by destroying the environment. That is illegal in my Utopia. The island can relate to any modern complexity"

Illegal implies there is a law, right? Isn't law a regulation? I guess I am bit confused about what we are arguing. I think that a free market is good, but requires some amount of regulation. The key word is some, cause, some here want a lot other want a little. But it seems to me you are advocating a 100% free market? Which means killing fish can't be illegal, there can't be any laws or by definition there are some regulation.

!luck

[Lyric]

Lyric
"If they end up killing fish they would be harming other people by destroying the environment. That is illegal in my Utopia. The island can relate to any modern complexity"

Illegal implies there is a law, right? Isn't law a regulation? I guess I am bit confused about what we are arguing. I think that a free market is good, but requires some amount of regulation. The key word is some, cause, some here want a lot other want a little. But it seems to me you are advocating a 100% free market? Which means killing fish can't be illegal, there can't be any laws or by definition there are some regulation.

!luck

Yes, laws against hurting each other, stealing, and polluting are regulations. I am not opposed to all regulations or laws. My goal is to keep people from hurting each other and also keep the wealthy from using government to become kings or consolidate power through force. Regulations would be aimed at only these goals and explicitly against government favoring one man over another.

[CoccoBill]

Exactly, we don't live in a free market today. So arguing that today we have a huge disparity between rich and poor and that its the free markets fault, makes no sense without logical evidence or citations from experts, neither of which you have yet to provide.

I've deliberately tried to avoid using "expert" citations, since it is trivial to find opinions for and against, I'd rather keep this discussion on a purely argumentative basis than a link war. Here are though a couple examples I found.

"As an example of wealth condensation, truck drivers who own their own trucks often make more money than those who do not, since the owner of a truck can escape the rent charged to drivers by owners (even taking into account maintenance and other costs). Hence, a truck driver who has wealth to begin with can afford to buy his own truck in order to make more money. A truck driver who does not own his own truck makes a lesser wage and is therefore stuck in a catch-22, unable to buy his own truck to increase his income."

"Savings from the upper-income groups tend to accumulate much faster than saving from the lower-income groups. Upper-income groups can save a significant portion of their incomes. On the other hand, lower-income groups barely make enough to cover their consumptions, hence only capable of saving a fraction of their incomes or even none. Assuming both groups earn the same yield rate on their savings, the return on upper-income groups’ savings are much greater than the lower-income groups’ savings because upper-income groups have a much larger base."

"The rich tend to provide their offspring with a better education, increasing their chances of achieving a high income. Furthermore, the wealthy often leave their offspring with a hefty inheritance, jump-starting the process of wealth condensation for the next generation."

Here's a reason why government intervention could be responsible for this disparity. If someone makes more than 100k, they are taxed about half their income if not more indirectly. This means that there's not really that much incentive to earn $300,000 or $500,000 because his extra work doesnt create much more wealth for himself. Could this be one reason?

Are you sure the effects of that are greater than that of wealth condensation?

In 2010 the U.S. income tax rate brackets for your examples went like this:

$100,000/yr: 28%, $72,000 net income
$300,000/yr: 33%, $201,000 net income
$500,000/yr: 35%, $325,000 net income

Hand up everyone who would rather earn $72k than $325k, that is, while your suggestion may arguably have some effect, I'm thinking this effect is very minor.

You are arguing that money = happiness. If you weren't, would you really want to take it from rich people? Would you give a flying fuck if someone had more money than you?

Money does not equal happiness. It can be argued that a certain threshold amount to cover basic necessities is often required, but studies also show that people in poor countries often have subjectively happier lives.

I don't personally really care if someone has more money, except in the sense that it angers me if some people swim in wealth while others suffer, if both of these are undeserved (IMO).

[CoccoBill]

Yes, laws against hurting each other, stealing, and polluting are regulations. I am not opposed to all regulations or laws. My goal is to keep people from hurting each other and also keep the wealthy from using government to become kings or consolidate power through force. Regulations would be aimed at only these goals and explicitly against government favoring one man over another.

Herein lies the paradox. So, in fact you're arguing for a "free" market that actually has in some ways more regulations than the currently in place in the US, for example environmental values I would say are in almost no ways enforced currently. Let's go back to the car analogy since they are always perfect. In your utopia, would it be illegal to a) produce cars that pollute, b) sell cars that pollute, c) buy cars that pollute or only d) drive cars that pollute? If only the last one, on top for the consumer having to figure out whether the car he's buying is safe for himself, he would also have to make sure it doesn't pollute, or he'd be breaking the law. This is optimal efficiency, or even sane on any level?

You agree that some laws and regulations are required, and they are only effective if they are enforced. You suggest that government should be privatized, only those wealthy enough can "hire" them and have their rights protected. This sounds like a terrible idea to me, and would only create a greater divide between the rich and the poor.

[IowaSkinsFan]

You suggest that government should be privatized, only those wealthy enough can "hire" them and have their rights protected.

Just correcting this: Some government activities should be privatized. These should be paid for if wanted to use, and if paid for they will get the benefits of the business, just like any other private transaction. Riding a train isn't a right in a free market.

[IowaSkinsFan]

Herein lies the paradox. So, in fact you're arguing for a "free" market that actually has in some ways more regulations than the currently in place in the US, for example environmental values I would say are in almost no ways enforced currently. Let's go back to the car analogy since they are always perfect. In your utopia, would it be illegal to a) produce cars that pollute, b) sell cars that pollute, c) buy cars that pollute or only d) drive cars that pollute? If only the last one, on top for the consumer having to figure out whether the car he's buying is safe for himself, he would also have to make sure it doesn't pollute, or he'd be breaking the law. This is optimal efficiency, or even sane on any level?

That's not a paradox. We believe some things should be regulated, and some shouldn't. It's very specific. Just because we refer to this belief as a free market... that doesn't limit our beliefs.

As far as your point goes, I find it to be a tough question. If you make cars that pollute illegal, I think you should make a,b,c and d illegal. And if you make them illegal, I suppose you have to have the government certify dealers of cars that they are zero emission.

"This is optimal efficiency, or even sane on any level?"

So now do you see why regulation sucks so much?

[!Luck]

Lyric, Quote "Yes, laws against hurting each other, stealing, and polluting are regulations. I am not opposed to all regulations or laws. My goal is to keep people from hurting each other and also keep the wealthy from using government to become kings or consolidate power through force. Regulations would be aimed at only these goals and explicitly against government favoring one man over another."

I don't think we truely disagree, it just that I try to have a more realistic approuch. I don't think we will gain anything more out of this conversation. It seems you want "some" regulations. But, as they say the devil is in the details. I think some things become IMPOSSIBLE like some (not total) consoldation of power in an open economy. Keep in mind, that I am actually for a loosely regulated economy. But, my personal philosophy has always been, never try to change the system that is broke, but exploit it until someone else fixes it. (This is partly due to the fact, is that I don't think I have the resources to enact any real change, if I am ever in position to actually change things, well, then I will have a lot of thinking to do)

Cause in the end, what good is arguing theory right now? I would love to debate healthcare? Is it a right, should it be a right? How much of healthcare should be right? How do we determine who lives or dies, those details are hyper interesting. Or even, should murder be illegal?

Or how do you define hurt in your " My goal is to keep people from hurting each other" sentence? Is it even definable? If I have an addication to killing and I feel horrible when I can't kill, aren't you by making killing illegal hurting me?

Contrived example, but I hope you see my point.

[IowaSkinsFan]

I think Lyric is simply referring to physical harm, not emotional.

[IowaSkinsFan]

"As an example of wealth condensation, truck drivers who own their own trucks often make more money than those who do not, since the owner of a truck can escape the rent charged to drivers by owners (even taking into account maintenance and other costs). Hence, a truck driver who has wealth to begin with can afford to buy his own truck in order to make more money. A truck driver who does not own his own truck makes a lesser wage and is therefore stuck in a catch-22, unable to buy his own truck to increase his income."

This is ignoring tons of factors. First, a person who owns his own truck will make more money but also take on much more risk. This isn't a useless trade off. Try working for yourself, it sucks ass. A person who doesn't own a truck can do the exact same thing, they can take out a loan to own a truck. But I suspect most people wouldn't want to take on that much risk.

[Lyric]

!Luck, we can agree to avoid emotional harm as well buy I don't think that's a great idea. I am thinking about physical or financial harm. We do agree on the goal; we font agree on the path to arrive at that goal. I think that all questions about health and money and human rights are most easily understood in a simple version of the world, and I think there is a lot of confusion about all of it because we try to think about complexities without understanding the basics.

If one man is alone in the world, does he have a "right" to anything? What about two men? Do they have innate "rights?" If so, who gave them their innate rights?

[!Luck]

We are talking about people, so it has to be more than 1. With two people they agree that each of them have certain rights that can never be infringed on. Society goes from there.

Who gave them their innate rights is a type of oxymoron statement. As they wouldn't be "innate" if they were given.

But that stuff aside. I think you see harm as a black or white type of action. How do you define physical harm? How do you define financial harm, before you introduce the concept of money?

You and I are on your beloved island. I like to run everyday at 5am. Problem is that this is a small island and you have extremely sensitive hearing. You also like to go to bed at Midnight and sleep til 8 AM. But my running at 5AM wakes you up cause it is loud. There is no way I can run at 5AM without causing you to wake. Is that harm? Do you have the right to tell me not to run that early? How do we decide? Even in a two person example, there is a lot of gray area. I need to run to stay healthy, to avoid physical harm to my body. You need to sleep, to avoid being sleep deprived and reduce your risk of injury during the day. Who's rights prevail?

I tried to make it a very simple example using the framework you set up.

!luck

[IowaSkinsFan]

How do you define financial harm, before you introduce the concept of money?

This is probably beside the point, but money is there whether your aware of it or not. Whenever someone exchanges 5 goats for two cows, they might as well of exchanged $200 for two cows or whatever the cows are worth. Money just makes it easier to make this transaction.

[CoccoBill]

That's not a paradox. We believe some things should be regulated, and some shouldn't. It's very specific. Just because we refer to this belief as a free market... that doesn't limit our beliefs.

As far as your point goes, I find it to be a tough question. If you make cars that pollute illegal, I think you should make a,b,c and d illegal. And if you make them illegal, I suppose you have to have the government certify dealers of cars that they are zero emission.

"This is optimal efficiency, or even sane on any level?"

So now do you see why regulation sucks so much?

Regulation sucks, is almost impossibly hard to do right without creating new problems elsewhere or having other unforeseen consequences. It's often completely impossible or nonviable to enforce sufficiently, and all of this costs money. Even still, as I think we are all agreeing on now more or less, it is necessary. A system where e.g. environmental values are regulated isn't a true free market, but regulation is necessary to enforce the values that are not automatically inherent in the system.

Also, if environmental values should be regulated, doesn't that mean that car safety should too?

This is ignoring tons of factors. First, a person who owns his own truck will make more money but also take on much more risk. This isn't a useless trade off. Try working for yourself, it sucks ass. A person who doesn't own a truck can do the exact same thing, they can take out a loan to own a truck. But I suspect most people wouldn't want to take on that much risk.

Of course, but having the option to take the risk gives him an advantage over the person who doesn't have that option at all (can't get credit or afford the payments) or has to take a considerably larger risk. The more money he has the smaller his risk. It is easier for the person with more money to gain even more of it.

[WillburForce]

Taking the cow example - you have 2 guys selling cows on a island, they both have one cow each and are the only ones on the island selling them.

One guy gets lucky and his cow is a freak and gives birth to 5 cows one season (sorry I'm a city boy, do cows have seasons??). The other guy just has his standard one calf.

The lucky guy decides to sell his cows at loss and the other guy can't sell his single calf. He has to sell it at a knockdown price to the lucky guy. He is now out of business and has no money.

Eventually this lucky guy uses his wealth and takes over the pig business and the chicken business and the wheat business on the island etc etc using underselling and finacial clout.

Surely there should be laws to protect against this kind of thing? Or should it just be left to the consumer to see the bigger picture?

[Lyric]

We are talking about people, so it has to be more than 1. With two people they agree that each of them have certain rights that can never be infringed on. Society goes from there.

Who gave them their innate rights is a type of oxymoron statement. As they wouldn't be "innate" if they were given.

But that stuff aside. I think you see harm as a black or white type of action. How do you define physical harm? How do you define financial harm, before you introduce the concept of money?

You and I are on your beloved island. I like to run everyday at 5am. Problem is that this is a small island and you have extremely sensitive hearing. You also like to go to bed at Midnight and sleep til 8 AM. But my running at 5AM wakes you up cause it is loud. There is no way I can run at 5AM without causing you to wake. Is that harm? Do you have the right to tell me not to run that early? How do we decide? Even in a two person example, there is a lot of gray area. I need to run to stay healthy, to avoid physical harm to my body. You need to sleep, to avoid being sleep deprived and reduce your risk of injury during the day. Who's rights prevail?

I tried to make it a very simple example using the framework you set up.

!luck

I like this a lot. The answer is that both of us have to agree on a solution or go to war. With three people we may ask the third for advice, and with more people we would set up a group to decide, and with a society we have courts of law. They all make their best judgment about what is harm and what is not. I agree there are gray areas, and courts of our peers are what decides a reasonable solution. However, the goal is the same -- to avoid allowing anyone to harm anyone else, enslave them, or steal from them.

[Lyric]

This is probably beside the point, but money is there whether your aware of it or not. Whenever someone exchanges 5 goats for two cows, they might as well of exchanged $200 for two cows or whatever the cows are worth. Money just makes it easier to make this transaction.

This is correct. Money is another word for "small chunks of wealth."

[Lyric]

Regulation sucks, is almost impossibly hard to do right without creating new problems elsewhere or having other unforeseen consequences. It's often completely impossible or nonviable to enforce sufficiently, and all of this costs money. Even still, as I think we are all agreeing on now more or less, it is necessary. A system where e.g. environmental values are regulated isn't a true free market, but regulation is necessary to enforce the values that are not automatically inherent in the system.

I agree. Regulation is needed, but as little as possible to allow what I personally believe are the goals of society -- the easiest and happiest and safest and longest life for all people on the island. Regulation is a necessary "evil" that should be very carefully allowed, because it involves force. Force should only be allowed when all parties agree that it is needed and wanted to better life on the island. If it is an island of strange people who are not like us, who don't care about pollution, they would agree that pollution is not regulated.

I think it is fairly obvious that we all share a desire to build good things instead of weapons, productive things instead of dealing with the neighbor's trash, etc.

Also, if environmental values should be regulated, doesn't that mean that car safety should too?

I think this is a step too far. We should only regulate things that cannot be generated by a completely free society, like military protection. Theoretically, pollution could be left to the courts -- you could sue your neighbor on the island for dumping waste on your portion of land, and class action suits could be brought against factories generating air pollution. With a good court system pollution could theoretically be controlled.


Of course, but having the option to take the risk gives him an advantage over the person who doesn't have that option at all (can't get credit or afford the payments) or has to take a considerably larger risk. The more money he has the smaller his risk. It is easier for the person with more money to gain even more of it.

As a poker player you should understand this point very clearly. Owning a truck involves risk. Should every $5k NL player give 50% of his money to the $10 NL player each year so that they can try their hand at $5k NL?

No; clearly the man who buys a truck has earned that money (hopefully without government aided consolidation) and has taken a risk -- investing in a truck to earn a higher profit per mile driven. He now has to insure the truck, change the oil, find a garage for it, etc. If the truck is destroyed by an accident he is out of work temporarily. As a worker he would instantly be put in a new truck and continue working. The worker has less risk and less potential for reward. This is similar to a small stakes grinder bleeding out a living deciding to move up in stakes and risk some of his bankroll. If the new truck works out he makes more money per hour, if not, he falls back into the small stakes grinder (truck driver working for The Man).

[Lyric]

Taking the cow example - you have 2 guys selling cows on a island, they both have one cow each and are the only ones on the island selling them.

One guy gets lucky and his cow is a freak and gives birth to 5 cows one season (sorry I'm a city boy, do cows have seasons??). The other guy just has his standard one calf.

The lucky guy decides to sell his cows at loss and the other guy can't sell his single calf. He has to sell it at a knockdown price to the lucky guy. He is now out of business and has no money.

Eventually this lucky guy uses his wealth and takes over the pig business and the chicken business and the wheat business on the island etc etc using underselling and finacial clout.

Surely there should be laws to protect against this kind of thing? Or should it just be left to the consumer to see the bigger picture?

Good consolidation of valid points! We have to reduce this to less people to understand it; let's try two guys. Both are pulling salt from the sea but one gets lucky and finds a huge pool of pre-made salt on his side of the island. He laughs as the other guy struggles to pull salt from the ocean. What does he do with the salt? It's too much to use. He has a lifetime supply. He decides to trade it with the other man, who happens to be better at making wine. He sits on his ass and eats one fish per day (salted) and has virtually free wine (because of his luck).

He continues to sit on his ass and do nothing. He trades salt for one fish and one bottle of wine per day (created by the other man). I agree that this seems unfair, but what is the alternative?

The unlucky man could begin to build weapons, but that was already banned. The two men agreed to avoid fighting and racing to build better weapons because they realized that was a bad idea for both of them. The unlucky man could sneak onto the other man's side of the island and steal salt, but they previously agreed to avoid stealing from each other as well.

The only option for the unlucky man is to continue exploring, working, and experimenting, hoping to find spices, new methods of salt creation, new preservation techniques, new medicines, new recreational drugs (wine, opium, weed, etc) that he can use to trade for the lucky man's salt pile.

This is good for both men. The unlucky guy will be working to find stuff that benefits him but will end up accidentally benefiting the lucky salt guy as well. If he discovers that drying and smoking female marijuana flowers produces euphoria and pain relief, he has created value for both of them when he begins to trade weed for salt.

[WillburForce]

thats kinda a diff scenario to the one I said.

Market strangulation doesn't benefit all parties.

Which is why I don't think a free market can be allowed. You must have restrictions to allow a "competitive" market to work.

[IowaSkinsFan]

thats kinda a diff scenario to the one I said.

Market strangulation doesn't benefit all parties.

Which is why I don't think a free market can be allowed. You must have restrictions to allow a "competitive" market to work.

I'd appreciate you explaining this more... what is market strangulation? Why must it be restricted, and what regulations would you need to improve it? Examples would help as well.

[WillburForce]

Market strangulation (there are a few defs of this I believe) involves suffocating the market. Lots of words for what I mean...

If you flood a market with a product, the said products value drops and large companies without restriction could pretty much have a free reign.

For instance (and this is a known ploy and legal I think at the moment), say you have a square in a small town in the UK. It has coffee shop that has been open for 100yrs. This square can only support 1x coffee shop. Starbucks opens 2x coffee shops in the square......now they are making a loss in both shops...but when the original shop inevitably goes out of business, they close 1 of the Starbucks and you have 1 x town square and 1 x Starbucks...

There is no reason for Starbucks to open 2 x shops other than to strangulate the coffee market in the town square and shut down the other one.

Or Supermarkets leading with a loss on say milk (first off the producers are normally the ones fronting the cost of this, but that's another matter), they keep this up for say 1 year. The local shop can't compete and decides to stop selling milk. The Supermarket has strangled/suffocated the milk market in that area......they then put up the price of milk again....etc etc

So a few regulations I can think of:
To not allow selling at loss for the purpose of closing down competition.
To not allow companies to saturate markets for long term gain.

And in free market you couldn't implement even these basic business restrictions.

These are just a few thoughts off the top of my head - I currently work in construction insurance brokering and we have huge restrictions. If we didn't it would just be a bloodbath with every brokers trying to fk over everyone else (which we do already ldo) at any cost.
The end result would be just one large brokerage (bit like a freezeout game of poker I guess). And then you don't have a competitive market and the consumer suffers as well as all the other brokers who lost their jobs in the bloodbath.

Ok I'm waffling...

[CoccoBill]

As a poker player you should understand this point very clearly. Owning a truck involves risk. Should every $5k NL player give 50% of his money to the $10 NL player each year so that they can try their hand at $5k NL?

I think this still is a caricature of what I'm suggesting, a more realistic one would be to ensure he can play on the lowest stakes, to at least be able to play, if poker in this case represents being part of the economy. The bulk of the "wealth transfer" that I support is from the very top to the very bottom, and I think progressive taxation is the most fair way I can think of to achieve this. Someone who already makes enough to make ends meet doesn't need any additional support from the society. I don't support pooling all money and dividing it equally, just that those who have much more than they can ever spend help out those who have nothing. I suppose just income taxation alone cannot even achieve this, since most of the wealth at the top doesn't come from salaries. I would probably make income tax progression curve a little less steep, and tax on capital gains higher. I'm sure even this isn't ideal, but some taxes are still required to support the system, as the regulators, enforces, courts etc. all cost money, even if you decide infrastructure should be privatized. Some form of taxation based on consumption of luxury goods and services might work, but I think that may be even more of a mess to manage.

Sure, having some lazyass wanker leech the system sucks, but IMO that sucks less than having the combination of people who genuinely are in circumstances where they can't get by without help, and others with qbzillions of money that they didn't deserve(*), rather buying their third airplane than helping those people out.

(*) "Deserve" in the sense that they either inherited it, abused the system or lucked out. I still don't agree that the movie industry being able to rack up millions because of some douche makes the person's compensation justified or deserved from any objective qualitative standpoint, it is just how the system works. The system itself is amoral, and in order to any morals of its participants to be exhibited would require them to act rationally, and have the system be impossible to be exploited, neither of which are the case. But, I digress.

No; clearly the man who buys a truck has earned that money (hopefully without government aided consolidation) and has taken a risk -- investing in a truck to earn a higher profit per mile driven. He now has to insure the truck, change the oil, find a garage for it, etc. If the truck is destroyed by an accident he is out of work temporarily. As a worker he would instantly be put in a new truck and continue working. The worker has less risk and less potential for reward. This is similar to a small stakes grinder bleeding out a living deciding to move up in stakes and risk some of his bankroll. If the new truck works out he makes more money per hour, if not, he falls back into the small stakes grinder (truck driver working for The Man).

You're absolutely right, but still all of this favors the one with more money to start with. It's far easier, faster and less risky to net $1000 in poker with a starting bankroll of $10000 than with $100.

BTW do you have other examples of regulation that cause wealth condensation apart from the drug example? I agree 100% with that, drugs should absolutely be either completely legal, or regulated by the government like alcohol and tobacco. Them being illegal is by far the worst option for everyone except the illegal drug trade.

[Numbr2intheWorld]

CoccoBill, I think I misunderstood what your view of what taxation would look like in your ideal government. I thought it was basically the way it was but from what I'm reading it now seems like it's not. How would you tax the people in your ideal government?

[CoccoBill]

CoccoBill, I think I misunderstood what your view of what taxation would look like in your ideal government. I thought it was basically the way it was but from what I'm reading it now seems like it's not. How would you tax the people in your ideal government?

Well I haven't reached any more precise conclusions than the ones I listed above. It all depends on the necessary size of the tax pool required to support the system, and everyone should be contributing to it based on their ability to do so.

I find it curious though that I've never met anyone who actually endorses equal outcome, or completely even wealth distribution, yet every libertarian/conservative keeps arguing against exactly that, as if that's the only other possible option. There's clearly a disconnect between opinions, but it doesn't seem to necessarily be nearly drastic as listening to political debate would make it sound like.

[Lyric]

Market strangulation (there are a few defs of this I believe) involves suffocating the market. Lots of words for what I mean...

If you flood a market with a product, the said products value drops and large companies without restriction could pretty much have a free reign.

For instance (and this is a known ploy and legal I think at the moment), say you have a square in a small town in the UK. It has coffee shop that has been open for 100yrs. This square can only support 1x coffee shop. Starbucks opens 2x coffee shops in the square......now they are making a loss in both shops...but when the original shop inevitably goes out of business, they close 1 of the Starbucks and you have 1 x town square and 1 x Starbucks...

There is no reason for Starbucks to open 2 x shops other than to strangulate the coffee market in the town square and shut down the other one.

First, let me mention that strangulation and underselling and flooding the market etc are all words for the same basic idea. Men who have failing businesses accuse the competitor with a better product (or lower prices) of these buzzwords in order to garner the support of government in protecting their business. If we reduce this to its simple form, we can see that it is impossible for a business to do any of these things without both harming themselves (lowering profits) and helping consumers.

Let's begin with three men on The Island. They all make stuff. One pulls salt from the sea, another makes wine, and the other fishes. One day the wine maker discovers a huge reserve of salt on his land. He begins selling salt with the direct intention of destroying the other man's salt harvesting "business." Remember that the island only needs three grams of salt per day and can only "support" one salt harvesting business.

First, the lucky man tries lowering the price. He will trade more salt per fish with the fisherman. He offers seven grams of salt per fish instead of the one gram per fish. The third man (fisherman) is very happy to have salt seven times cheaper. Now he can save six fish per week instead of handing them to the salt man every day.

The original salt man can't pull enough salt from the sea to eat, so he stops harvesting salt and begins making cheese. The lucky man is happy to see that salt harvesting competition is gone, and raises the price of salt to two fish per gram! Now what?

The original man goes back to harvesting salt and offers to trade at the old price of one gram per fish. This can go on forever, but the clear result is that every time the lucky man lowers the price of salt to stop anyone else from harvesting salt (to put them out of business), the net result is that during his "price attack" the fisherman enjoys very low salt prices, and when the lucky man raises prices again -- the cheese man goes right back to making salt again because the price is too high -- he knows the fisherman will trade for one gram per fish. The small salt harvester can even save a bucket of salt in his hut and wait for the lucky man to try a price hike -- immediately he undercuts the lucky man and offers to trade at one gram per fish. Further, when the lucky man is offering seven grams per fish the original salt man can buy salt at the cheap price and store it in his hut. (If the lucky man refuses to trade with him, he can trade through the fisherman, trading his cheese for seven grams of salt at a time -- cutting out the lucky man's ability to block his access to the cheap salt.)

In this way we can see that undercutting only serves to make salt cheaper (for everyone) over the long run, and cannot destroy the first salt maker's ability to re-enter the market business at any time, and cannot raise the price of salt.

In Starbuck's case -- if they try to kill small coffee shops by building two new shops in the small town, what have they done? The same thing as the lucky salt-maker. If the small shop dies and Starbucks removes a store, who benefited? All the people in the town had two shops for a time which is good for them because they have more choice during that time. If consumers consider coffee to be a generic commodity (like salt) then they are indifferent to weather or not the coffee shop in town is Starbucks or the original no-name brand. If Starbucks invests half a million bucks per store in the community for no other reason than to destroy the first shop, they have paid the community $500,000 to enter the town, a net benefit to society because they consider coffee to be a generic commodity. In the real world Starbucks probably succeeds because it has a better product or service than other shops near it, or the other shops' income is lowered to $20k/year or something and they decide to make bagels instead.

[Lyric]

So a few regulations I can think of:
To not allow selling at loss for the purpose of closing down competition.
To not allow companies to saturate markets for long term gain.

Regulations like these are so vague that they are easily used to stop the price of goods and services from falling (good for the common man). They are used by big business that is old and entrenched to kill competitors who have a better product or a more efficient manufacturing process.

As I explained above, selling at a loss, undercutting, price wars, strangulation, etc are good for consumers and do not yield higher prices or higher profits for businesses that might attempt them.

And in free market you couldn't implement even these basic business restrictions.

These are just a few thoughts off the top of my head - I currently work in construction insurance brokering and we have huge restrictions. If we didn't it would just be a bloodbath with every brokers trying to fk over everyone else (which we do already ldo) at any cost.
The end result would be just one large brokerage (bit like a freezeout game of poker I guess). And then you don't have a competitive market and the consumer suffers as well as all the other brokers who lost their jobs in the bloodbath.

This is akin to telling me that the restaurant food business needs restrictions on selling cheap fries or burgers because if they didn't have laws against price wars for 20 oz sodas eventually food would consolidate into one giant fast food chain. Obviously price wars don't do this, and myriad food establishments are coming and going, constantly trying to make better fries at a cheaper price. Consolidation only happens with government force.

[Lyric]

Well I haven't reached any more precise conclusions than the ones I listed above. It all depends on the necessary size of the tax pool required to support the system, and everyone should be contributing to it based on their ability to do so.

A flat tax does exactly this. If everyone pools 20% of their wealth to fund government the man who harvests 1,000 lbs of salt contributes 200 lbs of salt. Everyone else, pulling 10 lbs per year from the ocean, contributes only 2 lbs to the pool. In this way the lucky and successful men contribute more to the pool. A flat tax avoids discouraging the best workers, but still funds the pool with more money from the rich and less from the poor.

I find it curious though that I've never met anyone who actually endorses equal outcome, or completely even wealth distribution, yet every libertarian/conservative keeps arguing against exactly that, as if that's the only other possible option. There's clearly a disconnect between opinions, but it doesn't seem to necessarily be nearly drastic as listening to political debate would make it sound like.

Progressive systems are actively trying to make everyone have a similar end result. In more advanced forms of socialism that is the stated goal (from each according to his ability, to each according to his need -- in other words -- everyone has the same wealth regardless of IQ or skill). The basic idea that there such a thing as "too much" or "too little" wealth is what libertarians are addressing. There is no such thing as "rich" or "poor." It is all subjective, and trying to take salt from the guy who makes 1,000 lbs/year and give to the men who make none or are crippled etc lowers the amount of salt available to the crippled and the poor, and funnels wealth and power into the hands of government officials and their friends.

Let me say that again -- regulations funnel money from the poor (and rich) into the hands of bureaucrats and their elite friends; something we all want to avoid. We are duped into allowing it because the story they tell us as they rape us all (rich and poor) in the ass is a compelling one -- it appeals to our human nature and desire to treat the world as our family. They tell us that some doctors are evil and we need them to certify MDs. They tell us that some drugs are so dangerous that only doctors should have the ability to sell them, and they tell us that they all need to be extensively tested to avoid hurting anyone. All of this is a good story that sounds like it will help the little people but actually ends with rich and powerful elites and expensive drugs and health care for you and me.

Please read the salt example again, it (IMO) is a very clear example of why regulation is bad for the entire island and especially bad for the poor.

[Lyric]

Sure, having some lazyass wanker leech the system sucks, but IMO that sucks less than having the combination of people who genuinely are in circumstances where they can't get by without help, and others with qbzillions of money that they didn't deserve(*), rather buying their third airplane than helping those people out.

(*) "Deserve" in the sense that they either inherited it, abused the system or lucked out. I still don't agree that the movie industry being able to rack up millions because of some douche makes the person's compensation justified or deserved from any objective qualitative standpoint, it is just how the system works. The system itself is amoral, and in order to any morals of its participants to be exhibited would require them to act rationally, and have the system be impossible to be exploited, neither of which are the case. But, I digress.

A man who stole his wealth or got it from his father doesn't deserve what he holds any more than the rest of us. The salt example shows why taking from the rich (regardless of how they got it -- they could accidentally find a pile of salt) does not benefit the poor, the crippled, or the island society as a whole. It lowers total salt production, raises salt "prices" and lowers the amount of salt (wealth) in the hands of the poorest people on the island. If you don't understand or agree let's pause here and talk about this, it's a very important concept.

BTW do you have other examples of regulation that cause wealth condensation apart from the drug example? I agree 100% with that, drugs should absolutely be either completely legal, or regulated by the government like alcohol and tobacco. Them being illegal is by far the worst option for everyone except the illegal drug trade.

Yes, do you have some regulations in mind that you think do not consolidate power and wealth? The drug example is a clear example, but all regulations do the same thing.

[WillburForce]

Lyric, I'll have a proper read tomorrow, playing poker and have work tomorrow.

But I'll just say I think you're sooooooooo wrong.

[Numbr2intheWorld]

Well I haven't reached any more precise conclusions than the ones I listed above. It all depends on the necessary size of the tax pool required to support the system, and everyone should be contributing to it based on their ability to do so.


I find it curious though that I've never met anyone who actually endorses equal outcome, or completely even wealth distribution, yet every libertarian/conservative keeps arguing against exactly that, as if that's the only other possible option. There's clearly a disconnect between opinions, but it doesn't seem to necessarily be nearly drastic as listening to political debate would make it sound like.

How do you have such strong ideas about what should and shouldn't be but only have a vague idea of what a society would look like under these ideas?

[!Luck]

Lyric,

In regards to your salt guy making cheese you missed on key factor, which would apply in the Coffee shop example. There is a thing called barrier to entry. Don't have anything but anecdotal evidence to back up what I am about to say: Let's say I am middle class, and for 10 years I worked for the man to save the 100k needed to start a decent coffee shop in the center of town. For years it netted me good money than starbucks engaged in its game and my income was cut by 4 (let's from 80k to 20k). It no longer makes sense for me to keep going and even if one of the starbucks eventually shuts down the second starbucks, if there are no people with risk appetite and/or financial wherewithal to start one, the competition wont ever return. Overall, the town will be hurt by then monopolistic prices.


I am playing a bit of devils advocate, in part because i don't think there is good way to prevent this type of activity, without causing harm that is greater than what it is trying to prevent it. I am against price floors, ceilings, ect.

Court of our peers and reasonable solution? Again, in theory great, in practice not so great. I strongly suspect that most people in this thread would not want to be judged or be governed by a cross section of their peers. Since the populous is just not well versed in logic and rational thinking, regardless of how much schooling they receive. The US has an educated populous, but 1 in 5 believe the SUN rotates around the earth. I don't have a better solution that one of the peers, but I hope I never get accused of anything and have to deal with the "average" person.


!luck

[Numbr2intheWorld]

Lyric,

In regards to your salt guy making cheese you missed on key factor, which would apply in the Coffee shop example. There is a thing called barrier to entry. Don't have anything but anecdotal evidence to back up what I am about to say: Let's say I am middle class, and for 10 years I worked for the man to save the 100k needed to start a decent coffee shop in the center of town. For years it netted me good money than starbucks engaged in its game and my income was cut by 4 (let's from 80k to 20k). It no longer makes sense for me to keep going and even if one of the starbucks eventually shuts down the second starbucks, if there are no people with risk appetite and/or financial wherewithal to start one, the competition wont ever return. Overall, the town will be hurt by then monopolistic prices.

1) Does Starbucks have other competition besides coffee shops? Why doesn't a Starbucks only town raise there prices to $10 for coffee?

2) How plausible is it that "no people with risk appetite and/or financial wherewithal," would exist in this town or surrounding towns? Would this town be doing well to begin with if none of these people existed?

3) Could a company or small business besides Starbucks do the exact same thing that Starbucks did in your scenario? Why does Starbucks have incentive to do this but nobody else?

4) When Starbucks comes to your town, what makes the people of the town go there?

5) Why does your coffee shop deserve (as you imply) to make 80k a year instead of 20k? Should everyone in the town pay more for coffee so you can keep your coffee shop?

[Numbr2intheWorld]

Lyric, I'll have a proper read tomorrow, playing poker and have work tomorrow.

But I'll just say I think you're sooooooooo wrong.

Touche

[Lyric]

Lyric,

In regards to your salt guy making cheese you missed on key factor, which would apply in the Coffee shop example. There is a thing called barrier to entry. Don't have anything but anecdotal evidence to back up what I am about to say: Let's say I am middle class, and for 10 years I worked for the man to save the 100k needed to start a decent coffee shop in the center of town. For years it netted me good money than Starbucks engaged in its game and my income was cut by 4 (let's from 80k to 20k). It no longer makes sense for me to keep going and even if one of the Starbucks eventually shuts down the second Starbucks, if there are no people with risk appetite and/or financial wherewithal to start one, the competition wont ever return. Overall, the town will be hurt by then monopolistic prices.

I see your point on this and have thought about barriers to entry as well, and part of the block I experienced was imagining a couple of things -- one is a world where a coffee shop can be started with virtually no investment because the owner doesn't need a business license, doesn't have to collect sales tax, no health department license, no fire department permit, no building and construction permit, no sign permit, no liquor license, no federal tax ID number, and no registration with the IRS to notify them of his intention to sell liquor at retail. (I'm thinking about starting a restaurant and these are all real and required permits. Liquor licenses are 12-40K in major cities and are priced that high because gov't enforces a limit on the number of licenses permitted which funnels money to existing wealthy bar owners. In Iowa licenses are $75-$2K, making the barrier fairly low.)

Second, it is hard to imagine that on an island a man might save for a lifetime and end up with a bucket of salt. Today a man can save for a lifetime and end up with a bucket of gold. Putting all your salt into a business on the island was similar to putting your bucket of gold into a coffee shop -- both are huge gambles and would not be taken lightly.

In the modern world starting a biz is a huge undertaking mostly because of government licensing and regulations (which serve to funnel money to the top). Delete the regulations and I can start a coffee shop in my garage!

Third, we forget that even in the modern world of regulations and zoning, the top 10% of people can easily afford to start a coffee shop even in a small town in Iowa. Competition would return if a motivated person decided to fill a societal need, but if people don't really care about coffee that much his time is better spent developing something more productive.

In any case the basic argument stand, I think. Predatory practices by large firms are political bullshit. Firms don't actually do this type of thing unless they're really dumb, and when they do it helps to give away the firm's money to the public if you look at the end game.


I am playing a bit of devils advocate, in part because i don't think there is good way to prevent this type of activity, without causing harm that is greater than what it is trying to prevent it. I am against price floors, ceilings, ect.

Court of our peers and reasonable solution? Again, in theory great, in practice not so great. I strongly suspect that most people in this thread would not want to be judged or be governed by a cross section of their peers. Since the populous is just not well versed in logic and rational thinking, regardless of how much schooling they receive. The US has an educated populous, but 1 in 5 believe the SUN rotates around the earth. I don't have a better solution that one of the peers, but I hope I never get accused of anything and have to deal with the "average" person.


!luck

I agree with you on this, but I don't think judgments of morality can't involve anything but other people that live near/with you. Morality is based on other people. With one man alone on a island there is no morality.

We should be free to set up communities where our morality is in line with our peers, and this is indeed what we find in most major cities -- each race lives in neighborhood of a similar background. We tend to find other people who are like us. The trouble for me is that very few people are like me or share my morality or views about virtually anything of importance, so it is fairly hard for me to imagine being morally judged in a fair manner by any group of people. This does not mean I think smarter people should judge morality for the retards who think the sun goes around the earth. I think that leads to an even worse situation.

[Lyric]

1) Does Starbucks have other competition besides coffee shops? Why doesn't a Starbucks only town raise there prices to $10 for coffee?

Excellent point. Because were they to do that they would lose business and or a new coffee shop would start.

2) How plausible is it that "no people with risk appetite and/or financial wherewithal," would exist in this town or surrounding towns? Would this town be doing well to begin with if none of these people existed?

Nice.

3) Could a company or small business besides Starbucks do the exact same thing that Starbucks did in your scenario? Why does Starbucks have incentive to do this but nobody else?

Agreed. I don't think any major successful company does any of these things. They are bullshit spewed by politicians.

4) When Starbucks comes to your town, what makes the people of the town go there?

Obviously they were programmed by advertising and or Starbucks killed all the other coffee shops. It can't possibly be that their coffee or service or pricing is better than anyone else because they are a big bad corporate suck-hole.

5) Why does your coffee shop deserve (as you imply) to make 80k a year instead of 20k? Should everyone in the town pay more for coffee so you can keep your coffee shop?

Agreed. We should remember that the goal isn't to protect each small business; it is to raise the wealth and quality of life for everyone on the island as much as possible.

[!Luck]

Lyric I spent too long writing my reply and you posted yours, so I might get around to your comments later.

1)

Does Starbucks have other competition besides coffee shops? I don't want it to be included for this example cause it will complicate it without really helping us figure out what we are talking about.

Why doesn't a Starbucks only town raise there prices to $10 for coffee?

Starbucks will not keep raising their prices to the point where a significant portion of the market switch over to substitute good. Starbucks price would be monopolistic price, a price that maximize revenue based on the consumer demand. See graph. But, I think this isn't really relevant.

2) How plausible is it that "no people with risk appetite and/or financial wherewithal," would exist in this town or surrounding towns? Would this town be doing well to begin with if none of these people existed?

I was going off his example, where he stated that the inherit demand for coffee in that town could only profitable support 1 coffee shop. What this meant to me, was that if there is 1 coffee shop it will make 80k a year, if there are two, they will make combined 40k (with 40k going to duplication of costs). I am not sure what you mean by your second part of the question. I'll take stab based on my understanding, I don't know if they would or wouldn't, but that is bit outside of the scope. Again the whole point of my example was to demonstrate that sometimes a big competitor can force out the Small competitor through such tactics and then by virtue of economics create a situation where there will never be competition (unless another big corp shows up). No savvy business man would want to compete against an established company, where there isn't enough demand to support two shops. This leads me to your 3rd question.

3) Could a company or small business besides Starbucks do the exact same thing that Starbucks did in your scenario? Why does Starbucks have incentive to do this but nobody else?

Another company could do this 100%, a small business (depending on how we define it) may not be able to do it. As they won't have the financial resources. Most (all?) companies have the incentive to do this, because if this particular market for one starbucks earns 80% ROE in perpetuity and if this is considered a good return, than everyone would want to do it. Normal this return would go to the first mover, but large corps have the resources to take back the first mover advantage by what I said. But this type of action would likely prevent further competition. Sometimes two big companies fight to the customer's benefit (see airlines) other times, they just stay out of each other way, in way forming local monopolies.

4) When Starbucks comes to your town, what makes the people of the town go there?

For simplicity only, we need to assume that there is no real preference between the small shop and the corporate shop, i realize this isn't realistic. But if we start talking about this we will have discuss how exactly consumer demand works and my answer to this is complicated, yet at the same time is barely improving my original example.

5) Why does your coffee shop deserve (as you imply) to make 80k a year instead of 20k? Should everyone in the town pay more for coffee so you can keep your coffee shop?

He deserves nothing! I was just showing the consequences of such a ploy and demonstrating that it wouldn't be necessarily corrected by competition, due to my replies above.

I will try to summarize what I wrote. All I was getting at is that depending on the economics of the situation a monopoly could take hold, which in the long run would be a negative for the consumer. Note that the negative is exactly the same whether it is me small business owner or big starbucks company (this can be debated, since the small business owner would spend more local, but if we widen discussion anymore, no real progress will ever be made). I was just highlighting that a large corporation has advantages that a small one doesn't. Which again is going back to my belief that a open market creates incentives for the consolidation of power. I am completely fine with this concept, i feel that is the price society has to pay for progress. And I believe it is hard/impossible to create a system where this does not happen. Lyric doesn't appear to agree with this. This is all I am aruging against. He says that he wants little regulation to except to insure everyone has equal opportunity and prevent consolidation and I say this is impossible in a truly free market, by definition.


Lastly, it appears to me, that you think that I am implying that we should stop starbucks like behavior. And I am sorry if I wasn't clear, I am 100% for starbucks like behavior, because I believe competition is good for society. In some instances it may create a situation where a company would enjoy excess economic profit. But that provides incentive for companes to compete fiercely since their could be this huge profit incentive if they do.

I feel like im sucked into this debate. But what are we trying to figure out. It seems to me that some of us are like go go go free market (i am in that camp). But we all disagree how much regulation is too much and how exactly our theoretical amount of regulation would work. I do not know how useful it is debating, theoretical regulation especially when we use simple island like examples.

I find this very interesting, but I don't feel like any one of us is making any progress. I think we learned a little bit from one another, but overall progress is low. What have we accomplished in 12 pages? All we are doing is nit picking each other.

We all agree that we have some rights and that some social contract has to be in place for society to function. I guess I am done with this thread (feeble threat)? Cause, i just don't know what we are trying to do here.

!luck

[Numbr2intheWorld]

1) Does Starbucks have other competition besides coffee shops? Why doesn't a Starbucks only town raise there prices to $10 for coffee?

Excellent point. Because were they to do that they would lose business and or a new coffee shop would start.

I was also implying that grocery stores and online stores that sell coffee beans, ground coffee, or instant coffee are all completion for a coffee shop.

[Lyric]

Lastly, it appears to me, that you think that I am implying that we should stop starbucks like behavior. And I am sorry if I wasn't clear, I am 100% for starbucks like behavior, because I believe competition is good for society. In some instances it may create a situation where a company would enjoy excess economic profit.

What does "excess profit" mean?

[Lyric]

We all agree that we have some rights and that some social contract has to be in place for society to function. I guess I am done with this thread (feeble threat)? Cause, i just don't know what we are trying to do here.

!luck

We still have a major divide because half think regulations can actually help improve something, and the other half think regulations are a last resort; only used if something cannot be sold or traded individually.

Military and police are only socialized because protection cannot be sold to each person individually. Most in this thread continue to believe that regulations (especially redistributive regulations) are helpful for society. I think that you and others continue to feel that the rich can help the poor by giving them money because you don't understand something along the way from island to modern life, and most fail to see the deeper consequences of regulations intended to help the people.

Regulation of drugs is just one example of horrific consequences and consolidation of power and wealth generated by a simple plan by government to protect us from quackery, idiot doctors, and poisoned/addictive/fake drugs.

[!Luck]

I think that you and others continue to feel that the rich can help the poor by giving them money

I do not think I ever said that. You say that regulation is a last resort and I agree. I suspect, I am actually for less regulation than you. In this thread I tend to point out the consequences of X and I rarely state my beliefs so I can see how you can misunderstand.

You say that "Military and police are only socialized because protection cannot be sold to each person individually". Is there any other regulation that you think is needed?

!luck

[Lyric]

I do not think I ever said that. You say that regulation is a last resort and I agree. I suspect, I am actually for less regulation than you. In this thread I tend to point out the consequences of X and I rarely state my beliefs so I can see how you can misunderstand.

You say that "Military and police are only socialized because protection cannot be sold to each person individually". Is there any other regulation that you think is needed?

!luck

Courts of law. What do you think? What should be socialized?

[CoccoBill]

In Starbuck's case -- if they try to kill small coffee shops by building two new shops in the small town, what have they done? The same thing as the lucky salt-maker. If the small shop dies and Starbucks removes a store, who benefited? All the people in the town had two shops for a time which is good for them because they have more choice during that time. If consumers consider coffee to be a generic commodity (like salt) then they are indifferent to weather or not the coffee shop in town is Starbucks or the original no-name brand. If Starbucks invests half a million bucks per store in the community for no other reason than to destroy the first shop, they have paid the community $500,000 to enter the town, a net benefit to society because they consider coffee to be a generic commodity. In the real world Starbucks probably succeeds because it has a better product or service than other shops near it, or the other shops' income is lowered to $20k/year or something and they decide to make bagels instead.

The competition is not fair if one player can just buy out all the competition or flood the market with cheaper products at a loss to drive out competition. This is what creates monopolies, and I don't think I have to explain why they are bad for everyone but the monopolies themselves? A monopoly ensures that prices won't go down and healthy competition cannot exist. In a free market a monopoly is the goal of all of its participants, since that is the ultimate way to maximize their profits.

A flat tax does exactly this. If everyone pools 20% of their wealth to fund government the man who harvests 1,000 lbs of salt contributes 200 lbs of salt. Everyone else, pulling 10 lbs per year from the ocean, contributes only 2 lbs to the pool. In this way the lucky and successful men contribute more to the pool. A flat tax avoids discouraging the best workers, but still funds the pool with more money from the rich and less from the poor.

C'mon man we've been through this.

- Without intervention most money will condense on the top.
- A person earning exactly enough money to pay for food and housing cannot afford to pay any taxes without it causing material damage, someone earning twice as much can afford to pay up to half their income in taxes, and this proportion of being able to afford gets greater the more you make, hence "each to their ability". I gave a mathematical example of this on page 4 or something.
- It also seems that marginal propensity to consume drops as income levels grow: a billionaire doesn't consume the same percentage of his wealth as lower income earners, making them less beneficial to society.
- People with a lot of wealth arguably have more need for government protection, since they stand to lose more. It should be fair they also pay more.
- Income equality creates crime, so it should be also in the wealthy guy's self interests to ensure the crime rates are lower.
- We already went through the demotivating effect of progressive taxation, and in any model I'm supporting that is negligible.

Progressive systems are actively trying to make everyone have a similar end result. In more advanced forms of socialism that is the stated goal (from each according to his ability, to each according to his need -- in other words -- everyone has the same wealth regardless of IQ or skill).

You keep beating that horse well past its expiry date, right after I said this is what vehement free market advocates tend to do. No, I do not support equal outcome, I support equal opportunity.

Let me say that again -- regulations funnel money from the poor (and rich) into the hands of bureaucrats and their elite friends; something we all want to avoid. We are duped into allowing it because the story they tell us as they rape us all (rich and poor) in the ass is a compelling one -- it appeals to our human nature and desire to treat the world as our family. They tell us that some doctors are evil and we need them to certify MDs. They tell us that some drugs are so dangerous that only doctors should have the ability to sell them, and they tell us that they all need to be extensively tested to avoid hurting anyone. All of this is a good story that sounds like it will help the little people but actually ends with rich and powerful elites and expensive drugs and health care for you and me.

Ok I'm against everything you're saying. BAD regulation may funnel from the poor to the rich, or do anything else that is not desired and not beneficial to society. Some doctors are "evil" because they are in the pockets of big pharma, getting incentives from them the more drugs they prescribe. I _absolutely_ think medicines should be regulated to ensure they do not HARM their users. Some drugs are much more dangerous than others, why do you think we have huge epidemics with opiates, amphetamines and prescription drug abuse? I'm supporting for these substances not to be illegal, that they are regulated to make sure they are safe and studied for their effects and these effects made known to everyone using them. Drugs are expensive partly because their research is ridiculously expensive, but also because of patents, which I'm almost unilaterally against.

It is completely useless to talk about small government or big government, more regulation or less regulation, none of these have any merit and none of them should be aimed at as some sort of values. There's only the "right" size for each. If a regulation is net beneficial for society it should be implemented, regardless of how much regulation there is overall, if it's not beneficial, it obviously shouldn't be implemented either. After all of the beneficial regulations have been implemented, the right size for the government is that which is necessary to manage and enforce said regulations, nothing more nothing less. Saying "This regulation would be beneficial for us, but we shouldn't implement it because we have like so many already." is utterly retarded. We should not aim for any specific level of regulation or specific size of government, other than what is optimal.

A man who stole his wealth or got it from his father doesn't deserve what he holds any more than the rest of us. The salt example shows why taking from the rich (regardless of how they got it -- they could accidentally find a pile of salt) does not benefit the poor, the crippled, or the island society as a whole. It lowers total salt production, raises salt "prices" and lowers the amount of salt (wealth) in the hands of the poorest people on the island. If you don't understand or agree let's pause here and talk about this, it's a very important concept.

I don't know which of your examples you're talking about but I don't recall seeing any proof of what you're saying.

Yes, do you have some regulations in mind that you think do not consolidate power and wealth? The drug example is a clear example, but all regulations do the same thing.

What do you mean by consolidate? Consolidation of power, how I understand it in this context, can be either good or bad depending on the purpose. Consolidation of power and wealth to combat environmental damage, for example, is good. It allows to achieve goals that otherwise would be out of the reach of smaller individuals. What I was talking about is examples of regulation that create wealth condensation at the top.

In any case the basic argument stand, I think. Predatory practices by large firms are political bullshit. Firms don't actually do this type of thing unless they're really dumb, and when they do it helps to give away the firm's money to the public if you look at the end game.

* Standard Oil Company - In 1909, the US Department of Justice sued Standard under federal anti-trust law, the Sherman Antitrust Act of 1890, for sustaining a monopoly and restraining interstate commerce. The government said that Standard raised prices to its monopolistic customers but lowered them to hurt competitors, often disguising its illegal actions by using bogus supposedly independent companies it controlled.

"The evidence is, in fact, absolutely conclusive that the Standard Oil Company charges altogether excessive prices where it meets no competition, and particularly where there is little likelihood of competitors entering the field, and that, on the other hand, where competition is active, it frequently cuts prices to a point which leaves even the Standard little or no profit, and which more often leaves no profit to the competitor, whose costs are ordinarily somewhat higher."

* France Telecom/Wanadoo—The European Court of Justice judged that Wanadoo (Now Orange Internet France) charged less than cost in order to gain a lead in the French broadband market. They have been ordered to pay a fine of €10.35m, although this can still be contested.
* Microsoft released their web-browser Internet Explorer for free. As a result the market leader and primary competitor, Netscape, was forced to release Netscape Navigator for free in order to stay in the market. Internet Explorer's free inclusion in Windows led to it quickly becoming the web browser used by most computer users.
* According to an International Herald Tribune article, the French government ordered amazon.com to stop offering free shipping to its customers, because it was in violation of French predatory pricing laws. After Amazon refused to obey the order, the government proceeded to fine them €1,000 per day. Amazon continued to pay the fines instead of ending its policy of offering free shipping.
* Low oil prices during the 1990s, while being financially unsustainable, effectively stifled exploration to increase production, delayed innovation of alternative energy sources and eliminated competition from other more expensive yet productive sources of petroleum such as stripper wells.
* In the Darlington Bus War, Stagecoach Group offered free bus rides in order to put the rival Darlington Corporation Transport out of business.

Justice Department launches antitrust review of Partners HealthCare - The Boston Globe
US sues American Express for anti-competitive practices - Summary | Earth Times News

I found these examples in 30 seconds. Are you suggesting these should be allowed?

I agree with you on this, but I don't think judgments of morality can't involve anything but other people that live near/with you. Morality is based on other people. With one man alone on a island there is no morality.

Well I completely disagree with this also. I think morals and ethics are innate, what each of us believe to be right or wrong. These can be and are of course influenced by external factors, such as cultural or legal codes, customs, religion etc. Do you think the one man on the island wouldn't know right from wrong unless someone or something else told him? Do you think that's true for yourself?

[CoccoBill]

How do you have such strong ideas about what should and shouldn't be but only have a vague idea of what a society would look like under these ideas?

Because I'm not really interested in the latter, nor do I think we should shape the society to look like anything specific. However, there needs to be some governing rules by which it must work, and those rules are what I'm arguing for. After that the society will just look like what its constituents want it to look like. A complete anarchy will not work as long as some of its participants have selfish motivations, and that cannot be achieved before we have endless resources, free sustainable energy etc. where no one needs anything more, and/or we evolve to a point where these are no longer desired. Read Asimov's The Last Question to give some pointers to the direction we are heading, if we manage somehow to not destroy ourselves before we get there.

[Numbr2intheWorld]

* Standard Oil Company - In 1909, the US Department of Justice sued Standard under federal anti-trust law, the Sherman Antitrust Act of 1890, for sustaining a monopoly and restraining interstate commerce. The government said that Standard raised prices to its monopolistic customers but lowered them to hurt competitors, often disguising its illegal actions by using bogus supposedly independent companies it controlled.

"The evidence is, in fact, absolutely conclusive that the Standard Oil Company charges altogether excessive prices where it meets no competition, and particularly where there is little likelihood of competitors entering the field, and that, on the other hand, where competition is active, it frequently cuts prices to a point which leaves even the Standard little or no profit, and which more often leaves no profit to the competitor, whose costs are ordinarily somewhat higher."


* France Telecom/Wanadoo—The European Court of Justice judged that Wanadoo (Now Orange Internet France) charged less than cost in order to gain a lead in the French broadband market. They have been ordered to pay a fine of €10.35m, although this can still be contested.
* Microsoft released their web-browser Internet Explorer for free. As a result the market leader and primary competitor, Netscape, was forced to release Netscape Navigator for free in order to stay in the market. Internet Explorer's free inclusion in Windows led to it quickly becoming the web browser used by most computer users.
* According to an International Herald Tribune article, the French government ordered amazon.com to stop offering free shipping to its customers, because it was in violation of French predatory pricing laws. After Amazon refused to obey the order, the government proceeded to fine them €1,000 per day. Amazon continued to pay the fines instead of ending its policy of offering free shipping.
* Low oil prices during the 1990s, while being financially unsustainable, effectively stifled exploration to increase production, delayed innovation of alternative energy sources and eliminated competition from other more expensive yet productive sources of petroleum such as stripper wells.
* In the Darlington Bus War, Stagecoach Group offered free bus rides in order to put the rival Darlington Corporation Transport out of business.

Justice Department launches antitrust review of Partners HealthCare - The Boston Globe
US sues American Express for anti-competitive practices - Summary | Earth Times News

I found these examples in 30 seconds. Are you suggesting these should be allowed?

1) Some economists thought it was not a monopoly.

"Some economic historians have observed that Standard Oil was in the process of losing its monopoly at the time of its breakup in 1911. Although Standard had 90% of American refining capacity in 1880, by 1911 that had shrunk to between 60 and 65%, due to the expansion in capacity by competitors.[22] Numerous regional competitors (such as Pure Oil in the East, Texaco and Gulf Oil in the Gulf Coast, Cities Service and Sun in the Midcontinent, Union in California, and Shell overseas) had organized themselves into competitive vertically integrated oil companies, the industry structure pioneered years earlier by Standard itself. In addition, demand for petroleum products was increasing more rapidly than the ability of Standard to expand. The result was that although in 1911 Standard still controlled most production in the older US regions of the Appalachian Basin (78% share, down from 92% in 1880), Lima-Indiana (90%, down from 95% in 1906), and the Illinois Basin (83%, down from 100% in 1906), its share was much lower in the rapidly expanding new regions that would dominate US oil production in the 20th century. In 1911 Standard controlled only 44% of production in the Midcontinent, 29% in California, and 10% on the Gulf Coast."

To me, it looks like it was only a matter of time before smart people figured out how to compete with Standard.
2) Here's an argument from a Supreme Court rep of that time:

"trusts have made products cheaper, have reduced prices; but if the price of oil, for instance, were reduced to one cent a barrel, it would not right the wrong done to people of this country by the trusts which have destroyed legitimate competition and driven honest men from legitimate business enterprise"

This looks like the exact same thing as the coffee shop argument, which I still believe that if something brings lower prices it benefits us the most.
3) Did you know that J.D. Rockefeller became the richest man in the world only after the break up of standard oil? The new oil companies that resulted in the break-up actually made him twice as much money.

Regarding the Telecom company in France: You're acting as if once they got all the customers through great prices that now they can raise their prices and people will be helpless. We've been over why this isn't the case.

Regarding Internet Explorer: IT'S STILL FREE, and guess what, it looks like when people found a better browser (Firefox, Chrome) they switched mostly to that. My computer came with internet explorer, and Immediately downloaded firefox.

Regarding Amazon: Wow... so you're for the French government screwing people out of great prices. Good for you.

Regarding Oil Prices: Maybe you should tell that to the enormous government, who's spends our tax dollars to keep oil prices as low as they are, not the companies who are playing off of them.

Regarding Amex, Visa, Mastercard: Gotta think about this one

[Numbr2intheWorld]

A complete anarchy will not work as long as some of its participants have selfish motivations.

Everyone has selfish motivations. Selfish does not equal evil.

No ones arguing for complete anarchy just like no one is arguing for complete socialism.

[Numbr2intheWorld]

- It also seems that marginal propensity to consume drops as income levels grow: a billionaire doesn't consume the same percentage of his wealth as lower income earners.

Yes, the billionaire hoards his money in his secret lair and offers it to Satan. He burns it and it disappears forever!

[IowaSkinsFan]

The more I'm reading the more I'm thinking monopolies are just slanderous sob stories from competitors.

[IowaSkinsFan]

"Low oil prices during the 1990s, while being financially unsustainable,, delayed innovation of alternative energy sources and eliminated competition from other more expensive yet productive sources of petroleum such as stripper wells."

Everything your saying here is true but none of it is a bad thing.

"effectively stifled exploration to increase production"

So your saying because profits were smaller, they could not put as much money into R & D? This is true, but not bad, nor does it even create a net loss in exploration and increased production. Big oil dominance creates incentive for start ups and competitors to use even more innovation and development into improve technologies, and exploration if this will allow them to offer oil for cheaper, as you are implying it does.

Competitors are never destroyed by a better business coming in and offering a lower price, they simply need to adjust there strategy. I never learned in business school that when your competitor is better than you at price that the solution is sue them for being a monopoly.

[CoccoBill]

Regarding the Telecom company in France: You're acting as if once they got all the customers through great prices that now they can raise their prices and people will be helpless. We've been over why this isn't the case.

Wanadoo fined ?10.35m for stifling competition - 7/17/2003 - Computer Weekly

Regarding Internet Explorer: IT'S STILL FREE, and guess what, it looks like when people found a better browser (Firefox, Chrome) they switched mostly to that. My computer came with internet explorer, and Immediately downloaded firefox.

They killed their main competition, and got Microsoft 10 years of market dominance without even any product development, which finally caught up to them with Firefox. Who benefited?

Regarding Oil Prices: Maybe you should tell that to the enormous government, who's spends our tax dollars to keep oil prices as low as they are, not the companies who are playing off of them.

Why do you think that regulation is in place, because the government is a big evil or because massive corporations have abused their power and lobbied regulation that benefits them?

[CoccoBill]

Competitors are never destroyed by a better business coming in and offering a lower price, they simply need to adjust there strategy. I never learned in business school that when your competitor is better than you at price that the solution is sue them for being a monopoly.

Well of course businesses can and do go bust by just superior competitors, but that is not the issue here. If it's based on real and ethical competition, gg. It's the abuse of commanding market position that is the problem. Netscape didn't die because Microsoft was better, it died because Microsoft could afford to take the hit from offering IE free and bundling it with its OS. This is not competition.

[Lyric]

Yes, the billionaire hoards his money in his secret lair and offers it to Satan. He burns it and it disappears forever!

Holy shit this made me lol so hard.

[Lyric]

The more I'm reading the more I'm thinking monopolies are just slanderous sob stories from competitors.

Exactly correct, unless the monopoly is supported by government. Then we call it "progress," "hope," and "change." There are many monopolies we don't recognize as monopolies. Medical doctors and lawyers, for example, both enjoy gov't protected monopolies on their services. The Fed is also a gov't protected monopoly on currency production and banking.

The only "evil" monopolies the common person knows about are actually just successful businesses that are doing so well that entrenched businesses are complaining. They invent a world where price wars are actually harmful to the consumer. I'm astounded by how many people believe this is logical.

[Lyric]

Wanadoo fined ?10.35m for stifling competition - 7/17/2003 - Computer Weekly

Showing us that retarded laws are being enforced does not make them good laws. I'm horrified by these displays of government intervention on behalf of big business. Who do you think pushed gov't to fine Wanadoo? Consumers?! They were getting a product below cost! By the way, this happens accidentally all the time in businesses with small margins. Some years the company loses money and accidentally sells products for that year "below cost," which is another way of saying they lost money for the year.

The gov't fining them is just a punch in the nuts while they are down. I imagine that was the point -- to kill Wanadoo via gov't so the existing company can continue to offer shittier products at a higher price.

[Lyric]

Wanadoo fined ?10.35m for stifling competition - 7/17/2003 - Computer Weekly



They killed their main competition, and got Microsoft 10 years of market dominance without even any product development, which finally caught up to them with Firefox. Who benefited?

You and I did -- we didn't have to pay $50 per copy. And when the free software wasn't good enough other companies made more free software and gave that away too. I'm dumbfounded that you think it's a bad idea to give something away, but I understand you think this way because you believe the propaganda; that selling something at a low price harms society because competitors can go out of business. They go out of business because they are not as good at making salt. If the guy with a ton of salt begins jacking up the price of his salt, the old salt makers come back into the business immediately.


Why do you think that regulation is in place, because the government is a big evil or because massive corporations have abused their power and lobbied regulation that benefits them?

Regulation is in place because wealthy men lobbied for it to protect their business interests. In almost every case. All regulatory agencies benefit big business and protect monopolies at the expense of consumers; oh the irony of it all.

[CoccoBill]

Showing us that retarded laws are being enforced does not make them good laws. I'm horrified by these displays of government intervention on behalf of big business. Who do you think pushed gov't to fine Wanadoo? Consumers?! They were getting a product below cost! By the way, this happens accidentally all the time in businesses with small margins. Some years the company loses money and accidentally sells products for that year "below cost," which is another way of saying they lost money for the year.

The gov't fining them is just a punch in the nuts while they are down. I imagine that was the point -- to kill Wanadoo via gov't so the existing company can continue to offer shittier products at a higher price.

I'm puzzled.

They weren't lowering their prices permanently, just long enough to kill the competition. Do consumers benefit from lack of competition? At least I don't choose products purely based on price.

There's a huge difference between accidentally selling below cost and purposefully doing that to eliminate competition using your larger capital.

"A punch in the nuts while they are down" wtf? You're talking about the 72% market share owner, how were they "down"?

You and I did -- we didn't have to pay $50 per copy. And when the free software wasn't good enough other companies made more free software and gave that away too. I'm dumbfounded that you think it's a bad idea to give something away, but I understand you think this way because you believe the propaganda; that selling something at a low price harms society because competitors can go out of business. They go out of business because they are not as good at making salt. If the guy with a ton of salt begins jacking up the price of his salt, the old salt makers come back into the business immediately.

I'm seriously getting tired of your strawmen, please stop telling me what my thoughts are. Obviously I have nothing against giving anything away for free. Do you think Microsoft gave IE for free cos they're nice chaps? Do you think Microsoft giving out IE for free is the reason browsers are free now? I like having competition and options as a consumer, and I like a market where I can compete fairly if I choose to start a business. Microsoft using their commanding market presence in the operating system market to capture the browser market is not healthy competition.

Let me ask you this, do you think ethical violations in business exist? Are cartels ok? IMO anti-competitive legislation is there to protect the consumers by ensuring businesses must compete for their share of the market. Competition is what forces adaptation and ensures innovation, what's wrong with protecting that from harm?

[Lyric]

C'mon man we've been through this.

I agree. We're going too far. Back to basics to find some common ground.

I don't know which of your examples you're talking about but I don't recall seeing any proof of what you're saying.

Salt example:

Which island has more wealth (salt)? Each man uses 25 lbs of salt per year:

1. Two men harvest salt and both men keep what they harvest and are not charitable at all. One harvests 100 lbs per year and the other can only manage to pull 25 lbs per year. Total production: 125 lbs per year.

2. The same island, but the more productive man gives the other man 25 lbs of salt per year for free.

Which island will have more salt after ten years?

[CoccoBill]

What's the benefit of having the maximum amount of salt on the island? Is everyone the better of the more salt there is, no matter who has it?

[!Luck]

What does "excess profit" mean?

Excess profit it earns above the profit that a company would earn if their was competition.

Again, this just an economic definition.

I do not think this is bad.

[Lyric]

What's the benefit of having the maximum amount of salt on the island? Is everyone the better of the more salt there is, no matter who has it?

First, let's agree that there is more salt on the island. We already agreed that salt is a form of wealth. This is step two. Step three can be discussing the benefit of more salt on the island. Do you agree that the island without charity has more salt?

[Lyric]

Excess profit it earns above the profit that a company would earn if their was competition.

Again, this just an economic definition.

I do not think this is bad.

The term "excess profit" is not on that wiki page, and Google doesn't find it either. I don't think it is defined in econ, and your definition doesn't make any sense.

How much competition? How good is the competition's product? How many vendors are there? A very competitive market would have nearly no profit, but a monopoly would have some amount of profit. Where does the profit hit the "excess" mark?

[!Luck]

Courts of law. What do you think? What should be socialized?

I struggle with this honestly and this thread is nice, cause I haven't been challenged in my economic views in a long time (since college).

I will outline my personal philosophy.

My goal is to create a system for society that will result in the greatest advances for society as whole, over the long term (generations). That is what I think is best, with my logic part of the brain.


What worries my emotional side of my brain is that, that type of goal leads to slavery and exploitation of the mental handicapped, which seems emotionally wrong.

I also think about how regulation works in theory vs. how it works in practice. This is my primary reason why in general most regulations are bad for society.

Society is probably better off, where murder isn't allowed. But, what if you are drunk and "accidentally" kill a carload of kids. Should you be denied liberty? Are you really dangerous? Well, only when you drink. What if you are productive member of society and the loss of your life is actually greater than the loss of those kids? Should we still kill him/imprison him? There have been studies that show severity of consequences does not deter action. Since most criminals either don't think they are going to get caught, or they do it in the "heat" of the moment, or are under the influence.

Further, how do the courts function, how much resources should a court system be able to drain from society. Some people are in the camp that they would rather see 10 man be tried guilty when they are innocent rather to see one guilty person go free. Others, like me, would rather have 10 guilty man go free than let one innocent man be guilty.

The single consistent answer I get when I try to think about this for myself is I do not know. I do not have a global idea of how laws should and shouldn't be enacted. I would love to have a few planets (islands if you will ) to play God on. Force certain regulations and see how far each planet evolves (over 1000 years). Then with that data pick the best one. For us.

To try to bring this back to the practical. I know for a fact that currently certain governmental policies are horrible. Like the no child left behind policy. I am also not a big fan of social security. The excessive regulations there are to start a business that sells liquor. The fact, that I need insurance to drive my car, ect. I hate how people are like wow, health care has going at 2x inflation and school costs have gone up at 2x inflation (the 2x is just out of thin air) and yet people don't see the direct connection between having insurance be supplied to you by your company and the existence of school loans, which are subsidized by the government.

Lastly, and most importantly. I try hard to lead my life in such a way that improves my family, my self, and my friends. Mostly in that order, well honestly, I probably put myself above my family (sometimes). Self interest or being selfish is the most important thing in driving the economy forward.

-!luck

[!Luck]

In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs (both explicit and implicit) of a venture, whilst economic profit (also abnormal, pure, supernormal or excess profits, or simply profit) is, in neoclassical economics at least, is the difference between a firm's total revenue and normal profit

Profit (economics) - Wikipedia, the free encyclopedia

[Lyric]

Society is probably better off, where murder isn't allowed. But, what if you are drunk and "accidentally" kill a carload of kids. Should you be denied liberty? Are you really dangerous? Well, only when you drink. What if you are productive member of society and the loss of your life is actually greater than the loss of those kids? Should we still kill him/imprison him? There have been studies that show severity of consequences does not deter action. Since most criminals either don't think they are going to get caught, or they do it in the "heat" of the moment, or are under the influence.



-!luck

Crime rates fall as wealth of the society rises and in countries that have similar belief systems, look the same, or have high penalties. The middle east cuts off hands for simple theft. They don't have many people stealing. My main recommendation is to get more salt on the island, automatically reducing crime rates.

[Lyric]

In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs (both explicit and implicit) of a venture, whilst economic profit (also abnormal, pure, supernormal or excess profits, or simply profit) is, in neoclassical economics at least, is the difference between a firm's total revenue and normal profit

Profit (economics) - Wikipedia, the free encyclopedia

"Normal profit is the return the entrepreneur can expect to earn or the profit that a business owner considers necessary to make running the business worth his/her while."

Okay, so normal profit is the minimum amount required to pay an owner to keep the doors open, and the owner judges that number based on other businesses/jobs available, just like the poor salt maker. His "normal" profit would be 1fish per day if he can pull 1 gram of salt out of the water each day. If he can't get one fish per gram anymore (because the rich salt maker sells 7 grams for one fish) he leaves the business and moves to cheese making.

If he suddenly can sell one gram for 2 fish, his "excess profit" is one fish. This is a silly idea, however, because new wealth is constantly being produced. If the fisherman improves his fishing technique and has a lot of fish lying around, he'll trade more of them for the same amount of salt (2 fish per gram). This is simply supply and demand meeting, it's not necessarily an "excess profit."

Similarly, if the man is making more than the bare minimum he requires before moving to cheese making, it still doesn't mean it is "excess" per se, because his standards for profit may be less than any other man who may get into salt harvesting. If he requires only one fish per day but the fisherman and the wine maker both eat three fish per day, his profits are "abnormal" to him but would be below normal for the other two men.

Excess profit should really be called "no one else is willing to work for such a small profit." It is the same thing -- the only reason the salt maker can sell 1 gram for 2 fish (when he would theoretically sell it for 1 fish and keep working) is that the other people on the island are unwilling to work 8 hours per day for 2 fish. They require 3 fish to work 8 hours. "Excess profit" implies the market is not at equilibrium, which is never the case (excepting government force/intervention/protection of monopolies).

If competitors are not opening their doors it is because they are unwilling to take the risk and or work as cheaply as the leading vendor (unless we have gov't intervention).

[!Luck]

Crime rates fall as wealth of the society rises and in countries that have similar belief systems, look the same, or have high penalties. The middle east cuts off hands for simple theft. They don't have many people stealing. My main recommendation is to get more salt on the island, automatically reducing crime rates.

Do you have any proof of "the middle east has less people stealing than other countries?"

Wealth may reduce some types of crimes. But I don't think that more wealth would make people less likely to drink and drive? Do you disagree?

We all want more salt, or GDP, if you will. I don't think anyone wants less production, it is how we go about getting it that is interesting.

!luck

[!Luck]

Isn't everyone in your island a monopolist? I think the concept of excess profit is used to show how much a competiting market is over a monopolistic one. To make your example more relevant you would need to compare an island with 66 people with 22 producing salt. What is the price then, how rich is the country? Then compare it against an island where one salt producer was able to buy/force all other salt makers out. Then compare how rich that island is. See which one is richer. I suspect you will never agree with me here. You use the island examples and it over simplifies too many things. Competition being the case.

[Lyric]

Do you have any proof of "the middle east has less people stealing than other countries?"

List of countries by intentional homicide rate - Wikipedia, the free encyclopedia

Wealth may reduce some types of crimes. But I don't think that more wealth would make people less likely to drink and drive? Do you disagree?

Poor people drink and abuse drugs more than rich people. A rise from poverty into a productive long and healthy life = less drunk driving.

We all want more salt, or GDP, if you will. I don't think anyone wants less production, it is how we go about getting it that is interesting.



!luck

IDK about that, Bill seems to think more money doesn't improve the islander's happiness/quality of life, but yes, I see your point. More salt doesn't automatically mean better life.

[Lyric]

Isn't everyone in your island a monopolist? I think the concept of excess profit is used to show how much a competiting market is over a monopolistic one. To make your example more relevant you would need to compare an island with 66 people with 22 producing salt. What is the price then, how rich is the country? Then compare it against an island where one salt producer was able to buy/force all other salt makers out. Then compare how rich that island is. See which one is richer. I suspect you will never agree with me here. You use the island examples and it over simplifies too many things. Competition being the case.

Okay we have 22 guys making salt. One of them gets really good at it over the years and begins lowering his price gradually because he has more to sell. Gradually the 22 other guys drop out of the business and get into other things because their "normal" profit becomes too low and they are not as good at pulling salt as the leader. The leader gradually drops the price until all 21 others are out, and he keeps the price level there. If he raises his price even slightly, the last guy to drop out of the biz will come back and begin selling salt again, and if he goes back to the original price when there were 22 guys pulling salt, most of the 22 will come back to the business again.

The leader has what most consider a "monopoly," but it's not harmful. It only means that he was so good at harvesting that he was able to provide it more and more cheaply to other islanders and the only reason the 21 others are gone is because they didn't want to work that hard for so little money. The monopolist leader harvester still doesn't have the ability to raise prices, and has no "control" of the market in salt -- if he fucks up the other guys jump right back into salt making.

Actually dangerous monopolies use force to raise prices; in a free system monopolies are no more dangerous than a guy on an island who is better at making salt than everyone else.

[CoccoBill]

First, let's agree that there is more salt on the island. We already agreed that salt is a form of wealth. This is step two. Step three can be discussing the benefit of more salt on the island. Do you agree that the island without charity has more salt?

No, I'm not entirely convinced that there will be more salt. I would think that everyone being able to take part in the salt gathering endeavor would more than counter any negative effects of demotivation from marginally smaller gains for the most wealthy. Your island analogy fails again, since it assumes there's one equal type of economical activity, that anyone can take part of without any assistance regardless of background and circumstances. Life isn't that simple. You're trying to assess a car by only looking at a piston.

Crime rates fall as wealth of the society rises and in countries that have similar belief systems, look the same, or have high penalties. The middle east cuts off hands for simple theft. They don't have many people stealing. My main recommendation is to get more salt on the island, automatically reducing crime rates.

Several studies have shown that harsher penalties do not affect crime rate and just having more salt on the island collectively doesn't achieve anything, unless each individual has more.

[IowaSkinsFan]

I would think that everyone being able to take part in the salt gathering endeavor would more than counter any negative effects of demotivation from marginally smaller gains for the most wealthy. .

Absolute and relative advantage begs the differ. Back to the island, we have two people who live off bananas and nuts. Person A can produce 5 banana bunches per hour and 20 nuts per hr. Person B can produce 3 banana bunches per hr and 30 nuts per hr. Given an 8 hour day, if A makes only bananas and B makes only nuts, they will have a total of 40 banana bunches and 240 nuts. This is much more than if they didn't take advantage of their productive advantages.

[!Luck]

Lyric, you seem to disagree with fairly well established economic theory. You once again ignore barriers to entry.

It seems like you don't really believe monopolies exist, in any real sense.

Thank you for your replies, this has been informative.

!luck

[Lyric]

Lyric, you seem to disagree with fairly well established economic theory. You once again ignore barriers to entry.

It seems like you don't really believe monopolies exist, in any real sense.

Thank you for your replies, this has been informative.

!luck

Barriers to entry come later, when all the salt makers have huge machines that took time and labor to build. Today barriers are also created by gov't. In the beginning the barriers don't exist, and it is helpful to us because islanders who are able-bodied can all harvest salt. Today we have come a long way and most industries have created such large machines that only some men are rich enough to enter the biz, but there are still plenty of them. And many industries are public companies collectively owned by the general population. If Morton jacks up salt prices GE enters to compete in exactly the same way as islanders with a working body.

I prefer to think about the meaning and history of economic terms and decide if try make sense. I've found that many common ideas do not; we take them at face value without questioning how valid they are, or even what they really mean. We took ten pages to define "wealth!"

[Lyric]

It seems like you don't really believe monopolies exist, in any real sense.

!luck

They exist only because government creates them. In a free market they don't really exist/don't hurt anyone. Today we have myriad monopolies in health care, banking, and law... Unions are monopolies on skilled labor enforced by gov't. All of them keep income high for MDs lawyers bankers and plumbers in NYC. Strangly all of the above are regarded as very expensive (or overpaid) but most people don't realize why.

Other regulations create cartels, like th FDA. It keeps profits high for a group of large drug makers by keeping smaller drug makers from entering the market, and blocks alternative medicine or herbal drug makers from competing as well by stopping them from telling you what the herb does on the label, and if any "natural" product gains too much market share it is shut down. (wiki Zycam and Airborn for good examples.)