Free Market as Forest

Avatar

Erik Kain

Erik writes about video games at Forbes and politics at Mother Jones. He's the contributor of The League though he hasn't written much here lately. He can be found occasionally composing 140 character cultural analysis on Twitter.

Related Post Roulette

94 Responses

  1. Avatar Barry
    Ignored
    says:

    I like this analogy – and in the case of the financial sector, it would take decades of work *against* the short-term interests of the economic elites to bring things to the point where a truly free market wouldn’t torch the economy.Report

  2. Avatar BeFreer
    Ignored
    says:

    E.D.-

    You do know that Carson says that because of our industrial overcapacity most rent-seeking activity has gone into the FIRE sector (Finance, Insurance, Real Estate)?Report

  3. Avatar Francis
    Ignored
    says:

    I largely agree.

    As a threshold matter, there’s no such thing as free markets. Markets exist only within a social, political and economic system that will enforce the contracts. While that system can be pretty basic (ie, tribal) in a barter economy, by the time you’re exchanging the complex array of goods and services found in our economy you need a robust state.

    But through history, states have mostly existed as the means by which the powerful control the weak. The very idea of a middle class that can wield substantial political power is (depending where you look around the world) only about 150 years old or less. And the idea of the welfare state — in which the state provides services traditionally provided by family — is only about 75 years old.

    So crony capitalism and crony economics has a much much longer history than allegedly free markets.

    This, to me, is the biggest problem with the entire libertarian idea. Balko and others, including some who write here, write passionately about the idea of the government doing less. But when it actually comes to the government doing less, somehow it’s always the case that the libertarians align themselves with the conservatives and vote for the government to do less in representing the interests of the middle class. It never comes around to the government doing less to represent the interests of the rich.

    I equate liberty with freedom. But there are different kinds of freedom out there, like the freedom to be able to leave a job without being exposed to devastating financial loss due to loss of health insurance coverage. Obamacare if it’s implemented properly will massively increase people’s freedom. Another big freedom is to be free of other people’s externalities. The banking system meltdown imposed a huge externality on the American taxpayer. Coal plants do so every day.

    Where are the libertarians in support of EPA’s efforts to curb pollution externalities? Nowhere. Where are the libertarians lining up to fund primary challenges to conservatives who gutted the financial reform bill? Nowhere. Where is the libertarian solution that can pass Congress to the problem of funding the delivery of health care? Silence.

    The Democrats are not the party of angels. They are as corrupt, self-centered and narrow-minded as most any other modern political party in an industrialized nation. But at least they pretend that the State can serve the interests of the middle class. The modern Republican party seems to believe that the rich should have their way and everyone else is on their own.Report

    • Avatar Jaybird in reply to Francis
      Ignored
      says:

      Only if votes for Ralph Nader and for Michael Badnarik count as votes for the Republican Party does it make sense to argue that Libertarians align themselves with Conservatives.

      The Libertarians in my circle who voted for real parties (less than half) in 2006 and 2008 all went Blue. There was serious discussion of “Liberaltarianism” until the second the returns were counted a second time.Report

    • Avatar BlaiseP in reply to Francis
      Ignored
      says:

      In defense of the Libertarian, he has been preaching your sermon to the letter for many years and been considered a crank. The old joke goes: “If a Libertarian’s house catches fire, can he call the fire department?” Yes he can. The Libertarian asks only for some proof the service is needed and cannot be done more efficiently by private enterprise.

      The first fire departments were private enterprises, writing what was for all practical purposes an insurance policy: they came under the wing of the state when it became obvious the non-insured houses were a threat to those that were.

      Libertarians don’t like pollution any more than the next guy. It’s a question of whose ox is being gored. If the big mining outfits and big gummint get in bed with each other, the Libertarian would say that’s Mo’ Big Gummint screwing the Individual, and it is.

      Look, I’m a Liberal. I see the need for regulation, but I’ll be damned if I’m going to support some agenda which can’t justify itself on a cost basis. I’m pretty sure the Libertarians and I have this in common.Report

  4. Avatar BlaiseP
    Ignored
    says:

    The Amazon seems to be an enormous garden gone to seed, according to a theory afoot.

    Today, Guatemala has a population of perhaps 13 million: at the time of the Classic Maya, it may have been as high as 20 million. If so, it would have been almost completely under cultivation. The culture died and the jungle returned.

    The Romans cut down a good deal of the Hercynian Forest in an effort to subdue the people who lived in it. What remains is because the rulers prohibited hunting and regulated the cutting of wood.

    The Sundarabans, a vast mangrove forest, one of the last remaining sanctuaries of the tiger and many other species, was the first “national park”, if you will.

    In Guatemala, I run a Spanish language school. Over the years, I’ve had to find things for do-gooders to do. Up near Chichicastenango, I’ve started a tree nursery, converting clear-cut land into shade-grown coffee. I don’t sell coffee bushes, I grow six species of shade tree saplings under which the coffee will grow, in coordination with a reforestation campaign. Those trees feed the birds which will shit on the coffee bushes and fertilize them.

    Elsewhere I said there are no forests. There are only individual trees, the soil in which they grow, the rain that falls on them, their pollinators and seed distributors. And us, the human beings. You point to the well-meaning if misguided efforts to put out the fires of California: the redwood cone opens to release its seeds in the presence of fires. Without that seed falling into a freshly-burned patch of ground, it cannot compete with the shade-loving plants. And redwoods require huge amounts of water: therefore they concentrate near streams.

    I love trees, always have. Didn’t have many of them when I was a kid, and the few that grew in Niger all had thorns. The ones we did have were planted by my old man, neem trees, lemon trees, mangoes, grown from saplings brought up from Kano in the back of the old Jeep in a galvanized tin tub. Up there in the sand on the edge of the desert, Halilu would water them with buckets, put up chicken wire around them to keep the goats from chewing off the bark, fertilize them from the compost heap. And there was the ancient gao tree I was afraid of out to the north, its old branches the abode of vultures and cobras and mambas and an owl.

    You will never see a wild forest. Man’s presence in that forest means it isn’t wild. Your odor wafts away in the wind, telling every creature who detects it that you are a meat-eater, that your clothes are washed with sulfonates, that you wash your hair with sodium lauryl sulfate, that your deodorant contains denatured alcohol.

    And you will never see a free market. Every aspect of a market is regulated as Boyle’s Law of Gases governs the pressure in an air tank. The more risk, the more regulation is required, both from within and without. We preserve aspects we want to see, crack down on elements we don’t. We encourage trade with other nations via “free” trade agreements, crimp down on that trade with tariffs and taxes. Other countries regulate the percentage of ownership, limiting majority ownership to citizens: I am a minority owner in my own businesses in Guatemala. Unlike Boyle’s Law, markets don’t always distribute market forces equitably and those inequities define otherwise-perfect markets.

    We planted our gardens and groves and let them go to seed. We tolerated the buildup of flammable underbrush and in 2008, we had our Big Fire. We put that fire out, flooding it with borrowed capital but the underbrush problem still remains. The solution is clear, not only do we need to tolerate the small fires, we must actively burn out the underbrush.Report

  5. Avatar DensityDuck
    Ignored
    says:

    “When lumber operations began, people would put out the fires as soon as they began.”

    Near where I live, in Santa Cruz, environmentalists have declared brush-clearing to have “severe environmental impact”, and have sued on multiple occasions to stop it happening. Because, y’know, it’s the environemnt, and people are doing things to it, and that’s bad and stuff. The result, as you describe, is huge fires that burn people’s houses down and wipe out thousand-year-old redwood groves.

    The local corporations and property owners would be quite happy to engage in brush-clearing, which would protect the value of their property.

    ****

    This analogy dovetails neatly with yours. Financial regulatory activity could be seen as brush-clearing activity. And, during the run-up to the Great Financial Crisis, it was decided that clearing away those brushes had a serious environmental impact, because some of those “brushes” were loans made so that poor people could buy houses. However, there was *also* the assumption that the forest’s owners would do an okay job clearing the brushes themselves, and the government didn’t need to go poking its nose into things.Report

    • Avatar BlaiseP in reply to DensityDuck
      Ignored
      says:

      Your analogy is rather more apt than you suppose. We let people build at the edges of these ill managed forests without enforcing firebreak laws. As we moved off the valley floor and up into the canyons, risk varied with the improved views.

      The Great Financial Crisis was brought on, not by folks intent on getting po’ people into houses, those loans were doing fine. The problem was the speculators who built without any regulation at all. The parallels with the S&L crisis are very good. The S&Ls got into speculative business real estate, led along like so many patsies into the high-rollers room at the back of the casino to play a little chemin de fer by the developers. The only difference between Bush41’s crisis and Bush/Obama’s crisis was a different aspect of deregulation: the repeal of Glass-Steagall instead of the S&L deregulation.Report

  6. Avatar E.C. Gach
    Ignored
    says:

    Interesting post E.D., just one point of clarification:

    “That seems to be the fundamental problem facing a truly free market. The forest will burn horribly if we take a laissez-faire approach to forest-fire-fighting now that the markets are so protected.”

    Are you implying that at some time T in the past a more laissez-faire approach would have worked well because conditions would have been closer to those of a free/open market? And that it is only now, how ever many decades/centuries in that, due to the shaping of the economic landscape by powerful interest groups, we have little choice than to embrace some form of limited intervention?Report

  7. Avatar Jason Kuznicki
    Ignored
    says:

    Analogies to ecosystems are excellent, I agree. I’d add to my libertarian friends that they cut both ways, too.Report

  8. Avatar Kevin Carson
    Ignored
    says:

    Thanks, Erik. That’s a great analogy. I’m not sure I have any especially satisfactory answers to “how do we get there from here?”

    But my general approach is that of Roderick Long and Jim Henley: get rid of the shackles before you get rid of the crutches. That means the priority is to first get rid of all the artificial scarcities and monopolies that divert rents to the privileged classes, and let the market break up the big concentrations of wealth and over-large enterprises. Then the safety net stuff and regulatory constraints that genuinely inhibit corporate wrongdoing will be largely moot.

    In practical terms, that means eliminating all corporate welfare, dismantling the M-I complex and all those other complexes, and putting the tax savings into increasing the standard deduction. It means repealing copyright and patent law. It means repealing Taft-Hartley. It means repealing all the entry barriers and impositions of artificially high capitalization and overhead costs on microenterprise in the informal and household economy. It means, in short, cutting welfare from the top down and taxes from the bottom up.

    But I really don’t think political action is even viable, to tell the truth. It’s far more cost-effective to divert resources into circumventing the law than into changing it. It makes more sense to take advantage of the liberatory potential of new technologies and forms of organization to (in the Wobbly slogan) build the structure of the new society within the shell of the old. The imploding capital outlays and overhead costs required for information/cultural production, thanks to the desktop revolution, and for physical production thanks to cheap micromanufacturing technologies, mean that for the first time in centuries the advantage the propertied classes get large accumulations of capital and land are being rapidly nullified. When a garage factory with homebrew CNC tools costing six months’ wages can produce stuff that once required a multi-million dollar plant, and intensive raised-bed techniques can produce many more times per acre than conventional mechanized farming, the owning classes will find themselves with lots and lots of idle plant and fallow land and nobody to work them.Report

    • Avatar DensityDuck in reply to Kevin Carson
      Ignored
      says:

      …didn’t Wickard v. Filburn establish the appropriate legal response to an artisan who fabricates products for his own use which he might have bought in a store?Report

    • Avatar 62across in reply to Kevin Carson
      Ignored
      says:

      Kevin –

      I, too, like the “get rid of the shackles before you get rid of the crutches” axiom. I think it’s obvious that the dismantling of systems that divert rents to the privileged is a requirement for moving from the forest where we are to a forest more economically free.

      Though I agree with the potential of technology to nullify some of the advantage held by the wealthiest, I don’t see how it can obviate the need for some political action. In the end, government is the only way to change tax policy, repeal artificial barriers to entry and defund the military/industrial complex. I agree that such political action is not very viable right now with the government and press captured by the plutocrats, but it has to happen. That’s why I think the first step needs to be diminishing the importance of money in elections.Report

      • Avatar Koz in reply to 62across
        Ignored
        says:

        Money doesn’t rule in politics, and especially not now in America. Americans have preferences and ideas, and they want them propagated into the political culture. And they’re less willing to trade those things for money now than at any time of my life.Report

        • Avatar 62across in reply to Koz
          Ignored
          says:

          Can you back this sentiment up with anything? Data would be preferred, but an anecdote would be better than a blanket assertion such as this.Report

          • Avatar Koz in reply to 62across
            Ignored
            says:

            Obviously this is a matter of opinion more than fact, but for me at least it’s pretty persuasive nonetheless.

            http://www.thenextright.com/patrick-ruffini/does-money-even-matter-in-elections-anymore

            Politics now is about message. The best message wins.Report

            • Avatar 62across in reply to Koz
              Ignored
              says:

              Sadly, the question in the title of Ruffini’s post is not answered by the post itself. The lesson of Terry McAuliffe is that no amount of money can make up for a poor candidate, with no message, running a weak campaign. I can see why you found this claim persuasive; it seems somewhat obvious to me. (See Meg Whitman or Carly Fiorina in California for further evidence of this phenomenon.)

              Nonetheless, the claim that Money can’t make up for everything else is about a hundred miles away from your assertion that Money doesn’t rule in politics (especially now). A guy with a giant pile of money manages to lose to two other guys with slightly less giant piles of money. So what?? To even get in the game, all these people need such a immense war-chest that it is absolutely required that they go, hat in hand, to the moneybags for support. Not surprisingly, the moneybags expect a return on their investment! So, the politicians, regardless of stripe, become captured by the source of what they need to remain in the game.

              The moneybags own the media as well, so we are told repeatedly to look the other way, this is all natural and good – it’s free speech to boot.

              Now, you show me a candidate who can win an election at state or federal level on message and charisma alone, then multiply that candidate enough times to form a coalition strong enough to counter all the others who’ve been captured by the moneybags and then you’ll convince me that Money doesn’t rule in politics.

              I won’t be holding my breath.Report

              • Avatar Koz in reply to 62across
                Ignored
                says:

                “To even get in the game, all these people need such a immense war-chest that it is absolutely required that they go, hat in hand, to the moneybags for support. “

                I disagree. For whoever establishes credibility at effectively representing a significant group of people, the money finds them in a big hurry. Eg, Ron Paul but not limited to him.Report

              • Avatar 62across in reply to Koz
                Ignored
                says:

                Care to list the legislation Rep. Paul has managed to get passed? That’s some coalition he’s got there.

                You’re sort of making my point for me.Report

              • Avatar Koz in reply to 62across
                Ignored
                says:

                It could be. I suspect at bottom we may not have much disagreement here. My point (and Ruffini’s point) is that to the extent money is required in politics, money follows message.

                Though, I’m not getting your last response. Ron Paul raised a trillion dollars or whatever in an hour because he represented a lot of antiwar dissident Republicans. Ie, people who were in no mood to compromise any part of their political views. Therefore, they wanted to devote their time and money to win, lose, or draw w/ Dr. Paul.

                My point is, the entire electorate is moving this way.Report

  9. Avatar Barry
    Ignored
    says:

    Kevin, thanks for the reminder – I liked the way that Jim put it.

    I’m not trying to be a back-stabber here, but Jason Kuznicki had a post up trashing public sector unions. Following his suggestions would result in (a) less power opposing the elites, which would then be followed by (b) more money going to the elites, and the cycle continues.Report

    • Avatar Superluminar in reply to Barry
      Ignored
      says:

      Well that could be because he’s in the pockets of the Koch brothers… 😉Report

    • Avatar tom van dyke in reply to Barry
      Ignored
      says:

      It’s funny [not too funny]—the talking point has gone from defending public unions in their own right to serving as a partisan balance to [need we say evil] corporations.

      At least now we admit it’s partisan politics and not their actual merit or even “social justice,” since they are clearly overpaid compared to the quality of the product they provide.

      Mickey Kaus was onto the new debating tactic back on Feb 28:

      “Isn’t it odd that the defense of unionism on the left by Paul Krugman and Mother Jones‘ Kevin Drum focuses almost exclusively on labor’s role as “countervailing” political power to business–especially its role in supporting the Democratic party with money and manpower?

      Time was pro-labor economists argued mainly about the actual effect of unions within individual firms and industries–they raised wages, we were told, not only redistributing profits but providing workers with a “voice” that even resulted in increased productivity.

      You don’t hear these arguments that much anymore. After the collapse of two of the three big UAW auto firms–beaten in the market by non-union American factories run by Honda, Hyundai and Toyota–the idea the unions actually help employers compete has apparently become too implausible for Drum and Krugman to advance with a straight face.”

      Read more: http://dailycaller.com/kausfiles/page/4/#ixzz1Gi5isKygReport

      • Avatar Chris in reply to tom van dyke
        Ignored
        says:

        Can someone tell me what the hell Tom’s talking about? Is he just injecting an only loosely related (in that it’s about unions) political gotchya into the thread, or have his biases become so pervasive that he reads them into everything?Report

      • Avatar DensityDuck in reply to tom van dyke
        Ignored
        says:

        I do think it’s funny how the argument is “power has grown too concentrated, the only possible response is for whatever power’s left to be further concentrated!”Report

        • Avatar tom van dyke in reply to DensityDuck
          Ignored
          says:

          Aye, DD. From the very unsympathetic Michael Lind @ Salon:

          “But the argument that unions are good because they multiply the number of Democratic voters has no appeal beyond Democratic partisans. And the domination of the union movement by public sector workers makes it easy for conservatives to claim that the politicians elected and funded by public sector unions are no more than the puppets of shadowy public sector union bosses. The argument that the corporate corruption of politics is even worse than the political influence of public sector unions implicitly, if inadvertently, cedes the right’s talking point.”Report

      • Avatar 62across in reply to tom van dyke
        Ignored
        says:

        Tom –

        I’m not sure what reposting Kaus’ article adds to this particular conversation.

        Though both Kaus and Drum argue that public sector unions are ineffective as a “countervailing” political power to business, neither suggest a “countervailing” force isn’t needed. That is not inconsistent with the positions held by E.D here or by Kevin C. in the quote above or in this thread.

        If you want to dismiss the idea of corporations as “evil” or rather as overly powerful in the current balance of our economy (a more honest interpretation of those you are debating with), you are going to need to find another link to make your point.Report

        • Avatar tom van dyke in reply to 62across
          Ignored
          says:

          Sirs, I was responding directly to the comment trashing JasonK by “Barry.” Hassle him first if your genuine concern is relevance.

          As for the OP, I’m not only in favor of “Pity-charity liberalism,” I’m for honestly calling it what it is.

          As for the trees and forest thing, I’m not really stimulated by the analogy.

          As for the Reign of Terror of the MBAs, perhaps it will wind down. Efficiency is good, but it’s not dynamic. An athlete [or a tree] can only lose so much weight before it can no longer function.

          So if there’s nothing else, gentlemen, I’m going bowling. Not Bowling Alone. On a team. 😉Report

          • Avatar Chris in reply to tom van dyke
            Ignored
            says:

            Tom, whether you realize it or not, and I’m quite sure you don’t, unions have always been about serving as a balance to capital, which in our time is often in the form of corporations. That’s what unions were created for, as the industrial revolution created an imbalance, not, as the guest poster so oddly put it a week or two ago, insuring a minimum level of something or other. This isn’t a partisan thing, or at least it doesn’t have to be. It’s the very nature of unions to balance against capital. The fact that it’s become a partisan thing shows little more than on which side one of the player’s in the partisan game’s bread is buttered. Of course, Democrats are equally in bed with “evil corporations” (which aren’t evil, they’re just amoral), but at least they make a pretense of thinking about the balance. Of course, the fact that unions have been dying in this country for the last 30 years shows that it’s little more than a pretense. Democrats ultimately know on which side their bread is buttered, too.Report

            • Avatar tom van dyke in reply to Chris
              Ignored
              says:

              Chris, per Kaus, you again stipulate perhaps unintentionally that the public union thing is partisan more than about the necessity of protecting the worker.

              The industrial revolution did indeed leave the workers naked before the power of capital. However, today’s public sector predators are protected by US labor laws that didn’t exist in the bad olde days, and many have civil service protection on top of that.

              [I call them predators because they have won through partisan politics and manipulation what they have not earned by value or merit.]

              The distinction between public and private unions is necessary. To sweep them all together cheats the argument; as Mr. Koz notes, the public sector employees “do not represent the depradations of private capital.” Their enemy is us, their fellow citizens.

              As for the private unions, with membership down under 10% from a high of over 30% [a pattern echoed in Europe as well], again, OSHA protects worker health and safety, and US and state labor laws protect against stuff like harassment and wrongful termination.

              EDK’s new enthusiasm for unions may be barking up a tree that’s dying or dead. On the plus, they are a victim of their success, or let’s say the triumph of their principles; what’s left is mostly their negatives, such as their own graft and greed, and defending the incompetent or corrupt union member.

              http://pajamasmedia.com/instapundit/116832/

              [I did appreciate that you allowed the Dems tap the corporate money tree, too, if not in strict balance with the GOP, at least in approximate balance. Obama got more than McCain, I believe. Corporations probably favor Reps on general principles, but aren’t powerful enough to control the entire process. They smelled a loser in McCain and went the other way.]Report

              • Avatar Chris in reply to tom van dyke
                Ignored
                says:

                Tom, as I’ve said previously on this blog, public sector unions are a difficult case. One of the main reasons it’s become a big issue for liberals (not necessarily Democrats, as some obviously don’t care) is that they see public sector unions as the only remaining prominent salient of organized labor. It’s a battle ground less because public sector unions make sense from a labor perspective than because the right has so undercut private sector unions in favor of capital (and that means in favor of corporations) that liberals have to hold onto whatever they can, union-wise.

                That doesn’t mean that public sector unions aren’t justified, and that they aren’t justified on broadly similar grounds to private sector unions, it’s just that the case is less straightforward since there’s not a direct, or at least transparent, relationship between the government and capital.

                It may be true that there are politicians who support unions because they get money from them, but pretending that’s surprising is like pretending that it’s surprising Republicans support the oil industry because they get money from it. In both cases, it has little or nothing to do with why people who aren’t receiving money from whichever interest group we’re talking about support those groups. But you know, for you, everything is about bias: lioberals/Democrats are biased, and Tom (and those who think like him) is right, so none of this will matter to you.Report

              • Avatar tom van dyke in reply to Chris
                Ignored
                says:

                Well, Chris, you’ve basically conceded my arguments then accused me of partisan bias, thank you very much.

                Actually, you’d find me a bit of a softy on labor via Thomas Aquinas and “Just Wage,” all in favor of gov’t “pity charity” and no denier of the too-cozy illicit relationship between gov’t and corporations that’s as old as Adam Smith.

                But that would keep me out of the box you’re trying to fit me into, that of an inhuman and inhumane “conservative,” the straw man that keeps on giving.

                BTW, I’m fully with the NFL players, and find the owners every bit the cigar-smoking gargoyles of corporate legend. I’m quite proud of Los Angeles all these years telling these rapacious rent-seekers to take a hike when it comes to public funding for a stadium to hold their gladiator games.

                As for the private unions, they reward mediocrity more than excellence, and this is a bad fit for an age that depends on innovation.

                As for dreams of a more “fair” sharing of risk and reward with labor, the story of the rise and fall of Saturn Car Co. is a hurdle to such pie-in-the-sky theorizing—in the end, the unions didn’t want to share the risk. This is a fundamental difference between labor and capital.Report

              • Avatar Chris in reply to tom van dyke
                Ignored
                says:

                Tom, but it’s not just a partisan issue. There are fundamental reasons why liberals — which is not to say Democratic politicians, necessarily — favor labor over capital in many if not most situations. It has to do with values. You know, those things you’re always harping on? It’s become a partisan issue of late largely because the right made it one (as Governor Walker made quite explicit).Report

              • Avatar tom van dyke in reply to Chris
                Ignored
                says:

                Clarity, por favor, Chris.

                First, per our Mr. Koz, public unions are not in tension with capital. I’m more neutral on capital vs. labor: each has their value in the scheme of things, and I don’t favor one over the other. Most of the shitholes of the world—which represent man’s natural state, poverty and shitholiness—would trade their unfair and dysfunctional systems for our unfair but functional corporate one.

                Back to Gov. Walker, the partisan tension existed before he got into office [and Kasich, and Jerry Brown] as was the impending bankruptcy, and it was created by the public sector unions [by taking an ownership stake in the Demo Party] vs. the people.

                While the situation appeared sustainable, this corrupt arrangement was back-burnered. Not now, however. The Tea Party’s greatest effect was the near-sweep of America’s statehouses, and an overdue sweeping up of the unsustainable status quo.

                As for values, I’ll just say that I’m a natural law guy like my friend Aquinas, which actually means we must work first from human nature as we find it, not a priori theorizing. You attempt to use “values” here as a rhetorical weapon, but its “liberality” is really no more than a sentiment: “I’m for the little guy.” But we are responsible for the consequences of our actions driven by sentiments—destroying a man’s job in the name of “fairness” is Pyhrric morality.

                Look, if Communism actually worked, I’d be for it. If the failed Saturn Auto Co. had worked, I’d be all for it. If the teachers were doing a better job [and I admit it would be more a miraculous job, since social factors are at the root of most education failures], then I’d be all for biting the bullet more.

                But [in order], it doesn’t; it didn’t; and the teachers and other public union workers aren’t. We are paying top dollar for mediocrity, and worse, getting the entire unsustainable Democrat/progressive agenda in the process. [What was it, 20% of the delegates to last Demo national convention was unionized teachers? The religious right would kill for that deal, not only political influence but paychecks and pensions to boot!]

                I’m all for values, and have a few of my own that I’m willing to sacrifice for. But not the ones we’re discussing.Report

              • Avatar BlaiseP in reply to Chris
                Ignored
                says:

                Don’t kid yourself. Those shitholes are every bit as corporate-run as anywhere. The government/business relationship is really great, too. No taxes, just bribes, and no EEOC or OSHA regs, either.Report

              • Avatar tom van dyke in reply to Chris
                Ignored
                says:

                Mr. Blaise, they’d gladly trade their shitholes of 2011 for America of 1850-1940, the Bad Olde Days. They did, and do.

                Trying to keep a proper geo-socio-historical perspective here.Report

              • Avatar BlaiseP in reply to Chris
                Ignored
                says:

                Actually, there’s quite up-to-date. Do you really think anywhere with a runway long enough to land a 747 hasn’t been recently visited by any number of jackasses with briefcases, intent on doing business?

                Time for you to catch up from the 1850s. Dr. Livingstone isn’t running around in Darkest Africa under his pith helmet. The Chinese are.Report

              • Avatar tom van dyke in reply to Chris
                Ignored
                says:

                Mr. Blaise, globe-trotting cigar-chewing exploitationist corporate gargoyles except now they’re Chinese?

                Yes, I’m aware of that. But the Chinese throw their excess newly-born daughters into the slop bucket.

                We can only hope that other cultures will not succumb to such a low view of The Dignity of Man.

                Back in the day, they said that in capitalism man exploits man, but in communism it’s the other way around. The Chi-Coms have the best of both worlds!

                I do thank you for updating me about the America of the 1850 onward; the difference is that no sane man is emigrating to China 2011.

                [Except Norks, of course. There’s always somewhere that sucks less than where you are, and North Korea is the worst of all possible worlds.

                Or not, eh, BlaiseP? An interesting geo-socio-political thought experiment…]Report

        • Avatar Koz in reply to 62across
          Ignored
          says:

          “That is not inconsistent with the positions held by E.D here or by Kevin C. in the quote above or in this thread.”

          Oh, I think it is. The point being, that labor unions, according to this idea, are a countervailing power to their employers. That’s nonstarter for public sector unions because public employers are supposed to represent the public interest and in any event do not represent the depredations of private capital. In reality, until Scott Walker et al came around, public sector employers and public sector unions were co-conspirators against the interest of the citizens and in favor of the establishment.Report

          • Avatar 62across in reply to Koz
            Ignored
            says:

            I’m not defending unions, private or public sector, as much as pointing out the need for a countervailing force against the depredations of private capital. Unions in this argument are just the boogeymen raised to divert attention away from the plutocrats who are really working against the “interests of the citizens.”Report

            • Avatar Koz in reply to 62across
              Ignored
              says:

              Ok, even if we accept for the sake of argument that we need countervailing power against the strength of private capital, public sector unions don’t do that.

              On the other hand we do have a crisis in public finance, and that the state level that means excess compensation, especially benefits, to state employees who are disproportionately members of public employee unions. To fix this, we lower these benefits which is interpreted, more or less correctly, as opposition to the interests of public sector unions.Report

              • Avatar 62across in reply to Koz
                Ignored
                says:

                You keep going back to the public sector unions. If I concede all your points about them, can we move on to something else?

                Because while we are over here talking about how the unions are stealing dimes from “the people” there’s a much more powerful group over there stealing dollars and convincing folks like you that the “crisis” in public finance can’t possibly be eased by taxing them marginally more.Report

              • Avatar tom van dyke in reply to 62across
                Ignored
                says:

                Mr. 62, you have apparently conceded the public union question, which was Mr. Koz’ and my concern per the current crisis.

                Mickey Kaus’ observation too, if we can remember back a few posts. Not that stopped the attempt to delegitimize him.

                Since you originally gave me the business, I’ll input here, and thereafter leave you and Mr. Koz to each other’s tender mercies and God bless you both.

                But clearly, Mr. 62, you explicitly want to change the subject—as Mickey Kaus observed and predicted weeks ago—and I don’t blame you for asking to “move on.” It’s in the playbook since that Clinton guy.

                You keep going back to the public sector unions. If I concede all your points about them, can we move on to something else?

                I don’t blame you for wanting to moveon.org to something else, Mr. 62. ANYTHING else.

                Obama’s bracket picks. I think he played it just a little safe going with all the #1 seeds to make the Final Four.

                But then again, he has more free time to follow college basketball more than I do.

                😉Report

              • Avatar Koz in reply to tom van dyke
                Ignored
                says:

                For 62across, there’s been a tendency among some liberals to think Mickey Kaus is the devilspawn. I’ve always been unsympathetic to this point of view because he can always be taken up on the merits instead of ad hominem-ed.

                Where he’s quoted above (link isn’t quite correct btw), he’s actually talking more about private sector unions any way and their lack of countervailing power. Because their presence is being drawn down they can’t function as you wish.

                As far as what is a countervailing power to capital, I can only say, what are we, chopped liver? Ultimately we have to contribute goods and services that the world wants and is willing to pay for. If we can’t, I think we’re in for a rough ride, unions or no unions.Report

              • Avatar 62across in reply to tom van dyke
                Ignored
                says:

                Hey tom –

                Take a deep breath and when you’ve gathered yourself, go back to the top of this thread and reread E.D.’s OP. You’ll find exactly zero references to public sector unions. Rather, the OP is about how to move to a free market system from our current system of entrenched favoritism. As this topic interests me infinitely more than unions do, I joined that conversation. I’ve changed no subject.

                Granted, Barry provided you an opening to steer the discussion back to your “unions are the cause of our current crisis” bugaboo, but my comments have been on point and any “business” I gave you was only in an effort to prevent you hijacking the thread back to that well beaten horse.

                Alas, I am no match for your diversion skills, so keep wailing away at that poor carcass.Report

              • Avatar Koz in reply to 62across
                Ignored
                says:

                Ok, then we should probably clarify the context a little better because one or other of us is seems to be missing it, probably me.

                In particular, my point was in relation to the overall direction of this blog for the last month or so, especially Erik’s posts. Ie, Wisconsin et al. And the controversies regarding Wisconsin were about public sector unions. Just like you note, my point was limited to that.

                I also don’t necessarily accept the idea that the depredations of private capital should be handled in the ways you suggest. It seems like you’ve got two ideas: 1. unions 2. taxes.

                I think private sector unions might help in this context or another, but not the way they function in cases like the UAW. More than that, I don’t think that private sector unions are going to get enough penetration matter anyway.

                As far as taxes go, I we can (and in some cases maybe we should) raise taxes but that’s you are correct that I don’t believe that is capable of solving our crisis in public finance. We can’t raise enough revenue. If this is bothersome for you, you should look it up. In particular, to look at the actual revenue under various historical regimes instead of looking lustfully at higher tax rates.Report

              • Avatar 62across in reply to Koz
                Ignored
                says:

                Koz –

                Clarification was a good idea. For the most part, I have not engaged in the broader discussion here at LOOG started by the events in Madison.

                My context has been this very post we are commenting on, the one that leaves the public sector union debate behind to look instead at how we might move from our current system of entrenched favoritism to something closer to a free market.

                I think the mixture in our mixed economy is grossly out of balance in favor of private capital, particularly the FIRE sector. Contrary to what you allege, I am in favor of any and all ideas on how to manage this imbalance, save for one: do nothing – the market will self-correct.Report

              • Avatar Koz in reply to 62across
                Ignored
                says:

                Ok, I see your point. I think that things are going to be more difficult than you’d like. Part of what’s going on is that there’s a lot of capital in FIRE because that’s where its fiduciaries can control and manipulate it. There’s a very strong disincentive to investing capital in other sectors of the economy where the political risk is too high.

                The point being, political risk is not about Argentina any more. It’s here. And it goes beyond operational or local jurisdiction issues (though they are there), but all the way to the macroeconomy. Investment depends on the possibility of being able to realize income streams far into the future and those revenue streams are being severely discounted due to the lack of overall stability in the American economy.

                My beef with Erik’s OP is that he can support those kind of interventions (ie, “front-end redistribution”), but that has little if anything to do with a free market.Report

  10. Avatar Tony Comstock
    Ignored
    says:

    “Rocky Mountain lodgepole pine produces serotinous cones which do not open at maturity because they are sealed shut by a resinous bond between the cone scales. These cones remain on the tree for years and require temperatures between 113 and 140 degrees F (45-60 C) to melt the resin and release the seed. In nature, only forest fires generate temperatures of this magnitude within a tree’s crown.”Report

  11. Avatar tom van dyke
    Ignored
    says:

    Saturn, R.I.P.

    Oddly, “Roger & Me” Smith was the driving force behind its creation.

    I suppose the ossified mgmt at GM was ultimately responsible for Saturn cratering [I didn’t read the whole thing, and I’m sure mileage varies depending on who’s writing the history].

    But what’s missing in this union thing—which has been deflected into a discussion of [need we say evil] corporations—is that corporations are like any other establishment of a certain age populated by humans—it’s CYA first, success later.

    It’s the nature of institutions to rise and fall—not just businesses—and no amount of unionizing or gov’t intervention or army of MBAs can stave off entropy forever.

    [In fact, the evil union bosses have behaved pretty much like the evil corporation execs, and seen their empire collapse as well.]Report

    • Avatar Mike Schilling in reply to tom van dyke
      Ignored
      says:

      Saturn had a policy that their car prices were the actual prices: pay it or don’t, no haggling. People were so relieved by that that they’d overpay compared to comparable models from Saturn’s competitors. It’s an interesting comment on capitalism.Report

      • Avatar DensityDuck in reply to Mike Schilling
        Ignored
        says:

        Define “overpay”. “overpay based on the best possible price that anyone could possibly have negotiated the seller down to” isn’t exactly a blistering indictment of Saturn’s predatory sales policies.Report

        • Avatar Jesse Ewiak in reply to DensityDuck
          Ignored
          says:

          I think overpay means, ‘cost more than a comparable make of car from another company’ (ie. Toyota, Ford,etc.).Report

          • Avatar Mike Schilling in reply to Jesse Ewiak
            Ignored
            says:

            What Jesse said. And my point is that bargaining, one of the central skills required to succeed in business, is something many people find so distasteful that they’ll spend significant cash to avoid it.Report

            • Avatar Jason Kuznicki in reply to Mike Schilling
              Ignored
              says:

              In our culture, and for consumer goods, particularly those where the abundance of competitors drive the price down anyway. (Note that people still routinely haggle, and without complaint, about houses, works of art, and other goods with few close substitutes.)

              Pretty big qualifications, don’t you think?Report

              • Avatar Mike Schilling in reply to Jason Kuznicki
                Ignored
                says:

                Most people haggle about houses at second-hand; a big part of the service real estate agents provide is to buffer that process, and they get a substantial commission for it.

                That this is peculiar to our culture, I’ll grant you.Report

  12. Avatar David Cheatham
    Ignored
    says:

    While this article is very insightful, it missed the _other_ problem that causes mismanagement of corporations, and that fixing would lead to a huge decrease in utterly stupid decisions by management.

    Namely, that half the owners of a corporations wish to see stock prices temporarily go up so they can sell some stock and make a profit. That is their ‘corporate goal’. So corporations bring in someone who will raise stock prices by making incredibly stupid long-term decisions, like lay off half the company or threaten a union or whatever, stock prices go up, tada, they get a bonus, everyone is happy.

    A year later, of course, stock prices drop back down as the stupid decisions catch up with the company, but wait, neverfear, the current stockholders have found the next SuperCEO to leap in and do something stupid to temporarily bump up stock prices. Rinse, repeat.

    So we have _two_ layers of stupidity. We have the middle management which could usually have 90% of them removed with no effect on productivity, and who’s major job is to justify themselves. And we have the top management who don’t give a damn about ‘producing things’, they care only about ‘getting people to want our stock’.

    It’s amazing American company produce anything at all, we’re so…*hold hand to ear like Jon Stewart*…oh, I’m being told American companies do not produce things anymore, my mistake.

    I have a plan that sounds insane: Stock must only be traded once a quarter. Each quarter, the company issues that quarter’s dividends, and then come out with the next quarter’s projection, and, a few days after that, everyone puts in buy and sell orders that are all resolved at a single instant at the end of the day, and that’s it. No one can buy or sell the rest of the quarter.

    No short sales, no speculation, no nothing. You pay your money, and you get three months worth of profits. You like it, you keep owning it, otherwise, you sell it. The purpose of the stock is not to sell the stock, the purpose is to actually share in the profits.Report

    • Avatar David Cheatham in reply to David Cheatham
      Ignored
      says:

      Oh, and unrelated to that, let me address this huge CEO pay thing, or, at least, a common justification for it.

      ‘Sure, it’s unfair, but all those CEOs went to school with each other, and play golf with each other, and all know each other and can get good deals from each other, you have to hire one of them.’

      Let’s just think about this for a second. It’s always presented as ‘getting good deals for the company’, from that direction. But as a _system_, that’s outright admitting that sometimes that the CEO _we’re_ hiring will give ‘good deals’ to other CEOs based on personal friendship.

      Which is _criminal malfeasance_ for a company officer. People are _justifying_ the absurd pay because the leaders of the business company is operating a blatant _criminal conspiracy_ that, apparently, the stockholders have no problem with.

      This is because the stockholders on the board are CEO of other corporations, so those shareholders never complain. But it is still actually, literally, criminal.

      The next time someone attempts to justify executive pay by talking about how the executives ‘know’ people, ask who they know, does this person they know commonly waste company money on people they ‘know’, and do the shareholders of _that_ company know it?

      It’s like me being a cop, and saying “If you want to get out of a ticket, hire me as security for fifty dollars and I’ll come to your hearing with you. When a police officer shows up with the witness, the ticketing officer often gets ‘busy’ and fails to show, so the case is thrown out.”Report

      • Avatar Pat Cahalan in reply to David Cheatham
        Ignored
        says:

        What, you actually want to enforce fraud statutes? Do you know how many people will go to jail?

        And we thought the War on Drugs was causing a population boom!Report

      • Avatar Dave in reply to David Cheatham
        Ignored
        says:

        This is because the stockholders on the board are CEO of other corporations, so those shareholders never complain. But it is still actually, literally, criminal.

        Under what statutes?Report

        • Avatar David Cheatham in reply to Dave
          Ignored
          says:

          Someone deliberately wasting their company’s money to do deals with friends instead of whatever would be the best for their company is called a ‘Breach of Fiduciary Duty’ against the company they are employed for, and is a type of fraud.

          It is also ‘Tortious Interference’ against both the company they work for and the company that _didn’t_ get the contract, as that hypothetical business relationship has been interfered with using fraud.

          Depending on state laws, a single instance of those may or may not be prosecuted under criminal fraud law and may just be a tort. Notice that these are both actions against the company itself, and the corporate veil does not apply, the executive can be personally sued.

          However, a conspiracy to commit such a thing, a system in place that repeatedly does that, is a RICO violation, which _is_ a violation of criminal law.Report

          • Avatar DensityDuck in reply to David Cheatham
            Ignored
            says:

            “Someone deliberately wasting their company’s money to do deals with friends instead of whatever would be the best for their company is called a ‘Breach of Fiduciary Duty’ against the company they are employed for, and is a type of fraud.”

            I know my friend. I know he’ll do a good job (or, at least, an acceptable job) on this thing. How is it a Breach Of Fiduciary Duty for me to give work to someone I know will do it properly? Indeed, wouldn’t stockholders prefer a low-risk option to some fly-by-night guy who’s never done anything before claims he can do it in half the time for half the cost?Report

            • Avatar David Cheatham in reply to DensityDuck
              Ignored
              says:

              Just making up hypothetical justifications for a Breach Of Fiduciary Duty does not mean such a thing does not exist, nor it does mean that it isn’t fraud.

              And we’re talking _million dollar deals_, not hiring someone to wash windows, where trustworthyness might be important. They aren’t _supposed_ to be doing business with ‘a fly-by-night guy’ or ‘a trusted guy’, they aren’t doing business with _people_ at all, they’re doing business with _giant corporations_, and it shouldn’t make the tiniest bit of difference who the guy at the top is.

              Stockholders do not ‘prefer’ a ‘low-risk option’ when CEOs choose who supplies their computers or whatever. They prefer contracts that put all the costs of failure on the damn business that fails to live up to their end of the bargain,with assurances on quality and whatnot. You know, like businesses _already_ do.

              And then after that, they prefer the CEO goes after the _cheapest_ deal that fits the qualifications, instead of manipulating the process so the company buys computers that cost 20% more to throw some business towards an old friend.

              Because that is _fraud_. And it is _illegal_. And it is utterly and completely unpunished, and is used a goddamn _justification_ for the system of insane executive bonuses we have.

              The system is, literally, a extortion racket. Not a metaphorical one, an actual, criminal extortion racket. It is an implicit threat to cause a tort, aka, Tortious Interference, against a company if they don’t do something. It is racketeering, it is a violation of RICO.

              ‘Sure, you could hire some random business major to run the company, but I’m afraid all the other CEOs will just choose not to make any deals with your company, because they don’t choose to do what’s best for their company, as required by law, but instead choose what to do based on who they know.’Report

              • Avatar Dave in reply to David Cheatham
                Ignored
                says:

                Just making up hypothetical justifications for a Breach Of Fiduciary Duty does not mean such a thing does not exist, nor it does mean that it isn’t fraud.

                Of course it exists; however, doing business with pre-existing relationships and going with higher cost options on the basis that the people you are doing business can execute the deal are not breaches of fiduciary duty. You seem to find a lot of wrongdoing where I think little exists.

                They aren’t _supposed_ to be doing business with ‘a fly-by-night guy’ or ‘a trusted guy’, they aren’t doing business with _people_ at all, they’re doing business with _giant corporations_, and it shouldn’t make the tiniest bit of difference who the guy at the top is.

                No, you are not just doing business with “giant corporations”. You are also transacting with individuals. You engage in business because you believe that the people you are engaging in business with can be of value to you and your organization. Yes, there is an element with engaging in business with the corporation but if you’re not comfortable with the people, you don’t do business. Relationships matter, and when those business relationships are significant enough to involve the highest level of senior management, who those people are matters.

                Stockholders do not ‘prefer’ a ‘low-risk option’ when CEOs choose who supplies their computers or whatever. They prefer contracts that put all the costs of failure on the damn business that fails to live up to their end of the bargain,with assurances on quality and whatnot. You know, like businesses _already_ do…And then after that, they prefer the CEO goes after the _cheapest_ deal that fits the qualifications, instead of manipulating the process so the company buys computers that cost 20% more to throw some business towards an old friend…

                You assume way too much, especially that shareholders take that level of interest of sub-senior level management decisions. They generally don’t care. Shareholders primarily care about returns and so long as they get their returns, they are not going to turn their attention to how senior management is running the company (personally, I’d rather see more active shareholder involvement especially against entrenched boards but that’s a different discussion).

                The other problem I have is that you’re making the decision process far too simplistic for my real world experience. It’s not just about the “cheapest” deal that fits a set of qualifications (as if you can just run down a checklist, meet those requirements and go along with the transaction). Relationships matter. The people you do business with matter. The ability of the other party to execute on a given deal matters. There are qualitative elements to a deal.

                Here’s a real world scenario:

                Let’s say I’m the CEO of a real estate company and I’m marketing a portfolio of assets, and I get two offers. Company A offers me $100 million and Company B offers me $98 million. From the perspective of the submitted term sheets, everything is identical.

                However, what I know about Company A is that closing the deal with them will be difficult given that they have that kind of reputation. I also know that they will be more inclined to nickel and dime on every economic point. I know Company B is less prone to doing this and given the existing relationship I have with them, I am far more comfortable with their ability to close at $99 million than I am with Company A at $100 million (I’m also assuming that I don’t even know if A will be at $99 million). I decide to go with Company B.

                According to you, I’ve committed fraud by forgoing $1 million to “do business with a friend”. This is nonsense. I have good faith reasons to believe that the additional million wouldn’t be there when it came time to close the deal. This is the rule. This is how business is conducted (or should be) at every level of an organization. Sure, fraud exists, but your conflating fraud with ordinary business relationships is troubling. Your assertions that this is illegal without citations, links or examples to support your claim is even more troubling.

                Furthermore, your claim of tortious interference has no merit. Tortious interference, as I understand it, mainly applies when a third party interferes with an existing business relationship. Even if it can be applied to a situation where no relationship exists, you’ll be hard pressed to prove that I’ve harmed Company A by not choosing to deal with them on the basis that I think another party is a more suitable fit for the transaction.

                Because that is _fraud_. And it is _illegal_. And it is utterly and completely unpunished, and is used a goddamn _justification_ for the system of insane executive bonuses we have…The system is, literally, a extortion racket. Not a metaphorical one, an actual, criminal extortion racket. It is an implicit threat to cause a tort, aka, Tortious Interference, against a company if they don’t do something. It is racketeering, it is a violation of RICO.

                I get it. You hate the system. You hate the large corporations. You hate the fact that corporate executives get insanely large bonuses while ordinary workers get paid shit. Fine. I’m not going to quibble about those opinions.

                However, you’re making wild ass claims about the illegality of things which are clearly legal and typically done in the course of business. If you wish to disagree, feel free but rather than tell me what we do is illegal, provide the necessary evidence. You haven’t even begun to build a case.

                This is not to say that fraud or tortious interference don’t exist. They just don’t exist as pervasively as you seem to think. You make claims about the law that you can’t support and your understanding of business is questionable based on my 15 years experience in business, including some very large multi-billion dollar transactions.

                You’re going to have to do much better than this.Report

              • Avatar David Cheatham in reply to Dave
                Ignored
                says:

                Of course it exists; however, doing business with pre-existing relationships and going with higher cost options on the basis that the people you are doing business can execute the deal are not breaches of fiduciary duty. You seem to find a lot of wrongdoing where I think little exists.

                You seem to be inventing a lot of what you think I’ve said. I have no objection with businesses going with other companies they have worked with before. I have no objection to whatever sort of _business_ qualifications that companies make deals within, or if they use pre-existing relationships as one of the criteria, or even the sole criteria. (Well, I have no legal objection, but it is sorta stupid and I wouldn’t invest in such a company.)

                I objected to business relationships, in a publicly traded company, existing because of _personal acquaintance_ with the CEOs of other companies, not because the last work done with them was good. Because that is, tada, illegal.

                You assume way too much, especially that shareholders take that level of interest of sub-senior level management decisions.

                Um, no, I _specifically_ said that shareholders are not paying attention. This does not make such behavior legal.

                Sure, fraud exists, but your conflating fraud with ordinary business relationships is troubling.

                Your conflating personal relationship of executives with ‘business relationships’ is much more troubling. That is not a business relationship.

                A business relationship is IBM and Microsoft, not Samuel J. Palmisano and Steve Ballmer. IBM and MS have a long and weird history, and it’s perfectly acceptable for IBM not to start a new joint project with MS, considering how screwed over they got on their last joint project of OS/2, and instead go with, for example, Apple Computers. (Which they actually did with the PowerPC thing.)

                It is not acceptable for IBM to not enter a joint contract with MS and go with Apple because Palmisano and Steve Jobs were both in Beta Theta Pi at Johns Hopkins, and they’re good friends. (Note: Not Steve Job’s actual history, it is a hypothetical.)

                Your assertions that this is illegal without citations, links or examples to support your claim is even more troubling.

                I gave an example, something you utterly ignored while attempting to generalize my statements to things they did not apply to, and attempting to gloss over the actual _fraud_ that is being committed. You have attempted to turn my clear statement that ‘making corporate agreements with friends instead of what is in the best interest of the corporation’ into a statement where I claim the sole possible ‘best for the corporation’ factor is price, which I did not say at all.

                And, strangely, in my example, I named the actual tort. I will repeat:

                Someone deliberately wasting their company’s money to do deals with friends instead of whatever would be the best for their company is called a ‘Breach of Fiduciary Duty’ against the company they are employed for, and is a type of fraud.

                The reason I didn’t ‘cite’ anything is because that’s a _state tort_ except for a few Federal industries like banks, and hence rather hard to meaningfully cite the actual law, and the civil law will just say ‘Breach of Fiduciary Duty’, because that’s usually defined by case law. The example I gave is pretty clearly breaching a Duty of Loyalty.
                http://en.wikipedia.org/wiki/Duty_of_Loyalty

                Tortious interference, as I understand it, mainly applies when a third party interferes with an existing business relationship. Even if it can be applied to a situation where no relationship exists

                You perhaps need to do a little more research. Please read:
                http://en.wikipedia.org/wiki/Tortious_interference
                and notice the _second_ type of ‘Tortious interference’, which is fraudulently interfering in a business relationships between two other parties in hopes they will stop working together (or never start) and one of them will work with you instead.

                you’ll be hard pressed to prove that I’ve harmed Company A by not choosing to deal with them on the basis that I think another party is a more suitable fit for the transaction.

                Except that’s the _explicit premise_ of the tort of ‘tortious interference with a business relationship’. That is what that means, you claim you were harmed because someone fraudulently kept you out of an business relationship, and, yes, it’s perfectly reasonable to sue someone _at_ the business you didn’t end up in a relationship with if they committed fraud to keep you out of it. Like I said, do a little reading on this topic.

                However, you’re making wild ass claims about the illegality of things which are clearly legal and typically done in the course of business.

                The fact that they are ‘typically done’ does not make them legal.

                If you wish to disagree, feel free but rather than tell me what we do is illegal, provide the necessary evidence. You haven’t even begun to build a case.

                I’ve repeated named the legal theories under which such behavior is illegal.

                Perhaps instead of imagining I’m talking about whatever you think I’m talking about, you should actually read the examples I gave, and not hallucinate that I said ‘It is not legal to make business deals on other considerations’, and instead read my actual example, which was ‘It is not legal for officers (or directors of the board, while we’re at it) of publicly traded companies to give discounts on business deals to friends.’

                Likewise, instead of just _guessing_ what sort of duties that corporate officers of publicly traded companies are required to follow, you should investigate those duties, and then explain why my actual example in the previous paragraph is not a breach of them.

                And, like I said, all these are torts, not ‘crimes’, per se. They are civil offenses, not criminal…however, such a systematic and structured pattern of torts is certainly enough to qualify under RICO, which actually is a crime.Report

  13. Avatar James K
    Ignored
    says:

    So how do you get from this forest to that one? I’m not sure it’s possible, and even if it were, I’m not sure we’d ever be willing, as a society, to let the small fires burn.

    And so there must be other ways, some mish-mash of market and state and cultural ideas that can at once address our need to let the market ecosystem exist in as free a form as possible, but which also tackles the risk and inequity of such a wild system.

    What I’d recommend is a system that focuses on ameliorating the negative effects of those fires, rather than trying to prevent them. In other words, a good welfare safety net that will stop you from being utterly impoverished by you losing your job. That way the fires burn out, but suffering is contained.

    As to how to make it happen, I don’t think its possible. I’ve pretty much given up on the US, the policy environment just isn’t hospitable enough to reason. Eventually your government will overstress itself to the point where it defaults, and then your economy will be severely disrupted.Report

  14. Avatar Koz
    Ignored
    says:

    Erik, this whole business of front-end redistribution needs some work. Based on what you’ve written so far, it seems you want to add state-enforced barriers of regulation to state-collected burdens of taxation.

    I don’t know if you would agree with this characterization or not, but then again you it’s all a little vague when it comes to specifics anyway. More importantly, I’m wondering why are you supposing that these supposedly “free” markets are in fact free or will produce the sorts of things we associate with free markets after you’re finished.Report

  15. Avatar Rufus F.
    Ignored
    says:

    I’m a believer in the free market too. Granted I believe it’s a highly complex social construct that apparently can’t exist without nearly constant interventions by the state- I think bearing that in mind tends to keep us from getting too starry-eyed about it. After all, the market is the health of the state.Report

  16. Avatar JosiahWarren
    Ignored
    says:

    I am of the good mind that we should seriously consider having a flat tax with zero deductions and a guaranteed subsistence income for everyone.

    This way the tax code is negative up until a certain point – then zero – then mildly progressive until substantially flat for the wealthy…

    At this point we could just end all social welfare spending and truly empower labor against capital.Report

    • Avatar James K in reply to JosiahWarren
      Ignored
      says:

      I support this idea, I think it has something to offer the left and the right.Report

      • Avatar tom van dyke in reply to James K
        Ignored
        says:

        Heh. Albeit an admitted Republican, “tax fairness” has never done anything for me. The better-off benefit from us having a decent country to do business in—capitalism—exponentially more than your non-risk-taking working stiff. Calculus, not arithmetic.

        It’s only when wealth-generation is punished to the point of confiscation—whatever that magic % is—that it becomes counter-productive. I say tax the rich and profitable only up to the point where paying taxes legally is more profitable than paying lawyers their vig to avoid them. Whatever works.

        I’m a conservative, and I don’t mind. 😉

        “Tax fairness” is bullshit no matter whose lips it’s coming from, the “rich paying their fair share” or “flat tax.” The human equation isn’t so much an equation as it is the human calculus, dynamic, not zero-sum.Report

        • Avatar BlaiseP in reply to tom van dyke
          Ignored
          says:

          You need to see how it really works when you have low-low taxes, without any semblance of fairness. Try any banana republic out for size. Everything local is cheap. The poor will look up to you when they shine your shoes. They will be oh-so-grateful.

          They will also kidnap your children. Consider it a tax on rich guys.Report

    • Avatar David Cheatham in reply to JosiahWarren
      Ignored
      says:

      There’s no way we can ‘seriously consider’ that as a society. That communism, you know!

      It’s not, of course, no redistribution of wealth by the government is communism, there’s functionally no such thing as ‘wealth’ under communism.

      But the American people have been very well programmed against the system you propose.Report

  17. Avatar tom van dyke
    Ignored
    says:

    Yes, Mr. Blaise, I understand your birds-eye view of the gutter. It’s “enlightened,” in its way, as you are clearly not a gentleman of the gutter.

    You, in your own autobiographical sketches, work to bring the low to the high, to pull the worst toward the best. This is good. Every man knows the low quite well; few have knowledge of the high. Well done, sir.Report

  18. Avatar Sam M
    Ignored
    says:

    How about instead of a forest, we view the free market as a city street. And cab drivers as a potential union group. Why? because this might be an interesting place to start:

    http://yglesias.thinkprogress.org/2011/03/no-to-taxi-medallions/

    Here is Yglesias’ take on it:

    “You need to ask yourself, what problem is this supposed to solve? The problem it’s supposed to solve is that incumbent cab drivers would like to limit competition and make more money. That’s understandable. I’d like to see a medallion system for new bloggers implemented for the same reason. But it’s still a terrible idea.”

    I wonder how this fits into ED’s vision of what unions do. If you open the cabs up to the free market, there will surely be a race to the bottom, wages will fall, and some day cab drivers will be in the pity-charity category. Unless they get preferential treatment like this.

    Only to give them this preferential treatment means crappy service and mor expensive cab rides for everyone else.

    This seems to put the choice in pretty stark terms.Report

  19. Avatar JosiahWarren
    Ignored
    says:

    Sam-

    This is the EXACT problem Carson is addressing…

    The state granting of privilege creates law-based property (in this case taxi medallions) which creates scarcity rents.

    Every aspect of the society we have set-up is about enclosing the natural and social commons – shifting risk in the form of externalities and creating and capturing economic rent to legitimize rent-seeking activities.

    The wealthy want to keep their privilege but want to do away with it for others and the resulting safety net that is necessary.

    Carson is just pointing out the hypocrisy…Report

    • Avatar Scott in reply to JosiahWarren
      Ignored
      says:

      Josiah:

      And unions don’t artificially drive up wages by creating a scarcity of labor via their demand that only unions workers be employed? Carson only approves of collusion when people get togerther in unions to drive up wages, when companies do it to drive up prices it is bad.Report

  20. Avatar JosiahWarren
    Ignored
    says:

    He thinks that neither should be part of a “freed market” but I believe he suggests (rightfully from my perspective) that we should prioritize how they are addressed and as a mutualist would probably prefer that labor should not be alienated from the ownership of the means of production in the first place.Report

    • Avatar Scott in reply to JosiahWarren
      Ignored
      says:

      Josiah:

      Labor unions are more than welcome to spend their dues buying stock like everyone else. Instead the unions like the UAW, spent it on buying a country club and Democrat politicians. I can understand why they wouldn’t want to buy stock as then they might actually have to be responsible for what happens at the company.Report

      • Avatar JosiahWarren in reply to Scott
        Ignored
        says:

        I don’t disagree but suggest they should have never have traded off long-term ownership & management for short-term wages & benefits.

        But, if we are going to legalize rent-seeking and therefore the political means to having a claim on others labor is less exertion well the labor unions are no dummies!Report

        • Avatar Barry in reply to JosiahWarren
          Ignored
          says:

          “I don’t disagree but suggest they should have never have traded off long-term ownership & management for short-term wages & benefits.”

          I think that at the time it might have been the best deal they could cut; the elites would have died before giving up ownership/management power, and the unions would have been hit by the anti-communist drive much harder.

          And remember that Taft-Hartley was what? 1947? The right was *always* against unions, from the begining.Report

          • Avatar David Cheatham in reply to Barry
            Ignored
            says:

            And remember that Taft-Hartley was what? 1947? The right was *always* against unions, from the begining.

            It’s probably worth mentioning that ‘rich vs poor’ has been the norm so far back in American history that it’s English history. It’s not that the right was ‘against’ unions so much as the left was unions. Basically, the second we got rid of official ‘class’ in this country, it just turned into ‘money’.

            It’s also why the Democrats were the racist party for so long. Black people ‘took the jobs’. Only the rich could afford to be egalitarian.

            Until that strange and beautiful point in American history where the somehow the poor on the left stopped that, and decided to try to help all poor…

            …and that strange and ugly point a little later in American history where the rich on the right figured out that centuries of racism didn’t disappear overnight, and those people still voted.

            At least the left’s racism was ‘honest’. When some factory owner hires 50 black men as scabs to union bust, well, I get it. When workers refuse en mass to work next to black people, thus lowering the pool of possible workers and drive up wages, I get it. It’s morally wrong, and an idiotic plan to start with (Much better to work together, like they eventually did.), but it’s honest.

            Racism from the top, however, is just manipulate dishonesty. ‘Hey, you poor people! At least you’re not black.’Report

      • Avatar David Cheatham in reply to Scott
        Ignored
        says:

        Um, that would be because they have to buy politicians or the right will destroy unions. You know, like they’re trying right now?

        ‘Look at that idiot, he wasted all his money on self-defense.’Report

      • Avatar Barry in reply to Scott
        Ignored
        says:

        BTW, when I was there, they did buy lots of stock. And when the bailouts came, for 10 to 100 x less than Wall St got, the unions took hits.

        But of course, that wouldn’t fit in with your worldview.Report

  21. Avatar Scott
    Ignored
    says:

    Apparently, unions are now equating the fight for their benefits with the struggle by African Americans for civil rights. It might be funny if it weren’t so pathetic.

    http://washingtonexaminer.com/politics/2011/03/union-equates-lavish-benefits-black-civil-rightsReport

  22. Avatar israel
    Ignored
    says:

    What fucking is it ? thaks xDReport

Leave a Reply

Your email address will not be published. Required fields are marked *