On Markets

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402 Responses

  1. Avatar Damon says:

    So, start with just markets, without the qualifier “free.” What is a market? Blaise P. claims
    “markets exist only because regulation makes them possible,”

    I lol-ed.

    A market suggests to me more than two individuals. After all, prices (even in barter) generally come from many transactions, but I think that’s a bit of a quibble as I generally concur with your line of reasoning.Report

  2. Avatar BlaiseP says:

    Let’s return to the definition itself. A market is a place, or, in the case of online markets, a site. But the metaphor still holds. There are three entities in place in any market: a buyer, a seller and a regulator. Usually there’s a fourth element, a bill of sale. Even in the grocery store, you will find regulated scales and inspectors. Money is regulated. In futures markets, contracts are regulated.

    Even in the most primitive of markets, out in the highlands of Guatemala, there’s always a master of the market. Disputes are taken to the master: thumbs on the scales, false weights, false currency, substandard goods and the like. Cheaters are punished by expulsion from the market: without the penalties, the market would lose credence. Market towns grew up around their market squares: vendors were taxed and the towns grew wealthy.

    Cleaner fish? Gotta hand it to you Libertarians. You have some interesting metaphors. That’s not a market.Report

    • Avatar b-psycho says:

      How did the master get to be the master? If his judgement holds such weight and credibility, where’d that come from?Report

      • Avatar BlaiseP says:

        His authority derives from the mayor, but he’s elected by the merchants.Report

        • Avatar b-psycho says:

          Ok, that’s interesting. I would’ve thought getting his position from the merchants themselves would make it easier for the merchants to cheat the public, because they could claim he’s a neutral party operating on behalf of the public when he actually serves them.Report

          • Avatar Kim says:

            in practice the master gets to determine the “correct amount of cheating”, and everyone pretty much abides by that. It might be zero, it might be a lot. But in a decently free information-network, if it’s too bad, then everyone stops trading at the market (and maybe they beat him up).Report

            • Avatar b-psycho says:

              Thus the people entrusted to punish cheating actually enable it to an extent. Though with a free information flow, cheating is punished to the extent even the master can be punished.

              Seems to me the information is the real regulator, in the sense that regulation is popularly portrayed. The ones claiming the authority are just another tool.Report

            • Avatar James Hanley says:

              in a decently free information-network, if it’s too bad, then everyone stops trading at the market (and maybe they beat him up).

              If information’s free enough, why is a master needed?Report

              • Avatar Kim says:

                Enforcement, and settling of disputes before blood is shed.Report

              • Avatar James Hanley says:

                If information is free enough, what would there be disputes be about?Report

              • Avatar Kim says:

                There’s always someone who wants to cheat. Sometimes their other services are valuable enough that they’re allowed to get away with it (somewhat). Other times they get blackballed — eventually.Report

              • Avatar James Hanley says:

                If information is free enough, how do you cheat someone? (Also a reply to BP, just above.)Report

              • Avatar BlaiseP says:

                Heh. Two words. Price discovery.Report

              • Avatar Kim says:

                Perhaps it’s just that people have different values for their own time. I am currently reading Alive, and in it they mention people who in plain view would steal meat while cutting. There were rules saying that one ought not to steal — but everyone stole. And some stole more than others. (though they’d be yelled at if they stole too too much).

                I think this says something about humanity, in general.Report

              • Avatar BlaiseP says:

                No. You explain why a master isn’t needed. Disputes arise in marketplaces. Who’s going to settle the matter?Report

              • Avatar Kim says:

                The Women.
                I don’t have the sources at hand (meaning I may very well be wrong), but I seem to recall that a few tribes had a classic punishment for rapists… where all the women would…Report

              • Avatar BlaiseP says:

                ROFL! The women are the merchants!Report

              • Avatar Kim says:

                naturally. But the point I’m trying to make is that it doesn’t take a single person to rule the marketplace….Report

              • Avatar BlaiseP says:

                Yes, (wearily) one person is the master of the market and he has agents who go through the market and his authority derives from the mayor. There’s only one because there must be one decision. If someone finds stones in his bag of coffee, it’s not put to a vote. The cheater is expelled from the market on the authority of the master.Report

              • Avatar James Hanley says:

                BP, that’s that market. I don’t doubt for a moment the veracity of the claim.

                That market is not every market throughout history.Report

              • Avatar BlaiseP says:

                History? Let’s try some of the real history of the New World, where the Aztecs had markets, controlled by independent judges. In the Aztec world, even the king had little authority over the markets. The Aztecs had a professional merchant class and even ran vertical and futures markets.

                See, here’s the problem, James. The only non-regulated markets you can bring to bear on this dispute are all mythical. Give it up. The real world beckons.Report

              • Avatar Kim says:

                are you saying that my instance is mythical? Because I believe, with a bit of research, I can find at least one place, somewhere, where you didn’t need a single person to make decisions.Report

              • Avatar Shazbot5 says:

                There’s also the question of whether and how much the information market is regulated. Suppose some business secretly pays all of the websites that review the business to make the reviews look good, or suppose we privatize health inspection and somebody pays off the healthcare regulators.

                If the information market is supposed to allow people to make choices such that they don’t need regulation to protect them, what is supposed to protect people from a corrupt information market? Another information market? Well, you see the problem there. You either have a publically controlled regulatory agency that isn’t profit-motivated or if you have an infinite series of prior information markets, which is impossible.

                I’m with Blaise and Karl Marx on this one. A market with no regulation might be logically possible in some weak sense, but that market would be so unlike the good markets that we do have that it wouldn’t survive in the actual world for more than a day. (A truly anarchist society without rule of law is logically possible in the same way, but it couldn’t survive for long and so ot wouldn’t really be a society either.)

                I’m also suprised that Hanley cares about this. I thought the libertarian position is that we should have a minimum of regulations, e.g. certain patent regulations are okay. You needn’t be a no-regulation-maximalist to be a libertarian, you can be a regulation-minimalist.Report

              • Avatar Shazbot5 says:

                I mean “health code inspectors” above.Report

            • Avatar BlaiseP says:

              No. The merchants are competing with each other. They don’t collude because they come from separate towns. Get this straight: the merchants come in from the outlying villages to the market town on a specific day of the week.

              God damn. Sure wish I knew as much about Guatemala. What a fool I’ve been, running a business there since 1986. All that trouble I went to, when I would have had to do was ask you.Report

      • Avatar Kim says:

        charisma and force. Why do you think politicians tend to be alpha males?Report

    • Avatar Kim says:

      And certain tribes were indeed driven out — or even exterminated, by groups of other tribes acting in concert.
      Pre-agricultural, mind.Report

      • Avatar zic says:

        In the eastern half of North America, there was no concept of personal property. There were traditional grounds; places where certain families/tribes did the same activities every year; but this was as much terrain familiarity as anything. Knowing were sweetgrass grew. Trade happened over necessity — flint is uncommon in the northeast, and it was widely traded.

        When Europeans arrived, and asked, ‘who owns this land?’ There was no answer; there was no concept.*

        Point being, even with an understanding of market, both parties might not comprehend any particular market.
        *recommend reading Changes in the Land by William Cronin.Report

        • Avatar James Hanley says:

          In the eastern half of North America, there was no concept of personal property.

          No, this is a myth that has sprung up over the years, begun by colonists who didn’t understand the local property systems because they didn’t match the English system and then sustained by the noble savage myth.

          In reality, property was fairly well personalized, although certainly not to the extent of the English system. Families had their own hunting grounds, to which they had exclusive hunting rights. They could rightfully exclude others from hunting there, but that was the limit of their right–others had what was effectively an easement, to cross that territory to get to their own hunting grounds.

          Agricultural plots were similarly personalized. The plot that was yours was yours, and no one else’s.

          Many Northeastern Indian groups lived in communal family houses, but notice two semi-conflicting notions there: communal and family. It was not exactly personal property, but ownership rights were strictly confined to a very limited group.

          And of course personal items absolutely were personal property. So the concept of persona property was known–the Europeans just didn’t understand their version of it, and they didn’t understand the European version of it. But rights could be, and were, exchanged.

          Trade happened over necessity

          Yes! Exactly. And that’s why it will happen, whether there is a regulator or not.Report

          • Avatar zic says:

            First, I was incorrect, personal property as applied to land ownership.

            But it was still not ‘your’ plot; it was you family’s traditional plot, and you might use it, but your mother’s sister’s daughter’s husband’s brother might come and use it, though he was from a ‘tribe’ 150 miles away. The idea of ownership, of land ownership, simply did not exist as Europeans understood it.

            And the idea of land management, another way of ‘owning land,’ was also misunderstood; the fixed-farms that Europeans were familiar with weren’t there, with the exception of a few long houses that were traditional gathering spots. But the tribes did manage the land; and in ways that were interpreted as lazy and shiftless, not as increasing the supplies of game and encouraging the edge habitats that nurtured.Report

            • Avatar James Hanley says:


              Totally agreed with your last paragraph.

              I think because we Americans still have the English understanding it leads us to still say that the Native Americans didn’t understand property rights. They did; they just had a different structure of property rights than we normally do.Report

              • Avatar zic says:

                James, this is the problem I have with markets; asymmetrical understanding. This was a big problem in the economic collapse; from borrowers not fully understanding what their obligations were to pension fund managers not understanding the CDO’s they were investing client money in. And in both cases, the sellers were often purposely obscuring that critical information.

                In other words, they were parasitic relationships.Report

          • Nob Akimoto Nob Akimoto says:

            The other thing of course was that a vast majority of the natives had died, so there was a lot more space spread out over a lot less people than had existed originally.Report

        • Avatar BlaiseP says:

          That’s a myth. This I have on good authority from the Osage people, for whom I built a language trainer. The Osage sold their lands to the Americans and bought land from the Cherokee. They knew about boundaries. The name of the city “Baton Rouge” came from a red pole set up along the banks of the Mississippi delineating a tribal boundary.

          The Native Americans had an exquisitely refined sense of property and they fought to keep other people off their hunting and fishing territories. They had personal property, too, even in nomadic cultures. In the Inuit culture, surely the most-nomadic of the peoples of North America, the home centred around a set of whale oil lamps, given to her at marriage. All she had to do to divorce her husband was take the lamps out of the home and with her went the children and her things.Report

          • Avatar James Hanley says:

            I always wondered what red stick it referred to.

            Just to add more, some Native American groups even had intellectual property–a person’s songs were his (not sure about her) own, so nobody else was supposed to sing them, but they could be traded to others and become there’s.Report

        • Avatar zic says:

          Just to clarify: when I say ‘personal property,’ in this post, I’m unclear; I meant ‘owning land.’ One person owning a plot of land, as I own the land my house stands upon.Report

    • Avatar James Hanley says:

      A market is a place, or, in the case of online markets, a site. But the metaphor still holds. There are three entities in place in any market: a buyer, a seller and a regulator.

      Assertions without evidence are unimpressive. And no, the Guatamalan market doesn’t prove anything. The existence of market regulators does not prove that markets can’t exist without regulators.

      Who regulates the lawn-mowing/bottle-of-beer market my friend and I have? I’m an ass and didn’t give him the beer after he mowed my little patch of lawn. Do you think the legal system even in our podunk town cares?

      Who regulated the exchanges between an Ojibwa and a Sioux ca. 1500?

      In Congress there is an active market in vote trading. There is no regulator, nobody Rep. Smith can go to to force Rep. Jones to pay back the vote he owes.

      And then there are black markets, some of which have de facto regulation by organized crime groups, but many of which are well outside even their notice. I’d have no trouble finding a local dealer (or several) of marijuana. Who regulates that market? Who would I go to if the pot dealer sold me a bad batch? Who’s going to throw him out of the market?

      Guatamala? The place is damned civilized and over-run with regulatory bureaucrats compared to the examples I’ve given. Don’t the the fact that the most obvious markets have obvious regulators mislead you into thinking that a regulator is a necessity for all markets.

      Money is regulated

      If you took the time to read me before commenting, you’d notice I said that. But money’s not required for a market, so it’s a moot point as far as understanding whether markets require a regulator.Report

      • Avatar BlaiseP says:

        The market at Chichicastenango is not one whit different than a Sumerian marketplace. It’s been in operation since long before the Spanish arrived. Dude, you don’t know Guatemala. The government officials tried to regulate the bus lines and everyone had a good laugh and nobody obeyed those regulations. Those old chicken buses are still in operation. Those Mayans run their own show. Off the main road, the Guatemalan government is irrelevant. But then, you’d have to live there for a good long while to work that out.

        The Ojibwe didn’t trade with the Sioux. They were mortal enemies. But yes, markets did solve the Ojibwe’s problems, for they bought guns from the British and drove the Sioux off.

        Your little lawn mowing episode doesn’t constitute a market. Is your neighbour offering his mowing service to anyone else in exchange for bottles of beer? Big capitalist venture there. Or a thirsty guy with a lawnmower? More of this Cleaner Fish mentality. Dude, I can’t even say Cleaner Fish any more without laughing.

        Ultimately, currency is required for markets to work. For the Japanese, taxes were denominated in bags of rice, but every civilisation works out a currency. The Sumerians had coins. The ancient Chinese developed paper money.

        The black markets are their own problem. They’re run in the inverse: risk varies with reward. Once again, you really need some experience in the real world: no markets are more tightly regulated than black markets. Organised crime springs up immediately. Try selling dope in any major city in this country and soon enough you’ll meet up with Da Regulators, who will be somewhat annoyed to find you operating on their territory. And they will bust out your teefs. Oh yes they will.Report

        • Avatar James Hanley says:

          Dude, as you yourself note, Guatamala is Mayan! So why are you yanking my chain here? The Mayans were a totally bureaucratic state! You’re making a big deal out of how a regulated market that originated in a bureaucratic state proves there can’t be a market without a regulator? Are you kidding me?

          The Ojibwe didn’t trade with the Sioux. They were mortal enemies.
          And yet they traded. The historical evidence demonstrates trade routes that went from the Atlantic Coast to the Rocky Mountains. Of if you want to insist that those two particular tribes didn’t, look at other examples of inter-tribal trade. They happened all over the place. You’ve got a very slender reed for your argument there.

          Your little lawn mowing episode doesn’t constitute a market.
          More argument by assertion.

          Is your neighbour offering his mowing service to anyone else in exchange for bottles of beer? Big capitalist venture there.
          Seriously, this is your argument? It’s not a market unless it’s a capitalist venture? What’s the magic number of offers he has to make to others before it becomes a market?

          Ultimately, currency is required for markets to work
          Again, argument by assertion. You’re not a high schooler, Blaise, so stop arguing like one.

          Try selling dope in any major city in this country and soon enough you’ll meet up with Da Regulators,
          Nonsense. Dope isn’t coke or heroin.

          I can’t even say Cleaner Fish any more without laughing.
          I don’t doubt it. But it doesn’t exactly send me the message I think you’d like me to receive.Report

          • Avatar BlaiseP says:

            You say bureaucracy as if it was a dirty word. Bureaucrats enforce laws.

            Let’s not put too much stock in all that Trade Route business. The peoples of North America were easily conquered and driven off their lands because they didn’t have roads or the wheel or any organising force behind their cultures. The Europeans pitted them against each other. They didn’t even have a common lingua franca, just some pitiful sign language. Sure, I supposed they traded, the Ojibwe made lots of trade goods. But when the White Man arrived and established a fort, he did so at the exact boundaries of those tribal delineations and it was the White Man who dominated trade on that basis. Fort Snelling was set up at the confluence of the Ojibwe and Sioux and it was that fort which became the de-facto trading post because the Sioux and the Ojibwe were mortal enemies.

            You want this discussion to continue? Don’t you call me a high schooler again. In point of fact, I think that’s just about enough out of you. I’ve got better things to do with my day than deal with people who are trying to lecture me on the Mayans and the Ojibwe.Report

            • Avatar James Hanley says:

              You say bureaucracy as if it was a dirty word

              No, I say it as a historical fact. The Mayans had an extensive and effective bureaucracy. It’s the only way you can run such an extensive political system.

              Re: Ojibwa and Sioux. Rarely has enmity prevented all trade between two peoples. But just for the sake of argument, let’s say the Ojibwa and Sioux never engaged in any exchange. For thousands of years, no individuals of those two tribes ever met and decided to trade something instead of try to kill each other. It’s still irrelevant because it’s one case, and doesn’t deal with the reality of unregulated trade between the hundreds of different tribes that occupied North America.

              Don’t you call me a high schooler again.
              Oh, Blaise, that was short-sighted, wasn’t it? Sigh. I just have to now.

              You’re acting like a high schooler, if not a middle schooler.

              (Now what happens?)

              In point of fact, I think that’s just about enough out of you.
              Amusing. Don’t you know giving orders you can’t enforce reveals weakness?Report

              • Avatar BlaiseP says:

                I don’t give orders around here. I don’t have to. It’s enough for me to stop writing and leave you to your little fantasy world where the Native Americans had vast networks of trade. Cahokia’s on your map as a big trading centre. Trouble was, it had been abandoned for many centuries by 1500. Your trade routes are a complete fiction, as is your philosophy. It’s completely dependent on fairy tales. In the real world of commerce and trade, regulation is an absolute necessity for commerce in Anno Domini 2012.

                So live in the past, James. Me, I’ll live in the present, where even black markets are regulated and trade is not conducted in bottles of beer, which even you will admit required currency to purchase.Report

              • Avatar James Hanley says:

                little fantasy world where the Native Americans had vast networks of trade.

                Heh. Dumb Indians couldn’t understand the value of trade; all they could do was fight, is that it? But who do we trust here, Blaise P. or the Smithsonian? (And that map only covers North America west of the Mississippi.)

                We’re not talking vast trading caravans here, ala the Middle East. But

                Cahokia’s on your map as a big trading centre. Trouble was, it had been abandoned for many centuries by 1500.

                Actually, probably only about a century and a half at that time, as it was abandoned in the late 1300s. But I have to admit I hadn’t imagined that anyone would take that map as being a snapshot of a single point in time rather than as showing of routes that existed (and shifted) over many centuries.Report

              • Avatar DensityDuck says:

                Wow, really?

                I’m pretty sure if Hanley had expected that someone would get all smarmy about his choice of graphic, he would have looked for accuracy and not mere illustration.Report

      • “Who regulates the lawn-mowing/bottle-of-beer market my friend and I have? I’m an ass and didn’t give him the beer after he mowed my little patch of lawn. Do you think the legal system even in our podunk town cares?”

        I get what you’re saying, but I wouldn’t be surprised if your neighbor could sue for breach of contract or for relying on a promise, unless there’s some sort of dollar value minimum required.

        Also, when it comes to the black market, doesn’t the state in some sense (although perhaps not in the sense you mean) “regulate” it by outlawing it, and the black market operates in that, err, black or gray area created by the state.

        Again, though, I do get what you’re saying in your post: markets can exist outside of a regulatory regime that we would recognize as a “state.”Report

        • Avatar Kim says:

          Yes. he could sue. Judges are notorious for hating people who waste their time, however. And this sounds like an enormous waste of time.Report

          • Oh, I agree. I also suggest that carrying such a dispute into court would probably violate the neighborhood norms within which Mr. Hanley and his neighbor operate.

            My point, if it has any validity whatsoever, is probably fodder for a future discussion about whether markets are ever “free,” which of course is not supposed to be a subject for this thread.Report

            • Avatar James Hanley says:

              I’m pretty sure it’s below the minimum dollar value. Certainly it could never be worth his time, so I can state with 100% certainty that he’d never do it. Even if it could be taken into court, then the fact that it absolutely never would be makes the court system an irrelevant consideration.Report

    • Avatar LWA (Liberal With Attitude) says:

      Part of what cuases confusion here is that all the definitions can be expanded or narrowed to suit an argument.

      Does “Market” mean a highly complex system like the New York Stock Exchange? Or can it be as simple as monkeys grooming each other?
      Does “Government” mean a system with elected officials, an a parliament? Or can it be as simple as a chief monkey who enforces order?

      Although I will say that a simple market can exist without a government, I would also add that it is extremely rare, and suggest that governments develop pretty quickly as a mechanism that facilitates and enhances markets.

      As evidence of this assertion, I would point to the original post, where the best examples of ungoverned markets are only found in the mists of pre-history or in the animal kingdom.Report

      • Avatar James Hanley says:

        Does “Market” mean a highly complex system like the New York Stock Exchange? Or can it be as simple as monkeys grooming each other?

        Yes, both. One is just a much more highly refined case than another. To say they are both markets is not to say they are identical, but that each is a process of exchanging value for value.

        Does “Government” mean a system with elected officials, an a parliament? Or can it be as simple as a chief monkey who enforces order?
        Governance would encompass both of these. Government would only encompass the former. Government is a subcategory of governance. So “governance” would be the analog to “market.” There surely is a subcategory of “market” that corresponds to the subcategory of “government,” but I’m not sure we have a specific term for it. A poverty of language.Report

        • Avatar LWA (Liberal With Attitude) says:

          We may be jumping ahead of ourselves, since you have written your next post on this matter.
          But lets go with your definitions.

          Is the point here that government regulation is not needed in a modern complex economic system? Or some variant of that?Report

        • Avatar James Hanley says:

          Oh, and to add on, I agree with you that markets without third-party regulation are rare in the modern world, and those that exist are very small. Once government developed it certainly got into the market regulation business very quickly (whether primarily to provide anti-fraud services or primarily so it could tax them, or both).

          And such markets will remain small and fairly rudimentary because they require a fair amount of face to face trust (the “And Then There Were None” story linked to by M. Schilling on another thread today illustrates that very well). As markets get larger, they get more anonymous, and trust breaks down. The great advantage of regulation is that it allows trust (at least enough of it to facilitate exchange) between strangers.

          So in this thread I am not suggesting you’re going to find a lot of extensive and sophisticated markets without regulation, nor am I making an argument against having regulations for markets. I’m just rebutting the claim that a market can’t exist without third-party regulation, nothing more.

          As you suggested, it’s really pretty banal.Report

          • Avatar BlaiseP says:

            It sure is. There’s no such thing as a free market. There never was, except in some fairy tale world. No buyer has ever trusted a seller nor a seller the buyer, unless it’s a con game in operation. There can be no contract without enforceability, a notion very dear to the Libertarians. But who shall enforce a contract, or even declare it binding, if not a regulator? And who shall grant the regulator his mandate?

            In short, the Free Market is a contradiction in terms. Markets can never be free of regulation because trust between parties can be established only by mutual trust in the market itself, with the market taking its toll from each participant for the support of the market floor. You do know how a trading floor pass works, I hope.

            Why not substitute Efficient for Free, so we can quit talking past each other? Markets can be over-regulated or under-regulated, reducing their efficiency. A command economy is over-regulated, an anarchist scheme under-regulated.Report

            • Avatar Shazbot5 says:

              Indeed, even Locke believed society needed a Magistrate to regulate contractts and enforce property rights. It’s almost impossible to have a society without a Magistrate. And you need one for a market too. I doubt Hanley is disputing THAT.Report

              • Avatar James Hanley says:

                And you need one for a market too.

                Depends on the market, is my point. For most of the markets anyone here is likely to point to, we sure do. I’m not sure if anyone is taking this as an argument against having magistrates for our markets, but it’s certainly not that. It’s nothing more than the claim that a market can exist without a magistrate. I’ve said it can only be a rudimentary market. Call it stunted, call it inefficient, call it untrustworthy. No problem. But incapable of existence at all?Report

              • Avatar BlaiseP says:

                Yeah, in your Mythical Market of Yore, where men were men and sheep were nervous.Report

              • Avatar James Hanley says:


              • Avatar Shazbot5 says:

                Indeed, WTF?Report

              • Avatar Shazbot5 says:

                Can you give us an example of this market that has no magistrate?

                Look, I’m big on the belief that damn near everything is logically possible. (Subtle philosophy joke.) And so I believe a completely unregulated market could exist. But some things that are logically possible are entirely implausible and unlikely to exist in the actual world, so much so that we are right to call them “impossible.” For example, it is logically possible that I will be President tomorrow. But it isn’t really possible.

                Forget about the historical examples. Can you give us an example of an unregulated market that contains more than two participants like your lawn mowing example. (I’d say it doesn’t count as a market. Markets have to be, by definition it seems to me, in some sense, open to new participants emtering and making trades. Note that two people might get married out of mutual self-interest, but they are not creating a market. They have a mutual contract, and have traded something, but this isn’t a market because it isn’t open to new participants (unless you are old school Mormon?). Also, could your unregulated market example be an example where people traded things of great value, or things with more than negligible value like a beer or an hour of time?

                If not, you should agree that a completely unregulated market is only possible when a.) the “market”, or so-called market, is only open to people who greatly trust each other like friends, or b.) the “market” only allows trades of things with negligible worth.

                But in the debate between libertarians and liberals we’re usually arguing about markets that would trade things of great worth that would be open to millions of strangers, so the completely unregulated markets referenced in the previous paragraph would be irrelevant to the real debate between libertarians and liberals.


              • Avatar Roger says:


                Despite the noise Blaise is making, I don’t believe this topic is even controversial.

                I have read so many examples and studies of informal markets developing, that I never felt the need to argue as if this is in doubt by anyone today. This is the economic equivalent of arguing over the number of degrees in a triangle

                Classic examples that have been studied in depth are informal markets which developed within prison camps in world war two. Othe examples include markets which develop within prisons on modern times, and black market activity such as the drug trade, or the informal but illegal markets between prostitutes and clients via Craigslists alternatives.

                These and countless others are markets that are not regulated other than through the activities of participants.Report

              • Avatar BlaiseP says:

                Already addressed. Black markets are even more regulated than open markets, complete with enforcers.Report

              • Avatar Roger says:


                How are black markets regulated? Of course they are enforced, but we are not arguing over that word. We are arguing over formal regulations via an external third party. This definitely does not have to be the case in black markets of drugs, prostitution and so forth. Many hookers do not have a pimp, and they still deliver their valued service. There is a market, and it is not a regulated market.Report

              • Avatar BlaiseP says:

                Asked and answered, Roger.Report

              • Avatar Roger says:


                I read the remark you threw out on black markets and totally disagree. Black markets are often self enforced. They often exist independently of an external source of regulation. And if one of the participants chooses to forcibly exclude new entrants, that is self policing too.Report

              • Avatar James Hanley says:


                What makes you sure that the lawnmowing market between me and my neighbor isn’t open to more participants? He likes beer and has plenty of free time.

                Sure, the unregulated market could be something where people trade things of great value. But it’s unlikely to be. The more the value goes up, the higher the level of assurance required, right? That begins to demand an awful lot in the way of trust, so that backstopper of a regulator is almost always going to be demanded by at least one of the participants. But if both are willing to forgo that, they can.

                So I generally agree with your penultimate paragraph. It’s unproblematic to me. I’m not making as large a claim as I’m being challenged on.

                As to your ultimate paragraph, that’s for a later post. As I said, this was just setting a fundamental basis, nothing more. As both LWA and Roger have recognized, this post is not really controversial. Or so it seems to me. I think what’s throwing people off is how unexpected such an uncontroversial post is–surely there must be something more lurking in it? But no, there’s not.Report

              • Avatar Shazbot5 says:

                “Sure, the unregulated market could be something where people trade things of great value. But it’s unlikely to be. The more the value goes up, the higher the level of assurance required, right? That begins to demand an awful lot in the way of trust, so that backstopper of a regulator is almost always going to be demanded by at least one of the participants. But if both are willing to forgo that, they can.”

                I’m glad we agree. I think your oponents mean “markets in general (where sometimes very valuable things are traded) can’t (in the sense of what is plausibe) be unregulated and exist for long”

                As long as you agree with that, I am fine.

                Can we make a deal? I will agree that no one should be allowed to say “markets can’t exist without regulation” if you agree that “markets where valuable things are traded can’t exist without regulation”?


                My point about openess of markets is not as important. I don’t think people would call a game of Monopoly a market, partially because it is closed to other participants and partly because things of little value are traded. I would say the same about your lawn mowing case,

                If you tried to create a little lawn-mowing for beer trading group that was open to the public (bums and non bums, teenagers and human beings, alike!), I expect you would have to have rules (no half-done, lazy jobs, for example, and no old guys demanding too much perfection, only lawns of certain sizes, not the whole of Central Park, etc.) and you would have to have consequences for breaking the rules (expulsion, say) and maybe even a committee to solve disputes. In short, you would need regulation. (You might keep it running if you didn’t advertise it and it wasn’t really open to more than a few close friends. But then I’d argue that it was more like a game of Monopoly or a marriage than a market.)Report

            • Avatar James Hanley says:

              There’s no such thing as a free market.

              Good thing that’s not my argument here then, isn’t it?Report

              • Avatar BlaiseP says:

                Notice also that the word “regulation” is not included. A market is just about people exchanging things based on prices and willingness to pay those prices (i.e., it excludes gift exchange).

                Just people exchanging things.Report

            • Avatar DensityDuck says:

              “No buyer has ever trusted a seller nor a seller the buyer”

              Congratulations, you’ve discovered how wealth is created. When both parties think that they screwed the other guy, it means that both of them traded a less-valued resource for a more-valued one, and the total amount of value in society has therefore increased.Report

              • Avatar James Hanley says:

                “No buyer has ever trusted a seller nor a seller the buyer”

                Personal experience time. How many people have ever trusted someone selling something to them, or someone buying something from them?

                Is it a frightening thought to someone to have gone through life never having trusted anyone you were buying from or selling to?Report

              • Avatar BlaiseP says:

                Not frightening at all. But again, personal experience time, that’s a difference between us, you’re a teacher, me, I’m a contractor. Welcome to the world of capitalism, where handshakes and bottles of beer are no substitute for working contracts, which inevitably contain something resembling:

                This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, notwithstanding the conflict of laws provisions of any state. You irrevocably and unconditionally (i) consent to submit to the exclusive jurisdiction of the state and federal courts in Illinois (the “Illinois Courts”) for any litigation or dispute arising out of or relating to this Agreement or your performance or nonperformance hereunder (including but not limited to collection matters), (ii) agree not to commence any litigation arising out of or relating to this Agreement or the Company’s performance or nonperformance hereunder except in the Illinois Courts, (iii) agree not to plead or claim that such litigation brought therein has been brought in an inconvenient forum, and (iv) agree the Illinois Courts represent the exclusive jurisdiction for all disputes arising out of or relating to this Agreement, or either parties’ performance or nonperformance thereunder.Report

              • Avatar James Hanley says:

                But again, personal experience time, that’s a difference between us, you’re a teacher, me, I’m a contractor.

                Do you really think teachers don’t participate in markets regularly? I just had contractors work on my house, and in a couple of days some other contractors are going to install gutters. I’m about to take my car to my regular mechanic. I buy groceries weekly. I go to the doctor. I buy books.

                I mean, how fucking clueless does a person have to be to think that there’s anyone on this blog that does not participate in markets?

                It’s just your cheap childish way of trying to claim some high ground, show how superior you are. But it doesn’t work, because you’re making a claim that is so ridiculously false that nobody can begin to believe it.Report

              • Avatar BlaiseP says:

                Well, now, James, I wasn’t the one condescending to you about how frightening it was to live and work in the real world. Just how clueless are you, to come around here and attempt to pick a fight with me over some ludicrous shit about what constitutes a market, as if my entire point since I brought it up was that the need for regulation varies with risk?

                You’re good at starting these things, not so good at finishing them. Though, again, that’s just Personal Experience.Report

              • Avatar James Hanley says:


                You said no seller ever trusted a buyer, and no buyer ever trusted a seller.

                I say if that’s been your experience, that’s sad. If that comes across as condescending, so be it. But don’t pretend your experience as a consultant trumps my own experiences about whether buyers and sellers ever trust each other.

                I’ve bought things and trusted the person I was buying from. Not always. But sometimes.

                I’ve sold things and trusted the person I was selling to. Not always. But sometimes.

                Your claim is disproved by my own experience.

                What in the hell possessed you to make such an absolutist claim? There are 6 billion people on the earth right now, and a few billion more have existed throughout history. Consider how many buying/selling exchanges there have been throughout history–we’re talking trillions!

                And yet among those trillions, not once has a buyer trusted a seller, nor a seller trusted a buyer. Sorry, that wouldn’t be believable even if my own personal experience didn’t prove it wrong.

                Please make an argument instead of assertions, and please don’t play that penny ante business of trying to one-up me with your consulting experience. When we talk about software consulting, I’ll listen because I don’t have any experience in it. But if you try to pretend that you being a software consultant and me being an academic means I don’t have any experience in market, that’s when you’re just playing the clown and I start laughing at you.Report

              • Avatar BlaiseP says:

                Yeah, it was condescending and most exceedingly cheezy. I do not trust people — nor should you — regarding contractual agreements which involve me ponying up my hard-earned cash for some promise of future benefit. I want a contract and references and usually a credit check, which happens at this point to be my whole and entire stock in trade for my current firm: probing Equifax and Yodlee and many another such agency for the bona fides of potential investors.

                Your experience is bupkis if you would gently and mendaciously remonstrate with me about my unfounded fears, which even at this pathetic moment you appear willing to partially concede are valid.

                Nor will I accept this crap about Absolutism, not when I have described a linear function, wherein the need for regulation varies directly with risk. You’re starting to sound like Carl Sagan, “billions and billions”, when every scrap of historical information on record, going right back to the Law of Hammurabi points to the need for exactly the sort of regulation and sanction which comprises my point.

                And spare me all that talk about what I do for a living. My business is my clients’ business. For most of that time, it was collecting and validating information so as to eliminate Wishful Thinking and Enforce Policy with artificial intelligence, simply because people can’t be trusted to tell the truth.

                Now grow the hell up. You know perfectly well the world runs on the basis of trust, a scarce enough commodity in all times and all places. Markets require regulators. Even Elinor Ostrom, who you unfortunately and ignorantly referenced, makes the point that regulators are required, even to enforce the laws of the commons.Report

              • Avatar James Hanley says:

                There’s a lot I could respond to there, but I’m going to limit myself to just this one item; one that demonstrates that you actually don’t know whereof you speak.

                Markets require regulators. Even Elinor Ostrom, who you unfortunately and ignorantly referenced, makes the point that regulators are required, even to enforce the laws of the commons.

                That’s a fundamental mis-statement about Ostrom’s work. It is precisely 180 degrees wrong, as the great majority of her work is about self-regulating systems. Let’s look at what Ostrom herself had to say. In the first chapter of Governing the Commons, on pp. 24-25, she says;

                What is missing from…the set of accepted, well-developed theories of human organization – is an adequately specified theory of collective action whereby a group of principals can organize themselves voluntarily to to retain the residuals of their efforts. Examples of self-organized enterprises abound….But until a theoretical explanation – based on human choice – for self-organized and self-governed enterprises is fully developed and accepted, major policy decisions will continue to be undertaken with a presumption that individuals cannot organize themselves and always need to be organized by external authorities (emphasis added)

                The whole book is the effort to provide the theory that will undermine that presumption, the presumption that you hold, and that you falsely attributed to her.

                In the final chapter, on p. 215, Ostrom approvingly quotes economist Robert Sugden, who wrote:

                Most modern economic theory describes a world presided over by a government…ready to rush in to the rescue whenever the market “fails,” … Private individuals, in contrast, are credited with little or no ability to solve collective action problems among themselves. This makes for a distorted view of some important economic and political issues.

                Ostrom then explicitly agrees that this view–your view, the view that third party regulators are always required–is a “distorted view.”

                If you want to talk about Ostrom’s work, you’d better bring your A game. I studied with her, I’ve discussed her work personally face-to-face with her, I’ve sat in her seminars listening to her expound upon these ideas and answer the doubts of skeptical students. And not just her but her colleagues associated with the Workshop in Political Theory and Policy Analysis. Her work forms the foundation of my whole intellectual outlook. If you think you’re going to slip such a fundamentally inaccurate statement of her views by me, you’re deeply in denial.

                But unlike you, Ostrom’s not an absolutist. She’s got a nuanced view that is intelligently qualified. Consider this, from conclusion of Rules, Games and Common-Pool Resources (p. 278):

                Our analysis of successful self-organized (empasis added) CPR institutions makes us optimistic about human capacities to overcome the “social dilemmas” they face. It also makes us pessimistic about the likelihood of self-organized improvements in three types of settings. The first is where individuals have no expectation of mutual trust and no means of building trust through communication and continued interaction. The second is where mistrust is already rampant, and communication and continued interactions do not reduce the level of distrust. The third is where many, but not all, individuals are willing to extend reciprocity to others but lack authority to create their own self-governing (emphasis added) institutions.

                So she’s no Pollyanna. She doesn’t think self-governance will work in every situation. And just like her, neither do I. But she shows that self-governance, institutions that are not regulated by a superior third-party, but only by the participants themselves, are possible when the appropriate conditions are present.

                I’ve got a bit of proprietary pride in Ostrom’s work. If you want to talk about her, you’d better get it right or I’ll damn sure let you know.Report

              • Avatar Chris says:

                James, if I’m not mistaken, you worked or studied with Ostrom at one point, didn’t you?

                I mention this so that maybe Blaise will be a little bit more… careful.Report

              • Avatar James Hanley says:

                I did a post-doc at her workshop in 2001-2002. That’s where I attended her seminars and had opportunities to talk one on one with her. I have a chapter in one of her books (a version of my dissertation, actually).

                She was one of the most honest, kind and generous people I’ve ever known, in addition to being exceptionally intelligent and unbelievably hard-working. An absolute gem of a person.Report

              • Avatar BlaiseP says:

                Well, hurray for the Duck. At last, a few words of reason. I knew you had it in you somewhere. Yes indeedy, capitalism at work, filling the world with good things at less-than-extortionate prices, in grocery stores and grain bins everywhere, using regulated scales and money of known value.Report

              • Avatar James Hanley says:


                Please show me where I’ve said that grocery stores weren’t regulated? You keep pointing to examples of markets that are regulated, which I haven’t suggested aren’t regulated, which leads me to believe you’re trying to misrepresent my argument.

                And you do know you can’t prove a negative by pointing to a bunch of positives, right?Report

              • Avatar BlaiseP says:

                Just you get around to explaining Just people exchanging things. without regulators around. Your entire line of rhetoric is starting to resemble nothing so much as the inverse of the Marxists, who predicted government would wither away. Only in your case, at some point in the distant (and entirely mythical) world, markets didn’t need regulation but now they might.

                Not once in your entire flabby essay did you point out the necessity of regulation without some hinky flapjaw about Strong Men appearing to screw with the markets, again without so much as a scrap of evidence.Report

              • Avatar James Hanley says:

                So you’re neither going to provide evidence of the claim you made about me nor withdraw it? I call that a lack of integrity.Report

              • Avatar wardsmith says:

                Caveat Emptor ring any bells?Report

              • Avatar Stillwater says:

                and the total amount of value in society has therefore increased.

                Er, no. Not necessarily. happiness might have increased. And a subjective determination – summing the two participants expected utility enhancements – might have increased. But objective value hasn’t increased. Somebody got taken for a ride. Monetarily speaking.Report

              • Avatar Roger says:

                By all objective measures, when participants make the exchange, the expected subjective value increases for all participants in the exchange.Report

              • Avatar Stillwater says:

                And sometimes that leads people to lose their ass. Subjectively, but objectively as well.

                But I hear you Roger. The problem is that the measure of value in our society is money, dollars. The very same economists who want us to believe that value is subjectively determined are the ones who always want to put a dollar value on a transaction. I’ve mentioned this before, but for all the talk about subjective utility and preference theory and all that, economists are disinclined to forsake a model whereby subjective utility expectations and preferences can actually be objectively measured. By utiles dollars.Report

              • Avatar James Hanley says:

                The very same economists who want us to believe that value is subjectively determined are the ones who always want to put a dollar value on a transaction.

                Stillwater, what makes you think you and I value a dollar the same? My mom will still stop to pick up a penny, but I won’t.

                All value is subjective, but for practical purposes we need a way to compare our subjective values, and money does that. But it doesn’t mean the money is actually an objective value.

                Consider the example I gave above, of you selling me a pickup truck. To you the truck was worth $1000, and to me it was worth $2000. Another way of saying that is to say that to me $2000 was worth the pickup truck, while to you $2000 was worth two of those pickup trucks. We weren’t valuing the money the same way anymore than we were valuing the pickup truck the same way; we each valued both items subjectively.

                As a liberal, I’m guessing you think that an extra $500 is worth more to a poor person than to, say, Warren Buffet. (Correct me if I’m wrong, please.) But that can’t be so if money is truly an objective measure.Report

              • Avatar Stillwater says:

                All value is subjective, but for practical purposes we need a way to compare our subjective values, and money does that. But it doesn’t mean the money is actually an objective value.

                No, it doesn’t mean that money as an end is an objective value. But Economists of all stripes, and I’ve never read a single one of them, that doesn’t use money as an objective measure of subjective value.Report

              • Avatar Stillwater says:

                Errrr. “…never read a single one who doesn’t…” or something. Or something like that.Report

              • Avatar James Hanley says:

                But Economists of all stripes, and I’ve never read a single one of them, that doesn’t use money as an objective measure of subjective value

                You’re reading them wrong. That’s certainly not the way they understand themselves, nor what they really mean, nor how they want to be read.Report

              • Avatar DensityDuck says:

                ” The very same economists who want us to believe that value is subjectively determined are the ones who always want to put a dollar value on a transaction.”

                That’s because dollars are a convenient shorthand for value.

                “But how can the value of a dollar ever change?”

                Congratulations, you’re a goldbug.Report

              • Avatar Stillwater says:

                Also, when you say “expected subjective value increases”, your including lots of non-economic values in there. And I know you know you are, of course. It’s just that there is another level on which a transaction van be measured, which is in purely economic terms. Eg. as the CEO of a corporation, I might aesthetically want to refrain from destroying the rain forest, but the economic calculus I’m operating under might necessitate that I do so.Report

              • Avatar Kim says:

                or that CEO might want to not murder someone, or not abuse children…
                Some business models are truly awful things. Yay free enterprise! Finder of the most efficient ways to abuse people in far off countries where we needn’t see them on a daily basis.Report

              • Avatar James Hanley says:

                Somebody got taken for a ride. Monetarily speaking.

                Not necessarily. Let’s say you’re selling me your used car. You’re willing to let it go for $1,000, and I’m willing to pay up to $2,000. We settle on $1,500. I walk away thinking I chiseled you out of $500 bucks you could have gotten from me, and you walk away thinking you weaseled an extra $500 bucks from me.

                But neither of us got taken for a ride, monetarily or otherwise, except perhaps during the test drive.

                This is where a microeconomics class really comes in handy, with the concepts of consumer and producer surplus.Report

              • Avatar Mike Schilling says:

                Do people still believe in consumer and producer surplus? Because I keep getting told that workers get paid exactly the marginal value of their labor, and if they get one penny more it’s a sign of socialism or union thuggery.Report

            • Avatar Brian Houser says:

              “There’s no such thing as a free market. There can be no contract without enforceability, a notion very dear to the Libertarians. But who shall enforce a contract, or even declare it binding, if not a regulator?”

              I’ll enforce my own contract, thank you very much. If you agree to pay me a beer to mow your lawn and then don’t give me a beer, I’m going to help myself to the contents of your fridge. It’s fair to say that as the size of a market increases, it makes sense to consider delegating the enforcement of contracts, but it’s not accurate to say you have to.Report

      • Avatar Lyle says:

        I suggest a better reference sample the market in the Indian Ocean between the rise of Islam and the arrival of the Portuguese. It was an extensive market (see A Splendid Exchange) and was how pepper and other goods reached Venice. In this market the idea was there were folks that hired out as what we would call arbitrators to resolve disputes. Both parties would agree when the first agreement was made of how to resolve disputes.Report

    • Avatar Roger says:


      You are skipping norms and protocols which can evolve in a decentralized fashion and going directly to “regulation” which is an institutional solution in more formal markets.

      My post last year on surfing and property rights addresses this attitude.


      • Avatar James Hanley says:

        Oh, man, I soooo wish I’d remembered that and linked to it.Report

      • Avatar BlaiseP says:

        I remember that. So, Mr. Surfer Dude, can you buy a wave?

        Didn’t think so.


        • Avatar DensityDuck says:

          You can’t buy a wave, but you can buy the beach…and hire security guards to chase people off it.Report

        • Avatar wardsmith says:

          Your next wave will be here in 16 seconds. You’re welcome to pay me for it if it makes you feel better. Meanwhile your surfing experience will be oh so much better if you actually purchase a board instead of riding on that barrel stave you found in the dump. In fact the better the board the better the ride.Report

        • Avatar James Hanley says:

          So, Mr. Surfer Dude, can you buy a wave?

          Of course you can. Read Roger’s post again. Now imagine he’s sitting ahead of you in line, the next wave is his according to the local informal surfing rules, when a beauty comes up. Is there anything you would be willing to offer him for the chance to jump in front of him that he would be willing to accept? (“Dude, I’ll wax your board every day for a month if you’ll let me have that one!”) If so, you just bought yourself a wave.Report

          • Avatar BlaiseP says:

            That’s even more bogus than buying a wave. Ask the cleaner fishies lurking down below. They’re nibbling at yer toes.Report

            • Avatar James Hanley says:

              You could try actually making an argument. These types of “nuh uh” responses are intellectually empty.

              Explain to me why my scenario can’t happen. Then we’ll let an actual surfer tell us who’s got it right.Report

              • Avatar James Hanley says:

                Gotta go teach a class. I’ll check back in about 4 hours.Report

              • Avatar DensityDuck says:

                You can tell when BlaiseP realizes that he’s been dumb because he stops actually responding to what you’re saying (although this does not stop him posting, because like most people who learned how to argue by reading flamewars he thinks that whoever posts last wins.)Report

              • Avatar BlaiseP says:

                Poor old Duck. I’ve already gotten poor James to admit the modern world runs on regulated markets. Now he’s down to Certain Rare Instances such as his drunk-ass neighbour who mows his lawn for cold brewskies.

                And Cleaner Fish. Gotta tell you, those Cleaner Fish are just takin’ over. Never mind that they are the regulators who evolved in parallel with those grouper fish who come up for cleaning so as to keep the parasites in check. Oh no, none of that Science Stuff for either you or James.

                Gotta tell you, when he said Ojibwe and Sioux, I smiled and muttered “Now hath God delivered you into my hand.” See, I spent a lot of time learning about Fort Snelling, my hotel was right down the road from it while I was in the Twin Cities area.

                Your shit’s weak.Report

              • Avatar DensityDuck says:

                Translation: “You’re right, I’m done but too stubborn to walk away.”Report

              • Avatar BlaiseP says:

                Do ducks eat Cleaner Fish?Report

              • Avatar Shazbot5 says:

                Well, I agree with Blaise here. And I’ve never read anything by the Duke of Density (“Duck” I says) that I liked.

                But I like Hanley and respect his analytic skills and the work he puts into arguments and find him a good and useful foil.

                I wish you two could find a way to disagree as much without antagonizing each other. I could care less about whether you are rude to each other or who is rude or who started it. Rudeness is hard to determine and sometimes irrelevant and sometimes necessary.

                But I wish you could both argue without bluster, because bluster is so, so boring. No one cares. No one will change their minds about anything either of you write. (So why do anything other than state the argument or just say “I am done with this because you are now, IMO, being rude.”)

                Except maybe Stillwater, and he’ll change his mind again later. 🙂Report

              • Avatar James Hanley says:


                I hear you, but for better or worse I have a real antagonistic streak about a certain type of dishonesty in argument.

                You don’t do that. You asked good questions, and whether I persuaded you or not I found it a worthwhile exchange.Report

              • Avatar Stillwater says:

                Except maybe Stillwater, and he’ll change his mind again later. 🙂

                Eh? What’s this? When have I changed my mind on this issue?Report

              • Avatar Stillwater says:

                Shaz, I’m actually very curious what you mean here. If you think I’m a flip-flopper, I’d like to hear the argument.Report

              • Avatar Shazbot5 says:

                Sorry Still, I was just being silly. I didn’t mean to say you flip flop, just that you are fair minded. I apologize for any offense.Report

              • Avatar James Hanley says:

                I’ve already gotten poor James to admit the modern world runs on regulated markets

                You lie. That’s not something I’ve ever argued against. I’ll give $100 to your favorite charity if you can show where I ever claimed regulated markets weren’t the norm in the modern world. You didn’t “get me” to do anything, and I don’t appreciate you lying about having done so.Report

          • Avatar Shazbot5 says:

            “Dude, I’ll wax your board every day for a month”

            That is prostitution.Report

        • Avatar Roger says:


          You are missing the point. My article wasn’t on the creation of markets, it was on the bottoms up emergent creation of property rights. The point is that people can coordinate their activities to participate in cooperative forms of interaction.

          There is extensive literature on this in game theory. People can create cooperative networks. The essential elements in these networks is that people have the ability to choose who to cooperate with and who not to cooperate with. That they have the ability to remember who plays fair and who cheats. That they have the ability to reach a consensus on what is fair and unfair. That they have the ability to share information on cheaters and cooperators. And finally, that they have the ability to sanction or punish cheaters.*

          There is no requirement that this regulation be formal or external to the participants. That said, as markets get larger and more complex, it makes total sense to specialize and create an impartial judge and enforcer role. As they get even more complex these roles further specialize.Report

          • Avatar BlaiseP says:

            Don’t try to sneak in the idea of “as markets get larger and more complex..” That’s just not going to fly. A cooperative network isn’t a market by anyone’s definition. It’s just interdependence.Report

            • Avatar James Hanley says:

              Actually, markets in general are interdependence. That’s just standard econ theory.Report

              • Avatar Shazbot5 says:

                Every case of interdependence is a market?

                Do you have a citation? I don’t think you’re wrong on what the textbooks say, but I want to see how broad this econ textbook definition really is. Sounds crazy to me. Certainly the natural language term “market” is not as broad as this.

                I am emotionally dependent on my friends and family, and they me, but a “market” we are not, nor would anyone familiar with the natural language term “market” call us a market. Perhaps the econ texts have a problem. (I might like to write about this, so would appreciate your thoughts.)Report

              • Avatar James Hanley says:

                Every case of interdependence is a market?

                Shazbot, please, that’s clearly not what I said. I said markets are interdependence, I didn’t say interdependence is markets. All Xs are Qs != all Qs are Xs.

                That’s basic logic, and there’s no charitable way to interpret me as you did.

                My thoughts? At this point my thoughts are that you’ve abandoned listening and are just looking for points to argue. You started really well, but your last few comments are either twisting my words 180 degrees or insinuating claims I’ve repeatedly rejected.Report

              • Avatar Robert Greer says:

                Well, why NOT think of every case of interdependence as a market? After all, interdependence just means that two parties each bring something to the table. And there are opportunity costs to maintaining the relationship, so there’s scarcity. Different levels of interdependence demand different costs, so there are supply/demand relationships.Report

              • Avatar James Hanley says:

                If you want to make that argument, I’m open to listening. But I wasn’t making it, and the logical structure of my statement doesn’t support the claim that I was making it.

                And the main reason is that I believe–because I’m not a Randian–in love and friendship. I think people can each bring something to the table because they just enjoy each other. I could bring my wife flowers in hopes of getting something in return, or I could bring her flowers just because I lover her and want to make her happy. I could buy my friend lunch because I want him to help me move some furniture, or I could do it just because I like his company. My take would be that a market exchange is motivated solely, or at least primarily, for the desire to get something of value from someone else, whereas relationships have a different motivation. I like my mechanic, but I have no interest in making him happy.

                Humans are by nature social animals. The need for sociality is not itself a market good, although poor imitations of it exist in the market.Report

      • Avatar Shazbot5 says:

        “norms and protocols which can evolve in a decentralized fashion”

        That’s pretty darned controversial. Hobbes and Locke say no way, especially if scarcity is involved. You can build up the norm without an authority, but if people see it in their self-interest to break the norm, you need an authority to enforce it.

        I didn’t read your surfing post, but I would guess that no one could make 100,000 by breaking your communal surf rules, nor could anyone avoid starvation or having to send their children to crappy schools just because they has to obey your rules.

        Presumably, the sort of markets we’re talking about here are the markets that move wealth and resources around, and with those markets there is a temptation to cheat to get ahead. And many would argue (I agree, I think) that you need an enforcement body of some kind to prevent that kind of cheating.

        I also am unsure if cooperative behavior amongst surfers counts as a market. Not that you said it did, but it might be irrelevant as an example to this dispute over whether markets need to be regulated to survive at all.Report

        • Avatar James Hanley says:

          “norms and protocols which can evolve in a decentralized fashion”
          That’s pretty darned controversial. Hobbes and Locke say no way, especially if scarcity is involved

          Hobbes and Locke are, if I may be charitable, a bit outdated. The decentralized evolution of rules is a significant area of study today. The late Elinor Ostrom was one of the leaders of this field.Report

          • Avatar Shazbot5 says:

            I said controversial.

            Their central insights are still widely respected amomgst political philosophers and social scientists. When scarcity is involved in a market and people’s well-being is at stake, you need regulation and enforcement.

            BTW, I thought Ostrom was big on needing courts to regulate private markets. That seems to be Blaise’s point, no? She suggests something like that in this interview. (I might be wrong. It’s a crappy link, but I put a quote below.) http://www.progressive.org/elinor_ostrom_interview.html

            And isn’t Ostrom’s work mostly about a third way of organizing society that is neither a market nor a government controlled state institution? The author of this article seems to chacterize her work that way:


            Henry Farrell at crookedtimber suggests that Ostrom was on Blaise’s side, too, sort of:

            Ostrom stresses repeatedly that even the best functioning markets are undergirded by an array of collective institutions which order people’s market interactions, and that in the absence of such rules, self interested behaviour will have highly adverse consequences. Perhaps the closest parallel to Ostrom’s work is Jane Jacobs’. Obviously, Jacobs was not a social scientist and didn’t write like one, but both straddle the divide between libertarian and left politics in very interesting ways that challenge some of the underlying assumptions of both”


            Ostrom interview:

            “Q: Libertarians have tried to co-opt your work by saying it shows the unsuitability of large-scale, top-down economic arrangements.

            Ostrom: A question is: How do we change some of our governance arrangements so that we can have more trust? We must have a court system, and that court system needs to be reliable and trustworthy. The important thing about large-scale is the court system. For example, you would not have civil rights for people of black origin in the United States but for a federal court system and also the courage of Martin Luther King and others—people who had the courage to challenge, and a legal system where, at least in some places, the right to challenge was legitimate.

            We have a colleague working in Liberia. You had thugs recruiting young kids until recently. Having a legal system that does not allow thugs to capture kids, torment them, and make them use weapons is very important.”Report

            • Avatar James Hanley says:

              isn’t Ostrom’s work mostly about a third way of organizing society that is neither a market nor a government controlled state institution?

              Absolutely. And I’m not claiming anything differently here.

              But as to your bolded part, that “array of collective institutions” can, but definitionally need not, include a government regulator.Report

              • Avatar Shazbot5 says:

                Yeah, but are the regulators that we are talking about necessarily government regulators? Blaise says black markets have enforcers who are regulators. Surely some NGO non-profits can be regulators for things, especially non-market collective things.

                There needs to be some power that the regulator has to punish. I am thinking of unions and guilds and their power to control or influence licensing and malpractice and what not.

                Certainly I can imagine a world with local warlords and a broken, weak government, where the markets aren’t regulated by the government. This is a crappy world, of course.Report

              • Avatar DensityDuck says:

                Bluto, who will beat you up if you try to nick something off his boss’s cart, is not a regulator. He prevents you from taking certain actions, and it’s true that a regulator does that, but what he’s doing is in his own personal self-interest (as an employee). If Bluto were the kind of regulation that Blaise is thinking, he’d kick you for stealing fruit off a cart and then turn around and punch the cart owner for using drilled weights.Report

              • Avatar James Hanley says:

                This. The type of regulator that Blaise is talking about–and as far as I can tell he and I are in agreement about what this type of regulator is/does–enforces the rules against all cheats. He does not just protect his own interest. Whether government or private sector regulator, he operates as a neutral enforcer against all cheats. The drug leader who has you shot for stepping into his turf is not a regulator in that sense. The NGO, for some purposes, very well may be.Report

            • Avatar James Hanley says:

              Oh, and as to her saying we need a court system, she’s talking about in the overall political system. She’s not saying it’s needed in every micro-system or sub-system. It’s important in understanding her to note when she’s talking about top-level political structures (government) and when she’s talking about bottom-up structures (self-governance).

              But as to Blaise’s point, he claimed Ostrom said that even systems for regulating the commons had to have a third-party enforcer, which simply isn’t an accurate statement of her arguments.Report

          • Avatar BlaiseP says:

            Huh? Elinor Ostrom, the woman who said the only way the commons could be maintained was with effective arbitration? Surely not that Elinor Ostrom.Report

            • Avatar James Hanley says:

              She also didn’t say that, although with a generous interpretation (arbitration meaning communication among stake-holders), it’s not so terribly far off the mark.Report

  3. Avatar zic says:

    If I’m reading this correctly, you’re suggesting that symbiotic relationships constitute a market?

    So if you’re going in for the ecosystem models, then there are a host of other types of relationships you have to consider; but first bread down the two types of symbiosis: those where the intwined relationships are required for survival, and those where it provides benefit to one or both members of the interaction. Lichen would be an example of the first, a fungus and algae combined. The second could be demonstrated by the cows in the Guatemala highlands, each with an egret, often perched on the bovine back, that eats the bugs that bug the bovine.

    But there are also parasitic relationships. I hunt and harvest such a fungi; the Chaga mushroom, which is a parasite on birch trees. By your definition, the tree and I have a market going; I remove parasites, the chaga conch which helps extend the trees life, and in return, I get the chaga — which I use to treat inflammation and help keep the constant migraine at bay. But the chaga will, eventually, kill the tree before its prime.

    I’m a big fan of using the natural world to comprehend the world of man. So I have to say this: those relationships described above? Tip of the iceberg. Fractal, all the way down to the microorganism; the fleas on the egret have fleas with their own egrets.

    And some of those fleas on fleas on fleas are parasitic; hell bent on bringing the whole market crashing down, rather they realize it or not. The trespass on the health of the system.Report

  4. Avatar Robert Greer says:

    Great post, James. I think this is very fertile ground for discussions between libertarians and their critics.

    I think your framing of markets as pre-political is accurate, but I’m not sure you appreciate how far this might go. What’s to stop liberals from characterizing redistribution as a kind of market? A leftist economist could apply public choice theory to the workings of government, characterize its actions as a kind of market, and apply the usual libertarian bromides about markets to make an equally Panglossian argument for government infallibility.

    In response to this, libertarians might argue that the use of state violence is illegitimate against propertyholders, but this seems to beg the question of why this private property should be respected. Libertarians seem to forget that before governments can ensure property rights, they will first need to determine which property claims will be respected. But it’s impossible to do this impartially — these are thorny problems — and so all the usual libertarian critiques of government as a meddling instrument of privilege apply even to minarchist schemes. So I think when you say that trade is superior to theft because it normally makes people better off, you’re taking that fertile ground for discussion and sterilizing it. (Unintentionally, I’m sure.)

    I think a good example of the difference between leftists and libertarians is exemplified in the field of advertising. Advertisers often create false needs for poisonous products (e.g. refined sugars), and although the ensuing exchange is free in a literalistic sense, it’s hard to fault lefties for being unsettled or even appalled by it. Of course not all advertising is morally reprobate (nor is all trade) — this is a strawman of the leftist position. The argument is instead that market features are in themselves not foolproof indicators of the ethicality of exchanges, which you yourself admit, although this doesn’t break your stride in hurrying to the defense of property.

    So the question becomes, under what circumstances are market measures reliably ethical?
    I don’t think many leftists would argue that trade between similarly-situated actors is usually mutually beneficial. The problem arises when the interaction between groups of people is predicated on some prior inequality. In the 21st Century, the average black household in America has a net worth one twentieth that of the average white household. Who can doubt that slavery is a substantial explanation for this discrepancy? To be sure, government action hasn’t always helped: the major entitlement programs disproportionately benefit middle-class whites. But this doesn’t make the libertarian assumption of parity in exchange any less preposterous. As long as libertarians abstract from history, leftists are right to interrogate their premises.Report

    • Avatar Kim says:

      I’d critique advertising as such — Libertarians claim that a well-functioning market innovates and creates better things.

      I see advertising as a net drag on the efficiency of a market — much money is being spent on -not giving me what I paid for- [assuming, for the moment, that I am a decent enough judge of what I want, and that I’m not interested in the classist reasoning behind product choice].

      Any market with advertising is not an ideal market (duh. any market with humans is not an ideal market, as we aren’t ideal decision makers).Report

      • Avatar DensityDuck says:

        Without advertising, how are you supposed to know what’s available to buy?

        This is not snark. This is an honest question.

        “Oh well you can just go on the internet and–” And do a search for something categorized by meta tags and webpage content. Which are both forms of advertising.Report

        • Avatar Kim says:

          By knowing the people innovating, of course.
          The next time you buy a product designed by Star Trek Designers,
          you can go ahead and pat Apple on the back.

          On a more serious note, there is much advertising that can be done without costing a corporation a cent. Costco’s pretty damn good about it — have you looked at their business model?

          Perhaps I am not crusading against information, so much as the need to pay people to distribute information for you…Report

  5. Avatar LWA (Liberal With Attitude) says:

    In the spirit of engaging in a productive discussion, I’m fine with stipulating that markets/barter can possibly exist in some primitive form, absent a government.

    Although thsi seems about as shocking as stating that a society can exist without a standing army, or central bank, or even currency.

    Of course, what comes after this premise is a lot more interesting.Report

    • Avatar James Hanley says:


      I agree, it seems to be rather a banal statement. Perhaps everyone will think so except Blaise, for whom it seems to be a shocking lie.Report

  6. Avatar James Hanley says:

    Great post, James. I think this is very fertile ground for discussions between libertarians and their critics.

    Thanks, but based on Blaise’s response, I think you’re being overly optimistic.

    The rest of your comment is far beyond where I want to go right now. As I said, this is not really a political post. I want to start much more simply than all that.Report

  7. Avatar John Howard Griffin says:

    As long as you are defining “market”, why not also define “regulation”.

    Seems important to any discussion about this. For, after all, isn’t “regulation” just a set of rules (and the enforcement of those rules)? Don’t all markets enforce rules? For example, I’d guess that your neighbor would enforce the rules if you didn’t give him the beer. He mows your lawn, you don’t give him beer. He ask for it, you refuse. He stops mowing your lawn (or takes further action…). Sounds like a regulated market to me. It’s just that you and your neighbor are creating and enforcing the regulations.

    You also seem to slip from “regulation” to “external regulation” or “third-party regulation”. I’d expect fairer treatment if you want your position to be treated fairly.Report

    • Avatar James Hanley says:

      For purposes here, I actually did so, noting that both Blaise and I were talking about third party regulation. Of course all markets have at least informal rules. In fact I did keep forgetting to give my neighbor a beer one time, and the next time he mowed the lawn he skipped my section (can’t blame him, eh?).

      But that type of regulation is not what Blaise is demanding is critical–he’s insisting that a third party regulator is required. That’s what I’m rebutting, not the idea that markets have rules.

      All human institutions have rules, but in fact that’s just a tautology since the definition of an institution is “a set of rules, policies or procedures, whether formal or informal.” We can’t talk about anything organized by humans without assuming rules. The relevant questions are what are the rules and who gets to make them. Blaise claims there can’t be an institution called a market that is composed solely of informal rules enforced only by the market participants, but that such an institution can only exist if there are rules enforced by some third party who is not one of the participants.Report

      • Avatar John Howard Griffin says:

        Not sure if this is between you and Blaise, or if you really want to have a discussion between libertarians and liberals.

        In the interests of a broader discussion:

        Blaise claims there can’t be an institution called a market that is composed solely of informal rules enforced only by the market participants, but that such an institution can only exist if there are rules enforced by some third party who is not one of the participants.

        I assume from the above statement, and the OP, that you are taking the former side and Blaise is taking the latter.

        I get stuck on “informal rules” and “only by the market participants”. Who are the market participants? Anyone who barters in the market (buys something or sells something)? Or, anyone who could barter in the market?

        Rather than getting too far into this (if this is really just between you and Blaise), then I wonder if these “informal rules” are not just societal rules. Simple things like: if you say you’ll give him this stuff for that stuff, then you better do that, or there will be consequences. They may not be laws, but I don’t view them as informal. Rather, I view them as (potentially) highly complex and very important for a society to prosper. And, for markets.

        Shorter JHG: some informal rules are only informal because we all already agree on them, and will enforce them as necessary without further thought.Report

        • Avatar James Hanley says:


          I had hoped to reach Blaise, but that seems to have failed. So I’ll happily discuss it with anyone who’s willing to actually have a thoughtful conversation.

          I get stuck on “informal rules” and “only by the market participants”. Who are the market participants? Anyone who barters in the market (buys something or sells something)? Or, anyone who could barter in the market?

          First, in reference to informal rules, you’re right that they’re societal. But I should emphasize what I mean by informal–it doesn’t mean unimportant, it just means unwritten. We have lots of social rules that are not written down anywhere, but that we’re all taught. And they can be powerful–people get really worked up when social rules they grew up with get disobeyed, and often interpret it as social collapse (whereas it’s usually just social change). So I think your final paragraph is right.

          To make myself clear, I don’t in any way dismiss the significance of informal rules. Just the opposite in fact; I think political scientists put too much focus on formal rules and not enough on informal rules. And the reason a market–albeit primarily just a rudimentary one, not an extensive and sophisticated one–can exist without a third-party regulator is precisely because of those informal rules. They’re extremely important.

          As to participants, uhm, you’ve stumped me a bit. I hadn’t thought about the distinction between actual participants and potential participants. I’m not sure if it makes a difference whether we include the potential ones or not. I’m not sure how it would, but I’d listen to an argument that it matters.Report

          • Avatar Shazbot5 says:

            Also, why can’t the regulator also be a participant in a simple market?Report

            • Avatar James Hanley says:

              The regulator has to be external to the participants, because there’s a presumption of disinterestedness. No man can be a judge in his own case, and so on. So trading with the market regulator could be a bit risky, eh? If there’s a dispute, you’ve already lost.

              Of course the regulator can’t wholly opt out of the market, anymore than any of us can. He has to buy stuff to eat and wear, too. But presumably he’s prevented from being the regulator for his own transactions.

              Which doesn’t mean it always works that way, people being people, but that’s the idea.Report

              • Avatar Shazbot5 says:

                Why don’t we just sometimes trust the regulator to be disinterested? That COULD happen, no? I mean it isn’t plausible (like a completely unregulated market isn’t plausible, on my view), but we could imagine a possible world where the market is regulated by a special person who is also a participant. If not, why is this inconceivable?Report

              • Avatar James Hanley says:


                How many people do you know of who you would be willing to be disinterested when their own interests are at stake? If you find one, let him/her be the regulator and a participant; I’ll go along because I’d also trust them to be incorruptible by others.

                I’m just saying it’s not likely you’ll find many, so it’s not likely to be the norm.Report

              • Avatar Shazbot5 says:

                Well, I agree about the fact that it is implausible (“impossible” in a sense) that a regulator would cheat if he was also a participant. People cheat a lot (not always, but regularly) when it is very much in their self-interest.

                But this is sort of my point about unregulated markets that are somewhat open to strangers to participate in and that trade goods that are worth more than a pittance (like a beer or an hour of lawn mowing or who gets to go next at surfing.)

                I know lots of people who make “trades” with family and friends and on trust alone. But those trades are not really occuring in a market, unless you define market so loosely so as to include any mutually beneficially relationship, even a marriage.

                in general, though, people will cheat, so there needs to be a regulator. An information market will have cheaters too. So it needs a regulator, too.Report

              • Avatar James Hanley says:

                I define markets as exchange of value for value. Some economists would suggest that includes what happens within a marriage, others are hesitant to go that far.Report

              • Avatar Stillwater says:

                Isn’t there a public aspect to a market? It has to be … well … non-private, an open, publicly proclaimed invitation to engage in exchanges of goods and services? It just strikes me as wrong to think that two people engaging in a private and closed exchange of baseball cards for bubble gum constitutes a market.Report

              • Avatar Stillwater says:

                {{And in case you already answered that in the OP, reading it is next on my list.}}Report

              • Avatar Shazbot5 says:

                If a market is any “value for value” action, is there an interaction that human beings engage in that isn’t a market?

                Indeed, every action I have with the state is “value for value”, so the government and I constitute a market, too. The soldier fights for me and I support him (with tax money or even just praise). I pay my taxes and get benefits. Etc.

                And since the government’s interactions with me aren’t regulated by some meta-government, then the market that the government and the people constitute is, by your definition, a free market.

                That can’t be. That is absurd. The definition that lead us to such absurdity must be rejected.

                When we are debating whether there are or plausibly could be free markets, we must be talking about a specific kind of value for value transaction, that is in some sense open for strangers to participate in, that trades a variety of goods, including very valuable goods. You can call other things markets. Heck you can call anything a market, if you want. But the other side of the dispute is talking about markets where many goods, sometimes goods that are worth killing over, are traded amongst people who are most often strangers. Can those sorts of markets exist without regulation? (I mean “can” in the sense of what is plausible, not just what is logically possible, e.g. it is logically possible that I could be President but it can’t be, i.e. it isn’t plausible.)

                If so, give us some plausible examples or possible examples. The lawn mowing example is not such an example.Report

              • Avatar DensityDuck says:

                Shazbot: Except that I can’t decide that I’d rather the soldier fight, say, drug cartels in Mexico instead of xenophobic tribesmen in Afghanistan. Or even that I’d like to keep the tax money and have the soldier not fight anybody.Report

              • Avatar James Hanley says:


                I don’t know why a market would have to be open to the public. Certainly that’s the norm, since expanding your range of customers/providers is usually a good move. But I can’t see why it would be necessary.Report

              • Avatar James Hanley says:


                The problem with calling government a market is at least two-fold. First, those aren’t all voluntary exchanges of value for value. Some we’re coerced into, and some we don’t feel like we’re getting compensating value in return. Somebody else may tell us that soldiers flying drones into Pakistan is a good value for our tax dollar, but value is subjective, only you can decide if that’s something you actually value more than what you’re paying for it. Additionally, we don’t even know what we’re “buying” much of the time and we rarely know how much we’re paying for it. In economic terms, if that’s a market it’s one rife with market failures.

                If your only option for getting food, clothing and all else you need was to go into a market, pay the merchant’s demanded price without haggling, and accept whatever assortment of goods and services he gave you (justifying it as “that’s what all the people want”), would you call that a good market?Report

              • Avatar Stillwater says:

                I don’t know why a market would have to be open to the public.

                Because an exchange between only two parties is an exchange, or a compromise, or an agreement. But it’s not a market. It’s a private transaction.Report

              • Avatar James Hanley says:


                Most economists would classify any market exchange as a private transaction. If I go to Lowes and buy hammer, that’s a private transaction, even though Lowes is open to the general public.

                I think there are some assumptions underlying your thoughts here that I don’t get, and that are at odd with my basic understanding of the world.Report

              • Avatar Shazbot5 says:


                I guess it is ultimately a semantic distinction here. And as William James points out, with his man-squirell-tree example, semantic debates are irresolvable.

                But I think your opponents are thinking of a market as something where strangers (not just friends and family) interact to swap goods and services, and sometimes those goods have as much value as life or death. Those markets (let’s call them big markets, or real markets, or non-Hanlified-markets just to stipulate away the semantic problem of what counts as a market) can’t plausibly exist without regulation. We are talking about things like the healthcare market, the labor market, the food market, etc etc, where everyone (over a certain age) buys and sells, including total strangers, and many of the things they say have non-trivial worth (unlike a single beer to you or I) and many more have more worth than I can earn in a decade. Those real markets or big markets or Non-Hanlified-Markets must be regulated.Report

              • Avatar Shazbot5 says:

                Also, it is possible that the Hanlified small-markets can survive wthout enforcing regulators only because people are so habituated to act in regulated markets that they continue to do so even when the regulation goes away.

                Here’s an analogy. It’s true that people continue to stop at red lights even in the middle of nowhere, even when they can see no cars coming for miles in any direction. (Not just slow down, but full stop.) Even when there are obviously no police and no cameras. People are so habituated to act as if they might be punished, even when there is no real chance of being punished. (But they stop doing this if they have an incentive to stop, pretty quickly. We are not the dumbest apes, after all.)

                The problem comes if people realize that their habit is unwarranted and if there is a reward for breaking the rules. Then they start to cheat and break the rules, and can be conditioned to do so.

                So it might be with markets. Somebody starts up a small market with no enforcement, and everybody is just nice and fair. And maybe it works for a little while because people are habituated to be afraid of cheating and afraid of getting caught even when there is no one to catch them. But once one or two individuals realize that cheating gives an edge and there are no consequences for cheating… Boom. Cheating sky rockets and the market collapses. If the value of the goods are high enough, maybe the cheating happens on the first exchange. If the goods have no value, maybe it goes on.

                So, Hanlified small markets where the goods have little value and the participants have family-like trust can exist and be unregulated. But large, non-Hanlified markets cannot plausibly exist (for more than a brief moment) and be unregulated.Report

              • Avatar Stillwater says:

                Those markets (let’s call them big markets, or real markets, or non-Hanlified-markets just to stipulate away the semantic problem of what counts as a market) can’t plausibly exist without regulation.

                Sure they can. Why can’t they? They’d just big a big mess from our pov. But that’s not the issue on the table right now. It’s the conception of a market as any exchange of value for value between two people.Report

              • Avatar James Hanley says:


                But why would a market be only a place where strangers went to swap stuff, instead of also including those places where strangers go to swap stuff?

                If those are the only markets, then a small village where everyone knows everyone can’t have a market–even if every Saturday everyone goes to the main square and does their weekly swapping of goods. That doesn’t seem like a reasonable conclusion.

                Those markets (let’s call them big markets, or real markets, or non-Hanlified-markets …) can’t plausibly exist without regulation

                Please, just how man times do I have to say that I’m not arguing they can before any of you will actually hear me?

                Seriously, re-read the OP and you’ll see I’m not making that claim, and re-read the comments and you’ll see I repeatedly state that I am not making that claim and that I agree those types of markets need regulation.

                Can you see why I get frustrated when you all demand that I explain myself? Even though I explain myself over and over, answering the same question repeatedly, you’re still asking that same question and demanding that I explain myself!


                Please don’t make me shout that again. But seriously, I’ve had to say the same thing until I’m blue in the face here. That’s not a charitable way to treat the person you’re having a conversation with. It’s actually much more similar to a police interrogation, as they ask you the same questions over and over, hoping to catch you in conflicting answers.Report

              • Avatar Shazbot5 says:


                I do think such markets wouldn’t survive. They aren’t just a mess. It’s not plausible for them to stay in existence.


                I see no reason for your anger or all caps shouting.

                I am pushing you because you aren’t being charitable with your opponents. Your opponents claim that markets must be regulated to exist. You then cited a very small “market” involving lawnmowing that very much wasn’t the sort of market that your opponents had in mind. You admitted that this small market wasn’t the sort of thing that your opponents had in mind when they said markets must be regulated.

                However, you seem unwilling to admit that you now don’t have a counterexample to your opponent’s claim. Instead you are getting angry that we have pointed out that you have yet to produce a counterxample to the actual claim that your opponents are making.Report

              • Avatar James Hanley says:

                see no reason for your anger or all caps shouting.
                Because you keep insisting that I’m saying something that I’m not saying. You think it’s ok to accuse me of that, but it’s not ok for me to get angry about that?

                I am pushing you because you aren’t being charitable with your opponents.
                Do you think refusing to accept that I’ve said what I’ve actually said counts as charitable? Do you think repeatedly insinuating that I’m making a claim that I’ve repeatedly stated I wasn’t making counts as charitable? Who are you to lecture me on charitableness when you’re doing that?

                Your opponents claim that markets must be regulated to exist. You then cited a very small “market” involving lawnmowing that very much wasn’t the sort of market that your opponents had in mind.
                I’m arguing that those things are markets. Blaise may disagree that they’re markets, but I’m trying to point out that he’s defining them as non-markets in a backwards fashion–there’s no government regulation, so it can’t be a market. By contrast, I’m pointing out that the lack of government regulation fails as the defining feature of what counts as a market.

                You admitted that this small market wasn’t the sort of thing that your opponents had in mind when they said markets must be regulated.
                Not true. Blaise implies that those things are what he has in mind–that they would be markets if we just added a third party regulator.

                However, you seem unwilling to admit that you now don’t have a counterexample to your opponent’s claim.
                No, for god’s sake a thousand times no. I’ve said explicitly and repeatedly that I’m just not talking about those larger markets, and I’ve said explicitly and repeatedly that I think those larger markets probably can’t function without a third-party regulator. How does agreeing with their claim about that type of markets equal “being unwilling to admit I don’t have a counterexample” to that claim? I’m not seeking a counterexample to that claim; I never pretended there was a counterexample to that claim; my argument in this particular post was not about that claim.

                You are making a false claim about what I am doing. A claim that if you read my repeated assertions about what I am doing, I think you would understand, if you were being as charitable to me as you are demanding that I be of others.

                Instead you are getting angry that we have pointed out that you have yet to produce a counterxample to the actual claim that your opponents are making.
                You’re pointing out that I’m not doing something I never intended to do. Congratulations, that’s quite an accomplishment.

                No, what I’m angry about is that despite my repeated assertions to the contrary, you’re still claiming that I was trying to make a claim about large modern markets.

                Let me ask you, if you repeatedly said “I am not doing X,” and others kept claiming over and over, “You’re trying to do X and haven’t yet done it,” wouldn’t you get a bit irritated?

                What is charitable about you telling me what I am trying to do, and refusing to accept my claim about what I am trying to do?Report

              • Avatar Shazbot5 says:

                “You admitted that this small market wasn’t the sort of thing that your opponents had in mind when they said markets must be regulated.
                Not true. Blaise implies that those things are what he has in mind–that they would be markets if we just added a third party regulator.”

                I am glad you agree that Blaise (and screaming liberals) would be right if he (or they) had said “Large markets of the sort people are ordinarily talking about when they say “markets” can’t exist without regulation.” We all agree that gular old markets can’t be regulated. Good.

                Where does Blaise “imply” that he meant small “markets,” including things like marriages or your lawnmowing example? Also, if Blaise didn’t explicitly state (but rather indirectly implied) that he meant small markets (including marriages), and if ordinarily when people are talking about markets they are talking about what we are calling large markets, why wouldn’t you ask him if he meant small or large markets? Indeed, why wouldn’t you state your post as a friendly amemndent to his (and the screaming liberal’s) claim that “Markets can’t be regulated.” Why are you critiquing Blaise at all?

                Because all you have argued for is a friendly amendment to Blaise’s claim. Your friendly amendment to Blaise’s claim: it is a true claim, but not if you define “market” broadly enough to include things like marriages.

                No? Or do you think you have refuted Blaise or the screaming liberal?Report

              • Avatar DensityDuck says:

                “Where does Blaise “imply” that he meant small “markets,” ”

                See, that’s funny, because through this whole conversation you and stillwater have been saying that Hanley is a bastard for not assuming this right away.Report

              • Avatar Brian Houser says:

                “Indeed, every action I have with the state is “value for value”, so the government and I constitute a market, too. The soldier fights for me and I support him (with tax money or even just praise). I pay my taxes and get benefits. Etc.”

                You’re defining the market too narrowly (as are many of the responses here). The market in this case is the market for protection. Yes, the government provides military protection as part of this market. But there are other potential participants in the market. That’s all I can say without adding the word “free” back into the debate.Report

          • Avatar John Howard Griffin says:

            The importance of the “market participants,” from my perspective, is in relation to your statement that the informal rules are enforced only by the “market participants”. If it includes everyone (my view), then the informal rules are clearly societal rules. If not, then you’re in a more difficult spot to explain how only the “market participants” (those who buy and sell in the market) enforce the rules. There is a big difference between including potential and not, I think. You haven’t taken a clear position on this, though (at least, I do not understand it, if you have).

            My quibble with you is that there is a tone in your post that markets do not need rules or regulations. You make a point of noting that the definition does not include the word “regulation”, while concurring with me in these comments that all markets must have informal rules, at the least. Maybe your post is directed at Blaise, but I wanted to point out my quibble, since it was posted for all to see and comment on.

            To me, laws, rights, and government regulations, and are just societal rules writ large. They are the informal rules, formalized. A manner of control, which all societies need. Some more than others.Report

            • Avatar James Hanley says:

              Ah, I get it. Very insightful. I think we have multiple levels going on, corresponding to the reach of the market.

              For example, for my neighbor and me, no societal level rules are needed. For two people from different societies trading with each other at the frontiers of their society, no societal level rules may be possible. For most markets that aren’t in those very restricted categories, societal level rules are, I am sure, hugely important. I’m not trying to dismiss or minimize the existence of those “most markets.” I just happen to be focusing on the unusual cases, the non-normal ones, to show that they do exist, even if they are small, obscure, and even rare.Report

              • Avatar Stillwater says:

                Very nice response James. Personally speaking here, as someone who would really enjoy delving into some of the nuances of how both libertarians and liberals view markets, I would love to see you take up JHG’s issues in future posts. And by saying that, I’m giving a ringing endorsement (RING!!!) of John’s comment. I think this is a crucial issue in the lib/lib divide, your last sentence in the comment notwithstanding.Report

              • Avatar John Howard Griffin says:

                For example, for my neighbor and me, no societal level rules are needed.

                While this may be true, I think there is an expectation, from both parties, that some societal level rules are in play. They may disagree on which are in play, but the assumption is there for humans that some are in play. Maybe very simple rules, but important rules, nonetheless.

                For two people from different societies trading with each other at the frontiers of their society, no societal level rules may be possible.

                I agree that it may be impossible. But, it may also be that there are expectations of *some* societal rules. Even between differing societies. Something as simple as “I agree to trade you this for that thing over there. And not just kill you afterwards and take both.” is certainly one of the basics. Markets are not possible without a minimum level of trust. An entirely different post, I agree, but important when discussing markets.

                I just happen to be focusing on the unusual cases, the non-normal ones, to show that they do exist, even if they are small, obscure, and even rare.

                I agree there are unusual cases. But, I think your scope is too narrow in looking at those non-normal cases. If you are going to focus on primitive (my word) examples, then primitive instincts and expectations are relevant, I think.Report

              • Avatar James Hanley says:

                I’m not saying there are no rules between my neighbor and me. There absolutely are. I’m just saying they’re not societal level–those rules are just interpersonal. That doesn’t make them any the less rules, but they’re not necessarily ones that society has any stake in.

                I think your scope is too narrow in looking at those non-normal cases.
                The narrowness is only for the sake of this beginning point. I’m not trying to make these examples any more than they are. I’m just trying to point out that they are not non-existent.

                I’ll confess I’m getting a bit frustrated at having to repeat that point.Report

              • Avatar John Howard Griffin says:

                I understand your frustration. However, you seemed to be making a major point that the definition of a market does not include the word “regulation”, and this is what many of the comments are focusing on. Certainly, it is what my comments are focusing on.

                For me, I’m trying to point out that the informal rules, the interpersonal rules, are most probably based on societal rules. And, society has a stake in those interpersonal rules, since they are based on societal rules. Maybe if I called them societal norms, it would get my point across better?

                I agree with you that there are non-normal cases. I don’t agree with you that there are no regulations involved in those non-normal cases. Society (or societal rules, or societal norms) is the regulator. However, since you have not defined what you mean by “regulation” it is difficult to have this conversation with you. You keep saying that there are rules, but not regulations. This leads me to think that you do not consider societal rules to be regulations. With that, I disagree.Report

              • Avatar Roger says:

                I agree with JHGs comments on markets.

                Markets have rules which define such things as who has property rights, and who gets to decide, and what constitutes an appropriate exchange. I think a market without rules, whether formal or informal, or even just based upon shared norms or Schilling points, is an absurdity.

                That said, the regulators or regulations do not have to be external to the interaction. It can be self policed. Thus if Blaise is arguing that regulation must be supplied by a third party he is clearly wrong, and James and I have both given numerous examples proving the point. Craigslist prostitutes without pimps. Full stop.

                Everyone agrees that as market’s get larger and more sophisticated it is logical to design more formal rules and to create third parties specializing in enforcement.

                Does anyone other than Blaise disagree with the above summary?Report

              • Avatar John Howard Griffin says:

                I don’t really see things the way you have defined them, here:

                That said, the regulators or regulations do not have to be external to the interaction. It can be self policed.

                To me, there is always an external regulator – society, civilization. There are norms, expectations, informal rules that regulate market activity at a low level. You and James seem to agree that there are rules, but that these rules are not an external regulator. I am arguing that societal rules are always present, and are therefore an external regulation that is always present, even in your examples.

                You and James seem to be focusing on primitive, simple, markets, yet you insist on using “regulation” in only a high-level meaning. Some regulations can be just as primitive as your primitive market examples. For example: “We will use decimal based arithmetic for our calculations, if necessary. I will give you 10 of these for 1 of those. When I say 10, I mean 1, 2, 3, 4, 5, 6, 7, 8, 9, 10. Not 10-base 2.”

                I don’t think I’m disagreeing. I’m just trying to get James, and you, to open the scope a bit. There are some regulations that are always external to the interaction. But, since we haven’t defined “regulation” everyone is using it in a different way to make their point.Report

              • Avatar James Hanley says:

                However, since you have not defined what you mean by “regulation”

                I did. I noted that we were talking about third party regulation. That’s what Blaise insisted was necessary, so I was working off his claim.Report

              • Avatar Roger says:


                I fail to see why we should define shared norms as an external regulator. It is intrinsic to the participants.

                Please let me know how the multi billion dollar market of pimp less, independent prostitutes is regulated by other than the participants.

                This is a market. This is a market which can exist independent of external regulation.Report

              • Avatar MikeSchilling says:

                Schilling points

                Is that a thing?Report

              • Avatar Roger says:

                My bad,

                Schelling Points…

                A Schelling Point is a point – physical or mental – that people will tend to converge on in the absence of communication, because it seems natural, special or relevant to them. The concept was introduced by the American economist and 2005 Nobel Memorial Prize recipient Thomas Schelling in his book “The Strategy of Conflict” (1960). Like-minded individuals easily generate strong Schelling Points around common themes.Report

            • Avatar zic says:

              Mine is that there are often externalities to the market that affect people who are not participating in the market — people who are down wind, down stream, share a watershed, or depend on some other aspect that the market encroaches upon. Often, those externalities are not priced into the market, and no amount of self-regulation from within the market will consider them; even impartial market masters. And even more often, the price for those externalities are paid by others who do not realize they’re being impacted in some way.

              Regulators, government regulators, are charged with more then regulating the market participants, they’re charged with protecting the interests of people outside the market who are impacted by the exchange.Report

              • Avatar zic says:

                To be clear: when I say ‘impartial market master,’ there, I’m saying that the act of becoming master of the market gives a self-interest in preservation of the market because a smooth market is now the master’s method of exchange. If the continued function of the market is in conflict with externalities outside the market place, it’s not clear that the market (without the force of government, of ‘we the people,’) has the ability to factor in externalities.

                Every time examine this conundrum, I can only conclude that for a libertarian society to function, it needs strong judicial system; what on the right would be called ‘activist judges,’ and a method for trained representation in that system; as opposed to the millions victim to our own judicial system for the lack of coin to pay an attorney.Report

              • Avatar zic says:

                And I’d like to give an example of this:

                On A Lump of Coal I brought up the topic of mercury, of living down-wind of the coal plants in the Ohio Valley. The response was, yeah, there’s stuff we could do about that, but why should we, when China and India are the bigger problem.

                But those two countries are a bigger problem now because of the rent-seeking we’ve already done in the atmosphere; we — meaning the west — are the culprits that industrialized, burned a whole lot of coal and spewed the smoke into the air without knowing what we were doing. In a free market, we gained a tremendous windfall because we didn’t have to work the cost of mercury abatement into our bonfire.Report

              • Avatar James Hanley says:


                Indeed. Nothing I have said is counter to your point. I’m not saying all markets are, or should be, unregulated. Please do not take my argument that way.Report

  8. Avatar DBrown says:

    What is the point of this article? It makes totally unsupported claims and most are so absurd that they border on utter nonsense. Worse, it starts off trying to pick a fight about liberals as if this article needed some argument to be worthy to write.

    Claims about markets are meaning less if you reach back into time to create straw-men just so you can then project into the future confident that you now have a firm bases to build on thence creating the illusion of ‘facts’ so some irrelevant arguments will now be valid. Please.

    For example when you claim that a person in a native american community is immune from enforcement by cheating someone of another, unrelated tribe, is completely without bases. In fact, this idea is absurd since a person from another tribe most certainly can enforce arrangements if they are considered unfair – its called war.

    Most all of your ideas using the past to somehow create logic are equally baseless. If you really want to define things, just use current definitions and rational arguments so we, the readers, need not be confused by such pointless straw-men.

    For example, real markets started to exist once a simple method was available for people to verify the real value of a gold piece given – a special piece of slate is used. Now the idea of exchanges, markets and the critical issue of ‘trust’ can exist.Report

  9. Avatar Jeffery Bahr says:

    Is it just me or was this article and subsequent comments a major yawn?Report

  10. Avatar joey jo jo says:

    the existence of the term or actual “free markets” isn’t a bugaboo.
    the idolatry of free markets is.Report

  11. Avatar llama says:

    A market is a social construct. It is the cornerstone of an ideology called capitalism. Whether you believe in these social constructs and the resulting ideology depends on certain assumptions you make about the world. There is nothing inherent in their existence and your mileage will vary on these ideas depending on what you believe.Report

    • Avatar James Hanley says:

      Funny, markets existed long before there was such a thing as capitalism. Even really heavily regulated markets that even my staunchest critic here would agree qualifies as a market.Report

  12. Avatar LWA (Liberal With Attitude) says:

    Hanley, instead of whatever your next post is, I would be delighted to read one that laid out a brief description of what a libertarian society would actually look like.

    It seems like every encounter with you here is marked by 2 responses:
    1. “You don’t understand libertarianism!”
    2. “You are misrepresenting what I mean!”

    Well maybe its because libertarianism is so slippery a concept you yourself don’t know what you mean.
    For example, this post. There is an assertion that markets can exist without governments.
    At first blush it seems like some sort of anarchist idea- some form of unfettered marketplace, where everyone is cooperating without coercion.

    Then of course, it turns out we are not talking about the NYSE, but some proto-primitive barter system where hominids pick fleas off each other in exchange for bananas.
    OK, then- Point taken!

    I mean, c’mon. Lets get serious. We keep replaying an unfunny version of “What Have The Roman Ever Done For Us?” routine.

    Libertarians- (you, Roger, Jaybird, et.al.) make the occasional statement criticizing social welfare as being unecessary or harmful- but then after a ton of criticism hasten to say that you really wouldn’t abolish them, and of course there would be some form of social safety net in Libertopia. What kind, you can’t really say, but it would be voluntary, non-coercive, and awesome.

    You criticize taxes, but then hasten to add that in Libertopia, of course there would be a government, army, public infrastructure, all paid for by taxes. That would somehow be more voluntary, non-coercive, and awesome.

    You criticize regulations, saying you would like less of them. Which ones? Not sure, but in Libertopia there would be much fewer. And they would be more voluntary, non-coercive, and awesome.

    This isn’t snark- this is the actual positions you guys have taken, over a series of threads. I honestly have never seen anyone clearly explain how Libertopia would operate- and when we make assumptions, you guys shriek that we are misrepresenting you.

    Seriously- please just represent youirself, and tell us how your proposed world would be an improvement- or even different- than what we have now. I would really like to read it.

    Otherwise I fear we will end up seeing a cage match of you and Blaise debating what the meaning of “is” is and I don’t think I could take that.Report

    • Avatar Shazbot5 says:

      This seems like a point that could’ve been made friendlier and more charitably, but I agree with its content.Report

      • Avatar LWA (Liberal With Attitude) says:

        I actually thought this WAS very friendly and charitable; but I guess thats where the Attitude comes from.Report

        • Avatar BlaiseP says:

          I’ve repeatedly said Libertarians can only be defined by exclusion and they’ve pretty well admitted this is true. The key to destroying their arguments is to square their circle.

          Squaring the circle was an old symbol from the world of alchemy, representing the attempts to turn lead into gold. The Philosophical Egg.

          As the Duck observes, it doesn’t matter how often the obvious is pointed out to them. The edge of the un-squared circle only becomes longer.Report

    • Avatar Stillwater says:

      Actually, I think I was the liberal challenging James on what the meaning of “is” is…Report

    • LWA,

      You might wish to read this brief item from James’s own blog: http://bawdyhouse.wordpress.com/what-is-marginal-libertarianism/

      It won’t answer all your questions–and he specifically disavows an attempt to describe or promote a “libertopia”–but I think it does demonstrate where he stands generally.Report

    • Avatar James Hanley says:


      I’m not inclined to do this for you because I found your comments on our last discussion to indicate that you are not actually willing to listen. As long as you keep up the claim that a ban on X makes X more likely, I’m not going to bother engaging on the topic with you.

      You’re being just as disingenuous in this comment. You’re emphasizing what appear to you to be contradictions, and pretending as though none of us here has ever filled the gaps in. Personally I’ve read Roger filling in the gaps on the safety net argument multiple times. If you refuse to read what we’ve actually written on the topic, and criticize us of not having written it, why should we give you any more?Report

    • Avatar Jaybird says:

      Libertarians- (you, Roger, Jaybird, et.al.) make the occasional statement criticizing social welfare as being unecessary or harmful- but then after a ton of criticism hasten to say that you really wouldn’t abolish them, and of course there would be some form of social safety net in Libertopia. What kind, you can’t really say, but it would be voluntary, non-coercive, and awesome.

      For the record, my argument is that there should be some vague stigma associated with the idea of taking help when you don’t need it. Something akin to “shame” for asking for unnecessary help.

      Now, of course, we can easily have a system where we make a big show out of saying that “we shouldn’t judge people who are on assistance because we don’t know what their life is like, maybe they have a mental illness or something”… that’d be sufficient.

      This strikes me as different from how you seem to think what my position actually is.

      Which doesn’t surprise me.

      This isn’t snark- this is the actual positions you guys have taken, over a series of threads. I honestly have never seen anyone clearly explain how Libertopia would operate- and when we make assumptions, you guys shriek that we are misrepresenting you.

      I do not, and have never, pushed for Libertopia. I more push for gay marriage, cutting spending, legalizing pot, and ending foreign occupation.

      It’s not about Libertopia. It has never been about Libertopia.Report

      • Avatar James Hanley says:

        It’s not about Libertopia. It has never been about Libertopia.

        Doesn’t matter how many times we say it. Next time around LWA will still be demanding that we justify Libertopia. We’re just convenient symbols to him, libertarian tropes. We’re not real people whose actual real beliefs have to be considered; certainly not when they don’t comport with the tropes, which are more real to him than we are.Report

        • Avatar zic says:

          James, this is extremely ungenerous.

          He’s asked for explanation. I want an explanation, too. There’s a whole lot about our complex and overburdened systems that don’t serve average people well at all. I’m all for eliminating regulation that intrudes in peoples lives. I’ve said elsewhere on this site that I think a big part of the problem is our unwillingness to fund planning — including a healthy reviewing/pruning process.

          I’ve spent a long time trying to understand how a libertarian marketplace would function. In a small world, with a limited geography and population, and strong social norms, it might. But in this world?

          My concerns always turn back to the non-market externalities and adjudication. You’ve said, in one post, you’re not saying all markets should be regulated. So what are you saying? Fact is that good regulation helps diminish the need for going to court, and this is a point I wish you would explore. Because to have this discussion, we have to start here, in the world as it is. And in that world, the most dysfunctional branch of our government is the court system. Without massive spending to improve access to civil courts, without massive subsidies to provide lawyers to people who cannot afford entry to the judicial system, how will this work?

          Pragmatically. We’ve got to get from here to there. I don’t have much problem with stepping toward a more libertarian world, and I think there’s a whole lot we can do at the margins of interaction between people to go in that direction. I don’t think food production should be regulated when the producer sells directly to the customer; that I should be able to purchase raw milk directly from a dairy farmer, for instance. But you throw in some other handlers, a bottling company, a grocery store, and I do think it should be regulated. But those direct sales are small potatoes compared with the food market. It’s the difference between one of my hand-knit hats and the billions of hats Wal-Mart sells.

          Every time I push you on these details, you say, don’t worry, it’s in there. I’m willing to be convinced. But to be convinced, I need details that include the movement from dairy farm to dairy bottling plant to shipping to grocery store.Report

          • Avatar James Hanley says:


            Plenty of explanations have been given. There’s no indication that he’s listening. I’ve written at least one front page post about libertarianism, yet the claim continues that we never explain libertarianism. Roger has written about his view on a libertarian safety net system, but LWA continues to claim it hasn’t been addressed.

            This is my beef, and it’s not with you, but with several others here. They say something ridiculous about libertarianism, and if we dare to point out that it’s ridiculous they just yell that we’re doing argument by exclusion and that we never explain. And then they don’t even listen to what we’ve said is false, and they repeat the false claim again sooner or later.

            Put the shoe on the other foot. If I asserted that liberals want people on welfare to be dependent on the government (a claim that I have seen asserted, and I’m sure many others here have seen as well), what would be the liberal response? Would they tell me that’s ridiculous, and liberals just want to help people who need help? Or would they provide a very lengthy explanation of liberalism in a comment box?

            If they wouldn’t do the latter–and I would be astounded if they did, because it would be a silly thing to do–what standing do they have for demanding that of us?

            And what if a few weeks later I asserted the same comment, after they had denied that’s what liberals wanted? What kind of generosity would I have earned in their eyes? In your eyes?

            If they did write some degree of explanation of liberalism, and then a few weeks or months later I claimed that they never would write any explanations of liberalism, what kind of generosity would I have earned from them?

            Honestly, I’m considering writing a post about what libertarianism is. But I believe people like LWA won’t extend the slightest generosity in reading it. Instead of listening and trying to understand libertarianism–not agree, mind you, because I don’t demand or expect that, just understand–I expect they’ll instantly go on the attack. Instead of using the post to get an accurate handle on libertarianism, as they claim they want, instead of looking at the areas of disagreement and trying to better understand libertarians, they’ll use those areas of disagreements as nothing more than an opportunity to criticize.

            And then it won’t be long before they’re back to making the outrageous statements, because they skipped the opportunity to get a better understanding (something I no longer believe they want, although at the moment they’re typing the comment they may sincerely think so), and we’ll be back to pointing out the fallacies, and they’ll be back to damning us for argument by exclusion and never taking the time to actually explain libertarianism.

            When the circle goes around enough times, they’ve lost any claim on the generosity I once extended to them. You, I’m still generous to you (I hope that shows), because you haven’t played that disingenuous game. Others have played the game too much for me to trust that they’re capable of good faith.Report

            • Avatar zic says:

              Last night, I watched a bit of the podcast. In that segment, Dennis spoke about how Republicans fail to make the case about what they have to offer to people of color. TVD asked if he could ask some question. And proceeded to ask about potential gains in voters. I was struck by his concern — winning more votes for his team, not the good faith effort of what it would take to win those votes. I stopped watching at that point, feeling the lack of good faith. So yes, I understand what you’re saying, the lack of understanding from an empathetic point often ends the conversation.

              Why this is so important to me?

              I grew up very poor; my father left us, didn’t contribute to our financial well being. We lived in an ancient house, a center-chimney cape built just after the Revolutionary War. It had little or no insulation, an aging oil-burning furnace, an aging water pump, aging washing machine. Food on the table was difficult, let alone replacing or repairing any of that infrastructure.

              My great uncle stepped in. He was there constantly, fixing stuff. Offering stories and love and attention to me in a world that mostly ignored me. Everyone I knew talked about what a great man he was. And when I was 11, he molested me. Built into his price was me. I understood the market, we depended on him, and all the adults around had given countless testimony on his greatness. My job was to avoid his unwanted attention while not threatening the family safety — for without his help, freezing was a real possibility. And in the currency of believability, he had testimony, I was just a kid, and I knew I was a burden.

              I could give other examples; things where the good (most folk in my town worked at one of the two paper mills, they provided economic stability) and the bad (air and water quality, forest health, worker health) needed to be worked in to the market accounting.

              But my starting point is always to measure the cognitive dissonance between the obvious market benefits and the hidden costs. In my world, failure to do so has high costs. It’s a visceral thing; not an abstract, because when I was 11 years old, I discovered people can be good and bad at the same time. I discovered that the real costs of a market are often bourn by those least able to understand, explain or reveal those costs.

              If you want to discuss markets in good faith, at least with me, that has to be accounted for in the base of the discussion. Just like Republicans have to account to minority voters in the market for votes with actual policy, not just advertising.Report

              • Avatar James Hanley says:


                I have known too many women who were molested as girls for that story not to strike right at my heart. And as the father of three girls, that is one of my greatest fears.

                Please understand that libertarians don’t assume people are inherently good. That’s one of the common misunderstandings. “You don’t want government to regulate what people do? You must have great faith in the inherent goodness of humanity.” No, we distrust humanity enough that we don’t want to endow anyone with anymore power than is absolutely necessary.

                You, a child, as a price in a transaction. That’s not what a libertarian would even begin to consider as a legitimate market. You were forcibly violated, and libertarians unanimously agree that that type of coercion is wrong. Should government have enough authority to step in and…well, I was going to say “correct” the situation, but of course that can never really be corrected. But I hope you know what I mean. Yes, government should have that authority, just as it should have the authority to step in if somebody breaks into your home and steals from you, or if somebody punches you and takes your wallet, or if somebody defrauds you. There is no doubt there.

                If I write more, I will get around to addressing regulation in markets.Report

              • Avatar zic says:

                James, I understand that libertarians don’t condone criminal behavior, that’s not the point. I don’t need anyone to apologize to me for my Great Uncle’s actions, either. I simply offered my point of comprehension; that the world easily glosses over the price paid by people who cannot advocate for themselves. This is the essence of my liberalism; why I believe ‘fair’ matters.

                I have a soul of steel. I stood up to that man for many years. He molested me once; started to a second time, and I never let him lay a hand on me after, fully aware of all the things that would be easier if I did, aware of the costs if I spoke out. So I know exactly what my mettle is, and to be perfectly honest, I’m grateful to him for that. Not for what he did, but for what I learned in the process. I could not speak freely of these things were it not for the reckonings I’ve gone through.

                I’ll tell you the truth: telling my story makes people stop and listen. But the challenge is always to get them to go beyond the ‘this is horrible,’ to hear the meaning underneath. The lessons.

                In many ways, I’m the exception to the rule. I live out on the feet of the distribution curves more often than at the top. That obligates me to always peel back the assumptions, to stop, and say, “What about this, doesn’t it deserve consideration, too?” Every single action we take can have a negative consequence, many negative consequences. That does not mean we should not take the actions; but it does mean we should weigh them. Saying someone’s a great guy should always be done with consideration he’s also likely got some dark secrets. Discussing the exchange of goods should always include an examination of the hidden costs, and then a re-examination.

                Probe and question, always. Doubt. Confidence is a range, not a fixed point, and quite possibly a larger range then the confident realize.Report

              • Avatar James Hanley says:

                Discussing the exchange of goods should always include an examination of the hidden costs, and then a re-examination.

                Ditto for discussing the value of regulation.

                Therein is the problem for both libertarians and liberals. Libertarians are apt to be too sanguine about the market, liberals are apt to be too sanguine about the regulatory response. Each side plays its own version of the nirvana fallacy.

                Like you I’m a policy wonk. One of my fave examples is the endangered species act. I’m an environmentalist, so I’m supposed to love it. But I’ve seen the perverse incentives at work. I knew a guy who worked in the Bakersfield oil fields. Shoot, shovel, and shut up was standard practice if they accidentally impacted an endangered species. The law created an incentive not to try to minimize the damage done, but to hide it. In the same area farmers plow their fields year ’round, to try to keep the kangaroo rat out of their fields, lest they lose the ability to farm them (while still holding the bag for the taxes). So in a region that’s in the top 3 in the country for worst air quality we give farmers an incentive to run diesel tractors and throw large amounts of dust into the air (trapped by the mountains and the inversion layer), to keep an animal out of their field that probably can coexist with agriculture if done normally.

                On the other hand we have the Clean Air Act Amendments of 1990 that created a market in Sulfur Dioxide allocations. It brought the emissions down faster, further, and at less cost than anyone had anticipated.

                The structure of the rules matter. On that you and I agree. The trick is looking into the structure and understanding what it actually does. Libertarians tend to be far too simplistic about it. So do liberals.Report

              • Avatar Kim says:

                And this is why I’m fond of the idea of a government with both sides of this dispute in it. Let ’em both get so riled up that they find all the holes in the other guy’s argument.Report

              • Avatar zic says:

                Competence matters.

                But it rarely figures into our political discussions.

                And that’s because we rarely do the hard work of developing metrics to measure it. You’re a teacher; you probably struggle with refining those metrics on a daily basis. My goal would be having that as an expected part of our law making, our rule making, our campaigns.Report

              • Avatar Brian Houser says:

                Just want to say thanks to James and zic for this thread. You managed to turn what started out as excuse making and petty bickering into some fairly profound discussion that really starts to explore why we feel the way we do and gave me some seeds for thought on how we might better understand each other.Report

          • Avatar Jaybird says:

            I’ve spent a long time trying to understand how a libertarian marketplace would function.

            Here’s an easy first step:

            It’s just like ours except gay people can marry, pot’s legal, we don’t have bases in Germany, and, oh, spending is somewhere less than 20% of GDP (maybe 18%?).

            Don’t try to think about end points with nuclear reactors in every backyard and tension between Moon Colonists, Mars Colonists, Europa Colonists, and Earth. Just think about the stuff we keep harping on how the government needs to stop doing stuff like “not recognizing gay marriage, arresting people for a plant, throwing military bases around the world where they aren’t needed, and spending so g-darned much”.Report

            • Avatar zic says:

              Jaybird, I have one husband and two sons. They all voted for Paul in the primaries, Obama in the general. Based on your description of a libertarian marketplace.

              Me, I’m a policy wonk. I see the devil in the details.

              We discuss endlessly. And when I bring up the policy problems, their eyes glaze over. But you can’t get from here to there without changing policy. A for instance: tomorrow, Congress get’s some sense in their heads and repeals prohibition. Good thing, I say. But. I know a lot of people who have some serious issues from smoking pot; paranoia and psychosis — addiction level problems. Right now, I see a pretty health (mostly black) market of small farmers and distributors; but I don’t live in a place where gangs and mafia have cornered the market. But end that prohibition, and I see big tobacco stepping in, destroying what’s a relatively healthy economy. I see a lot of people in prison and without voting rights as a result of prohibition. Those are all details we need to think about. Seriously.Report

              • Avatar Jaybird says:

                I would ask “where does the jurisdiction of the government end?”

                Would you agree that the government has no, absolutely no, right to tell you that you cannot use birth control? Imagine a person (let’s make him a white male!) give a speech about the importance of children, the importance of roles in society, the importance of women, and the unique role they have when it comes to making sure that society remains stable.

                How many of these speeches do you think you could sit through before yelling “IT’S NOT ANY OF YOUR FREAKING BUSINESS!”?

                Even if they were really good speeches about policy?

                Marijuana is on that same continuum for me. It’s none of your business if I use it. If you want to have a conversation about whether you should be forced to subsidize my buying it, I suppose I could be talked into that… but, otherwise, it’s the business of the individual whether or not they use it and the government should not have the jurisdiction to put its nose in and say “you cannot use that”.Report

              • Avatar James Hanley says:

                end that prohibition, and I see big tobacco stepping in, destroying what’s a relatively healthy economy

                Well, libertarians aren’t going to be real concerned about that. Sorry, but we’re happy to let the market work itself out. The locals aren’t likely to go out of business, but they may have to find another market niche. Or maybe they can make locally grown a selling point. Libertarians will find any of those outcomes satisfactory. I get why you might not, and I’m not trying to say libertarians are right and you’re wrong. I’m just being forthright about what libertarians would say.

                I see a lot of people in prison and without voting rights as a result of prohibition.
                That’s not really a libertarian problem, though, is it? Do a survey of libertarians here at the League, and I think you’ll find unanimity or godawfully close to it. Release them from prison and give them back their voting rights. There’ll be very little dispute among libertarians about that.

                I know a lot of people who have some serious issues from smoking pot; paranoia and psychosis — addiction level problems.
                That’s a tough one. Lots of libertarians are going to stand on a government-isn’t-your-daddy line. Some, but a lot fewer, might support government funded programs to help these folks get back on their feet–as more cost-effective than dealing with the social costs they might impose, if not out of sympathy. But they’d prefer family and charitable solutions, and if those aren’t sufficient, well, the world really doesn’t owe you anything. The whole “we’re all in the same society and all have a duty to care for each other” approach isn’t libertarianish. They’re more likely to say our duty is to just leave each other alone and stay the hell out of other people’s business, unless we’ve voluntarily accepted an obligation.Report

              • Avatar DensityDuck says:

                “end that prohibition, and I see big tobacco stepping in”

                Just like the only company that sells beer in America is Anheuser-Busch–

                oh wait, there’s lots and lots and lots of smaller brewers, and there are more every day, and these smaller brewers’ activity is forcing the big incumbents to start diversifying their product lines (seriously, do you think the beer industry of the 1970s would ever have seriously considered things like Blue Moon or Sam Adams?)

                And those smaller brewers had been doing just fine until government regulation made it impossible for them to exist.

                So where’s the market failure again?Report

            • Avatar Kim says:

              when folks say “spending so goddarned much” and actually can enumerate the pain they expect to feel themselves… grr… it’s always someone else’s burden!

              (note: when I do that, I can at least explain the economic realities that make it a better bargain for everyone to tilt the deck in my favor, and why it will make everyone better off in the future).Report

    • Avatar James K says:

      Admittedly I’m a squish by libertarian standards, but I don’t actually want to radically remake society, just give it a couple of big tweaks.

      I don’t object to either taxes or welfare per se, so I would not abolish them. The welfare system would be restructured along “negative income tax” lines and long-run deficits would be contained, but I’m not going to tear down the entire edifice.

      I’ve talked about me approach to healthcare in the past, and my preferred educational policy runs something like vouchers + performance monitoring and reporting from the centre. I would end drug prohibition, international trade barriers and would significantly loosen immigration restrictions. Even my most radical idea is experimental – incrementally testing the potential for futarchy to replace democracy.

      My ideal is some kind of hybrid between Singapore and Sweeden, and not necessarily a place mos liberals would find all that hostile.Report

      • Avatar greginak says:

        I’d probably be fine with living in Singapeeden ( or Sweedapore). One of the problems libertarians face is they have no way of getting their policies in place so that they can fail and succeed. Lots of libertarian talk sounds like pining for a utopia since there is no foreseeable road to legislate it and since they haven’t had the inevitable failures that everybody has to suffer in the arena of public policy there is a tendency to sound flip or naive or strident and self-righteous.Report

        • Avatar James K says:

          Being in power and being out of power both have their downsides. If you’re in power you can become very invested in the status quo, to the point where nay change is threatening. Being out of power means you have little familiarity with the policy-making process.

          This is one of the reasons I find Milton Friedman’s work so insightful. He started his career in government, and his writing has been informed by that.Report

          • Avatar Chris says:

            I wish power was mostly downside, so that people and groups wouldn’t cling to it so. In fact, in the ideal republic, I imagine that being in power is so difficult and unpleasant that no one would want to do it long, and they’d only want to do it out of extreme magnanimity and benevolence.Report

  13. Avatar DRS says:

    I love maps. Anymore maps where that one’s from?Report

  14. Avatar Stillwater says:

    For my part, I’m not sure I can agree to that beginning point. You wrote (twice, I think): And exchange of value for value is a market.

    I’m a little unclear about this. Is the “is” an identity sign, or or an indication of sufficiency, or necessity? Clearly, if I propose an exchange to you – your money or your life – I’m satisfying the conditions of the definition. I’m exchanging the value of my not killing you for the money you have in your pants pocket. But I don’t think most people would want to call that a market, unless most people are criminals and mobsters.

    Another issue is the aspect of private exchange I mentioned in the earlier comment. IF I propose to my wife that I’ll wash the dishes for a week if we can go the movies tonight, am I engaging in a “market” activity? I’ve exchanged value for value, but it strikes me as wrong to say that that transaction was market based.Report

    • Avatar James Hanley says:

      OK, you lost me in the second paragraph. My mind doesn’t work like that. But I’ll say this; I have a hard time believing you’re being at all charitable in that example. You don’t believe that’s a market, and you don’t believe I believe that’s a market. If you want to explore just how we distinguish between that and a market, fine, but don’t pretend that maybe, just maybe, it’s actually sneaking in.

      As to the exchange with your wife, yes, that’s a market activity. Why wouldn’t it be? Marriage isn’t magic, where suddenly two people really are flesh of one flesh, and so on. It’s two people trying to live together in a miniature society, with it’s own rules, procedures, norms, and so on. Why wouldn’t it have elements of market activity, too?Report

      • Avatar Stillwater says:

        You don’t believe that’s a market, and you don’t believe I believe that’s a market. If you want to explore just how we distinguish between that and a market, fine, but don’t pretend that maybe, just maybe, it’s actually sneaking in.

        It may appear to be unfavorable, but it’s consistent with the definition. So why am I the bad guy for pointing it out? I think we need a better definition. But maybe that’s just me.

        As to the exchange with your wife, yes, that’s a market activity. Why wouldn’t it be?

        Because I’m not offering washing the dishes for a week to any woman who’ll go to the movies with me. I mean, that’s pretty clear, right? In order for my offer to be market based, it has to be public. That’s my point.Report

        • Avatar James Hanley says:

          I reject the publicness claim. Simply reject it.

          Were whites not running markets in the Jim Crow south because they weren’t open to the whole public? How much of the public does a market have to be open to before you’ll allow it’s a market?

          As to the violence example, the thug isn’t offering any value the person doesn’t already have. He’s threatening to take away value, not add value, so it’s not really an exchange of value for value, is it?Report

          • Avatar Stillwater says:

            How much of the public does a market have to be open to before you’ll allow it’s a market?

            More than two people.Report

            • Avatar James Hanley says:

              Fine, see my response to Rod, below.

              Do plural marriages have markets?Report

              • Avatar Stillwater says:

                That’s an incomprehensible question to me. Plural marriage is a state of affairs. A market for a plural marriage would would entail that men and women can compete, or shop around, or etc. for the opportunity to accumulate multiple spouses.

                On the other hand, the concept of plural marriages is a market in the political sense: people will compete, or shop around, ot etc. for the opportunity to enact it, or not, as legislation or cultural acceptability.Report

              • Avatar James Hanley says:

                No, I mean if there are multiple wives, and you can bargain with any of them, does that bargaining become a market? Maybe the night out example doesn’t work so well, but let’s say you want a massage from one of your wives, and you go among them finding the best price for a massage (hmm, Amy wants one week’s dishwashing, Barbara wants three days of dusting and vacuuming, and Claire wants a whole day of washing and folding clothes, so what’s the best deal for me?)

                Is that exchange that’s not a market between you and your one wife now a market because there is more than one person to deal with?

                Do we need another husband? If we have a four-person marriage of two husbands and two wives, can the bargaining among them be called a market? As you said to me, it fits your definition.Report

              • Avatar James Hanley says:

                Hmm, you keep pushing me on definitions, but when I push you on one there’s no answer.Report

              • Avatar Stillwater says:

                Sure, there’s a market within a plural marriage. If one husband is able to publicly compete with another husband for the wife’s affections, then there is a market for the wife’s affections.

                Sure. I’ll grant that.Report

      • Avatar Ramblin' Rod says:

        James, I’ll just refer you to the dictionary definition of “market” that you put in your OP:

        An actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, for money or barter.[Added emphasis mine.]

        And then just below that:

        Markets include mechanisms or means for (1) determining price of the traded item, (2) communicating the price information, (3) facilitating deals and transactions, and (4) effecting distribution. The market for a particular item is made up of existing and potential customers who need it and have the ability and willingness to pay for it.

        It seems fairly explicit to me from the above that a market is composed of multiple buyers and multiple sellers, since your definition doesn’t use either the construction “buyer(s) and seller(s)” or the clunkier “buyer or buyers and seller or sellers.” I would gladly characterize your dealings with your neighbor as transactions, exchanges, and/or trade. But a market? Not so much. If you really, really, insist on it, then I would have to insist as well that it’s a degenerate case; on the order of calling a point a circle.

        Are the cases of monopoly and monopsony markets? I suppose, but note that they’re at least not considered good markets. And I don’t know that there’s even a term for something that’s both simultaneously.Report

        • Avatar James Hanley says:

          I get your point, but I don’t buy it. If we talk about markets, plural, then of course there have to be plural buyers and sellers. I don’t think we can necessarily read the definition to exclude the idea that a single buyer and a single seller can have a market.

          If you like, I’ll retreat to calling those exchanges “market-like,” but I’m not sure that I’ve sacrificed much. If my neighbor decides to offer his services to the neighbors on the othre side of his house, and then the guy across the street from us offers us what might be a better deal, then we’ve got multiple buyers and sellers, but it’s still exchange of value for value that’s not regulated by any third party.

          About all that gets excluded is Stillwater’s marriage example, and there’s really no way to avoid seeing that as market-like. Heck, his wife could bargain him up to a week and a half’s worth of dishes, surely, and it would be just like sitting in a Middle Eastern market bargaining over jewelry.Report

          • Avatar Stillwater says:

            James, if your definition of a market is correct, then any time I agree to swung by Home Depot before I go home with my wife, that’s a market activity. But it isn’t. It’s a life activity. This is the same problem with extending “economics” to include everything a person thinks of as having value. If it’s that broad, then it can’t be refute. But it’s also trivial, since it encompasses everything. There’s absolutely no explanatory value in the those concepts.Report

          • Avatar Ramblin' Rod says:

            James, the problem I have with your definition is that it renders so much of what is said about or in reference to markets non-sensical. For instance, we commonly refer to “the market price” of something. Not a market price, but the market price. And how is that market price arrived at? Through some average, summation, consensus, or whatever of multiple individual transactions. Or if you decide to sell your car and “put it on the market,” that doesn’t mean you just offer it to your neighbor and no one else.

            I mean… it’s like you’re defining a market to be virtually any kind of exchange or agreement between two people. But in doing so you’ve defined it down to the point where it actually doesn’t mean anything any more. When a term means anything you want it to, then it means nothing really.Report

            • Avatar James Hanley says:

              No, not virtually any kind of exchange. Not gift exchange, and not theft/coercive exchange.

              But lots of our exchanges, yes. Humans do a whole heck of a lot of exchange of value for value–just because we do it so often we hardly think about it doesn’t mean it’s not classifiable as a thing. It’s certainly not without meaning because it’s distinguishable from gift exchange, from theft and coercion, and from being self-sufficient. So it definitely doesn’t mean nothing, and it doesn’t mean anything at all.

              As to things like “the market price,” those are just useful fictions. It’s easier to take an average and call it “the market price” than report all market prices. It’s like talking about “the public will.” There’s really no such thing, and if we want to talk about whether Barack Obama has something called a mandate, we’d do well to remember it. But if we want a shorthand way to refer to his having defeated Romney, it’s useful.Report

          • Avatar Ramblin' Rod says:

            Let me ask this another way. Just what the hell isn’t a market in your mind?Report

            • Avatar Stillwater says:


            • Avatar James Hanley says:

              Gift exchange, as I said in the OP.

              Theft, as I’ve so often said in the past.

              Coercion, as I’ve so often said in the past.

              Government, as I’ve said in the comments here.

              And hell, I even granted you the value-for-value exchanges within marriage.

              I’m puzzled guys. I haven’t been coy about excluding those things, either here or in any other posts/comments, where I’ve talked about this stuff.

              And I find it funny that in a thread where others have insisted that regulation means any and all rules, and not gotten much pushback from you all, that you’re claiming I’m using a definition that’s too broad. But it’s just the top-level definition, guys, just as regulation is a top-level definition. If you think broad definitions are unallowable, then we’re going to have fun when we discuss spirituality, or life, or activity. But as I repeatedly have said, there are subcategories within it that allow us to distinguish different types of markets.

              And I have to say I’m amused that the responses have ranged from, “this is so banally true it’s hardly worthy of writing” to “this is really controversial and surely wrong.”Report

              • Avatar Stillwater says:

                Well, the criticism of “triviality” and “controversiality” aren’t separated by that many degrees. In either case, it means: wrong.

                But look, I’ll concede – as I have in conversations with other interlocutors – your definition. Is it possible that there are categories under which your definition breaks down? If so, then let’s just forget about the definition, and focus on the cases where we disagree about reality, instead of disagreeing about the terms we use to describe it.Report

              • Avatar James Hanley says:

                Is it possible that there are categories under which your definition breaks down?

                It’s late, so I may have to quit. But not just because it’s late, but because I’m tired of the way this discussion is going. I’m tired of the insinuations that I have made any claims at all about modern complex markets not being regulated. I’m irritated that you and Rod implied that I hadn’t distinguished things that weren’t markets, when I clearly had.

                So why should I answer this question? You’re not signaling to me that you’re actually listening to the answers you’re asking for.

                Anyway, I really don’t quite understand the question. What do you mean by “break down?” Do you mean cases that prove the definition wrong? Cases where the definition doesn’t work somehow? Markets that don’t fit the definition, things that fit the definition that aren’t markets?

                And how much would it mean if there were such cases. Definitions are just human attempts to categorize the world, and there’s not a definition of any thing in the world that works perfectly. Please define democracy for me in a way where it never breaks down, or where I can’t find troublesome cases. Or liberal.

                I suspect that once again you’re demanding more than you’re willing to give yourself. You want to critique the definition of market because it may not perfectly define every conceivable human exchange either in or out. But if you think that’s a reasonable standard, then I ask you to justify it’s reasonableness to me by finding a definition of something–anything–that satisfies that standard.

                I don’t believe anything can, so I’m not particularly concerned if the definition of market can’t, either.Report

              • Avatar Ramblin' Rod says:

                The reason I’m pushing against this isn’t just to be pedantic or argumentative or just dickish. It’s so that when we discuss particular questions about or aspects of markets in the future it’s clear what the hell we’re talking about. Your definition is so broad that it would be nigh unto impossible to make interesting and non-trivial statements that you couldn’t immediately refute by referencing some trivial, degenerate (in my view) case.

                It just seems that when we’re discussing political economy that referencing a non-public interaction isn’t terribly relevant. No one in their most feverish, Marxist, imaginations gives a flying fig about regulating your suds for mowing arrangement, so why include it in the constellation of “markets”?Report

              • Avatar James Hanley says:

                Your definition is so broad that it would be nigh unto impossible to make interesting and non-trivial statements that you couldn’t immediately refute by referencing some trivial, degenerate (in my view) case.

                You overestimate me. And come on, on this very thread folks have made some interesting and non-trivial statements that I couldn’t, and didn’t, refute so easily.

                Hell, you and Stillwater got me to concede not including an exchange between married people as a market transaction. And yet you still claim that my definition allows me to simply refute everything?

                ARE YOU EVEN LISTENING TO THE ANSWERS I’M GIVING TO YOUR OWN QUESTIONS? Because seriously, dude, you’re now claiming that my definition allows me to easily avoid answering you in the way I actually answered you; by giving in. You won that point, and you still won’t even admit that I conceded the point. Are you trying to play games or what?Report

              • Avatar Ramblin' Rod says:

                I’m not playing games, James. (Hey, that rhymed!) You proffered a dictionary definition for a market and then proceeded to expand that definition down to include freakin’ sharks and cleaner fish. That was you, not me.

                Sigh… look, dude. This isn’t the first time around the maypole for me. I’ve been discussing/debating/arguing with libertarians for likely as long as you’ve been one–for at least twenty years now. And there’s a particular kind of ab reductio argumentative strategy that you guys really love to employ. Example: Microsoft is a business. A little girl with a lemonade stand is also a business. Do you believe that the little girl’s lemonade stand should be regulated by the government? No? Then why do you believe that Microsoft (or Exxon, or BOA, etc.) should be regulated??? They’re both businesses, therefore they’re exactly the same thing!

                Size and scope and scale are irrelevant since it’s impossible to provide a rigorous, non-controversial, criteria to decide whether something is big or small, and therefore a fit subject for regulation. It’s similar to the fundy religious arguments for defining life from the moment of conception such that a fertilized egg in the Fallopian tubes is exactly the same thing as a third-grader on the playground.

                I’m willing to give you the benefit of the doubt since you’ve already stated that you can accept that large markets (for some as-yet unspecified definition of “large”) may require third-party regulation. But your down-defining of “market'” just feels to me like you’re setting things up for that ab reductio carom shot of libby logic. Because I’m honestly bewildered what the hell your point is otherwise. If that’s not your intention, then fine. We can discuss real-world cases, methods, justifications, etc. But if you do try it I’m calling bullshit.Report

              • Avatar DensityDuck says:

                “And there’s a particular kind of ab reductio argumentative strategy that you guys really love to employ.”

                As opposed to the No True Scot we’re seeing here? “Markets always require regulation!” “Here’s one that doesn’t.” “Well, that’s not really a market.”Report

              • Avatar Ramblin' Rod says:

                First, DuckDude, I’m not defending Blaise’s statement; it’s not an argument I would make and I don’t agree with it. I actually agree more with Hanley on all this so far. It’s only his working definition of a market that I take issue with.

                To me–and I believe the common understanding of things is that–a transaction or exchange is something that occurs in the larger context of a market. An isolated exchange or exchange relationship doesn’t, in and of itself, constitute a market. Any more than one house is a neighborhood, a single individual is a family, or one cow is a herd.

                I see a market as an emergent phenomenon of economic relationships and activity within the larger emergent phenomenon of a society. And ala Hayek, this is largely–although not necessarily!–a spontaneous, self-ordering, phenomenon, including the requisite regulatory mechanisms. But in defense of Blaise, the actual existing markets that actual liberals and others are actually proposing to regulate are precisely the large, complex, and anonymous critters that Hanley at least admits may require third-party regulation. It’s not clear to me that you can draw any useful insights from inspection of trivial bilateral exchange relationships in discussing the actual proposals under consideration.

                I suppose this is just revealing a basic difference in perspective between liberals and libertarians, but I maintain that differences in size, scope, scale, and complexity represent real differences in kind, not just the same thing only more and bigger.Report

              • Avatar Kim says:

                not really. they’re all just games when you get right down to it.Report

              • Avatar Stillwater says:

                Eg. if you want to call the transaction me and my wife engage in regarding where we’re eating dinner tomorrow night a “market”, then I think I’m entitled to say that the type of transaction I engage in when I sell my house, or buy an Ipod, or try to find a job, or Christamighty-somanythings, is categorically different, then the conversation can proceed.Report

              • Avatar James Hanley says:

                if you want to call the transaction me and my wife engage in regarding where we’re eating dinner tomorrow night a “market”,

                I’ve conceded that point several times already. Why won’t you just let me concede it? Is it necessary to your position that my concession of the point not be allowed and worked with?Report

              • Avatar Shazbot5 says:

                Because your example of an unregulated “market” -the lawnmowing- is not a market in the narrow sense that Blaise meant when he wrote “Markets can’t exist without being regulated.” So your example is irrelevant and is clearly not a counterxample to the claim “Markets can’t exist wothout being regulated.” It’s not a market anymore than a marriage in the relevant sense of “market.”

                Instead of getting grumpy like a baby about this argument (and it is an honest argument) you could address the argument.Report

              • Avatar DensityDuck says:

                So Blaise is right, just so long as we define “market” and “regulation” however we need to do to make him be right.Report

              • Avatar Shazbot5 says:

                No, Blaise is right if we define “market” to meam the sort of thing people are ordinarily talking about when they say “market”, but he is wrong if we include things like marriages in the definition of market.

                But as Rod points out somewhere, if you define “market” too broadly, it will be almost impossible to make true and interesting generalization about “markets” of the form “Markets are X.”Report

              • Avatar Shazbot5 says:

                “the responses have ranged from, “this is so banally true it’s hardly worthy of writing” to “this is really controversial and surely wrong.””

                That is roughly the position I have argued for: If you mean “small markets” with participants who are friends and family (which are only markets in loose sense) can exist without regulation, your thesis is trivially true. If you mean “large markets” where valuable goods are traded amongst participants who are often strangers, your thesis would be shocking if true, but is actually false.

                N.B: It is common (and not at all a sign of duplicity or disrespect) to argue that a person’s position is trivially true or false depending on how their position is. interpreted. That is a sort of dilemma argument.Report

              • Avatar James Hanley says:

                If you mean “small markets” with participants who are friends and family (which are only markets in loose sense) can exist without regulation, your thesis is trivially true.
                I think I satisfactorily showed that it can be strangers, even, but, yes, small markets. And yes, trivially true, as I have repeatedly said.

                How many times do I need to repeat that point before there stops being any dispute about whether that is my point?

                If you mean “large markets” where valuable goods are traded amongst participants who are often strangers, your thesis would be shocking if true, but is actually false.
                Do you sincerely have any question at this stage about whether this is my point or not?

                This is where I am asserting that you and others are not engaging legitimately, and I don’t think it’s unfair to say so. How many times have I clearly explained that this is not my argument? And yet even now you are holding open the possibility that it might be my argument?

                How can I be clearer? Are you willfully refusing to recognize that I’ve repeatedly said that’s not my argument? Are you implying that I’m not being truthful when I say that’s not my argument?

                Why are you still implying that it might be my argument, when I’ve repeatedly said it’s not?

                Can you see why this is offensive?Report

              • Avatar Shazbot5 says:

                What sort of markets do you think Blaise and the spittle flecked screaming liberal have in mind when they claim “Markets can’t be regulated?” Do you think they would include a marriage or a game of Monopoly as the kind of market they are intending to refer to?

                If the answer is no, you agree with Blaise and the spittle-flecked screaming liberal.Report

    • Avatar Brian Houser says:

      Regarding the second part (is you and your wife having a “dishwashing for dates” arrangement a market?), this is another example where we’re using the term “market” a bit too narrowly. It’s a little unclear to me what your wife is really giving up in this transaction (simply permission, or will she be buying the movie ticket?). But the two things on the sides of the transaction are what define the market. On your side, you’re selling dishwashing (or more generally, labor). Your wife is selling a chance to go the movies. You’re each buying what the other’s selling. But the market includes other possibilities. You could wash her car instead. You could call up a friend and go to the movies with him instead. Your wife could hire a maid. Your wife could offer a movie marathon at home instead of going to the theater.

      And that leads back to the first part: is robbery a market? This got brushed off a little too easily downthread, and I think it’s actually a valid question. I think “your money or your life” can be considered a market (or part of a market); it’s just a matter of defining what that market really is. At its base level, I guess it really is a market of exchanging continuing life for cash, but a lot of other markets are potentially involved: the market for liberty, the market for security, etc.

      But this brings up another variable in market discussions: whether the exchanges in the market are entirely voluntary or occur due to some level of coercion.Report

  15. Avatar Chris says:

    Since you brought up deWaal, I’ll take you on a little bit of a tangent, apropos of the recent “lump of coal” post and discussion, relating the evolution of markets and altruism/empathy (two separate things, but lumped together here for simplicity’s sake). One of the most interesting findings of deWaal, to me, is that chimps are only slightly more likely to help someone who’s previously helped them: the exchange is really only a slight motivating force. This is true also of young children. In fact, in young children, rewarding helping behavior (that is, something like reciprocal altruism or trade) actually inhibits helping behavior to an extent (Warneken and Tomasello have a nice review of the literature on the development of, both phylogentically and ontogentically, of altruism, and deWall himself has a nice review as well, based in large part on his own work with chimps). It seems that the exchange that gives us markets comes from something much older phylogenetically, and much more basic ontogenetically, which is molded in part (perhaps in large part) by culture and socialization into what we know as mutual exchange.

    I bring this up because there is a tendency, particularly among certain types of market advocates, to see selfishness as the norm, and altruism as the exception, when instead it is at best more complicated than that. Altruism is, in many ways, as fundamental as selfishness. This leads them to believe that certain ways of organizing social interactions, or societies, are better than others.

    I don’t mean to draw any conclusions about which types of organization are better than others, only to point out that if we justify a particularly type of organization with reference to our selfish natures, we’ve missed too much of our nature to provide a solid foundation for that organization.Report

  16. Avatar RobZ says:

    The markets that sprung up in the parking lots outside Grateful Dead shows seemed pretty unregulated to me.Report

  17. Avatar James K says:

    Another thing I think we need to be careful about is our definition of “regulation”. I’m aware of three different definitions, each with a quite different focus.Report

    • Avatar James Hanley says:

      It might be helpful for my next post–assuming I write it–if you’d specify that a bit more.Report

      • Avatar James K says:

        I can elaborate that now if you like.

        The three different definitions can be though of as colloquial “regulation is government participation of any sort”, governmental “regulation is a rule created by the executive branch under power delegated to it by the legislative branch” and economic “regulation is specific restrictions on the manner win which a good can be exchanged”. The colloquial definition contrasts regulation with lassiez faire, the governmental definition contrasts regulation with statute, and the economic definition contrasts regulation with “infrastructural laws” such as general prohibitions against force and fraud.

        Note that the proposition “regulations are essential to the proper functioning of a market” is much more defensible when using the colloquial definition than either of the others.Report

        • Avatar James Hanley says:

          Got it. That’s all very much within my framework understanding.

          I’m disinclined, though. The folks here are saying they want to hear a libertarian state his position, but when it’s done they keep writing as though the position hadn’t been stated. I expected critiques, but I honestly never expected to have the repeated assumption that I was saying something that I repeatedly disavowed saying. The nastiness I can handle. The arguments that I’m wrong I can handle. But the refusal to grant me a position I explicitly assert over and over…that has been so disappointing that I doubt I’ll want to continue.Report

          • Avatar DensityDuck says:

            The point is not to understand your position, the point is to get you to open up so they can dogpile you. Hopefully peer pressure will get you to go away, which they will count as a victory for their point of view (because, obviously, if you didn’t secretly believe that you were wrong, then you would have had a valid response to whatever objections they thought up.)Report

            • Avatar James Hanley says:

              I’ve come to agree on the dogpile part. I don’t agree they want me to go away. Perhaps someone here and there does, but I don’t think LWA, Stillwater, or Shazbot is trying to drive me off. Hell, I don’t even think Blaise, as much as he and I go at it, is trying to drive me off.

              But I do think they are not being honest with themselves about their claimed desire to understand, else they would make more effort to understand and less effort to immediately tear down.Report

              • Avatar Stillwater says:

                James, what is it I don’t understand? You proposed a definition of “markets” on the premise that any further discussion about market-related concepts requires we agree with that definition. I’m disputing the definition. Where do you see any desire to not understand in any of that? I think I understand it perfectly: I reject your proposed definition. It includes any and all activities between people, and that’s a useless concept wrt getting clearer about the differences between us.

                I mean, you could much more effectively further discussion on the topic by simply asserting that this is the definition of markets I will assume in order to further discussion of regulation and what constitutes freedom within a market. And that’d be fine. But don’t kid yourself that Rambling Rod, or Shaz, or LWA, or me don’t understand what your saying. And please refrain from thinking that we’ve expressed a willful desire to do so. That’s just a little too convenient, isn’t it?Report

              • Avatar Stillwater says:

                Actually, to narrow things down a bit, I can say that I’m not being disingenuous in arguing as I have. I won’t speak for those other devils.Report

              • Avatar James Hanley says:


                For the moment I’ll address only this: “It includes any and all activities between people

                Once again you stick me with a claim that I have explicitly rejected. Even though I gave explanations of things it did not apply to, you pretend I never did and make this false claim about what I’m saying. Somehow, in your interpretation, exchange of value for value includes threats of force, theft, rape, murder…because those are activities between people.

                I’m supposed to see that as good faith? I’m supposed to see your misattribution of my views as evidence that you actually understand what I’m saying?

                How about this? You’ve had it easy; you never put yourself on the line. How about you write a post trying to define a big concept in such a way that it doesn’t have trouble with any boundary cases. Give it a whirl, see how easy it is. Then I’ll come in and pick at the edges, claim you’re applying it to things you deny you’re applying it to, and repeat the claim no matter how often you explicitly explain why it doesn’t apply to those things.

                Give it a try, it’s a hoot to have someone being that disingenuous. At that point, maybe we can develop some mutual respect and liking again. But at the moment, you’ve burned that down. It’s gone.Report

              • Avatar Stillwater says:

                I’m supposed to see that as good faith?

                If your only response to those challenges is to say that you think they aren’t a part of markets, even when they’re consistent with the definition you want us both to adopt, then I don’t see how you can be accusing me of bad faith. You reject those examples as well. But there entailed by the definition. So … we both agree the definition’s wrong. It needs to be narrowed. You haven’t done that.

                As for who’s ass is on the line, you’re right about that. I give you lots of props for tackling this pretty huge issue. But just because I give you those props doesn’t mean I’m gonna stop making criticisms of the argument presented. Especially when you’ve agreed with those criticisms but haven’t revised the definition.Report

              • Avatar James Hanley says:

                but haven’t revised the definition.

                Here’s the crux of it all. You think that showing a few boundary cases where the definition seems to fit interactions that you don’t think should be considered markets means the definition should be revised.

                But we’re talking about a concept. Concepts cannot be defined in a way that is as perfect as you are asking for. It’s an impossible task. If I revise the definition, new boundary cases will appear. If I revise it again, a different set boundary cases will appear.

                So you are quite literally setting a standard that it is not possible for any human to meet. There will always be boundary cases, so their presence does not invalidate a definition, or all definitions are invalid.

                What’s important is whether the boundary cases you identify really confound the issue at hand. And yours don’t. Arguing whether husband and wife bartering over dishwashing and nights out does not touch on the issue of whether there are very different types of activities that are clearly markets and clearly do not have third-party regulation. There is no relevance at all.

                And that’s why I don’t have any problem conceding, when you made a reasoned argument, that we don’t need to include husband/wife bartering, but don’t see any need to change the definition. The husband/wife example is a boundary case that doesn’t touch the heart of the argument.

                It’s not sensible to revise a definition in response to a boundary case that doesn’t touch the crucial issues in an argument. If we started on that path, we’d never be able to have a substantive discussion, because there literally is no end to that process.Report

              • Avatar kenB says:

                Or as my thesis advisor used to say, the fact that mules exists does not invalidate the distinction between horses and donkeys.Report

              • Avatar Stillwater says:

                Then I’ll come in and pick at the edges, claim you’re applying it to things you deny you’re applying it to

                Ahh. I never claimed you were applying to anything. It’s a definition! I think you have me confused with someone else.Report

              • Avatar James Hanley says:

                your proposed definition. It includes any and all activities between people,

                But it doesn’t “apply” to anything.

                Got it.

                But I repeat my invitation. Why don’t you try to come up with a definition of markets that perfectly includes only those things you want included, and perfectly excludes all things you want excluded.

                Give it a try.

                Because my position is that anybody who thinks pointing out some troublesome boundary cases in a general definition necessarily undermines the definition has obviously never tried to do so.

                So, are you going to be the guy who just sits in the back and nitpics, or are you going to step up to the plate and give it a try yourself?Report

  18. Avatar James Hanley says:

    I think this experience has persuaded me there’s no point in writing a follow-up post.

    Many of you have jumped to the conclusion that I am making an argument about markets in general not needing regulation. I don’t think a fair reading of my post could lead to that conclusion, but I’ll accept that perhaps I’m wrong and it could fairly be read that way.

    But after I have repeatedly denied that I am talking about all markets, or making a claim that big, sophisticated, modern markets don’t need regulation, it’s more than a little perturbing that people keep asking about that, or writing as though I am actually suggesting that.

    It’s ridiculous, and suggest a lack of interest in having a sincere conversation. Critique me, fine. But don’t keep acting as though I’ve said what I’ve repeatedly disavowed, or as though I haven’t answered a question that I’ve repeatedly answered.Report

    • Avatar Shazbot5 says:

      I think that is unfair to LWA, Stillwater, Ramblin Rod, and me.

      But I respect that you don’t wish to discuss it further. Maybe a fair ending.Report

      • Avatar James Hanley says:

        Bullshit on the unfairness. Go back and read how many times I had to repeat that I wasn’t making a claim about modern markets.

        And you’re claiming I’m being unfair to you?

        Give me an explanation for why the same point kept being assumed despite my repeated denials of it. Please, I want to understand how you all see that as fair or charitable.Report

        • Avatar Shazbot5 says:

          Because you refuse to admit that you have a counterexample to the claim that it isn’t possible for markets (not tiny Hanley-pseudo-markets, bit real markets) to exist without regulation.

          I doubt Stillwater, and LWA, and Ramblin Rod, and I, or even Blaise think we are being unfair to you.

          Maybe you should look in the mirror before critiquing Blaise’s style and bluster.

          And that is the last I’ll say because I now feel that you are -as you say you are- shouting at me, and no one shouts at the Shaz.Report

          • Avatar James Hanley says:

            Because you refuse to admit that you have a counterexample to the claim that it isn’t possible for markets (not tiny Hanley-pseudo-markets, bit real markets) to exist without regulation.

            Really? And what would that be?

            Because to the best of my knowledge I don’t have one.

            I mean, this is shocking to me. What’s your evidence for this claim?Report

            • Avatar James Hanley says:

              Or to put it in your terms, is it either friendly or charitable to accuse me of doing something I’ve repeatedly disavowed doing?Report

    • I think a few things are happening here, none of which is mutually exclusive:

      One is the disingenuous bickering and counter-bickering from some of the League liberals that you identify.

      Another is that your post is, in my opinion, so well written that it’s hard to argue with. I, too, have a hard time after reading your post to see in there any claim about regulation or the “free” part of the “free market” equation because, well, you said you didn’t want to write about that. But because the point is so clear, people are going to carry the ball and try to expand on the implications as if you were writing about regulation. In doing so, a few of them impute to you arguments you state clearly you are not making. (I’ve run into this a few times at “Lawyers, Guns, and Money” to the extent that I almost never comment there, or even read, any more because most of them simply refuse to listen to someone who disagrees with the consensus views, and I’m a liberal who probably agrees with them most of the time!)

      Yet another consequence of the clarity of your post is that some of us may have read it, digested it, and not commented because there was not much to comment about. I know I have inserted a few comments–mostly of the nitpicky, gadfly sort that I intended to be a joke or a side comment but might have come across differently–but I have not really engaged your argument because I find your definition of “market” compelling. (If you were writing about regulation, then I might be a little concerned about the normative weight to be assigned to markets’ being pre-political or extra-political. But again, the “normative weight”–a clumsy term, I know–is relevant more to arguments for or against regulation and not to the actual definition you wrote this post to offer.)

      I don’t blame you if you don’t want to write your second post, but if you do, I’ll read it.Report

      • Avatar James Hanley says:


        Thank you very much. After all this, I really appreciate hearing that. Truthfully, because the responses to this post stressed me out more than any in years. I don’t mind being criticized and told I’m wrong. But there’s something about having people simply deny that you are making the claim I’m making, and attribute to you one that’s more convenient, and then criticize you for being uncharitable… In all truth, I didn’t sleep last night. I was up all night, didn’t go to bed until 5 in the morning, and our alarm goes off at 6.

        So, really, this means a lot to me.

        Perhaps I need to stop trying to write clearly. I’ll just get obscurantist, hide my point as well as I can, and sit back and enjoy watching everyone try to puzzle it out.

        Why oh why did I have to had a grad advisor who insisted on clarity in exposition?Report

        • Avatar Chris says:

          James, I agree with Pierre. I just left a tangential comment because I found nothing to argue with in the post, and hate to just type, “You are correct, sir.”

          Plus, one of your “critics” here is, as you know, somewhat stubborn once he’s committed himself to being wrong.Report

        • Avatar Kim says:

          I want more posts!
          -I’ve- been good (I think, at least), and haven’t completely misread you.

      • Avatar Mike Schilling says:

        What Pierre said. So far, you’ve made some good definitions, backed up by examples. Nothing to argue with or even quibble about. Now, when you use those definitions to support libertarian claptrap, I’ll have something to say. 🙂Report

      • Avatar North says:

        I’ll weigh in with Pierre and Mike. Other than quibbling with what the definition of market is I haven’t read any critics that seem to contest what you’ve written about much.Report

        • Avatar switters says:

          James – as a long time reader but seldom commenter, and as someone more politically aligned with Shazbot, Still, and LWA, I want to commend you on your patience. I would have stopped responding to bunch of commenters on this post a long time ago. So +1 on the previous comments praising this post. Simple post. Simple Point. And despite all the bluster and arguments with points you clearly didn’t try to make, point made.

          And again as someone who doesn’t always agree with you, don’t take my silence as one who doesn’t want to listen, and learn, or as an indication that the smoke screen raised by others is obscuring the communication of your points to those of us quietly listening.

          Im betting there are many more lurkers who agree. Would love to read the follow on post.Report

  19. Avatar Roger says:

    I would sure like to hear where you are going on the second part of this series, James. Don’t give up.Report

    • Avatar Roger says:

      And one last question, James… I provided earlier examples of self enforced markets in WWII prison camps and in black markets. Blaise disagreed, but you never weighed in.

      Do you agree that these are examples of unregulated markets, or are you and I defining terms differently?

      Just wondering so we can calibrate what we mean…Report

      • Avatar James Hanley says:

        Are you kidding? Just look at Shazbot above. I’ve repeatedly said I’m not talking about modern large markets, and s/he flat out claims that I really am, and am just refusing to admit it. I don’t mind honest disagreement, but there’s nothing honest about that.

        But, yes, I agree with you about prison camps and black markets. Some black markets have a third party regulator, of course. Sometimes it’s a crime boss, and sometimes it’s actually government officials (albeit corrupt ones). But there are scads of black markets that don’t have third party regulators. I’ve even engaged in a few of them myself.Report

  20. Avatar Shazbot5 says:

    Last point before I get screamed at in all caps again (the horror!):

    I would like to point out that your post was partly a critique of, and I quote, “the spittle-flecked scream “there’s no such thing as a free market!”” and Blaise’s claim that “markets only exist because regulation makes them possible.”

    However, you now agree with both Blaise’s claim and the spittle-flecked scream, as long as we interpret the use of “market” in both claims to mean large open, public markets where a variety of goods -including sometimes valuable goods. That seems like a charitable interpretation of Blaise or the screaming liberal, i.e. that Blaise meant actual public markets where valuable goods are traded.

    So basically you agree with Blaise as long as you interpret his claim charitably.

    Yet somehow you accuse all your intelocutors of being uncharitable. When you’re in a fight with the whole room, you might be the problem.

    Again, peace out.Report

    • Avatar DensityDuck says:

      So in other words, “there’s no such thing as a free market” is true so long as you define “free” and “market” properly; and “there cannot exist a market without regulation” is true so long as you define “market” and “regulation” properly.

      And if someone doesn’t agree with your definitions then they’re a jerk.Report

      • Avatar Shazbot5 says:

        No. Only so long as you define “market” to mean the sort of thing people are ordinarily talking about as “markets,” not marriages or mowing your friend’s lawn.Report

    • Avatar James Hanley says:

      Where do I agree with Blaise’s claim? He defines markets as not existing without regulation; I claim they can exist without regulation. He says those examples aren’t markets; I say they are markets.

      Again, you appear to be trying to tell me what I am arguing, instead of letting me state what I am arguing. I don’t see that as good faith.

      As for the joke about the spittle-flecked scream of the liberal, I notice that you conveniently fail to note that I also mocked (clap clap) libertarians (clap clap). Charitable, eh? If you call cherry-picking charitable.

      And of course I’m hardly in a fight with the whole room, unless you, Blaise and Stillwater constitute the whole room.Report

      • Avatar Shazbot5 says:

        Blaise’s claim and liberals claim is that markets can’t exist without regulation. Interpreting him charitably, he means large markets or markets as we encounter them, where sometimes strangers trade high value goods.

        The claim should not be understood as a definition.

        Is Blaise wrong?

        Are liberals wrong?

        If they are right, is the only purpose of your post to point out that there is another thing that could be called a market (a small trade amongst your friends) that is not regulated? If so, that is a nitpicky point that has nothing to do with the claim of liberals or Blaise specifically, which you appeared to be addressing.

        By analogy, imagine I claim “Drugs should be regulated.” and you responded with an argument about how chocolate is a drug and that shouldn’t be regulated. I would respond by saying that I mean to refer to a class of highly addictive narcotics by “drugs” and gave a list. Apparently, at this point (if our analogy holds) you would accuse me of being uncharitable and refusing to understand that you just wanted to make this point about what counts as a drug.

        As long as you agree with everything important liberals, which you now do, that is good. Feel free to stipulate broad definitions of “market” that apparently apply to all events involving intelligent agents.Report

        • Avatar James Hanley says:

          Blaise’s claim and liberals claim is that markets can’t exist without regulation. Interpreting him charitably, he means large markets or markets as we encounter them, where sometimes strangers trade high value goods.

          Ah, there’s that charitable business again. Get back to me when you’ve decided it’s a two way street. Until then I’m feeling quite uncharitable.Report

          • Avatar BlaiseP says:

            Heh. Let’s agree on this: there’s no need for regulation in any sort of market which you think doesn’t need regulating. Those markets exhibit little to no risk to either buyer or seller. But since risk equals reward and by extension, profits and losses derive from risk, there’s no profit in any unregulated market.

            See? Isn’t it completely obvious now? When I offered Efficient as a substitute for Free in this Free Market business, you wouldn’t take me up on it. So now, I’ll observe your Free Markets which Don’t Require Regulation don’t involve money or any recognisable profits.Report

            • Avatar James Hanley says:

              Let’s agree on this: there’s no need for regulation in any sort of market which you think doesn’t need regulating
              You know, most of your post was devoid of assholery. I would have responded in kind if you hadn’t begun with this little turd.

              You’ve got intelligence, no doubt. It’s a shame you can’t put it to use in actually developing an argument that is honest from top to bottom.Report

  21. Avatar DensityDuck says:

    I think what we’ve learned from this past discussion is that it’s not a market unless there are true Scotsmen in it.Report

    • Avatar Shazbot5 says:

      Is the fallacy of that same name present in this argument:

      Mr. BP: Drugs should be regulated extensively

      Mr. JH: Wait, everything that effects people’s brain is a drug, and chocolate is a “drug” by that very same definition. Clearly, chocolate shouldn’t be regulated, so you are wrong Mr. BP, when you say “Drugs should be regulated extensively.”

      Mr. BP: But that’s not what I meant by “drug.” I meant the sort of thing that people are usually talking about when they say “Drugs,” e.g. strong narcotics and opiates and the like, and what I meant to say is clear in the context. So your example of chocoate doesn’t disprove my claim. Can you give a better example of a drug that shouldn’t be regulated.

      (Mr. DD: No true Scotsman! I iz foolish)!

      MR. JH: How dare you be so uncharitable to me! ALL CAPS! My point wasn’t to disagree with you, Mr. BP. My point was to say something about the definition of “drug” and to point out that under a broad definition (where almost all substances count as drugs) some drugs shouldn’t be regulate.

      Mr. BP: As long as we agree about my original claim.

      Mr. JH: But I don’t agree and I have refuted your claim that drugs should be regulated because chocolate is a drug and shouldn’t be regulated. And quit putting words in my mouth ALL CAPS.

      Etc,., etc.Report

      • Avatar DensityDuck says:

        “All Democrats think that bums should just be given as much free stuff as they want, forever.”

        “Hey, I’m a Democrat and I don’t think that.”

        “I meant radical-liberal Democrats, obviously, which is what’s generally understood to be what people mean when they say ‘Democrats’, and it’s uncharitable of you to assume I meant anything different!”Report

        • Avatar Shazbot5 says:

          Is it true that the ordinary use of “democrat” is to refer to extremist democrats?

          The ordinary use of “market” is not to refer to things like marriages.

          You seem to be missing this.


          • Avatar Roger says:


            ( you don’t mind me calling you Shaz, do you? )

            We have proven the definition. Conclusively. Prostitution between client and hookers with zero third party involvement in enforcement and regulation is a reality. It is a multi billion dollar market. Yes, MARKET. As such, James proves his case. We could also point to extensive literature on trade among tribes with no external enforcement in the anthropology literature. These are markets too. Or the informal markets that spring up in prisons and concentration camps, some of which have no external regulators outside of the participants. We could go in for hours with countless cases.

            Just concede the point, please.

            When one side keeps making the same point over and over again despite the existence of millions of obvious counter examples, it brings your motives into question.Report

  22. Avatar Citizen says:

    I think James makes a good point in linking trust in small non regulated markets. Blaise has a good point in associating risk and what magnitude of value classifies a market. These two point are nearly inversions.

    What conditions have to be present for non regulated markets to occur in modern times? Markets that are new on the scene and regulation of such would be near abstract? Markets where the cost of regulation could not be recouped by any reasonable fraction of the volumes being traded? Flash markets that open and close before regulators can reach the scene of the crime?Report

    • Avatar James Hanley says:

      Flash markets that open and close before regulators can reach the scene of the crime?

      That is such a cool idea.Report

    • Avatar Kim says:

      I knew a guy who ran a gambling ring at his high school (he said it made algebra tolerable). He says he spent all the proceeds paying off his teachers for looking the other way. In such a case, the teachers can’t possibly be disinterested observers. And he can’t, either, as he’s playing the part of the merchant.

      Humph. Non-regulated, via too much graft!

      (he saw paying the underpaid teachers a bit extra as a net good).Report

  23. Avatar LWA (Liberal With Attitude) says:

    Well, look- It wasn’t my intention to provoke so much ire, my attitude notwithstanding.

    So here is a question, not for the libertarians here, but for the rest of us.

    Is it clear to you what a libertarian world would look like? Do you really think you understand it?

    Social Security and Medicare? Would they still exist, or be transmogrified ala Paul Ryan into something altogether different?

    Would there still be governmental regulation like EPA, EEOC, FDA?

    How would the interstate highways, airports, and ports run?

    Would there still be building codes? Zoning codes?

    How would a libertarian government handle a hurricane? Labor laws? Labor unions?

    Look, I know it seems like I am being mean spirited here, and picking on people.

    But I think its completely fair. The libertarians spend a lot of time and effort here, there, and everywhere advocating their cause and telling us why they should be given the reins of power.
    Its not like this is a brand new idea, and needs time to flesh out the details- you guys have been banging this drum for 50 years.
    And the lineage of libertarianism draws from Objectivism and Ayn Rand which, when read aloud, makes most people’s hair stand on end. And Rand Paul’s response to that guy’s house burning down, and Paul Ryan’s proposal to turn Medicare into a coupon program, certainly clarified libertarianism, but not in a good way.

    So it seems only fair to harbor a measure of skepticism about What Would You Do If You Were In Power.Report

    • Avatar Kim says:

      The word libertarian has been coopted by many people who are NOT libertarians. I can give you the Koch version, or I can give you the non-Koch version. I know which one I’d rather see.Report

    • Avatar Roger says:

      I’ll take a stab at it, just for shits and giggles.

      Safety nets for the poor and elderly would be run more like insurance. Because stupid people fish everything up for themselves and everyone else and would be too irresponsible to plan ahead, the programs would require annual notarized opt out.  They would work via a payroll deduction type process with premium forgiveness when unemployed.  There would be several competing plans to choose from.  Some would have higher premiums and higher benefits, some lower premiums and lower benefits. If some one wants to start a charity to fund the premium difference between the benefit rich plan and the low cost plan, they should feel free to do so, and to pressure the rest of us to join in via social obligation and shame. 

      Environmental protection, labor safety and food and drug safety would be handled by congress passing a few, consistent, relatively “thin” set of regulations on a federal level that would be reviewed every ten years with a required supermajority to sustain them. They could be supplemented with local regulations, pollution credits and competing private monitoring and seal of approval processes such as the UL. In no case would any bureaucracies or government agencies be built absent privatized competition. 

      Labor laws would be simple and sparse, again requiring a supermajority and sunset provisions. 

      Infrastructure would be funded from a supermajority of state or federal legislatures, built by private firms.  Other projects would be funded by local government or built by user fees. 

      Building codes would be thin and subject to sunset.

      People would be expected to insure themselves against catastrophe, though relief funds would be available, and in no case would someone be allowed to rebuild in a hurricane or flood area without proof of total private insurance.

      Schools would be privately run, with competition using modern technology and established best practices to provide substantially better results at substantially less than half the current cost. 

      Health insurance and medical care would be decentralized with no doctor cartels allowed. See Goodman’s writing on the topic as to how this would work. 

      The military would be about a fourth the size, with other wealthy nations no longer free riding. If they want our troops in their country, they should pay us for them. No Iraq. No Afghanistan. No war on drugs, though users would be encouraged to sue anyone promoting substances which are addictive.

      Global warming would be handled by a multi nation task force looking into the most cost effective way to combat CO2 without harming free enterprise or building a master control process that would be subject to usurpation by rent seekers. My guess they would land on carbon removal processes. See Lomborg for more details. 

      Taxes would be about half or a fourth what they are.  The economy would grow at double the rate. Thus in the course of a few generations, the average poor person would be making more than the top quartile today.  In another four or five generations after this, the average poor person live better than a millionaire.  Economic growth rates trump everything else we can do for the future.

      Is any of this likely? Nope. Because libertarians are too rare. Most people are too selfish to step back and allow others to prosper.Report

      • Avatar Roger says:

        Oh, and I forgot…

        Patents would be substantially reduced in scope and time. Defensive patents would be prohibited as would process patents.

        Colleges would be required to create low cost aka basically free online degree options to retain tax exempt status of to qualify for any kind of grants or subsidies.

        Any research or data gathering subsidized in any way shape or form by government funds or tax exempt colleges would be required to be published and available to everyone for free within 18 months of publication via the web.Report

        • Avatar Roger says:

          And of course unilateral elimination of trade barriers. No minimum wage. No agricultural or corporate subsidies. Zero tax rate on capital gains. No government employee unions. And a process to allow states to compete for immigrants with a path to citizenship.

          Little or no licensing requirements except in the most critical fields.

          NASA would be privatized and property and mineral rights would be established for the moon and Mars.

          No ethanol requirements and no expensive regional blend requirements.

          Prisons would be one third the size. Fewer cops. Fewer government workers. Simpler taxes and a smaller IRS.Report

    • Avatar James Hanley says:


      Those are reasonable questions for the most part, and I don’t think they’ll piss anybody off, because you’re actually asking.

      What’s the pisser is when you, who are admitting you don’t really know just what libertarianism would look like, make pronouncements about what libertarianism would look like, or what the outcomes of a libertarian system would be, and it doesn’t match what libertarians think it would be. If you don’t know, the proper position is to ask, not to presume.

      What else is a pisser is when you complain that nobody explains libertarianism, which actually happens on this blog all the time.

      In sum, it all shows that you don’t understand libertarianism, don’t pay attention when we talk about libertarianism, want to make pronouncements about it anyway, then want to complain that we’ve never explained it.

      You may not actively want to provoke ire, but seriously, that’s the behavior of a real git.

      Sometimes it’s just funny, though, like when you say TARP would be the outcome of a libertarian system, even though TARP happened in the current system which you prefer to a libertarian system. Then it’s clear that you’re not even bothering to think things through.Report

      • Avatar Kim says:

        It was TARP or martial law. I mean, dude, it’s your choice what happens in LiberTopia. But my personal opinion is that LiberTopia doesn’t let corporations blackmail the government — and takes preventative action to make sure this doesn’t happen, under the cover of “national security”.Report

        • Avatar Jaybird says:

          One hopes that, when Libertopia arrives, it’s not because the car is already 10 feet past the edge of the cliff and the Demopublicans hand the Libertarians the keys and say “WELL YOU’RE IN CHARGE NOW!!!!”Report

          • Avatar Kim says:

            But my point is: you guys gotta come up with the rules that make sure “too big to fail” doesn’t happen.
            Roger’s libertopia doesn’t have those rules.Report

            • Avatar James Hanley says:

              General libertarian answer: Let the big firms fail. It will hurt like hell, no doubt. But there’s a lesson in it for other firms. It’s mostly a short-term problem. Bailing them out makes it a long-term problem by creating perverse incentives.

              Also, imprison the execs for fraud when appropriate. And not at Club Fed.Report

              • Avatar Kim says:

                So… martial law? …. okay…Report

              • Avatar James Hanley says:

                Martial law is your claim. I don’t buy it.Report

              • Avatar Kim says:

                If suddenly you have a bankfreeze (BoA, or one of the other big banks, was printing out signs in preparation for that — people posted pics online), where you can’t get money out, what the hell happens? Remember that it’s not just a problem about “who’s broke” — it’s the tertiary and fallout from “who’s broke”, and that takes time to work its way through the system. And in the meantime, the banks want to sit on their money, not let people take it all, in case they need it to appear solvent (which is a good financial decision for them)

                Remember, it’s only caturday after bank failure friday. We lost how many banks in the past few years? An awful lot (over a thousand). And they were all insolvent for a good long time before we shut ’em down.

                The economy can take an awful lot of little quakes, a lot easier than if we just pull the string and say “bankruptcy!” for everyone who isn’t PNC.Report

              • Avatar Roger says:

                I can envision a world where financial firms become so large in a free market that their failure would cause catastrophe. I can also envision the existence of a thin, robust, impartial set of rules which limits such a tendency without encouraging it via implicit governmental guarantees.

                We aren’t anarchists. At least not yet.Report

              • Avatar Kim says:

                How about Verizon?
                If it goes down, we basically lose communications in Washington. Including the Pentagon.

                Yeah, see, I’d like to hear what the hell “thin robust impartial” set of rules you can come up with (or we can come up with…).Report

              • Avatar Patrick Cahalan says:

                No, we don’t.

                If Verizon “goes down”, they have a solvency problem. Their technology doesn’t disappear, nor does their infrastructure.

                Filing for bankruptcy isn’t going to turn those networks off.Report

    • Avatar James Hanley says:

      OK, that out of the way, let me answer some of LWA’s questions.

      Is it clear to you what a libertarian world would look like?
      Is it clear to you what a liberal world will look like 30 years from now? If not, could it be because liberals aren’t all identical, and that ideas shift? Part of the problem is that you keep assuming there is “a” libertarian world. Which libertarians are you talking about? Anarcho-capitalists? Minarchists? Paleolibertarians. Classical liberals?

      Do you remember some of the discussions around these parts about the varieties of liberals and progressives? To me you all fit under a general liberal label, but I recognize that there are variations among you. You do not all want exactly the same things, so what “a” liberal world would look like is not a meaningful question. In the same vein, what “a” libertarian world would look like is not a meaningful question.

      If you can write a post defining a liberal utopia that doesn’t provoke disagreements among the liberals here, then I’ll do my best to try to do the same for libertarians. Good luck to both of us.

      It really seems that some of you liberals want there to be a single clear definitive answer to “what libertarians want.” But that’s wishful thinking. That’s your desire for convenience and simplicity in understanding.

      Any time you ask a large group of people what they want (“What do women want?” What Does the Negro Want?”) the only possible answer is something so vague that it can easily be attacked. The cynic might think that’s really the point. What do libertarians want? Um, what’s the one thing all libertarians want……? “More liberty!” “Oh, but what kind of liberty, doesn’t government make liberty possible, how can you have liberty in a violently anarchist world, doesn’t that just mean the powerful get to oppress the weak, etc. etc.”

      The question is just so poorly framed that it’s almost impossible for it lead to any reasonable discussion.

      But recognizing that there is as much variation within libertarians as there is within liberals, I’ll say this in general (all of which has been said on this blog many times):

      Anywhere liberals want government action, libertarians would like to look for a way to avoid government action if possible. This could result in any of the following claims (which are–roughly–in descending order):
      –a claim that the problem isn’t really worthy of government action;
      –a claim that the problem is actually caused by government action, so we should remove, or at least change, the problematic policy;
      –that the problem isn’t resolvable by government action;
      –the problem, even though resolvable by government action, can actually be resolved by private action;
      –the problem could be resolved by a combination of government and private action;
      –the problem requires government action.

      It’s more a mode of thought than a precise set of policies. You keep asking about specific policies, and while any libertarian can give you his/her preferred policies, they can serve only as examples of possibilities that result from this mode of thought. So when Roger talks about safety nets, you should take that not as “the” libertarian solution but as one possibility that flows from the libertarian thought-mode.

      I suspect some liberals are saying, “well, we don’t object to that scheme.” But I’ll stake my claim on the grounds that liberals don’t follow that scheme, even if they don’t object to it in principle. Because that mode of thought requires stopping at each position and seriously asking, “can we manage the issue at this level, before moving to the next one?” Liberals have a tendency to see a problem, or presumed problem, and jump straight to the “what shall be our government solution” end of the process, not taking the steps in between seriously.

      Actually, that’s probably not entirely right. liberals use that thought mode in some areas, but not others. When it comes to personal issues liberals tend to make more use of that thought mode. When it comes to economic issues conservatives tend to make more use of that thought mode. Libertarians see it as a mode to be used across the domains. That doesn’t mean we end up in the same place in each domain, or on each policy issue, or even with each other all the time.

      So if you think of libertarianism as a mode of thought that is much more skeptical about government and how we make use of it, you’ll be in a position to begin understanding it better.

      If you think of libertarianism only as an end point, the libertopia, a particular set of policies, you’re not going to understand it.

      Liberalism isn’t just a set of policies. Why should libertarianism be that?Report

    • Avatar James Hanley says:

      OK, and now for a response to one specific policy area you mentioned (there’s no way I can attack them all, and that’s one of the little dishonesties that comes up in these debates–imagine a conservative demanding that you answer what “the” liberal policy would be for a long list of policies, with the expectation that they all be answered in a com box).

      What would be the libertarian response to a hurricane?

      Better phrase that as, what would be one libertarian’s proposal for how to respond to a hurricane. As it happens, I already wrote this up in a small publication some years ago, after 9/11.

      Keep FEMA as a coordinating agency (but move it out of DHS so it can act as an independent agency again). FEMA should focus on coordination of response to natural disasters. As I wrote:
      FEMA should develop advance agreements with clothing suppliers such as Wal-Mart, K-Mart and others, grocery store chains for food, and package-delivery companies with airfleets like Fed-Ex and UPS to coordinate a response to any emergency that might arise. Relying on a diversity of sources and coordinating delivery is the quickest and most flexible way to bring help to a devastated region.

      Nobody knows what people need after natural disasters better than Wal Mart, because their inventory system is so sophisticated they can track exactly what the demand is after different types of disasters in different regions, even down to knowing what type of M&Ms are most preferred after a blizzard in Minneosota vs. after a hurricane in Florida.

      Now, there’s where the liberal who just wants to attack libertarians says, “Oh, libertarians think all people need after a hurricane is M&Ms!” But it’s where the thoughtful liberal (and conservative, and libertarian) says, “Wow, with that kind of detail, we could really pinpoint what other types of things people need, with information that was developed from the bottom up, after previous real disasters, instead of information that was developed from the top-down, by people sitting in conference rooms hypothesizing.

      Enhance Communication. No resource is more valuable than information, and in the aftermath of Katrina, crucial information needed for efficient response was missing. Rescue workers were unaware of people trapped in various parts of the city, or what the conditions were in many of the shelters. The cause of this problem was poor communication, which in itself was a result of the immense geographic size of the disaster and its effect on telecommunications. The unsung hero of emergency response turned out to be the satellite telephone. FEMA should have large numbers of satellite phones and vast quantities of batteries on hand, prepackaged in shipping containers. These phones could be flown to disaster sites immediately, or even in some cases preemptively and widely distributed to both emergency personnel and volunteers. Although a certain number of phones would inevitably disappear during the response period, the cost would be minor compared to the gains in coordination that reliable communication would make possible.

      Give citizens the tools to help with the response. Trust the citizens. What do people always do after an emergency? The band together to help each other out. Just give them the tools. Don’t encourage people to sit around and wait for government to do a job for them; don’t withhold what they need to do the job themselves.

      Now maybe that all sounds radical to some folks. But I bet it doesn’t. If you insist on thinking that all libertarian policy proposals must be radical, you misunderstand. Yes, there are radical libertarians. Yes, there are libertarians who want to eliminate FEMA. But that’s not “the” libertarian proposal; it’s “a” libertarian proposal and here I present an alternative libertarian proposal.Report

      • Avatar Kim says:

        Oh, it sounds mighty fucking radical to me. Relying on Just in Time? During times of major disruption in supply lines?? *eyeroll*

        Major supply depots for the East Coast? I dunno, but half the depots that get me stuff from out of the city are in TN and WV. And when WV gets a ton of snow, the odds of -the- Interstate getting shut down go up. A lot. That road’s a modern marvel, but I don’t want riots if it goes down.

        Me? One of the major issues with Sandy was everyone in NYC going out and buying milk and eggs (AKA perishables), instead of V8 or other canned goods (you’d think they don’t have canopeners or something…). This is something solvable by a good information campaign.Report

        • Avatar Kim says:

          Also, for chrissakes, if you’re likely to declare water “unpurifiable” — tell people ahead of time!!Report

        • Avatar James Hanley says:

          Relying on Just in Time? During times of major disruption in supply lines??

          And the government will do it better…how?

          Think in terms of logistics. Who’s got the best logistics operation?Report

          • Avatar Kim says:

            US Military. They hire some of the best in the business, and if there’s a problem, they know all the rest. (Or would you rather I said Anonymous? They’re the ones taking credit for the Arab Spring, after all… and that was a huge logistics op).

            The government should have minimal warehouses that house enough food/water (or non-grid water-purification where possible) and other basics to prevent riots.

            The government does not need to provide laundry services, because it is possible to transport the mobile disaster laundry there beforehand (and store it in a relatively safe place). Also, it generally doesn’t kill people to have somewhat dirty clothes.

            (Sorry, you’re making decent points, actually, and I’m just getting on my hobbyhorse. If you wanted to use Just in Time to Proactively transport goods to commandeered warehouses, well before the evacuation, that would be quite acceptable).Report

            • Avatar James Hanley says:

              I’m not knocking the military. Any org that can shift that much manpower and cargo around the globe as quickly as they do gets my respect.

              But seriously, if I wanted to rely on moving goods quickly around the U.S? The military’s far from the top choice.

              The government should have minimal warehouses that house enough food/water (or non-grid water-purification where possible) and other basics to prevent riots.

              No objection to that, other than that I would emphasize water purification equipment over water itself. Easier to transport and distribute, and you get more clean water per unit than you do per carboy of water. Not suitable in all cases, though, so I wouldn’t skimp on the plain ol’ water.Report

              • Avatar Kim says:

                hmm… rain barrels as a matter of national security? cool! (seriously, the water was potentially alpha-radiation contaminated, which the rain barrels wouldn’t have been.)

                Just get the military’s logistics guys on the job, and commandeer the trucks you’ll need. It’s one thing to create a fragile network that is prone to disruption, it’s a different thing to create a more costly but more resilient network.Report

              • Avatar James Hanley says:

                Heh, maybe we should have government give subsidies on rain barrels. (I’m only half-joking.)

                More seriously, it wouldn’t be ridiculous for local communities to make cisterns a mandatory part of any building permit. If they can reasonably require that windows be placed no more than x” from the floor to facilitate escape in an emergency, it doesn’t seem unreasonable to require a water storage system to facilitate survival in an emergency.

                Cost is an issue, of course. The cost of that many cisterns potentially might not cover the losses from not having them. I wonder if anyone’s done a BCA on that?Report

              • Avatar Kim says:

                Nah… let’s get the nuclear power plant to pay for it. After all, it’s their negative externality… (I’m not aware of anything else that can’t be purified by boiling it. hmm… beer subsidies… (for beer can stoves, of course.))Report

  24. Avatar Stillwater says:

    James, this is a reply to something you wrote upthread that I can’t find right now (I read it on the side bar).

    Wrt the utility of definitions and potential counter-examples … maybe I take too hard a line on that. But from my pov, if a definition suffers from a counterexample then the definition is wrong. You think that all definitions suffer from counterexamples, and maybe that’s true. But not all counteerexamples are the same – some go right to the heart of the definition. And I think that’s what my counterexamples have shown (or at least I see them that way). You think a market ought to be defined as any exchange of value for value between two people. I think that’s wrong, and have given some counterexamples to make that point. (And alas! here we are!)

    But I can say the same thing more clearly and put my own ass on the line. Here’s how the conceptual analysis of these terms shakes out in my mind. First, a description: In the normal course of a person engaging in market activity, a transaction will occur, and that transaction will be the exchange of value for value between two people. From that description, which strikes me as pretty accurate (subject to counterexamples) that’s how the semantics of things shakes out. So, by that description, an exchange of value for value isn’t a market, it’s one possible result of engaging in market activities.

    So, I’d say that what you’re defining in the OP is a market based exchange (or transaction), but not a market. And I think that the term “market” ought to be defined, instead, as an institutional or social arrangement of some sort which facilitates or permits value-exchange transactions. On this understanding, there are two distinct concepts in play that need to be kept distinct: a) the reciprocal exchange of value between to people or parties, and b) the (conceptual) space (defined by its conditions) in which that exchange takes place.

    Now, that may be all wrong. And I’m willing and open to being corrected on it. But my resistance to your definition of “markets” isn’t disingenuous or obstructionist or whatever else you might think. It’s based on a different conception of the terms in play.Report

    • Avatar James Hanley says:

      if a definition suffers from a counterexample then the definition is wrong.

      That’s much too simplistic. I’m telling you, hands down, as a guy whose profession it is to deal with the definition of concepts, that what you’re suggesting is an absolute, 100%, impossibility. When I teach research methods, I teach the students about operationalizing variables, narrowing them down so that we can know them when we see them. But an operational definition isn’t a conceptual definition–we have to operationalize precisely because definitions of concepts can never–not ever–be precise enough to enable us to always know them when we see them. And operational definitions are too narrow by themselves to really cover the concept.

      the term “market” ought to be defined, instead, as an institutional or social arrangement of some sort which facilitates or permits value-exchange transactions.

      In other words, marriage. (Welcome to my boat; step carefully, please place your feet in the center of the boat.)Report

      • Avatar Stillwater says:

        Hey, you missed the main point: that a transaction isn’t a market!

        But I think you’re wrong to think that there is no such thing as a good definition. At a minimum, a definition provides necessary conditions on a state of affairs under which the term applies. It isn’t necessary to capture all the necessary conditions (in which case you’d have an actual, for realsies, definition of a term), but it needs to capture enough of them so that the term can be used narrowly enough to capture the distinctions we want to capture with that term in order to make interesting claims about the world. A “working definition” is fine just so long as it’s complete enough to permit analysis, and just so long as it can be narrowed when evidence arises that the definition is either too broad (suffers counterexamples) or too narrow (leaves out important things we want the defined term to cover).

        My argument is that your definition failed to make those necessary distinctions. But I also think – and have argued – that a market is conceptually distinct from a transaction or reciprocal exchange of value. Those are two different things.

        But, whatever.Report

        • Avatar Stillwater says:

          The first “narrowed” in the comment above should be “revised”.Report

        • Avatar James Hanley says:

          a transaction isn’t a market!

          Yes, that’s a good point, and it’s been niggling at me. I’ll refine it to a market being the existence of opportunity to exchange value for value. (And, yes, that includes exchange within marriage, and I’m fine with that being a boundary case.)

          I think you’re wrong to think that there is no such thing as a good definition.

          I did not say that. I said that even a good definition will have boundary cases. And I’m amused that your improved definition included precisely the same boundary case that you chided me for, and that apparently you then immediately gave up the effort to find a definition that will achieve what mine could not.

          There’s an old saying that you can’t beat something with nothing. You can whip my definition ’til your fingers bleed, but if you can’t provide something better, you can’t beat it.Report

          • Avatar Stillwater says:

            Here’s what you wrote, which I’ve been … critiquing: So can we agree on that basic beginning point? That whenever two or more individuals exchange value for value they are engaging in a market?

            James, every comment I’ve made in this thread is an answer to the question you asked. I wasn’t reading all the other commenters and subthreads, and didn’t realize you were experiencing a full frontal assault. So my apologies for appearing to pile on and for appearing to be insufficiently charitable. I thought the question wasn’t rhetorical. My bad. It’s a fine starting point.Report

            • Avatar Stillwater says:

              Whoops. This was supposed to be linked to your other very friendly comment below. But somehow I don’t think the subtleties will matter that much.Report

            • Avatar James Hanley says:

              Eh, ok. I’ll accept your apology, of course, but to get it all out in the open, I’ve been pretty pissed at you since you jumped me over my response to Jesse. He made a wild-ass claim, I asked for evidence, and then you jumped all over my ass for not providing evidence for the (implicit) counter-claim, and said I had the burden. Not the person who makes the wild-ass claim having the burden, but the person who asks them for evidence.

              I think I’ve spotted a trend in your approach, which I’ve often dubbed the League Liberal Privilege. Same thing happening in this thread–you were really deep on criticizing my definition because it allowed for transactions within a marriage, even though all that missed my main point, but when I pointed out that your definition (and it was a delicious moment) also allowed for transactions in marriage, you didn’t even say, “Oh, yeah, maybe definitions are hard,” but excitedly pointed out that I missed your main point.

              I’m really tired of the liberal privilege position, and not inclined to be particularly cordial anymore.

              I don’t doubt you think I’m overplaying this or missing something, but that’s my perspective and it’s been developing for some time. You can be like the GOP and blow it off–it’s well within your rights and privileges–but just don’t expect that I’m going to see things any differently.Report

              • Avatar Stillwater says:

                You accepted that apology with such extraordinary grace and generosity I’m not sure what to say about it.

                Thanks, I guess.Report

              • Avatar James Hanley says:

                Heh, I can still enjoy your humor without any problem.Report

              • Avatar Stillwater says:

                Let’s get into this liberal privilege thing a bit. I’m curious what you mean. SO let’s go back thru what you took to be my jumping all over you wrt Jesse’s comment. If you’ll re-read that thread, you’ll notice – and I hope this is true, since I haven’t gone back to check – that at the end of your comment you asked liberals to justify the claim that “libertarian principles would lead to the bad guys winning”.

                And you’ll then notice that I listed lots of conceptions of libertarianism under which providing an affirmative answer to your question would be logically impossible. And if you’ll notice, in each case it’s because libertarianism is defined as preventing the bad guys from winning.

                So what you took as me jumping all over you for something you wrote to Jesse was me giving an example of how the question you asked cannot be answered.

                Where’s the liberal privilege in that?

                On the other hand, I will concede that later on I expressed some exasperation with the oft repeated idea (from one commenter in particular) that liberals just cannot help themselves from continually, and repeatedly, and deliberately, and stupidly, mischaracterizing libertarianism. But I think I also expressed in the thread that we don’t mischaracterize it. We disagree with it. (Or at least, disagree with that aspect of it.)Report

          • Avatar Stillwater says:

            And I’m amused that your improved definition included precisely the same boundary case that you chided me for, and that apparently you then immediately gave up the effort to find a definition that will achieve what mine could not.

            Yes. Let me just say this: I was providing minimal conditions under which two distinct categories apply rather than making an attempt to provide real definitions of those terms. I’m surprised you didn’t understand that. I could do better tho.

            1. The minimal – call it atomic – unit of an economic system is a transaction, which will be defined as a reciprocal private exchange of value between individuals (broadly understood).

            2 A market is the space in which transactions can take place, subject to the condition that they are public, where “public” is understood to mean that any and all potential participants in exchange have an in principle opportunity to exchange any good or service with any other participant based solely on properties relevant to the exchange.

            3. A transaction is called “free” when individuals are free to refrain from engaging in it, and not free otherwise.

            4. A free market is the space in which free transactions achieve an ideal, or optimal level.

            How’s that?Report

            • Avatar Roger says:


              I find this definition extremely useful. I like the way you combine the terms public and free to explain how markets work.Report

              • Avatar Stillwater says:

                Thanks Roger. I was thinking of expanding on them a bit, and fleshing out the complexity the arises as they layer up, to fill in a picture of where liberals and libertarians agree and disagree about these things. I think it would be useful insofar as the starting points are plausible.Report

              • Avatar Roger says:

                Please, please do. I would really value this.Report

              • Avatar Patrick Cahalan says:

                3. A transaction is called “free” when individuals are free to refrain from engaging in it, and not free otherwise.

                This is a very particular phrasing. I think Stillwater is onto something, but this particular phrasing is going to lead somewhere specific.Report

              • Avatar Roger says:

                Ah yes, positive and negative liberty. Seems like a great discussion to me. I always have trouble with the former term. When freedom is used as a synonym for “the ability to accomplish” it leads to something very different than does absence of coercion.

                I trust SW to lead us through the discussion.Report

            • Avatar James Hanley says:

              Overall not bad, but I’m stuck on the publicness plank. It seems ad hoc, rather than being necessary. But I’m open to persuasion on it.Report

    • Avatar Chris says:

      It’s better to think of concepts and categories as markers of family resemblances. If you want necessary and sufficient conditions, which is what you’d need for definitions to be free from counterexamples, you’ll end up with infinitely long definitions. If cognitive psychology has taught me one thing, that is it (well, that and that people suck at math).

      What I took James to be doing (and he can correct me if I’m wrong, of course) is starting with the very basic features of a market, ones that are not going to be necessary or sufficient — they might apply to other things, and they might not apply to everything that could be considered a market — just as a starting point. This is going to be both too broad and too narrow, but it’s the point from which a discussion (or a shouting match) can begin. This is how a lot of academic discussions proceed, and James is an academic, after all. I think the reason some of us read this post and said, “OK, what’s next?” (because the way these sorts of things are judged in academic discussions is by what they buy you later on), while others reacted more… passionately to it, is because some of us also come from academia, and some of us don’t. This isn’t to knock either side, just to say, I think James was doing one thing, a common thing where he is (that is, academia), while some people took him to be doing something else.Report

      • Avatar Stillwater says:

        Sure, and that’s fine. I said as much upthread. He could have stipulated this is the definition of “markets” he will accept to delve into the more interesting issues of regulation, and third party enforcement, and complexity, and what constitutes a free market, and etc. No one would have objected to that. But it appeared to me, and maybe some others, that he was providing a semantics for the English word “markets”, one which lots of us apparently think isn’t accurate.

        I’m down with that. Let’s agree, then, that James is using the term “markets” in this post in a technical sense, defined according to his terms. And we’ll see what shakes out from that.Report

        • Avatar James Hanley says:

          Chris: because the way these sorts of things are judged in academic discussions is by what they buy you later on)
          Yes. I’m so professionalized in some ways that I forget that most of us need training to get us to think that way (I sure as hell did).

          Still: He could have stipulated this is the definition of “markets” he will accept to delve into the more interesting issues …
          From the OP: “In this post–the first of two, I think–I want to discuss the concept of markets, without worrying about the word ‘free.’ if the second post gets written, then we’ll tackle the ‘free’ concept. But for now, just markets. ”

          So stipulated; thanks for reading.Report

    • Avatar Mike Schilling says:

      if a definition suffers from a counterexample then the definition is wrong.

      That’s completely true in mathematics, almost true in the hard sciences, and less and less true as we move from the soft sciences into the social sciences. Take a simple example: can we define “language” in such a way that it’s clear whether two people are speaking the same language or not? The usual definition is “collection of mutually intelligible dialects”, so that Received Standard, and Mid-Atlantic, and Australian are all English, because their speakers can all understand each other, while “Quebecois French” is not. Good definition, right?

      The thing is, in Frankfurt, people speak German. In Amsterdam, Dutch, But as you travel from one to the other, you find a continuum of dialects that bridge that gap, and you never find a hard break between the two. So “mutually intelligible” breaks down. Each region can communicate with the two regions that surround it, but the endpoints are speaking different languages. That doesn’t invalidate the definition, but it does poke a hole in its universal applicability.Report

      • Avatar Stillwater says:

        The force of a counterexample is proportional to the fuzziness of the definition, it seems to me. If someone offers a precise definition, with some clearly articulated conditions, then a counterexample is a valid critique of that definition. James’ definition above seemed to me like it gave pretty precise conditions: a market is the exchange of value for value between two people. And it seemed to me – still does – that that definition is clear enough to admit counterexamples.

        But I’m willing to let the whole thing go for the sake of encouraging James to write more posts on the topic.Report

        • Avatar James Hanley says:

          Second one coming soon, thanks to the encouragement of others, despite my deep pessimism about how it will be received.Report

          • Avatar zic says:

            I’m really glad to hear that.

            Thank you.Report

          • Avatar Kim says:

            yay! Will try to be good… 😉Report

          • Avatar James Hanley says:

            Oh, and I don’t think the definition really qualifies as precise. Ask Mike if anyone in mathematics would find it precise. And if any of my students tried to use that definition to operationalize “market” as a variable, rather than a concept, I wouldn’t allow it.

            Concepts vs. variables–especially thinking implicitly about them instead of making it explicit–is probably another instance where my professionalization* is showing through.
            *Not to be confused with “professionalism, professionalization is the training of a person to think and act in a way appropriate for a particular field. At the extreme, professionalization makes it well-nigh impossible for a person to think normally or communicate with people outside the field. E.g., Sheldon Cooper.Report

          • Avatar MikeSchilling says:

            Looking forward to it (note to self: bookmark “shallow”, “evil”, and “appalling” in the thesaurus.)Report

      • Avatar James Hanley says:


        Great comment. You’re absolutely right about definitions across the fields, and for reasons that have nothing to do with the discussion itself, I really enjoyed your first sentence. It just suits my sensibilities perfectly.Report

  25. Avatar Jeffery Bahr says:

    I just opened my inbox to see HUNDREDS of comments from this thread. 95% of them could be charitably characterized as cerebral onanism. Don’t you people have anything else better to do?Report