How Do We Get People to Stop Thinking They Know So Much Better?

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Vikram Bath

Vikram Bath is the pseudonym of a former business school professor living in the United States with his wife, daughter, and dog. (Dog pictured.) His current interests include amateur philosophy of science, business, and economics. Tweet at him at @vikrambath1.

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300 Responses

  1. Avatar Kazzy
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    says:

    If I’m understanding, let the market choose winners and losers instead of the government or some other organized, intentional force?Report

    • Avatar Vikram Bath in reply to Kazzy
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      says:

      Essentially, yes. I’m suggesting while market prices may offend our sensibilities for what is right, if we adopted a system that was driven by our sensibilities rather than supply and demand, we’d actually end up with something worse.Report

      • Avatar Kim in reply to Vikram Bath
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        says:

        When 47% of us are “losers”, I think you might want to consider changing your tune.
        Just a thought, but isn’t the standard “disgrunted to revolution” tipping point 33%?Report

      • Avatar Road Scholar in reply to Vikram Bath
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        says:

        Naturalistic Fallacy. It’s no different really than the attitude of “deep ecology” environmental extremists who claim that any alteration of the natural landscape is, by definition, detrimental. It’s rooted in the fundamental belief that any conscious and deliberate attempts to alter the economic landscape, for whatever reason, to whatever end, and by whatever means, can only but result in harm to the pristine awesomeness of the primeval economic wilderness.

        It’s naive and silly of course, since an ideal free market, defined as being completely bereft of any deliberate shaping of the rules of economic interaction, would simply be utter anarchy, Hobbes’ war of all against all. No recognition of property rights save what you can personally enforce at the point of a gun. Contracts would be little more than statements of alleged intent, to be abrogated at the convenience of the stronger party with no recourse for the weaker. Open theft would simply be a time-honored business strategy, slavery the predominant employment arrangement.

        No, what “free market” advocates want is nothing more or less than the set of rules and institutions that they prefer, that they believe to be personally advantageous or possibly just aesthetically pleasing, as opposed to some other alternative set of rules and institutions. There’s nothing particularly special or virtuous to that set of rules and institutions and there’s certainly nothing more “natural” about them, even if natural could itself be construed as a virtue or even a sensible concept as applied to the abstract social construct we call The Market.Report

  2. Avatar LWA
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    says:

    “Really our alternatives are

    1. markets
    2. a hyper-politicized process in which everyone from nurses to car mechanics try to competitively moralize about why they should get paid more”

    Really?

    No other choices out there?Report

    • Avatar Chris in reply to LWA
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      says:

      And markets aren’t political?Report

      • Avatar Kolohe in reply to Chris
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        says:

        politics is one input into markets, but the output is the result of politics, materialism, and individual human desire (and individual value judgements, which is distinguishable from politics as politics is collective – but not aggregated – value judgements)Report

      • Avatar Chris in reply to Chris
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        says:

        Markets are political throughout. Property itself is political.Report

      • Avatar Patrick in reply to Chris
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        says:

        Have to agree with Chris here.

        I have a lot of sympathy for exasperation over moralizing in our public sphere, because so much of our moralizing in the public sphere is facile and exasperating.

        But this is like being upset with the injustice that man is mortal.Report

      • Avatar Kolohe in reply to Chris
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        says:

        I’m going to cosign what JamesK says below, and not get to hung up on labels. ‘Politics’ being used here is a term that I feel we are lumping ‘government’ ‘society’ and ‘power’ all together. (and markets still have more factors than those three things)Report

      • Avatar Chris in reply to Chris
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        says:

        If we limit politics to trying to get the state to enact policies that aim at my moral values, then the pure market, independent of states and property and all those other things that decisions about how and when and against whom we use coercion, then it is true, markets are apolitical. In that case, we’ve extracted away everything about markets that would be relevant in this case, however. Until then, political decisions of precisely that sort have gone into every aspect of what makes it possible for us, in the aggregate, to choose Walmart over Morally Superior Local General Store, Inc.

        There is a tendency, I’m afraid, among people on virtually every part of the political spectrum in which markets are “favored,” loosely speaking, to talk about markets both as the actual, existing human institutions suffused with politics and values and wholly and inseparably intertwined with all of the other human institutions with which they interact, which includes not only governments but an unlimited number of other value-projecting institutions which shape it in very real, very political ways, and markets as theoretical entities that are amoral and apolitical but do not in any sense actually exist (except maybe).

        A plethora of decisions at every political level, from the local chambers of commerce and zoning committees and city and county councils and boards and state regulatory commissions and governors and legislatures and federal bureaucracy and Congress and the courts and so on made it possible for Walmart to exist and thrive. There is no market in which Walmart exists independent of those things, only an intentionally inexistent market produces an intentionally inexistent Walmart which thrives as a result of intentionally inexistent agents making intentionally inexistent decisions.

        This is why it is possible to shape markets through values. It’s not easy to do so directly, at least when markets are really big (and in many cases they’re global, now, in a variety of ways, some of them distinctly immoral but politically determined because we like inexpensive shit), but it’s possible, and it’s been done, and it will be done again, with and without enacting new laws and regulations.Report

      • Avatar Chris in reply to Chris
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        says:

        What’s more, and I realize I’m just ranting now, the reverse is true as well. Markets, to the extent that they are discrete entities (which is, in actuality, not at all in any sense whatsoever!), influence our attempts to directly enact our moral values through policy and regulation. (And here’s another way in which I get frustrated with “market” types of all stripes, which includes pretty much everyone these days…) Y’all spend a whole lot of time talking about the unexpected, unintended, and unwanted effects of laws and policies and regulations. The reason such effects are possible is because as much as institutions that might be called markets (or parts of markets) are interacting with those things as they’re implemented, which means that Vikram’s 2 and 3 are just as much market as his markets are political in any social system within which “markets” play a central role, which is just about all of ’em these days.Report

      • Avatar Jaybird in reply to Chris
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        says:

        I’ve read of the argument between Whitaker Chambers and William Buckley over capitalism and how capitalism was incompatible with conservativism.

        Too dynamic, you see. Changes things. Destroys family businesses. Destroys neighborhoods.Report

      • Avatar Chris in reply to Chris
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        says:

        That’s undeniably true. It’s not surprising that there has been a conservative anti-capitalism strain since people started talking about anything resembling capitalism, and there remains one today, though it is relatively disorganized and unconscious most everywhere but in the Church and similar conservative theological institutions.Report

      • Avatar Jaybird in reply to Chris
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        says:

        Insofar as it’s true (and that’s one hell of a rabbit hole to go down), that would make neoliberals the true inheritors of the Progressive mantle.Report

      • Avatar j r in reply to Chris
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        says:

        There is no market in which Walmart exists independent of those things, only an intentionally inexistent market produces an intentionally inexistent Walmart which thrives as a result of intentionally inexistent agents making intentionally inexistent decisions.

        Haven’t thought this through all the way, but I have an initial objection to this way of viewing Walmart. At its heart, what Walmart does is offer a sophisticated and logistically efficient way for Chinese manufacturers to reach American consumers and vice versa. China has lots of cheap labor and relatively cheap inputs and Americans have lots of disposable income and private demand. It is a classic gains from trade story.

        In a sense you are correct that Walmart does not exist independent of zoning rules and local governments and federal regulatory and legal regimes and trade deals and so on and so forth. All of those things, however, are largely there acting as barriers, things that get in between Chinese manufacturers and American consumers. Putting aside for a moment whether all of those barriers are for good or for bad (the answer is likely a bit of both), the relationship that Walmart has with many of these things is one in which these barriers are something for Walmart to overcome or drill straight through.

        That’s half the story. The other half is that there is a universe of public goods and services that help Walmart in delivering its products. Those are important, however, it’s also important to remember that a good number of those things Walmart could probably provide for itself, either directly or by contracting with other private actors. Walmart benefits from the national highway system, but if highways didn’t exist it wouldn’t be that difficult to build roads from Port A to Retail Location B. We’ve just decided that a series of competing private roads is completely inefficient from the point of view of the whole economy, so we publically fund roads and charge users in the form of taxes and tolls.Report

      • Avatar Chris in reply to Chris
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        says:

        Haven’t thought this through all the way, but I have an initial objection to this way of viewing Walmart. At its heart, what Walmart does is offer a sophisticated and logistically efficient way for Chinese manufacturers to reach American consumers and vice versa. China has lots of cheap labor and relatively cheap inputs and Americans have lots of disposable income and private demand. It is a classic gains from trade story.

        But you’ve just made my point for me. The reasons China has cheap labor are not in the least bit inseparable from its political institutions. I’d dispute that all of those American “political institutions” (as if there were any other kind) are just barriers — they also provide the physical, legal, and in some ways even the conceptual infrastructure with which Walmart operates — but even to the extent they are, they are only so because the political institutions in China would make it possible for Walmart to do more, or do things differently, without them, because the market is political from top to bottom, left to right, and on the z-axis as well.Report

      • Avatar j r in reply to Chris
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        says:

        The reasons China has cheap labor are not in the least bit inseparable from its political institutions.

        Not really. The reason that China has cheap labor is that the Chinese economy is at a much different stage of development that the American economy and the cost of living is much lower.

        The Chinese government could step in and impose a series of laws and policies that significantly increased the price of Chinese goods and cut into Walmart’s profits, but those would be barriers. And those barriers would probably represent a net loss to Chinese workers. That is, it might raise the nominal wages of some, but it would also lead to a lot of lost jobs.Report

      • Avatar Chris in reply to Chris
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        says:

        Not really. The reason that China has cheap labor is that the Chinese economy is at a much different stage of development that the American economy and the cost of living is much lower.

        And why is it an earlier stage? Obviously part of this is timing, but in 1948, China’s economy was much, much further behind, particularly outside of a few cities virtually or actually run by Westerners, and where it is now both in how far it has progressed, and how far it hasn’t, is a result of a bunch of political decisions (including some by people outside of China, including the Soviets, the Japanese, the North Koreans and South Koreans, the British, the Americans, the French, and so on), starting with what happened in the years after World War II (and going back further, to the 20s, and going back further, to…).Report

      • Avatar Kim in reply to Chris
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        says:

        jr,
        “Not really. The reason that China has cheap labor is that the Chinese economy is at a much different stage of development that the American economy and the cost of living is much lower”

        Too true. What’s your odds on revolution when America hits the stage after this one?Report

      • Avatar j r in reply to Chris
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        says:

        @chris

        If your point is that economic development is inextricably linked to political development, then absolutely, I agree. The point I am making is that an awful lot of what characterizes successful political development is the ability to get out of the way of the economy, not all of the time, but an awful lot of the time.Report

      • Avatar Chris in reply to Chris
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        says:

        That is definitely a value-laden statement.Report

      • Avatar j r in reply to Chris
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        says:

        I am not afraid of values.Report

      • Avatar Chris in reply to Chris
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        says:

        Values are just the personal end of the political stick.Report

      • Avatar j r in reply to Chris
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        says:

        Like I said, I get that everything is in some sense political. By the same token, however, everything is a market in the sense that even political decisions and influence are traded.Report

      • Avatar Chris in reply to Chris
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        says:

        J R, I agree 100%. As some really smart dude put it earlier in the thread,

        The reason such [unintended] effects [of policy] are possible is because as much as institutions that might be called markets (or parts of markets) are interacting with those things as they’re implemented, which means that Vikram’s 2 and 3 are just as much market as his markets are political in any social system within which “markets” play a central role, which is just about all of ‘em these days.

        Report

      • Avatar Jaybird in reply to Chris
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        says:

        Values are just the personal end of the political stick.

        They’re the carrot.Report

    • Avatar Vikram Bath in reply to LWA
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      says:

      No other choices out there?

      Maybe not. Suggest some!

      We can put the two options I listed on a spectrum. We could pass laws that cap football player salaries below those of any servicemen but otherwise have market prices. That would be a synthesis of the two–mostly markets, but with some political processes to avoid certain embarrassing results, and in fact that’s what we have now. (E.g., we have minimum wage laws so we don’t have to be horrified by how little some people would otherwise earn.)

      But right now I can’t think of anything that is truly a third option rather than some compromise between #1 and #2. That might be my failing.Report

  3. Avatar LWA
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    says:

    The appeal to “,markets” is as silly as an appeal to “morality”- since it only occurs in the abstract. The real world occurrences are filled with complexity and nuance, and can easily mean different things to different people.

    For example, markets as we practice them here in America circa 2015 are highly constructed, highly distorted things which are inextricably entwined with the ” hyper-politicized process” which is being posited as the alternative.Report

    • Avatar DensityDuck in reply to LWA
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      says:

      Everything is a market.

      Not all markets are about dollars.

      Maybe I’m intentionally not stating my opinions about the utility of unions in a modern regulatory environment because I don’t want all the people I’m talking with to suddenly develop a burning desire to go get snacks and leave me alone on the couch. I’m paying a cost in deny the expression of my true self, and I’m receiving the benefit of attractive companionship.

      That’s a market interaction, and yet no money changed hands.Report

    • Avatar Oscar Gordon in reply to LWA
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      says:

      Yes, but the markets we have today, meddling warts & all, are still a far better thing than the kind of command economy you’d need to save a place like Jeffrey’s, because there is still a general undercurrent of “stop playing with it so much or…”Report

  4. Avatar Mike Schilling
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    says:

    Both liberals and libertarians would agree that seasonal, temporary, unskilled workers will sign a non-compete clause because if they won’t take a job under those circumstances, someone else will. What they disagree about is whether this should be lamented or celebrated.Report

    • Avatar Murali in reply to Mike Schilling
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      says:

      @mike-schilling

      Well, not necessarily celebrate, but at least be more sanguine about. The idea that markets even if deeply imperfect are still, on average and in the long run, better than alternative is not particularly celebratory.Report

      • Avatar Alan Scott in reply to Murali
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        says:

        But is California’s solution of simply holding non-compete clauses void as a matter of course therefore automatically leading to a worse alternative?

        must we say “Well, here’s an area where markets are deeply imperfect, but we’d better not mess with it lest the invisible hand come and smash everything to smithereens”?Report

      • Avatar Murali in reply to Murali
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        says:

        yes and no.

        Strictly speaking, we should just be a lot more careful about regulation than we actually are. In practice, given the incentives that already exist that favour regulation, telling people to just say no to regulations shifts the equilibrium in the right direction and hopefully gets us to the point where people are a lot more careful about regulation.Report

      • Avatar Don Zeko in reply to Murali
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        says:

        @murali Like @chris upthread, I think this comment glosses over the many complex, value-laden political decisions that underlie the market. To take the previous wal-mart example, when I go to Wal Mart to buy tube socks, a vast web of different actors, governments, and resources has come together to grow the cotton, gin it, transport it thousands of miles to mills in China, to turn the raw material into the socks I’m wearing, then to transport it again thousands of miles to the US where it can be distributed and purchased using a complex electronic payments network. And at every one of those steps, everyone involved has relied upon a vast web of law and regulation and public policy governing an immense number of value-laden questions. If a cotton farmer in Egypt has a heart attack, what happens to his crop? If a factory worker in China is hurt on the job, is he compensated? If so by who and how much? If a container falls off of a container ship in bad weather in the Pacific, who owes who what? If there’s a contract dispute between Wal-Mart and a supplier, who decides the issue, and where, using what law and at what cost? If somebody steals my credit card information to fraudulently buy those socks, does the cost of the fraud come out of my bank statement? Wal-mart’s bottom line? My credit card company? These questions can all be answered in a myriad of different ways while still being a “market system,” with vastly different moral implications. There is no impersonal, objective force that we can appeal to when creating the institutions by which humans interact with each other.Report

      • Avatar Kazzy in reply to Murali
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        says:

        @don-zeko

        If you’re buying tube socks at Wal-Mart, you’ve violated every rule of good taste.

        :-pReport

      • Avatar Don Zeko in reply to Murali
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        says:

        @kazzy Only if I wear them with my Crocs.Report

      • Avatar Don Zeko in reply to Murali
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        says:

        Disclaimer, before @saul-degraw ‘s head explodes: I do not actually own crocs.Report

      • Avatar Jaybird in reply to Murali
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        says:

        And “I, Pencil” becomes a parable of how much moral responsibility pencil users have.Report

      • Avatar Saul Degraw in reply to Murali
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        says:

        @don-zeko

        Too late….Where can I send my hospital bill to?Report

    • Avatar James K in reply to Mike Schilling
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      says:

      @mike-schilling

      I actually think that there are market failure grounds for the government stopping no-compete contracts, at least in general (I can imagine some exceptional cases where it might make sense to permit them). Non-compete clauses reduce competition in the market, in a lot of ways it’s like a weak cartel, but on the consumer side rather than the producer side. They also reduce labour market flexibility, which tends to lead to inefficiency.

      The good news is that the fix is pretty simple – the government just refuses to enforce the relevant contractual provision. The government literally has to do nothing.Report

      • Avatar Mike Schilling in reply to James K
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        says:

        That’s more or less how it works in California.Report

      • Avatar Michael Drew in reply to James K
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        Since broadly the government has to enforce contracts and all else being equal courts certainly will, the government does have to do something: decide not to enforce these provisions of contracts, and instruct courts not to. At the least they have to come up with a general rationale for doing this that is not had hoc and willy-nilly. Most likely this has to be done via passing actually legislation that defeats the lobbying against it by business that would be inevitable. None of that is nothing. It’s all quite something.Report

      • Avatar James K in reply to James K
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        says:

        @michael-drew

        I admit I was being a tad glib at the end there. Yes, any policy change does require quite a lot of work.Report

      • Avatar Michael Drew in reply to James K
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        says:

        Report

      • Avatar Mike Schilling in reply to James K
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        says:

        Another way to look at it is that paying minimum wage, or close to it, while imposing conditions that can result in being unable to work for an extended period adds up to paying an illegally low wage. I realize that won’t cut much ice with people who don’t approve of minimum wage.

        Which makes me wonder if there are any unpaid internships that come with non-compete clauses. It would not shock me.Report

      • Avatar Will Truman in reply to James K
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        says:

        I read an interesting story about how California beat Boston for being the nation’s primary tech hub for this reason.

        Non-compete clauses are often unenforceable and unenforced. Where it gets tricky is that the threat alone can be daunting.

        I once had a non-compete that, if read strictly, said that I could not work for anybody that has purchased a car from a major car brand. (“You can’t work for a competitor, our clients, anybody our clients do regular business with, or the customers of anyone who our clients do regular business with.”… (which, in this case, the clients were auto dealerships.)Report

      • Avatar Burt Likko in reply to James K
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        says:

        I do lots of work with cases involving employer attempts to enforce non-competes, or their equivalents. The Uniform Trade Secret Law, if cleverly deployed, can be a potent means with which to skirt the effect of California’s prohibition against non-competition clauses. Clumsily deployed, it can still generate prohibitive transaction costs.

        When I practiced law in Tennessee, I encountered some non-compete issues and saw some colleagues try to deal with them. There were judges who said from the bench, “I know these covenants are legal here in Tennessee, but I don’t believe in them and I’m not going to enforce a single one unless the Court of Appeals orders me to on a case-by-case basis. So you can go on ahead and appeal me right now if you like and see if you can find some other judges who will take your side, because that ain’t gonna be me.” (And then they called California judges a bunch of “activists.” Sheesh.)

        So that experience suggests to me that pretty much anywhere you go (in the US, anyway), enforcing a non-compete is going to be at once an inherently chancy endeavor, and also an expensive game of legal chicken.Report

      • Avatar Mike Schilling in reply to James K
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        says:

        About 20 years ago, my company that get bought by a large, very unpleasant company which had a non-compete clause. (I won’t name them, but as a result I always root against the Islanders.) Like Will’s, if interpreted broadly enough, it amounted to “You are not allowed to work in your chosen field”.

        A bunch of us hired an attorney who specialized in labor law. His advice was that an uncompensated non-compete was unenforceable in California, but that didn’t mean that you and your future employer couldn’t be sued, just that you would eventually win. And since potential employers know that, they’d be less likely to hire you, so even if ultimately unenforceable it has a chilling effect.

        Interestingly, since the non-compete was a significant change in working conditions, quitting rather than accepting it counted as termination and left people eligible for unemployment insurance.Report

      • Avatar Mike Schilling in reply to James K
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        says:

        enforcing a non-compete is […] an expensive game of legal chicken.

        And the law in its majestic equality allows both seasonal temp workers and billion-dollar corporations to engage in expensive games of legal chicken.Report

  5. Avatar Alan Scott
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    says:

    Let’s look at that football player example for a little bit, though. Sure, his rate is set by the market–but that market set rate would be lower if the city weren’t paying for the stadium or if the NFL weren’t a tax-exempt organization.

    The idea that the only alternative to the exact system we have right now is a planned economy is ludicrous. I don’t think that the state should force the building’s owner to keep renting space to Jeffrey’s at 8k/month, and I doubt that Saul does either. But it’s always worth asking “Is this an undesirable outcome? If so, how are government inputs into the market contributing to this outcome? Would it be appropriate to change those inputs?”Report

    • Avatar Vikram Bath in reply to Alan Scott
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      says:

      I agree with all of that. (Though I think Saul does support rent control.)

      I’m going to make an addendum to the post to try and avoid the mistake of painting quite so stark a dichotomy between markets and planning.Report

    • Avatar Richard Hershberger in reply to Alan Scott
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      The market for NFL players is highly distorted by the existence of a salary cap. This in turn exists because of NFL players’ union is largely ineffectual. Compare it with the players’ union for MLB players. The market is further distorted by the NFL’s policy of revenue sharing among the member teams. And in general, markets for players in professional team sports have highly idiosyncratic incentives. They don’t work like markets for plumbers or coders, so any discussion of how they work is unlikely to apply more broadly.

      That being said, the point about the NFL being a non-profit is something of a red herring. Players are not hired by the NFL. They are hired by their individual teams, which are for-profit businesses. The NFL is an association of such businesses, like your local Chamber of Commerce. It’s non-profit status may be relevant to Roger Goodell’s salary, but not really to Peyton Manning’s, or only very indirectly. There are many aspects of the NFL that richly merit criticism, but this one is more flash than substance.Report

      • Avatar Saul Degraw in reply to Richard Hershberger
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        @richard-hershberger

        I always enjoy seeing the NFL described as America’s Socialist Sports LeagueReport

      • Avatar Richard Hershberger in reply to Richard Hershberger
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        says:

        A more accurate characterization is that it, like all professional sports leagues, is a cartel. All cartels undertake collective action. The members are all playing in a Prisoner’s Dilemma game, except they get to talk to each other. They have agreed to cooperate, each sacrificing some larger short-term gain for the common good. This is inherent in professional sports leagues because the nature of the beast requires that every team have competition. If the Yankees drove every other baseball team out of business, who would they play? A monopoly isn’t an option, on the level of individual teams.

        Characterizing this collective action as “socialism” is amusing, but not really accurate, or helpful as analysis.Report

  6. Avatar Richards
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    says:

    Here’s the power of markets….

    I, as a taxpayer and homeowner, pay for the water I use as part of my yearly property taxes.

    Meanwhile, Nestle has just been given unlimited water so it can bottle it and sell it back to me for $1 a pop. They are not charged for this water. The profit margin is almost 100%

    Add to this the fact the CEO of Nestle has been quoted as saying water is not a basic human right.

    This reminds me of the Mel Brooks comedy Spaceballs, where the villain goes around stealing atmospheric oxygen so it can be canned and sold back to the planet’s inhabitants.

    Markets may be necessary, but it seems we have totally given up on the idea that regulating said markets is an unmitigated bad.Report

    • Avatar Richards in reply to Richards
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      ~oops should read **we have totally given up on the idea that regulating markets might be an unmitigated good thing**Report

    • Avatar Patrick in reply to Richards
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      Water rights are kind of complicated.

      Granted, Nestle has figured out all the soft spots in the complicated and leveraged the hell out of them, but changing “it’s complicated” to get rid of the soft spots is… complicated.

      See: everything about water access in California.Report

      • Avatar Saul Degraw in reply to Patrick
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        says:

        Re: Water.

        Urban users use around 10 percent of California’s water. Maybe a bit less. The real water glut is used by companies like Nestle that pump ground water and bottle it and those agriculture. The last two account for 90 percent of California’s annual water use.

        So making urban users pay more is not going to help the problem but it is much more fun to punch citizens than the concerns of business, isn’t it?Report

      • Avatar Saul Degraw in reply to Patrick
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        @patrick

        Sorry. That was meant as a reply to something Vikram wrote above.Report

      • Avatar Troublesome Frog in reply to Patrick
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        I strongly doubt that bottling water accounts for a noticeable percentage of water use. If total home use with water from the tap was dwarfed by industrial and agricultural use before bottled water became a thing, I don’t see how taking the drinking portion of that home use and bottling it would somehow make it that much larger. Sure, you could throw in a factor of 2 in reverse osmosis loss and even round it up to a factor of 3 for overall factory use, but it should still be small potatoes in terms of actual water use until somebody decides to irrigate crops with Aquafina.

        In terms of energy use it’s ridiculous, but that’s another topic.Report

      • Avatar Glyph in reply to Patrick
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        says:

        until somebody decides to irrigate crops with Aquafina.

        I figured we’d use Brawndo (it’s got electrolytes).Report

      • Avatar Troublesome Frog in reply to Patrick
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        says:

        I have to admit that, “But does it have what plants crave?” is a standard question my wife and I ask each other when we’re gardening.

        Anyway, a little Googling around indicates that the average person drinks less than 1% of the water they use in a day. So given that personal water use is already much smaller than agricultural or industrial use, 1% of that is a pretty small fraction of overall water use. We could stop drinking tap water entirely and amend the constitution to give water bottlers dibs on enough water to fill all of our drinking needs and it wouldn’t really be much of a change in our water rights rules. It would just be a really dumb use of resources.Report

    • Avatar Damon in reply to Richards
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      says:

      I think there is a confusion about markets and water rights here.

      @richards @patrick @saul-degraw

      Water rights are property. I can own a billion gallons of water in the ground but I’m not going to do anything with it unless I can make money using it in some form. I’m not familiar with Nestle’s water doings but I’m going to conclude they’ve purchased (either through political influence or outright payment) access to this water. That has nothing to do with the water market. The cost they paid, in whatever form, does have something to do with the market, but the water market in desert areas like cali is screwed up because of previous market distortions. Folks tend to act responsibly and sensibly when the real cost of a resource is paid by them, but when there are some many distortions, things get out of whack and lead to odd incentives–just like the gas crisis mentioned above.Report

      • Avatar Richards in reply to Damon
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        says:

        Awright… so the water is owned in common (I know Libertarians think the commons is bogus, but my taxes pay for the infrastructure…) and Nestle doesn’t have to pay a cent while making others pay for the “right” to consume water they didn’t pay for…. while speaking in forked tongues and saying it’s exclusively theirs.

        Maybe not a classic “market” solution… but one that exists in the “market” nonetheless…Report

      • Avatar Damon in reply to Damon
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        says:

        You said it exactly right…you pay for the INFRASTRUCTURE.Report

      • Avatar Richards in reply to Damon
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        says:

        So Nestle doesn’t pay for the infrastructure… but gets all the profits.

        I’d love to be able to distort markets in my favour….Report

      • Avatar Road Scholar in reply to Damon
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        says:

        Water rights are property. I can own a billion gallons of water in the ground but I’m not going to do anything with it unless I can make money using it in some form.

        Folks tend to act responsibly and sensibly when the real cost of a resource is paid by them, but when there are some many distortions, things get out of whack and lead to odd incentives–just like the gas crisis mentioned above.

        Your first statement contains the kernel of the explanation for your second statement. It’s precisely because holders of water rights hold those rights as property free and clear, an arrangement that goes back at least a century or more, that there exist no clear market signals to properly, even by free-market standards, allocate water between competing uses. The people who hold those rights pay literally nothing for them.

        It’s directly analogous to the long-time homeowner in San Francisco who purchased their property, or perhaps inherited it, long ago and pays only a tiny fraction of the current rental value (in the form of property taxes) to hold that property. While it’s true that you can point to opportunity cost as the price being paid, an abstract and somewhat speculative opportunity cost simply doesn’t spur one to action the same way a bill payable in full by month’s end does.

        A shift of taxation away from both productive labor and capital and onto land and natural resource titles would go a long way to solving both the water and housing issues we discuss with some regularity here. Essentially it rationalizes the market while removing tax-bssed disincentives for investment and development.Report

      • Avatar Damon in reply to Damon
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        says:

        @richards

        Perhaps you should look to your elected leaders…you know, the ones who legislated the “distortion” for Nestle.Report

      • Avatar Richards in reply to Damon
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        says:

        I’m pretty sure Nestle bought and paid for the distortion with political contributions….Report

      • Avatar zic in reply to Damon
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        says:

        There’s also a revolving door between regulators and Nestle. At least here in Maine, where there’s a lot of water extraction going on.

        Talk about using politics for corporate gain; this is a classic example.Report

      • Avatar Brandon Berg in reply to Damon
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        says:

        @Richards That’s exactly what happens when a resource is treated as a commons: It gets allocated politically, which means patronage. The sane thing to do is auction off water rights and use the proceeds to reduce distortionary taxes, but we don’t do that because of a baptist–and-bootlegger coalition of those who believe that underpriced water is a basic human right and those who believe that it’s a pretty good business plan.Report

      • Avatar zic in reply to Damon
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        says:

        Auctioning off water rights is itself a political process.Report

      • Avatar Kolohe in reply to Damon
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        says:

        “A shift of taxation away from both productive labor and capital and onto land and natural resource titles”

        Yay georgism! The only problem is that there’s simply not enough money there to pay for the modern state. As it is, taxing land (more precisely, real property) is already how local governments in the US get most of the money they raise themselves (the slightly larger share of local government budgets come from higher level governments)Report

      • Avatar Road Scholar in reply to Damon
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        says:

        @kolohe , I can’t really properly address your objection in anything less than a full post, so I’m not even going to try in a combox, but Georgist economists estimate the total of Land and Resource rents at approximately a third of GDP so the money actually is there. Also your statement ” … taxing land (more precisely, real property…. ” is exactly backwards. The land value tax is exactly what it sounds like, a tax on the appraised value of land while the property tax you refer to is a tax on both the land and improvements, like your house for instance. That’s why when you add on a third bedroom your property tax goes up as a thank-you. That doesn’t happen with an LVT.Report

      • Avatar Citizen in reply to Damon
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        says:

        Is there any basic backstops in georgism that prevent the tax seeking from ballooning out of reason?

        In the end, the distortions in the “markets” can often be unpacked as distorted rent seeking, how is that not going to occur with government/politics?Report

  7. Avatar James K
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    says:

    I can’t help but feel that labels are getting in the way here. Let’s take a step back and look at what we are trying to accomplish here.

    What we are contrasting is two systems of aggregating preferences. The first is willingness to pay, as expressed through the market system. The second is willingness to vote, as expressed through representative democracy.

    As a preference aggregator, markets have three major advantages over democracy:
    1) Commensurability – aggregating preferences is an exceedingly difficult problem. How do decide how much person A likes a thing relative to person B? Willingness to pay converts ephemeral preferences into a number that is comparable across people. By contrast, democracy filters the spectrum of preference intensity into two bins: those who care strongly enough to vote, and those who do not. This biases democratic decision-making in favour of a largely politically-disengaged majority.
    2) Credibility – as economists are fond of saying, talk is cheap. When speaking aloud, people will often say what they expect their friends and neighbours will prove of, rather than what they truly want. Many lament the closing of a local business, but those big of stores proliferate because people are spending money at them over that beloved business? Money can be exchanged for things of value, so spending some of it to obtain a thing that implies you place a concrete value upon that thing. By contrast, you get your vote for free, and you can’t swap it for anything so spending it is a very weak signal of your true preferences.
    3) Incentive Compatibility – when thinking about a system of social cooperation it is important to consider how it deals with defectors, people who flout the rules. Markets deal with this problem by making the rules be something people are inclined to do anyway – do what benefits themselves. Democratic rules are far more difficult and costly to enforce.

    That’s not to say that markets are perfect (market failures are a thing, and poverty does present issues), nor that markets are a total substitute for government (after all government enforcement of contracts and prevention of violence does improve market functioning). But when we are considering the question of where the margin should be for substituting markets for government (or vice versa), it is important to understand that democracy is a very blunt instrument when it comes to determining what the people want.Report

    • Avatar Patrick in reply to James K
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      says:

      Willingness to pay converts ephemeral preferences into a number that is comparable across people.

      This is only true if a dollar is a dollar is a dollar to all the actors involved.

      Which is a dubious assertion in the general case although it may apply in any specific one.

      I will note, however, that a goodly number of folks believe that the system of regulated markets that we have is constructed (not by design, but by evolution) to benefit the folks who have the most capital, meaning that while a theoretical market with all actors starting with the same N dollars is a nearly perfect analog for your asserted statement, any practical market is less likely to be so, and the system of markets we have is quite possibly engineered so that our unit of measure is a very poor proxy for our preferences.

      Because Bob has $100 of disposable income a month and Joe gets $520 and Fred makes $50,000 for sixty minutes of game play… and there’s a lot of Bobs, and a goodly number of Joes, and Fred has an agent that buys futures on what Bob and Joe want. So Fred’s actual practical preferences, in practice, are “get as much of Bob and Joe’s money as you can” instead of “express my actual ephemeral preferences”.

      It is important to understand that democracy is a very blunt instrument when it comes to determining what the people want.

      This is an eminently fair critique, to be sure.Report

      • Avatar James K in reply to Patrick
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        says:

        @patrick
        If actually-existing markets have been distorted to benefit certain classes of wealthy people at the expense of the poor (and I’m willing to give considerable credence to that idea), that is a problem, which raises the question: how do we try to solve it?

        One solution is to divert political capital into making taxes more progressive to try and claw some of the surplus back, but I think a better solution is to throw political capital into getting rid of the subsidies. If American Football players are richer than they would be because of subsidised stadiums, then that’s a good reason for liberals and libertarians alike to oppose subsidised stadiums – a reduction in the size of government that is good for the poor.

        I don’t think any of us spend enough time talking about how to fix problems because the conversation tends to hang up on “yay government, boo markets” vs “yay markets, boo government” tribalism.Report

      • Avatar Brandon Berg in reply to Patrick
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        says:

        @james-k I see a lot attempts to tie corruption to income inequality (i.e. income inequality causing corruption), but it seems to me that most actual allegations of corruption are around businesses, not individuals, trying to influence politicians. That is, they have little if anything to do with how much money the rich have as individuals. Am I missing something here?Report

    • Avatar Road Scholar in reply to James K
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      says:

      Overall I don’t disagree with this, @james-k, but your comparison is incomplete. First, though, one point that stands out:

      How do decide how much person A likes a thing relative to person B? Willingness to pay converts ephemeral preferences into a number that is comparable across people.

      Well, only sorta. An individual’s ability to pay is a severe constraint on one’s ability to express preferences via the market. Consider that the mean income in the U.S. divides out to roughly $50k per person. But there’s considerable variation around that mean with many earning far less and many others earning far, even astronomically, more. How can you realistically compare the preferences of two people via the market when one of those two has many times more to spend than the other? How many people do you suppose shop at Wal-Mart or Dollar General because they have no reasonable choice in the matter given their income vs the number who could shop more upscale but simply prefer the “experience” of shopping at WM or DG?

      As to the issue I feel you’re missing, markets are very poor at reflecting moral values. One extreme example, absent legal constraint expressed and effectuated through the political process, I’m sure that the market could arrive at a going rate for murder-for-hire substantially lower than whatever one would now have to pay in the black market. Is that a superior outcome? Should we be satisfied with that collective assessment of our preferences?

      The main reason practically all decent societies have elected for some level of public provision of certain goods and (mostly) services is that the distributional outcome of those services via strictly private markets has been deemed morally deficient. It’s a point that deserves more than the passing footnote you alluded to in your mention of poverty in the closing paragraph.

      In the final analysis, unfettered markets are the ideal mechanism for aggregating the preferences and distribution of only the least important and consequential things. Beans vs peas? Markets. Baylor vs USC? Markets. The fact that one person can afford food or education (or healthcare or winter heat or…) while another can’t? Not markets.Report

      • Avatar James K in reply to Road Scholar
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        says:

        @road-scholar

        I did note that preventing violence and addressing poverty were both reasonable places to consider government intervention, though in general I consider the market’s amorality more a strength than a weakness – for the vast majority of human history morality has been pretty terrible, and Steven Pinker has made the argument that modern society is less violent because it is less moralistic.

        And while I agree that markets aren’t capable of addressing distributional concerns, I think you’re underestimating the importance of those “least important things”. Our opportunities to consume are instrumental in pursuing happiness. Necessities make up an ever-decreasing share of our economic activity, and the rest is still important. Besides which, even in the case of necessities it’s usually better to work around the market than override it – welfare is a better way to feed the poor than putting a price ceiling on food.Report

      • Avatar Richard Hershberger in reply to Road Scholar
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        says:

        “An individual’s ability to pay is a severe constraint on one’s ability to express preferences via the market.”

        This. I have long noted that the more extreme libertopian schemes either share an implicit assumption that people have roughly similar resources, or tacitly write off poor people as being of no account.Report

      • Avatar Chris in reply to Road Scholar
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        says:

        Steven Pinker has made the argument that modern society is less violent because it is less moralistic.

        Pinker should have stuck to psycholinguistics.Report

      • Avatar Road Scholar in reply to Road Scholar
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        says:

        @chris , I certainly don’t have the background in the psych fields to properly assess Pinker’s work in toto, but that particular assertion makes a lot of sense if you take “moralistic” to refer mainly to the set of moral values most strongly held by conservative cultures since those cultures and values are highly tribalistic.Report

      • Avatar Brandon Berg in reply to Road Scholar
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        says:

        @road-scholar The fact that willingness-to-pay privileges the preferences of those who have more money to spend isn’t some heretofore overlooked flaw in the argument for allocating scarce resources via markets—it’s the entire point.

        If having more money to spend doesn’t give you more of a say in what goods and services are produced and how they’re distributed (i.e., allow you to buy more and/or better stuff), then money is worthless, because that’s all it’s good for. And if money is worthless, there’s no incentive to use your labor as productively as you can (or at all).

        So, just to be clear, you’re not anti-market—you just don’t think anything important should be allocated by market processes?Report

      • Avatar Cardiff Kook in reply to Road Scholar
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        says:

        As someone who read Pinker’s book and this laughably bad linked review, I have to say that Pinker comes out ahead. Just read the comments to the Gray link.

        I haven’t read it in a few years, but Pinker clearly makes a tight case that warfare and violence isn’t just down, it has plummeted pretty much everywhere influenced by liberal enlightenment views (except perhaps Muslim nations). As has slavery, crime, torture, human sacrifice, witch burning, suttee, killing heretics, capital punishment for trivial reasons, debt bondage, racism, infanticide, rape, childhood abduction, violence against gays, spouse abuse, and so on. Read the book. It has about six hundred charts with the numbers.

        The reasons Pinker cites (from my notes) for the improvements are:

        1) literacy and the ability to experience other people’s viewpoints
        2) interdependency and the extended networks of market economies and massive telecommunications.
        3). Monopoly of coercion in state is aimed at using coercion only to suppress coercion. This changes the payoff of exploitation and violence and replaces amplifying feedback loops of revenge and status displays
        4) intelligence and the Flynn effect and the correlation with planning for the long term and repressing Impulsiveness.
        5). Enlightenment philosophy and emphasis on rational utilitarianism.Report

      • Avatar Chris in reply to Road Scholar
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        says:

        Which linked review?

        Those reviews reflect the general scholarly view of the book, but if you want to defend it against them, I’m happy to listen.Report

      • Avatar Chris in reply to Road Scholar
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        says:

        Oh wait, I just read your other comment in this thread and realized who you are. Nevermind. I’ve already read your response dozens of times before.Report

      • Avatar Oscar Gordon in reply to Road Scholar
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        says:

        Who is this? Did I miss The giveaway?Report

      • Avatar Chris in reply to Road Scholar
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        says:

        I’m not going to out the person, as I assume he or she has chosen to comment under another name for a reason (though I believe that’s the same avatar). I’ll just say that it’s not a surprise that he or she would find Pinker’s brand of Evolutionary Psychology appealing, which is one of the crueler insults I can lob at a person.Report

      • Avatar Road Scholar in reply to Road Scholar
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        says:

        @brandon-berg : So, just to be clear, you’re not anti-market—you just don’t think anything important should be allocated by market processes?

        Not precisely. I just don’t believe that one’s ability to access the necessities of life should be solely determined by one’s ability to pay whatever the market demands. Beyond the necessities let The Market (Praise Be!) rule.

        A fair summary of my position would be that I’m firmly market oriented on the production and pricing end of things but more socialist wrt the consumption end of (certain) things.

        I’m also a Georgist, an advocate of Modern Monetary Theory (MMT, UMKC School of Economics), lukewarm to unions as they currently exist, and somewhat sympathetic to the Distributist theories of the Catholic Social Justice crowd (despite my personal atheism), so a bit hard to pigeonhole into a familiar category. Don’t try.Report

    • Avatar LeeEsq in reply to James K
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      says:

      Maybe this is because of the limitations of technology or some bad interactions between regulations and markets but we do have instances where the demand for a certain type of good exceeds the willingness or ability of the market to provide the good. Housing is a really good example of this. Since most Americans seem to like car dependent suburban type developments, housing developers seem content to build car dependent suburban developments over other types of residential property. Granted that more than a little of this is because zoning regulations only permit building that type of residential development or NIMBYism.

      However, a lot of it also seems to be because developers are just sticking with what they know and a belief that this can get them top dollar even if a significant portion of the market wants something else. People have to live somewhere and even if they want a more urban environment, they will pick a suburb or ex-urb if that is the only option.Report

  8. Avatar Saul Degraw
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    says:

    1. I think you are overstating the case in which I feel bad about Jeffrey’s Toys closing down. I only shopped their once or twice for a company Christmas toy drive. I was merely using them as a jumping off point.

    2. I fully acknowledged in my essay that the issue is complicated and there is a delicate balancing act between property rights, the needs of the community (which in Jeffrey’s Toys case is the Bay Area. In the case of a local greengrocer bullied out by a corporation, the community is much smaller than an entire city). I don’t see why it is so controversial to acknowledge that there is a balancing act between these things. Why should we always bow to the market and business? Property rights are important but they are not sacrosanct.

    3. Trust me, I am far from being a full on true believer on this issue. I know a lot of people who rail against a small business closing just because it is a small business. Have you ever read Jeremiah’s Vanishing New York? He will rail against any small business closing. I fully acknowledged that there are plenty of legitimate reasons for a business to shut down.

    4. I’ll repeat myself. What is wrong with acknowledging that this a tricky issue? Why does it have to be markets ruling above all?Report

  9. Avatar Saul Degraw
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    says:

    The markets rule above all is the thing I dislike about economics and libertarianism because it creates a debate vacuum where it is impossible to question anything that happens in business or economics. I don’t consider it very intellectually honest to have an entire system of thought based on the idea that whatever happens in a market is supposed to happen.Report

    • Avatar James K in reply to Saul Degraw
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      says:

      @saul-degraw

      There is definitely a right way to criticise market activity from an economics perspective. I am (slowly) writing a series of posts that will go into how it works.Report

      • Avatar Saul Degraw in reply to James K
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        says:

        @james-k

        I am still trying to figure out what is so controversial by stating somethings can be lost that are valuable even if change is inevitable.

        In my original post, I said outright that businesses close for plenty of legitimate reasons (and illegitimate ones like antitrust violations or thuggery/arson/protection rackets). Maybe it was inevitable that Jeffrey’s Toys or the Roseland Ballroom would shut doors eventually. That doesn’t mean that those places lacked meaning for people. Roseland Ballroom had a ton of history and people have a right to mourn its passing. Vikram’s essay and the libertarian response seems to be one devoid of emotion.

        Now I do think that Jeremiah’s Vanishing New York takes the rue too far because he wants NYC trapped in amber and possibly an amber that never existed. This is bad and dangerous. That doesn’t change the fact that the build build build luxury condos and shop craze seems to be continuing at a mad pace. The neo-liberal argument is that you have to let developers run hog wild and eventually prices will go down. No one can say when eventually is though and there are plenty of people who feel that eventually is always around the corner, perhaps years or a decade away. I don’t blame them for being angry.Report

      • Avatar Kazzy in reply to James K
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        says:

        @saul-degraw

        “…people have a right to mourn its passing.”

        Mourning its passing and asking, “What can/should we do about this?” are two different things. Vikram seems to be questioning the appropriateness of doing the latter every time something mourn-worthy happens.Report

      • Avatar Gabriel Conroy in reply to James K
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        says:

        “In my original post, I said outright that businesses close for plenty of legitimate reasons”

        But the title of the post was “how can we protect independent businesses from increasing rents.” I do admit that actually reading your OP, I found your argument much better tempered than the title, and I agree that a title isn´t a contract (and for all I know, authors here don´t always choose their titles). Maybe a better title\argument might have been: “should we protect independent businesses from increasing rents?”Report

      • Avatar DRS in reply to James K
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        says:

        You guys worry too damn much about labels on this site. Just write a post, state your position and let the discussion ensue. Instead it’s all about what label is the correct one and recycling tired talking points.

        And yes, assuming that rich people make the best decisions all the time because otherwise they wouldn’t be rich because hey, markets and all that – just remember one thing. Sheldon Adelson is filthy rich but that didn’t stop him from hiring Karl Rove. Sometimes you get so rich you believe yourself to be infallible.Report

    • Avatar Damon in reply to Saul Degraw
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      says:

      Yeah, I’m sure from some perspectives the “all hail markets” = “whatever happens in a market is supposed to happen” but I wouldn’t phrase it as “supposed to” happen. It happened. “Supposed” suggests intent. There is no intent. Since a free market is the sum of all player’s actions, it just is what it is. There is no morality.Report

      • Avatar Kim in reply to Damon
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        says:

        Damon,
        There is a morality in all markets. Whether its “share and share alike” or “give presents to the guy with highest status, so he’ll take care of you” or “money in, money out”. These are all different rulesets, and each one has advantages and disadvantages.Report

      • Avatar LeeEsq in reply to Damon
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        says:

        You might see markets as amoral but there are plenty of market advocates that do place great moral worth in market outcomes. Treating those that succeed in the market as more virtuous than those that fail is not unusal.Report

      • Avatar Damon in reply to Damon
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        says:

        @kim
        Nothing you said in your comment addressed markets. They are value statements or social political statements of social ordering.

        @leeesq
        Two different things Lee. Assigning morality impacts to the successful participants of market players or the outcomes of markets is not what I’m talking about.Report

  10. Avatar LeeEsq
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    says:

    We have more choices than a Soviet style command economy and an unregulated free market. While I agree that nostalgia and feelings should not determine what businesses get to stay open and what have to close for the most part*, the market can and should be regulated to prevent some of the more profitable but unethical actions of business people. This includes making sure that there is at least some semblance in justice in wages and salaries or preventing corporations from turning public goods like water into private consumer goods at no cost to themselves.

    *I do think making sure that some essential for survival needs like grocery stores do remain open in most neighborhoods.Report

    • Avatar Damon in reply to LeeEsq
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      says:

      But the one thing that hasn’t been addressed is blunting the inevitable use of the political system to derive non market based outcomes. All the laws and regulations in that sphere seem to be essentially impotent. How to fix?Report

  11. Avatar Gabriel Conroy
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    says:

    I haven´t read all the comments yet, so my apologies if this has already been mentioned (and great post overall), but here´s a nitpick to a post I otherwise agree with:

    “Market prices can produce ugly results, but they are at least not politically determined”

    To my mind, how the rules of the market are formulated and how those rules are enforced are inherently processes. And that has some effect on price determination. I don´t have the time right now to elaborate on my argument (and I´m out of the country and won´t be able to respond for a while….my wife and I are on our honeymoon and we´re at a cybercafe), so I´m mostly just throwing it out there. Again, I agree with the gist of the OP.

    By the way, nice to see you writing posts again, Vikram!Report

    • Avatar Gabriel Conroy in reply to Gabriel Conroy
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      says:

      Now that I´ve read some of the comments above (e.g., @chris ´s ), I realize my point has already been made, and made better.Report

    • Avatar Chris in reply to Gabriel Conroy
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      says:

      Perhaps more frustrating than the “markets aren’t political” claim is the false dilemma with which we’re presented, which requires us to either choose the “apolotical” markets or the “political” state (the dilemma itself belies the claim that markets aren’t political, of course).Report

      • Avatar Gabriel Conroy in reply to Chris
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        says:

        I think I agree, @chris , but I wouldn´t go so far as to accuse Vikram of doing that. I think he was just using a trope as a shorthand for his (and to a large extent, my) preferred politics. But yea, politics ´tis.Report

  12. Avatar A Compromised Immune System
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    says:

    Soviet style “command economies” are inherently dangerous but so is an anarchist, “laissez-faire capitalist” economy.

    I would have no problem placing an upper limit on the paychecks, especially when we consider that “sports” like the NFL and NBA already have been granted monopolies in their field.Report

  13. Avatar DRS
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    says:

    Ridiculous post. It’s clear from Saul’s post that the toy store was doing quite well in the market but that its landlord increased the rent past what an independent store could pay. This is unfortunately not unusual when a neighbourhood becomes trendy – it’s a major concern in Toronto. Fortunately we have enough marginal neighbourhoods that indies can move around to get a better deal.

    Is the landlord playing by market rules? Or is he short-sightedly making a cash grab because he thinks he can get away with it? If so, this is foolish. It’s the indies that attract high-income residents to a neighbourhood quite often. Storefronts that are dark or boarded up even for a short time contribute to a sense of malaise on a street. Case in point: Bloor West between Bathurst and Spadina: rents jacked up to $12,000 – $20,000 (often a doubling in one year!) and stores and restaurants with small space forced to move out. Lots of hoardings, lots of dark windows, growing graffiti and trash piles = this street is a dump, don’t waste your time here.

    And the crazy thing is: those national or international chains who landlords would love to attract have other options. Last year the landlord of a three-story Pottery Barn on Bloor West jacked up the rent and PB said, hey screw that, we sell more on-line anyway and announced they were closing the store. Good luck to the landlord trying to find a tenant for a custom-designed three-storey space when the announcement was major news across the city.

    Greed is not your friend, landlord. It will bite you in the butt everytime.Report

    • Avatar Richard Hershberger in reply to DRS
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      says:

      “It’s clear from Saul’s post that the toy store was doing quite well in the market but that its landlord increased the rent past what an independent store could pay.”

      Gosh, you are going to make me defend the free-market side. You are confusing which market we are talking about. The store was doing well on the “sell toys to retail customers” market, but it was a failure on the local commercial real estate market.

      From the landlord’s perspective, the rent hike might or might not make sense. In the short term, if they find a tenant at the higher rate, then this was a good decision. In the longer term, stipulating that you are correct that the higher rent is supported by the proximity of indies paying lower rent, then if the landlord has extensive holdings in the neighborhood it would be wise to keep some of them low enough to keep the indies, and some at a higher rate renting to chains. If the landlord does not have extensive holdings in the neighborhood, then keeping the rent low to keep the indie would only benefit other landlords, who can then raise their rates. This is a variant of the prisoner’s dilemma.

      And here we come to the market failure. Stipulating that a mixture of independent and chain stores within a neighborhood is desirable, there is no obvious way for the market to achieve this. Small landlords have a positive incentive to go exclusively for the chains. Large landlords have an incentive for a mix, assuming that they are capable of long-term enlightened self-interest thinking, but they also have an incentive to constantly cheat: to have more high-rent properties than the other landlords. And a monopoly landlord would bring all the usual problems of a monopoly.Report

      • Avatar DRS in reply to Richard Hershberger
        Ignored
        says:

        Your assumption is that landlords are acting rationally. As I gave examples in my post – which you ignored – landlords are as prone to bad decisions as anyone else and the boarded up and closed stores in a once thriving Toronto neighbourhood are a sign of it. Do you think the high-paying stores and restaurants will continue to thrive on a street that looks derelict? Or will they voluntarily pull out to go to a more thriving area – an area which contains many indies and high-income residents/consumers who don’t go to Bloor West between Bathurst and Spadina anymore.Report

      • Avatar Oscar Gordon in reply to Richard Hershberger
        Ignored
        says:

        As I gave examples in my post – which you ignored – landlords are as prone to bad decisions as anyone else and the boarded up and closed stores in a once thriving Toronto neighbourhood are a sign of it.

        To that, I point to Kelo & the city of New London. Since government is just as prone to irrational acts & decisions, possibly even more so since their personal fortunes are not on the line in most cases, then I am wondering what all the fuss is about?

        To @saul-degraw

        “What is to be done?” Honestly, not much. If the business/institution is that important to the community, they can find a way to support it, through patronage or donations. But as others have pointed out here & on the other post, this could quite simply be a case of the store once having a gotten a very sweet deal that has run it’s course, and the other party to the deal is not amenable to doing it again.

        This is all part of the ebb & flow of an urban landscape. It’s as simple as that. Probably the only reason this is news is because the store was there so long, or because the owners called the media in the hopes that a public groundswell could give them a positive outcome (& it still might).Report

      • Avatar Richard Hershberger in reply to Richard Hershberger
        Ignored
        says:

        “Your assumption is that landlords are acting rationally.”

        My point is that what is rational for a single actor may not lead to optimal results globally (“globally” in this context referring to the neighborhood as a whole). If all the other landlords are jacking up their rents, a single small landlord can’t stop whatever ill effects are going to derive from this, and would be entirely rational to cash in as much as possible before the crash comes. If all the other landlords are keeping rents low, such that the desirable independent stores thrive, then it is perfectly rational for a single landlord to raise rents and bring in a chain. The libertopian claim is that, if just left alone, a desirable outcome will result. In this discussion that would be a stable mix of chains and indies. This, alas, seems not to be the case. Rational individual actors do not always result in a desirable global outcome.

        Of course it is also true that landlords might act irrationally. But this is not necessary for an undesirable outcome to occur.Report

      • Avatar DRS in reply to Richard Hershberger
        Ignored
        says:

        Attention everyone: Oscar would like everyone to know that governments do Bad Things too so we should all just…something or other….about neighbourhood transformation due to landlords being dicks about rent increases. Because. So there. Because governments are dicks too sometimes. Totally.Report

      • @drs As others mentioned on Saul’s original thread, myself included, it’s not remotely as straightforward and simple as that. Commercial/retail lease renewals are not “take it or leave it” affairs, but instead the culmination of sometimes lengthy negotiations. That the space is custom-designed is, I assure you, something that the landlord factored into the equation in assessing the risk of losing the tenant, because just about every commercial/retail lease space is custom-built in at least some manner, meaning that finding a new tenant typically involves committing to a redesign (the costs of which, of course, will be folded into the new tenant’s lease).

        And again, commercial lease agreements, at least in the US, are almost always for multiple years, and quite often can be for a decade or more. Indeed, the length of a lease is just as important to a negotiation as the monthly rent payments, and the lease length is usually going to have a serious effect on the rent payments term (and vice versa), though both the size and direction of that effect may vary. That means several things – first of all, you’re not often going to see all of the retail tenants in a given neighborhood being priced out by rent increases at the same time, though that’s certainly a possibility; second of all, a tenant with a long lease may wind up being the beneficiary of effectively below-market rent for quite some time (which seems likely to be what happened in the Jeffrey’s Toys case) if the neighborhood becomes in-demand after the lease is already in place; and third of all, the tenant is trading the possibility of a huge increase in rent at the end of the lease for the certainty of a stable (or relatively stable) rent throughout the life of the lease.

        I linked in the previous thread to an article discussing how a whole bunch of Manhattan Starbucks stores are set to close up soon because of anticipated rent increases. But those rent increases aren’t because the landlord is being short-sighted or stupid. They’re because the original agreements were for 20 years, and the real estate market in those corridors has changed substantially in the interim: 20 years ago, Manhattan was only just beginning to leave the grittiness (nostalgia for which Saul has been very critical) of the 70s and 80s behind.

        I’ll also add this: none of this is to say that landlords can’t be wrong or are infallible, just as independent business owners can be wrong and fallible. It is, however, to say that when a landlord and commercial tenant can’t come to terms on a new lease, it’s because both sides are often making very different bets: the landlord that the neighborhood will, in the long run, be more attractive to higher-paying tenants, the tenant that it won’t be able to survive the length of the lease at the rent sought by the landlord (and thus that the rest of the neighborhood won’t develop quickly enough). But “bets” is all these are, because nothing is for certain. Sometimes bets pay off, and sometimes they don’t.

        And sometimes things that look like they were a bad bet can turn out to have just been part of a bigger bet that pays off. In other words, sometimes a landlord might want to get rid of all of the existing tenants in order to reconfigure the entire building or property. Since leases are for terms of years, getting rid of all the tenants can take awhile, meaning a “ghost town” effect takes hold in the interim. The “bet” in that case isn’t that the landlord will be able to find a higher paying tenant to replace the existing tenant in that space. It’s that the landlord will be able to find higher paying tenants overall if it starts anew and takes a big hit in lost rent over the course of several years.Report

      • Avatar Oscar Gordon in reply to Richard Hershberger
        Ignored
        says:

        @DRS You are the one carrying on about landlords being stupid (or evil, or something) & it’s bad and all. Perhaps instead of just complaining about it, you could offer a solution, preferably one that isn’t some kind of government control that either hasn’t already been tried and found wanting, or an outright land grab, because that always works so well for everyone involved.

        I’m not going to offer a solution because I don’t think this is a problem of sufficient magnitude to warrant any kind of intervention (it obviously is a problem for the store in question, but such is life).

        Or you can just carry on with your ranting and continue to add nothing substantive to the conversation.Report

      • Avatar DRS in reply to Richard Hershberger
        Ignored
        says:

        Hey Oscar – where did I say anything about government involvement, let alone control, in this issue? I didn’t but you seem to be one of the many commenters on this site who love that strawman so much they immediately lunge for it whenever a discussion threatens to break out.

        I thought it would be better to respond to you humorously rather than say what I really felt which was that your response to me was incoherent. I won’t make that mistake again.

        And I do feel that there are adverse consequences to a neighbourhood undergoing upheaval and transformation. For one thing, people’s lives are (at best) inconvenienced and (at worst) they might lose their investments in their stores and restaurants. Maybe that doesn’t matter at a “global” level but as a conservative I happen to believe that communities deserve a little more respect than that.

        And just for the record: I have three times in the past ten years been involved with just the kind of rental increase/leasing arrangements that are under discussion and my take on things (or my “rant” as you call it) is based on those personal experiences and those of friends’ in the same situation. How many of you can say the same thing?Report

      • Avatar Oscar Gordon in reply to Richard Hershberger
        Ignored
        says:

        @drs

        My apologies, the humor didn’t come across, or I missed it & took it wrong.

        And yes, I do reach for that drum, because the norm in a lot of these discussions is that when markets result in non-optimal (for some) outcomes, than people want to reach for the power of government to fix it.

        Yes there are adverse outcomes as neighborhoods change, yes people lose out, so do landlords. It happens. It sucks for anyone getting the short end of the stick. Hell, I’m still holding the short end of the stick on a home I own, because the market is such that I can not rent it for what the mortgage payment & taxes are on the place, much less turn a profit on it, so every year I lose $5K-$10K+* on it, and I can’t even write it off on my taxes because my wife & I make too much. But I can’t sell it without bringing more money to the table than I have in the bank. That is money that isn’t going to my retirement, or my kids college fund, or any other very constructive uses I may employ it toward.

        So yea, I know. It sucks a$$. I just deal with it & hope the neighborhood the house is in improves enough that I can unload it soon.

        *depending on maintenance, etc, last year we lost $11K thanks to a bunch of little things and a sewer back up that insurance only partly covered.Report

      • Avatar DRS in reply to Richard Hershberger
        Ignored
        says:

        Oscar – accepted. No hard feelings. Consider yourself hugged in a discreet manner. Go have a cookie on me.Report

      • Avatar Oscar Gordon in reply to Richard Hershberger
        Ignored
        says:

        @drs

        Good! 🙂

        @mark-thompson

        My mini-rant above made me think of another factor – if Jeffrey’s had a long term lease, the current hike could have something to do with not just opportunity for the landlord, but something simpler – how much have property taxes risen since the original lease was signed?Report

      • Avatar DRS in reply to Richard Hershberger
        Ignored
        says:

        Also: very few times on this site does government intervention get proposed seriously as a solution to anything. It is quite disappointing therefore how often it gets treated as if it were and how many discussions degenerate into exchanges of labels and talking points.

        Store and restaurant owners are some of the most conservative business people in any town. Treating their financial concerns as secondary or even tertiary to the great cause of market forces risks alienating a strong voter base. Those guys vote – with extreme prejudice, to borrow someone else’s phrase – and they deserve to have their concerns taken seriously. Otherwise the NDP tends to rack up votes in neighbourhoods where they should come in third.Report

      • Avatar Oscar Gordon in reply to Richard Hershberger
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        says:

        very few times on this site does government intervention get proposed seriously as a solution to anything.

        Fair point.

        Store and restaurant owners are some of the most conservative business people in any town. Treating their financial concerns as secondary or even tertiary to the great cause of market forces risks alienating a strong voter base.

        I don’t think anyone here is. However, as conservative minded people, they should always be prepared for the business/economic landscape to shift unexpectedly, and have a plan for what to do when leases are up and costs go up, or values/business drops off. This is part of what constitutes a business plan – contingency planning.

        As for voters, etc., given how few politicians lost their jobs after voting for the various bills to bail out the financial industry that tanked everyone’s investments & savings, I’m not sure how much fear our political class really has of the various voters they supposedly answer to.Report

      • Avatar Dave in reply to Richard Hershberger
        Ignored
        says:

        @mark-thompson

        That the space is custom-designed is, I assure you, something that the landlord factored into the equation in assessing the risk of losing the tenant, because just about every commercial/retail lease space is custom-built in at least some manner, meaning that finding a new tenant typically involves committing to a redesign (the costs of which, of course, will be folded into the new tenant’s lease).

        Not only that, in a lot of cases, either the tenant contributes capital to the build out of the space or the Landlord will do it provided that those additional costs are added to the total rent cost and amortized over the lease term (a very common practice).

        second of all, a tenant with a long lease may wind up being the beneficiary of effectively below-market rent for quite some time (which seems likely to be what happened in the Jeffrey’s Toys case) if the neighborhood becomes in-demand after the lease is already in place;

        I think you just described the lease for Toys R Us’ flagship store in Times Square. It’s also why Toys R Us is vacating the space next year. The market rent on that space is substantially higher than what Toys R US is paying now and the space is worth more to the landlord if they move out a single tenant, subdivide it and re-lease it to other tenants.

        Given that it’s a key Times Square location, it won’t be hard to do and retailers will pay up to be there.Report

  14. Avatar Richard Hershberger
    Ignored
    says:

    From the addendum:

    “Each area in which we sacrifice #1 for #2 purely because we don’t like the result rather than because we are trying to correct some genuine market failure, we lose something.”

    Serious question: how do we distinguish a genuine market failure from something we simply don’t like? Surely this is a subjective judgment, and different players will have different responses.

    To make a hypothetical example taking this to the extreme, if my company drives your company out of business, and thereby achieves a monopoly, from my perspective this isn’t a market failure. It is a ringing success: strike up the band! Of course if your company drives mine out of business and achieves a monopoly, my opinion will vary. And from the perspective of a customer of either business, both are market failures.Report

    • Avatar Chris in reply to Richard Hershberger
      Ignored
      says:

      And why does the market still remain a contrast to politics and political unfairness?Report

    • Avatar j r in reply to Richard Hershberger
      Ignored
      says:

      Serious question: how do we distinguish a genuine market failure from something we simply don’t like? Surely this is a subjective judgment, and different players will have different responses.

      This shouldn’t be a subjective question, at least not for the most part. A market failure is something different than an outcome that some people don’t like. A market failure describes specific situations in which the market fails to reach a Pareto optimal equilibrium; that is, there are ways to make more people better off without making anyone worse off.

      In the monopoly example, the competitor going out of business is not a market failure, but the resulting monopoly might be. It’s best to disaggregate distinct phenomena and evaluate them separately.Report

      • Avatar Chris in reply to j r
        Ignored
        says:

        “A market failure describes specific situations in which the market fails to reach a Pareto optimal equilibrium; that is, there are ways to make more people better off without making anyone worse off.”

        That is strictly the technical economic definition of market failure. Economics does not, if you’ll pardon the pun, have a monopoly on the definition of “failure.” It’s quite clear that people here aren’t talking about market inefficiencies, at least not in the economic sense, so that definition is not only not the only type of “failure” in markets, but in this context a largely irrelevant one.Report

      • Avatar Mike Schilling in reply to j r
        Ignored
        says:

        Economics does not, if you’ll pardon the pun, have a monopoly on the definition of “failure.”

        But if anything did …Report

      • Avatar j r in reply to j r
        Ignored
        says:

        It’s not a monopoly on the definition of failure. It’s a specific definition for the term “market failure.” Of course, anyone is free to talk about an unfavorable outcome as a market failure, but that could mean anything. Instead of trying to appropriate an economic term of art, better to make an argument about what you think the specific problem is in any given instance of said failure.

        My problem with the use of this term to describe things that are not market failures in any economic sense is that it shields people from doing the work to diagnose an actual economic, political or moral failing.Report

      • Avatar Kim in reply to j r
        Ignored
        says:

        jr,
        good point, chap. If you’re going to not use the “proper definition” of course you’ve got more explaining to do.

        Of course, rats running through the streets eating garbage left lying about tends to do your explaining for you. (Otakon, anyone?)Report

  15. Avatar LWA
    Ignored
    says:

    The comments above about water rights illustrate how markets themselves are a distortion.
    Water begins as a rain cloud, then falls to earth and is either absorbed into an aquifer or collected in a lake.

    Pointing to some point in that cycle and declaring that “At this point, water becomes property” is a choice, a constructed reality.

    Its based on a certain moral theory of how we humans interact with the natural world and each other. This moral theory is privileged over all others, and enforced with violence.

    It isn’t to say that economic affairs are entirely the result of whimsical choices, that we can construct them any way we want. But like a building which obeys the laws of physics, there are innumerable ways to use the laws to construct a reality different than what exists.Report

  16. Avatar zic
    Ignored
    says:

    This whole conversation seems silly to me, a debate over which ideology is better. Who cares?

    The relationship of government and markets is complicated; and it’s not government: good or bad; markets: good or bad, it’s individual instances. Sometimes good, sometimes bad, sometimes difficult to sort out. The politics of wages so low that large portions of the US workforce for the world’s second-largest company depend directly on the social safety net disgust me; particularly when the majority stock owners are some of the richest people in the world. There’s a bad.

    Then there’s investment in R&D, which is pretty awesome. (Disclaimer: I used to be a contributing editor to this magazine.)

    Right this minute, in this business climate, we need jobs, so we need growing companies. Business loans are hard to land. Venture money generally goes to later-stage development, particularly for stuff outside IT tech. There isn’t enough angel investment to fill that gap. Government helps; this is a good thing. Defense spending does a lot here, too, the only reason I’m unwilling to go whole-hog on gutting defense budgets.

    Free markets require some sort of rule of law, and no matter it’s form, that rule of law is generally what we call government. They go together; and I don’t have much problem with government filling in where markets haven’t happened yet.Report

    • Avatar j r in reply to zic
      Ignored
      says:

      The politics of wages so low that large portions of the US workforce for the world’s second-largest company depend directly on the social safety net disgust me…

      Why exactly? Personally, I think this is roughly the way the social safety net ought to work.

      That is, I’d rather get the government out of the business of imposing distortions on the labor market and instead subsidize poor people directly through some form of guaranteed basic income.Report

      • Avatar zic in reply to j r
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        says:

        WalMart can afford to pay a living wage, and that it doesn’t, and that employees are subsidized by the social safety net, results in direct transfer of wealth from taxpayers to walmart stock holders.Report

      • Avatar Will Truman in reply to j r
        Ignored
        says:

        So can we do away with this stockholder subsidy by eliminating the government support to the workers?Report

      • Avatar Jaybird in reply to j r
        Ignored
        says:

        It’s tough but fair.Report

      • Avatar j r in reply to j r
        Ignored
        says:

        What @will-truman said. If you eliminated to social safety net, Walmart would likely be able to decrease its payroll costs, because lots of people would be even more desperate for work, so the subsidy argument doesn’t hold much water.

        More importantly, what is a “living wage?” What is the benchmark? Let’s say that Sue the college student who lives at home, Mary the married, part-time homemaker whose husband works full time, and Jane, the single mother with three kids all work at Walmart. There is no one wage rate that meets all of their costs of living, so where do you set the living wage rate?Report

      • Avatar Oscar Gordon in reply to j r
        Ignored
        says:

        Living wage also varies dramatically by geographic location.Report

      • Avatar Will Truman in reply to j r
        Ignored
        says:

        For me, it’s like this…

        Say Retail Rodeo (a megacorporation involved in low-end retail) pays its employees $10/hr.

        Meanwhile demos says “We don’t believe that’s enough to get by on, so we’re going to give government services and aid to the tune of $5 an hour, because you really need $15 to live on.”

        How much of Retail Rodeo’s $10/hr wages are contingent on the government paying the other $5? If, absent the government, RR would pay $15/hr because nobody will work for a wage lower than that, then it’s definitely the case that the government aid is going straight to RR shareholders.

        In that case, let’s do away with the aid. Retail Rodeo will pick up the tab. They’ll have to, right?

        But I’m not at all sure that’s the case, which is why I don’t want to do away with the aid. Retail Rodeo might raise wages a bit, to say $11/hr, but I don’t think it would be to $15 or the half-way mark of $12.50. I think they would tell their employees “Find a way to get by on less.” And they’d be able to staff their stores on people who figured out a way.

        That means, to me, that our aid is going primarily to the workers and not to RR. We’re the ones setting the standard on what constitutes a living wage. Being the government and the ones with guns and tax collectors, we can demand that RR pick up the tab on this. But it doesn’t seem to me that it’s incumbent on RR (or its shareholders or by extension its customers) to meet demos’ standards on what constitutes a reasonable standard of living. It comes across mostly as asking someone else to pay for it.Report

      • Avatar zic in reply to j r
        Ignored
        says:

        Look, they’re (WalMart shareholders) are gouging at multiple troughs; capital gains, offshoring tax breaks, safety-net subsidies are three obvious.

        And did one of you bother following that link? I doubt it based on responses. There are two ways to bend government policy to your advantage here — so large that you bulldoze your preferred policies and highly competitive.Report

      • Avatar Kim in reply to j r
        Ignored
        says:

        zic,
        I hear that walmart pays you pretty well, if you’re worth enough to ’em…Report

      • Avatar j r in reply to j r
        Ignored
        says:

        @zic

        If you want to beat up on Walmart, be my guest. I’m not here to defend Walmart. I’m making two points:

        – To say that the social safety net subsidizes employers that pay low wages is a misuse of the term “subsidy,” and
        – the idea of a living wage is deeply flawed.Report

      • Avatar A Compromised Immune System in reply to j r
        Ignored
        says:

        More likely @will-truman they’d staff their stores on people who are desperate, constantly broke, and at the mercy of payday-loan sharks and other predatory businesses.

        Look around any Wal-Mart. What will you find? Pawnshops and payday loan places. The cost of having a Wal-Mart in your neighborhood is having the shitty businesses that prey on the already-destitute right alongside.

        “But I’m not at all sure that’s the case, which is why I don’t want to do away with the aid. Retail Rodeo might raise wages a bit, to say $11/hr, but I don’t think it would be to $15 or the half-way mark of $12.50. I think they would tell their employees “Find a way to get by on less.” And they’d be able to staff their stores on people who figured out a way.”Report

      • Avatar Will Truman in reply to j r
        Ignored
        says:

        The first paragraph is kinda what I was saying, or is at least entirely consistent with the point I was making.Report

      • Avatar Patrick in reply to j r
        Ignored
        says:

        @j-r

        That is, I’d rather get the government out of the business of imposing distortions on the labor market and instead subsidize poor people directly through some form of guaranteed basic income.

        Er… I personally agree that subsidizing poor people directly through some form of guaranteed basic income is the optimal way to provide a safety net, for the record…. but (a) I don’t think it’s politically feasible as too many of both the Left and the Right crowd want to make sure there’s no “waste” in the safety net by only making sure folks spend money on the “right” things, and (b)… isn’t that still a pretty big distortion in the labor market?Report

    • Avatar Oscar Gordon in reply to zic
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      says:

      Re: Jobs

      This is hearteningReport

  17. Avatar DRS
    Ignored
    says:

    the idea of a living wage is deeply flawed.

    And what the *bleep* does that mean?Report

    • Avatar j r in reply to DRS
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      says:

      Read the comment I made above.Report

      • Avatar DRS in reply to j r
        Ignored
        says:

        I did. It was ridiculous. I was giving you a second chance to not embarrass yourself. Didn’t work, obviously.

        The fact that people have different lifestyles and require different needs doesn’t negate the idea of a living wage. A common definition is: “In some nations such as the United Kingdom and Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford the basics for quality of life, food, utilities, transport, health care, and minimal recreation…” (Source: http://en.wikipedia.org/wiki/Living_wage )

        Paying good wages to employees is key to a well-functioning society and economy. Individuals can make enlightened decisions regarding their own situations based on a standard living wage for various positions.

        There’s an important quote from Adam Smith on the same source:

        “Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be ?ourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.” — Adam Smith, Wealth of Nations, I .viii.36

        Those of you so enamoured of the rent-collecting class might want to be careful that you don’t slide over into showing your contempt for the people who actually make the goods and perform the services that make the economy hum.Report

      • Avatar j r in reply to j r
        Ignored
        says:

        I did. It was ridiculous. I was giving you a second chance to not embarrass yourself. Didn’t work, obviously.

        Is that really the direction in which you want to take this conversation?Report

    • Avatar Jaybird in reply to DRS
      Ignored
      says:

      If I had to guess, I’d say that “the price of a thing is the price of a thing”.

      If there was a job that was worth $4 for you to have done for you and someone says “I’ll do it for $20!”, you’ve got a choice between saying “nah, I’d rather have the $16″/doing it yourself or shelling out the $20 or leaving the job undone.

      And, of course, if you’re willing to shell out the $20, at that point we get to say that the original framing of the problem was lying.

      So, if it ain’t lying, the choice is between doing it yourself and leaving it undone.

      Where this ties into the living wage is the issue of jobs that are not worth $20 to have done but are worth $4. $4 is not a living wage. $20 is a living wage.

      But if it’s not worth $20 to you to have the job done, you’re either going to do it yourself or you’re going to leave it undone.

      Shelling out the $20 (that is to say, “shelling out the living wage”) is not an option.Report

      • Avatar zic in reply to Jaybird
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        says:

        this is nonsense

        the price of labor is not market driven, employers (particularly large employers) go to great lengths to suppress labor markets and rent seek in benefits and wages all the timeReport

      • Avatar Jaybird in reply to Jaybird
        Ignored
        says:

        My experience is primarily in small business.

        When I shoveled sidewalks and driveways, for example, there were negotiations. My opening offer was usually agreed to immediately. Only once or twice was my offer counter-offered ($20 to shovel? $15!) but, I assure you, If someone didn’t want to pay me my fee, I left their driveway unshoveled. If they paid it, I shoveled it.Report

      • Avatar j r in reply to Jaybird
        Ignored
        says:

        this is nonsense

        the price of labor is not market driven…

        This statement is by definition false.Report

      • Avatar zic in reply to Jaybird
        Ignored
        says:

        @j-r labor unions are seriously in decline; representing something like 12% of the labor force now (that’s off memory, and subject to being wrong).

        But the efforts to fudge labor costs happen every day in local governing (I spent a decade reporting on this stuff). You all sit here, with some notion of federal law and a slice of view of local business, probably don’t bother to go to site-plan review meetings or hearings on things at your state house. But concerned business owners are there, or their lobbyists are there if they’re wealthy enough.

        The system is basically sold out to the business interests over labor a long, long time ago; and the recent recession just put the nails in the lid of the coffin. Yes, business was hurt, but most BIG business has recovered, sits on piles and piles of cash that taxed at historically low rates, and competition for jobs — even jobs that mean you’ll still qualify for snap bennies — is still fierce. For many smaller, marginal businesses, I’ve got no problem with that at all. But for mega corps this is income redistribution at it’s ugliest.Report

      • Avatar Oscar Gordon in reply to Jaybird
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        says:

        re: Labor Unions – I’ll repeat what I said before – unions are in decline partly because they are victims of their own success, and partly because they are unwilling or incapable of evolving to meet the wants & needs of the current and incoming labor force.Report

      • Avatar LWA in reply to Jaybird
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        says:

        A lot of the conversations involving supply and demand are of the sort that takes a completely reasonable law, and stretches it far beyond where it can go.
        An analogy would be to assert that Newtonian physics states that anything with a greater density than air falls to the ground.
        Therefore, since airplanes are denser than air, they must not fly.

        The error here is that there are many more laws of physics than one. They can be combined to work against each other.

        Supply and demand is one, but only one law of economics and only one driver of human behavior.
        Consider the example here, of shoveling snow.
        Add to the example other factors.
        For instance, the existence of a $16/ hr guaranteed basic income by the government, and how that affects the decision of the laborer;
        or a mandatory requirement to have driveways shoveled and how that affects the willingness of the owner.

        And so on.
        It gets back to the idea that our economy is a constructed entity affected by laws of supply and demand and many other economic factors, but also by regulatory decisions premised on moral and cultural attitudes towards work.

        How much the snow shoveler gets paid has a lot to do with how we as a society feel about him, and his work.Report

      • Avatar Troublesome Frog in reply to Jaybird
        Ignored
        says:

        @lwa

        Those types of factors (specifically the ones you mentioned) get rolled into supply and demand. In fact, in an economics class they’d probably be brought up as questions like, “How would this affect supply and demand?” in the unit covering supply and demand.

        I did want to call this out, though:

        For instance, the existence of a $16/ hr guaranteed basic income by the government, and how that affects the decision of the laborer

        There appear to be people on this very board who take the position that employers would then be able to pay laborers $16 less and mooch off of that government benefit. I disagree with that analysis.Report

      • Avatar LWA in reply to Jaybird
        Ignored
        says:

        @troublesome-frog
        Right, but what I’m taking issue with is the concept of “distortion” in markets, as if a non-distorted market can exist.
        As in my analogy, its like pointing to jet propulsion as a distortion of physics, since it artificially makes heavier than air objects fly.
        A minimum wage may or may not be a good idea, but objecting to it as somehow a distortion of markets is silly.
        The non-distorted market is really just someone’s set of preferences cast into the landscape and made to appear like they are naturally occurring.Report

      • Avatar Troublesome Frog in reply to Jaybird
        Ignored
        says:

        So if I’m reading this correctly, your claim is that a situation in which a homeowner decides whether or not to have his driveway shoveled at a given price is just as “distorted” as one with government mandated driveway shoveling at a fixed price or, say, the local crime lord shoveling snow and then taking $5000 per household at gunpoint? If that’s the case, is there a definition of “market” that has any useful meaning at all, or is there a situation where overriding the individual judgment of the market actors could be considered a distortion?Report

    • Avatar Oscar Gordon in reply to DRS
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      says:

      Living wage is a moving target, not a hard & fast number, as it depends on numerous factors & preferences. One could argue that the living wage is something equivalent to the poverty line, but even the value assigned to the poverty line is very subjective.Report

      • Avatar zic in reply to Oscar Gordon
        Ignored
        says:

        Poverty level works quite nicely generally.

        Full time job should mean you get health insurance and are not living below the poverty line after your portion of that insurance is paid.Report

      • Avatar Oscar Gordon in reply to Oscar Gordon
        Ignored
        says:

        I’d argue the poverty line is too low in almost every major urban area, and potentially too high in other areas. It would have to be determined locally in some way. It is a good starting point, however. This is one of the problems with a GBI, in that a GBI that permits a family with no expensive vices to meet basic survival needs in Sheboygan, WI is inadequate for the needs of the same family in NYC or SF.Report

      • Avatar Troublesome Frog in reply to Oscar Gordon
        Ignored
        says:

        Is that poverty for one person, or should one be able to support a family on a living wage? If so, how many children per parent?Report

      • Avatar zic in reply to Oscar Gordon
        Ignored
        says:

        @troublesome-frog I’d at least start with the same formulas that are used to determine baselines of ACA subsidies; and there are similar formulas used for any number of programs that require income verification. This isn’t new stuff; we’ve been doing it a long time.Report

      • Avatar Troublesome Frog in reply to Oscar Gordon
        Ignored
        says:

        @zic

        That’s just my point, though. Those formulas are all based on household composition and household income. Wages are an individual concept based on the value of the work of that individual. They don’t account for any of those factors. Would a “living wage” change that, or would it be based on some idealized concept of how many people should be able to live on that single wage? If we’re coming up with that ideal, my original question still stands. If it’s immoral to pay a person a wage they can’t live on, is it also wrong to pay a person a wage they can’t raise a child on? Or five children? Whose norms are we going to use?

        I’ll say what I usually say about this stuff: If “we” care about people who aren’t making enough money to raise their families, “we” can dig into our pockets and help them out with a direct subsidy. Coming up with a Rube Goldberg way of making it look like big business (or at least, anybody but me!) will pay for it just ends up being a mess.Report

      • Avatar zic in reply to Oscar Gordon
        Ignored
        says:

        @troublesome-frog

        I see your point; and yes, it would probably have to be based on an individual’s wages. It’s never a perfect measure; it cost a lot more to live some places than others; it’s a vague measure at best.

        But a person, working full time, ought to earn enough to not require food stamps and Medicaid at the very least; particularly when employed by the world’s largest companies.Report

  18. Avatar Rufus F.
    Ignored
    says:

    Actually, the problem I have with the free market argument is that, over the past four decades or so, it’s been most often made by politically connected rent seekers when they’ve been getting some legislation pushed through that increases their ability to operate in the market to some extent mainly by imposing disadvantages on their competition, their customers in many cases, their employees, of course, and the market itself. Then, when they eventually reach the point of near collapse, they need the government to further artificially inflate their position in the market, usually making some b.s. claim that they’re just looking to be more “flexible” in the market. I’m thinking of higher ed here, but it’s been the case in many industries. I suppose my problem is just with liars. But it has nothing really to do with what you’re talking about here about “the market” versus moral claims.Report

  19. Avatar LWA
    Ignored
    says:

    @troublesome-frog
    @brandon-berg
    Down here-

    What I am saying is that the concept of a “market” which is different than a “distorted market” is a fallacy.
    There are many ways of affecting and influencing the market, as our examples suggest. Some we consider to be beneficial, and others not.

    Consider Brandon’s comment somewhere up above about how allocating natural resources as a commons invites politics. He suggests privatizing reduces this.

    Yet politics is woven into the very fabric of property. Property rights only exist as a political act and belief, premised on postulates about human nature.

    There isn’t any naturally occurring market- it has to be imagined and constructed, with rules and boundaries. This is because there isn’t any naturally occurring property rights- God didn’t hand out deeds, after all. Humans claim property, and through politics decide what it is, how it is handled, and how it is transferred.Report

    • Avatar Stillwater in reply to LWA
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      says:

      I find myself sorta agreeing with both sides of this debate. I think LWA is correct that the concept of property is inherently political and policy regarding property even moreso. But I agree with the larger negative critique of regulation being offered here as well. In particular, I agree Brandon upthread regarding water rights, which is generally viewed as not only a commons but something people feel ought to be subsidized (or price-regulated, whatever) because it’s viewed as a right. He wrote

      That’s exactly what happens when a resource is treated as a commons: It gets allocated politically, which means patronage. The sane thing to do is auction off water rights and use the proceeds to reduce distortionary taxes,

      Now, one thing I’d say about this stuff is that historically-based evidence regarding gummint involvement in certain markets may support the argument that that particular policy led to good results according to some metric. In particular, I’m thinking of the very long precedent of federal and state governments funding contemporaneous infrastructure development or subsidizing certain sectors of the private market against future tax revenues on the premise that such funding increases total economic output (and according to one calculus ought to fund itself). The problem I see with this type of reasoning is that historical evidence doesn’t really constitute a justification for current policies given that markets and social life can and often does change radically over time. So what was once a perhaps necessary subsidy to promote/encourage/stabilize a portion of the economy will lead to not only rent seeking over time (which may or may not be a big deal) but more importantly creates a dynamic in which use of a resource based on that policy undermines the ostensible purpose of creating/imposing it: less economic output in the present tense than otherwise.

      Which is where I think Brandon is largely correct (in broad outline insofar as I’m understanding him correctly): subsidizing water provision in the absence of market-determined pricing not only costs tax payers more money than they otherwise would pay (which is a drag on the economy), but it inhibits economic growth (considered widely) by restricting the otherwise normal market forces from doing its efficiency-promoting thing.

      Maybe another way to say it is to incorporate scarcity into this little saturday morning analysis: long ago, the worry wasn’t scarcity of water as much as a scarcity of spigots and delivery mechanisms necessary to reduce scarcity of food to grow and sell stuff. Nowadays, it’s sorta reversed: food is plentiful while the scarcity of water itself has created a new set of policy worries.Report

    • Avatar Troublesome Frog in reply to LWA
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      says:

      What I’m trying to figure out is whether your position is that interferences in the market differ only in kind and never in degree. If, say, the price of cold Coke going up because it’s hot is the same as it going up because the state mandates consumption of 2L per day per person, are those just different things that happen against a background of other things that happen, or would it be reasonable to say that one is a more natural outcome than the other?

      Bear in mind that I’m making no argument (yet) about one being a “better” outcome. It just seems to me that there are things that people do in the absence of outside interference and there are things people do when outside factors interfere with their plans, and the amount to which we can interfere is variable. The argument I’m hearing seems to be along the lines of, “Stuff just happens, so it’s silly to ascribe properties to some of the stuff that happens and not other stuff.” Or at least, “Private property is a social construct, so there’s no way to know how voluntary any transaction between two people is.”Report

    • Avatar Troublesome Frog in reply to LWA
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      says:

      Or maybe to put it more simply, does the fact that markets are all already regulated and fiddled with in some absolute sense mean that there is no such thing as a marginal change in that interference?Report

      • Avatar LWA in reply to Troublesome Frog
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        says:

        I honestly don’t know the answer to the difference in kind versus difference in degree question.
        I should probably refer to Road Scholar’s comment up at the top, since he gets at my point more articulately.
        Its the idea of some natural state of being that is in error here, contrasted with artificial meddling.Report

      • Avatar Troublesome Frog in reply to Troublesome Frog
        Ignored
        says:

        My issue with that, though, is that most people who are talking about “increased interference” aren’t using a Platonic “natural state” as their point of reference. They’re usually using the current state, warts and all, and they’re just asking what the change will be at the current margin. The fact that there may be no natural or totally unmanipulated markets doesn’t necessarily mean that one can’t categorize a change from the status quo as being an increase or decrease in distortion.Report

    • Avatar Brandon Berg in reply to LWA
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      says:

      @lwa The point of a market economy is that, when corrected for externalities (note that while “externalities” is often used as a magic incantation to justify any desired intervention, or does have an actual meaning, and that’s what I mean here) is that it creates a framework in which people reap the rewards and pay the costs of their own decisions. In that sense, there really is something special about it. It’s not just an arbitrary point in policy space; it’s the point where externalities are minimized.

      Most of the policies the left favors that I oppose are specifically designed to make it easier for people to externalize the costs of their actions, moving us further away from that sweet spot where externalities are minimized.Report

      • Avatar LWA in reply to Brandon Berg
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        says:

        @brandon-berg
        Your argument here is based on a several moral truths.
        One is that people should not freeload- which is rooted in the concept of self autonomy, and the rightful possession of our labor.
        This is the one most familiar to our political dialogue and favored by the right- the “makers and takers” argument.
        But contained inside it another one less commented on.

        Its the moral norm of industriousness.There exists a moral norm of being industrious and hard working, of being the sober and wise ant, instead of the foolish and irresponsible grasshopper.

        This part stands in contrast to the first. The first part claims the territory of the self, the second asserts a lien of the community onto the self.

        Because industriousness for its own sake implies that this industriousness is to benefit those beyond the self.

        This explains the proscription against drunkenness, idleness, and narcissism even when they don’t have any demonstrable harm to others.

        Industriousness claims that one has a moral duty to work hard and be sober, as part of the community wide project of building a prosperous society.Report

      • Avatar Jaybird in reply to Brandon Berg
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        says:

        The problem is that if you appeal to “we’re all in this together, we all have responsibilities to each other in this community” to the ants, you’re going to have to have a very good explanation for what responsibilities the grasshoppers have to the community.

        Without that, you’re going to find that grasshoppers end up disproportionately in prison for stuff that has ants merely paying fines.Report

      • Avatar LWA in reply to Brandon Berg
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        says:

        @jaybird
        I agree, except I don’t see why its a problem.

        We do have an explanation of what obligation grasshoppers have to the community. That metaphor is thousands of years old, after all.
        The obligation to work is one thing conservatives get right in my view.
        I think they just miss the deeper point of why we should do so.Report

      • Avatar Jaybird in reply to Brandon Berg
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        says:

        So a two-tiered system of justice (one for ants, one for grasshoppers) is not a problem… then I guess we don’t have a problem.Report

      • Avatar Mike Schilling in reply to Brandon Berg
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        says:

        We also have a two-tiered system of justice for the queens vs. the other ants. Try running a forgery ring as an individual (as opposed to a bank) and see if your punishment is being fined a fraction of your proceeds,Report

      • Avatar LWA in reply to Brandon Berg
        Ignored
        says:

        @jaybird
        Sorry, you lost me somewhere. I don’t get where this leads to prison. I was talking about how I have no problem coercing grasshoppers to work, and ants to contribute.

        Where prison fits into this is a bit Dada for me.Report

      • Avatar Jaybird in reply to Brandon Berg
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        says:

        You *DO* understand that we live in a society with two tiers of justice, right? One where “productive” members of society have different penalties than “unproductive” ones?

        You’ve seen that with your own eyes, right?

        My argument is that if you don’t have a very good explanation for what responsibilities the grasshoppers have to the community, you’re going to find that grasshoppers end up disproportionately in prison for stuff that has ants merely paying fines.

        Which is the society that we have.

        This isn’t me being obscurantist or anything.Report

      • Avatar Stillwater in reply to Brandon Berg
        Ignored
        says:

        LWAs ants are people who don’t work; Jaybird’s ants are (apparently?) black folk. (Presumably they aren’t obscurantists…)Report

      • Avatar Mike Schilling in reply to Brandon Berg
        Ignored
        says:

        Ants are people who do work. Or live off their inheritances: either is fine.Report

      • Avatar Jaybird in reply to Brandon Berg
        Ignored
        says:

        I’d rather the counter-argument to my position be something like “you’re wrong” rather than “you’re a jerk for pointing that out”. There are very much class differences between the people who tend to get prison sentences and people to tend to be able to avoid prison. If we want to talk about the overlap between race and class in this country, that might be interesting, I suppose, but I think that the distinction that society makes between the so-called “deserving poor” and “undeserving poor” would be more illuminating than stampeding to the conclusion that I’m talking about race.

        Schilling, here’s the distinction some people make: someone living off of an inheritance is not freeloading off of “society”. Sure, they’re freeloading, but they’re freeloading off of their parents or grandparents or greatgrandparents.

        Of course, the counter-argument is something like “if freeloading is bad, then freeloading is bad!” but, for some reason, there is a lot of society that says something like “if you’re not taking money from society, then you’re not freeloading in the way that we are normally using the term when we talk about not liking freeloading.”Report

      • Avatar Stillwater in reply to Brandon Berg
        Ignored
        says:

        Jaybird,

        Do class and race issues exist in the US? Holy shit! Why haven’t you mentioned this before? Seems like the sorta thing folks need to be aware of before commenting on … well … just about anything!Report

      • Avatar Jaybird in reply to Brandon Berg
        Ignored
        says:

        So we’re running with “you’re a jerk for pointing that out”?Report

      • Avatar Stillwater in reply to Brandon Berg
        Ignored
        says:

        Well, I think you’re a bit of a jerk for not mentioning this earlier, but I’ll forgive you for that. I mean, I had no idea this was going. So thanks!Report

      • Avatar Mike Schilling in reply to Brandon Berg
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        says:

        I lose track of who the deserving poor are these days. Do food stamps disqualify people? The EITC? Insurance via PPACA? Kids in public school?Report

      • Avatar LWA in reply to Brandon Berg
        Ignored
        says:

        OK, I am being the slow kid in class today, because I am still not getting this and think now the ants/ grasshopper thing sent us off the rails.

        The fable of the ant and grasshopper has it that the ant toils industriously, while the grasshopper sits around loafing. It is used normally in the service of Brandon’s “reaping the rewards” argument to justify why those who earn money shouldn’t give it to those who don’t, or at least shouldn’t give it without conditions.

        I really don’t know what a “good explanation for what responsibilities the grasshoppers have to the community” means.

        My point was intended to be that the moral norm of industriousness has both a individualistic and communitarian side.Report

      • Avatar Stillwater in reply to Brandon Berg
        Ignored
        says:

        LWA,

        Sorry for jackin up the thread. Here, I’ll fix it:

        LWAs ants grasshoppers are people who don’t work; Jaybird’s ants grasshoppers are black folk. Definitely not obscurantists.

        Now it’s back on the rails!Report

      • Avatar Jaybird in reply to Brandon Berg
        Ignored
        says:

        I lose track of who the deserving poor are these days. Do food stamps disqualify people? The EITC? Insurance via PPACA? Kids in public school?

        Please understand that I would never be so gauche as to argue this position as if it were one that I held.

        I am much more comfortable pointing out that pretending that society does not make these distinctions is likely to result in a continuation of what is going on right freaking now.

        I really don’t know what a “good explanation for what responsibilities the grasshoppers have to the community” means.

        The ants are the ones who work industriously. They are told that they need to maintain a robust social safety net because of such maxims as “We All Have Responsibilities To The Community”. When the ants ask “What Are The Responsibilities Of The Grasshoppers?”, and there is no good answer, we end up with a grossly disproportionate amount of Grasshoppers in prison.

        It is, apparently, in bad taste to publicly acknowledge that one has noticed this.Report

      • Avatar greginak in reply to Brandon Berg
        Ignored
        says:

        Well it’s good we can split the Populace into two separate groups with clear discrete characteristics. The ants who are all hard workers that never ever use social services and will be independent of any help for their entire lives and grasshoppers who never work and completely rely on other people to support them.Report

      • Avatar Jaybird in reply to Brandon Berg
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        says:

        Hey, here’s an article written by Kevin Drum. Again. Here’s the excerpt that we looked at last time we looked at this argument:

        So who does the (white working class) take out its anger on? Largely, the answer is the poor. In particular, the undeserving poor. Liberals may hate this distinction, but it doesn’t matter if we hate it. Lots of ordinary people make this distinction as a matter of simple common sense, and the WWC makes it more than any.

        Now, my conclusions are that this distinction results in stuff like “prison”.

        But, maybe, if we point out that this distinction is one that people shouldn’t make (perhaps that they’re bad to make it), the problem will go away.Report

      • Avatar Mike Schilling in reply to Brandon Berg
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        says:

        It’s a serious question. It used to be simple: the deserving poor had jobs, and the undeserving were on welfare. (After 2008, a lot of them lost their jobs, and the bankers were on welfare. But that’s another subject.) But a lot of jobs pay little enough that you don’t pay federal income tax, which makes you one of the 53% that are moochers. And they also pay little enough that you’re eligible for food stamps, which makes you even more of a moocher. And even the most deserving poor must be stupid and/or lazy, since that’s the only reason to be poor in the US.

        So who are these deserving poor, and what exactly is it that they deserve?Report

      • Avatar greginak in reply to Brandon Berg
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        says:

        Who are you talking at Jay? Who is here is for looking down on poor people or heaping shame on them or throwing them in prison?

        If we talk about solutions who are more likely to favor, oh lets say, funding public defenders or Head Start or gov health insurance all of which strongly benefit poor and working class people. Yeah those of us for those things have to deal with the problem Drum notes, but what are the people who make that nasty distinction proposing. Liberal types, like Drum, have been nothing poor people get crapped on for a few decades now, so this isn’t exactly news.Report

      • Avatar Jaybird in reply to Brandon Berg
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        says:

        But a lot of jobs pay little enough that you don’t pay federal income tax, which makes you one of the 53% that are moochers.

        I don’t think that this is the distinction made by society, necessarily. (I’m just guessing here.) It’s not how much tax you pay vs. how many services you take in. You bring up the bankers getting on welfare. I am pretty sure that the exact same group of people we’re talking about would have preferred that the bankers in question went to jail (and those that didn’t go to jail would lose their jobs and those who didn’t lose their jobs would fail to get bonuses).

        I think it’s about the types of services received and not whether you receive them. Public schools, for example, are a big hit.

        If anything, I’d say that where stuff starts getting fuzzy is around the parts of the social safety net that have strings attached. Food stamps need to be used for *THIS* food and not *THAT* food. It seems to me that “society” loves the idea of buying milk and beans and rice for poor families and they oppose the idea that food stamps be used for cigarettes or Doritos. From there I’d guess that “the deserving poor” are the poor inclined to buy milk and beans and rice and “the undeserving poor” are the poor inclined to buy cigarettes and Doritos.

        Public schools, by comparison, have (relatively, anyway) precious few strings attached. Show up, avoid detention if possible, pass your classes, get a diploma.

        If I had to guess where the (fuzzy) line was, I’d start looking around where the strings go from “perfectly reasonable” to “Now, that’s a little overboard.”

        There also seems to be much more of a lenient attitude toward “The Children” than “Adults”. We need to have food stamps to ensure that The Children have enough nutrition. We need to have WIC. The idea of a single person who decides to just not work because, hey, screw work? That seems to me to be on the other side of the (fuzzy) line.

        Now a lot of people don’t seem to mind saying “If those people can be freeloaders, I don’t see the problem with these people being freeloaders”. Which is, I suppose, fair enough.

        But it doesn’t seem to change the amount of people in prison that much.Report

      • Avatar Jaybird in reply to Brandon Berg
        Ignored
        says:

        Greg, I was talking to LWA who was talking about, here, let me cut and paste it:

        “Its the moral norm of industriousness.There exists a moral norm of being industrious and hard working, of being the sober and wise ant, instead of the foolish and irresponsible grasshopper.”

        It seems to me that part and parcel with that moral norm is the increased likelihood to imprison grasshoppers for things that ants pay fines for. Like, it goes hand in hand. It’s the other side of the same coin. It’s entailed.

        This is, apparently, an avant-garde observation on my part.Report

      • Avatar Chris in reply to Brandon Berg
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        says:

        First, man there were some misunderstandings in this subthread that were in large part a result of the way the threading works. It’s unfortunate, but the only thing I can think to say about it is that people should be a bit more careful (I include myself in this, as I’ve done this before). Oh, and when personal animosities get in the way of recognizing 2500 year-old fables taught to every child since the Archaic period?

        Second:

        You bring up the bankers getting on welfare. I am pretty sure that the exact same group of people we’re talking about would have preferred that the bankers in question went to jail (and those that didn’t go to jail would lose their jobs and those who didn’t lose their jobs would fail to get bonuses)

        This is true, but it also belies the basic narrative being put forth: it is undeniably true that the people most likely to talk about the “undeserving poor” were also really pissed at the bankers in ’09, pissed enough to make it a potential political issue for both parties. In 2015? They may whine about bankers now and then, but their anger has abated despite the fact that the same people are running the show, probably just as recklessly as they did before, having suffered few if any real consequences, the trauma of which would surely be soothed by their current vast wealth. The “undeserving poor,” though? That anger never abates.Report

      • Avatar Jaybird in reply to Brandon Berg
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        says:

        In 2015? They may whine about bankers now and then, but their anger has abated despite the fact that the same people are running the show, probably just as recklessly as they did before, having suffered few if any real consequences, the trauma of which would surely be soothed by their current vast wealth. The “undeserving poor,” though? That anger never abates.

        And I’m pretty sure that this goes back to the whole “industriousness” thing. Whether or not it’s true, bankers have this reputation for showing up for work every day. If we looked closely, I’m sure we’d see that they take hour (or 90 minute!) lunches, knock off around 2 on Fridays to hit the golf course, and take advantage of everything that looks like it might be a holiday if you squint. But, apart from that, they still mostly put in their 35 hours a week in a suit.Report

      • Avatar Kim in reply to Brandon Berg
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        says:

        I think people underestimate exactly how much the bankers did to stabilize the situation.Report

      • Avatar Chris in reply to Brandon Berg
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        says:

        Are bankers known for their industriousness? I mean, “bankers’ hours” is an actual expression.

        I remember when I was a kid you’d hear blue collar workers make jokes like this:

        “Are you a banker?”

        “Hell no, I work for a living.”

        I suppose that view only holds so long as we’re not contrasting bankers with poor single mothers.Report

      • Avatar Brandon Berg in reply to Brandon Berg
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        says:

        Wait…seriously? Investment banking is notorious for the ridiculous number of hours required, on the order of 80-100 per week. I was actually thinking of going into finance about ten years ago, and that’s what turned me off of it.Report

      • Avatar A Compromised Immune System in reply to Brandon Berg
        Ignored
        says:

        @chris and @brandon-berg I think you’re making the error of conflating investment banking and commercial banking.Report

      • Avatar Brandon Berg in reply to Brandon Berg
        Ignored
        says:

        “Bankers’ hours” likely refers to the hours retail banks were open in the days before everything was computerized. They were open to the public for a fairly limited amount of time during the day, and used the rest of the day for processing transactions.Report

      • Avatar Murali in reply to Brandon Berg
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        says:

        @chris

        I have a cousin who is a banker (Citibank). She probably clocks 60hrs a week. My fiancé works at KPMG (audit). During peak periods she clocks 90 hrs a week while she may do 45 hrs during off peak periods. A number of cousins who also worked at KPMG also clocked similar hours. It is unclear if blue collar prejudices are any guide to the actual amount of work put in by people who work in the finance industry.Report

      • Avatar Chris in reply to Brandon Berg
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        says:

        Yes, I know what “Bankers’ Hours” referred to. I was making a joke, but I’d bet you “industriousness” is likely not something most working class people associate with banking, regardless of whether they understand the distinctions between the different kinds. “I work for a living” is probably a common response to this day.Report

      • Avatar Chris in reply to Brandon Berg
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        says:

        Note to self: senses of humor are not standard in libertarian models.

        Second note to self: because it’s not entirely untrue, that joke is going to get you in trouble.Report

      • Avatar Dave in reply to Brandon Berg
        Ignored
        says:

        @brandon-berg

        Wait…seriously? Investment banking is notorious for the ridiculous number of hours required, on the order of 80-100 per week. I was actually thinking of going into finance about ten years ago, and that’s what turned me off of it.

        Bankers hours – 9 to 5…is in 9 am to 5 am.

        100 hours per week is probably low for the analysts in the two-year programs.Report

      • Avatar Jim Heffman in reply to Brandon Berg
        Ignored
        says:

        “I’d bet you “industriousness” is likely not something most working class people associate with banking”

        There’s “industriousness”, and then there’s dum-dum lift-and-carry.Report

      • Avatar Mike Schilling in reply to Brandon Berg
        Ignored
        says:

        People’s assumptions about the poor are important and a vital factor in creating policy. People’s assumptions about financial types are ignorant and should be dismissed.Report

      • Avatar LWA in reply to Brandon Berg
        Ignored
        says:

        @jaybird
        OK, the Kevin Drum piece cleared it up, thanks.
        Actually, the responsibilities of the poor is exactly what I was talking about.
        Everyone has a duty, a moral obligation to work hard and be industrious.
        That means that deliberately loafing, whether it is on welfare or inheritance carries a moral taint.
        I think liberals should be more accepting of this.
        However, its also true that the notion that there are people consciously loafing is wildly disproportionately fixaed on poor people and people of color.
        For example, I mentioned once that there are seminars regularly held about how to manipulate one’s affairs so as to pay little or no taxes, and how to apply for and maximize government contracts and grants.
        Yet there isn’t any public moral opprobrium aimed at this- these people are just considered clever.
        Yet if I held a seminar on “How to hide your assets so as to maximize your WIC, SNAP, and TANF benefits”, it would be a national scandal.

        Often liberals are so focused on playing defense, in justifying benefits to the needy, that our message comes across as overly individualistic. That is, it sounds like the individual has no responsibility to work or contribute.Report

      • Avatar Chris in reply to Brandon Berg
        Ignored
        says:

        Everyone has a duty, a moral obligation to work hard and be industrious.

        This is one of the many places where I get off the “liberal” train, but we’ve had that conversation several times before.Report

      • Avatar Kim in reply to Brandon Berg
        Ignored
        says:

        Speaking as someone who just spent two 15 hour days coding for Fun, I’d rather we say that someone has a moral obligation to be effective, to help fix this broken world. Not “work hard”, but “work smart”. If you can get enough done, it’s okay to relax.Report

      • Avatar Chris in reply to Brandon Berg
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        says:

        That’s… very close to being the right sentiment, Kim. I… feel so weird saying that.Report

      • Avatar Will Truman in reply to Brandon Berg
        Ignored
        says:

        @chris It actually reminds me of a very conservative bumper sticker.Report

      • Avatar j r in reply to Brandon Berg
        Ignored
        says:

        Everyone has a duty, a moral obligation to work hard and be industrious.
        This is one of the many places where I get off the “liberal” train, but we’ve had that conversation several times before.

        This is part of what got me off the conservative train some time ago. It is a pretty classic case of confusing “is” for “ought.”Report

      • Avatar Mike Schilling in reply to Brandon Berg
        Ignored
        says:

        Of course bankers work hard. All those toxic mortgages didn’t write themselves.Report

      • Avatar LeeEsq in reply to Brandon Berg
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        says:

        “Those who do not work, do not eat” is an idea long established in humanity. Even old school communists like Lenin and Mao took this idea very seriously. No society ever really liked the people who looked like or were shirking their responsibilities and making others take up the slack. Its true in capitalist countries and it was true in the socialist ones. This idea reaches back to distant history. Its why the fable of the ant and grasshopper, both versions, is very poignant for a lot of people.Report

      • Avatar Kim in reply to Brandon Berg
        Ignored
        says:

        Mike,
        if the next spot of trouble, financially speaking, wasn’t made by bankers, I don’t see why we should expect the last one was either.Report

      • Avatar Kim in reply to Brandon Berg
        Ignored
        says:

        Lee,
        You’re wrong, of course. Utterly and completely. Shirking is the easiest thing in the world… when you’re in power. Big man doesn’t hunt, he Protects, after all. And gets a harem to boot.Report

      • Avatar Chris in reply to Brandon Berg
        Ignored
        says:

        RT: @mike-schilling “Of course bankers work hard. All those toxic mortgages didn’t write themselves.”

        Hehe… (Sorry, couldn’t resist. Manual retweeting, by the way, is one of the most hotly debated ethical subjects on Twitter.)Report

      • Avatar Kim in reply to Brandon Berg
        Ignored
        says:

        Chris,
        only because people don’t know enough to debate the morality of botting the twitter. Or of selling your accounts to the highest bidder.
        Twitter: easy money for the witty amongst usReport

      • Avatar Patrick in reply to Brandon Berg
        Ignored
        says:

        As a microcosm of the political sphere, this whole subthread was fascinating. Just for the record, though:

        The idea of a single person who decides to just not work because, hey, screw work? That seems to me to be on the other side of the (fuzzy) line.

        Not me!

        Let the Dude abide. I’d rather just bowl with the guy from time to time. If I had to work with him I’d have to kill him outside of the first six hours or so.Report

      • Avatar Troublesome Frog in reply to Brandon Berg
        Ignored
        says:

        @patrick

        I’m with you on that. There’s a category of people who just aren’t all that productive and wouldn’t be all that productive even if we showed up every day with the lash to get them going. Able bodied people who drop out of the workforce to live on a minimalist income subsidy are probably mostly in that category. It’s not like biomedical engineers and trauma surgeons will be doing it unless we really screw up when we decide the size of the check.

        I also suspect that petty criminals drop out of the low-paying petty criminal workforce at about the same rate as legitimate minimum-wage do given similar incentives. No data on that one, but petty crime is risky and doesn’t usually pay very well, and incentives are incentives.

        We just have to get over the annoyance at the subset of people who scam the system and call it a cost of doing business. I’d rather pay those people to do nothing and simplify the system so it takes better care of the needy than to add a bunch of bells and whistles that cost money and only weed out a subset of the leeches. We’ll make some of it up in reducing enforcement / distribution costs, and the social cost seems pretty negligible.Report

  20. Avatar KatherineMW
    Ignored
    says:

    Having some places where we’re willing to interfere with the market can improve consumer choice as well as improving the situation for local and independent businesses and work out very well. One of my big examples is Granville Island in Vancouver, BC: http://granvilleisland.com/node/1546.

    It used to be an industrial area, before industrial areas started closing down; after that it became ugly and derelict. It’s now owned and run by the Canada Mortgage and Housing Corporation (a part of the Canadian government), who are advised by the Granville Island Trust (which has members from residents on the island and the surrounding area). It’s full of fantastic artistic, craftsy, clothing, and food stores, and is one of the most popular places in Vancouver for both residents and tourists. If it was completely uncontrolled and free-market, we wouldn’t have this place; we might have nothing (because Granville Island is kind of out of the way, and not a place people would go unless they had a specific draw), we might have chain stores and tourist traps, but we wouldn’t have this vibrant and much-loved community, tons of local businesses, and one of the city’s favourite places to shop.

    Now, does the government have the administrative ability to turn all of Vancouver into Granville Island? No, and I don’t think it should. But there’s no need to talk as if government can’t do anything right and its interventions in the market only make things worse. Because when you look around yourself, and around communities, that’s simply not the case.Report

    • Avatar Brandon Berg in reply to KatherineMW
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      says:

      @katherinemw Many, if not most, large cities have artist/bohemian communities. To the best of my knowledge, they are not generally created by legislative fiat.Report

      • Avatar Brandon Berg in reply to Brandon Berg
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        says:

        More generally, it’s a fallacy to point to something that the government created that you like and say that the government did a good thing. It’s the classic problem of the seen and the unseen. The alternative is not Granville Island vs nothing, or Granville Island vs some strawman, but Granville Island vs what would actually exist there.

        I believe that Vancouver is one of the most expensive housing markets in North America. What if, instead of a “tourist trap,” housing had been built there? How much “vibrancy” justifies making it harder for people to live there?Report

      • Avatar zic in reply to Brandon Berg
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        says:

        Many, if not most, large cities have artist/bohemian communities. To the best of my knowledge, they are not generally created by legislative fiat.

        Nope. Most large cities have artist/bohemian residents, often clustered into lower-priced neighborhoods because artists typically don’t earn a lot of money for their efforts.

        Nearly any ‘artist community’ in a large city will have some sort of legislative fiat creating it; public money put toward lower rents for studio and sometimes living space plus public display/performance space. And generally, the return on that public investment is mixed, the incubators tend to attract money and creative businesses to the neighborhood, and they tend to foster individual artists, but to fail at launching arts-based businesses in an entrepreneurial sense. (They attract them to the area, but they do not foster them,)

        http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2553466 to download a study if you want to read more. And yes, this is creative economy stuff.Report

      • Avatar Mike Schilling in reply to Brandon Berg
        Ignored
        says:

        If government does something bad, it’s because government is evil.
        If government does something good, it’s less good than what the market would have done.
        If markets do something good, it’s because yay markets
        If markets do something bad, you’re an elitist for thinking that.Report

      • Avatar Stillwater in reply to Brandon Berg
        Ignored
        says:

        Close Mike.

        If markets do something bad, you’re an elitist for thinking that it’s because government won’t get outa the way.Report

      • Avatar Jaybird in reply to Brandon Berg
        Ignored
        says:

        You should see what I’m told when I point out that Marxist economies are responsible for a couple of mass graves.Report

      • Avatar Mike Schilling in reply to Brandon Berg
        Ignored
        says:

        Of course lots of people freeze to death in Sweden.Report

      • Avatar greginak in reply to Brandon Berg
        Ignored
        says:

        Seen vs unseen….ugh, there is a fair point in that argument but it still ends up being to close the emperors new clothes to be an actual good argument. Anybody of any ideology can always picture something unseen that would be better then what is seen.Report

      • Avatar greginak in reply to Brandon Berg
        Ignored
        says:

        Yeah Marx….hell in this day most people aren’t familiar with the Good Marx’s let alone even having a clue about the Bad Marx.Report

      • Avatar Chris in reply to Brandon Berg
        Ignored
        says:

        Materialism: Killing people since forever.Report

      • Avatar Citizen in reply to Brandon Berg
        Ignored
        says:

        Take away all the peoples material, see how long they live.Report

      • Avatar Chris in reply to Brandon Berg
        Ignored
        says:

        ‘Tis true, people’s gotta eat and people’s gotta drink and people’s gotta lie down at night and sleep.Report

      • Avatar LeeEsq in reply to Brandon Berg
        Ignored
        says:

        I think that geography determines whether or not a city has an artist/bohemian community. In the United States, they seem a lot more common in the cities that grew big before the automobile. The big, post-war suburban cities like Phoenix, Dallas, Houston, and the rest of the Sun Belt seem lacking. Los Angeles and maybe San Diego are the exceptions to the rule. Artistis in the Sun Belt seem more drawn to rural areas than cities for some reason. Since the urban form seems to really determine whether or not there is a bohemian community, land use regulation does seem to play a part in whether or not bohemia exists.Report

      • Avatar Chris in reply to Brandon Berg
        Ignored
        says:

        Someone’s obviously never been to Montrose or Deep Ellum.Report

      • Avatar Brandon Berg in reply to Brandon Berg
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        says:

        @greginak Katherine was stacking the deck by postulating that asserting that something worse would have been built there. Putting aside the fact that her choice of a loaded phrase (“tourist trap”) was doing most of the heavy lifting there, the reality is that we really don’t know what would have been built there. Simply assuming it would have been something worse really is a fallacy, and not just in the “technically a fallacy, but probably right anyway” sense.Report

      • Avatar Brandon Berg in reply to Brandon Berg
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        says:

        @zic That paper doesn’t support the claim you made in the preceding paragraph. For one, it says that the first incubator was established in 1986. It does say that in one paper examining incubators in Europe, all of the incubators that were examined had some government funding, but that’s specifically referring to intentionally created incubators, as opposed to communities spontaneously arising because it’s a cheap part of town and artists like to live where other artists live.Report

      • Avatar zic in reply to Brandon Berg
        Ignored
        says:

        as opposed to communities spontaneously arising because it’s a cheap part of town and artists like to live where other artists live.

        I challenged the very concept; in most cases of a concentration of artists, there was some reason to concentrate — clubs where musicians play, a school or university with a strong arts program, a center offering display/performance space and or studio space, or a tourist-destination providing a market (Appalachia/New Mexico, for instance).

        I think this is more a stereotype, like the sudden inspiration or lone genius, and really doesn’t give much credence to the effort, study, and collaboration required to actually produce art.Report

    • Avatar Kazzy in reply to KatherineMW
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      says:

      @katherinemw

      What do you say to the person whose tax dollars helped pay for the island but who then becomes priced out of his apartment because of the resultant increase in property value for the area?Report

      • Avatar ScarletNumber in reply to Kazzy
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        says:

        “Nice to see ya, wouldn’t wanna be ya”?Report

      • Avatar zic in reply to Kazzy
        Ignored
        says:

        what about the sports stadium?

        the park?

        the new and improved sidewalk, with trees in it?

        These all can do the same thing, @kazzyReport

      • Avatar Kazzy in reply to Kazzy
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        says:

        @zic

        I steadfastly oppose publicly subsidizing sports stadiums.

        I’m not saying the government shouldn’t invest in quality-of-life improvements. Only that they are not without downside and we should be mindful of those downsides and who bears the brunt of them.

        Maybe the project Katherine describes was worth it. But we need to do more than say, “Well, THESE people love it!”Report

      • Avatar zic in reply to Kazzy
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        says:

        I’ve been to Granville Island. It was a long time ago, but it didn’t look like a residential neighborhood; it was a worn out industrial area, run down warehouses and marine-based businesses, etc., and had obviously been a bleak no-man’s land prior to this investment.Report

      • Avatar zic in reply to Kazzy
        Ignored
        says:

        A few more thoughts:

        http://en.wikipedia.org/wiki/Granville_Island

        This was a declining industrial area, with all the problems such areas face; particularly ground and water contamination. Here, we get into one of my huge free-market pet peeves; a business that sets up shop, and over the years, degrades a location, and finally fails, leaving others to clean up the mess.

        So instead of displaced residents, we have a big chunk of a city reclaimed after abuse by free marketers.Report

      • Avatar Kazzy in reply to Kazzy
        Ignored
        says:

        @zic

        My point is simply that all these actions have costs and we should always be asking, “What costs? Who pays them? Who benefits?” This is important information.

        And I believe in holding people/companies accountable for damage done to land/the environment.

        As a general rule, I struggle with public funds directly supporting private enterprise. If you want to use tax dollers to pay for theater houses or art galleries or sports arenas, then every member of the public should have free access to them. This is why I see public parks and free museums differently than theaters.

        And even those should be subject to a thorough cost benefit analysis.Report

      • Avatar Stillwater in reply to Kazzy
        Ignored
        says:

        And even those should be subject to a thorough cost benefit analysis.

        Does “benefit” include people’s subjective preferences or is it restricted to a purely monetary money-in/money-out accounting? If a bunch of people are happy to subsidize reclamation of blighted neighborhoods without any consideration of ROI, are they acting without appropriate justification?Report

      • Avatar zic in reply to Kazzy
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        says:

        @kazzy

        I can tell you that many (if not most) of the redevelopment projects I’m aware of that received public money generally involved sites that were contaminated. The EPA website has an enormous list of brownfields; and most of these sites are not going to be privately developed because the previous owner (sometime government itself, particularly military sites,) left them in such bad condition. The town upriver from me (in NH,) had a paper mill that’s now partly shut down, and nobody would restart the minimal operations going because the bottom of the river bed there was such a problem. NH eventually had to take ownership, and so environmental responsibility for the river bed, before the mill could be restarted, bringing back a few jobs to an area suffering severe economic blight. (Berlin, NH is a beautiful and struggling town; the whole northern part of the state is the flip of the southern part, where the economy has become more part of the metro-Boston economy.)

        This is incredibly common. So while we’re discussing those cost-benefits, the externalities placed on communities by free markets needs to be seriously addressed. My personal preference is that subsidized arts — given how difficult it is for artists to survive for the years necessary to master skills and produce a body of work — is a great investment as compared to brownfields.

        My BIG gripe here is that there’s all a tizzy about giving a wee bit of aid to the artist and jack shit nothing about the businesses that didn’t clean up after themselves. Personally, I think polluting industries should be required to carry insurance that would pay for that clean up if/when they fail, because they have a dismal record of doing it themselves, and we’re left holding the bag and griping about artists.Report

      • Avatar Kazzy in reply to Kazzy
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        says:

        @stillwater

        Both costs and benefits include non-economic/intangible considerations. If a park makes one dude begrudingly pay 1% more in taxes but makes 999 of his neighbors (who also paid the tax hike) happy, I think that is likely a good project.

        But if we are reclaiming our tenth city block and the previous nine all developed hipster restaurants and art galleries and locals who have little interest in either are paying tax hikes and rent increases, that is probably a bad project. Not all of it, mind you… But maybe we stop at four blocks.

        I’m not advocating for any particular type of project. I’m just railing against the kneejerk response of “More hip restaurants = win-win-win!”Report

      • Avatar KatherineMW in reply to Kazzy
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        says:

        It was an industrial area prior to the redevelopment, not a residential one. A fairly derelict industrial area, because market mechanisms ceased to produce enough demand to keep the area going.Report

      • Avatar Patrick in reply to Kazzy
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        says:

        I steadfastly oppose publicly subsidizing sports stadiums.

        Just as an aside, I oppose publicly giving money to build a stadium myself.

        But you can’t get rid of subsidizing sports stadiums. Their existence is a subsidy. Why?

        Some folks get part of the revenue, but the living cost for the folks that live right around the stadium usually aren’t part of those folks. The existence itself of any large facility imposes externalized costs on the folks that live, work, and play around that facility. Some bennies, too, but definitely costs.

        (Just ask anybody who lives near the Rose Bowl.)

        The question: “is the tradeoff worth it” is relevant.Report

    • Avatar Brandon Berg in reply to KatherineMW
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      says:

      It’s also worth noting that when you give government the power to override consumer choice in these matters, you take the good with the bad, and Public Choice Theory tells us that we should expect more bad than good. For every Granville Island, we get a couple subsidized stadiums and a few sweetheart real estate deals. Who do you think is better at getting what they want from government? Artists, or real estate moguls?

      It’s a bit of a head-scratcher that calls to put more of the economy under government control tend to come from those who are most vocal about government being in the pocket of business interests.Report

  21. Avatar Cardiff Kook
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    says:

    Markets are one of many PROBLEM SOLVING SYSTEMS. Politics, math, science and arm wrestling are others, each with its pros and cons, and each with its particular domains of problems which it handles well or not.

    Assuming a reasonably efficient market exists (for argument’s sake) then increasing rents is a signal with ramifications within a market. In this case the signal is that other renters who are more valued could better use this space. Another signal is that additional rental space should be built to capture these rents. And another is that stores now unable to afford the rent in this district should use their creativity to find alternative ways to distribute their goods and services, or find new markets which allow them to operate efficiently.

    The value of using markets is that it is a decentralized problem solving system on the creation and allocation of scarce resources which leads to us living at standards 30 to 100 times higher than those not using them. It leads to toy stores, software companies, San Franciso and rich country people like us sitting around for hours a day debating stuff like this. It is the water and we are the fish.

    That said, there are other problem solving systems. It is totally appropriate for people of a city to say they want to pass regulations which override market signals. One way is to use politics to collect taxes to subsidize preferred businesses. Another is to pass regulations. Each has pros and cons.

    On a deeper level, citizens can ask what they have done which limits growth in retail space so severely. Often times past interference with markets and market signals leads to snowballing effects.Report

    • Avatar Mike Schilling in reply to Cardiff Kook
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      says:

      This is a really good comment.Report

    • Avatar Tod Kelly in reply to Cardiff Kook
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      says:

      @cardiff-kook Thank you for this comment. It’s everything I wanted to say in a rebuttal post, and stated much better than i would have done.Report

    • Avatar Citizen in reply to Cardiff Kook
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      says:

      “The value of using markets is that it is a decentralized problem solving system on the creation and allocation of scarce resources which leads to us living at standards 30 to 100 times higher than those not using them.”

      On this point, how much value is placed in seperating the need/y from their means of production? And in that, who’s standards of living are increasing?Report

      • Avatar Chris in reply to Citizen
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        says:

        A rising tide raises all ships.

        We’re all better off, and this is only possible because rich kids on the Upper East Side (of Manhattan or Dubai) continue to get more G6’s.Report

      • Avatar Brandon Berg in reply to Citizen
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        says:

        On this point, how much value is placed in seperating the need/y from their means of production?

        Would you care to explain why you believe that this is a thing that happened?Report

      • Avatar Kim in reply to Citizen
        Ignored
        says:

        Brandon,
        surely you’ve heard of UBER…Report

      • Avatar Chris in reply to Citizen
        Ignored
        says:

        I assume he just meant the, not their means of production.Report

      • Avatar Mike Schilling in reply to Citizen
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        says:

        You’re overlooking the great economic benefit we all reap because improved algorithms allow Trader A’s orders to arrive a millisecond before Trader B’s orders. The same technology could be used to save lives!Report

      • Avatar Citizen in reply to Citizen
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        says:

        Kim, Chris an Mike nailed it on all different levels, nothin’ really more to add to that.Report

      • Avatar Kim in reply to Citizen
        Ignored
        says:

        citizen,
        they’re making rhetorical points. I’m making a more intellectual point.Report

      • Avatar j r in reply to Citizen
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        says:

        If the point is that market economies exist by alienating people from the means of production, that would imply the existence of some pre-industrial period in which people were not alienated and were able to harvest the necessary goods and services directly from the source, without the imposition of a market economy.

        The problem for this view is that we know what pre-industrial places look like and they ain’t all that pretty.Report

      • Avatar Kim in reply to Citizen
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        says:

        jr,
        do you really want to read the 30+ page essay on how the Industrial Revolution and Technology affected employment, and will do so for the nearterm future? It’s long, extensive, and bloody dry.
        On the bright side, fewer accountants predicted!Report

      • Avatar Chris in reply to Citizen
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        says:

        If the point is that market economies exist by alienating people from the means of production, that would imply the existence of some pre-industrial period in which people were not alienated and were able to harvest the necessary goods and services directly from the source, without the imposition of a market economy.

        No, it wouldn’t (and pre-capitalist economies are covered in the literature we’re all not referencing directly), but recall that the problem with capitalism, in that analysis, is not merely that the worker is separated from the means of production, but that he or she is also separated from the means of survival or subsistence. This has a lot of implications, not the least of which is creating problems for LWA’s work imperative.Report

      • Avatar LWA in reply to Citizen
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        says:

        On Chris’s comment, one of the justifications for the right to own property is sustenance, the intuitive understanding of a natural right to work a piece of land and claim ownership of its fruits.

        When industrial processes separate our work from the land and ability to sustain ourselves, it does create a dilemma- the worker is exhorted to work, yet work is not under his control.
        We all saw that in a very literal way in 2008 when due to factors far beyond anyone’s control, work vanished.

        If we want to keep the moral norm of industriousness (and we should!) and keep a highly industrialized global connected economy (and we should!) then we need to figure out a way by which workers can gain more control over their ability to sustain themselves.Report

      • Avatar Citizen in reply to Citizen
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        says:

        @ Kim
        I never said your point wasn’t intellectual. That’s one of the levels I was referring to.

        @ jr
        Go back to a time in the market economy when rents weren’t the bigger part of the game. (If my hunch is correct it’s were we will end up anyhow.)

        @ Chris
        Yes it should have been “the”, you know my stripes a little to well, haReport

      • Avatar j r in reply to Citizen
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        says:

        @chris

        I am tangentially familiar with the arguments, but the arguments don’t square with the historical and anthropological method. At least they don’t square to my knowledge. Always happy to consider any links that you can throw my way that might change that.

        @citizen

        I’m not quite sure what you mean by “all about rents.” Economic life has always been to some extent about rents, even when the thing that allowed you to share in economic life was the patronage of some big man or membership in some clan.Report

      • Avatar Citizen in reply to Citizen
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        says:

        @ jr
        When there is no reason to ask for rents what does your market look like?
        This isn’t, big man, clannish stuff.

        More like a pound of ham for a loaf of bread. Kill currency for a minute and think about it.Report

      • Avatar j r in reply to Citizen
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        says:

        Kill currency for a minute and think about it.

        Some people tried that once. It didn’t work out so well.

        Money evolved for a reason and exists for a purpose. There is always a temptation to believe that economic middlemen are all rent-seeking leaches (and some of them are), but they also evolved for a reason and exist for a purpose.

        And like I said above, if you’ve got real-world examples of how such an economy might work, I am all ears.Report

      • Avatar Chris in reply to Citizen
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        says:

        J R, this is all pretty basic Marxism. Marx’s later writings (Capital, e.g.) talk a lot about it, and there’s actually a manuscript titled “Pre-Capitalist Economic Formations,” which I’m sure is online. There was a big debate about transitions, in which the means of production figured prominently, in the 1950s and 60s, usually referred to as the Dobb-Sweezy debate. There’s also the Althusserians (including Althusser himself, but Meillassoux in particular) who talked about transitions and “ariticulations” or the means of production. And so on. The basic idea is about as basic as it gets in Marxism, and the debates from the 50s through the 80s about pre-capitalist to capitalist transitions are basic late 20th century Marxism (the stuff that generally recoils from Stalinism and by extension the Soviet experiment in general).

        You’ll note that the argument isn’t even that all (or most) pre-capitalist economies weren’t exploitative in some way related to the means of production, or that exchange didn’t exist (though its relation to value, the claim is, differed because the relationship between worker and the means of production differed), or that people could produce everything that they need, or that there weren’t divisions of labor with differing implications depending on the status of property, the community, the family, and so on. I don’t think the basic claims are really all that controversial, though interpretations of them obviously are, even within Marxist sociology and history.Report

      • Avatar Citizen in reply to Citizen
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        says:

        About the only thing that looked good to me was Josiah Warrens stuff. When markets, currencies and labor end up at the bottom of the hill after going sideways, typically hour for hour, product for product exchanges are created.

        Besides purchasing services and products, what good is currency to a commoner? Middlemen and currency may well become a unacceptable inefficiancy in the future market.Report

      • Avatar Cardiff Kook in reply to Citizen
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        says:

        @citizen

        “On this point, how much value is placed in seperating the need/y from their means of production? And in that, who’s standards of living are increasing?”

        There is no necessary separation of the worker (I assume the needy intends to work) from the means of production. Thousands of services exist where the worker can easily start their own taco stand, start their own surf photography service, drive a car for hire, braid hair, groom pets, etc, etc. Anyone with the slightest amount of initiative could become self employed by offering services to all the wealthy people of western nations (and by wealthy I mean in relative terms all of us). This assumes we don’t pass regulations or licensing requirements against self employment of course.

        That said, specialization and division of labor, including between owners of capital and labor, potentially benefit all involved via increased productivity. It is a big assumption to assume the worker wants to own the capital, considering trade offs they face.

        The 30 to 100 times increase in standard of living is the average increase over pre capitalist standards of living generated from higher productivity. As I said, it is what is funding the toy stores, the capital, the time we spend on the Internet and the technology and incentives creating the Internet and the toys. It also funds the safety nets and transfers for those needy and unable to work, and it can fund the state which chooses to subsidize bookstores for non market reasons.

        If someone wants to go back to the good old days of serfs or foragers, I support their decision.Report

      • Avatar Citizen in reply to Citizen
        Ignored
        says:

        This isn’t about good old days, this is about an extended era of peak rent seeking, and the workers of the world saying piss off to capitalism3.

        If you think it’s something to bask in the glory of, I suggest you recalibrate.

        In the end it doesn’t matter, whatever capitalism you are using a “wanters going to want”. Vikrams right, we don’t know anything so much better.Report

      • Avatar j r in reply to Citizen
        Ignored
        says:

        I want to offer a response, but this is a good time for me to just be honest and admit that I have no idea what @citizen is talking about.Report

      • Avatar Citizen in reply to Citizen
        Ignored
        says:

        No worries jr, I thought you were all ears.
        I should really offer more hat than maddness, but it would take a week to unpack what is involved in a taco stand.Report

      • Avatar Chris in reply to Citizen
        Ignored
        says:

        I remember you linked to something with an explanation of what “capitalism3” is, but I can’t find the link.Report

      • Avatar Citizen in reply to Citizen
        Ignored
        says:

        https://www.youtube.com/watch?v=v6PO4i-3xmw

        Advocates of Freed Markets Should Oppose CapitalismReport

    • Avatar James K in reply to Cardiff Kook
      Ignored
      says:

      @cardiff-kook

      Processes are definitely the right way to think about this sort of thing.Report

    • Avatar Michael Cain in reply to Cardiff Kook
      Ignored
      says:

      Indeed. Markets are an excellent distributed way to solve unconstrained optimization problems. But that’s no guarantee that the solution is the most socially desirable one. The really hard part is how to impose constraints on the solution that the market delivers. Half of the arguments on this site are, at some level, about how to impose constraints.Report

  22. Avatar Oscar Gordon
    Ignored
    says:

    With regard to the thread above where Jaybird is talking about deserving & undeserving poor, and the thoughts about the obligations of those who work as opposed to those who receive benefits, some thoughts:

    Lost in all this is any talk of opportunity (costs & availability of). If society in general has an obligation to work & contribute (we may work for our own benefit, but the product of that work usually contributes to a greater purpose that ostensibly is toward some good), then those who are not working & are receiving public benefit (i.e. the poor) have an obligation to work toward joining the larger population of workers. As a society, it is in our interests to maximize the available opportunities, and minimize the costs/barriers to taking advantage of those opportunities.

    This maximizing of opportunity can take a number of forms, including but not limited to:
    providing care support to free up time (child/elder/other care)
    removing protectionist barriers to entry
    minimizing the stigma of a criminal record
    a system of free formal education for everyone forever
    a system of modern guilds & apprenticeships
    a vastly expanded program of employer &/or union compensated training & education
    or some combination thereof

    When it comes to the deserving poor, we like to focus on the “Epic Hurdles Overcome” story (because it’s a good story), and the “Lazy Moocher” story (because it just offends the sensibilities) and then we (as a society) like to paint the whole social class with this big brush and find them wanting. Of course, we never think to ourselves what we would be like under similar circumstances, having very limited resources & opportunities. Especially if you grew up knowing you had resources & opportunities, or at least how to get them. You can put yourselves halfway into the equation, but you can’t fathom the resignation to your lot in life, either because you can’t see a way out, or because you’ve been told for so long that being poor is what you deserve/all you’ll ever hope to achieve.

    Geez, this could be a post all it’s own…

    I heard this a few weeks back. Not all of it, but enough of it. It resonated with me, a lot, because I could so put myself in those kids shoes. I mean truly I could. If I hadn’t made a rather desperate choice to join the Navy, if I hadn’t got in the motorcycle wreck that gave me the resources & opportunities, if I hadn’t married a woman who believed in me a WHOLE lot more than I ever did…

    We create our own poor in dozens of ways, and then complain when they are poor.Report

    • Avatar greginak in reply to Oscar Gordon
      Ignored
      says:

      Good comment Oscar, especially about the two popular stories about the “poor.” It easy to find exemplars of each story but both obfuscate more than clarify. I’ve known people who could fit each category but the labels are more about backing up a larger ideas then understanding the varied roads that people take.Report

    • Avatar Jaybird in reply to Oscar Gordon
      Ignored
      says:

      We create our own poor in dozens of ways, and then complain when they are poor.

      A great point.

      One of the biggest things that is overlooked when it comes to issues of class is that each class has a system of rewards that incent people to stay in the class that they’re in and punish them if they’re obviously leaving and this is true for people going up as well as going down.

      It’s very, very easy for someone in the middle class to ask “why would someone from the lower classes not try to do middle classy kinda things?” without realizing that there are just as many existential rewards for being and remaining a member of a lower class community as there are for being and remaining a member of a middle class one. Also: as many scary punishments.Report

      • Avatar Oscar Gordon in reply to Jaybird
        Ignored
        says:

        Exactly. If you listen to the whole TAL piece I linked to, one of the kids that is followed is asked why she didn’t go to University. The fundamental reason is that she had a shot at a scholarship but lost it during the final sorting (no fault of hers), and that loss just reinforced a childhood steeped in the idea that she’ll never be able to ascend the ladder, that she’ll be the person serving the rich kids, and not one of them, undermined her drive to do better.Report

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