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Fishing Problem(IE the problem with capitalism)
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Author Topic: Fishing Problem(IE the problem with capitalism)  (Read 11323 times)
Psy
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« Reply #15 on: January 10, 2009, 15:27:18 EST »

Read about The Tragedy of the Commons.

What you have rediscovered is why property rights are so necessary and important to the functioning of capitalism.

Even if all the fishermen had their own fish stocks they would still be dealing with competing with each other and they would all over fish as they have no choice as if they don't they risk being bought out by those that over fish.  To put it another way if each capitalist had a goose that laid golden eggs all the capitalists would kill their goose to get try to gold faster as each capitalist worried their competitors will do it and use their extra golden eggs to accumulate their goose if they don't kill their goose to get more golden eggs.
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wodan46
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« Reply #16 on: January 10, 2009, 16:34:28 EST »

That is really my point.  Tragedy of the Commons or not, Capitalists will seek short term profits even if it incurs long term costs, especially since in most circumstances the Capitalists can avoid being hit with the costs altogether, typically by simply leaving the market sector when the resource has been depleted, or through nasty externalities.  If they don't, someone else will, and they will out-compete them.  In short, for an unfettered Capitalist, the best choice is always to exploit the system to the best of their power.

The chips though are cheap, much cheaper than they were in the past.  Why?  Because property rights apply to land.  A farmer can only gather potatoes from his own land.  What he does with that land determines if he prospers or does not.

In the farming example, a farmer will own their property for a long time, and as a result, they will consider long term costs.  On the time scales of which farming operates, depleting a resource will not generate significant gains, while it will destroy profits occuring in the near future.

However, if a corporation believed that they could make worthwhile profits by utterly depleting an agricultural area, they would do so.  You know why?  Because unlike the farmer, their prosperity is not dependent on what they do with their land.  Even if they leave it a barren wasteland, if they made a good enough profit, they can simply move on to the next resource.  It is this mobility that makes Corporations indifferent to long term consequences.  They can simply grab the short term profit and run away before the long term costs start piling in, costs which ultimately get paid by the society who has to deal with yet another resource being depleted.
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Heq
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« Reply #17 on: January 10, 2009, 17:10:18 EST »

Not actually true for most publically traded companies.

Brand value is one of those shonky things which compnaies use to keep their books in the black, and the actions you state would cause brand distruction (if they were cuaght) which would pitch the company (probably) into the red, causing shares to devalue and thus the company to lose capital with which it can invest.  Now while this means they could buy-back shares, it takes to option of reissuance of shares off the table and probably results in the CEO and the rest of the corp heads getting tanked by miffed shareholders.
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Psy
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« Reply #18 on: January 10, 2009, 17:17:14 EST »

Not actually true for most publically traded companies.

Brand value is one of those shonky things which compnaies use to keep their books in the black, and the actions you state would cause brand distruction (if they were cuaght) which would pitch the company (probably) into the red, causing shares to devalue and thus the company to lose capital with which it can invest.  Now while this means they could buy-back shares, it takes to option of reissuance of shares off the table and probably results in the CEO and the rest of the corp heads getting tanked by miffed shareholders.
That assumes competitors are not also depleting resources and not also throwing huge PR resources to downplay what the effect the industry as a whole is doing.
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wodan46
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« Reply #19 on: January 10, 2009, 19:29:02 EST »

Not actually true for most publically traded companies.

Brand value is one of those shonky things which compnaies use to keep their books in the black, and the actions you state would cause brand distruction (if they were cuaght) which would pitch the company (probably) into the red, causing shares to devalue and thus the company to lose capital with which it can invest.  Now while this means they could buy-back shares, it takes to option of reissuance of shares off the table and probably results in the CEO and the rest of the corp heads getting tanked by miffed shareholders.
Correct.  However, not all resources available to a company are brand names, not all companies are concerned with brands at all, and the interest of capitalists and companies are not always the same thing.
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Heq
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« Reply #20 on: January 10, 2009, 21:32:09 EST »

Yeah, I think I'm objecting to your shimmey-step from capitalists to corporations, as many corps are not fundementally capitalistic at all.  Many have the view that they are entitled to a "fair" profit, but the heart and soul of the business is elsewhere.
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wodan46
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« Reply #21 on: January 11, 2009, 00:26:22 EST »

Yeah, I think I'm objecting to your shimmey-step from capitalists to corporations, as many corps are not fundementally capitalistic at all.
Uh, I just said the exact opposite, by clearly specifying that capitalists and corporations are not intrinsically aligned or anything.

The problem I'm focusing on is a one of capitalism, not corporations.  Capitalists are motivated to seek short term profits or they will be replaced by those that do, even if it incurs long term costs to society or potentially even the Capitalists themselves.  Those situations aren't always going to be present, but they occur often enough.  As a result, the supposed wonderfulness of the free market is shown to be a lie: it supposedly causes the people most capable of being prosperous and productive to rise to the top, and thus result in major gains for society, but in actuality, those who are most capable of short term success will rise to the top, and the best way to achieve that short term success is by overtaxing the system in a way that will result in severe costs at a later point.  Instead of allowing people who are inherently productive to rise to the top, it lets people who are inherently destructive rise to the top instead.
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Current
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« Reply #22 on: January 12, 2009, 13:53:28 EST »

I'll start by emphasising that what we are discussing here is economics.  In earlier threads Wodan has disparaged the entire idea of economics as an area of study.  However in this thread Wodan has made many economic theories.  What I think this establishes is that economic is important.  Wodan, you have said that in your view economics is not a science and cannot be a science.  But, since you have hypothesised about it don't you think that examination of those hypothesis is needed?  In that case it doesn't really matter whether it is a "science" or not to you or anyone else, it is obviously an area of study worth of pursuit.

Quote from: wodan46
That is really my point.  Tragedy of the Commons or not, Capitalists will seek short term profits even if it incurs long term costs, especially since in most circumstances the Capitalists can avoid being hit with the costs altogether, typically by simply leaving the market sector when the resource has been depleted, or through nasty externalities.  If they don't, someone else will, and they will out-compete them.  In short, for an unfettered Capitalist, the best choice is always to exploit the system to the best of their power.

Quote from: Current
The chips though are cheap, much cheaper than they were in the past.  Why?  Because property rights apply to land.  A farmer can only gather potatoes from his own land.  What he does with that land determines if he prospers or does not.
In the farming example, a farmer will own their property for a long time, and as a result, they will consider long term costs.  On the time scales of which farming operates, depleting a resource will not generate significant gains, while it will destroy profits occuring in the near future.

However, if a corporation believed that they could make worthwhile profits by utterly depleting an agricultural area, they would do so.  You know why?  Because unlike the farmer, their prosperity is not dependent on what they do with their land.  Even if they leave it a barren wasteland, if they made a good enough profit, they can simply move on to the next resource.  It is this mobility that makes Corporations indifferent to long term consequences.  They can simply grab the short term profit and run away before the long term costs start piling in, costs which ultimately get paid by the society who has to deal with yet another resource being depleted.
In the western world a farmer is a capitalist even in the strictest sense of the term.  He or she owns capital equipment in the form of farming land and the equipment needed to farm.  The farmer buys stock, capital equipment and labour.  The farmer sells the resulting crops.  There is little difference between a corporation owning a farming business and an individual owning that business.

If a company farming an area of land were able to "simply move on to the next resource" as you put it then why can't the private farmer?  An individual farmer is not tied to his or her land.  He or she may sell it and move elsewhere, both have similar mobility.

The flaw in your argument is that it is not possible for the individual farmer or a company that owns a farming business to pass on the long term costs to society as you claim.  An area of farm land is a piece of capital.  The price that it commands depends on what use can be made of it.  If it yields 4 tons of barley per year when farmed in one particular way then it will command a greater price than if it yields 3 tons of barley per year when farmed similarly.  Naturally the price the land commands is much higher than the annual profit that can be made from it.

So, there is no means by which a business may avoid the repercussions of it's actions.  If it depletes the land that it owns then how can it sell that land to another later?  The land will only command a price if it can be used.  If it can't be used then it is worthless.  If the business only owns this land then that business too is worthless.

If there is some sort of externality then the situation is different.  If a farmers my gain by abusing the land of another by polluting it for example.  But such things are policed these days, as they should be.

Quote from: Psy
Even if all the fishermen had their own fish stocks they would still be dealing with competing with each other and they would all over fish as they have no choice as if they don't they risk being bought out by those that over fish.  To put it another way if each capitalist had a goose that laid golden eggs all the capitalists would kill their goose to get try to gold faster as each capitalist worried their competitors will do it and use their extra golden eggs to accumulate their goose if they don't kill their goose to get more golden eggs.
You have made the same error as Wodan.  The geese that lay golden eggs are worth a huge amount.  Much more than the golden eggs themselves because each goose can lay many such eggs, many times more.  Remember one capitalist who owns a goose can decide whether he sells it or not.  His goose cannot be "accumulated" without his permission.  With that in mind the capitalist who is most careful with his goose will do best in the long run.

The following quote I've moved from the thread about Blagojevich
Quote from: wodan46
Quote from: Current
Quote from: wodan46
That every time corporations are given free rein, they run everything to the ground, then loot the remains?  The fishing example I offered earlier comes to mind.  The fisherman who decides to overfish in the short term will outcompete his competitors, even though this will result in there being far less food in the long term, but the fisherman has to choose between either that or losing, and most likely it won't be the one who has to reap the consequences in the first place.
Fishing though is not really a free market since there is no ownership of fisheries.  Do farmers simply dig up all the potatoes in the ground and sell them without replanting?  No, of course not.

The situation with Fishing is what is called a "Tragedy of Commons".  Because fish are common property they are plundered.  Because of the nature of the sea there is no real solution to this problem.  Decisions about fishing and fishing quotas will probably always have to be made in political ways.  The situation in fishing is not the normal case though, the normal case is that represented by farming, and in that case the answer to prevention of such plundering is secure property rights.
Ah.  I think I missed the point when you mentioned it in the fishing post, as I had not gone over this post yet.

I fail to see your point regarding the farming thing.  When I think for major examples of overfishing by capitalists, I'm thinking more of fields where there is nonreal wealth.  For example, take the housing collapse.   So long as things like bank loans aren't overfished, the system benefits, but if overfished too far, the system collapses.  This keeps happening over and over.
In farming there are clear property rights.  In fishing there aren't.  In banking there are in some cases and in others things are more difficult.

In the example of fishing you gave the fish are all taken from the same sea.  The owners of fishing businesses take as many as they can without regard to the effect.  They do this because the harm they do to the sea has little effect on them.  If they overfish one place they can go elsewhere.  Farming is different.  A farmer cannot take crops from any piece of land.  He can only take them from his own land.  If he abuses that land for his short term gain then it will become worth less to him.  As a result he has little motivation to abuse it.  Those farmers who are careless with their capital will see it depreciate.  That carelessness though will not directly affect other farmer (though it may through pollution and other externalities).

In banking the situation is more complicated.  The capital of a bank is the assets that it holds, the financial assets and the buildings, etc.  If a bank were not allied to a central bank the situation would be like that of the farmer.  Bad financial decisions would lead to losses.  However they are associated with a central bank and this has two effects.  Firstly they are protected by the central bank's "lender of last resort" provision.  This means that insolvency is not a problem for them.  Secondly, the central bank control the interest rate.  That control of the interest rate means that there is not a free market in loans.

Quote from: Heq
1.  Niche
2.  Capitalist invests
3.  Trend-suckers invest
4.  Government invests
5.  Niche folding becomes apparent to intelligent people
6.  Capitalists move to another niche
7.  Niche collapses
8.  Trenders ditch and/or bitch
9.  Government buys off trenders (Joe Best-Pal who bought houses because they couldn't possibly go down) and gets stuck with the mess
I agree with you that this happens.  Notice though it would be quite easy to stop.  All that need happen is for the government to stop bailing out trend suckers.

Quote from: wodan46
1. No matter how many times it happens, there are an endless supply of Trendsuckers/Stupid Capitalists that lose their money and as a result rapidly lose their capacity to be productive and useful members of society.  Society would be better off if we could prevent them from being sucked into such trends, because for all their stupidity, under different circumstances they could have been a net plus for society rather than a minus.  Ditto for the government
I don't really agree.  Do you seriously think that you can come up with a test to distingush stupid capitalists from smart ones?  Do you think you could ensure that exactly the right people are investors rather than salaried workers?  I doubt that very much, which is why I want individuals to have the freedom to make the choice themselves.  Remember those who choose badly lose out personally.

Quote from: wodan46
For example, the collapse of the housing market resulted in a loss in liquidity, which has lead to a chain reaction of fail that is causing things like stores at Shopping Malls to go out of business.
The housing crisis though was not caused by a normal investment situation.  It was caused by the very low interest rates and "easy money" policy of the federal reserve.

When interest rates were 2% or 3% people were not investing in housing because they were fools.  They were investing in it because it was clearly a very profitable thing to do.  At that interest rate huge borrowings could be funded very cheaply.

Quote from: Heq
Yeah, I think I'm objecting to your shimmey-step from capitalists to corporations, as many corps are not fundementally capitalistic at all.  Many have the view that they are entitled to a "fair" profit, but the heart and soul of the business is elsewhere.
It depends on what you mean by "fundamentally capitalistic".  I don't really agree with you.  I think businesses in general try to make as much as they can.  They don't do that though at the risk of losing their assets.
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Psy
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« Reply #23 on: January 12, 2009, 14:44:20 EST »

I'll start by emphasising that what we are discussing here is economics.  In earlier threads Wodan has disparaged the entire idea of economics as an area of study.  However in this thread Wodan has made many economic theories.  What I think this establishes is that economic is important.  Wodan, you have said that in your view economics is not a science and cannot be a science.  But, since you have hypothesised about it don't you think that examination of those hypothesis is needed?  In that case it doesn't really matter whether it is a "science" or not to you or anyone else, it is obviously an area of study worth of pursuit.

Quote from: wodan46
That is really my point.  Tragedy of the Commons or not, Capitalists will seek short term profits even if it incurs long term costs, especially since in most circumstances the Capitalists can avoid being hit with the costs altogether, typically by simply leaving the market sector when the resource has been depleted, or through nasty externalities.  If they don't, someone else will, and they will out-compete them.  In short, for an unfettered Capitalist, the best choice is always to exploit the system to the best of their power.

Quote from: Current
The chips though are cheap, much cheaper than they were in the past.  Why?  Because property rights apply to land.  A farmer can only gather potatoes from his own land.  What he does with that land determines if he prospers or does not.
In the farming example, a farmer will own their property for a long time, and as a result, they will consider long term costs.  On the time scales of which farming operates, depleting a resource will not generate significant gains, while it will destroy profits occuring in the near future.

However, if a corporation believed that they could make worthwhile profits by utterly depleting an agricultural area, they would do so.  You know why?  Because unlike the farmer, their prosperity is not dependent on what they do with their land.  Even if they leave it a barren wasteland, if they made a good enough profit, they can simply move on to the next resource.  It is this mobility that makes Corporations indifferent to long term consequences.  They can simply grab the short term profit and run away before the long term costs start piling in, costs which ultimately get paid by the society who has to deal with yet another resource being depleted.
In the western world a farmer is a capitalist even in the strictest sense of the term.  He or she owns capital equipment in the form of farming land and the equipment needed to farm.  The farmer buys stock, capital equipment and labour.  The farmer sells the resulting crops.  There is little difference between a corporation owning a farming business and an individual owning that business.

If a company farming an area of land were able to "simply move on to the next resource" as you put it then why can't the private farmer?  An individual farmer is not tied to his or her land.  He or she may sell it and move elsewhere, both have similar mobility.

The flaw in your argument is that it is not possible for the individual farmer or a company that owns a farming business to pass on the long term costs to society as you claim.  An area of farm land is a piece of capital.  The price that it commands depends on what use can be made of it.  If it yields 4 tons of barley per year when farmed in one particular way then it will command a greater price than if it yields 3 tons of barley per year when farmed similarly.  Naturally the price the land commands is much higher than the annual profit that can be made from it.

So, there is no means by which a business may avoid the repercussions of it's actions.  If it depletes the land that it owns then how can it sell that land to another later?  The land will only command a price if it can be used.  If it can't be used then it is worthless.  If the business only owns this land then that business too is worthless.

If there is some sort of externality then the situation is different.  If a farmers my gain by abusing the land of another by polluting it for example.  But such things are policed these days, as they should be.
The difference is the size of fixed capital between the large capitalist and the small farmer.  The large capitalist can deploy large 100 ton earth movers to efficiently extract the exchange value out of land to the point even if the land is becomes worthless the large capitalist would have made more then enough surplus value to make up for the destruction of their land (so they can just abandon the destoryed land and buy more land to extract value from).  We have already reached this point in mining were the largest earth mover weighs in over 45 kilotons so large mining companies have enough mechanized power that is cheaper to level whole mountain ranges in mining operations thus mining companies do.

Quote from: Current
Quote from: Psy
Even if all the fishermen had their own fish stocks they would still be dealing with competing with each other and they would all over fish as they have no choice as if they don't they risk being bought out by those that over fish.  To put it another way if each capitalist had a goose that laid golden eggs all the capitalists would kill their goose to get try to gold faster as each capitalist worried their competitors will do it and use their extra golden eggs to accumulate their goose if they don't kill their goose to get more golden eggs.
You have made the same error as Wodan.  The geese that lay golden eggs are worth a huge amount.  Much more than the golden eggs themselves because each goose can lay many such eggs, many times more.  Remember one capitalist who owns a goose can decide whether he sells it or not.  His goose cannot be "accumulated" without his permission.  With that in mind the capitalist who is most careful with his goose will do best in the long run.
Marx stated that capitalist don't have a choice over selling commodities as if the capitalist doesn't accumulate ever greater amounts of capital they will be accumulated by capitalists that do.  Capitalists have no choice, if they don't keep up with the growing average level of fixed capital in their industry their means of production will become obsolete and they won't be able to complete in the market place. 
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wodan46
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« Reply #24 on: January 12, 2009, 18:39:28 EST »

I'll start by emphasising that what we are discussing here is economics.  In earlier threads Wodan has disparaged the entire idea of economics as an area of study.  However in this thread Wodan has made many economic theories.  What I think this establishes is that economic is important.  Wodan, you have said that in your view economics is not a science and cannot be a science.  But, since you have hypothesised about it don't you think that examination of those hypothesis is needed?  In that case it doesn't really matter whether it is a "science" or not to you or anyone else, it is obviously an area of study worth of pursuit.
Economics, as it is practiced by Economists, is not a science.  Economics can be practiced in a scientific way, and Decision Scientists engage it in such a manner.  I am not disparaging Economics, I'm disparaging Economists, specifically the prominent ones that dominate the field, and tend to primarily be Libertarian Free Market/Deregulation advocates.
Quote from: wodan46
In the farming example, a farmer will own their property for a long time, and as a result, they will consider long term costs.  On the time scales of which farming operates, depleting a resource will not generate significant gains, while it will destroy profits occuring in the near future.

However, if a corporation believed that they could make worthwhile profits by utterly depleting an agricultural area, they would do so.  You know why?  Because unlike the farmer, their prosperity is not dependent on what they do with their land.  Even if they leave it a barren wasteland, if they made a good enough profit, they can simply move on to the next resource.  It is this mobility that makes Corporations indifferent to long term consequences.  They can simply grab the short term profit and run away before the long term costs start piling in, costs which ultimately get paid by the society who has to deal with yet another resource being depleted.

In the western world a farmer is a capitalist even in the strictest sense of the term.  He or she owns capital equipment in the form of farming land and the equipment needed to farm.  The farmer buys stock, capital equipment and labour.  The farmer sells the resulting crops.  There is little difference between a corporation owning a farming business and an individual owning that business.

If a company farming an area of land were able to "simply move on to the next resource" as you put it then why can't the private farmer?  An individual farmer is not tied to his or her land.  He or she may sell it and move elsewhere, both have similar mobility.

The flaw in your argument is that it is not possible for the individual farmer or a company that owns a farming business to pass on the long term costs to society as you claim.  An area of farm land is a piece of capital.  The price that it commands depends on what use can be made of it.  If it yields 4 tons of barley per year when farmed in one particular way then it will command a greater price than if it yields 3 tons of barley per year when farmed similarly.  Naturally the price the land commands is much higher than the annual profit that can be made from it.

So, there is no means by which a business may avoid the repercussions of it's actions.  If it depletes the land that it owns then how can it sell that land to another later?  The land will only command a price if it can be used.  If it can't be used then it is worthless.  If the business only owns this land then that business too is worthless.
In this hypothetical example, the capitalist strategy would be to maximize the production of the land in the short term, even if it would cause the destruction of the land in the long term.  They would then sell the land while it was producing well and make a tidy profit on it.

However, this example really isn't a very good one, because this scenario has two key differences from the one I would favor.  First, the individual can clearly grasp which means of increasing production in the short term will deplete production in the long term, and which will not.  In the real world, it is likely that they will pursue any method that they believe will increase short term production without causing long term depletion, even if it actually does.  Second, your situation has the capitalist's investment be strongly tied to the quality of the land, rather than merely the production.  As a result, they can't merely abandon it, for they will be made to take the costs themselves, and furthermore, the profits they make from production will not exceed the initial investment most likely.

However, in the Free Market, the clear value of things is murky, and it is possible for capitalists to abandon depleted resources with relative ease, because by the time it is depleted, they have already accumulated plenty of profits out of it.

For example, lets say that a new source of oil is found, containing a ten thousand gallons.  There are two ways of refining it into gasoline, one way that for 1$, converts 2 gallons of oil into 1 gallon of gasoline, and another, that for 1$, converts 10 gallons of oil into 2 gallons of gasoline.  Lets say 2 capitalists each end up with half the oil, and each converts using one of the processes.  Both have 100$ to start with.  The capitalist using the second process will sell the gasoline for 75 cents a gallon, and will make a decent profit, while the other capitalist will be forced to either sell at a loss or lose customers, than go out of business.  This will leave only the other guy, who will make a little under a 1000$, which he will then use to buy land containing more oil and repeat the process.

You might notice that in this case, it was not a tragedy of the commons.  Each person bought property containing 50% of the oil, and the one who used it in a way that will result in less economic gain for society is the person who "won" and accumulated additional wealth, enough to use it to pursue new ventures.

In fact, going back to fishing example, if each fisherman purchased an area in the lake that only they were allowed to fish, the overfisher will still drive the others out of business so long as the depletion doesn't hit them before the selling at a loss finishes the others, then use the money they earned to buy the remaining areas of the lake from their defeated competitors and deplete it.

If there is some sort of externality then the situation is different.  If a farmers my gain by abusing the land of another by polluting it for example.  But such things are policed these days, as they should be.
You have already made it clear that you have no faith in the government to police things, especially things involving interventions into economic matters.  Now, you expect it to do so as a given.  Pick your poison already, stop dodging.

You have made the same error as Wodan.  The geese that lay golden eggs are worth a huge amount.  Much more than the golden eggs themselves because each goose can lay many such eggs, many times more.
You have made it clear that people do not adhere to the French form of rationalism, but now you expect people to know the consequences of a given course of action?  Capitalists will pick the perceived best choice, even it screws them over.

Quote from: wodan46
1. No matter how many times it happens, there are an endless supply of Trendsuckers/Stupid Capitalists that lose their money and as a result rapidly lose their capacity to be productive and useful members of society.  Society would be better off if we could prevent them from being sucked into such trends, because for all their stupidity, under different circumstances they could have been a net plus for society rather than a minus.  Ditto for the government
I don't really agree.  Do you seriously think that you can come up with a test to distingush stupid capitalists from smart ones?  Do you think you could ensure that exactly the right people are investors rather than salaried workers?  I doubt that very much, which is why I want individuals to have the freedom to make the choice themselves.  Remember those who choose badly lose out personally.
No, society loses out.  All the people who choose to invest their efforts in failed investing rather than being a salaried worker have hurt not just themselves, but society.

The simplest way to deal with trendsuckers is to prohibit excessively risky ventures.  For example, loaning half a million to someone who is unemployed is a risky venture.  Some ventures will make the risk less obvious, in those there is no need to get involved.  As always, there will never be a clear line, but you know what, that's simply the way the world works.

Quote from: wodan46
For example, the collapse of the housing market resulted in a loss in liquidity, which has lead to a chain reaction of fail that is causing things like stores at Shopping Malls to go out of business.
The housing crisis though was not caused by a normal investment situation.  It was caused by the very low interest rates and "easy money" policy of the federal reserve.
A policy that was part of the Republican/Libertarian agenda to promote deregulation.  Bush himself encouraged people to go buy houses in one address.  Guess it didn't work out so hot though.

When interest rates were 2% or 3% people were not investing in housing because they were fools.  They were investing in it because it was clearly a very profitable thing to do.  At that interest rate huge borrowings could be funded very cheaply.
So they decided to go for short term profits while ignoring the potential long term costs.  That is called being a fool, and it is also called being a capitalist, the difference being that unlike capitalists, they would not be able to evade the costs.  It is worth noting that not only were they unable to evade the costs, countless smart people also failed to evade them when they got caught by the resultant depression.
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Heq
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« Reply #25 on: January 13, 2009, 02:18:40 EST »

Current, morally I agree with you, however I hold to my belief that you cannot expect more intelligent actions from people as a whole then they are well equipped to make, and even then it's dicey.

I mean, most of us are smart enough to not stick our arms in a roaring fire, but this is because at some point in our lives we learned some simple physics (fire=hot), I think as people are just leaving them to meander around is not going to solve the problem.  Yes, people will get educated over time, but I feel that in order to move towards a more financially free system we need to give people the tools to handle themselves first, or all we do is give the keys to the kingdom to the snake-oil salespeople.

Wodan, I actually had the discussion this evening with another student of the economy (and present student of accounting) and I'm not so sure that libertarians are really the ones driving the bus.  They get trotted out the most, but most economists are moderates, but discussions between moderates is immensely boring and she we agreed that economical folks are taught to ham it up for the press, make dire warnings and otherwise act like Al Gore.  It's a terrible habit almost everyone has, but I suspect the truth of the matter may lie in the fact that there are many different models and they all can work, they just require different set-ups.  Capitalism does work when society has a heavy moral structure built into it, and pure socialism can work with extreme competance.  The problem is that people want stuff without having to do anything for it, and that just doesn't work.  By and large most of the people in a position to make decisions are looking for data to back up an obvious fiction rather then solutions, and as most pure economists are employed by political folks (private industry tends to prefer cross-trained economists) they are going to be heavily partisan.
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« Reply #26 on: January 13, 2009, 20:25:35 EST »

Wodan, I actually had the discussion this evening with another student of the economy (and present student of accounting) and I'm not so sure that libertarians are really the ones driving the bus.  They get trotted out the most, but most economists are moderates, but discussions between moderates is immensely boring and she we agreed that economical folks are taught to ham it up for the press, make dire warnings and otherwise act like Al Gore.
I care about the ones who make an impact.  If no one cares about the moderates, then people will latch on to the extremists instead for establishing their perspective on such things.

It's a terrible habit almost everyone has, but I suspect the truth of the matter may lie in the fact that there are many different models and they all can work, they just require different set-ups.  Capitalism does work when society has a heavy moral structure built into it, and pure socialism can work with extreme competance.
Neither of which will ever happen to the extent needed for it to "work".

The problem is that people want stuff without having to do anything for it, and that just doesn't work.  By and large most of the people in a position to make decisions are looking for data to back up an obvious fiction rather then solutions, and as most pure economists are employed by political folks (private industry tends to prefer cross-trained economists) they are going to be heavily partisan.
Correct.
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« Reply #27 on: January 14, 2009, 07:07:02 EST »

Wodan, I actually had the discussion this evening with another student of the economy (and present student of accounting) and I'm not so sure that libertarians are really the ones driving the bus.  They get trotted out the most, but most economists are moderates, but discussions between moderates is immensely boring and she we agreed that economical folks are taught to ham it up for the press, make dire warnings and otherwise act like Al Gore.
I care about the ones who make an impact.  If no one cares about the moderates, then people will latch on to the extremists instead for establishing their perspective on such things.
The ones who make the impact are the left-wing ones though.  The are many economists that hold free market views are though almost never asked to comment in the media and they have no significant influence on government politics.

Don't mistake IRT for the real world.  In the real world people like yourself are winning and have been for the last few decades.  People like myself are on the margins.
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« Reply #28 on: January 14, 2009, 10:55:23 EST »

Capitalism does work when society has a heavy moral structure built into it,
Well if we accept that profits comes from unpaid labor then capitalism can't work with a society within a heavy moral structure, the society would be stuck with how do they exploit the labor of the proletariat for the capitalist class while being moral, and how does one regulate access to the means of life for the purpose of personal gains while being moral? 

Quote from: Heq
and pure socialism can work with extreme competance.
You know that isn't really a swipe on socialism unless you really have a low option of the competence of humans. 

Quote from: Heq
The problem is that people want stuff without having to do anything for it, and that just doesn't work.
That is the point of capitalism and fedualism, a ruling elite are entitled to what workers produce without really adding any value to the production process.  So it does work and has worked for hundreds of years, the problem is it mostly only works for the ruling elite.
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« Reply #29 on: January 14, 2009, 11:28:16 EST »

Quote from: Current
The ones who make the impact are the left-wing ones though. The are many economists that hold free market views are though almost never asked to comment in the media and they have no significant influence on government politics.
Quote from: wodan46
A policy that was part of the Republican/Libertarian agenda to promote deregulation.  Bush himself encouraged people to go buy houses in one address.  Guess it didn't work out so hot though.
As a general rule, no one believes their own ideology is/was influential when bad things happen and everyone believes their ideology is/was influential when good things happen.

This is because the laws of causality are so unclear in the social sciences that you can blame anything on anything and make it sound convincing. I'm pretty sure someone smart enough could make a good argument that the current economic crisis is entirely the fault of Robert le Guiscard (google if needed).

Just one more reason I think that, in the social sciences, correlation should be taken to imply causation until we find rigorous laws of causation.

Quote from: Heq
Yes, people will get educated over time, but I feel that in order to move towards a more financially free system we need to give people the tools to handle themselves first, or all we do is give the keys to the kingdom to the snake-oil salespeople.
It's generally easier to train people not to do something than to train them to do it right, so wouldn't it be easier to foster a healthy fear of investing in those who shouldn't fo it?

Personally, I've always said I'd rather play black jack for money than invest. I like to have some control over whether I win or lose money, and no matter which way you look at it, investing is roulette, and it can be russian at that...
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He looked severely at me for awhile, then, grabbing his moustaches, he said:
- Boss, with all due respect, you are naive and pedant.

"Alexis Zorba", by Nikos Kazantzakis (translation mine)
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