Thursday, March 22, 2012

January Jobless Rate Falls to 0.8% in ND Oil Patch

According to data just released by the state of North Dakota, the unemployment rates both for the city of Williston and the surrounding Williams County fell to 0.8% in January, the lowest jobless rates ever recorded in North Dakota, and possibly for the entire United States. 

98 Comments:

At 3/22/2012 4:23 PM, Blogger rjs said...

how many people is that?

(ie, if you employ 120, and one is jobless, your rate is 0.8%)

 
At 3/22/2012 5:46 PM, Blogger Ron H. said...

rjs: "how many people is that?

(ie, if you employ 120, and one is jobless, your rate is 0.8%)
"

I don't employ any jobless people. Every one who works for me has a job. :)

 
At 3/22/2012 7:09 PM, Blogger Jon said...

Krugman ridicules the notion that pointing to a state that has a population about the size of Albany, New York is supposed to prove some sort of model for the rest of the nation in this article. There's also been some recent news on the relationship between drilling and gas prices. Hint: it once again punctures the right wing fantasies. See here.

 
At 3/22/2012 10:21 PM, Blogger Jack Lacton said...

So, the same people who ridicule "the notion that pointing to a state that has a population about the size of Albany, New York is supposed to prove some sort of model for the rest of the nation" in turn point to Scandinavian countries with tiny populations and much higher natural resources to population ratios than the US as models to run healthcare and the social welfare state?

 
At 3/23/2012 1:22 AM, Blogger PeakTrader said...

Jon, here's another view:

76 Percent Of Voters Think Higher Energy Taxes Could Equal Higher Pump Prices
March 22, 2012

A true all-of-the-above energy strategy would include greater access to areas that are currently off limits, a regulatory and permitting process that supported reasonable timelines for development, and immediate approval of the Keystone XL pipeline to bring more Canadian oil to U.S. refineries.

This would send a positive signal to the market and could help put downward pressure on prices.

API represents more than 500 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America's energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

"Suggestions that the U.S. has meager domestic energy resources, or lacks the ability to safely produce greater amounts of oil and natural gas are wrong"..."The United States...has very substantial resources because of technological progress in offshore development and in the development of shale oil and natural gas onshore."

My comment: Because of Peak Oil, we'll soon need to run even faster just to stay in place.

 
At 3/23/2012 5:50 AM, Blogger Larry G said...

" My comment: Because of Peak Oil, we'll soon need to run even faster just to stay in place"

is that really sustainable?

what's interesting about this narrative is the idea that drilling in America is what can influence world oil prices - almost as if..what happens (or not) in the rest of the world has much less impact.

Look at the coastlines of the rest of the continents.

And yet we frame this issue as one in which the coastline of America are the barrier to lower worldwide oil prices.

 
At 3/23/2012 6:07 AM, Blogger drj said...

drilling in theUSA means high paying jobs on the rigs , in the trucks , and at the steel mills that make the pipe with the only government incentive ,the oil depletion allowance.

 
At 3/23/2012 8:39 AM, Blogger PeakTrader said...

Larry says: "is that really sustainable?"

Technology and deregulation can increase U.S. oil production significantly:

U.S. report: Oil imports down, domestic production highest since 2003
March 12, 2012

"According to the study (by six federal agencies), the United States reduced net imports of crude oil last year by 10%, or 1 million barrels a day. The U.S. now imports 45% of its petroleum, down from 57% in 2008.

Imports have fallen, in part, because the United States has increased domestic oil and gas production in recent years.

U.S. crude oil production increased by an estimated 120,000 barrels a day last year over 2010.

The report credits administration policies for the improvements. It cites initiatives such as the higher fuel efficiency of passenger cars, the jump in renewable energy output, and improved weatherization of 1 million homes.

But independent analysts attribute much of the fall in oil imports to slack U.S. demand in a still-anemic economy. And to a certain degree, they say, the boost in domestic oil and gas production is the result of decisions energy companies made during the George W. Bush administration to develop key reservoirs."

 
At 3/23/2012 8:41 AM, Blogger Paul said...

This comment has been removed by the author.

 
At 3/23/2012 8:43 AM, Blogger Paul said...

"what's interesting about this narrative is the idea that drilling in America is what can influence world oil prices - almost as if..what happens (or not) in the rest of the world has much less impact."

If not for the Democrats, we could increase the world's spare capacity. As Geoff at Energy Outlook put it: "As with other commodities like grain and coffee, the price of oil is determined by relatively small changes in supply, demand, inventories, and in the case of oil, spare capacity. What really counts is the last few million barrels per day that are traded, whether inventories are rising or falling, and how large global spare capacity is and who owns it. The last three times that oil prices collapsed, in the mid-1980s, late-1990s, and 2008, it happened as a result of net changes in these parameters amounting to less than about 3 million bbl/day."

There's at least 2 million bbl/day not online due directly to Democrat obstruction

 
At 3/23/2012 8:51 AM, Blogger Jon said...

Jack, Krugman doesn't look exclusively at smaller Scandinavian countries. When talking about health care we talk about France, Canada, Australia, Britain, Germany, and every other advanced first world country and yes, we try and draw lessons from them.

PT, I don't think your commentary is relevant to the point I'm making. Drilling here is not going to solve our unemployment problem and also is not going to solve the gas price problem.

What it will do is make certain investors very rich while imposing the external costs on society as a whole via environmental degradation. Hence the right wing cheer leading.

 
At 3/23/2012 9:29 AM, Blogger Paul said...

JOn,

"Drilling here is not going to solve our unemployment problem and also is not going to solve the gas price problem."

What a phony argument. Because drilling won't automatically "solve" all our problems, we shouldn't do it. Well then, let's just shut down the 6 million bbl/day we're producing already if it simply makes no difference.

 
At 3/23/2012 9:32 AM, Blogger PeakTrader said...

Jon, the economic benefits of technology and deregulation can exceed the external costs of "environmental degradation," in more and greater ways than some believe, particularly with peak oil and vast idle resources.

 
At 3/23/2012 10:56 AM, Blogger PeakTrader said...

The U.S. can ramp-up drilling, including in Alaska and in the Gulf of Mexico to add e.g. 1 million barrels a day instead of 120,000 barrels a day:

EIA Expects Higher U.S. Crude Production
Mar 7, 2012

"U.S. crude oil production increased by an estimated 120 thousand bbl/d to 5.60 million bbl/d in 2011.

A 390-thousand bbl/d increase in lower-48 onshore production in 2011 was partly offset by a 40-thousand bbl/d decline in Alaska and a 230-thousand bbl/d decline in output in the Federal Gulf of Mexico/GOM.

The rise in production is driven by increased oil-directed drilling activity, particularly in onshore shale formations."

 
At 3/23/2012 11:09 AM, Blogger Jon said...

Paul, read the Krugman article and notice the emphasis placed on this blog on the importance of drilling in ND. I'm not saying it shouldn't be done because it wouldn't completely solve the unemployment problem. I'm saying the benefit to the employment situation is overstated. And of course the environmental destruction is downplayed. All to the pleasure of investors.

PT, I suppose development gains can exceed the environmental costs in theory. What about in practice?

Ask an Ecuadoran. Ask a Nigerian.

Capitalism does in fact require ever increasing consumption. Without the increase in production that Mark always talks about, yeah, things really get bad. It's insane to structure economic arrangements that require we treat the earth like an infinite resource and require that we use more, waste more, throw away more. So you're right that increased production has economic benefits in the sense that we have a capitalist system that requires increased production, so if that doesn't materialize havoc ensues. The benefits are short term though. This will not go on forever. Either we develop an alternative economic arrangement that doesn't require ever expanding consumption or we face the catastrophic consequences.

 
At 3/23/2012 11:18 AM, Blogger Paul said...

Jon,

Krugman is a pathetic hack. An Investors.com(oooooooh, Investors!) noted, "Well, the unemployment rate in Albany County in New York state was more than double North Dakota's in December 2011 at 6.7% and at 8.2% for the entire state. Perhaps New York could benefit from an equally vigorous development of the portion of the Marcellus Shale formation.

PricewaterhouseCoopers estimates that, combining the operational and capital investment impacts, the U.S. oil and natural gas industry's total employment contribution to the national economy amounted to 9.2 million full-time and part-time jobs, accounting for 5.2% of the total employment in the country.

Krugman claims the "fracking boom in Pennsylvania has had hardly any effect on the state's overall employment picture." Well, Pennsylvania's Department of Labor and Industry estimates that fracking in its part of the Marcellus created 72,000 jobs from the fourth quarter of 2009 to the first quarter of 2011."

 
At 3/23/2012 11:22 AM, Blogger Jon Murphy said...

It's insane to structure economic arrangements that require we treat the earth like an infinite resource and require that we use more, waste more, throw away more.

No Capitalist has ever advocated such an approach. In fact, capitalism encourages less wastefullness. The whole purpose of Capitalism is "how can I lower my costs to improve my profits?" That encourages, nay mandates, less resource use.

 
At 3/23/2012 11:36 AM, Blogger PeakTrader said...

One of the by-products of capitalism, in a market economy, is efficiency. So, we can afford higher living standards, labor standards, and environmental standards.

However, excessive environmental standards, like excessive labor standards (e.g. a $20 minimum wage) is more destructive than constructive.

 
At 3/23/2012 1:33 PM, Blogger Jon said...

No Capitalist has ever advocated such an approach. In fact, capitalism encourages less wastefullness.

Really? No capitalist has ever advocated increased consumption? No capitalist has ever crafted advertising and marketing strategies that prey on your irrational tendencies in an attempt to persuade you to purchase things you don't need and possibly don't even want? Capitalists instead hope that you will purchase only what you need, nothing more?

I understand on a per capita basis Americans consume today twice what they consumed in 1960. In 1960 people predicted that with advances in technology that by our time people would work half as much. Instead the typical family works hundreds more hours in a year than they did in 1960. If Capitalism encourages conservation and lack of waste, why has this happened?

 
At 3/23/2012 1:35 PM, Blogger Jon said...

One of the by-products of capitalism, in a market economy, is efficiency.

As far as I know Socialists don't typical advocate a non-market centrally planned economy. Is a Capitalist market economy more efficient than a Socialist market economy?

 
At 3/23/2012 1:43 PM, Blogger Jon Murphy said...

Really? No capitalist has ever advocated increased consumption?

Increased consumption is not the same as increased wastefulness.

Consider this: Americans consume more oil than we did 60 years ago. But how much more are we getting out of it? How many more miles can we drive? How much better can we heat our homes? How much more electricity can we generate?

Consumption has increased, but per-unit resource ratio has dropped.

If we were to consume at the same level we are now 60 years ago, we'd use an exponentially higher number of resources than we are now.

Is a Capitalist market economy more efficient than a Socialist market economy?

Inherently, yes.

 
At 3/23/2012 2:36 PM, Blogger Paul said...

Jon,

"Instead the typical family works hundreds more hours in a year than they did in 1960."

Well, that's one thing you socialists have in your corner. There's alot more work going on in capitalist economies.

 
At 3/23/2012 4:08 PM, Blogger Jon said...

Increased consumption is not the same as increased wastefulness.

No, but it can be. Is it your claim that no capitalist has ever advocated needless consumption. Like encouraging people to but things they don't really need. Like an upgrade from an iphone 3 to an iphone 4 even though the one is not much different than the other. That never happens.

Inherently, yes.

I guess I was looking for some sort of supporting argument rather than the bald assertion.

 
At 3/23/2012 4:15 PM, Blogger Jon Murphy said...

I guess I was looking for some sort of supporting argument rather than the bald assertion.

My apologies. It has been empirically proven that a market, free from any form of interference, allocates resources more efficiently than a central plan. You can read studies from Adam Smith's Wealth of Nations (Book 1, Chapters 1-3), Milton Friedman, FA Hayek, JM Keynes, Paul Krugman, David Ricardo, etc etc. So, any economy that as interference is inherently less efficient. That is not to say that a market always allocates resources to their highest efficiency all the time. It is to say that, compared to the alternatives, the market will allocate resources more efficiently.

Also, be sure to remember that efficiency is not the same as fair.

No, but it can be. Is it your claim that no capitalist has ever advocated needless consumption. Like encouraging people to but things they don't really need. Like an upgrade from an iphone 3 to an iphone 4 even though the one is not much different than the other. That never happens.

I think you may be confusing "capitalist" and "businessman". Not the same thing.

Regardless, your point is a non sequator. That's like saying President Obama is advocating the fall of the Saudi Kingdom because he wants us to become less dependent on foreign fuel.

 
At 3/23/2012 5:03 PM, Blogger PeakTrader said...

"Is a Capitalist market economy more efficient than a Socialist market economy?"

Only if you want to create real wealth, rather than pretending to create real wealth.

 
At 3/23/2012 6:16 PM, Blogger Ron H. said...

Jon :"No, but it can be. Is it your claim that no capitalist has ever advocated needless consumption. Like encouraging people to but things they don't really need. Like an upgrade from an iphone 3 to an iphone 4 even though the one is not much different than the other. That never happens."

So, this is the strawman you want to do battle with?

I see another problem here, Jon, who should decide whether I "need" a new iPhone? What phone would YOU chose for me?

No doubt you really believe people are helpless in the face of marketing propaganda, but in fact, it's just that ability to recognize bullshit when they see it that allows them to see your comments here for what they are.

 
At 3/23/2012 6:29 PM, Blogger Ron H. said...

Jon,

I'm really looking forward to reading your responce to Jon Murphy's well written and thoughtful comment.

Can you answer on your own, or do you need to recheck your Gnome Chumpsky notes?

By the way, I don't recall your responding to this fascinating article about some apparent hypocrisy.

Chomsky sez: "Capitalism for me, but not for thee."

 
At 3/23/2012 6:35 PM, Blogger Ron H. said...

Jon,

I'm really looking forward to reading your responce to Jon Murphy's well written and thoughtful comment.

Can you answer on your own, or do you need to recheck your Gnome Chumpsky notes?

By the way, I don't recall your responding to this fascinating article about some apparent hypocrisy.

Chomsky sez: "Capitalism for me, but not for thee."

 
At 3/23/2012 9:30 PM, Blogger Jon Murphy said...

Thank you for your much too kind compliment, Ron, but I don't think there was anything really thoughtful in what I said. It's pretty standard Capitalist philosophy.


I should also probably give a little background to my Saudi comment: the Saudi royal family is almost completely reliant on oil sales to stay in power. That's the analogy I'm making.

 
At 3/24/2012 12:15 AM, Blogger Ron H. said...

Jon Murphy: "Thank you for your much too kind compliment, Ron, but I don't think there was anything really thoughtful in what I said. It's pretty standard Capitalist philosophy.


I should also probably give a little background to my Saudi comment: the Saudi royal family is almost completely reliant on oil sales to stay in power. That's the analogy I'm making.


Yes, I understood the Saudi reference. It seems you are far more patient with people than I am. Perhaps I could learn that from you. :)

Your response to Jon was very courteous and informative, and I admire that. As you can see, mine were pretty snarky.

My experience with Jon has been that he trolls here periodically making laughable socialist claims, and no amount of reasonable discourse makes any difference, as he comes back later with the same nonsense. He uses his own website as a reference, and it appears everything he knows about politics and economics, he learned by reading Noam Chomsky.

 
At 3/24/2012 2:10 AM, Blogger PeakTrader said...

Socialism has undesirable effects, including disincentives to create value and incentives not to create value.

Winston Churchill:

“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

 
At 3/24/2012 3:21 AM, Blogger PeakTrader said...

Ron, that Foxconn example in your link "Prove Me Wrong" is not an example of capitalism.

It's an example of ignorance of China's macroeconomy, crony-capitalism in a communist country, and (poor) labor standards.

In a capitalist system, living standards, labor standards, and environmental standards would all rise at faster rates.

 
At 3/24/2012 8:39 AM, Blogger Jon said...

Jon Murphy, I think you've failed to follow the thought progression here. It went as follows:

Peak Trader-A capitalist market economy produces efficiency.

Jon-Socialists don't typically advocate central planning, but instead advocate a market. Is capitalist market more efficient then socialist market?

Jon Murphy-Yes

Jon-Any supporting argument or evidence.

Jon Murphy-Yeah, markets work better than central planning.

RonH-What a brillian reply!!

I'm sure I have replied to this old Chomsky article. "How dare he make money via Capitalism." What choice does he have? It's much like conservatives that turn 65 and start collecting Social Security. Should left wingers call them hypocrits because they oppose the SS system? No. Their money was taken via taxes. They may not approve of the system, but they have to operate within it.

PeakTradre writes:

Ron, that Foxconn example in your link "Prove Me Wrong" is not an example of capitalism.

Here's a pattern I see repeatedly from right wingers. They make statements that reveal they don't actually know what Capitalism or Socialism are. Here's another example of that.

See if you can accomplish this without consulting Google. What is Socialism? What is Capitalism? I actually think it's not an accident that you don't know. It's not a conspiracy to prevent you from knowing. But certain wealthy interests would prefer you didn't know. And I can see that you don't. So their interests are being served somehow. Of course serving the interest of wealth is the express purpose of the AEI and hence the purpose of this blog. So it seems they are doing their job, just as Fox News viewers were more likely to think WMD had been found in Iraq or that Saddam was involved in 9-11. No conspiracy. Just serving the interests of their owners and advertisers.

 
At 3/24/2012 9:11 AM, Blogger Jon said...

I just looked more closely at this Chomsky article once again. What a pile of lies. I've never paid to listen to a Chomsky lecture online. His own website links to torrent websites where his speeches can be downloaded free. He encourages people to do this. If he gives an hour long lecture it's usually on Youtube within a week. Innumerable past speeches are there. He never has these pulled down. Just absolute lies.

And this guy doesn't know what Socialism is. Socialism prevents a company from branding itself? Socialism means you wouldn't charge a speaking fee or perhaps increase that fee? That's just total confusion and typical of right wingers.

Up until very recently (and maybe it's still true) anybody can very easily meet with Chomsky personally and discuss with him. There's no fee. He probably charges fees to organizations that can afford to pay and for others, like most of us, there's no problem.

Does Socialism say you can't set earnings aside for your loved ones? Does Socialism say inheritance is forbidden? Where and why? The presentation gives you this very vague sense that Socialism just doesn't want anybody to be rich. Is that what you think? You're going to have to put down these right wing sources of yours if you ever want to have a clue.

 
At 3/24/2012 12:46 PM, Blogger Ron H. said...

Peak: "Ron, that Foxconn example in your link "Prove Me Wrong" is not an example of capitalism. "

Yes, I know. I was pointing out that Jon links to his own lame website for support when he comments here at CD.

 
At 3/24/2012 1:02 PM, Blogger Jon Murphy said...

Sorry, Jon, I didn't see your comment about capitalism and socialism.

Socialism does use the market system, but also requires government intervention when the market is less-than-socially optimal. Capitalism has no such requirement. My point remains.

 
At 3/24/2012 1:48 PM, Blogger Ron H. said...

Jon: "RonH-What a brillian reply!!"

Which one? Are you dismissing everything I wrote as not worthy of your consideration?

You asserted that Jon Murphy made a claim that he didn't, in fact, make - thereby creating a strawman to demolish.

Wrong?

You haven't answered my question as to who should decide what other people "need".

Since that's an important element of your argument about wastefulness, It's important to define what "need" means, and who decides it.

Don't you think?

As to the article on Chomsky, you seem to have misunderstood what was actually written.

I don't believe anyone complains that Chomsky makes money in a capitalist system, although as Jon Murphy pointed out, you may be confusing the term 'capitalist', with 'businessman'.

It isn't Chomsky's actions that are being questioned, but his preaching loudly against legitimate tax avoidance methods used by "the rich", when he *voluntarily* uses these very methods himself.

Here's the key point from the article:

"He has frequently lashed out against the “massive use of tax havens to shift the burden to the general population and away from the rich” and criticized the concentration of wealth in “trusts” by the wealthiest 1 percent. The American tax code is rigged with “complicated devices for ensuring that the poor—like 80 percent of the population—pay off the rich."

This is NOT like Social Security, in that workers are forced to contribute to SS, and it's not hypocritical to receive back some of the money that was taken from them.

Chomsky, on the other hand, has CHOSEN to create a trust to protect his assets from taxation, an action he claims to despise.

Do you understand the difference?

As they say: "put your money where your mouth is".

Or better yet: "don't put your money where you claim others shouldn't be allowed to put theirs".

 
At 3/24/2012 2:09 PM, Blogger Ron H. said...

"Does Socialism say you can't set earnings aside for your loved ones? Does Socialism say inheritance is forbidden?"

Socialism is an economic and political system, and doesn't "say" anything. Perhaps you could rephrase that so it would better reflect your intended meaning.

Chomsky says that that tax avoidance measures used by the rich are evil, yet he uses them himself.

What word, other than hypocrit, could possibly apply?

If you do defer consumption by setting aside some of your earnings in the form of capital, and provide for your heirs to receive it after your death, what does your use of this "capital" while it's not being consumed say about you?

 
At 3/24/2012 2:13 PM, Blogger PeakTrader said...

Jon Murphy says: "Socialism does use the market system, but also requires government intervention when the market is less-than-socially optimal."

It seems, according to your definition of socialism, it's better than capitalism.

 
At 3/24/2012 2:22 PM, Blogger Ron H. said...

Peak: "It seems, according to your definition of socialism, it's better than capitalism."

Only if you consider government interference in the market, to effect social engineering, to be a plus.

 
At 3/24/2012 2:25 PM, Blogger PeakTrader said...

Ron, if it's "a plus," for society, then it must be good.

 
At 3/24/2012 2:38 PM, Blogger Ron H. said...

And in the future, when your heirs are rich because of your foresight, and mine are poor because I've consumed all my earnings and left them nothing, how will a socialist system deal with that inequity?

If your heirs build a factory with the capital you have left them, so that they can live on the returns from that capital investment, will my heirs who must work in that factory for a living have a legitimate claim to that profit, since workers should own the means of production?

 
At 3/24/2012 2:53 PM, Blogger Jon said...

Socialism does use the market system, but also requires government intervention when the market is less-than-socially optimal. Capitalism has no such requirement. My point remains.

Your point is that market Capitalism is more efficient that market Socialism. Your proof is that there are a lot of books that make that claim. Of course there are a lot of books that make the opposite claim. Can you articulate why you believe market Capitalism is more efficient?

I honestly think people don't know what Socialism is, and so they have no idea why capitalism is so much better, even though they believe that with a religious commitment. I find this a bit bizarre.

For instance you had said earlier that on Capitalism you want improved profits. You don't seem to know that the same is true on market Socialism. I don't think you know what Socialism is.

 
At 3/24/2012 2:57 PM, Blogger Jon said...

RonH, I'm a bit confused as to the early part of your comment, so I don't know how to reply. I'll move to the next part.

You haven't answered my question as to who should decide what other people "need".

This is a key confusion constantly made by right wing people. There's two separate issues. One is a normative question. Who should decide what I need? I should. I should be autonomous. That's fine. But there's a separate question, which is an emperical question. Which system creates conditions where I'm more likely to actually act in my own rational interest?

You hear this from right wingers all the time. "Liberals assume since I didn't choose what they would have chosen I've chosen irrationally. Maybe I don't share their preferences." No. That's not the issue. The issue is this. Any market based system would create a condition where I buy a product and later regret it. Maybe I smoke too many cigarettes or buy too expensive a vehicle. The question is, which system makes that kind of result more likely?

Laissez-Faire capitalism in fact creates an incentive for a company to spend millions of dollars developing persuasive methodologies that prey on your own irrational tendencies. It's all around us. I would think I barely need to argue the point. And it's a little bizarre in a way. An alien would find it strange that in a world where a thousand people starve to death every hour we have billions of dollars spent attempting to persuade wealthy people to eat more than they already do and way more than they need.

When people consume in irrational ways that is an inefficiency (at least in the way I would define efficiency). That is waste. Laissez-Faire capitalism leads directly to this condition.

 
At 3/24/2012 2:57 PM, Blogger Jon said...

Chomsky, on the other hand, has CHOSEN to create a trust to protect his assets from taxation, an action he claims to despise.

None of this changes the various lies I noted, but let's talk about this point. Chomsky distinguishes sharply between feel good action and do good action. In fact I heard him talk specifically about Coca-Cola. In his view Coca-Cola is likely responsible for the assassination of union organizers in Colombia. Does this mean we should stop drinking Coca-Cola? In his view not necessarily. Why? Because it wouldn't necessarily change anything. If I stop drinking Coke, will they notice? No. If a large scale organization ocurred that's a different story. He'd participate. But stop drinking it yourself and nothing happens.

Apply that to his tax haven. He opposes all kinds of regressive tax measures, which are everywhere. Deduction of mortgage interest is a tax break for the rich. The rich in companies get to go to sporting events, eat out, entertain, all on the company dime, which is tax deductible for the corporation. Does he deduct his mortgage interest? Probably. What good would it do if he didn't? He's working to change the system. But if he cuts off his own nose to spite his face by paying in a lot more in taxes, all the while of course right wingers take advantage of the tax breaks, he weakens himself and really doesn't see any of the attendant benefits. It's not like an extra $1 million in tax dollars from Noam Chomsky to the government will produces any good that he would observe. If the change does not apply across the board the benefits won't be realized.

Really it's just basic economics. Paying in if he's the only one paying is a big cost with no visible benefit. However if the law changed he'd gladly pay in because everyone else would as well and he'd get to enjoy the beneifts of a better society.

BTW, if he's only worth $2 million, that's pretty amazingly small given how many books he's sold, lectures he's given, and work he's done related to advances in computer technology via his linguistics. He's obviously giving much of his stuff away if this is all he has.

If you do defer consumption by setting aside some of your earnings in the form of capital, and provide for your heirs to receive it after your death, what does your use of this "capital" while it's not being consumed say about you?

It says I live in a capitalist country and have no choice but to operate within that system. But I'd gladly give up my claim to capital and live under a different arrangement.

 
At 3/24/2012 3:01 PM, Blogger Ron H. said...

Peak: "Ron, if it's "a plus," for society, then it must be good"

I should have written "Only if a person considers government interference..." instead of "Only if you consider government interference..."

Whether or not a person sees social engineering by government as a good thing, has no direct bearing on whether on not it actually is, but is limited to their personal view of it.

"Society" is a convenient term to use when describing the collective interactions of multiple individuals, and the term "good for society" is only meaningful from the viewpoint of an individual.

I wouldn't presume to know what is "good" or not "good" for people I don't even know, so I wouldn't ask my agent, the government, to do things on their behalf.

My personal view is that any government interference tends to be not "good".

 
At 3/24/2012 3:20 PM, Blogger Ron H. said...

Jon says: "RonH, I'm a bit confused as to the early part of your comment, so I don't know how to reply. I'll move to the next part."

Starting with your comment: "RonH-What a brillian reply!!"

I assume that was sarcasm, but you didn't indicate what, specifically, you were referring to. I wrote two comments covering several items. My suggestion was that you were dismissing all of it without further ado.

As to the *Straw man* – an argument based on misrepresentation of an opponent's position, you claimed something for Jon Murphy that he didn't write, then argued against what you had made up.

 
At 3/24/2012 4:23 PM, Blogger Ron H. said...

"Your point is that market Capitalism is more efficient that market Socialism. Your proof is that there are a lot of books that make that claim. Of course there are a lot of books that make the opposite claim. Can you articulate why you believe market Capitalism is more efficient?"

I can't speak for Jon Murphy, but I can respond to this misunderstanding on your part.

Jon Murphy's claim isn't that there are a lot of books, but that there are and were a lot of really smart, well respected people who make very strong cases that free market capitalism produces better results than market socialism.

As this is a blog comments section, there isn't room, nor is there inclination for that matter, to develop complete arguments without reference to any other authoritative sources, where those arguments have already been made so well by others.

One of them, Krugman, is a reference you have used yourself.

If you were to actually read some of the authors Jon M. mentioned, especially the Austrians, you would find that they convincingly discredit socialism as a viable system.

As I believe you have pointed out, some powerful central authority seems to spring up to defeat the dream of pure socialism, so there are no current or historical successful examples.

The problem with socialism is that there's an assumption that humans are almost angels, that everyone loves everyone else, and that their fondest wish is for everyone else to prosper and be happy. This just isn't human nature.

Examples of failures can be found throughout history - two common ones being the Plymouth Colony in Massachusetts, and the Jamestown Colony in Virginia.

In reality, people are interested in their own well being, and improving that well being. We all want things, and we all want more than we have.

Based on that, people find that by serving others, they can improve their own lives. By providing something others want, we help ourselves.

Efficiency in this context means directing scarce resources to what people want most, as evidenced by their willingness to forgo another opportunity to get it.

Although a free market system isn't perfect, it tends to be more "efficient" than anything else we know of, which means more overall well being.

 
At 3/24/2012 4:37 PM, Blogger Ron H. said...

"The issue is this. Any market based system would create a condition where I buy a product and later regret it. Maybe I smoke too many cigarettes or buy too expensive a vehicle. The question is, which system makes that kind of result more likely?"

Do you understand the concept of self determination, and responsibility for self?

A free market system makes it more likely you will get what you want. Do you really want someone to tell you how many cigarettes to smoke, or what car you should buy?

You can't be serious. Are you really now advocating for central planning or a nanny state?

 
At 3/24/2012 4:56 PM, Blogger Ron H. said...

"Does this mean we should stop drinking Coca-Cola? In his view not necessarily. Why? Because it wouldn't necessarily change anything. If I stop drinking Coke, will they notice? No. If a large scale organization ocurred that's a different story. He'd participate. But stop drinking it yourself and nothing happens."

In other words, there's no point in taking principled action unless lots of others do too. It's enough to rant and whine - and get paid for it - but no actual "living your convictions" is required.

Everyone else takes advantage of legitimate tax avoidance, why shouldn't I, even if I get paid to speak out against such atrocities?

How lame. You really don't see the problem?

That's not what MLK believed. That's not what Ghandi believed.

That's like Algore whining about CO2 while using 10 times the energy of the average person.

In any case, your Coke example isn't a good one. Boycotting a business to make a statement isn't the same as taking a positive action you have condemned others for taking.

 
At 3/24/2012 5:16 PM, Blogger Ron H. said...

"But there's a separate question, which is an emperical question. Which system creates conditions where I'm more likely to actually act in my own rational interest?"

And who, Jon, should decide what's in your own best interest, if not you?

When you go to the grocery store you may be exposed to more than 30,000 items for sale. would you prefer a smaller selection of items that someone else has determined is in your best interest?

Should ice cream, cookies, alcohol, tobacco be unavailable because I decided they aren't in your best interest?

Keep in mind, that if lots of people didn't buy cookies, they would soon no longer be available in stores. No one offers things that don't sell.

Would you recomend short circuiting that process and making decisions for other people?

 
At 3/24/2012 6:11 PM, Blogger Jon said...

you claimed something for Jon Murphy that he didn't write, then argued against what you had made up.

OK. Maybe I did. If you want to explain what was said and how I misrepresented it I'll address it.

If you were to actually read some of the authors Jon M. mentioned, especially the Austrians, you would find that they convincingly discredit socialism as a viable system.

Suppose someone offers a controversial claim that you reject and instead of offering any sort of justification just lists the names of several authors, each of whom has written dozens of lengthy books. Is that persuasive for you? Do you feel obligated to delve into all these sources?

Here's my belief. I don't think you know what Socialism is. I don't think you have any clue how to justify a claim to efficiency. Referring vaguely to the writings of various authors is nothing more than punting. You can't justify your claims. So you say "Read Krugman." Read what from Krugman? That's a non answer. You don't want to have to justify your assertions. That's not unusual.

Although a free market system isn't perfect, it tends to be more "efficient" than anything else we know of, which means more overall well being.

In your world the assertion that free market Capitalism is better than an alternative is good enough for justification. Not in my world. Do you even know what it is? If not, why do you say it is best?

 
At 3/24/2012 6:11 PM, Blogger Jon said...

A free market system makes it more likely you will get what you want.

That's an assertion. What is the basis for this claim?

Here's one thing a lot of people in the US want. They want a job. They want some sort of income so they can feed their families. Is this what Capitalism produces? No. In fact the capitalist kind of prefers high unemployment, which partly explains why there is so much unemployment in capitalist societies. If I make money by owning the equipment then I prefer there are many laborers clamoring for the limited number of jobs. I can extract more work from the people I have employed and generally reduce their compensation. They'll put up with it because they'll look out the window and see how bad things could be. I'll reap larger profits. Is this what people want?

And who, Jon, should decide what's in your own best interest, if not you?

If you read what I wrote you know that I think I should decide what is in my own interest.

Does this mean tobacco should be unavailable to me? Not necessarily. Here's what it does mean. Deceptive advertising should be blocked. Advertising that targets children, who are susceptible to such things and can get sucked in to pursuing products that are harmful to them, should also be blocked. Strip away the misleading stuff via regulation. Give a person a rational presentation of what cigarettes are about. Sure, you may die, but it tastes good for some people. You may like it. When the ADULT is fully appraised of the facts let him make his own decision. If he wants it at that point, fine. If he purchases it because he's been tricked, then this is an inefficiency. Free market Capitalism promotes these inefficiencies.

Notice how it works. I don't just offer an assertion that Capitalism has an inefficiency. I actually explain how it works. Assertions are not arguments. This is a free market inefficiency. Propose a market socialist inefficiency and I can at least evaluate it. If you offer nothing, why would I take your view seriously?

 
At 3/24/2012 6:38 PM, Blogger Ron H. said...

"And it's a little bizarre in a way. An alien would find it strange that in a world where a thousand people starve to death every hour we have billions of dollars spent attempting to persuade wealthy people to eat more than they already do and way more than they need."

There's that need word again. Are you deciding?

First of all, do you believe that fewer people would starve if wealthy people ate less?

What have you done personally to keep someone from starving, or is individual action of no value, unless a lot of others do the same thing?

Then, you might ask yourself what happens to those advertising dollars. When they are spent on commercials encouraging "the wealthy" to consume more, do they not provide incomes for people who then spend that money on other goods and services, ultimately providing opportunities for those who are starving?

How could you supply food to those who are starving, if they live in places where you have no access to them? Perhaps in countries ruled by despots, who take any aid for their own use rather than distribute it to those who need it?

People don't starve because there isn't enough food in the world, but because they are victims of political systems, often centrally planned, that don't allow them adequate opportunities to make a living for themselves. Protection of individual liberty and property rights plays a big part in that, as does enforcement of contracts.

 
At 3/24/2012 7:11 PM, Blogger Ron H. said...

"OK. Maybe I did. If you want to explain what was said and how I misrepresented it I'll address it."

You: "it's insane to structure economic arrangements that require we treat the earth like an infinite resource and require that we use more, waste more, throw away more."

Jon Murphy: "No Capitalist has ever advocated such an approach. In fact, capitalism encourages less wastefullness. The whole purpose of Capitalism is "how can I lower my costs to improve my profits?" That encourages, nay mandates, less resource use."

You: "Really? No capitalist has ever advocated increased consumption? No capitalist has ever crafted advertising and marketing strategies that prey on your irrational tendencies in an attempt to persuade you to purchase things you don't need and possibly don't even want? Capitalists instead hope that you will purchase only what you need, nothing more?"

As Jon M. pointed out, you are confusing businessman with capitalist, and I'm saying you misstated what he actually wrote. Perhaps more careful reading, without jumping to the conclusion that you already know what is being said, would help.

You don't need to address the issue, except to understand that you created a straw man.

 
At 3/24/2012 8:44 PM, Blogger Ron H. said...

"Suppose someone offers a controversial claim that you reject and instead of offering any sort of justification just lists the names of several authors, each of whom has written dozens of lengthy books. Is that persuasive for you? Do you feel obligated to delve into all these sources?"

No, but someone is doing just that on this thread. They are making controversial claims that I reject without offering support of any kind, not even recommended reading.

It's not really as complicated as you seem to think.

I am more likely to get something I want or need - my judgment of need - in a free market system that doesn't involve government interference. I'm more likely to produce something others need in that system. This is mutually beneficial to everyone, and means that resources are being allocated most efficiently to provide for everyone's wants and needs.

The more I provide what others want, the richer I will get. the more government interferes with this process the less efficient it gets at allocating resources correctly.

"Here's my belief. I don't think you know what Socialism is."

OK, I'm tired of that repetitive claim, so why don't you explain it, briefly, as best you can so I will have your definition,. and it won't any longer be an issue.

"I don't think you have any clue how to justify a claim to efficiency. "

I did previously, and I just did it again in this comment. What don't you understand?

"Referring vaguely to the writings of various authors is nothing more than punting."

Those are Jon Murphy's recommendations, but I think they are good ones, except for Krugman, who is no longer a respected economist, but a political hack and ill informed newspaper opinion writer.

I mentioned his name because he is on that list, and also someone you have referred to in your comments.

"You can't justify your claims. So you say "Read Krugman." Read what from Krugman? That's a non answer. "

I didn't recommend reading Krugman, and I never would, for the reasons I gave above. I just mentioned him as a reference you are already familiar with. He hasn't always written nonsense, his early scholarly work on international trade is quite good.

"You don't want to have to justify your assertions. That's not unusual."

I don't need to justify anything, Jon, I'm not trying to convince you of anything, as I don't think that's possible. You might, however, want to do a better job than you have been doing, of supporting your trollish comments on what is basically a libertarian and conservative econ blog.

Me: "Although a free market system isn't perfect, it tends to be more "efficient" than anything else we know of, which means more overall well being."

"In your world the assertion that free market Capitalism is better than an alternative is good enough for justification. Not in my world. Do you even know what it is? If not, why do you say it is best?"

I've explained that, Jon, it's your turn. Explain What capitalism and socialism are, Provide references if necessary - except for Chomsky and your own fact free blog, and tell us why socialism is the more efficient system.

 
At 3/24/2012 9:32 PM, Blogger Ron H. said...

"Notice how it works. I don't just offer an assertion that Capitalism has an inefficiency. I actually explain how it works. Assertions are not arguments."

LOL

You have presented nothing but assertions, and confused fraud with inefficiency to boot. Do you even understand what you're writing?

In addition you are asking someone, I assume those wise and benevolent nannies in government, to protect you from those unscrupulous capitalists whose only interest is to screw you in any way they can.

You poor baby! How terrible it must be to feel so helpless!

It's obvious you don't understand markets.

Children, by definition, have parents to make buying decisions for them, and to help them until they are experienced and mature enough to analyze potential transactions for themselves.

"This is a free market inefficiency. Propose a market socialist inefficiency and I can at least evaluate it."

How many ways can I explain this? Socialism is by its very nature inefficient.

The best possible outcome in any voluntary transaction is when both parties get what they expect to get, and both are better off than they were before, because they have something they value more than what they gave up in exchange.

Any interference in that transaction by government in the form of regulations, taxes, or other restrictions diminishes the overall satisfaction of the two parties by adding costs.

If you would like lengthy explanations of that simple concept, I can recommend reading that will give any level of enlightenment you desire.

You should understand that the term market socialism, by definition, contains a level of contradiction.

"If you offer nothing, why would I take your view seriously?"

Jon, it's not important to me whether you take my view seriously, as I don't respect your judgment. You make laughable claims without support, and it's obvious you have no desire to learn anything new.

I just happened to have a lot of time today, and enjoy occasional fruitless exchanges with clowns like you. It helps me remember why I'm not a socialist.

Still looking forward to your definitions.

 
At 3/25/2012 1:38 AM, Blogger PeakTrader said...

Government has an important role to improve society or the general welfare of the masses.

However, it can go too far.

Look at health care. Government has driven up the price of health care for the masses through excessive regulations to the point where some workers are paying $1,000 a month for health care insurance, while others simply can't afford it.

Look at energy. Without excessive regulations and taxes, the U.S. can easily produce an additional 1 million barrels a day of crude oil.

Look at government debt. It has spun out of control.

There are many segments in the economy where government has made it more difficult, through regulations, taxes, fees, fines, fares, tolls, etc. to improve your standard of living.

 
At 3/25/2012 3:04 AM, Blogger Ron H. said...

"No. In fact the capitalist kind of prefers high unemployment, which partly explains why there is so much unemployment in capitalist societies. If I make money by owning the equipment then I prefer there are many laborers clamoring for the limited number of jobs. I can extract more work from the people I have employed and generally reduce their compensation. They'll put up with it because they'll look out the window and see how bad things could be. I'll reap larger profits"

This is utter nonsense. If there is high unemployment and people with no income, who is going to buy my products so I can "reap" those larger profits?

Why do capitalists always "reap" profits? Don't any of them just earn profits? You must not realize how silly that sounds.

If I DO reap large profits, what can I do with my earnings? If I spend it, I might create jobs for those unemployed churls I'm trying to keep in poverty. I can't buy capital equipment for the same reason, and I would also have to hire more workers to operate it. You know how I hate seeing workers prosper.

I can't save it in the bank, or the bank might loan it to some bozo who will startup a business that competes with me, and in the process hire some of thse workers I'm trying so hard to crush.

I can only stuff those worthless green papers in barrels in my basement.

You would benefit from some education in economics, Jon. Quit sniffing Chomsky's jock, and do some reading.

You haven't addressed my questions about our heirs. Your rich ones, and my poor ones. Is inequality OK? Should my heirs demand their "fair share" of the wealth?

 
At 3/25/2012 10:12 AM, Blogger Jon said...

There's that need word again. Are you deciding?

Do you think Americans eat too much food? Here's a map of obesity trends.

http://current.com/1ithi4c

First of all, do you believe that fewer people would starve if wealthy people ate less?

Not under Laissez-Faire Capitalism, but then I don't think Laissez-Faire Capitalism is all that great.

Then, you might ask yourself what happens to those advertising dollars. When they are spent on commercials encouraging "the wealthy" to consume more, do they not provide incomes for people who then spend that money on other goods and services, ultimately providing opportunities for those who are starving?

The same would be true if we had an economic system that lead people to dig ditches and then re-fill them for pay, but would we call that an efficient system?

How could you supply food to those who are starving, if they live in places where you have no access to them? Perhaps in countries ruled by despots, who take any aid for their own use rather than distribute it to those who need it?

I would argue that Laissez-Faire Capitalism leads quite naturally to the imposition of despots in foreign countries. All of Africa, the Middle East, Latin America. This is a natural byproduct of Laissez-Faire Capitalism. A good summary here if you are interested.

http://pink-scare.blogspot.com/2012/03/what-is-imperialism.html

 
At 3/25/2012 10:13 AM, Blogger Jon said...

Regarding my so called straw man, the distinction between the capitalist and businessman is irrelevant to my point. The capitalist as a capitalist doesn't develop marketing strategies. That's not my point. My point is on the capitalist system the investor wants to maximize his return on investment. So who attracts his money? Corporations that maximize profits. How do they achieve that on Laissez-Faire? They develop misleading advertising that induces people to actually purchase things they don't need and may not want if they hadn't been manipulated. That's waste right there. Fine, it's not the capitalist that does it, but it's the incentive structure that exists within Laissez-Faire Capitalism.

No, but someone is doing just that on this thread. They are making controversial claims that I reject without offering support of any kind, not even recommended reading.

Explaining how the institutional structure of Capitalism leads directly to persuasive techniques that lead further to irrational consumption is called offering evidence.

The more I provide what others want, the richer I will get.

But that can involve sophisticated methods of persuading them that are difficult to defend against. It's not an accident that companies spend billions of dollars on advertising that has nothing to do with laying out the specs of a product so the consumer is properly informed.

Suppose you induce a Chinese worker to come to Saipan and sew clothes together and you convince them it is in their best interest. When they get there they realize it's not so great. You make them work in garment factories without bathroom breaks. You tell the women to provide you with sexual favors, and if they don't they are fired. You are giving them what they want. They can leave your job after all. But they have no money to get home, no means of providing food for themselves. Did you provide them what they "want"?

OK, I'm tired of that repetitive claim, so why don't you explain it, briefly, as best you can so I will have your definition,. and it won't any longer be an issue.

I could do that. But I find it entertaining that here you are with no clue about what it is, hence your ridiculous objections, and yet somehow you know Socialism is terrible. It's funny though a bit sad. I'll tell you what it is below.

 
At 3/25/2012 10:13 AM, Blogger Jon said...

I mentioned his name because he is on that list, and also someone you have referred to in your comments.

Here's the logic:

Me-Here's an argument.

John Murphy-That's refuted by Krugman and others.

Me-Do you really think that constitutes a refutation of what I said.

RonH-Come on. He mentioned Krugman after all. Why aren't you convinced? You like Krugman.

Me-Would you be convinced if I name dropped and nothing more? What of Krugman should I read.

RonH-Actually Krugman is useless.

I find this all a little bizarre once again.

The best possible outcome in any voluntary transaction is when both parties get what they expect to get, and both are better off than they were before, because they have something they value more than what they gave up in exchange.

Any interference in that transaction by government in the form of regulations, taxes, or other restrictions diminishes the overall satisfaction of the two parties by adding costs.


OK, let's consider a real world example. Let's suppose you are driving in death valley with your wife and children. You decide to take a side trail and unfortunately your car breaks down and it's unlikely you will be found. You'll probably die. But luck intervenes. A capitalist decided to take the same rabbit trail and he finds you. He's got water. He's got a ride out of the area for you. But before offering it he wants you to sign a contract. In exchange for the water he wants $1 million of your future earnings and access to your wife sexually for the next 5 years. What do you think? When you get back to civilization should this contract be enforced? You were obviously made better off by the transaction. You'd have been dead. Any government intervention would diminish the overall satisfaction of the two parties you say. You stand by that?

Because in our big government world the contract would be ruled "Unconsciounable" by the law and would be thrown out. There's that nanny state intervening and ruining everything.

PeakTrader writes:

Look at health care. Government has driven up the price of health care for the masses through excessive regulations to the point where some workers are paying $1,000 a month for health care insurance, while others simply can't afford it.

Health care in the rest of the industrialized world, which has much more government involvement, costs about half per capita as what is paid in the US and produces results that are much better according to all the international evaluations.

 
At 3/25/2012 10:14 AM, Blogger Jon said...

This is utter nonsense. If there is high unemployment and people with no income, who is going to buy my products so I can "reap" those larger profits?

That's true. On capitalism you see the depressed demand which causes long term problems. But short term you can see that your wage bill is pretty high. You want to do what you can to reduce it.

You haven't addressed my questions about our heirs. Your rich ones, and my poor ones. Is inequality OK? Should my heirs demand their "fair share" of the wealth?

Actually I did answer your question on heirs. I suppose if you knew what Socialism was you'd know the answer, but since you don't I'll explain.

Capitalism is a system whereby you have a minority that earns the bulk of their money via an ownership claim to the means of production and you have a majority that earns money via wage labor. On Socialism nobody earns money by virtue of an ownership claim. The ownership lies with the workers of the company, not outside investors. Workers aren't paid a wage. They are paid by virtue of the profits generated. More profits, more income. The ratio going to the various people is decided democratically by the workers themselves. You'd pay more in order to attract higher skilled persons. So there is a market for labor. Also a market for goods produced.

I should say you can operate via a market, but there are different forms of Socialism that would go with central planning. That's not something Socialists I read advocate. The key feature on Socialism though, the core feature, is that the workers own and control the means of production. On Capitalism an outside investor can own the tools, so even a non-worker is paid via profits.

So with that basic understanding you can see how so many of your objections miss the mark. A socialist doesn't want to waste materials in production because his income is tied directly to the profits of the company.

So if you want to save your money that's fine. On Socialism money doesn't earn more money. You don't earn money by investment. You earn by working. If you don't work you don't earn income. So suppose I live very cheaply and give my kids a million dollars. That's fine. They can use it to consume. But it doesn't grow. So they won't be able to live off of it in perpetuity. Eventually that money will run out. Maybe not in their lifetime, but possibly in the lifetime of their children. And they will have to go back to work.

 
At 3/25/2012 10:14 AM, Blogger Jon said...

With a basic understanding of what Socialism and Capitalism are you can also perhaps come to understand why you hear a lot of hostility towards Socialism. There's a group of people on Capitalism that get most of the money and don't do any of the work. How do you think they feel about Capitalism? They love it. And since they have the most money they of course have the loudest megaphones. They can buy the politicians, the think tanks, the media. And so you hear this constant drum beat about how Socialism is terrible and Capitalism is great. Further, when you see a state attempt to pursue Socialism you can see how this poses an enormous threat to the interests of today's capitalists, who get most of the money and do none of the work. So you have to send the B-52's to Vietnam. Not because they are a threat to safety. They are a threat to the way of life of the richest people in the world. If they are successful they are a model others will follow. The virus will spread, and suddenly the capitalist has to work just like everybody else. That's why we go to war basically.

Look at Cuba. Since the fall of the Soviet Union US warfare against them has intensified. They really are a threat. To the super rich who don't work.

Despite that Cuba is basically the only place in the region where starvation has been eliminated, homelessness eliminated, infant mortality rates collapsed, illiteracy disappeared. Not so in pre-Castro capitalist Cuba. They manage this despite the constant warfare directed against them. Hence they really are a threat. But not to you and me. To the super rich.

 
At 3/25/2012 10:47 AM, Blogger PeakTrader said...

Jon says: "Health care in the rest of the industrialized world, which has much more government involvement, costs about half per capita as what is paid in the US and produces results that are much better according to all the international evaluations."

The U.S. government has raised the cost of health care so high that many Americans can't afford it. Even with the high cost, the U.S. would have the highest life expectancy in the world if infant mortality rates across countries were equal, and exclude the black population, motor vehicle deaths, and gunshot deaths.

 
At 3/25/2012 11:03 AM, Blogger PeakTrader said...

Government has done a great disservice to the American people by forcing them to pay higher premiums and co-payments, or pricing them out of the market, through over 100,000 pages of regulations, and it'll be a greater disservice when it takes over health care.

How to reduce health care costs:

1. Limit medical lawsuits and awards, to lower malpractice insurance premiums and unnecessary medical tests.

2. Lower standards to practice medicine (to increase labor).

3. Allow insurance companies to sell health-care policies across state lines (currently, average health care insurance ranges from a low of $1,254 in Wisconsin to a high of $8,537 in Massachusetts).

4. Allow innovation (example below):

Kaiser Microclinics At 50% of the Cost of a Full-Service Hospital

Two doctors working out of a microclinic at a mall could meet 80% of a typical patient's needs. With a hi-def video conferencing add-on, members could even link to a nearby hospital for a quick consult with a specialist. Patients would still need to travel to a full-size facility for major trauma, surgery, or access to expensive diagnostic equipment, but those are situations that arise infrequently. The per-member cost at a microclinic is roughly half that of a full Kaiser hospital.

 
At 3/25/2012 11:12 AM, Blogger Paul said...

Jon's M.O. is to come here and inform us how we're all ignorant fools, and how we really could benefit from a society where people like Jon force us to live as he sees fit.

"On Socialism nobody earns money by virtue of an ownership claim. The ownership lies with the workers of the company, not outside investors."

Look how he just assumes the existence of the company, how did it come into existence without going through the start-up phase? In Jon's world, I can't save or borrow some money to start a business of my own and then hire some workers if I make a go of it since I'm just a parasite "investor" who "reaps" profits. Well, who would stop me? Oh right, gonna need some government goons to crack heads if somebody goes around trying to be an individual. Hey Jon, you forgot to mention that last part!

On the other hand, Jon does give us a clue via the predictable example of the squalid regime that remains dear to all the world's leftist crackpots and wannabee tyrants: Castro's Cuba.

"They really are a threat. To the super rich who don't work."

Yeah, that's the reason.

 
At 3/25/2012 12:42 PM, Blogger Jon said...

On the other hand, Jon does give us a clue via the predictable example of the squalid regime that remains dear to all the world's leftist crackpots and wannabee tyrants: Castro's Cuba.

I'll take Cuba over free market Haiti any day of the week.

 
At 3/25/2012 1:12 PM, Blogger Jon said...

Look how he just assumes the existence of the company, how did it come into existence without going through the start-up phase? In Jon's world, I can't save or borrow some money to start a business of my own and then hire some workers if I make a go of it since I'm just a parasite "investor" who "reaps" profits.

I'm reading a book called "Against Capitalism" by Albert Schweikart right now and the kind of Socialism he advocates actually would permit wage labor and ownership if the company is small enough. So suppose I start mowing lawns and I'm successful enough to bring on 4 or 5 others that I pay a wage and they cut the grass and I work the books. That's fine. The problem arises when the company get so large that the owner doesn't work the books or anything. In perpetuity he doesn't work, nor do his children, and they use the surplus wealth generated to squeeze the other grass cutters more and more, ace out any competition, buy politicians. The result is widespread misery. So Capitalism is fine on a small scale but causes problems on a large scale.

On investment, take a look at the Soviets or Cubans. The Soviets adopted some aspects of Capitalism. They retained wage labor and they didn't allow workers to control the business. This is the very antithesis of Socialism. On the other hand they did eliminate Capitalistic private property relations. People didn't make money from investment. So it was a kind of half Socialist half Capitalist system. Where did investment come from? It was state directed.

Schweikart advocates taxation to fund a government and the government's primary role is to disburse those revenues on a per capita basis for investment purposes. There are other ways of handling investment as well.

I'm not advocating a Soviet style economy, but people often make the mistake of claiming it was a total failure by comparing it to the US. After WWII the US had half the world's wealth and 6% of the world's population. You can't just say life is worse in the Soviet Union and this is proof that our economics are better than theirs. You have to look at where they started. Look at them in 1917. A total backwater. Look at how much they lost in WWII. Despite that their economic growth was a bit faster than ours. Cuba I've already mentioned. Sure, we are better than them, but look at their peers. Haiti, Nicaragua, Panama, Colombia, El Salvador. Places where the US has imposed right wing capitalistic governments. You'd rather live in Cuba than any of those places.

 
At 3/25/2012 1:56 PM, Blogger PeakTrader said...

Jon, would you really rather "live in Cuba than any of those places."

Cuba - Wikipedia

"The Cuban state adheres to socialist principles in organizing its largely state-controlled planned economy.

Most of the means of production are owned and run by the government and most of the labor force is employed by the state.

Recent years have seen a trend towards more private sector employment.

By 2006, public sector employment was 78% and private sector 22%, compared to 91.8% to 8.2% in 1981.

Capital investment is restricted and requires approval by the government.

The Cuban government sets most prices and rations goods.

Any firm wishing to hire a Cuban must pay the Cuban government, which in turn will pay the employee in Cuban pesos.

Cubans cannot change jobs without government permission.

The average wage at the end of 2005 was 334 regular pesos per month ($16.70 per month) and the average pension was $9 per month."

 
At 3/25/2012 2:01 PM, Blogger PeakTrader said...

Jon, also, perhaps, you didn't notice, the Soviet economy collapsed.

 
At 3/25/2012 2:08 PM, Blogger PeakTrader said...

"We Pretend to Work, They Pretend to Pay Us"

If you didn't live in the Soviet era, the old adage was "We pretend to work, they pretend to pay us."

It was a phrase that rang true everywhere about the collectivization system -- people didn't work very hard in collective farms, they stole the implements and produced whenever they could, they did as little as possible for the state, and put their passion into their own truck gardens, which provided one third of the Soviet Union's actual food sources.

 
At 3/25/2012 2:27 PM, Blogger Ron H. said...

You: "Do you think Americans eat too much food? Here's a map of obesity trends."

Well, I can't say for sure. You would have to ask them. But I do know that I have no right to tell them how much to eat.

Me: "First of all, do you believe that fewer people would starve if wealthy people ate less?"

You: "Not under Laissez-Faire Capitalism, but then I don't think Laissez-Faire Capitalism is all that great."

You are misusing the term Laissez-Faire. The term you want is Croney-Capitalism. Please replace the words "laissez-faire" with "croney" every where you find it in your comments.

Me: "Then, you might ask yourself what happens to those advertising dollars..."

You: "The same would be true if we had an economic system that lead people to dig ditches and then re-fill them for pay, but would we call that an efficient system?"

I would call that government stimulus spending, based on the false premise, beloved by Keynesians, that ANY spending creates demand, and therefore economic growth.

It is NOT like the advertising example, which includes a voluntary business decision to spend money on marketing, just as I might decide to spend money on a billboard by the highway advertising my restaurant at the next offramp. Do you understand the difference? No private business would pay people to dig holes and fill them in. That's only possible with government attempting to create economic outcomes.

You: "I would argue that Laissez-Faire Capitalism leads quite naturally to the imposition of despots in foreign countries. All of Africa, the Middle East, Latin America. This is a natural byproduct of Laissez-Faire Capitalism. A good summary here if you are interested."

[link to article on imperialism]

Again, you are describing croney-capitalism, in which business people enlists the tyranny of government to force outcomes they favor. This isn't free markets, which by definition include only voluntary transactions. Capitalism, has nothing to do with it. It's political power that's the problem.


Me: "Any interference in that transaction by government in the form of regulations, taxes, or other restrictions diminishes the overall satisfaction of the two parties by adding costs."

 
At 3/25/2012 2:32 PM, Blogger Ron H. said...

You: "OK, let's consider a real world example. Let's suppose you are driving in death valley with your wife and children. You decide to take a side trail and unfortunately your car breaks down... A capitalist decided to take the same rabbit trail and he finds you. He's got water. He's got a ride out of the area for you..."

LOL, that's not a real world example, but a common theoretical thrown up in discussions of "fairness", and "duress". I'm not bound by what I agree to under duress. You probably want to skip the requirement for sex with my wife, as I can't commit another person to action against their will. Natural rights: Life, liberty, pursuit, and all that.

I have to wonder how I knew he was a capitalist? What gave him away? I don't see anything in that example that differentiates him from a prospector, a traveler like me, or a factory worker, any of which might see an opportunity to profit from my predicament.

That imaginative story contains no government interference, but only judgment or arbitration, at a later time, something that doesn't really require government. The "capitalist" wasn't required by law to wear a hair net or wash his hands before serving me water, nor was he required to provide special accomodations for my wheelchair bound wife, and he collected no sales tax. In other words, the transaction was free of government interference.

You"Because in our big government world the contract would be ruled "Unconsciounable" by the law and would be thrown out. There's that nanny state intervening and ruining everything."

But I live on a private island, with no government. The same one the capitalist lives on. When we return home, we will be beyond any government control. What now?

I could as easily turn this around by claiming self defense. The capitalist is threatening my life, and that of my family, so I am justified in drawing my Desert Eagle .44 Magnum and putting one between his eyes. Problem solved.

We can create lots of silly scenarios if you like.

 
At 3/25/2012 4:17 PM, Blogger Ron H. said...

Me: "This is utter nonsense. If there is high unemployment and people with no income, who is going to buy my products so I can "reap" those larger profits?"

You: "That's true. On capitalism you see the depressed demand which causes long term problems. But short term you can see that your wage bill is pretty high. You want to do what you can to reduce it."

Everything can't happen in the immediate moment. My grandfather saw this depressed demand, and it has now become overwhelming. There are vast opportunities for sales if I'm only willing to hire some more people, and take my boot off their neck for awhile.

Your response to that question was grossly inadequate. Try harder.

You: "Actually I did answer your question on heirs. I suppose if you knew what Socialism was you'd know the answer, but since you don't I'll explain."

You: "Capitalism is a system whereby you have a minority that earns the bulk of their money via an ownership claim to the means of production and you have a majority that earns money via wage labor. On Socialism nobody earns money by virtue of an ownership claim. The ownership lies with the workers of the company, not outside investors. Workers aren't paid a wage. They are paid by virtue of the profits generated. More profits, more income. The ratio going to the various people is decided democratically by the workers themselves. You'd pay more in order to attract higher skilled persons. So there is a market for labor. Also a market for goods produced."

Where to begin? You are missing some basics:

Where does the means of production come from? Building a factory and production goods requires capital. You - the group of workers - must pay someone to make things and build things. Only savings - deferred consumption - can provide that capital, but you say that savings can only be consumed, so how can this work?

A capitalist, and that's not an evil being, would provide that capital, to pay the workers for the factory and the production goods, and pay the factory workers until products are sold. The capitalist has worked like everyone else, but has deferred some consumption, saved some of his earnings, and is rewarded for that deferral with "interest" or "profit". He isn't being paid for not working, he is being paid for work he did previously, and is receiving his earnings now.

A "businessman" would most likely be the one to coordinate this activity, for a share of the "profits", in exchange for his "work". The capitalist may be, but need not be, the businessman himself.

It might be that the capitalist is the entire group of factory workers, who plan to share the profit from factory production, but without that deferred consumption, there is no way to build the factory. It doesn't matter how many people are involved in providing the capital, it works the same way. An ownership claim by one person, a group of people (stockholders), or everyone who starts working in the new factory is still an ownership claim to the proceeds.

 
At 3/25/2012 4:21 PM, Blogger Ron H. said...

How many workers do you think can wait for a factory to be built, production to begin, and products to be sold before being paid for their labor so they can eat. It requires deferred consumption no matter how you picture it. Those willing to wait are known as owners, and those who wish to be paid for their work immediately, trade their labor for money, and are called workers.

If I inherit great wealth from my parents, I am not living without working, I am living on my parents previous work. You can make whatever moral judgements you wish as to my worthiness, but you have no economic arguments against the concept.

You: "I should say you can operate via a market, but there are different forms of Socialism that would go with central planning. That's not something Socialists I read advocate. The key feature on Socialism though, the core feature, is that the workers own and control the means of production. On Capitalism an outside investor can own the tools, so even a non-worker is paid via profits."

You have invoked central planning when you make a rule that savings can't be invested, but must be consumed. It makes no difference whether that's dictated by a king, an oligarchy, or a democratic majority of workers.

You: "So with that basic understanding you can see how so many of your objections miss the mark. A socialist doesn't want to waste materials in production because his income is tied directly to the profits of the company."

A capitalist (actually, a businessman) doesn't want to waste materials in production because his income is tied directly to the profits of the company.

You: "So if you want to save your money that's fine. On Socialism money doesn't earn more money. You don't earn money by investment. You earn by working. If you don't work you don't earn income. So suppose I live very cheaply and give my kids a million dollars. That's fine. They can use it to consume. But it doesn't grow. So they won't be able to live off of it in perpetuity. Eventually that money will run out. Maybe not in their lifetime, but possibly in the lifetime of their children. And they will have to go back to work."

Interest and profit are the concepts ignored by socialists. If I can't defer consumption for higher future consumption, I have no incentive to save, but to consume everything now. Human nature is such that present consumption is always valued above future consumption. If I can eat a cookie now, why should I wait to eat the same cookie later? If I can have 2 cookies later, I might value 2 future cookies more than 1 present cookie.

In any case, I've earned the cookie by working, it's my property to do with as I wish, and if I eat it later you can't call it income I haven't earned by working. If I now have 2 cookies, it's because I previously traded my earned cookie to someone who wanted it right then, and who valued 1 present cookie more than 2 future cookies. A great example of a voluntary transaction that makes both parties better off. What's the problem?

If I exchange my cookie for a factory that will produce cookies for me in the future, what's the problem?

 
At 3/25/2012 4:59 PM, Blogger Paul said...

"I'll take Cuba over free market Haiti any day of the week."

Wait....,so now Haiti is the pinnacle of the free market? Then where are all the eeeevil Haitian investors dropping Dengue fever onto the bearded dictator's island paradise?

 
At 3/25/2012 5:10 PM, Blogger Paul said...

"...by Albert Schweikart right now and the kind of Socialism he advocates actually would permit wage labor...."

Let me get this straight, there are variations of socialism? Huh, I thought you were here to enlighten us nincompoops with the One True Definition.

"..Sure, we are better than them, but look at their peers. Haiti, Nicaragua, Panama, Colombia, El Salvador. Places where the US has imposed right wing capitalistic governments. You'd rather live in Cuba than any of those places."

Nicaragua: currently ruled by Chavez flunkie and Sandinista Daniel Ortega.

Panama: You've obviously never been there. Gringo ex-pats are flocking there. Not so much to Cuba.

Colombia: It is to laugh. My wife is from there. I've been there several times. Like Panama, you've never stepped foot onto Colombian soil, have you? Medellin is a fabulous city where, again, gringos are starting to retire. It's great as long as you don't venture too far into the countryside where your guerrilla friends terrorize the populace.

And how exactly did the US "impose" a right-wing government on democratic Colombia? I'm sure you will be pleased to learn the capital city of Bogota just elected a former terrorist guerrilla as mayor.

 
At 3/25/2012 5:43 PM, Blogger Ron H. said...

"Despite that Cuba is basically the only place in the region where starvation has been eliminated, homelessness eliminated, infant mortality rates collapsed, illiteracy disappeared."

Complete State control. I won't go hungry, I have clothes and a roof over my head. There is no unemployment, but I can't leave or change jobs.

Many slaves in antebellum US could say the same thing.

I'm not sure the Cuba you describe is all that desirable. Many Cubans seem to agree. More leave at risk of being eaten alive by sharks, then arrive from other hellholes.

I have offered to recommend some specific reading to you, and you haven't responded, so I'll just do it.

If you are unfamiliar with Austrian economics, I highly recommend A Short Course In Austrian Economics, as it is VERY short, but includes some of the basic concepts I believe you are missing.

The first chapter contains 3 sections, and is 3 pages long. Surely, not too long for anyone.

Beyond that, It's hard to beat Economics In One Lesson by Hazlitt.

 
At 3/25/2012 6:24 PM, Blogger Paul said...

Ron H,

You got to love how Jon just spits out his master Castro's unverifiable facts. Does any non-brainwashed person seriously believe illiteracy in Cuba has been eliminated? I buy that like I buy the claim that Michael Moore visited a Cuban hospital where average Cubans get health care in his movie Sicko

 
At 3/25/2012 6:56 PM, Blogger Ron H. said...

Paul,

Jon is misguided and misinformed. He trolls here periodically for some reason, and his narrative never wavers, which tells me he isn't really open to serious discussion, but merely interested in pushing an agenda.

His confusion of definitions is telling. He frequently writes "laissez-faire capitalism" or refers to free markets when it's obvious he's desscribing crony capitalism and central planning.

It seems that his main source of information is Noam Chomsky.

 
At 3/25/2012 7:04 PM, Blogger Jon said...

Jon, would you really rather "live in Cuba than any of those places."

You better believe it. Starvation seems pretty unpleasant to me. That's what you get in right wing free market Haiti.

Jon: "Do you think Americans eat too much food? Here's a map of obesity trends."

RonH: Well, I can't say for sure. You would have to ask them.


No I would not.

You are misusing the term Laissez-Faire. The term you want is Croney-Capitalism.

No, Laissez-Faire is correct. On Laissez-Faire Capitalism my goal is to maximize the profits to investors. So let's just suppose I have 1000 calories of food to sell. A poor African has only eaten 500 today and an American has already eaten 2000. If creating deceptive advertising that causes the American to consume those extra 1000 calories and that is more profitable than getting it into the belly of the African, then what should I do on Laissez-Faire Capitalism?

I would call that government stimulus spending, based on the false premise, beloved by Keynesians, that ANY spending creates demand, and therefore economic growth.

You've gotten confused. In my analogy the government didn't pay anyone to dig ditches and refill them. The economic system with or without government did. Remember, we're talking about advertising that preys on irrational tendencies in people in order to persuade them to purchase things that are not in their rational interest. Billions is spent in advertising in order to induce the purchase of billions more in consumer goods that are not really needed from a rational perspective. Of course they are needed for profit maximization, so they are rational from the Laissez-Faire capitalistic position. Meanwhile poor Africans are starving. Your answer is it's OK because at least people in marketing get a salary and that boosts the economy. You are the Keynsian here, arguing that it's OK to waste because of the positive effects. I'm saying regardless of that why shouldn't we call this an inefficiency? If this is not an inefficiency you'll have to define what you mean by inefficiency.

Again, you are describing croney-capitalism, in which business people enlists the tyranny of government to force outcomes they favor.

Absolutely not. Did you read the article? Capitalism seeks profits and that means exploitable labor. The barrier to exploitable labor is often government, meaning on LF Capitalism we can see the incentive structure for dislodging unfriendly governments (meaning unfriendly to profits). Socialism's incentive structure is different in important ways that actually reduce these kinds of incentives.

LOL, that's not a real world example, but a common theoretical thrown up in discussions of "fairness", and "duress".

Oh, I thought you believed that

Any interference in that transaction by government in the form of regulations, taxes, or other restrictions diminishes the overall satisfaction of the two parties by adding costs.

Some interference is OK. As long as you are under duress. Define duress for me. There was no threat. No violence. Purely voluntary transaction. Sure, you have a desperate need for water, but is the capitalist obligated to just give it to you? Is there something wrong with coming to agreeable terms?

You probably want to skip the requirement for sex with my wife, as I can't commit another person to action against their will.

Sure. He'll want both your signature and hers. Of course if you don't like that bargain that's fine. He'll leave and you, your wife, and your children will die. That is if you believe that voluntary transactions not involving violence or force are binding. Or do you not believe that?

 
At 3/25/2012 7:05 PM, Blogger Jon said...

I have to wonder how I knew he was a capitalist? What gave him away?

He believes what you believe about contracts, property rights, etc. Voluntary transactions entered into should not be altered by some sort of authority like a government.

That imaginative story contains no government interference, but only judgment or arbitration, at a later time, something that doesn't really require government.

Regardless of who the arbiter is the contract was voluntary and not done under violent threat or compulsion. You are free to choose.

But I live on a private island, with no government.

I don't know where you live, but you are in Death Valley right now and have just entered into a voluntary contract with a Capitalist and your wife has done the same. Any interference in that transaction by the government would diminish the overal satisfaction of the various parties, right?

Where does the means of production come from?

You tell me. Where did the capitalist get the right to ownership of the land? He bought it from someone. Where did he get it? He bought it. And where did he get it? Go back far enough and you get to a point where nobody owned it. How did it come to be owned. In the US it was genocide and theft. That's just a fact. Someone, it may have been you, previously said it was "homesteaded". The land wasn't being used. But it was. Tens of millions of indigenous people lived here and they absolutely used the land. Not every part of it but much of it that is today owned by Capitalists. So this same question turns right back on you. You can't justify the initial acquisition of the land. That was pure thievery and murder.

Only savings - deferred consumption - can provide that capital

That's absolutely false. If the federal government right now ran the printing press and created thousands of crisp $100 dollar bills, that literally can fund capital right now. That is the funding of capital without savings.

The capitalist has worked like everyone else, but has deferred some consumption, saved some of his earnings, and is rewarded for that deferral with "interest" or "profit".

He may have deferred consumption, but this may be his preference. Should we reward someone for indulging their preferences?

Suppose I'm Mitt Romney and I'm worth hundreds of millions of dollars. I have two choices. I could spend all my money in the span of a month or two and have nothing left. Or I could defer consumption and have food to eat 10 years from now. Which is my preference? You act like it's some sort of big sacrifice he's made in that he's willing to not buy 20 homes and several private jets today. How is it a sacrifice when he'd prefer not to blow through his money immediately. Why should he be rewarded for doing precisely what he would prefer?

If I inherit great wealth from my parents, I am not living without working, I am living on my parents previous work.

Probably not. If your parents give you $10 billion in Wal-Mart stock and it grows to a value of $20 billion after they died, who did the work that created the increase? Not your father, Sam Walton. He's dead. He's not doing anything. The slave like workers in China work very hard to create the value. The cashiers and greeters. The stock boys and supply chain managers. They are the ones doing the work that causes the stock price to go up. The managers and CEO of the company organize the work. They create the value.

 
At 3/25/2012 7:05 PM, Blogger Jon said...

Or are you going to say that the man in the casket over the last 20 years is the one that did it? The children in Africa making toys and electronics had nothing to do with it?

A capitalist (actually, a businessman) doesn't want to waste materials in production because his income is tied directly to the profits of the company.

Who said otherwise? My point is this efficiency applies equally to Socialism and Capitalism. It was invoked as if it somehow showed Capitalism was better than Socialism.

Human nature is such that present consumption is always valued above future consumption.

Absolutely false once again. I know that I won't be able to work when I'm older. If you were to give me the choice of having $1000 now and spending it on consumer products (like a vacation or a TV) or $800 (in real terms) when I'm 70 years old I'll take the $800. When I'm 70 I may not be able to work. I'll really need that money. Today I'm working and I have an income, so I don't need the money as badly. You're just dead wrong.

Let me get this straight, there are variations of socialism?

Yep. Welcome to Econ 101. There are also variations on Capitalism.

It's great as long as you don't venture too far into the countryside where your guerrilla friends terrorize the populace.

Even Haiti has many wealthy people that live great. What I mean is if you were to tell me I was going to live in any of these countries but there was an equal chance I could be a member of any class, I'd take Cuba. A good chance you'll starve in Haiti. A tiny chance you'll hit the lotto and live well in Haiti.

but I can't leave or change jobs.

Generally you can leave Cuba. Cuba in fact petitions the US to permit more people to leave Cuba and come here, but the US blocks it, preferring instead to see people risk their lives coming in a rickety boat. We give a huge incentive for Cubans to come here via dangerous means, but don't provide many with a legal means. See if you can figure out why that is.

 
At 3/25/2012 9:21 PM, Blogger Paul said...

"Even Haiti has many wealthy people that live great."

But you said it was free market purified. Why isn't it teeming with the Super Rich Who Run Everything and Hassle Saintly Bearded Dictators? Dr Evil should at least have a mcmansion in Port Au Prince.

"Yep. Welcome to Econ 101. There are also variations on Capitalism."

I love it! Again, I thought you were her to explain "Socialism" to us dullards. Then when someone points out the obvious(but not to you) holes in your worker's paradise, you start coming back with exceptions and deviations.

"I could be a member of any class, I'd take Cuba. A good chance you'll starve in Haiti. A tiny chance you'll hit the lotto and live well in Haiti."

Hey, what about those right-wingers from Panama and Colombia you mentioned earlier? I'll take either one of them, since Jon Almighty has declared them the only countries to choose from.

Hey, when you have time please continue to broaden our horizons with your vast knowledge of Latin America.

 
At 3/25/2012 9:25 PM, Blogger Paul said...

"See if you can figure out why that is."

That should be Jon's epitaph. Every time he comes trolling here to try and pound some sense into our thick skulls, he uses that phrase.

 
At 3/26/2012 12:53 AM, Blogger Ron H. said...

"Absolutely not. Did you read the article?"

Yes, I read the article.

"Capitalism seeks profits and that means exploitable labor. "

That is absolute drivel. You need to learn some new slogans, That one is worn out.

Exploitable labor my ass. In a free market system, and I don't actually live in a true free market system, there are only voluntary transactions. Without the force of government I can't make anyone do business with me. That includes buying from me, selling to me, or working for me.

[obesity] "RonH: Well, I can't say for sure. You would have to ask them.

No I would not.
"

I certainly can't answer for them. Unlike you, I don't pretend to know what's best for other people.

"No, Laissez-Faire is correct. On Laissez-Faire Capitalism my goal is to maximize the profits to investors."

You are referring to a businessman. The investors are the capitalists. You will need to get your definitions straight if we are to continue. It's pointless when you don't know what you are talking about.

"So let's just suppose I have 1000 calories of food to sell. A poor African has only eaten 500 today and an American has already eaten 2000. If creating deceptive advertising that causes the American to consume those extra 1000 calories and that is more profitable than getting it into the belly of the African, then what should I do on Laissez-Faire Capitalism?"

This is silly, but OK, just this one time:

You would sell to the highest bidder. What would your factory full of socialist worker-owners do? If the welfare of a hungry African is part of your muddled thinking, and it's not clear why that's so, then you have probably arranged to contribute to a food fund for the African so that he's the highest bidder. You have saved not only him, but also saved the obese and dull witted American from his own gluttony.

Good work!

I'm curious. Just what deceptive advertising do you think would convince an American, who you decide has already had enough to eat, to eat another 1000 calories? We aren't talking fraud here, that's a separate subject, and not allowed.

"I would call that government stimulus spending, based on the false premise, beloved by Keynesians, that ANY spending creates demand, and therefore economic growth.

"You've gotten confused. In my analogy the government didn't pay anyone to dig ditches and refill them. The economic system with or without government did."

Not at all. You are missing the fact that when a business spends on any economic activity, they expect to produce something that someone else will trade for (buy). If they are wrong, they may go out of business, and someone else will get the consumers' dollars.

Only government would pay for an activity that produces no actual benefit for consumers.


"Remember, we're talking about advertising that preys on irrational tendencies in people in order to persuade them to purchase things that are not in their rational interest. Billions is spent in advertising in order to induce the purchase of billions more in consumer goods that are not really needed from a rational perspective."

Whose, Jon? You keep inserting your own value judgments, and they don't matter. How do you know what's rational for others?

"Of course they are needed for profit maximization, so they are rational from the Laissez-Faire capitalistic position."

A return on expenditures. Indeed, very rational.

 
At 3/26/2012 1:05 AM, Blogger Ron H. said...

"Meanwhile poor Africans are starving. Your answer is it's OK because at least people in marketing get a salary and that boosts the economy."

But there's nothing to be done for the poor Africans. Whether or not we advertise, they will still be hungry. Remember, their problem isn't lack of food supply, but other conditions that keep it from them. Advertising or not doesn't change that.

The additional revenue to advertizing people allows them, if they wish, to contribute to a "Feed The Hungry Africans" fund, something they would otherwise be unable to do.

"You are the Keynsian here, arguing that it's OK to waste because of the positive effects

LOL! Jon! Yet more economic theory you don't understand.

Jon, spending money on something and getting a positive return is not waste. It doesn't matter what you call it. If I advertise my product and attract more in sales than I spent, I haven't wasted anything. The positive return means customers wanted something I provided more than the money they spent. I'm better off, and they are better off.

Digging and then filling in holes doesn't produce anything anyone wants. Only government would consider such an endeavor. Do you understand the difference? Just spending alone, doesn't create economic growth. Something of value to someone needs to be produced.

"I'm saying regardless of that why shouldn't we call this an inefficiency? If this is not an inefficiency you'll have to define what you mean by inefficiency."

Economic efficiency means producing the most product or service, which means providing the most satisfaction of wants, for the least cost in resources. This is not ideology dependent. It's universally true.

If I spend $100 on advertising and sell $200 more meatballs as a result, I have made efficient use of the resource. I can then change my advertising to maximize my sales.

The customer is getting meatballs - exactly what they expected and what I promised. There is no fraud involved. Most male customers understand that hot women won't really hang around them if they eat my meatballs, even though they see such an image on the billboard.

"The barrier to exploitable labor is often government, meaning on LF Capitalism we can see the incentive structure for dislodging unfriendly governments (meaning unfriendly to profits)."

More nonsense.

 
At 3/26/2012 1:18 AM, Blogger Ron H. said...

"I thought you believed that

Any interference in that transaction by government in the form of regulations, taxes, or other restrictions diminishes the overall satisfaction of the two parties by adding costs.
"

I do. There is no government interference in your little unconscionable contract example. You suggest the possible need for litigation later.

"Some interference is OK. As long as you are under duress. Define duress for me. There was no threat. No violence. Purely voluntary transaction. Sure, you have a desperate need for water, but is the capitalist obligated to just give it to you? Is there something wrong with coming to agreeable terms?"

No government interference is acceptable, and there is none. Do you actually read what I write? Or just draw your own conclusions?

Do you realize how ridiculous it would be for someone to require my wife and I to sign a contract under the conditions described? I would agree to anything to ensure my family's and my own safety. I would lie, cheat, steal, or kill to that end. The idea of someone relying on my integrity to fulfill a contract of that nature, under those circumstances, based on my signature, is a preposterous idea.

 
At 3/26/2012 1:20 AM, Blogger Ron H. said...

Duress? My family and I face certain death unless I get the water someone is withholding from me. That's not much different than threatening our lives directly.

Besides the possibility of killing the owner of the water outright, there is also the possibility of holding him at gunpoint until we get water and a ride out.

Later, there is no need for government or a court system to understand how hard it would be for Water Owner to enforce his contract. Who would help him, other than someone who would agree to simply rob me, with no contract involved?

But, this has nothing to do with political or economic ideology.

 
At 3/26/2012 2:00 AM, Blogger Ron H. said...

"That's absolutely false. If the federal government right now ran the printing press and created thousands of crisp $100 dollar bills, that literally can fund capital right now. That is the funding of capital without savings."

OMG! You really need to get a better understanding of economics.

Inflating the money supply as you describe, causes excessive investment in means of production, based on the false signal to producers that there is excess savings available for investment, and therefore potential demand for additional production of gfoods and services.

this is a false signal, because there is no excess savings, just additional money not based on anything of real value.

This is the equivalent of digging holes and filling them, and calling it productive work.

pieceses of paper are not capital, but at best are usable as a medium of exchange if we believe they are good for that purpose.

If you were right, I could build a factory and buy all the capital equipment in exchange for papers I had printed up in my basement without producing anything to exchange for the factory and production equipment

I could pay workers with the same stuff, and everyone would think they were wealthier - except they wouldn't be.

Money is a commodity, Jon. The more of it produced, the less each unit is worth, just like corn, or oil or steel. Have you ever heard of "inflation"? Printing money is what causes it.

Get a grip, Jon.

Learn some economics.

Production creates it's own demand.

 
At 3/26/2012 3:15 AM, Blogger Ron H. said...

"But it was. Tens of millions of indigenous people lived here and they absolutely used the land. Not every part of it but much of it that is today owned by Capitalists. So this same question turns right back on you. You can't justify the initial acquisition of the land. That was pure thievery and murder."

But how did the indigenous people acquire use of the land? at some time it was unowned, unused, and unoccupied. Indigenous people came on it, adapted it for their use, and became the original owners.

That wasn't so hard, was it? There WERE original owners.

You can try to trace the long history of ownership changes over the millennia if you like, some through abandonment and reclamation, some through purchase, some through thievery and murder, but I doubt you will be successful. It's not likely that anyone can ever determine the rightful owner of any given piece of land.

But, it's important for you to realize that the theft of other people's land in the Americas didn't start with the white man.

You can also just stick to the simple,lame but incomplete narrative you seem to prefer, that the evil capitalists stole it from the noble savages.

I see that some education in history might also help you understand the world around you.

"You can't justify the initial acquisition of the land.

I just did, Jon. Pay attention.

But the land isn't what we're concerned with here, but the building, the machines, the tools needed to produce things for people to use.

Remember the question?

Me: "Where does the means of production come from?"

That came from savings, or borrowing what others have saved, or if you prefer, from borrowing money that was just created out of thin air, thereby diluting the value of all existing money.

"He may have deferred consumption, but this may be his preference. Should we reward someone for indulging their preferences?"

Of course that is his preference, or he wouldn't do it. He prefers two cookies in the future to one cookie now. "We" are not rewarding anybody, as "we" have nbothing to do with it.

"Suppose I'm Mitt Romney and I'm worth hundreds of millions of dollars."

Stop there. If you are "worth" hundreds of millions, that's because you have already deferred a great deal of consumption.

Why is it you start your stories in the middle, when everything has already happened?

"I have two choices."

Uou probably have way more than two choices.

"I could spend all my money in the span of a month or two and have nothing left. Or I could [continue to] defer consumption and have food to eat 10 years from now. Which is my preference? You act like it's some sort of big sacrifice he's made in that he's willing to not buy 20 homes and several private jets today. How is it a sacrifice when he'd prefer not to blow through his money immediately. Why should he be rewarded for doing precisely what he would prefer?"

You have some of the oddest attitudes about this I have ever encountered.

As I wrote, "we" are not rewarding anybody, and I am not "acting like" anything. No one has sacraficed anything, and no one has suggested it. Where do you get such nonsense?

Romney has earned the money he is worth, by providing value to others, and they have willingly given him thew money, Only government can take money by force.

When Romney spends that money, he creats jobs for others who exchange their labor to make the things he buys.

It IS a preference, but I can tell you, if the future consumption isn't greater than current consumption, then there won't be much deferred consumption.

 
At 3/26/2012 3:18 AM, Blogger Ron H. said...

Me: "If I inherit great wealth from my parents, I am not living without working, I am living on my parents previous work."

You "Probably not. If your parents give you $10 billion in Wal-Mart stock and it grows to a value of $20 billion after they died, who did the work that created the increase? Not your father, Sam Walton. He's dead. He's not doing anything. The slave like workers in China

- [oh give it a rest, Jon]

- work very hard to create the value.

[and get paid the wage they agreed on]

"...The cashiers and greeters. The stock boys and supply chain managers. They are the ones doing the work that causes the stock price to go up.

Yes, and I thank them, and they all get paid what they were promised.

"The managers and CEO of the company organize the work. They create the value."

Yes. that is their job, and what they get paid to do.

They create that value using the money I have left with them for that purpose. If others estimate that future earnings of Walmart will be higher because of our cooperative contributions, then they will value the stock more highly, and my shares will be worth more.

That is is my money working for me, and others paying for the use of it. It makes us all better off.

If we couldn't use our assets to work for us, if we all had to clean toilets or rum cash registers, we would all be a lot poorer.

 
At 3/26/2012 3:33 AM, Blogger Ron H. said...

"When I'm 70 I may not be able to work. I'll really need that money. Today I'm working and I have an income, so I don't need the money as badly. You're just dead wrong."

That is called reasoning. It's something humans are capable of, but it doesn't come naturally like wanting the whole cookie now instead of half of it tomorrow.

Having money in the future when you can't work is a psychic profit, sort of like anticipating two cookies in the future if you don't eat one now.

If you lived in Cuba, you wouldn't even have to concern yourself. you could consume it all now - what little there is now - and in your old age younger workers would support you.

See if you can figure out why that is.

 
At 3/26/2012 2:09 PM, Blogger Jon said...

RonH, most of what you write reveals that you are not grasping my position or argument and I'm not interested in taking the time to explain it again. So instead I'm just going to address a couple of things you said.

Economic efficiency means producing the most product or service, which means providing the most satisfaction of wants, for the least cost in resources.

In my view this is incomplete. You can be really efficient at producing a battleship, which is built great and immediately sunk in warfare. But a more efficient system is one that prevents the war in the first place.

So suppose I'm really efficient at making heroine. Suppose I'm good at marketing and people think they want heroine. I guess if they buy it then it must be in their rational interest to buy it. That's efficient in your view, but not mine.

No government interference is acceptable, and there is none. Do you actually read what I write? Or just draw your own conclusions?

In the US there would be government intervention. The US government would nullify the contract. But you are saying you would object to that, right? The government should not intervene.

So let's go back to what you had said earlier.

The best possible outcome in any voluntary transaction is when both parties get what they expect to get, and both are better off than they were before, because they have something they value more than what they gave up in exchange.

You value water more than you value $1 million. Your wife probably values water more than monogamy. This is just as much a voluntary exchange as when Hanes offers a Haitian 31 cents an hour to sew underwear together. You don't have to take the job. You might starve, but that's not their problem. You don't have to take the water. Either you believe what you said above or you don't.

Do you realize how ridiculous it would be for someone to require my wife and I to sign a contract under the conditions described?

Of course I recognize how ridiculous it is. That's how we test the logic of your view. I offer a ridiculous position. If the logic of your position leads to the conclusion that this ridiculous action is justifiable then this means there is something wrong with your logic.

Duress? My family and I face certain death unless I get the water someone is withholding from me. That's not much different than threatening our lives directly.

In the same way the Haitian is under duress. But I suppose you don't object because now once again the "best possible outcome in any voluntary transaction is when both parties get what they expect to get, and both are better off than they were before, because they have something they value more than what they gave up in exchange."

That wasn't so hard, was it? There WERE original owners.

Wrong again. The indigenous people did not regard themselves as owners. Who owns the air or the ocean? To them that was incomprehensible.

 
At 3/27/2012 2:28 AM, Blogger Ron H. said...

"RonH, most of what you write reveals that you are not grasping my position or argument..."

That's quite possible, as your positions are naive, and indicate your lack of actual education and knowledge of the subjects you are attempting to discuss.

Your arguments aren't really arguments, but restatements of slogans and simple narratives you have read somewhere, that have little relevance in the real world.

"Economic efficiency..."

"In my view this is incomplete."

That, my boy, is the textbook definition of economic efficiency. It isn't dependent on any particular ideology or view, but is universally understood. If you don't get it, that's your problem. If you wish to discuss social efficiency or political efficiency or something else, you need to say so, but if you wish to discuss economics efficiency, you need to understand that definition.

"You can be really efficient at producing a battleship, which is built great and immediately sunk in warfare. But a more efficient system is one that prevents the war in the first place."

But, that is not economic efficiency, as it doesn't maximize satisfaction of wants. Building a battleship and sinking it is no more efficient than digging holes and filling them back in. It doesn't matter how good you are at it, consumers don't benefit from that action. Government spending is most often the very opposite of efficient. The more government spending is part of an economy, the poorer the people are. Once again, you are finding a problem with government, which I don't defend.

"So suppose I'm really efficient at making heroine. "

A female hero? I will take a wild guess that you really mean the illegal drug heroin.

That means you can make the most usable product with the least input.

"Suppose I'm good at marketing and people think they want heroine."

OK, but people either want things or they don't. Few "think" they do.

"I guess if they buy it then it must be in their rational interest to buy it."

I guess so. I think people believe they are acting rationally.

"That's efficient in your view, but not mine."

Efficiency refers to production. The usefulness of a product is called it's utility, which is a subjective value.

Learn some economics.

"No government interference is acceptable, and there is none. Do you actually read what I write? Or just draw your own conclusions?"

"In the US there would be government intervention. The US government would nullify the contract. But you are saying you would object to that, right? The government should not intervene."

Let's think about that. How would the US government nullify the contract. You are misusing words again, and . Try harder to make sense so others can understand your meaning..

Here's the thing. The US government, and I assume you mean some court, has no clue the contract exists unless and until Mr, Water-Owner goes files suit in an attempt to enforce his contract, after I refuse to honer it. You have already pointed out that the court would dismiss the suit on grounds of the contract being unconscionable. Do you think Mr. W-O isn't aware of that? So no, there is no government interference unless Mr, W-O asks for some, in which case he still won't get what he expects from the transaction.
With or without government, the contract isn't enforceable.

In your silly scenario I will get what I want, and Mr. WO won't. It isn't a legitimate contract.

As I explained to you, I will do anything to save my family, including signing a ridiculous contract I have no intention of honoring.

See if you can figure out why that is.

 
At 3/27/2012 2:32 AM, Blogger Ron H. said...

You: "So let's go back to what you had said earlier."

Me: The best possible outcome in any voluntary transaction is when both parties get what they expect to get, and both are better off than they were before, because they have something they value more than what they gave up in exchange."

You: "You value water more than you value $1 million. Your wife probably values water more than monogamy. This is just as much a voluntary exchange as when Hanes offers a Haitian 31 cents an hour to sew underwear together. You don't have to take the job. You might starve, but that's not their problem. You don't have to take the water. Either you believe what you said above or you don't."

LOL! Those there's that evil capitalist and starving 3rd worlder again.

Those are not comparable situations. If you don't see the difference, you have a serious problem, and probably shouldn't try to discuss things you don't understand on econ blogs.

You: "Of course I recognize how ridiculous it is. That's how we test the logic of your view. I offer a ridiculous position. If the logic of your position leads to the conclusion that this ridiculous action is justifiable then this means there is something wrong with your logic."

You have missed the point. See if you can figure out why that is.

You: "In the same way the Haitian is under duress."

No, Jon the Haitian doesn't face imminent death if they don't take a job at Hanes for 31cents/hr.

Me: "That wasn't so hard, was it? There WERE original owners."

You: "Wrong again. The indigenous people did not regard themselves as owners. Who owns the air or the ocean? To them that was incomprehensible."

You can't be serious. You are embarrassing yourself.

You can't possibly claim to know what people thought or how they viewed their use of land thousands of years ago.

What we DO know, however, from archeological records is that native peoples made war on each other frequently, claimed certain land for themselves, conquered other people and occupied their land, murdered them, enslaved them, sacrificed them, and in some cases apparently ate them.

We have written records of widespread war and conquest in more recent times, especially among the plains Indians after they acquired horses and guns, so conflicts over land didn't start with the evil white capitalists.

If you were to actually read some serious scholarly accounts based on real documents, rather than just pulling popular accounts from your ass, you would know that much of the land acquired by white settlers, especially on the East Coast, was purchased from native people.

What do you think ownership means? It doesn't require a notarized deed and a plat map.

 
At 3/27/2012 5:34 AM, Blogger Jon said...

I've been debating online for many years. Back before there was such a thing as a discussion forum or blog. Back when groups of people would form email discussion groups. This is prior to the year 2000. Anyway I know that when someone can't just offer a rebuttal but is motivated to include a lot of personal insults what they're really signaling is that they don't want to be involved in the debate and they hope the abuse will drive their opponent away. This way they can feel triumphant and don't have to deal with the discomfort of challenging their own way of thinking. So I will grant you your wish and we'll end the discussion here.

Or perhaps the discussion will end after you post one more ad hominem filled comment.

 

Post a Comment

Links to this post:

Create a Link

<< Home