Best Thread Keynes Vs. Hayek

[ducati998]

Right, I see, so you're for free markets, but only up to a certain arbitrary point?

I am not sure how you drew that conclusion?

So if free market lenders find it to their economic advantage to engage in lending well beyond their "lending base" (which they inevitably will, as they have in the past), "the law" is going to prevent them?

If you are operating on a gold standard, no need for law or regulation. The free market will force banks to respect 100% reserving. If they fail to do so they place themselves at a risk of a bank run and bankruptcy.

What if, gasp, a lender decides to circulate a paper currency?

They are perfectly free to do so. Consumers are perfectly free to reject it.

There's gonna have to be a law against that as well, I guess?

No.

And this is what you're referring to as a "free market"? Furthermore, who, pray tell, will be enforcing these rules and examining the banks' books to make sure they don't step over the line?

Already answered.

I have to say I am rather amused that, in the end, all this "free market" talk of yours is nothing but talk. You want to regulate and enforce as much as anyone else. Such a difficult contradiction this must be for your worldview! I don't know how I'd cope...

Nonsense.

jog on
duc

 

[ducati998]

So what entity will be doing the "looking"? What entity, in your private judiciary, is going to have the responsibility and power to make sure that the Supreme Court doesn't get taken over by private interests, either explicitly or under the table? And you didn't come back to me on whether the Supreme Court is a participant in the private justice market, i.e. whether it can be taken over?

The Lower Courts. The Lower Courts are owned/operated by competing Insurance Companies. The Supreme Court would therefore be insulated from a takeover by any one Insurance Company.

I am afraid that I cannot share your "it really won't be a problem" attitude. It's reasonably easy for me to imagine all sorts of ways the incumbents can prevent "free entry" into the market.

Well list some, or all of them then.

This is rather shocking. Pls tell me you didn't say this, as this is in glaring contradiction to basic rules of first-order logic.

After re-thinking, apologies, my error.

Why does the reason for me building it matter? Suppose I did it to exercise the principle of ownership of my private property, no more, no less...

The reason is that the principal of property rights is the correct way to progress society in reality.



Yes, and so they have...

Right, so is this not what I said? My property right violated another's property right and was superseded. Does this, yet again, not demonstrate that "property rights" aren't absolute? Indeed, my ability to exercise my property rights, as I have demonstrated, depends on external factors and therefore cannot be considered an "axiom".

You are trying to demonstrate a hierarchy exists in property rights. This is not the case. If you wish to disprove an axiom, you cannot use the term/property that you are trying to disprove in your proof.

jog on
duc

 

[ducati998]

Duc - hate to put it to you but yes your ideas are a fad along with all the other "isms".

You are too self indulgent and reluctant to consider anything else but your own one track view imho.

There is nothing universal about economics just simply one of many other discipline in study of everything else on our planet... You can apply it to politics, theory of logic and even philosophy but then wonder why you get into a muddle. I'm sure it all makes sense to you but I'm also sure so did sun worship and human sacrifice made sense to the Aztec's. They may have asked you why you need gold and shown you where to find it.

Yes you do split hairs.

Historians will can provide you with many explanations re: rise and fall of the Roman Empire but you are likely to reject them picking your own special factor irrespective of arguments put to you because it helps in with selling your point.

You bang your drum about communism and socialism state owning all property and talking much about property rights, but enforcing those rights are effectively fad systems. It can be changed by force at the end of the day and there is nothing universal about those rights. No force, no property. I reckon I can build a very strong argument for it. One only has to look at Israel and the Palestinian land and home grab.

Some very stupid religious nuts - on both sides, think God has given them this land. Argue that one to death with your private judicial courts. I would like to see you try and enforce it too.

All systems and isms are all exactly that - a fad! Hate to burst your bubble as much as you may not like simplification of your grandoise argument is nothing but flavour of the decade.

USSR changed and so did China. So is Latin America. I don't see many revolutionaries anymore do you? You may say well that's because free market works but question is one of degree. I agree in that it is far superior to a command economy too.

You can draw all the curves and lines and use all your assumptions about minimum wage but contrary to all popullar arguments, it is now well supported and deemed to be a success. Even by people who argued against it. Don't see anyone complaining - do you?

Can you explain excessive bonus and executive pay? How is it that they come about in our free market economies? But ofcourse, we don't have a free market economy but a monopoly government that determines everything. And did you categorise that one as corporatism too?

I put to you free markets are imperfect by the very nature of man and man must be regulated collectively. Systems, governments and isms fad's tap into this aspect of man and attempt to explain and control.

In my honest opinion I feel you need a sense of proportion and perspective in your arguments. But that is simply my opinion. I may be wrong and you can be right if you want to.

You can choose to address my challenge to you, or not, which should you do, then I will obviously respond to those arguments: your choice obviously. I will no longer however continue to address your myriad opinions.

jog on
duc

 

[ducati998]

But you see, duc, this is the beauty of my position. I am not making categorical statements or offering a competing paradigm. I don't have to provide evidence or prove anything. I just have to provide counterexamples to disprove your assertions.

Your position as I recall was this:

I am amazed that you're not familiar with the available empirical results from experimenting with the principles you have offered above.

Your evidence consisted of precisely nothing. Therefore I simply procured the empirical data. The inflationary fluctuations that appeared on the chart are explained through an examination of the history. Which I will provide below in chart form.

As to the examination of evidence, this is sorely lacking. What sort of logic enables you to look at two coincident events and conclude causation? It's precisely as valid as me stating that everything you see in the years that follow 1913 is due to the publication of the very first crossword puzzle. Furthermore, the US remained on the gold standard until the Great Depression (with a brief suspension), so it's not entirely clear how you're able to see "the effect of fiat based money" on the chart. Further yet, the Federal Reserve was around in the late 1920 and early 1930s, so, quite clearly, if it affects inflation, it can do so in either direction. In general, I am again rather surprised that you offer up something like this chart as "empirical evidence".

See below. None of these charts should be particularly offensive to you, after all they are complying with your own empirical methodology.

jog on
duc

 

[Martinghoul]

I am not sure how you drew that conclusion?

Well, you did specify that you're going to abolish fractional reserve lending. Abolishing something and making sure it stays abolished isn't a free market sorta idea. Maybe I misunderstood, so let's look at it below.

If you are operating on a gold standard, no need for law or regulation. The free market will force banks to respect 100% reserving. If they fail to do so they place themselves at a risk of a bank run and bankruptcy.

Perfect, so you have absolutely no problem with banks/lenders leveraging themselves to the hilt? Which implies that you have actually no real issue with fractional reserve lending if it is something that the free market wants to engage in? Do I understand this correctly? As to the free market forcing the lenders to respect 100% reserving under the gold standard, wasn't it English goldsmiths who, under as full-on a gold standard as can be imagined, practiced fractional-reserve banking as far back as mid 17th century? So it would appear that your assertion above contradicts historical evidence.

They are perfectly free to do so. Consumers are perfectly free to reject it.

Indeed, although, yet again, if history is to serve as our guide, this isn't what actually happens, regardless of whether the system operates under a gold standard or not. So in this case, to be sure, you're not going to impose a restriction against paper money circulating, right, if the free market deems it useful?

No.

Already answered.

Nonsense.

jog on
duc

Very well, but here's my question... The free market, no matter how you slice it, likes the idea of leverage and the gold standard doesn't change this fundamental fact. In light of this, if the free market decides to operate in a way that doesn't agree with you principles (as it has numerous times in the past), what exactly are you going to do about it? If anything?

 

[Atilla]

You can choose to address my challenge to you, or not, which should you do, then I will obviously respond to those arguments: your choice obviously. I will no longer however continue to address your myriad opinions.

jog on
duc

Address your challenge?

In what?

 

[Martinghoul]

The Lower Courts. The Lower Courts are owned/operated by competing Insurance Companies. The Supreme Court would therefore be insulated from a takeover by any one Insurance Company.

Huh? How is that going to work? Are you suggesting that the lower courts share the ownership and the costs of operating the Supreme Court? But I confess that I am very confused again... We agreed earlier that there's nothing stopping a takeover of a given lower court by a particular private sector entity. So what's stopping this private sector entity (or a group of entities) from taking over all the lower courts and thus ensuring that they have the ownership of the entire private judiciary?

Well list some, or all of them then.

Well, I can't really see why, upon detecting a new entrant, the existing market participants can't engage in predatory pricing, such that the activity becomes economically unviable for the new entrant.

The reason is that the principal of property rights is the correct way to progress society in reality.

I am not disputing this.

You are trying to demonstrate a hierarchy exists in property rights. This is not the case. If you wish to disprove an axiom, you cannot use the term/property that you are trying to disprove in your proof.

jog on
duc

I am sorry I don't understand this. I am not trying to demonstrate a hierarchy. I am only trying to demonstrate that an axiom that you propose (like many other such axioms/commandments/tenets) is, in practice, subject to interpretation, based on the specific circumstances of the case.

 

[Atilla]

Here's another FADism for you dear Duc,

State Capitalism - what will they think of next?

The One Capitalism That Dare Not Speak Its Name - Bloomberg

Having read this article which I also posted previously it makes perfect sense. I always say one should look at successful models and copy them.

People change. Times change and Systems change.

I think emulating succesful economies is the way forward. If you can't beat them join them.

 

[ducati998]

Well, you did specify that you're going to abolish fractional reserve lending. Abolishing something and making sure it stays abolished isn't a free market sorta idea. Maybe I misunderstood, so let's look at it below.

Fractional reserve lending is predicated upon a breach of contract with regard to demand deposits, therefore abolishing it relies upon enforcing the law of property. Hardly the impression that you seek to convey.

Perfect, so you have absolutely no problem with banks/lenders leveraging themselves to the hilt?

Again, simply twisting my meaning. I have major issues with it. However on a gold coin standard, banks will simply not be able to leverage very far before they are forced to deleverage.

Which implies that you have actually no real issue with fractional reserve lending if it is something that the free market wants to engage in? Do I understand this correctly?

Not even remotely.

As to the free market forcing the lenders to respect 100% reserving under the gold standard, wasn't it English goldsmiths who, under as full-on a gold standard as can be imagined, practiced fractional-reserve banking as far back as mid 17th century? So it would appear that your assertion above contradicts historical evidence.

Indeed they did, and were badly caught out.

Indeed, although, yet again, if history is to serve as our guide, this isn't what actually happens, regardless of whether the system operates under a gold standard or not. So in this case, to be sure, you're not going to impose a restriction against paper money circulating, right, if the free market deems it useful?

History in the above case, demonstrates the success of gold in free market regulation.

Very well, but here's my question... The free market, no matter how you slice it, likes the idea of leverage and the gold standard doesn't change this fundamental fact.

Nonsense.

In light of this, if the free market decides to operate in a way that doesn't agree with you principles (as it has numerous times in the past), what exactly are you going to do about it? If anything?

The free market is self-regulating, I, need do nothing save ensure that I choose a prudent, honest bank to deposit into.

jog on
duc

 

[ducati998]

Address your challenge?

In what?

With regard to the issue on monopoly that I posted.

jog on
duc

 

[ducati998]

Huh? How is that going to work? Are you suggesting that the lower courts share the ownership and the costs of operating the Supreme Court? But I confess that I am very confused again... We agreed earlier that there's nothing stopping a takeover of a given lower court by a particular private sector entity. So what's stopping this private sector entity (or a group of entities) from taking over all the lower courts and thus ensuring that they have the ownership of the entire private judiciary?

Already answered, competition, derived from free entry.

Well, I can't really see why, upon detecting a new entrant, the existing market participants can't engage in predatory pricing, such that the activity becomes economically unviable for the new entrant.

Ignoring the economic fallacies that you raise for the moment: with regard to justice, there could very well be price inelasticity with regard to this product. Further predatory pricing fails as new entrants to the market return as soon as prices return to profitable margins, requiring the losses to persist, if, in point of fact the market share is all important. Clearly the insurance company will not be in business long.

I am sorry I don't understand this. I am not trying to demonstrate a hierarchy. I am only trying to demonstrate that an axiom that you propose (like many other such axioms/commandments/tenets) is, in practice, subject to interpretation, based on the specific circumstances of the case.

You cannot use the idea of property rights, when trying to disprove property rights.

jog on
duc

 

[Martinghoul]

Fractional reserve lending is predicated upon a breach of contract with regard to demand deposits, therefore abolishing it relies upon enforcing the law of property. Hardly the impression that you seek to convey.

Right, so I ask you again... Who is going to be responsible for enforcing the contract or the rules or whatever you call it in this particular case and how? You need to define exactly what you mean by "abolish" in this particular context. Please be as specific as possible and try to avoid general statements.

Again, simply twisting my meaning. I have major issues with it. However on a gold coin standard, banks will simply not be able to leverage very far before they are forced to deleverage.

Right, so if I am twisting your meaning, be kind enough to correct my misunderstanding. Why will banks not be able to leverage very far? What specific mechanism will prevent banks from leveraging? Who or what will force them to deleverage? Again, I must ask you to be as specific as possible and avoid referring to the vague "free market". What specific entity or agent within the free market?

Not even remotely.

Please correct my understanding then.

Indeed they did, and were badly caught out.

Who was badly caught out? I am not familiar with such an episode. Please describe to me the specific instances of this occurring.

History in the above case, demonstrates the success of gold in free market regulation.

What success? How precisely do you define a "demonstration of success in free market regulation"?

Nonsense.

As demonstrated by historical accounts, leverage had been practiced widely and extensively by lenders in the market as far back as the 17th century, if not earlier (see Macaulay's "History", for instance). This occurred under the gold standard and persisted pretty much since then. Why precisely is my statement nonsense?

The free market is self-regulating, I, need do nothing save ensure that I choose a prudent, honest bank to deposit into.

This has nothing to do with my question. I am interested in the specific answers to the particular questions I have asked above, rather than generic statements like "free market is self-regulating". Unless you're able to explain how precisely the market self-regulates, such a general pronouncement is devoid of meaning. So please help me understand how the system you propose is going to work by answering my specific questions.

In general, I have to conclude that we're not going to be progressing very far in this discussion, unless you can address my particular queries. If all you offer are theories and general principles, we're simply speaking two different languages and what point is there in doing that going further?

 

[Martinghoul]

Already answered, competition, derived from free entry.

Right, I am sorry, but I don't find this answer satifactory. What if there's no competition at the particular given moment in time? What if all the potential competitors are not interested in entering the market at this particular given moment? So let me ask again... Is it possible, under a particular set of scenarios, that at a given moment in time the entire private judiciary, including the Supreme Court, is owned privately by a single private sector entity or group of entities (united by a common economic interest)?

Ignoring the economic fallacies that you raise for the moment: with regard to justice, there could very well be price inelasticity with regard to this product. Further predatory pricing fails as new entrants to the market return as soon as prices return to profitable margins, requiring the losses to persist, if, in point of fact the market share is all important. Clearly the insurance company will not be in business long.

The eventual outcome is irrelevant. Taking into account what you have said above, is it possible that there is a period during which there are no new entrants? Regardless of whether they will or will not return in the future and regardless of whether the "business of justice" is viable for the insurance company in question or not.

You cannot use the idea of property rights, when trying to disprove property rights.

jog on
duc

Why on Earth not? Isn't proof by contradiction (aka "reductio ad absurdum", "ad impossibilem", apagogical argument, etc) a pretty common form of argument? And aren't all such arguments, including some very well-known ones, based on doing what you say I cannot do, i.e. using a proposition to disprove it? The way I see it, I'm just using one of the bog standard tools of first-order logic.

 

[Atilla]

With regard to the issue on monopoly that I posted.

jog on
duc

Duc there are over 20 pages to scroll through. Can you kindly remind me please?

 

[Atilla]

Duc,

I do not wish to intrude in the debate between you and Martin but do you not see that when you refer to the free market - there is inevitably a tendency towards an oligopoly and subsequently monopoly practice.

In the absence of laws and regulation I also see no justice to a person committed in time t, when it's likely to take t+1 for new entrants to come in (if at all possible) and compete against the wrong doers to address balance.

Competition in free markets is predatory.

You are avoiding and totally ignoring this tendency with the simple assumption that in a free market, new entrants will appear to rectify situation. Somehow there will always be many players selling and buying.

This is not the case! Increasingly, even more so in our modern day globalisation of business.

 

[ducati998]

Right, I am sorry, but I don't find this answer satifactory. What if there's no competition at the particular given moment in time? What if all the potential competitors are not interested in entering the market at this particular given moment? So let me ask again... Is it possible, under a particular set of scenarios, that at a given moment in time the entire private judiciary, including the Supreme Court, is owned privately by a single private sector entity or group of entities (united by a common economic interest)?

The eventual outcome is irrelevant. Taking into account what you have said above, is it possible that there is a period during which there are no new entrants? Regardless of whether they will or will not return in the future and regardless of whether the "business of justice" is viable for the insurance company in question or not.

Indeed. It has already happened. It is called government.

Why on Earth not? Isn't proof by contradiction (aka "reductio ad absurdum", "ad impossibilem", apagogical argument, etc) a pretty common form of argument? And aren't all such arguments, including some very well-known ones, based on doing what you say I cannot do, i.e. using a proposition to disprove it? The way I see it, I'm just using one of the bog standard tools of first-order logic.

Property rights are a self-evident axiom. To invalidate that argument you have to avoid self-contradiction.

You seem to be claiming that "A" and "B" both possessing property rights, simply offset one another, and it comes down to a vote, or exercise of some power of one over another.

I am saying that both "A" and "B" are subject to property rights. One of the necessary conditions of property rights is the principal of non-violation of any competing property rights.

jog on
duc

 

[ducati998]

Duc there are over 20 pages to scroll through. Can you kindly remind me please?

Monopoly as an analytic a priori proposition: monopoly is an entity [institution] that exists in the absence of any market competition.

Defining ‘monopoly’ as an institution that can as a producer of goods and services [within its market] raise revenues through the restriction of supply: this is and must be due to an inelastic demand curve.

You need to disprove the above in order to prove your claim that government is not a monopoly, and as we were discussing the UK, that can be your example if you wish.

jog on
duc

 

[Atilla]

You need to disprove the above in order to prove your claim that government is not a monopoly, and as we were discussing the UK, that can be your example if you wish.

jog on
duc

Duc,

I'm happy to discuss Business Economics / Oligopoly / Monopoly and economics but as I said to you pretty much earlier on - I'm not prepared to go down this ridiculous route.

1. I don't understand the way stuffy way question is put. Can it be simplified please?

2. I need to disprove to prove the above which I do not understand to start with.



I've also seen some of your other posts The a priori of monopoly « ducati998 and your views are very specific to further your agenda.

To gain a monopoly position, all competition must be eliminated. Free market mechanisms cannot succeed, nor be utilised to eliminate competition, as free market mechanisms rely upon ‘out competing’ the competition through ‘lower price, higher quality’ or a combination of the two. With ‘free entry’ to the ‘market’ as ‘profit margins rise’ due to an expansion of market share, or product dominance, competitors are attracted to the high returns available, particularly if the demand curve has areas of inelasticity. THIS IS CLEARLY A FALSE ASSUMPTION TO BASE YOUR ARGUMENT ON.

I do not wish to go back to reading my old books but thanks to Wikipedia here some real live examples.

Anti-competitive practices

These can include:

Dumping, where a company sells a product in a competitive market at a loss. Though the company loses money for each sale, the company hopes to force other competitors out of the market, after which the company would be free to raise prices for a greater profit.
Exclusive dealing, where a retailer or wholesaler is obliged by contract to only purchase from the contracted supplier.
Price fixing, where companies collude to set prices, effectively dismantling the free market.
Refusal to deal, e.g., two companies agree not to use a certain vendor
Dividing territories, an agreement by two companies to stay out of each other's way and reduce competition in the agreed-upon territories.
Limit Pricing, where the price is set by a monopolist at a level intended to discourage entry into a market.
Tying, where products that aren't naturally related must be purchased together.
Resale price maintenance, where resellers are not allowed to set prices independently.

Also criticized are:

Absorption of a competitor or competing technology, where the powerful firm effectively co-opts or swallows its competitor rather than see it either compete directly or be absorbed by another firm.
Subsidies from government which allow a firm to function without being profitable, giving them an advantage over competition or effectively barring competition
Regulations which place costly restrictions on firms that less wealthy firms cannot afford to implement
Protectionism, Tariffs and Quotas which give firms insulation from competitive forces
Patent misuse and copyright misuse, such as fraudulently obtaining a patent, copyright, or other form of intellectual property; or using such legal devices to gain advantage in an unrelated market.
Digital rights management which prevents owners from selling used media, as would normally be allowed by the first sale doctrine.


Through history the theory of monopoly can be seen to drive the ever shrinking number of ‘States’ into ever larger territorial areas that are exploited by monopoly government. There have been stunning reversals, the Soviet Empire imploded of course, but the historical dialectic has been towards consolidation through war and aggression. The inelastic demand curve is inelastic as of course it is 100% coerced. The revenues generated are called ‘tax’.

You do realise tax revenue is fed back to the people one way or another based on manifestos of the elected party. I don't see Monopolies donating profits to charity do you?

Monopoly through coercion has a logical conclusion: one world government. Steps have of course been underway for a long time towards this ‘ideal’ using the fiat currency as the primary weapon. Bretton Woods saw the hegemony of the US. drive the implementation of the US dollar as the ‘world reserve’ currency, much as prior to WWI Britain held the unofficial world reserve currency.

This one World government I think would be a good system imo. Do away with a lot of issues.


I see your name plastered all over google Duc. You get off on this or what?


Be good if you could speak regular lay man's English instead of stuffy nonsense.

 

[Atilla]

Interesting read...

http://www.stephankinsella.com/2011/11/wozinski-a-priori-of-justice/

Heavy stuff...

 

[ducati998]

Duc,

I'm happy to discuss Business Economics / Oligopoly / Monopoly and economics but as I said to you pretty much earlier on - I'm not prepared to go down this ridiculous route.

Why do you consider it ridiculous?

1. I don't understand the way stuffy way question is put. Can it be simplified please?

2. I need to disprove to prove the above which I do not understand to start with.

I shall.

Simply your argument, in relation to UK government monopoly, is that there is no monopoly. That the different parties, individuals, etc. provide, or qualify as competition. Assuming I have stated your position correctly, obviates the first definition that I provided, which is consistent with our argument.

Therefore you need to provide evidence, a priori argument, or empirical evidence [the weaker argument] that there is in point of fact, price elasticity, in government services due to competition.



I've also seen some of your other posts The a priori of monopoly « ducati998 and your views are very specific to further your agenda.

To gain a monopoly position, all competition must be eliminated. Free market mechanisms cannot succeed, nor be utilised to eliminate competition, as free market mechanisms rely upon ‘out competing’ the competition through ‘lower price, higher quality’ or a combination of the two. With ‘free entry’ to the ‘market’ as ‘profit margins rise’ due to an expansion of market share, or product dominance, competitors are attracted to the high returns available, particularly if the demand curve has areas of inelasticity. THIS IS CLEARLY A FALSE ASSUMPTION TO BASE YOUR ARGUMENT ON.

Really? How?

I do not wish to go back to reading my old books but thanks to Wikipedia here some real live examples.

Anti-competitive practices

These can include:

All easily rebutted. However the issue for the moment is not for me to rebut the fallacies contained in Wikipedia's list; rather it is for you to rebut my already presented argument. That is why for the moment I have excluded them.



Through history the theory of monopoly can be seen to drive the ever shrinking number of ‘States’ into ever larger territorial areas that are exploited by monopoly government. There have been stunning reversals, the Soviet Empire imploded of course, but the historical dialectic has been towards consolidation through war and aggression. The inelastic demand curve is inelastic as of course it is 100% coerced. The revenues generated are called ‘tax’.

You do realise tax revenue is fed back to the people one way or another based on manifestos of the elected party. I don't see Monopolies donating profits to charity do you?

You refer to the policies of redistribution?




Monopoly through coercion has a logical conclusion: one world government. Steps have of course been underway for a long time towards this ‘ideal’ using the fiat currency as the primary weapon. Bretton Woods saw the hegemony of the US. drive the implementation of the US dollar as the ‘world reserve’ currency, much as prior to WWI Britain held the unofficial world reserve currency.

This one World government I think would be a good system imo. Do away with a lot of issues.

Remove all choice. Where at the moment, you have to relocate geographically to escape a particularly despotic government for one less despotic, you would remove even that limited choice?

I see your name plastered all over google Duc. You get off on this or what?


Be good if you could speak regular lay man's English instead of stuffy nonsense.

Let me try to dumb it down for you.

jog on
duc