Public vs. Private Business

[BrainBlow]

The immaturity comes from the reflexive 'governments are evil, regulations are bad, taxes are theft' nonsense, that is really 'WAAAAAAAAHHH! Why do i have to follow rules or pay for things?!?!" crybaby BS. We know that it is all just an excuse for selfishness and abusive behavior without rules to get in the way.

Have you ever wondered why I and others in favour of economic freedom have stopped replying to you?

How are we supposed to know?
You haven't stopped replying.

 

[ImprobableJoe]

How are we supposed to know?
You haven't stopped replying.

That's odd, because I have had all the folks with the sociopathic "I'm going to use all of society's benefits while whining about having to pay my fair share" economic "philosophy" on ignore for most of the time I've been posting here. So I have no idea if they are replying to me or not, but I know for damned sure I'm not replying to them. I have been replying to people who oppose those views, but I will never engage with people who hold those views... it makes me feel like I need a shower, like I have been talking to a serial killer or pedophile or something. Icky... :lol: :lol:

I guess they are calling it "economic freedom" now, when it is clear that the only freedom they want is from responsibility. Like I think I mentioned before, all of their libertarian fraud heroes are willing to suck on the public tit when it suits them. Ayn Rand collecting Social Security and Medicare is just the funniest and most recent example, but ultimately they are ALL frauds.

 

[ImprobableJoe]

Oh, and how about this:

http://www.cbsatlanta.com/news/26675368/detail.html

A state lawmaker from Marietta is sponsoring a bill that seeks to do away with Georgia driver's licenses.

State Rep. Bobby Franklin, R-Marietta, has filed House Bill 7, calling it the "Right to Travel Act."

In his bill, Franklin states, "Free people have a common law and constitutional right to travel on the roads and highways that are provided by their government for that purpose. Licensing of drivers cannot be required of free people, because taking on the restrictions of a license requires the surrender of an inalienable right."

Franklin told CBS Atlanta News that driver's licenses are a throw back to oppressive times. "Agents of the state demanding your papers," he said. "We're getting that way here."

CBS Atlanta's Rebekka Schramm asked Franklin, "How are we going to keep up with who's who and who's on the roads and who's not supposed to be on the roads?"

"That's a great question," Franklin said. "And I would have to answer that with a question, 'Why do you need to know who's who?'"

"What about 12-14-year-olds who want to drive? What would stop them?" Schramm asked.

"Well, what's stopping them now anyway?" Franklin answered.

Yeah, lawlessness as a political 'philosophy'... we should really take that seriously.

 

[Ilikemustard]

How are we supposed to know?
You haven't stopped replying.

Sigh.

He eats, breathes and shits strawmen to the point that he is a living strawman.

I gave up even reading his posts after he declared that I was a conservative that wants to socialize losses for the second time, despite me telling him previously that I am against it.

I'm sure you would not defend me if I declared that leftists were greedy, selfish babies that want to steal everything from those that are better off than them.
That's not what I think, of course. I know most leftists have their heart in the right place, and just want to help those less fortunate than themselves.

 

[AdmiralPeacock]

How are we supposed to know?
You haven't stopped replying.

Sigh.

He eats, breathes and shits strawmen to the point that he is a living strawman.

I gave up even reading his posts after he declared that I was a conservative that wants to socialize losses for the second time, despite me telling him previously that I am against it.

I'm sure you would not defend me if I declared that leftists were greedy, selfish babies that want to steal everything from those that are better off than them.
That's not what I think, of course. I know most leftists have their heart in the right place, and just want to help those less fortunate than themselves.

heh one of the most blatant differences here is, we do not think you or your ilk have your "hearts in the right place" - this is obvious in your response and language. Joe's assessment, while antagonistic, is quite representative of how you present yourself in a discussion.

 

[Ilikemustard]

heh one of the most blatant differences here is, we do not think you or your ilk have your "hearts in the right place" - this is obvious in your response and language. Joe's assessment, while antagonistic, is quite representative of how you present yourself in a discussion.

I'll repeat this again: It is objectively true that freeing an economy makes the nation wealthier. As I said before, the USA is the first nation in history in which the lower-class can become obese. Nations like China, while having their heart in the right place and trying to socialise food so that the poorest can eat the same meal as the rich, experienced famine. So while you think you're helping poor people, you're hurting them. The same thing is happening in Venezuela.

http://www.latinbusinesschronicle.com/app/article.aspx?id=4264

"Enormous amounts of money have been spent in social programs involving direct aid and subsidies that provide the poor with 'a fish a day' but not teaching them how to fish."


Freeing an economy increases the standard of living of the lower class, regardless of whether there's a disparity between rich and poor. I am for a free market because I know it will be beneficial for everyone, including the poor. I would like to know how this is not having my heart in the right place.

 

[AdmiralPeacock]

heh one of the most blatant differences here is, we do not think you or your ilk have your "hearts in the right place" - this is obvious in your response and language. Joe's assessment, while antagonistic, is quite representative of how you present yourself in a discussion.

I'll repeat this again: It is objectively true that freeing an economy makes the nation wealthier. As I said before, the USA is the first nation in history in which the lower-class can become obese. Nations like China, while having their heart in the right place and trying to socialise food so that the poorest can eat the same meal as the rich, experienced famine. So while you think you're helping poor people, you're hurting them. The same thing is happening in Venezuela.

http://www.latinbusinesschronicle.com/app/article.aspx?id=4264

I'm not a communist, and I've never claimed "socializing" food distribution will do one thing or another. You just spent at least one post whining about Joe's supposed strawman, yet here we are.

Oh and your information about China is outdated by about 30 to 40 years lol

Freeing an economy increases the standard of living of the lower class, regardless of whether there's a disparity between rich and poor. I am for a free market because I know it will be beneficial for everyone, including the poor. I would like to know how this is not having my heart in the right place.

No, handing people food without educating them does not help their situation - freeing the market won't do it either. We need food quality control, hygiene regulations, education, work place safety, general safety standards... all things the private sector has historically dropped the ball on as soon as they sniff a profit.

 

[ImprobableJoe]

No, handing people food without educating them does not help their situation - freeing the market won't do it either. We need food quality control, hygiene regulations, education, work place safety, general safety standards... all things the private sector has historically dropped the ball on as soon as they sniff a profit.

See, this is what I was saying earlier about a complete and intentionally willful ignorance about history. The reason we have regulations is because without regulation, corporations and the very rich abuse their power to the detriment of everyone else. To claim that removing those regulations would somehow make life better is either a sign of deep stupidity, massive ignorance about history, or outrageously evil intent... or some combination of the three, There's something seriously wrong with people who pretend that history started in the 1950s, and ignore the centuries of abuse by the rich and powerful that came before that time.

 

[RichardMNixon]

So I pose to you this question: Why are you in favour of socialised police but not socialised food, when food is many times more important for survival?

Because I don't want privatized violence or vigilantism.

Except that would be extortion and extortion isn't profitable.

:lol: http://en.wikipedia.org/wiki/American_Mafia

The courts would stop them? The private courts? :lol:

 

[ImprobableJoe]

Except that would be extortion and extortion isn't profitable.

:lol: http://en.wikipedia.org/wiki/American_Mafia

The courts would stop them? The private courts? :lol:

Wow, from willful ignorance to pure delusion. Holy fucking shit, the lengths that some people will go to in order to preserve their religious beliefs. Now the 19th century AND the mafia have been scrubbed from history to support this "free market fairy" bullshit. What's next, the space program?

 

[RichardMNixon]

This is something that bothered me in reading Atlas Shrugged as well, and the absurdity of private courts compels me to make the comparison.

I think your proposed privatize-everything system is every bit as divorced from reality as the Communist Manifesto. Marx expected everyone to do their work and receive their pay. From each according to his ability, to each according to his need. Any thinking person can look at human nature and see this won't happen.

Your system has all these equally naive suppositions that government is the only thing that causes corruption, so of course without government there would be no greed or crime. Somehow a private court could lay down a ruling with no "gun" with which to enforce it and both parties will gladly honor the decision with a big group hug. And somehow government gets in the way of charity, so of course getting rid of it would make the Kochs of the world sprinkle manna from their sky fortresses of solitude every half hour to feed the needy.

Corruption, crime, and greed exist. Why do you think the lack of a government will make them magically disappear?

 

[Gnug215]

So yes, I think people are the state, and the state will reflect the wishes of the people in some way or other. Considering that not two people are truly alike, it is only to be expected that the state will often behave in a way that is unpopular to many.

Except the state doesn't exactly follow the majority's opinion. A majority of americans oppose the healthcare reform. In fact a judge declared the healthcare reform unconstitutional, basically meaning it is illegal. But it was done anyway. A state will try to get away with as much as it can without inciting a revolution.
And once again, voting is an illusory feeling of security and control over your government. Changing presidents changes very little. I hope you watched those two videos.

No, but it does so most of the time, and it is shaped by public opinion most of the time - also simply because the state, which you keep referring to as some kind of single-minded autonomous blob, consits of people. So no, a "state" won't try to get away with as much as it can without inciting a revolution; people in a given government might.
No, I didn't watch those two videos. It seems clear that things work differently in the US than... everywhere else.

Just like the state, private business consists of people, and is thus imperfect

Unlike a state, a private business relies on reputation and the willingness of its customers to give it money rather than its competitors. It has incentive to make a good product, and incentive to make it efficiently without wasting resources. A state receives revenue through tax, and as such is not in economic competition, does not need to be efficient in order to make a profit, nor does it need to keep its 'customers' happy. (to the point of revolt of course)

Private business relies first and foremost on profit, everything else is secondary. Private business can "buy" reputation with advertising, and it can buy up its competitors. It has incentive to make money off products, which should be as cheap as they can possibly get away with; "quality" in this sense essentially means "acceptable standard" - acceptable, as in: it won't break too soon so as to piss off customers. When businesses focus on quality, and spend a lot of money on it, they make sure that this is advertised to customers, and the price will be thereafter.

Has regulation and laws never made sure that safety was prioritized by private business?

I never argued this.

What regulation does do, however, is manipulate the market in a way that makes a few obscenely rich while the rest have difficulty even entering the market. This is known as "barriers to entry". An incumbent firm will lobby the state to introduce laws that make it difficult for other firms to compete with them. This is what creates monopolies, and the free market is too often blamed for the damage caused by regulatory barriers to entry.

http://siteresources.worldbank.org/DEC/Resources/Entrepreneurship_KLR.pdf

"To summarize our results, we find that entry regulations hamper entry, especially in
industries that naturally should have high entry. Also, the value added by naturally 'high-entry'
industries grows more slowly in countries with high entry barriers. The effect is primarily seen
for older firms suggesting that entry barriers mute the disciplining effect of competition. Taken
together, all this suggests entry regulations are neither benign nor welfare improving."

Intervention in the market also allows for socialization of losses, through entities such as Fannie Mae.

State regulation is a waste of resources and far too prone to corruption to be of any use.

(I'm not claiming you have argued that, but I got that impression. Sorry.)

I will fully admit that the state isn't always effective, and that private business does better in many cases. But it seems clear that some states do things differently from others, with differing results.
It seems things are pretty messed up in the US, but I don't get the sense that it's that bad over here. I cannot properly relate to the above examples, and I have heard plenty of examples where privatization has failed - here. If I knew how to find any sources on this, I would. I realize this is a problem for my case, but I simply do not have the research abilities nor resources at hand.

Has private business ever made a dangerous product that has been, or might have been, stopped by regulation?

Probably. And I bet it ruined them financially. A better question is "has a private business ever made a dangerous product intentionally"?

Deliberately? I doubt it. It's certain, however, that they have deliberately cut costs as much as they good, and in the process often made dangerous products. Regulation sets a standard that many companies otherwise wouldn't be bothered to live up to.
It is a level of quality control that would otherwise only be worked towards after-the-fact of dangerous or inferior products. Assuring quality comes at a high cost.
The company I work with often changes suppliers, because they can supply things cheaper. In many cases, quality has suffered, and it takes a while for our company to work this out. And it's not like they're thrilled to throw out a whole batch of goods of knowingly inferior quality, just to buy a new one from the old supplier right away, not do they want to retract all the goods they might have shipped with this inferior quality. They would only do that in severe cases.

While you mention suing as a solution to this, is that not "just" a kind of regulation-after-the-fact? After the damage has been done? Would it not be feasible to have some regulation before the fact, as we have now?

The prospect of losing customers or being sued is the regulation before the fact. You don't need 'before-the-fact' regulation to stop you from jumping into a meat-grinder, the prospect of being ground up prevents you from doing so.

This analogy is inappropriate, really, and I suspect you know this. Business isn't as simple as this, and I've talked a bit about that above.

Since it sounds like you're saying that the system of law would be intact in "your society" with a much smaller state, how can you be so sure of this when it is the state that enforces these laws? If the state were cut down severely, would its power to enforce laws not diminish significantly?

Have you read my comment on page 8? It outlines how I believe law would be enforced in a stateless society.

I have, but didn't find it convincing, really. As with so many other problems in this issue, it hasn't been tested properly, I think, and we're arguing hypotheticals a lot.

We see a lot of dishonest businesses today, in greater and lesser form, would this not just increase if regulation was diminished?

This is just weasel words really... Who is 'we', and where do 'we' see these dishonest businesses? What makes a business dishonest? I see a lot of dishonest politicians. Would the number of dishonest politicians not decrease with statelessness?

Weasel words? I don't know what you're getting at. Do you mean you don't see dishonest businesses? Don't dishonest businessmen count, or does it have to be an entire business that is dishonest before it counts? (Actually, there probably ARE examples of that too, like Enron, even though the mailboy and a couple of the receptionists in that company might not have been dishonest.)
Sure, I generalized, and perhaps it's not fair to lump a whole business together and calling it dishonest, but I'm seeing similar language from you in terms of generalizing the whole apparatus and people involved in the state as just "the state", which is seemingly both corrupt and dishonest.
Yes, of course there are corrupt politicians and state officials. Does that make the entire system rotten?

Since something like sugar in great quantities is harmful, and that many people are demonstrably too stupid/ignorant to realize this and do something about it, how do you sugges that a societal tragedy like mass obesity be solved?

We don't solve it. If people are too stupid to not eat healthily, that's their problem. If they truly want help with their obesity, I'm sure there will be a number of private businesses that specialise in giving advice on weight-loss and healthy diets. In fact they already exist today. Jenny-Craig, etc...

Alcohol is harmful as well. But you can't really force people to stop drinking alcohol, as the USA's 1920 ban has shown. The war on drugs has failed utterly. You simply can't tell people what they're allowed to put in their bodies, that's their own responsibility.

I think this is where it's clear that our fundamental view on things differ. I'm certainly not as willing as you are to just let the stupid people die like that. And your so-called solution is entirely lacking. If these people are too stupid, how would they ever be able to get the help they need? They need both knowledge and resources for that.

Yes, I know that alcohol is harmful, and I don't suggest we ban it, nor sugar. But the state has a vested interest in fixing the problem in a way that private business never could.
No, you can't tell people what to put in their bodies, but you can educate them, inform them, help them, regulate the toxic compounds, control them at least just a bit so that the disaster isn't total.

If the state is the regulatory tyrrany that you seem to suggest, why do Coca Cola and McDonalds even exist today? And if we live in such a capitalist society, why hasn't that managed to solve the problem either - assuming that is "supposed" to solve the problem? Or is it the fact that the two are in bed together exactly the reason why they still exist?

I don't know what you mean by this.

What I mean is... the state doesn't entirely and intentionally quash private enterprise, even when it's harmful. And in a society where private enterprise is so free that entities like Coca Cola and McDonalds are allowed to exist, one would also assume that such freedom would produce a private solution to the problem, right? And yet this isn't the case.



Anyway, I think your trust in private business is unrealistic, just as I'm sure you feel my trust in the state (which is not as high as I'm letting on here, of course - that is only a byproduct of my position) is unrealistic - and vice versa with distrust towards the two entities.
Your examples, while many of them well-argued, are in many cases impossible to fully grasp in a context which you suggest. I don't propose I grasp the context either, of course.
I'm not advocating full-on state power here, but nor do I accept your position. I actually believe that this fragile balance between the two that we have is, for better or worse, the best we can do - although it demands that we constantly keep the two entities in check.

 

[ArthurWilborn]

This is something that bothered me in reading Atlas Shrugged as well, and the absurdity of private courts compels me to make the comparison.

I think your proposed privatize-everything system is every bit as divorced from reality as the Communist Manifesto. Marx expected everyone to do their work and receive their pay. From each according to his ability, to each according to his need. Any thinking person can look at human nature and see this won't happen.

Your system has all these equally naive suppositions that government is the only thing that causes corruption, so of course without government there would be no greed or crime. Somehow a private court could lay down a ruling with no "gun" with which to enforce it and both parties will gladly honor the decision with a big group hug. And somehow government gets in the way of charity, so of course getting rid of it would make the Kochs of the world sprinkle manna from their sky fortresses of solitude every half hour to feed the needy.

Corruption, crime, and greed exist. Why do you think the lack of a government will make them magically disappear?

Not disappear, but simply be reduced in scope. The smaller the system, the less opportunity there is for peculation.

But, yes, I agree going as far as privatizing courts is too far.

 

[AdmiralPeacock]

One the problems I have with the simplistic idea that "the free market will correct itself through competition" argument is it's lack of real world relevance. On the one hand, competition is great for lowering prices, provided the competition as actually happening. I bring people attention to the Airline Cargo Price Fixing cartel of last year (well 1999 to 2006).
http://www.bbc.co.uk/news/business-11719507
http://www.sbs.com.au/news/article/1407841/Qantas-fined-for-price-fixing-in-Europe
http://www.abc.net.au/news/stories/2010/11/10/3061923.htm
Almost as bad as monopolies, the economic cartel can kill a free market just as assuredly as communism.

How does an unregulated market prevent cartels? I've seen them squash new competition before they can take roots, hike prices and lower quality... this until something bigger breaks them up (like government regulations). How does a libertarian economic/political system purpose to counter such monopolies and/or cartels?

 

[Ilikemustard]

Apologies for the late reply, I have been exceptionally busy lately.

I'm not a communist, and I've never claimed "socializing" food distribution will do one thing or another. You just spent at least one post whining about Joe's supposed strawman, yet here we are.

I never claimed you were a communist, I was merely using food as an example of why freeing its production economically benefits everyone on the whole. Pay attention.

Oh and your information about China is outdated by about 30 to 40 years lol

I know when Mao's regime existed. Do I have to write extensive posts clarifying every little detail so that you don't waste time addressing irrelevant points?

We need food quality control, hygiene regulations, education, work place safety, general safety standards...

No we don't, I've already gone over this extensively, you have not even engaged my argument.
I've made my argument for why state regulation is unnecessary, and you come back and say "we need state regulation". That is not an argument.

all things the private sector has historically dropped the ball on as soon as they sniff a profit.

This is speculation, please give me a source. You can claim anything happened on the free market without a source. Even something as stupid as "Hurr, construction companies will use asbestos without regulation because it costs less". I believe TheAmazingAtheist has used that one.

I'm tired of you making all these blatantly false claims about what the free market will incur without engaging my actual argument. Your entire comment here did not even refute anything of what I said, you just made the assertion that state regulation is a necessity and left it there. I cannot even comprehend why you think this is a plausible debating strategy.

Since you're so trigger-happy when it comes to pointing out your perceived flaws of the free market, I will list things caused by states.
Of course, I'm not saying you support these directly. You support them in the same way a communist supports famine, you don't mean to but it is a result of your actions.

- War. Yes, war. It is only possible to fund war using a system of tax revenue. Why? War is not profitable. Actually, let me rephrase that. War is not profitable for the one who declares war. Which is why it is very easy to exploit a system of tax in a way that allows you to force taxpayers to pay for the costs of war, making a huge profit for those corporations that are able to sell produce that is necessary during wartime. It also makes bankers wealthy, as a state needs to borrow money in order to finance the war. Without a state they cannot make a profit off of taxpayers. Only a very small minority of people that don't profit from war actually want war, most people do not, and therefore war would never be initiated by a stateless society.

- Artifical expansion of credit. Most people don't even seem to know what causes inflation. Do you? In the USA the federal reserve is literally able to create money from nothing, thus diluting the economy and lowering the purchasing price of the USD. Fiat money is created by most nations around the globe, and would not be possible if states did not have a monopoly on currency. This also creates the boom/bust cycle, as explained by the Austrian Business Cycle Theory, but I won't go into depth on that at the moment.

- Wasted resources. Obviously when there is no profit to be made, and your revenue is gained through taxes, you can spend with little thought to the return. Which brings me to this old quote, for which I could have made another argument against...

What the fuck do you think will happen when road companies build superfluous highways right next to each other so each gets a slice of the action?

You mean the superfluous Alaskan Road to Nowhere? Ironic, no?

Resources are wasted all the time by states, such as the 40 million kilograms of food that went to waste in Venezuela, the war on drugs in the USA, on which $15,000,000,000 was spent in 2010 alone, etc... This is just an obvious point.


Since I still don't know what your political stance is, only that you're a "counter-anti-statist", what are your solutions to these problems, taking into account the fact that states aren't going to just stop creating fiat money when you ask nicely?

How does an unregulated market prevent cartels? I've seen them squash new competition before they can take roots, hike prices and lower quality... this until something bigger breaks them up (like government regulations). How does a libertarian economic/political system purpose to counter such monopolies and/or cartels?

Before I move onto your links I'll explain to you why cartels logically should rarely if ever form on a free market.

If a bunch of businesses come together and say "hey, let's not compete, and then raise our prices really high!", there are two reasons why it will not function for long.

First, who's making sure all the businesses keep their prices high? If you're a business in a cartel, you will realise that if you undercut the others that are involved in the cartel, you can make a huge profit. Why? Everyone will come to you to escape the exceptionally high prices the other guys are demanding, and thus you will steal the market. So every single business involved in a cartel has incentive to undercut the rest for this reason, and unless they are keeping each other in check using threats and/or violence (which would be illegal), then it's likely there will be one to undercut the rest.

Second, new competition is going to spring up. If you're a businessman and you see an area of the market in which a cartel has formed, you're going to want to enter the market because you know you can undercut the cartel and steal the market. How does the cartel keep new competition out of their market? I can think of one reason: Regulatory barriers to entry, which is only made possible by state intervention.

http://www.bbc.co.uk/news/business-11719507
http://www.sbs.com.au/news/article/1407 ... -in-Europe
http://www.abc.net.au/news/stories/2010 ... 061923.htm

It's interesting you decided to use the air transport market as an example of a cartel forming. I say this because air transport is a hugely regulated industry, and as such an oligopoly has formed.
Before I make the crux of my argument, however, let's take a look at each of those airline companies.


Qantas was previously owned by the Australian Government (allowing it to become an oligopoly more easily).
It receives protection from economic competition from the government, as well as subsidies.
http://www.petermartin.com.au/2007/03/saturday-forum-qantas-protection-racket.html
http://www.smh.com.au/news/business/emirates-blast-qantas/2005/11/07/1131211993331.html

Air France is the national flag carrier of France and is only partially privatized.
It is granted a monopoly on many air traffic routes by the French Government, and as such faces very little economic competition.
http://www.easyjet.com/EN/News/easyjet_blocked_by_air_france_monopoly.html

British Airways, like Qantas, was previously a public entity.
It receives government protection and subsidies.
http://www.telegraph.co.uk/finance/newsbysector/transport/2795730/Sir-Richard-Branson-Why-British-Airways-monopoly-game-must-be-stopped.html

Cargolux is owned by LuxAir. Unfortunately I cannot find any worthwhile sources on LuxAir as it is a relatively small airline, but the government owns a majority of the shares and this should speak for itself.

Singapore Airlines is the flag carrier of Singapore and a public entity.
It was granted a monopoly by the government until 2003, giving it a major headstart in the airline industry.
http://www.ameinfo.com/29059.html

Scandinavian Airlines is the flag carrier of Sweden, Denmark and Norway. The three nations together hold around 50% of the airline's shares.
As a result (take a guess) it receives government protection and subsidies.
In fact this source I have just found is important, it outlines subsidies received by many of the airlines that were involved in the cartel.
http://www.emirates.com/english/images/Subsidy%20-%20Myths%20and%20Facts%20August%20FINAL_tcm233-557688.pdf

Cathay Pacific is the flag carrier of Hong Kong, and enjoys a near monopoly.
This source is very good, it outlines monopolies that have formed in Hong Kong as a result of state intervention.
http://www.independent.co.uk/news/business/paragon-of-free-markets-is-riddled-with-monopolies-1598537.html
"Tight control over flying rights has given Cathay Pacific, a subsidiary of the Swire Pacific group, de facto flag-carrier status. Two attempts at rival operations were quickly subsumed."

Japan Airlines, as the name suggests, is the flag carrier of Japan. It had a government granted monopoly until 1987.
It receives protection and subsidies, and has been bailed out of financial ruin.
http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article6553359.ece

Air Canada is the flag carrier of Canada, and had a government granted monopoly until 1988.
It receives protection and subsidies.
http://www.airportbusiness.com/web/online/Top-News-Headlines/Air-Canada-is-unfairly-subsidized/1$40845

LAN Chile is the flag carrier of Chile and was not privatized until 1989.


Now, why is the term "flag carrier" important? It means the airline is selectively supported by the government over other airlines, hindering economic competition!
http://en.wikipedia.org/wiki/Flag_carrier

"enjoys preferential rights or privileges, accorded by the government"
"governments would directly assist in the growth of their flag carriers typically through subsidies and other fiscal incentives. The establishment of competitors in the form of other locally registered airlines may be prohibited, or heavily regulated to avoid direct competition."
"Even where privately-run airlines may be allowed to be established, the flag carriers may still be accorded priority, especially in the apportionment of aviation rights to local or international markets"


Now, I could go into detail about all the fees, licenses and waiting periods that provide regulatory barriers to entry in the air transport industry, but I don't even need to. You can read up on it yourself if you so desire.

Instead, I'll tell you why a cartel is so easy to form in the ologopolistic market that is air transport. This is a simple point, it will be easy for you to understand, and it is a blatant barrier to entry that has little logic behind it.

To fly your plane from one airport to another, you must be given the right to by the states that each airport is situated in. If I want to set up a flight route between Sweden and Russia, I must ask Sweden and Russia for permission. And states will often say no in order to protect their flag carriers. This was made evident in many of those links I gave on the different airlines.

Why does this allow cartels to form? Because you are impeding free trade! If only a few airlines are allowed to fly along a certain route, it is very easy for them to set up a cartel, as they face very little competition. For a competitive airline industry to come in and undercut the cartel, they must acquire the rights to fly along the route (which will often be rebuked), and they must deal with licenses, fees and waiting periods, all of which make it undesirable to even try to enter the market in the specified region.

So your "criticism" of the "free market" doesn't even apply to the free market, as air transport is not a free market! It is a state granted oligopoly! State regulations are the reason why you need more state regulations in the first place!

Will you try criticising the healthcare system in the USA next, as if it were a "free market"? Please tell me another one of your criticisms, so I can tell you why you are horribly wrong.
Or maybe you will just ignore my entire argument and post something like this again?

"State bad, private good... [insert some inane crap] and because I say so"

Gnug and others, I will try to respond to you soon. Being the only anti-statist on this board and having to respond to each individual post however is starting to feel like a chore, and honestly I'd rather go play Starcraft for the moment.

Have this delightful economic rap battle though. It is very relevant to this thread and it is awesome, I promise!

 

[RichardMNixon]

You mean the superfluous Alaskan Road to Nowhere? Ironic, no?

Resources are wasted all the time by states, such as the 40 million kilograms of food that went to waste in Venezuela, the war on drugs in the USA, on which $15,000,000,000 was spent in 2010 alone, etc... This is just an obvious point.


Since I still don't know what your political stance is, only that you're a "counter-anti-statist", what are your solutions to these problems, taking into account the fact that states aren't going to just stop creating fiat money when you ask nicely?

You mean the bridge that was proposed and which the federal government declined to fund? That bridge? The bridge that didn't already have a bridge right next to it? Because even if the bridge had been built (and again, it wasn't built), it would still be more useful than having three separate, multi-lane highways right next to each other because three different highway companies all want a piece.

I think things are going pretty ok as is, honestly. Could definitely be better, but could definitely be a lot worse. The "War" on drugs is horseshit and needs to be stopped. I'm not really on board for single-payer health care but I'd like to see where Obama's reform is going. I think the Republicans have a couple of decent ideas as well vis-a-vis selling insurance across state lines. I don't know where your comment about fiat money comes from, states can't print money.

 

[ArthurWilborn]

- War. Yes, war. It is only possible to fund war using a system of tax revenue. Why? War is not profitable. Actually, let me rephrase that. War is not profitable for the one who declares war. Which is why it is very easy to exploit a system of tax in a way that allows you to force taxpayers to pay for the costs of war, making a huge profit for those corporations that are able to sell produce that is necessary during wartime. It also makes bankers wealthy, as a state needs to borrow money in order to finance the war. Without a state they cannot make a profit off of taxpayers. Only a very small minority of people that don't profit from war actually want war, most people do not, and therefore war would never be initiated by a stateless society.

You've never heard of gang warfare? Two highly competitive companies trying to secure valuable resources and trade routes who aren't able to secure contracts through a government? Conflict can be highly profitable.

Granted, war on the scale of the World Wars would probably be impossible, but the overall death count might be similar.

- Artifical expansion of credit. Most people don't even seem to know what causes inflation. Do you? In the USA the federal reserve is literally able to create money from nothing, thus diluting the economy and lowering the purchasing price of the USD. Fiat money is created by most nations around the globe, and would not be possible if states did not have a monopoly on currency. This also creates the boom/bust cycle, as explained by the Austrian Business Cycle Theory, but I won't go into depth on that at the moment.

Private currencies have been tried - and ended in messes of fraud and waste each time. But, yes, government needs to be watched very closely on monetary policy.

- Wasted resources. Obviously when there is no profit to be made, and your revenue is gained through taxes, you can spend with little thought to the return. Which brings me to this old quote, for which I could have made another argument against...

Waste is inevitable in any system, private enterprise isn't perfect.

 

[Ilikemustard]

Quick comment, I only just woke up.

You mean the bridge that was proposed and which the federal government declined to fund? That bridge?

No, I mean the Road to Nowhere which was built after the bridge's declined proposal.
http://en.wikipedia.org/wiki/Gravina_Island_Bridge#Road_to_Nowhere

"According to Alaskan state officials, the road project went ahead because the money came from the federal government, and would otherwise have had to be returned."

I don't know where your comment about fiat money comes from, states can't print money.

Well that's a bit of a misinformed comment, states create money from nothing all the time.
http://en.wikipedia.org/wiki/Money_creation

You've never heard of gang warfare? Two highly competitive companies trying to secure valuable resources and trade routes who aren't able to secure contracts through a government? Conflict can be highly profitable.

I've heard of gang warfare, yes. It only occurs because legitimate businesses are unable to perform the same function as police legally.

I haven't heard of gang warfare in instances of resources and trade routes though, please enlighten me.

Private currencies have been tried

Where?

Waste is inevitable in any system, private enterprise isn't perfect.

I didn't expect someone such as yourself to argue this point. You honestly believe that tax money is not wasted a hell of a lot more than money owned by a private entity?

 

[AdmiralPeacock]

Apologies for the late reply, I have been exceptionally busy lately.]

Tis ok, I've been (and am) exceptionally busy lately too.

I'm not a communist, and I've never claimed "socializing" food distribution will do one thing or another. You just spent at least one post whining about Joe's supposed strawman, yet here we are.

I never claimed you were a communist, I was merely using food as an example of why freeing its production economically benefits everyone on the whole. Pay attention.

Nice little bit of condescension there.

You're larbouring under the delusion that it's either A> Free Market or B> Socialism. One or the other. That's simply not representative of reality. But since we're talking about things "objectively true" here's a slice for you; it's objectively true that a nations with social services have a higher standard of living than nations without social services. While you can find a nation with social services that is in trouble, it's a lot harder to find a nation without social services that is not in trouble.

I'll come back to this later.

Oh and your information about China is outdated by about 30 to 40 years lol

I know when Mao's regime existed. Do I have to write extensive posts clarifying every little detail so that you don't waste time addressing irrelevant points?

Perhaps you should be more careful with the tenses then. "Nations like China, while having their heart in the right place and trying to socialise food so that the poorest can eat the same meal as the rich, experienced famine. " I accept that you might have meant a past tense, but you didn't even imply one. I guess this is why some many of your ilk are ignorant of the social economical status of countries like China, as your vocal figures have a tenancy to ignore decades of economical evolution to prove a point.

You need not "write extensive posts clarifying every little detail" as that would be idiotic, are you an idiot? No, a simple qualifier would be honest.
"Nations like China, while having their heart in the right place and -trying- TRIED to socialise food so that the poorest can eat the same meal as the rich, experienced famine. " Oh look, one word and the whole context of the sentence has changed.

We need food quality control, hygiene regulations, education, work place safety, general safety standards...

No we don't, I've already gone over this extensively, you have not even engaged my argument.
I've made my argument for why state regulation is unnecessary, and you come back and say "we need state regulation". That is not an argument.

Yeah and your argument for why state regulation is unnecessary has been debunked by others... unless you're like a creationist, and you consider your argument with each opponent regardless of how many times its been smashed.

all things the private sector has historically dropped the ball on as soon as they sniff a profit.

This is speculation, please give me a source. You can claim anything happened on the free market without a source. Even something as stupid as "Hurr, construction companies will use asbestos without regulation because it costs less". I believe TheAmazingAtheist has used that one.

I'm tired of you making all these blatantly false claims about what the free market will incur without engaging my actual argument.

Likewise - you just strawman my arguments (i.e. arguing against communists for some stupid reason)

Your entire comment here did not even refute anything of what I said, you just made the assertion that state regulation is a necessity and left it there. I cannot even comprehend why you think this is a plausible debating strategy.

It wasn't a debate strategy - but it was a while ago, and I've been busy enough to not remember what I was aiming for. I'm sorry, but this conversation does not rate particularly high on my list of things to consider important.

Since you're so trigger-happy when it comes to pointing out your perceived flaws of the free market, I will list things caused by states.
Of course, I'm not saying you support these directly. You support them in the same way a communist supports famine, you don't mean to but it is a result of your actions.

Here's another questionable debate strategy - Fuck you and your pretentious ass.

- War. Yes, war. It is only possible to fund war using a system of tax revenue. Why? War is not profitable. Actually, let me rephrase that. War is not profitable for the one who declares war. Which is why it is very easy to exploit a system of tax in a way that allows you to force taxpayers to pay for the costs of war, making a huge profit for those corporations that are able to sell produce that is necessary during wartime. It also makes bankers wealthy, as a state needs to borrow money in order to finance the war. Without a state they cannot make a profit off of taxpayers. Only a very small minority of people that don't profit from war actually want war, most people do not, and therefore war would never be initiated by a stateless society.

- Artifical expansion of credit. Most people don't even seem to know what causes inflation. Do you? In the USA the federal reserve is literally able to create money from nothing, thus diluting the economy and lowering the purchasing price of the USD. Fiat money is created by most nations around the globe, and would not be possible if states did not have a monopoly on currency. This also creates the boom/bust cycle, as explained by the Austrian Business Cycle Theory, but I won't go into depth on that at the moment.

- Wasted resources. Obviously when there is no profit to be made, and your revenue is gained through taxes, you can spend with little thought to the return. Which brings me to this old quote, for which I could have made another argument against...

ArthurWilborn addressed this, I'm not going to bother. See their post.

all things the private sector has historically dropped the ball on as soon as they sniff a profit.

This is speculation, please give me a source. You can claim anything happened on the free market without a source. Even something as stupid as "Hurr, construction companies will use asbestos without regulation because it costs less". I believe TheAmazingAtheist has used that one.

I'm tired of you making all these blatantly false claims about what the free market will incur without engaging my actual argument.

Yeah I'm returning to this "point". - Examples of what it is/was like before/without regulation (a free market)

http://www.oxfam.org/en/pressroom/pressrelease/2011-02-02/crisis-poor-quality-medicines-being-used-excuse-push-prices-poor
It focuses on the debate on how to get quality medicines into poorer countries (tighter quality regulation vs enforced intellectual property laws) - but the fact there are substandard medicines in such abundance in these countries without any real regulation is my point.

http://www.who.int/mediacentre/factsheets/fs134/en/
Briefly talks about Herbal Medicine and the safety issues.

History of US Food Regulation - Food Toxicology - Instructor: Gregory Mà¶ller, Ph.D. - University of Idaho
Lecture outline http://www.agls.uidaho.edu/foodtox/lectures/lecture02/L2-History%20of%20US%20Food%20Regulation_outline.pdf
http://www.agls.uidaho.edu/foodtox/lectures/lecture02/lecture2.htm

FDA History - Part I
The 1906 Food and Drugs Act and Its Enforcement
http://www.fda.gov/AboutFDA/WhatWeDo/History/Origin/ucm054819.htm
"While Wiley was stumping for a law, muckraking journalists such as Samuel Hopkins Adams exposed in vivid detail the hazards of the marketplace. In fact, the nauseating condition of the meat-packing industry that Upton Sinclair captured in The Jungle was the final precipitating force behind both a meat inspection law and a comprehensive food and drug law"

Samuel Hopkins Adams "The Great American Fraud"
http://www.museumofquackery.com/ephemera/oct7-01.htm
"Adams exposed many of the false claims made about patent medicines, pointing out that in some cases these medicines were damaging the health of the people using them. The series had a huge impact and led to the passage of the 1906 Pure Food and Drug Act." - previously, it was mostly considered the responsibility of the consumer (i.e. the free market) to ensure quality.

Edwin Markham children in Bondage (1914)
http://www.sjsu.edu/reading/markham.htm#Children
The authors begin by noting that the 1900 Census indicated that about 2 million children were wage earners. Markham wrote 11 of the chapters including the ones that detailed the nature of the work children were engaged in including working in glass factories, sweatshops, coal mines, the tobacco industry, canneries, street peddling, and holiday workers making decorations and boxing gift items. In Chapter VI (p. 122), Markham comments on the holiday related work some children were engaged in:

"Three months before Christmas the smaller confectionary establishments call in troops of little children and begin full work and overtime work, making ready for the brave pomp of the holidays. There must be preparation of the bulging paper sack and the swollen tarlatan bag of the Christmas tree, for the bottle of straited sticks, and the pudgy "sucker" with its noble lasting quality. Tons upon tons of candy must be prepared for the holiday markets. What irony of civilization is this - one band of children wasting their bodies and souls to make a little joy for the rest? What sardonic mind conceived the caricature of justice, this burlesque of life?""


Henry Demarest Lloyd
wealth against commonwealth
http://books.google.com.au/books?id=w1EqP8i5OocC&printsec=frontcover&dq=henry+demarest+lloyd+wealth+against+commonwealth&source=bl&ots=07_dDPM9OP&sig=c3KtOa9aOvwLqV5xQ7OwJysaY6E&hl=en&ei=QWVcTbqDMIa2vwPJ3fjtDA&sa=X&oi=book_result&ct=result&resnum=4&ved=0CDQQ6AEwAw#v=onepage&q&f=false
http://www.newgenevacenter.org/06_Historical-Documents/1894_Henry-Demarest_Lloyd_Excerpt-from-Wealth-against-Commonwealth.htm

Jacob Riis
How the Other Half Lives: Studies Among the Tenements of New York (1890)
http://books.google.com.au/books?id=sziCa_CxnSQC&printsec=frontcover&dq=How+the+Other+Half+Lives:+Studies+Among+the+Tenements+of+New+York&source=bl&ots=DUa_WKRXdR&sig=ElZisY_jVJOAoxRJ4cnkOyTXn18&hl=en&ei=TWZcTdv0C47mvQO9mKiFDQ&sa=X&oi=book_result&ct=result&resnum=3&ved=0CCYQ6AEwAg#v=onepage&q&f=false

Upton Sinclair
The Jungle
http://www.online-literature.com/upton_sinclair/jungle/

Ignore these all you want.

How does an unregulated market prevent cartels? I've seen them squash new competition before they can take roots, hike prices and lower quality... this until something bigger breaks them up (like government regulations). How does a libertarian economic/political system purpose to counter such monopolies and/or cartels?

Before I move onto your links I'll explain to you why cartels logically should rarely if ever form on a free market.

If a bunch of businesses come together and say "hey, let's not compete, and then raise our prices really high!", there are two reasons why it will not function for long.

I never claimed they would function for long - just they will form, they will last enough to squash rising competition and will form again to prevent new competition.

First, who's making sure all the businesses keep their prices high? If you're a business in a cartel, you will realise that if you undercut the others that are involved in the cartel, you can make a huge profit. Why? Everyone will come to you to escape the exceptionally high prices the other guys are demanding, and thus you will steal the market. So every single business involved in a cartel has incentive to undercut the rest for this reason, and unless they are keeping each other in check using threats and/or violence (which would be illegal), then it's likely there will be one to undercut the rest.

Sounds good - doesn't work that way though. Big companies form an kind of equilibrium - cartels form, how ever briefly, to prevent new competition. The Cartel companies can absorb loses the new competitors typically can not, and eventually the companies can return to a higher price range, with the occasional minor price war. They hold together in the cartel because it is in their best interest to.

Second, new competition is going to spring up. If you're a businessman and you see an area of the market in which a cartel has formed, you're going to want to enter the market because you know you can undercut the cartel and steal the market. How does the cartel keep new competition out of their market? I can think of one reason: Regulatory barriers to entry, which is only made possible by state intervention.

If that is the only way you can think of it, you're without creativity - as I said, the companies that form cartels are usually the largest of the industry (or at least the local market) and can absorb the loses need to undercut the new competition, who have yet to form 1> a solid financial foundation based on regular customers, 2>establish a recognizable brand name, 3> established economic roots.

A lot of the time these cartels are less official, and are often implied. Here's how it works (which you can potentially see for yourself it you follow your local economy) : Example, you have two big grocery stores in a shopping centre; a new independent grocery store opens because the owner saw a way to undercut the two big grocery stores which have previously enjoyed a joint monopoly on the local food market. Suddenly the two big grocery stores have massive sales, just before and after the independent launches. Most people will stick with the two big stores, particularly in the light of a new savings - some may visit the independent out of curiosity, but not enough. The two big store run at a loss for few weeks (or even a year if they can afford to) and have effectively destroyed the independent before it can establish its self. It's unethical, but well, a free market isn't a fair market.

http://www.bbc.co.uk/news/business-11719507
http://www.sbs.com.au/news/article/1407 ... -in-Europe
http://www.abc.net.au/news/stories/2010 ... 061923.htm

It's interesting you decided to use the air transport market as an example of a cartel forming. I say this because air transport is a hugely regulated industry, and as such an oligopoly has formed.
Before I make the crux of my argument, however, let's take a look at each of those airline companies.

I chose airlines because it was the most recent international example I could remember.

Qantas was previously owned by the Australian Government (allowing it to become an oligopoly more easily).
It receives protection from economic competition from the government, as well as subsidies.
http://www.petermartin.com.au/2007/03/saturday-forum-qantas-protection-racket.html
http://www.smh.com.au/news/business/emirates-blast-qantas/2005/11/07/1131211993331.html

Indeed it was - but I've never argued that governments couldn't be corrupt - I'm arguing that the free market has not mechanism to prevent cartels and monopolies many circumstances. At the time of current controversy, QANTAS was privatized - AND only a bit player.

Air France is the national flag carrier of France and is only partially privatized.
It is granted a monopoly on many air traffic routes by the French Government, and as such faces very little economic competition.
http://www.easyjet.com/EN/News/easyjet_blocked_by_air_france_monopoly.html

British Airways, like Qantas, was previously a public entity.
It receives government protection and subsidies.
http://www.telegraph.co.uk/finance/newsbysector/transport/2795730/Sir-Richard-Branson-Why-British-Airways-monopoly-game-must-be-stopped.html

Cargolux is owned by LuxAir. Unfortunately I cannot find any worthwhile sources on LuxAir as it is a relatively small airline, but the government owns a majority of the shares and this should speak for itself.

Singapore Airlines is the flag carrier of Singapore and a public entity.
It was granted a monopoly by the government until 2003, giving it a major headstart in the airline industry.
http://www.ameinfo.com/29059.html

Scandinavian Airlines is the flag carrier of Sweden, Denmark and Norway. The three nations together hold around 50% of the airline's shares.
As a result (take a guess) it receives government protection and subsidies.
In fact this source I have just found is important, it outlines subsidies received by many of the airlines that were involved in the cartel.
http://www.emirates.com/english/images/Subsidy%20-%20Myths%20and%20Facts%20August%20FINAL_tcm233-557688.pdf

Cathay Pacific is the flag carrier of Hong Kong, and enjoys a near monopoly.
This source is very good, it outlines monopolies that have formed in Hong Kong as a result of state intervention.
http://www.independent.co.uk/news/business/paragon-of-free-markets-is-riddled-with-monopolies-1598537.html
"Tight control over flying rights has given Cathay Pacific, a subsidiary of the Swire Pacific group, de facto flag-carrier status. Two attempts at rival operations were quickly subsumed."

Japan Airlines, as the name suggests, is the flag carrier of Japan. It had a government granted monopoly until 1987.
It receives protection and subsidies, and has been bailed out of financial ruin.
http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article6553359.ece

Air Canada is the flag carrier of Canada, and had a government granted monopoly until 1988.
It receives protection and subsidies.
http://www.airportbusiness.com/web/online/Top-News-Headlines/Air-Canada-is-unfairly-subsidized/1$40845

LAN Chile is the flag carrier of Chile and was not privatized until 1989.

So? They compete against each other - there is still a market on an international scale.

Now, why is the term "flag carrier" important? It means the airline is selectively supported by the government over other airlines, hindering economic competition!
http://en.wikipedia.org/wiki/Flag_carrier

SO? I agree that is bad - but it doesn't relate to the current Cartel Issue.

Instead, I'll tell you why a cartel is so easy to form in the ologopolistic market that is air transport. This is a simple point, it will be easy for you to understand, and it is a blatant barrier to entry that has little logic behind it.

Fuck you again. Keep it up and this conversation is over.

 

[ArthurWilborn]

I don't know where your comment about fiat money comes from, states can't print money.

Well that's a bit of a misinformed comment, states create money from nothing all the time.
http://en.wikipedia.org/wiki/Money_creation

You two are conflating a state, a federated unit of government in the United States; with State, a generic term for a government.

You've never heard of gang warfare? Two highly competitive companies trying to secure valuable resources and trade routes who aren't able to secure contracts through a government? Conflict can be highly profitable.

I've heard of gang warfare, yes. It only occurs because legitimate businesses are unable to perform the same function as police legally.

I haven't heard of gang warfare in instances of resources and trade routes though, please enlighten me.

Uh, dude; there are business who perform the function of police; they're called security guards. Generally gangs operate in poor neighborhoods, where most residents can't afford security guards.

The resources and trade routes are primarily territory and supply for the drug trade, of course. Like the nation's most successful gang:
http://en.wikipedia.org/wiki/Crips

And that's just an example in the free market. Across the entire human experience, you'll find plenty of groups too small to reasonably be called a "State" cheerfully killing and looting off each other.

Private currencies have been tried

Where?

In the US during the Articles of Confederation period. It's one of the main reasons the power to coin money was reserved for the federal government in the Constitution.

Waste is inevitable in any system, private enterprise isn't perfect.

I didn't expect someone such as yourself to argue this point. You honestly believe that tax money is not wasted a hell of a lot more than money owned by a private entity?

Certainly not, and if you had said excessive waste I would have let you pass. But your lead in was:

I will list things caused by states.

Saying the states are the cause of waste is taking things too far.