CP, do you understand what money is? I'm not trying to be condescending, it's an honest question. Money has no value whatsoever without some sort of government to back it. Why do you think Confederate notes became less and less valuable as the civil war raged on? According to your logic, people could have just decided to make them "worth something" and their value would stabilize magically. Or the German government, rather than incinerating their post WWI notes, could have said, "Hey! Let's trade with these things instead! I say one mark is worth a pound of firewood!"

By the way, the barter system is hardly something out of the stoneage. It's what people resort to during times of economic upheaval. WWII Europe existed largely on the barter system (cigarettes and chocolate).

I'll ask for the last time that I not be associated with Ayn Rand. She, in my view, was a vile women who preached a SOCIAL philosophy of selfishness, not a political philosophy.

And Mrs P. you do realize that money was backed by gold [not the government] for a significant period in human history. Gold, material that the market deemed to be valuable [and still does]. Yes, I fully understand what real money is, and it has the capacity to be something beyond fiat currency.

I do not necessarily disagree with that, Vladmir, where we disagree is regarding the question of : "What do we do about it?"

Again, I do not deny that wealth = power.

You know what's entertaining to me. I have never read an Ayn Rand book. And yet she has been referenced regarding myself 3 times already.

I have debated the attrocity that was slavery with Turnea and others already on this thread. I do not deny that the private sector shares the blame, I do not deny that the wants of the private sector were partially to blame. What I have been saying is without the state's laws [to say nothing of its coercive means] protecting slavary, such a practice would not have been possible.

CP

Your example is moot if it doesn't take cultural norms into account. 50 years ago you would have been blacklisted (no pun intended) by the business world. Cultural norms inform laws which lean on efficiency and profitability to uphold cultural norms. We didn't freely outlaw slavery because free labor wasn't efficient and profitable. Racism, in this case, was a boon.

Currency was only backed by gold because the government would secure the exchange. Confederate notes, too, were backed by gold. Think anyone was able to cash in on that? Again, currency is only as strong as the government that backs it. Without a government, there is no worth to that paper.

It was the principle of money that was backed by a finite, valuable item that was my point, Mrs. P. It shows that without government it is possible to form a currency with value voluntarily.

CP

Sorry about Ayn Rand; I thought you were the one invoking her. But your theory seems just about as rarefied to me.

Just look at the quotation above. You still maintain this distinction between the state and private interests. I mean, have you heard of John C. Calhoun, Jefferson Davis or Roger Taney? These were all major figures of U.S. government, ardent proponents of slavery, and direct beneficiaries of it. The state does not emerge from a cloud or from a book of philosophy, but from particular, powerful interests in society. That's why its unuseful to try to explain much history as "government imposition" upon the "private sector."

Of course slavery could not exist without government; no commercial system of any significance can exist without government. But it would be highly misleading to suggest that somehow some pro-slavery ideologues got into government and imposed slavery upon an otherwise unwilling U.S. economy. What I'm saying is, it's all an interwoven political and economic system; there's no way to disentangle it.

Vladmir, I think ultimatley we agree on this one principle.

Combination of the private sector and the state is never a good thing.

Can we agree on that?

Davis and Calhoun are examples of that. If we're talking about my fantasy world, the state doesn't exist. So those two obviously cannot join forces. There would only be the private sector.

I think where we disagree is this: you don't believe a market can exist without the state [which I frankly do not understand] and I do. The market is the free exchange of goods and services. I fail to see how any state is necesary for such a condition to arise.

CP

Isnt it natural in a representative government to have representatives who share in the benefits/drawbacks of their own decisions? Just because politicians have a potential gain from that which they pass into law doesn't necessarily mean that the public and the private are intertwined. They are two seperate spheres. As CP mentioned before: "private" is not a unitary entity but rather a diverse conglomerate of individuals. Thats in essence pluralism. The state is a singular entity that cannot possibly encompass all of the different interests of the private sector. What I have maintained is that we should ensure a limitation on what our representatives can and cannot vote upon so that they do not violate individual rights or vote according to populist ideas.

Well actually it is not, because even with gold there has to be a uniform standard of weights and measures and warrants against adulteration and the like. But that is a quibble next to the obvious fact that no significant system of currency has ever existed, whether consisting of scrip or precious metals, without a government to organize it.

This objection is not valid because it does not directly deal with the concept of a free market. I assume nothing about cultural norms, only the nature of the market itself.

A person could not cash in their Confederate money by the end of the civil war, in spite of the fact that the currency was supposed to be backed by gold. It became worthless. A community could get together and write the words "IOU one ounce of gold" on numerous scraps of paper, but that would be worth nothing unless that community could honor that IOU.

If I may, the idea of "collusion" is a reality in any free market.

You might say cultural norms are not part of the ideal market, but in reality they are inseperable.

Well, your observation that the government is a singular entity is correct. In general there can only be one system of taxation, one of regulation, and so on. Each market is to be organized in one certain way. That is precisely why history is largely explained by the struggle of competing economic interests for political power. That's what the Civil War was about, right? Yes, it is "natural" that people would go into government to advance their own intersts, and those of their friends and associates. That's just what I've been saying. What I also have been saying is that, because this will happen, there is a struggle for state power.

Do you not agree that there is no objective basis by which any given action of government can be judged good or bad? And that people will inevitably say that any given policy is bad or good, according to their interests? And if there is no such basis, then the Libertarian conceptual apparatus of the begnign state is seen to be impossible of being implemented.

Really, as Marx said, it is utterly useless to debate what should be. One simply has to get in there and fight for what one wants. Whether one succeeds or not will be determined by historical forces, not by any objective test of goodness.

Mrs. P, this lends credence to the idea that in a private monetary system and in a free market, there would be a need for an organization to create and back currency, would it not? There is no reason that a private organization could not provide the same service that a Federal/Central bank does.

CP

I specified competitive.

And, obviously, collusion is not possible in a competitive free market; thats a contradiction.

When making an assertion about the nature of the free market, we need not assume anything about culture, no.

I am not discussing what is a good thing. I am discussing what is a real thing. There is no such thing as a state that is not the instrument some some people with power, working for their own private interests. As a Marxist for example, I would like to think that the working class will eventually take over the state and use it as the instrument of their power (and yes, it would be best if this happened democratically). What I do not expect to happen is for the powers that compete for control of the state, whether they are those conceived by Marx or others whose existence would refute his theories, ever to give up. And that is why there will never exist a neutral, benign state as envisioned by Libertarians.

Would such a state be a good thing? Yes, as much as sailing up to the moon and dining on green cheese.



Well then, why did markets vanish with Rome?




Yes, and I am beginning to wonder how many angels could dance in this rarefied, perfect market of your theory. Perhaps you would supply some examples from history to support your point of view. You know, what actually happens?



And how would monetary policy be set? And what would ensure that a rival "central" bank would not be formed and issue its own currency?

The highly esteemed Nebraska29:


Hobbes


Indeed, that is true. Hiring someone doesn't violate the boss's civil rights. If someone is passed over on the basis of race, age, and gender, you can't tell me that putting the person with merit in who deserves it in the first place, violates the employers rights. Yeah, take that-you have to take the best person for the job.



Now we're creeping away from the topic. We are talking about a person who is qualified and fits the bill in every way, only to lose it on the whim of the boss. We aren't talking about a person who "interviews bad" and suddenly, the boss is forced to take the person on.

Outsourcing, where racial preference is put aside to make a profit. Although, I suppose I would have to prove the white, male, christian power structure has a preference towards their own to make this claim.

QUOTE(BecomingHuman @ Aug 7 2007, 04:51 PM)

QUOTE(Lesly @ Aug 7 2007, 01:36 PM)

Your example is moot if it doesn't take cultural norms into account. 50 years ago you would have been blacklisted (no pun intended) by the business world. Cultural norms inform laws which lean on efficiency and profitability to uphold cultural norms. We didn't freely outlaw slavery because free labor wasn't efficient and profitable. Racism, in this case, was a boon.

This objection is not valid because it does not directly deal with the concept of a free market. I assume nothing about cultural norms, only the nature of the market itself.

That's the disconnect I see on the laissez-faire side. Economists exaggerate the relationship between variables to deduce optimal outcomes. To accomplish this they need to ignore difficulties—and throw in a few caveats about the market they're describing to boot. It all looks wonderful on paper until some irrational human concept like race comes along and disregards our perfectly logical formula. This harmonious market immune to irrationality will exist as soon as human nature changes, and by then we may finally witness Marx's utopia.

There are several things about CP's comments in this thread that concern me, and on several different levels. So I would like to ask a few questions and make a few comments.

In a system of anarcho-capitalism or what have you, where all contracts are voluntary, etc, how does this translate into practical matters? For example. I work for the XYZ company. They pay me to fit widgets onto their machines. They pay me in XYZbucks. Now, I feel like I don't like this arrangement. I want more pay, because my family is just scraping by. They refuse. You seem to be saying that I should simply find the contract I want elsewhere. Theoretically that's fine of course, but what about practical considerations? I can't really move somewhere else, because XYZbucks only work in the town where lots of people work for XYZ, and so the stores there have agreed to honor that scrip. I move to another town, I'm starting off at exactly zero, no matter how much I may have accrued while earning my XYZbucks. It seems to me that theories like this look at things from the top down, never from the bottom up. It seems that in this system, 'rights' and power increase with one's wealth, and relies on there being people whose powerlessness limits severely their scope of free choices. What does your system do, for example, for the person with an IQ of 85, who has a child born with a really severe learning disability? Do we as a society have any obligation to help these people, to ensure their political rights? If not, wouldn't the free market urge us toward eugenics? Just as it was many of the leaders of industry who promoted eugenics in this country?

And on another level, what about the fragmented society that seems to be the result of this system? Surely we can agree that a sense of community is important. A neighborhood is strengthened by long-term residents as opposed to constantly shifting populations. Families are stronger if they are together. Our sense of connection to one another is stronger if we are grounded. The philosophy that says workers ought to go where the contract suits them seems to me to promote a very fragmented society, ultimately; a society in which we really have no roots whatsoever, no 'home.'

Another concern I have about this general idea is that of rights. Without a commons, where do individual rights have their expression? Think about freedom of speech. If there is no public commons, where is this right? Only in my own house? If so, what is the difference between democracy and dictatorship? Where would I exercise the right to assembly if every space is private? Being able to say anything I want in my bathroom isn't freedom of speech. Holding a protest in my living room isn't freedom of assembly.

I am also concerned about the fundamental lack of transparency in a truly anarcho-capitalist environment. How can people be expected to make rational economic decisions if they have no way to see the full context of any given situation? We know from history that private entities can be quite good at masking their unsavory practices. What recourse do we have to uncover these in this system? Certainly not everyone will have the power or wealth to hire top notch investigators. If there is no impartial oversight, how do we know that the ABC company isn't just telling us they are disposing of their industrial waste in a good way, while really just dumping it far out at sea?

I not in favor of complete laissez-faire economics.

I'm merely separating things that aren't the free-market, like culture, from things that are the free market, like the free market. Because the free market can exist in many different cultures, and cultures can have influences on markets one way or the other, it is best not to make judgments about the free market that are better reserved for cultures.

Ceteris paribus, or, holding all else equal. We assume nothing about culture one way or the other, it is an accessory.

Ceteris paribus

Does this mean you agree "the private sector/free market [can] result in the same kind of violation of rights as the government"? Maybe I missed it.

This does not refer specifically to what I was addressing, that discrimination based upon non-profit motives, like age, race or sex, is something that is intrinsically punished by the free market, holding all else equal.

But, yes, with that "can" you edited in, I agree that "the private sector/free market [can] result in the same kind of violation of rights as the government." I said as much in my first post.

I don't mean to nag but, no, you didn't. This is your first post? There you argued the market punishes employers who violate someone's rights. That's what you come away with ceteris paribus, right? But whutevah; you said the markets can result in the same kind of violations government engages in, so we're in agreement.

Not really true, although in modern times probably the same difference. Currency has exactly the value that people place on it...the government is not necessary at all for currency to have value. Conversely, you could have a government that people have no faith in, however strong, and currency would have no value. Consider the situation here. Is a dollar worth a dollar because the government says its worth a dollar, or because you can go to the store and they'll give you a dollar's worth of goods for it? The latter. This is why some countries have such high inflation--not because they don't have a strong government, but because the people have little faith they'll be able to get the same value later for their currency as they get now. It is, in essence, the truest of markets, as it is a good that has no value at all other than that which people place on it. The government only enters into the equation indirectly, by helping to form the perception.

Not true. Markets can easily exist without government...in fact, most governmental involvement is primarily to restrict the market, not to create it. People need goods, and will create a market to get them. They'll do this without any government involvement whatsoever.



Again, not true. Ancient cultures had markets before they had governments backing any currency, and such currency often had value outside of that area, beyond the influence of whatever government existed there. Currency has whatever value people place on it, not whatever value some government specifies. If government really set the value...why do we have inflation? Surely, government could simply declare it to not exist? But, alas, they cannot. Why? Because they have no power over the value of the currency.



Or, perhaps even more fundamentally, whether we need to do anything about it at all. Pure capitalism would say the answer to that question is 'No'.

Wouldn't that logically mean that "pure" capitalism is irreconcilable with democracy?

I must be making this complicated. I said:

But if I must state it clearly: yes, the private sector can result in the same kind of violation of rights as the government.

I am not saying the market punishes people that violate someones rights, but that it punishes those that makes decisions upon non-profit motivations (race, age, sex) rather than profitable ones and that, therefore, there is a built in protection against discrimination.

To illustrate, I am not saying a private organization that employs a thousand ninjas to loot a rival company is going to be punished by the free market. But if the chose only to hire Asian ninjas rather than Italian ninjas, their discrimination inherently limits the the amount of ninja looting they can do.

..but how much? I mean technically our vestigial appendices and tail bones limit our tendency to procreate by siphoning limited resource and causing disease and injury.

Just the same we do all right for ourselves.

A correction mechanism like this is exceedingly weak and flawed. What happens when marketing to a moderately racist clientèle?

Hey Quark, it's been a while. I'll see what I can do to put your mind at ease.

First, the issue of the exchange of currency from one to another. First, it is unreasonable to assume that individual companies would create the entirety of currency. But we'll proceed under the assumption that they do. Exchanging currency would work similarly as it does now, only operted by private entities. Second, it is not the duty of 'society' [an artificial creation] to take care of that child. However, if individuals would like to help him, they would be free to do so voluntarily.

There is no reason to believe a 'fragmented' society would exist. In fact, because anarcho-capitalism emphasizes contracts and mutual consent, I see no reason to believe why communities wouldn't strengthen. But that is irrelevant. People can decide for themselves what is 'good' for their families.

Since when has their ever been a 'right' to assemble on the property of another individual? You have the right to say whatever, do whatever and express whatever you'd like on your property. When you enter onto anothers, you have to obey the rules they set forth. Your staying on their property is a matter of mutual consent.

There is no reason to believe their wouldn't be watchdog groups, media or any other of the investigative outlets that exist today, Quark. If there is demand for those commodities, there will soon be a supply.

CP

Unfortunately, I'm not sure the question of "how much" is terribly important to this debate. By its very nature of placing profit above all else, the competitive free market hinders non-profit discrimination whereas the government is under no similar, intrinsic compulsion. If it does it by a little, or it does it by a lot, its still more than the government necessarily does.

I would disagree though that the correction mechanism is "exceedingly weak and flawed," outsourcing is proof enough of that. If the cost of discrimination is the premium of hiring American workers over Chinese workers, plus the cost of being unable to find enough American workers, plus the cost of not selling to Chinese customers, the amount of correction would be extreme. Extreme enough that businesses would find themselves out of work.

How much did we outsource in the fifties? Was hiring discrimination not rampant at home?

What about the thousands of discrimination settlements every year even today? Millions of dollars in losses? Continuing housing discrimination?

Outsources proves nothing except the desire for cheap labor. How far will those workers ascend on the corporate ladder? We've always been willing to let the lesser being pick cotton for us...

So what?

I maintain the question of "how much" is not necessary for me to win this debate. As long as it does so, by its very nature, it is better than the government necessarily must. In which case, the existence of discrimination does not refute a cost of discrimination in the free market.

And outsourcing is a perfectly valid example. A racist that refuses to hire Chinese workers will simply not be competitive in the manufacturing sector. In that case, refusing to hire cheap labor, due to a non-profit preference of Caucasians over Asains, comes with significant cost.

...but sometimes (most of the time, really) discrimination does not come at significant cost. The unskilled or semi-skilled labor market are highly competitive because of the glut of cheap labor. Not so in other functions. I don't see how the free market is better that government at policing discrimination. Housing studies prove the opposite, more government enforcement of housing laws leads directly to less discrimination than sectors were the market is free to act.

Outsourcing may be an example (though not always, again racists have never had a problem with others doing menial tasks) but it hardly characterizes the entire market.

It's not complicated. I guess we're not saying the same thing.

In the absence of all laws, the competitive free market ultimately conforms to the desires of man.

Article 1, Section 2
Representatives and direct taxes shall be apportioned among the several states which may be included within this union, according to their respective numbers, which shall be determined by adding to the whole number of free Persons, including those bound to service for a term of years, and excluding Indians not taxed, three fifths of all other Persons.

Article 1, Section 9
The Migragation or Importation of such Persons as any of the States now existing shall think prefer to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a tax or duty may be imposed an such Importation, not exceeding ten dollars for each Person.

Article 4, Section 2
No Person held to Service or Labour in one State, under the Laws thereof, escaping into another, shall, in Consequence of any Law or Regulation therein, be discharged from such Service or Labour, but shall be delivered up on Claim of the Party to whom such Service or Labour may be due.

I think the rejoinder here is, you wish that were true? This is the other side of the coin CP and Leder argue against. The capacity for government to sanction evil. But they also think the absense of laws can check/stop our capacity for evil. The market may or may not take care of injustices. If it doesn't, too bad. At least it's not the government.

If there is a desire for drugs, assassins, thieves or slaves, I see no reason why the why the market could not quantify these desires with a price.

I can't either. See the Constitution.

If anything, that's the beauty of it, the market is perfectly adaptable to all wants that can be created or serviced.

It's beautiful and tragic.

The market is not consistent. If it were a government the rule of law would change indefinitely.

The market "changes" according to the rule of law. That's what free market types rail against, isn't it? The markets themselves don't change. One product or service has several things in common with another product or service. Our understanding of markets, however, may change.

If one wants to add on the right to work voluntarily, or the right to not be killed and have your stuff taken, we are talking about things that, strictly speaking, are outside the realm of a completely free market.

This contradicts: "If there is a desire for drugs, assassins, thieves or slaves, I see no reason why the market could not quantify these desires with a price. If anything, thats the beauty of it, the market is perfectly adaptable to all wants that can be created or serviced." Which is it, BH?


Isn't the person violating another's rights is the person making decisions based on non-profit motivations? That's what I meant when I typed "you argued the market punishes employers who violate someone's rights".

Is this built-in protection always lurking in the background and non-arbitrary? Can it be enforced? Is it measurable? Basically, does it matter?

I must disagree with "most of the time." Heck, at this point red-blooded CEO's are outsourcing customer service to India.

Non-profitable discrimination is most likely to occur when the premium for hiring subjectively preferred employees is small or non-existent, which are primarily in the markets you described. And just about nowhere are there corporations that discriminate so much that they refuse to sell products.

The economy is not primarily made up with cheap labor anyhow.

Ah, but here we imply that the government necessarily wants to reduce discrimination. In that case, I will assume corporations necessarily want to reduce racism and we have an accord.

If we are dealing with a racist corporation and a racist government, at least the racist corporation will subject itself to some competitive pressure if it does discriminate, unlike the racist government which will not.

As such, I still maintain the question of "how much" is not necessary.

Edit to add in Lesly:

I still do not think we're seeing eye to eye here, and I believe its largely my mistake:

No, I do not wish it were true. The market is capable of great evil. I believe this is what I said in my post.

Here I am certainly not being clear. I meant, if the market were like a government, it would be like having laws that are in continual flux because the power would ultimately flow from those with resources and shaped by their desires.

So, yes, the markets themselves do not change. But desires and resources do change.

To clarify, the right to work voluntarily or the right to not be killed and have your stuff taken, are not intrinsic to the free market. Thus, they can be provided by the free market, but they are not fundamental to it. Claiming that the free market must create these rights is untrue.

I am sorry we must debate this, as this is my big critique of a strictly laissez-faire environment. This is the last thing I would have thought you would object to, and it is probably entirely my fault due to my lack of clarity.

If profit is the sole motivation (as we would assume in a competitive free market, given that profitable companies survive), yes it is intrinsic. I am going over questions like "is it measurable" and "does it matter" now with Turnea.

I don't understand what you mean by "violate someones rights," and this claim is more broad than I am comfortable with. I feel I have specified non-profitable discrimination enough to avoid arguing over something this malleable.

Likewise, I feel I have done a pretty good job explaining why this protection, outside of all circumstances, must exist. If there is something that you object to in a previous post, or if my previous explanations are unclear, I will gladly face your objections or restate what I have already said more clearly.

Edit: Missing words, duplicated words, sentences that made no sense.

There are many areas of the world (all developing) that operate very similarly to your plan. Almost no central government to speak of, police are almost entirely "private forces", ect. What do those areas look like? I'll give you a hint, one of them is the area of mountains between Pakistan and Afghanistan. Before the Islamic Court System took over Somalia that was the way things were run there too. How did that go? Do they have "watchdog groups" and "investigative outlets", or is even the Red Cross afraid to visit? I'm sure there is a big demand for watchdog groups but that doesn't seem to pan out for them. In fact, the only investigative outlets that come to those shores are journalists from other nations that pay the thugs for permission to write their stories. What makes you think anything would be different here?

The reason such areas are often drawn to religious extremism in the first place is DUE TO THEIR LAWLESSNESS. When the law is outgunned, thuggery rules. For that matter, what is to prevent the mafia from taking over under your your system as happened in the former Soviet States after the fall? "Hire more police?" What is to prevent them from corruption too? What is to prevent them from making the "hard choice" to take money from you to protect you and then money from the other group so they can rob you blind when you leave your home? He'd make a "contract" with you? THat's just a wish on paper under a system like that. I suppose you could exercise your right to hire someone else later...again and again and again. Surely if it is your "right" to hire someone to protect your property and another person who cannot afford it holds no such right, then it could be argued that it is also anyone else's right to take it by force if you can't afford enough protection to keep it...it might just take a bit more power for them to get your stuff than Frank's who cannot afford an honest bodyguard.

We have infinite examples of what happens to areas when their respective governments break down and leave no government in its place. The results are generally horrific. I cannot think of a single successful instance of your theory employed in any place, anywhere in the world that maintained any concept of private property rights. There were a handfull of hunter/gatherer tribes, I suppose they might have held a personal item or two in their pockets. With the birth of private property comes the government necessary to sustain those rights.

Here's another question (just a tiny one, a modicum of the problems this idea would produce)...how would other nations fall into this? For instance, Japan has bought 49.5 percent of Hawaii, and as a result the house prices are so high over there many people cannot afford to live there. Our government placed a moratorium on Japanese buying. I must assume that under the 'no government system' there would be no such recourse available. How would you keep another country from swallowing us up using currency that would be infinitely more viable than the haphazard system of self-printed monopoly money via "privatized banks" we'd have.

Edited to add: Here's a final thought. Concentrated state power is responsible for millions upon millions of deaths, absolutely true. I wouldn't want to live under a system that gave too much power to the government or didn't protect private rights. We know how badly those governments operated because we have records and uncovered evidence to the fact. But how many deaths in this world have been caused by rampant, predatory violence in systems without any government whatsoever? We have no idea, those deaths just disappear into history as though the people never existed...just like so many Africans die in droves under similarly lawless (excuse me, "private law") systems today.

Yes, yes. I'm a Ph.D. economist, so I understand all this. I think most others do as well. You can perform any conceptual experiment you like; the problem for anyone who has progress to make in this world is to account for history (or for reality, if you prefer).

The fact is, ethnic and religious discrimination in employment did exist for many decades and probably still exists. So it is hardly useful to argue, as Becker does, that the forces of competition will inevitably drive this out. If we join him in that, we must say that the forces of competition were absent throughout most of history, a proposition in which not many people would care to join.

Now Marx had an account of the labor market that proposed that racism and similar social antagonisms were wedges that the ruling elites drove into the working class, or at least, took advantage of and encouraged given their presence there, so as to divide them and reduce the possibility of their organizing. Whether or not this account is true, it is at least an attempt to explain why, in general, the mere presence of "free market" capitalism does not make these irrational social divisions go away.

It happens that for many years the biggest non-union steel mill in the U.S. was the Armco mill in Middletown, Ohio. It also happens that the Hamilton-Middletown part of Ohio had by far the largest and most active chapter of the Ku Klux Klan in the upper Ohio Valley. There is also evidence that the Klan was active in union busting. This one case is by no means decisive evidence for the Marxian account, but at least it does not refute it.

"Free market" is a funny term because it is not precisely clear of what this market is free. Economists, and least when they are doing economics and not straying into political advocacy, speak of "perfectly competitive" markets, not "free" ones. I think that in the imaginations of many, a "free" market is one that is free of government regulation. But as I pointed out at length above, such a market is an impossibility, since government regulation is precisely what makes markets possible (see my remarks to CP about the stock market). The notion of a market somehow outside of a regulatory context is mostly a fantasy, although you can see something of the kind in the local markets for cocaine and heroin.

Finally, I think that you should answer how slavery existed in this country from its inception until 1865; most accounts of this phenomenon assert that slavery was an efficient way of organizing Southern agriculture, and so was promoted and defended by those with corresponding interests. If you would claim that slavery was merely an imposition of government, you have a lot of explaining to do.

That's only if you think about it out of context, Econ 101 style. Consider that the most "outsourced" secotrs of the economy are unskilled and semiskilled labor. This is because labor is cheaper in countries with a high population of poor people. Therefore this is the area of the economy that benefits most from being willing to deal with other ethnic groups and sure enough here racism costs, but only in hiring, you don't have to promote anyone.

I'm not a Ph.D economists, but I'm well read on the Civil Rights Movement. Corporations benefited monetarily from discrimination for a long time. Using the race wage to placate white mill workers and pay their black workers less at the same time, using the Klan as strike-busters was certainly true as well.

Sure stores sold to black customers, just not at the counter and didn't hire any blacks.

Segregation caused different spaces not whole different economies. Money, black and white, still went to the same people and completion changed that... not much. Discrimination was rampant in the North too, with no Jim crow laws to blame.

And backing up turnea let's be clear on exactly which costs are being saved by outsourcing to (say) China. Labour costs, clearly. And the saving in labour costs is mitigated somewhat in current markets by the cost of transporting the goods to Western markets from China (which is not inconsiderable.

But the market is not really reflecting the true costs. For example, the costs of all the additional pollution that comes from dirty Chinese coal-fired power stations, from the anti-fouling paints on the bottoms of the container ships, from the diesel oil being burned in their engines that a> produces lots of CO2 that adds to greenhouse pollution (whether or not it is the main cause, it cannot but contribute) b> gets washed into the sea when they clean their tanks. Currently, NOBODY is really bearing those costs, because the businesses are externalising them onto someone (anyone) else, and taxpayers (as represented by government) have yet to address many of the problems caused by such routine pollution, much less change the national and international tax systems so that such environmental costs are attributed where they arise i.e. with the private (and occasionally public) enterprises that generate them.

Similarly, companies want educated workforces. So they put pressure on governments to increase education spending and efficiency, and (sometimes) relocate to places like India where there are large pools of highly-educated and cheap workers. And for work-based training (in, say, project management or accountancy), where 40 or 50 years ago companies would usually foot the bill themselves, these days they either tell their workers that they will have to stay with the business for X years if they don't want to pay for the training costs in full or part (which seems fair to me) or, more often, they expect the trainee to pay for the cost in full. They have outsourced the costs of the training THEY need their workforce to have onto the workforce themselves, or onto the taxpayer.

Of course, this is because market for qualified people is such that any business that DOES pay for the full cost of the training will find their people get poached; even if there are contractual penalties for the worker to pay, it's cheaper for the poaching company to pay this as a "joining fee" than it is for them to train their own people. Market forces at work, and understandable for the companies competing for people, but the net result is that everybody ends up having to pay for training that COMPANIES need them to have; many skills or professions that used to generate most of their members through apprenticeships and other on-the-job training at the employers expense now require degree courses instead, and degree courses are paid for not only by the students but by the wider taxpaying community.

Private institutions are not your friend. They are not automatically your enemy either, any more than a crocodile or a lion is, but when they're hungry and you're nearby, they'll eat you as soon as look at you if they are free to do so.

Some intervening authority is necessary to ensure that there are bars on the cages, locks on the doors, and armed game wardens around to kill any maneaters. More often than not, in commerce and industry, that game warden is the government.

I do not trust the market to self-regulate any more than I trust the National Union of Lions to implement a vegetarian-only policy; the best they are going to come up with is something that talks about sustainable harvesting of meat resources i.e. they'll limit themselves to eating 10% of us annually.

I'm surprised at the amount of antipathy I've generated here by simply saying the competitive free market does not reward those who place other things, like race, sex, and age, over profit.


The money manufacturers save on outsourcing is not small or non-existent. So, this use of "profit over race" makes a lot of sense out of econ 101 style (as well as inside it) because the premiums are so large.

I'm not sure exactly where your going with this. Are you saying the money difference in outsourcing is actually small, and so there is a possibility producers are discriminating by preferring Chinese over American?

I'm not done with Turneas post, and I recognize the many other posters in this debate. I will return.

Antipathy?

Not on my part I'm just having fun debating on of the fundamental issue of politics, if you ask me.

Now disagreement...

Man, you don't know the half of it

Here's my concern. The strict competitive free market is an ideal that simply does not exist. It ca be approximated in some sectors of the economy, but history has shown us that it is not typically the case.

Life is always more complicated than Newtonian Mechanics: old Einstein saying.


Only for un/semi-skilled labor and only rather recently. That's what I meant by flawed. Entry-level labor is completive. What about first-tier managers? Keep climbing the ladder and the premium for discrimination drops precipitously.

It's always been cheap to use to poor or whatever race for labor. That's never been the sticking point. It's everything else.

On the contrary, "profit over discrimination" is more evident at skilled labor sectors, where sacrificing an employee that you cannot easily replace comes at significant cost. Firing an Indian software engineer who is the only one that knows the programming, or a gay surgeon that generates thousands in profits, is more rare.

People have been doing business with people they don't like for thousands of years. In this case, the profitably trumps the dislike.

I don't understand what this comment is referring to. If I'm saying cheap is more important than race, then saying business's have always used cheap labor doesn't add much. If anything, the assertion that businesses always use cheap labor is proof of my point, that cheap is more important than white or black.

The existence of discrimination does not disprove the existence of a cost of discrimination.

If I hate black mill workers, and hire a white mill worker for $4 more than I could have gotten a black mill worker, that is a non-profit decision that costs me $4 extra dollars. It is absolutely ludicrous to argue that paying more for the same service is somehow profitable.

As long as they are being saved, this is irrelevant to my point. Though I do like the idea of social costs, and think they add a lot to my position.

I believe this debate was centered around a thought experiment, and, actually, the only point I've been trying to make is that, holding all else equal, the competitive market, by its preference of efficiency and profit over all other things, discriminates less than a government must.

In doing so, I've had to rule out other factors that might change results and not clearly establish relationships. Let me explain why I am invoking Ceteris paribus (holding all else equal) more clearly.

If I want to find out whether trees or flowers mature faster, then I might plant two seeds. I would want to control variables like sunlight, temperature, soil density, etc. so that the only difference between the two plantings is that I would have two different seeds, otherwise, extra factors might alter the result in a way I don't intend.

Now, normally, this experiment would show that the flowers would mature faster than the trees. But someone might contest this, claiming that flowers do not grow faster than trees if the flower seeds are planted in Alaska. In which case, we would point out that temperature is exerting an influence, and the experiment is not properly controlled. In fact, we could get all sorts of wild answer if we were allowed to change the flowers location. This experiment says much more about location rather than growth rates, and its simply not what we want to demonstrate.

Lets take a more relevant example, an anti-gay bistro. Business might not differ much from the control in Salt Lake City. Perhaps business would boom in Nazi Germany, 1941, where the anti-gay slant might encourage business. What if we moved it to the Castro district in San Francisco?

As you can see, we can get all sorts of crazy answers if we are allowed to move around the context. As such, I simply do not feel I have to defend against a thousand "what if's" and wily nilly context changes. It simply assumes to much and adds unnecessary complexity, and in the end, we are saying more about these unnecessary changes than we are about the competitive market itself.

It either does that, or disproves the nature of the human response to that cost, take your pick.

Again, you refuse to deal with real world complexity. When racial discrmination help you avoid costly disputes with disgruntled white workers. Or when your white clients don't want to live next to black people.


Now who's stretching the context? Very rarely is such a uniquely skilled minority candidate the case. More likely there's a small appreciable difference in skills between applicants and some just picks the race the like. It's what actually happened before employment discrimination statutes.

No, thats not necessary. There might be an employer who is so racist that they refuse to hire non-whites no matter what the cost is. If so, there is such a cost, and the human response would be choosing the high premiums over the cheap labor. Such a choice would put the employer at a competitive disadvantage to those employers willing to higher cheaper labor.

Your right, these are real world complexities. I just rather not deal with these because other real world complexities, like white clients who prefer to live next to black clients, or workers that prefer a more diverse workforce, are just as valid given different contexts and circumstances. I would rather not assume more than I have to because the end result might say more about the complexities than the nature of a competitive free market itself.

A bigger explanation is at the tail end of post #142.

You are correct, it is rare that such a uniquely skilled candidate is the case. I merely wanted to emphasize that, in general, highly skilled employees are more costly to fire on whim because they are harder to find, have specialized knowledge about the companies practices, or possess a certain level of extra experience.

This isn't necessarily the case, no. There might be thousands of potential doctors, but I feel these jobs generally do not have as many qualified applicants.

Only it that employer operated in a strictly competitive environment, which exists is few sectors of the economy.

...and even so how high the cost? Discrimination cases today show that it's about negligible as long as no one sues.


I'll go math again. Employment is a discrete function. A cost is either assessed or it is not. If candidates are available with similar qualifications, it is not.

If we take out "competitive free market" and assume nothing except that the employer is making non-profit decisions (race, sex, age), he still probably wouldn't make it in a reasonably competitive market (or perhaps, a practically competitive market).

But in, say, any other type of economic market, said employer would still pay a price for such a decision, the premium over the price he could have received. In which case, there is still a cost. Though the business in this environment might survive, it succeeds to a lesser extent than it might had without non-profit discrimination.

So, there is still a punishment, if not a complete prevention.

Why, in outsourcing the cost for not making solely profitable decisions can be quite large.

I'm not sure I understand precisely what your getting at.

An intuitive demonstration of what I'm talking about is this, which is more costly to a Health clinic, losing a doctor, or losing a janitor? I feel that most would say losing the doctor is more costly, and, as such, the clinic is less likely to want such a loss, particularly on whimsical preferences such as sex, or race. This, however, is not necessarily true, just in general.

Most of the time, we arrive at this intuition by rationalizing that it is much, much more difficult to find a qualified doctor than it is to find a janitor. The cost of finding this doctor, and the amount of money one does not receive while trying to find this doctor, is part of the premium paid.

In addition, if your implying Doctor A is just as good as Doctor B, like Janitor A is just as good as Janitor B, then your not factoring in other things about the doctor, like experience, skill, or specialization. While these things mean nothing to a janitor, they are a large part of a doctors profitability. Getting a less experienced doctor, or a less skilled doctor, is an extra cost for firing the first doctor, solely on whimsical preferences.

There is a significant issue with this analogy...that being that if you want to view private companies as lions you need to further understand that those lions would be there solely to serve the herd, not visa versa. Basically, any lions that didn't provide some service to the wildebeasts would die off. Lions wouldn't be there to harvest meat resources, they would be there to provide resources to the meat-bearers.



BecomingHuman, I think you and Turnea (and others) are arguing different contexts, hence the difference views. You are arguing a pure competetive marketplace, whereas Turnea and others are referencing historical events where such a marketplace did not exist. I agree with you in that in a pure marketplace, discriminating will indeed cost the discriminator money. Discrimination will either reduce one's potential market, lower one's productivity, or increase one's costs. All of these reduce profits, and hence cost money. In a real market, these things don't always happen. I could see a business in the south, for example, profiting from serving whites only, because serving others might actually decrease their market, not increase it.



Probably true...but it is getting closer and closer all the time. Many past examples of profiting from discrimination probably wouldn't occur today, or if they would, then not someday soon. Consider my example above of a business serving 'whites only'. Might have been profitable a few decades ago, but today, even without any laws against such behaviour, it would be driven from the market, usurped by those who didn't perform such discrimination.

I think both analogies are a bit one sided. Private companies are made to receive our money for... something.

Sometimes its a service, sometimes we only think it is. This is what Galbraith called the "myth of consumer sovereignty" the overwhelming affect marketing in all its forms has on our consumption tendencies.

I mean we could pretend all those snake oil salesmen were providing a service too.

So both points are well made.

Julian is right to say that technically corporations have no intention of "serving" us, they want to squeeze as much money out for the least amount of product. Hence kid's cereal.

Hobbes is right to say that they act least have to provide some product to someone to get payed at all.

Sometime the balance is good, sometimes not so much.

Ideally... but why do you think that propaganda and advertising have been so hugely developed in capitalist leaning countries? Unless there is some agency enforcing transparency, large corporations will attempt to externalize their costs onto an unsuspecting public. And they have been getting away with it for a long, long time. Ostensibly serving some part of the society, while extracting from that public an often unseen cost. Our government has been completely complicit in this, but ideally the government serves to regulate industries and ensure that they bear the actual costs of their 'services.'

I want to address other points in this thread, but before I go home I will comment on this statement. Surely you are not suggesting that propaganda is a symptom soley of capitalist leaning countries? If my recollection of history and current times serves me correct, Fascist, Communist, and Socialist nations used a heavy dose of propaganda in their countries...probably more so than in capitalist. The difference is that in a free society, propaganda is just one voice among many while in those totalitarian states, the propaganda was the sole voice.