Quotation of the Day…

by Don Boudreaux on October 23, 2011

in Economics, Environment, Myths and Fallacies, Other People's Money, Politics, Property Rights, Seen and Unseen

… is a twofer – a quotation within a quotation.  Below is from page 25 of Robert Higgs’s insightful 1991 Review of Austrian Economics article “Eighteen Problematic Propositions in the Analysis of the Growth of Government“; and the inner quotation is from Leland Yeager’s 1983 article “Is There a Bias Toward Overregulation?“:

The theory of government as a fixer of externalities is often quite backwards.  Governments themselves compose “the prototypical sector in which decision makers do not take accurate account of all the costs as well as benefits of each activity” (Yeager, 1983, p. 125).  In reality, the government is more likely to cause a negative externality than to reduce one.

Sadly, it is common for economists, proclaiming to scientifically follow only the objective dictates of the facts, to identify what they (can usually only at best) presume to be an externality and then conclude without much further consideration that the most hallowed principles of Economic Science counsel in favor of corrective government action.  Such sloppy analysis and jumping-to-conclusions are, of course, quite the opposite of science.

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{ 81 comments }

Randy October 23, 2011 at 11:07 am

Excellent! And it reminds me of one of my own favorites thoughts – that the purpose of political action is to create free riders.

Greg Webb October 23, 2011 at 11:29 am

“. . . the purpose of political action is to create free riders.”

Exactly right! And, in return, the “free riders” give the corrupt politicians money, votes, and manpower to obsecure the issue and silence those who object to the free riders getting a free ride.

vikingvista October 23, 2011 at 11:33 am

It is not, as Krugman says, that libertarians don’t believe in market failure or externalities (although they no doubt think of them differently than statists), it is that statists don’t believe in government failure or government externalities. They may not directly admit it, but their judgements and actions demonstrate it.

Don Boudreaux October 23, 2011 at 11:35 am

Well said.

Observer October 23, 2011 at 11:56 am

Both governments and markets fail. That is not the question. The question is who gets to decide. Should economic decisions be made by government officials and their “experts” in the bureaucracy? Or, should economic decisions be made by millions of individuals in a free market?

vidyohs October 23, 2011 at 12:44 pm

Question. How does a market fail?

Example: You and I meet in my driveway to discuss your interest in buying my used riding lawn mower. We have created a market.

The meeting will result in either a sale or not.

How does a market fail? Does the market not do what it was created to do, regardless of the outcome?

Martin Brock October 23, 2011 at 1:06 pm

The classic “market failure” in a technical, economic sense is air pollution. The failure occurs precisely because the effect of air pollution does not exist at some well-defined location, so you and I cannot meet to discuss the problem, if I tolerate toxic emissions from my business, because the effects of my pollution are miles away from me downwind, and the effects of my pollution may be significant only if many other people emit similarly. Emitters profit, and countless other people bear the cost.

Martin Brock October 23, 2011 at 1:11 pm

People profiting from air pollution do not compensate people bearing the cost. The market mechanism does not provide this compensation. That’s what “market failure” means. It doesn’t mean that some market transaction fails to do what market transactions are supposed to do. It means that no compensatory market transaction occurs at all.

Observer October 23, 2011 at 1:29 pm

Vidyohs, Martin Brock provides you with the classic “market failure” of air pollution. Also, I thought Cafe Hayek admitted that markets sometimes fail, but advocated markets anyway because markets expand individual freedom.

vidyohs October 23, 2011 at 1:45 pm

Frankly Martin, I totally reject the notion that your emitting air pollution, without offering that air pollution for sale, is any way a market or part of a market, Your emitting air pollution is a part of something you’re doing in your own self contained process of business or pleasure (BBQing).

I really don’t care what things are called in conventional wisdom, I prefer looking at things in a practical manner, and conventional wisdom can deviate from practicality immensely.

vikingvista October 23, 2011 at 1:50 pm

MB, depends on the strength of your meaning of “compensatory”. Surely Coase’s realization was right, and those market effects he mentioned must be included (from the perspective of a central planner) when estimating the societal costs of government intervention versus no intervention. But are they ever?

vidyohs October 23, 2011 at 1:54 pm

@Observer,

Re; Air pollution, see my reply to Martin.

Re: market failure, I know the hosts and some commenters will use the term, but they do so in a careless and incorrect manner when they do. These are the same people who say that people are the only “resource” a country has and then still talk about raw materials using the word “resource”. So I don’t let their use of words and terms throw me when the concepts are so clear.

I try to avoid the ambiguous and murkey language.

Now, you can tell me that my statements show I am out of step with the majority of humanity, but that only makes me proud in general, considering what I see the majority of humanity having become.

The word or term market represents a concept and no more. Any place or time a buyer and a seller meet to discuss a trade, a market is created.

A market is always entered by at least one individual and another individual or a business; and a market only has one purpose, that is to bring a buyer and a seller together to agree on a trade. Even if the agreement is that the buyer can not buy at the price, or the seller will not sell at the offer, the market has accomplished its only reason for existence and therefore did not fail, it was quite successful.

So, try again. How does a market fail?

Randy October 23, 2011 at 1:58 pm

I tend to agree with vidyohs here. I think that air pollution is quite adequetly covered by tort. If you knowingly do me harm by production of pollution then I can sue you. If the political process block my right to sue then that is a political failure, not a market failure.

muirgeo October 23, 2011 at 2:11 pm

So I unknowingly give you a bunch of E. coli tainted spinach for your mower. After a long and bloody febrile diarrheal illness culminating in eventual kidney failure and massive hospital bills you die and I go and mow my lawn. It was a free exchange… no failures right?

Randy October 23, 2011 at 2:26 pm

That’s right, Muirgeo. No “failures”. There is no tort inherent in growing and distributing spinach, and you concede that the grower did not know about the e-coli… though I haven’t quite figured out what the mower has to do with anything…

Nikolai Luzhin, Eastern Promises October 23, 2011 at 2:41 pm

markets fail when I give Joe a coconut to conk you in the head so that I can take you food and rape your women

IOW talking abouts “markets” means nothing

Observer October 23, 2011 at 2:43 pm

Vidyohs, your argument with Martin Brock was that “I totally reject the notion that your emitting air pollution, without offering that air pollution for sale, is any way a market or part of a market.”

It appears that we do not agree on the definition of the term “market failure.” I have always heard that a market failure is a case in which a market fails to efficiently provide or allocate goods and services. If this definition is correct, then the market fails when a petrochemical plant, in order to reduce its expenses dumps petrochemical waste into a nearby river rather than properly disposing of the petrochemical waste. Based on that definition, I believe that Martin Brock is correct. How do you define “market failure”?

I don’t care for “conventional wisdom” either. I much prefer the “practical” and economic reality to political correctness and things that don’t work.

Vidyohs, you also said “Re: market failure, I know the hosts and some commenters will use the term, but they do so in a careless and incorrect manner when they do.” I am not sure that I agree with you. I have been reading Don Boudreaux and Russ Roberts for several years, and I find them both to be unusually careful and correct in their wording and thought processes.

In fact, one of the things that attracted me to this blog and George Mason University was something I once read that went something like, “Markets fail, but markets anyway.” I may not have gotten the quote exactly right, but the idea was that human beings, whether as government officials or individuals, are fallible human beings prone to mistakes and markets were better than government action because the real issue is about freedom.

You said, “I try to avoid the ambiguous and murkey language” I do too. But, words are inherently ambiguous. If not, there would be very few discussions. The issue here is whether the person is intentionally using ambiguous and murky language because he is trying to baffle you with bullshit.

You said, “Now, you can tell me that my statements show I am out of step with the majority of humanity, but that only makes me proud in general, considering what I see the majority of humanity having become.” I never said that your statements show you to be “out of step with the majority of humanity.” That would be a silly argument. I disagree with your implication about what you “see the majority of humanity having become.”

You said, “The word or term market represents a concept and no more. Any place or time a buyer and a seller meet to discuss a trade, a market is created.” I agree entirely.

You said, “A market is always entered by at least one individual and another individual or a business; and a market only has one purpose, that is to bring a buyer and a seller together to agree on a trade. Even if the agreement is that the buyer can not buy at the price, or the seller will not sell at the offer, the market has accomplished its only reason for existence and therefore did not fail, it was quite successful.” I agree with your statements here as well.

You asked, ” So, try again. How does a market fail?” Let’s first decide what the term “market failure” means before we argument who is correct. I have stated above my understanding of how the term “market failure” is defined. Please tell me how you would define it if you do not agree with my understanding noted above.

Observer October 23, 2011 at 2:48 pm

Randy, you said, “I think that air pollution is quite adequetly covered by tort. If you knowingly do me harm by production of pollution then I can sue you. If the political process block my right to sue then that is a political failure, not a market failure.”

I agree with you. Air pollution is covered by tort law, which is in effect government action designed to protect someone from another who is trying to push his expenses off onto someone else. And, I agree that it is a political failure if the political process blocks the plaintiff’s right to sue in nuisance case like pollution.

Observer October 23, 2011 at 2:51 pm

Muirgeo said, “So I unknowingly give you a bunch of E. coli tainted spinach for your mower. After a long and bloody febrile diarrheal illness culminating in eventual kidney failure and massive hospital bills you die and I go and mow my lawn. It was a free exchange… no failures right?”

That’s right, Muirgeo. What you describe is not a market failure.

And, Randy responded, “That’s right, Muirgeo. No “failures”. There is no tort inherent in growing and distributing spinach, and you concede that the grower did not know about the e-coli… though I haven’t quite figured out what the mower has to do with anything…”

Good analysis, Randy.

Methinks1776 October 23, 2011 at 2:51 pm

markets fail when I give Joe a coconut to conk you in the head so that I can take you food and rape your women

IOW talking abouts “markets” means nothing.

Absolutely. When you talk about markets, Luzha, it is completely meaningless because you couldn’t identify a market if it bit you in the ass.

I do find it a bit interesting this pathological obsession you lefties have with raping women. What is that?

Observer October 23, 2011 at 2:56 pm

Nikolai Luzhin said, “markets fail when I give Joe a coconut to conk you in the head so that I can take you food and rape your women”

No, Nikolai Luzhin. What you describe is not market failure. What you describe is your being an accessory to a crime before the fact. The crimes are theft and rape. And, as an accessory, you can be, and should be, imprisoned.

Nikolai Luzhin also said, “IOW talking abouts “markets” means nothing”

No, what you have added to this discussion means nothing.

Sam Grove October 23, 2011 at 6:14 pm

In the case of air pollution, an early case was an orchard farmer taking a railroad to court for damages to his trees caused by engine smoke.

The court ruled that we “can’t let property rights stand in the way of progress.”

vidyohs October 23, 2011 at 6:29 pm

@Observer
My friend, if as you say you agree with me here:
“You said, “The word or term market represents a concept and no more. Any place or time a buyer and a seller meet to discuss a trade, a market is created.” I agree entirely.

You said, “A market is always entered by at least one individual and another individual or a business; and a market only has one purpose, that is to bring a buyer and a seller together to agree on a trade. Even if the agreement is that the buyer can not buy at the price, or the seller will not sell at the offer, the market has accomplished its only reason for existence and therefore did not fail, it was quite successful.” I agree with your statements here as well.”

Then you must see that his below:
“I have always heard that a market failure is a case in which a market fails to efficiently provide or allocate goods and services.

“Based on that definition, I believe that Martin Brock is correct. How do you define “market failure”?”

means that the term market as used by Martin is a misnomer, careless conventional wisdom assignment of a word or term to actions that do not reflect reality. People in a market can fail themselves by making bad decisions and not doing due diligence, but the market does not care because the market meets its purpose when the two entities in the market agree or disagree and take action based on that decision. A petrochemical company releasing air pollutants or harmful waste discharges into the soil or streams is not a market action. Anyone who calls it a market action is being lazy or intentionally attempting to deceive. We can call such actions criminal but we can’t call them market.

Since working my way through the logic and rationale to my understanding of what a market actually is, and what is purpose is, I never use the term market failure, and I will challenge it every time it is used in my presence, for precisely the reasons I have given on this thread. There is no market failure regardless of how the meeting of buyer and seller turns out. The market does what it is supposed to do with total neutrality and efficiency.

Again, Observer, people use language that comes to them through enculturation, conventional wisdom, and consequently the truth/reality gets muddied, and people who only casually concern themselves (the vast majority of Americans) with business and markets are easily lied to and easily misled into supporting the wrong ideas and voting for the wrong people.

Let me get preachy. I think you, I, and everyone else should have long ago recognized that we in America are engaged in a ideological war between right (capitalism/conservatism) and wrong (socialism/communism). The weapons so far are words and terms, not guns and explosives.

What intelligent commander, intelligent fighter lets the enemy dictate what weapons are used, when the weapons are to be used, and how the weapons are used? Yet I see those who have the public forum in America, folks who should be leading the forces of capitalism, have let the looney left dictate the words, the definitions of the words, when the words will be used, and how they will be used. For all their brilliance in economics, I see Don and Russ, as well as most other public “leaders” as typical in that respect.

They fight the ideological war with the looney left dictating all facets of the war to them, and never once fight back, strike out on their own logical and reasonable course.

For instance not long ago on the subject of proper definition of the word resource, I asked Don directly and he actually deigned to answer me, “Don, if people are resources then oil, timber, land etc. should be rightly called raw materials, correct?” Lo and behold Don agreed with that……….but then goes out almost daily and violates what he has already admitted would be the better course. That is letting others dictate your reasonable language in a debate, and you’re always going to loose at that war.

Another example. Looney lefties like to call themselves progressives, and that self chosen label is faithfully used by the leftwing sycophant MSM…………and Don, Russ, and others that support capitalism, libertarianism, and even to some degree conservatism all go about daily using the looney left self assigned term, progressive. Yet I know I for one have strongly shown that there is nothing progressive about any thing they, want, or do, it is all socialism and simply regressive in every way. So why would any one engaged in an ideological war use their term when the counter term regressive is available to them to use?

If we aren’t smart enough and courageous enough to use our weapons in the war, then we deserve to lose…….and damnit to all intents and purposes we always lose those public debates.

Use the language dictated by logic and reason, and force the discussion in the public forum as to the reality of what is being talked about, what is being sought by the looney left, what their goals truly are.

Every thing they do is regressive, all of us should be sticking it to them in every forum we manage to get into. Force the truth out through our own real descriptive truthful language.

Getting back to the word or term market, if there is no selling or buying,no meeting of buyers and sellers, in any description of any action, then it isn’t market; and, some one is attempting to deceive the listener or reader. Don’t let them get away with it.

Polluting the commons, fraud, theft, are the criminal actions of people, not market actions.

BTW, I appreciated the quality, nature, and tone of your reply and questions. Next time you’re coming to Houston, let me know and I’d be proud to share a meal and toss back a couple of glasses of adult beverages.

vidyohs October 23, 2011 at 6:48 pm

@Observer,

With an edit function I could insert this, but I have another example of terms that should not be used.

Crony capitalism: Capitalism is what it is, the private ownership, use and investment of profits.

Cronyism is using the influence of government (generally) to subvert the impartial concept capitalism to distort the results of profit producing markets so that the crony will always be a recipient of the profits. Some profits may bleed off to others, but the crony is guaranteed his.

Using the word cronyism alone in my opinion is the correct way to address it as the almost illegal action it is. To allow the word capitalism to be attached together with cronyism is in my opinion a mistake because it allows a besmirching of a concept that is in and of itself totally impartial and available to all of us.

Observer October 23, 2011 at 8:38 pm

Vidyohs, I agree with a lot of things that you have said that I have read. I think that Martin Brock makes a good point if you define “market failure” as “a case in which a market fails to efficiently provide or allocate goods and services.” But, if you define a “market failure” as you have done, then no market failures can occur.

It is important that words have accurate definitions, and that those in the conversation understand the definitions of the words that are primarily at issue in the discussion. Otherwise, people are just talking past one another.

I do not like words and phrases that have come to mean the opposite of they are defined to mean like:

* Progressive,
* Liberal,
* Conservative,
* Democrat,
* Republican,
* etc.

Words mean things and should not be misconstrued in order to use it as propaganda to confuse others as to what that group really intends. But, what is one to do when a term like “liberal” has come to mean one who supports more government power. It does not seem to help to try to define it back to its original meaning because more people are then confused from the propaganda.

Vidyohs, you said, “people use language that comes to them through enculturation, conventional wisdom, and consequently the truth/reality gets muddied, and people who only casually concern themselves (the vast majority of Americans) with business and markets are easily lied to and easily misled into supporting the wrong ideas and voting for the wrong people.” I agree. But, can one really effectively redefine a word commonly being misused?

You said, “So why would any one engaged in an ideological war use their term when the counter term regressive is available to them to use?” I agree that people who use the label “progressive” are better described as “regressives.” And, will start using the correct term more frequently.

You said, “If we aren’t smart enough and courageous enough to use our weapons in the war, then we deserve to lose…….and damnit to all intents and purposes we always lose those public debates.” I don’t think that libertarians and conservatives always lose public debates. Actually, I think that they win most of those debates. I think that power is seductive and that conservatives and libertarians elected to office are often seduced by the power and the money such that they enact legislation similar to, but not as extensive as, legislation that regressives would have enacted had they been in office.

You said, “Use the language dictated by logic and reason, and force the discussion in the public forum as to the reality of what is being talked about, what is being sought by the looney left, what their goals truly are.” I have seen various loony regressives on this blog who use certain words to twist the truth to support greater statism. You make a good point, though I am not entirely convinced that you can effectively combat the use of propagandizing words.

You said, “Every thing they do is regressive, all of us should be sticking it to them in every forum we manage to get into. Force the truth out through our own real descriptive truthful language.” Okay, I am on board with that.

You said, “Getting back to the word or term market, if there is no selling or buying,no meeting of buyers and sellers, in any description of any action, then it isn’t market; and, some one is attempting to deceive the listener or reader. Don’t let them get away with it.” I won’t. I may slip occasionally as it will be hard to identify all the propagandized words and terms of the statist.

You said, “Polluting the commons, fraud, theft, are the criminal actions of people, not market actions.” I agree that all those things are crimes or civil actions that should be remedied through court action and not government regulation.

You said, “BTW, I appreciated the quality, nature, and tone of your reply and questions. Next time you’re coming to Houston, let me know and I’d be proud to share a meal and toss back a couple of glasses of adult beverages.” You got a deal. Next time I am in Houston. Perhaps, Don will be so kind as to forward your email address to me since Don has my email address. Or maybe it is better is he forwards my email address to you.

Observer October 23, 2011 at 8:41 pm

Vidyohs, you said, “With an edit function I could insert this, but I have another example of terms that should not be used.

Crony capitalism: Capitalism is what it is, the private ownership, use and investment of profits.

Cronyism is using the influence of government (generally) to subvert the impartial concept capitalism to distort the results of profit producing markets so that the crony will always be a recipient of the profits. Some profits may bleed off to others, but the crony is guaranteed his.

Using the word cronyism alone in my opinion is the correct way to address it as the almost illegal action it is. To allow the word capitalism to be attached together with cronyism is in my opinion a mistake because it allows a besmirching of a concept that is in and of itself totally impartial and available to all of us.”

I agree. I have always disliked the term “crony capitalism” because those who use the political process to enrich themselves are not, by definition, engaging in capitalism. They are engaging in political cronyism, which is ethically and morally wrong.

vidyohs October 23, 2011 at 10:22 pm

@Observer

I admit the road to getting the people on the side of right to use the language of truth and reality is a long and hard one; but, I do believe that persistence pays off, and if we keep zinging the looney left with truth and reality with our words, those words will catch on and spread, and then one day one of our converts will have the forum and the courage to use them on a national stage. Then the real debate will begin. When our side frames the debate in our words, and not theirs.

The looney left hates it and can’t handle it when they get are on the receiving end of the negative label.

Ask Don if he will forward my e-mail, this is my permission for him to do so. I know some good little restaurants that do good food at an unpretentious price. Nice talking to you.

Observer October 23, 2011 at 10:35 pm

Vidyohs, I enjoyed the conversation.

brotio October 23, 2011 at 10:58 pm

I’ll add one more phrase to the list of left-enculturated phrases that we should get away from using:

Mainstream Media.

Using that term infers that the bias exhibited in the dominant media (network news, minus Fox; NY and LA Slimes; AP, etc) represents the mainstream of American society.

KOA Denver’s Mike Rosen uses the phrase, “Dominant liberal establishment mass-media”. Precise, although a bit wordy.

Observer October 23, 2011 at 11:17 pm

Brotio, I like the term “drive-by media.”

Seth October 24, 2011 at 12:13 pm

When it does something I don’t like.

Sam Grove October 23, 2011 at 2:04 pm

In profit and loss, markets have a corrective mechanism.
Government lacks this corrective mechanism in fiscal matters.

Observer October 23, 2011 at 3:01 pm

I agree, Sam Grove. I might add that the government, if it attempts to do anything, will make the situation worse because its action will be to further the politically correct interest that likely caused the problem in the first place. You know, like the government did in first creating incentives and encouraging monetary policy that facilitated the creation of the residential real estate bubble and since then efforts to keep residential real estate prices high rather than allowing them to fall to their realistic market prices.

Greg G October 23, 2011 at 6:54 pm

vidyohs

I see that you object to anyone using the term “market failure.” The easiest way to deal with a problem is always to define it away.

Consider the problem of our need for new antibiotics to deal with the deadly new drug resistant strains of bacteria that are proliferating. It is really not profitable for anyone to develop such drugs since, in order for them to be effective, they have to be used sparingly. Hence the market for them is small although the need is great and many people will die without them.

On the other hand, it is much more profitable to develop the 99th allergy medicine, or antidepressant or boner pill since that is a larger market. Do you really not see this as a failure to solve a problem we would normally hope the market would solve?

Observer October 23, 2011 at 9:15 pm

Greg G, no, that is not a valid argument. You carefully selected your “facts” to achieve the answer that you wanted. You allege that the “market for them is small” but then go on to say that “the need is great” and that “many people will die without them.” If the need is great and many people will die otherwise then the demand for such drugs will be high. That high demand will cause others to supply the drug at a price that will reward the suppliers and satisfy demand.

You also said, “On the other hand, it is much more profitable to develop the 99th allergy medicine, or antidepressant or boner pill since that is a larger market. Do you really not see this as a failure to solve a problem we would normally hope the market would solve?”

If demand is high for both, then there will be a supply for both. That is market success, not failure.

Greg G October 23, 2011 at 9:51 pm

Observer

This is not a hypothetical problem. There are already strains of bacteria that are failing to respond to existing antibiotics. For the people dying from these diseases the need is very great. That doesn’t mean that the market for them as anything like the size of the market for another variation of the drugs available for conditions that are much more common and benign.

New antibiotics would likely work for many other than bacterial strains than the resistant ones. But in order to avoid causing the rapid evolution of resistance to the new drugs it will be important that they be prescribed sparingly. Therefore there is not much research going on for these new antibiotics.

Observer October 23, 2011 at 11:32 pm

Greg G, can you be more specific about the diseases that resist the currently-available antibiotics? Your example sounds like a hypothetical because you do not provide the necessary specifics to prove your proposition.

Greg G October 24, 2011 at 9:48 am

Observer

I am not a doctor but if you are really interested, a simple Google search will give you plenty examples of new drug resistant bacteria.

In the unlikely event you guys are successful in your attempt to change the way the rest of the world uses language, you may one day be able to tell those dying of these infections that the fact that drugs were not developed that could cure them was an example of market “success.”

Observer October 24, 2011 at 11:36 am

Greg G, I was hoping that you were presenting an actual situation of market failure rather than merely emoting about what could happen. That is why you shifted the burden of research to me in order to make your case. But, you have to do your own research and make a logical argument supported by evidence, not unceasing emoting about what you feel.

I have no doubt that there are strains of bacteria that are resistant to antibiotics, but there is a difference between resistant and immune to antibiotics. As a leftist, I am sure that you are worried about the perils of man-made global warming er climate change, a new ice age, a meteor hitting the planet, space aliens attacking the planet, etc. And, you feel that government must take immediate action to counter all possible threats. But, that is nonsense. You fail the test of being a credible, responsible adult.

Darren October 24, 2011 at 3:07 pm

As I see it, before one can talk of a “market failure”, first you need to define what a “market” is. After this, in order for that market to fail, there must be some agreed upon reason for the market to exist. What is the goal of a market? If it has no goal, it cannot fail. I would suppose the efficient allocation of resources. To what end? To increase net productivity. (“To what end?” can be asked again, etc.)

Invisible Backhand October 23, 2011 at 1:29 pm

“The two basic institutions of our capitalist system are corporations and markets, and without radical reform neither has the capability of rationally responding to the mounting crises that we face now (and will increasingly face in the future) as the ecological and energy crises compound the economic crisis. Immense corporations whose decisions affect everyone in the world are fundamentally only accountable to a small
number of wealthy shareholders, and even to them only in accord with the
narrow criteria of profit maximisation. Markets, that in theory are supposed
to satisfy social needs, treat enormous and ever-mounting social costs as ‘externalities’
that corporations can ignore and simply pass on to taxpayers, or to future generations.

Between Obesity and Hunger: The Capitalist Food Industry,ROBERT ALBRITTON

kyle8 October 23, 2011 at 1:35 pm

The only crises we face is the crises of unmanageable debt, and that is caused by government.

muirgeo October 23, 2011 at 2:20 pm

No, debt is caused by are banking system which profits immensely by using debt to steal lots of money from the productive economy via its rent seeking ability to continually turn over that money for more rent.

The GAO audit mandated by Senator Bernie Sanders revealed $16 trillion…$16,000,000,000,000 UNIMAGINABLE dollars loaned to major banking firms the last 3 years who in turn have stopped lending to the public. If you can’t recognize how majorly corrupt that is and if you have a specific solution to that that makes sense I be interested to hear of it.

You guys ignore his incredible fact instead focusing on the $0.000,500 trillion lost to Solyndra ( because of unfair competition from protected Chinese markets) and you applaud the Tea Party for Filibustering $0.000,050 trillion for police, fireman and teachers.

kyle8 October 23, 2011 at 2:26 pm

The banking system has zero to do with government debt, and that is just a retarded comment.

As for private debt, you can’t really blame the banking system for that either, that it the fault of individuals and corporations, no one forces them into debt.

As for the Fed lending to banks, that is also the fault of government you dolt. That is the method whereby they are monetizing their unbelievable level of debt.

You really need a whole lot more understanding before you post.

Invisible Backhand October 23, 2011 at 2:57 pm

According to the Board of Governors, the Federal Reserve is independent within government in that “its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government.”

http://en.wikipedia.org/wiki/Federal_Reserve_System

Greg Webb October 23, 2011 at 3:16 pm

LOL, Irritable Bowels! I can see that you have never worked inside the federal government. Of course, the Federal Reserve is going to say that it is an independent agent within the federal government. Never accept what they say at face value. Watch what they do if you want to know what really is going on. For example, monetary policy always eases right before an election in order to help the incumbent President.

Greg Webb October 23, 2011 at 3:28 pm

Yep. George is illiterate when it comes to economics, government, politics, and history.

muirgeo October 23, 2011 at 7:09 pm

Kyle wrote,

“The banking system has zero to do with government debt, and that is just a retarded comment.”

No seriously Kyle what you just wrote there;

http://www.youtube.com/watch?v=5hfYJsQAhl0

muirgeo October 23, 2011 at 7:09 pm
Greg Webb October 23, 2011 at 3:27 pm

George, you said, “No, debt is caused by are banking system which profits immensely by using debt to steal lots of money from the productive economy via its rent seeking ability to continually turn over that money for more rent.”

No, George. The national debt was caused by government borrowing to fund activities that were unconstitutional. The rest of your comment provided above is incoherent babbling. I am glad that you learned some new terms like “rent seeking” but you obviously don’t know what they mean.

You said, “The GAO audit mandated by Senator Bernie Sanders revealed $16 trillion…$16,000,000,000,000 UNIMAGINABLE dollars loaned to major banking firms the last 3 years who in turn have stopped lending to the public. If you can’t recognize how majorly corrupt that is and if you have a specific solution to that that makes sense I be interested to hear of it.”

Yes, and it is the Federal Reserve System that loaned that money to bail out certain banks, automobile companies, and other political cronies. That is called crony capitalism, which happens only with big government. And, the Federal Reserve System is a part of that big government.

You said, “You guys ignore his incredible fact instead focusing on the $0.000,500 trillion lost to Solyndra ( because of unfair competition from protected Chinese markets)…”

The federal government should not have loaned anything to Solyndra because such action clearly exceeded the federal government’s Constitutional limits. It was also a bad deal (i.e., made no economic sense). And, competition is neither fair or unfair. You do not want a monopoly or an oligopoly to occur by limiting competition.

You also, said, “and you applaud the Tea Party for Filibustering $0.000,050 trillion for police, fireman and teachers.”

The federal government does not have the authority to allocate taxpayer funds to pay for police, firemen, and teachers. That is the responsibility of local municipalities and school systems. The Tea Party cannot filibuster anyone. They can, however, called their Representatives and Senators to encourage them to keep such unconstitutional spending from occurring. That is called representative democracy.

Greg Webb October 23, 2011 at 1:57 pm

ROBERT ALBRITTON said, “. . . without radical reform neither has the capability of rationally responding to the mounting crises. . .”

It seems Mr. Albritton is here to save the day with his book. Yea! He, like most statists, claim there is a “crisis” that threatens humanity that only massive government action as directly only by Mr. Albritton can save us all from impending doom. Or, perhaps, Mr. Albritton just wants to sell books to make some money by falsely creating issues and therefore reader interest. Or, maybe, he is an activist who makes money by creating the perception of a crisis like Al Gore did with “man-made global warming”…er, “climate change.” In other words, it appears that Mr. Albritton is just another crony capitalist wanting to create consumer demand for his books and services where none currently exists.

kyle8 October 23, 2011 at 1:34 pm

The rule for all regulation ought to be the same as the rule of the Hippocratic oath, “First do no harm”.

Greg Webb October 23, 2011 at 1:45 pm

Exactly so. My experience is that both doctors and regulators think that they cannot make mistakes and consequently do harm first, last, and in the middle.

vikingvista October 23, 2011 at 1:53 pm

Doctors fear the potentially disproportionate repurcussions of admitting mistakes.

Greg Webb October 23, 2011 at 1:59 pm

True…and sometimes they make real mistakes like leaving scalpels and sponges inside people after sewing them up after an operation. And, sometimes they don’t read the patient’s medical chart before prescribing a blood thinner to a patient admitted for bleeding ulcers.

Methinks1776 October 23, 2011 at 3:44 pm

And sometimes they remove the wrong body part. Amputees always feel twice as blessed if they get to become double amputees.

And because patients never know when they might meet with a Muirdiot in the operating room, they started writing “take off this one” and “wrong breast [arm, leg, etc.]” before entering the OR. I think that’s been adopted as standard practice in OR prep, but I didn’t follow up.

Greg Webb October 23, 2011 at 3:52 pm

That’s good advice although I hope never to have that kind of surgery. After all one never knows when you will encounter a George or some other arrogant know-it-all in the hospital.

vikingvista October 23, 2011 at 4:45 pm

I was referring to real mistakes.

Greg Webb October 23, 2011 at 4:59 pm

Sorry, Vike. I thought that you were talking about situations like where John Edwards, on behalf of his clients, alleged that a certain drug that doctors used to prescribe injured fetuses, which resulted in enormous awards to plaintiffs and plaintiffs’ counsel.

So, if your issue is that “Doctors fear the potentially disproportionate repurcussions of admitting mistakes”, then what do your think is a “disproportionate” award to the victim of a doctor’s real negligence? How much is someone’s life worth? Or a leg that never should have been removed? There is a difference between real malpractice/negligence and the stuff that John Edwards and others of his ilk allege.

vikingvista October 23, 2011 at 8:38 pm

Mistakes are common. Most are unimportant. Lawyers plant spies in medical records departments. Some patients go to doctors specifically looking for a payday. While judges typically throw out cases where there is no harm done to the patient, that doesn’t stop sleazy lawyers from casting a wide net of extortion. The costs are very real even if a physician wins a case or a judge throws it out. Physician are properly of the mindset that they should not make it easy for the extortionists.

As for obviously harmful negligence, like removing the wrong limb, a physician is quick to confess and attempt amends, since not doing so is guaranteed to make it worse for him.

Greg Webb October 23, 2011 at 8:56 pm

Vike, you said, “Mistakes are common. Most are unimportant. Lawyers plant spies in medical records departments. Some patients go to doctors specifically looking for a payday. While judges typically throw out cases where there is no harm done to the patient, that doesn’t stop sleazy lawyers from casting a wide net of extortion. The costs are very real even if a physician wins a case or a judge throws it out. Physician are properly of the mindset that they should not make it easy for the extortionists.”

There are lots of sleazy people around, including judges who don’t throw out frivolous lawsuits, doctors who scam medicaid and medicare, real estate appraisers who give high values on property so borrowers can obtain the loan amounts desired, accountants who cook the books, politicians who say they want to help the people then spend their careers helping themselves, journalists who print propaganda rather than doing some investigative journalism, children of middle and high income parents who join protest movements to demand that governments provide for them since mom and dad are going to stop once college is completed, etc. Each of these types of corrupt idiots cause costs to go up for the rest of us. I suggest that doctors be more careful and force those out of the profession who are unqualified or just too damn lazy to take their work seriously. I also suggest that most doctors get out of bed with the government…only they won’t do so because then they have to negotiate with individuals and the price comes down and the doctor has to come to your house.

You said, “As for obviously harmful negligence, like removing the wrong limb, a physician is quick to confess and attempt amends, since not doing so is guaranteed to make it worse for him.”

But, they should never make mistakes like removing the wrong limb. Doctors should learn from builders, “measure twice, cut once.” The Doctors creed should be “First do no harm,” with the corollary to “check the limb twice, cut once.”

muirgeo October 23, 2011 at 2:22 pm

Yes… so we must stop all doctoring because of all the mistakes and damage it does… good plan.

kyle8 October 23, 2011 at 2:29 pm

I rarely bother to answer your nearly absolute level of idiocy, but this one comment just further illustrates your silly attempts to force every argument into an extremist strawman argument.

Since turnaround is fair play I say that you advocate that doctors steal all their patients money and then shoot them. That makes an equal amount of sense as what you wrote troll.

muirgeo October 23, 2011 at 7:12 pm

Kyle,

I award you no points and may God have mercy on your soul.

Greg Webb October 23, 2011 at 8:03 pm

LOL, George! You have no points to award. And, I thought all you lefties hated God? Are you the exception?

jjoxman October 23, 2011 at 2:53 pm

Well… you should

Methinks1776 October 23, 2011 at 2:55 pm

indeed.

Greg Webb October 23, 2011 at 3:07 pm

George, no one said that “we must stop all doctoring because of all the mistakes and damage it does.” But, doctors should not be able to push the costs associated with correcting the damage caused by their negligence, especially those doctors who refuse, because of arrogance and pride, to comply with the Hippocratic oath of “First do no harm”.

Dallas Weaver October 23, 2011 at 1:46 pm

Externalities are a good concept, but we can never know enough to correctly accurately calculate their size. Taxes themselves create externalities.

However, we could often make relative comparisons. For example, we know that payroll taxes probably decrease employment, but not by how much with what response time. We also know that oil taxes will decrease oil consumption and associated externalities, but the short, medium and long term price elasticity has great uncertainty. We also know the labor demands in the high automated oil industry are almost independent of production levels.

Given the above, we may be able to make a valid statement that shifting taxes from payroll to an oil tax in the $100/bbl range would increase employment while decreasing oil consumption and associated externalities like carbon dioxide and the huge DOD costs associated with oil without know the details of these externalities, just their directions.

muirgeo October 23, 2011 at 2:03 pm

“In reality, the government is more likely to cause a negative externality than to reduce one.”

IN REALITY there are NO successful ungoverned societies and IN REALITY the most successful economies in all of civilization have been NOT minimally regulated societies but those with MIXED economies in which the government runs some 25- 40% of the economy. That is NOT me talking but COLD HARD REALITY stating emphatically with out any doubt you are absolutely wrong! You guys are simply whistling in the dark making claims that are ideological and completely unsupported by the real world as any reasonable casual observer can see.

Sam Grove October 23, 2011 at 2:08 pm

Pre-democracy muirgeo: In reality, there are no successful democracies, the most successful societies are those that are ruled wisely be a self selected elite.

muirgeo October 23, 2011 at 2:43 pm

OK yeah sure Sam… whatever you say buddy!

Greg G October 23, 2011 at 2:48 pm

Didn’t follow that at all Sam. How are the rulers selected in these “most successful” societies?

Darren October 24, 2011 at 3:17 pm

the most successful societies are those that are ruled wisely be a self selected elite.

Most societies (not just successful societies) in history were ruled by a (mostly) self-selected elite.

Observer October 23, 2011 at 3:44 pm

Muirgeo, you said, “IN REALITY there are NO successful ungoverned societies . . .”

Sure there were. People have, at various times throughout history, lived without government interference. Some still do, but you have to go to small tribes in the Amazonian jungle or in Borneo or on small Pacific islands. For where people are, there is always some clown who thinks that he is smarter than the others and ought to rule while others do the work.

You also said, “…and IN REALITY the most successful economies in all of civilization have been NOT minimally regulated societies but those with MIXED economies in which the government runs some 25- 40% of the economy.”

Nah. The most successful economies in all civilization are those where the government interference with the economy was minimal and where the government’s expenditures did not exceed 8% of GDP. And example was the United States prior to World War I. Societies without government would be more successful, but they are seldom tried because there is always at least one person who thinks that he is smarter than everyone else and ought to rule while everyone else works.

You also said, “That is NOT me talking but COLD HARD REALITY stating emphatically with out any doubt you are absolutely wrong! You guys are simply whistling in the dark making claims that are ideological and completely unsupported by the real world as any reasonable casual observer can see.”

No, Muirgeo, that is just you talking. You arguments are illogical, emotion-based, and have no basis in the real world as any calm, thinking Observer can see.

Chuclehead October 24, 2011 at 12:43 am

Look around you. Do you consider California to be a successful governed society?

Darren October 24, 2011 at 3:26 pm

Do you consider California to be a successful governed society?

Compared to what? In no way could it be called a model to be copied. It’s a one-party state. Some of the laws and legislation are asinine. The state’s in debt up to its eyeballs. Unions own many Democrats. But I’m still optimistic.

Steve C. October 23, 2011 at 2:14 pm

The one government agency we are in dire need of is the Office of Unintended Consequences. It would function much like the CBO with a requirement to issue a formal analysis of all proposed federal laws and regulations. Every year the OoUC would publish an official “We Told You So” list.

Randy October 23, 2011 at 3:15 pm

Like

Jon October 24, 2011 at 3:22 pm

here here

Darren October 24, 2011 at 3:29 pm

I’d like to see an independent fourth branch of government responsible for auditing the finances of the other three branches and submitting an annual report to the public. It would have constitutional authority to look at the *all* the books and (hopefully) enough independence to give a fair accounting.

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