Free Market Regulation Question

reply to post by AnarchoCapitalist


What I really meant is that your question is over simplified, there are both factors at play in looking for a resolution that addresses state and individual interests to the complex financial mess that has developed. It is going to take a lot of resources to sort out this mess, that means money. But even if you throw all the money in the world at this problem, without state support all you will end up with is another whitewash.

Sorry I got here late to the party guys.

In a free market system where the banks have total control of our money supply, what is to stop them from increasing the money supply to keep themselves afloat. This is exactly what happened. The Fed GOV bailout was tiny compared to what the Fed RES put out there.

How about making a reasonable comparison.

A well regulated system with an evenly enforced set of rules,

Verses

Our current bankrupt system created by attempts to put in place a free market.

or free market system as you will?

reply to post by neo96


Nice point, but you need to reconcile with the fact that the people who support free market economics are the banks, who also support the fiat money supply.

How do you continue to ignore that the same people pushing for a free market system are also the ones who control the money supply?

reply to post by daskakik

Which one actually exists? Free markets are not real. Like most things, it looks good on paper, but humans have a way of messing things up.]/quote]

EXACTLY!

reply to post by xuenchen

Prior to the Federal Reserve in 1913, we may have been under a free market system.

Corporations at that time were limited in power (at least in the U.S.) compared to as we know it today.

Sorry, but that is a gross distortion of history. Do some research, and see how messed up the banking systems were at the time.

reply to post by mastahunta


Yeah, if no one regulates banks, they will steal all the money, and we have seen this over and over again. This is what the fat cats mean by free market, free for them to steal everything we own.

Originally posted by mastahunta

Originally posted by AnarchoCapitalist

Originally posted by mastahunta

Originally posted by AnarchoCapitalist

Originally posted by mastahunta

Originally posted by AnarchoCapitalist

Originally posted by earthdude
Without regulations the money guys would grab even more money. Masters of monopolization they are.

How?

They would all be bankrupt today.

again

The banks would be bankrupt, the people who own the bank would be rich

Liability limits are imposed by the State.

In a free market, business owners would be held accountable for the actions of their business.

The corporation is a State creation.

Liability Limits are also imposed by contract and legal ease. So how would I get my money back
if I am bankrupt? My phone is shut off, my car is repossessed and so is my home. How do I
get my money back from a billionaire now that I am destitute?

In plain English please

edit on 23-2-2012 by mastahunta because: (no reason given)

Money back from what?

In a free market, your money would not be stolen in the first place.

How do you know that?

I am telling you, right now...

The three men who own the bank put all the depositors money into a fund and essentially
transferred the capital into their accounts via stock manipulation and betting against the banks
position.

I am now broke, no phone, my car was repossessed and my home was too.

How to I get my money back from three billionaires when I am destitute?

Easy, in a free market, you'd have several options to meet your needs:
1. If you don't trust anyone, don't give your money to anyone.
2. Choose to do business with a bank that will simply safeguard your money for a fee, not invest it.
3. Get private deposit insurance.

Options 2 and 3 would be backed by your agreement (contract) with the bank and/or insurer, thus they would be legally accountable to provide payment on demand.

Originally posted by poet1b
In a free market system where the banks have total control of our money supply, what is to stop them from increasing the money supply to keep themselves afloat. This is exactly what happened. The Fed GOV bailout was tiny compared to what the Fed RES put out there.

The fallacy in your argument is that there'd be competing currencies in a free market. No one central bank to control and manipulate the money supply. You are correct that the Fed just prints money to prop up our current system, but this is not a free market system, which is why inflating the money supply works. For a short while.

In a free market system, competing currencies keeps that kind of behavior in check.

Originally posted by poet1b
reply to post by neo96

 

Nice point, but you need to reconcile with the fact that the people who support free market economics are the banks, who also support the fiat money supply.

How do you continue to ignore that the same people pushing for a free market system are also the ones who control the money supply?

This makes absolutely no sense. What makes you think the banks want a free market system? They benefit greatly from the fact that the Fed has a complete control on the money supply. You only need to look to the last few years to see that.

reply to post by evilod
Not only that, but barter would be a much larger segment of our economy and precious metals/stones would likely be used more freely in commerce.

reply to post by evilod


Free markets don't keep anything in check. You seem to believe that there is this magical system out there that make everything wonderful. It doesn't exist.

Look at all the problems created by multiple currencies created by different banks back at the end of the 19th century.

The banks want this system you call a "free market" because it allows them to get by with wide spread fraud.

It was worse when banks were printing their own currency. It simply multiplied their ability to pull scams.

If you think free markets are so fabulous, name one successful free market system.

Originally posted by poet1b

 

Free markets don't keep anything in check. You seem to believe that there is this magical system out there that make everything wonderful. It doesn't exist.

There is a magical system out there to keep everything in check: supply and demand. This creates the 'invisible hand' that Adam Smith referred to and this same mechanism is also one of the driving forces behind classical evolutionary theory.

The banks want this system you call a "free market" because it allows them to get by with wide spread fraud.

It was worse when banks were printing their own currency. It simply multiplied their ability to pull scams.

They can't get away with fraud in the absence of government because the power is decentralized. With government in existence, they can put a foot in the door and bribe government officials, who already have an established right on the lawful use of institutionalized violence.

In a free-market, if a bank commits fraud, it will lose its customers to the honest competition and collapse under its own policies. The government isn't there to bail it out. Bad services don't last. Either adapt to the market or fall.

If you think free markets are so fabulous, name one successful free market system.

Name one successful non-free-market system. I guarantee you that every example you provide operates on the principles of free-markets, however, i'll provide a natural example of a free-market that I mentioned about evolutionary theory. Are you a fan of Richard Dawkins? Do you have his Greatest Show on Earth book? In Chapter 12, Arms races and 'evolutionary theodicy', he details a natural economy that operates on the fundamental laws of thermodynamics. Free-markets are nature's system of choice and the organisms that can adapt will be the most successful; in our free-market, the more intelligent you are, the more successful you'll be. That provides an incentive to educate yourself to the best of your ability.

reply to post by imherejusttoread


The law of supply and demand does not keep anything in check, it only establishes price, and without law and order, it simply does not function. In a lawless society, those with power take what they want. You have bought into a whole lot of mythology. Adam Smith never made any such claims.

They can't get away with fraud in the absence of government because the power is decentralized.

Without government, people in positions of power do what ever they want. The reason people come together to form a government is to prevent the lawlessness that takes over without government.

In a free-market, if a bank commits fraud, it will lose its customers to the honest competition and collapse under its own policies.

And the people who committed the fraud still walk away with their ill-begotten gains, moving on to another town to shear more sheoples. They don't care if the bank fails.

It is sad how many people have bought into these looney toons beliefs in free markets.

Name one successful non-free-market system.

The U.S., Germany, Japan, S Korea, and every other successful first world nation, all well regulated economies, and have been for centuries. The historical record clearly shows that when the laws that regulate business are ignored, supposed free market policies are put in place, fraud runs rampant, and the economies of those nations are wrecked.

I don't know about Richard Dawkins, but I do know that there is no such thing as a natural economy. All economic activity is a result of the creation of people, and therefore not natural.

In order for a market system to function properly, it requires an evenly enforced fair set of rules, like any other competition. You are arguing to remove the rules that allow the system to function. It is like trying to play professional football without any rules or referees.

Originally posted by poet1b
The law of supply and demand does not keep anything in check, it only establishes price

Prices are simply market information that communicates the strength or weakness of supply/demand.

In a lawless society, those with power take what they want.

Without government, people in positions of power do what ever they want.

And the people who committed the fraud still walk away with their ill-begotten gains, moving on to another town to shear more sheoples. They don't care if the bank fails.

There's no 'in power' in a free-market, unless someone has established a monopoly, which is only possible through the existence of a state. Violence and fraud will be rejected and anyone who tries to establish a monopoly on it will die off because the customers/demand will leave for safer conditions.

You have bought into a whole lot of mythology. Adam Smith never made any such claims.

Then you're not very educated on Adam Smith:

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

Originally posted by poet1b
The reason people come together to form a government is to prevent the lawlessness that takes over without government.

That's absolute nonsense. Fighting violence with violence is only the product of a disturbed mind. The history of government is the history of violence.

And the people who committed the fraud still walk away with their ill-begotten gains, moving on to another town to shear more sheoples. They don't care if the bank fails.

Wrong.

The U.S., Germany, Japan, S Korea, and every other successful first world nation

Those are very unspecific. But the US and Japan are very bad macro-examples: their debt is ridiculously large and that's because of regulation policies.

I don't know about Richard Dawkins, but I do know that there is no such thing as a natural economy. All economic activity is a result of the creation of people, and therefore not natural.

Ignorance of physics is not a refutation, nor are people somehow not part of nature. That's like saying people aren't a branch of the Hominidae family. That's not a definition of natural, that's a definition that assumes people are supernatural/unnatural.

It is like trying to play professional football without any rules or referees.

This is also a bad example. Each player learns the rules by themselves and their education and practice of those rules determines their success.

This video is talking to you.

Originally posted by imherejusttoread
There is a magical system out there to keep everything in check: supply and demand. This creates the 'invisible hand' that Adam Smith referred to and this same mechanism is also one of the driving forces behind classical evolutionary theory.

Sounds good but those with the power can manipulate the supply by creating scarcity and even the demand through marketing so there really is nothing to keep them in check.

There's no 'in power' in a free-market, unless someone has established a monopoly, which is only possible through the existence of a state. Violence and fraud will be rejected and anyone who tries to establish a monopoly on it will die off because the customers/demand will leave for safer conditions.

Free markets don't exist because someone always ends up "in power". Free markets exist until someone makes enough to be "in power". That is why they always fail.

Originally posted by imherejusttoread

Originally posted by poet1b

 

Free markets don't keep anything in check. You seem to believe that there is this magical system out there that make everything wonderful. It doesn't exist.

There is a magical system out there to keep everything in check: supply and demand. This creates the 'invisible hand' that Adam Smith referred to and this same mechanism is also one of the driving forces behind classical evolutionary theory.

Why yes, Adam Smith did suggest this about Supply and Demand, but he also said that
free market capitalism CANNOT exist without ethics and ethical surroundings. That is the
component that nowhere to be found, so if instate the practice with out its foundation you
are going to create a monster where corruption is the most beneficial practice.

The sad part is it seems that the meta business world is moving farther and farther away
from ethical duty.

reply to post by imherejusttoread

Prices are simply market information that communicates the strength or weakness of supply/demand.

That is what I said, and supply and demand simply does not keep anything in check, as you tried to claim earlier.

They can't get away with fraud in the absence of government because the power is decentralized.

Without effective government, they can get by with anything they want. You have your facts completely backwards. Laws can only be established through some form of government. This is one of the purposes of government.

Here is a basic reality. You open a store in a town with another store. The other store owner tells you to close your store, or face the consequences. You refuse, he burns down your store, puts a gun to your head and tells you to leave town. With no government, no law, nobody is going to stop him unless they think they can beat him in a fight.

You don't seem to understand the purpose of government because you have never lived without law and order.

That there is no power in a free market means that free markets are not able to maintain law and order. That is the role that government serves.

Your quote of Adam Smith does not back up your claims that markets can function without government, or government regulation.

Those are very unspecific. But the US and Japan are very bad macro-examples: their debt is ridiculously large and that's because of regulation policies.

Japan's debt is completely out of control, but the debt of the U.S. in relation to GDP isn't that bad. You need to do more research. These two economies still remain among the best in the world.

Each player learns the rules by themselves and their education and practice of those rules determines their success.

Then why do they have refs when they play professional sports? Why are fouls still being called. If no one is there to enforce the rules, people will quickly stop following those rules. That is human nature. And that is why the free market ideology, just like communism, will never work.

reply to post by poet1b


"The law" just took several trillion of your tax dollars and handed it to banks and corporations in the form of bailouts.

Great system you are supporting there.

reply to post by AnarchoCapitalist


I didn't support the people pushing free market economics that created these bailouts, chance are that you did, and now you want to pretend that it wasn't free market policies that created the problem in the first place.

At what point do you admit you were conned by this free market scam.

Originally posted by daskakik
Sounds good but those with the power can manipulate the supply by creating scarcity.

...What? Scarcity is the product of nature, not anyone manipulating the laws of physics for their selfish desires.

Free markets don't exist because someone always ends up "in power". Free markets exist until someone makes enough to be "in power". That is why they always fail.

Free-markets don't exist because it reduces power, not because someone always ends up in power. If the free-market always leads to putting someone in power then it wasn't a free-market and the free-market is the solution to removing power, whether that be through counter-economics or migration.

Originally posted by mastahunta
Why yes, Adam Smith did suggest this about Supply and Demand, but he also said that
free market capitalism CANNOT exist without ethics and ethical surroundings.

I agree, which is why he first issued his Theory on Moral Sentiments followed by the Wealth of Nations. However, when ethics goes out the window, so do free-market economics because free-market economics is naturally an ethical system that accords each person their due.

This is how Rothbard describes the moral principles of a free-market:

A theory of justice must be arrived at which goes beyond government allocations of property titles and which can therefore serve as a basis for criticizing such allocations. Obviously, in this space I can only outline what I consider to be the correct theory of justice in property rights. This theory has two fundamental premises: (a) the absolute property right of each individual in his own person, his own body: this may be called the right of self-ownership; and (b) the absolute right in material property of the person who first finds an unused material resource and then in some way occupies or transforms that resource by the use of his personal energy. This
might be called the homestead principle—the case in which someone, in the phrase of John Locke, has “mixed his labor” with an unused resource.

To sum up: all existing property titles may be considered just under the homestead principle, provided (a) that there may never be any property in people; (b) that the existing property owner did not himself steal the property; and particularly (c) that any identifiable just owner (the original victim of theft or his heir) must be accorded his property.

Lysander Spooner:

It is the science of peace; and the only science of peace; since it is the science which alone can tell us on what conditions mankind can live in peace, or ought to live in peace, with each other.

These conditions are simply these: viz., first, that each man shall do, towards every other, all that justice requires him to do; as, for example, that he shall pay his debts, that he shall return borrowed or stolen property to its owner, and that he shall make reparation for any injury he may have done to the person or property of another.

The second condition is, that each man shall abstain from doing to another, anything which justice forbids him to do; as, for example, that he shall abstain from committing theft, robbery, arson, murder, or any other crime against the person or property of another.

So long as these conditions are fulfilled, men are at peace, and ought to remain at peace, with each other. But when either of these conditions is violated, men are at war. And they must necessarily remain at war until justice is re-established.

Through all time, so far as history informs us, wherever mankind have attempted to live in peace with each other, both the natural instincts, and the collective wisdom of the human race, have acknowledged and prescribed, as an indispensable condition, obedience to this one only universal obligation: viz., that each should live honestly towards every other.

The ancient maxim makes the sum of a man's legal duty to his fellow men to be simply this: "to live honestly, to hurt no one, to give to every one his due."

This entire maxim is really expressed in the single words, to live honestly; since to live honestly is to hurt no one, and give to every one his due.

John Locke:

Though the earth, and all inferior creatures, be common to all men, yet every man has a property in his own person: this no body has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state nature hath placed it in, it hath by this labour something annexed to it, that excludes the common right of other men: for this labour being the unquestionable property of the labourer, no man but he can have a right to what that is once joined to, at least where there is enough, and as good, left in common for others.

He that is nourished by the acorns he picked up under an oak, or the apples he gathered from the trees in the wood, has certainly appropriated them to himself. No body can deny but the nourishment is his. I ask then, when did they begin to be his? when he digested? or when he eat? or when he boiled? or when he brought them home? or when he picked them up? and it is plain, if the first gathering made them not his, nothing else could. That labour put a distinction between them and common: that added something to them more than nature, the common mother of all, had done; and so they became his private right. And will any one say, he had no right to those acorns or apples, he thus appropriated, because he had not the consent of all mankind to make them his? Was it a robbery thus to assume to himself what belonged to all in common? If such a consent as that was necessary, man had starved, notwithstanding the plenty God had given him. We see in commons, which remain so by compact, that it is the taking any part of what is common, and removing it out of the state nature leaves it in, which begins the property; without which the common is of no use. And the taking of this or that part, does not depend on the express consent of all the commoners. Thus the grass my horse has bit; the turfs my servant has cut; and the ore I have digged in any place, where I have a right to them in common with others, become my property, without the assignation or consent of any body. The labour that was mine, removing them out of that common state they were in, hath fixed my property in them.

Originally posted by poet1b
That is what I said, and supply and demand simply does not keep anything in check, as you tried to claim earlier.

Well, prices are an indicator of supply and demand i.e. supply and demand creates prices. If there is a demand, it will be supplied and if the demand is high enough, the competition to supply it will increase the quality. For instance, people do not like to be defrauded or harm, therefore there will be a demand for services that provide these things like private minters who check the quality of the currency being used in the market, like gold or silver. Or private security forces to guard/protect property, or judicial/arbitration services to settle disputes. All private. All the produce of demand. This keeps everything in check and forces adaptation.

Without effective government, they can get by with anything they want. You have your facts completely backwards.

They can try, that doesn't mean they will.

Laws can only be established through some form of government.

That's contrary to reason since laws are the product of nature applied to human relationships.

You open a store in a town with another store. The other store owner tells you to close your store, or face the consequences. You refuse, he burns down your store, puts a gun to your head and tells you to leave town. With no government, no law, nobody is going to stop him unless they think they can beat him in a fight.

That sounds like a ghetto, in which case not many people will want to stay where violence is the rule of law. The store will either be protested/boycotted or it will improve its own supply through the competition of the other store. Or, even hire personal security forces to guard their stores.

There are plenty of solutions that don't require a centralized form of public government.

You don't seem to understand the purpose of government because you have never lived without law and order.

I rarely live with law and order right now. The only time I deal with the law is when they are wanting taxes from me, other than that, my relationships with other people are entirely free-market.

I recommend Robert Ellickson's book here to demonstrate this. If you aren't able to attain it, i'm more than happy to send you a copy in pdf form or whatnot.

Here is a historical analysis of competing courts that produced what we now call common law, which is the basis for most of modern law.

Your quote of Adam Smith does not back up your claims that markets can function without government, or government regulation.

That wasn't the claim, you claimed Adam Smith never discussed an invisible hand. He did. The invisible hand is merely natural selection i.e. the adaptation of organisms to their ecology and vice versa. We've formalized this concept into the discipline of economics.

A market is simply the collective relationships of its individual participants, so, unless you wish to claim that people can't associate without government, then I reference our exchange here as proof of that error.

Japan's debt is completely out of control, but the debt of the U.S. in relation to GDP isn't that bad. You need to do more research. These two economies still remain among the best in the world.

WHAT? This is either a joke or it's serious ignorance. The United States GDP is $14.59 Trillion and the debt is $15.43 trillion. That's not a good economy, that's a bankrupt economy.

If we eliminated that debt and judged the United States according to its GDP, I would wholeheartedly agree.

Then why do they have refs when they play professional sports? Why are fouls still being called. If no one is there to enforce the rules, people will quickly stop following those rules. That is human nature. And that is why the free market ideology, just like communism, will never work.

Most major sports have major leagues, and most major leagues are private businesses. The presence of referees are the will of the NFL commissioner. He's conducting his business as he sees fit, and to progress in that business as a player, you need to be educated and trained within its codified rules. Any individual participant is more than welcome to open up their own professional sports league and have a league without referees, but the presence of referees are more akin to security guards than to government officials.