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Tuesday, June 13, 2006

Throw Trev Your Curly Ones

If there's one thing I enjoy more than spotlighting socialists, its exploring the practicalities of the free market/free society ideal.

I love market economics. It works as predictably as physics. If you understand the principles of free market economics, you can predict the likely outcome of virtually any government policy or scheme.

I find that virtually all socialists and indeed many capitalists, do not fully understand how market economies or free societies actually work in practice.

Here's my challenge.

Throw me all your curly questions.

If you're a socialist, throw me a question on capitalism that you just know I won't be able to answer. Expose me for the heartless capitalist bastard that I am.

If you're pro market, throw me a question that somebody has stumped you on, or you just can't seem to figure out. Find out if the free market is really worth fighting for.

If you're undecided or just curious, throw me a question about capitalism/free markets or the functioning of a free society that puzzles you. Find out if the Capitalists really do have the answers.

The Rules

A Simply post your question in the comments box. Keep it simple. Examples might be.

What is the role for unions in a free society?

How can free markets improve animal welfare?

Capitalism inevitably leads to monopoly. Why do you then support capitalism while promoting freedom and de-centralisation?

Are competition regulating bodies such as the Commerce Commission necessary?

How would private universities work?

You don't believe that state welfare is a good idea. Why do you want poor people to stay in poverty?

B I will answer the first ten fair and civil questions in seperate posts on this Blog. I will answer them to the best of my ability. If I don't know the answer, I will say so. Others may wish to comment with their solutions.

C When I have answered the first ten, I will open up another thread for ten more.

Waiting for your curly ones.

57 Comments:

Blogger Sonic said...

Why you cannot rely on the market to deliver health care, emergency services, defence, social security....

I could go on but you get the drift.

2:04 PM  
Anonymous Anonymous said...

What is ZAP?

2:54 PM  
Blogger Berend de Boer said...

Capitalistic: Auckland has many volcano's which give the city a lot of charm. And there are no buildings on it so you can actually see them.

What alternatives are there to government controls?

We have of course the common law, but would that be sufficient?

Of course the government can't guarantee anything either, but, hopefully, they would have to stand up and argue that they want allow people to sell buildings on top of the vulcano's. That is probably electoral suicide.

Related to that are high rise buildings. I like to be able to see far and wide, and Auckland offers a lot of that. On the other hand, I wouldn't mind a few more high rise buildings in Manukau City center, there are already some and it doesn't seem to spoil the view.

I wonder how and if these things would survive if there were no government controls on these things whatsoever.

3:07 PM  
Blogger Berend de Boer said...

Sonic, do you ever read the newspaper? Ever read the headlines about people dying on the waiting lists? Our government even sends our citizens to private hospitals in Australia! And what kind of health care does Cuba deliver to its citizens? I mean, tell us a success story of government health care.

And to help Trevor: national defence is recognised even by libertarianz as a core government issue. Policing not necessarily, so perhaps you want to clarify if your question is about policing or national security.

3:11 PM  
Blogger Blair said...

Oooh I got one...

Trevor, do you think that there is a place for publicly owned land ie. parks and roads, or do you think it is possible for society to work well with only private ownership of these things?

I have an open mind on these things and would be interested in your perspective.

3:14 PM  
Anonymous Steve said...

Where does Profit come from?

3:18 PM  
Anonymous squirrel said...

Ok here's a question which iv had for ages and if I think the answer was workable would really change the way i view act.

How would a free market model deal with human caused environmental problems, specifically those which the individual is unlikely to care about
eg a farmer who is degrading his land over the long term. Or an individual who's lifestyle is contributing to long tetm environmental change

3:32 PM  
Blogger Sonic said...

So Berend you are in favour in no public health care at all?

3:39 PM  
Anonymous Anonymous said...

I consider myself pro-market, but often wonder about harm from large private companies. The giants (McDonalds, etc) sell shitty food so I don't eat it. But millions do, they get fat/unhealthy and die. I don't like "solutions" like Green's proposal to regulate food advertising, but at the same time I don't like that companies can do so well selling harmful products. The mental reconciliation I've come to is that people who are too lazy or stupid to eat properly bring it upon themselves, with (maybe) some blame accorded to a lack of rules/enforcement about what is actually in food. I'm not sure I'm satisfied with my answer, so what do you think?

Also, how does the situation of a child who has one of the aforementioned lazy/stupid people as a parent fit into this? Should a parent have the freedom to raise the fat little porkers I see in the supermarket? (They seem to at the moment!)

4:27 PM  
Blogger Berend de Boer said...

Sonic, you have to distinguish between government provided health care and charity provided health care.

Before the school system was taken over by the government, with disastrous results I might add, 85% of the population went to school. Not that all had to pay for it, there were many charitable citizens who funded these things.

Same with health care.

You don't trust your fellow citizens to be charitable or you envy the results they get with their hard work. So you favour agovernment that takes that away from them. Supposedly to spend on health care and other social spending. But with as many managers as hospital beds I think private enterprise and charity would do a lot better.

I trust my fellow Kiwi's Sonic. Do you?

I really believe that we would have better health results by a combination of insurance and charity. If people are responsible for their own health and the costs associated with it, do you think they would eat at McDonalds every day? See the previous post.

But if you are not responsible you might get the results that Anonymous describes.

PS: you can eat at McDonalds everyday and be healthy, just don't eat the fries :-)

5:03 PM  
Blogger Berend de Boer said...

Sonic, let me add one more thing: I don't believe in the big bang. So perhaps to gradually introduce people to take responsibilities, what about the US system where emergency health care is free, and elective surgery has to be paid for?

And paid for is either yourself, insurance or charity.

5:05 PM  
Anonymous Anonymous said...

" Sonic, do you ever read the newspaper? Ever read the headlines about people dying on the waiting lists? "

People dying while on the waiting list is due to a lack of government health spending, not because of it. Yes, the waiting lists would disappear if hospitals were privatised but far more people would die from not having access to the healthcare.

Just look at the US. The government will only foot the bill if:
- the person is eligible for Medicare
- or Medicaid
- or needs emergency treatment when they don't have health insurance.

Many health problems are cheaper to treat in their early stages before they become life threatening.

6:11 PM  
Anonymous Anonymous said...

"Before the school system was taken over by the government, with disastrous results I might add, 85% of the population went to school. Not that all had to pay for it, there were many charitable citizens who funded these things."

What are these disastrous results? 100% literacy rates? An educated population that starts to demand more freedom from authority? A stronger economy due to a more highly skilled population?

6:16 PM  
Anonymous Anonymous said...

Trevor,

you would accept that competition between firms and corporations is a fact of free market national capitalisms. Many of these have states to protect their interests. But what happens when different nation states compete over resources. Is war not just an extension of this economic competition?

By the way, although ideologically poles apart from you, find your blog enjoyable, especially the exposes!!!
Will put in a good word for you come the revolution.

6:36 PM  
Blogger Berend de Boer said...

Mr Anonymous, may I refer you to a July 2005 report by our own government? 45% of adult New Zealand do not have the ability to function in todays economic market. They are functionally illiterate. They cannot interpret a simple bus time table for example.

That's the result of 100 years or public schools: 45% cannot actually read.

Read and weep:

http://educationcounts.edcentre.govt.nz/publications/tertiary/analysis-nz-data-ials.html

7:19 PM  
Anonymous byron said...

I could probably think of a few if I thought long enough; I'll start with just one:

Network neutrality; this is something causing a stir about the online community, for-profit content providers (movie studios, record companies, software companies etc) want to pay Internet Service Providers to prioritise their content on the net (meaning it will be delivered to users faster than other content) this disadvantages non-profit content providers such as free/open-source software sites, the Internet Archive, and Wikipedia
Not to mention things like small independant blogs (New Zeal for example)

Is this fair? if so, why? and if not, how do we stop it happening?

Also something related, the Internet is regulated mostly by non-profit organisations (with no connection to private business or the state) is this the right way to run it, or would it run better if those organisations were run for profit?

7:20 PM  
Blogger Sonic said...

So Berend wants us to rely on "charity" for health care and then uses the USA as a model!

Truly one could not make it up.

Perhaps we should also disband the fire service and rely on our fellow Kiwis to show up if our house caught fire?

Also may I ask, where is our host? opened a can of worms methinks.

xxx

S

8:23 PM  
Blogger liberty through profit said...

why is the salary cap in the new Air NZ NPC Rugby comp a bad idea?

8:23 PM  
Anonymous Anonymous said...

Hey Berend, you can change that to a proper link by placing it between the html anchor element like so (but without the $ signs):

<$a$>site address<$/a$>

http://educationcounts.edcentre.govt.nz/publications/tertiary/analysis-nz-data-ials.html

8:24 PM  
Anonymous Anonymous said...

Berend,

I agree that 100% literacy rate was an exaggeration. It would be somewhere between 99.9% and 100%. I blame sensible rounding.

I read what was on the link and I think you misinterpreted it. For example:

You said:

"That's the result of 100 years or public schools: 45% cannot actually read."

The site says:

The survey aimed to determine participating countries’ literacy levels by assessing respondents on three types of literacy: prose, document and quantitative. Proficiency was then graded along five levels. Levels 1 and 2 indicated a low literacy level and Levels 3 and above indicated ‘functional literacy’ – that is, the literacy skills necessary to function within today’s economic market. Levels 4 and 5 were considered the highest levels of literacy. For the purposes of the report, they were combined into a ‘Level 3 or more’ category.

The survey found that 45% of adult New Zealanders were in Levels 1 and 2 for prose literacy, 50% for document literacy and 49% for quantitative literacy.


How I see it, is that 45% of those surveyed (not the entire population) were categorised as being in Levels 1 and 2. The vast majority of that 45% probably can read but not to the level deemed adequate by some government workers.

Improving literacy skills might make them more productive but I don't think the government is to blame. If they already know how to read, then it is up to the individual to practice reading and up skill by their own means in their own spare time. I don't consider state funded schools and reading in your own spare time as being mutually exclusive.

More likely reasons for the low literacy levels of those people could be a disability or lack of ability, a lack of practice, an anti-education culture of their family or friends, sport thug alcoholic fuckwit culture.

8:53 PM  
Anonymous Anonymous said...

I love market economics. It works as predictably as physics.

I have studied both economics and physics (economics to a much greater extent) and I disagree with the above statement.

I don't think Trev can tell the difference between economics and right wing rhetoric.

Theoretical microeconomics tends to be objective in that firms try to maximise profit and consumers try to maximise utility (constrained optimisation). Macroeconomics tends to be more like a social science with multiple conflicting but valid arguments.

When some economic event occurs, it can sometimes be easy to predict which direction variables will change but it is usually difficult to quantify the change. Sometimes peoples' expectations are too hard to second guess, making the direction in which things change unpredictable.

Econometrics (statistical modelling for economics) may estimate functions for economic variables but even if the structure of a model results in a good fit, the estimated parameters become less accurate over time and the model will need to be refit using more recent data. Some models are good at making predictions but can't make them far into the future. Physics on the other hand, might use similar techniques initially for fitting formulas to data but the estimated parameters tend to remain the same. Once the formulae have been derived, the practice becomes more like maths than statistics (with some exceptions especially in nuclear/quantum physics).

9:21 PM  
Anonymous Anonymous said...

Some questions for Trev:

1. Is it true that the freer a market is, the faster it will grow?

2. Is maximising growth, utilitarian?

9:24 PM  
Blogger Berend de Boer said...

Sonic, you claim the US not an example of charity. You don't provide any statistics.

Perhaps you can research the statistic where charity is compared to GDP and the amount given to charity. What country is unsurpassed in this regard?

Mr. Anonymous, I do not think you will find much support in your explaining away numbers you don't like. Not understanding a report like this places you squarely in the 50% that have no ability to understand documents or numbers. But then, I suppose, you attended state education.

7:48 AM  
Blogger Sonic said...

Berend, health care should be a right for all not charity.

I note you also dodged my point about the fire brigade.

9:03 AM  
Anonymous James said...

" Berend, health care should be a right for all not charity."

Provided by who Sonic? Healthcare is a man made service that does not grow in nature...other human beings have to provide it to you.If they have no choice in the matter and are forced they are slaves...that is what you belive in...right?

Charity is man helping man by voluntary choice...not under coercion, therefore its the moral and just option.That also makes it the practical option too as whats moral is also the practical,reality makes it that way by virtue of our natures.

12:08 PM  
Anonymous James said...

"Perhaps we should also disband the fire service and rely on our fellow Kiwis to show up if our house caught fire?"

Considering that the first fire services (like the first police services, the Bow Street Runners et el)were started and run by the private sector to fill a need ( yes kids...people didn't wait for Government to do things that needed doing )your argument falls at the first hurdel Sonic.

If it was announced at 8:00 am tomorrow that all State services would be closing down by 8:01 there would already be action started to replace them with private alternatives.People will fill a vaccum if theres a need and have always done so.

12:16 PM  
Blogger Sonic said...

Great stuff here lads, ACT supporters want to disband the fire brigade and make health care dependent on charity!

I hope next time your house is burning down you all stick to your principles and demand that the evil state owned rescue services bugger off and leave you to it.

xxx

S

12:25 PM  
Anonymous James said...

...and how do you explain the existence of voluntary firemen Sonic...? People who chose to help fight fires???!!! How does this square with socialist dogma that we are all selfish and must be directed by the "annointed" to do whats right for "Society"...?

Good article here...

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

12:25 PM  
Anonymous James said...

Game to James et el...Sonic concedes debate by being unable to refute my points. ;-)

12:27 PM  
Blogger Rick said...

Haha.
You asked for it, Trev.

ps Build a snowman and blog that!

1:16 PM  
Blogger CD said...

Yeah, sonic, because without government we would all be lost.

I mean, jees, I'm perplexed as to how we managed to even get along before government!

My, we would have had to have voluntarily helped people, and that would have never worked.

"Ask them to bugger off and leave me to it"? No, I'm more likely to be the person responding to others' calls for help.

I volunteer about 30 hours a month for two different charitable agencies, so I might just end up being the one that saves your life or pulls you out of the rubble.

But I spose there's not much point in doing what I do, myaswell just raise taxes and let the government provide, right?

1:39 PM  
Anonymous Cameron said...

Trev I would like to ask you about where you and/or ACT sits in the debate about patenting life forms.

Over the last few years there have been attempts by multinational corporations to try and secure patents on actual life forms (ie things made by Mother nature or hundreds of years of developing farming. For example the American chemical company WR Grace patented the Neem tree, which has been used by Indians for centuries for its medicinal properties.

Another company Ricetec patented Basmati Rice, which has been cultivated by people in South Asia for centuries. Thankfully both these idiotic patents have been overturned.

Should corporations be able to patent what they haven't actually invented, Either processes that are natural or have been practiced by people for centuries?

At the moment it seems corporations, backed by WTO rules like TRIPS (Trade related international property rights) seem to be able to go around the world see a nice plant like the Neem tree and say "wow that's a nice plant, I know we haven't invented it but no one else has patented it so why don't we?"

Is this right?

btw I've answered your questions in the 'Some questions for the comrades' further down the page.

2:36 PM  
Anonymous squirrel said...

I'm very much left leaning yet i dislike the school system, i also have no philosophical problems with the private sector taking over many services that the government now provides, as long as its fair. I also realise that people willingly help each other and that a government is not always needed to get things done.

I just want to hear how a libertarian society would work in practice for example how would act work to protect the environment if it got in. And how would act provide health care to those who earn to little to be able to afford private health care (even if tax was abolished)

2:37 PM  
Blogger Berend de Boer said...

Sonic, I didn't dodge any question, I just provided some to help Trevor. On fire brigades: many fire brigades are voluntary. History provides abundant examples of voluntary fire bridages. I don't see the issue here. People are happy to pay for insurance, perhaps the insurance companies could "sponsor" the fire brigades?

And for example my bank doesn't give me a mortgage unless I have house insurance, so these things are not unsolvable.


And on health care: what right do you have to eat yourself full of fatty food and expect me to pay for your resulting health problems?

2:45 PM  
Anonymous Broadstairs said...

What about a couple of your own suggested questions?

What is the place for Unions in a free (and capitalist )society?

Is there a need for bodies such as the Commerce Commission?

3:33 PM  
Blogger Sonic said...

So Berend people only stop your house burning down if you have paid cash?

Great stuff and well worth putting in the next ACT manifesto.

On the volunteer fireman stuff, thats of course true James, however you dont think the equipment just appeared do you.

Perhaps you could also add that to the manifesto?

ACT wants fire service funded by sausage sizzles.

5:15 PM  
Anonymous James said...

"On the volunteer fireman stuff, thats of course true James, however you dont think the equipment just appeared do you."

No the market created it...next silly question.

5:23 PM  
Anonymous Anonymous said...

Sonic - shouldn't you get back home and post something on your own blog?

You haven't done anything there since Dec 2005. Air the place out, open the windows, do a spot of dusting.

It's not a good look. No wonder nobody comes to visit.

6:07 PM  
Blogger Trevor Loudon said...

Thanks People. There's heaps of good questions there. I'll start posting on them in the next day or two. I'll keep them roughly in order, but may bunch one or two together. Sonic's first question will be annswered out of sequence (not because its Sonic) but because it is so broad and will overlap with some others. Thanks to James, Berend etc, for starting on some of the answers. I hope we can all learn something.

6:20 PM  
Anonymous Anonymous said...

Act has a 25% (near) flat tax policy. If Act came to power:
-in which areas would they cut spending?
-would they have budget deficits?

7:44 PM  
Anonymous Anonymous said...

berend,

"Mr. Anonymous, I do not think you will find much support in your explaining away numbers you don't like."

I pointed out how you misinterpreted them. I don't think you will have many people agreeing with you that 45% of NZ's adult population can't read.



"Not understanding a report like this places you squarely in the 50% that have no ability to understand documents or numbers. But then, I suppose, you attended state education."

Where in that report does it say that 45% of NZ's adult population can't read?

8:03 PM  
Anonymous Anonymous said...

Given that a private sector fire service has been tried in the past:
- is there evidence to suggest that it was more effective than a state funded system?
- why did its funding change from private to public?
- are there any countries still using a privately funded fire fighting system? If so, are they using a similar level of technology to do the job?

8:29 PM  
Anonymous Peter said...

Would you aprove of fully privatising roading(as would seem the liberal thiing to do)? and If so how would you prevent a person buying al the land around someone elses property and stopping them from leaving. Bernard Danton suggested that a court would decide that the owner would have to let the person though, but that would be a serious breech of property rights.

So what is your solution?: have public owned roads like now or let courts tell people who they can or can not have on their property, or have "regulation"(a nasty word for right wing liberals I know"

9:29 PM  
Blogger CD said...

Anonymous re fire department.

I remember reading a great case study on Rural/Metro, a private fire & EMS provider that replaced the government operated service.

I can't find the case study, but it indicated that a large majority of the area preferred the new private provider.

Here's the company's website, good luck for finding the case:
http://www.ruralmetro.com/about/ourhistory.htm

9:53 PM  
Blogger CD said...

They are a fully independant company but to deliver local government contracts. However:

"Rural/Metro contracts directly with individual home and business owners who pay annual subscription fees for fire protection."

They also make the point of increased innovation and efficiency over government-run services. There's nothing to say this "subscription service" couldn't be implemented on a wider scale, with no compulsion.

9:56 PM  
Blogger Berend de Boer said...

Peter, you really think the biggest worry of privatised roading is that someone will buy all the surrounding property of yours and prevent you from leaving??

What kind of world are you living in?

Who would spend millions on doing that?

What was the world like before government started to build roads, all busy with people preventing others from leaving? Peter, it might be a surprise, but I think most people have better things to do with their lives.

8:55 AM  
Blogger Sonic said...

"There's nothing to say this "subscription service" couldn't be implemented on a wider scale, with no compulsion."

So does your house get a fire out out if you have not paid? and if so why bother paying?

9:07 AM  
Blogger CD said...

I suppose that would depend on a number of things:

Does your insurance company require you to have a fire subscription to be covered? (I'm almost certain they would)

Perhaps new subdivisions would have covenants requiring owners to have a subscription.

Should you not have insurance, perhaps you are willing to risk paying a larger fee should a fire occur.

(Just so you know, this already occurs in NZ; Rural Fire have a charges schedule for many forms of fire supression here: http://nrfa.fire.org.nz/faq/index.htm)

Oh, and another example of user-pays emergency services in NZ: Ambulance services provided by St John do incur a charge (unless they are ACC).

Yet you can join the St John Supporters Scheme for $45 and your whole household is covered for a year. Hardly expensive insurance.

So you pay 12c a day and you are covered for Ambulance response. I imagine, with the low rate of house fires in NZ, a fire subscription would be similarly low.

9:46 AM  
Blogger Southern Gent said...

I like the private roading question from PC, and hope that Trev addresses it.

Berend: I am surprised that you jeered the question. (or did I miss something between the lines?)
Non Libertarians frequently moot such scenario's hoping to find a flaw in the Libertarianz principles.

Surely you would enjoy the literary affray, or do you not fancy your philosophical chances?

SOUTHERN GENT

11:31 AM  
Anonymous Anonymous said...

If all roads are owned privately, surely the person who owns the road outside the courthouse can never be sued ("Good morning, Judge Smith! Sorry. Road's closed for judges and lawyers today!").

In a libertarian utopia, will people still be forced to do jury duty?

If carbon dioxide does in fact warm the atmosphere and this is, for me, a bad thing, I should be able to sue everyone who emits it and get a court injunction to stop anyone doing this - thereby banning breathing out into the atmosphere, and the burning of anything. Good thing? How can a non-centrally-planned economy decide how much carbon dioxide is the right amount to put in the atmosphere?

If whales and other sea creatures are privatised, to what lengths do I have to go to determine that no-one owns one before I can claim it as my own? Doesn't this require government regulating branding, or setting up a central registry, as with land?

If money is issued privately, how will the government decide which currencies to accept for court fees and fines?

2:05 PM  
Anonymous Anonymous said...

If copyrights, patents and trademarks are "intellectual property", shouldn't protection last forever?

Under pure capitalism, could I sell nuclear weapons to third world dictatorships?

Could I sell them to anyone?

If we allow that governments own all the land they control (as they claim), doesn't that make almost everything they do legitimate?

Under pure capitalism, would there be legal aid?

2:12 PM  
Blogger Dave Christian said...

Is capitalism best served by a state which limits it's military activities to the defence of the nation or one which sends troops into other counties to make them 'free' (the survivors that is)? Recalling of course that states at war typically make a major lurch towards a comand and control economy at the expense of individual liberty.

10:09 AM  
Blogger Dave Christian said...

Is "My ideal society is one in which government is slashed to the bone" logically consistent with a desire for the government to engage in warfare and the enforcement of trade embargo's (at the expense of the liberty of it's citizens)?

10:28 AM  
Anonymous Caskman said...

As a free-market supporter there is one question that bugs me:
Will capital/money become ever more concentrated into the hands of a few? If so, why?

9:44 AM  
Blogger asdfhskldjhkjhsdfsdfsdf said...

I am broadly pro-free market and anti-capitalism.

Ceteris parabis I prefer less government involvement in citizen's day-to-day lives (a free market approach). However I am strongly opposed to two key features of capitalsim: limited liability companies, and subsequent mass aggregation of capital by those limited liability companies (and the flow-on effects of that aggregation).

I find it ironic that the laws that give rise to such features are themselves a result of government interference in an otherwise unlimited liability market.

Please can you outline why limited liability and the subsequent mass aggregation of capital are positive features of right-wing economics, with respect to employee's rights and the human and civil rights of society as a whole, environmental impact, and the potential for undue influece of corporations over government.

5:18 PM  
Blogger asdfhskldjhkjhsdfsdfsdf said...

It's not well written or researched, but I tried expanding on my viewpoint in a guest post at:

http://mikeheine.blogspot.com/2006/03/on-simultaneously-opposing-capitalism.html

Cheers :)

5:28 PM  
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