Daniel Palos, I'm a proponent of USA adopting an Import Certificate global trade policy. Its not pure free trade but it is pure independent competitive entrepreneurs within the markets. The policy does NOT subsidizing the least efficient labor and it does NOT sacrifice the best interests of USAs enterprises and wage earners to accommodate nations that cannot or will not better compensate their own laborers. Refer to the topic Reduce the trade deficit; increase GDP & median wage http://www.politicalforum.com/showthread.php?t=226393 or Google wikipedia, import certificates . Respectfully, Supposn - - - Updated - - - Daniel Palos, I'm a proponent of USA adopting an Import Certificate global trade policy. Its not pure free trade but it is pure independent competitive entrepreneurs within the markets. The policy does NOT subsidizing the least efficient labor and it does NOT sacrifice the best interests of USAs enterprises and wage earners to accommodate nations that cannot or will not better compensate their own laborers. Refer to the topic Reduce the trade deficit; increase GDP & median wage http://www.politicalforum.com/showthread.php?t=226393 or Google wikipedia, import certificates . Respectfully, Supposn
We merely need be more Faithful in executing our own Doctrine and State laws regarding employment at will.
Government has a very important role in a free market, and that is providing protection of property rights, national defense, law enforcement and providing courts of law for individuals to diplomatically settle disputes. I would also say that if after government provided those basic necessities for a free market, the next on the list would be infrastructure (roads, bridges, etc.), although as you go further out in the governmental system (local, state, federal), they should get less and less of tax revenue to pay for things like that. I think that state governments would do an excellent job at providing roads, and I think that if the federal government left them alone, they would be just fine as far as working with other states to build interstate highways. I am also not opposed to the government having a little extra money for their stupid pet projects that usually fail, but at least it can make the federal politicians feel like they are important. Other than that, I don't think the federal government should really have any role. As a libertarian, I am not completely opposed to government, just BIG government. I have much more power in my own state and local government than I do when looking at the federal government. I live in Washington state, with a population of about 6.9 million. If I reached out to a million Washington voters and got them interested in an issue, that is 14% of the votes that I am now influencing in my own state, but that is <0.5% of the federal votes that I am influencing. If you shrink that even further, to local government, each voter has even more power to influence. Another advantage to smaller governments (state and local) is that if I don't like the laws in my state, I can move to another state and still be protected by our constitution. If, however, the federal government makes a stupid law like the ACA, I just have to deal with it. The principles of smaller government is what our country was founded on, but we have lost our way due to arrogant, power hungry politicians who have corrupted the foundations of this country. One main role of the federal government, with things like the supreme court, should be to REPEAL unconstitutional laws that the states create (e.g. the Supreme Court needs to legalize gay marriage, I'm not really sure how Loving v. Virginia didn't extend to gay marriage, but it should have). In a system like this, which is what our founding father envisioned, each state would be able to experiment in their own way. If a law is really great in one state (say Massachusetts), we don't need the federal government stepping in and forcing the other 49 states to conform to what that state is doing, if it is that great of a law, the states will pass it on their own. Who knows, maybe one state will have a slightly better or more efficient way of doing something, and then all the other states can learn and do it themselves. If you like a law that one state passes, you can move to that state, or you can get involved in your local or state government and try to influence it in that way.
government to enforce contracts, and defense..nothing more no force used free production and trade no regulations by government no handouts
"The free market allocates resources most efficiently through the price mechanism." Sure, a "free market" may be a bit idealized and a bit unpractical, but the point is to move towards a "freer" market. Removing the bottleneck of government is the key to more fluency in the economy. The reason for this is that because the government can boost itself to a position of disregarding competition as a viable threat leads it to make more liberated and more wasteful decisions. Socialism assumes competent government. Capitalism and the "free" markets that result from it assume that people are greedy. In my opinion (and probably that of any rational person), it is a lot more difficult to honestly make the assumption of socialism than that of capitalism. A trip to any third world country makes it obvious why.
How does that work in our global-political ecnomy. Can we simply pay other States to wage war on us when it is most convenient for us? It is one reason why I believe we need wartime tax rates, even for a War on Drugs.
You assume that markets are the most efficient method for the allocation of resources but are they really? Every business failure, every abandoned investment is a waste of resources that would have been better deployed elsewhere. The equity markets accumulate available investment money but only a tiny portion of that money is deployed in capital investment. By one estimate less than 0.0001% of the money that changes hands in the equity markets on any given day actually leaves the markets to be deployed for other purposes. This means that the equity markets are almost entirely disconnected from the rest of the economy, sucking up the economy's excess wealth and hoarding it to itself, with a mostly negative benefit to the rest of the economy. Savings directed into the markets are moved away from the local economy and become unavailable for things like local bank loans, which are the primary method of local economic investment and local economic improvement. The commodity markets are overwhelmed by massive speculative money flows that skew the price mechanism, generating false price signals that trigger massive over investment and the subsequent abandonment of those investments in everything from gold to corn. It has been estimated that the mining industry alone has abandoned some $3Trillion in capital investment projects over the last few years. Projects undertaken only because speculative money flowed into the metals market and drove prices up, signalling increased demand. The speculative money flowed out, the increased demand never materialized and the projects were abandoned. A free market requires a functioning price mechanism if it is to determine the best allocation of resources. The problem these days is that the price mechanism is broken at a very large scale. Flows of money determine prices now, supply and demand has become monetized, the signals of speculators, not the signals of supply and demand between the producers and users of the actual thing being traded. How do you propose to fix that without government intervention?
You make a good point- that speculation on Wall Street HAS led to inflated prices- much more than the laws of supply and demand would dictate- Perhaps, also, these abandoned capital investments may seem like a waste, but you're employing counterfactual thinking. People aren't psychic- they make decisions based on what they are currently dealing with and what they can somewhat predict in the near future. The confusion here is your argument is equating an efficient allocation to a "perfect" allocation. In retrospect, things can only be IMAGINED to result in the ideal outcome. This is how we can perceive any event in history. Today, if you look at an increase in demand for a particular market, your intuition would tell you that investing in the market could lead to potential profits. Volatility in the market that causes these ups and downs is, in my opinion, why government intervention or control of the stock market would be a waste of time. If the people who do this stuff for a living are still making mistakes, what makes you think a government bureaucracy could do better? In fact, what we've really seen here from this government intervention are bailouts of the financial sector and "gifts" which give brokers more incentive to make riskier, more consumer burdening decisions.
I believe we should merely solve simple poverty in our republic and engender a modern moral for modern times of, if you can't claim to be in (official) poverty you have only yourself to blame for staying poor on an at-will basis.
You as an individual can try. heh - - - Updated - - - free matkets as by far the most efficient way to create wealth rememeber freaknomics was debunksed thouroughly by freedomnomics book you amatuer economists
The people who do this stuff for a living are not necessarily making mistakes, they are responding to the markets as best as they know how which occasionally results in irrational behaviour at a large scale. The government's job would be to adopt some regulation to inhibit irrational behaviour among market participants, like for example, to preclude a market bubble or a cascading market panic created by the failure of a major financial institution. The US has a long history of unfettered markets and unregulated financial institutions. Their regulation is entirely reactionary, impelled by the periodic economic calamities that their activities visited upon the people, who clamoured over and over for the government do something about it so they could go about their lives in some reasonable facsimile of economic security. The confusion may come from your apparent belief that markets are rational, or that economies will always recover but these positions are not really supportable in the historical record. Europe's economy collapsed with the withdrawal of the Roman Empire and did not recover for 500 years. As soon as it did recover it recorded the first instance of a market bubble, the Tulip craze. I had no intention to compare the allocation of resources through capital markets with "perfect" allocation, just to point out that capital markets are far less efficient in the allocation of resources than most people would ever imagine because the intent of capital market participants is the most profitable deployment of money regardless of its effect on the allocation or waste of resources. I can give you some small example of how government intervention prevents a huge waste of capital. In Taiwan there was local entrepreneurs who wanted to build an LCD factory. They had lined up financing from major local banks. The government would not let them go forward because it would take up half of Taiwan's available capital for three years and Korean manufacturers were already a year ahead, which meant that they would beat them to the market, recover their investment, and then drop the price for LCD screens to below what it would take for the Taiwan companies to recover their investment. Instead the government encouraged them to develop expertise in pc motherboards and peripherals, which Taiwan now dominates, along with a steady flow of investment capital into other areas, like cell phones which has brought benefits to companies like HTC.
Actually, no it isn't. Central planning, and an official Mint are much more important to any business venture under any form of Capitalism. Hoover Dam and our federal InterState highway systems are examples.
And the moral of your story about Taiwanese entrepreneurs is the same as that of the free market and of what I'm saying. If they had not allocated their resources in the most rational/efficient way, the Korean manufacturers would've overtaken them. The market drives out waste and inefficiency...
The market may eventually drive out waste and inefficiency but only after massive misallocations of resources prove unprofitable. A lot of wealth is destroyed when large scale capital ventures fail, which is something that Taiwan recognized. It was not a zero sum game to them, the failure of the venture would have disappeared a large chunk of Taiwan's available capital, making it impossible to fund other ventures, no matter how promising.
The moral of that story is that Socialism made some suggestions and Capitalism was able to take advantage of those arbitrage potentials at the time.
Referring to the free market. Mostly I agree although I think bartering and farmers markets retain some free elements. Hunter-gatherers had a free market but we have drifted a long way from that. More good regulations and less bad regulations is where the discussion should be. Most of the rest is religio-ideological blather.
I think that this is a good point -it's not that the government doesn't have the ability to help increase competition and prosperity in the market (infrastructure and a safety net are examples of things that the government can do to aid people)- it's more-so the fact that government has a terrible tendency to make poor decisions in the marketplace. A free market is only compatible with government if said government is competent.
