Libertarianism Declared Dead

[SaulOhio]

I suppose what de-regulation in the financials there has actually been could be considered libertarian, but frankly, financials are an area many libertarians consider to be a legitimate target for careful government oversight-it's not regulation per se that is an evil for libertarianism (though it seems to be for many people who consider themselves libertarians) but over-regulation and regulation that causes undesireable unintended consequences.

Depends on how you define regulation. I don't call oversight of an industry and outlawing fraudulent business practices to be regulation.

I define it as actions of the government above and beyond its proper role of defending rights against those who initiate force and fraud. That is where I would guess you put the line for over-regulation.

 

[SaulOhio]

Please explain what is libertarian about doing that. It outlaws voluntary lending and borrowing.

The argument for that is one you reject without argument by dismissing it as a conspiracy theory.

 

[Francesca R]

The argument for that is one you reject without argument by dismissing it as a conspiracy theory.

How is outlawing voluntary lending (collateralised or not) libertarian?

 

[SaulOhio]

How is outlawing voluntary lending (collateralised or not) libertarian?

As I have said, I have explained time and time and time and time again, but you dismiss it without argument except to label it a conspiracy theory.

 

[The Central Scrutinizer]

Correction--a quarter (25%), since 22/8/08.

He gets his information from World Net Daily.

BTW, there is no 22nd month.

 

[Mister Agenda]

Please explain what is libertarian about doing that. It outlaws voluntary lending and borrowing. ?

I'm not sure there IS anything libertarian about that. It sure seems to come up a lot, though.

You mean a free-market in overnight interest rates and no monetary policy? Since monetary policy is demonstrably counter-cyclical, and policy rates tend to "do what the bond markets tell them" (except with a lot of smoothing and lower volatility), how do you think a more stable economy would result??

Why do you think I think that? I thought I clearly labeled those ideas as bad or impractical. I DO think the Fed has set rates lower than they 'should be' for some time and that has contributed to current problems, but I am not knowledgeable enough about banking to speculate on a better way to set interest rates, except that it would probably involve a 'discovery' process, which, as you point out, would have to be smooth and stable in order to be useful. I apologize for not having a plan right now that is more sophisticated than 'wait until the markets are stable then gradually raise interest rates a bit, wait and see how that works out, and if it seems safe, raise them a bit more.' It may just be that libertarians don't have any special ideas in this area that are better than current accepted financial practice. I'm basically okay with current accepted financial practice, and that doesn't make me an unusual libertarian, although it may make me an unusual libertarian on discussion boards.

And so it is for everyone. So that means "regulations that we like", no?

Taken literally, yes, probaby mostly regulations that you and I both would like.

I think regulations should be subject to regular review where the presumption is they aren't necessary. Are they outdated? Are they enforced? Do they serve a special interest over the interest of the general public? Maybe a sunset clause in which new regulations automatically lapse after 10 years if the agency can't justify renewal. Just because some regulation is good doesn't mean more regulation=better. Regulation that used to be good may be past it's prime and need updating or may simply no longer be necessary. Trash in the Federal Register should be cleaned out. I'm not claiming more regulation =/ better either. Good, needed regulation=better. And I think it is important that the review involve representatives not beholden to either the industry being regulated or the agency that regulates it.

 

[Mister Agenda]

He gets his information from World Net Daily.
BTW, there is no 22nd month.

22 Aug 08 is how I would write it. Bit of diversity there, I started writing it that way in the military, perhaps Francesca has been exposed to a setting where 22/8/08 is how one writes it. Or perhaps you are right and it was just a rare mistake on Francesca's part.

 

[SaulOhio]

Francesca is from London. Thats how the Brits do it, the put the day first, then the month, then the year. Americans do it MM/DD/YY, while a lot fo europeans do it DD/MM/YY.

 

[Francesca R]

(In the UK it is dd/mm/yy. Your immigration folks are even sufficiently accommodating that they ask for date of birth to be written in this format on the visa-waiver paperwork. Nice of them)

 

[Francesca R]

As I have said, I have explained time and time and time and time again, but you dismiss it without argument except to label it a conspiracy theory.

Evasion noted. Clearly that is *not* libertarian, except where libertarian means "pick and choose what I want gubmint to do on an ad-hoc basis"

 

[SaulOhio]

As far as that quote I am criticized for getting from World Net Daily, I found the original source:

Remarks by Governor Ben S. Bernanke
At the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois
November 8, 2002
On Milton Friedman's Ninetieth Birthday

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.

While I admire Milton Friedman greatly, but I do not agree with all of his ideas. He was not an advocate of the gold standard, and I have heard his positions on banking called "monetarist".

So either the ideas of Milton Friedman that Bernanke was acting on were wrong, or Bernanke didn't actually act on such ideas. Because looks like, "Oops, I did it again".

I need to read the entire speach.

But WND got it right. So next time you might not be so quick to dismiss somethign I cite just because of the source.

 

[Francesca R]

I'm not sure there IS anything libertarian about that. It sure seems to come up a lot, though.

My sentiments also. Even "government is crime" views sit oddly with it, since it erases a lake of private sector choice in order to restrict a puddle of government control.

Why do you think I think that? I thought I clearly labeled those ideas as bad or impractical.

OK.

I DO think the Fed has set rates lower than they 'should be' for some time and that has contributed to current problems, but I am not knowledgeable enough about banking to speculate on a better way to set interest rates

More of a directive mandate to lean against asset price rises is quite likely to be an outcome, implicitly or explicitly (not that a bull market in anything much is around the corner)

 

[The Central Scrutinizer]

(In the UK it is dd/mm/yy. Your immigration folks are even sufficiently accommodating that they ask for date of birth to be written in this format on the visa-waiver paperwork. Nice of them)

Yes, I know. I was just pointing out how backward you people are.

 

[Thanz]

Depends on how you define regulation. I don't call oversight of an industry and outlawing fraudulent business practices to be regulation.

I define it as actions of the government above and beyond its proper role of defending rights against those who initiate force and fraud. That is where I would guess you put the line for over-regulation.

The problem with the libertarian idea of regulation (preventing the initiation of force or fraud) is in defining when the initiation of force or fraud occurs. For example, is there initiation of force or fraud where there is a massive inequality of bargaining power? What about collusion among firms?

Scenario A:

Bob is a regular guy. He has an average unskilled job, not much savings, no health insurance. He gets cancer. He misses some time off work, so they fire him. There are other people who can easily fill his shoes, and the employer wants to make sure that someone is there day to day so they hire someone healthy.

Bob now uses his savings (and more) to pay for medical treatment as he has no desire to die. The hospital gives him a bill, which he cannot pay. He still needs treatment, and the hospital won't give it to him without cash up front and paying the old invoice. Bob tries to get a loan at a bank, but he is a poor credit risk due to the cancer and no job, so he is denied.

Bob, in desperation, sees Tony, the last chance loan guy. Tony agrees to lend him money for treatment at 10% interest per month. He tells Bob that if he doesn't pay, then he will send Guido to inflict bodily harm. Bob understands this, but needs the money for treatment or he will die. So he agrees with Tony to get the money.

Bob gets the treatment, but doesn't get a job and can't pay back Tony. Guido breaks 3 of Bob's ribs.

Where, if anywhere, is the 'initiation of force or fraud' in this scenario? Where would an ideal Libertarian government step in, if at all?

Scenario 'B'

The market for gas is controlled by a relatively small number of market players. For the sake of argument, let's say that there are 5 major companies that control gas stations in a particular city. No matter where you buy gas, you are buying from one of the 5.

One day some bright young executive fresh out of MBA school runs some numbers and realizes that if the price of gas were 25 cents higher, they would make a lot more money. He is also bright enough to know that his company can't be the only one to raise the price of gas, as people will just buy it cheaper from one of the other 4 companies. So, he gets together with other bright young executives from the other 4 companies and proposes that they all agree to raise the price together, which will mean a rise in profits for all. The others all agree, and the next thing you know gas is 25 cents higher.

The consumers are all upset, but they need gas so they pay the extra 25 cents to get it.

Where, if anywhere, is the 'initiation of force or fraud' in this scenario? Where would an ideal Libertarian government step in, if at all?

 

[SaulOhio]

Thanz: Scenario A has been pretty much covered in the "shoot your brains out mortgage" issue.

Scenario B doesn't happen, or at least, when businesses make such agreements, they tend to be broken almost right away, unless enforced by government, such as in the OPEC oil cartel.

 

[UnrepentantSinner]

That's it, I'm putting in for the Million. Today's Wiki feature entry - The Panic of 1907. I'm psychic!

 

[Francesca R]

Thanz: Scenario A has been pretty much covered in the "shoot your brains out mortgage" issue.

You have asserted "A libertarian society would outlaw such a contract" but the reason why is muddy. Bob voluntarily enters into the deal with Tony. Tony offers Bob an ex-ante outcome which net advantageous for Bob relative to Bob's alternatives (which are not Tony's fault). It is entirely utilitarian and pareto superior.

I think you would need to define some absolute metric of "some probability of outright harm" inflicted on Bob by Tony's side in one potential outworking of this contract. However that is very problematic. How can you designate it as "force" when it was voluntarily incurred? If the penalty was "you lose your home" or "You work for me for USD0.01 an hour for a year", is that OK? Is force just physical harm?

Scenario B doesn't happen, or at least, when businesses make such agreements, they tend to be broken almost right away, unless enforced by government, such as in the OPEC oil cartel.

Scenario B could easily happen if a cartel was a small group and controlled 100% of the market as per the example. And the cartel of gas station owners is its own internal government in the scenario. So your position that it just wouild not happen is a matter of faith. Would a libertarian society enforce against such cartels, and why (in whose interest)?

 

[Thanz]

Thanz: Scenario A has been pretty much covered in the "shoot your brains out mortgage" issue.

No, it hasn't. Shooting someone's brains out is not the same as breaking some ribs. Plus, I outlined a much longer string of events - and asked where (if anywhere) a libertarian gov't would step in. Please provide the courtesy of an answer.

Scenario B doesn't happen, or at least, when businesses make such agreements, they tend to be broken almost right away, unless enforced by government, such as in the OPEC oil cartel.

Looking at gas prices now there are many who believe this happens today. The prices seem to rise and fall as one. I don't think that it is far fetched at all, and does not require any gov't support. In the vitamin market the major players conspired to fix prices for over 10 years - this happens in the real world. (Link So, does a libertarian gov't step in or no? Is there such thing as a competition bureau in a libertarian gov't?

 

[UnrepentantSinner]

And the 1980's had only one recession, not till 1991.

I simply cannot argue with this sort of "logic".

And I'm sorry to snip your quibbling over the gold standard but you prove my point. We had panics and depressions (note, not recessions, please see my earlier post) about every 10 years before the establishment of the Fed and we only had one after it - one largely based on libertarian economic ideals... that the market could guide itself - which happend while America was on the "100% pure gold standard" in 1929. Oddly enough, since we've gone off the "100% pure gold standard" we haven't had any panics or depressions as I noted. And since 1971, when we went totally off gold as the basis for the dollar, we've had a few hiccoughs in 1973 (Oil Crisis), 1982 (recession), 1987 (S&L meltdown), 1991 (peace dividend not working out) and 2008 (mortgage and credit meltdown).

None of the recessions since 1971 were due to the fact that we're totally off the gold standard... and, I again point out, we haven't had a panic or depression since 1929.

 

[Mister Agenda]

Scenario A:
Bob, in desperation, sees Tony, the last chance loan guy. Tony agrees to lend him money for treatment at 10% interest per month. He tells Bob that if he doesn't pay, then he will send Guido to inflict bodily harm. Bob understands this, but needs the money for treatment or he will die. So he agrees with Tony to get the money.

Bob gets the treatment, but doesn't get a job and can't pay back Tony. Guido breaks 3 of Bob's ribs.

Where, if anywhere, is the 'initiation of force or fraud' in this scenario? Where would an ideal Libertarian government step in, if at all?

The 'Guido Clause' in the contract would not be legally enforceable under a Libertarian government. Bob's right to not have force initiated against him is inalienable. 'But he said I could hit him' is not a defense against assault charges in a Republican, Democrat or Libertarian government. Fortunately for Bob, resources besides the government and Tony exist.