Dealing with replies to my free market skepticism posts

Dealing with replies to my free market skepticism posts February 15, 2015

This chap (to whom the series was directed), Scotty M, has replied to some of my points in the series on Free Market Economics. Unfortunately, he would rather rabidly bash away at You Tube than bring a civil discussion here.

The most common issue that Scotty faces is his predilection for straw manning positions by either misunderstanding them or wilfully employing some kind of bait and switch or intended mischaracterisation to fight against an imaginary foe.

This is one of the comments he made in answer to my first post in the series (and check out the Appendix of rabid comments that I compiled here, which should give you an idea of his original approach):

It’s okay, I know how it feels to latch onto an economic illiterate like Ha-Joon Chang who doesn’t even understand the very basics of economics, backed up by the fact that he knows little about history, considering historical evidence plastered everywhere has proven Collectivism’s failure AND proving he doesn’t understand why central planning is an abysmal failure. The evidence proves he doesn’t understand why the government cannot know and does not know the needs and wants of people and also provides the evidence that he doesn’t understand pricing.

taking words from someone like Ha-Joon Chang on economics is like listening to someone such as Thomas Piketty who can’t even get his dates right and doesn’t understand history. Better yet, Paul Krugman or Noam Chomsky, in other words, to be blunt, Ha-Joon Chang is more or less an economic degenerate. The fact he claims that there’s no such thing as a free market proves he doesn’t even understand the very definition of what a free market typically is and as I’ve said before, the term free market is not defined in black and white, the world isn’t black and white. That’s a bit like someone saying there’s never been a Capitalist economy, which is bullshit, because nothing in this world is black and white like that. His entire argument is fallacious at best.

and

A lot of the ‘Progressives’ or as I like to call them ‘Regressives’ have caught onto this new fad, where before hand it was Thomas Piketty, which you can find Tom Woods with Robert P. Murphy tearing Thomas Piketty apart on history here:http://www.youtube.com/watch?v=aL90pISm7Y8 Thomas Piketty was held up as this great intellectual by the left-wing, which is laughable, he can’t even get his dates right during the lead up to the Great Depression, especially on taxation, so clearly that shows how historically illiterate Thomas Piketty is, yet the left-wing held him up as some Golden treasure, as if he was some enlightened intellectual. Kind of reminds you of the moron himself, ‘Noam Chomsky’ or better yet the “Nobel Prize Winner” Paul Krugmanwho still doesn’t understand basic fundamentals of economics.

So we’ll move onto Ha-Joon Chang, another one they’ve held up as enlightened. How people can take this guy seriously, I have no idea, why? Because he supports Central Planning and actually thinks Central Planning can work, that is evidence he doesn’t understand the problem with the price mechanism under Central Planning, evident that he has no clue about the Economic Calculation problem that Central Planners are faced with. Not only does this prove his ignorance toward history, but proves he has very little understanding of pricing, meaning he knows very little about Economics. He’s an economist that prefers that of Central Planning over the market, it should tell enough about him. To more accurately describe Ha-Joon Chang, he’s a Development Economist, someone who analyses development of countries as a means to find ways in which these nations can bring about economic growth. He’s someone who is more pro governance and this is why he’s someone who attacks the ‘Free Market’. Came across his arguments various times before from ignoramuses who claim ‘The Free Market has never existed’, in other words, regurgitating his words and taking their word for it because they don’t understand that the term ‘Free Market’ is not defined in black and white.

The problem with Ha-Joon Chang is, his idea of central planning is delusional, to think that this all powerful entity known as the government can some how bring about such wonder through Central Planning and that the government just needs the information available for them. The problem is, the government finds it impossible to access that information, this is what lefties fail to understand, that the government finds it impossible to match the needs and wants of people. The fact he thinks he knows better than the‘Market’ (Consumer Demand) says everything about this guy. I mean that’s a bit like saying the government knows best over planning for what music you listen to over yourself.

This is the same Ha-Joon Change who wrote “there are no objective truths in economics that can be established independently of political, and frequently moral, judgements.”This right off the bat proves he doesn’t understand economics, because the big mistake Ghandi made was thinking that economics is something moral, when in real fact, it isn’t. Just like value, what I may personally see valuable, you may not, because it’s subjective. When you view the economy as something ‘moral’ you’re taking Marxist Labour theory of value into account and that is a very big mistake. This is where the government thinks it can dictate what is right from wrong for you to have. There is no right from wrong, value is subjective. Just like how the government may ban something which you may personally see as valuable, he’s a dictator.

Having not even mentioned Piketty myself once (he keeps bringing him up and trying to bait me into using him so he can attack this caricature), many of these claims are simply irrelevant. And finally there is this:

He also fails to understand that the reason rich people easily influence outcomes is due to government interference, not the fault of the free market, in other words, he’s an economic degenerate who you couldn’t take seriously on economics unless you’re an economic illiterate yourself, which he is :)

I would like to point out where the man is either flat out wrong, or using spurious techniques to communicate his point.

Firstly, poisoning the well (again, refer to the APPENDIX). When one uses such disingenuous techniques as flagrantly slagging off academics referred to in a discussion, you know the discussion will not go far. This is (and has been throughout the thread on YT, both against me and the people to whom I refer) a common mechanism for him to psychologically bias readers against myself and the academics that I refer to. As Rationalwiki states of poisoning the well:

Poisoning the well is a rhetorical technique and logical fallacy that uses the association of negative emotions to distract a subject from actual evidence in an argument.

The usual method is to point out the unpleasant nature of the person making the opposing argument, in which case it is a special case of a personal attack or ad hominem. In general, “to poison the well” means to pre-provide any information that could produce a biased opinion of the reasoning, positive or negative.

It can be done subtly or quite blatantly. A subtle way of poisoning the well would be to use particular adjectives in introducing something that would influence people who are about to hear an argument. In a more blatant display, someone can make an outright personal attack in an introduction. For example, asking people to remember that a person has been in prison before listening to their statements; the well is now “poisoned” because people are likely to distrust a person making an argument knowing that they’re a convict, regardless of the reasoning that they put forward.

When you strip back the petty insults and ranting, you can get to the core claims. Here is a person who is on an ideological mission with no care in the world in being objective, skeptical or open to being wrong. He would do well to read some Jonathan Haidt, because he will not change anyone’s mind using his present tactics,

These seem to be what he is claiming:

  1. Scotty makes proclamation over success and failure, good and bad systems, what one should do or not, without presenting his system of evaluation. This undergirds all of his other claims.
  2. A false dichotomy of either collectivism (communism/socialism) or libertarianism, and that H-Joon Chang represents the former
  3. He is an advocate of central planning, and this is very bad indeed, and has shown to abysmally fail.
  4. Claiming someone is an advocate of central planning means that is is “evident that he has no clue about the Economic Calculation problem that Central Planners are faced with. Not only does this prove his ignorance toward history, but proves he has very little understanding of pricing, meaning he knows very little about Economics.” Wow. Which is nothing at all to do with the point in the very piece he was supposedly critiquing. This is both a red herring and poisoning the well.
  5. Free market (as a term describing real things) is not black and white – “Came across his arguments various times before from ignoramuses who claim ‘The Free Market has never existed’, in other words, regurgitating his words and taking their word for it because they don’t understand that the term ‘Free Market’ is not defined in black and white.” – this shows he fundamentally fails to understand the point at a philosophical level, and as a result, his own contradictions.
  6. The government can’t access information, only the people can through market forces, thus free market economics wins.
  7. Economics and the desire for a certain economic system does not have a moral dimension (I can’t wait to deal with this one).
  8. Rich people only have influence due to government influence; the free market would solve this.

That should do for now.

So let us look at these one by one, with some brevity.

1. Scotty makes proclamation over success and failure, good and bad systems, what one should do or not, without presenting his system of evaluation. This undergirds all of his other claims.

This is vital to everything else, and I will return to it in a later point. With only, it seems, the desire to want to evaluate his economic system (which he cannot do anyway since there is no perfect example of such) in terms of economic growth or monetary gain of some sort (he never says so I am guessing), it seems rather one dimensional and verging on circular. For example, if we talked about income inequality, Japan, Czech Republic, Scandinavia and suchlike would have the most successful systems (not, as he seems to claim, Singapore, Hong Kong, Chile and Korea at different moments in time). But value systems and their evaluation could be built on one or all of the following: happiness, money (real terms, growth, equality), wellbeing, knowledge, skills, resources, health, status, standard of life, quality of life etc.

Since he never sets any of his success criteria out, his claims are castles in the air with little or no rational value. It also explains, perhaps, why Scotty has his overly strong opinions of anyone else with different economic views as him: because they are probably using other value systems which are multi-dimensional. They are just on completely different pages.

What is vital for a later point is that this DOES actually mean we have an intersection with morality. But I will leave that for now.

2. A false dichotomy of either collectivism (communism/socialism) or libertarianism, and that H-Joon Chang represents the former.

Throughout this entire discussion, Scotty has insisted on representing the argument as a false dichotomy of either pure free market economics or collectivist communism. This is a misrepresentation of the state of affairs. Neither myself nor Chang, to whom I refer, are collectivist communists. It is not either that position or libertarian free marketism. This is silly and naive.

Scotty does seem only interested in deriving his information from places which confirm his conclusion. This is very common and we all do it. But he seems so hellbent on confirmation bias for libertarianism that it does seem to blind his objectivity and rational faculties. It appears his opinions on Chang are derived from such places as here or similar where people are only interested in building straw men of their opponents.

3. He [Chang] is an advocate of central planning, and this is very bad indeed, and has shown to abysmally fail.

This is bloody frustrating. If Scotty bothered to actually read the people he slags off rather than deriving opinions of them from equally hellbent biased sources, he would have a far more objective and sensible conclusion. For example, he would know that Chang sees himself, within the paradigm of industrial policy, of sitting midway between planned economies and the free market. He would just need to read Chang’s 23 Things They Don’t Know About Capitalism pages 199-209 where he deals with exactly this myth, exactly this sort of false dichotomy, including:

Unfortunately, central planning did not work very well in practice. The main problem was that of complexity. The Marxists may have been right in thinking that the development in productive forces, by increasing interdependence among different segments of capital, makes it more necessary to plan centrally. However, they failed to recognize that it also makes the economy more complex, making it more difficult to plan centrally.

Central planning worked well when the targets were relatively simple and clear, as seen in the success of early Soviet industrialization, where the main task was to produce a relatively small number of key products in large quantities (steel, tractors, wheat, potatoes, etc.). However, as the economy developed, central planning became increasingly difficult, with a growing number of (actual and potential) diverse products. Of course, with economic development, the ability to plan also increased thanks to improvements in managerial skills, mathematical techniques of planning and computers. However, the increase in the ability to plan was not sufficient to deal with the increase in the complexity of the economy.

One obvious solution was to limit the variety of products, but that created huge consumer dissatisfaction. Moreover, even with reduced varieties, the economy was still too complex to plan. Many unwanted things were produced and remained unsold, while there were shortages of other things, resulting in the ubiquitous queues. By the time communism started unravelling in the 1980s, there was so much cynicism about the system that was increasingly incapable of delivering its promises that the joke was that in the communist countries, ‘we pretend to work and they pretend to pay us’.

No wonder central planning was abandoned across the board when the ruling communist parties were ousted across the Soviet bloc, following the fall of the Berlin Wall. Even countries such as China and Vietnam, which ostensibly maintained communism, have gradually abandoned central planning, although their states still hold high degrees of control over the economy. So, we all now live in market economies (well, unless you live in North Korea or Cuba). Planning is gone.

He goes on to make very sensible, centrist claims. You need planning to some degree. This is what every government of the world is and does. They are planners. Under pure free market economics, what would happen in times of war? Law? Future organisation for disaster management relief and planning (including diseases)?

In fact, his beloved Singapore uses such approaches (as well as many other economies under different guises, such as Indicative Planning) in their mobilisation of SOEs (State Owned Enterprises) which catalyse key sectors in the market for national capitalistic gain.

As Chang eloquently states:

The question, then, is not whether to plan or not. It is what the appropriate levels and forms of planning are for different activities. The prejudice against planning, while understandable given the failures of communist central planning, makes us misunderstand the true nature of the modern economy in which government policy, corporate planning and market relationships are all vital and interact in a complex way. Without markets we will end up with the inefficiencies of the Soviet system. However, thinking that we can live by the market alone is like believing that we can live by eating only salt, because salt is vital for our survival.

 Unless the whole world was to be instantly free market, the system would surely be doomed to failure. That is human nature. Imagine a free market operating in World War II and how it would cope with Nazi Germany. Again, this discussion comes down to degrees, and Scotty simply mischaracterises everyone as either all or nothing; naive and ridiculous at best.

4. Claiming someone is an advocate of central planning means that is is “evident that he has no clue about the Economic Calculation problem that Central Planners are faced with. Not only does this prove his ignorance toward history, but proves he has very little understanding of pricing, meaning he knows very little about Economics.” Wow. Which is nothing at all to do with the point in the very piece he was supposedly critiquing. This is both a red herring and poisoning the well.

So despite having not appeared to have ever read Chang in any detail in his life (I am fairly sure he had never heard of him when I first mentioned him), he goes on to say this drivel. Apparently, an economist with a deep understanding of history of economics, who had written a great deal on exactly that: the history of economics and the history of capitalism, is illiterate of history and economics…; to say what Scotty did here is nothing short of insultingly immature. It is poisoning the well, and actually had nothing to do with my original point, which I will come to.

In fact, in one similar naive straw man attack on Chang, one commenter points out the shortcomings of painting Chang so simplistically at one end when he really sits somewhere in the middle:

Because your opponent [Chang] isn’t on the opposite side to you. He’s in the middle.

Just like developing nations are each in their own middle. He leans one way but says, ‘try the thing that fits the situation’ . You seem to say ‘only try one thing’ .

… Except at the points where you seem to say otherwise in championing Hayek in regulation which promotes fruitful, constructive competition.

I guess that’s like a golf handicap which allows a beginner to flourish in being at least able to play the same game as the expert.

Maybe you two even agree on the details. Playing on the same green from different ends.

The similarity to Scotty’s position is incredible. In fact, you can see here that Chang is even influenced by Friedrich von Hayek, the Austrian economist often cited as defining the parameters of this free market paradigm.

5. Free market (as a term describing real things) is not black and white – “Came across his arguments various times before from ignoramuses who claim ‘The Free Market has never existed’, in other words, regurgitating his words and taking their word for it because they don’t understand that the term ‘Free Market’ is not defined in black and white.” – this shows he fundamentally fails to understand the point at a philosophical level, and as a result, his own contradictions.

This is in reference to my original post taking issue with applying a black and white term and applying it to a seemingly arbitrary point or area along a continuum. He occasionally sheepishly admits that free market capitalism is not a black and white situation, that it is difficult to define, and then says things like this:

Corporatist United States of America and attempt to call that a Capitalist country, it’s in fact laughable, considering the fact Crony Capitalism has nothing at all to do with Capitalism and is the direct opposite of it.

You can’t, there’s never been a mixed economy in world recorded history that has ever worked; none.

the most successful economic time period in Sweden’s history was under their free market years between 1870 to 1960

United States who hasn’t had a free market since between 1896…

free markets have existed and not once has any free market failed, never. Not once in history, they’ve always been a success. We saw that success in the United States in the late 19th Century, same again with the British Industrial Revolution, Hong Kong, Singapore, South Korea, Chile, but of course, we’ll ignore that fact now, won’t we?

and so on. These are clear cut claims. So he admits it is tough to define, and yet happily defines successes as qualifying when it suits him, and failures as not, when it suits him. This is precisely my criticism in the No True Capitalism post here, which he utterly fails to address, and remains repeating the same tired old mantra.

This is the world of fuzzy logic. Indeed, there probably is no such thing as a free market. There is no example of it ever. Instead, what there is a freer market. It is a comparative term as opposed to an absolutist term. I cannot overemphasise this point enough.

Furthermore, it is (as Chang would suggest) not about the amount of intervention, but the type, as this commenter on the critical post of Chang earlier mentioned:

Something you said in another place, about Victorian Britain intervening less than modern Britain, you have to remember that Chang is a development economist and the relevant issue is not “more” or “less” regulation is a country but what kind of regulation and at what level of development. Given it´s level of development the specific kinds of regulation that Victorian Britain engaged in a more than that of countries which today languish with Victorian levels of GDP. In the UK case, now it´s much richer, the issue in the kind of regulation and intervention we go in for, and again in the second volume I mentioned all this is discussed.

 As you can see, not only does he not get the whole Sorites Paradox application, but he also contradicts his own claims.

6. The government can’t access information, only the people can through market forces, thus free market economics wins.

Again, I mentioned this in one of my posts. The free market does not give people free access to information. In fact, only government regulation can insure that, though governments can also take advantage and withhold it (not the sort of governments I would endorse). Thank goodness for the internet age, eh!

We can already see that in recent advancement in neoliberalism and capitalism, universities have had to shift towards more vocational and business minded things. Knowledge for knowledge’s sake is no longer so viable or attractive to education providers. This goes back to the idea that there are other units of value to life other than monetary ones. Any value judgement such as “this is good, this is better” is dependent on a value system. Most secular understandings of morality are in some way consequentialist (even virtue ethicisists often pragmatically use consquentialism on a daily basis), where moral judgement is based on the consequences to an action. But the unitary currency is up for debate. Often it is the pleasure/lack of pain dynamic, but pluralistic understandings of morality will include any number of things. Ideally you would want something non-derivative. What this means is that if one asks why someone did something, or should do something, the answer will be “Because X”. So then we ask “Why X?”, and the answer becomes “Because Z”. We keep asking the why question, and if we keep getting answers, we have an infinite regress (see my post on the Munchhausen Trilemma) so, eventually, there needs to be an axiomatic grounding, a brute non-derivative, self-evident fact. This is why it is often claimed that some form of happiness/pleasure paradigm is great for morality. It is self-evidently good to be happy, so it does a great job of grounding morality. However, many disagree that a single aspect can work since it is so one dimensional.

If Scotty is claiming we should adopt a particular economic model, he is making a moral statement (ceteris paribus). Unless he wants to throw in a properly stated protasis (if statement) such as “If we want the economy to grow in monetary terms, then…” or something similar, then he is clearly making a moral statement which involves obligation to action. It is good to have free market economics because x or y. Though he never sets out the x or y. Here is what the Stanford Encyclopedia of Philosophy states on pluralistic consequentialism:

Many consequentialists deny that all values can be reduced to any single ground, such as pleasure or desire satisfaction, so they instead adopt a pluralistic theory of value. Moore’s ideal utilitarianism, for example, takes into account the values of beauty and truth (or knowledge) in addition to pleasure (Moore 1903, 83–85, 194; 1912). Other consequentialists add the intrinsic values of friendship or love, freedom or ability, life, virtue, and so on.

If the recognized values all concern individual welfare, then the theory of value can be calledwelfarist (Sen 1979). When a welfarist theory of value is combined with the other elements of classic utilitarianism, the resulting theory can be called welfarist consequentialism.

One non-welfarist theory of value is perfectionism, which claims that certain states make a person’s life good without necessarily being good for the person in any way that increases that person’s welfare (Hurka 1993, esp. 17). If this theory of value is combined with other elements of classic utilitarianism, the resulting theory can be called perfectionist consequentialism or, in deference to its Aristotelian roots, eudaemonistic consequentialism.

Similarly, some consequentialists hold that an act is right if and only if it maximizes some function of both happiness and capabilities (Sen 1985, Nussbaum 2000). Disabilities are then seen as bad regardless of whether they are accompanied by pain or loss of pleasure.

Or one could hold that an act is right if it maximizes respect for (or minimizes violations of) certain specified moral rights. Such theories are sometimes described as a utilitarianism of rights. This approach could be built into total consequentialism with rights weighed against happiness and other values or, alternatively, the disvalue of rights violations could be lexically ranked prior to any other kind of loss or harm (cf. Rawls 1971, 42). Such a lexical ranking within a consequentialist moral theory would yield the result that nobody is ever justified in violating rights for the sake of happiness or any value other than rights, although it would still allow some rights violations in order to avoid or prevent other rights violations.

When consequentialists incorporate a variety of values, they need to rank or weigh each value against the others. This is often difficult. Some consequentialists even hold that certain values are incommensurable or incomparable in that no comparison of their values is possible (Griffin 1986 and Chang 1997). This position allows consequentialists to recognize the possibility of irresolvable moral dilemmas (Sinnott-Armstrong 1988, 81; Railton 2003, 249-91).

If the free market is uninterested in morality, as Scotty earlier suggested, it seems unlikely to be interested in knowledge for its own sake. It seems equally as likely to take advantage of knowledge inequality for the producers’ own gains if possible. This is basic economics – consumers, in order to make fair and balanced consumer choices, need full knowledge of the products. This will simply never happen in a free market scenario. You only have to look at what happened when news stations are financially answerable to the stakeholders in their business, causing a conflict of interest. They do not become balanced news outlets. See what happened with FOX and their investigation into Monsanto and the high yield drugs for cows which caused mastitis. Monsanto threaten to pull their advertising, the station drop all investigations and do not run the story.

This happens time an again. And of course, there are terrible examples of state-owned news organisations. But let’s not revisit the false dichotomy.

I simply can’t see that von Mises and von Hayek’s claim that a dispersal of knowledge through market forces would ever be pragmatically viable. Knowledge becomes a commercial product with only commercial value, unless you are rich enough to turn it into an elitist pastime.

7. Rich people only have influence due to government influence; the free market would solve this.

Unless there were serious regulations about inheritance and suchlike (which of course there wouldn’t be under libertarian policies) then money will breed money. Rich, successful parents will have rich kids who will have greater opportunity to be successful. These people will run companies in the same mould as their parents, in all probability, and the chain will likely continue. We see income inequality rise in economically freer countries. This presents unequal opportunities with the poor having little chance of breaking the cycle. Even more so under such libertarian economics where education does not become a right or service for all, but a paid-for product most probably out of reach for the poor.

Of course, it depends how you define influence.

The main thrust here is that (and this is well understood from my hard determinist/incompatibilist vantage point) humans are clearly not granted equal opportunity. If such an idea as equal opportunity is fair, then the free market is ill equipped to be able to eliver it, since it all comes down to money and not access to services irrespective of the money you are born into.

Conclusion

Much of this debate revolves around a refusal to deal with the philosophy and not realising that any claim in the world pretty much invariably comes down to your moral philosophy, because morality deals with oughts, shoulds and obligations. I know this from personal experience; first, as a philosopher, and secondly as someone who helps run The Tippling Philosophers, who discuss everything under the sun. And what almost always happens in our discussion evenings? The discussion supervenes on and thus comes down to morality.

Scotty needs to rationally argue for a moral value framework upon which he can hang his economic claims about what we should do. Without doing this, his castle in the air will never have any foundations.

He also needs to deal with these sorts of things successfully within a libertarian free market paradigm: knowledge, wellbeing, health, happiness, virtue and so on.  And, of course, he still needs to deal with negative externalities and time lags between problems happening and the free market being able to do anything about it. Whether it be a negative externality in the environmental realm, or slave labour, or child labour, or gender inequality, or working conditions, or drug abuse and use, faulty goods or whatever, the free market needs to be able to deal with it. And not eventually, in a matter of time. The reactive capabilities of central governments mean that coordinated responses can be made straight away to threats to humanity, ecology, health, wealth, safety and any other negative aspect of existence. There is far less scope for lag time between issue and resolution. How long would dodgy working practises which benefit the company persist under the free market if not for regulation?

This right off the bat proves he doesn’t understand economics, because the big mistake Ghandi made was thinking that economics is something moral, when in real fact, it isn’t. Just like value, what I may personally see valuable, you may not, because it’s subjective. When you view the economy as something ‘moral’ you’re taking Marxist Labour theory of value into account and that is a very big mistake. This is where the government thinks it can dictate what is right from wrong for you to have. There is no right from wrong, value is subjective. Just like how the government may ban something which you may personally see as valuable, he’s a dictator.

That economics has nothing to do with morality is patently absurd. Almost everything has something to do with morality. Even the denial of morality… Since libertarianism is a whole paradigm set upon the nature of rights, then revisiting the SEP might be useful, on rights:

Rights are entitlements (not) to perform certain actions, or (not) to be in certain states; or entitlements that others (not) perform certain actions or (not) be in certain states.

Rights dominate modern understandings of what actions are permissible and which institutions are just. Rights structure the form of governments, the content of laws, and the shape of morality as it is currently perceived. To accept a set of rights is to approve a distribution of freedom and authority, and so to endorse a certain view of what may, must, and must not be done.

Emphasis mine. That’s, er, moral philosophy. And that is upon which his economic views, politics and obligations are based.

And, finally, he needs to be able to deal with these rights. He thinks an individual has the rights of a god, in some Randian sense. In that case, an individual has rights of not having something done which affects them. And enter stage left moral arbitration. And law. Otherwise he can’t complain when someone shoots him in the face with a gun they have freely chosen to have and freely chosen to use on him. Even once Scotty thinks he can establish some ontological sense of what a right is, it is a quagmire (such as sorting out hierarchies and how rights interact with other rights) which ends up being, you know, moral, and legal, and requiring such frameworks.

In other words, go do some fricking philosophy.

PS If you want something funny to laugh at, see the US Libertarian Party’s conclusion on Crime and Punishment.

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  • Travelman

    I’m no expert here. I’ve had an interest in economics all my life since studying it at A level, then as part of my banking exams, and generally keeping abreast of things. Even so I lack the detailed knowledge to be able to offer any great insights into your posts, but they do appear convincing and I’m going to spend some time reading them in depth.

    Scotty strikes me as a very immature person, perhaps late teenager or early days student. He certainly can’t be flourishing academically because his approach is so poor. Even if you disagree strongly with someone, if that person is renowned and qualified in their field then it is silly to start insulting them, in the way Scotty does. So many of the words and phrases he uses are those of the immature and inexperienced that one sees so frequently on the internet, so sure of the absolute nature of their arguments. Indeed its their very inability to understand opposing points of view that is hindering their real life development.

    • He’s actually a 30 year old Scot with his own You Tube channel which is primarily dedicated to pro-libertarian economics and politics. He is a UKIP supporter.

      But his debating and discursive technique is infuriating in its naivete and immaturity. There is a great discussion to be had there, if it could be civil. See his channel here: http://www.youtube.com/user/ScottMcK9

      • Travelman

        I see what you mean! The guy is infuriating in his dismissal of opposing views. He seems to be on a crusade now.

        Although I’m no expert I can pick holes in almost everything he says. For example, his view that governments seem to have no role at all in functioning economies, his view that the markets always know best (for heavens sake, did he sleep through 2007/8/9), and his support for linking currencies to the gold standard.

        Mind you I’m really not a UKIP supporter.

        • Hi Travelman,

          Thanks, yes it is infuriating because there IS a good discussion to be had here which I would love to have. The reason why it interests me is because, as you may have gathered from previous posts, the nominalism/realism issue is something I often write about and which affects so much in politics.

          Interestingly, a fellow philosopher whom I respect read my posts and said it was a perfect application of the Sorites Paradox, so @scottcjmckelvie:disqus does have to deal with this issue.

          I think if we put such rhetoric aside, there is a lot of meat to get into here.

          My intuitive conclusion would be this:

          Like morality in general, there is no right or wrong answer because it depends on your starting point and your final desired goal. Unless you can set out what you want society to look like in multiple aspects and dimensions, then setting out a mechanism becomes a mere assertion built on nothing. Economics like this is politics and this moral philosophy.

          For example, if you desire, as many do, income equality and equal opportunities, then it appears the free market economics doesn’t cut the mustard.

          Economics has so many variables and unknowns that conclusions, often, are inexact, and difficult to robustly defend.

      • jg29a

        I used to have this kind of approach in my teens and early twenties, and I’ve gotta say, it has quite a bit in common with religion. The belief in a pure, simple and intuitive explanation for incredibly complex phenomena comes first, and then the other valuable parts of the mind (the historical evidence-gathering part, the evaluating academic sources part, the philosophy/terminology-unpacking part) get recruited to serve that central ruler of cognitive purity.

        • This is sooo important in belief formation. It is emotional, intuitive and psychological attachment first, and then post hoc rationalisation later. Post hoc rationalisation is the biggest mechanism I see being used. Something I do try and eradicate from my own thought processes. Whether I succeed or not is not for me to be able to adequately evaluate.

          Though I do find it important to note that I have changed my mind on some very important points within philosophical discourse (free will, abstracts, morality) upon which almost everything else depends.

          I have written a little about changing minds and post hoc rationalisation here:

          http://www.patheos.com/blogs/tippling/2013/11/14/post-hoc-rationalisation-reasoning-our-intuition-and-changing-our-minds/

          Which @scottcjmckelvie:disqus would do well to read. When you commit so wholeheartedly to something that you are ready to insult the people who do not agree, you know that emotion plays a larger part than rationality.

    • Thanks, as ever, for the comments!

  • Scott CJ McKelvie

    You are an ignoramus to say the least, every bit as ignorant as that of Ha-Joon Chang, who is every bit as illiterate as that of Thomas Piketty. I never claimed you did say anything about Thomas Piketty, but Ha-Joon Chang is held up there along side the likes of Piketty and Paul Krugman. The biggest flaw in the entire argument is the sheer stupidity and ignorance to suggest there has never been a free market economy, when the Industrial Revolution for a fact, not even opinionated, but based on fact was a free market economy. Yes I stated very clearly that the free market is not defined as something in black and white, I stated that clearly, why? Because it’s like a scale, it’s how free your market economy is.

    Typically what defines a free market is one where the interest rates are set by the free market (Industrial Revolution) where the monetary supply is in the hands of the people (Industrial Revolution) with strong individual freedom to exchange freely with little government interference (Industrial Revolution). But that’s right, we’ll just turn a blind eye on the very fact that Hong Kong is a free market economy, we’ll sit and pretend it’s not just because it has government land ownership, like as if that is supposed to actually mean something. Well sorry to burst your bubble, but nothing in this world is black and white, it’s a bit like the claim that someone says there’s never been a truly laissez-faire Capitalist economy, and the point being? What exactly is the point? Exactly, there is no point, because that still doesn’t hide the fact that the economy Britain and the United States had during the Industrial Revolution was Capitalist, not mixed.

    However, what is astounding is the fact despite Hong Kong being a free market and showing vast economic growth from 1961 onward, it’s amazing how you say you have nothing there to judge by as that is a free market. The fact Ha-Joon Chang disagrees with this, well that goes to show how little he understands about economics, because it’s not defined in black and white, it’s not one extreme and then stops there, it isn’t something fixated, the word ‘FREE’ isn’t fixated, on a scale HOW FREE the market economy is is what truly counts, this is the fact you ignore. The best part of all is, the historical evidence backed up proves from Hong Kong, Singapore, Chile and countless others that the freer the market economy is, the better off it has proven to be. But that’s okay, we’ll just sit and ignore that historical fact, which is why Sweden’s most successful economic time period was under a strong free market from 1870 to 1960, where within that 90 year time period they became rich. Now compare Sweden’s growth back then to Sweden under a mixed economy, exactly, big difference.

    Norway, Sweden and the likes, countries that heavily depend upon the energy sector. Norway is a prime example, has a high GDP that comes right off the back of being the 5th biggest exporter of North Sea Oil in Western Europe, and what consequence does this have on Norway? Well, they are NOT productive and innovative outside of the energy sector, which is why Kopenberg Automative ONLY have 5% of their workforce working left in Norway, the rest of the 95% of their workers are off working in countries like China, why? Because they can’t afford to produce in Norway, that’s because their economy is NOT sustainable long term. The higher wages and high taxation with the big welfare state is unsustainable and in order to afford a BIG welfare state with high paid wages, they are forced to compensate in other areas of the economy. So where is Norway left when their North Sea oil comes crashing to an end? They’ll be forced to throw the big welfare state in the bin.

    The evidence that they have high costs is a signification in the economy that there is a scarcity, not that you would understand pricing of course, would you? No, because you don’t understand that when prices are high, that signifies there’s a scarcity. However when costs are low, there’s an abundance of resources. So what does the very high costs of living in Norway tell us? It tells us that outside of the energy sector they lack productivity. It’s one thing to have high employment levels and high paid wages where they heavily depend off the energy sector for that, but that certainly ain’t coming from the rest of their economy outside of that. That’s why you see Kopenberg Automative with only 5% workforce left in Norway, because they can’t afford to produce goods as they’re over taxed.

    Lack of productivity equates higher costs of the produce because the less you have in quantity, the less there is to go around. The high costs of living is telling you there’s a severe lack of productivity in their economy. A country heavily depending upon the energy sector is not an economy sustainable in the long term. As for British economic history, the vast majority of British society by the 1870s became rich, in fact Marxist historian critiques in their own words in the late 19th Century judging over a 100 year time period since the late 1700s to late 1800s could only complain about the “remaining pockets” of poverty, that’s because the vast majority of British society became wealthy. There’s never been a more fairer society than that.

    As for Scandinavian countries, they aren’t as Socialist as you like to claim they are, the definition of Social Market Economy gives that away, they are economies with strong private enterprise under the supervision of government. Look up every single one of them, “Norway Free Market”, “Denmark Free Market”, “Sweden Free Market” each one of these you will find they have strong free market principles. Sweden is the perfect example that annihilates your entire argument, why? Because Sweden has the same style of economy as Denmark and Norway today and why is this important? Because Sweden was a free market between 1870 to 1960 and in that 90 year time period, Sweden was far better off then than where they are today. Today Sweden is a country lacking in innovation and productivity and have high costs of living. But here’s what destroys you, right here:

    > Sweden did not become wealthy through social democracy, big government and a large welfare state. It developed economically by adopting free-market policies in the late 19th century and early 20th century. It also benefited from positive cultural norms, including a strong work ethic and high levels of trust.

    > As late as 1950, Swedish tax revenues were still only around 21 per cent of GDP. The policy shift towards a big state and higher taxes occurred mainly during the next thirty years, as taxes increased by almost one per cent of GDP annually

    > The rapid growth of the state in the late 1960s and 1970s led to a large decline in Sweden’s relative economic performance. In 1975, Sweden was the 4th richest industrialised country in terms of GDP per head. By 1993, it had fallen to 14th.

    > Big government had a devastating impact on entrepreneurship. After 1970, the establishment of new firms dropped significantly. Among the 100 firms with the highest revenues in Sweden in 2004, only two were entrepreneurial Swedish firms founded after 1970, compared with 21 founded before 1913.

    > High levels of equality and favourable social outcomes were evident before the creation of an extensive welfare state. Moreover, generous welfare policies have created numerous social problems, including high levels of dependency among certain groups.

    > Descendants of Swedes who migrated to the USA in the 19th century are characterised by favourable social outcomes, such as a low poverty rate and high employment, despite the less extensive welfare state in the USA. The average income of Americans with Swedish ancestry is over 50 per cent higher than Swedes in their native country.

    > Third World immigrants have been particularly badly affected by a combination of high welfare benefits and restrictive labour market regulations. In 2004, when the Swedish economy was performing strongly, the employment rate among immigrants from non- Western nations in Sweden was only 48 per cent.

    > Since the economic crisis of the early 1990s, Swedish governments have rolled back the state and introduced market reforms in sectors such as education, health and pensions. Economic freedom has increased in Sweden while it has declined in the UK and USA. Sweden’s relative economic performance has improved accordingly.

    Do I need to sit and quote it for you again, or are you blind? Here, allow me to quote it again for you, it said; “High levels of equality and favourable social outcomes were evident before the creation of an extensive welfare state.” There you go, your entire argument has just been destroyed proven and backed up by history.

    • Travelman

      Scott, I don’t like to interfere with Jonathan’s blog, but you really are pushing things here.

      You have a very unfortunate tone about you. You make a lot of points and it seems to me that some of them are of merit. The trouble is that I’m not especially interested in researching them further because of your appallingly belligerent approach. You start off by accusing Jonathan of being an ignoramus and finish by asking if he’s blind, and with lots of childish innuendo and insult in between. Although I have never met or spoken to Jonathan personally, I have read a great deal of his work, and can assure you that he is a very intelligent and convincing writer.

      You accuse well known economists of being stupid and illiterate. Just because you hold different opinions does not entitle you to denigrate them in some way, even if it is that you are a highly qualified economist. Are you highly qualified by the way? All in all your constant use of insult is not assisting your cause.

      I hope you will take my comment in the spirit it is intended; I think that if you could refine your method of discussion you would convince people that you make some good points.

      • Scott CJ McKelvie

        I’m sorry, but when it comes down to it, it really does show a great deal of ignorance on his behalf to sit there and question the free market existing. Turning to who? Ha-Joon Chang, another Thomas Piketty who doesn’t understand economics? I’m sorry, but whoever takes an economist like him seriously when he’s an advocate of central planning, that does prove he doesn’t understand economics, to understand why that makes someone economically illiterate you have to understand central planning and why it is a failure to begin with.

        Recorded history has proven it so clear that there has never once been a Socialist or Mixed economy that ever worked, not once. However someone claiming a free market has never existed, sorry, that’s ridiculous, is he suggesting that it was a mixed economy during the Industrial Revolution? Because if so, it’s inaccurate to make that assertion, considering the very fact that Socialism was a relatively new idea that came about in 1843 it wasn’t until the 1870s that you really began seeing Britain move away from the free market era and believe me, I have enough historical knowledge to debunk any nonsense claimed about the Industrial Revolution time period, enough to write a book on it to rip Marxists to shreds.

        His claims above proved my point, imagine questioning the fact the free market exists, what on earth you think Chile has been for the past 3 decades?

        • Scott, with all due respect, you have shown little understanding of the points being made, throughout the series of three posts.

          1) The ascription of an absolute label (x is a free market) to a continuum is difficult, if not categorically impossible. In philosophy, how we argue this (eg species problem, nominalism vs realism) is to say that these things (free markets) don’t ontologically (or ontically) exist, but exist conceptually in our minds as a pragmatic solution to this problem of fuzzy logic. But in the same way that species don’t technically exist because they are transitional, free markets don’t exist (unless in the purest sense of absolutely no government) because there is no agreed upon defined point at which a free market becomes a free market from mixed economy.

          You see, a mixed economy is easy to define in simple terms as it is a mixture of government and capitalistic input. This covers the whole continuum. Free market covers just the perfect end which has never existed in reality. Unless you can categorically say that on the continuum of intervention, free markets can be defined as those with less than 10% (whatever that would mean or however it would be calculated), then you are presented with this definitional problem. Shouting and calling people ignoramuses says nothing to dispel this issue.

          So all we can see is a market A is freer than market B. However, there is the issue of quantity vs quantity, which is to say the amount of regulation vs the type, and how much this affects the mix towards freedom.

          2) So given this quandary, it is interesting that you claim that no mixed economy has ever worked sustainably whilst free markets have. This is nonsense. It is nonsense because every economy is demonstrably mixed. As a basics website states:

          A mixed economy means that part of the economy is left to the free market, and part of it is run by the government.

          In reality most economies are mixed, with varying degrees of state intervention.

          Mixed economies start from the basis of allowing private enterprise to run most business. Then the governments intervene in certain areas of the economy, such as regulation, and spending money on public services.

          Most, as in all non communist economies.

          So you claim that all mixed economies have eventualyl failed, when ALL economies have failed, as you yourself have admitted, since all systems have booms and busts.

          3) Your contradiction aside, all examples you gave of successful free markets have CLEARLY been shown to be mixed economies (see my third post in the series). So none of your claims hold muster.

          • Scott CJ McKelvie

            I responded to your post accurately, thanks for proving you’re a liar. No need for me to respond further, not even going to read what you posted after reading that lies in your first paragraph.

          • Brilliant! Wow, what a cop out! Have failed to answer this time and time again, and then refuses.

            Unless you think this suffices:

            “However someone claiming a free market has never existed, sorry, that’s ridiculous, is he suggesting that it was a mixed economy during the Industrial Revolution?”

            Because, as I have shown you , the tariffs and protectionism of the textiles industry (as I pointed out in my third post) which drove the industrial revolution clearly shows. I listed a number of laws and tariffs introduced myself.

            But no, apparently, since it suits you, that still qualifies as free market, because you adopt the no true capitalism approach and cherry pick your way through history.

            And the fact that you can easily access lists of tariffs and laws in the US and in the UK goes to show that the two countries clearly had mixed economies. In fact, since you have failed to accurately define what a free market is, and since these two governments still existed, then it is hard to understand that which you claim.

            Yes there were ups and downs of different levels of government intervention, but to claim free market at the exclusion of mixed economy is a strain. There are different levels of mixed, moving towards different levels of freedom – but you are reticent to define what is actually a free as opposed to a not free economy. And what day did it move from being free to being mixed?

            And then, of course, you still haven’t defined your measure of success – how do you measure the brilliance of free market economies? You see, without the positive laws enacted in the British IR, you would still have terrible working conditions etc.

            In fact, without abolition, you would still have free market slavery.

          • Travelman

            You silly man. You have the makings of an argument then you totally spoil it with this kind of absurd comment.

          • Quite. Very frustrating. All I wanted him to do is deal adequately with the Sorites Paradox point, and simply give us his definition of a free market economy, and how his successful examples qualify, and do not qualify as mixed economies, and we would be getting somewhere.

            @scottcjmckelvie:disqus is obviously not used to decent debates as his technique belies a lack of sophistication. This is not how we do it in philosophy – you get laughed out of town because METHOD is as important as CONTENT. How I get from A to B is as important, or more so, than whether I believe B or not.

            For someone to hit and run like this shows a lack of robust engagement with the topic. They LISTEN to RESPOND, never LISTEN to LEARN.

      • Scott CJ McKelvie

        Wrong, I don’t hold different opinions, I have not only the recorded historical evidence to prove there’s never once been a mixed economy to ever sustain itself long term, but also the historical backed up evidence proving Socialism’s abysmal failure. One only needs to understand economics to know why Socialists are stupid.

        Where you think government gets the money from to pay the wages of the public sector? They have to steal it from the private sector in order to provide it to the public sector, that’s right, Capitalism 100% funds Socialism, if you had no Capitalism, you’d have no money. Or, you could pull off a Labour Party and print fiat currency out of thin air, for every £1 and $1 printed there is a 1+ debt added to the currency; the more you print, the more the currency devalues, shooting inflation up and the costs of living rise making society that every bit poorer. But that’s okay, because without Capitalism, Socialism has nothing.

        So what is Socialism? It’s an economic leech, a parasite, something that is a leech to Capitalism that does nothing for your economy. The laughable thing is, despite mountains of historical evidence proving the failure of mixed and Socialist economies, people hold the likes of Ha-Joon Chang up as some serious economic intellectual, really?

        So what does that say about him when he doesn’t understand why Central Planning is a failure?

        1. The government cannot know and does not know the needs and wants of people, it finds it impossible to do so.

        2. The government finds the economic calculation problem impossible, it cannot work out the costs for the life of them, thus the very reason why government wastes vast quantities of resources, misallocates resources leading to large waste of capital etc.

        Why does it do that? Because government through Central Planning destroys the price mechanism, that’s why. Only the MARKET can know the needs and wants of people, why? Because the Market is driven by consumer demand. When you walk into a shop and you freely choose what you wish to buy, little do you realise, the business has a computer system telling them what their most bought products were and least bought products, that information tells the company what the consumers want and what they don’t want. It tells them what they need to produce more of and also gives them the information of what the cost would be.

        The government doesn’t hold this information, it can’t, society is too complex to plan for, what does the government know about your needs and wants over that of the market? Remember, the market is driven by consumer demand, in other words it’s driven by consumers wants and needs, thus the market knows. Government can’t know this information, that’s why there were massive waiting lines for shoes in the late 1980s in the Soviet Union, because the government ended up producing more than 3 pairs of shoes and the shoes they produced did not match the tastes of the consumer.

        Typical prime historical example of central planning’s failure.

        You accuse well known economists of being stupid and illiterate. Just because you hold different opinions does not entitle you to denigrate them in some way, even if it is that you are a highly qualified economist. Are you highly qualified by the way? All in all your constant use of insult is not assisting your cause.

        I hope you will take my comment in the spirit it is intended; I think that if you could refine your method of discussion you would convince people that you make some good points.

      • Scott CJ McKelvie

        The reason you can tell Ha-Joon Chang doesn’t understand fundamental foundation economics is because he doesn’t understand supply and demand. Anyone who supports government being a central planner over that of the market is a person who doesn’t understand supply and demand, they fail to understand;

        > pricing
        > the economic calculation problem
        > supply and demand

        If you wish to learn why this is, it’s simple, here’s a basic foundational understanding of pricing, it’s toddlers economics proving why Ha-Joon Chang is an idiot;

        http://www.youtube.com/watch?v=tv80mR0mFVk

        • That you think he doesn’t understand that is quite telling really. You are merely on some ideological crusade without any desire to be rational or understanding.

      • Scott CJ McKelvie

        Notice how he explains the higher the price, the more scarce? Exactly, that’s why Norway has high costs of living. Let’s see Norway with its high paid wages and big welfare state when North Sea Oil dries up, right now they are the 5th biggest oil exporter in Western Europe, once that oil runs dry, that big welfare state will be going bye, bye, why? Because they have no other way to support it.

        The only way they can become more productive in society is reducing taxation, deregulating and opening up the market more, it means the end of the mixed economy. That’s why mixed economies could never sustain themselves long term. This is fundamental basic economics, it’s why Ha-Joon Chang cannot be taken seriously. The fact he would question Hong Kong being a free market alone is laughable. You can never take those economists seriously, especially when he defines the free market in black and white. That’s a bit like saying “Oh we don’t have Socialism because Socialism said this, that and the next thing on paper and needs to be exactly as it says here to be Socialism”. What’s the problem with that argument? The world isn’t black and white.

        • “Notice how he explains the higher the price, the more scarce? Exactly, that’s why Norway has high costs of living. Let’s see Norway with its high paid wages and big welfare state when North Sea Oil dries up, right now they are the 5th biggest oil exporter in Western Europe, once that oil runs dry, that big welfare state will be going bye, bye, why? Because they have no other way to support it.”

          You are making projections about the future without actually dealing with the fact that as it stands, with that successful mix, Norway is at the top of virtually all country standings for wellbeing, health and quality and standard of living. Deal with it.

          Bette rLife Index stats:

          http://www.oecdbetterlifeindex.org/countries/norway/

          • Scott CJ McKelvie

            Clearly you can’t deal with it, because Norway is a country with high costs of living, that indicates they have a severe lack of productivity in their economy, that’s what high prices signify, oh but I wouldn’t expect an economic illiterate like yourself to understand pricing. So what does that signify about Norway? That they have a lack of productivity, innovation and that they strongly depend upon natural resources, and yes the future is important, why? Because as stated, there is no such thing as mixed economy that is sustainable in the long term, they all fail. Norway is evidence of that, because what you’re spouting off about is Norway in the “SHORT TERM” that’s where you are making the mistake.

            Norway’s high GDP is coming right off the back of the energy sector, when that oil runs dry, where is Norway going to get the money from to sustain the big welfare state and the high tax rates with high paid wages? The answer is, they won’t sustain that, they’ll be forced to greatly reduce taxation, end the welfare state and if they want productivity, there is only one place it comes from, the private sector. So there goes Norway’s mixed economy down the toilet.

            So much for the smart arsed comment, you clearly don’t know the first thing about economics.

          • Firstly, you have not even established how low cost goods are prima facie good (which shouldn’t be too difficult, I grant), let alone in the context of one of the highest quality/wellbeing indices! Basically, I would take that for a greater society in other ways, if it was a genuine dichotomy.

            What do you mean, I don’t understand pricing! I have written essays on supply and demand, FFS! Get a grip man! Look, you think getting some kind of qualification from Mises gives you some bona fide right to an economic model. That’s like me getting a qualification from a creationist institute and then claiming that creationism is the best and greatest epistemological method, and look, I’m qualified to say so.

            You are spouting propaganda and seeking validation in your belief by going to the very source of those beliefs (as Ii think @disqus_XiKXUCKnOH:disqus has noted).

            In other words, try being more objective and prepared to see things from different angles. I don’t pretend to be absolutely right on everything I claim. I am happy to be wrong, because that is at the heart of improving knowledge. That is the scientific method: revision, revision.

            Please, some humility and civility.

            Back on point, though,

            Again, you claim no mixed economy can last sustainably, yet have also admitted that neither can or have free markets (since, you know, markets go up and down).

            Again, when it fails, you claim it is mixed, but when it succeeds, it is magically free, even though you fail to define how it is so in both cases.

            As the Encylopedia of Nations states:

            “Norway has a mixed economy with the government owning over 50% of domestic businesses and employing 35% of the workforce. Statownership is most dominant in the oil and mining sectors. In manufacturing, however, state ownership is down to about 10%. At considerable expense, the government provides subsidies for industry, agriculture, and outlying regions. About half of the total goes to agriculture.”

            http://www.nationsencyclopedia.com/Europe/Norway-ECONOMY.html

            It is, and always has been, a mixed economy. It even claims it has been hampered by strict immigration policy. Ha! Go figure.

            Unless you can define when it became free and relinquished that, you are making bald assertions.

            Over-dependency on oil is what has seemed to cause high prices.

            Forbes also describes it as “a prosperous mixed economy, with a vibrant private sector, a large state sector, and an extensive social safety net.”

            Now, it’s been prosperous for some time. So how does this not qualify as a sustainable and successful mixed economy?

            As wiki states:

            “The economy of Norway is a developed mixed economy with state-ownership in strategic areas of the economy. Although sensitive to global business cycles, the economy of Norway has shown robust growth since the start of the industrial era.”

            o it looks pretty long-term successful to me!

            Or loosely translated, you make baseless assertions with nothing to back them up.

            So of course Norway will have to move from a resource/product based economy to a services economy, but that’s hardly anything to do with free vs mixed economies. That is just the nature of the evolution of an economy. It is what the UK has moved through, and where Norway will have to go.

  • Scott CJ McKelvie

    Oh and before I forget, I just thought I would add this:

    Moving Right

    “The Social Democrats haven’t only joined the free-market consensus, but seem to attack the current government from the right, pushing for a better business environment. Gone are demands for the restoration of social benefits. Opinion polls have rewarded the Social Democrats for their right turn with sharply improved ratings.

    Sweden is still offering good social welfare, but more efficiently and sensibly and increasingly through the private sector. This model of falling taxes and public spending is rapidly proliferating from the north of Europe toward the south, and the northern Europeans have little tolerance for the statist conservatism and fiscal negligence of Southern Europe. Nor do the Swedes understand the fiscal irresponsibility of the U.S., while they still admire American research and innovation.”
    _________________________________________________________

    Oh dear, remind me again how long the Socialist government last year lasted in Sweden when it got voted in? Yes that’s correct, it got kicked out in less than one month. Oh and eh, one more thing, an historical fact, yes you will like this historical fact. The historical fact is, there has never once been a mixed economy that ever sustained itself long term, which is why when Norway’s Oil runs dry, you’ll be seeing them down spiralling. In other words, wave bye bye to their big welfare state and how are they going to afford the high paid wages then? After all, they heavily depend upon their energy sector for where their LARGE GDP comes from, that’s right, they heavily depend upon the North Sea Oil for their GDP.

    So when that comes to a crashing end, just watch their high paid wages and welfare state drop, where else they going to get the money from, hmm? Scotch-mist?

    Exactly, the only way they can do that is opening up their economy, you’ve just been destroyed in a short space of time.

  • josh

    I appreciate the detailed work you’ve shown to make your case, but I think you are spending way too much time focusing on someone who’s clearly an idiot. (Although unfortunately representative of a common strain of thought in the US.)

    • He does seem to very well represent that, though @scottcjmckelvie:disqus is actually a Scot.

      • josh

        Yes, I gathered. It’s an acute problem here but clearly not purely endemic.

    • Scott CJ McKelvie

      Yes, I’m clearly an idiot, we libertarians, especially all those libertarians across the United States who support the free market are the idiots, yes, that’s why Sweden with a strong free market economy from 1870 to 1960 proved their most successful economic time period in their history. But from 1960 onwards, how successful again was their same economy as Norway today? Oh yes, it plunged them into an economic crisis son, why? Because Sweden never had the natural resources Norway has, that’s right, that signifies Norway is heavily dependent upon natural resources. It means when Norway’s big oil comes crashing to an end, so does the so called mixed economy, have that for your 2 like buttons son, how you like them apples? You don’t like them because it’s living proof that there has NEVER once been a mixed economy to ever sustain itself in the long term. Every mixed economy in history has failed, where’s the evidence of that? Great Britain in the 20th Century, there’s the evidence of it.

      • josh

        I tend to think of strong libertarians in general as cultists, blinded by certain articles of faith from a more realistic picture of the world. I called you an idiot based on your style of argumentation and comment. Great Britain is a failed economy? And that’s proof for every mixed economy in history? Norway has oil, therefore…?

        How’s this: the economy is complicated, all national economies are mixed and extrapolating anything from a couple examples is likely to be wrong and to ignore important variables. Believing that ‘the free market’ is a magic economic panacea is like believing that a ‘natural’ diet will cure all diseases.

      • No one is saying that freeing up trade is a bad thing. You just live in the extreme. Again, I wonder how a truly free market would deal with ISIS!

        What;s interesting about Sweden is during the second industrialisation of the late 19th century, the joint stock market, which requires regulation, played a huge role. Other factors, as according to this Swedish site, involved in the success at the time include:

        Several additional factors created the breeding grounds for Sweden’s rapid economic growth and eased the first steps toward industrialization. They included

        large scale investments in Swedish infrastructure, mainly railroads, financed by foreign capital,

        rationalizations of agricultural methods

        rapid population growth

        urban growth and technological improvements, such as expansion of the telegraph system,

        the spread of daily press, and

        the 1842 public school reform.

        In ther words, we see the fingerprints of directed government together with free market enterprise – exactly what I have been espousing.
        http://www.ekonomifakta.se/en/Swedish-economic-history/Agricultural-toward-Industrial/

        Then we saw the golden years of the “Swedish Model” – characteristiclly mixed:

        The Swedish Model

        The central feature of the so-called “Swedish model” was the historical compromise between a social democratic ruled state and a privately owned industrial sector. The compromise constituted a middle way between unrestricted capitalism and a centrally planned economy. The ownership of most of the large companies, except for the state owned monopolies, stayed private and expanded side by side with the public sector.

        The “Swedish model “can be summarized as follows:

        a large, privately owned industrial sector,

        a large public sector financed by taxes,

        a large trade union movement,

        the state plays an active role in labour market policies, and

        the ambition is to achieve an even distribution of income and wealth.

        Over the next three decades, the terms “The Middle Way” and “The Swedish model” came to be well-known trademarks for the Swedish economy.

        In the beginning, the “Swedish model” appeared to work very well. From the early 1950s to the late 1960s, the annual growth of the entire world economy was between four and five per cent and Sweden was one of the most successful Western nations of this era. Between 1960 and 1965, the economy reached its peak with a yearly GPD growth average of 5.3 per cent and a productivity growth average of 5.6 per cent per year.

        http://www.ekonomifakta.se/en/Swedish-economic-history/From-War-to-the-Swedish-Model/

        It would be nice for you to substantiate your claims.

        You paint me as a Marxist, which I clearly am not, and then fail to give good solid examples of anything which can be successfully described as a free market, chalking up your successes to free markets which are clearly mixed!

  • Travelman

    I’ve read your 3 essays properly now and have to say they are very convincing. I’m afraid Scotty fares even more poorly than I initially appreciated, as I assumed at first that he was making some good points. Now I realise that he’s just an angry guy with a relatively poor understanding of a particular approach to one part of economic theory. He clearly has an enormous chip on his shoulder that’s obscuring his capacity to understand both your arguments and the gross contradictions of his own.

    It is plainly absurd to claim that the Industrial Revolution was a time of anything other than gross protectionism on the part of the UK. Free? You’ve got to be joking. One of the few things I remember from my history lessons was the repeal of the Corn Laws in 1846, and they were just one of the many protectionist measures in place. So he has his facts completely wrong there.

    I like the argument that there’s actually no such thing as completely free trade, that even moral constraints serve as regulation. Even now in the EU we don’t really have free economic trade between countries. For example, because the UK still uses sterling, any transaction with a eurozone country involves currency exchange considerations (in addition to language). Potential buyers of Greek goods may be discouraged by the thought of what happens if they leave the euro, or how strong is any guarantee a Greek company might offer. So I am mightily sold now on the realisation that there is no such thing as free trade.

    As for the varying successes of the countries you outlined and their differing economic models, the main point that came through was just how constrained each one was, or rather subject to regulation. And thinking about it that’s the way it has to be. Every country is different so has to do what it thinks best for its economy. This very thought process, by definition, means there will be some control on trade. Indeed, it would be remiss of any government not to monitor its trade in some way and, by so doing, it is controlling it even when it’s not, if that makes sense? Active laissez-faire perhaps describes the nearest we might have to real free trade, and then missing by a long way.

    As for Scotty, I’m afraid he needs to go away and learn some social skills, together with a little humility (and economics).

    • Brent Irving

      I would think it would seem quite obvious that you are attempting to have a rational conversation with a market fundamentalist, and very similar to trying to do this with a religious fundamentalist, often, if you try and persist, it ends up feeling like you were banging your head against the wall.

      • Indeed!. My head hurts.

      • Scott CJ McKelvie

        Wow, you really do have an ignorant following Jonathan, your’e the type of ignoramus who would write such fallacious bullcrap and you get a following for it. Such as your own post here, I mean check this idiot out, this idiot got 2 likes for being stupid and called rational thinking people like me a fundamentalist? I’m sorry, the fundamentalists are not the ones supporting Capitalism, we support Capitalism because the historical evidence is so strongly against you lot and so strongly on our side.

        You see, stupid people like Brent are the type of idiots who know nothing about history, where’s the evidence of that? His best example of a mixed economy is Norway, why is that a problem? Because Norway as we know has high costs of living, VERY high costs of living, why? Because high prices signify scarcity in the market, that’s why! that’s how you can tell Brent is an economic degenerate. What that tells us is, Norway’s high GDP is coming off the back of being the 5th biggest oil exporter in Western Europe, meaning they’re heavily dependent on their oil. Once that runs dry, wave bye, bye to the welfare state and high tax rates, because the only place they’ll get money after that is binning the mixed economy and driving open to a free market.

        After all, where else are they going to get the money from?

        So much for the mixed economy being a success!

        • That attitude is nothing short of exceptionally immature. Please be civil here.

          You keep talking about once they are dry, but they are not yet, and they are a successful mixed economy. Can they be when the oil runs dry? Maybe yes, maybe no. But claiming to know the future and claim it for free marketism is hilarious. Just wow.

      • Scott CJ McKelvie

        In fact it was that much of a success, Sweden used that same mixed economy as Norway and it obliterated their wealth, completely destroyed their economy, so much so that Sweden were forced to open up their economy more by deregulating, privatising in order to lift their economy back up.

        But the best part of all is, your myth about Scandinavian countries is spelled out right here: http://www.libsdebunked.com/socialism/scandinavian-socialism-argument/ proving just how much mince you talk.

        • “completely destroyed their economy”

          Has their economy ever been completely destroyed are are you being hyperbolically insane?

          The latter, methinks.

          In fact, the 1990s which saw the end of the original Swedish Model has seen the advent of a reformed version of that.

          You see, economics is much like evolution. Survivors adapt to contexts and environments. It is not one ideology fits all.

          • Scott CJ McKelvie

            Their economy was in the face of an economic crisis by the beginning of the 90s, their economy was in a severe mess because of your oxymoron Social Democracy, that’s right, the same style of economy as that of Norway tore the backside out of their economy, they stagnated and ended up in the face of a crisis. Remember, Sweden doesn’t have the natural resources Norway has.

            In other words, your entire pipe dream of Norway’s success is coming right off the back of the North Sea oil, once that runs dry the true face of your mixed economy comes crashing down. High prices signify scarcity, can’t even argue with that fact, because it’s a fact. It proves they have a lack of productivity outside the energy sector, that’s not a positive on their economy, that’s a big negative.

    • I think one main point is that to have a proper free market economy, you can barely even have a government, and thus borders. Countries are then a redundant idea. As soon as you have a government, you have acting in the best interest of that entity, which gets in the way of true free market ideals.

      However, such a thing is a pipe dream. How would they, for example, really deal with something like ISIS?

      Such nebulous lack of organisation would fail to deal with any such threat in a cogent manner.

      • Travelman

        I think friend Scotty would have been better trying to argue a more limited form of free market (if that isn’t slightly oxymoronic). So concede that no trade can possibly be remotely truly free, but that we can remove certain traditional, imposed, restrictions. This would include tariffs, import quotas, indeed all artificial protectionism. Currencies would be left to fluctuate but actually that brings on a whole new paradox, that’s occurred to me. Currency exchange mechanisms will reflect the relative trading abilities, and general economic health, of respective countries so ‘true’ free markets are being fettered by the exchange mechanism. So currencies should somehow be pegged to allow free trade. But if you peg the currency…..

        I wonder if Scotty still reads this?

        • I doubt it!

          What is fascinating is that in the stats don’t back up free market economics. In the post war period, when to support the welfare state, high taxation on the rich was imposed in a reversal of trickle down economics. This brought on, funnily enough, the golden age of capitalism. Before this time, economies grew at 1-1.5%, during at 2-3% in the US and UK, 4-5% in Western Europe and 8% in Japan. They have never managed to grow as fast. When this growth slowed (70s), free marketeers blamed it on the capitalist class (rich) not having enough money to invest.

          You see, what is interesting is that if you give money to poor people, they spend it. As a proportion of income, poor spend more, so they are good for stimulating the economy. FMers think that you should give it to the rich/capitalist class so they can invest. In reality, you probably need both.

          The problem is that you start cutting taxes to the rich you empirically widen the income inequality gap. Big time. ILO or OECD stats easily show this.

          The EPI showed that between 1979 and 2006 in the US the top 1% doubled their share of national income from 10% to 22.9%, with the top 0.1% growing from 3.5% in 79 to 11.6% in 2006.

          Now, @scottcjmckelvie:disqus will blame this on corporatism, which no doubt, as described, is a problem. However, many of the free market mechanisms employed led to this. In order to pragmatically stop this from happening, you need governments to move away from such trickle down economics.

          During the 60s and 70s high rich tax er, the world economy as according to the World Bank grew at over 3%. Since the 80s and the advent of neolibrral ideals, it has been growing at 1.4%.

          Again, though,, there are many ways to evaluate the success of societies: health, wellbeing, education, equality of opportunity etc.

          • Scott CJ McKelvie

            You really are ignorant, why? Because Capitalism in Britain ended in the 1870s. What was that you were saying about post war period? Yes exactly, you haven’t a bloody clue about history or economics, why? Because that post war period was bloody Socialist, it was government directed, that’s what defines Socialism.

            A long post of stats yet you don’t even understand the definition of Socialism.

          • “Capitalism in Britain ended in the 1870s. ”

            As this is an absolute statement, please back it up.

            When exactly did it end? What particular thing caused it to end. What defined its capitalism which no longer existed after that?

            You seem so certain of yourself, it’s almost funny.

          • Scott CJ McKelvie

            You ask me to back that up?

            Capitalism is not some merger between state and corporations, nor is Capitalism government directed, the moment you give government the power to control and direct the economy, that’s Socialism. Britain left Individualism behind in the 1870s and properly moved right on the road to Collectivism, Capitalism left Britain behind in the late 19th Century.

          • This is your ridiculously confused narrative. You claim in absolutist terms that Britain was capitalist, then claim capitalism is something in which government has no power to control and direct the economy, but in no point in British history did the UK step out of being in the position. The government has always existed, and in the time you specify, empirically carried out many regulatory interventions, from bounties and protectionist tariffs etc, to regulation of work practices.

            You seem very confused.

        • Scott CJ McKelvie

          What makes people such as yourself so ignorant is that you have absolutely no clue about the Industrial Revolution, the evidence is held within the years 1760 to 1830, why? There was no government intervention, the government didn’t pick upon the industrial development until late after 1830, after the first Industrial Revolution. Why is this important to note? Because you lot claimed it was all government who was the cause of improvements in living standards, wealth, life expectancy and so on, that’s why it’s important, because by the 1830s thanks to Capitalism, Britain changed the face of much of the world over.

          Before the Industrial Revolution began, all across Asia and Europe, there was a very high death rate, the life expectancy of children was the age of 9 and adults the age of 40; diseases of malnutrition was all too common in that time period, people dying of scurvy etc and from 1760 to 1830, Britain drastically improved life expectancy, living standards, during a time period when government had no intervention. It’s proof you haven’t the slightest clue about economics or history, especially when the factories you lot moan about paid substantially more than the farms they worked on. I’ll tell you what the problem is with you type of people? You judge the Industrial Revolution by today’s standards, I mean how stupid can one be? How idiotic can someone get?

          If you want to compare the Industrial Revolution, judge it to what life was like before it, not what life was like AFTER it. And why is the Industrial Revolution an important time period to look at? Because the vast majority of British society by the 1870s became rich, debunking all your left-wing economic degenerate fairy tales of how mixed economies are something fabulous, really?

          Then explain to me why Sweden during their free market years between 1870 to 1960 had very high levels of equality before the formation of their big welfare state?

          Exactly, that’ll shut your pie hole right up. Oh and Sweden became the 4th richest nation per capita GDP in the world by the 1960s.

          Take a good guess what wiped their arse with their economy? Yes that’s right, your utopia of a mixed economy.

          • Travelman

            I used to know someone about whom we said ‘how do you know such and such is lying?’ Answer because his mouth is moving. Do you get this? I might say I don’t say you are lying, just mightily deluded. Anybody who thinks that liberal debunking link you posted stands the slightest scrutiny must be.

            Can I suggest you go and peddle your rubbish somewhere where your low educational level is appreciated; you are way out of your depth here.

          • Scott CJ McKelvie

            Yeah, me and the Mises Institute are the ones deluded, which is why you can’t point out one single economy that has ever worked being a mixed economy in world recorded history.

          • Travelman

            Yes, you are right in your first sentence, well the first part anyhow.

            Your second point has been covered by Jonathan at length, and you are not rebutting him. What you are doing is effectively ignoring everything he says, then revert to your original claim.

            However, let me tie you down on one issue you seem to have consistently tried to avoid. The period known as the Industrial Revolution is perhaps the period of the greatest protectionism this country has ever known, yet somehow you insist that it was a time of completely free trade. This is a factual matter, not opinion. So please explain how you feel that the numerous protectionist laws that existed at the time amount to free trade. Please note I am genuinely interested in how you have come to your conclusion.

          • This is hilarious.

            OK, so you admit the scandinavian economies are mixed, and when I point out their continued success, you claim that they are doomed to failure.

            In other words, you try to invalidate the claim by appealing to an unknown future!

            Wow, now that IS a fallacy.

            And you have NEVER supplied a working definition for an actual free market economy or an example of a sustainably working one.

          • Scott CJ McKelvie

            Oh it’s hilarious is it? Scandinavian countries are successful?

            Where?

          • Scott CJ McKelvie

            And that is why Great Britain is going no where, because your stupidity and ignorance to ignore the very fact that Norway has a severe lack of productivity OUTSIDE of the energy sector is evidence that when oil runs dry, NORWAY will be forced into ditching the welfare state, their high paid wages will come to an abrupt end and so will the high taxation, why? There is no other way of them getting money.

            Sweden’s not an economic success, it’s a fucking mess heading into decline.

          • “Then explain to me why Sweden during their free market years between 1870 to 1960”

            You have already been shown that this is empirically false, ESPECIALLY as you refuse to define the exact characteristics thereof. And they must be exact, because you use absolutist terminology and firm claims, with no wriggle room.

            So, put your money where your mouth is and do some work to defend your claims.

          • Scott CJ McKelvie

            No I haven’t, because your information above proved you don’t understand history as Sweden was a strong free market between 1870 to 1960, that shows you know nothing.

          • Liberalisation of some of the laws was of course important. I am not against capitalism and freedom of regulation, for goodness sake. When it is good and appropriate, it is, well, good and appropriate. Sweden succeeded by repealing strict laws, and together with important governmental intervention, flourished:

            “There was significant agricultural saving,
            an important governmental borrowing abroad and investments in
            industry and agriculture…

            It is obvious
            from Figure 2.3 that there was an important inflow of foreign
            capital to Sweden during the industrialization period. The
            borrowing from abroad, mainly from France, was undertaken
            primarily by the government (Sundbom, 1944). Foreign capital
            played a crucial role in Sweden’s economic development process.
            Sweden was able to build “cities, railways and factories at
            the same time” (Gardlund, 1942:194). Investment in the infrastructure
            (housing and transportation) made up over 50 percent
            of investments in building and construction during the
            prewar period. The housing share fluctuated between 30 and
            40 percent and the transportation share was around 20 percent.”

            http://www.diva-portal.org/smash/get/diva2:221850/FULLTEXT01.pdf

            And actually, the 1870s saw some economic unrest (see An Economic History of Sweden, Magnusson, Routledge).

            But again, you paint an incorrect false dichotomy. I am NOT anti-capitalism. Capitalism works. But pure free market ideology is a pipe dream which is inherently unworkable. I argue for the best of both worlds. And besides, no free market can handle externalities.

          • Scott CJ McKelvie

            You basically are an anti-Capitalist, can see that by your support of the mixed economy, that in itself is anti-Capitalist, why? Because it’s government intervention that gives rise to Monopolies. That’s precisely what you support.

            As for claiming government had something to do with the economic growth of Sweden? What complete and utter bullshit, so where was the economic growth between 1500s to the 1700s? Where was the economic growth under full fledged pro Socialist economies? After all you’re saying Socialism’s a benefit to the economy, so tell me where Socialism was ever a success? If government had something to do with the economic growth there would’ve been economic growth before the Industrial Revolution, was there? NO!

          • Scott CJ McKelvie

            What is hilarious is the fact you expect me to spend my time when I have video to get done for my channel, video to get done for my documentary finalised for Monday, portfolio work for my photography, with all of this work on my hand, you think I’m going to look at some fallacious silly argument.

            What’s the problem with your argument on the time period before the Industrial Revolution? The problem with your argument is that the vast population of the world were dying of starvation, there was periodic famines across the world, there was a very high death rate across the world, but most importantly that so called government interference you banged off about existed throughout the 1500s and 1600s and early 1700s. But did you see economic growth in that time period? NO, you never saw ANY improvements at all.

            But what makes you a lunatic is the fact that you ignore the Industrial Revolution occurred in Great Britain, a land with far less natural resources and manpower to that of so many other nations across the world.

            Was government the cause of the Industrial Revolution? NO!
            Was manpower the cause of the Industrial Revolution? NO! other countries had far more, and if government was the cause why Great Britain, why not other countries? And what about the Natural Resources? After all, Britain had far less than any other nation.

            So there’s your entire argument down the toilet, because judging by your logic SON, other nations better placed off than Britain would’ve had an Industrial Revolution, did they? NO!

            What you got to say to that, smart arse?

          • Scott CJ McKelvie

            You see that’s what you ignore, the very fact that the world over was in destitute poverty, with a very high death rate, dying of starvation. A world suffering from malnourishment, and you talk to me about Government, being the saviour son? So if it was so important son, why did the Industrial Revolution happen in Great Britain, why not France? Why not Italy? Why not Spain? Why not Germany? Why not the United States? Why not the Asian countries? Why not India?

            After all, all of those countries had far more natural resources than what Britain could have ever have dreamed of. They also had more manpower than Britain, so you tell me why those countries with more manpower, more natural resources, governments never had the Industrial Revolution and why Britain did.

            Because by your logic son, every other nation would have, they all had governments.

          • Scott CJ McKelvie

            Put forward my argument son?

            I already done so right here:
            http://mises.org/library/industrial-revolution-part-one

            It’s time you go and educate yourself, you’re that bloody ignorant you can’t even see how fallacious your silly argument is about government. If government was so special, why was the Industrial Revolution in Great Britain?

            And explain why the guy here http://mises.org/library/industrial-revolution-part-one tells you that the government did not become aware of Industrial development till after 1830?

            Exactly!
            If government was that special son, the Industrial Revolution would’ve began elsewhere in the world. You telling me other countries did not have governments? You telling me that the Industrial Revolutions success was because of a government?

            Then in that case, explain why there was nothing coming from other countries then and why there was destitute poverty for hundreds of years leading up to 1760?

            Why were the people living in extreme poverty for centuries before the Industrial Revolution?

    • Scott CJ McKelvie

      Yes, they’re convincing to you because you don’t understand history and economics, that’s why it is very convincing you to you. It’s not hard to convince a person who has no clue about economics or history. I mean you point out to me where in recorded history where you have ever seen a mixed economy sustain itself in the long term, show me one. Oh that’s right, you can’t, because your best example is Norway and what is Norway? A country that is on the verge of losing its big welfare state, high paid wages, and high tax rates once the oil boom comes crashing to an end. Oh dear, but I thought they were sustainable in the long term? Oh what a major success that was. Care to remind me what type of economy Britain has had for the past 100 years? Yes that’s right, a mixed economy, oh what a failure that’s been. Yeah, that’s right, £1.4 trillion debt, oh what a success! Where’s this economic mixed economy success son? huh?

      Oh is that Sweden? Yeah? Funny that is, from 1870 to 1960 proved Sweden’s most successful economic time period in their history, why is that important? Because that was when they lived under a free market economy and the best part of all is, they turned to your Norway “Social Market Economy” booming success, and what did that do to Sweden’s economy? It annihilated them. Completely obliterated their economy. In other words, the only reason Norway has lasted with it is because of the energy sector, that’s not the sign of economic success son, that’s the sign of a nation that heavily depends upon natural resources to keep them up. So you point out to me the success in that please, go on, after all they’re the best example of a mixed economy you can throw at me.

      Meanwhile Free Market Hong Kong has been prospering since the early 1960s with what? With no natural resources. And who did he turn to for information on the free market? Yeah that’s right, to someone similar in stature to that of Thomas Piketty, a person such as Ha-Joon Chang who supports economic central planning, and what does that tell us? It tells us he doesn’t understand the very basics of supply and demand, pricing and why central planning is an abysmal failure. That’s who you take information from on the economy?

      Says it all.

      • You apparently have not read my pieces because all of your claims above have been dismantled.

      • On the Skepticism of Free Market Economics (part 1)
        On the Skepticism of Free Market Economics (part 2) – No True Capitalism
        On the Skepticism of Free Market Economics (part 3): Free market success stories

        As linked in the OP. Check the third one.

        • Scott CJ McKelvie

          What’s the point? You don’t even understand basic economics, one only needs to skim through and read what you’re saying to see this for themselves. I’ve already ridiculed you on your best example of Norway on a mixed economy, as there has never once been a sustainable mixed economy in history. Then there’s your three links you posted at the foot of the entire blog post, take the title for example ‘No True Capitalism’, it’s that type of nonsense that gets you no where, because to paint this world in black and white as well as economics is fallacious within itself, but sure, I’ll look at the nonsense posted in the third one.

          • FFS, you haven’t even read the content of my criticisms of you!?

            Man, get a grip, go read, come back then.

          • “it’s that type of nonsense that gets you no where, because to paint this world in black and white as well as economics is fallacious ”

            But that s the point – that is what YOU are doing! And that s what I am calling you out on.

          • Scott CJ McKelvie

            You aren’t calling me out on anything, I think you just proved that one by saying the Industrial Revolution was strongly protectionist between 1760 to 1830 that alone proved the garbage you spout, and the historical evidence of Sweden from 1870 to 1960 that wasn’t strongly protectionist, Sweden had a relatively very small and limited government for most of that time period, again proving what garbage you feed out to people.

        • Scott CJ McKelvie

          There you go, here’s the proof in this one paragraph that tears apart your entire blog post on part 3 of the free market proving you don’t understand anything at all of what you’re even talking about, you said:

          “And, indeed, the so-called free market success stories are quite ironically stories which involve protectionism and high tariffs as well as state-directed encouragement and the use of state-owned enterprises (SOEs).”

          That paragraph more or less says it all really, it was the same argument they tried to pose on Milton Friedman with regards to Singapore. The argument is fallacious because as history has proven, the free market success stories have come off the back of strong economic freedom, such as Hong Kong. That didn’t come off the back of any state owned enterprises, so it makes me question where you pulled that nonsense from. And where is that protectionism in Hong Kong? No where, nor is there high tariffs. Those mixed economies like Norway, Sweden, Denmark who have strong free market principles are not free markets, they’re economies destined for failure in the long term, so you please point out the free market to me, go on, name it.

          Because there are only few in the world today. As for Britain, there was no government intervention between 1760 to 1830 yet Britain drastically improved and changed the face of the world in that 70 to 80 year time period. But that’s right, we’ll ignore that fact. Just like we’ll ignore the fact there’s never once been a mixed economy that ever sustained itself in recorded history.

          You proved you don’t understand the Industrial Revolution history when you said this:

          “This needs unpicking because he seems to have little idea what he is talking about. The US in the 19th century and Britain in the Industrial Revolution (IR) were exceptionally protectionist”

          Protectionist? Government didn’t start intervention till after 1830.
          That’ll shut you right up.

          • Travelman

            “Protectionist? Government didn’t start intervention till after 1830.”

            How about the Corn Laws, introduced in 1689, and not repealed until 1846 (there are loads more outlined by Jonathan, but I’m familiar with the Corn Laws because they were one of things I remember from my O level history)?

            I’ve called you out on this in a reply you made to one of my posts, but you really are annoying in your refusal to engage.

          • Scott CJ McKelvie

            How about the Industrial Revolution didn’t start until 1760?

          • Travelman

            Which was after 1689. It was protectionist during the dates you refer to and then some.

          • Scott CJ McKelvie

            No it wasn’t, it was not protectionist between 1760 to 1830. That was documented here: http://mises.org/library/industrial-revolution-part-one

          • Travelman

            Well I’ve done what you probably haven’t, I’ve listened to the link you provide (incidentally it’s the same link you provide below in respect of a different point) and analysed it. Starting point for me is that the speaker is appallingly amateur, stammering and stuttering all the time. More to the point, his arguments are irrelevant to what you are saying (okay, I only listened to part 1, but hey that’s what you posted!), and are largely a history lesson, and a very biased and inaccurate one at that.

            I don’t know what to say. You have no desire to engage in serious points and don’t understand that you are making a total fool of yourself. Oh well, it takes all sorts.

          • “From 1797–1819 British cotton textile manufacturers were still unable to compete. In 1815, the value of all Indian cotton goods coming into England was 1.3 million pounds (from 1741–1750, it had stood at 1.2 million points annually, at a time when domestic cotton textile competition was still largely non-existent). British producers asked for and obtained tariff increases on Indian cottons on 7 separate occasions in the years from 1797–1819…

            British textile goods probably became internationally competitive by the mid 1820s (when tariffs were still in place). The British protectionism that lasted until the 1820s allowed British goods to become competitive.

            It is estimated that by 1820, 46% of Britain’s exports were cotton textile goods. These exports displaced India’s textile exports in world markets. Thus Britain itself had an “export-led” model of economic growth even in the early stages of the industrial revolution, by taking away the market share of India through technological innovation allowed by protectionism and tariffs.

            Yet, according to classical free trade theory, the British should not have bothered to develop a textile manufacturing industry, if they were able get Indian cotton textile goods at a price 50 to 60% lower than domestic textiles. India did have a comparative advantage in production of cotton textiles even around 1810 when the British textile industry was developing. If real free trade had been implemented, the protective tariff would have been abolished and the market for British-made textiles at home would have collapsed. There would never have been a later opportunity to compete internationally.

            Yet nobody can seriously deny that having a large productive textile industry was the foundation of Britain’s industrial revolution and in the long run good for the economy.

            This is not the whole picture either, because from 1757 the British East Indian company won control of Bengal, the centre of Indian textile manufacturing.

            The Indian states could not impose retaliatory tariffs on British goods in the early 19th century in response to British protectionism, because they were effectively ruled by Britain through the East Indian Company.

            After the successful decades of tariff protection and shelter from competition, British goods succeeded in global markets at the expense of India’s exports. Bengal and the textile manufacturers were ruined and the resultant de-industrialization impoverished the previously prosperous towns.

            Contemporary 19th-century British advocates of free trade actually noticed this state of affairs and criticised it. Robert Montgomery Martin was a historian of Irish descent and wrote about twenty-six books on history and the British empire (including a History of the British Colonies). In 1844 he was Treasurer of Hong Kong. He appears to have been a typical liberal and free trader. I quote from the Oxford Dictionary of National Biography:

            Martin, Robert Montgomery (1800–1868), author and civil servant … His life was dominated by a self-appointed task—the study of the British empire, which Martin saw in terms of a vast free-trade area of new territories in allegiance to the British crown …. [sc. he wrote a] five-volume History of the British Colonies, followed by such related works as Statistics of the Colonies of the British Empire (1839).
            http://www.oxforddnb.com/view/article/18208, accessed 16 Feb 2009.Robert Montgomery Martin was called upon to give evidence in 1840 during a British parliamentary inquiry about India:

            “[Before a British Parliamentary Committee in 1840] Montgomery Martin stated that he . . . was convinced that an outrage had been committed ‘by reason of the outcry for free trade on the part of England without permitting India a free trade herself.’ After supplying statistical data of Indian textile exports to Great Britain, he pointed out that between 1815–1832 prohibitive duties ranging from 10 to 20, 30, 50, 100 and 1,000 per cent were levied on articles from India. … ‘Had this not been the case,’ wrote Horace Wilson in his 1826 History of British India, ‘the mills of Paisley and Manchester would have been stopped in their outset, and could scarcely have been again set in motion, even by the power of steam. They were created by the sacrifice of Indian manufacture. Had India been independent, she could have retaliated, would have imposed prohibitive duties on British goods and thus have preserved her own productive industry from annihilation. This act of self-defence was not permitted her’” (Clairmonte 1960: 86-87).Thus near-contemporary British apostles of free trade were the first to notice the double standard. They were appalled at the hypocrisy of British protectionism and the destruction of India’s prosperous cities built on textile exports.

            But they of course failed to notice that the protectionism had been a major cause of Britain’s industrial revolution and that, without it, the UK would have been much poorer. In other words, the success of the cotton textile industry in the early industrial revolution in Britain was an example of infant industry protectionism, or modern import substitution industrialization (ISI).”

          • Scott CJ McKelvie

            http://socialdemocracy21stcentury.blogspot.co.uk/2010/06/early-british-industrial-revolution-and.html

            That’s where you pulled that from, and do you know what the definition of Social Democracy is? The definition of Social Democracy is the exact same definition of Socialism. The goal of Social Democracy is to eradicate Capitalism completely and usher in Socialism, that’s why Venezuela from 1999 to 2013 dropped 100 places on the freedom index as a result of Social Democracy. It’s the path towards Communism and that’s how much bullshit you post. You think Keynesian economics that has destroyed our economy fro the past 100 years, the same Keynesian economist that drove our currency into the ground is some idealist way forward.

            Your argument of the Industrial Revolution alone is fallacious, because yet again, by your logic, if government had something to do with the success of the Industrial Revolution, where was the economic growth before 1760? Where was that growth in any other country? There wasn’t.

            Now let’s destroy you on Tariff’s

            WHO’S “PROTECTED” BY TARIFFS?

            A mere recital of the economic policies of governments all over the world is calculated to cause any serious student of economics to throw up his hands in despair. What possible point can there be, he is likely to ask, in discussing refinements and advances in economic theory, when popular thought and the actual policies of governments, certainly in everything connected with international relations, have not yet caught up with Adam Smith? For present-day tariff and trade policies are not only as bad as those in the seventeenth and eighteenth centuries, but incomparably worse. The real reasons for those tariffs and other trade barriers are the same, and the pretended reasons are also the same.

            In the century and three-quarters since The Wealth of Nations appeared, the case for free trade has been stated thousands of times, but perhaps never with more direct simplicity and force than it was stated in that volume. In general Smith rested his case on one fundamental proposition: “In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest.” “The proposition is so very manifest,” Smith continued, “that it seems ridiculous to take any pains to prove it; nor could it ever have been called in question, had not the interested sophistry of merchants and manufacturers confounded the common-sense of mankind.”

            From another point of view, free trade was considered as one aspect of the specialization of labor:

            It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor. The farmer attempts to make neither the one nor the other, but employs those different artificers. All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbors, and to purchase with a part of its produce, or what is the same thing, with the price of a part of it, whatever else they have occasion for. What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.

            But what ever led people to suppose that what was prudence in the conduct of every private family couldbe folly in that of a great kingdom? It was a whole network of fallacies, out of which mankind has still been unable to cut its way. And the chief of them was the central fallacy with which this book is concerned. It was that of considering merely the immediate effects of a tariff on special groups, and neglecting to consider its long-run effects on the whole community.

            2

            An American manufacturer of woolen sweaters goes to Congress or to the State Department and tells the committee or officials concerned that it would be a national disaster for them to remove or reduce the tariff on British sweaters. He now sells his sweaters for $15 each, but English manufacturers could sell their sweaters of the same quality for $10. A duty of $5, therefore, is needed to keep him in business. He is not thinking of himself, of course, but of the thousand men and women he employs, and of the people to whom their spending in turn gives employment. Throw them out of work, and you create unemployment and a fall in purchasing power, which would spread in ever-widening circles. And if he can prove that he really would be forced out of business if the tariff were removed or reduced, his argument against that action is regarded by Congress as conclusive.

            But the fallacy comes from looking merely at this manufacturer and his employees, or merely at the American sweater industry. It comes from noticing only the results that are immediately seen, and neglecting the results that are not seen because they are prevented from coming into existence.

            The lobbyists for tariff protection are continually putting forward arguments that are not factually correct. But let us assume that the facts in this case are precisely as the sweater manufacturer has stated them. Let us assume that a tariff of $5 a sweater is necessary for him to stay in business and provide employment at sweater-making for his workers.

            We have deliberately chosen the most unfavorable example of any for the removal of a tariff. We have not taken an argument for the imposition of a new tariff in order to bring a new industry into existence, but an argument for the retention of a tariff that has already brought an industry into existence, and cannot be repealed without hurting somebody.

            The tariff is repealed; the manufacturer goes out of business; a thousand workers are laid off; the particular tradesmen whom they patronized are hurt. This is the immediate result that is seen. But there are also results which, while much more difficult to trace, are no less immediate and no less real. For now sweaters that formerly cost $15 apiece can be bought for $10. Consumers can now buy the same quality of sweater for less money, or a much better one for the same money. If they buy the same quality of sweater, they not only get the sweater, but they have $5 left over, which they would not have had under the previous conditions, to buy something else. With the $10 that they pay for the imported sweater they help employment—as the American manufacturer no doubt predicted—in the sweater industry in England. With the $5 left over they help employment in any number of other industries in the United States.

            But the results do not end there. By buying English sweaters they furnish the English with dollars to buy American goods here. This, in fact (if I may here disregard such complications as multilateral exchange, loans, credits, gold movements, etc. which do not alter the end result) is the only way in which the British can eventually make use of these dollars. Because we have permitted the British to sell more to us, they are now able to buy more from us. They are, in fact, eventually forced to buy more from us if their dollar balances are not to remain perpetually unused. So, as a result of letting in more British goods, we must export more American goods. And though fewer people are now employed in the American sweater industry, more people are employed—and much more efficiently employed—in, say, the American automobile or washing-machine business. American employment on net balance has not gone down, but American and British production on net balance has gone up. Labor in each country is more fully employed in doing just those things that it does best, instead of being forced to do things that it does inefficiently or badly. Consumers in both countries are better off. They are able to buy what they want where they can get it cheapest. American consumers are better provided with sweaters, and British consumers are better provided with motor cars and washing machines.

            3

            Now let us look at the matter the other way round, and see the effect of imposing a tariff in the first place. Suppose that there had been no tariff on foreign knit goods, that Americans were accustomed to buying foreign sweaters without duty, and that the argument were then put forward that we could bring a sweater industry into existence by imposing a duty of $5 on sweaters.

            There would be nothing logically wrong with this argument so far as it went. The cost of British sweaters to the American consumer might thereby be forced so high that American manufacturers would find it profitable to enter the sweater business. But American consumers would be forced to subsidize this industry. On every American sweater they bought they would be forced in effect to pay a tax of $5 which would be collected from them in a higher price by the new sweater industry.

            Americans would be employed in a sweater industry who had not previously been employed in a sweater industry. That much is true. But there would be no net addition to the country’s industry or the country’s employment. Because the American consumer had to pay $5 more for the same quality of sweater he would have just that much less left over to buy anything else. He would have to reduce his expenditures by $5 somewhere else. In order that one industry might grow or come into existence, a hundred other industries would have to shrink. In order that 20,000 persons might be employed in a sweater industry, 20,000 fewer persons would be employed elsewhere.

            But the new industry would be visible. The number of its employees, the capital invested in it, the market value of its product in terms of dollars, could be easily counted. The neighbors could see the sweater workers going to and from the factory every day. The results would be palpable and direct. But the shrinkage of a hundred other industries, the loss of 20,000 other jobs somewhere else, would not be so easily noticed. It would be impossible for even the cleverest statistician to know precisely what the incidence of the loss of other jobs had been—precisely how many men and women had been laid off from each particular industry, precisely how much business each particular industry had lost—because consumers had to pay more for their sweaters. For a loss spread among all the other productive activities of the country would be comparatively minute for each. It would be impossible for anyone to know precisely how each consumer would have spent his extra $5 if he had been allowed to retain it. The overwhelming majority of the people, therefore, would probably suffer from the optical illusion that the new industry had cost us nothing.

            4

            It is important to notice that the new tariff on sweaters would not raise American wages. To be sure, it would enable Americans to work in the sweater industry at approximately the average level of American wages (for workers of their skill), instead of having to compete in that industry at the British level of wages. But there would be no increase of American wages in general as a result of the duty; for, as we have seen, there would be no net increase in the number of jobs provided, no net increase in the demand for goods, and no increase in labor productivity. Labor productivity would, in fact, be reduced as a result of the tariff.

            And this brings us to the real effect of a tariff wall. It is not merely that all its visible gains are offset by less obvious but no less real losses. It results, in fact, in a net loss to the country. For contrary to centuries of interested propaganda and disinterested confusion, the tariff reduces the American level of wages.

            Let us observe more clearly how it does this. We have seen that the added amount which consumers pay for a tariff-protected article leaves them just that much less with which to buy all other articles. There is here no net gain to industry as a whole. But as a result of the artificial barrier erected against foreign goods, American labor, capital and land are deflected from what they can do more efficiently to what they do less efficiently. Therefore, as a result of the tariff wall, the average productivity of American labor and capital is reduced.

            If we look at it now from the consumer’s point of view, we find that he can buy less with his money. Because he has to pay more for sweaters and other protected goods, he can buy less of everything else. The general purchasing power of his income has therefore been reduced. Whether the net effect of the tariff is to lower money wages or to raise money prices will depend upon the monetary policies that are followed. But what is clear is that the tariff—though it may increase wages above what they would have been in the protected industries—must on net balance, when all occupations are considered, reduce real wages.

            Only minds corrupted by generations of misleading propaganda can regard this conclusion as paradoxical. What other result could we expect from a policy of deliberately using our resources of capital and manpower in less efficient ways than we know how to use them? What other result could we expect from deliberately erecting artificial obstacles to trade and transportation?

            For the erection of tariff walls has the same effect as the erection of real walls. It is significant that the protectionists habitually use the language of warfare. They talk of “repelling an invasion” of foreign products. And the means they suggest in the fiscal field are like those of the battlefield. The tariff barriers that are put up to repel this invasion are like the tank traps, trenches and barbed-wire entanglements created to repel or slow down attempted invasion by a foreign army.

            And just as the foreign army is compelled to employ more expensive means to surmount those obstacles—bigger tanks, mine detectors, engineer corps to cut wires, ford streams and build bridges—so more expensive and efficient transportation means must be developed to surmount tariff obstacles. On the one hand, we try to reduce the cost of transportation between England and America, or Canada and the United States, by developing faster and more efficient ships, better roads and bridges, better locomotives and motor trucks. On the other hand, we offset this investment in efficient transportation by a tariff that makes it commercially even more difficult to transport goods than it was before. We make it a dollar cheaper to ship the sweaters, and then increase the tariff by two dollars to prevent the sweaters from being shipped. By reducing the freight that can be profitably carried, we reduce the value of the investment in transport efficiency.

            5

            The tariff has been described as a means of benefiting the producer at the expense of the consumer. In a sense this is correct. Those who favor it think only of the interests of the producers immediately benefited by the particular duties involved. They forget the interests of the consumers who are immediately injured by being forced to pay these duties. But it is wrong to think of the tariff issue as if it represented a conflict between the interests of producers as a unit against those of consumers as a unit. It is true that the tariff hurts all consumers as such. It is not true that it benefits all producers as such. On the contrary, as we have just seen, it helps the protected producers at the expense of all other American producers, and particularly of those who have a comparatively large potential export market.

            We can perhaps make this last point clearer by an exaggerated example. Suppose we make our tariff wall so high that it becomes absolutely prohibitive, and no imports come in from the outside world at all. Suppose, as a result of this, that the price of sweaters in America goes up only $5. Then American consumers, because they have to pay $5 more for a sweater, will spend on the average five cents less in each of a hundred other American industries. (The figures are chosen merely to illustrate a principle: there will, of course, be no such symmetrical distribution of the loss; moreover, the sweater industry itself will doubtless be hurt because of protection of still other industries. But these complications may be put aside for the moment.)

            Now because foreign industries will find their market in America totally cut off, they will get no dollar exchange, and therefore they will be unable to buy any American goods at all. As a result of this, American industries will suffer in direct proportion to the percentage of their sales previously made abroad. Those that will be most injured, in the first instance, will be such industries as raw cotton producers, copper producers, makers of sewing machines, agricultural machinery, typewriters and so on.

            A higher tariff wall, which, however, is not prohibitive, will produce the same kind of results as this, but merely to a smaller degree.

            The effect of a tariff, therefore, is to change the structure of American production. It changes the number of occupations, the kind of occupations, and the relative size of one industry as compared with another. It makes the industries in which we are comparatively inefficient larger, and the industries in which we are comparatively efficient smaller. Its net effect, therefore, is to reduce American efficiency, as well as to reduce efficiency in the countries with which we would otherwise have traded more largely.

            In the long run, notwithstanding the mountains of argument pro and con, a tariff is irrelevant to the question of employment. (True, sudden changes in the tariff, either upward or downward, can create temporary unemployment, as they force corresponding changes in the structure of production. Such sudden changes can even cause a depression.) But a tariff is not irrelevant to the question of wages. In the long run it always reduces real wages, because it reduces efficiency, production and wealth.

            Thus all the chief tariff fallacies stem from the central fallacy with which this book is concerned. They are the result of looking only at the immediate effects of a single tariff rate on one group of producers, and forgetting the long-run effects both on consumers as a whole and on all other producers.

            (I hear some reader asking: “Why not solve this by giving tariff protection to all producers?” But the fallacy here is that this cannot help producers uniformly, and cannot help at all domestic producers who already “outsell” foreign producers: these efficient producers must necessarily suffer from the diversion of purchasing power brought about by the tariff.)

            On the subject of the tariff we must keep in mind one final precaution. It is the same precaution that we found necessary in examining the effects of machinery. It is useless to deny that a tariff does benefit—or at least can benefit—special interests. True, it benefits them at the expense of everyone else. But it does benefit them. If one industry alone could get protection, while its owners and workers enjoyed the benefits of free trade in everything else they bought, that industry would benefit, even on net balance. As an attempt is made to extend the tariff blessings, however, even people in the protected industries, both as producers and consumers, begin to suffer from other people’s protection, and may finally be worse off even on net balance than if neither they nor anybody else had protection.

            But we should not deny, as enthusiastic free traders have so often done, the possibility of these tariff benefits to special groups. We should not pretend, for example, that a reduction of the tariff would help everybody and hurt nobody. It is true that its reduction would help the country on net balance. But somebody would be hurt. Groups previously enjoying high protection would be hurt. That in fact is one reason why it is not good to bring such protected interests into existence in the first place. But clarity and candor of thinking compel us to see and acknowledge that some industries are right when they say that a removal of the tariff on their product would throw them out of business and throw their workers (at least temporarily) out of jobs. And if their workers have developed specialized skills, they may even suffer permanently, or until they have at long last learnt equal skills. In tracing the effects of tariffs, as in tracing the effects of machinery, we should endeavor to see all the chief effects, in both the short run and the long run, on all groups.

            As a postscript to this chapter I should add that its argument is not directed against all tariffs, including duties collected mainly for revenue, or to keep alive industries needed for war; nor is it directed against all arguments for tariffs. It is merely directed against the fallacy that a tariff on net balance “provides employment,” “raises wages,” or “protects the American standard of living.” It does none of these things; and so far as wages and the standard of living are concerned, it does the precise opposite. But an examination of duties imposed for other purposes would carry us beyond our present subject.

            Nor need we here examine the effect of import quotas, exchange controls, bilateralism and other devices in reducing, diverting or preventing international trade. Such devices have, in general, the same effects as high or prohibitive tariffs, and often worse effects. They present more complicated issues, but their net results can be traced through the same kind of reasoning that we have just applied to tariff barriers.

          • All you do is the fallacy of poisoning the well or ad hominem without ever really dealing with claims. (and then bizarrely claim I am fallacious without showing how or why – in other words, you seem to misunderstand what fallacy means and conflate it with being wrong).

            Now, before I later look at the claims you have made here, you appear not to have dealt with the actual facts of what I quoted about the textile industry.

          • Travelman

            He actually hasn’t dealt with a single point you’ve made.

            He’d make a good religious fundamentalist, being about as presuppositional as it’s possible to be. Which is also why he is both impossible to engage in sensible discussion, and incapable of dealing with the case you make. All he does is ignore the plethora of facts you’ve laid before him and retorted with a few paragraphs from his Mises ‘bible’.

            He thinks, and will continue to think, that he’s entirely right. The importance of the debate is that others reading it will see Mises for the libertarian foolishness it is.

          • Funnily enough I was going to talk about precisely this.

            In going to Mises to get some kind of personal accreditation, he is appealing to an ideological organisation to ratify and already held position (psychologically). I would never go to a “education” organisation for qualifications that was so ideologically biased since it takes the whole objectivity away from what you are ‘learning’.

            It really is akin to a Creationist going to Discovery.org to do some courses to ratify what they believe.

            And everything he uses is from Mises, such that he is defending himself in almost a circular fashion – “look, Mises is right because Mises is right – and here is the Mises evidence!”

            Which brings me on to yet another point which he has utterly failed to counter: pluralism. He is looking at a nebulous, as yet undescribed singular criterion for success (some kind of monetary growth or economic success in that narrow dimension) and builds his case solely around that, which becomes, as mentioned, almost circular.

            There are many things in society to consider: knowledge, morality, environment (biodiversity, econology etc), wellbeing, happiness, health, safety, spirituality, etc – all of which such free marketism says nothing or almost nothing about. It cannot arbitrate those matters.

            In other words, as a societal system (all pervasive as he aims for it to be), it is doomed to failure.

            This is clearly evident in how he evaluates Scandinavian countries presently.

            You and I know that looking at Global Peace Indices, wellbeing statuses and so on is vital for assessing the success of a society. He will happily ignore them in search of his one-tracked dogma.

            In philosophy of religion, for example, Scandinavia is held up as a paragon of excellence. And it is not because of free market economics, but sensible social and political organisation and policy.

            Societies are more complex than mere economics.

          • Scott CJ McKelvie

            Oh it was outlined by Jonathan, was it?

            Well outline this:

            http://mises.org/library/industrial-revolution-part-one

            trust you to hit out with your typical left-wing mixed economic nonsense.

          • I think you need to look up what fallacious means.

            1) Again, promissory note about destined for failure, without showing anything more than that.

            2) Absolutely no refutation of the points made, just more vague obfuscation – ie you are claiming for free market things that were clearly and demonstrably hallmarks of mixed economics

            3) “As for Britain, there was no government intervention between 1760 to 1830” – Are you KIDDING ME? Let’s see (and mercantilism was still in action until 1840, broadly SO YOUR CLAIMS ARE NONSENSE IN THAT LIGHT ALONE!), the Slave Trade Act of 1707, the growth of sectoral lobbying in that time, £600,000 paid in bounties to cod and herring fisheries between 1751 and 1782, £1m bounties paid to Brit herring fisheries between 1765 and 1797, large bounties on flax paid out in the late 1700s, 1785 harmonisation of British and Irish trade agreements in 1785, etc etc etc etc go do some history.

            “New economic historians” who are themselves skeptical of political influence in the economic success even agree that “economic growth was sluggish before 1815, if not 1850” (Gauci, p.5) Their views have anyway been robustly challenged by institutional economists.

            As Gauci concludes to his edited book Regulating the British Economy, 1660-1850 (ed Gauci, 2011):

            “the Glorious Revolution… did not herald a long-term course of de-regulation… Across the period,… the state’s intervention cannot be represented as the initial sovereignty of ‘mercantilism’ giving way to Smithian economic liberalism: primarily because our collection stresses political and economic competition as driving forces behind state intervention”

            4) This time period led to massive issues with externalities (which you have failed to deal with) which led even classical economists interested in the free market to get behind social and educational reform via the state (eg see Mcloskey “1780-1860: A Survey” in The Economic History of Britain Since 1700).

            You seem impervious to, I don’t know, researching your claims!

          • Scott CJ McKelvie

            Can see you’ve been reading history from the mainstream Marxist sources of the Industrial Revolution, the same old garbage the Mises Institute has already refuted. It’s okay, I’ll leave the argument here, I’ll let you think you’ve won something that you clearly haven’t.

          • Mises says, Mises says, Mises says…

            and then cop out

          • Travelman

            Nothing to do with the subject matter, but why is this post suddenly at the ‘top’, where normally it’s most recent? Or is it my PC?

          • I made it “sticky” for one reason or another. Will unsticky it tonight.

          • Travelman

            I don’t mind the post being up there, I particularly enjoyed this and the associated ones. I’m using the information in a small run-in I’m having with a local potential councillor (or maybe parliamentary, he’s still an idiot), whose views I can’t believe still exist (socialist, exact opposite of Scotty). He reminded of when I was at university in the early 70s (yes I’m that old) and it was trendy to be a Marxist.

            Happy days….

  • Luke Breuer

    @johnnyp76:disqus, have you dealt with the fact that the free market depends on consumers to properly value products, and that the phenomenon of the “impulse buy” completely alters what it means to “properly value”? The free market capitalism we have today might be utterly unrecognizable to Adam Smith.

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